AMENDED AND RESTATED
LOAN AGREEMENT
AMONG
CSS INDUSTRIES, INC.,
THE LENDING INSTITUTIONS LISTED HEREIN,
CORESTATES BANK, N.A., AS THE ADMINISTRATIVE AGENT
AND
MERRILL LYNCH & CO., AS THE SYNDICATION AGENT
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DATED AS OF JULY __, 1997
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS AND INTERPRETATION............................................................. 1
1.1 Terms Defined........................................................................ 1
1.2 Accounting Principles................................................................ 18
SECTION 2. THE LOAN................................................................................... 18
2.1 Revolving Line of Credit - Description............................................... 18
2.2 Letters of Credit.................................................................... 21
2.3 Voluntary Reduction of Commitment.................................................... 26
2.4 Advances, Conversions, Renewals and Payments......................................... 27
2.5 Interest............................................................................. 31
2.6 Fees................................................................................. 35
2.7 Prepayments.......................................................................... 36
2.8 Use of Proceeds...................................................................... 36
2.9 Special Provisions Governing LIBOR Based Rate
Advances............................................................................. 37
2.10 Capital Requirements, Etc............................................................ 41
2.11 Mandatory Prepayments/Commitment Reductions.......................................... 42
2.12 Net Payments......................................................................... 43
SECTION 3. CLOSING AND CONDITIONS PRECEDENT TO ADVANCES............................................... 45
3.1 Conditions Precedent to Closing...................................................... 45
3.2 Closing.............................................................................. 49
3.3 Conditions Precedent to all Advances................................................. 49
3.4 Waiver of Rights..................................................................... 50
3.5 Delivery of Documents................................................................ 50
SECTION 4. REPRESENTATIONS AND WARRANTIES............................................................. 51
4.1 Corporate Organization and Validity.................................................. 51
4.2 Places of Business................................................................... 52
4.3 Pending Litigation................................................................... 52
4.4 Title to Properties.................................................................. 52
4.5 Governmental Consent................................................................. 52
4.6 Taxes................................................................................ 52
4.7 Financial Statements................................................................. 53
4.8 Full Disclosure...................................................................... 53
4.9 Subsidiaries......................................................................... 53
4.10 Guarantees, Indebtedness, etc........................................................ 53
4.11 Government Regulations, etc.......................................................... 54
4.12 Business Interruptions............................................................... 56
4.13 Names. ............................................................................. 56
4.14 Other Associations................................................................... 56
4.15 Environmental Matters................................................................ 57
4.16 Regulation O......................................................................... 59
4.17 Capital Stock........................................................................ 59
4.18 Solvency............................................................................. 59
4.19 Interrelatedness of the Borrower and the Guarantors.................................. 60
SECTION 5. AFFIRMATIVE COVENANTS...................................................................... 60
5.1 Payment of Taxes and Claims.......................................................... 60
5.2 Maintenance of Properties and Corporate Existence.................................... 61
5.3 Litigation........................................................................... 62
5.4 Issue Taxes.......................................................................... 62
5.5 Lender Accounts...................................................................... 62
5.6 Employee Benefit Plans............................................................... 62
5.7 Financial and Business Information................................................... 63
5.8 Officers' Certificates............................................................... 65
5.9 Inspection........................................................................... 65
5.10 Tax Returns and Reports.............................................................. 66
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5.11 Information to Participants and Assignees............................................ 66
5.12 Material Adverse Developments........................................................ 66
5.13 Additional Parties................................................................... 66
5.14 Performance of Obligations. ......................................................... 67
5.15 Further Assurances................................................................... 67
5.16 Evidence of Intercompany Indebtedness................................................ 67
SECTION 6. NEGATIVE COVENANTS......................................................................... 68
6.1 Mergers.............................................................................. 68
6.2 Acquisitions......................................................................... 68
6.3 Liens and Encumbrances............................................................... 69
6.4 Transactions With Affiliates or Subsidiaries......................................... 70
6.5 Guarantees........................................................................... 71
6.6 Dividends and Redemptions............................................................ 71
6.7 Loans and Investments................................................................ 72
6.8 Use of Lenders' Name................................................................. 73
6.9 Amendment or Waivers of Certain Documents............................................ 73
6.10 Sale and Lease-Backs................................................................. 74
6.11 Business Conducted................................................................... 74
6.12 Indebtedness......................................................................... 74
6.13 Restrictions on Fundamental Changes; Asset Sales..................................... 75
6.14 Agreements Regarding Dividends....................................................... 75
6.15 Miscellaneous Covenants.............................................................. 76
SECTION 7. FINANCIAL COVENANTS......................................................................... 76
7.1 Fixed Charge Coverage Ratio.......................................................... 76
7.2 Minimum Consolidated Net Worth....................................................... 76
7.3 Ratio of Consolidated Funded Debt to Consolidated Capitalization..................... 77
7.4 Ratio of Consolidated EBITDA to Consolidated Interest Expense........................ 77
SECTION 8. DEFAULT.................................................................................... 77
8.1 Events of Default.................................................................... 77
8.2 Rights and Remedies on Default....................................................... 80
8.3 Nature of Remedies................................................................... 81
8.4 Set-Off.............................................................................. 82
SECTION 9. THE ADMINISTRATIVE AGENT................................................................... 82
9.1 Appointment and Authorization........................................................ 82
9.2 General Immunity..................................................................... 82
9.3 Consultation with Counsel............................................................ 83
9.4 Documents............................................................................ 83
9.5 Rights as a Lender................................................................... 83
9.6 Responsibility of the Administrative Agent........................................... 83
9.7 Collections and Disbursements. ..................................................... 84
9.8 Indemnification...................................................................... 86
9.9 Expenses. .......................................................................... 86
9.10 No Reliance.......................................................................... 87
9.11 Reporting............................................................................ 87
9.12 Removal of the Administrative Agent.................................................. 87
9.13 Action on Instructions of Lenders.................................................... 88
9.14 Several Obligations.................................................................. 88
9.15 Amendments........................................................................... 88
SECTION 10. MISCELLANEOUS............................................................................. 90
10.1 GOVERNING LAW........................................................................ 90
10.2 Integrated Agreement................................................................. 90
10.3 Omission or Delay Not Waiver......................................................... 90
10.4 Time................................................................................. 90
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10.5 Expenses of the Administrative Agent, the Syndication Agent and Lenders.............. 90
10.6 Brokerage............................................................................ 91
10.7 Notices. ........................................................................... 91
10.8 Headings............................................................................. 93
10.9 Survival............................................................................. 93
10.10 Successors and Assigns............................................................... 93
10.11 Counterparts......................................................................... 95
10.12 Modification......................................................................... 95
10.13 Signatories.......................................................................... 95
10.14 Third Parties........................................................................ 95
10.15 Indemnification...................................................................... 96
10.16 Discharge of Taxes, The Borrower's Obligations, Etc.................................. 97
10.17 Withholding and Other Tax Liabilities................................................ 98
10.18 Consent to Jurisdiction; Venue....................................................... 99
10.19 Waivers..............................................................................100
10.20 Severability.........................................................................101
10.21 Independence of Representations, Warranties and Covenants............................101
10.22 Obligations Several; Independent Nature of Lenders' Rights...........................101
10.23 Prior Understandings.................................................................101
10.24 Confidentiality......................................................................101
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AMENDED AND RESTATED
LOAN AGREEMENT
This Amended and Restated Loan Agreement ("Agreement") is dated as of
this ____ day of July, 1997 by and among CSS Industries Inc., a Delaware
corporation ("Borrower"), the lending institutions listed in Annex I attached
hereto and incorporated herein by reference (each a "Lender" and collectively,
the "Lenders"), CoreStates Bank, N.A., a national banking association, as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent") and Merrill Lynch & Co., as the syndication agent (in such capacity, the
"Syndication Agent").
BACKGROUND
A. The Borrower and certain of the Lenders are currently parties to a
Loan Agreement dated November 15, 1995 ("Existing Loan Agreement") whereby such
Lenders established financing arrangements for the Borrower under which such
Lenders agreed to make loans and extensions of credit to the Borrower under the
terms and provisions therein.
B. The Borrower and Lenders desire to amend and restate the terms of
(or in the case of certain new Lenders, join) such financing arrangements as
hereinafter set forth.
C. The parties desire to define the terms and conditions of their
relationship in writing.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
SECTION 1. DEFINITIONS AND INTERPRETATION.
1.1 Terms Defined. As used in this Agreement, the
following terms have the following respective meanings:
Accounts - All of the "accounts" (as that term is defined in
Section 9-106 of the Uniform Commercial Code as in effect in the State of New
York) of the Borrower and each of its Subsidiaries, whether now existing or
hereafter arising.
Acquisition Advances - Advances under the Revolving Credit to
fund Permitted Acquisitions excluding the amount of such Advances which are
determined by Administrative Agent, in its reasonable discretion, to be used to
fund the working capital needs of the acquired Person.
Adjustment Amount - As of each date of determination hereof,
the excess of (a) the sum of (i) the outstanding portion of the aggregate amount
of Acquisition Advances, if any, made during the twelve (12) month period
commencing April 1 and ending March 31 (herein a "Yearly Period") preceding such
date (the first Yearly Period, for the purposes hereof, commencing April 1,
1997) plus (ii) an amount equal to the aggregate of the following percentage of
the outstanding portion of the Acquisition Advances, if any, made during each of
the three (3) immediately preceding Yearly Periods (not including any Yearly
Period commencing prior to April 1, 1997): 75% in the case of outstanding
Acquisition Advances made during the second Yearly Period preceding such date,
50% in the case of outstanding Acquisition Advances made during the third Yearly
Period preceding such date and 25% in the case of outstanding Acquisition
Advances made during the fourth Yearly Period preceding such date over (b) the
aggregate principal amount of Unsecured Senior Notes, if any, issued by the
Borrower from the Closing Date through such date.
Adjusted LIBOR Rate - As applied to a LIBOR Based Rate
Advance, for any LIBOR Interest Period, the rate per annum (rounded upwards, if
necessary to the next 1/16 of 1%) determined pursuant to the following formula:
Adjusted LIBOR Rate = LIBOR Rate
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(1 - Reserve Percentage)
For purposes hereof, "LIBOR Rate", with respect to a LIBOR Interest Period,
shall mean the arithmetic average of the rates of interest per annum (rounded
upwards, if necessary toe London Interbank market on or about eleven o'clock
(11:00) a.m. London time two (2) Business Days prior to the commencement of such
LIBOR Interest Period on amounts substantially equal to such LIBOR Based Rate
Advance as to which the Borrower may elect the LIBOR Based Rate to be applicable
with a maturity of comparable duration to the LIBOR Interest Period selected by
the Borrower for such LIBOR Based Rate Advance.
Advance(s) - Any monies advanced or credit extended to the
Borrower by any Lender under the Revolving Credit, including without limitation,
cash Advances, Swing Line Advances and the issuance by Fronting Lender of
Letters of Credit.
Affiliate - With respect to any Person (the "Specified
Person"), (a) any Person which directly or indirectly controls, or is controlled
by, or is under common control with, the Specified Person, and (b) any director
or officer (or, in the case of a Person which is not a corporation, any
individual having analogous powers) of the Specified Person or of a Person who
is an Affiliate of the Specified Person within the meaning of the preceding
clause (a); provided, however, that no Lender nor any Affiliate of any Lender
shall be deemed to be an Affiliate of the Borrower or any of its Subsidiaries.
For purposes of the preceding sentence, "control" of a Person shall mean (i) the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by contract or otherwise, and (ii) in any case
shall include direct or indirect ownership (beneficially or of record) of, or
direct or indirect power to vote, 25% or more of the outstanding shares of any
class of capital stock of such Person (or in the case of a Person that is not a
corporation, 25% or more of any class of equity interest).
Agents - The Administrative Agent and the Syndication Agent,
collectively.
Alter(ii) one half of one (0.5%) percent per annum in excess of the Fed Funds
Rate. The calculation and determination of the rates described in subsections
(i) and (ii) above shall be made daily by the Administrative Agent and such
determination shall, absent manifest error, be final, conclusive and binding
upon all parties hereto. Changes in the Alternate Base Rate shall become
effective on the same day as the Administrative Agent changes its Prime Rate or
a change occurs in the Fed Funds Rate, depending upon which rate is applicable
on that day to the Alternate Base Rate.
Alternate Base Rate Advance - Any Advance on which interest
accrues at the Alternate Base Rate.
Asset Sale - The sale, transfer or other disposition by the
Borrower to any Person other than a Guarantor or by any Subsidiary of the
Borrower to any Person other than the Borrower or another Guarantor of (a) any
of the existing or future capital stock or partnership interests (other than an
original issue of the stock or partnership interests of a Person where the
issued shares or partnership interests are issued to Borrower or a
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Guarantor) of any Subsidiary of the Borrower or (b) any other Property, now
owned or hereafter acquired, of any nature whatsoever in any transaction or
series of related transactions (including any or all assets and business of any
division or line of business and further including intangible assets) of the
Borrower or any of its Subsidiaries, excluding (i) sales, transfers or other
dispositions of inventory or other Property in the ordinary course of business
of the Borrower or any of its Subsidiaries or the trade-in or replacement of
assets in the ordinary course of business of the Borrower or any of its
Subsidiaries and (ii) sale of the Tuggle Road Building.
Asset Sale Prepayment Amount - (a) In the case of Entity Asset
Sales, the amount by which the aggregate Transferred EBITDA in any fiscal year
of the Borrower exceeds the Transferred EBITDA Threshold and (b) in the case of
Partial Asset Sales, the amount by which the Transferred Assets in any fiscal
year of the Borrower exceeds the Transferred Asset Threshold.
Asset Sale Prepayment Event - The occurrence of the
consummation of (a) any Entity Asset Sale as a result of which the Transferred
EBITDA in any fiscal year of the Borrower exceeds the Transferred EBITDA
Threshold and (b) any Partial Asset Sale as a result of which the Transferred
Assets in any fiscal year of Borrower exceeds the Transferred Asset Threshold.
In hreshold or the Transferred Assets exceeds the Transferred Asset Threshold in
such fiscal year, an Asset Sale Prepayment Event shall be deemed to have
occurred for all purposes herein.
Authorized Officer - Any executive officer of the Borrower and
the corporate accounting manager of Borrower.
Available Commitment - $225,000,000 plus those portions of the
Reserve Amount designated, from time to time, by Borrower in accordance with
Section 2.1(a)(iii) as being part of the Available Commitment.
Available Commitment Fee - Section 2.6(a).
Borrowing - The making, pursuant to a Notice of Borrowing and
the terms of this Agreement, of a cash Advance to the Borrower from all of the
Lenders on a pro rata basis on a given date (or resulting from conversions on a
given date) having, in the case of LIBOR Based Rate Advances, the same LIBOR
Interest Periods.
Business Day - A day other than Saturday or Sunday when banks
are generally open for business in Philadelphia, Pennsylvania and New York, New
York; provided, that when used in connection with a LIBOR Based Rate Advance,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
Cash Proceeds - With respect to any Asset Sale or Equity
Offering, the aggregate cash payments received by the Borrower and/or any of its
Subsidiaries from such Asset Sale or Equity Offering.
Change of Control - If (a) any "person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act), excluding Jack
Farber and/or any member(s) of his immediately family, and/or any trust under
which Jack Farber and/or any member(s) of his immediate family hold the legal
and equitable interests, is or becomes the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all securities that such person has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of more than 50% of the total
voting power of the issued and outstanding voting stock of the Borrower normally
entitled to vote in the election of directors of the Borrower or (b) during any
consecutive two-year period, individuals who at the beginning of
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such period constituted the Board of Directors of Borrower (together with any
new directors whose election to the Board of Directors or whose
nominatioirectors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors then in office.
Cleo - Cleo Inc., a Tennessee corporation.
Closing - Section 3.2.
Closing Date - Section 3.2.
Consolidated Amortization Expense - For any Person, for any
period, the consolidated amortization expense of such Person for such period,
determined on a consolidated basis for such Person and its consolidated
Subsidiaries.
Consolidated Capital Expenditures - For any Person, for any
period, the aggregate gross increase during that period in the property, plant
or equipment reflected in the consolidated balance sheet of such Person and its
consolidated Subsidiaries, but excluding expenditures made in connection with
the replacement, substitution or restoration of assets (a) to the extent
financed from insurance proceeds paid on account of the loss of or damage to the
assets being replaced or restored or (b) with awards of compensation arising
from the taking by eminent domain or condemnation of the assets being replaced;
provided, however, that Consolidated Capital Expenditures shall in any event
exclude the purchase price paid in connection with the acquisition of any other
Person (including through the purchase of all of the capital stock or other
ownership interests of such Person or through merger or consolidation) to the
extent allocable to property, plant and equipment.
Consolidated Capitalization - For any Person, at any time, the
sum of such Person's (a) Consolidated Total Debt plus (b) Consolidated Net
Worth, determined on a consolidated basis for such Person and its consolidated
Subsidiaries.
Consolidated Depreciation Expense - For any Person, for any
period, the consolidated depreciation expense of such Person for such period,
determined on a consolidated basis for such Person and its consolidated
Subsidiaries.
Consolidated EBITDA - For any Person, for any period, the
difference between (a) the sum of the amounts for such period of (i)
Consolidated Net Income, (ii) Consolidated Tax Expense, (iii) Consolidated
Interest Expense, (iv) Consolidated Amortization Expense and (v) Consolidated
Depreciation Expense (with respect to clauses (ii) through (v), to the extent
such amounts were deducted in computing Consolidated Net Income) less (b) the
amounts for such period of after-tax net gains on sales of fixed assets and
other after-tax extraordinary gains to the extent included in Consolidated Net
Income, excluding sales in the ordinary course of business, all as determined on
a consolidated basis for such Person and its consolidated Subsidiaries.
Consolidated Funded Debt - For any Person, on any date,
without duplication, the aggregate outstanding principal amount of Indebtedness
(except the items described in clauses (f) and (g) of the definition of
"Indebtedness" to the extent no obligation with respect to such items is
recorded on a balance sheet of such Person prepared in accordance with GAAP) of
such Person and its consolidated Subsidiaries which has a final maturity of more
than one year after the creation of such Indebtedness or which is renewable or
extendable, at the option of such Person, for a period of more than one year
from the creation of such Indebtedness, all determined on a
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consolidated basis after elimination of all intercompany items. The Obligations
hereunder shall not be included in determining the Consolidated Funded Debt of
Borrower, provided, however, that an amount equal to the Reduced Level which, as
of the date Borrower's Consolidated Funded Debt is being determined, is
projected to be applicable in the first fiscal quarter of the next succeeding
year, shall be included in the calculation of Consolidated Funded Debt.
Consolidated Interest Expense - For any Person, for any
period, the total interest expense of such Person and its consolidated
Subsidiaries, as would be shown on an income statement prepared in accordance
with GAAP.
Consolidated Net Income - For any Person, for any period, the
net income (or loss) of such Person and its Subsidiaries on a consolidated basis
for such period taken as a single accounting period determined on a consolidated
basis for such Person and its consolidated Subsidiaries; provided, however, that
there shall be excluded (a) the income (or loss) of any other Person (other than
Subsidiaries of such Person) in which any third Person (other than such Person
or any of its Subsidiaries) has a joint interest, except to the extent of the
amount of cash dividends or other cash distributions actually paid to such
Person or any of its Subsidiaries by such other Person during such period
(subject to clause (c) below), (b) the income (or loss) of any other Person
accrued prior to the date it becomes a consolidated Subsidiary of such Person or
is merged into or consolidated with such Person or any of its consolidated
Subsidiaries or such other Person's assets are acquired by such Person or any of
its consolidated Subsidiaries, except (with respect to a Subsidiary previously
accounted for on the equity basis of accounting) to the extent of the income (or
loss) actually paid to such Person or any of its Subsidiaries by such other
Person relating to such period in cash, and (c) the income of any consolidated
Subsidiary of such Person to the extent that the declaration or payment of
dividends or similar distributions by that consolidated Subsidiary of that
income is not at the time permitted by operation of the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that consolidated Subsidiary, except to
the extent of the cash dividends or cash distributions actually paid to such
Person or any of its Subsidiaries by such other Person during such period;
provided, however, that income generated in connection with a waiver of any of
the provisions hereof shall not be included for any purposes hereof.
Consolidated Net Worth - For any Person, at any time of
determination thereof, the sum of the capital stock and additional paid-in
capital plus retained earnings (or minus accumulated deficit), exclusive of any
write-ups of such Person and its consolidated Subsidiaries, all as determined on
a consolidated basis for such Person and its consolidated Subsidiaries.
Consolidated Rental Payments - For any period, the aggregate
amount of all rents paid or to be incurred under all operating leases of the
Borrower and the Subsidiaries of the Borrower as lessees (net of sublease
income) during such period.
Consolidated Tax Expense - For any Person, for any period, the
consolidated income tax expense and/or benefit of such Person for such period,
determined on a consolidated basis for such Person and its consolidated
Subsidiaries.
Consolidated Total Assets - For any Person, all of the assets
of such Person as would be shown on such Person's balance sheet prepared in
accordance with GAAP, determined on a consolidated basis for such Person and its
consolidated Subsidiaries.
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Consolidated Total Debt - For any Person, on any date, without
duplication, the aggregate outstanding principal amount of Indebtedness (except
the items described in clauses (c), (f) and (g) of the definition of
"Indebtedness" to the extent no obligation with respect to such items is
recorded on a balance sheet of such Person prepared in accordance with GAAP) of
such Person and its consolidated Subsidiaries including, without limitation, all
Obligations hereunder, all determined on a consolidated basis after elimination
of all intercompany items. Cash Advances and Reimbursement Obligations shall be
included in the calculation of Consolidated Total Debt by using the average of
the outstanding daily amounts thereof during the respective four (4) quarter
period ending on the date of determination thereof.
CoreStates - CoreStates Bank, N.A.
Default - Any event, act, condition or occurrence which with
notice, or lapse of time or both, would constitute an Event of Default
hereunder.
EBITDA - Shall have the meaning ascribed to the term
"Consolidated EBITDA" as set forth herein except the calculation of EBITDA
(including the calculation of each of its components) shall be done on an
unconsolidated basis.
Employee Benefit Plan - Section 4.11(c).
Entity Asset Sale - An Asset Sale representing the sale of
stock of a Subsidiary of Borrower or an Asset Sale representing the sale of all
or substantially all of the assets of Borrower or any Subsidiary of Borrower.
The determination of whether a given Asset Sale represents substantially all of
the assets of Borrower or a Subsidiary of Borrower sha
Environmental Laws - The common law and all applicable
Federal, state, local and foreign laws or regulations, codes, orders, decrees,
judgments or injunctions issued, promulgated, approved or entered thereunder,
now or hereafter in effect, relating to pollution or protection of the
environment or to health or safety as either relates to any Hazardous Materials,
including, without limitation, laws relating to (a) emissions, discharges,
releases or threatened releases of Hazardous Materials into the environment
(including ambient air, indoor air, surface water, ground water, land surface or
subsurface strata), (b) the manufacture, processing, distribution, use,
generation, treatment, storage, disposal, transport, shipping or handling of
Hazardous Materials, and (c) underground and above-ground storage tanks, and
related piping, and emissions, discharges, releases or threatened releases
therefrom.
Equity Offering - The sale by the Borrower of any of its
capital stock in any public or private transaction, except (a) any nonredeemable
capital stock of the Borrower issued in exchange for or upon conversion of any
Indebtedness of the Borrower or any of its Subsidiaries, (b) any issuance in
connection with the exercise of any stock options, (c) the issuance of
nonredeemable capital stock in connection with a Permitted Acquisition or (d)
any capital stock issued in connection with employee incentive plans or dividend
reinvestment plans.
ERISA - The Employee Retirement Income Security Act of 1972,
as the same may be amended, from time to time.
Event of Default - Section 8.1.
Exchange Act - The Securities Exchange Act of 1934, as
amended, together with all rules and regulations promulgated in connection
therewith.
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Existing Debt to Lenders - The existing Indebtedness of the
Borrower and/or any or all of its Subsidiaries under the Existing Loan Agreement
and the documents, instruments and agreements related thereto.
Existing Debt of the Borrower - The Indebtedness of the
Borrower and its Subsidiaries as set forth on Schedule "4.10" attached hereto.
Expenses - Section 10.5.
Facility Limit - $300,000,000, as such amount may be reduced
from time to time pursuant to Section 2.3 or Section 2.11 herein.
Fed Funds Rate - On any day, the effective rate of interest
charged by the Federal Reserve Bank of New York for overnight federal funds in
New York as reported by the Federal Reserve Bank in New York for such day.
Financial Statements - The financial statements of Borrower
previously furnished to the Administrative Agent, as more fully described on
Schedule "1.1(c)" attached hereto and incorporated herein by reference.
First Tier Subsidiary - A Subsidiary of Borrower, the capital
stock of which is owned directly by Borrower.
Fixed Charge Coverage Ratio - For any period, the ratio of (a)
the sum of the Borrower's (i) Consolidated EBITDA for such period less (ii)
Consolidated Capital Expenditures for such period plus (iii) Consolidated Rental
Payments for such period to (b) the sum of the (i) current portion of principal
on all long-term Indebtedness (excluding the Revolving Credit), plus (ii)
Consolidated Interest Expense (including interest in respect of the Revolving
Credit), plus (iii) Consolidated Tax Expense, plus (iv) Consolidated Rental
Payments for such period.
Fronting Fee - Section 2.6(b)(ii).
Fronting Lender - CoreStates (or an Affiliate of CoreStates,
if applicable), as the issuer of Letters of Credit under this Agreement.
GAAP - Generally accepted accounting principles applied in a
manner consistent with the most recent audited financial statements of the
Borrower prepared as of December 31, 1996 and furnished to the Agents.
Governmental Authority - Any government or political
subdivision or any agency, authority, bureau, central bank, commission,
department or instrumentality of either, or any court, tribunal, grand jury or
arbitrator (to the extent binding on the Borrower or any of its Subsidiaries),
in each case whether foreign or domestic.
Guarantee(s) - Guarantees substantially in the form of Exhibit
"1.1(a)" attached hereto and incorporated herein by reference.
Guarantors - Each of The Paper Magic Group, Inc., a
Pennsylvania corporation, Berwick Delaware, Inc., a Delaware corporation,
Berwick Industries, Inc., a Pennsylvania corporation, Cleo, Cleo Delaware, Inc.,
a Delaware corporation, Rapidforms, Inc., a New Jersey corporation, Philadelphia
Industries, Inc., a Delaware corporation, LLM Holdings, Inc., a Delaware
corporation, Rapdel, Inc., a Delaware corporation, The Paper Magic Group, Inc.,
a Delaware corporation, and each Person which executes a Guarantee after the
Closing Date.
Hazardous Materials - Any pollutant, contaminant, hazardous or
toxic substance, hazardous material, hazardous waste, hazardous constituent,
asbestos or asbestos-containing material, petroleum, including crude oil and
7
any fraction thereof, or other chemicals, substances or materials subject to
regulation under any Environmental Law.
Indebtedness - With respect to any Person, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) the
deferred purchase price of assets or services which in accordance with GAAP
would be shown as a liability on the balance sheet of such Person, (c) the face
amount of all outstanding letters of credit issued for the account of such
Person and, without duplication, all drafts drawn thereunder, (d) all
Indebtedness of a second Person secured by any Lien on any Property owned by
such first Person, whether or not such Indebtedness has been assumed by such
first Person, limited to the fair market value of the Property subject to such
Lien, (e) all capitalized lease obligations of such Person, (f) all obligations
of such Person to pay a specified purchase price for goods or services whether
or not delivered or accepted, i.e., take-or-pay and similar obligations, (g) all
obligations of such Person under interest rate agreements, (h) without
duplication, all contingent obligations of such Person required to be reflected
as a liability on the balance sheet of such Person prepared in accordance with
GAAP, (i) all obligations of such Person evidenced by bonds, debentures, notes
or other similar instruments required to be reflected as a liability on the
balance sheet of such Person prepared in accordance with GAAP, (j) all
obligations of such Person upon which interest charges are customarily paid, and
(k) current obligations of such Person to purchase, redeem, retire, defease or
otherwise acquire for value any capital stock of such Person or any warrants,
rights or options to acquire such capital stock (with redeemable preferred stock
being valued at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends); provided, however, that
Indebtedness shall not include trade payables, accrued expenses, accrued
dividends, deferred compensation, accrued income taxes, deferred income taxes
and minority interests in Subsidiaries.
Intercompany Notes - Section 5.16.
Interest Rate Determination Date - With respect to a LIBOR
Based Rate Advance, the date which is two (2) Business Days prior to the
commencement of the LIBOR Interest Period for such Borrowing.
Inventory - All of the "inventory" (as that term is defined in
Section 9-109 of the Uniform Commercial Code as in effect in the State of New
York) of the Borrower and its Subsidiaries, whether now existing or hereinafter
acquired or created.
Investments - Investments of any Person shall mean (i) any
direct or indirect purchase or other acquisition of any share of capital stock,
evidence of Indebtedness or other security issued by any other Person, (ii) any
loan, advance (other than advance to employees for travel expenses, drawing
accounts and similar expenditures extended in the ordinary course and consistent
with past practice) or extensithe capital of, any other Person, including any
guarantee or Indebtedness of any other Person and any joint venture, (iii) any
commitment or option to make an investment if, in the case of an option, the
consideration therefor exceeds $1,000,000 and (iv) any capital contribution to
any other Person; and any of the foregoing shall be considered an Investment
whether such investment is acquired by purchase, exchange, issuance of stock or
other securities, merger, reorganization or any other method. Notwithstanding
the foregoing, non-speculative interest rate hedging arrangements shall not be
considered Investments.
Knowledge - Whenever used in this Agreement, the actual
knowledge of any executive officer of the Borrower or of the president of any of
the Subsidiaries.
L/C Commitment - $20,000,000.
8
L/C Fees - Section 2.6(b)(i).
Lender(s) - The lending institutions listed on Annex I
attached hereto and incorporated herein by reference and any assignees thereof
in accordance with Section 10.10 hereof.
Letter of Credit or Letters of Credit - (a) Standby letter or
letters of credit, and (b) commercial letter or letters of credit, in each case
issued or to be issued by the Fronting Lender for the account of the Borrower
pursuant to Section 2.2 herein.
Liabilities - All liabilities of every kind of the Borrower as
would be shown on a consolidated financial statement of the Borrower prepared in
accordance with GAAP.
LIBOR Based Rate - Section 2.5(b)(i).
LIBOR Based Rate Advance - Any Advance on which interest
accrues at the LIBOR Based Rate.
LIBOR Based Rate Margin - Section 2.5(b)(i).
LIBOR Interest Period - Section 2.5(b)(ii).
Lien - Other than as expressly excluded in the next sentence,
any interest in Property securing an obligation owed to, or a claim by, a Person
other than the owner of the Property, whether such interest is based on the
common law, statute or contract, and including, but not limited to, the security
interest or lien arising from a mortgage, encumbrance, pledge, conditional sale
or trust receipt or a lease, consignment or bailment for security purposes. The
term "Lien" shall include without limitation, reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances affecting Property other than
Property which is leased by the Borrower or any of its Subsidiaries or for which
the Borrower or any of its Subsidiaries has an unexercised option to purchase
such Property and other than those which would not materially adversely
interfere with the Borrower's or any of the Borrower's Subsidiary's use of the
Property and would not materially detract from the value of the Property. For
the purposes of this Agreement, the Borrower and each of its Subsidiaries shall
be deemed to be the owner of any Property which it has acquired or holds subject
to a conditional sale agreement or other arrangement pursuant to which title to
the Property has been retained by or vested in some other Person for security
purposes.
Loan Documents - This Agreement, the Restated Revolving Credit
Notes, the Restated Swing Line Note, the Guarantees and all agreements,
instruments and documents executed and/or delivered in connection herewith or
therewith, all as may be amended, supplemented, replaced, restated or superseded
from time
to time.
Losses - Of any Person, the losses, liabilities, claims
(including those based upon negligence, strict or absolute liability and
liability in tort), damages, expenses, obligations, penalties, actions,
judgments, Liens, penalties, fines, suits, costs or disbursements of any kind or
nature whatsoever (including reasonable fees and expenses of counsel in
connection with any Proceeding commenced or threatened, whether or not such
Person shall be designated a party thereto) at any time (including following the
payment of the Obligations and/or the termination of the Revolving Credit)
incurred by, imposed on or asserted against such Person.
9
Majority Lenders - The Lenders holding Pro Rata Percentages
aggregating more than 50% of the total Revolving Credit.
Mandatory Loan - Section 2.4(b)(iii)(B).
Material Adverse Effect - With respect to any Person and its
Subsidiaries, (a) any material adverse effect (both before and after giving
effect to the transactions contemplated by this Agreement and the other Loan
Documents) with respect to the business, assets, properties, financial
condition, stockholders' equity, contingent liabilities, prospects, material
agreements or results of operations of such Person and its Subsidiaries, taken
as one enterprise on a consolidated basis, or (b) any fact or circumstance that,
singly or in the aggregate with any other fact or circumstance, has a reasonable
likelihood of resulting in or leading to (i) a material adverse efereunder or
under any other Loan Document or the inability of the Lenders to enforce in any
material respect their rights purported to be granted hereunder or under any
other Loan Document, or (iii) a material adverse effect on the ability of the
Borrower and its Subsidiaries taken as a whole on a consolidated basis to effect
(including hindering or unduly delaying) the transactions contemplated by this
Agreement and the other Loan Documents on the terms contemplated hereby and
thereby.
Maturity Date - April 30, 2001.
Moody's - Moody's Investors Service, Inc.
Net Cash Proceeds from Equity Offerings - With respect to any
Equity Offering, the Cash Proceeds resulting therefrom net of reasonable
expenses of such offering.
Notice of Borrowing - Section 2.4(b)(ii).
Obligations - All existing and future liabilities and
obligations of every kind or nature at any time owing by the Borrower to any one
or more of the Lenders, the Fronting Lender or to either or both of the Agents,
whether joint or several, related or unrelated, primary or secondary, matured or
contingent, due or to become due, and whether principal, interest, fees or
Expenses, including without limitation Obligations in respect of the Revolving
Credit whether related to cash Advances or Letters of Credit (whether drawn or
undrawn).
Outstandings - At any time, the sum of the (a) aggregate
amount of all cash Advances outstanding hereunder, and (b) face amount of all
Letters of Credit and all outstanding Reimbursement Obligations.
Partial Asset Sale - Any Asset Sale other than an Entity Asset
Sale.
Permitted Acquisitions - Section 6.2.
Permitted Liens - Section 6.3.
Person - An individual, partnership, corporation, limited
liability company, limited liability partnership, trust, unincorporated
association or organization, joint venture or any other entity.
Prime Rate - That rate so designated by the Administrative
Agent from time to time as its prime rate of interest, which is not necessarily
the lowest or best rate of interest charged by the Administrative Agent.
Pro Rata Percentages - Section 2.1(a)(i).
Pro Rata Shares - Section 2.1(a)(i).
10
Proceeding - Any claim, action, judgment, suit, hearing,
governmental investigation, arbitration (to the extent binding on the Borrower
or any of its Subsidiaries) or proceeding, including by or before any
Governmental Authority.
Property - Any existing or future interest of the Borrower or
any of its Subsidiaries in any existing or future property or asset of any kind
or nature, whether real, personal or mixed, or tangible or intangible, now owned
or hereafter acquired or created (including without limitation the capital stock
of any Subsidiary).
Quarterly Compliance Certificate - Section 5.8.
Real Property - All right, title and interest of the Borrower
or any of its Subsidiaries (including any leasehold estate) in and to any parcel
of real property owned, leased or operated by the Borrower or any of its
Subsidiaries together with, in each case, all improvements and appurtenant
fixtures, equipment, personal property, easements and other property and rights
incidental to the ownership, lease or operation thereof.
Reduced Level - Section 2.11(d).
Regular Advances - Advances other than Swing Line
Advances.
Regulation D - Regulation D of the Board of Governors of the
Federal Reserve System, comprising Part 204 of Title 12, Code of Federal
Regulations, as amended, and any successor thereto.
Reimbursement Obligations - Section 2.2(c).
Reserve - For any day, that reserve (expressed as a decimal)
which is in effect (whether or not actually incurred) with respect to a Lender
(or any Affiliate of such Lender if applicable pursuant to Section 2.9(e)) on
such day, as prescribed by the Board of Governors of the Federal Reserve System
(or any successor or any other banking authority to which a Lender (or any
Affiliate of such Lender if applicable pursuant to Section 2.9(e)) is subject
including any board or governmental or administrative agency of the United
States or any other jurisdiction to which a Lender (or any Affiliate of such
Lender if applicable pursuant to Section 2.9(e)) is subject), for determining
the maximum reserve requirement (including without limitation any basic,
supplemental, marginal or emergency reserves) for Eurocurrency Liabilities as
defined in Regulation D.
Reserve Amount - $75,000,000, less that portion thereof which
Borrower designates from time to time in writing to the Administrative Agent as
being part of the Available Commitment.
Reserve Amount Fee - Section 2.6(a)(ii).
Reserve Percentage - For a Lender (or any Affiliate of such
Lender if applicable pursuant to Section 2.9(e)) on any day, that percentage
(expressed as a decimal) which is in effect on such day, prescribed by the Board
of Governors of the Federal Reserve System (or any successor or any other
banking authority to which a Lender (or any Affiliate of such Lender if
applicable pursuant to Section 2.9(e)) is subject, including any board or
governmental or administrative agency of the United States or any other
jurisdiction to which a Lender (or any Affiliate of such Lender if applicable
pursuant to Section 2.9(e)) is subject), for determining the maximum reserve
requirement (including without limitation any basic, supplemental, marginal or
emergency reserves) for (a) deposits of United States dollars or (b)
11
Eurocurrency Liabilities as defined in Regulation D, in each case applicable to
a LIBOR Based Rate Advance(s) subject to an Adjusted LIBOR Rate. The Adjusted
LIBOR Rate shall be adjusted automatically on and as of the effective day of any
change in the Reserve Percentage.
Restated Revolving Credit Notes - Section 2.1(c)(i).
Restated Swing Line Note - Section 2.1(c)(ii).
Revolving Credit - Section 2.1.
S&P - Standard & Poor's Corporation.
Securities Act - The Securities Act of 1933, as amended,
together with all rules and regulations promulgated in connection therewith.
Subsidiary - With respect to any Person at any time, (a) any
corporation more than fifty (50%) percent of whose voting stock is legally and
beneficially owned by such Person or owned by a corporation more than fifty
(50%) percent of whose voting stock is legally and beneficially owned by such
Person; (b) any trust of which a majority of the beneficial interest is at such
time owned directly or indirectly, beneficially or of record, by such Person or
one or more Subsidiaries of such Person; and (c) any partnership, joint venture
or other entity of which ownership interests having ordinary voting power to
elect a majority of the board of directors or other Persons performing similar
functions are at such time owned directly or indirectly, beneficially or of
record, by, or which is otherwise controlled directly, indirectly or through one
or more intermediaries by, such Person or one or more Subsidiaries of such
Person.
Super Majority Lenders - The Lenders holding Pro Rata
Percentages aggregating 66-2/3% or more of the total Revolving Credit.
Swing Line Advances - Advances under the Swing Line
Commitment made by the Swing Line Lender to the Borrower pursuant
to Section 2.1(b).
Swing Line Commitment - The amount set forth opposite the
Swing Line Lender's name on Annex I attached hereto directly below the column
entitled "Swing Line Commitment", as the same may be reduced from time to time
pursuant to Section 8.
Swing Line Lender - CoreStates, in its capacity as such, and
its permitted successors and assigns in such capacity.
Third-Party Consent - Any order, consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
notice to, or exemption or other action by any Person other than the Borrower or
any of its Subsidiaries or any Governmental Authority.
Transferee - Section 10.10(d).
Transferred Assets - The book value, measured as of the last
day of the fiscal year ended immediately preceding the date on which the
applicable Partial Asset Sale is consummated, of the assets transferred in any
Partial Asset Sale or combination of Partial Asset Sales in any fiscal year.
Transferred Asset Threshold - An amount equal to tene on which
the applicable Partial Asset Sale is consummated.
Transferred EBITDA - The aggregate amount, measured for the
fiscal year ended immediately preceding the date on which the applicable Entity
Asset Sale(s) are consummated, of the EBITDA of the Person or Persons with
respect to which such Entity Asset Sale(s) have taken place in any fiscal year
12
(or the pro-rated portion of the EBITDA of such Person(s) if less than all of
the capital stock of such Person(s) is transferred).
Transferred EBITDA Threshold - An amount equal to ten (10%)
percent of the Consolidated EBITDA of Borrower and its consolidated Subsidiaries
measured for the fiscal year ended immediately preceding the date on which the
applicable Entity Asset Sale is consummated.
Tuggle Road Building - The warehouse facility owned by Cleo on
the date hereof and located on Tuggle Road in Shelby County, Tennessee.
Unsecured Senior Notes - Debt instruments issued by Borrower
up to the maximum aggregate principal amount of $75,000,000 on substantially the
terms and conditions set forth on the term sheet attached hereto as Exhibit
"1.1(b)" and incorporated herein by reference or on terms and conditions
otherwise reasonably satisfactory to the Administrative Agent (in any event,
including, without limitation, absence of covenants more restrictive of Borrower
or favorable to the lenders thereon than the covenants set forth in this
Agreement).
1.2 Accounting Principles. Where the character or amount of any asset
or liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, this shall be done in accordance with GAAP, to the
extent applicable, except where such principles are inconsistent with the
requirements of this Agreement.
SECTION 2. THE LOAN.
2.1 Revolving Line of Credit - Description. Subject to the terms and
conditions of this Agreement, the Lenders hereby establish for the benefit of
the Borrower a revolving line of credit in the amount of the Facility Limit
(collectively, the "Revolving Credit") which shall include Advances extended by
the Lenders to or for the benefit of the Borrower from time to time hereunder,
in aggregate principal amount at any time outstanding, not to exceed the then
Available Commitment in effect from time to time.
(a) (i) Each Lender agrees severally to make Regular Advances
to the Borrower as a part of the Revolving Credit, subject to the terms of this
Agreement, up to the lesser of the amounts ("Pro Rata Shares") or percentages
("Pro Rata Percentages") of the Revolving Credit opposite its name on Annex I
attached hereto and incorporated herein by reference.
(ii) Regular Advances under the Revolving Credit
(A) shall be made at any time and from time to time on and after the Closing
Date and prior to the Maturity Date, (B) may be made as Alternate Base Rate
Advances or, at the Borrower's option and subject to the terms hereof, as LIBOR
Based Rate Advances or, at the Borrower's option and subject to the terms
hereof, as Letters of Credit; provided that all Advances made by all of the
Lenders pursuant to the same Borrowing shall, unless otherwise specifically
provided herein, consist entirely of Advances of the same type, (C) may be
repaid and reborrowed in accordance with the provisions hereof, (D) shall not,
when aggregated with a Lender's Pro Rata Percentage of other Advances then
outstanding, exceed for such Lender, at any time outstanding, the Pro Rata Share
of such Lender, at such time and (E) shall not be made if, at the time the
requested Advance is to be made, the aggregate Outstandings, after giving effect
to the Advance requested by the relevant Notice of Borrowing, would exceed the
Available Commitment in effect at such time.
(iii) Notwithstanding anything contained herein to
the contrary, any written notice from Borrower to Administrative Agent to the
13
effect that a portion of the Reserve Amount is to be deemed part of the
Available Commitment (A) shall only be effective three (3) days following
receipt of such notice by Administrative Agebe ineffective if, as of the date of
such notice, a Default or Event of Default has occurred hereunder. Subject to
the provisions of Sections 2.4 and 2.9 hereof, a notice given pursuant to this
paragraph may be revoked by Borrower providing the Administrative Agent with a
written notice of revocation prior to the date on which an Advance is made which
utilizes the portion of the Reserve Amount which was designated as available
pursuant to the notice of designation to be revoked.
(b) (i) The Swing Line Lender may, in its sole and absolute
discretion, make Swing Line Advances to the Borrower as a part of the Revolving
Credit, subject to the terms of this Agreement, up to the Swing Line Commitment.
(ii) Swing Line Advances under the Revolving
Credit (A) shall be made at any time and from time to time on and after the
Closing Date and prior to the Maturity Date, (B) shall be made only in cash and
as Alternate Base Rate Advances and shall not be entitled to be converted into
LIBOR Based Rate Advances so long as they remain Swing Line Advances, (C) may be
repaid and reborrowed in accordance with the provisions hereof, (D) shall not be
made if the aggregate principal amount of Swing Line Advances and the Swing Line
Lender's Pro Rata Percentage of all other Advances then outstanding, after
giving effect to the Swing Line Advance requested by the relevant Notice of
Borrowing, would exceed the Swing Line Lender's Pro Rata Share and (E) shall not
be made if the aggregate principal amount of Swing Line Advances and all other
Advances then outstanding, after giving effect to the Swing Line Advance
requested by the relevant Notice of Borrowing, would exceed the Available
Commitment in effect at such time. In no event shall the aggregate principal
amount of Swing Line Advances outstanding at any time exceed the Swing Line
Commitment.
(c) (i) At Closing, the Borrower shall execute and deliver its
promissory note to each Lender in the principal amount of such Lender's Pro Rata
Share, each in the form attached hereto as Exhibit 2.1(c)(i) (as amended,
replaced, restated or superseded from time to time, collectively the "Restated
Revolving Credit Notes") to evidence its unconditional obligation to repay each
Lender for all Advances made under the Revolving Credit, with interest as herein
and therein provided. Each Advance under the Revolving Credit shall be deemed
evidenced by the Restated Revolving Credit Notes, which are deemed incorporated
herein by reference and made a part hereof. The Restated Revolving Credit Notes
shall amend and replace (but not extinguish the obligations evidenced by or
cause a novation of) the revolving credit notes dated November 15, 1995 executed
by the Borrower in favor of each Lender which was a party to the Existing Loan
Agreement, which notes shall be returned to Borrower by the applicable Lender
marked replaced and superseded (or, in lieu thereof, an affidavit of lost note
accompanied by a lost instrument bond by any Lender which can not locate its
note) within ten (10) Business Days of the Closing Date. No Lender shall have
any liability for any other Lender's failure to comply with the immediately
preceding sentence.
(ii) At Closing, the Borrower shall execute and
deliver its promissory note to the Swing Line Lender in the principal amount of
the Swing Line Commitment, in the form attached hereto as Exhibit 2.1(c)(ii) (as
amended, replaced, restated or superseded from time to time, the "Restated Swing
Line Note") to evidence its unconditional obligation to repay the Swing Line
Lender for all Swing Line Advances made under the Revolving Credit, with
interest as herein and therein provided. Each Swing Line Advance under the
Revolving Credit shall be deemed evidenced by the Restated Swing Line Note,
which is deemed incorporated herein by reference and made a part hereof. The
Restated Swing Line Note shall amend and replace (but not extinguish the
obligations evidenced by or cause a novation of) the Swing Line Note dated
14
November 15, 1995 executed by Borrower in favor of the Swing Line Lender, which
Swing Line Note shall be returned to Borrower by the Swing Line Lender marked
replaced and superseded within ten (10) Business Days of the Closing Date.
(d) The term of the Revolving Credit shall expire on the
Maturity Date unless earlier terminated in accordance with the terms hereof. On
such date, unless having been sooner accelerated by the Administrative Agent
pursuant to the terms hereof, the Revolving Credit shall be terminated and all
of the Obligations shall be due and payable in full, and as of which date, no
further Advances shall be available from the Lenders.
(e) Borrower acknowledges and agrees that the amount of the
Existing Debt to Lenders consisting of cash Advances is $___________ and that
such sum is unconditionally owing to Lenders which were parties to the Existing
Loan Agreement without setoff, recoupment, defense or adjustment of any kind.
Borrower acknowledges and agrees that the amount of the Existing Debt to Lenders
consisting of the aggregate face amount of all Letters of Credit and all
Reimbursement Obligations is $_________________ and that all such Reimbursement
Obligations are unconditionally owing to Lenders which were parties to the
Existing Loan Agreement without setoff, recoupment, defense or adjustment of any
kind. The Existing Debt to Lenders shall be deemed Advances to Borrower under
the Revolving Credit under this Agreement for all purposes hereof and under the
other Loan Documents.
2.2 Letters of Credit.
(a) As part of the Revolving Credit and subject to its terms
and conditions and the customary terms, conditions and procedures of the
Fronting Lender, the Fronting Lender, shall, at the request of the
Administrative Agent and on behalf of and for the benefit of the Lenders, make
available to the Borrower (either for its own account or, at the Borrower's
request, as a co-applicant with any of the Guarantors) Letters of Credit which
shall not exceed, in the aggregate at any one time outstanding, the L/C
Commitment. All Letters of Credit issued under the Revolving Credit shall reduce
dollar for dollar the amount available to be borrowed by the Borrower under the
Available Commitment. No standby Letter of Credit shall be issued with an expiry
date later than the earlier of: (i) one (1) year from the date of issuance and
(ii) the Maturity Date. No commercial Letter of Credit shall be issued with an
expiry date later than the earlier of: (i) one hundred twenty (120) days from
the date of issuance and (ii) the Maturity Date. The Borrower shall execute and
deliver to the Fronting Lender all letter of credit agreements (including
without limitation, the forms marked as Exhibit "2.2(a)" attached hereto and
made a part hereof) and other documents, instruments and agreements customarily
required by the Fronting Lender for such purposes. All such documents,
instruments and agreements shall be in form and substance satisfactory to the
Fronting Lender. The outstanding letters of credit issued by CoreStates which
are listed on Schedule "2.2(a)" shall be deemed for all purposes to have been
issued under the Revolving Credit as of the date hereof.
(b) Immediately upon the issuance of any Letter of Credit, the
Fronting Lender is deemed to have granted to each Lender, and each Lender is
hereby deemed to have irrevocably acquired, an individual participating interest
(without recourse or warranty), in accordance with each Lender's respective Pro
Rata Percentage, in all of the Fronting Lender's rights and liabilities with
respect to such Letter of Credit. Each Lender shall be directly, irrevocably and
unconditionally obligated to the Fronting Lender, according to its Pro Rata
Percentage, to reimburse the Fronting Lender for any draws made at any time
without regard to the occurrence of a Default or Event of Default (including
without limitation, following the commencement of any bankruptcy,
reorganization, receivership, liquidation or dissolution proceeding with respect
to the Borrower) under any Letter of Credit outstanding under the L/C Commitment
not immediately reimbursed by the Borrower.
15
(c) In the event of any request for drawing under any Letter
of Credit by the beneficiary thereof, the Fronting Lender shall promptly notify
the Borrower and the Borrower shall immediately reimburse the Fronting Lender on
the day when such drawing is honored, by either a cash payment by the Borrower,
or in the absence of such payment by the Borrower, by the Lenders au further
request or approval of the Borrower) a cash Advance under the Revolving Credit
on such date which shall accrue interest at the Alternate Base Rate. All
Advances which constitute a reimbursement for a draw under a Letter of Credit
shall be shared by the Lenders in accordance with their respective Pro Rata
Percentages. If, for any reason, proceeds of Advances are not received by the
Fronting Lender on the date a drawing under a Letter of Credit is honored in an
amount equal to the amount of such drawing, the Borrower shall reimburse the
Fronting Lender, on the Business Day immediately following the date of such
drawing, in an amount in same day funds equal to the excess of the amount of
such drawing over the amount of such proceeds, if any, that are so received,
plus accrued interest on such amount at the Alternate Base Rate. The Borrower's
reimbursement obligation for draws under Letters of Credit along with its
obligation to pay L/C Fees and Fronting Fees shall herein be referred to
collectively as the Borrower's "Reimbursement Obligations". All of the
Borrower's Reimbursement Obligations hereunder with respect to Letters of Credit
shall apply unconditionally and absolutely to, and shall be joint and several
with respect to, Letters of Credit issued hereunder on behalf of the Borrower as
a co-applicant with any of the Guarantors as if such Letters of Credit had been
issued for the account of the Borrower alone and the term "Reimbursement
Obligations" as used throughout this Agreement and the other Loan Documents
shall be deemed to include the Borrower's Reimbursement Obligations and its
obligation to pay L/C Fees and Fronting Fees with respect to all such Letters of
Credit.
(d) (i) In the event that the Borrower shall fail to reimburse
the Fronting Lender as provided in Section 2.2(c) in an amount equal to the
amount of the drawing honored by the Fronting Lender under a Letter of Credit,
the Fronting Lender shall promptly notify each Lender of the unreimbursnder's
participation therein based on such Lender's Pro Rata Percentage. Each Lender
shall make available to the Fronting Lender an amount equal to its respective
participation in same day funds, at the office of the Fronting Lender specified
in such notice, not later than 1:00 p.m. (Philadelphia time) on the Business Day
after the date notified by the Fronting Lender. In the event that any Lender
fails to make available to such Fronting Lender the amount of such Lender's
participation based on such Lender's Pro Rata Percentage in such Letter of
Credit, as provided in this Section 2.2(d), the Fronting Lender shall be
entitled to recover such amount on demand from such Lender together with
interest at the overnight Fed Funds Rate for the first three (3) days and at the
Alternate Base Rate for each day thereafter. The Fronting Lender shall
distribute to each other Lender which has paid all amounts payable by it under
this Section 2.2(d) with respect to any Letter of Credit, such other Lender's
share, based on such Lender's Pro Rata Percentage, of all payments received by
the Fronting Lender from the Borrower in reimbursement of drawings honored by
the Fronting Lender under such Letter of Credit, when such payments are
received. Nothing in this Section 2.2(d) shall be deemed to relieve any Lender
from its obligation to pay all amounts payable by it under this Section 2.2(d)
with respect to any Letter of Credit issued by the Fronting Lender or to
prejudice any rights that the Borrower or any other Lender may have against a
Lender as a result of any default by such Lender hereunder and no Lender shall
be responsible for the failure of any other Lender to pay its respective
participation, based on its Pro Rata Percentage, payable under this Section
2.2(d).
(ii) In connection with the failure of any Lender
to make available to the Fronting Lender the amount of such Lender's
16
participation in any Letter of Credit, such Lender hereby agrees to protect,
indemnify, payagainst any and all claims, demands, liabilities, damages, losses,
costs, charges and expenses (including, without limitation, reasonable
attorneys' fees, allocated costs of internal counsel and the costs (including
judgments) in connection with any related litigation) which the Fronting Lender
may incur or be subject to as a consequence, direct or indirect, of the failure
of such Lender to make available its participation in such Letter of Credit.
Notwithstanding anything to the contrary contained in this
Section 2.2(d), each Lender providing its participation in any Letter of Credit
shall have no obligation to indemnify the Fronting Lender in respect of any
liability incurred by the Fronting Lender arising solely out of the gross
negligence or willful misconduct of the Fronting Lender.
(e) The obligation of the Borrower to reimburse the Fronting
Lender for drawings made under the Letters of Credit and the obligations of the
Lenders to the Fronting Lender under Section 2.2(d) shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including, without limitation, the following
circumstances:
(i) any lack of validity or enforceability of any
Letter of Credit;
(ii) the existence of any claim, setoff, defense or
other right that the Borrower or any Affiliate of the Borrower or any other
Person may have at any time against a beneficiary or any transferee of any
Letter of Credit (or any Persons for whom any such beneficiary or transferee may
be acting), the Fronting Lender, any Lender or any other Person, whether in
connection with this Agreement, the transactions contemplated herein or any
unrelated transaction;
(iii) any draft, demand, certificate or any other
document presented under any Letter of Credit proving to be forged, fraudulent
or invalid in any respect or any statement therein being untrue or inaccurate in
any respect;
(iv) payment by the Fronting Lender under any Letter
of Credit against presentation of a demand, draft or certificate or other
document that does not comply with the terms of such Letter of Credit unless the
Fronting Lender shall have acted in the absence of good faith or with willful
misconduct or gross negligence in issuing such payment; or
(v) the fact that a Default or Event of Default shall
have occurred and be continuing.
(f) If by reason of (i) any change after the Closing Date in
applicable law, regulation, rule, decree or regulatory requirement or any change
in the interpretation or application by any judicial or regulatory authority of
any law, regulation, rule, decree or regulatory requirement or (ii) compliance
by the Fronting Lender or any Lender with any direction, reasonable request or
requirement (whether or not having the force of law) of any governmental or
monetary authority including, without limitation, Regulation D:
(A) the Fronting Lender or any Lender shall be
subject to any tax or other levy or charge of any nature or to any variation
thereof (except for changes in the rate of any tax on the net income of the
Fronting Lender or any Lender or its applicable lending office) or to any
penalty with respect to the maintenance or fulfillment of its obligations under
this Section 2.2, whether directly or by such being imposed on or suffered by
the Fronting Lender or any Lender;
17
(B) any reserve, deposit or similar requirement is
or shall be applicable, imposed or modified in respect of any Letter of Credit
issued by the Fronting Lender or participations therein purchased by any Lender;
or
(C) there shall be imposed on the Fronting Lender
or any Lender any other condition regarding this Section 2.2, any
Letter of Credit or any participation therein;
and the result of the foregoing is to directly or indirectly increase the cost
to the Fronting Lender or any Lender of issuing, creating, making or maintaining
any Letter of Credit or of purchasing or maintaining any participation therein,
or to reduce the amount receivable in respect thereof by the Fronting Lender or
any Lender, then and in any such case the Fronting Lender or such Lender shall,
within 90 days after the additional cost is incurred or the amount received is
reduced, notify the Borrower and the Borrower shall pay on demand such amounts
as may be necessary to compensate the Fronting Lender or such Lender on an
after-tax basis for such additional cost or reduced receipt, together with
interest on such amount from the date demanded until payment in full thereof at
a rate per annum equal at all times to the Alternate Base Rate. A certificate
signed by an officer of the Lender as to the amount of such increased cost or
reduced receipt showing in reasonable detail the basis for the calculation
thereof, submitted to the Borrower and the Administrative Agent by the Fronting
Lender or any Lender, as the case may be, shall, except for manifest error, be
final, conclusive and binding for all purposes.
(g) In addition to amounts payable as elsewhere provided in
this Section 2.2, without duplication, the Borrower hereby agrees to protect,
indemnify, pay and save the Fronting Lender harmless from and against any and
all claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees and reasonable allocated costs of internal
counsel) which the Fronting Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of the Letters of Credit or (ii) the
failure of the Fronting Lender to honor a drawing under any Letter of Credit as
a result of any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto government or Governmental Authority (all such acts
or omissions herein called "Government Acts").
As between the Borrower and the Fronting Lender, the Borrower
assumes all risks of the acts and omissions of, or misuse of the Letters of
Credit issued by the Fronting Lender by, the respective beneficiaries of such
Letters of Credit. In furtherance and not in limitation of the foregoing, the
Fronting Lender shall not be responsible: (i) for the form, validity,
sufficiency, accuracy, genuineness or legal effects of any document submitted by
any party in connection with the application for and issuance of such Letters of
Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any such Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be
invalid or ineffective for any reason; (iii) for failure of the beneficiary of
any such Letter of Credit to comply fully with conditions required in order to
draw upon such Letter of Credit; (iv) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they are in cipher, unless any of the
foregoing are caused by the Fronting Lender's gross negligence or willful
misconduct; (v) for errors in interpretation of technical terms; (vi) for any
loss or delay in the transmission of any document required in order to make a
drawing under any such Letter of Credit or of the proceeds thereof, unless
18
caused by the Fronting Lender's gross negligence or willful misconduct; (vii)
for the misapplication by the beneficiary of any such Letter of Credit of the
proceeds of any drawing under such Letter of Credit; and (viii) for any
consequences arising from causes beyond the control of the Fronting Lender,
including, without limitation, any Government Acts. None of the above shall
affect, impair, or prevent the vesting of any of the Fronting Lender's rights or
powers hereunder.
In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by the
Fronting Lender in connection with the Letters of Credit issued by it or the
related certificates, if taken or omitted in good faith, shall not create any
liability on the part of the Fronting Lender to the Borrower.
Notwithstanding anything to the contrary contained in this
Section 2.2(g), the Borrower shall have no obligation to indemnify the Fronting
Lender in respect of any liability incurred by the Fronting Lender arising
solely out of the gross negligence or willful misconduct of the Fronting Lender.
2.3 Voluntary Reduction of Commitment. The Borrower may, at any time,
without premium or penalty, permanently reduce the Facility Limit then
available. The exercise of the foregoing option shall be evidenced by the
Borrower giving the Administrative Agent written notice of the Borrower's
election to do so (as evidenced for the purposes of this Section by a written
acknowledgment of receipt executed by such officer of the Administrative Agent
as the Administrative Agent may designate to the Borrower in writing) of such
reduction request. Such notice shall be irrevocable and shall specify whether
(and the extent to which) the reduction should be applied to the Available
Commitment and/or the Reserve Amount, the date upon which such reduction shall
be effective (which effective date shall be a Business Day and shall be no less
than 5 days after receipt of such notice by the Administrative Agent) and the
amount thereof, which shall be in the minimum amount of $5,000,000 and integral
multiples of $1,000,000 in excess of such amount. In the event of such a
reduction in the Facility Limit, Advances in an aggregate outstanding principal
amount that is in excess of the Facility Limit, as so reduced ("Over-Limit
Amount"), shall be simultaneously paid on the effective date of such reduction,
with interest accrued on the amount so paid or prepaid to the date of such
reduction. On the effective date of such reduction, the Borrower shall cash
collateralize Letters of Credit, on terms satisfactory to the Administrative
Agent, in the amount, if any, by which the Over-Limit Amount exceeds the amount
of non-Letter of Credit Advances then outstanding and shall execute such
documents, instruments and agreements as the Administrative Agent shall deem
necessary to perfect a security interest in such cash collateral. A reduction in
the Facility Limit shall reduce each Lender's Pro Rata Share in accordance with
its respective Pro Rata Percentage.
2.4 Advances, Conversions, Renewals and Payments:
(a)(i) Except to the extent otherwise set forth in this
Agreement, all payments of principal and of interest on the Revolving Credit,
the Available Commitment Fee, the Reserve Amount Fee, the L/C Fees, all other
charges, Expenses and any other Obligations of the Borrower hereunder, shall be
made to the Administrative Agent at its main Philadelphia banking office, Broad
and Chestnut Streets, Philadelphia, Pennsylvania (or such other office as may be
designated by the Administrative Agent to the Borrower in writing), in
immediately available funds in lawful money of the United States of America. The
Administrative Agent shall have the unconditional right and discretion to charge
the Borrower's operating account with the Administrative Agent (or any
Subsidiary's operating account with the Administrative Agent, if so directed by
the Borrower or if an Event of Default has occurred hereunder) for all of the
Borrower's Obligations as they become due from time to time under this
Agreement, including without limitation, interest, principal, fees and
reimbursement of Expenses.
19
(ii) So long as no Event of Default is outstanding, Borrower
shall have the option to designate whether payments (including prepayments)
shall be applied to Acquisition Advances or to other Advances. If no such
designation is made or if an Event of Default is outstanding, such application
shall be made by the Administrative Agent.
(b) (i) Advances (except Letters of Credit) which may be made
by the Lenders from time to time under the Revolving Credit shall be made
available by crediting such proceeds to the Borrower's operating account with
the Administrative Agent or to such other Persons or accounts as may be
specified by the Borrower to the Administrative Agent in writing.
(ii) All Regular Advances (except Letters of
Credit) requested by the Borrower must be in the minimum amount of (A)
$2,000,000 (unless the Swing Line Lender shall refuse to, or is unable, to make
a Swing Line Advance for a lesser amount in which case such minimum amount shall
be $500,000) and integral multiples of $100,000 in excess of such amount for
Alternate Base Rate Advances (unless otherwise agreed by the Administrative
Agent in its sole and absolute discretion) and (B) $5,000,000 and integral
multiples of $100,000 in excess of such amount for LIBOR Based Rate Advances and
must be requested:
(A) For all Alternate Base Rate Advances (including Swing Line
Advances) by eleven o'clock (11:00) A.M., Philadelphia time, on the date such
Advance is to be made; and
(B) For all LIBOR Based Rate Advances or any Letter of Credit,
by ten o'clock (10:00) A.M., Philadelphia time, at least three (3) Business Days
before such Advance is to be made.
All requests for an Advance are to be in writing in the form attached hereto as
Exhibit "2.4(b)" and made a part hereof ("Notice of Borrowing") which form is to
be executed by an Authorized Officer of the Borrower. Such request maistrative
Agent. Once made, Advance requests are irrevocable. Each request must indicate
the amount of such Advance, the date of such Advance, and whether or not the
requested Advance is a LIBOR Based Rate Advance or an Alternate Base Rate
Advance or a conversion or renewal of an existing Advance, and in the case of a
LIBOR Based Rate Advance, must specify the applicable LIBOR Interest Period.
Upon receiving a request for an Advance in accordance with this subparagraph
(ii) by twelve o'clock (12:00) noon, Philadelphia time on the date of such
request, or as soon as is reasonably practicable thereafter, the Administrative
Agent shall notify all Lenders of the request.
(iii) (A) Each Lender shall advance its
applicable Pro Rata Percentage of a requested Regular Advance (and in the case
of a Swing Line Advance, the Swing Line Lender shall advance the amount of the
requested Swing Line Advance) to the Administrative Agent by remitting federal
funds immediately available to the Administrative Agent pursuant to the
Administrative Agent's instructions prior to three o'clock (3:00) p.m.
Philadelphia time on the date of the Advance. Subject to the satisfaction of the
terms and conditions hereof and receipt by the Administrative Agent of all
required funds from the other Lenders, the Administrative Agent shall make the
requested Advance available to the Borrower by crediting such amount to the
Borrower's operating account with the Administrative Agent as soon as is
reasonably practicable thereafter on the day the requested Advance is to be
made.
(B) (1) The Swing Line Lender shall, so long
as and to the extent that amounts are available to be borrowed under the
Facility Limit (whether or not any conditions precedent thereto can be or are
met), require each other Lender, and each other Lender hereby agrees, subject to
20
this Section 2.4(b)(iii)(B), on such date (which shall be a Business Day) as
designated by the Swing Line Lender ch shall be an Alternate Base Rate Advance,
in an amount equal to such Lender's Pro Rata Percentage of the amount of the
Swing Line Advances specified in such notice (each a "Mandatory Loan"). If
Alternate Base Rate Advances are made by the Lenders other than the Swing Line
Lender under the immediately preceding sentence, each such Lender shall make the
amount of its Regular Advance available to the Administrative Agent, in same day
funds, at the Administrative Agent's office, not later than 12:00 noon
(Philadelphia time) on the Business Day next succeeding the date such notice is
given. The conversion of Swing Line Advances to Regular Advances will not
require the Borrower to comply with the conditions set forth in Section 3 hereof
or the notice requirements of Section 2.4(b) hereof or require any other action
on the part of the Borrower. The proceeds of such Regular Advances shall be
immediately delivered to the Swing Line Lender (and not to the Borrower) and
applied to repay the outstanding Swing Line Advances. On the day such Regular
Advances are made, the Swing Line Lender's Swing Line Advances shall be deemed
to be paid with the proceeds of a Regular Advance made by the Lenders and such
portion of the Swing Line Advances deemed to be so paid shall no longer be
outstanding as Swing Line Advances, shall no longer be due under the Restated
Swing Line Note and shall be due under the respective Restated Revolving Credit
Notes issued to the Lenders to the extent of each Lender's Pro Rata Share. If
any portion of any such amount paid to the Swing Line Lender should be recovered
by or on behalf of the Borrower from the Swing Line Lender in bankruptcy, by
assignment for the benefit of creditors or otherwise, the loss of the amount so
recovered shall be ratably shared among all of the Lenders in the manner
contemplated by Section 9.7 hereof. Each Lender's obligation to make the Regular
Advances referred to in this paragraph shall be absolute and unconditional and
shall not be affected by any cirding, without limitation, (i) any setoff,
counterclaim, recoupment, defense or other right which such Lender may have
against the Swing Line Lender, the Borrower or any other Person for any reason
whatsoever; (ii) the occurrence or continuance of a Default or an Event of
Default; (iii) the occurrence of any Material Adverse Effect with respect to the
Borrower; (iv) any breach of this Agreement or any of the other Loan Documents
by the Borrower or any of its Subsidiaries or any other Lender; or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.
(2) In the event that any Mandatory
Loan cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code with respect to the Borrower), then each Lender hereby
agrees that it shall forthwith purchase (as of the date the Mandatory Loan would
otherwise have occurred, but adjusted for any principal payments received by the
Swing Line Lender relating to the Swing Line Advance from the Borrower on or
after such date and prior to such purchase) from the Swing Line Lender, such
participations in the outstanding Swing Line Advances as shall be necessary to
cause such Lenders to share in such Swing Line Advances ratably based upon their
respective Pro Rata Percentages; provided, however, that (x) all interest
payable on the Swing Line Advances shall be for the account of the Swing Line
Lender until the date as of which the respective participation required to be
purchased is paid and, to the extent attributable to the purchased
participation, shall be payable to the participant from and after such date and
(y) at the time any purchase of participations pursuant to this sentence is
actually made, the purchasing Lender shall be required to pay the Swing Line
Lender interest on the principal amount of the participation purchased for each
daye have occurred to but excluding the date of payment for such participation,
at a rate per annum equal to (I) the overnight Fed Funds Rate for the first
three (3) days and (II) at the Alternate Base Rate for each day thereafter.
(3) A copy of each notice given by
the Swing Line Lender to the Lenders pursuant to Section 2.4(b)(iii)(B)(1) shall
21
be promptly delivered by the Swing Line Lender to the Administrative Agent and
the Borrower. Upon the making of a Regular Advance by a Lender pursuant to this
Section 2.4(b)(iii)(B), the amount so funded shall become due under such
Lender's Restated Revolving Credit Note and shall no longer be owed under the
Restated Swing Line Note.
(C) Neither the Administrative Agent nor any
other Lender shall be obligated, for any reason whatsoever, to advance the share
of any other Lender (including, any Lender's share of funding obligations with
respect to Letters of Credit). If such corresponding amount is not made
available to the Administrative Agent by such Lender on the date the Advance is
made and the Administrative Agent elects (at its sole and absolute discretion,
without any obligation to do so) to make such Lender's share of the Advance
available to the Borrower, the Administrative Agent shall be entitled to recover
such amount on demand from such Lender, or from the Borrower, together with
interest thereon in respect of each day during the period commencing on the date
such amount was made available to the Borrower and ending on (but excluding) the
date the Administrative Agent recovers such amount, at a rate per annum equal to
the Fed Funds Rate, for each such day (or, if such day is not a Business Day,
for the next preceding Business Day). The Administrative Agent shall also be
entitled to recover any and all losses and damages (including without
limitation, reasonable attorneys' fees and costs) from any Lender failing to so
advance upon demand of the Administrathis paragraph against any distributions or
payments of the Obligations which the Administrative Agent would otherwise make
available to such Lender. To the extent any Lender fails to provide its
respective Pro Rata Percentage of any requested Advance, such Lender's Pro Rata
Percentage of all payments of the Obligations shall decrease to reflect the
actual percentage which its actual outstanding Advances bears to the total
outstanding Advances of all Lenders.
2.5 Interest. The unpaid principal balance of the Revolving Credit
shall bear interest, subject to the terms hereof, on one of the two bases
selected by the Borrower from among the borrowing options set forth below, it
being understood that subject to the provisions hereof, the Borrower may select
different options to apply simultaneously to different parts of the outstanding
Revolving Credit.
(a) Alternate Base Rate Option Interest on the outstanding
Alternate Base Rate Advances under the Revolving Credit will accrue at the
Alternate Base Rate. Interest on all Alternate Base Rate Advances shall be
payable quarterly, in arrears, on the first day of each calendar quarter
beginning on the first day of the first full calendar quarter after the date
hereof.
(b) LIBOR Rate Option
(i) Interest on the outstanding LIBOR Based Rate
Advances under the Revolving Credit shall accrue at the rate ("LIBOR Based
Rate") equal to the sum of (A) the Adjusted LIBOR Rate as determined by the
Administrative Agent on the Interest Rate Determination Date plus (B) a margin
(the "LIBOR Based Rate Margin") which may fluctuate from time to time in
accordance with the following schedule:
22
If the Borrower's Ratio of Consolidated
EBITDA to Consolidated Interest Expense
is (measured on Available LIBOR
a rolling four quarter basis) Based Rate Margin
- --------------------------------------- -----------------
Less than 5.00 to 1 one and one quarter
(1.25%) percent per
annum
("Level 1")
Greater than or equal to one (1.0%) percent
5.00 to 1 but less than per annum
6.25 to 1 ("Level 2")
Greater than or equal to three quarters of
6.25 to 1 but less than one (0.75%) percent
8.00 to 1 per annum
("Level 3")
Greater than or equal to one half of one
8.00 to 1 (.50%) percent
per annum
("Level 4")
Changes in the LIBOR Based Rate Margin (if any) shall become effective
(A) with respect to the Quarterly Compliance Certificate delivered in respect of
the first three (3) fiscal quarters in any fiscal year in accordance with
Section 5.8, commencing on the first day of the calendar month immediately
following the calendar month in which the Administrative Agent shall have
received from the Borrower such Quarterly Compliance Certificate or (B) with
respect to the Quarterly Compliance Certificate delivered in respect of the last
fiscal quarter in any fiscal year in accordance with Section 5.8, commencing on
the earlier to occur of (I) the first day of the calendar month immediately
following the calendar month in which the Administrative Agent shall have
received from the Borrower such Quarterly Compliance Certificate or (II) the
first day of the calendar month immediately following the calendar month in
which the date 45 days after the end of the fiscal year of the Borrower most
recently ended occurs provided, however, that no such changes shall occur (x)
until the Borrower has delivered its Quarterly Compliance Certificate for the
fiscal quarter ending September 30, 1997 and (y) unless no Default or Event of
Default shall have occurred and be continuing. Upon the occurrence and during
the continuance of a Default or an Event of Default, the LIBOR Based Rate Margin
may, in the discretion of the Administrative Agent or at the direction of the
Majority Lenders, be increased (and shall automatically be so increased if the
Default or Event of Default is a payment default) to one and one quarter (1.25%)
percent per annum (in addition to institution of the Default Rate, if
applicable) and shall be applied retroactively to the date of the occurrence of
such Default or Event of Default (or in the event of a Default in respect of the
obligation to deliver a Quarterly Compliance Certificate for the last fiscal
quarter in each fiscal year, the first day of the calendar month
immediatelymonth in which the date 45 days after the end of the latest fiscal
year of the Borrower occurs). Notwithstanding the foregoing, decreases in the
LIBOR Based Rate Margin, from one fiscal quarter of the Borrower to the next,
shall be no greater than one level. By way of example only, if the LIBOR Based
Rate Margin is at Level 1 during a fiscal quarter and the Borrower's Quarterly
Compliance Certificate for the end of such quarter shows the Borrower's Ratio of
Consolidated EBITDA to Consolidated Interest Expense to be greater than 8.00 to
1, the applicable LIBOR Based Rate Margin for the next fiscal quarter shall be
Level 2. If such covenant calculations remain the same as of the end of such
23
second quarter, the LIBOR Based Rate Margin shall decrease to Level 3. If,
however, such certificate shows the ratio to be less than 5.00 to 1, then the
LIBOR Based Rate Margin shall return to Level 1 for the third quarter. The
Administrative Agent, Lenders and Borrower acknowledge that, on the date hereof,
the applicable LIBOR Based Rate Margin is the margin described as Level [3]
above, which Level shall remain applicable at all times through the first day of
the calendar month immediately following the calendar month in which the
Administrative Agent shall have received from the Borrower the Quarterly
Compliance Certificate for the quarter ended September 30, 1997 (unless a
Default or an Event of Default earlier occurs in which case the LIBOR Based Rate
Margin shall be adjusted as set forth above).
(ii) Those portions of the Revolving Credit subject
to this option shall be selected and outstanding for either a one (1) month, two
(2) month, three (3) month, or six (6) month (or if available from all of the
Lenders, nine (9) month or twelve (12) month) period from the date such LIBOR
Based Rate Advance is made or renewed or an Advance is converted to a LIBOR
Based Rate Advance ("LIBOR Interest Period") and must be repaid in full on the
last day of such applicableInterest shall also be due and payable, for LIBOR
Based Rate Advances having a LIBOR Interest Period of three (3) months or
greater, on each date occurring at three-month intervals after the first day of
such LIBOR Based Rate Advance Period. No LIBOR Interest Period may end after the
Maturity Date. Subject to all of the terms and conditions applicable to a
request for a new Advance which the Borrower desires to select as a LIBOR Based
Rate Advance, the Borrower may convert any Advance to a LIBOR Based Rate Advance
or extend a LIBOR Based Rate Advance as of the last day of the LIBOR Interest
Period to a new LIBOR Based Rate Advance.
(iii) No more than ten (10) portions (tranches) of
principal of LIBOR Based Rate Advances may be outstanding at any one time.
(iv) The initial LIBOR Interest Period for any
Borrowing of LIBOR Based Rate Advances shall commence on the date of such
Borrowing (including the date of any conversion from a Borrowing of an Alternate
Base Rate Advance) and each LIBOR Interest Period occurring thereafter
(including continuations thereof) in respect of such Borrowing shall commence on
the date on which the next preceding LIBOR Interest Period expires.
(v) If any LIBOR Interest Period relating to a
Borrowing of LIBOR Based Rate Advances begins on a date for which there is no
numerically corresponding date in the calendar month in which such LIBOR
Interest Period ends, such LIBOR Interest Period shall end on the last Business
Day of such calendar month.
(vi) If any LIBOR Interest Period would otherwise
expire on a day which is not a Business Day, such LIBOR Interest Period shall
expire on the next succeeding Business Day; provided that if any LIBOR Interest
Period in respect of a LIBOR Based Rate Advance would otherwise expire on a day
which is not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such LIBOR Interest Period shall expire on
the next preceding Business Day.
(c) Calculation of Interest Interest shall be calculated on
the basis of a 360 day year (or a year of 365 or 366 days, as the case may be,
in the case of all Advances based on the Prime Rate) and charged on the actual
days elapsed.
(d) Failure to Specify Rate All Advances for which an interest
rate option is not specifically designated by the Borrower, pursuant to the
terms hereof, or not requested in conformity with the terms hereof, shall be
Alternate Base Rate Advances.
24
(e) Default Rate After the occurrence and during the
continuance of an Event of Default hereunder, the per annum effective rate of
interest on all Advances may, in the discretion of the Administrative Agent or
at the direction of the Majority Lenders, be increased (and shall be
automatically so increased if the Event of Default is a payment default) by two
(2%) percentage points and may be applied retroactively to the date of the
occurrence of such Event of Default. Upon an acceleration of the Obligations by
the Administrative Agent and/or the Lenders hereunder, the Administrative Agent
may (and shall, at the direction of the Majority Lenders), automatically and
without prior notice to the Borrower, convert each LIBOR Based Rate Advance to
an Alternate Base Rate Advance. The Administrative Agent will subsequently give
notice to the Borrower of such conversion.
(f) Continuation of Interest Charges All rates of interest
charged on Advances undete provided in this Agreement and be paid even after the
occurrence of any Default or Event of Default, or after maturity, acceleration,
recovery of judgment, bankruptcy, insolvency proceedings of any kind or the
happening of any event or occurrence similar or dissimilar.
(g) Applicable Interest Limitations In no contingency or event
whatsoever shall the aggregate of all amounts deemed interest hereunder and
charged or collected pursuant to the terms of this Agreement exceed the highest
rate permissible under any law which a court of competent jurisdiction shall, in
a final determination, deem applicable hereto. In the event that such court
determines the Lenders have charged or received interest hereunder in excess of
the highest applicable rate, the Lenders shall apply and set off such excess
interest received by the Lenders against other Obligations due or to become due
and such rate shall automatically be reduced to the maximum rate permitted by
such law.
2.6 Fees.
(a) (i) So long as the Revolving Credit is outstanding and has
not been terminated, the Borrower shall unconditionally pay to the
Administrative Agent, for the ratable benefit of the Lenders, a non-refundable
fee ("Available Commitment Fee") equal to one quarter of one (.25%) percent per
annum of the actual daily unused Available Commitment portion of the Revolving
Credit (which shall be calculated as the Available Commitment minus the average
aggregate daily outstanding principal balance of Advances during each fiscal
quarter) which fee shall be computed and paid on a quarterly basis, in arrears,
on the first day of each calendar quarter, beginning in the first calendar
quarter after the Closing Date, in each case for the actual number of days
elapsed over a 360 day year. Solely for the purposes of calculating the
distributive share of the Available Commitment Fee to be remitted to each
Lender, the daily unused Available Commitment shall be determined ("Fee
Determination") as if no Swing Line Advances were outstanding during such period
and the share of such fee owing to the Swing Line Lender shall be reduced to the
extent necessary for each Lender (other than the Swing Line Lender) to receive
its share of such fee based on such Fee Determination. Each portion of the
Reserve Amount which is designated by Borrower, from time to time, to be part of
the Available Commitment in accordance with Section 2.1(a)(iii) hereof shall,
for the purpose of calculating Available Commitment Fees, be considered part of
the Available Commitment retroactively for a period equal to the shorter of (A)
ninety (90) days prior to each such designation or (B) the actual number of days
elapsed from the Closing Date to the date of such designation.
(ii) So long as the Revolving Credit is outstanding
and has not been terminated, the Borrower shall unconditionally pay to the
Administrative Agent, for the ratable benefit of the Lenders, a non-refundable
fee ("Reserve Amount Fee") the actual daily Reserve Amount, which fee shall be
25
computed and paid on a quarterly basis, in arrears, on the first day of each
calendar quarter, beginning in the first calendar quarter after the Closing
Date, in each case for the actual number of days elapsed over a 360 day year
period.
(b) (i) The Borrower shall pay to the Administrative Agent,
for the ratable benefit of the Lenders, non-refundable letter of credit fees
equal to (A) one quarter of one (.25%) percent of the face amount of each
documentary letter of credit, which shall be computed and paid upon issuance (as
a condition of the issuance of each such Letter of Credit) and (B), for each
day, the applicable LIBOR Based Rate Margin multiplied by the aggregate undrawn
face amount of the outstanding standby letters of credit (collectively, the "L/C
Fees") which shall be computed and paid on a quarterly basis, in arrears, on the
first day of each calendar quarter, beginning in the first calendar quarter
after the Closing Date, in each case for the actual number of days elapsed over
a 360 day year.
(ii) In addition to the foregoing, the Borrower shall
pay to the Fronting Lender, for its own account, (A) a fee ("Fronting Fee")
equal to one eighth of one (1/8%) percent per annum of the aggregate face amount
of the outstanding Letters of Credit which shall be computed and paid on a
quarterly basis, in arrears, on the first day of each calendar quarter,
beginning in the first calendar quarter after the Closing Date, in each case for
the actual number of days elapsed over a 360 day year, and (B) customary
issuance, amendment, extension, cancellation and administration fees and charges
for each Letter of Credit, due and payable upon demand of the Fronting Lender.
(c) The Borrower shall pay to the Administrative Agent, for
pro rata distribution to each applicable Lender in accordance with the
percentage each Lender's Pro Rata Share increases hereunder from that which
existed as of the Closing Date hereunder under the Existing Loan Agreement bears
to the total increase of all Pro Rata Shares hereunder, a line increase fee
equal to $131,250.
2.7 Prepayments: Advances (except Letters of Credit) may be prepaid at
any time and from time to time in whole or in part without premium or penalty,
subject to reimbursement of the Lenders' re-deployment costs in the case of
prepayments of LIBOR Based Rate Advances in accordance with Section 2.9 below.
2.8 Use of Proceeds: The proceeds of the Lenders' Advances shall be
used by the Borrower solely: (i) to provide Letters of Credit to be used by the
Borrower solely in the ordinary course of its business and (ii) for working
capital needs and general corporate purposes, including the funding of Permitted
Acquisitions, permitted dividends and permitted stock repurchases, not otherwise
prohibited under this Agreement.
2.9 Special Provisions Governing LIBOR Based Rate Advances.
Notwithstanding other provisions of this Agreement, the following provisions
shall govern with respect to LIBOR Based Rate Advances as to the matters
covered:
(a) On the Interest Rate Determination Date the Administrative
Agent shall determine (which determination shall, absent manifest error, be
final, conclusive and binding upon all parties hereto) the interest rate which
shall apply to the LIBOR Based Rate Advances for which an interest rate is then
being determined for the applicable LIBOR Interest Period and shall promptly
give notice thereof (in writing or by telephone confirmed in writing or by
facsimile) to the Borrower and to each Lender.
(b) In the event that (x) in the case of clause (i) below, the
Administrative Agent or (y) in the case of clause (ii) or (iii) below, any
26
Lender, shall have determined (which determination shall, absent manifest error,
be final, conclusive and binding upon all parties hereto):
(i) at any time that a LIBOR Rate is to be determined
by the Administrative Agent that, by reason of any changes arising on or after
the Closing Date affecting the interbank Eurodollar market, adequate and fair
means do not exist for ascertaining the applicable interest rate on the basis
provided for in the definition of Adjusted LIBOR Rate;
(ii) at any time that such Lender shall incur
increased costs or reductions in the amounts received or receivable hereunder
with respect to any Lender or its obligation to make LIBOR Based Rate Advances
(which increase in cost or reduction in receivables shall be calculated in
accordance with such Lender's reasonable averaging and attribution methods)
because of (x) any change since the Closing Date (including changes proposed or
published prior to the Closing Date but not reflected in the pricing of the
Advances) in any applicable law or governmental (or quasi-governmental or other
body or entity accorded the status of a rule or regulation making authority)
rule, regulation, guideline or order, whether or not having the force of law, or
in the interpretation or administration thereof and including the introduction
of any new law or governmental rule, regulation, guideline or order, such as,
for example, but not limited to: (A) a change in the basis of taxation of
payments to any Lender of the principal of or interest on the Restated Revolving
Credit Notes or any other amounts payable hereunder (except for changes in the
rate of tax on, or determined by reference to, the net income or profits of such
Lender) or (B) a change in official reserve requirements, but, in all events,
excluding reserves required under Regulation D to the extent included in the
computation of the LIBOR Rate and/or (y) other circumstances since the date of
this Agreement affecting such Lender or the interbank Eurodollar market or the
position of such Lender in such market; or
(iii) at any time that the making or continuance of
any LIBOR Based Rate Advance has become unlawful by compliance by such Lender in
good faith with any applicable law or governmental (or quasi-governmental or
other body or entity accorded the status of a rule or regulation making
authority) rule, regulation, guideline or order (or would conflict with any such
governmental rule, regulation, guideline or order not having the force of law
even though the failure to comply therewith would not be unlawful), or has
become impracticable as a result of a contingency occurring after the Closing
Date which materially and adversely affects the interbank eurodollar market;
then, and in any such event, the Administrative Agent in the case of clause (i)
above or such Lender in the case of clause (ii) or (iii) above shall on such
date give notice (by telephone confirmed in writing or by facsimile) to the
Borrower of the Advance(s) affected and, in the case of clause (ii) or (iii) to
the Administrative Agent, of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Lenders). Thereafter (x) in
the case of clause (i) above, LIBOR Based Rate Advances shall no longer be
available until such time as the Administrative Agent notifies the Borrower and
the Lenders that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Notice of Borrowing given by the
Borrower with respect to the borrowing of or conversion into (including
continuance of) LIBOR Based Rate Advances which have not yet been incurred shall
be deemed rescinded by the Borrower, (y) in the case of clause (ii) above, the
Borrower shall pay to such Lender, upon written demand therefor, such additional
amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Lender in its reasonable discretion
shall determine) as shall be required to compensate such Lender on an after-tax
basis for such increased costs or reductions in amounts receivable hereunder (a
27
written certificate signed by an officer of such Lender as to the additional
amounts owed to such Lender, showing in reasonable detail the basis for the
calculation thereof, submitted to the Borrower by such Lender shall, absent
manifest error, be final, conclusive and binding upon all parties hereto) and
(z) in the case of clause (iii) above, the Borrower shall take one of the
actions specified in Section 2.9(c) as promptly as possible and, in any event,
within the time period required under Section 2.9(c) or, if earlier, the time
period required by law. All demands for payment hereunder shall be given no more
than ninety (90) days after the occurrence of the change in law or other event
giving rise to such demand; provided however, that failure to deliver notice on
a timely basis shall not constitute a waiver of any Lender's right to receive
payment for any costs relating to the 90-day period preceding the date of demand
and any costs incurred after the giving of such notice.
(c) At any time that any LIBOR Based Rate Advance is affected
by the circumstances described in Section 2.9(b)(ii) or (iii), the Borrower may
(and in the case of a LIBOR Based Rate Advance affected pursuant to Section
2.9(b)(iii) shall) either (i) if a Notice of Borrowing has been given with
respect to the affected LIBOR Based Rate Advance, cancel said Notice of
Borrowing by giving the Administrative Agent telephonic notice (confirmed
promptly in writing or by facsimile) thereof on the same date that the Borrower
was notified by a Lender pursuant to Section 2.9(b)(ii) or (iii), or (ii) if the
affected LIBOR Based Rate Advance is then outstanding, upon at least three (3)
Business Days' notice to the Administrative Agent, require the affected Lender
to convert each such LIBOR Based Rate Advance into an Alternate Base Rate
Advance or prepay such LIBOR Based Rate Advance on the last day of the current
LIBOR Interest Period therefor unless earlier payment is required by law;
provided that if more than one Lender is affected at any time, then all affected
Lenders must be treated the same pursuant to this Section 2.9(c); and provided,
further, that the Borrower shall compensate any such affected Lenders as set
forth in Section 2.9(f).
(d) Anything herein to the contrary notwithstanding, if, on
any Interest Rate Determination Date, no LIBOR Rate is available by reason of
any changes arising on or after the Closing Date affecting the interbank
Eurodollar market or adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition of LIBOR
Rate, the Administrative Agent shall give the Borrower and each Lender prompt
notice thereof and the Advances requested to be made as LIBOR Based Rate
Advances shall, subject to the applicable notice requirements, be made as
Alternate Base Rate Advances.
(e) Each Lender agrees that, as promptly as practicable after
it has actual knowledge of the occurrence of any event or the existence of a
condition that would cause it to be an affected Lender under Section 2.9(b)(ii)
or (iii), it will, to the extent not inconsistent with such Lender's internal
policies, use reasonable efforts to make, fund or maintain the affected LIBOR
Based Rate Advances of such Lender through another lending office of such Lender
if as a result thereof the additional moneys which would otherwise be required
to be paid in respect of such Advances pursuant to Section 2.9(b)(ii) would be
materially reduced or the illegality or other adverse circumstances which would
otherwise require prepayment of such Advances pursuant to Section 2.9(b)(iii)
would cease to exist, and if, as determined by such Lender, in its reasonable
discretion, the making, funding or maintaining of such Advances through such
other lending office would not otherwise be disadvantageous to such Lender. The
Borrower hereby agrees to promptly pay all reasonable out-of-pocket expenses
incurred by any Lender in utilizing another lending office of such Lender
pursuant to this Section 2.9(e).
(f) The Borrower shall compensate each Lender, upon written
request by that Lender, for all reasonable losses, expenses and liabilities
28
(including, without of funds borrowed by it to make or carry its LIBOR Based
Rate Advances and any loss sustained by that Lender in connection with
re-deployment of such funds (based upon the difference between the amount earned
in connection with the re-deployment of such funds and the amount payable by the
Borrower if such funds had been borrowed or remained outstanding, but not for
loss of profit)) which that Lender may sustain with respect to the Borrower's
LIBOR Based Rate Advances: (i) if for any reason attributable to the Borrower, a
Borrowing of any LIBOR Based Rate Advance does not occur on a date specified
therefor in a Notice of Borrowing, or a telephonic request for borrowing or
conversion, or a successive LIBOR Interest Period does not commence after notice
therefor is given or is deemed to have been given pursuant to Section 2.4(b)
(whether or not withdrawn by the Borrower or deemed withdrawn pursuant to clause
(x) of the last paragraph of Section 2.9(b)); or (ii) if any prepayment or
repayment (in accordance with Section 2.7, this Section 2.9, by acceleration or
otherwise) or conversion of any of such Lender's LIBOR Based Rate Advances
occurs on a date which is not the last day of the LIBOR Interest Period
applicable to that Advance; or (iii) if any prepayment or repayment of any such
Lender's LIBOR Based Rate Advances is not made on any date specified in a notice
of prepayment or repayment given by the Borrower; or (iv) as a consequence of
(x) any other failure by the Borrower to repay such Lender's LIBOR Based Rate
Advances when required by the terms of this Agreement or (y) any election made
pursuant to Section 2.9(c). Compensation owing under this Section 2.9(f) shall
be equal to the amount of interest which would have accrued on the amount of
principal prepaid or repaid or converted or not borrowed for the period from the
date of such prepayment or repayment or conversion or failure to borrow to the
last day of the then current LIBOR Interest Period for the relevant LIBOR Based
Rate Advance (or, in the case of a failure to borrow, the LIBOR Interest Period
for such LIBOR Based Rate Advance which would have commenced on the date of such
failure to borrow) at the applicable rate of interest for such LIBOR Based Rate
Advance provided for herein minus any amount such Lender, in good faith and in
its sole discretion (absent manifest error), determines is realizable upon the
re-deployment of such funds. A certificate signed by an officer of the Lender as
to the amount of such losses, expenses and liabilities, showing in reasonable
detail the calculation thereof and submitted to the Borrower by such Lender
shall, absent manifest error, be final, conclusive and binding for all purposes.
(g) Any Lender may make, carry or transfer LIBOR Based Rate
Advances at, to, or for the account of any of its branch offices or the office
of an Affiliate of that Lender; provided that any increased costs associated
therewith shall be borne by such Lender except as provided in Section 2.9(e)
above.
(h) During the continuance of a Default or an Event of
Default, the Borrower may not elect to have an Advance made or maintained as, or
converted into, a LIBOR Based Rate Advance after the expiration of any LIBOR
Interest Period then in effect for that Advance.
(i) Calculation of all amounts payable to the Lenders under
this Section 2.9 in respect of LIBOR Based Rate Advances shall be made as though
the Lender had actually funded its relevant LIBOR Based Rate Advance through the
purchase of a Eurodollar deposit bearing interest at the LIBOR Rate applicable
to such LIBOR Based Rate Advaner of such Eurodollar deposit from an offshore
office of the applicable Lender to a domestic office of such Lender in the
United States of America; provided, however, that the Lenders may fund each of
their LIBOR Based Rate Advances in any manner they deem fit and the foregoing
assumption shall be utilized only for the calculation of amounts payable under
this Section 2.9.
2.10 Capital Requirements, Etc. If the adoption or effectiveness after
the Closing Date of any applicable law or governmental (or quasi-governmental or
29
other body or entity accorded the status of a rule or regulation making
authority) rule or regulation regarding capital adequacy, or any change therein,
or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such Lender or such
Lender's direct or indirect parent with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency (including in each case any such change
proposed or published prior to the date hereof but not reflected in the pricing
of the Advances), has or would have the effect of reducing the rate of return on
such Lender's or such Lender's parent's capital or assets as a consequence of
such Lender's obligations hereunder to a level below that which such Lender or
such Lender's parent could have achieved but for such adoption, effectiveness or
change or as a consequence of an increase in the amount of capital required to
be maintained by such Lender (including in each case, without limitation, with
respect to any Lender's commitment hereunder or any Advance), then from time to
time, within fifteen (15) days after demand by such Lender (with a copy to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amount or amounts as will compensate, on an after-tax basis, such Lender or such
Lender's parent, as the case may be, for such reduction. Each Lender, upon
determining in good faith that any additional amounts will be payable pursuant
to this Section 2.10, will give prompt written notice thereof to the Borrower,
which notice shall set forth in reasonable detail the basis of the calculation
of such additional amounts, although any delay in giving any notice shall not
release or diminish any of the Borrower's obligations to pay additional amounts
pursuant to this Section 2.10.
2.11 Mandatory Prepayments/Commitment Reductions.
(a) (i) The Borrower shall immediately prepay the outstanding
principal amount of the Advances (exclusive of undrawn Letters of Credit) in
accordance with Section 2.3 on any date on which the Outstandings exceed the
Facility Limit in effect at such time, in the amount of such excess.
(ii) The Borrower shall immediately prepay to the
Swing Line Lender the outstanding principal amount of the Swing Line Advances on
any date on which the aggregate outstanding principal amount of such Swing Line
Advances exceed the Swing Line Commitment in effect at such time, in the amount
of such excess.
(b) Upon any Asset Sale which constitutes an Asset Sale
Prepayment Event, and upon the consummation of each subsequent Asset Sale, if
any, consummated during the same fiscal year of the Borrower, the Borrower shall
pay to the Administrative Agent, an amount in cash equal to the Asset Sale
Prepayment Amount calculated as a result of all Asset Sales occurring in such
fiscal year less any prepayment(s) made in such fiscal year pursuant to this
paragraph, which prepayment shall be applied to, and constitute a prepayment of,
the Advances as provided in Section 2.11(e).
(c) Immediately upon funds being made available to the
Borrower constituting Net Cash Proceeds from Equity Offerings, an amount equal
to 50% of such Net Cash Proceeds from Equity Offerings shall be applied to, and
shall constitute a prepayment of, the Advances as provided in Section 2.11(e).
(d) During the first calendar quarter of each calendar year
during the term hereof the Borrower shall cause the outstanding principal
balance of Advances (exclusive of undrawn Letters of Credit) under the Revolving
Credit to be less than an amount equal to $35,000,000 plus the applicable
Adjustment Amount for a consecutive thirty (30) day period in such first
calendar quarter ("Reduced Level"). If, as of March 1 of each year the Borrower
has not completed its compliance with this covenant for such year, the Borrower
30
shall, on such date, reduce outstanding Advances (exclusive of undrawn Letters
of Credit) to the applicable Reduced Level or (if at or below such Reduced Level
on suevel for a sufficient number of days to complete its compliance with this
covenant for such year.
(e) With respect to each prepayment of Advances required by
Section 2.11(a), (b), (c) or (d) other than Alternate Base Rate Advances, the
Borrower shall give the Administrative Agent two (2) Business Days notice and
may designate the types of Advances and the specific Borrowing or Borrowings
which are to be prepaid. In the absence of a designation by the Borrower, the
Administrative Agent shall make such designation in its sole discretion. All
prepayments shall include payment of accrued interest on the principal amount so
prepaid, shall be applied to the payment of interest, Expenses, fees and charges
before application to principal and shall include amounts payable, if any, under
Section 2.9(f). On the effective date of any such prepayment, the Borrower shall
cash collateralize Letters of Credit, on terms and conditions satisfactory to
the Administrative Agent, in the amount, if any, by which the amount of such
prepayment exceeds the outstanding cash Advances and shall execute such
documents, instruments and agreements as the Administrative Agent shall deem
necessary to perfect a security interest in such cash collateral.
(f) The amount required to be applied in accordance with
Sections 2.11(b) or (c) shall permanently reduce the Facility Limit on a
dollar-for-dollar basis with such reduction also applying to the Available
Commitment and/or the Reserve Amount as designated in writing from the Borrower
to the Administrative Agent. A reduction in the Facility Limit shall reduce each
Lender's Pro Rata Share in accordance with its respective Pro Rata Percentage.
2.12 Net Payments. (a) Except as otherwise required by law, all
payments made by the Borrower to any Lender or the Administrative Agent under
this Agreement and/or any Loan Document shall be made free and clear of, and
without reduction for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding income, bank shares and franchise taxes
imposed by any jurisdiction in which such Lender's principal or lending office
is located or in which such Lender is engaged in a trade or business or any
political subdivision or taxing authority thereof or therein (such non-excluded
taxes being called "Taxes"). If any Taxes are required to be withheld from any
amounts payable to the Administrative Agent or any Lender under this Agreement
and/or any Loan Document, the Borrower shall timely remit such taxes to the
Governmental Authority imposing the same and the amounts so payable to such
Lender shall be increased to the extent necessary to yield to such Lender (after
payment of all Taxes) interest or any such other amounts payable at the rates or
in the amounts specified in this Agreement and/or any Loan Document. Whenever
any Tax is payable by the Borrower, as promptly as possible thereafter, the
Borrower shall send to the Administrative Agent, for its own account or the
account of such Lender, as the case may be, a certified copy of an original
official receipt received by the Borrower showing payment thereof. Without
prejudice to the foregoing, if any Lender or the Administrative Agent is
required to make any payment on account of Taxes, the Borrower will, upon
notification by the Lender or the Administrative Agent, promptly indemnify such
Person against such Taxes. For purposes of this Section 2.12, the term "Taxes"
includes interest, penalties and expenses payable or incurred in connection
therewith. A certificate as to any additional ain reasonable detail the
calculation thereof, or, alternatively, including a copy of the notice from the
taxing jurisdiction notifying the Lender of its liability for Taxes) payable to
a Lender under this Section 2.12 submitted to the Borrower by such Lender shall,
absent manifest error, be final, conclusive and binding for all purposes upon
all parties hereto. The Lender shall submit such certification or otherwise
31
provide written notice to the Borrower within a reasonable period of time after
becoming aware of any Taxes for which it is entitled to payments of additional
amounts under this Section 2.12.
(b) Prior to the date of initial funding by each Lender that
is not incorporated under the laws of the United States of America or a state
thereof, such Lender will deliver to the Borrower and the Administrative Agent
two duly completed copies of United States Internal Revenue Service Form 1001 or
4224 or successor applicable form, as the case may be, certifying in each case
that such Lender is entitled to receive payments under this Agreement and/or any
Loan Document payable to it, without deduction or withholding of any United
States federal income taxes. Each Lender that delivers to the Borrower and the
Administrative Agent a Form 1001 or 4224 pursuant to the preceding sentence, and
each assignee, undertakes to deliver to the Borrower and the Administrative
Agent two copies of the said Form 1001 or 4224, or successor applicable forms,
or other manner of certification, as the case may be, on or before the date that
any such form previously delivered expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form previously
delivered by it to the Borrower and the Administrative Agent, and such
extensions or renewals thereof as may reasonably be requested by the Borrower,
certifying in the case of a Form 1001 or 4224 that such Lender is entitled to
receive payments under this Agreement and/or any other Loan Document without
deduction or withholding of any United States federal income taxes, unless in
any such cases an event (including without limitation any change in treaty, law
or regulation) has occurred subsequent to the Closing Date and prior to the date
on which any such delivery would otherwise be required which renders all such
forms inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it. Each such Lender which is not able
to provide the applicable form shall advise the Borrower that it is not capable
of receiving payments without any deduction or withholding of United States
federaltwithstanding any other provision of this Section 2.12, no Lender shall
be required to deliver any form pursuant to this Section 2.12 that such Lender
is not legally able to deliver.
(c) The Borrower shall not be required to pay any increased
amount on account of Taxes pursuant to this Section 2.12 to any Lender to the
extent that such Taxes would not have been payable if such Lender had furnished
a form required by Section 2.12(b), unless such failure results from any event
subsequent to the date hereof (including without limitation any change in
treaty, law or regulation) specified in the second sentence of Section 2.12(b).
SECTION 3. CLOSING AND CONDITIONS PRECEDENT TO ADVANCES.
3.1 Conditions Precedent to Closing. Closing under this Agreement is
subject to the following conditions precedent (all documents, instruments and
agreements to be in form and substance satisfactory to the Administrative Agent
and the Administrative Agent's counsel):
(a) Resolutions, Opinions, and Other Documents. The Borrower
shall have delivered to the Administrative Agent the following:
(i) this Agreement, the Restated Revolving Credit
Notes, and the Restated Swing Line Note all properly executed;
(ii) each of the other Loan Documents to be executed
by the Borrower or by any other Person pursuant to the terms hereof;
(iii) Guarantees properly executed by each of the
Guarantors;
32
(iv) certified copies of (A) resolutions of the
Borrower's board of directors authorizing the execution of this Agreement, the
Restated Revolving Credit Notes, the Restated Swing Line Note to be issued
hereunder and each of the other Loan Documents, and (B) the Borrower's Articles
or Certificate of Incorporation and By-laws;
(v) certified copies of (A) resolutions of each
Guarantor's board of directors authorizing the execution of the Guarantees and
(B) each Guarantor's Articles or Certificate of Incorporation and By-laws;
(vi) an incumbency certificate for the Borrower
identifying the parties executing this Agreement, the Restated Revolving Credit
Notes, the Restated Swing Line Note and the other Loan Documents with specimen
signatures;
(vii) an incumbency certificate for each Guarantor
identifying the parties executing the Guarantees, with specimen signatures;
(viii) a written opinion of the Borrower's and
Guarantors' counsel addressed to the Administrative Agent for the benefit of all
Lenders;
(ix) certification by the chief financial officer or
vice president of finance of the Borrower that there has not occurred any
material adverse change in the business, assets, operations, properties,
financial condition, contingent liabilities, prospects or material agreements of
the Borrower and its Subsidiaries taken as a whole, since December 31, 1996 as
reflected on the applicable Financial Statements of such entities delivered to
the Agents;
(x) payment of all fees due on the Closing Date and
Expenses associated with the Revolving Credit;
(xi) Uniform Commercial Code, judgment, federal and
state tax lien searches against the Borrower and each of the Guarantors at the
Borrower's sole cost and expense, showing that the Property of the Borrower and
each Guarantor is not subject to any Liens except for Permitted Liens, together
with corporate tax lien search certificates showing no Liens on the Borrower's
or any of the Guarantors' Property except for Permitted Liens, and certificates
of good standing showing the Borrower and each of the Guarantors to be in good
standing in each jurisdiction in which it is qualified to do business (in the
case of Cleo, Tennessee only); and
(xii) copies of all other documents, instruments,
agreements, opinions and certificates as the Administrative Agent may reasonably
request.
(b) Absence of Certain Events. As of the Closing Date, (i) no
Default or Event of Default hereunder shall have occurred and be continuing and
(ii) there shall not have occurred any event or condition having a Material
Adverse Effect with respect to the Borrower since December 31, 1996, as
reflected on the applicable Financial Statements delivered to the Agents.
(c) Warranties and Representations at Closing. The warranties
and representations contained in Section 4 as well as any other Section of this
Agreement shall be true and correct in all material respects on the Closing Date
with the same effect as though made on and as of that date. The Borrower shall
not have taken any action or permitted any condition to exist which would have
been prohibited by any Section hereof. All warranties and representations
contained in this Agreement, unless expressly stated to the contrary, are deemed
to have been made to the Administrative Agent and Lenders immediately following
completion of Closing hereunder.
33
(d) Compliance with this Agreement. The Borrower shall have
performed and complied with all agreements, covenants and conditions contained
herein which are required to be performed or complied with by the Borrower
before or at the Closing Date, including, without limitation, the provisions of
Sections 5, 6 and 7 hereof.
(e) Officers' Certificate. The Administrative Agent shall
receive a certificate dated the Closing Date and signed by the chief financial
officer or vice president of finance of the Borrower certifying that all of the
conditions precedent to the Borrowings to occur on the Closing Date have been
fulfilled.
(f) Indebtedness; Liens, etc. (i) The Borrower and each of the
Guarantors shall have received all necessary consents or waivers or shall have
amended, supplemented or otherwise modified, repaid, redeemed or defeased its
outstanding Indebtedness in a manner and on terms satisfactory to the
Administrative Agent such that there exists no default or potential default
(including, without limitation, as a result of the consummation of the
transactions contemplated by any Borrowing hereunder) with respect to such
Indebtedness or under any note, evidence of indebtedness, mortgage, deed of
trust, security document or other agreement relating to such Indebtedness and
such indentures, notes, evidences of indebtedness, mortgages, deeds of trust or
other agreements relating to such Indebtedness shall not contain any restriction
on the ability of the Borrower or any of the Guarantors to enter into this
Agreement, the Guarantees or the other Loan Documents to which it is entering or
the granting of any Lien in favor of the Lenders, nor do such agreements,
documents or instruments contain any provision giving rise to the creation of
any Lien in favor of any Person as a result of any Borrowing hereunder.
(ii) The Administrative Agent and the Lenders
shall be satisfied, in their reasonable discretion, with all Indebtedness of the
Borrower and each of the Guarantors, outstanding on the Closing Date and not
reflected on the Financial Statements.
(g) Consents, etc. All material consents of any Governmental
Authority and Third-Party Consents (including, without limitation, all material
approvals and consents required in connection with any Environmental Law or
other environmental statutes, rules or regulations), if any, in connection with
the transactions contemplated by this Agreement and the other Loan Documents
(including any consents and approvals that are necessary for the Borrower to
borrow and for each of the Guarantors to perform its obligations hereunder and
to perform in a full and timely manner all of its obligations under the other
Loan Documents) and otherwise referred to herein or therein to be completed on
or before the Closing Date, shall have been obtained and delivered to the
Administrative Agent, and shall remain in effect, and all applicable waiting
periods shall have expired without any action being taken by any competent
authority which restrains, prevents or imposes, in the judgment of the
Administrative Agent or the Majority Lenders, materially adverse conditions upon
the consummation of the transactions contemplated by this Agreement. There shall
not exist any judgment, order, injunction or other restraint issued or filed
with respect to the making of the Advances hereunder.
(h) Environmental Review. At or prior to the Closing Date,
there shall have been delivered to the Administrative Agent all environmental
reports, investigations, studies, audits, assessments or reviews in the
possession of the Borrower or any Subsidiary, as set forth in Schedule "3.1(h)"
attached hereto and made a part hereof, in relation to the current business or
operations of the Borrower or any Subsidiary or any Real Property, Property or
34
facilities now owned, operated, leased or controlled by the Borrower or any of
the Subsidiaries which contain information pertaining to any event(s) or
condition(s) which have, or to the best of the Borrower's present Knowledge are
reasonably likely to cause, a Material Adverse Effect.
(i) Compliance with Laws. The Borrower and each of its
Subsidiaries shall be in compliance with all applicable statutes, regulations
and ordinances of the United States of America and each other country and
jurisdiction, and of each state, city, town, municipality, country, and each
agency thereof (including, without any limitation, ERISA laws, Environmental
Laws and margin regulations), a violation of which would cause a Material
Adverse Effect.
3.2 Closing. Subject to the conditions of this Section 3, the Revolving
Credit shall be made available on such date (the "Closing Date") and at such
time as may be mutually agreeable to the parties contemporaneously with the
execution hereof ("Closing") at the offices of the Borrower's counsel, Morgan,
Lewis & Bockius, L.L.P., in Philadelphia, Pennsylvania.
3.3 Conditions Precedent to all Advances. The obligation of Lenders to
make Advances hereunder is subject, at the time of making each such Advance, to
the satisfaction of the following conditions precedent (all documents,
instruments and agreements to be in form and substance satisfactory to the
Administrative Agent and the Administrative Agent's counsel):
(a) Agreements Effective. This Agreement, the Restated
Revolving Credit Notes, the Restated Swing Line Note and each of the other Loan
Documents shall be effective;
(b) Notice of Borrowing. With respect to any Advance, the
Administrative Agent shall have received, in accordance with the provisions of
Section 2.4 hereof, prior to the making of any such Advance, an originally
executed Notice of Borrowing signed by an Authorized Officer, in writing,
delivered to the Administrative Agent (the furnishing by the Borrower of each
such Notice of Borrowing shall be deemed to constitute a representation and
warranty of the Borrower to the effect that the other conditions set forth in
this Section 3 are satisfied in all material respects as of the date of delivery
and will be satisfied on the date such Advances are made).
(c) No Default; Representations and Warranties. At the time of
the making of each Advance and also after giving effect thereto, (i) there shall
exist no Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Loan Documents in effect at such time (as
amended or modified from time to time, including by the delivery of amendments
or supplements (in form, scope and substance satisfactory to the Administrative
Agent and the Majority Lenders) to the schedules and exhibits to this Agreement
and/or the other Loan Documents) shall be true and correct in all material
respects with the same effect as though such representations and warranties had
been made on and as of such date, unless such representation and warranty
expressly indicates that it is being made as of any other specific date, in
which case, on and as of such other date.
(d) Material Adverse Change, etc. (i) No event or condition
shall have occurred or become known or would result from any Borrowing on the
date of any such Borrowing and the use of the proceeds therefrom that has
resulted or would result, singly or in the aggregate, in a Material Adverse
Effect.
(ii) There shall not exist any judgment, order,
injunction or other restraint issued or filed prohibiting, limiting or otherwise
adversely affecting the making of any Advances hereunder.
(e) Fees The Borrower shall have paid to the Administrative
Agent, the Lenders and the Fronting Lender, all fees payable to the
35
Administrative Agent, the Lenders and/or the Fronting Lender to the extent due
hereunder and all costs and Expenses (including legal fees and expenses) payable
to the Administrative Agent, the Lenders and/or the Fronting Lender hereunder.
(f) Litigation. There shall be no Proceeding pending or, to
the best of Borrower's Knowledge, threatened with respect to the Borrower or any
of its Subsidiaries or any Property of any such Person that, in the reasonable
judgment of the Administrative Agent, would, singly or in the aggregate, have a
Material Adverse Effect. No injunction or other restraining order to be issued
shall be pending or noticed with respect to any Proceeding seeking to enjoin or
otherwise prevent the consummation of, or to recover any damages or obtain
relief as a result of, this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby.
(g) Margin Rules. Neither the making of any Advance nor the
use of the proceeds therefrom will violate the provisions of Regulation G, T, U
or X or any other regulation of the Board of Governors of the Federal Reserve
System or the provisions of Section 7 of the Exchange Act.
The acceptance of the proceeds of each Borrowing of Advances
shall constitute a representation and warranty by the Borrower to each of the
Lenders that all of the applicable conditions specified in Section 3 and in any
other provision of this Agreement or any of the other Loan Documents have been
satisfied or waived.
3.4 Waiver of Rights. By completing the Closing hereunder or by making
Advances hereunder, the Administrative Agent does not thereby waive a breach of
any warranty or representation made by the Borrower hereunder or in any
agreement, document, or instrument delivered to the Administrative Agent or
otherwise referred to herein, and all of the Administrative Agent's claims and
rights resulting from any breach or misrepresentation by the Borrower are
specifically reserved by the Administrative Agent.
3.5 Delivery of Documents. All of the certificates and other
agreements, documents, instruments and papers referred to in this Section 3,
unless otherwise specified, shall be delivered to the Administrative Agent at
its office (or such other location as may be specified by the Administrative
Agent) for the account of each of the Lenders and in sufficient counterparts for
each of the Lenders (and Administrative Agent shall furnish such counterparts to
the Lenders).
SECTION 4. REPRESENTATIONS AND WARRANTIES.
To induce the Lenders to make the Advances under the Revolving Credit
to the Borrower, the Borrower warrants and represents to the Administrative
Agent and Lenders that:
4.1 Corporate Organization and Validity.
(a) The Borrower and its domestic Subsidiaries are
corporations duly organized and validly existing under the laws of their
respective states (or countries or other jurisdictions, as applicable) of
incorporation, are duly qualified, are validly existing and in good standing and
have lawful power and authority to engage in the business each conducts in each
state and each foreign country where the nature and extent of their businesses
require qualification, except when the failure to so qualify would not have a
Material Adverse Effect.
(b) The making and performance of this Agreement and the other
Loan Documents does not violate any law, government rule or regulation, court or
36
administrative order or other such order having the effect of law, or the
charter, minutes or bylaw provisions of the Borrower or any of the Guarantors or
violate or result in a default (immediately or with the passage of time) under
any contract, agreement or instrument to which any such Person is a party, or by
which any such Person or its Property is bound. Neither the Borrower nor any of
the Guarantors is in violation of any term of any agreement or instrument to
which any such Person is a party or by which it or its Property may be bound or
of its charter, minutes or its bylaws, which violation has had a Material
Adverse Effect.
(c) The Borrower and each of the Guarantors has all requisite
corporate power and authority to enter into and perform under this Agreement and
each of the Loan Documents (as applicable) and to incur the obligations herein
provided for, and has taken all proper and necessary corporate action to
authorize the execution, delivery and performance of this Agreement and the
other Loan Documents (as applicable).
(d) This Agreement, the Restated Revolving Credit Notes, the
Restated Swing Line Note, the Guarantees and all of the other Loan Documents,
when delivered, will be valid and binding upon the Borrower and the Guarantors
(as applicable) and enforceable in accordance with their respective terms.
4.2 Places of Business. As of the Closing Date, the only places of
business of the Borrower and the Guarantors and the places where each keeps and
intends to keep its Property and records concerning its Property, are at the
addresses listed in Schedule "4.2" attached hereto and made part hereof.
4.3 Pending Litigation. There are no judgments or judicial or
administrative orders against or binding upon the Borrower or any of its
Subsidiaries, proceedings or investigations (civil or criminal) pending, or to
the knowledge of the Borrower threatened, against or affecting the Borrower or
any of its Subsidiaries in any court or before any governmental authority or
arbitration board or tribunal which would cause a Material Adverse Effect,
except as shown in Schedule"4.3" attached hereto and made part hereof. Neither
the Borrower nor any of its Subsidiaries is in default with respect to any order
of any court, Governmental Authority, regulatory agency or arbitration board or
tribunal which would cause a Material Adverse Effect.
4.4 Title to Properties. The Borrower and each of its domestic
Subsidiaries has good and marketable title in fee simple (or its equivalent
under applicable law) to all the Property it respectively purports to own, free
from Liens and free from the claims of any other Person, except for those Liens
set forth on Schedule "4.4" attached hereto and made part hereof and for other
Permitted Liens.
4.5 Governmental Consent: Neither the nature of the Borrower or any of
its Subsidiaries' respective businesses or Property, nor any relationship
between such entities and any other Person, nor any circumstance affecting any
such entities in connection with the issuance or delivery of this Agreement, the
Restated Revolving Credit Notes, the Restated Swing Line Note, the Guarantees or
the other Loan Documents is such as to require a consent, approval or
authorization of, or filing, registration or qualification with, any
Governmental Authority on the part of any such party in conjunction with the
execution and delivery of this Agreement or the issuance or delivery of the
Restated Revolving Credit Notes, the Restated Swing Line Note, the Guarantees,
or the other Loan Documents, other than such of the foregoing as have been
obtained or made.
4.6 Taxes. All tax returns required to be filed (except for those tax
returns which, if not filed, would not have a Material Adverse Effect) by the
Borrower and each of its Subsidiaries in any jurisdiction, have in fact been
filed or extensions have been obtained, and all taxes, assessments, fees and
37
other governmental charges upon any such Person, or upon any of such Person's
respective Property, income or franchises, which are due and payable, have been
paid, except for those taxes being contested in good faith with due diligence by
appropriate proceedings for which appropriate reserves have been maintained
pursuant to GAAP and except for those taxes which, if not paid, would not cause
a Material Adverse Effect. Neither the Borrower nor any of its Subsidiaries is
aware of any proposed additional tax assessment or tax to be assessed against or
applicable to such Person (except for those tax assessments which would not
cause a Material Adverse Effect).
4.7 Financial Statements. The Financial Statements (complete copies of
which have been delivered to the Administrative Agent for distribution to the
Lenders), were prepared in accordance with GAAP (excluding footnotes for
unaudited statements) are complete in all material respects and present fairly
the financial position of the Borrower and its Subsidiaries as of such dates and
the results of their operations for such periods provided, however, that interim
financial statements are subject to normal year end audit adjustments. The
fiscal year for the Borrower and each of its Subsidiaries ends on December 31.
4.8 Full Disclosure. Neither the Financial Statements nor any written
statement furnished by, or on behalf of, the Borrower to the Administrative
Agent and/or Lenders in connection with the Revolving Credit contained in any
Financial Statements or documents, instruments, agreements or certificates
relating to the Borrower and its Subsidiaries contains any untrue statement of a
material fact or omits a material fact necessary to make the statements
contained therein or herein not misleading. There is no fact known to the
Borrower which the Borrower has not disclosed to the Administrative Agent in
writing, which would cause a Material Adverse Effect. The projections and pro
forma financial information contained in any materials provided by the Borrower
to the Agents or any Lender are based upon good faith estimates and assumptions
believed by the Borrower to be reasonable at the time made, it being recognized
by the Lenders that such projections as to future events are not to be viewed as
facts and that actual results during the period or periods covered by any such
projections may differ from the projected results.
4.9 Subsidiaries. Other than the parties listed on Schedule "4.9"
attached hereto, the Borrower has, as of the Closing Date, no actively operating
Subsidiaries. The jurisdiction of incorporation of each of such Subsidiaries is
also set forth on Schedule "4.9".
4.10 Guarantees, Indebtedness, etc.
(a) As of the Closing Date, neither the Borrower nor any of
the Guarantors owns or holds equity (excepting the stock of its Subsidiaries) or
long term debt investments in, has any outstanding advances to, or serves as
guarantor, surety or accommodation maker for the obligations of, or has any out-
standing borrowings from, any Person, which, in the case of any such equity,
investment, advance, guarantee or borrowing, involves the expenditure of money
or incurrence of an obligation, as the case may be, of at least $1,000,000
except as described in Schedule "4.10", attached hereto and made part hereof.
(b) Neither the Borrower nor any of its Subsidiaries is a
party to any contract or agreement, or subject to any charter or other corporate
restriction, which would cause a Material Adverse Effect.
(c) Except as otherwise specifically provided in this
Agreement, neither the Borrower nor any of its Subsidiaries has agreed or
consented to cause or permit any of its Property, whether now owned or hereafter
acquired, to be subject in the future (upon the happening of a contingency or
otherwise) to a Lien not permitted by this Agreement.
38
4.11 Government Regulations, etc.
(a) Assuming each of the Lenders is acquiring its Note or
Notes hereunder and its interests hereunder for its own account, for investment
and not with a view toward distribution, nor with the assets of any Employee
Benefit Plan subject to Part 4, Title I of ERISA, the use of the proceeds of,
and the Borrower's issuance of the Restated Revolving Credit Notes and the
Restated Swing Line Note, will not directly or indirectly violate or result in a
violation of the Securities Act of 1933 or the Securities Exchange Act of 1934,
as amended, or any regulations issued pursuant thereto, including, without
limitation, Regulations U, T, G and X of the Board of Governors of the Federal
Reserve System, 12 C.F.R., Chapter II. The Borrower does not own or intend to
carry or purchase any "margin security" within the meaning of said Regulations,
except in conformity with said Regulations.
(b) The Borrower and each of the Guarantors has obtained all
licenses, permits, franchises or other governmental authorizations necessary for
the ownership of its Property and for the conduct of its business, except for
those which, if not obtained, would not cause a Material Adverse Effect.
(c) Assuming none of the Lenders is acquiring its Note or
Notes hereunder or its interests hereunder with the assets of any employee
benefit plan subject to Part 4, Title I of ERISA, as of the date hereof, no
employee benefit plan, as defined in Section 3(2) of ERISA, (other than a
multi-employer plan described in Section 3(37) of ERISA) ("Employee Benefit
Plan") maintained by the Borrower or any of its Subsidiaries, or under which any
such Person could have any liability under ERISA or the Internal Revenue Code
(i) has failed to meet the minimum funding standards established in Section 302
of ERISA for which such Person continues to be liable, (ii) except as set forth
on Schedule "4.11(c)", has failed to comply, in any material respect, with any
applicable requirement of ERISA and of the Internal Revenue Code, including all
applicable rulings and regulations thereunder for which it continues to be
responsible, or (iii) has, to its knowledge, engaged in or been involved in a
Prohibited Transaction (as defined in ERISA or the Internal Revenue Code) under
ERISA or the Internal Revenue Code, except to the extent that a failure to
comply with the foregoing would not present a reasonable likelihood of having a
Material Adverse Effect. Except set forth on Schedule 4.11(c) attached hereto
and made a part hereof, no Employee Benefit Plan maintained by the Borrower or
any of its Subsidiaries has been terminated within the one (1) year period prior
to the date hereof. Neither the Borrower nor any of its Subsidiaries has
assumed, or received notice of a claim asserted against such Person, withdrawal
liability (as defined in the Multi-employer Pension Plan Amendments Act of 1980,
as amended) with respect to any multi-employer pension plan in which it
participates. Other than as shown on Schedule 4.11(c), neither the Borrower
noember of any Controlled Group (as defined in Sections 414(b),(c),(m) and (o)
of the Internal Revenue Code and Section 4001(a)(14) of ERISA). The Borrower and
each of its Subsidiaries has timely made all contributions when due with respect
to any multi-employer pension plan in which it participates and no event has
occurred triggering a claim against such Person for withdrawal liability with
respect to any multi-employer pension plan in which such Person participates.
(d) Neither the Borrower nor any of the Guarantors is in
violation of any applicable statute, regulation or ordinance of the United
States of America or any other country or jurisdiction, or of any state, city,
town, municipality, county or of any other jurisdiction, or of any agency
thereof, (including without limitation, Environmental Laws and regulations), a
violation of which would cause a Material Adverse Effect.
(e) The Borrower and all of the Guarantors are current with
all reports and documents required to be filed with any state or federal
39
securities commission or similar agency, if any, and are in full compliance in
all material respects with all applicable rules and regulations of such
commissions.
(f) Neither the Borrower nor any of the Guarantors are, or
will be after giving effect to the transactions contemplated hereby, subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act or to any federal or state statute or regulation limiting its ability
to incur indebtedness for money borrowed or guarantee such indebtedness as
contemplated by this Agreement or any other Loan Document.
(g) Neither the Borrower, nor any of its Subsidiaries is, or
will be after giving effect to the transactions contemplated hereby, an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
4.12 Business Interruptions. Within five (5) years prior to the date
hereof, neither the business, Property or operations of the Borrower or any of
the Guarantors have been materially and adversely affected in any way by any
casualty, strike, lockout, combination of workers, order of the United States of
America, or any state or local government, or any political subdivision or
agency thereof, directed against such Persons. To the best of the Borrower's
Knowledge, as of the Closing Date, except as set forth on Schedule "4.12"
attached hereto and made part hereof, there are no pending or threatened labor
disputes, strikes, lockouts or similar occurrences or grievances affecting the
business being operated by the Borrower or any of the Guarantors.
4.13 Names.
(a) Within five (5) years prior to the Closing Date, neither
the Borrower nor any of the Guarantors has conducted business under or used any
other name (whether corporate or assumed) except for the names shown on Schedule
"4.13(a)", attached hereto and made part hereof. As of the Closing Date, the
Borrower and its domestic Subsidiaries are, respectively, the sole owners of
each of their names listed on such Schedule "4.13(a)" and any and all business
done and all invoices issued in such trade names are the applicable party's
sales, business and invoices. As of the Closing Date, each trade name of the
Borrower and the Guarantors represents a division or trading style of such
entities and not a separate corporate subsidiary, affiliated, or independent
entity.
(b) As of the Closing Date, all federally registered
trademarks, patents or copyrights of the Borrower and the Guarantors are listed
on Schedule "4.13(b)" attached hereto and made part hereof. Schedule "4.13(b)"
shall also list all agreements for the license to use third party-owned
trademarks, patents and copyrights. The appropriate entity identified on such
Schedule "4.13(b)" is the sole owner of such Property except to the extent any
other Person has or claims rights in such Property as also described on such
Schedule "4.13(b)." To the best of the Borrower's Knowledge, neither the
Borrower nor any of the Guarantors are in violation in any material respect of
any intellectual property rights of any other Person with respect to such
Property.
4.14 Other Associations. As of the Closing Date, neither the Borrower
nor any of the Guarantors is engaged in any joint venture or partnership with
any other Person except as described on Schedule "4.14" attached hereto and made
part hereof.
4.15 Environmental Matters. Except as disclosed on Schedule "4.15"
attached hereto and made part hereof, or as would not have, singly or in the
aggregate, a Material Adverse Effect:
(a) The Borrower and each of its Subsidiaries has obtained all
permits, licenses and other authorizations (collectively "Environmental
40
Authorizations") that are required with respect to the use, ownership and
operation of their business, Real Property and other Property under any
Environmental Law and each such Environmental Authorization is in full force and
effect.
(b) The Borrower and each of its Subsidiaries is in compliance
with all terms and conditions of the Environmental Authorizations specified in
Section 4.15(a) above, and is also in compliance with, and not subject to
liability under, any Environmental Law applicable to it and its respective
businesses, operations, Real Property and other Property.
(c) There is no civil, criminal or administrative action,
suit, demand, claim, hearing, notice of violation, investigation, proceeding,
written notice or demand letter or request for information pending or, to the
knowledge of the Borrower, are any such actions or any investigations threatened
against the Borrower or any of its Subsidiaries under any Environmental Law.
(d) There are no past or present events, conditions,
circumstances, activities, practices, incidents, actions or current plans which
could reasonably be expected to materially interfere with or prevent compliance
by the Borrower or any of its Subsidiaries with any Environmental Law, or which
could reasonably be expected to give rise to any liability under any
Environmental Law, including, without limitation, liability under the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended ("CERCLA"), or similar applicable state, local or foreign laws for
response or corrective action, or which could reasonably be expected to form the
basis of any suit, proceeding, hearing, notice of violation, or notice of
potential liability or responsibility, based on or primarily related to the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport, shipping or handling, or the arrangement for treatment or
disposal or the emission, discharge, release or threatened release into the
environment, of any Hazardous Materials.
(e) Neither the Borrower nor any of its Subsidiaries has
received written notice that it has been identified as a potentially responsible
party or any request for information under CERCLA or any comparable state law,
nor has any such Person received any written notification that any Hazardous
Materials that it or any of its respective predecessors in interest has used,
generated, stored, treated, handled, transported or disposed of, or arranged for
transport or treatment of, or arranged for disposal or treatment of, has been
found at any site at which any Governmental Authority or private party is
conducting or plans to conduct an investigation or other action pursuant to any
Environmental Law.
(f) There have been no releases (i.e., any past or present
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, disposing or dumping into the environment) of
Hazardous Materials by the Borrower or any of its Subsidiaries or to the
Borrower's knowledge after due inquiry, any of their respective predecessors in
interest, at, on, upon, under, into or from any of the Real Properties. To the
knowledge of the Borrower, there have been no such releases at, on, upon, under,
from or into any real property in the vicinity of any of the Real Properties
that, through soil, air, surface water or groundwater migration or
contamination, has become located on, in or under such Real Properties.
(g) There is no friable asbestos or friable
asbestos-containing material in, on, or at any of the Real Properties or any
facility or equipment owned or operated by the Borrower or any of its
Subsidiaries.
41
(h) No Real Property of the Borrower or any of its
Subsidiaries is (i) listed or proposed for listing on the National Priorities
List under CERCLA or (ii) listed in the Comprehensive Environmental Response,
Compensation, Liability Information System List promulgated pursuant to CERCLA,
or on any comparable list published by any Governmental Authority.
(i) No regulated underground storage tanks or related piping
are located at, under or on the Real Property, or, to the best of the Borrower's
Knowledge, located in the vicinity of such Real Property.
(j) Except as listed on Schedule "3.1(h)" attached hereto, no
environmental reports, investigations, studies, audits, assessments or reviews
in the possession of the Borrower or any Subsidiary with respect to the current
business or operations of the Borrower or any Subsidiary or any Real Property or
other Property or facility now owned, operated, leased or controlled by the
Borrower or any Subsidiary contain information pertaining to any event(s) or
condition(s) which have or, to the best of the Borrower's present Knowledge, are
reasonably likely to cause a Material Adverse Effect. No environmental reports,
investigations, studies, audits, assessments or reviews in the possession of the
Borrower or any Subsidiary with respect to the current or prior business or
Property of the Borrower or any Subsidiary or any Real Property or other
Property or facility now, or to the best of Borrower's Knowledge, previously
owned, leased, operated or controlled by the Borrower or any Subsidiary, contain
information pertaining to events or conditions which would be, or otherwise are,
reasonably likely to have or cause a Material Adverse Effect.
(k) No Lien has been recorded under any Environmental Law with
respect to any facility, inventory, Real Property or other Property presently
owned, operated, leased or controlled by the Borrower or any of its
Subsidiaries.
4.16 Regulation O. No director, executive officer or principal
shareholder of the Borrower is a director, executive officer or principal
shareholder of any Lender. For the purposes hereof the terms "director" (when
used with reference to a Lender), "executive officer" and "principal
shareholder" have the respective meanings assigned thereto in Regulation O
issued by the Board of Governors of the Federal Reserve System.
4.17 Capital Stock. The authorized and outstanding capital stock of the
Borrower and each of the Guarantors is, as of the Closing Date, as set forth on
Schedule "4.17" attached hereto and made part hereof. All of the capital stock
of each such Person has been duly and validly authorized and, to the extent
outstanding, is issued and is fully paid and non-assessable and has been sold
and delivered to the holders thereof in compliance with, or under valid
exemption from, all federal and state laws and the rules and regulations of all
regulatory bodies thereof governing the sale and delivery of securities. As of
the Closing Date hereof, except for the rights and obligations set forth in
Schedule "4.17", there are no subscriptions, warrants, options, calls,
commitments, rights or agreements by which the Borrower or any of the Guarantors
or any of their respective shareholders are bound relating to the issuance,
transfer, voting or redemption of shares of its capital stock or any pre-emptive
rights held by any Person with respect to the shares of capital stock of such
parties. As of the Closing Date hereof, neither the Borrower nor any of the
Guarantors has issued any securities convertible into or exchangeable for shares
of its capital stock or any options, warrants or other rights to acquire such
shares or securities convertible into or exchangeable for such shares except as
shown on Schedule "4.17".
4.18 Solvency. After giving effect to the creation of the Revolving
Credit and the transactions described herein and therein, the Borrower and its
42
Subsidiaries, on a consolidated basis, are solvent, are able to pay their
respective debts as they become due and have capital sufficient to carry on
their respective business and all businesses in which any such Persons are about
to engage, and now own Property having a value both at fair valuation and at
present fair salable value greater than the amount required to pay such entity's
debts. After giving effect to the creation of the Revolving Credit and the
transactions described herein and therein, the Borrower and its Subsidiaries, on
a consolidated basis, will not be rendered insolvent by the execution and
delivery of this Agreement or any of the other agreements, documents or
instruments executed in connection with this Agreement (including, without
limitation, the Guarantees) or by the transactions contemplated hereunder or
thereunder.
4.19 Interrelatedness of the Borrower and the Guarantors. The business
operations of the Borrower and the Guarantors are related and have a common
business purpose. To permit their uninterrupted and continuous operations, such
companies now require and will from time to time hereafter require funds for
general business purposes. The proceeds of Advances under the Revolving Credit
will directly or indirectly benefit the Borrower and each of the Guarantors
severally and jointly, regardless of which entity requests or receives part or
all of the proceeds of such Advances from the Borrower.
SECTION 5. AFFIRMATIVE COVENANTS.
The Borrower covenants that until all of the Borrower's Obligations to
Lenders and the Administrative Agent hereunder are paid and satisfied in full
and the Revolving Credit has been terminated (it being understood that the
Borrower shall cause each of its Subsidiaries (or, as the case may be, the
Guarantors) to observe and comply in a timely manner with each provision of the
covenants in this Section 5 to the extent applicable to such Subsidiary (or, as
the case may be, such Guarantor)):
5.1 Payment of Taxes and Claims. The Borrower shall, and shall cause
each of its Subsidiaries to, pay, before they become delinquent,
(a) all taxes, assessments and governmental charges or levies
imposed upon it or upon any such party's Property, and
(b) all claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords and other like Persons, which, if unpaid, would result
in the imposition of a Lien upon its Property; provided, however, that the
Borrower and its Subsidiaries shall not be required to pay any such tax,
assessment, charge, levy or claim if the amount, applicability or validity
thereof shall at the time be contested in good faith and by appropriate
proceedings by such party, and if such party shall have set aside on its books
adequate reserves in respect thereof, if so required in accordance with GAAP;
which deferment of payment is permissible so long as no Lien has been entered
and such party's title to, and its right to use, its Property are not materially
adversely affected thereby.
5.2 Maintenance of Properties and Corporate Existence.
(a) Property - The Borrower shall, and shall cause each of the
Guarantors to, maintain its Property in good condition (normal wear and tear and
fire and other insured casualty excepted) and make all necessary renewals,
replacements, additions, betterments and improvements thereto and will pay and
discharge when due the cost of repairs and maintenance to its Property, and will
pay all rentals when due for all real estate leased by such parties.
(b) Property Insurance - The Borrower shall, and shall cause
each of the Guarantors to, maintain and deliver to the Administrative Agent,
43
upon the Administrative Agent's request, evidence of business interruption
insurance and insurance on all insurable tangible Property against fire, flood,
casualty and such other hazards as may be reasonably acceptable to the
Administrative Agent in such amounts, with such deductibles and with such
insurers as are customary for companies in the same or similar business located
in the same or similar area.
(c) General and Products Liability Insurance - The Borrower
shall, and shall cause each of the Guarantors to, maintain general liability and
products liability insurance in such amounts as is customary for companies in
the same or similar businesses located in the same or similar area and shall
deliver to the Administrative Agent upon the Administrative Agent's request,
evidence of such insurance.
(d) Financial Records - The Borrower shall, and shall cause
each of the Guarantors to, keep in all material respects current and accurate
books of records and accounts in which full and correct entries will be made of
all of its business transactions, and will reflect in its financial statements
adequate accruals and appropriations to reserves, all in accordance with GAAP.
The Borrower and each of the Guarantors shall not change their respective fiscal
year end dates without the prior written consent of the Administrative Agent.
(e) Corporate Existence and Rights - Except for mergers,
consolidations and liquidations permitted under this Agreement, the Borrower
shall, and shall cause each of the Guarantors to, do (or cause to be done) all
things necessary to preserve and keep in full force and effect its existence,
good standing, rights and franchises unless Borrower's failure to do so would
not have a Material Adverse Effect.
(f) Compliance with Law - The Borrower shall, and shall cause
each of the Guarantors to, comply with all laws, ordinances, governmental rules
and regulations to which it is subject, and will obtain all licenses, permits,
franchises or other governmental authorizations necessary to the ownership of
its Property or to the conduct of its businesses, a violation of which or
failure to obtain would have a Material Adverse Effect.
5.3 Litigation. The Borrower shall, and shall cause each of its
Subsidiaries to, give immediate notice to the Administrative Agent of any
litigation or governmental investigation affecting the Borrower or any of its
Subsidiaries except for litigation with potential liability to any such party of
less than $5,000,000 or litigation which is fully covered by insurance
(exclusive of a deductible not to exceed $5,000,000).
5.4 Issue Taxes. The Borrower shall, and shall cause each of the
Guarantors to, pay all taxes (other than bank shares taxes and taxes based upon
or measured by any Lender's income or revenues or any personal property tax), if
any, in connection with the issuance of the Restated Revolving Credit Notes, the
Restated Swing Line Note and the Guarantees (as applicable). The obligations of
each such party hereunder shall survive the payment of such party's Obligations
hereunder and the termination of this Agreement.
5.5 Lender Accounts. The Borrower shall maintain its major depository
and disbursement accounts with the Administrative Agent.
5.6 Employee Benefit Plans. The Borrower shall, and shall cause each of
its Subsidiaries to, (a) fund all of its Employee Benefit Plans in a manner that
will satisfy the minimum funding standards of Section 302 of ERISA (unless
failure to do the same would not have a Material Adverse Effect) and will
promptly satisfy any accumulated funding deficiency that arises under Section
302 of ERISA, (b) furnish the Administrative Agent, promptly after the filing of
the same, with copies of all reports (with all attachments thereto) required, by
44
statute, regulation, administrative consent or order or similar written
understanding, to be filed with the United States Department of Labor, the
Pension Benefit Guaranty Corporation ("PBGC") or the Internal Revenue Service
("IRS") with respect to all Employee Benefit Plan(s) to the extent such reports
contain information pertaining to events or conditions which would be, or
otherwise are, reasonably likely to have a Material Adverse Effect, or reports
which any such party, or any member of a Controlled Group of which the Borrower
or any of its Subsidiaries has knowledge (with respect to any assertions of
termination liability under Title IV of ERISA or, withdrawal liability, as
defined in ERISA), may receive from the United States Department of Labor, the
IRS or the PBGC, with respect to any such Employee Benefit Plan(s), and (c)
promptly advise the Administrative Agent of the occurrence of any Reportable
Event (as defined in Section 4043 of ERISA) which requires the giving of notice
to the PBGC or any Prohibited Transaction, of which the Borrower or any of its
Subsidiaries has knowledge, with respect to any such Employee Benefit Plan(s)
and the action which such party proposes to take with respect thereto. The
Borrower and each of its Subsidiaries will make all contributions when due with
respect to any multi-employer pension plan in which it participates and will
promptly advise the Administrative Agent (i) upon its receipt of notice of the
assertion against such party of a claim for wity, (ii) upon the Borrower's
knowledge of the occurrence of any event which would trigger the assertion of a
claim for withdrawal liability against the Borrower or any of its Subsidiaries,
or (iii) upon the Borrower's knowledge of the occurrence of any event which, to
the best of the Borrower's Knowledge, would, after the date hereof, place the
Borrower or any of its Subsidiaries in a Controlled Group (other than as shown
on Schedule "4.11(c)" hereto) as a result of which any member (including such
party) thereof may be subject to a claim for withdrawal liability, whether
liquidated or contingent.
5.7 Financial and Business Information. The Borrower shall deliver to
the Administrative Agent and to each of the Lenders the following:
(a) Financial Statements and Covenant Reports Such data,
reports, statements and information, financial or otherwise, as the
Administrative Agent may reasonably request (except for information for which an
attorney/client privilege has been reasonably claimed or asserted by the
Borrower) with sufficient copies for all Lenders, including, without limitation:
(i) within forty-five (45) days after the end of
each of the first three quarterly accounting periods in each fiscal year of the
Borrower, the consolidated statement of operations of the Borrower and its
Subsidiaries for such quarter and for the expired portion of the fiscal year
ending with the end of such quarter, setting forth in comparative form the
corresponding figures for the corresponding periods of the previous fiscal year,
and the balance sheet of the Borrower and its Subsidiaries as at the end of such
quarter, setting forth in comparative form the corresponding figures as at the
end of the corresponding period of the previous fiscal year, all on a
consolidated and consolidating basis, in reasonable detail and certified by the
chief financial officer or vice president of finance of the Borrower to have
been prepared in accordance with GAAP (without footnotes);
(ii) within one hundred twenty (120) days after
the end of each fiscal year of the Borrower, the consolidated statement of
operations of the Borrower for such year, the balance sheet of the Borrower as
at the end of such fiscal year and a statement of cash flows for such fiscal
year, all on a consolidated and consolidating basis (statement of cash flows to
be consolidated only), setting forth in each case in comparative form the
corresponding figures as at the end of the previous fiscal year, all in
reasonable detail, audited and certified without qualifications, except those
which are acceptable to the Administrative Agent, (as to the consolidated
statements) by independent public accountants of recognized standing, selected
by the Borrower and satisfactory to the Administrative Agent, to have been
45
prepared in accordance with GAAP, and such independent public accountants shall
also certify without qualifications except those which are acceptable to the
Administrative Agent that in making the examinations necessary to their
certification mentioned above they have reviewed the terms of this Agreement and
the accounts and conditions of the Borrower during the accounting period covered
by the certificate and that such review did not disclose the existence of any
condition or event which constitutes an Event of Default (or if such conditions
or events existed, describing them); and
(iii) by March 1 of each year an internally
prepared budget of projected expenses and revenues for such fiscal year.
(b) Notice of Event of Default Promptly upon becoming aware of
the existence of any condition or event which constitutes a Default or an Event
of Default under this Agreement, a written notice specifying the nature and
period of existence thereof and what action the Borrower is taking (and proposes
to take) with respect thereto;
(c) Notice of Claimed Default Immediately upon receipt by the
Borrower or any of its Subsidiaries of a notice of default, oral or written,
given to such party by any creditor for borrowed money or holding Indebtedness
of such party which has an outstanding principal balance in excess of
$1,000,000, a copy of such notice (or a written explanation, if given orally)
along with an explanation of what action the Borrower is taking (and proposes to
take) with respect thereto;
(d) Securities and Other Reports If any Subsidiary of the
Borrower becomes a publicly traded company, promptly upon its becoming
available, one copy of each financial statement, report, notice or proxy
statement sent by such party to stockholders generally, and a copy of each
regular or periodic report, and any registration statement, or prospectus or any
other document in respect thereof filed by such party with any securities
exchange or with all federal or state securities and exchange commissions or any
successor agency. In addition to the foregoing, the Borrower shall, promptly
upon its becoming available, deliver to the Administrative Agent one copy of
each regular or periodic report and any registration statement or prospectus and
any other document filed by the Borrower with any securities exchange or with
all federal or state securities and exchange commissions or any successor
agency.
5.8 Officers' Certificates. Along with the set of financial statements
delivered to the Administrative Agent at the end of each calendar quarter and
fiscal year pursuant to Section 5.7(a) hereof, the Borrower shall deliver to the
Administrative Agent a certificate (in the form of Exhibit 5.8 attached hereto
and made a part hereof) ("Quarterly Compliance Certificate") from the chief
financial officer or vice president of finance of the Borrower (and as to
certificates accompanying the annual statements of the Borrower, also certified
by the Borrower's independent certified public accountant) in form and substance
satisfactory to the Administrative Agent setting forth, to the best of such
officer's knowledge after due investigation:
(a) Covenant Compliance - the information (including detailed
calculations) required in order to establish whether the Borrower is in
compliance with the requirements of Sections 5, 6 and 7, as of the end of the
period covered by the financial statements then being furnished (and any
exhibits appended thereto) under Section 5.8; and
(b) Event of Default - that the signer has reviewed the
relevant terms of this Agreement and has made (or caused to be made under his
supervision) a review of the transactions and conditions of the Borrower from
the beginning of the accounting period covered by the income statements being
delivered therewith to the date of the certificate, and that such review has not
46
disclosed the existence during such period of any condition or event which
constitutes a Default or an Event of Default or if any such condition or event
existed or exists, specifying the nature and period of existence thereof and
what action the Borrower has taken or proposes to take with respect thereto.
5.9 Inspection. So long as the Borrower is indebted to Lenders, and
subject in all events to the provisions of Section 10.24 hereof, the Borrower
and each of the Guarantors will, on not less than twenty-four (24) hours prior
notice, permit any of the Administrative Agent's officers or other
representatives (at its own expense, prior to the occurrence of an Event of
Default) to visit and inspect during business hours any of the locations of the
Borrower and each of the Guarantors, to examine and audit all of such parties'
books of account, records, reports and other papers (to the extent not subject
to an attorney-client privilege), to make copies and extracts therefrom and to
discuss such parties' affairs, finances and accounts with its officers,
employees and independent certified public accountants. Representatives of each
Lender may accompany the Administrative Agent during each such inspection and
visit. Representatives of any Lender may visit with executive officers of the
Borrower as they may mutually agree.
5.10 Tax Returns and Reports. Subject to Section 10.24 hereof, at the
Administrative Agent's request from time to time, the Borrower and each of the
Guarantors shall immediately furnish the Administrative Agent with copies of the
annual federal and state income tax returns of each such party for such years
such parties have not been audited and may be subject to audit. The Lenders and
the Administrative Agent shall not disclose any such returns or other written
financial information to any third party (except as permitted in Section 5.11
hereof) without the prior written consent of the Borrower, or unless required by
law or so compelled by order of a court of competent jurisdiction. The Borrower
further agrees that if requested by the Administrative Agent, it shall
immediately furnish the Administrative Agent with copies of all reports filed
with any Governmental Authority or agency, board or commission and shall supply
such information with respect to each of the Guarantors which becomes a publicly
traded company.
5.11 Information to Participants and Assignees. Subject to Section
10.24 hereof, the Administrative Agent, the Syndication Agent and each Lender
may divulge to any actual or prospective participant, assignee or co-lender it
may obtain with respect to the Revolving Credit, or any portion thereof, all
information, and furnish to such Person copies of reports, financial
statements, certificates, and documents obtained under any provision of this
Agreement or any of the other Loan Documents. The Agents and the Lenders shall
not divulge the contents of any written financial information to any other
Person other than as set forth above without the prior written consent of the
Borrower, or unless required by law or so compelled by an order of a court of
competent jurisdiction.
5.12 Material Adverse Developments. The Borrower agrees that
immediately upon becoming aware of any development or other information outside
the ordinary course of business (excluding matters of a general economic,
financial or political nature) which materially and adversely affects its, or
any of its Subsidiaries' Property, businesses, prospects, or financial
condition, in all cases taken as a whole on a consolidated basis, or such
parties' ability to perform under this Agreement or any of the other Loan
Documents (as applicable), it shall give to the Administrative Agent telephonic
or telegraphic notice specifying the nature of such development or information
and such anticipated effect. In addition, such verbal communication shall be
confirmed by written notice thereof to the Administrative Agent on the same day
such verbal communication is made.
5.13 Additional Parties. In the event that any Person becomes a First
Tier Subsidiary of the Borrower after the Closing Date (each such First Tier
47
Subsidiary referred to herein as an "Additional Party" and collectively as the
"Additional Parties"), then, promptly after such Person becomes a First Tier
Subsidiary of the Borrower (but in any event prior to any capitalization (other
than de minimis capitalization) of, or contribution of assets to, such First
Tier Subsidiary by the Borrower), the Borrower shall cause such First Tier
Subsidiary to execute and deliver all such agreements, guarantees, suretyship
agreements, documents and certificates (including any amendments to the Loan
Documents) and do such other acts and things as the Administrative Agent may
reasonably request in order to have such Subsidiary guarantee and act as surety
for the Obligations and effect fully the purposes of this Agreement and the
other Loan Documents and to provide for payment of the Obligations in accordance
with the terms of this Agreement and the other Loan Documents. Without limiting
the generality of the foregoing, in such event, such Additional Party shall
execute and deliver to the Administrative Agent a Guarantee (upon the execution
of which, such Additional Party shall become a Guarantor for all of the
Obligations and for all purposes hereunder and under the other Loan Documents).
5.14 Performance of Obligations. The Borrower shall, and shall cause
each of the Guarantors to, perform in all material respects all of its
obligations under the terms of each mortgage, indenture, security agreement,
other debt instrument and any material contract by which it is bound or to which
it is a party, except where such nonperformance would not, singly or in the
aggregate, have a Material Adverse Effect.
5.15 Further Assurances. At any time and from time to time upon the
reasonable request of the Administrative Agent, the Borrower shall, and shall
cause each of the Guarantors to, execute and deliver such further documents,
instruments and agreements, and do such other acts and things as the
Administrative Agent may reasonably request, in order to effect fully the
purposes of this Agreement and the other Loan Documents and to provide for
payment of the Obligations in accordance with the terms of this Agreement and
the other Loan Documents.
5.16 Evidence of Intercompany Indebtedness. All Indebtedness owing at
any time and from time to time from the Borrower to any of its Subsidiaries or
any of the Borrower's Subsidiaries to the Borrower, or to any other such
Subsidiary shall be evidenced by a master promissory note or notes
("Intercompany Notes"), in form and substance satisfactory to the Administrative
Agent. All Intercompany Notes, in the case of any such existing Indebtedness,
shall have been executed, or shall contemporaneously herewith be executed by the
applicable obligor(s). True and correct copies of all Intercompany Notes
(including all amendments, replacements and additions executed from time to
time) shall be delivered to the Administrative Agent promptly upon execution
thereof accompanied by a certificate executed by an Authorized Officer of the
Borrower to the effect that such copies are true and correct copies of the
original instruments and that all such intercompany Indebtedness is then
evidenced by such Intercompany Notes.
SECTION 6. NEGATIVE COVENANTS.
The Borrower covenants that until all of the Borrower's Obligations
hereunder to the Lenders are paid and satisfied in full and the Revolving Credit
has been terminated that (it being understood that the Borrower shall cause each
of its Subsidiaries (or, as the case may be, the Guarantors) to observe and
comply in a timely manner with each provision of the covenants in this Section 6
to the extent applicable to such Subsidiary (or, as the case may be, such
Guarantor)):
6.1 Mergers. The Borrower shall not, nor shall it cause or permit any
of the Guarantors to, merge or consolidate or otherwise combine with or into
48
any other Person other than the merger of a Subsidiary of Borrower into a
Guarantor (or into another Person which thereby becomes a Guarantor to the
extent such merger is consummated contemporaneously with and as part of a
transaction permitted under Section 6.2 below) or into the Borrower, or commence
a dissolution or liquidation other than a liquidation or dissolution of a
Guarantor pursuant to which all Property thereof is directly and promptly
transferred into the Borrower or another Guarantor.
6.2 Acquisitions. The Borrower shall not, nor shall it cause or permit
any of the Guarantors to, acquire all or a material portion of the stock,
securities or other Property of any nature (other than inventory or supplies
purchased in the ordinary course of business of the purchaser) of any Person in
any transaction or in any series of related transactions or enter into any sale
and leaseback transaction, provided, however, that the Borrower and the
Guarantors may consummate any such transaction (a "Permitted Acquisition") only
if: (i) no Default or Event of Default hereunder has occurred and is outstanding
or would otherwise be caused by, or would exist after giving effect to, the
consummation of such acquisition; (ii) the aggregate consideration (exclusive of
the working capital needs of the acquired entity) for all such acquisitions in a
given year (excluding in the case of 1997, the consideration for the acquisition
of Color Clings, Inc.) shall not exceed an amount (the "Acquisition Amount")
equal to thirty (30%) percent of the prior year-end Consolidated Net Worth, with
a carryover only into the following year, commencing with a carryover from 1997
to 1998, of fifty (50%) percent of the previous year's unused Acquisition
Amount, exclusive of any carryover amount from a previous year, (for purposes of
calculating the amount to be carried into any other year, the amount of
acquisitions in any year shall first be counted against the Acquisition Amount
(exclusive of any carryover amount from the previous year)); (iii) the aggregate
consideration in all acquisitions following the Closing Date until termination
of the Revolving Credit shall not exceed forty (40%) percent of the Consolidated
Net Worth as of the end of the year immediately preceding the year of
determination, (iv) the acquiring Person must acquire, in the case of a stock
acquisition, at least 80% of the issued and outstanding capital stock of the
Person being acquired (provided, however, that if the acquiring Person acquires
less than 100% of the issued and outstanding capital stock of the acquired
Person, the owners of the unacquired shares must be bound by a shareholders'
agreement reasonably satisfactory to the Administrative Agent which shall
include, at a minimum, "drag along" rights in respect of such minority shares);
(v) the Borrower and the Guarantors shallingent liabilities which would cause,
or be reasonably likely to cause, a Material Adverse Effect, (vi) the business
of the acquired entity shall be generally similar to the lines of business of
the Borrower and the Guarantors; (vii) any Person acquired by the Borrower (and
becoming a First Tier Subsidiary of the Borrower) shall unconditionally
guarantee and become surety for all of the Borrower's Obligations on terms and
conditions satisfactory to the Administrative Agent; (viii) the Administrative
Agent shall have received a satisfactory certificate (substantially in the form
of Exhibit 6.2 attached hereto and made part hereof) prepared and signed by the
chief financial officer or vice president of finance of the Borrower showing the
cost of acquiring the applicable Person exclusive of amounts attributable to the
working capital requirements of such Person and (after taking into effect the
proposed acquisition) pro forma covenant compliance with the financial covenants
set forth in Section 7 herein immediately following the applicable acquisition
and projected compliance with such covenants for no fewer than the next four (4)
succeeding fiscal quarters of the Borrower, setting forth in reasonable detail
the calculations used in presenting such costs and projections and with such
supporting information as may be reasonably requested by the Administrative
Agent; and (ix) the Administrative Agent shall have received a satisfactory
officer's certificate from an Authorized Officer of the Borrower to the effect
that the conditions set forth in clauses (i)-(viii) have been satisfied as of
the date of the acquisition.
49
6.3 Liens and Encumbrances. (a) The Borrower shall not, nor shall it
cause or permit any of the Guarantors to: (i) execute a negative pledge
agreement with any Person covering any of its Property, or (ii) create or cause
or authorize or agree or consent to cause or permit, assume or suffer to exist
or remain in effect (upon the happening of a contingency or otherwise), its
Property, whether now owned or hereafter acquired, to be subject to a Lien or be
subject to any claim except for the following ("Permitted Liens"):
(1) Liens securing taxes, assessments or governmental charges
or levies or the claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords, and other like Persons, or Liens evidencing consignment
or bailment arrangements with the Borrower or any of the Guarantors as consignee
or bailee, provided the payment thereof is not at the time required by Section
5.1;
(2) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance,
social security and other like laws and in connection with leases or trade
contracts;
(3) Purchase money security interests (attaching solely to the
fixed asset purchased and securing only the obligation incurred to finance such
purchase) from the Borrower or any of the Guarantors to Persons providing
financing for permitted Consolidated Capital Expenditures provided that each
such financing obligation incurred by the Borrower shall not exceed the lesser
of (A) cost or (B) appraised fair market value;
(4) Existing Liens described on Schedule "4.4" hereto;
(5) Liens (other than on Accounts and/or Inventory) deemed to
be assumed or taken subject to by the Borrower or any of the Guarantors in
connection with Permitted Acquisitions on Property of the acquired entity as of
the date of the Permitted Acquisition; and
(6) Liens which are not otherwise permitted pursuant to this
Section, securing Indebtedness not exceeding $200,000 in the aggregate
outstanding at any one time.
(b) If the Borrower or any Subsidiary shall create or assume any Lien
upon any of its Property or income or profits therefrom, other than Liens
permitted under this Section 6.3, and without having such provisions be deemed
for any purpose to represent a consent by any Lender or Lenders to such Lien, it
shall make or cause to be made effective provisions whereby the Obligations will
be secured by such Lien equally and ratably with any and all other indebtedness
secured thereby.
6.4 Transactions With Affiliates or Subsidiaries. The Borrower shall
not, nor shall it cause or permit any of the Guarantors to, enter into any
transaction of any kind or nature with any Affiliate, including, without
limitation, the purchase, sale, transfer or exchange of Property, or the loaning
or giving of funds to any Affiliate or any Subsidiary, excepting (a) sales of
Property and/or services and co-licensing or co-marketing arrangements or
agreements pursuant to the reasonable require ments of the Borrower's or the
Guarantors' business and upon terms substantially the same and no less favorable
to such party as it would obtain in a comparable arm's length transaction with
any Person not an Affiliate, and so long as such transaction is not otherwise
prohibited hereunder, (b) loans and transfers of Property by the Borrower to the
Guarantors and loans and transfers of Property by the Guarantors to the Borrower
or to other Guarantors, (c) loans by the Borrower or a Guarantor to any of the
Subsidiaries (other than Guarantors) after the date hereof in an aggregate
amount as to all such loans under this clause (c) not to exceed $20,000,000 at
any time outstanding in the aggregate after the
50
Closing Date, provided, however, that a loan may be made by the Borrower or a
Guarantor to any of the Subsidiaries (other than Guarantors) which, when
aggregated with all then outstanding loans referenced in this clause (c), would
exceed $20,000,000 so long as the recipient of such loan unconditionally
guarantees and becomes surety for all of the Borrower's Obligations on terms and
conditions and under a written guaranty satisfactory to the Administrative Agent
within sixty (60) days of the funding of such loan, (d) the de minimis transfer
by the Borrower or any of the Guarantors of their Property to any of the
Subsidiaries and (e) transactions expressly permitted pursuant to Sections 6.5
and 6.6 hereof.
6.5 Guarantees. Excepting (a) the endorsement in the ordinary course of
business of negotiable instruments for deposit or collection, (b) the
Guarantees, (c) guarantees by the Borrower or by any Guarantor of operating
leases of any Subsidiary entered into in the ordinary course of business, (d)
indemnification obligations to directors and officers under applicable law or
set forth in the certificate of incorporation and/or by-laws of the Borrower or
any Subsidiary, (e) guarantees by the Borrower or by any Guarantor for the
Indebtedness of Borrower or any Guarantor and (f) additional guarantees by the
Borrower and/or any of the Guarantors for the Indebtedness of any Person which,
together with Indebtedness permitted under Section 6.12(b)(iv) below shall not
exceed $20,000,000 at any one time outstanding, the Borrower shall not, nor
shall it cause or permit any of the Guarantors to, become or be liable, directly
or indirectly, primary or secondary, matured or contingent, in any manner,
whether as guarantor, surety, accommodation maker, or otherwise, and for the
existing or future indebtedness or obligation(s) of any kind or nature of any
Person.
6.6 Dividends and Redemptions. (a) The Borrower shall not, nor shall it
cause or permit any of its Subsidiaries to, directly or indirectly: (i) declare,
pay, authorize or make any form of dividend (except for stock dividends or stock
splits) or return any capital, in cash or property, to its shareholders, their
successors or assigns, except (A) as expressly permitted by Section 6.1 hereof,
(B) dividends payable to the Borrower or any Guarantor by any Subsidiary, (C)
dividends by the Borrower or a Subsidiary of Borrower of the stock of a
Subsidiary of the Person making the dividends, so long as the Borrower complies
with Section 2.11(b) hereof in conjunction with such transaction, (D) in each
fiscal year of Borrower, cash dividends declared and paid by the Borrower or any
Subsidiary of the Borrower which, when aggregated with all other dividends paid
in such year under this clause (D) and all redemptions, etc. made in such year
under clause (ii)(D) below (including amounts set aside for such purposes in
such year pursuant to clause (iii) below) by the Borrower and its Subsidiaries,
do not exceed 35% of the Borrower's Consolidated Net Income (only if positive)
for the prior fiscal year and (E) cash dividends in an aggregate amount, when
aggregated with redemptions, etc. made under clause (ii)(C) below, not to exceed
100% of the net cash proceeds of the sale of the Tuggle Road Building, (ii)
redeem, retire, purchase or otherwise acquire or retire, for any consideration,
any of the capital stock of the Borrower or any of the Subsidiaries now or
hereafter outstanding (or any warrants for or options or stock appreciation
rights in respect of any such stock), except (A) the Borrower or any of the
Guarantors may redeem, retire, purchase or otherwise acquire or retire its
capital stock from its employees as part of reasonable employee incentive plans
and severance arrangements, (B) Rapidforms, Inc., Russell & Miller, Inc. and
Newshire Forms, Inc. may redeem the outstanding capital stock of their minority
shareholders and/or option holders, (C) the Borrower may redeem, retire,
purchase or otherwise acquire or retire its capital stock for an aggregate
consideration, when aggregated with dividends made under clause (i)(E) above, in
an amount not to exceed 100% of the net cash proceeds of the sale of the Tuggle
Road Buildiach fiscal year of Borrower, redemptions, etc made by the Borrower or
51
any Subsidiary of the Borrower which, when aggregated with all dividends paid in
such year under clause (i)(D) above and all other redemptions, etc. made in such
year under this clause (D) (including amounts set aside for such purposes in
such year pursuant to clause (iii) below) by the Borrower and its Subsidiaries,
do not exceed 35% of the Borrower's Consolidated Net Income (only if positive)
for the prior fiscal year or (iii) set aside any funds for any of the purposes
set forth in clauses (a)(i) or (ii) hereof;
(b) Notwithstanding the provisions of paragraph (a) above, (i)
dividends or redemptions, etc. otherwise permitted as set forth above shall not
be made so long as any Default or Event of Default is then outstanding or would
be outstanding after taking into effect such dividend, redemption or setting
aside of funds, and (ii) no dividend may be declared or paid or redemption made
if the Borrower's ratio of Consolidated Funded Debt to Consolidated Net Worth is
greater than .40 to 1 as of the end of the fiscal quarter immediately preceding
the date of payment of any such dividend or redemption.
6.7 Loans and Investments. The Borrower shall not, nor shall it cause
or permit any of the Guarantors to, make or have outstanding Investments in, any
Person, other than (a) Investments in commercial paper maturing in one (1) year
or less from the date of issuance rated at the time of purchase either A-1 by
S&P, P-1 by Moody's or other similar nationally recognized credit rating agency
of similar standing; (b) Investments in direct obligations of the United States
of America, or any agency or instrumentality thereof, maturing in five (5) years
or less from the date of acquisition thereof; (c) Investments in certificates of
deposit maturing within one (1) year from the date of origin issued by, or money
market funds on deposit with, a Lender; (d) Investments in repurchase agreements
secured by direct obligations of the United States of America, or any agency
thereof, maturing in twelve (12) months or less and having a market value at the
time such repurchase agreement is entered into at least equal to the amount of
the repurchase obligations or thereunder, entered into with a Lender, (e) loans
and guarantees permitted under Sections 6.4 and 6.5 above, (f) Investments which
are Permitted Acquisitions, (g) Investments by the Borrower or any of the
Guarantors as permitted under Sections 6.2(a) and (b), (h) Investments in any
Guarantor and Investments in any other Subsidiary of the Borrower as such
Investments existed as of the Closing Date, (i) permitted Investments in
connection with Asset Sales permitted pursuant to Section 6.13(b)(i)(C), (j)
other Investments not to exceed $5,000,000 in the aggregate outstanding at any
one time, and (k) loans to its employees or directors made by the Borrower or
any Guarantor for the purpose of enabling such employees or directors to
exercise stock options up to an aggregate loan balance of $2,000,000 at any time
outstanding (as to all loans permitted under this clause (k)).
6.8 Use of Lenders' Name. The Borrower shall not, nor shall it cause or
permit any of the Guarantors to, use any Lender's name (or the name of any
Lender's Affiliates) or the Agents' names in connection with any of its business
operations. Nothing herein contained is intended to permit or authorize the
Borrower or any of its Subsidiaries to make any contract or extend any
commitment on behalf of any Lender or either of the Agents.
6.9 Amendment or Waivers of Certain Documents. (a) The Borrower shall
not, nor shall it cause or permit any of the Guarantors to, amend, modify,
supplement or otherwise change the terms of their respective certificates of
incorporation or bylaws or any agreement entered into by the Borrower or any of
the Guarantors with respect to their respective capital stock or other equity
interests (other than any amendment, modification, supplement or change which
individually, or together with all amendments, modifications, waivers or changes
made, would not be adverse to the Borrower and the Guarantors taken as a whole,
the Administrative Agent or the Lenders) without the prior written consent of
the Administrative Agent, which consent shall not be unreasonably withheld.
(b) The Borrower shall not, nor shall it cause or permit any
of the Guarantors to, amend, modify, supplement or otherwise change, or waive
52
compliance with or consent to a departure from, any of the terms or provisions
of any Existing Debt of the Borrower, the Acquisition Documents or any other
material agreement of the Borrower or the Guarantors (other than any amendments,
modifications, supplements, changes, waivers and consents which individually, or
together with all other amendments, modifications, supplements, changes, waivers
and consents made, would not be adverse to the Borrower, any of the Guarantors,
the Administrative Agent or the Lenders) without the prior written consent of
the Administrative Agent, which consent shall not be unreasonably withheld.
(c) Neither the Borrower nor any Subsidiary shall enter into,
suffer to exist or become or remain subject to any agreement or instrument to
which any such Person is a party or by which any such Person or its Property may
be subject or bound, except for the Loan Documents, that would prohibit or
restrict in any manner, directly or indirectly, or require the consent of any
Person to, any amendment to, or waiver or consent to departure from the terms
of, any of the Loan Docum6.10 Sale and Lease-Backs. The Borrower shall not, nor
shall it cause or permit any of the Guarantors to, directly or indirectly,
become or thereafter remain liable as lessee or as guarantor or surety with
respect to the lessee's obligations under any lease, whether an operating lease
or a capital lease, of any property (whether real or personal or mixed), whether
now owned or hereafter acquired, (i) which the Borrower or any of the Guarantors
has sold or transferred or is to sell or transfer to any other Person or (ii)
which the Borrower or any such Subsidiary intends to use for substantially the
same purpose as any other property which has been or is to be sold or
transferred by the Borrower or any such Subsidiary to any Person in connection
with such lease, if in the case of clause (i) or (ii) above, such sale and such
lease are part of the same transaction or a series of related transactions or
such sale and such lease occur within one (1) year of each other or are with the
same other Person, except for a transaction of a type described in this
paragraph involving the Tuggle Road Building so long as no Event of Default has
occurred or would occur after taking into effect such transaction.
6.11 Business Conducted. The Borrower shall not, nor shall it cause or
permit any of the Guarantors to, engage, directly or indirectly, in any line of
business substantially different from the business conducted by it immediately
prior to the Closing Date, or engage in business or lines of business which are
not reasonably and substantially related thereto.
6.12 Indebtedness. The Borrower shall not, nor shall it cause or permit
any of the Guarantors to (a) make any prepayments of any nature whatsoever (or
deposit money or other Property for the purpose thereof) on any existing or
future long-term Indebtedness to any Person except the conversion of
Indebtedness to equity so long as the entire amount of the portion of the
Indebtedness so prepaid is so converted or (b) hereafter incur or be or become
liable for Indebtedness except for (i) Indebtedness to the Lenders pursuant to
this Agreement, (ii) purchase money financing supported by Liens permitted
pursuant to Sections 6.3(a)(3) or 6.3(a)(5) above and Indebtedness secured by
the existing Liens described in Section 6.3(a)(4), (iii) the issuance of the
Unsecured Senior Notes reflecting Indebtedness incurred to repay loans the
proceeds of which are used to fund Permitted Acquisitions; and (iv) additional
Indebtedness in an aggregate principal amount, together with all obligations
described in Section 6.5(f) herein, not exceeding $20,000,000.
6.13 Restrictions on Fundamental Changes; Asset Sales. The Borrower
shall not, nor shall it cause or permit any of its Subsidiaries to, (a)
materially alter the corporate, partnership, capital or legal structure of the
Borrower or any Subsidiary of the Borrower other than alterations of the
structure of (i) Guarantors as permitted in Sections 6.1, 6.2, 6.6(a)(i)(C), 6.9
and 6.12(a) above, (ii) any Subsidiaries which are not Guarantors so long as (A)
such alteration would not give rise to a Material Adverse Effect and (B) no
53
Default or Event of Default has occurred or is continuing or would occur after
taking into effect such alteration or (b) make or effect any Asset Sale
excepting (i) Asset Sales made (A) at a time when no Default of Event or Default
is outstanding hereunder or would be outstanding after taking into effect such
Asset Sale, (B) the consideration received shall be an amount at least
substantially equal to the fair market value of the Property which is the
subject of the Asset Sale, as certified to the Administrative Agent by the
Borrower's chief financial officer or vice president of finance; (C) at least
20% of the consideration received therefrom shall be cash (any non-cash
consideration must be in the form of either (1) senior commercial paper with a
rating of at least "A-1" by S & P or "P-1" by Moody's, (2) a senior debt
instrument fully secured by marketable securities of a company listed on a
nationally recognized exchange) or (3) a debt instrument secured by a first lien
on the assets sold; (D) such Asset Sales are not to an Affiliate of the seller;
(E) the Borrower complies with the terms of Section 2.11; and (F) the assets
sold in all transactions permitted hereby after the Closing Date (exclusive of
the sale of the Tuggle Road Building) shall have an aggregate fair market value
of not more than $43,750,000; (ii) transactions permitted under Section 6.1, 6.2
or Section 6.4 above, (iii) the Borrower and any of its Subsidiaries may from
time to time abandon any personal Property of the Borrower or such Subsidiary
which is no lthe business of the Borrower or such Subsidiary and cannot be sold
and (iv) at a time when no Default or Event of Default is outstanding hereunder
or would be outstanding after taking into effect such Asset Sale, sales of
minority interests of capital stock or partnership interests of any Subsidiary
(other than a Guarantor) to any employees thereof.
6.14 Agreements Regarding Dividends. Neither the Borrower nor any of
the Guarantors shall create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind (whether arising
by operation of law, by agreement, by its articles or certificate of
incorporation, bylaws or other constituent documents of such Person, or
otherwise) on the ability of any Subsidiary of the Borrower to (i) pay dividends
or make any other distribution on any of such Subsidiary's capital stock,
partnership interests or other interests, as the case may be, owned by the
Borrower or any other Subsidiary of Borrower, (ii) make loans or advances to, or
guarantee any Indebtedness or any other obligation of, the Borrower or any other
Subsidiary of Borrower or (iii) transfer any of its Property to the Borrower or
any other Subsidiary of Borrower, except restrictions pursuant to (A) the Loan
Documents and (B) applicable law.
6.15 Miscellaneous Covenants.
(a) The Borrower shall not, nor shall it cause or permit any
of the Guarantors to, become or be a party to any contract or agreement which
materially impairs such party's ability to perform under this Agreement, or
under any other instrument, agreement or document to which the Borrower or such
Subsidiary is a party or by which it is or may be bound.
(b) The Borrower shall not, nor shall it cause or permit any
of the Guarantors to, carry or purchase any "margin security" within the meaning
of Regulations U, G, T or X of the Board of Governors of the Federal Reserve
System, 12 C.F.R., Chapter II except in accordance with such Regulations.
SECTION 7. FINANCIAL COVENANTS.
The Borrower shall comply with the following financial covenants (each
to be measured as of the end of each of the Borrower's fiscal quarters during
the applicable respective measurement periods:
7.1 Fixed Charge Coverage Ratio. The Borrower shall have and maintain a
Fixed Charge Coverage Ratio of not less than the following during the following
periods (measured on a rolling four quarter basis):
54
Period Minimum Ratio
------ -------------
From the Closing Date
through September 30, 1997 1.10 to 1
October 1, 1997 through
September 30, 1998 1.20 to 1
October 1, 1998 and at all
times thereafter 1.40 to 1
7.2 Minimum Consolidated Net Worth. The Borrower shall have and
maintain a minimum Consolidated Net Worth of not less than $150,000,000 for the
period from the Closing Date through December 31, 1997. For each subsequent
fiscal quarter thereafter, the Borrower shall maintain, at all times during such
fiscal quarter, minimum Consolidated Net Worth in an amount equal to at least
the preceding fiscal quarter's minimum Consolidated Net Worth requirement plus
an amount equal to fifty (50%) percent of the Borrower's year to date
Consolidated Net Income for such preceding fiscal quarter (with no adjustment
for losses).
7.3 Ratio of Consolidated Funded Debt to Consolidated Capitalization.
The Borrower shall have and maintain at all times from and after the Closing
Date a ratio of Consolidated Funded Debt to Consolidated Capitalization equal to
or less than .45 to 1.
7.4 Ratio of Consolidated EBITDA to Consolidated Interest Expense. The
Borrower shall have and maintain a ratio of Consolidated EBITDA to Consolidated
Interest Expense of not less than the following during the following periods
(measured on a rolling four quarter basis):
Period Minimum Ratio
------ -------------
From the Closing Date
through September 30, 1997 3.50 to 1
October 1, 1997 and at all
times thereafter 4.00 to 1
SECTION 8. DEFAULT
8.1 Events of Default. Each of the following events shall constitute an
event of default ("Event of Default"):
(a) Payments - if the Borrower fails to make any payment of
principal or interest under the Revolving Credit on its due date; or
(b) Other Charges - if the Borrower fails to pay any other
charges, fees, Expenses or other monetary obligations owing to any Lender or the
Administrative Agent or the Fronting Lender arising out of or incurred in
connection with this Agreement when such payment is due and payable and such
breach is not cured within five (5) days of the Borrower's receipt of notice
from the Administrative Agent of such breach; or
(c) Particular Covenant Defaults - if the Borrower fails to
perform or observe any covenant or undertaking contained in this Agreement,
(other than with respect to the covenants contained in Sections 5.7(b), 6.1
through 6.15 and Sections 7.1 through 7.4 inclusive, as to which no notice and
cure period shall be applicable), and such breach is not cured within fifteen
(15) days of the Borrower's receipt of notice thereof from the Administrative
55
Agent, or if such breach could not be cured by the Borrower due to circumstances
beyond the Borrower's control within such fifteen (15) day period, for such
longer period as may be necessary for the Borrower to cure such default (in no
event to exceed a total of thirty (30) days from any such notice) so long as the
Borrower is diligently taking all necessary steps to cure any such default(s);
or
(d) Financial Information - if any statement, report,
financial statement, or certificate made and delivered by the Borrower or any of
its officers, employees or agents, to the Administrative Agent or any Lender, is
not true and correct, in all material respects, when made (provided, however,
that an Event of Default shall not be deemed to have occurred hereunder because
interim financial statements are subject to normal and recurring year end
adjustments in the ordinary course); or
(e) Uninsured Loss - if there shall occur any uninsured damage
to or loss, theft, or destruction of any portion of any Property of the Borrower
or any of the Guarantors in excess of $20,000,000; or
(f) Warranties or Representations - if any warranty,
representation or other statement by or on behalf of the Borrower or any of the
Guarantors contained in or pursuant to this Agreement, or in any of the Loan
Documents or in any other existing or future agreement between the Borrower
and/or any of the Borrower's Subsidiaries, on the one hand, and the
Administrative Agent and/or any one or more of the Lenders, on the other hand,
is false, erroneous, or misleading in any material respect when made; or
(g) Agreements with Others - if the Borrower or any of the
Guarantors shall (i) default beyond any grace period under any agreement(s) with
any creditor(s) of the Borrower or any such Subsidiary or holder(s) of
Indebtedness from the Borrower or such Subsidiary which has an aggregate
outstanding principal balance of $1,000,000, if the effect of such default is to
cause or enable the holder(s) of such party's obligations to declare any such
obligation of such party to become due (whether or not actually accelerated)
prior to its maturity date or prior to its regularly scheduled date of payment
or (ii) fail to pay any Indebtedness at final maturity; or
(h) Other Agreements with Lenders - if the Borrower or any of
the Guarantors breaches or violates the terms of, or if a default (subject to
any cure periods contained therein) or an Event of Default occurs under any
other existing or future agreement (related or unrelated) between the Borrower
and/or any of the Borrower's Subsidiaries, on the one hand, and the
Administrative Agent and/or any/all Lenders, on the other hand; or
(i) Judgments - if any final, non-appealable judgment for the
payment of $5,000,000 or more or final, non-appealable judgments aggregating
$5,000,000 or more (not acknowledged, in writing, by the Borrower's or its
applicable Subsidiary's insurance company as unconditionally covered by
insurance or not stayed within five (5) days of entry) shall be rendered by a
court of competent jurisdiction against the Borrower or any of the Guarantors;
or
(j) Assignment for Benefit of Creditors, etc. - if the
Borrower or any of the Guarantors makes or proposes an assignment for the
benefit of creditors generally or offers a composition or extension to
creditors; or
(k) Bankruptcy, Dissolution, etc. - any action is taken for
the dissolution or liquidation of the Borrower or any of the Guarantors not
otherwise permitted hereunder, or if there shall be commenced any case or
proceeding for reorganization or liquidation of the Borrower's or any of
Subsidiary's debts under the Bankruptcy Code or any other state or federal law,
now or hereafter enacted for the relief of debtors, whether instituted by or
against such party, provided that as to any such action or proceeding commenced
56
against any Borrower or any of the Guarantors, such Borrower or Subsidiary shall
have forty-five (45) days to have such action or proceeding dismissed, it being
understood that prior to such dismissal, the Lenders and the Administrative
Agent shall not be obligated to make Advances to or for the benefit of the
Borrower; or
(l) Receiver - if there shall be appointed a receiver,
liquidator, custodian, trustee or similar official or fiduciary for (i) the
Borrower or any of the Guarantors, (ii) a substantial part of the Borrower's or
any of the Guarantors' Property or (iii) for such part of the Property of the
Borrower or a Guarantor, such control over which would give rise to a Material
Adverse Effect; or
(m) Execution Process, etc. - if there shall be issued any
execution or distraint process against the Borrower or any of the Guarantors, or
any Property of the Borrower or any Property of any Subsidiary of the Borrower,
which execution is not released, stayed or dismissed within fifteen (15) days of
its entry, it being understood that nothing herein shall in any way impair the
Administrative Agent's and the Lenders' rights to immediately effect an offset
against any asset of the Borrower or the Guarantors; or
(n) Termination of Business - if the Borrower or any of the
Guarantors cease any material portion of its respective business operations as
presently conducted unless, in the case of a Guarantor, such Guarantor
immediately merges into or consolidates with or is dissolved or liquidated into
the Borrower or another Guarantor; or
(o) Pension Benefits, etc. - if the Borrower or any of the
Guarantors fail to comply with ERISA so that grounds exist to permit the
appointment of a trustee under ERISA to administer the Borrower's or such
Subsidiary's employee plans or to allow the Pension Benefit Guaranty Corporation
to institute proceedings to appoint a trustee to administer such plan(s), or to
permit the entry of a Lien to secure any deficiency or claim; or
(p) Transfer of Stock - if the Borrower shall not be the owner
(directly or indirectly) of at least 100% of all of the issued and outstanding
voting stock of each of the Guarantors (or 80% in the case of Guarantors formed
in connection with Permitted Acquisitions) (except Rapidforms, Inc., as to which
it must own at least 85% of the issued and outstanding voting stock), provided,
however, that the foregoing shall not prohibit mergers, dissolutions or stock
dividends expressly permitted by Sections 6.1, 6.4 or 6.6(a)(i)(C) hereof; or
(q) Investigations - if evidence shall be received by the
Administrative Agent or any Lender that the Borrower or any of the Guarantors is
or has been engaged in any type of activity which, in the Administrative Agent's
reasonable judgment, could result in the forfeiture of Property of any of the
Guarantors or the Borrower to any Governmental Authority other than a forfeiture
under Environmental Laws or products liability law which would not give rise to
a Material Adverse Effect; or
(r) Guarantees - if any Guarantee ceases to be effective or
any Guarantor disclaims liability under such Guarantee or attempts to revoke or
otherwise terminate its respective Guarantee for any reason and to any extent,
except to the extent of a merger, consolidation or liquidation permitted
hereunder; or
(s) Change of Control - if there shall occur any Change of
Control.
57
8.2 Rights and Remedies on Default.
(a) Upon the occurrence of a Default or an Event of Default,
the Administrative Agent may, in its discretion, or shall, upon the direction of
the Majority Lenders, withhold or cease making Advances under the Revolving
Credit.
(b) In addition to all other rights, options and remedies
granted or available to the Administrative Agent under this Agreement or the
other Loan Documents (each of which is also then exercisable by the
Administrative Agent), the Administrative Agent may, in its discretion, or
shall, upon the direction of Majority Lenders, upon the occurrence and during
the continuance of an Event of Default, terminate the Revolving Credit,
accelerate the Obligations and exercise any rights and remedies available
hereunder or under any of the other Loan Documents, at law or in equity to
enforce the Lenders' and the Administrative Agent's rights and collect the
Obligations, all without demand, notice, presentment or protest or further
action of any kind (it also being understood that the occurrence of any of the
events or conditions set forth in subparagraphs (j), (k) or (l) of Section 8.1
above shall automatically cause an acceleration of the Obligations).
Nevertheless, if at any time within sixty (60) days after acceleration of the
Obligations, (i) the Borrower shall pay all accrued and unpaid interest and all
payments on account of the principal Obligations, which shall have become due
otherwise than by acceleration (with interest, to the extent permitted by law,
on overdue interest, at the Alternate Base Rate) and all other fees or Expenses
then owed hereunder and (ii) all Defaults and Events of Default (other than
non-payment of principal of and accrued interest on the Advances and the
Restated Revolving Credit Notes due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to Section 9.15, then the
Super Majority Lenders, by written notice to the Borrower, may (in their
absolute and sole discretion) rescind and annul the acceleration and its
consequences; but such action shall not affect any subsequent Default or Event
of Default or impair any right consequent thereto. The provisions of the
immediately preceding sentence are intended merely to bind the Lenders to a
decision that may be made at the election of the Lenders and are not intended in
any manner or under any circumstances whatsoever to benefit the Borrower or any
of the Guarantors and do not grant in any manner or under any circumstances
whatsoever the Borrower or any of the Guarantors the right to require the
Lenders to rescind or annul any acceleration hereunder, even if the conditions
set forth herein are met.
(c) Upon the occurrence and during the continuance of an Event
of Default and in addition to all other rights and remedies available to the
Administrative Agent, the Borrower shall, upon demand of the Administrative
Agent, be obligated to deliver and pledge to the Administrative Agent, on behalf
of all Lenders, cash collateral in the amount of all outstanding Letters of
Credit.
8.3 Nature of Remedies. All rights and remedies granted the
Administrative Agent and/or the Lenders hereunder and under any of the other
Loan Documents, or otherwise available at law or in equity, shall be deemed
concurrent and cumulative, and not alternative remedies, and the Administrative
Agent and/or the Lenders may proceed with any number of remedies at the same
time until all Obligations are satisfied in full. The exercise of any one right
or remedy shall not be deemed a waiver or release of any other right or remedy,
and the Administrative Agent, upon the occurrence of an Event of Default, may
proceed against the Borrower, at any time, under any agreement, document or
instrument, with any available remedy and in any order.
8.4 Set-Off. If any bank account of the Borrower with the
Administrative Agent, any Lender or any participant is attached or otherwise
liened or levied upon by any third party, the Administrative Agent and/or such
Lender (and/or any participant) need not await the running of any applicable
58
grace period hereunder, but the Administrative Agent and/or such Lender (and/or
such participant) as agent for the Lenders and the Administrative Agent shall
have and be deemed to have the immediate right of set-off and may apply the
funds or amount thus set-off against any of the Obligations. Any such funds
shall be held for the ratable benefit of all Lenders and shall be remitted to
the Administrative Agent for distribution to all Lenders in accordance with each
Lender's Pro Rata Percentage (subject to such sharing agreements as the
Administrative Agent may reasonably determine to effectuate the terms of this
Agreement).
SECTION 9. THE ADMINISTRATIVE AGENT.
9.1 Appointment and Authorization. Each Lender, and each subsequent
holder of any of the Restated Revolving Credit Notes by its acceptance thereof,
hereby irrevocably appoints and authorizes the Administrative Agent to take such
action on its behalf and to exercise such powers under this Agreement as are
delegated to the Administrative Agent by the terms hereof, together with such
powers as are reasonably incidental thereto. The Administrative Agent will
handle all transactions relating to the Revolving Credit and all other
Obligations, including without limitation, all transactions with respect to
Letters of Credit, this Agreement, and all of the other Loan Documents, in
accordance with its usual banking practices. The Borrower is hereby authorized
by the Lenders to deal solely with the Administrative Agent in all transactions
which affect the Lenders under this Agreement and the Loan Documents. The
rights, privileges and remedies accorded to the Administrative Agent hereunder
shall be exercised by the Administrative Agent on behalf of all of the Lenders.
9.2 General Immunity. In performing its duties as the Administrative
Agent hereunder, the Administrative Agent will take the same care as it takes in
connection with loans in which it alone is interested, using reasonable and
prudent banking practices. However, neither the Administrative Agent nor any of
its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them hereunder or in connection herewith
except as such actions or omissions are caused from its or their own gross
negligence or willful misconduct unless such action was taken or omitted to be
taken by the Administrative Agent at the direction of the Majority Lenders.
9.3 Consultation with Counsel. The Administrative Agent may consult
with legal counsel and other experts selected by it and shall not be liable for
any action taken or suffered in good faith by it in accordance with the advice
of such counsel.
9.4 Documents. The Administrative Agent shall not be under a duty to
examine into or pass upon the effectiveness, genuineness or validity of this
Agreement or any of the Restated Revolving Credit Notes or any of the other Loan
Documents, and the Administrative Agent shall be entitled to assume that the
same are valid, effective and genuine and what they purport to be. In addition,
the Administrative Agent shall not be liable for failing to make any inquiry
concerning the accuracy, performance or observance of any of the terms,
provisions or conditions of such instrument, document or agreement. The
Administrative Agent shall furnish to the Lenders copies of all notices and
other documents (including financial statements) received from the Borrower
hereunder.
9.5 Rights as a Lender. With respect to its Pro Rata Share of the
Revolving Credit, the Administrative Agent shall have the same rights and powers
hereunder as any other Lender and may exercise the same as though it were not
the Administrative Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Administrative Agent in its capacity as
a Lender. Subject to the provisions of this Agreement, the Administrative Agent
59
and any Lender may accept deposits from, lend money to and generally engage in
any kind of banking or trust business with the Borrower and its Affiliates and
Subsidiaries as if it were not the Administrative Agent.
9.6 Responsibility of the Administrative Agent. It is expressly
understood and agreed that the obligations of the Administrative Agent hereunder
are only those expressly set forth in this Agreement and that the Administrative
Agent shall be entitled to assume that no Event of Default, and no event that,
with notice, or lapse of time or both would, if unremedied, constitute an Event
of Default, has occurred and is continuing, unless the Administrative Agent has
actual knowledge of such fact. Except to the extent the Administrative Agent is
required by the Lenders pursuant to the express terms hereof to take a specific
action, the Administrative Agent shall be entitled to use its discretion with
respect to exercising or refraining from exercising any rights which may be
vested in it by, or with respect to taking or refraining from taking any action
or actions that it may be able to take under or in respect of, this Agreement
and the Loan Documents. The Administrative Agent shall incur no liability under
or in respect of this Agreement and the other Loan Documents by acting upon any
notice, consent, certificate, warranty or other paper or instrument believed by
it to be genuine or authentic or to be signed by the proper party or parties, or
with respect to anything that it may do or refrain from doing in the reasonable
exercise of its judgment, or that may seem to it to be necessary or desirable
under the circumstances. It is agreed among the Administrative Agent and the
Lenders that the Administrative Agent shall have no responsibility to carry out
audits or otherwise examine the books and records or properties of the Borrower
or any of the Borrower's Subsidiaries, except as the Administrative Agent in its
sole discretion deems appropriate or unless directed to do so by the Majority
Lenders. The relationship between the Administrative Agent and each Lender is
and shall be that of agent and principal only and nothing herein shall be
construed to constitute the Administrative Agent a joint venturer with any
Lender, a trustee or fiduciary ders or for the holder of a participation herein
nor impose on the Administrative Agent duties and obligations other than those
set forth herein. Nothing contained in this Section 9.6 is intended to relieve
the Administrative Agent from liability for its gross negligence or its willful
misconduct unless any act, omission or conduct of the Administrative Agent is or
has been directed by the Majority Lenders.
9.7 Collections and Disbursements.
(a) The Administrative Agent will have the right to collect
and receive all payments of the Obligations, and to collect and receive all
reimbursements for draws made under the Letters of Credit, together with all
fees, charges or other amounts due under this Agreement and the Loan Documents,
and the Administrative Agent will remit to each Lender, according to its Pro
Rata Percentage, all such payments actually received by the Administrative Agent
(subject to any required clearance procedures) on the same Business Day of
receipt thereof (provided such payments shall have been received by the
Administrative Agent prior to 1:00 p.m., Philadelphia time, on such Business
Day) otherwise on the next Business Day.
(b) If any such payment received by the Administrative Agent
is rescinded or otherwise required to be returned for any reason at any time,
whether before or after termination of this Agreement and the Loan Documents,
each Lender will, upon written notice from the Administrative Agent promptly pay
over to the Administrative Agent its Pro Rata Percentage of the amount so
rescinded or returned, together with interest and other fees thereon if also
required to be rescinded or returned.
(c) On the same Business Day on which notice is given to the
Lenders by the Administrative Agent (or on the next following Business Day if
such notice is not given by the Administrative Agent prior to 1:00 p.m.,
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Philadelphia time) with respect to any payment which has been made on account of
any Letter of Credit, which notice shall state the date and amount of such
payment, each Lender (other than the Fronting Lender) shall remit to the
Fronting Lender its Pro Rata Percentage of the payment in respect of such Letter
of Credit. The obligations of the Lenders hereunder are unconditional, not
subject to setoff and irrevocable and may not be terminated at any time.
(d) All payments by the Administrative Agent and the Lenders
to each other hereunder shall be in lawful money of the United States of America
and i all times maintain proper books of account and records reflecting the
interest of each Lender in the Revolving Credit and the Letters of Credit, in a
manner customary to the Administrative Agent's keeping of such records, which
books and records shall be available for inspection by each Lender at reasonable
times during normal business hours, at such Lender's sole expense. The
Administrative Agent may treat the payees of any Restated Revolving Credit Note
as the holder thereof until written notice of the transfer thereof shall have
been received by the Administrative Agent.
(e) Each Lender and each subsequent holder by acceptance of a
Restated Revolving Credit Note agree among themselves that (i) with respect to
all amounts received by them which are applicable to the payment of principal of
or interest on the Restated Revolving Credit Notes and amounts payable in
respect of any fees or commissions hereunder, equitable adjustment will be made
so that, in effect, all such amounts will be shared among the Lenders pro rata
based on their respective Pro Rata Share of the Obligations with respect to
which such payment was received, whether received by voluntary payment, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action or by the enforcement of any or all of the Restated Revolving Credit
Notes, (ii) if any of them shall exercise any right of counterclaim, setoff,
banker's lien or similar right with respect to amounts owed by the Borrower or
any Guarantor hereunder or under the Restated Revolving Credit Notes that Lender
or holder, as the case may be, shall apportion the amount recovered as a result
of the exercise of such right pro rata in accordance with each Lender's Pro Rata
Percentage, and (iii) if any of them shall thereby through the exercise of any
right of counterclaim, setoff, banker's lien or otherwise or as adequate
protection of a deposit treated as cash collateral under the Bankruptcy Code,
receivemount of principal and interest due with respect to the Restated
Revolving Credit Notes held by the Lender or holder, or any other amount payable
hereunder which is greater than the proportion received by any other holder of
the Restated Revolving Credit Notes in respect of the aggregate amount of
principal and interest due with respect to the Restated Revolving Credit Notes
held by it or any other amount payable hereunder that Lender or that holder of
the Restated Revolving Credit Notes receiving such proportionately greater
payments shall (y) notify each other Lender and the Administrative Agent of such
receipt and (z) purchase for cash, without recourse or warranty, participations
(which it shall be deemed to have done simultaneously upon the receipt of such
payment) in the Restated Revolving Credit Notes held by the other holders so
that all such recoveries of principal and interest with respect to the Restated
Revolving Credit Notes shall be proportionate to their respective Pro Rata
Percentages; provided, however, that if all or part of such proportionately
greater payment received by such purchasing holder is thereafter recovered from
such holder, those purchases shall be rescinded and the purchase prices paid for
such participations shall be returned to that holder to the extent of such
recovery, but without interest. The Borrower expressly consents to the foregoing
arrangement.
9.8 Indemnification. The Lenders severally and not jointly hereby each
indemnify the Administrative Agent ratably according to the respective amounts
of their Pro Rata Percentages, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
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on, incurred by or asserted against the Administrative Agent in any way relating
to or arising out of this Agreement, any other Loan Document or the Revolving
Credit or any action taken or omitted by the Administrative Agent under or
related to this Agreement, any other Loan Document or the Revolving Credit,
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct unless such action was taken or omitted to be
taken by the Administrative Agent at the direction of the Majority Lenders. The
Administrative Agent shall have the right to deduct, from any amounts to be paid
by the Administrative Agent to any Lender hereunder, any amounts owing to the
Administrative Agent by such Lender by virtue of this paragraph.
9.9 Expenses.
(a) All out-of-pocket costs and out-of-pocket expenses
incurred by the Administrative Agent for which the Borrower is responsible
hereunder and not reimbursed on demand by the Borrower, in connection with the
analysis, negotiation, preparation, consummation, amendment, administration,
refinancing, termination, work-out, forbearance and enforcement of the Loan
Documents, the Revolving Credit or the Obligations (including, without
limitation, reasonable counsel and expert fees and expenditures to enforce,
protect, preserve, analyze, negotiate and defend the Administrative Agent's and
each Lender's rights and interest under the Loan Documents) shall be shared and
paid on demand by the Lenders pro rata based on their respective Pro Rata
Percentages.
(b) The Administrative Agent may deduct from payments or
distributions to be made to the Lenders such funds as may be necessary to pay or
reimburse the Administrative Agent for such costs or expenses.
9.10 No Reliance. Each Lender has entered into this Agreement and the
Loan Documents solely upon its own independent investigation and is not relying
upon any information supplied by or any representations made by the
Administrative Agent. Each Lender shall continue to make its own analysis and
evaluation of the Borrower and the Guarantors. The Administrative Agent makes no
representation or warranty and assumes no responsibility with respect to the
financial condition, prospects or results of operations of the Borrower or any
of the Guarantors, any obligor or any account debtor of the Borrower; the
accuracy, sufficiency or currency of any information concerning the financial
condition, prospects or results of operations of the Borrower or any Subsidiary;
the sufficiency, authenticity, legal effect, validity or enforceability of the
Loan Documents; or with regard to any other matters, whether similar or
dissimilar. The Administrative Agent assumes no responsibility or liability with
respect to the collectibility of the Obligations or the performance by the
Borrower or any Subsidiary of any obligation under the Loan Documents.
9.11 Reporting. During the term of this Agreement, the Administrative
Agent will promptly furnish each Lender with copies of all financial statements
and reports with respect to the Borrower or any Guarantor actually received by
the Administrative Agent pursuant to Section 5 of this Agreement. The
Administrative Agent will promptly notify the Lenders when it receives actual
knowledge of any Event of Default under the Loan Documents.
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9.12 Removal of the Administrative Agent. The Administrative Agent may
resign at any time upon giving thirty (30) days prior written notice thereof to
the Lenders and the Borrower and the Administrative Agent may be removed as the
Administrative Agent at any time hereunder upon the written consent of the Super
Majority Lenders (exclusive of the Administrative Agent) upon the following: (i)
willful misconduct or gross negligence in the performance of the Administrative
Agent's duties or responsibilities under this Agreement; or (ii) if a receiver,
trustee or conservator is appointed for the Administrative Agent or any state or
federal regulatory authority assumes management or control of the Administrative
Agent or if, under applicable law, the administrative or discretionary duties
and responsibilities of the Administrative Agent hereunder become controlled by
or subject to the approval of any state or federal regulatory authority. Upon
any resignation or permitted removal of the Administrative Agent, the Lenders
(exclusive of the Administrative Agent) shall have the right to appoint a
successor to the Administrative Agent by majority vote of the Lenders (exclusive
of the Administrative Agent and based upon the percentages of the total Pro Rata
Shares of such other Lenders). Upon the acceptance of its appointment as a
successor to the Administrative Agent hereunder, by such successor to the
Administrative Agent, such successor to the Administrative Agent shall thereupon
succeed to and become vested with all rights, powers, obligations and duties of
the retiring Administrative Agent and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder.
9.13 Action on Instructions of Lenders. With respect to any provision
of this Agreement or any of the other Loan Documents, or any issue arising
hereunder or thereunder, concerning which the Administrative Agent is authorized
to act or withhold action by direction of the Lenders (or, if applicable, the
Majority Lenders), the Administrative Agent shall in all cases be fully
protected in so acting, or in so refraining from acting, hereunder or thereunder
in accordance with written instructions signed by the Lenders (or, if
applicable, the Majority Lenders). Such instructions and any action taken or
failure to act pursuant thereto shall be binding on all Lenders and on all
holders of the Restated Revolving Credit Notes.
9.14 Several Obligations. The obligations of each Lender hereunder and
under each of the other Loan Documents are several, and neither the
Administrative Agent nor any other Lender shall be responsible for the
obligations and commitments of any other Lender.
9.15 Amendments.
(a) Except as expressly provided herein, the Administrative
Agent shall have the sole and exclusive right to, service, administer and
monitor the Revolving Credit and the Loan Documents, including without
limitation, the right to exercise all rights, privileges and options under the
Loan Documents, including the credit judgment with respect to the making of
Advances and the determination as to the basis on which and the extent to which
Advances may be made.
(b) Notwithstanding anything to the contrary contained in
subparagraph (a) above, prior to an acceleration of the Obligations, the
Administrative Agent shall not, without the prior written consent of all
Lenders: (i) extend the Maturity Date or any payment date under the Restated
Revolving Credit Notes or under this Agreement, including without limitation,
any mandatory prepayment date under Section 2.11 hereof, (ii) decrease any
interest rate on the Revolving Credit (unless otherwise expressly provided for
herein) or any fee (except fees that are solely for the account of the Fronting
Lender) chargeable to the Borrower by the Lenders and/or the Administrative
Agent and/or the Fronting Lender hereunder or elsewhere, (iii) increase the
Facility Limit or the Pro Rata Share or Pro Rata Percentage of any of the
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Lenders except by permitted assignments (or unless otherwise expressly provided
for herein), (iv) release any obligor from the Obligations (including releasing
any Guarantor from its obligations under its respective Guarantee), except in
connection with termination of the Revolving Credit and full payment and
satisfaction of all Obligations (v) change the definition of Majority Lenders or
Super Majority Lenders, (vi) consent to the assignment or delegation by the
Borrower or any Guarantor of its obligations under any Loan Document, (vii)
designate any portion of the Available Commitment as being part of the Reserve
Amount or change the definition of Available Commitment or Reserve Amount,
(viii) change the definition of Outstandings; or (ix) modify this Subsection
9.15(b) or any of Sections 2.9(f), 2.10, 2.12, 8.4, 10.5, 10.10 or 10.15.
(c) Notwithstanding anything to the contrary contained in
subparagraph (a) above, prior to an acceleration of the Obligations, the
Administrative Agent shall notity Lenders: (i) enter into any written amendment
to any of the Loan Documents; (ii) waive the Borrower's compliance with the
terms and conditions of the Loan Documents or any Event of Default hereunder or
thereunder; or (iii) consent to the Borrower taking any action which, if taken,
would constitute an Event of Default under this Agreement or under any of the
Loan Documents.
(d) After an acceleration of the Obligations, the
Administrative Agent shall have the sole and exclusive right, after consultation
(to the extent reasonably practicable under the circumstances) with all Lenders,
to exercise or refrain from exercising any and all rights, remedies, privileges
and options under the Loan Documents or available at law or in equity, to
protect the rights of the Lenders and collect the Obligations, including without
limitation, instituting and pursuing all legal actions brought against the
Borrower or to collect the Obligations, or defending any and all actions brought
by the Borrower; incurring Expenses or otherwise making expenditures to protect
the Revolving Credit or the Lenders' rights or remedies; modifying the Revolving
Credit or the Loan Documents; and releasing or settling any amounts owing under
the Obligations. Notwithstanding this subsection (d), after an acceleration of
the Obligations, the Administrative Agent may not, without the prior written
consent of the Super Majority Lenders, enter into a written agreement with the
Borrower which provides that the Obligations are not immediately due and payable
or which provides that the Administrative Agent will forebear from exercising
its remedies hereunder, and may not without the prior written consent of all of
the Lenders (i) compromise or satisfy the Obligations for less than payment in
full; (ii) reduce any rate of interest charged to any outstanding Advance; or
(iii) release the Borrower or any of the Guarantors from its obligations
hereunder or under the Guarantees (as applicable).
SECTION 10. MISCELLANEOUS.
10.1 GOVERNING LAW. THIS AGREEMENT, AND ALL OF THE OTHER LOAN DOCUMENTS
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS THEREOF.
10.2 Integrated Agreement. This Agreement, the Restated Revolving
Credit Notes and the other Loan Documents shall be construed as integrated and
complementary of each other, and as augmenting and not restricting Lenders'
and/or the Administrative Agent's rights and remedies. If, after applying the
foregoing, an inconsistency still exists, the provisions of this Agreement shall
constitute an amendment to such inconsistent document and shall control.
10.3 Omission or Delay Not Waiver. No omission or delay by the
Administrative Agent or any Lender in exercising any right or power under this
Agreement or any of the other Loan Documents will impair such right or power or
be construed to be a waiver of any Default, or Event of Default or an
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acquiescence therein, and any single or partial exercise of any such right or
power will not preclude other or further exercise thereof or the exercise of any
other right, and as to the Borrower, no waiver will be valid unless in writing
and signed by the Administrative Agent and then only to the extent specified.
10.4 Time. Unless otherwise expressly set forth herein, whenever the
Borrower shall be required to make any payment or perform any act on a day which
is not a Business Day, such payment may be made, or such act may be performed,
on the next succeeding Business Day. Time is of the essence in the Borrower's,
the Administrative Agent's and each Lender's performance under all provisions
of this Agreement and all Loan Documents.
10.5 Expenses of the Administrative Agent, the Syndication Agent and
Lenders. At Closing and from time to time thereafter, the Borrower will pay
promptly upon demand of the Administrative Agent all reasonable out-of-pocket
costs, fees and expenses (a) of the Administrative Agent in connection with (i)
the analysis, negotiation, preparation, execution, administration and delivery
of this Agreement and the other Loan Documents and the documents and instruments
referred to herein and therein and any amendment, amendment and restatement,
supplement, waiver or consent relating hereto or thereto, whether or not any
such amendment, amendment and restatement, supplement, waiver or consent is
executed or becomes effective (including, without limitation, search costs, the
reasonable fees, expenses and disbursements of counsel for the Administrative
Agent, and reasonable charges of any expert consultant to the Administrative
Agent) and (ii) the syndication of the commitments and (b) each of the Agents
and each of the Lenders in connection with the enforcement of any Obligations
of, or the collection of any payments owing from, the Borrower or any of the
Borrower's Subsidiaries under this Agreement and/or the other Loan Documents to
which they are a party, or protection or defense of the rights of the Lenders
and/or the Agents under the Loan Documents, following the occurrence of any
Event of Default or in connection with any refinancing or restructuring of the
credit arrangements provided under this Agreement and the other Loan Documents
in the nature of a "work-out" or of any insolvency or bankruptcy proceedings, or
otherwise (including the reasonable fees and disbursements of counsel for each
of the Agents and each of Lenders and reasonable allocated costs of internal
counsel) (collectively, the "Expenses");
10.6 Brokerage. Except as otherwise provided herein, this transaction
was brought about and entered into by the Agents, the Lenders and the Borrower
acting as principals and without any brokers, agents or finders being the
effective procuring cause hereof. The Borrower, the Administrative Agent, the
Syndication Agent and each Lender each represents that it has not committed any
party hereunder to the payment of any brokerage fee, commission or charge in
connection with this transaction. If any such claim is made on the Borrower,
Administrative Agent, the Syndication Agent or any Lender by any broker, finder
or agent or other Person (unless such broker, finder, agent or other similar
Person is engaged by the effected party), the party or parties ("Responsible
Party") which committed the affected party to the payment of such fees hereby
agrees to indemnify, defend and save the affected party or parties harmless
against such claim and further will defend, with counsel satisfactory to the
affected party or parties, any action or actions to recover on such claim, at
the sole cost and expense of the Responsible Party, including such affected
party's counsel fees and costs. The Borrower further agrees that, if it is the
Responsible Party, until any such claim or demand is adjudicated in the affected
party's favor, the amount demanded shall be deemed a liability of the Borrower
under this Agreement.
10.7 Notices.
(a) Any notices or consents required or permitted by this
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Agreement shall be in writing and shall be deemed given if delivered in person
or if sent by telecopy or by nationally recognized overnight courier, as
follows, unless such address is changed by written notice hereunder:
If to the Administrative Agent to:
CoreStates Bank, N.A., the Administrative Agent
2240 Butler Pike
Plymouth Meeting, PA 19462
Attention: Karl F. Schultz,
Vice President
Telecopy No: 610-834-2069
With copies to: Blank Rome Comisky & McCauley
1200 Four Penn Center Plaza
Philadelphia, PA 19103
Attention: Harvey I. Forman, Esquire
Telecopy No: 215-569-5555
If to the Borrower or any Guarantor to:
CSS Industries, Inc.
1845 Walnut Street, Suite 800
Philadelphia, PA 19102
Attention: James G. Baxter
Telecopy No.: 215-569-9979
With copies to: Stephen V. Dubin, Esquire
CSS Industries, Inc.
1845 Walnut Street, Suite 800
Philadelphia, PA 19102
Telecopy No: 215-569-9979
Morgan, Lewis & Bockius, L.L.P.
2000 One Logan Square
Philadelphia, PA 19103
Attention: David King, Esquire
Telecopy No. (215) 963-5299
If to Lenders: to the addresses set forth on Annex I to
this Agreement
(b) Any notice sent by the Administrative Agent, any Lender or
the Borrower by any of the above methods shall be deemed to be given when so
received. Any notice sent by overnight carrier shall be presumed to have been
received the day after it was sent, if by hand delivery by 5:00 p.m.
Philadelphia, PA time on the day sent, and if by facsimile, no such presumption
shall be raised.
(c) The Administrative Agent shall be fully entitled to rely
upon any facsimile transmission or other writing purported to be sent by any
Authorized Officer (whether requesting an Advance or otherwise) as being genuine
and authorized.
10.8 Headings. The headings of any paragraph or Section of this
Agreement are for convenience only and shall not be used to interpret any
provision of this Agreement.
10.9 Survival. All warranties, representations, and covenants made by
the Borrower herein, or in any agreement referred to herein or on any
certificate, document or other instrument delivered by it or on its behalf under
this Agreement or any of the other Loan Documents, shall be considered to have
been relied upon by the Administrative Agent and the Lenders, and shall survive
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the delivery to the Lenders of the Restated Revolving Credit Notes, regardless
of any investigation made by the Lenders or on their behalf. All statements in
any such certificate or other instrument prepared and/or delivered for the
benefit of the Administrative Agent and any/all Lenders shall constitute
warranties and representations by the Borrower hereunder. Except as otherwise
expressly provided herein, all covenants made by the Borrower hereunder or under
any other agreement or instrument shall be deemed continuing until all
Obligations are satisfied in full and the Revolving Credit is terminated.
10.10 Successors and Assigns.
(a) This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties. Neither the
Borrower nor any Guarantor may transfer, assign or delegate any of its duties or
obligations hereunder.
(b) (i) Notwithstanding any other provision of this Agreement,
each Lender may assign all or any part of, or any interest in, such Lender's
rights and benefits hereunder, under the Restated Revolving Credit Notes and
under the other Loan Documents, as well as all Obligations related to such
assigned rights and interest, provided that each such assignment:
(A) must (unless the assignment is to an
Affiliate of the assigning Lender) be approved by the Borrower (such approval
not to be unreasonably withheld or delayed); provided, however, that if a
Default or Event of Default has occurred hereunder, the approval of the Borrower
shall not be required,
(B) shall, if not an assignment of the
entire commitment of the applicable Lender, be in a minimum amount of
$10,000,000,
(C) must be evidenced by an Assignment
Agreement in the form of Exhibit "10.10" attached hereto and made a part hereof,
a true and correct copy of which shall be delivered to the Administrative Agent,
(D) shall be accompanied by the
unconditional payment by the assigning Lender to the Administrative Agent of an
assignment fee equal to $3,500 except if the assignment is made to an Affiliate
of the assigning Lender or to another Lender, and
(E)shall be effective upon the
Administrative Agent's receipt of written notice from the assignor and assignee
Lenders of such assignment and compliance with subparagraphs (A), (B), (C) and
(D) above.
(ii) Each Lender may at any time enter into
participation agreements with one or more participating lenders whereby such
Lender may allocate certain percets or the Revolving Credit. No participant
(unless and only to the extent such participant is itself a Lender) shall be
entitled to require the Lender from whom its participation interest was
obtained, to take or refrain from taking any action under this Agreement or any
other Loan Document, except that such Lender may agree with such participant
that such Lender will not, without such participant's consent, agree to any
modification, amendment or waiver of this Agreement described in Section
9.15(b)(i)-(viii). Notwithstanding the foregoing, any such participant shall be
considered to be a "Lender" for purposes of Sections 2.2(f), 2.9, 2.10, 2.12,
8.4, 10.5 and 10.15 with respect to its participation; provided, however, that
no participant shall be entitled to receive any greater amount pursuant to
Sections 2.2(f), 2.9, 2.10 or 2.12 than the transferor Lender would have been
entitled to receive in respect of the participation effected by such transferor
Lender had no participation occurred. The Borrower acknowledges that, for the
convenience of all parties, this Agreement is being entered into with the
Lenders only and that its obligations under this Agreement are, to the extent
expressly provided for in this Section 10.10(b)(ii), undertaken for the benefit
of, and as an inducement to, any such participating lenders as well as the
Lenders. Any grant of participation by any Lender shall not discharge, reduce or
otherwise affect said Lender's obligation, in accordance with its Pro Rata
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Percentage, under this Agreement to fund Advances, which obligations shall
remain primary and absolute. Such grants of participations shall not affect or
diminish the rights of the granting Lender to reimbursement or other payments
which may become due to said Lender under this Agreement and such reimbursements
and other payments will be calculated as if said Lender had not granted any such
participation. Except as provided for herein, no participant shall have, by
virtue of any participation, any rthis Agreement or claims of any kind against
the Administrative Agent or any Lender or the Borrower other than the Lender
from whom the participation has been obtained.
(c) Nothing in this Section 10.10 shall prevent or prohibit any Lender
from pledging its Advances hereunder to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank.
(d) Subject to the provisions of Section 10.24 hereof, the Borrower on
its own behalf and on behalf of each of its Subsidiaries authorizes each Lender
to disclose to any participant or assignee (each, a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the Borrower or any of its Subsidiaries which has been delivered to
such Lender by the Borrower or any such Subsidiary in connection with such
Lender's credit evaluation of the Borrower and its Subsidiaries. In addition,
subject to Section 10.24 hereof, each of the Agents may furnish any information
concerning the Borrower or any of its Subsidiaries in such Agent's possession to
any Affiliate of such Agent. The Borrower shall and shall cause each of its
Subsidiaries to assist any Lender in effectuating any assignment or
participation pursuant to this Section 10.10 (including during syndication) in
whatever manner such Lender reasonably deems necessary, including the
participation in meetings with prospective Transferee.
10.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original and, all of which, taken
together, shall constitute one fully executed document.
10.12 Modification. No modification hereof or any agreement referred to
herein shall be binding or enforceable unless in writing and signed by the
Borrower, the Administrative Agent and the Lenders required by Section 9.15
hereof.
10.13 Signatories. Each individual signatory hereto represents and
warrants that he is duly authorized to execute this Agreement on behalf of his
principal and that he executes the Agreement in such capacity and not as a
party.
10.14 Third Parties. No rights are intended to be created hereunder or
under any of the other Loan Documents for the benefit of any third party donee,
creditor or incidental beneficiary of the Borrower. Nothing contained in this
Agreement shall be construed as a delegation to the Administrative Agent or any
Lender of the Borrower's duty of performance, including, without limitation, the
Borrower's duties under any account or contract with any other Person.
10.15 Indemnification. (a) The Borrower agrees to indemnify each of the
Lenders, the Syndication Agent and the Administrative Agent and their respective
officers, directors, employees, representatives, agents, attorneys-in-fact and
Affiliates and each other Person, if any, controlling any of them or any of
their Affiliates within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act (each, an "Indemnitee" and collectively, the
"Indemnities") from, and hold each of them harmless against, any and all Losses
resulting from, arising out of, in any way related to or by reason of, (i) the
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execution, delivery, performance, administration or enforcement of any Loan
Document, (ii) the Lenders' or the Administrative Agent's agreement to make the
Advances, (iii) the use or intended use of the proceeds of any Advances
hereunder (iv) the consummation of any other transactions contemplated in any
Loan Document, (v) the performance by the Administrative Agent or the
Syndication Agent of their duties hereunder or (vi) any inaccuracy in any
material respect, or any untrue statement or alleged untrue statement of any
material fact, made in any report, exhibit, schedule or publication in
connection with the transactions contemplated hereby furnished to the
Administrative Agent, the Syndication Agent or the Lenders by or on behalf of
the Borrower, or by reason of the omission or the alleged omission therefrom of
a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, whether or not such
Indemnitee is a party and whether or not such Proceeding is initiated or brought
by or on behalf of the Borrower; provided, however, that the Borrower shall not
be liable under the foregoing indemnification provision to an Indemnitee to the
extent that any such Loss is judicially determined by a court of competent
jurisdiction in a final non-appealable judgment to have resulted solely by
reason of the gross negligence or bad faith of such Indemnitee. To the extent
that the undertaking to indemnify and hold harmless set forth in this Section
10.15 is unenforceable because it is violative of any law or public policy or
otherwise, the Borrower shall contribute the maximum portion that it is
permitted to pay and satisfy under applicable law to the payment and
satisfaction of all indemnified liabilities incurred by any of the Indemnities.
(b) The Borrower agrees on its own behalf and on behalf of the
Guarantors that no Indemnitee shall have any liability (whether direct or
indirect, in contract or tort or otherwise) for any Losses to the Borrower or
any of the Guarantors or any such entities' security holders or creditors
resulting from, arising out of, in any way related to or by reason of (i) the
execution, delivery, performance, administration or enforcement of any Loan
Document, (ii) the Lenders' or the Administrative Agent's agreement to make the
Advances, (iii) the use or intended use of the proceeds of any Advances
hereunder or (iv) the consummation of any other transactions contemplated in any
Loan Document, except to the extent that any Losses judicially determined by a
court of competent jurisdiction in a final non-appealable judgment to have
resulted solely by reason of the gross negligence or bad faith of such
Indemnitee.
(c) Each Indemnitee shall give prompt notice to the Borrower
of any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify the Borrower shall not relieve it from any
liability which it may otherwise have hereunder. The Borrower may participate at
its own expense in the defense of such action.
(d) In the event that any Indemnitee is requested or required
to appear as a witness in any Proceeding brought by or on behalf of or against
the Borrower or any Affiliate of the Borrower in which such Indemnitee is not
named as a defendant, the Borrower agrees to reimburse each Indemnitee for all
reasonable expenses incurred by each Indemnitee in connection with such
Indemnitee's appearing and preparing to appear as such a witness, including,
without limitation, the reasonable fees and disbursements of each Indemnitee's
legal counsel, and to compensate such Indemnitee in an amount to be mutually
agreed upon.
(e) The Borrower agrees on its own behalf and on behalf of
each of the Guarantors that, without the prior written consent of the
Administrative Agent and the Majority Lenders, no such entity will settle,
compromise or consent to the entry of any judgment in any pending or threatened
Proceeding in respect of which indemnification could be sought under the
69
indemnification provisions of this Section 10.15 (whether or not any Indemnitee
is an actual or potential party to such Proceeding), unless such settlement,
compromise or consent includes an unconditional written release in form, scope
and substance satisfactory to the Administrative Agent and the Majority Lenders,
of each Indemnitee from all liability arising out of such Proceeding and does
not include any statement as to an admission of fault, culpability or failure to
act by or on behalf of any Indemnitee.
10.16 Discharge of Taxes, The Borrower's Obligations, Etc. The
Administrative Agent, in its sole discretion, shall have the right at any time,
and from time to time, on one day's notice to Borrower (unless the
Administrative Agent deems immediate action to be necessary under the
circumstances), if the Borrower fails to do so, to: (a) pay for the performance
of any of the Borrower's obligations hereunder, and (b) discharge taxes or
Liens, at any time levied or placed on any of the Borrower's Property in
violation of this Agreement unless the Borrower or such Subsidiary or any of the
Borrower's Subsidiaries is in good faith with due diligence by appropriate
proceedings contesting such taxes or Liens and maintaining proper reserves
therefor in accordance with GAAP. Such expenses and advances shall be added to
the Revolving Credit and shall bear interest at the Alternative Base Rate until
reimbursed to the Administrative Agent. Such payments and advances made by the
Administrative Agent shall not be construed as a waiver by the Administrative
Agent or the Lenders of an Event of Default under this Agreement.
10.17 Withholding and Other Tax Liabilities. The Administrative Agent,
in its sole discretion and without any duty to exercise such rights or monitor
such obligation of the Borrower, shall have the right to withhold or direct the
Lenders to withhold any Advances from time to time unless the Borrower shall, at
the Administrative Agent's request, have given to the Administrative Agent
evidence, reasonably satisfactory to the Administrative Agent, that the Borrower
has properly deposited or paid, as required by law, all withholding taxes and
all federal, state, city, county or other taxes due up to and including the date
of the requested Advance. Copies of deposit slips showing payment shall likewise
constitute satisfactory evidence for such purpose. In the event that any Lien,
assessment or tax liability against the Borrower or any of the Borrower's
Subsidiaries shall arise in favor of any taxing authority, whether or not notice
thereof shall be filed or recorded as may be required by law, the Administrative
Agent shall have the right, on one day's notice to Borrower (unless the
Administrative Agent deems immediate action to be necessary under the
circumstances) (but shall not be obligated, nor shall the Administrative Agent
or any Lender hereby assume the duty) to pay any such Lien, assessment or tax
liability by virtue of which such charge shall have arisen; provided, however,
that the Administrative Agent shall not pay any such tax, assessment or Lien
before its due date or if the amount, applicability or validity thereof is being
contested in good faith and by appropriate proceedings by the Borrower or such
Subsidiary. In order to pay any such Lien, assessment or tax liability, the
Administrative Agent shall not be obliged to wait until said Lien, assessment or
tax liability is filed before taking such action as hereinabove set forth. Any
sum or sums which the Administrative Agent (shared ratably by the Lenders) shall
have paid for the discharge of any such Lien shall be added to the Revolving
Credit and shall be paid by the Borrower to the Administrative Agent with
interest thereon, upon demand, and the Administrative Agent shall be subrogated
to all rights of such taxing authority against the Borrower or such Subsidiary.
70
10.18 Consent to Jurisdiction; Venue.
(a) Any Proceeding with respect to this Agreement
or any other Loan Document may be brought in the courts of the State of New York
or of the United States District Court for the Southern District of New York,
and, by execution and delivery of this Agreement, the Borrower, on its own
behalf and on behalf of each of the Guarantors, hereby irrevocably accepts for
itself and in respect of its Property, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts, and irrevocably agrees to be
bound by any judgment rendered thereby in connection with this Agreement or any
other Loan Documents. The Borrower, on its own behalf and on behalf of each of
the Guarantors further irrevocably consents to the service of process out of any
of the aforementioned courts in any such Proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to the Borrower or
such Subsidiary at its address for notices pursuant to Section 10.7, such
service to become effective five (5) days after such mailing. The Borrower on
its own behalf and on behalf of the Guarantors designates and appoints CT
Corporation System, 1633 Broadway, New York, New York 10019 and such other
Persons as may hereafter be selected by the Borrower irrevocably agreeing in
writing to serve, as the agent of the Borrower or such Subsidiary to receive, on
such Persons behalf, service of all process in any proceedings in any such
court, such service being hereby acknowledged by the Borrower, on its own behalf
and on behalf of the Guarantors, to be effective and binding service in every
respect. A copy of such process so served shall be mailed by registered mail to
the Borrower or such Subsidiary so served at its address provided in Section
10.7 except that unless otherwise provided by applicable law, any failure to
mail such copy shall not affect the validity of service of process. If any agent
appointed by the Borrower refuses to receive and forward such service, the
Borrower hereby agrees, on its own behalf and on behalf of each of the
Guarantors, that service upon it by mail shall constitute sufficient notice.
Nothing herein shall affect the right of the Administrative Agent, the
Syndication Agent or any Lender to serve process in any other manner permitted
by law or to commence proceeding or otherinst the Borrower or any of the
Guarantors in any other jurisdiction.
(b) The Borrower on its own behalf and on behalf of the
Guarantors hereby irrevocably waives any objection which it may now or hereafter
have to the laying of venue of any of the aforesaid proceedings arising out of
or in connection with this Agreement or any other Loan Document brought in the
courts referred to in clause (a) above and hereby further irrevocably waives and
agrees not to plead or claim in any such court that any such proceeding brought
in any such court has been brought in an inconvenient forum.
10.19 Waivers.
(a) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction, including
without limitation, contract, claims, tort claims, breach of duty claims, and
all other common law and statutory claims. Each party hereto acknowledges that
this waiver is a material inducement to enter into a business relationship, that
each has already relied on the waiver in entering into this Agreement, and that
each will continue to rely on the waiver in their related future dealings. Each
party hereto further warrants and represents that each has reviewed this waiver
with its legal counsel, and that each knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel. THIS WAIVER IS
71
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, REPLACEMENTS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR TO
ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE ADVANCES. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
(b) (i) The Borrower, on behalf of itself and each of the
Guarantors, waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover any special, exemplary, punitive or consequential
damages from any of the Agents or Lenders in any Proceeding in connection with,
arising out of, or in any way related to the transactions contemplated herein or
in any other Loan Document.
(ii) pecial, exemplary, punitive or consequential
damages from the Borrower or any of the Guarantors in any Proceeding in
connection with, arising out of, or in any way related to the transactions
contemplated herein or in any other Loan Document to the extent the foregoing is
not in derogation of either of the Agents or any of the Lender's rights to claim
or recover any amounts under Sections 2.2(g), 2.9, 2.10, 2.12, 10.5, 10.6, 10.15
or for any other Obligations expressly provided for in this Agreement or any of
the other Loan Documents.
(c) The Borrower, on its own behalf and on behalf of the
Guarantors, hereby waives promptness, diligence, notice of acceptance and any
other notice with respect to any of the Obligations and any requirement that any
Lender protect, secure, perfect or insure any Lien or any property subject
thereto or exhaust any right to take any action against any other obligor or any
other Person or any collateral or other direct or indirect security for any of
the Obligations.
10.20 Severability. Each provision of this Agreement shall be severable
from every other provision of this Agreement. If any provision is determined to
be invalid or unenforceable, such determination shall not affect or limit the
validity or enforceability of all other provisions.
10.21 Independence of Representations, Warranties and Covenants. The
representations, warranties and covenants contained herein shall be independent
of each other and no exception to any representation, warranty or covenant shall
be deemed to be an exception to any other representation, warranty or covenant
contained herein unless expressly provided, nor shall any such exception be
deemed to permit any action or omission that would be in contravention of
applicable law.
10.22 Obligations Several; Independent Nature of Lenders' Rights. The
obligation of each Lender hereunder is several, no Lender shall be responsible
for the obligation or commitment of any other Lender hereunder, and neither of
the Agents shall be responsible for any obligations of any Lender. Nothing
contained in this Agreement and no action taken by the Lenders pursuant hereto
shall be deemed to constitute the Lenders to be a partnership, an association, a
joint venture or any other kind of entity. The amounts payable at any time
hereunder to each Lender shall be a separate and independent debt, and each
Lender shall be entitled to protect and enforce its rights arising out of this
Agreement, and it shall not be necessary for any other Lender to be joined as an
additional party in any Proceeding for such purpose.
10.23 Prior Understandings. This Agreement and the other Loan Documents
supersede all prior and contemporaneous understandings and agreements, whether
written or oral, among the parties hereto relating to the transactions provided
for herein and therein, except that the following shall continue to remain in
effect: (a) the letter (the "Commitment Letter") agreement dated October 13,
1995 among Merrill Lynch, CoreStates and the Borrower (other than (A) the Term
Sheet (as defined in the Commitment Letter) and (B) the commitments of Merrill
Lynch and CoreStates thereunder) and (b) the Fee Letter (as defined in the
Commitment Letter).
72
10.24 Confidentiality. The Agents and each Lender agree to keep
confidential all material non-public information provided to it by or on behalf
of the Borrower and/or the Guarantors pursuant to this Agreement or the other
Loan Documents that is designated by the provider of such information in writing
as confidential; provided that nothing herein shall prevent either Agent or any
Lender from disclosing any such information (a) to either Agent or any other
Lender, (b) to any assignee, proposed assignee, participant or proposed
participant which agrees to comply with the provisions of this subsection, (c)
to its Affiliates, employees, directors, agents, attorneys, accountants and
other professional advisors, (d) upon the request or demand of any Governmental
Authority having jurisdiction over such Person, (e) in response to any order of
any court or other Governmental Authority or as may otherwise be required
pursuant to any requirement of applicable law, (f) which has been publicly
disclosed other than in breach of this Agreement, or (g) in connection with the
exercise of any remedy or other enforcement of the rights of the Agents and/or
the Lenders hereunder.
IN WITNESS WHEREOF, the undersigned parties have executed this
Agreement the day and year first above written.
CSS INDUSTRIES, INC., a
Delaware corporation
By: _______________________________
Title:
Attest:_______________________
CORESTATES BANK, N.A., as the
Administrative Agent
By: _________________________________
Title:
(Signatures continued on Pages S1 - S15 attached hereto)
73
IN WITNESS WHEREOF, the undersigned has executed this Agreement the day
and year first above written.
MERRILL LYNCH & CO., as the
Syndication Agent
By: ___________________________________
Title:
S-1
IN WITNESS WHEREOF, the undersigned has executed this Agreement the day
and year first above written.
CORESTATES BANK, N.A.
as a Lender
By: ___________________________
Name:
Title:
S-2
IN WITNESS WHEREOF, the undersigned has executed this Agreement the day
and year first above written.
PNC BANK, National Association
as a Lender and a Co-Agent
By: ___________________________
Name:
Title:
S-3
IN WITNESS WHEREOF, the undersigned has executed this Agreement the day
and year first above written.
SUMMIT BANK (formerly
known as United Jersey Bank)
as a Lender
By: ___________________________
Name:
Title:
S-4
IN WITNESS WHEREOF, the undersigned has executed this Agreement the day
and year first above written.
THE BANK OF NEW YORK
as a Lender
(formerly, known as
First Fidelity Bank, N.A.)
as a Lender and a Co-Agent
By: ___________________________
Name:
Title:
S-5
IN WITNESS WHEREOF, the undersigned has executed this Agreement the day
and year first above written.
MELLON BANK, N.A.,
as a Lender and a Co-Agent
By: ___________________________
Name:
Title:
S-6
IN WITNESS WHEREOF, the undersigned has executed this Agreement the day
and year first above written.
NATIONAL CITY BANK,
as a Lender and a Co-Agent
By: ___________________________
Name:
Title:
S-7
IN WITNESS WHEREOF, the undersigned has executed this Agreement the day
and year first above written.
FIRST AMERICAN NATIONAL BANK,
as a Lender
By: ___________________________
GENOSSENSCHAFTSBANK,
as a Lender
By: ___________________________
Name:
Title:
S-8
IN WITNESS WHEREOF, the undersigned has executed this Agreement the day
and year first above written.
CAISSE NATIONALE DE CREDIT
AGRICOLE,
as a Lender
By: ___________________________
Name:
Title:
S-9
IN WITNESS WHEREOF, the undersigned has executed this Agreement the day
and year first above written.
ARAB BANKING CORPORATION,
as a Lender
By: ___________________________
Name:
Title:
S-10
IN WITNESS WHEREOF, the undersigned has executed this Agreement the day
and year first above written.
MERRILL LYNCH CAPITAL
CORPORATION,
as a Lender
By: ___________________________
Name:
Title:
S-11
IN WITNESS WHEREOF, the undersigned has executed this Agreement the day
and year first above written.
SUNTRUST BANK, ATLANTA
as a Lender
By: ___________________________
Name:
Title:
By: ___________________________
Name:
Title:
S-12
EXHIBIT AND SCHEDULE LIST
Annex I -- Lenders, Pro Rata Shares, Pro
Rata Percentages
Exhibit 1.1(a) -- Form of Guarantee
Exhibit 1.1(b) -- Term Sheet for Unsecured Senior
Notes
Exhibit 2.1(c)(i) -- Form of Restated Revolving
Credit Note
Exhibit 2.1(c)(ii)-- Form of Restated Swing Line Note
Exhibit 2.2(a) -- Form of Letter of Credit
Agreements
Exhibit 2.4(b) -- Form of Notice of Borrowing
Exhibit 5.8 -- Form of Quarterly Compliance
Certificate
Exhibit 6.2 -- Form of Certificate regarding
Permitted Acquisitions
Exhibit 10.10 -- Form of Assignment Agreement
Schedule 1.1(c) -- Financial Statements
Schedule 2.2(a) -- Outstanding Letters of Credit
Issued by CoreStates
Schedule 3.1(h) -- Material Environmental
Investigations, Studies,
Audits, Etc.
Schedule 4.2 -- Places of Business
Schedule 4.3 -- Judgments, Proceedings,
Litigation and Orders
Schedule 4.4 -- Existing Liens and Claims
Schedule 4.9 -- Subsidiaries and Affiliates and
Jurisdictions of Incorporation
Schedule 4.10 -- Existing Guarantees, Investments
and Borrowings
Schedule 4.11(c) -- ERISA Matters
Schedule 4.12 -- Business Interruptions
Schedule 4.13(a) -- Schedule of Names
Schedule 4.13(b) -- Trademarks, Patents and
Copyrights
Schedule 4.14 -- Other Associations
Schedule 4.15 -- Environmental Matters
Schedule 4.17 -- Capital Stock
S-13
ANNEX I
Lenders Pro Rata Percentage Pro Rata Share
- ------- ------------------- --------------
CoreStates Bank, N.A 12.5% $37,500,000
2240 Butler Pike
Plymouth Meeting, PA 19462
Attention: Karl F. Schultz, VP
Fax: 610/834-2069
PNC Bank, National Association 10.833 1/3% $32,500,000
1600 Market Street
Philadelphia, PA 19103
Attention: Forrest Patterson, VP
Fax: 215/585-6987
First Union National Bank 10.833 1/3% $32,500,000
123 South Broad Street
Philadelphia, PA 19109
Attention: Mary Ashenbrenner, VP
Fax: 215/985-8764
Mellon Bank, N.A 10.833 1/3% $32,500,000
8 West Market Street
Wilkes Barre, PA 18711
Attention: W. Frank McGrane, VP
Fax: 717/826-2978
Merrill Lynch Capital Corporation 3.333 1/3% $10,000,000
World Financial Center
North Tower
New York, NY 19281-1307
Attention: Stephen B. Paras, VP
Fax: 212/449-8230
National City Bank 6.666 2/3% $20,000,000
Corporate Banking
National City Center
20 Stanwix Street
Pittsburgh, PA 15222-4802
Attention: Richard D. Barnes, VP
Fax: 412/644-6224
S-14
First American National Bank 6.666 2/3% $20,000,000
327 Union Street
Nashville, TN 37237-0314
Attention: Andrew Zimberg, VP
Fax: 615/748-6072
Summit Bank 5.0% $15,000,000
Three Valley Square
512 Township Line, Suite 280
Blue Bell, PA 19422
Attention: Christopher Annas, VP
Fax: 215/619-4820
DG Bank Deutsche Genossenschaftsbank 5.0% $15,000,000
609 Fifth Avenue, 8th Floor
New York, NY 10017
Attention: Norah McCann, SVP
Fax: 212/745-1556
Caisse Nationale De Credit Agricole 6.666 2/3% $20,000,000
520 Madison Avenue
New York, NY 10022
Attention: Michael Fought, AVP
Fax: 212/418-2228
Arab Banking Corp. 5.0% $15,000,000
277 Park Avenue, 32nd Floor
New York, NY 10172-3922
Attention: Louise Bilbro, VP
Fax: 212/583-0921
SunTrust Bank, Atlanta 5.0% $15,000,000
711 Fifth Avenue, 16th Floor
New York, NY 10022
Attention: Maria Mamilovich, VP
Fax: 212/583-2602
Fleet Bank, N.A. 6.666 2/3% $20,000,000
3670 U.S. Highway 9 South
Freehold, NJ 07728
Attention: Tom Savage, VP
Fax: 732/780-0754
The Bank of New York 5.0% $15,000,000
One Wall Street
New York, NY 10286
Attention: Walter Parelli, VP
Fax: 212/635-6999
S-15
Swing Line Lender Swing Line Commitment
- ----------------- ---------------------
CoreStates Bank, N.A. $10,000,000
===========
S-16