Exhibit 1.1
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CREDIT AND GUARANTY AGREEMENT
Dated as of August 22, 1997
among
AMERICAN ECO FUNDING CORP.,
as Borrower
AMERICAN ECO CORPORATION,
as Parent Guarantor
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS LENDERS
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS ISSUING BANKS
and
UNION BANK OF CALIFORNIA, N.A.
as Agent
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS.............................. 1
1.1 Certain Defined Terms....................................... 1
1.2 Computation of Time Periods................................. 38
1.3 Accounting Terms............................................ 38
1.4 Other Terms................................................. 38
ARTICLE II
AMOUNTS AND TERMS OF LOANS....................... 39
2.1 Term Loans.................................................. 39
2.2 Revolving Credit Facility................................... 40
2.3 Acquisition Facility........................................ 43
2.4 Authorized Officers and Agents.............................. 46
2.5 Use of Proceeds of Loans.................................... 47
2.6 Guaranty of Parent Guarantor................................ 47
ARTICLE III
LETTERS OF CREDIT........................... 48
3.1 Letters of Credit........................................... 48
3.2 [Reserved].................................................. 54
3.3 Obligations Several......................................... 54
ARTICLE IV
PAYMENTS AND PREPAYMENTS........................ 55
4.1 Prepayments; Reductions in Commitments...................... 55
4.2 Payments.................................................... 58
4.3 Promise to Repay; Evidence of Indebtedness.................. 62
4.4 [Reserved]. ............................................... 63
4.5 Cash Collateral Account..................................... 63
ARTICLE V
INTEREST AND FEES........................... 65
5.1 Interest on the Loans and other Obligations................. 65
5.2 Special Provisions Governing Eurodollar Rate
Loans....................................................... 67
5.3 Fees........................................................ 69
ARTICLE VI
CONDITIONS PRECEDENT.............................. 72
6.1 Conditions Precedent to the Initial Loans and
Letters of Credit........................................... 72
6.2 Conditions Precedent to Initial Acquisition
Facility Loans, Increase of Maximum Revolving
Credit Amount and Increase of Maximum Letter
of Credit Obligations....................................... 75
6.3 Conditions Precedent to all Acquisition
Facility Loans.............................................. 77
6.4 Conditions Precedent to All Loans and Letters
of Credit................................................... 77
ARTICLE VII
REPRESENTATIONS AND WARRANTIES......................... 79
7.1 Representations and Warranties of the Parent
Guarantor................................................... 79
7.2 Representations and Warranties of the Borrower.............. 92
ARTICLE VIII
REPORTING COVENANTS.............................. 96
8.1 Financial Statements........................................ 96
8.2 [Reserved].................................................. 99
8.3 Events of Default........................................... 99
8.4 Lawsuits.................................................... 99
8.5 Insurance...................................................100
8.6 ERISA Notices...............................................100
8.7 Environmental Notices.......................................102
8.8 Labor Matters...............................................103
8.9 Senior Subordinated Notes...................................103
8.10 Other Reports...............................................104
8.11 Other Information...........................................104
ARTICLE IX
AFFIRMATIVE COVENANTS.............................105
9.1 Corporate Existence, Etc....................................105
9.2 Corporate Powers; Conduct of Business.......................105
9.3 Compliance with Laws, Etc...................................105
9.4 Payment of Taxes and Claims; Tax Consolidation..............105
9.5 Insurance...................................................106
9.6 Inspection of Property; Books and Records;
Discussions.................................................106
9.7 Required Hedge Agreements...................................107
9.8 Insurance and Condemnation Proceeds.........................108
9.9 ERISA Compliance............................................109
9.10 Foreign Employee Benefit Plan Compliance....................109
9.11 Cash Management System......................................109
9.12 Maintenance of Property.....................................110
9.13 Condemnation................................................110
9.14 Liens on Real Property......................................110
9.15 Consignee/Bailee Letters; Filings...........................111
9.16 Newly Acquired Subsidiaries; Execution of
Guaranty; Pledge of Capital Stock...........................111
9.17 Interest in Industra Service Corporation....................111
9.18 Certain Motor Vehicles......................................112
9.19 Further Assurances..........................................112
ARTICLE X
NEGATIVE COVENANTS...........................113
10.1 Indebtedness................................................113
10.2 Sales of Assets.............................................114
10.3 Liens.......................................................116
10.4 Investments.................................................116
10.5 Accommodation Obligations...................................117
10.6 Restricted Junior Payments..................................118
10.7 Conduct of Business.........................................119
10.8 Transactions with Shareholders and Affiliates...............119
10.9 Restriction on Fundamental Changes..........................119
10.10 Sales and Leasebacks........................................119
10.11 Margin Regulations; Securities Laws.........................120
10.12 ERISA.......................................................120
10.13 Issuance of Equity Securities...............................121
10.14 Organizational Documents; Senior Subordinated
Note Documents..............................................121
10.15 [Reserved]..................................................121
10.16 Fiscal Year.................................................121
ARTICLE XI
FINANCIAL COVENANTS..............................123
11.1 Leverage Ratio..............................................123
11.2 Senior Leverage Ratio.......................................123
11.3 Debt-to-Capitalization Ratio................................123
11.4 Senior Debt-to-Capitalization Ratio.........................124
11.5 Interest Coverage Ratio.....................................124
11.6 Fixed Charge Coverage Ratio.................................124
11.7 Capital Expenditures........................................125
11.8 Financial Covenant Calculations.............................125
ARTICLE XII
EVENTS OF DEFAULT; RIGHTS AND REMEDIES.....................126
12.1 Events of Default...........................................126
12.2 Rights and Remedies.........................................129
12.3 Post-Default Withdrawals from the Cash
Collateral Account..........................................131
ARTICLE XIII
THE AGENT...................................132
13.1 Appointment.................................................132
13.2 Nature of Duties............................................132
13.3 Rights, Exculpation, Etc....................................133
13.4 Reliance....................................................134
13.5 Indemnification.............................................134
13.6 Union Bank Individually.....................................134
13.7 Successor Agents............................................135
13.8 Relations Among Lenders.....................................135
ARTICLE XIV
YIELD PROTECTION............................139
14.1 Taxes.......................................................139
14.2 Increased Capital...........................................141
14.3 Changes; Legal Restrictions.................................142
14.4 Illegality..................................................143
14.5 Compensation................................................143
14.6 Judgment Currency...........................................144
ARTICLE XV
MISCELLANEOUS.................................146
15.1 Assignments and Participations..............................146
15.2 Expenses....................................................148
15.3 Indemnity...................................................149
15.4 Change in Accounting Principles.............................151
15.5 Setoff......................................................151
15.6 Ratable Sharing.............................................152
15.7 Amendments and Waivers......................................152
15.8 Notices.....................................................155
15.9 Survival of Warranties and Agreements.......................155
15.10 Failure or Indulgence Not Waiver; Remedies
Cumulative..................................................155
15.11 Marshalling; Payments Set Aside.............................155
15.12 Severability................................................156
15.13 Headings....................................................156
15.14 Governing Law...............................................156
15.15 Limitation of Liability.....................................156
15.16 Successors and Assigns......................................156
15.17 Certain Consents and Waivers of the Borrower
and the Parent Guarantor....................................156
15.18 Counterparts; Effectiveness; Inconsistencies................158
15.19 Limitation on Agreements....................................158
15.20 Confidentiality.............................................158
15.21 Entire Agreement............................................159
EXHIBITS
Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Notice of Borrowing
Exhibit D-1 Form of Revolving Note
Exhibit D-2 Form of Term Note
Exhibit D-3 Form of Acquisition Facility Note
Exhibit E-1 Form of Borrower Security Agreement
Exhibit E-2 Form of Parent Guarantor Security Agreement
Exhibit F-1 Form of Parent Guarantor Stock Pledge Agreement
Exhibit F-2 Form of Subsidiary Stock Pledge Agreement
Exhibit G Parent Guaranty Provisions
Exhibit H Form of Limited Guaranty
Exhibit I Form of Unlimited Guaranty
Exhibit J Form of Guarantor Mortgage
Exhibit K Pro Forma Financial Statements
Exhibit L Projections
Exhibit M List of Closing Documents
Exhibit N Form of Officer's Certificate to Accompany Reports
Exhibit O Form of Letter to Accountants
Exhibit P Form of Consignee/Bailee Letters
Exhibit Q Canadian Security Documents
SCHEDULES
Schedule 1.1.1 Permitted Equity Securities Options
Schedule 1.1.2 Permitted Existing Accommodation
Obligations
Schedule 1.1.3 Permitted Existing Investments
Schedule 1.1.4 Permitted Existing Liens
Schedule 1.1.5 Refinanced Indebtedness
Schedule 7.1-A Organizational Documents
Schedule 7.1-C Organizational Structure
Schedule 7.1-E Governmental Consents
Schedule 7.1-J Permitted Existing Indebtedness
Schedule 7.1-K Pending Actions
Schedule 7.1-L Compensation Matters
Schedule 7.1-S Environmental Matters
Schedule 7.1-T ERISA Matters
Schedule 7.1-V Labor Contracts
Schedule 7.1-Y Patent, Trademark & Permit Claims Pending
Schedule 7.1-AA Insurance Policies
Schedule 9.14 Specified Real Property
Schedule 10.10 Permitted Sale/Leaseback Transactions
CREDIT AND GUARANTY AGREEMENT
This Credit and Guaranty Agreement dated as of August 22,
1997 (as amended, supplemented or modified from time to time, the
"Agreement") is entered into among American Eco Funding Corp., a
corporation organized under the laws of the State of Delaware (the
"Borrower"), American Eco Corporation, a corporation organized under
the laws of the Province of Ontario (the "Parent Guarantor") and the
owner of 100% of the issued and outstanding shares of the Borrower,
the institutions from time to time a party hereto as Lenders, whether
by execution of this Agreement or an Assignment and Acceptance, the
institutions from time to time a party hereto as Issuing Banks,
whether by execution of this Agreement or an Assignment and
Acceptance, and Union Bank of California, N.A. ("Union Bank"), in its
capacity as agent for the Lenders and the Issuing Banks hereunder (in
such capacity, the "Agent").
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. The following terms used in this
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Agreement shall have the following meanings, applicable both to the
singular and the plural forms of the terms defined:
"Accommodation Obligation" means any Contractual Obligation,
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contingent or otherwise, of one Person with respect to any
Indebtedness, obligation or liability of another, if the primary
purpose or intent thereof by the Person incurring the Accommodation
Obligation is to provide assurance to the obligee of such
Indebtedness, obligation or liability of another that such
Indebtedness, obligation or liability will be paid or discharged, or
that any agreements relating thereto will be complied with, or that
the holders thereof will be protected (in whole or in part) against
loss in respect thereof including, without limitation, direct and
indirect guarantees, endorsements (except for collection or deposit in
the ordinary course of business), notes co-made or discounted,
recourse agreements, take-or-pay agreements, keep-well agreements,
agreements to purchase or repurchase such Indebtedness, obligation or
liability or any security therefor or to provide funds for the payment
or discharge thereof, agreements to maintain solvency, assets, level
of income, or other financial condition, and agreements to make
payment other than for value received. The amount of any Accommodation
Obligation shall be equal to the amount of the Indebtedness,
obligation or liability so guaranteed or otherwise supported;
provided, that (i) if the liability of the Person extending such
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guaranty or support is limited with respect thereto to an amount less
than the Indebtedness, obligation or liability guaranteed or
supported, or is limited to recourse against a particular asset or
assets of such Person, the amount of the corresponding Accommodation
Obligation shall be limited (in the case of a guaranty or other
support limited by amount) to such lesser amount or (in the case of a
guaranty or other support limited by recourse to a particular asset or
assets) to the higher of the Fair Market Value of such asset or assets
at the date for determination of the amount of the Accommodation
Obligation or the value at which such asset or assets would, in con-
formity with GAAP, be reflected on or valued for the purposes of
preparing a consolidated balance sheet of such Person as at such
determination date; and (ii) if any obligation or liability is
guaranteed or otherwise supported jointly and severally by a Person
and others, then the amount of the obligation or liability of such
Person with respect to such guaranty or other support to be included
in the amount of such Person's Accommodation Obligation shall be the
whole principal amount so guaranteed or otherwise supported.
"Acquisition Facility Availability" means, at any particular
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time during the Acquisition Facility Revolving Period, the amount by
which the Maximum Acquisition Facility Amount at such time exceeds the
Acquisition Facility Obligations at such time.
"Acquisition Facility Closing Date" means the date on which
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all conditions precedent set forth in Sections 6.2 and 6.4 have been
simultaneously fulfilled or waived.
"Acquisition Facility Commitment" means, with respect to any
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Lender, the obligation of such Lender to make Acquisition Facility
Loans pursuant to the terms and conditions of this Agreement, in an
amount equal to the amount set forth under such Lender's name under
the heading "Acquisition Facility Commitment" on the signature pages
hereof or the signature page of the Assignment and Acceptance by which
it became a Lender, as modified from time to time pursuant to the
terms of this Agreement or to give effect to any applicable Assignment
and Acceptance, and "Acquisition Facility Commitments" means the
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aggregate principal amount of the Acquisition Facility Commitments of
all the Lenders, the maximum amount of which shall be $50,000,000, as
reduced from time to time pursuant to Section 2.3(f)(i) and Section
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4.1.
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"Acquisition Facility Loan" is defined in Section 2.3(e).
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"Acquisition Facility Notes" means promissory notes executed
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by the Borrower and delivered to the Lenders evidencing the
Acquisition Facility Loans, as the same may be amended, supplemented,
modified or restated from time to time, and any promissory note issued
in substitution therefor, substantially in the form attached hereto as
EXHIBIT D-3; and "Acquisition Facility Note" means any one of the
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Acquisition Facility Notes.
"Acquisition Facility Obligations" means, at any particular
--------------------------------
time, the outstanding principal amount of the Acquisition Facility
Loans at such time, together with interest accrued thereon.
"Acquisition Facility Period" means the period commencing on
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the Acquisition Facility Closing Date and ending on the date on which
all of the Acquisition Facility Loans and all Obligations relating
thereto have been indefeasibly repaid in full.
"Acquisition Facility Revolving Loan" is defined in Section
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2.3(e).
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"Acquisition Facility Revolving Termination Date" means the
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earlier of (i) the second anniversary of the Acquisition Facility
Closing Date and (ii) the date of acceleration of the Obligations or
termination of the Acquisition Facility Commitments pursuant to
Section 12.2.
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"Acquisition Facility Term Loan" is defined in Section
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2.3(e).
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"Acquisition Facility Termination Date" means the earliest
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of (i) the sixth anniversary of the Acquisition Facility Closing Date,
(ii) the date of the payment in full of all Obligations in respect of
the Acquisition Facility Term Loans, and (iii) the date of
acceleration of the Obligations or termination of the Acquisition
Facility Commitments pursuant to Section 12.2.
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"Affiliate", as applied to any Person, means any other
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Person that directly or indirectly controls, is controlled by, or is
under common control with, that Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling", "controlled by" and "under common control with"), as
applied to any Person, means the possession, directly or indirectly,
of the power to vote ten percent (10.0%) or more of the Securities
having voting power for the election of directors of such Person or
otherwise to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting
Securities or by contract or otherwise.
"Agent" means Union Bank and each successor agent appointed
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pursuant to the terms of Article XIII of this Agreement.
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"Agreement" is defined in the preamble hereto.
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"Applicable Lending Office" means, with respect to a
-------------------------
particular Lender, its Eurodollar Lending Office in respect of
provisions relating to Eurodollar Rate Loans and its Domestic Lending
Office in respect of provisions relating to Reference Rate Loans.
"Assignment and Acceptance" means an Assignment and
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Acceptance in substantially the form of EXHIBIT A attached hereto and
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made a part hereof (with blanks appropriately completed) delivered to
the Agent in connection with an assignment of a Lender's interest
under this Agreement in accordance with the provisions of Section 15.1.
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"Bankruptcy Code" means Title 11 of the United States Code
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(11 U.S.C. ss.ss. 101 et seq.), as amended from time to time, and any
successor statute.
"Base Eurodollar Rate" means, with respect to any Euro-
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dollar Interest Period applicable to a Borrowing of Eurodollar Rate
Loans, an interest rate per annum determined by the Agent to be the
average (rounded upward to the nearest whole multiple of one sixteenth
of one percent (0.0625%) per annum if such average is not such a
multiple) of the rates per annum at which deposits in Dollars are
offered to Union Bank's Eurodollar Lending Office by prime banks in
the London interbank market at approximately 11:00 a.m. (London time)
on the Eurodollar Interest Rate Determination Date for such Eurodollar
Interest Period for a period equal to such Eurodollar Interest Period
and in an amount substantially equal to the amount of the Eurodollar
Rate Loan to be outstanding for such Eurodollar Interest Period.
"Benefit Plan" means a defined benefit plan as defined in
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Section 3(35) of ERISA (other than a Multiemployer Plan or Foreign
Employee Benefit Plan) in respect of which the Parent Guarantor or any
ERISA Affiliate is, or within the immediately preceding six (6) years
was, an "employer" as defined in Section 3(5) of ERISA.
"Borrower" is defined in the preamble of this Agreement.
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"Borrower Security Agreement" means the Borrower Security
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Agreement of even date herewith between the Borrower and the Agent,
substantially in the form of EXHIBIT E-1.
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"Borrowing" means a borrowing consisting of Loans of the
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same type made, continued or converted on the same day.
"Business Activity Report" means (A) a Notice of Business
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Activities Report from the State of New Jersey Division of Taxation or
(B) a Minnesota Business Activity Report from the Minnesota Department
of Revenue.
"Business Day" means a day, in the applicable local time,
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which is not a Saturday or Sunday or a legal holiday and on which
banks are not required or permitted by law or other governmental
action to close (i) in Los Angeles, California or Houston, Texas and
(ii) in the case of Eurodollar Rate Loans, in London, England and
(iii) in the case of Letter of Credit transactions for a particular
Issuing Bank, in the place where its office for issuance or
administration of the pertinent Letter of Credit is located.
"Canadian Employee Benefit Plan" means any benefit program
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relating to current and former Canadian employees of the Parent
Guarantor or any Subsidiaries, including without limitation, profit
sharing, deferred compensation, incentive, severance, change of
control, phantom stock, stock option, stock purchase, bonus, health or
insurance plans, programmes, and arrangements (in each case, oral or
written).
"Canadian GAAP" means, at any time, accounting principles
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generally accepted in Canada as recommended in the Handbook of the
Canadian Institute of Chartered Accountants at the relevant time
applied on a consistent basis (except for changes made with the prior
written consent of the Agent and approved by the Parent Guarantor's
independent auditors in accordance with promulgations of the Canadian
Institute of Chartered Accountants).
"Canadian Pension Plan" means any pension and retirement
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plan relating to current and former Canadian employees of the Parent
Guarantor or any Subsidiaries, whether registered or unregistered,
funded or unfunded and written or oral.
"Canadian Security Documents" means each of the documents
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listed and attached in substantial form in EXHIBIT Q.
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"Capital Expenditures" means, for any period, the aggregate
--------------------
of all expenditures (whether payable in cash or other Property or
accrued as a liability (but without duplication)) during such period
that, in conformity with GAAP, are required to be included in or
reflected by the Parent Guarantor's or any of its Subsidiaries' fixed
asset accounts as reflected in any of their respective balance sheets;
provided, however, (i) Capital Expenditures shall include, whether or
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not such a designation would be in conformity with GAAP, (A) that
portion of Capital Leases (other than leases of real property) which
is capitalized on the consolidated balance sheet of the Parent
Guarantor and its Subsidiaries and (B) expenditures for Equipment
which is purchased simultaneously with the trade-in of existing
Equipment owned by the Parent Guarantor or any of its Subsidiaries, to
the extent the gross purchase price of the purchased Equipment exceeds
the book value of the Equipment being traded in at such time; and (ii)
Capital Expenditures shall exclude, whether or not such a designation
would be in conformity with GAAP, expenditures made in connection with
the replacement or restoration of Property, to the extent reimbursed
or financed from insurance or condemnation proceeds not constituting
Net Cash Proceeds of Sale.
"Capital Lease" means any lease of any property (whether
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real, personal or mixed) by a Person as lessee which, in conformity
with GAAP, is accounted for as a capital lease on the balance sheet of
that Person.
"Capital Stock" means, with respect to any Person, any
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capital stock of such Person, regardless of class or designation, and
all warrants, options, purchase rights, conversion or exchange rights,
voting rights, calls or claims of any character with respect thereto.
"Cash Collateral" means cash or Cash Equivalents held by the
---------------
Agent, any of the Issuing Banks or any of the Lenders as security for
the Obligations.
"Cash Collateral Account" means an interest bearing account
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at Union Bank's offices in Los Angeles, California designated by the
Agent into which Cash Collateral shall be deposited. The Cash
Collateral Account shall be under the sole dominion and control of the
Agent, provided that all amounts deposited therein shall be held by
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the Agent for the benefit of the Secured Parties and shall be subject
to the terms of Section 12.3.
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"Cash Equivalents" means (i) marketable direct obligations
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issued or unconditionally guaranteed by the United States government
and backed by the full faith and credit of the United States
government or the government of Canada; (ii) United States domestic
and Eurodollar certificates of deposit and time deposits, bankers'
acceptances and floating rate certificates of deposit issued by any
commercial bank organized under the laws of the United States, any
state thereof, the District of Columbia, any foreign bank, or its
branches or agencies (fully protected against currency fluctuations),
which, at the time of acquisition, are rated A-1 (or better) by
Standard & Poor's Corporation or P-1 (or better) by Moody's Investors
Services, Inc.; and (iii) certificates of deposit having maturities of
not more than one year issued or guaranteed by a Canadian chartered
bank and rated R-1 low (or the then equivalent grade) or better by
Dominion Bond Rating Service; provided, that (x) the maturities of
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such Cash Equivalents shall not exceed one year and (y) such Cash
Equivalents shall be maintained in investment and other accounts of
the Agent at Union Bank.
"Cash Flow Period" means the Fiscal Year of the Parent
----------------
Guarantor ending on November 30, 1998 and, as separate periods, each
Fiscal Year of the Parent Guarantor thereafter.
"Cash Interest Expense" means, for any period, consolidated
---------------------
interest expense of the Parent Guarantor and its Subsidiaries, whether
paid or accrued, but without duplication (including the interest
component of Capital Leases but net of the difference between payments
received by the Parent Guarantor on all Hedge Agreements and payments
made by the Borrower on all Hedge Agreements other than the initial
payments made to enter into such Hedge Agreements), which is payable
in cash, all as determined in conformity with GAAP.
"CERCLA" means the Comprehensive Environmental Response,
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Compensation and Liability Act of 1980, 42 U.S.C. ss.ss. 9601 et seq.,
any amendments thereto, any successor statutes, and any regulations
promulgated thereunder.
"Change of Control" means any transaction or series of
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transactions (including, without limitation, a tender offer, merger or
consolidation) the result of which is that (a) any "person" or "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Securities
Exchange Act) becomes the "beneficial owner" (as defined in Rule
13(d)(3) under the Securities Exchange Act) of more than thirty
percent (30%) of the total aggregate Voting Power, calculated on a
fully diluted basis or (b) during any period of two (2) consecutive
calendar years, individuals who at the beginning of such period
constituted the Parent Guarantor's Board of Directors (together with
any new directors whose election by the Parent Guarantor's Board of
Directors or whose nomination for election by the Parent Guarantor's
stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were 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 directors then in office.
"Claim" means any claim or demand, by any Person, of
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whatsoever kind or nature for any alleged Liabilities and Costs,
whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute, Permit, ordinance or regulation,
common law, equity or otherwise.
"Closing Date" means the date on which all conditions
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precedent set forth in Sections 6.1 and 6.4 have been simultaneously
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fulfilled or waived.
"Collateral" means all Property and interests in Property
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now owned or hereafter acquired by the Parent Guarantor or any of its
Subsidiaries upon which a Lien is granted under any of the Loan
Documents.
"Commercial Letter of Credit" means any documentary letter
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of credit issued by an Issuing Bank pursuant to Section 3.1 for the
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account of the Borrower or for the account of the Parent Guarantor or
any of its Subsidiaries if the Borrower is jointly and severally
liable for reimbursement of amounts drawn under such letter of credit,
which is drawable upon presentation of documents evidencing the sale
or shipment of goods purchased by the Borrower, the Parent Guarantor
or such Subsidiary in the ordinary course of its business.
"Commission" means the Securities and Exchange Commission
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and any Person succeeding to the functions thereof.
"Commitment" means, with respect to any Lender at the time
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of determination thereof, the aggregate amount of such Lender's (a)
Revolving Credit Commitment and (b)(i) during the Term Loan Period,
Term Loan Commitment or (ii) during the Acquisition Facility Period,
Acquisition Facility Commitment; and "Commitments" means the aggregate
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amount of all (x) Revolving Credit Commitments and (y)(i) during the
Term Loan Period, Term Loan Commitments or (ii) during the Acquisition
Facility Period, Acquisition Facility Commitments.
"Commitment Letter" means that certain commitment letter
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dated July 30, 1997, addressed to the Parent Guarantor from Union Bank
and accepted by the Parent Guarantor on August 4, 1997.
"Compliance Certificate" is defined in Section 8.1(d).
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"Contaminant" means any waste, material, pollutant,
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contaminant, hazardous substance, toxic substance, hazardous waste,
special waste, designated waste, petroleum or petroleum- derived
substance or waste, radioactive materials, asbestos (in any form or
condition), polychlorinated biphenyls (PCBs), deleterious substance,
contaminant or source of contaminant, or any constituent of any such
material, substance or waste, refined in, identified in, or regulated
in any manner by, an Environmental Health or Safety Requirement of
Law.
"Contractual Obligation", as applied to any Person, means
----------------------
any provision of any Securities issued by that Person or any
indenture, mortgage, deed of trust, security agreement, pledge
agreement, guaranty, contract, undertaking, agreement or instrument to
which that Person is a party or by which it or any of its properties
is bound, or to which it or any of its properties is subject.
"Cure Loans" is defined in Section 4.2(b)(v)(C).
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"Customary Permitted Liens" means
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(i) Liens (other than Environmental Liens and Liens in favor
of the PBGC) with respect to the payment of taxes, assessments or
governmental charges in all cases which are not yet due or which
are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with GAAP;
(ii) statutory Liens of landlords and Liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen and
other Liens imposed by law created in the ordinary course of
business for amounts not yet due or which are being contested in
good faith by appropriate proceedings and with respect to which
adequate reserves or other appropriate provisions are being
maintained in accordance with GAAP;
(iii) Liens (other than any Lien in favor of the PBGC)
incurred or deposits made in the ordinary course of business in
connection with worker's compensation, unemployment insurance or
other types of social security benefits or to secure the
performance of bids, tenders, sales, contracts (other than for
the repayment of borrowed money), surety, appeal and performance
bonds; provided that (A) all such Liens do not in the aggregate
--------
materially detract from the value of the Parent Guarantor's or
any of its Subsidiaries' assets or Property or materially impair
the use thereof in the operation of their respective businesses,
and (B) all Liens of attachment or judgment and Liens securing
bonds to stay judgments or in connection with appeals do not
secure at any time an aggregate amount exceeding $100,000; and
(iv) Liens arising with respect to zoning restrictions,
easements, licenses, reservations, covenants, rights-of-way,
utility easements, building restrictions and other similar
charges or encumbrances on the use of Real Property which do not
interfere with the ordinary conduct of the business of the Parent
Guarantor or any of its Subsidiaries.
"Debt-to-Capitalization Ratio" means, as of any date, the
----------------------------
ratio of (a) consolidated Funded Debt of the Parent Guarantor and its
Subsidiaries as of that date to (b) the sum of consolidated Funded
Debt and consolidated shareholders' equity of the Parent Guarantor and
its Subsidiaries as of that date.
"Designated Prepayment" means each mandatory prepayment
---------------------
required by clauses (i), (ii), and (iii) of Section 4.1(b).
----------- ---- ----- --------------
"DOL" means the United States Department of Labor and any
---
Person succeeding to the functions thereof.
"Dollars" and "$" mean the lawful money of the United
------- -
States.
"Domestic Lending Office" means, with respect to any Lender,
-----------------------
such Lender's office, located in the United States, specified as the
"Domestic Lending Office" under its name on the signature pages hereof
or on the Assignment and Acceptance by which it became a Lender or
such other United States office of such Lender as it may from time to
time specify by written notice to the Borrower and the Agent.
"EBITDA" means, for any period, the amount calculated,
------
without duplication, for such period as (i) Net Income, plus (ii)
----
depreciation and amortization expense and other non-cash expenses,
plus (iii) Cash Interest Expense, plus (iv) federal, state, and local
- ---- ----
income taxes deducted from Net Income in accordance with GAAP, plus
----
(v) extraordinary losses (and any unusual losses arising in or outside
of the ordinary course of business of the Parent Guarantor and its
Subsidiaries not included in extraordinary losses determined in
accordance with GAAP) which have been included in the determination of
Net Income minus extraordinary gains, including, without limitation,
-----
any unusual gains arising in or outside of the ordinary course of
business of the Parent Guarantor and its Subsidiaries not included in
extraordinary gains determined in accordance with GAAP which have been
included in the determination of Net Income.
"Eligible Assignee" means (i) a Lender or any Affiliate
-----------------
thereof; (ii) a commercial bank having total assets in excess of
$2,500,000,000; (iii) the central bank of any country which is a
member of the Organization for Economic Cooperation and Development;
or (iv) a finance company, insurance company, other financial
institution or fund, acceptable to the Agent, which is regularly
engaged in making, purchasing or investing in loans and having total
assets in excess of $300,000,000.
"Environmental, Health or Safety Requirements of Law" means
---------------------------------------------------
all Requirements of Law derived from or relating to any federal,
state, provincial or local law, ordinance, rule, regulation, Permit,
license, order, judgment or other binding determination of or
agreement with any Governmental Authority relating to, imposing
liability or standards concerning, or otherwise addressing, natural
resources, the indoor or outdoor environment and/or the protection
thereof, public, worker or animal health and/or safety, including, but
not limited to the Clean Air Act, the Clean Water Act, CERCLA, RCRA,
any so-called "Superfund" or "Superlien" law, the Toxic Substances
Control Act and OSHA, and public health or welfare codes, each as from
time to time in effect.
"Environmental Lien" means a Lien in favor of any
------------------
Governmental Authority for any (i) liabilities under any
Environmental, Health or Safety Requirement of Law, or (ii) damages
arising from, or costs incurred by such Governmental Authority in
response to, a Release or threatened Release of a Contaminant into the
environment.
"Environmental Property Transfer Acts" means any applicable
------------------------------------
Requirement of Law that conditions, restricts, prohibits or requires
any remedial or responsive action or notification or disclosure
triggered by the transfer, sale, lease or closure of any Property or
deed or title for any Property for environmental reasons, including,
but not limited to, any so-called "Industrial Site Recovery Acts" or
"Responsible Property Transfer Acts".
"Equipment" means, with respect to any Person, all of such
---------
Person's present and future owned or leased (i) equipment, including,
without limitation, machinery, manufacturing, distribution, selling,
data processing and office equipment, assembly systems, tools, molds,
dies, fixtures, appliances, furniture, furnishings, vehicles, vessels,
aircraft, aircraft engines, and trade fixtures, (ii) other tangible
personal Property (other than such Person's Inventory), and (iii) any
and all accessions, parts and appurtenances attached to any of the
foregoing or used in connection therewith, and any substitutions
therefor and replacements, products and proceeds thereof.
"ERISA" means the Employee Retirement Income Security Act of
-----
1974, 29 U.S.C. ss.ss. 1000 et seq., any amendments thereto, any
successor statutes, and any regulations or guidance promulgated
thereunder.
"ERISA Affiliate" means (i) any corporation which is a
---------------
member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Internal Revenue Code) as the Parent
Guarantor; (ii) a partnership or other trade or business (whether or
not incorporated) which is under common control (within the meaning of
Section 414(c) of the Internal Revenue Code) with the Parent
Guarantor; and (iii) a member of the same affiliated service group
(within the meaning of Section 414(m) of the Internal Revenue Code) as
the Parent Guarantor, any corporation described in clause (i) above or
----------
any partnership or trade or business described in clause (ii) above.
-----------
"Eurodollar Affiliate" means, with respect to each Lender,
--------------------
the Affiliate of such Lender (if any) set forth below such Lender's
name under the heading "Eurodollar Affiliate" on the signature pages
hereof or on the Assignment and Acceptance by which it became a Lender
or such Affiliate of a Lender as it may from time to time specify by
written notice to the Borrower and the Agent.
"Eurodollar Interest Payment Date" means (i) with respect to
--------------------------------
any Eurodollar Rate Loan, the last day of each Eurodollar Interest
Period applicable to such Loan and (ii) with respect to any Eurodollar
Rate Loan having a Eurodollar Interest Period in excess of three (3)
calendar months, the last day of each three (3) calendar month
interval during such Eurodollar Interest Period.
"Eurodollar Interest Period" is defined in Section 5.2(b).
-------------------------- --------------
"Eurodollar Interest Rate Determination Date" is defined in
-------------------------------------------
Section 5.2(c).
- --------------
"Eurodollar Lending Office" means, with respect to any
-------------------------
Lender, the office or offices of such Lender (if any) set forth below
such Lender's name under the heading "Eurodollar Lending Office" on
the signature pages hereof or on the Assignment and Acceptance by
which it became a Lender or such office or offices of such Lender as
it may from time to time specify by written notice to the Borrower and
the Agent.
"Eurodollar Rate" means, with respect to any Eurodollar
---------------
Interest Period applicable to a Eurodollar Rate Loan, an interest rate
per annum obtained by dividing (i) the Base Eurodollar Rate applicable
to that Eurodollar Interest Period by (ii) a percentage equal to 100%
minus the Eurodollar Reserve Percentage in effect on the relevant
Eurodollar Interest Rate Determination Date.
"Eurodollar Rate Loans" means those Loans outstanding which
---------------------
bear interest at a rate determined by reference to the Eurodollar Rate
and the Eurodollar Rate Margin as provided in Section 5.1(a).
--------------
"Eurodollar Rate Margin" means:
----------------------
(a) On any date prior to the Acquisition Facility Closing
Date, (i) from the Closing Date until and including the last day of
the first fiscal quarter in which the Closing Date occurs, a rate per
annum equal to 3.000% for Revolving Loans and 3.250% for Term Loans
and (ii) thereafter, the rate per annum determined in accordance with
the Leverage Ratio as of such date as set forth below:
- --------------------------------------------------------------------------------
LEVERAGE RATIO REVOLVING LOANS TERM LOANS
- --------------------------------------------------------------------------------
Greater than or 3.000 3.250
equal to 3.25
- --------------------------------------------------------------------------------
Greater than or 2.750 3.000
equal to 3.00 but
less than 3.25
- --------------------------------------------------------------------------------
Greater than or 2.375 2.625
equal to 2.75 but
less than 3.00
- --------------------------------------------------------------------------------
Greater than or 2.000 2.250
equal to 2.50 but
less than 2.75
- --------------------------------------------------------------------------------
Less than 2.50 1.625 1.875
- --------------------------------------------------------------------------------
(b) On any date on or after the Acquisition Facility Closing
Date, (i) from the Acquisition Facility Closing Date until and
including the last day of the first fiscal quarter in which the
Acquisition Facility Closing Date occurs, a rate per annum equal to
3.000% for Revolving Loans and 3.250% for Acquisition Facility Loans
and (ii) thereafter, the rate per annum determined in accordance with
the Leverage Ratio as of such date as set forth below:
- --------------------------------------------------------------------------------
TERM LOANS
OR ACQUISITION
LEVERAGE RATIO REVOLVING LOANS FACILITY LOANS
- --------------------------------------------------------------------------------
Greater than or 3.000 3.250
equal to 4.50
- --------------------------------------------------------------------------------
Greater than or 2.750 3.000
equal to 4.25 but
less than 4.50
- --------------------------------------------------------------------------------
Greater than or 2.375 2.625
equal to 4.00 but
less than 4.25
- --------------------------------------------------------------------------------
Greater than or 2.000 2.250
equal to 3.75 but
less than 4.00
- --------------------------------------------------------------------------------
Less than 3.75 1.625 1.875
- --------------------------------------------------------------------------------
"Eurodollar Reserve Percentage" means, for any day, that
-----------------------------
percentage which is in effect on such day, as prescribed by the
Federal Reserve Board for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for a member bank of the Federal Reserve
System in Los Angeles, California with deposits exceeding Five Billion
Dollars ($5,000,000,000) in respect of "Eurocurrency Liabilities" (or
in respect of any other category of liabilities which includes
deposits by reference to which the interest rate on Eurodollar Rate
Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any bank
to United States residents).
"Event of Default" means any of the occurrences set forth in
----------------
Section 12.1 after the expiration of any applicable grace period, as
- ------------
expressly provided in Section 12.1.
------------
"Excess Cash Flow" means, for any Cash Flow Period (without
----------------
duplication), an amount equal to the Parent Guarantor's and its
Subsidiaries' consolidated (i) EBITDA, plus (ii) the net reduction, if
----
any, in Working Capital during such period, minus (iii) the net
-----
increase, if any, in Working Capital during such period, minus (iv)
-----
income taxes paid in cash, minus (v) Capital Expenditures paid in cash
-----
during such period, minus (vii) interest expense for such period,
-----
whether paid or accrued during such period, including, without
limitation, the interest component of all Capital Leases, all
commissions, fees and discounts with respect to letters of credit and
other Indebtedness, minus (viii) scheduled amortization of the
-----
principal portion of the Term Loans and the Acquisition Facility Term
Loans (net of the application of all prepayments with respect to such
scheduled amounts) and scheduled amortization of the principal portion
of all other Indebtedness of the Parent Guarantor and its Subsidiaries
during such period.
"Fair Market Value" means, with respect to any asset, the
-----------------
value of the consideration obtainable in a sale of such asset in the
open market, assuming a sale by a willing seller to a willing
purchaser dealing at arm's length and arranged in an orderly manner
over a reasonable period of time, each having reasonable knowledge of
the nature and characteristics of such asset, neither being under any
compulsion to act, and, if in excess of $200,000, as determined (a) in
good faith by the board of directors of the Parent Guarantor or (b) in
an appraisal of such asset, provided that for purposes of Section 10.2
-------- ------------
such appraisal was performed within the one-year period immediately
preceding the date of such sale by an independent third party
appraiser and the basic assumptions underlying such appraisal have not
materially changed since the date thereof.
"Federal Funds Rate" means, for any period, a fluctuating
------------------
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight federal funds transactions
with members of the Federal Reserve System arranged by federal funds
brokers, as published for such day (or, if such day is not a Business
Day in Los Angeles, California, for the next preceding Business Day)
in Los Angeles, California by the Federal Reserve Bank of San
Francisco, or if such rate is not so published for any day which is a
Business Day in Los Angeles, California, the average of the quotations
for such day on such transactions received by the Agent from three
federal funds brokers of recognized standing selected by the Agent.
"Federal Reserve Board" means the Board of Governors of the
---------------------
Federal Reserve System or any Governmental Authority succeed- ing to
its functions.
"Fee Letter" means that certain fee letter addressed to the
----------
Parent Guarantor from the Agent dated July 30, 1997.
"Financial Statements" means (i) statements of income and
--------------------
retained earnings, statements of cash flow, and balance sheets, (ii)
such other financial statements as the Parent Guarantor and its
Subsidiaries shall routinely and regularly prepare and (iii) such
other financial statements as the Agent or the Requisite Lenders may
from time to time reasonably specify.
"First Tier Subsidiary" means a Subsidiary of the Parent
---------------------
Guarantor whose securities or other ownership interests are owned
directly by the Parent Guarantor.
"Fiscal Year" means the fiscal year of the Parent Guarantor
-----------
and its Subsidiaries for accounting and tax purposes.
"Fixed Charge Coverage Ratio" means, for any period, the
---------------------------
ratio of (a) the amount calculated as (i) consolidated EBITDA of the
Parent Guarantor and its Subsidiaries for that period minus (ii) the
-----
aggregate amount of consolidated Capital Expenditures of the Parent
Guarantor and its Subsidiaries made in cash during that period to (b)
the sum of (i) Cash Interest Expense for that period plus (ii) the
----
aggregate amount of scheduled payments of principal of consolidated
Funded Debt of the Parent Guarantor and its Subsidiaries during that
period plus (iii) all taxes paid or payable by the Parent Guarantor
----
and its Subsidiaries during that period plus (iv) the aggregate amount
----
of cash dividends paid by the Parent Guarantor on its Capital Stock
during that period.
"Foreign Employee Benefit Plan" means any Canadian Employee
-----------------------------
Benefit Plan and any employee benefit plan as defined in Section 3(3)
of ERISA which is maintained or contributed to for the benefit of the
employees of the Parent Guarantor, any of its Subsidiaries or any of
its ERISA Affiliates and is not covered by ERISA pursuant to ERISA
Section 4(b)(4).
"Foreign Pension Plan" means any Canadian Pension Plan and
--------------------
any employee benefit plan as defined in Section 3(3) of ERISA which
(i) is maintained or contributed to for the benefit of employees of
the Parent Guarantor, any of its Subsidiaries or any of its ERISA
Affiliates, (ii) is not covered by ERISA pursuant to Section 4(b)(4)
of ERISA, and (iii) under applicable local law, is required to be
funded through a trust or other funding vehicle.
"Foreign Subsidiary" means a Subsidiary of the Parent
------------------
Guarantor which is organized under the laws of a jurisdiction other
than the United States of America (or any State thereof) or Canada (or
any Province thereof).
"Fronting Fee" is defined in Section 5.3(b).
------------ --------------
"Funded Debt" means Indebtedness of the Parent Guarantor and
-----------
its Subsidiaries for borrowed money (determined in accordance with
GAAP), including, without limitation, Indebtedness under Capital
Leases.
"Funding Date" means, with respect to any Loan, the date of
------------
funding of such Loan.
"GAAP" means (a) prior to the change from Canadian to
----
American accounting principles described in Section 15.4(b), Canadian
---------------
GAAP and (b) as of and after the change from Canadian to American
accounting principles described in Section 15.4(b), generally accepted
---------------
accounting principles set forth in the opinions and pronouncements of
the American Institute of Certified Public Accountants' Accounting
Principles Board and Financial Accounting Standards Board or in such
other statements by such other entity as may be in general use by
significant segments of the accounting profession in the United States
of America as in effect on the date hereof (unless otherwise specified
herein as in effect on another date or dates), provided that, in the
--------
case of Financial Statements prepared in accordance with GAAP as
described in this clause (b), such Financial Statements shall provide
----------
a reconciliation to GAAP as described in clause (a) of this
----------
definition, together with a statement of any significant differences
relevant to the Financial Statements between GAAP as described in
clause (a) and clause (b).
- ---------- ----------
"General Intangibles" means, with respect to any Person, all
-------------------
of such Person's present and future (i) general intangibles, (ii)
rights, interests, choses in action, causes of action, claims and
other intangible Property of every kind and nature (other than
Receivables), (iii) corporate and other business records, (iv) loans,
royalties, and other obligations receivable, (v) trademarks,
registered trademarks, trademark applications, service marks,
registered service marks, service mark applications, patents,
registered patents, patent applications, trade names, rights of use of
any name, labels, fictitious names, inventions, designs, trade
secrets, computer programs, software, printouts and other computer
materials, goodwill, registrations, copyrights, copyright
applications, permits, licenses, franchises, customer lists, credit
files, correspondence, and advertising materials, (vi) customer and
supplier contracts, firm sale orders, rights under license and
franchise agreements, rights under tax sharing agreements, and other
contracts and contract rights, (vii) interests in partnerships and
joint ventures, (viii) tax refunds and tax refund claims, (ix) right,
title and interest under leases, subleases, licenses and concessions
and other agreements relating to Property, (x) deposit accounts
(general or special) with any bank or other financial institution,
(xi) credits with and other claims against third parties (including
carriers and shippers), (xii) rights to indemnification and with
respect to support and keep-well agreements, (xiii) reversionary
interests in pension and profit sharing plans and reversionary,
beneficial and residual interests in trusts, (xiv) proceeds of
insurance of which such Person is beneficiary, (xv) letters of credit,
guarantees, Liens, security interests and other security held by or
granted to such Person and (xvi) uncertificated securities.
"Governmental Authority" means any nation or government, any
----------------------
federal, state, regional, provincial, municipal, local or other
political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guaranties" means, collectively, each Limited Guaranty and
----------
each Unlimited Guaranty.
"Guarantor Mortgages" means, collectively, each Guarantor
-------------------
Mortgage executed by a Subsidiary Guarantor for the benefit of the
Agent, substantially in the form of EXHIBIT J.
---------
"Guarantors" means, collectively, the Parent Guarantor and
----------
the Subsidiary Guarantors.
"Hedge Agreement" means any agreement, including, without
---------------
limitation, interest rate exchange, swap, collar or cap agreement,
interest rate future or option contract, currency swap agreement,
currency future or option contract, and other similar agreement,
evidencing an arrangement intended to protect against fluctuation in
interest rates and/or foreign exchange rates or convertibility of
foreign currencies to Dollars.
"Indebtedness", as applied to any Person, means, at any
------------
time, without duplication, (a) all indebtedness, obligations or other
liabilities of such Person (i) for borrowed money or evidenced by debt
securities, debentures, acceptances, notes or other similar
instruments, and any accrued interest, fees and charges relating
thereto, (ii) under profit payment agreements or in respect of
obligations to redeem, repurchase or exchange any Securities of such
Person or to pay dividends in respect of any stock, (iii) with respect
to letters of credit issued for such Person's account, (iv) to pay the
deferred purchase price of property or services, except accounts
payable and accrued expenses arising in the ordinary course of
business, (v) in respect of Capital Leases, (vi) which are
Accommodation Obligations, (vii) under warranties and indemnities or
(viii) created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under
such agreement in the event of default are limited to repossession or
sale of such property); (b) all indebtedness, obligations or other
liabilities of such Person or others secured by a Lien on any property
of such Person, whether or not such indebtedness, obligations or
liabilities are assumed by such Person, all as of such time; (c) all
indebtedness, obligations or other liabilities of such Person in
respect of interest rate contracts, Hedge Agreements and foreign
exchange contracts, net of liabilities owed to such Person by the
counterparties thereon; (d) all preferred stock subject (upon the
occurrence of any contingency or otherwise) to mandatory redemption;
and (e) all contingent Contractual Obligations with respect to any of
the foregoing.
"Indemnified Matters" is defined in Section 15.3.
------------------- ------------
"Indemnitees" is defined in Section 15.3.
----------- ------------
"Interest Coverage Ratio" means, for any period, the ratio
-----------------------
of (i) EBITDA for that period to (ii) Cash Interest Expense for that
period.
"Internal Revenue Code" means the Internal Revenue Code of
---------------------
1986, as amended to the date hereof and from time to time hereafter,
any successor statute and any regulations or guidance promulgated
thereunder.
"Inventory" means, with respect to any Person, all of such
---------
Person's present and future (i) inventory, (ii) goods, merchandise and
other personal Property furnished or to be furnished under any
contract of service or intended for sale or lease, and all consigned
goods and all other items which have previously constituted Equipment
of such Person but are then currently being held for sale or lease in
the ordinary course of such Person's business, (iii) raw materials,
work-in-process and finished goods, (iv) materials and supplies of any
kind, nature or description used or consumed in such Person's business
or in connection with the manufacture, production, packing, shipping,
advertising, finishing or sale of any of the Property described in
clauses (i) through (iii) above, (v) goods in which such Person has a
- ----------- -----
joint or other interest or right of any kind (including, without
limitation, goods in which such Person has an interest or right as
consignee), and (vi) goods which are returned to or repossessed by
such Person; in each case whether in the possession of such Person, a
bailee, a consignee, or any other Person for sale, storage, transit,
processing, use or otherwise, and any and all documents for or
relating to any of the foregoing.
"Investment" means, with respect to any Person, (i) any
----------
purchase or other acquisition by that Person of Securities, or of a
beneficial interest in Securities, issued by any other Person, (ii)
any purchase by that Person of all or substantially all of the assets
of a business conducted by another Person, and (iii) any loan, advance
(other than deposits with financial institutions available for
withdrawal on demand, prepaid expenses, accounts receivable, advances
to employees and similar items made or incurred in the ordinary course
of business) or capital contribution by that Person to any other
Person, including all Indebtedness to such Person arising from a sale
of property by such Person other than in the ordinary course of its
business. The amount of any Investment shall be the original cost of
such Investment, plus the cost of all additions thereto less the
amount of any return of capital or principal to the extent such return
is in cash with respect to such Investment without any adjustments for
increases or decreases in value or write-ups, write-downs or
write-offs with respect to such Investment.
"IRS" means the Internal Revenue Service and any Person
---
succeeding to the functions thereof.
"Issuing Banks" means Union Bank and each Lender designated
-------------
as an "Issuing Bank" on the signature pages hereof or the signature
page of the Assignment and Acceptance by which it became a Lender and
each other Lender approved by the Agent and the Borrower who has
agreed to become an Issuing Bank for the purpose of issuing Letters of
Credit pursuant to Section 3.1.
-----------
"Lender" means, as of the Closing Date, each financial
------
institution a signatory hereto as a Lender and, at any other given
time, each financial institution which is a party hereto as a Lender,
whether as a signatory hereto or pursuant to an Assignment and
Acceptance.
"Letter of Credit" means any Commercial Letter of Credit or
----------------
Standby Letter of Credit.
"Letter of Credit Fee" is defined in Section 5.3(b).
-------------------- --------------
"Letter of Credit Obligations" means, at any particular
----------------------------
time, the sum of (i) all outstanding Reimbursement Obligations, plus
(ii) the aggregate undrawn face amount of all outstanding Letters of
Credit, plus (iii) the aggregate face amount of all Letters of Credit
----
requested by the Borrower but not yet issued (unless the request for
an unissued Letter of Credit has been denied by the designated Issuing
Bank as referenced in Section 3.1(c)(i)).
------------------
"Letter of Credit Reimbursement Agreement" means, with
----------------------------------------
respect to a Letter of Credit, such form of application therefor and
form of reimbursement agreement therefor (whether in a single or
several documents, taken together) as the Issuing Bank from which the
Letter of Credit is requested may employ in the ordinary course of
business for its own account, with such modifications thereto as may
be agreed upon by the Issuing Bank and the Borrower and as are not
materially adverse (in the judgment of the Issuing Bank and Agent) to
the interests of the Lenders; provided, however, in the event of any
-------- -------
conflict between the terms of any Letter of Credit Reimbursement
Agreement and this Agreement, the terms of this Agreement shall
control.
"Leverage Ratio" means, on any date, the ratio of Funded
--------------
Debt as of the last day of the most recently expired fiscal quarter of
the Parent Guarantor to EBITDA for the four-quarter period ending on
the last day of such fiscal quarter, calculated on a pro forma basis
assuming that each Permitted Acquisition consummated at any time
during such four-quarter period had been consummated as of the first
day of such four-quarter period, incorporating, as appropriate, EBITDA
for any Target of such a Permitted Acquisition earned prior to the
date of such Permitted Acquisition.
"Liabilities and Costs" means all liabilities, obligations,
---------------------
responsibilities, losses, damages, personal injury, death, punitive
damages, economic damages, consequential damages, treble damages,
intentional, willful or wanton injury, damage or threat to the
environment, natural resources or public health or welfare, costs and
expenses (including, without limitation, attorney, expert and
consulting fees and costs and fees and costs associated with any
investigation, feasibility or Remedial Action studies), fines,
penalties and monetary sanctions, interest, direct or indirect, known
or unknown, absolute or contingent, past, present or future.
"Lien" means any mortgage, deed of trust, charge, pledge,
----
hypothecation, assignment, conditional sale or other title retention
agreement or arrangement, deposit arrangement, security interest,
encumbrance, restrictive covenant, lien (statutory or other and
including, without limitation, any Environmental Lien), preference,
priority or other security agreement or preferential arrangement of
any kind or nature whatsoever in respect of any property of a Person,
whether granted voluntarily or imposed by law, and includes the
interest of a lessor under a Capital Lease or under any financing
lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement or similar notice
(other than a financing statement filed by a "true" lessor pursuant to
ss. 9-408 of the Uniform Commercial Code), naming the owner of such
property as debtor, under the Uniform Commercial Code or other
comparable law of any jurisdiction.
"Limited Guaranty" means a Limited Guaranty and Security
----------------
Agreement to be executed by each Subsidiary Guarantor, substantially
in the form of EXHIBIT H.
---------
"Loan Account" is defined in Section 4.3(b).
------------ --------------
"Loan Documents" means this Agreement, the Notes, the
--------------
Security Documents and the Hedge Agreements to which any Lender or any
Affiliate of a Lender is a party and all other instruments, agreements
and written Contractual Obligations between the Parent Guarantor or
any Subsidiary of the Parent Guarantor and the Agent, any Lender or
any Issuing Bank delivered to either the Agent, such Lender or such
Issuing Bank pursuant to or in connection with the transactions
contemplated hereby.
"Loans" means all (a) Revolving Loans and (b) (i) during the
-----
Term Loan Period, Term Loans or (ii) during the Acquisition Facility
Period, Acquisition Facility Loans, in each case whether Reference
Rate Loans or Eurodollar Rate Loans.
"Margin Stock" means "margin stock" as such term is defined
------------
in Regulation U and Regulation G.
"Material Adverse Effect" means a material adverse effect
-----------------------
upon (i) the financial condition, operations, assets or prospects of
the Parent Guarantor or any Subsidiary of the Parent Guarantor whose
total assets, or revenues for the most recently completed period of
four fiscal quarters, exceed $20,000,000, (ii) the ability of the
Parent Guarantor or any of its Subsidiaries to perform their
respective obligations under the Loan Documents, or (iii) the ability
of the Lenders, the Issuing Banks or the Agent to enforce any of the
Obligations.
"Maximum Acquisition Facility Amount" means, at any
-----------------------------------
particular time, the Acquisition Facility Commitments at such time.
"Maximum Revolving Credit Amount" means, at any particular
-------------------------------
time, the Revolving Credit Commitments at such time.
"MIS" means computerized management information system for
---
recording and maintenance of information regarding purchases, sales,
aging, categorization, and locations of Inventory, creation and aging
of Receivables, and accounts payable (including agings thereof).
"Multiemployer Plan" means a "multiemployer plan" as defined
------------------
in Section 4001(a)(3) of ERISA (other than a Foreign Employee Benefit
Plan) which (i) is, or within the immediately preceding six (6) years
was, contributed to by either the Parent Guarantor or any ERISA
Affiliate or in respect of which the Parent Guarantor or any ERISA
Affiliate has assumed any liability and (ii) is not a Foreign Employee
Benefit Plan.
"Net Cash Proceeds of Issuance of Equity Securities or
-----------------------------------------------------
Indebtedness" means (i) net cash proceeds (including cash, equivalents
- ------------
readily convertible into cash, and cash proceeds of any notes received
as consideration or of any other non-cash consideration) received by
the Parent Guarantor or any of its Subsidiaries at any time after the
Closing Date on account of the issuance of (a) equity Securities of
the Parent Guarantor or any of its Subsidiaries (other than (1)
Capital Stock of a Subsidiary issued to the Parent Guarantor or to a
Subsidiary of the Parent Guarantor and (2) equity Securities of the
Parent Guarantor issued in payment of Indebtedness of the Parent
Guarantor or any of its Subsidiaries, to the extent such payment is
permitted hereunder) or (b) Indebtedness (other than Indebtedness
permitted under Section 10.1) of the Parent Guarantor or any of its
------------
Subsidiaries, in each case net of all transaction costs and
underwriters' discounts with respect thereto; and (ii) proceeds
received by the Parent Guarantor at any time after the Closing Date as
a contribution to its capital on account of the issuance of equity
Securities of the Parent Guarantor.
"Net Cash Proceeds of Sale" means (i) proceeds received by
-------------------------
the Parent Guarantor or any of its Subsidiaries in cash (including
cash, equivalents readily convertible into cash, and such proceeds of
any notes received as consideration of any other non-cash
consideration) from the sale, assignment or other disposition of (but
not the lease or license of) any Property, other than sales permitted
under clauses (b) and (c) and clauses (f) through (i) of Section 10.2,
------------------- ----------------------- ------------
net of (A) the costs of sale, assignment or other disposition, (B) any
income, franchise, transfer or other tax liability arising from such
transaction and (C) amounts applied to the repayment of Indebtedness
(other than the Obligations) secured by a Lien permitted by Section
-------
10.3 on the asset disposed of, if such net proceeds arise from any
- ----
individual sale, assignment or other disposition or from any group of
related sales, assignments or other dispositions; and (ii) to the
extent provided in Section 9.8, proceeds of insurance on account of
-----------
the loss of or damage to any such Property or Properties, and payments
of compensation for any such Property or Properties taken by
condemnation or eminent domain.
"Net Income" means, for any period, the net earnings (or
----------
loss) after taxes of the Parent Guarantor and its Subsidiaries on a
consolidated basis for such period taken as a single accounting period
determined in conformity with GAAP.
"Net Insurance and Condemnation Proceeds" means proceeds
---------------------------------------
(including cash, equivalents readily convertible into cash, and such
proceeds of any notes received in lieu of cash) of insurance policies
described in Section 9.8 and proceeds of condemnation awards described
-----------
in Section 9.8 required to be remitted to the Agent as provided in
-----------
Section 9.8.
- -----------
"Non Pro Rata Loan" is defined in Section 4.2(b)(v).
----------------- -----------------
"Note" means a promissory note in the form attached hereto
----
as EXHIBIT D-1, D-2 or D-3 payable to a Lender, evidencing certain of
----------- --- ---
the Obligations of the Borrower to such Lender and executed by the
Borrower as required by Section 4.3(a), as the same may be amended,
--------------
supplemented, modified or restated from time to time; "Notes" means,
-----
collectively, all of such Notes outstanding at any given time.
"Notice of Borrowing" means a notice substantially in the
-------------------
form of EXHIBIT C attached hereto and made a part hereof.
---------
"Notice of Conversion/Continuation" means a notice
---------------------------------
substantially in the form of EXHIBIT B attached hereto and made a part
---------
hereof with respect to a proposed conversion or continuation of a Loan
pursuant to Section 5.1(c).
--------------
"Obligations" means all Loans, advances, debts, liabilities,
-----------
obligations, covenants and duties owing by the Borrower to the Agent,
any Lender, any Issuing Bank, any Affiliate of the Agent, any Lender
or any Issuing Bank, or any Person entitled to indemnification
pursuant to Section 15.3 of this Agreement, of any kind or nature,
------------
present or future, whether or not evidenced by any note, guaranty or
other instrument, arising under this Agreement, the Notes or any other
Loan Document, whether or not for the payment of money, whether
arising by reason of an extension of credit, opening or amendment of a
Letter of Credit or payment of any draft drawn thereunder, loan,
guaranty, indemnification, foreign exchange contract, Hedge Agreement
or in any other manner, whether direct or indirect (including those
acquired by assignment), absolute or contingent, due or to become due,
now existing or hereafter arising and however acquired. The term
includes, without limitation, all interest, charges, expenses, fees,
attorneys' fees and disbursements and any other sum chargeable to the
Borrower under this Agreement or any other Loan Document (including
sums chargeable on or after the occurrence of an event referred to in
Section 12.1(f) or 12.(g), whether or not allowed as a claim in any
- --------------- ------
proceeding relating to such event).
"Officer's Certificate" means, as to a corporation, a
---------------------
certificate executed on behalf of such corporation by the chairman or
vice-chairman of its board of directors (if an officer of such
corporation) or its president, any of its vice-presidents, its chief
financial officer, or its treasurer.
"Operating Lease" means, as applied to any Person, any lease
---------------
of any Property by that Person as lessee which is not a Capital Lease.
"Organizational Documents" means, with respect to any
------------------------
corporation, limited liability company, or partnership (i) the
articles/certificate of incorporation (or the equivalent
organizational documents) of such corporation or limited liability
company, (ii) the partnership agreement executed by the partners in
the partnership, (iii) the by-laws (or the equivalent governing
documents) of the corporation, limited liability company or
partnership, and (iv) any document setting forth the designation,
amount and/or relative rights, limitations and preferences of any
class or series of such corporation's Capital Stock or such limited
liability company's or partnership's equity or ownership interests.
"Original Currency" is defined in Section 14.6(a).
----------------- ---------------
"OSHA" means the Occupational Safety and Health Act of 1970,
----
29 U.S.C. ss.ss. 651 et seq., any amendments thereto, any successor
statutes and any regulations or guidance promulgated thereunder.
"Other Currency" is defined in Section 14.6(a).
-------------- ---------------
"Parent Guarantor" is defined in the preamble of this
----------------
Agreement.
"Parent Guarantor Security Agreement" means the Parent
-----------------------------------
Guarantor Security Agreement of even date herewith between the Parent
Guarantor and the Agent, substantially in the form of EXHIBIT E-2.
-----------
"Parent Guarantor Stock Pledge Agreement" means the Parent
---------------------------------------
Guarantor Stock Pledge Agreement executed by the Parent Guarantor for
the benefit of the Agent, substantially in the form of EXHIBIT F-1.
-----------
"PBGC" means the Pension Benefit Guaranty Corporation and
----
any Person succeeding to the functions thereof.
"Permits" means any permit, approval, authorization license,
-------
variance, or permission required from a Governmental Authority or
other Person under an applicable Requirement of Law.
"Permitted Acquisition" means an acquisition by the Parent
---------------------
Guarantor or a Subsidiary Guarantor which is a First Tier Subsidiary
of all or substantially all of the assets or the Capital Stock of a
Target upon satisfaction of each of the following conditions:
(a) the Agent shall receive at least thirty (30) Business
Days' prior written notice of such proposed Permitted Acquisition,
which notice shall include a reasonably detailed description of such
proposed Permitted Acquisition (including, without limitation, a
summary of any environmental, health or safety claims, liabilities and
costs resulting from the proposed Permitted Acquisition);
(b) such Permitted Acquisition shall only involve assets
located in the United States or Canada and comprising a business, or
those assets of a business, of the type engaged in by the Parent
Guarantor and its Subsidiaries as of the Closing Date (but in any
event not involving the treatment, recycling, storage or disposal of
any Contaminant), and which business would not subject the Agent, any
Lender or any Issuing Bank to regulatory or third party approvals in
connection with the exercise of its rights and remedies under this
Agreement or any other Loan Documents other than approvals applicable
to the exercise of such rights and remedies with respect to the Parent
Guarantor and its Subsidiaries prior to such Permitted Acquisition;
(c) such Permitted Acquisition shall be consensual and shall
have been approved by the Target's board of directors;
(d) EBITDA of the Target (based on the financial statements
of the Target for the period of four fiscal quarters most recently
ended, which financial statements shall be in form acceptable to the
Agent, and determineda positive number, and such Permitted Acquisition
shall satisfy the criteria set forth in Section 10.4(h);
---------------
(e) at or prior to the closing of any Permitted Acquisition,
the Agent will be granted, for the benefit of the Secured Parties, a
first priority perfected Lien (subject only to Customary Permitted
Liens) in all assets acquired pursuant thereto, and the Borrower, each
Guarantor and the Target shall have executed such documents and taken
such actions as may be reasonably required by the Agent in connection
therewith, including amendments to the Security Documents;
(f) concurrently with delivery of the notice referred to in
clause (a) above, the Parent Guarantor shall have delivered to the
Agent, in form and substance reasonably satisfactory to the Agent:
(i) a pro forma consolidated and consolidating balance sheet
of the Parent Guarantor and its Subsidiaries (the "Acquisition
-----------
Pro Forma"), based on recent financial data, which shall be
---------
complete and shall accurately and fairly represent the assets,
liabilities, financial condition and results of operations of the
Parent Guarantor and its Subsidiaries in accordance with GAAP
consistently applied, but taking into account such Permitted
Acquisition and the funding of all Loans in connection therewith
and giving effect to what the operating results would have been
for the period after appropriate adjustments approved in advance
by the Agent, and such Acquisition Pro Forma shall reflect that
on a pro forma basis, no Potential Event of Default or Event of
Default shall have occurred and be continuing or would result
after giving effect to such Permitted Acquisition and the Parent
Guarantor would have been in compliance with the financial
covenants set forth in Article XI for the period reflected in the
----------
Compliance Certificate most recently delivered to the Agent prior
to the consummation of such Permitted Acquisition (giving effect
to such Permitted Acquisition and all Loans funded in connection
therewith as if made on the first day of such period);
(ii) updated versions of the most recently delivered
Projections covering the period commencing on the date of such
Permitted Acquisition and ending on the Acquisition Facility
Termination Date then in effect and otherwise prepared in
accordance with the Projections (the "Acquisition Projections")
-----------------------
and based upon historical financial data of the Target of a
recent date satisfactory to the Agent, taking into account such
Permitted Acquisition;
(iii) a certificate of the chief financial officer of the
Parent Guarantor to the effect that: (w) the Parent Guarantor
(and the applicable Subsidiary of the Parent Guarantor, if a
Subsidiary of the Parent Guarantor is acquiring the Target) will
be Solvent upon the consummation of the Permitted Acquisition;
(x) the Acquisition Pro Forma fairly presents the financial
condition of the Parent Guarantor and its Subsidiaries (on a
consolidated basis) as of the date thereof after giving effect to
the Permitted Acquisition; (y) the Acquisition Projections are
reasonable estimates of the future financial performance of the
Parent Guarantor subsequent to the date thereof based upon the
historical performance of the Parent Guarantor and the Target and
show that the Parent Guarantor shall continue to be in compliance
with the financial covenants set forth in Article XI for the
----------
period commencing on the date of such Permitted Acquisition and
ending on the Acquisition Facility Termination Date then in
effect; and (z) the Parent Guarantor completed, not later than
ten (10) Business Days prior to the date of the Permitted
Acquisition, its due diligence investigation with respect to the
Target and such Permitted Acquisition, which investigation was
conducted in a manner similar to that which would have been
conducted by a prudent purchaser of a comparable business; and
(iv) a set of revised Schedules to this Agreement, modified
as necessary to give effect to the proposed Permitted
Acquisition;
(g) on or prior to the date of such Permitted Acquisition,
the Agent shall have received, in form and substance reasonably
satisfactory to the Agent, the agreements entered into in connection
with the Permitted Acquisition and all opinions, certificates, lien
search results, environmental reports, title insurance policies,
surveys, zoning letters, certificates of occupancy, appraisals and
other documents reasonably requested by the Agent, including an
assignment of rights in respect of the Parent Guarantor's (or the
applicable Subsidiary of the Parent Guarantor's) rights under the
related Permitted Acquisition agreements, which assignment shall be
expressly permitted under such Permitted Acquisition agreement or
shall have been consented to by the Target in writing; and
(h) at the time of such Permitted Acquisition and after
giving effect thereto, no Potential Event of Default or Event of
Default shall have occurred and be continuing or would result
therefrom.
"Permitted Equity Securities Options" means the
-----------------------------------
subscriptions, options, warrants, rights, convertible securities and
other agreements or commitments relating to the issuance of equity
Securities of the Parent Guarantor or any Subsidiary of the Parent
Guarantor identified as such on SCHEDULE 1.1.1.
--------------
"Permitted Existing Accommodation Obligations" means those
--------------------------------------------
Accommodation Obligations of the Parent Guarantor and its Subsidiaries
identified as such on SCHEDULE 1.1.2.
--------------
"Permitted Existing Indebtedness" means the Indebtedness
of the Parent Guarantor and its Subsidiaries identified as such on
SCHEDULE 7.1-J.
- --------------
"Permitted Existing Investments" means those Investments
identified as such on SCHEDULE 1.1.3.
--------------
"Permitted Existing Liens" means the Liens on assets of the
------------------------
Parent Guarantor or any of its Subsidiaries identified as such on
SCHEDULE 1.1.4.
- --------------
"Person" means any natural person, corporation, limited
------
liability company, limited partnership, general partnership, joint
stock company, joint venture, association, company, trust, bank, trust
company, land trust, business trust or other organization, whether or
not a legal entity, and any Governmental Authority.
"Plan" means an employee benefit plan defined in Section
----
3(3) of ERISA (other than a Foreign Employee Benefit Plan) (i) in
respect of which the Parent Guarantor or any ERISA Affiliate is, or
within the immediately preceding six (6) years was, an "employer" as
defined in Section 3(5) of ERISA or the Parent Guarantor or any ERISA
Affiliate has assumed any liability and (ii) which is not a Foreign
Employee Benefit Plan.
"Potential Event of Default" means an event which, with the
--------------------------
giving of notice or the lapse of time, or both, would consti- tute an
Event of Default.
"Process Agent" is defined in Section 15.17(a).
------------- ----------------
"Pro Forma" means the unaudited pro forma opening
---------
consolidated balance sheet of the Parent Guarantor and its
Subsidiaries attached hereto as EXHIBIT K, prepared in accordance with
---------
GAAP, dated the Closing Date, and giving effect to the extensions of
credit and application of proceeds thereof contemplated hereby.
"Projections" means the financial projections (including,
-----------
without limitation, capital expenditure budget) and assumptions
prepared by the Parent Guarantor dated as of the Closing Date and
attached hereto as EXHIBIT L.
----------
"Property" means any Real Property or personal property,
--------
plant, building, facility, structure, underground storage tank or
unit, Equipment, Inventory, General Intangible, Receivable, or other
asset owned, leased or operated by the Parent Guarantor or any
Subsidiary of the Parent Guarantor, as applicable, (including any
surface water thereon, and soil and groundwater thereunder).
"Pro Rata Share" means, with respect to any Lender, the
--------------
percentage obtained by dividing (i) the sum of such Lender's (A)
Revolving Credit Commitment and (B) (1) during the Term Loan Period,
Term Loan Commitment or (2) during the Acquisition Facility Period,
Acquisition Facility Commitment (in each case, as adjusted from time
to time in accordance with the provisions of this Agreement or any
Assignment and Acceptance to which such Lender is a party) by (ii) the
aggregate amount of all of the (A) Revolving Credit Commitments and
(B) (1) during the Term Loan Period, Term Loan Commitments or (2)
during the Acquisition Facility Period, Acquisition Facility
Commitments (notwithstanding the termination of any such Commitments).
"Protective Advance" is defined in Section 13.9(a).
------------------ ---------------
"RCRA" means the Resource Conservation and Recovery Act of
----
1976, 42 U.S.C. ss.ss. 6901 et seq., any amendments thereto, any
successor statutes, and any regulations promulgated thereunder.
"Real Property" means, with respect to any Person, all of
-------------
such Person's present and future right, title and interest (including,
without limitation, any leasehold estate) in (i) any plots, pieces or
parcels of land, (ii) any improvements, buildings, structures and
fixtures now or hereafter located or erected thereon or attached
thereto of every nature whatsoever (the rights and interests described
in clauses (i) and (ii) above being the "Premises"), (iii) all
----------- ----
easements, rights of way, gores of land or any lands occupied by
streets, ways, alleys, passages, sewer rights, water courses, water
rights and powers, and public places adjoining such land, and any
other interests in property constituting appurtenances to the
Premises, or which hereafter shall in any way belong, relate or be
appurtenant thereto, (iv) all hereditaments, gas, oil, minerals (with
the right to extract, sever and remove such gas, oil and minerals),
and easements, of every nature whatsoever, located in or on the
Premises and (v) all other rights and privileges thereunto belonging
or appertaining and all extensions, additions, improvements,
betterments, renewals, substitutions and replacements to or of any of
the rights and interests described in clauses (iii) and (iv) above.
------------- ----
"Receivables" means, with respect to any Person, all of such
-----------
Person's present and future (i) accounts, (ii) contract rights,
chattel paper, instruments, documents, deposit accounts, and other
rights to payment of any kind, whether or not arising out of or in
connection with the sale or lease of goods or the rendering of
services, and whether or not earned by performance, (iii) any of the
foregoing which are not evidenced by instruments or chattel paper,
(iv) intercompany receivables, and any security documents executed in
connection therewith, (v) proceeds of any letters of credit or
insurance policies on which such Person is named as beneficiary, (vi)
claims against third parties for advances and other financial
accommodations and any other obligations whatsoever owing to such
Person, (vii) rights in and to all security agreements, leases,
guarantees, instruments, securities, documents of title and other
contracts securing, evidencing, supporting or otherwise relating to
any of the foregoing, together with all rights in any goods,
merchandise or Inventory which any of the foregoing may represent, and
(viii) rights in returned and repossessed goods, merchandise and
Inventory which any of the same may represent, including, without
limitation, any right of stoppage in transit.
"Reference Rate" means the variable rate of interest per
--------------
annum established by Union Bank from time to time as its "Reference
Rate." The "Reference Rate" is set by Union Bank as a general
reference rate of interest, taking into account such factors as Union
Bank may deem appropriate, it being understood that many of Union
Bank's commercial or other loans are priced in relation to such rate,
that it is not necessarily the lowest or best rate actually charged to
any customer and that Union Bank may make various commercial or other
loans at rates of interest having no relationship to such rate. For
purposes of this Agreement, each change in the Reference Rate shall be
effective as of the opening of business on the date announced as the
effective date of any change in the "Reference Rate."
"Reference Rate Loans" means all Loans which bear interest
--------------------
at a rate determined by reference to the Reference Rate as provided in
Section 5.1(a).
"Reference Rate Margin" means:
---------------------
(a) On any date prior to the Acquisition Facility Closing
Date, (i) from the Closing Date until and including the last day of
the first fiscal quarter in which the Closing Date occurs, a rate per
annum equal to 2.000% for Revolving Loans and 2.250% for Term Loans
and (ii) thereafter, the rate per annum determined in accordance with
the Leverage Ratio as of such date as set forth below:
- --------------------------------------------------------------------------------
LEVERAGE RATIO REVOLVING LOANS TERM LOANS
- --------------------------------------------------------------------------------
Greater than or 2.000 2.250
equal to 3.25
- --------------------------------------------------------------------------------
Greater than or 1.750 2.000
equal to 3.00 but
less than 3.25
- --------------------------------------------------------------------------------
Greater than or 1.375 1.625
equal to 2.75 but
less than 3.00
- --------------------------------------------------------------------------------
Greater than or 1.000 1.250
equal to 2.50 but
less than 2.75
- --------------------------------------------------------------------------------
Less than 2.50 0.625 0.875
- --------------------------------------------------------------------------------
(b) On any date on or after the Acquisition Facility Closing
Date, (i) from the Acquisition Facility Closing Date until and
including the last day of the first fiscal quarter in which the
Acquisition Facility Closing Date occurs, a rate per annum equal to
2.000% for Revolving Loans and 2.250% for Acquisition Facility Loans
and (ii) thereafter, the rate per annum determined in accordance with
the Leverage Ratio as of such date as set forth below:
- --------------------------------------------------------------------------------
TERM LOANS
OR ACQUISITION
LEVERAGE RATIO REVOLVING LOANS FACILITY LOANS
- --------------------------------------------------------------------------------
Greater than or 2.000 2.250
equal to 4.50
- --------------------------------------------------------------------------------
Greater than or 1.750 2.000
equal to 4.25 but
less than 4.50
- --------------------------------------------------------------------------------
Greater than or 1.375 1.625
equal to 4.00 but
less than 4.25
- --------------------------------------------------------------------------------
Greater than or 1.000 1.250
equal to 3.75 but
less than 4.00
- --------------------------------------------------------------------------------
Less than 3.75 0.625 0.875
- --------------------------------------------------------------------------------
"Refinanced Indebtedness" means the Indebtedness of the
-----------------------
Parent Guarantor or any of its Subsidiaries which is to be repaid or
defeased out of the proceeds of the Loans made on the Closing Date and
identified as such on SCHEDULE 1.1.5.
---------------
"Register" is defined in Section 15.1(c).
-------- ---------------
"Regulation A" means Regulation A of the Federal Reserve
------------
Board as in effect from time to time.
"Regulation G" means Regulation G of the Federal Reserve
------------
Board as in effect from time to time.
"Regulation T" means Regulation T of the Federal Reserve
------------
Board as in effect from time to time.
"Regulation U" means Regulation U of the Federal Reserve
------------
Board as in effect from time to time.
"Regulation X" means Regulation X of the Federal Reserve
------------
Board as in effect from time to time.
"Reimbursement Date" is defined in Section 3.1(d)(i)(A).
------------------ --------------------
"Reimbursement Obligations" means the aggregate non-
-------------------------
contingent reimbursement or repayment obligations of the Borrower with
respect to amounts drawn under Letters of Credit.
"Release" means any release, spill, emission, leaking,
-------
pumping, pouring, dumping, injection, deposit, disposal, abandonment,
or discarding of Contaminants or barrels, pallets, containers or other
receptacles, the discharge, emptying, escape, dispersal, leaching or
active or passive migration of Contaminants into the indoor or outdoor
environment or into or out of any Property, including the movement of
Contaminants through or in the air, soil, soil gas, surface water,
groundwater or Property.
"Remedial Action" means actions required to (i) clean up,
---------------
remove, treat, stabilize, contain or in any other way address
Contaminants in, on, under or at any Property or in the indoor or
outdoor environment; (ii) prevent the Release or threat of Release or
mitigate the further Release of Contaminants; or (iii) investigate and
determine if a remedial response is needed and to design such a
response and post-remedial investigation, monitoring, operation and
maintenance and care, or (iv) restore, repair, replace or otherwise
redress any impairment to natural resources, any Property, or any
property owned by third parties.
"Replacement Proceeds" means the amount of (i) proceeds of
--------------------
insurance paid on account of the loss of or damage to any Property and
awards of compensation for Property taken by condemnation or eminent
domain to the extent actually used to replace, rebuild or restore the
Property so lost, damaged or taken, provided that (a) the Parent
-------- ----
Guarantor shall have delivered written notice to the Agent that it or
its applicable Subsidiary intends to so replace, rebuild or restore
such Property and (b) the Parent Guarantor or such applicable
Subsidiary of the Parent Guarantor replaces or uses its best efforts
to commence the restoration or rebuilding of such Property within 180
days after the Agent's receipt of the proceeds of such insurance
payment or condemnation award and (ii) insurance paid on account of a
business interruption occurrence to the extent actually used in the
restoration or conduct of the business interrupted.
"Reportable Event" means any of the events described in
----------------
Section 4043(b) of ERISA and the regulations promulgated thereunder as
in effect from time to time.
"Requirements of Law" means, as to any Person, the charter
-------------------
and by-laws or other organizational or governing documents of such
Person, and any law, rule or regulation, judgment, order, decree or
determination of or agreement with an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon
such Person or any of its property or to which such Person or any of
its property is subject including, without limitation, the Securities
Act, the Securities Exchange Act, Regulations G, T, U and X, ERISA,
the Fair Labor Standards Act, the Worker Adjustment and Retraining
Notification Act, Americans with Disabilities Act of 1990, and any
certificate of occupancy, zoning ordinance, building, environmental or
land use requirement or Permit or and Environmental, Health or Safety
Requirement of Law.
"Requisite Lenders" means, as of any date, Lenders having
-----------------
more than 51% of the aggregate amount of Loans and Reimbursement
Obligations outstanding or, if no Loans or Reimbursement Obligations
shall be outstanding, Lenders whose Pro Rata Shares, in the aggregate,
are greater than 51%.
"Restricted Junior Payment" means (i) any dividend or other
-------------------------
distribution, direct or indirect, on account of any shares of any
class of Capital Stock of the Parent Guarantor or any of its
Subsidiaries now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock or in any junior class of
stock to the holders of that class, (ii) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of equity
Securities of the Parent Guarantor or any of its Subsidiaries now or
hereafter outstanding, (iii) any payment or prepayment of principal
of, premium, if any, or interest, fees or other charges on or with
respect to, and any redemption, purchase, retirement, defeasance,
sinking fund or similar payment and any claim for rescission with
respect to, the Senior Subordinated Notes or any other Subordinated
Indebtedness and (iv) any payment made to redeem, purchase, repurchase
or retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of Capital
Stock of the Parent Guarantor or any of its Subsidiaries now or
hereafter outstanding.
"Restricted Subsidiaries" means, collectively, American
-----------------------
ECO/SP Corporation, C.A. Turner Maintenance, Inc., Cambridge
Construction Service Corp., Canadian Energy Services Limited,
Environmental Evolutions, Inc., H.E. Co. Services, Inc., Lake Charles
Construction Corporation, Lake Charles Heating & Cooling, Lake Charles
Sheet Metal, NUS, Inc. and United Eco Systems, Inc.
"Revolving Credit Availability" means, at any particular
-----------------------------
time, the amount by which the Maximum Revolving Credit Amount at such
time exceeds the Revolving Credit Obligations at such time.
"Revolving Credit Commitment" means, with respect to any
---------------------------
Lender, the obligation of such Lender to make Revolving Loans and to
participate in Letters of Credit pursuant to the terms and conditions
of this Agreement, in an aggregate amount at any time outstanding
which shall not exceed the principal amount set forth opposite such
Lender's name under the heading "Revolving Credit Commitment" on the
---------------------------
signature pages hereof or the signature page of the Assignment and
Acceptance by which it became a Lender, as modified from time to time
pursuant to the terms of this Agreement or to give effect to any
applicable Assignment and Acceptance, and "Revolving Credit
Commitments" means the aggregate principal amount of the Revolving
Credit Commitments of all the Lenders, the maximum amount of which
shall be $12,000,000 prior to the Acquisition Facility Closing Date
and $25,000,000 thereafter, as reduced from time to time pursuant to
Section 4.1.
- -----------
"Revolving Credit Obligations" means, at any particular
----------------------------
time, the sum of (i) the outstanding principal amount of the Revolving
Loans at such time plus (ii) the Letter of Credit Obligations at such
----
time.
"Revolving Credit Termination Date" means the earlier to
---------------------------------
occur of (i) the fifth anniversary of the Closing Date (or, if not a
Business Day, the next preceding Business Day) and (ii) the date of
termination of the Revolving Credit Commitments pursuant to the terms
of this Agreement.
"Revolving Lenders" means those Lenders having a Revolving
-----------------
Credit Commitment; and "Revolving Lender" means one of the Revolving
----------------
Lenders, individually.
"Revolving Loan" is defined in Section 2.2(a).
-------------- --------------
"Revolving Notes" means promissory notes executed by the
---------------
Borrower and delivered to the Lenders evidencing the Revolving Loans,
as the same may be amended, supplemented, modified or restated from
time to time, and any promissory note issued in substitution therefor,
substantially in the form attached hereto as EXHIBIT D-1; and
-----------
"Revolving Note" means any one of the Revolving Notes.
--------------
"Secured Counterparties" means those parties to any Hedge
----------------------
Agreement (other than the Borrower or any Affiliate of the Borrower)
that are Lenders.
"Secured Parties" means the Agent, the Lenders, the Issuing
---------------
Banks and the Secured Counterparties.
"Securities" means any stock, shares, voting trust
----------
certificates, limited partnership certificates, bonds, debentures,
notes or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any instruments
commonly known as "securities", including, without limitation, any
"security" as such term is defined in Section 8-102 of the Uniform
Commercial Code, or any certificates of interest, shares, or
participations in temporary or interim certificates for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire
any of the foregoing, but shall not include the Notes or any other
evidence of the Obligations.
"Securities Act" means the Securities Act of 1933, as
--------------
amended from time to time, and any successor statute.
"Securities Exchange Act" means the Securities Exchange Act
-----------------------
of 1934, as amended from time to time, and any successor statute.
"Security Documents" means, collectively, the Borrower
------------------
Security Agreement, the Parent Guarantor Security Agreement, the
Guaranties, the Guarantor Mortgages, the Parent Guarantor Stock Pledge
Agreement, the Subsidiary Stock Pledge Agreements and the Canadian
Security Documents.
"Senior Debt-to-Capitalization Ratio" means, as of any date,
-----------------------------------
the ratio of (a) Funded Debt (other than Subordinated Indebtedness) as
of that date to (b) the sum of Funded Debt and consolidated
shareholders' equity of the Parent Guarantor and its Subsidiaries as
of that date.
"Senior Leverage Ratio" means, on any date, the ratio of (a)
---------------------
Funded Debt (other than Subordinated Indebtedness) as of the last day
of the most recently expired fiscal quarter to (b) EBITDA for the
period of four fiscal quarters ending on the last day of such fiscal
quarter, calculated on a pro forma basis assuming that each Permitted
Acquisition consummated at any time during such four-quarter period
had been consummated as of the first day of such four-quarter period,
incorporating, as appropriate, EBITDA for any Target of such a
Permitted Acquisition earned prior to the date of such Permitted
Acquisition.
"Senior Subordinated Note Documents" means the documents and
----------------------------------
instruments governing the Senior Subordinated Notes.
"Senior Subordinated Note Issuance Date" means the date, on
--------------------------------------
or before March 31, 1998, on which the Senior Subordinated Notes shall
first be issued.
"Senior Subordinated Notes" means Subordinated Indebtedness
-------------------------
in an original aggregate principal amount of no less than $100,000,000
issued on terms and conditions approved by the Lenders pursuant to
Section 6.2(b).
- --------------
"Solvent", when used with respect to any Person, means that
-------
at the time of determination:
(i) the Fair Market Value of its assets is in excess of
the total amount of its liabilities (including, without
limitation, contingent liabilities); and
(ii) the present fair saleable value of its assets is
greater than its probable liability on its existing debts as
such debts become absolute and matured; and
(iii) it is then able and expects to be able to pay its debts
(including, without limitation, contingent debts and other
commitments) as they mature; and
(iv) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
"Standby Letter of Credit" means any letter of credit issued
------------------------
by an Issuing Bank pursuant to Section 3.1 for the account of the
-----------
Borrower or for the account of the Parent Guarantor or any of its
Subsidiaries if the Borrower is jointly and severally liable for
reimbursement of amounts drawn under such letter of credit, which is
not a Commercial Letter of Credit.
"Subordinated Indebtedness" means (i) the Senior
-------------------------
Subordinated Notes and (ii) any other Indebtedness of the Parent
Guarantor or the Borrower subordinated in right of payment on terms
(A) not less favorable to the Lenders, and subject to covenants and
events of default not more burdensome to the Borrower and the
Guarantors, than the subordination provisions, covenants and events of
default applicable to the Senior Subordinated Notes or (B) approved in
writing by the Requisite Lenders.
"Subsidiary" of a Person means any corporation, limited
----------
liability company, general or limited partnership, or other entity of
which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other Persons
performing similar functions with respect to such entity are at the
time directly or indirectly owned or controlled by such Person, one or
more of the other subsidiaries of such Person or any combination
thereof.
"Subsidiary Guarantors" means each existing and future
---------------------
Subsidiary of the Parent Guarantor (other than a Foreign Subsidiary)
and any other Person executing and delivering a guaranty of payment
and performance of all or any portion of the Obligations.
"Subsidiary Stock Pledge Agreements" means each Subsidiary
----------------------------------
Stock Pledge Agreement executed by a Subsidiary Guarantor for the
benefit of the Agent, substantially in the form of EXHIBIT F-2.
-----------
"Target" means a Person which is organized under the laws of
------
any State within the United States of America or Canada and which is
the subject of a Permitted Acquisition.
"Taxes" is defined in Section 14.1(a).
----- ---------------
"Term Lenders" means those Lenders having a Term Loan
------------
Commitment; and "Term Lender" means one of the Term Lenders,
-----------
individually.
"Term Loan" is defined in Section 2.1(a).
--------- --------------
"Term Loan Commitment" means, with respect to any Lender,
--------------------
the obligation of such Lender to make its Term Loan pursuant to the
terms and conditions of this Agreement, in an amount equal to the
amount set forth under such Lender's name under the heading "Term Loan
Commitment" on the signature pages hereof or the signature page of the
Assignment and Acceptance by which it became a Lender, as modified
from time to time pursuant to the terms of this Agreement or to give
effect to any applicable Assignment and Acceptance, and "Term Loan
---------
Commitments" means the aggregate principal amount of the Term Loan
- -----------
Commitments of all the Lenders, the maximum amount of which shall be
$52,500,000, as reduced from time to time pursuant to Sections 2.1(d)
---------------
or 4.1.
---
"Term Loan Period" means the period commencing on the
----------------
Closing Date and ending on the Acquisition Facility Closing Date.
"Term Loan Termination Date" means the earliest of (i) the
--------------------------
sixth anniversary of the Closing Date, (ii) the date of the repayment
in full of all Obligations in respect of the Term Loans, and (iii) the
date of acceleration of the Obligations pursuant to Section 12.2.
------------
"Term Notes" means promissory notes executed by the Borrower
----------
and delivered to the Lenders evidencing the Term Loans, as the same
may be amended, supplemented, modified or restated from time to time,
and any promissory note issued in substitution therefor, substantially
in the form attached hereto as EXHIBIT D- 2; and "Term Note" means any
------------ ---------
one of the Term Notes.
"Termination Event" means (i) a Reportable Event with
-----------------
respect to any Benefit Plan; (ii) the withdrawal of the Parent
Guarantor or any ERISA Affiliate from a Benefit Plan during a plan
year in which the Parent Guarantor or such ERISA Affiliate was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA or
the cessation of operations which results in the termination of
employment of 20% of Benefit Plan participants who are employees of
the Parent Guarantor or any ERISA Affiliate; (iii) the imposition of
an obligation on the Parent Guarantor or any ERISA Affiliate under
Section 4041 of ERISA to provide affected parties written notice of
intent to terminate a Benefit Plan in a distress termination described
in Section 4041(c) of ERISA; (iv) the institution by the PBGC or any
similar foreign Governmental Authority of proceedings to terminate a
Benefit Plan or a Foreign Pension Plan; (v) any event or condition
which could reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee
to administer, any Benefit Plan; (vi) the appointment by a foreign
Governmental Authority of, or the institution of proceedings by a
foreign Governmental Authority to appoint, a trustee to administer any
Foreign Pension Plan; or (vii) the partial or complete withdrawal of
the Parent Guarantor or any ERISA Affiliate from a Multiemployer Plan
or a Foreign Pension Plan.
"Transaction Costs" means the fees, costs and expenses
-----------------
payable by the Borrower in connection with the execution, delivery and
performance of the Loan Documents.
"Uniform Commercial Code" means the Uniform Commercial Code
-----------------------
as enacted in the State of New York, as it may be amended from time to
time.
"Union Bank" is defined in the preamble of this Agreement.
----------
"Unlimited Guaranty" means an Unlimited Guaranty and
------------------
Security Agreement to be executed by each Subsidiary Guarantor,
substantially in the form of EXHIBIT I.
---------
"Unused Commitment Fee" is defined in Section 5.3(c).
--------------------- --------------
"Wholly-Owned Subsidiary" means a corporation (i) one
-----------------------
hundred percent (100%) of the Capital Stock of which is owned by the
Parent Guarantor or any Subsidiary of the Parent Guarantor or (ii)
greater than ninety-eight percent (98%) of the Capital Stock of which
is owned by the Parent Guarantor or a Subsidiary of the Parent
Guarantor and the remainder of which Capital Stock is owned by a
nominee of the Parent Guarantor or such Subsidiary solely to comply
with the Requirements of Law of the jurisdiction governing such
corporation's organization and existence (other than in the case of
Capital Stock of Industra, Inc.).
"Working Capital" means, as at any date of determination,
---------------
the excess, if any, of (i) the Parent Guarantor's consolidated current
assets, except cash and Cash Equivalents, over (ii) the Parent
Guarantor's consolidated current liabilities, except current
maturities of long-term debt and Revolving Credit Obligations as of
such date and all accrued interest as of such date.
1.2 Computation of Time Periods. In this Agreement, in the
---------------------------
computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including" and the
words "to" and "until" each mean "to but excluding". Periods of days
referred to in this Agreement shall be counted in calendar days unless
Business Days are expressly prescribed. Any period determined
hereunder by reference to a month or months or year or years shall end
on the day in the relevant calendar month in the relevant year, if
applicable, immediately preceding the date numerically corresponding
to the first day of such period, provided that if such period
--------
commences on the last day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month during
which such period is to end), such period shall, unless otherwise
expressly required by the other provisions of this Agreement, end on
the last day of the calendar month.
1.3 Accounting Terms. Subject to Section 15.4, for purposes of
---------------- ------------
this Agreement, all accounting terms not otherwise defined herein
shall have the meanings assigned to them in conformity with GAAP.
1.4 Other Terms. All other terms contained in this Agreement
-----------
shall, unless the context indicates otherwise, have the meanings
assigned to such terms by the Uniform Commercial Code to the extent
the same are defined therein.
ARTICLE II
AMOUNTS AND TERMS OF LOANS
2.1 Term Loans. (a) Amount of Term Loans. Subject to the terms
---------- --------------------
and conditions set forth in this Agreement, each Lender on the Closing
Date hereby severally and not jointly agrees to make on the Closing
Date, a term loan, in Dollars, to the Borrower in an amount equal to
such Lender's Term Loan Commitment (each individually, a "Term Loan"
and, collectively, the "Term Loans"). All Term Loans shall be made by
the Lenders on the Closing Date simultaneously and proportionately to
their respective Pro Rata Shares, it being understood that no Lender
shall be responsible for any failure by any other Lender to perform
its obligation to make any Term Loan hereunder nor shall the Term Loan
Commitment of any Lender be increased or decreased as a result of any
such failure.
(b) Notice of Borrowing. The Borrower shall deliver to the
-------------------
Agent a Notice of Borrowing with respect to the Term Loans, signed by
it, on the Closing Date. Such Notice of Borrowing shall specify (i)
the aggregate amount of the Term Loans and (ii) instructions for the
disbursement of the proceeds of the Term Loans. The Term Loans shall
initially be Reference Rate Loans and thereafter may be continued as
Reference Rate Loans or converted into Eurodollar Rate Loans in the
manner provided in Section 5.1(c) and subject to the conditions and
--------------
limitations therein set forth and set forth in Section 5.2. Any Notice
-----------
of Borrowing given pursuant to this Section 2.1(b) shall be
--------------
irrevocable.
(c) Making of Term Loans. Promptly after receipt of the
--------------------
Notice of Borrowing under Section 2.1(b) in respect of the Term Loans,
--------------
the Agent shall notify each Lender by facsimile transmission, or other
similar form of transmission, of the proposed Borrowing. Each Lender
shall deposit an amount equal to its Pro Rata Share of the Term Loans
with the Agent at its office in Los Angeles, California, in
immediately available funds, on the Closing Date. Subject to the
fulfillment of the conditions precedent set forth in Section 6.1, the
-----------
Agent shall make the proceeds of such amounts received by it available
to the Borrower at the Agent's office in Los Angeles, California on
the Closing Date and shall disburse such proceeds in accordance with
the Borrower's disbursement instructions set forth in such Notice of
Borrowing. The failure of any Lender to deposit the amount described
above with the Agent on the Closing Date shall not relieve any other
Lender of its obligations hereunder to make its Term Loan on the
Closing Date. In the event the conditions precedent set forth in
Section 6.1 are not fulfilled or duly waived as of the Closing Date,
- -----------
the Agent shall promptly return, by wire transfer of immediately
available funds, the amount deposited by each Lender to such Lender.
(d) Repayment of the Term Loans. (i) The Term Loans shall
---------------------------
be repayable in twenty-two (22) consecutive quarterly installments of
$2,386,364 each, due on the last day of each fiscal quarter of the
Borrower, commencing on May 31, 1998, with a final payment on the
sixth anniversary of the Closing Date, provided that all Obligations
--------
with respect to Term Loans are paid in full on or before the Term Loan
Termination Date, and the Term Loan Commitments shall be permanently
reduced by the amount of each installment on the date payment thereof
is required to be made hereunder.
(ii) In addition to the scheduled payments on the
Term Loans, the Borrower may make voluntary prepayments as and when
described in Section 4.1(a)(i) and shall make the mandatory
-----------------
prepayments required in Section 4.1(b), for credit against such
--------------
scheduled payments on the Term Loans pursuant to the provisions of
Section 4.1(a)(ii) or Section 4.1(b)(vi), as applicable.
- ------------------ ------------------
2.2 Revolving Credit Facility. (a) Availability. Subject to the
------------------------- ------------
terms and conditions set forth in this Agreement, each Lender hereby
severally and not jointly agrees to make revolving loans, in Dollars
(each individually, a "Revolving Loan" and, collectively, the
"Revolving Loans") to the Borrower from time to time during the period
from the Closing Date to the Business Day next preceding the Revolving
Credit Termination Date, in an amount not to exceed such Lender's Pro
Rata Share of the Revolving Credit Availability at such time. All
Revolving Loans comprising the same Borrowing under this Agreement
shall be made by the Lenders simultaneously and proportionately to
their then respective Pro Rata Shares, it being understood that no
Lender shall be responsible for any failure by any other Lender to
perform its obligation to make a Revolving Loan hereunder nor shall
the Revolving Credit Commitment of any Lender be increased or
decreased as a result of any such failure. Subject to the provisions
of this Agreement, the Borrower may repay any outstanding Revolving
Loan on any day which is a Business Day and any amounts so repaid may
be reborrowed, up to the amount available under this Section 2.2(a) at
--------------
the time of such Borrowing, until the Business Day next preceding the
Revolving Credit Termination Date; provided, however, the Borrower
-------- -------
shall, without notice or demand of any kind, immediately make such
repayments of the Revolving Loans to the extent necessary to reduce
the aggregate outstanding principal amount of the Revolving Loans to
an amount less than or equal to the difference between the then
Maximum Revolving Credit Amount and the Letter of Credit Obligations
as of such time. Each requested Borrowing of Revolving Loans funded on
any Funding Date for Revolving Loans shall be (i) if Reference Rate
Loans, in a principal amount of at least $250,000 and in integral
multiples of $250,000 in excess of that amount and (ii) if Eurodollar
Rate Loans, in a principal amount of at least $500,000 and in integral
multiples of $500,000 in excess of that amount.
(b) Notice of Borrowing. When the Borrower desires to
-------------------
borrow under this Section 2.2, it shall deliver to the Agent a Notice
-----------
of Borrowing, signed by it, (i) on the Closing Date, in the case of a
Borrowing of Revolving Loans on the Closing Date and (ii) no later
than 11:00 a.m. (Los Angeles time) (A) on the Business Day immediately
preceding the proposed Funding Date, in the case of a Borrowing of
Reference Rate Loans after the Closing Date and (B) at least three (3)
Business Days in advance of the proposed Funding Date, in the case of
a Borrowing of Eurodollar Rate Loans after the Closing Date. Such
Notice of Borrowing shall specify (i) the proposed Funding Date (which
shall be a Business Day), (ii) the amount of the proposed Borrowing,
(iii) the Revolving Credit Availability as of the date of such Notice
of Borrowing, (iv) whether the proposed Borrowing will be of Reference
Rate Loans or Eurodollar Rate Loans, (v) in the case of Eurodollar
Rate Loans, the requested Eurodollar Interest Period and (vi)
instructions for the disbursement of the proceeds of the proposed
Borrowing. The Revolving Loans made on the Closing Date shall
initially be Reference Rate Loans and thereafter may be continued as
Reference Rate Loans or converted into Eurodollar Rate Loans, in the
manner provided in Section 5.1(c) and subject to the conditions
--------------
therein set forth and in Section 5.2. In lieu of delivering such a
-----------
Notice of Borrowing (except with respect to a Borrowing of Revolving
Loans on the Closing Date), the Borrower may give the Agent telephonic
notice of any proposed Borrowing by the time required under this
Section 2.2(b), if the Borrower confirms such notice by delivery of
- --------------
the required Notice of Borrowing to the Agent by facsimile
transmission promptly, but in no event later than 5:00 p.m. (Los
Angeles time) on the same day, the original of which facsimile copy
shall be delivered to the Agent within three (3) days after the date
of such transmission. Any Notice of Borrowing (or telephonic notice in
lieu thereof) given pursuant to this Section 2.2(b) shall be
--------------
irrevocable.
(c) Making of Revolving Loans. (i) Promptly after receipt
-------------------------
of a Notice of Borrowing under Section 2.2(b) (or telephonic notice in
--------------
lieu thereof), the Agent shall notify each Lender by telex or
telecopy, or other similar form of transmission, of the proposed
Borrowing. Each Lender shall deposit an amount equal to its Pro Rata
Share of the amount requested by the Borrower to be made as Revolving
Loans with the Agent at its office in Los Angeles, California, in
immediately available funds, (A) on the Closing Date with respect to
the Borrowing of Revolving Loans on such date specified in the initial
Notice of Borrowing and (B) not later than 11:00 a.m. (Los Angeles
time) on any other Funding Date for Revolving Loans. Subject to the
fulfillment of the conditions precedent set forth in Section 6.1 or
-----------
Section 6.4, as applicable, the Agent shall make the proceeds of such
- -----------
amounts received by it available to the Borrower at the Agent's office
in Los Angeles, California on such Funding Date (or on the date
received if later than such Funding Date) and shall disburse such
proceeds in accordance with the Borrower's disbursement instructions
set forth in the applicable Notice of Borrowing. The failure of any
Lender to deposit the amount described above with the Agent on the
applicable Funding Date shall not relieve any other Lender of its
obligations hereunder to make its Revolving Loan on such Funding Date.
In the event the conditions precedent set forth in Section 6.1 or 6.4,
----------- ---
as applicable, are not fulfilled as of the proposed Funding Date for
any Borrowing, the Agent shall promptly return, by wire transfer of
immediately available funds, the amount deposited by each Lender to
such Lender.
(ii) Unless the Agent shall have been notified by
any Lender on the Business Day immediately preceding the applicable
Funding Date in respect of any Borrowing of Revolving Loans that such
Lender does not intend to fund its Revolving Loan requested to be made
on such Funding Date, the Agent may assume that such Lender has funded
its Revolving Loan and is depositing the proceeds thereof with the
Agent on the Funding Date therefor, and the Agent in its sole
discretion may, but shall not be obligated to, disburse a
corresponding amount to the Borrower on the applicable Funding Date.
If the Revolving Loan proceeds corresponding to that amount are
advanced to the Borrower by the Agent but are not in fact deposited
with the Agent by such Lender on or prior to the applicable Funding
Date, such Lender agrees to pay, and in addition the Borrower agrees
to repay, to the Agent forthwith on demand such corresponding amount,
together with interest thereon, for each day from the date such amount
is disbursed to or for the benefit of the Borrower until the date such
amount is paid or repaid to the Agent, (A) in the case of the
Borrower, at the interest rate applicable to such Borrowing and (B) in
the case of such Lender, at the Federal Funds Rate for the first three
(3) Business Days, and thereafter at the interest rate applicable to
such Borrowing. If such Lender shall pay to the Agent the
corresponding amount, the amount so paid shall constitute such
Lender's Revolving Loan, and if both such Lender and the Borrower
shall pay and repay such corresponding amount, the Agent shall
promptly pay to the Borrower such corresponding amount. This Section
-------
2.2(c)(ii) does not relieve any Lender of its obligation to make its
- ----------
Revolving Loan on any applicable Funding Date.
(d) Revolving Credit Termination Date. Unless earlier
---------------------------------
terminated in accordance with the provisions of Section 4.1, the
-----------
Revolving Credit Commitments shall terminate on the Revolving Credit
Termination Date. Each Lender's obligation to make Revolving Loans
shall terminate on the Business Day next preceding the Revolving
Credit Termination Date. All outstanding Revolving Credit Obligations
shall be paid in full (or, in the case of unmatured Letter of Credit
Obligations, provision for payment in cash shall be made to the
satisfaction of the Issuing Banks and the Requisite Lenders) (i) if
the Revolving Credit Commitments are terminated pursuant to Section
-------
4.1, on the Revolving Credit Termination Date and (ii) otherwise, on
- ---
the earlier to occur of (A) the fifth anniversary of the Closing Date,
or, if not a Business Day, the next preceding Business Day, and (B)
the date of acceleration of the Obligations pursuant to Section 12.2.
------------
(e) Maximum Revolving Credit Facility. Notwithstanding
---------------------------------
anything in this Agreement to the contrary, in no event shall the
aggregate Revolving Credit Obligations exceed the lesser of (i) the
Maximum Revolving Credit Amount and (ii) $25,000,000, such amount in
clause (ii) being reduced by the amount of each permanent reduction of
- -----------
the Revolving Credit Commitments made pursuant to Section 4.1(a)(iii).
-------------------
2.3 Acquisition Facility. (a) Availability. Subject to the terms
-------------------- ------------
and conditions set forth in this Agreement, each Lender hereby
severally and not jointly agrees to make revolving loans, in Dollars
(each individually, an "Acquisition Facility Revolving Loan" and,
collectively, the "Acquisition Facility Revolving Loans") to the
Borrower from time to time during the period from the Acquisition
Facility Closing Date to the Business Day next preceding the
Acquisition Facility Revolving Termination Date, in an amount not to
exceed such Lender's Pro Rata Share of the Acquisition Facility
Availability at such time; provided, however, that no Acquisition
--------
Facility Revolving Loans shall be made until the Term Loans have been
repaid in full. All Acquisition Facility Revolving Loans comprising
the same Borrowing under this Agreement shall be made by the Lenders
simultaneously and proportionately to their then respective Pro Rata
Shares, it being understood that no Lender shall be responsible for
any failure by any other Lender to perform its obligation to make an
Acquisition Facility Revolving Loan hereunder nor shall the
Acquisition Facility Commitment of any Lender be increased or
decreased as a result of any such failure. Subject to the provisions
of this Agreement, the Borrower may repay any outstanding Acquisition
Facility Revolving Loan on any day which is a Business Day and any
amounts so repaid may be reborrowed, up to the amount available under
this Section 2.3(a) at the time of such Borrowing, until the Business
--------------
Day next preceding the Acquisition Facility Revolving Termination
Date. Each requested Borrowing of Acquisition Facility Revolving Loans
funded on any Funding Date for Acquisition Facility Revolving Loans
shall be (i) if Reference Rate Loans, in a principal amount of at
least $500,000 and in integral multiples of $250,000 in excess of that
amount and (ii) if Eurodollar Rate Loans, in a principal amount of at
least $1,000,000 and in integral multiples of $500,000 in excess of
that amount.
(b) Notice of Borrowing. When the Borrower desires to borrow
-------------------
under this Section 2.3, it shall deliver to the Agent a Notice of
-----------
Borrowing, signed by it, (i) on the Acquisition Facility Closing Date,
in the case of a Borrowing of Acquisition Facility Revolving Loans on
the Acquisition Facility Closing Date and (ii) no later than 11:00
a.m. (Los Angeles time) (A) on the Business Day immediately preceding
the proposed Funding Date, in the case of a Borrowing of Reference
Rate Loans after the Acquisition Facility Closing Date and (B) at
least three (3) Business Days in advance of the proposed Funding Date,
in the case of a Borrowing of Eurodollar Rate Loans after the Closing
Date. Such Notice of Borrowing shall specify (i) the proposed Funding
Date (which shall be a Business Day), (ii) the amount of the proposed
Borrowing, (iii) the Acquisition Facility Availability as of the date
of such Notice of Borrowing, (iv) whether the proposed Borrowing will
be of Reference Rate Loans or Eurodollar Rate Loans, (v) in the case
of Eurodollar Rate Loans, the requested Eurodollar Interest Period and
(vi) instructions for the disbursement of the proceeds of the proposed
Borrowing. The Acquisition Facility Revolving Loans made on the
Acquisition Facility Closing Date shall initially be Reference Rate
Loans and thereafter may be continued as Reference Rate Loans or
converted into Eurodollar Rate Loans, in the manner provided in
Section 5.1(c) and subject to the conditions therein set forth and in
- --------------
Section 5.2. In lieu of delivering such a Notice of Borrowing (except
- -----------
with respect to a Borrowing of Acquisition Facility Revolving Loans on
the Acquisition Facility Closing Date), the Borrower may give the
Agent telephonic notice of any proposed Borrowing by the time required
under this Section 2.3(b), if the Borrower confirms such notice by
--------------
delivery of the required Notice of Borrowing to the Agent by facsimile
transmission promptly, but in no event later than 5:00 p.m. (Los
Angeles time) on the same day, the original of which facsimile copy
shall be delivered to the Agent within three (3) days after the date
of such transmission. Any Notice of Borrowing (or telephonic notice in
lieu thereof) given pursuant to this Section 2.3(b) shall be
--------------
irrevocable.
(c) Making of Acquisition Facility Revolving Loans. (i)
----------------------------------------------
Promptly after receipt of a Notice of Borrowing under Section 2.3(b)
--------------
(or telephonic notice in lieu thereof), the Agent shall notify each
Lender by telex or telecopy, or other similar form of transmission, of
the proposed Borrowing. Each Lender shall deposit an amount equal to
its Pro Rata Share of the amount requested by the Borrower to be made
as Acquisition Facility Revolving Loans with the Agent at its office
in Los Angeles, California, in immediately available funds, (A) on the
Acquisition Facility Closing Date with respect to the Borrowing of
Acquisition Facility Revolving Loans on such date specified in the
initial Notice of Borrowing and (B) not later than 11:00 a.m. (Los
Angeles time) on any other Funding Date for Acquisition Facility
Revolving Loans. Subject to the fulfillment of the conditions
precedent set forth in Section 6.3, and, on the Acquisition Facility
-----------
Closing Date, Section 6.2, the Agent shall make the proceeds of such
-----------
amounts received by it available at the Agent's office in Los Angeles,
California on such Funding Date (or on the date received if later than
such Funding Date) and shall disburse such proceeds in accordance with
the Borrower's disbursement instructions set forth in the applicable
Notice of Borrowing; provided, however, that such disbursement
-------- -------
instructions shall provide for the Agent to pay all such proceeds
directly to all parties entitled to receive payment from the Parent
Guarantor or Subsidiary thereof pursuant to the terms of the Permitted
Acquisition to be financed with the proceeds of the Acquisiion
Facility Loans requested in such Notice of Borrowing. The failure of
any Lender to deposit the amount described above with the Agent on the
applicable Funding Date shall not relieve any other Lender of its
obligations hereunder to make its Acquisition Facility Revolving Loan
on such Funding Date. In the event the conditions precedent set forth
in Section 6.2 and/or 6.3, as applicable, are not fulfilled as of the
----------- ---
proposed Funding Date for any Borrowing, the Agent shall promptly
return, by wire transfer of immediately available funds, the amount
deposited by each Lender to such Lender.
(ii) Unless the Agent shall have been notified by any Lender
on the Business Day immediately preceding the applicable Funding Date
in respect of any Borrowing of Acquisition Facility Revolving Loans
that such Lender does not intend to fund its Acquisition Facility
Revolving Loan requested to be made on such Funding Date, the Agent
may assume that such Lender has funded its Acquisition Facility
Revolving Loan and is depositing the proceeds thereof with the Agent
on the Funding Date therefor, and the Agent in its sole discretion
may, but shall not be obligated to, disburse a corresponding amount as
provided in Section 2.3(c)(i) on the applicable Funding Date. If the
-----------------
Acquisition Facility Revolving Loan proceeds corresponding to that
amount are advanced as provided in Section 2.3(c)(i) by the Agent but
-----------------
are not in fact deposited with the Agent by such Lender on or prior to
the applicable Funding Date, such Lender agrees to pay, and in
addition the Borrower agrees to repay, to the Agent forthwith on
demand such corresponding amount, together with interest thereon, for
each day from the date such amount is disbursed to or for the benefit
of the Borrower until the date such amount is paid or repaid to the
Agent, (A) in the case of the Borrower, at the interest rate
applicable to such Borrowing and (B) in the case of such Lender, at
the Federal Funds Rate for the first three (3) Business Days, and
thereafter at the interest rate applicable to such Borrowing. If such
Lender shall pay to the Agent the corresponding amount, the amount so
paid shall constitute such Lender's Acquisition Facility Revolving
Loan, and if both such Lender and the Borrower shall pay and repay
such corresponding amount, the Agent shall promptly pay to the
Borrower such corresponding amount. This Section 2.3(c)(ii) does not
------------------
relieve any Lender of its obligation to make its Acquisition Facility
Revolving Loan on any applicable Funding Date.
(d) Maximum Acquisition Facility. Notwithstanding anything
----------------------------
in this Agreement to the contrary, in no event shall the aggregate
principal amount of the Acquisition Facility Obligations exceed the
lesser of (i) the Maximum Acquisition Facility Amount and (ii)
$50,000,000, such amount in clause (ii) being reduced by the amount of
-----------
each permanent reduction of the Acquisition Facility Commitments made
pursuant to Section 4.1(a) and Section 4.1(b).
-------------- --------------
(e) Acquisition Facility Revolving Termination Date. Unless
-----------------------------------------------
earlier terminated in accordance with the provisions of Section 4.1,
-----------
the Acquisition Facility Commitments shall terminate on the
Acquisition Facility Revolving Termination Date. Each Lender's
obligation to make Acquisition Facility Revolving Loans shall
terminate on the Business Day next preceding the Acquisition Facility
Revolving Termination Date. All outstanding Acquisition Facility
Obligations as of the Acquisition Facility Revolving Termination Date
shall convert automatically as of such date to term loans
("Acquisition Facility Term Loans" and, collectively with the
Acquisition Facility Revolving Loans, the "Acquisition Facility
Loans").
(f) Repayment of the Acquisition Facility Term Loans. (i)
------------------------------------------------
The Acquisition Facility Term Loans shall be repayable in sixteen (16)
consecutive quarterly installments due on the last day of each
calendar quarter commencing on the last day of the first quarter in
which the Acquisition Facility Revolving Termination Date occurs, with
a final payment on the sixth anniversary of the Acquisition Facility
Closing Date, provided that all Obligations with respect to the
--------
Acquisition Facility Term Loans are paid in full on or before the
Acquisition Facility Termination Date, and the Acquisition Facility
Commitments shall be permanently reduced by the amount of each
installment on the date payment thereof is required to be made
hereunder. The amount of each quarterly installment shall be 6.25% of
the aggregate principal amount of Acquisition Facility Loans
outstanding on the Acquisition Facility Revolving Termination Date (as
such amount may be reduced from time to time by prepayments in
accordance with Section 4.1(a)(ii) or Section 4.1(b)(vi), as the case
------------------ ------------------
may be).
(ii) In addition to the scheduled payments on the
Acquisition Facility Loans, the Borrower may make voluntary
prepayments as and when described in Section 4.1(a)(i) and shall make
-----------------
the mandatory prepayments required in Section 4.1(b), for credit
--------------
against such scheduled payments on the Acquisition Facility Loans
pursuant to the provisions of Section 4.1(a)(i) or Section 4.1(b)(v),
---------------- -----------------
as applicable.
2.4 Authorized Officers and Agents. On the Closing Date the
------------------------------
Borrower shall deliver, and from time to time thereafter the Borrower
may deliver, to the Agent an Officer's Certificate setting forth the
names of the officers, employees and agents authorized to request
Loans and Letters of Credit and to request a conversion/continuation
of any Loan, in each instance containing a specimen signature of each
such officer, employee or agent. The officers, employees and agents so
authorized shall also be authorized to act for the Borrower in respect
of all other matters relating to the Loan Documents. The Agent,
Lenders, and Issuing Banks shall be entitled to rely conclusively on
such officer's, employee's, or agent's authority to request such Loan
or Letter of Credit or such conversion/continuation until the Agent,
Lenders and Issuing Banks receive written notice to the contrary. None
of the Agent, the Lenders, or the Issuing Banks shall have any duty to
verify the authenticity of the signature appearing on any such
Officer's Certificate, written Notice of Borrowing or Notice of
Conversion/Continuation, or any other document, and, with respect to
an oral request for such a Loan or Letter of Credit or such
conversion/continuation, the Agent shall have no duty to verify the
identity of any person representing himself or herself as one of the
officers, employees or agents authorized to make such request or
otherwise to act on behalf of the Borrower. None of the Agent, any
Lender or any Issuing Bank shall incur any liability to the Borrower
or any other Person in acting upon any telephonic or facsimile notice
referred to above which the Agent, such Lender, or such Issuing Bank
believes to have been given by a duly authorized officer or other
person authorized to borrow on behalf of the Borrower.
2.5 Use of Proceeds of Loans. The proceeds of the Term Loans
------------------------
shall be used to repay in full the Refinanced Indebtedness and the
Transactions Costs. The proceeds of the Revolving Loans shall be used
for working capital in the ordinary course of the respective
businesses of the Parent Guarantor and its Subsidiaries, or for other
lawful general corporate purposes. The proceeds of the Acquisition
Facility Loans shall be used to finance acquisitions with respect to
which the conditions precedent set forth in Section 6.3 have been
-----------
satisfied. No proceeds of any of the Loans shall be applied to the
repayment or prepayment of the 9.5% Cumulative Convertible Debentures
issued by the Parent Guarantor.
2.6 Guaranty of Parent Guarantor. The Parent Guarantor
----------------------------
unconditionally guarantees for the benefit of the Agent and each
Lender and Issuing Bank the full and prompt payment when due, whether
at maturity or earlier, by reason of acceleration or otherwise, and at
all times thereafter, of all of the Obligations (including, without
limitation, interest accruing following the filing of a bankruptcy
petition by or against the Borrower, at the then applicable rate
specified in the Credit Agreement, whether or not such interest is
allowed as a claim in bankruptcy), pursuant to the terms and
conditions set forth in EXHIBIT G attached hereto and by this
---------
reference incorporated herein.
ARTICLE III
LETTERS OF CREDIT
3.1 Letters of Credit. Subject to the terms and conditions
-----------------
set forth in this Agreement, each Issuing Bank hereby severally agrees
to issue for the account of the Borrower, or for the account of the
Parent Guarantor or any of its Subsidiaries if the Borrower is jointly
and severally liable for reimbursement of amounts drawn under such
Letter of Credit, one or more Letters of Credit, subject to the
following provisions:
(a) Types and Amounts. An Issuing Bank shall not have any
-----------------
obligation to issue, amend or extend, and shall not issue, amend or
extend, any Letter of Credit at any time:
(i) if the aggregate Letter of Credit Obligations with
respect to such Issuing Bank, after giving effect to the
issuance, amendment or extension of the Letter of Credit
requested hereunder, shall exceed any limit imposed by law or
regulation upon such Issuing Bank;
(ii) if the Issuing Bank receives written notice from the
Agent at or before 11:00 a.m. (Los Angeles time) on the date of
the proposed issuance, amendment or extension of such Letter of
Credit that (A) immediately after giving effect to the issuance,
amendment or extension of such Letter of Credit, (I) the Letter
of Credit Obligations at such time would exceed (a) $4,000,000 at
any time from the Closing Date until but not including the
Acquisition Facility Closing Date or (b) $6,000,000 thereafter,
or (II) the Revolving Credit Obligations at such time would
exceed the Maximum Revolving Credit Amount at such time, or (B)
one or more of the conditions precedent contained in Section 6.1,
------------
6.2 or 6.4, as applicable, would not on such date be satisfied,
--- ---
unless such conditions are thereafter satisfied and written
notice of such satisfaction is given to the Issuing Bank by the
Agent (and an Issuing Bank shall not otherwise be required to
determine that, or take notice whether, the conditions precedent
set forth in Section 6.1, 6.2 or 6.4, as applicable, have been
---------------- ---
satisfied);
(iii) which has an expiration date later than the earlier of
(A) the date one (1) year after the date of issuance (without
regard to any automatic renewal provisions thereof) or (B) the
Business Day next preceding the scheduled Revolving Credit
Termination Date; or
(iv) which is in a currency other than Dollars.
(b) Conditions. In addition to being subject to the
----------
satisfaction of the conditions precedent contained in Section 6.1, 6.2
----------------
and 6.4, as applicable, the obligation of an Issuing Bank to issue,
---
amend or extend any Letter of Credit is subject to the satisfaction in
full of the following conditions:
(i) if the Issuing Bank so requests, the Borrower or, in the
case of Letters of Credit issued for the account of the Parent
Guarantor or any of its Subsidiaries, the Borrower and such
Person shall have executed and delivered to such Issuing Bank and
the Agent a Letter of Credit Reimbursement Agreement and such
other documents and materials as may be required pursuant to the
terms thereof; and
(ii) the terms of the proposed Letter of Credit shall be
satisfactory to the Issuing Bank in its sole discretion.
(c) Issuance of Letters of Credit. (i) The Borrower shall
-----------------------------
give an Issuing Bank and the Agent written notice that it has selected
such Issuing Bank to issue a Letter of Credit not later than 11:00
a.m. (Los Angeles time) on the fifth (5th) Business Day preceding the
requested date for issuance thereof under this Agreement, or such
shorter notice as may be acceptable to such Issuing Bank and the
Agent. Such notice shall be irrevocable unless and until such request
is denied by the applicable Issuing Bank and shall specify (A) that
the requested Letter of Credit is either a Commercial Letter of Credit
or a Standby Letter of Credit, (B) that such Letter of Credit is
solely for the account of the Borrower or the name of the Parent
Guarantor or Subsidiary of the Parent Guarantor which is jointly and
severally applying for such Letter of Credit, (C) the stated amount of
the Letter of Credit requested, (D) the effective date (which shall be
a Business Day) of issuance of such Letter of Credit, (E) the date on
which such Letter of Credit is to expire (which shall be a Business
Day and no later than the Business Day immediately preceding the
scheduled Revolving Credit Termination Date), (F) the Person for whose
benefit such Letter of Credit is to be issued, (G) other relevant
terms of such Letter of Credit, (H) the Revolving Credit Availability
at such time, and (I) the amount of the then outstanding Letter of
Credit Obligations. Such Issuing Bank shall notify the Agent
immediately upon receipt of a written notice from the Borrower
requesting that a Letter of Credit be issued, or that an existing
Letter of Credit be extended or amended and, upon the Agent's request
therefor, send a copy of such notice to the Agent.
(ii) The Issuing Bank shall give (A) the Agent written
notice, or telephonic notice confirmed promptly thereafter in writing,
of the issuance, amendment or extension of a Letter of Credit and (B)
promptly after issuance thereof, provide the Agent with a copy of each
Letter of Credit issued and each amendment thereto.
(d) Reimbursement Obligations; Duties of Issuing Banks. (i)
--------------------------------------------------
Notwithstanding any provisions to the contrary in any Letter of Credit
Reimbursement Agreement:
(A) the Borrower shall reimburse, or cause the Parent
Guarantor or Subsidiary of the Parent Guarantor for whose account
a Letter of Credit is issued to reimburse, the Issuing Bank for
amounts drawn under such Letter of Credit, in Dollars, no later
than the date (the "Reimbursement Date") which is the earlier of
(I) the time specified in the applicable Letter of Credit
Reimbursement Agreement and (II) one (1) Business Day after the
Borrower receives written notice from the Issuing Bank that
payment has been made under such Letter of Credit by the Issuing
Bank; and
(B) all Reimbursement Obligations with respect to any Letter
of Credit shall bear interest at the rate applicable to Base Rate
Loans in accordance with Section 5.1(a) from the date of the
--------------
relevant drawing under such Letter of Credit until the
Reimbursement Date and thereafter at the rate applicable to Base
Rate Loans in accordance with Section 5.1(d).
--------------
(ii) The Issuing Bank shall give the Agent written notice,
or telephonic notice confirmed promptly thereafter in writing, of all
drawings under a Letter of Credit and the payment (or the failure to
pay when due) by the Borrower or the Parent Guarantor's applicable
Subsidiary on account of a Reimbursement Obligation (which notice the
Agent shall promptly transmit by telegram, telex, telecopy or similar
transmission to each Lender).
(iii) No action taken or omitted in good faith by an Issuing
Bank under or in connection with any Letter of Credit shall put such
Issuing Bank under any resulting liability to any Lender, the Parent
Guarantor or any of its Subsidiaries or, so long as it is not issued
in violation of Section 3.1(a), relieve any Lender of its obligations
--------------
hereunder to such Issuing Bank. Solely as between the Issuing Banks
and the Lenders, in determining whether to pay under any Letter of
Credit, the respective Issuing Bank shall have no obligation to the
Lenders other than to confirm that any documents required to be
delivered under a respective Letter of Credit appear to have been
delivered and that they appear on their face to comply with the
requirements of such Letter of Credit.
(e) Participations. (i) Immediately upon issuance by an
--------------
Issuing Bank of any Letter of Credit in accordance with the procedures
set forth in this Section 3.1 and immediately upon conversion of a
-----------
letter of credit of an Issuing Bank to a Letter of Credit pursuant to
Section 3.2, each Lender shall be deemed to have irrevocably and
- -----------
unconditionally purchased and received from that Issuing Bank, without
recourse or warranty, an undivided interest and participation in such
Letter of Credit to the extent of such Lender's Pro Rata Share,
including, without limitation, all obligations of the Borrower with
respect thereto (other than amounts owing to the Issuing Bank under
Section 3.1(g)) and any security therefor and guaranty pertaining
- --------------
thereto.
(ii) If any Issuing Bank makes any payment under any
Letter of Credit and the Borrower or the Parent Guarantor or
Subsidiary of the Parent Guarantor for whose account the Letter of
Credit was issued does not repay such amount to the Issuing Bank on
the Reimbursement Date, the Issuing Bank shall promptly notify the
Agent, which shall promptly notify each Lender, and each Lender shall
promptly and unconditionally pay to the Agent for the account of such
Issuing Bank, in immediately available funds, the amount of such
Lender's Pro Rata Share of such payment (net of that portion of such
payment, if any, made by such Lender in its capacity as an Issuing
Bank), and the Agent shall promptly pay to the Issuing Bank such
amounts received by it, and any other amounts received by the Agent
for the Issuing Bank's account, pursuant to this Section 3.1(e). All
--------------
amounts so paid to the Issuing Bank shall be deemed to constitute
Revolving Loans. If a Lender does not make its Pro Rata Share of the
amount of such payment available to the Agent, such Lender agrees to
pay to the Agent for the account of the Issuing Bank, forthwith on
demand, such amount together with interest thereon, for the first
three (3) Business Days after the date such payment was first due at
the Federal Funds Rate, and thereafter at the interest rate then
applicable to Base Rate Loans in accordance with Section 5.1(a). The
--------------
failure of any Lender to make available to the Agent for the account
of an Issuing Bank its Pro Rata Share of any such payment shall
neither relieve any other Lender of its obligation hereunder to make
available to the Agent for the account of such Issuing Bank such other
Lender's Pro Rata Share of any payment on the date such payment is to
be made nor increase the obligation of any other Lender to make such
payment to the Agent.
(iii) Whenever an Issuing Bank receives a payment on account
of a Reimbursement Obligation, including any interest thereon, as to
which the Agent has previously received payments from any Lender for
the account of such Issuing Bank pursuant to this Section 3.1(e), such
--------------
Issuing Bank shall promptly pay to the Agent and the Agent shall
promptly pay to such Lender an amount equal to such Lender's Pro Rata
Share thereof. Each such payment shall be made by such Issuing Bank or
the Agent, as the case may be, on the Business Day on which such
Person receives the funds paid to such Person pursuant to the
preceding sentence, if received prior to 11:00 a.m. (Los Angeles time)
on such Business Day, and otherwise on the next succeeding Business
Day.
(iv) Upon the request of any Lender, an Issuing Bank shall
furnish such Lender copies of any Letter of Credit or Letter of Credit
Reimbursement Agreement to which such Issuing Bank is party and such
other documentation as reasonably may be requested by such Lender.
(v) The obligations of a Lender to make payments to the
Agent for the account of any Issuing Bank with respect to a Letter of
Credit shall be irrevocable, shall not be subject to any qualification
or exception whatsoever except willful misconduct or gross negligence
of such Issuing Bank, and shall be honored in accordance with this
Article III (irrespective of the satisfaction of the conditions
- -----------
described in Sections 6.1 and 6.4, as applicable) under all
------------ ---
circumstances, including, without limitation, any of the following
circumstances:
(A) any lack of validity or enforceability of this Agreement
or any of the other Loan Documents;
(B) the existence of any claim, setoff, defense or other
right which the Borrower, the Parent Guarantor or any Subsidiary
thereof may have at any time against a beneficiary named in a
Letter of Credit or any transferee of a beneficiary named in a
Letter of Credit (or any Person for whom any such transferee may
be acting), the Agent, the Issuing Bank, any Lender, or any
other Person, whether in connection with this Agreement, any
Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transactions
between the account party and beneficiary named in any Letter of
Credit);
(C) any draft, certificate or any other document presented
under the Letter of Credit having been determined to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
(D) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan
Documents;
(E) any failure by that Issuing Bank to make any reports
required pursuant to Section 3.1(h) or the inaccuracy of any such
--------------
report; or
(F) the occurrence of any Event of Default or Potential
Event of Default.
(f) Payment of Reimbursement Obligations. (i) The Borrower
------------------------------------
unconditionally agrees to pay, or cause the Parent Guarantor or
Subsidiary of the Parent Guarantor for whose account a Letter of
Credit is issued to pay, to each Issuing Bank, in Dollars, the amount
of all Reimbursement Obligations, interest and other amounts payable
to such Issuing Bank under or in connection with the Letters of Credit
when such amounts are due and payable, irrespective of any claim,
setoff, defense or other right which the Borrower may have at any time
against any Issuing Bank or any other Person.
(ii) In the event any payment by the Borrower, the Parent
Guarantor or Subsidiary of the Parent Guarantor received by an Issuing
Bank with respect to a Letter of Credit and distributed by the Agent
to the Lenders on account of their participations is thereafter set
aside, avoided or recovered from such Issuing Bank in connection with
any receivership, liquidation or bankruptcy proceeding, each Lender
which received such distribution shall, upon demand by such Issuing
Bank, contribute such Lender's Pro Rata Share of the amount set aside,
avoided or recovered together with interest at the rate required to be
paid by such Issuing Bank upon the amount required to be repaid by it.
(g) Issuing Bank Charges. The Borrower shall pay, or cause
--------------------
the Parent Guarantor or Subsidiary of the Parent Guarantor for whose
account a Letter of Credit is issued to pay, to each Issuing Bank,
solely for its own account, the standard charges assessed by such
Issuing Bank in connection with the issuance, administration,
amendment and payment or cancellation of Letters of Credit and such
compensation in respect of such Letters of Credit for the Borrower's,
the Parent Guarantor's, or such Subsidiary's account, as applicable,
as may be agreed upon by the Borrower and such Issuing Bank from time
to time.
(h) Issuing Bank Reporting Requirements. Each Issuing Bank
-----------------------------------
shall, no later than the tenth (10th) Business Day following the last
day of each calendar month, provide to the Agent, the Borrower, and
each Lender separate schedules for Commercial Letters of Credit and
Standby Letters of Credit issued as Letters of Credit, in form and
substance reasonably satisfactory to the Agent, setting forth the
aggregate Letter of Credit Obligations outstanding to it at the end of
each month and, to the extent not otherwise provided in accordance
with the provisions of Section 3.1(c)(ii), any information requested
------------------
by the Agent or the Borrower relating to the date of issue, account
party, amount, expiration date and reference number of each Letter of
Credit issued by it.
(i) Indemnification; Exoneration. (i) In addition to all
----------------------------
other amounts payable to an Issuing Bank, the Borrower hereby agrees
to defend, indemnify, and save the Agent, each Issuing Bank and each
Lender harmless from and against any and all claims, demands,
liabilities, penalties, damages, losses (other than loss of profits),
costs, charges and expenses (including reasonable attorneys' fees but
excluding taxes) which the Agent, such Issuing Bank or such Lender may
incur or be subject to as a consequence, direct or indirect, of (A)
the issuance of any Letter of Credit other than as a result of the
gross negligence or willful misconduct of the Issuing Bank, as
determined by a court of competent jurisdiction, or (B) the failure of
the Issuing Bank issuing a Letter of Credit to honor a drawing under
such 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.
(ii) As between the Borrower and the Parent Guarantor or any
of its Subsidiaries for whose account a Letter of Credit is issued on
the one hand and the Agent, the Lenders and the Issuing Banks on the
other hand, the Borrower assumes all risks of the acts and omissions
of, or misuse of Letters of Credit by, the respective beneficiaries of
the Letters of Credit. In furtherance and not in limitation of the
foregoing, subject to the provisions of the Letter of Credit
Reimbursement Agreements, the Issuing Banks and the Lenders shall not
be responsible for: (A) the form, validity, legality, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any
party in connection with the application for and issuance of the
Letters of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (B)
the validity, legality or sufficiency of any instrument transferring
or assigning or purporting to transfer or assign a Letter of Credit or
the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason; (C)
failure of the beneficiary of a Letter of Credit to comply duly with
conditions required in order to draw upon such Letter of Credit; (D)
errors, omissions, interruptions or delays in transmission or delivery
of any messages, by mail, cable, telegraph, telex or otherwise,
whether or not they be in cipher; (E) errors in interpretation of
technical terms; (F) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under
any Letter of Credit or of the proceeds thereof; (G) the
misapplication by the beneficiary of a Letter of Credit of the
proceeds of any drawing under such Letter of Credit; and (H) any
consequences arising from causes beyond the control of the Agent, the
Issuing Banks or the Lenders.
3.2 [Reserved].
--------
3.3 Obligations Several. The obligations of each Issuing
-------------------
Bank and each Lender under this Article III are several and not joint,
-----------
and no Issuing Bank or Lender shall be responsible for the obligation
to issue Letters of Credit or participation obligation hereunder,
respectively, of any other Issuing Bank or Lender.
ARTICLE IV
PAYMENTS AND PREPAYMENTS
4.1 Prepayments; Reductions in Commitments.
(a) Voluntary Prepayments/Reductions. (i) Notice. The
-------------------------------- ------
Borrower may, upon at least three (3) Business Days' prior written
notice to the Agent (which the Agent shall promptly transmit to each
Lender), at any time and from time to time, prepay the Term Loans or
Acquisition Facility Term Loans which are Reference Rate Loans, in
whole or in part. Term Loans or Acquisition Facility Term Loans which
are Eurodollar Rate Loans may be prepaid in whole or in part upon at
least five (5) Business Days' prior written notice to the Agent (which
the Agent shall promptly transmit to each Lender), (A) on the
expiration date of the then applicable Eurodollar Interest Period
therefor, and (B) on any other date upon payment of the amounts
described in Section 5.2(f). Any notice of prepayment given to the
--------------
Agent under this Section 4.1(a)(i) shall specify the date (which shall
-----------------
be a Business Day) of prepayment, the aggregate principal amount of
the prepayment and any allocation of such amount among Reference Rate
Loans and Eurodollar Rate Loans in accordance with Section 4.1(a)(ii).
------------------
When notice of prepayment is delivered as provided herein, the
principal amount of the Term Loans or Acquisition Facility Term Loans,
as the case may be, specified in the notice shall become due and
payable on the prepayment date specified in such notice. The Borrower
may repay Revolving Loans and Acquisition Facility Revolving Loans
without prior written notice to the Agent or any Lender, at any time
and from time to time.
(ii) Amount; Application; Term Loan Commitment or
--------------------------------------------
Acquisition Facility Commitment Reduction. Unless the aggregate
- -----------------------------------------
outstanding principal balance of the Term Loans or the Acquisition
Facility Term Loans is to be prepaid in full, voluntary prepayments of
the Term Loans or the Acquisition Facility Term Loans shall be in an
aggregate minimum amount of $1,000,000 and integral multiples of
$500,000 in excess of that amount. Each voluntary prepayment of the
Term Loans or the Acquisition Facility Term Loans shall be applied to
the unpaid installments of such Loans in the inverse order of
maturity, shall be allocated first to Loans which are Reference Rate
Loans until paid in full and then to Loans which are Eurodollar Rate
Loans, and shall permanently reduce the Term Loan Commitment or
Acquisition Facility Commitment, as the case may be, of each Lender
proportionately in accordance with its Pro Rata Share.
(iii) Voluntary Revolving Credit Commitment
-------------------------------------
or Acquisition Facility Commitment Reductions. The Borrower, upon at
- ---------------------------------------------
least three (3) Business Days' prior written notice to the Agent
(which the Agent shall promptly transmit to each Lender), shall have
the right, at any time and from time to time, to terminate in whole or
permanently reduce in part the Revolving Credit Commitments or, prior
to the Acquisition Facility Revolving Termination Date, the
Acquisition Facility Commitments; provided that the Borrower shall
-------- ----
have made whatever payment may be required to reduce the Revolving
Credit Obligations or the Acquisition Facility Obligations, as the
case may be, to an amount less than or equal to the Revolving Credit
Commitments or Acquisition Facility Commitments, as the case may be,
as reduced or terminated. Any partial reduction of the Revolving
Credit Commitments or Acquisition Facility Commitments pursuant to
this Section 4.1(a)(iii) shall be in an aggregate minimum amount of
-------------------
$500,000 and integral multiples of $500,000 in excess of that amount,
and shall reduce the Revolving Credit Commitment or Acquisition
Facility Commitment, as the case may be, of each Lender
proportionately in accordance with its Pro Rata Share. Any notice of
termination or reduction given to the Agent under this Section
-------
4.1(a)(iii) shall specify the date (which shall be a Business Day) of
- -----------
such termination or reduction and, with respect to a partial
reduction, the aggregate principal amount thereof. When notice of
termination or reduction is delivered as provided herein, the
principal amount of the Revolving Loans or Acquisition Facility
Revolving Loans, as the case may be, in excess of the Revolving Credit
Commitments or Acquisition Facility Commitments, respectively, as
reduced by the amount specified in the notice, shall become due and
payable on the date specified in such notice.
(iv) Prepayment Fee. The prepayments and payments in
--------------
respect of reductions and terminations described in clauses (i) and
-----------
(iii) of this Section 4.1(a) may be made without premium or penalty
- ----- --------------
(except as provided in Section 14.5).
-------------
(b) Mandatory Prepayments/Reductions.
--------------------------------
(i) Net Cash Proceeds of Sale. Immediately upon the
-------------------------
Borrower's, the Parent Guarantor's or any of its Subsidiaries' receipt
of any Net Cash Proceeds of Sale, the Borrower shall make or cause to
be made a mandatory prepayment of the Term Loans or the Acquisition
Facility Term Loans, as the case may be, in an amount equal to eighty
percent (80%) of such Net Cash Proceeds of Sale.
(ii) Excess Cash Flow. If the Senior Leverage Ratio
----------------
as of the last day of a Cash Flow Period is greater than 2.50, then
within ninety (90) days after the end of such Cash Flow Period, the
Borrower shall (a) calculate Excess Cash Flow for such Cash Flow
Period and (b) make a mandatory prepayment of the Term Loans or the
Acquisition Facility Term Loans, as the case may be, in an amount
equal to fifty percent (50%) of such Excess Cash Flow.
(iii) Net Cash Proceeds of Issuance of Equity
---------------------------------------
Securities or Indebtedness. Immediately upon the Borrower's, the
- --------------------------
Parent Guarantor's or any of its Subsidiaries' receipt of any Net Cash
Proceeds of Issuance of Equity Securities or Indebtedness, including,
without limitation the net proceeds of the issuance of the Senior
Subordinated Notes, the Borrower shall make or cause to be made a
mandatory prepayment of the Term Loans or the Acquisition Facility
Term Loans, as the case may be, in an amount equal to fifty percent
(50%) of the balance of such Net Cash Proceeds of Issuance of Equity
Securities or Indebtedness, provided that (A) the net proceeds of the
--------
issuance of the Senior Subordinated Notes shall be used to repay the
Term Loans, and all unpaid interest accrued thereon and all fees and
expenses payable in connection therewith, in full, (B) the Borrower or
Parent Guarantor may retain more than fifty percent (50%) of the
balance of any Net Proceeds of Issuance of Equity Securities or
Indebtedness to the extent that such net proceeds are applied to
finance a Permitted Acquisition within ninety (90) days after the
issuance of the equity Securities or Indebtedness and (C) in addition
to any other net proceeds permitted to be retained by the Parent
Guarantor, the Parent Guarantor may retain the net proceeds of
issuance of its Capital Stock in an aggregate amount not to exceed
$250,000 in any Fiscal Year.
(iv) No Waiver or Consent. Nothing in this Section
-------------------- -------
4.1(b) shall be construed to constitute the Lenders' consent to any
- ------
transaction referenced in clauses (i) and (iii) above which is not
----------- -----
expressly permitted by Article X.
---------
(v) Notice. The Borrower shall give the Agent prior
------
written notice or telephonic notice promptly confirmed in writing
(each of which the Agent shall promptly transmit to each Lender), when
a Designated Prepayment will be made (which date of prepayment shall
be no later than the date on which such Designated Payment becomes due
and payable pursuant to this Section 4.1(b)).
---------------
(vi) Application of Designated Prepayments.
-------------------------------------
Designated Prepayments shall be allocated and applied to the unpaid
installments of the Term Loans (during the Term Loan Period) or the
Acquisition Facility Term Loans (during the Acquisition Facility
Period) in the inverse order of maturity, with each application being
made first to the Loans which are Reference Rate Loans until paid in
full and then to Loans which are Eurodollar Rate Loans (with amounts
applicable to Eurodollar Rate Loans to be applied, to the extent
practicable, in a manner which minimizes the amount of additional
compensation required to be paid by the Borrower under Section 14.5,
------------
provided that such amounts shall be applied no later than thirty days
- --------
after receipt by the Agent thereof) and shall permanently reduce the
Term Loan Commitment or Acquisition Facility Commitment, as the case
may be, of each Lender proportionately in accordance with its Pro Rata
Share as of the date of such application.
4.2 Payments. (a) Manner and Time of Payment. All payments of
-------- --------------------------
principal of and interest on the Loans and Reimbursement Obligations
and other Obligations (including, without limitation, fees and
expenses) which are payable to the Agent, the Lenders or any Issuing
Bank shall be made without condition or reservation of right, and in
immediately available funds, delivered to the Agent (or, in the case
of Reimbursement Obligations, to the pertinent Issuing Bank) not later
than 11:00 a.m. (Los Angeles time) on the date and at the place due,
to such account of the Agent (or such Issuing Bank) as it may
designate, for the account of the Agent, the Lenders or such Issuing
Bank, as the case may be; and funds received by the Agent, including,
without limitation, funds in respect of any Revolving Loans to be
repaid or prepaid on that date, not later than 11:00 a.m. (Los Angeles
time) on any given Business Day shall be credited against payment to
be made that day and funds received by the Agent after that time shall
be deemed to have been paid on the next succeeding Business Day.
Payments actually received by the Agent for the account of the Lenders
or the Issuing Banks, or any of them, shall be paid to them by the
Agent promptly after receipt thereof.
(b) Apportionment of Payments. (i) Subject to the
-------------------------
provisions of Section 4.1 and Section 4.2(b)(v), all payments of
----------- -----------------
principal and interest in respect of outstanding Loans, all payments
in respect of Reimbursement Obligations, all payments of fees and all
other payments in respect of any other Obligations, shall be allocated
among such of the Lenders and Issuing Banks as are entitled thereto,
in proportion to their respective Pro Rata Shares or otherwise as
provided herein. Except as provided in Section 4.2(b)(ii) with respect
------------------
to payments and proceeds of Collateral received after the occurrence
of an Event of Default, all such payments and any other amounts
received by the Agent from or for the benefit of the Borrower shall be
applied FIRST, to pay principal of and interest on any portion of the
-----
Revolving Loans which the Agent may have advanced on behalf of any
Lender other than Union Bank for which the Agent has not then been
reimbursed by such Lender or the Borrower, SECOND, to pay principal of
------
and interest on any Protective Advance for which the Agent has not
then been paid by the Borrower or reimbursed by the Lenders, THIRD, to
-----
pay the principal of the Loans then due and payable in the order
described hereinbelow and interest on such Loans then due and payable,
ratably, based on the then outstanding balances of the such Loans,
FOURTH, to pay all other Obligations then due and payable, ratably,
- ------
and FIFTH, as the Borrower so designates. All such principal and
-----
interest payments in respect of Loans shall be applied FIRST, to the
-----
Term Loans (during the Term Loan Period) or Acquisition Facility Loans
(during the Acquisition Facility Period), in each case to installments
and accrued interest then due and payable, ratably, in accordance with
the Lenders' respective Pro Rata Shares and SECOND, to the Revolving
------
Loans and accrued interest thereon; in either case, FIRST, to repay
-----
outstanding Reference Rate Loans and THEN to repay outstanding
----
Eurodollar Rate Loans with those Eurodollar Rate Loans which have
earlier expiring Eurodollar Interest Periods being repaid prior to
those which have later expiring Eurodollar Interest Periods.
(ii) After the occurrence of an Event of Default and
while the same is continuing, the Agent shall apply all payments in
respect of any Obligations and all proceeds of Collateral in the
following order:
(A) FIRST, to pay principal of and interest on any portion
of the Revolving Loans which the Agent may have advanced on
behalf of any Lender other than Union Bank for which the Agent
has not then been reimbursed by such Lender or the Borrower;
(B) SECOND, to pay principal of and interest on any
Protective Advance for which the Agent has not then been paid by
the Borrower or reimbursed by the Lenders;
(C) THIRD, to pay Obligations in respect of any fees,
expense reimbursements or indemnities then due to the
Agent;
(D) FOURTH, to pay Obligations in respect of any fees,
expense reimbursements or indemnities then due to the Lenders
and the Issuing Banks;
(E) FIFTH, to pay principal of and interest on Letter of
Credit Obligations (or, to the extent such Obligations are
contingent, deposited in the Cash Collateral Account to provide
Cash Collateral in respect of such Obligations);
(F) SIXTH, to pay Obligations in respect of any fees,
expense reimbursements or indemnities then due to the Lenders
and the Issuing Banks;
(G) SEVENTH, to pay interest due in respect of the Loans,
ratably, in accordance with the Lenders' respective Pro Rata
Shares;
(H) EIGHTH, to the ratable payment or prepayment of
principal outstanding on all Loans with application to
installments on the Term Loans (during the Term Loan Period) and
Acquisition Facility Term Loans (during the Acquisition Facility
Period) in the inverse order of maturity;
(I) NINTH, to the ratable payment of Hedge
Agreements to which any of the Lenders or any
Affiliate of any of the Lenders is a party; and
(J) TENTH, to the ratable payment of all other
Obligations.
The order of priority set forth in this Section 4.2(b) and the related
--------------
provisions of this Agreement are set forth solely to determine the
rights and priorities of the Agent, the Lenders, the Issuing Banks and
other Secured Parties as among themselves.
(iii) The Agent, in its sole discretion subject only
to the terms of this Section 4.2(b)(iii), may, and to the extent
-------------------
necessary to avoid an Event of Default or Potential Event of Default
shall, pay from the proceeds of Revolving Loans made to the Borrower
hereunder, whether made following a request by the Borrower pursuant
to Section 2.2 or a deemed request as provided in this Section
----------- -------
4.2(b)(iii), all amounts payable by the Borrower hereunder, including,
- -----------
without limitation, amounts payable with respect to payments of
principal, interest, Reimbursement Obligations and fees and all
reimbursements for expenses pursuant to Section 15.2; provided,
------------ --------
however, that unless the Borrower expressly consents to any earlier
- -------
application of (or deemed request for) Revolving Loans to pay expenses
pursuant to Section 15.2(a), the proceeds of Revolving Loans shall not
---------------
be applied by the Agent thereto, and Revolving Loans shall not be
deemed requested pursuant to this Section 4.2(b)(iii) therefor, until
-------------------
the fifth Business Day after delivery to the Borrower of a written
invoice describing the expenses for which reimbursement is required.
The Borrower hereby irrevocably authorizes the Lenders to make
Revolving Loans, which Revolving Loans shall be Reference Rate Loans,
in each case, upon notice from the Agent as described in the following
sentence for the purpose of paying principal, interest, Reimbursement
Obligations and fees due from the Borrower, reimbursing expenses
pursuant to Section 15.2 and paying any and all other amounts due and
------------
payable by the Borrower hereunder or under the Notes, and agrees that
all such Revolving Loans so made shall be deemed to have been
requested by it pursuant to Section 2.2 as of the date of the
-----------
aforementioned notice. The Agent shall request Revolving Loans on
behalf of the Borrower as described in the preceding sentence by
notifying the Lenders by telecopy, telegram or other similar form of
transmission (which notice the Agent shall thereafter promptly
transmit to the Borrower), of the amount and Revolving Loan Funding
Date of the proposed Borrowing and that such Borrowing is being
requested on the Borrower's behalf pursuant to this Section
-------
4.2(b)(iii). The Agent shall request Revolving Loans pursuant to this
- -----------
Section 4.2(b)(iii) as necessary to avoid an Event of Default or
- -------------------
Potential Event of Default arising from the Borrower's failure to pay
any amounts payable by the Borrower hereunder. On the proposed Funding
Date for such Revolving Loan, the Lenders shall make the requested
Revolving Loans in accordance with the procedures and subject to the
conditions specified in Section 2.2.
-----------
(iv) Subject to Section 4.2(b)(v), the Agent shall
-----------------
promptly distribute to each Lender and Issuing Bank at its primary
address set forth on the appropriate signature page hereof or the
signature page to the Assignment and Acceptance by which it became a
Lender or Issuing Bank, or at such other address as a Lender, an
Issuing Bank or other Secured Party may request in writing, such funds
as such Person may be entitled to receive, subject to the provisions
of Article XIV; provided that the Agent shall under no circumstances
----------- -------- ----
be bound to inquire into or determine the validity, scope or priority
of any interest or entitlement of any Secured Party and may suspend
all payments or seek appropriate relief (including, without
limitation, instructions from the Requisite Lenders or an action in
the nature of interpleader) in the event of any doubt or dispute as to
any apportionment or distribution contemplated hereby.
(v) In the event that any Lender fails to fund its
Pro Rata Share of any Revolving Loan or Acquisition Facility Revolving
Loan requested by the Borrower which such Lender is obligated to fund
under the terms of this Agreement (the funded portion of such
Revolving Loan being hereinafter referred to as a "Non Pro Rata
Loan"), until the earlier of such Lender's cure of such failure and
the termination of the Revolving Credit Commitments or Acquisition
Facility Commitments, as applicable, the proceeds of all amounts
thereafter repaid to the Agent by the Borrower and otherwise required
to be applied to such Lender's share of all other Obligations pursuant
to the terms of this Agreement shall be advanced to the Borrower by
the Agent on behalf of such Lender to cure, in full or in part, such
failure by such Lender, but shall nevertheless be deemed to have been
paid to such Lender in satisfaction of such other Obligations.
Notwithstanding anything in this Agreement to the contrary:
(A) the foregoing provisions of this Section 4.2(b)(v)
-----------------
shall apply only with respect to the proceeds of payments of
Obligations and shall not affect the conversion or continuation
of Loans pursuant to Section 5.1(c);
--------------
(B) a Lender shall be deemed to have cured its failure to
fund its Pro Rata Share of any Revolving Loan or Acquisition
Facility Revolving Loan, as the case may be, at such time as an
amount equal to such Lender's original Pro Rata Share of the
requested principal portion of such Revolving Loan or
Acquisition Facility Revolving Loan, as the case may be, is
fully funded to the Borrower, whether made by such Lender itself
or by operation of the terms of this Section 4.2(b)(v), and
-----------------
whether or not the Non Pro Rata Loan with respect thereto has
been repaid, converted or continued;
(C) amounts advanced to the Borrower to cure, in full or
in part, any such Lender's failure to fund its Pro Rata Share of
any Revolving Loan or Acquisition Facility Revolving Loan ("Cure
Loans") shall bear interest at the rate in effect from time to
time pursuant to Section 5.1(a)(i)(A) and for all other purposes
--------------------
of this Agreement shall be treated as if they were Reference
Rate Loans; and
(D) regardless of whether or not an Event of Default has
occurred or is continuing, and notwithstanding the instructions
of the Borrower as to its desired application, all repayments of
principal which, in accordance with the other terms of this
Section 4.2, would be applied to the outstanding Revolving Loans
-----------
or Acquisition Facility Revolving Loans which are Reference Rate
Loans shall be applied FIRST, ratably to all such Reference Rate
-----
Loans constituting Non Pro Rata Loans, SECOND, ratably to such
------
Reference Rate Loans other than those constituting Non Pro Rata
Loans or Cure Loans and, THIRD, ratably to such Reference Rate
-----
Loans constituting Cure Loans.
(c) Payments on Non-Business Days. Whenever any payment to
-----------------------------
be made by the Borrower hereunder or under the Notes is stated to be
due on a day which is not a Business Day, the payment shall instead be
due on the next succeeding Business Day (except as set forth in
Section 5.2(b)(iii) with respect to payments due on the next preceding
- ------------------
Business Day), and any such extension of time shall be included in the
computation of the payment of interest and fees hereunder.
4.3 Promise to Repay; Evidence of Indebtedness.
------------------------------------------
(a) Promise to Repay. The Borrower hereby agrees to pay
----------------
when due the principal amount of each Loan which is made to it, and
further agrees to pay all unpaid interest accrued thereon, in
accordance with the terms of this Agreement and the Notes. The
Borrower shall execute and deliver to each Lender on the Closing Date
and on the Acquisition Facility Closing Date promissory notes, in the
form of EXHIBITS D-1, D-2 OR D-3, as applicable, and otherwise in form
------------------------
and substance acceptable to the Agent and such Lender, evidencing the
Loans and thereafter shall execute and deliver such other promissory
notes as are necessary to evidence Loans owing to the Lenders after
giving effect to any assignment thereof pursuant to Section 15.1, all
------------
in form and substance acceptable to the Agent and the parties to such
assignment.
(b) Loan Account. Each Lender shall maintain in accordance
------------
with its usual practice an account or accounts (a "Loan Account")
evidencing the Indebtedness of the Borrower to such Lender resulting
from each Loan owing to such Lender from time to time, including the
amount of principal and interest payable and paid to such Lender from
time to time hereunder and under the Notes.
(c) Control Account. The Register maintained by the Agent
---------------
pursuant to Section 15.1(c) shall include a control account, and a
---------------
subsidiary account for each Lender, in which accounts (taken together)
shall be recorded (i) the date and amount of each Borrowing made
hereunder, the type of Loan comprising such Borrowing and any
Eurodollar Interest Period applicable thereto, (ii) the effective date
and amount of each Assignment and Acceptance delivered to and accepted
by it and the parties thereto, (iii) the amount of any principal or
interest due and payable or to become due and payable from the
Borrower to each Lender hereunder or under the Notes, and (iv) the
amount of any sum received by the Agent from the Borrower hereunder
and each Lender's share thereof.
(d) Entries Binding. The entries made in the Register and
---------------
each Loan Account shall be conclusive and binding for all purposes,
absent manifest error.
4.4 [Reserved].
--------
4.5 Cash Collateral Account. (a) Investments. If requested by
----------------------- -----------
the Borrower, the Agent shall, so long as no Event of Default shall
have occurred and be continuing, from time to time invest funds on
deposit in the Cash Collateral Account and accrued interest thereon,
reinvest proceeds of any such investments which may mature or be sold,
and invest interest or other income received from any such
Investments, in each case in such Cash Equivalents as the Borrower may
select. Such funds, interest, proceeds or income which are not so
invested or reinvested in Cash Equivalents shall, except as otherwise
provided in Section 4.5(b) and Section 12.3, be deposited and held by
-------------- ------------
the Agent in the Cash Collateral Account. None of the Agent, any
Lender or any Issuing Bank shall be liable to the Borrower for, or
with respect to, any decline in value of amounts on deposit in the
Cash Collateral Account which shall have been invested pursuant to
this Section 4.5(a) at the direction of the Borrower. Cash Equivalents
--------------
from time to time purchased and held pursuant to this Section 4.5(a)
--------------
shall constitute Cash Collateral and shall, for purposes of this
Agreement, be deemed to be part of the funds held in the Cash
Collateral Account in amounts equal to their respective outstanding
principal amounts.
(b) Withdrawal Rights. Neither the Borrower nor any Person
-----------------
or entity claiming on behalf of or through the Borrower shall have any
right to withdraw any of the funds held in the Cash Collateral
Account, except that, upon the later to occur of (i) the expiration or
termination of all of the Letters of Credit in accordance with their
respective terms and (ii) the payment in full in cash of the
Obligations, any funds remaining in the Cash Collateral Account shall
be returned by the Agent to the Borrower or paid to whomever may be
legally entitled thereto.
(c) Additional Deposits. If at any time the Agent
-------------------
determines that any funds held in the Cash Collateral Account are
subject to any interest, right, claim or Lien of any Person other than
the Agent, the Borrower will, forthwith upon demand by the Agent, pay
to the Agent, as additional funds to be deposited and held in the Cash
Collateral Account, an amount equal to the amount of funds subject to
such interest, right, claim or Lien.
(d) Reasonable Care. The Agent shall exercise reasonable
---------------
care in the custody and preservation of any funds held in the Cash
Collateral Account and shall be deemed to have exercised such care if
such funds are accorded treatment substantially equivalent to that
which the Agent accords its own like property, it being understood
that the Agent shall not have any responsibility for taking any
necessary steps to preserve rights against any parties with respect to
any such funds but may do so at its option. All expenses incurred in
connection therewith shall be for the sole account of the Borrower and
shall constitute Obligations hereunder.
ARTICLE V
INTEREST AND FEES
5.1 Interest on the Loans and other Obligations. (a) Rate of
------------------------------------------- -------
Interest. (i) All Loans and the outstanding principal balance of all
- --------
other Obligations shall bear interest on the unpaid principal amount
thereof from the date such Loans are made and such other Obligations
are incurred until paid in full, except as otherwise provided in
Section 5.1(d) or Section 14.4, as follows:
- -------------- ------------
(A) If a Reference Rate Loan or such other Obligation, at
a rate per annum equal to the sum of (1) the Reference Rate, as
in effect from time to time as interest accrues plus (2) the
applicable Reference Rate Margin; and
(B) If a Eurodollar Rate Loan, at a rate per annum equal
to the sum of (1) the Eurodollar Rate determined for the
applicable Eurodollar Interest Period, plus (2) the applicable
----
Eurodollar Rate Margin.
(ii) The applicable basis for determining the rate
of interest on the Loans shall be selected by the Borrower at the time
a Notice of Borrowing or a Notice of Conversion/Continuation is
delivered by the Borrower to the Agent; provided, however, the
-------- -------
Borrower may not select the Eurodollar Rate as the applicable basis
for determining the rate of interest on such a Loan if (A) such Loan
is to be made on the Closing Date or Acquisition Facility Closing Date
or (B) at the time of such selection an Event of Default or a
Potential Event of Default would occur or has occurred and is
continuing. If on any day any Loan is outstanding with respect to
which notice has not been timely delivered to the Agent in accordance
with the terms of this Agreement specifying the basis for determining
the rate of interest on that day, then for that day interest on that
Loan shall be determined by reference to the Reference Rate.
(b) Interest Payments. (i) Interest accrued on each
-----------------
Reference Rate Loan shall be payable in arrears (A) on the last day of
each calendar month, commencing on the first such day following the
making of such Reference Rate Loan, (B) upon the payment or prepayment
thereof in full or in part, (C) upon conversion thereof to a
Eurodollar Rate Loan, and (D) if not theretofore paid in full, at
maturity (whether by acceleration or otherwise) of such Reference Rate
Loan.
(ii) Interest accrued on each Eurodollar Rate Loan
shall be payable in arrears (A) on each Eurodollar Interest Payment
Date applicable to such Loan, (B) upon the payment or prepayment
thereof in full or in part, and (C) if not theretofore paid in full,
at maturity (whether by acceleration or otherwise) of such Eurodollar
Rate Loan.
(iii) Interest accrued on the principal balance of
all other Obligations shall be payable in arrears (A) on the last day
of each calendar month, commencing on the first such day following the
incurrence of such Obligation, (B) upon repayment thereof in full or
in part, and (C) if not theretofore paid in full, at the time such
other Obligation becomes due and payable (whether by acceleration or
otherwise).
(c) Conversion or Continuation. (i) The Borrower shall
--------------------------
have the option (A) to convert at any time all or any part of
outstanding Reference Rate Loans to Eurodollar Rate Loans; (B) to
convert all or any part of outstanding Eurodollar Rate Loans having
Eurodollar Interest Periods which expire on the same date to Reference
Rate Loans on such expiration date; or (C) to continue all or any part
of outstanding Eurodollar Rate Loans having Eurodollar Interest
Periods which expire on the same date as Eurodollar Rate Loans, and
the succeeding Eurodollar Interest Period of such continued Loans
shall commence on such expiration date; provided, however, no such
-------- -------
outstanding Loan may be continued as, or be converted into, a
Eurodollar Rate Loan (i) if the continuation of, or the conversion
into, would violate any of the provisions of Section 5.2 or (ii) if an
-----------
Event of Default or a Potential Event of Default would occur or has
occurred and is continuing. Any conversion into or continuation of
Eurodollar Rate Loans under this Section 5.1(c) shall be in a minimum
--------------
amount of $500,000 and in integral multiples of $500,000 in excess of
that amount except in the case of a conversion into or a continuation
of an entire Borrowing of Non Pro Rata Loans.
(ii) To convert or continue a Loan under Section
-------
5.1(c)(i), the Borrower shall deliver a Notice of Conversion/
- ---------
Continuation to the Agent no later than 11:00 a.m. (Los Angeles time)
at least three (3) Business Days in advance of the proposed
conversion/continuation date. A Notice of Conversion/Continuation
shall specify (A) the proposed conversion/continuation date (which
shall be a Business Day), (B) the principal amount of the Loan to be
converted/continued, (C) whether such Loan shall be converted and/or
continued, and (D) in the case of a conversion to, or continuation of,
a Eurodollar Rate Loan, the requested Eurodollar Interest Period. In
lieu of delivering a Notice of Conversion/Continuation, the Borrower
may give the Agent telephonic notice of any proposed
conversion/continuation by the time required under this Section
-------
5.1(c)(ii), and such notice shall be confirmed in writing delivered to
- ----------
the Agent by facsimile transmission promptly (but in no event later
than 5:00 p.m. (Los Angeles time) on the same day), the original of
which facsimile copy shall be delivered to the Agent within three (3)
days after the date of such transmission. Promptly after receipt of a
Notice of Conversion/Continuation under this Section 5.1(c)(ii) (or
------------------
telephonic notice in lieu thereof), the Agent shall notify each Lender
by telex or telecopy, or other similar form of transmission, of the
proposed conversion/continuation. Any Notice of Conversion/
Continuation for conversion to, or continuation of, a Loan (or
telephonic notice in lieu thereof) shall be irrevocable, and the
Borrower shall be bound to convert or continue in accordance
therewith.
(d) Default Interest. Notwithstanding the rates of
----------------
interest specified in Section 5.1(a) or elsewhere in this Agreement,
--------------
effective immediately upon the occurrence of an Event of Default and
for as long thereafter as such Event of Default shall be continuing
unwaived, the principal balance of all Loans, and the principal
balance of all other Obligations, shall bear interest at a rate which
is two percent (2.000%) per annum in excess of the rate of interest
specified in Section 5.1(a)(i).
-----------------
(e) Computation of Interest. Interest on all Obligations
-----------------------
shall be computed on the basis of the actual number of days elapsed in
the period during which interest accrues and a year of 360 days. In
computing interest on any Loan, the date of the making of the Loan or
the first day of a Eurodollar Interest Period, as the case may be,
shall be included and the date of payment or the expiration date of a
Eurodollar Interest Period, as the case may be, shall be excluded;
provided, however, if a Loan is repaid on the same day on which it is
- -------- -------
made, one (1) day's interest shall be paid on such Loan.
5.2 Special Provisions Governing Eurodollar Rate Loans.
--------------------------------------------------
With respect to Eurodollar Rate Loans:
(a) [Reserved.]
(b) Determination of Eurodollar Interest Period. By giving
-------------------------------------------
notice as set forth in Section 2.2(b) or 2.3(b) (with respect to a
------------------------
Borrowing of Eurodollar Rate Loans) or Section 5.1(c) (with respect to
--------------
a conversion into or continuation of Eurodollar Rate Loans), the
Borrower shall have the option, subject to the other provisions of
this Section 5.2, to select an interest period (each, a "Eurodollar
-----------
Interest Period") to apply to the Loans described in such notice,
subject to the following provisions:
(i) The Borrower may only select, as to a particular
Borrowing of Eurodollar Rate Loans, a Eurodollar Interest
Period of one, two, three or six months in duration;
(ii) In the case of immediately successive
Eurodollar Interest Periods applicable to a Borrowing of
Eurodollar Rate Loans, each successive Eurodollar Interest
Period shall commence on the day on which the next preceding
Eurodollar Interest Period expires;
(iii) If any Eurodollar Interest Period would
otherwise expire on a day which is not a Business Day, such
Eurodollar Interest Period shall be extended to expire on the
next succeeding Business Day if the next succeeding Business Day
occurs in the same calendar month, and if there will be no
succeeding Business Day in such calendar month, the Eurodollar
Interest Period shall expire on the immediately preceding
Business Day;
(iv) The Borrower may not select a Eurodollar
Interest Period as to any Revolving Loan or Acquisition Facility
Revolving Loan if such Eurodollar Interest Period terminates
later than the scheduled Revolving Credit Termination Date or
Acquisition Facility Revolving Termination Date, as the case may
be;
(v) The Borrower may not select a Eurodollar
Interest Period as to any Term Loan or Acquisition Facility Term
Loan if such Eurodollar Interest Period terminates later than
the scheduled Term Loan Termination Date or Acquisition Facility
Termination Date, as the case may be;
(vi) The Borrower may not select a Eurodollar
Interest Period with respect to any portion of principal of a
Loan which extends beyond a date on which the Borrower is
required to make a scheduled payment of such portion of
principal; and
(vii) There shall be no more than five (5)
Eurodollar Interest Periods in effect at any one time.
(c) Determination of Interest Rate. As soon as practicable
------------------------------
on the second Business Day prior to the first day of each Eurodollar
Interest Period (the "Eurodollar Interest Rate Determination Date"),
the Agent shall determine (pursuant to the procedures set forth in the
definition of "Eurodollar Rate") the interest rate which shall apply
to the Eurodollar Rate Loans for which an interest rate is then being
determined for the applicable Eurodollar Interest Period and shall
promptly give notice thereof (in writing or by telephone confirmed in
writing) to the Borrower and to each Lender. The Agent's determination
shall be presumed to be correct and shall be binding upon the
Borrower, absent manifest error.
(d) [Reserved].
--------
(e) Interest Rate Unascertainable, Inadequate or Unfair.
---------------------------------------------------
In the event that at least one (1) Business Day before the Eurodollar
Interest Rate Determination Date:
(i) the Agent is advised by Union Bank that deposits
in Dollars (in the applicable amounts) are not being offered by
Union Bank in the London interbank market for such Eurodollar
Interest Period; or
(ii) the Agent determines that adequate and fair
means do not exist for ascertaining the applicable interest
rates by reference to which the Eurodollar Rate then being
determined is to be fixed; or
(iii) the Requisite Lenders advise the Agent that
the Eurodollar Rate for Eurodollar Rate Loans comprising such
Borrowing will not adequately reflect the cost to such Requisite
Lenders of obtaining funds in Dollars in the London interbank
market in the amount substantially equal to such Lenders'
Eurodollar Rate Loans in Dollars and for a period equal to such
Euro- dollar Interest Period;
then the Agent shall forthwith give notice thereof to the Borrower,
whereupon (until the Agent notifies the Borrower that the
circumstances giving rise to such suspension no longer exist) the
right of the Borrower to elect to have Loans bear interest based upon
the Eurodollar Rate shall be suspended and each outstanding Eurodollar
Rate Loan shall be converted into a Reference Rate Loan on the last
day of the then current Eurodollar Interest Period therefor,
notwithstanding any prior election by the Borrower to the contrary.
(f) Booking of Eurodollar Rate Loans. Any Lender may make,
--------------------------------
carry or transfer Eurodollar Rate Loans at, to, or for the account of,
its Eurodollar Lending Office or Eurodollar Affiliate or its other
offices or Affiliates. No Lender shall be entitled, however, to
receive any greater amount under Section 14.1, 14.2 or 14.3 as a
------------ ---- ----
result of the transfer of any such Eurodollar Rate Loan to any office
(other than such Eurodollar Lending Office) or any Affiliate (other
than such Eurodollar Affiliate) than such Lender would have been
entitled to receive immediately prior thereto, unless (i) the transfer
occurred at a time when circumstances giving rise to the claim for
such greater amount did not exist and (ii) such claim would have
arisen even if such transfer had not occurred.
(g) Affiliates Not Obligated. No Eurodollar Affiliate or
------------------------
other Affiliate of any Lender shall be deemed a party to this
Agreement or shall have any liability or obligation under this
Agreement.
5.3 Fees. (a) Fees to Agent. The Borrower shall pay to the
---- -------------
Agent, solely for the account of the Agent, such fees as shall be
specified in the Fee Letter in the amount and on the dates set forth
therein.
(b) Letter of Credit Fee. In addition to any charges paid
--------------------
pursuant to Section 3.1(g), the Borrower shall pay (i) to the Issuing
--------------
Bank, a fee equal to 20 basis points (.20%) on the face amount of each
Letter of Credit issued by such Issuing Bank, upon issuance of such
Letter of Credit (the "Fronting Fee") and (ii) to the Agent, for the
account of the Lenders based on their respective Pro Rata Shares, a
fee (the "Letter of Credit Fee") accruing at a per annum rate equal to
the Eurodollar Rate Margin for Revolving Loans then in effect on the
undrawn face amount of each outstanding Letter of Credit, payable
quarterly, in arrears, on the last day of each calendar quarter;
provided, however, upon the occurrence of an Event of Default and for
- -------- -------
so long thereafter as such Event of Default shall be continuing
unwaived, the rate at which the Letter of Credit Fees shall accrue and
be payable shall be two percent (2.000%) per annum in excess of the
rate previously specified in this Section 5.3(b).
--------------
(c) Unused Commitment Fee. (i) The Borrower shall pay to
---------------------
the Agent, for the account of the Lenders in accordance with their
respective Pro Rata Shares, a fee (the "Unused Commitment Fee") on the
average sum for the applicable calendar quarter of, (A) from the
Closing Date until the Revolving Credit Termination Date, the amount
by which the Revolving Credit Commitments exceed the sum of (1) the
aggregate outstanding principal amount of the Revolving Loans, plus
----
(2) the outstanding Reimbursement Obligations, plus (3) the aggregate
----
undrawn face amount of all outstanding Letters of Credit, plus (B)
----
from the Acquisition Facility Closing Date until the Acquisition
Facility Revolving Termination Date, the amount by which the
Acquisition Facility Commitments exceed the aggregate outstanding
principal amount of the Acquisition Facility Revolving Loans. The
Unused Commitment Fee shall be payable (I) quarterly, in arrears,
commencing on the first day of the calendar quarter next succeeding
the Closing Date and (II) on the last to occur of the Revolving Credit
Termination Date and the Acquisition Facility Revolving Termination
Date. The Unused Commitment Fee shall accrue at rate per annum as set
forth below:
(1) On any date prior to the Acquisition Facility Closing
Date, (a) from the Closing Date until and including the last day of
the first fiscal quarter in which the Closing Date occurs, the Unused
Commitment Fee shall accrue at a rate per annum equal to 0.500% and
(b) thereafter, the Unused Commitment Fee shall accrue at the rate per
annum determined in accordance with the Leverage Ratio as of such date
as set forth below:
- --------------------------------------------------------------------------------
UNUSED COMMITMENT
LEVERAGE RATIO FEE RATE PER ANNUM
- --------------------------------------------------------------------------------
Greater than or equal to 3.00 0.500%
- --------------------------------------------------------------------------------
Greater than or equal to 2.50 0.375%
but less than 3.00
- --------------------------------------------------------------------------------
Less than 2.50 0.250%
- --------------------------------------------------------------------------------
(2) On any date on or after the Acquisition Facility
Closing Date, (a) from the Acquisition Facility Closing Date until and
including the last day of the first fiscal quarter in which the
Acquisition Facility Closing Date occurs, the Unused Commitment Fee
shall accrue at a rate per annum equal to 0.500% and (b) thereafter,
the Unused Commitment Fee shall accrue at the rate per annum
determined in accordance with the Leverage Ratio as of such date as
set forth below:
- --------------------------------------------------------------------------------
LEVERAGE RATIO UNUSED COMMITMENT
FEE RATE PER ANNUM
- --------------------------------------------------------------------------------
Greater than or equal to 4.25 0.500%
- --------------------------------------------------------------------------------
Greater than or equal to 3.75 0.375%
but less than 4.25
- --------------------------------------------------------------------------------
Less than 3.75 0.250
- --------------------------------------------------------------------------------
(ii) Notwithstanding the foregoing, in the
event that any Lender fails to fund its Pro Rata Share of any
Revolving Loan or Acquisition Facility Revolving Loan requested by the
Borrower which such Lender is obligated to fund under the terms of
this Agreement, (A) such Lender shall not be entitled to any Unused
Commitment Fees with respect to its Revolving Credit Commitment or its
Acquisition Facility Commitment until such failure has been cured in
accordance with Section 4.2(b)(v)(B) and (B) until such time, the
--------------------
Unused Commitment Fee shall accrue in favor of the Lenders which have
funded their respective Pro Rata Shares of such requested Revolving
Loan, shall be allocated among such performing Lenders ratably based
upon their relative Revolving Credit Commitments, and shall be
calculated based upon the average amount by which the aggregate
Revolving Credit Commitments of such performing Lenders exceeds the
sum of (1) the aggregate outstanding principal amount of the Revolving
Loans owing to such performing Lenders, plus (2) the outstanding
Reimbursement Obligations owing to such performing Lenders, plus (3)
----
the aggregate participation interests of such performing Lenders
arising pursuant to Section 3.1(c) with respect to undrawn and
-------------
outstanding Letters of Credit.
(d) [Reserved.]
--------
(e) Calculation and Payment of Fees. The Unused Commitment
-------------------------------
fee shall be calculated on the basis of the actual number of days
elapsed in a 360-day year. All such fees shall be payable in addition
to, and not in lieu of, interest, compensation, expense
reimbursements, indemnification and other Obligations. Fees shall be
payable to the Agent at its office in Los Angeles, California in
immediately available funds. All fees shall be fully earned and
nonrefundable when paid. All fees specified or referred to in this
Agreement due to the Agent, any Issuing Bank or any Lender, including,
without limitation, those referred to in this Section 5.3, shall bear
-----------
interest, if not paid when due, at the interest rate for Reference
Rate Loans set forth in Section 5.1(d), shall constitute Obligations
--------------
and shall be secured by all of the Collateral.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions Precedent to the Initial Loans and Letters of
--------------------------------------------------------
Credit. The obligation of each Lender on the Closing Date to make its
- ------
Term Loan and any Revolving Loan requested to be made by it, and the
agreement of each Issuing Bank on the Closing Date to issue Letters of
Credit, shall be subject to the satisfaction of all of the following
conditions precedent:
(a) Documents. The Agent shall have received on or before
---------
the Closing Date all of the following in form and substance
satisfactory to each Lender:
(i) this Agreement, the Notes, the Parent Guarantor
Stock Pledge Agreement, the Parent Guarantor Security Agreement,
each Guaranty, each Guarantor Mortgage, each Subsidiary Stock
Pledge Agreement, each Canadian Security Document and all other
agreements, documents and instruments relating to the loan and
other credit transactions contemplated by this Agreement and
described in the List of Closing Documents attached hereto as
EXHIBIT M attached hereto and made a part hereof, each duly
---------
executed where appropriate and in form and substance
satisfactory to the Agent; without limiting the foregoing, the
Borrower hereby directs its counsel, Reid & Priest LLP and
Cassels Brock & Blackwell, to prepare and deliver to the Agent,
the Lenders, the Issuing Banks and Sidley & Austin, the opinions
referred to in such List of Closing Documents;
(ii) with respect to each of the parcels of Real
Property described on SCHEDULE 9.14 hereto, preliminary title
-------------
reports and Phase I environmental reports;
(iii) the Pro Forma and Projections;
(iv) a solvency certificate relating to the
Borrower, the Parent Guarantor and each Subsidiary of the Parent
Guarantor executed by the chief financial officer, treasurer or
other executive officer familiar with the financial affairs of
each such Person, dated as of the Closing Date and giving effect
to the financing transactions contemplated hereby, supported by
such financial statements and other documentation as the Agent
deems appropriate;
(v) an Officer's Certificate executed and delivered
by the president or vice president of the Borrower, dated as of
the Closing Date, certifying that all conditions precedent under
this Section 6.1 have been met and no Potential Event of Default
-----------
or Event of Default has occurred or is continuing;
(vi) the articles of incorporation or other
formation documents of the Borrower and each Guarantor,
certified by the Secretary of State or other appropriate
Governmental Authority of such Person's jurisdiction of
incorporation;
(vii) good standing certificates or certificates of
status or compliance or equivalent certificates and, if
available, franchise tax certificates or other similar
certificates of the Borrower and each Guarantor from the
appropriate Governmental Authority or Governmental Authorities
in such Person's state of incorporation and in each jurisdiction
in which such Person owns any material assets or carries on any
material business;
(viii) a certificate of the secretary or assistant
secretary of the Borrower and each Guarantor, dated as of the
Closing Date, attaching and certifying such Person's bylaws and
resolutions approving the Loan Documents to which such Person is
a party and certifying as to the incumbency and signature of
each person executing any such Loan Document or related document
on behalf of such Person; and
(ix) payoff letters and discharge or termination
statements executed by each obligee of Refinanced Indebtedness.
(b) Perfection of Liens. Evidence that all financing
-------------------
statements and annotations on certificates of title relating to the
Collateral have been filed or recorded and any other evidence of the
Security Documents being duly registered, recorded or perfected in
such jurisdictions (or registration districts thereof) as the Agent
may reasonably require, certificates representing Capital Stock and
other instruments and investment property included in the Collateral
have been delivered to the Agent (with duly executed stock powers) and
all recording fees and filing taxes have been paid.
(c) Due Diligence. The Agent and its counsel shall have
-------------
completed their due diligence review of the business, operations,
assets, liabilities and Contractual Obligations of the Borrower, the
Parent Guarantor and each of its Subsidiaries, the results of which
shall have provided the Agent and each Lender and each Issuing Bank
with results and information which, in the judgment of such Person,
are satisfactory to permit the Agent, each Lender and each Issuing
Bank to enter into the financing transactions contemplated hereby.
(d) No Legal Impediments. No law, regulation, order,
--------------------
judgment or decree of any Governmental Authority shall, and the Agent
shall not have received any notice that litigation is pending or
threatened which is likely to (i) enjoin, prohibit or restrain the
making of the Term Loans and requested Revolving Loans and/or the
issuance of Letters of Credit on the Closing Date or (ii) result in a
Material Adverse Effect.
(e) Labor Relations. The Agent shall be satisfied (i) with
---------------
the collective bargaining or other organized labor agreements to which
the Parent Guarantor or any of its Subsidiaries are a party and (ii)
that neither the Parent Guarantor nor any of its Subsidiaries is
encountering or has any present reason to believe that it will
encounter any adverse labor union organizing activity, employee
strike, work stoppage, shutdown or lockout.
(f) No Change in Condition. Since November 30, 1996, no
----------------------
event or condition has occurred which continues to exist and which
will, or is reasonably likely to, result in a Material Adverse Effect.
(g) Interim Liabilities and Equity. Since November 30,
------------------------------
1996, other than as disclosed in writing to the Agent, neither the
Parent Guarantor nor any of its Subsidiaries shall have (i) entered
into any material (as determined in good faith by the Agent)
commitment or transaction, including, without limitation, transactions
for borrowings and capital expenditures, which are not in the ordinary
course of the Parent Guarantor's or its Subsidiaries' respective
businesses except the transactions contemplated hereby, (ii) declared
or paid any dividends or distributions, (iii) established or assumed
any obligations with respect to compensation or employee benefit plans
or (iv) redeemed, repurchased, or issued any Capital Stock.
(h) No Loss of Material Agreements, Permits and Licenses.
----------------------------------------------------
Since November 30, 1996, no agreement, Permit or license which, in the
judgment of the Agent, is material to the business, operations or
employee relations of the Parent Guarantor or any of its Subsidiaries
shall have been terminated, modified, revoked, breached or declared to
be in default.
(i) No Market Changes. Since July 30, 1997, no
-----------------
material adverse change shall have occurred in the conditions in
the capital markets or the market for loan syndications
generally.
(j) No Default. No Event of Default or Potential
----------
Event of Default shall have occurred and be continuing or would
result from the making of the Loans.
(k) Representations and Warranties. All of the
------------------------------
representations and warranties contained in Sections 7.1 and 7.2 and
--------------------
in any of the other Loan Documents shall be true and correct in all
material respects on and as of the Closing Date.
(l) Fees and Expenses Paid. There shall have been paid to
----------------------
the Agent, for the accounts of the Lenders, Issuing Banks and the
Agent, as applicable, all fees and expenses due and payable on or
before the Closing Date, including, without limitation, all fees and
expenses due and payable pursuant to the Fee Letter.
6.2 Conditions Precedent to Initial Acquisition Facility Loans,
-----------------------------------------------------------
Increase of Maximum Revolving Credit Amount and Increase of Maximum
- -------------------------------------------------------------------
Letter of Credit Obligations. The obligation of each Lender to make
- ----------------------------
the Acquisition Facility available for the account of the Borrower and
to increase its Revolving Credit Commitment proportionately so that
the Maximum Revolving Credit Amount shall be increased to $25,000,000,
and the obligation of each Lender and Issuing Bank to increase the
maximum amount of Letter of Credit Obligations that may be outstanding
at any time to $6,000,000, shall be subject to the satisfaction on or
before March 31, 1998 of all of the following conditions precedent:
(a) Documents. The Agent shall have received on or before
---------
the Acquisition Facility Closing Date all of the following in form and
substance satisfactory to each Lender:
(i) a confirmation of each Guaranty, executed by
each Guarantor (including a confirmation by the Parent Guarantor
of its guaranty obligations under this Agreement);
(ii) a certificate of the Borrower and each
Guarantor dated as of the Acquisition Facility Closing Date that
each statement in each certificate delivered by such Person on
the Closing Date is true and correct and each agreement,
corporate document or other document delivered by such Person on
the Closing Date is in full force and effect and has not been
amended, modified or supplemented since the Closing Date;
(iii) each Senior Subordinated Note Document,
certified by the Parent Guarantor as being true and correct and
in full force and effect as of the Acquisition Facility Closing
Date;
(iv) an Officer's Certificate certifying that all
conditions precedent under this Section 6.2 have been met and no
-----------
Potential Event of Default or Event of Default has occurred or
is continuing; and
(v) such additional documentation as the
Agent may reasonably request.
(b) Senior Subordinated Note Issuance; Repayment of Term
----------------------------------------------------
Loans. The Lenders shall be satisfied (i) with the terms of the Senior
- -----
Subordinated Notes and the Senior Subordinated Note Documents and (ii)
that all conditions precedent to the issuance of the Senior
Subordinated Notes have been satisfied (or waived with the prior
written consent of the Agent); net cash proceeds from the issuance of
Senior Subordinated Notes in an aggregate principal amount of
$100,000,000 shall have (to the extent required by Section
-------
4.1(b)(iii)) been received by the Parent Guarantor or the Borrower and
- -----------
paid to the Agent for the account of the Lenders to repay in full the
Term Loans and all interest accrued thereon and all amounts payable in
connection with the repayment of the Term Loans; and the Senior
Subordinated Note Documents have been executed and delivered and
become effective in accordance with their terms.
(c) No Legal Impediments. No Requirement of Law or any
--------------------
other action or inaction by any Governmental Authority shall, and the
Agent shall not have received any notice that litigation is pending or
threatened which is likely to (i) enjoin, prohibit or restrain the
making of any Acquisition Facility Loans or Revolving Loans on the
Acquisition Facility Closing Date or (ii) result in a Material Adverse
Effect.
(d) Labor Relations. The Agent shall be satisfied that
---------------
neither the Parent Guarantor nor any of its Subsidiaries is
encountering or has any present reason to believe that it will
encounter any material and adverse labor union organizing activity,
employee strike, work stoppage, shutdown or lockout.
(e) No Change in Condition. Since the Closing Date, no
----------------------
event or condition has occurred which continues to exist and which
will, or is reasonably likely to, result in a Material Adverse Effect.
(f) No Default. No Event of Default or Potential Event of
----------
Default shall have occurred and be continuing or would result from the
making of the Loans or the issuance of the Senior Subordinated Notes.
(g) Representations and Warranties. All of the
------------------------------
representations and warranties contained in Section 7.1 and in any of
-----------
the other Loan Documents shall be true and correct in all material
respects on and as of the Acquisition Facility Closing Date.
(h) Fees and Expenses Paid. There shall have been paid to
----------------------
the Agent, for the accounts of the Lenders and the Agent, as
applicable, all fees and expenses due and payable on or before the
Acquisition Facility Closing Date, including, without limitation, all
fees and expenses due and payable pursuant to the Fee Letter.
6.3 Conditions Precedent to all Acquisition Facility Loans. The
------------------------------------------------------
obligation of each Lender to make any Acquisition Facility Revolving
Loan shall be subject to the satisfaction of all of the following
conditions precedent:
(a) Acquisition. The proceeds of the Acquisition Facility
-----------
Revolving Loan shall be applied to finance a Permitted Acquisition,
and the Requisite Lenders shall be satisfied in all material respects
(i) with the terms, form and substance of the Permitted Acquisition
and the documentation related thereto, including, without limitation,
the resolutions with respect to such acquisition enacted by the
respective boards of directors of the Parent Guarantor and the Person
being acquired, (ii) that the parties to such acquisition complied
with all applicable laws and regulatory approval requirements and all
contractual approval and consent requirements, and (iii) that all
conditions precedent to such acquisition pursuant to the acquisition
agreement have been satisfied (or waived with the prior written
consent of the Agent), and no breach of any term or provision of any
agreement documenting or executed pursuant to such acquisition has
occurred. The waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act, if applicable, shall have expired without any
request for further information or order prohibiting the acquisition
to be financed with the Acquisition Facility Loan.
(b) No Default. No Event of Default or Potential Event of
----------
Default shall have occurred and be continuing or would result from the
making of the requested Acquisition Facility Loans or the consummation
of the acquisition to be financed thereby.
6.4 Conditions Precedent to All Loans and Letters of Credit. The
-------------------------------------------------------
obligation of each Lender to make any Loan requested to be made by it
on any Funding Date and the agreement of each Issuing Bank to issue
any Letter of Credit on any date is subject to the following
conditions precedent as of each such date, both before and after
giving effect to the Loans to be made and/or the Letter of Credit to
be issued on such date:
(a) Representations and Warranties. All of the
------------------------------
representations and warranties of the Parent Guarantor and the
Borrower contained in Section 7.1 and Section 7.2, respectively, and
----------- -----------
in any other Loan Document (other than representations and warranties
which expressly speak as of a different date) shall be true and
correct in all material respects.
(b) No Defaults. No Event of Default or Potential Event of
-----------
Default shall have occurred and be continuing or would result from the
making of the requested Loan or issuance of the requested Letter of
Credit.
(c) No Legal Impediments. No Requirement of Law or any
--------------------
action or inaction by Governmental Authority shall, and the Agent
shall not have received from any Lender or Issuing Bank notice that,
in the judgment of such Lender or Issuing Bank, litigation or Claims
are pending or threatened which is likely to, enjoin, prohibit or
restrain, or impose or result in the imposition of any material
adverse condition upon, (i) such Lender's making of the requested Loan
or participation in the requested Letter of Credit or (ii) such
Issuing Bank's issuance of the requested Letter of Credit.
(d) No Material Adverse Effect. No event shall have
--------------------------
occurred since the date of this Agreement and be continuing as of the
applicable Funding Date which has resulted, or is reasonably likely to
result, in a Material Adverse Effect.
Each submission by the Borrower to the Agent of a Notice of Borrowing
with respect to any Loan or a Notice of Conversion/Continuation with
respect to any Loan, each acceptance by the Borrower of the proceeds
of each Loan made, converted or continued hereunder, each submission
by the Borrower to an Issuing Bank of a request for issuance of a
Letter of Credit and the issuance of such Letter of Credit, shall
constitute a representation and warranty by the Borrower as of the
Funding Date or the date of conversion or continuation in respect of
such Loan, or the date of issuance of such Letter of Credit, that all
the conditions contained in this Section 6.4 have been satisfied or
-----------
waived in accordance with Section 15.7.
------------
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.1 Representations and Warranties of the Parent Guarantor. In
------------------------------------------------------
order to induce the Lenders and the Issuing Banks to enter into this
Agreement and to make the Loans and the other financial accommodations
to the Borrower and to issue the Letters of Credit described herein,
the Parent Guarantor hereby represents and warrants to each Lender,
each Issuing Bank and the Agent that the following statements are
true, correct and complete:
(a) Organization; Corporate Powers. (i) The Parent
------------------------------
Guarantor and each of its Subsidiaries (A) is a corporation or
partnership, as the case may be, duly organized, validly existing and
in good standing under the laws of the jurisdiction of its
organization, (B) is duly qualified to do business as a foreign
corporation or partnership, as the case may be, and is in good
standing under the laws of each jurisdiction in which failure to be so
qualified and in good standing will have or is reasonably likely to
have a Material Adverse Effect, (C) has filed and maintained effective
(unless exempt from the requirements for filing) a current Business
Activity Report with the appropriate Governmental Authority in the
states of Minnesota and New Jersey, and (D) has all requisite power
and authority to own, operate and encumber its Property and to conduct
its business as presently conducted and as proposed to be conducted in
connection with and following the consummation of the transactions
contemplated by this Agreement.
(ii) True, correct and complete copies of the
Organizational Documents identified on SCHEDULE 7.1-A attached hereto
--------------
have been delivered to the Agent, each of which is in full force and
effect, has not been modified or amended except to the extent
indicated therein and, to the best of the Parent Guarantor's
knowledge, there are no defaults under such Organizational Documents
and no events which , with the passage of time or giving of notice or
both, would constitute a default under such Organizational Documents.
(b) Authority. (i) The Parent Guarantor and each of its
---------
Subsidiaries have the requisite corporate or partnership power and
authority (A) to execute, deliver and perform each of the Loan
Documents which have been executed by it as required by this Agreement
on or prior to the Closing Date and (B) to file or record the Loan
Documents which have been filed or recorded by it as required by this
Agreement on or prior to the Closing Date, with any Governmental
Authority.
(ii) The execution, delivery, performance and filing
or recording, as the case may be, of each of the Loan Documents which
have been executed, filed or recorded as required by this Agreement on
or prior to the Closing Date and to which the Parent Guarantor or any
of its Subsidiaries is party and the consummation of the transactions
contemplated thereby, have been duly approved by the respective boards
of directors (or other Persons performing similar functions) and, if
necessary, the shareholders or partners of the Parent Guarantor and
its Subsidiaries and such approvals have not been rescinded. No other
corporate or partnership action or proceedings on the part of the
Parent Guarantor or any of its Subsidiaries are necessary to
consummate such transactions.
(iii) Each of the Loan Documents to which the Parent
Guarantor or any of its Subsidiaries is a party (A) has been duly
executed, delivered, filed or recorded, as the case may be, by it, (B)
where applicable, creates valid and (on and after the Closing Date)
perfected first Liens in the Collateral covered thereby securing the
payment of all of the Obligations purported to be secured thereby, (C)
constitutes the Parent Guarantor's or such Subsidiary's legal, valid
and binding obligation, enforceable against it in accordance with its
terms, except insofar as enforceability may be limited by bankruptcy,
insolvency or other similar laws related to or affecting the
enforcement of creditors' rights generally and by general principles
of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and (D) is in full force and effect
and no material term or condition thereof has been amended, modified
or waived from the terms and conditions contained therein as delivered
to the Agent pursuant to Section 6.1(a) without the prior written
--------------
consent of the Requisite Lenders. The Parent Guarantor and its
Subsidiaries have performed and complied with all the terms,
provisions, agreements and conditions set forth in the Loan Documents
and required to be performed or complied with by such parties on or
before the Closing Date, all filings and recordings and other actions
which are necessary or desirable to perfect and protect the Liens
granted pursuant to the Loan Documents and preserve their required
priority have been duly taken, and no Potential Event of Default,
Event of Default or breach of any covenant by any such party exists
thereunder.
(c) Subsidiaries; Ownership of Equity Securities. SCHEDULE
-------------------------------------------- --------
7.1-C attached hereto (i) contains a diagram indicating the corporate
- -----
structure of the Parent Guarantor, its Subsidiaries and any other
Person in which the Parent Guarantor or any of its Subsidiaries holds
a direct or indirect partnership, joint venture or other equity
interest and indicates the nature of such interest with respect to
each Person included in such diagram; and (ii) accurately sets forth
(A) the correct legal name of such Person, the jurisdiction of its
incorporation or organization and the jurisdictions in which it is
qualified to transact business as a foreign corporation or otherwise
and (B) the authorized, issued and outstanding shares or interests of
each class of equity Securities of the Parent Guarantor and each of
its Subsidiaries and, with respect to the Subsidiaries, the owners
of such shares or interests. Other than as indicated on SCHEDULE
--------
7.1-C, none of the issued and outstanding equity Securities of the
- -----
Parent Guarantor of any of its Subsidiaries is subject to any vesting,
redemption, or repurchase agreement to which the Parent Guarantor or
any such Subsidiary is a party, and there are no warrants or options
(other than Permitted Equity Securities Options) issued or granted by
the Parent Guarantor or any of its Subsidiaries outstanding with
respect to such equity Securities. The outstanding equity Securities
of each of the Parent Guarantor's Subsidiaries are duly authorized,
validly issued, fully paid and nonassessable free and clear of any
Liens (except for the Liens granted pursuant to the Loan Documents and
the liens on the securities of MidAtlantic Recycling Technologies,
Inc. described on SCHEDULE 7.1-C) and are not Margin Stock.
--------------
(d) No Conflict. The execution, delivery and performance
-----------
of each of the Loan Documents to which the Parent Guarantor or any of
its Subsidiaries is a party do not and will not (i) conflict with the
Organizational Documents of the Parent Guarantor or any such
Subsidiary, (ii) constitute a tortious interference with any
Contractual Obligation of any Person or conflict with, result in a
breach of or constitute (with or without notice or lapse of time or
both) a default under any Requirement of Law or Contractual Obligation
of the Parent Guarantor or any such Subsidiary, or require termination
of any Contractual Obligation, (iii) result in or require the creation
or imposition of any Lien whatsoever upon any of the Property or
assets of the Parent Guarantor or any such Subsidiary, other than
Liens contemplated by the Loan Documents, or (iv) require any approval
of the Parent Guarantor's or any such Subsidiary's shareholders, which
has not been obtained.
(e) Governmental Consents. Except as set forth on SCHEDULE
--------------------- --------
7.1-E attached hereto, the execution, delivery and performance of each
- -----
of the Loan Documents to which the Parent Guarantor or any of its
Subsidiaries is a party do not and will not require any registration
with, consent or approval of, or notice to, or other action to, with
or by any Governmental Authority, except (i) filings, consents or
notices which have been made, obtained or given and (ii) filings
necessary to create or perfect security interests in the Collateral.
(f) Governmental Regulation. Neither the Parent Guarantor,
-----------------------
nor any of its Subsidiaries is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, or the Investment Company Act of 1940, or any
other federal or state statute or regulation which limits its ability
to incur indebtedness or its ability to consummate the transactions
contemplated hereby or by the Loan Documents.
(g) Restricted Junior Payments. Since November 30, 1996,
--------------------------
neither the Parent Guarantor nor any of its Subsidiaries has directly
or indirectly declared, ordered, paid or made or set apart any sum or
Property for any Restricted Junior Payment or agreed to do so, except
as permitted pursuant to Section 10.6 of this Agreement.
(h) Financial Position. Complete and accurate copies of
------------------
the following Financial Statements, materials and other information
have been delivered to the Agent: (i) the Pro Forma and Projections,
(ii) the Parent Guarantor's Annual Report on Form 10-K and Annual
Report to Shareholders (including audited financial statements) for
the Fiscal Year ended November 30, 1996 and the Annual Report on Form
20-F and Annual Report to Shareholders (including audited financial
statements) for each of the Fiscal Years ended November 30, 1994 and
November 30, 1995 and (iii) the Parent Guarantor's Quarterly Reports
on Form 10-Q for the quarters ending February 28, 1997 and May 31,
1997. All Financial Statements included in such materials were
prepared in all material respects in conformity with GAAP, except as
otherwise noted therein, and fairly present in all material respects
the respective consolidated financial positions, and the consolidated
results of operations and cash flows for each of the periods covered
thereby of the Parent Guarantor and its Subsidiaries as at the
respective dates thereof. Neither the Parent Guarantor nor any of its
Subsidiaries has any Accommodation Obligation, contingent liability or
liability for any taxes, long-term leases or commitments, not
disclosed in writing to the Agent and the Lenders prior to the Closing
Date.
(i) Pro Forma Financials. The Pro Forma, copies of which
--------------------
have been furnished to the Lenders, fairly presents on a pro forma
basis the financial condition of the Parent Guarantor and its
Subsidiaries as of the Closing Date, and reflects on a pro forma basis
those liabilities reflected in the notes thereto and resulting from
consummation of the transactions contemplated by the Loan Documents,
and the payment or accrual of all Transaction Costs payable with
respect to any of the foregoing. The Projections and the assumptions
expressed in the Pro Forma are reasonable based on the information
available to the Parent Guarantor at the time so furnished.
(j) Indebtedness; Refinanced Indebtedness. SCHEDULE 7.1-J
------------------------------------- --------------
sets forth all Indebtedness for borrowed money of the Parent Guarantor
and there are no defaults in the payment of principal or interest on
any such Indebtedness and no payments thereunder have been deferred or
extended beyond their stated maturity (except as disclosed on such
Schedule). The Refinanced Indebtedness and all accrued and unpaid
interest thereon has been paid in full or provision for payment has
been made such that, in accordance with the express provisions of the
instruments governing such Indebtedness, the Parent Guarantor and its
Subsidiaries have been or will be upon payment in full of the
Refinanced Indebtedness irrevocably released from all liability and
Contractual Obligations with respect thereto. Any and all Liens
securing the Refinanced Indebtedness have been released or provision
for release of such Liens satisfactory to the Agent has been made.
(k) Litigation; Adverse Effects. Except as set forth in
---------------------------
SCHEDULE 7.1-K attached hereto, there is no action, suit, proceeding,
- --------------
Claim, investigation or arbitration before or by any Governmental
Authority or private arbitrator pending or, to the knowledge of the
Parent Guarantor or any of its Subsidiaries, threatened against the
Parent Guarantor or any of its Subsidiaries or any of the Property (i)
challenging the validity or the enforceability of any of the Loan
Documents, (ii) which will, or is reasonably likely to, result in any
Material Adverse Effect, or (iii) under the Racketeering Influenced
and Corrupt Organizations Act or any similar federal or state statute
where such Person is a defendant in a criminal indictment that
provides for the forfeiture of assets to any Governmental Authority as
a criminal penalty. There is no material loss contingency within the
meaning of GAAP which has not been reflected in the consolidated
Financial Statements of the Parent Guarantor. Neither the Parent
Guarantor nor any of its Subsidiaries is (A) in violation of any
applicable Requirements of Law which violation will result, or is
reasonably likely to result, in a Material Adverse Effect, or (B)
subject to or in default with respect to any final judgment, writ,
injunction, restraining order or order of any nature, decree, rule or
regulation of any court or Governmental Authority which will, or is
reasonably likely to, result in a Material Adverse Effect.
(l) Compensation. Except (i) as disclosed in documents
------------
filed with the Commission, (ii) as set forth on SCHEDULE 7.1-L
--------------
attached hereto, or (iii) for increases in the ordinary course of
business and in accordance with past practices, during the period
commencing on November 30, 1996 and ending on the Closing Date,
neither the Parent Guarantor nor any of its Subsidiaries has increased
or agreed to increase the aggregate compensation or benefits
(including severance benefits) payable or accruing to any past or
present officer of any of such Persons.
(m) No Material Adverse Effect. Since November 30, 1996,
--------------------------
there has occurred no event with respect to the Parent Guarantor or
any other Guarantor which has resulted, or is reasonably likely to
result, in a Material Adverse Effect.
(n) Tax Examinations. The IRS and all other applicable
----------------
Governmental Authorities (including Revenue Canada) have examined (or
are foreclosed from examining by applicable statutes) the Parent
Guarantor's income tax returns for all tax periods prior to and
including the taxable year ending November 30, 1992 and have assessed
the Parent Guarantor's federal income tax liability for each such
taxable year. All deficiencies which have been asserted against the
Parent Guarantor or any of its Subsidiaries as a result of any
federal, state, local or foreign tax examination for each taxable year
in respect of which an examination has been conducted have been fully
paid or finally settled or are being contested in good faith, and no
issue has been raised in any such examination which, by application of
similar principles, reasonably can be expected to result in assertion
of a material deficiency for any other year not so examined which has
not been reserved for in the Parent Guarantor's consolidated Financial
Statements to the extent, if any, required by GAAP. Neither the Parent
Guarantor nor any of its Subsidiaries has taken any reporting
positions for which it does not have a reasonable basis and does not
anticipate any further material tax liability with respect to the
years which have not been closed pursuant to applicable law.
(o) Payment of Taxes. All tax returns and reports of each
----------------
of the Parent Guarantor and its Subsidiaries required to be filed have
been filed within the times and in the manner prescribed by all
applicable Requirements of Law. The information contained in such
returns and reports is correct and complete and, to the best knowledge
of the Parent Guarantor, such returns and reports reflect accurately
all liability for taxes of the Parent Guarantor and its Subsidiaries
for the periods covered thereby. All taxes, interest, penalties,
assessments, fees and other charges of Governmental Authorities which
have become due pursuant to such returns or pursuant to any assessment
received by the Parent Guarantor or any Subsidiary have been paid,
except to the extent (i) such taxes, assessments, fees and other
charges are being contested in good faith by an appropriate proceeding
diligently pursued as permitted by the terms of Section 9.4 and (ii)
-----------
non-payment of the amounts thereof would not, individually or in the
aggregate, result in a Material Adverse Effect. The Parent Guarantor
has no knowledge of any proposed tax assessment or reassessment
against the Parent Guarantor or any of its Subsidiaries that will, or
is reasonably likely to, result in a Material Adverse Effect. There
are no outstanding agreements or waivers extending the statutory
period providing for an extension of time with respect to the
assessment or re-assessment of tax or the filing of any tax return by,
or any payment of any tax by the Parent Guarantor or any of its
Subsidiaries, and to the best knowledge of the Parent Guarantor, no
examination of any tax return of the Parent Guarantor or any
Subsidiary is currently in progress.
(p) Performance. Neither the Parent Guarantor nor any of
-----------
its Subsidiaries has received any written notice, citation, or
allegation, nor has actual knowledge, that (i) it is in default in the
performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any Contractual Obligation
applicable to it, (ii) any of its Property is in violation of any
Requirement of Law, or (iii) any condition exists which, with the
giving of notice or the lapse of time or both, would constitute a
default with respect to any such Contractual Obligation, in each case,
except where such default or defaults, if any, will not, or is not
reasonably likely to, result in a Material Adverse Effect.
(q) Disclosure. The representations and warranties of the
----------
Parent Guarantor and its Subsidiaries contained in the Loan Documents,
and all certificates and other documents delivered to the Agent
pursuant to the terms thereof, do not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to
make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading. The Parent
Guarantor has not intentionally withheld any fact from the Agent in
regard to any matter which will, or is reasonably likely to, result in
a Material Adverse Effect.
(r) Requirements of Law. The Parent Guarantor is and its
-------------------
Subsidiaries are in compliance with all Requirements of Law applicable
to them and their respective businesses, in each case where the
failure to so comply individually or in the aggregate will, or is
reasonably likely to, result in a Material Adverse Effect.
(s) Environmental Matters. (i) Except as disclosed
---------------------
on SCHEDULE 7.1-S attached hereto:
--------------
(A) the operations of the Parent Guarantor and its
Subsidiaries and their respective Properties comply in all material
respects with all applicable Environmental, Health or Safety
Requirements of Law;
(B) the Parent Guarantor and each of its Subsidiaries has
obtained all Permits necessary for its respective operations and
Properties, and all such Permits are in good standing and the Parent
Guarantor and each of its Subsidiaries are currently in material
compliance with all terms and conditions of such Permits;
(C) none of the Parent Guarantor or its Subsidiaries nor
any of their respective present or past Property or operations, are
subject to or the subject of any judicial or administrative
proceeding, order, judgment, decree, dispute, negotiations, agreement,
or settlement respecting (I) any Environmental, Health or Safety
Requirements of Law, (II) any Remedial Action, (III) any Claims or
Liabilities and Costs arising from the Release or threatened Release
of a Contaminant, or (IV) any violation of or liability under any
Environmental, Health or Safety Requirement of Law;
(D) neither the Parent Guarantor nor any of its
Subsidiaries has made or filed any notice under any applicable
Requirement of Law (I) reporting a Release of a Contaminant where
Remedial Action has not been conducted and completed to the
satisfaction of the appropriate Governmental Authority; (II) under
Section 103(c) of CERCLA, indicating past or present treatment,
storage or disposal of a Contaminant; or (III) reporting a violation
of any applicable Environmental, Health or Safety Requirement of Law
where such violation has not been corrected to the satisfaction of the
appropriate Governmental Authority; or (iv) making any disclosure
under any Environmental Health or Safety Requirement of Law which is
not routine and filed periodically on an ongoing basis.
(E) none of the Parent Guarantor's or its Subsidiaries'
present or past Property is listed or proposed for listing on the
National Priorities List ("NPL") pursuant to CERCLA or on the
Comprehensive Environmental Response Compensation Liability
Information System List ("CERCLIS") or any similar Governmental
Authority list of sites requiring Remedial Action;
(F) neither the Parent Guarantor nor any of its
Subsidiaries has sent or directly arranged for the transport or
disposal of any Contaminant to any current or proposed NPL site,
CERCLIS or any similar Governmental Authority list of sites concerning
Releases or requiring Remedial Action;
(G) there is not now in connection with or resulting
from the Parent Guarantor's or any of its Subsidiaries'
operations, nor, to the Parent Guarantor's knowledge, has there ever
been on, in or under any of the Property (I) any treatment, recycling,
storage, disposal, generation, processing, transporting or depositing
of any Contaminant, including of any hazardous waste requiring a
Permit (including a Permit under 40 C.F.R. Parts 264 and 265 or any
state equivalent), (II) any landfill, waste pile, underground storage
tank or surface impoundment, (III) any asbestos-containing material,
(IV) a Release of any polychlorinated biphenyls (PCB), including PCBs
used in hydraulic oils, electrical transformers or other Equipment or
(V) any other Contaminants which are of such a nature or in such
quantities that the Parent Guarantor or any of its Subsidiaries could
be subject to a Remedial Action issued by a Governmental Authority;
(H) neither the Parent Guarantor nor any of its
Subsidiaries has received any notice or Claim to the effect that any
of such Persons is or may be liable to any Person as a result of the
Release or threatened Release of a Contaminant;
(I) to the Parent Guarantor's knowledge, there have been
no Releases of any Contaminants to the environment from any Property
except in compliance with Environmental, Health or Safety Requirements
of Law, or which have not been reported and then corrected to the
satisfaction of the appropriate Governmental Authorities;
(J) neither the Parent Guarantor nor any of its
Subsidiaries has any contingent liability in connection with any
Release or threatened Release of any Contaminants;
(K) no Environmental Lien has attached to any
Property;
(L) to the best knowledge of the Borrower and the
Parent Guarantor, none of the Property contains any
asbestos-containing material; and
(M) none of the Property is subject to any Environmental
Property Transfer Act, or to the extent such acts are applicable to
any such Property, the Parent Guarantor has and its Subsidiaries have
fully complied with the requirements of such acts.
(ii) the Parent Guarantor and each of its Subsidiaries are
conducting and will continue to conduct their respective business and
operations in an environmentally responsible manner in compliance with
Environmental, Health or Safety Requirements of Law, and the Parent
Guarantor and its Subsidiaries, taken as a whole, have not been, and
have no reason to believe that they will be, subject to Claims,
Liabilities and Costs arising out of or relating to environmental,
health or safety matters that have or will result in cash expenditures
by the Parent Guarantor and its Subsidiaries in excess of $1,000,000
in the aggregate for any Fiscal Year ending after the Closing Date.
(t) ERISA. Neither the Parent Guarantor nor any ERISA
-----
Affiliate maintains or contributes to any Benefit Plan, Multiemployer
Plan or Foreign Pension Plan other than those listed on SCHEDULE 7.1-T
--------------
attached hereto. Each Plan which is intended to be qualified under
Section 401(a) of the Internal Revenue Code as currently in effect
either (i) has received a favorable determination letter from the IRS
that the Plan is so qualified or (ii) an application for determination
of such tax-qualified status will be made to the IRS prior to the end
of the applicable remedial amendment period under Section 401(a) of
the Internal Revenue Code as currently in effect, and the Parent
Guarantor or an ERISA Affiliate shall diligently seek to obtain a
determination letter with respect to such application. Except as
identified on SCHEDULE 7.1-T, neither the Parent Guarantor nor any of
--------------
its Subsidiaries maintains or contributes to any employee welfare
benefit plan within the meaning of Section 3(1) of ERISA which
provides benefits to employees after termination of employment other
than as required by Section 601 of ERISA. The Parent Guarantor and
each of its Subsidiaries are in compliance in all material respects
with the responsibilities, obligations and duties imposed on them by
ERISA and the Internal Revenue Code with respect to all Plans. No
Benefit Plan has incurred any accumulated funding deficiency (as
defined in Sections 302(a)(2) of ERISA and 412(a) of the Internal
Revenue Code) whether or not waived. Neither the Parent Guarantor nor
any ERISA Affiliate nor any fiduciary of any Plan which is not a
Multiemployer Plan (i) has engaged in a nonexempt prohibited
transaction described in Sections 406 of ERISA or 4975 of the Internal
Revenue Code or (ii) has taken or failed to take any action which
would constitute or result in a Termination Event, which, in either
event, will result in an obligation to pay a material amount of money.
Neither the Parent Guarantor nor any ERISA Affiliate has any potential
liability under Sections 4063, 4064, 4069, 4204 or 4212(c) of ERISA
which, singly or in the aggregate, will result in an obligation to pay
a material amount of money. Neither the Parent Guarantor nor any ERISA
Affiliate has incurred any liability to the PBGC which remains
outstanding other than the payment of premiums, and there are no
premium payments which have become due which are unpaid. Schedule B to
the most recent annual report filed with the IRS with respect to each
Benefit Plan and furnished to the Agent is complete and accurate in
all material respects. Since the date of each such Schedule B, there
has been no material adverse change in the funding status or financial
condition of the Benefit Plan relating to such Schedule B. Neither the
Parent Guarantor nor any ERISA Affiliate has (i) failed to make a
required contribution or payment to a Multiemployer Plan or (ii) made
a complete or partial withdrawal under Sections 4203 or 4205 of ERISA
from a Multiemployer Plan. Neither the Parent Guarantor nor any ERISA
Affiliate has failed to make a required installment or any other
required payment under Section 412 of the Internal Revenue Code on or
before the due date for such installment or other payment. Neither the
Parent Guarantor nor any ERISA Affiliate is required to provide
security to a Benefit Plan under Section 401(a)(29) of the Internal
Revenue Code due to a Benefit Plan amendment that results in an
increase in current liability for the plan year. Except as disclosed
on SCHEDULE 7.1-T, neither the Parent Guarantor nor any of its
--------------
Subsidiaries has, by reason of the transactions contemplated hereby,
any obligation to make any payment to any employee pursuant to any
Plan or existing contract or arrangement. The Parent Guarantor has
given to the Agent copies of all of the following: each Benefit Plan
and related trust agreement (including all amendments to such Plan and
trust) in existence or committed to as of the Closing Date and in
respect of which the Parent Guarantor or any ERISA Affiliate is
currently an "employer" as defined in section 3(5) of ERISA, and the
most recent summary plan description, actuarial report, determination
letter issued by the IRS and Form 5500 filed in respect of each such
Benefit Plan in existence; a listing of all of the Multiemployer Plans
currently contributed to by the Parent Guarantor or any ERISA
Affiliate with the aggregate amount of the most recent annual
contributions required to be made by the Parent Guarantor and all
ERISA Affiliates to each such Multiemployer Plan, any information
which has been provided to the Parent Guarantor or an ERISA Affiliate
regarding withdrawal liability under any Multiemployer Plan and the
collective bargaining agreement pursuant to which such contribution is
required to be made; and as to each employee welfare benefit plan
within the meaning of Section 3(1) of ERISA which provides benefits to
employees of the Parent Guarantor or any of its Subsidiaries after
termination of employment other than as required by Section 601 of
ERISA, the most recent summary plan description for such plan and the
aggregate amount of the most recent annual payments made to terminated
employees under each such plan.
(u) Foreign Employee Benefit Matters. (i) Each Canadian
--------------------------------
Employee Benefit Plan is duly registered where required by, and is in
good standing under, all applicable Requirements of Law. All required
employer and employee contributions and premiums under the Canadian
Employee Benefit Plans have been made, no past service funding
liabilities exist, and there are no actions, claims of proceedings
pending or threatened (other than routine claims for benefits)
relating to any of the Canadian Employee Benefit Plans. There is no
requirement to provide post-retirement profit sharing, medical or
health benefits to employees of the Parent Guarantor or any of its
Subsidiaries.
(ii) Each Canadian Pension Plan is duly registered where
required by, and is in good standing under, all applicable
Requirements of Law, including the Income Tax Act (Canada), the
Pension Benefits Act (Ontario) and the respective requirements of the
governing documents for such plans. There are no actions, claims or
proceedings pending or threatened (other than routine claims for
benefits) relating to any of the Canadian Pension Plans. All required
employer and employee contributions and premiums under the Canadian
Pension Plans have been made, the Canadian Pension Plans are each
fully funded on both a going-concern and a winding-up basis in
accordance with all applicable Requirements of Law and with the
actuarial methods and assumptions used in the most recent actuarial
reports therefor, and there have been no surplus withdrawals or
contribution holidays except as permitted by all applicable
Requirements of Law and the terms of the Canadian Pension Plans.
(iii) Each Foreign Employee Benefit Plan is in compliance
in all material respects with all laws, regulations and rules
applicable thereto and the respective requirements of the governing
documents for such Plan. The aggregate of the liabilities to provide
all of the accrued benefits under any Foreign Pension Plan does not
exceed the current Fair Market Value of the assets held in the trust
or other funding vehicle for such Plan. With respect to any Foreign
Employee Benefit Plan maintained or contributed to by the Parent
Guarantor, any of its Subsidiaries or any ERISA Affiliate (other than
a Foreign Pension Plan), reasonable reserves have been established in
accordance with prudent business practice or where required by
ordinary accounting practices in the jurisdiction in which such Plan
is maintained. The aggregate unfunded liabilities, after giving effect
to any reserves for such liabilities, with respect to such Plans does
not exceed the current Fair Market Value of the assets held in the
trust or other funding vehicle for such Plan and will not result in an
obligation to pay a material amount of money. There are no actions,
suits or claims (other than routine claims for benefits) pending or,
to the best knowledge of the Parent Guarantor, threatened against the
Parent Guarantor, any of its Subsidiaries or any ERISA Affiliate with
respect to any Foreign Employee Benefit Plan.
(v) Labor Matters. SCHEDULE 7.1-V accurately sets forth
------------- --------------
all labor contracts to which the Parent Guarantor or any of its
Subsidiaries is a party on the date hereof and the expiration date of
each such contract. There are no strikes, lockouts or other grievances
relating to any collective bargaining or similar agreement to which
the Parent Guarantor or any of its Subsidiaries is a party.
(w) Securities Activities. Neither the Parent
---------------------
Guarantor nor any of its Subsidiaries is engaged in the business
of extending credit for the purpose of purchasing or carrying
Margin Stock.
(x) Solvency. As of and after giving effect to the Loans
--------
to be made and Letters of Credit to be issued on the Closing Date or
such other date as Loans requested hereunder are made or Letters of
Credit requested hereunder are issued, and the Senior Subordinated
Notes to be issued on the Senior Subordinated Note Issuance Date, and
the disbursement of the proceeds of such Loans pursuant to the Parent
Guarantor's instructions, the Parent Guarantor is and each of its
Subsidiaries are Solvent.
(y) Patents, Trademarks, Permits, Etc.; Government
----------------------------------------------
Approvals. (i) The Parent Guarantor and each of its Subsidiaries, as
- ---------
applicable, owns, is licensed or otherwise has the lawful right to
use, or has all Permits and other governmental approvals, patents,
trademarks, trade names, copyrights, technology, know-how, permits and
processes used in or necessary for the conduct of its respective
business as currently conducted which are material to its condition
(financial or otherwise), operations, performance and prospects, taken
as a whole. Except as set forth on SCHEDULE 7.1-Y attached hereto, no
--------------
claims are pending or, to the best of the Parent Guarantor's knowledge
following diligent inquiry, threatened that the Parent Guarantor or
any of its Subsidiaries is infringing or otherwise adversely affecting
the rights of any Person with respect to such Permits and other
governmental approvals, patents, trademarks, trade names, copyrights,
technology, know-how, permits and processes, except for such claims
and infringements as do not, in the aggregate, give rise to any
liability on the part of the Parent Guarantor or any of its
Subsidiaries which will, or is reasonably likely to, result in a
Material Adverse Effect.
(ii) The consummation of the transactions contemplated by
the Loan Documents will not impair the ownership of or rights under
(or the license or other right to use, as the case may be) any Permits
and governmental approvals, patents, trademarks, trade names,
copyrights, technology, know-how, permits or processes by the Parent
Guarantor or any of its Subsidiaries in any manner which will, or is
reasonably likely to, result in a Material Adverse Effect.
(z) Assets and Properties. The Parent Guarantor and each
---------------------
of its Subsidiaries has good and marketable title to all of the assets
and Property (tangible and intangible) owned by it (except insofar as
marketability may be limited by any laws or regulations of any
Governmental Authority affecting such assets), and all such assets and
Property are free and clear of all Liens except Liens securing the
Obligations and Liens permitted under Section 10.3. Substantially all
------------
of the assets and Property owned by, leased to, or used by the Parent
Guarantor and/or each such Subsidiary of the Parent Guarantor is in
adequate operating condition and repair, ordinary wear and tear
excepted, is free and clear of any known defects except such defects
as do not substantially interfere with the continued use thereof in
the conduct of normal operations, and is able to serve the function
for which they are currently being used, except in each case where the
failure of such asset to meet such requirements would not, or is not
reasonably likely to, result in a Material Adverse Effect. Neither
this Agreement nor any other Loan Document nor any transaction
contemplated under any such agreement, will affect any right, title or
interest of the Parent Guarantor or any Subsidiary of the Parent
Guarantor in and to any of such assets in a manner that would, or is
reasonably likely to, result in a Material Adverse Effect.
(aa) Insurance. SCHEDULE 7.1-AA attached hereto accurately
--------- ---------------
sets forth as of the Closing Date all insurance policies and programs
currently in effect with respect to the respective Property and assets
and business of the Parent Guarantor and its Subsidiaries, specifying
for each such policy and program, (i) the amount thereof, (ii) the
risks insured against thereby, (iii) the name of the insurer and each
insured party thereunder, (iv) the policy or other identification
number thereof, (v) the expiration date thereof, (vi) the annual
premium with respect thereto, and (vii) a list of claims made
thereunder during the immediately preceding two calendar years. The
Parent Guarantor has delivered to the Agent a certificate, in the form
required by Section 9.5, with respect to all such insurance policies.
-----------
Such insurance policies and programs are currently in full force and
effect, in compliance with the requirements of Section 9.5 and are in
-----------
amounts sufficient to cover the replacement value of the respective
Property and assets of the Parent Guarantor and its Subsidiaries.
(ab) Pledge of Capital Stock. The grant and perfection of
-----------------------
the security interest in the Capital Stock of the Subsidiaries of the
Parent Guarantor constituting a portion of the Collateral for the
benefit of the Secured Parties, as contemplated by the terms of the
Loan Documents, is not made in violation of the registration
provisions of the Securities Act, any applicable provisions of other
federal securities laws, state securities or "Blue Sky" law, foreign
securities law, or applicable general corporation law or in violation
of any other Requirement of Law.
(ac) Restricted Subsidiaries. The aggregate fair market
-----------------------
value of assets owned by the Restricted Subsidiaries does not exceed
$5,000,000. The EBITDA of the Parent Guarantor attributable to
earnings of the Restricted Subsidiaries for the most recently
completed Fiscal Year did not exceed $250,000.
(ad) Certain Property. Neither the Parent Guarantor nor
----------------
any of its Subsidiaries owns any Property (other than Real Property)
that was acquired by such Person at any time during which such
Person's official corporate name was different from the official
corporate name of such person in effect as of the date of this
Agreement.
7.2 Representations and Warranties of the Borrower. In order to
----------------------------------------------
induce the Lenders and the Issuing Banks to enter into this Agreement
and to make the Loans and the other financial accommodations to the
Borrower and to issue the Letters of Credit described herein, the
Borrower hereby represents and warrants to each Lender, each Issuing
Bank and the Agent that the following statements are true, correct and
complete:
(a) Organization; Corporate Powers. (i) The Borrower (A)
------------------------------
is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (B) is duly
qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction in which failure to be so
qualified and in good standing will have or is reasonably likely to
have a Material Adverse Effect, (C) has filed and maintained effective
(unless exempt from the requirements for filing) a current Business
Activity Report with the appropriate Governmental Authority in the
states of Minnesota and New Jersey, and (D) has all requisite power
and authority to own, operate and encumber its Property and to conduct
its business as presently conducted and as proposed to be conducted in
connection with and following the consummation of the transactions
contemplated by this Agreement.
(ii) True, correct and complete copies of the
Organizational Documents relating to the Borrower identified on
SCHEDULE 7.1-A attached hereto have been delivered to the Agent, each
- --------------
of which is in full force and effect, has not been modified or amended
except to the extent indicated therein and, to the best of the
Borrower's knowledge, there are no defaults under such Organizational
Documents and no events which , with the passage of time or giving of
notice or both, would constitute a default under such Organizational
Documents.
(b) Authority. (i) The Borrower has the requisite
---------
corporate power and authority (A) to execute, deliver and perform each
of the Loan Documents which have been executed by it as required by
this Agreement on or prior to the Closing Date and (B) to file or
record the Loan Documents which have been filed or recorded by it as
required by this Agreement on or prior to the Closing Date, with any
Governmental Authority.
(ii) The execution, delivery, performance and filing
or recording, as the case may be, of each of the Loan Documents which
have been executed, filed or recorded as required by this Agreement on
or prior to the Closing Date and to which the Borrower is party and
the consummation of the transactions contemplated thereby, have been
duly approved by its board of directors and, if necessary, the
shareholders of the Borrower and such approvals have not been
rescinded. No other corporate action or proceedings on the part of the
Borrower are necessary to consummate such transactions.
(iii) Each of the Loan Documents to which the
Borrower is a party (A) has been duly executed, delivered, filed or
recorded, as the case may be, by it, (B) where applicable, creates
valid and (on and after the Closing Date) perfected first Liens in the
Collateral covered thereby securing the payment of all of the
Obligations purported to be secured thereby, (C) constitutes the
Borrower's legal, valid and binding obligation, enforceable against it
in accordance with its terms, except insofar as enforceability may be
limited by bankruptcy, insolvency or other similar laws related to or
affecting the enforcement of creditors' rights generally and by
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and
(D) is in full force and effect and no material term or condition
thereof has been amended, modified or waived from the terms and
conditions contained therein as delivered to the Agent pursuant to
Section 6.1(a) without the prior written consent of the Requisite
- --------------
Lenders. The Borrower has performed and complied with all the terms,
provisions, agreements and conditions set forth in the Loan Documents
and required to be performed or complied with by the Borrower on or
before the Closing Date, all filings and recordings and other actions
which are necessary or desirable to perfect and protect the Liens
granted pursuant to the Loan Documents and preserve their required
priority have been duly taken, and no Potential Event of Default,
Event of Default or breach of any covenant by any such party exists
thereunder.
(c) No Conflict. The execution, delivery and performance
-----------
of each of the Loan Documents to which the Borrower is a party do not
and will not (i) conflict with the Organizational Documents of the
Borrower, (ii) constitute a tortious interference with any Contractual
Obligation of any Person or conflict with, result in a breach of or
constitute (with or without notice or lapse of time or both) a default
under any Requirement of Law or Contractual Obligation of the
Borrower, or require termination of any Contractual Obligation, (iii)
result in or require the creation or imposition of any Lien whatsoever
upon any of the Property or assets of the Borrower, other than Liens
contemplated by the Loan Documents, or (iv) require any approval of
the Borrower's shareholders, which has not been obtained.
(d) Governmental Consents. Except as set forth on SCHEDULE
--------------------- --------
7.1-E attached hereto, the execution, delivery and performance of each
- -----
of the Loan Documents to which the Borrower is a party do not and will
not require any registration with, consent or approval of, or notice
to, or other action to, with or by any Governmental Authority, except
(i) filings, consents or notices which have been made, obtained or
given and (ii) filings necessary to create or perfect security
interests in the Collateral.
(e) Governmental Regulation. The Borrower is not subject
-----------------------
to regulation under the Public Utility Holding Company Act of 1935,
the Federal Power Act, the Interstate Commerce Act, or the Investment
Company Act of 1940, or any other federal or state statute or
regulation which limits its ability to incur indebtedness or its
ability to consummate the transactions contemplated hereby or by the
Loan Documents.
(f) Performance. The Borrower has not received any written
-----------
notice, citation, or allegation, nor has actual knowledge, that (i) it
is in default in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in any Contractual
Obligation applicable to it, (ii) any of its Property is in violation
of any Requirement of Law, or (iii) any condition exists which, with
the giving of notice or the lapse of time or both, would constitute a
default with respect to any such Contractual Obligation, in each case,
except where such default or defaults, if any, will not, or is not
reasonably likely to, result in a Material Adverse Effect.
(g) Disclosure. The representations and warranties of the
----------
Borrower contained in the Loan Documents, and all certificates and
other documents delivered to the Agent pursuant to the terms thereof,
do not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances under which
they were made, not misleading. The Borrower has not intentionally
withheld any fact from the Agent in regard to any matter which will,
or is reasonably likely to, result in a Material Adverse Effect.
(h) Requirements of Law. The Borrower is in compliance
-------------------
with all Requirements of Law applicable to it and its business, in
each case where the failure to so comply individually or in the
aggregate will, or is reasonably likely to, result in a Material
Adverse Effect.
ARTICLE VIII
REPORTING COVENANTS
The Borrower and the Parent Guarantor covenant and agree
that so long as any Commitments are outstanding and thereafter until
payment in full of all of the Obligations (other than indemnities not
yet due), unless the Requisite Lenders shall otherwise give their
prior written consent thereto:
8.1 Financial Statements. The Parent Guarantor shall maintain,
--------------------
and cause each of its Subsidiaries to maintain, a system of accounting
established and administered in accordance with sound business
practices to permit preparation of consolidated and consolidating
Financial Statements in conformity with GAAP and each of the Financial
Statements described below shall be prepared from such system and
records. The Parent Guarantor shall deliver or cause to be delivered
to the Agent and the Lenders:
(a) Monthly Reports. As soon as practicable, and in any
---------------
event within thirty (30) days after the end of each calendar month in
each Fiscal Year, the consolidated and business segment balance sheets
of the Parent Guarantor and its Subsidiaries as at the end of such
period and the related consolidated and business segment statements of
income, stockholders' equity and cash flow of the Parent Guarantor and
its Subsidiaries for such calendar month, setting forth in each case
in comparative form the corresponding figures for the corresponding
calendar month of the previous Fiscal Year and the corresponding
figures from the consolidated financial forecast for the current
Fiscal Year delivered on the Closing Date or pursuant to Section
-------
8.1(f), as applicable, certified by the chief financial officer of the
- ------
Parent Guarantor as fairly presenting the consolidated and business
segment financial position of the Parent Guarantor and its
Subsidiaries as at the dates indicated and the results of their
operations and cash flow for the calendar months indicated in
accordance with GAAP (as in effect from time to time), subject to
normal year end adjustments.
(b) Quarterly Reports. As soon as practicable, and in any
-----------------
event within forty-five (45) days after the end of each fiscal quarter
in each Fiscal Year, the consolidated balance sheet of the Parent
Guarantor and each First Tier Subsidiary as at the end of such period
and the related consolidated and consolidating statements of income,
stockholders' equity and cash flow of the Parent Guarantor and each
First Tier Subsidiary for such fiscal quarter and for the period from
the beginning of the then current Fiscal Year to the end of such
fiscal quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous
Fiscal Year and the corresponding figures from the consolidated
financial forecast for the current Fiscal Year delivered on the
Closing Date or pursuant to Section 8.1(f), as applicable, certified
--------------
by the chief financial officers of the Parent Guarantor and the First
Tier Subsidiaries as fairly presenting the consolidated financial
position of the Parent Guarantor and the First Tier Subsidiaries as at
the dates indicated and the results of their operations and cash flow
for the periods indicated in accordance with GAAP (as in effect from
time to time), subject to normal year end adjustments.
(c) Annual Reports. As soon as practicable, and in any
--------------
event within ninety (90) days after the end of each Fiscal Year, (i)
the consolidated balance sheets of the Parent Guarantor and each First
Tier Subsidiary as at the end of such Fiscal Year and the related
consolidated statements of income, stockholders' equity and cash flow
of the Parent Guarantor and each First Tier Subsidiary for such Fiscal
Year, setting forth in each case in comparative form the corresponding
figures for the previous Fiscal Year and the corresponding figures
from the consolidated financial forecast for the current Fiscal Year
delivered on the Closing Date or pursuant to Section 8.1(f), as
--------------
applicable, and (ii) a report (with respect to the Financial
Statements of the Parent Guarantor described in this Section 8.1(c))
--------------
of Coopers & Lybrand L.L.P. or other independent certified public
accountants acceptable to the Agent, which report shall be unqualified
and shall state that such Financial Statements fairly present the
consolidated financial position of the Parent Guarantor and its
Subsidiaries as at the dates indicated and the results of their
operations and cash flow for the periods indicated in conformity with
GAAP applied on a basis consistent with prior years (except for
changes with which Coopers & Lybrand L.L.P. or any such other
independent certified public accountants, if applicable, shall concur
and which shall have been disclosed in the notes to the Financial
Statements) and that the examination by such accountants in connection
with such consolidated Financial Statements has been made in
accordance with generally accepted auditing standards.
(d) Officer's Certificate. Together with each delivery of
----------------------
any Financial Statement pursuant to paragraphs (b) and (c) of this
-------------- ---
Section 8.1, (i) an Officer's Certificate of the Parent Guarantor
- -----------
substantially in the form of EXHIBIT N attached hereto and made a part
---------
hereof, stating that the executive officer signatory thereto has
reviewed the terms of the Loan Documents, and has made, or caused to
be made under his/her supervision, a review in reasonable detail of
the transactions and consolidated and consolidating financial
condition of the Parent Guarantor and its Subsidiaries during the
accounting period covered by such Financial Statements, that such
review has not disclosed the existence during or at the end of such
accounting period, and that such Person does not have knowledge of the
existence as at the date of such Officer's Certificate, of any
condition or event which constitutes an Event of Default or Potential
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 Parent Guarantor or any of its Subsidiaries has taken, is
taking and proposes to take with respect thereto; and (ii) a
certificate (the "Compliance Certificate"), signed by the Parent
Guarantor's chief financial officer, setting forth calculations (with
such specificity as the Agent may reasonably request) for the period
then ended which demonstrate compliance, when applicable, with the
provisions of Article XI.
----------
(e) Accountant's Statement and Privity Letter. Together
-----------------------------------------
with each delivery of the Financial Statements referred to in Section
-------
8.1(c), a written statement of the firm of independent certified
- ------
public accountants giving the report thereon (i) stating that their
audit examination has included a review of the terms of this Agreement
as it relates to accounting matters, (ii) stating whether, in
connection with their audit examination, any condition or event which
constitutes an Event of Default or Potential Event of Default has come
to their attention, and if such condition or event has come to their
attention, specifying the nature and period of existence thereof;
provided that such accountants shall not be liable by reason of any
- -------- ----
failure to obtain knowledge of any such condition or event that would
not be disclosed in the course of their audit examination, and (iii)
stating that based on their audit examination nothing has come to
their attention which causes them to believe that the information
contained in either or both of the certificates delivered therewith
pursuant to Section 8.1(d) (as the information contained in such
--------------
certificates relates to the covenants set forth in Article XI) is not
----------
correct or that the matters set forth in the Compliance Certificate
delivered therewith pursuant to Section 8.1(d)(ii) for the applicable
------------------
Fiscal Year are not stated in accordance with the terms of this
Agreement. The statement referred to above shall be accompanied by (x)
a copy of the management letter or any similar report delivered to the
Parent Guarantor or to any officer or employee thereof by such
accountants in connection with such Financial Statements and (y) a
letter in substantially the form of EXHIBIT O attached hereto and made
---------
a part hereof from the Parent Guarantor to such accountants informing
such accountants that the Lenders are relying upon the Financial
Statements audited by such accountants and delivered to the Agent and
the Lenders pursuant to Section 8.1(c) and that a primary intent of
--------------
the Parent Guarantor in having such Financial Statements audited is to
induce the Lenders to continue to make Loans to the Borrower under
this Agreement. The Agent and each Lender may, with the written
consent of the Parent Guarantor (which consent shall not be
unreasonably withheld or delayed), communicate directly with such
accountants.
(f) Budgets; Business Plans; Financial Projections. As
----------------------------------------------
soon as practicable and in any event not later than thirty (30) days
before the commencement of each Fiscal Year of the Parent Guarantor
for each of the Parent Guarantor's Fiscal Years ending November 30,
1997 and thereafter, (i) a monthly budget for such Fiscal Year; (ii)
an annual business plan for such Fiscal Year, substantially in the
form of the business plan heretofore delivered to the Agent and the
Lenders, accompanied by a report reconciling all changes and
departures from the business plan delivered to the Agent and the
Lenders for the preceding Fiscal Year; and (iii) a consolidated plan
and financial forecast, prepared in accordance with the Parent
Guarantor's normal accounting procedures applied on a consistent
basis, for each succeeding Fiscal Year of the Parent Guarantor and its
Subsidiaries until the scheduled Term Loan Termination Date (during
the Term Loan Period) or Acquisition Facility Termination Date (during
the Acquisition Facility Period), including, without limitation, (A) a
forecasted consolidated balance sheets and statements of cash flow of
the Parent Guarantor for each Fiscal Year, (B) forecasted consolidated
and consolidating balance sheets, statements of earnings and retained
earnings, and cash flow of the Parent Guarantor and its Subsidiaries
for and as of the end of each fiscal quarter of such Fiscal Year, (C)
the amount of forecasted Capital Expenditures and Excess Cash Flow for
such Fiscal Year, and (D) forecasted compliance with the provisions of
Article XI.
- ----------
8.2 [Reserved].
--------
8.3 Events of Default. Promptly upon any of the chief executive
-----------------
officer, chief operating officer, chief financial officer, treasurer
or controller of the Parent Guarantor obtaining knowledge (a) of any
condition or event which constitutes an Event of Default or Potential
Event of Default, or becoming aware that any Lender or the Agent has
given any notice with respect to a claimed Event of Default or
Potential Event of Default under this Agreement, (b) that any Person
has given any notice to the Parent Guarantor or any Subsidiary of the
Parent Guarantor or taken any other action with respect to a claimed
default or event or condition of the type referred to in Section
-------
12.1(e), or (c) of any condition or event which has resulted, or is
- -------
reasonably likely to result, in a Material Adverse Effect or affect
the value of, or the Agent's interest in, the Collateral in any
material respect, the Parent Guarantor shall deliver to the Agent and
the Lenders an Officer's Certificate specifying (i) the nature and
period of existence of any such claimed default, Event of Default,
Potential Event of Default, condition or event, (ii) the notice given
or action taken by such Person in connection therewith, and (iii) what
action the Parent Guarantor has taken, is taking and proposes to take
with respect thereto.
8.4 Lawsuits. (a) Institution of Proceedings. Promptly upon the
-------- --------------------------
Parent Guarantor obtaining knowledge of the institution of, or written
threat of, any action, suit, proceeding, governmental investigation or
arbitration against or affecting the Parent Guarantor or any of its
Subsidiaries or any of the Property not previously disclosed pursuant
to Section 7.1(k), which action, suit, proceeding, governmental
--------------
investigation or arbitration exposes, or in the case of multiple
actions, suits, proceedings, governmental investigations or
arbitrations arising out of the same general allegations or
circumstances which expose, in the Parent Guarantor's reasonable
judgment, the Parent Guarantor and/or any of its Subsidiaries to
liability in an amount aggregating $500,000 or more (exclusive of
claims covered by insurance policies of the Parent Guarantor and its
Subsidiaries unless the insurers of such claims have disclaimed
coverage or reserved the right to disclaim coverage on such claims),
the Parent Guarantor shall give written notice thereof to the Agent
and the Lenders and provide such other information as may be
reasonably available to enable the each Lender and the Agent and its
counsel to evaluate such matters.
(b) Quarterly Reports. As soon as practicable and in any
-----------------
event within forty-five (45) days after the end of each fiscal quarter
of the Parent Guarantor, the Parent Guarantor shall provide a written
quarterly report to the Agent and the Lenders covering (to the extent
not previously reported or disclosed in any other report delivered
hereunder) the status of, and any significant developments in, any
action, suit, proceeding, governmental investigation or arbitration
which is required to be reported to the Agent and the Lenders pursuant
to Section 8.4(a), and shall provide such other information at such
--------------
time as may be reasonably available to enable each Lender and the
Agent and its counsel to evaluate such matters.
8.5 Insurance. As soon as practicable and in any event by the
---------
last day of each calendar year, the Parent Guarantor shall deliver to
the Agent and the Lenders (a) a report in form and substance
reasonably satisfactory to the Agent outlining all material insurance
coverage maintained as of the date of such report by the Parent
Guarantor and its Subsidiaries and the duration of such coverage and
(b) evidence that all premiums with respect to such coverage have been
paid when due.
8.6 ERISA Notices. The Parent Guarantor shall deliver or cause
-------------
to be delivered to the Agent, at the Parent Guarantor's expense, the
following information and notices as soon as reasonably possible, and
in any event:
(a) within ten (10) Business Days after the Parent
Guarantor or any ERISA Affiliate knows or has reason to know
that a Termination Event has occurred, a written statement of
the chief financial officer of the Parent Guarantor describing
such Termination Event and the action, if any, which the Parent
Guarantor or any ERISA Affiliate has taken, is taking or
proposes to take with respect thereto, and when known, any
action taken or threatened by the IRS, DOL or PBGC with respect
thereto;
(b) within ten (10) Business Days after the Parent
Guarantor or any of its Subsidiaries knows or has reason to know
that an assessment of a prohibited transaction excise tax under
Section 4975 of the Internal Revenue Code has occurred, a
statement of the chief financial officer of the Parent Guarantor
describing such transaction and the action which the Parent
Guarantor or any ERISA Affiliate has taken, is taking or
proposes to take with respect thereto;
(c) within three (3) Business Days after the filing of the
same with the DOL, IRS or PBGC, copies of each annual report
(form 5500 series), including Schedule B thereto, filed with
respect to each Benefit Plan;
(d) within three (3) Business Days after receipt by the
Parent Guarantor or any ERISA Affiliate of each actuarial report
for any Benefit Plan or Multiemployer Plan and each annual
report for any Multiemployer Plan, copies of each such report;
(e) within three (3) Business Days after the filing of the
same with the IRS, a copy of each funding waiver request filed
with respect to any Benefit Plan and all communications received
by the Parent Guarantor or any ERISA Affiliate with respect to
such request;
(f) within three (3) Business Days after the occurrence
any material increase in the benefits of any existing Benefit
Plan or the establishment of any new Benefit Plan or the
commencement of contributions to any Benefit Plan to which the
Parent Guarantor or any ERISA Affiliate was not previously
contributing, notification of such increase, establishment or
commencement;
(g) within three (3) Business Days after the Parent
Guarantor or any ERISA Affiliate receives notice of the PBGC's
intention to terminate a Benefit Plan or to have a trustee
appointed to administer a Benefit Plan, copies of each such
notice;
(h) within three (3) Business Days after the Parent
Guarantor or any Subsidiary of the Parent Guarantor receives
notice of any unfavorable determination letter from the IRS
regarding the qualification of a Plan under Section 401(a) of
the Internal Revenue Code, copies of each such notice and
letter;
(i) within three (3) Business Days after the Parent
Guarantor or any ERISA Affiliate receives notice from a
Multiemployer Plan regarding the imposition of withdrawal
liability, copies of each such notice;
(j) within three (3) Business Days after the Parent
Guarantor or any ERISA Affiliate fails to make a required
installment or any other required payment under Section 412 of
the Internal Revenue Code on or before the due date for such
installment or payment, a notification of such failure;
(k) within three (3) Business Days after the Parent
Guarantor or any ERISA Affiliate knows (A) a Multiemployer Plan
has been terminated, (B) the administrator or plan sponsor of a
Multiemployer Plan intends to terminate a Multiemployer Plan, or
(C) the PBGC has instituted or will institute proceedings under
Section 4042 of ERISA to terminate a Multiemployer Plan; and
(l) within ten (10) Business Days after the Parent
Guarantor receives written notice from the Agent requesting the
same, copies of any Foreign Employee Benefit Plan and related
documents, reports and correspondence specified in such notice.
For purposes of this Section 8.7, the Parent Guarantor and any ERISA
-----------
Affiliate shall be deemed to know all facts known by the Administrator
of any Plan of which the Parent Guarantor or any ERISA Affiliate is
the plan sponsor.
8.7 Environmental Notices. (a) The Parent Guarantor
---------------------
shall notify the Agent in writing, promptly upon the Parent
Guarantor's learning thereof, of any:
(i) notice or claim to the effect that the Parent
Guarantor or any Subsidiary of the Parent Guarantor is or may be
liable to any Person as a result of the Release or threatened
Release of any Contaminant into the environment;
(ii) notice that the Parent Guarantor or any Subsidiary of
the Parent Guarantor is subject to investigation by any
Governmental Authority evaluating whether any Remedial Action is
needed to respond to the Release or threatened Release of any
Contaminant;
(iii) notice that any Property is subject to an
Environmental Lien;
(iv) notice to the Parent Guarantor or any
Subsidiary of the Parent Guarantor of any violation of
any Environmental, Health or Safety Requirement of Law;
(v) condition which might reasonably result in a
violation of any Environmental, Health or Safety
Requirement of Law;
(vi) commencement or threat of any judicial or
administrative proceeding alleging a violation by the Parent
Guarantor or any Subsidiary of the Parent Guarantor of any
Environmental, Health or Safety Requirement of Law;
(vii) new or proposed changes to any existing
Environmental, Health or Safety Requirement of Law that could or
does result in a Material Adverse Effect;
(viii) any filing or report made by the Parent Guarantor
or any Subsidiary of the Parent Guarantor with any Governmental
Authority with respect to any unpermitted Release or threatened
Release of a Contaminant; or
(ix) any Claims made by the Parent Guarantor or any
Subsidiary against any insurer, or by any Person against the
Parent Guarantor or any Subsidiary thereof, concerning
environmental, health or safety matters, conditions or concerns.
(b) Within forty-five (45) days after the end of each
Fiscal Year, the Parent Guarantor shall submit to the Agent and the
Lenders a report summarizing the status of environmental, health or
safety compliance, hazard or liability issues identified in notices
required pursuant to Section 8.8(a), disclosed on SCHEDULE 7.1-S or
------------- --------------
identified in any notice or report required herein.
8.8 Labor Matters. The Parent Guarantor shall notify the Agent
-------------
in writing, promptly upon the Parent Guarantor's learning thereof, of
(i) any material labor dispute to which the Parent Guarantor or any
Subsidiary of the Parent Guarantor may become a party, including,
without limitation, any strikes, lockouts or other grievances relating
to such Persons' plants and other facilities and (ii) any material
liability relating to its employees incurred with respect to the
closing of any plant or other facility of the Parent Guarantor or any
Subsidiaries of the Parent Guarantor.
8.9 Senior Subordinated Notes. The Parent Guarantor shall
-------------------------
deliver a copy to the Agent of (a) any notice or other communication
(other than routine correspondence and notices otherwise required to
be delivered hereunder) delivered by or on behalf of the Parent
Guarantor to any Person in connection with any agreement or other
document relating to the Senior Subordinated Notes at the same time
and by the same means as such notice or other communication is
delivered to such Person and (b) any material notice or other material
communication received by the Parent Guarantor from any Person in
connection with any Senior Subordinated Note Document promptly after
such notice or other communication is received by the Parent
Guarantor.
8.10 Other Reports. The Parent Guarantor shall deliver or cause
-------------
to be delivered to the Agent copies of all Financial Statements,
reports and notices, if any, sent or made available generally by the
Parent Guarantor to its Securities holders or filed with the
Commission and all press releases made available generally by the
Parent Guarantor or any Subsidiary of the Parent Guarantor to the
public concerning material developments in the business of the Parent
Guarantor or any such Subsidiary of the Parent Guarantor.
8.11 Other Information. Promptly upon receiving a request
-----------------
therefor from the Agent or the Requisite Lenders, the Parent Guarantor
shall prepare and deliver to the Agent such other information with
respect to the Parent Guarantor, any of its Subsidiaries, or the
Collateral, including, without limitation, schedules identifying and
describing the Collateral and any dispositions thereof, as from time
to time may be reasonably requested by the Agent or the Requisite
Lenders.
ARTICLE IX
AFFIRMATIVE COVENANTS
The Borrower and the Parent Guarantor covenant and agree
that so long as any Commitments are outstanding and thereafter until
payment in full of all of the Obligations (other than indemnities not
yet due), unless the Requisite Lenders shall otherwise give prior
written consent:
9.1 Corporate Existence, Etc. Other than in connection with
------------------------
dispositions permitted by Section 10.2(a), the Parent Guarantor shall,
---------------
and shall cause each of its Subsidiaries to, at all times maintain its
corporate existence and preserve and keep, or cause to be preserved
and kept, in full force and effect its rights and franchises material
to its businesses.
9.2 Corporate Powers; Conduct of Business. The Parent Guarantor
-------------------------------------
shall, and shall cause each of its Subsidiaries to, qualify and remain
qualified to do business and maintain its good standing in each
jurisdiction in which the nature of its business and the ownership of
its Property requires it to be so qualified and in good standing,
except in those instances in which the failure to be so qualified and
in good standing would not, in the aggregate, result in a Material
Adverse Effect.
9.3 Compliance with Laws, Etc. The Parent Guarantor shall, and
-------------------------
shall cause each of its Subsidiaries to, (a) comply with all
Requirements of Law and all restrictive covenants affecting it or its
business, Property, assets or operations and (b) obtain as needed all
Permits necessary for its operations and maintain such Permits in good
standing, except in those instances in which the failure to so comply
and obtain Permits would not, in the aggregate, result in a Material
Adverse Effect.
9.4 Payment of Taxes and Claims; Tax Consolidation. The Parent
----------------------------------------------
Guarantor shall, and shall cause each of its Subsidiaries to, pay (a)
all taxes, assessments and other governmental charges or levies
imposed upon it or on any of its Property or assets or in respect of
any of its franchises, business, income, sales, capital, profit or
Property before any penalty or interest accrues thereon, and (b) all
Claims (including, without limitation, claims for labor, services,
materials and supplies) for sums which have become due and payable and
which by law have or may become a Lien (other than a Lien permitted by
Section 10.3) upon any of the Parent Guarantor's or such Subsidiary's
- ------------
Property or assets, prior to the time when any penalty or fine shall
be incurred with respect thereto; provided, however, that no such
-------- -------
taxes, assessments and governmental charges referred to in clause (a)
----------
above or Claims referred to in clause (b) above need be paid if being
----------
contested in good faith by appropriate proceedings diligently
instituted and conducted and if such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall
have been made therefor. The Parent Guarantor will not, nor will it
permit any of its Subsidiaries to, file or consent to the filing of
any consolidated income tax return with any Person (other than the
Parent Guarantor and its Subsidiaries).
9.5 Insurance. The Parent Guarantor shall maintain for itself
---------
and its Subsidiaries, or shall cause each of its Subsidiaries to
maintain in full force and effect the insurance policies and programs
listed on SCHEDULE 7.1-AA or substantially similar policies and
---------------
programs or other policies and programs as are acceptable to the
Agent. All such policies and programs shall be maintained with
responsible and reputable insurance companies which cover such risks
as are insured against by other Persons engaged in similar businesses
and owning similar property in the same general geographic areas in
which the Parent Guarantor and/or its Subsidiaries operate. Each
certificate and policy relating to Property damage, boiler and
machinery and/or business interruption coverage shall contain an
endorsement, in form and substance acceptable to the Agent, showing
loss payable to the Agent, for the benefit of the Secured Parties,
and, if required by the Agent, naming the Agent as an additional
insured under such policy. Each certificate and policy relating to
coverage other than the foregoing shall, if required by the Agent,
contain an endorsement naming the Agent as an additional insured under
such policy. Such endorsement or an independent instrument furnished
to the Agent shall provide that the insurance companies will give the
Agent at least thirty (30) days' written notice before any such policy
or policies of insurance shall be altered adversely to the interests
of the Secured Parties or cancelled and that no act, whether willful
or negligent, or default of the Parent Guarantor, any of its
Subsidiaries or any other Person shall affect the right of the Agent
to recover under such policy or policies of insurance in case of loss
or damage. In the event the Parent Guarantor or any of its
Subsidiaries, at any time or times hereafter shall fail to obtain or
maintain any of the policies or insurance required herein or to pay
any premium in whole or in part relating thereto, then the Agent,
without waiving or releasing any obligations or resulting Event of
Default hereunder, may at any time or times thereafter (but shall be
under no obligation to do so) obtain and maintain such policies of
insurance and pay such premiums anion with respect thereto which the
Agent deems advisable. All sums so disbursed by the Agent shall
constitute Protective Advances hereunder and be part of the
Obligations, payable as provided in this Agreement.
9.6 Inspection of Property; Books and Records; Discussions. The
------------------------------------------------------
Parent Guarantor shall, and shall cause each of its Subsidiaries to,
permit any authorized representative(s) designated by either the Agent
or any Lender to visit and inspect, whether by access to the Parent
Guarantor's and its Subsidiaries' MIS or otherwise, any of the
Property, to examine, audit, check and make copies of its respective
financial and accounting records, books, journals, orders, receipts
and any correspondence (other than privileged correspondence with
legal counsel) and other data relating to their respective businesses
or the transactions contemplated hereby or referenced herein
(including, without limitation, in connection with environmental
compliance, hazard or liability), and to discuss their affairs,
finances and accounts with their officers, management personnel, and
independent certified public accountants, all upon reasonable written
notice (delivered no less than two Business Days in advance of the
visit, except when a Potential Event of Default or Event of Default
has occurred and is continuing) and at such reasonable times during
normal business hours, as often as may be reasonably requested. Each
such visitation and inspection (i) by or on behalf of any Lender shall
be at such Lender's expense and (ii) by or on behalf of the Agent
shall be at the Parent Guarantor's expense. The Parent Guarantor shall
keep and maintain, and cause each of its Subsidiaries to keep and
maintain, in all material respects on its MIS and otherwise proper
books of record and account in which entries in conformity with GAAP
shall be made of all dealings and transactions in relation to its
respective businesses and activities, including, without limitation,
transactions and other dealings with respect to the Collateral. If an
Event of Default has occurred and is continuing, the Parent Guarantor,
upon the Agent's request, shall, and shall cause each of its
Subsidiaries to, turn over copies of any such records to the Agent or
its representatives.
9.7 Required Hedge Agreements. (a) The Parent Guarantor shall
-------------------------
cause the Borrower to enter into one or more Hedge Agreements with
respect to the Term Loans such that at all times after March 31, 1998,
a minimum of 50% aggregate outstanding principal balance of the Term
Loans shall be covered by such Hedge Agreements. If, at any time after
March 31, 1998, the Base Eurodollar Rate with respect to a three-month
Eurodollar Interest Period shall exceed 7.4% per annum, the Parent
--- -----
Guarantor shall cause the Borrower to immediately begin arrangements
to enter into one or more additional Hedge Agreements such that, after
giving effect thereto, the entire aggregate outstanding principal
balance of the Term Loans shall be covered by Hedge Agreements. To the
extent that it has not done so already, the Parent Guarantor shall
cause the Borrower to immediately enter into the Hedge Agreements
described in the immediately preceding sentence if, at any time after
March 31, 1998, the Base Eurodollar Rate with respect to a three-month
Eurodollar Interest Period shall exceed 7.5% per annum.
--- -----
(b) The Borrower shall enter into one or more Hedge
Agreements with respect to the Acquisition Facility Term Loans such
that at all times that Acquisition Facility Term Loans are
outstanding, a minimum of 50% aggregate outstanding principal balance
of the Acquisition Facility Term Loans shall be covered by such Hedge
Agreements. If, at any time that Acquisition Facility Term Loans are
outstanding, the Base Eurodollar Rate with respect to a three-month
Eurodollar Interest Period shall exceed 7.4% per annum, the Parent
--- -----
Guarantor shall cause the Borrower to immediately begin arrangements
to enter into one or more additional Hedge Agreements such that, after
giving effect thereto, the entire aggregate outstanding principal
balance of the Acquisition Facility Term Loans shall be covered by
Hedge Agreements. To the extent that it has not done so already, the
Parent Guarantor shall cause the Borrower to immediately enter into
the Hedge Agreements described in the immediately preceding sentence
if, at any time that Acquisition Facility Term Loans are outstanding,
the Base Eurodollar Rate with respect to a three-month Eurodollar
Interest Period shall exceed 7.5% per annum.
--- -----
9.8 Insurance and Condemnation Proceeds. The Parent Guarantor
-----------------------------------
hereby directs (and, if applicable, shall cause its Subsidiaries to
direct) all insurers under policies of Property damage, boiler and
machinery and business interruption insurance and payors of any
condemnation claim or award relating to the Property to pay all
proceeds payable under such policies or with respect to such claim or
award directly to the Agent, for the benefit of the Agent, the Issuing
Banks and the Lenders. In no case shall such proceeds be payable to
the Parent Guarantor or one or more of its Subsidiaries and the Agent.
In the event proceeds of insurance received by the Agent under
Property damage, boiler and machinery policies, business interruption
insurance policies, or with respect to a condemnation claim or award
exceed $200,000 and do not constitute Replacement Proceeds, the Agent
shall, upon receipt of such proceeds, apply all of the proceeds so
received in repayment of the Obligations in the manner set forth in
Section 4.1(b)(vi)(B). Notwithstanding the foregoing, in the event
- ---------------------
proceeds of insurance received by the Agent under property damage,
boiler and machinery policies or business interruption insurance
policies (i) is less than $200,000 or (ii) constitutes Replacement
Proceeds, the Agent shall, upon receipt of such proceeds, remit the
amount so received to the Parent Guarantor or a Subsidiary of the
Parent Guarantor, as applicable; provided, however, in the case of an
-------- -------
insurance payment or condemnation award in an amount greater than
$200,000, if (i) the Agent receives notice from the Parent Guarantor
that it or its Subsidiary, as applicable, does not
intend to restore, rebuild or replace the Property subject to such
insurance payment or condemnation award, (ii) the Parent Guarantor or
its applicable Subsidiary fails to replace or use its best efforts to
commence the restoration or rebuilding of such Property within 180
days after the Agent's receipt of the proceeds of such insurance
payment or condemnation award, (iii) on, rebuilding or replacement of
such Property, the unused proceeds from such insurance payment or
condemnation award exceed $200,000, or (iv) such proceeds exceed
$200,000, then (x) upon the occurrence of either of the events
described in clauses (i) or (ii) above, all such proceeds, and (y)
----------- ----
upon the occurrence of either of the events described in clauses (iii)
-------------
or (iv) above, such excess, shall constitute Net Cash Proceeds of Sale
----
received by the Parent Guarantor or a Subsidiary of the Parent
Guarantor and shall be applied to the Obligations pursuant to the
terms of Section 4.1(b).
--------------
9.9 ERISA Compliance. The Parent Guarantor shall, and shall
----------------
cause each of its Subsidiaries and ERISA Affiliates to, establish,
maintain and operate all Plans to comply in all material respects with
the provisions of ERISA, the Internal Revenue Code, all other
applicable laws, and the regulations and interpretations thereunder
and the respective requirements of the governing documents for such
Plans.
9.10 Foreign Employee Benefit Plan Compliance. The Parent
----------------------------------------
Guarantor shall, and shall cause each of its Subsidiaries and ERISA
Affiliates to, establish, maintain and operate all Foreign Employee
Benefit Plans to comply in all material respects with all laws,
regulations and rules applicable thereto and the respective
requirements of the governing documents for such Plans.
9.11 Cash Management System. On or before October 21, 1997, (a)
----------------------
the Parent Guarantor shall establish a cash management system,
satisfactory to the Agent, that shall include deposit accounts,
investment accounts and/or cash management accounts into which all
Receivables and other revenues of the Parent Guarantor and each of its
Subsidiaries shall be deposited; (b) the Parent Guarantor shall
instruct each of its account debtors in writing, and shall cause each
of its Subsidiaries to instruct each of such Subsidiary's account
debtors in writing, to make payments to the Parent Guarantor or such
Subsidiary, as the case may be, to the appropriate account included in
the cash management system approved under this Section 9.11; and (c)
------------
the Parent Guarantor shall obtain, and shall cause each of its
Subsidiaries to obtain, restricted account agreements in form and
substance satisfactory to the Agent from each depositary institution
which maintains any account of such Person that exists as of the date
of this Agreement and that will continue to be maintained as part of
the cash management system approved pursuant to this Section 9.11.
------------
Each such deposit account, investment account and/or cash management
account and all cash, instruments and securities that shall be on
deposit therein from time to time shall be subject to the Lien of the
Agent for the benefit of the Secured Parties to secure the Obligations
and the obligations of the Parent Guarantor and each of its
Subsidiaries under the Loan Documents. Commencing on the date on which
the Agent approves the Parent Guarantor's cash management system
pursuant to this Section 9.11 but subject to the last sentence of this
------------
Section 9.11, neither the Parent Guarantor nor any of its Subsidiaries
- ------------
shall maintain any deposit account, investment account or cash
management account not included in such approved cash management
system. Notwithstanding the foregoing, the Parent Guarantor and its
Subsidiaries may maintain payroll accounts and petty cash accounts
that are management system, provided that payroll accounts and petty
cash accounts are maintained and utilized in the ordinary course of
business in a manner consistent with past practice.
9.12 Maintenance of Property. The Parent Guarantor shall, and
-----------------------
shall cause each of its Subsidiaries to, maintain in all material
respects all of its respective owned and leased Property in good, safe
and insurable condition and repair, ordinary wear and tear excepted,
and not permit, commit or suffer any waste or abandonment of any such
Property and from time to time shall make or cause to be made all
material repairs, renewal and replacements thereof, including, without
limitation, any capital improvements which may be required; provided,
--------
however, that such Property may be altered or renovated in the
- -------
ordinary course of the Parent Guarantor's or its Subsidiaries'
business.
9.13 Condemnation. Immediately upon receiving written notice of
------------
the institution of any proceeding for the condemnation or other taking
of any of the owned or leased Real Property of the Parent Guarantor or
any Subsidiary of the Parent Guarantor, the Parent Guarantor shall
notify the Agent of the pendency of such proceeding, and permit the
Agent to participate in any such proceeding, and from time to time
will deliver to the Agent all instruments reasonably requested by the
Agent to permit such participation.
9.14 Liens on Real Property. (a) With respect to each parcel of
----------------------
Real Property described on SCHEDULE 9.14, the Parent Guarantor and its
-------------
applicable Subsidiaries shall, no later than forty-five (45) days
after the Closing Date, deliver to the Agent for the benefit of the
Secured Parties, title insurance policies (mortgagee's form),
certified surveys, appraisals (which meet or exceed the minimum
appraisal standards set forth in the Financial Institutions Reform,
Recovery and Enforcement Act (12 C.F.R. ss.4 (1990)), as amended), and
local counsel opinions with respect thereto and such other agreements,
documents and instruments which the Agent deems necessary or
desirable, the same to be in form and substance acceptable to the
Agent and to be subject only to (i) Liens permitted under Section 10.3
------------
and (ii) such other Liens as the Agent and Lenders may reasonably
approve.
(b) Upon the request of the Agent, the Parent Guarantor
shall, and shall cause its Subsidiaries to, execute and deliver to the
Agent, for the benefit of the Secured Parties, immediately upon the
acquisition or leasing of any Real Property by the Parent Guarantor or
any Subsidiary of the Parent Guarantor, a mortgage, deed of trust,
assignment or other appropriate instrument evidencing a Lien upon any
such Real Property, lease or interest, together with such title
insurance policies (mortgagee's form), certified surveys, appraisals
(which meet or exceed the minimum appraisal standards set forth in the
Financial Institutions Reform, Recovery and Enforcement Act (12 C.F.R.
ss.4 (1990)), as amended), and local counsel opinions with respect
thereto and such other agreements, documents and instruments which the
Agent deems necessary or desirable, the same to be in form and
substance acceptable to the Agent and to be subject only to (a) Liens
permitted under Section 10.3 and (b) such other Liens as the Agent and
------------
Lenders may reasonably approve, it being understood that the granting
of such additional security for the Obligations is a material
inducement to the execution and delivery of this Agreement by each
Lender.
9.15 Consignee/Bailee Letters; Filings. The Parent Guarantor
---------------------------------
shall, and cause each of its Subsidiaries to, obtain consignee or
bailee letters (as applicable) substantially in the form attached
hereto as EXHIBIT P from each consignee or bailee of Inventory
---------
(separately or in the aggregate) having a minimum value (at the lower
of cost or market) of $250,000, promptly upon delivery of such
Inventory to such consignee or bailee, and (ii) cause to be executed
and delivered to the Agent concurrently with execution and delivery of
such consignee or bailee letter, UCC financing statements in form and
substance satisfactory to the Agent with respect to Inventory located
on the premises of such consignee or bailee.
9.16 Newly Acquired Subsidiaries; Execution of Guaranty; Pledge
----------------------------------------------------------
of Capital Stock. The Parent Guarantor shall cause each Subsidiary
- ----------------
that the Parent Guarantor acquires directly or indirectly after the
effective date of this Agreement to execute and deliver to the Agent,
promptly after such Subsidiary is so acquired, a Guaranty and (where
requested by the Agent) a Guarantor Mortgage, and/or any Canadian
Security Documents requested by the Agent. The Parent Guarantor or the
Subsidiary of the Parent Guarantor that directly acquires the new
Subsidiary shall, promptly after such new Subsidiary is so acquired,
pledge all of Capital Stock of, and other equity interests in, such
Subsidiary to the Agent for the benefit of the Lenders pursuant to the
Parent Guarantor Stock Pledge Agreement (if the new Subsidiary is
acquired directly by the Parent Guarantor), Subsidiary Stock Pledge
Agreement (if the new Subsidiary is acquired by a Subsidiary of the
Parent Guarantor) or other agreement with terms and conditions
substantially identical thereto, and shall promptly execute such stock
powers, deliver such certificates and take such other action as the
Agent shall reasonably request in order to allow the Agent to perfect
its security interest in such Capital Stock or other equity interests.
9.17 Interest in Industra Service Corporation. The Parent
----------------------------------------
Guarantor shall, on or before November 30, 1997, either (a) acquire
(i) all of the issued and outstanding shares of Industra Service
Corporation that it does not own as of the date of this Agreement and
(ii) all warrants, options or other present or future rights that any
Person other than the Parent Guarantor may have to acquire any shares
of Industra Service Corporation or (b) otherwise cause Industra
Service Corporation to become a Wholly- Owned Subsidiary of the Parent
Guarantor.
9.18 Certain Motor Vehicles. The Parent Guarantor shall, on or
----------------------
before October 21, 1997, cause the Agent to have a perfected
first-priority security interest in each motor vehicle owned by the
Parent Guarantor or any of its Subsidiaries if (a) title to such motor
vehicle is evidenced by a certificate of title and (b) the fair market
value of such motor vehicle is greater than or equal to $50,000.
9.19 Further Assurances. The Parent Guarantor shall, and shall
------------------
cause each of its Subsidiaries to, at the request of the Agent,
execute, deliver and furnish such documents or take such further
action as the Agent may reasonably deem necessary or desirable to
evidence the Obligations, perfect the security therefor, or otherwise
carry out the terms of this Agreement. Without limiting the generality
of the foregoing, the Parent Guarantor shall deliver to the Agent in a
timely fashion, or shall cause a Subsidiary of the Parent Guarantor to
deliver to the Agent in a timely fashion, each of the documents or
other materials identified as a "Post-Closing Item" in the List of
Closing Documents attached hereto as EXHIBIT M.
---------
ARTICLE X
NEGATIVE COVENANTS
The Borrower and the Parent Guarantor covenant and agree that it
shall comply with the following covenants so long as any Commitments
are outstanding and thereafter until payment in full of all of the
Obligations (other than indemnities not yet due), unless the Requisite
Lenders shall otherwise give prior written consent:
10.1 Indebtedness. The Parent Guarantor shall not and shall not
------------
permit any of its Subsidiaries to directly or indirectly create,
incur, assume or otherwise become or remain directly or indirectly
liable with respect to any Indebtedness, except:
(a) the Obligations;
(b) Indebtedness for trade payables, wages and
other accrued expenses incurred in the ordinary course
of business;
(c) the Transaction Costs;
(d) Permitted Existing Indebtedness;
(e) to the extent permitted by Article XI and in any event
----------
in an aggregate amount not to exceed $4,000,000 at any time,
Capital Leases and purchase money Indebtedness incurred to
finance the acquisition of fixed assets, and Indebtedness
incurred to refinance such Capital Leases and purchase money
Indebtedness;
(f) Indebtedness in respect of taxes, assessments,
governmental charges and Claims for labor, materials or
supplies, to the extent that payment thereof is not required
pursuant to Section 9.4;
-----------
(g) Indebtedness constituting Accommodation
Obligations permitted by Section 10.5;
------------
(h) Indebtedness arising from intercompany loans (i) from
the Parent Guarantor to the Borrower or any Subsidiary
Guarantor, (ii) from the Borrower to any Guarantor or (iii) from
any Subsidiary to the Parent Guarantor or any Guarantor;
provided that all such Indebtedness shall be unsecured and
--------
subordinated in right of payment to the Obligations; provided
--------
further, that no such intercompany loans shall be made to any
-------
Restricted Subsidiary;
(i) the Senior Subordinated Notes;
(j) Indebtedness in respect of profit sharing
plans to the extent permitted under Section 10.4;
------------
(k) Indebtedness in respect of the Hedge Agreements (i)
required or permitted under Section 9.7 and (ii) in respect of
-----------
foreign exchange contracts containing terms reasonably
acceptable to the Agent and purchased from a Lender, an
Affiliate of a Lender or such other Person reasonably acceptable
as a credit matter to the Agent;
(l) Indebtedness with respect to reasonable warranties and
indemnities made under any agreements for asset sales permitted
under Section 10.2 and Contractual Obligations of the Parent
------------
Guarantor or any Subsidiary of the Parent Guarantor entered into
in the ordinary course of its business;
(m) Indebtedness under appeal bonds in connection with
judgments which do not result in an Event of Default or a
Potential Event of Default or any other breach hereunder,
provided that the aggregate amount of all such Indebtedness does
-------- ----
not exceed $1,000,000;
(n) Indebtedness assumed in connection with
acquisitions of assets which satisfy the criteria specified
in Section 6.3;
-----------
(o) Indebtedness under performance bonds entered into
in the ordinary course of business consistent with past
practice;
(p) Indebtedness constituting Investments permitted
by Section 10.4(f);
---------------
(q) in addition to the Indebtedness permitted by clauses
-------
(a) through (p) above, other unsecured Indebtedness in an
--- ---
aggregate amount not to exceed $2,000,000 at any time
outstanding.
10.2 Sales of Assets. The Parent Guarantor shall not and shall
---------------
not permit any of its Subsidiaries to sell, assign, transfer, lease,
convey or otherwise dispose of any Property, whether now owned or
hereafter acquired, or any income or profits therefrom, or enter into
any agreement to do so, except:
(a) the sale of Property with an aggregate Fair Market
Value in any Fiscal Year of no more than $500,000 for
consideration paid in cash not less than the Fair Market Value
thereof so long as the Parent Guarantor complies with the
mandatory prepayment provisions set forth in Section 4.1(b) and
--------------
the conditions to the release of Collateral described in Section
-------
13.9(c);
-------
(b) the transfer of Property (i) from a Subsidiary of the
Parent Guarantor to the Parent Guarantor or (ii) from a
Subsidiary of the Parent Guarantor to a Subsidiary Guarantor;
provided, however, that no Property shall be transferred by the
-------- -------
Parent Guarantor or any Subsidiary of the Parent Guarantor to a
Restricted Subsidiary;
(c) the sale of Inventory in the ordinary course
of the Parent Guarantor's and its Subsidiaries
respective businesses;
(d) the disposition of Equipment if (i) such Equipment is
obsolete or no longer useful in the ordinary course of the
Parent Guarantor's or such Subsidiary's business, provided that
-------- ----
the aggregate Fair Market Value of all such Equipment disposed
of in any Fiscal Year shall not exceed $1,000,000 or (ii) within
six (6) months after such disposition, an amount equal to the
proceeds therefrom is either (A) used to finance the purchase of
replacement Equipment and the seller thereof delivers to the
Agent evidence of such use and that the replacement Equipment is
free and clear of all Liens except those created under or not
prohibited by the Loan Documents or (B) delivered to the Agent
for application to the repayment of the Obligations pursuant to
the mandatory prepayment provisions set forth in Section 4.1(b);
--------------
(e) the licensing of General Intangibles as
permitted by the Loan Documents;
(f) the sale of Investments in Cash Equivalents
permitted pursuant to Section 10.4(i);
---------------
(g) the sale of Property permitted pursuant to
Section 10.10;
-------------
(h) transfers of Property in connection with
Investments in joint ventures and Foreign Subsidiaries
permitted by Section 10.4(f); and
---------------
(i) the sale of the Capital Stock or substantially all the
assets of Eco Environmental, Inc. and Environmental Evolutions,
Inc. for cash consideration and/or promissory notes executed by
the buyer or buyers of such Capital Stock in an aggregate amount
not less than the Fair Market Value of such Capital Stock;
provided, that all such cash consideration constituting Net Cash
--------
Proceeds of Sale is applied to repay Indebtedness (other than
Subordinated Indebtedness) of the Parent Guarantor and the
Guarantors; and provided further, that all such promissory notes
-------- -------
are secured by the assets sold and pledged to the Agent for the
benefit of the Secured Parties.
10.3 Liens. The Parent Guarantor shall not and shall not permit
-----
any of its Subsidiaries to directly or indirectly create, incur,
assume or permit to exist any Lien on or with respect to any of their
respective Property or assets except:
(a) Liens created pursuant to the Loan Documents;
(b) Permitted Existing Liens;
(c) Customary Permitted Liens;
(d) purchase money Liens (including the interest of a
lessor under a Capital Lease or an Operating Lease having
substantially the same economic effect and Liens to which any
Property is subject at the time of the Parent Guarantor's or its
Subsidiary's purchase thereof) securing an amount not to exceed
$4,000,000 in the aggregate at any time or from time to time,
provided that such Liens shall not apply to any Property of the
-------- ----
Parent Guarantor or its Subsidiaries other than that purchased
or subject to such Capital Lease; and
(e) extensions, renewals, refundings and replacements of
Liens referred to in clauses (a) and (b) of this Section 10.3;
----------- --- ------------
provided that any such extension, renewal, refunding or
replacement of a Lien referred to in clause (b) shall be limited
----------
to the Property covered by the Lien extended, renewed, refunded
or replaced and that the obligations secured by any such
extension, renewal, refunding or replacement Lien shall be in an
amount not greater than the amount of the obligations then
secured by the Lien extended, renewed, refunded or replaced.
10.4 Investments. The Parent Guarantor shall not and shall not
-----------
permit any of its Subsidiaries to directly or indirectly make or own
any Investment except:
(a) Investments in Cash Equivalents;
(b) Permitted Existing Investments;
(c) (i) Investments in the form of advances to employees
in the ordinary course of business for moving, relocation and
travel expenses; and (ii) other loans to employees for any
lawful purpose, provided that (A) each loan permitted under this
-------- ----
subclause (ii) shall be evidenced by a promissory note and (B)
--------------
the aggregate principal amount of all such advances and loans at
any time outstanding shall not exceed $2,000,000;
(d) Investments received in connection with the bankruptcy
or reorganization of suppliers and customers and in settlement
of delinquent obligations of, and other disputes with, customers
and suppliers arising in the ordinary course of business;
(e) Investments by the Parent Guarantor in its
Subsidiaries which, if in the form of intercompany loans, would
be permitted under Section 10.1(h); provided, however, that the
--------------- -------- -------
Parent Guarantor shall make no Investment in a Restricted
Subsidiary;
(f) Investments pursuant to joint venture agreements and
investments in Foreign Subsidiaries in an aggregate outstanding
amount not to exceed $5,000,000 at any time;
(g) to the extent they constitute Investments,
contributions to and payments of benefits under any Plan in
existence as of the Closing Date as required by the benefit
commitments in such Plan as of the Closing Date; and
(h) Permitted Acquisitions, provided that the aggregate
--------
consideration paid (including without limitation Indebtedness
assumed) by the Parent Guarantor and its Subsidiaries for (i) a
single Permitted Acquisition shall not exceed the lesser of (A)
$5,000,000 and (B) five times EBITDA of the Target (based on the
financial statements of the Target for the period of four fiscal
quarters most recently ended, which financial statements shall
be in form acceptable to the Agent, and determined by
substituting "Target" for "Parent Guarantor" in the definition
of EBITDA and each defined term applicable thereto) and (ii) all
Permitted Acquisitions during any Fiscal Year (including, as one
Fiscal Year, the period from the Closing Date to November 30,
1998) shall not exceed $10,000,000.
10.5 Accommodation Obligations. The Parent Guarantor shall
-------------------------
not and shall not permit any of its Subsidiaries to directly or
indirectly create or become or be liable with respect to any
Accommodation Obligation, except:
(a) recourse obligations resulting from endorse-
ment of negotiable instruments for collection in the
ordinary course of its business;
(b) Permitted Existing Accommodation Obligations;
(c) Accommodation Obligations (i) arising under
the Loan Documents or (ii) included in the
Indebtedness permitted under Section 10.1(a); and
---------------
(d) Accommodation Obligations of the Parent Guarantor with
respect to (i) Contractual Obligations of a Subsidiary Guarantor
to provide goods or services or (ii) accounts payable of a
Subsidiary Guarantor, in each case arising in the ordinary
course of business; provided, however, that the Parent Guarantor
-------- -------
shall not directly or indirectly create or become liable with
respect to any Accommodation Obligation with respect to any
obligation of a Restricted Subsidiary;
(e) in addition to the Accommodation Obligations permitted
by clauses (a) through (d) above, other unsecured Accommodation
---------- ---
Obligations in an aggregate amount not to exceed $150,000 at any
time outstanding.
10.6 Restricted Junior Payments. The Parent Guarantor
--------------------------
shall not and shall not permit any of its Subsidiaries to declare or
make any Restricted Junior Payment, except:
(a) dividends or distributions to the Parent
Guarantor on the Capital Stock of any of its Subsid-
iaries;
(b) dividends or distributions to any Guarantor
on the Capital Stock of any of its Subsidiaries;
(c) payment of trustee fees and reimbursement of
expenses of the trustee, to the extent required by any
indenture governing Subordinated Indebtedness;
(d) payment in cash of regularly scheduled interest on (i)
the Senior Subordinated Notes in accordance with the terms of
the Senior Subordinated Note Documents (but not including
interest payments that may be due or would be due and payable
but may not be paid because of provisions of the Senior
Subordinated Note Documents relating to blockage of payments
thereunder)and (ii) other Subordinated Indebtedness in
accordance with the terms thereof; and
(e) so long as no Potential Event of Default or Event of
Default shall have occurred and be continuing or occurs as a
result thereof, repurchases of Capital Stock of the Parent
Guarantor, provided that the aggregate amount paid for such
--------
repurchases shall not exceed (i) $1,000,000 from the Closing
Date to November 30, 1998 and (ii) $1,000,000 in any Fiscal Year
thereafter.
10.7 Conduct of Business. The Parent Guarantor shall not and
-------------------
shall not permit any of its Subsidiaries to engage in any business
other than (a) the businesses engaged in by the Parent Guarantor and
its Subsidiaries on the date hereof and (b) any business or activities
which are substantially similar, related or incidental thereto.
10.8 Transactions with Shareholders and Affiliates. The Parent
---------------------------------------------
Guarantor shall not and shall not permit any of its Subsidiaries to
directly or indirectly enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange
of any property or the rendering of any service) with any holder or
holders of more than five percent (5%) of any class of equity
Securities of the Parent Guarantor, or with any other Affiliate of the
Parent Guarantor which is not its Subsidiary, on terms that are less
favorable to the Parent Guarantor or such Subsidiary of the Parent
Guarantor, as applicable, than those that might be obtained in an
arm's length transaction at the time from Persons who are not such a
holder or Affiliate. Nothing contained in this Section 10.8 shall
------------
prohibit (a) any transaction expressly permitted by Sections 10.5 and
-------------
10.6; (b) increases in compensation and benefits for officers,
- ----
directors and employees of the Parent Guarantor or any of its
Subsidiaries which are customary in the industry or consistent with
the past business practice of the Parent Guarantor or such Subsidiary,
provided that no Event of Default or Potential Event of Default has
- -------- ----
occurred and is continuing; (c) payment of customary directors' fees
and indemnities; or (d) performance of any obligations arising under
the Loan Documents.
10.9 Restriction on Fundamental Changes. The Parent Guarantor
----------------------------------
shall not and shall not permit any of its Subsidiaries to enter into
any merger or consolidation, or liquidate, wind-up or dissolve (or
suffer any liquidation or dissolution), or convey, lease, sell,
transfer or otherwise dispose of, in one transaction or series of
transactions, all or substantially all of such Person's business or
Property, whether now or hereafter acquired, except (a) in connection
with transactions permitted under Section 10.2, (b) a merger in
connection with a Permitted Acquisition, and (c) the merger of a
Subsidiary of the Parent Guarantor into the Parent Guarantor or a
Guarantor which is a First Tier Subsidiary, provided that the Agent
--------
receives at least 30 Business Days' prior written notice thereof and
all actions required to be taken pursuant to the Security Documents in
connection therewith have been taken.
10.10 Sales and Leasebacks. Except with respect to the Property
--------------------
identified on SCHEDULE 10.10 attached hereto, the Parent Guarantor
--------------
shall not or permit any of its Subsidiaries to become liable,
directly, by assumption or by Accommodation Obligation, with respect
to any lease, whether an Operating Lease or a Capital Lease, of any
Property (whether real or personal or mixed) which it or one of its
Subsidiaries (a) sold or transferred or is to sell or transfer to any
other Person, or (b) intends to use for substantially the same
purposes as any other Property which has been or is to be sold or
transferred by it or one of its Subsidiaries to any other Person, in
either instance, in connection with such lease; provided, however,
-------- -------
that the Parent Guarantor and its Subsidiaries may engage in
transactions otherwise prohibited by this Section 10.10 if and to the
-------------
extent that (a) the Property is sold for an amount not less than its
Fair Market Value and (b) the aggregate amount of proceeds received by
the Parent Guarantor or any of its Subsidiaries in respect of the sale
of such Property does not exceed $250,000 from the Closing Date until
the date on which all of the Obligations have been fully and
indefeasibly paid in full.
10.11 Margin Regulations; Securities Laws. The Parent
-----------------------------------
Guarantor shall not or permit any of its Subsidiaries to use all
or any portion of the proceeds of any credit extended under this
Agreement to purchase or carry Margin Stock.
10.12 ERISA. The Parent Guarantor shall not:
-----
(a) engage, or permit any of its Subsidiaries to engage,
in any prohibited transaction described in Sections 406 of ERISA
or 4975 of the Internal Revenue Code for which a statutory or
class exemption is not available or a private exemption has not
been previously obtained from the DOL;
(b) permit to exist any accumulated funding deficiency (as
defined in Sections 302 of ERISA and 412 of the Internal Revenue
Code), with respect to any Benefit Plan, whether or not waived;
(c) fail, or permit any ERISA Affiliate to fail, to pay
timely required contributions or annual installments due with
respect to any waived funding deficiency to any Benefit Plan;
(d) terminate, or permit any ERISA Affiliate to terminate,
any Benefit Plan which would result in any liability of the
Parent Guarantor or any ERISA Affiliate under Title IV of ERISA;
(e) fail to make any contribution or payment to any
Multiemployer Plan which the Parent Guarantor or any ERISA
Affiliate may be required to make under any agreement relating
to such Multiemployer Plan, or any law pertaining thereto;
(f) fail, or permit any ERISA Affiliate to fail, to pay
any required installment or any other payment required under
Section 412 of the Internal Revenue Code on or before the due
date for such installment or other payment;
(g) amend, or permit any ERISA Affiliate to amend, a
Benefit Plan resulting in an increase in current liability for
the plan year such that the Parent Guarantor or any ERISA
Affiliate is required to provide security to such Plan under
Section 401(a)(29) of the Internal Revenue Code;
(h) permit any unfunded liabilities with respect
to any Foreign Pension Plan; or
(i) fail, or permit any of its Subsidiaries or ERISA
Affiliates to fail, to pay any required contributions or
payments to a Foreign Pension Plan on or before the due date for
such required installment or payment
if such event results, either singly or in the aggregate, after taking
into account all other such events and any liabilities associated
therewith, in an aggregate liability in excess of $500,000.
10.13 Issuance of Equity Securities. The Parent Guarantor shall
-----------------------------
not permit any of its Subsidiaries to issue any equity Securities
except equity Securities of a Subsidiary of the Parent Guarantor which
are issued to the Parent Guarantor or another Guarantor and pledged to
the Agent in accordance with the appropriate Security Documents.
10.14 Organizational Documents; Senior Subordinated Note
--------------------------------------------------
Documents. The Parent Guarantor shall not and shall not permit any of
- ---------
its Subsidiaries to amend, modify or otherwise change any of the terms
or provisions in any of (a) their respective Organizational Documents
as in effect on the Closing Date, except (i) amendments to effect a
change of name of the Parent Guarantor or a Subsidiary of the Parent
Guarantor, written notice of which change of name the Parent Guarantor
shall have provided the Agent within sixty (60) days prior to the
effective date of any such name change, and (ii) other amendments
which could not reasonably be expected to impair the rights of the
Agent or any Secured Party under the Loan Documents or with respect to
the Collateral, (b) the Senior Subordinated Note Documents as in
effect on the Senior Subordinated Note Issuance Date and (c) the
indentures or other governing documents with respect to any other
Subordinated Indebtedness as in effect of the date on which the
Subordinated Indebtedness is first issued.
10.15 [Reserved].
--------
10.16 Fiscal Year. The Parent Guarantor shall not and shall not
-----------
permit any of its Subsidiaries to change its Fiscal Year for
accounting or tax purposes from a period consisting of the 12-month
period ending on November 30 of each calendar year.
ARTICLE XI
FINANCIAL COVENANTS
The Borrower and the Parent Guarantor covenant and agree
that so long as any Commitments are outstanding and thereafter until
payment in full of all of the Obligations (other than indemnities not
yet due):
11.1 Leverage Ratio. The Parent Guarantor shall maintain a
--------------
Leverage Ratio, as determined as of the last day of each fiscal
quarter of the Parent Guarantor occurring during each Fiscal Year set
forth below for the period of four fiscal quarters ending on such
determination date of not more than the ratio set forth below opposite
such Fiscal Year:
Fiscal Year Ratio
----------- -----
1997 4.75
1998 4.75
1999 4.50
2000 4.25
2001 4.00
2002 3.75
2003 3.50
2004 3.50
11.2 Senior Leverage Ratio. The Parent Guarantor shall
---------------------
maintain a Senior Leverage Ratio, as determined as of the last day of
each fiscal quarter of the Parent Guarantor occurring during each
Fiscal Year set forth below for the period of four fiscal quarters
ending on such determination date of not more than the ratio set forth
below opposite such Fiscal Year:
Fiscal Year Ratio
----------- -----
1997 3.75
1998 3.50*
1999 3.25
2000 2.75
2001 2.25
2002 1.75
2003 1.75
2004 1.75
*3.75 for the 1st and 2nd fiscal quarters of 1998.
11.3 Debt-to-Capitalization Ratio. The Parent Guarantor
----------------------------
shall maintain a Debt-to-Capitalization Ratio, as determined as of the
last day of each fiscal quarter of the Parent Guarantor occurring
during each Fiscal Year set forth below, of not more than the ratio
set forth below opposite such Fiscal Year:
Fiscal Year Ratio
----------- -----
1997 0.70
1998 0.70
1999 0.65
2000 0.60
2001 0.55
2002 0.50
2003 0.50
2004 0.50
11.4 Senior Debt-to-Capitalization Ratio. The Parent
-----------------------------------
Guarantor shall maintain a Senior Debt-to-Capitalization Ratio, as
determined as of the last day of each fiscal quarter of the Parent
Guarantor occurring during each Fiscal Year set forth below, of not
more than the ratio set forth below opposite such Fiscal Year:
Fiscal Year Ratio
----------- -----
1997 0.50
1998 0.50
1999 0.45
2000 0.40
2001 0.35
2002 0.35
2003 0.35
2004 0.35
11.5 Interest Coverage Ratio. The Parent Guarantor shall
-----------------------
maintain an Interest Coverage Ratio as determined as of the last day
of each fiscal quarter of the Parent Guarantor occurring during each
Fiscal Year set forth below for the period of four fiscal quarters
then ending, of at least the ratio set forth below opposite such
Fiscal Year:
Fiscal Year Ratio
----------- -----
1997 2.00
1998 2.00
1999 2.25
2000 2.50
2001 2.75
2002 3.00
2003 3.00
2004 3.00
11.6 Fixed Charge Coverage Ratio. The Parent Guarantor
---------------------------
shall maintain a Fixed Charge Coverage Ratio as determined as of the
last day of each fiscal quarter of the Parent Guarantor occurring
during each Fiscal Year set forth below for the period of four fiscal
quarters then ending, of at least the ratio set forth below opposite
such Fiscal Year:
Fiscal Year Ratio
----------- -----
1997 1.15
1998 1.15
1999 1.25
2000 1.25
2001 1.25
2002 1.25
2003 1.25
2004 1.25
11.7 Capital Expenditures. The Parent Guarantor shall not
--------------------
make Capital Expenditures during any Fiscal Year set forth below in
excess of the amount set forth below opposite such Fiscal Year:
Fiscal Year Maximum Amount
----------- --------------
1997 $7,000,000
1998 $8,000,000
1999 $9,500,000
2000 $9,500,000
2001 $9,500,000
2002 $9,500,000
2003 $9,500,000
2004 $9,500,000
11.8 Financial Covenant Calculations. Notwithstanding any
-------------------------------
requirements under GAAP, calculations made with respect to (a) the
definitions of "EBITDA", "Net Income", "Fixed Charge Coverage Ratio",
"Interest Coverage Ratio", "Working Capital" and "Leverage Ratio",
"Senior Leverage Ratio", "Debt-to- Capitalization Ratio" and "Senior
Debt-to-Capitalization Ratio" and (b) determination of compliance with
the financial covenants set forth in this Article XI, each shall be
----------
made without regard to the requirements of Accounting Principles Board
Opinion 16 or changes in requirements under GAAP which become
effective after the Closing Date, other than a change made effective
in accordance with Section 15.4.
------------
ARTICLE XII
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
12.1 Events of Default. Each of the following occurrences
-----------------
shall constitute an Event of Default under this Agreement:
(a) Failure to Make Payments When Due. The Borrower shall
---------------------------------
fail to pay (i) all or any portion of the principal amount of any Loan
when due, (ii) all or any portion of amounts payable for reimbursement
of expenses pursuant to Section 15.2 on or before the fifth Business
------------
Day after delivery to the Borrower of a written invoice describing the
expenses for which reimbursement is required and (iii) any other
Obligation within three Business Days after such Obligation is due and
payable.
(b) Breach of Certain Covenants. The Borrower or the
---------------------------
Parent Guarantor, as applicable, shall fail duly and punctually to
perform or observe any agreement, covenant or obligation binding on
such Person under Sections 2.6, 8.7, 9.1, 9.2, 9.3, and 9.4, and
------------ --- --- --- --- ---
Article X or Article XI.
- --------- ----------
(c) Breach of Representation or Warranty. Any
------------------------------------
representation or warranty made or deemed made by the Borrower or the
Parent Guarantor to the Agent, any Lender or any Issuing Bank herein
or by the Parent Guarantor or any of the Parent Guarantor's
Subsidiaries in any of the other Loan Documents or in any statement or
certificate at any time given by any such Person pursuant to any of
the Loan Documents shall be false or misleading in any material
respect on the date as of which made (or deemed made).
(d) Other Defaults. The Borrower or the Parent Guarantor
--------------
shall default in the performance of or compliance with any term
contained in this Agreement (other than as identified in clauses (a),
-----------
(b) or (c) of this Section 12.1) or any default or event of default
- --- --- ------------
shall occur under any of the other Loan Documents, and such default or
event of default shall continue for fifteen (15) days after the
occurrence thereof.
(e) Default as to Other Indebtedness; Operating Leases.
--------------------------------------------------
The Parent Guarantor or any of its Subsidiaries shall fail to make any
payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) with respect to the Senior
Subordinated Notes or any other Indebtedness (other than an
Obligation) of the Parent Guarantor and its Subsidiaries aggregating
$1,000,000 or more; or any breach, default or event of default shall
occur, or any other condition shall exist under any instrument,
agreement or indenture pertaining to any such Indebtedness, if the
effect thereof is to cause an acceleration, mandatory redemption or
other required repurchase of such Indebtedness, or permit the
holder(s) of such Indebtedness to accelerate the maturity of any such
Indebtedness or require a redemption or other repurchase of such
Indebtedness; or any such Indebtedness shall be otherwise declared to
be due and payable (by acceleration or otherwise) or required to be
prepaid, redeemed or otherwise repurchased by the Parent Guarantor or
any of its Subsidiaries (other than by a regularly scheduled required
prepayment) prior to the stated maturity thereof; or any breach,
default or event of default on the part of the Parent Guarantor or any
of its Subsidiaries shall occur under any Operating Lease to which the
Parent Guarantor or any of its Subsidiaries is a party which breach,
default or event of default shall materially adversely affect the
rights of the Parent Guarantor or any of its Subsidiaries with respect
to the Property subject to any Operating Lease on which the remaining
payments exceed $1,000,000.
(f) Insolvency; Involuntary Bankruptcy; Appointment
-----------------------------------------------
of Receiver, Etc. (i) The Parent Guarantor or any of its Subsidiaries
- -----------------
becomes insolvent or generally not able to pay its debts as they
become due, or admits in writing its inability to pay its debts
generally or makes a general assignment for the benefit of creditors.
(ii) An involuntary case shall be commenced against the
Parent Guarantor or any of its Subsidiaries and the petition shall not
be dismissed, stayed, bonded or discharged within sixty (60) days
after commencement of the case; or a court having jurisdiction in the
premises shall enter a decree or order for relief in respect of the
Parent Guarantor or any of its Subsidiaries in an involuntary case,
under any applicable bankruptcy, insolvency, reorganization or relief
of debtors (including any plan of compromise or arrangement) or other
similar law now or hereinafter in effect; or any other similar relief
shall be granted under any applicable federal, state, provincial,
local or foreign law.
(iii) A decree or order of a court having jurisdiction in
the premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar
powers over the Parent Guarantor or any of its Subsidiaries or over
all or a substantial part of the Property of the Parent Guarantor or
any of its Subsidiaries shall be entered; or an interim receiver,
trustee or other custodian of the Parent Guarantor or any of its
Subsidiaries or of all or a substantial part of the Property of the
Parent Guarantor or any of its Subsidiaries shall be appointed or a
warrant of attachment, execution or similar process against any
Property of the Parent Guarantor or any of its Subsidiaries having a
value of $1,000,000 or more in the aggregate shall be issued and any
such event shall not be stayed, dismissed, bonded or discharged within
sixty (60) days after entry, appointment or issuance.
(g) Voluntary Bankruptcy; Appointment of Receiver, Etc.
---------------------------------------------------
The Parent Guarantor or any of its Subsidiaries shall commence a
voluntary case under any applicable bankruptcy, insolvency,
reorganization or relief of debtors (including any plan of compromise
or arrangement) or other similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case,
under any such law, or shall consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a
substantial part of its Property; or the Parent Guarantor or any of
its Subsidiaries shall make any assignment for the benefit of
creditors or shall be unable or fail, or admit in writing its
inability, to pay its debts as such debts become due; or the board of
directors (or equivalent) of the Parent Guarantor or any of its
Subsidiaries (or any committee thereof) adopts any resolution or
otherwise authorizes any action to approve any of the foregoing.
(h) Dissolution. Any order, judgment or decree shall be
-----------
entered against the Parent Guarantor or any of its Subsidiaries
decreeing its involuntary dissolution, liquidation, winding up or
split up and such order shall remain undischarged and unstayed for a
period in excess of sixty (60) days; or the Parent Guarantor or any of
its Subsidiaries shall otherwise dissolve, be dissolved, liquidated or
wound up or cease to exist except as specifically permitted by this
Agreement.
(i) Loan Documents; Failure of Security. At any time, for
-----------------------------------
any reason, (i) any Loan Document ceases to be in full force and
effect (other than pursuant to the terms thereof) or the Parent
Guarantor or any of its Subsidiaries party thereto seeks to repudiate
its obligations thereunder and the Liens intended to be created
thereby are, or the Parent Guarantor or any such Subsidiary seeks to
render such Liens, invalid or unperfected, or (ii) Liens in favor of
the Agent for the benefit of the Secured Parties contemplated by the
Loan Documents shall be invalidated or otherwise cease to be in full
force and effect, or such Liens shall be subordinated or shall not
have the priority contemplated by this Agreement or the Loan
Documents.
(j) Judgments and Attachments. (i) Any money judgment
-------------------------
(other than a money judgment covered by insurance as to which the
insurance company has acknowledged coverage), writ or warrant of
attachment, or similar process against the Parent Guarantor or any of
its Subsidiaries or any of their respective assets involving in any
case an amount in excess of $1,000,000 is entered and shall remain
undischarged, unvacated, unbonded or unstayed for a period of sixty
(60) days or in any event later than five (5) days prior to the date
of any proposed sale thereunder; provided, however, if any such
-------- -------
judgment, writ or warrant of attachment or similar process is in
excess of $5,000,000, the entry thereof shall immediately constitute
an Event of Default hereunder.
(ii) A tax Lien is filed against the Parent Guarantor or
any of its Subsidiaries or any of such Person's Property which is not
discharged of record, bonded over or otherwise secured to the
satisfaction of the Agent within forty-five (45) days after the filing
thereof or the date upon which the Agent receives actual knowledge of
the filing thereof for an amount which, either separately or when
aggregated with the amount of any judgments described in clause (i)
----------
above and/or the amount of any Environmental Lien Claims described in
clause (iii) below, equals or exceeds $500,000.
- ------------
(iii) An Environmental Lien is filed against any Property
of the Parent Guarantor or its Subsidiaries with respect to Claims in
an amount which, when aggregated with the amount of judgments set
forth in clause (i) above and/or the tax Lien Claims described in
----------
clause (ii) above, equals or exceeds $500,000.
- -----------
(k) Termination Event. Any Termination Event occurs
-----------------
which could reasonably be expected to subject either the Parent
Guarantor or any ERISA Affiliate to liability in excess of
$500,000.
(l) Waiver Application. The plan administrator of any
------------------
Benefit Plan applies under Section 412(d) of the Code for a waiver of
the minimum funding standards of Section 412(a) of the Internal
Revenue Code and the Agent believes that the substantial business
hardship upon which the application for the waiver is based could
subject either the Parent Guarantor or any ERISA Affiliate to
liability in excess of $500,000.
(m) Change in Control. A Change of Control shall
-----------------
occur.
(n) Material Adverse Effect. An event shall occur
-----------------------
which results in a Material Adverse Effect.
An Event of Default shall be deemed "continuing" until
cured or waived in writing in accordance with Section 15.7.
------------
12.2 Rights and Remedies.
-------------------
(a) Acceleration and Termination. Upon the occurrence of
----------------------------
any Event of Default described in Sections 12.1(f) or 12.1(g), the
---------------- -------
Lenders' respective obligations to make Revolving Loans under the
Revolving Credit Commitments and Acquisition Facility Revolving Loans
under the Acquisition Facility Commitments shall automatically and
immediately terminate and the unpaid principal amount of, and any and
all accrued interest on, the Obligations and all accrued fees shall
automatically become immediately due and payable, without presentment,
demand, or protest or other requirements of any kind (including,
without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and of
acceleration), all of which are hereby expressly waived by the
Borrower and the Parent Guarantor; and upon the occurrence and during
the continuance of any other Event of Default, the Agent shall at the
request, or may with the consent, of the Requisite Lenders, by written
notice to the Borrower, (i) declare that the Lenders' respective
obligations to make Revolving Loans under the Revolving Credit
Commitments and Acquisition Facility Revolving Loans under the
Acquisition Facility Commitments are terminated, whereupon such
obligation of each Lender to make any Revolving Loan and Acquisition
Facility Revolving Loan hereunder and of each Lender or Issuing Bank
to issue or participate in any Letter of Credit not then issued shall
immediately terminate, and/or (ii) declare the unpaid principal amount
of and any and all accrued and unpaid interest on the Obligations to
be, and the same shall thereupon be, immediately due and payable,
without presentment, demand, or protest or other requirements of any
kind (including, without limitation, valuation and appraisement,
diligence, presentment, notice of intent to demand or accelerate and
of acceleration), all of which are hereby expressly waived by the
Borrower and the Parent Guarantor.
(b) Deposit for Letters of Credit. In addition, after the
-----------------------------
occurrence and during the continuance of an Event of Default, the
Borrower shall, promptly upon demand by the Agent, deliver to the
Agent, Cash Collateral in such form as requested by the Agent for
deposit in the Cash Collateral Account, together with such
endorsements, and execution and delivery of such documents and
instruments as the Agent may request in order to perfect or protect
the Agent's Lien with respect thereto, in an aggregate principal
amount equal to the then outstanding Letter of Credit Obligations.
(c) Rescission. If at any time after termination of the
----------
Lenders' obligations to make Revolving Loans under the Revolving
Credit Commitments and Acquisition Facility Revolving Loans under the
Acquisition Facility Commitments and/or acceleration of the maturity
of the Loans, the Borrower shall pay all arrears of interest and all
payments on account of principal of the Loans and Reimbursement
Obligations which shall have become due otherwise than by acceleration
(with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement) and all
Events of Default and Potential Events of Default (other than
nonpayment of principal of and accrued interest on the Loans due and
payable solely by virtue of acceleration) shall be remedied or waived
pursuant to Section 15.7, then upon the written consent of the
------------
Requisite Lenders and written notice to the Borrower, the termination
of Lenders' respective obligations to make Revolving Loans under the
Revolving Credit Commitments and the respective Lenders' and Issuing
Banks' obligations to participate in or issue Letters of Credit, and
Acquisition Facility Revolving Loans under the Acquisition Facility
Commitments and/or the aforesaid acceleration and its consequences may
be rescinded and annulled; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair
any right or remedy consequent thereon. The provisions of the
preceding sentence are intended merely to bind the Lenders and the
Issuing Banks to a decision which may be made at the election of the
Requisite Lenders; they are not intended to benefit the Borrower or
the Parent Guarantor and do not give the Borrower or the Parent
Guarantor the right to require the Lenders or Issuing Banks to rescind
or annul any termination of the aforesaid obligations of the Lenders
or Issuing Banks or any acceleration hereunder, even if the conditions
set forth herein are met.
(d) Enforcement. The Borrower and the Parent Guarantor
-----------
acknowledge that in the event the Parent Guarantor or any of its
Subsidiaries fails to perform, observe or discharge any of their
respective obligations or liabilities under this Agreement or any
other Loan Document, any remedy of law may prove to be inadequate
relief to the Agent, the Issuing Banks and the Lenders; therefore, the
Borrower agrees that the Agent, the Issuing Banks and the Lenders
shall be entitled to temporary and permanent injunctive relief in any
such case without the necessity of proving actual damages.
12.3 Post-Default Withdrawals from the Cash Collateral Account.
---------------------------------------------------------
The Agent may, at any time after the occurrence and during the
continuance of an Event of Default, sell or cause to be sold any Cash
Equivalents being held by the Agent as Cash Collateral at any broker's
board or at public or private sale, in one or more sales or lots, at
such price as the Agent may deem best, without assumption of any
credit risk, and the purchaser of any or all such Cash Equivalents so
sold shall thereafter own the same, absolutely free from any claim,
encumbrance or right of any kind whatsoever. The Agent or any Secured
Party may, in its own name or in the name of a designee or nominee,
buy such Cash Equivalents at any public sale and, if permitted by
applicable law, buy such Cash Equivalents at any private sale. The
Agent shall apply the proceeds of any such sale, net or any reasonable
expenses incurred in connection therewith, and any other funds
deposited in the Cash Collateral Account to the payment of the
Obligations in accordance with Section 4.1(b)(ii), other than amounts
------------------
which are being held as Cash Collateral for Reimbursement Obligations,
which shall be applied to such Reimbursement Obligations without
regard to Section 4.2(b)(ii). The Borrower agrees that any sale of
------------------
Cash Equivalents conducted in conformity with reasonable commercial
practices of banks, commercial finance companies, insurance companies
or other financial institutions disposing of property similar to such
Cash Equivalents shall be deemed to be commercially reasonable and any
requirements of reasonable notice shall be met if such notice is given
by the Agent within a commercially reasonable time prior to such
disposition, the time of delivery of which notice the parties hereto
agree shall in no event be required to be greater than five (5)
Business Days before the date of the intended sale or disposition. Any
other requirement of notice, demand or advertisement for sale is
waived to the extent permitted by law. The Agent may adjourn any
public or private sale from time to time byand place fixed therefore
and such sale may, without further notice, be made at the time and
place to which it is so adjourned.
ARTICLE XIII
THE AGENT
13.1 Appointment. (a) Each Lender and each Issuing Bank hereby
-----------
designates and appoints Union Bank as the Agent of such Lender or such
Issuing Bank under this Agreement, and each Lender and each Issuing
Bank hereby irrevocably authorizes the Agent to take such action on
its behalf under the provisions of this Agreement and the Loan
Documents and to exercise such powers as are set forth herein or
therein together with such other powers as are reasonably incidental
thereto. The Agent agrees to act as such on the express conditions
contained in this Article XIII.
------------
(b) The provisions of this Article XIII are solely for the
------------
benefit of the Agent, the Lenders and the Issuing Banks, and neither
the Borrower, the Parent Guarantor nor any Subsidiary of the Parent
Guarantor shall have any rights to rely on or enforce any of the
provisions hereof (other than as expressly set forth in Section 13.7).
------------
In performing its functions and duties under this Agreement, the Agent
shall act solely as agent of the Lenders and the Issuing Banks and
does not assume and shall not be deemed to have assumed any obligation
or relationship of agency, trustee or fiduciary with or for the
Borrower or any Affiliate of the Borrower. The Agent may perform any
of its duties hereunder, or under the other Loan Documents, by or
through its agents or employees.
13.2 Nature of Duties. The Agent shall not have any duties or
----------------
responsibilities except those expressly set forth in this Agreement or
in the Loan Documents. The duties of the Agent shall be mechanical and
administrative in nature. The Agent shall not have by reason of this
Agreement a fiduciary relationship in respect of any Secured Party.
Nothing in this Agreement or any of the Loan Documents, expressed or
implied, is intended to or shall be construed to impose upon the Agent
any obligations in respect of this Agreement or any of the other Loan
Documents except as expressly set forth herein or therein. Each Lender
and each Issuing Bank shall make its own independent investigation of
the financial condition and affairs of the Borrower and Affiliates in
connection with the making and the continuance of the Loans hereunder
and with the issuance of the Letter of Credit and shall make its own
appraisal of the creditworthiness of the Borrower and each Guarantor
initially and on a continuing basis, and the Agent shall not have any
duty or responsibility, either initially or on a continuing basis, to
provide any Secured Party with any credit or other information with
respect thereto (except for reports required to be delivered by the
Agent under the terms of this Agreement). If the Agent seeks the
consent or approval of the Lenders to the taking or refraining from
taking of any action hereunder, the Agent shall send notice thereof to
each Lender. The Agent shall promptly notify each Lender at any time
that the Lenders so required hereunder have instructed the Agent to
act or refrain from acting pursuant hereto. As to any matters not
expressly provided for by this Agreement (including, without
limitation, enforcement or collection of the Notes or any amount
payable under any provision of Article IV when due) or the other Loan
----------
Documents, the Agent shall not be required to exercise any discretion
or take any action. Notwithstanding the foregoing, the Agent shall be
required to act or refrain from acting (and shall be fully protected
in so acting or refraining from acting) upon the instructions of the
Requisite Lenders (unless the instructions or consent of all of the
Lenders is required hereunder or thereunder) and such instructions
shall be binding upon all Lenders, Issuing Banks and Secured Parties
of Notes; provided, however, the Agent shall not be required to take
-------- -------
any action which (i) the Agent reasonably believes will expose it to
personal liability unless the Agent receives an indemnification
satisfactory to it from the Lenders with respect to such action or
(ii) is contrary to this Agreement, the other Loan Documents or
applicable law.
13.3 Rights, Exculpation, Etc. (a) Liabilities;
------------------------ ------------
Responsibilities. None of the Agent, any Affiliate of the Agent, or
- ----------------
any of their respective officers, directors, employees or agents shall
be liable to any Secured Party for any action taken or omitted by them
hereunder or under any of the Loan Documents, or in connection
therewith, except that no Person shall be relieved of any liability
imposed by law for gross negligence or willful misconduct. The Agent
shall not be liable for any apportionment or distribution of payments
made by it in good faith pursuant to Section 4.2(b), and if any such
--------------
apportionment or distribution is subsequently determined to have been
made in error the sole recourse of any Secured Party to whom payment
was due, but not made, shall be to recover from other Secured Parties
any payment in excess of the amount to which they are determined to
have been entitled. The Agent shall not be responsible to any Secured
Party for any recitals, statements, representations or warranties
herein or for the execution, effectiveness, genuineness, validity,
legality, enforceability, collectibility, or sufficiency of this
Agreement or any of the other Loan Documents or the transactions
contemplated thereby, or for the financial condition of the Borrower
or any of its Affiliates or the Guarantors. The Agent shall not be
required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this
Agreement or any of the other Loan Documents, the Senior Subordinated
Note Documents, or the financial condition of the Borrower or any of
its Affiliates or the Guarantors, or the existence or possible
existence of any Potential Event of Default or Event of Default.
(b) Right to Request Instructions. The Agent may at any
-----------------------------
time request instructions from the Lenders with respect to any actions
or approvals which by the terms of any of the Loan Documents the Agent
is permitted or required to take or to grant, and the Agent shall be
absolutely entitled to refrain from taking any action or to withhold
any approval and shall not be under any liability whatsoever to any
Person for refraining from any action or withholding any approval
under any of the Loan Documents until it shall have received such
instructions from those Lenders from whom the Agent is required to
obtain such instructions for the pertinent matter in accordance with
the Loan Documents. Without limiting the generality of the foregoing,
no Secured Party shall have any right of action whatsoever against the
Agent as a result of the Agent acting or refraining from acting under
the Loan Documents in accordance with the instructions of the
Requisite Lenders or, where required by the express terms of this
Agree- ment, a greater proportion of the Lenders.
13.4 Reliance. The Agent shall be entitled to rely upon any
--------
written notices, statements, certificates, orders or other documents
or any telephone message believed by it in good faith to be genuine
and correct and to have been signed, sent or made by the proper
Person, and with respect to all matters pertaining to this Agreement
or any of the Loan Documents and its duties hereunder or thereunder,
upon advice of legal counsel (including counsel for the Borrower),
independent public accountants and other experts selected by it.
13.5 Indemnification. To the extent that the Agent is required
---------------
to be reimbursed and indemnified by the Borrower but is not reimbursed
and indemnified by the Borrower, the Lenders will reimburse and
indemnify the Agent for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by, or asserted against it in any
way relating to or arising out of the Loan Documents or any action
taken or omitted by the Agent under the Loan Documents, in proportion
to each Lender's Pro Rata Share. The obligations of the Lenders under
this Section 13.5 shall survive the payment in full of the Loans, the
------------
Reimbursement Obligations and all other Obligations and the
termination of this Agreement.
13.6 Union Bank Individually. With respect to its Pro Rata Share
-----------------------
of the Commitments hereunder, if any, and the Loans made by it, if
any, Union Bank shall have and may exercise the same rights and powers
hereunder and is subject to the same obligations and liabilities as
and to the extent set forth herein for any other Lender. The terms
"Lenders" or "Requisite Lenders" or any similar terms shall, unless
the context clearly otherwise indicates, include Union Bank in its
individual capacity as a Lender or one of the Requisite Lenders. Union
Bank and its Affiliates may accept deposits from, lend money to, and
generally engage in any kind of banking, trust or other business with
the Borrower or any of its Affiliates as if it were not acting as the
Agent pursuant hereto.
13.7 Successor Agents. (a) Resignation. The Agent may resign
---------------- -----------
from the performance of all its functions and duties hereunder at any
time by giving at least thirty (30) Business Days' prior written
notice to the Borrower and the Lenders. Such resignation shall take
effect upon the acceptance by a successor Agent of appointment
pursuant to this Section 13.7.
------------
(b) Appointment by Requisite Lenders. Upon any such notice
--------------------------------
of resignation, the Requisite Lenders shall have the right to appoint
a successor Agent selected from among the Lenders which appointment
shall be subject to the prior written approval of the Borrower (which
may not be unreasonably withheld, and shall not be required upon the
occurrence and during the continuance of an Event of Default).
(c) Appointment by Retiring Agent. If a successor
-----------------------------
Agent shall not have been appointed within the thirty (30)
Business Day period provided in clause (a) of this Section 13.7,
---------- ------------
the retiring Agent, with the consent of the Borrower (which may not be
unreasonably withheld, and shall not be required upon the occurrence
and during the continuance of an Event of Default), shall then appoint
a successor Agent who shall serve as Agent until such time, if any, as
the Requisite Lenders appoint a successor Agent as provided above.
(d) Rights of the Successor and Retiring Agents. Upon the
-------------------------------------------
acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Article XIII shall inure
------------
to its benefit as to any actions taken or omitted to be taken by it while
it was the Agent under this Agreement.
13.8 Relations Among Lenders. Each Lender and each Issuing Bank
-----------------------
agrees (except as provided in Section 15.5) that it will not take any
------------
legal action, nor institute any actions or proceedings, against the
Borrower or any other obligor hereunder or with respect to any
Collateral, without the prior written consent of the Requisite
Lenders. Without limiting the generality of the foregoing, no Lender
may accelerate or otherwise enforce its portion of the Obligations, or
unilaterally terminate its Commitments except in accordance with
Section 12.2(a).
- ---------------
13.9 Concerning the Collateral and the Loan Documents. (a)
------------------------------------------------
Protective Advances. The Agent may from time to time, before
- -------------------
or after the occurrence of an Event of Default, make such
disbursements and advances pursuant to the Loan Documents in an amount
not to exceed the lesser of (i) the Revolving Credit Availability at
such time and (ii) $200,000 which the Agent, in its sole discretion,
deems necessary or desirable to preserve or protect the Collateral or
any portion thereof or to enhance the likelihood or maximize the
amount of repayment of the Loans and other Obligations ("Protective
Advances"). The Agent shall notify the Borrower and each Revolving
Lender in writing of each such Protective Advance, which notice shall
include a description of the purpose of such Protective Advance. The
Borrower agrees to pay the Agent, upon demand, the principal amount of
all outstanding Protective Advances, together with interest thereon at
the rate from time to time applicable to Reference Rate Loans from the
date of such Protective Advance until the outstanding principal
balance thereof is paid in full. If the Borrower fails to make payment
in respect of any Protective Advance within one (1) Business Day after
the date the Borrower receives written demand therefor from the Agent,
the Agent shall promptly notify each Revolving Lender and each Lender
agrees that it shall thereupon make available to the Agent, in Dollars
in immediately available funds, the amount equal to such Revolving
Lender's Pro Rata Share of such Protective Advance. If such funds are
not made available to the Agent by such Revolving Lender within one
(1) Business Day after the Agent's demand therefor, the Agent will be
entitled to recover any such amount from such Lender together with
interest thereon at the Federal Funds Rate for each day during the
period commencing on the date of such demand and ending on the date
such amount is received. The failure of any Revolving Lender to make
available to the Agent its Pro Rata Share of any such Protective
Advance shall nLender of its obligation hereunder to make available to
the Agent such other Revolving Lender's Pro Rata Share of such
Protective Advance on the date such payment is to be made nor increase
the obligation of any other Revolving Lender to make such payment to
the Agent. All outstanding principal of, and interest on, Protective
Advances shall constitute Obligations secured by the Collateral until
paid in full by the Borrower.
(b) Authority. Each Secured Party authorizes and directs
---------
the Agent to enter into the Loan Documents relating to the Collateral
for the benefit of the Secured Parties. Each Secured Party agrees that
any action taken by the Agent or the Requisite Lenders (or, where
required by the express terms of this Agreement, a greater proportion
of the Lenders) in accordance with the provisions of this Agreement or
the other Loan Documents, and the exercise by the Agent or the
Requisite Lenders (or, where so required, such greater proportion) of
the powers set forth herein or therein, together with such other
powers as are reasonably incidental thereto, shall be authorized and
binding upon all of the Secured Parties. Without limiting the
generality of the foregoing, the Agent shall have the sole and
exclusive right and authority to (i) act as the disbursing and
collecting agent for the Secured Parties with respect to all payments
and collections arising in connection with this Agreement and the Loan
Documents relating to the Collateral; (ii) execute and deliver each
Loan Document relating to the Collateral and accept delivery of each
such agreement delivered by the Borrower, any of its Subsidiaries or
any Guarantor a party thereto; (iii) act as collateral agent for the
Secured Parties for purposes of the perfection of all security
interests and Liens created by such agreements and all other purposes
stated therein; provided, however, the Agent hereby appoints,
-------- -------
authorizes and directs the Secured Parties to act as collateral
sub-agent for the Agent and the Secured Parties for purposes of the
perfection of all security interests and Liens with respect to the
Property at any time in the possession of such Secured Party,
including, without limitation, deposit accounts maintained with, and
cash and Cash Equivalents held by, such Secured Party; (iv) manage,
supervise and otherwise deal with the Collateral; (v) take such action
as is necessary or desirable to maintain the perfection and priority
of the security interests and liens created or purported to be created
by the Loan Documents; and (vi) except as may be otherwise
specifically restricted by the terms of this Agreement or any other
Loan Document, exercise all remedies given to the Agent or the Secured
Parties with respect to the Collateral under the Loan Documents
relating thereto, applicable law or otherwise.
(c) Release of Collateral. (i) Each Secured Party hereby
---------------------
directs, in accordance with the terms of this Agreement, the Agent to
release any Lien held by the Agent for the benefit of the Secured
Parties:
(A) against all of the Collateral, upon final and
indefeasible payment in full of the Obligations and termination
of this Agreement;
(B) against any part of the Collateral sold or disposed of
by the Parent Guarantor or any of its Subsidiaries, if such sale
or disposition is permitted by Section 10.2 or is otherwise
------------
consented to by the Requisite Lenders, as certified to the Agent
by the Borrower in an Officer's Certificate; and/or
(C) against any part of the Collateral consisting of a
promissory note, upon final and indefeasible payment in full of
the Indebtedness evidenced thereby.
(ii) Each Secured Party hereby directs the Agent to
execute and deliver or file such termination and partial release
statements and do such other things as are necessary to release Liens
to be released pursuant to this Section 13.9(c) promptly upon the
---------------
effectiveness of any such release.
ARTICLE XIV
YIELD PROTECTION
14.1 Taxes. (a) Payment of Taxes. Any and all payments by the
----- ----------------
Borrower, the Parent Guarantor or any Subsidiary of the Parent
Guarantor hereunder or under any Note, any other document evidencing
any Obligations or any other Loan Document shall be made, in
accordance with Section 4.2, free and clear of and without reduction
-----------
for any and all present or future taxes, levies, imposts, deductions,
charges, withholdings, and all stamp or documentary taxes, excise
taxes, ad valorem taxes and other taxes imposed on the value of the
Property, charges or levies which arise from the execution, delivery
or registration, or from payment or performance under, or otherwise
with respect to, any of the Loan Documents or the Commitments and all
other liabilities with respect thereto excluding, in the case of each
Lender, each Issuing Bank and the Agent, taxes imposed on or measured
by net income or overall gross receipts and capital and franchise
taxes imposed on it by (i) the United States, (ii) the Governmental
Authority of the jurisdiction in which such Lender's Applicable
Lending Office is located or any political subdivision thereof or
(iii) the Governmental Authority in which such Person is organized,
managed and controlled or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges and
withholdings being hereinafter referred to as "Taxes"). If the
Borrower, the Parent Guarantor or any Subsidiary of the Parent
Guarantor shall be required by law to withhold or deduct any Taxes
from or in respect of any sum payable hereunder or under any such Note
or document to any Lender, any Issuing Bank or the Agent, (x) the sum
payable to such Lender, Issuing Bank or the Agent shall be increased
as may be necessary so that after making all required withholding or
deductions (including withholding or deductions applicable to
additional sums payable under this Section 14.1) such Lender, such
------------
Issuing Bank or the Agent (as the case may be) receives an amount
equal to the sum it would have received had no such withholding or
deductions been made, (y) the Borrower, the Parent Guarantor or the
Subsidiary of the Parent Guarantor, as the case may be, shall make
such withholding or deductions, and (z) the Borrower, the Parent
Guarantor or the Subsidiary of the Parent Guarantor, as the case may
be, shall pay the full amount withheld or deducted to the relevant
taxation authority or other authority in accordance with applicable
law.
(b) Indemnification. The Borrower will indemnify each
---------------
Lender, each Issuing Bank and the Agent against, and reimburse each on
demand for, the full amount of all Taxes (including, without
limitation, any Taxes imposed by any Governmental Authority on amounts
payable under this Section 14.1 and any additional income or franchise
------------
taxes resulting therefrom) incurred or paid by such Lender, such
Issuing Bank or the Agent (as the case may be) or any of their
respective Affiliates and any liability (including penalties,
interest, and out-of-pocket expenses paid to third parties) arising
therefrom or with respect thereto, whether or not such Taxes were
lawfully payable. A certificate as to any additional amount payable to
any Person under this Section 14.1 submitted by it to the Borrower
------------
shall, absent manifest error, be final, conclusive and binding upon
all parties hereto. Each Lender and each Issuing Bank agrees, within a
reasonable time after receiving a written request from the Borrower,
to provide the Borrower and the Agent with such certificates as are
reasonably required, and take such other actions as are reasonably
necessary to claim such exemptions as such Lender or such Issuing Bank
may be entitled to claim in respect of all or a portion of any Taxes
which are otherwise required to be paid or deducted or withheld
pursuant to this Section 14.1 in respect of any payments under this
------------
Agreement or under the Notes or any other Loan Document.
(c) Receipts. Within thirty (30) days after the date of
--------
any payment of Taxes by the Borrower, it will furnish to the Agent, at
its address referred to in Section 15.8, the original or a certified
------------
copy of a receipt evidencing payment thereof.
(d) Foreign Bank Certifications. (i) Each Lender that is
---------------------------
not created or organized under the laws of the United States or a
political subdivision thereof shall deliver to the Borrower and the
Agent on the Closing Date or the date on which such Lender becomes a
Lender pursuant to Section 15.1 hereof a true and accurate certificate
------------
executed in duplicate by a duly authorized officer of such Lender to
the effect that such Lender is eligible to receive payments hereunder
and under the Notes without deduction or withholding of United States
federal income tax (I) under the provisions of an applicable tax
treaty concluded by the United States (in which case the certificate
shall be accompanied by two duly completed copies of IRS Form 1001 (or
any successor or substitute form or forms)), (II) under Sections
1442(c)(1) and 1442(a) of the Internal Revenue Code (in which case the
certificate shall be accompanied by two duly completed copies of IRS
Form 4224 (or any successor or substitute form or forms)), or (III)
due to such Lender's not being a "bank" as such term is used in
Section 881(c)(3)(A) of the Internal Revenue Code (in which case, the
certificate shall be accompanied by two accurate and complete original
signed copies of IRS Form W-8 (or any successor or substitute form or
forms)).
(ii) Each Lender further agrees to deliver to the Borrower
and the Agent from time to time, a true and accurate certificate
executed in duplicate by a duly authorized officer of such Lender
before or promptly upon the occurrence of any event requiring a change
in the most recent certificate previously delivered by it to the
Borrower and the Agent pursuant to this Section 14.1(d). Each
---------------
certificate required to be delivered pursuant to this Section
-------
14.1(d)(ii) shall certify as to one of the following:
- ----------
(A) that such Lender can continue to receive payments
hereunder and under the Notes without deduction or withholding
of United States federal income tax;
(B) that such Lender cannot continue to receive payments
hereunder and under the Notes without deduction or withholding
of United States federal income tax as specified therein but
does not require additional payments pursuant to Section 14.1(a)
---------------
because it is entitled to recover the full amount of any such
deduction or withholding from a source other than the Borrower;
or
(C) that such Lender is no longer capable of receiving
payments hereunder and under the Notes without deduction or
withholding of United States federal income tax as specified
therein and that it is not capable of recovering the full amount
of the same from a source other than the Borrower.
Each Lender agrees to deliver to the Borrower and the Agent further
duly completed copies of the above-mentioned IRS forms on or before
the earlier of (x) the date that any such form expires or becomes
obsolete or otherwise is required to be resubmitted as a condition to
obtaining an exemption from withholding from United States federal
income tax and (y) fifteen (15) days after the occurrence of any event
requiring a change in the most recent form previously delivered by
such Lender to the Borrower and Agent, unless any change in treaty,
law, regulation, or official interpretation thereof which would render
such form inapplicable or which would prevent the Lender from duly
completing and delivering such form has occurred prior to the date on
which any such delivery would otherwise be required and the Lender
promptly advises the Borrower that it is not capable of receiving
payments hereunder and under the Notes without any deduction or
withholding of United States federal income tax.
14.2 Increased Capital. If after the date hereof any Lender or
-----------------
Issuing Bank determines that (a) the adoption or implementation of or
any change in or in the interpretation or administration of any law or
regulation or any guideline or request from any central bank or other
Governmental Authority or quasi-governmental authority exercising
jurisdiction, power or control over any Lender, Issuing Bank or banks
or financial institutions generally (whether or not having the force
of law), compliance with which affects or would affect the amount of
capital required or expected to be maintained by such Lender or
Issuing Bank or any corporation controlling such Lender or Issuing
Bank and (b) the amount of such capital is increased by or based upon
(i) the making or maintenance by any Lender of its Loans, any Lender's
participation in or obligation to participate in the Loans, Letters of
Credit or other advances made hereunder or the existence of any
Lender's obligation to make Loans or (ii) the issuance or maintenance
by any Issuing Bank of, or the existence of any Issuing Bank's
obligation to issue, Letters of Credit, then, in any such case, upon
written demand by such Lender or Issuing Bank (with a copy of such
demand to the Agent), the Borrower shall immediately pay to the Agent
for the account of such Lender or Issuing Bank, from time to time as
specified by such Lender or Issuing Bank, additional amounts
sufficient to compensate such Lender or such corporation therefor.
Such demand shall be accompanied by a statement as to the amount of
such compensation and include a brief summary of the basis for such
demand. Such statement shall be conclusive and binding for all
purposes, absent manifest error.
14.3 Changes; Legal Restrictions. If after the date hereof any
---------------------------
Lender or Issuing Bank determines that the adoption or implementation
of or any change in or in the interpretation or administration of any
law or regulation or any guideline or request from any central bank or
other Governmental Authority or quasi-governmental authority
exercising jurisdiction, power or control over any Lender, Issuing
Bank or over banks or financial institutions generally (whether or not
having the force of law), compliance with which:
(a) does or will subject a Lender or an Issuing Bank (or
its Applicable Lending Office or Eurodollar Affiliate) to
charges (other than taxes) of any kind which such Lender or
Issuing Bank reasonably determines to be applicable to the
Commitments of the Lenders and/or the Issuing Banks to make
Eurodollar Rate Loans or issue and/or participate in Letters of
Credit or change the basis of taxation of payments to that
Lender or Issuing Bank of principal, fees, interest, or any
other amount payable hereunder with respect to Eurodollar Rate
Loans or Letters of Credit; or
(b) does or will impose, modify, or hold applicable, in
the determination of a Lender or an Issuing Bank, any reserve
(other than reserves taken into account in calculating the
Eurodollar Rate), special deposit, compulsory loan, FDIC
insurance or similar requirement against assets held by, or
deposits or other liabilities (including those pertaining to
Letters of Credit) in or for the account of, advances or loans
by, commitments made, or other credit extended by, or any other
acquisition of funds by, a Lender or an Issuing Bank or any
Applicable Lending Office or Eurodollar Affiliate of that Lender
or Issuing Bank;
and the result of any of the foregoing is to increase the cost to that
Lender or Issuing Bank of making, renewing or maintaining the Loans or
its Commitments with respect to, or issuing or participating in, the
Letters of Credit or to reduce any amount receivable thereunder; then,
in any such case, upon written demand by such Lender or Issuing Bank
(with a copy of such demand to the Agent), the Borrower shall
immediately pay to the Agent for the account of such Lender or Issuing
Bank, from time to time as specified by such Lender or Issuing Bank,
such amount or amounts as may be necessary to compensate such Lender
or Issuing Bank or its Eurodollar Affiliate for any such additional
cost incurred or reduced amount received. Such demand shall be
accompanied by a statement as to the amount of such compensation and
include a brief summary of the basis for such demand. Such statement
shall be conclusive and binding for all purposes, absent manifest
error.
14.4 Illegality. (a) If at any time any Lender determines (which
----------
determination shall, absent manifest error, be final and conclusive
and binding upon all parties) that the making or continuation of any
Eurodollar Rate Loan has become unlawful or impermissible by
compliance by that Lender with any law, governmental rule, regulation
or order of any Governmental Authority (whether or not having the
force of law and whether or not failure to comply therewith would be
unlawful or would result in costs or penalties), then, and in any such
event, such Lender may give notice of that determination, in writing,
to the Borrower and the Agent, and the Agent shall promptly transmit
the notice to each other Lender.
(b) When notice is given by a Lender under Section 14.4(a),
---------------
(A) the Borrower's right to request from such Lender and such Lender's
obligation, if any, to make Eurodollar Rate Loans shall be immediately
suspended, and such Lender shall make a Reference Rate Loan as part of
any requested Borrowing of Eurodollar Rate Loans and (B) if the
affected Eurodollar Rate Loan or Loans are then outstanding, the
Borrower shall immediately, or if permitted by applicable law, no
later than the date permitted thereby, upon at least one (1) Business
Day's prior written notice to the Agent and the affected Lender,
convert each such Loan into a Reference Rate Loan.
(c) If at any time after a Lender gives notice under Section
-------
14.4(a) such Lender determines that it may lawfully make Eurodollar
- -------
Rate Loans, such Lender shall promptly give notice of that
determination, in writing, to the Borrower and the Agent, and the
Agent shall promptly transmit the notice to each other Lender. The
Borrower's right to request, and such Lender's obligation, if any, to
make Eurodollar Rate Loans shall thereupon be restored.
14.5 Compensation. In addition to all amounts required to be
------------
paid by the Borrower pursuant to Sections 14.1, 14.2 and 14.3, the
------------- ---- ----
Borrower shall compensate each Lender, upon demand, for all losses,
expenses and liabilities (including, without limitation, any loss or
expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund or maintain
such Lender's Eurodollar Rate Loans to the Borrower but excluding any
loss of Applicable Eurodollar Rate Margin on the relevant Loans) which
that Lender may sustain (i) if for any reason a Borrowing, conversion
into or continuation of Eurodollar Rate Loans does not occur on a date
specified therefor in a Notice of Borrowing or a Notice of
Conversion/Continuation given by the Borrower or in a telephonic
request by it for borrowing or conversion/continuation or a successive
Eurodollar Interest Period does not commence after notice therefor is
given pursuant to Section 5.1, including, without limitation, pursuant
-----------
to Section 14.4, (ii) if for any reason any Eurodollar Rate Loan is
------------
prepaid (including, without limitation, mandatorily pursuant to
Section 4.1) on a date which is not the last day of the applicable
- -----------
Eurodollar Interest Period, (iii) as a consequence of a required
conversion of a Eurodollar Rate Loan to a Reference Rate Loan as a
result of any of the events indicated in Section 14.4, or (iv) as a
------------
consequence of any failure by the Borrower to repay Eurodollar Rate
Loans when required by the terms of this Agreement. The Lender making
demand for such compensation shall deliver to the Borrower
concurrently with such demand a written statement in reasonable detail
as to such losses, expenses and liabilities, and this statement shall
be conclusive as to the amount of compensation due to that Lender,
absent manifest error.
14.6 Judgment Currency. (a) If, for the purposes of obtaining
-----------------
judgment in any court, it is necessary to convert a sum due to the
Agent or any Lender, as the case may be, in any currency (the
"Original Currency") into another currency (the "Other Currency"), the
parties hereto agree, to the fullest extent that they may effectively
do so, that the rate of exchange used shall be that at which, in
accordance with normal banking procedures, the Agent or such Lender
could purchase the Original Currency with the Other Currency on the
Business Day preceding the day on which final judgment is given or, if
permitted by applicable law, on the day on which the judgment is paid
or satisfied.
(b) The obligations of the Borrower or the Parent
Guarantor in respect of any sum due in the Original Currency from it
to the Agent or such Lender under any of the Loan Documents shall,
notwithstanding any judgment in any Other Currency, be discharged only
to the extent that on the Business Day following receipt by the Agent
or such Lender of any sum adjudged to be so due in the Other Currency,
the Agent or such Lender may, in accordance with normal banking
procedures, purchase the Original Currency with such Other Currency.
If the amount of the Original Currency so purchased is less than the
sum originally due to the Agent or such Lender in the Original
Currency, the Borrower agrees, as a separate obligation and
notwithstanding the judgment, to indemnify the Agent and such Lender,
against any loss, and, if the amount of the Original Currency so
purchased exceeds the sum originally due to the Agent or such Lender
in the Original Currency, the Agent or such Lender shall remit such
excess to the Borrower.
ARTICLE XV
MISCELLANEOUS
15.1 Assignments and Participations. (a) Assignments. No
------------------------------ -----------
assignments or participations of any Lender's rights or obligations
under this Agreement shall be made except in accordance with this
Section 15.1. Each Lender may assign to one or more Eligible Assignees
- ------------
all or a portion of its rights and obligations under this Agreement
(including all of its rights and obligations with respect to the Term
Loans, the Acquisition Facility Loans, the Revolving Loans and the
Letters of Credit) in accordance with the provisions of this Section
-------
15.1.
- ----
(b) Limitations on Assignments. Each assignment shall be
--------------------------
subject to the following conditions: (i) each such assignment shall be
of a constant, and not a varying, ratable percentage of all of the
assigning Lender's rights and obligations under this Agreement which
are subject to such assignment and, in the case of a partial
assignment, shall be in a minimum principal amount of $5,000,000, (ii)
each such assignment shall be to an Eligible Assignee, (iii) the
Borrower shall have the right to approve each such Eligible Assignee
which is not an Affiliate of a Lender, which approval shall not be
unreasonably withheld or delayed and (iv) the parties to each such
assignment shall execute and deliver to the Agent, for its acceptance
and recording in the Register, an Assignment and Acceptance. Upon such
execution, delivery, acceptance and recording in the Register, from
and after the effective date specified in each Assignment and Accep-
tance and agreed to by the Agent, (A) the assignee thereunder shall,
in addition to any rights and obligations hereunder held by it
immediately prior to such effective date, if any, have the rights and
obligations hereunder that have been assigned to it pursuant to such
Assignment and Acceptance and shall, to the fullest extent permitted
by law, have the same rights and benefits hereunder as if it were an
original Lender hereunder, (B) the assigning Lender shall, to the
extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and
be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining
portion of such assigning Lender's rights and obligations under this
Agreement, the assigning Lender shall cease to be a party hereto), and
(C) the Borrower shall execute and deliver to the assignee thereunder
one or more Notes, as applicable, evidencing its obligations to such
assignee with respect to the Loans.
(c) The Register. The Agent shall maintain at its address
------------
referred to in Section 15.8 a copy of each Assignment and Acceptance
------------
delivered to and accepted by it and a register (the "Register") for
the recordation of the names and addresses of the Lenders and the
Commitment under each Loan of, and principal amount of the Loans under
each facility owing to, each Lender from time to time and whether such
Lender is an original Lender or the assignee of another Lender
pursuant to an Assignment and Acceptance. The entries in the Register
shall be conclusive and binding for all purposes, absent manifest
error, and the Borrower, the Parent Guarantor and each of its
Subsidiaries, the Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and
from time to time upon reasonable prior notice.
(d) Fee. Upon its receipt of an Assignment and Acceptance
----
executed by the assigning Lender and an Eligible Assignee and a
processing and recordation fee of $3,500 (payable by the assigning
Lender or the assignee, as shall be agreed between them), the Agent
shall, if such Assignment and Acceptance has been completed and is in
compliance with this Agreement and in substantially the form of
EXHIBIT A, (i) accept such Assignment and Acceptance, (ii) record the
- ---------
information contained therein in the Register and (iii) give prompt
notice thereof to the Borrower and the other Lenders.
(e) Participations. Each Lender may sell participations
--------------
to one or more other financial institutions in or to all or a portion
of its rights and obligations under and in respect of any and all
facilities under this Agreement (including, without limitation, all or
a portion of any or all of its Commitments hereunder and the Loans
owing to it and its undivided interest in the Letters of Credit);
provided, however, that (i) such Lender's obligations under this
- -------- -------
Agreement (including, without limitation, its Commitments hereunder)
shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) the Borrower, the Agent and the other Lenders
shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this
Agreement and (iv) such participant's rights to agree or to restrict
such Lender's ability to agree to the modification, waiver or release
of any of the terms of the Loan Documents or to the release of any
Collateral covered by the Loan Documents, to consent to any action or
failure to act by any party to any of the Loan Documents or any of
their respective Affiliates, or to exercise or refrain from exercising
any powers or rights which any Lender may have under or in respect of
the Loan Documents or any Collateral, shall be limited to the right to
consent to (A) increase in the Commitment of the Lender from whom such
participant purchased a participation, (B) reduction of the principal
of, or rate or amount of interest on, the Loans(s) subject to such
participation (other than by the payment or prepayment thereof), (C)
postponement of any date fixed for any payment of principal of, or
interest on, the Loan(s) subject to such participation and (D) release
of any guarantor of the Obligations or all or a substantial portion of
the Collateral except as provided in Section 13.9(c).
---------------
(f) Information Regarding the Borrower. Any Lender may, in
----------------------------------
connection with any assignment or participation or proposed assignment
or participation pursuant to this Section 15.1, disclose to the
------------
assignee or participant or proposed assignee or participant, any
information relating to the Borrower, the Parent Guarantor or its
Subsidiaries furnished to such Lender by the Agent or by or on behalf
of the Borrower or the Parent Guarantor; provided that, prior to any
such disclosure, such assignee or participant, or proposed assignee or
participant, shall agree to preserve in accordance with Section 15.20
-------------
the confidentiality of any confidential information described therein.
(g) Payment to Participants. Anything in this Agreement to
-----------------------
the contrary notwithstanding, in the case of any participation, all
amounts payable by the Borrower under the Loan Documents shall be
calculated and made in the manner and to the parties required hereby
as if no such participation had been sold.
(h) Lenders' Creation of Security Interests.
---------------------------------------
Notwithstanding any other provision set forth in this Agreement, any
Lender may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without
limitation, Obligations owing to it and any Notes held by it) in favor
of any Federal Reserve bank in accordance with Regulation A of the
Federal Reserve Board.
15.2 Expenses.
--------
(a) Generally. The Borrower agrees upon demand to pay, or
---------
reimburse the Agent for, all of the Agent's reasonable internal and
external audit, legal, appraisal, valuation, filing, document
duplication and reproduction and investigation expenses and for all
other out-of-pocket costs and expenses of every type and nature
(including, without limitation, the reasonable fees, expenses and
disbursements of Sidley & Austin, Canadian counsel, local legal
counsel, auditors, accountants, appraisers, printers, insurance and
environmental advisers, and other consultants and agents) incurred by
the Agent in connection with (i) the Agent's review and investigation
of the Borrower and its Affiliates and the Collateral in connection
with the preparation, negotiation, and execution of the Loan Documents
and the Agent's periodic reviews and audits of the Borrower; (ii) the
preparation, negotiation, execution and interpretation of this
Agreement (including, without limitation, the satisfaction or
attempted satisfaction of any of the conditions set forth in Article
-------
VI) and the other Loan Documents and the making of the Loans
- --
hereunder; (iii) the creation, perfection or protection of the Liens
under the Loan Documents (including, without limitation, any
reasonable fees and expenses for local counsel in various
jurisdictions); (iv) the ongoing administration of this Agreement, the
other Loan Documents and the Loans, including consultation with
attorneys in connection therewith and with respect to the Agent's
rights and responsibilities under this Agreement and the other Loan
Documents; (v) the protection, collection or enforcement of any of the
Obligations or the enforcement of any of the Loan Documents; (vi) the
commencement, defense or intervention in any court proceeding relating
in any way to the Obligations, the Property, the Borrower, the Parent
Guarantor or any of its Subsidiaries, this Agreement or any of the
other Loan Documents; (vii) the response to, and preparation for, any
subpoena or request for document production with which the Agent is
served or deposition or other proceeding in which the Agent is called
to testify, in each case, relating in any way to the Obligations, the
Property, the Borrower, the Parent Guarantor or any of its
Subsidiaries, this Agreement or any of the other Loan Documents; and
(viii) any amendments, consents, waivers, assignments, restatements,
or supplements to any of the Loan Documents and the preparation,
negotiation, and execution of the same. The Agent hereby acknowledges
receipt from the Parent Guarantor of a deposit of $100,000 to be
applied to the reimbursement in part of expenses for which the Agent
is entitled to reimbursement pursuant to this Section 15.2.
------------
(b) After Default. The Borrower further agrees to pay or
-------------
reimburse the Agent, each Issuing Bank and each Lender upon demand for
all reasonable out-of-pocket costs and expenses, including, without
limitation, reasonable attorneys' fees (including costs of settlement)
incurred by the Agent, any Issuing Bank or any Lender after the
occurrence of an Event of Default (i) in enforcing any Loan Document
or Obligation or any security therefor or exercising or enforcing any
other right or remedy available by reason of such Event of Default;
(ii) in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a
"work-out" or in any insolvency or bankruptcy proceeding; (iii) in
commencing, defending or intervening in any litigation or in filing a
petition, complaint, answer, motion or other pleadings in any legal
proceeding relating to the Obligations, the Property, the Parent
Guarantor or any of its Subsidiaries and related to or arising out of
the transactions contemplated hereby or by any of the other Loan
Documents; and (iv) in taking any other action in or with respect to
any suit or proceeding (bankruptcy or otherwise) described in clauses
-------
(i) through (iii) above.
- --- -----
15.3 Indemnity. The Borrower further agrees (a) to defend,
---------
protect, indemnify, and hold harmless the Agent and each and all of
the Lenders and Issuing Banks and each of their respective officers,
directors, controlling persons, employees, attorneys and agents
(including, without limitation, those retained in connection with the
satisfaction or attempted satisfaction of any of the conditions set
forth in Article VI) (collectively, the "Indemnitees") from and
----------
against any and all liabilities, obligations, losses (other than loss
of profits), damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever
(excluding any taxes and including, without limitation, the reasonable
fees and disbursements of counsel for such Indemnitees in connection
with any investigative, administrative or judicial proceeding, whether
or not such Indemnitees shall be designated a party thereto), imposed
on, incurred by, or asserted against such Indemnitees in any manner
relating to or arising out of (i) this Agreement or the other Loan
Documents, or any act or omission, event or transaction related or
attendant thereto, the making of the Loans hereunder and the issuance
of and participation in Letters of Credit, the management of such
Loans or Letters of Credit, the use or intended use of the proceeds of
the Loans or Letters of Credit hereunder, or any of the other
transactions contemplated by any of the Loan Documents, or (ii) any
Liabilities and Costs relating to any violation by the Borrower, the
Parent Guarantor or its Subsidiaries, or their respective
predecessors-in-interest of any Environmental, Health or Safety
Requirements of Law, any Liabilities and Costs relating to any
violation of any Environmental, Health or Safety Requirements of Law
by any past, present or future mortgagor, owner, or lessee of any
respective past, present or future Property of the Borrower, the
Parent Guarantor or any of its Subsidiaries, or their respect
predecessors-in-interest, the past, present or future operations of
the Borrower, the Parent Guarantor or any of its Subsidiaries, or any
of their respective predecessors in interest, or, the past, present or
future environmental, health or safety condition of any respective
past, present or future Property of the Borrower, the Parent Guarantor
or any of its Subsidiaries, the presence of asbestos-containing
materials or other Contaminants at, on or under any respective past,
present or future Property of the Borrower, the Parent Guarantor or
any of its Subsidiaries, or the Release or threatened Release of any
Contaminant by the Borrower, the Parent Guarantor or any of its
Subsidiaries, or their respective predecessors-in-interest, or the
Release or threatened Release of any Contaminant from or at any
facility to which the Borrower, the Parent Guarantor or any of its
Subsidiaries, or their respective predecessors-in-interest sent or
directly arranged for the transport or disposal of any Contaminant
(collectively, the "Indemnified Matters"); provided, however, the
-------- -------
Borrower shall have no obligation to an Indemnitee hereunder with
respect to Indemnified Matters to the extent caused by or resulting
from the willful misconduct or gross negligence of such Indemnitee, as
determined by the final, non-appealable judgment of a court of
competent jurisdiction and (b) not to assert any claim against any of
the Indemnified Parties for special, indirect, consequential or
punitive damages on any theory of liability arising out of, or in any
way in connection with, the Commitments, the Obligations or any other
matters governed by this Agreement and/or the other Loan Documents. To
the extent that the undertaking to indemnify, pay and hold harmless
set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Borrower shall contribute
the maximum portion which it is permitted to pay and satisfy under
applicable law, to the payment and satisfaction of all Indemnified
Matters incurred by the Indemnitees.
15.4 Change in Accounting Principles. (a) If any change in the
-------------------------------
accounting principles used in the preparation of the most recent
Financial Statements referred to in Section 8.1 are hereafter required
-----------
or permitted by the rules, regulations, pronouncements and opinions of
the Financial Accounting Standards Board or the American Institute of
Certified Public Accountants (or successors thereto or agencies with
similar functions) and are adopted by the Parent Guarantor and its
Subsidiaries with the agreement of its independent certified public
accountants and such changes result in a change in the method of
calculation of any of the covenants, standards or terms found in
Article IX, Article X, and Article XI, the parties hereto agree to
- ---------- --------- ----------
enter into negotiations in order to amend such provisions so as to
equitably reflect such changes with the desired result that the
criteria for evaluating compliance with such covenants, standards and
terms by the Parent Guarantor shall be the same after such changes as
if such changes had not been made; provided, however, no change in
-------- -------
GAAP that would affect the method of calculation of any of the
covenants, standards or terms shall be given effect in such
calculations until such provisions are amended, in a manner
satisfactory to the Requisite Lenders and the Parent Guarantor, to so
reflect such change in accounting principles.
(b) The Parent Guarantor presently contemplates changing
the accounting principles used in the preparation of its Financial
Statements from Canadian GAAP (as described in clause (a) of the
----------
definition of "GAAP") to American GAAP (as described in clause (b) of
----------
the definition of "GAAP"). Such change shall be a change in accounting
principles described in Section 15.4(a), with which the Parent
---------------
Guarantor and its Subsidiaries shall comply prior to the effectiveness
of such change.
15.5 Setoff. In addition to any Liens granted under the
------
Loan Documents and any rights now or hereafter granted under
applicable law, upon the occurrence and during the continuance of any
Event of Default, each Lender, each Issuing Bank and any Affiliate of
any Lender or Issuing Bank is hereby authorized by the Borrower at any
time or from time to time, without notice to any Person (any such
notice being hereby expressly waived) to set off and to appropriate
and to apply any and all deposits (general or special, including, but
not limited to, indebtedness evidenced by certificates of deposit,
whether matured or unmatured (but not including trust accounts)) and
any other Indebtedness at any time held or owing by such Lender,
Issuing Bank or any of their Affiliates to or for the credit or the
account of the Borrower against and on account of the Obligations of
the Borrower to such Lender, Issuing Bank or any of their Affiliates,
including, but not limited to, all Loans and Letters of Credit and all
claims of any nature or description arising out of or in connection
with this Agreement, irrespective of whether or not (i) such Lender or
Issuing Bank shall have made any demand hereunder or (ii) the Agent,
at the request or with the consent of the Requisite Lenders, shall
have declared the principal of and interest on the Loans and other
amounts due hereunder to be due and payable as permitted by Article
-------
XII and even though such Obligations may be contingent or unmatured.
- ---
Each Lender and each Issuing Bank agrees that it shall not, without
the express consent of the Requisite Lenders, and that it shall, to
the extent it is lawfully entitled to do so, upon the request of the
Requisite Lenders, exercise its setoff rights hereunder against any
accounts of the Borrower, the Parent Guarantor or any of its
Subsidiaries, now or hereafter maintained with such Lender, Issuing
Bank or any Affiliate of either of them.
15.6 Ratable Sharing. The Lenders agree among themselves that
---------------
(i) with respect to all amounts received by them which are applicable
to the payment of the Obligations (excluding the fees described in
Sections 3.1(g) and 5.3 and Article XIV), equitable adjustment will be
- --------------- --- -----------
made so that, in effect, all such amounts will be shared among them
ratably in accordance with their Pro Rata Shares, 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 Obligations (excluding the fees described in Sections
--------
3.1(g), 5.2(f), and 5.3 and Article XIV) or the Collateral, (ii) if
- ------ ------ --- -----------
any of them shall by voluntary payment or by the exercise of any right
of counterclaim, setoff, banker's lien or otherwise, receive payment
of a proportion of the aggregate amount of the Obligations held by it,
which is greater than the amount which such Lender is entitled to
receive hereunder, the Lender receiving such excess payment shall
purchase, without recourse or warranty, an undivided interest and
participation (which it shall be deemed to have done simultaneously
upon the receipt of such payment) in such Obligations owed to the
others so that all such recoveries with respect to such Obligations
shall be applied ratably in accordance with their Pro Rata Shares;
provided, however, that if all or part of such excess payment received
- -------- -------
by the purchasing party is thereafter recovered from it, those
purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such party to the extent necessary
to adjust for such recovery, but without interest except to the extent
the purchasing party is required to pay interest in connection with
such recovery. The Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 15.6 may,
------------
to the fullest extent permitted by law, exercise all its rights of
payment (including, subject to Section 15.5, the right of setoff) with
------------
respect to such participation as fully as if such Lender were the
direct creditor of the Borrower in the amount of such participation.
15.7 Amendments and Waivers. (a) General Provisions. Unless
---------------------- ------------------
otherwise provided for or required in this Agreement, no amendment or
modification of any provision of this Agreement or any of the other
Loan Documents shall be effective without the written agreement of the
Requisite Lenders (which the Requisite Lenders shall have the right to
grant or withhold in their sole discretion) and the Borrower. No
termination or waiver of any provision of this Agreement or any of the
other Loan Documents, or consent to any departure by the Borrower or
the Parent Guarantor therefrom, shall be effective without the written
concurrence of the Requisite Lenders, which the Requisite Lenders
shall have the right to grant or withhold in their sole discretion.
All amendments, modifications, waivers and consents not specifically
reserved to Lenders, Issuing Banks and the Agent in Section 15.7(b),
---------------
Section 15.7(c) and in other provisions of this Agreement shall
- ---------------
require only the approval of the Requisite Lenders. Any waiver or
consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on the
Borrower or the Parent Guarantor in any case shall entitle the
Borrower or the Parent Guarantor to any other or further notice or
demand in similar or other circumstances.
(b) Amendments, Consents and Waivers by Affected Lenders.
----------------------------------------------------
Any amendment, modification, termination, waiver or consent with
respect to any of the following provisions of this Agreement shall be
effective only by a written agreement, signed by each Lender or
Issuing Bank affected thereby as described below:
(i) waiver of any of the conditions specified in Sections 6.1,
-------------
6.2, 6.3 and 6.4 (except with respect to a condition based upon
--- --- ---
another provision of this Agreement, the waiver of which
requires only the concurrence of the Requisite Lenders),
(ii) increase in the amount of any of the Commitments of
such Lender,
(iii) reduction of the principal of, rate or amount of interest
on the Loans, the Reimbursement Obligations or any fees or other
amounts payable to such Lender (other than by the payment or
prepayment thereof),
(iv) postponement of the Revolving Credit Termination Date, the
Term Loan Termination Date, the Acquisition Facility Termination
Date or any date fixed for any payment of principal of, or
interest on, the Loans, the Reimbursement Obligations or any
fees or other amounts payable to such Lender,
(v) Section 4.2(b)(i), or in clauses (D) through (G) of
----------------- ----------- ---
Section 4.2(b)(ii), and
------------------
(vi) change in the definitions of Revolving Credit
Commitments, Acquisition Facility Commitments or Term Loan
Commitments.
(c) Amendments, Consents and Waivers by All Lenders. Any
-----------------------------------------------
amendment, modification, termination, waiver or consent with respect
to any of the following provisions of this Agreement shall be
effective only by a written agreement, signed by each Lender:
(i) release of any Guarantor (except pursuant to a transaction
otherwise permitted by the Loan Documents) or all or a
substantial portion of the Collateral (except as provided in
Section 13.9(c)),
----------------
(ii) change in the (A) definition of Requisite Lenders or (B)
aggregate Pro Rata Share of the Lenders which shall be required
for the Lenders or any of them to take action under this
Agreement or the other Loan Documents,
(iii) amendment of Section 15.1, Section 15.2 or this
------------ ------------
Section 15.7, and
------------
(iv) assignment of any right or interest in or under this
Agreement or any of the other Loan Documents by the Borrower or
the Parent Guarantor.
(d) Agent Authority. The Agent may, but shall have no
---------------
obligation to, with the written concurrence of any Lender, execute
amendments, modifications, waivers or consents on behalf of that
Lender. Notwithstanding anything to the contrary contained in this
Section 15.7, no amendment, modification, waiver or consent shall
- ------------
affect the rights or duties of the Agent under this Agreement or the
other Loan Documents, unless made in writing and signed by the Agent
in addition to the Lenders required above to take such action; and the
order of priority set forth in clauses (A) through (C) of Section
----------- --- -------
4.2(b)(ii) may be changed only with the prior written consent of the
- ----------
Agent. Notwithstanding anything herein to the contrary, in the event
that the Borrower shall have requested, in writing, that any Lender
agree to an amendment, modification, waiver or consent with respect to
any particular provision or provisions of this Agreement or the other
Loan Documents, and such Lender shall have failed to state, in
writing, that it either agrees or disagrees (in full or in part) with
all such requests (in the case of its statement of agreement, subject
to satisfactory documentation and such other conditions it may
specify) within thirty (30) days after such request, then such Lender
hereby irrevocably authorizes the Agent to agree or disagree, in full
or in part, and in the Agent's sole discretion, to such requests on
behalf of such Lender as such Lender's attorney-in-fact and to execute
and deliver any writing approved by the Agent which evidences such
agreement as such Lender's duly authorized agent for such purposes.
15.8 Notices. Unless otherwise specifically provided herein, any
-------
notice or other communication herein required or permitted to be given
shall be in writing and may be personally served, sent facsimile
transmission or courier service or United States certified mail and
shall be deemed to have been given when delivered in person or by
courier service, upon receipt of a facsimile transmission, or four (4)
Business Days after deposit in the United States mail with postage
prepaid and properly addressed. Notices to the Agent pursuant to
Articles II, IV or XIII shall not be effective until received by the
- ----------- -- ----
Agent. For the purposes hereof, the addresses of the parties hereto
(until notice of a change thereof is delivered as provided in this
Section 15.8) shall be as set forth below each party's name on the
- ------------
signature pages hereof or the signature page of any applicable
Assignment and Acceptance, or, as to each party, at such other address
as may be designated by such party in a written notice to all of the
other parties to this Agreement.
15.9 Survival of Warranties and Agreements. All representations
-------------------------------------
and warranties made herein and all obligations of the Borrower or the
Parent Guarantor in respect of taxes, indemnification and expense
reimbursement shall survive the execution and delivery of this
Agreement and the other Loan Documents, the making and repayment of
the Loans, the issuance and discharge of Letters of Credit hereunder
and the termination of this Agreement and shall not be limited in any
way by the passage of time or occurrence of any event and shall
expressly cover time periods when the Agent, any of the Issuing Banks
or any of the Lenders may have come into possession or control of any
of the Borrower's, the Parent Guarantor's or its Subsidiaries'
Property.
15.10 Failure or Indulgence Not Waiver; Remedies Cumulative. No
-----------------------------------------------------
failure or delay on the part of the Agent, any Lender or any Issuing
Bank in the exercise of any power, right or privilege under any of the
Loan Documents shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor
shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other
right, power or privilege. All rights and remedies existing under the
Loan Documents are cumulative to and not exclusive of any rights or
remedies otherwise available.
15.11 Marshalling; Payments Set Aside. None of the Agent, any
-------------------------------
Lender or any Issuing Bank shall be under any obligation to marshall
any assets in favor of the Borrower or any other Person or against or
in payment of any or all of the Obligations. To the extent that the
Borrower makes a payment or payments to the Agent, the Lenders or the
Issuing Banks or any of such Persons receives payment from the
proceeds of the Collateral or exercises its rights of setoff, and such
payment or payments or the proceeds of such enforcement or setoff or
any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a
trustee, receiver or any other party, then to the extent of such
recovery, the obligation or part thereof originally intended to be
satisfied, and all Liens, right and remedies therefor, shall be
revived and continued in full force and effect as if such payment had
not been made or such enforcement or setoff had not occurred.
15.12 Severability. In case any provision in or obligation under
------------
this Agreement or the other Loan Documents shall be invalid, illegal
or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any
way be affected or impaired thereby.
15.13 Headings. Section headings in this Agreement are included
--------
herein for convenience of reference only and shall not constitute a
part of this Agreement or be given any substantive effect.
15.14 Governing Law. THIS AGREEMENT SHALL BE
-------------
INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE PARTIES
HERETO DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
15.15 Limitation of Liability. No claim may be made by the
-----------------------
Borrower, the Parent Guarantor, any Lender, any Issuing Bank, the
Agent or any other Person against the Agent, any other Issuing Bank or
any other Lender or the Affiliates, directors, officers, employees,
attorneys or agents of any of them for any special, consequential or
punitive damages in respect of any claim for breach of contract or any
other theory of liability arising out of or related to the
transactions contemplated by this Agreement, or any act, omission or
event occurring in connection therewith; and the Borrower, the Parent
Guarantor, each Lender, each Issuing Bank and the Agent hereby waives,
releases and agrees not to sue upon any such claim for any such
damages, whether or not accrued and whether or not known or suspected
to exist in its favor.
15.16 Successors and Assigns. This Agreement and the other Loan
----------------------
Documents shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of
the parties hereto and the successors and permitted assigns of the
Lenders and the Issuing Banks. The rights hereunder of the Borrower
and the Parent Guarantor, or any interest therein, may not be assigned
without the written consent of all Lenders.
15.17 Certain Consents and Waivers of the Borrower and
------------------------------------------------
the Parent Guarantor.
- --------------------
(a) Personal Jurisdiction. (i) EACH OF THE AGENT, THE
---------------------
LENDERS, THE ISSUING BANKS, THE PARENT GUARANTOR AND THE BORROWER
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY,
TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR
FEDERAL COURT SITTING IN NEW YORK, NEW YORK, AND ANY COURT HAVING
JURISDICTION OVER APPEALS OF MATTERS HEARD IN SUCH COURTS, IN ANY
ACTION OR PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION
WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, WHETHER ARISING IN
CONTRACT, TORT, EQUITY OR OTHERWISE, OR FOR RECOGNITION OR ENFORCEMENT
OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION
OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE COURT OR, TO
THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. THE BORROWER AND
THE PARENT GUARANTOR EACH IRREVOCABLY DESIGNATES AND APPOINTS CT
CORPORATION SYSTEM, PRESENTLY LOCATED AT 1633 BROADWAY, NEW YORK, NEW
YORK 10019 AS ITS AGENT (THE "PROCESS AGENT") FOR SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT, SUCH SERVICE BEING
HEREBY ACKNOWLEDGED TO BE EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT. EACH OF THE AGENT, THE LENDERS, THE ISSUING BANKS, THE PARENT
GUARANTOR AND THE BORROWER AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED
BY LAW. THE BORROWER AND THE PARENT GUARANTOR EACH WAIVES IN ALL
DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT
CONSIDERING THE DISPUTE.
(ii) THE BORROWER AND THE PARENT GUARANTOR EACH AGREES
THAT THE AGENT SHALL HAVE THE RIGHT TO PROCEED AGAINST SUCH PERSON OR
ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE THE AGENT, THE
ISSUING BANKS AND THE LENDERS TO REALIZE ON THE COLLATERAL OR ANY
OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER
COURT ORDER ENTERED IN FAVOR OF THE AGENT, ANY ISSUING BANK OR ANY
LENDER. THE BORROWER AND THE PARENT GUARANTOR EACH AGREES THAT IT WILL
NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY
THE AGENT, ANY ISSUING BANK OR ANY LENDER TO REALIZE ON THE COLLATERAL
OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR
OTHER COURT ORDER IN FAVOR OF THE AGENT, ANY ISSUING BANK OR ANY
LENDER. THE BORROWER AND THE PARENT GUARANTOR EACH WAIVES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE
AGENT, ANY ISSUING BANK OR ANY LENDER MAY COMMENCE A PROCEEDING
DESCRIBED IN THIS SECTION.
(b) Service of Process. THE BORROWER AND THE PARENT
------------------
GUARANTOR EACH IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY
OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO THE PROCESS AGENT OR THE APPROPRIATE NOTICE ADDRESS
SPECIFIED BELOW, SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) DAYS AFTER
SUCH MAILING. THE BORROWER IRREVOCABLY WAIVES ANY OBJECTION
(INCLUDING, WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY
JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT OF THE AGENT TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE
COURTS OF ANY OTHER JURISDICTION.
(C) WAIVER OF JURY TRIAL. EACH OF THE AGENT, LENDERS,
--------------------
ISSUING BANKS, THE PARENT GUARANTOR AND THE BORROWER IRREVOCABLY
WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT. ANY OF THE BORROWER, THE PARENT
GUARANTOR, THE AGENT, THE ISSUING BANKS OR THE LENDERS MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.
15.18 Counterparts; Effectiveness; Inconsistencies. This
--------------------------------------------
Agreement and any amendments, waivers, consents, or supplements hereto
may be executed in counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument. This
Agreement shall become effective against the Borrower, the Parent
Guarantor, each Lender, each Issuing Bank and the Agent on the Closing
Date. This Agreement and each of the other Loan Documents shall be
construed to the extent reasonable to be consistent one with the
other, but to the extent that the terms and conditions of this
Agreement are actually inconsistent with the terms and conditions of
any other Loan Document, this Agreement shall govern.
15.19 Limitation on Agreements. All agreements among the
------------------------
Borrower, the Parent Guarantor, the Agent, each Lender and each
Issuing Bank in the Loan Documents are hereby expressly limited so
that in no event shall any of the Loans or other amounts payable by
the Borrower or the Parent Guarantor under any of the Loan Documents
be directly or indirectly secured (within the meaning of Regulation U)
by Margin Stock.
15.20 Confidentiality. Subject to Section 15.1(f), the Lenders
--------------- ---------------
and the Issuing Banks shall hold all nonpublic information obtained
pursuant to the requirements of this Agreement in accordance with such
Lender's or such Issuing Bank's customary procedures for handling
confidential information of this nature and in accordance with safe
and sound banking practices and in any event may make disclosure
reasonably required by a bona fide offeree, transferee or participant
in connection with the contemplated transfer or participation or as
required or requested by any Governmental Authority or representative
thereof or pursuant to legal process and shall require any such
offeree, transferee or participant to agree (and require any of its
offerees, transferees or participants to agree) to comply with this
Section 15.20. In no event shall any Lender or any Issuing Bank be
- -------------
obligated or required to return any materials furnished by the
Borrower or the Parent Guarantor; provided, however, each offeree
-------- -------
shall be required to agree that if it does not become a transferee or
participant it shall return all materials furnished to it by the
Borrower or the Parent Guarantor in connection with this Agreement.
Any and all confidentiality agreements entered into between any Lender
or any Issuing Bank and the Borrower and the Parent Guarantor shall
survive the execution of this Agreement.
15.21 Entire Agreement. This Agreement, taken together with all
----------------
of the other Loan Documents, embodies the entire agreement and
understanding among the parties hereto and supersedes the Commitment
Letter (except for provisions therein specifically referred to herein)
and all prior agreements and understandings, written and oral,
relating to the subject matter hereof.
15.22 Advice of Counsel. The Borrower, the Parent Guarantor and
-----------------
each Lender and Issuing Bank understand that the Agent's counsel
represents only the Agent's and its Affiliates' interests and that the
Borrower, the Parent Guarantor, other Lenders and other Issuing Banks
are advised to obtain their own counsel. The Borrower and the Parent
Guarantor each represents and warrants to the Agent and the other
Secured Parties that it has discussed this Agreement with its counsel.
IN WITNESS WHEREOF, this Agreement has been duly executed
as of the date first above written.
BORROWER: AMERICAN ECO FUNDING CORP.
- ---------
By /s/ Michael E. McGinnis
--------------------------------
Name: Michael E. McGinnis
Title: President
Notice Address:
c/o American Eco Corporation
11011 Jones Road
Houston, Texas 77070
Attn: David L. Norris
Telecopier No. (281) 774-7006
with a copy to:
Reid & Priest LLP
40 West 57th Street
New York, New York 10019
Attn: Bruce A. Rich, Esq.
Telecopier No. (212) 603-2001
PARENT GUARANTOR: AMERICAN ECO CORPORATION
- -----------------
By /s/ Michael E. McGinnis
--------------------------------
Name: Michael E. McGinnis
Title: President
Notice Address:
American Eco Corporation
11011 Jones Road
Houston, Texas 77070
Attn: David L. Norris
Telecopier No. (281) 774-7006
with a copy to:
Reid & Priest LLP
40 West 57th Street
New York, New York 10019
Attn: Bruce A. Rich, Esq.
Telecopier No. (212) 603-2001
AGENT: UNION BANK OF CALIFORNIA, N.A., as Agent
- ------
By /s/ Grant Ahearn
--------------------------------
Name: Grant Ahearn
Title: Senior Vice President
By /s/ Vicente C. Bendanillo
--------------------------------
Name: Vicente C. Bendanillo
Title: Vice President
Notice Address:
Union Bank of California, N.A.
445 South Figueroa Street
Los Angeles, California 90071
Attn: Vicente C. Bendanillo, Jr.
Telecopier No. (213) 236-4096
with a copy to:
Sidley & Austin
555 West Fifth Street, 40th Floor
Los Angeles, California 90013
Attn: Edward Eddy, Esq.
Telecopier No. (213) 896-6600
LENDER AND ISSUING BANK: UNION BANK OF CALIFORNIA, N.A.
- ------------------------
By /s/ Grant Ahearn
--------------------------------
Name: Grant Ahearn
Title: Senior Vice President
By /s/ Vicente C. Bendanillo
---------------------------------
Name: Vicente C. Bendanillo
Title: Vice President
Notice Address
and Domestic Lending Office:
Union Bank of California, N.A.
445 South Figueroa Street
Los Angeles, California 90071
Attn: Vicente C. Bendanillo, Jr.
Telecopier No. (213) 236-4096
Eurodollar Lending Office or
Eurodollar Affiliate:
Union Bank of California, N.A.
445 South Figueroa Street
Los Angeles, California 90071
Attn: Vicente C. Bendanillo, Jr.
Telecopier No. (213) 236-4096
Pro Rata Share: 100 %
------------
Term Loan Commitment: $ 52,500,000
------------
Revolving Credit Commitment: $ 12,000,000 (1)
------------
Acquisition Facility
Commitment: $ 50,000,000
------------
- ---------------------
(1) Prior to the Acquisition Facility Closing Date, the Revolving
Credit Commitment is $12,000,000; on and after the Acquisition Facility
Closing Date, the Revolving Credit Commitment is $25,000,000.