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EXHIBIT 10.1
EXECUTION COPY
$165,000,000
CREDIT AGREEMENT
Dated as of February 4, 1998
Among
APC HOLDING, INC.,
as Borrower,
and
THE INITIAL LENDERS NAMED HEREIN,
as Initial Lenders,
and
NATIONSCREDIT COMMERCIAL CORPORATION,
as Collateral Agent and as Initial Issuing Bank,
and
NATIONSBRIDGE, L.L.C.,
as Administrative Agent.
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T A B L E O F C O N T E N T S
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms...............................................1
1.02. Computation of Time Periods........................................25
1.03. Accounting Terms...................................................25
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
2.01. The Advances and the Letters of Credit.............................25
2.02. Making the Advances................................................26
2.03. Issuance of and Drawings and Reimbursement Under
Letters of Credit.................................................27
2.04. Repayment of Advances..............................................29
2.05. Termination or Reduction of the Commitments........................31
2.06. Prepayments........................................................32
2.07. Interest...........................................................33
2.08. Fees...............................................................34
2.09. Conversion of Advances.............................................35
2.10. Increased Costs, Etc...............................................35
2.11. Payments and Computations..........................................36
2.12. Taxes..............................................................37
2.13. Sharing of Payments, Etc...........................................39
2.14. Use of Proceeds....................................................40
2.15. Defaulting Lenders.................................................40
ARTICLE III
CONDITIONS OF LENDING
3.01. Conditions Precedent to Initial Extension of Credit................42
3.02. Conditions Precedent to Each Borrowing and Issuance................49
3.03. Determinations Under Section 3.01..................................49
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of the Borrower.....................50
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Section Page
ARTICLE V
COVENANTS OF THE BORROWER
5.01. Affirmative Covenants..............................................56
5.02. Negative Covenants.................................................65
5.03. Reporting Requirements.............................................70
5.04. Financial Covenants................................................74
ARTICLE VI
EVENTS OF DEFAULT
6.01. Events of Default..................................................76
6.02. Actions in Respect of the Letters of Credit upon Default...........79
ARTICLE VII
THE AGENTS
7.01. Authorization and Action...........................................80
7.02. Agents' Reliance, Etc..............................................80
7.03. NationsBridge, NationsCredit and Affiliates........................80
7.04. Lender Party Credit Decision.......................................81
7.05. Indemnification....................................................81
7.06. Successor Agents...................................................82
ARTICLE VIII
MISCELLANEOUS
8.01. Amendments, Etc....................................................83
8.02. Notices, Etc.......................................................84
8.03. No Waiver; Remedies................................................84
8.04. Costs and Expenses.................................................84
8.05. Right of Set-off...................................................85
8.06. Binding Effect.....................................................86
8.07. Assignments and Participations.....................................86
8.08. Execution in Counterparts..........................................88
8.09. No Liability of the Issuing Bank...................................88
8.10. Confidentiality....................................................88
8.11. Jurisdiction, Etc..................................................89
8.12. Governing Law......................................................89
8.13. Waiver of Jury Trial...............................................90
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SCHEDULES
Schedule I - Commitments and Applicable Lending Offices
Schedule II - Owners
Schedule III - EBITDA Adjustments
Schedule 3.01(g) - Disclosed Litigation
Schedule 3.01(n)(x) - Mortgaged Property
Schedule 3.01(n)(x)(B) - Surveyed Property
Schedule 3.01(n)(xxiv) - Local Counsel Jurisdictions
Schedule 4.01(a) - Parent Ownership
Schedule 4.01(b) - Subsidiaries
Schedule 4.01(d) - Governmental Authorization
Schedule 4.01(m) - Plans and Multiemployer Plans
Schedule 4.01(u) - Environmental
Schedule 4.01(z) - Open Years
Schedule 4.01(ee) - Existing Debt
Schedule 4.01(ff) - Surviving Debt
Schedule 4.01(gg) - Real Property
Schedule 4.01(hh) - Leasehold Property
Schedule 4.01(ii) - Investments
Schedule 4.01(jj) - Intellectual Properties
Schedule 5.01(d) - Insurance
Schedule 5.01(o)(ii) - Texas Property
Schedule 5.02(a) - Existing Liens
EXHIBITS
Exhibit A-1 - Form of Term A Note
Exhibit A-2 - Form of Term B Note
Exhibit A-3 - Form of Revolving Credit Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Security Agreement
Exhibit E - Form of Subsidiary Guaranty
Exhibit F - Form of Parent Guaranty
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Exhibit G - Form of Solvency Certificate
Exhibit H - Form of Opinion of Counsel to the Loan Parties
Exhibit I - Form of Intellectual Property Security Agreement
Exhibit J - Form of Intellectual Property Opinion
Exhibit K - Borrowing Base Certificate
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CREDIT AGREEMENT
CREDIT AGREEMENT dated as of February 4, 1998 (this "Agreement")
among APC HOLDING, INC., a Delaware corporation (the "Borrower") and a wholly
owned subsidiary of AFA Holdings Co., a Delaware corporation (the "Parent"), the
banks, financial institutions and other institutional lenders listed on the
signature pages hereof as the Initial Lenders (the "Initial Lenders"),
NATIONSCREDIT COMMERCIAL CORPORATION ("NationsCredit"), as collateral agent (in
such capacity and together with any successor appointed pursuant to Article VII,
the "Collateral Agent"), and as initial issuing bank (in such capacity, the
"Initial Issuing Bank"), and NATIONSBRIDGE, L.L.C. ("NationsBridge"), as
administrative agent (in such capacity and together with NationsCredit or any
other successor appointed pursuant to Article VII, the "Administrative Agent")
for the Lender Parties (as hereinafter defined).
PRELIMINARY STATEMENTS:
(1) Continental Acquisition Corp. ("CAC"), a wholly-owned subsidiary
of the Borrower, as purchaser, has entered into an Asset Purchase Agreement
dated as of January 14, 1998 (as amended, supplemented or otherwise modified
from time to time in accordance with its terms and the provisions of the Loan
Documents (as hereinafter defined), the "Purchase Agreement") with Contico
International, Inc., as seller, a Missouri corporation (the "Seller"), pursuant
to which CAC has agreed to purchase the Continental Sprayers International and
Contour Cutting divisions and certain other assets (collectively, the "Acquired
Business") from the Seller (the "Acquisition").
(2) The Borrower has requested that the Lender Parties lend to the
Borrower, and issue Letters of Credit (as hereinafter defined) for the account
of the Borrower, in an aggregate principal amount of up to $165,000,000, to
finance the Acquisition, refinance certain existing indebtedness of the
Subsidiaries of the Borrower, pay related costs and expenses of the Borrower,
and, from time to time, provide working capital for the Borrower and its
Subsidiaries (as hereinafter defined). The Lender Parties have indicated their
willingness to agree to lend such amounts on the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Acquisition" has the meaning specified in Preliminary Statement (1)
to this Agreement.
"Acquired Business" has the meaning specified in Preliminary
Statement (1) to this Agreement.
"Administrative Agent" has the meaning specified in the recital of
parties to this Agreement.
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"Administrative Agent's Account" means the account of the
Administrative Agent maintained at NationsBank at NationsBank's office at
100 North Tryon Street, Charlotte, North Carolina 28255, Account No.
13661-22506, Attention: Corporate Credit Services or such other account as
shall be designated in writing by the Administrative Agent to the Borrower
and the Lender Parties.
"Advance" means a Term A Advance, a Term B Advance, a Revolving
Credit Advance or a Letter of Credit Advance.
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling,"
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 10% or more of the
Voting Stock of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
Voting Stock, by contract or otherwise.
"Agents" means the Collateral Agent and the Administrative Agent.
"Alternate Base Rate" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be equal
to the higher of:
(a) the rate of interest announced publicly by NationsBank in
Charlotte, North Carolina, from time to time, as its prime rate; and
(b) 1/2 of 1% per annum above the Federal Funds Rate.
"Alternate Base Rate Advance" means an Advance that bears interest
as provided in Section 2.07(a)(i).
"Applicable Lending Office" means, with respect to each Lender
Party, such Lender Party's Domestic Lending Office in the case of an
Alternate Base Rate Advance and such Lender Party's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance.
"Applicable Margin" means:
(a) with respect to any Term A Advance at any time prior to
the Bridge Repayment Date, subject to clause (e) below, a percentage
per annum equal to (i) for Eurodollar Rate Advances, 3.75% and (ii)
for Alternate Base Rate Advances, 2.75%, plus, in each case, an
additional 0.5% on and after each of (x) the date that falls four
months after the Closing Date, (y) the date that falls six months
after the Closing Date and (z) the last day of each three month
period thereafter,
(b) with respect to any Term B Advance at any time, a
percentage per annum as it may be in effect from time to time equal
to (i) for Eurodollar Rate Advances, 5.5% and (ii) for Alternate
Base Rate Advances, 4.5%, plus, in each case, an additional 0.5% on
and after each of (x) the date that falls four months after the
Closing Date, (y) the date that falls six months after the Closing
Date and (z) the last day of each three month period thereafter,
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(c) with respect to any Revolving Credit Advance at any time
prior to the Bridge Repayment Date, a percentage per annum equal to
(i) for Eurodollar Rate Advances, 3.0% and (ii) for Alternate Base
Rate Advances, 2.0%,
(d) with respect to (i) any Term A Advance or (ii) any
Revolving Credit Advance, in each case at any time on or after the
High Yield Date, a percentage per annum as it may be in effect from
time to time determined by reference to the Leverage Ratio, as set
forth below:
================================================================================
LEVERAGE RATIO EURODOLLAR RATE ALTERNATE BASE
ADVANCES RATE ADVANCES
- --------------------------------------------------------------------------------
Level I Term A Revolving Term A Revolving
Credit Credit
---------------------------------------------------
less than 4.5:1.0 2.00% 1.75% 1.00% 0.75%
- --------------------------------------------------------------------------------
Level II
2.25% 2.00% 1.25% 1.00%
4.5:1.0 or greater,
but less than 5.0:1.0
- --------------------------------------------------------------------------------
Level III
5.0:1.0 or greater 2.50% 2.25% 1.50% 1.25%
================================================================================
In the case of clauses (d) above, the Applicable Margin for each Advance
shall be determined by reference to the Leverage Ratio in effect from time
to time; provided, however, that (A) no change in the Applicable Margin
shall be effective until three Business Days after the date on which the
Administrative Agent receives the financial statements required to be
delivered pursuant to Section 5.03(b) or (c), as the case may be, and a
certificate of the chief financial officer of the Borrower demonstrating
such Leverage Ratio and (B) the Applicable Margin for clause (d) above
shall be at Level III for so long as the Borrower has not submitted to the
Administrative Agent the information described in clause (A) of this
proviso as and when required under Section 5.03(b) or (c), as the case may
be.
"Appropriate Lender" means, at any time, with respect to (a) any of
the Term A Facility, the Term B Facility or the Revolving Credit Facility,
a Lender that has a Commitment with respect to such Facility at such time
and (b) the Letter of Credit Facility, (i) the Issuing Bank and (ii) if
the other Revolving Credit Lenders have made Letter of Credit Advances
pursuant to Section 2.03(c) that are outstanding at such time, each such
other Revolving Credit Lender.
"Asset Sale" means any sale, lease or other disposition (including
any such transaction effected by way of merger or consolidation) by any
Loan Party or any of its Subsidiaries of any asset, but excluding
dispositions of inventory in the ordinary course of business; provided
that a disposition of assets not excluded by the foregoing during any
Fiscal Year shall constitute an Asset Sale only to the extent that the
aggregate Net Cash Proceeds from such disposition, when combined with all
other such dispositions previously made during such Fiscal Year, exceeds
$250,000.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender Party and an Eligible Assignee, and accepted by
the Administrative Agent, in accordance with Section 8.07 and in
substantially the form of Exhibit C hereto.
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"Available Amount" of any Letter of Credit means, at any time, the
maximum amount available to be drawn under such Letter of Credit at such
time (assuming compliance at such time with all conditions to drawing).
"Bank Hedge Agreement" means any Hedge Agreement required or
permitted under Article V that is entered into by and between the Borrower
and any Hedge Bank.
"Borrower" has the meaning specified in the recital of parties to
this Agreement.
"Borrower's Account" means the account of the Borrower maintained by
the Borrower with NationsBank at its office at 100 North Tryon Street,
Charlotte, North Carolina 28255, Account No. 375- 100-8837.
"Borrowing" means a Term A Borrowing, a Term B Borrowing or a
Revolving Credit Borrowing.
"Borrowing Base" means, on any date, a dollar amount equal to the
sum of 85% of Eligible Receivables and 60% of Eligible Inventory, each
determined as of such date.
"Borrowing Base Certificate" means a certificate, duly executed by
the chief financial officer or treasurer of the Borrower, appropriately
completed and substantially in the form of Exhibit K hereto.
"Borrowing Base Subsidiaries" means AFA Products, Inc., a Delaware
corporation and Continental Acquisition Corp., a Delaware corporation, and
their respective successors.
"Bridge Advances" means, at any time, (a) all of the Term A Advances
outstanding at such time in excess of $20,000,000 and (b) all of the Term
B Advances outstanding at such time .
"Bridge Repayment Date" means the date on which (i) all the Term B
Advances are repaid in full pursuant to Section 2.06 and the Term B
Commitments are terminated pursuant to Section 2.05 and (ii) an amount of
Term A Advances is repaid pursuant to Section 2.06 such that the remaining
aggregate outstanding amount of Term A Advances is equal to or less than
$20,000,000 and the Term A Commitments are reduced to $20,000,000 or less
pursuant to Section 2.05.
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in Charlotte, North Carolina and,
if the applicable Business Day relates to any Eurodollar Rate Advances, on
which dealings are carried on in the London interbank market.
"CAC" has the meaning specified in Preliminary Statement (1) to this
Agreement.
"Capital Contribution Agreement" has the meaning specified in
Section 3.01(n)(xxi).
"Capital Escrow Agreement" has the meaning specified in Section
3.01(n)(xxi).
"Capital Expenditures" means, for any Person for any period, the sum
of (a) all expenditures made, directly or indirectly, by such Person or
any of its Subsidiaries during such period for equipment, fixed assets,
real property or improvements, or for replacements or substitutions
therefor or additions thereto, that have been or should be, in accordance
with GAAP, reflected as additions to property, plant or equipment on a
Consolidated balance sheet of such Person or have a useful life of more
than one year
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minus (b) any such expenditures made for the replacement or restoration of
assets to the extent financed by condemnation awards or proceeds of
insurance received with respect to the loss or taking of or damage to the
asset or assets being replaced or restored, plus (c) the aggregate
principal amount of all Debt (including Obligations under Capitalized
Leases) assumed or incurred in connection with any such expenditures.
"Capitalized Leases" means all leases that have been or should be,
in accordance with GAAP, recorded as capitalized leases.
"Cash Collateral Account" has the meaning specified in the Security
Agreement.
"Cash Equivalents" means any of the following, to the extent owned
by the Borrower or any of its Subsidiaries free and clear of all Liens
other than Liens created under the Collateral Documents and having a
maturity of not greater than 90 days from the date of issuance thereof:
(a) readily marketable direct obligations of the Government of the United
States or any agency or instrumentality thereof or obligations
unconditionally guaranteed by the full faith and credit of the Government
of the United States, (b) insured certificates of deposit of or time
deposits with any commercial bank that is a Lender Party or a member of
the Federal Reserve System, issues (or the parent of which issues)
commercial paper rated as described in clause (c), is organized under the
laws of the United States or any State thereof and has a combined capital
and surplus of at least $1 billion or (c) commercial paper in an aggregate
amount of no more than $5,000,000 per issuer outstanding at any time,
issued by any corporation organized under the laws of any State of the
United States and rated at least "Prime-1" (or the then equivalent grade)
by Moody's Investors Service, Inc. or "A-1" (or the then equivalent grade)
by Standard & Poor's, a division of The McGraw-Hill Companies, Inc.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency.
"Closing Date" means the first date on which the conditions
precedent set forth in Article III shall have been satisfied.
"Collateral" means all "Collateral" referred to in the Collateral
Documents and all other property that is or is intended to be subject to
any Lien in favor of the Administrative Agent for the benefit of the
Secured Parties.
"Collateral Agent" has the meaning specified in the recital of
parties hereto.
"Collateral Documents" means the Security Agreement, the
Intellectual Property Security Agreement, the Pledge Agreement, the
Mortgages and any other agreement that creates or purports to create a
Lien in favor of the Administrative Agent for the benefit of the Secured
Parties.
"Commitment" means a Term A Commitment, Term B Commitment, a
Revolving Credit Commitment or a Letter of Credit Commitment.
"Confidential Information" means information that the Borrower
furnishes to any Agent or any Lender Party in a writing designated as
confidential, but does not include any such information that is or
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becomes generally available to the public or that is or becomes available
to such Agent or such Lender Party from a source other than the Borrower
that is not, to the best of such Agent's or such Lender Party's knowledge,
acting in violation of a confidentiality agreement with the Borrower.
"Consent Letter" has the meaning specified in Section 5.01(t).
"Consolidated" refers to the consolidation of accounts in accordance
with GAAP.
"Consolidated Free Cash Flow" means, for any period, EBITDA for such
period minus the sum of the following amounts:
(i) all cash payments of income taxes by the Loan Parties and
their Subsidiaries during such period solely to the extent such
taxes are directly attributable to the operations of the Borrower
and its Subsidiaries;
(ii) Consolidated Capital Expenditures for such period, to the
extent that such Consolidated Capital Expenditures are permitted by
Section 5.02(p) and are not financed during such period (and will
not be financed in any future period) with the proceeds of Debt of
the Borrower or any of its Subsidiaries permitted by Sections
5.02(b)(iii)(B) or (C); and
(iii) any Net Cash Proceeds in respect of Asset Sales to the
extent a prepayment was made in respect thereof pursuant to Section
2.06(b)(ii).
"Constitutive Documents" means, with respect to any Person, the
certificate of incorporation or registration (including, if applicable,
certificate of change of name), articles of incorporation or association,
memorandum of association, charter, bylaws, partnership agreement, trust
agreement, joint venture agreement, limited liability company operating or
members agreement, joint venture agreement or one or more similar
agreements, instruments or documents constituting the organization or
formation of such Person.
"Conversion", "Convert" and "Converted" each refer to a conversion
of Advances of one Type into Advances of the other Type pursuant to
Section 2.09 or 2.10.
"Current Assets" of any Person means all assets of such Person that
would, in accordance with GAAP, be classified as current assets of a
company conducting a business the same as or similar to that of such
Person, after deducting adequate reserves in each case in which a reserve
is proper in accordance with GAAP.
"Current Liabilities" of any Person means (a) all Debt of such
Person except Funded Debt that by its terms is payable on demand or
matures within one year after the date of determination that in accordance
with GAAP would be classified as current liabilities of such Person
(excluding any Debt renewable or extendible, at the option of such Person,
to a date more than one year from such date or arising under a revolving
credit or similar agreement that obligates the lender or lenders to extend
credit during a period of more than one year from such date) and (b) all
other items (including taxes accrued as estimated) that in accordance with
GAAP would be classified as current liabilities of such Person.
"Debt" of any Person means (a) all indebtedness of such Person for
borrowed money, (b) all Obligations of such Person for the deferred
purchase price of property or services (other than trade payables and
accrued expenses incurred in the ordinary course of such Person's
business), (c) all
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Obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all Obligations of such Person created or arising
under any conditional sale or other title retention agreement with respect
to property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are
limited to repossession or sale of such property), (e) all Obligations of
such Person as lessee under Capitalized Leases, (f) all Obligations,
contingent or otherwise, of such Person under acceptance, letter of credit
or similar facilities, (g) all Obligations of such Person to purchase,
redeem, retire, defease or otherwise make any payment in respect of any
capital stock of or other ownership or profit interest in such Person or
any other Person or any warrants, rights or options to acquire such
capital stock, valued, in the case of Redeemable Preferred Stock, at the
greater of its voluntary or involuntary liquidation preference plus
accrued and unpaid dividends, (h) all Obligations of such Person in
respect of Hedge Agreements, (i) all Debt of others referred to in clauses
(a) through (h) above or clause (j) below guaranteed directly or
indirectly in any manner by such Person, or in effect guaranteed directly
or indirectly by such Person through an agreement (i) to pay or purchase
such Debt or to advance or supply funds for the payment or purchase of
such Debt, (ii) to purchase, sell or lease (as lessee or lessor) property,
or to purchase or sell services, primarily for the purpose of enabling the
debtor to make payment of such Debt or to assure the holder of such Debt
against loss, (iii) to supply funds to or in any other manner invest in
the debtor (including any agreement to pay for property or services
irrespective of whether such property is received or such services are
rendered) or (iv) otherwise to assure a creditor against loss, and (j) all
Debt referred to in clauses (a) through (i) above of another Person
secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on property
(including, without limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for
the payment of such Debt.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"Defaulted Advance" means, with respect to any Lender Party at any
time, the portion of any Advance required to be made by such Lender Party
to the Borrower pursuant to Section 2.01 or 2.02 at or prior to such time
which has not been made by such Lender Party or by the Administrative
Agent for the account of such Lender Party pursuant to Section 2.02(d) as
of such time. In the event that a portion of a Defaulted Advance shall be
deemed made pursuant to Section 2.15(a), the remaining portion of such
Defaulted Advance shall be considered a Defaulted Advance originally
required to be made pursuant to Section 2.01 on the same date as the
Defaulted Advance so deemed made in part.
"Defaulted Amount" means, with respect to any Lender Party at any
time, any amount required to be paid by such Lender Party to the
Administrative Agent or any other Lender Party hereunder or under any
other Loan Document at or prior to such time which has not been so paid as
of such time, including, without limitation, any amount required to be
paid by such Lender Party to (a) the Issuing Bank pursuant to Section
2.03(c) to purchase a portion of a Letter of Credit Advance made by the
Issuing Bank, (b) the Administrative Agent pursuant to Section 2.02(d) to
reimburse the Administrative Agent for the amount of any Advance made by
the Administrative Agent for the account of such Lender Party, (c) any
other Lender Party pursuant to Section 2.13 to purchase any participation
in Advances owing to such other Lender Party and (d) the Administrative
Agent or the Issuing Bank pursuant to Section 7.05 to reimburse the
Administrative Agent or the Issuing Bank for such Lender Party's ratable
share of any amount required to be paid by the Lender Parties to the
Administrative Agent or the Issuing Bank as provided therein. In the event
that a portion of a Defaulted Amount shall be deemed paid pursuant to
Section 2.15(b), the remaining portion of such Defaulted Amount shall be
considered a Defaulted
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Amount originally required to be paid hereunder or under any other Loan
Document on the same date as the Defaulted Amount so deemed paid in part.
"Defaulting Lender" means, at any time, any Lender Party that, at
such time, (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall
take any action or be the subject of any action or proceeding of a type
described in Section 6.01(f).
"Disclosed Litigation" has the meaning specified in Section 3.01(g).
"Domestic Lending Office" means, with respect to any Lender Party,
the office of such Lender Party specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender Party, as the case may be, or such
other office of such Lender Party as such Lender Party may from time to
time specify to the Borrower and the Administrative Agent.
"EBITDA" means, for any period, the sum, determined on a
Consolidated basis, without duplication, of (a) Net Income, (b) interest
expense, (c) income tax expense, (d) depreciation expense, (e)
amortization expense, and (f) for any period ending on or prior to the one
year anniversary of the Closing Date, the aggregate amount of one-time,
non-recurring costs, expenses and fees, whether cash or non-cash,
amortized or expensed (to the extent deducted in arriving at Net Income
and to the extent not otherwise included in clauses (b) through (e) above)
set forth on Schedule III hereto, in each case of the Borrower and its
Subsidiaries, determined in accordance with GAAP for such period,
provided, however, that there shall be excluded from each of the items
referred to in clauses (b) through (f) above (to the extent otherwise
included in the calculation of Net Income) such expenses, costs and fees
that would otherwise be included therein of any Consolidated Subsidiary of
such Person to the extent that the income of such Consolidated Subsidiary
is excluded from Net Income pursuant to the proviso to the definition of
"Net Income."
"Eligible Assignee" means (a) with respect to any Facility (other
than the Letter of Credit Facility), (i) a Lender; (ii) an Affiliate of a
Lender; (iii) a commercial bank organized under the laws of the United
States, or any State thereof, and having total assets in excess of
$500,000,000; (iv) a savings and loan association or savings bank
organized under the laws of the United States, or any State thereof, and
having total assets in excess of $500,000,000; (v) a commercial bank
organized under the laws of any other country that is a member of the OECD
or has concluded special lending arrangements with the International
Monetary Fund associated with its General Arrangements to Borrow, or a
political subdivision of any such country, and having total assets in
excess of $500,000,000, so long as such bank is acting through a branch or
agency located in the United States; (vi) the central bank of any country
that is a member of the OECD; (vii) a finance company, insurance company
or other financial institution or fund (whether a corporation,
partnership, trust or other entity) that is engaged in making, purchasing
or otherwise investing in commercial loans in the ordinary course of its
business and having total assets in excess of $500,000,000; and (viii) any
other Person approved by the Administrative Agent, such approval not to be
unreasonably withheld or delayed, and (b) with respect to the Letter of
Credit Facility, a Person that is an Eligible Assignee under subclause
(iii) or (v) of clause (a) of this definition and is approved by the
Administrative Agent, such approval not to be unreasonably withheld or
delayed; provided, however, that neither any Loan Party nor any Affiliate
of a Loan Party shall qualify as an Eligible Assignee under this
definition.
"Eligible Inventory" means, at any date of determination thereof,
the aggregate value (determined at the lower of cost or market on a basis
consistent with GAAP at such date of all Inventory
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9
owned by the Borrowing Base Subsidiaries and located in any jurisdiction
in the United States of America or Costa Rica as to which appropriate UCC
financing statements have been filed naming any such Borrowing Base
Subsidiary as "debtor" and the Collateral Agent as "secured party" or, in
the case of Inventory located in Costa Rica, as to which other appropriate
measures have been taken to perfect the security interest of the
Collateral Agent in such Inventory (including the delivery of a legal
opinion to the Collateral Agent with respect to such security interest),
all in form and substance satisfactory to the Collateral Agent, all net of
any amounts payable by such Borrowing Base Subsidiaries in respect of
commissions, processing fees or other charges, excluding, however, without
duplication (i) any such Inventory which has been shipped to a customer,
even if on a consignment or "sale or return" basis and whether or not such
Inventory has been subsequently returned by such customer; (ii) any
Inventory subject to a Lien (other than Liens created pursuant to the
Security Agreement), including a landlord's or warehouseman's Lien; (iii)
any Inventory against which the applicable Borrowing Base Subsidiary has
taken a reserve; (iv) any Inventory not subject to a valid and perfected
first-priority Lien in favor of the Collateral Agent under the Security
Agreement, subject to no prior or equal Lien; (v) any Inventory not
produced in compliance with the applicable requirements of the Fair Labor
Standards Act; and (vi) any supply, scrap or obsolete Inventory and any
Inventory that is not reasonably marketable; provided that no Inventory
located in Costa Rica on such date of determination that would otherwise
constitute Eligible Inventory shall constitute Eligible Inventory to the
extent that the sum of such Inventory plus the aggregate amount of all
Eligible Inventory located in Costa Rica on such date of determination
exceeds $600,000.
"Eligible Receivables" means, at any date of determination thereof,
the aggregate amount of all Receivables at such date due to any Borrowing
Base Subsidiary other than the following (determined without duplication);
(a) (i) any Receivable due from an account debtor that is not
both domiciled in the United States of America or Canada and (if not
a natural person) organized under the laws of the United States of
America or Canada or any political subdivision thereof; provided
that if such account debtor is either domiciled or organized under
the laws of Canada or any subdivision thereof (a "Canadian Account
Debtor"), such Receivable shall not be an Eligible Receivable (A) to
the extent that the sum of such Receivable plus the aggregate amount
of all Eligible Receivables owing from Canadian Account Debtors
exceeds $1,000,000 or (B) if the Collateral Agent does not have a
perfected security interest in such Receivable under all applicable
laws of Canada and any subdivision thereof and (ii) any Receivable
that is not denominated and payable in U.S. dollars;
(b) any Receivable that does not comply with all applicable
legal requirements, including, without limitation, all laws, rules,
regulations and orders of any governmental or judicial authority
(including any Receivable due from an account debtor located in the
States of Indiana, New Jersey or Minnesota, unless such Borrowing
Base Subsidiary (at the time the Receivable was created and at all
times thereafter) (i) has filed and has maintained effective a
current notice of business activities report with the appropriate
office or agency of the State of Indiana, New Jersey or Minnesota,
as applicable or (ii) was and has continued to be exempt from filing
such report and has provided the Collateral Agent with satisfactory
evidence thereof;
(c) any Receivable in respect of which there is any unresolved
dispute with the account debtor, but only to the extent of such
dispute;
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(d) any Receivable payable more than 30 days after the date of
the issuance of the original invoice therefor;
(e) any Receivable that remains unpaid for more than 60 days
from the original due date specified at the time of the original
issuance of the invoice therefor;
(f) any unbilled Receivable and any Receivable in respect of
goods not yet shipped;
(g) any Receivable arising outside the ordinary course of
business of the Borrower;
(h) any Receivable in respect of which there has been
established a contra account, or which is due from an account debtor
to whom such Borrowing Base Subsidiary owes a trade payable, but
only to the extent of such account or trade payable;
(i) any Receivable that is not subject to a first priority
perfected Lien under the Security Agreement and any Receivable
evidenced by an "instrument" (as defined in the Uniform Commercial
Code) not in the possession of the Collateral Agent;
(j) any Receivable due from an account debtor (I) as to which
on such date Receivables representing more than 50% of aggregate
amount of all Receivables of such account debtor have remained
unpaid for more than 60 days from the original due date specified at
the time of the original issuance of the invoice therefor, (II) in
respect of which a credit loss has been recognized or reserved by
any Borrowing Base Subsidiary or any of its Subsidiaries, (III) in
respect of which the Collateral Agent shall have notified the
Borrower that such account debtor does not have a satisfactory
credit standing as determined in good faith by the Agent, (IV) that
is a Subsidiary or Affiliate of any Borrowing Base Subsidiary, (V)
that is the United States of America or any department, agency or
instrumentality thereof, unless such Borrowing Base Subsidiary has
complied in all respects with the Federal Assignment of Claims Act
of 1940, or (VI) that is the subject of a case or proceeding of the
type described in Section 6.01(f);
(k) any Receivable due from an account debtor that such
Borrowing Base Subsidiary has not instructed such account debtor in
the invoice therefor to make payments in respect of such Receivable
to a Pledged Account (as defined in the Security Agreement) or from
any account debtor that makes payments in a form that cannot be
accepted in the Pledged Account; and
(l) any Receivables due from an account debtor at any time, to
the extent that the aggregate outstanding amount of Receivables due
from such account debtor and its affiliates at such time exceeds
25%, in the case of any account debtor other than Monsanto-Solaris
Group, and 35%, in the case of Monsanto-Solaris Group, of the
aggregate amount of all Receivables due to the Borrowing Base
Subsidiaries at such time, but only to the extent of such excess.
"Employment Contracts" means each employment agreement and other
compensation arrangements with each officer of any Loan Party or any of
its Subsidiaries, including, without limitation, all employee stock option
plans of any such Loan Party or such Subsidiary.
16
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"Environmental Action" means any action, suit, demand, demand
letter, claim, notice of non-compliance or violation, notice of liability
or potential liability, investigation, proceeding, consent order or
consent agreement relating in any way to any Environmental Law, any
Environmental Permit or Hazardous Material or arising from alleged injury
or threat to health, safety or the environment, including, without
limitation, (a) by any governmental or regulatory authority for
enforcement, cleanup, removal, response, remedial or other actions or
damages and (b) by any governmental or regulatory authority or third party
for damages, contribution, indemnification, cost recovery, compensation or
injunctive relief.
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, decree or judicial or agency interpretation, policy or
guidance relating to pollution or protection of the environment, health,
safety or natural resources, including, without limitation, those relating
to the use, handling, transportation, treatment, storage, disposal,
release or discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of any Loan Party, or under
common control with any Loan Party, within the meaning of Section 414 of
the Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan
unless the 30-day notice requirement with respect to such event has been
waived by the PBGC, or (ii) the requirements of subsection (1) of Section
4043(b) of ERISA (taking into account subsection (2) of such Section) are
met with respect to a contributing sponsor, as defined in Section
4001(a)(13) of ERISA, of a Plan, and an event described in paragraph (9),
(10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably
expected to occur with respect to such Plan within the following 30 days;
(b) the application for a minimum funding waiver with respect to a Plan;
(c) the provision by the administrator of any Plan of a notice of intent
to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA (including
any such notice with respect to a plan amendment referred to in Section
4041(e) of ERISA); (d) the cessation of operations at a facility of any
Loan Party or any ERISA Affiliate in the circumstances described in
Section 4062(e) of ERISA; (e) the withdrawal by any Loan Party or any
ERISA Affiliate from a Multiple Employer Plan during a plan year for which
it was a substantial employer, as defined in Section 4001(a)(2) of ERISA;
(f) the conditions for imposition of a lien under Section 302(f) of ERISA
shall have been met with respect to any Plan; (g) the adoption of an
amendment to a Plan requiring the provision of security to such Plan
pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of
proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA
that constitutes grounds for the termination of, or the appointment of a
trustee to administer, such Plan.
"Eurocurrency Liabilities" has the meaning specified in Regulation D
of the Board of Governors of the Federal Reserve System, as in effect from
time to time.
"Eurodollar Lending Office" means, with respect to any Lender Party,
the office of such Lender Party specified as its "Eurodollar Lending
Office" opposite its name on Schedule I hereto or in the
17
12
Assignment and Acceptance pursuant to which it became a Lender Party (or,
if no such office is specified, its Domestic Lending Office), or such
other office of such Lender Party as such Lender Party may from time to
time specify to the Borrower and the Administrative Agent.
"Eurodollar Rate" means, for any Interest Period beginning (i) prior
to the Bridge Repayment Date with respect to Term A Advances or Term B
Advances, for all Eurodollar Rate Advances comprising part of the same
Borrowing, an interest rate per annum equal to the rate per annum obtained
by dividing (a) the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor
page) as the London interbank offered rate for deposits in U.S. dollars at
11:00 A.M. (London time) two Business Days before the first day of such
Interest Period in an amount substantially equal to NationsBridge's
Eurodollar Rate Advance comprising part of such Borrowing to be
outstanding during such Interest Period (or, if NationsBridge shall not
have such a Eurodollar Rate Advance, $1,000,000) and for a period equal to
such Interest Period (provided that if for any reason such rate is not
available, the term "Eurodollar Rate" shall mean, for any Interest Period
for all Eurodollar Rate Advances comprising part of the same Borrowing,
the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) appearing on Reuters Screen LIBO Page as the London interbank offered
rate for deposits in Dollars at approximately 11:00 A.M. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more than one
rate is specified on Reuters Screen LIBO Page, the applicable rate shall
be the arithmetic mean of all such rates) by (b) a percentage equal to
100% minus the Eurodollar Rate Reserve Percentage for such Interest Period
and (ii) on and after the Bridge Repayment Date with respect to Term A
Advances or Term B Advances, and at any date with respect to Revolving
Credit Advances, in each case which are Eurodollar Rate Advances, for any
day in any Interest Period, the one month LIBO (London Interbank Offered
Rate) Rate published in The Wall Street Journal (the "Reported Rate") on
the first date of publication of The Wall Street Journal of the applicable
Interest Period. If The Wall Street Journal (i) publishes more than one
Reported Rate on any date of publication, the higher or highest of such
rates shall apply, or (ii) publishes a retraction or correction of any
Reported Rate, the corrected rate reported in such retraction or
correction shall apply. If the Reported Rate is no longer published at
least monthly, in the sole and absolute discretion of the Administrative
Agent, either (x) the Eurodollar Rate shall be deemed to be such other
London Interbank Offered Rate published in The Wall Street Journal and
reasonably satisfactory to the Administrative Agent, or (y) the Eurodollar
Rate shall be deemed to be the Alternative Base Rate.
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.07(a)(ii).
"Eurodollar Rate Reserve Percentage" means, for any Interest Period
for all Eurodollar Rate Advances comprising part of the same Borrowing,
the reserve percentage applicable two Business Days before the first day
of such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) 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 New York
City with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate
on Eurodollar Rate Advances is determined) having a term equal to such
Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
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13
"Excess Cash Flow" means, for any period, an amount equal to (i)
Consolidated Free Cash Flow plus (or minus), without duplication, (ii) any
net extraordinary cash gains (or extraordinary cash losses) for such
period of the Borrower and its Subsidiaries (except for such gains or
losses in respect of Asset Sales) plus (or minus) (iii) any decrease (or
increase) in the average of the Net Working Investment at the end of each
fiscal month ended during such period, when compared with the average of
the Net Working Investment at the end of each fiscal month ended during
the corresponding period in the prior Fiscal Year, plus (iv) any interest
income of the Borrower and its Subsidiaries for such period, minus (v) the
sum for such period of (x) Total Debt Service (exclusive of amortization
of debt discount or premium) for such period, (y) all optional prepayments
of the Advances pursuant to Section 2.06 during such period and (z) all
Permitted Payments made during such period.
"Existing Debt" has the meaning specified in Section 4.01(ee)
hereof.
"Extraordinary Receipt" means any cash received by or paid to or for
the account of any Person not in the ordinary course of business, tax
refunds, pension plan reversions, proceeds of insurance (other than
proceeds of business interruption insurance to the extent such proceeds
constitute compensation for lost earnings) and indemnity payments;
provided, however, that an Extraordinary Receipt shall not include (a)
cash receipts received from proceeds of insurance, condemnation awards (or
payments in lieu thereof) or indemnity payments to the extent that such
proceeds, awards or payments in respect of loss or damage to equipment,
fixed assets or real property are applied (or in respect of which
expenditures were previously incurred) to replace or repair the equipment,
fixed assets or real property in respect of which such proceeds were
received in accordance with the terms of the Loan Documents, so long as
such application is made within 12 months after the occurrence of such
damage or loss and (b) any reimbursement by the Seller of any fees payable
by the Borrower in connection with the Facilities.
"Facility" means the Term A Facility, the Term B Facility, the
Revolving Credit Facility or the Letter of Credit Facility.
"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, for the
next preceding Business Day) by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day for such transactions received by
the Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
"Fee Letter" means that certain fee letter dated February 2, 1998,
from NationsBridge, NationsCredit and NationsBank to the Borrower, as
amended, supplemented or otherwise modified from time to time.
"Fifth Amendment" means the Fifth Amendment dated as of January 30,
1998 to the Secured Credit Agreement dated as of December 22, 1993 among
Contico International Inc., the banks listed on the signature pages
thereof and Mercantile Bank National Association (formerly known as
Mercantile Bank of St. Louis, National Association) and NationsBank, N.A.
(successor by merger to the Boatmen's National Bank of St. Louis) as
agents for such banks and Fleet National Bank (formerly known as Fleet
Bank of Massachusetts, N.A.), as co-agent for such banks.
"First Warrant Agreement" has the meaning specified in Section
3.01(n)(xix).
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"Fiscal Year" means a fiscal year of the Borrower and its
Consolidated Subsidiaries ending on December 31 in any calendar year.
"Fixture" has the meaning specified in any Mortgage.
"Funded Debt" of any Person means Debt in respect of the Advances,
in the case of the Borrower, and all other Debt of such Person that by its
terms matures more than one year after the date of determination or
matures within one year from such date but is renewable or extendible, at
the option of such Person, to a date more than one year after such date or
arises under a revolving credit or similar agreement that obligates the
lender or lenders to extend credit during a period of more than one year
after such date, including, without limitation, all amounts of Funded Debt
of such Person required to be paid or prepaid within one year after the
date of determination.
"GAAP" has the meaning specified in Section 1.03.
"Guaranties" means the Parent Guaranty and the Subsidiary Guaranty.
"Hazardous Materials" means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas and
(b) any other chemicals, materials or substances designated, classified or
regulated as hazardous or toxic or as a pollutant or contaminant under any
Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements.
"Hedge Bank" means any Lender Party or any of its Affiliates in its
capacity as a party to a Bank Hedge Agreement.
"High Yield Date" means the date on which (i) all the Term B
Advances are repaid in full pursuant to Section 2.06 and the Term B
Commitments are terminated pursuant to Section 2.05 and (ii) an amount of
Term A Advances is repaid pursuant to Section 2.06 such that the remaining
aggregate outstanding amount of Term A Advances is equal to or less than
$20,000,000 and the Term A Commitments are reduced to $20,000,000 or less
pursuant to Section 2.05, provided, in each case, that such repayment is
made from the Net Cash Proceeds of Refinancing Securities consisting of
senior subordinated notes issued pursuant to a Rule 144A offering in an
aggregate amount equal to or exceeding $115,000,000.
"Indemnified Party" has the meaning specified in Section 8.04(b).
"Information Memorandum" means information supplied by the Borrower
to prospective Lenders, including, without limitation, the Borrower's
financial statements dated December 31, 1997 and the forecasts for each
year thereafter until the applicable Termination Date.
"Initial Extension of Credit" means the earlier to occur of the
initial Borrowing and the initial issuance of a Letter of Credit
hereunder.
"Initial Issuing Bank" has the meaning specified in the recital of
parties to this Agreement.
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"Initial Lenders" has the meaning specified in the recital of
parties to this Agreement.
"Insufficiency" means, with respect to any Plan, the amount, if any,
of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of
ERISA.
"Intellectual Property Security Agreement" has the meaning specified
in Section 3.01(n)(xx).
"Intercreditor Agreement" has the meaning specified in Section
5.01(t).
"Interest Expense" means, with respect to the Borrower for any
period, the aggregate interest charges incurred by the Borrower and its
Subsidiaries for such period, whether expensed or capitalized, including,
without limitation, the portion of any obligation under Capitalized Leases
allocable to interest expense in accordance with GAAP and the portion of
any debt discount or premium that shall be amortized in such period.
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such
Eurodollar Rate Advance or the date of the Conversion of any Alternate
Base Rate Advance into such Eurodollar Rate Advance, and ending on the
last day of the period selected by the Borrower pursuant to the provisions
below and, thereafter, each subsequent period commencing on the last day
of the immediately preceding Interest Period and ending on the last day of
the period selected by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be (i) for any Interest Period
commencing prior to the Bridge Repayment Date, with respect to Term A
Advances and Term B Advances, one, two or three months (or such other
period as each Lender and the Borrower may agree), as the Borrower may,
upon notice received by the Administrative Agent not later than 10:00 A.M.
(Charlotte, North Carolina time) on the third Business Day prior to the
first day of such Interest Period, select or (ii) for any Interest Period
commencing on or after the Bridge Repayment Date, with respect to Term A
Advances and Term B Advances, and at any date with respect to Revolving
Credit Advances, one month; provided, however, with respect to Term A
Advances and Term B Advances, that:
(a) the Borrower may not select any Interest Period with
respect to any Eurodollar Rate Advance under a Facility that ends
after any principal repayment installment date for such Facility
unless, after giving effect to such selection, the aggregate
principal amount of Alternate Base Rate Advances and of Eurodollar
Rate Advances having Interest Periods that end on or prior to such
principal repayment installment date for such Facility shall be at
least equal to the aggregate principal amount of Advances under such
Facility due and payable on or prior to such date;
(b) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Borrowing shall
be of the same duration;
(c) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next
succeeding Business Day; provided, however, that, if such extension
would cause the last day of such Interest Period to occur in the
next following calendar month, the last day of such Interest Period
shall occur on the next preceding Business Day; and
(d) whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that
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succeeds such initial calendar month by the number of months equal
to the number of months in such Interest Period, such Interest
Period shall end on the last Business Day of such succeeding
calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Inventory" has the meaning specified in the Security Agreement.
"Investment" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any capital stock or other ownership
or profit interest, warrants, rights, options, obligations or other
securities of such Person, any capital contribution to such Person or any
other investment in such Person, including, without limitation, any
arrangement pursuant to which the investor incurs Debt of the types
referred to in clause (i) or (j) of the definition of "Debt" in respect of
such Person.
"Issuing Bank" means the Initial Issuing Bank and each Eligible
Assignee to which a Letter of Credit Commitment hereunder has been
assigned pursuant to Section 8.07.
"L/C Cash Collateral Account" has the meaning specified in the
Security Agreement.
"L/C Related Documents" has the meaning specified in Section
2.04(c)(ii)(A).
"Leasehold Property" has the meaning specified in Section 4.01(hh).
"Lender Party" means any Lender or the Issuing Bank.
"Lenders" means the Initial Lenders and each Person that shall
become a Lender hereunder pursuant to Section 8.07.
"Letter of Credit" has the meaning specified in Section 2.01(d).
"Letter of Credit Advance" means an advance made by the Issuing Bank
or any Revolving Credit Lender pursuant to Section 2.03(c).
"Letter of Credit Agreement" has the meaning specified in Section
2.03(a).
"Letter of Credit Commitment" means, with respect to the Issuing
Bank at any time, the amount set forth opposite the Issuing Bank's name on
Schedule I hereto under the caption "Letter of Credit Commitment" or, if
the Issuing Bank has entered into one or more Assignments and Acceptances,
set forth for the Issuing Bank in the Register maintained by the
Administrative Agent pursuant to Section 8.07(d) as such Issuing Bank's
"Letter of Credit Commitment", as such amount may be reduced at or prior
to such time pursuant to Section 2.05.
"Letter of Credit Facility" means, at any time, an amount equal to
the amount of the Issuing Bank's Letter of Credit Commitment at such time,
as such amount may be reduced at or prior to such time pursuant to Section
2.05.
"Leverage Ratio" means, as of any date of determination, the ratio
of Funded Debt (excluding, until the documents required to be delivered
pursuant to Section 5.01(t) shall have been delivered or the
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17
refinancing contemplated therein shall have occurred, Funded Debt of Afa
Polytek B.V. incurred under the Polytek Agreement, to the extent the
amount of such Funded Debt does not exceed $10,000,000) as at the end of
the most recently ended fiscal quarter to Consolidated EBITDA for the most
recently completed four fiscal quarters of the Borrower and its
Subsidiaries, in each case as reflected in the financial statements most
recently delivered pursuant to Section 5.03(b) or (c) and the certificate
of the chief financial officer of the Borrower demonstrating such ratio;
provided, however, that for each fiscal quarter of the Borrower ending on
or prior to December 31, 1998, Consolidated EBITDA for the four fiscal
quarters then ended shall be the actual Consolidated EBITDA for the period
since the Closing Date multiplied by a fraction the numerator of which is
12 and the denominator of which is the number of months that have elapsed
since the Closing Date.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on
title to real property.
"Loan Documents" means (a) for purposes of this Agreement and the
Notes and any amendment, supplement or modification hereof or thereof and
for all other purposes other than for purposes of any Guaranty or the
Collateral Documents, (i) this Agreement, (ii) the Notes, (iii) the
Subsidiary Guaranty, (iv) the Collateral Documents, (v) each Letter of
Credit Agreement, (vi) the Parent Guaranty and (vii) the Fee Letter, and
(b) for purposes of any Guaranty and the Collateral Documents, (i) this
Agreement, (ii) the Notes, (iii) the Subsidiary Guaranty, (iv) the
Collateral Documents, (v) each Letter of Credit Agreement, (vi) the Parent
Guaranty, (vii) the Fee Letter and (ix) each Bank Hedge Agreement, in each
case as amended, supplemented or otherwise modified from time to time.
"Loan Parties" means the Borrower, the Parent and each Subsidiary
Guarantor.
"Management Agreement" has the meaning specified in Section 5.02(t).
"Margin Stock" has the meaning specified in Regulation U.
"Material Adverse Change" means any material adverse change in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower or the Borrower and its
Subsidiaries taken as a whole or the Acquired Business.
"Material Adverse Effect" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower or the Borrower and its
Subsidiaries taken as a whole or the Acquired Business, (b) the rights and
remedies of the Administrative Agent or any Lender Party under any Loan
Document or Related Document or (c) the ability of any Loan Party to
perform its Obligations under any Loan Document or Related Document to
which it is or is to be a party.
"Mortgages" has the meaning specified in Section 3.01(n)(x).
"Mortgage Policies" has the meaning specified in Section
3.01(n)(x)(A).
"Mortgaged Property" has the meaning specified in Section
3.01(n)(x).
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA
Affiliate is making or accruing an obligation to make
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contributions, or has within any of the preceding five plan years made or
accrued an obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Loan Party or any ERISA Affiliate and at least one Person other than the
Loan Parties and the ERISA Affiliates or (b) was so maintained and in
respect of which any Loan Party or any ERISA Affiliate could reasonably be
expected to have liability under Section 4064 or 4069 of ERISA in the
event such plan has been or were to be terminated.
"NationsBank" means NationsBank, N.A.
"NationsBridge" has the meaning specified in the recital of parties
to this Agreement.
"NationsCredit" has the meaning specified in the recital of parties
to this Agreement.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer
or other disposition of any asset or the sale or issuance of any Debt or
capital stock or other ownership or profit interest, any securities
convertible into or exchangeable for capital stock or other ownership or
profit interest or any warrants, rights, options or other securities to
acquire capital stock or other ownership or profit interest by any Person,
or any Extraordinary Receipt received by or paid to or for the account of
any Person, the aggregate amount of cash received from time to time
(whether as initial consideration or through payment or disposition of
deferred consideration) by or on behalf of such Person in connection with
such transaction after deducting therefrom only (without duplication) (a)
reasonable and customary brokerage commissions, underwriting fees and
discounts, legal fees, finder's fees and other similar fees and
commissions, (b) the amount of taxes payable in connection with or as a
result of such transaction and (c) the amount of any Debt secured by a
Lien on such asset that, by the terms of the agreement or instrument
governing such Debt, is required to be repaid upon such disposition, in
each case to the extent, but only to the extent, that the amounts so
deducted are, at the time of receipt of such cash, actually paid to a
Person that is not an Affiliate of such Person or any Loan Party or any
Affiliate of any Loan Party and are properly attributable to such
transaction or to the asset that is the subject thereof.
"Net Income" of any Person shall mean, for any period, the net
income (or loss) of such Person and its Subsidiaries on a Consolidated
basis for such period taken as a single accounting period; provided that
there shall be excluded the income of any Consolidated Subsidiary of such
Person to the extent that the declaration or payment of dividends or
distributions of any kind to such Person by such Consolidated Subsidiary
of such income at such time is encumbered or charged, or is not permitted,
by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to such Consolidated Subsidiary, or by any agency or
instrumentality of any government or subdivision thereof.
"Net Working Investment" means, at any date, (i) the Consolidated
Current Assets (excluding cash and Cash Equivalents) of the Borrower and
its Subsidiaries minus (ii) the sum of (x) Consolidated Current
Liabilities (excluding Debt) of the Borrower and its Subsidiaries plus (y)
the Current Liabilities of any Person (other than the Borrower and any of
its Subsidiaries) which are guaranteed by the Borrower or any such
Subsidiary, all determined as of such date.
"NMS" means NationsBanc Montgomery Securities LLC, a Delaware
limited liability company.
"Note" means a Term A Note, a Term B Note or a Revolving Credit
Note.
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"Notice of Borrowing" has the meaning specified in Section 2.02(a).
"Notice of Issuance" has the meaning specified in Section 2.03(a).
"Notice of Renewal" has the meaning specified in Section 2.01(d).
"Notice of Termination" has the meaning specified in Section
2.01(d).
"NPL" means the National Priorities List under CERCLA.
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including,
without limitation, any liability of such Person on any claim, whether or
not the right of any creditor to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
disputed, undisputed, legal, equitable, secured or unsecured, and whether
or not such claim is discharged, stayed or otherwise affected by any
proceeding referred to in Section 6.01(f). Without limiting the generality
of the foregoing, the Obligations of each Loan Party under the Loan
Documents include (a) the obligation to pay principal, interest, Letter of
Credit commissions, charges, expenses, fees, attorneys' fees and
disbursements, indemnities and other amounts payable by such Loan Party
under any Loan Document and (b) the obligation of such Loan Party to
reimburse any amount in respect of any of the foregoing that any Lender
Party, in its sole discretion, may elect to pay or advance on behalf of
such Loan Party.
"OECD" means the Organization for Economic Cooperation and
Development.
"Open Year" has the meaning specified in Section 4.01(z).
"Other Taxes" has the meaning specified in Section 2.12(b).
"Owners" means the Persons listed on Schedule II attached hereto.
"Parent" has the meaning specified in the recital of parties to this
Agreement.
"Parent Guaranty" has the meaning set forth in Section 3.01(n)(ix).
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Permitted Encumbrances" has the meaning specified in the Mortgages.
"Permitted Payments" means dividends or distributions made by the
Borrower to the Parent solely when and to the extent necessary to permit
the Parent to pay taxes on behalf of the Borrower and its Subsidiaries
pursuant to and in accordance with the Tax Agreement, if any, and only to
the extent that the aggregate amount thereof shall not exceed the amount
that the Borrower would otherwise have been required to pay if it were
paying taxes directly to the relevant tax authorities.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government
or any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
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"Pledge Agreement" has the meaning specified in Section 5.01(t)(C).
"Pledged Account" has the meaning specified in the Security
Agreement.
"Pledged Account Bank" has the meaning specified in the Security
Agreement.
"Pledged Account Letter" has the meaning specified in the Security
Agreement.
"Pledged Debt" has the meaning specified in the Security Agreement.
"Pledged Shares" has the meaning specified in the Security
Agreement.
"Polytek Agreement" means the Credit Agreement between Afa Polytek
B.V. and ABN Amro Bank N.V., a copy of which was furnished to the Lender
Parties prior to the Closing Date, and all other documents delivered in
connection therewith, as amended, supplemented or otherwise modified from
time to time in accordance with their respective terms, to the extent
permitted in accordance with the Loan Documents.
"Preferred Stock" means, with respect to any corporation, capital
stock issued by such corporation that is entitled to a preference or
priority over any other capital stock issued by such corporation upon any
distribution of such corporation's assets, whether by dividend or upon
liquidation.
"Pro Rata Share" of any amount means, with respect to any Revolving
Credit Lender at any time, the product of such amount times a fraction the
numerator of which is the amount of such Lender's Revolving Credit
Commitment at such time and the denominator of which is the Revolving
Credit Facility at such time.
"Purchase Agreement" has the meaning specified in Preliminary
Statement (1) to this Agreement.
"Receivables" has the meaning specified in the Security Agreement.
"Redeemable" means, with respect to any capital stock or other
ownership or profit interest, Debt or other right or Obligation, any such
right or Obligation that (a) the issuer has undertaken to redeem at a
fixed or determinable date or dates, whether by operation of a sinking
fund or otherwise, or upon the occurrence of a condition not solely within
the control of the issuer or (b) is redeemable at the option of the
holder.
"Refinancing" means the public offering or private placement and
sale by the Borrower of the Refinancing Securities contemplated by Section
5.01(q) or otherwise in order to repay the Bridge Advances.
"Refinancing Agreement" means the indenture or other agreement
pursuant to which the Refinancing Securities are issued, together with all
documents delivered in connection therewith, in each case as amended,
supplemented or otherwise modified from time to time, in each case as
amended, supplemented or otherwise modified from time to time in
accordance with their respective terms, to the extent permitted in
accordance with the Loan Documents.
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"Refinancing Securities" means the debt or equity securities of the
Borrower proposed to be sold in order to consummate the Refinancing.
"Register" has the meaning specified in Section 8.07(d).
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Related Documents" means (i) the Purchase Agreement (and all
schedules and exhibits thereto), any Management Agreement, any Tax
Agreement, the Polytek Agreement, the Capital Contribution Agreement, the
Supply Agreement, the First Warrant Agreement, the Second Warrant
Agreement, the Waldock Warrant Agreement, the Subordinated Notes, the
Capital Escrow Agreement and the Warrant Escrow Agreement (ii) upon the
execution and delivery thereof pursuant to Section 5.01(o), the
Refinancing Agreement and the Refinancing Securities and (iii) upon the
execution and delivery thereof pursuant to Section 5.01(t), the Consent
Letter and the Intercreditor Agreement.
"Required Lenders" means, at any time, Lenders owed or holding more
than 50% of the sum of (a) the aggregate principal amount of the Advances
outstanding at such time, (b) the aggregate Available Amount of all
Letters of Credit outstanding at such time, (c) the aggregate unused
Commitments under the Term A Facility at such time, (d) the aggregate
unused Commitments under the Term B Facility at such time and (e) the
aggregate Unused Revolving Credit Commitments at such time; provided,
however, that if any Lender shall be a Defaulting Lender at such time,
there shall be excluded from the determination of Required Lenders at such
time (A) the aggregate principal amount of the Advances owing to such
Lender (in its capacity as a Lender) and outstanding at such time, (B)
such Lender's Pro Rata Share of the aggregate Available Amount of all
Letters of Credit outstanding at such time, (C) the aggregate unused Term
A Commitment of such Lender at such time, (D) the aggregate unused Term B
Commitment of such Lender at such time and (E) the Unused Revolving Credit
Commitment of such Lender at such time. For purposes of this definition,
the aggregate principal amount of Letter of Credit Advances owing to the
Issuing Bank and the Available Amount of each Letter of Credit shall be
considered to be owed to the Revolving Credit Lenders ratably in
accordance with their respective Revolving Credit Commitments.
"Requirements of Law" means, with respect to any Person, all laws,
constitutions, statutes, treaties, ordinances, rules and regulations, all
orders, writs, decrees, injunctions, judgments, determinations or awards
of an arbitrator, a court or any other governmental authority, and all
governmental authorizations, binding upon or applicable to such Person or
to any of its properties, assets or businesses.
"Responsible Officer" means, with respect to the Borrower, any
senior officer thereof and, with respect to any other Loan Party, the
President thereof.
"Revolving Credit Advance" has the meaning specified in Section
2.01(c).
"Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by the
Revolving Credit Lenders.
"Revolving Credit Commitment" means, with respect to any Revolving
Credit Lender at any time, the amount set forth opposite such Lender's
name on Schedule I hereto under the caption Revolving Credit Commitment"
or, if such Lender has entered into one or more Assignments and
Acceptances, set
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forth for such Lender in the Register maintained by the Administrative
Agent pursuant to Section 8.07(d) as such Lender's "Revolving Credit
Commitment", as such amount may be reduced at or prior to such time
pursuant to Section 2.05.
"Revolving Credit Facility" means, at any time, the aggregate amount
of the Revolving Credit Lenders' Revolving Credit Commitments at such
time.
"Revolving Credit Lender" means any Lender that has a Revolving
Credit Commitment.
"Revolving Credit Note" means a promissory note of the Borrower
payable to the order of any Revolving Credit Lender, in substantially the
form of Exhibit A-3 hereto, evidencing the aggregate indebtedness of the
Borrower to such Lender resulting from the Revolving Credit Advances made
by such Lender, as amended, supplemented or otherwise modified from time
to time.
"Second Warrant Agreement" has the meaning specified in Section
3.01(k).
"Secured Obligations" has the meaning specified in the Security
Agreement.
"Secured Parties" means the Administrative Agent, the Collateral
Agent, the Hedge Banks and the Lender Parties.
"Security Agreement" has the meaning specified in Section
3.01(n)(vii).
"Seller" has the meaning specified in Preliminary Statement (1) to
this Agreement.
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Loan Party or any ERISA Affiliate and no Person other than the Loan
Parties and the ERISA Affiliates or (b) was so maintained and in respect
of which any Loan Party or any ERISA Affiliate could reasonably be
expected to have liability under Section 4069 of ERISA in the event such
plan has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the
present fair salable value of the assets of such Person is not less than
the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (c) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay such debts and liabilities
as they mature and (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for
which such Person's property would constitute an unreasonably small
capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Subordinated Debt" means any debt of the Borrower that is
subordinated to the Obligations of the Borrower under the Loan Documents
and that otherwise contains terms and conditions satisfactory to the
Required lenders.
"Subordinated Notes" means the subordinated promissory notes dated
February 4, 1998 made by the Parent to Afa International Limited in the
principal amount of $1,000,000 and to Waldock Limited in
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the principal amount of $2,000,000, as such notes may be amended,
supplemented or otherwise modified from time to time in accordance with
their terms, to the extent permitted in accordance with the Loan
Documents.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having
ordinary voting power to elect a majority of the Board of Directors of
such corporation (irrespective of whether at the time capital stock of any
other class or classes of such corporation shall or might have voting
power upon the occurrence of any contingency), (b) the interest in the
capital or profits of such partnership, joint venture or limited liability
company or (c) the beneficial interest in such trust or estate is at the
time directly or indirectly owned or controlled by such Person, by such
Person and one or more of its other Subsidiaries or by one or more of such
Person's other Subsidiaries.
"Subsidiary Guarantors" means all existing and hereafter acquired
direct or indirect domestic Subsidiaries of the Borrower.
"Subsidiary Guaranty" has the meaning set forth in Section
3.01(n)(viii).
"Supply Agreement" means the Supply Agreement dated as of February
4, 1998, between Continental Sprayers International, Inc. and the Seller,
as amended, supplemented or otherwise modified from time to time in
accordance with its terms, to the extent permitted in accordance with the
Loan Documents.
"Surveyed Property" has the meaning specified in Section
3.01(n)(x)(B).
"Surviving Debt" has the meaning specified in Section 3.01(e).
"Tax Agreement" has the meaning specified in Section 5.03(s).
"Tax Certificate" has the meaning specified in Section 5.03(o).
"Taxes" has the meaning specified in Section 2.12(a).
"Term A Advance" has the meaning specified in Section 2.01(a).
"Term A Borrowing" means a borrowing consisting of simultaneous Term
A Advances of the same Type made by the Term A Lenders.
"Term A Commitment" means, with respect to any Term A Lender at any
time, the amount set forth opposite such Lender's name on Schedule I
hereto under the caption "Term A Commitment" or, if such Lender has
entered into one or more Assignments and Acceptances, set forth for such
Lender in the Register maintained by the Administrative Agent pursuant to
Section 8.07(d) as such Lender's "Term A Commitment", as such amount may
be reduced at or prior to such time pursuant to Section 2.05.
"Term A Facility" means, at any time, the aggregate amount of the
Term A Lenders' Term A Commitments at such time.
"Term A Lender" means any Lender that has a Term A Commitment.
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"Term A Note" means a promissory note of the Borrower payable to the
order of any Term A Lender, in substantially the form of Exhibit A-1
hereto, evidencing the indebtedness of the Borrower to such Lender
resulting from the Term A Advances made by such Lender, as amended,
supplemented or otherwise modified from time to time.
"Term B Advance" has the meaning specified in Section 2.01(b).
"Term B Borrowing" means a borrowing consisting of simultaneous Term
B Advances of the same Type made by the Term B Lenders.
"Term B Commitment" means, with respect to any Term B Lender at any
time, the amount set forth opposite such Lender's name on Schedule I
hereto under the caption "Term B Commitment" or, if such Lender has
entered into one or more Assignments and Acceptances, set forth for such
Lender in the Register maintained by the Administrative Agent pursuant to
Section 8.07(d) as such Lender's "Term B Commitment", as such amount may
be reduced at or prior to such time pursuant to Section 2.05.
"Term B Facility" means, at any time, the aggregate amount of the
Term B Lenders' Term B Commitments at such time.
"Term B Lender" means any Lender that has a Term B Commitment.
"Term B Note" means a promissory note of the Borrower payable to the
order of any Term B Lender, in substantially the form of Exhibit A-2
hereto, evidencing the indebtedness of the Borrower to such Lender
resulting from the Term B Advances made by such Lender, as amended,
supplemented or otherwise modified from time to time.
"Termination Date" means the earlier of (a) the date of termination
in whole of the Term A Commitments, the Term B Commitments, the Revolving
Credit Commitments and the Letter of Credit Commitments pursuant to
Section 2.05 or 6.01 and (b) (i) for purposes of the Revolving Credit
Facility and the Letter of Credit Facility, February 4, 2003, (ii) for
purposes of the Term A Facility, December 31, 2003 or, if the High Yield
Date shall have occurred, February 4, 2003 and (iii) for purposes of the
Term B Facility and for all other purposes, February 4, 2005.
"Total Debt Service" means, for any period, the sum of (a) Interest
Expense for such period and (b) the aggregate amount of mandatory
principal payments scheduled to be paid by the Borrower pursuant to
Section 2.04 during such period and all other scheduled principal payments
on all other Debt, including the portion of any payments under Capitalized
Leases that is allocable to principal, paid by the Borrower during such
period.
"Type" refers to the distinction between Advances bearing interest
at the Alternate Base Rate and Advances bearing interest at the Eurodollar
Rate.
"Unused Revolving Credit Commitment" means, with respect to any
Revolving Credit Lender at any time, (a) such Lender's Revolving Credit
Commitment at such time minus (b) the sum of (i) the aggregate principal
amount of all Revolving Credit Advances and Letter of Credit Advances made
by such Lender (in its capacity as a Lender) and outstanding at such time,
plus (ii) such Lender's Pro Rata Share of (A) the aggregate Available
Amount of all Letters of Credit outstanding at such time and (B) the
aggregate principal amount of all Letter of Credit Advances made by the
Issuing Bank pursuant to Section 2.03(c) and outstanding at such time.
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"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the happening
of such a contingency.
"Waldock Warrant Agreement" has the meaning specified in Section
3.01(k).
"Warrant Escrow Agreement" has the meaning specified in Section
3.01(n)(xix).
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
ERISA, that is maintained for employees of any Loan Party or in respect of
which any Loan Party could reasonably be expected to have liability.
"Withdrawal Liability" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
"WTI, Inc." means WTI, Inc., a Delaware corporation.
SECTION 1.02. 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".
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(f) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances and the Letters of Credit. (a) The Term A
Advances. Each Term A Lender severally agrees, on the terms and conditions
hereinafter set forth, to make a single advance (a "Term A Advance") to the
Borrower on the Closing Date in an amount not to exceed such Lender's Term A
Commitment at such time. The Term A Borrowing shall consist of Term A Advances
made simultaneously by the Term A Lenders ratably according to their Term A
Commitments. Amounts borrowed under this Section 2.01(a) and repaid or prepaid
may not be reborrowed.
(b) The Term B Advances. Each Term B Lender severally agrees, on the
terms and conditions hereinafter set forth, to make a single advance (a "Term B
Advance") to the Borrower on the Closing Date in an amount not to exceed such
Lender's Term B Commitment at such time. The Term B Borrowing shall consist of
Term B Advances made simultaneously by the Term B Lenders ratably according to
their Term B Commitments. Amounts borrowed under this Section 2.01(b) and repaid
or prepaid may not be reborrowed.
(c) The Revolving Credit Advances. Each Revolving Credit Lender
severally agrees, on the terms and conditions hereinafter set forth, to make
advances (each a "Revolving Credit Advance") to the Borrower from time to time
on any Business Day during the period from the date hereof until the applicable
Termination Date in an amount for each such Advance not to exceed such Lender's
Unused Revolving Credit Commitment at such time. Each Revolving Credit Borrowing
shall be in an aggregate amount of $100,000 or an
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integral multiple of $100,000 in excess thereof (other than a Borrowing the
proceeds of which shall be used solely to repay or prepay in full outstanding
Letter of Credit Advances) and shall consist of Revolving Credit Advances made
simultaneously by the Revolving Credit Lenders ratably according to their
Revolving Credit Commitments. Within the limits of each Revolving Credit
Lender's Unused Revolving Credit Commitment in effect from time to time, the
Borrower may borrow under this Section 2.01(c), prepay pursuant to Section 2.06
and reborrow under this Section 2.01(c).
(d) Letters of Credit. The Issuing Bank agrees, on the terms and
conditions hereinafter set forth, to issue standby letters of credit (the
"Letters of Credit") for the account of the Borrower from time to time on any
Business Day during the period from the date hereof until 60 days before the
applicable Termination Date (i) in an aggregate Available Amount for all Letters
of Credit issued by the Issuing Bank not to exceed at any time the Issuing
Bank's Letter of Credit Commitment at such time and (ii) in an Available Amount
for each such Letter of Credit not to exceed the lesser of (x) the Letter of
Credit Facility at such time and (y) the Unused Revolving Credit Commitments of
the Revolving Credit Lenders at such time. No Letter of Credit shall have an
expiration date (including all rights of the Borrower or the beneficiary to
require renewal) later than the earlier of 60 days before the applicable
Termination Date and one year after the date of issuance thereof, but may by its
terms be renewable annually upon notice (a "Notice of Renewal") given to the
Issuing Bank and the Administrative Agent on or prior to any date for notice of
renewal set forth in such Letter of Credit but in any event at least three
Business Days prior to the date of the proposed renewal of such Letter of Credit
and upon fulfillment of the applicable conditions set forth in Article III
unless the Issuing Bank has notified the Borrower (with a copy to the
Administrative Agent) on or prior to the date for notice of termination set
forth in such Letter of Credit but in any event at least 30 Business Days prior
to the date of automatic renewal of its election not to renew such Letter of
Credit (a "Notice of Termination"); provided that the terms of each Letter of
Credit that is automatically renewable annually shall (x) require the Issuing
Bank to give the beneficiary named in such Letter of Credit notice of any Notice
of Termination, (y) permit such beneficiary, upon receipt of such notice, to
draw under such Letter of Credit prior to the date such Letter of Credit
otherwise would have been automatically renewed and (z) not permit the
expiration date (after giving effect to any renewal) of such Letter of Credit in
any event to be extended to a date later than 60 days before the applicable
Termination Date. If either a Notice of Renewal is not given by the Borrower or
a Notice of Termination is given by the Issuing Bank pursuant to the immediately
preceding sentence, such Letter of Credit shall expire on the date on which it
otherwise would have been automatically renewed; provided, however, that even in
the absence of receipt of a Notice of Renewal the Issuing Bank may in its
discretion, unless instructed to the contrary by the Administrative Agent or the
Borrower, deem that a Notice of Renewal had been timely delivered and in such
case, a Notice of Renewal shall be deemed to have been so delivered for all
purposes under this Agreement. Within the limits of the Letter of Credit
Facility, and subject to the limits referred to above, the Borrower may request
the issuance of Letters of Credit under this Section 2.01(d), repay any Letter
of Credit Advances resulting from drawings thereunder pursuant to Section
2.03(c) and request the issuance of additional Letters of Credit under this
Section 2.01(d).
SECTION 2.02. Making the Advances. (a) Except as otherwise provided
in Section 2.02(b) or 2.03, each Borrowing shall be made on notice, given not
later than 11:00 A.M. (Charlotte, North Carolina time) on, at any time prior to
the Bridge Repayment Date, the third Business Day prior to the date of the
proposed Borrowing and thereafter on the date of the proposed Borrowing in the
case of a Borrowing consisting of Eurodollar Rate Advances, or the first
Business Day prior to the date of the proposed Borrowing in the case of a
Borrowing consisting of Alternate Base Rate Advances, by the Borrower to the
Administrative Agent, which shall give to each Appropriate Lender prompt notice
thereof by telex or telecopier. Each such notice of a Borrowing (a "Notice of
Borrowing") shall be by telephone, confirmed immediately in writing, or telex or
telecopier, in substantially the form of Exhibit B hereto, specifying therein
the requested (i) date of such Borrowing, (ii) Facility under which such
Borrowing is to be made, (iii) Type of Advances comprising such Borrowing, (iv)
aggregate amount of such Borrowing and (v) in the case of a Borrowing consisting
of Eurodollar Rate Advances, initial
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Interest Period for each such Advance. Each Appropriate Lender shall, before
1:00 P.M. (Charlotte, North Carolina time) on the date of such Borrowing, make
available for the account of its Applicable Lending Office to the Administrative
Agent at the Administrative Agent's Account, in same day funds, such Lender's
ratable portion of such Borrowing in accordance with the respective Commitments
under the applicable Facility of such Lender and the other Appropriate Lenders.
After the Administrative Agent's receipt of such funds and upon fulfillment of
the applicable conditions set forth in Article III, the Administrative Agent
will make such funds available to the Borrower by crediting the Borrower's
Account; provided, however, that, in the case of any Revolving Credit Borrowing,
the Administrative Agent shall first make a portion of such funds equal to the
aggregate principal amount of any Letter of Credit Advances made by the Issuing
Bank and by any other Revolving Credit Lender and outstanding on the date of
such Revolving Credit Borrowing, plus interest accrued and unpaid thereon to and
as of such date, available to the Issuing Bank and such other Revolving Credit
Lenders for repayment of such Letter of Credit Advances.
(b) Unless and until the Bridge Repayment Date shall have occurred,
anything in subsection (a) above to the contrary notwithstanding, (i) the
Borrower may not select Eurodollar Rate Advances under the Term A Facility and
the Term B Facility for the initial Borrowing hereunder or if the obligation of
the Appropriate Lenders to make Eurodollar Rate Advances shall then be suspended
pursuant to Section 2.09 or Section 2.10 and (ii) the Term B Advances may not be
outstanding as part of more than one separate Borrowing, respectively, and each
of the Term A Advances and the Revolving Credit Advances may not be outstanding
as part of more than five separate Borrowings, respectively.
(c) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. In the case of any Borrowing that the related Notice of Borrowing
specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall
indemnify each Appropriate Lender against any loss, cost or expense incurred by
such Lender as a result of any failure to fulfill on or before the date
specified in such Notice of Borrowing for such Borrowing the applicable
conditions set forth in Article III, including, without limitation, any loss
(including loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund the Advance to be made by such Lender as part of such Borrowing
when such Advance, as a result of such failure, is not made on such date.
(d) Unless the Administrative Agent shall have received notice from
an Appropriate Lender prior to the date of any Borrowing under a Facility under
which such Lender has a Commitment that such Lender will not make available to
the Administrative Agent such Lender's ratable portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
subsection (a) or (b) of this Section 2.02 and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such ratable portion available to the Administrative Agent, such Lender and
the Borrower severally agree to repay or pay to the Administrative Agent
forthwith on demand such corresponding amount and to pay interest thereon, for
each day from the date such amount is made available to the Borrower until the
date such amount is repaid or paid to the Administrative Agent, at (i) in the
case of the Borrower, the interest rate applicable at such time under Section
2.07 to Advances comprising such Borrowing and (ii) in the case of such Lender,
the Federal Funds Rate. If such Lender shall pay to the Administrative Agent
such corresponding amount, such amount so paid shall constitute such Lender's
Advance as part of such Borrowing for all purposes.
(e) The failure of any Lender to make the Advance to be made by it
as part of any Borrowing shall not relieve any other Lender of its obligation,
if any, hereunder to make its Advance on the date of such Borrowing, but no
Lender shall be responsible for the failure of any other Lender to make the
Advance to be made by such other Lender on the date of any Borrowing.
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SECTION 2.03. Issuance of and Drawings and Reimbursement Under
Letters of Credit. (a) Request for Issuance. Each Letter of Credit shall be
issued upon notice, given not later than 11:00 A.M. (Charlotte, North Carolina
time) on the second Business Day prior to the date of the proposed issuance of
such Letter of Credit, by the Borrower to the Issuing Bank, which shall give to
the Administrative Agent and each Revolving Credit Lender prompt notice thereof
by telex or telecopier. Each such notice of issuance of a Letter of Credit (a
"Notice of Issuance") shall be by telephone, confirmed immediately in writing,
or telex or telecopier, specifying therein the requested (A) date of such
issuance (which shall be a Business Day), (B) Available Amount of such Letter of
Credit, (C) expiration date of such Letter of Credit, (D) name and address of
the beneficiary of such Letter of Credit and (E) form of such Letter of Credit,
and shall be accompanied by such application and agreement for letters of credit
as the Issuing Bank may specify to the Borrower for use in connection with such
requested Letter of Credit (a "Letter of Credit Agreement"). If (x) the
requested form of such Letter of Credit is acceptable to the Issuing Bank in its
sole discretion and (y) it has not received notice of objection to such issuance
from Lenders holding more than 50% of the Revolving Credit Commitments, the
Issuing Bank will, upon fulfillment of the applicable conditions set forth in
Article III, make such Letter of Credit available to the Borrower at its office
referred to in Section 8.02 or as otherwise agreed with the Borrower in
connection with such issuance. In the event and to the extent that the
provisions of any Letter of Credit Agreement shall conflict with this Agreement,
the provisions of this Agreement shall govern.
(b) Letter of Credit Reports. The Issuing Bank shall furnish (A) to
the Administrative Agent on the first Business Day of each week a written report
summarizing issuance and expiration dates of Letters of Credit issued by such
Issuing Bank during the previous week and drawings during such week under all
Letters of Credit issued by such Issuing Bank, (B) to each Revolving Credit
Lender on the first Business Day of each month a written report summarizing
issuance and expiration dates of Letters of Credit issued by such Issuing Bank
during the preceding month and drawings during such month under all Letters of
Credit issued by such Issuing Bank and (C) to the Administrative Agent and each
Revolving Credit Lender on the first Business Day of each calendar quarter a
written report setting forth the average daily aggregate Available Amount during
the preceding calendar quarter of all Letters of Credit issued by such Issuing
Bank.
(c) Drawing and Reimbursement. The payment by the Issuing Bank of a
draft drawn under any Letter of Credit shall constitute for all purposes of this
Agreement the making by the Issuing Bank of a Letter of Credit Advance, which
shall be an Alternate Base Rate Advance, in the amount of such draft. Upon
written demand by the Issuing Bank with an outstanding Letter of Credit Advance,
with a copy of such demand to the Administrative Agent, each Revolving Credit
Lender shall purchase from the Issuing Bank, and the Issuing Bank shall sell and
assign to each such Revolving Credit Lender, such Lender's Pro Rata Share of
such outstanding Letter of Credit Advance as of the date of such purchase, by
making available for the account of its Applicable Lending Office to the
Administrative Agent for the account of the Issuing Bank, by deposit to the
Administrative Agent's Account, in same day funds, an amount equal to the
portion of the outstanding principal amount of such Letter of Credit Advance to
be purchased by such Lender. Promptly after receipt thereof, the Administrative
Agent shall transfer such funds to the Issuing Bank. The Borrower hereby agrees
to each such sale and assignment. Each Revolving Credit Lender agrees to
purchase its Pro Rata Share of an outstanding Letter of Credit Advance on (i)
the Business Day on which demand therefor is made by the Issuing Bank provided
notice of such demand is given not later than 10:00 A.M. (Charlotte, North
Carolina time) on such Business Day or (ii) the first Business Day next
succeeding such demand if notice of such demand is given after such time. Upon
any such assignment by the Issuing Bank to any other Revolving Credit Lender of
a portion of a Letter of Credit Advance, the Issuing Bank represents and
warrants to such other Lender that the Issuing Bank is the legal and beneficial
owner of such interest being assigned by it, free and clear of any liens, but
makes no other representation or warranty and assumes no responsibility with
respect to such Letter of Credit Advance, the Loan Documents or any Loan Party.
If and to the extent that any Revolving Credit Lender shall not have so made the
amount of such Letter of Credit Advance available to the Administrative Agent,
such Revolving Credit Lender agrees to pay to
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the Administrative Agent forthwith on demand such amount together with interest
thereon, for each day from the date of demand by the Issuing Bank until the date
such amount is paid to the Administrative Agent, at the Federal Funds Rate for
its account or the account of the Issuing Bank, as applicable. If such Lender
shall pay to the Administrative Agent such amount for the account of the Issuing
Bank on any Business Day, such amount so paid in respect of principal shall
constitute a Letter of Credit Advance made by such Lender on such Business Day
for purposes of this Agreement, and the outstanding principal amount of the
Letter of Credit Advance made by the Issuing Bank shall be reduced by such
amount on such Business Day.
(d) Failure to Make Letter of Credit Advances. The failure of any
Lender to make the Letter of Credit Advance to be made by it on the date
specified in Section 2.03(c) shall not relieve any other Lender of its
obligation hereunder to make its Letter of Credit Advance on such date, but no
Lender shall be responsible for the failure of any other Lender to make the
Letter of Credit Advance to be made by such other Lender on such date.
SECTION 2.04. Repayment of Advances . (a) Term A Advances and Term B
Advances. The Borrower shall repay to the Administrative Agent for the ratable
account of the Term A Lenders and the Term B Lenders, as the case may be, the
aggregate outstanding principal amount of the Term A Advances and the Term B
Advances, respectively, (i) prior to the High Yield Date, on the following dates
in the amounts indicated (which amounts shall be reduced as a result of the
application of prepayments in accordance with the order of priority set forth in
Section 2.06):
Amount for Term A Amount for Term B
Date Advances Advances
- ---- -------- --------
June 30, 1998 $500,000 $125,000
September 30, 1998 $500,000 $125,000
December 31, 1998 $500,000 $125,000
March 31, 1999 $500,000 $125,000
June 30, 1999 $1,250,000 $125,000
September 30, 1999 $1,250,000 $125,000
December 31, 1999 $1,250,000 $125,000
March 31, 2000 $1,250,000 $125,000
June 30, 2000 $2,000,000 $125,000
September 30, 2000 $2,000,000 $125,000
December 31, 2000 $2,000,000 $125,000
March 31, 2001 $2,000,000 $125,000
June 30, 2001 $3,750,000 $125,000
September 30, 2001 $3,750,000 $125,000
December 31, 2001 $3,750,000 $125,000
March 31, 2002 $3,750,000 $125,000
June 30, 2002 $3,750,000 $125,000
September 30, 2002 $3,750,000 $125,000
December 31, 2002 $3,750,000 $125,000
March 31, 2003 $3,750,000 $125,000
June 30, 2003 $8,250,000 $125,000
September 30, 2003 $8,250,000 $125,000
December 31, 2003 $8,500,000 $125,000
March 31, 2004 $125,000
June 30, 2004 $125,000
September 30, 2004 $125,000
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Amount for Term A Amount for Term B
Date Advances Advances
- ---- -------- --------
December 31, 2004 $125,000
February 4, 2005 $61,625,000
and (ii) on and after the High Yield Date, on the following dates in the amounts
indicated (which amounts shall be reduced as a result of the application of
prepayments in accordance with the order of priority set forth in Section 2.06):
June 30, 1998 $500,000
September 30, 1998 $500,000
December 31, 1998 $500,000
March 31, 1999 $500,000
June 30, 1999 $750,000
September 30, 1999 $750,000
December 31, 1999 $750,000
March 31, 2000 $750,000
June 30, 2000 $1,000,000
September 30, 2000 $1,000,000
December 31, 2000 $1,000,000
March 31, 2001 $1,000,000
June 30, 2001 $1,250,000
September 30, 2001 $1,250,000
December 31, 2001 $1,250,000
March 31, 2002 $1,250,000
June 30, 2002 $1,500,000
September 30, 2002 $1,500,000
December 31, 2002 $1,500,000
February 4, 2003 $1,500,000
provided, however, that in the case of each of clauses (i) and (ii) above, the
final principal installments shall be repaid on the applicable Termination Date
and in any event shall be in an amount equal to the aggregate principal amount
of the Term A Advances or the Term B Advances, as the case may be, outstanding
on such date.
(b) Revolving Credit Advances. The Borrower shall repay to the
Administrative Agent for the ratable account of the Revolving Credit Lenders on
the applicable Termination Date the aggregate outstanding principal amount of
the Revolving Credit Advances then outstanding.
(c) Letter of Credit Advances. (i) The Borrower shall repay to the
Administrative Agent for the account of the Issuing Bank and each other
Revolving Credit Lender that has made a Letter of Credit Advance on the earlier
of demand and the applicable Termination Date the outstanding principal amount
of each Letter of Credit Advance made by each of them.
(ii) The Obligations of the Borrower under this Agreement, any
Letter of Credit Agreement and any other agreement or instrument relating to any
Letter of Credit shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement, such Letter of Credit
Agreement and such other agreement or instrument under all circumstances,
including, without limitation, the following circumstances (it being understood
that any such payment by the Borrower is without prejudice to, and does not
constitute a
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waiver of, any rights the Borrower might have or might acquire as a result of
the payment by the Issuing Bank of any draft or the reimbursement by the
Borrower thereof):
(A) any lack of validity or enforceability of any Loan Document, any
Letter of Credit Agreement, any Letter of Credit or any other agreement or
instrument relating thereto (all of the foregoing being, collectively, the
"L/C Related Documents");
(B) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of the Borrower in respect of
any L/C Related Document or any other amendment or waiver of or any
consent to departure from all or any of the L/C Related Documents;
(C) the existence of any claim, set-off, defense or other right that
the Borrower may have at any time against any beneficiary or any
transferee of a Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank or any
other Person, whether in connection with the transactions contemplated by
the L/C Related Documents or any unrelated transaction;
(D) any statement or any other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any
respect;
(E) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or certificate that does not strictly comply with
the terms of such Letter of Credit;
(F) any exchange, release or non-perfection of any Collateral or
other collateral, or any release or amendment or waiver of or consent to
departure from any Guaranty or any other guarantee, for all or any of the
Obligations of the Borrower in respect of the L/C Related Documents; or
(G) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including, without limitation, any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrower or a guarantor.
SECTION 2.05. Termination or Reduction of the Commitments. (a)
Optional. The Borrower may, upon at least five Business Days' notice to the
Administrative Agent, terminate in whole or reduce in part the unused portions
of the Term A Commitments, the Term B Commitments and the Letter of Credit
Facility and the Unused Revolving Credit Commitments; provided, however, that
each partial reduction of a Facility (i) shall be in an aggregate amount of
$1,000,000 or an integral multiple of $1,000,000 in excess thereof and (ii)
shall be made ratably among the Appropriate Lenders in accordance with their
Commitments with respect to such Facility.
(b) Mandatory. (i) On the date of the Term A Borrowing, after giving
effect to such Term A Borrowing, and from time to time thereafter upon each
repayment or prepayment of the Term A Advances, the aggregate Term A Commitments
of the Term A Lenders shall be automatically and permanently reduced, on a pro
rata basis, by an amount equal to the amount by which the aggregate Term A
Commitments immediately prior to such reduction exceed the aggregate unpaid
principal amount of the Term A Advances then outstanding.
(ii) On the date of the Term B Borrowing, after giving effect to
such Term B Borrowing, and from time to time thereafter upon each repayment or
prepayment of the Term B Advances, the aggregate Term B Commitments of the Term
B Lenders shall be automatically and permanently reduced, on a pro rata
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basis, by an amount equal to the amount by which the aggregate Term B
Commitments immediately prior to such reduction exceed the aggregate unpaid
principal amount of the Term B Advances then outstanding.
(iii) The Commitments of the Revolving Credit Lenders shall be
terminated in whole on the applicable Termination Date.
(iv) The Letter of Credit Facility shall be permanently reduced from
time to time on the date of each reduction in the Revolving Credit Facility by
the amount, if any, by which the amount of the Letter of Credit Facility exceeds
the Revolving Credit Facility after giving effect to such reduction of the
Revolving Credit Facility.
SECTION 2.06. Prepayments. (a) Optional. The Borrower may, upon at
least five Business Days' notice to the Administrative Agent stating the
proposed date and aggregate principal amount of the prepayment, and if such
notice is given the Borrower shall, prepay the outstanding aggregate principal
amount of the Advances comprising part of the same Borrowing in whole or ratably
in part, together with (i) accrued interest to the date of such prepayment on
the aggregate principal amount prepaid; provided, however, that (x) each partial
prepayment shall be in an aggregate principal amount of $1,000,000 or an
integral multiple of $1,000,000 in excess thereof and (y) if any prepayment of a
Eurodollar Rate Advance is made on a date other than the last day of an Interest
Period for such Advance the Borrower shall also pay any amounts owing pursuant
to Section 8.04(c). Each such prepayment (other than prepayments of the
Revolving Credit Facility) shall be applied ratably first to the Term B Facility
and to the installments thereof in inverse order of maturity and second to the
Term A Facility and to the installments thereof in inverse order of maturity.
(b) Mandatory. (i) (A) The Borrower shall, on the 45th day following
the end of each fiscal quarter of the Borrower ending prior to the High Yield
Date, prepay an aggregate principal amount of the Advances comprising part of
the same Borrowings equal to seventy-five per cent (75%) of the amount of Excess
Cash Flow for such fiscal quarter and (B) the Borrower shall, on the 90th day
following the end of each Fiscal Year ending on or after the High Yield Date,
prepay an aggregate principal amount of the Advances comprising part of the same
Borrowings equal to fifty percent (50%) of the amount of Excess Cash Flow for
such Fiscal Year, provided, however, that in no event shall the Borrower be
required, under this clause (B), to prepay the Term A Advances to the extent
that after giving effect to such prepayment, the amount of the Term A Advances
then outstanding shall be less than $10,000,000. Each such prepayment shall be
applied ratably first to the Term B Facility and to the installments thereof in
inverse order of maturity, second to the Term A Facility and to the installments
thereof in inverse order of maturity and third to the Revolving Credit Facility
as set forth in clause (v) below.
(ii) The Borrower shall, on the date of receipt of the Net Cash
Proceeds by any Loan Party or any of its Subsidiaries (or, in the case of clause
(A) below, such later date as may be specified in Section 5.02(e), and in the
case of clause (D) below, such later date as may be specified in the Capital
Escrow Agreement) from (A) the sale, lease, transfer or other disposition of any
assets of the Borrower or any of its Subsidiaries (other than any sale, lease,
transfer or other disposition of assets pursuant to clause (i), (ii), (iv) or
(v) of Section 5.02(e)), (B) the incurrence or issuance by any Loan Party or any
of its Subsidiaries of any Debt, including, without limitation, the Refinancing
Securities (other than Debt incurred or issued pursuant to Section
5.02(b)(i)(B), (ii) or (iii)), (C) the sale or issuance by any Loan Party or any
of its Subsidiaries of any capital stock or other ownership or profit interest
(other than in respect of stock options or warrants currently outstanding or
hereafter issued pursuant to any stock option plan or other compensation
arrangement approved by the Borrower's Board of Directors and other than
contributions to capital of any Loan Party), any securities convertible into or
exchangeable for capital stock or other ownership or profit interest or any
warrants, rights or options to acquire capital stock or other ownership or
profit interest, (D) any contribution to the capital of any
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Loan Party, subject, with respect to any such contributions pursuant to the
Capital Contribution Agreement, to the terms and conditions thereof and of the
Capital Escrow Agreement, and (E) any Extraordinary Receipt received by or paid
to or for the account of any Loan Party or any of its Subsidiaries and not
otherwise included in clause (A), (B), (C) or (D) above, prepay an aggregate
principal amount of the Advances comprising part of the same Borrowings equal to
the amount of such Net Cash Proceeds, provided, however, that in the case of
prepayments from the incurrence or issuance of Debt pursuant to clause (B) above
after the Bridge Repayment Date, no such Debt may be incurred or issued unless
the Net Cash Proceeds thereof shall be sufficient to, and shall be applied to,
prepay in full all Advances then outstanding hereunder and all other amounts
payable under the Loan Documents, and deposit in the L/C Cash Collateral Account
an amount equal to 105% of the Available Amount of the Letters of Credit then
outstanding. Upon the drawing of any Letter of Credit for which funds are on
deposit in the L/C Cash Collateral Account, such funds shall be applied to
reimburse the Issuing Bank or the Revolving Credit Lenders, as applicable. Each
such prepayment pursuant to clause (A) or (E) above shall be applied ratably
first to the Term A Facility and the Term B Facility on a pro rata basis and to
the installments of each such Facility in inverse order of maturity and second
to the Revolving Credit Facility as set forth in clause (v) below, and all other
prepayments pursuant to this Section 2.06(b)(ii) shall be applied ratably first
to the Term B Facility and to the installments thereof in inverse order of
maturity, second to the Term A Facility and to the installments thereof in
inverse order of maturity and third to the Revolving Credit Facility as set
forth in clause (v) below.
(iii) The Borrower shall, on each Business Day, prepay an aggregate
principal amount of the Revolving Credit Advances comprising part of the same
Borrowings and the Letter of Credit Advances equal to the amount by which (A)
the sum of the aggregate principal amount of (x) the Revolving Credit Advances
and (y) the Letter of Credit Advances then outstanding plus the aggregate
Available Amount of all Letters of Credit then outstanding exceeds (B) the
lesser of the Revolving Credit Facility and the Borrowing Base on such Business
Day.
(iv) The Borrower shall, on each Business Day, pay to the
Administrative Agent for deposit in the L/C Cash Collateral Account an amount
sufficient to cause the aggregate amount on deposit in such Account to equal the
amount by which the aggregate Available Amount of all Letters of Credit then
outstanding exceeds the Letter of Credit Facility on such Business Day.
(v) Prepayments of the Revolving Credit Facility made pursuant to
clause (i), (ii) or (iii) above shall be first applied to prepay Revolving
Credit Advances then outstanding comprising part of the same Borrowings until
such Advances are paid in full, and second applied to prepay Letter of Credit
Advances then outstanding until such Advances are paid in full.
(vi) All prepayments under this subsection (b) shall be made
together with accrued interest but without premium to the date of such
prepayment on the principal amount prepaid.
SECTION 2.07. Interest. (a) Scheduled Interest. The Borrower shall
pay interest on the unpaid principal amount of each Advance owing to each Lender
from the date of such Advance until such principal amount shall be paid in full,
at the following rates per annum:
(i) Alternate Base Rate Advances. During such periods as such
Advance is an Alternate Base Rate Advance, a rate per annum equal at all
times to the sum of (A) the Alternate Base Rate in effect from time to
time plus (B) the Applicable Margin in effect from time to time, payable
in arrears quarterly on the last day of each fiscal quarter during such
periods and on the date such Alternate Base Rate Advance shall be
Converted or paid in full;
(ii) Eurodollar Rate Advances. Prior to the Bridge Repayment Date,
during such periods as such Advance is a Eurodollar Rate Advance, a rate
per annum equal at all times during each Interest
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Period for such Advance to the sum of (A) the Eurodollar Rate for such
Interest Period for such Advance plus (B) the Applicable Margin in effect
from time to time, payable in arrears on the last day of such Interest
Period and, if such Interest Period has a duration of more than three
months, on each day that occurs during such Interest Period every three
months from the first day of such Interest Period and on the date such
Eurodollar Rate Advance shall be Converted or paid in full and on and
after the Bridge Repayment Date, during such periods as such Advance is a
Eurodollar Rate Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the sum of (A) the Eurodollar Rate for
such Interest Period for such Advance plus (B) the Applicable Margin in
effect from time to time, payable in arrears monthly on the last day of
each month during such period and on the date such Eurodollar Rate Advance
shall be Converted or paid in full;
provided, however, that if the rate of interest payable on any Bridge Advance
shall exceed 14.0%, the Borrower may elect, so long as no Default has occurred
and is continuing, not to pay such excess interest in cash, but instead to
capitalize such excess interest, which shall thereafter be deemed to be
additional principal owing hereunder and under the respective Note and which
shall bear interest at the same rate, and be payable at the same times, as such
Bridge Advance; provided, further, that, except as provided in Section 2.07(b),
in no event shall the rate of interest payable on any Bridge Advance exceed
16.0% per annum at any time.
(b) Default Interest. Upon the occurrence and during the continuance
of a Default, the Borrower shall pay interest on (i) the unpaid principal amount
of each Advance owing to each Lender, payable in arrears on the dates referred
to in clause (a)(i) or (a)(ii) above and on demand, at a rate per annum equal at
all times to 2% per annum above the rate per annum required to be paid on such
Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to the fullest
extent permitted by law, the amount of any interest, fee or other amount payable
under the Loan Documents that is not paid when due, from the date such amount
shall be due until such amount shall be paid in full, payable in arrears on the
date such amount shall be paid in full and on demand, at a rate per annum equal
at all times to 2% per annum above the rate per annum required to be paid, in
the case of interest, on the Type of Advance on which such interest has accrued
pursuant to clause (a)(i) or (a)(ii) above, and, in all other cases, on
Alternate Base Rate Advances pursuant to clause (a)(i) above.
(c) Notice of Interest Rate. Promptly after receipt of a Notice of
Borrowing pursuant to Section 2.02(a), the Administrative Agent shall give
notice to the Borrower and each Appropriate Lender of the applicable interest
rate determined by the Administrative Agent for purposes of clause (a)(i) or
(ii) above.
SECTION 2.08. Fees. (a) Commitment Fee. The Borrower shall pay to
the Administrative Agent for the account of the Lenders a commitment fee, from
the date hereof in the case of each Initial Lender and from the effective date
specified in the Assignment and Acceptance pursuant to which it became a Lender
in the case of each other Lender until the applicable Termination Date, payable
in arrears quarterly on the last Business Day of each fiscal quarter of the
Borrower, commencing March 31, 1998, and on the applicable Termination Date, at
the rate of 1/2 of 1% per annum on the average daily Unused Revolving Credit
Commitment of such Lender; provided, however, that any commitment fee accrued
with respect to any of the Commitments of a Defaulting Lender during the period
prior to the time such Lender became a Defaulting Lender and unpaid at such time
shall not be payable by the Borrower so long as such Lender shall be a
Defaulting Lender except to the extent that such commitment fee shall otherwise
have been due and payable by the Borrower prior to such time; and provided
further that no commitment fee shall accrue on any of the Commitments of a
Defaulting Lender so long as such Lender shall be a Defaulting Lender.
(b) Letter of Credit Fees, Etc. The Borrower shall pay to the
Administrative Agent for the account of each Revolving Credit Lender a
commission, payable in arrears quarterly on the last Business Day of each fiscal
quarter, commencing March 31, 1998, and on the earliest to occur of the full
drawing, expiration,
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termination or cancellation of any such Letter of Credit and on the applicable
Termination Date, on such Lender's Pro Rata Share of the sum of the average
daily aggregate Available Amount during such quarter of the sum of all Letters
of Credit then outstanding plus the average daily Letter of Credit Advances
outstanding during such quarter at a rate equal to 2.0% per annum.
(c) Administrative Agent's Fees. The Borrower shall pay to the
Administrative Agent for its own account the fees set forth in the Fee Letter
and such other fees as may from time to time be agreed between the Borrower and
the Administrative Agent.
SECTION 2.09. Conversion of Advances. (a) Optional. The Borrower may
on any Business Day, upon notice given to the Administrative Agent not later
than 10:00 A.M. (Charlotte, North Carolina time) on the third Business Day prior
to the date of the proposed Conversion and subject to the provisions of Sections
2.07 and 2.10, Convert all or any portion of the Term A Advances or Term B
Advances of one Type comprising the same Borrowing into Advances of the other
Type; provided, however, that any Conversion of Eurodollar Rate Advances into
Alternate Base Rate Advances shall be made only on the last day of an Interest
Period for such Eurodollar Rate Advances, any Conversion of Alternate Base Rate
Advances into Eurodollar Rate Advances shall be in an amount not less than the
minimum amount specified in Section 2.02(b), no Conversion of any Advances shall
result in more separate Borrowings than permitted under Section 2.02(b) and each
Conversion of Advances comprising part of the same Borrowing under any Facility
shall be made ratably among the Appropriate Lenders in accordance with their
Commitments under such Facility. Each such notice of Conversion shall, within
the restrictions specified above, specify (i) the date of such Conversion, (ii)
the Advances to be Converted and (iii) if such Conversion is into Eurodollar
Rate Advances, the duration of the initial Interest Period for such Advances.
Each notice of Conversion shall be irrevocable and binding on the Borrower.
(b) Mandatory. (i) On the date on which the aggregate unpaid
principal amount of Term A Advances or Term B Advances which are Eurodollar Rate
Advances comprising any Borrowing shall be reduced, by payment or prepayment or
otherwise, to less than $1,000,000, such Advances shall automatically Convert
into Alternate Base Rate Advances.
(ii) If the Borrower shall fail to select the duration of any
Interest Period for any Term A Advances or Term B Advances which are Eurodollar
Rate Advances in accordance with the provisions contained in the definition of
"Interest Period" in Section 1.01, the Administrative Agent will forthwith so
notify the Borrower and the Appropriate Lenders, whereupon each such Eurodollar
Rate Advance will automatically, on the last day of the then existing Interest
Period therefor, Convert into an Alternate Base Rate Advance.
(iii) Upon the occurrence and during the continuance of any Default,
with respect to Term A Advances and Term B Advances (x) each Term A Advance or
Term B Advance which is a Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into an
Alternate Base Rate Advance and (y) the obligation of the Lenders to make, or to
Convert Advances into, Eurodollar Rate Advances shall be suspended.
SECTION 2.10. Increased Costs, Etc. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to any Lender Party of agreeing to make
or of making, funding or maintaining Eurodollar Rate Advances or of agreeing to
issue or of issuing or maintaining Letters of Credit or of agreeing to make or
of making or maintaining Letter of Credit Advances (excluding, for purposes of
this Section 2.10, any such increased costs resulting from (x) Taxes or Other
Taxes (as to which Section 2.12 shall govern) and (y) changes in the basis of
taxation of overall net income or overall gross income by the United States or
by the foreign
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jurisdiction or state under the laws of which such Lender Party is organized or
has its Applicable Lending Office or any political subdivision thereof), then
the Borrower shall from time to time, upon demand by such Lender Party (with a
copy of such demand to the Administrative Agent), pay to the Administrative
Agent for the account of such Lender Party additional amounts sufficient to
compensate such Lender Party for such increased cost. A certificate as to the
amount of such increased cost, submitted to the Borrower by such Lender Party,
shall be conclusive and binding for all purposes, absent manifest error.
(b) If any Lender Party determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by such
Lender Party or any corporation controlling such Lender Party and that the
amount of such capital is increased by or based upon the existence of such
Lender Party's commitment to lend or to issue Letters of Credit hereunder and
other commitments of such type or the issuance or maintenance of the Letters of
Credit (or similar contingent obligations), then, upon demand by such Lender
Party (with a copy of such demand to the Administrative Agent), the Borrower
shall pay to the Administrative Agent for the account of such Lender Party, from
time to time as specified by such Lender Party, additional amounts sufficient to
compensate such Lender Party in the light of such circumstances, to the extent
that such Lender Party reasonably determines such increase in capital to be
allocable to the existence of such Lender Party's commitment to lend or to issue
Letters of Credit hereunder or to the issuance or maintenance of any Letters of
Credit. A certificate as to such amounts submitted to the Borrower by such
Lender Party shall be conclusive and binding for all purposes, absent manifest
error.
(c) If, with respect to any Eurodollar Rate Advances under any
Facility, Lenders notify the Administrative Agent that the Eurodollar Rate for
any Interest Period for such Advances will not adequately reflect the cost to
such Lenders of making, funding or maintaining their Eurodollar Rate Advances
for such Interest Period, the Administrative Agent shall forthwith so notify the
Borrower and the Appropriate Lenders, whereupon (i) each such Eurodollar Rate
Advance under such Facility will automatically, on the last day of the then
existing Interest Period therefor, Convert into an Alternate Base Rate Advance
and (ii) the obligation of the Appropriate Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended until the
Administrative Agent shall notify the Borrower that such Lenders have determined
that the circumstances causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrower
through the Administrative Agent, (i) each Eurodollar Rate Advance under each
Facility under which such Lender has a Commitment will automatically, upon such
demand, Convert into an Alternate Base Rate Advance and (ii) the obligation of
the Appropriate Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended until the Administrative Agent shall notify the
Borrower that such Lender has determined that the circumstances causing such
suspension no longer exist.
SECTION 2.11. Payments and Computations. (a) The Borrower shall make
each payment hereunder and under the Notes, irrespective of any right of
counterclaim or set-off (except as otherwise provided in Section 2.15), not
later than 11:00 A.M. (Charlotte, North Carolina time) on the day when due in
U.S. dollars to the Administrative Agent at the Administrative Agent's Account
in same day funds. The Administrative Agent will promptly thereafter cause like
funds to be distributed (i) if such payment by the Borrower is in respect of
principal, interest, commitment fees or any other Obligation then payable
hereunder and under the Notes to more than one Lender Party, to such Lender
Parties for the account of their respective Applicable Lending Offices
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ratably in accordance with the amounts of such respective Obligations then
payable to such Lender Parties and (ii) if such payment by the Borrower is in
respect of any Obligation then payable hereunder to one Lender Party, to such
Lender Party for the account of its Applicable Lending Office, in each case to
be applied in accordance with the terms of this Agreement. Upon its acceptance
of an Assignment and Acceptance and recording of the information contained
therein in the Register pursuant to Section 8.07(d), from and after the
effective date of such Assignment and Acceptance, the Administrative Agent shall
make all payments hereunder and under the Notes in respect of the interest
assigned thereby to the Lender Party assignee thereunder, and the parties to
such Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
(b) If the Administrative Agent receives funds for application to
the Obligations under the Loan Documents under circumstances for which the Loan
Documents do not specify the Advances or the Facility to which, or the manner in
which, such funds are to be applied, the Administrative Agent may, but shall not
be obligated to, elect to distribute such funds to each Lender Party ratably in
accordance with such Lender Party's proportionate share of the principal amount
of all outstanding Advances and the Available Amount of all Letters of Credit
then outstanding, in repayment or prepayment of such of the outstanding Advances
or other Obligations owed to such Lender Party, and for application to such
principal installments, as the Administrative Agent shall direct.
(c) The Borrower hereby authorizes each Lender Party, if and to the
extent payment owed to such Lender Party is not made when due hereunder or, in
the case of a Lender, under the Note held by such Lender, to charge from time to
time against any or all of the Borrower's accounts with such Lender Party any
amount so due.
(d) All computations of interest, fees and Letter of Credit
commissions shall be made by the Administrative Agent on the basis of a year of
360 days, in each case for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest,
fees or commissions are payable. Each determination by the Administrative Agent
of an interest rate, fee or commission hereunder shall be conclusive and binding
for all purposes, absent manifest error.
(e) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or commitment fee, as
the case may be; provided, however, that, if such extension would cause payment
of interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(f) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to any Lender Party
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender Party
on such due date an amount equal to the amount then due such Lender Party. If
and to the extent the Borrower shall not have so made such payment in full to
the Administrative Agent, each such Lender Party shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
Party together with interest thereon, for each day from the date such amount is
distributed to such Lender Party until the date such Lender Party repays such
amount to the Administrative Agent, at the Federal Funds Rate.
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SECTION 2.12. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.11,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender Party and the
Administrative Agent, taxes that are imposed on its overall net income by the
United States and taxes that are imposed on its overall net income (and
franchise taxes imposed in lieu thereof) by the state or foreign jurisdiction
under the laws of which such Lender Party or the Administrative Agent (as the
case may be) is organized or any political subdivision thereof and, in the case
of each Lender Party, taxes that are imposed on its overall net income (and
franchise taxes imposed in lieu thereof) by the state or foreign jurisdiction of
such Lender Party's Applicable Lending Office or in which such Lender Party is,
without regard to any sums payable hereunder, doing business or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities in respect of payments hereunder or under
the Notes being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to any Lender Party or the Administrative Agent, (i)
the sum payable by the Borrower shall be increased as may be necessary so that
after the Borrower and the Administrative Agent have made all required
deductions (including deductions applicable to additional sums payable under
this Section 2.12) such Lender Party or the Administrative Agent (as the case
may be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make all such deductions and (iii)
the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, performance under, or otherwise with respect to,
this Agreement or the Notes (hereinafter referred to as "Other Taxes").
(c) The Borrower shall indemnify each Lender Party and the
Administrative Agent for and hold them harmless against the full amount of Taxes
and Other Taxes, and for the full amount of taxes of any kind imposed by any
jurisdiction on amounts payable under this Section 2.12, imposed on or paid by
such Lender Party or the Administrative Agent (as the case may be) and any
liability (including penalties, additions to tax, interest and expenses) arising
therefrom or with respect thereto. This indemnification shall be made within 30
days from the date such Lender Party or the Administrative Agent (as the case
may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower shall furnish to the Administrative Agent, at its address referred to
in Section 8.02, the original or a certified copy of a receipt evidencing such
payment. In the case of any payment hereunder or under the Notes by or on behalf
of the Borrower through an account or branch outside the United States or by or
on behalf of the Borrower by a payor that is not a United States person, if the
Borrower determines that no Taxes are payable in respect thereof, the Borrower
shall furnish, or shall cause such payor to furnish, to the Administrative
Agent, at such address, an opinion of counsel acceptable to the Administrative
Agent stating that such payment is exempt from Taxes. For purposes of this
subsection (d) and subsection (e) of this Section 2.12, the terms "United
States" and "United States person" shall have the meanings specified in Section
7701 of the Internal Revenue Code.
(e) Each Lender Party organized under the laws of a jurisdiction
outside the United States shall, on or prior to the date of its execution and
delivery of this Agreement in the case of each Initial Lender or Initial Issuing
Bank, as the case may be, and on the date of the Assignment and Acceptance
pursuant to which it becomes a Lender Party in the case of each other Lender
Party, and from time to time thereafter as requested in writing by the Borrower
(but only so long thereafter as such Lender Party remains lawfully able to do
so), provide each of the Administrative Agent and the Borrower with two original
Internal Revenue Service forms 1001 or 4224 or an applicable successor form. If
the forms provided by a Lender Party at the time such Lender Party first
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becomes a party to this Agreement indicate a United States interest withholding
tax rate in excess of zero, withholding tax at such rate shall be considered
excluded from Taxes unless and until such Lender Party provides the appropriate
forms certifying that a lesser rate applies, whereupon withholding tax at such
lesser rate only shall be considered excluded from Taxes for periods governed by
such forms; provided, however, that, if at the date of the Assignment and
Acceptance pursuant to which a Lender Party becomes a party to this Agreement,
the Lender Party assignor was entitled to payments under subsection (a) of this
Section 2.12 in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent, the term Taxes shall include
(in addition to withholding taxes that may be imposed in the future or other
amounts otherwise includable in Taxes) United States withholding tax, if any,
applicable with respect to the Lender Party assignee on such date. If any form
or document referred to in this subsection (e) requires the disclosure of
information, other than information necessary to compute the tax payable and
information required on the date hereof by Internal Revenue Service form 1001 or
4224 or an applicable successor form, that the Lender Party reasonably considers
to be confidential, the Lender Party shall give notice thereof to the Borrower
and shall not be obligated to include in such form or document such confidential
information.
(f) For any period with respect to which a Lender Party has failed
to provide the Borrower with the appropriate form described in subsection (e)
above (other than if such failure is due to a change in law occurring after the
date on which a form originally was required to be provided or if such form
otherwise is not required under subsection (e) above), such Lender Party shall
not be entitled to indemnification under subsection (a) or (c) of this Section
2.12 with respect to Taxes imposed by the United States by reason of such
failure; provided, however, that should a Lender Party become subject to Taxes
because of its failure to deliver a form required hereunder, the Borrower shall
take such steps as such Lender Party shall reasonably request to assist such
Lender Party to recover such Taxes.
(g) If the Internal Revenue Service or any other governmental
authority of the United States or other jurisdiction asserts a claim that the
Administrative Agent did not properly withhold tax from amounts paid to or for
the account of any Lender Party (because the appropriate form was not delivered
or was not properly executed, or because such Lender Party failed to notify the
Administrative Agent of a change in circumstances which rendered the exemption
from, or reduction of, withholding tax ineffective, or for any other reason)
such Lender Party shall indemnify the Administrative Agent fully for all amounts
paid, directly or indirectly, by the Administrative Agent as tax or otherwise,
including penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to the Administrative Agent under this
Section, together with all cost and expenses (including fees and disbursements
of counsel). The obligation of the Lender Parties under this subsection shall
survive the payment of all obligations and the resignation or replacement of the
Administrative Agent.
SECTION 2.13. Sharing of Payments, Etc. If any Lender Party shall
obtain at any time any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) (a) on account of Obligations
due and payable to such Lender Party hereunder and under the Notes at such time
in excess of its ratable share (according to the proportion of (i) the amount of
such Obligations due and payable to such Lender Party at such time to (ii) the
aggregate amount of the Obligations due and payable to all Lender Parties
hereunder and under the Notes at such time) of payments on account of the
Obligations due and payable to all Lender Parties hereunder and under the Notes
at such time obtained by all the Lender Parties at such time or (b) on account
of Obligations owing (but not due and payable) to such Lender Party hereunder
and under the Notes at such time in excess of its ratable share (according to
the proportion of (i) the amount of such Obligations owing to such Lender Party
at such time to (ii) the aggregate amount of the Obligations owing (but not due
and payable) to all Lender Parties hereunder and under the Notes at such time)
of payments on account of the Obligations owing (but not due and payable) to all
Lender Parties hereunder and under the Notes at such time obtained by all of the
Lender Parties at such time, such Lender Party shall forthwith purchase from the
other Lender Parties such participations
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in the Obligations due and payable or owing to them, as the case may be, as
shall be necessary to cause such purchasing Lender Party to share the excess
payment with each of them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender Party, such
purchase from each other Lender Party shall be rescinded and such other Lender
Party shall repay to the purchasing Lender Party the purchase price to the
extent of such Lender Party's ratable share (according to the proportion of (i)
the purchase price paid to such Lender Party to (ii) the aggregate purchase
price paid to all Lender Parties) of such recovery together with an amount equal
to such Lender Party's ratable share (according to the proportion of (i) the
amount of such other Lender Party's required repayment to (ii) the total amount
so recovered from the purchasing Lender Party) of any interest or other amount
paid or payable by the purchasing Lender Party in respect of the total amount so
recovered. The Borrower agrees that any Lender Party so purchasing a
participation from another Lender Party pursuant to this Section 2.13 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender Party were the direct creditor of the Borrower in the amount of
such participation.
SECTION 2.14. Use of Proceeds. The proceeds of Advances and
issuances of Letters of Credit shall be available (and the Borrower agrees that
it shall use such proceeds and Letters of Credit) solely to finance the
Acquisition, refinance certain indebtedness of the Subsidiaries of Borrower, pay
transaction fees and expenses, provide working capital for the Borrower and its
Subsidiaries and for other general corporate purposes of the Borrower and its
Subsidiaries.
SECTION 2.15. Defaulting Lenders. (a) In the event that, at any one
time, (i) any Lender Party shall be a Defaulting Lender, (ii) such Defaulting
Lender shall owe a Defaulted Advance to the Borrower and (iii) the Borrower
shall be required to make any payment hereunder or under any other Loan Document
to or for the account of such Defaulting Lender, then the Borrower may, so long
as no Default shall occur or be continuing at such time and to the fullest
extent permitted by applicable law, set-off and otherwise apply the Obligation
of the Borrower to make such payment to or for the account of such Defaulting
Lender against the obligation of such Defaulting Lender to make such Defaulted
Advance. In the event that, on any date, the Borrower shall so set-off and
otherwise apply its obligation to make any such payment against the obligation
of such Defaulting Lender to make any such Defaulted Advance on or prior to such
date, the amount so set-off and otherwise applied by the Borrower shall
constitute for all purposes of this Agreement and the other Loan Documents an
Advance by such Defaulting Lender made on the date under the Facility pursuant
to which such Defaulted Advance was originally required to have been made
pursuant to Section 2.01. Such Advance shall be of the same Type as such
Defaulted Advance and shall be considered, for all purposes of this Agreement,
to comprise part of the Borrowing in connection with which such Defaulted
Advance was originally required to have been made pursuant to Section 2.01, even
if the other Advances comprising such Borrowing shall be Eurodollar Rate
Advances on the date such Advance is deemed to be made pursuant to this
subsection (a). The Borrower shall notify the Administrative Agent at any time
the Borrower exercises its right of set-off pursuant to this subsection (a) and
shall set forth in such notice (A) the name of the Defaulting Lender and the
Defaulted Advance required to be made by such Defaulting Lender and (B) the
amount set-off and otherwise applied in respect of such Defaulted Advance
pursuant to this subsection (a). Any portion of such payment otherwise required
to be made by the Borrower to or for the account of such Defaulting Lender which
is paid by the Borrower, after giving effect to the amount set-off and otherwise
applied by the Borrower pursuant to this subsection (a), shall be applied by the
Administrative Agent as specified in subsection (b) or (c) of this Section 2.15.
(b) In the event that, at any one time, (i) any Lender Party shall
be a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount
to the Administrative Agent or any of the other Lender Parties and (iii) the
Borrower shall make any payment hereunder or under any other Loan Document to
the Administrative Agent for the account of such Defaulting Lender, then the
Administrative Agent may, on its behalf or on behalf of such other Lender
Parties and to the fullest extent permitted by applicable law, apply at such
time
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the amount so paid by the Borrower to or for the account of such Defaulting
Lender to the payment of each such Defaulted Amount to the extent required to
pay such Defaulted Amount. In the event that the Administrative Agent shall so
apply any such amount to the payment of any such Defaulted Amount on any date,
the amount so applied by the Administrative Agent shall constitute for all
purposes of this Agreement and the other Loan Documents payment, to such extent,
of such Defaulted Amount on such date. Any such amount so applied by the
Administrative Agent shall be retained by the Administrative Agent or
distributed by the Administrative Agent to such other Lender Parties, ratably in
accordance with the respective portions of such Defaulted Amounts payable at
such time to the Administrative Agent and such other Lender Parties and, if the
amount of such payment made by the Borrower shall at such time be insufficient
to pay all Defaulted Amounts owing at such time to the Administrative Agent and
the other Lender Parties, in the following order of priority:
(i) first, to the Administrative Agent for any Defaulted Amount then
owing to the Administrative Agent; and
(ii) second, to any other Lender Parties for any Defaulted Amounts
then owing to such other Lender Parties, ratably in accordance with such
respective Defaulted Amounts then owing to such other Lender Parties.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.15.
(c) In the event that, at any one time, (i) any Lender Party shall
be a Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted
Advance or a Defaulted Amount and (iii) the Borrower, the Administrative Agent
or any other Lender Party shall be required to pay or distribute any amount
hereunder or under any other Loan Document to or for the account of such
Defaulting Lender, then the Borrower or such other Lender Party shall pay such
amount to the Administrative Agent to be held by the Administrative Agent, to
the fullest extent permitted by applicable law, in escrow or the Administrative
Agent shall, to the fullest extent permitted by applicable law, hold in escrow
such amount otherwise held by it. Any funds held by the Administrative Agent in
escrow under this subsection (c) shall be deposited by the Administrative Agent
in an account with NationsBridge (or, after the Bridge Repayment Date,
NationsCredit), in the name and under the control of the Administrative Agent,
but subject to the provisions of this subsection (c). The terms applicable to
such account, including the rate of interest payable with respect to the credit
balance of such account from time to time, shall be NationsBridge's (or, after
the Bridge Repayment Date, NationsCredit's) standard terms applicable to escrow
accounts maintained with it. Any interest credited to such account from time to
time shall be held by the Administrative Agent in escrow under, and applied by
the Administrative Agent from time to time in accordance with the provisions of,
this subsection (c). The Administrative Agent shall, to the fullest extent
permitted by applicable law, apply all funds so held in escrow from time to time
to the extent necessary to make any Advances required to be made by such
Defaulting Lender and to pay any amount payable by such Defaulting Lender
hereunder and under the other Loan Documents to the Administrative Agent or any
other Lender Party, as and when such Advances or amounts are required to be made
or paid and, if the amount so held in escrow shall at any time be insufficient
to make and pay all such Advances and amounts required to be made or paid at
such time, in the following order of priority:
(i) first, to the Administrative Agent for any amount then due and
payable by such Defaulting Lender to the Administrative Agent hereunder;
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(ii) second, to any other Lender Parties for any amount then due and
payable by such Defaulting Lender to such other Lender Parties hereunder,
ratably in accordance with such respective amounts then due and payable to
such other Lender Parties; and
(iii) third, to the Borrower for any Advance then required to be
made by such Defaulting Lender pursuant to a Commitment of such Defaulting
Lender.
In the event that any Lender Party that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with respect to such Lender Party shall be
distributed by the Administrative Agent to such Lender Party and applied by such
Lender Party to the Obligations owing to such Lender Party at such time under
this Agreement and the other Loan Documents ratably in accordance with the
respective amounts of such Obligations outstanding at such time.
(d) The rights and remedies against a Defaulting Lender under this
Section 2.15 are in addition to other rights and remedies that the Borrower may
have against such Defaulting Lender with respect to any Defaulted Advance and
that the Administrative Agent or any Lender Party may have against such
Defaulting Lender with respect to any Defaulted Amount.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Initial Extension of Credit.
The obligation of each Lender to make an Advance or of the Issuing Bank to issue
a Letter of Credit on the occasion of the Initial Extension of Credit hereunder
is subject to the satisfaction of the following conditions precedent before or
concurrently with the Initial Extension of Credit:
(a) (i) The Lender Parties shall be satisfied with the corporate and
legal structure and capitalization of each Loan Party and each of its
Subsidiaries, including the terms and conditions of their respective
Constitutive Documents and each class of capital stock or other equity
interest of each Loan Party and each such Subsidiary and of each agreement
or instrument relating to such structure or capitalization and (ii) 100%
of the capital stock of Afa Polytek B.V., a corporation organized under
the laws of the Netherlands, shall have been contributed to the Borrower.
(b) All of the Related Documents shall be in full force and effect,
in form and substance satisfactory to the Lender Parties and no amendment
or waiver thereof, or consent to departure from any provision thereof,
shall have been made, unless satisfactory to the Lender Parties.
(c) The Acquisition shall have been consummated or shall be
consummated concurrently with the Initial Extension of Credit, in
accordance with the terms of the Purchase Agreement, and in compliance
with all applicable Requirements of Law; the purchase price paid for the
Acquired Business shall be equal to $93,670,000, $2,000,000 of which will
be held in escrow pursuant to an agreement between the Seller and the
Borrower; on the Closing Date, the Seller will have made a cash payment to
the Borrower pursuant to Section 7.12A of the Purchase Agreement equal to
30.3% of the fees charged to the Borrower for providing the Facilities; no
fees or similar amounts payable by the Borrower to the Owners in
connection with the Acquisition shall have been paid; and the aggregate
fees and expenses incurred or to be incurred by the Borrower and its
Subsidiaries in connection with the Acquisition shall not have exceeded
$4,600,000; all such fees and expenses shall have been disclosed on an
itemized basis
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to the Administrative Agent and all such fees and expenses shall be on
terms and conditions and in amounts satisfactory to the Administrative
Agent.
(d) All of the governmental authorizations, and all of the consents,
approvals and authorizations of, and notices and filings to or with, and
other actions by, any other Person necessary in connection with any aspect
of the Acquisition, any of the Loan Documents or the Related Documents or
any of the other transactions contemplated thereby, other than the
governmental authorizations, and the consents, approvals, authorizations,
notices, filings and other actions described on Schedule 4.01(d) hereto,
shall have been obtained (without the imposition of any conditions that
are not reasonably acceptable to the Lender Parties) and shall remain in
full force and effect; and all applicable waiting periods shall have
expired without any action being taken by any competent authority.
(e) The Lender Parties shall be satisfied that (i) after giving
effect to the Acquisition, the aggregate Unused Revolving Credit
Commitments shall not be less than $27,500,000 and (ii) all Existing Debt,
other than the Debt identified on Schedule 4.01(ff) hereto (the "Surviving
Debt"), has been prepaid, redeemed or defeased in full or otherwise
satisfied and extinguished and that all such Surviving Debt shall be on
terms and conditions satisfactory to the Lender Parties.
(f) Before giving effect to the Acquisition and the other
transactions contemplated by this Agreement, there shall have occurred no
material adverse change in the business, condition (financial or
otherwise), operations, performance, properties or prospects of (i) the
Borrower or the Borrower and its Subsidiaries taken as a whole since
December 31, 1996 and (ii) the Acquired Business since May 31, 1997.
(g) There shall exist no action, suit, investigation, litigation or
proceeding affecting any Loan Party, Owner or any of its Subsidiaries
pending or threatened before any court, governmental agency or arbitrator
that (i) could be reasonably likely to have a Material Adverse Effect
other than the matters described on Schedule 3.01(g) hereto (the
"Disclosed Litigation") or (ii) purports to affect the legality, validity
or enforceability of the Acquisition, this Agreement, any Note, any other
Loan Document, any Related Document or the consummation of the Acquisition
or the transactions contemplated thereby, and there shall have been no
adverse change in the status, or financial effect on any Loan Party, Owner
or any of its Subsidiaries, of the Disclosed Litigation from that
described on Schedule 3.01(g).
(h) Nothing shall have come to the attention of the Lender Parties
during the course of such due diligence investigation to lead them to
believe (i) that the Information Memorandum was or has become misleading,
incorrect or incomplete in any material respect, (ii) that, following the
consummation of the Acquisition, the Borrower and its Subsidiaries would
not have good and marketable title to all material assets of the Borrower,
its Subsidiaries and the Acquired Business reflected in the Information
Memorandum and (iii) that the Acquisition will have a Material Adverse
Effect; without limiting the generality of the foregoing, the Lender
Parties shall have been given such access to the management, records,
books of account, contracts and properties of the Borrower and its
Subsidiaries and of the Seller relating to the Acquired Business as they
shall have requested.
(i) The Borrower shall have paid all accrued fees and expenses of
the Administrative Agent and the Lender Parties (including the accrued
fees and expenses of counsel to the Administrative Agent and local counsel
to the Lender Parties).
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(j) The Borrower shall have executed the Fee Letter, and such letter
shall be in full force and effect and the Borrower shall not have breached
any of its obligations thereunder.
(k) The warrants held by NationsCredit pursuant to the Warrant
expiring July 29, 2007 for the purchase of shares in the Parent shall have
been amended and restated on terms and conditions satisfactory to the
Lender Parties and the warrantholders rights agreement related thereto
(collectively, as amended, supplemented or otherwise modified from time to
time, the "Second Warrant Agreement") shall have been delivered to the
Administrative Agent; and the warrants held by Waldock, Limited, a
corporation organized under the laws of the British Virgin Islands,
pursuant to the Warrant expiring July 29, 2007, for the purchase of shares
in the Parent shall have been amended and restated on terms and conditions
satisfactory to the Lender Parties and such Warrant (collectively, as
amended, supplemented as otherwise modified from time to time, the
"Waldock Warrant Agreement") shall have been delivered to the
Administrative Agent.
(l) The Debt owing by AFA Products, Inc. to Afa International
Limited and Waldock Limited shall have been refinanced with the proceeds
of the Subordinated Notes issued by the Parent.
(m) An underwriter reasonably satisfactory to the Administrative
Agent shall have been engaged in connection with the Refinancing.
(n) The Administrative Agent shall have received on or before the
day of the Initial Extension of Credit the following, each dated such day
(unless otherwise specified), in form and substance satisfactory to the
Administrative Agent (unless otherwise specified) and (except for the
Notes) in sufficient copies for each Lender Party:
(i) The Notes payable to the order of the Lenders.
(ii) Certified copies of the resolutions of the Board of
Directors of the Borrower and each other Loan Party approving the
Acquisition and the other transactions contemplated by the Loan
Documents, this Agreement, the Notes, each other Loan Document and
each Related Document to which it is or is to be a party, and of all
documents evidencing other necessary corporate (or the equivalent
thereof) action and governmental and other third party approvals and
consents, if any, with respect to the Acquisition, this Agreement,
the Notes, each other Loan Document and each Related Document to
which it is or is to be a party.
(iii) A copy of a certificate of the Secretary of State of the
jurisdiction of organization of each Loan Party, dated reasonably
near the date of the Initial Extension of Credit, certifying as to
(A) a true and correct copy of the charter of such Loan Party and
each amendment thereto on file in his office and that (B) (1) such
amendments are the only amendments to such Loan Party's charter on
file in his office, (2) such Loan Party has paid all franchise taxes
(or the equivalent thereof) to the date of such certificate and (3)
such Loan Party is duly incorporated and in good standing under the
laws of the State of the jurisdiction of its organization.
(iv) A copy of a certificate of the Secretary of State (or the
equivalent governmental authority) of each jurisdiction in which any
Loan Party is qualified or licensed as a foreign corporation dated
reasonably near the date of the Initial Extension of Credit, stating
that such Loan Party is duly qualified and in good standing as a
foreign corporation in such State and has filed all annual reports
required to be filed to the date of such certificate.
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(v) A certificate of the Borrower, and each other Loan Party,
signed on behalf of the Borrower and such other Loan Party by its
President or a Vice President and its Secretary or any Assistant
Secretary, dated the date of the Initial Extension of Credit (the
statements made in which certificate shall be true on and as of the
date of the Initial Extension of Credit), certifying as to (A) the
absence of any amendments to the charter of the Borrower or such
other Loan Party since the date of the Secretary of State's
certificate referred to in Section 3.01(n)(iii), (B) a true and
correct copy of the bylaws (or similar Constitutive Document) of the
Borrower, and such other Loan Party as in effect on the date of the
Initial Extension of Credit, (C) the due organization and good
standing of the Borrower and such other Loan Party as a Person
organized under the laws of the State of the jurisdiction of its
organization, and the absence of any proceeding for the dissolution
or liquidation of the Borrower or such other Loan Party, (D) the
truth of the representations and warranties contained in the Loan
Documents as though made on and as of the date of the Initial
Extension of Credit, both before and after giving effect to the
transactions contemplated hereby, and (E) the absence of any event
occurring and continuing, or resulting from the Initial Extension of
Credit, that constitutes a Default.
(vi) A certificate of the Secretary or an Assistant Secretary
of the Borrower, and each other Loan Party certifying the names and
true signatures of the officers of the Borrower and such other Loan
Party authorized to sign this Agreement, the Notes, each other Loan
Document and each Related Document to which they are or are to be
parties and the other documents to be delivered hereunder and
thereunder.
(vii) A security agreement in substantially the form of
Exhibit D hereto (together with each other security agreement
delivered pursuant to Section 5.01(n), in each case as amended,
supplemented or otherwise modified from time to time in accordance
with its terms, the "Security Agreement"), duly executed by each
Loan Party, together with:
(A) certificates representing the Pledged Shares
referred to therein accompanied by undated stock powers
executed in blank and instruments evidencing the Pledged Debt
referred to therein indorsed in blank,
(B) proper financing statements, completed in a manner
satisfactory to the Lender Parties and duly executed by the
applicable Loan Party on or before the day of the Initial
Extension of Credit under the Uniform Commercial Code of all
jurisdictions that the Administrative Agent may deem necessary
or desirable in order to perfect and protect the first
priority liens and security interests created under the
Security Agreement and the Mortgages, covering the Collateral
described in the Security Agreement and the Mortgages,
(C) completed requests for information, dated on or
before the date of the Initial Extension of Credit, listing
all of the effective financing statements filed in the
jurisdictions referred to in clause (B) above that name the
Borrower or any other Loan Party as debtor, together with
copies of such other financing statements,
(D) evidence of the insurance required by the terms of
the Security Agreement,
(E) copies of the Assigned Agreements referred to in the
Security Agreement, together with a consent to such
assignment, in substantially the form of
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Exhibit B to the Security Agreement, duly executed by each
party to such Assigned Agreements other than the Loan Parties,
(F) evidence that all other action that the
Administrative Agent may deem necessary or desirable in order
to perfect and protect the first priority liens and security
interests created under the Security Agreement has been taken.
(viii) A guaranty in substantially the form of Exhibit E
hereto duly executed by each of the Subsidiary Guarantors (together
with each other guaranty of any such entity delivered pursuant to
Section 5.01(n), in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms, the
"Subsidiary Guaranty").
(ix) A guaranty in substantially the form of Exhibit F hereto
duly executed by the Parent (as amended, supplemented or otherwise
modified from time to time in accordance with its terms, the "Parent
Guaranty").
(x) Deeds of trust, trust deeds, mortgages, leasehold
mortgages and leasehold deeds of trust in form and substance
satisfactory to the Administrative Agent and covering the properties
listed on Schedule 3.01(n)(x) hereto (the "Mortgaged Property")
(together with each other mortgage delivered pursuant to Section
5.01(n), in each case as amended, supplemented or otherwise modified
from time to time in accordance with their terms, the "Mortgages"),
duly executed by the applicable Loan Party, together with:
(A) fully paid American Land Title Association Lender's
Extended Coverage title insurance policies (the "Mortgage
Policies") in form and substance, with endorsements and in
amounts acceptable to the Administrative Agent, issued,
coinsured and reinsured by title insurers acceptable to the
Administrative Agent, insuring the Mortgages to be valid first
and subsisting Liens on the property described therein, free
and clear of all defects (including, but not limited to,
mechanics' and materialmen's Liens) and encumbrances,
excepting only Permitted Encumbrances, and providing for such
other affirmative insurance (including endorsements for future
advances under the Loan Documents and for mechanics' and
materialmen's Liens) and such coinsurance and direct access
reinsurance as the Administrative Agent may deem necessary or
desirable,
(B) American Land Title Association form surveys for the
properties listed on Schedule 3.01(n)(x)(B) hereto (the
"Surveyed Property"), dated as of the day of the Initial
Extension of Credit, certified to the Administrative Agent and
the issuer of the Mortgage Policies in a manner satisfactory
to the Administrative Agent by a land surveyor duly registered
and licensed in the States in which the property described in
such surveys is located and acceptable to the Administrative
Agent, showing all buildings and other improvements, any
off-site improvements, the location of any easements, parking
spaces, rights of way, building set-back lines and other
dimensional regulations and the absence of encroachments,
either by such improvements or on to such property, and other
defects, other than encroachments and other defects acceptable
to the Administrative Agent,
(C) to the extent applicable, the Assignments of Leases
and Rents referred to in the Mortgages, duly executed by the
applicable Loan Party,
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(D) such consents and agreements of lessors and other
third parties, and such estoppel letters and other
confirmations, as the Administrative Agent may deem necessary
or desirable,
(E) evidence of the insurance required by the terms of
the Mortgages,
(F) an appraisal of each of the properties described in
the Mortgages complying with the requirements of the Federal
Financial Institutions Reform, Recovery and Enforcement Act of
1989, which appraisals shall be from a Person acceptable to
the Lender Parties and otherwise in form and substance
satisfactory to the Lender Parties, to the extent available,
and
(G) evidence that all other action that the
Administrative Agent may deem necessary or desirable in order
to create valid first and subsisting Liens on the Mortgaged
Property has been taken.
(xi) Such financial, business and other information regarding
each Loan Party, its Subsidiaries and the Acquired Business as the
Lender Parties shall have requested, including, without limitation,
information as to possible contingent liabilities, tax matters,
environmental matters, obligations under Plans, Multiemployer Plans
and Welfare Plans, collective bargaining agreements and other
arrangements with employees, audited annual financial statements
dated (A) with respect to WTI, Inc. and its Subsidiaries, December
31, 1996 and (B) with respect to the Acquired Business, May 31,
1997, interim financial statements dated the end of the most recent
fiscal quarter for which financial statements are available (or, in
the event the Lender Parties' due diligence review reveals material
changes since such financial statements, as of a later date within
45 days of the day of the Initial Extension of Credit), pro forma
financial statements as to the Borrower and forecasts prepared by
management of the Borrower, in form and substance satisfactory to
the Lender Parties, of balance sheets, income statements and cash
flow statements on a monthly basis for the first year following the
day of the Initial Extension of Credit and on an annual basis for
each year thereafter until the applicable Termination Date.
(xii) Certified copies of each of the Related Documents and
the Fifth Amendment, duly executed by the parties thereto and in
form and substance satisfactory to the Lender Parties, together with
(i) all agreements, instruments and other documents delivered in
connection therewith and (ii) a reliance letter of counsel to the
Seller stating that the Agents and the Lender Parties, may rely on
such counsel's opinion delivered pursuant to the Purchase Agreement.
(xiii) Environmental assessment reports, in form and substance
satisfactory to the Lender Parties, from environmental consulting
firms acceptable to the Administrative Agent, as to any hazards,
costs or liabilities under Environmental Laws to which any Loan
Party, any of its Subsidiaries or the Acquired Business may be
subject, the amount and nature of which and the Borrower's plans
with respect to which shall be acceptable to the Lender Parties,
together with evidence, in form and substance satisfactory to the
Lender Parties, that all applicable Environmental Laws in connection
with the Acquisition shall have been complied with. To the extent
either the report or any other information that may become available
to the Lender Parties shall disclose any hazards, costs or
liabilities under Environmental Laws or otherwise that the Lender
Parties deem material, the Lender Parties shall be satisfied that
such hazards, costs or liabilities were adequately reflected in the
Borrower's financial reserves shown on the financial
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statements included in the Information Memorandum or that, to the
extent not so reflected, the Borrower has made adequate provision
for such hazards, costs or liabilities.
(xiv) Certificates in substantially the form of Exhibit G
hereto, attesting to the Solvency of each Loan Party after giving
effect to the Acquisition and the other transactions contemplated
hereby, from its chief financial officer.
(xv) A letter, in form and substance satisfactory to the
Administrative Agent, from the Borrower to Coopers & Lybrand, its
independent certified public accountants, advising such accountants
that the Administrative Agent and the Lender Parties have been
authorized to exercise all rights of the Borrower to require such
accountants to disclose any and all financial statements and any
other information of any kind that they may have with respect to the
Borrower and its Subsidiaries and directing such accountants to
comply with any reasonable request of the Administrative Agent or
any Lender Party for such information.
(xvi) Evidence that the Borrower has obtained and will
thereafter maintain through the High Yield Date a term life
insurance policy in form and substance and issued by a life
insurance company, in each case satisfactory to the Collateral
Agent, with respect to Peter Mancuso, in an amount not less than
$10,000,000 and providing that any amounts payable thereunder shall
be payable directly to the Collateral Agent as loss payee.
(xvii) Evidence of insurance naming the Collateral Agent as
insured and loss payee with such responsible and reputable insurance
companies or associations, and in such amounts and covering such
risks, as is satisfactory to the Lender Parties.
(xviii) Certified copies of each Employment Contract.
(xix) A warrant agreement governing the terms and conditions
of the warrants for the purchase of shares of common stock of the
Parent to be held by NationsBank and the warrants issued in
connection therewith, in each case in form and substance
satisfactory to the Lender Parties (collectively with all documents
and instruments delivered in connection therewith, in each case as
amended, supplemented or otherwise modified from time to time in
accordance with its terms, the "First Warrant Agreement"); and in
connection therewith, an escrow agreement among NationsBank, the
Parent and First Trust of New York, National Association, in form
and substance satisfactory to the Lender Parties (as amended,
supplemented or otherwise modified from time to time in accordance
with its terms, the "Warrant Escrow Agreement").
(xx) An intellectual property security agreement in
substantially the form of Exhibit I (together with each other
intellectual property security agreement delivered pursuant to
Section 5.01(n), in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms, the
"Intellectual Property Security Agreement"), duly executed by the
Borrower and each other applicable Loan Party, together with
evidence that all action that the Administrative Agent may deem
necessary or desirable in order to perfect and protect the first
priority liens and security interests created under the Intellectual
Property Security Agreement has been taken.
(xxi) A capital contribution agreement, in form and substance
satisfactory to the Lender Parties and duly executed by the parties
thereto (as amended, supplemented or otherwise
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modified from time to time in accordance with its terms, the
"Capital Contribution Agreement"); and, in connection therewith, an
escrow agreement among the Parent, the Borrower, NMS and
NationsCredit, in form and substance satisfactory to the Lender
Parties (as amended, supplemented or otherwise modified from time to
time in accordance with its terms, the "Capital Escrow Agreement").
(xxii) A favorable opinion of Gratch, Jacobs & Brozman, P.C.,
counsel to the Loan Parties, in substantially the form of Exhibit H
hereto and as to such other matters as any Lender Party through the
Administrative Agent may reasonably request.
(xxiii) A favorable opinion from the local counsel to the
Lender Parties in each of the jurisdictions listed on Schedule
3.01(n)(xxiv) hereto, in form and substance satisfactory to the
Lender Parties.
(xxiv) A favorable opinion of Pennie & Edmonds, intellectual
property counsel to the Lender Parties, in substantially the form of
Exhibit J hereto and as to such other matters as any Lender Party
through the Administrative Agent may reasonably request.
(xxv) A favorable opinion of Shearman & Sterling, counsel for
the Administrative Agent, in form and substance satisfactory to the
Lender Parties.
SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance.
The obligation of each Appropriate Lender to make an Advance (other than a
Letter of Credit Advance made by an Issuing Bank or a Revolving Credit Lender
pursuant to Section 2.03(c)) on the occasion of each Borrowing (including the
Initial Extension of Credit), and the obligation of the Issuing Bank to issue a
Letter of Credit (including the initial issuance) or renew a Letter of Credit,
shall be subject to the further conditions precedent that on the date of such
Borrowing or issuance or renewal (a) the following statements shall be true (and
each of the giving of the applicable Notice of Borrowing, Notice of Issuance or
Notice of Renewal and the acceptance by the Borrower of the proceeds of such
Borrowing or of such Letter of Credit or the renewal of such Letter of Credit
shall constitute a representation and warranty by the Borrower that both on the
date of such notice and on the date of such Borrowing or issuance or renewal
such statements are true):
(i) the representations and warranties contained in each Loan
Document are correct on and as of such date, before and after giving
effect to such Borrowing or issuance or renewal and to the application of
the proceeds therefrom, as though made on and as of such date other than
any such representations or warranties that, by their terms, refer to a
specific date other than the date of such Borrowing or issuance or
renewal, in which case as of such specific date;
(ii) no event has occurred and is continuing, or would result from
such Borrowing or issuance or renewal or from the application of the
proceeds therefrom, that constitutes a Default;
(iii) other than with respect to any Borrowing on the Closing Date,
immediately after such Borrowing and after application of the proceeds
thereof, (i) in the case of a Revolving Credit Borrowing, the aggregate
Revolving Credit of the Lenders will not exceed the lesser of (A) the
Borrowing Base and (B) the aggregate amount of the Revolving Credit
Commitments (or, if such Borrowing is on the Closing Date, an amount not
to exceed $2,500,000);
and (b) the Administrative Agent shall have received, in the case of each
Revolving Credit Borrowing (other than any such Borrowing occurring on the
Closing Date, a Borrowing Base Certificate as of the close of business on
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the Business Day immediately preceding the date of such Borrowing, and in each
case, such other approvals, opinions or documents as any Appropriate Lender
through the Administrative Agent may reasonably request.
SECTION 3.03. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender Party shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lender Parties unless an
officer of the Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice from such Lender
Party prior to the Initial Extension of Credit specifying its objection thereto
and if the Initial Extension of Credit consists of a Borrowing, such Lender
Party shall not have made available to the Administrative Agent such Lender
Party's ratable portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) Each Loan Party (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property
or in which the conduct of its business requires it to so qualify or be
licensed except where the failure to so qualify or be licensed would not
be reasonably likely to have a Material Adverse Effect and (iii) has all
requisite power and authority (including, without limitation, all
governmental licenses, permits and other approvals) to own or lease and
operate its properties and to carry on its business as now conducted and
as proposed to be conducted. All of the outstanding capital stock of the
Borrower has been validly issued, is fully paid and non-assessable and is
owned by the Parent, free and clear of all Liens. All of the outstanding
capital stock of the Parent has been validly issued, is fully paid and
non-assessable and is owned by the Owners in the amounts specified in
Schedule 4.01(a) hereto, free and clear of all Liens. 100% of the capital
stock of Afa Polytek B.V., a corporation organized under the laws of the
Netherlands, is owned directly or indirectly by the Borrower.
(b) Set forth on Schedule 4.01(b) hereto is a complete and accurate
list of all Subsidiaries of each Loan Party, showing as of the date hereof
(as to each such Subsidiary) the jurisdiction of its organization, the
number of shares of each class of capital stock authorized, and the number
outstanding, on the date hereof and the percentage of the outstanding
shares of each such class owned (directly or indirectly) by such Loan
Party and the number of shares covered by all outstanding options,
warrants, rights of conversion or purchase and similar rights at the date
hereof. All of the outstanding capital stock of all of each Loan Party's
Subsidiaries has been validly issued, is fully paid and non-assessable and
is owned by such Loan Party or one or more of its Subsidiaries free and
clear of all Liens, except those created under the Loan Documents. Each
such Subsidiary (i) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization,
(ii) is duly qualified and in good standing as a foreign corporation in
each other jurisdiction in which it owns or leases property or in which
the conduct of its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed would not be
reasonably likely to have a Material Adverse Effect and (iii) has all
requisite power and authority (including, without limitation, all
governmental licenses, permits and other approvals) to own or lease and
operate its properties and to carry on its business as
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now conducted and as proposed to be conducted except, solely in connection
with the Acquisition, for any such licenses, permits or other approvals
which are not material and which will be obtained within 60 days of the
Closing Date.
(c) The execution, delivery and performance by each Loan Party of
this Agreement, the Notes, each other Loan Document and each Related
Document to which it is or is to be a party, and the consummation of the
Acquisition and the other transactions contemplated hereby, are within
such Loan Party's corporate powers, have been duly authorized by all
necessary action (corporate and otherwise), and do not (i) contravene such
Loan Party's Constitutive Documents, (ii) violate any law (including,
without limitation, the Securities Exchange Act of 1934 and the Racketeer
Influenced and Corrupt Organizations Chapter of the Organized Crime
Control Act of 1970), rule, regulation (including, without limitation,
Regulation X of the Board of Governors of the Federal Reserve System),
order, writ, judgment, injunction, decree, determination or award, (iii)
conflict with or result in the breach of, or constitute a default under,
any contract, loan agreement, indenture, mortgage, deed of trust, lease or
other instrument binding on or affecting any Loan Party, any of its
Subsidiaries or any of their properties except, solely with respect to the
Acquisition, any lease or contract (other than any such contract which
evidences indebtedness for borrowed money) so long as such conflict,
breach or default could not be reasonably likely to have a Material
Adverse Effect, or (iv) except for the Liens created under the Loan
Documents, result in or require the creation or imposition of any Lien
upon or with respect to any of the properties of any Loan Party or any of
its Subsidiaries. No Loan Party or any of its Subsidiaries is in violation
of any such law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award or in breach of any such contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument,
the violation or breach of which could be reasonably likely to have a
Material Adverse Effect.
(d) No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body or any
other third party is required for (i) the due execution, delivery,
recordation, filing or performance by any Loan Party of this Agreement,
the Notes, any other Loan Document or any Related Document to which it is
or is to be a party, or for the consummation of the Acquisition or the
other transactions contemplated hereby and thereby, (ii) the grant by any
Loan Party of the Liens granted by it pursuant to the Collateral
Documents, (iii) the perfection or maintenance of the Liens created by the
Collateral Documents (including the first priority nature thereof) other
than the filings to be made pursuant to Section 5.01(o) within the period
of time set forth therein or (iv) the exercise by the Administrative Agent
or any Lender Party of its rights under the Loan Documents or the remedies
in respect of the Collateral pursuant to the Collateral Documents, except
for the authorizations, approvals, actions, notices and filings listed on
Schedule 4.01(d) hereto, all of which have been duly obtained, taken,
given or made and are in full force and effect and the filings to be made
pursuant to Section 5.01(o) within the period of time set forth therein.
All applicable waiting periods in connection with the Acquisition and the
other transactions contemplated hereby have expired without any action
having been taken by any competent authority restraining, preventing or
imposing materially adverse conditions upon the Acquisition or the rights
of the Loan Parties or their Subsidiaries freely to transfer or otherwise
dispose of, or to create any Lien on, any properties now owned or
hereafter acquired by any of them.
(e) This Agreement has been, and each of the Notes, each other Loan
Document and each Related Document when delivered hereunder will have
been, duly executed and delivered by each Loan Party thereto. This
Agreement is, and each of the Notes, each other Loan Document and each
Related Document when delivered hereunder will be, the legal, valid and
binding obligation of each Loan Party thereto, enforceable against such
Loan Party in accordance with its terms.
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(f) The Consolidated balance sheets of (i) WTI, Inc. as at December
31, 1996 and (ii) the Acquired Business as at May 31, 1997, and the
related Consolidated statements of income and Consolidated statement of
cash flows of the Borrower and its Subsidiaries and the Acquired Business
for the fiscal year then ended, respectively, accompanied by an opinion of
Deloitte & Touche and Arthur Andersen, respectively, independent public
accountants, and the preliminary Consolidated balance sheet of each of (i)
the Borrower and its Subsidiaries and (ii) the Acquired Business as at
December 31, 1997, and the related Consolidated statement of income and
Consolidated statement of cash flows of the Borrower and its Subsidiaries
and the Acquired Business for the 12 months then ended, in each case duly
certified by the chief financial officer of the Borrower, copies of which
have been furnished to each Lender Party, fairly present, subject, in the
case of said balance sheets as at December 31, 1997, and said statement of
income and cash flows for the 12 months then ended, to year-end audit
adjustments and the footnotes, the Consolidated financial condition of the
Borrower and its Subsidiaries and the Acquired Business, as at such dates,
and the Consolidated results of the operations of the Borrower and its
Subsidiaries and the Acquired Business, for the periods ended on such
dates, all in accordance with generally accepted accounting principles
applied on a consistent basis, and there has been no material adverse
change in the business, condition (financial or otherwise), operations,
performance, properties or prospects of (i) the Borrower or the Borrower
and its Subsidiaries taken as a whole since December 31, 1996 and (ii) the
Acquired Business since May 31, 1997 (it being understood that the
cancellation of the Acquired Business' sales agreement with DowBrands, a
unit of Dow Chemical Company, in and of itself, does not constitute a
material adverse change).
(g) The Consolidated pro forma balance sheets of the Borrower and
its Subsidiaries as at December 31, 1997, and the related Consolidated pro
forma statements of income and cash flows of the Borrower and its
Subsidiaries for the 12 months then ended, certified by the chief
financial officer of the Borrower, copies of which have been furnished to
each Lender Party, fairly present the Consolidated pro forma financial
condition of the Borrower and its Subsidiaries as at such date and the
Consolidated pro forma results of operations of the Borrower and its
Subsidiaries for the period ended on such date, in each case giving effect
to the Acquisition and the other transactions contemplated hereby, all in
accordance with GAAP.
(h) The Consolidated forecasted balance sheets, income statements
and cash flows statements of the Borrower and its Subsidiaries delivered
to the Lender Parties pursuant to Section 3.01(n)(xi) or 5.03, if any,
were prepared in good faith on the basis of the assumptions stated
therein, which assumptions were fair in the light of conditions existing
at the time of delivery of such forecasts, and represented, at the time of
delivery, the Borrower's best estimate of its future financial
performance.
(i) No information, exhibit or report furnished by any Loan Party to
the Administrative Agent or any Lender Party in connection with the
negotiation of the Loan Documents or pursuant to the terms of the Loan
Documents contained any untrue statement of a material fact or omitted to
state a material fact necessary to make the statements made therein not
misleading.
(j) There is no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries, including
any Environmental Action, pending or threatened before any court,
governmental agency or arbitrator that (i) could be reasonably likely to
have a Material Adverse Effect other than the Disclosed Litigation or (ii)
purports to affect the legality, validity or enforceability of the
Acquisition, this Agreement, any Note, any other Loan Document or any
Related Document or the consummation of the transactions contemplated
thereby, and there shall have been no adverse change in
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the status, or financial effect on any Loan Party or any of its
Subsidiaries, of the Disclosed Litigation from that described on Schedule
3.01(g) hereto.
(k) No proceeds of any Advance or drawings under any Letter of
Credit will be used to acquire any equity security of a class that is
registered pursuant to Section 12 of the Securities Exchange Act of 1934.
(l) The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying Margin Stock, and no proceeds of
any Advance or drawings under any Letter of Credit will be used to
purchase or carry any Margin Stock or to extend credit to others for the
purpose of purchasing or carrying any Margin Stock.
(m) Set forth on Schedule 4.01(m) hereto is a complete and accurate
list of all Plans, Multiemployer Plans and Welfare Plans.
(n) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan that has resulted in or is reasonably expected to
result in a material liability of any Loan Party or any ERISA Affiliate.
(o) Schedule B (Actuarial Information) to the most recent annual
report (Form 5500 Series) for each Plan, copies of which have been filed
with the Internal Revenue Service and furnished to the Lender Parties, is
complete and accurate and fairly represents the funding status of such
Plan, and since the date of such Schedule B there has been no material
adverse change in such funding status.
(p) No Loan Party or ERISA Affiliate has incurred or is reasonably
expected to incur any Withdrawal Liability to any Multiemployer Plan.
(q) No Loan Party or ERISA Affiliate has been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV of
ERISA, and no such Multiemployer Plan to the best knowledge of any of the
Loan Parties or ERISA Affiliates is reasonably expected to be in
reorganization or to be terminated, within the meaning of Title IV of
ERISA.
(r) Except as set forth in the financial statements referred to in
this Section 4.01 and in Section 5.03, the Loan Parties and their
respective Subsidiaries have no material liability with respect to
"expected post retirement benefit obligations" within the meaning of
Statement of Financial Accounting Standards No. 106.
(s) Neither the business nor the properties of any Loan Party or any
of its Subsidiaries are affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail, earthquake, embargo,
act of God or of the public enemy or other casualty (whether or not
covered by insurance) that could be reasonably likely to have a Material
Adverse Effect.
(t) The operations and properties of each Loan Party and each of its
Subsidiaries comply in all material respects with all applicable
Environmental Laws and Environmental Permits, all past non-compliance with
such Environmental Laws and Environmental Permits has been resolved
without material ongoing obligations or costs, and no circumstances exist
that could be reasonably likely to (i) form the basis of an Environmental
Action against any Loan Party or any of its Subsidiaries or any of
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their properties that could have a Material Adverse Effect or (ii) cause
any such property to be subject to any material restrictions on ownership,
occupancy, use or transferability under any Environmental Law.
(u) None of the properties currently or formerly owned or operated
by any Loan Party or any of its Subsidiaries is listed or proposed for
listing on the NPL or on the CERCLIS or any analogous foreign, state or
local list or is adjacent to any such property; except as disclosed in
Schedule 4.01(u) hereto there are no underground or aboveground storage
tanks or any surface impoundments, septic tanks, pits, sumps or lagoons in
which Hazardous Materials are being or have been treated, stored or
disposed on any property currently owned or operated by any Loan Party or
any of its Subsidiaries or, to the best of its knowledge, on any property
formerly owned or operated by any Loan Party or any of its Subsidiaries;
except as otherwise disclosed on Schedule 4.01(u) hereto, there is no
asbestos or asbestos- containing material on any property currently owned
or operated by any Loan Party or any of its Subsidiaries; and, except as
otherwise disclosed on Schedule 4.01(u) hereto, Hazardous Materials have
not been released, discharged or disposed of on any property currently or
formerly owned or operated by any Loan Party or any of its Subsidiaries
other than in compliance with Environmental Laws.
(v) Neither any Loan Party nor any of its Subsidiaries is
undertaking, and has not completed, either individually or together with
other potentially responsible parties, any investigation or assessment or
remedial or response action relating to any actual or threatened release,
discharge or disposal of Hazardous Materials at any site, location or
operation, either voluntarily or pursuant to the order of any governmental
or regulatory authority or the requirements of any Environmental Law; and
all Hazardous Materials generated, used, treated, handled or stored at, or
transported to or from, any property currently or formerly owned or
operated by any Loan Party or any of its Subsidiaries have been disposed
of in a manner not reasonably expected to result in material liability to
any Loan Party or any of its Subsidiaries.
(w) Neither any Loan Party nor any of its Subsidiaries is a party to
any indenture, loan or credit agreement or any lease or other agreement or
instrument or subject to any charter or corporate restriction that could
be reasonably likely to have a Material Adverse Effect.
(x) The Collateral Documents create a valid and perfected first
priority security interest in the Collateral, securing the payment of the
Secured Obligations (as defined therein), and all filings and other
actions necessary or desirable to perfect and protect such security
interest have been duly taken. The Loan Parties are the legal and
beneficial owners of the Collateral free and clear of any Lien, except for
the liens and security interests created or permitted under the Loan
Documents.
(y) Each Loan Party and each of its Subsidiaries has filed, has
caused to be filed or has been included in all tax returns (Federal,
state, local and foreign) required to be filed and has paid all taxes
shown thereon to be due, together with applicable interest and penalties
except to the extent that failure to file could not have a Material
Adverse Effect.
(z) Set forth on Schedule 4.01(z) hereto is a complete and accurate
list, as of the date hereof, of each taxable year of each Loan Party and
each of its Subsidiaries and Affiliates for which Federal income tax
returns have been filed and for which the expiration of the applicable
statute of limitations for assessment or collection has not occurred by
reason of extension or otherwise (an "Open Year").
(aa) The aggregate unpaid amount, as of the date hereof, of
adjustments to the Federal income tax liability of each Loan Party and
each of its Subsidiaries and Affiliates proposed by the
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Internal Revenue Service with respect to Open Years does not exceed
$100,000. No issues have been raised by the Internal Revenue Service in
respect of Open Years that, in the aggregate, could be reasonably likely
to have a Material Adverse Effect.
(bb) The aggregate unpaid amount, as of the date hereof, of
adjustments to the state, local and foreign tax liability of each Loan
Party and its Subsidiaries and Affiliates proposed by all state, local and
foreign taxing authorities (other than amounts arising from adjustments to
Federal income tax returns) does not exceed $100,000. No issues have been
raised by such taxing authorities that, in the aggregate, could be
reasonably likely to have a Material Adverse Effect.
(cc) Neither any Loan Party nor any of its Subsidiaries is an
"investment company," or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended. Neither the
making of any Advances, nor the issuance of any Letters of Credit, nor the
application of the proceeds or repayment thereof by the Borrower, nor the
consummation of the other transactions contemplated hereby, will violate
any provision of such Act or any rule, regulation or order of the
Securities and Exchange Commission thereunder.
(dd) Each Loan Party is, individually and together with its
Subsidiaries, Solvent.
(ee) Set forth on Schedule 4.01(ee) hereto is a complete and
accurate list of all Existing Debt (other than Surviving Debt), showing as
of the date hereof the principal amount outstanding thereunder.
(ff) Set forth on Schedule 4.01(ff) hereto is a complete and
accurate list of all Surviving Debt, showing as of the date hereof the
principal amount outstanding thereunder, the maturity date thereof and the
amortization schedule therefor.
(gg) Set forth on Schedule 4.01(gg) hereto is a complete and
accurate list of all real property owned by any Loan Party or any of its
Subsidiaries, showing as of the date hereof the street address, county or
other relevant jurisdiction, state, record owner and book and the
acquisition value thereof. Each Loan Party or such Subsidiary has good,
marketable and insurable fee simple title to such real property, free and
clear of all Liens, other than Liens created or permitted by the Loan
Documents.
(hh) Set forth on Schedule 4.01(hh) hereto (the "Leasehold
Property") is a complete and accurate list of all leases of real property
under which any Loan Party or any of its Subsidiaries is the lessee or
sublessee (with respect to the property located in El Paso, Texas only),
showing as of the date hereof the street address, county or other relevant
jurisdiction, state, lessor, lessee or sublessee (with respect to the
property located in El Paso, Texas only), expiration date and annual
rental cost thereof. Each such lease or sublease (with respect to the
property located in El Paso, Texas only) is the legal, valid and binding
obligation of the lessor or sublessor, as the case may be thereof,
enforceable in accordance with its terms.
(ii) Set forth on Schedule 4.01(ii) hereto is a complete and
accurate list of all Investments held by any Loan Party or any of its
Subsidiaries, showing as of the date hereof the amount, obligor or issuer
and maturity, if any, thereof.
(jj) Set forth on Schedule 4.01(jj) hereto is a complete and
accurate list of all patents, trademarks, trade names, service marks and
copyrights, and all applications therefor and licenses thereof,
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of each Loan Party or any of its Subsidiaries, showing as of the date
hereof the jurisdiction in which registered, the registration number, the
date of registration and the expiration date.
(kk) The Acquisition has been consummated in all material respects
in accordance with the terms of the Purchase Agreement.
(ll) The Acquisition will not result in an income tax liability to
the Borrower and its Subsidiaries or Affiliates.
(mm) Set forth on Schedule 4.01(a) hereto is a schedule of the
initial capitalization of the Borrower and of the Parent after giving
effect to the transactions contemplated to take place on the Closing Date.
(nn) As of the Closing Date, each of the representations and
warranties made in the Related Documents by each of the parties thereto is
true and correct in all material respects, and such representations and
warranties are hereby incorporated herein by reference with the same
effect as though set forth in their entirety herein, as qualified therein.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, the Borrower will:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable
laws, rules, regulations and orders, such compliance to include, without
limitation, compliance with ERISA and the Racketeer Influenced and Corrupt
Organizations Chapter of the Organized Crime Control Act of 1970.
(b) Payment of Taxes, Etc. (i) Pay and discharge, and cause each of
its Subsidiaries to pay and discharge, before the same shall become
delinquent, (x) all taxes, assessments and governmental charges or levies
imposed upon it or upon its property and (y) all lawful claims that, if
unpaid, might by law become a Lien upon its property, including, without
limitation, the Mortgaged Property and the Leasehold Property; provided,
however, that neither the Borrower nor any of its Subsidiaries shall be
required to pay or discharge any such tax, assessment, charge or claim
that is being contested in good faith and by proper proceedings and as to
which appropriate reserves are being maintained, unless and until any Lien
resulting therefrom attaches to its property and becomes enforceable
against its other creditors; and (ii) (1) pay and discharge, and cause
each of its Subsidiaries to pay and discharge, at or before maturity, all
of their other respective material obligations and liabilities, except
where the same may be the subject of a contest in good faith by
appropriate proceedings promptly instituted and diligently conducted and
with respect to which such reserve or other appropriate provision, if any,
as shall be required in conformity with GAAP shall have been made;
provided that compliance with the obligation that is the subject of such
contest is effectively stayed during such challenge and (2) maintain, and
cause each of its Subsidiaries to maintain, in accordance with GAAP,
appropriate reserves for the accrual of any of such material obligations
and liabilities.
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(c) Compliance with Environmental Laws. Comply, and cause each of
its Subsidiaries and all lessees and other Persons operating or occupying
its properties to comply, in all material respects, with all applicable
Environmental Laws and Environmental Permits; obtain and renew and cause
each of its Subsidiaries to obtain and renew all Environmental Permits
necessary for its operations and properties; and conduct, and cause each
of its Subsidiaries to conduct, any investigation, study, sampling and
testing, and undertake any cleanup, removal, remedial or other action
necessary to remove and clean up all Hazardous Materials from any of its
properties that are required to be removed or cleaned up under applicable
Environmental Laws, in accordance with the requirements of all
Environmental Laws; provided, however, that neither the Borrower nor any
of its Subsidiaries shall be required to undertake any such cleanup,
removal, remedial or other action to the extent that its obligation to do
so is being contested in good faith and by proper proceedings and
appropriate reserves are being maintained with respect to such
circumstances.
(d) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which the Borrower
or such Subsidiary operates, including, without limitation, (i) physical
damage insurance on all real and personal property on an all risks basis
(including the perils of flood and quake), covering the repair and
replacement cost of all such property and consequential loss coverage for
business interruption and extra expense, covering such risks, for amounts
not less than those, and with deductible amounts not greater than those,
set forth in Part I of Schedule 5.01(d), (ii) public liability insurance
(including products/completed operations liability coverage) covering such
risks, for amounts not less than those, and with deductible amounts not
greater than those, set forth in Part II of Schedule 5.01(d), (iii) until
the High Yield Date, any life insurance policy delivered entered into
pursuant to Section 3.01(n)(xvi) and (iv) such other insurance coverage in
such amounts and with respect to such risks as the Required Lenders may
reasonably request in writing; provided that all such insurance shall be
provided by responsible and reputable insurers having an A.M. Best
policyholders rating of not less than B+ or such other insurers as the
Required Lenders may approve in writing.
(e) Preservation of Corporate Existence, Etc. Preserve and maintain,
and cause each of its Subsidiaries to preserve and maintain, its
existence, legal structure, legal name, rights (charter and statutory),
permits, licenses, approvals, privileges and franchises; provided,
however, that neither the Borrower nor any of its Subsidiaries shall be
required to preserve any right, permit, license, approval, privilege or
franchise if the Board of Directors of the Borrower or such Subsidiary
shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Borrower or such Subsidiary, as the
case may be, and that the loss thereof is not disadvantageous in any
material respect to the Borrower, such Subsidiary or the Lender Parties;
provided further that nothing in this Section 5.01(e) shall prevent the
consummation of any merger or consolidation permitted pursuant to Section
5.02(d); provided still further that (i) Continental Acquisition Corp.
shall be permitted to change its legal name to Continental Sprayers
International, Inc. and (ii) the Borrower shall be permitted to change its
legal name, so long as prior to making any such change with respect to the
Borrower (x) the Borrower shall have given the Administrative Agent at
least 10 Business Days' notice and (y) the Borrower shall have complied
with all the requirements set forth in Section 5.01(p) of this Agreement
and Section 10 of the Security Agreement.
(f) Visitation Rights. At any reasonable time and from time to time,
permit the Administrative Agent or any of the Lender Parties or any agents
or representatives thereof to examine and make copies of and abstracts
from the records and books of account of, and visit the properties of, the
Borrower and any of its Subsidiaries, to conduct a collateral audit and
analysis of their respective
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inventories and accounts receivable and to discuss the affairs, finances
and accounts of the Borrower and any of its Subsidiaries with any of their
officers or directors and with their independent certified public
accountants; provided that, after the High Yield Date, any such
examination, making of copies or abstracts, and visits shall be at the
Administrative Agent's or such Lender Party's expense, as the case may be;
provided, however, the Borrower shall only be required to pay the fees,
expenses and disbursements of independent accountants and other experts
retained by the Administrative Agent in connection with not more than two
accounting and collateral audits and reviews of the Borrower and its
affairs during any calendar year.
(g) Preparation of Environmental Reports. At the request of the
Administrative Agent once a year or whenever the Administrative Agent
reasonably believes there is a material risk or whenever there is an
acquisition or sale of property, and, in any event, during the continuance
of an Event of Default, provide to the Lender Parties within 60 days after
such request, at the expense of the Borrower, an environmental site
assessment report for any of its or its Subsidiaries' properties described
in such request, prepared by an environmental consulting firm acceptable
to the Administrative Agent, indicating the presence or absence of
Hazardous Materials and the estimated cost of any compliance, removal or
remedial action in connection with any Hazardous Materials on such
properties; without limiting the generality of the foregoing, if the
Administrative Agent determines at any time that a material risk exists
that any such report will not be provided within the time referred to
above, the Administrative Agent may retain an environmental consulting
firm to prepare such report at the expense of the Borrower, and the
Borrower hereby grants and agrees to cause any Subsidiary that owns any
property described in such request to grant at the time of such request,
to the Administrative Agent, the Lender Parties, such firm and any agents
or representatives thereof an irrevocable non-exclusive license, subject
to the rights of tenants, to enter onto their respective properties to
undertake such an assessment.
(h) Keeping of Books. Keep, and cause each of its Subsidiaries to
keep, proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and
business of the Borrower and each such Subsidiary in accordance with
generally accepted accounting principles in effect from time to time.
(i) Maintenance of Properties, Etc. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all of its properties
that are used or useful in the conduct of its business in good working
order and condition, ordinary wear and tear and surplus properties which
are not necessary to the conduct of business excepted.
(j) Compliance with Terms of Leaseholds. Make all payments and
otherwise perform all obligations in respect of all leases or subleases
(with respect to the real property located in El Paso, Texas only) of real
property to which the Borrower or any of its Subsidiaries is a party, keep
such leases or subleases (with respect to the real property located in El
Paso, Texas, only) in full force and effect and not allow such leases to
lapse or be terminated or any rights to renew such leases to be forfeited
or cancelled, notify the Administrative Agent of any default by any party
with respect to such leases or subleases (with respect to the real
property located in El Paso, Texas only) and cooperate with the
Administrative Agent in all respects to cure any such default, and cause
each of its Subsidiaries to do so except, in any case, where the failure
to do so, either individually or in the aggregate, could not be reasonably
likely to have a Material Adverse Effect.
(k) Performance of Related Documents. Perform and observe all of the
terms and provisions of each Related Document to be performed or observed
by it, maintain each such Related Document in full force and effect,
enforce such Related Document in accordance with its terms, take all
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such action to such end as may be from time to time requested by the
Administrative Agent and, upon request of the Administrative Agent, make
to each other party to each such Related Document such demands and
requests for information and reports or for action as the Borrower is
entitled to make under such Related Document.
(l) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the
Loan Documents with any of their Affiliates on terms that are fair and
reasonable and no less favorable to the Borrower or such Subsidiary than
it would obtain in a comparable arm's-length transaction with a Person not
an Affiliate, except that with respect to all Management Agreements, fees
thereunder shall be payable only so long as immediately before and after
giving effect thereto, no Event of Default shall have occurred and be
continuing and the aggregate amount of salary, fees and other compensation
payable, directly or indirectly, to Ariel Gratch or Yehochai Schneider
under all Employment Contracts and fees payable under all Management
Agreements shall not exceed, in any four fiscal quarter period of the
Borrower commencing prior to the High Yield Date, $500,000, and in any
four fiscal quarter period of the Borrower commencing on or after the High
Yield Date, $1,000,000.
(m) Cash Concentration Accounts. Maintain and cause each Loan Party
to maintain main cash concentration accounts with NationsCredit and
maintain and cause each Loan Party to maintain Pledged Accounts into which
all proceeds of Collateral are paid with NationsCredit or one or more
banks acceptable to the Administrative Agent that have accepted the
assignment of such accounts to the Administrative Agent pursuant to the
terms of the Security Agreement.
(n) Covenant to Guarantee Obligations and Give Security. Upon (x)
the request of the Administrative Agent following the occurrence and
during the continuance of an Event of Default, (y) the formation or
acquisition of any new direct or indirect Subsidiaries by any Loan Party
or (z) the acquisition of any property by any Loan Party, and such
property, in the reasonable opinion of the Administrative Agent, shall not
already be subject to a perfected first priority security interest in
favor of the Administrative Agent for the benefit of the Secured Parties,
then the Borrower shall, in each case at the Borrower's expense:
(i) in connection with the formation or acquisition of a
domestic Subsidiary, and, if an Event of Default shall have occurred
and be continuing, a domestic or foreign Subsidiary, within 10 days
after such formation or acquisition, cause each such Subsidiary, and
cause each direct and indirect parent of such Subsidiary (if it has
not already done so), to duly execute and deliver to the
Administrative Agent a Subsidiary Guaranty, in form and substance
satisfactory to the Administrative Agent, guaranteeing the other
Loan Parties' obligations under the Loan Documents,
(ii) within 10 days after such request, formation or
acquisition, furnish to the Administrative Agent a description of
the real and personal properties of the Loan Parties and their
respective Subsidiaries in detail satisfactory to the Administrative
Agent,
(iii) within 15 days after such request, formation or
acquisition, duly execute and deliver, and cause each such
Subsidiary and each direct and indirect parent of such Subsidiary
(if it has not already done so) to duly execute and deliver, to the
Administrative Agent mortgages, pledges, assignments and other
security agreements, as specified by and in form and substance
satisfactory to the Administrative Agent, securing payment of all
the obligations of the
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applicable Loan Party, such Subsidiary or such parent, as the case
may be, under the Loan Documents and constituting Liens on all such
properties,
(iv) within 30 days after such request, formation or
acquisition, take, and cause such Subsidiary or such parent to take,
whatever action (including, without limitation, the recording of
mortgages, the filing of Uniform Commercial Code financing
statements, the giving of notices and the endorsement of notices on
title documents) may be necessary or advisable in the opinion of the
Administrative Agent to vest in the Administrative Agent (or in any
representative of the Administrative Agent designated by it) valid
and subsisting Liens on the properties purported to be subject to
the mortgages, pledges, assignments and security agreements
delivered pursuant to this Section 5.01(n), enforceable against all
third parties in accordance with their terms,
(v) within 60 days after such request, formation or
acquisition, deliver to the Administrative Agent, upon the request
of the Administrative Agent in its sole discretion, a signed copy of
a favorable opinion, addressed to the Administrative Agent and the
other Secured Parties, of counsel for the Loan Parties acceptable to
the Administrative Agent as to the matters contained in clauses (i),
(iii) and (iv) above, as to such guaranties, mortgages, pledges,
assignments and security agreements being legal, valid and binding
obligations of each party thereto enforceable in accordance with
their terms and as to such other matters as the Administrative Agent
may reasonably request,
(vi) as promptly as practicable after such request, formation
or acquisition, deliver, upon the request of the Administrative
Agent in its sole discretion, to the Administrative Agent with
respect to each parcel of real property owned or held by the entity
that is the subject of such request, formation or acquisition
surveys and engineering, soils and other reports, and environmental
assessment reports, title reports, each in scope, form and substance
satisfactory to the Administrative Agent, provided, however, that to
the extent that any Loan Party or any of its Subsidiaries shall have
otherwise received any of the foregoing items with respect to such
real property, such items shall promptly after the receipt thereof
be delivered to the Administrative Agent,
(vii) upon the occurrence and during the continuance of an
Event of Default, promptly cause to be deposited any and all cash
dividends paid or payable to it or any of its Subsidiaries from any
of its Subsidiaries from time to time into the Cash Collateral
Account, and with respect to all other dividends paid or payable to
it or any of its Subsidiaries from time to time, promptly execute
and deliver, or cause such Subsidiary to promptly execute and
deliver, as the case may be, any and all further instruments and
take or cause such Subsidiary to take, as the case may be, all such
other action as the Administrative Agent may deem necessary or
desirable in order to obtain and maintain from and after the time
such dividend is paid or payable a perfected, first priority lien on
and security interest in such dividends, and
(viii)at any time and from time to time, promptly execute and
deliver any and all further instruments and documents and take all
such other action as the Administrative Agent may deem necessary or
desirable in obtaining the full benefits of, or in perfecting and
preserving the Liens of, such guaranties, mortgages, pledges,
assignments and security agreements.
(o) Conditions Subsequent to Initial Extension of Credit. (i)
Deliver to the Administrative Agent as soon as possible and in any event
within the earlier of the Bridge Repayment Date and 45 days
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after the Initial Extension of Credit (or such later date as may be agreed
by the Borrower and the Administrative Agent or as may be specified
herein):
(A) acknowledgement copies of proper financing statements,
duly filed under the Uniform Commercial Code of all jurisdictions
that the Administrative Agent may deem necessary or desirable in
order to perfect and protect the first priority liens and security
interests created under the Collateral Documents, covering the
Collateral described therein,
(B) evidence that counterparts of the Mortgages have been duly
recorded on or before the day of the Initial Extension of Credit in
all filing or recording offices that the Administrative Agent may
deem necessary or desirable in order to create a valid first and
subsisting Lien on the property described therein in favor of the
Secured Parties and that all filing and recording taxes and fees
have been paid,
(C) evidence of the completion of all other recordings and
filings of or with respect to the Security Agreement that the
Administrative Agent may deem necessary or desirable in order to
perfect and protect the Liens created thereby,
(D) the Pledged Account Letters referred to in the Security
Agreement, duly executed by each Pledged Account Bank referred to in
the Security Agreement, and
(E) evidence that counterparts of the Intellectual Property
Security Agreement have been duly recorded in such recording offices
as the Administrative Agent may deem necessary or desirable in order
to create a valid first and subsidiary lien on the property
described therein in favor of the Secured Parties and that all
filing and recording taxes and fees have been paid.
(ii) Deliver to the Collateral Agent within 15 days (or such
later date as may be agreed upon by Borrower and the Administrative
Agent) after the Seller has assigned its interest in the property
specified on Schedule 5.01(o)(ii) hereto to Borrower, (a) a deed of
trust, trust deed, mortgage, leasehold mortgage or leasehold deed of
trust, in form and substance satisfactory to the Administrative
Agent, covering such property, (b) to the extent applicable, all of
the items specified in Section 3.01(n)(x) clauses (A) through (G)
and (c) a favorable opinion from the local counsel to the Lender
Parties in each of the jurisdictions in which such property is
located, in form and substance satisfactory to the Lender Parties.
(iii) Deliver to the Administrative Agent as soon as possible
and in any event within 60 days after the Initial Extension of
Credit (or such later date as may be agreed by the Borrower and the
Administrative Agent) completed requests for information, listing
the financing statements referred to in clause (i) (A) above and all
other effective financing statements filed in the jurisdictions
referred to in clause (i) (A) above that name the Borrower or any
other Loan Party as debtor, together with copies of such financing
statements.
(iv) Deliver to the Administrative Agent as soon as possible
and in any event within 15 days after the Initial Extension of
Credit (or such later date as may be agreed by the Borrower and the
Administrative Agent), certified copies of duly executed proxies as
to (A) voting control by Yehochai Schneider of the common stock of
the Parent held by Waldock Limited and (B) voting control by Ariel
Gratch of the common stock of the Parent held by AFA International
Limited,
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(v) Deliver to the Administrative Agent promptly after the
date of execution thereof by all parties thereto, the Refinancing
Agreement which shall be, as of such date, in form and substance
reasonably satisfactory to the Required Lenders.
(p) Further Assurances. Promptly upon the request of the
Administrative Agent, or any of the Lender Parties through the
Administrative Agent, at any time and from time to time, do, execute,
acknowledge, deliver, record, rerecord, file, refile, register and
reregister, and cause of each of its Subsidiaries promptly to do, execute,
acknowledge, deliver, rerecord, record, file, refile, register and
reregister, any and all further acts, conveyances, security agreements,
assignments, floating and fixed debentures, pledge agreements, estoppel
certificates, financing statements and continuations thereof, termination
statements, notices of assignment, transfers, mortgages, deeds of trust,
certificates, assurances and other instruments as the Administration
Agent, or any of the Lender Parties through the Administrative Agent, may
reasonably require from time to time in order to (A) carry out more
effectively the purposes of this Agreement, the Notes or any of the other
Loan Documents, (B) subject any of the property, assets, rights or
interests of the Borrower or any of its Subsidiaries (other than, solely
for purposes of this Section 5.01(p), Afa Polytek B.V.) included or
intended to be included in the Collateral to the Liens created or now or
hereafter intended to be created under any of the Collateral Documents,
(C) perfect and maintain the validity, effectiveness and priority of any
of the Collateral Documents or any of the Liens created or intended to be
created thereunder and (D) assure, convey, grant, assign, transfer,
preserve, protect and confirm more effectively unto the Administrative
Agent and the Secured Parties the rights granted or now or hereafter
intended to be granted to the Administrative Agent and the Secured Parties
under any of the Loan Documents or under any of the other instruments
executed in connection with any of the Loan Documents to which the
Borrower or any of its domestic Subsidiaries is or is to be a party.
(q) Refinancing. Use its best efforts to effectuate an offering and
sale of the Refinancing Securities to Persons other than any of its
Subsidiaries or such other financing transactions, in each case reasonably
acceptable in form and substance to the Administrative Agent for the
purpose of repaying the principal amount of Bridge Advances and paying
interest accrued thereon and all fees, expenses, commissions and other
amounts payable with respect thereto by the Loan Parties under the Loan
Documents and in connection with the Refinancing, which will yield an
amount sufficient to repay the principal amount of Bridge Advances and pay
all interest accrued thereon and all fees, expenses, commissions and all
other amounts payable with respect thereto by the Loan Parties under the
Loan Documents and in connection with the Refinancing, including, but not
limited to:
(i) preparing an offering memorandum (the "Offering
Memorandum") for a private offering (the "Offering") of the
Refinancing Securities, such Refinancing Securities to contain terms
and conditions satisfactory to NMS (or another underwriter
reasonably satisfactory to the Lender Parties) and the Required
Lenders, and be issued pursuant to a Refinancing Agreement in form
and substance satisfactory to the Required Lenders, in an amount to
be agreed upon by the Borrower and NMS (or another underwriter
reasonably satisfactory to the Administrative Agent), but in no
event less than an amount which will provide to the Borrower net
proceeds sufficient to repay the principal amount of Bridge Advances
and pay all interest accrued thereon and all fees, expenses,
commissions and all other amounts payable with respect thereto by
the Loan Parties under the Loan Documents and in connection with the
Refinancing, and containing such disclosures as may be appropriate
and customary for such documents and using its best efforts to
consummate the Offering as soon as practicable after the date
hereof;
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(ii) in the event that the Offering is not consummated, in
connection with any other public offering or private placement of
the Refinancing Securities, promptly preparing a registration
statement or offering memorandum containing such disclosures as may
be appropriate and customary for such documents, and using its best
efforts to cause any such registration statement to become effective
under the Securities Act of 1933, as amended;
(iii) cooperating fully with NMS (or another underwriter
reasonably satisfactory to the Administrative Agent) and providing
all information reasonably requested thereby in connection with any
refinancing pursuant to this Section 5.01(q), including, without
limitation, providing all information reasonably requested thereby
to effect the sale or placement of any Refinancing Securities to be
offered;
(iv) in the event any Refinancing Securities are offered
publicly, executing underwriting agreements, to reflect the terms of
the refinancing, and containing covenants, representations and
warranties, indemnities and delivery of legal opinions, officers'
certificates and accountants' comfort letters, all in form and
substance satisfactory to NMS (or another underwriter reasonably
satisfactory to the Administrative Agent) in its reasonable
judgment;
(v) in connection with any public offering or private
placement of debt or equity securities (including the Offering),
offering such securities on terms, including, but not limited to,
interest and/or dividend rates, maturities, preferences, covenants
and redemption dates and prices, which will be determined by NMS (or
another underwriter reasonably satisfactory to the Administrative
Agent) in its reasonable judgment, in light of prevailing
circumstances and current market conditions and the Borrower's
financial condition and prospects;
(vi) (A) in connection with any private placement of debt
securities (including the Offering), filing and causing to become
effective a registration statement (within such periods of time as
NMS (or another underwriter reasonably satisfactory to the
Administrative Agent) may reasonably request prior to such private
placement) with respect to a registered offer to exchange (an
"Exchange Offer") any such privately placed debt securities for
notes of the Borrower with terms identical in all material respects
(the "Exchange Notes") to such privately placed debt securities
(except that the Exchange Notes will not contain terms with respect
to transfer restrictions or interest rate increases), and causing
such Exchange Offer to be consummated within such period of time as
NMS (or another underwriter reasonably satisfactory to the
Administrative Agent) may reasonably request prior to such period of
time; and (B) in the event any debt or equity securities are sold in
a private placement, causing the debt or equity securities held by
the purchasers (including NMS (or another underwriter reasonably
satisfactory to the Administrative Agent)) in such a private
placement to be registered pursuant to such number of registration
statements over such period of time as NMS (or another underwriter
reasonably satisfactory to the Administrative Agent) may reasonably
request prior to such private placement;
(vii) paying all reasonable costs and expenses of engaging a
qualified independent underwriter in connection with any public
offering and, to the extent necessary, a private placement of
Refinancing Securities;
(viii) in the event any Refinancing Securities are offered
publicly or sold in a private placement, upon a request made by NMS
(or another underwriter reasonably satisfactory to the
Administrative Agent) in its sole discretion, making available for
sale, and selling with any such
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sale of debt or equity securities, the terms of which will be
determined by NMS (or another underwriter reasonably satisfactory to
the Administrative Agent) in its reasonable judgment, in light of
prevailing circumstances and current market conditions and the
Borrower's financial condition and prospects;
(ix) assisting NMS (or another underwriter reasonably
satisfactory to the Administrative Agent) in connection with the
marketing of any Refinancing Securities to be offered publicly or
placed privately;
(x) providing such other cooperation and assistance as is
customarily provided by issuers in connection with the private
placement and/or public sale of securities;
(xi) cooperating fully with NMS (or another underwriter
reasonably satisfactory to the Administrative Agent), and providing
all information reasonably requested by NMS (or another underwriter
reasonably satisfactory to the Administrative Agent), in connection
with other financing transactions on terms which will be determined
by NMS (or another underwriter reasonably satisfactory to the
Administrative Agent) in its reasonable judgment, in light of
prevailing circumstances and current market conditions and the
Borrower's financial condition and prospects; and
(xii) in the event of any such other financing transaction,
executing such documentation as may be necessary, and containing
covenants, representations and warranties, indemnities and delivery
of legal opinions, officers' certificates and accountants' comfort
letters, all in form and substance satisfactory to NMS (or another
underwriter reasonably satisfactory to the Administrative Agent) in
its reasonable judgment.
(r) Hedge Agreements. If the Bridge Repayment Date shall not have
occurred within 90 days from the Closing Date, enter into an interest rate
Hedge Agreement in form and substance satisfactory to the Administrative
Agent.
(s) Non-Compete Agreements. Preserve, protect and defend, to the
extent permitted by applicable law, all of its rights, if any, with
respect to any covenant not to compete contained in any contract of the
Borrower and its Subsidiaries or contained in any employment agreement
with any employee whose annual salary and other compensation payable by
the Borrower and its Subsidiaries is $150,000 or more.
(t) Intercreditor Arrangements. Deliver (or in the case of clauses
(A) and (B) below, use its best efforts to deliver) to the Administrative
Agent as soon as possible and in any event within 30 days after the
Initial Extension of Credit (or such later date as may be agreed by the
Borrower and the Administrative Agent):
(A) An intercreditor agreement between the Administrative
Agent and ABN Amro Bank N.V. in form and substance satisfactory to
the Administrative Agent (as amended, supplemented or otherwise
modified from time to time, in accordance with its terms, the
"Intercreditor Agreement");
(B) A consent letter from ABN Amro Bank N.V. to the
Administrative Agent consenting to the execution, delivery and
performance of the Loan Documents and the consummation of the
transactions contemplated thereby, in form and substance
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satisfactory to the Administrative Agent (as amended, supplemented
or otherwise modified from time to time, the "Consent Letter");
(C) A pledge of the stock of Afa Polytek, B.V. (subject to the
limitations set forth in the Security Agreement) from the Borrower
under New York law and the law of the Netherlands, in form and
substance satisfactory to the Administrative Agent (such pledge or
pledges, and together with any other pledges delivered with respect
to foreign subsidiaries, in each case together with all agreements
and instruments delivered in connection therewith, and in each case
as amended, supplemented or otherwise modified from time to time in
accordance with its terms, the "Pledge Agreement");
(D) A favorable opinion from Netherlands counsel to the Lender
Parties as to the perfection of the Collateral Agent's security
interest in any Collateral located in the Netherlands and as to such
other matters as the Administrative Agent may require, in each case
in form and substance satisfactory to the Administrative Agent;
provided, however, that if any of the Intercreditor Agreement, the Consent
Letter, the Pledge Agreement or the opinion referred to in Section
5.01(t)(C) above are not delivered to the Administrative Agent within the
period specified therein, the Borrower shall, at the request of the
Administrative Agent at any time thereafter, within 5 Business Days after
such request, cause all amounts owing by it under the Polytek Agreement to
be prepaid or repaid in full and, in the event that such prepayment or
repayment is financed, such financing shall be on terms and conditions
satisfactory to the Administrative Agent.
SECTION 5.02. Negative Covenants. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, the Borrower will not, at any time:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any
Lien on or with respect to any of its properties of any character
(including, without limitation, accounts) whether now owned or hereafter
acquired, or sign or file or suffer to exist, or permit any of its
Subsidiaries to sign or file or suffer to exist, under the Uniform
Commercial Code of any jurisdiction, a financing statement that names the
Borrower or any of its Subsidiaries as debtor, or sign or suffer to exist,
or permit any of its Subsidiaries to sign or suffer to exist, any security
agreement authorizing any secured party thereunder to file such financing
statement, or assign, or permit any of its Subsidiaries to assign, any
accounts or other right to receive income, excluding, however, from the
operation of the foregoing restrictions the following:
(i) Liens created under the Loan Documents;
(ii) Liens existing on the date hereof and described on
Schedule 5.02(a) hereto;
(iii) purchase money Liens upon or in real property or
equipment acquired or held by the Borrower or any of its
Subsidiaries in the ordinary course of business to secure the
purchase price of such property or equipment or to secure Debt
incurred solely for the purpose of financing the acquisition of any
such property or equipment to be subject to such Liens, or Liens
existing on any such property or equipment at the time of
acquisition (other than any such Liens created in contemplation of
such acquisition that do not secure the purchase price), or
extensions, renewals or replacements of any of the foregoing for the
same or a lesser amount; provided, however, that no such Lien shall
extend to or cover any property other than the
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property or equipment being acquired, and no such extension, renewal
or replacement shall extend to or cover any property not theretofore
subject to the Lien being extended, renewed or replaced; and
provided further that the aggregate principal amount of the Debt
secured by Liens permitted by this clause (iv) shall not exceed the
amount permitted under Section 5.02(b)(iii)(B) at any time
outstanding and that any such Debt shall not otherwise be prohibited
by the terms of the Loan Documents;
(iv) Liens arising in connection with Capitalized Leases
permitted under Section 5.02(b)(iii)(C); provided that no such Lien
shall extend to or cover any Collateral or assets other than the
assets subject to such Capitalized Leases;
(v) the replacement, extension or renewal of any Lien
permitted by clause (ii) above upon or in the same property
theretofore subject thereto or the replacement, extension or renewal
(without increase in the amount or change in any direct or
contingent obligor) of the Debt secured thereby; and
(vi) other Liens arising in the ordinary course of business
which (A) do not secure Debt, (B) do not secure any Obligation in an
amount exceeding $50,000, and (C) do not in the aggregate materially
detract from the value of its assets or materially impair the use
thereof in the operation of its business.
(b) Debt. Create, incur, assume or suffer to exist, or permit any of
its Subsidiaries to create, incur, assume or suffer to exist, any Debt
other than:
(i) in the case of the Borrower,
(A) the Refinancing Securities, and
(B) Debt consisting of Hedge Agreements entered into
pursuant to Section 5.01(r),
(ii) in the case of any of the Subsidiary Guarantors,
(A) Debt owed to the Borrower or to another Subsidiary
Guarantor, provided that (x) such Debt is subordinated to any
Debt of such Subsidiary Guarantor under the Loan Documents on
terms and conditions acceptable to the Required Lenders and
(y) such Debt is evidenced by a promissory note and such
promissory note is pledged in favor of the Secured Parties
pursuant to the terms of the Security Agreement, and
(B) Debt of Subsidiary Guarantors consisting of
subordinated guaranties of the Refinancing Securities,
provided that the subordination terms thereof shall be
satisfactory to the Required Lenders; and
(iii) in the case of the Borrower and all its Subsidiaries,
(A) Debt under the Loan Documents,
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(B) Debt of the Borrower and its Subsidiaries secured by
Liens permitted by Section 5.02(a)(iii) not to exceed in the
aggregate $1,000,000 at any time outstanding,
(C) Capitalized Leases entered into by the Borrower and
its Subsidiaries not to exceed in the aggregate $1,000,000 at
any time outstanding,
(D) the Surviving Debt,
(E) endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of
business.
(F) any Debt in connection with the financing permitted
under the proviso to Section 5.01(t).
(c) Lease Obligations. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any obligations as lessee (i) for the rental or hire of real or
personal property in connection with any sale and leaseback transaction,
or (ii) for the rental or hire of other real or personal property of any
kind under leases or agreements to lease including Capitalized Leases
having an original term of one year or more that would cause the direct
and contingent liabilities of the Borrower and its Subsidiaries, on a
Consolidated basis, in respect of all such obligations to exceed $800,000
payable in any period of 12 consecutive months; provided, however, that
after the High Yield Date, the Loan Parties may lease Equipment (as
defined in the Security Agreement) to one another on an arm's length basis
and in the ordinary course of business; provided further that after the
High Yield Date any Subsidiary of the Borrower that is not a Loan Party
may lease Equipment which is not Collateral to any other such Subsidiary.
(d) Mergers, Etc. Merge into or consolidate with any Person or
permit any Person to merge into it, or permit any of its Subsidiaries to
do so, except that (i) any Subsidiary Guarantor may merge into or
consolidate with any other Subsidiary Guarantor, (ii) any other Subsidiary
may merge into or consolidate with any other Subsidiary and (iii) any
Subsidiary of the Borrower may merge into any Subsidiary Guarantor,
provided that such Subsidiary Guarantor is the surviving corporation;
provided, however, that in each case, immediately after giving effect
thereto, no event shall occur and be continuing that constitutes a
Default.
(e) Sales, Etc., of Assets. Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, transfer or
otherwise dispose of, any assets, or grant any option or other right to
purchase, lease or otherwise acquire any assets other than Inventory to be
sold in the ordinary course of its business, except:
(i) sales of Inventory in the ordinary course of its business,
(ii) in a transaction authorized by Section 5.02(d),
(iii) sales of assets for cash and for fair value which the
Board of Directors of the Borrower or Subsidiary selling such assets
determines in good faith are no longer useful to its business in an
aggregate amount not to exceed $200,000 in any Fiscal Year, provided
that in the case of sales of assets pursuant to this clause (iii),
the Borrower shall, on the date of receipt by the Borrower or any of
its Subsidiaries of the Net Cash Proceeds from such sale, prepay the
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Advances pursuant to, and in the amount and order of priority set
forth in, Section 2.06(b)(ii), as specified therein, except, in the
case of sales occurring after the Bridge Repayment Date, to the
extent the Net Cash Proceeds from such sale are used to purchase
like assets within 6 months after receipt of such Net Cash Proceeds,
(iv) after the High Yield Date, transfers of assets among the
Loan Parties on an arm's length basis and in the ordinary course of
business; and
(v) leases permitted pursuant to the proviso of Section
5.02(c).
(f) Investments in Other Persons. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment in any Person other than:
(i) Investments by the Borrower and the Subsidiary Guarantors
in wholly-owned Subsidiaries in an aggregate amount not to exceed
$200,000, provided that, with respect to Investments in any newly
acquired or created wholly-owned Subsidiary, such Subsidiary (x)
shall become a Loan Party as required by Section 5.01(n) and (y)
shall engage in a business similar to that engaged in by the
Borrower and its Subsidiaries on the date hereof;
(ii) Investments by the Borrower and its Subsidiaries in Cash
Equivalents;
(iii) Investments consisting of intercompany Debt permitted
under Section 5.02(b)(ii)(A);
(iv) Investments by the Borrower in the Hedge Agreements
permitted under Section 5.02(b)(i)(B); and
(v) after the High Yield Date, other Investments in an
aggregate amount invested not to exceed at any time outstanding
$1,000,000; provided that with respect to Investments made under
this clause (v): (1) any newly acquired or created Subsidiary of the
Borrower or any of its Subsidiaries shall be a wholly-owned
Subsidiary thereof; (2) immediately before and after giving effect
thereto, no Default shall have occurred and be continuing or would
result therefrom; (3) any business acquired or invested in pursuant
to this clause (v) shall be in the same line of business as the
business of the Borrower or any of its Subsidiaries.
(g) Dividends, Etc. Declare or pay any dividends, purchase, redeem,
retire, defease or otherwise acquire for value any of its capital stock or
any warrants, rights or options to acquire such capital stock, now or
hereafter outstanding, return any capital to its stockholders as such,
make any distribution of assets, capital stock, warrants, rights, options,
obligations or securities to its stockholders as such or issue or sell any
capital stock or any warrants, rights or options to acquire such capital
stock, or permit any of its Subsidiaries to do any of the foregoing or
permit any of its Subsidiaries to purchase, redeem, retire, defease or
otherwise acquire for value any capital stock of the Borrower or any
warrants, rights or options to acquire such capital stock or to issue or
sell any capital stock or any warrants, rights or options to acquire such
capital stock, except that, so long as no Default shall have occurred and
be continuing at the time of any action described in clauses (i) through
(v) below or would result therefrom, (i) any Subsidiary of the Borrower
may (A) declare and pay cash dividends to the Borrower and (B) declare and
pay cash dividends to any other wholly-owned Subsidiary of the Borrower of
which it is a Subsidiary; (ii) the Borrower may make Permitted Payments;
(iii) after the High Yield Date, the Borrower may declare and pay cash
dividends to the Parent solely when and as necessary to permit the
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Parent to purchase or redeem shares of its capital stock from members of
management of the Loan Parties upon their death, retirement or termination
so long as the aggregate amount of such payment does not exceed $250,000
in any Fiscal Year; (iv) after the Bridge Repayment Date, with the consent
of the Required Lenders, the Borrower may declare and pay dividends to the
Parent solely when and to the extent necessary to permit the Parent to
redeem its warrants issued in connection with the First Warrant Agreement
or the Second Warrant Agreement; (v) after the High Yield Date, the
Borrower may declare and pay cash dividends to the Parent solely when and
to the extent necessary to permit the Parent to prepay all or a portion of
the principal of, and interest on, the Subordinated Notes in accordance
with the terms thereof in an amount not to exceed 50% of the Excess Cash
Flow for the immediately preceding Fiscal Year; and (vi) after the High
Yield Date, if the Subordinated Notes shall have been paid in full, the
Borrower may declare and pay cash dividends to the Parent in an amount not
to exceed 50% of the Excess Cash Flow for the immediately preceding Fiscal
Year.
(h) Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its business as
carried on at the date hereof.
(i) Constitutive Document Amendments. Amend, or permit any of its
Subsidiaries to amend, its Constitutive Documents, except to the extent
required in connection with any change of legal name permitted under
Section 5.01(e).
(j) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in (i) accounting policies or
reporting practices, except as required or permitted by generally accepted
accounting principles or (ii) Fiscal Year.
(k) Prepayments, Etc., of Debt. Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner,
or make any payment in violation of any subordination terms of, any Debt,
other than (i) the prepayment of the Advances in accordance with the terms
of this Agreement, (ii) regularly scheduled or required repayments or
redemptions of Surviving Debt and (iii) any repayment or prepayment of
amounts owing by Afa Polytek B.V. under the Polytek Agreement required
pursuant to the proviso to Section 5.01(t), or amend, modify or change in
any manner any term or condition of any Surviving Debt or permit any of
its Subsidiaries to do any of the foregoing other than to prepay any Debt
payable to the Borrower.
(l) Amendment, Etc., of Related Documents. Cancel or terminate any
Related Document or consent to or accept any cancellation or termination
thereof, amend, modify or change in any manner any term or condition of
any Related Document or give any consent, waiver or approval thereunder,
waive any default under or any breach of any term or condition of any
Related Document, agree in any manner to any other amendment, modification
or change of any term or condition of any Related Document or take any
other action in connection with any Related Document that would impair the
value of the interest or rights of the Borrower thereunder or that would
impair the rights or interests of the Administrative Agent or any Lender
Party, or permit any of its Subsidiaries to do any of the foregoing,
except, in each case, as required pursuant to the proviso to Section
5.01(t).
(m) Negative Pledge. Enter into or suffer to exist, or permit any of
its Subsidiaries to enter into or suffer to exist, any agreement
prohibiting or conditioning the creation or assumption of any Lien upon
any of its property or assets other than (i) in favor of the Secured
Parties or (ii) in connection with any Surviving Debt.
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(n) Partnerships, Etc. Become a general partner in any general or
limited partnership or joint venture, or permit any of its Subsidiaries to
do so.
(o) Speculative Transactions. Engage, or permit any of its
Subsidiaries to engage, in any transaction involving commodity options or
futures contracts or any similar speculative transactions (including,
without limitation, take-or-pay contracts).
(p) Capital Expenditures. Make, or permit any of its Subsidiaries to
make, any Capital Expenditures that would cause the aggregate of all such
Capital Expenditures made by the Borrower and its Subsidiaries in any
Fiscal Year to exceed (i) in the case of any Fiscal Year commencing prior
to the High Yield Date, for each Fiscal Year set forth below the dollar
amount set forth opposite each such Fiscal Year:
Fiscal Year Amount
ending on ------
----------
December 31, 1998 $12,000,000
December 31, 1999 $10,000,000
December 31, 2000 $7,000,000
December 31, 2001 $5,000,000
December 31, 2002
and each Fiscal Year
thereafter $5,000,000
and (ii) in the case of any Fiscal Year commencing on or after the High
Yield Date, $12,000,000 in any such Fiscal Year.
(q) Performance of All Agreements. Breach or permit any of its
Subsidiaries to breach, in any material respect, or permit to exist any
material default under, the terms of any lease, commitment, contract,
instrument or obligation to which it is a party, or by which its
properties or assets are bound.
(r) Employment Contracts. (i) Enter into, or permit any of its
Subsidiaries to enter into, any Employment Contract other than on terms
and conditions satisfactory to the Administrative Agent, and (ii) permit,
or permit any of its Subsidiaries, to, directly or indirectly, pay or
become obligated to pay, any compensation for services in any form to or
for the account of Ariel Gratch, Peter D. Mancuso, Bill Driggers and James
A. Wantuch, except as expressly provided in the Employment Contracts.
(s) Owner Fees. (i) Permit, or permit any of its Subsidiaries to,
directly or indirectly, pay or become obligated to pay any fees or other
amounts to or for the account of any Owner except, so long as no Default
is then continuing or would result therefrom, pursuant to the Management
Agreements; or (ii) permit, or permit any of its Subsidiaries to, directly
or indirectly, pay or become obligated to pay any compensation, fees,
salary or any other such amount, to Ariel Gratch and Yehochai Schneider,
in excess of the amounts permitted to be paid therefor pursuant to Section
5.01(l).
(t) Management Agreements. Enter into, or permit any of its
Subsidiaries to enter into, any management agreement with any Person,
including, without limitation, any Owner, other than on terms and
conditions, and pursuant to an agreement in form and substance,
satisfactory to the Administrative Agent (each such agreement, as amended,
supplemented or otherwise modified from time to time being a "Management
Agreement"), provided, however, that in no event shall the aggregate
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amount of fees and other amounts payable to all such Persons under all
such Management Agreements exceed the amounts permitted to be paid
therefor pursuant to Section 5.01(l).
SECTION 5.03. Reporting Requirements. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, the Borrower will furnish to the Lender
Parties:
(a) Default Notice. As soon as possible and in any event within two
days after the occurrence of each Default or any event, development or
occurrence that is reasonably likely to have a Material Adverse Effect
continuing on the date of such statement, a statement of the chief
financial officer of the Borrower setting forth details of such Default
and the action that the Borrower has taken and proposes to take with
respect thereto.
(b) Monthly Financials. As soon as available and in any event within
30 days after the end of each month, a Consolidated balance sheet of the
Borrower and its Subsidiaries as of the end of such month and Consolidated
statements of income and a Consolidated statement of cash flows of the
Borrower and its Subsidiaries for the period commencing at the end of the
previous month and ending with the end of such month and Consolidated
statements of income and a Consolidated statement of cash flows of the
Borrower and its Subsidiaries for the period commencing at the end of the
previous Fiscal Year and ending with the end of such month, setting forth
in each case in comparative form the corresponding figures for the
corresponding month of the preceding Fiscal Year, all in reasonable detail
and duly certified by the chief financial officer of the Borrower.
(c) Quarterly Financials. As soon as available and in any event
within 45 days after the end of each of the first three quarters of each
Fiscal Year, Consolidated and consolidating balance sheets of the Borrower
and its Subsidiaries as of the end of such quarter and Consolidated and
consolidating statements of income and a Consolidated statement of cash
flows of the Borrower and its Subsidiaries for the period commencing at
the end of the previous fiscal quarter and ending with the end of such
fiscal quarter and Consolidated and consolidating statements of income and
a Consolidated statement of cash flows of the Borrower and its
Subsidiaries for the period commencing at the end of the previous Fiscal
Year and ending with the end of such quarter, setting forth in each case
in comparative form the corresponding figures for the corresponding period
of the preceding Fiscal Year (which financial statements, in the case of
the financial statements for the fiscal quarter ended March 31, 1998,
shall have received an SAS 71 review from Coopers & Lybrand or other
independent public accountants of recognized standing acceptable to the
Required Lenders), all in reasonable detail and duly certified (subject to
year-end audit adjustments) by the chief financial officer of the Borrower
as having been prepared in accordance with GAAP, together with (i) a
certificate of said officer stating that no Default has occurred and is
continuing or, if a Default has occurred and is continuing, a statement as
to the nature thereof and the action that the Borrower has taken and
proposes to take with respect thereto and (ii) a schedule in form
satisfactory to the Administrative Agent of the computations used by the
Borrower in determining compliance with the covenants contained in
Sections 5.04(a) through (c), provided that in the event of any change in
GAAP used in the preparation of such financial statements, the Borrower
shall also provide, if necessary for the determination of compliance with
Section 5.04, a statement of reconciliation conforming such financial
statements to GAAP.
(d) Annual Financials. (i) As soon as available and in any event
within 90 days after the end of each Fiscal Year, a copy of the annual
audit report for such year for the Borrower and its Subsidiaries,
including therein Consolidated and consolidating balance sheets of the
Borrower and its Subsidiaries as of the end of such Fiscal Year and
Consolidated and consolidating statements of income
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and a Consolidated statement of cash flows of the Borrower and its
Subsidiaries for such Fiscal Year, in each case accompanied by an opinion
acceptable to the Administrative Agent of Coopers & Lybrand or other
independent public accountants of recognized standing acceptable to the
Required Lenders, together with (A) a certificate of such accounting firm
to the Lender Parties stating that in the course of the regular audit of
the business of the Borrower and its Subsidiaries, which audit was
conducted by such accounting firm in accordance with generally accepted
auditing standards, such accounting firm has obtained no knowledge that a
Default has occurred and is continuing, or if, in the opinion of such
accounting firm, a Default has occurred and is continuing, a statement as
to the nature thereof, (B) a schedule in form satisfactory to the
Administrative Agent of the computations used by such accountants in
determining, as of the end of such Fiscal Year, compliance with the
covenants contained in Sections 5.04(a) through (c), provided that in the
event of any change in GAAP used in the preparation of such financial
statements, the Borrower shall also provide, if necessary for the
determination of compliance with Section 5.04, a statement of
reconciliation conforming such financial statements to GAAP and (C) a
certificate of the chief financial officer of the Borrower stating that no
Default has occurred and is continuing or, if a default has occurred and
is continuing, a statement as to the nature thereof and the action that
the Borrower has taken and proposes to take with respect thereto and (ii)
as soon as available and in any event within 90 days after the end of the
Fiscal Year ending on December 31, 1997, a certified copy of the pro forma
Consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries (after giving effect to the Acquisition and the other
transactions contemplated by the Loan Documents) as of the end of such
Fiscal Year and pro forma Consolidated and consolidating statements of
income and a pro forma Consolidated statement of cash flows of the
Borrower and its Subsidiaries for such Fiscal Year, as such balance sheets
and statements of income and cash flows will be included in any offering
memorandum prepared in connection with any Refinancing.
(e) Annual Forecasts. As soon as available and in any event no later
than 30 days after the end of each Fiscal Year, forecasts prepared by
management of the Borrower, in form satisfactory to the Administrative
Agent, of balance sheets, income statements and cash flow statements on a
monthly basis for the first Fiscal Year following the date of the Initial
Extension of Credit and on a quarterly basis for each Fiscal Year
thereafter.
(f) ERISA Events and ERISA Reports. Promptly and in any event within
10 days after any Loan Party or any ERISA Affiliate knows or has reason to
know that any ERISA Event has occurred, a statement of the chief financial
officer of the Borrower describing such ERISA Event and the action, if
any, that such Loan Party or such ERISA Affiliate has taken and proposes
to take with respect thereto and on the date any records, documents or
other information must be furnished to the PBGC with respect to any Plan
pursuant to Section 4010 of ERISA, a copy of such records, documents and
information.
(g) Plan Terminations. Promptly and in any event within three
Business Days after receipt thereof by any Loan Party or any ERISA
Affiliate, copies of each notice from the PBGC stating its intention to
terminate any Plan or to have a trustee appointed to administer any Plan.
(h) Plan Annual Reports. Promptly and in any event within 30 days
after the filing thereof with the Internal Revenue Service, copies of each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
with respect to each Plan.
(i) Multiemployer Plan Notices. Promptly and in any event within
five Business Days after receipt thereof by any Loan Party or any ERISA
Affiliate from the sponsor of a Multiemployer Plan, copies of each notice
concerning (i) the imposition of Withdrawal Liability by any such
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Multiemployer Plan, (ii) the reorganization or termination, within the
meaning of Title IV of ERISA, of any such Multiemployer Plan or (iii) the
amount of liability incurred, or that may be incurred, by such Loan Party
or any ERISA Affiliate in connection with any event described in clause
(i) or (ii).
(j) Litigation. Promptly after the commencement thereof, notice of
all actions, suits, investigations, litigation and proceedings before any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting any Loan Party or any of
its Subsidiaries of the type described in Section 4.01(j), and promptly
after a Responsible Officer knows or should have known of the occurrence
thereof, notice of any adverse change in the status or the financial
effect on any Loan Party or any of its Subsidiaries of the Disclosed
Litigation from that described on Schedule 3.01(g).
(k) Securities Reports. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and reports
that any Loan Party or any of its Subsidiaries sends to its stockholders,
and copies of all regular, periodic and special reports, and all
registration statements, that any Loan Party or any of its Subsidiaries
files with the Securities and Exchange Commission or any governmental
authority that may be substituted therefor, or with any national
securities exchange.
(l) Creditor Reports. Promptly after the furnishing thereof, copies
of any statement or report furnished to any other holder of the securities
of any Loan Party or of any of its Subsidiaries pursuant to the terms of
any indenture, loan or credit or similar agreement and not otherwise
required to be furnished to the Lender Parties pursuant to any other
clause of this Section 5.03.
(m) Agreement Notices. Promptly upon receipt thereof, copies of all
notices, requests and other documents received by any Loan Party or any of
its Subsidiaries under or pursuant to any Related Document or indenture,
loan or credit or similar agreement regarding or related to any breach or
default by any party thereto or any other event that could impair the
value of the interests or the rights of any Loan Party or otherwise have a
Material Adverse Effect and copies of any amendment, modification or
waiver of any provision of any Related Agreement or indenture, loan or
credit or similar agreement and, from time to time upon request by the
Administrative Agent, such information and reports regarding the Related
Documents as the Administrative Agent may request.
(n) Revenue Agent Reports. Within 10 days after receipt, copies of
all Revenue Agent Reports (Internal Revenue Service Form 886), or other
written proposals of the Internal Revenue Service, that propose, determine
or otherwise set forth positive adjustments to the Federal income tax
liability of the affiliated group (within the meaning of Section
1504(a)(1) of the Internal Revenue Code) of which the Borrower is a member
aggregating $100,000 or more.
(o) Tax Certificates. Promptly, and in any event within five
Business Days after the due date (with extensions) for filing the final
Federal income tax return in respect of each taxable year, a certificate
(a "Tax Certificate"), signed by the President or the chief financial
officer of the Borrower, stating that the common parent of the affiliated
group (within the meaning of Section 1504(a)(1) of the Internal Revenue
Code) of which the Borrower is a member has paid to the Internal Revenue
Service or other taxing authority, or to the Borrower, the full amount
that such affiliated group is required to pay in respect of Federal income
tax for such year and that the Borrower and its Subsidiaries have received
any amounts payable to them, and have not paid amounts in respect of taxes
(Federal, state, local or foreign) in excess of the amount they are
required to pay, under the Tax Agreements in respect of such taxable year.
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(p) Environmental Conditions. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of any
noncompliance by any Loan Party or any of its Subsidiaries with any
Environmental Law or Environmental Permit that (i) could reasonably be
expected to have a Material Adverse Effect or (ii) cause any property
described in the Mortgages to be subject to any restrictions on ownership,
occupancy, use or transferability under any Environmental Law.
(q) Real Property. As soon as available and in any event within 30
days after the end of each Fiscal Year, a report supplementing Schedules
4.01(gg) and 4.01(hh) hereto, including an identification of all real and
leased property disposed of by the Borrower or any of its Subsidiaries
during such Fiscal Year, a list and description (including the street
address, county or other relevant jurisdiction, state, record owner, book
value thereof, and in the case of leases of property, lessor, lessee,
expiration date and annual rental cost thereof) of all real property
acquired or leased during such Fiscal Year and a description of such other
changes in the information included in such Schedules as may be necessary
for such Schedules to be accurate and complete.
(r) Insurance. As soon as available and in any event within 30 days
after the end of each Fiscal Year, a report summarizing the insurance
coverage (specifying type, amount and carrier) in effect for the Borrower
and its Subsidiaries and containing such additional information as any
Lender Party (through the Administrative Agent) may reasonably specify.
(s) Tax Agreements. If the Borrower and such of the other Loan
Parties and Affiliates of the Borrower as shall be members of a
consolidated federal income tax filing group or a combined or unitary
state or local income tax filing group shall, subsequent to the Closing
Date, enter into a tax sharing agreement including, without limitation,
any such agreement which provides, among other things, for a hypothetical
determination of the separate company federal and, if applicable, state
and local income tax liability of each member of such consolidated,
combined or unitary group (without regard to carry forwards of net
operating losses and other tax attributes), and the payment of such
separate company income tax liability by each member of such consolidated,
combined or unitary group to the common parent or other person responsible
for the payment of tax liabilities of the group to the relevant taxing
authority for Federal, and if applicable, state and local income tax
purposes, deliver such agreement promptly after the execution thereof,
provided that such agreement shall be in form and substance satisfactory
to the Administrative Agent (each such agreement, as amended, supplemented
or otherwise modified from time to time being a "Tax Agreement").
(t) Borrowing Base Certificate. As soon as available and in any
event within 10 days after the end of each month, a Borrowing Base
Certificate, as at the end of the previous month (or the previous week, if
furnished more often than monthly), certified by the chief financial
officer of the Borrower.
(u) Other Information. Such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Loan Party or any of its Subsidiaries as
any Lender Party (through the Administrative Agent) may from time to time
reasonably request.
SECTION 5.04. Financial Covenants. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, the Borrower will:
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(a) Minimum EBITDA. Maintain at the end of each fiscal quarter of
the Borrower ending prior to the later of (i) the Bridge Repayment Date
and (ii) the date occurring 12 months after the Closing Date, Consolidated
EBITDA of the Borrower and its Subsidiaries of not less than the amount
set forth below for the four fiscal quarters ending at the end of such
fiscal quarter set forth below:
Minimum
Quarter Ending On EBITDA
----------------- ------
June 30, 1998 $28,000,000
September 30, 1998 $28,000,000
December 31, 1998 $30,000,000
March 31, 1999 $30,000,000
June 30, 1999 $32,000,000
September 30, 1999 $32,000,000
December 31, 1999 $34,000,000
December 31, 2000
and each fiscal quarter
thereafter $39,000,000
(b) Total Debt Service Coverage Ratio. Maintain at the end of each
fiscal quarter of the Borrower a ratio of Consolidated Free Cash Flow for
the most recently completed four fiscal quarters of the Borrower and its
Subsidiaries to Total Debt Service for such four fiscal quarters of not
less than the ratio set forth below, provided, however, that for each
fiscal quarter of the Borrower ending on or prior to December 31, 1998,
the Consolidated Free Cash Flow and Total Debt Service shall be the actual
amount thereof, respectively, for the period since the Closing Date
multiplied by a fraction the numerator of which is 12 and the denominator
of which is the number of months that have elapsed since the Closing Date:
Quarter Ending On Ratio
----------------- -----
June 30, 1998 1.0 : 1.0
September 30, 1998 1.0 : 1.0
December 31, 1998 1.1 : 1.0
March 31, 1999 1.1 : 1.0
June 30, 1999 1.2 : 1.0
September 30, 1999 1.2 : 1.0
December 31, 1999 1.3 : 1.0
March 31, 2000 1.3 : 1.0
June 30, 2000 1.3 : 1.0
September 30, 2000 1.3 : 1.0
December 31, 2000
and each fiscal quarter
thereafter 1.4 : 1.0
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provided, however, that notwithstanding the foregoing, for each fiscal
quarter of the Borrower ending on or after the High Yield Date, the
Borrower shall maintain such a ratio of not less than 1.2 : 1.0 for each
four fiscal quarter period of the Borrower ending on or after the High
Yield Date.
(c) Leverage Ratio. Maintain at the end of each fiscal quarter of
the Borrower (i) ending prior to the High Yield Date, a Leverage Ratio of
not more than the ratio set forth below:
Quarter Ending On Ratio
----------------- -----
June 30, 1998 5.50 : 1.0
September 30, 1998 5.40 : 1.0
December 31, 1998 5.40 : 1.0
March 31, 1999 5.25 : 1.0
June 30, 1999 5.00 : 1.0
September 30, 1999 5.00 : 1.0
December 31, 1999 5.00 : 1.0
March 31, 2000 4.75 : 1.0
June 30, 2000 4.50 : 1.0
September 30, 2000
and each fiscal quarter
thereafter 4:00 : 1.0
and (ii) ending on or after the High Yield Date, a Leverage Ratio of not
more than the ratio set forth below:
Quarter Ending On Ratio
----------------- -----
June 30, 1998 6.00 : 1.0
September 30, 1998 5.75 : 1.0
December 31, 1998 5.50 : 1.0
March 31, 1999 5.25 : 1.0
June 30, 1999 5.25 : 1.0
September 30, 1999 5.00 : 1.0
December 31, 1999 5.00 : 1.0
March 31, 2000 4.75 : 1.0
June 30, 2000 4.75 : 1.0
September 30, 2000 4:50 : 1.0
December 31, 2000
and each fiscal quarter
thereafter 4.00 : 1.0
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
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(a) (i) the Borrower shall fail to pay any principal of any Advance
when the same shall become due and payable or (ii) the Borrower shall fail
to pay any interest on any Advance, or any Loan Party shall fail to make
any other payment under any Loan Document, in each case under this clause
(ii) within 2 Business Day(s) after the same becomes due and payable; or
(b) any representation or warranty made by any Loan Party (or any of
its officers) under or in connection with any Loan Document shall prove to
have been incorrect in any material respect when made; or
(c) the Borrower shall fail to perform or observe any term, covenant
or agreement contained in Section 2.14, 5.01(e), (f), (g), (l), (m), (n),
(o) or (t), 5.02, 5.03 or 5.04; or
(d) any Loan Party shall fail to perform any other term, covenant or
agreement contained in any Loan Document on its part to be performed or
observed if such failure shall remain unremedied for 10 days after the
earlier of the date on which (A) a Responsible Officer of the Borrower
becomes aware of such failure or (B) written notice thereof shall have
been given to the Borrower by the Administrative Agent or any Lender
Party; or
(e) any Loan Party or any of such Loan Party's Subsidiaries shall
fail to pay any principal of, premium or interest on or any other amount
payable in respect of any Debt that is outstanding in a principal or
notional amount of at least $250,000 either individually or in the
aggregate (but excluding Debt outstanding hereunder) of such Loan Party or
such Subsidiary (as the case may be), when the same becomes due and
payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after the applicable
grace period, if any, specified in the agreement or instrument relating to
such Debt; or any other event shall occur or condition shall exist under
any agreement or instrument relating to any such Debt and shall continue
after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate, or
to permit the acceleration of, the maturity of such Debt or otherwise to
cause, or to permit the holder thereof to cause, such Debt to mature; or
any such Debt shall be declared to be due and payable or required to be
prepaid or redeemed (other than by a regularly scheduled required
prepayment or redemption), purchased or defeased, or an offer to prepay,
redeem, purchase or defease such Debt shall be required to be made, in
each case prior to the stated maturity thereof; or
(f) any Loan Party or any of such Loan Party's Subsidiaries shall
generally not pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be
instituted by or against any Loan Party or any of such Loan Party's
Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors,
or seeking the entry of an order for relief or the appointment of a
receiver, trustee, or other similar official for it or for any substantial
part of its property and, in the case of any such proceeding instituted
against it (but not instituted by it) that is being diligently contested
by it in good faith, either such proceeding shall remain undismissed or
unstayed for a period of 60 days or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for
relief against, or the appointment of a receiver, trustee, custodian or
other similar official for, it or any substantial part of its property)
shall occur; or any Loan Party or any of such Loan Party's Subsidiaries
shall take any corporate (or the equivalent thereof) action to authorize
any of the actions set forth above in this subsection (f); or
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(g) any judgment or order for the payment of money in excess of
$250,000 shall be rendered against any Loan Party or any of such Loan
Party's Subsidiaries and either (i) enforcement proceedings shall have
been commenced by any creditor upon such judgment or order or (ii) there
shall be any period of 10 Business Days during which a stay of enforcement
of such judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect; or
(h) any non-monetary judgment or order shall be rendered against any
Loan Party or any of such Loan Party's Subsidiaries that could be
reasonably likely to have a Material Adverse Effect, and there shall be
any period of 10 Business Days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not
be in effect; or
(i) any provision of any Loan Document after delivery thereof
pursuant to Section 3.01 or 5.01(n) or 5.01(o) shall for any reason cease
to be valid and binding on or enforceable against any Loan Party party to
it, or any such Loan Party shall so state in writing; or
(j) any Collateral Document after delivery thereof pursuant to
Section 3.01 or 5.01(n) or 5.01(o) shall for any reason (other than
pursuant to the terms thereof) cease to create a valid and perfected first
priority lien on and security interest in the Collateral purported to be
covered thereby; or
(k) any ERISA Event shall have occurred with respect to a Plan and
the sum (determined as of the date of occurrence of such ERISA Event) of
the Insufficiency of such Plan and the Insufficiency of any and all other
Plans with respect to which an ERISA Event shall have occurred and then
exist (or the liability of the Loan Parties and the ERISA Affiliates
related to such ERISA Event) exceeds $250,000; or
(l) any Loan Party or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that it has incurred Withdrawal
Liability to such Multiemployer Plan in an amount that, when aggregated
with all other amounts required to be paid to Multiemployer Plans by the
Loan Parties and the ERISA Affiliates as Withdrawal Liability (determined
as of the date of such notification), exceeds $250,000 or requires
payments exceeding $50,000 per annum; or
(m) any Loan Party or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of
ERISA, and as a result of such reorganization or termination the aggregate
annual contributions of the Loan Parties and the ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or being terminated
have been or will be increased over the amounts contributed to such
Multiemployer Plans for the plan years of such Multiemployer Plans
immediately preceding the plan year in which such reorganization or
termination occurs by an amount exceeding $50,000; or
(n) (i) the Parent shall cease to be the record and beneficial owner
of 100% of the issued and outstanding capital stock of the Borrower; (ii)
any Person or two or more Persons acting in concert other than the Owners
shall have acquired beneficial ownership (within the meaning of Rule 13d-3
of the Securities and Exchange Commission under the Securities Exchange
Act of 1934), directly or indirectly, of Voting Stock of the Parent (or
other securities convertible into such Voting Stock) representing 20% or
more of the combined voting power of all Voting Stock of the Parent; or
(iii) during any period of up to 12 consecutive months, commencing after
the date of this Agreement, individuals who at the beginning of such
12-month period were directors of the Borrower shall cease for any reason
to constitute a majority of the board of directors of the Borrower; or
(iv) any Person or two or more Persons acting in concert other than the
Owners shall have acquired by contract or otherwise, or shall have entered
into a
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contract or arrangement that, upon consummation, will result in its or
their acquisition of the power to exercise, directly or indirectly, a
controlling influence over the management or policies of the Parent; or
(v) prior to the High Yield Date, Peter Mancuso and William Driggers shall
cease to hold such positions and respective successors shall not have been
appointed by the Borrower and approved by the Required Lenders (such
approval not to be unreasonably withheld) within 90 days thereafter; or
(vi) Ariel Gratch shall cease to have voting control over all common stock
of the Parent held by Afa International Limited, a corporation organized
under the laws of the British Virgin Islands or Yehochai Schneider shall
cease to have voting control over all common stock of the Parent held by
Waldock Limited, a corporation organized under the laws of the British
Virgin Islands, or (vii) Ariel Gratch and Yehochai Schneider, individually
or in the aggregate, shall cease to have voting control over at least 51%
of the Voting Stock of the Parent; or
(o) any Loan Party or Owner party to the Capital Contribution
Agreement shall fail to perform any term, covenant or agreement contained
in the Capital Contribution Agreement on its part to be performed or
observed by it, or any other default or breach shall occur thereunder;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the obligation of each Appropriate Lender to make Advances (other than
Letter of Credit Advances by an Issuing Bank or a Revolving Credit Lender
pursuant to Section 2.03(d)) and of the Issuing Bank to issue Letters of Credit
to be terminated, whereupon the same shall forthwith terminate, and (ii) shall
at the request, or may with the consent, of the Required Lenders, by notice to
the Borrower, declare the Notes, all interest thereon and all other amounts
payable under this Agreement and the other Loan Documents to be forthwith due
and payable, whereupon the Notes, all such interest and all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrower; provided, however, that in the event of an actual or deemed entry of
an order for relief with respect to the Borrower under the Federal Bankruptcy
Code, (x) the obligation of each Lender to make Advances (other than Letter of
Credit Advances by the Issuing Bank or a Revolving Credit Lender pursuant to
Section 2.03(c)) and of the Issuing Bank to issue Letters of Credit shall
automatically be terminated and (y) the Notes, all such interest and all such
amounts shall automatically become and be due and payable, without presentment,
demand, protest or any notice of any kind, all of which are hereby expressly
waived by the Borrower.
SECTION 6.02. Actions in Respect of the Letters of Credit upon
Default. If any Event of Default shall have occurred and be continuing, the
Administrative Agent may, or shall at the request of the Required Lenders,
irrespective of whether it is taking any of the actions described in Section
6.01 or otherwise, make demand upon the Borrower to, and forthwith upon such
demand the Borrower will, pay to the Administrative Agent on behalf of the
Lender Parties in same day funds at the Administrative Agent's office designated
in such demand, for deposit in the L/C Cash Collateral Account, an amount equal
to the aggregate Available Amount of all Letters of Credit then outstanding. If
at any time the Administrative Agent determines that any funds held in the L/C
Cash Collateral Account are subject to any right or claim of any Person other
than the Administrative Agent and the Lender Parties or that the total amount of
such funds is less than the aggregate Available Amount of all Letters of Credit,
the Borrower will, forthwith upon demand by the Administrative Agent, pay to the
Administrative Agent, as additional funds to be deposited and held in the L/C
Cash Collateral Account, an amount equal to the excess of (a) such aggregate
Available Amount over (b) the total amount of funds, if any, then held in the
L/C Cash Collateral Account that the Administrative Agent determines to be free
and clear of any such right and claim.
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ARTICLE VII
THE AGENTS
SECTION 7.01. Authorization and Action. Each Lender Party (in its
capacities as a Lender and the Issuing Bank (if applicable)) hereby appoints and
authorizes each Agent to take such action as agent on its behalf and to exercise
such powers and discretion under this Agreement and the other Loan Documents as
are delegated to such Agent by the terms hereof and thereof, together with such
powers and discretion as are reasonably incidental thereto. As to any matters
not expressly provided for by the Loan Documents (including, without limitation,
enforcement or collection of the Notes), each Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lender Parties and all holders of Notes;
provided, however, that no Agent shall be required to take any action that
exposes such Agent to personal liability or that is contrary to this Agreement
or applicable law. Each Agent agrees to give to each Lender Party prompt notice
of each notice given to it by the Borrower pursuant to the terms of this
Agreement.
SECTION 7.02. Agents' Reliance, Etc. Neither the Agents nor any of
their directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by them under or in connection with the Loan
Documents, except for their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, each Agent: (a) may treat the
payee of any Note as the holder thereof until, in the case of the Administrative
Agent, the Administrative Agent receives and accepts an Assignment and
Acceptance entered into by the Lender that is the payee of such Note, as
assignor, and an Eligible Assignee, as assignee, or, in the case of the
Collateral Agent, such Agent has received notice from the Administrative Agent
that it has received and accepted such Assignment and Acceptance, in each case
as provided in Section 8.07; (b) may consult with legal counsel (including
counsel for any Loan Party), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (c) makes no warranty or representation to any Lender
Party and shall not be responsible to any Lender Party for any statements,
warranties or representations (whether written or oral) made in or in connection
with the Loan Documents; (d) shall not have any duty to ascertain or to inquire
as to the performance or observance of any of the terms, covenants or conditions
of any Loan Document on the part of any Loan Party or to inspect the property
(including the books and records) of any Loan Party; (e) shall not be
responsible to any Lender Party for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, any Loan Document or any other instrument or
document furnished pursuant thereto; and (f) shall incur no liability under or
in respect of any Loan Document by acting upon any notice, consent, certificate
or other instrument or writing (which may be by telegram, telecopy or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 7.03. NationsBridge, NationsCredit and Affiliates. With
respect to its Commitments, the Advances made by it and the Notes issued to it,
each of NationsBridge and NationsCredit shall have the same rights and powers
under the Loan Documents as any other Lender Party and may exercise the same as
though it were not an Agent; and the term "Lender Party" or "Lenders Parties"
shall, unless otherwise expressly indicated, include each of NationsBridge and
NationsCredit in its individual capacity. Each of NationsBridge and
NationsCredit and its affiliates may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking engagements from and
generally engage in any kind of business with, any Loan Party, any of its
Subsidiaries and any Person who may do business with or own securities of any
Loan Party or any such Subsidiary, all as if NationsBridge or NationsCredit were
not an Agent and without any duty to account therefor to the Lender Parties.
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SECTION 7.04. Lender Party Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon any Agent or
any other Lender Party and based on the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender Party also acknowledges that it will, independently and
without reliance upon any Agent or any other Lender Party and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement.
SECTION 7.05. Indemnification. (a) Each Lender Party severally
agrees to indemnify each Agent (to the extent not promptly reimbursed by the
Borrower) from and against such Lender Party's ratable share (determined as
provided below) of any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by, or asserted
against such Agent in any way relating to or arising out of the Loan Documents
or any action taken or omitted by such Agent under the Loan Documents; provided,
however, that no Lender Party shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender Party
agrees to reimburse each Agent promptly upon demand for its ratable share of any
costs and expenses (including, without limitation, fees and expenses of counsel)
payable by the Borrower under Section 8.04, to the extent that such Agent is not
promptly reimbursed for such costs and expenses by the Borrower. For purposes of
this Section 7.05(a), the Lender Parties' respective ratable shares of any
amount shall be determined, at any time, according to the sum of (a) the
aggregate principal amount of the Advances outstanding at such time and owing to
the respective Lender Parties, (b) their respective Pro Rata Shares of the
aggregate Available Amount of all Letters of Credit outstanding at such time,
(c) the aggregate unused portions of their respective Term A Commitments at such
time, (d) the aggregate unused portions of their respective Term B Commitments
at such time and (e) their respective Unused Revolving Credit Commitments at
such time; provided that the aggregate principal amount of Letter of Credit
Advances owing to the Issuing Bank shall be considered to be owed to the
Revolving Credit Lenders ratably in accordance with their respective Revolving
Credit Commitments. In the event that any Defaulted Advance shall be owing by
any Defaulting Lender at any time, such Lender Party's Commitment with respect
to the Facility under which such Defaulted Advance was required to have been
made shall be considered to be unused for purposes of this Section 7.05(a) to
the extent of the amount of such Defaulted Advance. The failure of any Lender
Party to reimburse any Agent promptly upon demand for its ratable share of any
amount required to be paid by the Lender Party to such Agent as provided herein
shall not relieve any other Lender Party of its obligation hereunder to
reimburse such Agent for its ratable share of such amount, but no Lender Party
shall be responsible for the failure of any other Lender Party to reimburse such
Agent for such other Lender Party's ratable share of such amount. Without
prejudice to the survival of any other agreement of any Lender Party hereunder,
the agreement and obligations of each Lender Party contained in this Section
7.05(a) shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under the other Loan Documents.
(b) Each Lender Party severally agrees to indemnify the Issuing Bank
(to the extent not promptly reimbursed by the Borrower) from and against such
Lender Party's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against the Issuing Bank in any way
relating to or arising out of the Loan Documents or any action taken or omitted
by the Issuing Bank under the Loan Documents; provided, however, that no Lender
Party shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Issuing Bank's gross negligence or willful misconduct.
Without limitation of the foregoing, each Lender Party agrees to reimburse the
Issuing Bank promptly upon demand for its ratable share of any costs and
expenses (including, without limitation, fees and expenses of counsel) payable
by
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the Borrower under Section 8.04, to the extent that the Issuing Bank is not
promptly reimbursed for such costs and expenses by the Borrower. For purposes of
this Section 7.05(b), the Lender Parties' respective ratable shares of any
amount shall be determined, at any time, according to the sum of (a) the
aggregate principal amount of the Advances outstanding at such time and owing to
the respective Lender Parties, (b) their respective Pro Rata Shares of the
aggregate Available Amount of all Letters of Credit outstanding at such time,
(c) the aggregate unused portions of their respective Term A Commitments at such
time plus, (d) the aggregate unused portions of their respective Term B
Commitments at such time, (e) their respective Unused Revolving Credit
Commitments at such time; provided, that the aggregate principal amount of
Letter of Credit Advances owing to the Issuing Bank shall be considered to be
owed to the Revolving Credit Lenders ratably in accordance with their respective
Revolving Credit Commitments. In the event that any Defaulted Advance shall be
owing by any Defaulting Lender at any time, such Lender Party's Commitment with
respect to the Facility under which such Defaulted Advance was required to have
been made shall be considered to be unused for purposes of this Section 7.05(b)
to the extent of the amount of such Defaulted Advance. The failure of any Lender
Party to reimburse the Issuing Bank promptly upon demand for its ratable share
of any amount required to be paid by the Lender Parties to the Issuing Bank as
provided herein shall not relieve any other Lender Party of its obligation
hereunder to reimburse the Issuing Bank for its ratable share of such amount,
but no Lender Party shall be responsible for the failure of any other Lender
Party to reimburse the Issuing Bank for such other Lender Party's ratable share
of such amount. Without prejudice to the survival of any other agreement of any
Lender Party hereunder, the agreement and obligations of each Lender Party
contained in this Section 7.05(b) shall survive the payment in full of
principal, interest and all other amounts payable hereunder and under the other
Loan Documents.
SECTION 7.06. Successor Agents. Effective as of the Bridge Repayment
Date, NationsBridge shall resign as to all of the Facilities as Administrative
Agent and NationsCredit shall be appointed and hereby accepts appointment as
successor Administrative Agent as to all the Facilities. In addition, each Agent
may resign as to any or all of the Facilities at any time by giving written
notice thereof to the Lender Parties and the Borrower and may be removed as to
all of the Facilities at any time with or without cause by the Required Lenders.
Upon any resignation or removal pursuant to the immediately foregoing sentence,
the Required Lenders shall have the right, subject to, so long as no Default has
occurred and is continuing, the consent of the Borrower, which shall not be
unreasonably withheld or delayed, to appoint a successor Agent as to such of the
Facilities as to which such Agent has resigned or been removed. If no successor
Administrative Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 30 days after the retiring Agent's
giving of notice of resignation or the Required Lenders' removal of the retiring
Agent, then the retiring Agent may, on behalf of the Lender Parties, appoint a
successor Agent, which shall be a commercial bank organized under the laws of
the United States or of any State thereof and having a combined capital and
surplus of at least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent as to all of the Facilities and upon the
execution and filing or recording of such financing statements, or amendments
thereto, and such amendments or supplements to the Mortgages, and such other
instruments or notices, as may be necessary or desirable, or as the Required
Lenders may request, in order to continue the perfection of the Liens granted or
purported to be granted by the Collateral Documents, such successor Agent shall
succeed to and become vested with all the rights, powers, discretion, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under the Loan Documents. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent as to less than all of
the Facilities and upon the execution and filing or recording of such financing
statements, or amendments thereto, and such amendments or supplements to the
Mortgages, and such other instruments or notices, as may be necessary or
desirable, or as the Required Lenders may request, in order to continue the
perfection of the Liens granted or purported to be granted by the Collateral
Documents, such successor Agent shall succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Agent as to
such Facilities, other than with respect to funds transfers and other similar
aspects of the administration of Borrowings under such Facilities, issuances of
Letters of Credit (notwithstanding any resignation as Agent with respect to the
Letter of Credit Facility) and
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payments by the Borrower in respect of such Facilities, and the retiring Agent
shall be discharged from its duties and obligations under this Agreement as to
such Facilities, other than as aforesaid. After any retiring Agent's resignation
or removal hereunder as Agent as to all of the Facilities, the provisions of
this Article VII shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent as to any Facilities under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes or any other Loan Document, nor consent
to any departure by any Loan Party from any such provision, shall in any event
be effective unless the same shall be in writing and signed (or, in the case of
the Collateral Documents, consented to) by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment, waiver
or consent shall, unless in writing and signed by all of the Lenders (other than
any Lender Party that is, at such time, a Defaulting Lender), do any of the
following at any time: (i) waive any of the conditions specified in Section 3.01
or, in the case of the Initial Extension of Credit, Section 3.02, (ii) change
the number of Lenders or the percentage of (x) the Commitments, (y) the
aggregate unpaid principal amount of the Advances or (z) the aggregate Available
Amount of outstanding Letters of Credit that, in each case, shall be required
for the Lenders or any of them to take any action hereunder, (iii) reduce or
limit the obligations of the Subsidiary Guarantors under Section 1 of the
Subsidiary Guaranty or otherwise limit the Subsidiary Guarantors' liability with
respect to the Obligations owing to the Administrative Agent and the Lender
Parties, (iv) release any of the Collateral in any transaction or series of
related transactions or permit the creation, incurrence, assumption or existence
of any Lien on any material portion of the Collateral in any transaction or
series of related transactions to secure any Obligations other than Obligations
owing to the Secured Parties under the Loan Documents and other than Debt owing
to any other Person, provided that, in the case of any Lien on any material
portion of the Collateral to secure Debt owing to any other Person, (A) the
Borrower shall, on the date such Debt shall be incurred or issued, prepay the
Advances pursuant to, and in the order of priority set forth in, Section
2.06(b)(ii) in an aggregate principal amount equal to the amount of such Net
Cash Proceeds to the extent required to do so under Section 2.06(b)(ii), (B)
such Lien shall be subordinated to the Liens created under the Loan Documents on
terms acceptable to the Required Lenders and (C) the Required Lenders shall
otherwise permit the creation, incurrence, assumption or existence of such Lien
and, to the extent not otherwise permitted under Section 5.02(b), of such Debt,
(v) amend this Section 8.01, or (vi) limit the liability of any Loan Party under
any of the Loan Documents and (c) no amendment, waiver or consent shall, unless
in writing and signed by the Required Lenders and each Lender that has a
Commitment under the Term A Facility, the Term B Facility or the Revolving
Credit Facility if affected by such amendment, waiver or consent, (i) increase
the Commitments of such Lender or subject such Lender to any additional
obligations, (ii) reduce the principal of, or interest on, the Notes held by
such Lender or any fees or other amounts payable hereunder to such Lender, (iii)
postpone any date fixed for any payment of principal of, or interest on, the
Notes held by such Lender or any fees or other amounts payable hereunder to such
Lender or (iv) change the order of application of any prepayment set forth in
Section 2.06 in any manner that materially affects such Lender; provided further
that no amendment, waiver or consent shall, unless in writing and signed by the
Issuing Bank, in addition to the Lenders required above to take such action,
affect the rights or obligations of the Issuing Bank under this Agreement; and
provided further that no amendment, waiver or consent shall, unless in writing
and signed by the Administrative Agent in addition to the Lenders required above
to take such action, affect the rights or duties of the Administrative Agent
under this Agreement.
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SECTION 8.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered,
if to the Borrower, at its address at 950 Third Avenue, New York, New York
10022, Attention: Ariel Gratch; if to any Initial Lender or the Initial Issuing
Bank, at its Domestic Lending Office specified opposite its name on Schedule I
hereto; if to any other Lender Party, at its Domestic Lending Office specified
in the Assignment and Acceptance pursuant to which it became a Lender Party; and
if to the Administrative Agent, at its address at 100 North Tryon Street,
Charlotte, North Carolina 28255, Attention: Lynne Wertz, with a copy to
NationsCredit, One Canterbury Green, P.O. Box 12013, Stamford, CT 06912-0013,
Attention: Alan Pagnotta; or, as to the Borrower or the Administrative Agent, at
such other address as shall be designated by such party in a written notice to
the other parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the
Administrative Agent. All such notices and communications shall, when mailed,
telegraphed, telecopied or telexed, be effective when deposited in the mails,
delivered to the telegraph company, transmitted by telecopier or confirmed by
telex answerback, respectively, except that notices and communications to the
Administrative Agent pursuant to Article II, III or VII shall not be effective
until received by the Administrative Agent. Delivery by telecopier of an
executed counterpart of any amendment or waiver of any provision of this
Agreement or the Notes or of any Exhibit hereto to be executed and delivered
hereunder shall be effective as delivery of a manually executed counterpart
thereof.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any
Lender Party or the Administrative Agent to exercise, and no delay in
exercising, any right hereunder or under any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 8.04. Costs and Expenses. (a) The Borrower agrees to pay on
demand (i) all costs and expenses of the Administrative Agent in connection with
the preparation, execution, delivery, administration, modification and amendment
of the Loan Documents (including, without limitation, (A) all due diligence,
collateral review, syndication, transportation, computer, duplication,
appraisal, audit, insurance, consultant, search, filing and recording fees and
expenses and (B) the reasonable fees and expenses of counsel for the
Administrative Agent with respect thereto, with respect to advising the
Administrative Agent as to its rights and responsibilities, or the perfection,
protection or preservation of rights or interests, under the Loan Documents,
with respect to negotiations with any Loan Party or with other creditors of any
Loan Party or any of its Subsidiaries arising out of any Default or any events
or circumstances that may give rise to a Default and with respect to presenting
claims in or otherwise participating in or monitoring any bankruptcy, insolvency
or other similar proceeding involving creditors' rights generally and any
proceeding ancillary thereto) and (ii) all costs and expenses of the
Administrative Agent and the Lender Parties in connection with the enforcement
of the Loan Documents, whether in any action, suit or litigation, any
bankruptcy, insolvency or other similar proceeding affecting creditors' rights
generally (including, without limitation, the reasonable fees and expenses of
counsel for the Administrative Agent and each Lender Party with respect
thereto); provided, however, that with respect to the accounting and collateral
audits referred to in Section 5.01(f), so long as no Event of Default should
have occurred and be continuing, the Borrower shall not be required to pay the
costs and expenses for more than two such audits in any year.
(b) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, each Lender Party and each of their Affiliates and their
officers, directors, employees, agents and advisors (each, an "Indemnified
Party") from and against (and will reimburse each Indemnified Party as the same
are incurred) any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees, disbursements and other charges
of counsel) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation,
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in connection with any investigation, litigation or proceeding or preparation of
a defense in connection therewith) (A) (i) the Acquisition or any other
acquisition or proposed acquisition by any Loan Party or any of its Subsidiaries
or any of the other transactions contemplated by the Loan Documents or (ii) the
Facilities or any other financing or any actual or proposed use of the proceeds
of the Advances or the Letters of Credit, the Loan Documents or (B) the actual
or alleged presence of Hazardous Materials on any property of any Loan Party or
any of its Subsidiaries or any Environmental Action relating in any way to any
Loan Party or any of its Subsidiaries, except to the extent such claim, damage,
loss, liability or expense is found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from such Indemnified Party's
gross negligence or willful misconduct. In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section 8.04(b)
applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by any Loan Party, its directors,
shareholders or creditors or an Indemnified Party or any Indemnified Party is
otherwise a party thereto and whether or not the Acquisition and other
transactions contemplated hereby are consummated. The Borrower also agrees not
to assert any claim against the Administrative Agent, any Lender Party or any of
their Affiliates, or any of their respective officers, directors, employees,
attorneys and agents, on any theory of liability, for special, indirect,
consequential or punitive damages arising out of or otherwise relating to the
Facilities, the actual or proposed use of the proceeds of the Advances or the
Letters of Credit, the Loan Documents or any of the transactions contemplated
thereby.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance is made by the Borrower to or for the account of a Lender Party
other than on the last day of the Interest Period for such Advance, as a result
of a payment or Conversion pursuant to Section 2.09(b)(i) or 2.10(d),
acceleration of the maturity of the Notes pursuant to Section 6.01 or for any
other reason, the Borrower shall, upon demand by such Lender Party (with a copy
of such demand to the Administrative Agent), pay to the Administrative Agent for
the account of such Lender Party any amounts required to compensate such Lender
Party for any additional losses, costs or expenses that it may reasonably incur
as a result of such payment, including, without limitation, any loss (including
loss of anticipated profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by any Lender
Party to fund or maintain such Advance.
(d) If any Loan Party fails to pay when due any costs, expenses or
other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may be
paid on behalf of such Loan Party by the Administrative Agent or any Lender
Party, in its sole discretion.
(e) Without prejudice to the survival of any other agreement of any
Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrower contained in Sections 2.10 and 2.12 and this Section
8.04 shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under any of the other Loan Documents.
SECTION 8.05. Right of Set-off. Upon (a) the occurrence and during
the continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Lender Party and each of its respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set-off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender Party or such
Affiliate to or for the credit or the account of the Borrower against any and
all of the Obligations of the Borrower now or hereafter existing under this
Agreement and the Note or Notes (if any) held by such Lender Party, irrespective
of whether such Lender Party shall have made any demand under this Agreement or
such Note or Notes and although such obligations may be unmatured. Each Lender
Party agrees promptly to notify the Borrower after any such set-off and
application; provided, however, that the failure to give
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such notice shall not affect the validity of such set-off and application. The
rights of each Lender Party and its respective Affiliates under this Section are
in addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Lender Party and its respective Affiliates may
have.
SECTION 8.06. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower and the Administrative Agent
and when the Administrative Agent shall have been notified by each Initial
Lender and the Initial Issuing Bank that such Initial Lender and the Initial
Issuing Bank have executed it and thereafter shall be binding upon and inure to
the benefit of the Borrower, the Administrative Agent and each Lender Party and
their respective successors and assigns, except that the Borrower shall not have
the right to assign its rights hereunder or any interest herein without the
prior written consent of the Lender Parties.
SECTION 8.07. Assignments and Participations. (a) Each Lender may
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment or Commitments, the Advances owing to it and the Note
or Notes held by it); provided, however, that (i) each such assignment shall be
of a uniform, and not a varying, percentage of all rights and obligations under
and in respect of one or more Facilities, (ii) except in the case of an
assignment to a Person that, immediately prior to such assignment, was a Lender
or an assignment of all of a Lender's rights and obligations under this
Agreement, the amount of the Commitment of the assigning Lender being assigned
pursuant to each such assignment (determined as of the date of the Assignment
and Acceptance with respect to such assignment) shall in no event be less than
$3,500,000 or an integral multiple of $1,000,000 in excess thereof, (iii) each
such assignment shall be to an Eligible Assignee, and (iv) the parties to each
such assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Note or Notes subject to such assignment and a processing and
recordation fee of $3,500.
(b) Upon such execution, delivery, acceptance and recording, from
and after the effective date specified in such Assignment and Acceptance, (x)
the assignee thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it pursuant to such Assignment
and Acceptance, have the rights and obligations of a Lender or Issuing Bank, as
the case may be, hereunder and (y) the Lender or Issuing Bank assignor
thereunder 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 an
assigning Lender's or Issuing Bank's rights and obligations under this
Agreement, such Lender or Issuing Bank shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, the
Lender Party assignor thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender Party makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender Party makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
other Loan Party or the performance or observance by any Loan Party of any of
its obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Section 4.01 and such other documents and information as it has
deemed appropriate to make its
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own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the
Administrative Agent, such assigning Lender Party or any other Lender Party and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers and
discretion under the Loan Documents as are delegated to the Administrative Agent
by the terms hereof, together with such powers and discretion as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender or Issuing Bank, as the
case may be.
(d) The Administrative Agent shall maintain at its address referred
to in Section 8.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lender Parties and the Commitment under each Facility of, and principal
amount of the Advances owing under each Facility to, each Lender Party from time
to time (the "Register"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrower, the
Administrative Agent and the Lender Parties may treat each Person whose name is
recorded in the Register as a Lender Party hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Lender Party at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender Party and an assignee, together with any Note or Notes subject
to such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit C
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Borrower. In the case of any assignment by a Lender, within five Business Days
after its receipt of such notice, the Borrower, at its own expense, shall
execute and deliver to the Administrative Agent in exchange for the surrendered
Note or Notes a new Note to the order of such Eligible Assignee in an amount
equal to the Commitment assumed by it under a Facility pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained a Commitment
hereunder under such Facility, a new Note to the order of the assigning Lender
in an amount equal to the Commitment retained by it hereunder. Such new Note or
Notes shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of Exhibit A-1, A-2 or A-3 hereto, as the case may be.
(f) The Issuing Bank may assign to an Eligible Assignee all of its
rights and obligations under the undrawn portion of its Letter of Credit
Commitment at any time; provided, however, that (i) each such assignment shall
be to an Eligible Assignee and (ii) the parties to such assignment shall execute
and deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with a processing and
recordation fee of $3,500.
(g) Each Lender Party may sell participations to one or more Persons
(other than any Loan Party or any of its Affiliates) in or to all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes (if any) held by it); provided, however, that (i) such Lender
Party's obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Lender Party shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender Party shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrower, the Administrative Agent and the
other Lender Parties shall continue to deal solely and directly with such Lender
Party in connection with such Lender Party's rights and obligations under this
Agreement and (v) no participant under any such participation shall have any
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right to approve any amendment or waiver of any provision of any Loan Document,
or any consent to any departure by any Loan Party therefrom, except to the
extent that such amendment, waiver or consent would reduce the principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, postpone any date fixed for
any payment of principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, or release all or substantially all of the Collateral.
(h) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower furnished to such Lender
Party by or on behalf of the Borrower; provided, however, that, prior to any
such disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any Confidential Information
received by it from such Lender Party.
(i) Notwithstanding any other provision set forth in this Agreement,
any Lender Party may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
SECTION 8.08. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.09. No Liability of the Issuing Bank. The Borrower assumes
all risks of the acts or omissions of any beneficiary or transferee of any
Letter of Credit with respect to its use of such Letter of Credit. Neither the
Issuing Bank nor any of its officers or directors shall be liable or responsible
for: (a) the use that may be made of any Letter of Credit or any acts or
omissions of any beneficiary or transferee in connection therewith; (b) the
validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by the Issuing Bank
against presentation of documents that do not comply with the terms of a Letter
of Credit, including failure of any documents to bear any reference or adequate
reference to the Letter of Credit; or (d) any other circumstances whatsoever in
making or failing to make payment under any Letter of Credit, except that the
Borrower shall have a claim against the Issuing Bank, and the Issuing Bank shall
be liable to the Borrower, to the extent of any direct, but not consequential,
damages suffered by the Borrower that the Borrower proves were caused by (i) the
Issuing Bank's willful misconduct or gross negligence in determining whether
documents presented under any Letter of Credit comply with the terms of the
Letter of Credit or (ii) the Issuing Bank's willful failure to make lawful
payment under a Letter of Credit after the presentation to it of a draft and
certificates strictly complying with the terms and conditions of the Letter of
Credit. In furtherance and not in limitation of the foregoing, the Issuing Bank
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
SECTION 8.10. Confidentiality. Neither the Administrative Agent nor
any Lender Party shall disclose any Confidential Information to any Person
without the consent of the Borrower, other than (a) to the Administrative
Agent's or such Lender Party's Affiliates and their officers, directors,
employees, agents and advisors and to actual or prospective Eligible Assignees
and participants, and then only on a confidential basis, (b) as required by any
law, rule or regulation or judicial process and (c) as requested or required by
any state, federal or foreign authority or examiner regulating banks or banking.
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SECTION 8.11. Jurisdiction, Etc. (a) Each of the parties hereto
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any of the other Loan Documents to which it is a party, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State
court or, to the extent permitted by law, in such federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or any of the other Loan Documents in the
courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any of the
other Loan Documents to which it is a party in any New York State or federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
SECTION 8.12. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
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SECTION 8.13. Waiver of Jury Trial. Each of the Borrower, the
Administrative Agent and the Lender Parties irrevocably waives all right to
trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to any of the Loan
Documents, the Advances or the actions of the Administrative Agent or any Lender
Party in the negotiation, administration, performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
APC HOLDING, INC.
By /s/ Ariel Gratch
_____________________________________
Title: Vice Chairman
NATIONSBRIDGE, L.L.C., as Administrative
Agent
By /s/ L.E. Wirtz
_____________________________________
Title: Managing Director
NATIONSCREDIT COMMERCIAL
CORPORATION, as Collateral Agent
By /s/ Allan J. Pagnotta
_____________________________________
Title: Vice President
Initial Lenders
NATIONSBRIDGE, L.L.C.
By /s/ L.E. Wirtz
_____________________________________
Title: Managing Director
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NATIONSCREDIT COMMERCIAL
CORPORATION
By /s/ Alan J. Pagnotta
-------------------------------------
Title: Vice President
NATIONSBANK, N.A.
By /s/ Michael S. McKay
-------------------------------------
Title: Senior Vice President
Initial Issuing Bank
NATIONSCREDIT COMMERCIAL
CORPORATION
By /s/ Alan J. Pagnotta
-------------------------------------
Title: Vice President
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SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
=========================================================================================================================
Name of Revolving Letter of Domestic Eurodollar
Initial Term A Term B Credit Credit Lending Lending
Lender Commitment Commitment Commitment Commitment Office Office
=========================================================================================================================
NationsBridge, $0.00 $65,000,000.00 $0.00 $0.00 100 North Tryon Street 100 North Tryon Street
L.L.C. 15th Floor 15th Floor
Charlotte, NC 28255 Charlotte, NC 28255
Attn: Lynne Cole Attn: Lynne Cole
Tel. (704) 380-9068 Tel. (704) 380-9068
Fax (704) 380-9923 Fax (704) 380-9923
- -------------------------------------------------------------------------------------------------------------------------
NationsCredit $0.00 $0.00 $30,000,000 $2,000,000 1 Canterbury Green 1 Canterbury Green
Commercial P.O. Box 12013 P.O. Box 12013
Corporation Stamford, CT 06912-0013 Stamford, CT
Attn: Alan Pagnotta 06912-0013
Tel. (203) 352-4034 Attn: Alan Pagnotta
Fax (203) 352-4102 Tel. (203) 352-4034
Fax (203) 352-4102
- -------------------------------------------------------------------------------------------------------------------------
NationsBank, N.A. $70,000,000.00 $0.00 $0.00 $0.00 100 North Tryon Street 100 North Tryon Street
15th Floor 15th Floor
Charlotte, NC 28255 Charlotte, NC 28255
Attn: Tim Pacitto Attn: Tim Pacitto
Tel. (704) 388-1340 Tel. (704) 388-1340
Fax (704) 386-0456 Fax (704) 386-0456
=========================================================================================================================
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APC HOLDING, INC.
LETTER AMENDMENT AND WAIVER NO. 1
Dated as of February 4, 1998
To the Lender Parties party to the
Credit Agreement referred to
below, to NationsBridge, L.L.C.,
as Administrative Agent, and
NationsCredit Commercial
Corporation, as Collateral Agent
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of February 4, 1998 (the
"Credit Agreement") among APC Holding, Inc., a Delaware corporation (the
"Borrower"), the banks, financial institutions and other institutional lenders
party thereto, NationsCredit Commercial Corporation, as collateral agent, and
NationsBridge, L.L.C., as administrative agent. Capitalized terms used and not
otherwise defined in this Letter Amendment and Waiver ("Letter Amendment and
Waiver") have the meanings assigned to such terms in the Credit Agreement.
I. Amendments to the Credit Agreement.
The Credit Agreement is, effective as of the date of this Letter
Amendment and Waiver, hereby amended as follows:
(a) Section 1.01 is amended by deleting the definition of
"Subordinated Notes" in its entirety and substituting therefor the
following:
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"Subordinated Notes" means (a) the subordinated promissory
notes dated February 4, 1998 made by the Parent to Afa International
Limited in the principal amount of $1,000,000 and to Waldock Limited
in the principal amount of $2,000,000 and (b) after the issuance
thereof, (i) the subordinated promissory note made by the Parent to
Afa International Limited in the principal amount of $1,500,000,
which note may be prepayable at any time in cash or by the issuance
of warrants for 525,000 shares of Class B common stock of the
Parent, subject, however, to the terms of the Loan Documents, and
which note shall otherwise be in form and substance satisfactory to
the Administrative Agent and (ii) the subordinated promissory note
made by the Parent to Ariel Gratch in the principal amount of
$1,000,000, which note may be prepayable at any time in cash or by
the issuance of warrants for 350,000 shares of Class B common stock
of the Parent, subject, however, to the terms of the Loan Documents,
and which note shall otherwise be in form and substance satisfactory
to the Administrative Agent, in each case as such notes may be
amended, supplemented or otherwise modified from time to time in
accordance with their terms, to the extent permitted in accordance
with the Loan Documents.
(b) Section 2.06(b)(iii) is amended in full to read as follows:
"(iii) The Borrower shall, on each Business Day, prepay an
aggregate principal amount of the Revolving Credit Advances
comprising part of the same Borrowings and the Letter of Credit
Advances equal to the amount by which (A) the sum of the aggregate
principal amount of the Revolving Credit Advances and the Letter of
Credit Advances then outstanding plus the aggregate Available Amount
of all Letters of Credit then outstanding exceeds (B) the lesser of
(x) the Revolving Credit Facility on such Business Day and (y) (I)
during the period from the High Yield Date to April 30, 1999, the
sum of $5,000,000 and the Borrowing Base on such Business Day and
(II) at all other times, the Borrowing Base on such Business Day."
(c) Section 2.08 is amended by adding a new subsection (d) thereto
to read as follows:
"(d) Other Fees. Unless, on or before April 30, 1999, all
Advances owing to NationsCredit shall have been repaid in full,
together with interest thereon and all other amounts owing with
respect thereto, and the Commitments of NationsCredit shall have
been terminated, then on April 30, 1999, the Borrower shall pay to
NationsCredit a non-refundable fee of $250,000 in consideration for
the Overadvance Privilege (as defined in Section 3.02), which
terminates on such date."
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(d) Section 3.02(a)(iii) is amended in full to read as follows:
"(iii) other than with respect to any Borrowing on the Closing
Date, immediately after such Borrowing or any issuance of a Letter
of Credit and after application of the proceeds thereof, in the case
of each Revolving Credit Advance or the issuance of a Letter of
Credit, the aggregate principal amount of the Revolving Credit
Advances plus Letter of Credit Advances to be outstanding plus the
aggregate Available Amount of all Letters of Credit to be
outstanding after giving effect to such Advance or issuance will not
exceed the lesser of (A) the aggregate amount of the Revolving
Credit Commitments (or, if such Borrowing is on the Closing Date, an
amount not to exceed $2,500,000) and (B) the Borrowing Base;
provided that, in the case of this clause (B), in the case of any
Revolving Credit Borrowing to be made during the period from the
High Yield Date to April 30, 1999, the aggregate principal amount of
the Revolving Credit Advances plus Letter of Credit Advances to be
outstanding plus the aggregate Available Amount of all Letters of
Credit to be outstanding after giving effect to such Borrowing may
exceed the Borrowing Base by not more than $5,000,000 (the
"Overadvance Privilege" and any such Revolving Credit Advances made
in excess of the Borrowing Base being the "Overadvances"); provided
that, in any event, such Overadvance Privilege will terminate on
April 30, 1999;".
(e) The second sentence of Section 4.01(a) is amended in full to
read as follows:
"All of the outstanding capital stock of the Parent has been validly
issued, is fully paid and non-assessable and is owned by the Owners,
as of the date hereof, in the amounts specified in Schedule 4.01(a)
hereto, free and clear of all Liens."
(f) Section 5.01(o)(iv)(A) is amended by deleting the name "Yehochai
Schneider" and substituting therefor the name "Ariel Gratch".
(g) Section 5.02(g) is amended (i) by deleting the figure "(v)" in
the tenth line thereof and substituting therefor the figure "(vii)" and
(ii) by deleting the phrase "and (vi)" in the twenty-fourth line thereof
and substituting therefor the following:
"(vi) the Borrower may make a distribution to the Parent in respect
of the return of capital to the Parent in an aggregate amount not to
exceed $2,500,000 solely when and to the extent necessary to permit
the Parent to redeem or repurchase its warrants issued pursuant to
the Second Warrant Agreement; and (vii)".
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(h) Section 6.01(n)(vi) is amended by deleting the name "Yehochai
Schneider" and substituting therefor the name "Ariel Gratch".
(i) Schedule 4.01(a) is amended in full to read as set forth on
Annex A hereto.
II. Amendments to the Parent Guaranty.
The Parent Guaranty is, effective as of the date of this Letter
Waiver and Amendment, hereby amended as follows:
(a) Section 7(a)(ii) is amended by deleting the period at the end
thereof and substituting therefor the following:
";
(iii) as soon as practicable and prior to the High Yield Date
(unless the Borrower and the Administrative Agent shall agree to a
later date), enter into an equity incentive plan in form and
substance reasonably satisfactory to the Administrative Agent (any
such plan being a "Stock Plan") to issue to management and employees
of the Loan Parties and their Subsidiaries (other than Ariel Gratch
and Yehochai Schneider) common stock and/or stock options and/or
stock appreciation rights representing in the aggregate
approximately 10% of the outstanding capital stock of the Guarantor
on a fully diluted basis; and
(iv) on or before June 30, 1998 (unless the Borrower and the
Administrative Agent shall agree to a later date), issue common
stock and/or stock options and/or stock appreciation rights pursuant
to the Stock Plan referred to in subsection (iii) above."
(b) Section 7(b)(vii) is amended by adding a proviso at the end
thereof that reads as follows:
"provided, however, and subject to the foregoing limitations, that
with respect to the Subordinated Notes in the amounts of $1,500,000
and $1,000,000 issued after the date hereof to Afa International
Limited and to Ariel Gratch, respectively, the Guarantor may elect
to prepay such notes either in cash or through the issuance of
warrants to purchase 525,000 shares and 350,000 shares,
respectively, of the Guarantor's Class B common stock;".
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(c) Section 7(b)(ix) is amended by deleting the phrase "and (x)" at
the end thereof and substituting therefor the following:
"(x) the issuance by the Guarantor of shares of common stock
and/or stock options and/or stock appreciation rights pursuant to a
Stock Plan permitted under Section 7(a)(iii) hereof;
(xi) the execution and delivery (but not the performance) of
an agreement (the "Polytek Consideration Agreement") among the
Guarantor and Afa International, Limited and Warcop Investment Ltd.,
as the former shareholders of Afa Polytek B.V., a corporation
organized under the laws of the Netherlands ("Polytek"), a copy of
the form of which is attached hereto as Exhibit A;
(xii) the Guarantor may effect a 10,000 for 1 stock split of
its common stock; and
(xiii)".
(d) Section 7(b)(xii) is further amended by deleting the phrase "and
(xiii)" at the end thereof and substituting therefor the following:
"(xiii) concurrently with or subsequent to the redemption or
repurchase in full of the warrants issued by it pursuant to the
Second Warrant Agreement, the issuance of preferred stock or the
making of a cash payment to Afa International Limited and Warcop
Investment Ltd., in either case representing consideration of up to
$10,940,000 plus dividends or interest thereon, as the case may be,
at a rate of 7% per annum, accruing from the date of issuance
thereof, in connection with the transfer of the capital stock of
Polytek to the Guarantor pursuant to and in accordance with the
terms of the Polytek Consideration Agreement and the amendment of
the Constitutive Documents solely in order to permit such issuance;
(xiv) the incurrence of Debt after the date hereof pursuant to
certain Subordinated Notes (A) in the principal amount of $1,500,000
payable to Afa International Limited and (B) in the principal amount
of $1,000,000 payable to Ariel Gratch, in either case, with a
maturity date not earlier than May 15, 2008 and evidenced by a
promissory note in form and substance satisfactory to the
Administrative Agent, provided, however, that upon receipt of the
proceeds thereof, the Guarantor shall use such proceeds to redeem or
repurchase in part the warrants issued by it pursuant to the Second
Warrant Agreement;
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(xv) the redemption or repurchase of the warrants issued by it
pursuant to the Second Warrant Agreement for consideration not to
exceed $5,000,000 pursuant to an agreement between the Guarantor and
NationsCredit, such agreement to be in form and substance
satisfactory to the Administrative Agent; and
(xvi)".
(e) A new Exhibit A, a copy of which is attached hereto as Annex B,
is added at the end of the Parent Guaranty.
III. Waivers.
(a) The Borrower intends to use an aggregate amount not to exceed
$573,000 of the Net Cash Proceeds from the sale of the Refinancing
Securities to pay a prepayment fee incurred in the prepayment of certain
Existing Debt pursuant to the Credit Agreement. In connection therewith,
the Borrower hereby requests that you waive, solely to permit the Borrower
to pay such fee, the prepayment requirement of Section 2.06(b)(ii) of the
Credit Agreement.
(b) The Borrower intends to use an aggregate amount not to exceed
$2,500,000 of the Net Cash Proceeds from the sale of the Refinancing
Securities to make a distribution in respect of return of capital to the
Parent, in order to enable the Parent to redeem or repurchase the warrants
issued by the Parent pursuant to the Second Warrant Agreement. In
connection therewith, the Borrower hereby requests that you waive, solely
to permit such distribution to be made, the prepayment requirement of
Section 2.06(b)(ii) of the Credit Agreement.
(c) The Parent intends to incur subordinated Debt in the form of
Subordinated Notes (i) in the principal amount of $1,500,000 payable to
Afa International Limited and (ii) in the principal amount of $1,000,000
payable to Ariel Gratch, in either case in order to redeem warrants issued
pursuant to the Second Warrant Agreement. In connection therewith, the
Borrower hereby requests that you waive, solely to permit the Parent to
incur such subordinated Debt in order to effect such redemption or
repurchase, the prepayment requirement of Section 2.06(b)(ii) of the
Credit Agreement.
(d) The Parent may issue warrants for 875,000 shares of its Class B
common stock to prepay the Subordinated Notes referred to in the waiver
referred to in Section III(c) above. In connection therewith, the Borrower
hereby requests that you
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waive, solely to permit the Parent to issue such warrants, the prepayment
requirement of Section 2.06(b)(ii) of the Credit Agreement.
(e) The Parent intends to issue preferred stock to Afa International
Limited and Warcop Investment Ltd. pursuant to the Polytek Consideration
Agreement as consideration for the transfer of the capital stock of Afa
Polytek B.V., a corporation organized under the laws of the Netherlands,
to the Borrower. In connection therewith, the Borrower hereby requests
that you waive, so long as the warrants issued by the Parent pursuant to
the Second Warrant Agreement have been redeemed or repurchased and solely
to permit the Parent to issue such preferred stock, the prepayment
requirement of Section 2.06(b)(ii) of the Credit Agreement.
(f) The Borrower intends to file a Restated Certificate of
Incorporation in order to change its name from APC Holding, Inc. to
Indesco International, Inc. Prior to the Borrower being permitted to
change its legal name, Section 5.01(e) of the Credit Agreement requires
that the Borrower give the Administrative Agent at least 10 Business Days'
notice of such change. In addition, the Parent intends to file a Restated
Certificate of Incorporation in order to change its name from AFA Holdings
Co. to Indesco Holdings Co. In connection therewith, the Borrower hereby
requests that you waive, solely to permit the Borrower to change its name
from APC Holding, Inc. to Indesco International, Inc., the notice
requirement of Section 5.01(e) of the Credit Agreement. Further, the
Borrower hereby requests that you waive, solely to permit the Parent to
change its name from AFA Holdings Co. to Indesco Holdings Co., the
requirements of Section 7 of the Parent Guaranty.
(g) The Parent intends to extend the maturity date of certain
Subordinated Notes until May 15, 2008. In connection therewith, the
Borrower hereby requests that you waive, solely to permit the Parent to
extend the maturity dates of such Subordinated Notes, the requirements of
Section 5.02(l) of the Credit Agreement and Section 7 of the Parent
Guaranty.
(h) Further, solely with respect to the Assignment and Acceptance
dated as of March 5, 1998, among NationsBank, N.A., and NationsBridge
L.L.C., as Assignors, and Wrap Two & Co., as Assignee, the Borrower and
you hereby agree to waive Section 8.07(a) of the Credit Agreement
requiring that the amount of any Commitments being assigned pursuant to an
Assignment and Acceptance be at least $3,500,000.
Other than the sections of this Letter Amendment and Waiver referred
to in the immediately succeeding sentence, this Letter Amendment and Waiver
shall become effective as of the date first above written when, and only when,
the Administrative Agent shall have
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received (a) counterparts of this Letter Amendment and Waiver executed by the
undersigned and the Required Lenders or, as to any of the Lenders, advice
satisfactory to the Administrative Agent that such Lender has executed this
Letter Amendment and Waiver, (b) the consent attached hereto executed by each
Loan Party (other than the Borrower) and (c) duly executed UCC financing
statements naming the Borrower and the Parent as debtors in such jurisdictions
as the Administrative Agent shall have requested. Sections I(a), (b), (c), (d)
and (g), II(b) and (d) and III(a), (b), (c), (d), (e) and (g) of this Letter
Amendment and Waiver shall become effective as of the date first above written
when, and only when, on or before May 15, 1998, (x) the conditions set forth in
clauses (a), (b) and (c) of the immediately preceding sentence shall have been
satisfied, (y) the High Yield Date shall have occurred and (z) the warrants
issued pursuant to the Second Warrant Agreement have been redeemed or
repurchased. This Letter Amendment and Waiver is subject to the provisions of
Section 8.01 of the Credit Agreement.
The Credit Agreement, the Notes and each of the other Loan
Documents, except to the extent of the waivers specifically provided above, and
as specifically amended by this Letter Amendment and Waiver, are and shall
continue to be in full force and effect and are hereby in all respects ratified
and confirmed. Without limiting the generality of the foregoing, the Collateral
Documents and all of the Collateral described therein do and shall continue to
secure the payment of all Obligations of the Loan Parties under the Loan
Documents, in each case as amended by this Letter Amendment and Waiver. The
execution, delivery and effectiveness of this Letter Amendment and Waiver shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of any Lender or any Agent, under any of the Loan Documents, nor
constitute a waiver of any provision of the Loan Documents. Nothing in this
Letter Amendment and Waiver shall affect the rights of the parties to the Credit
Agreement or the other Loan Documents except as expressly provided in Sections
I, II and III.
If you agree to the terms and provisions of this Letter Amendment
and Waiver, please evidence such agreement by executing a counterpart of this
Letter Amendment and Waiver. Please send at least one executed signature page to
this Letter Amendment and Waiver by telecopier to Philip R. Strauss at (212)
848-7179 and at least five original signature pages to this Letter Amendment and
Waiver to Shearman & Sterling, 599 Lexington Ave., New York, NY 10022,
Attention: Philip R. Strauss.
This Letter Amendment and Waiver may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Letter Amendment and Waiver by
telecopier shall be effective as delivery of a manually executed counterpart of
this Letter Amendment and Waiver.
106
9
This Letter Amendment and Waiver shall be governed by, and construed
in accordance with, the laws of the State of New York.
Very truly yours,
APC HOLDING, INC. (to be renamed
Indesco International, Inc.)
By /s/
_________________________
Title:
Agreed as of the date first above written:
NATIONSBRIDGE, L.L.C.,
individually and as Administrative Agent
By /s/
______________________________
Title:
NATIONSCREDIT COMMERCIAL
CORPORATION,
individually and as Collateral Agent
By /s/
______________________________
Title:
107
BANKBOSTON, N.A.
By /s/
______________________________
Title:
108
BHF-BANK AKTIENGESELLSCHAFT
By /s/
______________________________
Title:
By /s/
______________________________
Title:
109
CREDITANSTALT CORPORATE
FINANCE, INC.
By /s/
______________________________
Title:
110
TORONTO DOMINION (TEXAS), INC.
By /s/
______________________________
Title:
111
WRAP TWO & CO.
By /s/
______________________________
Title:
112
SALKELD & CO
By /s/
______________________________
Title:
113
CREDIT AGRICOLE INDOSUEZ
By /s/
______________________________
Title:
By /s/
______________________________
Title:
114
PAM CO. CAYMAN LTD.
By: Protective Asset Management
Company, as Collateral Manager
By /s/
______________________________
Title:
115
NATIONSBANK, N.A. CREDIT
DERIVATIVES, RE: HARCH
By /s/
______________________________
Title:
116
NATIONSBANK, N.A. CREDIT
DERIVATIVES, RE: SHENKMAN
By /s/
______________________________
Title:
117
TCW LEVERAGED INCOME TRUST, L.P.
By: TCW Advisers (Bermuda) Ltd., as
General Partner
By /s/
---------------------------
Title:
By: TCW Investment Management
Company, as Investment Adviser
By /s/
--------------------------
Title:
118
CONTINENTAL ASSURANCE COMPANY
SEPARATE ACCOUNT (E)
By: TCW Asset Management Company,
as Attorney-in-Fact
By /s/
_____________________________
Title:
119
CONSENT
Dated as of February 4, 1998
Each of the undersigned, each a Grantor or Guarantor under the
Security Agreement and/or the Subsidiary Guaranty and/or the Parent Guaranty,
each dated or dated as of February 4, 1998 (collectively, the "Agreements") and
in favor of the Administrative Agent, hereby consents to the foregoing Letter
Amendment and Waiver and hereby confirms and agrees that (a) notwithstanding the
effectiveness of such Letter Amendment and Waiver, the Agreements are, and shall
continue to be, in full force and effect and are hereby ratified and confirmed
in all respects, and (b) the Collateral Documents to which each Grantor and/or
Guarantor is a party and all collateral described therein do, and shall continue
to, secure the payment of all of the Secured Obligations (in each case, as
defined therein). Nothing in this Consent shall affect the rights of the parties
to the Credit Agreement or the other Loan Documents except as expressly provided
in Sections I, II and III of such Letter Amendment and Waiver.
AFA HOLDINGS CO. (to be
renamed Indesco Holdings Co.)
By /s/
_______________________
Title:
AFA PRODUCTS, INC.
By /s/
_______________________
Title
CONTINENTAL ACQUISITION
CORP.
By /s/
_______________________
Title:
120
ANNEX A
to
Letter Amendment and Waiver No. 1
Schedule 4.01(a)
Parent Ownership
[see attached]
121
SCHEDULE 4.01(a)
OWNERSHIP OF AFA HOLDINGS CO.
Shareholder Ownership Shareholder Ownership
- ----------- --------- ---------------------
Ariel Gratch 10.95% 109.50 Shares
Yehochai Schneider 10.95% 109.50 Shares
AFA International Limited 51.1% 511.00 Shares
Waldock Limited 9.5% 95.00 Shares
(warrant)
NationsCredit Commercial 17.5% 175.00 Shares
Corporation (warrant) -------------
1000 Shares
* Does not take account of issuance of "contingent" warrants to NationsBank
for 196.138 shares of common stock (15% ownership).
* On a fully diluted basis.
* Does not take account of issuance by the Parent of shares of its common
stock and/or stock options and/or stock appreciation rights representing
in the aggregate approximately 10% of the outstanding capital stock of the
Parent on a fully diluted basis, pursuant to a permitted Stock Plan of the
Parent under Section 7(a) of the Parent Guaranty.
122
ANNEX B
to
Letter Amendment and Waiver No. 1
Exhibit A to the Parent Guaranty
[see attached]
123
INDESCO INTERNATIONAL, INC.
LETTER AMENDMENT NO. 2
Dated as of February 4, 1998
To the Lender Parties party to the
Credit Agreement referred to
below, to NationsBridge, L.L.C.,
as Administrative Agent, and
NationsCredit Commercial
Corporation, as Collateral Agent
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of February 4, 1998 among
Indesco International, Inc. (formerly known as APC Holding, Inc.), a Delaware
corporation (the "Borrower"), the banks, financial institutions and other
institutional lenders party thereto, NationsCredit Commercial Corporation, as
collateral agent, and NationsBridge, L.L.C., as administrative agent, as amended
by Letter Amendment and Waiver No.1 dated as of February 4, 1998 (said Agreement
as so amended being the "Credit Agreement"). Capitalized terms used and not
otherwise defined in this Letter Amendment ("Letter Amendment") have the
meanings assigned to such terms in the Credit Agreement.
The definition of "Related Documents" contained in Section 1.01 of
the Credit Agreement is, effective as of the date of this Letter Amendment,
amended by adding immediately after the reference to "Second Warrant
Agreement,":
"the warrants to purchase 525,000 shares of the Parent's Class
B common stock issued to Afa International Limited and the warrants
to purchase 350,000 shares of the Parent's Class B common stock
issued to Ariel Gratch,".
124
2
The definition of "Subordinated Notes" contained in Section 1.01 of
the Credit Agreement is, effective as of the date of this Letter Amendment,
amended in full to read as follows:
"'Subordinated Notes' means (a) the subordinated promissory
notes dated July 29, 1997 made by the Parent to Afa International
Limited in the principal amount of $1,000,000 and to Waldock Limited
in the principal amount of $2,000,000 and (b) after the issuance
thereof, (i) the subordinated promissory note made by the Parent to
Afa International Limited in the principal amount of $1,500,000,
which note may be prepayable at any time in cash or by the issuance
of warrants for 525,000 shares of Class B common stock of the
Parent, and which note shall otherwise be in form and substance
satisfactory to the Administrative Agent and (ii) the subordinated
promissory note made by the Parent to Ariel Gratch in the principal
amount of $1,000,000, which note may be prepayable at any time in
cash or by the issuance of warrants for 350,000 shares of Class B
common stock of the Parent, subject, however, to the terms of the
Loan Documents, and which note shall otherwise be in form and
substance satisfactory to the Administrative Agent, in each case as
such notes may be amended, supplemented or otherwise modified from
time to time in accordance with their terms, to the extent permitted
in accordance with the Loan Documents."
Clause (vii) of Section 7(b) of the Parent Guaranty is, effective as
of the date of this Letter Amendment, hereby amended in full to read as follows:
"(vii) after the High Yield Date, if the Borrower is permitted
to declare and pay cash dividends to the Parent for such purpose,
the Parent may prepay all or a portion of the Subordinated Notes in
accordance with the terms thereof, in an amount not to exceed 50% of
the Excess Cash Flow for the immediately preceding Fiscal Year;
provided, however, that notwithstanding the foregoing limitations,
so long as no Default shall have occurred and be continuing, with
respect to the Subordinated Notes to be issued in the amounts of
$1,500,000 and $1,000,000 on April 23, 1998 to Afa International
Limited and to Ariel Gratch, respectively, the Guarantor may elect
to prepay such notes through the issuance of warrants to purchase
525,000 shares and 350,000 shares, respectively, of the Guarantor's
Class B common stock; provided that such warrants, and the terms of
such warrants shall provide that such warrants, may not be redeemed
or purchased by the Guarantor at any time until all Advances then
outstanding have been prepaid, and all other amounts then due and
payable under the Credit Agreement have been paid in full and all
Commitments have been terminated and
125
3
the holders of such warrants shall have no right to cause the
Guarantor to redeem or purchase such warrants as a result of such
prepayments or termination;"
This Letter Amendment shall become effective as of the date first
above written when, and only when, the Administrative Agent shall have received
(a) counterparts of this Letter Amendment executed by the undersigned and the
Required Lenders or, as to any of the Lenders, advice satisfactory to the
Administrative Agent that such Lender has executed this Letter Amendment and (b)
the consent attached hereto executed by each Loan Party (other than the
Borrower). This Letter Amendment is subject to the provisions of Section 8.01 of
the Credit Agreement.
The Credit Agreement, the Notes and each of the other Loan
Documents, as specifically amended by this Letter Amendment, are and shall
continue to be in full force and effect and are hereby in all respects ratified
and confirmed. Without limiting the generality of the foregoing, the Collateral
Documents and all of the Collateral described therein do and shall continue to
secure the payment of all Obligations of the Loan Parties under the Loan
Documents, in each case as amended by this Letter Amendment. The execution,
delivery and effectiveness of this Letter Amendment shall not, except as
expressly provided herein, operate as a waiver of any right, power or remedy of
any Lender or any Agent, under any of the Loan Documents, nor constitute a
waiver of any provision of the Loan Documents.
If you agree to the terms and provisions of this Letter Amendment,
please evidence such agreement by executing a counterpart of this Letter
Amendment. Please send at least one executed signature page to this Letter
Amendment by telecopier to Philip R. Strauss at (212) 848-7179 and at least five
original signature pages to this Letter Amendment to Shearman & Sterling, 599
Lexington Ave., New York, NY 10022, Attention: Philip R. Strauss.
This Letter Amendment may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of a
signature page to this Letter Amendment by telecopier shall be effective as
delivery of a manually executed counterpart of this Letter Amendment.
[The Rest of this Page Intentionally Left Blank]
126
This Letter Amendment shall be governed by, and construed in
accordance with, the laws of the State of New York.
Very truly yours,
INDESCO INTERNATIONAL, INC.
(Formerly known as APC Holding, Inc.)
By /s/
_________________________
Title:
Agreed as of the date first above written:
NATIONSBRIDGE, L.L.C.,
individually and as Administrative Agent
By /s/
_________________________
Title:
NATIONSCREDIT COMMERCIAL
CORPORATION,
individually and as Collateral Agent
By /s/
_________________________
Title:
127
BANKBOSTON, N.A.
By /s/
_________________________
Title:
128
BHF-BANK AKTIENGESELLSCHAFT
By /s/
_________________________
Title:
By /s/
_________________________
Title:
129
CREDITANSTALT CORPORATE
FINANCE, INC.
By /s/
_________________________
Title:
130
TORONTO DOMINION (TEXAS), INC.
By /s/
_________________________
Title:
131
WRAP TWO & CO.
By /s/
_________________________
Title:
132
SALKELD & CO
By /s/
_________________________
Title:
133
CREDIT AGRICOLE INDOSUEZ
By /s/
_________________________
Title:
By /s/
_________________________
Title:
134
PAM CO. CAYMAN LTD.
By: Protective Asset Management
Company, as Collateral Manager
By /s/
_________________________
Title:
135
NATIONSBANK, N.A. CREDIT
DERIVATIVES, RE: HARCH
By /s/
_________________________
Title:
136
NATIONSBANK, N.A. CREDIT
DERIVATIVES, RE: SHENKMAN
By /s/
_________________________
Title:
137
TCW LEVERAGED INCOME TRUST, L.P.
By: TCW Advisers (Bermuda) Ltd., as
General Partner
By /s/
______________________________
Title:
By: TCW Investment Management
Company, as Investment Adviser
By /s/
____________________________
Title:
138
CONTINENTAL ASSURANCE COMPANY
SEPARATE ACCOUNT (E)
By: TCW Asset Management Company,
as Attorney-in-Fact
By /s/
_____________________________
Title:
139
CONSENT
Dated as of February 4, 1998
Each of the undersigned, each a Grantor or Guarantor under the
Security Agreement and/or the Subsidiary Guaranty and/or the Parent Guaranty,
each dated or dated as of February 4, 1998 (collectively, the "Agreements") and
in favor of the Administrative Agent, hereby consents to the foregoing Letter
Amendment and Waiver and hereby confirms and agrees that (a) notwithstanding the
effectiveness of such Letter Amendment and Waiver, the Agreements are, and shall
continue to be, in full force and effect and are hereby ratified and confirmed
in all respects, and (b) the Collateral Documents to which each Grantor and/or
Guarantor is a party and all collateral described therein do, and shall continue
to, secure the payment of all of the Secured Obligations (in each case, as
defined therein). Nothing in this Consent shall affect the rights of the parties
to the Credit Agreement or the other Loan Documents except as expressly provided
in Sections I, II and III of such Letter Amendment and Waiver.
INDESCO HOLDINGS CO.
(Formerly AFA Holdings Co.)
By /s/
_______________________
Title:
AFA PRODUCTS, INC.
By /s/
_______________________
Title
CONTINENTAL ACQUISITION
CORP.
By /s/
_______________________
Title: