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EXHIBIT 10.17
EXECUTION COPY
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
WITH
JASON INCORPORATED,
THE LENDERS PARTY HERETO,
THE FIRST NATIONAL BANK OF CHICAGO, AS AGENT
March 3, 1999
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EXHIBITS
EXHIBIT A - Note
EXHIBIT B - Opinion
EXHIBIT C - Compliance Certificate
Schedule I to Compliance Certificate
EXHIBIT D - Assignment Agreement
Exhibit I to Assignment Agreement
(Notice of Assignment)
SCHEDULES
SCHEDULE 1-A - Unrestricted Subsidiaries
SCHEDULE 5.7 - Litigation and Contingent Obligations
SCHEDULE 5.8 - Subsidiaries
SCHEDULE 5.14 - Ownership of Properties
SCHEDULE 6.13 - Investments
SCHEDULE 6.15 - Permitted Liens
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of
March 3, 1999, is among Jason Incorporated, a Wisconsin corporation, the
Lenders, The First National Bank of Chicago, as Agent, and amends and restates
in its entirety the Original Credit Agreement. The parties hereto agree as
follows:
ARTICLE I
DEFINITIONS; EFFECTIVENESS AND ASSUMPTIONS
1.1. Definitions. As used in this Agreement:
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or division thereof,
whether through purchase of assets, merger or otherwise or (ii) directly or
indirectly acquires (in one transaction or as the most recent transaction in a
series of transactions at least a majority (in number of vote) of the securities
of a corporation which have ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) or a majority (by percentage of voting power) of the outstanding
partnership interests of a partnership.
"Advance" means a borrowing hereunder consisting of the
aggregate amount of the several Revolving Loans made by the Lenders to the
Borrower of the same Type and, in the case of Eurodollar Rate Advances, for the
same Interest Period.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such Person.
A Person shall be deemed to control another Person if the controlling Person
owns 10% or more of any class of voting securities (or other ownership
interests) of the controlled Person or possesses, directly or indirectly, the
power to direct or cause the direction of the management or policies of the
controlled Person, whether through ownership of stock, by contract or otherwise.
"Agent" means The First National Bank of Chicago in its
capacity as contractual representative for the Lenders pursuant to Article X
hereof (and not in its individual capacity as a Lender or in its capacity as
Collateral Agent), and any successor Agent appointed pursuant to Article X
hereof.
"Aggregate Commitment" means the aggregate of the Commitments
of all the Lenders, as reduced from time to time pursuant to the terms hereof.
"Agreement" means this Second Amended and Restated Credit
Agreement, as it may be amended, restated, supplemented or otherwise modified
and in effect from time to time.
"Agreement Accounting Principles" means generally accepted
accounting principles as in effect on December 31, 1997, applied in a manner
consistent with that used in preparing the financial statements referred to in
Section 5.4 hereof.
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"Alternate Base Rate" means, for any day, a fluctuating rate
of interest per annum equal to the higher of (i) the Corporate Base Rate for
such day and (ii) the sum of (a) the Federal Funds Effective Rate for such day
and (b) one-half of one percent (1/2%) per annum.
"Applicable Commitment Fee Rate" means, one-quarter of one
percent (0.25%) per annum, as adjusted from time to time thereafter pursuant to
Section 2.19.
"Applicable L/C Fee Rate" means, three-quarters of one percent
(0.75%) per annum, as adjusted from time to time thereafter pursuant to Section
2.19.
"Asset Sale" means the sale, lease or other disposition by the
Borrower or any Restricted Subsidiary to any Person (other than the Borrower or
any Restricted Subsidiary) of any property of the Borrower or such Restricted
Subsidiary (other than sales or consignments of inventory in the ordinary course
of business).
"Authorized Officer" means any of the Chairman, CEO, President
or Controller of the Borrower, acting singly.
"Available Commitment" means, with respect to any Lender, the
difference between (a) the amount of such Lender's Commitment and (b) the sum of
(i) the outstanding principal balance of Revolving Loans made by such Lender and
(ii) such Lender's L/C Interests .
"Benefited Parties" shall have the meaning set forth in the
Intercreditor Agreement.
"Borrower" means Jason Incorporated, a Wisconsin corporation,
and its successors and assigns, including a debtor-in-possession on behalf of
Borrower.
"Borrowing Date" means a date on which an Advance is made
hereunder.
"Borrowing Notice" is defined in Section 2.7 hereof.
"Business Day" means (i) with respect to any borrowing,
payment or rate selection of Loans bearing interest at the Eurodollar Rate, a
day (other than a Saturday or Sunday) on which banks are open for business in
Chicago and New York and on which dealings in United States dollars are carried
on in the London interbank market and (ii) for all other purposes a day (other
than a Saturday or Sunday) on which banks are open for business in Chicago.
"Capitalized Lease" of a Person means any lease of property by
such Person as lessee which would be capitalized on a balance sheet of such
Person prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount
of the obligations of such Person under Capitalized Leases which would be
capitalized on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Cash Interest Expense" means, for any period, total interest
expense for such period, whether paid or accrued, in accordance with Agreement
Accounting Principles,
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including, without limitation, all commissions, discounts and other fees and
charges owed with respect to all letters of credit and net costs under Hedging
Agreements, but excluding interest expense not payable in cash (including
amortization of discount).
"Change in Control" means (i) individuals who constitute the
Board of Directors of the Borrower on the date hereof (the "Incumbent Board")
cease for any reason to constitute at least a majority thereof, provided that
any person becoming a director subsequent to the date hereof whose election, or
nomination for election by the Borrower's shareholders, was approved by a vote
of at least three-fourths of the directors comprising the Incumbent Board
(either by a specific vote or by approvals of the proxy statement of the
Borrower in which such person is named as a nominee for director, without
objection to such nomination) ("Incumbent Board Vote") shall be, for the purpose
of this clause (i), considered as though such person were a member of the
Incumbent Board; (ii) any "person" (as such term is defined in Section 14(d) of
the Securities Exchange Act of 1934 (the "Exchange Act")), other than the "Key
Executives" (as defined below), is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of 30% or more of
the combined voting power of the Borrower's outstanding securities ordinarily
having the right to vote at elections of directors; or (iii) Mark Train and
Vincent L. Martin (the "Key Executives") collectively cease to own or control,
directly or indirectly, more than twenty-five percent (25%) of the combined
voting power of the Borrower's outstanding securities ordinarily having the
right to vote at elections of directors; provided that if either of the Key
Executives dies and the Incumbent Board votes to confirm, in the case of Mr.
Martin and approve, in the case of Mr. Train, the appointment of the surviving
Key Executive as Chief Executive Officer of the Borrower by an Incumbent Board
Vote, no Change of Control shall be deemed to have occurred thereby.
"Code" means the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time, and includes any successor
statute thereof.
"Collateral" means all property and interests in property now
owned or hereafter acquired by Borrower in or upon which a security interest,
lien or mortgage is granted to the Collateral Agent, for the benefit of the
Benefited Parties, or to the Agent, for the benefit of the Lenders, whether
under the Security Agreement, under any of the Collateral Documents or under any
of the other Loan Documents.
"Collateral Agent" shall mean First Chicago in its capacity as
collateral agent pursuant to the terms of the Intercreditor Agreement, or any
successor collateral agent appointed pursuant to the terms of the Intercreditor
Agreement.
"Collateral Documents" shall mean all agreements, instruments
and documents executed in connection with this Agreement, including, without
limitation, the Intercreditor Agreement, the Security Agreement and all other
security agreements, loan agreements, notes, guarantees, mortgages, leasehold
mortgages, deeds of trust, subordination agreements, pledges, powers of
attorney, consents, assignments, contracts, fee letters, notices, leases,
financing statements and all other written matter whether heretofore, now, or
hereafter executed by or on behalf of Borrower or any of its Subsidiaries and
delivered to the Agent, the Collateral Agent or any of the Lenders, together
with all amendments and supplements thereto and modifications and restatements
thereof, and all agreements and documents referred to therein or contemplated
thereby.
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"Commitment" means, for each Lender, the obligation of such
Lender to make Revolving Loans and to purchase participations in Letters of
Credit, not exceeding the amount set forth opposite its signature below, as such
amount may be modified from time to time pursuant to the terms hereof.
"Contingent Obligation" of a Person means any agreement,
undertaking or arrangement by which such Person assumes, guarantees, endorses,
contingently agrees to purchase or provide funds for the payment of, or
otherwise becomes or is contingently liable upon, the obligation or liability of
any other Person, or agrees to maintain the net worth or working capital or
other financial condition of any other Person, or otherwise assures any creditor
of such other Person against loss, including, without limitation, any comfort
letter, operating agreement, take-or-pay contract or application for a letter of
credit.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower or any of its Subsidiaries, are
treated as a single employer under Section 414 of the Code.
"Corporate Base Rate" means the corporate base of interest
announced by First Chicago from time to time, changing when and as said
corporate base rate changes.
"Default" means an event described in Article VII hereof.
"EBIT" means, for any period, the sum of (a) earnings before
income taxes for such period and (b) interest expense for such period.
"Effective Date" shall have the meaning set forth in Section
1.3 hereof.
"Environmental Lien" shall mean a lien in favor of any
governmental entity for (a) any liability under federal or state environmental
laws or regulations, or (b) damages arising from, or costs incurred by such
governmental entity in response to, a release or threatened release of a
hazardous or toxic waste, substance or constituent or other substance into the
environment.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time including (unless the context otherwise
requires) any rules or regulations promulgated thereunder.
"Estimated Net Cash Proceeds" means, with respect to any Asset
Sale, the Borrower's good faith estimate of the amount of Net Cash Proceeds to
be received in connection with such Asset Sale, prior to the actual consummation
of such Asset Sale.
"Eurodollar Advance" means an Advance which bears interest at
the Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar
Loan for the relevant Interest Period, the rate determined by the Agent to be
the rate at which deposits in U.S. dollars are offered by First Chicago to
first-class banks in the London interbank market at approximately 11 a.m.
(London time) two Business Days prior to the first day of such Interest Period,
in the
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approximate amount of First Chicago's relevant Eurodollar Loan and having a
maturity approximately equal to such Interest Period, as adjusted for Reserves.
"Eurodollar Loan" means a Revolving Loan, or portion thereof,
which bears interest at the Eurodollar Rate.
"Eurodollar Margin" means three-quarters of one percent
(0.75%) per annum, as adjusted from time to time pursuant to Section 2.19.
"Eurodollar Rate" means, with respect to a Eurodollar Loan for
the relevant Interest Period, the Eurodollar Base Rate applicable to such
Interest Period plus the then applicable Eurodollar Margin. The Eurodollar Rate
shall be rounded to the next higher multiple of 1/16 of 1% if the rate is not
such a multiple.
"Federal Funds Effective Rate" means, for any day, an interest
rate per annum equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published for such day (or, if such day is
not a Business Day, for the immediately preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations at approximately 10 a.m.
(Chicago time) on such day on such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by the Agent in its sole
discretion.
"First Chicago" means The First National Bank of Chicago, in
its individual capacity, and its successors.
"Floating Rate" means, for any day, a rate per annum equal to
(i) the Alternate Base Rate for such day plus (ii) the then applicable Floating
Rate Margin, changing when and as the Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which bears interest
at the Floating Rate.
"Floating Rate Loan" means a Revolving Loan which bears
interest at the Floating Rate.
"Floating Rate Margin" shall be zero percent (0.00%) per annum
as adjusted from time to time pursuant to Section 2.19.
"Funded Debt" means Indebtedness of the Borrower and its
Subsidiaries which by its terms is due more than one year from the date of the
creation thereof or which may be extended or renewed at the option of the
Borrower or any Subsidiary to a date more than one year from such date.
"Hedging Agreements" means any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto from the
fluctuations of interest rates, exchange rates or forward rates applicable to
such party's assets, liabilities or exchange transactions, including, but not
limited to, dollar-denominated or cross-currency interest rate
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exchange agreements, forward currency exchange agreements, interest rate swap,
cap or collar protection agreements, forward rate currency or interest rate
options, puts and warrants.
"Indebtedness" of a Person means such Person's (i) obligations
for borrowed money, (ii) obligations representing the deferred purchase price of
property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) Capitalized Lease Obligations, (vi) Rate Hedging Obligations,
(vii) Contingent Obligations, (viii) Off Balance Sheet Liabilities and (ix)
obligations for which such Person is obligated pursuant to a letter of credit,
including, in the case of the Borrower, Reimbursement Obligations under the
Letters of Credit.
"Intercreditor Agreement" shall mean that certain
Intercreditor Agreement dated as of June 27, 1991 by and among the Lenders, the
Agent, the Collateral Agent and the holders of the Senior Debt, as such
agreement has been and may hereafter be amended, restated, supplemented or
otherwise modified from time to time.
"Interest Coverage Ratio" means, for any period, the ratio of
(a) Borrower's EBIT for such period to (b) Borrower's Cash Interest Expense for
such period.
"Interest Expense" means, for any period, total interest
expense for such period, whether paid or accrued, in accordance with Agreement
Accounting Principles.
"Interest Period" means, with respect to a Eurodollar Loan, a
period of one (1), two (2), three (3) months or, subject to availability, six
(6) months commencing on a Business Day selected by the Borrower pursuant to
this Agreement. Such Interest Period shall end on (but exclude) the day which
corresponds numerically to such date one, two, three or six months thereafter;
provided, however, that if there is no such numerically corresponding day in
such next, second, third or sixth succeeding month, such Interest Period shall
end on the last Business Day of such next, second, third or sixth succeeding
month. If an Interest Period would otherwise end on a day which is not a
Business Day, such Interest Period shall end on the next succeeding Business
Day, provided, however, that if said next succeeding Business Day falls in a new
calendar month, such Interest Period shall end on the immediately preceding
Business Day.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade), deposit account or contribution of capital by such Person to any other
Person or any investment in, or purchase or other acquisition of, the stock,
partnership interests, notes, debentures or other securities of any other Person
made by such Person.
"L/C Draft" means a draft drawn on the Agent pursuant to a
Letter of Credit.
"L/C Interest" shall have the meaning ascribed to such term in
Section 2.17(ii).
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"L/C Obligations" means an amount equal to the aggregate of
the amount then available for drawing under each of the Letters of Credit and
the face amounts of all outstanding L/C Drafts corresponding to the Letters of
Credit, which L/C Drafts have been accepted by the Agent.
"Lenders" means the lending institutions listed on the
signature pages of this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the
Agent, any office, branch, Subsidiary or affiliate of such Lender or the Agent.
"Letter of Credit" means, collectively, the letters of credit
to be issued by the Agent pursuant to Section 2.17 hereof.
"Leverage Ratio" means, at any time, the ratio of (a) the
total amount of the Borrower's Funded Debt at such time to (b) the Borrower's
Net Worth at such time.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan Documents" means this Agreement, the Notes and the other
Collateral Documents and all other documents, instruments and agreements
executed in connection therewith or contemplated thereby.
"Material Adverse Change" means a change in the business,
properties, prospects, condition (financial or otherwise) or results of
operations of the Borrower and its Subsidiaries which is likely to have a
Material Adverse Effect.
"Material Adverse Effect" means a material adverse effect on
(i) the business, properties, condition (financial or otherwise), results or
operations, or prospects of the Borrower and its Subsidiaries taken as a whole,
(ii) the ability of the Borrower to perform its obligations under the Loan
Documents, or (iii) the validity or enforceability of any of the Loan Documents
or the rights or remedies of the Agent, the Collateral Agent or the Lenders
thereunder.
"Multiemployer Plan" means a Plan maintained pursuant to a
collective bargaining agreement or any other arrangement to which the Borrower
or any member of the Controlled Group is party to which more than one employer
is obligated to make contributions.
"Net Cash Proceeds" shall mean the cash proceeds of Asset
Sales net of the costs of disposition, taxes paid or payable as a result thereof
and amounts applied to the repayment of Indebtedness (other than the "Benefited
Obligations" as defined in the Intercreditor Agreement) secured by a Lien on the
assets which were the subject of such Asset Sale.
"Net Worth" means the aggregate amount of common shareholder's
equity as determined from a consolidated balance sheet of the Borrower, prepared
in accordance with Agreement Accounting Principles.
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"Note" means a promissory note, in substantially the form of
Exhibit A hereto, duly executed by the Borrower and payable to the order of a
Lender in the amount of its Commitment, including any amendment, restatement,
modification, renewal or replacement of such Note.
"Notice of Assignment" is defined in Section 12.3.2. hereof.
"Obligations" means all unpaid principal of and accrued and
unpaid interest (whether or not allowed) on the Notes, all L/C Obligations, all
accrued and unpaid fees and all expenses, reimbursements, indemnities and other
obligations of the Borrower to the Lenders or to any Lender, the Agent, the
Collateral Agent or any indemnified party hereunder arising under the Loan
Documents and all obligations of the Borrowers to any Lender or the Agent under
any Hedging Agreements.
"Off Balance Sheet Liabilities" of a Person means (a) any
repurchase obligation of liability of such Person or any of its Subsidiaries
with respect to accounts or notes receivable sold by such Person or any of its
Subsidiaries, (b) any liability under any sale and leaseback transactions which
do not create a liability on the consolidated balance sheet of such Person, (c)
any liability under any financing lease or so-called "synthetic" lease
transaction or tax retention operating lease transaction or (d) any obligations
arising with respect to any other transaction which is the functional equivalent
of or takes the place of borrowing and which has an implied, attributable or
actual interest component which is deductible for federal tax purposes but which
does not constitute a liability on the consolidated balance sheets of such
Person and its Subsidiaries. Off-Balance Sheet Liabilities for any Person shall
not include obligations of such Person arising with respect to an operating
lease of any property or asset (other than a Capitalized Lease ) by such Person
as lessee which does not include any attributable interest component which is
deductible for federal tax purposes.
"Original Credit Agreement" means that certain Amended and
Restated Credit Agreement dated as of January 28, 1994 among Jason Incorporated,
a Delaware corporation, the financial institutions party thereto as "Lenders,"
The First National Bank of Chicago, as "Agent" thereunder, and The First
National Bank of Boston, as "Co-Agent" thereunder.
"Participants" is defined in Section 12.2.1 hereof.
"Payment Date" means the last Business Day of each calendar
month.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Percentage" means, with respect to any Lender, the amount
obtained by dividing such Lender's Commitment by the Aggregate Commitment,
expressed as a percentage.
"Permitted Equipment Sales" means (i) the sale of any
Equipment which is contemporaneously replaced with Equipment of equal or greater
value performing the same or a similar function as the Equipment sold and (ii)
in addition to the sales of Equipment permitted in clause (i) above, sales of
Equipment in an aggregate amount of $500,000 and sales of Equipment
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aggregating less than $100,000 in a single transaction in any calendar year
after the $500,000 level has been reached.
"Permitted Purchase Money Indebtedness" means indebtedness
contemporaneously incurred or assumed for the purpose of financing seventy-five
percent (75%) or more of the acquisition, construction, repair or improvement
cost of any fixed assets; provided that the aggregate amount of all such
indebtedness shall not exceed $2,000,000 in the aggregate at any time
outstanding.
"Person" means any natural person, corporation, firm, joint
venture, partnership, association, enterprise, trust or other entity or
organization, or any government or political subdivision or any agency,
department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered
by Title IV of ERISA or subject to the minimum funding standards under Section
412 of the Code as to which the Borrower or any member of the Controlled Group
may have any liability.
"Purchasers" is defined in Section 12.3.1. hereof.
"Rate Hedging Obligations" of a Person means any and all
obligations of such Person, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor), under Hedging
Agreements, and any and all cancellations, buy backs, reversals, terminations or
assignments thereof.
"Rate Option" means the Eurodollar Rate or the Floating Rate.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor
thereto or other regulation or official interpretation of said Board of
Governors relating to reserve requirements applicable to member banks of the
Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors relating
to the extension of credit by banks for the purpose of purchasing or carrying
margin stocks applicable to member banks of the Federal Reserve System.
"Reimbursement Obligations" is defined in Section 2.17(iii)
hereof.
"Rentals" of a Person means the aggregate fixed amounts
payable by such Person under any lease of real or personal property having an
original term (including any required renewals or any renewals at the option of
the lessor or lessee) of one year or more but does not include any amounts
payable under Capitalized Leases of such Person.
"Reportable Event" means a reportable event as defined in
Section 4043 of ERISA and the regulations issued under such section, with
respect to a Plan, excluding, however, such events as to which the PBGC by
regulation waived the requirement of Section 4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event, provided, however, that
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a failure to meet the minimum funding standards of Section 412 of the Code and
of Section 302 of ERISA shall be a Reportable Event regardless of the issuance
of any such waiver of the notice requirement in accordance with either Section
4043(a) of ERISA or Section 412(d) of the Code.
"Required Lenders" means Lenders in the aggregate holding at
least 62-1/2% of the aggregate outstanding principal balance of the Revolving
Loans or, if there are no Revolving Loans outstanding, Lenders in the aggregate
having at least 62-1/2% of the Aggregate Commitment.
"Reserves" shall mean the maximum reserves requirement, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) with respect to "Eurocurrency liabilities" or in respect of any other
category of liabilities which includes deposits by reference to which the
interest rate on Eurodollar Loans is determined or category of extensions of
credit or other assets which includes loans by a non-United States office of any
Lender to United States residents.
"Restricted Subsidiary" of a Person means (i) any corporation
(other than an Unrestricted Subsidiary) more than 50% of the outstanding
securities having ordinary voting power of which shall at the time be owned or
controlled, directly or indirectly, by such Person or by one or more of its
Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii) any
partnership, association, joint venture or similar business organization (other
than an Unrestricted Subsidiary) more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Restricted
Subsidiary" shall mean a Restricted Subsidiary of the Borrower.
"Revolving Loan" means, with respect to a Lender, such
Lender's portion of any Advance made pursuant to Section 2.1.
"Secured Obligations" means, collectively, (i) the Obligations
and (ii) all Rate Hedging Obligations owing by the Borrower to one or more of
the Lenders or one or more of their affiliates.
"Security Agreement" means that certain Security Agreement
dated as of June 27, 1991 executed by the Borrower in favor of the Collateral
Agent for the benefit of the Benefited Parties, as amended, restated,
supplemented or otherwise modified from time to time.
"Senior Debt" means the indebtedness of Borrower evidenced by
those certain: (a) 7.65% Senior Notes due December 1, 2002 ("7.65% Senior
Notes") of the Borrower in the aggregate principal amount of $16,000,000 issued
by the Borrower pursuant to those certain Note Agreements dated as of November
15, 1992 (the "7.65% Senior Note Agreements"), (b) 7.72% Senior Notes due April
27, 2004 ("7.72% Senior Notes") of the Borrower in the aggregate principal
amount of $25,000,000 issued by the Borrower pursuant to those certain Note
Agreements dated as of April 26, 1994 (the "7.72% Senior Note Agreements") and
(c) 7.34% Senior Notes due May 31, 2005 ("7.34% Senior Notes") of the Borrower
in the aggregate principal amount of $20,000,000 issued by the Borrower pursuant
to those certain Note Agreements dated as of April 26, 1994 (the "7.34% Senior
Note Agreements"). The above
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mentioned notes and agreements being collectively referred to herein as the
"Senior Notes" and the "Senior Note Agreements" as the case may be.
"Senior Subordinated Debt" means the indebtedness of Borrower
evidenced by those certain 10.60% Senior Subordinated Notes due October 15, 2000
("Subordinated Notes") of Borrower in the original aggregate principal amount of
$10,000,000 issued by the Borrower pursuant to those certain Note Agreements
dated as of October 1, 1989 (the "Subordinated Note Agreements").
"Single Employer Plan" means a Plan maintained by the Borrower
or any member of the Controlled Group for employees of the Borrower or any
member of the Controlled Group.
"Subordinated Indebtedness" of a Person means any Indebtedness
of such Person the payment of which is subordinated to payment of the Secured
Obligations to the written satisfaction of the Required Lenders, and with
respect to the Borrower, shall include the Senior Subordinated Debt.
"Subsidiary" of a Person means (i) any corporation more than
50% of the outstanding securities having ordinary voting power of which shall at
the time be owned or controlled, directly or indirectly, by such Person or by
one or more of its Subsidiaries or by such Person and one or more of its
Subsidiaries, or (ii) any partnership, association, joint venture or similar
business organization more than 50% of the ownership interests having ordinary
voting power of which shall at the time be so owned or controlled. Unless
otherwise expressly provided, all references herein to a "Subsidiary" shall mean
a Subsidiary of the Borrower and shall include both Restricted Subsidiaries and
Unrestricted Subsidiaries.
"Termination Date" means March 3, 2004.
"Transferee" is defined in Section 12.4 hereof.
"Type" means, with respect to any Revolving Loan, its nature
as a Floating Rate Loan or a Eurodollar Loan.
"Unfunded Liabilities" means the amount (if any) by which the
present value of all vested nonforfeitable benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans, and (ii) in the case of Multiemployer Plans, the withdrawal liability
that would be incurred by the Controlled Group if all members of the Controlled
Group completely withdrew from all Multiemployer Plans.
"Unmatured Default" means an event which, but for the lapse of
time or the giving of notice, or both, would constitute a Default.
"Unrestricted Subsidiary" shall mean the Subsidiaries of
Borrower set forth on Schedule 1-A hereto.
"Year 2000 Issues" means anticipated costs, problems and
uncertainties associated with the inability of certain computer applications to
effectively handle data including dates on and after January 1, 2000, as such
inability affects the business, operations, and
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financial condition of the Borrower and its Subsidiaries and the Borrower's or
its Subsidiaries' material customers, suppliers and vendors.
1.2. Construction of Terms. The defined terms used in this
Agreement shall be equally applicable to both the singular and plural forms of
the defined terms. When an amount is expressed in this Credit Agreement in
United States Dollars in calculating the Borrower's compliance with such
provision where the Borrower or its Subsidiaries deal in a different currency,
the "Exchange Rate" (as defined below) shall be utilized in making such
computation. "Exchange Rate" means, in relation to the purchase of one currency
(for purposes of this definition the "first currency") with another currency
(for purposes of this definition the "second currency") on a given date, the
spot rate of exchange quoted by the Agent for the amount in question, in the
London interbank foreign exchange market at or about 11:00 a.m. London time on
such date for the purchase of the first currency with the second currency.
1.3. Effectiveness of this Agreement. Upon the satisfaction of
all of the conditions precedent set forth in Section 4.1 of this Agreement (the
date upon which such conditions precedent are satisfied being hereinafter
referred to as the "Effective Date"), this Agreement shall become effective and
the Original Credit Agreement be amended and restated in its entirety in
accordance with the provisions of Section 9.14 hereof. Without in any way
limiting the foregoing, upon the effectiveness of this Agreement, any Default or
Unmatured Default which may have arisen as a result of the failure by the
Collateral Agent to have a valid and perfected security interest in and lien on
65% of the outstanding capital stock of Power Brushes Ltd. shall be and is
hereby waived.
ARTICLE II
THE CREDITS
2.1. Revolving Loans. Upon the satisfaction of the conditions
precedent set forth in Sections 4.1 and 4.2 hereof, from and including the date
of this Agreement and prior to the Termination Date, each Lender severally
agrees, on the terms and conditions set forth in this Agreement, to make
Revolving Loans to the Borrower from time to time in amounts not to exceed in
the aggregate at any one time outstanding the difference between (a) such
Lender's Commitment and (b) the aggregate amount of such Lender's L/C Interests.
Subject to the terms of this Agreement, the Borrower may borrow, repay and
reborrow at any time prior to the Termination Date. On the Termination Date, the
Borrower shall repay in full the outstanding principal balance of the Revolving
Loans.
2.2. Ratable Loans. Each Advance consisting of Revolving Loans
shall consist of Revolving Loans made by each Lender ratably in proportion to
such Lender's respective Percentage.
2.3. Rate Options. The Advances may be Floating Rate Advances
or Eurodollar Advances, or a combination thereof, selected by the Borrower in
accordance with Section 2.7. The Borrower may select, in accordance with Section
2.7, Rate Options and Interest Periods
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applicable to the Revolving Loans; provided that there shall be no more than six
Interest Periods in effect with respect to the Revolving Loans at any time.
2.4. Optional Payments; Mandatory Prepayments.
(A) The Borrower may from time to time repay, without penalty
or premium (1) all outstanding Floating Rate Advances, or (2) in a minimum
aggregate amount of $1,000,000 or any integral multiple of $500,000 in excess
thereof, any portion of the outstanding Floating Rate Advances. A Eurodollar
Rate Advance may not be repaid prior to the last day of the applicable Interest
Period.
(B) (1) Upon the sale, transfer or other disposition of any
assets of Borrower (other than sales of the Borrower's inventory in the ordinary
course of its business and Permitted Equipment Sales), the Borrower shall make a
mandatory prepayment of the Revolving Loans in an amount equal to 100% of the
net proceeds thereof, after taxes actually paid; provided, however, that if the
aggregate outstanding principal balance of the Revolving Loans is less than the
net proceeds of such sale, transfer or other disposition, such mandatory
prepayment shall be limited to the aggregate outstanding principal balance of
the Revolving Loans together with all interest and fees related thereto.
(2) If at any time the aggregate outstanding principal balance
of the Revolving Loans shall exceed the Aggregate Commitment minus the L/C
Obligations, then Borrower shall promptly pay to the Agent, for the ratable
account of the Lenders, such amount as may be necessary to eliminate such
excess.
2.5. Revolving Loan Commitment Fee and Reduction of
Commitments. The Borrower agrees to pay to the Agent for the ratable account of
each Lender a commitment fee, accruing at the Applicable Commitment Fee Rate, on
the difference of (a) the daily unborrowed portion of such Lender's Commitment
minus (b) the amount of such Lender's L/C Interests, from the date of this
Agreement to and including the Termination Date, payable on the last Business
Day of each calendar quarter hereafter and on the Termination Date. The Borrower
may permanently reduce the Aggregate Commitment in whole, or in part ratably
among the Lenders in integral multiples of $1,000,000, upon at least five
Business Days' written notice to the Agent, which notice shall specify the
amount of any such reduction; provided, however, that the amount of the
Aggregate Commitment may at no time be reduced below the sum of the aggregate
principal amount of the outstanding Revolving Loans at such time plus the L/C
Obligations at such time. All accrued commitment fees shall be payable on the
effective date of any termination of the obligations of the Lenders to make
Revolving Loans hereunder.
2.6. Method of Borrowing. Not later than 2:00 p.m. (Chicago
time) on each Borrowing Date, each Lender shall make available its Revolving
Loan or Revolving Loans, in funds immediately available in Chicago to the Agent
at its address specified pursuant to Article XIII hereof. The Agent will make
the funds so received from the Lenders available to the Borrower at the Agent's
aforesaid address.
2.7. Method of Selecting Types and Interest Periods for
Advances. The Borrower shall select the Type of Advance and, in the case of each
Eurodollar Advance, the
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Interest Period applicable to each Advance from time to time. The Borrower shall
give the Agent irrevocable notice (a "Borrowing Notice") not later than 10:00
a.m. (Chicago time) on the Borrowing Date of each Floating Rate Advance and
three Business Days before the Borrowing Date for each Eurodollar Advance,
specifying:
(i) the Borrowing Date, which shall be a Business Day, of
such Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the Interest
Period applicable thereto.
Changes in the rate of interest on that portion of any Advance maintained as a
Floating Rate Loan will take effect simultaneously with each change in the
Alternate Base Rate. Each Eurodollar Rate Advance shall bear interest from and
including the first day of the Interest Period applicable thereto to (but not
including) the last day of such Interest Period at the interest rate determined
as applicable to such Eurodollar Rate Advance. The Borrower shall select
Interest Periods so that it is not necessary to repay or prepay all or any
portion thereof bearing interest at the Eurodollar Rate prior to the last day of
the applicable Interest Period in order to make mandatory repayments or
prepayments as required pursuant to the terms hereof.
2.8. Minimum Amount of Each Advance. Each Eurodollar Rate
Advance shall be in the minimum amount of $2,000,000 (and in multiples of
$500,000 if in excess thereof), and each Floating Rate Advance shall be in the
minimum amount of $250,000 (and in multiples of $100,000 if in excess thereof),
provided, however, that any Floating Rate Advance may be in the amount of the
unused Aggregate Commitment.
2.9. Method of Selecting Types and Interest Periods for
Conversion and Continuation of Advances.
(i) Right to Convert. The Borrower may elect from time to
time, subject to the provisions of Section 2.3 and
Section 2.8, to convert all or any part of a
Revolving Loan of any Type into any other Type or
Types of Revolving Loans; provided that any
conversion of any Eurodollar Rate Advance shall be
made on, and only on, the last day of the Interest
Period applicable thereto.
(ii) Automatic Conversion and Continuation. Floating Rate
Advances shall continue as Floating Rate Loans unless
and until such Floating Rate Loans are converted into
Eurodollar Loans. Eurodollar Advances shall continue
as Eurodollar Loans until the end of the then
applicable Interest Period therefor, at which time
such Eurodollar Advances shall be automatically
converted into Floating Rate Advances unless the
Borrower shall have given the Agent notice in
accordance with Section 2.9(iv) requesting that, at
the end of such Interest Period, such Eurodollar Rate
Advances continue as a Eurodollar Loan.
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(iii) No Conversion Post-Default or Post-Unmatured Default.
Notwithstanding anything to the contrary contained in
Section 2.9(i) or 2.9(ii), no Revolving Loan may be
converted into or continued as a Eurodollar Loan
(except with the consent of the Required Lenders)
when any Default or Unmatured Default has occurred
and is continuing.
(iv) Conversion/Continuation Notice. The Borrower shall
give the Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion
of a Revolving Loan or continuation of a Eurodollar
Loan not later than 10:00 a.m. (Chicago time) at
least one Business Day, in the case of a conversion
into a Floating Rate Loan, or three Business Days, in
the case of a conversion into or continuation of a
Eurodollar Loan, prior to the date of the requested
conversion or continuation, specifying: (1) the
requested date (which shall be a Business Day) of
such conversion or continuation; (2) the amount and
Type of the Revolving Loan to be converted or
continued; and (3) the amount and Type(s) of
Revolving Loan(s) into which such Revolving Loan is
to be converted or continued and, in the case of a
conversion into or continuation of a Eurodollar Loan,
the duration of the Interest Period applicable
thereto.
2.10. Default Rate. After the occurrence of a Default, at
the option of the Required Lenders, the Obligations shall bear interest at a
rate per annum equal to the Alternate Base Rate plus the applicable Floating
Rate Margin plus two percent (2.0%).
2.11. Method of Payment. All payments of principal, interest,
and fees hereunder shall be made, without setoff, deduction or counterclaim, in
immediately available funds to the Agent at the Agent's address specified
pursuant to Article XIII, or at any other Lending Installation of the Agent
specified in writing by the Agent to the Borrower, by noon (local time) on the
date when due and shall be made ratably among the Lenders. Each payment
delivered to the Agent for the account of any Lender shall be delivered promptly
by the Agent to such Lender in the same type of funds which the Agent received
at its address specified pursuant to Article XIII or at any Lending Installation
specified in a notice received by the Agent from such Lender. The Agent is
hereby authorized to charge the account of the Borrower maintained with First
Chicago for each payment of principal, interest and fees as it becomes due
hereunder.
2.12. Notes; Telephonic Notices. Each Lender is hereby
authorized to record the principal amount of each of its Revolving Loans and
each repayment with respect to its Revolving Loans on the schedule attached to
its Note; provided, however, the failure to so record shall not affect the
Borrower's obligations under such Note. The Borrower hereby authorizes the
Lenders and the Agent to extend Advances, effect selections of Types of Advances
and to transfer funds based on telephonic notices made by any person or persons
the Agent or any Lender in good faith believes to be acting on behalf of the
Borrower. The Borrower agrees to deliver promptly to the Agent a written
confirmation signed by an Authorized Officer, if such confirmation is requested
by the Agent or any Lender, of each telephonic notice. If the written
confirmation differs in any material respect from the action taken by the Agent
and the Lenders, the telephonic notice shall govern.
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2.13. Interest Payment Dates; Interest and Fee Basis. Interest
accrued on each Floating Rate Loan shall be payable on each Payment Date,
commencing with the first such date to occur after the date hereof, on any date
on which the Floating Rate Loan is prepaid due to acceleration and at maturity.
Interest accrued on each Eurodollar Loan shall be payable on the last day of its
applicable Interest Period, on any date on which the Eurodollar Loan is prepaid,
whether by acceleration or otherwise, and at maturity. Interest accrued on each
Eurodollar Loan having an Interest Period longer than three months shall also be
payable on the last day of each three-month interval during such Interest
Period. Interest shall be payable for the day a Revolving Loan is made but not
for the day of any payment on the amount paid if payment is received prior to
noon (local time) at the place of payment. If any payment of principal of or
interest on a Revolving Loan shall become due on a day which is not a Business
Day, such payment shall be made on the next succeeding Business Day and, in the
case of a principal payment, such extension of time shall be included in
computing interest in connection with such payment.
2.14. Notification of Advances, Interest Rates, Prepayments
and Aggregate Commitment Reductions. Promptly, but in any event not later than
12:00 noon with respect to any Borrowing Notice, after receipt thereof, the
Agent will notify each Lender of the contents of each Aggregate Commitment
reduction notice, Borrowing Notice, Continuation/Conversion Notice, and
repayment notice received by it hereunder. The Agent will notify each Lender of
the interest rate applicable to each Eurodollar Loan promptly upon determination
of such interest rate and will give each Lender prompt notice of each change in
the Alternate Base Rate.
2.15. Lending Installations. Each Lender may book its Loans at
any Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Notes shall be deemed held by each Lender for
the benefit of such Lending Installation. Each Lender may, by written or telex
notice to the Agent and the Borrower, designate a Lending Installation through
which Revolving Loans will be made by it and for whose account Revolving Loan
payments are to be made.
2.16. Non-Receipt of Funds by the Agent. Unless the Borrower
or a Lender, as the case may be, notifies the Agent prior to the date on which
it is scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Revolving Loan or (ii) in the case of the Borrower, a payment of
principal, interest or fees to the Agent for the account of the Lenders, that it
does not intend to make such payment, the Agent may assume that such payment has
been made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (i) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day or (ii) in the case of payment by the
Borrower, the interest rate applicable to the relevant Revolving Loan.
2.17. Letter of Credit Facility.
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(i) Letters of Credit. Upon receipt of duly executed
applications therefor, and such other documents, instructions and agreements as
the Agent may require, and subject to the provisions of Article IV, the Agent
will issue letters of credit for the account of the Borrower, on terms as are
satisfactory to the Agent; provided, however, that no Letter of Credit will be
issued for the account of the Borrower by the Agent if on the date of issuance,
before or after taking such Letter of Credit into account, (a) the aggregate
outstanding amount of the Revolving Loans and the L/C Obligations exceeds the
aggregate amount of the Available Commitment or (b) the aggregate outstanding
amount of the L/C Obligations exceeds $10,000,000 (or such other amount as the
Borrower and the Agent may from time to time mutually agree); and provided,
further, that no Letter of Credit shall be issued which has an expiration date
later than the date which is forty-five (45) Business Days immediately preceding
the Termination Date.
(ii) Letter of Credit Participation. Immediately upon the
issuance of each Letter of Credit by the Agent hereunder, each Lender shall be
deemed to have automatically, irrevocably and unconditionally purchased and
received from the Agent an undivided interest and participation in and to such
Letter of Credit, the obligations of the Borrower in respect thereof, and the
liability of the Agent thereunder (collectively, an "L/C Interest") in an amount
equal to the amount available for drawing under such Letter of Credit multiplied
by such Lender's Percentage. The Agent will notify each Lender promptly upon
presentation to it of an L/C Draft or upon any other draw under a Letter of
Credit. On or before the Business Day on which the Agent makes payment of each
such L/C Draft or, in the case of any other draw on a Letter of Credit, on
demand of the Agent, each Lender shall make payment to the Agent in immediately
available funds of an amount equal to such Lender's Percentage of the amount of
such payment or draw. The obligation of each Lender to reimburse the Agent under
this Section 2.17(ii) shall be unconditional, continuing, irrevocable and
absolute. In the event that any Lender fails to make payment to the Agent of any
amount due under this Section 2.17(ii), the Agent shall be entitled to receive,
retain and apply against such obligation the principal and interest otherwise
payable to such Lender hereunder until the Agent receives such payment from such
Lender or such obligation is otherwise fully satisfied, and such Lender shall
thereby be deemed to have received such principal or interest payment owing to
it; provided, however, that nothing contained in this sentence shall relieve
such Lender of its obligation to reimburse the Agent for such amount in
accordance with this Section 2.17(ii).
(iii) Reimbursement Obligation. The Borrower agrees
unconditionally, irrevocably and absolutely to pay immediately to the Agent, for
the account of the Lenders, the amount of each advance which may be drawn under
or pursuant to a Letter of Credit issued for its account or an L/C Draft related
thereto (such obligation of the Borrower to reimburse the Agent for an advance
made under a Letter of Credit or L/C Draft being hereinafter referred to as a
"Reimbursement Obligation" with respect to such Letter of Credit or L/C Draft).
If the Borrower at any time fails to repay a Reimbursement Obligation pursuant
to this Section 2.17(iii), the Borrower shall be deemed to have elected to
borrow from the Lenders, as of the date of the advance giving rise to such
Reimbursement Obligation, a Floating Rate Advance equal in amount to the amount
of the unpaid Reimbursement Obligation, the proceeds of which Advance shall be
used to repay such Reimbursement Obligation.
(iv) Cash Collateral. Notwithstanding anything to the contrary
herein or in any application for a Letter of Credit, after the occurrence of any
Default or Unmatured Default, the Borrower shall, upon the Agent's demand,
deliver to the Agent for the benefit of the Lenders,
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cash, or other collateral of a type satisfactory to the Required Lenders, having
a value, as determined by such Lenders, equal to the aggregate outstanding L/C
Obligations. Any such collateral shall be held by the Agent in a separate
account appropriately designated as a cash collateral account in relation to
this Agreement and the Letters of Credit and retained by the Agent for the
benefit of the Lenders as collateral security for the Borrower's obligations in
respect of this Agreement and each of the Letters of Credit and L/C Drafts. Such
amounts shall be applied to reimburse the Agent for drawings or payments under
or pursuant to Letters of Credit or L/C Drafts, or if no such reimbursement is
required, to payment of such of the other Obligations as the Agent shall
determine. Any amounts remaining in any cash collateral account established
pursuant to this Section 2.17(iv) following payment in full of all of the
Obligations, which are not to be applied to reimburse the Agent for amounts
actually paid or to be paid by the Agent in respect of a Letter of Credit or L/C
Draft, shall be returned to the Borrower (after deduction of the Agent's
expenses incurred in connection with such cash collateral account).
(v) Letter of Credit Fees. The Borrower agrees to (a) pay
quarterly in arrears, to the Agent for the ratable benefit of the Lenders, a
letter of credit fee, accruing at the Applicable L/C Fee Rate, on the aggregate
amount available for drawing under all of the standby Letters of Credit and (b)
pay all customary fees and other issuance, amendment, negotiation and
presentment expenses and related charges customarily charged by the Agent in
connection with the issuance by the Agent of standby and commercial Letters of
Credit.
2.18. Obligations Under Hedging Agreements. Prior to such time
as the Intercreditor Agreement is amended to permit Obligations under Hedging
Agreements which do not constitute "Interest Rate Agreements" (as defined in the
Intercreditor Agreement) to be "Benefited Obligations" (as defined in the
Intercreditor Agreement), payments made hereunder shall be applied first to all
Obligations under Hedging Agreements exclusive of Interest Rate Contracts and
second to Obligations consisting of Hedging Agreements which are not Interest
Rate Contracts.
2.19. Adjustments to Interest Rate Margins and Fees. The
Eurodollar Margin, the Floating Rate Margin, the Applicable Commitment Fee Rate
and the Applicable L/C Fee Rate shall be based on the Interest Coverage Ratio in
accordance with the table below. The Interest Coverage Ratio shall be determined
from the financial statements delivered by the Borrower pursuant to Sections
6.1(i) and (ii). If, as determined on the basis of the quarterly compliance
certificate delivered by the Borrower pursuant to Section 6.1 of this Agreement,
the Borrower has maintained an Interest Coverage Ratio greater than the levels
set forth in the table below, calculated on the basis of the four fiscal
quarters then ended, the Eurodollar Margin, the Floating Rate Margin, the
Applicable Commitment Fee Rate and the Applicable L/C Fee Rate shall each be
adjusted to the amounts set forth in the table opposite the applicable Interest
Coverage Ratio level. The adjustment, if any, shall be applied retroactively,
beginning on the first Business Day of the three month fiscal period commencing
immediately after the period covered by the compliance certificate. If,
subsequent to an adjustment in the Eurodollar Margin, the Floating Rate Margin,
the Applicable Commitment Fee Rate and the Applicable L/C Fee Rate, the
Borrower's Interest Coverage Ratio, as determined on the basis of the quarterly
compliance certificate delivered by the Borrower pursuant to Section 6.1 of this
Agreement, calculated on the basis of the four fiscal quarters then ended, is
less than the Interest Coverage Ratio level corresponding to the earlier
adjustment, the Eurodollar Margin, the Floating Rate Margin, the Applicable
Commitment Fee Rate and the Applicable L/C Fee Rate shall be adjusted
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in accordance with the table set forth below, such adjustment to be applied
retroactively, beginning on the first Business Day of the fiscal quarter
commencing immediately after the period covered by the compliance certificate.
- -------------------- ------------------ ------------------ ------------------ ------------------
INTEREST FLOATING RATE EURODOLLAR APPLICABLE APPLICABLE
COVERAGE RATIO MARGIN MARGIN COMMITMENT L/C
FEE RATE FEE RATE
- -------------------- ------------------ ------------------ ------------------ ------------------
Greater than or 0.0% 0.75% 0.25% 0.75%
equal to 3.25 to
1.0
- -------------------- ------------------ ------------------ ------------------ ------------------
Below 3.25 to 0.0% 1.0% 0.375% 1.0%
1.0 but greater
than or equal to
3.0 to 1.0
- -------------------- ------------------ ------------------ ------------------ ------------------
Below 3.0 to 1.0 0.25% 1.25% 0.375% 1.25%
but greater than
or equal to 2.75
to 1.0
- -------------------- ------------------ ------------------ ------------------ ------------------
Below 2.75 to 0.50% 1.50% 0.375% 1.5%
1.0 but greater
than or equal
to 2.50 to 1.0
- -------------------- ------------------ ------------------ ------------------ ------------------
Below 2.50 to 0.50% 1.75% 0.375% 1.75%
1.0
- -------------------- ------------------ ------------------ ------------------ ------------------
Interest and commitment fees shall be calculated for actual days elapsed on the
basis of a 360-day year.
ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1. Yield Protection. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law), or any interpretation thereof, or the
compliance of any Lender therewith,
(i) subjects any Lender or any applicable Lending Installation
to any tax, duty, charge or withholding on or from payments due from
the Borrower (excluding federal taxation of the overall net income of
any Lender or applicable Lending Installation and any such tax, duty,
charge or withholding in effect as of the date of this Agreement), or
changes the basis of taxation of payments to any Lender in respect of
its Revolving Loans, its L/C Interests, the Letters of Credit or other
amounts due it hereunder (excluding federal taxation of the overall net
income of any Lender or applicable Lending Installation and any such
change in effect as of the date of this Agreement), or
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(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any Lender or any applicable Lending Installation (other
than reserves and assessments taken into account in determining the
interest rate applicable to Eurodollar Loans) with respect to its
Loans, or L/C Interest or the Letters of Credit, or
(iii) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable Lending Installation
of making, funding or maintaining the Revolving Loans, the L/C Interest
or the Letters of Credit or reduces any amount received by any Lender
or any applicable Lending Installation in connection with the Revolving
Loans, the L/C Interests or the Letters of Credit or requires any
Lender or any applicable Lending Installation to make any payment
calculated by reference to the amount of Revolving Loans or L/C
Interests held or interest received by it or the Letters of Credit, by
an amount deemed material by such Lender;
then, within 15 days of demand by such Lender, the Borrower shall pay such
Lender that portion of such increased expense incurred or reduction in an amount
received which such Lender determines is attributable to making, funding and
maintaining its Revolving Loans and its Commitment.
3.2. Changes in Capital Adequacy Regulations. If a Lender
determines the amount of capital required or expected to be maintained by such
Lender, any Lending Installation of such Lender or any corporation controlling
such Lender is increased as a result of a "Change" (as defined below), then,
within 15 days of demand by such Lender, the Borrower shall pay such Lender the
amount necessary to compensate for any shortfall in the rate of return on the
portion of such increased capital which such Lender determines is attributable
to this Agreement, its Revolving Loans, its L/C Interests, the Letters of Credit
or its obligation to make Revolving Loans hereunder (after taking into account
such Lender's policies as to capital adequacy); provided, however, that the
Borrower shall not be obligated to pay any such amount or amounts to the extent
such amount or amounts result from a Change which took effect more than 90 days
prior to the date of delivery of the demand described above. "Change" means (i)
any change after the date hereof in the "Risk-Based Capital Guidelines" (as
defined below) or (ii) any adoption of or change in any other law, governmental
or quasi-governmental rule, regulation, policy, guideline, interpretation, or
directive (whether or not having the force of law) after the date hereof which
affects the amount of capital required or expected to be maintained by any
Lender or any Lending Installation or any corporation controlling any Lender.
"Risk-Based Capital Guidelines" means (i) the risk-based capital guidelines in
effect in the United States on the date hereof including transition rules, and
(ii) the corresponding capital regulations promulgated by regulatory authorities
outside the United States implementing the July 1988 report of the Basle
Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date hereof.
3.3. Availability of Types of Advances. If any Lender
determines that maintenance of its Eurodollar Loans at a suitable Lending
Installation would violate any applicable law, rule, regulation or directive,
whether or not having the force of law, or if the Required Lenders determine
that (i) deposits of a type and maturity appropriate to match fund
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Eurodollar Advances are not available or (ii) the interest rate applicable to a
Type of Advance does not accurately reflect the cost of making or maintaining
such an Advance, then the Agent shall suspend the availability of the affected
Type of Advance and require any Advances of the affected Type to be repaid.
3.4. Funding Indemnification. If any payment of a Eurodollar
Advance occurs on a date which is not the last day of the applicable Interest
Period (other than as required by a Lender pursuant to Section 3.3 above),
whether because of acceleration, prepayment, amortization requirements, or
otherwise, or a Eurodollar Advance is not made on the date specified by the
Borrower for any reason other than default by the Lenders, the Borrower will
indemnify each Lender for any loss or cost incurred by it resulting therefrom,
including, without limitation, any loss or cost in liquidating or employing
deposits acquired to fund or maintain such Eurodollar Advance.
3.5. Lender Statements; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Eurodollar Loans to reduce any liability of the
Borrower to such Lender under Sections 3.1 and 3.2 or to avoid the
unavailability of a Type of Advance under Section 3.3, so long as such
designation is not disadvantageous to such Lender. Each Lender shall deliver a
written statement for such Lender as to the amount due, if any, under Section
3.1, 3.2 or 3.4. Such written statement shall set forth in reasonable detail the
calculations upon which such Lender determined such amount and shall be final,
conclusive and binding on the Borrower in the absence of manifest error.
Determination of amounts payable under such Sections in connection with a
Eurodollar Loan shall be calculated as though each Lender funded its Eurodollar
Loan through the purchase of a deposit of the type and maturity corresponding to
the deposit used as a reference in determining the Eurodollar Rate applicable to
such Eurodollar Loan, whether in fact that is the case or not. Unless otherwise
provided herein, the amount specified in the written statement shall be payable
on demand after receipt by the Borrower of the written statement. The
obligations of the Borrower under Sections 3.1, 3.2 and 3.4 shall survive
payment of the Obligations and termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Effectiveness of this Agreement. This Agreement shall
become effective if, and only if, the following conditions precedent are
satisfied on or before March 15, 1999: (i) this Agreement has been signed by the
Borrower and each of the Lenders; and (ii) the Borrower has furnished to the
Agent each of the following, with sufficient copies for each of the Lenders:
(i) Copies of the Articles of Incorporation of the
Borrower, together with all amendments, and a
certificate of good standing, both certified by the
appropriate governmental officer in its jurisdiction
of incorporation;
(ii) Copies, certified by the Secretary or Assistant
Secretary of the Borrower, of its By-Laws and of its
Board of Directors' resolutions (and resolutions of
other bodies, if any are deemed necessary by counsel
for any Lender) authorizing the execution of the Loan
Documents;
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(iii) An incumbency certificate, executed by the Secretary
or Assistant Secretary of the Borrower, which shall
identify by name and title and bear the signature of
the officers of the Borrower authorized to sign the
Loan Documents and to make borrowings hereunder, upon
which certificate the Lenders shall be entitled to
rely until informed of any change in writing by the
Borrower;
(iv) A certificate, signed by the chief financial
officer of the Borrower, stating that on the
Effective Date no Default or Unmatured Default has
occurred and is continuing;
(v) A written opinion of the Borrower's counsel,
addressed to the Lenders in form and substance
satisfactory to the Agent in the form attached as
Exhibit B hereto;
(vi) A fully executed copy of the Master Assignment
Agreement; and
(vii) Such other documents as any Lender or its counsel may
have reasonably requested.
4.2. Each Advance and Letter of Credit. The Lenders shall not
be required to make any Advance and the Agent shall not be required to issue any
Letter of Credit, unless on the applicable Borrowing Date, or in the case of a
Letter of Credit, the date on which the Letter of Credit is to be issued:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties
contained in Article V are true and correct as of
such Borrowing Date except for changes, including,
without limitation, changes in the Schedules,
reflecting transactions permitted by this
Agreement.
(iii) All legal matters incident to the making of such
Advance shall be satisfactory to the Lenders and
their counsel.
Each Borrowing Notice with respect to each such Advance and
the letter of credit application with respect to a Letter of Credit shall
constitute a representation and warranty by the Borrower that the conditions
contained in Sections 4.2(i) and (ii) have been satisfied. Any Lender may
require a duly completed compliance certificate in substantially the form of
Exhibit C hereto as a condition to making an Advance.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1. Corporate Existence and Standing. Each of the Borrower
and its Restricted Subsidiaries is a corporation duly incorporated, validly
existing and in good standing under the
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laws of its jurisdiction of incorporation and has all requisite authority to
conduct its business in each jurisdiction in which its business is conducted.
5.2. Authorization and Validity. The Borrower has the
corporate power and authority and legal right to execute and deliver the Loan
Documents and to perform its obligations thereunder. The execution and delivery
by the Borrower of the Loan Documents and the performance of its obligations
thereunder have been duly authorized by proper corporate proceedings, and the
Loan Documents constitute legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally.
5.3. No Conflict; Government Consent. Neither the execution
and delivery by the Borrower of the Loan Documents, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof
will violate any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on the Borrower or any of its Subsidiaries or the
Borrower's or any Subsidiary's articles of incorporation or by-laws or the
provisions of any indenture, instrument or agreement to which the Borrower or
any of its Subsidiaries is a party or is subject, or by which it, or its
property, is bound, or conflict with or constitute a default thereunder, or
result in the creation or imposition of any Lien in, of or on the property of
the Borrower or a Subsidiary pursuant to the terms of any such indenture,
instrument or agreement other than the Senior Notes. No order, consent,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required to authorize, or is required
in connection with the execution, delivery and performance of, or the legality,
validity, binding effect or enforceability of, any of the Loan Documents.
5.4. Financial Statements. The December 31, 1997 financial
statements of the Borrower together with its Form 10-Q for the quarters ended
March 31, 1998, June 30, 1998, and September 30, 1998 heretofore delivered to
the Lenders were prepared in accordance with generally accepted accounting
principles in effect on the date such statements were prepared and fairly
present the financial condition and operations of the Borrower and its
Subsidiaries at such dates and the results of their operations for the periods
then ended.
5.5. Material Adverse Change. Since December 31, 1997, there
has been no change in the business, properties, prospects, condition (financial
or otherwise) or results of operations of the Borrower and its Subsidiaries
which could have a Material Adverse Effect.
5.6. Taxes. The Borrower and its Subsidiaries have filed all
United States federal tax returns and all other tax returns which are required
to be filed and have paid all taxes due pursuant to said returns or pursuant to
any assessment received by the Borrower or any of its Subsidiaries, except such
taxes, if any, as are being contested in good faith and as to which adequate
reserves have been provided. No tax liens have been filed and no claims are
being asserted with respect to any such taxes. The charges, accruals and
reserves on the books of the Borrower and its Subsidiaries in respect of any
taxes or other governmental charges are adequate.
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5.7. Litigation and Contingent Obligations. Except as set
forth on Schedule 5.7 hereto, there is no litigation, arbitration, governmental
investigation, proceeding or inquiry pending or, to the knowledge of any of
their officers, threatened against or affecting the Borrower or any of its
Subsidiaries which could have a Material Adverse Effect. Except as otherwise set
forth on Schedule 5.7 hereto, other than any liability incident to such
litigation, arbitration or proceedings, the Borrower has no material contingent
obligations not provided for or disclosed in the financial statements referred
to in Section 5.4.
5.8. Subsidiaries. Schedule 5.8 hereto contains an accurate
list of all of the presently existing Restricted Subsidiaries of the Borrower,
setting forth their respective jurisdictions of incorporation and the percentage
of their respective capital stock owned by the Borrower or other Restricted
Subsidiaries. All of the issued and outstanding shares of capital stock of such
Restricted Subsidiaries have been duly authorized and issued and are fully paid
and non-assessable.
5.9. ERISA. The Unfunded Liabilities of all Single Employer
Plans do not in the aggregate exceed $750,000 as of the date hereof. Neither the
Borrower nor any other member of the Controlled Group has incurred, or is
reasonably expected to incur any withdrawal liability to Multiemployer Plans in
excess of $100,000 in the aggregate. Each Plan complies in all material respects
with all applicable requirements of law and regulations, no Reportable Event has
occurred with respect to any Plan, neither the Borrower nor any other members of
the Controlled Group has withdrawn from any Plan or initiated steps to do so,
and no steps have been taken to reorganize or terminate any Plan.
5.10. Accuracy of Information. No information, exhibit or
report heretofore or hereafter furnished by the Borrower or any of its
Subsidiaries to the Agent, the Collateral Agent or to any Lender in connection
with the negotiation of, or compliance with, the Loan Documents contains any
material misstatement of fact or omits to state a material fact or any fact
necessary to make the statements contained therein not misleading.
5.11. Regulation U. Margin stock (as defined in Regulation U)
constitutes less than 25% of those assets of the Borrower and its Subsidiaries
which are subject to any limitation on sale, pledge, or other restriction
hereunder or under the Collateral Documents.
5.12. Material Agreements. Neither the Borrower nor any
Subsidiary is a party to any agreement or instrument or subject to any charter
or other corporate restriction which could have a Material Adverse Effect.
Neither the Borrower nor any Subsidiary is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in (i) any agreement to which it is a party, which default could have
a Material Adverse Effect or (ii) any agreement or instrument evidencing or
governing Indebtedness.
5.13. Compliance with Laws. The Borrower and its Subsidiaries
have complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof, having jurisdiction over the conduct of their respective
businesses or the ownership of their respective properties, the failure to
comply with which could result in a Material Adverse Effect. Neither the
Borrower nor any Subsidiary has received any notice to the effect that its
operations are not in material compliance with any of the requirements of
applicable federal, state and local environmental, health and safety statutes
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and regulations or the subject of any federal or state investigation evaluating
whether any remedial action is needed to respond to a release of any toxic or
hazardous waste or substance into the environment, which non-compliance or
remedial action could have a Material Adverse Effect.
5.14. Ownership of Properties. Except as set forth on Schedule
5.14 hereto, on the date of this Agreement, the Borrower and its Subsidiaries
will have good title, free of all Liens other than those permitted by Section
6.15, to all of the properties and assets reflected in the financial statements
as owned by it except for properties disposed of since the date of such
financial statements.
5.15. Investment Company Act. Neither the Borrower nor any
Subsidiary thereof is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
5.16. Public Utility Holding Company Act. Neither the Borrower
nor any Subsidiary is a "holding company" or a "Subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a "Subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
5.17. Subordinated Indebtedness. Pursuant to that certain
Consent of and Amendment by the Holders of Senior Subordinated Notes among the
holders of the Senior Subordinated Debt, the Lenders and the Borrower,
$30,000,000 of the Obligations constitute senior indebtedness which is entitled
to the benefits, and subject to the limitations, of the subordination provisions
of the Senior Subordinated Debt and all other outstanding Subordinated
Indebtedness.
5.18. Insurance. The certificate signed by the President or
Chief Financial Officer of the Borrower, that attests to the existence and
adequacy of, and summarizes, the property and casualty insurance program carried
by the Borrower and that has been furnished by the Borrower to the Agent and the
Lenders, is complete and accurate. This summary includes the insurer's or
insurers' name(s), policy number(s), expiration date(s), amount(s) of coverage,
type(s) of coverage, exclusion(s), and deductibles. This summary also includes
similar information, and describes any reserves, relating to any self-insurance
program that is in effect.
5.19. Year 2000 Issues. The Borrower and its Subsidiaries have
made a full and complete assessment of the Year 2000 Issues and have a realistic
and achievable program for remediating the Year 2000 Issues on a timely basis.
Based on such assessment and program, the Borrower does not reasonably
anticipate that Year 2000 Issues are reasonably likely to have a Material
Adverse Effect.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders
shall otherwise consent in writing:
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6.1. Reporting. The Borrower will maintain, for itself and
each Subsidiary, a system of accounting established and administered in
accordance with generally accepted accounting principles, and furnish to the
Lenders:
(i) Within ninety (90) days after the close of each of its fiscal
years, an unqualified audit report certified by independent
certified public accountants, acceptable to the Lenders,
prepared in accordance with generally accepted accounting
principles, including consolidated balance sheets as of the
end of such period, related consolidated profit and loss and
reconciliation of surplus statements, and a consolidated
statement of cash flows, accompanied by (a) any management
letter prepared by said accountants, (b) a certificate of
such accountants that, in the course of their examination
necessary for their certification of the foregoing, they have
obtained no knowledge of any Default or Unmatured Default, or
if, in the opinion of such accountants, any Default or
Unmatured Default shall exist, stating the nature and status
thereof and (c) a letter from said accountants addressed to
the Lenders acknowledging that the Lenders are extending
credit in primary reliance on such financial statements and
authorizing such reliance.
(ii) Within twenty-five (25) days after the close of each fiscal
month of each of its fiscal years, unaudited consolidated
balance sheets as at the close of each such period and
consolidated profit and loss and reconciliation of surplus
statements and a consolidated statement of cash flows for the
period from the beginning of such fiscal year to the end of
such fiscal month, all certified by its chief financial
officer.
(iii) As soon as available, but in any event within 30 days after
the beginning of each fiscal year of the Borrower, a copy of
the plan and forecast (including a projected consolidated
balance sheet, income statement and funds flow statement) of
the Borrower for such fiscal year.
(iv) Together with the monthly and annual financial statements
required hereunder, a compliance certificate in substantially
the form of Exhibit C hereto (but without Schedule I thereto)
signed by its chief financial officer stating that no Default
or Unmatured Default exists, or if any Default or Unmatured
Default exists, stating the nature and status thereof.
(v) Within twenty-five (25) days of the close of each of its
fiscal quarters, a compliance certificate in substantially the
form of Exhibit C hereto (including Schedule I thereto) signed
by its chief financial officer showing the calculations
necessary to determine compliance with Section 6.22 of this
Agreement and stating that no Default or Unmatured Default
exists, or if any Default or Unmatured Default exists, stating
the nature and status thereof.
(vi) Within 270 days after the close of each fiscal year, a
statement of the Unfunded Liabilities of each Single Employer
Plan, certified as correct by an actuary enrolled under ERISA.
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(vii) As soon as possible and in any event within 10 days after the
Borrower knows that any Reportable Event has occurred with
respect to any Plan, a statement, signed by the chief
financial officer of the Borrower, describing said Reportable
Event and the action which the Borrower proposes to take with
respect thereto.
(viii) As soon as possible and in any event within 10 days after
receipt by the Borrower, a copy of (a) any notice or claim to
the effect that the Borrower or any of its Subsidiaries is or
may be liable to any Person as a result of the release by the
Borrower, any of its Subsidiaries, or any other Person of any
toxic or hazardous waste or substance into the environment,
and (b) any notice alleging any violation of any federal,
state or local environmental, health or safety law or
regulation by the Borrower or any of its Subsidiaries, (which,
in either case, could have a Material Adverse Effect).
(ix) Promptly upon the furnishing thereof to the shareholders of
the Borrower, copies of all financial statements, reports and
proxy statements so furnished.
(x) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular
reports which the Borrower or any of its Subsidiaries files
with the Securities and Exchange Commission.
(xi) Such other information (including non-financial information)
as the Agent, the Collateral Agent or any Lender may from time
to time reasonably request.
6.2. Use of Proceeds. The Borrower will use the proceeds of
the Advances to provide funds for the working capital needs of the Borrower and
its Restricted Subsidiaries and other general corporate purposes and to repay
outstanding Revolving Loans. The Borrower will not, nor will it permit any
Subsidiary to, use any of the proceeds of the Revolving Loans to purchase or
carry any "margin stock" (as defined in Regulation U) or to make any Acquisition
unless the target of such Acquisition shall immediately become a Restricted
Subsidiary upon consummation of the transaction.
6.3. Notice of Default. The Borrower will, and will cause each
Subsidiary to, give prompt notice in writing to the Lenders of the occurrence of
any Default or Unmatured Default and of any other development, financial or
otherwise, which might have a Material Adverse Effect.
6.4. Conduct of Business. The Borrower will, and will cause
each Restricted Subsidiary to, carry on and conduct its business in
substantially the same manner and in substantially the same fields of enterprise
as it is presently conducted and to do all things necessary to remain duly
incorporated, validly existing and in good standing as a domestic corporation in
its jurisdiction of incorporation and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is conducted.
6.5. Taxes. The Borrower will, and will cause each Restricted
Subsidiary to, pay when due all taxes, assessments and governmental charges and
levies upon it or its income, profits or property, except those which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been set aside.
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6.6. Insurance. The Borrower will, and will cause each
Restricted Subsidiary to, maintain with financially sound and reputable
insurance companies insurance on all their property in such amounts and covering
such risks as is consistent with sound business practice, and the Borrower will
furnish to any Lender upon request full information as to the insurance carried.
6.7. Compliance with Laws. The Borrower will, and will cause
each Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject; provided
that the failure of any Unrestricted Subsidiary to comply with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject shall not constitute a breach of this Section 6.7 unless such
failure to comply is likely to have a Material Adverse Effect.
6.8. Maintenance of Properties. The Borrower will, and will
cause each Restricted Subsidiary to, do all things necessary to maintain,
preserve, protect and keep its properties in good repair, working order and
condition, and make all necessary and proper repairs, renewals and replacements
so that its business carried on in connection therewith may be properly
conducted at all times.
6.9. Inspection. The Borrower will, and will cause each
Subsidiary to, permit the Lenders, by their respective representatives and
agents, to inspect any of the properties, corporate books and financial records
of the Borrower and each Subsidiary, to examine and make copies of the books of
accounts and other financial records of the Borrower and each Subsidiary, and to
discuss the affairs, finances and accounts of the Borrower and each Subsidiary
with, and to be advised as to the same by, their respective officers at such
reasonable times and intervals as the Lenders may designate.
6.10. Merger. The Borrower will not, nor will it permit any
Subsidiary to, merge or consolidate with or into any other Person, except (i)
that a Subsidiary may merge with and into the Borrower, and (ii) that a
Subsidiary may merge with a Restricted Subsidiary (provided, that the survivor
of any such merger is also a Restricted Subsidiary).
6.11. Sale of Assets.
(A) Sale of Property. The Borrower will not, nor will it
permit any Restricted Subsidiary to, lease, sell or otherwise dispose of all, or
a substantial portion of, its property, assets or business to any other Person
except for sales of inventory in the ordinary course of business. For purposes
of this Section, "substantial portion" means assets that, together with all
other assets of the Borrower and its Restricted Subsidiaries previously disposed
of (other than inventory in the ordinary course of business) as permitted by
this Section during the twelve-month period ending with the month in which any
such lease, sale or other disposition occurs, (i) represent more than 10% of the
consolidated assets of the Borrower and its Subsidiaries as would be shown in
the consolidated financial statements of the Borrower and its Subsidiaries as at
the beginning of such twelve-month period, or (ii) are responsible for more than
10% of the consolidated net sales or of the consolidated net income of the
Borrower and its Subsidiaries as reflected in the financial statements referred
to in clause (i) above.
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(B) Sale of Accounts. The Borrower will not, nor will it
permit any Restricted Subsidiary to, sell or otherwise dispose of any notes
receivable or accounts receivable, with or without recourse.
6.12. Sale and Leaseback. The Borrower may, and may permit any
Restricted Subsidiary to, sell or transfer any property, in an aggregate amount
not to exceed $5,000,000, in order to concurrently or subsequently lease as
lessee such or similar property.
6.13. Investments and Acquisitions. The Borrower will not, nor
will it permit any Restricted Subsidiary to, make or suffer to exist any
Investments (including, without limitation, loans and advances to, and other
Investments in, Subsidiaries), or commitments therefor, or to create any
Subsidiary or to become or remain a partner in any partnership or joint venture,
or to make any Acquisition of any Person, except:
(i) Short-term obligations of, or fully guaranteed by,
the United States of America.
(ii) Commercial paper rated A-1 or better by Standard and
Poor's Rating Services or P-1 or better by Moody's
Investors Service, Inc.
(iii) Demand deposit accounts maintained in the ordinary
course of business.
(iv) Certificates of deposit issued by and time deposits
with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000.
(v) Other Investments in existence on the date hereof and
described in Schedule 6.13 hereto.
(vi) Investments (other than Investments referred to in
(v) above) (a) in Unrestricted Subsidiaries or any
other Persons in which the Borrower or its Restricted
Subsidiary has a joint venture interest not to exceed
in the aggregate for all such Investments under this
clause (vi)(a) $4,000,000 at any time and (b) in
Restricted Subsidiaries.
(vii) Loans to the Borrower's or a Restricted Subsidiary's
employees not to exceed $500,000 in the aggregate
outstanding for all such employees at any time (other
than advances to employees for travel and
entertainment purposes).
(viii) Acquisitions consummated pursuant to negotiated
acquisition agreements on a non-hostile basis.
6.14. Contingent Obligations. The Borrower will not, nor
will it permit any Subsidiary to, make or suffer to exist any Contingent
Obligation (including, without limitation, any Contingent Obligation with
respect to the obligations of a Subsidiary), except (a) by endorsement of
instruments for deposit or collection in the ordinary course of business and (b)
Contingent Obligations incurred in connection with the guarantee of or issuance
of any comfort
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letters in connection with the debt of any Restricted Subsidiary by
Jason or any other Restricted Subsidiary.
6.15. Liens. The Borrower will not, nor will it permit any
Subsidiary to, create, incur, or suffer to exist any Lien in, of or on the
property of the Borrower or any of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or levies
on its property if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings
and for which adequate reserves in accordance with generally
accepted principles of accounting shall have been set aside on
its books.
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the
ordinary course of business which secure payment of
obligations not more than 60 days past due or which are being
contested in good faith by appropriate proceedings and for
which adequate reserves shall have been set aside on its
books.
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions,
or other social security or retirement benefits, or similar
legislation.
(iv) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a
nature generally existing with respect to properties of a
similar character and which do not in any material way affect
the marketability of the same or interfere with the use
thereof in the business of the Borrower or the Subsidiaries.
(v) Liens existing on the date hereof and described in Schedule
6.15 hereto.
(vi) Liens in favor of the Collateral Agent granted pursuant to any
Loan Document.
(vii) Liens securing Permitted Purchase Money Indebtedness with
respect to assets purchased with the proceeds of such
Permitted Purchase Money Indebtedness.
6.16. Landlord Consents and Waiver. With respect to each lease
of premises entered into after the date hereof, the Borrower shall deliver to
the Collateral Agent a landlord waiver, in form and substance acceptable to the
Collateral Agent, executed by the Borrower and the lessor of such premises.
6.17. Rentals. The Borrower will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist obligations for Rentals in
excess of $10,000,000 during any one fiscal year in the aggregate for the
Borrower and its Subsidiaries.
6.18. Letters of Credit. The Borrower will not, nor will it
permit any Restricted Subsidiary to, apply for or become liable upon any letter
of credit other than the Letters of Credit.
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6.19. Affiliates. The Borrower will not, and will not permit
any Subsidiary to, enter into any transaction (including, without limitation,
the purchase or sale of any property or service) with, or make any payment or
transfer to, any Affiliate except in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to the Borrower or
such Subsidiary than the Borrower or such Subsidiary would obtain in a
comparable arm's-length transaction.
6.20. Subordinated Indebtedness. The Borrower will not, and
will not permit any Subsidiary to, make any amendment or modification to the
indenture, note or other agreement evidencing or governing any Subordinated
Indebtedness, or directly or indirectly voluntarily prepay, defease or in
substance defease, purchase, redeem, retire or otherwise acquire, any
Subordinated Indebtedness (except as permitted under Section 6.21(iii)).
6.21. Prepayments on Indebtedness. Borrower will not make any
prepayment with respect to Indebtedness (whether by set off or otherwise) other
than (i) the Obligations, (ii) prepayments of amounts outstanding under the
Senior Note Agreements; provided that no Default or Unmatured Default shall have
occurred and be continuing at the date of such payment or would result therefrom
and (iii) required prepayments as set forth in Section 2.1 of the Subordinated
Note Agreements as in effect as of the date hereof, subject to compliance with
the provisions contained in Section 8.1 thereof.
6.22. Financial Covenants. The Borrower will not:
(A) Interest Coverage Ratio. Permit the Interest Coverage
Ratio, calculated on the basis of the immediately preceding four fiscal quarters
of Borrower to be less than 2.25 to 1.0.
(B) Minimum Net Worth. Permit its Net Worth, at any time, to
be less than the sum of (a) $110,000,000 and (b) seventy percent (70%) of
Borrower's net income (with no adjustment for any net losses but with an
adjustment for any stock repurchases, provided that the aggregate amount of
adjustments for all such capital stock repurchases may not exceed $20,000,000)
for the period beginning with January 1, 1999 through and including the last day
of the immediately preceding fiscal quarter.
(C) Leverage Ratio. Permit the Leverage Ratio at any time,
from and after the date hereof until the Termination Date, to be greater than
1.35 to 1.00.
(D) Calculation of Financial Covenants. The financial
covenants set forth in this Section 6.22 shall be calculated on a consolidated
basis including the Borrower and all of its Subsidiaries.
6.23 Year 2000. The Borrower will and will cause each of its
Subsidiaries to take all actions reasonably necessary to assure that the Year
2000 Issues will not have a Material Adverse Effect. Upon the Agent's or any
Lender's request, the Borrower will provide Lender a description of the Year
2000 program of the Borrower and its Subsidiaries, including updates and
progress reports. Borrower will advise the Agent of any reasonably anticipated
Material Adverse Effect as a result of Year 2000 Issues.
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ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events
shall constitute a Default:
7.1. Any representation or warranty made or deemed made by or
on behalf of the Borrower or any of its Subsidiaries to the Lenders, the Agent
or the Collateral Agent under or in connection with this Agreement, any
Revolving Loan, or any certificate or information delivered in connection with
this Agreement or any other Loan Document shall be materially false on the date
as of which made.
7.2. Nonpayment of principal of any Note when due, nonpayment
of any Reimbursement Obligations when due, or nonpayment of interest upon any
Note or of any commitment fee, letter of credit fee or other obligations under
any of the Loan Documents within five days after the same becomes due.
7.3. The breach by the Borrower of any of the terms or
provisions of Article VI.
7.4. The breach by the Borrower (other than a breach which
constitutes a Default under Section 7.1, 7.2 or 7.3) of any of the terms or
provisions of this Agreement which is not remedied within thirty (30) days after
the earlier to occur of written notice from the Agent or any Lender thereof or
the date on which Borrower knew or should have known of the breach.
7.5. Failure of the Borrower or any of its Subsidiaries to pay
any Indebtedness when due; or the default by the Borrower or any of its
Subsidiaries in the performance of any term, provision or condition contained in
any agreement under which any Indebtedness was created or is governed, or any
other event shall occur or condition exist, the effect of which is to cause, or
to permit the holder or holders of such Indebtedness to cause, such Indebtedness
to become due prior to its stated maturity; or any Indebtedness of the Borrower
or any of its Subsidiaries shall be declared to be due and payable or required
to be prepaid (other than by a regularly scheduled payment) prior to the stated
maturity thereof.
7.6. The Borrower or any of its Subsidiaries shall (i) have an
order for relief entered with respect to it under the Federal bankruptcy laws as
now or hereafter in effect, (ii) make an assignment for the benefit of
creditors, (iii) apply for, seek, consent to, or acquiesce in, the appointment
of a receiver, custodian, trustee, examiner, liquidator or similar official for
it or any substantial part of its property, (iv) institute any proceeding
seeking an order for relief under the Federal bankruptcy laws as now or
hereafter in effect or seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file an
answer or other pleading denying the material allegations of any such proceeding
filed against it, (v) take any corporate action to authorize or effect any of
the foregoing actions set forth in this Section 7.6, (vi) fail to contest in
good faith any appointment or proceeding described in Section 7.7, or (vii) not
pay, or admit in writing its inability to pay, its debts generally as they
become due.
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7.7. Without the application, approval or consent of the
Borrower or any of its Subsidiaries, a receiver, trustee, examiner, liquidator
or similar official shall be appointed for the Borrower or any of its
Subsidiaries or any substantial part of its property, or a proceeding described
in Section 7.6(iv) shall be instituted against the Borrower or any of its
Subsidiaries and such appointment continues undischarged or such proceeding
continues undismissed or unstayed for a period of 30 consecutive days.
7.8. Any court, government or governmental agency shall
condemn, seize or otherwise appropriate, or take custody or control of all or
any substantial portion (as defined in Section 6.11) of the property of the
Borrower or any of its Subsidiaries.
7.9. The Borrower or any of its Subsidiaries shall fail within
30 days to pay, bond or otherwise discharge any judgment or order for the
payment of money in excess of $250,000, which is not stayed on appeal or
otherwise being appropriately contested in good faith.
7.10. The Unfunded Liabilities of all Single Employer Plans
shall exceed in the aggregate $750,000 or any Reportable Event shall occur in
connection with any Plan.
7.11. The Borrower or any other member of the Controlled Group
shall have been notified by the sponsor of a Multiemployer Plan that it has
incurred withdrawal liability to such Multiemployer Plan in an amount which,
when aggregated with all other amounts required to be paid to Multiemployer
Plans by the Borrower or any other member of the Controlled Group as withdrawal
liability (determined as of the date of such notification), exceeds $100,000 or
requires payments exceeding $50,000 per annum.
7.12. The Borrower or any other member of the Controlled group
shall have been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plans is in reorganization or is being terminated, within the
meaning of Title IV of ERISA, if as a result of such reorganization or
termination the aggregate annual contributions of the Borrower and the other
members of the Controlled Group (taken as a whole) to all Multiemployer Plans
which are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the
respective plan years of each such Multiemployer Plan immediately preceding the
plan year in which the reorganization or termination occurs by an amount
exceeding $100,000.
7.13. The Borrower or any of its Subsidiaries shall be the
subject of any proceeding or investigation pertaining to the release by the
Borrower or any of its Subsidiaries, or any other Person of any toxic or
hazardous waste or substance into the environment, or any violation of any
federal, state or local environmental, health or safety law or regulation, which
in either case, could have a Material Adverse Effect.
7.14. Any Change in Control shall occur.
7.15. The occurrence of any "default", as defined in any Loan
Document (other than this Agreement or the Notes) or the breach of any of the
terms or provisions of any Loan Document (other than this Agreement or the
Notes), which default or breach continues beyond any period of grace therein
provided.
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7.16. (i) Nonpayment by the Borrower of any obligation under
any Hedging Agreement with any Lender or (ii) the breach by the Borrower of any
term, provision or condition contained in any such Hedging Agreement, which
breach continues beyond any period of grace therein provided.
7.17. A Material Adverse Change shall occur in the business
condition (financial or otherwise), operations, performance, properties or
prospects of Borrower.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration. If any Default described in Section 7.6 or
7.7 occurs with respect to the Borrower, the obligations of the Lenders to make
Revolving Loans hereunder and the obligation of the Agent to issue Letters of
Credit shall automatically terminate and the Obligations shall immediately
become due and payable without any election or action on the part of the Agent
or any Lender. If any other Default occurs, the Required Lenders may terminate
or suspend the obligations of the Lenders to make Revolving Loans hereunder and
the obligation of the Agent to issue Letters of Credit hereunder, or declare the
Obligations to be due and payable, or both, whereupon the Obligations shall
become immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which the Borrower hereby expressly waives.
If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Revolving
Loans hereunder as a result of any Default (other than any Default as described
in Section 7.6 or 7.7 with respect to the Borrower) and before any judgment or
decree for the payment of the Obligations due shall have been obtained or
entered, the Required Lenders (in their sole discretion) shall so direct, the
Agent shall, by notice to the Borrower, rescind and annul such acceleration
and/or termination.
8.2. Amendments. Subject to the provisions of this Article
VIII, the Required Lenders (or the Agent with the consent in writing of the
Required Lenders) and the Borrower may enter into agreements supplemental hereto
for the purpose of adding or modifying any provisions to the Loan Documents or
changing in any manner the rights of the Lenders or the Borrower hereunder or
waiving any Default hereunder; provided, however, that no such supplemental
agreement shall, without the consent of each Lender:
(i) Extend the maturity of any Revolving Loan or Note or
reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest or
fees thereon.
(ii) Modify the percentage specified in the definition of
Required Lenders.
(iii) Extend the Termination Date, or reduce the amount or
extend the payment date for, the mandatory payments
required under Section 2.5, or increase the amount of
the Commitment of any Lender hereunder, or permit the
Borrower to assign its rights under this Agreement.
(iv) Amend this Section 8.2.
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(v) Release Collateral (as defined in the Collateral
Documents, respectively) constituting 50% or more of
the consolidated assets of the Borrower.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent. The Agent may waive payment
of the fee required under Section 12.3.2 without obtaining the consent of any of
the Lenders.
8.3. Preservation of Rights. No delay or omission of the
Lenders, the Agent or the Collateral Agent to exercise any right under the Loan
Documents shall impair such right or be construed to be a waiver of any Default
or an acquiescence therein, and the making of a Revolving Loan or the issuance
of a Letter of Credit notwithstanding the existence of a Default or the
inability of the Borrower to satisfy the conditions precedent to such Revolving
Loan or issue such Letter of Credit shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Lenders required pursuant to Section 8.2, and then only to the
extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available
to the Agent, the Collateral Agent and the Lenders until the Obligations have
been paid in full.
ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Representations. All representations and
warranties of the Borrower contained in this Agreement shall survive delivery of
the Notes and the making of the Revolving Loans herein contemplated.
9.2. Governmental Regulation. Anything contained in this
Agreement to the contrary notwithstanding, no Lender shall be obligated to
extend credit to the Borrower in violation of any limitation or prohibition
provided by any applicable statute or regulation.
9.3. Taxes. Any taxes (excluding federal income taxes on the
overall net income of any Lender) or other similar assessments or charges
payable or ruled payable by any governmental authority in respect of the Loan
Documents shall be paid by the Borrower, together with interest and penalties,
if any.
9.4. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
9.5. Entire Agreement. The Loan Documents embody the entire
agreement and understanding among the Borrower, the Agent, the Collateral Agent
and the Lenders and supersede all prior agreements and understandings among the
Borrower, the Agent, the Collateral Agent and the Lenders relating to the
subject matter thereof.
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9.6. Several Obligations; Benefits of this Agreement. The
respective obligations of the Lenders hereunder are several and not joint and no
Lender shall be the partner or agent of any other (except to the extent to which
the Agent is authorized to act as such). The failure of any Lender to perform
any of its obligations hereunder shall not relieve any other Lender from any of
its obligations hereunder. In addition to expenses set forth above, the Borrower
agrees to reimburse the Agent, promptly after the Agent's request therefor, for
each audit, collateral analysis or other business analysis performed by or for
the benefit of the Lenders, the Agent or the Collateral Agent in connection with
this Agreement or the other Loan Documents in an amount equal to $400.00 per day
for each person employed to perform such audit or analysis, plus all costs and
expenses (including without limitation, travel expenses) incurred by the Agent
in the performance of such audit or analysis. This Agreement shall not be
construed so as to confer any right or benefit upon any Person other than the
parties to this Agreement and their respective successors and assigns.
9.7. Expenses; Indemnification. The Borrower shall reimburse
the Agent for any costs, internal charges and out-of-pocket expenses (including
attorneys' fees and time charges of attorneys for the Agent, which attorneys may
be employees of the Agent, paid or incurred by the Agent in connection with the
preparation, negotiation, execution, delivery, review, amendment, modification,
and administration of the Loan Documents. The Borrower also agrees to reimburse
the Agent, the Collateral Agent and the Lenders for any costs, internal charges
and out-of-pocket expenses (including attorneys' fees and time charges of
attorneys for the Agent, the Collateral Agent and the Lenders, which attorneys
may be employees of the Agent, the Collateral Agent or the Lenders) paid or
incurred by the Agent, the Collateral Agent or any Lender in connection with the
collection and enforcement of the Loan Documents. The Borrower further agrees to
indemnify the Agent, the Collateral Agent and each Lender, its directors,
officers and employees against all losses, claims, damages, penalties,
judgments, liabilities and expenses (including, without limitation, all expenses
of litigation or preparation therefor whether or not the Agent, the Collateral
Agent or any Lender is a party thereto) which any of them may pay or incur
arising out of or relating to this Agreement, the other Loan Documents, the
transactions contemplated hereby or the direct or indirect application or
proposed application of the proceeds of any Revolving Loan hereunder. The
obligations of the Borrower under this Section shall survive the termination of
this Agreement. In addition to expenses set forth above, the Borrower agrees to
reimburse the Agent, promptly after the Agent request therefor, for each audit,
collateral analysis or other business analysis performed by or for the benefit
of the Lenders and the Agent in connection with this Agreement in an amount
equal to $400.00 per day for each person employed to perform such audit or
analysis, plus all costs and expenses (including, without limitation, travel
expenses) incurred by the Agent in the performance of such audit or analysis.
9.8. Numbers of Documents. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of the
Lenders.
9.9. Accounting. Except as provided to the contrary herein,
all accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.
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9.10. Severability of Provisions. Any provision in any Loan
Document that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or
invalid without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.11. Nonliability of Lenders. The relationship between the
Borrower and the Lenders and the Agent shall be solely that of borrower and
lender. Neither the Agent nor any Lender shall have any fiduciary
responsibilities to the Borrower. Neither the Agent nor any Lender undertakes
any responsibility to the Borrower to review or inform the Borrower of any
matter in connection with any phase of the Borrower's business or operations.
9.12. GOVERNING LAW. THE AGENT HEREBY ACCEPTS THIS AGREEMENT,
ON BEHALF OF ITSELF AND THE LENDERS, AT CHICAGO, ILLINOIS BY ACKNOWLEDGING AND
AGREEING TO IT THERE. ANY DISPUTE BETWEEN THE BORROWER AND THE AGENT, THE
COLLATERAL AGENT, ANY LENDER, OR ANY OTHER HOLDER OF SECURED OBLIGATIONS ARISING
OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE,
SHALL BE RESOLVED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.
9.13. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY
TRIAL.
(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION
(B), EACH OF THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT
OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS
WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED
EXCLUSIVELY BY STATE OR FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS, BUT THE
PARTIES HERETO ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF CHICAGO, ILLINOIS. EACH OF THE PARTIES
HERETO WAIVES IN ALL DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION ANY OBJECTION
THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. BORROWER AGREES THAT THE AGENT, THE
COLLATERAL AGENT, ANY LENDER OR ANY HOLDER OF SECURED OBLIGATIONS SHALL HAVE THE
RIGHT TO PROCEED AGAINST BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION TO
ENABLE SUCH PERSON TO (1) OBTAIN PERSONAL JURISDICTION OVER THE BORROWER OR (2)
REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE SECURED OBLIGATIONS OR
TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON.
BORROWER AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY
PROCEEDING BROUGHT BY SUCH PERSON TO REALIZE
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ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE SECURED OBLIGATIONS OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH PERSON. BORROWER WAIVES
ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH SUCH PERSON
HAS COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION.
(C) SERVICE OF PROCESS. BORROWER WAIVES PERSONAL SERVICE OF
ANY PROCESS UPON IT AND, AS ADDITIONAL SECURITY FOR THE OBLIGATIONS, IRREVOCABLY
APPOINTS CT CORPORATION SYSTEM, BORROWER'S REGISTERED AGENT, WHOSE ADDRESS IS
208 SOUTH LASALLE STREET, CHICAGO, ILLINOIS 60604, AS BORROWER'S AGENT FOR THE
PURPOSE OF ACCEPTING SERVICE OF PROCESS ISSUED BY ANY COURT. BORROWER
IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION
OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH IN ANY JURISDICTION SET FORTH
ABOVE.
(D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF,
CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG
THEM IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EACH OF THE PARTIES
HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.
(E) WAIVER OF BOND. BORROWER WAIVES THE POSTING OF ANY BOND
OTHERWISE REQUIRED OF ANY PARTY HERETO IN CONNECTION WITH ANY JUDICIAL PROCESS
OR PROCEEDING TO REALIZE ON THE COLLATERAL (INCLUDING, WITHOUT LIMITATION, REAL
PROPERTY COLLATERAL) OR ANY OTHER SECURITY FOR THE SECURED OBLIGATIONS OR TO
ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PARTY, OR TO
ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER, PRELIMINARY OR
PERMANENT INJUNCTION, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
(F) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH
OTHER PARTY HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY, THE
PROVISIONS OF THIS SECTION 9.13, WITH ITS COUNSEL.
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9.14. Restatement of Original Credit Agreement. Effective as
of the Effective Date, this Agreement amends and restates the Original Credit
Agreement in its entirety. It is the intent of the parties hereto that this
Agreement not constitute a novation, that this Agreement replace in its entirety
the Original Credit Agreement, and that from and after the Effective Date the
Original Credit Agreement be of no further force or effect. Upon and as of the
Effective Date, each Lender shall have a Commitment in the amount set forth
opposite its name on the signature pages hereof, and the "Commitments" of the
Original Lenders under the Original Credit Agreement shall automatically
terminate. Upon and as of the Effective Date, the Borrower hereby reaffirms its
obligations under the Collateral Documents (as such term is defined in the
Original Credit Agreement) executed in connection with the Original Credit
Agreement.
ARTICLE X
THE AGENT
10.1. Appointment; Nature of Relationship. The First National
Bank of Chicago is hereby appointed Agent hereunder and under each other Loan
Document, and each of the Lenders irrevocably authorizes the Agent to act as the
contractual representative of such Lender with only the rights and duties
expressly set forth herein and in the other Loan Documents. The Agent agrees to
act as such upon the express conditions contained in this Article X. It is
expressly understood the Agent shall not have either a fiduciary relationship or
any fiduciary responsibilities in respect of any Lender by reason of this
Agreement. In its capacity as the Lenders' contractual representative, the Agent
(i) does not assume any fiduciary duties to any of the Lenders, (ii) is a
"representative" of the Lenders within the meaning of Section 9-105 of the
Uniform Commercial Code and (iii) is acting as an independent contractor, the
rights and duties of which are limited to those expressly set forth in this
Agreement and the other Loan Documents. Each of the Lenders agrees to assert no
claim against the Agent on any agency theory or any other theory of liability
for breach of fiduciary duty, all of which claims each Lender waives.
10.2. Powers. The Agent and the Collateral Agent shall have
and may exercise such powers under the Loan Documents as are specifically
delegated to the Agent or the Collateral Agent, as applicable, by the terms of
each thereof, together with such powers as are reasonably incidental thereto.
Each of the Agent and the Collateral Agent shall have no implied duties or
fiduciary duties to the Lenders, or any obligation to the Lenders to take any
action under the Loan Documents except in the case of the Collateral Agent or
the Agent as to any action specifically provided by the Loan Documents to be
taken by the Agent or the Collateral Agent, as applicable.
10.3. General Immunity. Neither the Agent, the Collateral
Agent nor any of their respective directors, officers, agents or employees shall
be liable to the Borrower, the Lenders or any Lender for any action taken or
omitted to be taken by it or them hereunder or under any other Loan Document or
in connection herewith or therewith except, in the case of the Agent, to the
extent such action or inaction is found in a final judgment by a court of
competent jurisdiction to have arisen solely from the gross negligence or
willful misconduct of such Person.
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10.4. No Responsibility for Loans, Recitals, etc. Neither the
Agent, the Collateral Agent nor any of their respective directors, officers,
agents or employees shall be responsible for or have any duty to ascertain,
inquire into, or verify (i) any statement, warranty or representation made in
connection with any Loan Document or any borrowing hereunder; (ii) the
performance or observance of any of the covenants or agreements of any obligor
under any Loan Document; (iii) the satisfaction of any condition specified in
Article IV, except receipt of items required to be delivered to the Agent; or
(iv) the validity, effectiveness or genuineness of any Loan Document or any
other instrument or writing furnished in connection therewith. The Agent shall
not be responsible to any Lender for any recitals, statements, representations
or warranties herein or in any other Loan Documents, for the perfection or
priority of any of any of the Liens on any of the Collateral, or for the
execution, effectiveness, genuineness, validity, legality, enforceability,
collectible, or sufficiency of this Agreement or any of the other Loan Documents
or the transactions contemplated thereby, or for the financial condition of any
guarantor of any and all Obligations, the Borrower or any of its Subsidiaries.
10.5. Action on Instructions of Lenders. The Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
and under any other Loan Document in accordance with written instructions signed
by the Required Lenders, and such instructions and any action taken or failure
to act pursuant thereto shall be binding on all of the Lenders and on all
holders of Notes. The Agent shall be fully justified in failing or refusing to
take any action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by the Lenders pro rata against any and
all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
10.6. Employment of Agents and Counsel. The Agent may execute
any of its duties as Agent hereunder and under any other Loan Document by or
through employees, agents, and attorneys-in-fact and shall not be answerable to
the Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning all matters pertaining to the agency hereby created and its
duties hereunder and under any other Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be
entitled to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and, in respect
to legal matters, upon the opinion of counsel selected by the Agent, which
counsel may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The Lenders
agree to reimburse and indemnify the Agent and the Collateral Agent ratably in
proportion to their respective Commitment (i) for any amounts not reimbursed by
the Borrower for which the Agent or the Collateral Agent is entitled to
reimbursement by the Borrower under the Loan Documents, (ii) for any other
expenses incurred by the Agent or the Collateral Agent on behalf of the Lenders,
in connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents and (iii) for any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent or the Collateral Agent in any way
relating to or arising out of the Loan Documents or any other document delivered
in
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connection therewith or the transactions contemplated thereby, or the
enforcement of any of the terms thereof or of any such other documents, provided
that no Lender shall be liable for any of the foregoing to the extent any of the
foregoing is found in a final judgment by a court of competent jurisdiction to
have arisen solely from the gross negligence or willful misconduct of the Agent
or the Collateral Agent, as the case may be.
10.9. Rights as a Lender. With respect to its Commitment,
Revolving Loans made by it and the Notes issued to it, the Agent shall have the
same rights and powers hereunder and under any other Loan Document as any Lender
and may exercise the same as though they were not the Agent as the case may be,
and the term "Lender" or "Lenders" shall, unless the context otherwise
indicates, include the Agent in its individual capacity. The Agent may accept
deposits from, lend money to, and generally engage in any kind of trust, debt,
equity or other transaction, in addition to those contemplated by this Agreement
or any other Loan Document, with the Borrower or any of its Subsidiaries in
which the Borrower or such Subsidiary is not restricted hereby from engaging
with any other Person.
10.10. Lender Credit Decision. Each Lender acknowledges that
it has, independently and without reliance upon the Agent, the Collateral Agent,
any Original Lender or any other Lender and based on the financial statements
prepared by the Borrower and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement and the other Loan Documents. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent, the Collateral Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement and the other Loan Documents.
10.11. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower, and the Agent may
be removed at any time with or without cause by written notice received by the
Agent from the Required Lenders. Upon any such resignation or removal of the
Agent, the Required Lenders shall have the right to appoint, on behalf of the
Borrower and the Lenders, a successor Agent. If no successor Agent shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within thirty days after the retiring Agent's giving notice of
resignation, then the retiring Agent may appoint, on behalf of the Borrower and
the Lenders, a successor Agent. Such successor Agent shall be a commercial bank
having capital and retained earnings of at least $50,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder and under
the other Loan Documents. After the Agent's resignation or removal, the
provisions of this Article X shall continue in effect for its benefit in respect
of any actions taken or omitted to be taken by it while it was acting as the
Agent hereunder and under the other Loan Documents.
10.12. Intercreditor Agreement. (A) Each Lender hereby
authorizes the Agent to execute an amendment to the Intercreditor Agreement to
the extent necessary in connection with this Agreement, on behalf of and for the
benefit of such Lender, and each Lender agrees to be bound by the terms of the
Intercreditor Agreement as so amended. Each Lender hereby authorizes the
Collateral Agent to enter into (or amend, as applicable) each of the Collateral
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Documents to which it is a party and to take all action contemplated by such
documents. The Agent shall not enter into or consent to any further amendment,
modification, termination or waiver of any provision contained in the
Intercreditor Agreement without the prior consent of the Required Lenders. Each
Lender agrees that no Lender shall have the right individually to seek to
realize upon the security granted by any Collateral Document, it being
understood and agreed that such rights and remedies may be exercised solely by
the Collateral Agent for the benefit of the Benefited Parties upon the terms of
the Intercreditor Agreement and the Collateral Documents.
(B) The Agent shall not give any direction to the Collateral
Agent (other than with respect to arrangements for the delivery of Net Cash
Proceeds of Assets Sales as provided in Subsections 17(b)(i) and (ii) of the
Intercreditor Agreement in its capacity as Agent hereunder, unless such
direction has been approved by the requisite parties in the accordance with the
terms of the Intercreditor Agreement; provided that any such direction approved
or rejected by the Required Lenders shall be given on behalf of all of the
Lenders.
10.13. Release of Collateral. Upon the effectiveness of this
Agreement, the Lenders hereby authorize the Collateral Agent to release any Lien
granted to or held by the Collateral Agent upon the capital stock of Power
Brushes Ltd. Upon request by the Collateral Agent at any time, the Lenders will
confirm in writing the Collateral Agent's authority to release the aforesaid
Collateral pursuant to this Section 10.13. The Borrower understands that,
notwithstanding the foregoing, the Borrower shall not be entitled to any such
release from the Collateral Agent until such time as the Collateral Agent
receives the necessary consent from the "Applicable Requisite Directing Parties"
(as defined in the Intercreditor Agreement).
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any
rights of the Lenders under applicable law, if the Borrower becomes insolvent,
however evidenced, or any Default or Unmatured Default occurs, any indebtedness
from any Lender to the Borrower (including all account balances, whether
provisional or final and whether or not collected or available) may be offset
and applied toward the payment of the Obligations owing to such Lender, whether
or not the Obligations, or any part hereof, shall then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or
otherwise, has payment made to it upon its Obligations (other than payments
received pursuant to Sections 3.1 or 3.4) in a greater proportion than that
received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Obligations held by the other Lenders so that after
such purchase each Lender will hold its ratable proportion of Obligations. If
any Lender, whether in connection with setoff or amounts which might be subject
to setoff or otherwise, receives collateral or other protection for its
Obligation or such amounts which may be subject to setoff, such Lender agrees,
promptly upon demand, to take such action necessary such that all Lenders share
in the benefits of such collateral ratably in proportion to the Obligations
owing to them. In case any such payment is disturbed by legal process, or
otherwise, appropriate further adjustments shall be made.
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ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions of the
Loan Documents shall be binding upon and inure to the benefit of the Borrower
and the Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents and (ii) any assignment by any Lender must be made in compliance
with Section 12.3 hereof. Notwithstanding clause (ii) of this Section, any
Lender may at any time, without the consent of the Borrower or the Agent, assign
all or any portion of its rights under this Agreement and its Notes to a Federal
Reserve Bank; provided, however, that no such assignment shall release the
transferor Lender from its obligations hereunder. The Agent may treat the payee
of any Note as the owner thereof for all purposes hereof unless and until such
payee complies with Section 12.3 hereof in the case of an assignment thereof or,
in the case of any other transfer, a written notice of the transfer is filed
with the Agent. Any assignee or transferee of a Note agrees by acceptance
thereof to be bound by all the terms and provisions of the Loan Documents. Any
request, authority or consent of any Person, who at the time of making such
request or giving such authority or consent is the holder of any Note, shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or Notes issued in exchange therefor.
12.2. Participations.
12.2.1. Permitted Participants; Effect. Any Lender
may, in the ordinary course of its business and in accordance
with applicable law, at any time sell to one or more banks or
other entities ("Participants") participating interests in any
Revolving Loan owing to such Lender, any Note held by such
Lender, any Commitment of such Lender, any L/C Interest of
such Lender or any other interest of such Lender under the
Loan Documents on a pro-rata or non pro-rata basis. In the
event of any such sale by a Lender of participating interests
to a Participant, such Lender's obligations under the Loan
Documents shall remain unchanged, such Lender shall remain
solely responsible to the other parties hereto for the
performance of such obligations, such Lender shall remain the
holder of any such Note for all purposes under the Loan
Documents, all amounts payable by the Borrower under this
Agreement shall be determined as if such Lender had not sold
such participating interests, and the Borrower and the Agent
shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under the
Loan Documents except that, for purposes of Article III
hereof, the Participants shall be entitled to the same rights
as if they were Lenders.
12.2.2. Voting Rights. Each Lender shall retain the
sole right to approve, without the consent of any Participant,
any amendment, modification or waiver of any provision of the
Loan Documents other than any amendment, modification or
waiver with respect to any Revolving Loan or Commitment in
which such Participant has an interest which forgives
principal, interest or fees or reduces the interest rate or
fees payable pursuant to the terms of this Agreement with
respect to any such Revolving Loan or Commitment, postpones
any date fixed for any
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regularly-scheduled payment of principal of, or interest or
fees on, any such Revolving Loan or Commitment, releases any
guarantor of any such Loan or releases any substantial portion
of collateral, if any, securing any such Revolving Loan.
12.2.3. Benefit of Setoff. The Borrower agrees that
each Participant shall be deemed to have the right of setoff
provided in Section 11.1 hereof with respect to its
participating interest in amounts owing under the Loan
Documents to the same extent as if the amount of its
participating interest were owing directly to it as a Lender
under the Loan Documents, provided that each Lender shall
retain the right of setoff provided in Section 11.1 hereof
with respect to the amount of participating interests sold to
each Participant. The Lenders agree to share with each
Participant, and each Participant, by exercising the right of
setoff provided in Section 11.1 hereof, agrees to share with
each Lender, any amount received pursuant to the exercise of
its right of setoff, such amounts to be shared in accordance
with Section 11.2 as if each Participant were a Lender.
12.3. Assignments.
12.3.1. Permitted Assignments. Any Lender may, in the
ordinary course of its business and in accordance with
applicable law, at any time assign to one or more banks or
other entities ("Purchasers") all or any part of its rights
and obligations under the Loan Documents on a pro-rata or non
pro-rata basis. Such assignment shall be substantially in the
form of Exhibit D hereto and shall not be permitted hereunder
unless such assignment is either for all of such Lender's
rights and obligations under the Loan Documents or involves
loans and commitments in an aggregate amount of at least
$5,000,000.
12.3.2. Effect; Effective Date. Upon (i) delivery to
the Agent of a notice of assignment, substantially in the form
attached as Exhibit I to Exhibit D hereto (a "Notice of
Assignment") and (ii) payment of a $3,500 fee to the Agent for
processing such assignment, such assignment shall become
effective on the effective date specified in such Notice of
Assignment. On and after the effective date of such
assignment, such Purchaser shall for all purposes be a Lender
party to this Agreement and any other Loan Documents executed
by the Lenders and shall have all the rights and obligations
of a Lender under the Loan Documents, to the same extent as if
it were an original party hereto, and no further consent or
action by the Borrower, the Lenders or the Agent shall be
required to release the transferor Lender with respect to the
percentage of the Aggregate Commitment and Revolving Loans
assigned to such Purchaser. Upon the consummation of any
assignment to a Purchaser pursuant to this Section 12.3.2, the
transferor Lender, the Agent and the Borrower shall make
appropriate arrangements so that replacement Notes are issued
to such transferor Lender and new Notes or, as appropriate,
replacement Notes, are issued to such Purchaser, in each case
in principal amounts reflecting their Commitment, as adjusted
pursuant to such assignment.
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12.4. Dissemination of Information. The Borrower authorizes
each Lender to disclose to any Participant or Purchaser or any other Person
acquiring an interest in the Loan Documents by operation of law (each a
"Transferee") and any prospective Transferee any and all information in such
Lender's possession concerning the creditworthiness of the Borrower and its
Subsidiaries.
ARTICLE XIII
NOTICES
13.1. Giving Notice. Except as otherwise permitted by Section
2.12 with respect to borrowing notices, all notices and other communications
provided to any party hereto under this Agreement or any other Loan Documents
shall be in writing or by telex or by facsimile and addressed or delivered to
such party at its address set forth below its signature hereto or at such other
address as may be designated by such party in a notice to the other parties. Any
notice, if mailed and properly addressed with postage prepaid, shall be deemed
given when received; any notice, if transmitted by telex or facsimile, shall be
deemed given when transmitted (answerback confirmed in the case of telexes).
13.2. Change of Address. The Borrower, the Agent and any
Lender may each change the address for service of notice upon it by a notice in
writing to the other parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts,
all of which taken together shall constitute one agreement, and any of the
parties hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
Agent, the Lenders, and each party has notified the Agent by telex or telephone,
that it has taken such action.
IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent
have executed this Agreement as of the date first above written.
JASON INCORPORATED
By:
----------------------------
Mark Train
President
Address:
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: Mark Train
Telephone No. 414/277-9300
Facsimile No. 414/277-9445
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Commitment: THE FIRST NATIONAL BANK OF
$30,000,000 CHICAGO, Individually and as
Agent
By:
-----------------------
Jennifer Gilpin
Title:
Address:
One First National Plaza
Chicago, Illinois 60670
Attention: Jennifer Gilpin
Telephone No. 312/732-5867
Facsimile No. 312/732-1117
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Commitment: M&I MARSHALL & ILSLEY BANK
$20,000,000
By:___________________________
Kathleen T. Coleman
Vice President
Address:
770 N. Water Street
P.O. Box 2035
Milwaukee, WI 53201-2035
Attention: Kathleen T. Coleman
Telephone No. 414/765-7958/7606
Facsimile No. 414/765-7625
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