EXHIBIT 10.9
CREDIT AGREEMENT
among
GLOBE HOLDINGS, INC.,
GLOBE MANUFACTURING CORP.,
VARIOUS LENDERS,
MERRILL LYNCH, PIERCE, FENNER & SMITH, INC.,
as Syndication Agent,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent,
and
BANCAMERICA ROBERTSON STEPHENS,
as Arranger
__________________________________
Dated as of July 31, 1998
__________________________________
TABLE OF CONTENTS
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ARTICLE I.
DEFINITIONS.......................................................... 1
1.01 Defined Terms.................................................. 1
1.02 Other Definitional Provisions.................................. 29
(a) Defined Terms............................................. 29
(b) The Agreement............................................. 29
(c) Certain Common Terms...................................... 29
(d) Performance; Time......................................... 29
(e) Contracts................................................. 29
(f) Laws 30
1.03 Accounting Principles.......................................... 30
ARTICLE II.
THE CREDIT FACILITIES................................................ 30
2.01 Amounts and Terms of Commitments............................... 30
(a) The Tranche A Term Loans.................................. 30
(b) The Tranche B Term Loans.................................. 30
(c) The Revolving Loans....................................... 30
(d) The Swingline Loans....................................... 31
2.02 Loan Accounts and Register; Notes.............................. 32
2.03 Procedure for Borrowing........................................ 33
2.04 Conversion and Continuation Elections for Loans................ 34
2.05 Reduction and Termination of Commitments....................... 36
2.06 Voluntary Prepayments.......................................... 37
2.07 Mandatory Prepayments.......................................... 38
2.08 Repayment of Principal......................................... 41
(a) The Tranche A Term Loans.................................. 41
(b) The Tranche B Term Loans.................................. 41
(c) The Revolving Loans....................................... 42
(d) The Swingline Loans....................................... 42
2.09 Interest....................................................... 42
2.10 Fees........................................................... 44
(a) Commitment Fees........................................... 44
(b) Other Fees................................................ 45
2.11 Computation of Fees and Interest............................... 45
2.12 Payments by the Borrower....................................... 46
(i)
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2.13 Payments by the Lenders to the Administrative Agent................ 46
2.14 Sharing of Payments, etc........................................... 47
2.15 Security and Guaranties............................................ 48
ARTICLE III.
THE LETTERS OF CREDIT.................................................... 48
3.01 The Letter of Credit Subfacility................................... 48
3.02 Issuance, Amendment and Renewal of Letters of Credit............... 49
3.03 Participations, Drawings and Reimbursements........................ 51
3.04 Repayment of Participations........................................ 52
3.05 Role of the Issuing Lenders........................................ 53
3.06 Obligations Absolute............................................... 53
3.07 Cash Collateral Pledge............................................. 54
3.08 Letter of Credit Fees.............................................. 55
3.09 Uniform Customs and Practice....................................... 56
ARTICLE IV.
TAXES, YIELD PROTECTION AND ILLEGALITY................................... 56
4.01 Taxes.............................................................. 56
4.02 Illegality......................................................... 59
4.03 Increased Costs and Reduction of Return............................ 60
4.04 Funding Losses..................................................... 61
4.05 Inability to Determine Rates....................................... 61
4.06 Increased Costs on Eurodollar Loans................................ 62
4.07 Certificates of Lenders............................................ 62
4.08 Change of Lending Office, Replacement Lender, etc.................. 62
4.09 Survival........................................................... 63
ARTICLE V.
CONDITIONS PRECEDENT..................................................... 63
5.01 Conditions to Loans and Letters of Credit on the Closing Date...... 63
(a) Credit Agreement.............................................. 64
(b) Resolutions; Incumbency....................................... 64
(c) Articles of Incorporation; By-laws and Good Standing.......... 64
(d) Subsidiary Guaranty........................................... 65
(e) Pledge Agreement.............................................. 65
(f) Security Agreement............................................ 65
(g) Mortgages; Title Insurance; Survey, etc....................... 66
(h) Legal Opinions................................................ 66
(i) Payment of Fees and Expenses.................................. 67
(j) Certificates.................................................. 67
(ii)
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(k) Solvency Opinion...................................................................... 67
(l) Transaction........................................................................... 67
(m) Adverse Change........................................................................ 68
(n) Governmental and Third Party Approvals................................................ 68
(o) Litigation............................................................................ 68
(p) Shareholders Agreements; Management Agreements and Tax Sharing Agreements............. 69
(q) Financial Statements.................................................................. 69
(r) Insurance............................................................................. 69
5.02 Conditions to all Borrowings and the Issuance of any Letters of Credit..................... 69
(a) Notice................................................................................ 69
(b) Continuation of Representations and Warranties........................................ 69
(c) No Existing Default................................................................... 69
(d) No Material Adverse Effect............................................................ 69
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES................................................................... 70
6.01 Existence and Power........................................................................ 70
6.02 Authorization; No Contravention............................................................ 70
6.03 Governmental Authorization................................................................. 71
6.04 Binding Effect............................................................................. 71
6.05 Litigation................................................................................. 71
6.06 No Default................................................................................. 72
6.07 ERISA Compliance........................................................................... 72
6.08 Use of Proceeds; Margin Regulations....................................................... 73
6.09 Title to Properties, etc................................................................... 73
6.10 Taxes...................................................................................... 73
6.11 Financial Statements....................................................................... 73
6.12 Securities Law, etc.; Compliance........................................................... 74
6.13 Governmental Regulation.................................................................... 74
6.14 Labor Controversies........................................................................ 74
6.15 Subsidiaries............................................................................... 74
6.16 Patents, Trademarks, etc................................................................... 74
6.17 Accuracy of Information.................................................................... 74
6.18 Hazardous Materials........................................................................ 75
6.19 Collateral Documents....................................................................... 75
6.20 Solvency................................................................................... 76
6.21 Representations and Warranties in the other Documents...................................... 76
6.22 Capitalization............................................................................. 76
6.23 Special Purpose Corporation................................................................ 77
6.24 Insurance.................................................................................. 77
6.25 Subordination Provisions................................................................... 77
(iii)
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ARTICLE VII.
AFFIRMATIVE COVENANTS......................................................................................... 78
7.01 Financial Statements.................................................................................... 78
7.02 Certificates; Other Information......................................................................... 79
7.03 Notices................................................................................................. 80
7.04 Books, Records and Inspections.......................................................................... 82
7.05 Maintenance of Property; Insurance...................................................................... 82
7.06 Franchises.............................................................................................. 83
7.07 Compliance with Law..................................................................................... 83
7.08 Payment of Taxes........................................................................................ 83
7.09 Contributions........................................................................................... 83
7.10 End of Fiscal Years; Fiscal Quarters.................................................................... 84
7.11 Cash Management System.................................................................................. 84
7.12 Additional Security; Further Assurances................................................................. 84
7.13 Foreign Subsidiaries Security........................................................................... 85
7.14 Use of Proceeds; Margin Regulations..................................................................... 85
7.15 Holdings Preferred Stock................................................................................ 86
ARTICLE VIII.
NEGATIVE COVENANTS............................................................................................ 86
8.01 Liens................................................................................................... 86
8.02 Consolidation, Merger, Purchase or Sale of Assets, etc.................................................. 89
8.03 Dividends............................................................................................... 91
8.04 Indebtedness............................................................................................ 93
8.05 Advances, Investments and Loans......................................................................... 95
8.06 Transactions with Affiliates............................................................................ 97
8.07 Capital Expenditures.................................................................................... 98
8.08 Consolidated Interest Coverage Ratio.................................................................... 99
8.09 Consolidated Fixed Charge Coverage Ratio................................................................ 100
8.10 Maximum Leverage Ratio.................................................................................. 100
8.11 Limitation on Voluntary Payments and Modification of Indebtedness; Modifications
of Certificate of Incorporation, By-Laws and Certain Other Agreements; etc.............................. 101
8.12 Limitation on Certain Restrictions on Subsidiaries...................................................... 103
8.13 Limitation on Issuance of Capital Stock................................................................. 103
8.14 Business................................................................................................ 104
8.15 Limitation on Creation of Subsidiaries.................................................................. 105
ARTICLE IX.
EVENTS OF DEFAULT............................................................................................. 105
9.01 Event of Default........................................................................................ 105
(iv)
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(a) NonPayment................................................................... 105
(b) Representation or Warranty................................................... 105
(c) Specific Defaults............................................................ 105
(d) Other Defaults............................................................... 105
(e) CrossDefault................................................................. 106
(f) Insolvency; Voluntary Proceedings............................................ 106
(g) Involuntary Proceedings...................................................... 106
(h) ERISA........................................................................ 106
(i) Judgments.................................................................... 107
(j) Change of Control............................................................ 107
(k) Collateral; Guaranties....................................................... 107
9.02 Remedies.......................................................................... 107
9.03 Rights Not Exclusive.............................................................. 108
ARTICLE X.
THE GUARANTY............................................................................ 108
10.01 Guaranty from Holdings............................................................ 108
ARTICLE XI.
THE ADMINISTRATIVE AGENT, THE COLLATERAL
AGENT, THE ISSUING LENDERS, THE ARRANGER AND THE
SYNDICATION AGENT....................................................................... 112
11.01 Appointment and Authorization..................................................... 112
11.02 Delegation of Duties.............................................................. 112
11.03 Liability of Agent................................................................ 113
11.04 Reliance by Agent................................................................. 113
11.05 Notice of Default................................................................. 114
11.06 Credit Decision................................................................... 114
11.07 Indemnification................................................................... 114
11.08 Agent in Individual Capacity...................................................... 115
11.09 Successor Agent................................................................... 115
11.10 The Arranger and Syndication Agent................................................ 116
ARTICLE XII.
MISCELLANEOUS........................................................................... 116
12.01 Amendments and Waivers............................................................ 116
12.02 Notices........................................................................... 118
12.03 No Waiver; Cumulative Remedies.................................................... 118
12.04 Costs and Expenses................................................................ 118
12.05 Indemnity......................................................................... 119
12.06 Successors and Assigns............................................................ 120
(v)
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12.07 Assignments, Participations, etc.......................................... 120
12.08 Confidentiality........................................................... 122
12.09 Setoff.................................................................... 122
12.10 Notification of Addresses, Lending Offices, etc........................... 123
12.11 Counterparts.............................................................. 123
12.12 Severability.............................................................. 123
12.13 No Third Parties Benefited................................................ 123
12.14 Governing Law and Jurisdiction............................................ 123
12.15 Waiver of Jury Trial...................................................... 124
12.16 Domicile of Loans......................................................... 124
SCHEDULE 1.01 (a) Lending Offices
SCHEDULE 1.01 (b) Commitments
SCHEDULE 1.01 (c) Subsidiary Guarantors
SCHEDULE 1.01 (d) Indebtedness to be Refinanced
SCHEDULE 6.09 Real Property
SCHEDULE 6.15 Subsidiaries
SCHEDULE 6.24 Insurance
SCHEDULE 8.01 Existing Liens
SCHEDULE 8.04 Existing Indebtedness
SCHEDULE 8.05 Existing Investments
EXHIBIT A Form of Notice of Borrowing
EXHIBIT B Form of Notice of Conversion/Continuation
EXHIBIT C Form of Pledge Agreement
EXHIBIT D Form of Subsidiary Guaranty
EXHIBIT E Form of Guarantor Supplement
EXHIBIT F Form of Security Agreement
EXHIBIT G Form of Leverage Ratio Certificate
EXHIBIT H Form of Kirkland & Ellis Opinion
EXHIBIT I Form of White & Case LLP Opinion
EXHIBIT J Form of Holdings Shareholder Subordinated Note
EXHIBIT K Form of Compliance Certificate
EXHIBIT L Form of Assignment and Acceptance
EXHIBIT M Form of Intercompany Note
EXHIBIT N Form of Section 4.01(f) Certificate
(vi)
CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of July 31, 1998, among GLOBE HOLDINGS,
INC., a Massachusetts corporation ("Holdings"), GLOBE MANUFACTURING CORP., an
Alabama corporation (the "Borrower"), the several lenders from time to time
party to this Agreement (the "Lenders"), MERRILL LYNCH, PIERCE, FENNER & SMITH,
INC., as Syndication Agent, BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Administrative Agent, and BANCAMERICA ROBERTSON STEPHENS, as
Arranger.
W I T N E S S E T H:
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WHEREAS, subject to and upon the terms and conditions set forth
herein, the Lenders are willing to make available to the Borrower the respective
credit facilities provided for herein;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I.
DEFINITIONS
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1.01 Defined Terms. As used in this Agreement, the capitalized terms
in the preamble hereto shall have the meanings therein given them, and the
following words and terms shall have the meanings specified below:
"Acquired Entity or Business" has the meaning specified in the
definition of "Consolidated Net Income".
"Additional Security Documents" has the meaning specified in Section
7.12.
"Adjusted Consolidated Working Capital" means, at any time,
Consolidated Current Assets (but excluding therefrom all cash and Cash
Equivalents) less Consolidated Current Liabilities at such time.
"Adjustment Date" means (A) the first date after 180 days following
the Closing Date upon which Holdings has delivered a Leverage Ratio Certificate
to the Administrative Agent in accordance with Section 12.02 as of the end of
the then most recently ended fiscal quarter of Holdings (the "First Adjustment
Date") and (B) after the First Adjustment Date, the earlier of (x) each date
which is 45 days after the end of a fiscal quarter of Holdings (or, in the case
of the fourth fiscal quarter of Holdings, 90 days) and (y) the date which is two
Business Days after Holdings has delivered a Leverage Ratio Certificate to the
Administrative Agent in accordance with Section 12.02 as of the end of a fiscal
quarter of Holdings.
"Administrative Agent" means Bank of America in its capacity as
administrative agent for the Lenders hereunder, and any successor administrative
agent.
"Administrative Agent's Payment Office" means the address for payments
set forth on the signature page hereto in relation to the Administrative Agent
or such other address as the Administrative Agent may from time to time specify
in accordance with Section 12.02.
"Affiliate" means, with respect to any Person, any other Person (i)
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person or (ii) that directly or indirectly owns more
than 5% of any class of the capital stock of, or equity interests in, such
Person. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such other Person, whether through the ownership
of voting securities, by contract or otherwise, provided that no Lender nor any
Affiliate thereof shall be an Affiliate of Holdings or any of its Subsidiaries.
"Agent" means Bank of America, in its capacity as Administrative Agent
and as Collateral Agent, in each case for the Lenders hereunder, and shall
include any successor to the Agent appointed pursuant to Article XI and Article
XII.
"Agent-Related Persons" has the meaning specified in Section 11.03.
"Aggregate Commitment" means the combined Commitments of the Lenders
in the initial principal amount of $165,000,000 as such amount may be reduced
from time to time pursuant to this Agreement.
"Aggregate Revolving Commitment" means the combined Revolving
Commitments of the Lenders in the initial principal amount of $50,000,000 as
such amount may be reduced from time to time pursuant to this Agreement.
"Aggregate Tranche A Term Loan Commitment" means the combined Tranche
A Term Loan Commitments of the Lenders in the initial principal amount of
$60,000,000 as such amount may be reduced from time to time pursuant to this
Agreement.
"Aggregate Tranche B Term Loan Commitment" means the combined Tranche
B Term Loan Commitments of the Lenders in the initial principal amount of
$55,000,000 as such amount may be reduced from time to time pursuant to this
Agreement.
"Agreement" means this Credit Agreement as from time to time amended,
modified or supplemented.
"Applicable Margin" means the margin to be added to the Eurodollar
Rate or the Base Rate, as the case may be, in accordance with Section 2.09(a).
"Arranger" means BancAmerica Robertson Stephens.
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"Asset Contribution" means the contribution by Holdings to the
Borrower of all of Holdings' material assets (other than the capital stock of
the Borrower) pursuant to the terms of the Asset Contribution Documents.
"Asset Contribution Documents" means all documents entered into to
evidence the Asset Contribution.
"Asset Sale" means the direct or indirect sale, lease (other than
operating leases entered into in the ordinary course of business), transfer,
conveyance or other disposition (including, without limitation, dispositions
pursuant to sale and leaseback transactions), in a single transaction or a
series of transactions, by Holdings or any of its Subsidiaries to any Person
(other than to Holdings or any of its Wholly-Owned Subsidiaries) of any property
or assets of Holdings or any of its Subsidiaries (including any capital stock
held by Holdings or any such Subsidiary other than such Person's own capital
stock), other than sales or transfers of assets pursuant to Sections 8.02(ii),
(iii), (iv), (vii), (viii), (ix), (xi), (xii), (xiii), (xiv), (xv) and (xvi).
"Assignee" has the meaning specified in Section 12.07(a).
"Assignment and Acceptance" has the meaning specified in Section
12.07(a).
"Attorney Costs" means and includes all reasonable fees and
disbursements of any law firm or other external counsel and, without
duplication, the allocated cost of internal legal services and all reasonable
disbursements of internal counsel.
"B Lender" means each Lender that has outstanding Tranche B Term Loans
hereunder.
"Bank of America" means Bank of America National Trust and Savings
Association, a national banking association, in its individual capacity and
shall include any successor thereto by merger or otherwise.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C. (S) 101, et seq.).
"Base Rate" means, for any day, the higher of (a) the Reference Rate
or (b) the Federal Funds Rate plus 1/2%, in each case as in effect for such day.
"Base Rate Loan" means each Swingline Loan and each other Loan that
bears interest based on the Base Rate.
"Borrower" has the meaning specified in the preamble hereto.
"Borrower Senior Subordinated Note Documents" means the Borrower
Senior Subordinated Note Indenture, the Borrower Senior Subordinated Notes and
all other documents and agreements executed and delivered pursuant to the
Borrower Senior Subordinated Note Indenture.
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"Borrower Senior Subordinated Note Exchange Offer" means the exchange
offer for the Borrower Senior Subordinated Notes pursuant to the applicable
Borrower Senior Subordinated Note Documents for new Borrower Senior Subordinated
Notes which have been registered under the Securities Act.
"Borrower Senior Subordinated Note Indenture" means the Indenture,
dated as July 31, 1998, between the Borrower and Norwest Bank Minnesota,
National Association, as trustee, as amended, modified or supplemented from time
to time in accordance with the terms hereof and thereof.
"Borrower Senior Subordinated Notes" means the Borrower's 10% senior
subordinated notes due 2008 (which term includes the senior subordinated notes
of the Borrower issued as part of the Borrower Senior Subordinated Note Exchange
Offer), as amended, modified or supplemented from time to time in accordance
with the terms hereof and thereof.
"Borrowing" means a borrowing hereunder consisting of one or more
Loans under a single Tranche made to the Borrower on the same Borrowing Date by
the Lenders having Commitments of the respective Tranche or by the Swingline
Lender, as the case may be, in each case pursuant to Section 2.01, and may be a
Tranche A Term Loan Borrowing, a Tranche B Term Loan Borrowing, a Revolving
Borrowing or a Swingline Borrowing.
"Borrowing Date" means, in relation to any Loan, the date of the
borrowing of such Loan as specified in the relevant Notice of Borrowing for a
Tranche A Term Loan Borrowing, a Tranche B Term Loan Borrowing or a Revolving
Borrowing or as specified in the relevant request for a Swingline Loan, as the
case may be.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in San Francisco, Chicago or New York City are
authorized or required by law to close and, if such term is used in relation to
any Eurodollar Loan or the Interest Period therefor, any such day on which
dealings are carried on by and between banks in Dollar deposits in the
applicable interbank market.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other law,
rule or regulation, whether or not having the force of law (but with which a
Lender customarily complies) regarding capital adequacy of any Lender or of any
corporation controlling a Lender.
"Capital Expenditures" means, for any period and with respect to any
Person, the aggregate of all expenditures by such Person and its Subsidiaries
for the acquisition or leasing of fixed or capital assets or additions to
equipment (including replacements, capitalized repairs and improvements during
such period) which is capitalized under GAAP on a consolidated balance sheet of
such Person and its Subsidiaries.
"Capital Lease" has the meaning specified in the definition of
"Capital Lease Obligations".
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"Capital Lease Obligations" means all monetary obligations of Holdings
or any of its Subsidiaries under any leasing or similar arrangement which, in
accordance with GAAP, is classified as a capital lease ("Capital Lease").
"Cash Collateralize" means to pledge and deposit with or deliver to
the Administrative Agent, for the benefit of the Administrative Agent, the
Issuing Lenders and the Lenders, as collateral for the Letter of Credit
Obligations, cash or deposit account balances pursuant to documentation in form
and substance reasonably satisfactory to the Administrative Agent and the
Issuing Lenders (which documents are hereby consented to by the Lenders).
Derivatives of such term shall have corresponding meanings. Cash Collateral
shall be invested in Cash Equivalents of a tenor reasonably satisfactory to the
Administrative Agent and as instructed by the Borrower, which Cash Equivalents
shall be held in the name of, and under the control of, the Administrative Agent
in a manner reasonably satisfactory to the Collateral Agent.
"Cash Equivalents" means any or all of the following: (i) obligations
of, or guaranteed as to interest and principal by, the United States Government
maturing within one year after the date on which such obligations are purchased;
(ii) marketable direct obligations issued by any state of the United States or
any political subdivision or public instrumentality of such state, in each case
having maturities of not more than one year from the date of acquisition and, at
the time of acquisition thereof, having one of the two highest ratings
obtainable from either S&P or Moody's; (iii) open market commercial paper of any
corporation (other than Holdings or any of its Subsidiaries) incorporated under
the laws of the United States or any State thereof or the District of Columbia
rated P-1 or its equivalent by Moody's or A-1 or its equivalent or higher by
S&P; (iv) time deposits or certificates of deposit maturing within one year
after the issuance thereof issued by commercial banks organized under the laws
of any country which is a member of the OECD and having a combined capital and
surplus in excess of $250,000,000 or which is a Lender; (v) repurchase
agreements with a term of not more than seven days with respect to securities
described in clause (i) above entered into with an office of a bank or trust
company meeting the criteria specified in clause (iv) above; (vi) bankers'
acceptances with maturities not exceeding one year and overnight bank deposits
in each case with an office of a bank or trust company meeting the criteria
specified in clause (iv) above; and (vii) money market, mutual or similar funds
substantially all of whose investments are comprised of the investments
described in clauses (i) through (vi) above.
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as the same may be amended from time to time, 42
U.S.C. (S) 9601 et seq.
"Change of Control" means (a) (i) prior to a Qualified Public Equity
Offering, the Permitted Holders shall cease to own on a fully diluted basis at
least 51% of the economic and voting interest in Holdings capital stock, and
(ii) on and after the consummation of a Qualified Public Equity Offering, (x)
the consummation of a transaction (including, without limitation, any merger or
consolidation) the result of which is that any "person" (as such term is defined
in Section 13(d) (3) of the Exchange Act) or group of related persons, together
with any Affiliates thereof (other than the Permitted Holders), becomes the
"beneficial owner" (as such term is
-5-
defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or
indirectly, of more than 35% of the Voting Stock of Holdings (as determined on a
fully diluted basis as measured by voting power rather than by number of
shares), provided that the Permitted Holders "beneficially own" (as such term is
defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or
indirectly, in the aggregate a lesser percentage of the Voting Stock of Holdings
than such other "person" or group of related persons and do not have the right
or ability by voting power, contract or otherwise to elect or designate for
election a majority of the Board of Directors of Holdings or (y) the first day
on which a majority of the members of the Board of Directors of Holdings are not
Continuing Directors, (b) Holdings shall cease to own 100% of the issued and
capital stock of the Borrower or (c) a "Change of Control" shall occur under the
Borrower Senior Subordinated Note Documents or the Holdings Senior Discount Note
Documents.
"CHS" means Code, Hennessy & Simmons III, L.P., a Delaware limited
partnership.
"CHS Management" means CHS Management III, L.P., a Delaware limited
partnership.
"CHS Management Agreement" means the Management Agreement, dated as of
July 31, between the Borrower and CHS Management, as amended, modified or
supplemented from time to time in accordance with the terms hereof and thereof.
"Closing Date" means the date on or before September 15, 1998 on which
all conditions precedent set forth in Sections 5.01 and 5.02 have been satisfied
or waived in accordance with this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and rulings issued thereunder. Section
references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" means all property with respect to which any security
interest has been granted (or purported to be granted) pursuant to any
Collateral Document, as well as any property which serves as Cash Collateral for
any Obligations.
"Collateral Agent" means the Administrative Agent acting as collateral
agent for the Lenders pursuant to the Collateral Documents.
"Collateral Documents" means the Pledge Agreement, the Subsidiary
Guaranty, the Security Agreement, each Mortgage, each Additional Security
Document and each Guarantor Supplement.
"Commitment" means any of the commitments of any Lender, i.e., whether
the Tranche A Term Loan Commitment, Tranche B Term Loan Commitment or Revolving
Commitment.
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"Commitment Percentage" means, as to any Lender, such Lender's Tranche
A Term Loan Commitment Percentage, Tranche B Term Loan Commitment Percentage or
Revolving Commitment Percentage, as applicable.
"Compliance Certificate" has the meaning specified in Section 7.02(a).
"Consolidated Current Assets" means, at any time, the consolidated
current assets of Holdings and its Subsidiaries at such time.
"Consolidated Current Liabilities" means, at any time, the
consolidated current liabilities of Holdings and its Subsidiaries at such time,
but excluding the current portion of any Indebtedness under this Agreement and
the current portion of any other long-term Indebtedness which would otherwise be
included therein.
"Consolidated EBIT" means, for any period, Consolidated Net Income for
such period before Consolidated Interest Expense (calculated without regard to
the proviso contained in the definition thereof) and provision for taxes for
such period and without giving effect to (w) any extraordinary gains or losses,
(x) any gains or losses from sales of assets other than from sales of inventory
sold in the ordinary course of business, (y) any premiums, fees or expenses
incurred in connection with any Permitted Acquisition and any related
financings, and (z) the amortization or depreciation of any amounts required or
permitted by Accounting Principles Board Opinion Nos. 16 (including non-cash
write-ups and non-cash charges relating to inventory and fixed assets, in each
case arising in connection with any Permitted Acquisition) and 17 (including
non-cash charges relating to intangibles and goodwill arising in connection with
any Permitted Acquisition).
"Consolidated EBITDA" means, for any period, Consolidated EBIT for
such period, adjusted by adding thereto, without duplication, the sum of (i) the
amount of all amortization of goodwill and other intangibles (including debt
issuance and other deferred financing, legal and accounting costs (including
those associated with the Transaction and the issuance of the Holdings Senior
Discount Notes)) and depreciation, (ii) all fees and expenses incurred in
connection with the Transaction, the issuance of the Holdings Senior Discount
Notes and each Exchange Offer and (iii) other non-cash charges and expenses
(including non-cash charges or expenses included in costs of goods sold), in
each case to the extent that same were deducted in arriving at Consolidated EBIT
for such period and (y) subtracting therefrom, without duplication, the sum of
(i) the amount of all non-cash credits to the extent that same were included in
arriving at Consolidated EBIT for such period (but which will be added back to
Consolidated EBITDA in any subsequent period to the extent cash is received in
respect of any such non-cash credits in such subsequent period) and (ii) the
amount of all cash payments made in such period to the extent that same relate
to a non-cash charge incurred in a previous period.
"Consolidated Fixed Charge Coverage Ratio" means, for any period, the
ratio of (x) the remainder of (A) Consolidated EBITDA for such period minus (B)
the sum of (I) the amount of all Capital Expenditures made by Holdings and its
Subsidiaries for such period (other than Capital Expenditures (i) to the extent
financed with equity proceeds, Asset Sale Proceeds, insurance proceeds or
Indebtedness or (ii) to the extent constituting a Permitted Acquisition or a
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Permitted Capital Expansion), and (II) the amount of all cash payments made by
Holdings and its Subsidiaries in respect of taxes or tax liabilities for such
period to (y) Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges" means, for any period, the sum, without
duplication, of (i) Consolidated Interest Expense that is paid or payable in
cash for such period and (ii) the scheduled principal amount of all amortization
payments on all Indebtedness (including, without limitation, the principal
component of all Capitalized Lease Obligations but excluding the repayment of
the Indebtedness to be Refinanced) of Holdings and its Subsidiaries for such
period (as determined on the first day of such period).
"Consolidated Indebtedness" means, at any time, the principal amount
of all Indebtedness of Holdings and its Subsidiaries at such time determined on
a consolidated basis to the extent that such Indebtedness would be accounted for
as debt on the liability side of a balance sheet in accordance with GAAP plus,
without duplication, (i) the maximum amount available to be drawn under all
letters of credit (including any Letters of Credit), bankers acceptances and
similar obligations issued for the account of Holdings and its Subsidiaries and
all unpaid drawings or reimbursement obligations in respect thereof, (ii) the
principal amount of all bonds issued by Holdings and its Subsidiaries in
connection with workers' compensation obligations, lease obligations, surety and
similar obligations, and (iii) the amount of all Contingent Obligations of
Holdings and its Subsidiaries determined on a consolidated basis in respect of
Indebtedness of other Persons of the type described above in this definition,
provided that Consolidated Indebtedness shall exclude Indebtedness in respect of
any Holdings Junior Subordinated Notes, any Holdings Senior Discount Notes and
any Holdings Shareholder Subordinated Notes.
"Consolidated Interest Coverage Ratio" means, for any period, the
ratio of (x) Consolidated EBITDA for such period to (y) Consolidated Interest
Expense that is paid or payable in cash for such period (including all such cash
interest expense on the Holdings Senior Discount Notes).
"Consolidated Interest Expense" means, for any period, the total
consolidated interest expense of Holdings and its Subsidiaries for such period
(calculated without regard to any limitations on the payment thereof) (net of
interest income of Holdings and its Subsidiaries for such period) plus, without
duplication, that portion of Capital Lease Obligations of Holdings and its
Subsidiaries representing the interest factor for such period, and including the
net costs or benefits under Interest Rate Protection Agreements, provided that
(w) the amortization of debt issuance and deferred financing, legal and
accounting costs with respect to this Agreement, the Borrower Senior
Subordinated Notes and the Holdings Senior Discount Notes, (x) all fees and
expenses incurred in connection with the Transaction and the issuance of the
Holdings Senior Discount Notes, (y) all interest on the Holdings Junior
Subordinated Notes to the extent paid in kind and (z) all interest on any
Holdings Shareholder Subordinated Notes in each case shall be excluded from
Consolidated Interest Expense to the extent same would otherwise have been
included therein. Any cash payments (other than in respect of principal) made
under or on account of the Holdings Junior Subordinated Notes (whether or not
characterized as interest) to
-8-
the holders thereof shall be included as interest expense for purposes of this
Agreement except to the extent permitted by Sections 8.11(iii), 8.11(v) and
8.11(vi).
"Consolidated leverage Ratio" means, at any time, the ratio of (i)
Consolidated Indebtedness at such time to (ii) Consolidated EBITDA for the
Measurement Period then most recently ended, it being agreed that (A)
Consolidated EBITDA for Holdings' fiscal quarters ended September 30, 1997,
December 31, 1997, March 31, 1998 and June 30, 1998, was $9,787,080,
$13,018,896, $13,089,423 and $12,728,288, respectively, and (B) in determining
the Consolidated Leverage Ratio at any time, there shall be excluded from
Consolidated Indebtedness at such time an amount equal to the amount of
unrestricted cash and/or Cash Equivalents of Holdings and its Subsidiaries as
would be reflected on the consolidated balance sheet of Holdings at such time.
"Consolidated Net Income" means, for any period, the net income (or
loss) of Holdings and its Subsidiaries for such period, determined on a
consolidated basis (after any deduction for minority interests), provided that
(i) in determining Consolidated Net Income, the net income of any other Person
which is not a Subsidiary of Holdings or is accounted for by Holdings by the
equity method of accounting shall be included only to the extent of the payment
of cash dividends or distributions by such other Person to Holdings or a
Subsidiary thereof during such period, (ii) the net income of any Subsidiary of
Holdings (other than the Borrower) shall be excluded to the extent that the
declaration or payment of cash dividends or similar distributions by that
Subsidiary of that net income is not at the date of determination permitted by
operation of its charter or any agreement, instrument or law applicable to such
Subsidiary, (iii) the net income (or loss) of any other Person acquired by such
specified Person or a Subsidiary of such Person in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded, and (iv) in determining the Consolidated Leverage Ratio in Sections
2.07(f) and 8.10 and in determining the Applicable Margin, the commitment fee
and the letter of credit fee there shall be included (to the extent not already
included) in determining Consolidated Net Income for any period the net income
(or loss) of any Person, business, property or asset acquired during such period
pursuant to a Permitted Acquisition and not subsequently sold or otherwise
disposed of by Holdings or one of its Subsidiaries during such period (each such
Person, business, property or asset acquired and not subsequently disposed of
during such period, an "Acquired Entity or Business"), in each case based on the
actual net income (or loss) of such Acquired Entity or Business for the entire
period (including the portion thereof occurring prior to such Permitted
Acquisition).
"Contingent Obligation" means, as applied to any Person, any
obligation of such Person as a result of such Person being a general partner of
the other Person, unless the underlying obligation is expressly made non-
recourse as to such general partner, and any direct or indirect liability of
that Person with respect to any Indebtedness, lease, dividend, letter of credit
or other obligation (the "primary obligations") of another Person (the "primary
obligor"), including any obligation of that Person, whether or not contingent,
(a) to purchase, repurchase or otherwise acquire such primary obligations or any
property constituting direct or indirect security therefor; (b) to advance or
provide funds (i) for the payment or discharge of any such primary obligation,
or (ii) to maintain working capital or equity capital of the primary obligor or
otherwise to
-9-
maintain the net worth or solvency or any balance sheet item, level of income or
financial condition of the primary obligor; (c) to purchase property, securities
or services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation; or (d) otherwise to assure or hold harmless the holder of any such
primary obligation against loss in respect thereof; in each case, including
arrangements wherein the rights and remedies of the holder of the primary
obligation are limited to repossession or sale of certain property of such
Person. The amount of any Contingent Obligation shall be deemed equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made (or if less, the stated or determinable amount of
such Contingent Obligation) or, if not stated or if indeterminable, the maximum
reasonably anticipated liability in respect thereof.
"Continuation Date" means any date on which the Borrower elects to
continue a Eurodollar Loan as a Eurodollar Loan for a further Interest Period in
accordance with the provisions of Section 2.04.
"Contractual Obligations" means, as to any Person, any provision of
any security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or agreement to
which such Person is a party or by which it or any of its property is bound.
"Conversion Date" means any date on which the Borrower elects to
convert a Base Rate Loan to a Eurodollar Loan, or a Eurodollar Loan to a Base
Rate Loan, in each case in accordance with the provisions of Section 2.04.
"Credit Party" means each of Holdings, the Borrower and each
Subsidiary Guarantor.
"Default" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise remedied
during such time) constitute an Event of Default.
"Defaulting Lender" means any Lender with respect to which a Lender
Default is in effect.
"Disbursement Date" has the meaning specified in Section 3.03(b).
"Dividend" with respect to any Person means that such Person has
declared or paid a dividend or returned any equity capital to its stockholders
as such or made any other distribution, payment or delivery of property or cash
to its stockholders as such, or redeemed, retired, purchased or otherwise
acquired, directly or indirectly, for consideration any shares of any class of
its capital stock outstanding on or after the Closing Date (or any options or
warrants issued by such Person with respect to its capital stock), or set aside
any funds for any of the foregoing purposes, or shall have permitted any of its
Subsidiaries to purchase or otherwise acquire for a consideration any shares of
any class of the capital stock of such Person outstanding on or
-10-
after the Closing Date (or any options or warrants issued by such Person with
respect to its capital stock).
"Dollars" and "$" each mean lawful money of the United States.
"Domestic Lending Office" has the meaning provided in the definition
of "Lending Office".
"Domestic Subsidiary" means each Subsidiary of Holdings that is
incorporated under the laws of the United States or any State thereof.
"Eligible Assignee" means and includes (a) a commercial bank or (b) a
financial institution, a fund or other "accredited investor" (as defined in
Regulation D of the Securities Act) that is engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of its business.
"Environmental Claims" means all actions, suits, proceedings or claims
by any Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law or for release of
Hazardous Materials or injury to the environment or threat to public health,
personal injury (including sickness, disease or death), property damage, natural
resources damage, or otherwise alleging liability or responsibility for damages
(punitive or otherwise), cleanup, removal, remedial or response costs,
restitution, civil or criminal penalties, injunctive relief, or other type of
relief, resulting from or based upon (a) the presence, placement, discharge,
emission or release (including intentional and unintentional, negligent and non-
negligent, sudden or non-sudden, accidental or non-accidental placement, spills,
leaks, discharges, emissions or releases) of any Hazardous Material at, in, or
from property, whether or not owned by Holdings or any of its Subsidiaries, or
(b) any other violation, or alleged violation, of any Environmental Law.
"Environmental Law" has the meaning specified in the definition of
"Hazardous Material".
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" means each person (as defined in Section 3(9) of
ERISA) which together with Holdings or a Subsidiary of Holdings would be deemed
to be a "single employer" within the meaning of Section 414(b), (c), (m) or (o)
of the Code.
"Eurodollar Lending Office" has the meaning provided in the definition
of "Lending Office".
"Eurodollar Loan" means a Loan (other than a Swingline Loan) that
bears interest based at the Eurodollar Rate.
-11-
"Eurodollar Rate" means, for any Interest Period with respect to
Eurodollar Loans comprising part of the same Borrowing, the per annum rate of
interest (rounded upward to the next 1/100th of 1%) determined by the
Administrative Agent (whose determination shall be conclusive in the absence of
manifest error) as follows:
Eurodollar Rate = Eurodollar Base Rate
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any day for any Interest
Period the maximum reserve percentage (expressed as a decimal, rounded upward to
the next 1/100th of 1%) in effect on such day (whether or not applicable to any
Lender) under regulations issued from time to time by the Federal Reserve Board
for determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to Eurocurrency
funding (currently referred to as "Eurocurrency liabilities" as defined in
Regulation D). The Eurodollar Rate for any outstanding Eurodollar Loans shall be
adjusted automatically as of the effective date of any change in the Eurodollar
Reserve Percentage.
"Eurodollar Base Rate" means the interest rate per annum (rounded
upward to the next 1/16 of 1%) at which deposits in Dollars are offered by Bank
of America's (or any successor Administrative Agent) applicable Lending Office
to prime international banks in the offshore dollar market at or about 11:00
a.m. (New York City time), two Business Days before the first day of the
applicable Interest Period in an aggregate amount approximately equal to the
amount of the Loan made by Bank of America (or any successor Administrative
Agent) with respect to such Eurodollar Loan and for a period of time comparable
to the number of days in the applicable Interest Period.
The determination of the Eurodollar Reserve Percentage and the
Eurodollar Base Rate by the Administrative Agent shall be conclusive in the
absence of manifest error.
"Event of Default" means any of the events or circumstances specified
in Section 9.01.
"Excess Cash Flow" means, for any period, the remainder of (a) the sum
of, without duplication, (i) Consolidated Net Income for such period, (ii) the
amount of all non-cash charges (including, without limitation or duplication,
depreciation, amortization and non-cash interest expense but excluding any non-
cash charges deducted in determining Adjusted Consolidated Working Capital)
included in determining Consolidated Net Income for such period, and (iii) the
decrease, if any, in Adjusted Consolidated Working Capital from the first day to
the last day of such period, minus (b) the sum of, without duplication, (i) the
amount of (1) all Capital Expenditures (including those in connection with a
Permitted Capital Expansion) made by Holdings and its Subsidiaries during such
period (other than Capital Expenditures (including those in connection with a
Permitted Capital Expansion) to the extent financed with equity proceeds, Asset
Sale proceeds, insurance proceeds or Indebtedness) plus (or minus, if negative)
(2) the Rollover Amount for such period to be carried forward to the next period
less the
-12-
Rollover Amount (if any) for the preceding period carried forward to the current
period, (ii) the amount of all Permitted Acquisitions made by Holdings and its
Subsidiaries during such period (other than Permitted Acquisitions to the extent
financed with equity proceeds, Asset Sale proceeds, insurance proceeds or
Indebtedness), (iii) the aggregate amount of permanent principal payments of
Indebtedness of Holdings and its Subsidiaries during such period (other than
repayments of Loans, provided that repayments of Loans shall be deducted in
determining Excess Cash Flow if such repayments were (x) required as a result of
a Scheduled Repayment under Section 2.08(a) or (b) or (y) made as a voluntary
prepayment with internally generated funds (but in the case of a voluntary
prepayment of Revolving Loans or Swingline Loans only to the extent accompanied
by a voluntary reduction to the Aggregate Revolving Commitment)), (iv) the
increase, if any, in Adjusted Consolidated Working Capital from the first day to
the last day of such period, (v) any non-cash credits (including from sales of
assets and insurance recoveries) included in determining Consolidated Net Income
for such period, (vi) gains from sales of assets or insurance recoveries (other
than sales of inventory in the ordinary course of business) included in
determining Consolidated Net Income for such period, (vii) non-cash charges
added back in a previous period pursuant to clause (a)(ii) above to the extent
any such charge has become a cash item in the current period, and (viii) any
cash payments made during such period under Section 8.03(ii), 8.05(xviii),
8.11(iii) or 8.11(iv) in each case to the extent not deducted in determining
Consolidated Net Income for such period (except to the extent that such cash
payments were financed with equity proceeds or Indebtedness).
"Excess Cash Payment Date" means the date occurring 90 days after the
last day of each fiscal year of Holdings (beginning with its fiscal year ending
on December 31, 1999).
"Excess Cash Payment Period" means, with respect to the repayment
required on each Excess Cash Payment Date, the immediately preceding fiscal year
of Holdings.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the Borrower Senior Subordinated Note Exchange
Offer and the Holdings Senior Discount Note Exchange Offer.
"Existing Letter of Credit" has the meaning specified in the
definition of Issuing Lender.
"Federal Funds Rate" means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)". If on any relevant day the appropriate rate for such previous day
is not yet published in H.15(519), the rate for such day will be the arithmetic
mean of the rates for the last transaction in overnight Federal funds arranged
prior to 9:00 a.m. (New York City time) on that day by each of three leading
brokers of Federal funds transactions in New York City selected by the
Administrative Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any successor thereto.
-13-
"First Adjustment Date" has the meaning specified in the definition of
the term "Adjustment Date".
"Foreign Pension Plan" means any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America or any territory thereof by
Holdings or any one or more of its Subsidiaries primarily for the benefit of
employees of Holdings or such Subsidiaries residing outside the United States of
America, which plan, fund or other similar program provides, or results in,
retirement income, a deferral of income in contemplation of retirement or
payments to be made upon termination of employment, and which plan is not
subject to ERISA or the Code.
"Foreign Subsidiary" means each Subsidiary of Holdings which is not a
Domestic Subsidiary.
"Form 4224" has the meaning specified in Section 4.01(f).
"Form 1001" has the meaning specified in Section 4.01(f).
"Form W-8" has the meaning specified in Section 4.01(f).
"Fund Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with such Person. A Person shall be deemed to control another
Person for purposes of this definition if such Person possesses, directly or
indirectly, the power (i) to vote 50% or more of the securities having ordinary
voting power for the election of directors of such Person or (ii) to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), or in such other statements by such other entity as may be in
general use by significant segments of the U.S. accounting profession, which are
applicable to the circumstances as of the date of determination.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government
and including, in the case of any Lender that is an insurance company, the
National Association of Insurance Commissioners.
"Guaranteed Creditors" means and includes each of the Administrative
Agent, the Collateral Agent, the Issuing Lenders, the Lenders and, in the case
of any Interest Rate Protection Agreements or Other Hedging Agreements, also any
Affiliate of a Lender which has entered into
-14-
an Interest Rate Protection Agreement or Other Hedging Agreement (even if such
Lender subsequently ceases to be a Lender under this Agreement for any reason).
"Guaranteed Obligations" means (i) the full and prompt payment when
due (whether at the stated maturity, by acceleration or otherwise) of the
principal and interest on each note issued by, and Loans made to, the Borrower
under this Agreement and all reimbursement obligations and unpaid drawings with
respect to Letters of Credit, together with all the other obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities (including, without
limitation, indemnities, fees and interest thereon) of the Borrower to the
Lenders, the Administrative Agent, the Issuing Lenders and the Collateral Agent
now existing or hereafter incurred under, arising out of or in connection with
this Agreement or any other Loan Document and the due performance and compliance
by the Borrower with all the terms, conditions and agreements contained in the
Loan Documents and (ii) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) of the Borrower owing under any Interest Rate
Protection Agreement or Other Hedging Agreement entered into by the Borrower
with any Lender or any other Guaranteed Creditor so long as such Lender or
affiliate participates in such Interest Rate Protection Agreement or Other
Hedging Agreement, and their subsequent assigns, if any, whether now in
existence or hereafter arising, and the due performance and compliance with all
terms, conditions and agreements contained therein.
"Guarantor" means and includes Holdings and each Subsidiary Guarantor.
"Guarantor Supplement" means a supplement to the Subsidiary Guaranty,
the Pledge Agreement and the Security Agreement substantially in the form of
Exhibit E, whereby a Subsidiary of the Borrower becomes a party to each such
Loan Document.
"Guaranty" means and includes the guaranty of Holdings pursuant to
Article X and the Subsidiary Guaranty.
"Hazardous Material" means and includes (a) any asbestos, urea-
formaldehyde, PCBs or dioxins or other material composed of or containing
asbestos, PCBs or dioxins, (b) crude oil, any fraction thereof, and any
petroleum product, (c) any natural gas, natural gas liquids, liquefied natural
gas or other natural gas product or synthetic gas, and (d) any hazardous or
toxic waste, substance or material or pollutant or contaminant defined as such
in (or for purposes of) or that may result in the imposition of liability under
any "Environmental Law", defined as the Comprehensive Environmental Response,
Compensation and Liability Act, any so-called "Superfund", or any other
applicable Federal, state, local or other statute, law, ordinance, code, rule,
regulation, order or decree, as now or at any time hereafter in effect,
regulating, relating to, or imposing liability concerning the environment, the
impact of the environment on human health, or any hazardous or toxic waste,
substance or material or pollutant or contaminant.
"Holdings" has the meaning specified in the preamble hereto.
-15-
"Holdings Common Stock" has the meaning specified in Section 6.22.
"Holdings Junior Subordinated Notes" means the junior subordinated
promissory notes issued by Holdings pursuant to the Recapitalization Documents.
"Holdings Preferred Stock" has the meaning specified in Section 6.22.
"Holdings Senior Discount Note Documents" means the Holdings Senior
Discount Note Indenture, the Holdings Senior Discount Notes and all other
documents and agreements executed and delivered pursuant to the Holdings Senior
Discount Note Indenture.
"Holdings Senior Discount Note Exchange Offer" means the exchange
offer for Holdings Senior Discount Notes pursuant to the applicable Holdings
Senior Discount Note Documents for new Holdings Senior Discount Notes which have
been registered under the Securities Act.
"Holdings Senior Discount Note Indenture" means the Indenture to be
entered into between Holdings and a trustee pursuant to which the Holdings
Senior Discount Notes are to be issued, as amended, modified or supplemented
from time to time in accordance with the terms hereof and thereof.
"Holdings Senior Discount Notes" means Holdings' senior unsecured
discount notes due no earlier than 2009 (which term includes the senior discount
notes of Holdings issued as part of the Holdings Senior Discount Note Exchange
Offer), as amended, modified or supplemented from time to time in accordance
with the terms hereof and thereof (which notes shall not be guaranteed or
supported in any way by any Subsidiary of Holdings).
"Holdings Shareholder Subordinated Note" means an unsecured junior
subordinated note issued by Holdings (and not guaranteed or supported in any way
by any Subsidiary of Holdings) in the form of Exhibit J (appropriately
completed), as amended, modified or supplemented from time to time in accordance
with the terms of this Agreement.
"Holdings Tax Sharing Agreement" means the Tax Sharing Agreement,
dated as of July 31, 1998, between Holdings and the Borrower, as amended,
modified or supplemented from time to time to time in accordance with the terms
hereof and thereof.
"Indebtedness" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than (i)
trade payables entered into in the ordinary course of business pursuant to
ordinary terms and (ii) ordinary course purchase price adjustments); (c) all
reimbursement or payment obligations with respect to letters of credit or non-
contingent reimbursement or payment obligations with respect to bankers'
acceptances and similar documents; (d) all obligations evidenced by notes,
bonds, debentures or similar instruments, including obligations so evidenced
incurred in connection with the acquisition of property, assets or businesses;
(e) all indebtedness created or arising under any conditional sale or other
title retention agreement or sales of accounts receivable, in any such case with
respect to property acquired by
-16-
the Person (even though the rights and remedies of the seller or bank under such
agreement in the event of default are limited to repossession or sale of such
property); (f) all Capital Lease Obligations; (g) all net obligations with
respect to Interest Rate Protection Agreements and Other Hedging Agreements; (h)
all indebtedness referred to in clauses (a) through (g) above and clause (i)
below secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien upon or in property
(including accounts and contracts rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness,
valued, in the case of Indebtedness not assumed, at the lesser of the amount of
such obligation and the fair market value of the encumbered property or asset;
and (i) all Contingent Obligations. Notwithstanding the foregoing, Indebtedness
shall not include trade payables and accrued expenses incurred by any Person in
accordance with customary practices and in the ordinary course of business of
such Person.
"Indebtedness to be Refinanced" means the Indebtedness described in
Schedule 1.01(d).
"Indemnified Liabilities" has the meaning provided in Section 12.05.
"Indemnified Person" has the meaning provided in Section 12.05.
"Insolvency Proceeding" means (a) any case, action or proceeding
before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors or similar proceedings, or (b) any general assignment for
the benefit of creditors, composition, marshalling of assets for creditors, or
other, similar arrangement in respect of its creditors generally; in each case
undertaken under U.S. Federal, State or foreign law, including the Bankruptcy
Code.
"Intercompany Loan" has the meaning provided in Section 8.05(xi).
"Intercompany Note" means a promissory note in the form of Exhibit M.
"Interest Payment Date" means, (a) with respect to any Base Rate Loan,
the last day of the last calendar month of each calendar quarter and in
addition, in the case of Revolving Loans maintained as Base Rate Loans, the
Revolving Termination Date, and (b) with respect to any Eurodollar Loan, the
last day of each Interest Period applicable to such Eurodollar Loan and the date
such Eurodollar Loan is repaid or prepaid; provided, however, that if any
Interest Period for any Eurodollar Loan exceeds three months, then also the date
which falls three months after the beginning of such Interest Period and, if
applicable, at three month intervals thereafter shall also be an "Interest
Payment Date".
"Interest Period" means, in relation to any Eurodollar Loan, the
period commencing on the applicable Borrowing Date or any Conversion Date or
Continuation Date with respect thereto and ending on the date one, two, three or
six months thereafter, as selected or deemed selected by the Borrower in its
Notice of Borrowing or Notice of Conversion/Continuation (provided that the
Borrower shall have the right, with the consent of the Administrative Agent, to
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select an Interest Period for the Term Loans with a term of between seven days
and two months in order to ensure compliance with clause (iv) below); provided
--------
that:
(i) if any Interest Period would otherwise end on a day which is not
a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding Business Day;
(ii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on
the last Business Day of the calendar month which is one, two, three or six
months, as the case may be, after the calendar month in which such Interest
Period began;
(iii) no Interest Period for any Revolving Loan shall extend beyond
the Revolving Termination Date; and
(iv) no Interest Period in respect of any Tranche A Term Loans or
Tranche B Term Loans, as the case may be, shall be selected which extends
beyond any date upon which a mandatory repayment of such Tranche of Term
Loans will be required to be made under Section 2.08(a) or (b), as the case
may be, if the aggregate principal amount of Tranche A Term Loans or
Tranche B Term Loans, as the case may be, which have Interest Periods which
will expire after such date will be in excess of the aggregate principal
amount of Tranche A Term Loans or Tranche B Term Loans, as the case may be,
then outstanding less the aggregate amount of such required prepayment.
"Interest Rate Protection Agreement" means an interest rate swap, cap,
collar or similar arrangement entered into to hedge interest rate risk (and not
for speculative purposes).
"Investment" has the meaning provided in Section 8.05.
"Issuing Lender" means (i) Bank of America or any Affiliate thereof in
its capacity as issuer of Letters of Credit hereunder and (ii) Fleet National
Bank but solely in respect of the Standby Letter of Credit in the amount of
$1,000,000 issued for the benefit of the North River Insurance Company, and
expiring on January 1, 1999 (the "Existing Letter of Credit"). Upon termination
of the Existing Letter of Credit and the payment of all amounts (if any) owing
in respect thereof, Fleet National Bank shall cease to be an Issuing Lender
hereunder.
"Leaseholds" of any Person means all the right, title and interest of
such Person as lessee or licensee in, to and under leases or licenses of land ,
improvements and/or fixtures.
"Lender Affiliate" means an Affiliate of a Lender, including, in the
case of any Lender that is a fund that invests in loans, any other fund that
invests in loans and is managed or is advised by the same investment advisor of
such Lender or by a Fund Affiliate of such investment advisor.
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"Lender Default" shall mean (i) the refusal (which has not been
retracted) of a Lender to make available its portion of any Borrowing (including
a Mandatory Borrowing) or to fund its portion of any unreimbursed payment under
Section 3.03(c) or (ii) a Lender having notified the Administrative Agent and/or
the Borrower that it does not intend to comply with the obligations under
Section 2.01(a), 2.01(b), 2.01(c), 2.01(d)(iv) or 3.03(c), in the case of either
clause (i) or (ii) above as a result of the appointment of a receiver or
conservator with respect to such Lender at the direction or request of any
regulatory agency or authority.
"Lenders" has the meaning specified in the preamble hereto.
"Lending Office" means, with respect to any Lender, the office or
offices of such Lender specified as its "Lending Office", "Domestic Lending
Office" or "Eurodollar Lending Office", as the case may be, on Schedule 1.01(a),
or such other office or offices of such Lender as it may from time to time
notify the Borrower and the Administrative Agent.
"Letter of Credit" means any letter of credit issued by any Issuing
Lender pursuant to Article III.
"Letter of Credit Amendment Application" means an application form for
an amendment to any outstanding standby or commercial documentary letter of
credit as shall at any time be in use by the respective Issuing Lender, as such
Issuing Lender shall request.
"Letter of Credit Application" means an application form for an
issuance of any standby or commercial documentary letter of credit as shall at
any time be in use at the Issuing Lender, as such Issuing Lender shall request.
"Letter of Credit Borrowing" means an extension of credit resulting
from a drawing under any Letter of Credit which shall not have been reimbursed
on or before the Business Day following the respective Disbursement Date when
made nor converted into a Borrowing of Revolving Loans under Section 3.03(b).
"Letter of Credit Commitment" means the commitment of the Issuing
Lenders to issue Letters of Credit, the Letter of Credit Obligations in respect
thereof not to exceed in aggregate amount on any date the lesser of (i) the
Aggregate Revolving Commitment on such date and (ii) $5,000,000.
"Letter of Credit Obligations" means at any time the sum of (a) the
aggregate undrawn amount of all Letters of Credit then outstanding plus (b) the
amount of all outstanding Letter of Credit Borrowings.
"Letter of Credit Related Documents" means the Letters of Credit, the
Letter of Credit Applications, the Letter of Credit Amendment Applications and
any other document relating to any Letter of Credit, including any of each
Issuing Lender's standard form documents for letter of credit issuances.
"Level I" has the meaning specified in Section 2.09(a)(ii).
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"Level II" has the meaning specified in Section 2.09(a)(ii).
"Level III" has the meaning specified in Section 2.09(a)(ii).
"Level IV" has the meaning specified in Section 2.09(a)(ii).
"Level V" has the meaning specified in Section 2.09(a)(ii).
"Leverage Ratio Certificate" means a certificate duly executed by a
Responsible Officer of Holdings, substantially in the form of Exhibit G (with
such changes thereto as may be agreed upon from time to time by the
Administrative Agent and Holdings), and including therein, among other things,
calculations supporting the information contained therein.
"Lien" means any interest in any real or personal property or fixture
which secures payment or performance of any obligation and shall include any
mortgage, lien, pledge, encumbrance, charge or other security interest of any
kind, whether arising under a Security Instrument or as a matter of law,
judicial process or otherwise, including the retained security title of a
conditional vendor or lessor.
"Loan" means an extension of credit by a Lender to the Borrower
pursuant to Article II and shall include Tranche A Term Loans, Tranche B Term
Loans, Revolving Loans and Swingline Loans.
"Loan Documents" means this Agreement, each Collateral Document and
all other agreements, instruments, certificates or other documents evidencing,
guaranteeing or securing the Loans, Letter of Credit Borrowings or the other
obligations of the Borrower or any Guarantor hereunder or under any Collateral
Document.
"Majority Lenders" of any Tranche means at any time those Lenders
which would constitute the Required Lenders under, and as defined in, this
Agreement if all outstanding Obligations of the other Tranches under this
Agreement were repaid in full and all Commitments with respect thereto were
terminated.
"Mandatory Borrowing" has the meaning specified in Section
2.01(d)(iv).
"Margin Stock" means "margin stock" as such term is defined in
Regulation T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means, relative to any occurrence of
whatever nature (including any adverse determination in any litigation,
arbitration or governmental investigation or proceeding), a material adverse
effect on:
(a) the operations, business, assets, properties, liabilities,
condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole (although the term "prospects" shall not
apply to any representation or warranty made in connection with the
incurrence of Loans on the Closing Date); or
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(b) the rights and remedies of the Administrative Agent, the
Collateral Agent, the Issuing Lender and the Lenders under this Agreement
or under any other Loan Document.
"Measurement Period" means any period of four consecutive fiscal
quarters of Holdings (taken as one accounting period), provided, however, for
purposes of determining compliance with Section 8.08 for any Measurement Period
ending on or prior to June 30, 1999, each such Measurement Period means the
period from the Closing Date to the last day of the fiscal quarter of Holdings
then last ended (in each case taken as one accounting period).
"Merrill Lynch" means Merrill Lynch, Pierce, Fenner & Smith, Inc.
"Moody's" means Moody's Investors Service, Inc.
"Mortgage" means a mortgage, deed of trust, leasehold mortgage,
leasehold deed of trust or similar Security Instrument.
"Mortgage Policies" has the meaning specified in Section 5.01(g).
"Mortgaged Property" means each parcel of Real Property owned or
leased by any Credit Party which is encumbered by a Mortgage.
"Net Debt Proceeds" means, with respect to any incurrence of
Indebtedness for borrowed money, the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated therewith
(including attorneys' fees, accountants' fees and investment banking fees))
received by the respective Person from the respective incurrence of such
Indebtedness for borrowed money.
"Net Equity Proceeds" means, with respect to each issuance or sale of
any equity by any Person or any capital contribution to such Person, the cash
proceeds (net of underwriting discounts and commissions and other reasonable
costs associated therewith (including attorneys' fees, accountants' fees and
investment banking fees)) received by such Person from the respective sale or
issuance of its equity or from the respective capital contribution.
"Net Insurance Proceeds" means, with respect to any Recovery Event,
the cash proceeds (net of reasonable costs and taxes incurred in connection with
such Recovery Event) received by the respective Person in connection with the
respective Recovery Event.
"Net Sale Proceeds" means, in connection with any Asset Sale, the cash
proceeds (including any cash payments received by way of deferred payment
pursuant to a promissory note, receivable or otherwise, but only as and when
received in cash) of such Asset Sale net of (i) reasonable transaction costs
(including any underwriting, brokerage or other customary selling commissions
and reasonable legal, advisory and other fees and expenses, including title and
recording expenses, associated therewith actually incurred), (ii) required debt
payments (other than pursuant hereto), (iii) taxes estimated to be paid as a
result of such Asset Sale and (iv) any portion of such cash proceeds which
Holdings determines in good faith should be reserved for
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post-closing adjustments or liabilities (to the extent Holdings delivers to the
Administrative Agent a certificate signed by a Responsible Officer of Holdings
as to such determination).
"Non-Defaulting Lender" shall mean each Lender other than a Defaulting
Lender.
"Notice of Borrowing" means a notice given by the Borrower to the
Administrative Agent pursuant to Section 2.03(a), in substantially the form of
Exhibit A.
"Notice of Conversion/Continuation" means a notice given by the
Borrower to the Administrative Agent pursuant to Section 2.04(b), in
substantially the form of Exhibit B.
"Obligations" means all Loans, Letter of Credit Borrowings and other
indebtedness, advances, debts, liabilities, obligations, indemnities, fees,
expenses (including, without limitation, Attorney Costs), covenants and duties,
of any kind or nature, owing by the Borrower or any Guarantor to any Lender, the
Administrative Agent, the Collateral Agent, the Swingline Lender or any Issuing
Lender in connection with this Agreement or any other Loan Document, in each
case whether direct or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising, and however acquired (including those
acquired by assignment) or arising and whether or not for the payment of money
or evidenced by any note, guarantee or other instrument.
"OECD" means the Organization for Economic Cooperation and
Development.
"Originating Lender" has the meaning provided in Section 12.07(d).
"Other Hedging Agreement" means any foreign exchange contracts,
currency swap agreements, commodity agreements or other similar agreements or
arrangements designed to protect against the fluctuations in currency or
commodity values.
"Other Taxes" has the meaning specified in Section 4.01(b).
"Participant" has the meaning specified in Section 12.07(d).
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Acquisition" has the meaning specified in Section 8.02(x).
"Permitted Capital Expansion" means (i) in addition to the current
expansion of the Borrower's Tuscaloosa, Alabama facility, any other expansion of
a manufacturing facility owned or leased by the Borrower or any of its
Subsidiaries on the Closing Date (including any additional expansion of the
Tuscaloosa, Alabama facility) and (ii) the construction of any new manufacturing
facility by the Borrower or any of its Subsidiaries.
"Permitted Encumbrance" means, with respect to any Mortgaged Property,
such exceptions to title as are set forth in the Mortgage Policy delivered with
respect thereto, all of
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which exceptions must be reasonably acceptable, on the date of delivery of such
Mortgage Policy, to the Administrative Agent.
"Permitted Holders" means Code, Hennessy & Simmons, Inc., Code
Hennessy & Simmons LLC, CHS and their respective Affiliates.
"Permitted Liens" has the meaning provided in Section 8.01.
"Permitted Retained Equity Transactions" means, collectively,
Permitted Acquisitions, Capital Expenditures (including Permitted Capital
Expansions), Investments made pursuant to Section 8.05 (xviii), Dividends made
pursuant to Section 8.03(iv) and payments made pursuant to Section 8.11 (v).
"Person" means any natural person, corporation, firm, trust,
partnership, limited liability company, business trust, association, government,
governmental agency or authority, or any other entity, whether acting in an
individual, fiduciary or other capacity.
"Plan" means any pension plan as defined in Section 3(2) of ERISA,
which is maintained or contributed to by (or to which there is an obligation to
contribute of) Holdings or a Subsidiary of Holdings or an ERISA Affiliate, and
each such plan for the five year period immediately following the latest date on
which Holdings or a Subsidiary of Holdings or an ERISA Affiliate maintained,
contributed to or had an obligation to contribute to such plan.
"Pledge Agreement" means the Pledge Agreement in the form of Exhibit
C, as amended, modified or supplemented from time to time in accordance with the
terms thereof and hereof.
"Pledged Securities" has the meaning specified in the Pledge
Agreement.
"Pro Forma Balance Sheet" means the pro forma consolidated balance
sheet of Holdings and its Subsidiaries as of June 30, 1998 after giving effect
to the transactions contemplated hereunder, which pro forma consolidated balance
sheet has been prepared, in all material respects, in accordance with GAAP.
"Projections" means the projections prepared by, or on behalf of,
Holdings, dated July 1, 1998 and furnished to the Lenders prior to the Closing
Date.
"Qualified Public Equity Offering" means a bona fide underwritten sale
to the public of common stock of Holdings pursuant to a registration statement
(other than on Form S-8 or any other form relating to securities issuable under
any benefit plan of Holdings or any of its Subsidiaries, as the case may be)
that is declared effective by the Securities and Exchange Commission and such
offering results in gross cash proceeds to Holdings (exclusive of underwriter's
discounts and commissions and other expenses) of at least $50,000,000.
"Real Property" of any Person means all the right, title and interest
of such Person in and to land, improvements and fixtures, including Leaseholds.
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"Recapitalization" means the recapitalization of Holdings pursuant to
the Recapitalization Documents.
"Recapitalization Agreement" means the Agreement and Plan of Merger,
dated as of June 23, 1998, by and between Holdings and Globe Acquisition
Company, as amended, modified and supplemented from time to time.
"Recapitalization Documents" means the Recapitalization Agreement and
all other documents and agreements entered into pursuant to the Recapitalization
Agreement.
"Recovery Event" means the receipt by Holdings or any of its
Subsidiaries of any cash insurance proceeds or condemnation awards payable by
reason of theft, loss, physical destruction, damage, taking or any other similar
event with respect to any property or assets of Holdings or any of its
Subsidiaries.
"Reference Rate" means the rate of interest publicly announced from
time to time by Bank of America in San Francisco (or any successor
Administrative Agent) as its "reference rate". It is a rate set by Bank of
America based upon various factors, including Bank of America's costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above or below
such announced rate. Any change in the Reference Rate announced by Bank of
America shall take effect at the opening of business on the day specified in the
public announcement of such change.
"Refinancing" means, collectively, the repayment of all Indebtedness
to be Refinanced, together with all accrued interest, premiums, fees,
commissions and expenses owing in connection therewith, and the termination of
all commitments thereunder.
"Register" has the meaning specified in Section 2.02(a).
"Regulation D" means Regulation D of the Federal Reserve Board or from
time to time in effect and any successor to all or a portion thereof
establishing reserve requirements.
"Replaced Lender" has the meaning specified in Section 4.08(b).
"Replacement Lender" has the meaning specified in Section 4.08(b).
"Reportable Event" means an event described in Section 4043(c) of
ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
.22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
"Required Lenders" means Lenders, the sum of whose outstanding Term
Loans and Revolving Commitments (or after the termination thereof, outstanding
Revolving Loans and Revolving Commitment Percentages of Swingline Loans and
Letter of Credit Obligations) represent at least 50.1% of the sum of all
outstanding Term Loans and the Aggregate Revolving Commitment (or after the
termination thereof, the sum of the then total outstanding Revolving
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Loans and the aggregate Revolving Commitment Percentages of the total
outstanding Swingline Loans and Letter of Credit Obligations at such time).
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of a court or of a
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"Responsible Officer" means, for Holdings, the Borrower or any
Subsidiary thereof, its chief executive officer, its president, any of its
executive vice presidents, its chief operating office, its chief financial
officer or its treasurer or any other officer having substantially the same
authority and responsibility as any of the foregoing officers.
"Retained Equity Amount" means, at any time, an amount equal to the
remainder of (A) the sum of (I) 50% of all Net Equity Proceeds theretofore
received by Holdings after the Closing Date (other than Net Equity Proceeds
referred to in the parenthetical of Section 2.07(e)) plus (II) the amount of all
other Net Equity Proceeds received by Holdings after the Closing Date as
described in clauses (ii), (iii) and (iv) of the parenthetical in Section
2.07(e), in each case to the extent that such Net Equity Proceeds are not used
to voluntarily prepay outstanding Term Loans, less (B) the amount of all
Permitted Retained Equity Transactions previously made which utilized the
Retained Equity Amount.
"Revolving Borrowing" means a Borrowing hereunder consisting of
Revolving Loans made to the Borrower on the same Borrowing Date by the Lenders
ratably according to their respective Revolving Commitment Percentages and in
the case of Eurodollar Loans, having the same Interest Periods, provided that
any Base Rate Loans incurred pursuant to Section 4.02 shall be considered as
part of the related Revolving Borrowing of Eurodollar Loans.
"Revolving Commitment" means, for each Lender, the amount set forth
opposite such Lender's name in Schedule 1.01(b) directly below the column
entitled "Revolving Commitment," as such amount may be modified from time to
time pursuant to the terms hereof.
"Revolving Commitment Percentage" of any Lender at any time means a
fraction (expressed as a percentage) the numerator of which is the Revolving
Commitment of such Lender at such time and the denominator of which is the
Aggregate Revolving Commitment at such time, provided that if the Revolving
Commitment Percentage of any Lender is to be determined after the Aggregate
Revolving Commitment has been terminated, then the Revolving Commitment
Percentages of the Lenders shall be determined immediately prior (and without
giving effect) to such termination.
"Revolving Loan" means a Loan by a Lender to the Borrower under
Section 2.01(c), which may be a Eurodollar Loan or a Base Rate Loan.
"Revolving Termination Date" means the earliest to occur of (a)
January 15, 2005, (b) the date on which all outstanding Tranche A Term Loans are
repaid or prepaid in full or
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(c) the date on which the Revolving Commitments shall otherwise terminate in
accordance with the provisions hereof.
"RL Lender" means, at any time, each Lender with a Revolving
Commitment or with outstanding Revolving Loans.
"Rollover Amount" has the meaning specified in Section 8.07(b).
"S&P" means Standard & Poor's Ratings Service, a division of McGraw
Hill, Inc.
"Scheduled Repayment" means any Scheduled A Repayment or any Scheduled
B Repayment.
"Scheduled A Repayment" has the meaning specified in Section 2.08(a).
"Scheduled B Repayment" has the meaning specified in Section 2.08(b).
"Section 4.01(f) Certificate" has the meaning specified in Section
4,01(f)(i)(B)(x).
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Security Agreement" means the Security Agreement in the form of
Exhibit F, as amended, modified or supplemented from time to time in accordance
with the terms thereof and hereof.
"Security Instrument" means any security agreement, chattel mortgage,
assignment, pledge agreement, financing or similar statement or notice,
continuation statement, other agreement or instrument, or amendment or
supplement to any thereof, providing for, evidencing or perfecting any security
interest.
"Significant Subsidiary" means any Subsidiary of the Borrower that
would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of
Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation
is in effect on the Closing Date.
"Specified Default" means (i) any Default under Section 9.01(a),
9.01(f) or 9.01(g) or (ii) any Event of Default under Section 9.01(a), 9.01(b),
9.01(c) (but only as a result of a breach of Section 8.07, 8.08, 8.09 or 8.10),
9.01(e), 9.01(f). 9.01(g), 9.01(i), 9.01(j) or 9.01(k).
"Standby Letter of Credit" has the meaning specified in Section
3.01(a).
"Subsidiary" of a Person means any corporation, association, limited
liability company, partnership or other business entity of which more than 50%
of the voting stock or other voting equity interests (in the case of Persons
other than corporations) is owned or controlled directly or indirectly by such
Person, or one or more of the Subsidiaries of the Person, or a combination
thereof.
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"Subsidiary Guarantor" means each of the Domestic Subsidiaries of the
Borrower listed on Schedule 1.01(c) and each other Domestic Subsidiary of the
Borrower (and, to the extent Section 7.12 is operative, each Foreign Subsidiary
of the Borrower) that hereafter executes and delivers the Subsidiary Guaranty or
a Guarantor Supplement.
"Subsidiary Guaranty" means the Guaranty in the form of Exhibit D, as
amended, modified or supplemented from time to time in accordance with the terms
hereof and thereof.
"Swingline Amount" means an aggregate amount of $5,000,000.
"Swingline Borrowing" means a Borrowing of a Swingline Loan hereunder
on any Borrowing Date.
"Swingline Lender" means Bank of America.
"Swingline Loan" means a Loan by the Swingline Lender to the Borrower
pursuant to Section 2.01(d).
"Syndication Agent" means Merrill Lynch.
"Taxes" has the meaning specified in Section 4.01(a).
"Term Borrowing" means the Tranche A Term Loan Borrowing and the
Tranche B Term Loan Borrowing.
"Term Loan" means each Tranche A Term Loan and each Tranche B Term
Loan.
"Trade Letter of Credit" has the meaning specified in Section 3.01(a).
"Tranche" means the respective facility and commitments utilized in
making Loans hereunder, with there being four separate Tranches, i.e., Tranche A
Term Loans, Tranche B Term Loans, Revolving Loans and Swingline Loans.
"Tranche A Term Loan" means a Loan made by a Lender to the Borrower
under Section 2.01(a), which may be a Base Rate Loan or a Eurodollar Loan.
"Tranche A Term Loan Borrowing" means the Borrowing hereunder
consisting of Tranche A Term Loans made to the Borrower on the Closing Date by
the Lenders ratably according to their respective Tranche A Term Loan Commitment
Percentages and in the case of Eurodollar Loans, having the same Interest
Periods, provided that any Base Rate Loans incurred pursuant to Section 4.02
shall be considered as part of the related Tranche A Term Loan Borrowing of
Eurodollar Loans.
"Tranche A Term Loan Commitment" means, for each Lender, the amount
set forth opposite such Lender's name in Schedule 1.01(b) directly below the
column entitled "Tranche A Term Loan Commitment", as such amount may be modified
from time to time pursuant to the terms hereof.
-27-
"Tranche A Term Loan Commitment Percentage" of any Lender at any time
means (i) prior to the incurrence of Tranche A Term Loans on the Closing Date, a
fraction (expressed as a percentage) the numerator of which is the Tranche A
Term Loan Commitment of such Lender at such time and the denominator of which is
the Aggregate Tranche A Term Loan Commitment at such time and (ii) at any time
thereafter, a fraction (expressed as a percentage) the numerator of which is the
outstanding Tranche A Term Loans of such Lender at such time and the denominator
of which is the aggregate outstanding Tranche A Term Loans of all Lenders at
such time.
"Tranche B Term Loan" means a Loan made by a Lender to the Borrower
under Section 2.01(b), which Loan may be a Eurodollar Loan or a Base Rate Loan.
"Tranche B Term Loan Borrowing" means the Borrowing hereunder
consisting of Tranche B Term Loans made to the Borrower on the Closing Date by
the Lenders ratably according to their respective Tranche B Term Loan Commitment
Percentages and in the case of Eurodollar Loans, having the same Interest
Periods, provided that any Base Rate Loans incurred pursuant to Section 4.02
shall be considered as part of the related Tranche B Term Loan Borrowing of
Eurodollar Loans.
"Tranche B Term Loan Commitment" means, for each Lender, the amount
set forth opposite such Lender's name in Schedule 1.01(b) directly below the
column entitled "Tranche B Term Loan Commitment", as such amount may be modified
from time to time pursuant to the terms hereof.
"Tranche B Term Loan Commitment Percentage" of any Lender at any time
means (i) prior to the incurrence of Tranche B Term Loans on the Closing Date, a
fraction (expressed as a percentage) the numerator of which is the Tranche B
Term Loan Commitment of such Lender at such time and the denominator of which is
the Aggregate Tranche B Term Loan Commitment at such time and (ii) at any time
thereafter, a fraction (expressed as a percentage) the numerator of which is the
outstanding Tranche B Term Loans of such Lender at such time and the denominator
of which is the aggregate outstanding Tranche B Term Loans of all Lenders at
such time.
"Transaction" means, collectively, (i) the Recapitalization, (ii) the
Refinancing, (iii) the issuance of the Borrower Senior Subordinated Notes, (iv)
the issuance by Holdings of the Holdings Junior Subordinated Notes, (v) the
equity issuances referred to in Section 5.01(l)(ii), (vi) the Asset Contribution
and (vii) the entering into of this Agreement and the occurrence of the Closing
Date.
"Transaction Documents" means this Agreement, the other Loan
Documents, the Borrower Senior Subordinated Note Documents, the Holdings Junior
Subordinated Notes, the Recapitalization Documents, the Asset Contribution
Documents and the documents that evidence the equity issuances referred to in
Section 5.01(l)(ii).
"Transferee" has the meaning specified in Section 12.08.
-28-
"UCC" means the Uniform Commercial Code as from time to time in effect
in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan means the amount, if any, by
which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year exceeds the fair market value
of the assets allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No. 87, based upon the actuarial assumptions used
by the Plan's actuary in the most recent annual valuation of the Plan.
"United States" and "U.S." each means the United States of America.
"Voting Stock" of any Person as of any date means the capital stock of
such Person that is of that time entitled to vote in the election of the Board
of Directors of such Person.
"Waivable Mandatory Repayment" has the meaning specified in Section
2.07(j).
"Wholly-Owned Domestic Subsidiary" means each Domestic Subsidiary of
Holdings that is also a Wholly-Owned Subsidiary of Holdings.
"Wholly-Owned Foreign Subsidiary" means each Foreign Subsidiary of
Holdings that is also a Wholly-Owned Subsidiary of Holdings.
"Wholly-Owned Subsidiary" means, as to any Person, (i) any corporation
100% of whose capital stock (other than director's or other qualifying shares)
is at the time owned by such Person and/or one or more Wholly-Owned Subsidiaries
of such Person and (ii) any partnership, association or other entity in which
such Person and/or one or more Wholly-Owned Subsidiaries of such Person has a
100% equity interest at such time.
1.02 Other Definitional Provisions.
(a) Defined Terms. Unless otherwise specified herein or therein, all
terms defined in this Agreement shall have such defined meanings when used in
any certificate or other document made or delivered pursuant hereto. The
meaning of defined terms shall be equally applicable to the singular and plural
forms of the defined terms. Terms (including uncapitalized terms) not otherwise
defined herein and that are defined in the UCC shall have the meanings therein
described.
(b) The Agreement. The words "hereof", "herein", "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement; and
section, subsection, schedule and exhibit references are to this Agreement
unless otherwise specified.
(c) Certain Common Terms. (i) The term "documents" includes any and
all instruments, documents, agreements, certificates, indentures, notices and
other writings, however evidenced.
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(ii) The terms "including" or "include" are not limiting and mean
"including without limitation" or "include without limitation".
(d) Performance; Time. Subject to the definition of the term
"Interest Period" in Section 1.01, whenever any performance obligation hereunder
shall be stated to be due or required to be satisfied on a day other than a
Business Day, such performance shall be made or satisfied on the next succeeding
Business Day. In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including"; the words "to"
and "until" each mean "to but excluding"; and the word "through" means "to and
including". If any provision of this Agreement refers to any action taken or to
be taken by any Person, or which such Person is prohibited from taking, such
provision shall be interpreted to encompass any and all means, direct or
indirect, of taking, or not taking, such action.
(e) Contracts. Unless otherwise expressly provided herein, references
to agreements and other contractual instruments shall be deemed to include all
subsequent amendments and other modifications thereto, but only to the extent
such amendments and other modifications are not prohibited by the terms of any
Loan Document.
(f) Laws. References to any statute or regulation are to be construed
as including all statutory and regulatory provisions consolidating, amending or
replacing such statute or regulation.
1.03 Accounting Principles. Except as provided to the contrary
herein, all accounting terms used herein shall be interpreted in accordance with
GAAP. Unless the context otherwise clearly requires, all financial computations
required under this Agreement shall be made in accordance with generally
accepted accounting principles applied in a manner consistent with those in
effect on December 31, 1997.
ARTICLE II.
THE CREDIT FACILITIES
---------------------
2.01 Amounts and Terms of Commitments.
(a) The Tranche A Term Loans. Each Lender with a Tranche A Term Loan
Commitment severally agrees, on the terms and conditions hereinafter set forth,
to make a Tranche A Term Loan to the Borrower on the Closing Date, which Tranche
A Term Loans (i) shall be made and initially maintained as a single Borrowing of
Base Rate Loans and (ii) shall be made by each such Lender in that initial
aggregate principal amount as is equal to the Tranche A Term Loan Commitment of
such Lender on such date. Once repaid or prepaid, Tranche A Term Loans incurred
hereunder may not be reborrowed.
(b) The Tranche B Term Loans. Each Lender with a Tranche B Term Loan
Commitment severally agrees, on the terms and conditions hereinafter set forth,
to make a
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Tranche B Term Loan to the Borrower on the Closing Date, which Tranche B Term
Loans (i) shall be made and initially maintained as a single Borrowing of Base
Rate Loans and (ii) shall be made by each such Lender in that initial aggregate
principal amount as is equal to the Tranche B Term Loan Commitment of such
Lender on such date. Once repaid or prepaid, Tranche B Term Loans incurred
hereunder may not be reborrowed.
(c) The Revolving Loans. Each Lender with a Revolving Commitment
severally agrees, on the terms and conditions hereinafter set forth, to make
Revolving Loans to the Borrower from time to time on any Business Day during the
period from the Closing Date to the Revolving Termination Date, in an aggregate
amount not to exceed at any time outstanding the amount of such Lender's
Revolving Commitment; provided, however, that (i) no more than $8,500,000 of
Revolving Loans may be incurred on the Closing Date and all such Revolving Loans
shall be made and initially maintained as a single Borrowing of Base Rate Loans
and (ii) after giving effect to any Revolving Borrowing, the aggregate principal
amount of all outstanding Revolving Loans, together with the aggregate principal
amount of all outstanding Swingline Loans (exclusive of Swingline Loans which
are repaid with the proceeds of, and simultaneously with the incurrence of, the
respective incurrence of Revolving Loans) plus the aggregate amount of all
outstanding Letter of Credit Obligations (exclusive of unpaid drawings under any
Letter of Credit which are repaid with the proceeds of, and simultaneously with
the incurrence of, the respective incurrence of Revolving Loans), shall not
exceed the Aggregate Revolving Commitment. Within such limits, and subject to
the other terms and conditions hereof, the Borrower may borrow Revolving Loans
under this Section 2.01(c), prepay pursuant to Section 2.06 or 2.07(a) and
reborrow pursuant to this Section 2.01(c).
(d) The Swingline Loans.
(i) The Swingline Lender agrees, on the terms and conditions
hereinafter set forth, to make Swingline Loans to the Borrower on any
Business Day during the period from the Closing Date to the Revolving
Termination Date, in an aggregate amount not to exceed at any time
outstanding the Swingline Amount; provided, however, (x) each Swingline
Loan shall be made and maintained as a Base Rate Loan and (y) that after
giving effect to any Swingline Borrowing, the aggregate principal amount of
all outstanding Swingline Loans, together with the aggregate principal
amount of all outstanding Revolving Loans plus the aggregate amount of all
outstanding Letter of Credit Obligations (exclusive of unpaid drawings
under any Letter of Credit which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of
Revolving Loans), shall not exceed the Aggregate Revolving Commitment.
Within such limits, and subject to the other terms and conditions hereof,
the Borrower may borrow Swingline Loans under this Section 2.01(d), prepay
pursuant to Section 2.06 or 2.07(a) and reborrow pursuant to this Section
2.01(d). Notwithstanding the foregoing, the Swingline Lender shall not be
obligated to make any Swingline Loans at a time when a Lender Default
exists unless the Swingline Lender has entered into arrangements
satisfactory to it and the Borrower to eliminate the Swingline Lender's
risk with respect to the Defaulting Lender's or Lenders' participation in
such Swingline Loans, including
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by Cash Collateralizing such Defaulting Lender's or Lenders' Revolving
Commitment Percentage of the outstanding Swingline Loans.
(ii) The Swingline Lender shall not be responsible for or liable to
any Lender for determining whether (A) any representation or warranty of
the Borrower in connection with any request for a Swingline Loan is correct
or (B) any Default or Event of Default exists or would result from the
making of any such Swingline Loan; provided, however, that the Swingline
Lender shall not make any Swingline Loan after receiving a written notice
from the Borrower or the Required Lenders stating that a Default or an
Event of Default exists and is continuing until such time as the Swingline
Lender shall have received written notice from the Administrative Agent
that such Default or Event of Default has been cured or waived.
(iii) Each Swingline Loan shall reduce the available Aggregate
Revolving Commitment. For purposes of Section 2.10(a), each Swingline Loan
shall be deemed to utilize only the Revolving Commitment of the Swingline
Lender but not any other Lender (it being understood that the aggregate
principal amount of Swingline Loans at any time outstanding may exceed the
otherwise unutilized portion of the Revolving Commitment of the Swingline
Lender).
(iv) On any Business Day, the Swingline Lender may, in its sole
discretion, give notice to the RL Lenders that its outstanding Swingline
Loans shall be funded with a Revolving Borrowing (provided that each such
notice shall be deemed to have been automatically given upon the occurrence
of a Default or an Event of Default under Section 9.01(f) or 9.01(g) or
upon the exercise of any of the remedies provided in Section 9.02), in
which case a Revolving Borrowing constituting Base Rate Loans (each such
Revolving Borrowing, a "Mandatory Borrowing") shall be made no later than
11:00 a.m. (New York City time) on the immediately succeeding Business Day
by all RL Lenders pro rata based on each RL Lender's Revolving Commitment
Percentage, and the proceeds thereof shall be applied directly to repay the
Swingline Lender for such outstanding Swingline Loans. Each RL Lender
hereby irrevocably agrees to make Base Rate Loans upon one Business Day's
notice pursuant to each Mandatory Borrowing in the amount and in the manner
specified in the preceding sentence and on the date specified in writing by
the Swingline Lender notwithstanding (i) that the amount of the Mandatory
Borrowing may not comply with the minimum borrowing denominations set forth
in Section 2.03(a), (ii) whether any of the conditions precedent set forth
in Section 5.02 is then satisfied and (iii) whether the borrowing
limitations set forth in this Agreement are met or the amount of the
Aggregate Revolving Commitment then in effect (including the fact that the
Aggregate Revolving Commitment may have been terminated). In the event
that any Mandatory Borrowing cannot for any reason be made on the date
otherwise required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code in respect of the
Borrower), each RL Lender hereby agrees that it shall forthwith purchase
from the Swingline Lender (without recourse or warranty) such assignment of
the outstanding Swingline Loans as shall be necessary to cause the RL
Lenders to share in such Swingline Loans ratably
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based upon their respective Revolving Commitment Percentages, provided that
all interest payable on the Swingline Loans shall be for the account of the
Swingline Lender until the date the respective assignment is purchased and,
to the extent attributable to the purchased assignment, shall be payable to
the RL Lender purchasing same from and after such date of purchase. The
failure of any RL Lender to pay such amount to the Swingline Lender shall
not relieve any other RL Lender of its obligation to make the payment to be
made by it.
2.02 Loan Accounts and Register; Notes. (a) The Loans made by, and
the Commitments of, each Lender shall be evidenced by one or more loan accounts
maintained by such Lender and the Register maintained by the Administrative
Agent in the ordinary course of business. The Register maintained by the
Administrative Agent shall, in the event of a discrepancy between the entries in
the Administrative Agent's books and any Lender's books relating to such
matters, be controlling and, absent manifest error, shall be conclusive as to
the amount of the Loans made by the Lenders to the Borrower, the interest and
payments thereon and any other amounts owing in respect of this Agreement. Any
failure to make a notation in the Register or any such loan account or any error
in doing so shall not limit or otherwise affect the obligations of the Borrower
hereunder to pay any amount owing with respect to the Loans. The Borrower
hereby designates the Administrative Agent to serve as the Borrower's agent,
solely for purposes of this Section 2.02, to maintain a register (the
"Register") on which it will record the Commitments from time to time of each of
the Lenders, the Loans made by each of the Lenders and each repayment in respect
of the principal amount of the Loans of each Lender. With respect to any
Lender, the transfer of the Commitments of such Lender and the rights to the
principal of, and interest on, any Loan made pursuant to such Commitments shall
not be effective until such transfer is recorded on the Register maintained by
the Administrative Agent with respect to ownership of such Commitments and Loans
and prior to such recordation all amounts owing to the transferor with respect
to such Commitments and Loans shall remain owing to the transferor. The
registration of assignment or transfer of all or part of any Commitments and
Loans shall be recorded by the Administrative Agent on the Register only upon
the acceptance by the Administrative Agent of a properly executed and delivered
Assignment and Acceptance pursuant to Section 12.07(a). The Borrower agrees to
indemnify the Administrative Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by the Administrative Agent in performing its duties under
this Section 2.02 (other than any losses, claims, damages and liabilities to the
extent incurred by reason of the gross negligence or willful misconduct of the
Administrative Agent as finally determined by a court of competent
jurisdiction).
(b) If requested by any Lender for purposes of Section 12.07(e), the
Borrower shall execute and deliver to such Lender (and deliver a copy thereof to
the Administrative Agent) one or more promissory notes evidencing the Loans
owing to such Lender pursuant to this Agreement. Any such note shall be in a
form prescribed by the Borrower and the Administrative Agent and shall be
entitled to all of the rights and benefits of this Agreement and the other Loan
Documents.
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2.03 Procedure for Borrowing. (a) Each Borrowing of Tranche A Term
Loans, Tranche B Term Loans and Revolving Loans (other than a Borrowing of
Revolving Loans pursuant to Section 2.01(d)(iv) or Section 3.03(b)) shall be
made upon the Borrower's irrevocable written notice delivered to the
Administrative Agent in accordance with Section 12.02 in the form of a Notice of
Borrowing (which notice must be received by the Administrative Agent (i) prior
to 11:00 a.m. (New York City time) not less than three Business Days prior to
the requested Borrowing Date, in the case of Eurodollar Loans and (ii) prior to
11:00 a.m. (New York City time) on the requested Borrowing Date, in the case of
Base Rate Loans, specifying:
(A) whether the Borrowing is to be comprised of Tranche A Term Loans,
Tranche B Term Loans or Revolving Loans;
(B) the amount of the Borrowing, which shall be in an aggregate
minimum principal amount of $1,000,000 or any multiple of $100,000 in
excess thereof (or, such lesser multiple as may be acceptable to the
Administrative Agent);
(C) the requested Borrowing Date, which shall be a Business Day;
(D) in the case of a Revolving Borrowing after the Closing Date,
whether such Borrowing is to be comprised of Eurodollar Loans or Base Rate
Loans; and
(E) the duration of the Interest Period, if any, applicable to the
respective Revolving Loans included in such notice. If the Notice of
Borrowing shall fail to specify the duration of the Interest Period for any
Borrowing comprised of Eurodollar Loans, such Interest Period shall be one
month.
(b) Upon receipt of the Notice of Borrowing, the Administrative Agent
will promptly notify each Lender with a Commitment for such Loan of the contents
thereof and of the amount of such Lender's Commitment Percentage of the
requested Borrowing.
(c) Each Lender will make the amount of its Commitment Percentage of
each Tranche A Term Loan Borrowing, Tranche B Term Loan Borrowing or Revolving
Borrowing, as applicable, available to the Administrative Agent for the account
of the Borrower at the Administrative Agent's Payment Office by 2:00 p.m. (New
York City time) on the Borrowing Date (or by 3:00 p.m. (New York City time) on
such Borrowing Date in the case of a Borrowing of Base Rate Loans made on same
day notice) requested by the Borrower in funds immediately available to the
Administrative Agent. Unless any applicable condition of Article V has not been
satisfied or waived in writing by the Required Lenders, the proceeds of all such
Loans will then be made available to the Borrower by the Administrative Agent by
wire transfer in accordance with written instructions provided to the
Administrative Agent by the Borrower. Each Lender will make the amount of its
Commitment Percentage of each Mandatory Borrowing available to the
Administrative Agent for the account of the Swingline Lender at the
Administrative Agent's Payment Office by 2:00 p.m. (New York City time) on the
date specified in Section 2.01(d)(iv).
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(d) Upon the occurrence and during the continuance of (x) any
Default under Section 9.01(a), 9.01(f) or 9.01(g) or (y) any Event of Default,
the Borrower shall not have the right to elect (and shall not elect) to have a
Loan be made as a Eurodollar Loan.
(e) After giving effect to any Borrowing, there shall not be more
than ten different Interest Periods in effect in respect of all Term Loans and
Revolving Loans.
(f)(i) Whenever the Borrower desires to make a Swingline Borrowing
hereunder, the Borrower shall give the Administrative Agent and the Swingline
Lender not later than 2:00 p.m. (New York City time) on the date that a
Swingline Loan is to be made, written notice or telephonic notice promptly
confirmed in writing of each Swingline Loan to be made hereunder. Each such
notice shall be irrevocable and specify in each case:
(A) the amount of the Swingline Loan, which shall be in an
aggregate minimum principal amount of $250,000 or any multiple of $50,000
in excess thereof (or, in either case, such lesser amount as may be
acceptable to the Administrative Agent); and
(B) the requested Borrowing Date, which shall be a Business Day.
(ii) The Swingline Lender shall not incur any liability to the
Borrower in acting upon any telephonic notice which the Swingline Lender
believes in good faith to have been given by any officer authorized to act on
behalf of the Borrower.
2.04 Conversion and Continuation Elections for Loans. (a) The
Borrower may upon irrevocable written notice to the Administrative Agent in
accordance with paragraph (b) below:
(i) elect to convert on any Business Day, any Base Rate Loans (or
any part thereof in an amount of not less than $1,000,000 or an integral
multiple of $25,000 in excess thereof (or, in either case, such other
amount as may be acceptable to the Administrative Agent in the case of any
Tranche of Term Loans)) into Eurodollar Loans;
(ii) elect to convert on the last day of the Interest Period with
respect thereto, any Eurodollar Loans (or any part thereof in an amount of
not less than $1,000,000 or an integral multiple of $25,000 in excess
thereof (or, in either case, such other amount as may be acceptable to the
Administrative Agent)) into Base Rate Loans; or
(iii) elect to continue on the last day of the Interest Period with
respect thereto, any Eurodollar Loans (or any part thereof in an amount of
not less than $1,000,000 or an integral multiple of $25,000 in excess
thereof (or, in either case, such other amount as may be acceptable to the
Administrative Agent)) as a new Borrowing of Eurodollar Loans;
provided, however, (x) that if the aggregate amount of a Borrowing comprised of
Eurodollar Loans shall have been reduced, by payment, prepayment or conversion
of part thereof to be less than $1,000,000, the Eurodollar Loans comprising such
Borrowing shall automatically convert
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into Base Rate Loans, and on and after such date the right of the Borrower to
continue such Loans as, and convert such Loans into, Eurodollar Loans shall
terminate and (y) Swingline Loans may not be converted pursuant to this Section
2.04.
(b) The Borrower shall deliver a Notice of Conversion/Continuation in
accordance with Section 12.02 to be received by the Administrative Agent not
later than (i) 11:00 a.m. (New York City time) not less than three Business Days
in advance of the Conversion Date or Continuation Date, if the Loans are to be
converted into or continued as Eurodollar Loans and (ii) 11:00 a.m. (New York
City time) not less than one Business Day in advance of the Conversion Date, if
the Loans are to be converted into Base Rate Loans, specifying:
(A) the Loans to be converted or continued;
(B) the proposed Conversion Date or Continuation Date which shall be
a Business Day;
(C) the aggregate principal amount of Loans to be converted or
continued;
(D) whether such Loans are converted into, or continued as, Base Rate
Loans or Eurodollar Loans; and
(E) the duration of the requested Interest Period, if applicable.
(c) If upon the expiration of any Interest Period applicable to
Eurodollar Loans, the Borrower has failed to select timely a new Interest Period
or the Borrower is not permitted to elect a new Interest Period, such Loans
shall automatically convert into Base Rate Loans.
(d) Upon receipt of a Notice of Conversion/Continuation, the
Administrative Agent will promptly notify each Lender with Loans affected
thereby of the contents thereof, or, if no timely notice is provided by the
Borrower, the Administrative Agent will promptly notify each such Lender of the
details of any automatic conversion. All conversions and continuations shall be
made pro rata according to the respective outstanding principal amounts of the
Loans with respect to which the notice was given.
(e) Upon the occurrence and during the continuance of (x) any Default
under Section 9.01(a), 9.01(f) or 9.01(g) or (y) any Event of Default, the
Borrower shall not elect (and shall not have the right to elect) to have a Loan
converted into or continued as a Eurodollar Loan.
(f) Notwithstanding any other provision contained in this Agreement,
after giving effect to any conversion or continuation of any Loans, there shall
not be more than ten different Interest Periods in effect in respect of all Term
Loans and Revolving Loans.
2.05 Reduction and Termination of Commitments. (a) The Borrower
may, upon not less than three Business Days' prior notice to the Administrative
Agent, terminate the Aggregate Revolving Commitment (including the Letter of
Credit Commitment) or permanently
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reduce the Aggregate Revolving Commitment (including the Letter of Credit
Commitment) by an aggregate minimum amount of $2,000,000 or any multiple of
$100,000 in excess thereof; provided, however, that no such reduction or
termination shall be permitted if after giving effect thereto and to any
prepayment of the Revolving Loans and/or Swingline Loans made on the effective
date thereof, (i) the then outstanding principal amount of the Revolving Loans
and Swingline Loans plus the outstanding Letter of Credit Obligations would
exceed the Aggregate Revolving Commitment then in effect or (ii) the aggregate
amount of Letter of Credit Obligations would exceed the Letter of Credit
Commitment then in effect; and, provided further, that once reduced in
accordance with this Section 2.05, the Aggregate Revolving Commitment
(including the Letter of Credit Commitment) may not be increased.
(b) The Aggregate Commitment (and the Commitments of each Lender)
shall terminate in their entirety on September 15, 1998 unless the Closing Date
shall have occurred on or prior to such date.
(c) The Aggregate Tranche A Term Loan Commitment (and the Tranche A
Term Loan Commitment of each Lender) shall terminate in its entirety on the
Closing Date (after giving effect to the making of the Tranche A Term Loans on
such date).
(d) The Aggregate Tranche B Term Loan Commitment (and the Tranche B
Term Loan Commitment of each Lender) shall terminate in its entirety on the
Closing Date (after giving effect to the making of the Tranche B Term Loans on
such date).
(e) The Aggregate Revolving Commitment (and the Revolving Commitment
of each Lender) shall terminate in its entirety on the Revolving Termination
Date.
(f) The Aggregate Commitment (and the Commitments of each Lender)
shall terminate in their entirety on the date on which a Change of Control
occurs.
(g) The Aggregate Revolving Commitment shall be permanently reduced
on the dates, and in the amounts, required by Sections 2.07(i) and 2.07(j).
(h) Any reduction of the Aggregate Revolving Commitment and the
Letter of Credit Commitment pursuant to this Section 2.05 shall be applied pro
rata to each Lender's Revolving Commitment in accordance with such Lender's
Revolving Commitment Percentage. The amount of any such reduction of the
Aggregate Revolving Commitment shall not be applied to the Letter of Credit
Commitment unless otherwise specified by the Borrower or required by the
definition thereof. All accrued commitment and letter of credit fees to the
effective date of any reduction or termination of Aggregate Revolving
Commitment, shall be paid on the effective date of such reduction or
termination. The Administrative Agent shall promptly notify the Lenders of any
reduction or termination of the Aggregate Revolving Commitment.
2.06 Voluntary Prepayments. (a) (i) The Borrower may, prior to
11:00 a.m. (New York City time), upon at least three Business Days' notice to
the Administrative Agent in the case of Eurodollar Loans, and prior to 11:00
a.m. (New York City time), upon same Business Day notice to the Administrative
Agent in the case of Base Rate Loans, prepay Tranche A Term
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Loans, Tranche B Term Loans or Revolving Loans, in whole or in part in amounts
of $1,000,000 or an integral multiple of $25,000 in excess thereof, and with
each such prepayment to be applied ratably among the Lenders holding the Tranche
of Loans so prepaid.
(ii) The Borrower may at any time prepay Swingline Loans, in whole or
in part in minimum amounts of $100,000 or an integral multiple of $50,000 in
excess thereof; provided, however, that notice of such prepayment shall be
required to be delivered to the Administrative Agent by 1:00 p.m. (New York City
time) on the date of such prepayment.
(b) Any notice of prepayment delivered pursuant to this Section 2.06
shall specify the date and amount of such prepayment, whether Tranche A Term
Loans, Tranche B Term Loans, Revolving Loans or Swingline Loans are to be
prepaid and the type of Loans to be prepaid, including whether such prepayment
is of Base Rate Loans or Eurodollar Loans or any combination thereof. Each such
notice shall be irrevocable by the Borrower and the Administrative Agent will
promptly notify each Lender thereof and of such Lender's Commitment Percentage
of such prepayment, if applicable. If such notice is given by the Borrower, the
Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein, together with
accrued interest to each such date on the amount prepaid and the amounts, if
any, required pursuant to Section 4.04; provided that interest shall be paid in
connection with any such prepayment of Base Rate Loans (other than a prepayment
in full) on the next occurring Interest Payment Date.
(c) Each voluntary prepayment of Term Loans pursuant to this Section
2.06 shall consist of a voluntary prepayment of both Tranche A Term Loans and
Tranche B Term Loans, and with the amount of such voluntary prepayment to be
allocated between both Tranches of Term Loans on a pro rata basis (based upon
the then outstanding principal amount of Tranche A Term Loans and Tranche B Term
Loans). Each prepayment of principal of any Tranche of Term Loans pursuant to
this Section 2.06 shall be applied to reduce the then remaining Scheduled
Repayments of the respective Tranche of Term Loans pro rata based upon the then
remaining principal amounts of the Scheduled Repayments of the respective
Tranche after giving effect to all prior reductions thereto.
2.07 Mandatory Prepayments. (a) (i) If on any date (A) the
aggregate unpaid principal amount of all outstanding Revolving Loans and
Swingline Loans plus the outstanding Letter of Credit Obligations (to the extent
not Cash Collateralized pursuant to clause (ii) below or as provided for in
Section 3.07) exceeds the Aggregate Revolving Commitment or (B) the aggregate
unpaid principal amount of Swingline Loans exceeds the Swingline Amount, in each
such case the Borrower shall immediately prepay the amount of such excess.
(ii) If on any date the aggregate amount of all Letter of Credit
Obligations shall exceed either (x) the Letter of Credit Commitment or (y) the
Aggregate Revolving Commitment, the Borrower shall Cash Collateralize on such
date its obligations in respect of Letters of Credit in an amount equal to such
excess.
(b) On each date upon which Holdings or any of its Subsidiaries
receives any proceeds from any incurrence by Holdings or any of its Subsidiaries
of Indebtedness for
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borrowed money (other than Indebtedness for borrowed money permitted to be
incurred under Section 8.04 as in effect on the Closing Date), an amount equal
to 100% of the Net Debt Proceeds of the respective incurrence of Indebtedness
shall be applied on such date as a mandatory repayment of principal of
outstanding Term Loans and/or reduction to the Aggregate Revolving Commitment
pursuant to Section 2.07(i). Nothing in this paragraph (b) shall be deemed to
permit the issuance of any Indebtedness not otherwise permitted under this
Agreement.
(c) Within two Business Days after Holdings or any of its Subsidiaries
receives any proceeds from any Asset Sale, an amount equal to 100% of the Net
Sale Proceeds from such Asset Sale shall be applied on such date as a mandatory
repayment of principal of outstanding Term Loans and/or as a reduction to the
Aggregate Revolving Commitment pursuant to Section 2.07(i), provided that with
respect to no more than $2,000,000 in the aggregate of such Net Sale Proceeds in
any fiscal year of Holdings, such Net Sale Proceeds shall not give rise to a
repayment and/or reduction pursuant to this paragraph (c) to the extent that no
Default or Event of Default then exists and Holdings has delivered a certificate
to the Administrative Agent on or prior to such date stating that such Net Sale
Proceeds shall be used to purchase assets used or to be used in the Borrower's
or any of its Subsidiaries' business within 270 days following the date of
receipt of the Net Sale Proceeds from such Asset Sale (which certificate shall
set forth the estimates of the proceeds to be so expended), and provided
further, that if all or any portion of such Net Sale Proceeds are not so
reinvested within such 270-day period (or such earlier date, if any, as Holdings
or the Borrower determines not to so reinvest such Net Sale Proceeds), such
remaining portion shall be applied on the last day of such period (or such
earlier date, as the case may be) as a mandatory repayment of principal of
outstanding Term Loans and/or as a reduction to the Aggregate Revolving
Commitment pursuant to Section 2.07(i). Nothing in this paragraph (c) shall be
deemed to permit any Asset Sale not otherwise permitted under this Agreement.
(d) Within 10 days following each date upon which Holdings or any of
its Subsidiaries receives any cash proceeds from any Recovery Event, an amount
equal to 100% of the Net Insurance Proceeds from such Recovery Event shall be
applied on such date as a mandatory repayment of principal of outstanding Term
Loans and/or as a reduction to the Aggregate Revolving Commitment pursuant to
Section 2.07(i), provided that so long as no Default or Event of Default then
exists and such Net Insurance Proceeds from such Recovery Event do not exceed
$10,000,000, such Net Insurance Proceeds shall not give rise to a repayment
and/or reduction pursuant to this paragraph (d) on such date to the extent that
Holdings has delivered a certificate to the Administrative Agent on or prior to
such date stating that such Net Insurance Proceeds shall be used to replace or
restore any properties or assets in respect of which such Net Insurance Proceeds
were paid within 365 days following the date of receipt of such Net Insurance
Proceeds (which certificate shall set forth the estimates of the Net Insurance
Proceeds to be so expended), and provided further, that (i) if the amount of
such Net Insurance Proceeds exceeds $10,000,000, then the entire amount of such
Net Insurance Proceeds and not just the portion in excess of $10,000,000 shall
be applied as provided above in this paragraph (d), and (ii) if all or any
portion of such Net Insurance Proceeds are not contractually committed to be
used within 280 days after the date of receipt of such Net Insurance Proceeds
and are not actually used within 365 days after the date of receipt of such Net
Insurance Proceeds to effect such restoration
-39-
or replacement (or such earlier date, if any, as Holdings or the Borrower
determines not to reinvest such Net Insurance Proceeds, such remaining portion
shall be applied on the last day of such 280-day or 365-day period, as the case
may be (or such earlier date as the case may be), as provided above in this
paragraph (d).
(e) On each date after the Closing Date upon which Holdings or any of
its Subsidiaries receives any cash proceeds from any capital contribution or any
sale or issuance of its equity (other than (i) proceeds received by any
Subsidiary of the Borrower from equity contributions made by the Borrower or any
Subsidiary of the Borrower, (ii) up to $2,000,000 of proceeds in the aggregate
in any fiscal year of Holdings from the issuance of shares of Holding Common
Stock (including as a result of the exercise of any options to purchase such
shares) to officers and employees of Holdings or any of its Subsidiaries, (iii)
up to $10,000,000 of proceeds in the aggregate (other than from a registered
public equity offering) the proceeds of which are used to fund a Permitted
Retained Equity Transaction and (iv) up to $20,000,000 of additional proceeds in
the aggregate to the extent made by one or more Permitted Holders and/or other
shareholders of Holdings on the Closing Date the proceeds of which are used to
fund a Permitted Retained Equity Transaction), an amount equal to 50% of the Net
Equity Proceeds of such capital contribution or sale or issuance of equity shall
be applied as a mandatory repayment of principal of outstanding Term Loans
and/or as a reduction to the Aggregate Revolving Commitment pursuant to Section
2.07(i).
(f) On each Excess Cash Payment Date, an amount equal to 75% of the
Excess Cash Flow for the relevant Excess Cash Payment Period shall be applied as
a mandatory repayment of principal of outstanding Term Loans and/or as a
reduction to the Aggregate Revolving Commitment pursuant to Section 2.07(i);
provided, however, that the foregoing percentage shall be reduced to 50% if the
Consolidated Leverage Ratio is less than 3.75:1.00 on the last day of the
Measurement Period for the relevant Excess Cash Payment Period (after giving
effect to any repayment of Term Loans on such date).
(g) The Borrower shall pay, together with each prepayment made by the
Borrower under this Section 2.07, accrued interest on the amount prepaid and any
amounts required pursuant to Section 4.04; provided that interest shall be paid
in connection with any such prepayment of Base Rate Loans (other than a
prepayment in full) on the next occurring Interest Payment Date.
(h) Any prepayments pursuant to this Section 2.07 made on a day other
than an Interest Payment Date for any Loan shall be applied first to any Base
Rate Loans then outstanding and then to Eurodollar Loans with the shortest
Interest Periods remaining.
(i) Subject to paragraph (j) of this Section 2.07, each repayment of
Term Loans pursuant to this Section 2.07 shall be applied to the Tranche A Term
Loans and the Tranche B Term Loans on a pro rata basis (based upon the then
outstanding principal amount of Tranche A Term Loans and Tranche B Term Loans).
Each repayment of principal of any Tranche of Term Loans pursuant to this
Section 2.07 shall be applied to reduce the then remaining Scheduled Repayments
of the respective Tranche of Term Loans pro rata based upon
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the then remaining principal amounts of the Scheduled Repayments of the
respective Tranche after giving effect to all prior reductions thereto. After
all Term Loans have been repaid in full, any amounts required to be applied
pursuant to this Section 2.07(i) shall be applied to reduce the Aggregate
Revolving Commitment.
(j) Notwithstanding anything to the contrary contained in this Section
2.07, so long as any Tranche A Term Loans remain outstanding the Borrower shall
have the option, in its sole discretion, to give the B Lenders the option to
waive their pro rata share of a mandatory repayment of Tranche B Term Loans
which is to be made pursuant to Section 2.07(b), (c), (d), (e) or (f) (each such
repayment, a "Waivable Mandatory Repayment") upon the terms and provisions set
forth in this Section 2.07(j). If the Borrower elects to exercise the option
referred to in the immediately preceding sentence, the Borrower shall give to
the Administrative Agent written notice of the Borrower's intention to give the
B Lenders the right to waive a Waivable Mandatory Repayment (including in such
notice, the aggregate amount of such proposed repayment) at least five Business
Days prior to the date of the proposed repayment, which notice the
Administrative Agent shall promptly forward to all B Lenders (indicating in such
notice the amount of such repayment to be applied to each such B Lender's
outstanding Tranche B Term Loans). The Borrower's offer to permit the B Lenders
to waive any such Waivable Mandatory Repayment may apply to all or part of such
repayment, provided that any offer to waive part of such repayment must be made
ratably to the B Lenders on the basis of their outstanding Tranche B Term Loans.
In the event that any such B Lender desires to waive its pro rata share of such
B Lender's right to receive any such Waivable Mandatory Repayment in whole or in
part, such B Lender shall so advise the Administrative Agent no later than 5:00
P.M. (New York City time) on the date which is two Business Days after the date
of such notice from the Administrative Agent, which notice shall also include
the amount such B Lender desires to receive in respect of such repayment. If
any B Lender does not reply to the Administrative Agent within the two Business
Days, such B Lender will be deemed not to have waived any part of such
repayment. If any B Lender does not specify an amount it wishes to receive,
such B Lender will be deemed to have accepted 100% of its share of such
repayment. In the event that any such B Lender waives all or any part of its
share of any such Waivable Mandatory Repayment, the Administrative Agent shall
apply 100% of the amount so waived by such B Lender (1) first, to the
outstanding Tranche A Term Loans in accordance with Section 2.07(i) and (2)
second, to the extent that any amount remains after the application pursuant to
preceding clause (1), to permanently reduce the Aggregate Revolving Commitment.
(k) The Borrower shall repay in full all outstanding Loans on the date
on which a Change of Control occurs.
2.08 Repayment of Principal. (a) The Tranche A Term Loans. On each
date set forth below, the Borrower shall repay that principal amount of Tranche
A Term Loans, to the extent then outstanding, as is set forth opposite such date
below (each such repayment, as the same may be reduced as provided in Sections
2.06(c) and 2.07(i), a "Scheduled A Repayment"):
-41-
Scheduled A Amount
------
Repayment Date
--------------
January 15, 2000 $ 2,500,000
July 15, 2000 $ 2,500,000
January 15, 2001 $ 3,500,000
July 15, 2001 $ 3,500,000
January 15, 2002 $ 5,000,000
July 15, 2002 $ 5,000,000
January 15, 2003 $ 6,000,000
July 15, 2003 $ 6,000,000
January 15, 2004 $ 7,500,000
July 15, 2004 $ 7,500,000
January 15, 2005 $11,000,000
(b) The Tranche B Term Loans. On each date set forth below, the
Borrower shall repay that principal amount of Tranche B Term Loans, to the
extent then outstanding, as is set forth opposite such date below (each such
repayment, as the same may be reduced as provided in Sections 2.06(c) and
2.07(i), a "Scheduled B Repayment"):
Scheduled B Amount
------
Repayment Date
--------------
January 15, 2000 $275,000
July 15, 2000 $275,000
January 15, 2001 $275,000
July 15, 2001 $275,000
January 15, 2002 $275,000
July 15, 2002 $275,000
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Scheduled B Amount
------
Repayment Date
--------------
January 15, 2003 $ 275,000
July 15, 2003 $ 275,000
January 15, 2004 $ 275,000
July 15, 2004 $ 275,000
January 15, 2005 $ 275,000
July 15, 2005 $ 275,000
January 15, 2006 $25,850,000
July 15, 2006 $25,850,000
(c) The Revolving Loans. The Borrower shall repay in full on the
Revolving Termination Date the aggregate principal amount of the Revolving Loans
outstanding on such date.
(d) The Swingline Loans. The Borrower shall repay to the Swingline
Lender in full on the Revolving Termination Date the aggregate principal amount
of the Swingline Loans outstanding on such date.
2.09 Interest. (a) Each Loan under a respective Tranche shall bear
interest on the outstanding principal amount thereof from the Borrowing Date
applicable thereto until it becomes due at a rate per annum equal to the Base
Rate or the Eurodollar Rate, as the case may be, plus the Applicable Margin for
such Tranche of Loans then in effect as set forth below:
(i) for the period commencing on the Closing Date to the First
Adjustment Date:
Applicable Margin/Tranche A Applicable Margin
Term Loans, Revolving Loans and Swingline Loans Tranche B Term Loans
----------------------------------------------- --------------------
Base Rate 1.25% 1.75%
Eurodollar Rate 2.25% 2.75%
(ii) from and after the First Adjustment Date, for each period from an
Adjustment Date to the next succeeding Adjustment Date, the rate per annum
for the relevant type of Loan of the respective Tranche set forth below
opposite the Consolidated Leverage Ratio determined as at the end of the
last fiscal quarter ended prior to the first day of such period:
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Applicable Margin/
Tranche A Term Loans, Revolving
Loans and Applicable Margin/
Swingline Loans Tranche B Term Loans
----------------------------------- -----------------------------------
Eurodollar Rate Base Rate Eurodollar Rate Base Rate
------------------- -------------- ------------------- --------------
Consolidated Leverage Ratio is
less than or equal to 3.00 to 1.25% 0.25% 2.00% 1.00%
1.00 ("Level I")
Consolidated Leverage Ratio is
less than or equal to 3.50 to 1.50% 0.50% 2.25% 1.25%
1.0 but greater than 3.00 to
1.00 ("Level II")
Consolidated Leverage Ratio is
less than or equal to 4.00 to 1.75% 0.75% 2.25% 1.25%
1.00 but greater than 3.50 to
1.00 ("Level III")
Consolidated Leverage Ratio is
less than or equal to 4.50 to 2.00% 1.00% 2.75% 1.75%
1.00 but greater than 4.00 to
1.00 ("Level IV")
Consolidated Leverage Ratio is
greater than 4.50 to 1.00 2.25% 1.25% 2.75% 1.75%
("Level V")
(iii) If by the last day for determining any Adjustment Date,
Holdings has failed to deliver a Leverage Ratio Certificate as at the end
of the fiscal quarter ended immediately prior to such Adjustment Date,
interest for the next succeeding period from such Adjustment Date to the
next succeeding Adjustment Date shall be computed as if the Consolidated
Leverage Ratio were at Level V; provided, however, to the extent that
Holdings thereafter delivers a Leverage Ratio Certificate during such
succeeding period, interest for the remainder of such succeeding period
shall be computed at the rate prescribed by Section 2.09(a)(ii). In
addition, at any time that a Specified Default shall exist, the Applicable
Margin shall be computed as if the Consolidated Leverage Ratio were at
Level V.
(b) Except as provided in the last sentence of Section 2.09(a)(iii)
or in the proviso to the first sentence of Section 2.09(a)(iii), any change in
the Applicable Margin due to a change in the Consolidated Leverage Ratio shall
be effective on the applicable Adjustment Date and shall apply to all Loans that
are outstanding at any time during the period commencing on such Adjustment Date
and ending on the next Adjustment Date.
-44-
(c) Interest on each Loan shall be paid in arrears on each Interest
Payment Date. Interest shall also be paid on the date of any prepayment of any
portion of Loans (excluding Base Rate Loans) for the portion of such Loans so
prepaid and upon payment (including prepayment) of any Loans (including Base
Rate Loans) in full. In addition, interest which accrues under Section 2.09(d)
also shall be paid on demand by the Administrative Agent or the Required
Lenders.
(d) If any amount of principal of or interest on any Loan, or any
other regularly scheduled amount payable hereunder or under any other Loan
Document is not paid in full when due (whether at stated maturity, by
acceleration, demand or otherwise), the Borrower shall pay interest (after as
well as before judgment) on the overdue principal amount of all outstanding
Loans at the applicable rate per annum provided in this Section 2.09 plus 2% and
on all other overdue amounts (including interest to the extent permitted by
law), at a rate per annum equal to the Base Rate plus the Applicable Margin for
the relevant Tranche of Loans plus 2%.
(e) Anything herein to the contrary notwithstanding, the obligations
of the Borrower hereunder shall be subject to the limitation that payments of
interest shall not be required, for any period for which interest is computed
hereunder, to the extent (but only to the extent) that contracting for or
receiving such payment by the respective Lender would be contrary to the
provisions of any law applicable to such Lender limiting the highest rate of
interest which may be lawfully contracted for, charged or received by such
Lender, and in such event the Borrower shall only pay such Lender interest at
the highest rate permitted by applicable law.
2.10 Fees. In addition to fees described in Section 3.08:
(a) Commitment Fees. The Borrower shall pay to the Administrative
Agent for the account of each RL Lender which is Non-Defaulting Lender a
commitment fee on the daily unused portion of such Lender's Revolving Commitment
(subject to Section 2.01(d)(iii) in the case of the Swingline Lender), computed
on a quarterly basis in arrears, on each Interest Payment Date for Base Rate
Loans based upon the daily utilization for the previous three month period as
calculated by the Administrative Agent, equal to (A) for the period from the
Closing Date to the First Adjustment Date, 0.500% per annum and (B) from and
after the First Adjustment Date, for each period from an Adjustment Date to the
next succeeding Adjustment Date, the rate per annum set forth below opposite the
relevant Level of Consolidated Leverage Ratio determined as at the end of the
last fiscal quarter ended prior to the first day of such period:
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Consolidated Leverage Ratio
---------------------------
Level I .300%
Level II .375%
Level III .425%
Level IV .500%
Level V .500%
provided, however, that if by the last day for determining any Adjustment Date,
Holdings has failed to deliver a Leverage Ratio Certificate as at the end of the
fiscal quarter ended immediately prior to such Adjustment Date, the commitment
fee for the next succeeding period from such Adjustment Date to the next
succeeding Adjustment Date shall be computed as if the Consolidated Leverage
Ratio were at Level V; provided further, however, to the extent that Holdings
thereafter delivers a Leverage Ratio Certificate during such succeeding period
the commitment fee for the remainder of such succeeding period shall be computed
at the rate prescribed in the table above in this Section 2.10(a). In addition,
at any time that a Specified Default shall exist, the commitment fee shall be
computed as if the Consolidated Leverage Ratio were at Level V. Such commitment
fees shall be paid in arrears on each Interest Payment Date for Base Rate Loans.
(b) Other Fees. The Borrower shall pay such other fees as have or
may be agreed between or among CHS and/or the Borrower and the Administrative
Agent from time to time.
2.11 Computation of Fees and Interest. (a) All computations of
interest payable in respect of Base Rate Loans shall be made on the basis of a
year of 365 or 366 days, as the case may be, and actual days elapsed. All
computations of fees and other interest under this Agreement shall be made on
the basis of a 360-day year (of 12 months with 30 days each) and actual days
elapsed. Interest and fees shall accrue during each period during which
interest or such fees are computed from the first day thereof to the last day
thereof.
(b) The Administrative Agent will promptly notify the Borrower and
the Lenders of each determination of the Eurodollar Rate; provided, however,
that any failure to do so shall not relieve the Borrower of any liability
hereunder. Except as otherwise provided in the last sentence of Section
2.09(a)(iii) or in the proviso to the first sentence of Section 2.09(a)(iii),
any change in the interest rate on a Loan resulting from a change in the
Applicable Margin shall become effective as of the opening of business on the
relevant Adjustment Date. The Administrative Agent will promptly notify the
Borrower and the Lenders of the effective date and the amount of each such
change, provided, however, that any failure to do so shall not relieve the
Borrower of any liability hereunder.
(c) Each determination of an interest rate by the Administrative
Agent shall be conclusive and binding on the Borrower and the Lenders in the
absence of manifest error.
2.12 Payments by the Borrower. (a) All payments (including
prepayments) to be made by the Borrower on account of principal, interest,
drawings under Letters of Credit, fees
-46-
and other amounts required hereunder shall be made, except as otherwise
expressly provided herein, without set-off or counterclaim and shall, except as
otherwise expressly provided with respect to drawings under Letters of Credit
and elsewhere herein, be made to the Administrative Agent for the ratable
account of the Lenders entitled thereto at the Administrative Agent's Payment
Office, and shall be made in Dollars and in immediately available funds, no
later than 2:00 p.m. (New York City time) on the date specified herein. The
Administrative Agent will promptly distribute to each Lender its share, if any,
of such principal, interest, fees or other amounts, in like funds as received.
Any payment which is received by the Administrative Agent later than 2:00 p.m.
(New York City time) shall be deemed to have been received on the immediately
succeeding Business Day and any applicable interest or fees shall continue to
accrue until such payment is deemed to have been received.
(b) Whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be, subject to the provisions
set forth in the definition of the term "Interest Period" herein.
(c) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Lenders
hereunder that the Borrower will not make the payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent as required hereunder on such date in immediately
available funds and the Administrative Agent may (but shall not be so required),
in reliance upon such assumption, cause to be distributed to each Lender
entitled thereto on such due date an amount equal to the amount then due such
Lender. If and to the extent the Borrower shall not have made such payment in
full to the Administrative Agent, each such Lender shall repay to the
Administrative Agent on demand such amount distributed to such Lender, together
with interest thereon for each day from the date such amount is distributed to
such Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate as in effect for each such day.
2.13 Payments by the Lenders to the Administrative Agent. (a)
Unless the Administrative Agent shall have received notice from a Lender on the
Closing Date or, with respect to each Borrowing after the Closing Date, at least
one Business Day prior to the date of any proposed Borrowing (other than a
Borrowing of a Swingline Loan which in accordance with Section 2.03(f) is funded
directly by the Swingline Lender), that such Lender will not make available to
the Administrative Agent for the account of the Borrower the amount of such
Lender's Commitment Percentage of the Loans included in such Borrowing, the
Administrative Agent may assume that each such Lender has made such amount
available to the Administrative Agent as required hereunder on the Borrowing
Date and the Administrative Agent may (but shall not be so required), in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent any such Lender shall not have made
its full amount available to the Administrative Agent in immediately available
funds and the Administrative Agent in such circumstances has made available to
the Borrower such amount, such Lender shall immediately make such amount
available to the Administrative Agent, together with interest at the Federal
Funds Rate from the Borrowing Date with respect to such
-47-
Borrowing to the date on which the Administrative Agent recovers such amount
from such Lender or the Borrower. A notice of the Administrative Agent submitted
to any Lender with respect to amounts owing under this Section 2.13(a) shall be
conclusive, absent manifest error. If such amount is so made available, such
payment to the Administrative Agent shall constitute such Lender's Loan on the
Borrowing Date for all purposes of this Agreement. If such amount is not made
available to the Administrative Agent on the next Business Day following such
Borrowing Date, the Administrative Agent may notify the Borrower of such failure
to fund and, within one Business Day of demand by the Administrative Agent, the
Borrower shall pay such amount to the Administrative Agent for the
Administrative Agent's account, together with interest thereon for each day
elapsed since such Borrowing Date, at a rate per annum equal to the interest
rate applicable at the time to the Loans comprising such Borrowing.
(b) The failure of any Lender to make any Loan on any Borrowing Date
shall not relieve any other Lender of any obligation hereunder to make a Loan on
such Borrowing Date, but no Lender shall be responsible for the failure of any
other Lender to make the Loan to be made by such other Lender on any Borrowing
Date.
2.14 Sharing of Payments, etc. (a) If, other than as expressly
provided elsewhere herein, any Lender shall obtain on account of the Obligations
owing to it any payment (whether voluntary, involuntary, through the exercise of
any right of set-off, or otherwise) in excess of its Commitment Percentage of
payments on account of the respective Obligations of the same kind obtained by
all the Lenders entitled thereto, such Lender shall forthwith (i) notify the
Administrative Agent of such fact, and (ii) purchase from the other such Lenders
such participations in such Obligations made by them as shall be necessary to
cause such purchasing Lender to share the excess payment ratably with each of
them; provided, however, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Lender, such purchase shall to that
extent be rescinded and each other such Lender shall repay to the purchasing
Lender the purchase price paid therefor, together with an amount equal to such
paying Lender's Commitment Percentage (according to the proportion of (A) the
amount of such paying Lender's required repayment to (B) the total amount so
recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
The Administrative Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased pursuant
to this Section 2.14 and will in each case notify the Lenders following any such
purchases.
(b) The Borrower agrees that any Lender so purchasing a participation
from another Lender pursuant to this Section 2.14 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off, but subject to Section 12.09) with respect to such participation as
fully as if such Lender were the direct creditor of the Borrower in the amount
of such participation.
2.15 Security and Guaranties. (a) All Obligations of the Borrower
and the Guarantors under this Agreement and all other Loan Documents to which
they are a party shall be secured in accordance with the Collateral Documents.
-48-
(b) All Obligations of the Borrower under this Agreement and all
other Loan Documents to which it is a party shall be unconditionally guaranteed
by each Guarantor pursuant to its Guaranty.
ARTICLE III.
THE LETTERS OF CREDIT
---------------------
3.01 The Letter of Credit Subfacility. (a) On the terms and
conditions set forth herein, (i) each Issuing Lender agrees, (A) from time to
time, on any Business Day during the period from the Closing Date to the date
which is 30 days prior to the Revolving Termination Date to issue (x)
irrevocable sight standby Letters of Credit (each such standby Letter of Credit,
a "Standby Letter of Credit") for the account of the Borrower and (y)
irrevocable sight commercial Letters of Credit (each such commercial Letter of
Credit, a "Trade Letter of Credit" and each such Trade Letter of Credit and each
Standby Letter of Credit (including the Existing Letter of Credit), a "Letter of
Credit") for the account of the Borrower, and to amend or renew Letters of
Credit previously issued by it, in accordance with Sections 3.02(b), 3.02(c) and
3.02(d), and (B) to honor drafts under the Letters of Credit; and (ii) the RL
Lenders severally agree to participate in Letters of Credit issued for the
account of the Borrower; provided, however, that no Issuing Lender shall issue
any Letter of Credit if as of the date of, and after giving effect to, the
issuance of such Letter of Credit, (x) the aggregate amount of all Letter of
Credit Obligations (exclusive of unpaid drawings under any Letter of Credit
which are repaid with the proceeds of, and simultaneously with the incurrence
of, the respective incurrence of Revolving Loans) plus the aggregate principal
amount of all Revolving Loans and all Swingline Loans shall exceed the Aggregate
Revolving Commitment or (y) the Letter of Credit Obligations (exclusive of
unpaid drawings under any Letter of Credit which are repaid with the proceeds
of, and simultaneously with the incurrence of, the respective incurrence of
Revolving Loans) shall exceed the Letter of Credit Commitment. All Letters of
Credit shall be denominated in Dollars. Notwithstanding the foregoing, in the
event a Lender Default exists, no Issuing Lender shall be required to issue any
Letter of Credit unless such Issuing Lender has entered into arrangements
satisfactory to it and the Borrower to eliminate such Issuing Lender's risk with
respect to the participation in Letters of Credit of the Defaulting Lender or
Lenders, including by Cash Collateralizing such Defaulting Lender's or Lenders'
Revolving Commitment Percentage of the Letter of Credit Obligations.
Notwithstanding anything to the contrary contained herein, Fleet National Bank
shall be the Issuing Lender only in respect of the Existing Letter of Credit and
with the Existing Letter of Credit being deemed issued for all purposes of this
Agreement on the Closing Date.
(b) No Issuing Lender shall be under any obligation to issue any
Letter of Credit if:
(i) any order, judgment or decree of any Governmental Authority
shall by its terms purport to enjoin or restrain such Issuing Lender from
issuing such Letter of Credit, or any Requirement of Law applicable to such
Issuing Lender or any request or directive (whether or not having the force
of law) from any Governmental Authority with jurisdiction over such Issuing
Lender shall prohibit, or request that such Issuing Lender
-49-
refrain from, the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon such Issuing Lender with respect
to such Letter of Credit any restriction, reserve or capital requirement
(for which such Issuing Lender is not otherwise compensated hereunder) not
in effect on the Closing Date or shall impose upon such Issuing Lender any
unreimbursed loss, cost or expense which was not applicable on the Closing
Date and which such Issuing Lender in good faith deems material to it;
(ii) such Issuing Lender has received written notice from the
Required Lenders, the Administrative Agent, the Borrower or any other
Credit Party on or prior to the Business Day prior to the requested date of
issuance of such Letter of Credit, that one or more of the applicable
conditions contained in Article V is not then satisfied;
(iii) the expiry date of any requested Letter of Credit (x) is more
than (A) in the case of Standby Letters of Credit, one year after the date
of issuance or (B) in the case of Trade Letters of Credit, 180 days after
the date of issuance, unless (in each case) the Required Lenders, the
Administrative Agent and the respective Issuing Lender have approved such
expiry date in writing or (y) is later than the 30th day prior to the
Revolving Termination Date;
(iv) any requested Letter of Credit is not in form and substance
acceptable to the respective Issuing Lender, or the issuance, of a Letter
of Credit shall violate any applicable policies of such Issuing Lender; or
(v) such Letter of Credit is in a face amount less than $100,000.
3.02 Issuance, Amendment and Renewal of Letters of Credit. (a) Each
Letter of Credit (other than the Existing Letter of Credit) shall be issued upon
the irrevocable written request of the Borrower received by the respective
Issuing Lender (with a copy sent by the Borrower to the Administrative Agent) at
least five Business Days (or such shorter time as such Issuing Lender may agree
in a particular instance in its sole discretion) prior to the proposed date of
issuance. Each such request for issuance of a Letter of Credit shall be by
facsimile, confirmed immediately in an original writing, in the form of a Letter
of Credit Application, and shall specify in form and detail satisfactory to the
respective Issuing Lender: (i) the proposed date of issuance of the Letter of
Credit (which shall be a Business Day); (ii) the face amount of the Letter of
Credit; (iii) the expiry date of the Letter of Credit; (iv) the name and address
of the beneficiary thereof; (v) the documents to be presented by the beneficiary
of the Letter of Credit in case of any drawing thereunder; (vi) the full text of
any certificate to be presented by the beneficiary in case of any drawing
thereunder; and (vii) such other matters as the respective Issuing Lender may
reasonably require.
(b) From time to time while a Letter of Credit is outstanding and
prior to the Revolving Termination Date, each Issuing Lender will, upon the
written request of the Borrower received by such Issuing Lender (with a copy
sent by the Borrower to the Administrative Agent) at least five Business Days
(or such shorter time as such Issuing Lender may agree in a particular instance
in its sole discretion) prior to the proposed date of amendment, amend any
Letter of Credit issued by it. Each such request for amendment of a Letter of
Credit shall be made by fac-
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simile, confirmed immediately in an original writing, made in the form of a
Letter of Credit Amendment Application and shall specify in form and detail
satisfactory to the respective Issuing Lender: (i) the Letter of Credit to be
amended; (ii) the proposed date of amendment of the Letter of Credit (which
shall be a Business Day); (iii) the nature of the proposed amendment; and (iv)
such other matters as such Issuing Lender may reasonably require. No Issuing
Lender shall be under any obligation to amend any Letter of Credit if: (A) such
Issuing Lender would have no obligation at such time to issue such Letter of
Credit in its amended form under the terms of this Agreement; or (B) the
beneficiary of any such Letter of Credit does not accept the proposed amendment
to the Letter of Credit.
(c) The Administrative Agent will promptly notify the RL Lenders of
the receipt by it of any Letter of Credit Application or Letter of Credit
Amendment Application.
(d) The Issuing Lenders and the Lenders agree that, while a Letter of
Credit is outstanding and prior to the Revolving Termination Date, at the option
of the Borrower and upon the written request of the Borrower received by the
respective Issuing Lender (with a copy sent by the Borrower to the
Administrative Agent) at least five Business Days (or such shorter time as such
Issuing Lender may agree in a particular instance in its sole discretion) prior
to the proposed date of notification of renewal, such Issuing Lender shall be
entitled to authorize the automatic renewal of any Letter of Credit issued by
it. Each such request for renewal of a Letter of Credit shall be made by
facsimile, confirmed immediately in an original writing, in the form of a Letter
of Credit Amendment Application, and shall specify in form and detail
satisfactory to the respective Issuing Lender: (i) the Letter of Credit to be
renewed; (ii) the proposed date of notification of renewal of the Letter of
Credit (which shall be a Business Day); (iii) the revised expiry date of the
Letter of Credit; and (iv) such other matters as such Issuing Lender may
reasonably require. No Issuing Lender shall be under any obligation to renew
any Letter of Credit if such Issuing Lender would have no obligation at such
time to issue or amend such Letter of Credit in its renewed form under the terms
of this Agreement. If any outstanding Letter of Credit shall provide that it
shall be automatically renewed unless the beneficiary thereof receives notice
from the respective Issuing Lender that such Letter of Credit shall not be
renewed, and if at the time of renewal such Issuing Lender would be entitled to
authorize the automatic renewal of such Letter of Credit in accordance with this
Section 3.02(d) upon the request of the Borrower but such Issuing Lender shall
not have received any Letter of Credit Amendment Application from the Borrower
with respect to such renewal or other written direction by the Borrower with
respect thereto, such Issuing Lender shall nonetheless be permitted to allow
such Letter of Credit to be renewed, and the Borrower and the Lenders hereby
authorize such renewal, and, accordingly, such Issuing Lender shall be deemed to
have received a Letter of Credit Amendment Application from the Borrower
requesting such renewal.
(e) This Agreement shall control in the event of any conflict with any
Letter of Credit Related Document (other than any Letter of Credit).
(f) Each Issuing Lender will also deliver to the Administrative Agent,
concurrently or promptly following its delivery of a Letter of Credit issued by
it, or amendment to or
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renewal of a Letter of Credit issued by it, to an advising bank or a
beneficiary, a true and complete copy of each such Letter of Credit or amendment
to or renewal of any such Letter of Credit.
3.03 Participations, Drawings and Reimbursements. (a) Immediately
upon the issuance of each Letter of Credit, each RL Lender shall be deemed to,
and hereby irrevocably and unconditionally agrees to, purchase from the
respective Issuing Lender a participation in such Letter of Credit and each
drawing thereunder in an amount equal to the product of (i) the Revolving
Commitment Percentage of such RL Lender times (ii) the maximum amount available
to be drawn under such Letter of Credit and the amount of such drawing,
respectively. For purposes of Section 2.10(a), each issuance of a Letter of
Credit shall be deemed to utilize the Revolving Commitment of each RL Lender by
an amount equal to the amount of such participation.
(b) In the event of any request for a drawing under a Letter of
Credit by the beneficiary or transferee thereof, the respective Issuing Lender
will promptly notify the Borrower. The Borrower shall reimburse the respective
Issuing Lender prior to 2:00 p.m. (New York City time), on the Business Day
immediately following each date that any amount is paid by such Issuing Lender
under any Letter of Credit (each such date on which any amount is so paid by
such Issuing Lender, a "Disbursement Date"), in an amount equal to the amount so
paid by the Issuing Lender. In the event the Borrower shall fail to reimburse
the respective Issuing Lender for the full amount of any drawing under any
Letter of Credit by 2:00 p.m. (New York City time) on the Business Day
immediately following the respective Disbursement Date, such Issuing Lender will
promptly notify the Administrative Agent and the Administrative Agent will
promptly notify each RL Lender thereof, and the Borrower shall be deemed to have
requested that Revolving Loans consisting of Base Rate Loans be made by the RL
Lenders (and hereby irrevocably consents to such deemed request) pursuant to
Section 2.01(c) to be disbursed on the Business Day immediately following the
respective Disbursement Date under such Letter of Credit. Any notice given by
an Issuing Lender or the Administrative Agent pursuant to this Section 3.03(b)
may be oral if immediately confirmed in writing (including by facsimile);
provided, however, that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.
(c) Each RL Lender shall upon receipt of any notice pursuant to
Section 3.03(b) make available to the Administrative Agent for the account of
the respective Issuing Lender an amount in Dollars and in immediately available
funds equal to its Revolving Commitment Percentage of the amount of the
unreimbursed drawing, whereupon the participating RL Lenders shall (subject to
Section 3.03(d)) each be deemed to have made a Revolving Loan consisting of a
Base Rate Loan to the Borrower in that amount. If any RL Lender so notified
shall fail to make available to the Administrative Agent for the account of the
respective Issuing Lender the amount of such RL Lender's Revolving Commitment
Percentage of the amount of the unreimbursed drawing by no later than 2:00 p.m.
(New York City time) on the Business Day immediately following the respective
Disbursement Date, then interest shall accrue on such RL Lender's obligation to
make such payment, from the Business Day immediately following the respective
Disbursement Date to the date such RL Lender makes such payment, at a rate per
annum equal to (i) the Federal Funds Rate in effect from time to time during the
period
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commencing on the later of the Business Day immediately following the respective
Disbursement Date and the date such RL Lender receives notice of the
Disbursement Date prior to 2:00 p.m. (New York City time) on such date and
ending on the date three Business Days thereafter, and (ii) thereafter at the
Base Rate as in effect from time to time plus the Applicable Margin for
Revolving Loans maintained as Base Rate Loans. The Administrative Agent will
promptly give notice of the occurrence of the Disbursement Date, but failure of
the Administrative Agent to give any such notice on the Disbursement Date or in
sufficient time to enable any RL Lender to effect such payment on such date
shall not relieve such RL Lender from its obligations under this Section 3.03.
(d) With respect to any unreimbursed drawing which is not converted
into Revolving Loans consisting of Base Rate Loans to the Borrower in whole or
in part, because of the Borrower's failure to satisfy the conditions set forth
in Section 5.02 or for any other reason, the Borrower shall be deemed to have
incurred from the respective Issuing Lender a Letter of Credit Borrowing in the
amount of such unreimbursed drawing, which Letter of Credit Borrowing shall be
due and payable on demand (together with interest) and shall bear interest from
the respective Disbursement Date at a rate per annum equal to the Base Rate,
plus the Applicable Margin for Revolving Loans maintained as Base Rate Loans,
plus in the case of any Letter of Credit Borrowing outstanding after the
respective Disbursement Date, 2% per annum, and each RL Lender's payment to such
Issuing Lender pursuant to Section 3.03(c) shall be deemed payment in respect of
its participation in such Letter of Credit Borrowing.
(e) Each RL Lender's obligation in accordance with this Agreement to
make the Revolving Loans or fund its participation in any Letter of Credit
Borrowing, as contemplated by this Section 3.03, as a result of a drawing under
a Letter of Credit shall be absolute and unconditional and without recourse to
the respective Issuing Lender and shall not be affected by any circumstance,
including (i) any set-off, counterclaim, defense or other right which such RL
Lender may have against the Issuing Lender, the Borrower or any other Person for
any reason whatsoever; (ii) the occurrence or continuance of a Default, an Event
of Default or a Material Adverse Effect; (iii) the amount of the Aggregate
Revolving Commitment at such time; or (iv) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing.
3.04 Repayment of Participations. (a) On (and only upon) receipt by
the Administrative Agent for the account of the respective Issuing Lender of
funds from the Borrower (i) in reimbursement of any payment made by such Issuing
Lender under the Letter of Credit issued by it and with respect to which any RL
Lender has paid the Administrative Agent for the account of such Issuing Lender
for such RL Lender's participation in the Letter of Credit pursuant to Section
3.03, or (ii) in payment of interest on amounts described in clause (i), the
Administrative Agent will pay to each RL Lender, in the same funds as those
received by the Administrative Agent for the account of such Issuing Lender, the
amount of such RL Lender's Revolving Commitment Percentage of such funds, and
such Issuing Lender shall receive the amount of the Revolving Commitment
Percentage of such funds of any RL Lender that did not so pay the Administrative
Agent for the account of such Issuing Lender.
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(b) If the Administrative Agent or any Issuing Lender is required at
any time to return to the Borrower, or to a trustee, receiver, liquidator,
custodian, or any similar official in any Insolvency Proceeding, any portion of
the payments made by the Borrower to the Administrative Agent for the account of
such Issuing Lender pursuant to Section 3.04(a) in reimbursement of a payment
made under the Letter of Credit or interest or fee thereon, each RL Lender
shall, on demand of the Administrative Agent, forthwith return to the
Administrative Agent or such Issuing Lender the amount of its Revolving
Commitment Percentage of any amounts so returned by the Administrative Agent or
such Issuing Lender plus interest thereon from the date such demand is made to
the date such amounts are returned by such RL Lender to the Administrative Agent
or such Issuing Lender, at a rate per annum equal to the Federal Funds Rate in
effect from time to time.
3.05 Role of the Issuing Lenders. (a) Each Lender and the Borrower
agree that, in paying any drawing under a Letter of Credit, no Issuing Lender
shall have any responsibility to obtain any document (other than any sight draft
and certificates expressly required by the Letter of Credit issued by such
Issuing Lender) or to ascertain or inquire as to the validity or accuracy of any
such document or the authority of the Person executing or delivering any such
document.
(b) No Issuing Lender nor any of the respective correspondents,
participants or assignees of such Issuing Lender shall be liable to any Lender
for: (i) any action taken or omitted in connection herewith at the request or
with the approval of the Required Lenders; (ii) any action taken or omitted in
the absence of gross negligence or willful misconduct; or (iii) the due
execution, effectiveness, validity or enforceability of any Letter of Credit
Related Document.
(c) The Borrower hereby assumes all risks of the acts or omissions of
any beneficiary or transferee with respect to its use of any Letter of Credit.
No Issuing Lender nor any of the respective correspondents, participants or
assignees of such Issuing Lender, shall be liable or responsible for any of the
matters described in clauses (i) through (vii) of Section 3.06; provided,
however, that the Borrower may have a claim against the respective Issuing
Lender, and such Issuing Lender may be liable to the Borrower, to the extent,
but only to the extent, of any direct, as opposed to consequential or exemplary,
damages suffered by the Borrower which the Borrower proves were caused by such
Issuing Lender's willful misconduct or gross negligence or such Issuing Lender's
willful failure to pay under any Letter of Credit issued by it after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing: (i) each Issuing Lender may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary; and (ii) each Issuing Lender shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason.
3.06 Obligations Absolute. The obligations of the Borrower under
this Agreement and any Letter of Credit Related Document to reimburse each
Issuing Lender for a
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drawing under a Letter of Credit issued by such Issuing Lender, and to repay any
Letter of Credit Borrowing and any drawing under a Letter of Credit converted
into Revolving Loans, shall (except as expressly provided in the proviso to the
second sentence of Section 3.05(c)) be unconditional and irrevocable, and shall
be paid strictly in accordance with the terms of this Agreement and each such
other Letter of Credit Related Document under all circumstances, including the
following:
(i) any lack of validity or enforceability of this Agreement, any
other Loan Document or any Letter of Credit Related Document;
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the obligations of the Borrower in respect
of any Letter of Credit or any other amendment or waiver of or any consent
to departure from all or any of the Letter of Credit Related Documents;
(iii) the existence of any claim, set-off, defense or other right
that the Borrower or any Subsidiary of the Borrower may have at any time
against any beneficiary or any transferee of any Letter of Credit (or any
Person for whom any such beneficiary or any such transferee may be acting),
any Issuing Lender or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by the Letter of Credit
Related Documents or any unrelated transaction;
(iv) any draft, demand, certificate or other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any
Letter of Credit;
(v) any payment by the respective Issuing Lender under any Letter
of Credit issued by it against presentation of a draft or certificate that
does not strictly comply with the terms of any Letter of Credit; or any
payment made by the respective Issuing Lender under any Letter of Credit
issued by it to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of any Letter of Credit, including any arising in connection
with any Insolvency Proceeding;
(vi) any exchange, release or non-perfection of any collateral, or
any release or amendment or waiver of or consent to departure from any
other guaranty, for all or any of the obligations of the Borrower in
respect of any Letter of Credit; or
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, the
Borrower or a guarantor.
3.07 Cash Collateral Pledge. Upon (a) the request of the
Administrative Agent, (i) if the respective Issuing Lender has honored any full
or partial drawing request on any Letter
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of Credit issued by such Issuing Lender and such drawing has resulted in a
Letter of Credit Borrowing hereunder, or (ii) if, as of the Revolving
Termination Date, any Letters of Credit may for any reason remain outstanding
and partially or wholly undrawn, or (b) the occurrence of the circumstances
described in Section 2.07(a) requiring the Borrower to Cash Collateralize
Letters of Credit, then the Borrower shall immediately Cash Collateralize the
Letter of Credit Obligations in an amount equal to such Letter of Credit
Obligations (or in the case of clause (b) above, the excess amount required
pursuant to Section 2.07(a)) and such cash will be held as security for all
Obligations of the Borrower to the Lenders hereunder in a cash collateral
account to be established by the Administrative Agent, and during the existence
of an Event of Default, the Administrative Agent may, upon the request of the
Required Lenders, apply such amounts so held to the payment of such outstanding
Obligations.
3.08 Letter of Credit Fees. (a) The Borrower shall pay to the
Administrative Agent for the account of each RL Lender a letter of credit fee
with respect to the Letters of Credit computed on the average daily maximum
amount available to be drawn of the outstanding Letters of Credit, on each
Interest Payment Date for Base Rate Loans based upon Letters of Credit
outstanding for the previous three-month period. The letter of credit fee shall
be equal to (i) for the period from the Closing Date to the First Adjustment
Date, 2.25% per annum and (ii) from and after the First Adjustment Date, for
each period from an Adjustment Date to the next succeeding Adjustment Date, the
rate per annum set forth below opposite the relevant Level of Consolidated
Leverage Ratio determined as at the end of the last fiscal quarter ended prior
to the first day of such period:
Consolidated Leverage Ratio
---------------------------
Level I 1.25%
Level II 1.50%
Level III 1.75%
Level IV 2.00%
Level V 2.25%
provided, however, that if by the day for determining any Adjustment Date
Holdings has failed to deliver a Leverage Ratio Certificate as at the end of the
fiscal quarter ended immediately prior to such Adjustment Date, the letter of
credit fee for the next succeeding period from such Adjustment Date to the next
succeeding Adjustment Date shall be computed as if the Consolidated Leverage
Ratio were at Level V; provided further, however, to the extent that Holdings
thereafter delivers a Leverage Ratio Certificate during such succeeding period,
the letter of credit fee for the remainder of such succeeding period shall be
computed at the rate prescribed in the table above in this Section 3.08(a). In
addition, at any time that a Specified Default shall exist, the letter of credit
fee shall be computed as if the Consolidated Leverage Ratio were at Level V.
Such letter of credit fee shall be due and payable in arrears on each Interest
Payment Date for Base Rate Loans.
(b) The Borrower shall pay to each Issuing Lender a letter of credit
fronting fee for each Letter of Credit issued by such Issuing Lender equal to
0.25% per annum of the face
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amount of such Letter of Credit. Such Letter of Credit fronting fee shall be due
and payable in arrears on each Interest Payment Date for Base Rate Loans.
(c) The Borrower shall pay to each Issuing Lender from time to time
on demand the normal issuance, presentation, amendment and other processing
fees, and other standard costs and charges with respect to Letters of Credit
issued by it, of such Issuing Lender relating to letters of credit as from time
to time in effect.
3.09 Uniform Customs and Practice. The Uniform Customs and Practice
for Documentary Credits as most recently published by the International Chamber
of Commerce shall in all respects be deemed a part of this Article III as if
incorporated herein and (unless otherwise expressly provided in the Letters of
Credit) shall apply to the Letters of Credit.
ARTICLE IV.
TAXES, YIELD PROTECTION AND ILLEGALITY
--------------------------------------
4.01 Taxes. (a) Subject to Section 4.01(g), any and all payments
made by the Borrower to any Lender or the Administrative Agent under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any and all present or future taxes, levies, imposts,
deductions, duties, fees, assessments or other charges or withholdings, and all
liabilities with respect thereto now or hereafter imposed by any jurisdiction or
by any political subdivision or taxing authority thereof or therein with respect
to such payments, excluding, in the case of each Lender and the Administrative
Agent (except as otherwise provided in Section 4.01(c)), as the case may be,
such taxes as are imposed on or measured by such Person's net income or net
profits by the jurisdiction under the laws of which such Person is organized or
has its principal office or in which the Lending Office of such Person is
located or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, duties, fees, assessments or other charges,
withholdings and liabilities being hereinafter referred to as "Taxes").
(b) In addition, the Borrower shall pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Document (hereinafter referred to as "Other Taxes").
(c) Subject to Section 4.01(g), the Borrower shall indemnify and
hold harmless each Lender and the Administrative Agent for (i) the full amount
of Taxes and Other Taxes (including any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under Section 4.01(d) and this Section 4.01(c))
and (ii) the full amount of all taxes imposed on or measured by the net income
or net profits of such Lender or the Administrative Agent pursuant to the laws
of the jurisdiction in which such Lender or the Administrative Agent is
organized or has its principal office or in which the Lending Office of such
Person is located or under the laws
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of any political subdivision or taxing authority of any such jurisdiction in
which such Lender or the Administrative Agent is organized or has its principal
office or in which its respective Lending Office is located paid by such Lender
or the Administrative Agent as a result of amounts payable by the Borrower under
Section 4.01(d) and this Section 4.01(c), and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such taxes or other liabilities were correctly
or legally asserted.
(d) If the Borrower shall be required by law to deduct or withhold any
Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Lender or the Administrative Agent, then, subject to Section 4.01(g):
(i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this Section 4.01(d)) such Lender or the
Administrative Agent, as the case may be, receives an amount equal to the
sum it would have received had no such deductions or withholdings been
made;
(ii) the Borrower shall make such deductions; and
(iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with
applicable law.
(e) Within 30 days after the date of any payment by the Borrower of
Taxes or Other Taxes, such Person shall furnish to the Administrative Agent, at
its address referred to in Section 12.02, the original or a certified copy of a
receipt evidencing payment thereof, or other evidence of payment satisfactory to
the Administrative Agent.
(f) Each Lender that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees that:
(i) it shall, no later than the Closing Date (or, in the case of a
Lender which becomes a party hereto pursuant to Section 12.07 after the
Closing Date, the date upon which such Lender becomes a party hereto unless
the respective Lender was already a Lender hereunder immediately prior to
such assignment or transfer) deliver to the Borrower and the Administrative
Agent either (A) two accurate and complete signed originals of Internal
Revenue Service Form 4224 or any successor thereto ("Form 4224"), or two
accurate and complete signed originals of Internal Revenue Service Form
1001 or any successor thereto ("Form 1001"), as appropriate, in each case
indicating that such Lender is on the date of delivery thereof entitled to
a complete exemption from United States withholding tax with respect to
payments to be made under this Agreement and under any note, or (B) if the
Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code and cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (f)(i)(A), (x) a certificate substantially in the form
of Exhibit N ("Section 4.01(f) Certificate") and (y) two accurate and
complete signed originals of Internal Revenue Service Form W-8 or any
successor thereto ("Form W-8") certifying to such Lender's entitlement on
the date of delivery thereof to a complete exemption from
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United States withholding tax with respect to payments of interest to be
made under this Agreement or any note.
(ii) if at any time a Lender that provides forms pursuant to
paragraph (f)(i)(A) above makes any change in its place of incorporation or
fiscal residence necessitating a new Form 4224 or Form 1001, such Lender
shall promptly deliver to the Borrower through the Administrative Agent in
replacement for, or in addition to, the forms previously delivered by such
Lender hereunder, two accurate and complete signed originals of Form 4224
or Form 1001 or Form W-8 and a Section 4.01(f) Certificate, as appropriate,
in each case indicating that such Lender is on the date of delivery thereof
entitled to receive all payments under this Agreement free from withholding
of United States Federal income tax;
(iii) it shall, to the extent it is legally entitled to do so,
before or promptly after a Lender that provides forms pursuant to paragraph
(f)(i)(A) above makes any change of a Lending Office or its principal
office, or the occurrence of any event (including the passing of time but
excluding any event mentioned in clause (ii) above) requiring a change in
or renewal of the most recent Form 4224 or Form 1001 previously delivered
by such Lender, deliver to the Borrower through the Administrative Agent
two accurate and complete original signed copies of Form 4224 or Form 1001
in replacement for the forms previously delivered by such Lender indicating
that such Lender continues to be entitled to receive all payments under
this Agreement free from any withholding of any United States Federal
income tax;
(iv) it shall, to the extent it is legally entitled to do so,
promptly upon the Borrower's or the Administrative Agent's reasonable
request to that effect, deliver to the Borrower or the Administrative Agent
(as the case may be) such other forms or similar documentation as may be
required from time to time by any applicable law, treaty, rule or
regulation in order to establish such Lender's complete exemption from
withholding on all payments under this Agreement; and
(v) without limiting or restricting any Lender's right to increased
amounts under Section 4.01(d) from the Borrower upon satisfaction of such
Lender's obligations under the provisions of this Section 4.01(f), if such
Lender is entitled to a reduction in the applicable withholding tax, the
Administrative Agent may (but shall not be obligated to) withhold from any
interest to such Lender an amount equivalent to the applicable withholding
tax after taking into account such reduction. If the forms or other
administrative documentation required by clause (i) are not delivered to
the Administrative Agent, then the Administrative Agent shall withhold from
any interest payment to any such Lender not providing such forms or other
documentation, an amount equivalent to the applicable withholding tax and
in addition, the Administrative Agent shall also withhold against periodic
payments other than interest payments to the extent United States
withholding tax is not eliminated by obtaining Form 4224, Form 1001 or Form
W-8 and Section 4.01(f) Certificate. The Borrower shall indemnify and hold
harmless the Administrative Agent and each of its officers, directors,
employees, counsel, agents and attorney-in-fact,
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on an after tax basis, from and against all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, charges,
expenses or disbursements (including Attorney Costs) of any kind whatsoever
incurred as a result of or in connection with the Administrative Agent's
failure to withhold as provided pursuant to the preceding sentence, unless
such failure constitutes gross negligence or willful misconduct of the
Administrative Agent itself as the same is determined by a final judgment
of a court of competent jurisdiction and the obligations in this sentence
shall survive payment of all other Obligations.
(g) The Borrower will not be required to pay any additional amounts in
respect of Taxes imposed by the United States Federal government pursuant to
Section 4.01(a) or 4.01(d) to any Lender if and to the extent the obligation to
pay such additional amounts would not have arisen but for a failure by such
Lender to comply with its obligations under Section 4.01(f) in respect of its
Lending Office.
(h) Each Lender agrees that it shall, at any time upon reasonable
advance request in writing by the Borrower or the Administrative Agent, promptly
deliver such certification or other documentation as may be required under the
law or regulation in any applicable jurisdiction and which such Lender is
entitled to submit to avoid or reduce withholding taxes on amounts to be paid by
the Borrower and received by such Lender pursuant to this Agreement or any other
Loan Document; provided, however, a Lender will not be obligated to deliver any
tax returns, income tax schedules or computations, or other documentation that
would require such bank to disclose any other information that would adversely
affect such Lender, as determined solely by such Lender.
(i) Subject to Section 4.01(g), the Borrower shall indemnify each
Lender and the Administrative Agent, to the extent required by this Section 4.01
within 30 days after receipt of written request from such Lender or the
Administrative Agent thereof accompanied by a written statement describing in
reasonable detail the Taxes or Other Taxes or other additional amounts that are
the subject of the basis for such indemnity and the computation of the amount
payable.
(j) If the Borrower is required to pay additional amounts to any
Lender or the Administrative Agent pursuant to Section 4.01(d), then such Lender
shall, upon the Borrower's request, use its reasonable best efforts (consistent
with policy considerations of such Lender) to change the jurisdiction of its
Lending Office so as to reduce or eliminate any such additional payment which
may thereafter accrue if such change in the sole judgment of such Lender is not
otherwise disadvantageous to such Lender.
(k) Each Lender agrees that it will (i) take all reasonable actions
reasonably requested by the Borrower (consistent with policy considerations by
such Lender) to maintain all exemptions, if any, available to it from
withholding taxes (whether available by treaty or existing administrative
waiver), and (ii) to the extent reasonable, otherwise cooperate with the
Borrower to minimize any amounts payable by the Borrower under this Section
4.01, in any case described
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in the preceding clauses (i) and (ii), however, only if such action or
cooperation is not disadvantageous to such Lender in the sole judgment of such
Lender.
4.02 Illegality. (a) If any Lender shall determine that (i) the
introduction of any Requirement of Law, or any change in any Requirement of Law,
or in the interpretation or administration thereof, has made it unlawful, or
(ii) any central bank or other Governmental Authority has asserted that it is
unlawful for any Lender or its Lending Office to make a Eurodollar Loan or to
convert any Base Rate Loan to a Eurodollar Loan, then, on notice thereof by such
Lender to the Borrower through the Administrative Agent, the obligation of such
Lender to make or convert any such Loans shall be suspended until such Lender
shall have notified the Administrative Agent and the Borrower that the
circumstances giving rise to such determination no longer exist.
(b) If a Lender shall determine that it is unlawful to maintain any
Eurodollar Loan, the Borrower shall, unless otherwise permitted under paragraph
(c) below, prepay in full all Eurodollar Loans of such Lender then outstanding,
together with interest accrued thereon, either on the last day of the Interest
Period thereof if such Lender may lawfully continue to maintain such Eurodollar
Loans to such day, or immediately, if such Lender may not lawfully continue to
maintain such Eurodollar Loans, together with any amounts required to be paid in
connection therewith pursuant to Section 4.04.
(c) If the Borrower is required to prepay any Eurodollar Loan
immediately, then concurrently with such prepayment, the Borrower shall borrow
from the affected Lender, in the aggregate amount of such repayment, Base Rate
Loans of the respective Tranche.
(d) Before giving any notice to the Administrative Agent pursuant to
this Section 4.02, the affected Lender shall designate a different Lending
Office with respect to its Eurodollar Loans if such designation will avoid the
need for giving such notice or making such demand and will not, in the judgment
of such Lender, be illegal, inconsistent with the policies of such Lender or
otherwise disadvantageous to such Lender.
4.03 Increased Costs and Reduction of Return. (a) If any Lender or
any Issuing Lender shall determine that, due to either (i) the introduction of
or any change in or in the interpretation or administration of any law or
regulation (other than any law or regulation relating to taxes, including those
relating to Taxes and Other Taxes) after the Closing Date or (ii) the compliance
with any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law) made after the Closing Date,
there shall be any increase in the cost to such Lender of agreeing to make or
making, funding or maintaining any Eurodollar Loans or participating in any
Letter of Credit Obligations, or any increase in the cost to such Issuing Lender
of agreeing to issue, issuing or maintaining any Letter of Credit or of agreeing
to make or making, funding or maintaining any unpaid drawing under any Letter of
Credit, then the Borrower shall be liable for, and shall from time to time,
within ten days of demand therefor by such Lender or such Issuing Lender, as the
case may be (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such
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Lender or such Issuing Lender, additional amounts as are sufficient to
compensate such Lender or the Issuing Lender for such increased costs.
(b) If any Lender or any Issuing Lender shall have determined that
(i) the introduction of any Capital Adequacy Regulation after the Closing Date,
(ii) any change in any Capital Adequacy Regulation after the Closing Date, (iii)
any change in the interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental Authority charged with the
interpretation or administration thereof after the Closing Date, or (iv)
compliance by any Lender (or its Lending Office) or any Issuing Lender, as the
case may be, or any corporation controlling such Lender or such Issuing Lender,
as the case may be, with any Capital Adequacy Regulation adopted after the
Closing Date, affects or would affect the amount of capital required or expected
to be maintained by such Lender or such Issuing Lender or any corporation
controlling such Lender or such Issuing Lender and (taking into consideration
such Lender's, such Issuing Lender's or such corporation's policies with respect
to capital adequacy and such Lender's, such Issuing Lender's or corporation's
desired return on capital) determines that the amount of such capital is (or is
required to be) increased as a consequence of any of its Commitments, Loans,
participations in Letters of Credit, or obligations under this Agreement, then,
within ten days of demand by such Lender or such Issuing Lender (with a copy to
the Administrative Agent), the Borrower shall be liable for and shall
immediately pay to such Lender or such Issuing Lender, from time to time as
specified by such Lender or such Issuing Lender, additional amounts sufficient
to compensate such Lender or such Issuing Lender for such increase.
4.04 Funding Losses. The Borrower agrees to reimburse each Lender
and to hold each Lender harmless from any loss, cost or expense (other than loss
of margin) which such Lender may sustain or incur as a consequence of:
(a) any failure by the Borrower to make any payment of principal of
any Eurodollar Loan (including payments made after any acceleration
thereof) when due;
(b) any failure by the Borrower to borrow a Eurodollar Loan or
continue a Eurodollar Loan or convert a Base Rate Loan to a Eurodollar Loan
after the Borrower has given (or is deemed to have given) a Notice of
Borrowing or a Notice of Conversion/ Continuation, as the case may be;
(c) any failure by the Borrower to make any prepayment of a
Eurodollar Loan after the Borrower has given a notice in accordance with
Section 2.06; or
(d) any payment or prepayment (including pursuant to Section 2.07,
Section 2.08 or after acceleration thereof) of a Eurodollar Loan for any
reason whatsoever on a day which is not the last day of the Interest Period
with respect thereto;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain any Eurodollar Loan hereunder or from fees
payable to terminate the deposits from which such funds were obtained.
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4.05 Inability to Determine Rates. Notwithstanding any provisions
herein to the contrary, if, in relation to any proposed Eurodollar Loan, (a) the
Administrative Agent shall have determined (which determination shall be
conclusive and binding upon all parties hereto) that by reason of circumstances
affecting the interbank markets adequate and fair means do not exist for
ascertaining the Eurodollar Rate to be applicable to such Eurodollar Loan or (b)
the Administrative Agent shall have received notice from the Required Lenders
that the Eurodollar Rate determined or to be determined for any Interest Period
will not adequately and fairly reflect the cost to such Lenders (as conclusively
certified by such Lenders) of making or maintaining their affected Eurodollar
Loans during such affected Interest Period, then, the obligation of the Lenders
to make, continue or maintain Eurodollar Loans or to convert Base Rate Loans
into Eurodollar Loans shall be suspended until (x) in the case of (a) above, the
Administrative Agent determines adequate and fair means for ascertaining the
Eurodollar Rate to be applicable to such Eurodollar Loan exists or (y) in the
case of (b) above, the Administrative Agent upon the instruction of the Required
Lenders revokes such notice in writing. If, notwithstanding the provisions of
this Section 4.05, any Lenders has made available to the Borrower its Commitment
Percentage of any such proposed Eurodollar Loan, then such Eurodollar Loan shall
immediately be converted into a Base Rate Loan.
4.06 Increased Costs on Eurodollar Loans. At any time that any
Lenders shall incur increased costs or reductions in the amounts received or
receivable hereunder with respect to any Eurodollar Loans (other than any
increased cost or reduction in the amount received or receivable resulting from
the imposition of or a change in the rate of net income taxes or similar
charges) because of (x) any change since the date of this Agreement in any
Requirement of Law or governmental guideline, order or request (whether or not
having the force of law), or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule, regulation,
guideline, order or request (such as, for example, but not limited to, a change
in official reserve requirements, but, in all events, excluding reserves
required under Regulation D to the extent included in the computation of the
Eurodollar Rate) and/or (y) other circumstances affecting such Lender, the
interbank Eurodollar market or the position of such Lender in such market, then
the Borrower shall pay to each such Lender, within ten days after such Lender's
written demand therefor (accompanied by the written notice referred to in
Section 4.07 below), such additional amounts (in the form of an increased rate
of, or a different method of calculating, interest or otherwise as such Lender
in its sole discretion shall determine) as shall be required to compensate such
Lender for such increased costs or reductions in amounts received or receivable
hereunder.
4.07 Certificates of Lenders. Any Lender, the Swingline Lender or
any Issuing Lender claiming reimbursement or compensation pursuant to this
Article IV shall deliver to the Borrower (with a copy to the Administrative
Agent) a certificate setting forth in reasonable detail the amount payable to
such Person hereunder and such certificate shall be conclusive and binding on
the Borrower in the absence of manifest error. In determining any amounts
payable under Section 4.03(b), each Lender or each Issuing Lender, as the case
may be, shall act reasonably and in good faith and will use averaging and
attribution methods which are reasonable.
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4.08 Change of Lending Office, Replacement Lender, etc. (a) Each
Lender agrees that upon the occurrence of an event giving rise to the operation
of Section 4.01, 4.02, 4.03 or 4.06 with respect to such Lender, it will if so
requested by the Borrower, use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to designate a different Lending
Office for any Loans affected by such event with the object of avoiding the
consequence of the event giving rise to the operation of such section; provided,
however, that such designation would not, in the sole judgment of such Lender,
be otherwise disadvantageous to such Lender. Nothing in this Section 4.08(a)
shall affect or postpone any of the obligations of the Borrower or the right of
any Lender provided in Section 4.01, 4.02, 4.03 or 4.06.
(b) Notwithstanding anything to the contrary contained herein or in
any other Loan Document, (x) upon the occurrence of any event that obligates the
Borrower to pay any amount under Section 4.01 or giving rise to the operation of
Section 4.02, 4.03 or 4.06 with respect to such Lender, (y) if any Lender
becomes a Defaulting Lender or (z) as provided in Section 12.01(b) in the case
of certain refusals by a Lender to consent to certain proposed changes, waivers,
discharges or terminations with respect to this Agreement which have been
approved by the Required Lenders, the Borrower shall have the right, if no
Default or Event of Default then exists or will exist immediately after giving
effect to the respective replacement, to replace such Lender (the "Replaced
Lender") by designating another Non-Defaulting Lender or an Eligible Assignee
(such Non-Defaulting Lender or Eligible Assignee being herein called a
"Replacement Lender") to which such Replaced Lender shall assign, in accordance
with Section 12.07 and without recourse to or warranty by, or expense to, such
Replaced Lender, all of the rights and obligations of such Replaced Lender
hereunder and, upon such assignment, such Replaced Lender shall no longer be a
party hereto or have any rights hereunder (except for such rights as survive
repayment of the Loans), and such Replacement Lender shall succeed to the rights
and obligations of such Replaced Lender hereunder. The Borrower shall pay to
such Replaced Lender in same day funds on the date of replacement all interest,
fees and other amounts then due and owing such Replaced Lender by the Borrower
hereunder to and including the date of replacement, including, without
limitation, costs incurred under Section 4.01, 4.02, 4.03 or 4.06.
(c) Notwithstanding anything to the contrary contained in Section
4.01, 4.02, 4.03 or 4.06, unless a Lender gives notice to the Borrower that the
Borrower is obligated to pay an amount under any such Section within 180 days
after the later of (x) the date such Lender incurs the respective increased
costs, loss, expense or liability, reduction in amounts received or receivable
or reduction in return on capital or (y) the date such Lender has actual
knowledge of its incurrence of the respective increased costs, loss, expense or
liability, reductions in amounts received or receivable or reduction in return
on capital, then such Lender shall only be entitled to be compensated for such
amount by the Borrower pursuant to said Section 4.01, 4.02, 4.03 or 4.06, as the
case may be, to the extent the respective increased costs, loss, expense or
liability, reduction in amounts received or receivable or reduction in return on
capital are incurred or suffered on or after the date which occurs 180 days
prior to such Lender giving such notice to the Borrower as provided above that
the Borrower is obligated to pay the respective amounts pursuant to said Section
4.01, 4.02, 4.03 or 4.06, as the case may be. This paragraph (c) shall
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have no applicability to any Section of this Agreement other than said Section
4.01, 4.02, 4.03 or 4.06.
4.09 Survival. The agreements and obligations of the Borrower in
this Article IV shall survive the payment of all other Obligations.
ARTICLE V.
CONDITIONS PRECEDENT
--------------------
5.01 Conditions to Loans and Letters of Credit on the Closing Date.
The occurrence of the Closing Date, the obligation of each Lender to make Loans
hereunder and the obligation of each Issuing Lender to issue Letters of Credit
on the Closing Date is subject to the condition that the Administrative Agent
shall be reasonably satisfied that the following conditions have been satisfied
or waived in writing by the Lenders on or before the Closing Date and, to the
extent applicable, shall have received on or before the date for making such
Loans and/or issuing such Letters of Credit all of the following, in form and
substance reasonably satisfactory to the Administrative Agent and each Lender
and (except for the instruments or documents representing Pledged Securities) in
sufficient copies for each Lender:
(a) Credit Agreement. This Agreement executed by Holdings, the
Borrower, the Administrative Agent, each Issuing Lender, the Swingline
Lender and each of the Lenders (or, in the case of any party as to which an
executed counterpart shall not have been received, receipt by the
Administrative Agent in form satisfactory to it of facsimile or other
written confirmation from such party of execution of a counterpart hereof
by such party).
(b) Resolutions; Incumbency. (i) Copies of the resolutions of the
Board of Directors of the Borrower approving and authorizing the execution,
delivery and performance by the Borrower of this Agreement and the other
Loan Documents to be delivered by the Borrower, and authorizing the
borrowing of the Loans and the issuance of the Letters of Credit, certified
as of the Closing Date by the Secretary or an Assistant Secretary of the
Borrower;
(ii) Copies of the resolutions of the Board of Directors of Holdings
approving and authorizing the execution, delivery and performance by
Holdings of this Agreement (including the guaranty of the Obligations of
the Borrower) and the other Transaction Documents to be delivered by
Holdings hereunder, certified by the Secretary or an Assistant Secretary of
Holdings;
(iii) Copies of the resolutions of the Board of Directors of each
Subsidiary Guarantor (if any) approving and authorizing the execution,
delivery and performance by such Subsidiary Guarantor of the Subsidiary
Guaranty, the Pledge Agreement, the Security Agreement and the other Loan
Documents to be delivered by such Subsidiary
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Guarantor, certified by the Secretary or an Assistant Secretary of such
Subsidiary Guarantor; and
(iv) Certificates of the Secretary or Assistant Secretary of
Holdings, the Borrower and each Subsidiary Guarantor (if any) certifying
the names and true signatures of the officers of Holdings, the Borrower and
such Subsidiary Guarantor authorized to execute, deliver and perform, as
applicable, this Agreement and all other Loan Documents, notices, requests
and other communications to be delivered hereunder or thereunder.
(c) Articles of Incorporation; By-laws and Good Standing. Each of the
following documents:
(i) the articles or certificate of incorporation (or equivalent
organizational documents) of Holdings, the Borrower and each
Subsidiary Guarantor (if any) as in effect on the Closing Date,
certified by the Secretary of State (or similar, applicable
Governmental Authority) of the State of such Credit Party's
organization as of a recent date and by the Secretary or Assistant
Secretary of Holdings, the Borrower and such Subsidiary Guarantor as
of the Closing Date, and the bylaws (or equivalent organizational
documents) of Holdings, the Borrower and such Subsidiary Guarantor as
in effect on the Closing Date, certified by the Secretary or Assistant
Secretary of Holdings, the Borrower and such Subsidiary Guarantor as
of the Closing Date; and
(ii) a good standing certificate as of a recent date for
Holdings, the Borrower and each Subsidiary Guarantor (if any) from the
Secretary of State of the State of such Credit Party's organization
and each state where Holdings, the Borrower and such Subsidiary
Guarantor is qualified to do business as a foreign corporation as of a
recent date; and
(iii) a bring-down certificate, to the extent reasonably
available, of Holdings, the Borrower and each Subsidiary Guarantor (if
any) from the Secretary of State of the State of such Credit Party's
organization, dated the Closing Date.
(d) Subsidiary Guaranty. The Subsidiary Guaranty, duly executed by
each Subsidiary Guarantor (if any).
(e) Pledge Agreement. (i) The Pledge Agreement, duly executed by
Holdings, the Borrower and each Subsidiary Guarantor (if any);
(ii) all certificated Pledged Securities (x) endorsed in blank in
the case of promissory notes representing Pledged Securities and (y)
together with an undated stock power executed in blank in the case of
capital stock representing Pledged Securities; and
(iii) with respect to Pledged Securities, if any, consisting of book-
entry shares, evidence that all actions described in the Pledge Agreement
which are necessary to create
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and perfect the security interests pursuant to the Pledge Agreement in
accordance with the New York UCC have been taken.
(f) Security Agreement. (i) The Security Agreement, duly executed
by each Credit Party;
(ii) proper financing statements (Form UCC-1 or the equivalent)
fully executed for filing under the UCC or other appropriate filing offices
of each jurisdiction as may be necessary or, in the reasonable opinion of
the Administrative Agent, desirable to perfect the security interests
purported to be created by the Security Agreement; and
(iii) certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, listing all effective financing statements
that name any Credit Party or any of its Subsidiaries as debtor and that
are filed in the jurisdictions referred to in clause (ii) above, together
with copies of such other financing statements that name any Credit Party
or any of its Subsidiaries as debtor (none of which shall cover the
Collateral except to the extent evidencing Permitted Liens or in respect of
which the Administrative Agent shall have received Form UCC-3 termination
statements or such other termination statements as shall be required by
local law fully executed for filing).
(g) Mortgages; Title Insurance; Survey, etc. (i) Fully executed
counterparts of Mortgages, in form and substance reasonably satisfactory to
the Administrative Agent, which Mortgages shall cover the Mortgaged
Properties owned or leased by the Credit Parties on the Closing Date as
designated on Schedule 6.09, together with evidence that counterparts of
such Mortgages have been delivered to the title insurance company insuring
the Lien of such Mortgages for recording in all places to the extent
necessary or, in the reasonable opinion of the Administrative Agent,
desirable, to effectively create a valid and enforceable first priority
mortgage lien (subject to Permitted Liens in respect thereof) on each such
Mortgaged Property in favor of the Collateral Agent (or such other trustee
as may be required or desired under local law) for the benefit of the
Secured Creditors;
(ii) a mortgagee title insurance policy (or a binding commitment
with respect thereto) on each such Mortgaged Property (the "Mortgage
Policies") issued by a title insurer reasonably satisfactory to the
Administrative Agent in amounts satisfactory to the Administrative Agent
assuring the Administrative Agent that the Mortgages on such Mortgaged
Properties are valid and enforceable first priority mortgage liens on the
respective Mortgaged Properties, free and clear of all defects and
encumbrances except Permitted Encumbrances and such Mortgage Policies shall
otherwise be in form and substance reasonably satisfactory to the
Administrative Agent, and shall include, as appropriate, an endorsement for
future advances under this Agreement and shall not include an exception for
mechanics' liens, shall provide for affirmative insurance and such
reinsurance as the Administrative Agent may reasonably request and shall
provide for any other matter that the Administrative Agent may reasonably
request; and
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(iii) a survey, in form and substance reasonably satisfactory to the
Administrative Agent of each Mortgaged Property, certified by a licensed
professional surveyor reasonably satisfactory to the Administrative Agent.
(h) Legal Opinions. (i) An opinion of Kirkland & Ellis, counsel to
Holdings, the Borrower and the Subsidiary Guarantors (if any), addressed to
the Administrative Agent, the Collateral Agent and the Lenders, containing
opinions substantially in the form of Exhibit H and as to such other
matters as the Administrative Agent may reasonably request;
(ii) an opinion of White & Case LLP, special counsel to the
Administrative Agent and the Lenders, containing opinions substantially in
the form of Exhibit I;
(iii) an opinion of Palmer & Dodge LLP, local Massachusetts counsel
to the Administrative Agent, addressed to the Administrative Agent, the
Collateral Agent and the Lenders;
(iv) an opinion of Maynard, Cooper & Gale, P.C., local Alabama
counsel to the Administrative Agent, addressed to the Administrative Agent,
the Collateral Agent and the Lenders; and
(v) an opinion of Moore & Van Allen, PLLC, local North Carolina
counsel to the Administrative Agent, addressed to the Administrative Agent
and the Lenders.
(i) Payment of Fees and Expenses. Evidence that all fees, costs and
expenses (including Attorney Costs of the Administrative Agent) payable by
the Borrower on or before the Closing Date have been paid to the extent
then invoiced.
(j) Certificates. (i) Certificates signed by a Responsible Officer
of Holdings and the Borrower, dated as of the Closing Date stating that:
(A) the representations and warranties of Holdings and the
Borrower contained in Article VI and in the other Loan Documents to
which they are party are true and correct in all material respects on
and as of such date, as though made on and as of such date (except to
the extent such representations and warranties expressly relate to an
earlier date, in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date);
(B) no Default or Event of Default exists or would result from
any Borrowing on the Closing Date; and
(C) the conditions set forth in paragraphs (l), (m), (n) and
(o) of this Section 5.01 have been satisfied; and
(ii) Certificates signed by a Responsible Officer of each of the
Subsidiary Guarantors (if any), dated as of the Closing Date, stating that
the representations and war-
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ranties of such Subsidiary Guarantor contained in the Subsidiary Guaranty,
the Pledge Agreement and the Security Agreement are true and correct in all
material respects on and as of such date, as though made on and as of such
date (except to the extent such representations and warranties expressly
relate to an earlier date, in which case such representations and
warranties shall be true and correct in all material respects as of such
earlier date).
(k) Solvency Opinion. A solvency opinion issued by Valuation Research
Corporation.
(l) Transaction.
(i) The Transaction shall have been consummated in all material
respects in accordance with the Transaction Documents and all
applicable laws, and each of the conditions precedent to the
consummation of the Transaction shall have been satisfied and not
waived except with the consent of the Administrative Agent and the
Required Lenders;
(ii) Holdings shall have received gross cash proceeds of at least
(x) $20,000,000 from the issuance of Holdings Common Stock (of which
approximately $2,880,000 may be in the form of "roll-over" equity
(including options) by the existing shareholders of Holdings) and (y)
$30,000,000 from the issuance of Holdings Preferred Stock (of which
approximately $4,320,000 may be in the form of roll-over equity
(including options) by the existing shareholders of Holdings) ;
(iii) Holdings shall have received gross cash proceeds of at
least $25,000,000 from the issuance of Holdings' Junior Subordinated
Notes;
(iv) the creditors in respect of the Indebtedness to be
Refinanced shall have terminated and released all security interests
and Liens on the assets owned by Holdings and its Subsidiaries and all
guaranties in respect thereof, and the Administrative Agent shall have
received such releases of security interests in and Liens on the
assets owned by Holdings and its Subsidiaries as may have been
requested by the Administrative Agent;
(v) the Borrower shall have received $150,000,000 of gross cash
proceeds from the issuance of a like principal amount of Borrower
Senior Subordinated Notes; and
(vi) the Administrative Agent shall have received true and
correct copies of all Transaction Documents.
(m) Adverse Change. Since April 30, 1998, nothing shall have occurred
(and neither the Administrative Agent nor the Lenders shall have become
aware of any facts or conditions not previously known) which the
Administrative Agent or the Required
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Lenders shall reasonably determine has had, or could reasonably be expected
to have, a Material Adverse Effect.
(n) Governmental and Third Party Approvals. All governmental and
material third party approvals and consents (including the consent of BASF
Company) necessary in connection with the Transaction and the transactions
contemplated by this Agreement and the other Transaction Documents shall
have been obtained and be in full force and effect, and all applicable
waiting periods shall have expired without any action being taken or
threatened by any competent authority which would restrain, prevent or
otherwise impose materially adverse conditions on the Transaction or the
transactions contemplated by this Agreement or the other Transaction
Documents. Additionally, there shall not exist any judgment, order,
injunction or other restraint issued or filed or a hearing seeking
injunctive relief or other restraint pending or notified prohibiting or
imposing materially adverse conditions upon, or materially delaying, or
making economically unfeasible, the consummation of the Transaction or the
transactions contemplated by this Agreement or the other Transaction
Documents.
(o) Litigation. There shall be no actions, suits or proceedings
pending or threatened (i) with respect to the Transaction or the
transactions contemplated by this Agreement or the other Transaction
Documents or (ii) which the Administrative Agent or the Required Lenders
reasonably determine could reasonably be expected to have a (x) material
adverse effect on the Transaction or the transactions contemplated by this
Agreement or the other Transaction Documents or (y) a Material Adverse
Effect.
(p) Shareholders' Agreements; Management Agreements and Tax Sharing
Agreements. (i) All agreements entered into by Holdings or any of its
Subsidiaries governing the terms and relative rights of its capital stock
and any agreements entered into by shareholders relating to any such entity
with respect to its capital stock;
(ii) all management and consulting agreements entered into by
Holdings or any of its Subsidiaries (including the CHS Management
Agreement); and
(iii) all tax sharing, tax allocation and other similar agreements
entered into by Holdings or any of its Subsidiaries (including the Holdings
Tax Sharing Agreement).
(q) Financial Statements. (i) The Pro Forma Balance Sheet;
(ii) the Projections.
(r) Insurance. Evidence of insurance complying with the requirements
of Section 7.05 for the business and properties of Holdings and its
Subsidiaries.
5.02 Conditions to all Borrowings and the Issuance of any Letters of
Credit. The obligation of each Lender to make any Loan hereunder and the
obligation of the Issuing Lender to issue, renew or amend any Letter of Credit
is subject to the satisfaction of the following conditions precedent on the
relevant Borrowing Date or date of issuance, as the case may be:
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(a) Notice. The Administrative Agent shall have received a Notice of
Borrowing; or in the case of a Swingline Loan, the notice required under
Section 2.03(f); or in the case of any issuance of any Letter of Credit
(other than the Existing Letter of Credit in respect of its deemed issuance
on the Closing Date), the respective Issuing Lender and the Administrative
Agent shall have received a Letter of Credit Application, as required under
Section 3.02;
(b) Continuation of Representations and Warranties. The
representations and warranties contained in Article VI and in the other
Loan Documents shall be true and correct in all material respects on and as
of such Borrowing Date or such date of issuance (except to the extent such
representations and warranties expressly refer to an earlier date, in which
case they shall be true and correct in all material respects as of such
earlier date);
(c) No Existing Default. No Default or Event of Default shall exist
or shall result from such Borrowing or issuance of such Letter of Credit;
and
(d) No Material Adverse Effect. Since April 30, 1998, nothing shall
have occurred which, individually or in the aggregate, has had, or could
reasonably be expected to have, a Material Adverse Effect.
Each Notice of Borrowing, request for a Swingline Loan or Letter of
Credit Application submitted by the Borrower hereunder shall be deemed to
constitute a representation and warranty by each of Holdings and the Borrower
hereunder, as of the date of each such notice or application and as of the date
of each Borrowing that the applicable conditions in Section 5.01 (with respect
to such credit events to occur on the Closing Date) and in this Section 5.02
(with respect to credit events to occur on and after the Closing Date) are
satisfied.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
------------------------------
Each of Holdings and the Borrower represents and warrants with respect
to itself and its Subsidiaries to the Administrative Agent, each Issuing Lender
and each Lender as of the Closing Date and as of the date of each Borrowing of
Loans or issuance, renewal or amendment of each Letter of Credit that:
6.01 Existence and Power. Each of Holdings and the Borrower and each
of their respective Subsidiaries:
(a) is a corporation, partnership or limited liability company, as
the case may be, duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization;
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(b) has the power and authority and has or will have on or prior to
the date required to be obtained all governmental licenses, authorizations,
consents and approvals to execute, deliver and perform its obligations
under all of the Transaction Documents to which it is a party and has duly
executed and delivered each such Transaction Document, in each case other
than (i) immaterial third party authorizations, consents and approvals for
the Recapitalization and the Asset Contribution and (ii) filings necessary
to perfect the security interest in the Collateral under the Security
Agreement and the Mortgages (which filings, in the case of this clause
(ii), have been made to the extent that this representation and warranty is
made (or deemed made) after 10 days after the Closing Date);
(c) is duly qualified to do business as a foreign corporation and is
licensed and in good standing, under the laws of each jurisdiction where
its ownership, lease or operation of property or the nature or conduct of
its business requires such qualification or license except where the
failure so to qualify, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect; and
(d) is in compliance with all Requirements of Law, except to the
extent that the failure to do so, either individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
6.02 Authorization; No Contravention. The execution, delivery and
performance by each of Holdings, the Borrower and each other Credit Party of any
Transaction Document to which such Person is party have been duly authorized by
all necessary corporate, partnership or limited liability company action, as the
case may be, and do not and will not:
(a) contravene the terms of any of such Person's charter or by-laws
(or equivalent organizational documents);
(b) conflict with or result in any breach or contravention of, or the
creation or imposition of (or the obligation to create or impose) any Lien
(except pursuant to the Collateral Documents) under, any document
evidencing any material Contractual Obligation to which such Person is a
party or any order, injunction, writ or decree of any Governmental
Authority to which such Person or its property is subject; or
(c) violate any Requirement of Law.
6.03 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, Holdings or any
of its Subsidiaries of any Transaction Document to which any such Person is a
party, in each case other than (i) immaterial third party authorizations,
consents and approvals for the Recapitalization and the Asset Contribution, (ii)
filings with the Securities and Exchange Commission in connection with the
Exchange Offer and (iii) filings necessary to perfect the security interest in
the Collateral under the Security Agreement and the Mortgages (which filings
have been made to the extent that this representation and warranty is made (or
deemed made) after 10 days after the Closing Date).
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6.04 Binding Effect. This Agreement and each other Transaction
Document to which Holdings or any of its Subsidiaries is a party constitute the
legal, valid and binding obligations of Holdings and each of its Subsidiaries to
the extent such Person is a party thereto, enforceable against such Person in
accordance with their respective terms, except to the extent that enforceability
may be limited by applicable bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally or by equitable principles of
general applicability.
6.05 Litigation. There are no actions, suits, proceedings, claims or
disputes pending, or to the best knowledge of Holdings and the Borrower,
threatened at law, in equity, in arbitration or before any Governmental
Authority, against Holdings or any of its Subsidiaries or any of their
respective properties or assets which:
(a) purport to affect or pertain to this Agreement or any other Loan
Document; or
(b) either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
As of the Closing Date, no injunction, writ, temporary restraining order or
any order of any nature has been issued by any court or other Governmental
Authority purporting to enjoin or restrain the execution, delivery or
performance of this Agreement or any other Transaction Document, or directing
that any other transaction provided for herein not be consummated as herein
provided.
6.06 No Default. No Default or Event of Default exists or would
result from the incurring of any Obligations by Holdings, the Borrower or any
Subsidiary Guarantor. Neither Holdings nor any of its Subsidiaries is in
default under or with respect to any Contractual Obligation in any respect
which, either individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
6.07 ERISA Compliance. (a) Each Plan (and each related trust,
insurance contract or fund) is in material compliance with its terms and with
all applicable laws, including, without limitation, ERISA and the Code; each
Plan (and each related trust, if any) which is intended to be qualified under
Section 401(a) of the Code has received a determination letter from the Internal
Revenue Service to the effect that it meets the requirements of Sections 401(a)
and 501(a) of the Code; no Reportable Event has occurred; no Plan which is a
multiemployer plan (as defined in Section 4001(a)(3) of ERISA) is insolvent or
in reorganization; no Plan has an Unfunded Current Liability which, when added
to the aggregate amount of Unfunded Current Liabilities with respect to all
other Plans, exceeds $2,500,000; no Plan which is subject to Section 412 of the
Code or Section 302 of ERISA has an accumulated funding deficiency, within the
meaning of such sections of the Code or ERISA, or has applied for or received a
waiver of an accumulated funding deficiency or an extension of any amortization
period, within the meaning of Section 412 of the Code or Section 303 or 304 of
ERISA; all contributions required to be made with respect to a Plan have been
timely made; neither Holdings nor any Subsidiary of Holdings nor any ERISA
Affiliate has incurred any material liability (including any indirect,
contingent or secondary liability) to or on account of a Plan pursuant to
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or Section
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401(a)(29), 4971 or 4975 of the Code or expects to incur any such material
liability under any of the foregoing sections with respect to any Plan; no
condition exists which presents a material risk to Holdings or any Subsidiary of
Holdings or any ERISA Affiliate of incurring a material liability to or on
account of a Plan pursuant to the foregoing provisions of ERISA and the Code; no
proceedings have been instituted to terminate or appoint a trustee to administer
any Plan which is subject to Title IV of ERISA; no action, suit, proceeding,
hearing, audit or investigation with respect to the administration, operation or
the investment of assets of any Plan (other than routine claims for benefits) is
pending, expected or threatened; using actuarial assumptions and computation
methods consistent with Part 1 of subtitle E of Title IV of ERISA, the aggregate
liabilities of Holdings and its Subsidiaries and its ERISA Affiliates to all
Plans which are multiemployer plans (as defined in Section 4001(a)(3) of ERISA)
in the event of a complete withdrawal therefrom, as of the close of the most
recent fiscal year of each such Plan ended prior to the date of the most recent
Borrowing Date, would not exceed $2,500,000; each group health plan (as defined
in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) which covers or
has covered employees or former employees of Holdings, any Subsidiary of
Holdings, or any ERISA Affiliate has at all times been operated in material
compliance with the provisions of Part 6 of subtitle B of Title I of ERISA and
Section 4980B of the Code; no lien imposed under the Code or ERISA on the assets
of Holdings or any Subsidiary of Holdings or any ERISA Affiliate exists or is
likely to arise on account of any Plan; and Holdings and its Subsidiaries do not
maintain or contribute to any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) which provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or any plan
the obligations with respect to which, either individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(b) Each Foreign Pension Plan has been maintained (and all required
contributions have been made) in substantial compliance with its terms and with
the requirements of any and all applicable laws, statutes, rules, regulations
and orders and has been maintained, where required, in good standing with
applicable regulatory authorities. Neither Holdings nor any of its Subsidiaries
has incurred any material obligation in connection with the termination of or
withdrawal from any Foreign Pension Plan. The present value of the accrued
benefit liabilities (whether or not vested) under each Foreign Pension Plan,
determined as of the end of Holdings' most recently ended fiscal year on the
basis of actuarial assumptions, each of which is reasonable, did not exceed the
current value of the assets of such Foreign Pension Plan allocable to such
benefit liabilities.
6.08 Use of Proceeds; Margin Regulations. The proceeds of the Loans
are intended to be and shall be used solely for the purposes set forth in and
permitted by Section 7.14.
6.09 Title to Properties, etc. Holdings and each of its Subsidiaries
have good record and marketable title in fee simple to, or valid leasehold
interests in, all material property owned or leased by them, free and clear of
all Liens other than Permitted Liens. Schedule 6.09 contains a true and
complete list of each parcel of Real Property owned or leased by Holdings or any
of its Subsidiaries on the Closing Date, and the type of interest therein held
by Holdings or such Subsidiary.
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6.10 Taxes. Each of Holdings and its Subsidiaries has filed all
federal and state income tax returns and all other material tax returns,
domestic and foreign, required to be filed by it and has paid all taxes and
assessments payable by it which have become due, except for immaterial taxes and
taxes contested in good faith and adequately disclosed and fully provided for on
the financial statements of Holdings and its Subsidiaries in accordance with
GAAP. Holdings and each of its Subsidiaries have at all times paid, or have
provided adequate reserves (in the good faith judgment of the management of
Holdings) for the payment of, all federal, state, local and foreign income taxes
(other than immaterial taxes) applicable for all prior fiscal years and for the
current fiscal year to date. There is no material action, suit, proceeding,
investigation, audit or claim now pending or, to the best knowledge of Holdings
and the Borrower, threatened by any authority regarding any taxes relating to
Holdings or any of its Subsidiaries. As of the Closing Date, neither Holdings
nor any of its Subsidiaries has entered into an agreement or waiver or been
requested to enter into an agreement or waiver extending any statute of
limitations relating to the payment or collection of taxes of Holdings or any of
its Subsidiaries, or is aware of any circumstances that would cause the taxable
years or other taxable periods of Holdings or any of its Subsidiaries not to be
subject to the normally applicable statute of limitations.
6.11 Financial Statements. All balance sheets, statements of
operations and other financial data of Holdings and its Subsidiaries which have
been or shall hereafter be furnished to the Administrative Agent and the Lenders
for the purposes of or in connection with this Agreement or any transaction
contemplated hereby have been prepared in accordance with GAAP and do and will
present fairly, in all material respects, the financial condition of Holdings
and its Subsidiaries as of the dates thereof and the results of their operations
for the period(s) covered thereby. The Projections which have been furnished by
(or on behalf of) Holdings pursuant to Section 5.01(q)(ii) represent
management's good faith estimates of future performance based upon historical
financial information and reasonable assumptions of management, it being
recognized that such Projections are not to be viewed as facts and do not
constitute a warranty as to the future performance of Holdings or its
Subsidiaries and that actual results may vary from projected results and such
variances may be material.
6.12 Securities Law, etc.; Compliance. All transactions contemplated
by this Agreement and the other Loan Documents comply with (x) Regulations T, U
and X of the Federal Reserve Board and (y) all other applicable laws and any
rules and regulations thereunder.
6.13 Governmental Regulation. Neither Holdings nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940 or
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.
6.14 Labor Controversies. There are no labor controversies pending
or, to the best of Holdings' and the Borrower's knowledge, threatened against it
or any of their respective
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Subsidiaries which, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
6.15 Subsidiaries. Holdings has no Subsidiaries, except, on the
Closing Date, those Subsidiaries which are identified in Schedule 6.15 and,
thereafter, those Subsidiaries permitted to be formed or acquired in compliance
with the terms of this Agreement.
6.16 Patents, Trademarks, etc. Each of Holdings and each of its
Subsidiaries owns (or is licensed to use) and possesses all such patents, patent
rights, trademarks, trademark rights, trade names, trade name rights, service
marks, service mark rights, copyrights, permits, licenses and authorizations as
it considers necessary for the conduct of the business of Holdings and its
Subsidiaries as now conducted without, individually or in the aggregate, any
infringement upon rights of other Persons which could reasonably be expected to
have a Material Adverse Effect.
6.17 Accuracy of Information. All factual information (taken as a
whole) heretofore or contemporaneously herewith furnished by or on behalf of
Holdings or any of its Subsidiaries in writing to the Administrative Agent or
any Lender for purposes of or in connection with this Agreement or any
transaction contemplated hereby and all other such factual information (taken as
a whole) hereafter furnished by or on behalf of Holdings or any of its
Subsidiaries to the Administrative Agent or any Lender when taken as a whole
will be true and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state any
material fact necessary to make such information (taken as whole), in the light
of the circumstances existing at the time such information was delivered, not
misleading in any material respect, it being understood that any representation
or warranty in this Section 6.17 as to the Projections is qualified to the
extent set forth in Section 6.11.
6.18 Hazardous Materials. Neither Holdings nor any of its
Subsidiaries have caused or permitted any Hazardous Material to be disposed of
or otherwise released, either from, on or under any property currently or
formerly legally or beneficially owned, leased or operated by, or otherwise used
by, Holdings or any of its Subsidiaries, which, either individually or in the
aggregate, has or could reasonably be expected to have a Material Adverse
Effect. No such property has (or, with respect to the period of time prior to
which Holdings or any of its Subsidiaries legally or beneficially owned, leased
or operated such property, to the knowledge of Holdings and Borrower, no such
property has) ever been used as a dump site or storage site for any Hazardous
Materials or otherwise contains or contained Hazardous Materials, which, either
individually or in the aggregate, has or could reasonably be expected to have a
Material Adverse Effect. The failure, if any, of Holdings or any of its
Subsidiaries, in connection with their current and former properties or their
businesses, to be in compliance with any Environmental Law or to obtain any
permit, certificate, license, approval and other authorization under such
Environmental Laws has not had, nor is reasonably expected to have, either
individually or in the aggregate, a Material Adverse Effect. Neither Holdings
nor any of its Subsidiaries have entered into, have agreed to or are subject to
any judgment, decree or order or other similar requirement of any Governmental
Authority under any Environmental Law, including without limitation,
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relating to compliance or to investigation, cleanup, remediation or removal of
Hazardous Materials, which, either individually or in the aggregate, has or
could reasonably be expected to have a Material Adverse Effect. Neither Holdings
nor any of its Subsidiaries have contractually assumed any liabilities or
obligations under any Environmental Law which, either individually or in the
aggregate, have or could reasonably be expected to have a Material Adverse
Effect. There are no facts or circumstances which exist that could reasonably be
expected to give rise to liabilities with respect to Hazardous Materials or any
Environmental Law, which, either individually or in the aggregate, have or could
reasonably be expected to have a Material Adverse Effect.
6.19 Collateral Documents. (i) The provisions of the Pledge
Agreement will be, on and after the Closing Date, effective to create, in favor
of the Collateral Agent for the benefit of the Lenders and the Collateral Agent,
legal, valid and enforceable security interests in all of the Collateral
described therein, and upon the taking of and continued possession of such
Collateral by the Collateral Agent on or prior to the Closing Date, the Pledge
Agreement shall constitute, as of and after the Closing Date, a fully perfected
security interest in such Collateral superior in right to any other security
interests, existing or future, which any Person may have against such
Collateral, except to the extent, if any, otherwise provided in the Pledge
Agreement;
(ii) the provisions of the Security Agreement are effective to create
in favor of the Collateral Agent for the benefit of the Lenders and the
Collateral Agent, a legal, valid and enforceable security interest in all
right, title and interest in all of the Collateral described therein, and
the Security Agreement, upon the filing of Form UCC-1 financing statements
or the appropriate equivalent (which filing, if this representation is
being made more than 10 days after the Closing Date, has been made),
create a fully perfected first priority lien on, and security interest in,
all right, title and interest in all of the Collateral described in the
Security Agreement to the extent that such security interests can be
perfected by the filing of a financing statement under the UCC or in which
a filing may be made in the United States Patent and Trademark Office or in
the United States Copyright Office, subject to no other Liens other than
Permitted Liens.
(iii) the Mortgages create, for the obligations purported to be
secured thereby, a valid and enforceable perfected security interest in and
mortgage lien on the respective Mortgaged Properties covered thereby in
favor of the Collateral Agent (or such other trustee as may be required or
desired under local law) for the benefit of the Lenders, superior to and
prior to the rights of all third Persons (except that the security interest
and mortgage lien created in the Mortgaged Properties may be subject to the
Permitted Encumbrances related thereto) and subject to no other Liens
(other than Permitted Liens).
6.20 Solvency. On and as of the Closing Date and after giving effect
to the Transaction and to all Indebtedness being incurred, assumed or repaid and
Liens created by the Credit Parties in connection therewith (a) the sum of the
assets, at a fair valuation on a going-concern basis, of each of the Borrower on
a stand-alone basis and of Holdings and its Subsidiaries taken as a whole will
exceed its debts; (b) each of the Borrower on a stand-alone basis and Holdings
and its Subsidiaries taken as a whole has not incurred and does not intend to
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incur, and does not believe that it will incur, debts beyond its ability to pay
such debts as such debts mature; and (c) each of the Borrower on a stand alone
basis and Holdings and its Subsidiaries taken as a whole will have sufficient
capital with which to conduct its business. For purposes of this Section 6.20,
"debt" means any liability on a claim, and "claim" means (i) right to payment,
whether or not such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured, or unsecured or (ii) right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether or not such right to
an equitable remedy is reduced to judgment, fixed, contingent, matured,
unmatured, disputed, undisputed, secured or unsecured. The amount of contingent
liabilities at any time shall be computed as the amount that, in the light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
6.21 Representations and Warranties in the other Documents. All
representations and warranties made by any Credit Party in the Recapitalization
Documents and in the Borrower Senior Subordinated Note Documents were true and
correct in all material respects at the time as of which such representations
and warranties were made (or deemed made) and shall be true and correct in all
material respects as of Closing Date as if such representations and warranties
were made on and as of such date, unless stated to relate to a specific earlier
date, in which case such representations and warranties shall be true and
correct in all material respects as of such earlier date.
6.22 Capitalization. (a) On the Closing Date and after giving
effect to the Transaction and the other transactions contemplated hereby, the
authorized capital stock of Holdings shall consist of (i) (x) 5,000,000 shares
of Class A common stock, $.01 par value per share, (y) 350,000 shares of Class B
common stock, $.01 par value per share, and (z) 600,000 shares of Class C common
stock, $.01 par value per share (collectively, "Holdings Common Stock"), and
(ii) 40,000 shares of preferred stock, $.01 par value per share ("Holdings
Preferred Stock"). All outstanding shares of capital stock of Holdings have
been duly and validly issued and are fully paid and non-assessable. Holdings
does not have outstanding any securities convertible into or exchangeable for
its capital stock or outstanding any rights to subscribe for or to purchase, or
any options for the purchase of, or any agreement providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to, its capital stock, except (i) for options to purchase
shares of Holdings' Common Stock which may be issued from time to time to
directors, officers and employees of Holdings or any of its Subsidiaries, (ii)
for shares of Holdings Preferred Stock which may be convertible into shares of
Holdings Common Stock, (iii) for warrants to purchase shares of Holdings Common
Stock which may be issued from time to time and (iv) as may be set forth in any
of the shareholders' agreements delivered pursuant to Section 5.01(p).
(b) On the Closing Date and after giving effect to the Transaction
and the other transactions contemplated hereby, the authorized capital stock of
the Borrower shall consist of 5,000 shares of common stock, $1.00 par value per
share, of which 1,000 shares shall be issued and outstanding and owned by
Holdings. All outstanding shares of capital stock of the Borrower have been
duly and validly issued, are fully paid and nonassessable. The Borrower
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does not have outstanding any securities convertible into or exchangeable for
its capital stock or outstanding any rights to subscribe for or to purchase, or
any options for the purchase of, or any agreement providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to, its capital stock.
6.23 Special Purpose Corporation. Holdings engages in no significant
business activities and, after giving effect to the Transaction, has no
significant assets (other than the capital stock of the Borrower, the capital
stock of Globe Elastic Thread, Ltd. (which is in the process of being
dissolved), immaterial assets used for the performance of those activities
permitted to be performed by Holdings pursuant to Section 8.14(b) and any
obligations held by it to the extent permitted by Section 8.05(vi)) or
liabilities (other than those liabilities incurred under this Agreement and
under the other Transaction Documents to which it is a party and those
liabilities permitted to be incurred by it under this Agreement).
6.24 Insurance. Schedule 6.24 sets forth a true and complete listing
of all insurance maintained by Holdings and its Subsidiaries as of the Closing
Date, and with the amounts insured (and any deductibles) set forth therein.
6.25 Subordination Provisions. (a) The subordination provisions
contained in the Borrower Senior Subordinated Notes and in other Borrower Senior
Subordinated Note Documents are enforceable against the Borrower, the Subsidiary
Guarantors and the holders of the Borrower Senior Subordinated Notes, and all
Obligations and Guaranteed Obligations (as defined herein and in the Subsidiary
Guaranty) are within the definition of "Senior Debt" or "Guarantor Senior Debt",
as the case may be, included in such subordination provisions.
(b) The subordination provisions contained in the Holdings Junior
Subordinated Notes are enforceable against Holdings and the holders of the
Holdings Junior Subordinated Notes and all Guaranteed Obligations are within the
definition of "Superior Debt" included in such subordination provisions.
6.26 Year 2000. Holdings and its Subsidiaries have reviewed the
areas within their business and operations which could be adversely affected by,
and have developed or are developing a program to address on a timely basis, the
risk that certain computer applications used by Holdings and its Subsidiaries
may be unable to recognize and perform properly date-sensitive functions
involving dates on, prior to and after December 31, 1999. Such risk will not
have a Material Adverse Effect.
ARTICLE VII.
AFFIRMATIVE COVENANTS
---------------------
Each of Holdings and the Borrower agrees with the Administrative Agent
and each Lender that, until all Commitments and Letters of Credit have
terminated and all
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Obligations (other than indemnities for which no request for payment has been
made) have been paid and performed in full:
7.01 Financial Statements. Each of Holdings and the Borrower shall
deliver to the Administrative Agent in form and detail reasonably satisfactory
to the Administrative Agent and the Required Lenders:
(a) as soon as available, but not later than 90 days after the end of
each fiscal year of Holdings, (i) a copy of the audited consolidated
balance sheet of Holdings and its Subsidiaries as at the end of such fiscal
year and the related audited consolidated statements of income or
operations, shareholders' equity and cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, and certified by Ernst & Young LLP or another nationally-
recognized independent public accounting firm reasonably acceptable to the
Administrative Agent, together with a report of such accounting firm
stating that such consolidated financial statements present fairly, in all
material respects, the financial position for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years (except
for changes agreed upon by Holdings and such auditors which are disclosed
and described in such statements) and in the course of its regular audit of
the financial statements of Holdings and its Subsidiaries, which audit was
conducted in accordance with generally accepted auditing standards, such
accounting firm obtained no knowledge of any Default or Event of Default
relating to accounting matters which has occurred and is continuing or, if
in the opinion of such accounting firm a Default or an Event of Default has
occurred and is continuing, a statement as to the nature thereof, and (ii)
management's discussion and analyses of the material operational and
financial developments during such fiscal year. The accountant's opinion
referred to above shall not be qualified or limited because of a restricted
or limited examination by such accountant of any material portion of the
records of Holdings or any of its Subsidiaries;
(b) as soon as available, but not later than 45 days after the end of
each of the first three fiscal quarters of each fiscal year of Holdings,
(i) a copy of the unaudited consolidated balance sheet of Holdings and its
Subsidiaries as of the end of such fiscal quarter and the related
consolidated statements of income or operations, shareholders' equity and
cash flows for the period commencing on the first day and ending on the
last day of such fiscal quarter and for the elapsed portion of the fiscal
year ended with the last day of such fiscal quarter, and certified by a
Responsible Officer of Holdings as being complete and correct and fairly
presenting in all material respects, in accordance with GAAP (subject to
normal year-end audit adjustments and the absence of footnote disclosure),
the financial position and the results of operations of Holdings and its
Subsidiaries, and (ii) management's discussion and analyses of the material
operational and financial developments during such fiscal quarter and for
the elapsed portion of the fiscal year ended with the last day of such
fiscal quarter;
(c) as soon as available, but not later than 45 days after the end of
each fiscal month of each fiscal year of Holdings (other than the last
fiscal month of any fiscal
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quarter), a copy of the unaudited consolidated balance sheet of Holdings
and its Subsidiaries as at the end of such fiscal month and the related
consolidated statements of income or operations and cash flows for such
fiscal month and for the elapsed portion of the fiscal year ended with the
last day of such fiscal month, in each case setting forth comparative
figures for the corresponding fiscal month in the prior fiscal year and
comparable budgeted figures for such fiscal month; and
(d) as soon as available, but not later than 30 days following the
first day of each fiscal year of Holdings, a budget (including budgeted
statements of income and sources and uses of cash and balance sheets)
prepared by Holdings for (i) each of the twelve months of such fiscal year
prepared in detail and (ii) such other budget information, if any, as
Holdings or the Borrower may prepare for its internal use or for any
Permitted Holder.
7.02 Certificates; Other Information. Holdings and the Borrower
shall furnish to the Administrative Agent and each Lender:
(a) concurrently with the delivery of the financial statements
referred to in Sections 7.01(a) and (b), a compliance certificate in the
form of Exhibit K, with such changes thereto as are satisfactory to the
Administrative Agent (each, a "Compliance Certificate");
(b) to the extent not previously delivered with respect to any
Adjustment Date, concurrently with the delivery of the financial statements
referred to in Sections 7.01(a) and (b), a Leverage Ratio Certificate duly
executed by a Responsible Officer of Holdings;
(c) promptly after Holdings' or any of its Subsidiaries' receipt
thereof, a copy of any "management letter" received from its certified
public accountants and management's response thereto;
(d) promptly after the same are sent, copies of all financial
statements and reports which Holdings sends to its shareholders generally;
and promptly after the same are filed, copies of all financial statements
and regular, periodical or special reports which Holdings or any of its
Subsidiaries may make to, or file with, the Securities and Exchange
Commission; and
(e) promptly, such additional business, financial and other
information with respect to Holdings or any of its Subsidiaries as the
Administrative Agent or any Lender may from time to time reasonably
request.
7.03 Notices. Holdings and the Borrower shall, promptly upon (and in
any event within five Business Days after) any Responsible Officer of Holdings
or the Borrower obtaining knowledge thereof, give notice (accompanied by a
reasonably detailed explanation with respect thereto) to the Administrative
Agent, the Issuing Lender and each Lender of:
(a) the occurrence of any Default or Event of Default;
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(b) any litigation, arbitration or governmental investigation or
proceeding which has been instituted or, to the knowledge of a Responsible
Officer of Holdings or the Borrower, is threatened against Holdings or any
of its Subsidiaries or to which any of their respective properties is
subject (i) which could reasonably be expected to result in a Material
Adverse Effect or (ii) relates to this Agreement, any other Transaction
Document, the Transaction, any Holdings Senior Discount Note Document or
any of the transactions contemplated hereby or thereby; and
(c) one or more of the following environmental matters, unless such
environmental matters could not, individually or when aggregated with all
other such environmental matters, be reasonably expected to have a Material
Adverse Effect:
(i) any pending or threatened Environmental Claim against
Holdings or any of its Subsidiaries or any real property owned, leased
or operated by Holdings or any of its Subsidiaries;
(ii) any condition or occurrence on or arising from any real
property owned, leased or operated by Holdings or any of its
Subsidiaries that (a) results in noncompliance by Holdings or any of
its Subsidiaries with any applicable Environmental Law or (b) could be
expected to form the basis of an Environmental Claim against Holdings
or any of its Subsidiaries or any such real property;
(iii) any condition or occurrence on any real property owned,
leased or operated by Holdings or any of its Subsidiaries that could
be expected to cause such real property to be subject to any
restrictions on the ownership, occupancy, use or transferability by
Holdings or any of its Subsidiaries of such real property under any
Environmental Law; and
(iv) the taking of any removal or remedial action in response
to the actual or alleged presence of any Hazardous Material on any
real property owned, leased or operated by Holdings or any of its
Subsidiaries as required by any Environmental Law or any governmental
or other administrative agency; provided, that in any event Holdings
shall deliver to the Administrative Agent and each Lender all notices
received by Holdings or any of its Subsidiaries from any government or
governmental agency under, or pursuant to, CERCLA which identify
Holdings or any of its Subsidiaries as potentially responsible parties
for remediation costs or which otherwise notify Holdings or any of its
Subsidiaries of potential liability under CERCLA.
(d) as soon as possible and, in any event, within ten (10) days after
any Responsible Officer of Holdings or the Borrower knows or has reason to
know of the occurrence of any of the following, Holdings will deliver to
the Administrative Agent a certificate of a Responsible Officer of Holdings
setting forth in reasonable detail information as to such occurrence and
the action, if any, that Holdings, such Subsidiary or such ERISA Affiliate
is required or proposes to take, together with any notices required or
pro-
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posed to be given to or filed with or by Holdings, the Subsidiary, the
ERISA Affiliate, the PBGC, a Plan participant or the Plan administrator
with respect thereto: that a Reportable Event has occurred (except to the
extent that Holdings has previously delivered to the Lenders a certificate
and notices (if any) concerning such event pursuant to the next clause
hereof); that a contributing sponsor (as defined in Section 4001(a)(13) of
ERISA) of a Plan subject to Title IV of ERISA is subject to the advance
reporting requirement of PBGC Regulation Section 4043.61 (without regard to
subparagraph (b)(1) thereof), and an event described in subsection .62,
.63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is
reasonably expected to occur with respect to such Plan within the following
30 days; that an accumulated funding deficiency, within the meaning of
Section 412 of the Code or Section 302 of ERISA, has been incurred or an
application may reasonably be expected to be or has been made for a waiver
or modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under
Section 412 of the Code or Section 303 or 304 of ERISA with respect to a
Plan; that any contribution required to be made with respect to a Plan or a
Foreign Pension Plan has not been timely made; that a Plan has been or may
reasonably be expected to be terminated, reorganized, partitioned or
declared insolvent under Title IV of ERISA; that a Plan has an Unfunded
Current Liability which, when added to the amount of Unfunded Current
Liabilities with respect to all other Plans, equals or exceeds $2,500,000;
that proceedings may be reasonably expected to be or have been instituted
to terminate or appoint a trustee to administer a Plan which is subject to
Title IV of ERISA; that a proceeding has been instituted pursuant to
Section 515 of ERISA to collect a delinquent contribution to a Plan; that
Holdings, any Subsidiary of Holdings or any ERISA Affiliate will or may
reasonably be expected to incur any material liability (including any
indirect, contingent, or secondary liability) to or on account of the
termination of or withdrawal from a Plan under Section 4062, 4063, 4064,
4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under Section
401(a)(29), 4971, 4975 or 4980 of the Code or Section 409 or 502(i) or
502(l) of ERISA or with respect to a group health plan (as defined in
Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section
4980B of the Code; or that Holdings or any Subsidiary of Holdings may incur
any material liability pursuant to any employee welfare benefit plan (as
defined in Section 3(1) of ERISA) with respect to providing benefits to
retired employees or other former employees (other than as required by
Section 601 of ERISA or Section 4980B of the Code) or any Plan or any
Foreign Pension Plan in addition to the liability that existed under the
terms of such Plan or Plans on the Closing Date. Upon request of the
Administrative Agent or any Lender, Holdings will deliver to the
Administrative Agent (i) a complete copy of the annual report (on Internal
Revenue Service Form 5500-series) of each Plan (including, to the extent
required, the related financial and actuarial statements and opinions and
other supporting statements, certifications, schedules and information)
required to be filed with the Internal Revenue Service and (ii) copies of
any records, documents or other information that must be furnished to the
PBGC with respect to any Plan pursuant to Section 4010 of ERISA. In
addition to any certificates or notices delivered to the Administrative
Agent pursuant to the first sentence hereof, upon request of the
Administrative Agent or any Lender, copies of annual reports and any
records, documents or other information required to be
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furnished to the PBGC, and any material notices received by Holdings, any
Subsidiary of Holdings or any ERISA Affiliate with respect to any Plan or
any Foreign Pension Plan shall be delivered to the Administrative Agent no
later than ten (10) days after the date such annual report has been filed
with the Internal Revenue Service or such records, documents and/or
information has been furnished to the PBGC or such notice has been received
by Holdings, the Subsidiary or the ERISA Affiliate, as applicable.
7.04 Books, Records and Inspections. Holdings shall, and shall cause
each of its Subsidiaries to, keep proper books of record and accounts in which
full, true and correct entries in conformity with GAAP and all requirements of
law shall be made of all dealings and transactions in relation to its business
and activities. Holdings shall, and shall cause each of its Subsidiaries to,
permit officers and designated representatives of the Administrative Agent or
any Lender to visit and inspect, under guidance of officers of Holdings or such
Subsidiary, any of the properties of Holdings or such Subsidiary and, under
guidance of officers of Holdings or such Subsidiary, to examine the books of
account of Holdings or such Subsidiary and discuss the affairs, finances and
accounts of Holdings or such Subsidiary with, and be advised as to the same by,
its and their officers and independent accountants, all upon reasonable prior
notice and at such reasonable times and intervals and to such reasonable extent
as the Administrative Agent or such Lender may reasonably request.
7.05 Maintenance of Property; Insurance. (a) Holdings shall, and
shall cause each of its Subsidiaries to, (i) keep all property necessary to the
business of Holdings and its Subsidiaries in reasonably good working order and
condition, ordinary wear and tear and damage by casualty excepted, (ii) maintain
insurance on all such property in at least such amounts and against at least
such risks as is consistent and in accordance with industry practice for
companies similarly situated owning similar properties in the same general areas
in which Holdings or any of its Subsidiaries operates, and (iii) furnish to the
Administrative Agent, on each date on which financial statements are delivered
pursuant to Section 7.01(a), full information as to the insurance carried.
(b) Holdings shall, and shall cause each of its Subsidiaries to, at
all times keep its property insured in favor of the Collateral Agent, and all
policies or certificates from an acceptable insurance broker (or certified
copies thereof) with respect to such insurance (and any other insurance
maintained by Holdings and/or such Subsidiaries) (i) shall be endorsed to the
Collateral Agent's satisfaction for the benefit of the Collateral Agent
(including, without limitation, by naming the Collateral Agent as loss payee
and/or additional insured), (ii) shall state that such insurance policies shall
not be canceled without at least 30 days' prior written notice thereof (or 10
days' prior written notice in the case of nonpayment of premium) by the
respective insurer to the Collateral Agent (or such shorter period of time as a
particular insurance company policy generally provides) and (iii) shall be
deposited with the Collateral Agent.
(c) If Holdings or any of its Subsidiaries shall fail to insure its
property in accordance with this Section 7.05, or if Holdings or any of its
Subsidiaries shall fail to so endorse and deposit all policies or certificates
with respect thereto, the Collateral Agent shall have the right (but shall be
under no obligation) to procure such insurance and Holdings and the Borrower
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agree to reimburse the Collateral Agent for all reasonable costs and expenses of
procuring such insurance.
7.06 Franchises. Holdings shall, and shall cause each of its
Subsidiaries to, do or cause to be done, all things necessary to preserve and
keep in full force and effect its existence and its material rights, franchises,
licenses and patents; provided, however, that nothing in this Section 7.06 shall
prevent (i) sales of assets and other transactions by Holdings or any of its
Subsidiaries in accordance with Section 8.02 or (ii) the withdrawal by Holdings
or any of its Subsidiaries of its qualification as a foreign corporation in any
jurisdiction where such withdrawal could not reasonably be expected to have a
Material Adverse Effect.
7.07 Compliance with Law. Holdings shall, and shall cause each of
its Subsidiaries to, comply with all Requirements of Law of any Governmental
Authority, except such noncompliances as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
7.08 Payment of Taxes. Holdings shall pay and discharge, and shall
cause each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which penalties attach
thereto, and all lawful claims for sums that have become due and payable which,
if unpaid, might become a Lien not otherwise permitted under Section 8.01(i);
provided, that neither Holdings nor any of its Subsidiaries shall be required to
pay any such tax, assessment, charge, levy or claim which is immaterial or is
being contested in good faith and by proper proceedings if it has maintained
adequate reserves with respect thereto in accordance with GAAP.
7.09 Contributions. Except for (i) equity contributions and proceeds
from the issuance of the Holdings' Junior Subordinated Notes in each case that
are either received on the Closing Date and used to effect the Recapitalization
or permitted to be used by Holdings as provided in Section 8.03(iv) or 8.11(v)
and (ii) proceeds from the issuance of the Holdings Senior Discount Notes that
are used by Holdings as provided in Section 8.11(vi), Holdings shall contribute
as a common equity contribution to the capital of the Borrower upon its receipt
thereof, any cash proceeds received by Holdings from any asset sale, any
incurrence of Indebtedness (other than Intercompany Loans made pursuant to
Section 8.05 (xv)), any Recovery Event, any sale or issuance of its equity, any
cash capital contributions received by Holdings or any tax refunds received by
Holdings.
7.10 End of Fiscal Years; Fiscal Quarters. Holdings shall, for
financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries', fiscal years to end on December 31 of each year and (ii) each of
its, and each of its Subsidiaries', fiscal quarters to end on March 31, June 30,
September 30 and December 31 of each year.
7.11 Cash Management System. Holdings shall maintain, and shall
cause each of its Subsidiaries to maintain, their cash management system on a
basis reasonably satisfactory to the Administrative Agent (although no daily
cash sweeps against outstanding Loans shall be required); provided, however, to
the extent that any Credit Party maintains any bank account
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(other than payroll accounts) with an institution other than the Administrative
Agent in which more than $1,000,000 is maintained at any time for three or more
consecutive Business Days, such Credit Party shall promptly notify the
Administrative Agent thereof, and to the extent requested by Bank of America (or
any successor Administrative Agent) or the Required Lenders, such Credit Party
shall cause such other institution to enter into lockbox arrangements with the
Collateral Agent on terms reasonably acceptable to Bank of America (or any
successor Administrative Agent).
7.12 Additional Security; Further Assurances. (a) Subject to Section
7.11, Holdings shall, and shall cause each of the other Credit Parties to,
grant to the Collateral Agent security interests and Mortgages in such assets
and properties of Holdings and the other Credit Parties as are not covered by
the original Security Documents, and as may be reasonably requested from time to
time by the Administrative Agent or the Required Lenders (collectively, the
"Additional Security Documents"); provided, however, that no such request for a
Mortgage on a parcel of Real Property may be made pursuant to this Section
7.12(a) unless such Real Property (or, in the case of a Leasehold, such Credit
Party's Leasehold interest) has a fair market value of at least $500,000. All
such security interests and Mortgages shall be granted pursuant to documentation
reasonably satisfactory in form and substance to the Administrative Agent and
shall constitute valid and enforceable perfected security interests and
Mortgages superior to and prior to the rights of all third Persons and subject
to no other Liens except for Permitted Liens. The Additional Security Documents
or instruments related thereto shall have been duly recorded or filed in such
manner and in such places as are required by law to establish, perfect, preserve
and protect the Liens in favor of the Collateral Agent required to be granted
pursuant to the Additional Security Documents and all taxes, fees and other
charges payable in connection therewith shall have been paid by Holdings and/or
its Subsidiaries in full.
(b) Holdings shall, and shall cause each of the other Credit Parties
to, at the expense of Holdings, make, execute, endorse, acknowledge, file and/or
deliver to the Collateral Agent from time to time such vouchers, invoices,
schedules, confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, real property surveys, Mortgage
Policies, reports and other assurances or instruments and take such further
steps relating to the Collateral covered by any of the Security Documents as the
Collateral Agent may reasonably require. Furthermore, Holdings will cause to be
delivered to the Collateral Agent such opinions of counsel, title insurance and
other related documents as may be reasonably requested by the Administrative
Agent to assure itself that this Section 7.12 has been complied with.
(c) Holdings agrees that each action required above by this Section
7.12 shall be completed as soon as possible, but in no event later than 90 days
after such action is either requested to be taken by the Administrative Agent or
the Required Lenders or required to be taken by Holdings and/or the other Credit
Parties pursuant to the terms of this Section 7.12; provided that, in no event
will Holdings or any of its Subsidiaries be required to take any action, other
than using its reasonable efforts, to obtain consents from third parties with
respect to its compliance with this Section 7.12.
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7.13 Foreign Subsidiaries Security. If following a change in the
relevant sections of the Code or the regulations, rules, rulings, notices or
other official pronouncements issued or promulgated thereunder, counsel for the
Borrower reasonably acceptable to the Administrative Agent does not within 30
days after a request from the Administrative Agent or the Required Lenders
deliver evidence, in form and substance mutually satisfactory to the
Administrative Agent and the Borrower, with respect to any Foreign Subsidiary
which has not already had all of its stock pledged pursuant to the Pledge
Agreement that (i) a pledge of 65% or more of the total combined voting power of
all classes of capital stock of such Foreign Subsidiary entitled to vote, (ii)
the entering into by such Foreign Subsidiary of a security agreement in
substantially the form of the Security Agreement and (iii) the entering into by
such Foreign Subsidiary of a guaranty in substantially the form of the
Subsidiary Guaranty, in any such case could reasonably be expected to cause the
undistributed earnings of such Foreign Subsidiary as determined for Federal
income tax purposes to be treated as a deemed dividend to such Foreign
Subsidiary's United States parent for Federal income tax purposes, then in the
case of a failure to deliver the evidence described in clause (i) above, that
portion of such Foreign Subsidiary's outstanding capital stock so issued by such
Foreign Subsidiary and not theretofore pledged pursuant to the Pledge Agreement
shall be pledged to the Collateral Agent for the benefit of the Lenders pursuant
to the Pledge Agreement (or another pledge agreement in substantially similar
form, if needed), and in the case of a failure to deliver the evidence described
in clause (ii) above, such Foreign Subsidiary shall execute and deliver the
Security Agreement (or another security agreement in substantially similar form,
if needed) and the Pledge Agreement (or another pledge in substantially similar
form, if needed), granting the Collateral Agent for the benefit of the Lenders a
security interest in all of such Foreign Subsidiary's assets and securing the
Obligations of the Borrower under the Loan Documents and, in the event the
Subsidiary Guaranty shall have been executed by such Foreign Subsidiary, the
obligations of such Foreign Subsidiary thereunder, and in the case of a failure
to deliver the evidence described in clause (iii) above, such Foreign Subsidiary
shall execute and deliver the Subsidiary Guaranty (or another guaranty in
substantially similar form, if needed), guaranteeing the Obligations of the
Borrower under the Loan Documents, in each case to the extent that the entering
into such Security Agreement or Subsidiary Guaranty is permitted by the laws of
the respective foreign jurisdiction and with all documents delivered pursuant to
this Section 7.13 to be in form and substance reasonably satisfactory to the
Administrative Agent.
7.14 Use of Proceeds; Margin Regulations. (a) All proceeds of the
Term Loans shall be used to consummate the Transaction and to pay fees and
expenses in connection therewith. All proceeds of the Revolving Loans shall be
used (i) in part, to consummate the Transaction and to pay fees and expenses in
connection therewith, in an aggregate amount not to exceed $8,500,000, and (ii)
for the working capital and general corporate purposes of the Borrower and its
Subsidiaries (including for Capital Expenditures and Permitted Acquisitions).
(b) The Borrower shall ensure that no part of any Loan or Letter of
Credit will be used to purchase or carry any Margin Stock or to extend credit
for the purpose of purchasing or carrying any Margin Stock or will violate or be
inconsistent with the provisions of Regulations T, U and X of the Federal
Reserve Board.
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7.15 Holdings Preferred Stock. Holdings shall pay all Dividends on
the Holdings Preferred Stock in additional shares of Holdings Preferred Stock
rather than in cash; provided that in lieu of issuing additional shares of
Holdings Preferred Stock as Dividends, Holdings may increase the liquidation
preference of the shares of the Holdings Preferred Stock in respect of which
such Dividends have accrued.
ARTICLE VIII.
NEGATIVE COVENANTS
------------------
Each of Holdings and the Borrower agrees with the Administrative Agent
and each Lender that, until all Commitments and Letters of Credit have
terminated and all Obligations (other than indemnities for which no request for
payment has been made) have been paid and performed in full:
8.01 Liens. Holdings will not, and will not permit any of its
Subsidiaries to, create, incur, assume, or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
Holdings or any of its Subsidiaries, whether now owned or hereafter acquired, or
sell any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets (including sales
of accounts receivable with recourse to Holdings or any of its Subsidiaries), or
assign any right to receive income or permit the filing of any financing
statement under the UCC or any other similar notice of Lien under any similar
recording or notice statute; provided that the provisions of this Section 8.01
shall not prevent the creation, incurrence, assumption or existence of the
following (Liens described below are herein referred to as "Permitted Liens"):
(i) inchoate Liens for taxes, assessments or governmental charges
or levies not yet due or Liens for taxes, assessments or governmental
charges or levies being contested in good faith and by appropriate
proceedings for which adequate reserves have been established in accordance
with GAAP or which are immaterial;
(ii) Liens in respect of property or assets of Holdings or any of
its Subsidiaries imposed by law, which were incurred in the ordinary course
of business and do not secure Indebtedness for borrowed money, such as
carriers', warehousemen's, materialmen's and mechanics' liens and other
similar Liens arising in the ordinary course of business, and (x) which do
not in the aggregate materially detract from the value of Holdings' or such
Subsidiary's property or assets or materially impair the use thereof in the
operation of the business of Holdings or such Subsidiary or (y) which are
being contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing the forfeiture or sale of the property or
assets subject to any such Lien;
(iii) Liens in existence on the Closing Date which are listed, and
the property subject thereto described, in Schedule 8.01, but only to the
respective date, if any, set forth in such Schedule 8.01 for the removal,
replacement and termination of any such
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Liens, plus renewals, replacements and extensions of such Liens to the
extent set forth on Schedule 8.01, provided that (x) the aggregate
principal amount of the Indebtedness, if any, secured by such Liens does
not increase from that amount outstanding at the time of any such renewal,
replacement or extension and (y) any such renewal, replacement or extension
does not encumber any additional assets or properties of Holdings or any of
its Subsidiaries;
(iv) Liens created pursuant to the Collateral Documents;
(v) licenses, sublicenses, leases or subleases granted to other
Persons not materially interfering with the conduct of the business of
Holdings or any of its Subsidiaries;
(vi) Liens upon assets of the Borrower or any of its Subsidiaries
subject to Capital Lease Obligations to the extent such Capital Lease
Obligations are permitted by Section 8.04(iv), provided that (x) such Liens
only serve to secure the payment of Indebtedness arising under such Capital
Lease Obligation and (y) the Lien encumbering the asset giving rise to the
Capital Lease Obligation does not encumber any other asset of Holdings or
any of its Subsidiaries;
(vii) Liens placed upon property acquired after the Closing Date and
used in the ordinary course of business of the Borrower or any of its
Subsidiaries at the time of the acquisition thereof by the Borrower or any
such Subsidiary or within 90 days thereafter to secure Indebtedness
incurred to pay all or a portion of the purchase price thereof or to secure
Indebtedness incurred solely for the purpose of financing the acquisition
of any such property or extensions, renewals or replacements of any of the
foregoing for the same or a lesser amount, provided that (x) the aggregate
outstanding principal amount of all Indebtedness secured by Liens permitted
by this clause (vii) shall be permitted by Section 8.04(iv) and (y) in all
events, the Lien encumbering the equipment so acquired does not encumber
any other asset of Holdings or any of its Subsidiaries;
(viii) Permitted Encumbrances and other easements, rights-of-way,
restrictions, zoning rights, encroachments and other similar charges or
encumbrances, and minor title deficiencies, in each case not securing
Indebtedness and not materially interfering with the conduct of the
business of Holdings or any of its Subsidiaries;
(ix) Liens arising from precautionary UCC financing statement
filings regarding operating leases;
(x) Liens arising out of the existence of judgments or awards to
the extent not constituting an Event of Default under Section 9.01(i);
(xi) (i) statutory and common law landlords' liens under leases to
which Holdings or any of its Subsidiaries is a party and (ii) landlord
Liens in existence on the Closing Date arising under lease contracts and,
after the Closing Date, such other landlord Liens arising under new or
renewed lease contracts in the ordinary course of business, provided
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that the Borrower and its Subsidiaries shall use reasonable efforts to
ensure that no such lease contracts contain any such landlord Liens;
(xii) (x) Liens (other than Liens imposed under ERISA) incurred in
the ordinary course of business in connection with workers compensation
claims, unemployment insurance and social security benefits and (y) Liens
securing the performance of bids, tenders, leases and contracts in the
ordinary course of business, statutory obligations, surety bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business (exclusive of obligations in respect of the
payment for borrowed money), provided that the aggregate outstanding amount
of obligations secured by Liens permitted by this clause (xii)(y) (and the
value of all cash and property encumbered by Liens permitted pursuant to
this clause (xii)(y)) shall not at any time exceed $1,000,000;
(xiii) Liens on property or assets acquired pursuant to a Permitted
Acquisition, or on property or assets of a Subsidiary of the Borrower in
existence at the time such Subsidiary is acquired pursuant to a Permitted
Acquisition, provided that (i) any Indebtedness that is secured by such
Liens is permitted to exist under Section 8.04(viii) and (ii) such Liens
are not incurred in connection with or anticipation of such Permitted
Acquisition and do not attach to any other asset of Holdings or any of its
Subsidiaries;
(xiv) Liens securing reimbursement obligations in respect of
documentary letters of credit permitted to be issued under Section 8.04,
provided that such Liens attach only to the documents, the goods covered
thereby and the proceeds thereof;
(xv) Liens in favor of customs and revenue authorities which secure
payment of customs duties in connection with the importation of goods;
(xvi) Liens consisting of rights of set-off of a customary nature or
bankers' liens on amounts on deposit, whether arising by contract or
operation of law, incurred in the ordinary course of business;
(xvii) Liens on property and assets of any Foreign Subsidiary of the
Borrower securing Indebtedness permitted to be incurred by such Foreign
Subsidiary pursuant to Section 8.04; and
(xviii) additional Liens incurred by the Borrower and its
Subsidiaries so long as (x) the value of the property subject to such
Liens, and the Indebtedness and other obligations secured thereby, do not
exceed $500,000 and (y) in the case of any consensual Liens, such Liens do
not attach to any Collateral existing immediately prior to the creation of
such Liens.
In connection with the granting of Liens of the type described in
clauses (vi), (vii), (xiii) and (xviii) (but, in the case of such clause
(xviii), only in the case of a consensual Lien) of this Section 8.01 by the
Borrower or any of its Subsidiaries, the Administrative Agent and the Collateral
Agent shall be authorized to take any actions deemed appropriate by it in
connection therewith (including, without limitation, by executing appropriate
lien releases or lien subordina-
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tion agreements in favor of the holder or holders of such Liens, in either case
solely with respect to the item or items of equipment or other assets subject to
such Liens).
8.02 Consolidation, Merger, Purchase or Sale of Assets, etc.
Holdings will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of all or any part of
its property or assets, or enter into any sale-leaseback transactions, or
purchase or otherwise acquire (in one or a series of related transactions) any
part of the property or assets (other than purchases or other acquisitions of
inventory, materials and equipment in the ordinary course of business) of any
Person (or agree to do any of the foregoing at any future time), except that:
(i) Capital Expenditures by the Borrower and its Subsidiaries
shall be permitted to the extent not in violation of Section 8.07;
(ii) each of the Borrower and its Subsidiaries may make sales of
inventory in the ordinary course of business;
(iii) each of the Borrower and its Subsidiaries may sell obsolete or
worn-out equipment or materials;
(iv) each of the Borrower and its Subsidiaries may sell other
assets, provided that the aggregate sale proceeds from all assets subject
to such sales pursuant to this clause (iv) shall not exceed $150,000 in any
fiscal year of the Borrower;
(v) each of the Borrower and its Subsidiaries may sell assets
(other than the capital stock of any Subsidiary Guarantor or any Mortgaged
Property existing on the Closing Date), so long as (w) no Default or Event
of Default then exists or would result therefrom, (x) each such sale is in
an arm's-length transaction and the Borrower or the respective Subsidiary
receives at least fair market value (as determined in good faith by the
Borrower or such Subsidiary, as the case may be), (y) at least 75% of the
total consideration received by the Borrower or such Subsidiary is cash and
is paid at the time of the closing of such sale, and (z) the aggregate
amount of the proceeds received from all assets sold pursuant to this
clause (v) shall not exceed $2,000,000 in any fiscal year of the Borrower
and $10,000,000 in the aggregate during the term of this Agreement;
(vi) Investments may be made to the extent permitted by Section
8.05;
(vii) each of the Borrower and its Subsidiaries may lease (as
lessee) or license (as licensee) real or personal property (so long as any
such lease or license does not create a Capital Lease Obligation except to
the extent permitted by Section 8.04(iv));
(viii) each of the Borrower and its Subsidiaries may sell or
discount, in each case without recourse and in the ordinary course of
business, accounts receivable arising in the ordinary course of business,
but only in connection with the compromise or collection thereof and not as
part of any financing transaction;
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(ix) each of the Borrower and its Subsidiaries may grant licenses,
sublicenses, leases or subleases to other Persons in the ordinary course of
business and not materially interfering with the conduct of the business of
the Borrower or any of its Subsidiaries;
(x) on or after September 30, 1998, the Borrower and its Wholly-
Owned Subsidiaries may acquire all or substantially all of the assets of
any Person (or all or substantially all of the assets of a product line or
division of any Person) or 100% (or at least 80% to the extent provided
below) of the capital stock of any Person (any such acquisition permitted
by this clause (x), a "Permitted Acquisition"), so long as (i) no Default
or Event of Default then exists or would result therefrom, (ii) each of the
representations and warranties contained in Article VI shall be true and
correct in all material respects both before and after giving effect to
such Permitted Acquisition, (iii) any Liens or Indebtedness assumed or
issued in connection with such Permitted Acquisition are otherwise
permitted under Section 8.01 or 8.04, as the case may be, (iv) at least 10
Business Days prior to the consummation of any Permitted Acquisition,
Holdings shall deliver to the Administrative Agent and each of the Lenders
a certificate of Holdings' Chief Financial Officer certifying (and showing
the calculations therefor in reasonable detail) that Holdings would have
been in compliance with the financial covenants set forth in Sections 8.08,
8.09,and 8.10 for the Measurement Period then most recently ended prior to
the date of the consummation of such Permitted Acquisition, in each case
with such financial covenants to be determined on a pro forma basis as if
such Permitted Acquisition had been consummated on the first day of such
Measurement Period (and assuming that any Indebtedness incurred, issued,
assumed or repaid in connection therewith had been incurred, issued,
assumed or repaid on the first day of, and (except for Indebtedness being
repaid) had remained outstanding throughout, such Measurement Period,
provided that in the case of any Permitted Acquisition effected before
December 31, 1998, the pro forma Consolidated Leverage Ratio for such
Measurement Period shall be no greater than 6.50:1.00, (v) the only
consideration paid by the Borrower or any of its Wholly-Owned Subsidiaries
in connection with any such Permitted Acquisition consists solely of cash
(including as a result of any earnout, non-compete or deferred compensation
arrangements), Indebtedness assumed or issued to the extent permitted by
Section 8.04, Holdings Common Stock and/or Holdings Preferred Stock, (vi)
the aggregate consideration paid in connection with all such Permitted
Acquisitions effected after the Closing Date (including, without
limitation, any earnout, non-compete or deferred compensation arrangements,
the aggregate principal amount of any Indebtedness assumed or issued in
connection therewith and the fair market value of any Holdings Common Stock
or Holdings Preferred Stock issued in connection therewith (as determined
in good faith by Holdings)) does not exceed, when added to the aggregate
amount of all Capital Expenditures made to effect a Permitted Capital
Expansion, the sum of (I) $35,000,000 plus (II) the Retained Equity Amount
at such time, (vii) no more than the sum of (I) $10,000,000 plus (II) the
Retained Equity Amount at such time in the aggregate may be expended on
Permitted Acquisitions in which the Borrower or a Wholly-Owned Subsidiary
thereof acquires less than 100% of the capital stock of any Person and
(viii) and immediately after giving effect to any such Permitted
Acquisition, the aggregate unutilized Revolving Commitments shall be at
least $7,500,000;
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(xi) any Subsidiary of the Borrower may transfer any of its assets
to the Borrower and may be merged, consolidated or liquidated with or into
the Borrower so long as the Borrower is the surviving corporation of such
merger, consolidation or liquidation;
(xii) any Subsidiary of the Borrower may transfer any of its assets
to a Subsidiary Guarantor and may be merged, consolidated or liquidated
with or into any other Subsidiary of the Borrower so long as (i) in the
case of any such merger, consolidation or liquidation involving a
Subsidiary Guarantor, the Subsidiary Guarantor is the surviving corporation
of such merger, consolidation or liquidation, (ii) in the case of any such
merger, consolidation or liquidation involving a Wholly-Owned Subsidiary of
the Borrower, the Wholly-Owned Subsidiary is the surviving corporation of
such merger, consolidation or liquidation and (iii) no more than $500,000
of assets in any fiscal year of the Borrower are transferred from a
Subsidiary Guarantor that is a Wholly-Owned Subsidiary to a Subsidiary
Guarantor that is a non-Wholly-Owned Subsidiary;
(xiii) the Borrower and its Subsidiaries may sell or exchange
specific items of equipment, so long as the purpose of each sale or
exchange is to acquire (and results within 90 days of such sale or exchange
in the acquisition of) replacement items of equipment which are, in the
reasonable business judgment of the Borrower and its Subsidiaries, the
functional equivalent of the item of equipment so sold or exchanged;
(xiv) any Foreign Subsidiary of the Borrower may transfer any of
its assets to a Wholly-Owned Foreign Subsidiary of the Borrower or to a
Subsidiary Guarantor;
(xv) the Borrower and its Subsidiaries may sell inventory to their
respective Subsidiaries in the ordinary course of business and consistent
with past practices for resale by such Subsidiaries in the ordinary course
of their business;
(xvi) the Borrower and its Subsidiary Guarantors may sell or
otherwise transfer equipment to their Subsidiaries in the ordinary course
of business so long as no more than $500,000 of equipment is sold or
transferred in any fiscal year of the Borrower pursuant to this clause
(xvi); and
(xvii) the Recapitalization shall be permitted.
To the extent the Required Lenders waive the provisions of this Section 8.02
with respect to the sale of any Collateral, or any Collateral is sold as
permitted by this Section 8.02 (other than to Holdings or a Subsidiary thereof),
such Collateral shall be sold free and clear of the Liens created by the
Collateral Documents, and the Administrative Agent and the Collateral Agent
shall be authorized to take any actions deemed appropriate in order to effect
the foregoing.
8.03 Dividends. Holdings will not, and will not permit any of its
Subsidiaries to, authorize, declare or pay any Dividends with respect to
Holdings or any of its Subsidiaries, except that:
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(i) (x) any Subsidiary of the Borrower may pay cash Dividends to
the Borrower or to any Wholly-Owned Subsidiary of the Borrower and (y) so
long as no Default or Event of Default then exist or would result
therefrom, any non-Wholly-Owned Subsidiary of the Borrower may pay cash
Dividends to its shareholders generally so long as the Borrower or its
respective Subsidiary which owns the equity interest or interests in the
Subsidiary paying such Dividends receives at least its proportionate share
thereof (based upon its relative holdings of equity in interests in the
Subsidiary paying such Dividends and taking into account the relative
preferences, if any, of the various classes of equity interests in such
Subsidiary);
(ii) so long as there shall exist no Default or Event of Default
(both before and after giving effect to the payment thereof), Holdings may
repurchase outstanding shares of its stock (or options to purchase such
stock) following the death, disability, retirement or termination of
employment of employees of Holdings or any of its Subsidiaries, provided
that (x) the only consideration paid by Holdings in respect of such
repurchases shall be cash, forgiveness of debt owed by such employee to
Holdings and/or Holdings Shareholder Subordinated Notes and (y) the sum of
(1) the aggregate amount of cash paid by Holdings in respect of all such
repurchases plus (2) the aggregate amount of all repurchases of all
Holdings Junior Subordinated Notes pursuant to Section 8.11(iii) plus (3)
the aggregate amount of all payments made on all Holdings Shareholder
Subordinated Notes pursuant to Section 8.11(iv) shall not exceed
$1,000,000 in any fiscal year of Holdings, provided that any unused amount
thereof may be carried forward and utilized for such purposes in the
immediately succeeding fiscal year of Holdings;
(iii) so long as no Default or Event of Default then exists or would
result therefrom, the Borrower may pay cash Dividends to Holdings so long
as Holdings promptly uses such proceeds for the purposes described in
clause (ii) of this Section 8.03 or Section 8.11(iii);
(iv) so long as there shall exist no Default or Event of Default
(both before and after giving effect to the payment thereof), Holdings may
repurchase outstanding shares of its stock (or options to purchase such
stock) held by officers or employees of Holdings or any of its Subsidiaries
with the net cash proceeds received by Holdings from the substantially
concurrent sale of Holdings Common Stock, Holdings Preferred Stock and/or
Holdings Junior Subordinated Notes in each case to the extent that such
proceeds utilize the Retained Equity Amount;
(v) the Borrower may pay cash Dividends to Holdings so long as the
proceeds thereof are promptly used by Holdings to pay operating expenses in
the ordinary course of business (including, without limitation, outside
directors and professional fees, expenses and indemnities) and other
similar corporate overhead costs and expenses, provided that the aggregate
amount of cash Dividends paid pursuant to this clause (v) shall not exceed
$1,000,000 in any fiscal year of Holdings;
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(vi) Holdings may pay regularly scheduled Dividends on the
Holdings Preferred Stock pursuant to the terms thereof solely through the
issuance of additional shares of Holdings Preferred Stock, provided that in
lieu of issuing additional shares of Holdings Preferred Stock as Dividends,
Holdings may increase the liquidation preference of the shares of the
Holdings Preferred Stock in respect of which such Dividends have accrued;
(vii) so long as there shall exist no Default or Event of Default
(both before and after giving effect to the payment thereof), from and
after January 31, 2004 the Borrower may pay cash Dividends to Holdings at
the times, and in the amounts, necessary to enable Holdings to make
regularly scheduled cash interest payments that are due on the Holdings
Senior Discount Notes;
(viii) at the time of the issuance of the Holdings Senior Discount
Notes, the Borrower may pay a cash Dividend to Holdings in an amount not to
exceed $1,000,000 the proceeds of which are used by Holdings to pay fees
and expenses in connection with the issuance thereof or to repay any
Holdings Junior Subordinated Notes which are not repaid with the proceeds
from the Holdings Senior Discount Notes;
(ix) the Recapitalization shall be permitted and the Borrower may
pay a cash Dividend to Holdings to effectuate the same; and
(x) the Borrower may pay cash Dividends to Holdings in connection
with amounts owing by it under the Holdings Tax Sharing Agreement.
8.04 Indebtedness. Holdings will not, and will not permit any of
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the other
Loan Documents;
(ii) existing Indebtedness (other than the Holdings Junior
Subordinated Notes and the Borrower Senior Subordinated Notes) outstanding
on the Closing Date and listed on Schedule 8.04, without giving effect to
any subsequent extension, renewal or refinancing thereof except to the
extent set forth on Schedule 8.04, provided that the aggregate principal
amount of the Indebtedness to be extended, renewed or refinanced does not
increase from that amount outstanding at the time of any such extension,
renewal or refinancing;
(iii) Indebtedness under Interest Rate Protection Agreements entered
into with respect to other Indebtedness permitted under this Section 8.04;
(iv) Indebtedness of the Borrower and its Subsidiaries evidenced by
Capital Lease Obligations to the extent permitted pursuant to Section 8.07
and Indebtedness subject to Liens permitted under Sections 8.01(vii),
provided that in no event shall the aggregate principal amount of all
Indebtedness permitted by this clause (iv) exceed $5,000,000 at any time
outstanding;
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(v) (x) intercompany Indebtedness among the Borrower and its
Subsidiaries to the extent permitted by Sections 8.05(xi) and 8.05(xii) and
(y) Indebtedness of Holdings to the Borrower to the extent permitted by
Section 8.05(xv);
(vi) Indebtedness of the Borrower and the Subsidiary Guarantors
incurred under the Borrower Senior Subordinated Note Documents in an
aggregate principal amount not to exceed $150,000,000 (as reduced by any
repayments of principal thereof);
(vii) Indebtedness consisting of guaranties by the Borrower and its
Subsidiaries of each other's Indebtedness and lease and other obligations
permitted under this Agreement;
(viii) Indebtedness of a Subsidiary acquired pursuant to a Permitted
Acquisition or Indebtedness of the Borrower or a Subsidiary thereof assumed
at the time of a Permitted Acquisition of an asset securing such
Indebtedness, provided that (i) such Indebtedness was not incurred in
connection with or anticipation of such Permitted Acquisition, and (ii)
such Indebtedness does not constitute debt for borrowed money (other than
in connection with industrial revenue or industrial development bond
financing), it being understood and agreed that Capital Lease Obligations
and purchase money Indebtedness shall not constitute debt for borrowed
money for purposes of this clause (viii);
(ix) Indebtedness of Holdings under the Holdings Junior
Subordinated Notes, provided that issuances of Holdings Junior Subordinated
Notes after the Closing Date may not be made other than in connection with
a private sale of equity made by Holdings in an aggregate principal amount
not to exceed 150% of the cash price paid for such related equity and no
such additional Holdings Junior Subordinated Notes may be issued after the
earlier of (x) a registered public equity offering by Holdings and (y) the
issuance of the Holdings Senior Discount Notes, it being understood and
agreed that, in any event, at the time of the issuance of the Holdings
Senior Discount Notes all then outstanding Holdings Junior Subordinated
Notes shall be repaid with the Net Debt Proceeds from the issuance of the
Holdings Senior Discount Notes and with the Dividend permitted to be paid
under Section 8.03(viii);
(x) obligations of the Borrower or any of its Subsidiaries under
incentive, earn-out or other similar arrangements incurred by it in
connection with a Permitted Acquisition to the extent permitted under
Sections 8.02(x);
(xi) Indebtedness of Holdings under Holdings Shareholder
Subordinated Notes in an aggregate principal amount not to exceed
$5,000,000 at any time outstanding;
(xii) Indebtedness in respect of Other Hedging Agreements to the
extent permitted by Section 8.05(xiii);
(xiii) Indebtedness subject to Liens permitted under Section
8.01(xii);
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(xiv) so long as there shall exist no Default or Event of Default
(both before and after giving effect to the issuance thereof), Indebtedness
of Holdings under the Holdings Senior Discount Notes in an aggregate face
amount not to exceed $50,000,000 (as reduced by any repayments of principal
thereof) so long as (i) the terms of the Holdings Senior Discount Note
Documents do not require (x) any cash interest payment before January 31,
2004 and (y) any amortization payment, maturity, sinking fund payment or
similar payment prior to August 1, 2009, (ii) the proceeds therefrom are
used to repay outstanding Holdings Junior Subordinated Notes, (iii) the
proceeds therefrom do not exceed approximately $25,000,000 and (iv) the
terms and conditions of the Holdings Senior Discount Note Documents (other
than the interest rate) are no more restrictive than those set forth in the
Borrower Senior Subordinated Note Documents and are otherwise reasonably
satisfactory to Bank of America; and
(xv) additional Indebtedness incurred by the Borrower or any of its
Subsidiaries in an aggregate principal amount not to exceed $20,000,000 at
any one time outstanding, of which no more than $500,000 at any time may be
secured by a Lien permitted under Section 8.01(xviii) and with the
remainder of such Indebtedness being unsecured.
8.05 Advances, Investments and Loans. Holdings will not, and will
not permit any of its Subsidiaries to, directly or indirectly, lend money or
credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any other Person, or purchase or own a futures contract or
otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, or hold any
cash or Cash Equivalents (each of the foregoing an "Investment" and,
collectively, "Investments"), except that the following shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and hold
accounts receivables owing to any of them, if created or acquired in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms of the Borrower or such Subsidiary;
(ii) the Borrower and its Subsidiaries may acquire and hold cash
and Cash Equivalents, provided that during any time that Revolving Loans or
Swingline Loans are outstanding the aggregate amount of cash and Cash
Equivalents permitted to be held by the Borrower and its Subsidiaries shall
not exceed $5,000,000 for any period of fifteen consecutive Business Days,
it being understood and agreed, however, that so long as no Event of
Default shall exist, the Borrower shall not be required to repay any
Eurodollar Loan in the middle of an Interest Period as a result of
complying with this clause (ii) and the failure to make such a payment will
not give rise to an Event of Default;
(iii) the Borrower and its Subsidiaries may hold the Investments
held by them on the Closing Date and described on Schedule 8.05, provided
that any additional Investments made with respect thereto shall be
permitted only if independently justified under the other provisions of
this Section 8.05;
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(iv) the Borrower and its Subsidiaries may acquire and own
investments (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and in good faith
settlement of delinquent obligations of, and other disputes with, customers
and suppliers arising in the ordinary course of business;
(v) the Borrower and its Subsidiaries may make loans and advances
in the ordinary course of business to their respective employees so long as
the aggregate principal amount thereof at any time outstanding (determined
without regard to any write-downs or write-offs of such loans and advances)
shall not exceed $500,000;
(vi) Holdings may acquire and hold obligations of one or more
officers or other employees of Holdings or any of its Subsidiaries in
connection with such officers' or employees' acquisition of shares of
capital stock of Holdings and/or Holdings Junior Subordinated Notes so long
as no cash is paid by Holdings or any of its Subsidiaries to such officers
or employees in connection with the acquisition of any such obligations;
(vii) the Borrower and its Subsidiaries may acquire and hold
promissory notes issued by the purchaser of assets in connection with a
sale of such assets to the extent permitted by Section 8.02;
(viii) the Borrower and its Wholly-Owned Subsidiaries may make
Permitted Acquisitions to the extent permitted by Section 8.02(x);
(ix) the Borrower and its Subsidiaries may enter into Interest
Rate Protection Agreements to the extent permitted by Section 8.04(iii);
(x) Holdings may make cash and other property contributions
(other than capital stock of the Borrower) to the capital of the Borrower
and the Borrower and the Subsidiary Guarantors may make cash contributions
to the capital of their respective Subsidiaries which are Subsidiary
Guarantors, provided that no more than $500,000 of cash capital
contributions in any fiscal year of the Borrower may be made to Subsidiary
Guarantors which are not Wholly-Owned Subsidiaries;
(xi) the Borrower and the Subsidiary Guarantors may make
intercompany loans and advances between or among one another (collectively,
"Intercompany Loans"), so long as each Intercompany Loan shall be evidenced
by an Intercompany Note that is pledged to the Collateral Agent pursuant to
the Pledge Agreement;
(xii) the Borrower and the Subsidiary Guarantors may make
additional loans and cash contributions to their respective Subsidiaries
which are not Subsidiary Guarantors in an aggregate amount not to exceed
$2,000,000 at any time outstanding (determined without regard to any write-
downs or write-offs thereof);
(xiii) the Borrower and its Subsidiaries may enter into Other
Hedging Agreements providing protection against fluctuations in currency
values in connection with the Borrower's or any of its Subsidiaries'
operations so long as management of the Borrower or
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such Subsidiary, as the case may be, has determined that the entering
into of such Other Hedging Agreements are bona fide hedging activities and
are not for speculative purposes;
(xiv) Holdings and its Subsidiaries may hold additional
investments in their respective Subsidiaries to the extent that such
investments reflect an increase in the value of such Subsidiaries;
(xv) to the extent that the Borrower may pay cash Dividends to
Holdings pursuant to Sections 8.03(iii), (v), (vii), (viii) and (x) the
Borrower may, in lieu of paying such cash Dividends, make an Intercompany
Loan to Holdings for the purposes, and subject to the limitations, set
forth in such Sections 8.03(iii), (v), (vii), (viii) and (x), in each case
so long as each Intercompany Loan shall be evidenced by an Intercompany
Note that is pledged to the Collateral Agent pursuant to the Pledge
Agreement;
(xvi) Holdings may effect the Asset Contribution;
(xvii) the Borrower and its Subsidiaries may make transfers of
assets to their respective Subsidiaries in accordance with Sections
8.02(xii), (xiv), (xv) and (xvi); and
(xviii) the Borrower and its Subsidiaries may make additional
Investments in an aggregate amount not to exceed the sum of (I) $1,000,000
in any fiscal year of the Borrower plus (II) the Retained Equity Amount at
such time (in each case determined without regard to any write-downs or
write-offs thereof).
8.06 Transactions with Affiliates. Holdings will not, and will not
permit any of its Subsidiaries to, enter into any transaction or series of
related transactions, whether or not in the ordinary course of business, with
any Affiliate of Holdings or any of its Subsidiaries, other than in the ordinary
course of business and on terms and conditions substantially as favorable to
Holdings or such Subsidiary as would reasonably be obtained by Holdings or such
Subsidiary at that time in a comparable arm's-length transaction with a Person
other than an Affiliate, except that the following in any event shall be
permitted:
(i) Dividends may be paid to the extent provided in Section 8.03;
(ii) loans may be made and other transactions may be entered into
by Holdings and its Subsidiaries to the extent permitted by Sections 8.02,
8.04 and 8.05;
(iii) customary fees may be paid to non-officer directors of
Holdings and its Subsidiaries;
(iv) so long as no Default under Section 7.01, 7.02(a), 9.01(a),
9.01(f) or 9.01(g) shall exist and no Event of Default shall exist, the
Borrower may pay management fees to CHS Management and its Affiliates
monthly in arrears pursuant to, and in accordance with, the terms of the
CHS Management Agreement (as in effect on the Closing Date) in an aggregate
amount for all such Persons taken together not to exceed $83,334 per month
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plus the reasonable out-of-pocket expenses incurred by CHS Management and
its Affiliates in performing management services for the Borrower pursuant
to the CHS Management Agreement (it being understood and agreed that the
reimbursement of such reasonable out-of-pocket expenses may be made whether
or not any Default or Event of Default exists);
(v) the Borrower may pay a one time transaction fee to CHS and
its Affiliates on the Closing Date in the aggregate amount of $3,000,000
for all such Persons taken together plus the reasonable out-of-pocket
expenses incurred by CHS and its Affiliates in connection with the
Transaction and the Exchange Offer;
(vi) the Borrower may pay, in connection with any Permitted
Acquisition, a transaction fee to CHS Management and its Affiliates in an
aggregate amount for all such Persons taken together not to exceed 1% of
the aggregate value of any such Permitted Acquisition;
(vii) Holdings and its Subsidiaries may enter into and perform
their obligations under the Holdings Tax Sharing Agreement;
(viii) transactions entered into between or among the Borrower and
its Subsidiaries to the extent otherwise expressly permitted by this
Agreement;
(ix) Holdings and its Subsidiaries may enter into employment
arrangements (including benefit compensation, bonuses and stock option and
plans) with respect to the procurement of services with their respective
officers and employees in the ordinary course of business; and
(x) Holdings may issue and sell shares of its capital stock to
its stockholders to the extent otherwise permitted by this Agreement.
8.07 Capital Expenditures. (a) Holdings will not, and will not
permit any of its Subsidiaries to, make any Capital Expenditures, except that
(i) during the period from the Closing Date through and including December 31,
1998, the Borrower and its Subsidiaries may make Capital Expenditures so long as
the aggregate amount of all such Capital Expenditures does not exceed $4,000,000
and (ii) during any fiscal year of the Borrower set forth below (taken as one
accounting period), the Borrower and its Subsidiaries may make Capital
Expenditures so long as the aggregate amount of all such Capital Expenditures
does not exceed in any fiscal year of the Borrower set forth below the amount
set forth opposite such fiscal year below:
Fiscal Year Ending Amount
------------------ ------
December 31, 1999 $7,000,000
December 31, 2000 $7,000,000
December 31, 2001 $7,000,000
December 31, 2002 $7,000,000
December 31, 2003 $7,000,000
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December 31, 2004 $7,000,000
December 31, 2005 $7,000,000
December 31, 2006 $7,000,000
(b) In addition to the foregoing, in the event that the amount of
Capital Expenditures permitted to be made by the Borrower and its Subsidiaries
pursuant to clause (a) above in any fiscal year of the Borrower (before giving
effect to any increase in such permitted Capital Expenditure amount pursuant to
this clause (b)) is greater than the amount of Capital Expenditures actually
made by the Borrower and its Subsidiaries during such fiscal year, such excess
(the "Rollover Amount") may be carried forward and utilized to make Capital
Expenditures in the immediately succeeding fiscal year, provided that no amounts
once carried forward pursuant to this Section 8.07(b) may be carried forward to
any fiscal year thereafter and such amounts may only be utilized after the
Borrower and its Subsidiaries have utilized in full the permitted Capital
Expenditure amount for such fiscal year as set forth in the table in clause (a)
above (without giving effect to any increase in such amount by operation of this
clause (b)).
(c) In addition to the foregoing, the Borrower and it Subsidiaries
may make Capital Expenditures with the amount of Net Sale Proceeds received by
the Borrower or any of its Subsidiaries from any Asset Sale so long as such Net
Sale Proceeds are reinvested in assets used or to be used in the Borrower's or
any of its Subsidiaries' business within 270 days following the date of such
Asset Sale to the extent such Net Sale Proceeds are not otherwise required to be
applied to reduce the Commitments pursuant to Section 2.07(c).
(d) In addition to the foregoing, the Borrower and its Subsidiaries
may make Capital Expenditures with the amount of Net Insurance Proceeds received
by the Borrower or any of its Subsidiaries from any Recovery Event so long as
such Net Insurance Proceeds are used to replace or restore any properties or
assets in respect of which such Net Insurance Proceeds were paid within 365 days
following the date of receipt of such Net Insurance Proceeds from such Recovery
Event to the extent such Net Insurance Proceeds are not otherwise required to be
applied to reduce the Commitments pursuant to Section 2.07(d).
(e) In addition to the foregoing, the Borrower and its Wholly-Owned
Subsidiaries may consummate Permitted Acquisitions in accordance with Section
8.02(x).
(f) In addition to the foregoing, the Borrower may make up to
$7,000,000 of Capital Expenditures in the aggregate to complete the current
expansion of its Tuscaloosa, Alabama facility so long as such Capital
Expenditures are made on or before December 31, 1999.
(g) In addition to the foregoing, the Borrower and its Subsidiaries
may make Capital Expenditures in connection with a Permitted Capital Expansion,
provided that (i) the aggregate amount of all such Capital Expenditures, when
added to the aggregate amount of all Permitted Acquisitions made pursuant to
Section 8.02(x), does not exceed $35,000,000, and (ii) prior to commencing any
Permitted Capital Expansion, the Borrower shall give the Administrative Agent
and the Lenders notice thereof (which notice shall include the proposed amount
and time projected to complete such Permitted Capital Expansion).
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(h) In addition to the foregoing, the Borrower and its Subsidiaries
may make Capital Expenditures (including for a Permitted Capital Expansion)
utilizing the Retained Equity Amount at such time.
8.08 Consolidated Interest Coverage Ratio. Holdings and the Borrower
will not permit the Consolidated Interest Coverage Ratio for any Measurement
Period ending on the last day of a fiscal quarter of Holdings set forth below to
be less than the ratio set forth opposite such fiscal quarter below:
Fiscal Quarter Ending Ratio
--------------------- -----
September 30, 1998 1.50:1.00
December 31, 1998 1.50:1.00
March 31, 1999 1.55:1.00
June 30, 1999 1.60:1.00
September 30, 1999 1.65:1.00
December 31, 1999 1.75:1.00
March 31, 2000 1.75:1.00
June 30, 2000 1.75:1.00
September 30, 2000 1.75:1.00
December 31, 2000 2.00:1.00
March 31, 2001 2.00:1.00
June 30, 2001 2.00:1.00
September 30, 2001 2.00:1.00
December 31, 2001 2.25:1.00
March 31, 2002 2.25:1.00
June 30, 2002 2.25:1.00
September 30, 2002 2.25:1.00
December 31, 2002
and the last day of each fiscal quarter
thereafter 2.50:1.00
8.09 Consolidated Fixed Charge Coverage Ratio. Holdings and the
Borrower will not permit the Consolidated Fixed Charge Coverage Ratio for any
Measurement Period ending on or after December 31, 1999 to be less than
1.10:1.00:
8.10 Maximum Leverage Ratio. Holdings and the Borrower will not
permit the Consolidated Leverage Ratio at any time during a period set forth
below to be greater than the ratio set forth opposite such period below:
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Period Ratio
------ -----
December 31, 1998 through and including June 29,
1999 6.50:1.00
June 30, 1999 through and including September
29, 1999 6.25:1.00
September 30, 1999 through and including
December 30, 1999 5.75:1.00
December 31, 1999 through and including
September 29, 2000 5.25:1.00
September 30, 2000 through and including
December 30, 2000 5.00:1.00
December 31, 2000 through and including December
30, 2001 4.75:1.00
December 31, 2001 through and including December
30, 2002 4.50:1.00
December 31, 2002 through and including June 29,
2003 4.25:1.00
June 30, 2003 through and including December 30,
2003 4.00:1.00
December 31, 2003 through and including December
30, 2004 3.75:1.00
Thereafter 3.50:1.00
8.11 Limitation on Voluntary Payments and Modification of
Indebtedness; Modifications of Certificate of Incorporation, By-Laws and Certain
Other Agreements; etc. (a) Holdings will not, and will not permit any of its
Subsidiaries to:
(i) make (or give any notice in respect of) any voluntary or optional
payment or prepayment on or redemption or acquisition for value of
(including, without limitation, by way of depositing with the trustee with
respect thereto or any other Person money or securities before due for the
purpose of paying when due) any Borrower Senior Subordinated Notes (other
than in connection with the Borrower Senior Subordinated Note Exchange
Offer) or any Holdings Senior Discount Notes (other than in connection with
the Holdings Senior Discount Note Exchange Offer);
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(ii) make (or give any notice in respect of) any prepayment or
redemption of any Borrower Senior Subordinated Notes or any Holdings Senior
Discount Notes as a result of any asset sale, change of control or similar
event (including, without limitation, by way of depositing with the trustee
with respect thereto or any other Person money or securities before due for
the purpose of paying when due any Borrower Senior Subordinated Notes or
any Holdings Senior Discount Notes );
(iii) make (or give any notice in respect of) any payment,
prepayment, redemption or acquisition for value of (including, without
limitation, by way of depositing with the trustee with respect thereto or
any other Person money or securities before due for the purpose of paying
when due) any Holdings Junior Subordinated Notes (whether in respect of
principal, interest or otherwise), provided that so long as no Default or
Event of Default then exists or would result therefrom, Holdings may
purchase or redeem Holdings Junior Subordinated Notes held by employees of
Holdings or any of its Subsidiaries following their death, disability,
retirement or termination of employment so long as the aggregate amount
expended pursuant to this clause (iii), when added to the sum of the
aggregate amount of all Dividends paid or made pursuant to Section 8.03(ii)
and the aggregate amount of all payments made in respect of all Holdings
Shareholder Subordinated Notes pursuant to Section 8.11(iv), shall not
exceed $1,000,000 in any fiscal year of Holdings, provided that any unused
amount thereof may be carried forward and utilized for such purposes in the
immediately succeeding fiscal year of Holdings;
(iv) make (or give any notice in respect of) any payment,
prepayment, redemption or acquisition for value of (including, without
limitation, by way of depositing with the trustee with respect thereto or
any other Person money or securities before due for the purpose of paying
when due) any Holdings Shareholder Subordinated Notes (whether in respect
of principal, interest or otherwise), provided that so long as no Default
or Event of Default then exists or would result therefrom, Holdings may
make payments on Holdings Shareholder Subordinated Notes to the extent
permitted by Section 8.03(ii);
(v) so long as there shall exist no Default or Event of Default
(both before and after giving effect to the payment thereof), Holdings may
redeem or repurchase outstanding Holdings Junior Subordinated Notes held by
officers or employees of Holdings or any of its Subsidiaries with the net
cash proceeds received by Holdings from the substantially concurrent sale
of Holdings Common Stock, Holdings Preferred Stock and/or new Holdings
Junior Subordinated Notes in each case to the extent that such proceeds
utilize the Retained Equity Amount;
(vi) so long as there shall exist no Default or Event of Default
(both before and after giving effect to the payment thereof), Holdings may
redeem or repurchase outstanding Holdings Junior Subordinated Notes with
the proceeds from the issuance of the Holdings Senior Discount Notes and
with the Dividend paid pursuant to Section 8.03(viii);
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(vii) amend or modify, or permit the amendment or modification of,
any provision of any Borrower Senior Subordinated Note Document, any
Holdings Senior Discount Note Document, any Holdings Junior Subordinated
Notes or any Holdings Shareholder Subordinated Notes;
(viii) amend, modify or change its certificate of incorporation
(including, without limitation, by the filing or modification of any
certificate of designation (other than to authorize the issuance of any
Holdings Preferred Stock)) or by-laws (or the equivalent organizational
documents) or any agreement entered into by it with respect to its capital
stock, or enter into any new agreement with respect to its capital stock,
unless such amendment, modification, change or other action contemplated by
this clause (viii); could not reasonably be adverse to the interests of the
Lenders in any material respect; or
(ix) amend, modify or change any provision of the CHS Management
Agreement or the Holdings Tax Sharing Agreement in a manner which is
adverse to the Lenders.
(b) Neither Holdings nor any of its Subsidiaries shall designate
any Indebtedness, other than the Obligations, as "Designated Senior Debt"
for purposes of the Borrower Senior Subordinated Note Documents.
(c) Holdings will not make, nor shall it be required to make, any
cash interest payment on the Holdings Senior Discount Notes prior to
January 31, 2004.
8.12 Limitation on Certain Restrictions on Subsidiaries. Holdings
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by Holdings or any Subsidiary of
Holdings, or pay any Indebtedness owed to Holdings or any Subsidiary of
Holdings, (b) make loans or advances to Holdings or any Subsidiary of Holdings
or (c) transfer any of its properties or assets to Holdings or any Subsidiary of
Holdings, except for such encumbrances or restrictions existing under or by
reason of (i) applicable law, (ii) this Agreement and the other Loan Documents,
(iii) the Borrower Senior Subordinated Note Documents and the Holdings Senior
Discount Note Documents, (iv) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of Holdings or any
Subsidiary of Holdings, (v) customary provisions restricting assignment of any
licensing agreement entered into by Holdings or any Subsidiary of Holdings in
the ordinary course of business, (vi) restrictions on the transfer of any asset
subject to a Lien permitted by Sections 8.01(vi), (vii), (xiii), (xiv), (xvii)
and (xviii), (vii) restrictions which are imposed on any Subsidiary of the
Borrower acquired pursuant to a Permitted Acquisition to the extent such
restrictions are set forth in any Indebtedness assumed in connection with such
Permitted Acquisition so long as such restrictions are not applicable to any
Subsidiary of the Borrower other than the Subsidiary being acquired and such
restrictions were not created or imposed in connection with or in contemplation
of such Permitted Acquisition, (viii) restrictions on the transfer of any asset
pending the close of the sale of such asset, (ix) restrictions which are imposed
on any Foreign Subsidiary of the Borrower to the extent such
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restrictions are set forth in any Indebtedness incurred by such Foreign
Subsidiary pursuant to Section 8.04(xiv) so long as such restrictions are not
applicable to any Subsidiary of the Borrower other than the Foreign Subsidiary
that has incurred such Indebtedness and (x) customary restrictions set forth in
any joint venture agreement entered in connection with an Investment made
pursuant to Section 8.05(xviii).
8.13 Limitation on Issuance of Capital Stock. (a) Holdings will
not, and will not permit any of its Subsidiaries to, issue (i) any preferred
stock other than Holdings Preferred Stock issued by Holdings (as constituted on
the Closing Date or upon such other terms as may be reasonably acceptable to
Bank of America (or any successor Administrative Agent) or (ii) any redeemable
common stock (other than common stock that is redeemable at the sole option of
Holdings or such Subsidiary).
(b) Holdings will not permit any of its Subsidiaries to issue any
capital stock (including by way of sales of treasury stock) or any options or
warrants to purchase, or securities convertible into, capital stock, except (i)
for transfers and replacements of then outstanding shares of capital stock, (ii)
for stock splits, stock dividends and issuances which do not decrease the
percentage ownership of Holdings or any of its Subsidiaries in any class of the
capital stock of such Subsidiary, (iii) to qualify directors to the extent
required by applicable law or (iv) for issuances by newly created or acquired
Subsidiaries in accordance with the terms of this Agreement.
8.14 Business. (a) Holdings and its Subsidiaries will not engage in
any business other than the businesses engaged in by the Borrower and its
Subsidiaries as of the Closing Date and reasonable extensions thereof and
activities incidental thereto.
(b) Notwithstanding the foregoing, Holdings will not engage in any
business and, after giving effect to the Transaction, will not own any
significant assets or have any material liabilities other than its ownership of
the capital stock of the Borrower and the capital stock of Globe Elastic Thread,
Ltd. (which is in the process of being dissolved) and those Investments
permitted to be held by it pursuant to Section 8.05(vi) and having those
liabilities which it is responsible for under this Agreement and the other
Transaction Documents to which it is a party and other liabilities permitted to
be incurred by it under this Agreement, provided that Holdings may engage in
those activities that are incidental to (x) the maintenance of its corporate
existence in compliance with applicable law, (y) legal, tax and accounting
matters in connection with any of the foregoing activities and (z) the entering
into, and performing its obligations under, this Agreement, the other
Transaction Documents to which it is a party and the Holdings Senior Discount
Note Documents.
8.15 Limitation on Creation of Subsidiaries. Notwithstanding
anything to the contrary contained in this Agreement, Holdings will not, and
will not permit any of its Subsidiaries to, establish, create or acquire after
the Closing Date any Subsidiary, provided that the Borrower and its Wholly-Owned
Subsidiaries shall be permitted to establish and create Wholly-Owned
Subsidiaries and, to the extent permitted by Sections 8.02(x) and 8.05(xviii),
acquire non-Wholly-Owned Subsidiaries, so long as (i) the capital stock of each
such new
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Subsidiary is pledged pursuant to, and to the extent required by, the Pledge
Agreement and the certificates representing such stock, together with stock
powers duly executed in blank, are delivered to the Collateral Agent for the
benefit of the Lenders, and (ii) each such new Domestic Subsidiary, and to the
extent required by Section 7.13, each such new Foreign Subsidiary, executes
a Guarantor Supplement. In addition, each new Domestic Subsidiary, and to the
extent required by Section 7.13, each such new Foreign Subsidiary, shall execute
and deliver, or cause to be executed and delivered, all other relevant
documentation of the type described in Article V as requested by the
Administrative Agent and as such new Subsidiary would have had to deliver if
such new Subsidiary were a Credit Party on the Closing Date.
ARTICLE IX.
EVENTS OF DEFAULT
-----------------
9.01 Event of Default. Any of the following shall constitute an
"Event of Default":
(a) Non-Payment. The Borrower fails to pay, (i) when and as required
to be paid herein, any amount of principal of any Loan or any amount of any
Letter of Credit Obligation, or (ii) within three Business Days after the
same shall become due, any interest, fee or any other amount payable
hereunder or pursuant to any other Loan Document; or
(b) Representation or Warranty. Any representation or warranty by
Holdings or any of its Subsidiaries made or deemed made herein or in any
other Loan Document, or which is contained in any certificate, document or
financial or other statement furnished by Holdings or any of its
Subsidiaries at any time under this Agreement or under any other Loan
Document, shall prove to have been incorrect in any material respect on or
as of the date made or deemed made; or
(c) Specific Defaults. Holdings or any of its Subsidiaries fails to
perform or observe any term, covenant or agreement contained in Section
7.03(a), 7.10, 7.14 or Article VIII; or
(d) Other Defaults. Holdings or any of its Subsidiaries fails to
perform or observe any other term or covenant contained in this Agreement
or in any other Loan Document, and such default shall continue unremedied
for a period of 30 days after the date upon which written notice thereof is
given to the Borrower by the Administrative Agent or any Lender; or
(e) Cross-Default. Holdings or any of its Subsidiaries (i) fails to
make any payment in respect of any Indebtedness having an aggregate
principal amount of $3,000,000 or more when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise) and such
failure continues after the applicable grace or notice period, if any,
specified in the document relating thereto on the date of such
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failure; or (ii) fails to perform or observe any other condition or
covenant, or any other event shall occur or condition exist, under any
agreement or instrument relating to any such Indebtedness, and such failure
continues after the applicable grace or notice period, if any, specified in
the document relating thereto on the date of such failure if the effect of
such failure, event or condition is to cause, or to permit the holder or
holders of such Indebtedness or beneficiary or beneficiaries of such
Indebtedness (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause such Indebtedness to be declared to
be due and payable prior to its stated maturity; or
(f) Insolvency; Voluntary Proceedings. Holdings or any of its
Subsidiaries (i) generally fails to pay its debts as they become due; (ii)
commences any Insolvency Proceeding with respect to itself; or (iii) takes
any action to effectuate or authorize any of the foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency
Proceeding is commenced or filed against Holdings or any of its
Subsidiaries, or any writ, judgment, warrant of attachment, execution or
similar process, is issued or levied against a substantial part of
Holdings' or any of its Subsidiaries' properties, and any such proceeding
or petition shall not be dismissed, or such writ, judgment, warrant of
attachment, execution or similar process shall not be released, vacated or
fully bonded within 60 days after commencement, filing or levy; (ii)
Holdings or any of its Subsidiaries admits the material allegations of a
petition against it in any Insolvency Proceeding, or an order for relief
(or similar order under non-U.S. law) is ordered in any Insolvency
Proceeding; or (iii) Holdings or any of its Subsidiaries acquiesces in the
appointment of a receiver, trustee, custodian, conservator, liquidator,
mortgagee in possession (or agent therefor), or other similar Person for
itself or a substantial portion of its property or business; or
(h) ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof under Section 412 of
the Code or Section 302 of ERISA or a waiver of such standard or extension
of any amortization period is sought or granted under Section 412 of the
Code or Section 303 or 304 of ERISA, a Reportable Event shall have
occurred, a contributing sponsor (as defined in Section 4001(a)(13) of
ERISA) of a Plan subject to Title IV of ERISA shall be subject to the
advance reporting requirement of PBGC Regulation Section 4043.61 (without
regard to subparagraph (b)(i) thereof) and an event described in subsection
.62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 shall
be reasonably expected to occur with respect to such Plan within the
following 30 days, any Plan shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan is, shall have been or is
likely to be terminated or the subject of termination proceedings under
ERISA, any Plan shall have an Unfunded Current Liability, a contribution
required to be made to a Plan or a Foreign Pension Plan has not been timely
made, Holdings or any Subsidiary of Holdings or any ERISA Affiliate has
incurred or is likely to incur a liability to or on account of a Plan under
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or
4212 of ERISA or Section 401(a)(29), 4971, or 4975 of the Code, or on
account of a group health plan (as defined in Section 607(i) of ERISA or
Section 4980B(g)(2) of the Code) under
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Section 4980B of the Code, or Holdings or any Subsidiary of Holdings has
incurred or is likely to incur liabilities pursuant to one or more employee
welfare benefit plans (as defined in Section 3(1) of ERISA) with respect to
providing benefits to retired employees or other former employees (other
than as required by Section 601 of ERISA or Section 4980B of the Code) or
employee pension benefit plans (as defined in Section 3(2) of ERISA) or
Plans or Foreign Pension Plans; (b) there shall result from any such event
or events the imposition of a lien, the granting of a security interest, or
a liability or a material risk of incurring a liability; and (c) which
lien, security interest or liability, individually, and/or in the
aggregate, which arises from such event or events could reasonably be
expected to have a Material Adverse Effect; or
(i) Judgments. One or more judgments or decrees shall be entered
against Holdings or any of its Subsidiaries involving a liability (not paid
or not covered by a reputable and solvent insurance company) of $3,000,000
or more for all such judgments and decrees and all such judgments or
decrees shall not have been vacated, discharged or stayed or bonded pending
appeal within 30 days from the entry thereof; or
(j) Change of Control. Any Change of Control shall occur; or
(k) Collateral; Guaranties.
(i) Except in each case to the extent resulting from the failure
of the Collateral Agent to retain possession of the applicable Pledged
Securities, any Collateral Document (other than the Guaranties) shall
cease to be in full force and effect (except in accordance with its
express terms), or shall cease to give the Collateral Agent the Liens,
rights, powers and privileges purported to be created thereby in favor
of the Collateral Agent; or
(ii) any Guaranty or any provision thereof shall cease to be in
full force and effect (except in accordance with its express terms),
or any Guarantor or any Person acting by or on behalf of such
Guarantor shall deny or disaffirm such Guarantor's obligations under
its Guaranty.
9.02 Remedies. If any Event of Default occurs and is continuing, the
Administrative Agent shall, at the request of, or may, with the consent of, the
Required Lenders,
(a) declare the Commitments of each Lender and any obligation of the
Issuing Lenders to issue Letters of Credit to be terminated, whereupon such
Commitments and obligation shall forthwith be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and
payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Borrower and Holdings;
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(c) demand that the Borrower Cash Collateralize Letter of Credit
Obligations to the extent of outstanding and wholly or partially undrawn
Letters of Credit, whereupon the Borrower shall so Cash Collateralize;
(d) exercise on behalf of itself, the Issuing Lenders and the
Lenders all rights and remedies available to it and the Lenders under the
Loan Documents or applicable law; and
(e) apply any cash collateral as provided in Section 3.07 to the
payment of outstanding Obligations;
provided, however, that upon the occurrence of any event specified above in
paragraph (f) or (g) of Section 9.01 with respect to the Borrower, any
Significant Subsidiary of the Borrower or any group of Subsidiaries of the
Borrower that, taken together, would constitute a Significant Subsidiary of the
Borrower, the obligation of each Lender to make Loans and any obligation of the
Issuing Lenders to issue Letters of Credit shall automatically terminate, and
all reimbursement obligations under Letters of Credit and the unpaid principal
amount of all outstanding Loans and all interest and other amounts as aforesaid
shall automatically become due and payable without further act or notice by the
Administrative Agent, any Issuing Lender or any Lender, which are hereby
expressly waived by the Borrower and Holdings.
9.03 Rights Not Exclusive. The rights provided for in this Agreement
and the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
ARTICLE X.
THE GUARANTY
------------
10.01 Guaranty from Holdings. (a) In order to induce the Lenders to
make Loans to the Borrower under this Agreement and to induce the Issuing
Lenders to issue Letters of Credit and to induce the Guaranteed Creditors to
enter into the Interest Rate Protection Agreements and Other Hedging Agreements,
Holdings hereby unconditionally and irrevocably guarantees the prompt payment
and performance in full by the Borrower when due (whether at stated maturity, by
acceleration or otherwise) of all Guaranteed Obligations of the Borrower. The
obligations of Holdings hereunder are those of a primary obligor, and not merely
a surety, and are independent of the Guaranteed Obligations of the Borrower. A
separate action or actions may be brought against Holdings whether or not an
action is brought against the Borrower, any other guarantor or other obligor in
respect of the Guaranteed Obligations or whether the Borrower, any other
guarantor or any other obligor in respect of the Guaranteed Obligations is
joined in any such action or actions. Holdings waives, to the fullest extent
permitted by applicable law, the benefit of any statute of limitation affecting
its liability hereunder and agrees that its liability hereunder shall not be
subject to any right of set-off, counterclaim or recoupment (each of which
rights is hereby waived to the fullest extent permitted by applicable law).
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(b) Holdings guarantees that the obligations guaranteed by it hereby
will be paid and performed strictly in accordance with the terms of this
Agreement, the other Loan Documents and the applicable Interest Rate Protection
Agreements and Other Hedging Agreements regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such terms
or the rights of the Administrative Agent, the Collateral Agent, the Issuing
Lenders, the Lenders or the other Guaranteed Creditors with respect thereto.
The liability of Holdings under this guaranty shall be absolute and
unconditional irrespective of, and Holdings hereby irrevocably waives (to the
fullest extent permitted by applicable law) any defenses it may now or hereafter
have in any way relating to, any and all of the following:
(i) any lack of genuineness, validity, legality or enforceability
against the Borrower or any other guarantor of this Agreement, any other
Loan Document, any Interest Rate Protection Agreement or Other Hedging
Agreement or any document, agreement or instrument relating hereto or any
assignment or transfer of this Agreement, any other Loan Document or any
Interest Rate Protection Agreement or Other Hedging Agreement or any
defense that the Borrower may have with respect to its liability hereunder
or thereunder;
(ii) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations, or any waiver,
indulgence, compromise, renewal, extension, amendment, modification of, or
addition, consent, supplement to, or consent to departure from, or any
other action or inaction under or in respect of, this Agreement, any other
Loan Document, any Interest Rate Protection Agreement or Other Hedging
Agreement or any document, instrument or agreement relating to the
Guaranteed Obligations or any other instrument or agreement referred to
herein or any assignment or transfer of this Agreement or any Interest Rate
Protection Agreement or Other Hedging Agreement;
(iii) any release or partial release of any other guarantor or other
obligor in respect of the Guaranteed Obligations;
(iv) any exchange, impairment, release or non-perfection of any
collateral for all or any of the Guaranteed Obligations, or any release, or
amendment or waiver of, or consent to departure from, any guaranty or
security, for any or all of the Guaranteed Obligations;
(v) any furnishing of any additional security for any of the
Guaranteed Obligations;
(vi) the liquidation, bankruptcy, insolvency or reorganization of the
Borrower, any other guarantor or other obligor in respect of the Guaranteed
Obligations or any action taken with respect to this guaranty or otherwise
by any trustee or receiver, or by any court, in any such proceeding;
(vii) any modification or termination of any intercreditor or
subordination agreement pursuant to which the claims of other creditors of
the Borrower or any guarantor are
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subordinated to those of the Lenders, the Issuing Lenders, the
Administrative Agent, the Collateral Agent or the other Guaranteed
Creditors; or
(viii) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, the Borrower or
Holdings.
(c) This guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time payment or performance of the Guaranteed
Obligations, or any part thereof, is, upon the insolvency, bankruptcy or
reorganization of the Borrower or otherwise pursuant to applicable law,
rescinded or reduced in amount or must otherwise be restored or returned by any
of the Administrative Agent, any Issuing Lender, any Lender, the Collateral
Agent or the other Guaranteed Creditors, all as though such payment or
performance had not been made.
(d) If an event permitting the acceleration of any of the Guaranteed
Obligations shall at any time have occurred and be continuing and such
acceleration shall at such time be prevented by reason of the pendency against
the Borrower of a case or proceeding under any bankruptcy or insolvency law,
Holdings agrees that, for purposes of this guaranty and its obligations
hereunder, the Guaranteed Obligations shall be deemed to have been accelerated
and Holdings shall forthwith pay such Guaranteed Obligations (including interest
which but for the filing of a petition in bankruptcy with respect to the
Borrower would accrue on such Guaranteed Obligations, whether or not interest is
an allowed claim under applicable law), and the other obligations hereunder,
forthwith upon demand.
(e) Holdings hereby waives (i) promptness, diligence, presentment,
notice of nonperformance, protest or dishonor, notice of acceptance and any and
all other notices with respect to any of the Guaranteed Obligations or this
Agreement, any other Loan Document or any Interest Rate Protection Agreement or
Other Hedging Agreement, and (ii) to the extent permitted by applicable law, any
right to require that the Administrative Agent, the Collateral Agent, any
Issuing Lender, any Lender or any other Guaranteed Creditor protect, secure,
perfect or insure any Lien in or any Lien on any property subject thereto or
exhaust any right or pursue any remedy or take any action against the Borrower,
any other guarantor or any other Person or any collateral or security or to any
balance of any deposit accounts or credit on the books of the Administrative
Agent, the Collateral Agent, any Issuing Lender, any Lender or any other
Guaranteed Creditor in favor of the Borrower.
(f) Holdings expressly waives until the Guaranteed Obligations are
irrevocably paid in full in cash any and all rights of subrogation,
reimbursement, contribution and indemnity (contractual, statutory or otherwise),
including any claim or right of subrogation under the Bankruptcy Code or any
successor statute, arising from the existence or performance of this guaranty
and Holdings irrevocably waives until the Guaranteed Obligations are irrevocably
paid in full in cash any right to enforce any remedy which the Administrative
Agent, the Collateral Agent, the Issuing Lenders, the Lenders or the other
Guaranteed Creditors now have or may hereafter have against the Borrower, and
waives, to the fullest extent permitted by law, until the Guaranteed Obligations
are irrevocably paid in full in cash any benefit of, and any right to
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participate in, any security now or hereafter held by the Administrative Agent,
the Collateral Agent, any Issuing Lender, any Lender or any other Guaranteed
Creditor.
(g) If, in the exercise of any of its rights and remedies, the
Administrative Agent, the Collateral Agent, any Issuing Lender, any Lender or
any other Guaranteed Creditor shall forfeit any of its rights or remedies,
including its right to enter a deficiency judgment against the Borrower or any
other Person, whether because of any applicable laws pertaining to "election of
remedies" or the like, Holdings hereby consents to such action and waives any
claim based upon such action (to the extent permitted by applicable law). Any
election of remedies which results in the denial or impairment of the right of
the Administrative Agent, the Collateral Agent, any Issuing Lender, any Lender
or any other Guaranteed Creditor to seek a deficiency judgment against any
Credit Party shall not impair Holdings' obligation to pay the full amount of the
Guaranteed Obligations.
(h) This guaranty is a continuing guaranty and shall (i) remain in
full force and effect until payment in full of the Guaranteed Obligations and
all other amounts payable under this guaranty and the termination of the
Aggregate Commitment; (ii) be binding upon Holdings, its successors and assigns;
and (iii) inure, together with the rights and remedies hereunder, to the benefit
of the Guaranteed Creditors and their respective successors, transferees and
assigns. Without limiting the generality of the foregoing clause (iii), any
Guaranteed Creditor may, subject to the terms of this Agreement or the
applicable Interest Rate Protection Agreement or Other Hedging Agreement, assign
or otherwise transfer its rights and obligations under this Agreement to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect hereof granted to such Lender pursuant to this guaranty or
otherwise, all as provided in, and to the extent set forth in, this Agreement.
(i) Any obligations of the Borrower to Holdings, now or hereafter
existing, are hereby subordinated to the Guaranteed Obligations. Such
obligations of the Borrower to Holdings, if the Administrative Agent or the
Required Lenders so request, shall be enforced and amounts recovered shall be
received by Holdings as trustee for the Guaranteed Creditors and the proceeds
thereof shall be paid over to the Lenders on account of the Guaranteed
Obligations, but without reducing or affecting in any manner the liability of
Holdings under the provisions of this guaranty.
(j) Upon failure of the Borrower to pay any Guaranteed Obligation when
and as the same shall become due, whether at maturity, by acceleration or
otherwise, Holdings hereby agrees immediately on demand by any of the Guaranteed
Creditors to pay or cause to be paid in accordance with the terms hereof an
amount equal to the full unpaid amount of the Guaranteed Obligations then due in
Dollars.
(k) All payments by Holdings hereunder shall be made free and clear
of, and without deduction or withholding for or on account of, any Taxes, unless
such deduction or withholding is required by law. If Holdings shall be required
by law to make any such deduction or withholding, then Holdings shall pay such
additional amounts as may be necessary in order that the net amount received by
the applicable Lender, the applicable Issuing Lender or the Adminis-
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trative Agent, as the case may be, after all deductions and withholdings, shall
be equal to the full amount that such Person would have received, after all
deductions and withholdings, had the Borrower discharged its obligations
(including its tax gross-up obligations) pursuant to Section 4.01.
Any amounts deducted or withheld by Holdings for or on account of
Taxes shall be paid over to the government or taxing authority imposing such
Taxes on a timely basis, and Holdings shall provide the applicable Lender, the
applicable Issuing Lender or the Administrative Agent, as the case may be, as
soon as practicable with such tax receipts or other official documentation (and
such other certificates, receipts and other documents as may reasonably be
requested by such Person) with respect to the payment of such Taxes as may be
available.
ARTICLE XI.
THE ADMINISTRATIVE AGENT, THE COLLATERAL
AGENT, THE ISSUING LENDERS, THE ARRANGER AND THE SYNDICATION AGENT
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11.01 Appointment and Authorization. (a) Each of the Lenders, each of
the Issuing Lenders and the Swingline Lender hereby irrevocably appoints,
designates and authorizes Bank of America as Administrative Agent and as
Collateral Agent (for purposes of this Article XI and Article XII, the term
"Agent" shall mean Bank of America in its capacity as Administrative Agent and
as Collateral Agent) to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall the Agent have or be deemed to have any fiduciary relationship
with any Lender, any Issuing Lender or the Swingline Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against the Agent.
(b) Each Issuing Lender shall have all of the benefits and immunities
(i) provided to the Agent in this Article XI with respect to any acts taken or
omissions suffered by such Issuing Lender in connection with Letters of Credit
issued by it or proposed to be issued by it and the Letter of Credit
Applications pertaining to the Letters of Credit as fully as if the term
"Agent", as used in this Article XI, included such Issuing Lender with respect
to such acts or omissions, and (ii) as additionally provided in this Agreement
with respect to such Issuing Lender.
11.02 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The
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Agent shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.
11.03 Liability of Agent. None of the Agent, its Affiliates or any
of their officers, directors, employees, agents or attorneys-in-fact
(collectively, the "Agent-Related Persons") shall (a) be liable for any action
taken or omitted to be taken by any of them under or in connection with this
Agreement or any other Loan Document (except for their own gross negligence or
willful misconduct), or (b) be responsible in any manner to any of the Lenders
for any recital, statement, representation or warranty made by Holdings, the
Borrower or any Subsidiary or Affiliate thereof, or any officer thereof,
contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document, or for any failure
of the Borrower, Holdings or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Borrower, Holdings or any of their respective Subsidiaries or
Affiliates.
11.04 Reliance by Agent. (a) The Lenders agree that the Agent shall
be entitled to rely, and shall be fully protected in relying, upon any writing,
resolution, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel (including counsel to the Borrower, Holdings or any Subsidiary
Guarantor), independent accountants and other experts selected by the Agent. The
Lenders agree that the Agent shall be fully justified in failing or refusing to
take any action under this Agreement or any other Loan Document unless it shall
first receive such advice or concurrence of the Required Lenders or, as required
by Section 12.01, all the Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
or any other Loan Document in accordance with a request or consent of the
Required Lenders or, as required by Section 12.01 all the Lenders, and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 5.01 as it relates to the initial Borrowing and issuances
of Letters of Credit on the Closing Date, each Lender that has executed this
Agreement shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter either sent by the Agent to such
Lender for consent, approval, acceptance or satisfaction, or required thereunder
to be consented to or approved by or acceptable or satisfactory to such Lender,
unless an officer of the Agent responsible for the transactions contemplated by
the Loan Documents shall have received notice from such Lender prior to the
initial Borrowing and issuances of Letters of Credit
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on the Closing Date specifying in reasonable detail its objection thereto and
either such objection shall not have been withdrawn by notice to the Agent to
that effect or such Lender shall not have made available to the Agent such
Lender's ratable portion of such Borrowing.
11.05 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest and fees required
to be paid to the Agent for the account of the Lenders or the Issuing Lender,
unless the Agent shall have received written notice from a Lender or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event
that the Agent receives such a notice, the Agent shall give notice thereof to
the Lenders and the Issuing Lenders. The Agent shall take such action with
respect to such Default or Event of Default as shall be requested by the
Required Lenders in accordance with Article IX; provided, however, that unless
and until the Agent shall have received any such request, the Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable or
in the best interest of the Lenders.
11.06 Credit Decision. Each Lender expressly acknowledges that none
of the Agent-Related Persons has made any representation or warranty to it and
that no act by the Agent hereinafter taken, including any review of the affairs
of Holdings and its Subsidiaries, shall be deemed to constitute any
representation or warranty by the Agent to any Lender. Each Lender represents to
the Agent that it has, independently and without reliance upon the Agent and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of Holdings and its
Subsidiaries, and all applicable bank regulatory laws relating to the
transactions contemplated thereby, and made its own decision to enter into this
Agreement and extend credit to the Borrower hereunder. Each Lender also
represents that it will, independently and without reliance upon the Agent and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of Holdings and its Subsidiaries. Except for notices, reports
and other documents expressly herein required to be furnished to the Lenders by
the Agent, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of the
Borrower, Holdings and their Subsidiaries which may come into the possession of
any of the Agent-Related Persons.
11.07 Indemnification. Whether or not the transactions contemplated
hereby shall be consummated, the Lenders shall indemnify, upon demand, each of
the Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrower and without limiting the obligation of the Borrower to do so), ratably
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of any
kind whatsoever which may at any time (including at any time following the
expiration of the
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Letters of Credit and the repayment of the Loans and the termination or
resignation of the Agent) be imposed on, incurred by or asserted against any
such Person in any way relating to or arising out of this Agreement, any other
Loan Document or any document contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action taken or
omitted by any such Person under or in connection with any of the foregoing;
provided, however, that no Lender shall be liable for the payment to any of the
Agent-Related Persons of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from such Person's gross negligence or willful misconduct.
Without limitation of the foregoing, each Lender shall reimburse the Agent upon
demand for its ratable share of any costs or out-of-pocket expenses (including
Attorney Costs) incurred by the Agent in connection with the administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Borrower. Without limiting
the generality of the foregoing, if the Internal Revenue Service or any other
Governmental Authority of the United States or other jurisdiction asserts a
claim that the Agent did not properly withhold tax from amounts paid to or for
the account of any Lender (because the appropriate form was not delivered, was
not properly executed, or because such Lender failed to notify the Agent of a
change in circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Lender shall
indemnify the Agent fully for all amounts paid as a result thereof, directly or
indirectly, by the Agent as tax or otherwise, including penalties and interest,
and including any taxes imposed by any jurisdiction on the amounts payable to
the Agent under this Section 11.07, together with all costs and expenses
(including Attorney Costs). The obligation of the Lenders in this Section 11.07
shall survive the payment of all Obligations hereunder.
11.08 Agent in Individual Capacity. Bank of America and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire and/or hold equity interests in and generally engage in
any kind of banking, trust, financial advisory or other business with Holdings
and its Subsidiaries and Affiliates as though Bank of America were not the Agent
or an Issuing Lender hereunder and without notice to or consent of the Lenders.
With respect to its Loans and participation in Letters of Credit, Bank of
America shall have the same rights and powers under this Agreement and the other
Loan Documents as any other Lender and may exercise the same as though it were
not the Agent or an Issuing Lender, and the terms "Lender" and "Lenders" shall
include Bank of America in its individual capacity.
11.09 Successor Agent. The Agent may resign as Agent upon 30 days'
notice to the Lenders and the Borrower. If the Agent shall resign as Agent
under this Agreement, the Required Lenders shall appoint from among the Lenders
a successor agent for the Lenders which successor agent shall be subject to the
approval of the Borrower if no Event of Default has occurred and is continuing,
such approval not to be unreasonably withheld or delayed. If no successor agent
is appointed prior to the effective date of the resignation of the Agent, the
Agent may appoint, after consulting with the Lenders and subject to the approval
of the Borrower if no Event of Default has occurred and is continuing, such
approval not to be unreasonably withheld
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or delayed, a successor agent from among the Lenders or any Lender Affiliate.
Any successor Agent appointed under this Section 11.09 shall be a commercial
bank organized under the laws of the United States or any State thereof, and
having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of its appointment as successor agent hereunder, such successor agent
shall succeed to all the rights, powers and duties of the retiring Agent and the
term "Agent" shall mean such successor agent and the retiring Agent's
appointment, powers and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article XI and
Sections 12.04 and 12.05 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement. If no
successor agent has accepted appointment as Agent by the date which is 30 days
following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the Lenders shall
perform all of the duties of the Agent hereunder until such time, if any, as the
Required Lenders appoint a successor agent as provided for above.
11.10 The Arranger and Syndication Agent. Neither the Arranger nor
the Syndication Agent, in their capacity as such, shall have any duties or
responsibilities, and shall incur no obligations or liabilities, under this
Agreement. Each Lender acknowledges that it has not relied, and will not rely,
on the Arranger or the Syndication Agent in deciding to enter into this
Agreement.
ARTICLE XII.
MISCELLANEOUS
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12.01 Amendments and Waivers. (a) No amendment or waiver of any
provision of this Agreement or any other Loan Document and no consent with
respect to any departure by the Borrower, Holdings or any Subsidiary Guarantor
therefrom, shall be effective unless the same shall be in writing and signed by
Holdings, the Borrower and the Required Lenders and acknowledged by the Agent,
and then such amendment, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no such waiver, amendment or consent shall, unless in writing and
signed by all the Lenders affected thereby and acknowledged by the Agent, do any
of the following:
(i) increase or extend any Commitment of such Lender (or reinstate
any Commitment terminated pursuant to Section 9.02(a)) (except as provided
in Section 12.07);
(ii) postpone or delay any date for any payment of interest or fees
due to the Lenders (or any of them) hereunder or under any other Loan
Document or extend the Revolving Termination Date or the final scheduled
maturity date of any Term Loan;
(iii) reduce the amount of any Scheduled Repayment or extend the date
of payment of any Scheduled Repayment;
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(iv) reduce the principal of, or the rate of interest specified
herein on, any Loan or Letter of Credit Borrowing (other than with respect
to post-default rates), or of any fees or other amounts payable hereunder
or under any other Loan Document or reduce the Applicable Margin provided
for herein (it being understood that any amendment or modification to the
financial definitions in this Agreement shall not constitute a reduction in
the rate of interest or fees for the purposes of this clause (iv) so long
as the primary purpose of the respective amendment or modification to the
financial definitions is not to reduce the interest rate or any fees
payable hereunder);
(v) reduce the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which shall be required for the
Lenders or any of them to take any action hereunder;
(vi) amend this Section 12.01 to the extent that any such amendment,
modification or waiver would alter any of the voting provisions set forth
in the other provisions of this Section 12.01, or reduce the percentage set
forth in the definition of "Required Lenders" or any provision of this
Agreement expressly requiring the consent of all the Lenders in order to
take or refrain from taking any action; or
(vii) release the guaranty of Holdings under its guaranty pursuant
to Article X or discharge any Subsidiary Guarantor from its obligations
under any Subsidiary Guaranty, or release all or substantially all of the
Collateral except, in all such cases, in accordance with the express
provisions hereof or thereof;
and, provided further, that (A) in addition to the consent of the Administrative
Agent and the Required Lenders, without the consent of the Majority Lenders of
each Tranche which is being allocated a lesser prepayment, repayment or
commitment reduction as a result of the actions described below (or without the
consent of the Majority Lenders of each Tranche in the case of an amendment to
the definition of Majority Lenders), amend the definition of Majority Lenders or
alter the required application of any prepayments or repayments (or commitment
reduction), as between the various Tranches, pursuant to Section 2.06 or Section
2.07(i) (although the Required Lenders may waive, in whole or in part, any such
prepayment, repayment or commitment reduction, so long as the application, as
amongst the various Tranches, of any such prepayment, repayment or commitment
reduction which is still required to be made is not altered), (B) no amendment,
waiver or consent shall, unless in writing and signed by the Issuing Lenders in
addition to the Required Lenders or all the Lenders, as the case may be, affect
the rights or duties of the Issuing Lenders under this Agreement or any Letter
of Credit Related Document, (C) no amendment, waiver or consent shall, unless in
writing and signed by the Swingline Lender in addition to the Required Lenders
or all the Lenders, as the case may be, affect the rights and duties of the
Swingline Lender under this Agreement and (D) no amendment, waiver or consent
shall, unless in writing and signed by the Administrative Agent in addition to
the Required Lenders or all the Lenders, as the case may be, affect the rights
or duties of the Administrative Agent under this Agreement or any other Loan
Document.
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(b) If, in connection with any proposed change, waiver, discharge or
any termination to any of the provisions of this Agreement as contemplated by
clauses (ii) through (vii), inclusive, of the first proviso to Section 12.01(a),
the consent of the Required Lenders is obtained but the consent of one or more
other Lenders whose consent is required is not obtained, then the Borrower shall
have the right, so long as all non-consenting Lenders whose individual consent
is required are treated the same, to replace each such non-consenting Lender or
Lenders with one or more Replacement Lenders pursuant to Section 4.08(b) so long
as at such time of such replacement, each such Replacement Lender consents to
the proposed change, waiver, discharge or termination.
12.02 Notices. (a) All notices, requests and other communications
provided for hereunder shall be in writing (including, unless the context
expressly otherwise provides, facsimile transmission) and mailed, transmitted by
facsimile or delivered, (A) if to the Borrower, Holdings, the Agent, the Issuing
Lender or the Swingline Lender, to the address or facsimile number specified for
notices on the applicable signature page hereof; (B) if to any Lender, to the
notice address of such Lender set forth on Schedule 1.01(a); or (C) as directed
to the Borrower or the Agent, to such other address as shall be designated by
such party in a written notice to the other parties, and as directed to each
other party, at such other address as shall be designated by such party in a
written notice to the Borrower and the Agent.
(b) All such notices, requests and communications shall be effective
when delivered or transmitted by facsimile machine, respectively, provided that
any matter transmitted by the Borrower by facsimile (i) shall be immediately
confirmed by a telephone call to the recipient at the number specified on the
applicable signature page hereof or on Schedule 1.01(a), and (ii) shall be
followed promptly by a hard copy original thereof; except that notices to the
Agent shall not be effective until actually received by the Agent, notices to
the Swingline Lender pursuant to Section 2.03(f) shall not be effective until
received by the Swingline Lender, and notices pursuant to Article III to any
Issuing Lender shall not be effective until actually received by such Issuing
Lender.
(c) The Borrower acknowledges and agrees that any agreement of the
Agent, the Issuing Lenders, the Swingline Lender and the Lenders in Articles II
and III herein to receive certain notices by telephone and facsimile is solely
for the convenience and at the request of the Borrower. The Agent, the Issuing
Lenders, the Swingline Lender and the Lenders shall be entitled to rely on the
authority of any Person purporting to be a Person authorized by the Borrower to
give such notice and the Agent, the Issuing Lenders, the Swingline Lender and
the Lenders shall not have any liability to such Borrower or any other Person on
account of any action taken or not taken by the Agent, the Issuing Lenders, the
Swingline Lender or the Lenders in reliance upon such telephonic or facsimile
notice. The obligation of the Borrower to repay the Loans and drawings under
Letters of Credit shall not be affected in any way or to any extent by any
failure by the Agent, the Issuing Lenders, the Swingline Lender and the Lenders
to receive written confirmation of any telephonic or facsimile notice or the
receipt by the Agent, the Issuing Lenders, the Swingline Lender and the Lenders
of a confirmation which is at variance with the terms understood by the Agent,
the Issuing Lenders, the Swingline Lender or the Lenders to be contained in the
telephonic or facsimile notice.
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12.03 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Agent, any Issuing Lender, the Swingline
Lender or any Lender, any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
12.04 Costs and Expenses. The Borrower shall, whether or not the
transactions contemplated hereby shall be consummated:
(a) pay or reimburse on demand for all reasonable costs and expenses
incurred by the Agent, the Arranger and the Syndication Agent, in
connection with the development, preparation, delivery, administration,
syndication of the Commitments and Loans under and execution of, and, in
the case of the Agent and the Arranger, any amendment, supplement, waiver
or modification to (in each case, whether or not consummated), this
Agreement, any other Loan Document and any other documents prepared in
connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including the Attorney Costs incurred by
the Agent and the Arranger with respect thereto;
(b) pay or reimburse each Lender, each Issuing Lender and the Agent on
demand for all reasonable costs and expenses incurred by them in connection
with the enforcement, attempted enforcement, or preservation of any rights
or remedies (including in connection with any "workout" or restructuring
regarding the Loans, and including in any Insolvency Proceeding) under this
Agreement (including the guaranty contained in Article X), any other Loan
Document, and any such other documents, including Attorney Costs incurred
by the Agent, each Issuing Lender and any Lender and any reasonable cost of
any consultants retained by the Agent in connection therewith; and
(c) pay or reimburse the Agent and each Issuing Lender on demand for
all appraisal (including, without duplication, the allocated cost of
internal appraisal services), audit, environmental inspection and review
(but, in the case of any such environmental inspection or review, only to
the extent that a notice has been delivered pursuant to Section 7.03(c) or
Holdings or any of its Subsidiaries shall be in violation of Section 7.07
to the extent that such violation relates to any Environmental Law or
Environmental Claim) (including, without duplication, the allocated cost of
such internal services), search and filing costs, fees and expenses,
incurred or sustained by the Agent in connection with the matters referred
to under paragraph (b) of this Section 12.04.
12.05 Indemnity. Whether or not the transactions contemplated hereby
shall be consummated, the Borrower shall pay, indemnify, and hold each Lender,
each Issuing Lender, the Swingline Lender, the Agent, the Arranger, the
Syndication Agent and each of their respective officers, directors, employees,
counsel, agents and attorneys-in-fact (each, an "Indemnified Person") harmless
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, charges, expenses or disbursements
(including Attorney Costs) of any kind or nature whatsoever with respect to (a)
any investigation, litigation
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or proceeding (including any Insolvency Proceeding) related to this Agreement or
the Loan Documents or the Loans or the Letters of Credit, or the use of the
proceeds thereof, whether or not any Indemnified Person is a party thereto and
(b) the actual or alleged presence of Hazardous Materials in the air, surface
water or groundwater or on the surface or subsurface of any property owned,
leased or at any time operated by Holdings or any of its Subsidiaries, the
generation, storage, transportation, handling or disposal of Hazardous Materials
at any location by Holdings or any of its Subsidiaries, whether or not owned,
leased or operated by Holdings or any of its Subsidiaries, the noncompliance of
any property owned, leased or operated by Holdings or any of its Subsidiaries
with Environmental Laws (including applicable permits thereunder) applicable to
any such property, or any Environmental Claim asserted against Holdings, any of
its Subsidiaries or any property owned, leased or at any time operated by
Holdings or any of its Subsidiaries (all the foregoing described in (a) and (b)
above, collectively, the "Indemnified Liabilities"); provided, however, that the
Borrower shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities arising from the gross negligence or willful
misconduct of such Indemnified Person as the same is determined by a final
judgment of a court of competent jurisdiction. The obligations in this Section
12.05 shall survive payment of all other Obligations.
12.06 Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that neither the Borrower nor Holdings
may assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of the Agent and each Lender.
12.07 Assignments, Participations, etc. (a) Any Lender may, with
the written consent of the Borrower, the Agent, the Swingline Lender and Bank of
America as Issuing Lender, which consents shall not be unreasonably withheld or
delayed, at any time assign and delegate to one or more Eligible Assignees
(provided that no written consent of (x) the Borrower shall be required either
in connection with any assignment and delegation by a Lender to an Eligible
Assignee that is a Lender or a Lender Affiliate of such Lender or at any time
that an Event of Default shall exist and (y) the Swingline Lender in its
capacity as such and Bank of America in its capacity as an Issuing Lender shall
be required in connection with an assignment of outstanding Term Loans) (each an
"Assignee") all, or any ratable part of all, of the Loans, Commitments and the
other rights and obligations of such Lender hereunder (although such assignments
do not have to be pro rata among the respective Tranches); provided, however,
that any such assignment to an Eligible Assignee which is not a Lender or a
Lender Affiliate shall be in a minimum amount equal to the lesser of $5,000,000
or the full amount of the assignor Lender's outstanding Loans and Commitments;
and provided, still further, that the Borrower, the Issuing Lenders, the
Swingline Lender and the Agent may continue to deal solely and directly with
such Lender in connection with the interest so assigned to an Assignee until (i)
written notice of such assignment, together with payment instructions, addresses
and related information with respect to the Assignee, shall have been given to
the Borrower and the Agent by such Lender and the Assignee; (ii) such Lender and
its Assignee shall have delivered to the Borrower and the Agent an Assignment
and Acceptance in the form of Exhibit L ("Assignment and Acceptance"); (iii)
such assignment is recorded by the Agent in the Register pursuant to Section
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2.02 and (iv) in the case of any assignment to an Assignee which is not already
a Lender, the assignor Lender or Assignee has paid to the Agent a processing fee
in the amount of $3,500; and provided, still further, that any assignment
hereunder of the Revolving Commitment and Revolving Loans must include an equal
percentage of the assignor Lender's Revolving Commitment and Revolving Loans.
At the time of each assignment pursuant to this Section 12.07(a) to a Person
which is not already a Lender hereunder and which is not a United States person
(as such term is defined in Section 7701(a)(30) of the Code) for Federal income
taxes purposes, the respective assignee Lender shall provide to the Borrower and
the Administrative Agent the appropriate Internal Revenue Service Form (and, if
applicable a Section 4.01(f) Certificate) described in Section 4.01(f).
(b) From and after the date that the Agent notifies the assignor
Lender that the requirements of paragraph (a) above are satisfied, (i) the
Assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall have the rights and obligations of a Lender under the Loan
Documents, and (ii) the assignor Lender shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Loan Documents. Anything herein to the
contrary notwithstanding, any Lender assigning all of its Loans, Commitments and
other rights and obligations hereunder to an Assignee shall continue to have the
benefit of all indemnities hereunder following such assignment.
(c) Immediately upon each Assignee's making its payment under the
Assignment and Acceptance and the recordation of same by the Agent in the
Register pursuant to Section 2.02, this Agreement, shall be deemed to be amended
to the extent, but only to the extent, necessary to reflect the addition of the
Assignee and the resulting adjustment of the Aggregate Commitment and the
outstanding Loans arising therefrom.
(d) Any Lender may at any time sell to one or more banks or other
Persons (a "Participant") participating interests in any Loans, the Commitments
of such Lender and the other interests of such Lender (the "Originating Lender")
hereunder and under the other Loan Documents; provided, however, that (i) the
Originating Lender's obligations under this Agreement shall remain unchanged,
(ii) the Originating Lender shall remain solely responsible for the performance
of such obligations, (iii) the Borrower, the Issuing Lenders and the Agent shall
continue to deal solely and directly with the Originating Lender in connection
with the Originating Lender's rights and obligations under this Agreement and
the other Loan Documents, and (iv) no Lender shall transfer or grant any
participating interest under which the Participant shall have rights to approve
any amendment to, or any consent or waiver with respect to, this Agreement or
any other Loan Document, provided that such Participant shall have the right to
approve any amendment, consent or waiver described in clauses (ii) and (iv) of
the first proviso to Section 12.01. In the case of any such participation, the
Participant shall be entitled to the benefit of Sections 4.01, 4.03, 4.06 and
12.05, subject to the same limitations, as though it were also a Lender
hereunder, subject to clause (f) below, and if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall, to the extent
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permitted under applicable law, be deemed to have the right of set-off in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement.
(e) Notwithstanding any other provision contained in this Agreement
or any other Loan Document to the contrary, (i) any Lender may assign all or any
portion of the Loans held by it to any Federal Reserve Bank or the United States
Treasury as collateral security pursuant to Regulation A of the Federal Reserve
Board and any Operating Circular issued by such Federal Reserve Bank, provided
that any payment in respect of such assigned Loans made by the Borrower to or
for the account of the assigning or pledging Lender in accordance with the terms
of this Agreement shall satisfy the Borrower's obligations hereunder in respect
to such assigned Loans to the extent of such payment and (ii) with the consent
of the Agent, any Lender which is a fund may pledge all or any portion of its
Loans to its trustee in support of its obligations to its trustee. No such
assignment shall release the assigning Lender from its obligations hereunder.
(f) No Participant shall be entitled to receive any greater payment
under Sections 4.01, 4.03 or 4.06 than such Originating Lender would have been
entitled to receive with respect to the rights transferred unless such transfer
is made with the Borrower's prior written consent.
12.08 Confidentiality. Each Lender agrees to take normal and
reasonable precautions and exercise due care to maintain the confidentiality of
all information provided to it by Holdings, the Borrower or any Subsidiary of
Holdings, or by the Agent on Holdings', the Borrower's or such Subsidiary's
behalf, in connection with this Agreement or any other Loan Document, and
neither it nor any of its Affiliates shall use any such information for any
purpose or in any manner other than pursuant to the terms contemplated by this
Agreement; except to the extent such information (a) was or becomes generally
available to the public other than as a result of a disclosure by the Lender, or
(b) was or becomes available on a non-confidential basis from a source other
than the Borrower or Holdings, provided that such source is not bound by a
confidentiality agreement with the Borrower or Holdings, known to the Lender;
provided further, however, that any Lender may disclose such information (i) at
the request or pursuant to any requirement of any Governmental Authority to
which the Lender is subject or in connection with an examination of such Lender
by any such authority; (ii) pursuant to subpoena or other court process; (iii)
when required to do so in accordance with the provisions of any applicable
Requirement of Law; (iv) to the extent reasonably required in connection with
any litigation or proceeding to which the Agent, such Lender or their respective
Affiliates may be party; (v) to the extent reasonably required in connection
with the exercise of any remedy hereunder or under any other Loan Document; and
(vi) to such Lender's independent auditors, other professional advisors and
employees of such Lender's Lender Affiliates (or any Affiliate of such Lender
engaged in capital market transactions generally) retained by such Lender in
connection with this Agreement so long as such Persons agree to maintain the
confidentiality of all such information disclosed to them. Notwithstanding the
foregoing, the Borrower authorizes each Lender to disclose to any Participant or
Assignee (each, a "Transferee") and to any prospective Transferee, such
financial and other information in such Lender's possession concerning the
Borrower or its Subsidiaries or Holdings which has been delivered to Agent or
the Lenders pursuant to this Agreement or which has been delivered to the Agent
or the Lenders by the Borrower or Holdings in connection with
-124-
the Lenders' credit evaluation of the Borrower prior to entering into this
Agreement; provided that, unless otherwise agreed by the Borrower or Holdings,
such Transferee agrees in writing to such Lender to keep such information
confidential to the same extent required of the Lenders hereunder.
12.09 Set-off. In addition to any rights and remedies of the Lenders
provided by law, if an Event of Default occurs and is continuing, each Lender is
authorized at any time and from time to time, without prior notice to the
Borrower or Holdings, any such notice being waived by the Borrower and Holdings
to the fullest extent permitted by law, to set off and apply, to the extent
permitted by applicable law, any and all deposits (general or special, time or
demand, provisional or final) at any time held by, and other indebtedness at any
time owing to, such Lender to or for the credit or the account of the Borrower
or Holdings against any and all Obligations owing to such Lender, now or
hereafter existing, irrespective of whether or not the Agent or such Lender
shall have made demand under this Agreement or any other Loan Document and
although such Obligations may be contingent or unmatured. Each Lender agrees
promptly to notify the Borrower or Holdings and the Agent after any such set-off
and application made by such Lender; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Lender under this Section 12.09 are in addition to the other
rights and remedies (including other rights of set-off) which such Lender may
have.
12.10 Notification of Addresses, Lending Offices, etc. Each Lender
shall notify the Agent in writing of any changes in the address to which notices
to such Lender should be directed, of addresses of its Lending Office, of
payment instructions in respect of all payments to be made to it hereunder and
of such other administrative information as the Agent shall reasonably request.
12.11 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement in any number of separate counterparts, each of
which, when so executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute but one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Borrower and the Agent.
12.12 Severability. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
12.13 No Third Parties Benefited. This Agreement is made and entered
into for the sole protection and legal benefit of the parties hereto and their
permitted successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement or any of the other Loan Documents.
None of the Agent, the Issuing Lender, the Swingline Lender or any Lender shall
have any obligation to any Person not a party to this Agreement or any other
Loan Document.
-125-
12.14 Governing Law and Jurisdiction. (a) THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT AND
ANY OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE
COURTS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO 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 ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE PARTIES HERETO EACH WAIVE
PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE
BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
12.15 Waiver of Jury Trial. THE PARTIES HERETO EACH WAIVE THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR
PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
THE PARTIES HERETO EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION 12.15 AS TO ANY ACTION, COUNTERCLAIM OR OTHER
PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
12.16 Domicile of Loans. Each Lender may transfer and carry its
Loans at, to or for the account of any office, Subsidiary or Affiliate of such
Lender. Notwithstanding anything to the contrary contained herein, to the
extent that a transfer of Loans pursuant to this Section 12.16 would, at the
time of such transfer, result in increased costs under Sections 4.01, 4.03 or
4.06 from those being charged by the respective Lender prior to such transfer,
then the Borrower shall not be obligated to pay such increased costs (although
the Borrower shall be
-126-
obligated to pay any other increased costs of the type described above resulting
from changes after the date of the respective transfer).
* * *
-127-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
GLOBE HOLDINGS, INC.
By /s/ T.A. Rodgers, III
----------------------------------
Title: President and Chief Executive
Officer
Address for notices:
456 Bedford Street
Fall River, MA 02720
Attn: Lawrence R. Walsh
Tel: 508-674-3585
Facsimile: 508-674-3580
with a copy to:
Code Hennessy & Simmons LLC
10 South Wacker Drive, Suite 3175
Chicago, IL 60606
Attn: Peter M. Gotsch
Tel: 312-876-9589
Facsimile 312-876-3854
GLOBE MANUFACTURING CORP.
By /s/ Lawrence R. Walsh
-------------------------------
Title: Vice President
Address for notices:
456 Bedford Street
Fall River, MA 02720
Attn: Lawrence R. Walsh
Tel: 508-674-3585
Facsimile: 508-674-3580
with a copy to:
Code Hennessy & Simmons LLC
10 South Wacker Drive, Suite 3175
Chicago, IL 60606
Attn: Peter M. Gotsch
Tel: 312-876-9589
Facsimile 312-876-3854
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Administrative Agent
By /s/ Dietmar Schiel
-----------------------------------------------
Title: Vice President
Address for notices of borrowing, prepayments and
other administrative matters:
1850 Gateway Boulevard, 5th Floor
Concord, CA 94520
Attn.: Agency Administrative
Services #5596
Josephine T. Flores,
Vice President
Facsimile: 925-675-8500
Tel: 925-675-8374
Address for all other notices (including with
respect to amendments and waivers):
1455 Market Street, 12th Floor
San Francisco, CA 94103
Attn.: Agency Management
#10831
Dietmar Schiel, Vice President
Facsimile: 415-436-3425
Tel: 415-436-2769
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Issuing Lender
By /s/ Elizabeth R. Borow
----------------------------------------
Title: Managing Director
Address for notices:
Bank of America National Trust and Savings
Association
CBG Letters of Credit (#32054)
200 W. Jackson Blvd., 17th Floor
Chicago, IL 60606
Attn.: Gail S. Miller
Facsimile: 312-987-6828
Tel: 312-923-5924
with a copy to:
1850 Gateway Boulevard, 5th Floor
Concord, CA 94520
Attn.: Agency Administrative Services
#5596
Josephine T. Flores,
Assistant Vice President
Facsimile: 510-675-8500
Tel: 510-675-8374
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Swingline Lender
By /s/ Elizabeth R. Borow
---------------------------
Title: Managing Director
231 South LaSalle Street
Chicago, IL 60697
Attn: Renee Waller
Facsimile: (312) 974-9626
Telephone: (312) 828-3874
with a copy to:
1850 Gateway Boulevard, 5th Floor
Concord, CA 94520
Attn: Agency Administrative Services #5596
Josephine T. Flores
Facsimile: (510) 675-8500
Telephone: (510) 675-8374
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as a Lender
By /s/ Elizabeth R. Borow
-----------------------------
Title: Managing Director
Address for notices:
231 South LaSalle Street
Chicago, IL 60697
Attn.: Renee Waller
Facsimile: 312-974-9626
Tel: 312-828-3874
With a copy to:
335 Madison Avenue, 6th Floor
New York, NY 10017
Attn.: Leveraged Finance #9618
Elizabeth Borow
Facsimile: 212-503-7502
Tel: 212-503-8236
MERRILL LYNCH CAPITAL CORPORATION, as a Lender
By /s/ Brian O'Callahan
----------------------------
Name: Brian O'Callahan
Title: Vice President
Address for notices:
World Financial Center
North Tower - 7th Floor
New York, New York 10281-1307
Cypress Tree Investment Fund, LLC
By: CypressTree Investment Management
Company, Inc., its Managing Manager
By: /s/ Catherine C. McDermott
---------------------------------
Title: Principal
Tim Barns
Cypress Tree Investment Management
125 High Street, 14th Floor
Oliver Tower
Boston, MA 02110
617-946-5670 Phone
617-946-5681 Fax
Cypress Tree Institutional Fund, LLC
By: CypressTree Investment Management
Company, Inc., its Managing Manager
By: /s/ Catherine C. McDermott
---------------------------------
Title: Principal
Tim Barns
Cypress Tree Investment Management
125 High Street, 14th Floor
Oliver Tower
Boston, MA 02110
617-946-5670 Phone
617-946-5681 Fax
Morgan Stanley Dean Witter Prime Income Trust
By: c/o Morgan Stanley Dean Witter Advisors,
Inc.
By: /s/ Sheila Finnery
--------------------------
Title: Vice President
Kevin Egan
c/o Morgan Stanley Dean Witter Advisors, Inc.
Two World Trade Center, 72nd Floor
New York, New York 10048
212-392-5845 Phone
212-392-5345 Fax
National City Bank
By: /s/ Diego Tobon
--------------------------
Title: Vice President
Frank Pagura
National City Bank
20 North Wacker Drive, Suite 3012
Chicago, Illinois 60606
312-240-0301 Phone
312-240-0356 Fax
BHF-Bank Aktiengesellschaft
By: /s/ Linda Pace
---------------------------
Title: Vice President
By: /s/ Thomas Scifo
---------------------------
Title: Assistant Vice President
Linda Pace
BHF-Bank AG
590 Madison Avenue, 30th Floor
New York, New York 10022
212-756-5915 Phone
212-756-5536 Fax
State Street Bank and Trust Company
By: /s/ Thomas M. O'Reilly
------------------------------
Title: Vice President
Tom O'Reilly
State Street Bank
225 Franklin Street
Boston, MA 02110
617-654-3833 Phone
617-664-4176 Fax
First Source Financial LLP
By: First Source Financial, Inc. its
Agent/Manager
By: /s/ James W. Wilson
-----------------------------
Title: Senior Vice President
Jason Gelberd
First Source Financial, Inc.
2850 West Golf Road, 5th Floor
Rolling Meadows, IL 60008
847-734-2045 Phone
847-734-7910 Fax
Fleet National Bank
/s/ Oliver Bennett
By:____________________________________
Title: Vice President
Oliver Bennett
Fleet National Bank
111 Westminster Street
MS: RI-MO-235
Providence, RI 02903
401-278-5289 Phone
401-278-5276 Fax
Heller Financial, Inc.
/s/ Kathi J. Inorio
By:____________________________________
Title: Vice President
Kathi J. Inorio
Heller Financial, Inc.
500 West Monroe Street
Chicago, IL 60661
312-441-7775 Phone
312-441-7357 Fax
The Mitsubishi Trust and Banking Corporation
/s/ Noboo Tominaga
By:_____________________________________
Title: Chief Manager
John Pastore
Mitsubishi Trust
311 South Wacker Drive, Suite 6300
Chicago, IL 60606-6622
312-408-6051 Phone
312-663-0863 Fax
Union Bank of California, N.A.
By: /s/ Peter W. Clark
--------------------------------
Title: Vice President
Peter Clark
Union Bank of California
350 California Street, 6th Floor
San Francisco, CA 94104
415-705-7307 Phone
415-705-7567 Fax
SunTrust Bank
/s/ Bradley J. Staples
By:__________________________________
Title: Vice President
/s/ Brenda Zino
By:__________________________________
Title: Banking Officer
Brad Staples
Brenda Zino
SunTrust Bank
303 Peachtree Road
Atlanta, GA 30305
404-230-5099 Phone
404-575-2594 Fax
Allstate Insurance Company
By: /s/ Patricia W. Wilson
---------------------------
Title: Authorized Signatory
By: /s/ Jerry D. Zinkula
---------------------------
Title: Authorized Signatory
Chris Goergen
Allstate Insurance Company
3075 Sanders Road, Suite G3A
Northbrook, IL 60062-7127
847-402-3095 Phone
847-402-3092 Fax
Allstate Life Insurance Company
By: /s/ Patricia W. Wilson
----------------------------
Title: Authorized Signatory
By: /s/ Jerry D. Zinkula
---------------------------
Title: Authorized Signatory
Chris Goergen
Allstate Insurance Company
3075 Sanders Road, Suite G3A
Northbrook, IL 60062-7127
847-402-3095 Phone
847-402-3092 Fax
KZH - CypressTree-1 Corporation
By: /s/ James Westonhaus
---------------------------
Title: Authorized Agent
Virginia Conway
KZH - CypressTree-1 Corporation
c/o The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, New York 10001
212-946-7575 Phone
212-946-7776 Fax
Lee Ann Duffy
Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, New York 10166-0193
212-351-3809 Phone
212-351-4035 Fax
CypressTree Investment Management Company, Inc.
As: Attorney-in-Fact and on behalf of First
Allmerica Financial Life Insurance Company as
Portfolio Manager
By: /s/ Catherine C. McDermott
-------------------------------
Title: Principal
Tim Barns
Cypress Tree Investment Management
125 High Street, 14th Floor
Oliver Tower
Boston, MA 02110
617-946-5670 Phone
617-946-5681 Fax
ARCHIMEDES FUNDING, L.L.C.
By: ING Capital Advisors, Inc.,
as Collateral Manger
By: /s/ Jane M. Nelson
------------------------------------
Title: Senior Vice President
ING HIGH INCOME PRINCIPAL PRESERVATION FUND
HOLDINGS, LDC
By: ING Capital Advisors, Inc., as Investment
Advisor
By: /s/ Jane M. Nelson
------------------------------------
Title: Senior Vice President
Jane Nelson
ING Capital Advisors
233 South Wacker Drive, Suite 5200
Chicago, IL 60606
312-496-7606 Phone
312-496-7611 Fax
SCHEDULE 1.01(A)
----------------
LENDING OFFICES
---------------
Bank of America National Trust
& Savings Association
231 South LaSalle Street
Chicago, IL 60697
Attn.: Renee Waller
Facsimile: 312-974-9626
Tel: 312-828-3874
Merrill Lynch Capital Corporation
World Financial Center
North Tower - 7th Floor
New York, NY 10281
Attn: Brian O'Callahan
Facsimile: (212) 449-8230
Tel: (212) 449-3097
Cypress Tree Investment Fund, LLC
125 High Street, 14th Floor
Oliver Tower
Boston, MA 02110
Attn: Tim Barns
Facsimile: 617-946-5681
Tel: 617-946-5670
Cypress Tree Institutional Fund, LLC
125 High Street, 14th Floor
Oliver Tower
Boston, MA 02110
Attn: Tim Barns
Facsimile: 617-946-5681
Tel: 617-946-5670
Morgan Stanley Dean Witter Prime Income Trust
c/o Morgan Stanley Dean Witter Advisors, Inc.
Two World Trade Center, 72nd Floor
New York, New York 10048
Attn: Kevin Egan
Facsimile: 212-392-5345
Tel: 212-392-5845
National City Bank
20 North Wacker Drive, Suite 3012
Schedule 1.01(a)
Page 2
Chicago, Illinois 60606
Attn:
Facsimile: 312-240-0356
Tel: 312-240-0301
BHF-Bank Aktiengesellschaft
590 Madison Avenue, 30th Floor
New York, New York 10022
Attn: Linda Pace
Facsimile: 212-756-5536
Tel: 212-756-5915
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Attn: Tom O'Reilly
Facsimile: 617-664-4176
Tel: 617-654-3833
First Source Financial LLP
2850 West Golf Road, 5th Floor
Rolling Meadows, IL 60008
Attn: Jason Gelberd
Facsimile: 847-734-7910
Tel: 847-734-2045
Fleet National Bank
111 Westminster Street
MS: RI-MO-235
Providence, RI 02903
Attn: Oliver Bennett
Facsimile: 401-278-5276
Tel: 401-278-5289
Heller Financial, Inc.
500 West Monroe Street
Chicago, IL 60661
Attn: Kathi J. Inorio
Facsimile: 312-441-7357
Tel: 312-441-7775
The Mitsubishi Trust and Banking Corporation
311 South Wacker Drive, Suite 6300
Chicago, IL 60606-6622
Attn: John Pastore
Schedule 1.01(a)
Page 3
Facsimile: 312-663-0863
Tel: 312-408-6051
Union Bank of California, N.A.
350 California Street, 6th Floor
San Francisco, CA 94104
Attn: Peter Clark
Facsimile: 415-705-7567
Tel: 415-705-7307
SunTrust Bank
303 Peachtree Road
Atlanta, GA 30305
Attn: Brad Staples
Facsimile: 404-575-2594
Tel: 404-230-5099
Allstate Insurance Company
3075 Sanders Road, Suite G3A
Northbrook, IL 60062-7127
Attn: Chris Goergen
Facsimile: 847-402-3092
Tel: 847-402-3095
Allstate Life Insurance Company
3075 Sanders Road, Suite G3A
Northbrook, IL 60062-7127
Attn: Chris Goergen
Facsimile: 847-402-3092
Tel: 847-402-3095
KZH - CypressTree-1 Corporation
c/o The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, New York 10001
Attn: Virginia Conway
Facsimile: 212-946-7776
Tel: 212-946-7575
and
Lee Ann Duffy
Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, New York 10166-0193
Schedule 1.01(a)
Page 4
Facsimile: 212-351-4035
Tel: 212-351-3809
CypressTree Investment Management Company, Inc.
125 High Street, 14th Floor
Oliver Tower
Boston, MA 02110
Attn: Tim Barns
Facsimile: 617-946-5681
Tel: 617-946-5670
ING Capital Advisors
233 South Wacker Drive, Suite 5200
Chicago, IL 60606
Attn: Jane Nelson
Facsimile: 312-496-7611
Tel: 312-496-7606
Schedule 1.01(b)
COMMITMENTS
-----------
- -----------------------------------------------------------------------------------------------------------
Tranche A Tranche B
Term Loan Term Loan Revolving
Lender Commitment Commitment Commitment
- ------ ---------- ---------- ----------
- -----------------------------------------------------------------------------------------------------------
Bank of America National Trust & Savings
Association $ 7,909,090.90 $ 22,000,000 $ 6,590,909.09
Merrill Lynch Capital Corporation $ 6,818,181.82 $ 0 $ 5,681,818.18
Fleet National Bank $ 6,000,000.00 $ 0 $ 5,000,000.00
BHF-Bank Aktiengesellschaft $ 4,909,090.91 $ 0 $ 4,090,909.09
First Source Financial LLP $ 4,909,090.91 $ 0 $ 4,090,909.09
Heller Financial, Inc. $ 4,909,090.91 $ 0 $ 4,090,909.09
Mitsubishi Trust and Banking Corporation $ 4,909,090.91 $ 0 $ 4,090,909.09
National City Bank $ 4,909,090.91 $ 0 $ 4,090,909.09
State Street Bank and Trust Company $ 4,909,090.91 $ 0 $ 4,090,909.09
Sun Trust Bank $ 4,909,090.91 $ 0 $ 4,090,909.09
Union Bank of California, N.A. $ 4,909,090.91 $ 0 $ 4,090,909.09
Allstate Insurance Company $ 0 $ 2,666,666.67 $ 0
Allstate Life Insurance Company $ 0 $ 5,333,333.33 $ 0
Morgan Stanley Dean Witter Prime Income Trust $ 8,000,000.00 $ 0
$ 0
KZH-Cypress Tree-1 Corporation $ 0 $ 5,500,000.00 $ 0
Cypress Tree Investment Management Company, $ 0
Inc. $ 0 $ 1,000,000.00
Cypress Tree Investment Funds, LLC $ 0 $ 1,000,000.00 $ 0
Cypress Tree Institutional Fund, LLC $ 0 $ 1,000,000.00 $ 0
Archimedes Funding, L.L.C. $ 0 $ 5,000,000.00 $ 0
ING High Income Principal Preservation Fund $ 0 $ 3,500,000.00 $ 0
Holdings, LDC
Total $60,000,000.00 $55,000,000.00 $50,000,000.00
============== ============== ==============
- -----------------------------------------------------------------------------------------------------------
SCHEDULE 1.01(c)
Subsidiary Guarantors
None
SCHEDULE 1.01(d)
Indebtedness to be Refinanced
Term and Revolving Credit $69,065,231.51
Facility with a syndicate of lenders and
Fleet National Bank, as agent
SCHEDULE 6.09
Real Property
Schedule 6.09 lists Globe Manufacturing Corp's owned and leased real property.
SCHEDULE 6.15
Subsidiaries
Schedule 6.15 lists the subsidiaries of Globe Holdings, Inc. and Globe
Manufacturing Corp.
SCHEDULE 6.24
Insurance
Schedule 6.24 lists the insurance coverage for Globe Holdings, Inc. and its
subsidiaries.
SCHEDULE 8.01
Existing Liens
Schedule 8.01 lists the existing liens of Globe Holdings, Inc. and Globe
Manufacturing Corp.
SCHEDULE 8.04
Existing Indebtedness
Schedule 8.04 lists certain existing indebtedness of Globe Holdings, Inc. and
Globe Manufacturing Corp.
SCHEDULE 8.05
Existing Investments
Schedule 8.05 lists certain investments held by Globe Holdings, Inc. and Globe
Manufacturing Corp.
Exhibit A
Form of Notice of Borrowing
Exhibit B
Form of Notice of Conversion/Continuation
Exhibit C
Form of Pledge Agreement
Exhibit D
Form of Subsidiary Guaranty
Exhibit E
Form of Guarantor Supplement
Exhibit F
Form of Security Agreement
Exhibit G
Form of Leverage Ratio Certificate
Exhibit H-1
Form of Kirkland & Ellis Opinion
Exhibit H-2
Form of Palmer & Dodge Opinion
Exhibit H-3
Form of Maynard & Cooper Opinion
Exhibit H-4
Form of Moore & Van Allen Opinion
Exhibit I
Form of White & Case LLP Opinion
Exhibit J
Form of Holdings Shareholder Subordinated Note
Exhibit K
Form of Compliance Certificate
Exhibit L
Form of Assignment and Acceptance
Exhibit M
Form of Intercompany Note
Exhibit N
Form of Section 4.01(f) Certificate