1
Execution Copy
================================================================================
U.S. $85,000,000
CREDIT AGREEMENT
DATED AS OF DECEMBER 11, 1997
AMONG
SAC AUTOMOTIVE, INC.,
STANADYNE AUTOMOTIVE CORP.,
THE LENDERS LISTED HEREIN,
AS LENDERS,
DLJ CAPITAL FUNDING, INC.,
AS SYNDICATION AGENT,
THE FIRST NATIONAL BANK OF CHICAGO,
AS ADMINISTRATIVE AGENT.
ARRANGED BY:
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
2
EXHIBIT 10.1
SAC AUTOMOTIVE, INC.
STANADYNE AUTOMOTIVE CORP.
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of December 11, 1997 and
entered into by and among SAC AUTOMOTIVE, INC., a Delaware corporation ("SAC"),
STANADYNE AUTOMOTIVE CORP., a Delaware corporation as borrower after the
consummation of the Acquisition, THE LENDERS LISTED ON THE SIGNATURE PAGES
HEREOF (each individually referred to herein as a "LENDER" and collectively as
"LENDERS"), DLJ CAPITAL FUNDING, INC. ("DLJ"), as syndication agent hereunder
for Lenders (in such capacity, "SYNDICATION AGENT"), and THE FIRST NATIONAL BANK
OF CHICAGO ("FNBC"), as administrative agent for Lenders (in such capacity,
"ADMINISTRATIVE AGENT").
R E C I T A L S
WHEREAS, on the Closing Date (this and other capitalized terms
used in these recitals without definition being used as defined in subsection
1.1) (i) SAC, Inc. ("HOLDINGS"), all the capital stock of which is owned by
American Industrial Partners Capital Fund II, L.P. ("AIP"), its related
investors and certain members of management of Stanadyne, will purchase 100% of
the capital stock of Stanadyne Automotive Holding Corp. ("SAHC"), which as of
the Closing Date before the Acquisition owns 100% of Stanadyne Automotive Corp.
("STANADYNE"), (ii) SAHC will be merged with and into STANADYNE with Stanadyne
being the surviving corporation, (iii) SAC will be merged into Stanadyne with
Stanadyne being the surviving corporation and (iv) Holdings will change its name
to Stanadyne Automotive Holding Corp.
WHEREAS, Company will receive $100,000,000 of gross proceeds
from an offering of Senior Subordinated Notes, Holdings will receive $60,000,000
contributed by AIP, its related investors and certain members of management in
exchange for the common equity of Holdings (the "EQUITY CONTRIBUTION") and
Company will loan $68,200,000 of the net proceeds from the issuance and sale of
the Senior Subordinated Notes, together with the proceeds of Loans made pursuant
hereto to Holdings pursuant to an intercompany note (the "INTERCOMPANY NOTE").
1
3
WHEREAS, Lenders have agreed to extend certain credit
facilities to the Company, the proceeds of which together with the proceeds of
the Senior Subordinated Notes and the Equity Contribution will be used by
Holdings to purchase or redeem 100% of the issued and outstanding capital stock
of SAHC and by Company (i) to repay in full all indebtedness outstanding under
the Existing Credit Agreement (the "REFINANCING"), (ii) to pay the Transaction
Costs, and (iii) to provide for working capital and/or other general purposes of
Company and its Subsidiaries.
WHEREAS, Company desires to secure all of the Obligations
hereunder and under the other Loan Documents by granting to Administrative
Agent, on behalf of Lenders, a first priority Lien on substantially all of its
personal property and certain of its real property including a pledge of all of
the capital stock of its Domestic Subsidiaries and a pledge of 65% of the
capital stock of its Foreign Subsidiaries that are owned by Company or a
Domestic Subsidiary.
WHEREAS, Holdings and all of its Domestic Subsidiaries of the
Company have agreed to guarantee the obligations hereunder and under the other
Loan Documents and each Domestic Subsidiary has agreed to secure its guaranties
by granting to Administrative Agent on behalf of Lenders, a first priority lien
on substantially all of its respective personal property and certain of its
respective real property including a pledge of all of the capital stock of each
of its Domestic Subsidiaries and 65% of the capital stock of each of its Foreign
Subsidiaries that is owned by Company or a Domestic Subsidiary:
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Company, Lenders,
Syndication Agent and Administrative Agent agree as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the
following meanings:
"ACCOUNTS RECEIVABLE" means, as at any date of determination
thereof, the unpaid portion of the obligations as stated on the respective
invoice issued to a customer of Company or the Subsidiary Guarantors with
respect to Inventory sold and shipped or services performed in the ordinary
course of business, net of any credits, rebates or offsets owed by Company or
the Subsidiary Guarantors to the respective customer and net of any commissions
payable by Company or the Subsidiary Guarantors to third parties; provided that
no intercompany account shall be an Account Receivable.
2
4
"ACQUISITION" means the transaction whereby Holdings will own
directly or indirectly 100% of the capital stock of Stanadyne.
"ACQUISITION AGREEMENT" means that certain Stock Purchase
Agreement among the Old Holders, SAHC, and Holdings dated as of November 7,
1997.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date with respect to an Interest Period for a Eurodollar Rate
Loan, the rate per annum obtained by dividing (i) the offered quotation (rounded
upward to the nearest 1/16 of one percent) to first class banks in the London
interbank market by FNBC for U.S. dollar deposits of amounts in same day funds
comparable to the principal amount of the Eurodollar Rate Loan of FNBC for which
the Adjusted Eurodollar Rate is then being determined (which principal amount
shall be deemed to be $1,000,000 in the event FNBC is not making, converting to
or continuing such a Eurodollar Rate Loan) with maturities comparable to such
Interest Period as of approximately 11:00 a.m. (New York time) on such Interest
Rate Determination Date by (ii) a percentage equal to 100% minus the stated
maximum rate of all reserve requirements (including any marginal, emergency,
supplemental, special or other reserves) applicable on such Interest Rate
Determination Date to any member bank of the Federal Reserve System in respect
of "Eurocurrency liabilities" as defined in Regulation D (or any successor
category of liabilities under Regulation D).
"ADMINISTRATIVE AGENT" has the meaning assigned to that term in
the introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 9.5A.
"AFFECTED LENDER" has the meaning assigned to that term in
subsection 2.6C.
"AFFILIATE", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
"AGENTS" means, collectively, the Syndication Agent and the
Administrative Agent.
"AGREEMENT" means this Credit Agreement dated as of
December 11, 1997, as it may be amended, supplemented or otherwise modified from
time to time.
"AIP" has the meaning set forth in the recitals hereto.
3
5
"ARRANGER" means Donaldson, Lufkin & Jenrette Securities
Corporation, as arranger of the credit facilities described herein.
"ASSET SALE" means the sale by Company or any of its
Subsidiaries to any Person other than Company or any of its wholly-owned
Subsidiaries of (i) any of the stock of any of Company's Subsidiaries,
(ii) substantially all of the assets of any division or line of business of
Company or any of its Subsidiaries, or (iii) any other assets (whether tangible
or intangible) of Company or any of its Subsidiaries (other than (a) inventory
sold in the ordinary course of business, (b) Cash Equivalents, (c) obsolete,
excess or surplus equipment sold for not in excess of $250,000 in the aggregate
for each Fiscal Year and (d) any such other assets to the extent that (i) the
aggregate value of such assets sold in any single transaction or related series
of transactions is equal to $200,000 or less and (ii) the aggregate value of
such assets sold in any Fiscal Year is equal to $2,000,000 or less).
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of Exhibit X annexed hereto.
"AUXILIARY PLEDGE AGREEMENT", means each pledge agreement or
similar instrument governed by the laws of a country other than the United
States executed in accordance with subsection 6.8 by Company or any Domestic
Subsidiary that owns capital stock of the Foreign Subsidiaries organized in such
country in form and substance satisfactory to Administrative Agent as such
Auxiliary Pledge Agreement may be amended, supplemented or otherwise modified
from time to time and "AUXILIARY PLEDGE AGREEMENTS" means all such pledge
agreements, collectively.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor statute.
"BASE RATE" means, at any time, the higher of (x) the Prime
Rate or (y) the rate which is 1/2 of 1% in excess of the Federal Funds Effective
Rate.
"BASE RATE LOANS" means Loans bearing interest at rates
determined by reference to the Base Rate as provided in subsection 2.2A.
"BORROWING BASE" means, as at any date of determination, the
sum of (i) 50% of Eligible Inventory and (ii) 80% of Eligible Accounts
Receivable.
"BORROWING BASE CERTIFICATE" means a certificate substantially
in the form of Exhibit XXIII annexed hereto delivered to Administrative Agent
and Lenders by Borrower pursuant to subsection 6.1(v).
"BUSINESS DAY" means (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which is a
legal holiday
4
6
under the laws of the State of New York or is a day on which banking
institutions located in such state are authorized or required by law or other
governmental action to close, and (ii) with respect to all notices,
determinations, fundings and payments in connection with the Adjusted Eurodollar
Rate or any Eurodollar Rate Loans, any day that is a Business Day described in
clause (i) above and that is also a day for trading by and between banks in
Dollar deposits in the London interbank market.
"CAPITAL LEASE", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"CASH" means money, currency or a credit balance in a Deposit
Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, the highest rating
obtainable from either Standard & Poor's Ratings Group ("S&P") or Moody's
Investors Service, Inc. ("MOODY'S"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; and (v) shares of any money market mutual fund that (a)
has at least 95% of its assets invested continuously in the types of investments
referred to in clauses (i) and (ii) above, (b) has net assets of not less than
$500,000,000, and (c) has the highest rating obtainable from either S&P or
Moody's.
"CERTIFICATE RE NON-BANK STATUS" means a certificate
substantially in the form of Exhibit XI annexed hereto delivered by a Lender to
Administrative Agent pursuant to subsection 2.7B(iii).
"CLOSING DATE" means December 11, 1997.
"COLLATERAL" means, collectively, all of the real, personal and
mixed property (including capital stock) in which Liens are purported to be
granted pursuant to the Collateral Documents as security for the Obligations.
5
7
"COLLATERAL DOCUMENTS" means the Holdings Pledge Agreement,
Company Copyright Security Agreement, the Company Pledge Agreement, the Company
Security Agreement, the Company Trademark Security Agreement, the Company Patent
Security Agreement the Subsidiary Pledge Agreements, the Auxiliary Pledge
Agreements, the Subsidiary Security Agreements, the Subsidiary Trademark
Security Agreements, the Mortgages and all other instruments or documents
delivered by any Loan Party pursuant to this Agreement or any of the other Loan
Documents in order to grant to Administrative Agent, on behalf of Lenders, a
Lien on any real, personal or mixed property of that Loan Party as security for
the Obligations.
"COMMERCIAL LETTER OF CREDIT" means any letter of credit or
similar instrument, including those listed on Schedule 3.1, issued for the
purpose of providing the primary payment mechanism in connection with the
purchase of any materials, goods or services by Company or any of its
Subsidiaries in the ordinary course of business of Company or such Subsidiary.
"COMMITMENTS" means the commitments of Lenders to make Loans as
set forth in subsection 2.1A.
"COMPANY" means (i) prior to the consummation of the
Acquisition, SAC Automotive, Inc. and (ii) after the consummation of the
Acquisition, Stanadyne Automotive Corp.
"COMPANY COPYRIGHT SECURITY AGREEMENT" means the Company
Copyright Security Agreement executed and delivered by Company on the Closing
Date, substantially in the form of Exhibit XII annexed hereto, as such Company
Copyright Security Agreement may thereafter be amended, supplemented or
otherwise modified from time to time.
"COMPANY PATENT SECURITY AGREEMENT" means the Company Patent
Security Agreement executed and delivered by Company on the Closing Date, in
substantially the form of Exhibit XXIV annexed hereto, as such Company Patent
Security Agreement may thereafter be amended, supplemented or otherwise modified
from time to time.
"COMPANY PLEDGE AGREEMENT" means the Company Pledge Agreement
executed and delivered by Company on the Closing Date, substantially in the form
of Exhibit XIII annexed hereto, as such Company Pledge Agreement may thereafter
be amended, supplemented or otherwise modified from time to time.
"COMPANY SECURITY AGREEMENT" means the Company Security
Agreement executed and delivered by Company on the Closing Date, substantially
in the form of Exhibit XIV annexed hereto, as such Company Security Agreement
may thereafter be amended, supplemented or otherwise modified from time to time.
6
8
"COMPANY TRADEMARK SECURITY AGREEMENT" means the Company
Trademark Security Agreement executed and delivered by Company on the Closing
Date, substantially in the form of Exhibit XV annexed hereto, as such Company
Trademark Security Agreement may thereafter be amended, supplemented or
otherwise modified from time to time.
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of Exhibit VII annexed hereto delivered to Agents and Lenders by
Company pursuant to subsection 6.1(iv).
"CONFORMING LEASEHOLD INTEREST" means any Recorded Leasehold
Interest as to which the lessor has agreed in writing for the benefit of
Administrative Agent (which writing has been delivered to Administrative Agent),
whether under the terms of the applicable lease, under the terms of a Landlord
Consent and Estoppel, or otherwise, to the matters described in the definition
of "Landlord Consent and Estoppel," which interest, if a subleasehold or
sub-subleasehold interest, is not subject to any contrary restrictions contained
in a superior lease or sublease.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
sum of (i) the aggregate of all expenditures (whether paid in cash or other
consideration or accrued as a liability and including that portion of Capital
Leases which is capitalized on the consolidated balance sheet of Company and its
Subsidiaries) by Company and its Subsidiaries during that period that, in
conformity with GAAP, are included in "additions to property, plant or
equipment" or comparable items reflected in the consolidated statement of cash
flows of Company and its Subsidiaries plus (ii) to the extent not covered by
clause (i) of this definition, the aggregate of all expenditures by Company and
its Subsidiaries during that period to acquire (by purchase or otherwise) the
business, property or fixed assets of any Person, or the stock or other evidence
of beneficial ownership of any Person that, as a result of such acquisition,
becomes a Subsidiary of Company.
"CONSOLIDATED EBITDA" means, for any period, the sum of the
amounts for such period of (i) Consolidated Net Income, (ii) Consolidated
Interest Expense, (iii) provisions for taxes based on income, (iv) total
depreciation, amortization and other non-cash charges required to be reflected
as expenses on the books and records of Company, (v) and Transaction Costs,
minus (vi) cash payments with respect to any non-recurring, non-cash charges
previously added back pursuant to clause (iv), excluding the impact of foreign
currency translations, all of the foregoing as determined on a consolidated
basis for Company and its Subsidiaries in conformity with GAAP.
"CONSOLIDATED EXCESS CASH FLOW" means, for any period, an
amount (if positive) equal to (i) Consolidated EBITDA for such period minus (ii)
the sum, without duplication, of the amounts for such period of (a) voluntary
and scheduled repayments of Consolidated Total Debt (excluding repayments of
Revolving Loans except to the extent the
7
9
Revolving Loan Commitments are permanently reduced in connection with such
repayments), (b) Consolidated Capital Expenditures (without duplication, net of
any proceeds of any related financings with respect to such expenditures), (c)
Consolidated Interest Expense, (d) taxes based on income of Company and its
Subsidiaries and payable in cash with respect to such period, (e) without
duplication, Restricted Junior Payments permitted by subsection 7.5, (f)
Transaction Costs and (g) EBITDA attributable to Stanadyne Italy.
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum
(without duplication) of the amounts for such period of (i) Consolidated
Interest Expense and (ii) scheduled principal payments after the Closing Date in
respect of Consolidated Total Debt, all of the foregoing as determined on a
consolidated basis for Company and its Subsidiaries in conformity with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest) of Company and its Subsidiaries
on a consolidated basis with respect to all outstanding Indebtedness of Company
and its Subsidiaries (after giving effect to all Interest Rate Agreements),
including net costs under Interest Rate Agreements. For purposes of calculating
Consolidated Fixed Charges pursuant to subsection 7.6A, Consolidated Interest
Expense for the four Fiscal Quarter period ending (i) March 31, 1998 shall equal
four times Consolidated Interest Expense for the Fiscal Quarter ending March 31,
1998; (ii) June 30, 1998 shall equal two times Consolidated Interest Expense for
the two Fiscal Quarters ending June 30, 1998; and (iii) September 30, 1998 shall
equal (A) four times Consolidated Interest Expense for the three Fiscal Quarters
ending September 30, 1998 divided by (B) three.
"CONSOLIDATED LEVERAGE RATIO" means, for any Fiscal Quarter,
the ratio of (a) Consolidated Total Debt as of the last day of such Fiscal
Quarter to (b) Consolidated EBITDA for the consecutive four Fiscal Quarters
ending on the last day of such Fiscal Quarter.
"CONSOLIDATED NET INCOME" means, for any period, the net income
(or loss) of Company and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP;
provided that there shall be excluded (i) the income (or loss) of any Person
(other than a Subsidiary of Company) in which any other Person (other than
Company or any of its Subsidiaries) has a joint interest, except to the extent
of the amount of dividends or other distributions actually paid to Company or
any of its Subsidiaries by such Person during such period, (ii) the income (or
loss) of any Person accrued prior to the date it becomes a Subsidiary of Company
or is merged into or consolidated with Company or any of its Subsidiaries or
that Person's assets are acquired by Company or any of its Subsidiaries,
(iii) the income of any Subsidiary of Company to the extent that the declaration
or payment of dividends or similar distributions
8
10
by that Subsidiary of that income is not at the time permitted by operation of
the terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary provided
that the income of Stanadyne Italy shall be included without regard to this
clause (iii), (iv) any after-tax gains or losses attributable to Asset Sales or
returned surplus assets of any Pension Plan, and (v) (to the extent not included
in clauses (i) through (iv) above) any net extraordinary gains or net
extraordinary losses.
"CONSOLIDATED NET WORTH" means, as at any date of
determination, the sum of the capital stock and additional paid-in capital plus
retained earnings (or minus accumulated deficits) of Company and its
Subsidiaries on a consolidated basis determined in conformity with GAAP and
before giving effect to any adjustment pertaining to carryover or predecessor
basis accounting, such adjustment not to exceed $7,500,000, that may be required
by Accounting Principles Board Opinions Nos. 16 and 17 (or any similar
adjustment required by the rules, regulations, pronouncements and opinions of
the Financial Accounting Standards Board, the American Institute of Certified
Public Accountants or similar authoritative bodies) as a result of the
Acquisition.
"CONSOLIDATED TOTAL DEBT" means, as at any date of
determination, the aggregate stated balance sheet amount of all Indebtedness of
Company and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP.
"CONTINGENT OBLIGATION", as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebted ness, lease, dividend or other obligation of another if
the primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings, or (iii) under Hedge Agreements. Contingent Obligations shall include
(a) the direct or indirect guaranty, endorsement (otherwise than for collection
or deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another, (b)
the obligation to make take-or-pay or similar payments if required regardless of
non-performance by any other party or parties to an agreement, and (c) any
liability of such Person for the obligation of another through any agreement
(contingent or otherwise) (X) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (Y) to maintain the solvency
or any balance sheet item, level of income or financial condition of another if,
in the case of any agreement described under subclauses (X) or (Y) of this
sentence, the primary purpose or intent thereof is as described in the preceding
sentence. The amount of
9
11
any Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported or, if less, the amount to which such
Contingent Obligation is specifically limited.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.
"CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement to which Company or any of its
Subsidiaries is a party.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DLJ" has the meaning assigned to that term in the introduction
to this Agreement.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"DOMESTIC SUBSIDIARY" means a Subsidiary of Company which is
incorporated in a state of the United States or in the District of Columbia.
"ELIGIBLE ACCOUNTS RECEIVABLE" means, as at any date of
determination, the aggregate dollar value of all Accounts Receivable; provided,
however, that unless otherwise agreed by Administrative Agent, the following
Accounts Receivable are not Eligible Accounts Receivable:
(i) Accounts Receivable (other than Accounts Receivable of
Perkins Engines) which, at the date of issuance of the respective
invoice therefor, were payable more than sixty (60) days after the date
of issuance of such invoice and Accounts Receivable of Perkins Engines,
which, at the date of issuance of the respective invoice therefor were
payable more than ninety (90) days after the date of issuance of such
income;
10
12
(ii) Accounts Receivable which remain unpaid for more than
sixty (60) days after the due date specified in the original invoice or
for more than one hundred and twenty (120) days after invoice date if
no due date was specified;
(iii) Accounts Receivable with respect to which the customer is
the United States of America or any department, agency or
instrumentality thereof unless, with respect to such Accounts
Receivable, the Federal Assignment of Claims Act (31 U.S.C. Section
3727) has been complied with;
(iv) Accounts Receivable with respect to which the customer is
an Affiliate of Company or a director, officer, agent, stockholder or
employee of Company or any of its Affiliates, other than Accounts
Receivable resulting from arms-length transactions in the ordinary
course of business;
(v) Accounts Receivable due from a customer if more than
twenty-five percent (25%) of the aggregate amount of Accounts of such
customer have at the time remained unpaid for more than ninety (90)
days after invoice date or sixty (60) days after the due date specified
in the original invoice;
(vi) Accounts Receivable evidenced by an instrument (as defined
in Article 9 of the UCC) not in the possession of Administrative Agent;
(vii) Accounts Receivable with respect to which Administrative
Agent does not have a valid, First Priority Lien, including, without
limitation, Accounts Receivable of Stanadyne Italy and its
Subsidiaries, in which Administrative Agent does not have a valid,
First Priority Lien, and Accounts subject to any Lien except those in
favor of Administrative Agent and Permitted Encumbrances junior to the
Liens in favor of Administrative Agent;
(viii) Accounts Receivable with respect to which the customer
is the subject of any bankruptcy or other insolvency proceeding;
(ix) Accounts Receivable due from a customer other than
Chrysler Corporation, General Motors Corporation, Deere & Company, Ford
Motor Company or Perkins Engines, to the extent that such Accounts
Receivable exceed in the aggregate an amount equal to twenty-five
percent (25%) of the aggregate of all
Accounts Receivable at said date;
(x) Accounts Receivable with respect to which the customer's
obligation to pay is conditional or subject to a repurchase obligation
or contractual right to return, including bill and hold sales,
guaranteed sales, sale or return transactions, sales on approvals or
consignment sales;
(xi) Accounts Receivable with respect to which there is any
unresolved dispute with the respective customer (but only to the extent
of such dispute) involving more than $100,000 in the aggregate for all
customers;
11
13
(xii) Accounts Receivable with respect to which the customer
other than Chrysler Corporation, General Motors Corporation, Deere &
Company, Ford Motor Company or Perkins Engines, is located in New
Jersey, Minnesota or any other state denying creditors access to its
courts in the absence of a Notice of Business Activities Report or
other similar filing, unless Company has either qualified as a foreign
corporation authorized to transact business in such state or has filed
a Notice of Business Activities Report or similar filing with the
applicable state agency for the then current year; and
(xiii) Accounts Receivable which Requisite Lenders determine in
their reasonable discretion to be unacceptable for borrowing purposes.
"ELIGIBLE ASSIGNEE" means (A) (i) a commercial bank organized
under the laws of the United States or any state thereof; (ii) a savings and
loan association or savings bank organized under the laws of the United States
or any state thereof; (iii) a commercial bank organized under the laws of any
other country or a political subdivision thereof; provided that (x) such bank is
acting through a branch or agency located in the United States or (y) such bank
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; and (iv) any other entity which is an "accredited investor" (as defined
in Regulation D under the Securities Act) which extends credit or buys loans as
one of its businesses including insurance companies, mutual funds and lease
financing companies; and (B) any Lender and any Affiliate of any Lender;
provided that no Affiliate of Company shall be an Eligible Assignee.
"ELIGIBLE INVENTORY" means as at any date of determination, the
value (determined at the lower of cost or market on a first-in, first-out basis)
of all Inventory (including raw materials, purchased parts and work-in-process
Inventory) owned by Company and any Subsidiary Guarantor and located in the
United States of America; provided, however that unless otherwise agreed by
Administrative Agent, the following Inventory is not Eligible Inventory:
(i) finished goods which do not meet specifications of the
purchase order for such goods in any material respect;
(ii) Inventory with respect to which Administrative Agent does
not have a valid, First Priority Lien, including, without limitation,
all Inventory of Stanadyne Italy and its Subsidiaries, in which
Administrative Agent does not have a valid, First Priority Lien;
(iii) Inventory with respect to which there exists any Lien in
favor of any Person other than Administrative Agent, except Permitted
Encumbrances junior to the Liens in favor of Administrative Agent;
12
14
(iv) Inventory produced in violation of the Fair Labor
Standards Act or subject to the so-called "hot goods" provisions
contained in Title 29 U.S.C. 215(a)(i); and
(v) Inventory which Requisite Lenders determine, in their
reasonable discretion, to be unacceptable for borrowing purposes.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is or was maintained or contributed to by
Company, any of its Subsidiaries or any of their respective ERISA Affiliates.
"ENVIRONMENTAL CLAIM" means any notice, notice of violation,
claim, action, suit, proceeding, demand, abatement order or other order or
directive (conditional or otherwise), by any governmental authority or any other
Person, arising (i) pursuant to or in connection with any violation of any
Environmental Law, (ii) in connection with any Hazardous Materials Activity, or
(iii) in connection with any damage, injury, threat or harm to health, safety,
natural resources or the environment.
"ENVIRONMENTAL LAWS" means any and all current or future
statutes, ordinances, orders, rules, regulations, judgments, Governmental
Authorizations, or any other requirements of governmental authorities relating
to (i) environmental matters, including those relating to any Hazardous
Materials Activity, (ii) the generation, use, storage, transportation or
disposal of Hazardous Materials, or (iii) occupational safety and health,
industrial hygiene or the protection of human, plant or animal health or welfare
from environmental hazards, in any manner applicable to Company or any of its
Subsidiaries or any Facility, including the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. Section 9601 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. Section 1801 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.), the Clean
Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. Section 2601 et seq.), the Federal Insecticide, Fungicide and Rodenticide
Act (7 U.S.C. Section 136 et seq.), the Occupational Safety and Health Act (29
U.S.C. Section 651 et seq.), the Oil Pollution Act (33 U.S.C. Section 2701 et
seq) and the Emergency Planning and Community Right-to-Know Act (42 U.S.C.
Section 11001 et seq.), each as amended or supplemented, any analogous present
or future state or local statutes or laws, and any regulations promulgated
pursuant to any of the foregoing.
"EQUITY CONTRIBUTION" has the meaning assigned to that term in
the Recitals hereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor thereto.
13
15
"ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which that Person is a
member; (ii) any trade or business (whether or not incorporated) which is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person is a
member; and (iii) any member of an affiliated service group within the meaning
of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is a member.
"ERISA EVENT" means (i) a "reportable event" within the meaning
of Section 4043 of ERISA and the regulations issued thereunder with respect to
any Pension Plan (excluding those for which the provision for 30-day notice to
the PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates from any Pension Plan with two or more contributing sponsors or the
termination of any such Pension Plan resulting in liability pursuant to Section
4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to
terminate any Pension Plan, or the occurrence of any event or condition which
might constitute grounds under ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; (vi) the imposition of liability
on Company, any of its Subsidiaries or any of their respective ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (vii) the withdrawal of Company, any of its
Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefor, or the
receipt by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates of notice from any Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the
occurrence of an act or omission which could give rise to the imposition on
Company, any of its Subsidiaries or any of their respective ERISA Affiliates of
material fines, penalties, taxes or related charges under Chapter 43 of the
Internal Revenue Code or under Section 409, Section 502(c), (i) or (l), or
Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the
assertion of a material claim (other than routine claims for benefits) against
any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof,
or against Company, any of its Subsidiaries or any of their respective ERISA
Affiliates in connection with any Employee Benefit Plan; (x)
14
16
receipt from the Internal Revenue Service of notice of the failure of any
Pension Plan (or any other Employee Benefit Plan intended to be qualified under
Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of
the Internal Revenue Code, or the failure of any trust forming part of any
Pension Plan to qualify for exemption from taxation under Section 501(a) of the
Internal Revenue Code; or (xi) the imposition of a Lien pursuant to Section
401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA with
respect to any Pension Plan.
"EURODOLLAR RATE LOANS" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"EVENT OF DEFAULT" means each of the events set forth in
Section 8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"EXCHANGE RATE" means, on any date when an amount expressed in
a currency other than Dollars is to be determined with respect to any Letter of
Credit, the nominal rate of exchange of the applicable Issuing Lender in the New
York foreign exchange market for the purchase by such Issuing Lender (by cable
transfer) of such currency in exchange for Dollars at 12:00 noon (New York time)
one Business Day prior to such date, expressed as a number of units of such
currency per one Dollar.
"EXISTING CREDIT AGREEMENT" means that certain Credit Agreement
dated as of February 2, 1995 among Stanadyne, the financial institutions party
thereto and The Bank of New York, as Agent, as from time to time amended and in
effect on the date hereof.
"FACILITIES" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now, hereafter or
heretofore owned, leased, operated or used by Company or any of its Subsidiaries
or any of their respective predecessors or Affiliates.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by Administrative Agent from three Federal funds
brokers of recognized standing selected by Administrative Agent.
"FINANCIAL CONDITION CERTIFICATE" means the certificate
substantially in the form of Exhibit XXI annexed hereto.
15
17
"FINANCIAL PLAN" has the meaning assigned to that term in
subsection 6.1(xii).
"FIRST PRIORITY" means, with respect to any Lien purported to
be created in any Collateral pursuant to any Collateral Document, that (i) such
Lien has priority over any other Lien on such Collateral (other than Permitted
Encumbrances and Liens permitted pursuant to subsection 7.2A) and (ii) such Lien
is the only Lien (other than Permitted Encumbrances and Liens permitted pursuant
to subsection 7.2A) to which such Collateral is subject.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Company and its
Subsidiaries ending on December 31 of each calendar year.
"FLOOD HAZARD PROPERTY" means a Mortgaged Property located in
an area designated by the Federal Emergency Management Agency as having special
flood or mud slide hazards.
"FNBC" has the meaning assigned to that term in the
introduction to this Agreement.
"FOREIGN SUBSIDIARY" means a direct or indirect Subsidiary of
Company which is incorporated in a jurisdiction other than the states of the
United States and the District of Columbia.
"FUNDED DEBT", as applied to any Person, means all Indebtedness
of that Person (including any current portions thereof) which by its terms or by
the terms of any instrument or agreement relating thereto matures more than one
year from, or is directly renewable or extendable at the option of that Person
to a date more than one year from (including an option of that Person under a
revolving credit or similar agreement obligating the lender or lenders to extend
credit over a period of one year or more from), the date of the creation
thereof.
"FUNDING AND PAYMENT OFFICE" means (i) the office of
Administrative Agent and Swing Line Lender located at 1 First National Plaza,
Chicago, Illinois 60670, Attention: Nanette, or (ii) such other office of
Administrative Agent and Swing Line Lender as may from time to time hereafter be
designated as such in a written notice delivered by Administrative Agent and
Swing Line Lender to Company and each Lender.
"FUNDING DATE" means the date of the funding of a Loan.
16
18
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting principles
set forth in opinions and pro nouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from any
federal, state or local governmental authority, agency or court.
"GUARANTIES" means the Holdings Guaranty and the Subsidiary
Guaranties.
"HAZARDOUS MATERIALS" means (i) any chemical, material or
substance at any time defined in any statute or regulation as "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely hazardous
waste", acutely hazardous waste", "radioactive waste", "biohazardous waste",
"pollutant", "toxic pollutant", "contaminant", "restricted hazardous waste",
"infectious waste", "toxic substances", or any other term or expression intended
to define, list or classify substances by reason of properties harmful to
health, safety or the indoor or outdoor environment (including harmful
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
toxicity, reproductive toxicity, "TCLP toxicity" or "EP toxicity" or words of
similar meaning and regulatory effect under any applicable Environmental Laws);
(ii) any oil, petroleum, petroleum fraction or petroleum derived substance;
(iii) any drilling fluids, produced waters and other wastes associated with the
exploration, development or production of crude oil, natural gas or geothermal
resources; (iv) any flammable substances or explosives; (v) any radioactive
materials; (vi) any asbestos-containing materials; (vii) urea formaldehyde foam
insulation; (viii) electrical equipment which contains any oil or dielectric
fluid containing polychlorinated biphenyls; (ix) pesticides; and (x) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority because it could pose a hazard to the
health and safety of the owners, occupants or any Persons in the vicinity of any
Facility or could contaminate the indoor or outdoor environment.
"HAZARDOUS MATERIALS ACTIVITY" means any use, manufacture,
possession, storage, holding, Release, threatened Release, discharge,
generation, transportation, processing, treatment, abatement, removal,
remediation, disposal, disposition or handling of any Hazardous Materials, and
any corrective action or response action with respect to any of the foregoing.
17
19
"HEDGE AGREEMENT" means an Interest Rate Agreement or a
Currency Agreement designed to hedge against fluctuations in interest rates or
currency values, respectively.
"HOLDINGS" means (i) prior to the consummation of the
Acquisition SAC, Inc. and (ii) after the consummation of the Acquisition and the
effectuation of the name change Stanadyne Automotive Holding Corp.
"HOLDINGS GUARANTY" means the Holdings Guaranty executed and
delivered by Holdings on the Closing Date, substantially in the form of Exhibit
XIX annexed hereto, as such Holdings Guaranty may be amended, supplemented or
otherwise modified from time to time.
"HOLDINGS PLEDGE AGREEMENT" means the Holdings Pledge Agreement
executed and delivered by Holdings on the Closing Date, substantially in the
form of Exhibit XXV annexed hereto, as such Holdings Pledge Agreement may be
amended, supplemented or otherwise modified from time to time.
"INDEBTEDNESS", as applied to any Person, means without
duplication (i) all indebtedness for borrowed money (including without
limitation unreimbursed drawings under Letters of Credit), (ii) that portion of
obligations with respect to Capital Leases that is properly classified as a
liability on a balance sheet in conformity with GAAP, (iii) notes payable and
drafts accepted representing extensions of credit whether or not representing
obligations for borrowed money, (iv) any obligation owed for all or any part of
the deferred purchase price of property or services (excluding any such
obligations incurred under ERISA, wages, salaries, accrued vacations, deferred
compensation (including option plans, dental and medical plans)), which purchase
price is (a) due more than six months from the date of incurrence of the
obligation in respect thereof or (b) evidenced by a note or similar written
instrument, and (v) all indebtedness secured by any Lien on any property or
asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse to the
credit of that Person. Obligations under Interest Rate Agreements and Currency
Agreements constitute (X) in the case of Hedge Agreements, Contingent
Obligations, and (Y) in all other cases, Investments, and in neither case
constitute Indebtedness.
"INDEMNITEE" has the meaning assigned to that term in
subsection 10.3.
"INITIAL REVOLVING LOANS" means the Revolving Loans to be made
on the Closing Date in connection with the Acquisition, which shall not exceed
[$2.8] million in principal amount.
"INTELLECTUAL PROPERTY" means all patents, trademarks, trade
names, copyrights, technology, know-how and processes used in or necessary for
the conduct of
18
20
the business of Company and its Subsidiaries as currently conducted that are
material to the condition (financial or otherwise), business or operations of
Company and its Subsidiaries, taken as a whole.
"INTERCOMPANY NOTE" has the meaning set forth in the recitals
hereto.
"INTEREST PAYMENT DATE" means (i) with respect to any Base Rate
Loan, the last day of each March, June, September and December of each year,
commencing on the first such date to occur after the Closing Date, and (ii) with
respect to any Eurodollar Rate Loan, the last day of each Interest Period
applicable to such Loan; provided that in the case of each Interest Period of
longer than three months "Interest Payment Date" shall also include each date
that is three months, or an integral multiple thereof, after the commencement of
such Interest Period.
"INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement to which Company or any of its Subsidiaries is
a party.
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the second Business Day prior to the first day of such Interest
Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter, and any
successor statute.
"INVENTORY" means, on a consolidated basis, all goods,
merchandise and other personal property which are held by Company and its
Subsidiaries for sale or lease, including raw materials and work in process.
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary of
Company), (ii) any direct or indirect redemption, retirement, purchase or other
acquisition for value, by any Subsidiary of Company from any Person other than
Company or any of its Subsidiaries, of any equity Securities of such Subsidiary,
(iii) any direct or indirect loan, advance (other than advances to employees for
moving, entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution by
Company or any of its Subsidiaries to any other Person (other than a
wholly-owned Subsidiary of Company), including all indebtedness and accounts
receivable from that other Person that are not current assets or did not arise
from sales to that other Person in the ordinary course of business, or (iv) net
obligations under Interest Rate Agreements or Currency Agreements not
constituting Hedge Agreements. The amount of any Investment shall be the
original cost of
19
21
such Investment plus the cost of all additions thereto, less dispositions and
other returns of capital without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment.
"IP COLLATERAL" means, collectively, the Collateral under the
Company Copyright Security Agreement, the Company Patent Security Agreement, the
Company Trademark Security Agreement and the Subsidiary IP Security Agreements.
"ISSUING LENDER" means, with respect to any Letter of Credit,
the Lender which agrees or is otherwise obligated to issue such Letter of
Credit, determined as provided in subsection 3.1B(ii).
"JOINT VENTURE" means a joint venture, partnership or other
similar arrange ment, whether in corporate, partnership or other legal form;
provided that in no event shall any corporate Subsidiary of any Person be
considered to be a Joint Venture to which such Person is a party.
"LANDLORD CONSENT AND ESTOPPEL" means, with respect to any
Leasehold Property, a letter, certificate or other instrument in writing from
the lessor under the related lease, reasonably satisfactory in form and
substance to Agents, pursuant to which such lessor agrees, for the benefit of
Administrative Agent, (i) that without any further consent of such lessor or any
further action on the part of the Loan Party holding such Leasehold Property,
such Leasehold Property may be encumbered pursuant to a Mortgage and may be
assigned to the purchaser at a foreclosure sale or in a transfer in lieu of such
a sale (and to a subsequent third party assignee if any Agent, any Lender, or an
Affiliate of either so acquires such Leasehold Property), (ii) that such lessor
shall not terminate such lease as a result of a default by such Loan Party
thereunder without first giving Agents notice of such default and at least 60
days (or, if such default cannot reasonably be cured by Agents within such
period, such longer period as may reasonably be required) to cure such default,
and (iii) to such other matters relating to such Leasehold Property as Agents
may reasonably request.
"LEASEHOLD PROPERTY" means any leasehold interest of any Loan
Party as lessee under any lease of real property located in the United States of
America.
"LENDER" and "LENDERS" means the persons identified as
"Lenders" and listed on the signature pages of this Agreement, together with
their successors and permitted assigns pursuant to subsection 10.1, and the term
"Lenders" shall include Swing Line Lender unless the context otherwise requires.
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means Commercial
Letters of Credit and Standby Letters of Credit issued or to be issued by
Issuing Lenders for the account of Company pursuant to subsection 3.1.
20
22
"LETTER OF CREDIT USAGE" means, as at any date of
determination, the sum of (i) the maximum aggregate amount which is or at any
time thereafter may become available for drawing under all Letters of Credit
then outstanding plus (ii) the aggregate amount of all drawings under Letters of
Credit honored by Issuing Lenders and not theretofore reimbursed by Company
(including any such reimbursement out of the proceeds of Revolving Loans
pursuant to subsection 3.3B).
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"LOAN" or "LOANS" means one or more of the Tranche A Term
Loans, Tranche B Term Loans, Revolving Loans or Swing Line Loans or any
combination thereof.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Letters
of Credit (and any applications for, or reimbursement agreements or other
documents or certificates executed by Company in favor of an Issuing Lender
relating to, the Letters of Credit), the Guaranties, and the Collateral
Documents.
"LOAN PARTY" means each of Company, Holdings and any of
Company's Subsidiaries from time to time executing a Loan Document, and "LOAN
PARTIES" means all such Persons, collectively.
"MARGIN DETERMINATION CERTIFICATE" means an Officer's
Certificate of Company delivered pursuant to 6.1(iv) setting forth in reasonable
detail the Consolidated Leverage Ratio for the four-fiscal quarter period ending
as of the last day of the fiscal quarter during which such Officer's Certificate
is delivered.
"MARGIN STOCK" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in
effect from time to time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect
upon the business, operations, properties, assets, condition (financial or
otherwise) or prospects of Company and its Subsidiaries taken as a whole
(excluding effects to the extent arising solely from matters of a general
economic or general industry nature) or (ii) the material impairment of the
ability of any Loan Party to perform, or of Administrative Agent or Lenders to
enforce, the Obligations.
"MATERIAL CONTRACT" means any contract or other arrangement to
which Company or any of its Subsidiaries is a party (other than the Loan
Documents) that accounts for more than 5% of sales of Company and its
Subsidiaries on a consolidated basis
21
23
for the most recent fiscal year for which audited financial statements have been
delivered to Lenders for which breach, nonperformance, cancellation or failure
to renew could reasonably be expected to have a Material Adverse Effect.
"MATERIAL LEASEHOLD PROPERTY" means a Leasehold Property
reasonably determined by Agents to be of material value as Collateral and of
material importance to the operations of Company or any of its Subsidiaries.
"MATERIAL REAL PROPERTY" means real property reasonably
determined by Agents to be of material value as collateral and of material
importance to the operations of Company or any of its Subsidiaries.
"MORTGAGE" means (i) a security instrument (whether designated
as a deed of trust or a mortgage or by any similar title) executed and delivered
by any Loan Party, substantially in the form of Exhibit XX annexed hereto or in
such other form as may be approved by Agents in their sole discretion, in each
case with such changes thereto as may be recommended by Administrative Agent's
local counsel based on local laws or customary local mortgage or deed of trust
practices, or (ii) at the option of Agents, in the case of an Additional
Mortgaged Property (as defined in subsection 6.9), an amendment to an existing
Mortgage, in form satisfactory to Agents, adding such Additional Mortgaged
Property to the Real Property Assets encumbered by such existing Mortgage, in
either case as such security instrument or amendment may be amended,
supplemented or otherwise modified from time to time. "MORTGAGES" means all such
instruments, including the Assigned Mortgages and any Additional Mortgages (as
defined in subsection 6.9), collectively.
"MORTGAGED PROPERTY" means a Closing Date Mortgaged Property
(as defined in subsection 4.2H) or an Additional Mortgaged Property (as defined
in subsection 6.9).
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset
Sale, Cash payments (including any Cash received by way of deferred payment
pursuant to, or by monetization of, a note receivable or otherwise, but only as
and when so received) received from such Asset Sale, net of any bona fide direct
costs incurred in connection with such Asset Sale, including (i) income taxes
reasonably estimated to be actually paid or payable within two years of the date
of such Asset Sale as a result of any gain recognized in connection with such
Asset Sale, (ii) payment of the outstanding principal amount of, premium or
penalty, if any, and interest on any Indebtedness (other than the Loans) that is
secured by a Lien on the stock or assets in question and that is required to be
repaid under the terms thereof as a result of such Asset Sale and (iii) sales
and other commissions and reasonable legal and other expenses.
22
24
"NET INSURANCE/CONDEMNATION PROCEEDS" means any Cash payments
or proceeds received by Company or any of its Subsidiaries (i) under any
business interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of Company or any of
its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net of any
actual and reasonable documented costs (including commissions and reasonable
attorneys fees) incurred by Company or any of its Subsidiaries in connection
with the adjustment or settlement of any claims of Company or such Subsidiary in
respect thereof.
"NOTES" means one or more of the Tranche A Term Notes, Tranche
B Term Notes, Revolving Notes or Swing Line Note or any combination thereof.
"NOTICE OF BORROWING" means a notice substantially in the form
of Exhibit I annexed hereto delivered by Company to Administrative Agent
pursuant to subsection 2.1B with respect to a proposed borrowing.
"NOTICE OF CONVERSION/CONTINUATION" means a notice
substantially in the form of Exhibit II annexed hereto delivered by Company to
Administrative Agent pursuant to subsection 2.2D with respect to a proposed
conversion or continuation of the applicable basis for determining the interest
rate with respect to the Loans specified therein.
"NOTICE OF ISSUANCE OF LETTER OF CREDIT" means a notice
substantially in the form of Exhibit III annexed hereto delivered by Company to
Administrative Agent pursuant to subsection 3.1B(i) with respect to the proposed
issuance of a Letter of Credit.
"OBLIGATIONS" means all obligations of every nature of each
Loan Party from time to time owed to Arranger, Agents, Lenders or any of them
under the Loan Documents, whether for principal, interest, reimbursement of
amounts drawn under Letters of Credit, fees, expenses, indemnification or
otherwise.
"OFFICER'S CERTIFICATE" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its president or its chief
financial officer (or if there is no chief financial officer, its chief
accounting officer); provided that every Officer's Certificate with respect to
the compliance with a condition precedent to the making of any Loans hereunder
shall include (i) a statement that the officer or officers making or giving such
Officer's Certificate have read such condition and any definitions or other
provisions contained in this Agreement relating thereto, (ii) a statement that,
in the opinion of the signers, they have made or have caused to be made such
examination or investigation as is reasonably necessary to enable them to
express an informed opinion as to whether or not such condition has been
complied with, and (iii) a statement as to whether, in the opinion of the
signers, such condition has been complied with.
23
25
"OLD HOLDERS" means the holders of the capital stock of SAHC
prior to the consummation of the Acquisition.
"OPERATING LEASE" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) that is not a Capital Lease in
accordance with GAAP other than any such lease under which that Person is the
lessor.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"PERMITTED ENCUMBRANCES" means the following types of Liens
(excluding any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or by ERISA, any such Lien relating to or imposed in
connection with any Environmental Claim, and any such Lien expressly prohibited
by any applicable terms of any of the Collateral Documents):
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by subsection
6.3;
(ii) statutory Liens of landlords, statutory Liens of banks and
rights of set-off, statutory Liens of carriers, warehousemen,
mechanics, repairmen, workmen and materialmen, and other Liens imposed
by law, in each case incurred in the ordinary course of business (a)
for amounts not yet overdue or (b) for amounts that are overdue and
that are being contested in good faith by appropriate proceedings, so
long as (1) such reserves or other appropriate provisions, if any, as
shall be required by GAAP shall have been made for any such contested
amounts, and (2) in the case of a Lien with respect to any portion of
the Collateral, such contest proceedings conclusively operate to stay
the sale of any portion of the Collateral on account of such Lien;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
bids, leases, government contracts, trade contracts, performance and
return-of-money bonds and other similar obligations (exclusive of
obligationsfor the payment of borrowed money), so long as no
foreclosure, sale or similar proceedings have been commenced with
respect to any portion of the Collateral on account thereof;
24
26
(iv) any attachment or judgment Lien not constituting an Event
of Default under subsection 8.8;
(v) leases or subleases granted to third parties in accordance
with any applicable terms of the Collateral Documents and not
interfering in any material respect with the ordinary conduct of the
business of Company or any of its Subsidi aries or resulting in a
material diminution in the value of any Collateral as security for the
Obligations;
(vi) easements, rights-of-way, restrictions, encroachments, and
other minor defects or irregularities in title, in each case which do
not and will not interfere in any material respect with the ordinary
conduct of the business of Company or any of its Subsidiaries or result
in a material diminution in the value of any Collateral as security for
the Obligations;
(vii) any (a) interest or title of a lessor or sublessor under
operating leases, (b) restriction or encumbrance that the interest or
title of such lessor or sublessor may be subject to, or
(c) subordination of the interest of the lessee or sublessee under such
lease to any restriction or encumbrance referred to in the preceding
clause (b), so long as the holder of such restriction or encumbrance
agrees to recognize the rights of such lessee or sublessee under such
lease;
(viii) Liens arising from filing UCC financing statements
relating solely to leases not prohibited by this Agreement;
(ix) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods;
(x) any zoning or similar law or right reserved to or vested in
any governmental office or agency to control or regulate the use of any
real property;
(xi) Liens securing obligations (other than obligations
representing Indebtedness for borrowed money) under operating,
reciprocal easement or similar agreements entered into in the ordinary
course of business of Company and its Subsidiaries; and
(xii) licenses of patents, trademarks and other intellectual
property rights granted by Company or any of its Subsidiaries in the
ordinary course of business and not interfering in any material respect
with the ordinary conduct of the business of Company or such
Subsidiary;
25
27
(xiii) Liens on property hereafter acquired; provided that any
such Lien is not created pursuant to or in contemplation of the
acquisition of such property and provided further that no such Lien
shall extend or attach to property other than the property so acquired;
(xiv) Liens in respect of Capital Leases;
(xv) Liens under the Existing Credit Agreement so long as
released substantially simultaneously herewith;
(xvi) Set-off rights of depository banks; and
(xvii) Liens of banks arising under Article 4 of the UCC on
items in collection and accompanying documents and proceeds.
"PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative, regulatory, judicial or
quasi-judicial bodies thereof.
"PLEDGED COLLATERAL" means, collectively, the "Pledged
Collateral" as defined in the Company Pledge Agreement, the Subsidiary Pledge
Agreements and the Auxiliary Pledge Agreements.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of Default.
"PRIME RATE" means the rate per annum equal to the corporate
base rate of interest announced by FNBC from time to time, changing when and as
said corporate base rate changes. FNBC or any other Lender may make commercial
loans or other loans at rates of interest at, above or below the Prime Rate.
"PRO RATA SHARE" means, with respect to a Lender (i) with
respect to all payments, computations and other matters relating to the Tranche
A Term Loan Commitment or the Tranche A Term Loan of any Lender, the percentage
obtained by dividing (x) the Tranche A Term Loan Exposure of that Lender by
(y) the aggregate Tranche A Term Loan Exposure of all Lenders, (ii) with respect
to all payments,computations and other matters relating to the Tranche B Term
Loan Commitment or the Tranche B Term Loan of any Lender, the percentage
obtained by dividing (x) the Tranche B Term Loan Exposure of that Lender by (y)
the aggregate Tranche B Term Loan Exposure
26
28
of all Lenders, (iii) with respect to all payments, computations and other
matters relating to the Revolving Loan Commitment or the Revolving Loans of any
Lender or any Letters of Credit issued or participations therein purchased by
any Lender or any participations in any Swing Line Loans purchased or deemed
purchased by any Lender, the percentage obtained by dividing (x) the Revolving
Loan Exposure of that Lender by (y) the aggregate Revolving Loan Exposure of all
Lenders, and (iv) for all other purposes with respect to each Lender, the
percentage obtained by dividing (x) the sum of the Tranche A Term Loan Exposure
of that Lender plus the Tranche B Term Loan Exposure of that Lender plus the
Revolving Loan Exposure of that Lender by (y) the sum of the aggregate Tranche A
Term Loan Exposure of all Lenders plus the sum of the aggregate Tranche B Term
Loan Exposure of all Lenders plus the aggregate Revolving Loan Exposure of all
Lenders, in any such case as the applicable percentage may be adjusted by
assignments permitted pursuant to subsection 10.1. The initial Pro Rata Share of
each Lender for purposes of each of clauses (i), (ii) and (iii) of the preceding
sentence is set forth opposite the name of that Lender in Schedule 2.1 annexed
hereto.
"PTO" means the United States Patent and Trademark Office or
any successor or substitute office in which filings are necessary or, in the
opinion of Administrative Agent, desirable in order to create or perfect Liens
on any IP Collateral.
"REAL PROPERTY ASSET" means, at any time of determination, any
interest then owned by any Loan Party in any real property.
"RECORDED LEASEHOLD INTEREST" means a Leasehold Property with
respect to which a Record Document (as hereinafter defined) has been recorded in
all places necessary or desirable, in the reasonable judgment of Agents, to give
constructive notice of such Leasehold Property to third-party purchasers and
encumbrancers of the affected real property. For purposes of this definition,
the term "RECORD DOCUMENT" means, with respect to any Leasehold Property, (a)
the lease evidencing such Leasehold Property or a memorandum thereof, executed
and acknowledged by the owner of the affected real property, as lessor, or (b)
if such Leasehold Property was acquired or subleased from the holder of a
Recorded Leasehold Interest, the applicable assignment or sublease document,
executed and acknowledged by such holder, in each case in form sufficient to
give such constructive notice upon recordation and otherwise in form reasonably
satisfactory to Agents.
"REFINANCING" has the meaning assigned to that term in the
Recitals hereof.
"REFUNDED SWING LINE LOANS" has the meaning assigned to that
term in subsection 2.1A(iii).
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
27
29
"REIMBURSEMENT DATE" has the meaning assigned to that term in
subsection 3.3B.
"RELATED AGREEMENTS" means collectively the Acquisition
Agreement and documents related to the Senior Subordinated Notes.
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials), including the
migration of any Hazardous Materials through the air, soil, surface water or
groundwater.
"REQUISITE LENDERS" means Lenders having or holding more than
51% of the sum of (i) the aggregate Tranche A Term Loan Exposure of all Lenders,
(ii) plus the aggregate Tranche B Term Loan Exposure of all Lenders plus (iii)
the aggregate Revolving Loan Exposure of all Lenders.
"RESPONSIBLE OFFICERS" means any of the President, the Chief
Executive Officer, Chief Financial Officer, Treasurer, Vice President and
General Manager of Precision Engine Products Corp., Vice President of
Engineering and Marketing, Diesel Systems Division, or other officer having
similar responsibilities.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Company now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of Company now or
hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Company now or hereafter outstanding, and
(iv) any payment or prepayment of principal of, premium, if any, or interest on,
or redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to, any Subordinated
Indebtedness that is not approved by Agents and Requisite Lenders.
"REVOLVING LENDER" means any Lender who is committed to make
Revolving Loans to the Company.
"REVOLVING LOAN COMMITMENT" means the commitment of a Revolving
Lender to make Revolving Loans to Company pursuant to subsection 2.1A(ii), and
"REVOLVING LOAN COMMITMENTS" means such commitments of all Revolving Lenders in
the aggregate.
28
30
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means December 11,
2003.
"REVOLVING LOAN EXPOSURE" means, with respect to any Revolving
Lender as of any date of determination (i) prior to the termination of the
Revolving Loan Commitments, that Revolving Lender's Revolving Loan Commitment
and (ii) after the termination of the Revolving Loan Commitments, the sum of
(a) the aggregate outstanding principal amount of the Revolving Loans of that
Revolving Lender plus (b) in the event that Revolving Lender is an Issuing
Lender, the aggregate Letter of Credit Usage in respect of all Letters of Credit
issued by that Revolving Lender (in each case net of any participations
purchased by other Lenders in such Letters of Credit or any unreimbursed
drawings thereunder) plus (c) the aggregate amount of all participations
purchased by that Lender in any outstanding Letters of Credit or any
unreimbursed drawings under any Letters of Credit plus (d) in the case of Swing
Line Lender, the aggregate outstanding principal amount of all Swing Line Loans
(net of any participations therein purchased by other Lenders) plus (e) the
aggregate amount of all participations purchased by that Lender in any
outstanding Swing Line Loans.
"REVOLVING LOANS" means the Loans made by Revolving Lenders to
Company pursuant to subsection 2.1A(ii).
"REVOLVING NOTES" means (i) the promissory notes of Company
issued pursuant to subsection 2.1D(ii) on the Closing Date and (ii) any
promissory notes issued by Company pursuant to the last sentence of subsection
10.1B(i) in connection with assignments of the Revolving Loan Commitments and
Revolving Loans of any Revolving Lenders, in each case substantially in the form
of Exhibit V annexed hereto, as they may be amended, supplemented or otherwise
modified from time to time.
"SAC" has the meaning assigned to that term in the introduction
to this Agreement.
"SAHC" has the meaning set forth in the recitals hereto.
"SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or
participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
29
31
"SENIOR SUBORDINATED NOTES" means the senior subordinated notes
issued by Company pursuant to that certain Indenture dated December 11, 1997
between Stanadyne, as Issuer and United States Trust Company of New York, as
Trustee.
"SOLVENT" means, with respect to any Person, that as of the
date of determination both (A) (i) the then fair saleable value (determined on a
going concern basis) of the property of such Person is (y) greater than the
total amount of liabilities (including contingent liabilities) of such Person
and (z) not less than the amount that will be required to pay the probable
liabilities on such Person's then existing debts as they become absolute and
matured considering all financing alternatives and potential asset sales
reasonably available to such Person; (ii) such Person's capital is not
unreasonably small in relation to its business or any contemplated or undertaken
transaction; and (iii) such Person does not intend to incur, or believe (nor
should it reasonably believe) that it will incur, debts beyond its ability to
pay such debts as they become due; and (B) such Person is "solvent" within the
meaning given that term and similar terms under applicable laws relating to
fraudulent transfers and conveyances. For purposes of this definition, the
amount of any contingent liability at any time shall be computed as the amount
that, in light of all of the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
"STANADYNE" means Stanadyne Automotive Corp., a Delaware
corporation.
"STANADYNE ITALY" means Stanadyne Automotive S.p.A., an Italian
corporation and a wholly-owned Subsidiary of Company.
"STANDBY LETTER OF CREDIT" means any standby letter of credit
or similar instrument, including those listed on Schedule 3.1, issued for the
purpose of supporting (i) Indebtedness of Company or any of its Subsidiaries in
respect of industrial revenue or development bonds or financings, (ii) workers'
compensation liabilities of Company or any of its Subsidiaries, (iii) the
obligations of third party insurers of Company or any of its Subsidiaries,
(iv) obligations with respect to Capital Leases or Operating Leases of Company
or any of its Subsidiaries, and (v) performance, payment, deposit or surety
obligations of Company or any of its Subsidiaries, in any case if required by
law or governmental rule or regulation or in accordance with custom and practice
in the industry; provided that Standby Letters of Credit may not be issued for
the purpose of supporting (a) trade payables or (b) any Indebtedness
constituting "antecedent debt" (as that term is used in Section 547 of the
Bankruptcy Code).
"SUBORDINATED INDEBTEDNESS" means Indebtedness of Company
subordinated in right of payment to the Obligations pursuant to documentation
containing maturities, amortization schedules, covenants, defaults, remedies,
subordination provisions and other material terms in form and substance
satisfactory to Agents and Requisite Lenders.
30
32
"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, limited liability company, association, joint venture
or other business entity of which more than 50% of the total voting power of
shares of stock or other ownership interests entitled (without regard to the
occurrence of any contingency) to vote in the election of the Person or Persons
(whether directors, managers, trustees or other Persons performing similar
functions) having the power to direct or cause the direction of the management
and policies thereof is at the time owned or controlled, directly or indirectly,
by that Person or one or more of the other Subsidiaries of that Person or a
combination thereof.
"SUBSIDIARY GUARANTOR" means any Subsidiary of Company that
executes and delivers a counterpart of the Subsidiary Guaranty on the Closing
Date or from time to time thereafter pursuant to subsection 6.8.
"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty executed
and delivered by existing Domestic Subsidiaries of Company on the Closing Date
and to be executed and delivered by additional Domestic Subsidiaries of Company
from time to time thereafter in accordance with subsection 6.8, substantially in
the form of Exhibit XVI annexed hereto, as such Subsidiary Guaranty may
hereafter be amended, supplemented or otherwise modified from time to time.
"SUBSIDIARY IP SECURITY AGREEMENT" means each trademark
security agreement, copyright security agreement, patent security agreement or
other security agreement executed and delivered by a Subsidiary Guarantor in
accordance with subsection 6.8.
"SUBSIDIARY PLEDGE AGREEMENT" means each Subsidiary Pledge
Agreement executed and delivered by the Domestic Subsidiaries on the Closing
Date and any other pledge agreement substantially in the form of such Pledge
Agreements executed from time to time thereafter in accordance with subsection
6.8, in each case substantially in the form of Exhibit XVII annexed hereto, as
such Subsidiary Pledge Agreement may be amended, supplemented or otherwise
modified from time to time, and "SUBSIDIARY PLEDGE AGREEMENTS" means all such
Subsidiary Pledge Agreements, collectively.
"SUBSIDIARY SECURITY AGREEMENT" means each Subsidiary Security
Agreement executed and delivered by an existing Subsidiary Guarantor on the
Closing Date or executed and delivered by any additional Subsidiary Guarantor
from time to time thereafter in accordance with subsection 6.8, in each case
substantially in the form ofExhibit XVIII annexed hereto, as such Subsidiary
Security Agreement may be amended, supplemented or otherwise modified from time
to time, and "SUBSIDIARY SECURITY AGREEMENTS" means all such Subsidiary Security
Agreements, collectively.
31
33
"SUPPLEMENTAL COLLATERAL AGENT" has the meaning assigned to
that term in subsection 9.1B.
"SWING LINE LENDER" means FNBC, or any Person serving as a
successor Administrative Agent hereunder, in its capacity as Swing Line Lender
hereunder.
"SWING LINE LOAN COMMITMENT" means the commitment of Swing Line
Lender to make Swing Line Loans to Company pursuant to subsection 2.1A(iii)
"SWING LINE LOANS" means the Loans made by Swing Line Lender to
Company pursuant to subsection 2.1A(iii).
"SWING LINE NOTE" means (i) the promissory note of Company
issued pursuant to subsection 2.1D(iii) on the Closing Date and (ii) any
promissory note issued by Company to any successor Administrative Agent and
Swing Line Lender pursuant to the last sentence of subsection 9.5B, in each case
substantially in the form of Exhibit VI annexed hereto, as it may be amended,
supplemented or otherwise modified from time to time.
"SYNDICATION AGENT" has the meaning assigned to that term in
the introduction to this Agreement.
"TAX" or "TAXES" means any present or future tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature and whatever called,
by whomsoever, on whomsoever and wherever imposed, levied, collected, withheld
or assessed; provided that "TAX ON THE OVERALL NET INCOME" of a Person shall be
construed as a reference to a tax imposed by the jurisdiction in which that
Person is organized or in which that Person's principal office (and/or, in the
case of a Lender, its lending office) is located or in which that Person
(and/or, in the case of a Lender, its lending office) is deemed to be doing
business on all or part of the net income, profits or gains (whether worldwide,
or only insofar as such income, profits or gains are considered to arise in or
to relate to a particular jurisdiction, or otherwise) of that Person (and/or, in
the case of a Lender, its lending office).
"TERM LOAN COMMITMENT" means the commitment of a Term Loan
Lender to make a Term Loan to Company pursuant to subsection 2.1A(i), and "TERM
LOAN COMMITMENTS" means such commitments of all Term Loan Lenders in the
aggregate.
"TERM LOAN LENDERS" means collectively the Tranche A Term Loan
Lenders and the Tranche B Loan Lenders.
"TERM LOANS" means, collectively, the Tranche A Term Loans and
the Tranche B Term Loans.
32
34
"TITLE COMPANY" means one or more title insurance companies
selected by Company and reasonably satisfactory to Agents.
"TOTAL UTILIZATION OF REVOLVING LOAN COMMITMENTS" means, as at
any date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans (other than Revolving Loans made, but not yet
applied, for the purpose of repaying any Refunded Swing Line Loans or
reimbursing the applicable Issuing Lender for any amount drawn under any Letter
of Credit) plus (ii) the aggregate principal amount of all outstanding Swing
Line Loans plus (iii) the Letter of Credit Usage.
"TRANCHE A TERM LOAN COMMITMENT" means the commitment of a
Lender to make a Tranche A Term Loan to Company pursuant to subsection
2.1A(i)(a), and "TRANCHE A TERM LOAN COMMITMENTS" means such commitments of all
Lenders in the aggregate.
"TRANCHE A TERM LOAN EXPOSURE" means, with respect to any
Lender as of any date of determination (i) prior to the funding of the Tranche A
Term Loans, that Lender's Tranche A Term Loan Commitment and (ii) after the
funding of the Tranche A Term Loans, the outstanding principal amount of the
Tranche A Term Loan of that Lender.
"TRANCHE A TERM LOAN LENDER" means any Lender who is committed
to make Tranche A Loans to Company.
"TRANCHE A TERM LOANS" means the Tranche A Term Loans made by
Lenders to Company pursuant to subsection 2.1A(i)(a).
"TRANCHE A TERM NOTES" means (i) the promissory notes of
Company issued pursuant to subsection 2.1D(i)(a) on the Closing Date and (ii)
any promissory notes issued by Company pursuant to the last sentence of
subsection 10.1B(i) in connection with assignments of the Tranche A Term Loan
Commitments or Tranche A Term Loans of any Lenders, in each case substantially
in the form of Exhibit IV-A annexed hereto, as they may be amended, supplemented
or otherwise modified from time to time.
"TRANCHE B TERM LOAN COMMITMENT" means the commitment of a
Lender to make a Tranche B Term Loan to Company pursuant to subsection
2.1A(i)(b), and "TRANCE B TERM LOAN COMMITMENTS" means such commitments of all
Lenders in the aggregate.
"TRANCHE B TERM LOAN EXPOSURE" means, with respect to any
Lender as of any date of determination (i) prior to the funding of the Tranche B
Term Loans, that Lender's Tranche B Term Loan Commitment and (ii) after the
funding of the Tranche B Term Loans, the outstanding principal amount of the
Tranche B Term Loan of that Lender.
33
35
"TRANCHE B TERM LOAN LENDER" means any Lender who is committed
to make Tranche B Loans to Company.
"TRANCHE B TERM LOANS" means the Tranche B Term Loans made by
Lenders to Company pursuant to subsection 2.1A(i)(b).
"TRANCHE B TERM NOTES" means (i) the promissory notes of
Company issued pursuant to subsection 2.1D(i)(b) on the Closing Date and (ii)
any promissory notes issued by Company pursuant to the last sentence of
subsection 10.1B(i) in connection with assignments of the Tranche B Term Loan
Commitments or Tranche B Term Loans of any Lenders, in each case substantially
in the form of Exhibit IV-B annexed hereto, as they may be amended, supplemented
or otherwise modified from time to time.
"TRANSACTION COSTS" means the fees, costs and expenses payable
by Company or Holdings on or before the Closing Date in connection with the
transactions contemplated by any of the Loan Documents or Related Agreements.
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (ii), (iii)
and (xii) of subsection 6.1 shall be prepared in accordance with GAAP as in
effect at the time of such preparation. Calculations in connection with the
definitions, covenants and other provisions of this Agreement shall utilize
accounting principles and policies in conformity with GAAP as in effect on the
Closing Date.
1.3 OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
A. Any of the terms defined herein may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference.
B. References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Agreement unless otherwise
specifically provided.
C. The use in any of the Loan Documents of the word "include"
or "including", when following any general statement, term or matter, shall not
be construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not nonlimiting language
34
36
(such as "without limitation" or "but not limited to" or words of similar
import) is used with reference thereto, but rather shall be deemed to refer to
all other items or matters that fall within the broadest possible scope of such
general statement, term or matter.
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; NOTES.
A. COMMITMENTS. Subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of Company herein set
forth, each Tranche A Term Loan Lender hereby severally agrees to make the Loans
described in subsection 2.1A(i)(a), each Tranche B Term Loan Lender hereby
severally agrees to make the Loans described in subsection 2.1(A)(i)(b), each
Revolving Lender hereby severally agrees to make the Loans described in
subsection 2.1A(ii) and Swing Line Lender hereby agrees to make the Loans
described in subsection 2.1A(iii).
(i) (a) Tranche A Term Loans. Each Tranche A Term Loan Lender
severally agrees to lend to Company on the Closing Date an amount not
exceeding its Pro Rata Share of the Tranche A Term Loan Commitments to
be used for the purposes identified in subsection 2.5A. The amount of
each Tranche A Term Loan Lender's Tranche A Term Loan Commitment is set
forth opposite its name on Schedule 2.1 annexed hereto and the Tranche
A Term Loan Commitments is $30,000,000; provided that the Tranche A
Term Loan Commitments of the Tranche A Term Loan Lenders shall be
adjusted to give effect to any assignments of the Tranche A Term Loan
Commitments pursuant to subsection 10.1B. Each Tranche A Term Loan
Lender's Tranche A Term Loan Commitment shall expire immedi ately and
without further action on December 11, 1997 if the Tranche A Term Loans
are not made on or before that date. Company may make only one
borrowing under the Tranche A Term Loan Commitments. Amounts borrowed
under this subsection 2.1A(i)(a) and subsequently repaid or prepaid may
not be reborrowed.
(b) Tranche B Term Loans. Each Tranche B Term Loan
Lender severally agrees to lend to Company on the Closing Date, an
amount not exceeding its Pro Rata Share of the Tranche B Term Loan
Commitments to be used for the purposes identified in subsection 2.5A.
The amount of each Tranche B Term Loan Lender's Tranche B Term Loan
Commitment is set forth opposite its name on Schedule 2.1 annexed
hereto and the Tranche B Term Loan Commitments is $25,000,000; provided
that the Tranche B Term Loan Commitments of the Tranche B Term Loan
Lenders shall be adjusted to give effect to any assignments of the
Tranche B Term Loan Commitments pursuant to subsection 10.1B. Each
Tranche B Term Loan Lender's Tranche B Term Loan Commitment shall
expire immediately and without further action on December 11, 1997 if
the Tranche B Term Loans are
35
37
not made on or before that date. Company may make only one borrowing
under the Tranche B Term Loan Commitments. Amounts borrowed under this
subsection 2.1A(i)(b) and subsequently repaid or prepaid may not be
reborrowed,
(ii) Revolving Loans. Each Revolving Lender severally agrees,
subject to the limitations set forth below with respect to the maximum
amount of Revolving Loans permitted to be outstanding from time to
time, to lend to Company from time to time during the period from the
Closing Date to but excluding the Revolving Loan Commitment Termination
Date an aggregate amount not exceeding its Pro Rata Share of the
Revolving Loan Commitments to be used for the purposes identified in
subsection 2.5B. The original amount of each Revolving Lender's
Revolving Loan Commitment is set forth opposite its name on
Schedule 2.1 annexed hereto and the original amount of the Revolving
Loan Commitments is $30,000,000; provided that the Revolving Loan
Commitments of Revolving Lenders shall be adjusted to give effect to
any assignments of the Revolving Loan Commitments pursuant to
subsection 10.1B; and provided, further that the amount of the
Revolving Loan Commitments shall be reduced from time to time by the
amount of any reductions thereto made pursuant to subsections 2.4B(ii)
and 2.4B(iii). Each Revolving Lender's Revolving Loan Commitment shall
expire on the Revolving Loan Commitment Termination Date and all
Revolving Loans and all other amounts owed hereunder with respect to
the Revolving Loans and the Revolving Loan Commitments shall be paid in
full no later than that date; provided that each Revolving Lender's
Revolving Loan Commitment shall expire immediately and without further
action on December 11, 1997 if the Term Loans and the Initial Revolving
Loans are not made on or before that date. Amounts borrowed under this
subsection 2.1A(ii) may be prepaid, repaid and reborrowed to but
excluding the Revolving Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Revolving Loans and the Revolving Loan Commitments
shall be subject to the limitation that in no event shall the Total
Utilization of Revolving Loan Commitments at any time exceed the lesser
of the Revolving Loan Commitments then in effect and (subject to
subsection 2.4B(iii)(i)) the then applicable Borrowing Base.
(iii) Swing Line Loans. Swing Line Lender hereby agrees,
subject to the limitations set forth below with respect to the maximum
amount of Swing Line Loans permitted to be outstanding from time to
time, to make a portion of the Revolving Loan Commitments available to
Company from time to time during the period from the Closing Date to
but excluding the Revolving Loan Commitment Termination Date by making
Swing Line Loans to Company in an aggregate amount not exceeding the
amount of the Swing Line Loan Commitment to be used for the purposes
identified in subsection 2.5B, notwithstanding the fact that such Swing
36
38
Line Loans, when aggregated with Swing Line Lender's outstanding
Revolving Loans and Swing Line Lender's Pro Rata Share of the Letter of
Credit Usage then in effect, may exceed Swing Line Lender's Revolving
Loan Commitment. The original amount of the Swing Line Loan Commitment
is $5,000,000; provided that any reduction of the Revolving Loan
Commitments made pursuant to subsection 2.4B(ii) or 2.4B(iii) which
reduces the Revolving Loan Commitments to an amount less than the then
current amount of the Swing Line Loan Commitment shall result in an
automatic corresponding reduction of the Swing Line Loan Commitment to
the amount of the Revolving Loan Commitments, as so reduced, without
any further action on the part of Company, Administrative Agent or
Swing Line Lender. The Swing Line Loans shall have a final maturity
date acceptable to the Swing Line Lender. The Swing Line Loan
Commitment shall expire on the Revolving Loan Commitment Termination
Date and all Swing Line Loans and all other amounts owed hereunder with
respect to the Swing Line Loans shall be paid in full no later than
that date; provided that the Swing Line Loan Commitment shall expire
immediately and without further action on December 11, 1997 if the Term
Loans and the initial Revolving Loans are not made on or before that
date. Amounts borrowed under this subsection 2.1A(iii) may be prepaid,
repaid and reborrowed to but excluding the Revolving Loan Commitment
Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Swing Line Loans and the Swing Line Loan
Commitment shall be subject to the limitation that in no event shall
the Total Utilization of Revolving Loan Commitments at any time exceed
the lesser of the Revolving Loan Commitments then in effect and
(subject to subsection 2.4B(iii)(h)) the then applicable Borrowing
Base.
With respect to any Swing Line Loans which have not been
voluntarily prepaid by Company pursuant to subsection 2.4B(i), Swing
Line Lender may, at any time in its sole and absolute discretion,
deliver to Administrative Agent (with a copy to Company), no later than
11:00 A.M. (New York City time) on the first Business Day in advance of
the proposed Funding Date, a notice (which shall be deemed to be a
Notice of Borrowing given by Company) requesting Revolving Lenders to
make Revolving Loans that are Base Rate Loans on such Funding Date in
an amount equal to the amount of such Swing Line Loans (the "REFUNDED
SWING LINE LOANS") outstanding on the date such notice is given which
Swing Line Lender requests Revolving Lenders to prepay. Anything
contained in this Agreement to the contrary notwithstanding, (i) the
proceeds of such Revolving Loans made by Lenders other than Swing Line
Lender shall be immediately delivered by Administrative Agent to Swing
Line Lender (and not to Company) and applied to repay a corresponding
portion of the Refunded Swing Line Loans and (ii) on the day such
Revolving Loans are made, Swing Line Lender's Pro Rata Share of the
Refunded Swing Line Loans shall be deemed to be paid with the proceeds
of a Revolving Loan made by Swing
37
39
Line Lender, and such portion of the Swing Line Loans deemed to be so
paid shall no longer be outstanding as Swing Line Loans and shall no
longer be due under the Swing Line Note of Swing Line Lender but shall
instead constitute part of Swing Line Lender's outstanding Revolving
Loans and shall be due under the Revolving Note of Swing Line Lender.
Company hereby authorizes Administrative Agent and Swing Line Lender to
charge Company's accounts with Administrative Agent and Swing Line
Lender (up to the amount available in each such account) in order to
immediately pay Swing Line Lender the amount of the Refunded Swing Line
Loans to the extent the proceeds of such Revolving Loans made by
Revolving Lenders, including the Revolving Loan deemed to be made by
Swing Line Lender, are not sufficient to repay in full the Refunded
Swing Line Loans. If any portion of any such amount paid (or deemed to
be paid) to Swing Line Lender should be recovered by or on behalf of
Company from Swing Line Lender in bankruptcy, by assignment for the
benefit of creditors or otherwise, the loss of the amount so recovered
shall be ratably shared among all Revolving Lenders in the manner
contemplated by subsection 10.5.
If for any reason (a) Revolving Loans are not made upon the
request of Swing Line Lender as provided in the immediately preceding
paragraph in an amount sufficient to repay any amounts owed to Swing
Line Lender in respect of any outstanding Swing Line Loans or (b) the
Revolving Loan Commitments are terminated at a time when any Swing Line
Loans are outstanding, each Revolving Lender shall be deemed to, and
hereby agrees to, have purchased a participation in such outstanding
Swing Line Loans in an amount equal to its Pro Rata Share (calculated,
in the case of the foregoing clause (b), immediately prior to such
termination of the Revolving Loan Commitments) of the unpaid amount of
such Swing Line Loans together with accrued interest thereon. Upon one
Business Day's notice from Swing Line Lender, each Revolving Lender
shall deliver to Swing Line Lender an amount equal to its respective
participation in same day funds at the Funding and Payment Office. In
order to further evidence such participation (and without prejudice to
the effectiveness of the participation provisions set forth above),
each Revolving Lender agrees to enter into a separate participation
agreement at the request of Swing Line Lender in form and substance
reasonably satisfactory to Swing Line Lender and the other Revolving
Lenders. In the event any Revolving Lender fails to make available to
Swing Line Lender the amount of such Revolving Lender's participation
as provided in this paragraph, Swing Line Lender shall be entitled to
recover such amount on demand from such Revolving Lender together with
interest thereon at the Federal Funds Effective Rate for three
Business Days and thereafter at the Base Rate. In the event Swing Line
Lender receives a payment of any amount in which other Revolving
Lenders have purchased participations as provided in this paragraph,
Swing Line Lender shall promptly distribute to each such other Lender
its Pro Rata Share of such payment.
38
40
Anything contained herein to the contrary notwithstanding, each
Revolving Lender's obligation to make Revolving Loans for the purpose
of repaying any Refunded Swing Line Loans pursuant to the second
preceding paragraph and each Revolving Lender's obligation to purchase
a participation in any unpaid Swing Line Loans pursuant to the
immediately preceding paragraph shall be absolute and unconditional and
shall not be affected by any circumstance, including (a) any set-off,
counterclaim, recoupment, defense or other right which such Lender may
have against Swing Line Lender, Company or any other Person for any
reason what soever; (b) the occurrence or continuation of an Event of
Default or a Potential Event of Default; (c) any adverse change in the
business, operations, properties, assets, condition (financial or
otherwise) or prospects of Company or any of its Subsidiaries; (d) any
breach of this Agreement or any other Loan Document by any party
thereto; or (e) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing; provided that such
obligations of each Revolving Lender are subject to the condition that
(X) Swing Line Lender believed in good faith that all conditions under
Section 4 to the making of the applicable Refunded Swing Line Loans or
other unpaid Swing Line Loans, as the case may be, were satisfied at
the time such Refunded Swing Line Loans or unpaid Swing Line Loans were
made or (Y) the satisfaction of any such condition not satisfied had
been waived in accordance with subsection 10.6 prior to or at the time
such Refunded Swing Line Loans or other unpaid Swing Line Loans were
made.
B. BORROWING MECHANICS. Term Loans or Revolving Loans made on any
Funding Date (other than Revolving Loans made pursuant to a request by Swing
Line Lender pursuant to subsection 2.1A(iii) for the purpose of
repaying any Refunded Swing Line Loans or Revolving Loans made pursuant to
subsection 3.3B for the purpose of reimbursing any Issuing Lender for the amount
of a drawing under a Letter of Credit issued by it) shall be in an aggregate
minimum amount of $500,000 and integral multiples of $100,000 in excess of that
amount; provided that Term Loans or Revolving Loans made on any Funding Date as
Eurodollar Rate Loans with a particular Interest Period shall be in an aggregate
minimum amount of $500,000 and integral multiples of $100,000 in excess of that
amount. Swing Line Loans made on any Funding Date shall be in an aggregate
minimum amount of $100,000 and integral multiples of $25,000 in excess of that
amount. Whenever Company desires that Lenders make Term Loans or Revolving Loans
it shall deliver to Administrative Agent a Notice of Borrowing no later than
12:00 Noon (New York City time) at least three Business Days in advance of the
proposed Funding Date (in the case of a Eurodollar Rate Loan) or at least one
Business Day in advance of the proposed Funding Date (in the case of a Base Rate
Loan). Whenever Company desires that Swing Line Lender make a Swing Line Loan,
it shall deliver to Administrative Agent a Notice of Borrowing no later than
12:00 Noon (New York City time) on the proposed Funding Date. The Notice of
Borrowing shall specify (i) the proposed Funding Date (which shall be a Business
Day), (ii) the amount and type of Loans requested, (iii) in the case of Swing
Line Loans and any Loans made on the Closing Date, that such Loans shall be Base
Rate Loans,
39
41
(iv) in the case of Revolving Loans not made on the Closing Date, whether such
Loans shall be Base Rate Loans or Eurodollar Rate Loans, (v) in the case of any
Loans requested to be made as Eurodollar Rate Loans, the initial Interest Period
requested therefor and (vi) after giving effect to the proposed borrowing, the
Total Utilization of Revolving Loan Commitments will not exceed the applicable
Borrowing Base. Term Loans and Revolving Loans may be continued as or converted
into Base Rate Loans and Eurodollar Rate Loans in the manner provided in
subsection 2.2D. In lieu of delivering the above-described Notice of Borrowing,
Company may give Administrative Agent telephonic notice by the required time of
any proposed borrowing under this subsec tion 2.1B; provided that such notice
shall be promptly confirmed in writing by delivery of a Notice of Borrowing to
Administrative Agent on or before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any
liability to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of Loans by Lenders in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected Loans hereunder.
Company shall notify Administrative Agent prior to the funding
of any Loans in the event that any of the matters to which Company is required
to certify in the applicable Notice of Borrowing is no longer true and correct
as of the applicable Funding Date, and the acceptance by Company of the proceeds
of any Loans shall constitute a re-certification by Company, as of the
applicable Funding Date, as to the matters to which Company is required to
certify in the applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and
2.6G, a Notice of Borrowing for a Eurodollar Rate Loan (or telephonic notice in
lieu thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Company shall be bound to make a borrowing in accordance
therewith.
C. DISBURSEMENT OF FUNDS. All Term Loans and Revolving Loans under this
Agreement shall be made by Lenders simultaneously and proportionately to their
respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder nor shall the Commitment of any
Lender to make the particular type of Loan requested be increased or decreased
as a result of a default by any other Lender in that other Lender's obligation
to make a Loan requested hereunder. Promptly after receipt by Administrative
Agent of a Notice of Borrowing pursuant to subsection 2.1B (or telephonic notice
in lieu thereof), Administrative Agent shall notify each Lender or Swing Line
Lender, as the case may be, of the proposed borrowing. Each Lender shall make
the amount of its Loan available to Administrative Agent not later than 11:00
A.M. (New York City time) on the applicable Funding Date, and Swing Line Lender
shall make the amount of its Swing Line
40
42
Loan available to Administrative Agent not later than 2:00 P.M.(New York City
time) on the applicable Funding Date, in each case in same day funds in Dollars,
at the Funding and Payment Office. Except as provided in subsection 2.1A(iii) or
subsection 3.3B with respect to Revolving Loans used to repay Refunded Swing
Line Loans or to reimburse any Issuing Lender for the amount of a drawing under
a Letter of Credit issued by it, upon satisfaction or waiver of the conditions
precedent specified in subsections 4.1 (in the case of Term Loans and Initial
Revolving Loans), 4.2 (in the case of all other Loans) and 4.3 (in the case of
all Loans), Administrative Agent shall make the proceeds of such Loans available
to Company on the applicable Funding Date by causing an amount of same day funds
in Dollars equal to the proceeds of all such Loans received by Administrative
Agent from Lenders or Swing Line Lender, as the case may be, to be credited to
the account of Company at the Funding and Payment Office.
Unless Administrative Agent shall have been notified by any
Lender prior to the Funding Date for any Loans that such Lender does not intend
to make available to Administrative Agent the amount of such Lender's Loan
requested on such Funding Date, Administrative Agent may assume that such Lender
has made such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the Federal Funds Effective Rate for three Business
Days and thereafter at the Base Rate. If such Lender does not pay such
corresponding amount forthwith upon Administrative Agent's demand therefor,
Administrative Agent shall promptly notify Company and Company shall immediately
pay such corresponding amount to Administrative Agent together with interest
thereon, for each day from such Funding Date until the date such amount is paid
to Administrative Agent, at the rate payable under this Agreement for Base Rate
Loans. Nothing in this subsection 2.1C shall be deemed to relieve any Lender
from its obligation to fulfill its Commitments hereunder or to prejudice any
rights that Company may have against any Lender as a result of any default by
such Lender hereunder.
D. NOTES. Company shall execute and deliver on the Closing Date (i) (a)
to each Tranche A Term Loan Lender (or to Administrative Agent for that Lender)
a Tranche A Term Note substantially in the form of Exhibit IV-A annexed hereto
to evidence that Tranche A Term Loan Lender's Tranche A Term Loan, in the
principal amount of that Tranche A Term Loan Lender's Tranche A Term Loan and
with other
41
43
appropriate inser tions, (b) to each Tranche B Term Loan Lender (or to
Administrative Agent for that Lender) a Tranche B Term Note substantially in the
form of Exhibit IV-B annexed hereto to evidence that Tranche B Term Loan
Lender's Tranche B Term Loan, in the principal amount of that Tranche B Term
Loan Lender's Tranche B Term Loan and with other appropriate insertions, (ii) to
each Revolving Lender (or to Administrative Agent for that Lender) a Revolving
Note substantially in the form of Exhibit V annexed hereto to evidence that
Revolving Lender's Revolving Loans, in the principal amount of that Revolving
Lender's Revolving Loan Commitment and with other appropriate insertions, and
(iii) to Swing Line Lender (or to Administrative Agent for Swing Line Lender) a
Swing Line Note substantially in the form of Exhibit VI annexed hereto to
evidence Swing Line Lender's Swing Line Loans, in the principal amount of the
Swing Line Loan Commitment and with other appropriate insertions.
Administrative Agent may deem and treat the payee of any Note
as the owner thereof for all purposes hereof unless and until an Assignment
Agreement effecting the assignment or transfer thereof shall have been accepted
by Administrative Agent as provided in subsection 10.1B(ii). Any request,
authority or consent of any person or entity who, at the time of making such
request or giving such authority or consent, is the holder of any Note shall be
conclusive and binding on any subsequent holder, assignee or transferee of that
Note or of any Note or Notes issued in exchange therefor.
2.2 INTEREST ON THE LOANS.
A. RATE OF INTEREST. Subject to the provisions of subsections 2.6 and
2.7, each Term Loan and each Revolving Loan shall bear interest on the unpaid
principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Base Rate or
the Adjusted Eurodollar Rate. Subject to the provisions of subsection 2.7, each
Swing Line Loan shall bear interest on the unpaid principal amount thereof from
the date made through maturity (whether by acceleration or otherwise) at a rate
determined by reference to the Base Rate. The applicable basis for determining
the rate of interest with respect to any Term Loan or any Revolving Loan shall
be selected by Company initially at the time a Notice of Borrowing is given with
respect to such Loan pursuant to subsection 2.1B, and the basis for determining
the interest rate with respect to any Term Loan or any Revolving Loan may be
changed from time to time pursuant to subsection 2.2D. If on any day a Term Loan
or Revolving Loan is outstanding with respect to which notice has not been
delivered to Administrative Agent in accordance with the terms of this Agreement
specifying the applicable basis for determining the rate of interest, then for
that day that Loan shall bear interest determined by reference to the Base Rate.
(i) (a) Subject to the provisions of subsections 2.2E and 2.7,
the Tranche A Term Loans and the Revolving Loans shall bear interest through
maturity as follows:
(I) if a Base Rate Loan, then at the sum of the Base Rate
plus the Base Rate Margin set forth in the table below opposite the
Consolidated Leverage Ratio for the four-fiscal quarter period for
which the applicable Margin Determination Certificate has been
delivered pursuant to subsection 6.1(iv); or
42
44
(II) if a Eurodollar Rate Loan, then at the sum of the
Adjusted Eurodollar Rate plus the Eurodollar Rate Margin set forth in
the table below opposite the Consolidated Leverage Ratio for the
four-fiscal quarter period for which the applicable Margin
Determination Certificate has been delivered pursuant to subsection
6.1(iv):
Applicable
Eurodollar Rate Applicable Base
Consolidated Leverage Ratio Margin Rate Margin
--------------------------- -------- ------------
Greater than
or equal to 4.50:1.00 2.25% 1.25%
Greater than
or equal to 4.00:1.00
but less than 4.50:1.00 2.00% 1.00%
Greater than
or equal to 3.50:1.00
but less than 4.00:1.00 1.75% 0.75%
Less than 3.50:1.00 1.50% 0.50%
provided that, for the first six months after the Closing Date, the applicable
margin for Tranche A Term Loans and Revolving Loans that are Eurodollar Rate
Loans shall be 2.25% per annum and for Tranche A Term Loans and Revolving Loans
that are Base Rate Loans shall be 1.25% per annum.
(b) Subject to the provisions of subsections 2.2E and 2.7, the
Tranche B Term Loans shall bear interest through maturity as follows:
(I) if a Base Rate Loan, then at the sum of the Base Rate
plus the Base Rate Margin set forth in the table below opposite the
Consolidated Leverage Ratio for the four-fiscal quarter period for
which the applicable Margin Determination Certificate has been
delivered pursuant to subsection 6.1(iv); or
(II) if a Eurodollar Rate Loan, then at the sum of the
Adjusted Eurodollar Rate plus the Eurodollar Rate Margin set forth in
the table below opposite the Consolidated Leverage Ratio for the
four-fiscal quarter period for which the applicable Margin
Determination Certificate has been delivered pursuant to subsection
6.1(iv):
43
45
Applicable
Eurodollar Rate Applicable Base
Consolidated Leverage Ratio Margin Rate Margin
--------------------------- -------- ------------
Greater than
or equal to 4.50:1.00 2.50% 1.50%
Greater than
or equal to 4.00:1.00
but less than 4.50:1.00 2.25% 1.25%
Greater than
or equal to 3.50:1.00
but less than 4.00:1.00 2.00% 1.00%
Less than 3.50:1.00 1.75% 0.75%
provided that, for the first six months after the Closing Date, the applicable
margin for Tranche B Term Loans that are Eurodollar Rate Loans shall be 2.50%
per annum and for Tranche B Term Loans that are Base Rate Loans shall be 1.50%
per annum.
Upon delivery of the Margin Determination Certificate by Company to
Administrative Agent pursuant to subsection 6.1(iv), the Applicable Base Rate
Margin and the Applicable Eurodollar Rate Margin shall automatically be adjusted
in accordance with such Margin Determination Certificate, such adjustment to
become effective on the next succeeding Business Day following the receipt by
Administrative Agent of such Margin Determination Certificate; provided that, if
at any time a Margin Determination Certificate is not delivered at the time
required pursuant to subsection 6.1(iv), from the time such Margin Determination
Certificate was required to be delivered until delivery of such Margin
Determination Certificate, such applicable margins shall be the maximum
percentage amount for the relevant Loan set forth above.
(ii) Subject to the provisions of subsections 2.2E and 2.7, the
Swing Line Loans shall bear interest through maturity at the sum of the Base
Rate plus the Applicable Base Rate Margin for Revolving Loans minus a rate equal
to the Commitment Fee percentage then in effect as determined pursuant to
subsection 2.3A.
B. INTEREST PERIODS. In connection with each Eurodollar Rate Loan,
Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/ Continuation, as the case may be, select an interest period (each an
"INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one, two, three or six month period or, if
available, and at the Administrative Agent's reasonable discretion, a twelve
month period; provided that:
44
46
(i) the initial Interest Period for any Eurodollar Rate Loan
shall commence on the Funding Date in respect of such Loan, in the case
of a Loan initially made as a Eurodollar Rate Loan, or on the date
specified in the applicable Notice of Conversion/Continuation, in the
case of a Loan converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant to a
Notice of Conversion/ Continuation, each successive Interest Period
shall commence on the day on which the next preceding Interest Period
expires;
(iii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided that, if any Interest Period
would otherwise expire on a day that is not a Business Day but is a day
of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(iv) 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, subject to clause (v) of this subsection 2.2B, end on
the last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the
Tranche A Term Loans shall extend beyond December 11, 2003, no interest
period with respect to any portion of the Tranche B Term Loans shall
extend beyond December 11, 2004 and no Interest Period with respect to
any portion of the Revolving Loans shall extend beyond the Revolving
Loan Commitment Termination Date;
(vi) no Interest Period with respect to any portion of the
Tranche A Term Loans shall extend beyond a date on which Company is
required to make a scheduled payment of principal of the Tranche A Term
Loans unless the sum of (a) the aggregate principal amount of Tranche A
Term Loans that are Base Rate Loans plus (b) the aggregate principal
amount of Tranche A Term Loans that are Eurodollar Rate Loans with
Interest Periods expiring on or before such date equals or exceeds the
principal amount required to be paid on the Tranche A Term Loans on
such date;
(vii) no Interest Period with respect to any portion of the
Tranche B Term Loans shall extend beyond a date on which Company is
required to make a scheduled payment of principal of the Tranche B Term
Loans unless the sum of (a) the aggregate principal amount of Tranche B
Term Loans that are Base Rate Loans plus (b) the aggregate principal
amount of Tranche B Term Loans that are
45
47
Eurodollar Rate Loans with Interest Periods expiring on or before such
date equals or exceeds the principal amount required to be paid on the
Tranche B Term Loans on such date;
(viii) there shall be no more than eight Interest Periods
outstanding at any time; and
(ix) in the event Company fails to specify an Interest Period
for any Eurodollar Rate Loan in the applicable Notice of Borrowing or
Notice of Conversion/Continuation, Company shall be deemed to have
selected an Interest Period of one month.
C. INTEREST PAYMENTS. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity); provided that in the event any Revolving Loans that are Base Rate
Loans are prepaid pursuant to subsection 2.4B(i), interest accrued on such
Revolving Loans through the date of such prepayment shall be payable on the next
succeeding Interest Payment Date applicable to Base Rate Loans (or, if earlier,
at final maturity).
D. CONVERSION OR CONTINUATION. Subject to the provisions of subsection
2.6, Company shall have the option (i) to convert at any time all or any part of
its outstanding Tranche A Term Loans, Tranche B Term Loans or Revolving Loans
(with the exception of any Swing Line Loans) equal to $500,000 and integral
multiples of $100,000 in excess of that amount from Loans bearing interest at a
rate determined by reference to one basis to Loans bearing interest at a rate
determined by reference to an alternative basis or (ii) upon the expiration of
any Interest Period applicable to a Eurodollar Rate Loan, to continue all or any
portion of such Loan equal to $500,000 and integral multiples of $100,000 in
excess of that amount as a Eurodollar Rate Loan; provided, however, that a
Eurodollar Rate Loan may only be converted into a Base Rate Loan on the
expiration date of an Interest Period applicable thereto.
Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 12:00 Noon (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation
shall specify (i) the proposed conversion/continuation date (which shall be a
\Business Day), (ii) the amount and type of the Loan to be converted/ continued,
(iii) the nature of the proposed conversion/continuation, (iv) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, the requested
Interest Period, and (v) in the case of a conversion to, or a continuation of, a
Eurodollar Rate Loan, that no
46
48
Potential Event of Default or Event of Default has occurred and is continuing.
In lieu of delivering the above-described Notice of Conversion/Continuation,
Company may give Administrative Agent telephonic notice by the required time of
any proposed conversion/ continuation under this subsection 2.2D; provided that
such notice shall be promptly confirmed in writing by delivery of a Notice of
Conversion/Continuation to Administrative Agent on or before the proposed
conversion/continuation date. Upon receipt of written or telephonic notice of
any proposed conversion/continuation under this subsection 2.2D, Administrative
Agent shall promptly transmit such notice by telefacsimile or telephone to each
Lender.
Neither Administrative Agent nor any Lender shall incur any
liability to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and
2.6G, a Notice of Conversion/Continuation for conversion to, or continuation of,
a Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and
Company shall be bound to effect a conversion or continuation in accordance
therewith.
E. DEFAULT RATE. Upon the occurrence and during the continuation of any
Event of Default and at the request of the Requisite Lenders, the outstanding
principal amount of all Loans and, to the extent permitted by applicable law,
any interest payments thereon not paid when due and any fees and other amounts
then due and payable hereunder, shall thereafter bear interest (including
post-petition interest in any proceeding under the Bankruptcy Code or other
applicable bankruptcy laws) payable upon demand at a rate that is 2% per annum
in excess of the interest rate otherwise payable under this Agreement with
respect to the applicable Loans (or, in the case of any such fees and other
amounts, at a rate which is 2% per annum in excess of the interest rate
otherwise payable under this Agreement for Tranche B Term Loans that are Base
Rate Loans); provided that, in the case of Eurodollar Rate Loans, upon the
expiration of the Interest Period in effect at the time any such increase in
interest rate is effective such Eurodollar Rate Loans shall thereupon become
Base Rate Loans and shall thereafter bear interest payable upon demand at a rate
which is 2% per annum in excess of the interest rate otherwise payable under
this Agreement for Tranche B Terms Loans that are Base Rate Loans. Payment or
acceptance of the increased rates of interest provided for in this
subsection 2.2E is not a permitted alternative to timely payment and shall not
constitute a waiver of any Event of Default or otherwise prejudice or limit any
rights or remedies of any Agent or any Lender.
47
49
F. COMPUTATION OF INTEREST. Interest on the Loans shall be computed
(i) in the case of Base Rate Loans, on the basis of a 365-day, and (ii) in the
case of Eurodollar Rate Loans, on the basis of a 360-day year, in each case for
the actual number of days elapsed in the period during which it accrues. In
computing interest on any Loan, the date of the making of such Loan or the first
day of an Interest Period applicable to such Loan or, with respect to a Base
Rate Loan being converted from a Eurodollar Rate Loan, the date of conversion of
such Eurodollar Rate Loan to such Base Rate Loan, as the case may be, shall be
included, and the date of payment of such Loan or the expiration date of an
Interest Period applicable to such Loan or, with respect to a Base Rate Loan
being converted to a Eurodollar Rate Loan, the date of conversion of such Base
Rate Loan to such Eurodollar Rate Loan, as the case may be, shall be excluded;
provided that if a Loan is repaid on the same day on which it is made, one day's
interest shall be paid on that Loan.
2.3 FEES.
A. COMMITMENT FEES. Company agrees to pay to Administrative Agent, for
distribution to each Lender in proportion to that Lender's Pro Rata Share,
commitment fees for the period from and including the Closing Date to and
excluding the Revolving Loan Commitment Termination Date equal to the average of
the daily excess of the Revolving Loan Commitments over the aggregate principal
amount of outstanding Revolving Loans (but not including any outstanding Swing
Line Loans) and Letter of Credit Usage multiplied by the commitment fee
percentage set forth in the table below opposite the Consolidated Leverage Ratio
for the four-fiscal quarter period for which the applicable Margin Determination
Certificate has been delivered pursuant to subsection 6.1(iv):
Commitment Fee
Consolidated Leverage Ratio Percentage
- ------------------------------------- ------------------------
Greater than or
equal to 4.50:1.00 0.45%
Greater than or
equal to but 4.00:1.00
less than 4.50:1.00 0.40%
Greater than or
equal to but 3.50:1.00
less than 4.00:1.00 0.375%
less than 3.50:1.00 0.35%
such commitment fees to be calculated on the basis of a 360-day year and the
actual number of days elapsed and to be payable quarterly in arrears on March
31, June 30, September 30
48
50
and December 31 of each year, commencing on the first such date to occur after
the Closing Date, and on the Commitment Termination Date; provided that for the
first six months after the Closing Date the applicable commitment fee percentage
shall be 0.45%. Upon delivery of the Margin Determination Certificate by Company
to Administrative Agent pursuant to subsection 6.1(iv), the applicable
commitment fee percentage shall automatically be adjusted in accordance with
such Margin Determination Certificate, such adjustment to become effective on
the next succeeding Business Day following the receipt by Administrative Agent
of such Margin Determination Certificate; provided that in the event that
Company fails to deliver a Margin Determination Certificate timely in accordance
with the provisions of subsection 6.1(iv), from the time such Margin
Determination Certificate should have been delivered until such date as such a
Margin Determination Certificate is actually delivered, the applicable
commitment fee percentage shall be the maximum percentage amount set forth above
per annum.
B. OTHER FEES. Company agrees to pay to Arranger and
Administrative Agent such other fees in the amounts and at the times
separately agreed upon between Company and Administrative Agent and Arranger.
2.4 REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN REVOLVING LOAN COMMITMENTS;
GENERAL PROVISIONS REGARDING PAYMENTS.
A. SCHEDULED PAYMENTS OF TERM LOANS.
(i) Tranche A Term Loans. Company shall make principal payments
on the Tranche A Term Loans in installments on the dates and in the
amounts set forth below:
49
51
Scheduled Repayment
Date of Tranche A Term Loans
---- -----------------------
March 31, 1999 $750,000
June 30, 1999 $750,000
September 30, 1999 $750,000
December 31, 1999 $750,000
March 31, 2000 $750,000
June 30, 2000 $750,000
September 30, 2000 $750,000
December 31, 2000 $750,000
March 31, 2001 $1,500,000
June 30, 2001 $1,500,000
September 30, 2001 $1,500,000
December 31, 2001 $1,500,000
March 31, 2002 $1,875,000
June 30, 2002 $1,875,000
September 30, 2002 $1,875,000
December 31, 2002 $1,875,000
March 31, 2003 $2,625,000
June 30, 2003 $2,625,000
September 30, 2003 $2,625,000
December 11, 2003 $2,625,000
------------
Total $30,000,000
provided that the scheduled installments of principal of the Tranche A
Term Loans set forth above shall be reduced in connection with any
voluntary or mandatory prepayments of the Tranche A Term Loans in
accordance with subsection 2.4B(iv)(b); and provided, further that the
Tranche A Term Loans and all other amounts owed hereunder with respect
to the Tranche A Term Loans shall be paid in full no later than
December 11, 2003 and the final installment payable by Company in
respect of the Tranche A Term Loans on such date shall be in an amount,
if such amount is different from that specified above, sufficient to
repay all amounts owing by Company under this Agreement with respect to
the Tranche A Term Loans.
(ii) Tranche B Term Loans. Company shall make principal payments
on the Tranche B Term Loans in installments on the dates and in the
amounts set forth below:
50
52
Scheduled Repayment
Date of Tranche B Term Loans
---- -----------------------
March 31, 1999 $ 62,500
June 30, 1999 $ 62,500
September 30, 1999 $ 62,500
December 31, 1999 $ 62,500
March 31, 2000 $ 62,500
June 30, 2000 $ 62,500
September 30, 2000 $ 62,500
December 31, 2000 $ 62,500
March 31, 2001 $ 62,500
June 30, 2001 $ 62,500
September 30, 2001 $ 62,500
December 31, 2001 $ 62,500
March 31, 2002 $ 62,500
June 30, 2002 $ 62,500
September 30, 2002 $ 62,500
December 31, 2002 $ 62,500
March 31, 2003 $ 62,500
June 30, 2003 $ 62,500
September 30, 2003 $ 62,500
December 31, 2003 $ 62,500
March 31, 2004 $ 62,500
June 30, 2004 $ 62,500
September 30, 2004 $ 62,500
December 11, 2004 $23,562,500
-------------
Total $25,000,000
provided that the scheduled installments of principal of the Tranche B
Term Loans set forth above shall be reduced in connection with any
voluntary or mandatory prepayments of the Tranche B Term Loans in
accordance with subsection 2.4B(iv); and provided, further that the
Tranche B Term Loans and all other amounts owed hereunder with respect
to the Tranche B Term Loans shall be paid in full no later than
December 11, 2004 and the final installment payable by Company in
respect of the Tranche B Term Loans on such date shall be in an amount,
if such amount is different from that specified above, sufficient to
repay all amounts owing by Company under this Agreement with respect to
the Tranche B Term Loans.
51
53
B. PREPAYMENTS AND UNSCHEDULED REDUCTIONS IN REVOLVING LOAN
COMMITMENTS.
(i) Voluntary Prepayments. Company may, upon written or
telephonic notice to Administrative Agent on or prior to 12:00 Noon
(New York City time) on the date of prepayment, which notice, if
telephonic, shall be promptly confirmed in writing, at any time and
from time to time prepay any Swing Line Loan on any Business Day in
whole or in part in an aggregate minimum amount of $100,000 and
integral multiples of $25,000 in excess of that amount. Company may,
upon not less than one Business Day's prior written or telephonic
notice, in the case of Base Rate Loans, and three Business Days' prior
written or telephonic notice, in the case of Eurodollar Rate Loans, in
each case given to Administrative Agent by 12:00 Noon (New York City
time) on the date required and, if given by telephone, promptly
confirmed in writing to Administrative Agent (which original written or
telephonic notice Administrative Agent will promptly transmit by
telefacsimile or telephone to each Lender), at any time and from time
to time prepay any Term Loans or Revolving Loans on any Business Day in
whole or in part in an aggregate minimum amount of $500,000 and
integral multiples of $100,000 in excess of that amount; provided,
however, that a Eurodollar Rate Loan may only be prepaid on the
expiration of the Interest Period applicable thereto unless Company
complies with subsection 2.6D with respect to any breakage costs
resulting from such prepayment being made on a date prior to the
expiration of the applicable Interest Period. Notice of prepayment
having been given as aforesaid, the principal amount of the Loans
specified in such notice shall become due and payable on the prepayment
date specified therein. Any such voluntary prepayment shall be applied
as specified in subsection 2.4B(iv).
(ii) Voluntary Reductions of Revolving Loan Commitments.
Company may, upon not less than three Business Days' prior written or
telephonic notice confirmed in writing to Administrative Agent (which
original written or telephonic notice Administrative Agent will
promptly transmit by telefacsimile or telephone to each Lender), at any
time and from time to time terminate in whole or permanently reduce in
part, without premium or penalty, the Revolving Loan Commitments in an
amount up to the amount by which the Revolving Loan Commitments exceed
the Total Utilization of Revolving Loan Commitments at the time of such
proposed termination or reduction; provided that any such partial
reduction of the Revolving Loan Commitments shall be in an aggregate
minimum amount of $500,000 and integral multiples of $100,000 in excess
of that amount. Company's notice to Administrative Agent shall
designate the date (which shall be a Business Day) of such termination
or reduction and the amount of any partial reduction, and such
termination or reduction of the Revolving Loan Commitments shall be
effective on the date specified in Company's notice and shall reduce
the Revolving Loan Commitment of each Revolving Lender proportionately
to its Pro Rata Share.
52
54
(iii) Mandatory Prepayments and Mandatory Reductions of
Revolving Loan Commitments. The Loans shall be prepaid and/or the
Revolving Loan Commitments shall be permanently reduced in the amounts
and under the circumstances set forth below, all such prepayments
and/or reductions to be applied as set forth below or as more
specifically provided in subsection 2.4B(iv):
(a) Prepayments and Reductions From Net Asset Sale
Proceeds. No later than the first Business Day following the
date of receipt by Company or any of its Domestic Subsidiaries
of any Net Asset Sale Proceeds in respect of any Asset Sale,
Company shall prepay the Loans and/or the Revolving Loan
Commitments shall be permanently reduced in an aggregate amount
equal to such Net Asset Sale Proceeds; provided, however, that
so long as no Event of Default has occurred and is continuing,
no such prepayment shall be required to the extent Company
determines to utilize an amount of such Net Asset Sale Proceeds
from one or more Asset Sales not to exceed $10,000,000 in the
aggregate during the term of this Agreement to replace the
assets so sold and Company so utilizes or contractually commits
to utilize (and thereafter so utilizes pursuant to such
contract) such Net Asset Sale Proceeds within six months of the
receipt thereof.
(b) Prepayments and Reductions from Net Insurance/
Condemnation Proceeds. No later than the five Business Days
following the date of receipt by Administrative Agent or by
Company or any of its Domestic Subsidiaries of any Net
Insurance/Condemnation Proceeds in excess of $250,000, Company
shall prepay the Loans and/or the Revolving Loan Commitments
shall be permanently reduced in an aggregate amount equal to
the amount of such Net Insurance/Condemnation Proceeds;
provided, however, that so long as no Event of Default has
occurred and is continuing, no such prepayment shall be
required to the extent Company determines to utilize such Net
Insurance/Condemnation Proceeds to replace, rebuild or repair
the asset damaged, destroyed or taken, and Company so utilizes
or contractually commits to utilize such Net
Insurance/Condemnation Proceeds within 18 months of the receipt
thereof.
(c) Prepayments and Reductions Due to Reversion of
Surplus Assets of Pension Plans. Within five Business Days of
the date of return to Company or any of its Domestic
Subsidiaries of any surplus assets of any pension plan of
Company or any of its Domestic Subsidiaries, Company shall
prepay the Loans and/or the Revolving Loan Commitments shall be
permanently reduced in an aggregate amount (such amount being
the "NET PENSION PROCEEDS") equal to 100% of such returned
surplus assets, net of transaction costs and expenses incurred
in obtaining such return, including taxes and penalties payable
as a result thereof.
53
55
(d) Prepayments and Reductions Due to Issuance of Debt
Securities. On the date of receipt by Holdings, Company or any
of its Domestic Subsidiaries of the Cash proceeds (any such
proceeds, net of underwriting discounts and commissions and
other reasonable costs and expenses associated therewith,
including reasonable legal fees and expenses, being "NET DEBT
SECURITIES PROCEEDS") from the issuance of debt Securities of
Holdings, Company or any of its Domestic Subsidiaries after the
Closing Date, Company shall prepay the Loans and/or the
Revolving Loan Commitments shall be permanently reduced in an
aggregate amount equal to 100% of such Net Debt Securities
Proceeds; provided, however, that for purposes of this clause
(d), Capital Leases and purchase money Indebtedness shall not
be deemed to be debt Securities.
(e) Prepayment and Reductions Due to Issuance of
Equity Securities. On the date of receipt by Holdings, Company
or any of its Domestic Subsidiaries of the cash proceeds (any
such proceeds, net of underwriting discounts and commissions
and other reasonable costs and expenses associated therewith,
including reasonable legal fees and expenses, being "NET EQUITY
SECURITIES PROCEEDS") from the issuance of equity securities of
Holdings, Company or any of such Subsidiaries after the Closing
Date (other than the proceeds of the issuance of equity
securities to AIP), Company shall prepay the Loans and/or the
Revolving Loan Commitments shall be permanently reduced in an
aggregate amount equal to 50% of such Net Equity Securities
Proceeds; provided, that at any time that the most current
Compliance Certificate delivered pursuant to subsection 6.1(iv)
indicates that the Consolidated Leverage Ratio is less than
3.50:1.00, no such prepayment shall be required; provided
further that at any time a Compliance Certificate has not been
delivered at the time required pursuant to subsection 6.1(iv),
from the time such Compliance Certificate was required to be
delivered until delivery of such Compliance Certificate, the
first proviso hereto shall not be in effect.
(f) Prepayments and Reductions from Consolidated
Excess Cash Flow. In the event that there shall be Consolidated
Excess Cash Flow for any Fiscal Year (commencing with the
Fiscal Year beginning January 1, 1998), Company shall, no later
than 110 days after the end of such Fiscal Year, prepay the
Loans and/or the Revolving Loan Commitments shall be
permanently reduced in an aggregate amount equal to 50% of such
Consolidated Excess Cash Flow; provided, that any time that the
most current Compliance Certificate delivered pursuant to
subsection 6.1(iv) indicates that the Consolidated Leverage
Ratio is less than 3.50:1.00, no such prepayment shall be
required, provided further that at any time a Compliance
Certificate has not been delivered at the time required
pursuant to subsection
54
56
6.1(iv), from the time such Compliance Certificate was required
to be delivered until delivery of such Compliance Certificate,
the first proviso shall not be in effect.
(g) Change of Control. On the date which is the
earlier of (x) 30 days after the date on which a "change of
control" (as defined in the Senior Subordinated Indenture)
occurs and (y) the date on which Company shall have offered to
repurchase the Senior Subordinated Notes, as a result of such
change of control (i) Company shall prepay in full the Loans,
(ii) the Revolving Loan Commitments shall be terminated in full
and (iii) Company shall cash collateralize any outstanding
Letters of Credit on terms reasonably satisfactory to the
Administrative Agent.
(h) Calculations of Net Proceeds Amounts; Additional
Prepayments and Reductions Based on Subsequent Calculations.
Concurrently with any prepayment of the Loans and/or reduction
of the Revolving Loan Commitments pursuant to subsections
2.4B(iii)(a)-(g), Company shall deliver to Agents an Officer's
Certificate demonstrating the calculation of the amount (the
"NET PROCEEDS AMOUNT") of the applicable Net Asset Sale
Proceeds, the applicable Net Insurance/Condemnation Proceeds,
the applicable Net Pension Proceeds, the applicable Net Debt
Securities Proceeds, the applicable Net Equity Securities
Proceeds (as such terms are defined in subsections
2.4B(iii)(c), (d) and (e)) or the applicable Consolidated
Excess Cash Flow that gave rise to such prepayment and/or
reduction. In the event that Company shall subsequently
determine that the actual Net Proceeds Amount was greater than
the amount set forth in such Officer's Certificate, Company
shall promptly make an additional prepayment of the Loans
(and/or, if applicable, the Revolving Loan Commit ments shall
be permanently reduced) in an amount equal to the amount of
such excess, and Company shall concurrently therewith deliver
to Agents an Officer's Certificate demonstrating the derivation
of the additional Net Proceeds Amount resulting in such excess.
(i) Prepayments Due to Reductions or Restrictions of
Revolving Loan Commitments. Company shall from time to time
prepay first the Swing Line Loans and second the Revolving
Loans to the extent necessary (1) so that the Total Utilization
of Revolving Loan Commitments shall not at any time exceed the
Revolving Loan Commitments then in effect and (2) to give
effect to the limitations set forth in the second paragraph of
subsection 2.1A(ii) and the second paragraph of subsection
2.1A(iii); provided that if the Total Utilization of Revolving
Loan Commitments exceeds the then applicable Borrowing Base
solely by reason of a reduction in the Borrowing Base
subsequent to the making of Revolving Loans or Swing Line
Loans,
55
57
which Loans did not result in a violation of the second
paragraph of subsection 2.1A(ii) or the second paragraph of
subsection 2.1A(iii), then Company may prepay the Swing Line
Loans or Revolving Loans, as aforesaid, within five Business
Days of the date of reduction of the Borrowing Base.
(iv) Application of Prepayments.
(a) Application of Voluntary Prepayments by Type of
Loans and Order of Maturity. Any voluntary prepayments pursuant
to subsection 2.4B(i) shall be applied as specified by Company
in the applicable notice of prepayment; provided that in the
event Company fails to specify the Loans to which any such
prepayment shall be applied, such prepayment shall be applied
first to repay outstanding Swing Line Loans to the full extent
thereof, second to repay outstanding Term Loans to the full
extent thereof, and third to repay outstanding Revolving Loans
to the full extent thereof. Any voluntary prepayments of the
Term Loans pursuant to subsection 2.4B(i) (whether the
application thereof is specified by Company or not) shall be
applied to prepay the Tranche A Term Loans and Tranche B Term
Loans on a pro rata basis (in accordance with the respective
outstanding principal amounts thereof) and to reduce the
scheduled installments of principal of the Term Loans set forth
in subsection 2.4A pro rata, provided, however, that with
respect to prepayments pursuant to subsection 2.4B(iii)(a), if
the Borrowing Base is reduced by the applicable Asset Sale,
Company may, at its option, permanently reduce the Revolving
Loan Commitment in any amount up to the amount of the reduction
in the Borrowing Base and shall not be required to prepay the
Term Loans to the amount of such Revolving Loan Commitment
reduction.
(b) Application of Mandatory Prepayments by Type of
Loans. Any amount (the "APPLIED AMOUNT") required to be applied
as a mandatory prepayment of the Loans and/or a reduction of
the Revolving Loan Commitments pursuant to subsections
2.4B(iii)(a)-(g) shall be applied first to prepay the Tranche A
Term Loans and Tranche B Term Loans to the full extent thereof,
on a pro rata basis (in accordance with the respective
outstanding principal amounts thereof) and to reduce the
scheduled installments of principal of the Tranche A Term Loans
and Tranche B Term Loans set forth in subsection 2.4A pro rata,
second, to the extent of any remaining portion of the Applied
Amount, to prepay the Swing Line Loans to the full extent
thereof and to permanently reduce the Revolving Loan
56
58
Commitments by the amount of such prepayment, third, to the
extent of any remaining portion of the Applied Amount, to
prepay the Revolving Loans to the full extent thereof and to
further permanently reduce the Revolving Loan Commitments by
the amount of such prepayment, and fourth, to the extent of any
remaining portion of the Applied Amount, to further permanently
reduce the Revolving Loan Commitments to the full extent
thereof; provided that the Revolving Loan Commitments shall not
be reduced below $15,000,000 in the aggregate by reason of any
mandatory prepayments.
(c) Application of Prepayments to Base Rate Loans and
Eurodollar Rate Loans. Considering Tranche A Term Loans,
Tranche B Term Loans and Revolving Loans being prepaid
separately, any prepayment thereof shall be applied first to
Base Rate Loans to the full extent thereof before applica tion
to Eurodollar Rate Loans, in each case in a manner which
minimizes the amount of any payments required to be made by
Company pursuant to subsection 2.6D.
C. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by Company of
principal, interest, fees and other Obligations hereunder and under the
Notes shall be made in Dollars in same day funds, without defense,
setoff or counterclaim, free of any restriction or condition, and
delivered to Administrative Agent not later than 12:00 Noon (New York
City time) on the date due at the Funding and Payment Office for the
account of Lenders; funds received by Administrative Agent after that
time on such due date shall be deemed to have been paid by Company on
the next succeeding Business Day. Company hereby authorizes
Administrative Agent to charge its accounts with Administrative Agent
in order to cause timely payment to be made to Administrative Agent of
all principal, interest, fees and expenses due hereunder (subject to
sufficient funds being available in its accounts for that purpose).
(ii) Application of Payments to Principal and Interest. Except
as provided in subsection 2.2C, all payments in respect of the
principal amount of any Loan shall include payment of accrued interest
on the principal amount being repaid or prepaid, and all such payments
(and, in any event, any payments in respect of any Loan on a date when
interest is due and payable with respect to such Loan) shall be applied
to the payment of interest before application to principal. (iii)
Apportionment of Payments. Aggregate principal and interest payments in
respect of Tranche A Term Loans, Tranche B Term Loans and Revolving
Loans shall be apportioned among all outstanding Loans to which such
payments relate, in each case proportionately to Lenders' respective
Pro Rata Shares. Administrative Agent shall promptly distribute to each
Lender, at its primary address set forth below its name on the
appropriate signature page hereof or at such other address as such
Lender may request, its Pro Rata Share of all such
57
59
payments received by Administrative Agent and the commitment fees of
such Lender when received by Administrative Agent pursuant to
subsection 2.3. Notwithstanding the foregoing provisions of this
subsection 2.4C(iii), if, pursuant to the provisions of subsection
2.6C, any Notice of Conversion/Continuation is withdrawn as to any
Affected Lender or if any Affected Lender makes Base Rate Loans in lieu
of its Pro Rata Share of any Eurodollar Rate Loans, Administrative
Agent shall give effect thereto in apportioning payments received
thereafter, except in the case of Swing Line Loans.
(iv) Payments on Business Days. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business
Day, such payment shall be made on the next succeeding Business Day and
such extension of time shall be included in the computation of the
payment of interest hereunder or of the commitment fees hereunder, as
the case may be.
(v) Notation of Payment. Each Lender agrees that before
disposing of any Note held by it, or any part thereof (other than by
granting participations therein), that Lender will make a notation
thereon of all Loans evidenced by that Note and all principal payments
previously made thereon and of the date to which interest thereon has
been paid; provided that the failure to make (or any error in the
making of) a notation of any Loan made under such Note shall not limit
or otherwise affect the obligations of Company hereunder or under such
Note with respect to any Loan or any payments of principal or interest
on such Note.
D. APPLICATION OF PROCEEDS OF COLLATERAL AND PAYMENTS UNDER
GUARANTIES
(i) Application of Proceeds of Collateral. Except as provided
in subsection 2.4B(iii)(a) with respect to prepayments from Net Asset
Sale Proceeds, all proceeds received by Administrative Agent in respect
of any sale of, collection from, or other realization upon all or any
part of the Collateral under any Collateral Document may, in the
discretion of Administrative Agent, be held by Administrative Agent as
Collateral for, and/or (then or at any time thereafter) applied in full
or in part by Administrative Agent against, the applicable Secured
Obligations (as defined in such Collateral Document) in the following
order of priority:
(a) To the payment of all costs and expenses of such
sale, collection or other realization, including reasonable
compensation to Administrative Agent and its agents and
counsel, and all other expenses, liabilities and advances made
or incurred by Administrative Agent in connection therewith,
and all amounts for which Administrative Agent is entitled to
indemnification under such Collateral Document and all advances
made by Administrative Agent thereunder for the account of the
applicable Loan Party, and to the payment of all costs and
expenses paid or incurred by
58
60
Administrative Agent in connection with the exercise of any
right or remedy under such Collateral Document, all in
accordance with the terms of this Agreement and such Collateral
Document;
(b) thereafter, to the extent of any excess such
proceeds, to the payment of all other such Secured Obligations
for the ratable benefit of the holders thereof;
(c) thereafter, to the extent of any excess such
proceeds, to the payment of cash collateral for Letters of
Credit for the ratable benefit of the Issuing Lenders thereof
and holders of participations therein; and
(d) thereafter, to the extent of any excess such
proceeds, to the payment to or upon the order of such Loan
Party or to whosoever may be lawfully entitled to receive the
same or as a court of competent jurisdiction may direct.
(ii) Application of Payments Under Guaranties. All payments
received by Administrative Agent under any of the Guaranties shall be
applied promptly from time to time by Administrative Agent in the
following order of priority:
(a) To the payment of the costs and expenses of any
collection or other realization under any of the Guaranties,
including reasonable compensation to Administrative Agent and
its agents and counsel, and all expenses, liabilities and
advances made or incurred by Administrative Agent in connection
therewith, all in accordance with the terms of this Agreement
and such Guaranty;
(b) thereafter, to the extent of any excess such
payments, to the payment of all other Guarantied Obligations
(as defined in such Guaranty) for the ratable benefit of the
holders thereof;
(c) thereafter, to the extent of any excess such
payment, to the payment of cash collateral for Letters of
Credit for the ratable benefit of the Issuing Lenders thereof
and holders of participations therein; and
(d) thereafter, to the extent of any excess such
payments, to the payment to the applicable Subsidiary Guarantor
or to whosoever may be lawfully entitled to receive the same or
as a court of competent jurisdiction may direct.
59
61
2.5 USE OF PROCEEDS.
A. TERM LOANS. The proceeds of the Term Loans, together with other
funds available to Company and Holdings and approximately $6,800,000 of the
proceeds of the Revolving Loans, shall be applied (i) by Holdings (pursuant to
the Intercompany Note) to purchase or redeem 100% of issued and outstanding
capital stock of SAHC from the Old Holders for approximately $125,500,000 and
(ii) by Company to refinance approximately $83,000,000 of senior indebtedness
under the Existing Credit Agreement, and to pay Transaction Costs of
approximately $12,000,000.
B. REVOLVING LOANS; SWING LINE LOANS. In addition to the purpose
specified in subsection 2.5A, the proceeds of the Revolving Loans and any Swing
Line Loans shall also be applied by Company for working capital and/or general
corporate purposes.
C. MARGIN REGULATIONS. No portion of the proceeds of any borrowing
under this Agreement shall be used by Company or any of its Subsidiaries in any
manner that might cause the borrowing or the application of such proceeds to
violate Regulation G, Regulation U, Regulation T or Regulation X of the Board of
Governors of the Federal Reserve System or any other regulation of such Board or
to violate the Exchange Act, in each case as in effect on the date or dates of
such borrowing and such use of proceeds.
2.6 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
Notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall govern with respect to Eurodollar Rate
Loans as to the matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as practicable
after 12:00 Noon (New York City time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event that
Administrative Agent shall have determined (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto), on
any Interest Rate Determination Date with respect to any Eurodollar Rate Loans,
that by reason of circum stances affecting the London interbank market adequate
and fair means do not exist for ascertaining the interest rate applicable to
such Loans on the basis provided for in the definition of Adjusted Eurodollar
Rate, Administrative Agent shall on such date give notice (by telefacsimile or
by telephone confirmed in writing) to Company and each Lender of
60
62
such determination, whereupon (i) no Loans may be made as, or converted to,
Eurodollar Rate Loans until such time as Administrative Agent notifies Company
and Lenders that the circumstances giving rise to such notice no longer exist
and (ii) any Notice of Borrowing or Notice of Conversion/Continuation given by
Company with respect to the Loans in respect of which such determination was
made shall be deemed to be rescinded by Company.
C. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS. In the event
that on any date any Lender shall have determined (which determination shall,
absent manifest error, be final and conclusive and binding upon all parties
hereto but shall be made only after consultation with Company and Administrative
Agent) that the making, maintaining or continuation of its Eurodollar Rate Loans
(i) has become unlawful as a result of compliance by such Lender in good faith
with any law, treaty, governmental rule, regulation, guideline or order (or
would conflict with any such treaty, governmental rule, regulation, guideline or
order not having the force of law even though the failure to comply therewith
would not be unlawful) or (ii) has become impracticable, or would cause such
Lender material hardship, as a result of contingencies occurring after the date
of this Agreement which materially and adversely affect the London interbank
market or the position of such Lender in that market, then, and in any such
event, such Lender shall be an "AFFECTED LENDER" and it shall on that day give
notice (by telefacsimile or by telephone confirmed in writing) to Company and
Administrative Agent of such determination (which notice Administrative Agent
shall promptly transmit to each other Lender). Thereafter (a) the obligation of
the Affected Lender to make Loans as, or to convert Loans to, Eurodollar Rate
Loans shall be suspended until such notice shall be withdrawn by the Affected
Lender, (b) to the extent such determination by the Affected Lender relates to a
Eurodollar Rate Loan then being requested by Company pursuant to a Notice of
Borrowing or a Notice of Conversion/Continuation, the Affected Lender shall make
such Loan as (or convert such Loan to, as the case may be) a Base Rate Loan, (c)
the Affected Lender's obligation to maintain its outstanding Eurodollar Rate
Loans (the "AFFECTED LOANS") shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the Affected
Loans or when required by law, and (d) the Affected Loans shall automatically
convert into Base Rate Loans on the date of such termination. Notwithstanding
the foregoing, to the extent a determination by an Affected Lender as described
above relates to a Eurodollar Rate Loan then being requested by Company pursuant
to a Notice of Borrowing or a Notice of Conversion/Continuation, Company shall
have the option, subject to the provisions of subsection 2.6D, to rescind such
Notice of Borrowing or Notice of Conversion/Continuation as to all Lenders by
giving notice (by telefacsimile or by telephone confirmed in writing) to
Administrative Agent of such rescission on the date on which the Affected Lender
gives notice of its determination as described above (which notice of rescission
Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this subsection 2.6C
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in
accordance with the terms of this Agreement.
61
63
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST PERIODS.
Company shall compensate each Lender, upon written request by that Lender (which
request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including any interest paid by that
Lender to lenders of funds borrowed by it to make or carry its Eurodollar Rate
Loans and any loss, expense or liability sustained by that Lender in connection
with the liquidation or re-employment of such funds) which that Lender may
sustain: (i) if for any reason (other than a default by that Lender) a borrowing
of any Eurodollar Rate Loan does not occur on a date specified therefor in a
Notice of Borrowing or a telephonic request for borrowing, or a conversion to or
continuation of any Eurodollar Rate Loan does not occur on a date specified
therefor in a Notice of Conversion/Continuation or a telephonic request for
conversion or continuation, (ii) if any prepayment (including any prepayment
pursuant to subsection 2.4B(i)) or other principal payment or any conversion of
any of its Eurodollar Rate Loans occurs on a date prior to the last day of an
Interest Period applicable to that Loan, (iii) if any prepayment of any of its
Eurodollar Rate Loans is not made on any date specified in a notice of
prepayment given by Company, or (iv) as a consequence of any other default by
Company in the repayment of its Eurodollar Rate Loans when required by the terms
of this Agreement.
E. BOOKING OF EURODOLLAR RATE LOANS. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of that Lender.
F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS. Calculation
of all amounts payable to a Lender under this subsection 2.6 and under
subsection 2.7A shall be made as though that Lender had actually funded each of
its relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of that
Lender to a domestic office of that Lender in the United States of America;
provided, however, that each Lender may fund each of its Eurodollar Rate Loans
in any manner it sees fit and the foregoing assumptions shall be utilized only
for the purposes of calculating amounts payable under this subsection 2.6 and
under subsection 2.7A.
G. EURODOLLAR RATE LOANS AFTER DEFAULT. After the occurrence of and
during the continuation of a Potential Event of Default or an Event of Default,
(i) Company may not elect to have a Loan be made or maintained as, or converted
to, a Eurodollar Rate Loan after the expiration of any Interest Period then in
effect for that Loan and (ii) subject to the provisions of subsection 2.6D, any
Notice of Borrowing or Notice of Conversion/Continuation given by Company with
respect to a requested borrowing or
62
64
conversion/continuation that has not yet occurred shall be deemed to be
rescinded by Company.
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of subsection 2.7B (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender shall reasonably
determine (which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto) that any law, treaty or
governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or governmental authority, in each case that
becomes effective after the date hereof, or compliance by such Lender with any
guideline, request or directive issued or made after the date hereof by any
central bank or other governmental or quasi-governmental authority (whether or
not having the force of law):
(i) subjects such Lender (or its applicable lending office) to
any additional Tax (other than any Tax on the overall net income of
such Lender) with respect to this Agreement or any of its obligations
hereunder or any payments to such Lender (or its applicable lending
office) of principal, interest, fees or any other amount payable
hereunder;
(ii) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other liabilities in
or for the account of, or advances or loans by, or other credit
extended by, or any other acquisition of funds by, any office of such
Lender (other than any such reserve or other requirements with respect
to Eurodollar Rate Loans that are reflected in the definition of
Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to a
Tax matter) on or affecting such Lender (or its applicable lending
office) or its obligations hereunder or the London interbank market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Company shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or 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 may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such
63
65
Lender shall deliver to Company (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to such Lender under this subsection 2.7A, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.
B. WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. All sums payable by Company
under this Agreement and the other Loan Documents shall (except to the
extent required by law) be paid free and clear of, and without any
deduction or withholding on account of, any Tax (other than a Tax on
the overall net income of any Lender) imposed, levied, collected,
withheld or assessed by or within the United States of America or any
political subdivision in or of the United States of America or any
other jurisdiction from or to which a payment is made by or on behalf
of Company or by any federation or organization of which the United
States of America or any such jurisdiction is a member at the time of
payment.
(ii) Grossing-up of Payments. If Company or any other Person is
required by law to make any deduction or withholding on account of any
such Tax from any sum paid or payable by Company to Administrative
Agent or any Lender under any of the Loan Documents:
(a) Company shall notify Administrative Agent of any
such requirement or any change in any such requirement as soon
as Company becomes aware of it;
(b) Company shall pay any such Tax before the date on
which penalties attach thereto, such payment to be made (if the
liability to pay is imposed on Company) for its own account or
(if that liability is imposed on Administrative Agent or such
Lender, as the case may be) on behalf of and in the name of
Administrative Agent or such Lender;
(c) the sum payable by Company in respect of which the
relevant deduction, withholding or payment is required shall be
increased to the extent necessary to ensure that, after the
making of that deduction, withholding or payment,
Administrative Agent or such Lender, as the case may be,
receives on the due date a net sum equal to what it would
have received had no such deduction, withholding or payment
been required or made; and
(d) within 30 days after paying any sum from which it
is required by law to make any deduction or withholding, and
within 30 days after the due date of payment of any Tax which
it is required by clause (b) above to pay, Company shall
deliver to Administrative Agent evidence satisfactory to
64
66
the other affected parties of such deduction, withholding or
payment and of the remittance thereof to the relevant taxing or
other authority;
provided that no such additional amount shall be required to be paid to
any Lender under clause (c) above except to the extent that any change
after the date hereof (in the case of each Lender listed on the
signature pages hereof) or after the date of the Assignment Agreement
pursuant to which such Lender became a Lender (in the case of each
other Lender) in any such requirement for a deduction, withholding or
payment as is mentioned therein shall result in an increase in the rate
of such deduction, withholding or payment from that in effect at the
date of this Agreement or at the date of such Assignment Agreement, as
the case may be, in respect of payments to such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws of
any jurisdiction other than the United States or any state or
other political subdivision thereof (for purposes of this
subsection 2.7B(iii), a "NON-US LENDER") shall deliver to
Administrative Agent for transmission to Company, on or prior
to the Closing Date (in the case of each Lender listed on the
signature pages hereof) or on or prior to the date of the
Assignment Agreement pursuant to which it becomes a Lender (in
the case of each other Lender), and at such other times as may
be necessary in the determination of Company or Administrative
Agent (each in the reasonable exercise of its discretion),
(1) two original copies of Internal Revenue Service Form 1001
or 4224 (or any successor forms), properly completed and duly
executed by such Lender, together with any other certificate or
statement of exemption required under the Internal Revenue Code
or the regulations issued thereunder to establish that such
Lender is not subject to deduction or withholding of United
States federal income tax with respect to any payments to such
Lender of principal, interest, fees or other amounts payable
under any of the Loan Documents or (2) if such Lender is not a
"bank" or other Person described in Section 881(c)(3) of the
Internal Revenue Code and cannot deliver either Internal
Revenue Service Form 1001 or 4224 pursuant to clause (1) above,
a Certificate re Non-Bank Status together with two original
copies of Internal Revenue Service Form W-8 (or any successor
form), properly completed and duly executed by such Lender,
together with any other certificate or statement of exemption
required under the Internal Revenue Code or the regulations
issued thereunder to establish that such Lender is not
subject to deduction or withholding of United States federal
income tax with respect to any payments to such Lender of
interest payable under any of the Loan Documents.
65
67
(b) Each Lender required to deliver any forms,
certificates or other evidence with respect to United States
federal income tax withholding matters pursuant to subsection
2.7B(iii)(a) hereby agrees, from time to time after the initial
delivery by such Lender of such forms, certificates or other
evidence, whenever a lapse in time or change in circumstances
renders such forms, certificates or other evidence obsolete or
inaccurate in any material respect, that such Lender shall
promptly (1) deliver to Administrative Agent for transmission
to Company two new original copies of Internal Revenue Service
Form 1001 or 4224, or a Certificate re Non-Bank Status and two
original copies of Internal Revenue Service Form W-8, as the
case may be, properly completed and duly executed by such
Lender, together with any other certificate or statement of
exemption required in order to confirm or establish that such
Lender is not subject to deduction or withholding of United
States federal income tax with respect to payments to such
Lender under the Loan Documents or (2) notify Administrative
Agent and Company of its inability to deliver any such forms,
certificates or other evidence.
(c) Company shall not be required to pay any
additional amount to any Non-US Lender under clause (c) of
subsection 2.7B(ii) if such Lender shall have failed to satisfy
the requirements of clause (a) or (b)(1) of this subsection
2.7B(iii); provided that if such Lender shall have satisfied
the requirements of subsection 2.7B(iii)(a) on the Closing Date
(in the case of each Lender listed on the signature pages
hereof) or on the date of the Assignment Agreement pursuant to
which it became a Lender (in the case of each other Lender),
nothing in this subsection 2.7B(iii)(c) shall relieve Company
of its obligation to pay any additional amounts pursuant to
clause (c) of subsection 2.7B(ii) in the event that, as a
result of any change in any applicable law, treaty or
governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof, such
Lender is no longer properly entitled to deliver forms,
certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to
withholding as described in subsection 2.7B(iii)(a).
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have
determined that the adoption, effectiveness, phase-in or applicability after the
date hereof of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or with reference
to, such Lender's Loans or Commitments or
66
68
Letters of Credit or participations therein or other obligations hereunder with
respect to the Loans or the Letters of Credit to a level below that which such
Lender or such controlling corporation could have achieved but for such
adoption, effectiveness, phase-in, applicability, change or compliance (taking
into consideration the policies of such Lender or such controlling corporation
with regard to capital adequacy), then from time to time, within five Business
Days after receipt by Company from such Lender of the statement referred to in
the next sentence, Company shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such controlling corporation on an
after-tax basis for such reduction. Such Lender shall deliver to Company (with a
copy to Administrative Agent) a written statement, setting forth in reasonable
detail the basis of the calculation of such additional amounts, which statement
shall be conclusive and binding upon all parties hereto absent manifest error.
2.8 OBLIGATION OF LENDERS AND ISSUING LENDERS TO MITIGATE; REPLACEMENT OF
LENDER.
A. OBLIGATIONS OF LENDERS AND ISSUING LENDERS TO MITIGATE. Each Lender
and Issuing Lender agrees that, as promptly as practicable after the officer of
such Lender or Issuing Lender responsible for administering the Loans or Letters
of Credit of such Lender or Issuing Lender, as the case may be, becomes aware of
the occurrence of an event or the existence of a condition that would cause such
Lender to become an Affected Lender or that would entitle such Lender or Issuing
Lender to receive payments under subsection 2.7 or subsection 3.6, it will, to
the extent not inconsistent with the internal policies of such Lender or Issuing
Lender and any applicable legal or regulatory restrictions, use reasonable
efforts (i) to make, issue, fund or maintain the Commitments of such Lender or
the affected Loans or Letters of Credit of such Lender or Issuing Lender through
another lending or letter of credit office of such Lender or Issuing Lender, or
(ii) take such other measures as such Lender or Issuing Lender may deem
reasonable, if as a result thereof the circumstances which would cause such
Lender to be an Affected Lender would cease to exist or the additional amounts
which would otherwise be required to be paid to such Lender or Issuing Lender
pursuant to subsection 2.7 or subsection 3.6 would be materially reduced and if,
as determined by such Lender or Issuing Lender in its sole discretion, the
making, issuing, funding or maintaining of such Commitments or Loans or Letters
of Credit through such other lending or letter of credit office or in accordance
with such other measures, as the case may be, would not otherwise materially
adversely affect such Commitments or Loans or Letters of Credit or the interests
of such Lender or Issuing Lender; provided that such Lender or Issuing Lender
will not be obligated to utilize such other lending or letter of credit office
pursuant to this subsection 2.8 unless Company agrees to pay all incremental
expenses incurred by such Lender or Issuing Lender as a result of utilizing such
other lending or letter of credit office as described in clause (i) above. A
certificate as to the amount of any such expenses payable by Company pursuant to
this subsection 2.8 (setting forth in reasonable detail the basis for requesting
such amount) submitted by such Lender or Issuing Lender to Company (with a copy
to Administrative Agent) shall be conclusive absent manifest error.
67
69
B. REPLACEMENT OF LENDER. If Company receives a notice of amounts due
pursuant to subsection 2.7A or subsection 2.7C from a Lender, a Lender defaults
in its obligations hereunder, a Lender refuses to consent to an amendment,
modification or waiver of this Agreement that, pursuant to subsection 10.6,
requires consent of 100% of the Lenders or a Lender becomes an Affected Lender
(any such Lender, a "SUBJECT LENDER"), so long as (i) no Potential Event of
Default or Event of Default shall have occurred and be continuing and Company
has obtained a commitment from another Lender or an Eligible Assignee to
purchase at par the Subject Lender's Loans and assume the Subject Lender's
Commitments and all other obligations of the Subject Lender hereunder, (ii) such
Lender is not an Issuing Lender with respect to any Letters of Credit
outstanding (unless all such Letters of Credit are terminated or arrangements
acceptable to such Issuing Lender (such as a "back-to-back" letter of credit)
are made) and (iii) the Subject Lender is unwilling to withdraw the notice
delivered to Company pursuant to subsections 2.7A or 2.7C, is unwilling to
remedy its default and/or is no longer an Affected Lender, upon 10 days prior
written notice to the Subject Lender and Administrative Agent, Company may
require the Subject Lender to assign all of its Loans and Commitments to such
other Lender or Eligible Assignee pursuant to the provisions of subsection
10.1B; provided that, prior to or concurrently with such replacement (i) Company
has paid to the Lender giving such notice all amounts under subsections 2.6D and
2.7 (if applicable) through such date of replacement, (ii) Company or the
applicable assignee have paid to Agent the processing fee required to be paid by
subsection 10.1B(i) and (iii) all of the requirements for such assignment
contained in subsection 10.1B, including, without limitation, the consent of
Administrative Agent (if required) and the receipt by Administrative Agent of an
executed Assignment Agreement and other supporting documents, have been
fulfilled.
SECTION 3. LETTERS OF CREDIT
3.1 ISSUANCE OF LETTERS OF CREDIT AND LENDERS' PURCHASE OF PARTICIPATIONS
THEREIN.
A. LETTERS OF CREDIT. In addition to Company requesting that Revolving
Lenders make Revolving Loans pursuant to subsection 2.1A(ii) and that Swing Line
Lender make Swing Line Loans pursuant to subsection 2.1A(iii), Company may
request, in accordance with the provisions of this subsection 3.1, from time to
time during the period from the Closing Date to but excluding the Revolving Loan
Commitment Termination Date, that one or more Lenders issue Letters of Credit
for the account of Company for the purposes specified in the definitions of
Commercial Letters of Credit and Standby Letters of Credit. Subject to the terms
and conditions of this Agreement and in reliance upon the representations and
warranties of Company herein set forth, any one or more Lenders may, but (except
as provided in subsection 3.1B(ii)) shall not be obligated to, issue such
Letters of Credit in accordance with the provisions of this subsection 3.1;
provided that Company shall not request that any Lender issue (and no Lender
shall issue):
68
70
(i) any Letter of Credit if, after giving effect to such
issuance, the Total Utilization of Revolving Loan Commitments would
exceed the Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed $15,000,000;
(iii) any Letter of Credit denominated in a currency other than
Dollars (which foreign currency must be acceptable to Administrative
Agent) if, after giving effect to such issuance, the Letter of Credit
Usage would exceed $5,000,000 calculated by reference to the Exchange
Rate;
(iv) any Letter of Credit if, after giving effect to such
issuance, the Total Utilization of Revolving Loan Commitments would
exceed the Borrowing Base;
(v) any Standby Letter of Credit having an expiration date
later than the earlier of (a) two Business Days prior to the Revolving
Loan Commitment Termination Date and (b) the date which is one year
from the date of issuance of such Standby Letter of Credit; provided
that the immediately preceding clause (b) shall not prevent any Issuing
Lender from agreeing that a Standby Letter of Credit will automatically
be extended for one or more successive periods not to exceed one year
each unless such Issuing Lender elects not to extend for any such
additional period; and provided, further that such Issuing Lender shall
elect not to extend such Standby Letter of Credit if it has knowledge
that an Event of Default has occurred and is continuing (and has not
been waived in accordance with subsection 10.6) at the time such
Issuing Lender must elect whether or not to allow such extension; or
(vi) any Commercial Letter of Credit having an expiration date
(a) later than the earlier of (X) the date which is 30 days prior to
the Revolving Loan Commitment Termination Date (provided that this
clause (X) shall not be applicable with respect to any Commercial
Letter of Credit that is fully supported by cash collateral on terms
satisfactory to, and if such later expiration date shall have been
agreed to by, the Issuing Lender) and (Y) the date which is 180 days
from the date of issuance of such Commercial Letter of Credit or
(b) that is otherwise unacceptable to the applicable Issuing Lender in
its reasonable discretion.
B. MECHANICS OF ISSUANCE.
(i) Notice of Issuance. Whenever Company desires the issuance
of a Letter of Credit, it shall deliver to Administrative Agent a
Notice of Issuance of Letter of Credit substantially in the form of
Exhibit III annexed hereto no later than 5:00 P.M. (New York City time)
at least three Business Days (in the case of Standby Letters of Credit)
or five Business Days (in the case of Commercial Letters of
69
71
Credit), or in each case such shorter period as may be agreed to by
the Issuing Lender in any particular instance, in advance of the
proposed date of issuance. The Notice of Issuance of Letter of Credit
shall specify (a) the proposed date of issuance (which shall be a
Business Day), (b) whether the Letter of Credit is to be a Standby
Letter of Credit or a Commercial Letter of Credit, (c) the face amount
of the Letter of Credit, (d) the expiration date of the Letter of
Credit, (e) the name and address of the beneficiary, and (f) either
the verbatim text of the proposed Letter of Credit or the proposed
terms and conditions thereof, including a precise description of any
documents to be presented by the beneficiary which, if presented by
the beneficiary prior to the expiration date of the Letter of Credit,
would require the Issuing Lender to make payment under the Letter of
Credit; provided that the Issuing Lender, in its reasonable
discretion, may require changes in the text of the proposed Letter of
Credit or any such documents; and provided, further that no Letter of
Credit shall require payment against a conforming draft to be made
thereunder on the same business day (under the laws of the
jurisdiction in which the office of the Issuing Lender to which such
draft is required to be presented is located) that such draft is
presented if such presentation is made after 12:00 Noon (in the time
zone of such office of the Issuing Lender) on such business day.
Company shall notify the applicable Issuing Lender
(and Administrative Agent, if Administrative Agent is not such Issuing
Lender) prior to the issuance of any Letter of Credit in the event that
any of the matters to which Company is required to certify in the
applicable Notice of Issuance of Letter of Credit is no longer true and
correct as of the proposed date of issuance of such Letter of Credit,
and upon the issuance of any Letter of Credit Company shall be deemed
to have re-certified, as of the date of such issuance, as to the
matters to which Company is required to certify in the applicable
Notice of Issuance of Letter of Credit.
(ii) Determination of Issuing Lender. Upon receipt by
Administrative Agent of a Notice of Issuance of Letter of Credit
pursuant to subsection 3.1B(i) requesting the issuance of a Letter of
Credit, in the event Administrative Agent elects to issue such Letter
of Credit, Administrative Agent shall promptly so notify
Company, and Administrative Agent shall be the Issuing Lender with
respect thereto. In the event that Administrative Agent, in its sole
discretion, elects not to issue such Letter of Credit, Administrative
Agent shall promptly so notify Company, whereupon Company may request
any other Lender to issue such Letter of Credit by delivering to such
Lender a copy of the applicable Notice of Issuance of Letter of Credit.
Any Lender so requested to issue such Letter of Credit shall promptly
notify Company and Administrative Agent whether or not, in its sole
discretion, it has elected to issue such Letter of Credit, and any such
Lender which so elects to issue such Letter of Credit shall be the
Issuing Lender with respect thereto. In the event that all other
Lenders shall have declined to issue such Letter of Credit,
70
72
notwithstanding the prior election of Administrative Agent not to issue
such Letter of Credit, Administrative Agent shall be obligated to issue
such Letter of Credit and shall be the Issuing Lender with respect
thereto, notwithstanding the fact that the Letter of Credit Usage with
respect to such Letter of Credit and with respect to all other Letters
of Credit issued by Administrative Agent, when aggregated with
Administrative Agent's outstanding Revolving Loans and Swing Line
Loans, may exceed Administrative Agent's Revolving Loan Commitment then
in effect.
(iii) Issuance of Letter of Credit. Except as set forth in
clause (vi) below, upon satisfaction or waiver (in accordance with
subsection 10.6) of the conditions set forth in subsection 4.4, the
Issuing Lender shall issue the requested Letter of Credit in accordance
with the Issuing Lender's standard operating procedures.
(iv) Notification to Lenders. Upon the issuance of any Letter
of Credit the applicable Issuing Lender shall promptly notify
Administrative Agent (which shall notify) each other Lender of such
issuance, which notice shall be accompanied by a copy of such Letter of
Credit. Promptly after receipt of such notice (or, if Administrative
Agent is the Issuing Lender, together with such notice), Administrative
Agent shall notify each Lender of the amount of such Lender's
respective participation in such Letter of Credit, determined in
accordance with subsection 3.1C.
(v) Reports to Lenders. Within 15 days after the end of each
calendar quarter ending after the Closing Date, so long as any Letter
of Credit shall have been outstanding during such calendar quarter,
each Issuing Lender shall deliver to each other Lender a report setting
forth for such calendar quarter the daily aggregate amount available to
be drawn under the Letters of Credit issued by such Issuing Lender that
were outstanding during such calendar quarter.
(vi) Letters of Credit Outstanding Under Existing Credit
Agreement. The letters of credit issued pursuant to the Existing Credit
Agreement that are outstanding on the Closing Date and listed on
Schedule 3.1 shall be deemed Letters of Credit issued pursuant hereto
and the Issuing Lender shall be the Lender identified on Schedule 3.1.
C. LENDERS' PURCHASE OF PARTICIPATIONS IN LETTERS OF CREDIT.
Immediately upon the issuance of each Letter of Credit and, in respect of
Letters of Credit referred to in subsection 3.1B(vi) on the Closing Date, upon
satisfaction of the conditions set forth in subsections 4.1 and 4.2, each Lender
shall be deemed to, and hereby agrees to, have irrevocably purchased from the
Issuing Lender a participation in such Letter of Credit and any drawings honored
thereunder in an amount equal to such Lender's Pro Rata Share of the maximum
amount which is or at any time may become available to be drawn thereunder.
71
73
3.2 LETTER OF CREDIT FEES.
Company agrees to pay the following amounts with respect to
Letters of Credit issued hereunder:
(i) with respect to each Standby Letter of Credit, (a) a
fronting fee, payable directly to the applicable Issuing Lender for its
own account, equal to 0.25% per annum of the daily amount available to
be drawn under such Standby Letter of Credit and (b) a letter of credit
fee, payable to Administrative Agent for the account of Lenders (based
upon their respective Pro Rata Shares), equal to (x) the applicable
Eurodollar Rate Margin set forth in subsection 2.2A hereof for
Eurodollar Rate Loans multiplied by (y) the daily amount available from
time to time to be drawn under such Standby Letter of Credit, each such
fronting fee or letter of credit fee to be payable in arrears on and to
(but excluding) the last day of each March, June, September and
December of each year and computed on the basis of a 360-day year for
the actual number of days elapsed;
(ii) with respect to each Commercial Letter of Credit, (a) a
fronting fee, payable directly to the applicable Issuing Lender for its
own account, equal to 0.25% per annum of the daily amount available to
be drawn under such Commercial Letter of Credit and (b) a letter of
credit fee, payable to Administrative Agent for the account of Lenders
(based upon their respective Pro Rata Shares), equal to 1.75% per annum
of the daily amount available to be drawn under such Commercial Letter
of Credit, each such fronting fee or letter of credit fee to be payable
in arrears on and to (but excluding) the last day of each March, June,
September and December of each year and computed on the basis of a
360-day year for the actual number of days elapsed; and
(iii) with respect to the issuance, amendment or transfer of
each Letter of Credit and each payment of a drawing made thereunder
(without duplication of the fees payable under clauses (i) and (ii)
above), documentary and processing charges payable directly to the
applicable Issuing Lender for its own account in accordance with such
Issuing Lender's standard schedule for such charges in effect at the
time of such issuance, amendment, transfer or payment, as the case may
be.
For purposes of calculating any fees payable under clauses (i) and (ii) of this
subsection 3.2, the daily amount available to be drawn under any Letter of
Credit shall be determined as of the close of business on any date of
determination. Promptly upon receipt by Administrative Agent of any amount
described in clause (i)(b) or (ii)(b) of this subsection 3.2, Administrative
Agent shall distribute to each Lender its Pro Rata Share of such amount.
72
74
3.3 DRAWINGS AND REIMBURSEMENT OF AMOUNTS PAID UNDER LETTERS OF CREDIT.
A. RESPONSIBILITY OF ISSUING LENDER WITH RESPECT TO DRAWINGS. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.
B. REIMBURSEMENT BY COMPANY OF AMOUNTS PAID UNDER LETTERS OF CREDIT.
In the event an Issuing Lender has determined to honor a drawing under a Letter
of Credit issued by it, such Issuing Lender shall immediately notify Company and
Administrative Agent, and Company shall reimburse such Issuing Lender on or
before the Business Day immediately following the date on which such drawing is
honored (the "REIMBURSEMENT DATE") in an amount in Dollars (which amount, in the
case of a drawing under the Letter of Credit which is denominated in a currency
other than Dollars, shall be calculated by reference to the applicable Exchange
Rate) or, at the request of the Issuing Bank, in the currency in which the
Letter of Credit was issued and in same day funds equal to the amount of such
honored drawing; provided that, anything contained in this Agreement to the
contrary notwithstanding, (i) unless Company shall have notified Administrative
Agent and such Issuing Lender prior to 10:00 A.M. (New York City time) on the
date such drawing is honored that Company intends to reimburse such Issuing
Lender for the amount of such honored drawing with funds other than the proceeds
of Revolving Loans, Company shall be deemed to have given a timely Notice of
Borrowing to Administrative Agent requesting Revolving Lenders to make Revolving
Loans that are Base Rate Loans on the Reimbursement Date in an amount in Dollars
(which amount, in the case of a drawing under the Letter of Credit which is
denominated in a currency other than Dollars, shall be calculated by reference
to the applicable Exchange Rate) equal to the amount of such honored drawing and
(ii) subject to satisfaction or waiver of the conditions specified in subsection
4.3B, Lenders shall, on the Reimbursement Date, make Revolving Loans that are
Base Rate Loans in the amount of such honored drawing, the proceeds of which
shall be applied directly by Administrative Agent to reimburse such Issuing
Lender for the amount of such honored drawing; and provided, further that if for
any reason proceeds of Revolving Loans are not received by such Issuing Lender
on the Reimbursement Date in an amount equal to the amount of such honored
drawing, Company shall reimburse such Issuing Lender, on demand, in an amount in
same day funds equal to the excess of the amount of such honored drawing over
the aggregate amount of such Revolving Loans, if any, which are so received.
Nothing in this subsection 3.3B shall be deemed to relieve any Revolving Lender
from its obligation to make Revolving Loans on the terms and conditions set
forth in this Agreement, and Company shall retain any and all rights it may have
against any Revolving Lender resulting from the failure of such Revolving Lender
to make such Revolving Loans under this subsection 3.3B.
73
75
C. PAYMENT BY LENDERS OF UNREIMBURSED AMOUNTS PAID UNDER LETTERS
OF CREDIT.
(i) Payment by Lenders. In the event that Company shall fail
for any reason to reimburse any Issuing Lender as provided in
subsection 3.3B in an amount (calculated, in the case of a drawing
under a Letter of Credit denominated in a currency other than Dollars,
by reference to the applicable Exchange Rate) equal to the amount of
any drawing honored by such Issuing Lender under a Letter of Credit
issued by it, such Issuing Lender shall promptly notify each other
Revolving Lender of the unreimbursed amount of such honored drawing and
of such other Revolving Lender's respective participation therein based
on such Revolving Lender's Pro Rata Share. Each Revolving Lender shall
make available to such Issuing Lender an amount equal to its respective
participation, in Dollars and in same day funds, at the office of such
Issuing Lender specified in such notice, not later than 12:00 Noon (New
York City time) on the first business day (under the laws of the
jurisdiction in which such office of such Issuing Lender is located)
after the date notified by such Issuing Lender. In the event that any
Revolving Lender fails to make available to such Issuing Lender on such
business day the amount of such Lender's participation in such Letter
of Credit as provided in this subsection 3.3C, such Issuing Lender
shall be entitled to recover such amount on demand from such Revolving
Lender together with interest thereon at the Federal Funds Effective
Rate for three Business Days and thereafter at the Base Rate. Nothing
in this subsection 3.3C shall be deemed to prejudice the right of any
Revolving Lender to recover from any Issuing Lender any amounts made
available by such Revolving Lender to such Issuing Lender pursuant to
this subsection 3.3C in the event that it is determined by the final
judgment of a court of competent jurisdiction that the payment with
respect to a Letter of Credit by such Issuing Lender in respect of
which payment was made by such Revolving Lender constituted gross
negligence or willful misconduct on the part of such Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received From
Company. In the event any Issuing Lender shall have been reimbursed by
other Revolving Lenders pursuant to subsection 3.3C(i) for all or any
portion of any drawing honored by such Issuing Lender under a Letter of
Credit issued by it, such Issuing Lender shall distribute to each other
Revolving Lender which has paid all amounts payable by it under
subsection 3.3C(i) with respect to such honored drawing such other
Revolving Lender's Pro Rata Share of all payments subsequently received
by such Issuing Lender from Company in reimbursement of such honored
drawing when such payments are received. Any such distribution shall be
made to a Revolving Lender at its primary address set forth below its
name on the appropriate signature page hereof or at such other address
as such Revolving Lender may request.
74
76
D. INTEREST ON AMOUNTS PAID UNDER LETTERS OF CREDIT.
(i) Payment of Interest by Company. Company agrees to pay to
each Issuing Lender, with respect to drawings honored under any Letters
of Credit issued by it, interest on the amount paid by such Issuing
Lender in respect of each such honored drawing from the date such
drawing is honored to but excluding the date such amount is reimbursed
by Company (including any such reimbursement out of the proceeds of
Revolving Loans pursuant to subsection 3.3B) at a rate equal to (a) for
the period from the date such drawing is honored to but excluding the
Reimbursement Date, the rate then in effect under this Agreement with
respect to Revolving Loans that are Base Rate Loans and (b) thereafter,
a rate which is 2% per annum in excess of the rate of interest
otherwise payable under this Agreement with respect to Revolving Loans
that are Base Rate Loans. Interest payable pursuant to this subsection
3.3D(i) shall be computed on the basis of a 365-day year for the actual
number of days elapsed in the period during which it accrues and shall
be payable on demand or, if no demand is made, on the date on which the
related drawing under a Letter of Credit is reimbursed in full.
(ii) Distribution of Interest Payments by Issuing Lender.
Promptly upon receipt by any Issuing Lender of any payment of interest
pursuant to subsection 3.3D(i) with respect to a drawing honored under
a Letter of Credit issued by it, (a) such Issuing Lender shall
distribute to each other Revolving Lender, out of the interest received
by such Issuing Lender in respect of the period from the date such
drawing is honored to but excluding the date on which such Issuing
Lender is reimbursed for the amount of such drawing (including any such
reimbursement out of the proceeds of Revolving Loans pursuant to
subsection 3.3B), the amount that such other Revolving Lender would
have been entitled to receive in respect of the letter of credit fee
that would have been payable in respect of such Letter of Credit for
such period pursuant to subsection 3.2 if no drawing had been honored
under such Letter of Credit, and (b) in the event such Issuing Lender
shall have been reimbursed by other Revolving Lenders pursuant to
subsection 3.3C(i) for all or any portion of such honored drawing, such
Issuing Lender shall distribute to each other Revolving Lender which
has paid all amounts payable by it under subsection 3.3C(i)
with respect to such honored drawing such other Revolving Lender's Pro
Rata Share of any interest received by such Issuing Lender in respect
of that portion of such honored drawing so reimbursed by other
Revolving Lenders for the period from the date on which such Issuing
Lender was so reimbursed by other Revolving Lenders to but excluding
the date on which such portion of such honored drawing is reimbursed by
Company. Any such distribution shall be made to a Revolving Lender at
its primary address set forth below its name on the appropriate
signature page hereof or at such other address as such Lender may
request.
75
77
3.4 OBLIGATIONS ABSOLUTE.
The obligation of Company to reimburse each Issuing Lender for
drawings honored under the Letters of Credit issued by it and to repay any
Revolving Loans made by Revolving Lenders pursuant to subsection 3.3B and the
obligations of Revolving Lenders under subsection 3.3C(i) shall be unconditional
and irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other
right which Company or any Revolving Lender may have at any time
against a beneficiary or any transferee of any Letter of Credit (or any
Persons for whom any such transferee may be acting), any Issuing Lender
or other Revolving Lender or any other Person or, in the case of a
Revolving Lender, against Company, whether in connection with this
Agreement, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between Company or
one of its Subsidiaries and the beneficiary for which any Letter of
Credit was procured);
(iii) any draft 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;
(iv) payment by the applicable Issuing Lender under any Letter
of Credit against presentation of a draft or other document which does
not substantially comply with the terms of such Letter of Credit;
(v) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Company or
any of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document by
any party thereto;
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential Event
of Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such
76
78
Issuing Lender or constituted a failure to satisfy requirements under the UCC as
in effect in the State of New York under the circumstances in question (as
determined by a final judgment of a court of competent jurisdiction); and
provided, further, that reimbursement by Company of an Issuing Lender shall not
constitute a waiver by Company of any claim against the Issuing Lender based
upon any of the circumstances described above.
3.5 INDEMNIFICATION; NATURE OF ISSUING LENDERS' DUTIES.
A. INDEMNIFICATION. In addition to amounts payable as provided in
subsection 3.6, Company hereby agrees to protect, indemnify, pay and save
harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which such Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the gross negligence or willful misconduct
of such Issuing Lender as determined by a final judgment of a court of competent
jurisdiction or (b) subject to the following clause (ii), the wrongful dishonor
by such Issuing Lender of a proper demand for payment made under any Letter of
Credit issued by it or (ii) the failure of such Issuing Lender to honor a
drawing under any such Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
government or governmental authority (all such acts or omissions herein called
"GOVERNMENTAL ACTS").
B. NATURE OF ISSUING LENDERS' DUTIES. As between Company and any
Issuing Lender, Company assumes all risks of the acts and omissions of, or
misuse of the Letters of Credit issued by such Issuing Lender by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, such Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from causes beyond the
control of such Issuing Lender,
77
79
including any Governmental Acts, and none of the above shall affect or impair,
or prevent the vesting of, any of such Issuing Lender's rights or powers
hereunder.
In furtherance and extension and not in limitation of the
specific provisions set forth in the first paragraph of this subsection 3.5B,
any action taken or omitted by any Issuing Lender under or in connection with
the Letters of Credit issued by it or any documents and certificates delivered
thereunder, if taken or omitted to be taken in good faith, shall not put such
Issuing Lender under any resulting liability to Company.
Notwithstanding anything to the contrary contained in this
subsection 3.5, Company shall retain any and all rights it may have against any
Issuing Lender for any liability arising solely out of the gross negligence or
willful misconduct of such Issuing Lender, as determined by a final judgment of
a court of competent jurisdiction.
3.6 INCREASED COSTS AND TAXES RELATING TO LETTERS OF CREDIT.
Subject to the provisions of subsection 2.7B (which shall be
controlling with respect to the matters covered thereby), in the event that any
Issuing Lender or Lender shall reasonably determine (which determination shall,
absent manifest error, be final and conclusive and binding upon all parties
hereto) that any law, treaty or governmental rule, regulation or order, or any
change therein or in the interpretation, administration or application thereof
(including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes effective after the date hereof, or compliance by any
Issuing Lender or Lender with any guideline, request or directive issued or made
after the date hereof by any central bank or other governmental or
quasi-governmental authority (whether or not having the force of law):
(i) subjects such Issuing Lender or Lender (or its applicable
lending or letter of credit office) to any additional Tax (other than
any Tax on the overall net income of such Issuing Lender or Lender)
with respect to the issuing or maintaining of any Letters of Credit or
the purchasing or maintaining of any participations therein or any
other obligations under this Section 3, whether directly or by such
being imposed on or suffered by any particular Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement in respect of any Letters of Credit issued by any Issuing
Lender or participations therein purchased by any Lender; or
(iii) imposes any other condition (other than with respect to a
Tax matter) on or affecting such Issuing Lender or Lender (or its
applicable lending or letter
78
80
of credit office) regarding this Section 3 or any Letter of Credit or
any participation therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender or
Lender (or its applicable lending or letter of credit office) with respect
thereto; then, in any case, Company shall promptly pay to such Issuing Lender or
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts as may be necessary to compensate such Issuing
Lender or Lender for any such increased cost or reduction in amounts received or
receivable hereunder. Such Issuing Lender or Lender shall deliver to Company a
written statement, setting forth in reasonable detail the basis for calculating
the additional amounts owed to such Issuing Lender or Lender under this
subsection 3.6, which statement shall be conclusive and binding upon all parties
hereto absent manifest error.
SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and the issuance of
Letters of Credit hereunder are subject to the satisfaction of the following
conditions.
4.1 CONDITIONS TO TERM LOANS AND INITIAL REVOLVING LOANS.
The obligations of Lenders to make the Term Loans and the
Initial Revolving Loans to be made on the Closing Date are, in addition to the
conditions precedent specified in subsection 4.3, subject to prior or concurrent
satisfaction of the following conditions:
A. LOAN PARTY DOCUMENTS. On or before the Closing Date, Company shall,
and shall cause each other Loan Party to, deliver to Lenders (or to Agents for
Lenders with sufficient originally executed copies, where appropriate, for each
Lender and its counsel) the following with respect to Company or such Loan
Party, as the case may be, each, unless otherwise noted, dated the Closing Date:
(i) Certified copies of the Certificate or Articles of
Incorporation of such Person, together with a good standing certificate
from the Secretary of State of its jurisdiction of incorporation and
each other state in which such Person is qualified as a foreign
corporation to do business and, to the extent generally available, a
certificate or other evidence of good standing as to payment of any
applicable franchise or similar taxes from the appropriate taxing
authority of each of such jurisdictions, each dated a recent date prior
to the Closing Date;
79
81
(ii) Copies of the Bylaws of such Person, certified as of the
Closing Date by such Person's corporate secretary or an assistant
secretary;
(iii) Resolutions of the Board of Directors of SAC and of
Holdings approving and authorizing the execution, delivery and
performance of the Loan Documents and Related Agreements to which it is
a party, certified as of the Closing Date by the corporate secretary or
an assistant secretary of such Person as being in full force and effect
without modification or amendment;
(iv) Signature and incumbency certificates of the officers of
SAC and of Holdings executing the Loan Documents to which it is a
party;
(v) Executed originals of the Loan Documents to which SAC
and Holdings is a party; and
(vi) Such other documents as Agents may reasonably request.
B. NO MATERIAL ADVERSE EFFECT. Since December 31, 1996, no
Material Adverse Effect (in the reasonable opinion of Arranger and Agents)
shall have occurred.
C. OPINIONS OF COUNSEL TO LOAN PARTIES. Lenders and their
respective counsel shall have received (i) originally executed copies of one or
more favorable written opinions of Kirkland & Ellis, counsel for Loan Parties,
in form and substance reasonably satisfactory to Agents and their counsel,
dated as of the Closing Date and setting forth substantially the matters in the
opinions designated in Exhibit VIII annexed hereto and as to such other matters
as Agents acting on behalf of Lenders may reasonably request, and (ii) evidence
satisfactory to Agents that Company has requested such counsel to deliver such
opinions to Lenders.
D. OPINIONS OF SYNDICATION AGENT'S COUNSEL. Lenders shall have received
originally executed copies of one or more favorable written opinions of
O'Melveny & Myers LLP, counsel to Syndication Agent, dated as of the Closing
Date, substantially in the form of Exhibit IX annexed hereto and as to such
other matters as Syndication Agent acting on behalf of Lenders may reasonably
request.
E. FEES. Company shall have paid to Administrative Agent and Arranger
the fees payable on the Closing Date referred to in subsection 2.3.
F. ENVIRONMENTAL MATTERS. Arranger and Agents shall have received
reports and other information in form, scope and substance reasonably
satisfactory to Arranger and Agents regarding environmental matters related to
the facilities.
80
82
G. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. SAC shall
have delivered to Agents an Officer's Certificate, in form and substance
satisfactory to Agents, to the effect that the representations and warranties in
Section 5 hereof are true, correct and complete in all material respects on and
as of the Closing Date to the same extent as though made on and as of that date
(or, to the extent such representations and warranties specifically relate to an
earlier date, that such representations and warranties were true, correct and
complete in all material respects on and as of such earlier date) and that SAC
shall have performed in all material respects all agreements and satisfied all
conditions which this Agreement provides shall be performed or satisfied by it
on or before the Closing Date except as otherwise disclosed to and agreed to in
writing by Agents and Requisite Lenders.
H. SATISFACTION WITH ACQUISITION; FINANCING. Arranger and Agents shall
have received and reviewed a description of (i) the final structure of the
Acquisition and (ii) the services and uses of proceeds to consummate the
transactions contemplated by the Loan Documents and the Related Agreements and
shall be satisfactory to the Arranger and Agents.
I. CORPORATE STRUCTURE, OWNERSHIP, MANAGEMENT, ETC.
(i) Corporate Structure. The corporate organizational
structure of Holdings and its Subsidiaries both before and
after the Acquisition occurs and of SAHC before the Acquisition
occurs, shall be set forth on Schedule 4.1I annexed hereto and
shall be satisfactory to the Arranger and Agents.
(ii) Capital Structure and Ownership. The capital
structure and ownership of Company both before and after giving
effect to the Acquisition shall be as set forth on Schedule
4.1I annexed hereto, and shall be satisfactory to Arranger and
Agents.
(iii) Senior Management; Employment Contracts. The
senior management of Company after giving effect to the
Acquisition shall be as set forth on Schedule 4.1I annexed
hereto, and Arranger and Agents shall have received copies of,
and shall be satisfied with the form and substance of, any and
all employment contracts and equity arrangements with senior
management of Company.
J. RELATED AGREEMENTS. Arranger and Agents shall have received a
fully executed copy or photocopy of each Related Agreement and any documents
executed in connection therewith, and each Related Agreement shall be in full
force and effect and shall be satisfactory to the Arranger and Agents and no
provision thereof shall have been modified or waived in any respect determined
by Arranger and Agents to be material, in each case without the consent of
Agents and Requisite Lenders.
81
83
K. PROCEEDS OF SENIOR SUBORDINATED NOTES; EQUITY CONTRIBUTION.
(i) SAC shall have received gross proceeds of at least $100,000,000 from the
offering of the Senior Subordinated Notes and (ii) Holdings shall have received
the Equity Contribution.
L. ACQUISITION.
(i) All conditions to the Acquisition set forth in Articles 6
and 7 of the Acquisition Agreement shall have been satisfied or the
fulfillment of any such conditions shall have been waived with the
consent of Agents and Requisite Lenders;
(ii) The initial cash consideration to be paid to the Seller in
respect of the capital stock of Company in connection with the
Acquisition shall not exceed $125,500,000;
(iii) Transaction Costs shall not exceed $12,000,000, and
Arranger and Agents shall have received evidence to its satisfaction to
such effect; and
(iv) Arranger and Agents shall have received an Officer's
Certificate of SAC to the effect set forth in clauses (i)-(iii) above
and stating that SAC will proceed to consummate the Acquisition upon
the making of the initial Loans.
M. NECESSARY GOVERNMENTAL AUTHORIZATIONS AND CONSENTS; EXPIRATION
OF WAITING PERIODS, ETC. SAC and Stanadyne shall have obtained all Governmental
Authorizations and all consents of other Persons, in each case that are
necessary or advisable in connection with the Acquisition, the other
transactions contemplated by the Loan Documents and the Related Agreements and
each of the foregoing shall be in full force and effect, in each case other than
those the failure to obtain or maintain which, either individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.
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 adverse conditions on the Acquisition or the financing thereof.
No action, request for stay, petition for review or rehearing, reconsideration,
or appeal with respect to any of the foregoing shall be pending, and the time
for any applicable agency to take action to set aside its consent on its own
motion shall have expired.
N. DUE DILIGENCE. The results of the continuing financial, legal,
tax, environmental and accounting due diligence investigations with respect to
Company and its Subsidiaries shall be satisfactory in all respects to Arranger,
Agents and Lenders, and any supplemental business or financial due diligence
that Arranger or Syndication Agent reasonably determines has become necessary
shall not have disclosed information not previously disclosed to Arranger or
Syndication Agent which causes the results of such investigations not to be
satisfactory to Arranger, Agents and Lenders in all respects.
82
84
Arranger, Agents and Lenders shall have received any information reasonably
necessary to conduct their continuing due diligence.
O. FINANCIAL STATEMENTS. The Lenders shall have received (i) audited
financial statements of Stanadyne and its Subsidiaries for the Fiscal Years
ended December 31, 1994, December 31, 1995 and December 31, 1996 and (ii)
unaudited financial statements of Stanadyne and its Subsidiaries for the nine
months ended September 30, 1997, (iii) unaudited financial statements of
Stanadyne and its Subsidiaries for each month subsequent to the most recently
ended Fiscal Quarter (if available) and (iv) a pro forma unaudited balance sheet
of Company (based upon the September 30, 1997 balance sheet of Company) prepared
in accordance with GAAP and reflecting the consummation of the Acquisition, the
related financings and the other transactions contemplated by the Loan Documents
and Related Agreements. Any of Arranger, Agents and Lenders shall have had the
opportunity, at their option, to review any such unaudited financial statements
with Company's independent public accountants at Company's cost.
P. SECURITY INTERESTS IN PERSONAL PROPERTY. On the Closing Date,
Company shall have taken or caused to be taken all such actions, executed and
delivered or caused to be executed and delivered all such agreements, documents
and instruments, and made or caused to be made all such filings and recordings
(other than the filing or recording of items described in clause (iii) below)
that may be necessary or, in the opinion of Agents, desirable in order to create
in favor of Administrative Agent, for the benefit of Lenders, a valid and (upon
such filing and recording) perfected First Priority security interest in the
entire personal Collateral. Such actions shall include the following:
(i) Collateral Documents. Company shall and shall cause
Holdings to deliver to Lenders (or to Agents for Lenders) executed
originals of the Collateral Documents to which such Person is a party.
(ii) Schedules to Collateral Documents. Delivery to Agents of
accurate and complete schedules to all of the applicable Collateral
Documents.
(iii) Stock Certificates and Instruments. Delivery to
Administrative Agent of (a) certificates (which certificates shall be
accompanied if permitted by applicable law by irrevocable undated stock
powers, duly endorsed in blank and otherwise satisfactory in form and
substance to Agents) representing all capital stock pledge pursuant
to the Holdings Pledge Agreement and (b) all promissory notes or other
instruments (duly endorsed, where appropriate, in a manner
satisfactory to Agents) evidencing any Collateral.
Q. COMPLETION OF PROCEEDINGS. All corporate and other proceedings taken
or to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found acceptable by each Agent,
acting on behalf of
83
85
Lenders, and its counsel shall be satisfactory in form and substance to Agents
and such counsel, and Agents and such counsel shall have received all such
counterpart originals or certified copies of such documents as Agents may
reasonably request.
4.2 CONDITIONS TO REVOLVING LOANS AND SWINGLINE LOANS AFTER INITIAL
REVOLVING LOANS.
The obligations of Lenders to make Revolving Loans (other than
the Initial Revolving Loans) and Swing Line Loans on and after the Closing Date
are, in addition to the conditions precedent specified in subsection 4.1 and
subsection 4.3, subject to prior or concurrent satisfaction of the following
conditions:
A. LOAN PARTY DOCUMENTS. On or before the Closing Date, Company shall,
and shall cause each other Loan Party to, deliver to Lenders (or to Agents for
Lenders with sufficient originally executed copies, where appropriate, for each
Lender and its counsel) the following with respect to Company or such Loan
Party, as the case may be, each, unless otherwise noted, dated the Closing Date
(to the extent not previously delivered pursuant to subsection 4.1A):
(i) Resolutions of the Board of Directors of such Person
approving and authorizing the execution, delivery and performance of
the Loan Documents and Related Agreements to which it is a part,
certified as of the Closing Date by the corporate secretary or an
assistant secretary of such Person as being in full force and effect
without modification or amendment;
(ii) Signature and incumbency certificates of the officers of
such Person executing the Loan Documents to which it is a party;
(iii) Executed originals of the Loan Documents to which such
Person is a party; and
(iv) Such other documents as Agents may reasonably request.
B. TERMINATION OF EXISTING CREDIT AGREEMENT AND RELATED LIENS,
EXISTING LETTERS OF CREDIT. On the Closing Date, Company shall have (a) repaid
in full all Indebtedness outstanding under the Existing Credit Agreement (the
aggregate principal amount of which Indebtedness shall not exceed $83,000,000),
(b) terminated any commitments to lend or make other extensions of credit
thereunder, (c) delivered to Administrative Agent all documents or instruments
necessary to release all Liens securing Indebtedness or other obligations of
Stanadyne thereunder, and (d) made arrangements satisfactory to Administrative
Agent with respect to the cancellation of any letters of credit outstanding
thereunder or the issuance of Letters of Credit to support the obligations of
Company with respect thereto.
84
86
C. EVIDENCE OF INSURANCE. Administrative Agent shall have received a
certificate from Company's insurance broker or other evidence satisfactory to it
that all insurance required to be maintained pursuant to subsection 6.4 is in
full force and effect and that Administrative Agent on behalf of Lenders has
been named as additional insured and/or loss payee thereunder to the extent
required under subsection 6.4.
D. [RESERVED].
E. SOLVENCY ASSURANCES. Company shall have delivered to Arranger and
Agents a Financial Condition Certificate dated the Closing Date substantially in
the form of Exhibit XXI annexed hereto and with appropriate attachments, in each
case demonstrating that, after giving effect to the consummation of the
Acquisition, the related financings and the other transactions contemplated by
the Loan Documents and the Related Agreements, Company will be Solvent.
F. CONSUMMATION OF ACQUISITION. The Acquisition shall have become
effective in accordance with the terms of the Acquisition Agreement and the laws
of the state of New York.
G. BORROWING BASE CERTIFICATE. Administrative Agent shall have received
a Borrowing Base Certificate dated as of October 31, 1997.
H. CLOSING DATE MORTGAGES; MORTGAGE POLICIES, ETC.. On the Closing
Date, but after the consummation of the Acquisition, Company and each applicable
Subsidiary Guarantor shall deliver to Administrative Agent:
(i) Closing Date Mortgages. Fully executed and notarized
Mortgages (each a "Closing Date Mortgage" and collectively the "Closing
Date Mortgages") duly recorded in all appropriate places in all
applicable jurisdictions, encumbering each Real Property Asset listed
in Schedule 4.2H annexed hereto (each a "Closing Date Mortgaged
Property", and collectively, the "Closing Date Mortgaged Properties").
(ii) Opinions of Local Counsel. An opinion of counsel (which
counsel shall be reasonably satisfactory to Agents) in each state in
which a Closing Date Mortgaged Property is located with respect to the
enforceability of the form(s) of Closing Date Mortgages to be recorded
in such state and such other matters as Agents may reasonably request,
in each case in form and substance reasonably satisfactory to Agents
dated as of the Closing Date and setting forth substantially the
matters in the opinion attached hereto as Exhibit XXII and as to such
other matters as Agents may reasonably require;
85
87
(iii) Title Insurance. As determined by Syndication Agent in
its sole discretion, (a) unconditional commitments for mortgagee title
insurance policies (the "Closing Date Mortgage Policies") issued by the
Title Company with respect to the Closing Date Mortgaged Properties in
amounts not less than the respective amounts designated therein with
respect to any particular Closing Date Mortgaged Properties, insuring
Administrative Agent that the applicable Assigned Mortgages create
valid and enforceable First Priority mortgage Liens on the respective
Closing Date Mortgaged Properties encumbered thereby, subject only to a
standard survey exception, and such other exceptions approved by
Agents, which Closing Date Mortgage Policies (1) shall include a
lenders aggregation endorsement, an endorsement for future advances
under this Agreement and for any other matters reasonably requested by
Agents and (2) shall provide for affirmative insurance and such
reinsurance as Agents may reasonably request, all of the foregoing in
form and substance reasonably satisfactory to Agents; and (b) evidence
satisfactory to Agents that such Loan Party has (i) delivered to the
Title Company all certificates and affidavits required by the Title
Company in connection with the issuance of the Closing Date Mortgage
Policies and (ii) paid to the Title Company or to the appropriate
governmental authorities all expenses and premiums of the Title Company
in connection with the issuance of the Closing Date Mortgage Policies
and all recording and stamp taxes (including mortgage recording and
intangible taxes) payable in connection with recording the Assigned
Mortgages in the appropriate real estate records;
(iv) Title Reports. With respect to each Closing Date Mortgaged
Property, a title report issued by the Title Company with respect
thereto, dated not more than 30 days prior to the Closing Date and
satisfactory in form and substance to Agents;
(v) Copies of Documents Relating to Title Exceptions. Copies of
all recorded documents listed as exceptions to title or otherwise
referred to in the Closing Date Mortgage Policies or in the title
reports delivered pursuant to subsection 4.2H(iv);
(vi) Matters Relating to Flood Hazard Properties. (a) Evidence,
which may be in the form of a letter from an insurance broker or a
municipal engineer, as to whether (1) any Closing Date Mortgaged
Property is a Flood Hazard Property and (2) the community in which any
such Flood Hazard Property is located is participating in the National
Flood Insurance Program, (b) if there are any such Flood Hazard
Properties, such Loan Party's written acknowledgement of receipt of
written notification from Administrative Agent (1) as to the existence
of each such Flood Hazard Property and (2) as to whether the community
in which each such Flood Hazard Property is located is participating in
the National Flood Insurance Program, and (c) in the event any such
Flood Hazard Property is located in a
86
88
community that participates in the National Flood Insurance
Program, evidence that Company has obtained flood insurance in respect
of such Flood Hazard Property to the extent required under the
applicable regulations of the Board of Governors of the Federal Reserve
System; and
(vii) Environmental Indemnity. If Agents reasonably determine
that, due to the operation, interpretation or application of state or
federal laws or requirements, or due to any other reason, Agents or
Lenders are or, under certain circumstances, may not be adequately
indemnified under the terms of this Agreement, an environmental
indemnity agreement, satisfactory in form and substance to Agents and
their counsel, with respect to the indemnification of Agents and
Lenders for any liabilities that may be imposed on or incurred by any
of them as a result of any Hazardous Materials Activity; provided that
Company shall not have any obligation to an Agent or a Lender to the
extent such liabilities arise from gross negligence or willful
misconduct of that Agent or Lender as determined by a final judgment of
a court of competent jurisdiction.
I. SECURITY INTERESTS IN PERSONAL AND MIXED PROPERTY. On the Closing
Date, but after the Acquisition has been consummated, Company and its
Subsidiaries shall have taken or caused to be taken all such actions, executed
and delivered or caused to be executed and delivered all such agreements,
documents and instruments, and made or caused to be made all such filings and
recordings (other than the filing or recording of items described in clauses
(iii), (iv) and (v) below) that may be necessary or, in the opinion of Agents,
desirable in order to create in favor of Administrative Agent, for the benefit
of Lenders, a valid and (upon such filing and recording) perfected First
Priority security interest in the entire personal and mixed property Collateral.
Such actions shall include the following:
(i) Collateral Documents. Company shall and shall cause each
other Loan Party to deliver to Lenders (or to Agents for Lenders)
executed originals of the Collateral Documents to which such Person is
a party (to the extent not delivered pursuant to subsection 4.1P).
(ii) Schedules to Collateral Documents. Delivery to Agents of
accurate and complete schedules to all of the applicable Collateral
Documents (to the extent not delivered pursuant to subsection 4.1P).
(iii) Stock Certificates and Instruments. To the extent not
delivered pursuant to subsection 4.1P, delivery to Administrative Agent
of (a) certificates (which certificates shall be accompanied if
permitted by applicable law by irrevocable undated stock powers, duly
endorsed in blank and otherwise satisfactory in form and substance to
Agents) representing all capital stock pledged pursuant to the Company
Pledge Agreement, the Subsidiary Pledge Agreements and the
87
89
Auxiliary Pledge Agreements and (b) all promissory notes or
other instruments (duly endorsed, where appropriate, in a manner
satisfactory to Agents) evidencing any Collateral;
(iv) Lien Searches and UCC Termination Statements. Delivery to
Agents of (a) the results of a recent search, by a Person satisfactory
to Agents, of all effective UCC financing statements and fixture
filings and all judgment and tax lien filings which may have been made
with respect to any personal or mixed property of any Loan Party,
together with copies of all such filings disclosed by such search, and
(b) UCC termination statements duly executed by all applicable Persons
for filing in all applicable jurisdictions as may be necessary to
terminate any effective UCC financing statements or fixture filings
disclosed in such search (other than any such financing statements or
fixture filings in respect of Liens permitted to remain outstanding
pursuant to the terms of this Agreement).
(v) UCC Financing Statements and Fixture Filings. Delivery to
Administrative Agent of UCC financing statements and, where
appropriate, fixture filings, duly executed by each applicable Loan
Party with respect to all personal and mixed property Collateral of
such Loan Party, for filing in all jurisdictions as may be necessary
or, in the opinion of Agents, desirable to perfect the security
interests created in such Collateral pursuant to the Collateral
Documents;
(vi) PTO Cover Sheets, Etc. Delivery to Administrative Agent of
all cover sheets or other documents or instruments required to be filed
with the PTO in order to create or perfect Liens in respect of any IP
Collateral;
(vii) Opinions of Local Counsel. Delivery to Agents of an
opinion of counsel (which counsel shall be reasonably satisfactory to
Agents) under the laws of each jurisdiction in which any Loan Party or
any personal or mixed property Collateral is located with respect to
the creation and perfection of the security interests in favor of
Administrative Agent in such Collateral and such other matters governed
by the laws of such jurisdiction regarding such security interests as
Agents may reasonably request, in each case in form and substance
reasonably satisfactory to Agents dated as of the Closing Date and
setting forth substantially the matters in the form of opinion annexed
hereto as Exhibit XXII and as to such other matters as Agents may
reasonably require.
J. GUARANTIES. On the Closing Date, but after the Acquisition has been
consummated, Company shall and shall cause each other Loan Party to deliver to
Lenders (or to Agents for Lenders) executed originals of the Guaranties to which
such Person is a party.
88
90
K. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. On the
Closing Date, but after the Acquisition has been consummated, Company shall have
delivered an Officer's Certificate, in form and substance satisfactory to
Agents, to the effect that the representations and warranties in Section 5
hereof are true, correct and complete in all material respects on and as of the
Closing Date to the same extent as though made on and as of that date (or, to
the extent such representations and warranties specifically relate to an earlier
date, that such representations and warranties were true, correct and complete
in all material respects on and as of such earlier date) and that Company shall
have performed in all material respects all agreements and satisfied all
conditions which this Agreement provides shall be performed or satisfied by it
on or before the Closing Date except as otherwise disclosed to and agreed to in
writing by Agents and Requisite Lenders.
L. COMPLETION OF PROCEEDINGS. All corporate and other proceedings taken
or to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found acceptable by each Agent,
acting on behalf of Lenders, and its counsel shall be satisfactory in form and
substance to Agents and such counsel, and Agents and such counsel shall have
received all such counterpart originals or certified copies of such documents as
Agents may reasonably request.
4.3 CONDITIONS TO ALL LOANS.
The obligations of Lenders to make Loans on each Funding Date
are subject to the following further conditions precedent:
A. Administrative Agent shall have received before that Funding
Date, in accordance with the provisions of subsection 2.1B, an originally
executed Notice of Borrowing, in each case signed by the chief executive
officer, the chief financial officer or the treasurer of Company or by any
executive officer of Company designated by any of the above-described officers
on behalf of Company in a writing delivered to Administrative Agent.
B. As of that Funding Date:
(i) The representations and warranties contained herein and in
the other Loan Documents shall be true, correct and complete in all
material respects on and as of that Funding Date to the same extent as
though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date,
in which case such representations and warranties shall have been true,
correct and complete in all material respects on and as of such earlier
date;
89
91
(ii) No event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by such
Notice of Borrowing that would constitute an Event of Default or a
Potential Event of Default;
(iii) Each Loan Party shall have performed in all material
respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before
that Funding Date;
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender
from making the Loans to be made by it on that Funding Date;
(v) The making of the Loans requested on such Funding Date
shall not violate any law including Regulation G, Regulation T,
Regulation U or Regulation X of the Board of Governors of the Federal
Reserve System; and
(vi) There shall not be pending or, to the knowledge of
Company, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Company or any of its
Subsidiaries or any property of Company or any of its Subsidiaries that
has not been disclosed by Company in writing pursuant to subsection 5.6
or 6.1(x) prior to the making of the last preceding Loans (or, in the
case of the initial Loans, prior to the execution of this Agreement),
and there shall have occurred no development not so disclosed in any
such action, suit, proceeding, governmental investigation or
arbitration so disclosed, that, in either event, in the reasonable
opinion of Agents or of Requisite Lenders, would be expected to have a
Material Adverse Effect.
4.4 CONDITIONS TO LETTERS OF CREDIT.
The issuance of any Letter of Credit hereunder (whether or not
the applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
A. On or before the date of issuance of the initial Letter of Credit
pursuant to this Agreement, the initial Loans shall have been made.
B. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions of
subsection 3.1B(i), an originally executed Notice of Issuance of Letter of
Credit, in each case signed by the chief executive officer, the chief financial
officer or the treasurer of Company or by any executive officer of Company
designated by any of the above-described officers on behalf of Company in a
writing delivered to Administrative Agent, together with all other information
specified in subsection 3.1B(i) and such other documents or information as the
90
92
applicable Issuing Lender may reasonably require in connection with the issuance
of such Letter of Credit.
C. On the date of issuance of such Letter of Credit, all conditions
precedent described in subsection 4.3B shall be satisfied to the same extent as
if the issuance of such Letter of Credit were the making of a Loan and the date
of issuance of such Letter of Credit were a Funding Date.
SECTION 5. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders and the Agents to enter into this
Agreement and to make the Loans, to induce Issuing Lenders to issue Letters of
Credit and to induce other Lenders to purchase participations therein, Company
represents and warrants to each Lender and the Agents, on the date of this
Agreement, on each Funding Date and on the date of issuance of each Letter of
Credit, that the following statements are true, correct and complete:
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
A. ORGANIZATION AND POWERS. Each Loan Party is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation as specified in Schedule 5.1 annexed hereto. Each
Loan Party has all requisite corporate power and authority to own and operate
its properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Loan Documents and the Related Agreements to which
it is a party and to carry out the transactions contemplated thereby.
B. QUALIFICATION AND GOOD STANDING. Each Loan Party is qualified to do
business and in good standing in every jurisdiction where its assets are located
and wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing has not
had and will not have a Material Adverse Effect.
C. CONDUCT OF BUSINESS. Company and its Subsidiaries are engaged only
in the businesses permitted to be engaged in pursuant to subsection 7.14.
D. SUBSIDIARIES. All of the Subsidiaries of Company are identified in
Schedule 5.1 annexed hereto, as said Schedule 5.1 may be supplemented from time
to time pursuant to the provisions of subsection 6.1(xv). The capital stock of
each of the Subsidiaries of Company identified in Schedule 5.1 annexed hereto
(as so supplemented) is duly authorized, validly issued, fully paid and
nonassessable and none of such capital stock constitutes Margin Stock. Each of
the Subsidiaries of Company identified in Schedule 5.1
91
93
annexed hereto (as so supplemented) is a corporation duly organized, validly
existing and in good standing under the laws of its respective jurisdiction of
incorporation set forth therein, has all requisite corporate power and authority
to own and operate its properties and to carry on its business as now conducted
and as proposed to be conducted, and is qualified to do business and in good
standing in every jurisdiction where its assets are located and wherever
necessary to carry out its business and operations, in each case except where
failure to be so qualified or in good standing or a lack of such corporate power
and authority has not had and will not have a Material Adverse Effect.
Schedule 5.1 annexed hereto (as so supplemented) correctly sets forth the
ownership interest of Company and each of its Subsidiaries in each of the
Subsidiaries of Company identified therein. After the consummation of the
Acquisition, Company will be a wholly-owned Subsidiary of Holdings.
5.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery and performance
of the Loan Documents and the Related Agreements have been duly authorized by
all necessary corporate action on the part of each Loan Party that is a party
thereto.
B. NO CONFLICT. Upon payment of obligations under and termination of
the Existing Credit Agreement, the execution, delivery and performance by Loan
Parties of the Loan Documents and the Related Agreements to which they are
parties and the consummation of the transactions contemplated by the Loan
Documents and such Related Agreements do not and will not (i) violate any
provision of any law or any governmental rule or regulation applicable to
Holdings, Company or any of its Subsidiaries, the Certificate or Articles of
Incorporation or Bylaws of Holdings, Company or any of its Subsidiaries or any
order, judgment or decree of any court or other agency of government binding on
Holdings, Company or any of its Subsidiaries, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any Con tractual Obligation of Company or any of its Subsidiaries,
(iii) result in or require the creation or imposition of any Lien upon any of
the properties or assets of Holdings, Company or any of its Subsidiaries (other
than any Liens created under any of the Loan Documents in favor of
Administrative Agent on behalf of Lenders), or (iv) require any approval of
stockholders or any approval or consent of any Person under any Contractual
Obligation of Holdings, Company or any of its Subsidiaries, except for such
approvals or consents which will be obtained on or before the Closing Date and
disclosed in writing to Lenders.
C. GOVERNMENTAL CONSENTS. The execution, delivery and performance by
Loan Parties of the Loan Documents and the Related Agreements to which they are
parties and the consummation of the transactions contemplated by the Loan
Documents and such Related Agreements do not and will not require any
registration with, consent or approval
92
94
of, or notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body.
D. BINDING OBLIGATION. Each of the Loan Documents and Related
Agreements has been duly executed and delivered by each Loan Party that is a
party thereto and is the legally valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.
5.3 FINANCIAL CONDITION.
Company has heretofore delivered to Lenders, at Lenders'
request, the following financial statements and information: (i) the
consolidated balance sheet of Stanadyne and its Subsidiaries as at December 31,
1996 and related consolidated statements of income, changes in stockholders'
equity and cash flows of Stanadyne and its Subsidiaries for the Fiscal Year then
ended and (ii) the unaudited consolidated balance sheet of Stanadyne and its
Subsidiaries as at September 30, 1997 and the related unaudited consolidated
statements of income, changes in stockholders' equity and cash flows of
Stanadyne and its Subsidiaries for the nine months then ended. All such
statements were prepared in conformity with GAAP and fairly present, in all
material respects, the financial position (on a consolidated basis) of the
entities described in such financial statements as at the respective dates
thereof and the results of operations and cash flows (on a consolidated basis)
of the entities described therein for each of the periods then ended; any such
unaudited financial statements may be prepared without footnotes and other
presentation items and shall be subject to changes resulting from normal
year-end adjustments. Stanadyne does not (and will not following the funding of
the initial Loans) have any Contingent Obligation (except for Contingent
Obligations incurred in the ordinary course of business), contingent liability
or liability for taxes, long-term lease or unusual forward or long-term
commitment that is not reflected in the foregoing financial statements or the
notes thereto and which in any such case is material in relation to the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Stanadyne or any of its Subsidiaries.
5.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.
Since December 31, 1996, except for the transactions
contemplated by the Acquisition Agreement, no event or change has occurred that
has caused or evidences and except as set forth on Schedule 5.11, either in any
case or in the aggregate, a Material Adverse Effect. Neither Company nor any of
its Subsidiaries has directly or indirectly declared, ordered, paid or made,
or set apart any sum or property for, any Restricted Junior Payment or agreed
to do so except as permitted by subsection 7.5.
93
95
5.5 TITLE TO PROPERTIES; LIENS; REAL PROPERTY.
A. TITLE TO PROPERTIES; LIENS. Company and its Subsidiaries
have (i) good, sufficient and legal title to (in the case of fee interests in
real property), (ii) valid leasehold interests in (in the case of leasehold
interests in real or personal property), or (iii) good title to (in the case of
all other personal property), all of their respective properties and assets
reflected in the financial statements referred to in subsection 5.3 or in the
most recent financial statements delivered pursuant to subsection 6.1, in each
case except for assets disposed of since the date of such financial statements
in the ordinary course of business or as otherwise permitted under subsection
7.7. Except as permitted by this Agreement, all such properties and assets are
free and clear of Liens.
B. REAL PROPERTY. As of the Closing Date, Schedule 5.5 annexed
hereto contains a true, accurate and complete list of (i) all real property
owned by Company or any Subsidiary and (ii) all leases, subleases or assignments
of leases (together with all amendments, modifications, supplements, renewals or
extensions of any thereof) affecting each Real Property Asset of any Loan Party,
regardless of whether such Loan Party is the landlord or tenant (whether
directly or as an assignee or successor in interest) under such lease, sublease
or assignment. Except as specified in Schedule 5.5 annexed hereto, each
agreement listed in clause (ii) of the immediately preceding sentence is in full
force and effect and Company does not have knowledge of any default that has
occurred and is continuing thereunder, and each such agreement constitutes the
legally valid and binding obligation of each applicable Loan Party, enforceable
against such Loan Party in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles.
5.6 LITIGATION; ADVERSE FACTS.
Except as set forth in Schedule 5.6 annexed hereto, there are
no actions, suits, proceedings, arbitrations or governmental investigations
(whether or not purportedly on behalf of Company or any of its Subsidiaries) at
law or in equity, or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign (including any Environmental Claims) that are pending or, to
the knowledge of Company, threatened against or affecting Company or any of its
Subsidiaries or any property of Company or any of its Subsidiaries and that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. Neither Company nor any of its Subsidiaries (i) is in
violation of any applicable laws (including Environmental Laws) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect, or (ii) is subject to or in default with respect to any
final judgments, writs, injunctions, decrees, rules or regulations of any court
or any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, that,
94
96
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.
5.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 6.3, all tax
returns and reports of Company and its Subsidiaries required to be filed by any
of them have been timely filed, and all taxes shown on such tax returns to be
due and payable and all assessments, fees and other governmental charges upon
Company and its Subsidiaries and upon their respective properties, assets,
income, businesses and franchises which are due and payable have been paid when
due and payable. Company knows of no proposed tax assessment against Company or
any of its Subsidiaries which is not being actively contested by Company or such
Subsidiary in good faith and by appropriate proceedings; provided that such
reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor.
5.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS; MATERIAL
CONTRACTS.
A. Neither Company nor any of its Subsidiaries is in default in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, would not have a Material Adverse Effect.
B. Neither Company nor any of its Subsidiaries is a party to or
is otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
C. Schedule 5.8 contains a true, correct and complete list of
all the Material Contracts in effect on the Closing Date. Except as described on
Schedule 5.8, all such Material Contracts are in full force and effect and no
material defaults currently exist thereunder.
5.9 GOVERNMENTAL REGULATION.
Neither Company nor any of its Subsidiaries is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act or the Investment Company Act of 1940 or
under any other federal or state statute or regulation which may limit its
ability to incur Indebtedness or which may otherwise render all or any portion
of the Obligations unenforceable.
95
97
5.10 SECURITIES ACTIVITIES.
A. Neither Company nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not more
than 25% of the value of the assets (either of Company only or of Company and
its Subsidiaries on a consolidated basis) subject to the provisions of
subsection 7.2 or 7.7 or subject to any restriction contained in any agreement
or instrument, between Company and any Lender or any Affiliate of any Lender,
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.
5.11 EMPLOYEE BENEFIT PLANS.
A. Company, each of its Subsidiaries and each of their
respective ERISA Affiliates are in material compliance with all applicable
provisions and requirements of ERISA and the regulations and published
interpretations thereunder with respect to each Employee Benefit Plan, and have
performed in all material respects their obligations under each Employee Benefit
Plan. Except as set forth on Schedule 5.11, each Employee Benefit Plan which is
intended to qualify under Section 401(a) of the Internal Revenue Code is so
qualified.
B. Except as set forth in Schedule 5.11, no ERISA Event has
occurred or is reasonably expected to occur.
C. Except as set forth on Schedule 5.11 and except to the
extent required under Section 4980B of the Internal Revenue Code, no Employee
Benefit Plan provides health or welfare benefits (through the purchase of
insurance or otherwise) for any retired or former employee of Holdings, any of
its Subsidiaries or any of their respective ERISA Affiliates.
D. As of the most recent valuation date for any Pension Plan,
the amount of the excess of the benefit liabilities (as defined in Section
4001(a)(16) of ERISA) over the current value of the assets, individually or in
the aggregate for all Pension Plans (excluding for purposes of such computation
any Pension Plans with respect to which assets exceed benefit liabilities),
does not exceed $2,000,000.
E. Neither Company, any Subsidiary nor any of their respective
ERISA Affiliates is or was a party to, or has obligations under, any
Multiemployer Plan.
F. Neither Company, nor Subsidiary nor any of their respective
ERISA Affiliates has any liability under Sections 401(a)(29) or 412(m) of the
Internal Revenue
96
98
Code, or Title IV of ERISA, with respect to any of their respective former
ERISA Affiliates.
5.12 CERTAIN FEES.
No broker's or finder's fee or commission will be payable with
respect to this Agreement or any of the transactions contemplated hereby, with
the exception of any broker's or finder's fee or commission which may be payable
to DLJ or its affiliates, and Company hereby indemnifies Lenders against, and
agrees that it will hold Lenders harmless from, any claim, demand or liability
for any such broker's or finder's fees alleged to have been incurred in
connection herewith or therewith and any expenses (including reasonable fees,
expenses and disbursements of counsel) arising in connection with any such
claim, demand or liability.
5.13 ENVIRONMENTAL PROTECTION.
Except as set forth in Schedule 5.13 annexed hereto:
(i) neither Company nor any of its Subsidiaries nor any of
their respective Facilities or operations are subject to any
outstanding written order, consent decree or settlement agreement with
any Person relating to any Environmental Claim;
(ii) neither Company nor any of its Subsidiaries has
received any letter or written request for information properly
requested under Section 104 of the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. Section 9604) or
any comparable state law;
(iii) to Company's knowledge, there are no, and have been no,
conditions, occurrences, or Hazardous Materials Activities which could
reasonably be expected to form the basis of an Environmental Claim
against Company or any of its Subsidiaries, where such Environmental
Claim could reasonably be expected to result in liabilities or costs to
Company of $100,000 or more;
(iv) neither Company nor any of its Subsidiaries nor, to
Company's knowledge, any predecessor of Company or any of its
Subsidiaries (where Company is or would be subject to the liabilities
of such predecessor) has filed any notice under any Environmental Law
indicating past or present treatment of Hazardous Materials at any
Facility, and none of Company's or any of its Subsidiaries' operations
involves the generation, transportation, treatment, storage or disposal
of hazardous waste, as such terms are defined under 40 C.F.R. Parts
260-270 or any state equivalent; and
97
99
(v) compliance with all current or reasonably foreseeable
future Environmental Laws will not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
Notwithstanding anything in this subsection 5.13 to the
contrary and except as disclosed in Schedule 5.13, no event or condition has
occurred or is occurring with respect to Company or any of its Subsidiaries
relating to any Environmental Law, any Release of Hazardous Materials, or any
Hazardous Materials Activity, which individually or in the aggregate has had or
could reasonably be expected to have a Material Adverse Effect.
5.14 EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or threatened
involving Company or any of its Subsidiaries that could reasonably be expected
to have a Material Adverse Effect.
5.15 SOLVENCY.
Upon completion of the Acquisition, each Loan Party is and,
upon the incurrence of any Obligations by such Loan Party on any date on which
this representation is made, will be, Solvent.
5.16 MATTERS RELATING TO COLLATERAL.
A. CREATION, PERFECTION AND PRIORITY OF LIENS. The execution and
delivery of the Collateral Documents by Loan Parties, together with (i) the
actions taken on or prior to the date hereof pursuant to subsections 6.1, 6.2,
6.8 and 6.9 and (ii) the delivery to Administrative Agent of any Pledged
Collateral not delivered to Administrative Agent at the time of execution and
delivery of the applicable Collateral Document (all of which Pledged Collateral
has been so delivered) are effective to create in favor of Administrative Agent
for the benefit of Lenders, as security for the respective Secured Obligations
(as defined in the applicable Collateral Document in respect of any Collateral),
a valid and perfected First Priority Lien on all of the Collateral, and all
filings and other actions necessary or desirable to perfect and maintain the
perfection and First Priority status of such Liens have been duly made or taken
and remain in full force and effect, other than (w) the filing of any UCC
financing statements delivered to Administrative Agent for filing (but not yet
filed) and the periodic filing of UCC continuation statements in respect of UCC
financing statements filed by or on behalf of Administrative Agent, (x) with
respect to Collateral as to which the Administrative Agent does not require
perfection of such Lien, (y) filings with the Patent and Trademark Office and
Copyright Office, and (z) the annotation of the pledge of 65% of the stock of
Stanadyne Italy on the stock certificate(s) and in the shareholders ledger of
98
100
Stanadyne Italy, which will be signed by a director of Stanadyne Italy as soon
as practicable after Closing.
B. GOVERNMENTAL AUTHORIZATIONS. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the pledge or grant by any Loan Party
of the Liens purported to be created in favor of Administrative Agent pursuant
to any of the Collateral Documents or (ii) the exercise by Administrative Agent
of any rights or remedies in respect of any Collateral (whether specifically
granted or created pursuant to any of the Collateral Documents or created or
provided for by applicable law), except for filings or recordings contemplated
by subsection 5.16A and except as may be required, in connection with the
disposition of any Pledged Collateral, by laws generally affecting the offering
and sale of securities.
C. ABSENCE OF THIRD-PARTY FILINGS. Except such as may have been filed
in favor of Administrative Agent as contemplated by subsection 5.16A and except
as shall have been filed pursuant to the Existing Credit Agreement, (i) no
effective UCC financing statement, fixture filing or other instrument similar in
effect covering all or any part of the Collateral is on file in any filing or
recording office and (ii) no effective filing covering all or any part of the IP
Collateral is on file in the PTO.
D. MARGIN REGULATIONS. The pledge of the Pledged Collateral pursuant
to the Collateral Documents does not violate Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System.
E. INFORMATION REGARDING COLLATERAL. All information supplied to Agents
by or on behalf of any Loan Party with respect to any of the Collateral (in each
case taken as a whole with respect to any particular Collateral) is accurate and
complete in all material respects. In furtherance of the foregoing, Holdings
owns no assets except for all the capital stock of Company; all IP Collateral is
owned by Company or a Subsidiary.
5.17 DISCLOSURE.
No representation or warranty of any Loan Party contained in any
Loan Document, Related Agreement or in any other document, certificate or
written statement furnished to Lenders by or on behalf of Company or any of its
Subsidiaries for use in connection with the transactions contemplated by this
Agreement contains any untrue statement of a material fact or omits to state a
material fact (known to Company, in the case of any document not furnished by
it) necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made. Any
projections and pro forma financial information contained in such materials are
based upon good faith estimates and assumptions believed by Company to be
reasonable at the time made, it being recognized by Lenders that such
projections as to future events are not
99
101
to be viewed as facts and that actual results during the period or periods
covered by any such projections may differ from the projected results. There are
no facts known (or which should upon the reasonable exercise of diligence be
known) to any Responsible Officer (other than matters of a general economic
nature) that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect and that have not been disclosed herein or
in such other documents, certificates and statements furnished to Lenders for
use in connection with the transactions contemplated hereby.
SECTION 6. COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, Company shall perform, and shall cause each of its Subsidiaries to
perform, all covenants in this Section 6.
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Company will maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance with
sound business practices to permit preparation of financial statements in
conformity with GAAP.
Company will deliver to Agents and Lenders:
(i) [Reserved];
(ii) Quarterly Financials: as soon as available and in any
event within 45 days and 90 days after the end of the last Fiscal
Quarter, after the end of each of the first three Fiscal Quarters, the
unaudited consolidated balance sheet of Company and its Subsidiaries as
at the end of such Fiscal Quarter and the related unaudited
consolidated statements of income, changes in stockholders' equity and
cash flows of Company and its Subsidiaries for such Fiscal Quarter and
for the period from the beginning of the then current Fiscal Year to
the end of such Fiscal Quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding
periods of the previous Fiscal Year and the corresponding figures from
the Financial Plan for the current Fiscal Year, all in reasonable
detail and certified by the chief financial officer of Company that
they fairly present, in all material respects, the financial condition
of Company and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods
indicated, subject to changes resulting from audit and normal year-end
adjustments;
100
102
(iii) Year-End Financials: as soon as available and in any
event within 105 days after the end of each Fiscal Year, the
consolidated balance sheet of Company and its Subsidiaries as at the
end of such Fiscal Year and the related consolidated statements of
income, changes in stockholders' equity and cash flows of Company and
its Subsidiaries for such Fiscal Year, setting forth in each case in
comparative form the corresponding figures for the previous Fiscal Year
and the corresponding figures from the Financial Plan for the Fiscal
Year covered by such financial statements, all in reasonable detail and
certified by the chief financial officer, chief accounting officer or
controller of Company that they fairly present, in all material
respects, the financial condition of Company and its Subsidiaries as at
the dates indicated and the results of their operations and their cash
flows for the periods indicated, and (b) in the case of such
consolidated financial statements, a report thereon of independent
certified public accountants of recognized national standing selected
by Company and reasonably satisfactory to Agents, which report shall
express no doubts about the ability of Company and its Subsidiaries to
continue as a going concern, and shall state that such consolidated
financial statements fairly present, in all material respects, the
consolidated financial position of Company and its Subsidiaries as at
the dates indicated and the results of their operations and their cash
flows for the periods indicated in conformity with GAAP applied on a
basis consistent with prior years (except as otherwise disclosed in
such financial statements) and that the examination by such accountants
in connection with such consolidated financial statements has been made
in accordance with generally accepted auditing standards;
(iv) Officer's and Compliance Certificates: together with each
delivery of financial statements of Company and its Subsidiaries
pursuant to subdivisions (ii) and (iii) above, (a) an Officer's
Certificate of Company stating that the signers have reviewed the terms
of this Agreement and have made, or caused to be made under their
supervision, a review in reasonable detail of the transactions and
condition of Company and its Subsidiaries during the accounting period
covered by such financial statements and that such review has not
disclosed the existence during or at the end of such accounting period,
and that the signers do not have knowledge of the existence as at the
date of such Officer's Certificate, of any condition or event that
constitutes an Event of Default or Potential Event of Default, or, if
any such condi tion or event existed or exists, specifying the nature
and period of existence thereof and what action Company has taken, is
taking and proposes to take with respect thereto; (b) a Margin
Determination Certificate demonstrating in reasonable detail the
Consolidated Leverage Ratio for the four consecutive fiscal quarters
ending on the last day of the accounting period covered by such
financial statements; and (c) a Compliance Certificate demonstrating in
reasonable detail Asset Sale Proceeds, Net Insurance/Condemnation
Proceeds and Consolidated Excess Cash Flow received during the period
and compliance during and at the end of the applicable accounting
periods with the restrictions contained in Section 7, in each case to
the extent
101
103
compliance with such restrictions is required to be tested at the end
of the applicable accounting period;
(v) Borrowing Base Certificate: within fifteen (15) days after
the end of each fiscal month, from time to time upon the request of
Administrative Agent and at any other date Company may choose, a
Borrowing Base Certificate as of the last date of such period or the
date so requested, as the case may be;
(vi) Accountants' Certification: together with each delivery of
consolidated financial statements of Company and its Subsidiaries
pursuant to subdivision (iii) above, a written statement by the
independent certified public accountants giving the report thereon (a)
stating that their audit examination has included a review of the terms
of Section 7 of this Agreement as they relate to accounting matters,
(b) stating whether, in connection with their audit examination, any
condition or event that constitutes an Event of Default or Potential
Event of Default has come to their attention and, if such a condition
or event has come to their attention, specifying the nature and period
of existence thereof; provided that such accountants shall not be
liable by reason of any failure to obtain knowledge of any such Event
of Default or Potential Event of Default that would not be disclosed in
the course of their audit examination, and (c) stating that based on
their audit examination nothing has come to their attention that causes
them to believe either or both that the information contained in the
certificates delivered therewith pursuant to subdivision (iv) above is
not correct or that the matters set forth in the Compliance
Certificates delivered therewith pursuant to clause (c) of subdivision
(iv) above for the applicable Fiscal Year are not stated in accordance
with the terms of this Agreement;
(vii) Accountants' Reports: promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of all
reports submitted to Company by independent certified public
accountants in connection with each annual, interim or special audit of
the financial statements of Company and its Subsidiaries made by such
accountants, including any comment letter submitted by such accountants
to management in connection with their annual audit;
(viii) SEC Filings and Press Releases: promptly upon their
becoming available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by
Company to its security holders or by any Subsidiary of Company to its
security holders other than Company or another Subsidiary of Company,
(b) all regular and periodic reports and all registration statements
(other than on Form S-8 or a similar form) and prospectuses, if any,
filed by Company or any of its Subsidiaries with any securities
exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, and (c) all press
releases and other statements made available generally by
102
104
Company or any of its Subsidiaries to the public concerning
material developments in the business of Holdings or any of its
Subsidiaries;
(ix) Events of Default, etc.: promptly upon any Responsible
Officer of Company obtaining knowledge (a) of any condition or event
that constitutes an Event of Default or Potential Event of Default, or
becoming aware that any Lender has given any notice (other than to
Administrative Agent) or taken any other action with respect to a
claimed Event of Default or Potential Event of Default, (b) that any
Person has given any notice to Company or any of its Subsidiaries or
taken any other action with respect to a claimed default or event or
condition of the type referred to in subsection 8.2, (c) of any
condition or event that would be required to be disclosed in a current
report filed by Company with the Securities and Exchange Commission on
Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as in effect on the date
hereof) if Company were required to file such reports under the
Exchange Act, or (d) of the occurrence of any event, facts or change
that has caused or evidences, either in any case or in the aggregate, a
Material Adverse Effect, an Officer's Certificate specifying the nature
and period of existence of such condition, event or change, or
specifying the notice given or action taken by any such Person and the
nature of such claimed Event of Default, Potential Event of Default,
default, event or condition, and what action Company has taken, is
taking and proposes to take with respect thereto;
(x) Litigation or Other Proceedings: promptly upon any
Responsible Officer of Company obtaining knowledge of (X) the
institution of any action, suit, proceeding (whether administrative,
judicial or otherwise), governmental investiga tion or arbitration
against or affecting Company or any of its Subsidiaries or any property
of Company or any of its Subsidiaries (collectively, "PROCEEDINGS") not
previously disclosed in writing by Company to Lenders or (Y) any
material development in any Proceeding that, in any case:
(1) would reasonably be expected to give rise to a
Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as
a result of, the transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their respective
counsel to evaluate such matters;
(xi) ERISA Events: promptly upon becoming aware of the
occurrence of or forthcoming occurrence of any ERISA Event, a written
notice specifying the
103
105
nature thereof, what action Company, any of its Subsidiaries or
any of their respective ERISA Affiliates has taken, is taking or
proposes to take with respect thereto and, when known, any action taken
or threatened by the Internal Revenue Service, the Department of Labor
or the PBGC with respect thereto;
(xii) Financial Plans: as soon as practicable and in any event
no later than ten days after the beginning of each Fiscal Year, a
consolidated plan and financial forecast for each Fiscal Quarter in
such Fiscal Year (the "FINANCIAL PLAN" for such Fiscal Year), including
a forecasted consolidated balance sheet and forecasted consolidated
statements of income and cash flows of Holdings and its Subsidiaries
for each such Fiscal Year, together with pro forma financial covenant
calculations for each such Fiscal Year determined in a manner
consistent with financial covenant calculations shown in a Compliance
Certificate and an explanation of the assumptions on which such
forecasts are based, excluding units, margins and prices by customer;
(xiii) Insurance: upon the request of any Lender, a report in
form and substance satisfactory to Administrative Agent outlining all
material insurance coverage maintained as of the date of such report by
Company and its Subsidiaries and all material insurance coverage
planned to be maintained by Company and its Subsidiaries in the twelve
months ending on the next succeeding March 31;
(xiv) Board of Directors: with reasonable promptness, written
notice of any change in the Board of Directors of Company or of
Holdings;
(xv) New Subsidiaries: promptly upon any Person becoming a
Subsidiary of Holdings or Company, a written notice setting forth with
respect to such Person (a) the date on which such Person became a
Subsidiary of Holdings or Company and (b) all of the data required to
be set forth in Schedule 5.1 annexed hereto with respect to all
Subsidiaries of Holdings (it being understood that such written notice
shall be deemed to supplement Schedule 5.1 annexed hereto for all
purposes of this Agreement);
(xvi) Material Contracts: promptly, and in any event within ten
Business Days after any Material Contract of Company or any of its
Subsidiaries is terminated or amended in a manner that is materially
adverse to Company or such Subsidiary, as the case may be, or any new
Material Contract is entered into, a written statement describing such
event, and an explanation of any actions being taken with respect
thereto;
(xvii) UCC Search Report: As promptly as practicable after the
date of delivery to Administrative Agent of any UCC financing statement
executed by any Loan Party pursuant to subsection 4.2I(v) or 6.8A,
copies of completed UCC
104
106
searches evidencing the proper filing, recording and indexing
of all such UCC financing statement and listing all other effective
financing statements that name such Loan Party as debtor, together with
copies of all such other financing statements not previously delivered
to Administrative Agent by or on behalf of Company or such Loan Party;
and
(xviii) Other Information: with reasonable promptness, such
other information and data with respect to Company or any of its
Subsidiaries as from time to time may be reasonably requested by any
Lender.
6.2 CORPORATE EXISTENCE, ETC.
Except as permitted under subsection 7.7, Company will, and
will cause each of its Subsidiaries to, at all times preserve and keep in full
force and effect its corporate existence and all rights and franchises material
to its business; provided, however that neither Company nor any of its
Subsidiaries shall be required to preserve any such right or franchise if the
Board of Directors of Company or such Subsidiary shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
Company or such Subsidiary, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to Company, such Subsidiary or Lenders.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
A. Company will, and will cause each of its Subsidiaries to,
pay all material taxes, assessments and other governmental charges imposed upon
it or any of its properties or assets or in respect of any of its income,
businesses or franchises before any penalty accrues thereon, and all claims
(including claims for labor, services, materials and supplies) for sums that
have become due and payable and that by law have or may become a Lien upon any
of its properties or assets, prior to the time when any penalty or fine shall be
incurred with respect thereto so long as failure to pay would reasonably be
expected to have a Material Adverse Effect; provided that no such charge or
claim need be paid if it is being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted, so long as such
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor.
B. Company will not, nor will it permit any of its Subsidiaries
to, file or consent to the filing of any consolidated income tax return with any
Person (other than Company or any of its Subsidiaries).
105
107
6.4 MAINTENANCE OF PROPERTIES; INSURANCE; APPLICATION OF NET INSURANCE/
CONDEMNATION PROCEEDS.
A. MAINTENANCE OF PROPERTIES. Company will, and will cause each
of its Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all material
properties used or useful in the business of Company and its Subsidiaries
(including all Intellectual Property) (other than property that is replaced with
similar property) and from time to time will make or cause to be made all
appropriate repairs, renewals and replacements thereof.
B. INSURANCE. Company will maintain or cause to be maintained,
with financially sound and reputable insurers, such public liability insurance,
third party property damage insurance, business interruption insurance and
casualty insurance with respect to liabilities, losses or damage in respect of
the assets, properties and businesses of Company and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by corporations
of established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for
corporations similarly situated in the industry. Without limiting the generality
of the foregoing, Company will maintain or cause to be maintained (i) flood
insurance with respect to each Flood Hazard Property that is located in a
community that participates in the National Flood Insurance Program, in each
case in compliance with any applicable regulations of the Board of Governors of
the Federal Reserve System, and (ii) replacement value casualty insurance on the
Collateral under such policies of insurance, with such insurance companies, in
such amounts, with such deductibles, and covering such risks as are at all times
satisfactory to Agents in their commercially reasonable judgment. Each such
policy of insurance shall (a) name Administrative Agent for the benefit of
Lenders as an additional insured thereunder as its interests may appear and (b)
in the case of each business interruption and casualty insurance policy, contain
a loss payable clause or endorsement, satisfactory in form and substance to
Agents, that names Administrative Agent for the benefit of Lenders as the loss
payee thereunder for any covered loss in excess of $500,000 and provides for at
least 30 days prior written notice to Agents of any modification or cancellation
of such policy.
6.5 INSPECTION RIGHTS; AUDITS OF INVENTORY AND ACCOUNTS RECEIVABLE; LENDER
MEETING.
A. INSPECTION RIGHTS. Company shall, and shall cause each of
its Subsidiaries to, permit any authorized representatives designated by any
Lender (acting through the Administrative Agent) to visit and reasonably inspect
any of the properties of Company or of any of its Subsidiaries, to inspect its
and their financial and accounting records, and to discuss its and their
affairs, finances and accounts with its and their officers and independent
public accountants (provided that Company may, if it so chooses, be
106
108
present at or participate in any such discussion), all upon reasonable notice
and at such reasonable times during normal business hours and, so long as no
Event of Default has occurred and is continuing, each Lender may conduct such an
inspection no more than two times in one year; provided that if an Event of
Default has occurred and is continuing, any Lender may conduct such an
inspection as often as may reasonably be requested.
In addition to, and not in limitation of the preceding
paragraph, a representative designated by Agents shall, at Company's expense,
and after reasonable notice and during normal business hours, be permitted to
audit and monitor Company's Inventory, Accounts Receivable and other assets and
liabilities, in order to, among other things, verify the calculation of the
Borrowing Base.
B. LENDER MEETING. Company will, upon the request of Agents or
Requisite Lenders, participate in a meeting of Agents and Lenders once during
each Fiscal Year to be held at Company's corporate offices (or at such other
location as may be agreed to by Company and Agents) at such time as may be
agreed to by Company and Agents.
6.6 COMPLIANCE WITH LAWS, ETC.
Company shall comply, and shall cause each of its Subsidiaries
to comply, with the requirements of all applicable laws, rules, regulations and
orders of any governmental authority (including all Environmental Laws), except
for such noncompliance that could not reasonably be expected to cause,
individually or in the aggregate, a Material Adverse Effect.
6.7 ENVIRONMENTAL REVIEW AND INVESTIGATION, DISCLOSURE, ETC.; COMPANY'S
ACTIONS REGARDING HAZARDOUS MATERIALS ACTIVITIES, ENVIRONMENTAL CLAIMS
AND VIOLATIONS OF ENVIRONMENTAL LAWS.
A. ENVIRONMENTAL REVIEW AND INVESTIGATION. Company agrees that Agents
may, in their reasonable discretion (subject to the limitations set forth
below), (i) retain, at Company's expense, an independent professional consultant
to review any environmental audits, investigations, analyses and reports
relating to Hazardous Materials prepared by or for Company and (ii) conduct
their own investigation of any Facility; provided that, in the case of any
Facility no longer owned, leased, operated or used by Company or any of its
Subsidiaries, Company shall only be obligated to use its reasonable best efforts
to obtain permission for Agents' professional consultant to conduct an
investigation of such Facility. For purposes of conducting such a review and/or
investigation, Company hereby grants to Agents and their respective agents,
employees, consultants and contractors the right to enter into or onto any
Facilities currently owned, leased, operated or used by Company or any of its
Subsidiaries and to perform such tests on such property (including taking
samples of soil, groundwater and suspected asbestos- containing materials) as
are reasonably necessary in connection therewith (to the extent, at
107
109
any Facility leased by Company or any of its Subsidiaries, such actions are
permitted by the owner of such Facility). Any such investigation of any Facility
shall be conducted, unless otherwise agreed to by Company and Agents, during
normal business hours and, to the extent reasonably practicable, shall be
conducted so as not to interfere with the ongoing operations at such Facility or
to cause any damage or loss to any property at such Facility. Company and Agents
hereby acknowledge and agree that any report of any investigation conducted at
the request of Agents pursuant to this subsection 6.7A will be obtained and
shall be used by Agents and Lenders for the purposes of Lenders' internal credit
decisions, to monitor and police the Loans and to protect Lenders' security
interests, if any, created by the Loan Documents. Agents agree to deliver a copy
of any such report to Company with the understanding that Company acknowledges
and agrees that (x) it will indemnify and hold harmless each Agent and each
Lender from any costs, losses or liabilities relating to Company's use of or
reliance on such report, (y) neither of the Agents nor any Lender makes any
representation or warranty with respect to such report, and (z) by delivering
such report to Company, neither of the Agents nor any Lender is requiring or
recommending the implementation of any suggestions or recommendations contained
in such report. Agents agree that they will not conduct a review pursuant to
clause (i) of this subsection 6.7A more than once per year unless Agents
reasonably believe that Company has breached any representation, warranty or
covenant contained in subsection 5.6, 5.13, 6.6 or 6.7, or that there has been a
material violation of Environmental Laws at any Facility or by Company or any of
its Subsidiaries at any other location or in the event an Event of Default has
occurred and is continuing. Agents further agree that they will not undertake an
investigation of a Facility pursuant to clause (ii) of this subsection 6.7A
unless and to the extent Agents reasonably believe a material violation of
Environmental Laws has occurred at such Facility or Agents reasonably believe
Company or any of its Subsidiaries has breached or defaulted under its
obligations, representations or warranties relating to compliance with
Environmental Laws with respect to such Facility, as set forth in this
Agreement; provided, however, Agents may undertake a new investigation of any
Facility pursuant to clause (ii) above for any reason in the event an Event of
Default has occurred and is continuing.
B. ENVIRONMENTAL DISCLOSURE. Company will deliver to
Agents and Lenders:
(i) Environmental Audits and Reports. As soon as practicable
following receipt thereof, copies of all environmental audits,
investigations, analyses and reports of any kind or character, whether
prepared by personnel of Company or any of its Subsidiaries or by
independent consultants, governmental authorities or any other Persons,
with respect to significant environmental matters at any Facility that
could reasonably be expected to have a Material Adverse Effect;
(ii) Notice of Certain Releases, Remedial Actions, Etc.
Promptly upon the occurrence thereof, written notice describing in
reasonable detail (a) any Release
108
110
required to be reported to any federal, state or local governmental or
regulatory agency under any applicable Environmental Laws unless such
release could not reasonably be expected to have a Material Adverse
Effect, (b) any remedial action taken by Company or any other Person in
response to (1) any Hazardous Materials Activities the existence of
which could reasonably be expected to result in one or more
Environmental Claims having, individually or in the aggregate, a
Material Adverse Effect, or (2) any Environmental Claims that,
individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect, and (c) Company's discovery of any
occurrence or condition on any real property adjoining or in the
vicinity of any Facility that could reasonably be expected to result in
such Facility or any part thereof to be subject to any material
restrictions on the ownership, occupancy, transferability or use
thereof under any Environmental Laws.
(iii) Written Communications Regarding Environmental Claims,
Releases, Etc. As soon as practicable following the sending or receipt
thereof by Company or any of its Subsidiaries, a copy of any and all
written communications with respect to (a) any Environmental Claims
that, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect, (b) any Release required to be reported
to any federal, state or local governmental or regulatory agency, and
(c) any request for information from any governmental agency that
suggests such agency is investigating whether Company or any of its
Subsidiaries may be potentially responsible for any Hazardous Materials
Activity where such Hazardous Materials Activity could reasonably be
expected to have a Material Adverse Effect.
(iv) Notice of Certain Proposed Actions Having Environmental
Impact. Prompt written notice describing in reasonable detail (a) any
proposed acquisition of stock, assets, or property by Company or any of
its Subsidiaries that could reasonably be expected to (1) expose
Company or any of its Subsidiaries to, or result in, Environmental
Claims that could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect or (2) affect the ability of
Company or any of its Subsidiaries to maintain in full force and effect
all material Governmental Authorizations required under any
Environmental Laws for their respective operations and (b) any proposed
action to be taken by Company or any of its Subsidiaries to commence
manufacturing or other industrial operations or to modify current
operations in a manner that could reasonably be expected to subject
Company or any of its Subsidiaries to any additional obligations or
requirements under any Environmental Laws where such obligations or
requirements could reasonably be expected to have a Material Adverse
Effect.
(v) Other Information. With reasonable promptness, such other
documents and information as from time to time may be reasonably
requested by Agents in relation to any matters disclosed pursuant to
this subsection 6.7.
109
111
C. COMPANY'S ACTIONS REGARDING HAZARDOUS MATERIALS
ACTIVITIES, ENVIRONMENTAL CLAIMS AND VIOLATIONS OF ENVIRONMENTAL LAWS.
(i) Remedial Actions Relating to Hazardous Materials
Activities. Company shall promptly undertake (acting directly or
through an indemnitor), and shall cause each of its Subsidiaries
promptly to undertake, any and all investigations, studies, sampling,
testing, abatement, cleanup, removal, remediation or other response
actions necessary to remove, remediate, clean up or abate any Hazardous
Materials Activity on, under or about any Facility that is in violation
in any material respect of any Environmental Laws or that presents a
material risk of giving rise to an Environmental Claim. Without
limiting the generality of the foregoing, Company agrees to provide
Agents with periodic updates, at least once every year, regarding the
status of (x) items indicated with an asterisk in Schedule 5.13, (y)
any items listed on Schedule 5.13 with respect to which Company's
projected liability or costs of compliance increase by more than
$250,000 (as reasonably determined from time to time) and (z) new items
involving any breach of Environmental Laws to the extent Company's
projected liability or costs of compliance (as reasonably determined
from time to time) equals or exceeds $150,000. In the event Company or
any of its Subsidiaries undertakes any such action with respect to any
Hazardous Materials, Company or such Subsidiary shall conduct and
complete such action in compliance with all applicable Environmental
Laws and in accordance with the policies, orders and directives of all
federal, state and local governmental authorities except when, and only
to the extent that, Company's or such Subsidiary's liability with
respect to such Hazardous Materials Activity is being contested in good
faith by Company or such Subsidiary.
(ii) Actions with Respect to Environmental Claims and
Violations of Environmental Laws. Company shall promptly take, and
shall cause each of its Subsidiaries promptly to take, any and all
actions necessary to (i) cure any violation of applicable Environmental
Laws by Company or its Subsidiaries where such violation could
reasonably be expected to have a Material Adverse Effect and (ii) make
an appropriate response to any Environmental Claim against Company or
any of its Subsidiaries where such Environmental Claim could
reasonably be expected to have a Material Adverse Effect and
discharge any obligations it may have to any Person thereunder.
6.8 EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY
COLLATERAL DOCUMENTS BY CERTAIN SUBSIDIARIES AND FUTURE
SUBSIDIARIES; EXECUTION OF AUXILIARY PLEDGE AGREEMENTS; IP
COLLATERAL.
A. EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY
COLLATERAL DOCUMENTS. In the event that any Person becomes a Subsidiary of
Company (or
110
112
a Subsidiary of a Subsidiary of Company) after the date hereof,
Company will promptly notify Administrative Agent of that fact and cause such
Subsidiary, if it is a Domestic Subsidiary, to execute and deliver to
Administrative Agent a counterpart of the Subsidiary Guaranty and a Subsidiary
Security Agreement and to take all such further actions and execute all such
further documents and instruments (including actions, documents and instruments
comparable to those described in subsection 4.2I) as may be necessary or, in the
opinion of Agents, desirable to create in favor of Administrative Agent, for the
benefit of Lenders, a valid and perfected First Priority Lien on all of the
personal and mixed property assets of such Subsidiary described in the
applicable forms of Collateral Documents. With respect to any such Subsidiary
which is a Domestic Subsidiary, Company shall also deliver to Administrative
Agent a Subsidiary Pledge Agreement, granting to Administrative Agent on behalf
of Lenders a First Priority Lien in 100% of the capital stock of such Domestic
Subsidiary, and with respect to any such Subsidiary which is a Foreign
Subsidiary, if Company or a Domestic Subsidiary owns the capital stock of such
Foreign Subsidiary, Company shall deliver to Administrative Agent an Auxiliary
Pledge Agreement granting to Administrative Agent on behalf of Lenders a First
Priority Lien in 65% of the capital stock of such Foreign Subsidiary, and, in
each case, Company shall take, or cause to be taken, all such other actions as
Administrative Agent shall deem necessary or desirable to perfect such security
interest.
B. SUBSIDIARY CHARTER DOCUMENTS, LEGAL OPINIONS, ETC. Company
shall deliver to Administrative Agent, together with such Loan Documents, or
other organization documents (i) certified copies of such Subsidiary's
Certificate or Articles of Incorporation or other organizational documents,
together with a good standing certificate from the Secretary of State of the
jurisdiction of its incorporation and each other state in which such Person is
qualified as a foreign corporation to do business if such Subsidiary is a
Domestic Subsidiary and, to the extent generally available, a certificate or
other evidence of good standing as to payment of any applicable franchise or
similar taxes from the appropriate taxing authority of each of such
jurisdictions if such Subsidiary is a Domestic Subsidiary, each to be dated a
recent date prior to their delivery to Administrative Agent, (ii) a copy of such
Subsidiary's Bylaws or other organizational documents, certified by its
corporate secretary or an assistant secretary as of a recent date prior to their
delivery to Administrative Agent, (iii) a certificate executed by the secretary
or an assistant secretary of such Subsidiary as to (a) the fact that the
attached resolutions of the Board of Directors of such Subsidiary approving and
authorizing the execution, delivery and performance of such Loan Documents are
in full force and effect and have not been modified or amended and (b) the
incumbency and signatures of the officers of such Subsidiary Guarantor executing
such Loan Documents, and (iv) a favorable opinion of counsel to such Subsidiary
Guarantor, in form and substance satisfactory to Agents and their respective
counsel, as to (a) the due organization and good standing of such Subsidiary,
(b) the due authorization, execution and delivery by such Subsidiary of such
Loan Documents, (c) the enforceability of such Loan Documents against such
Subsidiary, (d) such other matters (including matters relating to the creation
and perfection of Liens in any Collateral pursuant to such Loan
111
113
Documents) as Agents may reasonably request, all of the foregoing to be
satisfactory in form and substance to Agents and their respective counsel.
6.9 CONFORMING LEASEHOLD INTERESTS; MATTERS RELATING TO ADDITIONAL REAL
PROPERTY COLLATERAL.
A. CONFORMING LEASEHOLD INTERESTS. If Company or any of its
Subsidiaries acquires any Material Leasehold Property, Company shall, or shall
cause such Subsidiary to, cause such Material Leasehold Property to be a
Conforming Leasehold Interest.
B. ADDITIONAL MORTGAGES, ETC. From and after the Closing Date,
in the event that (i) Company or any Subsidiary Guarantor acquires any fee
interest in Material Real Property or any Material Leasehold Property or (ii) at
the time any Person becomes a Subsidiary Guarantor, such Person owns or holds
any fee interest in material real property or any Material Leasehold Property,
in either case excluding any such Real Property Asset the encumbrancing of which
requires the consent of any applicable lessor or (in the case of clause (ii)
above) then-existing senior lienholder, where Company and its Subsidiaries are
unable to obtain such lessor's or senior lienholder's consent (any such
non-excluded Real Property Asset described in the foregoing clause (i) or (ii)
being an "ADDITIONAL MORTGAGED PROPERTY"), Company or such Subsidiary Guarantor
shall deliver to Administrative Agent, as soon as practicable after such Person
acquires such Additional Mortgaged Property or becomes a Subsidiary Guarantor,
as the case may be, the following:
(i) Additional Mortgage. A fully executed and notarized
Mortgage (an "ADDITIONAL MORTGAGE"), duly recorded in all appropriate
places in all applicable jurisdictions, encumbering the interest of
such Loan Party in such Additional Mortgaged Property;
(ii) Opinions of Counsel. (a) A favorable opinion of counsel to
such Loan Party, in form and substance satisfactory to Agents and their
respective counsel, as to the due authorization, execution and delivery
by such Loan Party of such Additional Mortgage and such other matters
as Agents may reasonably request, and (b) if required by Agents, an
opinion of counsel (which counsel shall be reasonably satisfactory to
Agents) in the state in which such Additional Mortgaged Property is
located with respect to the enforceability of the form of Additional
Mortgage recorded in such state and such other matters (including any
matters governed by the laws of such state regarding personal property
security interests in respect of any Collateral) as Agents may
reasonably request, in each case in form and substance reasonably
satisfactory to Agents;
(iii) Landlord Consent and Estoppel; Recorded Leasehold
Interest. In the case of an Additional Mortgaged Property consisting of
a Leasehold Property, (a) a
112
114
Landlord Consent and Estoppel, and (b) evidence that such Leasehold
Property is a Recorded Leasehold Interest;
(iv) Title Insurance. (a) If required by Agents, an ALTA
mortgagee title insurance policy or an unconditional commitment
therefor (an "ADDITIONAL MORTGAGE POLICY") issued by the Title Company
with respect to such Additional Mortgaged Property, in an amount
satisfactory to Agents, insuring fee simple title to, or a valid
leasehold interest in, such Additional Mortgaged Property vested in
such Loan Party and assuring Agents that such Additional Mortgage
creates a valid and enforceable First Priority mortgage Lien on such
Additional Mortgaged Property, subject only to a standard survey
exception, which Additional Mortgage Policy (1) shall include an
endorsement for mechanics' liens, for future advances under this
Agreement and for any other matters reasonably requested by Agents and
(2) shall provide for affirmative insurance and such reinsurance as
Agents may reasonably request, all of the foregoing in form and
substance reasonably satisfactory to Agents; and (b) evidence
satisfactory to Agents that such Loan Party has (i) delivered to the
Title Company all certificates and affidavits required by the Title
Company in connection with the issuance of the Additional Mortgage
Policy and (ii) paid to the Title Company or to the appropriate
governmental authorities all expenses and premiums of the Title Company
in connection with the issuance of the Additional Mortgage Policy and
all recording and stamp taxes (including mortgage recording and
intangible taxes) payable in connection with recording the Additional
Mortgage in the appropriate real estate records;
(v) Title Report. If no Additional Mortgage Policy is required
with respect to such Additional Mortgaged Property, a title report
issued by the Title Company with respect thereto, dated not more than
30 days prior to the date such Additional Mortgage is to be recorded
and satisfactory in form and substance to Agents;
(vi) Copies of Documents Relating to Title Exceptions. Copies
of all recorded documents listed as exceptions to title or otherwise
referred to in the Additional Mortgage Policy or title report delivered
pursuant to clause (v) or (vi) above;
(vii) Matters Relating to Flood Hazard Properties. (a)
Evidence, which may be in the form of a letter from an insurance broker
or a municipal engineer, as to (1) whether such Additional Mortgaged
Property is a Flood Hazard Property and (2) if so, whether the
community in which such Flood Hazard Property is located is
participating in the National Flood Insurance Program, (b) if such
Additional Mortgaged Property is a Flood Hazard Property, such Loan
Party's written acknowledgement of receipt of written notification from
Administrative Agent (1) that such Additional Mortgaged Property is a
Flood Hazard Property and (2) as to
113
115
whether the community in which such Flood Hazard Property is located is
participating in the National Flood Insurance Program, and (c) in the
event such Additional Mortgaged Property is a Flood Hazard Property
that is located in a community that participates in the National Flood
Insurance Program, evidence that Company has obtained flood insurance
in respect of such Flood Hazard Property to the extent required under
the applicable regulations of the Board of Governors of the Federal
Reserve System; and
(viii) Environmental Audit. If required by Agents, reports and
other information, in form, scope and substance reasonably satisfactory
to Agents and prepared by environmental consultants reasonably
satisfactory to Agents, concerning any environmental hazards or
liabilities to which Company or any of its Subsidiaries may be subject
with respect to such Additional Mortgaged Property.
6.10 INTEREST RATE PROTECTION.
Within 90 days after the Closing Date and continuing for a
period of two years, Company shall at all times maintain in effect one or more
Interest Rate Agreements with respect to the Loans, in an aggregate notional
principal amount of not less than 331/3% of the aggregate principal amount of
the Term Loans outstanding from time to time, which Interest Rate Agreements
shall have the effect of establishing a maximum interest rate to the
satisfaction of Syndication Agent per annum with respect to such notional
principal amount, each such Interest Rate Agreement to be in form and substance
satisfactory to Syndication Agent and with a term of not less than two years.
6.11 CLOSING CONDITIONS.
On the Closing Date, Company shall deliver each of the
documents and comply with each of the other conditions specified in subsections
4.1 and 4.2, notwithstanding the funding of the Term Loans and the Initial
Revolving Loans by Lenders prior to the delivery of the documents and
compliance with the conditions specified in subsection 4.2.
SECTION 7. COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, Company shall perform, and shall cause each of its Subsidiaries to
perform, all covenants in this Section 7.
114
116
7.1 INDEBTEDNESS.
Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, assume or guaranty, or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) Company may become and remain liable with respect to
the Obligations;
(ii) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations permitted by subsection 7.4 and,
upon any matured obligations actually arising pursuant thereto, the
Indebtedness corre sponding to the Contingent Obligations so
extinguished;
(iii) Company and its Subsidiaries may become and remain liable
with respect to Indebtedness in respect of Capital Leases and
Indebtedness incurred or assumed to finance solely the acquisition of
real or personal property to be used in the business of Company or a
Subsidiary in an amount not in excess of 100% of the cost of such
property ("purchase money Indebtedness") in an aggregate amount not
exceeding $10,000,000 plus any Capital Lease and purchase money
Indebtedness in existence on the date hereof; provided that such
Capital Leases and purchase money Indebtedness are permitted under the
terms of subsections 7.6 and 7.8;
(iv) Company may become and remain liable with respect to
Indebtedness to any of its wholly-owned Domestic Subsidiaries, and any
wholly-owned Domestic Subsidiary of Company may become and remain
liable with respect to Indebtedness to Company or any other
wholly-owned Subsidiary of Company; provided that (a) all such
intercompany Indebtedness shall be evidenced by promissory notes,
(b) all such intercompany Indebtedness owed by Company to any of its
Subsidiaries shall be subordinated in right of payment to the payment
in full of the Obligations pursuant to the terms of the applicable
promissory notes or an intercompany subordination agreement, and
(c) any payment by any Subsidiary of Company under any guaranty of the
Obligations shall result in a pro tanto reduction of the amount of any
intercompany Indebtedness owed by such Subsidiary to Company or to any
of its Subsidiaries for whose benefit such payment is made;
(v) Company and its Subsidiaries, as applicable, may remain
liable with respect to Indebtedness described in Schedule 7.1 annexed
hereto and any refinancings, extensions, renewals or replacements
thereof; provided, however that in connection with any refinancing,
extension, renewal or replacement, the principal amount of such
Indebtedness shall not be increased over the principal amount
outstanding immediately prior to such refinancing, extension, renewal
or
115
117
replacement and provided, further, that any such refinancing,
extension, renewal or replacement shall be on terms no less favorable
to Company than the Indebtedness so refinanced, extended, renewed or
replaced;
(vi) Company and its Subsidiaries may become and remain liable
with respect to other Indebtedness in an aggregate principal amount not
to exceed $2,000,000 at any time outstanding;
(vii) Stanadyne Italy may become and remain liable with respect
to Indebtedness (including Indebtedness described in clause (v)) in an
aggregate principal amount not to exceed $10,000,000 at any time
outstanding; provided that such Indebtedness shall not be guarantied by
Holdings or any Domestic Subsidiary of Holdings or the Company;
(viii) Company may become and remain liable with respect to
Subordinated Indebtedness (including Indebtedness described in clause
(v)) in an aggregate principal amount not to exceed $125,000,000 at any
time outstanding;
(ix) a Subsidiary may remain liable with respect to
Indebtedness incurred prior to the date that such Person became a
Subsidiary, provided that such Indebtedness was not incurred in
anticipation of such Person becoming a Subsidiary; provided, further
that Company delivers an Officer's Certificate demonstrating, assuming
such Person was a Subsidiary and such Indebtedness was outstanding as
of the first day of the applicable four-quarter period, Company was in
compliance with subsection 7.6B as of the end of the most recent
four-quarter period for which a Compliance Certificate has been
delivered pursuant to subsection 6.1(iv); and
(x) Company and its Domestic Subsidiaries may remain liable
with respect to Indebtedness secured by any asset acquired by Company
and such Subsidiary; provided that such Indebtedness was incurred prior
to the date such asset was acquired and provided further that such
Indebtedness was not incurred in anticipation of such asset being
acquired; and provided further that Company delivers an Officer's
Certificate demonstrating that, assuming such asset was acquired and
such Indebtedness was outstanding as of the first day of the applicable
four-quarter period, Company was in compliance with subsection 7.6B as
of the end of the most recent four-quarter period for which a
Compliance Certificate has been delivered pursuant to subsection
6.1(iv).
7.2 LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, create, incur, assume
or permit to exist any Lien on or with respect to any property or asset of any
kind (including any document or instrument in respect of goods or accounts
receivable) of Company or any of its
116
118
Subsidiaries, whether now owned or hereafter acquired, or any income or profits
therefrom, or file or permit the filing of, or permit to remain in effect, any
financing statement or other similar notice of any Lien with respect to any such
property, asset, income or profits under the Uniform Commercial Code of any
State or under any similar recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens described in Schedule 7.2 annexed hereto; and
(iv) Other Liens securing Indebtedness in an aggregate amount
not to exceed $1,000,000 at any time outstanding.
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If Company or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 7.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 7.2A.
C. NO FURTHER NEGATIVE PLEDGES. Except with respect to specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to an Asset Sale, neither Company
nor any of its Subsidiaries shall enter into any agreement (other than an
agreement prohibiting only the creation of Liens securing Subordinated
Indebtedness) prohibiting the creation or assumption of any Lien upon any of its
properties or assets, whether now owned or hereafter acquired.
D. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO COMPANY OR OTHER
SUBSIDIARIES. Except as provided herein, Company will not, and will not permit
any of its Subsidiaries to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any such Subsidiary to (i) pay dividends or make any other
distributions on any of such Subsidiary's capital stock owned by Company or any
other Subsidiary of Company, (ii) repay or prepay any Indebtedness owed by such
Subsidiary to Company or any other Subsidiary of Company, (iii) make loans or
advances to Company or any other Subsidiary of Company, or (iv) transfer any of
its property or assets to Company or any other Subsidiary of Company.
117
119
7.3 INVESTMENTS; JOINT VENTURES.
Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, make or own any Investment in any Person, including
any Joint Venture, except:
(i) Company and its Subsidiaries may make and own
Investments in Cash Equivalents;
(ii) Company and its Subsidiaries may make and own Investments
in any Subsidiary of Company existing on the Closing Date;
(iii) Company and its Subsidiaries may make intercompany loans
to the extent permitted under subsection 7.1(iv);
(iv) Company and its Subsidiaries may make Consolidated
Capital Expenditures permitted by subsections 7.6 and 7.8;
(v) Company and its Subsidiaries may continue to own the
Investments owned by them and described in Schedule 7.3 annexed hereto;
(vi) Company may purchase Holdings common stock from officers
of Company who are terminating employment with Company and Company may
continue to own such stock; and
(vii) Company and its Subsidiaries may make and own other
Investments in an aggregate amount not to exceed at any time:
(A) if the Company or its Subsidiaries owns 100% of such
Investment, an amount equal to the sum of (y) of any equity contributed
to Company by AIP, funds controlled by American Industrial Partners,
other current shareholders of Holdings or management of Company in
connection with the Acquisition or employee incentive arrangements,
after the Closing Date plus (y) up to $25,000,000 of proceeds of newly
issued Subordinated Indebtedness plus (z) the amount of Consolidated
Excess Cash Flow which is not required to be prepaid under subsection
2.4B(iii)(f);
(B) if the Company owns less than 100% of such Investment
but equal to or more than 51% of such Investment, $10,000,000; and
(C) if the Company owns less than 51% of such Investment,
$7,500,000.
118
120
7.4 CONTINGENT OBLIGATIONS.
Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create or become or remain liable with respect to
any Contingent Obligation, except:
(i) Subsidiaries of Company may become and remain liable
with respect to Contingent Obligations in respect of the Subsidiary
Guaranty;
(ii) Company may become and remain liable with respect to
Contingent Obligations in respect of Letters of Credit and Company and
its Subsidiaries may become and remain liable with respect to
Contingent Obligations in respect of other letters of credit in an
aggregate amount at any time not to exceed $1,000,000;
(iii) Company may become and remain liable with respect to
Contingent Obligations under Hedge Agreements required under subsection
6.10;
(iv) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations under guarantees in the ordinary
course of business of the obligations of suppliers, customers,
franchisees and licensees of Company and its Subsidiaries in an
aggregate amount not to exceed at any time $2,000,000;
(v) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations in respect of any Indebtedness
of Company or any of its Domestic Subsidiaries permitted by
subsection 7.1;
(vi) Company and its Subsidiaries, as applicable, may remain
liable with respect to Contingent Obligations described in Schedule 7.4
annexed hereto;
(vii) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations in the nature of endorsements of
instruments and similar items for collection;
(viii) Company may become and remain liable with respect to
Contingent Obligations relating to purchases of Holdings common stock
permitted by subsection 7.3(vi); and
(ix) Company and its Subsidiaries may become and remain liable
with respect to other Contingent Obligations; provided that the maximum
aggregate liability, contingent or otherwise, of Company and its
Subsidiaries in respect of all such Contingent Obligations shall at no
time exceed $2,000,000.
119
121
7.5 RESTRICTED JUNIOR PAYMENTS.
Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, declare, order, pay, make or set apart any sum for
any Restricted Junior Payment; provided that any Subsidiary may pay dividends or
make other distributions to Company and provided, further, that, if no Event of
Default or Potential Event of Default has occurred and is continuing, Company
may (i) pay dividends to Holdings in an amount not to exceed the amount
necessary for Holdings to pay taxes imposed on Holdings when due, and pay
expenses of Holdings up to an amount not to exceed (a) Transaction Costs payable
by Holdings and (b) $200,000 per annum; (ii) purchase stock of Holdings as
contemplated by subsection 7.3(vi); (iii) pay management fees to AIP in an
amount not exceed $1.1 million per annum (the obligation to pay such fees to be
subordinated to the payment of all Obligations hereunder on terms satisfactory
to Agents); and (iv) make regularly scheduled payments of interest on
Subordinated Indebtedness.
7.6 FINANCIAL COVENANTS.
A. MINIMUM FIXED CHARGE COVERAGE RATIO. Company shall not permit the
ratio of (i) Consolidated EBITDA to (ii) Consolidated Fixed Charges for any
consecutive four-Fiscal Quarter period ending on the dates set forth below to be
less than the correlative ratio indicated:
MINIMUM
CONSOLIDATED FIXED
FISCAL QUARTER ENDING DATE CHARGE COVERAGE RATIO
-------------------------- ---------------------
March 31, 1998 1.70
June 30, 1998 1.70
September 30, 1998 1.75
December 31, 1998 1.75
March 31, 1999 1.80
June 30, 1999 1.80
September 30, 1999 1.80
December 31, 1999 1.80
March 31, 2000 and thereafter 1.90
June 30, 2000 1.90
September 30, 2000 1.90
December 1, 2000 and thereafter 2.00
B. MAXIMUM LEVERAGE RATIO. Company shall not permit the Consolidated
Leverage Ratio at the end of any of the periods set forth below to exceed the
correlative ratio indicated:
120
122
MAXIMUM CONSOLIDATED
PERIOD LEVERAGE RATIO
----------------------------------- ---------------------
January 1, 1998 - March 31, 1998 5.50
April 1, 1998 - June 30, 1998 5.25
July 1, 1998 - September 30, 1998 5.00
October 1, 1998 - December 31, 1998 4.90
January 1, 1999 - March 31, 1999 4.70
April 1, 1999 - June 30, 1999 4.60
July 1, 1999 - September 30, 1999 4.50
October 1, 1999 - December 31, 1999 4.40
January 1, 2000 - March 31, 2000 4.25
April 1, 2000 - June 30, 2000 4.25
July 1, 2000 - December 31, 2000 4.00
January 1, 2001 - March 31, 2001 4.00
April 1, 2001 - September 30, 2001 3.75
October 1, 2001 and thereafter 3.50
C. MINIMUM CONSOLIDATED EBITDA. Company shall not permit Consolidated
EBITDA for the consecutive four-Fiscal Quarter period ending on the date
indicated below to be less than the correlative amount indicated:
MINIMUM CONSOLIDATED
FISCAL QUARTER ENDING DATE EBITDA
----------------------------------- --------------------
$ in millions
March 31, 1998 30
June 30, 1998 30
September 30, 1998 30
December 31, 1998 30
March 31, 1999 32
June 30, 1999 32
September 30, 1999 33
December 31, 1999 33
March 31, 2000 34
June 30, 2000 34
September 30, 2000 35
December 31, 2000 35
March 31, 2001 39
June 30, 2001 39
September 30, 2001 39
thereafter 42
121
123
D. MINIMUM CONSOLIDATED NET WORTH. Company shall not permit Con
solidated Net Worth at the end of any period ending on the dates set forth below
to be less than the correlative amount indicated:
MINIMUM
CONSOLIDATED NET WORTH
PERIOD ENDING ($ in millions)
------------------------ ------------------------
March 31, 1998 45
June 30, 1998 45
September 30, 1998 45
December 31, 1998 45
March 31, 1999 45
June 30, 1999 45
September 30, 1999 45
December 31, 1999 45
March 31, 2000 50
June 30, 2000 50
September 30, 2000 50
December 31, 2000 50
March 31, 2001 and
thereafter 55
7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS.
Except as contemplated by the Acquisition Agreement, Holdings
and Company shall not, and shall not permit any of Company's Subsidiaries to,
alter the corporate, capital or legal structure of Holdings or Company or any of
Company's Subsidiaries, or enter into any transaction of merger or
consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease or sublease (as lessor or
sublessor), transfer or otherwise dispose of, in one transaction or a series of
transactions, all or substantially all of its business, property or assets, with
the exception of Inventory sold in the ordinary course of business, whether now
owned or hereafter acquired, or acquire by purchase or otherwise all or
substantially all the business, property or fixed assets of, or stock or other
evidence of beneficial ownership of, any Person or any division or line of
business of any Person, except:
(i) any Subsidiary of Company may be merged with or into
Company or any wholly-owned Subsidiary Guarantor, or be liquidated,
wound up or dissolved, or all or any part of its business, property or
assets may be conveyed, sold, leased, transferred or otherwise disposed
of, in one transaction or a series of transactions, to Company or any
wholly-owned Subsidiary Guarantor if no Potential Event of Default or
Event of Default shall have occurred and be continuing at the time of,
or
122
124
as a result of, such transaction; provided that, in the case of such a
merger, Company or such wholly-owned Subsidiary Guarantor shall be the
continuing or surviving corporation;
(ii) Company and its Subsidiaries may make Consolidated Capital
Expenditures permitted under subsection 7.8 and may make Investments
permitted under subsection 7.3;
(iii) Company and its Subsidiaries may dispose of obsolete,
worn out or surplus property in the ordinary course of business;
(iv) Company and its Subsidiaries may sell, license or
otherwise dispose of assets in transactions that do not constitute
Asset Sales; provided that the consideration received for such assets
shall be in an amount at least equal to the fair market value thereof;
and
(v) Company and its Subsidiaries may make Asset Sales if the
Net Asset Sale Proceeds are applied pursuant to section 2.4(B)(iii)(a);
provided that this clause (v) shall not apply to a sale of all or
substantially all of the assets of Company, Precision Engine Company
and any other asset the Net Asset Sale Proceeds of which exceed $10
million.
7.8 CONSOLIDATED CAPITAL EXPENDITURES.
Company shall not, and shall not permit its Subsidiaries to,
make or incur Consolidated Capital Expenditures in any Fiscal Year in an
aggregate amount exceeding $20,000,000 plus the amount of Consolidated Excess
Cash Flow which is not required to be prepaid under subsection 2.4B(iii)(f),
plus the amount of Net Asset Sale Proceeds not required to be prepaid under
subsection 2.4B(iii)(a), plus the amount of Net Insurance/Condemnation Proceeds
not required to be prepaid under subsection 2.4B(iii)(b), plus the amount of
equity contributed to Company by AIP after the Closing Date; provided that such
amount for any Fiscal Year shall be increased by an amount equal to the excess,
if any, of the amount permitted for the preceding Fiscal Year over the actual
amount of Consolidated Capital Expenditures for such previous Fiscal Year (but
such increase shall not exceed $5,000,000).
7.9 FISCAL YEAR
Company shall not change its Fiscal Year-end from December 31
of each calendar year.
123
125
7.10 SALES AND LEASE-BACKS.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (i) which Company or any of its Subsidiaries has sold or
transferred or is to sell or transfer to any other Person (other than Company or
any of its Subsidiaries) or (ii) which Company or any of its Subsidiaries
intends to use for substantially the same purpose as any other property which
has been or is to be sold or transferred by Company or any of its Subsidiaries
to any Person (other than Company or any of its Subsidiaries) in connection with
such lease; provided that Company and its Subsidiaries may become and remain
liable as lessee, guarantor or other surety with respect to any such lease with
respect to any such lease if and to the extent that Company or any of its
Subsidiaries would be permitted to enter into, and remain liable under, such
lease to the extent that the transaction would be permitted under subsection
7.1, assuming the sale and lease back transaction constituted Indebtedness in a
principal amount equal to the gross proceeds of the sale.
7.11 SALE OR DISCOUNT OF RECEIVABLES.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell with recourse, or discount or otherwise sell for
less than the face value thereof, any of its domestic notes or domestic accounts
receivable.
7.12 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
Except for payment of the management fee to AIP as described in
subsection 7.5, the transactions contemplated by the Acquisition Agreement and
the transactions described on Schedule 7.12, Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, enter into or permit
to exist any transaction (including the purchase, sale, lease or exchange of any
property or the rendering of any service) with any holder of 5% or more of any
class of equity Securities of Company or with any Affiliate of Company or of any
such holder, on terms that are less favorable to Company or that Subsidiary, as
the case may be, than those that might be obtained at the time from Persons who
are not such a holder or Affiliate; provided that the foregoing restriction
shall not apply to (i) any transaction between Company and any of its
wholly-owned Subsidiaries or between any of its wholly-owned Subsidiaries or
(ii) reasonable and customary fees paid to members of the Boards of Directors of
Company and its Subsidiaries.
124
126
7.13 DISPOSAL OF SUBSIDIARY STOCK.
Company shall not:
(i) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock or other equity
Securities of any of its Subsidiaries, except to qualify directors or
provide for ownership by foreign Persons, in either case if required by
applicable law; or
(ii) permit any of its Subsidiaries directly or indirectly to sell,
assign, pledge or otherwise encumber or dispose of any shares of capital
stock or other equity Securities of any of its Subsidiaries (including such
Subsidiary), except to Company, another Subsidiary of Company, or to qualify
directors or provide for ownership by foreign Persons, in either case if
required by applicable law.
Notwithstanding the foregoing, Company may sell 100% of the shares
of capital stock or other equity securities of any of its Subsidiaries so long
as such a sale is not prohibited by such section 6.2 or section 7.7 of this
Agreement. In the event Company does sell 100% of the shares of capital stock or
other equity securities of any of its Subsidiaries as permitted by this
subsection, Administrative Agent shall release all Collateral held in such
Subsidiary upon such sale and such Subsidiary shall be released from all its
obligations under any Loan Document.
7.14 CONDUCT OF BUSINESS.
From and after the Closing Date, Company shall not, and shall not
permit any of its Subsidiaries to, engage in any business other than
(i) businesses of the type engaged in by Company and its Subsidiaries on the
Closing Date and similar or related businesses and (ii) such other lines of
business as may be consented to by Requisite Lenders.
7.15 AMENDMENTS OF DOCUMENTS RELATING TO SUBORDINATED INDEBTEDNESS.
Company shall not, and shall not permit any of its Subsidiaries to,
amend or otherwise change the terms of any Subordinated Indebtedness, or make
any payment consistent with an amendment thereof or change thereto, if the
effect of such amendment or change is to increase the interest rate on such
Subordinated Indebtedness, change (to earlier dates) any dates upon which
payments of principal or interest are due thereon, change any event of default
or condition to an event of default with respect thereto (other than to
eliminate any such event of default or increase any grace period related
thereto), change the redemption, prepayment or defeasance provisions thereof,
change the subordination provisions thereof (or of any guaranty thereof), or
change any collateral therefor (other than to release such collateral), or if
the effect of such amendment or change, together with all other amendments or
changes made, is to increase materially the obligations of the obligor
125
127
thereunder or to confer any additional rights on the holders of such
Subordinated Indebtedness (or a trustee or other representative on their behalf)
which would be adverse to Company or Lenders.
SECTION 8. EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default")
shall occur:
8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Company to pay any installment of principal of any Loan
when due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Company to pay
within two Business Days when due any amount payable to an Issuing Lender in
reimbursement of any drawing under a Letter of Credit; or failure by Company to
pay any interest on any Loan or any fee or any other amount due under this
Agreement within five days after the date due; or
8.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of Company or any of its Subsidiaries to pay when due
any principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness (other than Indebtedness referred to in subsection
8.1) or Contingent Obligations in either an individual or an aggregate principal
amount of $5,000,000 or more, in each case beyond the end of any grace period
provided therefor; or (ii) breach or default by Company or any of its
Subsidiaries with respect to any other material term of (a) one or more items of
Indebtedness or Contingent Obligations in the individual or aggregate principal
amounts referred to in clause (i) above or (b) any loan agreement, mortgage,
indenture or other agreement relating to such item(s) of Indebtedness or
Contingent Obligation(s) if the effect of such breach or default is to cause, or
to permit the holder or holders of that Indebtedness or Contingent Obligation(s)
(or a trustee on behalf of such holder or holders) to cause, that Indebtedness
or Contingent Obligation(s) to become or be declared due and payable prior to
its stated maturity or the stated maturity of any underlying obligation, as the
case may be (upon the giving or receiving of notice, lapse of time, both, or
otherwise); or
8.3 BREACH OF CERTAIN COVENANTS.
Failure of Company to perform or comply with any term or condition
contained in subsection 2.5, 6.2 or 6.11 or Section 7 of this Agreement; or
126
128
8.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement made
by Company or any of its Subsidiaries in any Loan Document or in any statement
or certificate at any time given by Company or any of its Subsidiaries in
writing pursuant hereto or thereto or in connection herewith or therewith shall
be false in any material respect on the date as of which made; or
8.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
Any Loan Party shall default in the performance of or compliance
with any term contained in this Agreement or any of the other Loan Documents,
other than any such term referred to in any other subsection of this Section 8,
and such default shall not have been remedied or waived within 20 days after the
earlier of (i) an officer of Company or such Loan Party becoming aware of such
default or (ii) receipt by Company and such Loan Party of notice from any Agent
or any Lender of such default; or
8.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall enter a decree
or order for relief in respect of Holdings or any of its Subsidiaries in an
involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or (ii) an involuntary case shall be commenced
against Holdings or any of its Subsidiaries under the Bankruptcy Code or under
any other applicable bankruptcy, insolvency or similar law now or hereafter in
effect; or a decree or order of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over Holdings or any of its Subsidiaries, or
over all or a substantial part of its property, shall have been entered; or
there shall have occurred the involuntary appointment of an interim receiver,
trustee or other custodian of Holdings or any of its Subsidiaries for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of Holdings or any of its Subsidiaries, and any such event described in
this clause (ii) shall continue for 60 days unless dismissed, bonded or
discharged; or
8.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) Holdings or any of its Subsidiaries shall have an order for
relief entered with respect to it or commence a voluntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, or shall consent to the entry of an order for
relief in an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the
127
129
appointment of or taking possession by a receiver, trustee or other custodian
for all or a substantial part of its property; or Holdings or any of its
Subsidiaries shall make any assignment for the benefit of creditors; or
(ii) Holdings or any of its Subsidiaries shall be unable, or shall fail
generally, or shall admit in writing its inability, to pay its debts as such
debts become due; or the Board of Directors of Holdings or any of its
Subsidiaries (or any committee thereof) shall adopt any resolution or otherwise
authorize any action to approve any of the actions referred to in clause (i)
above or this clause (ii); or
8.8 JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar process
involving either in any individual case or in the aggregate at any time an
amount in excess of $5,000,000 (in either case not adequately covered by
insurance as to which a solvent and unaffiliated insurance company has
acknowledged coverage) shall be entered or filed against Company or any of its
Subsidiaries or any of their respective assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of 60 days; or
8.9 DISSOLUTION.
Any order, judgment or decree shall be entered against Company or
any of its Subsidiaries decreeing the dissolution or split up of Company or that
Subsidiary and such order shall remain undischarged or unstayed for a period in
excess of 30 days; or
8.10 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events which individually or in
the aggregate results in or might reasonably be expected to result in liability
of Company, any of its Subsidiaries or any of their respective ERISA Affiliates
in excess of $5,000,000 during the term of this Agreement; or there shall exist
an amount of the excess of the benefit liabilities (as defined in Section
4001(a)(16) of ERISA) over the current value of the assets, individually or in
the aggregate for all Pension Plans (excluding for purposes of such computation
any Pension Plans with respect to which assets exceed benefit liabilities),
which exceeds $5,000,000; or
8.11 CHANGE IN CONTROL.
Any Person or any two or more Persons (other than shareholders of
Holdings on the Closing Date) acting in concert shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Exchange Act), directly or indirectly, of Securities of
Company (or other Securities convertible into such Securities) representing 49%
or more of the combined voting power of all Securities of Company entitled to
vote in the election of directors, other than Securities having such power only
by reason of the happening of a contingency; or
128
130
8.12 INVALIDITY OF GUARANTIES; FAILURE OF SECURITY; REPUDIATION OF
OBLIGATIONS.
At any time after the execution and delivery thereof, (i) any
Guaranty for any reason, other than the satisfaction in full of all Obligations,
shall cease to be in full force and effect (other than in accordance with its
terms) or shall be declared to be null and void, (ii) any Collateral Document
shall cease to be in full force and effect (other than by reason of a release of
Collateral thereunder in accordance with the terms hereof or thereof, the
satisfaction in full of the Obligations or any other termination of such
Collateral Document in accordance with the terms hereof or thereof) or shall be
declared null and void, or Administrative Agent shall not have or shall cease to
have a valid and perfected First Priority Lien in any Collateral purported to be
covered thereby, in each case for any reason other than the failure of any Agent
or any Lender to take any action within its control, or (iii) any Loan Party
shall contest the validity or enforceability of any Loan Document in writing or
deny in writing that it has any further liability, including with respect to
future advances by Lenders, under any Loan Document to which it is a party:
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit), and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Company, and the obligation of each Lender to make any Loan, the
obligation of Administrative Agent to issue any Letter of Credit and the right
of any Lender to issue any Letter of Credit hereunder shall thereupon terminate,
and (ii) upon the occurrence and during the continuation of any other Event of
Default, Administrative Agent shall, upon the written request or with the
written consent of Requisite Lenders, by written notice to Company, declare all
or any portion of the amounts described in clauses (a) through (c) above to be,
and the same shall forthwith become, immediately due and payable, and the
obligation of each Lender to make any Loan, the obligation of Administrative
Agent to issue any Letter of Credit, the right of any Lender to issue any Letter
of Credit hereunder and the Commitments shall thereupon terminate; provided that
the foregoing shall not affect in any way the obligations of Lenders under
subsection 3.3C(i) or the obligations of Lenders to purchase participations in
any unpaid Swing Line Loans as provided in subsection 2.1A(iii).
Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Administrative Agent and applied as
follows:
If for any reason the aggregate amount delivered by Company as aforesaid is less
than the amount described in clause (b) above (the "AGGREGATE AVAILABLE
AMOUNT"), the aggregate amount so delivered shall be apportioned among all
outstanding Letters of Credit in
129
131
accordance with the ratio of the maximum amount available for drawing under each
such Letter of Credit (as to such Letter of Credit, the "MAXIMUM AVAILABLE
AMOUNT") to the Aggregate Available Amount. Upon any drawing under any
outstanding Letters of Credit in respect of which Company has delivered to
Administrative Agent any amounts described above, Administrative Agent shall
apply such amounts to reimburse the Issuing Lender for the amount of such
drawing. In the event of cancellation or expiration of any Letter of Credit in
respect of which Company has any amounts described above, or in the event of any
reduction in the Maximum Available Amount under such Letter of Credit,
Administrative Agent shall apply the amount then on deposit with it in respect
of such Letter of Credit (less, in the case of such a reduction, the Maximum
Available Amount under such Letter of Credit immediately after such reduction)
first, to the extent of any excess, to the cash collateralization of any
outstanding Letters of Credit in respect of which Company has failed to pay all
or a portion of the amounts described above (such cash collateralization to be
apportioned among all such Letters of Credit in the manner described above),
second, to the extent of any further excess, to the payment of any other
outstanding Obligations in such order as Administrative Agent shall elect, and
third, to the extent of any further excess, to the payment to whomsoever shall
be lawfully entitled to receive such funds.
Notwithstanding anything contained in the second preceding
paragraph, if at any time within 60 days after an acceleration of the Loans
pursuant to clause (ii) of such paragraph Company shall pay all arrears of
interest and all payments on account of principal which shall have become due
otherwise than as a result of such acceleration (with interest on principal and,
to the extent permitted by law, on overdue interest, at the rates specified in
this Agreement) and all Events of Default and Potential Events of Default (other
than non-payment of the principal of and accrued interest on the Loans, in each
case which is due and payable solely by virtue of acceleration) shall be
remedied or waived pursuant to subsection 10.6, then Requisite Lenders, by
written notice to Company, may at their option rescind and annul such
acceleration and its consequences; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair any right
consequent thereon. The provisions of this paragraph are intended merely to bind
Lenders to a decision which may be made at the election of Requisite Lenders and
are not intended, directly or indirectly, to benefit Company, and such
provisions shall not at any time be construed so as to grant Company the right
to require Lenders to rescind or annul any acceleration hereunder or to preclude
Administrative Agent or Lenders from exercising any of the rights or remedies
available to them under any of the Loan Documents, even if the conditions set
forth in this paragraph are met.
130
132
SECTION 9. THE AGENTS
9.1 APPOINTMENT.
A. APPOINTMENT OF AGENTS. FNBC is hereby appointed Administrative Agent here
under and under the other Loan Documents and each Lender hereby authorizes
Administrative Agent to act as its agent in accordance with the terms of this
Agreement and the other Loan Documents. DLJ is hereby appointed Syndication
Agent hereunder and under the other Loan Documents and each Lender hereby
authorizes Syndication Agent to act as its agent in accordance with the terms of
this Agreement and the other Loan Documents. Each of Syndication Agent and
Administrative Agent agrees to act upon the express conditions contained in this
Agreement and the other Loan Documents, as applicable. The provisions of this
Section 9 are solely for the benefit of each of Syndication Agent and
Administrative Agent, and Lenders and Company shall have no rights as a third
party beneficiary of any of the provisions thereof. In performing its functions
and duties under this Agreement, each of Syndication Agent and Administrative
Agent shall act solely as an agent of Lenders and does not assume and shall not
be deemed to have assumed any obligation towards or relationship of agency or
trust with or for Company or any of its Subsidiaries.
B. APPOINTMENT OF SUPPLEMENTAL COLLATERAL AGENTS. It is the purpose of this
Agreement and the other Loan Documents that there shall be no violation of any
law of any jurisdiction denying or restricting the right of banking corporations
or associations to transact business as agent or trustee in such jurisdiction.
It is recognized that in case of litigation under this Agreement or any of the
other Loan Documents, and in particular in case of the enforcement of any of the
Loan Documents, or in case Administrative Agent deems that by reason of any
present or future law of any jurisdiction it may not exercise any of the rights,
powers or remedies granted herein or in any of the other Loan Documents or take
any other action which may be desirable or necessary in connection therewith, it
may be necessary that Administrative Agent appoint an additional individual or
institution as a separate trustee, co-trustee, collateral agent or collateral
co-agent (any such additional individual or institution being referred to herein
individually as a "SUPPLEMENTAL COLLATERAL AGENT" and collectively as
"SUPPLEMENTAL COLLATERAL AGENTS").
In the event that Administrative Agent appoints a Supplemental
Collateral Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or intended by this Agreement or any of the
other Loan Documents to be exercised by or vested in or conveyed to
Administrative Agent with respect to such Collateral shall be exercisable by and
vest in such Supplemental Collateral Agent to the extent, and only to the
extent, necessary to enable such Supplemental Collateral Agent to exercise such
rights, powers and privileges with respect to such Collateral and to perform
such duties with respect to such Collateral, and every covenant and obligation
contained in the Loan Documents and necessary to the exercise or performance
thereof by such Supplemental
131
133
Collateral Agent shall run to and be enforceable by either Administrative Agent
or such Supplemental Collateral Agent, and (ii) the provisions of this Section 9
and of subsections 10.2 and 10.3 that refer to Administrative Agent shall inure
to the benefit of such Supplemental Collateral Agent and all references therein
to Administrative Agent shall be deemed to be references to Administrative Agent
and/or such Supplemental Collateral Agent, as the context may require.
Should any instrument in writing from Company or any other Loan
Party be required by any Supplemental Collateral Agent so appointed by
Administrative Agent for more fully and certainly vesting in and confirming to
him or it such rights, powers, privileges and duties, Company shall, or shall
cause such Loan Party to, execute, acknowledge and deliver any and all such
instruments promptly upon request by Administrative Agent. In case any
Supplemental Collateral Agent, or a successor thereto, shall die, become
incapable of acting, resign or be removed, all the rights, powers, privileges
and duties of such Supplemental Collateral Agent, to the extent permitted by
law, shall vest in and be exercised by Administrative Agent until the
appointment of a new Supplemental Collateral Agent.
9.2 POWERS AND DUTIES; GENERAL IMMUNITY.
A. POWERS; DUTIES SPECIFIED. Each Lender irrevocably authorizes each
Agent to take such action on such Lender's behalf and to exercise such powers,
rights and remedies hereunder and under the other Loan Documents as are
specifically delegated or granted to such Agent by the terms hereof and thereof,
together with such powers, rights and remedies as are reasonably incidental
thereto. Each Agent shall have only those duties and responsibilities that are
expressly specified in this Agreement and the other Loan Documents. Each Agent
may exercise such powers, rights and remedies and perform such duties by or
through its agents or employees. No Agent shall have, by reason of this
Agreement or any of the other Loan Documents, a fiduciary relationship in
respect of any Lender; and nothing in this Agreement or any of the other Loan
Documents, expressed or implied, is intended to or shall be so construed as to
impose upon any Agent any obligations in respect of this Agreement or any of the
other Loan Documents except as expressly set forth herein or therein.
B. NO RESPONSIBILITY FOR CERTAIN MATTERS. No Agent shall be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility, sufficiency, creation, perfection or
priority of this Agreement or any other Loan Document, or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statements or in any financial or other statements,
instruments, reports or certificates or any other documents furnished or made
by such Agent to Lenders or by or on behalf of Company to such Agent or any
Lender in connection with the Loan Documents and the transactions contemplated
thereby or for the financial condition or business affairs of Company or any
other Person liable for the
132
134
payment of any Obligations, nor shall such Agent be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Loan Documents or as
to the use of the proceeds of the Loans or the use of the Letters of Credit or
as to the existence or possible existence of any Event of Default or Potential
Event of Default. Anything contained in this Agreement to the contrary
notwithstanding, Administrative Agent shall not have any liability arising from
confirmations of the amount of outstanding Loans or the Letter of Credit Usage
or the component amounts thereof.
C. EXCULPATORY PROVISIONS. Neither of the Agents nor any of their respective
officers, directors, employees or agents shall be liable to Lenders for any
action taken or omitted to be taken by any such Agent under or in connection
with any of the Loan Documents except to the extent caused by such Agent's gross
negligence or willful misconduct. Each Agent shall be entitled to refrain from
any act or the taking of any action (including the failure to take an action) in
connection with this Agreement or any of the other Loan Documents or from the
exercise of any power, discretion or authority vested in it hereunder or
thereunder unless and until such Agent shall have received instructions in
respect thereof from Requisite Lenders (or such other Lenders as may be required
to give such instructions under subsection 10.6) and, upon receipt of such
instructions from Requisite Lenders (or such other Lenders, as the case may be),
such Agent shall be entitled to act or (where so instructed) refrain from
acting, or to exercise such power, discretion or authority, in accordance with
such instructions. Without prejudice to the generality of the foregoing,
(i) each Agent shall be entitled to rely, and shall be fully protected in
relying, upon any communication, instrument or document believed by it to be
genuine and correct and to have been signed or sent by the proper person or
persons, and shall be entitled to rely and shall be protected in relying on
opinions and judgments of attorneys (who may be attorneys for Company and its
Subsidiaries), accountants, experts and other professional advisors selected by
it; and (ii) no Lender shall have any right of action whatsoever against any
Agent as a result of such Agent acting or (where so instructed) refraining from
acting under this Agreement or any of the other Loan Documents in accordance
with the instructions of Requisite Lenders (or such other Lenders as may be
required to give such instructions under subsection 10.6).
D. AGENTS ENTITLED TO ACT AS LENDER. The agency hereby created shall in no
way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its par ticipation in the Loans and the Letters of Credit, each
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" or "Lenders" or any similar
term shall, unless the context clearly otherwise indicates, include such Agent
in its individual capacity. Any Agent and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of banking, trust,
financial advisory or other business with Company or any of its Affiliates as if
it were not performing the duties specified
133
135
herein, and may accept fees and other consideration from Company for services in
connection with this Agreement and otherwise without having to account for the
same to Lenders.
9.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
CREDIT WORTHINESS.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Company and its Subsidiaries. No Agent
shall have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of Lenders
or to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter, and no Agent shall have any responsibility with
respect to the accuracy of or the completeness of any information provided to
Lenders.
9.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally agrees
to indemnify each Agent, to the extent that such Agent shall not have been
reimbursed by Company, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including counsel fees and disbursements) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against such
Agent in exercising its powers, rights and remedies or performing its duties
hereunder or under the other Loan Documents or otherwise in its capacity as
Administrative Agent or Syndication Agent, as the case may be, in any way
relating to or arising out of this Agreement or the other Loan Documents;
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from any Agent's gross negligence or willful
misconduct. If any indemnity furnished to such Agent for any purpose shall, in
the opinion of such Agent, be insufficient or become impaired, such Agent may
call for additional indemnity and cease, or not commence, to do the acts indem
nified against until such additional indemnity is furnished.
9.5 SUCCESSOR AGENTS AND SWING LINE LENDER.
A. SUCCESSOR AGENTS. The Syndication Agent may resign at any time
upon one Business Days' prior notice thereof to Company and Administrative
Agent. Administrative Agent may resign at any time by giving 30 days' prior
written notice thereof to Syndication Agent, Lenders and Company, and
Administrative Agent may be removed at any time with or without cause by an
instrument or concurrent instruments in writing delivered to Company and
Administrative Agent and signed by Requisite Lenders. Upon
134
136
any such notice of resignation of Syndication Agent or Administrative Agent or
any such removal of Administrative Agent, Requisite Lenders shall have the
right, upon five Business Days' notice to Company, and subject to consent of
Company (which shall not unreasonably be withheld), to appoint a successor
Syndication Agent or Administrative Agent, as the case may be. If for any reason
Requisite Lenders cannot agree on a successor Administrative Agent or successor
Syndication Agent, the resigning Administrative Agent or Syndication Agent shall
have the right to designate a successor Administrative Agent or Syndication
Agent, respectively, after consulting with Company. Upon the acceptance of any
appointment as Administrative Agent or Syndication Agent, as the case may be,
hereunder by a successor Administrative Agent or Syndication Agent, as the case
may be, that successor Administrative Agent or Syndication Agent, as the case
may be, shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring or removed Administrative Agent or
Syndication Agent, as the case may be, and the retiring or removed
Administrative Agent or Syndication Agent, as the case may be, shall be
discharged from its duties and obligations under this Agreement. After any
retiring or removed Administrative Agent's or Syndication Agent's resignation or
removal hereunder as Administrative Agent or Syndication Agent, as the case may
be, the provisions of this Section 9 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Agent or
Syndication Agent, as the case may be, under this Agreement.
B. SUCCESSOR SWING LINE LENDER. Any resignation or removal of
Administrative Agent pursuant to subsection 9.5A shall also constitute the
resignation or removal of FNBC or its successor as Swing Line Lender, and any
successor Administrative Agent appointed pursuant to subsection 9.5A shall, upon
its acceptance of such appointment, become the successor Swing Line Lender for
all purposes hereunder. In such event (i) Company shall prepay any outstanding
Swing Line Loans made by the retiring or removed Administrative Agent in its
capacity as Swing Line Lender, (ii) upon such prepayment, the retiring or
removed Administrative Agent and Swing Line Lender shall surrender the Swing
Line Note held by it to Company for cancellation, and (iii) Company shall issue
a new Swing Line Note to the successor Administrative Agent and Swing Line
Lender substantially in the form of Exhibit VI annexed hereto, in the principal
amount of the Swing Line Loan Commitment then in effect and with other
appropriate insertions.
9.6 COLLATERAL DOCUMENTS AND GUARANTIES.
Each Lender hereby further authorizes Administrative Agent, on
behalf of and for the benefit of Lenders, to enter into each Collateral Document
as secured party and to be the agent for and representative of Lenders under
each Guaranty, and each Lender agrees to be bound by the terms of each
Collateral Document and Guaranty; provided that Administrative Agent shall not
(i) enter into or consent to any material amendment, modification, termination
or waiver of any provision contained in any Collateral Document or Guaranty or
(ii) release any Collateral (except as otherwise expressly permitted or
135
137
required pursuant to the terms of this Agreement or the applicable Collateral
Document), in each case without the prior consent of Requisite Lenders (or, if
required pursuant to subsection 10.6, all Lenders); provided further, however,
that, without further written consent or authorization from Lenders,
Administrative Agent may execute any documents or instruments necessary to
(a) release any Lien encumbering any item of Collateral that is the subject of a
sale or other disposition of assets permitted by this Agreement or to which
Requisite Lenders have otherwise consented or (b) release any Subsidiary
Guarantor from the Subsidiary Guaranty if all of the capital stock of such
Subsidiary Guarantor is sold to any Person (other than an Affiliate of Company)
pursuant to a sale or other disposition permitted hereunder or to which
Requisite Lenders have otherwise consented. Anything contained in any of the
Loan Documents to the contrary notwithstanding, Company, each Agent and each
Lender hereby agree that (X) no Lender shall have any right individually to
realize upon any of the Collateral under any Collateral Document or to enforce
any Guaranty, it being understood and agreed that all rights and remedies under
the Collateral Documents and the Guaranties may be exercised solely by
Administrative Agent for the benefit of Lenders in accordance with the terms
thereof, and (Y) in the event of a foreclosure by Administrative Agent on any of
the Collateral pursuant to a public or private sale, any Agent or any Lender may
be the purchaser of any or all of such Collateral at any such sale and
Administrative Agent, as agent for and representative of Lenders (but not any
Lender or Lenders in its or their respective individual capacities unless
Requisite Lenders shall otherwise agree in writing) shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Obligations as a credit on account of the purchase price for
any collateral payable by Administrative Agent at such sale.
SECTION 10. MISCELLANEOUS
10.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS OF CREDIT.
A. GENERAL. Subject to subsection 10.1B, each Lender shall have the right at
any time to (i) sell, assign or transfer to any Eligible Assignee, or (ii) sell
participations to any Person in, all or any part of its Commitments or any Loan
or Loans made by it or its Letters of Credit or participations therein or any
other interest herein or in any other Obligations owed to it; provided that no
such sale, assignment, transfer or participation shall, without the consent of
Company, require Company to file a registration statement with the Securities
and Exchange Commission or apply to qualify such sale, assignment, transfer or
participation under the securities laws of any state; provided, further that no
such sale, assignment, transfer or participation of any Letter of Credit or any
participation therein may be made separately from a sale, assignment, transfer
or participation of a corresponding interest in the Revolving Loan Commitment
and the Revolving Loans of the Revolving Lender effecting such sale, assignment,
transfer or participation; and provided, urther that, anything contained herein
to the contrary notwithstanding, the Swing Line
136
138
Loan Commitment and the Swing Line Loans of Swing Line Lender may not be sold,
assigned or transferred as described in clause (i) above to any Person other
than a successor Administrative Agent and Swing Line Lender to the extent
contemplated by subsection 9.5. Except as otherwise provided in this subsection
10.1, no Lender shall, as between Company and such Lender, be relieved of any of
its obligations hereunder as a result of any sale, assignment or transfer of, or
any granting of participations in, all or any part of its Commitments or the
Loans, the Letters of Credit or participations therein, or the other Obligations
owed to such Lender.
B. ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Each Commitment, Loan, Letter
of Credit or participation therein, or other Obligation may (a) be assigned
in any amount to another Lender, or to an Affiliate of the assigning Lender
or another Lender, with the giving of notice to Company and Administrative
Agent or (b) be assigned in an aggregate amount of not less than $2,000,000
(or such lesser amount as shall constitute the aggregate amount of the
Commitments, Loans, Letters of Credit and participations therein, and other
Obligations of the assigning Lender or as may be consented to by Company
and Agents) to any other Eligible Assignee with the consent of Company
(which consent shall only be required so long as no Event of Default has
occurred and is continuing) and, with respect to all Lenders other than
DLJ, Syndication Agent and Administrative Agent (which consent of Company,
Syndication Agent and Administrative Agent shall not be unreasonably
withheld or delayed); provided that any such assignment in accordance with
either clause (a) or (b) above shall effect a pro rata assignment (based on
the respective principal amounts thereof then outstanding or in effect) of
the (i) Tranche A Term Loan Commitment or the Tranche A Term Loan, (ii) the
Tranche B Term Loan Commitment or the Tranche B Term Loan and (iii) the
Revolving Loan Commitment and the Revolving Loans in each case of the
assigning Lender; provided, further that the minimum aggregate amount
specified in clause (b) above shall not apply to the Commitment, Loans,
Letters of Credit or participations therein or other Obligations of DLJ. To
the extent of any such assignment in accordance with either clause (a) or
(b) above, the assigning Lender shall be relieved of its obligations with
respect to its Commitments, Loans, Letters of Credit or participations
therein, or other Obligations or the portion thereof so assigned. The
parties to each such assignment shall execute and deliver to Administrative
Agent, for its acceptance, an Assignment Agreement, together with, if the
assignee is not a Lender prior to such assignment, a processing fee of
$3,000 (to be assessed at Administrative Agent's election) and such forms,
certificates or other evidence, if any, with respect to United States
federal income tax withholding matters as the assignee under such
Assignment Agreement may be required to deliver to Administrative Agent
pursuant to subsection 2.7B(iii)(a). Upon such execution, delivery and
acceptance from and after the effective date specified in such Assignment
Agreement, (y) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned
137
139
to it pursuant to such Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and (z) the assigning Lender thereunder
shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment Agreement, relinquish its rights
(other than any rights which survive the termination of this Agreement
under subsection 10.9B) and be released from its obligations under this
Agreement (and, in the case of an Assignment Agreement covering all or the
remaining portion of an assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto; provided
that, anything contained in any of the Loan Documents to the contrary
notwithstanding, if such Lender is the Issuing Lender with respect to any
outstanding Letters of Credit such Lender shall continue to have all rights
and obligations of an Issuing Lender with respect to such Letters of Credit
until the cancellation or expiration of such Letters of Credit and the
reimbursement of any amounts drawn thereunder). The Commitments hereunder
shall be modified to reflect the Commitment of such assignee and any
remaining Commitment of such assigning Lender and, if any such assignment
occurs after the initial issuance of the Notes hereunder, the assigning
Lender shall, upon the effectiveness of such assignment or as promptly
thereafter as practicable, surrender its applicable Notes to Administrative
Agent for cancellation, and thereupon new Notes shall be issued to the
assignee and to the assigning Lender, substantially in the form of Exhibit
IV-A, Exhibit IV-B or Exhibit V annexed hereto, as the case may be, with
appropriate insertions, to reflect the new Commitments and/or outstanding
Term Loans, as the case may be, of the assignee and the assigning Lender.
(ii) Acceptance by Administrative Agent. Upon its receipt of an
Assignment Agreement executed by an assigning Lender and an assignee
representing that it is an Eligible Assignee, together with the processing
fee referred to in subsection 10.1B(i) and any forms, certificates or other
evidence with respect to United States federal income tax withholding
matters that such assignee may be required to deliver to Administrative
Agent pursuant to subsection 2.7B(iii)(a), Administrative Agent shall, if
Administrative Agent and Company have consented to the assignment evidenced
thereby (in each case to the extent such consent is required pursuant to
subsection 10.1B(i)), (a) accept such Assignment Agreement by executing a
counterpart thereof as provided therein (which acceptance shall evidence any
required consent of Administrative Agent to such assignment) and (b) give
prompt notice thereof to Company. Administrative Agent shall maintain a copy
of each Assignment Agreement delivered to and accepted by it as provided in
this subsection 10.1B(ii).
C. PARTICIPATIONS. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final maturity date of
any Loan allocated to such participation or (ii) a reduction of the principal
amount of or the rate of interest payable on any Loan allocated to such
participation, and all amounts payable by Company hereunder (including amounts
payable
138
140
to such Lender pursuant to subsections 2.6D, 2.7 and 3.6) shall be determined as
if such Lender had not sold such participation. Company and each Lender hereby
acknowledge and agree that, solely for purposes of subsections 10.4 and 10.5,
(a) any participation will give rise to a direct obligation of Company to the
participant and (b) the participant shall be considered to be a "Lender".
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the assignments and
participations permitted under the foregoing provisions of this subsection 10.1,
any Lender may assign and pledge all or any portion of its Loans, the other
Obligations owed to such Lender, and its Notes to any Federal Reserve Bank as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such Federal Reserve
Bank; provided that (i) no Lender shall, as between Company and such Lender, be
relieved of any of its obligations hereunder as a result of any such assignment
and pledge and (ii) in no event shall such Federal Reserve Bank be considered to
be a "Lender" or be entitled to require the assigning Lender to take or omit to
take any action hereunder.
E. INFORMATION. Each Lender may furnish any information concerning Company
and its Subsidiaries in the possession of that Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject to subsection 10.19.
F. REPRESENTATIONS OF LENDERS. Each Lender listed on the signature pages
hereof hereby represents and warrants (i) that it is an Eligible Assignee
described in clause (A) of the definition thereof; (ii) that it has experience
and expertise in the making of loans such as the Loans; and (iii) that it will
make its Loans for its own account in the ordinary course of its business and
without a view to distribution of such Loans within the meaning of the
Securities Act or the Exchange Act or other federal securities laws (it being
understood that, subject to the provisions of this subsection 10.1, the
disposition of such Loans or any interests therein shall at all times remain
within its exclusive control). Each Lender that becomes a party hereto pursuant
to an Assignment Agreement shall be deemed to agree that the representations and
warranties of such Lender contained in Section 2(c) of such Assignment Agreement
are incorporated herein by this reference.
10.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual and reasonable
out-of-pocket costs and expenses of preparation of the Loan Documents and any
consents, amendments, waivers or other modifications thereto; (ii) all the costs
of furnishing all opinions by counsel for Company (including any opinions
requested by Agents or Lenders as to any legal matters arising hereunder and
including fees and expenses of local counsel retained by Company) and of
Company's performance of and compliance with all agreements and conditions on
its part to be performed or complied with under this Agreement and the other
Loan Documents
139
141
including with respect to confirming compliance with environmental, insurance
and solvency requirements; (iii) the reasonable fees, expenses and disbursements
of counsel to Arranger, Syndication Agent and Administrative Agent (including
allocated costs of internal counsel) in connection with the negotiation,
preparation, execution and administra tion of the Loan Documents and any
consents, amendments, waivers or other modifications thereto and any other
documents or matters requested by Company; provided that Company shall only be
obligated to pay the reasonable fees and expenses of O'Melveny & Myers LLP, and
no other counsel retained by any Agent or any Lender, in connection with the
negotiation and preparation of the Loan Documents; (iv) all the actual costs and
reasonable expenses of creating and perfecting Liens in favor of Administrative
Agent on behalf of Lenders pursuant to any Collateral Document, including filing
and recording fees, expenses and taxes, stamp or documentary taxes, search fees,
title insurance premiums, and reasonable fees, expenses and disbursements of
counsel to each of Syndication Agent and Administrative Agent and of counsel
providing any opinions that Syndication Agent, Administrative Agent or Requisite
Lenders may request in respect of the Collateral Documents or the Liens created
pursuant thereto; (v) all the actual out of pocket costs and reasonable expenses
(including the reasonable fees, expenses and disbursements of any auditors,
accountants or appraisers and any environmental or other consultants, advisors
and agents employed or retained by Syndication Agent, Administrative Agent or
their respective counsel) of obtaining and reviewing any environmental audits or
reports provided for under subsection 4.1F or 6.9B(viii) and any audits or
reports provided for under subsection 6.5A with respect to Inventory and
Accounts Receivable of Company and its Subsidiaries; (vi) all reasonable costs
in connection with the custody or preservation of any of the Collateral;
(vii) all other actual and reasonable costs and out of pocket expenses incurred
by Arranger, Syndication Agent or Administrative Agent in connection with the
syndication of the Commitments and the negotiation, preparation and execution of
the Loan Documents and any consents, amendments, waivers or other modifications
thereto and the transactions contemplated thereby; and (viii) after the
occurrence of an Event of Default, all costs and out of pocket expenses,
including reasonable attorneys' fees (including allocated costs of internal
counsel) and costs of settlement, incurred by Agents and Lenders in enforcing
any Obligations of or in collecting any payments due from any Loan Party
hereunder or under the other Loan Documents by reason of such Event of Default
(including in connection with the sale of, collection from, or other realization
upon any of the Collateral or the enforcement of the Guaranties or in connection
with any refinancing or restructuring of the credit arrangements provided under
this Agreement in the nature of a "work-out" or pursuant to any insolvency or
bankruptcy proceedings).
10.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection 10.2,
whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless Arranger, Agents and Lenders, and the officers,
directors, trustees, employees, agents and affiliates of
140
142
Arranger, Agents and Lenders (collectively called the "INDEMNITEES"), from and
against any and all Indemnified Liabilities (as hereinafter defined); provided
that Company shall not have any obligation to any Indemnitee hereunder with
respect to any Indemnified Liabilities to the extent such Indemnified
Liabilities arise from the gross negligence or willful misconduct of that
Indemnitee as determined by a final judgment of a court of competent
jurisdiction.
As used herein, "INDEMNIFIED LIABILITIES" means, collectively, any
and all liabilities, obligations, losses, damages (including natural resource
damages), penalties, actions, judgments, suits, claims (including Environmental
Claims), costs (including the costs of any investigation, study, sampling,
testing, abatement, cleanup, removal, remediation or other response action
necessary to remove, remediate, clean up or abate any Hazardous Materials
Activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect
or consequential and whether based on any federal, state or foreign laws,
statutes, rules or regulations (including securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of (i) this Agreement, the other Loan Documents or the Related
Agreements or the transactions contemplated hereby or thereby (including
Lenders' agreement to make the Loans hereunder or the use or intended use of the
proceeds thereof or the issuance of Letters of Credit hereunder or the use or
intended use of any thereof, or any enforcement of any of the Loan Documents
(including any sale of, collection from, or other realization upon any of the
Collateral or the enforcement of the Guaranties), (ii) the statements contained
in the commitment letter delivered by any Lender to Company with respect
thereto, or (iii) any Environmental Claim or any Hazardous Materials Activity
relating to or arising from, directly or indirectly, any past or present
activity, operation, land ownership, or practice of Company or any of its
Subsidiaries; provided that Indemnified Liabilities shall not include
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses or disbursements relating to information provided in
writing by any Agent or any Lender.
To the extent that the undertakings to defend, indemnify, pay and
hold harmless set forth in this subsection 10.3 may be unenforceable in whole or
in part because they are violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
141
143
10.4 SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, upon the occurrence and
during the continuation of any Event of Default, each Lender is hereby
authorized by Company at any time or from time to time, without notice to
Company or to any other Person, any such notice being hereby expressly waived,
to set off and to appropriate and to apply any and all deposits (general or
special, including Indebtedness evidenced by certificates of deposit, whether
matured or unmatured, but not including trust accounts) and any other
Indebtedness at any time held or owing by that Lender to or for the credit or
the account of Company against and on account of the obligations and liabilities
of Company to that Lender under this Agreement, the Letters of Credit and
participations therein and the other Loan Documents, including all claims of any
nature or description arising out of or connected with this Agreement, the
Letters of Credit and participations therein or any other Loan Document,
irrespective of whether or not (i) that Lender shall have made any demand
hereunder or (ii) the principal of or the interest on the Loans or any amounts
in respect of the Letters of Credit or any other amounts due hereunder shall
have become due and payable pursuant to Section 8 and although said obligations
and liabilities, or any of them, may be contingent or unmatured. Company hereby
further grants to each Agent and each Lender a security interest in all deposits
and accounts maintained with such Agent or such Lender as security for the
Obligations.
10.5 RATABLE SHARING.
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "AGGREGATE
AMOUNTS DUE" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (i) notify
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the Aggregate
Amounts Due to the other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all Lenders in proportion to the Aggregate
Amounts Due to them; provided that if all or part of such proportionately
greater payment received by such purchasing Lender is thereafter recovered from
such Lender upon the bankruptcy or
142
144
reorganization of Company or otherwise, those purchases shall be rescinded and
the purchase prices paid for such participations shall be returned to such
purchasing Lender ratably to the extent of such recovery, but without interest.
Company expressly consents to the foregoing arrangement and agrees that any
holder of a participation so purchased may exercise any and all rights of
banker's lien, set-off or counterclaim with respect to any and all monies owing
by Company to that holder with respect thereto as fully as if that holder were
owed the amount of the participation held by that holder.
10.6 AMENDMENTS AND WAIVERS.
No amendment, modification, termination or waiver of any provision
of this Agreement or of the Notes, and no consent to any departure by Company
therefrom, shall in any event be effective without the written concurrence of
Requisite Lenders; provided that any such amendment, modification, termination,
waiver or consent which: increases the amount of any of the Commitments or
reduces the principal amount of any of the Loans; changes in any manner the
definition of "Pro Rata Share" or the definition of "Requisite Lenders"; changes
in any manner any provision of this Agreement which, by its terms, expressly
requires the approval or concurrence of all Lenders; postpones the scheduled
final maturity date (but not the date of any scheduled installment of principal)
of any of the Loans; postpones the date on which any interest or any fees are
payable; decreases the interest rate borne by any of the Loans (other than any
waiver of any increase in the interest rate applicable to any of the Loans
pursuant to subsection 2.2E) or the amount of any fees payable hereunder;
increases the maximum duration of Interest Periods permitted hereunder; reduces
the amount or postpones the due date of any amount payable in respect of, or
extends the required expiration date of, any Letter of Credit; changes in any
manner the obligations of Lenders relating to the purchase of participations in
Letters of Credit; releases any Lien granted in favor of Administrative Agent
with respect to 25% or more in aggregate fair market value of the Collateral,
other than in accordance with the Loan Documents; releases any Subsidiary
Guarantor or Holdings from its obligations under the Subsidiary Guaranty or the
Holdings Guaranty respectively other than in accordance with the terms of the
Loan Documents; or changes in any manner the provisions contained in subsection
8.1, or this subsection 10.6 shall be effective only if evidenced by a writing
signed by or on behalf of all Lenders; provided, further, that if any matter
described in the foregoing proviso relates only to a Revolving Loan, a Tranche A
Term Loan or a Tranche B Term Loan the approval of all Revolving Lenders,
Tranche A Term Loan Lenders or Tranche B Term Loan Lenders, respectively, shall
be sufficient; provided, further, that any amendment or modification of the
terms Consolidated Leverage Ratio Consolidated Total Debt and Consolidated
EBITDA, including insofar as any such change may affect the amount of interest
or fees payable hereunder, shall be effective if evidenced by a writing signed
by Requisite Lenders; and provided further that any amendment, modification or
waiver of subsection 2.4B(iii)(a)-(g) shall be effective if evidenced by a
writing signed by Lenders holding 66 2/3% of the sum of the Tranche A Term Loan
Exposure of all Lenders plus the Tranche B Term Loan Exposure of all Lenders
plus the Revolving Loan Exposure
143
145
of all Lenders. In addition, (i) any amendment, modification, termination or
waiver of any of the provisions contained in Section 4 shall be effective only
if evidenced by a writing signed by or on behalf of Agents and Requisite
Lenders, (ii) no amendment, modification, termination or waiver of any provision
of any Note shall be effective without the written concurrence of the Lender
which is the holder of that Note, (iii) no amendment, modification, termination
or waiver of any Letter of Credit or any provision thereof shall be effective
without the written concurrence of Issuing Lender and Requisite Lenders, (iv) no
amendment, modification, termination or waiver of any provision of subsection
2.1A(iii) or of any other provision of this Agreement relating to the Swing Line
Loan Commitment or the Swing Line Loans shall be effective without the written
concurrence of Swing Line Lender, and (v) no amendment, modification,
termination or waiver of any provision of Section 9 or of any other provision of
this Agreement which, by its terms, expressly requires the approval or
concurrence of Agents shall be effective without the written concurrence of
Agents. Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given. No
notice to or demand on Company in any case shall entitle Company to any other or
further notice or demand in similar or other circumstances. Any amendment,
modification, termination, waiver or consent effected in accordance with this
subsection 10.6 shall be binding upon each Lender at the time outstanding, each
future Lender and, if signed by Company, on Company.
10.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so that if
a particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
10.8 NOTICES.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided that notices to Agents shall not be effective
until received. For the purposes hereof, the address of each party hereto shall
be as set forth under such party's name on the signature pages hereof or (i) as
to Company and Agents, such other address as shall be designated by such Person
in a written notice delivered to the other parties hereto and (ii) as to each
other party, such other address as shall be designated by such party in a
written notice delivered to Administrative Agent.
144
146
10.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to
the contrary, the agreements of Company set forth in subsections 2.6D, 2.7,
3.5A, 3.6, 5.12, 10.2 and 10.3 and the agreements of Lenders set forth in
subsections 9.2C, 9.4, 10.5 and 10.19 shall survive the payment of the Loans,
the cancellation or expiration of the Letters of Credit and the reimbursement of
any amounts drawn thereunder, and the termination of this Agreement.
10.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of any Agent or any Lender in the
exercise of any power, right or privilege hereunder or under any other Loan
Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
10.11 MARSHALLING; PAYMENTS SET ASIDE.
None of Agents or Lenders shall be under any obligation to marshal
any assets in favor of Company or any other party or against or in payment of
any or all of the Obligations. To the extent that Company makes a payment or
payments to Administrative Agent or Lenders (or to Administrative Agent for the
benefit of Lenders), or any of Agents or Lenders enforce any security interests
or exercise their rights of setoff, and such payment or payments or the proceeds
of such enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause, then, to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor or related thereto,
shall be revived and continued in full force and effect as if such payment or
payments had not been made or such enforcement or setoff had not occurred.
10.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability
145
147
of the remaining provisions or obligations, or of such provision or obligation
in any other jurisdiction, shall not in any way be affected or impaired thereby.
10.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
The obligations of Lenders hereunder are several and no Lender shall
be responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.
10.14 HEADINGS.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
10.15 APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
10.16 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Neither Company's
rights or obligations hereunder nor any interest therein may be assigned or
delegated by Company without the prior written consent of all Lenders.
10.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE
146
148
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE,
COUNTY AND CITY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT,
COMPANY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SUBSECTION
10.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III)
ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER
COMPANY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND
OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN
EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING
PROCEEDINGS AGAINST COMPANY IN THE COURTS OF ANY OTHER
JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR
OTHERWISE.
10.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver
is intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
contract claims, tort claims, breach of duty claims and all other common law
and statutory claims. Each party hereto acknowledges that this waiver is a
147
149
material inducement to enter into a business relationship, that each has already
relied on this waiver in entering into this Agreement, and that each will
continue to rely on this waiver in their related future dealings. Each party
hereto further warrants and represents that it has reviewed this waiver with its
legal counsel and that it knowingly and voluntarily waives its jury trial rights
following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL
WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY
EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF
THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE
LOANS MADE HEREUNDER. In the event of litigation, this Agreement may be filed as
a written consent to a trial by the court.
10.19 CONFIDENTIALITY.
Each Lender shall hold all non-public information obtained pursuant
to the requirements of this Agreement which has been identified as confidential
by Company in accordance with such Lender's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices, it being understood and agreed by Company that in any event a
Lender may make disclosures to Affiliates and professional advisors of such
Lender or disclosures reasonably required by (a) any bona fide assignee,
transferee or participant in connection with the contemplated assignment or
transfer by such Lender of any Loans or any participations therein, provided
that such assignee, transferee or participant agrees in writing to keep such
information confidential to the same extent required of the Lenders hereunder,
or (b) by any direct or indirect contractual counterparties in swap agreements
or such contractual counterparties' professional advisors provided that such
contractual counterparty or professional advisor to such contractual
counterparty agrees in writing to keep such information confidential to the same
extent required of the Lenders hereunder, or disclosures required or requested
by any governmental agency or representative thereof or pursuant to legal
process; provided that, unless specifically prohibited by applicable law or
court order, each Lender shall notify Company of any request by any governmental
agency or representative thereof (other than any such request in connection with
any examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure of
such information provided, that such Lender shall have no liability for any
failure to so notify; and provided, further that in no event shall any Lender be
obligated or required to return any materials furnished by Company or any of its
Subsidiaries.
148
150
10.20 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Agents of written or telephonic notification of such execution and authorization
of delivery thereof.
149
151
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
SAC: SAC AUTOMOTIVE, INC.
By: /s/ Kenneth Diekroeger
---------------------------------
Title:
------------------------------
STANADYNE:
Stanadyne shall have no obligations hereunder until completion of
the acquisition of the capital stock of SAHC by Holdings pursuant to the terms
of the Acquisition Agreement. Prior to that time, the obligations of Company
pursuant to the Credit Agreement and the other Loan Documents shall be solely
those of SAC. Upon consummation of such acquisition pursuant to the terms of the
Acquisition Agreement, Stanadyne shall assume, and hereby assumes, all the
obligations and other liabilities of SAC under the Credit Agreement and all
references to Company contained in the Credit Agreement and other Loan Documents
shall be deemed to refer to Stanadyne.
STANADYNE AUTOMOTIVE CORP.
By: /s/ Michael H. Boyer
----------------------------------
Title:
-------------------------------
Notice Address:
with copy to:
Jack Feder, Esq.
Kirkland & Ellis
655 Fifteenth Street, N.W.
Washington, D.C. 20005
S-1
152
LENDERS:
DLJ CAPITAL FUNDING, INC., individually
and as Syndication Agent
By: /s/ Stephen C. Hawly
----------------------------------
Title:
-------------------------------
Notice Address:
2121 Avenue of the Stars
Los Angeles, CA 90067-5014
Attention: Mr. Eric Swanson
S-2
153
ABN AMRO BANK N.V.
/s/ Jim Adelsheim
By: Jim Adelsheim
----------------------------------
Title: Vice President
-------------------------------
/s/ Brian M. Horgan
By: Brian M. Horgan
----------------------------------
Title: Vice President
-------------------------------
Notice Address:
One Post Office Square, 39th Floor
Boston, MA 02109
Attention: Jim Adelsheim
S-3
154
BANK OF SCOTLAND
/s/ Annie Chin Tat
By: Annie Chin Tat
----------------------------------
Title: Vice President
-------------------------------
Notice Address:
565 Fifth Avenue
New York, NY 10017
Attention: Mr. Andy Chamberlain
S-4
155
BANKBOSTON, N.A.
/s/ Garth J. Collins
By: Garth J. Collins
----------------------------------
Title: Vice President
Notice Address:
81 West Main Street
Waterbury, CT 06702
Attention: Mr. Garth J. Collins
S-5
156
THE FIRST NATIONAL BANK OF CHICAGO
/s/ Juan J. Duarte
By: Juan J. Duarte
----------------------------------
Title: Assistant Vice President
-------------------------------
Notice Address:
153 West 51st St.
New York, NY 10019
Attention: Mr. Randy Faust
S-6
157
THE BANK OF NEW YORK
/s/ Edward J. Moriarty
By: Edward J. Moriarty
----------------------------------
Title: Assistant Vice President
-------------------------------
Notice Address:
10 Mason Street
Greenwich, CT 06830
Attention: Ms. Melinda White
S-7
158
NATIONAL CITY BANK
/s/ Lisa Beth Lisi
By: Lisa Beth Lisi
----------------------------------
Title: AVP
-------------------------------
Notice Address:
1900 East 9th St.
Cleveland, OH 44114
Attention: Ms. Lisa Lisi
S-8
159
DRESDNER BANK AG
NEW YORK AND GRAND CAYMAN BRANCHES
/s/ Brigitte Sacin
By: Brigitte Sacin
----------------------------------
Title: Assistant Treasurer
-------------------------------
/s/ John W. Sweeney
By: John W. Sweeney
----------------------------------
Title: Assistant Vice President
-------------------------------
Notice Address:
75 Wall Street
New York, NY 10005-2889
Attention: Mr. Thomas Nadaramia
S-9
160
PEOPLE'S BANK
/s/ Michael Schweighoffer
By: Michael Schweighoffer
----------------------------------
Title: Vice President
-------------------------------
Notice Address:
1 Financial Plaza
Hartford, CT 06103
Attention: Mr. Michael Schweighoffer
S-10
161
SUMMIT BANK
/s/ L. David Lyons
By: L. David Lyons
-----------------------------
Title: Vice President
-----------------------------
Notice Address:
750 Walnut Avenue
Cranford, NJ 07016
Attention: Mr. Wayne Trotman
S-11
162
S-13
163
STANADYNE AUTOMOTIVE CORP. INC.
CREDIT AGREEMENT
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS.................................................... 2
1.1 Certain Defined Terms.......................................... 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement...................................35
1.3 Other Definitional Provisions and Rules of Construction........35
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS.....................36
2.1 Commitments; Making of Loans; Notes............................36
2.2 Interest on the Loans..........................................43
2.3 Fees...........................................................49
2.4 Repayments, Prepayments and Reductions in Revolving
Loan Commitments; General Provisions Regarding Payments....... 51
2.5 Use of Proceeds................................................61
2.6 Special Provisions Governing Eurodollar Rate Loans.............62
2.7 Increased Costs; Taxes; Capital Adequacy.......................64
2.8 Obligation of Lenders and Issuing Lenders to Mitigate;
Replacement of Lender......................................... 69
SECTION 3. LETTERS OF CREDIT..............................................70
3.1 Issuance of Letters of Credit and Lenders' Purchase
of Participations Therein..................................... 70
3.2 Letter of Credit Fees..........................................74
3.3 Drawings and Reimbursement of Amounts Paid Under
Letters of Credit............................................. 75
3.4 Obligations Absolute...........................................78
3.5 Indemnification; Nature of Issuing Lenders' Duties.............79
3.6 Increased Costs and Taxes Relating to Letters of Credit........80
SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT......................81
4.1 Conditions to Term Loans and Initial Revolving Loans...........81
4.2 Conditions to Revolving Loans and Swingline Loans
After Initial Revolving Loans..................................86
4.3 Conditions to All Loans........................................92
4.4 Conditions to Letters of Credit................................93
SECTION 5. COMPANY'S REPRESENTATIONS AND WARRANTIES.......................93
5.1 Organization, Powers, Qualification, Good Standing,
Business and Subsidiaries......................................94
5.2 Authorization of Borrowing, etc................................95
(i)
164
Page
5.3 Financial Condition............................................ 95
5.4 No Material Adverse Change; No Restricted Junior Payments...... 96
5.5 Title to Properties; Liens; Real Property...................... 96
5.6 Litigation; Adverse Facts...................................... 97
5.7 Payment of Taxes............................................... 97
5.8 Performance of Agreements; Materially Adverse
Agreements; Material Contracts................................. 98
5.9 Governmental Regulation........................................ 98
5.10 Securities Activities.......................................... 98
5.11 Employee Benefit Plans......................................... 99
5.12 Certain Fees................................................... 99
5.13 Environmental Protection.......................................100
5.14 Employee Matters...............................................101
5.15 Solvency.......................................................101
5.16 Matters Relating to Collateral.................................101
5.17 Disclosure.....................................................102
SECTION 6. COMPANY'S AFFIRMATIVE COVENANTS.............................103
6.1 Financial Statements and Other Reports.........................103
6.2 Corporate Existence, etc.......................................108
6.3 Payment of Taxes and Claims; Tax Consolidation.................108
6.4 Maintenance of Properties; Insurance; Application of
Net Insurance/Condemnation Proceeds............................108
6.5 Inspection Rights; Audits of Inventory and Accounts Receivable;
Lender Meeting.................................................109
6.6 Compliance with Laws, etc......................................110
6.7 Environmental Review and Investigation, Disclosure, Etc.;
Company's Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws......110
6.8 Execution of Subsidiary Guaranty and Personal Property
Collateral Documents by Certain Subsidiaries and Future
Subsidiaries; Execution of Auxiliary Pledge Agreements; IP
Collateral.....................................................113
6.9 Conforming Leasehold Interests; Matters Relating to
Additional Real Property Collateral............................115
7.10 Sales and Lease-Backs..........................................128
7.11 Sale or Discount of Receivables................................128
7.12 Transactions with Shareholders and Affiliates..................128
7.13 Disposal of Subsidiary Stock...................................129
7.14 Conduct of Business............................................129
7.15 Amendments of Documents Relating to Subordinated Indebtedness..129
(ii)
165
Page
SECTION 8. EVENTS OF DEFAULT...........................................130
8.1 Failure to Make Payments When Due..............................130
8.2 Default in Other Agreements....................................130
8.3 Breach of Certain Covenants....................................130
8.4 Breach of Warranty.............................................131
8.5 Other Defaults Under Loan Documents............................131
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc...........131
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.............131
8.8 Judgments and Attachments......................................132
8.9 Dissolution....................................................132
8.10 Employee Benefit Plans.........................................132
8.11 Change in Control..............................................132
8.12 Invalidity of Guaranties; Failure of Security; Repudiation
of Obligations.................................................133
SECTION 9. THE AGENTS..................................................135
9.1 Appointment....................................................135
9.2 Powers and Duties; General Immunity............................136
9.3 Representations and Warranties; No Responsibility For Appraisal
of Credit worthiness...........................................138
9.4 Right to Indemnity.............................................138
9.5 Successor Agents and Swing Line Lender.........................139
9.6 Collateral Documents and Guaranties............................140
SECTION 10. MISCELLANEOUS...............................................141
10.1 Assignments and Participations in Loans and Letters of Credit..141
10.2 Expenses.......................................................144
10.3 Indemnity......................................................145
10.4 Set-Off; Security Interest in Deposit Accounts.................146
10.5 Ratable Sharing................................................147
10.6 Amendments and Waivers.........................................147
(iii)