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EXHIBIT 10.4
CREDIT AGREEMENT
by and among
ATRIUM CORPORATION,
ATRIUM COMPANIES, INC.,
THE BANKS PARTIES HERETO
and
BANKERS TRUST COMPANY,
as AGENT
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Dated as of November 27, 1996
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TABLE OF CONTENTS
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SECTION 1. AMOUNT AND TERMS OF CREDIT......................................................................1
1.01 The Commitments.................................................................................1
1.02 Minimum Amount of Each Borrowing................................................................2
1.03 Notice of Borrowing.............................................................................2
1.04 Disbursement of Funds...........................................................................2
1.05 Notes...........................................................................................3
1.06 Conversions.....................................................................................3
1.07 Pro Rata Borrowings.............................................................................4
1.08 Interest........................................................................................4
1.09 Interest Periods................................................................................5
1.10 Increased Costs; Illegality; etc................................................................6
1.11 Compensation....................................................................................8
1.12 Change of Lending Office........................................................................8
1.13 Replacement of Banks............................................................................8
SECTION 2. LETTERS OF CREDIT...............................................................................9
2.01 Letters of Credit..............................................................................10
2.02 Letter of Credit Requests......................................................................11
2.03 Letter of Credit Participations................................................................11
2.04 Agreement to Repay Letter of Credit Drawings...................................................13
2.05 Increased Costs................................................................................14
SECTION 3. COMMITMENT COMMISSION; FEES; REDUCTIONS OF COMMITMENT..........................................15
3.01 Fees...........................................................................................15
3.02 Voluntary Termination of Unutilized Commitments................................................16
3.03 Mandatory Reduction of Commitments.............................................................16
SECTION 4. PREPAYMENTS; PAYMENTS; TAXES...................................................................17
4.01 Voluntary Prepayments..........................................................................17
4.02 Mandatory Repayments and Commitment Reductions.................................................17
4.03 Method and Place of Payment....................................................................21
4.04 Net Payments...................................................................................21
SECTION 5. CONDITIONS PRECEDENT TO INITIAL CREDIT EVENTS..................................................23
5.01 Execution of Agreement; Revolving Notes........................................................23
5.02 Fees; etc......................................................................................24
5.03 Opinions of Counsel............................................................................24
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5.04 Corporate Documents; Proceedings; etc..........................................................24
5.05 Employee Benefit Plans; Shareholders' Agreements; Management Agreements;
Collective Bargaining Agreements; Existing Debt Agreements; Tax Sharing
Agreements.....................................................................................24
5.06 Capital Contributions; Stock Repurchase; etc...................................................25
5.07 Refinancing of Existing Credit Agreement.......................................................26
5.08 Environmental Indemnity Agreement..............................................................26
5.09 Pledge Agreement...............................................................................27
5.10 Security Agreement.............................................................................27
5.11 Subsidiary Guaranty............................................................................27
5.12 Mortgages; Title Insurance; Surveys; Etc.......................................................28
5.13 Consent Letter.................................................................................28
5.14 Adverse Change, etc............................................................................28
5.15 Litigation.....................................................................................29
5.16 Solvency Certificate; Environmental Analyses; Insurance........................................29
5.17 Pro Forma Balance Sheet........................................................................30
5.18 Officer's Certificate..........................................................................30
SECTION 6. CONDITIONS PRECEDENT TO ALL CREDIT EVENTS......................................................30
6.01 No Default; Representations and Warranties.....................................................30
6.02 Notice of Borrowing; Letter of Credit Request..................................................30
SECTION 7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.....................................................31
7.01 Corporate Status...............................................................................31
7.02 Corporate Power and Authority..................................................................31
7.03 No Violation...................................................................................32
7.04 Governmental Approvals.........................................................................32
7.05 Financial Statements; Financial Condition; Undisclosed Liabilities; Projections;
etc............................................................................................32
7.06 Litigation.....................................................................................33
7.07 True and Complete Disclosure...................................................................33
7.08 Use of Proceeds; Margin Regulations............................................................34
7.09 Tax Returns and Payments.......................................................................34
7.10 Compliance with ERISA..........................................................................34
7.11 Security Documents.............................................................................35
7.12 Representations and Warranties in Documents....................................................36
7.13 Properties.....................................................................................36
7.14 Capitalization.................................................................................36
7.15 Subsidiaries...................................................................................37
7.16 Compliance with Statutes, etc..................................................................37
7.17 Investment Company Act.........................................................................37
7.18 Public Utility Holding Company Act.............................................................38
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7.19 Labor Relations................................................................................38
7.20 Patents, Licenses, Franchises and Formulas.....................................................38
7.21 Indebtedness...................................................................................38
7.22 Recapitalization...............................................................................38
7.23 Special Purpose Corporation....................................................................39
7.24 Subordination..................................................................................39
SECTION 8. AFFIRMATIVE COVENANTS..........................................................................39
8.01 Information Covenants..........................................................................39
8.02 Books, Records and Inspections.................................................................41
8.03 Maintenance of Property; Insurance.............................................................41
8.04 Corporate Franchises...........................................................................42
8.05 Compliance with Statutes, etc..................................................................42
8.06 ERISA..........................................................................................42
8.07 End of Fiscal Years; Fiscal Quarters...........................................................43
8.08 Performance of Obligations.....................................................................43
8.09 Payment of Taxes...............................................................................43
8.10 Additional Security; Further Assurances; Surveys...............................................44
8.11 Ownership of Subsidiaries......................................................................45
8.12 Maintenance of Corporate Separateness..........................................................45
8.13 Repayment of SBA Loan..........................................................................45
SECTION 9. NEGATIVE COVENANTS.............................................................................45
9.01 Liens..........................................................................................45
9.02 Consolidation; Merger; Purchase or Sale of Assets; etc.........................................48
9.03 Dividends......................................................................................50
9.04 Indebtedness...................................................................................51
9.05 Advances, Investments and Loans................................................................52
9.06 Transactions with Affiliates...................................................................54
9.07 Capital Expenditures...........................................................................54
9.08 Minimum Consolidated Interest Coverage Ratio...................................................55
9.09 Minimum Consolidated EBITDA....................................................................56
9.10 Limitation on Modifications of Indebtedness and Payments of Indebtedness;
Modifications of Certificate of Incorporation, By-Laws and Certain Other
Agreements; etc................................................................................57
9.11 Limitation on Certain Restrictions on Subsidiaries.............................................58
9.12 Limitation on Issuance of Capital Stock........................................................58
9.13 Changes in Business............................................................................58
9.14 Limitation on Creation of Subsidiaries.........................................................59
SECTION 10. EVENTS OF DEFAULT..............................................................................59
10.01 Payments.......................................................................................59
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10.02 Representations, etc...........................................................................59
10.03 Covenants......................................................................................59
10.04 Default Under Other Agreements.................................................................59
10.05 Bankruptcy, etc................................................................................60
10.06 ERISA..........................................................................................60
10.07 Security Documents.............................................................................61
10.08 Guaranty.......................................................................................61
10.09 Judgments......................................................................................61
10.10 Change of Control..............................................................................61
10.11 Environmental Matters..........................................................................61
SECTION 11. DEFINITIONS AND ACCOUNTING TERMS....................................................................62
11.01 Defined Terms..................................................................................62
SECTION 12. THE AGENT...........................................................................................85
12.01 Appointment....................................................................................85
12.02 Nature of Duties...............................................................................85
12.03 Lack of Reliance on the Agent..................................................................85
12.04 Certain Rights of the Agent....................................................................86
12.05 Reliance.......................................................................................86
12.06 Indemnification................................................................................86
12.07 The Agent in its Individual Capacity...........................................................87
12.08 Holders........................................................................................87
12.09 Resignation by the Agent.......................................................................87
SECTION 13. MISCELLANEOUS.......................................................................................88
13.01 Payment of Expenses, etc.......................................................................88
13.02 Right of Setoff; Collateral Matters............................................................89
13.03 Notices........................................................................................89
13.04 Benefit of Agreement...........................................................................89
13.05 No Waiver; Remedies Cumulative.................................................................91
13.06 Payments Pro Rata..............................................................................91
13.07 Calculations; Computations.....................................................................92
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL...........................................................................92
13.09 Counterparts...................................................................................94
13.10 Effectiveness..................................................................................94
13.11 Headings Descriptive...........................................................................94
13.12 Amendment or Waiver; etc.......................................................................94
13.13 Survival.......................................................................................95
13.14 Domicile of Loans..............................................................................96
13.15 Limitation on Additional Amounts; etc..........................................................96
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13.16 Confidentiality................................................................................96
13.17 Registry.......................................................................................97
SECTION 14. HOLDINGS GUARANTY...................................................................................97
14.01 The Holdings Guaranty..........................................................................97
14.02 Bankruptcy.....................................................................................98
14.03 Nature of Liability............................................................................98
14.04 Independent Obligation.........................................................................98
14.05 Authorization..................................................................................98
14.06 Reliance.......................................................................................99
14.07 Subordination.................................................................................100
14.08 Waiver........................................................................................100
14.09 Nature of Liability...........................................................................101
INDEX OF SCHEDULES AND EXHIBITS
SCHEDULE I Commitments
SCHEDULE II Bank Addresses
SCHEDULE III Real Property
SCHEDULE IV Subsidiaries
SCHEDULE V Existing Indebtedness
SCHEDULE VI Insurance
SCHEDULE VII Existing Liens
EXHIBIT A Form of Notice of Borrowing
EXHIBIT B Form of Revolving Note
EXHIBIT C Form of Letter of Credit Request
EXHIBIT D Form of Section 4.04(b)(iii) Certificate
EXHIBIT E Form of Opinion of Vinson & Elkins,
Counsel to the Credit Parties
EXHIBIT F Form of Officers' Certificate
EXHIBIT G Form of Environmental Indemnity
EXHIBIT H Form of Pledge Agreement
EXHIBIT I Form of Security Agreement
EXHIBIT J Form of Subsidiary Guaranty
EXHIBIT K Form of Consent Letter
EXHIBIT L Form of Solvency Certificate
EXHIBIT M Form of Intercompany Note
EXHIBIT N Form of Assignment and Assumption Agreement
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of November 27, 1996, is by
and among ATRIUM CORPORATION, a Delaware corporation ("Holdings"), ATRIUM
COMPANIES, INC., a Delaware corporation (f/k/a FCI Holding Corp. and survivor
by merger of Fojtasek Companies, Inc.) (the "Borrower"), the Banks party hereto
from time to time and BANKERS TRUST COMPANY, as Agent (all capitalized terms
used herein and defined in Section 11 are used herein as therein defined).
W I T N E S S E T H :
WHEREAS, the Borrower has requested that the Banks provide a
revolving credit facility (including a letter of credit subfacility) to the
Borrower in an aggregate amount not to exceed $20,000,000 at any time
outstanding;
WHEREAS, the proceeds of the revolving credit facility
described above will be used by the Borrower for ongoing working capital and
general corporate purposes, including, without limitation, to pay fees, costs
and expenses incurred in connection with the transactions contemplated hereby;
and
WHEREAS, the Banks are willing to extend commitments to make
the Revolving Loans and to issue or participate, as the case may be, in Letters
of Credit, to the Borrower, in each case for the respective purposes provided
herein and only on the terms and subject to the conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained, the parties hereto agree as follows:
SECTION 1. AMOUNT AND TERMS OF CREDIT.
1.01 The Commitments. Subject to and upon the terms and
conditions set forth herein, each Bank with a Revolving Loan Commitment
severally agrees to make, at any time and from time to time on and after the
Initial Borrowing Date and prior to the Revolving Loan Maturity Date, a
revolving loan or revolving loans (each, a "Revolving Loan" and, collectively,
the "Revolving Loans") to the Borrower, which Revolving Loans (i) shall, at the
option of the Borrower, be Base Rate Loans or Eurodollar Loans, provided that
(A) except as otherwise specifically provided in Section 1.10(b), all Revolving
Loans comprising the same Borrowing shall at all times be of the same Type and
(B) no Revolving Loans maintained as Eurodollar Loans may be incurred prior to
the earlier of (1) the 60th day after the Initial Borrowing Date and (2) the
Syndication Date, (ii) may be repaid and reborrowed in accordance with the
provisions hereof, (iii) shall not exceed for any Bank at any time outstanding
that aggregate principal amount which, when added to the product of (x) such
Bank's Adjusted Percentage and (y) the aggregate amount of all Letter of Credit
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Outstandings (exclusive of Unpaid Drawings which are repaid with the proceeds
of, and simultaneously with the incurrence of, the respective incurrence of
Revolving Loans) at such time, equals the Revolving Loan Commitment of such
Bank at such time and (iv) shall not exceed for all Banks at any time
outstanding that aggregate principal amount which, when added to the amount of
all Letter of Credit Outstandings (exclusive of Unpaid Drawings which are
repaid with the proceeds of, and simultaneously with the incurrence of, the
respective incurrence of Revolving Loans) at such time then outstanding, equals
the Total Revolving Loan Commitment at such time.
1.02 Minimum Amount of Each Borrowing. The aggregate
principal amount of each Borrowing of Revolving Loans (i) that are Eurodollar
Loans shall not be less than $200,000 and, if greater, shall be in an integral
multiple of $50,000 and (ii) that are Base Rate Loans shall not be less than
$200,000 and, if greater, shall be in an integral multiple of $50,000. More
than one Borrowing may occur on the same date, but at no time shall there be
outstanding more than ten Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires
to make a Borrowing hereunder, it shall give the Agent at its Notice Office on
the date that a Base Rate Loan is to be made prior written notice (or
telephonic notice promptly confirmed in writing) of each Base Rate Loan and at
least three Business Days' prior written (or telephonic notice promptly
confirmed in writing) notice of each Eurodollar Loan to be made hereunder,
provided that any such notice shall be deemed to have been given on a certain
day only if given before 12:00 Noon (New York time) on such day. Each such
written notice or written confirmation of telephonic notice (each a "Notice of
Borrowing"), except as otherwise expressly provided in Section 1.10, shall be
irrevocable and shall be given by the Borrower in the form of Exhibit A
attached hereto, appropriately completed to specify the aggregate principal
amount of the Revolving Loans to be made pursuant to such Borrowing, the date
of such Borrowing (which shall be a Business Day), whether the Revolving Loans
being made pursuant to such Borrowing are to be initially maintained as Base
Rate Loans or Eurodollar Loans and, if Eurodollar Loans, the initial Interest
Period to be applicable thereto. The Agent shall promptly give each Bank notice
of such proposed Borrowing, of such Bank's proportion ate share thereof and of
the other matters required by the immediately preceding sentence to be
specified in the Notice of Borrowing.
(b) Without in any way limiting the obligation of the
Borrower to confirm in writing any telephonic notice of any Borrowing of
Revolving Loans, the Agent may act without liability upon the basis of
telephonic notice of such Borrowing, believed by the Agent in good faith to be
from an Authorized Officer prior to receipt of written confirmation. In each
such case, the Borrower hereby waives the right to dispute the Agent's record
of the terms of such telephonic notice of such Borrowing of Revolving Loans.
1.04 Disbursement of Funds. Except as otherwise specifically
provided in the immediately succeeding sentence, no later than 2:00 P.M. (New
York time) on the date specified in each Notice of Borrowing, each Bank with a
Revolving Loan Commitment will make available its pro rata portion of each such
Borrowing requested to be made on such date. All such amounts shall
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be made available in Dollars and in immediately available funds at the Payment
Office of the Agent, and the Agent will make available to the Borrower at the
Payment Office the aggregate of the amounts so made available by the Banks
(prior to 3:00 P.M. on such day, to the extent of funds actually received by
the Agent prior to 2:00 P.M. on such day). Unless the Agent shall have been
notified by any Bank prior to the date of Borrowing that such Bank does not
intend to make available to the Agent such Bank's portion of any Borrowing to
be made on such date, the Agent may assume that such Bank has made such amount
available to the Agent on such date of Borrowing and the Agent may, in reliance
upon such assumption, make available to the Borrower a corresponding amount. If
such corresponding amount is not in fact made available to the Agent by such
Bank, the Agent shall be entitled to recover such corresponding amount on
demand from such Bank. If such Bank does not pay such corresponding amount
forthwith upon the Agent's demand therefor, the Agent shall promptly notify the
Borrower and the Borrower shall immediately pay such corresponding amount to
the Agent. The Agent shall also be entitled to recover on demand from such Bank
or the Borrower, as the case may be, interest on such corresponding amount in
respect of each day from the date such corresponding amount was made available
by the Agent to the Borrower until the date such corresponding amount is
recovered by the Agent, at a rate per annum equal to (i) if recovered from such
Bank, at the overnight Federal Funds Rate and (ii) if recovered from the Bor
rower, the rate of interest applicable to the respective Borrowing, as
determined pursuant to Section 1.08. Nothing in this Section 1.04 shall be
deemed to relieve any Bank from its obligation to make Loans hereunder or to
prejudice any rights which the Borrower may have against any Bank as a result
of any failure by such Bank to make Loans hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the
principal of, and interest on, the Revolving Loans made by each Bank shall be
evidenced by a promissory note duly executed and delivered by the Borrower
substantially in the form of Exhibit B attached hereto, with blanks
appropriately completed in conformity herewith (each, a "Revolving Note" and,
collectively, the "Revolving Notes").
(b) The Revolving Note issued to each Bank shall (i) be
executed by the Borrower, (ii) be payable to the order of such Bank and its
registered assigns and be dated the Initial Borrowing Date, (iii) be in a
stated principal amount equal to the Revolving Loan Commitment of such Bank and
be payable in the principal amount of the Revolving Loans evidenced thereby,
(iv) mature on the Revolving Loan Maturity Date, (v) bear interest as provided
in the appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
mandatory repayment as provided in Section 4.02 and (vii) be entitled to the
benefits of this Agreement and the other Credit Documents.
(c) Each Bank will note on its internal records the amount
of each Revolving Loan made by it and each payment in respect thereof and will
prior to any transfer of its Revolving Note endorse on the reverse side thereof
the outstanding principal amount of Revolving Loans evidenced thereby. Failure
to make any such notation or any error in any such notation or endorsement
shall not affect the Borrower's obligations in respect of such Revolving Loans.
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1.06 Conversions. The Borrower shall have the option to
convert, on any Business Day occurring on or after the Initial Borrowing Date,
all or a portion equal to at least $200,000 (and, if greater, in an integral
multiple of $50,000), of the outstanding principal amount of Revolving Loans
made pursuant to one or more Borrowings of one or more Types of Revolving Loans
into a Borrowing of another Type of Revolving Loan, provided that (A) except as
otherwise provided in Section 1.10(b), Eurodollar Loans may be converted into
Base Rate Loans only on the last day of an Interest Period applicable to the
Revolving Loans being converted and no such partial conversion of Eurodollar
Loans shall reduce the outstanding principal amount of such Eurodollar Loans
made pursuant to a single Borrowing to less than $200,000, (B) Base Rate Loans
may only be converted into Eurodollar Loans if no Default or Event of Default
is in existence on the date of the conversion and (C) no conversion pursuant to
this Section 1.06 shall result in a greater number of Borrowings of Eurodollar
Loans than is permitted under Section 1.02. Each such conversion shall be
effected by the Borrower by giving the Agent at its Notice Office prior to 1:00
P.M. (New York time) at least three Business Days' prior notice (each a "Notice
of Conversion") specifying the Loans to be so con verted, the Borrowing or
Borrowings pursuant to which such Loans were made and, if to be con verted into
Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Agent shall give each Bank prompt notice of any such proposed conversion.
1.07 Pro Rata Borrowings. All Borrowings of Revolving Loans
under this Agreement shall be incurred from the Banks pro rata on the basis of
their Revolving Loan Commitments. It is understood that no Bank shall be
responsible for any default by any other Bank of its obligation to make
Revolving Loans hereunder and that each Bank shall be obligated to make the
Revolving Loans provided to be made by it hereunder, regardless of the failure
of any other Bank to make its Revolving Loans hereunder.
1.08 Interest. (a) The Borrower agrees to pay interest in
respect of the unpaid principal amount of each Base Rate Loan from the date the
proceeds thereof are made available to the Borrower until the earlier of (i)
the maturity (whether by acceleration or otherwise) of such Base Rate Loan and
(ii) the conversion of such Base Rate Loan to a Eurodollar Loan pursuant to
Section 1.06, at a rate per annum which shall be equal to the sum of the
Applicable Margin plus the Base Rate in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Eurodollar Loan from the date the proceeds
thereof are made available to the Borrower until the earlier of (i) the
maturity (whether by acceleration or otherwise) of such Eurodollar Loan and
(ii) the conversion of such Eurodollar Loan to a Base Rate Loan pursuant to
Section 1.06 or 1.10, as applicable, at a rate per annum which shall, during
each Interest Period applicable thereto, be equal to the sum of the Applicable
Margin plus the Eurodollar Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Revolving Loan and any other overdue amount
payable hereunder shall, in each case, bear interest at a rate per annum equal
to the greater of (i) 2% per annum in excess of the rate otherwise applicable
to Base Rate Loans from time to time and (ii) the rate which is 2% in excess
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of the rate then borne by such Revolving Loans, in each case with such interest
to be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be
payable (i) in respect of each Base Rate Loan, quarterly in arrears on each
Quarterly Payment Date, (ii) in respect of each Eurodollar Loan, on the last
day of each Interest Period applicable thereto and, in the case of an Interest
Period in excess of three months, on each date occurring at three month
intervals after the first day of such Interest Period and (iii) in respect of
each Revolving Loan, on any repayment or prepayment (on the amount repaid or
prepaid), at maturity (whether by acceleration or otherwise) and, after such
maturity, on demand.
(e) Upon each Interest Determination Date, the Agent shall
determine the Eurodollar Rate for each Interest Period applicable to Eurodollar
Loans and shall promptly notify the Borrower and the Banks thereof. Each such
determination shall, absent manifest error, be final and conclusive and binding
on all parties hereto.
1.09 Interest Periods. At the time it gives any Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, any Eurodollar Loan (in the case of the initial Interest Period
applicable thereto) or on the third Business Day prior to the expiration of an
Interest Period applicable to such Eurodollar Loan (in the case of any
subsequent Interest Period), the Borrower shall have the right to elect, by
giving the Agent notice thereof, the interest period (each an "Interest
Period") applicable to such Eurodollar Loan, which Interest Period shall, at
the option of the Borrower, be a one, two, three or six-month period, or, if
available to each Bank, a nine or twelve-month period, provided that:
(i) all Eurodollar Loans comprising a Borrowing shall at all
times have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan
shall commence on the date of Borrowing of such Eurodollar Loan
(including the date of any conversion thereto from a Revolving Loan of
a different Type) and each Interest Period occurring thereafter in
respect of such Eurodollar Loan shall commence on the day on which the
next preceding Interest Period applicable thereto expires;
(iii) if any Interest Period relating to a Eurodollar Loan
begins on a day for which there is no numerically corresponding day in
the calendar month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided, however, that if any Interest
Period for a Eurodollar Loan would otherwise expire on a day which 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;
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(v) no Interest Period may be selected at any time when a
Default or an Event of Default is then in existence; and
(vi) no Interest Period shall be selected which extends
beyond the Revolving Loan Maturity Date.
If upon the expiration of any Interest Period
applicable to a Borrowing of Eurodollar Loans, the Borrower has failed
to elect, or is not permitted to elect, a new Interest Period to be
applicable to such Eurodollar Loans as provided above, the Borrower
shall be deemed to have elected to convert such Eurodollar Loans into
Base Rate Loans effective as of the expiration date of such current
Interest Period.
1.10 Increased Costs; Illegality; etc. (a) In the event
that any Bank shall have determined (which determination shall, with respect to
clause (i) below, may be made only by the Agent):
(i) on any Interest Determination Date that, by reason of
any changes arising after the date of this Agreement affecting the
interbank Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in
the definition of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs
or reductions in the amounts received or receivable hereunder with
respect to any Eurodollar Loan because of (x) any change since the
date of this Agreement in any applicable law or governmental rule,
regulation, order, guideline or request (whether or not having the
force of law) or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule,
regulation, order, guideline or request, including, but not limited
to: (A) a change in the basis of taxation of payment to any Bank of
the principal of or interest on such Eurodollar Loan or any other
amounts payable hereunder (except for changes in the rate of tax on,
or determined by reference to, the net income or profits of such Bank,
or any franchise tax based on the net income or profits of such Bank,
in either case pursuant to the laws of the United States of America,
the jurisdiction in which it is organized or in which its principal
office or applicable lending office is located or any subdivision
thereof or therein), but without duplication of any amounts payable in
respect of Taxes pursuant to Section 4.04(a), or (B) a change in
official reserve requirements, but, in all events, excluding reserves
required under Regulation D to the extent included in the computation
of the Eurodollar Rate, and/or (y) other circumstances since the date
of this Agreement affecting such Bank or the interbank Eurodollar
market or the position of such Bank in such market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has been made (x) unlawful by any law or governmental
rule, regulation or order, (y) impossible by compliance by any Bank in
good faith with any governmental request (whether or not having
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force of law) or (z) impracticable as a result of a contingency
occurring after the date of this Agreement which materially and
adversely affects the interbank Eurodollar market;
then, and in any such event, such Bank (or the Agent, in the case of clause (i)
above) shall promptly give notice (by telephone confirmed in writing) to the
Borrower and, except in the case of clause (i) above, to the Agent of such
determination (which notice the Agent shall promptly transmit to each of the
other Banks). Thereafter (x) in the case of clause (i) above, Eurodollar Loans
shall no longer be available until such time as the Agent notifies the Borrower
and the Banks that the circumstances giving rise to such notice by the Agent no
longer exist, and any Notice of Borrowing or Notice of Conversion given by the
Borrower with respect to Eurodollar Loans which have not yet been incurred
(including by way of conversion), shall be deemed rescinded by the Borrower,
(y) in the case of clause (ii) above, the Borrower shall, subject to the
provisions of Section 13.15 (to the extent applicable), pay to such Bank, upon
written demand therefor, such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Bank in its sole discretion shall determine) as shall be required to compensate
such Bank for such increased costs or reductions in amounts received or
receivable hereunder (a written notice as to the additional amounts owed to
such Bank, showing the basis for the calculation thereof, submitted to the
Borrower by such Bank in good faith shall, absent manifest error, be final and
conclusive and binding on all the parties hereto) and (z) in the case of clause
(iii) above, the Borrower shall take one of the actions specified in Section
1.10(b) as promptly as possible and, in any event, within the time period
required by law. Each of the Agent and each Bank agrees that if it gives notice
to the Borrower of any of the events described in clause (i) or (iii) above, it
shall promptly notify the Borrower and, in the case of any such Bank, the
Agent, if such event ceases to exist. If any such event described in clause
(iii) above ceases to exist as to a Bank, the obligations of such Bank to make
Eurodollar Loans and to convert Base Rate Loans into Eurodollar Loans on the
terms and conditions contained herein shall be reinstated.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.10(a)(iii) shall) either (x) if the affected Eurodollar Loan is then
being made initially or pursuant to a conversion, cancel the respective
Borrowing by giving the Agent telephonic notice (confirmed in writing) on the
same date that the Borrower was notified by the affected Bank or the Agent
pursuant to Section 1.10(a)(ii) or (iii) or (y) if the affected Eurodollar Loan
is then outstanding, upon at least three Business Days' written notice to the
Agent given immediately or, if permitted under applicable law, given at such
later date as permitted thereby, require the affected Bank to convert such
Eurodollar Loan into a Base Rate Loan, provided that, if more than one Bank is
affected at any time, then all affected Banks must be treated the same pursuant
to this Section 1.10(b).
(c) If at any time after the date of this Agreement any Bank
determines that the introduction of or any change in any applicable law or
governmental rule, regulation, order, guideline, directive or request (whether
or not having the force of law) concerning capital adequacy, or any change in
interpretation or administration thereof by any governmental authority, central
bank
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or comparable agency, will have the effect of increasing the amount of capital
required or expected to be maintained by such Bank or any corporation
controlling such Bank based on the existence of such Bank's Revolving Loan
Commitment hereunder or its obligations hereunder, then the Borrower shall,
subject to the provisions of Section 13.15 (to the extent applicable), pay to
such Bank, upon its written demand therefor, such additional amounts as shall
be required to compensate such Bank or such other corporation for the increased
cost to such Bank or such other corporation or the reduction in the rate of
return to such Bank or such other corporation as a result of such increase of
capital. In determining such additional amounts, each Bank will act reasonably
and in good faith and will use averaging and attribution methods which are
reasonable, provided that such Bank's reasonable good faith determination of
compensation owing under this Section 1.10(c) shall, absent manifest error, be
final and conclusive and binding on all the parties hereto. Each Bank, upon
deter mining that any additional amounts will be payable pursuant to this
Section 1.10(c), will give prompt written notice thereof to the Borrower, which
notice shall show the basis for calculation of such additional amounts.
1.11 Compensation. The Borrower shall, subject to the
provisions of Section 13.15 (to the extent applicable), compensate each Bank,
upon its written request (which request shall set forth the basis for
requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other
funds required by such Bank to fund its Eurodollar Loans but excluding any loss
of anticipated profit) which such Bank may sustain: (i) if for any reason
(other than a default by such Bank or the Agent) a Borrowing of, or conversion
from or into, Eurodollar Loans does not occur on a date specified therefor in a
Notice of Borrowing or Notice of Conversion (whether or not withdrawn by the
Borrower or deemed withdrawn pursuant to Section 1.10(a)); (ii) if any
repayment (including any repayment made pursuant to Section 4.02 or a result of
an acceleration of the Loans pursuant to Section 10) or conversion of any of
its Eurodollar Loans occurs on a date which is not the last day of an Interest
Period with respect thereto; (iii) if any prepayment of any of its Eurodollar
Loans is not made on any date specified in a notice of prepayment given by the
Borrower; or (iv) as a consequence of (A) any other default by the Borrower to
repay its Loans when required by the terms of this Agreement or any Revolving
Note held by such Bank or (B) any election made pursuant to Section 1.10(b).
1.12 Change of Lending Office. Each Bank agrees that on the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), Section 1.10(c), Section 2.05 or Section 4.04 with respect to such Bank,
it will, if requested by the Borrower, use reasonable efforts (subject to
overall policy considerations of such Bank) to designate another lending office
for any Revolving Loans or Letters of Credit affected by such event, provided
that such designation is made on such terms that such Bank and its lending
office suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of such
Section. Nothing in this Section 1.12 shall affect or postpone any of the
obligations of the Borrower or the right of any Bank provided in Sections 1.10,
2.05 and 4.04.
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1.13 Replacement of Banks. (i) If any Bank becomes a
Defaulting Bank or otherwise defaults in its obligations to make Revolving
Loans or fund Unpaid Drawings, (ii) upon the occurrence of any event giving
rise to the operation of Section 1.10(a)(ii) or (iii), Section 1.10(c), Section
2.05 or Section 4.04 with respect to any Bank which results in such Bank
charging to the Borrower increased costs in excess of those being generally
charged by the other Banks or (iii) as provided in Section 13.12(b) in the case
of certain refusals by a Bank to consent to certain proposed changes, waivers,
discharges or terminations with respect to this Agreement which have been
approved by the Required Banks, the Borrower shall have the right, in
accordance with the requirements of Section 13.04(b), if no Default or Event of
Default would exist after giving effect to the respective replacement, to
either replace such Bank (the "Replaced Bank") with one or more other Eligible
Transferee or Eligible Transferees, none of whom shall constitute a Defaulting
Bank at the time of such replacement (collectively, the "Replacement Bank") and
each of whom shall be reasonably acceptable to the Agent; provided, however,
that:
(A) at the time of any replacement pursuant to this Section
1.13, the Replaced Bank and the Replacement Bank shall enter into one
or more Assignment and Assumption Agreements pursuant to Section
13.04(b) (and with all fees payable pursuant to said Section 13.04(b)
to be paid by the Replacement Bank) pursuant to which the Replacement
Bank shall acquire all of the Revolving Loan Commitment and
outstanding Revolving Loans of, and in each case participations in
Letters of Credit by, the Replaced Bank and, in connection there with,
shall pay to (1) the Replaced Bank in respect thereof an amount equal
to the sum of (x) an amount equal to the principal of, and all accrued
interest on, all outstanding Revolving Loans of the Replaced Bank, (y)
an amount equal to all Unpaid Drawings that have been funded by (and
not reimbursed to) such Replaced Bank, together with all then unpaid
interest with respect thereto at such time and (z) an amount equal to
all accrued, but theretofore unpaid, Fees owing to the Replaced Bank
pursuant to Section 3.01 and (2) BTCo an amount equal to such Replaced
Bank's Adjusted Percentage (for this purpose, determined as if the
adjustment described in clause (y) of the immediately succeeding
sentence had been made with respect to such Replaced Bank) of any
Unpaid Drawing (which at such time remains an Unpaid Drawing) to the
extent such amount was not theretofore funded by such Replaced Bank;
and
(B) all obligations of the Borrower owing to the Replaced
Bank (other than those specifically described in clause (A) above in
respect of which the assignment purchase price has been, or is
concurrently being, paid) shall be paid in full to such Replaced Bank
concurrently with such replacement.
Upon the execution of the respective Assignment and Assumption Agreements, the
payment of amounts referred to in clauses (A) and (B) above and, if so
requested by the Replacement Bank, delivery to the Replacement Bank of the
appropriate Revolving Note executed by the Borrower, (x) the Replacement Bank
shall become a Bank hereunder and the Replaced Bank shall cease to constitute
a Bank hereunder, except with respect to indemnification provisions under this
Agreement (including, without limitation, Sections 1.10, 1.11, 2.05, 4.04,
13.01 and 13.06), which shall survive
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(subject to Section 13.15) as to such Replaced Bank and (y) in the case of a
replacement of a Defaulting Bank with a Non-Defaulting Bank, the Adjusted
Percentages of the Banks shall be auto matically adjusted at such time to give
effect to such replacement (and to give effect to the replacement of a
Defaulting Bank with one or more Non-Defaulting Banks). Any replacement of a
Bank pursuant to this Section 1.13 shall not be deemed to be a waiver of any
rights which the Borrower, the Agent or any other Bank shall have against the
replaced Bank relating to events or occurrences occurring prior to the
effective date of such assignment.
SECTION 2. LETTERS OF CREDIT.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request that any Issuing Bank
issue, at any time and from time to time on and after the Initial Borrowing
Date and prior to the Revolving Loan Maturity Date, (i) for the account of the
Borrower and for the benefit of any holder (or any trustee, agent or other
similar representative for any such holders) of L/C Supportable Obligations of
the Borrower or any of its Subsidiaries, an irrevocable standby letter of
credit denominated in Dollars, in a form customarily used by the Issuing Bank
or in such other form as has been approved by the Issuing Bank (each such
standby letter of credit, a "Standby Letter of Credit") in support of such L/C
Supportable Obligations and (ii) for the account of the Borrower and for the
benefit of sellers of goods to the Borrower or any of its Subsidiaries, an
irrevocable sight documentary letter of credit denominated in Dollars in a form
customarily used by such Issuing Bank or in such other form as has been
approved by such Issuing Bank (each such documentary letter of credit, a "Trade
Letter of Credit", and each such Trade Letter of Credit and each Standby Letter
of Credit, a "Letter of Credit") in support of commercial transactions of the
Borrower and its Subsidiaries.
(b) Each Issuing Bank may agree, in its sole discretion, and
BTCo hereby agrees that, in the event a requested Letter of Credit is not
issued by one of the other Issuing Banks, it will (subject to the terms and
conditions contained herein), at any time and from time to time on or after the
Initial Borrowing Date and prior to the Revolving Loan Maturity Date, following
its receipt of the respective Letter of Credit Request, issue for the account
of the Borrower one or more Letters of Credit (i) in the case of Standby
Letters of Credit, in support of such L/C Supportable Obligations of the
Borrower or any of its Subsidiaries as is permitted to remain outstanding
without giving rise to a Default or an Event of Default hereunder and (ii) in
the case of Trade Letters of Credit, in support of sellers of goods as
referenced in Section 2.01(a), provided that the respective Issuing Bank shall
be under no obligation to issue any Letter of Credit of the types described
above if at the time of such issuance:
(A) any order, judgment or decree of any governmental
authority or arbitrator shall purport by its terms to enjoin or
restrain such Issuing Bank from issuing such Letter of Credit or any
requirement of law applicable to such Issuing Bank or any request or
directive (whether or not having the force of law) from any
governmental authority with jurisdiction over such Issuing Bank shall
prohibit, or request that such Issuing Bank refrain from, the issuance
of letters of credit generally or such Letter of Credit in particular
or shall impose
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upon such Issuing Bank with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which such Issuing
Bank is not otherwise compensated including, without limitation by
reimbursement from the Borrower) not in effect on the date hereof, or
any unreimbursed loss, cost or expense which was not applicable, in
effect or known to such Issuing Bank as of the date hereof and which
such Issuing Bank in good faith deems material to it; or
(B) such Issuing Bank shall have received notice from any
Bank prior to the issuance of such Letter of Credit of the type
described in the penultimate sentence of Section 2.02(b).
(c) Notwithstanding the foregoing, (i) no Letter of Credit
shall be issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such time would
exceed either (A) $5,000,000 or (B) when added to the aggregate principal
amount of all Revolving Loans made by Non-Defaulting Banks and then
outstanding, an amount equal to the Adjusted Total Revolving Loan Commitment at
such time, and (ii) each Letter of Credit shall by its terms terminate on or
before the earlier of (A) (1) in the case of Standby Letters of Credit, the
date which occurs 12 months after the date of the issuance thereof (although
any such Standby Letter of Credit may be extendable for successive periods of
up to 12 months each, but not beyond one Business Day prior to the Revolving
Loan Maturity Date, on terms acceptable to the Issuing Bank thereof) and (2) in
the case of Trade Letters of Credit, the date which occurs 180 days after the
date of issuance thereof, or (B) the Revolving Loan Maturity Date.
2.02 Letter of Credit Requests. (a) Whenever the Borrower
desires that a Letter of Credit be issued for its account, the Borrower shall
give the Agent and the respective Issuing Bank at least two Business Days' (or
such shorter period as is acceptable to the respective Issuing Bank) written
notice thereof. Each notice shall be in the form of Exhibit C attached hereto
(each a "Letter of Credit Request").
(b) The making of each Letter of Credit Request shall be
deemed to be a representation and warranty by the Borrower that such Letter of
Credit may be issued in accordance with, and will not violate the requirements
of, Section 2.01(c). Unless the respective Issuing Bank has received notice
from any Bank before it issues a Letter of Credit that one or more of the
conditions specified in Section 5 or Section 6 are not then satisfied, or that
the issuance of such Letter of Credit would violate Section 2.01(c), then such
Issuing Bank shall issue the requested Letter of Credit for the account of the
Borrower in accordance with such Issuing Bank's usual and customary practices.
Upon its issuance of or amendment to any Letter of Credit, such Issuing Bank
shall promptly notify each Bank participating therein of such issuance or
amendment and such notice shall be accompanied by a copy of the issued Letter
of Credit or amendment, as the case may be.
2.03 Letter of Credit Participations. (a) Immediately upon
the issuance by any Issuing Bank of any Letter of Credit, such Issuing Bank
shall be deemed to have sold and transferred
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to each Bank with a Revolving Loan Commitment, other than such Issuing Bank
(each such Bank, in its capacity under this Section 2.03, a "Participant"), and
each such Participant shall be deemed irrevocably and unconditionally to have
purchased and received from such Issuing Bank, without recourse or warranty, an
undivided interest and participation, to the extent of such Participant's
Adjusted Percentage in such Letter of Credit, each drawing made thereunder and
the obligations of the Borrower under this Agreement with respect thereto, and
any security therefor or guaranty pertaining thereto. Upon any change in the
Revolving Loan Commitments or Adjusted Percentages of the Banks pursuant to
Section 1.13 or 13.04 or as a result of a Bank Default, it is hereby agreed
that, with respect to all outstanding Letters of Credit and Unpaid Drawings,
there shall be an automatic adjustment to the participations pursuant to this
Section 2.03 to reflect the new Adjusted Percentages of the assignor and
assignee Bank or of all Banks with Revolving Loan Commitments, as the case may
be.
(b) In determining whether to pay under any Letter of Credit,
such Issuing Bank shall have no obligation relative to the other Banks other
than to confirm that any documents required to be delivered under such Letter
of Credit appear to have been delivered and that they appear to comply on their
face with the requirements of such Letter of Credit. Any action taken or
omitted to be taken by such Issuing Bank under or in connection with any Letter
of Credit if taken or omitted in the absence of gross negligence or willful
misconduct, shall not create for such Issuing Bank any resulting liability to
the Borrower or any Bank.
(c) In the event that any Issuing Bank makes any payment
under any Letter of Credit and the Borrower shall not have reimbursed such
amount in full to such Issuing Bank pursuant to Section 2.04(a), such Issuing
Bank shall promptly notify the Agent, which shall promptly notify each
Participant of such failure, and each Participant shall promptly and
unconditionally pay to such Issuing Bank the amount of such Participant's
Adjusted Percentage of such unreimbursed payment in Dollars and in same day
funds. If the Agent so notifies, prior to 11:00 A.M. (New York time) on any
Business Day, any Participant required to fund a payment under a Letter of
Credit, such Participant shall make available to such Issuing Bank in Dollars
such Participant's Adjusted Percent age of the amount of such payment on such
Business Day in same day funds. If and to the extent such Participant shall not
have so made its Adjusted Percentage of the amount of such payment available to
such Issuing Bank, such Participant agrees to pay to such Issuing Bank,
forthwith on demand such amount, together with interest thereon, for each day
from such date until the date such amount is paid to such Issuing Bank at the
overnight Federal Funds Rate. The failure of any Participant to make available
to such Issuing Bank its Adjusted Percentage of any payment under any Letter of
Credit shall not relieve any other Participant of its obligation hereunder to
make available to such Issuing Bank its Adjusted Percentage of any Letter of
Credit on the date required, as specified above, but no Participant shall be
responsible for the failure of any other Participant to make available to such
Issuing Bank such other Participant's Adjusted Percentage of any such payment.
(d) Whenever any Issuing Bank receives a payment of a
reimbursement obligation as to which it has received any payments from the
Participants pursuant to clause (c) above, such Issuing Bank shall pay to each
Participant which has paid its Adjusted Percentage thereof, in Dollars
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and in same day funds, an amount equal to such Participant's share (based upon
the proportionate aggregate amount originally funded by such Participant to the
aggregate amount funded by all Participants) of the principal amount of such
reimbursement obligation and interest thereon accruing after the purchase of
the respective participations.
(e) Upon the request of any Participant, each Issuing Bank
shall furnish to such Participant copies of any Letter of Credit issued by it
and such other documentation as may reasonably be requested by such
Participant.
(f) The obligations of the Participants to make payments to
each Issuing Bank with respect to Letters of Credit issued by it shall be
irrevocable and not subject to any qualification or exception whatsoever and
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other
right which the Borrower or any of its Subsidiaries may have at any
time against a beneficiary named in a Letter of Credit, any transferee
of any Letter of Credit (or any Person for whom any such transferee
may be acting), the Agent, any Participant, or any other Person,
whether in connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions
(including any underlying transaction between the Borrower and the
beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any 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) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
2.04 Agreement to Repay Letter of Credit Drawings. (a) The
Borrower hereby agrees to reimburse the respective Issuing Bank, by making
payment to the Agent in immediately available funds at the Payment Office, for
any payment or disbursement made by such Issuing Bank under any Letter of
Credit issued by such Issuing Bank (each such amount, so paid until reimbursed,
an "Unpaid Drawing"), no later than three Business Days after the date of such
payment or disbursement, with interest on the amount so paid or disbursed by
such Issuing Bank, to the extent not reimbursed prior to 1:00 P.M. (New York
time) on the date of such payment or disbursement, from and including the date
paid or disbursed to but excluding the date such Issuing Bank was
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reimbursed by the Borrower therefor at a rate per annum which shall be the Base
Rate in effect from time to time plus the Applicable Margin for Revolving Loans
maintained as Base Rate Loans; provided, however, that to the extent such
amounts are not reimbursed prior to 1:00 P.M. (New York time) on the fifth
Business Day following such payment or disbursement, interest shall thereafter
accrue on the amounts so paid or disbursed by such Issuing Bank (and until
reimbursed by the Borrower) at a rate per annum which shall be the Base Rate in
effect from time to time plus the Applicable Margin for Revolving Loans
maintained as Base Rate Loans plus 2%, in each such case, with interest to be
payable on demand. The respective Issuing Bank shall give the Borrower prompt
notice of each Drawing under any Letter of Credit, provided that the failure to
give any such notice shall in no way affect, impair or diminish the Borrower's
obligations hereunder.
(b) The obligations of the Borrower under this Section 2.04
to reimburse the respective Issuing Bank with respect to drawings on Letters of
Credit (each, a "Drawing") (including, in each case, interest thereon) shall be
absolute and unconditional under any and all circumstances and irrespective of
any setoff, counterclaim or defense to payment which the Borrower may have or
have had against any Bank (including in its capacity as issuer of the Letter of
Credit or as Participant), or any nonapplication or misapplication by the
beneficiary of the proceeds of such Drawing, the respective Issuing Bank's only
obligation to the Borrower being to confirm that any documents required to be
delivered under such Letter of Credit appear to have been delivered and that
they appear to comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by any Issuing Bank under or in
connection with any Letter of Credit if taken or omitted in the absence of
gross negligence or willful misconduct, shall not create for such Issuing Bank
any resulting liability to the Borrower.
2.05 Increased Costs. If at any time after the date of this
Agreement, the introduction of or any change in any applicable law, rule,
regulation, order, guideline or request or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Issuing Bank or
any Participant with any request or directive by any such authority (whether or
not having the force of law), or any change in generally acceptable accounting
principles, shall either (i) impose, modify or make applicable any reserve,
deposit, capital adequacy or similar requirement against Letters of Credit
issued by any Issuing Bank or participated in by any Participant, or (ii)
impose on any Issuing Bank or any Participant any other conditions relating,
directly or indirectly, to this Agreement or any Letter of Credit; and the
result of any of the foregoing is to increase the cost to any Issuing Bank or
any Participant of issuing, maintaining or participating in any Letter of
Credit, or reduce the amount of any sum received or receivable by any Issuing
Bank or any Participant hereunder or reduce the rate of return on its capital
with respect to Letters of Credit (except for changes in the rate of tax on, or
determined by reference to, the net income or profits of such Issuing Bank or
such Participant, or any franchise tax based on the net income or profits of
such Bank or Participant, in either case pursuant to the laws of the United
States of America, the jurisdiction in which it is organized or in which its
principal office or applicable lending office is located or any subdivision
thereof or therein), but without duplication of any amounts payable in respect
of Taxes pursuant to Section 4.04(a), then, upon demand to the Borrower by such
Issuing Bank or any Participant (a copy of which demand shall be
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sent by such Issuing Bank or such Participant to the Agent) and subject to the
provisions of Section 13.15 (to the extent applicable), the Borrower shall pay
to such Issuing Bank or such Participant such additional amount or amounts as
will compensate such Bank for such increased cost or reduction in the amount
receivable or reduction on the rate of return on its capital. Any Issuing Bank
or any Participant, upon determining that any additional amounts will be
payable pursuant to this Section 2.05, will give prompt written notice thereof
to the Borrower, which notice shall include a certificate submitted to the
Borrower by such Issuing Bank or such Participant (a copy of which certificate
shall be sent by such Issuing Bank or such Participant to the Agent), setting
forth in reasonable detail the basis for the calculation of such additional
amount or amounts necessary to compensate such Issuing Bank or such
Participant. The certificate required to be delivered pursuant to this Section
2.05 shall, if delivered in good faith and absent manifest error, be final and
conclusive and binding on the Borrower.
SECTION 3. COMMITMENT COMMISSION; FEES; REDUCTIONS OF
COMMITMENT.
3.01 Fees. (a) The Borrower agrees to pay to the Agent for
distribution to each Non-Defaulting Bank a commitment commission (the
"Commitment Commission") for the period from and including the Effective Date
to but not including the date the Revolving Loan Commitments have been
terminated, computed at the rate of 1/2 of 1% per annum on the daily average
Aggregate Unutilized Commitments of such Bank. Accrued Commitment Commissions
shall be due and payable quarterly in arrears on each Quarterly Payment Date
and the date upon which the Revolving Loan Commitments are terminated.
(b) The Borrower agrees to pay to the Agent for distribution
to each Non-Defaulting Bank with a Revolving Loan Commitment (based on their
respective Adjusted Percentages) a fee in respect of each Letter of Credit
issued hereunder (the "Letter of Credit Fee"), for the period from and
including the date of issuance of such Letter of Credit to and including the
date of termination of such Letter of Credit, computed at a rate per annum
equal to the difference between (i) the Applicable Margin for Revolving Loans
which are maintained as Eurodollar Loans as in effect from time to time and
(ii) 1/4 of 1% on the daily Stated Amount of such Letter of Credit. Accrued
Letter of Credit Fees shall be due and payable quarterly in arrears on each
Quarterly Payment Date and upon the first day on or after the termination of
the Total Revolving Loan Commitment upon which no Letters of Credit remain
outstanding.
(c) The Borrower agrees to pay to the respective Issuing
Bank, for its own account, a facing fee in respect of each Letter of Credit
issued for its account hereunder (the "Facing Fee") for the period from and
including the date of issuance of such Letter of Credit to and including the
termination of such Letter of Credit, computed at a rate equal to 1/4 of 1% per
annum of the daily Stated Amount of such Letter of Credit; provided, however,
that in no event shall the annual Facing Fee with respect to each Letter of
Credit be less than $500, it being agreed that, on the date of issuance of any
Letter of Credit and on each anniversary thereof prior to the date of
termination of such Letter of Credit, if $500 will exceed the amount of Facing
Fees that will accrue with respect to such Letter of Credit for the immediately
succeeding 12-month period, the full $500 shall be
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payable on the date of issuance of such Letter of Credit and on each such
anniversary thereof prior to the termination of such Letter of Credit. Accrued
Facing Fees shall be due and payable quarterly in arrears on each Quarterly
Payment Date and on the date upon which the Total Revolving Loan Commitment has
been terminated and such Letter of Credit has been terminated in accordance
with its terms.
(d) The Borrower shall pay to the Issuing Bank, upon each
payment under, issuance of, or amendment to, any Letter of Credit, such amount
as shall at the time of such event be the administrative charge and
out-of-pocket expenses which the respective Issuing Bank is generally imposing
in connection with such occurrence with respect to letters of credit.
(e) The Borrower shall pay to the Agent, for its own
account, such other fees as have been agreed to in writing by the Borrower and
the Agent.
3.02 Voluntary Termination of Unutilized Commitments. (a)
Upon at least two Business Days' prior written notice (or telephonic notice
promptly confirmed in writing) to the Agent at its Notice Office (which notice
the Agent shall promptly transmit to each of the Banks), the Borrower shall
have the right, at any time or from time to time, without premium or penalty,
to terminate (i) if prior to the Initial Borrowing Date, the Total Revolving
Loan Commitment (and the Revolving Loan Commitments of each Bank), in whole, or
(ii) if after the Initial Borrowing Date the Total Unutilized Revolving Loan
Commitment, in whole or in part, in integral multiples of $200,000 in the case
of partial reductions to the Total Unutilized Revolving Loan Commitment,
provided that (A) each such reduction shall apply proportionately to
permanently reduce the Revolving Loan Commitment of each Bank and (B) the
reduction to the Total Unutilized Revolving Loan Commitment shall in no case be
in an amount which would cause the Revolving Loan Commitment of any Bank to be
reduced (as required by preceding clause (A)) by an amount which exceeds the
Unutilized Revolving Loan Commitment of such Bank as in effect immediately
before giving effect to such reduction.
(b) In the event of certain refusals by a Bank as provided
in Section 13.12(b) to consent to certain proposed changes, waivers, discharges
or terminations with respect to this Agreement which have been approved by the
Required Banks, the Borrower may, upon five Business Days' written notice to
the Agent at its Notice Office (which notice the Agent shall promptly transmit
to each of the Banks) terminate all of the Revolving Loan Commitment of such
Bank so long as all Loans, together with accrued and unpaid interest, Fees and
all other amounts, owing to such Bank are repaid concurrently with the
effectiveness of such termination (at which time Schedule I shall be deemed
modified to reflect such changed amounts), and at such time such Bank shall no
longer constitute a "Bank" for purposes of this Agreement, except with respect
to indemnifications under this Agreement (including, without limitation,
Sections 1.10, 1.11, 2.05, 4.04, 13.01 and 13.06), which shall survive (subject
to Section 13.15) as to such repaid Bank.
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3.03 Mandatory Reduction of Commitments. (a) The Total
Revolving Loan Commitment (and the Revolving Loan Commitment of each Bank)
shall terminate in its entirety on December 31, 1996 unless the Initial
Borrowing Date shall have occurred on or prior to such date.
(b) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Revolving Loan Commitment (and the
Revolving Loan Commitment of each Bank) shall terminate in its entirety on the
Revolving Loan Maturity Date.
(c) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, on each date after the Initial Borrowing Date
upon which a mandatory reduction of the Total Revolving Loan Commitment
pursuant to Section 4.02 is required, the Total Revolving Loan Commitment shall
be permanently reduced by the amount required to be applied pursuant to said
Section.
(d) Each reduction to the Total Revolving Loan Commitment
pursuant to this Section 3.03 (or pursuant to Section 4.02) shall be applied
proportionately to reduce the Revolving Loan Commitment of each Bank.
SECTION 4. PREPAYMENTS; PAYMENTS; TAXES.
4.01 Voluntary Prepayments. The Borrower shall have the right
to prepay the Loans, without premium or penalty, in whole or in part at any
time and from time to time on the following terms and conditions: (i) the
Borrower shall give the Agent prior to 12:00 Noon (New York time) at its Notice
Office (A) on the date that a prepayment of Base Rate Loans is to be made prior
written notice (or telephonic notice promptly confirmed in writing) of its
intent to prepay Base Rate Loans and (B) at least three Business Days' prior
written notice (or telephonic notice promptly confirmed in writing) of its
intent to prepay Eurodollar Loans, the amount of such prepayment and the Types
of Loans to be prepaid and, in the case of Eurodollar Loans, the specific
Borrowing or Borrowings pursuant to which made, which notice the Agent shall
promptly transmit to each of the Banks; (ii) each prepayment shall be in an
aggregate principal amount of at least $50,000, provided that if any partial
prepayment of Eurodollar Loans made pursuant to any Borrowing shall reduce the
outstanding Eurodollar Loans made pursuant to such Borrowing to an amount less
than $200,000, then such Borrowing may not be continued as a Borrowing of
Eurodollar Loans and any election of an Interest Period with respect thereto
given by the Borrower shall have no force or effect; (iii) prepayments of
Eurodollar Loans made pursuant to this Section 4.01 on any day other than the
last day of an Interest Period applicable thereto shall be accompanied by the
amounts required under Section 1.11; (iv) each prepayment in respect of any
Revolving Loans made pursuant to a Borrowing shall, except as set forth in
clause (v) below, be applied pro rata among the Banks which made such Revolving
Loans; and (v) in the event of certain refusals by a Bank as provided in
Section 13.12(b) to consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been approved by the
Required Banks, the Borrower may, upon five Business Days' written notice to
the Agent at its Notice Office (which notice the Agent shall promptly transmit
to each of the Banks) repay all Revolving Loans, together with accrued and
unpaid interest, Fees,
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and other amounts owing to such Bank in accordance with said Section 13.12(b)
so long as (A) the Revolving Loan Commitment of such Bank is terminated
concurrently with such repayment (at which time Schedule I shall be deemed
modified to reflect the changed Revolving Loan Commitments) and (B) the
consents required by Section 13.12(b) in connection with the repayment pursuant
to this clause (v) have been obtained; provided, however, that at the
Borrower's election in connection with any prepayment of Revolving Loans
pursuant to this Section 4.01, such prepayment shall not be applied to any
Revolving Loan of a Defaulting Bank.
4.02 Mandatory Repayments and Commitment Reductions. (a) (i)
On any day on which the sum of the aggregate outstanding principal amount of
the Revolving Loans made by Non-Defaulting Banks and the Letter of Credit
Outstandings exceeds the Adjusted Total Revolving Loan Commitment as then in
effect, the Borrower shall prepay Revolving Loans of Non-Defaulting Banks in an
amount equal to such excess. If, after giving effect to the prepayment of all
outstanding Revolving Loans of Non-Defaulting Banks, the aggregate amount of
the Letter of Credit Outstandings exceeds the Adjusted Total Revolving Loan
Commitment as then in effect, the Borrower shall pay to the Agent at the
Payment Office on such date an amount of cash or Cash Equivalents equal to the
amount of such excess (up to a maximum amount equal to the Letter of Credit
Outstandings at such time), such cash or Cash Equivalents to be held as
security for all obligations of the Borrower to Non-Defaulting Banks hereunder
in a cash collateral account to be established by the Agent.
(ii) On any day on which the aggregate outstanding principal
amount of the Revolving Loans made by any Defaulting Bank exceeds the Revolving
Loan Commitment of such Defaulting Bank, the Borrower shall prepay principal of
Revolving Loans of such Defaulting Bank in an amount equal to such excess.
(b) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date after the
Effective Date upon which Holdings or any of its Subsidiaries receives proceeds
from any sale of assets (including capital stock and securities held thereby,
but excluding (i) sales or transfers of inventory in the ordinary course of
business (including, without limitation, sales or transfers of inventory to
Subsidiaries at fair market value), (ii) the sale or other disposition of
obsolete equipment, (iii) the sales of overdue receivables in the ordinary
course of business, (iv) the licensing of general intangibles in the ordinary
course of business, (v) the first $1,000,000 of Net Sale Proceeds in any Fiscal
Year from sales of other assets after the Effective Date and (vi) sales of
assets between the Borrower and its Wholly-Owned Subsidiaries and/or sales of
assets between Wholly-Owned Subsidiaries of the Borrower, in each case to the
extent permitted by Section 9.02), an amount equal to 100% of the Net Sale
Proceeds therefrom shall be applied (i) as a mandatory reduction to the Total
Revolving Loan Commitment and (ii) as a mandatory repayment of principal of
outstanding Revolving Loans, all in accordance with the requirements of
Sections 4.02(d) and (e); provided, however, that up to an aggregate of
$5,000,000 of Net Sale Proceeds in any Fiscal Year shall not be required to be
used as a mandatory commitment reduction and repayment to the extent the
Borrower elects, as hereinafter provided, to cause such Net Sale Proceeds to be
reinvested in Reinvestment Assets (a "Reinvestment Election"). The Borrower
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may exercise its Reinvestment Election (within the parameters specified in the
preceding sentence) with respect to a sale of assets if (x) no Default or Event
of Default exists and (y) the Borrower delivers a Reinvestment Notice to the
Agent on or prior to the date of the consummation of the respective sale of
assets, with such Reinvestment Election being effective with respect to the Net
Sale Proceeds of such sale of assets equal to the Anticipated Reinvestment
Amount specified in such Reinvestment Notice.
(c) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, within 10 days following
each date after the Effective Date on which Holdings or any of its Subsidiaries
receives any proceeds from any Recovery Event, an amount equal to 100% of the
proceeds of such Recovery Event (net of reasonable costs including, without
limitation, legal costs and expenses, and taxes incurred in connection with
such Recovery Event and other than the proceeds of business interruption
insurance) shall be applied, (i) as a mandatory reduction to the Total
Revolving Loan Commitment and (ii) as a mandatory repayment of principal of
outstanding Revolving Loans, all in accordance with the requirements of
Sections 4.02(d) and (e); provided, however, that (A) so long as no Default or
Event of Default then exists and such proceeds do not exceed $5,000,000, such
proceeds shall not be required to be so applied on such date to the extent that
the Borrower has delivered a certificate to the Agent on or prior to such date
stating that such proceeds shall be used or shall be committed to be used to
replace or restore any properties or assets in respect of which such proceeds
were paid within one year following the date of such Recovery Event (which
certificate shall set forth the estimates of the proceeds to be so expended)
and (B) so long as no Default or Event of Default then exists and to the extent
that (1) the amount of such proceeds exceeds $5,000,000, (2) the amount of such
proceeds, together with other cash available to the Borrower and permitted to
be spent by it on Capital Expenditures during the relevant period pursuant to
Section 9.07, equals 100% of the cost of replacement or restoration of the
properties or assets in respect of which such proceeds were paid as determined
by the Borrower and as supported by such estimates or bids from contractors or
subcontractors or such other supporting information as the Agent may reasonably
request, (3) the Borrower has delivered to the Agent a certificate on or prior
to the date the application would otherwise be required pursuant to this
Section 4.02(c) in the form described in clause (A) above and also certifying
its determination as required by preceding clause (2) and certifying the
sufficiency of business interruption insurance as required by succeeding clause
(4), and (4) the Borrower has delivered to the Agent such evidence as the Agent
may reasonably request in form and substance reasonably satisfactory to the
Agent establishing that the Borrower has sufficient business interruption
insurance and that the Borrower will be receiving regular payments thereunder
in such amounts and at such times as are necessary to satisfy all obligations
and expenses of the Borrower (including, without limitation, all debt service
requirements, including pursuant to this Agreement) without any delay or
extension thereof, for the period from the date of the respective casualty,
condemnation or other event giving rise to the Recovery Event and continuing
through the completion of the replacement or restoration of respective
properties or assets, then the entire amount of the proceeds of such Recovery
Event and not just the portion in excess of $5,000,000 shall be deposited with
the Agent pursuant to a cash collateral arrangement reasonably satisfactory to
the Agent whereby such proceeds shall be disbursed to the Borrower from time to
time as needed to pay actual costs incurred by it in connection with the
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replacement or restoration of the respective properties or assets (pursuant to
such certification requirements as may reasonably be established by the Agent);
and provided further that at any time while an Event of Default has occurred
and is continuing (other than an Event of Default existing solely as a result
of the violation of any or all of Sections 9.08 through 9.10, inclusive, but in
each case only if, and to the extent, that the violation of said covenant has
occurred as a result of the underlying event giving rise to the Recovery
Event), the Required Banks may direct the Agent (in which case the Agent shall,
and is hereby authorized by the Borrower to, follow said directions) to apply
any or all proceeds then on deposit in such collateral account to the repayment
of Obligations hereunder in the same manner as proceeds would be applied
pursuant to the Security Agreement; and provided further that if all or any
portion of such proceeds not required to be applied to the reduction of the
Total Revolving Loan Commitment and the repayment of Revolving Loans pursuant
to the second preceding proviso (whether pursuant to clause (A) or (B) thereof)
are either (x) not so used or committed to be so used within one year after the
date of the respective Recovery Event or (y) if committed to be used within one
year after the date of receipt of such proceeds and not so used within 18
months after the date of the respective Recovery Event then, in either such
case, such remaining portion not used or committed to be used in the case of
preceding clause (x) and not used in the case of preceding clause (y) shall be
applied on the date which is the first anniversary of the date of the
respective Recovery Event in the case of clause (x) above or the date occurring
18 months after the date of the respective Recovery Event in the case of clause
(y) above as a mandatory reduction to the Total Revolving Loan Commitment and
as a mandatory repayment of principal of outstanding Revolving Loans in
accordance with the requirements of Sections 4.02(d) and (e).
(d) The amount of each principal repayment of Revolving Loans
(and the amount of each reduction to the Total Revolving Loan Commitment) made
as required by Sections 4.02(b) through (c) and (e) shall be applied
proportionably to each Bank to reduce the Revolving Loans and Revolving Loan
Commitment of each Bank.
(e) With respect to each repayment of Loans required by this
Section 4.02, the Borrower may designate the Types of Loans which are to be
repaid and, in the case of Eurodollar Loans, the specific Borrowing or
Borrowings pursuant to which made, provided that: (i) repayments of Eurodollar
Loans pursuant to this Section 4.02 may only be made on the last day of an
Interest Period applicable thereto unless all Eurodollar Loans with Interest
Periods ending on such date of required repayment and all Base Rate Loans have
been paid in full; and (ii) if any repayment of Eurodollar Loans made pursuant
to a single Borrowing shall reduce the outstanding Eurodollar Loans made
pursuant to such Borrowing to an amount less than $200,000, such Borrowing
shall be converted at the end of the then current Interest Period into a
Borrowing of Base Rate Loans. In the absence of a designation by the Borrower
as described in the preceding sentence, the Agent shall, subject to the above,
make such designation in its sole discretion with a view, but no obligation, to
minimize breakage costs owing under Section 1.11. Notwithstanding the foregoing
provisions of this Section 4.02, if any time the mandatory prepayment of
Revolving Loans pursuant to Sections 4.02(b) through (d) above or a repayment
arising out of the application of Section 9.05(ii) would result, after giving
effect to the procedures set forth above, in the Borrower incurring breakage
costs under Section 1.11 as a result of Eurodollar Loans being prepaid other
than on the last day of an
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Interest Period applicable thereto (the "Affected Eurodollar Loans"), then the
Borrower may, in its sole discretion, initially deposit a portion (up to 100%)
of the amounts that otherwise would have been paid in respect of the Affected
Eurodollar Loans with the Agent (which deposit must be equal in amount to the
amount of Affected Eurodollar Loans not immediately prepaid) to be held as
security for the obligations of the Borrower hereunder pursuant to a cash
collateral agreement to be entered into in form and substance reasonably
satisfactory to the Agent, with such cash collateral to be directly applied
upon the first occurrence (or occurrences) thereafter of the last day of an
Interest Period applicable to the relevant Revolving Loans that are Eurodollar
Loans (or such earlier date or dates as shall be requested by the Borrower), to
repay an aggregate principal amount of such Revolving Loans equal to the
Affected Eurodollar Loans not initially repaid pursuant to this sentence.
Notwithstanding anything to the contrary contained in the immediately preceding
sentence, all amounts deposited as cash collateral pursuant to the immediately
preceding sentence shall be held for the sole benefit of the Banks whose
Revolving Loans would otherwise have been immediately repaid with the amounts
deposited and upon the taking of any action by the Agent or the Banks pursuant
to the remedial provisions of Section 10, any amounts held as cash collateral
pursuant to this Section 4.02(e) shall, subject to the requirements of
applicable law, be immediately applied to the Revolving Loans.
(f) On the Reinvestment Prepayment Date with respect to a
Reinvestment Election, an amount equal to the Reinvestment Prepayment Amount,
if any, for such Reinvestment Election shall be applied as a repayment of the
principal amount of the then outstanding Revolving Loans in accordance with the
requirements of Sections 4.02(d) and (e).
4.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement or any
Revolving Note shall be made to the Agent for the account of the Bank or Banks
entitled thereto not later than 1:00 P.M. (New York time) on the date when due
and shall be made in Dollars in immediately available funds at the Payment
Office of the Agent. Whenever any payment to be made hereunder or under any
Revolving Note shall be stated to be due on a day which is not a Business Day,
the due date thereof shall be extended to the next succeeding Business Day and,
with respect to payments of principal, interest shall be payable at the
applicable rate during such extension.
4.04 Net Payments. (a) All payments made by the Borrower
hereunder or under any Revolving Note will be made without setoff, counterclaim
or other defense. Except as provided in Section 4.04(b), all such payments will
be made free and clear of, and without deduction or with holding for, any
present or future taxes, levies, imposts, duties, fees, assessments or other
charges of whatever nature now or hereafter imposed by any jurisdiction or by
any political subdivision or taxing authority thereof or therein with respect
to such payments (but excluding, except as provided in the second succeeding
sentence, any tax imposed on or measured by the net income or profits of a
Bank, or any franchise tax based on the net income or profits of a Bank, in
either case pursuant to the laws of the United States of America, the
jurisdiction in which it is organized or the jurisdiction in which the
principal office or applicable lending office of such Bank is located or any
subdivision thereof or therein) and all interest, penalties or similar
liabilities with respect thereto (all such
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nonexcluded taxes, levies, imports, duties, fees, assessments or other charges
being referred to collectively as "Taxes"). If any such Taxes are so levied or
imposed, the Borrower agrees to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all amounts due
under this Agreement or under any Revolving Note, after withholding or
deduction for or on account of any Taxes, will not be less than the amount
provided for herein or in such Revolving Note. If any amounts are payable in
respect of Taxes pursuant to the preceding sentence, the Borrower agrees to
reimburse each Bank, upon the written request of such Bank, for taxes imposed
on or measured by the net income or profits of such Bank, or any franchise tax
based on the net income or profits of such Bank, in either case pursuant to the
laws of the jurisdiction in which the principal office or applicable lending
office of such Bank is located or under the laws of any political subdivision
or taxing authority of any such jurisdiction in which the principal office or
applicable lending office of such Bank is located and for any withholding of
income or similar taxes imposed by the United States of America as such Bank
shall determine are payable by, or withheld from, such Bank in respect of such
amounts so paid to or on behalf of such Bank pursuant to the preceding sentence
and in respect of any amounts paid to or on behalf of such Bank pursuant to
this sentence. The Borrower will furnish to the Agent within 45 days after the
date the payment of any Taxes is due pursuant to applicable law certified
copies of tax receipts evidencing such payment by the Borrower. The Borrower
agrees to indemnify and hold harmless each Bank, and reimburse such Bank upon
its written request, for the amount of any Taxes so levied or imposed and paid
by such Bank.
(b) Each Bank which is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes agrees (i) in the case of any such Bank that is a "bank" within the
meaning of Section 881(c)(3)(A) of the Code and which constitutes a Bank
hereunder on the Initial Borrowing Date, to provide to the Borrower and the
Agent on or prior to the Initial Borrowing Date two original signed copies of
Internal Revenue Service Form 4224 or Form 1001 certifying to such Bank's
entitlement to an exemption from United States withholding tax with respect to
payments to be made under this Agreement and under any Revolving Note, (ii) in
the case of any such Bank that is a "bank" within the meaning of Section
881(c)(3)(A) of the Code, that, to the extent legally entitled to do so, (A)
with respect to a Bank that is an assignee or transferee of an interest under
this Agreement pursuant to Section 1.13 or 13.04 (unless the respective Bank
was already a Bank hereunder immediately prior to such assignment or transfer),
upon the date of such assignment or transfer to such Bank, and (B) with respect
to any such Bank, from time to time upon the reasonable written request of the
Borrower or the Agent after the Initial Borrowing Date, such Bank will provide
to the Borrower and the Agent two original signed copies of Internal Revenue
Service Form 4224 or Form 1001 (or any successor forms) certifying to such
Bank's entitlement to an exemption from, or reduction in, United States
withholding tax with respect to payments to be made under this Agreement and
under any Revolving Note, (iii) in the case of any such Bank (other than a Bank
described in clause (i) or (ii) above) which constitutes a Bank hereunder on
the Initial Borrowing Date, to provide to the Borrower and the Agent, on or
prior to the Initial Borrowing Date (A) a certificate substantially in the form
of Exhibit D attached hereto (any such certificate, a "Section 4.04(b)(iii)
Certificate") and (B) two accurate and complete original signed copies of
Internal Revenue Service Form W-8, certifying to such Bank's entitlement at the
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date of such certificate (assuming compliance by the Borrower with Section
13.17) to an exemption from U.S. withholding tax under the provisions of
Section 881(c) of the Code with respect to payments to be made under this
Agreement and under any Revolving Note and (iv) in the case of any such Bank
(other than a Bank described in clause (i) or (ii) above), to the extent
legally entitled to do so, (A) with respect to a Bank that is an assignee or
transferee of an interest under this Agreement pursuant to Section 1.13 or
13.04 (unless the respective Bank was already a Bank hereunder immediately
prior to such assignment or transfer), upon the date of such assignment or
transfer to such Bank, and (B) with respect to any such Bank, from time to time
upon the reasonable written re quest of the Borrower or the Agent after the
Initial Borrowing Date, to provide to the Borrower and the Agent such other
forms as may be required in order to establish the entitlement of such Bank to
an exemption from or reduction in withholding with respect to payments under
this Agreement and under any Revolving Note. Notwithstanding anything to the
contrary contained in Section 4.04(a), but subject to the immediately
succeeding sentence, the Borrower shall be entitled, to the extent it is
required to do so by law, to deduct or withhold income or similar taxes imposed
by the United States (or any political subdivision or taxing authority thereof
or therein) from interest, fees or other amounts payable hereunder (without any
obligation to pay the respective Bank additional amounts with respect thereto)
for the account of any Bank which is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes and which has not provided to the Borrower such forms required to be
provided to the Borrower pursuant to the first sentence of this Section 4.04(b)
(or to the extent such forms do not establish a complete exemption from such
withholding). Notwithstanding anything to the contrary contained in the
preceding sentence or elsewhere in this Section 4.04 and except as set forth
in Section 13.04(b), the Borrower agrees to indemnify each Bank in the manner
set forth in Section 4.04(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any amounts
deducted or withheld by it as described in the immediately preceding sentence
as a result of any changes after the Effective Date in any applicable law,
treaty, governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of income or
similar Taxes.
(c) The provisions of this Section 4.04 are subject to the
provisions of Section 13.15 (to the extent applicable).
SECTION 5. CONDITIONS PRECEDENT TO INITIAL CREDIT EVENTS. The
obligation of each Bank to make Revolving Loans, and the obligation of each
Issuing Bank to issue Letters of Credit, on the Initial Borrowing Date, is
subject at the time of the making of such Revolving Loans or the issuance of
such Letters of Credit to the satisfaction of the following conditions:
5.01 Execution of Agreement; Revolving Notes. On or prior to
the Initial Borrowing Date (i) the Effective Date shall have occurred and (ii)
there shall have been delivered to the Agent for the account of each of the
Banks the appropriate Revolving Note executed by the Borrower, in each case in
the amount, maturity and as otherwise provided herein.
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5.02 Fees; etc. On the Initial Borrowing Date,
contemporaneously with the receipt of proceeds of the initial Revolving Loan,
the Borrower shall have paid to the Agent and the Banks all costs, fees and
expenses (including, without limitation, legal fees and expenses) payable to
the Agent and the Banks to the extent then due.
5.03 Opinions of Counsel. On the Initial Borrowing Date, the
Agent shall have received (i) from Vinson & Elkins L.L.P., counsel to the
Credit Parties, an opinion addressed to the Agent and each of the Banks and
dated the Initial Borrowing Date covering the matters set forth in Exhibit E
attached hereto and (ii) from local counsel satisfactory to the Agent, opinions
each of which shall be in form and substance reasonably satisfactory to the
Agent and the Required Banks and shall cover the perfection of the security
interests granted pursuant to the Pledge Agreement, the Security Agreement and
the Mortgages and such other matters incident to the transactions contemplated
herein as the Agent may reasonably request.
5.04 Corporate Documents; Proceedings; etc. (a) On the
Initial Borrowing Date, the Agent shall have received a certificate, dated the
Initial Borrowing Date, signed by an Authorized Officer and attested to by the
Secretary or any Assistant Secretary of such Credit Party, in the form of
Exhibit F attached hereto with appropriate insertions, together with copies of
the Certificate of Incorporation and By-Laws of such Credit Party and the
resolutions of such Credit Party referred to in such certificate, and the
foregoing shall be reasonably acceptable to the Agent.
(b) On the Initial Borrowing Date, all corporate and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Documents shall be
reasonably satisfactory in form and substance to the Agent and the Required
Banks, and the Agent shall have received all information and copies of all
documents and papers, including records of corporate proceedings, governmental
approvals, good standing certificates and bring-down telegrams or facsimiles,
if any, which the Agent reasonably may have requested in connection therewith,
such documents and papers where appropriate to be certified by proper corporate
or governmental authorities.
5.05 Employee Benefit Plans; Shareholders' Agreements;
Management Agreements; Collective Bargaining Agreements; Existing Debt
Agreements; Tax Sharing Agreements. On the Initial Borrowing Date, there shall
have been delivered to the Agent true and correct copies, certified as true and
complete by an appropriate officer of the Borrower of (i) all agreements
entered into by Holdings or any of its Subsidiaries governing the terms and
relative rights of its capital stock and any agreements entered into by
shareholders relating to any such entity with respect to its capital stock
(collectively, the "Shareholders' Agreements"), (ii) all agreements with
members of, or with respect to, the management of Holdings or any of its
Subsidiaries (collectively, the "Management Agreements"), (iii) all collective
bargaining agreements applying or relating to any employee of Holdings or any
of its Subsidiaries (collectively, the "Collective Bargaining Agreements"),
(iv) all agreements evidencing or relating to Indebtedness of Holdings or any
of its Subsidiaries which is to remain outstanding after giving effect to the
incurrence of Loans on the Initial Borrowing Date (collectively, the "Existing
Debt Agreements"); and (v) all agreements
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relating to the sharing of tax liabilities and benefits among Holdings and/or
its Subsidiaries (each a "Tax Sharing Agreement" and collectively, the "Tax
Sharing Agreements"); all of which Employee Benefit Plans, Shareholders'
Agreements, Management Agreements, Collective Bargaining Agree ments, Existing
Debt Agreements and Tax Sharing Agreements shall be in form and substance
reasonably satisfactory to the Agent and the Required Banks and shall be in
full force and effect on
the Initial Borrowing Date.
5.06 Capital Contributions; Stock Repurchase; etc. (a) On or
prior to the Initial Borrowing Date, there shall have been delivered to the
Agent true and correct copies, certified as true and complete by an Authorized
Officer of the Borrower, of the Recapitalization Documents, and all terms and
conditions of the Recapitalization Documents shall be reasonably satisfactory
in form and substance to the Agent. The Recapitalization Documents (and the
transactions contemplated thereby) shall have been duly approved by the board
of directors and (if required by applicable law) the stockholders of Holdings
and the Borrower, and all Recapitalization Documents shall have been duly
executed and delivered by the parties thereto and shall be in full force and
effect. Each of the conditions precedent to the obligations of Holdings and
the Borrower to consummate the Recapitalization as set forth in the
Recapitalization Documents shall have been satisfied and not waived or modified
except with the consent of the Agent, which consent shall not be unreasonably
withheld, all to the reasonable satisfaction of the Agent, and concurrently
with the making of the Revolving Loans on the Initial Borrowing Date the
Recapitalization shall have been consummated in accordance with the
Recapitalization Documents and all applicable laws, rules and regulations.
(b) On the Initial Borrowing Date, (i) the Borrower shall
have received gross cash proceeds in the amount of $100,000,000 from the sale
and issuance of the Senior Subordinated Notes (it being understood that such
cash proceeds shall include all amounts directly applied to pay underwriting
and placement commissions and discounts and related fees) which proceeds are
transferred to Holdings through intercompany loans and/or dividends, and (ii)
Holdings shall have received gross cash proceeds in an amount of at least
$32,000,000 in connection with the purchase by HMTF or an Affiliate thereof of
Holdings Common Stock (the "Equity Issuance") which proceeds, when aggregated
with the proceeds from the Senior Subordinated Notes and up to $3,600,000 of
Revolving Loans incurred by the Borrower on the Initial Borrowing Date, all of
which shall have been used to consummate the Transaction. The Equity Issuance
and the sale and issuance of the Senior Subordinated Notes shall have occurred
in accordance with the terms and conditions of the Recapitalization Documents.
(c) On the Initial Borrowing Date, Holdings shall have
redeemed the Redeemed Shares (the "Stock Redemption") from the Selling
Shareholders, in accordance with the terms and conditions of the
Recapitalization Documents.
(d) On the Initial Borrowing Date, Holdings shall have
purchased the Redeemed Options (the "Options Repurchase") from the Selling
Optionholders, in accordance with the terms and conditions of the
Recapitalization Documents.
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(e) On or prior to the Initial Borrowing Date, each share of
Holdings' Preferred Stock, par value $1.00 per share (the "Redeemable Preferred
Stock") shall be redeemed (the "Preferred Stock Redemption") from Heritage Fund
I, L.P. in accordance with the Recapitalization Documents. After giving effect
to the Preferred Stock Redemption, Holdings shall have no preferred stock
outstanding.
5.07 Refinancing of Existing Credit Agreement. (a) On or
prior to the Initial Borrowing Date or concurrently with the Credit Events then
occurring, the total commitments under the Existing Credit Agreement shall have
been terminated, and all loans and notes issued thereunder shall have been
repaid in full, together with interest thereon, and all other amounts owing
pursuant to the Existing Credit Agreement shall have been repaid in full and
the Existing Credit Agreement shall have been terminated and be of no further
force or effect except for indemnification obligations described therein which
by their terms specifically survive the repayment of the loans thereunder. The
Agent shall have received evidence in form, scope and substance reasonably
satisfactory to it that the matters set forth in this Section 5.07(a) have been
satisfied on such date.
(b) On or prior to the Initial Borrowing Date or
concurrently with the Credit Events then occurring, the creditors under the
Existing Credit Agreement shall have terminated and released all security
interests and Liens on the assets owned or to be owned by the Borrower or any
of its Subsidiaries granted in connection with the Existing Credit Agreement.
The Agent shall have received such releases of security interests in and Liens
on the assets owned or to be owned by the Borrower as may have been reasonably
requested by the Agent, which releases shall be in form and substance
reasonably satisfactory to the Agent. Without limiting the foregoing, there
shall have been delivered (i) proper termination statements (Form UCC-3 or the
appropriate equivalent) for filing under the UCC of each jurisdiction where a
financing statement (Form UCC-1 or the appropriate equivalent) was filed with
respect to the Borrower or any of its Subsidiaries, or their respective
predecessors in interest, in connection with the security interests created
with respect to the Existing Credit Agreement and the documentation related
thereto, (ii) terminations or assignments of any security interest in, or Lien
on, any patents, trademarks, copyrights, or similar interests of the Borrower
or any of its Subsidiaries, on which filings have been made and (iii)
terminations of all mortgages, leasehold mortgages and deeds of trust created
with respect to property of the Borrower or any of its Subsidiaries, or their
respective predecessors in interest, in each case to secure the obligations
under the Existing Credit Agreement, all of which shall be in form and
substance reasonably satisfactory to the Agent.
5.08 Environmental Indemnity Agreement. On the Initial
Borrowing Date, the Collateral Agent shall have received a duly authorized and
fully executed environmental indemnity agreement substantially in the form of
Exhibit G attached hereto (as amended, restated, supplemental or otherwise
modified from time to time, the "Environmental Indemnity Agreement") from
Holdings and its Subsidiaries.
5.09 Pledge Agreement. On the Initial Borrowing Date,
Holdings, the Borrower and each Subsidiary Guarantor shall have duly
authorized, executed and delivered a Pledge
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Agreement in the form of Exhibit H attached hereto, together with such changes
(or with such other documents) as may be requested by the Collateral Agent in
connection with local law (as amended, restated, supplemented or otherwise
modified from time to time, the "Pledge Agreement") and shall have delivered to
the Collateral Agent, as pledgee thereunder, all the Pledged Securities
referred to therein, endorsed in blank in the case of promissory notes
constituting Pledged Securities, and executed and undated stock powers in the
case of capital stock constituting Pledged Securities.
5.10 Security Agreement. On the Initial Borrowing Date,
Holdings, the Borrower and each Subsidiary Guarantor shall have duly
authorized, executed and delivered a Security Agreement in the form of Exhibit
I attached hereto, together with such changes (or with such other documents) as
may be requested by the Collateral Agent in connection with local law (as
amended, restated, supplemented or otherwise modified from time to time, the
"Security Agreement") covering all of each Credit Party's present and future
Security Agreement Collateral, together with:
(a) proper financing statements (Form UCC-1) fully executed
for filing under the UCC in the appropriate filing offices of each
jurisdiction as may be necessary or, in the reasonable opinion of the
Collateral Agent, desirable to perfect the security interests
purported to be created by the Security Agreement;
(b) certified copies of requests for information or copies
(Form UCC-11), or equivalent reports, listing all effective financing
statements that name Holdings, the Borrower or any of their respective
Subsidiaries or a division of any such Person, as debtor and that are
filed in the jurisdictions referred to in clause (a) above, together
with copies of such other financing statements (none of which shall
cover the Collateral except to the extent evidencing Permitted Liens
or in respect of which the Collateral Agent shall have received
termination statements (Form UCC-3) or such other termination
statements as shall be required by local law) fully executed for
filing;
(c) evidence of the completion of all other recordings and
filings of, or with respect to, the Security Agreement as may be
necessary or, in the reasonable opinion of the Collateral Agent,
desirable to perfect the security interests intended to be created by
the Security Agreement; and
(d) evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent, desirable to perfect and
protect the security interests purported to be created by the Security
Agreement have been taken.
5.11 Subsidiary Guaranty On the initial Borrowing Date, each
Subsidiary Guarantor shall have duly authorized, executed and delivered a
Subsidiary Guaranty in the form of Exhibit J attached hereto (as amended,
restated, supplemented or otherwise modified from time to time in accordance
with the terms hereof and thereof, the "Subsidiary Guaranty"), and the
Subsidiary Guaranty shall be in full force and effect.
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5.12 Mortgages; Title Insurance; Surveys; Etc. On the
Initial Borrowing Date, the Collateral Agent shall have received:
(a) fully executed counterparts of mortgages or deeds of
trust to secure debt in form and substance reasonably satisfactory to
the Agent (as may be amended, restated, supplemented or otherwise
modified from time to time, each a "Mortgage", and collectively, the
"Mortgages"), which Mortgages shall cover such of the Real Properties
owned in fee designated on Schedule III attached hereto (each a
"Mortgaged Property", and collectively, the "Mortgaged Properties"),
together with evidence that counterparts of the Mortgages have been
delivered to the title insurance company insuring the Liens of the
Mortgages for recording in all places to the extent necessary or, in
the reasonable opinion of the Collateral Agent, desirable to
effectively create valid and enforceable first priority mortgage liens
on the Mortgaged Properties in favor of the Collateral Agent (or such
other trustee as may be required or desired under local law) for the
benefit of the Secured Creditors;
(b) mortgagee title insurance policies on the Mortgaged
Properties issued by title insurers satisfactory to the Collateral
Agent (each a "Mortgage Policy", and collectively, the "Mortgage
Policies") in amounts satisfactory to the Agent assuring the
Collateral Agent that the Mortgages on such Mortgaged Properties are
valid and enforceable first priority mortgage liens on the Mortgaged
Properties, free and clear of all defects and encumbrances except Per
mitted Encumbrances and such Mortgage Policies shall otherwise be in
form and substance reasonably satisfactory to the Agent and shall
include, as appropriate and to the extent available in the applicable
jurisdiction, an endorsement for future advances under this Agreement
and the Revolving Notes and for any other matter that the Collateral
Agent in its reasonable discretion may reasonably request, shall not
include an exception for mechanics' liens, and shall provide for
affirmative insurance as reasonably requested by the Agent; and
(c) except as separately agreed by the Agent in writing on
the Initial Borrowing Date, surveys (or updates of existing surveys),
in form and substance satisfactory to the Collateral Agent of each
Mortgaged Property, if any, designated as "Owned" on Schedule III
hereto, dated a recent date acceptable to the Collateral Agent and
certified in a manner satisfactory to the Collateral Agent by a
licensed professional surveyor satisfactory to the Agent.
5.13 Consent Letter. On the Initial Borrowing Date, the Agent
shall have received a letter from CT Corporation System, presently located at
1633 Broadway, New York, New York 10019, substantially in the form of Exhibit K
attached hereto, indicating its consent to its appointment by each Credit Party
as its agent to receive service of process as specified in Section 13.08.
5.14 Adverse Change, etc. (a) On the Initial Borrowing Date,
after giving effect to the Transaction, nothing shall have occurred since
December 31, 1995 (and the Banks shall have become aware of no facts,
conditions or other information not previously known) which the Agent
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or the Required Banks reasonably believe could have a material adverse effect
on the rights or remedies of the Agent or the Banks, or on the ability of any
Credit Party to perform its obligations to the Agent and the Banks or which the
Agent or the Required Banks reasonably believe would have a material adverse
effect on the Transaction or a Material Adverse Effect.
(b) On or prior to the Initial Borrowing Date, all necessary
and material governmental (domestic and foreign) and third party approvals in
connection with the Transaction and the transactions contemplated by the Credit
Documents and otherwise referred to herein or there in shall have been obtained
and remain in effect, and all applicable waiting periods shall have expired
without any action being taken by any competent authority which restrains,
prevents or imposes materially adverse conditions upon the consummation of the
Transaction and the trans actions contemplated by this Agreement. Additionally,
there shall not exist any judgment, order, in junction or other restraint
issued or filed or a hearing seeking injunctive relief or other restraint
pending or notified prohibiting or imposing materially adverse conditions
upon the consummation of the Transaction or the transactions contemplated by
this Agreement.
5.15 Litigation. On the Initial Borrowing Date, no litigation
by any entity (private or governmental) shall be pending or, to the knowledge
of the Borrower or Holdings, threatened with respect to the Transaction or this
Agreement or any documentation executed in connection therewith, or which the
Agent or the Required Banks shall reasonably believe could have a materially
adverse effect on the Transaction or a Material Adverse Effect.
5.16 Solvency Certificate; Environmental Analyses; Insurance.
On or prior to the Initial Borrowing Date, the Borrower shall cause to be
delivered to the Agent:
(i) a solvency opinion from Brownstone Associates
Incorporated, addressed to the Agent and each of the Banks and dated
the Initial borrowing Date and supporting the conclusions, that, after
giving effect to the Transaction and the incurrence of all financings
contemplated herein, the Borrower (on a stand-alone basis) and
Holdings and its Subsidiaries (on a consolidated basis) are not
insolvent and will not be rendered insolvent by the indebtedness
incurred in connection herewith, will not be left with unreasonably
small capital with which to engage in their respective businesses and
will not have incurred debts beyond their ability to pay such debts as
they mature and become due;
(ii) a solvency certificate addressed to the Agent and each
of the Banks and dated the Initial Borrowing Date from the Chief
Executive Officer of the Borrower, which solvency certificate shall be
in the form of Exhibit L attached hereto (appropriately completed)
expressing opinions of value and other appropriate factual information
regarding the sol vency of Holdings and its Subsidiaries (on a
consolidated basis), and the Borrower (on a stand-alone basis), after
giving effect to the Transaction and the incurrence of all financings
contemplated herein;
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(iii) environmental assessments from facilities owned or
operated by the Borrower and its Subsidiaries, the results of which
shall be in form and substance reasonably satisfactory to the Agent
and the Required Banks; and
(iv) evidence of insurance complying with the requirements of
Section 8.03 for the business and properties of the Borrower and its
Subsidiaries, in scope, form and substance reasonably satisfactory to
the Agent and the Required Banks and naming the Collateral Agent as an
additional insured and/or loss payee, and stating that such insurance
shall not be canceled or revised without 30 days prior written notice
by the insurer to the Collateral Agent.
5.17 Pro Forma Balance Sheet. (a) On the Initial Borrowing
Date, the Banks shall have received the unaudited projected pro forma
consolidated balance sheet of Holdings both immediately before and immediately
after giving effect to the Transaction and the incurrence of all Indebtedness
(including the Revolving Loans) contemplated herein, which projected pro forma
consolidated balance sheet shall be (i) based upon the projected balance sheet
as of the Effective Date prepared on a basis consistent with the Projections
and the financial statements delivered pursuant to Section 7.05(a) except as
specifically set forth in the notes to such balance sheets, and (ii) in form
and substance reasonably satisfactory to the Agent and the Required Banks.
(b) On or prior to the Initial Borrowing Date, the Banks
shall have received the financial statements referred to in Section 7.05(a) and
the Projections described in Section 7.05(d), which projections shall be in
form and substance reasonably satisfactory to the Agent and the Required Banks.
5.18 Officer's Certificate. On the Initial Borrowing Date,
the Agent shall have received a certificate dated such date signed by an
Authorized Officer of the Borrower stating that all of the applicable
conditions set forth in Sections 5.06, 5.07, 5.14, 5.15 and 6.01 exist as of
such date.
SECTION 6. CONDITIONS PRECEDENT TO ALL CREDIT EVENTS. The
obligation of each Bank to make Revolving Loans (including Revolving Loans made
on the Initial Borrowing Date), and the obligation of the Issuing Bank to issue
any Letter of Credit (including Letters of Credit issued on the Initial
Borrowing Date), is subject, at the time of each such Credit Event (except as
hereinafter indicated), to the satisfaction of the following conditions:
6.01 No Default; Representations and Warranties. At the time
of each such Credit Event and also after giving effect thereto (i) there shall
exist no Default or Event of Default and (ii) all representations and
warranties contained herein or in any other Credit Document shall be true and
correct in all material respects with the same effect as though such
representations and warranties had been made on the date of the making of such
Credit Event (it being understood and agreed that any representation or
warranty which by its terms is made as of a specified date shall be required to
be true and correct in all material respects only as of such specified date).
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6.02 Notice of Borrowing; Letter of Credit Request. (a)
Prior to the making of each Revolving Loan, the Agent shall have received the
notice required by Section 1.03(a).
(b) Prior to the issuance of each Letter of Credit, the
Agent and the Issuing Bank shall have received a Letter of Credit Request
meeting the requirements of Section 2.02.
The acceptance of the proceeds of, and any Letter of Credit
issued with respect to, each Credit Event shall constitute a representation and
warranty by the Borrower to the Agent and each of the Banks that all the
conditions specified in Section 5 and in this Section 6 and applicable to such
Credit Event exist as of that time (except to the extent that any of the
conditions specified in Section 5 are required to be satisfactory to or
determined by any Bank, the Required Banks and/or the Agent). All of the
Revolving Notes, certificates, legal opinions and other documents and papers
referred to in Section 5 and in this Section 6, unless otherwise specified,
shall be delivered to the Agent at the Notice Office for the account of each of
the Banks and, except for the Revolving Notes, in sufficient counterparts or
copies for each of the Banks and shall be in form and substance reasonably
satisfactory to the Banks.
SECTION 7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. In
order to induce the Banks to enter into this Agreement and to make the Loans,
and issue (or participate in) the Letters of Credit as provided herein, each of
Holdings and the Borrower make the following representations, warranties and
agreements, in each case after giving effect to the Transaction consummated on
the Initial Borrowing Date, all of which shall survive the execution and
delivery of this Agreement and the Revolving Notes and the making of the Loans
and issuance of the Letters of Credit, with the occurrence of each Credit Event
on or after the Initial Borrowing Date being deemed to constitute a
representation and warranty that the matters specified in this Section 7 are
true and correct in all material respects on the date of each such Credit Event
(including the Initial Borrowing Date) (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct in all material respects only as of
such specified date).
7.01 Corporate Status. Holdings and each of its Subsidiaries
(i) is a duly organized and validly existing corporation in good standing under
the laws of the jurisdiction of its incorporation, (ii) has the corporate
power and authority to own its property and assets and to transact the business
in which it is engaged and presently proposes to engage and (iii) is duly
qualified and is authorized to do business and is in good standing in each
jurisdiction where the conduct of its business requires such qualifications
except for failures to be so qualified which, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
7.02 Corporate Power and Authority. Each Credit Party has the
corporate power and authority to execute, deliver and perform the terms and
provisions of each of the Documents to which it is party and has taken all
necessary corporate action to authorize the execution, delivery and performance
by it of each of such Documents. Each Credit Party has duly executed and
delivered each of the Documents to which it is party, and each of such
Documents constitutes the legal, valid
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and binding obligation of such Credit Party enforceable in accordance with its
terms, except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law).
7.03 No Violation. Neither the execution, delivery or
performance by any Credit Party of the Documents to which it is a party, nor
compliance by it with the terms and provisions thereof, (i) will contravene any
provision of any applicable law, statute, rule or regulation or any applicable
order, writ, injunction or decree of any court or governmental instrumentality,
(ii) will conflict with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien
(except pursuant to the Security Documents) upon any of the material properties
or assets of Holdings or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement or loan agreement, or any
other material agreement, contract or instrument, to which Holdings or any of
its Subsidiaries is a party or by which it or any of its property or assets is
bound or to which it may be subject or (iii) will violate any provision of the
Certificate of Incorporation or By-Laws of Holdings or any of its
Subsidiaries.
7.04 Governmental Approvals. No order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with (except as have been obtained or made prior to the Initial Borrowing
Date), or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection
with, (i) the execution, delivery and performance in all material respects of
any Document or (ii) the legality, validity, binding effect or enforceability
of any such Document.
7.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc. (a) (i) The audited consolidated statements of
financial condition of the Borrower and its Subsidiaries as of December 31,
1993, 1994 and 1995 and the related consolidated statements of income and cash
flow and changes in shareholders' equity of Holdings and its Subsidiaries, and
the notes thereto for the fiscal years ended on such dates and (ii) the
unaudited consolidated balance sheets of the Borrower and its Subsidiaries as
of September 30, 1996, and the related consolidated statements of income and
cash flow for the nine-month period ended on such date, in each case furnished
to the Banks prior to the Effective Date, present fairly the financial
condition of Holdings and its Subsidiaries at the date of such statements of
financial condition and the results of the operations of Holdings and its
Subsidiaries for the respective Fiscal Year or nine-month period, as the case
may be, described therein (subject, in the case of unaudited financial
statements, to ordinary year-end adjustments). All such financial statements
have been prepared in accordance with GAAP consistently applied, except, in the
case of nine-month statements, for the omission of footnotes and ordinary
year-end adjustments. After giving effect to the Transaction, since December
31, 1995, there have been no circumstances or events the result of which has
had a Material Adverse Effect.
(b) On and as of the Initial Borrowing Date, after giving
effect to the Transaction and to all Indebtedness (including the Revolving
Loans) being incurred or assumed and Liens created
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by Holdings and its Subsidiaries in connection therewith (assuming the full
utilization of all Revolving Loan Commitments on the Initial Borrowing Date),
(i) the sum of the assets, at a fair valuation, of each of the Borrower,
individually, and Holdings and its Subsidiaries taken as a whole, will exceed
its or their debts; (ii) each of the Borrower, individually, and Holdings and
its Subsidiaries taken as a whole, have not incurred and do not intend to
incur, and do not believe that it or they will incur, debts beyond its or their
ability to pay such debts as such debts mature; and (iii) each of the Borrower,
individually, and Holdings and its Subsidiaries taken as a whole, will have
sufficient capital with which to conduct its or their businesses. For purposes
of this Section 7.05(b), "debt" means any liability on a claim, and "claim"
means (A) right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured or (B) right to an equitable
remedy for breach of performance if such breach gives rise to a payment, whether
or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, disputed, undisputed, secured or unsecured.
(c) Except as fully disclosed in the financial statements
delivered pursuant to Section 7.05(a), there were as of the Initial Borrowing
Date no liabilities or obligations with respect to Holdings or any of its
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent
or otherwise and whether or not due) which, either individually or in
aggregate, would have a Material Adverse Effect. As of the Initial Borrowing
Date, neither Holdings nor the Borrower knows of any basis for the assertion
against it of any liability or obligation of any nature whatsoever that is not
fully disclosed in the financial statements delivered pursuant to Section
7.05(a) which, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
(d) On and as of the Initial Borrowing Date, the financial
projections (the "Projections") previously delivered to the Agent and the Banks
have been prepared on a basis consistent with the financial statements
referred to in Section 7.05(a) (other than as set forth or presented in such
Projections), and there are no statements or conclusions in any of the
Projections which are based upon or include information known to the Borrower
to be misleading in any material respect or which fail to take into account
material information regarding the matters reported therein. On the Initial
Borrowing Date, the Borrower believed that the Projections were reasonable and
attain able.
7.06 Litigation. There are no actions, suits or proceedings
pending or, to the best knowledge of Holdings and the Borrower, threatened,
with respect to Holdings or any of its Subsidiaries (i) that are likely to have
a Material Adverse Effect or (ii) that could reasonably be expected to have a
material adverse effect on the rights or remedies of the Banks or on the
ability of any Credit Party to perform its respective obligations to the Banks
hereunder and under the other Credit Documents to which it is, or will be, a
party. Additionally, there does not exist any judgment, order or injunction
prohibiting or imposing material adverse conditions upon the occurrence of any
Credit Event.
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7.07 True and Complete Disclosure. All factual information
(taken as a whole) furnished by or on behalf of Holdings or any of its
Subsidiaries in writing to the Agent or any Bank (including, without
limitation, all information contained in the Documents) for purposes of or in
connection with this Agreement, the other Credit Documents or any transaction
contemplated herein or therein is, and all other such factual information
(taken as a whole) hereafter furnished by or on behalf of such Persons in
writing to the Agent or any Bank will be, true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any fact necessary to make such information
(taken as a whole) not misleading in any material respect at such time in light
of the circumstances under which such information was provided.
7.08 Use of Proceeds; Margin Regulations. (a) Up to
$3,600,000 of the proceeds of Revolving Loans incurred on the Initial Borrowing
Date shall be used by the Borrower (i) to effect the Transaction and (ii) to
pay fees and expenses related to the Transaction.
(b) All proceeds of all Revolving Loans shall be used for
the Borrower's and its Subsidiaries' general corporate and working capital
purposes (excluding the purposes described in preceding clause (a)).
(c) No part of the proceeds of any Loan will be used to
purchase or carry any Margin Stock or to extend credit for the purpose of
purchasing or carrying any Margin Stock. Neither the making of any Loan nor the
use of the proceeds thereof nor the occurrence of any other Credit Event will
violate or be inconsistent with the provisions of Regulation G, T, U or X.
7.09 Tax Returns and Payments. Holdings and each of its
Subsidiaries have timely filed or caused to be timely filed, on the due dates
thereof or within applicable grace periods, with the appropriate taxing
authority, all Federal and all material state and other returns, statements,
forms and reports for taxes (the "Returns") required to be filed by or with
respect to the income, properties or operations of Holdings and/or any of its
Subsidiaries. The Returns accurately reflect in all material respects all
liability for taxes of Holdings and its Subsidiaries for the periods covered
thereby. Holdings and each of its Subsidiaries have paid all material taxes
payable by them other than taxes which are not delinquent, and other than those
contested in good faith and for which adequate reserves have been established
in accordance with generally accepted accounting principles. Except as
disclosed in the financial statements referred to in Section 7.05(a), there is
no material action, suit, proceeding, investigation, audit, or claim now
pending or, to the best knowledge of Holdings and the Borrower, threatened by
any authority regarding any taxes relating to Holdings or any of its
Subsidiaries. As of the Initial Borrowing Date, neither Holdings nor any of its
Subsidiaries has entered into an agreement or waiver or been requested to enter
into an agreement or waiver extending any statute of limitations relating to
the payment or collection of taxes of Holdings or any of its Subsidiaries, or
is aware of any circumstances that would cause the taxable years or other
taxable periods of Holdings or any of its Subsidiaries not to be subject to the
normally applicable statute of limitations. Neither Holdings nor any of its
Subsidiaries has incurred, or will incur, any
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material tax liability in connection with the consummation of the Transaction
and the other transactions contemplated hereby.
7.10 Compliance with ERISA. Each Plan (other than a
multiemployer plan (as defined in Section 4001(a)(3) of ERISA)) is in
substantial compliance with ERISA and the Code; no Reportable Event has
occurred with respect to a Plan (other than a multiemployer plan (as defined in
Section 4001(a)(3) of ERISA)); no Plan is insolvent or in reorganization; no
Plan other than a multiemployer plan (as defined in Section 4001(a)(3) of
ERISA) has an Unfunded Current Liability; no Plan has an accumulated or waived
funding deficiency, or has applied for an extension of any amortization period
within the meaning of Section 412 of the Code; all contributions required to be
made by Holdings, any of its Subsidiaries or any ERISA Affiliate with respect
to a Plan have been timely made; none of Holdings or any of its Subsidiaries
nor any ERISA Affiliate has incurred any material liability to or on account of
a Plan pursuant to Section 409, 502(i), 502(1), 515, 4062, 4063, 4064, 4069,
4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the
Code or reasonably expects to incur any material liability under any of the
foregoing Sections with respect to any Plan; no proceedings have been
instituted to terminate or appoint a trustee to administer any Plan; no
condition exists which presents a material risk to Holdings or any of its
Subsidiaries or any ERISA Affiliate of incurring a material liability to or on
account of a Plan pursuant to the foregoing provisions of ERISA and the Code;
using actuarial assumptions and computation methods consistent with Part 1 of
subtitle E of Title IV of ERISA, the annual aggregate liability of Holdings,
its Subsidiaries and their ERISA Affiliates to all Plans which are
multiemployer plans (as defined in Section 4001(a)(3) of ERISA) in the event of
a complete withdrawal therefrom, as of the close of the most recent fiscal year
of each such Plan ended prior to the date of the most recent Credit Event,
would not increase by more than $2,000,000 over the average amount contributed
to such Plans during the five years preceding the most recent Credit Event by
Holdings, its Subsidiaries and their ERISA Affiliates; no lien imposed under
the Code or ERISA on the assets of Holdings or any of its Subsidiaries or any
ERISA Affiliate exists or is likely to arise on account of any Plan; and
Holdings and its Subsidiaries do not maintain or contribute to any employee
welfare benefit plan (as defined in Section 3(1) of ERISA) which provides
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or any employee pension benefit plan (as defined in
Section 3(2) of ERISA) the obligations with respect to which could reasonably
be expected to have a material adverse effect on the ability of any Credit
Party to perform its obligations under the Credit Documents to which they are a
party.
7.11 Security Documents. (a) The provisions of the Security
Agreement are effective to create in favor of the Collateral Agent for the
benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of the Credit Parties in the Security
Agreement Collateral described therein, and the Security Agreement, upon the
filing of Form UCC-1 financing statements or the appropriate equivalent,
creates a fully perfected first lien on, and security interest in, all right,
title and interest in all of the Security Agreement Collateral described
therein, subject to no other Liens other than Permitted Liens. The recordation
of the Assignment of Security Interest in U.S. Patents and Trademarks in the
form attached to the Security Agreement in the United States Patent and
Trademark Office together with filings on Form UCC-1 made pursuant
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to the Security Agreement will be effective, under applicable law, to perfect
the security interest granted to the Collateral Agent in the trademarks and
patents covered by the Security Agreement and the recordation of the Assignment
of Security Interest in U.S. Copyrights in the form attached to the Security
Agreement with the United States Copyright Office together with filings on Form
UCC-1 made pursuant to the Security Agreement will be effective under federal
law to perfect the security interest granted to the Collateral Agent in the
copyrights covered by the Security Agreement. Each of the Credit Parties party
to the Security Agreement has good and valid title to all Security Agreement
Collateral described therein, free and clear of all Liens except those
described above in this clause (a).
(b) The security interests created in favor of the Collateral
Agent, as pledgee, for the benefit of the Secured Creditors under the Pledge
Agreement constitute first priority perfected security interests in the Pledged
Securities described in the Pledge Agreement, subject to no security interests
of any other Person. No filings or recordings are required in order to perfect
(or maintain the perfection or priority of) the security interests created in
the Pledged Securities and the proceeds thereof under the Pledge Agreement.
(c) After the recording thereof as required by Section 5.11,
the Mortgages shall create, as security for the obligations purported to be
secured thereby, a valid and enforceable perfected security interest in and
mortgage lien on the Mortgaged Properties in favor of the Collateral Agent (or
such other trustee as may be required or desired under local law) for the
benefit of the Secured Creditors, superior to and prior to the rights of all
third persons (except that the security interest and mortgage lien created in
the Mortgaged Properties may be subject to the Permitted Encumbrances and the
Permitted Liens described in Section 9.01(ix) related thereto) and subject to
no other Liens (other than Permitted Liens). Schedule III hereto contains a
true and complete list of each parcel of Real Property owned or leased by the
Borrower and its Subsidiaries on the Effective Date, and the type of interest
therein held by the Borrower or such Subsidiary. The Borrower and each of its
Subsidiaries have good and indefeasible title to all fee-owned Real Property
and valid leasehold title to all Leaseholds, in each case free and clear of all
Liens except those described in the first sentence of this subsection (c).
7.12 Representations and Warranties in Documents. All
representations and warranties by Holdings and, to the knowledge of Holdings
and the Borrower, any other party thereto, set forth in the Documents (other
than the Credit Documents) were true and correct in all material respects at
the time as of which such representations and warranties were made and shall be
true and correct in all material respects as to the Initial Borrowing Date as
if such representations and warranties were made on and as of such date, unless
stated to relate to a specific earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of such
earlier date, in each case except to the extent that the failure of any such
representation and warranty to be true and correct in all material respects,
either individually or in the aggregate with other such representations and
warranties, is not reasonably likely to have a Material Adverse Effect.
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7.13 Properties. Holdings and each of its Subsidiaries have
good and valid title to all properties owned by them, including all property
reflected in the balance sheets of the Borrower and its Subsidiaries referred
to in Section 7.05(a) and in the pro forma balance sheet referred to in Section
5.16(a) (except as sold or otherwise disposed of since the date of such balance
sheet in the ordinary course of business or in accordance with the terms of
this Agreement), free and clear of all Liens, other than Permitted Liens.
7.14 Capitalization. (a) On the Initial Borrowing Date and
after giving effect to the Transaction and the other transactions contemplated
hereby, the authorized capital stock of Holdings shall consist of (i)
100,000,000 shares of Holdings Common Stock, $0.01 par value per share, of
which 38,950,000 shares shall be issued and outstanding and (ii) 20,000,000
shares of preferred stock of Holdings, $0.01 par value per share, of which no
shares shall be issued and out standing. All such outstanding shares have been
duly and validly issued, are fully paid and non-assessable and have been issued
free of preemptive rights. As of the Initial Borrowing Date and after giving
effect to the Transaction and the other transactions contemplated hereby,
Holdings does not have outstanding any securities convertible into or
exchangeable for its capital stock.
(b) On the Initial Borrowing Date and after giving effect to
the Transaction and the other transactions contemplated hereby, the authorized
capital stock of the Borrower shall consist of 3,000 shares of common stock,
$0.01 par value per share, of which 100 shares shall be issued and outstanding,
owned by Holdings, and delivered for pledge pursuant to the Pledge Agreement.
All such outstanding shares of common stock have been duly and validly issued,
are fully paid and non assessable and are free of preemptive rights. As of the
Initial Borrowing Date, the Borrower does not have outstanding any securities
convertible into or exchangeable for its capital stock or out standing any
rights to subscribe for or to purchase, or any options for the purchase of, or
any agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock.
7.15 Subsidiaries. On the Initial Borrowing Date, after the
consummation of the Transaction, Holdings has no Subsidiaries other than the
Borrower and its Subsidiaries, and the Borrower has no Subsidiaries other than
those Subsidiaries listed on Schedule IV attached hereto. Schedule IV correctly
sets forth, as of the Initial Borrowing Date and after giving effect to the
Transaction, the percentage ownership (direct or indirect) of Holdings in each
class of capital stock of each of its Subsidiaries and also identifies the
direct owner thereof. All outstanding shares of capital stock of each
Subsidiary of the Borrower have been duly and validly issued, are fully paid
and nonassessable and have been issued free of preemptive rights. No Subsidiary
of the Borrower has outstanding any securities convertible into or exchangeable
for its capital stock or outstanding any right to subscribe for or to purchase,
or any options or warrants for the purchase of, or any agreement providing for
the issuance (contingent or otherwise) of or any calls, commitments or claims
of any character relating to, its capital stock or any stock appreciation or
similar rights.
7.16 Compliance with Statutes, etc. Except for matters
relating to the compliance by Holdings and its Subsidiaries with Environmental
Laws, which matters are governed by the
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Environmental Indemnity Agreement, Holdings and each of its Subsidiaries is in
compliance with all applicable statutes, regulations and orders of, and all
applicable restrictions imposed by, all governmental bodies, domestic or
foreign, in respect of the conduct of its business and the ownership of its
property (including applicable statutes, regulations, orders and restrictions
relating to environmental standards and controls), except such noncompliances
as could not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.
7.17 Investment Company Act. Neither Holdings nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7.18 Public Utility Holding Company Act. Neither Holdings nor
any of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
7.19 Labor Relations. Neither Holdings nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a Material Adverse Effect. There is (i) no unfair labor
practice complaint pending against Holdings or any of its Subsidiaries or, to
the best knowledge of Holdings and the Borrower, threatened against any of
them, before the National Labor Relations Board, and no material grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against Holdings or any of its Subsidiaries or, to the
best knowledge of Holdings and the Borrower, threatened against any of them,
(ii) no strike, labor dispute, slowdown or stoppage pending against Holdings or
any of its Subsidiaries or, to the best knowledge of Holdings and the Borrower,
threatened against Holdings or any of its Subsidiaries and (iii) to the best
knowledge of Holdings and the Borrower, no union representation proceeding is
pending with respect to the employees of Holdings or any of its Subsidiaries,
except (with respect to any matter specified in clause (i), (ii) or (iii)
above, either individually or in the aggregate) such as is not likely to have a
Material Adverse Effect.
7.20 Patents, Licenses, Franchises and Formulas. Holdings and
each of its Subsidiaries owns all material patents, trademarks, permits,
service marks, trade names, copyrights, licenses, franchises and formulas, or
rights with respect to the foregoing, and has obtained assignments of all
leases and other rights of whatever nature, reasonably necessary for the
present conduct of its business, without any known conflict with the rights of
others which, or the failure to obtain which, as the case may be, would result
in a Material Adverse Effect.
7.21 Indebtedness. Schedule V attached hereto sets forth a
true and complete list of all Indebtedness for borrowed money of Holdings and
its Subsidiaries as of the Initial Borrowing Date and which is to remain
outstanding after giving effect thereto (excluding the Indebtedness hereunder)
(the "Existing Indebtedness"), in each case showing the aggregate principal
amount thereof and the name of the respective borrower and any other entity
which directly or indirectly guaranteed such debt, all of which shall be
evidenced by the Existing Debt Agreements.
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7.22 Recapitalization. At the time of consummation thereof,
the Recapitalization shall have been consummated in all material respects in
accordance with the terms of the respective Recapitalization Documents and all
applicable laws. At the time of consummation of the Recapitalization, all
consents and approvals of, and filings and registrations with, and all other
actions in respect of, all governmental agencies, authorities or
instrumentalities required in order to make or consummate the Recapitalization
will have been obtained, given, filed or taken and are or will be in full force
and effect. All applicable waiting periods with respect thereto have or, prior
to the time when required, will have, expired without, in all such cases, any
action being taken by any competent authority which restrains, prevents, or
imposes material adverse conditions upon the Recapitalization. Additionally,
there does not exist any judgment, order or injunction prohibiting or imposing
material adverse conditions upon the Recapitalization, or the occurrence of any
Credit Event or the performance by any Credit Party of its obligations under
the respective Documents. All actions taken by Holdings and its Subsidiaries
pursuant to or in furtherance of the Recapitalization have been taken, or will
be taken substantially contemporaneously with the funding of initial Revolving
Loans on the Initial Borrowing Date, in compliance with the Recapitalization
Documents and all applicable laws.
7.23 Special Purpose Corporation. Holdings engages in no
business activities and has no significant assets or liabilities (other than
under this Agreement, the other Credit Documents and the Recapitalization
Documents).
7.24 Subordination. The subordination provisions contained in
the Senior Subordinated Note Documents are enforceable against the Borrower and
the holders thereof, and all Obligations shall be within the definition of
"Senior Debt" included in such subordination provisions.
SECTION 8. AFFIRMATIVE COVENANTS. Holdings and the Borrower
hereby covenant and agree that on and after the Effective Date and until the
Total Revolving Loan Commitment and all Letters of Credit have terminated and
the Revolving Loans, Revolving Notes and Unpaid Drawings, together with
interest, Fees and all other obligations incurred hereunder and thereunder, are
paid in full:
8.01 Information Covenants. Holdings and/or the Borrower
will furnish to each Bank:
(a) Monthly Reports. Within 30 days (45 days with respect to
the first six fiscal months after the date hereof) after the end of
each fiscal month of the Borrower (other than the fiscal months of
March, June, September and December) and within 45 days after the end
of the fiscal months of March, June, September and December, (i) the
consolidated balance sheets of the Borrower and its Subsidiaries as at
the end of such month and the related consolidated statements of
income and retained earnings and statement of cash flows for such
month and for the elapsed portion of the Fiscal Year ended with the
last day of such month, in each case setting forth comparative figures
for the corresponding month in the prior Fiscal
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Year and the budgeted figures for such month as set forth in the
respective budget delivered pursuant to Section 8.01(d) and (ii)
management's discussion and analysis of the important operational and
financial developments during the month and year-to-date periods.
(b) Annual Financial Statements. Within 90 days after the
close of each Fiscal Year, the consolidated balance sheets of the
Borrower and its Subsidiaries as at the end of such Fiscal Year and
the related consolidated statements of income and retained earnings
and statement of cash flows for such Fiscal Year setting forth
comparative figures for the preceding Fiscal Year and certified by
Arthur Andersen LLP or such other independent certified public
accountants of recognized national standing reasonably acceptable to
the Agent, together with a report of such accounting firm stating that
in the course of its regular audit of the financial statements of
Holdings and its Subsidiaries, which audit was conducted in accordance
with generally accepted auditing standards, such accounting firm
obtained no knowledge of any Default or Event of Default which has
occurred and is continuing under Sections 9.04, 9.05 or 9.07 through
9.10 inclusive or, if in the opinion of such accounting firm such a
Default or an Event of Default with respect to the covenants set forth
in Sections 9.04, 9.05, or 9.07 through 9.10, inclusive has occurred
and is continuing, a statement as to the nature thereof.
(c) Management Letters. Promptly after the receipt thereof,
a copy of any final "management letter" received by Holdings or any of
its Subsidiaries from its certified public accountants and the
management's responses thereto.
(d) Budgets. No later than 45 days following the
commencement of the first day of each Fiscal Year, a budget in form
reasonably satisfactory to the Agent (including budgeted statements of
income and cash flow and balance sheets) prepared by the Borrower for
each of the twelve months of such Fiscal Year prepared in detail of
the Borrower and its Subsidiaries, accompanied by the statement of an
Authorized Officer of the Borrower to the effect that, to the best of
his or her knowledge, the budget is a reasonable estimate for the
period covered thereby.
(e) Officer's Certificates. At the time of the delivery of
the financial statements provided for in Sections 8.01(a) and (b), a
certificate of an Authorized Officer of the Borrower to the effect
that, to the best of such officer's knowledge, no Default or Event of
Default has occurred and is continuing or, if any Default or Event of
Default has occurred and is continuing, specifying the nature and
extent thereof, which certificate shall, in the case of any such
financial statements delivered in respect of a period ending on the
last day of a fiscal quarter or year of Holdings, set forth the
calculations required to establish whether the Borrower was in
compliance with the provisions of Sections 4.02(d), 9.03, 9.04, 9.05
and 9.07 through 9.10, inclusive, at the end of such fiscal quarter or
year, as the case may be.
(f) Notice of Default or Litigation. Promptly, and in any
event within three Business Days after an officer of Holdings or any
of its Subsidiaries obtains knowledge
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thereof, notice of (i) the occurrence of any event which constitutes a
Default or an Event of Default and (ii) any litigation or governmental
investigation or proceeding pending (A) against Holdings or any of its
Subsidiaries which could reasonably be expected to have a Material
Adverse Effect, (B) with respect to any material Indebtedness of the
Borrower and its Subsidiaries taken as a whole or (C) with respect to
any Document.
(g) Other Reports and Filings. Promptly, copies of all
financial information, proxy materials and other information and
reports, if any, which Holdings or any of its Subsidiaries shall file
with the Securities and Exchange Commission or any successor thereto
(the "SEC") or deliver to holders of its Indebtedness pursuant to the
terms of the documentation governing such Indebtedness (or any
trustee, agent or other representative therefor).
(h) Annual Meetings with Banks. At the request of Agent,
Holdings shall within 120 days after the close of each Fiscal Year
hold a meeting at a time and place selected by Holdings and acceptable
to the Agent with all of the Banks at which meeting shall be re viewed
the financial results of the previous Fiscal Year and the financial
condition of Holdings and its Subsidiaries and the budgets presented
for the current Fiscal Year.
(i) Other Information. From time to time, such other
information or documents (financial or otherwise) with respect to
Holdings or its Subsidiaries as any Bank may reasonably request in
writing.
8.02 Books, Records and Inspections. Holdings will, and will
cause each of its Subsidiaries to, keep proper books of record and account in
which full, true and correct entries in conformity with generally accepted
accounting principles and all requirements of law shall be made of all dealings
and transactions in relation to its business and activities. Holdings will, and
will cause each of its Subsidiaries to, permit officers and designated
representatives of the Agent or any Bank to visit and inspect, during regular
business hours and under guidance of officers of Holdings or such Subsidiary,
any of the properties of Holdings or such Subsidiary, and to examine the books
of account of Holdings or such Subsidiary and discuss the affairs, finances and
accounts of Holdings or such Subsidiary with, and be advised as to the same by,
its and their officers and independent accountants, all at such reasonable
times and intervals and to such reasonable extent as the Agent or such Bank may
request.
8.03 Maintenance of Property; Insurance. (a) Schedule VI
attached hereto sets forth a true and complete listing of all insurance
maintained by Holdings and its Subsidiaries as of the Initial Borrowing Date.
Holdings will, and will cause each of its Subsidiaries to, (i) keep all
property necessary in its business in good working order and condition
(ordinary wear and tear excepted), (ii) maintain insurance on all its property
in at least such amounts and against at least such risks as is consistent and
in accordance with industry practice and (iii) furnish to each Bank, upon
written request, full information as to the insurance carried. In addition to
the requirements of the immediately preceding sentence, Holdings will at all
times cause insurance of the types described in Schedule VI to be maintained
(with the same scope of coverage as that described in Schedule VI)
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at levels which are at least as great as the respective amount described
opposite the respective type of insurance on Schedule VI or otherwise as are
acceptable to the Agent. Holdings will furnish to the Agent on the Initial
Borrowing Date and on each date on which financial statements are delivered
pursuant to Section 8.01(b) a summary of the insurance carried in respect of
Holdings and its Subsidiaries and the assets of Holdings and its Subsidiaries.
(b) Holdings will, and will cause its Subsidiaries to, at
all times keep their respective property insured in favor of the Collateral
Agent, and all policies (including Mortgage Policies) or certificates (or
certified copies thereof) with respect to such insurance (and any other
insurance maintained by Holdings or any of its Subsidiaries) (i) shall be
endorsed to the Collateral Agent's satisfaction for the benefit of the
Collateral Agent (including, without limitation, by naming the Collateral Agent
as loss payee or as an additional insured), (ii) shall state that such
insurance policies shall not be canceled without 30 days' prior written notice
thereof by the respective insurer to the Collateral Agent, (iii) shall provide
that the respective insurers irrevocably waive any and all rights of
subrogation with respect to the Collateral Agent and the Secured Creditors,
(iv) shall contain the standard non-contributory mortgagee clause endorsement
in favor of the Collateral Agent with respect to hazard insurance coverage, (v)
shall, except in the case of public liability insurance and workers'
compensation insurance, provide that any losses shall be payable
notwithstanding (A) any act or neglect of Holdings or any of its Subsidiaries,
(B) the occupation or use of the properties for purposes more hazardous than
those permitted by the terms of the respective policy if such coverage is
obtainable at commercially reasonable rates and is of the kind from time to
time customarily insured against by Persons owning or using similar property
and in such amounts as are customary, (C) any foreclosure or other proceeding
relating to the insured properties if such coverage is available at
commercially reasonable rates or (D) any change in the title to or ownership or
possession of the insured properties and (vi) shall be deposited with the
Collateral Agent if such coverage is available at commercially reasonable
rates.
(c) If Holdings or any of its Subsidiaries shall fail to
maintain all insurance in accordance with this Section 8.03, or if Holdings or
any of its Subsidiaries shall fail to so endorse and deposit all policies or
certificates with respect thereto, the Agent and/or the Collateral Agent shall
have the right (but shall be under no obligation) to procure such insurance and
the Borrower agrees to reimburse the Agent or the Collateral Agent as the case
may be, for all costs and expenses of procuring such insurance.
8.04 Corporate Franchises. Holdings will, and will cause each
of its Subsidiaries to, do or cause to be done, all things necessary to
preserve and keep in full force and effect its existence and its material
rights, franchises, licenses and patents; provided, however, that nothing in
this Section 8.04 shall prevent (i) sales of assets by Holdings or any of its
Subsidiaries in accordance with Section 9.02 or (ii) the withdrawal by Holdings
or any of its Subsidiaries of their qualification as a foreign corporation in
any jurisdiction where such withdrawal could not reasonably be expected to have
a Material Adverse Effect.
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8.05 Compliance with Statutes, etc. Except for matters
relating to compliance by Holdings and its Subsidiaries with Environmental
Laws, which matters are governed by the Environmental Indemnity Agreement,
Holdings and the Borrower will, and will cause each of their respective
Subsidiaries to, comply with all applicable statutes, regulations and orders
of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the
ownership of its property, except such noncompliances as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect or a material adverse effect on the ability of any Credit Party
to perform its obligations under any Credit Document to which it is a party.
8.06 ERISA. As soon as possible and, in any event, within 20
days after Holdings or any of its Subsidiaries or any ERISA Affiliate knows or
has reason to know of the occurrence of any of the following, Holdings or the
Borrower will deliver to each of the Banks a certificate of an Authorized
Officer of Holdings or the Borrower setting forth details as to such occurrence
and the action, if any, that Holdings, the Borrower, such Subsidiary or such
ERISA Affiliate is required or proposes to take, together with any notices
required or proposed to be given to or filed with or by Holdings, the Borrower,
such Subsidiary, the ERISA Affiliate, the PBGC, or a Plan participant or the
Plan administrator with respect thereto: that a Reportable Event has occurred;
that an accumulated funding deficiency has been incurred or an application is
likely to be or has been made to the Secretary of the Treasury for a waiver or
modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under Section
412 of the Code with respect to a Plan; that a contribution required to be made
to a Plan has not been timely made; that a Plan has been or is reasonably
expected to be terminated, reorganized, partitioned or declared insolvent under
Title IV of ERISA; that a Plan has an Unfunded Current Liability giving rise to
a lien under ERISA or the Code; that proceedings are likely to be or have been
instituted or notice has been given to terminate or appoint a trustee to
administer a Plan, that a proceeding has been instituted pursuant to Section
515 of ERISA to collect a delinquent contribution to a Plan; that Holdings, any
of its Subsidiaries or any ERISA Affiliate will or is reasonably expected to
incur any material liability (including any contingent or secondary liability)
to or on account of the termination of or withdrawal from a Plan under Section
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan
under Section 401(a)(29), 4971, 4975 or 4980 of the Code or Section 409 or
502(i) or 502(l) of ERISA; or that Holdings or any Subsidiary is reasonably
expected to incur any material liability pursuant to any employee welfare
benefit plan (as defined in Section 3(1) of ERISA) that provides benefits to
retired employees or other former employees (other than as required by Section
601 of ERISA) or any employee pension benefit plan (as defined in Section 3(2)
of ERISA). Upon request, the Borrower will deliver to each of the Banks a
complete copy of the annual report (Form 5500) of each Plan required to be
filed with the Internal Revenue Service. In addition to any certificates or
notices delivered to the Banks pursuant to the first sentence hereof, copies of
any material notices received by Holdings or any of its Subsidiaries or any
ERISA Affiliate with respect to any Plan shall be delivered to the Banks no
later than 20 days after the date such notice has been received by Holdings,
such Subsidiary or the ERISA Affiliate, as applicable.
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8.07 End of Fiscal Years; Fiscal Quarters. Holdings shall
cause (i) each of its, and each of its Subsidiaries', Fiscal Years to end on
December 31 of each year, and (ii) each of its, and each of its Subsidiaries',
fiscal quarters to end on March 31, June 30, September 30 and December 31 of
each year.
8.08 Performance of Obligations. Holdings will, and will
cause each of its Subsidiaries to, perform all of its obligations under the
terms of each mortgage, indenture, security agreement and other debt instrument
by which it is bound, except such non-performances as could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
8.09 Payment of Taxes. Holdings will pay and discharge or
cause to be paid and discharged, and will cause each of its Subsidiaries to pay
and discharge, all material taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits, or upon any material
properties belonging to it, in each case on a timely basis, and all lawful
claims which, if unpaid, might become a lien or charge upon any properties of
Holdings or any of its Subsidiaries; provided, however, that neither Holdings
nor any of its Subsidiaries shall be required to pay any such tax, assessment,
charge, levy or claim which is being contested in good faith and by proper
proceedings if it has maintained adequate reserves with respect thereto in
accordance with GAAP.
8.10 Additional Security; Further Assurances; Surveys. (a)
Holdings will, and will cause each of its Subsidiaries to, grant to the
Collateral Agent security interests and mortgages (an "Additional Mortgage") in
such fee simple interests of Real Property of Holdings or any of its
Subsidiaries as are not covered by the original Mortgages, to the extent
acquired after the Effective Date, and as may be reasonably requested from time
to time by the Agent or the Required Banks (each such Real Property, an
"Additional Mortgaged Property"). All such Additional Mortgages shall be
granted pursuant to documentation substantially in the form of the Mortgages
delivered to the Agent on the Effective Date or in such other form as is
reasonably satisfactory to the Agent and shall constitute valid and enforceable
perfected Liens superior to and prior to the rights of all third Persons and
subject to no other Liens except as are permitted by Section 9.01 at the time
of perfection thereof. The Additional Mortgages or instruments related thereto
shall have been duly recorded or filed in such manner and in such places as are
required by law to establish, perfect, preserve and protect the Liens in favor
of the Collateral Agent required to be granted pursuant to the Additional
Mortgages and all taxes, fees and other charges payable in connection therewith
shall have been paid in full.
(b) Holdings will, and will cause each of its Subsidiaries
to, at the expense of the Borrower, make, execute, endorse, acknowledge, file
and/ or deliver to the Collateral Agent from time to time such vouchers,
invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, real
property surveys, reports and other assurances or instruments and take such
further steps relating to the Collateral covered by any of the Security
Documents as the Collateral Agent may reasonably require pursuant to this
Section 8.10. Furthermore, Holdings and the Borrower shall cause to be
delivered to the Collateral Agent
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such opinions of counsel, title insurance and other related documents as may be
requested by the Collateral Agent to assure itself that this Section 8.10 has
been complied with.
(c) The security interests required to be granted pursuant
to this Section 8.10 shall be granted pursuant to security documentation (which
shall be substantially similar to the Security Documents already executed and
delivered by the Holdings and its Subsidiaries, as applicable) or otherwise
satisfactory in form and substance to the Agent and shall constitute valid and
enforceable perfected security interests prior to the rights of all third
Persons and subject to no other Liens except such Liens as are permitted by
Section 9.01. The Additional Security Documents and other instruments related
thereto shall be duly recorded or filed in such manner and in such places and
at such times as are required by law to establish, perfect, preserve and
protect the Liens, in favor of the Collateral Agent for the benefit of the
respective Secured Creditors, required to be granted pursuant to the Additional
Security Documents and all taxes, fees and other charges payable in connection
therewith shall be paid in full by the Borrower. At the time of the execution
and delivery of the Additional Security Documents, the Borrower shall cause to
be delivered to the Collateral Agent such opinions of counsel, Mortgage
Policies, title surveys, real estate appraisals and other related documents as
may be reasonably requested by the Agent or the Required Banks to assure
themselves that this Section 8.10 has been complied with.
(d) In the event that the Agent or the Required Banks at any
time after the Effective Date determine in its or their good faith discretion
that real estate appraisals satisfying the requirements of FIRREA (any such
appraisal a "Required Appraisal") are or were required to be obtained, or
should be obtained, in connection with the Mortgaged Properties, then, within
120 days after receiving written notice thereof from the Agent or the Required
Banks, as the case may be, such Required Appraisal shall be delivered, at the
expense of the Borrower, to the Agent which Required Appraisal, and the
respective appraiser, shall be satisfactory to the Agent.
(e) Each of Holdings and the Borrower agrees that each
action required above by Section 8.10(a) or (b) shall be completed as soon as
possible, but in no event later than 60 days after such action is requested to
be taken by the Agent or the Required Banks.
8.11 Ownership of Subsidiaries. Holdings shall at all times
own 100% of the outstanding capital stock of the Borrower and the Borrower
shall directly or indirectly own 100% of the capital stock of each of its
Subsidiaries (except as otherwise described on Schedule IV hereto as in effect
on the date hereof) and which may be created after the Initial Borrowing Date
in accordance with Section 9.15.
8.12 Maintenance of Corporate Separateness. Holdings will,
and will cause each of its Subsidiaries to, satisfy customary corporate
formalities, including the maintenance of corporate records. Neither the
Borrower nor any Subsidiary of the Borrower shall make any payment to a
creditor of Holdings (other than a Guaranteed Creditor pursuant to any Credit
Document, Tax Sharing Agreement or an Interest Rate Protection Agreement or
Other Hedging Agreement entered into with any such Guaranteed Creditor) in
respect of any liability of Holdings, and no bank account
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of Holdings shall be commingled with any bank account of the Borrower or any
Subsidiary of the Borrower. Any financial statements distributed to any
creditors of Holdings shall, to the extent permitted by GAAP, clearly establish
the corporate separateness of Holdings from the Borrower and each of the
Borrower's Subsidiaries. Finally, neither the Borrower nor any of its
Subsidiaries shall take any action, or conduct its affairs in a manner, which
is likely to result in the corporate existence of Holdings on the one hand and
of the Borrower or any Subsidiary of the Borrower on the other hand being
ignored, or in the assets and liabilities of the Borrower or any Subsidiary of
the Borrower being substantively consolidated with those of Holdings in a
bankruptcy, reorganization or other insolvency proceeding.
8.13 Repayment of SBA Loan. The Borrower shall cause the SBA
Loan to be repaid in full and all Liens securing the same to be released on or
prior to January 31, 1997.
SECTION 9. NEGATIVE COVENANTS. Holdings and the Borrower
covenant and agree that on and after the Effective Date and until the Total
Revolving Loan Commitment and all Letters of Credit have terminated and the
Revolving Loans, Revolving Notes and Unpaid Drawings, together with interest,
Fees and all other Obligations incurred hereunder and thereunder, are paid in
full:
9.01 Liens. Holdings will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
Holdings or any of its Subsidiaries, whether now owned or here after acquired,
or sell any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets (including
sales of accounts receivable with recourse to Holdings or any of its
Subsidiaries), or assign any right to receive income or permit the filing of
any financing statement under the UCC or any other similar notice of Lien under
any similar recording or notice statute; provided, however, that the provisions
of this Section 9.01 shall not prevent the creation, incurrence, assumption or
existence of the following (Liens described below are herein referred to as
"Permitted Liens"):
(i) inchoate Liens for taxes, assessments or governmental
charges or levies not yet due and payable or Liens for taxes,
assessments or governmental charges or levies being contested in good
faith and by appropriate proceedings for which adequate reserves have
been established in accordance with GAAP;
(ii) Liens in respect of property or assets of the Borrower
or any of its Subsidiaries imposed by law, which were incurred in the
ordinary course of business and do not secure Indebtedness for
borrowed money, such as carriers', warehousemen's, material men's and
mechanics' liens and other similar Liens arising in the ordinary
course of business, and (A) which do not in the aggregate materially
detract from the value of the Borrower's or such Subsidiary's property
or assets or materially impair the use thereof in the operation of the
business of the Borrower or such Subsidiary or (B) which are being
contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing the forfeiture or sale of the property
or assets subject to any such Lien;
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(iii) Liens in existence on the Effective Date which are
listed, and the property subject thereto described, on Schedule VII
attached hereto, but only to the respective date, if any, set forth in
such Schedule VII for the removal and termination of any such Liens,
plus renewals, replacements and extensions of such Liens (other than
Liens securing the SBA Loan) to the extent set forth on Schedule VII,
provided that (A) the aggregate principal amount of the Indebtedness,
if any, secured by such Liens does not increase from that amount
outstanding at the time of any such renewal or extension and (B) any
such renewal or extension does not encumber any additional assets or
properties of Holdings or any of its Subsidiaries;
(iv) Permitted Encumbrances;
(v) Liens created pursuant to the Security Documents;
(vi) licenses, leases or subleases granted to other Persons
in the ordinary course of business not materially interfering with the
conduct of the business of Holdings and its Subsidiaries taken as a
whole;
(vii) Liens upon assets subject to Capitalized Lease
Obligations to the extent permitted by Section 9.04, provided that (A)
such Liens only serve to secure the payment of Indebtedness arising
under such Capitalized Lease Obligation and (B) the Lien encumbering
the asset giving rise to the Capitalized Lease Obligation does not
encumber any other asset of the Borrower or any Subsidiary of the
Borrower;
(viii) Liens placed upon equipment or machinery used in the
ordinary course of business of the Borrower or any of its Subsidiaries
at the time of acquisition thereof by the Borrower or any such
Subsidiary or within 120 days thereafter to secure Indebtedness
incurred to pay all or a portion of the purchase price thereof, and
all renewals, replacements and extensions thereof, provided that (A)
the aggregate outstanding principal amount of all Indebtedness secured
by Liens permitted by this clause (viii) shall not at any time exceed
$2,000,000 at any time outstanding and (B) in all events, the Lien
encumbering the equipment or machinery so acquired does not encumber
any other asset of the Borrower or such Subsidiary;
(ix) easements, rights-of-way, restrictions (including
zoning restrictions), encroachments, protrusions and other similar
charges or encumbrances, and minor title deficiencies, in each case
whether now or hereafter in existence, not securing Indebtedness and
not materially interfering with the conduct of the business of the
Borrower or any of its Subsidiaries;
(x) Liens arising from precautionary UCC financing
statement filings regarding operating leases entered into by the
Borrower or any of its Subsidiaries in the ordinary course of
business;
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(xi) Liens arising out of the existence of judgments or
awards not constituting an Event of Default under Section 10.09,
provided that no cash or property is deposited or delivered to secure
the respective judgment or award (or any appeal bond in respect
thereof, except as permitted by following clause (xiii));
(xii) statutory and contractual landlords' liens under
leases to which the Borrower or any of its Subsidiaries is a party;
(xiii) Liens (other than any Lien imposed by ERISA) (A)
incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and
other types of social security or (B) to secure the performance of
tenders, statutory obligations (other than excise taxes), surety,
stay, customs and appeal bonds, statutory bonds, bids, leases,
government contracts, trade contracts, performance and return of money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money) and (C) deposits made in the ordinary
course of business to secure liability for premiums to insurance
carriers, provided that the aggregate amount of deposits at any time
pursuant to clauses (B) and (C) shall not exceed $500,000 in the
aggregate;
(xiv) any interest or title of a lessor, sublessor, licensee
or licensor under any lease or license agreement permitted by this
Agreement;
(xv) Liens in favor of a banking institution arising as a
matter of law encumbering the deposits (including the right of setoff)
held by such banking institutions incurred in the ordinary course of
business and which are within the general parameters customary in the
banking industry;
(xvi) Liens in favor of customs and revenue authorities
arising as a matter of law to secure the payment of customs duties in
connection with the importation of goods;
(xvii) Liens arising out of conditional sale, title
retention, consignment or similar arrangements for the sale of goods
entered into by the Borrower or any of its Subsidiaries in the
ordinary course of business in accordance with the past practices of
the Borrower and its Subsidiaries prior to the Initial Borrowing Date;
(xviii) Deposits made to secure statutory obligations in the
form of excise taxes;
(xix) Liens arising out of barter transactions or
arrangements for the sale or purchase of goods or services entered
into by the Borrower or any of its Subsidiaries in the ordinary course
of business in accordance with the past practices of the Borrower and
its Subsidiaries prior to the Initial Borrowing Date;
(xx) Liens on cash collateral not to exceed $500,000
arising in connection with Other Hedging Agreements permitted under
Section 9.05(xiii); and
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(xxi) Liens not otherwise permitted by the foregoing clauses
(i) through (xx) to the extent attaching to properties and assets with
an aggregate fair value not in excess of, and securing liabilities not
in excess of, $1,000,000 in the aggregate at any time outstanding.
9.02 Consolidation; Merger; Purchase or Sale of Assets; etc.
Holdings will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of (or agree to do
any of the foregoing at any future time) all or any part of its property or
assets, or enter into any sale-leaseback transactions, or purchase or otherwise
acquire (in one or a series of related trans actions) any part of the property
or assets (other than purchases or other acquisitions of inventory, materials,
equipment and intangible assets in the ordinary course of business) of any
Person, except that the following shall be permitted:
(i) Capital Expenditures by the Borrower and its
Subsidiaries shall be permitted to the extent not in violation of
Section 9.07;
(ii) each of the Borrower and its Subsidiaries may (A) in
the ordinary course of business, sell, lease or otherwise dispose of
any assets which, in the reasonable judgment of such Person, are
obsolete, worn out or otherwise no longer useful in the conduct of
such Person's business and (B) sell, lease or otherwise dispose of any
other assets, provided that the aggregate Net Sale Proceeds of all
assets subject to sales or other dispositions pursuant to this clause
(ii) which are not reinvested to acquire Reinvestment Assets in
accordance with Section 4.02(d) shall not exceed $1,000,000 in any
Fiscal Year;
(iii) sales of assets the Net Sale Proceeds of which are used
to acquire Reinvestment Assets in accordance with Section 4.02(d);
(iv) investments may be made to the extent permitted by
Section 9.05;
(v) each of the Borrower and its Subsidiaries may lease (as
lessee) real or personal property in the ordinary course of business
(so long as any such lease does not create a Capitalized Lease
Obligation except to the extent permitted by Section 9.04);
(vi) each of the Borrower and its Subsidiaries may make
sales or transfers of inventory in the ordinary course of business and
consistent with past practices (including, without limitation, sales
or transfers of inventory by the Borrower to its Subsidiaries so long
as at fair market value);
(vii) the Recapitalization shall be permitted;
(viii) the Borrower and its Subsidiaries may sell or
discount, in each case without recourse and in the ordinary course of
business, accounts receivable arising in the ordinary course of
business (A) which are overdue or (B) which the Borrower may
reasonably
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determine are difficult to collect, but only in connection with the
compromise or collection thereof consistent with customary industry
practice (and not as part of any bulk sale or financing of
receivables);
(ix) transfers of condemned property to the respective
governmental authority or agency that have condemned same (whether by
deed in lieu of condemnation or otherwise), and transfers of
properties that have been subject to a casualty to the respective
insurer of such property or its designee as part of an insurance
settlement, so long as the proceeds thereof are applied as required by
Section 4.02(e);
(x) license or sublicenses by the Borrower and its
Subsidiaries of software, trademarks and other intellectual property
in the ordinary course of business and which do not materially
interfere with the business of the Borrower or any Subsidiary;
(xi) the Borrower or any Subsidiary may enter into
consignment arrangements (as consignor or as consignee) or similar
arrangements for the sale of goods in the ordinary course of business
and consistent with the past practices of the Borrower and its
Subsidiaries prior to the Effective Date;
(xii) the Borrower or any Domestic Wholly-Owned Subsidiary of
the Borrower may transfer assets to or lease assets to or acquire or
lease assets from the Borrower or any other Domestic Wholly-Owned
Subsidiary or any Domestic Wholly-Owned Subsidiary may be merged into
the Borrower (as long as the Borrower is the surviving corporation of
such merger) or any other Domestic Wholly-Owned Subsidiary of the
Borrower; and
(xiii) so long as no Default or Event of Default then exists
or would result therefrom, the Borrower may acquire assets or the
capital stock of any Person (any such acquisition permitted by this
clause (xiii), a "Permitted Acquisition"), provided, that (i) such
Person (or the assets so acquired) was, immediately prior to such
acquisition, engaged (or used) primarily in the business permitted
pursuant to Section 9.13(a), (ii) if such acquisition is structured as
a stock acquisition, then either (A) the Person so acquired becomes as
Wholly-Owned Subsidiary of the Borrower or (B) such Person is merged
with and into the Borrower or a Wholly-Owned Subsidiary of the
Borrower (with the Borrower or such Wholly-Owned Subsidiary being the
surviving corporation of such merger), and in any case, all of the
provisions of Section 9.14 have been complied with in respect of such
Person, (iii) any Liens or Indebtedness assumed or issued in
connection with such acquisition are otherwise permitted under Section
9.01 or 9.04, as the case may be and (iv) the aggregate amount of
consideration paid by the Borrower or any other Person in connection
with all such Permitted Acquisitions shall not exceed $10,000,000.
To the extent the Required Banks waive the provisions of this Section 9.02 with
respect to the sale of any Collateral, or any Collateral is sold as permitted
by this Section 9.02, such Collateral (unless sold to Holdings or a Subsidiary
of Holdings) shall be sold free and clear of the Liens created by the
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Security Documents, and the Agent and Collateral Agent shall be authorized to
take any actions deemed appropriate in order to effect the foregoing.
9.03 Dividends. Holdings will not, and will not permit any of
its Subsidiaries to, authorize, declare or pay any Dividends with respect to
Holdings or any of its Subsidiaries, except that:
(i) any Subsidiary of the Borrower may pay Dividends to the
Borrower or any Wholly-Owned Subsidiary of the Borrower;
(ii) the Borrower may pay cash Dividends to Holdings for the
purpose of paying, so long as all proceeds thereof are promptly used
by Holdings to pay, its operating expenses incurred in the ordinary
course of business and other corporate overhead costs and expenses
(including, without limitation, legal and accounting expenses and
similar expenses);
(iii) the Borrower may pay cash Dividends to Holdings for the
purpose of paying, so long as all proceeds thereof are promptly used
by Holdings to pay, franchise taxes and federal, state and local
income taxes and interest and penalties with respect thereto, if any,
payable by Holdings, provided that any refund shall be promptly
returned by Holdings to the Borrower;
(iv) the Borrower may pay cash Dividends to Holdings for the
purpose of paying, so long as all proceeds thereof are promptly used
by Holdings to pay, management fees or executive compensation to the
extent such management fees or executive compensation are permitted by
Section 9.06(iv);
(v) Holdings may repurchase Holdings Common Stock and/or
options to purchase Holdings Common Stock held by individual
directors, executives, officers, members of management, employees or
consultants of Holdings or any of its Subsidiaries upon the death,
disability, retirement or termination of such individual director,
executive, officer, member of management, employee or consultant or
the exercise of such options in accordance with replacement option and
performance option agreements entered into as part of the Transaction
and future option agreements entered into in the ordinary course of
business; provided, however, that (A) no Default or Event of Default
then exists or would result therefrom and (B) the aggregate amount of
cash expended by Holdings pursuant to this clause (v) shall not exceed
$5,000,000 in the aggregate (plus the amount of cash proceeds received
by Holdings from reissuance to a new individual director, executive,
officer, member of management, employee or consultant of Holdings or
any of its Subsidiaries of such Holdings Common Stock as a result of
such individual replacing a then employed or retained individual
director, executive, officer, member of management, employee or
consultant of Holdings or any of its Subsidiaries); and provided
further, that Holdings may purchase, redeem or otherwise acquire
common stock of Holdings (or options to purchase such common stock)
pursuant to this clause (v) without regard to restrictions set forth
in the
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first proviso above for consideration consisting of the proceeds of
key man life insurance obtained for the purposes described in this
clause (v);
(vi) the Borrower may pay cash Dividends to Holdings for the
purpose of enabling Holdings to make the purchases referred to in
clause (v) above, so long as all proceeds thereof are promptly used by
Holdings to make such purchases and/or pay such Dividends;
(vii) the Borrower may pay cash Dividends to Holdings for the
purpose of enabling Holdings to consummate the Recapitalization; and
(viii) Holdings may pay cash dividends, make distributions on
its capital stock or make purchases or redemptions of its capital
stock (and the Borrower may pay cash dividends or make distributions
on its capital stock for purposes of enabling Holdings to make such
dividends, distributions, purchases or redemptions) to the extent that
the aggregate amount of all such dividends, distributions, purchases
and redemptions from and after the Initial Borrowing Date to the date
of the proposed dividend, distribution, purchase or redemption (after
giving effect to such proposed dividend, distribution, purchase or
redemption) would not exceed $5,000,000; provided, however, that no
Event of Default or Default shall have occurred and be continuing
before or after giving effect to any such proposed dividend,
distribution, purchase or redemption.
9.04 Indebtedness. Holdings will not, and will not permit
any of its Subsidiaries to, contract, create, incur, assume or suffer to exist
any Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and
the other Credit Documents;
(ii) Existing Indebtedness shall be permitted to the extent
the same is listed on Schedule V hereto, including any refinancings or
renewals thereof (other than the SBA Loan), provided that (A) the
aggregate principal amount of such Indebtedness does not increase from
that amount outstanding at the time of any such renewal or refinancing
and (B) the Weighted Average Life to Maturity of such Indebtedness is
not decreased;
(iii) Indebtedness of the Borrower incurred under the Senior
Subordinated Notes in an aggregate principal amount not to exceed
$100,000,000 (as reduced by any repayments of principal thereof) and
guarantees of such Indebtedness by any Subsidiary of the Borrower;
(iv) accrued expenses and current trade accounts payable
incurred in the ordinary course of business;
(v) Indebtedness under Interest Rate Protection Agreements
on terms reasonably acceptable to the Agent;
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(vi) Indebtedness evidenced by Capitalized Lease Obligations
to the extent permitted pursuant to Section 9.07;
(vii) intercompany Indebtedness of any Domestic Wholly-Owned
Subsidiary of the Borrower owing to the Borrower or any other Domestic
Wholly-Owned Subsidiary of the Borrower, or of the Borrower owing to
any Domestic Wholly-Owned Subsidiary of the Borrower, to the extent
permitted by Section 9.05(v) or (vi);
(viii) Indebtedness of any Wholly-Owned Subsidiary of the
Borrower to the Borrower or another Wholly-Owned Subsidiary of the
Borrower constituting the purchase price in respect of intercompany
transfers of goods made in the ordinary course of business to the
extent not constituting Indebtedness for borrowed money;
(ix) Indebtedness subject to liens permitted under Section
9.01(viii);
(x) Contingent Obligations of the Borrower or any
Subsidiary as a guarantor of the lessee under any lease pursuant to
which the Borrower or a Subsidiary is the lessee so long as such lease
is otherwise permitted hereunder;
(xi) Indebtedness under Other Hedging Agreements (A) that
are futures contracts for the purchase of raw materials used by the
Borrower and its Subsidiaries incurred in the ordinary course of
business and (B) otherwise, the liabilities of which shall not exceed
$500,000 in the aggregate at any one time, on all terms acceptable to
the Agent; and
(xii) additional indebtedness of the Borrower and its
Subsidiaries not to exceed $5,000,000 in aggregate principal amount
outstanding at any one time.
9.05 Advances, Investments and Loans. Holdings will not, and
will not permit any of its Subsidiaries to, directly or indirectly, lend money
or credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any other Person, or purchase or own a futures contract or
otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, or hold any
cash or Cash Equivalents, except that the following shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and hold
accounts receivables owing to any of them, if created or acquired in
the ordinary course of business and payable or dischargeable in
accordance with customary terms;
(ii) the Borrower and its Subsidiaries may acquire and hold
cash and Cash Equivalents, provided that during any time that
Revolving Loans of Non-Defaulting Banks are outstanding, the aggregate
amount of cash and Cash Equivalents permitted to be held by the
Borrower and its Subsidiaries shall not exceed $2,500,000 for any
period of five consecutive days;
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(iii) the Borrower and its Subsidiaries may make loans and
advances in the ordinary course of business to their respective
officers, directors and employees so long as the aggregate principal
amount thereof at any time outstanding shall not exceed $500,000;
(iv) the Borrower may enter into Interest Rate Protection
Agreements to the extent permitted by Section 9.04(v);
(v) any Domestic Wholly-Owned Subsidiary may make
intercompany loans to the Borrower or any Domestic Wholly-Owned
Subsidiary and the Borrower may make inter company loans and advances
to any Domestic Wholly-Owned Subsidiary;
(vi) intercompany Indebtedness existing on the Effective
Date to the extent such intercompany Indebtedness is evidenced by an
intercompany note in the form of Exhibit M, which note is pledged by
the holder thereof as Collateral pursuant to the Pledge Agreement;
(vii) the Borrower and it Subsidiaries may sell or transfer
assets to each other to the extent permitted by Section 9.02;
(viii) the Borrower may establish Subsidiaries to the extent
permitted by Section 9.11;
(ix) Holdings may repurchase Holdings Common Stock to the
extent permitted by Section 9.03;
(x) promissory notes and other similar non-cash
consideration received by the Borrower and its Subsidiaries in
connection with dispositions permitted by Section 9.02 so long as the
aggregate principal amount thereof does not exceed $1,000,000 at any
one time outstanding;
(xi) the Borrower and its Subsidiaries may acquire and own
investments (including debt obligations) received in connection with
the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(xii) investments by the Borrower in or to any Domestic
Wholly-Owned Subsidiary;
(xiii) the Borrower may enter into Other Hedging Agreements to
the extent permitted by Section 9.04(xi);
(xiv) Permitted Acquisition's shall be permitted; and
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(xv) in addition to the foregoing, the Borrower and its
Subsidiaries may make additional loans, advances and investments not
to exceed $5,000,000 in the aggregate, net of any returns of capital.
9.06 Transactions with Affiliates. Holdings will not, and
will not permit any of its Subsidiaries to, enter into any transaction or
series of related transactions, whether or not in the ordinary course of
business, with any Affiliate of Holdings or any of its Subsidiaries, other than
in the ordinary course of business and on terms and conditions substantially as
favorable to Holdings or such Subsidiary as would reasonably be obtained by
Holdings or such Subsidiary at that time in a comparable arm's-length
transaction with a Person other than an Affiliate, except that:
(i) Dividends may be paid to the extent provided in Section
9.03;
(ii) loans may be made and other transactions may be entered
into between the Borrower and its Subsidiaries to the extent permitted
by Sections 9.02, 9.04 and 9.05;
(iii) customary fees may be paid to non-officer directors of
Holdings;
(iv) Holdings and its Subsidiaries may enter into and make
payments pursuant to employment arrangements with respect to the
procurement of services of their respective officers and employees in
the ordinary course of business;
(v) Holdings may make capital contributions to the
Borrower;
(vi) Holdings and/or the Borrower may pay to Hicks, Muse &
Co. Partners, L.P., the amount set forth in the Monitoring Agreement;
(vii) Holdings and/or any of its Subsidiaries may provide
management services to, or receive management services on an
arm's-length basis from, an Affiliate of Holdings or any of its
Subsidiaries; and
(viii) the Borrower or any of its Subsidiaries may make
payments required under that certain Stock Purchase Agreement dated
September 27, 1996 relating to the acquisition of Vinyl Building
Specialties of Connecticut, Inc. and Bishop Manufacturing Co. of New
York, Inc. by the Borrower, as such Stock Purchase Agreement is in
effect as of the Initial Borrowing Date.
Except as specifically provided above, no management or
similar fees shall be paid or payable by Holdings or any of its Subsidiaries to
any Person.
9.07 Capital Expenditures. (a) Holdings will not, and will
not permit any of its Subsidiaries to, make any Capital Expenditures except in
accordance with this Section 9.07.
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(b) Notwithstanding anything to the contrary contained in
clause (a) above, during any Fiscal Year the Borrower and its Subsidiaries may
make Capital Expenditures so long as the aggregate amount of such Capital
Expenditures made under this Section 9.07(b) does not exceed in any Fiscal Year
set forth below the amount set forth opposite such Fiscal Year:
Fiscal Year Amount
----------- ------
1996 $4,500,000
1997 $4,750,000
1998 $5,000,000
1999 $5,250,000
2000 $5,500,000
2001 $5,750,000
(c) Notwithstanding anything to the contrary contained in
clauses (a) or (b) above, to the extent that the aggregate amount of Capital
Expenditures made by the Borrower and its Subsidiaries pursuant to clause (b)
above (excluding only those Capital Expenditures made pursuant to clause (d)
below) in any Fiscal Year is less than the amount set forth above in clause (b)
with respect to such Fiscal Year, up to 50% of the amount of such difference
may be carried forward and used by the Borrower and its Subsidiaries to make
Capital Expenditures in the immediately succeeding Fiscal Year.
(d) In addition to the Capital Expenditures permitted
pursuant to preceding clauses (b) and (c), the Borrower and its Subsidiaries
may make additional Capital Expenditures as follows: (i) Capital Expenditures
consisting of the reinvestment of Net Sale Proceeds of asset sales not required
to be applied to prepay the Loans pursuant to Section 4.02(b) as a result of
(A) clause (ii) of the first parenthetical phrase contained therein and (B) the
acquisition of Reinvestment Assets pursuant to the proviso thereto, (ii) the
reinvestment of proceeds of Recovery Events not required to be applied to
prepay the Loans pursuant to Section 4.02(c), and (iii) Capital Expenditures
constituting Permitted Acquisitions.
9.08 Minimum Consolidated Interest Coverage Ratio. The
Borrower will not permit the Consolidated Interest Coverage Ratio for any Test
Period ended on the last day of a fiscal quarter of the Borrower set forth
below to be less than the amount set forth opposite such fiscal quarter below:
Fiscal Quarter Ending Ratio
-------------------- -----
December 31, 1996 1.50:1
March 31, 1997 1.50:1
June 30, 1997 1.50:1
September 30, 1997 1.50:1
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December 31, 1997 1.50:1
March 31, 1998 1.65:1
June 30, 1998 1.65:1
September 30, 1998 1.65:1
December 31, 1998 1.65:1
March 31, 1999 1.80:1
June 30, 1999 1.80:1
September 30, 1999 1.80:1
December 31, 1999 1.80:1
March 31, 2000 2.00:1
June 30, 2000 2.00:1
September 30, 2000 2.00:1
December 31, 2000 2.00:1
March 31, 2001 2.00:1
June 30, 2001 2.00:1
September 30, 2001 2.00:1
December 31, 2001 2.00:1
Notwithstanding anything to the contrary herein, for purposes of
determining the Consolidated Interest Coverage Ratio pursuant to this Section
9.08 for the Test Periods ending December 31, 1996, March 31, 1997, June 30,
1997 and September 30, 1997, (i) Consolidated EBITDA for the fiscal quarters
ending December 31, 1995, March 31, 1996, June 30, 1996 and September 30, 1996
shall be deemed to be $7,162,000, $5,522,000, $7,228,000 and $6,795,000,
respectively, and (ii) Consolidated Net Cash Interest Expense for the fiscal
quarters ending December 31, 1995, March 31, 1996, June 30, 1996 and September
30, 1996 shall be deemed to be $2,750,000, for each such fiscal quarter.
9.09 Minimum Consolidated EBITDA. The Borrower will not
permit Consolidated EBITDA for any Test Period, in each case taken as one
accounting period, ended on the last day of a fiscal quarter of the Borrower
set forth below to be less than the amount set forth opposite such fiscal
quarter below:
Fiscal Quarter Ending Amount
--------------------- ------
December 31, 1996 $16,510,000
March 31, 1997 $16,520,000
June 30, 1997 $16,520,000
September 30, 1997 $16,520,000
December 31, 1997 $16,520,000
March 31, 1998 $18,180,000
June 30, 1998 $18,180,000
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September 30, 1998 $18,180,000
December 31, 1998 $18,180,000
March 31, 1999 $19,850,000
June 30, 1999 $19,850,000
September 30, 1999 $19,850,000
December 31, 1999 $19,850,000
March 31, 2000 $22,070,000
June 30, 2000 $22,070,000
September 30, 2000 $22,070,000
December 31, 2000 $22,070,000
March 31, 2001 $22,090,000
June 30, 2001 $22,090,000
September 30, 2001 $22,090,000
December 31, 2001 $22,090,000
Notwithstanding anything to the contrary herein, for purposes of
determining the minimum Consolidated EBITDA pursuant to this Section 9.09 for
the Test Periods ending December 31, 1996, March 31, 1997, June 30, 1997 and
September 30, 1997, Consolidated EBITDA for the fiscal quarters ending December
31, 1995, March 31, 1996, June 30, 1996 and September 30, 1996 shall be deemed
to be $7,162,000, $5,522,000, $7,228,000 and $6,795,000, respectively.
9.10 Limitation on Modifications of Indebtedness and Payments
of Indebtedness; Modifications of Certificate of Incorporation, By-Laws and
Certain Other Agreements; etc. Holdings will not, and will not permit any of
its Subsidiaries to:
(i) amend or modify, or permit the amendment or modification
of, any provision of the Existing Indebtedness or the Monitoring
Agreement, or of any agreement (including, without limitation, any
purchase agreement, indenture, loan agreement, security agreement or
certificate of designation) relating thereto other than any amendments
or modifications to the Existing Indebtedness which do not in any way
adversely affect the interests of the Banks and are otherwise
permitted under Section 9.04(ii);
(ii) amend or modify, or permit the amendment or modification
of, any provision of any Senior Subordinated Note Document, except for
any amendment or modification which provides solely for the addition
of subsidiary guarantors;
(iii) make (or give any notice in respect of) any voluntary
or optional payment or prepayment on or redemption or acquisition for
value of, or any prepayment or redemption as a result of any asset
sale, change of control or similar event of, any Senior Subordinated
Note; or
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(iv) amend, modify or change its Certificate of Incorporation
(including, without limitation, by the filing or modification of any
certificate of designation or By-Laws, or any agreement entered into
by it, with respect to its capital stock (including any Shareholders'
Agreement), or enter into any new agreement with respect to its
capital stock, other than any amendments, modifications or changes
pursuant to this clause (iii) or any such new agreements pursuant to
this clause (iii) which do not in any way adversely affect the
interests of the Banks.
9.11 Limitation on Certain Restrictions on Subsidiaries.
Holdings will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any such Subsidiary to (i) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by Holdings or any Subsidiary
of Holdings, or pay any Indebtedness owed to Holdings or a Subsidiary of
Holdings, (ii) make loans or advances to Holdings or any of Holdings'
Subsidiaries or (iii) transfer any of its properties or assets to Holdings or
any of Holdings' Subsidiaries, except for such encumbrances or restrictions
existing under or by reason of (A) applicable law, (B) this Agreement and the
other Credit Documents, (C) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of the Borrower or a
Subsidiary of the Borrower, (D) customary provisions restricting assignment of
any licensing agreement entered into by the Borrower or a Subsidiary of the
Borrower in the ordinary course of business and (E) the Senior Subordinated
Note Documents.
9.12 Limitation on Issuance of Capital Stock. (a) Holdings
shall not issue any class of capital stock other than non-redeemable common
stock.
(b) No Subsidiary of Holdings shall issue, or permit any of
its Subsidiaries to issue, any class of capital stock other than non-redeemable
common stock, provided that Subsidiaries formed after the Effective Date
pursuant to Section 9.15 may issue capital stock to the Borrower or a
Subsidiary of the Borrower which is to own such stock. All capital stock issued
in accordance with this Section 9.13(b) shall be delivered to the Collateral
Agent for pledge pursuant to the applicable Pledge Agreement.
9.13 Changes in Business. (a) The Borrower and its
Subsidiaries will not engage in any business other than the business engaged in
by them as of the Effective Date and activities directly related thereto, and
businesses complementary to the business or similar or related businesses.
(b) Holdings will engage in no business other than (i) its
ownership of the capital stock of the Borrower, (ii) the issuance of the
Holdings Common Stock and options and warrants to purchase Holdings Common
Stock and (iii) activities associated with expenses paid with dividends made by
the Borrower pursuant to Section 9.03. Notwithstanding the foregoing, Holdings
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may engage in those activities that are incidental to (A) the maintenance of
its corporate existence in compliance with applicable law, (B) legal, tax and
accounting matters in connection with any of the foregoing activities and (C)
entering into, and performing its obligations under, the Documents to which it
is a party.
9.14 Limitation on Creation of Subsidiaries. Holdings will
not, and will not permit any Subsidiary to, establish, create or acquire any
additional Subsidiaries without the prior written consent of the Required
Banks. Without limiting the foregoing, (i) such new Subsidiaries may be
required to execute such guarantees and security documents as the Required
Banks shall request (including documents substantially similar to or amendments
to each of (A) the Pledge Agreement, (B) the Subsidiary Guarantee and (C) the
Security Agreement), and in such forms as shall be satisfactory to them and
(ii) the holders of the capital stock of such new Subsidiaries may be required
to execute and deliver additional pledge agreements, in form and substance
satisfactory to the Agent.
SECTION 10. EVENTS OF DEFAULT. Upon the occurrence of any
of the following specified events (each an "Event of Default"):
10.01 Payments. The Borrower shall (i) default in the payment
when due of any principal of any Revolving Loan or any Revolving Note or (ii)
default, and such default shall continue unremedied for three or more Business
Days, in the payment when due of any Unpaid Drawings or interest on any
Revolving Loan or Revolving Note, or any Fees or any other amounts owing
hereunder or thereunder; or
10.02 Representations, etc. Any representation, warranty or
statement made by any Credit Party herein or in any other Credit Document or in
any certificate delivered pursuant hereto or thereto shall prove to be untrue
in any material respect on the date as of which made or deemed made; or
10.03 Covenants. Any Credit Party shall (i) default in the
due performance or observance by it of any term, covenant or agreement
contained in Section 8.01(f)(i), 8.07, 8.11, 8.13 or Section 9 or (ii) default
in the due performance or observance by it of any other term, covenant or
agreement contained in this Agreement and such default shall continue
unremedied for a period of 30 days after written notice to the Borrower by the
Agent or any Bank; or
10.04 Default Under Other Agreements. Holdings or any of its
Subsidiaries shall (i) default in any payment of any Indebtedness (other than
the Obligations) beyond the period of grace, if any, provided in the instrument
or agreement under which such Indebtedness was created or (ii) default in the
observance or performance of any agreement or condition relating to any
Indebtedness (other than the Obligations) or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
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(or a trustee or agent on behalf of such holder or holders) to cause
(determined without regard to whether any notice is required), any such
Indebtedness to become due prior to its stated maturity, or (iii) any
Indebtedness (other than the Obligations) of Holdings or any of its
Subsidiaries shall be declared to be due and payable, or required to be prepaid
other than by a regularly scheduled required prepayment, prior to the stated
maturity thereof, provided that (A) it shall not be a Default or an Event of
Default under this Section 10.04 unless the aggregate principal amount of all
Indebtedness as described in preceding clauses (i) through (iii), inclusive, is
at least $5,000,000; or
10.05 Bankruptcy, etc. Holdings or any of its Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "Bankruptcy," as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against Holdings or any of its Subsidiaries and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
Holdings or any of its Subsidiaries, or Holdings or any of its Subsidiaries
commences any other proceeding under any reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation
or similar law of any jurisdiction whether now or hereafter in effect relating
to Holdings or any of its Subsidiaries, or there is commenced against Holdings
or any of its Subsidiaries any such proceeding which remains undismissed for a
period of 60 days, or Holdings or any of its Subsidiaries is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any such
case or proceeding is entered; or Holdings or any of its Subsidiaries suffers
any appointment of any custodian or the like for it or any substantial part of
its property to continue undischarged or unstayed for a period of 60 days; or
Holdings or any of its Subsidiaries makes a general assignment for the benefit
of creditors; or any corporate action is taken by Holdings or any of its
Subsidiaries for the purpose of effecting any of the foregoing; or
10.06 ERISA. (a) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof or a waiver of such
standard or extension of any amortization period is sought or granted under
Section 412 of the Code, any Plan shall have had or, in the reasonable opinion
of the Required Banks, is reasonably expected to have a trustee appointed to
administer such Plan, any Plan is, shall have been or is reasonably expected to
be terminated or to be the subject of termination proceedings under ERISA, any
Plan shall have an Unfunded Current Liability, a contribution required to be
made to a Plan has not been made, Holdings or any of its Subsidiaries or any
ERISA Affiliate has incurred or is reasonably expected to incur a liability to
or on account of a Plan under Section 409, 502(i), 502(l), 515, 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or
4980 of the Code, or Holdings or any of its Subsidiaries has incurred or is
reasonably expected to incur liabilities pursuant to one or more employee
welfare benefit plans (as defined in Section 3(1) of ERISA) which provide
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or employee pension benefit plans (as defined in
Section 3(2) of ERISA); (b) there shall result from any such event or events
the imposition of a lien, the granting of a security interest, or a liability
or
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a material risk of incurring a liability; and in each case in clauses (a) and
(b) above, such lien, security interest or liability, in the reasonable opinion
of the Required Banks, will have a Material Adverse Effect; or
10.07 Security Documents. At any time after the execution and
delivery thereof, any of the Security Documents shall cease to be in full force
and effect, or shall cease in any material respect to give the Collateral Agent
for the benefit of the Secured Creditors the Liens, rights, powers and
privileges purported to be created thereby (including, without limitation, a
perfected security interest in, and Lien on, all of the Collateral), in favor
of the Collateral Agent, superior to and prior to the rights of all third
Persons (except as permitted by Section 9.01), and subject to no other Liens
(except as permitted by Section 9.01), or any Credit Party shall default in the
due performance or observance of any term, covenant or agreement on its part to
be performed or observed pursuant to any of the Security Documents and such
default shall continue beyond any grace period specifically applicable thereto
pursuant to the terms of such Security Document; or
10.08 Guaranty. Any Guaranty or any provision thereof shall
cease to be in full force or effect as to the relevant Guarantor, or any
Guarantor or Person acting by or on behalf of such Guarantor shall deny or
disaffirm such Guarantor's obligations under the relevant Guaranty, or any
Guarantor shall default in the due performance or observance of any term,
covenant or agreement on its part to be performed or observed pursuant to its
Guaranty; or
10.09 Judgments. One or more judgments or decrees shall be
entered against Holdings or any of its Subsidiaries involving in the aggregate
for Holdings and its Subsidiaries a liability (not paid or fully covered by a
reputable and solvent insurance company) and such judgments and decrees either
shall be final and non-appealable or shall not be vacated, discharged or stayed
or bonded pending appeal for any period of 60 consecutive days, and the
aggregate amount of all such judgments exceeds $5,000,000; or
10.10 Change of Control. A Change of Control shall occur; or
10.11 Environmental Matters. At any time after the execution
and delivery thereof, the Environmental Indemnity Agreement or any provision
thereof shall cease to be in full force or effect as to Holdings or any of its
Subsidiaries, or Holdings or any of its Subsidiaries shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to the Environmental Indemnity Agreement, and
such default shall continue unremedied for a period of 30 days after written
notice to the Borrower by the Agent or any Bank;
then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Agent, upon the written request of the
Required Banks, shall by written notice to the Borrower, take any or all of the
following actions, without prejudice to the rights of the Agent, any Bank or
the holder of any Revolving Note to enforce its claims against any Credit Party
(provided
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that, if an Event of Default specified in Section 10.05 shall occur with
respect to the Borrower, the result which would occur upon the giving of
written notice by the Agent to the Borrower as specified in clauses (i) and
(ii) below shall occur automatically without the giving of any such notice):
(i) declare the Total Revolving Loan Commitment terminated, whereupon all
Revolving Loan Commitments of the Banks shall forthwith terminate immediately
and any Commitment Commission shall forthwith become due and payable without
any other notice of any kind; (ii) declare the principal of and any accrued
interest in respect of all Revolving Loans and the Revolving Notes and all
Obligations owing hereunder and thereunder to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by each Credit Party; (iii)
terminate any Letter of Credit, which may be terminated, in accordance with its
terms; (iv) direct the Borrower to pay (and the Borrower agrees that upon
receipt of such notice, or upon the occurrence of an Event of Default specified
in Section 10.05 with respect to the Borrower, it will pay) to the Collateral
Agent at the Payment Office such additional amount of cash, to be held as
security by the Collateral Agent, as is equal to the aggregate Stated Amount of
all Letters of Credit issued for the account of the Borrower and then
outstanding; (v) enforce, as Collateral Agent, all of the Liens and security
interests created pursuant to the Security Documents; and (vi) apply any cash
collateral as provided in Section 4.02.
SECTION 11. DEFINITIONS AND ACCOUNTING TERMS.
11.01 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"Additional Collateral" shall mean all property (whether real
or personal) in which security interests are granted (or have been purported to
be granted) (and continue to be in effect at the time of determination)
pursuant to Section 8.10.
"Additional Mortgage" shall have the meaning provided in
Section 8.10(a).
"Additional Mortgaged Property" shall have the meaning
provided in Section 8.10(a).
"Additional Security Documents" shall mean all mortgages,
pledge agreements, security agreements and other security documents entered
into pursuant to Section 8.10 with respect to Additional Collateral.
"Adjusted Certificate of Deposit Rate" shall mean, on any
day, the sum (rounded to the nearest 1/100 of 1%) of (i) the rate obtained by
dividing (A) the most recent weekly average dealer offering rate for negotiable
certificates of deposit with a three-month maturity in the secondary market as
published in the most recent Federal Reserve System publication entitled
"Select Interest Rates," published weekly on Form H.15 as of the date hereof,
or if such publication
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or a substitute containing the foregoing rate information shall not be
published by the Federal Reserve System for any week, the weekly average
offering rate determined by the Agent on the basis of quotations for such
certificates received by it from three certificate of deposit dealers in New
York of recognized standing or, if such quotations are unavailable, then on the
basis of other sources reasonably selected by the Agent, by (B) a percentage
equal to 100% minus the stated maximum rate of all reserve requirements as
specified in Regulation D applicable on such day to a three-month certificate
of deposit of a member bank of the Federal Reserve System in excess of $100,000
(including, without limitation, any marginal, emergency, supplemental, special
or other reserves), plus (ii) the then daily net annual assessment rate as
estimated by the Agent for determining the current annual assessment payable by
the Agent to the Federal Deposit Insurance Corporation for insuring three-month
certificates of deposit.
"Adjusted Consolidated Working Capital" at any time shall
mean Consolidated Current Assets (but excluding therefrom all cash and Cash
Equivalents) less Consolidated Current Liabilities.
"Adjusted Percentage" shall mean (x) at a time when no Bank
Default exists, for each Bank, such Bank's Percentage and (y) at a time when a
Bank Default exists (i) for each Bank that is a Defaulting Bank, zero and (ii)
for each Bank that is a Non-Defaulting Bank, the percentage determined by
dividing such Bank's Revolving Loan Commitment at such time by the Adjusted
Total Revolving Loan Commitment at such time, it being understood that all
references herein to Revolving Loan Commitments and the Adjusted Total
Revolving Loan Commitment at a time when the Total Revolving Loan Commitment or
Adjusted Total Revolving Loan Commitment, as the case may be, has been
terminated shall be references to the Revolving Loan Commitments or Adjusted
Total Revolving Loan Commitment, as the case may be, in effect immediately
prior to such termination, provided that (A) no Bank's Adjusted Percentage
shall change upon the occurrence of a Bank Default from that in effect
immediately prior to such Bank Default if after giving effect to such Bank
Default, and any repayment of Revolving Loans at such time pursuant to Section
4.02(a) or otherwise, the sum of (i) the aggregate outstanding principal amount
of Revolving Loans of all Non-Defaulting Banks plus (ii) the Letter of Credit
Outstandings, exceed the Adjusted Total Revolving Loan Commitment; (B) the
changes to the Adjusted Percentage that would have become effective upon the
occurrence of a Bank Default but that did not become effective as a result of
the preceding clause (A) shall become effective after the occurrence of the
relevant Bank Default to the extent the sum of (i) the aggregate outstanding
principal amount of the Revolving Loans of all Non-Defaulting Banks plus (ii)
the Letter of Credit Outstandings is equal to or less than the Adjusted Total
Revolving Loan Commitment; and (C) if (i) a Non-Defaulting Bank's Adjusted
Percentage is changed pursuant to the preceding clause (B) and (ii) any
repayment of such Bank's Revolving Loans, or of Unpaid Drawings with respect to
Letters of Credit, that were made during the period commencing after the date
of the relevant Bank Default and ending on the date of such change to its
Adjusted Percentage must be returned to the Borrower as a preferential or
similar payment in any bankruptcy or similar proceeding of the Borrower, then
the change to such Non-Defaulting Bank's
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Adjusted Percentage effected pursuant to said clause (B) shall be reduced to
that positive change, if any, as would have been made to its Adjusted
Percentage if (x) such repayments had not been made and (y) the maximum change
to its Adjusted Percentage would have resulted in the sum of the outstanding
principal of Revolving Loans made by such Bank plus such Bank's new Adjusted
Percentage of the outstanding principal amount of Letter of Credit Outstandings
equaling such Bank's Revolving Loan Commitment at such time.
"Adjusted Total Revolving Loan Commitment" shall mean at any
time the Total Revolving Loan Commitment less the aggregate Revolving Loan
Commitments of all Defaulting Banks.
"Affected Eurodollar Loans" shall have the meaning provided in
Section 4.02(g).
"Affiliate" shall mean, with respect to any Person, any other
Person (including, for purposes of Section 9.06 only, all directors, officers
and partners of such Person) directly or in directly controlling, controlled
by, or under direct or indirect common control with, such Person; provided,
however, that for purposes of Section 9.06, an Affiliate of Holdings shall
include any Person that directly or indirectly owns more than 5% of any class
of the capital stock of Holdings and any officer or director of Holdings or any
such Person. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction
of the management and policies of such other Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" shall mean Bankers Trust Company, in its capacity as
Agent for the Banks hereunder, and shall include any successor to the Agent
appointed pursuant to Section 12.09.
"Aggregate Unutilized Commitments" with respect to any Bank
at any time shall mean such Bank's Unutilized Revolving Loan Commitment at such
time, if any.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented, amended, restated, extended, renewed or replaced from time to
time.
"Anticipated Reinvestment Amount" shall mean, with respect to
any Reinvestment Election, the amount specified in the Reinvestment Notice
delivered by the Borrower in connection therewith as the amount that the
Borrower intends to use to purchase, construct or otherwise acquire
Reinvestment Assets.
"Applicable Margin" shall mean a percentage per annum equal
to (i) in the case of Revolving Loans which are maintained as Base Rate Loans,
1.50%, and (ii) in the case of Revolving Loans which are maintained as
Eurodollar Loans, 2.50%.
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"Assignment and Assumption Agreement" shall mean the
Assignment and Assumption Agreement substantially in the form of Exhibit N
attached hereto (appropriately completed).
"Authorized Officer" of any Credit Party shall mean any of
the Chairman of the Board, the President, the Chief Financial Officer, any Vice
President, the Treasurer, the Secretary, any Assistant Secretary, any Assistant
Treasurer or the Controller of such Credit Party or any other officer of such
Credit Party which is designated in writing to the Agent, BTCo and any other
Issuing Bank by any of the foregoing officers of such Credit Party as being
authorized to give such notices under this Agreement.
"Bank" shall mean each financial institution listed on
Schedule I attached hereto, as well as any Person which becomes a "Bank"
hereunder pursuant to Section 13.04(b).
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing or to fund
its portion of any unreimbursed payment under Section 2.03(c) or (ii) a Bank
having notified in writing the Borrower and/or the Agent that it does not
intend to comply with its obligations under Section 1.01(c) or Section 2, in
the case of either clause (i) or (ii) as a result of any takeover of such Bank
by any regulatory authority or agency.
"Bankruptcy Code" shall have the meaning provided in Section
10.05.
"Base Rate" at any time shall mean the highest of (i) 1/2 of
1% in excess of the Adjusted Certificate of Deposit Rate and (ii) the Prime
Lending Rate.
"Base Rate Loan" shall mean each Loan designated or deemed
designated as such by the Borrower at the time of the incurrence thereof or
conversion thereto.
"Borrower" shall have the meaning provided in the preamble of
this Agreement.
"Borrowing" shall mean the borrowing of one Type of Revolving
Loan from all the Banks having Revolving Loan Commitments on a given date (or
resulting from a conversion or conversions on such date) having in the case of
Eurodollar Loans the same Interest Period, provided that Base Rate Loans
incurred pursuant to Section 1.10(b) shall be considered part of the related
Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company in its individual
capacity.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day except Saturday, Sunday and any day which
shall be in New York City a legal holiday or a day on which banking
institutions are authorized or required by law or other government
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action to close and (ii) with respect to all notices and determinations in
connection with, and payments of principal and interest on, Eurodollar Loans,
any day which is a Business Day described in clause (i) above and which is also
a day for trading by and between banks in the New York inter bank Eurodollar
market.
"Capital Expenditures" shall mean, with respect to any
Person, all expenditures by such Person which should be capitalized in
accordance with generally accepted accounting principles, including all such
expenditures with respect to fixed or capital assets (including, without
limitation, expenditures for maintenance and repairs which should be
capitalized in accordance with generally accepted accounting principles) and
the amount of Capitalized Lease Obligations incurred by such Person.
"Capitalized Lease Obligations" of any Person shall mean all
rental obligations which, under generally accepted accounting principles, are
or will be required to be capitalized on the books of such Person, in each case
taken at the amount thereof accounted for as indebtedness in accordance with
such principles.
"Cash Equivalents" shall mean, as to any Person, (i)
securities issued or directly and fully guaranteed or insured by the United
States or any agency or instrumentality thereof (provided that the full faith
and credit of the United States is pledged in support thereof) having
maturities of not more than one year from the date of acquisition, (ii) time
deposits and certificates of deposit of any commercial bank having, or which is
the principal banking subsidiary of a bank holding company organized under the
laws of the United States, any State thereof or the District of Columbia having
capital, surplus and undivided profits aggregating in excess of $200,000,000,
with maturities of not more than one year from the date of acquisition by such
Person, (iii) repurchase obligations with a term of not more than 90 days for
underlying securities of the types described in clause (i) above entered into
with any bank meeting the qualifications specified in clause (ii) above, (iv)
commercial paper issued by any Person incorporated in the United States rated
at least A-1 or the equivalent thereof by Standard & Poor's Corporation or at
least P-1 or the equivalent thereof by Moody's Investors Service, Inc. and in
each case maturing not more than one year after the date of acquisition by such
Person, (v) investments in money market funds substantially all of whose assets
are comprised of securities of the types described in clauses (i) through (iv)
above and (vi) deposit accounts maintained in the ordinary course of business.
"Change of Control" shall mean (i) Holdings shall at any time
cease to own 100% of the capital stock of the Borrower; (ii) if the Permitted
Investors shall cease to have the power, directly or indirectly, to vote or
direct the voting of securities having a majority of the ordinary voting power
for the election of directors of Holdings, provided that the occurrence of the
foregoing event shall not be deemed a "Change of Control" if (A) at any time
prior to the consummation of an Initial Public Offering, (1) the Permitted
Investors otherwise have the right to designate (and do so designate) a
majority of the board of directors of Holdings or (2) the HM Group own of
record and
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beneficially an amount of common stock of Holdings equal to at least 50% of the
amount of common stock of Holdings (adjusted for stock splits, stock dividends
and other similar events on an equitable basis) owned by the HM Group of record
and beneficially as of the Initial Borrowing Date and such ownership by the HM
Group represents the largest single block of voting securities of Holdings held
by any "person" or "group" for purposes of Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or (B) at any time after
the consummation of an Initial Public Offering, (1) no "person" or "group" (as
such terms are used in Section 13(d) and 14(d) of the Exchange Act), excluding
the Permitted Investors, shall become the "beneficial owner" (as defined in
Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of
more than the greater of (x) 15% of the then outstanding voting stock of
Holdings and (y) the percentage of the then outstanding voting stock of
Holdings owned by the Permitted Investors and (2) the board of directors of
Holdings shall consist of a majority of Continuing Directors.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and the rulings
issued thereunder. Section references to the Code are to the Code, as in effect
at the date of this Agreement, and to any subsequent provision of the Code,
amendatory thereof, supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or
personal) with respect to which any security interests have been granted (or
purported to be granted) pursuant to any Security Document, including, without
limitation, all Pledge Agreement Collateral, all Security Agreement Collateral,
the Mortgaged Properties, all cash and Cash Equivalents delivered as collateral
pursuant to Section 4.02 or 10 hereof and all Additional Collateral, if any.
"Collateral Agent" shall mean the Agent acting as collateral
agent for the Secured Creditors pursuant to the Security Documents.
"Collective Bargaining Agreements" shall have the meaning
provided in Section 5.05.
"Commitment" shall mean the Revolving Loan Commitment of
any Bank.
"Commitment Commission" shall have the meaning provided in
Section 3.01(a).
"Consolidated Current Assets" shall mean, at any time, the
consolidated current assets of Holdings and its Consolidated Subsidiaries.
"Consolidated Current Liabilities" shall mean, at any time,
the consolidated current liabilities of Holdings and its Consolidated
Subsidiaries at such time, but excluding (i) the current portion of any
Indebtedness under this Agreement and any other long-term Indebtedness which
would otherwise be included therein, (ii) accrued but unpaid interest with
respect to the Indebtedness
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described in clause (i), and (iii) the current portion of Indebtedness
constituting Capitalized Lease Obligations.
"Consolidated EBIT" shall mean, for any period, the
Consolidated Net Income of Holdings and its Consolidated Subsidiaries, before
Consolidated Net Cash Interest Expense and provision for taxes and without
giving effect to any extraordinary gains or losses or gains or losses from
sales of assets other than inventory sold in the ordinary course of business.
"Consolidated EBITDA" shall mean, for any period,
Consolidated EBIT, adjusted by adding thereto the amount of all amortization of
intangibles and depreciation and all non-cash charges, in each case that were
deducted in arriving at Consolidated EBIT for such period.
"Consolidated Indebtedness" shall mean the sum of (i) an
amount equal to the principal amount of all outstanding Senior Subordinated
Notes, (ii) an amount equal to the average aggregate outstanding principal
amount of Revolving Loans for the preceding twelve-month period (provided that
for purposes of determining the average aggregate outstanding amount of
Revolving Loans for Test Periods ending prior to the first anniversary of the
Initial Borrowing Date, such Test Periods shall commence on the Initial
Borrowing Date) and (iii) an amount equal to the principal amount of all other
funded indebtedness of Holdings and its respective Subsidiaries, each
determined in accordance with GAAP.
"Consolidated Interest Coverage Ratio" for any period shall
mean the ratio of Consolidated EBITDA to Consolidated Net Cash Interest Expense
for such period.
"Consolidated Net Cash Interest Expense" shall mean, for any
period, without duplication total cash interest expense (including that
attributable to Capitalized Lease Obligations in accordance with GAAP) of
Holdings and its Subsidiaries on a consolidated basis with respect to all
outstanding Indebtedness of Holdings and its Subsidiaries, including, without
limitation, all commissions, discounts and other fees and charges paid with
respect to letters of credit and bankers' acceptance financing and net costs
under Interest Rate Protection Agreements, but excluding the amortization of
any deferred financing costs incurred in connection with the Transactions net
of the total consolidated cash interest income of Holdings and its Consolidated
Subsidiaries for such period.
"Consolidated Net Income" shall mean, for any period, the
consolidated net after tax income of Holdings and its Consolidated Subsidiaries
determined in accordance with GAAP.
"Consolidated Subsidiaries" shall mean, as to any Person, all
Subsidiaries of such Person which are consolidated with such Person for
financial reporting purposes.
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"Contingent Obligation" shall mean, as to any Person, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (A) for the purchase or payment of any such primary obligation or
(B) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii)
to purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (iv) otherwise to assure
or hold harmless the holder of such primary obligation against loss in respect
thereof; provided, however, that the term Contingent Obligation shall not
include (x) endorsements of instruments for deposit or collection in the
ordinary course of business and (y) customary indemnification obligations
incurred in the ordinary course of business. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made (or, if the less, the maximum amount of such primary obligation for
which such Person may be liable pursuant to the terms of the instrument
evidencing such Contingent Obligation) or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by such Person in good
faith.
"Continuing Directors" shall mean the directors of Holdings
on the date which occurs six months prior to the consummation of an Initial
Public Offering and each other director, if such Director's nomination for
election to the Board of Directors of Holdings is recommended by a majority of
the then Continuing Directors.
"Credit Documents" shall mean this Agreement, the Subsidiary
Guaranty, each Revolving Note, the Environmental Indemnity Agreement, each
Security Document and, after the execution and delivery thereof, each
additional guaranty or security document executed pursuant to Section 8.10, in
each case as the same may be amended, restated, supplemented or otherwise
modified from time to time in accordance with the terms thereof and hereof.
"Credit Event" shall mean the making of any Loan or the
issuance of any Letter of Credit (but excluding any conversion or continuation
of an existing Loan).
"Credit Party" shall mean Holdings, the Borrower and each
Subsidiary Guarantor.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
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"Defaulting Bank" shall mean any Bank with respect to which a
Bank Default is in effect.
"Dividend" with respect to any Person shall mean that such
Person has declared or paid a dividend or returned any equity capital to its
stockholders or authorized or made any other distribution, payment or delivery
of property (other than common stock of such Person) or cash to its
stockholders as such, or redeemed, retired, purchased or otherwise acquired,
directly or indirectly, for a consideration any shares of any class of its
capital stock outstanding on or after the Effective Date (or any options or
warrants issued by such Person with respect to its capital stock), or set aside
any funds for any of the foregoing purposes, or shall have permitted any of its
Subsidiaries to purchase or otherwise acquire for a consideration any shares of
any class of the capital stock of such Person outstanding on or after the
Effective Date (or any options or warrants issued by such Person with respect
to its capital stock). Without limiting the foregoing, "Dividends" with respect
to any Person shall also include all payments made or required to be made by
such Person with respect to any stock appreciation rights, plans, equity
incentive or achievement plans or any similar plans or setting aside of any
funds for the foregoing purposes.
"Documents" shall mean the Credit Documents and the
Recapitalization Documents.
"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"Domestic Subsidiary" shall mean each Subsidiary of the
Borrower, incorporated or organized in the United States or any State or
territory thereof.
"Domestic Wholly-Owned Subsidiary" shall mean each Domestic
Subsidiary which is a Wholly-Owned Subsidiary of the Borrower.
"Drawing" shall have the meaning provided in Section 2.04(b).
"Effective Date" shall have the meaning provided in Section
13.10.
"Eligible Transferee" shall mean and include a commercial
bank, financial institution or other "accredited investor" (as defined in
Regulation D of the Securities Act).
"Employee Benefit Plans" shall mean (i) those described in
Section 5.05 and (ii) after the Initial Borrowing Date, any Plan for the
compensation of management, employees or consultants of Holdings or any of its
Subsidiaries, or any arrangement for the benefit of management, employees or
consultants of Holdings or any of its Subsidiaries, in form and substance
reasonably acceptable to Agent.
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"Environmental Claims" shall have the meaning provided in the
Environmental Indemnity Agreement.
"Environmental Indemnity Agreement" shall have the meaning
provided in Section 5.08.
"Environmental Law" shall have the meaning provided in the
Environmental Indemnity Agreement.
"Equity Issuance" shall have the meaning provided in Section
5.06(b).
"Equity Issuance Documents" shall mean the documents entered
into or delivered in connection with the Equity Issuance.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in
Section 3(9) of ERISA) which together with Holdings or any Subsidiary of
Holdings would be deemed to be a "single employer" (i) within the meaning of
Section 414(b), (c), (m) or (o) of the Code or (ii) as a result of Holdings or
a Subsidiary of Holdings being or having been a general partner of such person.
"Eurodollar Loan" shall mean each Loan designated as such by
the Borrower at the time of the incurrence thereof or conversion thereto.
"Eurodollar Rate" shall mean (i) the offered quotation to
first-class banks in the New York interbank Eurodollar market by BTCo for
Dollar deposits of amounts in immediately available funds comparable to the
outstanding principal amount of the Eurodollar Loan of BTCo with maturities
comparable to the Interest Period applicable to such Eurodollar Loan commencing
two Business Days thereafter as of 10:00 A.M. (New York time) on the date which
is two Business Days prior to the commencement of such Interest Period, divided
(and rounded off to the nearest 1/16 of 1%) by (ii) a percentage equal to 100%
minus the then stated maximum rate of all reserve requirements (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves required by applicable law) applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency funding or liabilities as
defined in Regulation D (or any successor category of liabilities under
Regulation D).
"Event of Default" shall have the meaning provided in Section
10.
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"Existing Credit Agreement" shall mean the Revolving Credit
and Term Loan Agreement, dated as of July 3, 1995, as amended from time to time
and as further amended by a Fourth Amendment to Revolving Credit and Term Loan
Agreement dated as of September 30, 1996, by and among Fojtasek Companies,
Inc., Vinyl Building Specialties of Connecticut, Inc., Bishop Manufacturing
Company, Inc., Bishop Manufacturing Company of New England, Inc., Bishop
Manufacturing Co. of New York, Inc., the lending institutions named therein
(the "Lenders") and The First National Bank of Boston, as Agent for the
Lenders.
"Existing Debt Agreements" shall have the meaning provided in
Section 5.05.
"Existing Indebtedness" shall have the meaning provided in
Section 7.21.
"Facing Fee" shall have the meaning provided in Section
3.01(c).
"Federal Funds Rate" shall mean 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 the Agent from three Federal Funds brokers of
recognized standing selected by the Agent.
"Fees" shall mean all amounts payable pursuant to or referred
to in Section 3.01.
"FIRREA" shall mean Financial Institution Reform, Recovery
and Enforcement Act of 1989.
"Fiscal Year" shall mean any fiscal year of Holdings or the
Borrower, as the case may be.
"GAAP" shall have the meaning provided in Section 13.07(a).
"Guaranteed Creditors" shall mean and include each of the
Agent, the Collateral Agent, the Banks and each party (other than any Credit
Party) party to an Interest Rate Protection Agreement or Other Hedging
Agreement to the extent such party constitutes a Secured Creditor under the
Security Documents.
"Guaranteed Obligations" shall mean all obligations of the
Borrower (i) to each Bank for the full and prompt payment when due (whether at
the stated maturity, by acceleration or otherwise) of the principal and
interest on each Revolving Note issued by the Borrower to such Bank, and
Revolving Loans made, under this Agreement and all reimbursement obligations
and
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Unpaid Drawings with respect to Letters of Credit, together with all the other
obligations and liabilities (including, without limitation, indemnities, Fees
and interest thereon) of the Borrower to such Bank now existing or hereafter
incurred under, arising out of or in connection with this Agreement or any
other Credit Document and the due performance and compliance with all the
terms, conditions and agreements contained in the Credit Documents by the
Borrower and (ii) to each Bank and each Affiliate of a Bank which enters into
an Interest Rate Protection and Other Hedging Agreements with the Borrower, the
full and prompt payment when due (whether by acceleration or otherwise) of all
obligations of the Borrower owing under any such Interest Rate Protection and
Other Hedging Agreements, whether now in existence or hereafter arising, and
the due performance and compliance with all terms, conditions and agreements
contained therein.
"Guarantor" shall mean Holdings, FCI Holding and each
Subsidiary Guarantor.
"Guaranty" shall mean and include each of the Holdings
Guaranty, the FCI Guaranty and the Subsidiary Guaranty.
"Hazardous Materials" shall have the meaning provided in the
Environmental Indemnity Agreement.
"HM Group" shall mean, collectively, (i) Hicks, Muse, Tate &
Furst Incorporated and its Affiliates (including, without limitation, HMTF),
(ii) so long as Hicks, Muse, Tate & Furst Incorporated and its Affiliates
possess sole voting right with respect to the capital stock held by each such
individual, such individuals who are or were employees, officers, directors or
partners of Hicks, Muse, Tate & Furst Incorporated or such Affiliate and the
family members of such individuals or trusts created for the sole benefit of
such family members and (iii) so long as Hicks, Muse, Tate & Furst Incorporated
and its Affiliates possess sole voting right with respect to the capital stock
held by each such Person, any Person not otherwise described by clause (i) and
(ii) above, provided that the aggregate number of shares held by all such
Persons in accordance with this clause (iii) at any time shall not exceed 5.0%
of the aggregate number of shares held by the Persons described in clause (i)
and (ii) above at such time.
"HMTF" shall mean Hicks, Muse, Tate & Furst Equity Fund III,
L.P., a Delaware limited partnership.
"Holdings" shall have the meaning provided in the preamble of
this Agreement.
"Holdings Common Stock" shall mean the common stock of
Holdings.
"Holdings Guaranty" shall mean the guaranty issued pursuant
to Section 14 herein.
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"Indebtedness" shall mean, as to any Person, without
duplication, (i) all indebtedness (including principal, interest, fees and
charges) of such Person for borrowed money or for the deferred purchase price
of property or services, (ii) the maximum amount available to be drawn under
all letters of credit issued for the account of such Person and all unpaid
drawings in respect of such letters of credit, (iii) all Indebtedness of the
types described in clause (i), (ii), (iv), (v), (vi) or (vii) of this
definition secured by any Lien on any property owned by such Person, whether or
not such Indebtedness has been assumed by such Person (to the extent of the
value of the respective property), (iv) the aggregate amount required to be
capitalized under leases under which such Person is the lessee, (v) all
obligations of such person to pay a specified purchase price for goods or
services, whether or not delivered or accepted, i.e., take-or-pay and similar
obligations, (vi) all Contingent Obligations of such Person and (vii) all
obligations under any Interest Rate Protection Agreement and Other Hedging
Agreements or under any similar type of agreement.
"Initial Borrowing Date" shall mean the date occurring on or
after the Effective Date on which the initial Borrowing of Revolving Loans
hereunder occurs.
"Initial Public Offering" shall mean an underwritten public
offering of common stock of Holdings pursuant to a registration statement filed
with the Securities and Exchange Commission in accordance with the Securities
Act, which public equity offering results in gross proceeds to Holdings of not
less than $25,000,000; provided, however, that Holdings contributes to the
capital of the Borrower the net cash proceeds from such underwritten public
offering.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section
1.09.
"Interest Rate Protection Agreement" shall mean any interest
rate swap agreement, interest rate cap agreement, interest collar agreement,
interest rate hedging agreement, interest rate floor agreement or other similar
agreement or arrangement.
"Issuing Bank" shall mean BTCo and any Bank which at the
request of the Borrower and with the consent of the Agent agrees, in such
Bank's sole discretion, to become an Issuing Bank for the purpose of issuing
Letters of Credit pursuant to Section 2. The sole Issuing Bank on the Initial
Borrowing Date is BTCo.
"L/C Supportable Obligations" shall mean (i) obligations of
the Borrower or its Subsidiaries incurred in the ordinary course of business
with respect to insurance obligations and workers' compensation, surety bonds
and other similar statutory obligations and (ii) such other
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obligations of the Borrower or any of its Subsidiaries as are reasonably
acceptable to the respective Issuing Bank and otherwise permitted to exist
pursuant to the terms of this Agreement.
"Leaseholds" of any Person means all the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in
Section 3.01(b).
"Letter of Credit Outstandings" shall mean, at any time, the
sum of (i) the aggregate Stated Amount of all outstanding Letters of Credit and
(ii) the amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in
Section 2.02(a).
"Leverage Ratio" shall mean, at any date of determination,
the ratio of Consolidated Indebtedness on such date to Consolidated EBITDA for
the Test Period most recently ended (taken as one accounting period) and ending
on such date.
"Lien" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing or similar statement or notice filed under
the UCC or any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Loan" shall mean each Revolving Loan.
"Management Agreements" shall have the meaning provided in
Section 5.05.
"Margin Stock" shall have the meaning provided in Regulation
U.
"Material Adverse Effect" shall mean a material adverse
effect on the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of the Borrower, Holdings and its
Subsidiaries taken as a whole or the Borrower and its Subsidiary taken as a
whole.
"Monitoring Agreement" shall mean that certain Monitoring and
Oversight Agreement dated as of November ___, 1996, among Holdings, the
Borrower and Hicks, Muse & Co. Partners, L.P., a Texas limited partnership in
the form delivered to the Agent on or prior to the Initial Borrowing Date
without giving effect to any modification that adversely effects the interests
of the
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Banks (including, without limitation, with respect to costs and liabilities)
without the consent of Required Banks.
"Mortgage Policies" shall have the meaning provided in Section
5.11(b).
"Mortgaged Properties" shall have the meaning provided in
Section 5.11(a) and, after the execution and delivery of any Additional
Mortgage, shall include the respective Additional Mortgaged Property.
"Mortgages" shall have the meaning provided in Section
5.11(a) and, after the execution and delivery thereof, shall include each
Additional Mortgage.
"Net Sale Proceeds" shall mean for any sale of assets, the
gross cash proceeds (including any cash received by way of deferred payment
pursuant to a promissory note, receivable or otherwise, but only as and when
received) received from any sale of assets, net of reasonable transaction costs
(including, without limitation, any underwriting, brokerage or other customary
selling commissions and reasonable legal, advisory and other fees and expenses,
including title and recording expenses, associated therewith) and payments of
unassumed liabilities relating to the assets sold at the time of, or within 30
days after, the date of such sale, the amount of such gross cash proceeds
required to be used to repay any Indebtedness (other than Indebtedness of the
Banks pursuant to this Agreement) which is secured by the respective assets
which were sold, and the estimated marginal increase in income taxes which will
be payable by Holdings' consolidated group with respect to the fiscal year in
which the sale occurs as a result of such sale; but excluding any portion of
any such gross cash proceeds which Holdings determines in good faith should be
reserved for post-closing adjustments (to the extent Holdings delivers to the
Banks a certificate signed by its chief financial officer, controller or chief
accounting officer as to such determination), it being understood and agreed
that on the day that all such post-closing adjustments have been determined,
(which shall not be later than six months following the date of the respective
asset sale), the amount (if any) by which the reserved amount in respect of
such sale or disposition exceeds the actual post-closing adjustments payable by
Holdings or any of its Subsidiaries shall constitute Net Sale Proceeds on such
date received by Holdings and/or any of its Subsidiaries from such sale, lease,
transfer or other disposition.
"Non-Defaulting Bank" shall mean and include each Bank other
than a Defaulting Bank.
"Note" shall mean each Revolving Note.
"Notice of Borrowing" shall have the meaning provided in
Section 1.03(a).
"Notice of Conversion" shall have the meaning provided in
Section 1.06.
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"Notice Office" shall mean the office of the Agent located at
130 Liberty Street, 30th Floor, New York, New York 10006, Attention: Mary Kay
Coyle, or such other office as the Agent may hereafter designate in writing as
such to the other parties hereto.
"Obligations" shall mean all amounts owing to the Agent, the
Collateral Agent or any Bank pursuant to the terms of this Agreement or any
other Credit Document.
"Option Plan" shall have the meaning provided in Section
5.06(f).
"Options Repurchase" shall have the meaning provided in
Section 5.06(d).
"Options Repurchase Documents" shall mean the documents
entered into or delivered in connection with the Options Repurchase.
"Other Hedging Agreement" shall mean any foreign exchange
contracts, currency swap agreements, commodity agreements or other similar
agreements or arrangements designed to protect against the fluctuations in
values.
"Participant" shall have the meaning provided in Section
2.03(a).
"Payment Office" shall mean the office of the Agent located
at 130 Liberty Street, New York, New York 10006, or such other office as the
Agent may hereafter designate in writing as such to the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such Bank at such time and the denominator of which is the Total
Revolving Loan Commitment at such time, provided that if the Percentage of any
Bank is to be determined after the Total Revolving Loan Commitment has been
terminated, then the Percentages of the Banks shall be determined immediately
prior (and without giving effect) to such termination.
"Permitted Acquisition" shall have the meaning provided in
Section 9.02(xiii).
"Permitted Encumbrance" shall mean, with respect to any
Mortgaged Property, such exceptions to title as are set forth in the title
insurance policy or title commitment delivered with respect thereto, all of
which exceptions must be acceptable to the Agent in its reasonable discretion.
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"Permitted Investors" shall mean the collective reference to
Hicks, Muse, Tate & Furst Incorporated and its Affiliates.
"Permitted Liens" shall have the meaning provided in Section
9.01.
"Person" shall mean any individual, partnership, limited
liability company, joint venture, firm, corporation, association, trust or
other enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan,
as defined in Section 4001 of ERISA, which is maintained or contributed to by
(or to which there is an obligation to contribute of), the Borrower or a
Subsidiary of the Borrower or an ERISA Affiliate, and each such plan for the
five year period immediately following the latest date on which the Borrower, a
Subsidiary of the Borrower or an ERISA Affiliate maintained, contributed or had
an obligation to contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section
5.09.
"Pledge Agreement Collateral" shall mean all "Collateral" as
defined in the Pledge Agreement.
"Pledged Securities" shall mean "Pledged Securities" as
defined in the Pledge Agreement.
"Preferred Stock Redemption" shall have the meaning provided
in Section 5.06(e).
"Preferred Stock Redemption Documents" shall mean the
documents entered into or delivered in connection with the Preferred Stock
Redemption, including, without limitation, the certificate of designation.
"Prime Lending Rate" shall mean the rate which BTCo announces
from time to time as its prime lending rate, the Prime Lending Rate to change
when and as such prime lending rate changes. The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. BTCo may make commercial loans or other loans
at rates of interest at, above or below the Prime Lending Rate.
"Projections" shall have the meaning provided in Section
7.05(d).
"Quarterly Payment Date" shall mean the fifteenth Business
Day of each January, April, July and October occurring after the Initial
Borrowing Date.
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"Real Property" of any Person shall mean all the right, title
and interest of such Person in and to land, improvements and fixtures,
including Leaseholds.
"Recapitalization" shall mean, collectively, (i) the Equity
Issuance, (ii) the Stock Redemption, (iii) the Options Repurchase, (iv) the
Preferred Stock Redemption and (v) the issuance and sale of the Senior
Subordinated Notes.
"Recapitalization Documents" shall mean the Stock Purchase
Agreement, the Equity Issuance Documents, the Stock Redemption Documents, the
Options Repurchase Documents, the Preferred Stock Redemption Documents and the
Senior Subordinated Note Documents.
"Recovery Event" shall mean the receipt by Holdings or any of
its Subsidiaries of any cash insurance proceeds or condemnation award payable
(i) by reason of theft, loss, physical destruction or damage or any other
similar event with respect to any property or assets of the Borrower or any of
its Subsidiaries and (ii) under any policy of insurance required to be
maintained under Section 8.03.
"Redeemable Preferred Stock" shall have the meaning provided
in Section 5.06(e).
"Redeemed Options" shall mean the options held by the Selling
Optionholders to purchase Holdings Common Stock and redeemed pursuant to Stock
Purchase Agreement.
"Redeemed Shares" shall mean the shares of Holdings Common
Stock redeemed pursuant to Stock Purchase Agreement.
"Refinancing" shall mean the termination of the commitments
under the Existing Credit Agreement and the repayment of all loans and other
obligations outstanding thereunder.
"Register" shall have the meaning provided in Section 13.17.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation T" shall mean Regulation T of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
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"Regulation U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Reinvestment Assets" shall mean any assets to be employed in
the business of the Borrower and its Subsidiaries in compliance with this
Agreement.
"Reinvestment Election" shall have the meaning provided in
Section 4.02(d).
"Reinvestment Notice" shall mean a written notice signed by
an Authorized Officer of the Borrower stating that the Borrower, in good faith,
intends and expects to use all or a specified portion of Net Sale Proceeds of
asset sales to purchase, construct or otherwise acquire Reinvestment Assets.
"Reinvestment Prepayment Amount" shall mean, with respect to
any Reinvestment Election, the amount, if any, on the Reinvestment Prepayment
Date relating thereto by which (i) the Anticipated Reinvestment Amount in
respect of such Reinvestment Election exceeds (ii) the aggregate amount thereof
expended by the Borrower and its Subsidiaries to acquire Reinvestment Assets.
"Reinvestment Prepayment Date" shall mean, with respect to
any Reinvestment Election, the earliest of (i) the date, if any, upon which the
Agent, on behalf of the Required Banks, shall have delivered a written
termination notice to the Borrower, provided that such notice may only be given
while an Event of Default exists, (ii) the date occurring one year after such
Reinvestment Election and (iii) the date on which the Borrower shall have
determined not to, or shall have otherwise ceased to, proceed with the
purchase, construction or other acquisition of Reinvestment Assets with the
related Anticipated Reinvestment Amount.
"Release" shall have the meaning provided in the Environmental
Indemnity Agreement.
"Replaced Bank" shall have the meaning provided in Section
1.13.
"Replacement Bank" shall have the meaning provided in Section
1.13.
"Reportable Event" shall mean an event described in Section
4043(c) of ERISA with respect to a Plan other than those events as to which the
30-day notice period is waived under subsection .13, .14, .16, .18, .19 or .20
of PBGC Regulation Section 2615.
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"Required Appraisal" shall have the meaning provided in
Section 8.10(d).
"Required Banks" shall mean Non-Defaulting Banks, the sum of
whose outstanding Revolving Loans (or, if prior to the Initial Borrowing Date,
Revolving Loan Commitments) and Revolving Loan Commitments (or after the
termination thereof, outstanding Revolving Loans and Adjusted Percentage of
Letter of Credit Outstandings) represent an amount greater than 50% of the sum
of all outstanding Revolving Loans (or, if prior to the Initial Borrowing Date,
Revolving Loan Commitments) of Non-Defaulting Banks and the Adjusted Total
Revolving Loan Commitment (or after the termination thereof, the sum of the
then total outstanding Revolving Loans of Non-Defaulting Banks and the
aggregate Adjusted Percentages of all Non-Defaulting Banks of the total
outstanding Letter of Credit Outstandings at such time).
"Returns" shall have the meaning provided in Section 7.09.
"Revolving Loan" shall have the meaning provided in Section
1.01(c).
"Revolving Loan Commitment" shall mean, for each Bank, the
amount set forth opposite such Bank's name in Schedule I attached hereto
directly below the column entitled "Revolving Loan Commitment," as same may be
(x) reduced from time to time pursuant to Sections 3.02, 3.03, 4.02 and/or 10
or (y) adjusted from time to time as a result of assignments to or from such
Bank pursuant to Section 1.13 or 13.04(b).
"Revolving Loan Maturity Date" shall mean November 27, 2001.
"Revolving Note" shall have the meaning provided in Section
1.05(a).
"SBA Loan" shall mean the Indebtedness and all other
obligations evidenced by that certain Note, dated June 9, 1993, in the original
principal amount of $206,000, executed by Bishop Manufacturing Company of New
England, Inc. and payable to the Massachusetts Certified Development Corp., as
subsequently assigned to the U.S. Small Business Administration, and guaranteed
by Fojtasek Companies, Inc., FCI Holding Corp., Vinyl Building Specialties of
Connecticut, Inc. and Bishop Manufacturing Company, Inc.
"SEC" shall have the meaning provided in Section 8.01(g).
"Section 4.04(b)(iii) Certificate" shall have the meaning
provided in Section 4.04(b)(iii).
"Secured Creditors" shall have the meaning assigned that term
in the Security Documents.
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"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Security Agreement" shall have the meaning provided in
Section 5.10.
"Security Agreement Collateral" shall mean all "Collateral" as
defined in the Security Agreement.
"Security Document" shall mean the Pledge Agreement, Security
Agreement, the Mortgages and, after the execution and delivery thereof, each
Additional Mortgage and each Additional Security Document, in each case as the
same may be amended, restated, supplemented or otherwise modified from time to
time in accordance with the terms thereof and hereof.
"Selling Optionholders" shall mean the "Option Holders" under,
and as defined in, the Stock Purchase Agreement.
"Selling Shareholders" shall mean the "Stockholders" under,
and as defined in, the Stock Purchase Agreement.
"Senior Subordinated Note Documents" shall mean and include
each of the documents and other agreements entered into (including, without
limitation, the Senior Subordinated Note Indenture) relating to the issuance by
the Borrower of the Senior Subordinated Notes, as in effect on the Initial
Borrowing Date (to the extent thereof) and as the same may be entered into,
modified, supplemented or amended from time to time pursuant to the terms
hereof and thereof.
"Senior Subordinated Note Indenture" shall mean the Indenture
entered into by and among the Borrower, each of the Subsidiary Guarantors and
______, as trustee thereunder, as in effect on the Initial Borrowing Date and as
the same may be amended, restated, supplemented or otherwise modified from time
to time in accordance with the terms hereof and thereof.
"Senior Subordinated Notes" shall mean the Borrower's 12.50%
Senior Subordinated Notes due 2006, as in effect on the Initial Borrowing Date
and as the same may be amended, restated, supplemented or otherwise modified
from time to time pursuant to the terms hereof and thereof.
"Shareholders' Agreements" shall have the meaning provided in
Section 5.05.
"Standby Letter of Credit" shall have the meaning provided in
Section 2.01(a).
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"Stated Amount" of each Letter of Credit shall, at any time,
mean the maximum amount available to be drawn thereunder (in each case
determined without regard to whether any conditions to drawing could then be
met).
"Stock Purchase Agreement" shall mean the Stock Purchase
Agreement, dated as of November 7, 1996, by and among HMTF Acquisition Corp.,
Holdings and the holders of capital stock and options to purchase capital stock
named therein, as in effect on the Initial Borrowing Date.
"Stock Redemption" shall have the meaning provided in Section
5.06(c).
"Stock Redemption Documents" shall mean the documents entered
into or delivered in connection with the Stock Redemption.
"Subsidiary" shall mean, as to any Person, (i) any
corporation more than 50% of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of
such corporation (irrespective of whether or not at the time stock of any class
or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time owned by such Person and/or
one or more Subsidiaries of such Person and (ii) any partnership, limited
liability company, association, joint venture or other entity in which such
Person and/or one or more Subsidiaries of such Person has more than a 50%
equity interest at the time.
"Subsidiary Guarantor" shall mean each Subsidiary of the
Borrower that is or becomes a party to the Subsidiary Guaranty.
"Subsidiary Guaranty" shall have the meaning provided in
Section 5.11.
"Tax Sharing Agreement" shall have the meaning provided in
Section 5.05.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Test Period" shall mean for any determination the four
consecutive fiscal quarters then last ended (taken as one accounting period).
"Total Commitments" shall mean, at any time, the sum of the
Commitments of each of the Banks.
"Total Revolving Loan Commitment" shall mean, at any time,
the sum of the Revolving Loan Commitments of each of the Banks.
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"Total Unutilized Revolving Loan Commitment" shall mean, at
any time, an amount equal to the remainder of (i) the then Total Revolving Loan
Commitment, minus (ii) the sum of the aggregate principal amount of Revolving
Loans plus the then aggregate amount of Letter of Credit Outstandings.
"Trade Letter of Credit" shall have the meaning provided in
Section 2.01(a).
"Transaction" shall mean, collectively, the Recapitalization
and the Refinancing.
"Type" shall mean the type of Loan determined with regard to
the interest option applicable thereto, i.e., whether a Base Rate Loan or a
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to
time in effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan means the amount, if
any, by which the actuarial present value of the accumulated benefits under the
Plan as of the close of its most recent plan year, determined in accordance
with Statement of Financial Accounting Standards No. 87, based upon the
actuarial assumptions used by the Plan's actuary in the most recent annual
valuation of the Plan, exceeds the fair market value of the assets allocable
thereto, determined in accordance with Section 412 of the Code.
"United States" and "U.S." shall each mean the United States
of America.
"Unpaid Drawing" shall have the meaning provided for in
Section 2.04(a).
"Unutilized Revolving Loan Commitment" with respect to any
Bank, at any time, shall mean such Bank's Revolving Loan Commitment at such
time less the sum of (i) the aggregate outstanding principal amount of
Revolving Loans made by such Bank and (ii) such Bank's Adjusted Percentage of
the Letter of Credit Outstandings in respect of Letters of Credit issued under
this Agreement.
"Weighted Average Life to Maturity" shall mean, when applied
to any Indebtedness at any date, the number of years obtained by dividing (i)
the then outstanding principal amount of such Indebtedness into (ii) the total
of the product obtained by multiplying (A) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof by (B) the
number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i)
any corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person
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and/or one or more Wholly-Owned Subsidiaries of such Person and (ii) any
partnership, association, joint venture or other entity in which such Person
and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% equity
interest at such time.
SECTION 12. THE AGENT.
12.01 Appointment. The Banks hereby designate Bankers Trust
Company as Agent (for purposes of this Section 12, the term "Agent" shall
include BTCo in its capacity as Collateral Agent pursuant to the Security
Documents) to act as specified herein and in the other Credit Documents. Each
Bank hereby irrevocably authorizes, and each holder of any Revolving Note by
the acceptance of such Revolving Note shall be deemed irrevocably to authorize,
the Agent to take such action on its behalf under the provisions of this
Agreement, the other Credit Documents and any other instruments and agreements
referred to herein or therein and to exercise such powers and to perform such
duties hereunder and thereunder as are specifically delegated to or required of
the Agent by the terms hereof and thereof and such other powers as are
reasonably incidental thereto. The Agent may perform any of its duties
hereunder by or through its respective officers, directors, agents, employees
or affiliates.
12.02 Nature of Duties. The Agent shall not have any duties
or responsibilities except those expressly set forth in this Agreement and the
other Credit Documents. Neither the Agent nor any of its respective officers,
directors, agents, employees or affiliates shall be liable for any action taken
or omitted by it or them hereunder or under any other Credit Document or in
connection herewith or therewith, unless caused by its or their gross
negligence or willful misconduct. The duties of the Agent shall be mechanical
and administrative in nature; the Agent shall not have by reason of this
Agreement or any other Credit Document a fiduciary relationship in respect of
any Bank or the holder of any Revolving Note; and nothing in this Agreement or
any other Credit Document, expressed or implied, is intended to or shall be so
construed as to impose upon the Agent any obligations in respect of this
Agreement or any other Credit Document except as expressly set forth herein or
therein.
12.03 Lack of Reliance on the Agent. Independently and
without reliance upon the Agent, each Bank and the holder of each Revolving
Note, to the extent it deems appropriate, has made and shall continue to make
(i) its own independent investigation of the financial condition and affairs of
Holdings and its Subsidiaries in connection with the making and the continuance
of the Revolving Loans and the taking or not taking of any action in connection
herewith and (ii) its own appraisal of the creditworthiness of Holdings and its
Subsidiaries and, except as expressly provided in this Agreement, the Agent
shall not have any duty or responsibility, either initially or on a continuing
basis, to provide any Bank or the holder of any Revolving Note with any credit
or other information with respect thereto, whether coming into its possession
before the making of the Revolving Loans or at any time or times thereafter.
The Agent shall not be responsible to any Bank or the holder of any Revolving
Note for any recitals, statements, information, representations or
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warranties herein or in any document, certificate or other writing delivered in
connection herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of this
Agreement or any other Credit Document or the financial condition of Holdings
and its Subsidiaries or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any other Credit Document, or the financial condition of Holdings
and its Subsidiaries or the existence or possible existence of any Default or
Event of Default.
12.04 Certain Rights of the Agent. If the Agent shall request
instructions from the Required Banks with respect to any act or action
(including failure to act) in connection with this Agreement or any other
Credit Document, the Agent shall be entitled to refrain from such act or taking
such action unless and until the Agent shall have received instructions from
the Required Banks; and the Agent shall not incur liability to any Person by
reason of so refraining. Without limiting the foregoing, no Bank or the holder
of any Revolving Note shall have any right of action whatsoever against the
Agent as a result of the Agent acting or refraining from acting hereunder or
under any other Credit Document in accordance with the instructions of the
Required Banks.
12.05 Reliance. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any Revolving Note, writing,
resolution, notice, statement, certificate, telex, teletype or telecopier
message, cablegram, radiogram, order or other document or telephone message
signed, sent or made by any Person that the Agent believed to be the proper
Person, and, with respect to all legal matters pertaining to this Agreement and
any other Credit Document and its duties hereunder and thereunder, upon advice
of counsel selected by the Agent (which may be counsel for the Credit Parties).
12.06 Indemnification. To the extent the Agent is not
reimbursed and indemnified by the Borrower, the Banks will reimburse and
indemnify the Agent, in proportion to their respective "percentages" as used in
determining the Required Banks, for and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, judgments, costs,
expenses or disbursements of whatsoever kind or nature which may be imposed on,
asserted against or incurred by the Agent in performing its respective duties
hereunder or under any other Credit Document, in any way relating to or arising
out of this Agreement or any other Credit Document, provided that no Bank shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct.
12.07 The Agent in its Individual Capacity. With respect to
its obligation to make Revolving Loans under this Agreement, the Agent shall
have the rights and powers specified herein for a "Bank" and may exercise the
same rights and powers as though it were not performing the duties specified
herein; and the term "Banks," "Required Banks," "holders of Revolving Revolving
Notes" or any similar terms shall, unless the context clearly otherwise
indicates, include the Agent
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in its individual capacity. The Agent may accept deposits from, lend money to,
and generally engage in any kind of banking, trust or other business with any
Credit Party or any Affiliate of any Credit Party as if they were not
performing the duties specified herein, and may accept fees and other
consideration from the Borrower or any other Credit Party for services in
connection with this Agreement and otherwise without having to account for the
same to the Banks.
12.08 Holders. The Agent may deem and treat the payee of any
Revolving Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Agent. Any request, authority or consent
of any Person who, at the time of making such request or giving such authority
or consent, is the holder of any Revolving Note shall be conclusive and binding
on any subsequent holder, transferee, assignee or indorsee, as the case may be,
of such Revolving Note or of any Revolving Note or Revolving Revolving Notes
issued in exchange therefor.
12.09 Resignation by the Agent. (a) The Agent may resign from
the performance of all its functions and duties hereunder and/or under the
other Credit Documents at any time by giving 15 Business Days' prior written
notice to the Borrower and the Banks. Such resignation shall take effect upon
the appointment of a successor Agent pursuant to clauses (b) and (c) below or
as otherwise provided below.
(b) Upon any such notice of resignation, the Banks shall
appoint a successor Agent hereunder or thereunder who shall be a commercial
bank or trust company reasonably accept able to the Borrower.
(c) If a successor Agent shall not have been so appointed
within such 15 Business Day period, the Agent, with the consent of the
Borrower, shall then appoint a commercial bank or trust company with capital
and surplus of not less than $500,000,000 as successor Agent who shall serve as
Agent hereunder or thereunder until such time, if any, as the Banks appoint a
successor Agent as provided above.
(d) If no successor Agent has been appointed pursuant to
clause (b) or (c) above by the 20th Business Day after the date such notice of
resignation was given by the Agent, the Agent's resignation shall become
effective and the Required Banks shall thereafter perform all the duties of the
Agent hereunder and/or under any other Credit Document until such time, if any,
as the Banks appoint a successor Agent as provided above.
SECTION 13. MISCELLANEOUS.
13.01 Payment of Expenses, etc. (a) The Borrower shall:
(i) whether or not the transactions herein contemplated are consummated, pay
all reasonable out-of-pocket costs and expenses of the Agent (including,
without limitation, the reasonable fees and disbursements of
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Winston & Strawn and local counsel) in connection with the preparation,
execution and delivery of this Agreement and the other Credit Documents and the
documents and instruments referred to here in and therein and any amendment,
waiver or consent relating hereto or thereto, of the Agent in connection with
its syndication efforts with respect to this Agreement and of the Agent and,
following and during the continuation of an Event of Default, each of the Banks
in connection with the enforcement of this Agreement and the other Credit
Documents and the documents and instruments referred to herein and therein
(including, without limitation, the reasonable fees and disbursements of
counsel for the Agent and, following and during the continuation of an Event of
Default, for each of the Banks); (ii) pay and hold each of the Banks harmless
from and against any and all present and future stamp, excise and other similar
taxes with respect to the foregoing matters and save each of the Banks harmless
from and against any and all liabilities with respect to or resulting from any
delay or omission (other than to the extent attributable to such Bank) to pay
such taxes; and (iii) indemnify the Agent and each Bank, and each of their
respective officers, directors, employees, representatives and agents from and
hold each of them harmless against any and all liabilities, obligations
(including removal or remedial actions), losses, damages, penalties, claims,
actions, judgments, suits, costs, expenses and disbursements (including
reasonable attorneys' and consultants' fees and disbursements) incurred by,
imposed on or assessed against any of them as a result of, or arising out of,
or in any way related to, or by reason of, (A) any investigation, litigation or
other proceeding (whether or not the Agent or any Bank is a party thereto)
related to the entering into and/or performance of this Agreement or any other
Credit Document or the use of any Letter of Credit or the proceeds of any
Revolving Loans hereunder or the consummation of any transactions contemplated
herein (including, without limitation, the Transaction) or in any other Credit
Document or the exercise of any of their rights or remedies provided herein or
in the other Credit Documents, or (B) the non-compliance of any Real Property
with foreign, federal, state and local laws, regulations, and ordinances
(including applicable permits thereunder) applicable to any Real Property
(excluding Environmental Laws which are governed by the Environmental Indemnity
Agreement) owned or at any time operated by Holdings or any of its
Subsidiaries, including, in each case, without limitation, the reasonable fees
and disbursements of counsel and other consultants incurred in connection with
any such investigation, litigation or other proceeding (but excluding any
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified). To the extent that the undertaking to indemnify, pay or hold
harmless the Agent or any Bank set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the Borrower
shall make the maximum contribution to the payment and satisfaction of each of
the indemnified liabilities which is permissible under applicable law.
(b) Notwithstanding anything to the contrary contained in
this Agreement, the indemnification provided for in this Section 13.01 shall
not apply to Environmental Claims, Hazardous Materials or Releases, all of
which shall be governed exclusively by the Environmental Indemnity Agreement.
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13.02 Right of Setoff; Collateral Matters. In addition to any
rights now or hereafter granted under applicable law or otherwise, and not by
way of limitation of any such rights, upon the occurrence and during the
continuance of an Event of Default, each Bank is hereby authorized at any time
or from time to time, without presentment, demand, protest or other notice of
any kind to Holdings or the Borrower or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and apply any and
all deposits (general or special) and any other Indebtedness at any time held
or owing by such Bank (including, without limitation, by branches and agencies
of such Bank wherever located) to or for the credit or the account of Holdings,
the Borrower or any other Credit Party against and on account of the
Obligations and liabilities of Holdings, the Borrower or such Credit Party to
such Bank under this Agreement or under any of the other Credit Documents,
including, without limitation, all interests in Obligations purchased by such
Bank pursuant to Section 13.06(b), and all other claims of any nature or
description arising out of or connected with this Agreement or any other Credit
Document, irrespective of whether or not such Bank shall have made any demand
hereunder and although said Obligations, liabilities or claims, or any of them,
shall be contingent or unmatured.
13.03 Notices. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to Holdings, at
Holdings' address specified opposite its signature below; if to FCI Holding, at
FCI Holding's address specified opposite its signature below; if to the
Borrower, at the Borrower's address specified opposite its signature below; if
to any Bank, at its address specified opposite its name on Schedule II attached
hereto; and if to the Agent, at its Notice Office; or, as to any Credit Party
or the Agent, at such other address as shall be designated by such party in a
written notice to the other parties hereto and, as to each Bank, at such other
address as shall be designated by such Bank in a written notice to the Borrower
and the Agent. All such notices and communications shall, when mailed,
telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be
effective when deposited in the mails, delivered to the telegraph company,
cable company or overnight courier, as the case may be, or sent by telex or
telecopier, except that notices and communications to the Agent and the
Borrower shall not be effective until received by the Agent or the Borrower, as
the case may be.
13.04 Benefit of Agreement. (a) This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided, however, that the
Borrower may not assign or transfer any of its rights, obligations or interest
hereunder without the prior written consent of the Banks; and provided further,
that, although any Bank may transfer, assign or grant participations in its
rights hereunder, such Bank shall remain a "Bank" for all purposes hereunder
(and may not transfer or assign all or any portion of its Commitments hereunder
except as provided in Section 13.04(b)) and the transferee, assignee or
participant, as the case may be, shall not constitute a "Bank" hereunder; and
provided further, that no Bank shall transfer or grant any participation under
which the participant shall have rights to
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approve any amendment to or waiver of this Agreement or any other Credit
Document except to the extent such amendment or waiver would (i) extend the
final scheduled maturity of any Revolving Loan, Revolving Note or Letter of
Credit (unless such Letter of Credit is not extended beyond the Revolving Loan
Maturity Date) in which such participant is participating, or reduce the rate
or extend the time of payment of interest or Fees thereon (except in connection
with a waiver of applicability of any post-default increase in interest rates)
or reduce the principal amount thereof, or increase the amount of the
participant's participation over the amount thereof then in effect (it being
understood that waivers or modifications of conditions precedent, covenants,
Defaults or Events of Default or of a mandatory reduction in the Total
Revolving Loan Commitment shall not constitute a change in the terms of such
participation, and that an increase in any Revolving Loan Commitment or
Revolving Loan shall be permitted without the consent of any participant if the
participant's participation therein is not increased as a result thereof), (ii)
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement or (iii) release all or substantially all of
the Collateral under all of the Security Documents (except as expressly
provided in the Credit Documents) supporting the Revolving Loans hereunder in
which such participant is participating. In the case of any such
participation, the participant shall not have any rights under this Agreement
or any of the other Credit Documents (the participant's rights against such
Bank in respect of such participation to be those set forth in the agreement
executed by such Bank in favor of the participant relating thereto) and all
amounts payable by the Borrower hereunder shall be determined as if such Bank
had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank
together with one or more other Banks) may (i) assign all or a portion of its
Revolving Loan Commitment (and related outstanding Obligations hereunder) to
its parent company and/or any affiliate of such Bank which is at least 50%
owned by such Bank or its parent company or to one or more investment funds
under common management with such Bank or to one or more Banks or (ii) assign
all, or if less than all, a portion equal to at least $5,000,000 in the
aggregate for the assigning Bank or assigning Banks, of such Revolving Loan
Commitments (and related outstanding Obligations hereunder) hereunder to one or
more Eligible Transferees, each of which assignees shall become a party to this
Agreement as a Bank by execution of an Assignment and Assumption Agreement;
provided, however, that, (A) at such time Schedule I shall be deemed modified
to reflect the Revolving Loan Commitment of such new Bank and of the existing
Banks, (B) new Revolving Revolving Notes will be issued, at the Borrower's
expense, to such new Bank and to the assigning Bank upon the request of such
new Bank or assigning Bank, such new Revolving Revolving Notes to be in
conformity with the requirements of Section 1.05 (with appropriate
modifications) to the extent needed to reflect the revised Commitments, (C)
the consent of BTCo shall be required in connection with any such assignment
(which consent shall not be unreasonably withheld), (D) so long as no Default
or Event of Default has occurred and is continuing, the consent of the Borrower
shall be required in connection with such assignment (which consent shall not
be unreasonably withheld or delayed), and (E) the Agent shall receive at the
time of each such assignment, from the assigning or assignee Bank, the payment
of a non-refundable assignment fee of $3,500; and provided further, that such
transfer or assignment
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will not be effective until recorded by the Agent on the Register pursuant to
Section 13.17. To the extent of any assignment pursuant to this Section
13.04(b), the assigning Bank shall be relieved of its obligations hereunder
with respect to its assigned Revolving Loan Commitment. At the time of each
assignment pursuant to this Section 13.04(b) to a Person which is not already a
Bank hereunder and which is not a United States person (as such term is defined
in Section 7701(a)(30) of the Code) for Federal income tax purposes, the
respective assignee Bank shall, to the extent legally entitled to do so,
provide to the Borrower in the case of a Bank described in clause (ii) or (iv)
of Section 4.04(b), the forms described in such clause (ii) or (iv), as the
case may be. To the extent that an assignment of all or any portion of a Bank's
Revolving Loan Commitment and related outstanding Obligations pursuant to
Section 1.13 or this Section 13.04(b) would, at the time of such assignment,
result in increased costs under Section 1.10, 1.11 or 4.04 from those being
charged by the respective assigning Bank prior to such assignment, then the
Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
assignment).
(c) Nothing in this Agreement shall prevent or prohibit any
Bank from pledging its Revolving Loans and Revolving Revolving Notes hereunder
to a Federal Reserve Bank in support of borrowings made by such Bank from such
Federal Reserve Bank.
13.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Agent or any Bank or any holder of any Revolving Note in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Borrower or any other Credit
Party and the Agent or any Bank or the holder of any Revolving Note shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Credit Document preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder or thereunder. The rights, powers and remedies herein or
in any other Credit Document expressly provided are cumulative and not
exclusive of any rights, powers or remedies which the Agent or any Bank or the
holder of any Revolving Note would otherwise have. No notice to or demand on
any Credit Party in any case shall entitle any Credit Party to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Agent or any Bank or the holder of any Revolving
Note to any other or further action in any circumstances without notice or
demand.
13.06 Payments Pro Rata. (a) Except as otherwise provided in
this Agreement, the Agent agrees that promptly after its receipt of each
payment from or on behalf of the Borrower in respect of any Obligations
hereunder, it shall distribute such payment to the Banks (other than any Bank
that has consented in writing to waive its pro rata share of any such payment)
pro rata based upon their respective shares, if any, of the Obligations with
respect to which such payment was received.
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(b) Each of the Banks agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security,
by the exercise of the right of setoff or banker's lien, by counterclaim or
cross action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Revolving Loans, Unpaid Drawings, Commitment Commission or Letter of
Credit Fees, of a sum which with respect to the related sum or sums received by
other Banks is in a greater proportion than the total of such Obligation then
owed and due to such Bank bears to the total of such Obligation then owed and
due to all of the Banks immediately prior to such receipt, then such Bank
receiving such excess payment shall purchase for cash without recourse or
warranty from the other Banks an interest in the Obligations of the respective
Credit Party to such Banks in such amount as shall result in a proportional
participation by all the Banks in such amount; provided, however, that if all
or any portion of such excess amount is thereafter recovered from such Bank,
such purchase shall be rescinded and the purchase price restored to the extent
of such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained
herein, the provisions of the preceding Sections 13.06(a) and (b) shall be
subject to the express provisions of this Agreement which require, or permit,
differing payments to be made to Non-Defaulting Banks as opposed to Defaulting
Banks.
13.07 Calculations; Computations. (a) The financial
statements to be furnished to the Banks pursuant hereto shall be made and
prepared in accordance with generally accepted accounting principles in the
United States consistently applied throughout the periods involved (except as
set forth in the Revolving Revolving Notes thereto or as otherwise disclosed in
writing by the Borrower to the Banks); provided, however, that, except as
otherwise specifically provided herein, all computations determining compliance
with Sections 9.07 through 9.10, inclusive, shall utilize accounting principles
and policies in conformity with those used to prepare the historical financial
statements delivered to the Banks pursuant to Section 7.05(a) (with the
foregoing generally accepted accounting principles, subject to the preceding
proviso, referred to herein as "GAAP").
(b) All computations of interest and Fees hereunder shall be
made on the basis of a year of 360 days for the actual number of days
(including the first day but excluding the last day) occurring in the period
for which such interest or Fees are payable.
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS
OTHERWISE PROVIDED IN CERTAIN OF THE MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH
AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
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OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF HOLDINGS AND THE BORROWER
HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY
AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH OF HOLDINGS
AND THE BORROWER HERE BY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS CT
CORPORATION SYSTEM, WITH OFFICES ON THE DATE HEREOF AT 1633 BROADWAY, NEW YORK,
NEW YORK 10019 AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND
ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF
ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED
IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE
AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH SUCH CREDIT PARTY
AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK CITY ON THE
TERMS AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE AGENT UNDER
THIS AGREEMENT. EACH OF HOLDINGS AND THE BORROWER FURTHER IRREVOCABLY CONSENTS
TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO ANY CREDIT PARTY AT ITS ADDRESS SET FORTH
OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT UNDER THIS
AGREEMENT, ANY BANK OR THE HOLDER OF ANY REVOLVING NOTE TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER JURISDICTION.
(b) EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY
WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED
TO IN CLAUSE (A) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO
PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN
ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
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AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY.
13.09 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A set of counterparts executed by all the parties hereto shall be
lodged with the Borrower and the Agent.
13.10 Effectiveness. This Agreement shall become effective on
the date (the "Effective Date") on which Holdings, the Borrower and each of the
Banks shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered the same to the Agent at its Notice
Office or, in the case of the Banks, shall have given to the Agent telephonic
(confirmed in writing), written or telex notice (actually received) at such
office that the same has been signed and mailed to it. The Agent will give the
Borrower and each Bank prompt written notice of the occurrence of the Effective
Date.
13.11 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only
and shall not in any way affect the meaning or construction of any provision of
this Agreement.
13.12 Amendment or Waiver; etc. (a) Neither this Agreement
nor any other Credit Document nor any terms hereof or thereof may be changed,
waived, discharged or terminated unless such change, waiver, discharge or
termination is in writing signed by the respective Credit Parties party thereto
and the Required Banks; provided, however, that no such change, waiver,
discharge or termination shall, without the consent of each Bank (other than a
Defaulting Bank), (i) extend the final scheduled maturity of any Revolving Loan
or any Revolving Note, or extend the stated maturity of any Letter of Credit
beyond the Revolving Loan Maturity Date, or reduce the rate or extend the time
of payment of interest or Fees thereon (except in connection with a waiver of
applicability of any post-default increase in interest rates), or reduce the
principal amount thereof (except to the extent repaid in cash), (ii) release
all or substantially all of the Collateral (except as expressly provided in the
Credit Documents) under all the Security Documents, (iii) amend, modify or
waive any provision of this Section 13.12, (iv) reduce the percentage specified
in the definition of Required Banks (it being understood that, with the consent
of the Required Banks, additional extensions of credit pursuant to this
Agreement may be included in the determination of the Required Banks on
substantially the same basis as the Revolving Loan Commitments (and related
extensions of credit) are included on the Effective Date) or (v) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement; and provided further, that no such change, waiver,
discharge or termination shall (A) increase the Revolving Loan Commitments of
any Bank over the amount thereof then in effect without the consent of such
Bank (it being understood that waivers or modifications of conditions
precedent, covenants, Defaults or Events of Default or of a
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mandatory reduction in the Total Revolving Loan Commitment shall not constitute
an increase of the Revolving Loan Commitment of any Bank, and that an increase
in the available portion of any Revolving Loan Commitment of any Bank shall not
constitute an increase in the Revolving Loan Commitment of such Bank), (B)
without the consent of BTCo and any other Issuing Bank, amend, modify or waive
any provision of Section 2 or alter its rights or obligations with respect to
Letters of Credit issued by it, (C) without the consent the Agent, amend,
modify or waive any provision of Section 12 as same applies to such Agent or
any other provision as same relates to the rights or obligations of the Agent,
or (D) without the consent of the Collateral Agent, amend, modify or waive any
provision relating to the rights or obligations of the Collateral Agent.
(b) If, in connection with any proposed change, waiver,
discharge or termination with respect to any of the provisions of this
Agreement as contemplated by clauses (i) through (v), inclusive, of the first
proviso to Section 13.12(a), the consent of the Required Banks is obtained but
the consent of one or more of such other Banks whose consent is required is not
obtained, then the Borrower shall have the right, so long as all non-consenting
Banks whose individual consent is required are treated as described in either
clause (i) or (ii) below, to either (i) replace each such nonconsenting Bank or
Banks with one or more Replacement Banks pursuant to Section 1.13 so long as at
the time of such replacement, each such Replacement Bank consents to the
proposed change, waiver, discharge or termination or (ii) terminate such
non-consenting Bank's Revolving Loan Commitment and repay in full its
outstanding Revolving Loans, in accordance with Sections 3.02(b) and/or
4.01(v); provided, however, that unless the Revolving Loan Commitment
terminated and Revolving Loans repaid pursuant to preceding clause (ii) are
immediately replaced in full at such time through the addition of new Banks or
the increase of the Revolving Loan Commitments and/or outstanding Revolving
Loans of existing Banks (who in each case must specifically consent thereto),
then in the case of any action pursuant to preceding clause (ii) the Required
Banks (determined before giving effect to the proposed action) shall
specifically consent thereto; provided, further, that in any event the Borrower
shall not have the right to replace a Bank, terminate its Revolving Loan
Commitment or repay its Revolving Loans solely as a result of the exercise of
such Bank's rights (and the withholding of any required consent by such Bank)
pursuant to the second proviso to Section 13.12(a).
13.13 Survival. All indemnities set forth herein including,
without limitation, in Sections 1.10, 1.11, 2.05, 4.04, 13.01 and 13.06 shall,
subject to Section 13.15 (to the extent applicable), survive the execution,
delivery and termination of this Agreement and the Revolving Revolving Notes,
and any Letters of Credit, and the making and repayment of the Revolving Loans
(it being understood and agreed that all such indemnities shall also survive as
to any Bank that has assigned all of its obligations hereunder pursuant to
Section 13.04(b) with respect to the period of time in which such Bank was a
"Bank" hereunder).
13.14 Domicile of Loans. Each Bank may transfer and carry its
Revolving Loans at, to or for the account of any office, Subsidiary or
Affiliate of such Bank. Notwithstanding
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anything to the contrary contained herein, to the extent that a transfer of
Revolving Loans pursuant to this Section 13.14 would, at the time of such
transfer, result in increased costs under Section 1.10, 1.11, 2.05 or 4.04 from
those being charged by the respective Bank prior to such transfer, then the
Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obli gated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).
13.15 Limitation on Additional Amounts; etc. Notwithstanding
anything to the contrary contained in Section 1.10, 1.11, 2.05 or 4.04 of this
Agreement, unless a Bank gives notice to the Borrower that it is obligated to
pay an amount under the respective such Section within one year after the later
of (i) the date the Bank incurs the respective increased costs, Taxes, loss,
expense or liability, reduction in amounts received or receivable or reduction
in return on capital or (ii) the date such Bank has actual knowledge of its
incurrence of the respective increased costs, Taxes, loss, expense or
liability, reductions in amounts received or receivable or reduction in return
on capital, then such Bank shall only be entitled to be compensated for such
amount by the Borrower pursuant to said Section 1.10, 1.11, 2.05 or 4.04, as
the case may be, to the extent the costs, Taxes, loss, expense or liability,
reduction in amounts received or receivable or reduction in return on capital
are incurred or suffered on or after the date which occurs one year prior to
such Bank giving notice to the Borrower that it is obligated to pay the
respective amounts pursuant to said Section 1.10, 1.11, 2.05 or 4.04, as the
case may be. This Section 13.15 shall have no applicability to any Section of
this Agreement other than said Sections 1.10, 1.11, 2.05 and 4.04.
13.16 Confidentiality. (a) Subject to the provisions of
clause (b) of this Section 13.16, each Bank agrees that it will use its best
efforts not to disclose without the prior consent of the Borrower (other than
to its employees, auditors, advisors or counsel or to another Bank if the Bank
or such Bank's holding or parent company in its sole discretion determines that
any such party should have access to such information, provided such Persons
shall be subject to the provisions of this Section 13.16 to the same extent as
such Bank) any information with respect to Holdings or any of its Subsidiaries
which is now or in the future furnished pursuant to this Agreement or any other
Credit Document and which is designated by any Credit Party to the Banks in
writing as confidential, provided that any Bank may disclose any such
information (A) as has become generally available to the public, (B) as may be
required or appropriate in any report, statement or testimony submitted to any
municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such Bank or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or similar organizations (whether in the United
States or elsewhere) or their successors, (C) as may be required or appropriate
in respect to any summons or subpoena or in connection with any litigation, (D)
in order to comply with any law, order, regulation or ruling applicable to such
Bank, (E) to the Agent or the Collateral Agent and (F) to any prospective or
actual transferee or participant in connection with any contemplated transfer
or participation of any of the Revolving Revolving Notes or Revolving Loan
Commitments or any interest therein by such Bank, provided, that such
prospective transferee
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executes an agreement with such Bank containing provisions substantially the
same as to those contained in this Section.
(b) Each of Holdings, FCI Holding and the Borrower hereby
acknowledges and agrees that each Bank may share with any of its affiliates any
information related to Holdings or any of its Subsidiaries (including, without
limitation, any nonpublic customer information regarding the creditworthiness
of Holdings and its Subsidiaries, provided such Persons shall be subject to the
provisions of this Section 13.16 to the same extent as such Bank).
13.17 Registry. The Borrower hereby designates the Agent to
serve as the Borrower's agent, solely for purposes of this Section 13.17, to
maintain a register (the "Register") on which it will record the Revolving Loan
Commitments from time to time of each of the Banks, the Revolving Loans made by
each of the Banks and each repayment in respect of the principal amount of the
Revolving Loans of each Bank. Failure to make any such recordation, or any
error in such recordation shall not affect the Borrower's obligations in
respect of such Revolving Loans. With respect to any Bank, the transfer of the
Revolving Loan Commitment of such Bank and the rights to the principal of, and
interest on, any Revolving Loan made pursuant to such Revolving Loan Commitment
shall not be effective until such transfer is recorded on the Register
maintained by the Agent with respect to ownership of such Revolving Loan
Commitment and Revolving Loans and prior to such recordation all amounts owing
to the transferor with respect to such Revolving Loan Commitment and Revolving
Loans shall remain owing to the transferor. The registration of assignment or
transfer of all or part of any Revolving Loan Commitment and Revolving Loans
shall be recorded by the Agent on the Register only upon the acceptance by the
Agent of a properly executed and delivered Assignment and Assumption Agreement
pursuant to Section 13.04(b). Coincident with the delivery of such an
Assignment and Assumption Agreement to the Agent for acceptance and
registration of assignment or transfer of all or part of a Revolving Loan, or
as soon thereafter as practicable, the assigning or transferor Bank shall
surrender the Revolving Note evidencing such Revolving Loan, and thereupon one
or more new Revolving Revolving Notes in the same aggregate principal amount
shall be issued to the assigning or transferor Bank and/or the new Bank. The
Borrower agrees to indemnify the Agent from and against any and all losses,
claims, damages and liabilities of whatsoever nature which may be imposed on,
asserted against or incurred by the Agent in performing its duties under this
Section 13.17.
SECTION 14. HOLDINGS GUARANTY.
14.01 The Holdings Guaranty. In order to induce the Banks to
enter into this Agreement and to extend credit hereunder and in recognition of
the direct benefits to be received by Holdings from the proceeds of the
Revolving Loans and the issuance of the Letters of Credit and to induce the
Banks or any of their respective Affiliates to enter into Interest Rate
Protection and Other Hedging Agreements, Holdings hereby agrees with the Banks
as follows: Holdings hereby unconditionally and irrevocably guarantees as
primary obligor and not merely as surety the full and prompt
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payment when due, whether upon maturity, by acceleration or otherwise, of any
and all of the Guaranteed Obligations of the Borrower to the Secured Creditors.
If any or all of the Guaranteed Obligations of the Borrower to the Secured
Creditors becomes due and payable hereunder, Holdings unconditionally promises
to pay such indebtedness to the Secured Creditors, on order, or demand,
together with any and all reasonable expenses which may be incurred by the
Agent or the Secured Creditors in collecting any of the Guaranteed Obligations.
14.02 Bankruptcy. Additionally, Holdings unconditionally and
irrevocably guarantees the payment of any and all of the Guaranteed Obligations
of the Borrower to the Secured Creditors whether or not then due or payable by
the Borrower upon the occurrence in respect of the Borrower of any of the
events specified in Section 10.05, and unconditionally and irrevocably promises
to pay such Guaranteed Obligations to the Secured Creditors, on order, or
demand, in lawful money of the United States of America.
14.03 Nature of Liability. The liability of Holdings
hereunder is exclusive and independent of any security for or other guaranty of
the Guaranteed Obligations of the Borrower whether executed by Holdings, any
other Guarantor or by any other party, and the liability of Holdings hereunder
shall not be affected or impaired by (i) any direction as to application of
payment by the Borrower or by any other party, or (ii) any other continuing or
other guaranty, under taking or maximum liability of a guarantor or of any
other party as to the Guaranteed Obligations of the Borrower, or (iii) any
payment on or in reduction of any such other guaranty or undertaking, or (iv)
any dissolution, termination or increase, decrease or change in personnel by
the Borrower, or (v) any payment made to the Agent or the Secured Creditors on
the indebtedness which the Agent or such Secured Creditors repay the Borrower
pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and Holdings waives any right to
the deferral or modification of its obligations hereunder by reason of any such
proceeding.
14.04 Independent Obligation. The obligations of Holdings
hereunder are independent of the obligations of any other guarantor or the
Borrower, and a separate action or actions may be brought and prosecuted
against Holdings whether or not action is brought against any other guarantor
or the Borrower and whether or not any other guarantor or the Borrower be
joined in any such action or actions. Holdings waives, to the fullest extent
permitted by law, the benefit of any statute of limitations affecting its
liability hereunder or the enforcement thereof. Any payment by the Borrower or
other circumstance which operates to toll any statute of limitations as to the
Borrower shall operate to toll the statute of limitations as to Holdings.
14.05 Authorization. Holdings authorizes the Agent and the
Secured Creditors without notice or demand (except as shall be required by
applicable statute and cannot be waived), and without affecting or impairing
its liability hereunder, from time to time to:
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(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew, increase, accelerate
or alter, any of the Guaranteed Obligations (including any increase or
decrease in the rate of interest thereon), any security therefor, or
any liability incurred directly or indirectly in respect thereof, and
the Holdings Guaranty herein made shall apply to the Guaranteed
Obligations as so changed, extended, renewed or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any
of those hereunder) incurred directly or indirectly in respect
thereof or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against
the Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers,
guarantors, the Borrower or other obligors;
(e) settle or compromise any of the Guaranteed Obligations,
any security therefor or any liability (including any of those
hereunder) incurred directly or indirectly in respect thereof or
hereof, and may subordinate the payment of all or any part thereof to
the payment of any liability (whether due or not) of the Borrower to
its creditors other than the Banks;
(f) apply any sums by whomsoever paid or howsoever realized
to any liability or liabilities of the Borrower to the Secured
Creditors regardless of what liability or liabilities of Holdings or
the Borrower remain unpaid;
(g) consent to or waive any breach of, or any act, omission
or default under, this Agreement or any of the instruments or
agreements referred to herein, or otherwise amend, modify or
supplement this Agreement or any of such other instruments or
agreements; and/or
(h) take any other action which would, under otherwise
applicable principles of common law, give rise to a legal or equitable
discharge of Holdings from its liabilities under this Section 14.
14.06 Reliance. It is not necessary for the Agent or the
Secured Creditors to inquire into the capacity or powers of the Borrower or its
Subsidiaries or the officers, directors, partners or agents acting or
purporting to act on its behalf, and any Guaranteed Obligations made or created
in reliance upon the professed exercise of such powers shall be guaranteed
hereunder.
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14.07 Subordination. Any of the indebtedness of the Borrower
relating to the Guaranteed Obligations now or hereafter owing to Holdings is
hereby subordinated to the Guaranteed Obligations of the Borrower owing to the
Agent and the Secured Creditors; and if the Agent so requests at a time when an
Event of Default exists, all such indebtedness relating to the Guaranteed
Obligations of the Borrower to Holdings shall be collected, enforced and
received by Holdings for the benefit of the Secured Creditors and be paid over
to the Agent on behalf of the Secured Creditors on account of the Guaranteed
Obligations of the Borrower to the Secured Creditors, but without affecting or
impairing in any manner the liability of Holdings under the other provisions of
this Holdings Guaranty. Prior to the transfer by Holdings of any Revolving Note
or negotiable instrument evidencing any of the indebtedness relating to the
Guaranteed Obligations of the Borrower to Holdings, Holdings shall mark such
Revolving Note or negotiable instrument with a legend that the same is subject
to this subordination. The provisions of this Section 14.07 (and any claims of
Holdings as described above) are subject to the provisions of Section 14.08(c).
14.08 Waiver. (a) Holdings waives any right (except as shall
be required by applicable statute and cannot be waived) to require the Agent or
the Secured Creditors to (i) proceed against the Borrower, any other guarantor
or any other party, (ii) proceed against or exhaust any security held from the
Borrower, any other guarantor or any other party or (iii) pursue any other
remedy in the Agent's or the Secured Creditors' power whatsoever. Holdings
waives any defense based on or arising out of any defense of the Borrower, any
other guarantor or any other party, other than payment in full of the
Guaranteed Obligations, based on or arising out of the disability of the
Borrower, any other guarantor or any other party, or the unenforceability of
the Guaranteed Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of the Borrower other than payment
in full of the Guaranteed Obligations. The Agent and the Secured Creditors may,
at their election, foreclose on any security held by the Agent, the Collateral
Agent or the Secured Creditors by one or more judicial or nonjudicial sales,
whether or not every aspect of any such sale is commercially reasonable (to the
extent such sale is permitted by applicable law), or exercise any other right
or remedy the Agent and the Secured Creditors may have against the Borrower or
any other party, or any security, without affecting or impairing in any way the
liability of Holdings hereunder except to the extent the Guaranteed Obligations
have been paid. Holdings waives any defense arising out of any such election by
the Agent and the Secured Creditors, even though such election operates to
impair or extinguish any right of reimbursement or subrogation or other right
or remedy of Holdings against any Borrower or any other party or any security.
(b) Holdings waives all presentments, demands for
performance, protests and notices, including, without limitation, notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Holdings Guaranty, and notices of the existence, creation or incurring
of new or additional Guaranteed Obligations. Holdings assumes all
responsibility for being and keeping itself informed of the Borrower's
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the Guaranteed Obligations and the nature, scope and
extent of the risks which Holdings assumes and incurs hereunder, and agrees
that the
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Agent and the Secured Creditors shall have no duty to advise Holdings of
information known to them regarding such circumstances or risks.
(c) Holdings understands that to the extent the Guaranteed
Obligations are secured by Real Property, Holdings shall be liable for the full
amount of the liability hereunder notwithstanding foreclosure on any such Real
Property by trustee sale or any other reason impairing Holdings' or any secured
creditors' right to proceed against the Borrower.
14.09 Nature of Liability. It is the desire and intent of
Holdings and the Secured Creditors that this Holdings Guaranty shall be
enforced against Holdings to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought.
If, however, and to the extent that, the obligations of Holdings under this
Holdings Guaranty shall be adjudicated to be invalid or unenforceable for any
reason (including, without limitation, because of any applicable state or
federal law relating to fraudulent conveyances or transfers), then the amount
of the Guaranteed Obligations of Holdings shall be deemed to be reduced and
Holdings shall pay the maximum amount of the Guaranteed Obligations which would
be permissible under applicable law.
[Signatures Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
ATRIUM CORPORATION
Address:
9001 Ambassador Row By: /s/ RANDALL S. FOJTASEK
Dallas, TX 75247 -----------------------------
Attn: Randall Fojtasek Name: Randall S. Fojtasek
Telephone: (214) 634-0836 ---------------------------
Telecopy: (214) 631-4231 Title: President
ATRIUM CORPORATION --------------------------
with a copy to:
Hicks, Muse, Tate & Furst
Incorporated
200 Crescent Court
Suite 1600
Dallas, TX 75201
Attn: Thomas O. Hicks,
John R. Muse,
Jack D. Furst and
Lawrence D. Stuart, Jr.
Telephone: (214) 740-7300
Telecopy: (214) 740-7313
and
Hicks, Muse, Tate & Furst
Incorporated
1325 Avenue of the Americas
25th Floor
New York, New York 10019
Attn: Mr Charles W. Tate
Telephone: (212) 424-1400
Telecopy: (212) 424-1450
S-1
110
ATRIUM COMPANIES, INC.
Address:
9001 Ambassador Row By: /s/ RANDALL S. FOJTASEK
Dallas, TX 75247 -----------------------------
Attn: Randall Fojtasek Name: Randall S. Fojtasek
Telephone: (214) 634-0836 ---------------------------
Telecopy: (214) 631-4231 Title: President
ATRIUM CORPORATION --------------------------
with a copy to:
Hicks, Muse, Tate & Furst
Incorporated
200 Crescent Court
Suite 1600
Dallas, TX 75201
Attn: Thomas O. Hicks,
John R. Muse,
Jack D. Furst and
Lawrence D. Stuart, Jr.
Telephone: (214) 740-7300
Telecopy: (214) 740-7313
and
Hicks, Muse, Tate & Furst
Incorporated
1325 Avenue of the Americas
25th Floor
New York, New York 10019
Attn: Mr Charles W. Tate
Telephone: (212) 424-1400
Telecopy: (212) 424-1450
S-2
111
BANKERS TRUST COMPANY,
Individually and as Agent
By: /s/ MARY KAY COYLE
-----------------------------------
Name: Mary Kay Coyle
---------------------------------
Title: Managing Director
--------------------------------
S-3
112
SCHEDULE I
COMMITMENTS
Revolving
Bank Loan Commitment
Bankers Trust Company $20,000,000
-----------
Total $20,000,000
Schedule I
113
SCHEDULE II
BANK ADDRESSES
Bankers Trust Company 130 Liberty Street
New York, New York 10006
30th Floor
Telephone No.: (212) 250-7671
Telecopier No.: (212) 250-7218
Attention: Mary Kay Coyle
Schedule II
114
SCHEDULE III
TO THE CREDIT AGREEMENT
REAL PROPERTY
I. Owned Real Properties: Street Addresses
A. 402 and 404 Highway 78, Wylie, Texas 75098*
B. 2100, 2101 and 2101-A East Union Bower Road, Irving, Texas 75061*
C. 10 Parker Street, Clinton, Massachusetts 01510*
D. 286-288 Knowlton Street, Bridgeport, Connecticut 06603
*Properties to be subject to the Mortgages.
II. Leasehold Properties: Street Addresses and Lease Agreements
A. Street Addresses
1. 1841 E. Craig Road, Suite A, North Las Vegas, Nevada 89030.
2. 1223 Tappan Circle, Carrollton, Texas 75006.
3. 120-130 East Watkins Street, Phoenix, Arizona 85004.
4. 9001 Ambassador Row, Dallas, Texas 75247.
5. 959 Profit Drive, Dallas, Texas 75247.
6. Highway 69 North, Woodville, Texas 75979.
7. 1341 West Mockingbird Lane, Suite 1200W, Dallas, Texas 75247.
8. 1408 Vantage Drive, Carrollton, Texas 75006.
9. 305 Knowlton Street, Bridgeport, Connecticut 06603.
10. 855-H Conklin Street, Farmingdale, New York 11735.
115
B. Lease Agreements
1. Industrial Real Estate Lease, dated April 22, 1996, with
Tower Enterprises, as Lessor, regarding the property
located at 1841 E. Craig Road, Suite A, North Las Vegas,
Nevada.
2. Lease Agreement, dated September 25, 1990, as amended and
renewed from time to time, with Richard E. Smoot, as
Landlord, regarding the property known as the Carrollton
Industrial Park, located at 1223 Tappan Circle,
Carrollton, Texas. Although this Lease Agreement only
provides for a renewal for one term of one year, the lease
has in fact been renewed for the past 3 years, apparently
on a year-to-year basis.
3. Industrial Real Estate Lease (Multi-Tenant Facility),
dated as of June 1, 1994, with CB Institutional Fund VIII,
as Landlord, regarding the property located at 120-130
East Watkins Street, Phoenix, Arizona.
4. Lease Agreement, dated as of July 3, 1995, between
Fojtasek Industrial Properties, Ltd., as Lessor, and
Atrium Companies, Inc., as Lessee, regarding the property
located at 9001 Ambassador Row, Dallas, Texas (for The
Atrium Door & Window Company portion).
5. Lease Agreement, dated as of July 3, 1995, between Atrium
Companies, Inc., as Lessee, regarding the property located
at 9001 Ambassador Row, Dallas, Texas (for the H-R Window
portion).
6. H-R Window Supply, Inc. pays rent of $7,500 per month to
Atrium Companies, Inc. for the sub-lease of space at 959
Profit Drive, Dallas (part of the same tract of property
as 9001 Ambassador Row, Dallas), where the H-R Window
Division is located. This arrangement is not documented
by any written sub-lease agreement.
7. Lease Agreement, dated September 16, 1996, between Tyler
County Industrial Corporation, as Lessor, and Atrium
Companies, Inc., as Lessee, regarding the property at U.S.
Highway 69 North, Woodville, Texas.
8. Office Space Lease, dated August 16, 1996, between
Mockingbird Towers Ltd., as Landlord, and Atrium
Companies, Inc., as Tenant, regarding the property located
at 1341 West Mockingbird Lane, Suite 1200W, Dallas, Texas.
9. Land Lease, dated April 15, 1988, by and between the
Atrium Door & Window Division and the Missouri, Kansas,
Texas Rail Road Company, as
-2-
116
lessor, regarding certain property adjacent to the 9001
Ambassador Row facility (railroad spur agreement).
10. Industrial Track Agreement, dated January 1, 1984, by and
among the Missouri, Kansas, Texas Rail Road Company, the
Oklahoma, Kansas Texas Rail Road Company and Atrium
Companies, Inc. (as successor by merger to Molding
Products) regarding certain spur track adjacent to the
2100 Ease Union Bower facility.
11. Lease from Network Distribution of Dallas, Inc. to Atrium
Companies, Inc., dated October 23, 1996, for approximately
6,000 sq. ft. of warehouse space at 1408 Vantage Drive,
Carrollton, Texas, at a rent of $.50 per square foot per
month, for an initial term of 6 months with a 7-month
extension option.
12. Lease from Berngold Associates Limited Partnership to
Bishop Manufacturing Company, Incorporated, dated
September 27, 1996, for approximately 63,000 sq. ft. of
light manufacturing and warehouse space at 305 Knowlton
Street, Bridgeport, Connecticut
13. Lease from C-1 Realty Co. to Bishop Manufacturing Co. of
New York, dated September 20, 1992, for light
manufacturing/warehouse space at 855-H Conklin Street,
Farmingdale, New York 11735.
-3-
117
SCHEDULE IV
TO THE CREDIT AGREEMENT
LIST OF SUBSIDIARIES OF THE BORROWER
Direct Subsidiaries of the Borrower:
H-R Window Supply, Inc.
Bishop Manufacturing Co. of New York, Inc.
Vinyl Building Specialties of Connecticut, Inc.
Indirect wholly owned subsidiaries of the Borrower:
Bishop Manufacturing Company, Incorporated, owned through Vinyl Building
Specialties of Connecticut, Inc.
Bishop Manufacturing Company of New England, Inc., owned through Bishop
Manufacturing Company, Incorporated.
118
SCHEDULE V
TO THE CREDIT AGREEMENT
EXISTING INDEBTEDNESS OF THE BORROWER AND ITS SUBSIDIARIES
$206,000 SBA Guaranteed Loan from Massachusetts Certified Development
Corp to Bishop Manufacturing Company of New England, Inc. evidenced by that
certain "504" Note dated June 9, 1993, issued by Bishop Manufacturing Company
of New England, Inc. pursuant to the terms of that certain Authorization and
Loan Agreement dated as January 6, 1993, by and among Massachusetts Certified
Development Corp., Bishop Manufacturing Company of New England, Inc. and the
Small Business Administration.
119
SCHEDULE VI ATRIUM COMPANIES, INC.
================================================================================
SCHEDULE OF INSURANCE
As of November 27, 1996
COVERAGE CARRIER POLICY NUMBER EFFECTIVE DATE
------------------- ----------------------- ---------------- -------------------
AUTO LIABILITY Federal Insurance Co.
All Other States TBD 11/27/96-11/27/96
Texas TBD 11/27/96-11/27/96
BOILER & MACHINERY Hartford Steam Boiler BMINY621326500 04/01/96-04/01/97
GENERAL LIABILITY Federal Insurance Co. TBD 11/27/96-11/27/97
MIN. AMOUNT
COVERAGE LIMITS REQUIRED
------------------- ----------------------------------------------------- -------------
AUTO LIABILITY
All Other States $ 1,000,000 CSL $ 1,000,000
Texas $ 10,000 Medical Payments
$ 1,000,000 Uninsured/Underinsured Motorist
$ 50,000 Hired Car Physical Damage
$ 1,000 Collision Deductible, Autos
$ 1,000 Comprehensive Deductible, Autos
$ 5,000 Collision Deductible, Medium &
Heavy Trucks
BOILER & MACHINERY $ 100,000,000 Combined PD/BI/EE $ 50,000,000
$ 5,000,000 CBI/CEE
$ 5,000,000 Ammonia Contamination
$ 5,000,000 Water Damage
$ 5,000,000 Consequential Damage
$ 5,000,000 Expediting Expense
$ 500,000 Hazardous Substance
$ 10,000 Deductible, Except:
$ 50,000 PD all presses greater than 1,000 tons
2 x Daily Value BI and CBI/CEE, Except:
5 x Daily Value All presses greater than 1,000 tons
12 Hours Service Interruption
GENERAL LIABILITY
-----------------
GENERAL LIABILITY $ 2,000,000 General Aggregate $ 1,000,000
$ 1,000,000 Products/Completed Operations
Aggregate
$ 1,000,000 Personal & Advertising Injury
$ 1,000,000 Per Occurrence
Included Fire Damage Legal Liability
$ 10,000 Medical Expense
120
COVERAGE CARRIER POLICY NUMBER EFFECTIVE DATE
------------------- ----------------------- ---------------- -------------------
GENERAL LIABILITY
(CONTINUED)
PROPERTY Lexington Ins. Co. 8791309 04/01/96-04/01/97
(Primary $ 3,500,000)
UMBRELLA Westchester Fire Ins. CUA1028200 04/01/96-04/01/97
Co.
EXCESS LIABILITY Federal Insurance Co. 79402066 04/01/96-04/01/97
EXCESS LIABILITY Aetna Casualty & 08XN25441683SCA 04/01/96-04/01/97
Surety Co.
WORKERS' Federal Insurance Co. TBD 11/27/96-11/27/97
COMPENSATION
MIN. AMOUNT
COVERAGE LIMITS REQUIRED
------------------- ----------------------------------------------------- -------------
GENERAL LIABILITY EMPLOYEE BENEFITS LIABILITY
---------------------------
(CONTINUED) $ 1,000,000 Each Occurrence
$ 1,000,000 Aggregate Limit
$ 10,000 Deductible
PROPERTY $ 200,000,000 "All Risk" Incl. Business $ 75,000,000
Interruption
Loss Limit Per Occurrence
Sublimits Are Per Occurrence
unless
Otherwise Stated
$ 200,000,000 Earthquake - Annual Aggregate
(outside CA)
$ 50,000,000 Earthquake - Annual Aggregate
(CA)
$ 10,000 Deductible, Except:
------
$ 5,000 Transit
$ 50,000 Flood
5% Earthquake - Per Unit of
Insurance
$ 100,000 Earthquake Minimum - CA Only
$ 50,000 Earthquake Minimum - All Other
States
2% Wind - Tier 1 Locations
$ 100,000 Wind - Minimum
UMBRELLA $ 20,000,000 Per Occurrence $ 30,000,000
$ 20,000,000 Aggregate Combined
$ 10,000 Self Insured Retention Umbrella &
Excess
EXCESS LIABILITY $ 25,000,000 Per Occurrence (excess of
20,000,000)
$ 25,000,000 Aggregate
EXCESS LIABILITY $ 25,000,000 Per Occurrence (excess of
45,000,000)
$ 25,000,000 Aggregate
WORKERS' Statutory (Workers' Compensation) Statutory
COMPENSATION
-2-
121
COVERAGE CARRIER POLICY NUMBER EFFECTIVE DATE
------------------- ----------------------- ---------------- -------------------
WORKERS' COMP
(CONTINUED)
MIN. AMOUNT
COVERAGE LIMITS REQUIRED
------------------- ----------------------------------------------------- -------------
WORKERS' COMP Employer's Liability:
(CONTINUED)
$ 500,000 Each Accident
$ 500,000 Disease-Policy Limit
$ 500,000 Disease-Each Employee
$ 100,000 Repatriation and Endemic Disease
$ 250,000 Deductible Per Occurrence
$ 2,000,000 Loss Aggregate
-3-
122
SCHEDULE VII
TO
CREDIT AGREEMENT
EXISTING LIENS
- ---------------------------------------------------------------------------------------------
NAME OF
DEBTOR/GRANTOR NAME SECURED PARTY JURISDICTION
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. The First National Bank of Arizona--Secretary
Boston, as Agent* of State
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc., dba Toyota Motor Credit Arizona--Secretary
Skotty Aluminum Products Corporation* (Toyotalift of of State
Arizona, Inc.)
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. The First National Bank of Maricopa County, AZ
Boston, as Agent*
- ---------------------------------------------------------------------------------------------
SKOTTY ALUMINUM RUDY GUZMAN, dba GUZMAN Maricopa County, AZ
PRODUCTS, a division of CONSTRUCTION, as Plaintiff
FOJTASEK COMPANIES, INC.;
et al. (as defendants)
- ---------------------------------------------------------------------------------------------
FOJTASEK COMPANIES, INC., a Texas GILA SPRINGS ASSOCIATION, an Maricopa County, AZ
corporation, dba ARIZONA BUILDING Arizona corporation, as
SPECIALTIES OF PHOENIX, INC.; et Plaintiff
al. (as defendants)
- ---------------------------------------------------------------------------------------------
FOJTASEK COMPANIES, INC., FEDERAL NATIONAL Maricopa County, AZ
dba ARIZONA BUILDING MORTGAGE ASSOCIATION, as
SPECIALTIES; et al. (as Plaintiff
defendants)
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. The First National Bank of Nevada--Secretary
Boston, as Agent* of State
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. The First National Bank of Clark County, NV
Boston, as Agent*
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. Siemens Credit Corporation Texas--Secretary of
State
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. dba The DATAMAX Leasing Texas--Secretary of
Atrium Door & Window Company State
- ---------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
FILING FILING NO. DESCRIPTION OF
DEBTOR/GRANTOR NAME DATE COLLATERAL
- -----------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. 7/5/95 837716 Blanket Lien
- -----------------------------------------------------------------------------------------------
Fojtasek Companies, Inc., dba 8/5/96 928992 one (1) Toyota forklift
Skotty Aluminum Products
- -----------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. 7/5/95 95-0389938 Blanket Lien
- -----------------------------------------------------------------------------------------------
SKOTTY ALUMINUM 4/12/96 96-0252144 or Lis Pendens against real
PRODUCTS, a division of CV 96-06437 property (not owned by
FOJTASEK COMPANIES, INC.; Borrower)
et al. (as defendants)
- -----------------------------------------------------------------------------------------------
FOJTASEK COMPANIES, INC., a Texas 8/20/92 92-0460591 or Lis Pendens against real
corporation, dba ARIZONA BUILDING CV 92-19425 property (not owned by
SPECIALTIES OF PHOENIX, INC.; et Borrower)
al. (as defendants)
- -----------------------------------------------------------------------------------------------
FOJTASEK COMPANIES, INC., 4/3/91 91-141492 or Lis Pendens against real
dba ARIZONA BUILDING CV91-08694 property (not owned by
SPECIALTIES; et al. (as Borrower)
defendants)
- -----------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. 7/5/95 9509428 Blanket Lien
- -----------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. 7/5/95 950705-01182 Blanket Lien
- -----------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. 1/26/94 016163 Leased Equipment (Phone
System)
- -----------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. dba The 6/3/94 110365 Leased Equipment (Canon
Atrium Door & Window Company Copier and Stapler)
- -----------------------------------------------------------------------------------------------
123
- ---------------------------------------------------------------------------------------------
NAME OF
DEBTOR/GRANTOR NAME SECURED PARTY JURISDICTION
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. dba The DATAMAX Leasing Texas--Secretary of
Atrium Door & Window Company State
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. dba H-R Business Credit Leasing Texas--Secretary of
Windows State
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. Siemens Credit Corporation Texas--Secretary of
State
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. Boatmen's First National Bank Texas--Secretary of
of Amarillo, Texas Commerce State
Bank National Association and
Chemical Bank**
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. The First National Bank of Texas --Secretary
Boston, as Agent of State
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. (as Star Data Systems, Inc. (as Texas--Secretary of
Lessee) Lessor) State
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. (as Yale Financial Services, Inc. Texas--Secretary of
Lessee) (as Lessor) State
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. dba Citicorp Dealer Finance Texas--Secretary of
Extruders State
- ---------------------------------------------------------------------------------------------
Woodville Extruders, a division The First National Bank [of Texas--Secretary of
of Fojtasek Companies, Inc. Boston] as Agent* State
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. The First National Bank of Dallas County, TX
Boston, as Agent*
- ---------------------------------------------------------------------------------------------
The Atrium Door & Window MetLife Capital, Limited Dallas County, TX
Corporation Partnership
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. MetLife Capital, Limited Dallas County, TX
Partnership
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. Texas Commerce Bank - Dallas, Dallas County, TX
N.A. (as Mortgagee)*
- ---------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
FILING FILING NO. DESCRIPTION OF
DEBTOR/GRANTOR NAME DATE COLLATERAL
- -----------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. dba The 6/3/94 110366 Leased Equipment (Fax and
Atrium Door & Window Company Memory)
- -----------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. dba H-R 9/6/94 174422 Leased Equipment (Copier)
Windows
- -----------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. 1/31/95 020148 Leased Equipment (ROLM
Phones and Cards)
- -----------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. 7/3/95 129298 Real Property located in
Dallas, Texas and
improvements,fixtures and
appurtenances attached
thereto
- -----------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. 7/5/95 129738 Blanket Lien
- -----------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. (as 2/21/96 034471 Leased Computer Equipment
Lessee)
- -----------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. (as 6/12/96 116200 Equipment of Lessor leased
Lessee) to Lessee
- -----------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. dba 6/13/96 117050 Three (3) Mitsubishi
Extruders Vehicles
- -----------------------------------------------------------------------------------------------
Woodville Extruders, a division 10/7/96 197241 Blanket Lien
of Fojtasek Companies, Inc.
- -----------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. 7/5/95 003596 Blanket Lien
- -----------------------------------------------------------------------------------------------
The Atrium Door & Window 10/5/87 87192-2864 Leased Equipment (One(1)
Corporation glass production system)
- -----------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. 5/17/88 88096-0304 Equipment
- -----------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. 1/18/90 90013-1084 Deed of Trust, Security
Agreement, Fixtures
Financing Statement and
Assignment of Rents and
Leases (under Term Note in
the amount of
$1,840,569.00)
- -----------------------------------------------------------------------------------------------
124
- ---------------------------------------------------------------------------------------------
NAME OF
DEBTOR/GRANTOR NAME SECURED PARTY JURISDICTION
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. Texas Commerce Bank - Dallas, Dallas County, TX
N.A. (as Mortgagee)**
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. The First National Bank of Dallas County, TX
Boston, as Agent **
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. The First National Bank of Dallas County, TX
Boston, as Agent*
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. The First National Bank of Dallas County, TX
Boston, as Agent*
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. The First National Bank of Dallas County, TX
Boston, as Agent*
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. The First National Bank of Dallas County, TX
Boston, as Agent*
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. The First National Bank of Dallas County, TX
Boston, as Agent*
- ---------------------------------------------------------------------------------------------
H-R Window Supply Inc. and Angel Gomez (as plaintiff) Dallas County, TX
Fojtasek Companies, Inc. (as
defendants)
- ---------------------------------------------------------------------------------------------
Atrium Door & Window Company and Jesus Garza (as plaintiff) Dallas County, TX
Fojtasek Companies, Inc. (as
defendants)
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc., the Raul Marco Renovato (as Dallas County, TX
Atrium Door & Window Company, a plaintiff)
division of Fojtasek Companies,
Inc. and the Atrium Door & Window
Corporation and Anganette Cruz
(as defendants)
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
FILING FILING NO. DESCRIPTION OF
DEBTOR/GRANTOR NAME DATE COLLATERAL
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. 1/18/90 90013-1124 Misfiled: should have been
recorded with the Clerk of
Tarrant County, TX
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. 7/3/95 95128-02430 Deed of Trust, Security
Agreement, Assignment of
Rents and Financing
Statement(2100 UnionBank-
tract 1)
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. 7/3/95 95128-02477 Deed of Trust, Security
Agreement, Assignment of
Rents and Financing
Statement(2100UnionBank-
tract 2)
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. 7/3/95 95129-00417 Deed of Trust, Security
Agreement, Assignment of
Rents and Financing
Statement (Assignment of
Lease - Ambassador Row)
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. 7/5/95 95129-05441 Blanket Lien
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. 7/5/95 95129-05445 Blanket Lien
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc. 7/5/95 95129-05449 Blanket Lien
- ---------------------------------------------------------------------------------------------
H-R Window Supply Inc. and 12/27/94 94-13244-E Lis Pendens
Fojtasek Companies, Inc. (as
defendants)
- ---------------------------------------------------------------------------------------------
Atrium Door & Window Company and 1/29/96 96-00985-D Lis Pendens
Fojtasek Companies, Inc. (as
defendants)
- ---------------------------------------------------------------------------------------------
Fojtasek Companies, Inc., the 8/9/96 96-08162 Lis Pendens
Atrium Door & Window Company, a
division of Fojtasek Companies,
Inc. and the Atrium Door & Window
Corporation and Anganette Cruz
(as defendants)
- ---------------------------------------------------------------------------------------------
125
- ---------------------------------------------------------------------------------------------
NAME OF
DEBTOR/GRANTOR NAME SECURED PARTY JURISDICTION
- ---------------------------------------------------------------------------------------------
Skotty Aluminum Products The First National Bank of Maricopa County, AZ
(Irving, TX) Boston, as Agent*
- ---------------------------------------------------------------------------------------------
Skotty Aluminum Products The First National Bank of Maricopa County, AZ
(Phoenix, AZ) Boston, as Agent*
- ---------------------------------------------------------------------------------------------
Skotty Aluminum - Atrium Door & Tremco, Inc. Texas--Secretary of
Window State
- ---------------------------------------------------------------------------------------------
Skotty Aluminum Products The First National Bank of Texas--Secretary of
Boston, as Agent* State
- ---------------------------------------------------------------------------------------------
Skotty Aluminum Products The First National Bank of Arizona--Secretary
(Irving, TX) Boston, as Agent* of State
- ---------------------------------------------------------------------------------------------
Skotty Aluminum Products The First National Bank of Arizona--Secretary
(Phoenix, AZ) Boston, as Agent* of State
- ---------------------------------------------------------------------------------------------
H-R Windows The First National Bank of Texas--Secretary of
Boston, as Agent* State
- ---------------------------------------------------------------------------------------------
H-R Windows The First National Bank of Dallas County, TX
Boston, as Agent*
- ---------------------------------------------------------------------------------------------
Extruders The First National Bank of Texas--Secretary of
Boston, as Agent* State
- ---------------------------------------------------------------------------------------------
Woodville Extruders The First National Bank of Texas--Secretary of
Boston, as Agent* State
- ---------------------------------------------------------------------------------------------
North Texas Die and Tool The First National Bank of Texas--Secretary of
Boston, as Agent* State
- ---------------------------------------------------------------------------------------------
Atrium Sensomatics Electronics Corp. Texas--Secretary of
State
- ---------------------------------------------------------------------------------------------
Atrium Sensomatics Electronics Corp. Texas--Secretary of
State
- ---------------------------------------------------------------------------------------------
Atrium Corporation The First National Bank of Texas--Secretary of
Boston, as Agent* State
- ---------------------------------------------------------------------------------------------
Atrium Door and Window The First National Bank of Nevada--Secretary
Distributors of Nevada Boston, as Agent* of State
- ---------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
FILING FILING NO. DESCRIPTION OF
DEBTOR/GRANTOR NAME DATE COLLATERAL
- ------------------------------------------------------------------------------------------
Skotty Aluminum Products 7/5/95 95-0389936 Blanket Lien
(Irving, TX)
- ------------------------------------------------------------------------------------------
Skotty Aluminum Products 7/5/95 95-0389937 Blanket Lien
(Phoenix, AZ)
- ------------------------------------------------------------------------------------------
Skotty Aluminum - Atrium Door & 5/10/93 --683 Equipment
Window
- ------------------------------------------------------------------------------------------
Skotty Aluminum Products 7/5/95 129734 Blanket Lien
- ------------------------------------------------------------------------------------------
Skotty Aluminum Products 7/5/95 837714 Blanket Lien
(Irving, TX)
- ------------------------------------------------------------------------------------------
Skotty Aluminum Products 7/5/95 837715 Blanket Lien
(Phoenix, AZ)
- ------------------------------------------------------------------------------------------
H-R Windows 7/5/95 129732 Blanket Lien
- ------------------------------------------------------------------------------------------
H-R Windows 7/5/95 003595 Blanket Lien
- ------------------------------------------------------------------------------------------
Extruders 7/5/96 129730 Blanket Lien
- ------------------------------------------------------------------------------------------
Woodville Extruders 10/7/96 197241 Blanket Lien
- ------------------------------------------------------------------------------------------
North Texas Die and Tool 7/5/96 129735 Blanket Lien
- ------------------------------------------------------------------------------------------
Atrium 6/9/95 114765 Surveillance equipment
- ------------------------------------------------------------------------------------------
Atrium 6/9/95 114766 Surveillance equipment
- ------------------------------------------------------------------------------------------
Atrium Corporation 10/7/96 197242 Blanket Lien
- ------------------------------------------------------------------------------------------
Atrium Door and Window 10/15/96 9616783 Blanket Lien
Distributors of Nevada
- ------------------------------------------------------------------------------------------
126
- ---------------------------------------------------------------------------------------------
NAME OF
DEBTOR/GRANTOR NAME SECURED PARTY JURISDICTION
- ---------------------------------------------------------------------------------------------
Atrium Door and Window The First National Bank of Clark County, NV
Distributors of Nevada Boston, as Agent*
- ---------------------------------------------------------------------------------------------
Atrium Corporation The First National Bank of Massachusetts--
Boston, as Agent* Secretary of State
- ---------------------------------------------------------------------------------------------
H-R Window Supply, Inc. The First National Bank of Texas--Secretary of
Boston, as Agent* State
- ---------------------------------------------------------------------------------------------
H-R Windows Supply Inc. and Maria Espinosa (as plaintiff) Dallas County, TX
Fojtasek Companies, Inc. (as
defendants)
- ---------------------------------------------------------------------------------------------
Bishop Manufacturing Company, Lafayette American Bank and Connecticut--
Incorporated Trust Company Secretary of State
- ---------------------------------------------------------------------------------------------
Bishop Manufacturing Company, Richard Lyman, as plaintiff City of Bridgeport,
Inc. as defendant CT
- ---------------------------------------------------------------------------------------------
Bishop Manufacturing of New The First National Bank of Town of Clinton, MA
England, Inc. Boston, as Agent*
- ---------------------------------------------------------------------------------------------
Bishop Manufacturing Company of Lafayette American Bank and Connecticut--
New England, Inc. Trust Company Secretary of State
- ---------------------------------------------------------------------------------------------
Bishop Manufacturing Company of U.S. Small Business Massachusetts--
New England, Inc. Administration (assignee of Secretary of State
Massachusetts Certified
Development Corp.)+
- ---------------------------------------------------------------------------------------------
Bishop Manufacturing Company of The First National Bank of Massachusetts--
New England, Inc. Boston, as agent* Secretary of State
Bishop Manufacturing Company of U.S. Small Business Town of Clinton, MA
New England, Inc. Administration (assignee of
Massachusetts Certified
Development Corp.)+
- ---------------------------------------------------------------------------------------------
Kel-Star Building Products The First National Bank, as Texas--Secretary of
Agent* State
- ---------------------------------------------------------------------------------------------
Dow-Tech Plastics The First National Bank of Texas--Secretary of
Boston, as Agent* State
- ---------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
FILING FILING NO. DESCRIPTION OF
DEBTOR/GRANTOR NAME DATE COLLATERAL
- -------------------------------------------------------------------------------------------
Atrium Door and Window 10/21/96 961021-00407 Blanket Lien
Distributors of Nevada
- -------------------------------------------------------------------------------------------
Atrium Corporation 10/7/96 421196 Blanket Lien
- -------------------------------------------------------------------------------------------
H-R Window Supply, Inc. 7.5.95 129731 Blanket Lien
- -------------------------------------------------------------------------------------------
H-R Windows Supply Inc. and 5/14/96 96-04814 Lis Pendens
Fojtasek Companies, Inc. (as
defendants)
- -------------------------------------------------------------------------------------------
Bishop Manufacturing Company, 5/27/93 1014410 Blanket Lien; signed
Incorporated releases in Debtor's
possession
- -------------------------------------------------------------------------------------------
Bishop Manufacturing Company, 6/18/96 33345 Lis Pendens
Inc. as defendant
- -------------------------------------------------------------------------------------------
Bishop Manufacturing of New 10/7/96 86 Blanket Lien
England, Inc.
- -------------------------------------------------------------------------------------------
Bishop Manufacturing Company of 5/27/93 1014409 Blanket Lien; signed
New England, Inc. releases in Debtor's
possession
- -------------------------------------------------------------------------------------------
Bishop Manufacturing Company of 6/9/93 165875 All fixtures of Debtor
New England, Inc. located on real property
located in Clinton, MA
- -------------------------------------------------------------------------------------------
Bishop Manufacturing Company of 10/7/96 421195 Blanket Lien
New England, Inc.
- -------------------------------------------------------------------------------------------
Bishop Manufacturing Company of 6/14/93 662 All fixtures of Debtor
New England, Inc. located on real property in
Clinton, MA
- -------------------------------------------------------------------------------------------
Kel-Star Building Products 201946 201946 Blanket Lien
- -------------------------------------------------------------------------------------------
Dow-Tech Plastics 7/5/95 129736 Blanket Lien
- -------------------------------------------------------------------------------------------
127
- -------------
* To be released contemporaneously with the Closing Date under the
Credit Agreement pursuant to a signed release and UCC-3 termination
statements
** Borrower (or any subsidiaries) is not obligated on any debt secured
hereby. Debt matures 12-1-96. Payoff period terminates 12-31-96.
+ Debt to be paid and liens released.
128
EXHIBIT A
FORM OF NOTICE OF BORROWING
[Date]
Bankers Trust Company, as Agent
(the "Agent") for the Banks
party to the Credit Agreement
referred to below
One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Attention:
------------------
Ladies and Gentlemen:
The undersigned, Atrium Companies, Inc., a Delaware corporation
(the "Borrower"), refers to the Credit Agreement, dated as of November __, 1996
(as amended, restated, modified or supplemented from time to time, the "Credit
Agreement", the terms defined therein being used herein as therein defined),
among Atrium Corporation, the Borrower, the Banks party thereto from time to
time (the "Banks"), and you, as Agent for such Banks, and hereby gives you
irrevocable notice, pursuant to Section 1.03(a) of the Credit Agreement, that
the undersigned hereby requests a Borrowing of Loans under the Credit
Agreement, and in that connection sets forth below the information relating to
such Borrowing (the "Proposed Borrowing") as required by Section 1.03(a) of the
Credit Agreement:
(i) The aggregate principal amount of the Proposed Borrowing
is $__________.
(ii) The Business Day of the Proposed Borrowing is __________,
___.(1/)
- --------------------
(1/) Shall be a Business Day at least three Business Days in the case of
Eurodollar Loans after the date hereof.
129
EXHIBIT A
Page 2
(iii) The Loans to be made pursuant to the Proposed Borrowing
shall be initially maintained as [Base Rate Loans] [Eurodollar
Loans].(2/)
[(iv) The initial Interest Period for the Proposed Borrowing is
[one month] [two months] [three months] [six months] [, subject to
availability to all the Banks, nine or twelve months].](3/)
The undersigned hereby certifies on behalf of the Borrower that
the following statements are true on the date hereof, and will be true on the
date of the Proposed Borrowing:
(A) the representations and warranties contained in the Credit
Agreement and the other Credit Documents are and will be true and
correct in all material respects, before and after giving effect to the
Proposed Borrowing and to the application of the proceeds thereof, as
though made on such date, unless stated to relate to a specific earlier
date, in which case such representations and warranties shall be true
and correct in all material respects as of such earlier date; and
(B) no Default or Event of Default has occurred and is
continuing, or would result from such Proposed Borrowing or from the
application of the proceeds thereof.
Very truly yours,
ATRIUM COMPANIES, INC.
By
-----------------------------------
Title:
- --------------------
(2/) Eurodollar Loans may not be incurred prior to the earlier of (x) the 60th
day after the Initial Borrowing Date and (y) the Syndication Date.
(3/) To be included for a Proposed Borrowing of Eurodollar Loans.
130
EXHIBIT B
FORM OF REVOLVING NOTE
$____________________ New York, New York
November __, 1996
FOR VALUE RECEIVED, ATRIUM COMPANIES, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
_______________________ (the "Bank"), in lawful money of the United States of
America in immediately available funds, at the Payment Office (as defined in
the Agreement referred to below) initially located at 130 Liberty Street, One
Bankers Trust Plaza, New York, New York 10006 on the Revolving Loan Maturity
Date (as defined in the Agreement) the principal sum of ___________________
DOLLARS ($ ___________) or, if less, the unpaid principal amount of all
Revolving Loans (as defined in the Agreement) made by the Bank pursuant to the
Agreement, payable at such times and in such amounts as are specified in the
Agreement.
The Borrower promises also to pay interest on the unpaid
principal amount of each Revolving Loan made by the Bank in like money at said
office from the date hereof until paid at the rates and at the times provided
in Section 1.08 of the Agreement.
This Note is one of the Revolving Notes referred to in the Credit
Agreement, dated as of November __, 1996, among Atrium Corporation, the
Borrower, the Banks from time to time party thereto (including the Bank) and
Bankers Trust Company, as Agent (as amended, restated, supplemented or
otherwise modified or supplemented from time to time, the "Agreement") and is
entitled to the benefits thereof and of the other Credit Documents (as defined
in the Agreement). This Note is secured by the Security Documents (as defined
in the Agreement) and is entitled to the benefits of the Guaranty (as defined
in the Agreement). As provided in the Agreement, this Note is subject to
voluntary prepayment and mandatory repayment prior to the Revolving Loan
Maturity Date, in whole or in part, and Revolving Loans may be converted from
one Type (as defined in the Agreement) into another Type to the extent provided
in the Agreement.
In case an Event of Default (as defined in the Agreement) shall
occur and be continuing, the principal of and accrued interest on this Note may
be declared to be due and payable in the manner and with the effect provided in
the Agreement.
131
EXHIBIT B
Page 2
The Borrower hereby waives presentment, demand, protest or notice
of any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED
BY THE LAW OF THE STATE OF NEW YORK.
ATRIUM COMPANIES, INC.
By
---------------------------------
Title:
132
EXHIBIT C
FORM OF LETTER OF CREDIT REQUEST
No. __________(1/) Dated ________________(2/)
Bankers Trust Company, individually and as
Agent under the Credit Agreement (as amended,
restated, supplemented or otherwise modified
from time to time, the "Credit Agreement"),
dated as of November __, 1996, among Atrium
Corporation, Atrium Companies, Inc., the
Banks from time to time party thereto and
Bankers Trust
Company, as Agent
One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Dear Sirs:
We hereby request that [Name of Proposed Issuing Bank], in its
individual capacity, issue a [Trade] [Standby] Letter of Credit for the account
of the undersigned on ____________________(3/) (the "Date of Issuance") in the
aggregate stated amount of ___________________(4/).
For purposes of this Letter of Credit Request, unless otherwise
defined herein, all capitalized terms used herein shall have the respective
meanings provided in the Credit Agreement.
- --------------------
(1/) Letter of Credit Request Number.
(2/) Date of Letter of Credit Request.
(3/) Date of Issuance which shall be at least two (2) Business Days' (or, such
shorter period as is acceptable to the respective Issuing Bank).
(4/) Aggregate initial stated amount of Letter of Credit.
133
EXHIBIT C
Page 2
The beneficiary of the requested Letter of Credit will be
_____________________(5/), and such Letter of Credit will be in support of
________________________(6/) and will have stated expiration date of
___________________(7/).
The undersigned hereby certifies on behalf of the Borrower that:
(1) The representations and warranties contained in the Credit
Documents will be true and correct in all material respects on the date
of issuance, both before and after giving effect to the issuance of the
Letter of Credit requested hereby (it being understood and agreed that
any representation or warranty which by its terms is made as of a
specified date shall be required to be true and correct in all material
respects only as of such specified date).
(2) No Default or Event of Default has occurred and is
continuing nor, after giving effect to the issuance of the Letter of
Credit requested hereby, would such a Default or Event of Default occur.
Copies of all documentation with respect to the supported
transaction are attached hereto.
ATRIUM COMPANIES, INC.
By
---------------------------------
Name:
Title:
- --------------------
(5/) Insert name and address of beneficiary.
(6/) Insert description of L/C Supportable Obligations of the Borrower or its
Subsidiaries.
(7/) Insert last date upon which drafts may be presented which may not be later
than the earlier of 12 months after the date of issuance thereof, and the
Revolving Loan Maturity Date.
134
EXHIBIT D
FORM OF SECTION 4.04(b)(iii) CERTIFICATE
Reference is hereby made to the Credit Agreement, dated as of
November __, 1996, among Atrium Corporation, Atrium Companies, Inc., various
Banks party thereto from time to time, and Bankers Trust Company, as Agent (the
"Credit Agreement"). Pursuant to the provisions of Section 4.04(b)(iii) of the
Credit Agreement, the undersigned hereby certifies that it is not a "bank" as
such term is used in Section 881(c)(3)(A) of the Internal Revenue Code of 1986,
as amended.
[NAME OF BANK]
By
-----------------------------------
Name:
Title:
135
EXHIBIT E
FORM OF VINSON & ELKINS L.L.P. OPINION
(713) 758-2222
November 27, 1996
Bankers Trust Company
in its individual capacity and
as Agent and Collateral Agent
One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
To each of the Bank from time to time parties to the
Credit Agreement referred to below
Ladies and Gentlemen:
We have acted as counsel to Atrium Corporation, a Delaware corporation
("Holdings"), Atrium Companies, Inc., a Delaware corporation (formerly named
FCI Holding Corp. and the survivor by merger of Fojtasek Companies, Inc. a
Texas corporation) (the "Borrower"), and H-R Window Supply Company, Inc., a
Texas corporation ("H-R Window"), Vinyl Building Specialities of Connecticut,
Inc., a Connecticut corporation, Bishop Manufacturing Co. of New York, Inc., a
Connecticut corporation, Bishop Manufacturing Co., Inc., a Connecticut
corporation and Bishop Manufacturing Company of New England, Inc., a
Connecticut corporation (collectively, the "Subsidiary Guarantors") in
connection with the transactions to be effected pursuant to that certain Credit
Agreement dated as of November 27, 1996 (the "Credit Agreement") by and among
Holdings, the Borrower, the Bank party thereto from time to time, Bankers Trust
Company, as Agent. Capitalized terms used, but not otherwise defined, herein
shall have the meanings ascribed to such terms in the Credit Agreement , and
other terms that are defined in the Uniform Commercial Code as in effect in the
State of New York (the "New York UCC") have the same meanings when used herein
unless otherwise indicated by the context in which such terms are so used.
Holdings, the Borrower and the Subsidiary Guarantors are collectively referred
to herein as the "Credit Parties" and individually as a "Credit Party". This
opinion is being delivered to you at the express direction of the Borrowers
pursuant to Section 5.03 of the Credit Agreement.
In rendering the opinions set forth herein, we have examined:
(i) the certificates of incorporation and bylaws of the Credit
Parties;
136
EXHIBIT E
Bankers Trust Company, as Agent
November 27, 1996
Page 2
(ii) resolutions of the boards of directors and, if applicable,
stockholders, of the Credit Parties with respect to the transactions referred
to herein to which such Person is a party;
(iii) the Credit Agreement
(iv) the Revolving Note dated the date hereof executed by the
Borrower in favor of BTCo;
(v) the Environmental Indemnity Agreement;
(vi) the Pledge Agreement and the Pledged Securities delivered in
connection therewith;
(vii) the Security Agreement;
(viii) the Subsidiary Guaranty;
(ix) the Assignment of Security Interests in United States
Trademarks and Patents dated as of the date hereof by and between the Borrower
and the Agent (the "Trademark and Patent Assignment");
(x) the Assignment of Security Interest in United States
Copyrights dated as of the date hereof by and between the Borrower and the
Agent (the "Copyright Assignment");
(xi) (A) the mortgages and deeds of trust identified on Schedule I
hereto, each dated as of the date hereof (the "Mortgages") and executed by the
Borrower in favor of the Agent, including, but not limited to, the Mortgages to
be recorded in the State of Texas (the "Texas Mortgages"), and (B) the UCC-1
financing statement to be filed in the Office of the Texas Secretary of State
in connection with the Texas Mortgages (the "Texas Mortgage Financing
Statements");
(xii) the UCC-1 financing statements (other than the Texas Mortgage
Financing Statements) executed by the Credit Parties for filing within the
State of Texas (collectively, the "Texas Security Agreement Financing
Statements," with the Texas Mortgage Financing Statements and the Texas
Security Agreement Financing Statements herein collectively referred to as the
"Texas Financing Statements"); and
(xiii) the UCC-1 financing statements executed by the Credit Parties
for filing within the States of Arizona, Connecticut, New York, and Nevada
(collectively, the "CCH Financing Statements");
((iii) - (xiii) collectively, hereinafter referred to as the
"Documents") and such other agreements, instruments and documents, and such
questions of law as we have deemed necessary or appropriate to enable us to
render the opinions expressed below. Additionally, we have examined originals
or copies, certified to our satisfaction, of such certificates of public
officials and officers
137
EXHIBIT E
Bankers Trust Company, as Agent
November 27, 1996
Page 3
and representatives of the Credit Parties as we have deemed relevant or
necessary, as the basis for the opinions set forth herein.
In rendering the opinions expressed below, we have assumed (i) that
the signatures of persons signing all documents in connection with which this
opinion is rendered are genuine, (ii) all documents submitted to us as
originals or duplicate originals are authentic, (iii) all documents submitted
to us as copies, whether certified or not, conform to authentic original
documents , (iv) the due authorization, execution and delivery of the Documents
by all parties thereto other than the Credit Parties and that each such
Document is valid, binding and enforceable against the parties thereto other
than the Credit Parties, and (v) the legal capacity of natural persons. We
have assumed that each Credit Party will perform its obligations under the
Documents in good faith and as required by law and that all representations and
warranties by the each Credit Party in the Documents are true and correct in
all material respects and that no fraud and misrepresentation exist with
respect to matters under the Documents. As to various questions of material
fact to our opinion, we have relied upon the accuracy and completeness of the
representations made in the Transaction Documents by the Credit Parties and
upon officer's certificates executed by an officer of each Credit Party
(collectively, the "Officer's Certificate").
Based upon the foregoing and subject to the qualification, exceptions,
limitations and assumptions stated herein, we are of the opinion that:
1. Each Credit Party is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation. Each Credit Party has the requisite corporate power and
authority to own its properties and assets and to transact the business in
which it is engaged and presently proposes to engage.
2. Each Credit Party is duly qualified and in good standing in
each jurisdiction identified in the Officer's Certificate executed by an
officer of such Credit Party as a jurisdiction in which such Credit Party owns
or leases property or conducts business.
3. Each Credit Party has the requisite corporate power and
authority to execute, deliver and perform the terms and provisions of each of
the Documents to which it is a party and has taken all necessary corporate
action to authorize the execution, delivery and performance by it of each such
Document.
4. (a) Each Credit Party has duly executed and delivered each of
the Documents to which it is a party.
(b) Under the laws of the State of New York, each of the
Documents constitutes the legal, valid and binding obligation of each Credit
Party, to the extent that the same is a party thereto, enforceable in
accordance with its terms.
138
EXHIBIT E
Bankers Trust Company, as Agent
November 27, 1996
Page 4
5. Neither the execution and delivery by each Credit Party of the
Documents to which it is a party, nor compliance by its provision of any
Applicable Law (as hereinafter defined) (including, without limitation
Regulations G, T, U and X of the Board of Governors of the Federal Reserve
System) or any applicable order, writ, injunction or decree of any court or
governmental instrumentality identified in the Officer's Certificate, (ii)
conflicts with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien
(except pursuant to the Security Documents) upon any of the material properties
or assets of Holdings or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement or loan agreement, or any
other material agreement, contract or instrument identified in the Officer's
Certificate, or (iii) will violate any provision of the certificate of
incorporation or by-laws of Holdings or any of its Subsidiaries, (iv) requires
the consent, approval, license, authorization or validation of, or filing,
recording or registration with, or exemption by, any governmental or public
body or authority, or any subdivision thereof pursuant to Applicable Law. As
used herein the term "Applicable Law" means the Delaware General Corporation
Law, the Texas Business Corporation Act, and those laws, statutes, rules or
regulations that, in our experience would normally be applicable to a
transaction of the type evidenced by the Documents and that is promulgated or
enacted by the federal government of the United States or any agency or
instrumentality thereof or the States of New York or Texas or any political
subdivision thereof, but excluding (a) any laws, rules or regulations relating
to (i) pollution or protection of the environment, (ii) zoning, land use,
building or construction, (iii) labor, employee rights and benefits, and
occupational safety and health and (iv) utility regulation (except as set forth
in paragraph 9 below) and antitrust, (b) any laws, rules or regulations of any
county, municipality, or similar political subdivision or any agency or
instrumentality thereof, (c) the Texas usury laws, and (d) as to Texas law,
laws relating to provisions that release, exempt, or exculpate a party from, or
require indemnification of a party for, liability for its own action or
inaction, to the extent that the same are inconsistent with public policy.
6. To our knowledge, there are no actions, suits or proceedings
pending or, threatened, with respect to any Credit Party (i) that are likely to
have a Material Adverse Effect or (ii) that could reasonably be expected to
have a material adverse effect on the rights or remedies of the Banks or on the
ability of any Credit Party to perform its respective obligations to the Banks
hereunder and under the other Credit Documents to which it is, or will be, a
party. Additionally, to our knowledge, there does not exist any judgment,
order or injunction prohibiting or imposing material adverse conditions upon
the occurrence of any Credit Event.
7. The authorized capital stock of the Borrower and H-R Window
and the issued and outstanding shares thereof and the record owners thereof,
are as set forth on Schedule II hereto. All of such outstanding shares are
fully-paid and non-assessable and have been issued free of any pre-emptive
rights. No authorized by unissued or treasury shares of capital stock of the
Borrower or H-R Window are subject to any option, warrant, right to call or
commitment of any kind or character. Neither the Borrower nor H-R Window has
outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreements providing for the issuance (contingent
or otherwise)
139
EXHIBIT E
Bankers Trust Company, as Agent
November 27, 1996
Page 5
to repurchase or otherwise acquire or retire any shares of its capital stock or
any convertible securities, rights or options of the type described in the
preceding sentence.
8. Assuming the accuracy of the representations and warranties
set forth in each subscription document of limited partners of Hicks, Muse,
Tate & Furst Equity Fund III, L.P. and that there is no violation by any such
limited partner of Section 48(a) of the Investment Company Act of 1940, as
amended (the "1940 Act"), none of the Credit Parties is an "investment company"
that is required to be registered under the 1940 Act.
9. None of the Credit Parties is a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended.
10. The provisions of the Security Agreement are effective to
create, in favor of the Collateral Agent for its benefit and for the benefit of
the Secured Creditors, a legal, valid and enforceable security interest in all
right, title and interest of the Credit Parties in the Security Agreement
Collateral (as such term is defined in the Security Agreement) accurately and
adequately described in the Security Agreement in which a security interest may
be created under Article 9 of the New York UCC. Assuming that the Texas
Security Agreement Financing Statements were filed in the offices set forth on
Schedule III hereto and have not subsequently been released, terminated or
modified, the Collateral Agent's security interest in the Security Agreement
Collateral accurately and adequately described in the Security Agreement has
been duly and validly perfected to the extent that such security interest may
be perfected under the Texas version of the Uniform Commercial Code (the "Texas
UCC") by the filing of the Texas Financing Statements.
11. We have reviewed the Commerce Clearing House, Inc. Secured
Transactions Guide, as supplemented through October 29, 1996 (the "Guide"), and
based solely on our review of the Guide, and assuming that the CCH Financing
Statements were filed in the offices set forth on Schedule III hereto and have
not subsequently been released, terminated or modified, the Collateral Agent's
security interest in the Security Agreement Collateral accurately and
adequately described in the Security Agreement has been duly and validly
perfected to the extent that such a security interest may be perfected under
the Uniform Commercial Code as enacted and in effect in the States of Arizona,
Connecticut, New York and Nevada (the "Subject States") by the filing of
financing statements.
12. Based on our understanding that the Collateral Agent has taken
and is retaining in the State of New York possession of the Pledged Securities
described in Part I and Part II of Annex A to the Pledge Agreement
(collectively, the "Pledged Collateral"), there has been created under the
Pledge Agreement, and there has been granted to the Collateral Agent, for the
benefit of Agent and the Secured Creditors, a valid and perfected security
interest and lien upon the Pledged Collateral to the extent a security interest
may be obtained by possession under the New York UCC, which
140
EXHIBIT E
Bankers Trust Company, as Agent
November 27, 1996
Page 6
security interest and lien will be free from any adverse claim (as such term is
defined in Section 8-302 of the New York UCC).
13. The provisions of the Copyright Assignment and the Trademark
and Patent Assignment are sufficient to create, in favor of Collateral Agent
for the benefit of the Secured Creditors, a security interest in all right,
title and interest of the Borrower in the Collateral accurately and adequately
described respectively therein (with such Collateral herein referred to as the
"Patent Collateral"). Assuming the (i) filing and recording of the Copyright
Assignment in the United States Copyright Office, (ii) filing and recording of
the Trademark and Patent Assignment in the United States Patent and Trademark
Office, and (iii) the filing of financing statements related to the Patent
Collateral in the appropriate Uniform Commercial Code filing offices, the
Collateral Agent's security interest in the Patent Collateral has been duly and
validly perfected under applicable law.
14. The interest rates applicable to the Obligations of the
Borrower under the Credit Agreement and the Notes do not violate any law, rule
or regulation of the State of New York prescribing a maximum rate of interest.
15. The form of the Texas Mortgages, the acknowledgments thereto
and the Texas Mortgage Financing Statements comply with all applicable
recording, filing and registration laws and regulations of the State of Texas
and are legally sufficient for the purposes intended to be accomplished
thereby.
16. A fully executed counterpart of the Texas Mortgages should be
filed for record in the office of the County Clerk in the county in which the
real property covered by the Texas Mortgages are located, and fully executed
counterparts of the Texas Mortgage Financing Statements should be filed in the
Office of the Secretary of State of Texas. No other filings are necessary or
appropriate for the purposes intended to be accomplished thereby, other than
continuation statements as required by the Texas UCC. Upon such filing, the
Texas Mortgages will constitute as security for the obligations therein
described, (a) valid mortgage liens on all real property and interests in real
property accurately and specifically described in the Texas Mortgages as being
mortgaged thereby, and (b) a perfected security interest in all tangible
personal property and fixtures if adequately described in the Texas Mortgages
as being mortgaged (collectively, the "Mortgaged Personal Properties") thereby
to the extent that the Texas UCC is applicable thereto. The real property and
personal property described in clauses (a) and (b) of the preceding sentence
are herein collectively referred to as the "Texas Mortgaged Properties." The
Security Agreement Collateral, the Pledged Collateral, the Patent Collateral,
and the Mortgaged Personal Properties are herein referred to collectively as
the "Collateral."
17. Neither the Collateral Agent nor any Bank is required to be
qualified to do business or file any designation for service of process of file
any reports or pay any taxes in the State of Texas, or comply with any
statutory or regulatory requirements applicable only to financial institutions
chartered or qualified or required to be chartered or qualified to do business
in the State of Texas, solely by virtue of making the Revolving Loans or
issuing the Letters of Credit, taking a Lien on
141
EXHIBIT E
Bankers Trust Company, as Agent
November 27, 1996
Page 7
property in the State of Texas, enforcing its rights under the Texas Mortgages,
the Credit Agreement or the other Documents and/or the taking of rights under
the lease of the encumbered property through the exercise of remedies under the
Documents, including without limitation, through purchase at a foreclosure
sale, pursuant to a power of sale or by taking a deed in lieu of foreclosure.
18. There are no mortgage taxes, documentary stamp taxes,
intangibles taxes or any other state or local taxes, recording charges, fees or
other charges payable in connection with the execution, delivery, recordation,
filing or enforcement of the Texas Mortgage Financing Statements or the Texas
Mortgages other than nominal recording fees in the appropriate state and county
offices.
The opinions set forth above are subject in all respects to the
following qualifications, limitations, exceptions and assumptions:
(a) The opinions set forth above are subject, as to
enforceability, to the effect of any applicable bankruptcy (including, without
limitation, preference and fraudulent conveyance), insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally. The
enforceability opinions set forth above are also subject to the effect of
general principles of equity (regardless of whether considered in proceedings
in equity or at law), including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, and the possible unavailability of
specific performance or injunctive relief.
(b) With respect to our perfection opinions set forth in
paragraphs 10, 11, 13 and 16 above, we note that continuation statements as
required by the applicable version of the Uniform Commercial Code (the "UCC")
must be filed in order to maintain the effectiveness of the filing of the
financing statements therein referred to. We also note that in the case of
property that becomes Collateral or Texas Mortgaged Properties after the date
hereof, Section 552 of the Federal Bankruptcy Code limits the extent to which
property acquired by a debtor after the commencement of a case under the
Federal Bankruptcy Code may be subject to a security interest arising from a
security agreement entered into by the debtor before the commencement of such
case. We call to your attention that the perfection of the security interests
described in paragraphs 10, 11, 13, and 16 above will lapse (i) as to any
Collateral (as to which the filing of a financing statement is necessary)
acquired by any Credit Party more than four months after such Credit Party so
changes its name, identity or corporate structure as to make any previously
filed financing statements seriously misleading, unless new appropriate
financing statements indicating the new name, identity or corporate structure
of the Credit Party involved are filed before the expiration of such four
months, and (ii) as to any Collateral constituting accounts, general
intangibles, mobile goods and (in the case of a non-possessory security
interest) chattel paper four months after any Credit Party changes its chief
executive office to a new jurisdiction (or, if earlier, when perfection would
have ceased due to the failure to file any required continuation statements)
unless the security interests of the Collateral Agent and the Secured Creditors
are perfected in such new jurisdiction before that termination. We express no
opinion with respect to the perfection of the Collateral Agent's or any Secured
Creditor's security interest in any Collateral except as set forth in
paragraphs 10, 11, 12, 13 and 16 above, and, except as set forth in paragraph
12 above, we express no opinion with respect to
142
EXHIBIT E
Bankers Trust Company, as Agent
November 27, 1996
Page 8
the priority of any Lien or security interest in the Collateral or the Texas
Mortgaged Properties. We also note that in the case of the Collateral Agent's
and the Secured Creditors' security interest in proceeds, continuation of
perfection of such security interests therein is limited to the extent set
forth in the applicable version of the UCC. We further note that the
Collateral Agent's and any Secured Creditor's remedies under the Pledge
Agreement to sell or offer for sale any Pledged Stock (as therein defined) are
subject to compliance with applicable state and federal securities laws.
(c) We express no opinion with respect to the perfection or
priority of the Collateral Agent's and the Secured Creditors' security
interests in any Collateral (i) that is subject to a state statute or a statute
or treaty of the United States that provides for a certificate of title or
national or international registration; (ii) constituting goods that are
affixed to, or become a part of a product or mass with goods that are not
items of Collateral; (iii) constituting goods that are or become fixtures
(except for fixtures located on real property portions of the Texas Mortgaged
Properties); (iv) constituting accounts that are due from the United States or
any State of the United States or any agency or department of the United States
or any State; (v) consisting of consumer goods, equipment used in farming
operations, farm products, crops, timber, minerals and the like (minerals that
are part of the Texas Mortgaged Properties are covered by the Texas Mortgages
as heretofore stated) or accounts or general intangibles resulting from the
sale thereof, beneficial interests in a trust or a decedent's estate and
letters of credit, policies of insurance, and deposit accounts; and (vi) as to
which the perfection of a security interest in such Collateral is, pursuant to
Section 9-103 of the applicable version of the UCC, governed by the law of a
jurisdiction other than Texas and the Subject States. We also express no
opinion with respect to the enforceability of certain provisions of the
Mortgages to the extent that, pursuant to conflicts of law principles applied
in the State of New York, the laws of a jurisdiction other than New York or (as
set forth in paragraphs 15 and 16 above) Texas mandatorily govern the
enforceability of such provisions.
(d) In rendering our opinions set forth in paragraph 12 above with
respect to adverse claims, we have assumed with your permission and without
independent verification that the Collateral Agent and the Secured Creditors
are bona fide purchasers as defined in Section 8-302 of the New York UCC.
(e) In rendering our opinion set forth in paragraph 11 above with
respect to the Uniform Commercial Code as enacted and in effect in the Subject
States, we have assumed, with your permission and without verification, that
the judicial interpretations of the pertinent provisions of the Uniform
Commercial Code of such Subject States are identical in all material respects
to the judicial interpretations of the Texas courts with respect to the Texas
UCC.
(f) As to matters with respect to which our opinion is stated to
be "to our knowledge" or words of similar effect, we have not undertaken any
independent examination of facts, but have based our opinion in sole reliance
upon the Officers' Certificates and upon matters of which the attorneys in our
Firm who have devoted time to this matter have current actual knowledge.
143
EXHIBIT E
Bankers Trust Company, as Agent
November 27, 1996
Page 9
(g) We express no opinion with respect to the following provisions
to the extent that same are contained in the Documents:
(i) provisions purporting to waive rights to notices,
objects, demands, legal defenses, statutes of limitation, rights of trial by
jury, or other benefits or rights that cannot be waived under applicable law;
(ii) provisions purporting to affect the jurisdiction or
venue of courts;
(iii) provisions granting to the Collateral Agent or any
Secured Creditor powers of attorney or authority to execute the documents or to
act by power of attorney on behalf of any Credit Party;
(iv) provisions purporting to provide remedies
inconsistent with the applicable version of the UCC, to the extent that the UCC
is applicable thereto and to the extent that such remedies may not be altered
by the consent of the parties pursuant to the provisions of the UCC;
(v) provisions releasing, exculpating or exempting a
party from, or requiring indemnification of a party for, liability for its own
gross negligence or willful misconduct;
(vi) provisions purporting to establish evidentiary
standards for suits or proceedings to enforce the Documents;
(vii) provisions related to rights of subrogation, offset,
and liquidated damages; and
(viii) provisions that decisions by a party are conclusive.
(h) We have not been called upon to, and accordingly do not,
express any opinion as to various state and federal laws regulating banks or
the conduct of their business that may relate to the Documents or the
transactions contemplated thereby. Without limiting the generality of the
foregoing, we express no opinion as to the effect of the law of any
jurisdiction other than the State of New York wherein any bank may be located
or where an enforcement of the Documents may be sought that limits the rates of
interest legally chargeable or collectible.
(i) In rendering our opinions set forth above with respect to
those Subsidiary Guarantors incorporated in the State of Connecticut
(collectively, the "Connecticut Subsidiaries") we have relied with your
permission and without independent verification upon the opinion addressed to
you dated today of Roberta S. Schwartz with respect to the following matters:
(i) the due organization, valid existence and good
standing of each Connecticut Subsidiary under the laws of the State of
Connecticut, and the corporate power and authority of each
144
EXHIBIT E
Bankers Trust Company, as Agent
November 27, 1996
Page 10
Connecticut Subsidiary to own its properties and assets and to transact the
business in which it is engaged and presently proposes to engage;
(ii) the qualification and good standing of the
Connecticut Subsidiaries in each jurisdiction in which such qualification is
necessary;
(iii) the corporate power and authority of each Connecticut
Subsidiary to execute, deliver and perform the terms and provisions of the
Documents to which it is a party and the due authorization of the execution,
delivery and performance by each Connecticut Subsidiary of such Documents by
all necessary corporate action; and
(iv) the due execution and delivery by each Connecticut
Subsidiary of the Documents to which it is a party and such Connecticut
Subsidiary's compliance with the terms and provisions thereof will not violate
any provision of the certificate of incorporation or by-laws of such
Connecticut Subsidiary.
(j) We have made no examination of, and express no opinion with
respect to, the accuracy or sufficiency of the description of any portion of
the Collateral or the Texas Mortgaged Properties. To the contrary, we have
assumed, without investigation, the accuracy and sufficiency of the
descriptions of all of the Collateral and the Texas Mortgaged Properties. We
have also assumed, with your permission and without investigation, that the
appropriate Credit Party has marketable title to all of the Collateral and good
and indefeasible title to the real property portion of the Texas Mortgaged
Properties.
(k) With respect to any assignment of rents contained in the
Documents, we note that to the extent that any such assignment of rents is
characterized as an assignment for security purposes, under Texas case law such
assignment does not become operative unless or until the Collateral Agent or a
Secured Creditor obtains possession of the real property involved, impounds the
rents, secures the appointment of a receiver, or takes some similar action.
(l) We do not intend by the opinions expressed above with respect
to enforceability to indicate that the due-on-sale and due-on-encumbrance
provisions and other restrictions on transfer contained in the Documents are in
all respects enforceable. In that connection we call your special attention to
Section 9.311 of the Texas Business and Commerce Code with respect to personal
property and to Metropolitan Sav. & Loan Assoc. V. Nabours, 652 S.W.2d 820
(Tex. Civ. App.--Tyler 1983, writ dism'd w.o.j.) and In re Abramoff, 92 B.R.
698 (Bankr. W.D. Tex. 1988) with respect to the real property portion of the
Texas Mortgaged Properties.
(m) Our opinions set forth in paragraphs 17 and 18 above are
subject to the following qualifications. We note that in the event that the
Collateral Agent or any Secured Creditor acquires title to any real or
personal property located in the State of Texas (whether by foreclosure, deed
in lieu of foreclosure, or otherwise), such the Collateral Agent or such
Secured Creditor may be required to qualify to do business in Texas and may be
subject to property taxes and other taxes in
145
EXHIBIT E
Bankers Trust Company, as Agent
November 27, 1996
Page 11
Texas. We further note that an out-of-state bank or trust company is generally
precluded from qualifying to do business in Texas, although a non-bank
subsidiary of such a bank or trust company may so qualify. In addition, in
rendering our opinions set forth in paragraphs 17 and 18 above, we express no
opinion with respect to Texas franchise taxes.
(n) The opinions expressed herein are as of the date hereof only,
and we assume no obligation to update or supplement such opinions to reflect
any fact or circumstance that may hereafter come to our attention or any change
in law that may hereafter occur or become effective.
We are qualified to practice law in the State of Texas and the State
of New York. We do not express any opinion herein concerning the laws of any
jurisdiction other than the laws of the State of New York, the General
Corporation Law of the State of Delaware and the federal laws of the United
States of America and, as to the matters addressed in paragraphs 1, 2, 3, 4(a),
7 (as to H-R Window), 5, 10, 15, 16, 17 and 18 above and the related
qualifications, the laws of the State of Texas.
This opinion is solely for the benefit of the addresses hereof and may
not be relied upon by any other person, except that it may be relied upon by
any other Person which may subsequently become a Bank or the Agent under the
Credit Agreement.
Very truly yours,
VINSON & ELKINS L.L.P.
146
EXHIBIT E
SCHEDULE I
TO
VINSON & ELKINS L.L.P. OPINION
MORTGAGES
1. Deed of Trust, Security Agreement, Assignment of Leases and Rents, and
Financing Statement executed by Atrium Companies, Inc. in favor of Bankers
Trust Company, as Agent, as Beneficiary, covering properties located in Irving,
Texas and Wylie, Texas
2. Mortgage, Security Agreement, Assignment of Leases and Rents, and
Financing Statement executed by Bishop Manufacturing Company of New England,
Inc. to Bankers Trust Company, as Agent, as Mortgagee covering property located
in Clinton, Massachusetts
147
EXHIBIT E
SCHEDULE II
TO
VINSON & ELKINS L.L.P. OPINION
CAPITALIZATION OF BORROWER AND SUBSIDIARY GUARANTORS
1. Atrium Companies, Inc.
3,000 share of capital stock, par value $0.01, authorized, 100 of
which are issued and outstanding and held of record and owned by
Atrium Corporation.
2. H-R Window Supply, Inc.
100 shares of capital stock, no par value, authorized, issued and
outstanding, all of which are held of record and owned by Atrium
Companies, Inc.
3. Bishop Manufacturing Co. of New York, Inc.
5,000 shares of capital stock, no par value, authorized, 1,000 of
which are issued and outstanding and held of record and owned
beneficially by Atrium Companies, Inc.
4. Vinyl Building Specialties of Connecticut, Inc.
100 shares of capital stock, par value $25.00 per share, authorized,
issued and outstanding, all of which are held of record and owned by
Atrium Companies, Inc.
5. Bishop Manufacturing Company, Incorporated
150 shares of capital stock, no par value, authorized, issued and
outstanding, all of which are held of record and owned by Vinyl
Building Specialties of Connecticut, Inc.
6. Bishop Manufacturing Company of New England, Inc.
5,000 shares of capital stock, no par value, authorized, 1,000 of
which are issued and outstanding and held of record and owned
beneficially by Bishop Manufacturing Company, Incorporated.
148
EXHIBIT E
SCHEDULE III
TO
VINSON & ELKINS L.L.P. OPINION
FILING OFFICES
I. Texas Financing Statements:
Office of the Secretary of State of the State of Texas
II. CCH Financing Statements:
A. Office of the Secretary of State of the State of Arizona
B. Office of the Secretary of State of the State of Connecticut
C. Office of the Secretary of State of the State of Nevada
D. Office of the Secretary of State of the State of New York
E. County Clerk for the County of Nassau, State of New York
149
EXHIBIT F
FORM OF OFFICER'S CERTIFICATE
[NAME OF CREDIT PARTY]
Officers' Certificate
I, the undersigned, [Chairman of the Board/President/Chief
Financial Officer/Vice President/Treasurer] of [NAME OF CREDIT PARTY], a
corporation organized and existing under the laws of the State of [Delaware]
[Texas] [Connecticut] (the "Company"), do hereby certify, as such officer and
not individually, that:
1. This Certificate is furnished pursuant to Section 5.04 of the
Credit Agreement, dated as of November __, 1996, among Atrium Corporation,
Atrium Companies, Inc., the Banks from time to time party thereto and Bankers
Trust Company, as Agent (such Credit Agreement, as in effect on the date of
this Certificate, being herein called the "Credit Agreement"). Unless
otherwise defined herein, capitalized terms used in this Certificate shall have
the meanings set forth in the Credit Agreement.
2. The following named individuals are elected officers of the
Company, each holds the office of the Company set forth opposite his name and
has held such office since __________, 19__.(1/) The signature written opposite
the name and title of each such officer is his correct signature.
Name(2/) Office Signature
_______________ ________________ ____________________
_______________ ________________ ____________________
_______________ ________________ ____________________
_______________ ________________ ____________________
- --------------------
(1/) Insert a date prior to the time of any corporate action relating to the
Credit Agreement or any other Credit Document.
(2/) Include name, office and signature of each officer who will sign any
Credit Document, including the officer who will sign the certification at the
end of this Certificate.
150
EXHIBIT F
Page 2
3. Attached hereto as Exhibit A is a certified copy of the
Certificate of Incorporation of the Company as filed in the Office of the
Secretary of State of the State of [Delaware] [Texas] [Connecticut] on
___________, 19__, together with all amendments thereto adopted through the
date hereof.
4. Attached hereto as Exhibit B is a true and correct copy of
the By-Laws of the Company which were duly adopted, are in full force and
effect on the date hereof.
5. Attached hereto as Exhibit C is a true and correct copy of
resolutions which were duly adopted on __________, 19__ [by unanimous written
consent of the Board of Directors of the Company], and said resolutions have
not been rescinded, amended or modified. Except as attached hereto as Exhibit
C, no resolutions have been adopted by the Board of Directors of the Company
which deal with the execution, delivery or performance of any of the Credit
Documents or any other Documents to which the Company is party.
[6. Attached hereto as Exhibit D are true and correct copies of
all Shareholders' Agreements with respect to the capital stock of Holdings and
its Subsidiaries.
7. Attached hereto as Exhibit E are true and correct copies of
all Management Agreements of Holdings and its Subsidiaries.
8. Attached hereto as Exhibit F are true and correct copies of
all Collective Bargaining Agreements of Holdings and its Subsidiaries.
9. Attached hereto as Exhibit G are true and correct copies of
all Existing Debt Agreements of Holdings and its Subsidiaries.
10. Attached hereto as Exhibit H are true and correct copies of
all Senior Subordinated Note Documents.
11. Attached hereto as Exhibit I are true and correct copies of
all Tax Sharing Agreements.
151
EXHIBIT F
Page 3
12. Attached hereto as Exhibit J are true and correct copies of
the Recapitalization Documents.](3/)
[6. On the date hereof, all of the conditions in Sections 5.06,
5.07, 5.14, 5.15, 5.16, and 6.01 of the Credit Agreement have been satisfied
(except to the extent that any such condition is required to be satisfactory to
or determined by any Bank, the Required Banks and/or the Agent).](4/)
[7.][13.] On the date hereof, the representations and warranties
contained in the Credit Agreement and in the other Credit Documents to which
the Company is a party are true and correct in all material respects, both
before and after giving effect to each Credit Event to occur on the date hereof
and the application of the proceeds thereof (it being understood and agreed
that any representation or warranty which by its terms is made as of a
specified date shall be required to be true and correct in all material
respects only as of such specified date).
[8.][14.] On the date hereof, no Default or Event of Default has
occurred and is continuing under any Credit Document to which the Company is a
party or would result from the Credit Events to occur on the date hereof or
from the application of the proceeds thereof.
[9.][15.] There is no proceeding for the dissolution or
liquidation of the Company or, to the knowledge of the Company, threatening its
existence.
IN WITNESS WHEREOF, the undersigned has duly executed and
delivered this Officer's Certificate on this ___ day of __________, 1996.
[NAME OF CREDIT PARTY]
-------------------------------
Name:
Title:
- --------------------
(3/) Insert bracketed items 6 through 12 in the Certificate delivered by
Holdings only.
(4/) Insert bracketed item 6 in the Certificate delivered by the Borrower only.
152
EXHIBIT F
Page 4
[NAME OF CREDIT PARTY]
I, the undersigned, [Secretary/Assistant Secretary] of the Company, do hereby
certify, as such officer and not individually, that:
1. [Name of Person making above certifications] is the duly
elected and qualified [President/Chief Financial Officer/Vice
President/Treasurer] of the Company and the signature above is his genuine
signature.
2. The certifications made by [name of Person making above
certifications] in Items 2, 3, 4, 5 and [9] [16] above are true and correct.
IN WITNESS WHEREOF, the undersigned has duly executed and
delivered this Secretary's Certificate on this _____ day of _________, 1996.
[NAME OF CREDIT PARTY]
------------------------------
Name:
Title:
153
EXHIBIT G
FORM OF ENVIRONMENTAL INDEMNITY AGREEMENT
This ENVIRONMENTAL INDEMNITY AGREEMENT, dated as of November __,
1996 (this "Agreement"), is made by each of the undersigned (each individually
referred to herein as an "Indemnitor" and collectively as the "Indemnitors"),
in favor of BANKERS TRUST COMPANY, or any successor Agent (the "Agent"), for
the benefit of the Banks, and their respective successors, assigns and
participants, any purchaser of any Real Property owned or operated by Holdings
or any of its Subsidiaries at any foreclosure sale, any recipient of a deed or
assignment in lieu of foreclosure of any such Real Property, and each and all
of their respective successors, assigns, parents, subsidiaries and affiliated
entities, and the respective directors, officers, shareholders, agents,
attorneys and employees of each of the foregoing (hereinafter referred to
individually as an "Indemnified Party" and collectively, as the "Indemnified
Parties"). Unless otherwise defined herein or unless the context clearly
requires otherwise, initially capitalized terms used herein without definition
shall have the meanings assigned to such terms in the Credit Agreement, dated
as of November __, 1996, among the Atrium Corporation ("Holdings"), Atrium
Companies, Inc. (the "Borrower"), the Banks party thereto from time to time and
the Agent (as amended, restated, supplemented or otherwise modified from time
to time, the "Credit Agreement").
W I T N E S S E T H :
WHEREAS, the Banks contemplate making one or more Loans and the
issuance of and participation in, one or more Letters of Credit pursuant to the
terms and conditions set forth in the Credit Agreement;
WHEREAS, each Loan and the reimbursement obligations
("Reimbursement Obligations") with respect to each Letter of Credit may be
secured by, among other security, real property, including improvements and
fixtures thereon, owned or operated by Holdings or any of its Subsidiaries
pursuant to the Mortgages executed by Holdings and/or any of its Subsidiaries,
as trustor or mortgagor, for the benefit of the Agent, acting in its capacity
as Collateral Agent as beneficiary or mortgagee, which Mortgages encumber
Holdings' or any of its Subsidiaries' fee simple or leasehold interests in
certain real property, now owned or hereafter acquired, and the improvements
and fixtures thereon pursuant to the terms of the Credit Agreement, as more
particularly described therein (the "Mortgaged Real Property"), all such other
fee simple or leasehold interests in real property of Holdings or any
Subsidiary, now owned or hereafter acquired and improvements and
154
EXHIBIT G
Page 2
fixtures thereon not subject to the Mortgages (the "Other Real Property") (the
Mortgaged Real Property and the Other Real Property collectively, the "Real
Property"). The term "Real Property" as used herein shall include the
groundwater, surface water, soil, airspace at, in, on, under or adjacent to
such Real Property;
WHEREAS, as a result of the exercise of the Banks' rights and
remedies in connection with any Loan or Letter of Credit, an Indemnified Party
may hereafter become the owner of all or a portion of the Real Property
pursuant to a judicial or nonjudicial foreclosure or by deed in lieu of
foreclosure;
WHEREAS, it is possible that after payment in full of any Loan or
Reimbursement Obligations, one or more of the Indemnified Parties may be joined
or named as a party to litigation or an administrative proceeding, or have
other Environmental Claims brought against it, and as a result, one or more of
the Indemnified Parties may incur or suffer certain liabilities, costs and
expenses in connection with all or a portion of the Real Property relating to
Hazardous Materials; and
WHEREAS, as a condition of the agreement of the Banks to accept
Holdings' or any of its Subsidiaries' fee simple or leasehold interests in the
Mortgaged Real Property as security for any Loan or Letter of Credit (the
granting of such security with this accompanying Agreement being a condition to
the Banks' obligation to make any Loan or issue any Letter of Credit in the
amount and with the terms as set forth in the Credit Agreement and with respect
to Holdings' or any of its Subsidiaries' fee simple or leasehold interests in
any Other Real Property), the Indemnitors are required to, and the Indemnitors
have agreed to, execute and deliver this Agreement to the Banks.
NOW, THEREFORE, in order to induce the Banks to accept the Real
Property as security for the Loans and issue such Letters of Credit and to,
accordingly, enter into such Loans and issue such Letters of Credit, and in
consideration of the foregoing and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Indemnitors
agree for the benefit of the Indemnified Parties as follows:
1. Defined Terms.
For purposes of this Agreement, the following definitions shall
apply:
"Agent" shall have the meaning set forth in the introductory
paragraph of this Agreement.
155
EXHIBIT G
Page 3
"Agreement" shall mean this Environmental Indemnity Agreement, as
amended, restated, supplemented or otherwise modified from time to time.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time
to time, 42 U.S.C. Section 9601 et seq.
"Credit Agreement" shall have the meaning set forth in the
introductory paragraph to this Agreement.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, notices of noncompliance or violation, investigations or
proceedings relating in any way to any Environmental Law or any permit issued,
or any approval given, under any such Environmental Law (hereafter, "Claims"),
including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and (b)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief in connection
with alleged injury or threat of injury to health, safety or the environment
due to the presence of Hazardous Materials.
"Environmental Law" shall mean any applicable Federal, state,
foreign or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline or written policy, and any rule of common law, in the
case of each of the foregoing now or hereafter in effect and in each case as
amended, and any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent decree or judgment, to the extent
such order, decree or judgment is binding on Holdings, the Borrower or any of
their respective Subsidiaries, relating to the environment, employee health and
safety or Hazardous Materials, including, without limitation, CERCLA; RCRA; the
Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq.; the Toxic
Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Clean Air Act, 42
U.S.C. Section 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section
3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.;
the Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C.
Section 11001 et seq., the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801 et seq. and the Occupational Safety and Health Act, 29 U.S.C.
Section 651 et seq. (to the extent it regulates occupational exposure to
Hazardous Materials); and any state or local counterparts or equivalents, in
each case as amended from time to time.
"Hazardous Materials" shall mean (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam
156
EXHIBIT G
Page 4
insulation, transformers or other equipment that contain dielectric fluid
containing levels of polychlorinated biphenyls, and radon gas; and (b) any
chemicals, materials or substances defined as or included in the definition of
"hazardous substances," "hazardous waste," "hazardous materials," "extremely
hazardous substances," "restricted hazardous waste," "toxic substances," "toxic
pollutants," "contaminants," or "pollutants," or words of similar import, under
any applicable Environmental Law.
"Indemnified Matters" shall have the meaning set forth in Section
4.
"Indemnified Obligations" shall have the meaning set forth in
Section 6.
"Indemnified Party" and "Indemnified Parties" shall have the
meaning set forth in the introductory paragraph of this Agreement.
"Indemnitor" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"Mortgaged Real Property" shall have the meaning set forth in the
recitals to this Agreement.
"Other Parties" shall have the meaning set forth in Section 6.
"Other Real Property" shall have the meaning set forth in the
recitals to this Agreement.
"RCRA" shall mean the Resource Conservation and Recovery Act, as
the same may be amended from time to time, 42 U.S.C. Section 6901 et seq.
"Real Property" shall have the meaning set forth in the recitals
to this Agreement.
"Release" shall mean any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
disposing or migration into the environment.
2. Representations and Warranties. Each of the Indemnitors
hereby jointly and severally represents and warrants to the Banks that on the
date hereof and on the date of the making of each Revolving Loan and issuance
of each Letter of Credit:
157
EXHIBIT G
Page 5
2.1 Holdings, the Borrower and each of their respective
Subsidiaries has complied in all material respects with, and on the date of
each Credit Event will be in material compliance with, all applicable
Environmental Laws and the requirements of any permits issued under such
Environmental Laws. There are no pending, past or threatened Environmental
Claims against Holdings, the Borrower or any of their respective Subsidiaries
or any Real Property owned or operated by Holdings, the Borrower or any of
their respective Subsidiaries. There are no facts, circumstances, conditions
or occurrences concerning the operations of Holdings, the Borrower or any of
their Subsidiaries (including disposal or transportation of Hazardous
Substances) or concerning any Real Property owned or operated by Holdings, the
Borrower or any of their respective Subsidiaries or, on any property adjoining
or in the vicinity of any such Real Property that could reasonably be expected
(a) to form the basis of an Environmental Claim against Holdings, the Borrower
or any of their respective Subsidiaries or any such Real Property, or (b) to
cause any such Real Property to be subject to any restrictions on the
ownership, occupancy, use or transferability of such Real Property by Holdings,
the Borrower or any of their respective Subsidiaries under any applicable
Environmental Law.
2.2 Hazardous Materials have not at any time been generated,
used, treated or stored on, or transported to or from, any Real Property owned
or operated by Holdings, the Borrower or any of their respective Subsidiaries
where such generation, use, treatment or storage has violated or could
reasonably be expected to violate any Environmental Law or could reasonably be
expected to result in an Environmental Claim. Hazardous Materials have not at
any time been Released on or from any Real Property owned or operated by
Holdings, the Borrower or any of their respective Subsidiaries where such
Release has violated or could reasonably be expected to violate any applicable
Environmental Law or could reasonably be expected to result in an Environmental
Claim. Except as disclosed on Schedule 1 hereto, no underground storage tanks
are located on any Real Property owned or operated by Holdings, the Borrower or
any of their respective Subsidiaries.
2.3 Notwithstanding anything to the contrary in this Section
2, the representations and warranties made in this Section 2 shall only be
untrue if the aggregate effect of all failures, violations and noncompliances
of the types described above could reasonably be expected to have a Material
Adverse Effect.
3. Covenants. Each Indemnitor hereby jointly and severally
covenants and agrees that:
3.1 Promptly upon, and in any event within ten (10) Business
Days after, an officer of Holdings, the Borrower or any of their respective
Subsidiaries obtains knowledge thereof, it
158
EXHIBIT G
Page 6
will furnish to the Agent notice of the following environmental matters, unless
such environmental matters could not, individually or when aggregated with all
other such environmental matters, be reasonably expected to have a Material
Adverse Effect:
(a) any pending or threatened Environmental Claim against
Holdings or any of its Subsidiaries or any Real Property owned or
operated by Holdings, the Borrower or any of their respective
Subsidiaries;
(b) any condition or occurrence on or arising from any Real
Property owned or operated by Holdings, the Borrower or any respective
Subsidiaries that (i) results in noncompliance by Holdings, the Borrower
or any of their Subsidiaries with any applicable Environmental Law or
(ii) could reasonably be expected to form the basis of an Environmental
Claim against Holdings, the Borrower or any of their respective
Subsidiaries, any Indemnified Party or any such Real Property;
(c) any condition or occurrence on any Real Property owned or
operated by Holdings, the Borrower or any of their respective
Subsidiaries that could reasonably be expected to cause such Real
Property to be subject to any restrictions on the ownership, occupancy,
use or transferability by Holdings, the Borrower or any of their
respective Subsidiaries of such Real Property under any Environmental
Law; and
(d) the taking of any removal or remedial action in response to
the actual or alleged presence of any Hazardous Material on any Real
Property owned or operated by Holdings, the Borrower or any of their
respective Subsidiaries as required by any Environmental Law or any
governmental or other administrative agency; provided that in any event
Holdings, and the Borrower shall deliver to each Bank all notices
received by it or any of their respective Subsidiaries from any
government or governmental agency under, or pursuant to, CERCLA.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and
Holdings', the Borrower's or such Subsidiary's response thereto. In addition,
the Borrower will provide the Banks with copies of all material communications
with any government or governmental agency relating to Environmental Laws, all
communications with any Person (other than its attorneys) relating to
Environmental Claims, and such detailed reports of any Environmental Claim as
may reasonably be requested by the Banks.
159
EXHIBIT G
Page 7
3.2 Holdings, and the Borrower will comply, and will cause
each of their respective Subsidiaries to comply, in all material respects with
all Environmental Laws applicable to the ownership or use of any or all of the
Real Property now or hereafter owned or operated by Holdings, the Borrower or
any of their respective Subsidiaries, will promptly pay or cause to be paid all
costs and expenses incurred in connection with such compliance, and will keep
or cause to be kept all such Real Property free and clear of any Liens imposed
pursuant to such Environmental Laws. None of Holdings, the Borrower or any of
their respective Subsidiaries will generate, use, treat, store, release or
dispose of, or permit the generation, use, treatment, storage, release or
disposal of Hazardous Materials on any Real Property now or hereafter owned or
operated by Holdings, the Borrower or any of their respective Subsidiaries, or
transport or permit the transportation of Hazardous Materials to or from any
such Real Property except for Hazardous Materials used or stored at any such
Real Properties in material compliance with all applicable Environmental Laws
and reasonably required in connection with the operation, use and maintenance
of any such Real Property, and so as not to give rise to a material
Environmental Claim.
3.3 At the written request of the Agent or the Required Banks,
at any time and from time to time, the Borrower will provide, at the Borrower's
sole cost and expense, an environmental site assessment report concerning any
Real Property now or hereafter owned or operated by Holdings, the Borrower or
any of their respective Subsidiaries, prepared by an environmental consulting
firm chosen by the Borrower and approved by the Agent provided that such
approval may not be unreasonably withheld, indicating the presence or absence
of Hazardous Materials and the potential cost of any required removal or
remedial action in connection with any Hazardous Materials on such Real
Property; provided, that such request may be made only if (a) there has
occurred and is continuing an Event of Default, (b) the Agent reasonably
believes that Holdings, the Borrower or any such Real Property is not in
material compliance with an applicable Environmental Law, or (c) circumstances
exist that reasonably could be expected to form the basis of an Environmental
Claim against Holdings, the Borrower or any such Real Property which could have
a Material Adverse Effect. If the Borrower fails to provide the same within 90
days after such request was made, the Agent may order the same, and the
Borrower shall grant and hereby grants to the Agent and the Banks and their
agents access to such Real Property and specifically grants the Agent and the
Banks an irrevocable non-exclusive license, subject to the rights of tenants,
to undertake such an assessment, all at the Borrower's expense.
160
EXHIBIT G
Page 8
3.4 Indemnitors' Remedial Action.
(a) The Indemnitors shall, and shall cause each of their
Subsidiaries to, conduct any investigation, study, sampling and testing,
and undertake any cleanup, removal, remedial or other action necessary
to remove and clean up all Hazardous Materials from the Real Property in
accordance with the requirements of all applicable Environmental Laws,
and in accordance with the orders or directives of any governmental
authority.
(b) Notwithstanding anything to the contrary in subparagraph
(a) hereof, the Indemnitors shall, and shall cause each of their
Subsidiaries to, conduct any investigation, study, sampling and testing,
and undertake any cleanup, removal, remedial or other action necessary
to remove and clean up to the reasonable satisfaction of the Agent or
the Required Banks all Hazardous Materials from the Real Property that
may materially adversely affect the value of the Real Property, whether
or not such action is required by any Environmental Laws.
(c) In the event that any of the Real Property is now or at
any time in the future included on any list compiled by the United
States or any state or political subdivision of properties affected by
(i) Hazardous Materials or (ii) other environmental hazards, the
Indemnitors shall, and shall cause each of their Subsidiaries to, use
their best efforts to remove the Real Property from such list.
3.5 Use of the Real Property. The Indemnitors shall not, and
shall not permit any of their Subsidiaries to, change or permit to be changed
the use of the Real Property unless (a) such change is permitted by the Credit
Documents and undertaken in accordance with the Credit Agreement and (b) the
Indemnitors shall have notified each Bank thereof in writing that such change
will not result in the presence of Hazardous Materials at or on any of the Real
Property which could reasonably be expected to have a material adverse effect
on the value of the Real Property.
4. Indemnification. Each Indemnitor shall, on a joint and
several basis: (a) pay all reasonable out-of-pocket costs and expenses of the
Agent and the Banks (including, without limitation, reasonable attorneys' fees
and disbursements) in connection with the preparation, execution, delivery,
performance and enforcement of this Agreement and any amendment, and (b)
indemnify and pay and hold each of the Indemnified Parties harmless from and
against any and all liabilities, obligations (including removal or remedial
actions), losses, damages, penalties, claims, actions, judgments, suits, costs,
expenses and disbursements (including reasonable attorneys' and consultants'
fees and disbursements) incurred by, imposed on or assessed against any of them
as a result of, or
161
EXHIBIT G
Page 9
arising out of, or in any way related to, or by reason of, the exercise of any
of their rights or remedies provided herein, or the actual or alleged presence
of Hazardous Materials in the air, surface water or groundwater or on or under
the surface or subsurface of any Real Property, the generation, storage,
transportation, handling or disposal of Hazardous Materials by the Borrower,
Holdings or their respective Subsidiaries at any location, whether or not owned
or operated by Holdings, the Borrower or any of their respective Subsidiaries,
the non-compliance of any Real Property with federal, state and local laws,
regulations and ordinances (including applicable permits thereunder) applicable
to any Real Property, or any Environmental Claim asserted against or relating
to Holdings, the Borrower, any of their respective Subsidiaries or any of their
operations or any Real Property, (collectively, "Indemnified Matters");
provided, however, that the Indemnitors shall have no obligation under this
Agreement to any Indemnitee with respect to (i) any Indemnified Matter caused
by or resulting from the gross negligence or willful misconduct of any
Indemnitee or (ii) any Hazardous Materials that are first manufactured,
emitted, generated, treated, Released, stored, or disposed on the Real
Property, or any violation of Environmental Law, that first occurred on or with
respect to the Real Property after all Loans and any Unpaid Drawings are repaid
and all Letters of Credit terminated and/or the Real Property is transferred to
the Banks or their successors by foreclosure sale, deed in lieu of foreclosure,
or similar transfer except to the extent such manufacture, emission, Release,
generation, treatment, storage or disposal or violation is actually caused by
Indemnitors. To the extent that the undertaking to indemnify, pay or hold
harmless any Indemnified Party set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the
Indemnitors shall make the maximum contribution to the payment and satisfaction
of each of the indemnified liabilities which is permissible under applicable
law.
5. Rights and Remedies. Nothing in this Agreement shall be
construed to limit any claim or right which any Indemnified Party may otherwise
have at any time against any Indemnitor or any other person or entity arising
from any source other than this Agreement, including any claim for fraud,
misrepresentation, waste, or breach of contract other than this Agreement, and
any rights of contribution or indemnity under any Environmental Laws or other
applicable law, regulation or ordinance. All remedies of each Indemnified
Party against each Indemnitor are cumulative.
6. Waivers and Subrogation.
(a) Each Indemnitor waives any right (except as shall be
required by applicable statute and cannot be waived) to require the
Indemnified Parties to (i) proceed against any other person or entity,
(ii) proceed against or exhaust any security (iii) pursue any other
remedy in the Indemnified Parties' power whatsoever. Each Indemnitor
waives any defense it otherwise may have against any Indemnified Party
based on or arising out of any defense
162
EXHIBIT G
Page 10
of any other person or entity other than payment in full of the
obligations otherwise arising hereunder (the "Indemnified Obligations"),
including, without limitation any defense based on or arising out of the
disability of any other person, or the unenforceability of the
Indemnified Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of any other person or entity
other than full performance of the Indemnified Obligations. The
Required Banks, at their election, may foreclose on any security held by
them by one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable law), or exercise any other right or
remedy it may have against any other person or entity, or any security,
without affecting or impairing in any way the liability of any
Indemnitor hereunder except to the extent the Indemnified Obligations
have been fully performed. Each Indemnitor waives any defense arising
out of any such election by the Required Banks, even though such
election operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of such Indemnitor against any
other person or entity or any security.
(b) Each Indemnitor hereby waives all rights of subrogation
which it may at any time otherwise have as a result of this Agreement
(whether contractual, under Section 509 of the United States Bankruptcy
Code, or otherwise) to the claims of any other Indemnitor (collectively,
the "Other Parties"), all contractual, statutory or common law rights of
reimbursement, contribution or indemnity from any Other Parties which it
may at any time otherwise have as a result of this Agreement and all
other rights such Indemnitor may have against any Other Parties for
Environmental Claims until such time that the Indemnified Obligations
and the Obligations have been indefeasibly paid in full.
7. Survival. The indemnities and covenants hereunder shall be
continuing and shall survive as unsecured rights and obligations: (a) the
payment in full of all indebtedness and the full performance of all obligations
under the Credit Agreement and the other Credit Documents; (b) the surrender of
any Note, the reconveyance of any Mortgage and/or the release of any other
security for any Loan; (c) the foreclosure of any other security for any Loan;
(d) the extinguishment of any Mortgage by any means, including deed or
assignment in lieu of foreclosure; (e) any election by any Indemnified Party to
purchase any Real Property by crediting all or any portion of the indebtedness
secured by any Mortgage against the purchase price therefor; (f) the
acquisition of any Real Property by any of the Indemnified Parties; and (g) the
transfer of any of the Banks' rights in the Credit Agreement and/or any Real
Property. No assignment or transfer, in whole or in part, of all or any Real
Property or any Indemnitors' benefits, rights, duties or obligations hereunder,
shall operate to release the liability of the Indemnitors hereunder except with
an express prior written consent of the
163
EXHIBIT G
Page 11
Required Banks. The Indemnitors' obligations under this Agreement shall not be
diminished or affected in any respect as a result of any notice, disclosure or
knowledge, if any, to or by any of the Indemnified Parties of the Release,
presence, existence or threatened Release of Hazardous Materials at, in, on,
around or affecting any Real Property. No Indemnified Party shall be deemed to
have permitted, caused, contributed to or acquiesced in any such Release,
presence, existence or threatened Release of Hazardous Materials at, in, on,
around or affecting any Real Property solely because such Indemnified Party had
notice or knowledge thereof or because such Indemnified Party failed to
exercise any right contained in this Agreement.
8. Unsecured Recourse Obligations. All rights of the
Indemnified Parties and obligations of the Indemnitors hereunder are and shall
be, and shall be deemed to be for all purposes, unsecured and shall not
constitute obligations secured by any Mortgage. Any sums payable or recovered
hereunder by any person or entity are not intended to be, and shall not be or
be deemed to constitute, a deficiency after foreclosure or trustee's sale under
any Mortgage.
9. Application of Payments. The Indemnitors hereby
acknowledge and agree that any amounts realized by any Indemnified Party by
reason of any payments made pursuant to any Credit Document, the foreclosure of
any Mortgage or other security for any Loan (including any amounts realized by
reason of any credit bid in connection with any such foreclosure), any
conveyance in lieu of foreclosure, any other realization upon any security for
any Loan, any recoveries against an Indemnitor personally (except in each case
for recoveries against an Indemnitor under this Agreement), and any recoveries
against any person or entity other than an Indemnitor (including any
guarantor), shall, to the maximum extent permitted by applicable law, be
applied to pay the obligations under the Credit Agreement and the other Credit
Documents prior to being applied to pay obligations of the Indemnitors arising
under this Agreement.
10. Severability. Wherever possible, each term, covenant,
condition and provision of this Agreement shall be interpreted in such a manner
as to be valid and enforceable to the fullest extent permitted by law. If any
term, covenant, condition or provision of this Agreement, or the application of
any such term, covenant, condition or provision to any person, entity or
circumstance, shall, to any extent, be held to be invalid, illegal or
unenforceable under applicable law, the remainder of this Agreement, or the
application of such term, covenant, condition or provision to persons, entities
or circumstances other than those as to which it is invalid, illegal or
unenforceable, shall not be affected thereby.
11. Notices. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including telecopier communication)
164
EXHIBIT G
Page 12
and mailed, telecopied or delivered: if to Holdings, at Holdings' address
specified opposite its signature below; if to the Borrower, at the Borrower's
address specified opposite its signature below; if to any other Indemnitor
party hereto, at such Indemnitor's address specified opposite its signature
below; if to any Bank, at its address specified opposite its name on Schedule 2
below; and if to the Agent, at its Notice Office; or, as to any Credit Party or
the Agent, at such other address as shall be designated by such party in a
written notice to the other parties hereto and, as to each Bank, at such other
address as shall be designated by such Bank in a written notice to the Borrower
and the Agent. All such notices and communications shall, when mailed,
telecopied, or sent by overnight courier, be effective when deposited in the
mails, delivered to the overnight courier, or sent by telecopier, except that
notices and communications to the Agent and the Borrower shall not be effective
until received by the Agent or the Borrower, as the case may be.
12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
13. Section Titles. The section titles contained in this
Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning or interpretation of any provision of this
Agreement.
14. Counterparts; Effectiveness. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original, but all of which shall constitute one and the same instrument. This
Agreement shall first become effective when each Indemnitor shall have executed
and delivered to the Agent an executed counterpart hereof.
15. Waiver of Right to Trial by Jury. To facilitate each
party's desire to resolve disputes in an efficient and economical manner, each
party to this Agreement hereby expressly waives any right to trial by jury of
any claim, demand, action or cause of action (a) arising under this Agreement,
or (b) in any way connected with or related or incidental to the dealings of
the parties hereto or any of them with respect to this Agreement, or the
transactions related hereto or thereto, in each case whether now existing or
hereafter arising, and whether arising in contract or tort or otherwise. Each
party hereby agrees and consents that any such claim, demand, action or cause
of action shall be decided by court trial without a jury, and that any party to
this Agreement may file an original counterpart or a copy of this Section with
any court as written evidence of the consent of the parties hereto to the
waiver of their right to trial by jury.
165
EXHIBIT G
Page 13
16. Modification and Waiver. This Agreement may not be amended,
revised, waived, discharged, released or terminated orally but only by a
written instrument or instruments executed by the party against which
enforcement of the amendment, revision, waiver, discharge, release or
termination is asserted. Any alleged amendment, revision, waiver, discharge,
release or termination which is not so documented shall not be effective as to
any party. No failure or delay on the part of the Banks or any other
Indemnified Party in exercising any right, power or privilege hereunder and no
course of dealing between any Indemnitor and any Bank or any Indemnified Party
shall operate as a waiver thereof; nor shall any single or partial exercise of
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
17. Construction. Unless the context of this Agreement
otherwise clearly requires, references to the plural include the singular and
the singular the plural, and "or" has the inclusive meaning represented by the
phrase "and/or". The words "hereof," "herein," "hereunder" and similar terms in
this Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement.
18. Successive Actions. Separate and successive actions may
be brought hereunder to enforce the provisions hereof at any time and from time
to time. Each Indemnitor hereby waives any defense they may have regarding the
splitting of a cause of action or based upon the defense of res judicata, and
each indemnitor hereby jointly and severally covenants not to raise SUCH
DEFENSES.
166
EXHIBIT G
Page 14
IN WITNESS WHEREOF, each Indemnitor has caused its duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
- -------
9001 Ambassador Row ATRIUM CORPORATION
Dallas, TX 75247
Attn: Randall Fojtasek
Telephone: (214) 634-0836
Telecopy: (214) 631-4231 By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
with a copy to:
Hicks, Muse, Tate & Furst
Incorporated
200 Crescent Court
Suite 1600
Dallas, Texas 75201
Attn: Thomas O. Hicks,
John R. Muse,
Jack D. Furst and
Lawrence D. Stuart, Jr.
Telephone: (214) 740-7300
Telecopy: (214) 740-7313
and
Hicks, Muse, Tate & Furst
Incorporated
1325 Avenue of the Americas
25th Floor
New York, New York 10019
Attn: Mr Charles W. Tate
Telephone: (212) 424-1400
Telecopy: (212) 424-1450
167
EXHIBIT G
Page 15
9001 Ambassador Row ATRIUM COMPANIES, INC.
Dallas, TX 75247
Attn: Randall Fojtasek
Telephone: (214) 634-0836
Telecopy: (214) 631-4231 By:
-----------------------------
Name:
---------------------------
with a copy to: Title:
--------------------------
Hicks, Muse, Tate & Furst
Incorporated
200 Crescent Court
Suite 1600
Dallas, Texas 75201
Attn: Thomas O. Hicks,
John R. Muse,
Jack D. Furst and
Lawrence D. Stuart, Jr.
Telephone: (214) 740-7300
Telecopy: (214) 740-7313
and
Hicks, Muse, Tate & Furst
Incorporated
1325 Avenue of the Americas
25th Floor
New York, New York 10019
Attn: Mr Charles W. Tate
Telephone: (212) 424-1400
Telecopy: (212) 424-1450
168
EXHIBIT H
Page 16
9001 Ambassador Row H-R WINDOW SUPPLY COMPANY, INC.
Dallas, TX 75247
Attn: Randall Fojtasek
Telephone: (214) 634-0836
Telecopy: (214) 631-4231 By:
-----------------------------
Name:
---------------------------
with a copy to: Title:
--------------------------
Hicks, Muse, Tate & Furst
Incorporated
200 Crescent Court
Suite 1600
Dallas, Texas 75201
Attn: Thomas O. Hicks,
John R. Muse,
Jack D. Furst and
Lawrence D. Stuart, Jr.
Telephone: (214) 740-7300
Telecopy: (214) 740-7313
and
Hicks, Muse, Tate & Furst
Incorporated
1325 Avenue of the Americas
25th Floor
New York, New York 10019
Attn: Mr Charles W. Tate
Telephone: (212) 424-1400
Telecopy: (212) 424-1450
169
EXHIBIT G
Page 17
9001 Ambassador Row VINYL BUILDING SPECIALTIES
Dallas, TX 75247 OF CONNECTICUT, INC.
Attn: Randall Fojtasek
Telephone: (214) 634-0836
Telecopy: (214) 631-4231 By:
-----------------------------
Name:
---------------------------
with a copy to: Title:
--------------------------
Hicks, Muse, Tate & Furst
Incorporated
200 Crescent Court
Suite 1600
Dallas, Texas 75201
Attn: Thomas O. Hicks,
John R. Muse,
Jack D. Furst and
Lawrence D. Stuart, Jr.
Telephone: (214) 740-7300
Telecopy: (214) 740-7313
and
Hicks, Muse, Tate & Furst
Incorporated
1325 Avenue of the Americas
25th Floor
New York, New York 10019
Attn: Mr Charles W. Tate
Telephone: (212) 424-1400
Telecopy: (212) 424-1450
170
EXHIBIT G
Page 18
9001 Ambassador Row BISHOP MANUFACTURING CO.
Dallas, TX 75247 OF NEW YORK, INC.
Attn: Randall Fojtasek
Telephone: (214) 634-0836
Telecopy: (214) 631-4231 By:
-----------------------------
Name:
---------------------------
with a copy to: Title:
--------------------------
Hicks, Muse, Tate & Furst
Incorporated
200 Crescent Court
Suite 1600
Dallas, Texas 75201
Attn: Thomas O. Hicks,
John R. Muse,
Jack D. Furst and
Lawrence D. Stuart, Jr.
Telephone: (214) 740-7300
Telecopy: (214) 740-7313
and
Hicks, Muse, Tate & Furst
Incorporated
1325 Avenue of the Americas
25th Floor
New York, New York 10019
Attn: Mr Charles W. Tate
Telephone: (212) 424-1400
Telecopy: (212) 424-1450
171
EXHIBIT G
Page 19
9001 Ambassador Row BISHOP MANUFACTURING CO., INC.
Dallas, TX 75247
Attn: Randall Fojtasek
Telephone: (214) 634-0836
Telecopy: (214) 631-4231 By:
-----------------------------
Name:
---------------------------
with a copy to: Title:
--------------------------
Hicks, Muse, Tate & Furst
Incorporated
200 Crescent Court
Suite 1600
Dallas, Texas 75201
Attn: Thomas O. Hicks,
John R. Muse,
Jack D. Furst and
Lawrence D. Stuart, Jr.
Telephone: (214) 740-7300
Telecopy: (214) 740-7313
and
Hicks, Muse, Tate & Furst
Incorporated
1325 Avenue of the Americas
25th Floor
New York, New York 10019
Attn: Mr Charles W. Tate
Telephone: (212) 424-1400
Telecopy: (212) 424-1450
172
EXHIBIT G
Page 20
9001 Ambassador Row BISHOP MANUFACTURING CO.
Dallas, TX 75247 OF NEW ENGLAND, INC.
Attn: Randall Fojtasek
Telephone: (214) 634-0836
Telecopy: (214) 631-4231 By:
-----------------------------
Name:
---------------------------
with a copy to: Title:
--------------------------
Hicks, Muse, Tate & Furst
Incorporated
200 Crescent Court
Suite 1600
Dallas, Texas 75201
Attn: Thomas O. Hicks,
John R. Muse,
Jack D. Furst and
Lawrence D. Stuart, Jr.
Telephone: (214) 740-7300
Telecopy: (214) 740-7313
and
Hicks, Muse, Tate & Furst
Incorporated
1325 Avenue of the Americas
25th Floor
New York, New York 10019
Attn: Mr Charles W. Tate
Telephone: (212) 424-1400
Telecopy: (212) 424-1450
173
EXHIBIT G
Page 21
BANKERS TRUST COMPANY,
Individually and as Agent
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
174
SCHEDULE 1
UNDERGROUND STORAGE TANKS
175
SCHEDULE 2
NOTICE ADDRESSES FOR THE BANKS
BANKERS TRUST COMPANY
130 LIBERTY STREET
30TH FLOOR
NEW YORK, NEW YORK 10006
TEL: 212-250-9094
FAX: 212-250-7218
ATTENTION: MARY KAY COYLE
176
EXHIBIT H
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (as amended, restated, supplemented or
otherwise modified from time to time, this "Agreement"), dated as of November
__, 1996, is made by each of the undersigned (each, a "Pledgor" and,
collectively, the "Pledgors"), to BANKERS TRUST COMPANY, as Collateral Agent
(the "Pledgee") for the benefit of (i) the Banks and the Agent under the Credit
Agreement hereinafter referred to (such Banks and the Agent are hereinafter
called the "Bank Creditors") and (ii) if one or more Banks or any Affiliate of
a Bank enters into one or more (A) interest rate protection agreements
(including, without limitation, interest rate swaps, caps, floors, collars and
similar agreements), (B) foreign exchange contracts, currency swap agreements
or other similar agreements or arrangements designed to protect against the
fluctuations in currency values and/or (C) other types of hedging agreements
from time to time (collectively, the "Interest Rate Protection or Other Hedging
Agreements"), with, or guaranteed by, a Pledgor, any such Bank or Banks or
Affiliate or Affiliates (even if the respective Bank subsequently ceases to be
a Bank under the Credit Agreement for any reason) so long as any such Bank or
Affiliate participates in the extension of such Interest Rate Protection or
Other Hedging Agreements and their subsequent assigns, if any (collectively,
the "Other Creditors" and, together with the Bank Creditors, are hereinafter
called the "Secured Creditors"). Except as otherwise defined herein, terms
used herein and defined in the Credit Agreement shall be used herein as so
defined.
W I T N E S S E T H :
WHEREAS, Atrium Corporation, a Delaware corporation ("Holdings"),
Atrium Companies, Inc., a Delaware Corporation (the "Borrower"), the banks (the
"Banks") from time to time party thereto, and Bankers Trust Company, as Agent
(together with any successor agent, the "Agent"), have entered into a Credit
Agreement, dated as of November __, 1996, providing for the making of Loans and
the issuance of, and participation in, Letters of Credit as contemplated
therein (as used herein, the term "Credit Agreement" means the Credit Agreement
described above in this paragraph, as the same may be amended, modified,
extended, renewed, replaced, restated or supplemented from time to time, and
including any agreement extending the maturity of, or restructuring all or any
portion of the Indebtedness under such agreement or any successor agreements);
WHEREAS, pursuant to the Holdings Guaranty, Holdings has
guaranteed to the Secured Creditors the payment when due of all obligations and
liabilities of the Borrower under and in connection with (i) the Credit
Documents and (ii) each Interest Rate Protection or Other Hedging Agreement
with one or more Other Creditors;
WHEREAS, pursuant to the Subsidiary Guaranty, each Pledgor (other
than Holdings and the Borrower) has jointly and severally guaranteed to the
Secured Creditors the payment when
177
EXHIBIT H
Page 2
due of all obligations and liabilities of the Borrower under and in connection
with (i) the Credit Documents and (ii) each Interest Rate Protection or Other
Hedging Agreement with one or more Other Creditors;
WHEREAS, the Pledgors may at any time and from time to time enter
into, or guarantee obligations of their respective Subsidiaries under, one or
more Interest Rate Protection or Other Hedging Agreements with one or more
Other Creditors;
WHEREAS, it is a condition to each of the above-described
extensions of credit that each Pledgor shall have executed and delivered this
Agreement;
WHEREAS, the Pledgor desires to enter into this Agreement in
order to satisfy the condition described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to each
Pledgor, the receipt and sufficiency of which are hereby acknowledged, each
Pledgor hereby makes the following representations and warranties to the
Pledgee for the benefit of the Secured Creditors and hereby covenants and
agrees with the Pledgee for the benefit of the Secured Creditors as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by each
Pledgor for the benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations and
indebtedness (including, without limitation, indemnities, Fees and
interest thereon) of such Pledgor to the Bank Creditors, whether now
existing or hereafter incurred under, arising out of, or in connection
with the Credit Agreement and the other Credit Documents to which such
Pledgor is a party and the due performance and compliance by such
Pledgor with all of the terms, conditions and agreements contained in
the Credit Agreement and the other Credit Documents (all such principal,
interest, obligations and liabilities described in this clause (i) being
herein collectively called the "Credit Agreement Obligations");
(ii) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations and
liabilities owing by such Pledgor to the Other Creditors under, or with
respect to, any Interest Rate Protection or Other Hedging Agreement,
including, in the case of Pledgors other then the Borrower, all
obligations of such Pledgor under its Guaranty in respect of Interest
Rate Protection or Other Hedging Agreement, whether such Interest Rate
Protections or Other Hedging Agreements are now in existence or
hereafter arising, and the due performance and compliance by such
Pledgor with all of the terms, conditions and agreements contained
therein (all such obligations and liabilities described in this clause
(ii) being herein collectively called the "Other Obligations");
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(iii) any and all sums advanced by the Pledgee in order to
preserve the Collateral (as hereinafter defined) or preserve its
security interest in the Collateral;
(iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities referred to
in clauses (i) , (ii) and (iii) above, after an Event of Default (as
such term is defined in the Security Agreement) shall have occurred and
be continuing, the reasonable expenses of retaking, holding, preparing
for sale or lease, selling or otherwise disposing of or realizing on the
Collateral, or of any exercise by the Pledgee of its rights hereunder,
together with reasonable attorneys' fees and court costs; and
(v) all amounts paid by any Secured Creditor as to which such Secured
Creditor has the right to reimbursement under Section 11 of this
Agreement;
all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this Section 1 being herein collectively called the
"Obligations," it being acknowledged and agreed that the "Obligations" shall
include extensions of credit of the types described above, whether outstanding
on the date of this Agreement or extended from time to time after the date of
this Agreement.
2. DEFINITION OF STOCK, NOTES, SECURITIES, ETC. As used herein,
(i) the term "Stock" shall mean all of the issued and outstanding shares of
capital stock at any time owned by any Pledgor of any corporation and (ii) the
term "Notes" shall mean (A) all Intercompany Notes at any time issued to each
Pledgor and (B) all other promissory notes from time to time issued to, or held
by, each Pledgor. As used herein, the term "Securities" shall mean all of the
Stock and the Notes. Each Pledgor represents and warrants, as to the stock of
corporations and promissory notes owned by such Pledgor, that on the date
hereof (a) the Stock held by such Pledgor consists of the number and type of
shares of the stock of the corporations as described in Part I of Annex A
hereto; (b) such Stock constitutes that percentage of the issued and
outstanding capital stock of the issuing corporation as is set forth in Part I
of Annex A hereto; (c) the Notes held by such Pledgor consist of the promissory
notes described in Part II of Annex A hereto; and (d) such Pledgor is the
holder of record and sole beneficial owner of the Stock and the Notes held by
such Pledgor, and there exist no options or preemption rights in respect of any
of such Stock.
3. PLEDGE OF SECURITIES, ETC.
3.1. Pledge. To secure the Obligations, and for the purposes
set forth in Section 1 hereof, each Pledgor hereby (i) grants to the Pledgee a
security interest in all of the Collateral (as hereinafter defined) owned by
such Pledgor, (ii) pledges and deposits with the Pledgee the Securities owned
by such Pledgor on the date hereof, and delivers to the Pledgee certificates or
instruments therefor, duly endorsed in blank in the case of Notes and
accompanied by undated stock powers duly executed in blank by such Pledgor (and
accompanied by any transfer tax stamps required in connection with the pledge
of such Securities) in the case of Stock, or such other instruments of transfer
as are reasonably acceptable to the Pledgee and (iii) assigns, transfers,
hypothecates mortgages,
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charges and sets over to the Pledgee all of such Pledgor's right, title and
interest in and to such Securities (and in and to all certificates or
instruments evidencing such Securities), to be held by the Pledgee as
collateral security for the Obligations, upon the terms and conditions set
forth in this Agreement.
3.2. Subsequently Acquired Securities. If any Pledgor shall
acquire (by purchase, stock dividend or otherwise) any additional Securities at
any time or from time to time after the date hereof, such Pledgor will
forthwith pledge and deposit such Securities (or certificates or instruments
representing such Securities) as security with the Pledgee and deliver to the
Pledgee certificates or instruments therefor, duly endorsed in blank in the
case of Notes, and accompanied by undated stock powers duly executed in blank
by such Pledgor (and accompanied by any transfer tax stamps required in
connection with the pledge of such Securities) in the case of Stock, or such
other instruments of transfer as are acceptable to the Pledgee, and will
promptly thereafter deliver to the Pledgee a certificate executed by an
Authorized Officer of such Pledgor describing such Securities and certifying
that the same have been duly pledged with the Pledgee hereunder.
3.3. Uncertificated Securities. Notwithstanding anything to the
contrary contained in Sections 3.1 and 3.2 hereof, if any Securities (whether
now owned or hereafter acquired) are uncertificated securities, the respective
Pledgor shall promptly notify the Pledgee thereof, and shall promptly take all
actions required to perfect the security interest of the Pledgee under
applicable law (including, in any event, under Sections 8-313 and 8-321 of the
New York Uniform Commercial Code if applicable). Each Pledgor further agrees
to take such actions as the Pledgee deems necessary or desirable to effect the
foregoing and to permit the Pledgee to exercise any of its rights and remedies
hereunder, and agrees to provide an opinion of counsel reasonably satisfactory
to the Pledgee with respect to any such pledge of uncertificated Securities
promptly upon the reasonable request of the Pledgee.
3.4. Definitions of Pledged Stock; Pledged Notes; Pledged
Securities and Collateral. All Stock at any time pledged or required to be
pledged hereunder is hereinafter called the "Pledged Stock;" all Notes at any
time pledged or required to be pledged hereunder are hereinafter called the
"Pledged Notes;" all Pledged Stock and Pledged Notes together are called the
"Pledged Securities;" and the Pledged Securities, together with all proceeds
thereof, including any securities and moneys received and at the time held by
the Pledgee hereunder, are hereinafter called the "Collateral."
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee
shall have the right to appoint one or more sub-agents for the purpose of
retaining physical possession of the Pledged Securities, which may be held (in
the discretion of the Pledgee) in the name of such Pledgor, endorsed or
assigned in blank or in favor of the Pledgee or any nominee or nominees of the
Pledgee or a sub-agent appointed by the Pledgee.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until an
Event of Default shall have occurred and be continuing, each Pledgor shall be
entitled to exercise any and
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all voting and other consensual rights pertaining to the Pledged Securities
owned by it, and to give consents, waivers or ratifications in respect thereof,
provided that no vote shall be cast or any consent, waiver or ratification
given or any action taken which would violate, result in breach of any covenant
contained in this Agreement, the Credit Agreement, any other Credit Document or
any Interest Rate Protection or Other Hedging Agreement (collectively, the
"Secured Debt Agreements"), or which could reasonably be expected to have the
effect of impairing the value of the Collateral or any part thereof or the
position or interests of the Pledgee or any Secured Creditor. All such rights
of such Pledgor to vote and to give consents, waivers and ratifications shall
cease in case an Event of Default shall occur and be continuing, and Section 7
hereof shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless an Event of
Default shall have occurred and be continuing, all cash dividends and
distributions payable in respect of the Pledged Stock and all payments in
respect of the Pledged Notes shall be paid to the respective Pledgor which owns
such Pledged Stock or Pledged Notes; provided, that all cash dividends payable
in respect of the Pledged Stock which are determined by the Pledgee to
represent in whole or in part an extraordinary, liquidating or other
distribution in return of capital shall be paid, to the extent so determined to
represent an extraordinary, liquidating or other distribution in return of
capital, to the Pledgee and retained by it as part of the Collateral. The
Pledgee also shall be entitled to receive directly, and to retain as part of
the Collateral:
(a) all other or additional stock or other securities or
property (other than cash) paid or distributed by way of dividend or
otherwise in respect of the Pledged Stock;
(b) all other or additional stock or other securities or
property (including cash) paid or distributed in respect of the Pledged
Stock by way of stock-split, spin-off, split-up, reclassification,
combination of shares or similar rearrangement; and
(c) all other or additional stock or other securities or
property (including cash) which may be paid in respect of the Collateral
by reason of any consolidation, merger, exchange of stock, conveyance of
assets, liquidation or similar corporate reorganization.
Nothing contained in this Section 6 shall limit or restrict in any way the
Pledgee's right to receive proceeds of the Collateral in any form in accordance
with Section 3 of this Agreement. All dividends, distributions or other
payments which are received by any Pledgor contrary to the provisions of this
Section 6 and Section 7 shall be received in trust for the benefit of the
Pledgee, shall be segregated from other property or funds of such Pledgor and
shall be forthwith paid over to the Pledgee as Collateral in the same form as
so received (with any necessary endorsement).
7. REMEDIES IN CASE OF EVENTS OF DEFAULT. In case and Event of
Default shall have occurred and be continuing, then and in every such case, the
Pledgee shall be entitled to exercise all of the rights, powers and remedies
(whether vested in it by this Agreement, any other Secured Debt Agreement or by
law) for the protection and enforcement of its rights in respect of the
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Collateral, and the Pledgee shall be entitled to exercise all the rights and
remedies of a secured party under the Uniform Commercial Code and also shall be
entitled, without limitation, to exercise the following rights, which each
Pledgor hereby agrees to be commercially reasonable:
(a) to receive all amounts payable in respect of the
Collateral otherwise payable to such Pledgor under Section 6 hereof;
(b) to transfer all or any part of the Collateral into the
Pledgee's name or the name of its nominee or nominees;
(c) to accelerate any Pledged Note which may be accelerated in
accordance with its terms, and take any other lawful action to collect
upon any Pledged Note (including, without limitation, to make any demand
for payment thereon);
(d) to vote all or any part of the Pledged Stock (whether or
not transferred into the name of the Pledgee) and give all consents,
waivers and ratifications in respect of the Collateral and otherwise act
with respect thereto as though it were the outright owner thereof (each
Pledgor hereby irrevocably constituting and appointing the Pledgee the
proxy and attorney-in-fact of such Pledgor, with full power of
substitution to do so); and
(e) to sell, assign and deliver, or grant options to purchase,
all or any part of the Collateral, or any interest therein, at any
public or private sale, without demand of performance, advertisement or
notice of intention to sell or of the time or place of sale or
adjournment thereof or to redeem or otherwise (all of which are hereby
waived by each Pledgor), for cash, on credit or for other property, for
immediate or future delivery without any assumption of credit risk, and
for such price or prices and on such terms as the Pledgee in its
absolute discretion may determine, provided that at least 10 days'
written notice of the time and place of any such sale shall be given to
such Pledgor. Each Pledgee shall not be obligated to make any such sale
of Collateral regardless of whether any such notice of sale has
theretofore been given. Each Pledgor hereby waives and releases to the
fullest extent permitted by law any right or equity of redemption with
respect to the Collateral, whether before or after sale hereunder, and
all rights, if any, of marshalling the Collateral and any other security
for the Obligations or otherwise. At any such sale, unless prohibited
by applicable law, the Pledgee on behalf of the Secured Creditors may
bid for and purchase all or any part of the Collateral so sold free from
any such right or equity of redemption. Neither the Pledgee nor any
Secured Creditor shall be liable for failure to collect or realize upon
any or all of the Collateral or for any delay in so doing nor shall any
of them be under any obligation to take any action whatsoever with
regard thereto.
8. REMEDIES, ETC., CUMULATIVE. Each and every right, power and
remedy of the Pledgee provided for in this Agreement or any Secured Debt
Agreement, or now or hereafter existing at law or in equity or by statute shall
be cumulative and concurrent and shall be in addition
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to every other such right, power or remedy. The exercise or beginning of the
exercise by the Pledgee or any other Secured Creditor of any one or more of the
rights, powers or remedies provided for in this Agreement, or any other Secured
Debt Agreement or now or hereafter existing at law or in equity or by statute
or otherwise shall not preclude the simultaneous or later exercise by the
Pledgee or any Secured Creditor of all such other rights, powers or remedies,
and no failure or delay on the part of the Pledgee or any Secured Creditor to
exercise any such right, power or remedy shall operate as a waiver thereof.
Unless otherwise required by the Credit Documents, no notice to or demand on
any Pledgor in any case shall entitle it to any other or further notice or
demand in similar or other circumstances or constitute a waiver of any of the
rights of the Pledgee or any Secured Creditor to any other or further action in
any circumstances without notice or demand.
9. APPLICATION OF PROCEEDS.
(a) All moneys collected by the Pledgee upon any sale or other
disposition of the Collateral, together with all other moneys received by the
Pledgee hereunder, shall be applied to the payment of the Obligations in the
manner provided in Section 7.4 of the Security Agreement;
(b) It is understood and agreed that the Pledgors shall remain
jointly and severally liable to the extent of any deficiency between the amount
of the proceeds of the Collateral hereunder and the aggregate amount of the
Obligations.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral
by the Pledgee hereunder (whether by virtue of the power of sale herein
granted, pursuant to judicial process or otherwise), the receipt of the Pledgee
or the officer making the sale shall be a sufficient discharge to the purchaser
or purchasers of the Collateral so sold, and such purchaser or purchasers shall
not be obligated to see to the application of any part of the purchase money
paid over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
11. INDEMNITY. Each Pledgor jointly and severally agrees to
indemnify and hold harmless the Pledgee and each Secured Creditor and their
respective successors, assigns, employees, agents and servants (individually an
"Indemnitee," and collectively the "Indemnitees") from and against any and all
claims, demands, losses, judgments and liabilities (including liabilities for
penalties) of whatsoever kind or nature, and to reimburse each Indemnitee for
all costs and expenses, including reasonable attorneys' fees, growing out of or
resulting from this Agreement or the exercise by any Indemnitee of any right or
remedy granted to it hereunder or under any other Secured Debt Agreement (but
excluding any claims, demands, losses, judgments and liabilities or expenses to
the extent incurred by reason of gross negligence or willful misconduct of such
Indemnitee). If and to the extent that the obligations of the Pledgors under
this Section 11 are unenforceable for any reason, each Pledgor hereby agrees to
make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
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12. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) Each Pledgor
agrees that it will join with the Pledgee in executing and, at such Pledgor's
own expense, file and refile under the Uniform Commercial Code or other
applicable law such financing statements, continuation statements and other
documents in such offices as the Pledgee may deem necessary and wherever
required by law in order to perfect and preserve the Pledgee's security
interest in the Collateral and hereby authorizes the Pledgee to file financing
statements and amendments thereto relative to all or any part of the Collateral
without the signature of such Pledgor where permitted by law, and agrees to do
such further acts and things and to execute and deliver to the Pledgee such
additional conveyances, assignments, agreements and instruments as the Pledgee
may reasonably require or deem necessary to carry into effect the purposes of
this Agreement or to further assure and confirm unto the Pledgee its rights,
powers and remedies hereunder.
(b) Each Pledgor hereby appoints the Pledgee as such Pledgor's
attorney-in-fact, with full authority in the place and stead of such Pledgor
and in the name of such Pledgor or otherwise, from time to time after the
occurrence and during the continuance of an Event of Default, in the Pledgee's
reasonable discretion to take any action and to execute any instrument which
the Pledgee may reasonably deem necessary or advisable to accomplish the
purposes of this Agreement.
13. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance
with this Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed by the parties hereto and
each Secured Creditor, by accepting the benefits of this Agreement that each
acknowledges and agrees that the obligations of the Pledgee as holder of the
Collateral and interests therein and with respect to the disposition thereof,
and otherwise under this Agreement, are only those expressly set forth in this
Agreement. The Pledgee shall act hereunder on the terms and conditions set
forth herein and in Section 12 of the Credit Agreement.
14. TRANSFER BY PLEDGORS. No Pledgor will sell or otherwise
dispose of, grant any option with respect to, or mortgage, pledge or otherwise
encumber any of the Collateral or any interest therein (except as may be
permitted in accordance with the terms of the Credit Agreement).
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS.
Each Pledgor represents and warrants and covenants that (a) it is, or at the
time when pledged hereunder will be, the legal, record and beneficial owner of,
and has (or will have) good title to, all Securities pledged by it hereunder,
subject to no Lien (except the Lien created by this Agreement); (b) it has full
corporate power, authority and legal right to pledge all the Securities pledged
by it pursuant to this Agreement; (c) this Agreement has been duly authorized,
executed and delivered by such Pledgor and constitutes a legal, valid and
binding obligation of such Pledgor enforceable in accordance with its terms,
except to the extent that the enforceability hereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law); (d) except
to the extent already obtained or made, no consent of any
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other party (including, without limitation, any stockholder or creditor of such
Pledgor or any of its Subsidiaries) and no consent, license, permit, approval
or authorization of, exemption by, notice or report to, or registration, filing
or declaration with, any governmental authority is required to be obtained by
such Pledgor in connection with (i) the execution, delivery or performance of
this Agreement, (ii) the validity or enforceability of this Agreement, (iii)
the perfection or enforceability of the Pledgee's security interest in the
Collateral or (iv) except for compliance with or as may be required by
applicable securities laws, the exercise by the Pledgee of any of its rights or
remedies provided herein; (e) the execution, delivery and performance of this
Agreement by such Pledgor does not violate any provision of any applicable law
or regulation or of any order, judgment, writ, award or decree of any court,
arbitrator or governmental authority, domestic or foreign or of the certificate
of incorporation or by-laws of such Pledgor, or of any securities issued by
such Pledgor or any of its Subsidiaries, or of any material mortgage,
indenture, lease, deed of trust, loan agreement, credit agreement or other
contract, agreement or instrument or undertaking to which the Pledgor or any of
its Subsidiaries is a party or which purports to be binding upon the Pledgor or
any of its Subsidiaries or upon any of their respective assets and will not
result in the creation or imposition of (or the obligation to create or impose)
any lien or encumbrance on any of the assets of such Pledgor or any of its
Subsidiaries except as contemplated by this Agreement; (f) all the shares of
the Stock have been duly and validly issued, are fully paid and non-assessable
and are subject to no options to purchase or similar rights; (g) each of the
Pledged Notes to the extent issued by Holdings or any of its Subsidiaries
constitutes, or when executed by the obligor thereof will constitute, the
legal, valid and binding obligation of such obligor, enforceable in accordance
with its terms, except to the extent that the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law);
and (h) the pledge, collateral assignment and delivery to the Pledgee of the
Securities (other than uncertificated securities) pursuant to this Agreement
creates a valid and perfected first priority Lien in the Securities, and the
proceeds thereof, subject to no other Lien or to any agreement purporting to
grant to any third party a Lien on the property or assets of such Pledgor which
would include the Securities. Each Pledgor covenants and agrees that it will
defend the Pledgee's right, title and security interest in and to the
Securities and the proceeds thereof against the claims and demands of all
persons whomsoever; and such Pledgor covenants and agrees that it will have
like title to and right to pledge any other property at any time hereafter
pledged to the Pledgee as Collateral hereunder and will likewise defend the
right thereto and security interest therein of the Pledgee and the Secured
Creditors.
16. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of
each Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation: (a) any renewal,
extension, amendment or modification of or addition or supplement to or
deletion from any Secured Debt Agreement or any other instrument or agreement
referred to therein, or any assignment or transfer of any thereof; (b) any
waiver, consent, extension, indulgence or other action or inaction under or in
respect of any such agreement or instrument including, without limitation, this
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Agreement; (c) any furnishing of any additional security to the Pledgee or its
assignee or any acceptance thereof or any release of any security by the
Pledgee or its assignee; (d) any limitation on any party's liability or
obligations under any such instrument or agreement or any invalidity or
unenforceability, in whole or in part, of any such instrument or agreement or
any term thereof; or (e) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to such Pledgor or any Subsidiary of such Pledgor, or any action taken
with respect to this Agreement by any trustee or receiver, or by any court, in
any such proceeding, whether or not such Pledgor shall have notice or knowledge
of any of the foregoing.
17. REGISTRATION, ETC. (a) If there shall have occurred and
be continuing an Event of Default and acceleration of the Notes then, and in
every such case, upon receipt by any Pledgor from the Pledgee of a written
request or requests that such Pledgor cause any registration, qualification or
compliance under any Federal or state securities law or laws to be effected
with respect to all or any part of the Pledged Stock, such Pledgor as soon as
practicable and at its expense will use its commercially reasonable efforts to
cause such registration to be effected (and be kept effective) and will use its
commercially reasonable efforts to cause such qualification and compliance to
be declared effected (and be kept effective) as may be so requested and as
would permit or facilitate the sale and distribution of such Pledged Stock,
including, without limitation, registration under the Securities Act of 1933,
as then in effect (or any similar statute then in effect), appropriate
qualifications under applicable blue sky or other state securities laws and
appropriate compliance with any other government requirements, provided that
the Pledgee shall furnish to such Pledgor such information regarding the
Pledgee as such Pledgor may request in writing and as shall be required in
connection with any such registration, qualification or compliance. Such
Pledgor will cause the Pledgee to be kept advised in writing as to the progress
of each such registration, qualification or compliance and as to the completion
thereof, will furnish to the Pledgee such number of prospectuses, offering
circulars or other documents incident thereto as the Pledgee from time to time
may reasonably request, and will indemnify the Pledgee, each Secured Creditor
and all others participating in the distribution of such Pledged Stock against
all claims, losses, damages and liabilities caused by any untrue statement (or
alleged untrue statement) of a material fact contained therein (or in any
related registration statement, notification or the like) or by any omission
(or alleged omission) to state therein (or in any related registration
statement, notification or the like) a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as the same may have been caused by an untrue statement or omission
based upon information furnished in writing to such Pledgor by the Pledgee or
such other Secured Creditor expressly for use therein.
(b) If at any time when the Pledgee shall determine to
exercise its right to sell all or any part of the Pledged Securities pursuant
to Section 7 hereof, and such Pledged Securities or the part thereof to be sold
shall not, for any reason whatsoever, be effectively registered under the
Securities Act of 1933, as then in effect, the Pledgee may, in its sole and
absolute discretion, sell such Pledged Securities or part thereof by private
sale in such manner and under such circumstances as the Pledgee may deem
reasonably necessary or advisable in order that such sale may legally be
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effected without such registration. Without limiting the generality of the
foregoing, in any such event the Pledgee, in its sole and absolute discretion
(i) may proceed to make such private sale notwithstanding that a registration
statement for the purpose of registering such Pledged Securities or part
thereof shall have been filed under such Securities Act, (ii) may approach and
negotiate with a single possible purchaser to effect such sale, and (iii) may
restrict such sale to a purchaser who will represent and agree that such
purchaser is purchasing for its own account, for investment, and not with a
view to the distribution or sale of such Pledged Securities or part thereof.
In the event of any such sale, the Pledgee shall incur no responsibility or
liability for selling all or any part of the Pledged Securities at a price
which the Pledgee, in its sole and absolute discretion, in good faith deems
reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might be realized if the sale were deferred until
after registration as aforesaid.
18. TERMINATION; RELEASE. (a) After the Termination Date (as
defined below), this Agreement and the security interest created hereby shall
terminate (provided that all indemnities set forth in Section 11 hereof shall
survive any such termination), and the Pledgee, at the request and expense of
the respective Pledgor, will execute and deliver to such Pledgor a proper
instrument or instruments acknowledging the satisfaction and termination of
this Agreement, and will duly assign, transfer and deliver to such Pledgor
(without recourse and without any representation or warranty) such of the
Collateral as has not theretofore been sold or otherwise applied or released
pursuant to this Agreement, together with any moneys at the time held by the
Pledgee or any of its sub-agents hereunder. As used in this Agreement,
"Termination Date" shall mean the date upon which the Total Commitment and all
Interest Rate Protection or Other Hedging Agreements have been terminated, no
Note under the Credit Agreement is outstanding (and all Loans have been repaid
in full), all Letters of Credit have been terminated and all Obligations then
owing have been paid in full.
(b) Notwithstanding anything to the contrary contained above,
upon the presentment of satisfactory evidence to the Pledgee in its sole
discretion that all obligations evidenced by any Pledged Note have been repaid
in full, and that any payments received by the respective Pledgor were
permitted to be received by such Pledgor pursuant to Section 6 hereof, the
Pledgee shall, upon the request and at the expense of such Pledgor, duly
assign, transfer and deliver to such Pledgor (without recourse and without any
representation or warranty) such Pledged Note if same has not theretofore been
sold or otherwise applied or released pursuant to this Agreement.
(c) In the event that any part of the Collateral is sold in
connection with a sale permitted by Section 9.02 of the Credit Agreement or
otherwise released at the direction of the Required Banks (or all Banks if
required by Section 13.12 of the Credit Agreement) and the proceeds of such
sale or sales or from such release are applied in accordance with the
provisions of Section 4.02 of the Credit Agreement, to the extent required to
be so applied, the Pledgee, at the request and expense of the respective
Pledgor, will duly assign, transfer and deliver to such Pledgor (without
recourse and without any representation or warranty) such of the Collateral as
is then being (or has been) so sold or released and has not theretofore been
released pursuant to this Agreement.
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(d) At any time that the respective Pledgor desires that
Collateral be released as provided in the foregoing sub-section (a), (b) or
(c), as the case may be, it shall deliver to the Pledgee a certificate signed
by an Authorized Officer stating that the release of the respective Collateral
is permitted pursuant to such subsection (a), (b) or (c), as the case may be.
(e) The Pledgee shall have no liability whatsoever to any
Secured Creditor as the result of any release of Collateral by it in accordance
with this Section 18.
19. NOTICES ETC. All such notices and communications hereunder
shall be sent or delivered by mail, telecopy or overnight courier service and
all such notices and communications shall, when mailed, telecopied, or sent by
overnight courier, be effective when delivered to the overnight courier or sent
by telecopier and when mailed shall be effective three Business Days following
deposit in the mail with proper postage, except that notices and communications
to the Collateral Agent shall not be effective until received by the Collateral
Agent. All notices and other communications shall be in writing and addressed
as follows:
(a) if to any Pledgor, at its address set forth opposite its
signature below:
with a copy to:
Hicks, Muse, Tate & Furst Incorporated
200 Crescent Court
Suite 1600
Dallas, Texas 75201
Attn: Thomas O. Hicks,
John R. Muse,
Jack D. Furst and
Lawrence D. Stuart, Jr.
Telephone: (214) 740-7300
Telecopy: (214) 740-7313
and
Hicks, Muse, Tate & Furst Incorporated
1325 Avenue of the Americas
25th Floor
New York, New York 10019
Attn: Charles W. Tate
Telephone: (212) 424-1400
Telecopy: (212) 424-1450
188
EXHIBIT H
Page 13
(b) if to the Pledgee, at:
Bankers Trust Company
130 Liberty Street
30th Floor
New York, New York 10006
Attn: Mary Kay Coyle
Telephone: (212) 250-9094
Telecopy: (212) 250-7218
(c) if to any Bank Creditor, either (x) to the Agent, at the
address of the Agent specified in the Credit Agreement or (y) at such
address as such Bank Creditor shall have specified in the Credit
Agreement;
(d) if to any Other Creditor at such address as such Other
Creditor shall have specified in writing to the Pledgor and the Pledgee;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
20. WAIVER; AMENDMENT. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by each Pledgor directly affected thereby and the
Pledgee (with the written consent of the Required Banks or, to the extent
required by Section 13.12 of the Credit Agreement with the consent of each of
the Banks); provided, however, that any change, waiver, modification or
variance affecting the rights and benefits of a single Class (as defined below)
of Secured Creditors (and not all Secured Creditors in a like or similar
manner) shall require the written consent of the Requisite Creditors (as
defined below) of such affected Class. For the purpose of this Agreement, the
term "Class" shall mean each class of Secured Creditors, i.e., whether (i) the
Bank Creditors as holders of the Credit Agreement Obligations or (ii) the Other
Creditors as the holders of the Other Obligations. For the purpose of this
Agreement, the term "Requisite Creditors" of any Class shall mean each of (A)
with respect to the Credit Agreement Obligations, the Required Banks and (B)
with respect to the Other Obligations, the holders of 51% of all obligations
outstanding from time to time under the Interest Rate Protection Agreements or
Other Hedging Agreements.
21. MISCELLANEOUS. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of and be enforceable by each of the parties hereto and its
successors and assigns. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. The headings
in this Agreement are for purposes of reference only and shall not limit or
define the meaning hereof. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
constitute one
189
EXHIBIT H
Page 14
instrument. In the event that any provision of this Agreement shall prove to
be invalid or unenforceable, such provision shall be deemed to be severable
from the other provisions of this Agreement which shall remain binding on all
parties hereto.
22. RECOURSE. This Agreement is made with full recourse to
each Pledgor and pursuant to and upon all the representations, warranties,
covenants and agreements on the part of each Pledgor contained herein, in the
other Credit Documents, in the Interest Rate Protection or Other Hedging
Agreements and otherwise in writing in connection herewith or therewith.
190
EXHIBIT H
Page 15
IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this
Agreement to be executed by their duly elected officers duly authorized as of
the date first above written.
Addresses
- ---------
9001 Ambassador Row ATRIUM CORPORATION
Dallas, TX 75247 as a Pledgor
Attn: Randall Fojtasek
Telephone: (214) 634-0836
Telecopy: (214) 631-4231 By:
-----------------------------------------
Name:
---------------------------------------
Title :
-------------------------------------
9001 Ambassador Row ATRIUM COMPANIES, INC.
Dallas, TX 75247 as a Pledgor
Attn: Randall Fojtasek
Telephone: (214) 634-0836
Telecopy: (214) 631-4231
By:
-----------------------------------------
Name:
---------------------------------------
Title :
-------------------------------------
9001 Ambassador Row H-R WINDOW SUPPLY COMPANY, INC.
Dallas, TX 75247 as a Pledgor
Attn: Randall Fojtasek
Telephone: (214) 634-0836
Telecopy: (214) 631-4231
By:
-----------------------------------------
Name:
---------------------------------------
Title :
-------------------------------------
9001 Ambassador Row VINYL BUILDING SPECIALTIES
Dallas, TX 75247 OF CONNECTICUT, INC.
Attn: Randall Fojtasek as a Pledgor
Telephone: (214) 634-0836
Telecopy: (214) 631-4231
By:
-----------------------------------------
Name:
---------------------------------------
Title :
-------------------------------------
191
EXHIBIT H
Page 16
9001 Ambassador Row BISHOP MANUFACTURING CO.
Dallas, TX 75247 OF NEW YORK, INC.
Attn: Randall Fojtasek as a Pledgor
Telephone: (214) 634-0836
Telecopy: (214) 631-4231 By:
-----------------------------------------
Name:
---------------------------------------
Title :
-------------------------------------
9001 Ambassador Row BISHOP MANUFACTURING CO., INC.
Dallas, TX 75247 as a Pledgor
Attn: Randall Fojtasek
Telephone: (214) 634-0836
Telecopy: (214) 631-4231 By:
-----------------------------------------
Name:
---------------------------------------
Title :
-------------------------------------
9001 Ambassador Row BISHOP MANUFACTURING CO.
Dallas, TX 75247 OF NEW ENGLAND, INC.
Attn: Randall Fojtasek as a Pledgor
Telephone: (214) 634-0836
Telecopy: (214) 631-4231 By:
-----------------------------------------
Name:
---------------------------------------
Title :
-------------------------------------
192
EXHIBIT H
Page 17
BANKERS TRUST COMPANY
as Collateral Agent
By:
-----------------------------------------
Name:
---------------------------------------
Title :
-------------------------------------
193
ANNEX A
to
Pledge Agreement
Part I. Pledged Stock
Percentage
of
Outstanding
Name of Share Shares of
Name of Issuing Number of Certificate Capital
Pledgor Corporation Type of Shares Shares Number Stock
------- ----------- -------------- --------- ---------- --------
194
ANNEX A
Page 2
Part . Pledged Notes
Principal
Pledgor Lender Borrower Amount
------- ------ -------- ---------
195
EXHIBIT I
SECURITY AGREEMENT
among
ATRIUM CORPORATION,
ATRIUM COMPANIES, INC.,
CERTAIN OTHER SUBSIDIARIES OF ATRIUM COMPANIES, INC.
and
BANKERS TRUST COMPANY,
as Collateral Agent
Dated as of November __, 1996
196
TABLE OF CONTENTS
Page
----
ARTICLE I
SECURITY INTERESTS . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1. Grant of Security Interests . . . . . . . . . . . . . . . . . . 2
1.2. Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS . . . . . . . . . . 3
2.1. Necessary Filings . . . . . . . . . . . . . . . . . . . . . . . 3
2.2. No Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3. Other Financing Statements . . . . . . . . . . . . . . . . . . 3
2.4. Chief Executive Office; Records . . . . . . . . . . . . . . . . 4
2.5. Location of Inventory and Equipment . . . . . . . . . . . . . . 4
2.6. Recourse . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.7. Trade Names; Change of Name . . . . . . . . . . . . . . . . . . 5
ARTICLE III
SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS . . . . . . . . . . . . . . 5
3.1. Additional Representations and Warranties . . . . . . . . . . . 5
3.2. Maintenance of Records . . . . . . . . . . . . . . . . . . . . 6
3.3. Direction to Account Debtors; Contracting Parties; etc. . . . . 6
3.4. Modification of Terms; etc. . . . . . . . . . . . . . . . . . . 6
3.5. Collection . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.6. Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.7. Further Actions . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IV
SPECIAL PROVISIONS CONCERNING MARKS . . . . . . . . . . . . . . . . . 7
4.1. Additional Representations and Warranties . . . . . . . . . . . 7
4.2. Licenses and Assignments . . . . . . . . . . . . . . . . . . . 8
4.3. Infringements . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.4. Preservation of Marks . . . . . . . . . . . . . . . . . . . . . 8
(i)
197
Page
----
4.5. Maintenance of Registration . . . . . . . . . . . . . . . . . . 8
4.6. Future Registered Marks . . . . . . . . . . . . . . . . . . . . 8
4.7. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS AND COPYRIGHTS AND TRADE SECRETS . . . . . . . . . . . . . . 9
5.1. Additional Representations and Warranties . . . . . . . . . . . 9
5.2. Licenses and Assignments . . . . . . . . . . . . . . . . . . . 10
5.3. Infringements . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.4. Maintenance of Patents . . . . . . . . . . . . . . . . . . . . 10
5.5. Prosecution of Patent Application . . . . . . . . . . . . . . . 10
5.6. Other Patents and Copyrights . . . . . . . . . . . . . . . . . 10
5.7. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL . . . . . . . . . . . . . . . . 11
6.1. Protection of Collateral Agent's Security . . . . . . . . . . . 11
6.2. Warehouse Receipts Non-Negotiable . . . . . . . . . . . . . . . 11
6.3. Further Actions . . . . . . . . . . . . . . . . . . . . . . . . 11
6.4. Financing Statements . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT . . . . . . . . . . . . 12
7.1. Remedies; Obtaining the Collateral Upon Default . . . . . . . . 12
7.2. Remedies; Disposition of the Collateral . . . . . . . . . . . . 13
7.3. Waiver of Claims . . . . . . . . . . . . . . . . . . . . . . . 14
7.4. Application of Proceeds . . . . . . . . . . . . . . . . . . . . 14
7.5. Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . 16
7.6. Discontinuance of Proceedings . . . . . . . . . . . . . . . . . 17
ARTICLE VIII
INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.1. Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.2. Indemnity Obligations Secured by Collateral; Survival . . . . . 18
(ii)
198
Page
----
ARTICLE IX
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE X
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
10.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
10.2. Waiver; Amendment . . . . . . . . . . . . . . . . . . . . . . 25
10.3. Obligations Absolute . . . . . . . . . . . . . . . . . . . . . 25
10.4. Successors and Assigns . . . . . . . . . . . . . . . . . . . . 25
10.5. Headings Descriptive . . . . . . . . . . . . . . . . . . . . . 26
10.6. Severability . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.7. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 26
10.8. Assignor's Duties . . . . . . . . . . . . . . . . . . . . . . 26
10.9. Termination; Release . . . . . . . . . . . . . . . . . . . . . 26
10.10. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 27
10.11. The Collateral Agent . . . . . . . . . . . . . . . . . . . . 27
ANNEX A Schedule of Permitted Filings
ANNEX B Schedule of Record Locations
ANNEX C Schedule of Inventory and Equipment Locations
ANNEX D Schedule of Trade, Fictitious and Other Names
ANNEX E Schedule of Marks
ANNEX F Schedule of License Agreements and Assignments
ANNEX G Schedule of Patents and Applications
ANNEX H Schedule of Copyrights and Applications
ANNEX I Assignment of Security Interest in U.S.
Trademarks and Patents
ANNEX J Assignment of Security Interest in U.S.
Copyrights
(iii)
199
EXHIBIT I
Page 1
SECURITY AGREEMENT
THIS SECURITY AGREEMENT, dated as of November __, 1996, is by and
among each of the undersigned (each, an "Assignor" and, collectively, the
"Assignors") and BANKERS TRUST COMPANY, as Collateral Agent (the "Collateral
Agent") for the benefit of (i) the Banks and the Agent under the Credit
Agreement hereinafter referred to (such Banks and the Agent are hereinafter
called the "Bank Creditors") and (ii) if one or more Banks (or any Affiliate
thereof) enter into one or more (A) interest rate protection agreements
(including, without limitation, interest rate swaps, caps, floors, collars and
similar agreements), (B) foreign exchange contracts, currency swap agreements
or other similar agreements or arrangements designed to protect against the
fluctuations in currency values and/or (C) other types of hedging agreements
from time to time (collectively, the "Interest Rate Protection or Other Hedging
Agreements") with, or guaranteed by, an Assignor, any such Bank or Banks or any
Affiliate of such Bank or Banks (even if the respective Bank subsequently
ceases to be a Bank under the Credit Agreement for any reason) so long as any
such Bank or Affiliate participates in the extension of such Interest Rate
Protection or Other Hedging Agreements and their subsequent assigns, if any
(collectively, the "Other Creditors" and, together with the Bank Creditors,
hereinafter called the "Secured Creditors"). Except as otherwise defined
herein, terms used herein and defined in the Credit Agreement shall be used
herein as so defined.
W I T N E S S E T H :
WHEREAS, Atrium Corporation, a Delaware corporation ("Holdings"),
Atrium Companies, Inc., a Delaware corporation (the "Borrower"), the banks (the
"Banks") from time to time party thereto and Bankers Trust Company, as Agent
(together with any successor agent, the "Agent"), have entered into a Credit
Agreement, dated as of November __, 1996, providing for the making of Loans and
the issuance of, and participation in, Letters of Credit as contemplated
therein (as used herein, the term "Credit Agreement" means the Credit Agreement
described above in this paragraph, as the same may be amended, modified,
extended, renewed, replaced, restated or supplemented from time to time, and
including any agreement extending the maturity of or restructuring of all or
any portion of the Indebtedness under such agreement or any successor
agreements;
WHEREAS, the Assignors may at any time and from time to time
enter into, or guarantee, one or more Interest Rate Protection or Other Hedging
Agreements with one or more Other Creditors;
200
EXHIBIT I
Page 2
WHEREAS, pursuant to the Holdings Guaranty, Holdings has
guaranteed to the Secured Creditors the payment when due of all obligations and
liabilities of the Borrower under or with respect to the Credit Documents and
the Interest Rate Protection or Other Hedging Agreements;
WHEREAS, pursuant to the Subsidiary Guaranty, each Assignor
(other than Holdings and the Borrower) has jointly and severally guaranteed to
the Secured Creditors the payment when due of all obligations of the Borrower
under or with respect to the Credit Documents and the Interest Rate Protection
or Other Hedging Agreements;
WHEREAS, it is a condition precedent to each of the above-
described extensions of credit that each Assignor shall have executed and
delivered this Agreement;
WHEREAS, each Assignor desires to enter into this Agreement in
order to satisfy the condition described in the preceding paragraph;
NOW, THEREFORE, in consideration of the extensions of credit to
be made to each Assignor and other benefits accruing to each Assignor, the
receipt and sufficiency of which are hereby acknowledged, each Assignor hereby
makes the following representations and warranties to the Collateral Agent for
the benefit of the Secured Creditors and hereby covenants and agrees with the
Collateral Agent for the benefit of the Secured Creditors as follows:
ARTICLE I
SECURITY INTERESTS
1.1. Grant of Security Interests. (a) As security for the
prompt and complete payment and performance when due of all of the Obligations,
each Assignor does hereby collaterally assign and transfer unto the Collateral
Agent, and does hereby pledge and grant to the Collateral Agent for the benefit
of the Secured Creditors, a continuing security interest of first priority
(subject to Liens evidenced by Permitted Filings and other Permitted Liens) in,
all of the right, title and interest of such Assignor in, to and under all of
the following, whether now existing or hereafter from time to time acquired:
(i) each and every Receivable, (ii) all Contracts, together with all Contract
Rights arising thereunder, (iii) all Inventory, (iv) the Cash Collateral
Account established for such Assignor and all moneys, securities and
instruments deposited or required to be deposited in such Cash Collateral
Account, (v) all Equipment, (vi) all Marks, together with the registrations and
right to all renewals thereof, and the goodwill of the business of such
Assignor symbolized by the Marks, (vii) all Patents and Copyrights, and all
reissues, renewals or extensions thereof, (viii) all computer programs of such
Assignor and all intellectual property rights therein and all other proprietary
information of such Assignor, including, but not limited to, Trade Secrets,
(ix) all other Goods, General Intangibles, Chattel Paper, Documents and
Instruments (other than the Pledged
201
EXHIBIT I
Page 3
Securities), and (x) all Proceeds and products of any and all of the foregoing
(all of the above, collectively, the "Collateral").
(b) The security interests of the Collateral Agent under this
Agreement extend to all Collateral of the kind which is the subject of this
Agreement which any Assignor may acquire at any time during the continuation of
this Agreement.
1.2. Power of Attorney. Each Assignor hereby constitutes and
appoints the Collateral Agent its true and lawful attorney, irrevocably, with
full power after the occurrence of and during the continuance of an Event of
Default (in the name of such Assignor or otherwise), in the Collateral Agent's
reasonable discretion, to take any action and to execute any instrument which
the Collateral Agent may reasonably deem necessary or advisable to accomplish
the purposes of this Agreement, which appointment as attorney is coupled with
an interest.
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
2.1. Necessary Filings. All filings, registrations and
recordings necessary or appropriate to create, preserve, protect and perfect
the security interest granted by such Assignor to the Collateral Agent hereby
in respect of the Collateral have been filed or concurrently herewith are being
filed and the security interest granted to the Collateral Agent pursuant to
this Agreement in and to the Collateral constitutes or shall constitute upon
such filing a perfected security interest therein prior to the rights of all
other Persons therein and subject to no other Liens, except that the Collateral
may be subject to the security interests evidenced by the financing statements
disclosed on Annex A hereto, but only to the respective date, if any, set forth
on Annex A (the "Permitted Filings") and to any other Permitted Liens and is or
shall be entitled to all the rights, priorities and benefits afforded by the
Uniform Commercial Code or other relevant law as enacted in any relevant
jurisdiction to perfected security interests.
2.2. No Liens. Such Assignor is, and as to Collateral acquired
by it from time to time after the date hereof such Assignor will be, the owner
of all Collateral free from any Lien, security interest, encumbrance or other
right, title or interest of any Person (other than Liens created hereby,
Permitted Liens or Liens evidenced by the Permitted Filings), and such Assignor
shall defend the Collateral against all claims and demands of all Persons at
any time claiming the same or any interest therein adverse to the Collateral
Agent.
202
EXHIBIT I
Page 4
2.3. Other Financing Statements. As of the date hereof, there
is no financing statement (or similar statement or instrument of registration
under the law of any jurisdiction) on file or of record in any relevant
jurisdiction covering or purporting to cover any interest of any kind in the
Collateral except as disclosed in Annex A hereto and as may be filed in
connection with Permitted Liens and so long as the Total Commitment has been
terminated or any Letter of Credit or Note remains outstanding or any of the
Obligations remain unpaid or any Interest Rate Protection or Other Hedging
Agreement remains in effect or any Obligations are owed with respect thereto,
such Assignor will not execute or authorize to be filed in any public office
any financing statement (or similar statement or instrument of registration
under the law of any jurisdiction) or statements relating to the Collateral,
except financing statements filed or to be filed in respect of and covering the
security interests granted hereby by such Assignor or in respect of the
Permitted Liens.
2.4. Chief Executive Office; Records. The chief executive
office of each Assignor is located at the address indicated on Annex B hereto
for such Assignor. Such Assignor will not move its chief executive office
except to such new location as such Assignor may establish in accordance with
the last sentence of this Section 2.4. The originals of all documents
evidencing all Receivables and Contract Rights and Trade Secrets of such
Assignor and the only original books of account and records of such Assignor
relating thereto are, and will continue to be, kept at such chief executive
office, at such other locations shown on Annex B hereto or at such new
locations as such Assignor may establish in accordance with the last sentence
of this Section 2.4. All Receivables and Contract Rights of such Assignor are,
and will continue to be, maintained at, and controlled and directed (including,
without limitation, for general accounting purposes) from, the office locations
described above. No Assignor shall establish new locations for such offices
until (i) it shall have given to the Collateral Agent not less than 30 days'
prior written notice of its intention to do so, clearly describing such new
location and providing such other information in connection therewith as the
Collateral Agent may reasonably request, (ii) with respect to such new
location, it shall have taken all action, reasonably satisfactory to the
Collateral Agent, to maintain the security interest of the Collateral Agent in
the Collateral intended to be granted and perfected hereby at all times fully
perfected and in full force and effect, (iii) at the reasonable request of the
Collateral Agent, it shall have furnished an opinion of counsel acceptable to
the Collateral Agent to the effect that all financing or continuation
statements and amendments or supplements thereto have been filed in the
appropriate filing office or offices, and all other actions (including, without
limitation, the payment of all filing fees and taxes, if any, payable in
connection with such filings) have been taken, in order to perfect (and
maintain the perfection and priority of) the security interest granted hereby
and (iv) the Collateral Agent shall have received evidence that all other
actions (including, without limitation, the payment of all filing fees and
taxes, if any, payable in connection with such filings) have been taken, in
order to perfect (and maintain the perfection and priority of) the security
interest granted hereby.
2.5. Location of Inventory and Equipment. All Inventory and
Equipment held on the date hereof by each Assignor is located at one of the
locations shown on Annex C hereto. Each Assignor agrees that all Inventory and
Equipment now held or subsequently acquired by it (other
203
EXHIBIT I
Page 5
than (i) immaterial Inventory and (ii) Inventory and Equipment in transit in
the ordinary course of business) shall be kept at (or shall be in transport to)
any one of the locations shown on Annex C hereto or such new location as such
Assignor may establish in accordance with the last sentence of this Section
2.5. Any Assignor may establish a new location for Inventory and Equipment
only if (i) it shall have given to the Collateral Agent not less than 15 days
prior written notice of its intention so to do, clearly describing such new
location and providing such other information in connection therewith as the
Collateral Agent may request, (ii) with respect to such new location, it shall
have taken all action satisfactory to the Collateral Agent to maintain the
security interest of the Collateral Agent in the Collateral intended to be
granted hereby at all times fully perfected and in full force and effect, (iii)
at the reasonable request of the Collateral Agent, it shall have furnished an
opinion of counsel acceptable to the Collateral Agent to the effect that all
financing or continuation statements and amendments or supplements thereto have
been filed in the appropriate filing office or offices, and (iv) the Collateral
Agent shall have received evidence that all other actions (including, without
limitation, the payment of all filing fees and taxes, if any, payable in
connection with such filings) have been taken, in order to perfect (and
maintain the perfection and priority of) the security interest granted hereby.
2.6. Recourse. This Agreement is made with full recourse to
each Assignor and pursuant to and upon all the warranties, representations,
covenants and agreements on the part of such Assignor contained herein, in the
other Credit Documents, in the Interest Rate Protection or Other Hedging
Agreements and otherwise in writing in connection herewith or therewith.
2.7. Trade Names; Change of Name. No Assignor has or operates
in any jurisdiction under, or in the preceding 12 months has had or has
operated in any jurisdiction under, any trade names, fictitious names or other
names (including, without limitation, any names of divisions or operations)
except its legal name and such other trade, fictitious or other names as are
listed on Annex D hereto. No Assignor shall change its legal name or assume or
operate in any jurisdiction under any trade, fictitious or other name in any
manner which might make any financing statement or continuation statement filed
in connection therewith seriously misleading within the meaning of Section 9-
402(7) of the UCC except those names listed on Annex D hereto and new names
(including, without limitation, any names of divisions or operations)
established in accordance with the last sentence of this Section 2.8. No
Assignor shall assume or operate in any jurisdiction under any new trade,
fictitious or other name that would make any financing statement or
continuation statement filed in connection therewith, seriously misleading
within the meaning of Section 9-402(7) of the UCC until (i) it shall have given
to the Collateral Agent not less than 30 days' prior written notice of its
intention so to do, clearly describing such new name and the jurisdictions in
which such new name shall be used and providing such other information in
connection therewith as the Collateral Agent may reasonably request, (ii) with
respect to such new name, it shall have taken all action to maintain the
security interest of the Collateral Agent in the Collateral intended to be
granted hereby at all times fully perfected and in full force and effect and
(iii) at the reasonable request of the Collateral Agent, it shall have
furnished an opinion of counsel acceptable to the Collateral Agent to the
effect that all financing or continuation statements and amendments or
supplements thereto
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have been filed in the appropriate filing office or offices, and all other
actions (including, without limitation, the payment of all filing fees and
taxes, if any, payable in connection with such filings) have been taken, in
order to perfect (and maintain the perfection and priority of) the security
interest granted hereby.
ARTICLE III
SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS
3.1. Additional Representations and Warranties. As of the time
when each of its Receivables arises, each Assignor shall be deemed to have
represented and warranted that such Receivable, and all records, papers and
documents relating thereto (if any) are genuine and in all respects what they
purport to be, and that all papers and documents (if any) relating thereto to
the best knowledge of such Assignor (i) will represent the genuine, legal,
valid and binding obligation of the account debtor evidencing indebtedness
unpaid and owed by the respective account debtor arising out of the performance
of labor or services or the sale or lease and delivery of the merchandise
listed therein, or both, (ii) will be the only original writings evidencing and
embodying such obligation of the account debtor named therein (other than
copies created for general accounting purposes), (iii) will evidence true and
valid obligations, enforceable in accordance with their respective terms and
(iv) will be in compliance and will conform in all material respects with all
applicable federal, state and local laws and applicable laws of any relevant
foreign jurisdiction.
3.2. Maintenance of Records. Each Assignor will keep and
maintain at its own cost and expense satisfactory and complete records of its
Receivables and Contracts, including, but not limited to, the originals of all
documentation (including each Contract) with respect thereto, records of all
payments received, all credits granted thereon, all merchandise returned and
all other dealings therewith, and such Assignor will make the same available on
such Assignor's premises to the Collateral Agent for inspection, at such
Assignor's own cost and expense, at any and all reasonable times and intervals
and to such reasonable extent as the Collateral Agent may request; provided,
however, if no Event of Default has occurred and is then continuing, the
Collateral Agent shall give such Assignor prior written notice of any such
inspection. Upon the occurrence and during the continuance of an Event of
Default and upon the request of the Collateral Agent, such Assignor shall, at
its own cost and expense, deliver all tangible evidence of its Receivables and
Contract Rights (including, without limitation, all documents evidencing the
Receivables and all Contracts) and such books and records to the Collateral
Agent or to its representatives (copies of which evidence and books and records
may be retained by such Assignor). Upon the occurrence and during the
continuance of an Event of Default, if the Collateral Agent so directs, such
Assignor shall legend, in form and manner reasonably satisfactory to the
Collateral Agent, the Receivables and the Contracts, as well as books, records
and documents of such Assignor evidencing or pertaining to such Receivables and
Contracts with an appropriate reference to the fact that such Receivables and
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Contracts have been assigned to the Collateral Agent and that the Collateral
Agent has a security interest therein.
3.3. Direction to Account Debtors; Contracting Parties; etc.
Upon the occurrence and during the continuance of an Event of Default, and if
the Collateral Agent so directs any Assignor, to the extent permitted by
applicable law, such Assignor agrees (i) to cause all payments on account of
the Receivables and Contracts to be made directly to the Cash Collateral
Account, (ii) that the Collateral Agent may, at its option, directly notify the
obligors with respect to any Receivables and/or under any Contracts to make
payments with respect thereto as provided in the preceding clause (i) and (ii)
that the Collateral Agent may enforce collection of any such Receivables and
Contracts and may adjust, settle or compromise the amount of payment thereof,
in the same manner and to the same extent as such Assignor. Without notice to
or assent by any Assignor, the Collateral Agent may apply any or all amounts
then in, or thereafter deposited in, the Cash Collateral Account which
application shall be effected in the manner provided in Section 7.4 of this
Agreement. The costs and expenses (including reasonable attorneys' fees) of
collection, whether incurred by the relevant Assignor or the Collateral Agent,
shall be borne by the relevant Assignor.
3.4. Modification of Terms; etc. No Assignor shall rescind or
cancel any indebtedness evidenced by any Receivable or under any Contract, or
modify any term relating to such indebtedness or make any adjustment with
respect thereto, or extend or renew the same, or compromise or settle any
material dispute, claim, suit or legal proceeding relating thereto, or sell any
Receivable or Contract, or interest therein, without the prior written consent
of the Collateral Agent (not to be unreasonably withheld), except as permitted
by Section 3.5 hereof. Each Assignor will duly fulfill all obligations on its
part to be fulfilled under or in connection with the Receivables and Contracts
and will do nothing to impair the rights of the Collateral Agent in the
Receivables or Contracts.
3.5. Collection. Each Assignor shall endeavor to cause to be
collected from the account debtor named in each of its Receivables or obligor
under any Contract, as and when due (including, without limitation, amounts
which are delinquent, such amounts to be collected in accordance with generally
accepted lawful collection procedures) any and all amounts owing under or on
account of such Receivable or Contract, and apply forthwith upon receipt
thereof all such amounts as are so collected to the outstanding balance of such
Receivable or under such Contract, except that, unless an Event of Default has
occurred and is continuing, any Assignor may allow in the ordinary course of
business as adjustments to amounts owing under its Receivables and Contracts
(i) an extension or renewal of the time or times of payment, or settlement for
less than the total unpaid balance, which such Assignor finds appropriate in
accordance with sound business judgment and (ii) a refund or credit due as a
result of returned or damaged merchandise or improperly performed services.
The reasonable costs and expenses (including, without limitation, reasonable
attorneys' fees) of collection, whether incurred by an Assignor or the
Collateral Agent, shall be borne by the relevant Assignor.
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3.6. Instruments. If any Assignor owns or acquires any
Instrument constituting Collateral, such Assignor will within 15 days notify
the Collateral Agent thereof, and upon request by the Collateral Agent will
promptly deliver such Instrument to the Collateral Agent appropriately endorsed
to the order of the Collateral Agent as further security hereunder.
3.7. Further Actions. Each Assignor will, at its own expense,
make, execute, endorse, acknowledge, file and/or deliver to the Collateral
Agent from time to time such vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers
of attorney, certificates, reports and other assurances or instruments and take
such further steps relating to its Receivables, Contracts, Instruments and
other property or rights covered by the security interest hereby granted, as
the Collateral Agent may reasonably require.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING MARKS
4.1. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful exclusive owner of the
Marks listed in Annex E hereto for such Assignor and that said listed Marks
include all the United States federal registrations or applications registered
in the United States Patent and Trademark Office. Each Assignor represents and
warrants that it owns or is licensed to use or is not prohibited from using all
Marks that it uses. Each Assignor further warrants that it is aware of no
third party claim that any aspect of such Assignor's present or contemplated
business operations infringes or will infringe any Mark. Each Assignor
represents and warrants that it is the owner of record of all United States
registrations and applications listed in Annex E hereto and that said
registrations are valid, subsisting, have not been canceled and that such
Assignor is not aware of any third-party claim that any of said registrations
is invalid or unenforceable. Each Assignor hereby grants to the Collateral
Agent an absolute power of attorney to sign, upon the occurrence and during the
continuance of an Event of Default, any document which may be required by the
United States Patent and Trademark Office in order to effect an absolute
assignment of all right, title and interest in each Mark and associated
goodwill, and record the same.
4.2. Licenses and Assignments. Other than the license
agreements listed on Annex F hereto and any extensions or renewals thereof,
each Assignor hereby agrees not to divest itself of any right under any
Significant Mark absent prior written approval of the Collateral Agent, except
that such Assignor may license such a Mark in the ordinary course of business
provided that such license does not materially interfere with the business of
the Borrower or any Subsidiary.
4.3. Infringements. Each Assignor agrees, promptly upon
learning thereof, to notify the Collateral Agent in writing of the name and
address of, and to furnish such pertinent information that may be available
with respect to, any party who may be infringing or otherwise violating any of
such Assignor's rights in and to any Significant Mark, or with respect to any
party claiming that
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such Assignor's use of any Significant Mark violates any property right of that
party, in each case to the extent that such Assignor reasonably believes that
such infringement or violation is material to its business. Each Assignor
further agrees, if consistent with good business practice and unless otherwise
agreed by the Collateral Agent, to diligently prosecute any Person infringing
any Significant Mark to the extent that such Assignor reasonably believes that
such infringement is material to its business.
4.4. Preservation of Marks. Each Assignor agrees to use its
Significant Marks in interstate commerce during the time in which this
Agreement is in effect, sufficiently to preserve such Significant Marks as
trademarks or service marks registered under the laws of the United States.
4.5. Maintenance of Registration. Each Assignor shall, at its
own expense, diligently process all documents required by the Trademark Act of
1946, 15 U.S.C. Sections 1051 et seq. to maintain trademark registrations,
including but not limited to affidavits of use and applications for renewals of
registration in the United States Patent and Trademark Office for all of its
Significant Marks pursuant to 15 U.S.C. Sections 1058(a), 1059 and 1065, and
shall pay all fees and disbursements in connection therewith and shall not
abandon any such filing of affidavit of use or any such application of renewal
prior to the exhaustion of all reasonable administrative and judicial remedies
without prior written consent of the Collateral Agent.
4.6. Future Registered Marks. If any Mark registration issues
hereafter to any Assignor as a result of any application now or hereafter
pending before the United States Patent and Trademark Office, within 30 days of
receipt of such certificate, such Assignor shall deliver to the Collateral
Agent a copy of such certificate, and a grant of security in such Mark to the
Collateral Agent, confirming the grant thereof hereunder, the form of such
confirmatory grant to be substantially the same as the form hereof.
4.7. Remedies. If an Event of Default shall occur and be
continuing, the Collateral Agent may, by written notice to the relevant
Assignor, take any or all of the following actions: (i) declare the entire
right, title and interest of such Assignor in and to each of its Marks and the
goodwill of the business associated therewith, together with all trademark
rights and rights of protection to the same, vested in the Collateral Agent for
the benefit of the Secured Creditors, in which event such rights, title and
interest shall immediately vest, in the Collateral Agent for the benefit of the
Secured Creditors, in which case the Collateral Agent shall be entitled to
exercise the power of attorney referred to in Section 4.1 to execute, cause to
be acknowledged and notarized and record said absolute assignment with the
applicable agency; (ii) take and use or sell the Marks and the goodwill of such
Assignor's business symbolized by the Marks and the right to carry on the
business and use the assets of such Assignor in connection with which the Marks
have been used; and (iii) direct such Assignor to refrain, in which event such
Assignor shall refrain, from using the Marks in any manner whatsoever, directly
or indirectly, and, if requested by the Collateral Agent, change such
Assignor's corporate name to eliminate therefrom any use of any Mark and
execute such other and further documents that the Collateral Agent may request
to further confirm this and to
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transfer ownership of the Marks and registrations and any pending trademark
application in the United States Patent and Trademark Office or any equivalent
government agency or office in any foreign jurisdiction to the Collateral
Agent.
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS AND COPYRIGHTS AND TRADE SECRETS
5.1. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful exclusive owner of all
rights in (i) all material Trade Secrets necessary to operate the business of
such Assignor, (ii) the Patents listed in Annex G hereto for such Assignor and
(iii) the Copyrights listed in Annex H hereto for such Assignor, that to the
best of its knowledge said Patents include all the United States patents and
applications for United States patents that such Assignor now owns and that
said Copyrights constitute all the United States copyrights registered with the
United States Copyright Office and applications for United States copyrights
that such Assignor now owns and that are necessary in the conduct of the
business of such Assignor. Each Assignor represents and warrants that it owns
or is licensed to practice under all Patents and Copyrights that it now uses or
practices under. Each Assignor further warrants that it is aware of no third
party claim that any aspect of such Assignor's present or contemplated business
operations infringes or will infringe any patent or any copyright or such
Assignor has misappropriated any Trade Secrets or proprietary information.
Each Assignor hereby grants to the Collateral Agent an absolute power of
attorney to sign, upon the occurrence and during the continuance of any Event
of Default, any document which may be required by the United States Patent and
Trademark Office or the United States Copyright Office in order to effect an
absolute assignment of all right, title and interest in each Patent and
Copyright, and record the same.
5.2. Licenses and Assignments. Other than the license
agreements listed on Annex F hereto and any extensions or renewals thereof,
each Assignor hereby agrees not to divest itself of any right under any
Significant Patent or Significant Copyright absent prior written approval of
the Collateral Agent.
5.3. Infringements. Each Assignor agrees, promptly upon
learning thereof, to furnish the Collateral Agent in writing with all pertinent
information available to such Assignor with respect to any infringement or
other violation of such Assignor's rights in and to any Significant Patent or
Significant Copyright, or with respect to any claim that practice of any
Significant Patent or Significant Copyright violates any property right of that
party, or with respect to any misappropriation of any Trade Secret or any claim
that such Assignor's practice of any Trade Secret relates any property right of
a third party, in each case to the extent that such Assignor reasonably
believes that such infringement or violation is material to its business. Each
Assignor further agrees, consistent with good business practice and absent
direction of the Collateral Agent to the contrary,
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diligently to prosecute any Person infringing any Significant Patent or
Significant Copyright or any Person misappropriating any of such Assignor's
Trade Secrets to the extent that such Assignor reasonably believes that such
infringement or misappropriation is material to its business.
5.4. Maintenance of Patents. At its own expense, each Assignor
shall make timely payment of all post-issuance fees required pursuant to 35
U.S.C. Section 41 to maintain in force rights under each Significant Patent.
5.5. Prosecution of Patent Application. At its own expense,
each Assignor shall diligently prosecute all applications for Significant
Patents listed in Annex G hereto for such Assignor and shall not abandon any
such application prior to exhaustion of all reasonable administrative and
judicial remedies, absent written consent of the Collateral Agent.
5.6. Other Patents and Copyrights. Within 30 days of its
acquisition of a Patent or Copyright, or of its filing of an application for a
Patent or Copyright, each Assignor shall deliver to the Collateral Agent a copy
of said Patent or Copyright or such application, as the case may be, with a
grant of security as to such Patent or Copyright, as the case may be,
confirming the grant thereof hereunder, the form of such confirmatory grant to
be substantially the same as the form hereof.
5.7. Remedies. If an Event of Default shall occur and be
continuing, the Collateral Agent may by written notice to the relevant
Assignor, take any or all of the following actions: (i) declare the entire
right, title, and interest of such Assignor in each of the Patents and
Copyrights vested in the Collateral Agent for the benefit of the Secured
Creditors, in which event such right, title, and interest shall immediately
vest in the Collateral Agent for the benefit of the Secured Creditors, in which
case the Collateral Agent shall be entitled to exercise the power of attorney
referred to in Section 5.1 hereof to execute, cause to be acknowledged and
notarized and record said absolute assignment with the applicable agency; (ii)
take and practice or sell the Patents and Copyrights; and (iii) direct such
Assignor to refrain, in which event such Assignor shall refrain, from
practicing the Patents and using the Copyrights directly or indirectly, and
such Assignor shall execute such other and further documents as the Collateral
Agent may request further to confirm this and to transfer ownership of the
Patents and Copyrights to the Collateral Agent for the benefit of the Secured
Creditors.
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1. Protection of Collateral Agent's Security. Each Assignor
will do nothing to impair the rights of the Collateral Agent in the Collateral.
Each Assignor will at all times keep its Inventory and Equipment insured in
favor of the Collateral Agent, at such Assignor's own expense to the extent and
in the manner provided in the Credit Agreement. If any Assignor shall fail to
insure
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its Inventory and Equipment in accordance with the preceding sentence, or if
any Assignor shall fail to so endorse and deposit all policies or certificates
with respect thereto to the extent required by the Credit Agreement, the
Collateral Agent shall have the right (but shall be under no obligation) to
procure such insurance and such Assignor agrees to promptly reimburse the
Collateral Agent for all costs and expenses of procuring such insurance. The
Collateral Agent shall, at the time such proceeds of such insurance are
distributed to the Secured Creditors, apply such proceeds in accordance with
Section 7.4 hereof or as otherwise provided in the Credit Agreement. Each
Assignor assumes all liability and responsibility in connection with the
Collateral acquired by it and the liability of such Assignor to pay the
Obligations shall in no way be affected or diminished by reason of the fact
that such Collateral may be lost, destroyed, stolen, damaged or for any reason
whatsoever unavailable to such Assignor.
6.2. Warehouse Receipts Non-Negotiable. Each Assignor agrees
that if any warehouse receipt or receipt in the nature of a warehouse receipt
is issued with respect to any of its Inventory, such warehouse receipt or
receipt in the nature thereof shall not be "negotiable" (as such term is used
in Section 7-104 of the Uniform Commercial Code as in effect in any relevant
jurisdiction or under other relevant law).
6.3. Further Actions. Each Assignor will, at its own expense,
make, execute, endorse, acknowledge, file and/or deliver to the Collateral
Agent from time to time such lists, descriptions and designations of its
Collateral, warehouse receipts, receipts in the nature of warehouse receipts,
bills of lading, documents of title, vouchers, invoices, schedules,
confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, reports and other assurances or
instruments and take such further steps relating to the Collateral and other
property or rights covered by the security interest hereby granted, which the
Collateral Agent deems reasonably appropriate or advisable to perfect, preserve
or protect its security interest in the Collateral.
6.4. Financing Statements. Each Assignor agrees to execute and
deliver to the Collateral Agent such financing statements, in form acceptable
to the Collateral Agent, as the Collateral Agent may from time to time request
or as are necessary or desirable in the opinion of the Collateral Agent to
establish and maintain a valid, enforceable, first priority perfected security
interest in the Collateral as provided herein and the other rights and security
contemplated hereby all in accordance with the Uniform Commercial Code as
enacted in any and all relevant jurisdictions or any other relevant law. Each
Assignor will pay any applicable filing fees, recordation taxes and related
expenses relating to its Collateral. Each Assignor hereby authorizes the
Collateral Agent to file any such financing statements without the signature of
such Assignor where permitted by law.
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ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
7.1. Remedies; Obtaining the Collateral Upon Default. Each
Assignor agrees that, if any Event of Default shall have occurred and be
continuing, then and in every such case, subject to any mandatory requirements
of applicable law then in effect, the Collateral Agent, in addition to any
rights now or hereafter existing under applicable law, shall have all rights as
a secured creditor under the Uniform Commercial Code in all relevant
jurisdictions and may:
(a) personally, or by agents or attorneys, immediately take
possession of the Collateral or any part thereof, from such Assignor or
any other Person who then has possession of any part thereof with or
without notice or process of law, and for that purpose may enter upon
such Assignor's premises where any of the Collateral is located and
remove the same and use in connection with such removal any and all
services, supplies, aids and other facilities of such Assignor; and
(b) instruct the obligor or obligors on any agreement,
instrument or other obligation (including, without limitation, the
Receivables and the Contracts) constituting the Collateral to make any
payment required by the terms of such agreement, instrument or other
obligation directly to the Collateral Agent and may exercise any and all
remedies of such Assignor in respect of such Collateral; and
(c) withdraw all moneys, securities and instruments in the Cash
Collateral Account for application to the Obligations in accordance with
Section 7.4 hereof; and
(d) sell, assign or otherwise liquidate, or direct such Assignor
to sell, assign or otherwise liquidate, any or all of the Collateral or
any part thereof, and take possession of the proceeds of any such sale
or liquidation; and
(e) take possession of the Collateral or any part thereof, by
directing the relevant Assignor in writing to deliver the same to the
Collateral Agent at any place or places designated by the Collateral
Agent, in which event such Assignor shall at its own expense:
(i) forthwith cause the same to be moved to the place or
places so designated by the Collateral Agent and there delivered
to the Collateral Agent, and
(ii) store and keep any Collateral so delivered to the
Collateral Agent at such place or places pending further action
by the Collateral Agent as provided in Section 7.2 hereof, and
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(iii) while the Collateral shall be so stored and kept, provide
such guards and maintenance services as shall be necessary to
protect the same and to preserve and maintain them in good
condition; and
(f) license or sublicense (to the extent not in violation of
the license), whether on an exclusive or nonexclusive basis, any Marks,
Patents or Copyrights included in the Collateral for such term and on
such conditions and in such manner as the Collateral Agent shall in its
sole judgment determine;
it being understood that each Assignor's obligation so to deliver the
Collateral is of the essence of this Agreement and that, accordingly, upon
application to a court of equity having jurisdiction, the Collateral Agent
shall be entitled to a decree requiring specific performance by such Assignor
of said obligation.
7.2. Remedies; Disposition of the Collateral. Any Collateral
repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof and
any other Collateral whether or not so repossessed by the Collateral Agent, may
be sold, assigned, leased or otherwise disposed of under one or more contracts
or as an entirety, and without the necessity of gathering at the place of sale
the property to be sold, and in general in such manner, at such time or times,
at such place or places and on such terms as the Collateral Agent may, in
compliance with any mandatory requirements of applicable law, determine to be
commercially reasonable. Any of the Collateral may be sold, leased or
otherwise disposed of, in the condition in which the same existed when taken by
the Collateral Agent or after any overhaul or repair at the expense of the
relevant Assignor which the Collateral Agent shall determine to be commercially
reasonable. Any such disposition which shall be a private sale or other
private proceedings permitted by such requirements shall be made upon not less
than 10 days' written notice to the relevant Assignor specifying the time at
which such disposition is to be made and the intended sale price or other
consideration therefor, and shall be subject, for the 10 days after the giving
of such notice, to the right of the relevant Assignor or any nominee of such
Assignor to acquire the Collateral involved at a price or for such other
consideration at least equal to the intended sale price or other consideration
so specified. Any such disposition which shall be a public sale permitted by
such requirements shall be made upon not less than 10 days' written notice to
the relevant Assignor specifying the time and place of such sale and, in the
absence of applicable requirements of law, shall be by public auction (which
may, at the Collateral Agent's option, be subject to reserve), after
publication of notice of such auction not less than 10 days prior thereto in
two newspapers in general circulation in the City of New York. To the extent
permitted by any such requirement of law, the Collateral Agent and the Secured
Creditors may bid for and become the purchaser of the Collateral or any item
thereof, offered for sale in accordance with this Section without
accountability to the relevant Assignor. If, under mandatory requirements of
applicable law, the Collateral Agent shall be required to make disposition of
the Collateral within a period of time which does not permit the giving of
notice to the relevant Assignor as hereinabove specified, the Collateral Agent
need give such Assignor only such notice of disposition as shall be reasonably
practicable in view of such mandatory requirements of applicable law. Each
Assignor agrees to do or cause to be
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done all such other acts and things as may be reasonably necessary to make such
sale or sales of all or any portion of the Collateral valid and binding and in
compliance with any and all applicable laws, regulations, orders, writs,
injunctions, decrees or awards of any and all courts, arbitrators or
governmental instrumentalities, domestic or foreign, having jurisdiction over
any such sale or sales, all at such Assignor's expense.
7.3. Waiver of Claims. Except as otherwise provided in this
Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S
TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH SUCH ASSIGNOR
WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES
OR OF ANY STATE, and each Assignor hereby further waives, to the extent
permitted by law:
(a) all damages occasioned by such taking of possession except
any damages which are the direct result of the Collateral Agent's gross
negligence or willful misconduct;
(b) all other requirements as to the time, place and terms of
sale or other requirements with respect to the enforcement of the
Collateral Agent's rights hereunder; and
(c) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable
law in order to prevent or delay the enforcement of this Agreement or
the absolute sale of the Collateral or any portion thereof, and each
Assignor, for itself and all who may claim under it, insofar as it or
they now or hereafter lawfully may, hereby waives the benefit of all
such laws.
Any sale of, or the grant of options to purchase, or any other realization
upon, any Collateral shall operate to divest all right, title, interest, claim
and demand, either at law or in equity, of the relevant Assignor therein and
thereto, and shall be a perpetual bar both at law and in equity against such
Assignor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under such Assignor.
7.4. Application of Proceeds. (a) All moneys collected by the
Collateral Agent (or, to the extent the Pledge Agreement or any Mortgage to
which any Assignor is a party requires proceeds of Collateral under such
agreement to be applied in accordance with the provisions of this Agreement,
the Pledgee or Mortgagee under such other agreement) upon any sale or other
disposition of the Collateral, together with all other moneys received by the
Collateral Agent hereunder, shall be applied as follows:
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(i) first, to the payment of all amounts owing the Collateral Agent
of the type described in clauses (iii) and (iv) of the definition of
"Obligations";
(ii) second, to the extent proceeds remain after the application
pursuant to the preceding clause (i), an amount equal to the outstanding
Primary Obligations shall be paid to the Secured Creditors as provided
in Section 7.4(e) hereof, with each Secured Creditor receiving an amount
equal to such outstanding Primary Obligations or, if the proceeds are
insufficient to pay in full all such Primary Obligations, its Pro Rata
Share of the amount remaining to be distributed;
(iii) third, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) and (ii), an amount equal to the
outstanding Secondary Obligations shall be paid to the Secured Creditors
as provided in Section 7.4(e), with each Secured Creditor receiving an
amount equal to its outstanding Secondary Obligations or, if the
proceeds are insufficient to pay in full all such Secondary Obligations,
its Pro Rata Share of the amount remaining to be distributed; and
(iv) fourth, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) through (iii), inclusive, and
following the termination of this Agreement pursuant to Section 10.9(a)
hereof, to the relevant Assignor or to whomever may be lawfully entitled
to receive such surplus.
(b) For purposes of this Agreement (i) "Pro Rata Share" shall
mean, when calculating a Secured Creditor's portion of any distribution or
amount, that amount (expressed as a percentage) equal to a fraction the
numerator of which is the then unpaid amount of such Secured Creditor's Primary
Obligations or Secondary Obligations, as the case may be, and the denominator
of which is the then outstanding amount of all Primary Obligations or Secondary
Obligations, as the case may be, (ii) "Primary Obligations" shall mean (A) in
the case of the Credit Agreement Obligations, all principal of, and interest
on, all Loans, all Unpaid Drawings theretofore made (together with all interest
accrued thereon), and the aggregate Stated Amounts of all Letters of Credit
issued (or deemed issued) under the Credit Agreement, and all Fees and (B) in
the case of the Other Obligations, all amounts due under the Interest Rate
Protection or Other Hedging Agreements (other than indemnities, fees
(including, without limitation, attorneys' fees) and similar obligations and
liabilities) and (iii) "Secondary Obligations" shall mean all Obligations other
than Primary Obligations.
(c) When payments to Secured Creditors are based upon their
respective Pro Rata Shares, the amounts received by such Secured Creditors
hereunder shall be applied (for purposes of making determinations under this
Section 7.4 only) (i) first, to their Primary Obligations and (ii) second, to
their Secondary Obligations. If any payment to any Secured Creditor of its Pro
Rata Share of any distribution would result in overpayment to such Secured
Creditor, such excess amount shall instead be distributed in respect of the
unpaid Primary Obligations or Secondary Obligations, as the case may be, of the
other Secured Creditors, with each Secured Creditor whose Primary Obligations
or Secondary Obligations, as the
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case may be, have not been paid in full to receive an amount equal to such
excess amount multiplied by a fraction the numerator of which is the unpaid
Primary Obligations or Secondary Obligations, as the case may be, of such
Secured Creditor and the denominator of which is the unpaid Primary Obligations
or Secondary Obligations, as the case may be, of all Secured Creditors entitled
to such distribution.
(d) Each of the Secured Creditors agrees and acknowledges that
if the Bank Creditors are to receive a distribution on account of undrawn
amounts with respect to Letters of Credit issued (or deemed issued) under the
Credit Agreement (which shall only occur after all outstanding Loans and Unpaid
Drawings with respect to such Letters of Credit have been paid in full), such
amounts shall be paid to the Agent under the Credit Agreement and held by it,
for the equal and ratable benefit of the Bank Creditors, as cash security for
the repayment of Obligations owing to the Bank Creditors as such. If any
amounts are held as cash security pursuant to the immediately preceding
sentence, then upon the termination of all outstanding Letters of Credit, and
after the application of all such cash security to the repayment of all
Obligations owing to the Bank Creditors after giving effect to the termination
of all such Letters of Credit, if there remains any excess cash, such excess
cash shall be returned by the Agent to the Collateral Agent for distribution in
accordance with Section 7.4(a) hereof.
(e) Except as set forth in Section 7.4(d), all payments
required to be made hereunder shall be made (i) if to the Bank Creditors, to
the Agent under the Credit Agreement for the account of the Bank Creditors, and
(ii) if to the Other Creditors, to the trustee, paying agent or other similar
representative (each a "Representative") for the Other Creditors or, in the
absence of such a Representative, directly to the Other Creditors.
(f) For purposes of applying payments received in accordance
with this Section 7.4, the Collateral Agent shall be entitled to rely upon (i)
the Agent under the Credit Agreement and (ii) the Representative for the Other
Creditors or, in the absence of such a Representative, upon the Other Creditors
for a determination (which the Agent, each Representative for any Secured
Creditors and the Secured Creditors agree (or shall agree) to provide upon
request of the Collateral Agent) of the outstanding Primary Obligations and
Secondary Obligations owed to the Bank Creditors or the Other Creditors, as the
case may be. Unless it has actual knowledge (including by way of written
notice from a Bank Creditor or an Other Creditor) to the contrary, the Agent
and each Representative, in furnishing information pursuant to the preceding
sentence, and the Collateral Agent, in acting hereunder, shall be entitled to
assume that no Secondary Obligations are outstanding. Unless it has actual
knowledge (including by way of written notice from an Other Creditor) to the
contrary, the Collateral Agent, in acting hereunder, shall be entitled to
assume that no Interest Rate Protection or Other Hedging Agreements are in
existence.
(g) It is understood and agreed that the Assignors shall
remain jointly and severally liable to the extent of any deficiency between the
amount of the proceeds of the Collateral
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hereunder and the aggregate amount of the sums referred to in clauses (i)
through (iii), inclusive, of Section 7.4(a).
7.5. Remedies Cumulative. Each and every right, power and
remedy hereby specifically given to the Collateral Agent shall be in addition
to every other right, power and remedy specifically given under this Agreement,
the Interest Rate Protection or Other Hedging Agreements, the other Credit
Documents or now or hereafter existing at law or in equity, or by statute and
each and every right, power and remedy whether specifically herein given or
otherwise existing may be exercised from time to time or simultaneously and as
often and in such order as may be deemed expedient by the Collateral Agent.
All such rights, powers and remedies shall be cumulative and the exercise or
the beginning of the exercise of one shall not be deemed a waiver of the right
to exercise any other or others. No delay or omission of the Collateral Agent
in the exercise of any such right, power or remedy and no renewal or extension
of any of the Obligations and no course of dealing between the relevant
Assignor and the Collateral Agent or any holder of any of the Obligations shall
impair any such right, power or remedy or shall be construed to be a waiver of
any Default or Event of Default or an acquiescence therein. No notice to or
demand on any Assignor in any case shall entitle it to any other or further
notice or demand in similar or other circumstances or constitute a waiver of
any of the rights of the Collateral Agent to any other or further action in any
circumstances without notice or demand. In the event that the Collateral Agent
shall bring any suit to enforce any of its rights hereunder and shall be
entitled to judgment, then in such suit the Collateral Agent may recover
expenses, including attorneys' fees, and the amounts thereof shall be included
in such judgment.
7.6. Discontinuance of Proceedings. In case the Collateral
Agent shall have instituted any proceeding to enforce any right, power or
remedy under this Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Collateral Agent, then and in every such
case the relevant Assignor, the Collateral Agent and each holder of any of the
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to the security interest created under
this Agreement, and all rights, remedies and powers of the Collateral Agent
shall continue as if no such proceeding had been instituted.
ARTICLE VIII
INDEMNITY
8.1. Indemnity. (a) Each Assignor jointly and severally agrees
to indemnify, reimburse and hold the Collateral Agent, each Secured Creditor
and their respective successors, assigns, employees, agents and servants
(hereinafter in this Section 8.1 referred to individually as "Indemnitee," and
collectively as "Indemnitees") harmless from any and all liabilities,
obligations, damages, injuries, penalties, claims, demands, actions, suits,
judgments and any and all costs,
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expenses or disbursements (including reasonable attorneys' fees and expenses)
(for the purposes of this Section 8.1 the foregoing are collectively called
"expenses") of whatsoever kind and nature imposed on, asserted against or
incurred by any of the Indemnitees in any way relating to or arising out of
this Agreement, any Interest Rate Protection or Other Hedging Agreement, any
other Credit Document or any other document executed in connection herewith or
therewith or in any other way connected with the administration of the
transactions contemplated hereby or thereby or the enforcement of any of the
terms of, or the preservation of any rights under any thereof, or in any way
relating to or arising out of the manufacture, ownership, ordering, purchase,
delivery, control, acceptance, lease, financing, possession, operation,
condition, sale, return or other disposition, or use of the Collateral
(including, without limitation, latent or other defects, whether or not
discoverable), any contract claim or, to the maximum extent permitted under
applicable law, the violation of the laws of any country, state or other
governmental body or unit, or any tort (including, without limitation, claims
arising or imposed under the doctrine of strict liability, or for or on account
of injury to or the death of any Person (including any Indemnitee), or property
damage); provided that no Indemnitee shall be indemnified pursuant to this
Section 8.1(a) for expenses to the extent caused by the gross negligence or
willful misconduct of such Indemnitee. Each Assignor agrees that upon written
notice by any Indemnitee of the assertion of such a liability, obligation,
damage, injury, penalty, claim, demand, action, suit or judgment, the relevant
Assignor shall assume full responsibility for the defense thereof. Each
Indemnitee agrees to use its best efforts to promptly notify the relevant
Assignor of any such assertion of which such Indemnitee has knowledge.
(b) Without limiting the application of Section 8.1(a) hereof,
each Assignor agrees, jointly and severally, to pay, or reimburse the
Collateral Agent for any and all reasonable fees, costs and expenses of
whatever kind or nature incurred in connection with the creation, preservation
or protection of the Collateral Agent's Liens on, and security interest in, the
Collateral, including, without limitation, all reasonable fees and taxes in
connection with the recording or filing of instruments and documents in public
offices, payment or discharge of any taxes or Liens upon or in respect of the
Collateral, premiums for insurance with respect to the Collateral and all other
reasonable fees, costs and expenses in connection with protecting, maintaining
or preserving the Collateral and the Collateral Agent's interest therein,
whether through judicial proceedings or otherwise, or in defending or
prosecuting any actions, suits or proceedings arising out of or relating to the
Collateral.
(c) Without limiting the application of Section 8.1(a) or (b)
hereof, each Assignor agrees, jointly and severally, to pay, indemnify and hold
each Indemnitee harmless from and against any loss, costs, damages and expenses
which such Indemnitee may suffer, expend or incur in consequence of or growing
out of any misrepresentation by any Assignor in this Agreement, any Interest
Rate Protection or Other Hedging Agreement, any other Credit Document or in any
writing contemplated by or made or delivered pursuant to or in connection with
this Agreement, any Interest Rate Protection or Other Hedging Agreement or any
other Credit Document.
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(d) If and to the extent that the obligations of any Assignor
under this Section 8.1 are unenforceable for any reason, such Assignor hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
8.2. Indemnity Obligations Secured by Collateral; Survival. Any
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all the
Notes issued under the Credit Agreement, the termination of all Interest Rate
Protection or Other Hedging Agreements and the payment of all other Obligations
and notwithstanding the discharge thereof.
ARTICLE IX
DEFINITIONS
The following terms shall have the meanings herein specified.
Such definitions shall be equally applicable to the singular and plural forms
of the terms defined.
"Agent" shall have the meaning provided in the first WHEREAS
clause of this Agreement.
"Agreement" shall mean this Security Agreement as the same may be
modified, supplemented, extended, renewed, replaced, restated or amended from
time to time in accordance with its terms.
"Assignor" shall have the meaning provided in the first paragraph
of this Agreement.
"Bank Creditor" shall have the meaning provided in the first
paragraph of this Agreement.
"Banks" shall have the meaning provided in the Credit Agreement.
"Borrower" shall have the meaning provided in the first WHEREAS
clause of this Agreement.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with the Collateral Agent for the benefit of the
Secured Creditors.
"Chattel Paper" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
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"Class" shall have the meaning provided in Section 10.2 of this
Agreement.
"Collateral" shall have the meaning provided in Section 1.1(a) of
this Agreement.
"Collateral Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Contract Rights" shall mean all rights of any Assignor
(including, without limitation, all rights to payment) under each Contract.
"Contracts" shall mean all contracts between any Assignor and one
or more additional parties (including, without limitation, (i) each partnership
agreement to which such Assignor is a party and (ii) any Interest Rate
Protection or Other Hedging Agreements), but excluding licenses, agreements and
leases, which are immaterial to the operations of the Assignor, to the extent
that the terms thereof prohibit the assignment of, or granting of a security
interest in, such licenses, agreements or leases.
"Copyrights" shall mean any United States copyright which any
Assignor now owns or hereafter acquires, including any registrations of any
Copyrights in the United States Copyright Office, as well as any application
for a United States copyright registration now or hereafter made with the
United States Copyright Office by any Assignor.
"Credit Agreement" shall have the meaning provided in the first
WHEREAS clause of this Agreement.
"Credit Agreement Obligations" shall have the meaning provided in
the definition of "Obligations" in this Article IX.
"Default" shall mean any event which, with notice or lapse of
time, or both, would constitute an Event of Default.
"Documents" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Equipment" shall mean any "equipment," as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York, now or hereafter owned by any Assignor and, in any event, shall
include, but shall not be limited to, all machinery, equipment, furnishings and
movable trade fixtures now or hereafter owned by any Assignor and any and all
additions, substitutions and replacements of any of the foregoing, wherever
located, together with all attachments, components, parts, equipment and
accessories installed thereon or affixed thereto.
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"Event of Default" shall mean any Event of Default under, and as
defined in, the Credit Agreement and shall in any event, without limitation,
include any payment default on any of the Obligations after the expiration of
any applicable grace period.
"General Intangibles" shall have the meaning provided in the
Uniform Commercial Code (other than with respect to leases that are immaterial
to the operations of any Assignor) as in effect on the date hereof in the State
of New York and shall in any event include all of any Assignor's claims,
rights, powers, privileges, authority, options, security interests, liens and
remedies under any partnership agreement to which such Assignor is a party or
with respect to any partnership of which such Assignor is a partner.
"Goods" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.
"Holdings" shall have the meaning provided in the first WHEREAS
clause of this Agreement.
"Indemnitee" shall have the meaning provided in Section 8.1 of
this Agreement.
"Instrument" shall have the meaning provided in Article 9 of the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Interest Rate Protection or Other Hedging Agreements" shall have
the meaning provided in the first paragraph of this Agreement.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof, wherever located, together
with all goods, supplies, incidentals, packaging materials, labels, materials
and any other items used or usable in manufacturing, processing, packaging or
shipping same; in all stages of production -- from raw materials through work-
in-process to finished goods -- and all products and proceeds of whatever sort
and wherever located and any portion thereof which may be returned, rejected,
reclaimed or repossessed by the Collateral Agent from any Assignor's customers,
and shall specifically include all "inventory" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor.
"Marks" shall mean all right, title and interest in and to any
trademarks and service marks and trade names now held or hereafter acquired by
any Assignor, which are registered in the United States Patent and Trademark
Office or in any similar office or agency of the United States or any state
thereof or any political subdivision thereof and any application for such
trademarks and service marks, as well as any unregistered marks used by any
Assignor in the United States and trade dress including logos, designs, trade
names, company names, business names, fictitious business
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names and other business identifiers in connection with which any of these
registered or unregistered marks are used in the United States.
"Obligations" shall mean (i) (A) the principal of and interest on
the Notes issued, and Loans made, under the Credit Agreement, and all
reimbursement obligations and Unpaid Drawings with respect to the Letters of
Credit under the Credit Agreement and (B) all other obligations and
indebtedness (including, without limitation, indemnities, Fees and interest
thereon) of any Assignor to the Bank Creditors now existing or hereafter
incurred under, arising out of, or in connection with the Credit Agreement and
the other Credit Documents and the due performance and compliance by each
Assignor with all of the terms, conditions and agreements contained in the
Credit Agreement and the other Credit Documents (all such principal, interest,
obligations and liabilities being herein collectively called the "Credit
Agreement Obligations"); (ii) all obligations and liabilities owing by each
Assignor to the Other Creditors under, or with respect to, any Interest Rate
Protection or Other Hedging Agreement, whether such Interest Rate Protection or
Other Hedging Agreement is now in existence or hereafter arising, and the due
performance and compliance by each Assignor with all of the terms, conditions
and agreements contained therein (all such obligations and liabilities
described in this clause (ii) being herein collectively called the "Other
Obligations"); (iii) any and all sums advanced by the Collateral Agent in order
to preserve the Collateral or preserve its security interest in the Collateral;
(iv) in the event of any proceeding for the collection or enforcement of any
indebtedness, obligations, or liabilities of any Assignor referred to in
clauses (i) and (ii), after an Event of Default shall have occurred and be
continuing, the reasonable expenses of taking, holding, preparing for sale or
lease, selling or otherwise disposing of or realizing on the Collateral, or of
any exercise by the Collateral Agent of its rights hereunder, together with
reasonable attorneys' fees and court costs; and (v) all amounts paid by any
Indemnitee as to which such Indemnitee has the right to reimbursement under
Section 8.1 of this Agreement. It is acknowledged and agreed that the
"Obligations" shall include extensions of credit of the types described above,
whether outstanding on the date of this Agreement or extended from time to time
after the date of this Agreement.
"Other Creditors" shall have the meaning provided in the first
paragraph of this Agreement.
"Other Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"Patents" shall mean any United States patent now or hereafter
owned by any Assignor, as well as any application for a United States patent
now or hereafter owned by any Assignor.
"Permitted Filings" shall have the meaning provided in Section
2.1 of this Agreement.
"Primary Obligations" shall have the meaning provided in Section
7.4(b) of this Agreement.
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"Pro Rata Share" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Proceeds" shall have the meaning provided in the Uniform
Commercial Code as in effect in the State of New York on the date hereof or
under other relevant law and, in any event, shall include, but not be limited
to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable to the Collateral Agent or any Assignor from time to time with respect
to any of the Collateral, (ii) any and all payments (in any form whatsoever)
made or due and payable to any Assignor from time to time in connection with
any requisition, confiscation, condemnation, seizure or forfeiture of all or
any part of the Collateral by any governmental authority (or any person acting
under color of governmental authority) and (iii) any and all other amounts from
time to time paid or payable under or in connection with any of the Collateral.
"Receivables" shall mean any "account" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event, shall include,
but shall not be limited to, all of such Assignor's rights to payment for goods
sold or leased or services performed by such Assignor, whether now in existence
or arising from time to time hereafter, including, without limitation, rights
evidenced by an account, note, contract, security agreement, chattel paper, or
other evidence of indebtedness or security, together with (i) all security
pledged, assigned, hypothecated or granted to or held by such Assignor to
secure the foregoing, (ii) all of such Assignor's right, title and interest in
and to any goods, the sale of which gave rise thereto, (iii) all guarantees,
endorsements and indemnifications on, or of, any of the foregoing, (iv) all
powers of attorney for the execution of any evidence of indebtedness or
security or other writing in connection therewith, (v) all books, records,
ledger cards, and invoices relating thereto, (vi) all evidences of the filing
of financing statements and other statements and the registration of other
instruments in connection therewith and amendments thereto, notices to other
creditors or secured parties, and certificates from filing or other
registration officers, (vii) all credit information, reports and memoranda
relating thereto, and (viii) all other writings related in any way to the
foregoing.
"Representative" shall have the meaning provided in Section
7.4(e) of this Agreement.
"Required Secured Creditors" shall mean (i) the Required Banks
(or, to the extent required by Section 13.12 of the Credit Agreement, all of
the Banks) under the Credit Agreement so long as any Credit Agreement
Obligations remain outstanding and (ii) in any situation not covered by
preceding clause (i), the holders of a majority of the outstanding principal
amount of the Other Obligations.
"Requisite Creditors" shall have the meaning provided in Section
10.2 of this Agreement.
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"Secondary Obligations" shall have the meaning provided in
Section 7.4(b) of this Agreement.
"Secured Creditors" shall have the meaning provided in the first
paragraph of this Agreement.
"Significant Copyrights" shall mean those Copyrights which the
relevant Assignor believes in its reasonable judgment to be material to its
business.
"Significant Marks" shall mean those Marks which the relevant
Assignor believes in its reasonable judgment to be material to its business.
"Significant Patents" shall mean those Patents which the relevant
Assignor believes in its reasonable judgment to be material to its business.
"Termination Date" shall have the meaning provided in Section
10.9 of this Agreement.
"Trade Secrets" shall mean any know-how, technology, product
formulations, procedures and product and manufacturing specifications or
standards now or hereafter utilized in the relevant Assignor's business.
ARTICLE X
MISCELLANEOUS
10.1. Notices. All such notices and communications hereunder
shall be sent or delivered by mail, telecopier or overnight courier service and
all such notices and communications shall, when mailed, telecopied, or sent by
overnight courier, be effective when delivered to the overnight courier, or
sent by telecopier and when mailed shall be effective three Business Days
following deposit in the mail with proper postage, except that notices and
communications to the Collateral Agent shall not be effective until received by
the Collateral Agent. All notices, requests, demands or other communications
shall be in writing and addressed as follows:
(a) if to any Assignor, at the address set forth opposite its
signature below;
with a copy to:
Hicks, Muse, Tate & Furst Incorporated
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200 Crescent Court
Suite 1600
Dallas, Texas 75201
Attn: Thomas O. Hicks,
John R. Muse,
Jack D. Furst and
Lawrence D. Stuart, Jr.
Telephone: (214) 740-7300
Telecopy: (214) 740-7313
and
Hicks, Muse, Tate & Furst Incorporated
1325 Avenue of the Americas
25th Floor
New York, New York 10019
Attn: Charles W. Tate
Telephone: (212) 424-1400
Telecopy: (212) 424-1450
(b) if to the Collateral Agent:
Bankers Trust Company
130 Liberty Street
30th Floor
New York, New York 10006
Attention: Mary Kay Coyle
Telephone: 212-250-9094
Telecopy: 212-250-7218
(c) if to any Bank Creditor, either (A) to the Agent, at the
address of the Agent specified in the Credit Agreement or (B) at such
address as such Bank Creditor shall have specified in the Credit
Agreement;
(d) if to any Other Creditor, either (A) to the Representative
for the Other Creditors, at such address as such Representative may have
provided to the Assignors and the Collateral Agent from time to time, or
(B) directly to the Other Creditors at such address as the Other
Creditors shall have specified in writing to the Assignors and the
Collateral Agent;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
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10.2. Waiver; Amendment. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by each Assignor directly affected
thereby and the Collateral Agent (with the written consent of the Required
Banks, or to the extent required by Section 13.12 of the Credit Agreement, all
the Banks); provided, however, that any change, waiver, modification or
variance affecting the rights and benefits of a single Class of Secured
Creditors (and not all Secured Creditors in a like or similar manner) shall
require the written consent of the Requisite Creditors of such affected Class.
For the purpose of this Agreement, the term "Class" shall mean each class of
Secured Creditors, i.e., whether (i) the Bank Creditors as holders of the
Credit Agreement Obligations or (ii) the Other Creditors as the holders of the
Other Obligations; and the term "Requisite Creditors" of any Class shall mean
each of (A) with respect to the Credit Agreement Obligations, the Required
Banks and (B) with respect to the Other Obligations, the holders of at least a
majority of all obligations outstanding from time to time under the Interest
Rate Protection Agreements or Other Hedging Agreements.
10.3. Obligations Absolute. The obligations of each Assignor
hereunder shall remain in full force and effect without regard to, and shall
not be impaired by, (a) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of such
Assignor; (b) any exercise or non-exercise, or any waiver of, any right,
remedy, power or privilege under or in respect of this Agreement, any other
Credit Document or any Interest Rate Protection or Other Hedging Agreement
except as specifically set forth in a waiver granted pursuant to Section 10.2
hereof; or (c) any amendment to or modification of any Credit Document or any
Interest Rate Protection or Other Hedging Agreement or any security for any of
the Obligations; whether or not any Assignor shall have notice or knowledge of
any of the foregoing.
10.4. 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 Collateral Agent, each Secured Creditor and each
Assignor and their respective successors and assigns, provided that no Assignor
may transfer or assign any or all of its rights or obligations hereunder
without the written consent of the Required Secured Creditors. All agreements,
statements, representations and warranties made by each Assignor herein or in
any certificate or other instrument delivered by such Assignor or on its behalf
under this Agreement shall be considered to have been relied upon by the
Secured Creditors and shall survive the execution and delivery of this
Agreement, the other Credit Documents and the Interest Rate Protection or Other
Hedging Agreements regardless of any investigation made by the Secured
Creditors or on their behalf.
10.5. Headings Descriptive. The headings of the several
sections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
10.6. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such
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prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
10.7. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
10.8. Assignor's Duties. It is expressly agreed, anything
herein contained to the contrary notwithstanding, that each Assignor shall
remain liable to perform all of the obligations, if any, assumed by it with
respect to the Collateral and the Collateral Agent shall not have any
obligations or liabilities with respect to any Collateral by reason of or
arising out of this Agreement, nor shall the Collateral Agent be required or
obligated in any manner to perform or fulfill any of the obligations of any
Assignor under or with respect to any Collateral.
10.9. Termination; Release. (a) After the Termination Date,
this Agreement shall terminate (provided that all indemnities set forth herein
including, without limitation, in Section 8.1 hereof shall survive such
termination) and the Collateral Agent, at the request and expense of the
relevant Assignor, will execute and deliver to such Assignor a proper
instrument or instruments (including Uniform Commercial Code termination
statements on form UCC-3) acknowledging the satisfaction and termination of
this Agreement, and will duly assign, transfer and deliver to such Assignor
(without recourse and without any representation or warranty) such of the
Collateral of such Assignor and as has not theretofore been sold or otherwise
applied or released pursuant to this Agreement. As used in this Agreement,
"Termination Date" shall mean the date upon which the Total Commitment and all
Interest Rate Protection or Other Hedging Agreements have been terminated, no
Note under the Credit Agreement is outstanding (and all Loans have been repaid
in full), all Letters of Credit have been terminated and all Obligations then
owing have been paid in full.
(b) In the event that any part of the Collateral is sold or
otherwise disposed of in connection with a sale or other disposition permitted
by Section 9.02 of the Credit Agreement or is otherwise released at the
direction of the Required Banks (or all the Banks if required by Section 13.12
of the Credit Agreement) and the proceeds of such sale or sales or from such
release are applied in accordance with the provisions of Section 4.02 of the
Credit Agreement, to the extent required to be so applied, such Collateral will
be sold free and clear of the Liens created by this Agreement and the
Collateral Agent, at the request and expense of the relevant Assignor, will
duly assign, transfer and deliver to such Assignor (without recourse and
without any representation or warranty) such of the Collateral as is then being
(or has been) so sold or released and has not theretofore been released
pursuant to this Agreement.
(c) At any time that the relevant Assignor desires that the
Collateral Agent take any action to acknowledge or give effect to any release
of Collateral pursuant to the foregoing
227
EXHIBIT I
Page 29
Section 10.9(a) or (b), as the case may be, it shall deliver to the Collateral
Agent a certificate signed by an Authorized Officer stating that the release of
the respective Collateral is permitted pursuant to Section 10.9(a) or (b), as
the case may be.
(d) The Collateral Agent shall have no liability whatsoever to
any Secured Creditor as a result of any release of Collateral by it in
accordance with this Section 10.9.
10.10. Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A set of counterparts executed by all the parties hereto shall be
lodged with the Borrower and the Collateral Agent.
10.11. The Collateral Agent. The Collateral Agent will hold in
accordance with this Agreement all items of the Collateral at any time received
under this Agreement. It is expressly understood and agreed by the parties
hereto and each Secured Creditor, by accepting the benefits of this Agreement,
acknowledges and agrees that the obligations of the Collateral Agent as holder
of the Collateral and interests therein and with respect to the disposition
thereof, and otherwise under this Agreement, are only those expressly set forth
in this Agreement. The Collateral Agent shall act hereunder on the terms and
conditions set forth in Section 12 of the Credit Agreement.
228
EXHIBIT I
Page 30
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed and delivered by their duly authorized officers as of the date
first above written.
ADDRESSES
- ---------
9001 Ambassador Row ATRIUM CORPORATION
Dallas, TX 75247 as an Assignor
Attn: Randall Fojtasek
Telephone: (214) 634-0836
Telecopy: (214) 631-4231 By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
9001 Ambassador Row ATRIUM COMPANIES, INC.
Dallas, TX 75247 as an Assignor
Attn: Randall Fojtasek
Telephone: (214) 634-0836
Telecopy: (214) 631-4231 By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
9001 Ambassador Row H-R WINDOW SUPPLY COMPANY, INC.
Dallas, TX 75247 as an Assignor
Attn: Randall Fojtasek
Telephone: (214) 634-0836 By:
Telecopy: (214) 631-4231 ----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
229
EXHIBIT I
Page 31
9001 Ambassador Row VINYL BUILDING SPECIALTIES
Dallas, TX 75247 OF CONNECTICUT, INC.
Attn: Randall Fojtasek as an Assignor
Telephone: (214) 634-0836
Telecopy: (214) 631-4231 By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
230
EXHIBIT I
Page 32
9001 Ambassador Row BISHOP MANUFACTURING CO.
Dallas, TX 75247 OF NEW YORK, INC.
Attn: as an Assignor
Telephone: (214) 634-0836
Telecopy: (214) 631-4231 By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
9001 Ambassador Row BISHOP MANUFACTURING CO., INC.
Dallas, TX 75247 as an Assignor
Attn: Randall Fojtasek
Telephone: (214) 634-0836
Telecopy: (214) 631-4231 By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
9001 Ambassador Row BISHOP MANUFACTURING CO.
Dallas, TX 75247 OF NEW ENGLAND, INC.
Attn: Randall Fojtasek as an Assignor
Telephone: (214) 634-0836
Telecopy: (214) 631-4231 By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
231
EXHIBIT I
Page 33
BANKERS TRUST COMPANY
as Collateral Agent
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
232
ANNEX A
to
Security Agreement
SCHEDULE OF PERMITTED FILINGS
[Borrower to provide]
233
ANNEX B
to
Security Agreement
SCHEDULE OF CHIEF EXECUTIVE OFFICES
AND OTHER RECORD LOCATIONS
(a) Chief Executive Office
[Borrower to provide]
(b) Other records locations
[Borrower to provide]
234
ANNEX C
to
Security Agreement
SCHEDULE OF INVENTORY
AND EQUIPMENT LOCATIONS
[Borrower to provide]
235
ANNEX D
to
Security Agreement
SCHEDULE OF TRADE, FICTITIOUS AND OTHER NAMES
[Borrower to provide]
236
ANNEX E
to
Security Agreement
I. SCHEDULE OF U.S. TRADEMARK REGISTRATIONS
Registered Mark Registration No. Registration Date
- --------------- ---------------- -----------------
[Borrower to provide]
237
ANNEX E
Page 2
Registered Mark Registration No. Registration Date
- --------------- ---------------- -----------------
238
ANNEX E
Page 3
II. SCHEDULE OF PENDING APPLICATIONS FOR U.S. TRADEMARK
REGISTRATIONS ON THE BASIS OF USE IN COMMERCE
UNDER 17 USC Section 1051(a)
Mark Serial Filing Date
---- ------ -----------
[Borrower to provide]
239
ANNEX E
Page 4
III. SCHEDULE OF PENDING APPLICATIONS FOR U.S. TRADEMARK
REGISTRATION ON THE BASIS OF INTENT TO USE THE
MARK IN COMMERCE UNDER 17 USC Section 1051(b)
Mark Serial Filing Date
---- ------ -----------
[Borrower to provide]
240
ANNEX F
to
Security Agreement
SCHEDULE OF LICENSE AGREEMENTS AND ASSIGNMENTS
COMPANY SUBJECT REMARKS
------- ------- -------
[Borrower to provide]
241
ANNEX G
to
Security Agreement
SCHEDULE OF PATENTS AND APPLICATIONS
Patent Number Date Issued Title
- ------------- ----------- -----
[Borrower to provide]
242
ANNEX H
to
Security Agreement
SCHEDULE OF UNITED STATES COPYRIGHTS
Any United States copyright which Assignor now or hereafter
acquires, including any copyright registration or applications.
243
ANNEX I
to
Security Agreement
ASSIGNMENT OF SECURITY INTEREST IN
UNITED STATES TRADEMARKS AND PATENTS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of
which are hereby acknowledged, [NAME OF ASSIGNOR], a __________ corporation
(the "Assignor") with principal offices at ____________________________, hereby
assigns and grants to Bankers Trust Company, as Collateral Agent, with
principal offices at 130 Liberty Street, New York, New York 10006 (the
"Assignee"), a security interest in (i) all of the Assignor's right, title and
interest in and to the United States trademarks, trademark registrations and
trademark applications (the "Marks") set forth on Schedule A attached hereto,
(ii) all of the Assignor's right, title and interest in and to the United
States patents (the "Patents") set forth on Schedule B attached hereto, in each
case together with (iii) all Proceeds (as such term is defined in the Security
Agreement referred to below) and products of the Marks and Patents, (iv) the
goodwill of the businesses symbolized by the Marks and (v) all causes of action
arising prior to or after the date hereof for infringement of any of the Marks
and Patents or unfair competition regarding the same.
THIS ASSIGNMENT is made to secure the full and prompt performance
and payment of all the Obligations of the Assignor, as such term is defined in
the Security Agreement between the Assignor, the other assignors party thereto
and the Assignee, dated
244
ANNEX I
Page 2
as of November __, 1996 (as amended from time to time, the "Security
Agreement"). Upon the occurrence of the Termination Date (as defined in the
Security Agreement), the Assignee shall, upon such satisfaction, execute,
acknowledge, and deliver to the Assignor an instrument in writing releasing the
security interest in and re-assigning the Marks and Patents acquired under this
Assignment.
This Assignment has been granted in conjunction with the security
interest granted to the Assignee under the Security Agreement. The rights and
remedies of the Assignee with respect to the security interest granted herein
are without prejudice to, and are in addition to those set forth in the
Security Agreement, all terms and provisions of which are incorporated herein
by reference. In the event that any provisions of this Assignment are deemed
to conflict with the Security Agreement, the provisions of the Security
Agreement shall govern.
245
ANNEX I
Page 3
IN WITNESS WHEREOF, the undersigned have executed this Assignment
of Security Interest as of the ____ day of November, 1996.
[NAME OF ASSIGNOR]
as Assignor
By
--------------------------------
Name:
Title:
BANKERS TRUST COMPANY,
as Collateral Agent Assignee
By
--------------------------------
Name:
Title:
246
STATE OF ____________ )
) ss.:
COUNTY OF ___________ )
On this ____day of November, 1996 before me personally came
_______________, who being duly sworn, did depose and say that he is
___________________ of [Name of Assignor], that he is authorized to execute the
foregoing Assignment of Security Interest on behalf of said corporation and
that he did so by authority of the Board of Directors of said Corporation.
-----------------------------
Notary Public
247
STATE OF ___________ )
) ss.:
COUNTY OF __________ )
On this ____ day of November, 1996 before me personally came
_________________ who, being by me duly sworn, did state as follows: that he
is ________________ of Bankers Trust Company, that he is authorized to execute
the foregoing Assignment of Security Interest on behalf of said corporation and
that he did so by authority of the Board of Directors of said corporation.
-----------------------------
Notary Public
248
SCHEDULE A
U.S. Trademark Registration
Mark Registration No. Registration Date
---- ---------------- -----------------
[Borrower to provide]
249
SCHEDULE A
Page 2
Mark Registration No. Registration Date
---- ---------------- -----------------
[Borrower to provide]
250
SCHEDULE A
Page 3
U.S. Trademarks - Pending
Mark Serial Filing Date
---- ------ -----------
[Borrower to provide]
251
SCHEDULE B
PATENT PATENT NO. ISSUE DATE
- ------ ---------- ----------
[Borrower to provide]
252
ANNEX J
to
Security Agreement
ASSIGNMENT OF SECURITY INTEREST
IN UNITED STATES COPYRIGHTS
WHEREAS, [NAME OF ASSIGNOR], a _________ corporation (the
"Assignor"), having its chief executive office at _________________________, is
the owner of all right, title and interest in and to the United States
copyrights and associated United States copyright registrations and
applications for registration set forth in Schedule A attached hereto;
WHEREAS, BANKERS TRUST COMPANY, as Collateral Agent, having its
principal offices at 130 Liberty Plaza, New York, NY 10006 (the "Assignee"),
desires to acquire a security interest in, and lien on, all of Assignor's
right, title and interest in and to Assignor's copyrights and copyright
registrations and applications therefor; and
WHEREAS, the Assignor is willing to assign to the Assignee, and
to grant to the Assignee a security interest in and lien upon the copyrights
and copyright registrations and applications therefor described above;
NOW, THEREFORE, for good and valuable consideration, the receipt
of which is hereby acknowledged, and subject to the terms and conditions of the
Security Agreement, dated as of November __, 1996, between the Assignor, the
other assignors from time to time party thereto and the Assignee (as amended
from time to time, the "Security Agreement"), the Assignor hereby assigns to
the Assignee, and grants to the Assignee a security interest in and a lien
upon, all of Assignor's right, title
253
ANNEX J
Page 2
and interest in and to Assignor's copyrights and copyright registrations and
applications more particularly set forth on Schedule A attached hereto, (the
"Copyrights") together with (i) all Proceeds (as such term is defined in the
Security Agreement referred to below) of the Copyrights, and (ii) all causes of
action arising prior to or after the date hereof for infringement of any
Copyright.
This ASSIGNMENT OF SECURITY INTEREST is made to secure the
satisfactory performance and payment of all the Obligations (as such term is
defined in the Security Agreement) of the Assignor and shall be effective as of
the date of the Security Agreement. Upon the occurrence of the Termination
Date (as defined in the Security Agreement), the Assignee shall, upon such
satisfaction, execute, acknowledge, and deliver to Assignor an instrument in
writing releasing the security interest in the Copyrights acquired under this
Assignment of Security Interest.
This Assignment of Security Interest has been granted in
conjunction with the security interest granted to Assignee under the Security
Agreement. The rights and remedies of the Assignee with respect to the
security interest granted herein are without prejudice to, and are in addition
to those set forth in the Security Agreement, all terms and provisions of which
are incorporated herein by reference. In the event that any provisions of this
Assignment of Security Interest are deemed to conflict with the Security
Agreement, the provisions of the Security Agreement shall govern.
254
ANNEX J
Page 3
IN WITNESS WHEREOF, the undersigned have executed this Assignment
as of the _____ day of November, 1996.
[NAME OF ASSIGNOR]
as Assignor
By
--------------------------------
Name:
Title:
BANKERS TRUST COMPANY, as
Assignee
Collateral Agent
By
--------------------------------
Name:
Title:
255
STATE OF ___________ )
) ss.:
COUNTY OF ___________ )
On this ____ day of November, 1996, before me personally came
_________________ who, being by me duly sworn, did state as follows: that he
is _______________ of [Name of Assignor], that he is authorized to execute the
foregoing Assignment of Security Interest on behalf of said corporation and
that he did so by authority of the Board of Directors of said corporation.
------------------------------------
Notary Public
256
STATE OF ___________ )
) ss.:
COUNTY OF ___________ )
On this____ day of November, 1996, before me personally came
____________________ who, being by me duly sworn, did state as follows: that
he is ______________ of Bankers Trust Company, that he is authorized to execute
the foregoing Assignment of Security Interest on behalf of said corporation and
that he did so by authority of the Board of Directors of said corporation.
------------------------------------
Notary Public
257
SCHEDULE A
UNITED STATES COPYRIGHTS
Any copyrights which Assignor now owns or hereafter acquires,
including any copyright registration or application.
258
EXHIBIT J
FORM OF SUBSIDIARY GUARANTY
THIS GUARANTY, dated as of November ___, 1996 (as amended,
restated, supplemented or otherwise modified from time to time, this
"Guaranty"), made by each of the undersigned (each, a "Guarantor" and,
collectively, the "Guarantors"). Except as otherwise defined herein, terms
used herein and defined in the Credit Agreement (as defined below) shall be
used herein as therein defined.
W I T N E S S E T H :
WHEREAS, Atrium Corporation, a Delaware corporation ("Holdings"),
Atrium Companies, Inc., a Delaware corporation (the "Borrower"), various banks
from time to time party thereto (the "Banks"), and Bankers Trust Company, as
Agent (the "Agent"), have entered into a Credit Agreement, dated as of November
__, 1996 (as amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement"), providing for the making of Loans to the
Borrower and the issuance of, and participation in, Letters of Credit for the
account of the Borrower, all as contemplated therein (the Banks, the Agent and
the Collateral Agent are herein called the "Bank Creditors");
WHEREAS, the Borrower may from time to time be party to one or
more (i) interest rate agreements, interest rate cap agreements, interest rate
collar agreements or other similar agreements or arrangements, (ii) foreign
exchange contracts, currency swap agreements or similar agreements or
arrangements designed to protect against the fluctuations in currency values
and or (iii) other types of hedging agreements from time to time (each such
agreement or arrangement with an Other Creditor (as hereinafter defined), an
"Interest Rate Protection or Other Hedging Agreement"), with a Bank or an
affiliate of a Bank (each such Bank or affiliate, even if the respective Bank
subsequently ceases to be a Bank under the Credit Agreement for any reason,
together with such Bank's or affiliate's successors and assigns, collectively,
the "Other Creditors," and together with the Bank Creditors, are herein called
the "Creditors");
WHEREAS, the Borrower is a Subsidiary of Holdings;
WHEREAS, each Guarantor is also a Subsidiary of Holdings;
259
EXHIBIT J
Page 2
WHEREAS, it is a condition to the making of Loans under the
Credit Agreement that each Guarantor shall have executed and delivered this
Guaranty; and
WHEREAS, each Guarantor will obtain benefits from the incurrence
of Loans by the Borrower under the Credit Agreement and the entering into of
Interest Rate Protection or Other Hedging Agreements and, accordingly, desires
to execute this Guaranty in order to satisfy the conditions described in the
preceding paragraph and to induce the Banks to make Loans to the Borrower and
Other Creditors to enter into Interest Rate Protection or Other Hedging
Agreements with the Borrower;
NOW, THEREFORE, in consideration of the foregoing and other
benefits accruing to each Guarantor, the receipt and sufficiency of which are
hereby acknowledged, each Guarantor hereby makes the following representations
and warranties to the Creditors and hereby covenants and agrees with each
Creditor as follows:
1. Each Guarantor, jointly and severally, irrevocably and
unconditionally guarantees: (i) to the Bank Creditors the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of (A) the principal of and interest on the Notes issued by, and the Loans made
to, the Borrower under the Credit Agreement and all reimbursement obligations
and Unpaid Drawings with respect to Letters of Credit and (B) all other
obligations and liabilities owing by the Borrower to the Bank Creditors under
the Credit Agreement (including, without limitation, indemnities, Fees and
interest thereon) and the other Credit Documents to which the Borrower is a
party, whether now existing or hereafter incurred under, arising out of or in
connection with the Credit Agreement or any such other Credit Document and the
due performance and compliance with the terms of the Credit Documents by the
Borrower (all such principal, interest, liabilities and obligations under this
clause (i), except to the extent consisting of obligations or liabilities with
respect to Interest Rate Protection or Other Hedging Agreements, being herein
collectively called the "Credit Document Obligations"); and (ii) to each Other
Creditor the full and prompt payment when due (whether at the stated maturity,
by acceleration or otherwise) of all obligations and liabilities owing by the
Borrower under any Interest Rate Protection or Other Hedging Agreements,
whether now in existence or hereafter arising, and the due performance and
compliance by the Borrower with all terms, conditions and agreements contained
therein (all such obligations and liabilities being herein collectively called
the "Other Obligations", and together with the Credit Document Obligations are
herein collectively called the "Guaranteed Obligations"), provided that the
maximum amount payable by each Guarantor hereunder shall at no time exceed the
Maximum Amount (as hereinafter defined) of such Guarantor. As used herein,
"Maximum
260
EXHIBIT J
Page 3
Amount" of any Guarantor means an amount equal to 95% of the amount by which
(i) the present fair saleable value of such Guarantor's assets exceeds (ii) the
amount reasonably expected to come due in respect of all liabilities
(including, without limitation, contingent liabilities), other than liabilities
(contingent or otherwise) of such Guarantor hereunder, in each case determined
on the Initial Borrowing Date or on the day any demand is made under this
Guaranty, whichever date results in a higher Maximum Amount. Subject to the
proviso in the second preceding sentence, each Guarantor understands, agrees
and confirms that the Creditors may enforce this Guaranty up to the full amount
of the Guaranteed Obligations against each Guarantor without proceeding against
any other Guarantor, Holdings or the Borrower, or against any security for the
Guaranteed Obligations, or under any other guaranty covering all or a portion
of the Guaranteed Obligations. All payments by each Guarantor under this
Guaranty shall be made on the same basis as payments by the Borrower are made
under Sections 4.03 and 4.04 of the Credit Agreement.
2. Additionally, each Guarantor, jointly and severally,
unconditionally and irrevocably, guarantees the payment of any and all
Guaranteed Obligations of the Borrower to the Creditors whether or not due or
payable by the Borrower upon the occurrence in respect of the Borrower of any
of the events specified in Section 10 of the Credit Agreement, and
unconditionally and irrevocably, jointly and severally, promises to pay such
Guaranteed Obligations to the Creditors, or order, on demand, in lawful money
of the United States.
3. The liability of each Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the Guaranteed Obligations
of the Borrower whether executed by such Guarantor, any other Guarantor, any
other guarantor or by any other party, and the liability of each Guarantor
hereunder shall not be affected or impaired by (i) any direction as to
application of payment by the Borrower or by any other party, (ii) any other
continuing or other guaranty, undertaking or maximum liability of a guarantor
or of any other party as to the Guaranteed Obligations of the Borrower, (iii)
any payment on or in reduction of any such other guaranty or undertaking, (iv)
any dissolution, termination or increase, decrease or change in personnel by
the Borrower or (v) any payment made to any Creditor on the Guaranteed
Obligations which any Creditor repays the Borrower pursuant to court order in
any bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and each Guarantor waives any right to the deferral or modification
of its obligations hereunder by reason of any such proceeding.
4. The obligations of each Guarantor hereunder are
independent of the obligations of any other Guarantor, any other guarantor or
the Borrower, and a separate action or actions may be brought and prosecuted
against each Guarantor whether or not action is brought
261
EXHIBIT J
Page 4
against any other Guarantor, any other guarantor or the Borrower and whether or
not any other Guarantor, any other guarantor of the Borrower or the Borrower be
joined in any such action or actions. Each Guarantor waives, to the fullest
extent permitted by law, the benefit of any statute of limitations affecting
its liability hereunder or the enforcement thereof. Any payment by the
Borrower or other circumstance which operates to toll any statute of
limitations as to the Borrower shall operate to toll the statute of limitations
as to each Guarantor.
5. Each Guarantor hereby waives (to the fullest extent
permitted by applicable law) notice of acceptance of this Guaranty and notice
of any liability to which it may apply, and waives promptness, diligence,
presentment, demand of payment, protest, notice of dishonor or nonpayment of
any such liabilities, suit or taking of other action by the Agent or any other
Creditor against, and any other notice to, any party liable thereon (including
such Guarantor or any other guarantor or the Borrower).
6. Any Creditor may (except as shall be required by
applicable statute and cannot be waived) at any time and from time to time
without the consent of, or notice to, any Guarantor, without incurring
responsibility to such Guarantor, without impairing or releasing the
obligations of such Guarantor hereunder, upon or without any terms or
conditions and in whole or in part:
(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew, increase, accelerate or
alter, any of the Guaranteed Obligations, any security therefor, or any
liability incurred directly or indirectly in respect thereof, and the
guaranty herein made shall apply to the Guaranteed Obligations as so
changed, extended, renewed or altered;
(b) sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any
of those hereunder) incurred directly or indirectly in respect thereof
or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) settle or compromise any of the Guaranteed Obligations,
any security therefor or any liability (including any of those
hereunder) incurred directly or indirectly in respect
262
EXHIBIT J
Page 5
thereof or hereof, and may subordinate the payment of all or any part
thereof to the payment of any liability (whether due or not) of the
Borrower to creditors of the Borrower;
(e) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of the Borrower to the Creditors regardless
of what liabilities of the Borrower remain unpaid;
(f) consent to or waive any breach of, or any act, omission or
default under, any of the Interest Rate Protection or Other Hedging
Agreements, the Credit Documents or any of the instruments or agreements
referred to therein, or otherwise amend, modify or supplement any of the
Interest Rate Protection or Other Hedging Agreements, the Credit
Documents or any of such other instruments or agreements; and/or
(g) act or fail to act in any manner referred to in this
Guaranty which may deprive such Guarantor of its right to subrogation
against the Borrower to recover full indemnity for any payments made
pursuant to this Guaranty.
7. No invalidity, irregularity or unenforceability of all or any
part of the Guaranteed Obligations or of any security therefor shall affect,
impair or be a defense to this Guaranty, and this Guaranty shall be primary,
absolute and unconditional notwithstanding the occurrence of any event or the
existence of any other circumstances which might constitute a legal or
equitable discharge of a surety or guarantor except payment in full of the
Guaranteed Obligations.
8. This Guaranty is a continuing one and all liabilities to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of any
Creditor in exercising any right, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
herein expressly specified are cumulative and not exclusive of any rights or
remedies which any Creditor would otherwise have. No notice to or demand on
any Guarantor in any case shall entitle such Guarantor to any other further
notice or demand in similar or other circumstances or constitute a waiver of
the rights of any Creditor to any other or further action in any circumstances
without notice or demand. It is not necessary for any Creditor to inquire into
the capacity or powers of the Borrower or any of its Subsidiaries or the
officers, directors, partners or agents acting or purporting to act on its
behalf, and any indebtedness made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.
263
EXHIBIT J
Page 6
9. Any indebtedness of the Borrower now or hereafter held by any
Guarantor is hereby subordinated to the indebtedness of the Borrower to the
Creditors; and such indebtedness of the Borrower to any Guarantor, if the
Agent, after an Event of Default has occurred and is continuing, so requests,
shall be collected, enforced and received by such Guarantor as trustee for the
Creditors and be paid over to the Creditors on account of the indebtedness of
the Borrower to the Creditors, but without affecting or impairing in any manner
the liability of such Guarantor under the other provisions of this Guaranty.
Prior to the transfer by any Guarantor of any note or negotiable instrument
evidencing any indebtedness of the Borrower to such Guarantor, such Guarantor
shall mark such note or negotiable instrument with a legend that the same is
subject to this subordination. Without limiting the generality of the
foregoing, each Guarantor hereby agrees with the Guaranteed Creditors that it
will not exercise any right of subrogation which it may at any time otherwise
have as a result of this Guaranty (whether contractual, under Section 509 of
the Bankruptcy Code or otherwise) until all Guaranteed Obligations have been
irrevocably paid in full in cash.
10. (a) Each Guarantor waives any right (except as shall be required
by applicable statute or law and cannot be waived) to require the Creditors to:
(i) proceed against the Borrower, any other Guarantor, any other guarantor of
the Borrower or any other party; (ii) proceed against or exhaust any security
held from the Borrower, any other Guarantor, any other guarantor of the
Borrower or any other party; or (iii) pursue any other remedy in the Creditors'
power whatsoever. Each Guarantor waives any (to the fullest extent permitted
by applicable law) defense based on or arising out of any defense of the
Borrower, any other Guarantor, any other guarantor of the Borrower or any other
party other than payment in full of the Guaranteed Obligations, including,
without limitation, any defense based on or arising out of the disability of
the Borrower, any other Guarantor, any other guarantor of the Borrower or any
other party, or the unenforceability of the Guaranteed Obligations or any part
thereof from any cause, or the cessation from any cause of the liability of the
Borrower other than payment in full of the Guaranteed Obligations. The
Creditors may, at their election, foreclose on any security held by the Agent,
the Collateral Agent or the other Creditors by one or more judicial or
nonjudicial sales, whether or not every aspect of any such sale is commercially
reasonable (to the extent such sale is permitted by applicable law), or
exercise any other right or remedy the Creditors may have against the Borrower
or any other party, or any security, without affecting or impairing in any way
the liability of any Guarantor hereunder except to the extent the Guaranteed
Obligations have been paid in full. Each Guarantor waives any defense arising
out of any such election by the Creditors, even though such election operates
to impair or extinguish any right of reimbursement or subrogation or other
right or remedy of such Guarantor against the Borrower or any other party or
any security.
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Page 7
(b) Each Guarantor waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this
Guaranty, and notices of the existence, creation or incurring of new or
additional indebtedness. Each Guarantor assumes all responsibility for being
and keeping itself informed of the Borrower's financial condition and assets,
and of all other circumstances bearing upon the risk of nonpayment of the
Guaranteed Obligations and the nature, scope and extent of the risks which such
Guarantor assumes and incurs hereunder, and agrees that the Creditors shall
have no duty to advise any Guarantor of information known to them regarding
such circumstances or risks.
11. The Creditors agree that this Guaranty may be enforced only by
the action of the Agent or the Collateral Agent, in each case acting upon the
instructions of the Required Banks (or, after the date on which all Credit
Document Obligations have been paid in full, the holders of at least a majority
of the outstanding Other Obligations) and that no other Creditor shall have any
right individually to seek to enforce or to enforce this Guaranty or to realize
upon the security to be granted by the Security Documents, it being understood
and agreed that such rights and remedies may be exercised by the Agent or the
Collateral Agent or the holders of at least a majority of the outstanding Other
Obligations, as the case may be, for the benefit of the Creditors upon the
terms of this Guaranty and the Security Documents. The Creditors further agree
that this Guaranty may not be enforced against any director, officer, employee,
or stockholder of any Guarantor (except to the extent such stockholder is also
a Guarantor hereunder).
12. In order to induce the Banks to make Loans and issue Letters of
Credit pursuant to the Credit Agreement, and in order to induce the Other
Creditors to execute, deliver and perform the Interest Rate Protection or Other
Hedging Agreements, each Guarantor represents, warrants and covenants that:
(a) Such Guarantor (i) is a duly organized and validly
existing corporation and is in good standing under the laws of the
jurisdiction of its organization, and has the corporate power and
authority to own its property and assets and to transact the business in
which it is engaged and presently proposes to engage and (ii) is duly
qualified and is authorized to do business and is in good standing in
each jurisdiction where the conduct of its business requires such
qualification except for failures to be so qualified which, individually
or in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.
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Page 8
(b) Such Guarantor has the corporate power and authority to
execute, deliver and perform the terms and provisions of this Guaranty
and each other Credit Document to which it is a party and has taken all
necessary corporate action to authorize the execution, delivery and
performance by it of each such Credit Document. Such Guarantor has duly
executed and delivered this Guaranty and each other Credit Document to
which it is a party and each such Credit Document constitutes the legal,
valid and binding obligation of such Guarantor enforceable in accordance
with its terms, except to the extent that the enforceability hereof or
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and by equitable principles (regardless of whether
enforcement is sought in equity or at law).
(c) Neither the execution, delivery or performance by such
Guarantor of this Guaranty or any other Credit Document to which it is a
party, nor compliance by it with the terms and provisions hereof or
thereof (i) will contravene any applicable provision of any law,
statute, rule or regulation, or any applicable order, writ, injunction
or decree of any court or governmental instrumentality, (ii) will
conflict with or result in any breach of, any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in
the creation or imposition of (or the obligation to create or impose)
any Lien (other than pursuant to the Security Documents) upon any of the
material property or assets of such Guarantor or any of its Subsidiaries
pursuant to the terms of any indenture, mortgage, deed of trust, loan
agreement or any other material agreement, contract or instrument to
which such Guarantor or any of its Subsidiaries is a party or by which
it or any of its property or assets is bound or to which it may be
subject or (iii) will violate any provision of the certificate of
incorporation or by-laws of such Guarantor or any of its Subsidiaries.
(d) No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with (except as have
been obtained or made prior to the Initial Borrowing Date), or exemption
by, any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with,
(i) the execution, delivery and performance in any material respect of
this Guaranty or any other Credit Document to which such Guarantor is a
party, or (ii) the legality, validity, binding effect or enforceability
of this Guaranty or any other Credit Document to which such Guarantor is
a party.
(e) There are no actions, suits or proceedings pending or, to
the best knowledge of such Guarantor, threatened with respect to such
Guarantor (i) that could reasonably be
266
EXHIBIT J
Page 9
expected to have a Material Adverse Effect or (ii) that could reasonably
be expected to have a material adverse effect on the rights or remedies
of the Creditors or on the ability of such Guarantor to perform its
respective obligations to the Creditors hereunder and under the other
Credit Documents to which it is a party.
13. Each Guarantor covenants and agrees that on and after the
date hereof and until the termination of the Total Commitment and all Interest
Rate Protection or Other Hedging Agreements and when no Note or Letter of
Credit remains outstanding (other than Letters of Credit, together with all
Fees that have accrued and will accrue thereon through the stated termination
date of such Letters of Credit, which have been supported in a manner
satisfactory to the Letter of Credit Issuer in its sole and absolute
discretion) and all Guaranteed Obligations have been paid in full (other than
indemnities described in Section 12.06 of the Credit Agreement and analogous
provisions in the Security Documents which are not then due and payable), such
Guarantor shall take, or will refrain from taking, as the case may be, all
actions that are necessary to be taken or not taken so that no violation of any
provision, covenant or agreement contained in Section 8 or 9 of the Credit
Agreement, and so that no Default or Event of Default, is caused by the actions
of such Guarantor or any of its Subsidiaries.
14. The Guarantors hereby jointly and severally agree to pay
all reasonable out-of-pocket costs and expenses of each Creditor in connection
with the enforcement of this Guaranty and any amendment, waiver or consent
relating hereto (including, without limitation, the reasonable fees and
disbursements of counsel (including in-house counsel) employed by any of the
Creditors).
15. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Creditors and
their successors and assigns.
16. Neither this Guaranty nor any provision hereof may be
changed, waived, discharged or terminated except with the written consent of
each Guarantor directly affected thereby and either (i) the Required Banks (or
to the extent required by Section 13.12 of the Credit Agreement, with the
written consent of each Bank) at all times prior to the time on which all
Credit Document Obligations have been paid in full or (ii) the holders of at
least a majority of the outstanding Other Obligations at all times after the
time on which all Credit Document Obligations have been paid in full; provided,
however, that any change, waiver, modification or variance affecting the rights
and benefits of a single Class (as defined below) of Creditors (and not all
Creditors in a like or similar manner) shall require the written consent of the
Requisite Creditors (as defined below) of such Class of Creditors (it being
understood that the addition or release of any
267
EXHIBIT J
Page 10
Guarantor hereunder shall not constitute a change, waiver, discharge or
termination affecting any Guarantor other than the Guarantor so added or
released). For the purpose of this Guaranty the term "Class" shall mean each
class of Creditors, i.e., whether (A) the Bank Creditors as holders of the
Credit Document Obligations or (B) the Other Creditors as the holders of the
Other Obligations. For the purpose of this Guaranty, the term "Requisite
Creditors" of any Class shall mean each of (i) with respect to the Credit
Document Obligations, the Required Banks and (ii) with respect to the Other
Obligations, the holders of at least a majority of all obligations outstanding
from time to time under the Interest Rate Protection or Other Hedging
Agreements.
17. Each Guarantor acknowledges that an executed (or
conformed) copy of each of the Credit Documents and Interest Rate Protection or
Other Hedging Agreements has been made available to its principal executive
officers and such officers are familiar with the contents thereof.
18. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Creditor Law) and not by way of limitation of any such rights, upon
the occurrence and during the continuance of an Event of Default (such term to
mean and include any "Event of Default" as defined in the Credit Agreement or
any payment default under any Interest Rate Protection or Other Hedging
Agreement continuing after any applicable grace period), each Creditor is
hereby authorized at any time or from time to time, without notice to any
Guarantor or to any other Person, any such notice being expressly waived, to
set off and to appropriate and apply any and all deposits (general or special)
and any other indebtedness at any time held or owing by such Creditor to or for
the credit or the account of such Guarantor, against and on account of the
obligations and liabilities of such Guarantor to such Creditor under this
Guaranty, irrespective of whether or not such Creditor shall have made any
demand hereunder and although said obligations, liabilities, deposits or
claims, or any of them, shall be contingent or unmatured.
19. All notices, requests, demands or other communications
pursuant hereto shall be deemed to have been duly given or made when delivered
to the Person to which such notice, request, demand or other communication is
required or permitted to be given or made under this Guaranty, addressed to
such party at (i) in the case of any Bank Creditor, as provided in the Credit
Agreement, (ii) in the case of any Guarantor, at its address set forth opposite
its signature below and (iii) in the case of any Other Creditor, at such
address as such Other Creditor shall have specified in writing to the
Guarantor; or in any case at such other address as any of the Persons listed
above may hereafter notify the others in writing.
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EXHIBIT J
Page 11
20. If claim is ever made upon any Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part
of said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (ii) any settlement or compromise of any such claim effected by such payee
with any such claimant (including the Borrower), then and in such event each
Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon such Guarantor, notwithstanding any revocation
hereof or other instrument evidencing any liability of the Borrower, and such
Guarantor shall be and remain liable to the aforesaid payees hereunder for the
amount so repaid or recovered to the same extent as if such amount had never
originally been received by any such payee.
21. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS
OTHERWISE PROVIDED IN CERTAIN OF THE MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH
AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OF THE GUARANTORS HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. EACH OF THE GUARANTORS HEREBY IRREVOCABLY DESIGNATES,
APPOINTS AND EMPOWERS CT CORPORATION SYSTEM, WITH OFFICES ON THE DATE HEREOF AT
1633 BROADWAY, NEW YORK, NEW YORK 10019 AS ITS DESIGNEE, APPOINTEE AND AGENT TO
RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS
PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS
WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH
DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH
SUCH GUARANTOR AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW
YORK CITY ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO
THE AGENT UNDER THIS AGREEMENT. EACH OF THE GUARANTORS FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS
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EXHIBIT J
Page 12
IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED
OR CERTIFIED MAIL, POSTAGE PREPAID, TO ANY GUARANTOR AT ITS ADDRESS SET FORTH
OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT UNDER THIS
AGREEMENT, ANY BANK OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST ANY GUARANTOR IN ANY OTHER JURISDICTION.
(b) EACH OF THE GUARANTORS HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (A) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
22. In the event that all of the capital stock of one or more
Guarantors is sold or otherwise disposed of or liquidated in compliance with
the requirements of Section 9.02 of the Credit Agreement (or such sale or other
disposition or liquidation has been approved in writing by the Required Banks
(or all Banks if required by Section 13.12 of the Credit Agreement)) and the
proceeds of such sale, disposition or liquidation are applied in accordance
with the provisions of the Credit Agreement, to the extent applicable, such
Guarantor shall be released from this Guaranty and this Guaranty shall, as to
each such Guarantor or Guarantors, terminate, and have no further force or
effect (it being understood and agreed that the sale of one or more Persons
that own, directly or indirectly, all of the capital stock or partnership
interests of any Guarantor shall be deemed to be a sale of such Guarantor for
the purposes of this Section 22).
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EXHIBIT J
Page 13
23. This Guaranty may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Agent.
24. EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS GUARANTY, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
25. All payments made by any Guarantor hereunder will be made
without setoff, counterclaim or other defense.
* * *
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EXHIBIT J
Page 14
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
9001 Ambassador Row H-R WINDOW SUPPLY COMPANY, INC.
Dallas, TX 75247 as a Guarantor
Attn: Randall Fojtasek
Telephone: (214) 634-0836
Telecopy: (214) 631-4231 By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
9001 Ambassador Row VINYL BUILDING SPECIALTIES
Dallas, TX 75247 OF CONNECTICUT, INC.
Attn: Randall Fojtasek as a Guarantor
Telephone: (214) 634-0836
Telecopy: (214) 631-4231 By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
9001 Ambassador Row BISHOP MANUFACTURING CO.
Dallas, TX 75247 OF NEW YORK, INC.
Attn: Randall Fojtasek as a Guarantor
Telephone: (214) 634-0836
Telecopy: (214) 631-4231 By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
9001 Ambassador Row BISHOP MANUFACTURING CO., INC.
Dallas, TX 75247 as a Guarantor
Attn: Randall Fojtasek
Telephone: (214) 634-0836
Telecopy: (214) 631-4231 By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
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EXHIBIT J
Page 15
9001 Ambassador Row BISHOP MANUFACTURING CO.
Dallas, TX 75247 OF NEW ENGLAND, INC.
Attn: Randall Fojtasek as a Guarantor
Telephone: (214) 634-0836
Telecopy: (214) 631-4231 By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Accepted and Agreed to:
BANKERS TRUST COMPANY,
as Agent for the Banks
By:
---------------------------
Title:
273
EXHIBIT K
FORM OF CONSENT LETTER
[LETTERHEAD OF AGENT FOR SERVICE OF PROCESS]
[Date]
To the Agent and the
Banks party to the
Credit Agreement referred
to below:
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of November
__, 1996, among Atrium Corporation, a Delaware corporation ("Holdings"), Atrium
Companies, Inc., a Delaware corporation (the "Borrower"), the banks (the
"Banks") from time to time party thereto and Bankers Trust Company, as Agent
(the "Agent") (as such Credit Agreement may be amended, restated, supplemented
or otherwise modified, from time to time, the "Credit Agreement") and the
Subsidiary Guaranty made by each of the guarantors party thereto (as such
Subsidiary Guaranty may be amended, restated, supplemented or otherwise
modified, from time to time, the "Subsidiary Guaranty").
Each of Holdings and the Borrower, pursuant to Section 13.08 of
the Credit Agreement, and each of the Subsidiary Guarantors, pursuant to
Section 21 of the Subsidiary Guaranty has irrevocably designated, appointed and
empowered the undersigned, CT Corporation System, with offices currently
located at 1633 Broadway, New York, New York 10019, as its authorized
designee, appointee and agent to receive, accept and acknowledge for and on its
behalf, and in respect of its property, service of any and all legal process,
summons, notices and documents which may be served in any such legal action or
proceeding with respect to the Credit Agreement or any other Credit Document
(as defined in the Credit Agreement) in the courts of the State of New York or
of the United States of America for the Southern District of New York.
The undersigned hereby informs you that it irrevocably accepts
such appointment as agent as set forth in Section 13.08 of the Credit Agreement
or Section 21 of the Subsidiary Guaranty, as the case may be, and agrees with
you that the undersigned (i) shall inform the Agent promptly in
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EXHIBIT K
Page 2
writing of any change of its address in New York City, (ii) shall perform its
obligations as such process agent in accordance with the provisions of Section
13.08 of the Credit Agreement or Section 21 of the Subsidiary Guaranty, as the
case may be, and (iii) shall forward promptly to Holdings or the Borrower or
the relevant Subsidiary Guarantor any legal process received by the undersigned
in its capacity as process agent.
As process agent, the undersigned, and its successor or
successors, agree to discharge the above-mentioned obligations and will not
refuse fulfillment of such obligations under Section 13.08 of the Credit
Agreement or Section 21 of the Subsidiary Guaranty.
Very truly yours,
CT CORPORATION SYSTEM
By
--------------------------------
Title:
275
EXHIBIT L
FORM OF OFFICER'S SOLVENCY CERTIFICATE
To the Agents and each of the Banks party to
the Credit Agreement referred to below:
I, the undersigned, the Chief Executive Officer of Atrium
Companies, Inc., a Delaware corporation (the "Borrower"), does hereby certify
on behalf of the Borrower that:
1. This Certificate is furnished to the Banks pursuant to
Section 5.16 of the Credit Agreement, dated as of November __, 1996, among
Atrium Corporation, a Delaware corporation ("Holdings"), the Borrower, various
banks from time to time party thereto (the "Banks") and Bankers Trust Company,
as Agent (such Credit Agreement, as in effect on the date of this Certificate,
being herein called the "Credit Agreement"). Unless otherwise defined herein,
capitalized terms used in this Certificate shall have the meanings set forth in
the Credit Agreement.
2. For purposes of this Certificate, the terms below shall have
the following definitions:
(a) "Fair Value"
The amount at which the assets, in their entirety, of each of
Holdings and its Subsidiaries taken as a whole and of the
Borrower on a stand-alone basis, as the case may be, would change
hands between a willing buyer and a willing seller, within a
commercially reasonable period of time, each having reasonable
knowledge of the relevant facts, with neither being under any
compulsion to act.
(b) "Present Fair Salable Value"
The amount that could be obtained by an independent willing
seller from an independent willing buyer if the assets of each of
Holdings and its Subsidiaries taken as a whole and of the
Borrower on a stand-alone basis, as the case may be, are sold
with reasonable promptness in an arm's-length transaction under
present conditions for the sale of comparable business
enterprises.
276
(c) "New Financing"
The Indebtedness incurred or to be incurred by Holdings, the
Borrower and their respective Subsidiaries under the Credit
Documents (assuming the full utilization by the Borrower of the
Commitments under the Credit Agreement) and all other financings
contemplated by the Documents in each case after giving effect to
the Transaction and the incurrence of all financings in
connection therewith.
(d) "Stated Liabilities"
The recorded liabilities (including contingent liabilities that
would be recorded in accordance with generally accepted
accounting principles ("GAAP")) of each of Holdings and its
Subsidiaries taken as a whole and of the Borrower on a stand-
alone basis, as the case may be, as of the date hereof after
giving effect to the consummation of the Transaction, determined
in accordance with GAAP consistently applied, together with the
amount of all New Financing.
(e) "Identified Contingent Liabilities"
The maximum estimated amount of liabilities reasonably likely to
result from pending litigation, asserted claims and assessments,
guaranties, uninsured risks and other contingent liabilities of
each of Holdings and its Subsidiaries taken as a whole and of the
Borrower on a stand-alone basis, as the case may be, after giving
effect to the Transaction (including all fees and expenses
related thereto but exclusive of such contingent liabilities to
the extent reflected in Stated Liabilities), as identified and
explained in terms of their nature and estimated magnitude by
responsible officers of the Borrower or that have been identified
as such by an officer of the Borrower.
(f) "Will be able to pay its Stated Liabilities, including Identified
Contingent Liabilities, as they mature"
For the period from the date hereof through the stated maturity
of all New Financing, each of Holdings and its Subsidiaries taken
as a whole and of the Borrower on a stand-alone basis, as the
case may be, will have sufficient assets and cash flow to pay
their respective Stated Liabilities and Identified Contingent
Liabilities as those liabilities mature or otherwise become
payable.
(g) "Does not have Unreasonably Small Capital"
For the period from the date hereof through the stated maturity
of all New Financing, each of Holdings and its Subsidiaries taken
as a whole and of the Borrower on a stand-alone basis, as the
case may be, after consummation of the Transaction and all
277
Indebtedness (including the Loans and Letters of Credit) being
incurred or assumed and Liens created by Holdings, the Borrower
and their respective Subsidiaries in connection therewith, is a
going concern and has sufficient capital to ensure that it will
continue to be a going concern for such period and to remain a
going concern.
3. For purposes of this Certificate, I, or officers of the
Borrower or of Holdings under my direction and supervision, have performed the
following procedures as of and for the periods set forth below:
(a) have reviewed the financial statements of Holdings and its
Subsidiaries referred to in Section 7.05(a) of the Credit
Agreement.
(b) have reviewed the unaudited pro forma consolidated balance sheets
of Holdings and its Subsidiaries referred to in Section 5.17(a)
of the Credit Agreement.
(c) have made inquiries of certain officials of Holdings and its
Subsidiaries who have responsibility for financial and accounting
matters regarding (i) the existence and amount of Identified
Contingent Liabilities associated with the business of Holdings
and its Subsidiaries, (ii) whether the unaudited pro forma
consolidated balance sheets referred to in paragraph (b) above
are in conformity with GAAP consistently applied and (iii)
whether omitted notes to the unaudited consolidated financial
statements delivered pursuant to Section 7.05(a) of the Credit
Agreement would have disclosed any new information, except to
update amounts included in the notes to the December 31, 1995
audited consolidated financial statements.
(d) have knowledge of and have reviewed to my satisfaction the Credit
Documents and the other Documents, and the respective Schedules
and Exhibits thereto.
(e) With respect to Identified Contingent Liabilities, have:
1. inquired of certain officials of Holdings and its
Subsidiaries who have responsibility for legal, financial
and accounting matters as to the existence and estimated
liability with respect to all contingent liabilities
associated with the business of Holdings and its
Subsidiaries;
2. confirmed with officers of Holdings and its Subsidiaries
that, to the best of such officers' knowledge, (i) all
appropriate items were included in Stated Liabilities or
Identified Contingent Liabilities and that (ii) the
amounts relating thereto were the maximum estimated amount
of liabilities reasonably likely to result therefrom as of
the date hereof; and
278
3. to the best of my knowledge, all material Identified
Contingent Liabilities that may arise from any pending
litigation, asserted claims and assessments, guarantees,
uninsured risks and other Identified Contingent
Liabilities of Holdings and its Subsidiaries (exclusive of
such Identified Contingent Liabilities to the extent
reflected in Stated Liabilities) (after giving effect to
the Transaction) have been considered in making the
certification set forth in paragraph 4 below, and with
respect to each such Identified Contingent Liability the
estimable maximum amount of liability with respect thereto
was used in making such certification.
(f) have had the Projections relating to Holdings and its
Subsidiaries which have been previously delivered to the Banks,
prepared under my direction, and have re-examined the Projections
on the date hereof and considered the effect thereon of any
changes since the date of the preparation thereof on the results
projected therein. After such review, I hereby certify that in
my opinion the Projections are reasonable and attainable and the
Projections support the conclusions contained in paragraph 4
below.
(g) have made inquiries of certain officers of Holdings and its
Subsidiaries who have responsibility for financial reporting and
accounting matters regarding whether they were aware of any
events or conditions that, as of the date hereof, would cause
Holdings and its Subsidiaries taken as a whole or the Borrower on
a stand-alone basis, as the case may be, after giving effect to
the consummation of the Transaction and the related financing
transactions (including the incurrence of the New Financing), to
(i) have assets with a Fair Value or Present Fair Salable Value
that are less than the sum of Stated Liabilities and Identified
Contingent Liabilities; (ii) have Unreasonably Small Capital; or
(iii) not be able to pay their respective Stated Liabilities and
Identified Contingent Liabilities as they mature or otherwise
become payable.
4. Based on and subject to the foregoing, I hereby certify on
behalf of the Borrower that, after giving effect to the consummation of the
Transaction and the related financing transactions (including the incurrence of
the New Financing), it is my opinion that (i) the Fair Value and Present Fair
Salable Value of the assets of each of Holdings and its Subsidiaries taken as a
whole and of the Borrower on a stand-alone basis, as the case may be, exceed
their respective Stated Liabilities and Identified Contingent Liabilities; (ii)
each of Holdings and its Subsidiaries taken as a whole and of the Borrower on a
stand-alone basis, as the case may be, does not have Unreasonably Small
Capital; and (iii) each of Holdings and its Subsidiaries taken as a whole and
of the Borrower on a stand-alone basis, as the case may be, will be able to pay
their respective Stated Liabilities and Identified Contingent Liabilities as
they mature or otherwise become payable.
279
IN WITNESS WHEREOF, I have hereto set my hand this ___ day of
November, 1996.
ATRIUM COMPANIES, INC.
-----------------------------------------
Name:
Title: Chief Executive Officer
280
EXHIBIT M
FORM OF INTERCOMPANY NOTE
New York, New York
___________ __, 19__
FOR VALUE RECEIVED, [NAME OF PAYOR] (the "Borrower"), hereby
promises to pay on demand to the order of [NAME OF PAYEE] or its assigns (the
"Payee"), in lawful money of the United States of America in immediately
available funds, at such location in the United States of America as the Payee
shall from time to time designate, the unpaid principal amount of all loans and
advances made by the Payee to the Borrower.
The Borrower promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at such rate per annum as shall be agreed upon from time to time by the
Borrower and Payee.
Upon the commencement of any bankruptcy, reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar proceeding of any jurisdiction relating to the Borrower,
the unpaid principal amount hereof shall become immediately due and payable
without presentment, demand, protest or notice of any kind in connection with
the Intercompany Note.
This Intercompany Note evidences certain permitted intercompany
Indebtedness referred to in Section 9.05(v) of the Credit Agreement, dated as
of November __, 1996 among Atrium Corporation, Atrium Companies, Inc., various
Banks and Bankers Trust Company, as Agent (as amended, restated, supplemented
or otherwise modified or from time to time, the "Credit Agreement") and is
subject to the terms thereof, and shall be pledged by the Payee pursuant to the
Security Documents (as defined in the Credit Agreement). The Borrower hereby
acknowledges and agrees that the Collateral Agent pursuant to and as defined in
the Security Documents, as in effect from time to time, may exercise all rights
provided therein with respect to this Note.
The Payee is hereby authorized to record all loans and advances
made by it to the Borrower (all of which shall be evidenced by this
Intercompany Note), and all repayments or prepayments thereof, in its books and
records, such books and records constituting prima facie evidence of the
accuracy of the information contained therein.
281
EXHIBIT M
Page 2
All payments under this Note shall be made without offset,
counterclaim or deduction of any kind.
The Borrower hereby waives presentment, demand, protest or notice
of any kind in connection with this Intercompany Note.
THIS INTERCOMPANY NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
[NAME OF PAYOR]
By
-----------------------------------
Title:
[NAME OF PAYEE]
By
------------------------------
Title:
Pay to the order of
- --------------------------------
282
EXHIBIT N
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
Date __________, 19__
Reference is made to the Credit Agreement described in Item 2 of
Annex I hereto (as such Credit Agreement may hereafter be amended, modified,
extended, renewed, replaced, restated or supplemented from time to time, the
"Credit Agreement"). Unless defined in Annex I hereto, terms defined in the
Credit Agreement are used herein as therein defined. ___________ (the
"Assignor") and __________ (the "Assignee") hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without
recourse and without representation or warranty (other than as expressly
provided herein), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to all of the Assignor's rights and obligations
under the Credit Agreement as of the date hereof which represents the
percentage interest specified in Item 4 of Annex I hereto (the "Assigned
Share") of all of the outstanding rights and obligations under the Credit
Agreement relating to the Assigned Share of the Total Revolving Loan Commitment
and of any outstanding Revolving Loans and Letters of Credit. After giving
effect to such sale and assignment, the Assignee's Revolving Loan Commitment
will be as set forth in Item 4 of Annex I hereto.
2. The Assignor (i) represents and warrants that it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the other Credit Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or the other Credit Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any of its Subsidiaries or the performance or observance by the
Borrower or any of its Subsidiaries of any of their obligations under the
Credit Agreement or the other Credit Documents to which they are a party or any
other instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement and the other Credit Documents, together with copies of the
financial statements referred to therein and
283
EXHIBIT N
Page 2
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment and Assumption
Agreement; (ii) agrees that it will, independently and without reliance upon
the Agent, the Assignor or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement;
(iii) confirms that it is an Eligible Transferee under Section 13.04(b) of the
Credit Agreement; (iv) appoints and authorizes the Agent and the Collateral
Agent to take such action as agent on its behalf and to exercise such powers
under the Credit Agreement and the other Credit Documents as are delegated to
the Agent and the Collateral Agent, as the case may be, by the terms thereof,
together with such powers as are reasonably incidental thereto; [and] (v)
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Bank[; and (vi) to the extent legally entitled to do so,
attaches the forms described in Section 13.04(b) of the Credit Agreement](1/).
4. Following the execution of this Assignment and Assumption
Agreement by the Assignor and the Assignee, an executed original hereof
(together with all attachments) will be delivered to the Agent. The effective
date of this Assignment and Assumption Agreement shall be the date of execution
hereof by the Assignor and the Assignee and the receipt of the consent of the
Agent and the Borrower to the extent required by Section 13.04(b) of the Credit
Agreement and receipt by the Agent of the administrative fee referred to in
such Section 13.04(b), unless otherwise specified in Item 5 of Annex I hereto
(the "Settlement Date").
5. Upon the delivery of a fully executed original hereof to the
Agent, as of the Settlement Date, (i) the Assignee shall be a party to the
Credit Agreement and, to the extent provided in this Assignment and Assumption
Agreement, have the rights and obligations of a Bank thereunder and under the
other Credit Documents and (ii) the Assignor shall, to the extent provided in
this Assignment and Assumption Agreement, relinquish its rights and be released
from its obligations under the Credit Agreement and the other Credit Documents.
6. It is agreed that the Assignee shall be entitled to (i) all
interest on the Assigned Share of the Loans at the rates specified in Item 6 of
Annex I; (ii) all Commitment Commission (if applicable) on the Assigned Share
of the Total Revolving Loan Commitment (if not theretofore terminated) at the
rate specified in Item 7 of Annex I hereto; and (iii) all Letter of Credit Fees
(if applicable) on the Assignee's participation in all Letters of Credit at the
rate specified in Item 8 of Annex I hereto, which, in each case, accrue on and
after the Settlement Date, such interest and, if
- --------------------
(1/) Include if the Assignee is organized under the laws of a jurisdiction
outside of the United States.
284
EXHIBIT N
Page 3
applicable, Commitment Commission and Letter of Credit Fees to be paid by the
Agent directly to the Assignee. It is further agreed that all payments of
principal made on the Assigned Share of the Loans which occur on and after the
Settlement Date will be paid directly by the Agent to the Assignee. Upon the
Settlement Date, the Assignee shall pay to the Assignor an amount specified by
the Assignor in writing which represents the Assigned Share of the principal
amount of the respective Loans made by the Assignor pursuant to the Credit
Agreement which are outstanding on the Settlement Date, net of any closing
costs, and which are being assigned hereunder. The Assignor and the Assignee
shall make all appropriate adjustments in payments under the Credit Agreement
for periods prior to the Settlement Date directly between themselves.
7. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
285
EXHIBIT N
Page 4
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Assignment and Assumption
Agreement, as of the date first above written, such execution also being made
on Annex I hereto.
Accepted this _____ day [NAME OF ASSIGNOR],
of _______, 19__ as Assignor
By
------------------------------------
Title:
[NAME OF ASSIGNEE],
as Assignee
By
------------------------------------
Title:
Acknowledged and Agreed:
BANKERS TRUST COMPANY, as Agent
By
--------------------------------
Title:(2/)
- --------------------
(2/) The consent of Bankers Trust Company is required for assignments pursuant
to Section 13.04(b)(ii) of the Credit Agreement.
286
ANNEX FOR ASSIGNMENT AND ASSUMPTION AGREEMENT
ANNEX I
1. Borrower: Atrium Companies, Inc.
2. Name and Date of Credit Agreement:
Credit Agreement, dated as of November __, 1996, among Atrium
Corporation, Atrium Companies, Inc., various Banks party thereto from
time to time and Bankers Trust Company, as Agent, as amended to the date
hereof.
3. Date of Assignment Agreement:
4. Amounts (as of date of Item #3 above):
=====================================
Revolving Loan
Commitment
- -------------------------------------
a. Aggregate $___________
Amount for
all Banks
- -------------------------------------
b. Assigned _______%
Share
- -------------------------------------
c. Amount of $__________
Assigned
Share
=====================================
5. Settlement Date:
6. Rate of Interest As set forth in Section 1.08
287
Annex I
Page 2
to the Assignee: of the Credit Agreement (unless otherwise
agreed to by the Assignor and the
Assignee)(3/)
7. Commitment Commission: As set forth in Sections 3.01(a) (unless
otherwise agreed to by the Assignor and the
Assignee)(4/)
8. Letter of Credit Fees As set forth in Section 3.01(b)
to the Assignee: of the Credit Agreement (unless otherwise
agreed to by the Assignor and the
Assignee)(5/)
9. Notice:
ASSIGNOR:
---------------------
---------------------
---------------------
---------------------
Attention:
Telephone:
Telecopier:
Reference:
- --------------------
(3/) Atrium Companies, Inc. and the Agent shall direct the entire amount of
the interest to the Assignee at the rate set forth in Section 1.08 of the
Credit Agreement, with the Assignor and Assignee effecting the agreed upon
sharing of the interest through payments by the Assignee to the Assignor.
(4/) Atrium Companies, Inc. and the Agent shall direct the entire amount of
the Commitment Commission to the Assignee at the rate set forth in Section
3.01(a) of the Credit Agreement, with the Assignor and the Assignee effecting
the agreed upon sharing of Commitment Commission through payment by the
Assignee to the Assignor.
(5/) Atrium Companies, Inc. and the Agent shall direct the entire amount of
the Letter of Credit Fees to the Assignee at the rate set forth in Section
3.01(b) of the Credit Agreement, with the Assignor and the Assignee effecting
the agreed upon sharing of Letter of Credit Fees through payment by the
Assignee to the Assignor.
288
Annex I
Page 3
ASSIGNEE:
---------------------
---------------------
---------------------
---------------------
Attention:
Telephone:
Telecopier:
Reference:
Payment Instructions:
ASSIGNOR:
---------------------
---------------------
---------------------
---------------------
Attention:
Reference:
ASSIGNEE:
---------------------
---------------------
---------------------
---------------------
Attention:
Reference:
Accepted and Agreed:
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By By
----------------------------- -----------------------------
----------------------------- -----------------------------
(Print Name and Title) (Print Name and Title)