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EXHIBIT 10.22
FOURTH AMENDMENT TO
AMENDED AND RESTATED
REVOLVING CREDIT AND TERM LOAN AGREEMENT AND LIMITED WAIVER
Fourth Amendment dated as of May 7, 2001, to the Amended and Restated
Revolving Credit and Term Loan Agreement (the "Fourth Amendment"), by and among
THE HOLMES GROUP, INC. (FORMERLY KNOWN AS HOLMES PRODUCTS CORP.), a
Massachusetts corporation (the "Company"), THE RIVAL COMPANY, a Delaware
corporation ("Rival"), HOLMES PRODUCTS (FAR EAST) LIMITED, an entity organized
under the laws of the Bahamas ("Far East"), ESTEEM INDUSTRIES LIMITED, an entity
organized under the laws of Hong Kong ("Esteem"), RAIDER MOTOR CORPORATION, an
entity organized under the laws of the Bahamas ("Raider"), HOLMES PRODUCTS
(EUROPE) LIMITED, an entity organized under the laws of the United Kingdom
("Holmes UK"), BIONAIRE INTERNATIONAL B.V., a private company with limited
liability incorporated under the laws of the Netherlands ("Bionaire BV"), PATTON
ELECTRIC (HONG KONG) LTD. a corporation organized under the laws of Hong Kong
("Patton"), THE HOLMES GROUP CANADA LTD. (THE SURVIVOR OF THE AMALGAMATION OF
THE RIVAL COMPANY OF CANADA AND HOLMES AIR (CANADA) CORP.), a corporation
organized under the laws of Canada ("Holmes Canada" and, collectively with the
Company, Rival, Far East, Esteem, Raider, Holmes UK, Bionaire BV and Patton, the
"Borrowers", and each individually a "Borrower"), FLEET NATIONAL BANK (FORMERLY
KNOWN AS BANKBOSTON, N.A.) and the other lending institutions listed on Schedule
1 to the Credit Agreement (as hereinafter defined) (the "Existing Banks"), and
Fleet National Bank (the "New Bank") amending certain provisions of the Amended
and Restated Revolving Credit and Term Loan Agreement dated as of February 5,
1999 (as amended by the First Amendment to Amended and Restated Revolving Credit
and Term Loan Agreement dated as of August, 1999, the Second Amendment to
Amended and Restated Revolving Credit and Term Loan Agreement dated as of June
30, 2000, the Forbearance Agreement and Third Amendment dated as of April 13,
2001 and as further amended and in effect from time to time, the "Credit
Agreement") by and among the Borrowers, the Existing Banks, FLEET NATIONAL BANK
(FORMERLY KNOWN AS BANKBOSTON, N.A.) in its capacity as administrative agent
(the "Agent"), LEHMAN COMMERCIAL PAPER INC. in its capacity as documentation
agent, BANKBOSTON, N.A. acting through its Hong Kong and London branches as
fronting bank, FLEETBOSTON ROBERTSON STEPHENS INC. (FORMERLY KNOWN AS BANCBOSTON
ROBERTSTON STEPHENS INC.) as syndication agent and arranger and LEHMAN BROTHERS
INC. as co-arranger. Terms not otherwise defined herein which are defined in the
Credit Agreement shall have the same respective meanings herein as therein.
WHEREAS, the New Bank wishes to become a party to the Credit Agreement as
a Bank; and
WHEREAS, the Borrowers, the Existing Banks and the New Bank have agreed to
permit the New Bank to become a party to the Credit Agreement and to modify
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certain terms and conditions of the Credit Agreement as specifically set forth
in this Fourth Amendment;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION 1. ACCESSION OF NEW BANK; WAIVER OF VOTING RIGHTS. Subject to the
terms and conditions of this Fourth Amendment, the New Bank hereby agrees to
assume, without recourse to the Banks or the Agent, on the Effective Date (as
defined in Section 21 below), a Revolving B Commitment of $40,000,000. The New
Bank hereby agrees to be bound by, and hereby requests the agreement of the
Borrowers and the Agent that the New Bank shall be entitled to the benefits of,
all of the terms, conditions and provisions of the Credit Agreement as if the
New Bank had been one of the lending institutions originally executing the
Credit Agreement as a "Bank"; provided that nothing herein shall be construed as
making the New Bank liable to the Borrowers or the other Banks in respect of any
acts or omissions of any party to the Credit Agreement or in respect of any
other event occurring prior to the Effective Date of this Fourth Amendment and,
provided, further that the New Bank hereby agrees to waive, from and after the
date hereof, its right to vote as a Bank under the Credit Agreement or under any
of the other Loan Documents for purposes of granting consents or waivers or for
purposes of agreeing to amendments or other modifications to any of the Loan
Documents or for purposes of making requests to the Agent pursuant to
Section 13.1 or Section 13.2, and the determination of Majority Banks shall for
all purposes be made without regard to such New Bank's interest in any of the
Revolving Credit B Loans. Notwithstanding anything to the contrary contained in
the immediately preceding proviso, (a) a decrease in the rate of interest on the
Revolving Credit B Notes and loan accounts (other than interest accruing
pursuant to Section 5.11.2 following the effective date of any waiver by the
Majority Banks of the Default or Event of Default relating thereto), any change
in the regularly scheduled or otherwise required payment dates for any amounts
owing under the Loan Documents to the Revolving B Banks, any forgiveness of any
of the Obligations owing to the Revolving B Banks, the waiver of an Event of
Default under Section 13.1(a) or (b) hereof solely as it relates to any payment
owing to the Revolving B Banks, the release of any security interest or lien as
to Collateral constituting all or substantially all of the Collateral (except if
the release or disposition of such Collateral is permitted or provided for in
the provisions of Section 9.5.2. of the Credit Agreement or elsewhere in the
Loan Documents), the release of any Guarantor (except if the release or
disposition of such Guarantor is permitted or provided for in the provisions of
Section 9.5.2 of the Credit Agreement or elsewhere in the Loan Documents), the
amount of the Revolving B Commitment and the amount of the commitment fee on the
Revolving Credit B Loans may not be changed without the written consent of the
Revolving B Bank affected thereby, (b) any change in the order of application of
payments to be made to the Revolving B Banks pursuant to Section 2.12 and
Section 13 of the Credit Agreement may not be made without the written consent
of the Revolving B Bank affected thereby and (c) the Revolving Credit Loan B
Maturity Date may not be postponed without the written consent of the Revolving
B Banks affected thereby. The New Bank represents and warrants that (a) it is
duly and legally authorized to enter into this Fourth Amendment, (b) the
execution, delivery and performance of this
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Fourth Amendment do not conflict with any provision of law or of the charter or
by-laws of the New Bank, or of any agreement binding on the New Bank, (c) all
acts, conditions and things required to be done and performed and to have
occurred prior to the execution, delivery and performance of this Fourth
Amendment, and to render the same the legal, valid and binding obligation of the
New Bank, enforceable against it in accordance with its terms, have been done
and performed and have occurred in due and strict compliance with all applicable
laws. In addition, the New Bank (a) confirms that it has received a copy of the
Credit Agreement, together with copies of the most recent financial statements
delivered pursuant to Sections 7.4 and 8.4 thereof and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Fourth Amendment; (b) agrees that it will,
independently and without reliance upon the Banks or the Agent 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; (c) appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under the Credit Agreement and the other
Loan Documents as are delegated to the Agent by the terms thereof, together with
such powers as are reasonably incidental thereto; and (d) 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. The
parties hereto further acknowledge that to the extent any Revolving Credit B
Bank assigns any of its Revolving Credit B Loans to those Principals which have
provided the Investor Guaranty, or such Principals otherwise assume the rights
and obligations of any such Revolving Credit B Bank by reason of its subrogation
or other rights under such Investor Guaranty, such Principals shall thereafter
have the rights and obligations of a Revolving Credit B Bank hereunder.
SECTION 2. AMENDMENT TO SECTION 1.1 OF THE CREDIT AGREEMENT. Section 1.1
of the Credit Agreement is hereby amended as follows:
(a) The definition of "Applicable Margin" is hereby amended by replacing
the table contained in the definition of Applicable Margin with the following
table:
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REVOLVING
CREDIT A AND REVOLVING REVOLVING CREDIT REVOLVING COMMITMENT
TERM LOAN A CREDIT B A AND TERM LOAN A CREDIT B FEE
LEVEL LEVERAGE RATIO BASE RATE BASE RATE EUROCURRENCY EUROCURRENCY RATE
LOANS LOANS RATE LOANS RATE LOANS
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I Greater than or
equal to 2.00% 1.00% 3.75% 2.75% 0.500%
4.75:1.00
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II Less than
4.75:1.00 but 1.125% .125% 2.875% 1.875% 0.500%
greater
than or equal
to 4.25:1.00
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III Less than
4.25:1.00 but 0.875% 0% 2.625% 1.625% 0.500%
greater
than or equal
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REVOLVING
CREDIT A AND REVOLVING REVOLVING CREDIT REVOLVING COMMITMENT
TERM LOAN A CREDIT B A AND TERM LOAN A CREDIT B FEE
LEVEL LEVERAGE RATIO BASE RATE BASE RATE EUROCURRENCY EUROCURRENCY RATE
LOANS LOANS RATE LOANS RATE LOANS
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to 3.75:1.00
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IV Less than
3.75:1.00 but 0.625% 0% 2.375% 1.375% 0.375%
greater
than or equal
to 3.25:1.00
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V Less than 0.625% 0% 2.125% 1.125% 0.375%
3.25:1.00
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(b) The definition of "Banks" is hereby amended by deleting such
definition in its entirety and restating it as follows:
Banks. Fleet and the other lending institutions listed in Schedule 1
hereto and any other Person who becomes an assignee of any rights and
obligations of a Bank pursuant to Section 19.
(c) The definition of "Base Rate Loans" is hereby amended by deleting such
definition in its entirety and restating it as follows:
Base Rate Loans. The Loans bearing interest calculated by
reference to the Base Rate.
(d) The definition of "Business Day" is hereby amended by deleting such
definition in its entirety and restating it as follows:
Business Day. Any day other than a Saturday or Sunday on which
banking institutions in Boston, Massachusetts are open for the transaction
of banking business and, in addition, if Eurocurrency Rate Loans are
involved, a day which is also a day in which commercial banks are open for
international business (including dealings in Dollar deposits) in London
or such other eurodollar interbank market as may be selected by the Agent
in its sole discretion acting in good faith.
(e) The definition of "Commitment" is hereby amended by deleting such
definition in its entirety and restating it as follows:
Commitment. As to any Bank, its Revolving A Commitment, Revolving B
Commitment, Term Loan A Commitment and Term Loan B Commitment, as the case
may be.
(f) Each of the definitions of "BA Discount Proceeds", "BA Lenders",
"Bankers' Acceptances", "Bankers' Acceptance Notice", "Canadian Base Rate",
"Canadian Dollars or C$", "Canadian Dollar Equivalent", "Canadian Exchange
Rate", "Canadian Fronting Bank", "Canadian Loans", "Commitment Percentage",
"EMU", "EU Treaties", "Euro or e", "Eurocurrency Interbank Market", "Euro
Interbank Rate", "Eurocurrency Offered Rate", "Eurodollar Rate", "Fronted
Loans", "Fronting Bank", "Fronting Loan Event", "International Eurocurrency
Rate", "Limited Forbearance Period", "Multicurrency Loans", "OC Notice",
"Optional Currency", "participating
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member state", "Refunding Bankers' Acceptance", and "Specified Default" is each
hereby deleted in its entirety.
(g) The definition of "EBITDA" is hereby amended by deleting such
definition in its entirety and restating it as follows:
EBITDA. With respect to the Company and its Subsidiaries and any
fiscal period, an amount equal to Consolidated Net Income for such period,
plus, to the extent deducted in the calculation of Consolidated Net Income
and without duplication, (a) depreciation and amortization for such
period, plus, (b) solely for purposes of calculating compliance with the
financial covenants set forth in Section 10 hereof and to determine the
Company's EBITDA for purposes of Section 8.29 hereof, (i) any deductions
to Consolidated Net Income in the second, third and fourth fiscal quarters
of the 2000 fiscal year attributable to integration expenses associated
with the Acquisition, up to an aggregate amount not to exceed $3,080,000,
plus (ii) any reserves and/or charges taken by the Company in the 2000
fiscal year for Accounts Receivable and obsolete inventory in an aggregate
amount not to exceed $25,700,000; plus (iii) one time restructuring fees
and expenses (including, without limitation, legal fees and fees of
consultants) actually incurred by the Company in the 2001 and 2002 fiscal
years in connection with the restructuring of this facility; plus (iv) the
charges (both cash and non-cash) taken and expenses actually incurred in
the 2001 fiscal year in connection with the closing of the Designated
Property (including, without limitation, severance fees and relocation and
hiring expenses) and further selling, general and administrative
consolidation, in an aggregate amount not to exceed $3,800,000; plus (c)
other non-cash charges for such period (which charges are exclusive of
$1,300,000 in non cash charges in connection with the closing of the
Designated Property included in (b)(iv) above, plus (d) income tax expense
for such period, plus (e) Consolidated Total Interest Expense paid or
accrued during such period. For purposes of determining compliance with
the covenants contained in this Credit Agreement, EBITDA for the months
ended April 30, 2000 through February 28, 2001 shall be those numbers set
forth on Exhibit C-1 hereto opposite the relevant dates.
(h) The definition of "Eligible Assignee" is hereby amended by deleting
subparagraph (b) of such definition and restating it as follows: "Berkshire
Partners, Berkshire Fund IV, Berkshire Fund V, Berkshire Fund IV Investment
Corp., Berkshire Fund V Investment Corp., Berkshire Investors LLC, any Bank and
any Affiliate of any Bank and, with respect to any Bank that is a fund that
invests in loans, any other fund that invests in loans and is managed by the
same investment advisor of such Bank or by an Affiliate of such investment
advisor (and treating all such funds so managed as a single Eligible Assignee).
(i) The definition of "Eurocurrency Rate" is hereby amended by deleting
such definition in its entirety and restating it as follows:
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Eurocurrency Rate. For any Interest Period with respect to a
Eurocurrency Rate Loan, the rate of interest equal to (a) the rate per
annum (rounded upwards to the nearest 1/16 of one percent) at which the
applicable Reference Bank's Eurocurrency Lending Office is offered Dollar
deposits two (2) Business Days prior to the beginning of such Interest
Period in the interbank eurodollar market where the eurodollar and foreign
currency and exchange operations of each Eurocurrency Lending Office are
customarily conducted, for delivery on the first day of such Interest
Period for the number of days comprised therein and in an amount
comparable to the amount of the Eurocurrency Rate Loan of the applicable
Reference Bank to which such Interest Period applies, divided by (b) a
number equal to 1.00 minus the Eurocurrency Reserve Rate, if applicable.
(j) The definition of "Fixed Charge Coverage Ratio" is hereby amended by
deleting such definition in its entirety and restating it as follows:
Fixed Charge Coverage Ratio. As at any date of determination, the
ratio of (a) EBITDA for the Reference Period most recently ended on such
date (or, if such date is not a fiscal quarter end date, the period of
four consecutive fiscal quarters most recently ended) less the aggregate
amount of Capital Expenditures made by the Company and its Subsidiaries in
such period (other than (i) Capital Expenditures made prior to the second
anniversary of the Closing Date up to an aggregate amount not to exceed
$5,000,000 consisting of systems and upgrade expenses, and (ii) Capital
Expenditures in respect of restructuring and integration resulting from
the sales of the Borrowers' commercial, industrial and/or pump lines of
business funded with up to 10% of the proceeds of such sales), less the
aggregate amount of taxes paid in cash in such period to (b) the Fixed
Charges of the Company and its Subsidiaries for such Reference Period (or,
in the case of the Consolidated Total Interest Expense component of Fixed
Charges, the Annualized Reference Period), provided, however,
notwithstanding anything to the contrary contained in this definition, for
purposes of calculating compliance with the financial covenant contained
in Section 10.3 hereof for the fiscal quarters ended December 31, 2000
through and including September 30, 2001, in lieu of deducting the
aggregate amount of Capital Expenditures made in such period, there shall
be deducted in subparagraph (a) above the lesser of the aggregate amount
of Capital Expenditures actually made in such period and $19,000,000. For
purposes of determining compliance with the covenants contained in this
Credit Agreement, Capital Expenditures made for the months ended April 30,
2000 through February 28, 2001 shall be those amounts set forth on Exhibit
C-1 hereto opposite the relevant dates.
(k) The definition of "Interest Coverage Ratio" is hereby amended by
inserting immediately at the end of such definition the following sentence: "For
purposes of determining compliance with the covenants contained in this Credit
Agreement, Consolidated Total Interest Expense for the months ended April 30,
2000
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through February 28, 2001 shall be those numbers set forth on Exhibit C-1 hereto
opposite the relevant dates."
(l) The definition of "Interest Period" is hereby amended by (i) deleting
the text of subparagraph (c) in its entirety and restating it as "(c) if the
applicable Borrower shall fail to give notice as provided in Section 2.7, the
applicable Borrower shall be deemed to have requested a conversion of the
affected Eurocurrency Rate Loan to a Base Rate Loan and the continuation of all
Base Rate Loans as Base Rate Loans on the last day of the then current Interest
Period with respect thereto"; and (ii) deleting the words "Revolving Credit Loan
Maturity Date (if comprising a Revolving Credit Loan)" and substituting in place
thereof the words "Revolving Credit Loan A Maturity Date (if comprising a
Revolving Credit A Loan), Revolving Credit Loan B Maturity Date (if comprising a
Revolving Credit B Loan)".
(m) The definition of "Loan Documents" is hereby amended by deleting the
words "the Bankers' Acceptances," which appear in such definition and
substituting in place thereof the words "the Investor Guaranty,".
(n) The definition of "Net Cash Sale Proceeds" is hereby amended by
deleting the words "The net cash proceeds received by the Company" which appear
in the first sentence of such definition and substituting in place thereof the
words: "The gross cash proceeds received by the Company".
(o) The definition of "Obligations" is hereby amended by deleting the
words "Letters of Credit or Bankers' Acceptances" which appear in such
definition and substituting in place thereof the words "or Letters of Credit".
(p) The definition of "Overnight Rate" is hereby amended by deleting such
definition in its entirety and restating it as follows:
Overnight Rate. For any day, the weighed average interest rate
paid by the Agent for federal funds acquired by the Agent.
(q) The definition of "Reference Bank" is hereby amended by deleting the
reference to "BankBoston N.A." and substituting in place thereof the words:
"Fleet National Bank, and as to the Revolving Credit B Loans, such financial
institution designated as such in writing to the Agent by the Revolving B Banks
on or before May 7, 2001."
(r) The definition of "Revolving Credit Loans" is hereby deleted in its
entirety and restated as follows:
Revolving Credit Loans. Collectively, the Revolving Credit A
Loans and the Revolving Credit B Loans.
(s) The definition of "Revolving Credit Loan Maturity Date" is hereby
amended by deleting such definition in its entirety and restating it as follows:
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Revolving Credit Loan Maturity Date. As to the Revolving Credit A
Loans, the Revolving Credit Loan A Maturity Date, and as to the Revolving
Credit B Loans, the Revolving Credit Loan B Maturity Date.
(t) The definition of "Revolving Credit Notes" is hereby amended by
deleting such definition in its entirety and restating it as follows:
Revolving Credit Notes. Collectively, the Revolving Credit A
Notes and the Revolving Credit B Notes.
(u) The definition of "Rival Canada" is hereby amended by deleting such
definition in its entirety and restating it as follows:
Rival Canada. The Holmes Group Canada Ltd. (the survivor of the
amalgamation of The Rival Company of Canada and Holmes Air (Canada)
Corp), a corporation organized under the laws of Canada.
(v) The definition of "Same Day Funds" is hereby amended by deleting such
definition in its entirety and restating it as follows:
Same Day Funds. Immediately available funds.
(w) The definition of "Settlement" is hereby amended by deleting such
definition in its entirety and restating it as follows:
Settlement. The making or receiving of payments in immediately
available funds, by the Banks, to the extent necessary to cause each
Bank's actual share of the outstanding amount of Revolving Credit A Loans
and Revolving Credit B Loans (after giving effect to any Loan Request) to
be equal to such Bank's Revolving A Commitment Percentage of the
outstanding amount of such Revolving Credit A Loans and Revolving B
Commitment Percentage of the outstanding amount of such Revolving Credit B
Loans, as the case may be (in each case, after giving effect to any Loan
Request), in any case where, prior to such event or action, the actual
share is not so equal.
(x) The definition of "Settlement Date" is hereby amended by deleting
subparagraph (d) in its entirety and restating it as follows: "(d) any Business
Day on which the amount of the Revolving Credit Loans outstanding from the Swing
Line Bank plus the Swing Line Bank's Revolving A Commitment percentage of the
sum of the Maximum Drawing Amount and any Unpaid Reimbursement Obligations is
equal to or greater than the Swing Line Bank's Revolving A Commitment
Percentage."
(y) The definition of "Total Commitment" is hereby amended by deleting
such definition in its entirety and restating it as follows:
Total Commitment. Collectively, the Total Revolving A Commitment
and the Total Revolving B Commitment.
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(z) The definition of "Total Percentage" is hereby amended by deleting
such definition in its entirety and restating it as follows:
Total Percentage. With respect to each Bank, on any date of
determination, the Revolving A Commitment (or, if the Revolving A
Commitment is terminated, outstanding Revolving Credit A Loans, Letter of
Credit Participations in Unpaid Reimbursement Obligations and
participating interests in the risk relating to outstanding Letters of
Credit) and outstanding Term Loans A and outstanding Term Loans B held by
such Bank as a percentage of the sum of the Total Revolving A Commitment
(or if the Revolving A Commitment is terminated, outstanding Revolving
Credit A Loans, Letter of Credit Participations in Unpaid Reimbursement
Obligations and participating interests in the risk relating to
outstanding Letters of Credit) plus the outstanding Term Loans A and
outstanding Term Loans B.
(aa) Section 1.1 of the Credit Agreement is further amended by inserting
the following definitions in the appropriate alphabetical order:
Borrowing Base. At the relevant time of reference thereto, an amount
determined by the Agent by reference to the most recent Borrowing Base
Report delivered to the Banks and the Agent pursuant to Section 8.4(i),
which is equal to the sum of:
(a) 80% of Eligible Accounts Receivable; plus
(b) 50% of Eligible Inventory; plus
(c) the Maximum Overadvance effective at such time.
Borrowing Base Report. A Borrowing Base Report signed by the
chief financial officer of the Company and in substantially the form of
Exhibit I hereto.
Designated Property. That certain property identified by the
Company in writing to the Agent and the Banks prior to May 7, 2001.
Eligible Accounts Receivable. The aggregate of the unpaid portions
of Accounts Receivable which are classified as "accounts receivable" on
the balance sheet of the Company and its Subsidiaries (other than any such
Accounts Receivable which pertain to any letter of credit discounted and
sold pursuant to Section 9.1(f)(iv)(2)) and which are net of any credits
to such Accounts Receivable and net of applicable reserves in accordance
with generally accepted accounting principles, applied in a manner
consistent with past practices.
Eligible Inventory. With respect to the Company or any of its
Subsidiaries, the net book value of finished goods, work in progress and
raw materials and component parts inventory owned by the Company or
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any of its Subsidiaries and which is classified as "inventory" on the
balance sheet of the Company and its Subsidiaries, which are net of the
aggregate amount of all applicable inventory reserves in accordance with
generally accepted accounting principles, applied in a manner consistent
with past practices.
Fleet. Fleet National Bank, a national banking association, in
its individual capacity.
Investor Guaranty. That certain Guaranty dated as of May 7, 2001
from certain of the Principals to the Agent and the Revolving Credit B
Banks and in form and substance satisfactory to the Revolving Credit B
Banks.
Investor Guaranty Reduction Event. The occurrence of either (a) any
event pursuant to which the Revolving Credit B Banks consent to a
reduction (in whole or in part) of the amounts to be guaranteed pursuant
to the Investor Guaranty; or (b) the termination of such Investor
Guaranty.
Maximum Initial Amount. As of any date of determination, an amount
which is equal to the following: (a) for the period of May 7, 2001 through
and including December 31, 2001, an amount equal to $115,000,000 less the
amount of proceeds received by the Company or any Subsidiary from any
Indebtedness incurred, assumed or otherwise issued pursuant to
Section 9.1(f)(iv)(1) hereof; and (b) at any time thereafter,
$115,000,000.
Maximum Overadvance. For each period set forth in the table
below, the amount set forth opposite such period:
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PERIOD AMOUNT
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May 7, 2001 - July 31, 2001 $ 0
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August 1, 2001 - August 31, $ 7,500,000
2001
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September 1, 2001 - September $10,000,000
30, 2001
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October 1, 2001 - November 30, $ 5,000,000
2001
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Any time thereafter $ 0
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Monthly Fixed Charge Coverage Ratio. As at any date of
determination, the ratio of (a) EBITDA for the Monthly Reference Period
most recently ended on such date less the aggregate amount of Capital
Expenditures made by the Company and its Subsidiaries in such period
(other than (i) Capital Expenditures made prior to the second anniversary
of the Closing Date up to an aggregate amount of not more than $5,000,000
consisting of systems and upgrade expenses, and (ii) Capital Expenditures
in respect of restructuring and integration resulting from
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the sales of the Borrowers' commercial, industrial and/or pump lines of
business funded with up to 10% of the proceeds of such sales), less the
aggregate amount of taxes paid in cash in such period to (b) the Fixed
Charges of the Company and its Subsidiaries for such Monthly Reference
Period, provided, however, notwithstanding anything to the contrary
contained in this definition, for purposes of calculating compliance with
the financial covenant contained in Section 10.7 hereof for the fiscal
months ended December 31, 2000 through and including September 30, 2001,
in lieu of deducting the aggregate amount of Capital Expenditures made in
such period, there shall be deducted in subparagraph (a) above the lesser
of the aggregate amount of Capital Expenditures actually made in such
period and $19,000,000. For purposes of determining compliance with the
covenants contained in this Credit Agreement, Capital Expenditures made
for the months ended April 30, 2000 through February 28, 2001 shall be
those amounts set forth on Exhibit C-1 hereto opposite the relevant dates.
Monthly Interest Coverage Ratio. As at any date of determination,
the ratio of (a) the EBITDA of the Company and its Subsidiaries for the
Monthly Reference Period ending on such date to (b) Consolidated Total
Interest Expense for the Monthly Reference Period then ended, less, to the
extent included in such Consolidated Total Interest Expense, non-cash
interest expense and amortization or write-off of fees and expenses
relating to financing activities. For purposes of determining compliance
with the covenants contained in this Credit Agreement, Consolidated Total
Interest Expense for the months ended April 30, 2000 through February 28,
2001 shall be those numbers set forth on Exhibit C-1 hereto opposite the
relevant dates.
Monthly Leverage Ratio. As at any date of determination, the ratio
of (a) Total Funded Indebtedness of the Company and its Subsidiaries
outstanding on such date to (b) EBITDA of the Company and its Subsidiaries
for the Monthly Reference Period ended on such date, to be calculated on a
Pro Forma Basis.
Monthly Reference Period. As of any date of determination, the
period of twelve (12) consecutive calendar months ending on such
relevant date.
Operational Consultant. TRG or any other business consulting
firm of similar experience, of nationally recognized standing and not
disapproved by the Majority Banks.
Revolver A Exposure. As defined in Section 2.1.1.
Revolving A Banks. Those Banks listed on Schedule 1 hereto as
"Revolving A Banks" and which will make the Revolving Credit A Loans to
the Borrowers pursuant to Section 2.1.1.
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Revolving A Commitment. With respect to each Revolving A Bank, the
amount set forth on Schedule 1 hereto as the amount of such Revolving A
Bank's commitment to make Revolving Credit A Loans to the Borrowers, and
to participate in the issuance, extension and renewal of Letters of Credit
for the account of, the Borrowers, as the same may be reduced from time to
time; or if such commitment is terminated pursuant to the provisions
hereof, zero.
Revolving A Commitment Percentage. With respect to each Revolving A
Bank, the percentage set forth on Schedule 1 hereto as such Revolving A
Bank's percentage of the aggregate Revolving A Commitments of all the
Revolving A Banks.
Revolving B Banks. Those Banks listed on Schedule 1 hereto as
"Revolving B Banks" and which will make the Revolving Credit B Loans to
the Borrowers pursuant to Section 2.1.4.
Revolving B Commitment. With respect to each Revolving B Bank, the
amount set forth on Schedule 1 hereto as the amount of such Revolving B
Bank's commitment to make Revolving Credit B Loans to the Borrowers.
Revolving B Commitment Percentage. With respect to each Revolving B
Bank, the percentage set forth on Schedule 1 hereto as such Revolving B
Bank's percentage of the aggregate Revolving B Commitments of all the
Revolving B Banks.
Revolving Banks. Collectively, the Revolving A Banks and the
Revolving B Banks.
Revolving Credit A Loans. Revolving credit loans to be made by
the Revolving A Banks pursuant to Sections 2.1.1 hereof.
Revolving Credit A Notes. See Section 2.4.
Revolving Credit B Loans. Revolving credit loans to be made by the
Revolving B Banks pursuant to Sections 2.1.2 hereof.
Revolving Credit B Notes. See Section 2.4.
Revolving Credit Loan A Maturity Date. February 5, 2005.
Revolving Credit Loan B Maturity Date. July 1, 2002.
Subdebt Funding Loans. As defined in Section 8.29 hereof.
Total Revolving A Commitment. The sum of the Revolving A
Commitments of the Revolving A Banks as in effect from time to time.
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Total Revolving B Commitment. The sum of the Revolving B
Commitments of the Revolving B Banks as in effect from time to time.
Warrants. Those certain warrants from the Company to the Banks other
than the Revolving B Banks, and in form and substance as set forth in
Exhibit A to the Warrant Purchase Agreement.
Warrant Purchase Agreement. That certain warrant purchase agreement,
dated as of May 7, 2001, between the Company and the Banks, other than the
Revolving B Banks, relating to the Warrants and the certain co-sale
agreement dated as of May 7, 2001, between the Company and such Banks.
SECTION 3. AMENDMENT TO SECTION 2 OF THE CREDIT AGREEMENT. Section 2 of
the Credit Agreement is hereby amended by deleting Section 2 in its entirety and
substituting in place thereof the following:
2. THE REVOLVING CREDIT FACILITY.
2.1 COMMITMENT TO LEND.
2.1.1 REVOLVING CREDIT A LOANS TO BORROWERS. Subject to
the terms and conditions set forth in this Credit Agreement,
each of the Revolving A Banks severally agrees to lend to the
Borrowers and the Borrowers may borrow, repay, and reborrow
from time to time from the Closing Date up to but not
including the Revolving Credit Loan A Maturity Date upon
notice by the applicable Borrowers to the Agent given in
accordance with Section 2.6, such sums in Dollars as are
requested by the applicable Borrowers up to a maximum
aggregate amount outstanding (after giving effect to all
amounts requested by any Borrower) at any one time equal to
such Revolving A Bank's Revolving A Commitment minus such
Revolving A Bank's Revolving A Commitment Percentage of the
sum of the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations, provided that (a) the sum of the outstanding
amount of the Revolving Credit A Loans (after giving effect to
all amounts requested), plus the Maximum Drawing Amount and
all Unpaid Reimbursement Obligations (collectively, the
"Revolver A Exposure") shall not at any time exceed the lesser
of (i) the Total Revolving A Commitment and (ii) the Borrowing
Base minus the aggregate outstanding amount of Revolving
Credit B Loans, and (b) (1) the sum of the outstanding amount
of all Revolving Credit Loans (after giving effect to all
amounts requested) advanced to the Subsidiary Borrowers shall
not at any time exceed $20,000,000, with the sum of the
outstanding amount of all Revolving Credit Loans (after
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giving effect to all amounts requested) advanced to Holmes Far
East, Esteem, Raider and Patton HK not to at any time exceed
$10,000,000 and the sum of the outstanding amount of all
Revolving Credit Loans (after giving effect to all amounts
requested) advanced to Holmes UK and Bionaire B.V. not to at
any time exceed $10,000,000, and (2) the sum of the
outstanding amount of all Revolving Credit Loans (after giving
effect to all amounts requested) advanced to the Subsidiary
Borrowers plus the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations shall not at any time exceed
$45,000,000. Notwithstanding anything to the contrary
contained herein, the parties hereto hereby acknowledge and
agree that (1) at any time in which the Revolver A Exposure is
at the Maximum Initial Amount, the Revolving A Banks shall
have no obligation to make any additional Revolving Credit A
Loans or other extension of credit under this Credit Agreement
until such time as the aggregate outstanding principal amount
of Revolving Credit B Loans is equal to the Total Revolving B
Commitment and (2) from and after the earlier to occur of (x)
the Term Loan B Maturity Date and (y) January 31, 2002, the
Borrowers shall not request any additional Revolving Credit A
Loans or the issuance, extension or renewal of any Letter of
Credit (and the Banks shall have no obligation to make any
such Revolving Credit A Loans and the Agent shall have no
obligation to issue, extend or renew any Letter of Credit) if,
after giving effect to any amounts so requested, the Revolver
A Exposure would exceed the Maximum Initial Amount. For the
avoidance of doubt, the parties hereto hereby acknowledge that
to the extent any Borrower is requesting the issuance of any
Letter of Credit at a time when the Revolving A Banks are not
required to make any additional extensions of credit under
this Credit Agreement until such time as the Total Revolving B
Loan Commitment has been fully funded, the Borrowers shall be
permitted, subject always to compliance with the terms and
conditions contained herein, to borrow a Revolving Credit B
Loan in the amount of the Maximum Drawing Amount of such
requested Letters of Credit, and use the proceeds of such
Revolving Credit B Loan to repay the Revolving Credit A Loans
in such an amount such that the Revolver A Exposure is reduced
(prior to such issuance of such Letter of Credit) to an amount
below the Maximum Initial Amount so that such requested Letter
of credit can then be issued. The Revolving Credit A Loans
shall be made pro rata in accordance with each Revolving A
Bank's Revolving A Commitment Percentage. Each request for a
Revolving Credit A Loan hereunder shall constitute a
representation and warranty by the Borrowers that the
conditions set forth in Section 12 have been satisfied on the
date of such request. All Revolving Credit A Loans shall be
denominated in Dollars.
2.1.2. REVOLVING CREDIT B LOANS TO BORROWERS. Subject to
the terms and conditions set forth in this Credit Agreement,
to the extent the Revolver A Exposure equals the Maximum
Initial Amount or if the Revolver A Exposure is less than the
Maximum Initial Amount but the Company is requesting a
Revolving Credit
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B Loan in order to make a payment on the Subordinated Notes
which would constitute a Subdebt Funding Loan pursuant to
Section 8.29, then each of the Revolving B Banks severally
agrees to lend to the Borrowers and the Borrowers may borrow,
repay, and reborrow from time to time from the Closing Date up
to but not including the Revolving Credit Loan B Maturity Date
upon notice by the applicable Borrowers to the Agent given in
accordance with Section 2.6, such sums in Dollars as are
requested by the applicable Borrowers up to a maximum
aggregate amount outstanding (after giving effect to all
amounts requested by any Borrower) at any one time equal to
such Revolving B Bank's Revolving B Commitment, provided that
(a) the sum of the outstanding amount of the Revolving Credit
B Loans (after giving effect to all amounts requested) shall
not at any time exceed the lesser of (i) the Total Revolving B
Commitment and (ii) the Borrowing Base minus the Revolver A
Exposure and (b) (1) the sum of the outstanding amount of all
Revolving Credit Loans (after giving effect to all amounts
requested) advanced to the Subsidiary Borrowers shall not at
any time exceed $20,000,000, with the sum of the outstanding
amount of all Revolving Credit Loans (after giving effect to
all amounts requested) advanced to Holmes Far East, Esteem,
Raider and Patton HK not to at any time exceed $10,000,000 and
the sum of the outstanding amount of all Revolving Credit
Loans (after giving effect to all amounts requested) advanced
to Holmes UK and Bionaire B.V. not to at any time exceed
$10,000,000, and (2) the sum of the outstanding amount of all
Revolving Credit Loans (after giving effect to all amounts
requested) advanced to the Subsidiary Borrowers plus the
Maximum Drawing Amount and all Unpaid Reimbursement
Obligations shall not at any time exceed $45,000,000. The
Revolving Credit B Loans shall be made pro rata in accordance
with each Revolving B Bank's Revolving B Commitment
Percentage. Each request for a Revolving Credit Loan B
hereunder shall constitute a representation and warranty by
the Borrowers that the conditions set forth in Section 12 have
been satisfied on the date of such request. Each Revolving
Credit B Loan to the Borrowers shall be denominated in
Dollars.
2.2. COMMITMENT FEE.
2.2.1. REVOLVING CREDIT A LOANS COMMITMENT FEE. The Domestic
Borrowers agree to pay to the Agent for the accounts of the
Revolving A Banks based on the amount by which each such Revolving A
Bank's Revolving A Commitment exceeds the sum of such Revolving A
Bank's daily average outstanding Revolving Credit A Loans plus its
Revolving A Commitment Percentage of the sum of the Maximum Drawing
Amount and the Unpaid Reimbursement Obligations a commitment fee
calculated at the rate of the Commitment Fee Rate per annum on the
average daily amount during each calendar quarter or
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portion thereof from the Closing Date to the Revolving Credit Loan A
Maturity Date by which the Total Revolving A Commitment minus the
sum of the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations exceeds the outstanding amount of Revolving Credit A
Loans during such calendar quarter. The commitment fee shall be
payable quarterly in arrears on the first day of each calendar
quarter for the immediately preceding calendar quarter commencing on
the first such date following the date hereof, with a final payment
on the Revolving Credit Loan A Maturity Date or any earlier date on
which the Revolving A Commitments shall terminate.
2.2.1. REVOLVING CREDIT B LOANS COMMITMENT FEE. The Domestic
Borrowers agree to pay to the Agent for the accounts of the
Revolving B Banks based on the amount by which each such Revolving B
Bank's Revolving B Commitment exceeds the sum of such Revolving B
Bank's daily average outstanding Revolving Credit B Loans a
commitment fee calculated at the rate of the Commitment Fee Rate per
annum on the average daily amount during each calendar quarter or
portion thereof from the Closing Date to the Revolving Credit Loan B
Maturity Date by which the Total Revolving B Commitment exceeds the
outstanding amount of Revolving Credit B Loans during such calendar
quarter. The commitment fee shall be payable quarterly in arrears on
the first day of each calendar quarter for the immediately preceding
calendar quarter commencing on the first such date following the
date hereof, with a final payment on the Revolving Credit Loan B
Maturity Date or any earlier date on which the Revolving B
Commitments shall terminate.
2.3. REDUCTION OF COMMITMENTS.
2.3.1. REDUCTION OF TOTAL REVOLVING A COMMITMENT. The Company
shall have the right at any time and from time to time upon seven
(7) Business Days prior written notice to the Agent to reduce by
$5,000,000 or an integral multiple of $1,000,000 in excess thereof
or terminate entirely the Total Revolver A Commitment, whereupon the
Revolving A Commitments of the Banks shall be reduced pro rata in
accordance with their respective Revolving A Commitment Percentages
of the amount specified in such notice or, as the case may be,
terminated. Promptly after receiving any notice of the Company
delivered pursuant to this Section 2.3.1, the Agent will notify the
Banks of the substance thereof. Upon the effective date of any such
reduction or termination, the Domestic Borrowers shall pay to the
Agent for the respective accounts of the Banks the full amount of
any commitment fee then accrued on the amount of the reduction. No
reduction or termination of the Revolving A Commitments may be
reinstated.
2.3.2. REDUCTION OF TOTAL REVOLVING B COMMITMENT. After such
time as the Company has voluntarily and permanently reduced the
Total Revolver A Commitment by an amount of not less than
$25,000,000 and such Total Revolver A Commitment has been reduced
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and the Revolver A Exposure is equal to or less than the Maximum
Initial Amount, the Company shall have the right at any time and
from time to time upon seven (7) Business Days prior written notice
to the Agent to reduce by $5,000,000 or an integral multiple of
$1,000,000 in excess thereof or terminate entirely the Total
Revolver B Commitment, whereupon the Revolving B Commitments of the
Banks shall be reduced pro rata in accordance with their respective
Revolving B Commitment Percentages of the amount specified in such
notice or, as the case may be, terminated. Promptly after receiving
any notice of the Company delivered pursuant to this Section 2.3.2,
the Agent will notify the Banks of the substance thereof. Upon the
effective date of any such reduction or termination, the Domestic
Borrowers shall pay to the Agent for the respective accounts of the
Banks the full amount of any commitment fee then accrued on the
amount of the reduction. No reduction or termination of the
Revolving B Commitments may be reinstated.
2.4. THE REVOLVING CREDIT NOTES; LOAN ACCOUNTS. The Revolving
Credit A Loans and Revolving Credit B Loans, as the case may be,
shall be evidenced by separate promissory notes of the Domestic
Borrowers in substantially the form of Exhibit A-1 (a "Revolving
Credit A Note") and Exhibit A-2 hereto (a "Revolving Credit B
Note"), each dated as of May 7, 2001, and completed with appropriate
insertions. The obligations of each of the Foreign Borrowers to
repay all amounts borrowed by it as Revolving Credit Loans, all
interest thereon and all other amounts payable by it in respect
thereof shall be evidenced by this Credit Agreement, it being the
intention of the parties hereto that each Foreign Borrower's
obligations with respect to the Revolving Credit Loans owed by it is
evidenced only as stated herein and not by separate promissory notes
or other instruments. One Revolving Credit Note shall be payable to
the order of each Bank in a principal amount equal to such Bank's
Revolving A Commitment Percentage or Revolving B Commitment
Percentage, as the case may be, or, if less, the outstanding amount
of all Revolving Credit Loans made by such Bank, plus interest
accrued thereon, as set forth below. Each of the Borrowers
irrevocably authorizes each Bank to make or cause to be made, at or
about the time of the Drawdown Date of any Revolving Credit Loan or
at the time of receipt of any payment of principal on such Bank's
Revolving Credit Note or loan account, as the case may be, an
appropriate notation on such Revolving Bank's Record or record
pertaining to the loan account (the "Loan Account Record"), as the
case may be, reflecting the making of such Revolving Credit Loan or
(as the case may be) the receipt of such payment. The outstanding
amount of the Revolving Credit Loans set forth on such Bank's
Records and Loan Account Records shall be prima facie evidence of
the principal amount thereof owing and unpaid to such Revolving
Bank, but the failure to record, or any error in so recording, any
such amount on such Revolving Bank's Records or Loan Account
Records, as the case may be, shall not limit or otherwise affect the
obligations of the
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Borrowers hereunder or under any Revolving Credit Note to make
payments of principal of or interest on any Revolving Credit Note or
loan account when due.
2.5. INTEREST ON REVOLVING CREDIT LOANS. Except as otherwise
provided in Section 5.11,
(a) Each Base Rate Loan shall bear interest for the
period commencing with the Drawdown Date thereof and ending on
the last day of the Interest Period with respect thereto at
the rate per annum equal to the Base Rate plus the Applicable
Margin with respect to Base Rate Loans for such Revolving
Credit Loan as in effect from time to time, provided, to the
extent any Investor Guaranty Reduction Event shall have
occurred, on the date of such occurrence, the Applicable
Margin applicable to the Revolving Credit B Loans shall be
increased to the same amount as the Applicable Margin for
Revolving Credit A Loans which are Base Rate Loans.
(b) Each Eurocurrency Rate Loan shall bear interest for
the period commencing with the Drawdown Date thereof and
ending on the last day of the Interest Period with respect
thereto at the rate per annum equal to the Eurodollar Rate
determined for such Interest Period plus the Applicable Margin
with respect to Eurocurrency Rate Loans for such Revolving
Credit Loan as in effect from time to time, provided, to the
extent any Investor Guaranty Reduction Event shall have
occurred, on the date of such occurrence, the Applicable
Margin applicable to the Revolving Credit B Loans shall be
increased to the same amount as the Applicable Margin for
Revolving Credit A Loans which are Eurocurrency Rate Loans.
(c) Each Borrower promises to pay interest on each
Revolving Credit Loan requested by such Borrower in arrears on
each Interest Payment Date with respect thereto.
(d) Each Borrower shall be permitted to pay, and each
Revolving Credit B Bank shall be permitted to receive, any
regularly scheduled payment of interest on the Subdebt Funding
Loans so long as at the time of such payment, or after giving
effect thereto, no Event of Default has occurred and is
continuing pursuant to Section 13.1(a) or (b) of the Credit
Agreement as it relates to the Revolving Credit A Loans or the
Term Loans. To the extent any Revolving Credit B Bank receives
any such payment of interest on the Subdebt Funding Loans
while an Event of Default pursuant to Section 13.1(a) or (b)
of the Credit Agreement as it relates to the Revolving Credit
A Loans or the Term Loans has occurred and is continuing, each
such Revolving Credit B Bank will hold in trust and
immediately pay over to the Agent, in the same form of payment
received, for application to the Loans in the manner
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provided in Section 13.5, any amount that the Borrowers pay to
the Revolving Credit B Banks on account of the Subdebt Funding
Loans.
2.6. REQUESTS FOR REVOLVING CREDIT LOANS.
2.6.1. GENERAL. The applicable Borrower shall give to
the Agent written notice in the form of Exhibit B hereto (or
telephonic notice confirmed in a writing in the form of
Exhibit B hereto) of each Revolving Credit Loan requested
hereunder (a "Loan Request") no later than (a) one (1)
Business Day prior to the proposed Drawdown Date of any Base
Rate Loan and (b) three (3) Business Days prior to the
proposed Drawdown Date of any Eurocurrency Rate Loan. Each
such notice shall specify (i) the principal amount of the
Revolving Credit Loan requested and whether such request is
for a Revolving Credit A Loan or a Revolving Credit B Loan,
(ii) the proposed Drawdown Date of such Revolving Credit Loan,
(iii) the Interest Period for such Revolving Credit Loan, and
(iv) the Type of such Revolving Credit Loan. Promptly upon
receipt of any such notice (but in any event on the day the
Agent receives a request for a Revolving Credit Loan by the
Domestic Borrowers and by the day following the date the Agent
receives a request for a Revolving Credit Loan by a Subsidiary
Borrower), the Agent shall notify each of the applicable Banks
thereof. Each Loan Request shall be irrevocable and binding on
the Borrowers and shall obligate the requesting Borrower to
accept the Revolving Credit Loan requested from the applicable
Revolving Banks on the proposed Drawdown Date. Each Loan
Request shall be in a minimum aggregate amount of $500,000 or
an integral multiple of $100,000 in excess thereof. In
addition, notwithstanding the notice and minimum amount
requirements et forth above, if at any time the sum of the
outstanding amount of Revolver A Exposure exceeds the Maximum
Initial Amount and the sum of the outstanding amount of all
Revolving Credit B Loans is less than the Total B Commitment
Percentage, the Borrowers shall have been deemed to have made
a Loan Request for a Revolving Credit B Loan in an amount
sufficient to repay all Revolving Credit A Loans so that the
Revolver A Exposure is equal to the Maximum Initial Amount.
2.6.2. SWING LINE. Notwithstanding the notice and
minimum amount requirements set forth in Section 2.6.1 but
otherwise in accordance with the terms and conditions of this
Credit Agreement, the Swing Line Bank (a) shall, and without
conferring with the Revolving Banks, make Revolving Credit
Loans to the Domestic Borrowers by entry of credits to the
Domestic Borrowers' operating account (the "Operating
Account") maintained with the Agent to cover checks or other
charges which the Domestic Borrowers have drawn or made
against such account, but in no
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event shall the Swing Line Bank be required to make any such
Revolving Credit Loans if, after giving effect to making all
such Revolving Credit Loans, the outstanding amount of all
such Revolving Credit Loans owned to the Swing Line Bank
exceeds such Swing Line Bank's Commitment and (b) may, in its
sole discretion and without conferring with the Revolving
Banks, make Revolving Credit Loans to the Domestic Borrowers
in an amount as otherwise requested by any of the Domestic
Borrowers (each Revolving Credit Loan referred to in the
foregoing clauses (a) and (b) being referred to herein as a
"Swing Line Loan"). Each Domestic Borrower hereby requests and
authorizes the Swing Line Bank to make from time to time such
Swing Line Loans by means of appropriate entries of such
credits sufficient to cover checks and other charges then
presented for payment from the Operating Account or as
otherwise so requested. Each Domestic Borrower acknowledges
and agrees that the making of such Swing Line Loans shall, in
each case, be subject in all respects to the provisions of
this Credit Agreement as if they were Revolving Credit Loans
covered by a Loan Request including, without limitation, the
limitations set forth in Section 2.1 and the requirements that
the applicable provisions of Section 12 be satisfied. All
actions taken by the Swing Line Bank pursuant to the
provisions of this Section 2.6.2 shall be conclusive and
binding on the Domestic Borrowers and the Revolving Banks
absent the Swing Line Bank's gross negligence or willful
misconduct. Swing Line Loans made pursuant to this
Section 2.6.2 shall be Base Rate Loans denominated in Dollars
until converted in accordance with the provisions of the
Credit Agreement and, prior to a Settlement, such interest
shall be for the account of the Swing Line Bank.
2.7. CONVERSION OPTIONS.
2.7.1. CONVERSION TO DIFFERENT TYPE OF REVOLVING CREDIT
LOAN. The Borrowers may elect from time to time to convert any
outstanding Revolving Credit Loan to a Revolving Credit Loan
of another Type, provided that (a) with respect to any such
conversion of a Revolving Credit Loan to a Base Rate Loan, the
applicable Borrower shall give the Agent at least one (1)
Business Day prior written notice of such election; (b) with
respect to any such conversion of a Base Rate Loan to a
Eurocurrency Rate Loan, the applicable Borrower shall give the
Agent at least three (3) Business Days prior written notice of
such election; (c) with respect to any such conversion of a
Eurocurrency Rate Loan into a Revolving Credit Loan of another
Type, such conversion shall only be made on the last day of
the Interest Period with respect thereto and (d) no Revolving
Credit Loan may be converted into a Eurocurrency Rate Loan
when any Default or Event of Default has occurred and is
continuing. The Agent shall promptly notify the applicable
Banks of such election (but in any event on the day the
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Agent receives an election by the Domestic Borrowers and by
the day following the date the Agent receives an election by
any Foreign Borrower). On the date on which such conversion is
being made each applicable Bank shall take such action as is
necessary to transfer its Revolving A Commitment Percentage or
Revolving B Commitment Percentage, as the case may be, of such
Revolving Credit Loans to its Domestic Lending Office or its
Eurocurrency Lending Office, as the case may be. All or any
part of outstanding Revolving Credit Loans of any Type may be
converted into a Revolving Credit Loan of another Type as
provided herein, provided that any partial conversion shall be
in an aggregate principal amount of $500,000 or an integral
multiple of $100,000 in excess thereof. Each Conversion
Request relating to the conversion of a Revolving Credit Loan
to a Eurocurrency Rate Loan shall be irrevocable by the
applicable Borrower.
2.7.2. CONTINUATION OF TYPE OF REVOLVING CREDIT LOAN.
Any Revolving Credit Loan of any Type may be continued as a
Revolving Credit Loan of the same Type upon the expiration of
an Interest Period with respect thereto by compliance by the
applicable Borrower with the notice provisions contained in
Section 2.7.1; provided that as to any Eurocurrency Rate
Loans, no such Eurocurrency Rate Loan may be continued as such
when any Default or Event of Default has occurred and is
continuing, but shall be automatically converted to a Base
Rate Loan on the last day of the first Interest Period
relating thereto ending during the continuance of any Default
or Event of Default of which officers of the Agent active upon
the Company's account have actual knowledge. In the event that
the applicable Borrower fails to provide any such notice with
respect to the continuation of any Eurocurrency Rate Loan as
such, then such Eurocurrency Rate Loan shall be automatically
converted to a Base Rate Loan on the last day of the first
Interest Period relating thereto. The Agent shall notify the
applicable Banks promptly when any such automatic conversion
contemplated by this Section 2.7 is scheduled to occur.
2.7.3. EUROCURRENCY RATE LOANS. Any conversion to or
from Eurocurrency Rate Loans shall be in such amounts and be
made pursuant to such elections so that, after giving effect
thereto, the aggregate principal amount of all Eurocurrency
Rate Loans having the same Interest Period shall not be less
than $500,000 or a whole multiple of $100,000 in excess
thereof.
2.8. FUNDS FOR REVOLVING CREDIT LOANS.
2.8.1. FUNDING PROCEDURES FOR REVOLVING CREDIT LOANS TO
BORROWERS. Not later than (a) 1:00 p.m. (Boston time) on the
proposed Drawdown Date of any Revolving Credit Loans to be
made to the Domestic Borrowers and (b) 11:00 a.m. (local time
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with respect to the applicable Subsidiary Borrower) on the
proposed Drawdown Date of any Revolving Credit Loans to be
made to the Subsidiary Borrowers, each of the applicable
Revolving Banks will make available to the Agent to credit to
the applicable Borrower's account in Same Day Funds, the
amount of such Revolving A Bank's Revolving A Commitment
Percentage of the amount of the requested Revolving Credit A
Loans or the amount of such Revolving B Bank's Revolving B
Commitment Percentage of the amount of the requested Revolving
Credit Loan B, as the case may be, at the Agent's Head Office
(in the case of Revolving Credit Loans to a Domestic Borrower)
or at either the Agent's local branch located in Jardine
House, Suites 801-809, One Connaught Place, Central Hong Kong
or the Agent's local branch located at 39 Victoria Street,
London SW1H OEE, England (in the case of Revolving Credit
Loans to Foreign Borrowers). Upon receipt from each applicable
Revolving Bank of such amount, and upon receipt of the
documents required by Section 12 and the satisfaction of the
other conditions set forth therein, to the extent applicable,
the Agent will make available to the applicable Borrower the
aggregate amount of such applicable Revolving Credit Loans
made available to the Agent by the applicable Revolving Banks.
The failure or refusal of any Revolving Bank to make available
to the Agent at the aforesaid time and place on any Drawdown
Date the amount of its Revolving A Commitment Percentage or
Revolving B Commitment Percentage, as the case may be, of the
requested Revolving Credit A Loans or Revolving Credit B
Loans, as the case may be, shall not relieve any other
Revolving Bank from its several obligations hereunder to make
available to the Agent the amount of such other Revolving
Bank's Revolving A Commitment Percentage or Revolving Bank's
Revolving B Commitment Percentage, as the case may be, of any
requested Revolving Credit Loans.
2.8.2. ADVANCES BY AGENT FOR REVOLVING CREDIT LOANS TO
BORROWERS. The Agent may, unless notified to the contrary by
any applicable Revolving Bank prior to a Drawdown Date, assume
that such Revolving Bank has made available to the Agent on
such Drawdown Date the amount of such Revolving Bank's
Revolving A Commitment Percentage or Revolving Bank's
Revolving B Commitment Percentage, as the case may be, of the
Revolving Credit A Loans or the Revolving Credit B Loans, as
the case may be, to be made on such Drawdown Date, and the
Agent may (but it shall not be required to), in reliance upon
such assumption, make available to the applicable Borrower a
corresponding amount. If any applicable Revolving Bank makes
available to the Agent such amount on a date after such
Drawdown Date, such Revolving Bank shall pay to the Agent on
demand an amount equal to the product of (a) the average
computed for the period referred to in clause (c) below, of
the Overnight Rate for each day included in
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such period, times (b) the amount of such Revolving Bank's
Revolving A Commitment Percentage of such Revolving Credit A
Loans or of such Revolving Bank's Revolving B Commitment
Percentage of such Revolving Credit B Loans, as the case may
be, times (c) a fraction, the numerator of which is the number
of days that elapse from and including such Drawdown Date to
the date on which the amount of such Revolving Bank's
Revolving A Commitment Percentage of such Revolving Credit A
Loans or of such Revolving Bank's Revolving B Commitment
Percentage of such Revolving Credit B Loans, as the case may
be, shall become immediately available to the Agent, and the
denominator of which is 365. A statement of the Agent
submitted to such Revolving Bank with respect to any amounts
owing under this paragraph shall be prima facie evidence of
the amount due and owing to the Agent by such Revolving Bank.
If the amount of such Revolving Bank's Revolving A Commitment
Percentage of such Revolving Credit A Loans or of such
Revolving Bank's Revolving B Commitment Percentage of such
Revolving Credit B Loans, as the case may be, is not made
available to the Agent by such Revolving Bank within three (3)
Business Days following such Drawdown Date, the Agent shall be
entitled to recover such amount from the applicable Borrowers
on demand, with interest thereon at the rate per annum
applicable to the Revolving Credit Loans made on such Drawdown
Date.
2.9. INTENTIONALLY OMITTED.
2.10. INTENTIONALLY OMITTED.
2.11. SETTLEMENTS.
2.11.1. GENERAL. On each Settlement Date, the Agent
shall, not later than 11:00 a.m. (Boston time), give
telephonic or facsimile notice (a) to the applicable Revolving
Banks and the Company of the respective outstanding amount of
Swing Line Loans made by the Swing Line Bank on behalf of the
Revolving Banks from the immediately preceding Settlement Date
through the close of business on the prior day and the amount
of any Eurocurrency Rate Loans to be made (following the
giving of notice pursuant to Section 2.6.1(b)) on such date
pursuant to a Loan Request and (b) to the applicable Revolving
Banks of the amount (a "Settlement Amount") that each
Revolving Bank (a "Settling Bank") shall pay to effect a
Settlement of any Revolving Credit Loan. A statement of the
Agent submitted to the Revolving Banks and the Company or to
the Revolving Banks with respect to any amounts owing under
this Section 2.11 shall be prima facie evidence of the amount
due and owing. Each Settling Bank shall, not later than 3:00
p.m. (Boston time) on such Settlement Date, effect a wire
transfer of immediately available funds to the Agent in the
amount
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of the Settlement Amount for such Settling Bank. All funds
advanced by any Revolving Bank as a Settling Bank pursuant to
this Section 2.11 shall for all purposes be treated as a
Revolving Credit A Loan or Revolving Credit B Loan, as the
case may be, made by such Settling Bank to the Domestic
Borrowers and all funds received by any Revolving Bank
pursuant to this Section 2.11 shall for all purposes be
treated as repayment of amounts owed with respect to Revolving
Credit A Loans or Revolving Credit B Loans, as the case may
be, made by such Revolving Bank. In the event that any
bankruptcy, reorganization, liquidation, receivership or
similar cases or proceedings in which any Domestic Borrower is
a debtor prevent a Settling Bank from making any Revolving
Credit A Loans or Revolving Credit B Loans, as the case may
be, to effect a Settlement as contemplated hereby, such
Settling Bank will make such dispositions and arrangements
with the other Revolving Banks with respect to such Revolving
Credit A Loans or Revolving Credit B Loans, as the case may
be, either by way of purchase of participations, distribution,
pro tanto assignment of claims, subrogation or otherwise as
shall result in each Revolving Bank's share of the outstanding
Revolving Credit A Loans or Revolving Credit B Loans, as the
case may be, being equal, as nearly as may be, to such
Revolving Bank's Revolving A Commitment Percentage or
Revolving Bank's Revolving B Commitment Percentage, as the
case may be, of the outstanding amount of the Revolving Credit
A Loans or Revolving Credit B Loans, as the case may be.
2.11.2. FAILURE TO MAKE FUNDS AVAILABLE. The Agent may,
unless notified to the contrary by any Settling Bank prior to
a Settlement Date, assume that such Settling Bank has made or
will make available to the Agent on such Settlement Date the
amount of such Settling Bank's Settlement Amount, and the
Agent may (but it shall not be required to), in reliance upon
such assumption, make available to the Borrowers a
corresponding amount. If any Settling Bank makes available to
the Agent such amount on a date after such Settlement Date,
such Settling Bank shall pay to the Agent on demand an amount
equal to the product of (a) the average computed for the
period referred to in clause (c) below, of the weighted
average interest rate paid by the Agent for federal funds
acquired by the Agent during each day included in such period,
times (b) the amount of such Settlement Amount, times (c) a
fraction, the numerator of which is the number of days that
elapse from and including such Settlement Date to the date on
which the amount of such Settlement Amount shall become
immediately available to the Agent, and the denominator of
which is 360. A statement of the Agent submitted to such
Settling Bank with respect to any amounts owing under this
Section 2.11.2 shall be prima facie evidence of the amount due
and owing to the Agent by such Settling Bank. If such Settling
Bank's Settlement Amount is not made available to the Agent by
such Settling Bank within
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three (3) Business Days following such Settlement Date, the
Agent shall be entitled to recover such amount from the
applicable Borrower on demand, with interest thereon at the
rate per annum applicable to the Revolving Credit A Loans of
such Settlement Date.
2.11.3. NO EFFECT ON OTHER REVOLVING BANKS. The failure
or refusal of any Settling Bank to make available to the Agent
at the aforesaid time and place on any Settlement Date the
amount of such Settling Bank's Settlement Amount shall not (a)
relieve any other Settling Bank from its several obligations
hereunder to make available to the Agent the amount of such
other Settling Bank's Settlement Amount or (b) impose upon any
Revolving Bank, other than the Settling Bank so failing or
refusing, any liability with respect to such failure or
refusal or otherwise increase the Revolving A Commitment
Percentage or Revolving B Commitment Percentage, as the case
may be, of such other Revolving Bank.
2.12. REPAYMENT OF REVOLVING CREDIT LOANS.
2.12.1. MATURITY. Each Domestic Borrower jointly and
severally promises to pay on the Revolving Credit Loan A
Maturity Date, and there shall become absolutely due and
payable on the Revolving Credit Loan A Maturity Date, all of
the Revolving Credit A Loans outstanding on such date to the
Borrowers, together with any and all accrued and unpaid
interest thereon. Each Foreign Borrower jointly and severally
promises to pay on the Revolving Credit Loan A Maturity Date,
and there shall become absolutely due and payable on the
Revolving Credit Loan A Maturity Date, all Revolving Credit A
Loans outstanding on such date to the Foreign Borrowers (but
not the Domestic Borrowers), together with all accrued and
unpaid interest thereon. Each Domestic Borrower jointly and
severally promises to pay on the Revolving Credit Loan B
Maturity Date, and there shall become absolutely due and
payable on the Revolving Credit Loan B Maturity Date, all of
the Revolving Credit B Loans outstanding on such date to the
Borrowers, together with any and all accrued and unpaid
interest thereon. Each Foreign Borrower jointly and severally
promises to pay on the Revolving Credit Loan B Maturity Date,
and there shall become absolutely due and payable on the
Revolving Credit Loan B Maturity Date, all Revolving Credit B
Loans outstanding on such date to the Foreign Borrowers (but
not the Domestic Borrowers), together with all accrued and
unpaid interest thereon, provided, no payment shall be made on
any Subdebt Funding Loans until such time as all amounts owing
on the Revolving Credit A Loan and the Term Loans (whether
principal, interest, fees or any other amounts) have been paid
in full in cash. To the extent any Revolving Credit B Bank
receives any such payments hereunder
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on the Subdebt Funding Loans prior to the repayment in full in
cash of all amounts owing on the Revolving Credit A Loans and
the Term Loans (whether such amounts are principal, interest,
fees or any other amounts), each such Revolving Credit B Bank
will hold in trust and immediately pay over to the Agent, in
the same form of payment received, for application to the
Loans any amount that the Borrowers pay to the Revolving
Credit B Banks on account of the Subdebt Funding Loans. The
Banks hereby agree that to the extent all or any portion of
the Subdebt Fundings Loans are not paid on the Revolving
Credit Loan B Maturity Date as a result of the Borrower's
agreement not to make such payments until the Revolving Credit
A Loans and the Term Loans have been repaid in full in cash,
the failure to make such a payment to the Revolving Credit B
Banks of such Subdebt Funding Loans shall not be an Event of
Default under this Credit Agreement until one (1) Business Day
following the latest to occur of the Revolving Credit Loan A
Maturity Date, the Term Loan A Maturity Date and the Term Loan
B Maturity Date.
2.12.2. MANDATORY REPAYMENTS OF REVOLVING CREDIT LOANS.
2.12.2.1. GENERAL PROVISIONS AS TO REVOLVING CREDIT A
LOANS.
If at any time (a) the Revolver A Exposure exceeds the lesser
of (i) the Total Revolving A Commitment and (ii) the Borrowing
Base less the outstanding amount of Revolver Credit B Loans,
or (b) the Revolver A Exposure exceeds the Maximum Initial
Amount and the outstanding Revolving B Loans are in an amount
which is less than the Total Revolving B Commitment or (c)
after the earlier to occur of the Revolving Credit Loan B
Maturity Date and January 31, 2002 the Revolver A Exposure
exceeds the Maximum Initial Amount, then the Domestic
Borrowers shall immediately pay the amount of such excess to
the Agent for the respective accounts of the Revolving A Banks
for application: first, to any Swing Line Loans outstanding,
second, to any Unpaid Reimbursement Obligations; third, to the
Revolving Credit A Loans; and fourth, to provide to the Agent
cash collateral for Reimbursement Obligations as contemplated
by Section 4.2(b) and (c). Each payment of any Unpaid
Reimbursement Obligations or prepayment of Revolving Credit A
Loans shall be allocated among the Revolving A Banks, in
proportion, as nearly as practicable, to each Reimbursement
Obligation or (as the case may be) the respective unpaid
principal amount of each Revolving A Bank's Revolving Credit A
Note or loan account, as the case may be, with adjustments to
the extent practicable to equalize any prior payments or
repayments not exactly in proportion.
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2.12.2.2. GENERAL PROVISIONS AS TO REVOLVING CREDIT B
LOANS.
If at any time (a) the sum of the outstanding amount of the
Revolving Credit B Loans exceeds the lesser of (i) the Total
Revolving B Commitment and (ii) the Borrowing Base less the
Revolver A Exposure, or (b) there are any outstanding
Revolving B Loans (other than the Subdebt Funding Loans) at a
time when the Revolver A Exposure is less than the Maximum
Initial Amount, then the Domestic Borrowers shall immediately
pay the amount of such excess to the Agent for the respective
accounts of the Revolving B Banks for application: first, to
any Swing Line Loans outstanding for the accounts of the
Revolving B Banks and second, to the Revolving Credit B Loans.
Each prepayment of Revolving Credit B Loans shall be allocated
among the Revolving B Banks, in proportion, as nearly as
practicable, to the respective unpaid principal amount of each
Revolving B Bank's Revolving Credit B Note or loan account, as
the case may be, with adjustments to the extent practicable to
equalize any prior payments or repayments not exactly in
proportion.
2.12.2.3. REPAYMENTS WITH NET CASH SALE PROCEEDS FROM
PERMITTED DISPOSITIONS AND NET CASH PROCEEDS FROM EQUITY
ISSUANCE.
In the event the Company or any of its Subsidiaries
receives any (a) Net Cash Sale Proceeds from the sale or other
disposition of assets permitted by Section 9.5.2., (b)
proceeds of insurance claims which insurance claim proceeds
(but not the Net Cash Sale Proceeds for the sale or other
disposition of assets) have not been either (i) reinvested by
the Company or such Subsidiary in assets which are normally
used in the ordinary course of business of the Borrowers,
including reinvestments in replacement assets or to repair the
asset so damaged, as the case may be, within 360 days of
receipt by such Person of such proceeds or (ii) subject to a
commitment by the Company or such Subsidiary pursuant to any
contract to be used to make such a reinvestment, subject only
to customary conditions (other than obtaining financing), on
or prior to the 270th day following the Company's or such
Subsidiary's receipt of the claimed amount and the claimed
amounts contractually committed are so applied within 360 days
following receipt of such amounts or (c) Net Cash Proceeds
from any Equity Issuances by the Company or its Subsidiaries
after the Closing Date (except for Net Cash Proceeds received
by the Company from Equity Issuances by the Company (i) made
in connection with its Stock Option Plan up to a maximum
aggregate amount of not more than $4,000,000 or to members of
the Company's management (other than in connection with the
sale of Equity Issuances to such members of management in the
Initial Public
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Offering), (ii) received from any Principal of the Company or
other shareholders of the Company existing on the Closing Date
(the "Additional Investors") so long as no Event of Default
has occurred and is continuing and provided such Net Cash
Proceeds are not received in connection with the sale of
Equity Issuances to the Principals or such Additional
Investors in the Initial Public Offering, or (iii) received
from any other Person so long as no Event of Default has
occurred and is continuing, such Net Cash Proceeds are not
received in connection with the sale of Equity Issuances to
such Persons in the Initial Public Offering and provided the
aggregate amount of such Net Cash Proceeds are used to finance
all or any portion of a Permitted Acquisition), the Company
shall, within thirty (30) days of receipt thereof, after
repayment in full of the Term Loans as provided in Section
3.3, repay the outstanding Revolving Credit Loans in an amount
equal to 100% of such Net Cash Sale Proceeds, insurance
proceeds or Net Cash Proceeds, as the case may be, with such
proceeds being applied first to the Revolving Credit A Loans
until such time as the sum of the Revolver A Exposure is equal
to the Maximum Initial Amount (with a concurrent reduction on
the Total Revolving A Commitment by one hundred percent (100%)
of such amount), then any remaining amounts to the Revolving B
Loans other than the Subdebt Funding Loans (with a concurrent
reduction on the Revolving B Commitment by one hundred percent
(100%) of such amount), then to the remaining Revolving Credit
A Loans (with a concurrent reduction of the Revolving A
Commitment by one hundred percent (100%) of such amount) and
then to the Subdebt Funding Loans (with a concurrent reduction
on the Revolving B Commitment by one hundred percent (100%) of
such amount); provided, however, that notwithstanding the
foregoing, in the event the Company receives any Net Cash
Proceeds from its Initial Public Offering or any subsequent
public offering of its capital stock, the Company shall only
be required to repay an amount equal to 50% of the Net Cash
Proceeds of such Equity Issuance.
2.12.2.4. REPAYMENTS WITH NET CASH SALE PROCEEDS FROM
SALE OF DESIGNATED PROPERTY.
Notwithstanding anything to the contrary contained in
Section 2.12.2.3 above, in the event the Majority Banks
consent to the sale by the Company of the Designated Property
(provided nothing herein shall in any manner be construed as
an agreement or consent by such Banks to such sale) and the
Company receives any Net Cash Sale Proceeds from such sale of
the Designated Property, such Net Cash Sale Proceeds shall be
applied first to the Term Loans in the manner provided for in
Section 3.3 hereof and then to the Revolving Credit A Loans.
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2.12.2.5. REPAYMENTS WITH NET CASH SALE PROCEEDS FROM
OTHER ASSET DISPOSITIONS.
In the event the Company or any of its Subsidiaries
receives any Net Cash Sale Proceeds in connection with any
Asset Sale not otherwise permitted by Section 9.5.2 but in
which the Majority Banks have provided written consent
(although nothing contained herein shall be in any manner
construed as any willingness on the part of any of the banks
to provide such consent), other than the sale of the
Designated Property, such Net Cash Sale Proceeds shall be
applied (a) first to reduce the Revolver A Exposure to an
amount equal to the Maximum Initial Amount (with a concurrent
reduction of the Revolving A Commitment Percentage by such
amount), (b) second to reduce the Revolving Credit B Loans
other than the Subdebt Funding Loans (with a concurrent
reduction of the Revolving B Commitment by such amount), (c)
third to repay the remaining Revolver A Exposure, the Term
Loan A and the Term Loan B on a pro rata basis (with a
concurrent reduction of the Revolving A Commitment by the
amount of any such repayment to the Revolving Credit A Loans),
with any amounts so being applied to the Term Loan A and Term
Loan B being applied against remaining scheduled installments
due thereon in the inverse order of maturity and (d) fourth to
reduce the Subdebt Funding Loans (with a concurrent reduction
of the Revolving B Commitment by such amount).
2.12.3. CREDIT RECEIVED FOR FUNDS RECEIVED IN
CONCENTRATION ACCOUNT. Prior to the occurrence of an Event of
Default as to which the account officers of the Agent active
upon the Borrower's account have actual knowledge, (a) all
funds and cash proceeds in the form of money, checks and like
items received in the Fleet Concentration Account as
contemplated by Section 8.24 shall be credited, on the same
Business Day on which the Agent determines that good collected
funds have been received, and, prior to the receipt of good
collected funds, on a provisional basis until final receipt of
good collected funds, and applied as contemplated by
Section 2.12.4, (b) all funds and cash proceeds in the form of
a wire transfer received in the Fleet Concentration Account as
contemplated by Section 8.24 shall be credited on the same
Business Day as the Agent's receipt of such amounts (or up to
such later date as the Agent determines that good collected
funds have been received), and applied as contemplated by
Section 2.12.4, and (c) all funds and cash proceeds in the
form of an automated clearing house transfer received in the
Fleet Concentration Account as contemplated by Section 8.24
shall be credited, on the next Business Day following the
Agent's receipt of such amounts (or up to such later date as
the Agent determines that good collected funds have been
received), and applied as contemplated by Section 2.12.4. For
purposes of the foregoing provisions of this Section 2.12.3,
the Agent shall not be
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deemed to have received any such funds or cash proceeds on any
day unless received by the Agent before 2:30 p.m. (Boston
time) on such day. The Domestic Borrowers further acknowledge
and agree that any such provisional credits or credits in
respect of wire or automatic clearing house funds transfers
shall be subject to reversal if final collection in good funds
of the related item is not received by, or final settlement of
the funds transfer is not made in favor of, the Agent in
accordance with the Agent's customary procedures and practices
for collecting provisional items or receiving settlement of
funds transfers.
2.12.4. APPLICATION OF PAYMENTS PRIOR TO EVENT OF
DEFAULT.
(a) Prior to the occurrence of an Event of Default of
which the account officers of the Agent active on the
Borrowers' account have knowledge, all funds transferred to
the Fleet Concentration Account and for which the Domestic
Borrowers have received credits shall be applied to the
Obligations as follows:
(i) first, to pay amounts of principal, interest,
Unpaid Reimbursement Obligations, fees and all other
amounts then due and payable under this Credit
Agreement, the Notes and the other Loan Documents;
(ii) second, to reduce Revolving Credit Loans made
by the Swing Line Lender pursuant to Section 2.6.2 and
for which Settlement has not then been made;
(iii) third, if the Revolver A Exposure is greater
than the Maximum Initial Amount, to the Revolving Credit
A Loans in an amount of such excess, to be applied first
to Base Rate Loans and then to Eurocurrency Rate Loans;
(iv) fourth, to the outstanding amount of the
Revolving Credit B Loans other than the Subdebt Funding
Loans, to be applied first to Base Rate Loans and then
to Eurocurrency Rate Loans;
(v) fifth, to reduce the remaining Revolving
Credit A Loans which are Base Rate Loans;
(vi) sixth, to reduce the remaining Revolving
Credit A Loans which are Eurocurrency Rate Loans; and
(vii) seventh, except as otherwise required by
Section 4.2(b) and (c), to the Operating Account.
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(b) All prepayments of Eurocurrency Rate Loans prior to
the end of an Interest Period shall obligate the applicable
Domestic Borrower to pay any breakage costs associated with
such Eurocurrency Rate Loans in accordance with Section 5.10.
Prior to the occurrence of an Event of Default, the applicable
Domestic Borrower may elect to avoid such breakage costs by
providing to the Agent cash in an amount sufficient to cash
collateralize such Eurocurrency Rate Loans, but in no event
shall such Domestic Borrower be deemed to have paid such
Eurocurrency Rate Loans until such cash has been paid to the
Agent for application to such Eurocurrency Rate Loans. The
Agent may elect to cause such cash collateral to be deposited
into either (i) a cash collateral account pursuant to the
terms of a cash collateral agreement executed by the
applicable Domestic Borrower and the Agent and in form and
substance satisfactory to the Agent or (ii) the applicable
Domestic Borrower's Operating Account with appropriate
instructions prohibiting such Domestic Borrower's withdrawal
of such funds so long as they remain cash collateral. In each
such case, the applicable Domestic Borrower agrees to execute
and deliver to the Agent such instruments and documents,
including Uniform Commercial Code financing statements and
agreements with any third party depository banks, as the Agent
may request.
(c) All prepayments of the Revolving Credit A Loans or
Revolving Credit B Loans, as the case may be, pursuant to this
Section 2.12.4 shall be allocated among the Revolving A Banks
and the Revolving B Banks, as the case may be, making such
Revolving Credit A Loans or Revolving Credit B Loans, as the
case may be, in proportion, as nearly as practicable, to the
respective unpaid principal amount of such Revolving Credit A
Loans or Revolving Credit B Loans, as the case may be,
outstanding, with adjustments to the extent practicable to
equalize any prior payments or repayments not exactly in
proportion. Prior to any Settlement Date, however, all
prepayments of the Revolving Credit Loans shall be applied in
accordance with this Section 2.12.4, first to outstanding
Revolving Credit Loans of the Swing Line Bank.
2.12.5. REPAYMENTS OF REVOLVING CREDIT LOANS AFTER EVENT
OF DEFAULT. Following the occurrence and during the
continuance of an Event of Default of which the account
officers of the Agent active on the Borrowers' account have
knowledge, all funds transferred to the Fleet Concentration
Account and for which the applicable Domestic Borrower has
received credits shall be applied to the Obligations in
accordance with Section 13.5.
2.13. OPTIONAL REPAYMENTS OF REVOLVING CREDIT LOANS. Each of
the Borrowers shall have the right, at its election, to repay the
outstanding amount of the Revolving Credit A Loans or Revolving
Credit
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B Loans, as the case may be, as a whole or in part, at any time
without penalty or premium (but subject to Section 5.10); provided,
however, (a) no prepayment of the Revolving Credit B Loans shall be
made if at the time of such prepayment the Revolver A Exposure
exceeds the Maximum Initial Amount, (b) no prepayment of the Subdebt
Funding Loans shall be made if at the time of such prepayment there
are any outstanding Revolving Credit A Loans or Term Loans; and (c)
no prepayment of the Revolving Credit A Loans shall be made if, at
the time of making such prepayment, the Revolver A Exposure is less
than or equal to the Maximum Initial Amount and there are any
outstanding Revolving Credit B Loans other than the Subdebt Funding
Loans. The applicable Borrower shall give the Agent, no later than
10:00 a.m., Boston time on the date of any prepayment written notice
of any proposed prepayment pursuant to this Section 2.13 of Base
Rate Loans, and two (2) Business Days notice of any proposed
prepayment pursuant to this Section 2.13 of Eurocurrency Rate Loans,
in each case specifying the proposed date of prepayment of Revolving
Credit A Loans or Revolving Credit B Loans, as the case may be, and
the principal amount to be prepaid. Each such partial prepayment of
the Revolving Credit Loans shall be in an integral multiple of
$500,000, shall be accompanied by the payment of accrued interest on
the principal prepaid to the date of prepayment and shall be
applied, in the absence of instruction by the applicable Borrower,
in accordance with Section 2.12.4(a)(iii) hereof. Each partial
prepayment shall be allocated among the applicable Revolving Banks,
in proportion, as nearly as practicable, to the respective unpaid
principal amount of each Revolving Bank's Revolving Credit A Note or
loan account or Revolving Credit B Note or loan account, as the case
may be, with adjustments to the extent practicable to equalize any
prior repayments not exactly in proportion. All repayments of the
Revolving Credit Loans shall be applied first, to such Loans
borrowed in compliance with the second paragraph of Section 4.09 of
the Subordinated Indenture, and second, to such Loans borrowed in
compliance with the first paragraph of Section 4.09 of the
Subordinated Indenture.
2.14. CHANGE IN BORROWING BASE. The Borrowing Base shall be
determined monthly by the Agent by reference to the Borrowing Base
Report delivered to the Revolving Banks and the Agent pursuant to
Section 8.4(i)."
2.15. MAXIMUM OVERADVANCE. The Maximum Overadvance shall
automatically be reduced or increased, as the case may be, in
accordance with the table set forth in the definition of "Maximum
Overadvance", or, if the date specified for such change is not a
Business Day, the immediately following Business Day. If at any time
either the Revolver A Exposure or the outstanding amount of the
Revolving Credit B Loans, as the case may be, exceeds the Borrowing
Base then in effect at such time (whether as a result in a reduction
in the Maximum Overadvance as and when specified or otherwise), then
the Borrowers shall immediately pay the amounts of such excess to
the Agent for the
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respective accounts of the Revolving A Banks or Revolving B Banks,
as the case may be, for application first to any Unpaid
Reimbursement Obligations (if being repaid to the Revolving A
Banks), second to the Revolving Credit A Loans or Revolving Credit B
Loans, as the case may be, and third to provide the Agent cash
collateral for Reimbursement Obligations if required by Section 4.2
hereof (if being repaid to the Revolving A Banks).
SECTION 4. AMENDMENT TO SECTION 2A OF THE CREDIT AGREEMENT. Section 2A of
the Credit Agreement is hereby amended by deleting Section 2A in its entirety
and substituting in place thereof the words "Intentionally Omitted".
SECTION 5. AMENDMENT TO SECTION 3 OF THE CREDIT AGREEMENT. Section 3.5.1
of the Credit Agreement is hereby amended by deleting such Section 3.5.1 in its
entirety and restating it as follows:
3.5.1. INTEREST RATES. Except as otherwise provided
in Section 5.11, the Term Loans shall bear interest during each
Interest Period relating to all or any portion of the Term Loans at
the following rates:
(a) to the extent that all or any portion of Term Loan A bears
interest during such Interest Period at the Base Rate, Term Loan A
or such portion shall bear interest during such Interest Period at
the rate per annum equal to the Base Rate plus the Applicable Margin
for Base Rate Loans.
(b) To the extent that all or any portion of Term Loan A bears
interest during such Interest Period at the Eurocurrency Rate, Term
Loan A or such portion shall bear interest during such Interest
Period at the rate per annum equal to the Eurocurrency Rate plus the
Applicable Margin for Eurocurrency Rate Loans.
(c) to the extent that all or any portion of Term Loan B bears
interest during such Interest Period at the Base Rate, Term Loan B
or such portion shall bear interest during such Interest Period at
the rate per annum equal to the Base Rate plus two and one-half of
one percent (2.50%).
(d) To the extent that all or any portion of Term Loan B bears
interest during such Interest Period at the Eurocurrency Rate, Term
Loan B or such portion shall bear interest during such Interest
Period at the rate per annum equal to the Eurocurrency Rate plus
four and one quarter of one percent (4.25%).
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Each of the Domestic Borrowers promises to pay interest on the Term
Loans or any portion thereof outstanding during each Interest Period
in arrears on each Interest Payment Date applicable to such Interest
Period."
SECTION 6. AMENDMENT TO SECTION 4 OF THE CREDIT AGREEMENT. Section 4 of
the Credit Agreement is hereby amended as follows:
(a) Section 4.1.1 of the Credit Agreement is hereby amended by (i)
deleting each reference to "Banks" contained therein and substituting in place
thereof the words "Revolving A Banks"; (ii) deleting the words "or any Optional
Currency" in the first sentence of Section 4.1.1, and (iii) deleting
subparagraph (e) in its entirety and substituting in place thereof the
following: "(e) the Revolver A Exposure shall not exceed the lesser of (i) the
Total Revolving A Commitment and (ii) the Borrowing Base less the outstanding
amount of Revolving Credit B Loans. In addition, notwithstanding anything to the
contrary contained herein, (1) if at any time the Revolver A Exposure is at the
Maximum Initial Amount, the Agent shall have no obligation to issue any
additional Letters of Credit until such time as the aggregate outstanding
principal amount of the Revolving Credit B Loans is equal to the Total Revolving
B Commitment and (2) from and after the earlier to occur of (x) the Revolving
Credit Loan B Maturity Date and (y) January 31, 2002, the Borrowers shall not
request any additional Letters of Credit if, after giving effect to such request
and without giving effect to any repayment of the Revolving Credit A Loans, the
Revolver A Exposure would exceed the Maximum Initial Amount."
(b) Section 4.1.3. of the Credit Agreement is hereby amended by deleting
the words "Revolving Credit Loan Maturity Date" contained therein and
substituting in place thereof the words "Revolving Credit Loan A Maturity Date".
(c) Section 4.1.4 of the Credit Agreement is hereby amended by (i)
deleting each reference to "Bank" contained therein and substituting in place
thereof the words "Revolving A Bank" and (ii) deleting each reference to
"Commitment Percentage" contained therein and substituting in place thereof the
words "Revolving A Commitment Percentage".
(d) Section 4.2 of the Credit Agreement is hereby amended by (i) deleting
each reference to "Bank" or "Banks" contained therein and substituting in place
thereof the word "Revolving A Bank" or "Revolving A Banks", as the case may be;
(ii) deleting each reference to "Total Commitment" contained in Section 4.2 and
substituting in place thereof the words "Total Revolving A Commitment"; and
(iii) deleting the parenthetical "(in the same currency in which such Letter of
Credit was issued or the Dollar Equivalent thereof)" from Section 4.2(a);
(e) Sections 4.3 and 4.6 of the Credit Agreement are hereby amended by (i)
deleting each reference to "Bank" or "Banks" contained therein and substituting
in place thereof the words "Revolving A Bank" or "Revolving A Banks", as the
case may be, and (ii) deleting each reference to "Commitment Percentage"
contained therein and substituting in place thereof the words "Revolving A
Commitment Percentage".
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SECTION 7. AMENDMENT TO SECTION 5 OF THE CREDIT AGREEMENT. Section 5 of
the Credit Agreement is hereby amended as follows:
(a) Section 5.3.1 of the Credit Agreement is hereby amended by deleting
all the text which immediately follows the words "Boston, Massachusetts area
that the Agent may from time to time designate, in each case in Same Day Funds"
and substitute in place thereof the words "and in Dollars";
(b) Section 5.3.3 of the Credit Agreement is hereby amended by deleting
Section 5.3.3. in its entirety and substituting in place thereof the words
"Intentionally Omitted";
(c) Section 5.4 of the Credit Agreement is hereby amended by deleting the
words "Acceptance Fees for Bankers' Acceptances" in the first sentence of
Section 5.4;
(d) Sections 5.5 and 5.6 of the Credit Agreement is hereby amended by
deleting each of Sections 5.5 and 5.6 in its entirety and restating it as
follows:
5.5. INABILITY TO DETERMINE EUROCURRENCY RATE. In the event, prior
to the commencement of any Interest Period relating to any Eurocurrency
Rate Loan, the Agent shall determine or be notified by the Majority Banks
that adequate and reasonable methods do not exist for ascertaining the
Eurocurrency Rate that would otherwise determine the rate of interest to
be applicable to any Eurocurrency Rate Loan during any Interest Period,
the Agent shall forthwith give notice of such determination (which shall
be conclusive and binding on the applicable Borrower and the Banks) to the
Borrowers and the Banks. In such event (a) any Loan Request or Conversion
Request with respect to Eurocurrency Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (b) each
Eurocurrency Rate Loan will automatically, on the last day of the then
current Interest Period relating thereto, become a Base Rate Loan, and (c)
the obligations of the Banks to make Eurocurrency Rate Loans shall be
suspended until the Agent or the Majority Banks determine that the
circumstances giving rise to such suspension no longer exist, whereupon
the Agent or, as the case may be, the Agent upon the instruction of the
Majority Banks, shall so notify the Borrower and the Banks.
5.6. ILLEGALITY. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in the
interpretation or application thereof shall make it unlawful for any Bank
to make or maintain Eurocurrency Rate Loans, such Bank shall forthwith
give notice of such circumstances to the Borrowers and the other Banks and
thereupon (a) the commitment of such Bank to make Eurocurrency Rate Loans
or convert Loans of another Type to Eurocurrency Rate Loans shall
forthwith be suspended and (b) such Bank's Revolving Credit Loans then
outstanding as Eurocurrency Rate Loans, if any, shall be converted
automatically to Base Rate
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Loans on the last day of each Interest Period applicable to such
Eurocurrency Rate Loans or within such earlier period as may be required
by law. Each Borrower hereby severally and not jointly agrees promptly to
pay the Agent for the account of such Bank, upon demand by such Bank, any
additional amounts necessary to compensate such Bank for any costs
incurred by such Bank in making any conversion in accordance with this
Section 5.6, including any interest or fees payable by such Bank to
lenders of funds obtained by it in order to make or maintain its
Eurocurrency Rate Loans hereunder.
(e) Section 5.7 of the Credit Agreement is hereby amended by (i) deleting
the words "Bankers' Acceptances" from each place in which it appears in
Section 5.7(a) and (ii) deleting the words "any Bankers' Acceptances" from each
place in which it appears in Section 5.7(d); and
(f) Section 5.12 of the Credit Agreement is hereby amended by deleting
Section 5.12 in its entirety and substituting in place thereof the words
"Intentionally Omitted".
SECTION 8. AMENDMENT TO SECTION 8 OF THE CREDIT AGREEMENT. Section 8 of
the Credit Agreement is hereby amended as follows:
(a) Section 8.4(d) of the Credit Agreement is hereby amended by deleting
the words "simultaneously with the delivery of the financial statements referred
to in subsections (a) and (b) above" and substituting in place thereof the words
"simultaneously with the delivery of the financial statements referred to in
subsections (a), (b) and (c) above";
(b) Section 8.4 of the Credit Agreement is further amended by inserting
immediately at the end of the text of Section 8.4(h) the following:
(i) within twenty (20) days at the end of each calendar month or at
such earlier time as the Agent may reasonably request, a Borrowing Base
Report setting forth the Borrowing Base as at the end of such calendar
month or other date so requested by the Agent;
(j) within twenty (20) days after the end of each calendar
month, an Accounts Receivable Aging report;
(k) by not later than Monday of each calendar week, the Company's
cash flow forecast for that week and the immediately succeeding next
12-week period;
(l) by not later than Monday of each calendar week, the Company's
one-week cash flow report for the immediately preceding week, together
with a comparison to the forecast prepared for such week; and
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(m) as soon as practicable, but in any event not later than thirty
(30) days after the end of each of the September 30, 2001 and March 31,
2002 fiscal quarters, such financial information otherwise required by
Section 8.4(b) for such fiscal quarter ends, together with a Compliance
Certificate setting forth in reasonable detail computations evidencing
compliance with the covenants contained in Section 10 hereof.
(c) Section 8.24.1 of the Credit Agreement is hereby amended by deleting
the date "May 4, 2001" which appears in the first sentence of such Section
8.24.1 and substituting in place thereof the date "May 31, 2001";
(d) Section 8 of the Credit Agreement is further amended by inserting
immediately after the end of the text of Section 8.24 the following:
8.25 AUDIT REPORT. The Company shall deliver to the Agent and the
Banks, by not later than May 11, 2001 the consolidated balance sheet of
the Company and its Subsidiaries for the fiscal year ended December 31,
2000 and the related consolidated statement of income and consolidated
statement of cash flow, prepared in accordance with generally accepted
accounting principles and certified without qualification by
PricewaterhouseCoopers LLP, together with a written statement from such
accountants to the effect that they have read a copy of this Credit
Agreement, and that, in making the examination necessary to said
certification, they have obtained no knowledge of any Default or Event of
Default as it relates to any financial covenant.
8.26 EMPLOYMENT OF OPERATIONAL CONSULTANT. The Company shall
continue to engage the services of an Operational Consultant, provided
that, after March 31, 2002, the Company may discontinue such engagement if
as of such date: (a) the Agent has received the Company's five-year
business plan approved by such Operational Consultant and which plan
demonstrates that all the financial covenants, calculated on a pro forma
basis, will be complied with when and as required by the Credit Agreement,
and (b) no Default or Event of Default occurs and is continuing.
8.27 EMPLOYMENT OF STRATEGIC ADVISOR. The Company shall, by not
later than May 31, 2001, engage the services of a strategic advisor
experienced in the area, of nationally recognized standing and not
disapproved by the Majority Banks to perform such services as are
necessary in order to enhance capital value.
8.28. PERIODIC MEETINGS. The Company shall cause to occur (a) a
meeting among the Company, Berkshire Partners, the strategic advisor
referred to in Section 8.27, the Agent and the Banks by not later than
September 30, 2001 pursuant to which the Company and such strategic
advisor will present to the Agent and the Banks a strategic option plan;
(b) a meeting by and among the Company, Berkshire Partners, the
Operational Consultant and the Banks by not later than November 1, 2001,
to review the Company's business plan and projections for the 2002 fiscal
year and to review the Company's repayment plan for the Obligations; (c)
if requested by the Agent or those Banks designated
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as a steering committee (the "Steering Committee"), one meeting in each
calendar month among the Company, Berkshire Partners, the Operational
Consultant, the Agent, the Agent's Special Counsel (if requested), the
Steering Committee and counsel to the Steering Committee (if requested) to
review the monthly financial updates and projections of the Company and
its Subsidiaries; and (d) if requested by the Agent or the Steering
Committee, one meeting per fiscal quarter (which may be by a telephonic
conference call) among the Company, Berkshire Partners, the Operational
Consultant, the Agent and the Banks (and, to the extent so requested by
the Agent or the Steering Committee, as the case may be, the Agent's
Special Counsel and counsel to the Steering Committee, as the case may be)
to provide the Agent and Banks with quarterly financial updates and
projections of the Company and its Subsidiaries.
8.29. INTEREST PAYMENTS - SUBDEBT FUNDING LOANS.
8.29.1. NOVEMBER PAYMENT. The Company agrees that as to the
regularly scheduled interest payment on the Subordinated Notes due
November 15, 2001 which the Company elects to make to the holders of such
Subordinated Notes (and so long as no Event of Default has occurred and is
continuing hereunder pursuant to which the Agent and the Banks have
delivered a Payment Blockage Notice (as such term is defined in the
Subordinated Debt Documents)), (a) to the extent the Company's EBITDA for
the nine months ended September 30, 2001 is equal to or greater than
$30,800,000 but less than $32,500,000, unless the Company funds such
payment with the proceeds of any Equity Issuance or the proceeds of any
Indebtedness which is consented to by the Majority Banks and containing
terms and conditions (including subordination provisions) acceptable to
the Majority Banks, the Company shall make a request for a Revolving
Credit B Loan in an amount equal to fifty percent (50%) of the amount of
such interest payment and use the proceeds thereof to fund fifty (50%) of
such interest payment (with the Company also being permitted, subject to
compliance with the terms and conditions of the Credit Agreement, to
request a Revolving Credit Loan in an amount of all or any portion of the
remaining 50% of such required payment) and (b) to the extent the
Company's EBITDA for such period is less than $30,800,000, unless the
Company funds such payment with the proceeds of an Equity Issuance or the
proceeds of any Indebtedness which is consented to by the Majority Banks
and containing terms and conditions (including subordination provisions)
acceptable to the Majority Banks, the Company shall make a request for a
Revolving Credit B Loan in an amount equal to one hundred percent (100%)
of the amount of such interest payment and use the proceeds thereof to
fund one hundred percent (100%) of such interest payment, and the
Revolving Credit B Banks agree, subject to compliance with the conditions
of this Credit Agreement, to make such Revolving Credit B Loans to the
Company (such Revolving Credit B Loans being hereinafter referred to as a
"November Subdebt Funding Loan"). In the event that, at time of making any
Loan Request pursuant to this Section 8.29.1, there is no availability
under the Total Revolving B Commitment but there remains availability
under the Total Revolving A Commitment, the Company shall be permitted,
subject to compliance at all times with the terms and conditions of this
Credit Agreement,
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to borrow Revolving Credit A Loans in the amount of the November Subdebt
Funding Loan in order to repay existing Revolving Credit B Loans by such
amount so as to create availability for the borrowing of such November
Subdebt Funding Loans under the Total Revolving B Commitment. The
Revolving Credit B Banks further agree that any such November Subdebt
Funding Loan (and, during an Event of Default which has occurred and is
continuing pursuant to Section 13.1(a) or (b) of the Credit Agreement as
it relates to the Revolving Credit A Loans and the Term Loans, any
interest thereon) shall be junior in right of payment to the Revolving
Credit A Loans and the Term Loans, all as more fully set forth in this
Credit Agreement. The parties hereto agree that to the extent any such
November Subdebt Funding Loans are made and the Company subsequently
delivers to the Agent and the Banks its audited financial statements
evidencing that the Company's EBITDA as of December 31, 2001 for the
immediately twelve (12) month period is equal to or greater than
$62,100,000 and, in addition, the Company delivers to the Agent and the
Banks a Compliance Certificate evidencing compliance with all the
financial covenants set forth in Section 10 for the fiscal quarter ending
March 31, 2002 and no other Event of Default has occurred and is
continuing as of March 31, 2002, the November Subdebt Funding Loans shall
no longer be considered as such, shall be considered ordinary Revolving
Credit B Loans and shall no longer be junior in right of payment as set
forth above in this Credit Agreement.
8.29.2. MAY PAYMENT. The Company agrees that as to the regularly
scheduled interest payment on the Subordinated Notes due May 15, 2002
which the Company elects to make to the holders of such Subordinated
Notes, (and so long as no Event of Default has occurred and is continuing
hereunder pursuant to which the Agent and the Banks have delivered a
Payment Blockage Notice (as such term is defined in the Subordinated Debt
Documents)), unless the Company funds such payment with the proceeds of an
Equity Issuance or the proceeds of any Indebtedness which is consented to
by the Majority Banks and containing terms and conditions (including
subordination provisions) acceptable to the Majority Banks, the Company
shall make a request for a Revolving Credit B Loan in an amount equal to
one hundred percent (100%) of the amount of such interest payment and use
the proceeds thereof to fund one hundred percent (100%) of such interest
payment, and the Revolving Credit B Banks agree, subject to compliance
with the conditions of this Credit Agreement, to make such a Revolving
Credit B Loans to the Company (such Revolving Credit B Loans being
hereinafter referred to as a "May Subdebt Funding Loan" and, collectively
with the November Subdebt Funding Loan, the "Subdebt Funding Loans"). The
Revolving Credit B Banks hereby agree that any such May Subdebt Funding
Loan (and, during an Event of Default which has occurred and is continuing
pursuant to Section 13.1(a) or (b) of the Credit Agreement as it relates
to the Revolving Credit A Loans and the Term Loans, any interest thereon)
shall be junior in right of payment to the Revolving Credit A Loans and
the Term Loans, all as more fully set forth in this Credit Agreement.
8.30 ENGAGEMENT LETTER. The Company shall, by not later than May 18,
2001, deliver to the Agent evidence satisfactory to the Agent that the
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Company and the Operational Consultant have entered into an engagement
letter detailing the services to be provided by such Operational
Consultant.
SECTION 9. AMENDMENT TO SECTION 9 OF THE CREDIT AGREEMENT. Section 9 of
the Credit Agreement is hereby amended as follows:
(a) Section 9.1(d) of the Credit Agreement is hereby amended by deleting
the number "$15,000,000" which appears in Section 9.1(d) and substituting in
place thereof the number "$500,000."
(b) Section 9.1(f)(iv) of the Credit Agreement is hereby amended by
deleting clause (iv) thereof and substituting in place thereof the following:
(iv) Indebtedness (1) of a Subsidiary of the Company which is
neither a Borrower or a Guarantor hereunder; and (2) incurred in
connection with the factoring or other discounting of certain letters of
credit in the ordinary course of business issued in favor of any
Subsidiary of the Company, provided that the aggregate principal amount of
all such Indebtedness permitted under this Section 9.1(f)(iv) shall not
exceed an amount equal to $20,000,000, and provided, further, that the
proceeds of such Indebtedness shall be used to fund the Company's
operations and working capital needs in the People's Republic of China;
(c) Section 9.1(g) of the Credit Agreement is hereby amended by deleting
the number "$5,000,000" which appears in Section 9.1(g) and substituting in
place thereof the number "$500,000."
(d) Section 9.1(i) of the Credit Agreement is hereby amended by inserting
immediately after the words "Additional Investors" the words "in an aggregate
amount not to exceed $1,100,000 in any calendar year and incurred in connection
with the Company's obtaining the Revolving Credit B Loans";
(e) Section 9.1(j) of the Credit Agreement is hereby amended by deleting
the text of Section 9.1(j) and substituting in place thereof the words
"Intentionally Omitted";
(f) Section 9.1 of the Credit Agreement is hereby further amended by
inserting immediately at the end of such Section 9.1 the following words: "; and
provided, further, that the aggregate amount of all Indebtedness incurred under
Sections 9.1(d), (g) and (h) shall not exceed, in the aggregate, $500,000
in any fiscal year."
(g) section 9.2(h) of the Credit Agreement is hereby amended by inserting
immediately at the end of 9.2(h) the words: "and liens and assets of the
Subsidiary of the Company which is neither a Borrower nor a Guarantor hereunder
to secure the Indebtedness permitted by Section 9.1(f)(iv)(1) hereof."
(h) Section 9.12 of the Credit Agreement is hereby amended by inserting
immediately after the words "Except for the GE Joint Venture" the words "and
Indebtedness owed pursuant to Section 9.1(i)".
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SECTION 10. AMENDMENT TO SECTION 10 OF THE CREDIT AGREEMENT. Section 10 of
the Credit Agreement is hereby amended by deleting Section 10 in its entirety
and restating it as follows:
10. FINANCIAL COVENANTS OF THE BORROWERS.
Each of the Borrowers covenants and agrees that, so long as any
Loan, Bankers' Acceptance, Unpaid Reimbursement Obligation, Letter of
Credit or Note or loan account is outstanding or any Bank has any
obligation to make any Loans or accept and/or purchase any Bankers'
Acceptances or the Agent has any obligation to issue, extend or renew any
Letters of Credit:
10.1. LEVERAGE RATIO. The Borrowers will not as of the end of
any fiscal quarter ending on any date described in the table set forth
below, permit the Leverage Ratio to exceed the ratio set forth opposite
such period in such table:
Period Ratio
------ -----
June 30, 2001 7.15:1.00
September 30, 2001 8.15:1.00
December 31, 2001 6.90:1.00
March 31, 2002 6.75:1.00
June 30, 2002 6.85:1.00
any fiscal quarter ending thereafter 4.50:1.00
10.2. INTEREST COVERAGE RATIO. The Borrowers will not, as of the end
of any fiscal quarter ending on any date described in the table set forth
below, permit the Interest Coverage Ratio to be less than the ratio set
forth opposite such period in such table:
Period Ratio
------ -----
June 30, 2001 1.33:1.00
September 30, 2001 1.175:1.00
December 31, 2001 1.38:1.00
March 31, 2002 1.38:1.00
June 30, 2002 1.35:1.00
any fiscal quarter ending thereafter 2.25:1.00
10.3. FIXED CHARGE COVERAGE RATIO. The Borrowers will not, as of the
end of any fiscal quarter ending on any date described in the table set
forth below, permit the Fixed Charge Coverage Ratio to be less than the
ratio set forth opposite such period in such table:
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Period Ratio
------ -----
June 30, 2001 0.70:1.00
September 30, 2001 0.535:1.00
December 31, 2001 0.70:1.00
March 31, 2002 0.70:1.00
June 30, 2002 0.70:1.00
Any fiscal quarter ending thereafter 1.00:1.00
10.4. CAPITAL EXPENDITURES. The Borrowers will not make, or permit
any Subsidiary of such Borrower to make, during any fiscal year, Capital
Expenditures (including, without limitation, any Capital Expenditures made
by the Company or any Subsidiary in connection with any joint venture
entities) that exceed, in the aggregate, $19,000,000 (of which not more
than $13,000,000 shall be attributable to Capital Expenditures made in
connection with the Company's operations in China). However, $1,000,000 of
Capital Expenditures not spent in a given year may be carried over and
added to the Capital Expenditures permitted only for the immediately
following year (after first utilizing the amount of Capital Expenditures
permitted for such fiscal year), each such carry over not to exceed one
year.
10.5. MONTHLY LEVERAGE RATIO. The Borrowers will not as of the end
of any calendar month ending on any date described in the table set forth
below, permit the Monthly Leverage Ratio to exceed the ratio set forth
opposite such period in such table for such month, provided that no Event
of Default shall occur until such time as the Borrowers have failed to
comply with the Monthly Leverage Ratio set forth below for two consecutive
calendar months:
Month Ended Ratio
----------- -----
April 30, 2001 6.95:1.00
May 31, 2001 7.15:1.00
June 30, 2001 7.15:1.00
July 31, 2001 7.20:1.00
August 31, 2001 7.45:1.00
September 30, 2001 8.15:1.00
October 31, 2001 7.65:1.00
November 30, 2001 7.10:1.00
December 31, 2001 6.90:1.00
January 31, 2002 6.85:1.00
February 28, 2002 6.85:1.00
March 31, 2002 6.75:1.00
April 30, 2002 6.80:1.00
May 31, 2002 6.85:1.00
June 30, 2002 6.85:1.00
Each month ending thereafter 4.50:1.00
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10.6. MONTHLY INTEREST COVERAGE RATIO. The Borrowers will not, as of
the end of any calendar month ending on any date described in the table
set forth below, permit the Monthly Interest Coverage Ratio to be less
than the ratio set forth opposite such period in such table, provided that
no Event of Default shall occur until such time as the Borrowers have
failed to comply with the Monthly Interest Coverage Ratio set forth below
for two consecutive calendar months:
Month Ended Ratio
----------- -----
April 30, 2001 1.40:1.00
May 31, 2001 1.35;1.00
June 30, 2001 1.33:1.00
July 31, 2001 1.35:1.00
August 31, 2001 1.25:1.00
September 30, 2001 1.175:1.00
October 31, 2001 1.25:1.00
November 30, 2001 1.35:1.00
December 31, 2001 1.38:1.00
January 31, 2002 1.35:1.00
February 28, 2002 1.35:1.00
March 31, 2002 1.38:1.00
April 30, 2002 1.35:1.00
May 31, 2002 1.35:1.00
June 30, 2002 1.35:1.00
Each month ending thereafter 2.25:1.00
10.7. MONTHLY FIXED CHARGE COVERAGE RATIO. The Borrowers will not,
as of the end of any calendar month ending on any date described in the
table set forth below, permit the Monthly Fixed Charge Coverage Ratio to
be less than the ratio set forth opposite such period in such table,
provided that no Event of Default shall occur until such time as the
Borrowers have failed to comply with the Monthly Fixed Charge Coverage
Ratio set forth below for two consecutive calendar months:
Month Ended Ratio
----------- -----
April 30, 2001 0.75:1.00
May 31, 2001 0.70:1.00
June 30, 2001 0.70:1.00
July 31, 2001 0.70:1.00
August 31, 2001 0.65:1.00
September 30, 2001 0.535:1.00
October 31, 2001 0.60:1.00
November 30, 2001 0.70:1.00
December 31, 2001 0.70:1.00
January 31, 2002 0.70:1.00
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February 28, 2002 0.70:1.00
March 31, 2002 0.70:1.00
April 30, 2002 0.70:1.00
May 31, 2002 0.70:1.00
June 30, 2002 0.70:1.00
Each month ending thereafter 1.00:1.00
SECTION 11. AMENDMENT TO SECTION 13 OF THE CREDIT AGREEMENT. Section 13 of
the Credit Agreement is hereby amended as follows:
(a) Section 13.1(c) of the Credit Agreement is hereby amended by inserting
immediately after the references to "8.15 - 8.17," a reference to "8.24 -
8.30,";
(b) Section 13.2 of the Credit Agreement is hereby amended by (i) deleting
the words "and to accept and/or purchase Bankers' Acceptances from Rival Canada"
in the first sentence thereof; (ii) deleting "the acceptance and/or purchasing
of any Bankers' Acceptances" from the second sentence thereof; and (iii)
deleting "accept and/or purchase Bankers' Acceptances" from the second sentence
thereof;
(c) Section 13.3 of the Credit Agreement is hereby amended by deleting the
words "Bankers' Acceptances" in each place in which appears in the first
sentence of Section 13.3;
(d) Section 13.5 of the Credit Agreement is hereby amended by deleting
Section 13.5 in its entirety and restating it as follows:
13.5. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that,
following the occurrence or during the continuance of any Default or Event
of Default, the Agent or any Bank, as the case may be, receives any monies
in connection with the enforcement of any the Security Documents, or
otherwise with respect to the realization upon any of the Collateral, such
monies shall be distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Agent in connection with the collection of such monies by
the Agent, for the exercise, protection or enforcement by the Agent of all
or any of the rights, remedies, powers and privileges of the Agent under
this Credit Agreement or any of the other Loan Documents or in respect of
the Collateral or in support of any provision of adequate indemnity to the
Agent against any taxes or liens which by law shall have, or may have,
priority over the rights of the Agent to such monies;
(b) Second, to all other Obligations other than the Subdebt Funding
Loans in such order or preference as to type of Obligations (such as
interest, principal, fees and expenses) as the Majority Banks may
determine; provided, however, that (i) distributions shall be made (A)
pari passu among Obligations with respect to the Agent's fee payable
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pursuant to Section 5.2 and all other Obligations and (B) with respect to
each type of Obligation owing to the Banks, such as interest, principal,
fees and expenses, among the Banks pro rata in accordance with the
principal amount of each Bank's outstanding Notes, provided, however, the
Revolving Banks hereby agree that as to the application of any amounts to
the Revolving Credit Loans, such amounts shall be applied first to repay
any Revolver A Exposure in an amount in excess of the Maximum Initial
Amount, second to repay the outstanding amount of the Revolving Credit B
Loans other than the Subdebt Funding Loans, third to repay the remaining
Revolver A Exposure;
(c) Third, to the Subdebt Funding Loans and all other
Obligations arising thereunder;
(d) Fourth, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Banks and the Agent of
all of the Obligations, to the payment of any obligations required to be
paid pursuant to Section 9-504(l)(c) of the Uniform Commercial Code of the
Commonwealth of Massachusetts; and
(e) Fifth, the excess, if any, shall be returned to the Borrowers or
to such other Persons as are entitled thereto.
(e) Section 13 of the Credit Agreement is hereby amended by inserting
immediately after the end of the text of Section 13.5 the following:
SECTION 13.6. TRUE UP.
(a) The provisions of this Section 13.6 apply in the event that the
Borrower or Rival becomes a debtor under the federal Bankruptcy Code.
(b) If, on any True Up Date, the Base Percentage of any Bank varies
from the True Up Date Risk Percentage of such Bank, the Banks, on such
True Up Date, will make such acquisitions, dispositions and other
arrangements with one another, whether by way of purchase, sale,
participation, contribution, distribution, pro tanto assumption or
assignment of claims, subrogation or otherwise, as shall result in each
Bank's True Up Date Risk Percentage being equal (as nearly as may be) to
such Bank's Base Percentage.
(c) In the event that any Specified Obligations owed to any Bank on
any True Up Date are contingent and, pursuant to Section 13.6(b), another
Bank (an "Assuming Bank") assumes all or a portion of the liability of
such Bank giving rise to such contingent Specified Obligation, the
Assuming Bank agrees to indemnify and hold the other Bank harmless from
any against any loss, cost or expense sustained or incurred by the other
Bank as a result of the failure of the Assuming Bank to satisfy that
liability.
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(d) No assignment by any Bank made pursuant to Section 19 of any of
the Specified Obligations owed to such Bank shall release such Bank from
its obligations to the other Banks under this Section 13.6.
(e) For the purposes of this Section 13.6, the following terms have
the following meanings:
(i) "Base Percentage" means, with respect to any Bank, the
percentage which the Specified Obligations owed to such Bank on May
1, 2001, bears to the Specified Obligations owed to all of the Banks
on May 1, 2001.
(ii) "Specified Obligations" means Obligations other than
Obligations comprising principal of and interest on the Revolving
Credit B Loans and that portion of the Revolving Credit A Loans
which exceed the Maximum Initial Amount. The term includes Specified
Obligations which, at the time of reference, are contingent
obligations, such as Letter of Credit Participations in
Reimbursement Obligations in respect of undrawn Letters of Credit.
(iii) "True Up Date" means (A) 180 days following the date on
which a petition is filed by or against the Borrower or Rival under
the federal Bankruptcy Code or, if earlier, the date on which any
plan of reorganization of the Borrower or Rival under Chapter 11 of
the federal Bankruptcy Code becomes effective or (B) any later date
specified by a Bank in a written notice provided to the other Banks
and the Agent not less than 30 days prior to the date specified in
such notice and falling not less than 180 days after the immediately
preceding True Up Date.
(iv) "True Up Date Risk Percentage" means, with respect to any
Bank, the percentage which the Specified Obligations owed to such
Bank on any True Up Date bears to the Specified Obligations owed to
all of the Banks on such True Up Date.
(f) The provisions of this Section 13.6 shall not be amended or
modified without obtaining the prior written consent of each Bank affected
thereby.
SECTION 12. AMENDMENT TO SECTION 14 OF THE CREDIT AGREEMENT. Section 14 of
the Credit Agreement is hereby amended by deleting each reference to "or
Bankers' Acceptances" and "any Bankers' Acceptances" in each place in which they
appear in Section 14.
SECTION 13. AMENDMENT TO SECTION 15 OF THE CREDIT AGREEMENT. Section 15 of
the Credit Agreement is hereby amended as follows:
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(a) Section 15.5.3 of the Credit Agreement is hereby amended by (i)
deleting the words "or to purchase a risk participation in any Bankers'
Acceptances" from subparagraph (a) thereof; and (ii) deleting the words
"Bankers' Acceptances" from each place in which they appear in the second and
third sentence of Section 15.5.3;
(b) Section 15.6 of the Credit Agreement is hereby amended by deleting the
words "or purchaser of any risk participation of any Bankers' Acceptance" from
Section 15.6;
(c) Section 15.7 of the Credit Agreement is hereby amended by deleting the
words "the Bankers' Acceptances," which appear in such Section 15.7; and
(d) Section 15.8 of the Credit Agreement is hereby amended by deleting the
words "Bankers' Acceptances" from Section 15.8 thereof.
SECTION 14. AMENDMENT TO SECTION 16 OF THE CREDIT AGREEMENT. Section 16.2
of the Credit Agreement is hereby amended by inserting immediately at the end of
the text of Section 16.2 the following sentence: "In addition to the foregoing,
each of the Domestic Borrowers and Guarantors hereby agree to indemnify the
Agent and its affiliates and to hold the Agent and its affiliates harmless from
and against any loss, cost or expense incurred or sustained by the Agent or such
affiliate in providing payroll and other cash management services to the Company
and its Subsidiaries. The parties hereto further hereby agree that such
indemnification obligations shall be Obligations under the Credit Agreement and
the other Loan Documents."
SECTION 15. AMENDMENT TO SECTION 18 OF THE CREDIT AGREEMENT. Section 18 of
the Credit Agreement is hereby amended by (a) deleting the words "the acceptance
and/or purchase of any Bankers' Acceptance" in each place in which such words
appear in Section 18 thereof; and (b) deleting the words "or any Bankers'
Acceptance" which appears in Section 18.
SECTION 16. AMENDMENT TO SECTION 19 OF THE CREDIT AGREEMENT. Section 19 of
the Credit Agreement is hereby amended as follows:
(a) Section 19.1 of the Credit Agreement is hereby amended by deleting the
text of the first sentence of Section 19.1 up to the words "provided that (a)"
and substituting in place thereof the words "Except as provided herein and
subject to Section 13.6 hereof, each Bank may assign to one or, more Eligible
Assignees all or a portion of its interests, rights and obligations under this
Credit Agreement (including all or a portion of its Revolving Credit A
Commitment Percentage, Revolving Credit B Commitment Percentage, Revolving
Credit A Commitment, Revolving Credit B Commitment, Term Loan A Commitment and
Term Loan B Commitment and the same portion of the Loans at the time owing to
it, the Notes held by it and its participating interest in the risk relating to
any Letters of Credit );";
(b) Section 19.7 of the Credit Agreement is hereby amended by deleting the
words "Bankers' Acceptances" in each place in which they appear in Section 19.7
48
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SECTION 17. AMENDMENT TO THE CREDIT AGREEMENT. The Credit Agreement is
hereby amended by deleting each reference to "BankBoston, N.A." and "BKB"
contained therein and substituting in place thereof a reference to "Fleet
National Bank (f/k/a BankBoston, N.A.)" and "Fleet".
SECTION 18. AMENDMENT TO SCHEDULE 1. Schedule 1 to the Credit Agreement is
hereby amended by deleting Schedule 1 in its entirety and substituting in place
thereof the Schedule 1 attached hereto.
SECTION 19. LIMITED WAIVER. The Company has informed the Agent and the
Banks that the Company has not been in compliance with the financial covenants
contained in Sections 10.1 and 10.3 of the Credit Agreement from December 31,
2000 through and including the date hereof and, in addition, did not comply with
the financial covenant contained in Section 10.2 of the Credit Agreement for the
fiscal quarters ended December 31, 2000 and March 31, 2001. The Company has also
not complied with the covenant contained in Section 8.24.1 of the Credit
Agreement. In addition, the Company has not delivered its audited financial
statements for the fiscal year ended December 31, 2000 in the time required by
Section 8.4(a) and the Compliance Certificate for such reporting period as set
forth in Section 8.4(c) of the Credit Agreement and as a result the Company is
in default of such covenants and is in default under the Subordinated Debt
Documents as a result of its failure to deliver such financial information as
required thereunder. The Company has requested that the Banks waive, to the
limited extent necessary to permit such noncompliance for the period of December
31, 2000 through the date hereof, the provisions of Sections 10.1 and 10.3 of
the Credit Agreement and, in addition, waive, to the limited extent necessary to
permit such noncompliance for the fiscal quarters ended December 31, 2000 and
March 31, 2001, the provisions of Section 10.2 of the Credit Agreement. The
Company has also requested that the Banks waive, to the limited extent necessary
to permit the noncompliance with Section 8.24.1, the delivery date requirement
contained therein. In addition, the Company has also requested that the Banks
waive, to the limited extent necessary to permit such noncompliance with the
delivery requirements set forth in Section 8.4(a) and (c) of the Credit
Agreement, the provisions of Section 8.4(a) and (c) as it relates to the
December 31, 2000 audited financial statements and the Compliance Certificate
related thereto as well as any Default or Event of Default that may exist as a
result of the corresponding default under the Subordinated Debt Documents.
Subject always to compliance by the Company and its Subsidiaries with the terms
and provisions of the Credit Agreement (as amended hereby) and the other Loan
Documents and the terms and conditions contained herein, on the Effective Date
(as defined in Section 20 hereof) the Banks hereby waive, such waiver being
retroactive to the first date on which any such Event of Default occurred under
the Credit Agreement, the provisions of (a) Section 10.1 and Section 10.3 of the
Credit Agreement solely to the extent necessary to permit the above-referenced
noncompliance, and only with respect to the determination of compliance for the
period of December 31, 2000 through the date hereof; (b) Section 10.2 of the
Credit Agreement solely to the extent necessary to permit the above-referenced
noncompliance, and only with respect to the determination of compliance for the
fiscal quarters ended December 31, 2000 and March 31, 2001; (c) Section 8.24.1
of the Credit Agreement solely to the extent necessary to permit the
above-referenced compliance, and only with respect to the May 4, 2001 delivery
requirement (provided nothing contained herein shall be construed as any waiver
to the new delivery requirement
49
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contained in Section 8.24.1 by virtue of this Amendment); (d) Sections 8.4(a)
and (c) of the Credit Agreement solely to the extent necessary to permit the
above-referenced noncompliance, only with respect to the fiscal year ended
December 31, 2000 and only so long as the Company agrees to deliver to the Agent
and the Banks each of the financial statements required by Section 8.4(a) for
the fiscal year ended December 31, 2000 and the accompanying Compliance
Certificate by not later than May 11, 2001; and (e) any Event of Default which
may exist as a result of the occurrence of a default under the Subordinated Debt
Documents arising solely as a result of the Company's failure to deliver the
financial information described above, but solely to the extent that each and
every default under the Subordinated Debt Documents is able to be cured by the
express terms of such documents, and the Company cures each such default within
such cure period and in any event by not later than May 15, 2001. Any failure by
the Company to comply with the delivery requirement in the immediately preceding
subparagraph (d) or the cure requirement set forth in the immediately preceding
subparagraph (e) shall constitute an immediate Event of Default under the Credit
Agreement.
SECTION 20. PAYMENT OF FEE. The Company hereby promises to pay to each
Bank (other than the Revolving B Bank) which consents to this Fourth Amendment
on or before 5:00 p.m. on the Effective Date, in consideration of each such Bank
entering into this Fourth Amendment, an amendment fee consisting of the
following:
(a) a cash amount equal to 35 basis points on such consenting Bank's
Revolving A Commitment plus the outstanding amount of such consenting Bank's
Term Loans as of such date, which fee shall be earned as of the Effective Date
and shall be payable as follows: (i) on the Effective Date (or if the Fourth
Amendment does not become effective until 5:00 p.m. on such day, the next day),
each such consenting Bank shall receive 25 of the 35 basis point fee earned by
such Bank; and (ii) the remaining portion shall be due and payable on the
earlier to occur of (1) December 31, 2001, (2) payment in full in cash of all
the Obligations and a reduction of the Total Revolving A Commitment to zero; or
(3) an acceleration of the Obligations (whether automatic or otherwise) pursuant
to Section 13.1 of the Credit Agreement; and
(b) an amount equal to 50 basis points on such consenting Bank's Revolving
A Commitment plus the outstanding amount of such consenting Bank's Term Loans as
of such date, which fee shall be earned as of the Effective Date and such fee
shall be capitalized, and the payment of such fee shall be deferred, with
interest, calculated at the Base Rate plus 2.50% per annum, owing on such
amounts being paid in kind during the deferral period, with such fee becoming
due and payable on the earlier to occur of (1) February 5, 2005, (2) a sale of
all or substantially all of the assets and/or capital stock of the Company or
(3) an acceleration of the Obligations (whether automatic or otherwise) pursuant
to Section 13.1 of the Credit Agreement. If, on or prior to April 30, 2002,
either the Obligations have been repaid in full in cash and the Total Revolving
A Commitment has been reduced to zero or the Borrowers, the Agent and the Banks
have entered into an amendment to the Credit Agreement amending the financial
covenants contained in Section 10 of the Credit Agreement for all periods after
June 30, 2002, that portion of the amendment fee set forth in this paragraph (b)
shall be forgiven on such date.
50
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SECTION 21. CONDITIONS TO EFFECTIVENESS. This Fourth Amendment shall
become effective upon satisfaction of the following conditions on or prior to
May 7, 2001 (the "Effective Date"):
(a) receipt by the Agent of a counterpart of this Fourth Amendment,
executed by the Borrowers, each Guarantor and the required Banks;
(b) receipt by the Agent of a Borrowing Base Report and accounts
receivable aging report as of March 31, 2001;
(c) receipt by the Agent for each the Revolving A Banks and the Revolving
B Banks, duly executed Revolving Credit A Notes and Revolving Credit B Notes, as
the case may be (with each Revolving A Bank returning its original Revolving
Credit Note to the Company);
(d) receipt by the Agent of the Warrants and the Warrant Purchase
Agreement, in form and substance satisfactory to the Agent, executed by the
Company for each Bank receiving such Warrants;
(e) evidence satisfactory to the Agent that all necessary corporate or
other similar action has been taken by the Company and its Subsidiaries to
authorize the transaction contemplated hereby;
(f) evidence satisfactory to the Agent that all conditions required by the
Revolving B Banks to accede to this Credit Agreement have been satisfied and all
conditions to closing set forth by the Revolving B Banks have been satisfied;
(g) receipt by the Agent of a legal opinion from counsel to the Company,
which shall be in form and substance satisfactory to the Agent;
(h) receipt by the Agent of payment in cash of the amendment fee required
by Section 20 above;
(i) the Borrowers shall have paid to the Agent for the account of the
Agent's Special Counsel all outstanding bills for legal fees and expenses
through April 30, 2001 and, in addition, shall have paid to the Agent, for the
account of Kaye Scholer LLP, as counsel to the Banks, all outstanding bills for
legal fees and expenses though April 30, 2001; and
(j) evidence satisfactory to the Agent that all bills received for fees
and expenses of the Operational Consultant, Carl Marks Consulting Group and any
other consultants and/or examiners through April 30, 2001 shall have been paid
by the Company.
SECTION 22. REPRESENTATIONS AND WARRANTIES. Each of the Borrowers hereby
repeats, on and as of the date hereof, each of the representations and
warranties made by it in Section 7 of the Credit Agreement (except to the extent
of changes resulting from transactions contemplated or permitted by the Credit
Agreement and the other Loan Documents and changes occurring in the ordinary
course of business that singly or in
51
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the aggregate are not materially adverse to the Company and its Subsidiaries
taken as a whole, and to the extent that such representations and warranties
relate expressly to an earlier date), provided, that all references therein to
the Credit Agreement shall refer to such Credit Agreement as amended hereby. In
addition, each of the Borrowers hereby represents and warrants that the
execution and delivery by each Borrower of this Fourth Amendment and the
performance by each Borrower of all of their agreements and obligations under
the Credit Agreement as amended hereby are within the corporate authority of
each Borrower and have been duly authorized by all necessary corporate action on
the part of each Borrower.
SECTION 23. RATIFICATION, ETC. Except as expressly amended hereby, the
Credit Agreement and all documents, instruments and agreements related thereto
or delivered thereunder, including, but not limited to the Security Documents,
are hereby ratified and confirmed in all respects and shall continue in full
force and effect. The Credit Agreement and this Fourth Amendment shall be read
and construed as a single agreement. All references to the Credit Agreement in
the Credit Agreement or any Loan Document shall hereafter refer to the Credit
Agreement as amended hereby.
SECTION 24. NO WAIVER. Nothing contained herein shall constitute a waiver
of, impair or otherwise affect any Obligations, any other obligation of the
Borrowers or any rights of the Agent, the Documentation Agent or the Banks
consequent thereon.
SECTION 25. COUNTERPARTS. This Fourth Amendment may be executed in one or
more counterparts, each of which shall be deemed an original but which together
shall constitute one and the same instrument.
SECTION 26. GOVERNING LAW. THIS FOURTH AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
(WITHOUT REFERENCE TO CONFLICT OF LAWS).
SECTION 27. EXPENSES. The Borrowers agree to pay to the Agent (a) on
demand by the Agent, an amount equal to any and all reasonable out-of-pocket
costs or expenses (including reasonable legal fees and disbursements of Bingham
Dana LLP and other counsel to the Agent, reasonable fees and expenses of
in-house counsel to the Agent, reasonable legal fees and disbursements of Kaye
Scholer LLP as counsel to the Banks, consulting, accounting, appraisal,
investment banking and similar professional fees and charges) incurred or
sustained by the Agent and the Banks in connection with the negotiation and
preparation of this Fourth Amendment and all related matters and (b) from time
to time any and all reasonable out-of-pocket costs, expenses (including legal
fees and disbursements, consulting, accounting, appraisal, investment banking
and similar professional fees and charges) hereafter incurred or sustained by
the Agent in connection with the administration of credit extended by the Agent
and the Banks to the Borrowers or the preservation of or enforcement of the
Agent's and the Banks' rights under the Loan Documents or in respect of the
Borrowers' or any of their Subsidiaries' other obligations to the Agent and the
Banks. On the Effective Date, this Section 27 shall supercede Section 8
contained in the Forbearance Agreement and Third Amendment dated as of April 13,
2001 (the "Forbearance Agreement").
52
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SECTION 28. NO CLAIMS. Each of the Borrowers and the Guarantors hereby
acknowledge and agree that (a) neither the Borrowers nor any of their
Subsidiaries has any claim or cause of action against any of the Banks or the
Agent (or any of their directors, officers, employees, agents or Affiliates)
arising on or prior to the date hereof from any transactions under this Fourth
Amendment, under the Credit Agreement or any of the other Loan Documents; (b)
neither the Borrowers nor any of their Subsidiaries has offset rights,
counterclaims or defenses of any kind against any of their Obligations,
indebtedness or liabilities to the Agent or the Banks; and (c) each of the Banks
and the Agent has heretofore properly performed and satisfied in a timely manner
all of its obligations to the Borrowers and their Subsidiaries. The Agent and
the Banks wish (and each Borrower and Guarantor agrees) to eliminate any
possibility that any past conditions, acts, omissions, events, circumstances or
matters would impair or otherwise adversely affect any of the rights, interests,
contracts, collateral security or remedies of the Agent and the Banks.
Therefore, the Borrowers and each of their Subsidiaries unconditionally
releases, waives and forever discharges (i) any and all liabilities,
obligations, duties, promises or indebtedness of any kind of any of the Banks
and the Agent to the Borrowers and each of their Subsidiaries, except the
obligations to be performed by the Banks or the Agent for the Borrowers
hereafter as expressly stated in this Fourth Amendment and the other Loan
Documents, and (ii) all claims, offsets, causes of action, suits or defenses of
any kind whatsoever (if any), whether known or unknown, which the Borrowers or
any Subsidiary might otherwise have against any of the Banks or the Agent or any
of their directors, officers, employees, agents or Affiliates with respect to
the obligations performed or to be performed by the Agent or any Bank for the
Borrowers as set forth in the Loan Documents, in either case (i) or (ii) above,
on account of any condition, act, omission, event, contract, liability,
obligation, indebtedness, claim, cause of action, defense, circumstance or
matter of any kind whatsoever which existed, arose or occurred at any time prior
to the date hereof. On the Effective Date, this Section 28 shall supercede
Section 10 of the Forbearance Agreement.
SECTION 29. WAIVER OF JURY TRIAL. EACH OF THE BORROWERS AND THEIR
SUBSIDIARIES HEREBY WAIVES ANY RIGHTS THAT IT MAY HAVE TO A JURY TRIAL WITH
RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS FOURTH AMENDMENT OR ANY OF THE LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS
HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.
Except as prohibited by law, each of the Borrowers and their Subsidiaries hereby
waives any right that it may have to claim or recover in any litigation referred
to in the preceding sentence any special, exemplary, punitive or consequential
damages or any damages other than, or in addition to, actual damages. Each of
the Borrowers and their Subsidiaries hereby (a) certifies that no
representative, agent or attorney of the Agent or any Bank has represented,
expressly or otherwise, that the Agent or any Bank would not, in the event of
litigation, seek to enforce the foregoing waivers and (ii) acknowledges that it
has been induced to enter into this Fourth Amendment by, among other things, the
waivers and certifications herein.
53
IN WITNESS WHEREOF, the parties hereto have executed this Fourth Amendment
as a document under seal as of the date first above written.
THE HOLMES GROUP, INC.
By:___________________________________
Title:
THE RIVAL COMPANY
By:___________________________________
Title:
HOLMES PRODUCTS (FAR EAST) LIMITED
By:___________________________________
Title:
ESTEEM INDUSTRIES LIMITED
By:___________________________________
Title:
RAIDER MOTOR CORPORATION
By:___________________________________
Title:
BIONAIRE INTERNATIONAL B.V.
By:___________________________________
Title:
HOLMES PRODUCTS (EUROPE) LIMITED
By:___________________________________
Title:
PATTON ELECTRIC (HONG KONG) LTD.
54
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By:___________________________________
Title:
THE HOLMES GROUP OF CANADA LTD.
By:___________________________________
Title:
55
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THE BANKS
FLEET NATIONAL BANK (F/K/A BANKBOSTON, N.A.)
By:___________________________________
Title:
SYNDICATED LOAN FUNDING TRUST
BY: LEHMAN COMMERCIAL PAPER INC., NOT IN ITS
INDIVIDUAL CAPACITY, BUT SOLELY AS ASSET
MANAGER
By:___________________________________
Title:
HELLER FINANCIAL, INC.
By:___________________________________
Title:
LASALLE BANK NATIONAL ASSOCIATION
By:___________________________________
Title:
COMERICA BANK
By:___________________________________
Title:
KEY CORPORATE CAPITAL INC.
By:___________________________________
Title:
CITIZENS BANK OF MASSACHUSETTS, A
MASSACHUSETTS BANK
56
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By:___________________________________
Title:
STAR BANK, NATIONAL ASSOCIATION
By:___________________________________
Title:
ANTARES CAPITAL CORPORATION
By:___________________________________
Title:
NATIONAL CITY BANK
By:___________________________________
Title:
THE PROVIDENT BANK
By:___________________________________
Title:
FRANKLIN FLOATING RATE TRUST
By:___________________________________
Title:
THE TRAVELERS INSURANCE COMPANY
By:___________________________________
Title:
TRAVELERS CORPORATE LOAN FUND INC.
BY: TRAVELERS ASSET MANAGEMENT
INTERNATIONAL COMPANY LLC
57
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By:___________________________________
Title:
MERRILL LYNCH SENIOR FLOATING RATE FUND,
INC.
By:___________________________________
Title:
MAGNETITE ASSET INVESTORS LLC
By:___________________________________
Title:
MERRILL LYNCH PRIME RATE PORTFOLIO
By:___________________________________
Title:
58
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PILGRIM PRIME RATE TRUST
By:___________________________________
Title:
PILGRIM AMERICA HIGH INCOME INVESTMENTS LTD.
By:___________________________________
Title:
SEQUILS-PILGRIM I, LTD.
By:___________________________________
Title:
CAPTIVA IV FINANCE LTD.
AS ADVISED BY PACIFIC INVESTMENT MANAGEMENT
COMPANY LLC
By:___________________________________
Title:
PILGRIM CLO 1999 - 1 LTD.
By:___________________________________
Title:
GREAT POINT CLO 1999 - 1 LTD.
By:___________________________________
Title:
FIRST MASSACHUSETTS BANK
By:___________________________________
Title:
59
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SUMMIT BANK
By:___________________________________
Title:
TRANSAMERICA BUSINESS CREDIT CORPORATION
By:___________________________________
Title:
CHASE MANHATTAN BANK NOT IN ITS INDIVIDUAL
CAPACITY, BUT SOLELY AS TRUSTEE OF ANTARES
FUNDING TRUST UNDER THE TRUST AGREEMENT
DATED AS OF NOVEMBER 30, 1999 (THE "TRUST
AGREEMENT") BETWEEN ANTARES FUNDING, L.P.
(THE "DEPOSITOR") AND CHASE MANHATTAN BANK
AS TRUSTEE (THE "TRUSTEE")
By:___________________________________
Title:
VAN KAMPEN SENIOR INCOME TRUST
By:___________________________________
Title:
VAN KAMPEN PRIME RATE INCOME TRUST
By:___________________________________
Title:
60
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RATIFICATION OF GUARANTY
Each of the undersigned guarantors hereby acknowledges and consents to the
foregoing Fourth Amendment as of May 7, 2001, and agrees that the Amended and
Restated Guaranty dated as of February 5, 1999 from each of Holmes Manufacturing
Corp., Holmes Air (Taiwan) Corp., Holmes Motor Corporation, Patton Electric
Company, Inc., Patton Building Products Inc. and Rival Consumer Sales
Corporation (collectively, the "Guarantors") in favor of the Agent for the
benefit of the Agent and the Revolving Banks and all other Loan Documents to
which each of the Guarantors are a party remain in full force and effect, and
each of the Guarantors confirms and ratifies all of its obligations thereunder.
HOLMES MANUFACTURING CORP.
By:___________________________________
Title:
HOLMES AIR (TAIWAN) CORP.
By:___________________________________
Title:
HOLMES MOTOR CORPORATION
By:___________________________________
Title:
RIVAL CONSUMER SALES CORPORATION
By:___________________________________
Title:
61
Exhibit C-1
EBITDA
MONTH ENDED EBITDA
------------------------------------------
April 30, 2000 $ 3,824,000
May 31, 2000 $ 2,130,000
June 30, 2000 $ 3,014,000
July 31, 2000 $ 2,595,000
August 31, 2000 $ 5,866,000
September 30, 2000 $10,379,000
October 31, 2000 $ 7,040,000
November 30, 2000 $ 7,635,000
December 31, 2000 $ 1,243,000
January 31, 2001 $ 2,565,000
February 28, 2001 $ 2,145,000
CONSOLIDATED CASH INTEREST EXPENSE
MONTH ENDED CONSOLIDATED CASH
INTEREST EXPENSE
------------------------------------------
April 30, 2000 $2,613,000
May 31, 2000 $2,666,000
June 30, 2000 $2,859,000
July 31, 2000 $2,937,000
August 31, 2000 $3,005,000
September 30, 2000 $2,943,000
October 31, 2000 $3,178,000
November 30, 2000 $3,148,000
December 31, 2000 $3,066,000
January 31, 2001 $3,049,000
February 28, 2001 $2,682,000
CAPITAL EXPENDITURES
MONTH ENDED CAPITAL
EXPENDITURES
------------------------------------------
April 30, 2000 $1,818,600
May 31, 2000 $1,281,450
June 30, 2000 $1,263,000
July 31, 2000 $1,208,700
August 31, 2000 $5,376,050
62
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September 30, 2000 $ 915,450
October 31, 2000 $2,063,650
November 30, 2000 $1,935,250
December 31, 2000 $4,149,450
January 31, 2001 $2,842,000
February 28, 2001 $1,533,000