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Exhibit 10.1.1
________________________________________________________________________________
$100,000,000
CREDIT AGREEMENT
AMONG
HOME PRODUCTS INTERNATIONAL, INC.,
AS BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
AND
THE CHASE MANHATTAN BANK,
AS ADMINISTRATIVE AGENT
DATED AS OF MAY 14, 1998
____________________________
CHASE SECURITIES INC.,
AS ARRANGER
(LOGO)
________________________________________________________________________________
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS................................................... 1
1.1 Defined Terms................................................... 1
1.2 Other Definitional Provisions................................... 19
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS............................... 19
2.1 Revolving Commitments........................................... 19
2.2 Procedure for Revolving Loan Borrowing.......................... 20
2.3 Swingline Commitment............................................ 20
2.4 Procedure for Swingline Borrowing; Refunding of Swingline Loans. 21
2.5 Commitment Fees, etc............................................ 22
2.6 Termination or Reduction of Revolving Commitments............... 23
2.7 Optional Prepayments............................................ 23
2.8 Mandatory Prepayments and Commitments Reductions................ 23
2.9 Conversion and Continuation Options............................. 24
2.10 Limitations on Eurodollar Tranches............................. 24
2.11 Interest Rates and Payment Dates............................... 25
2.12 Computation of Interest and Fees............................... 25
2.13 Inability to Determine Interest Rate........................... 26
2.14 Pro Rata Treatment and Payments................................ 26
2.15 Requirements of Law............................................ 27
2.16 Taxes.......................................................... 29
2.17 Indemnity...................................................... 30
2.18 Change of Lending Office....................................... 31
2.19 Replacement of Lenders......................................... 31
2.20 Reporting Requirements of Issuing Lenders...................... 31
SECTION 3. LETTERS OF CREDIT............................................. 31
3.1 L/C Commitment.................................................. 31
3.2 Procedure for Issuance of Letter of Credit...................... 32
3.3 Fees and Other Charges.......................................... 32
3.4 L/C Participations.............................................. 33
3.5 Reimbursement Obligation of the Borrower........................ 34
3.6 Obligations Absolute............................................ 34
3.7 Letter of Credit Payments....................................... 34
3.8 Applications.................................................... 35
SECTION 4. REPRESENTATIONS AND WARRANTIES................................ 35
4.1 Financial Condition............................................. 35
4.2 No Change....................................................... 36
4.3 Corporate Existence; Compliance with Law........................ 36
4.4 Corporate Power; Authorization; Enforceable Obligations......... 36
4.5 No Legal Bar.................................................... 36
4.6 Litigation...................................................... 37
4.7 No Default...................................................... 37
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4.8 Ownership of Property; Liens..................................... 37
4.9 Intellectual Property............................................ 37
4.10 Taxes............................................................ 37
4.11 Federal Regulations.............................................. 37
4.12 Labor Matters.................................................... 38
4.13 ERISA............................................................ 38
4.14 Investment Company Act; Other Regulations........................ 38
4.15 Subsidiaries..................................................... 38
4.16 Use of Proceeds.................................................. 38
4.17 Environmental Matters............................................ 39
4.18 Accuracy of Information, etc..................................... 39
4.19 Security Documents............................................... 40
4.20 Solvency......................................................... 40
4.21 Senior Indebtedness.............................................. 40
4.22 Year 2000 Matters................................................ 41
4.23 Regulation H..................................................... 41
SECTION 5. CONDITIONS PRECEDENT............................................ 41
5.1 Conditions to Initial Extension of Credit........................ 41
5.2 Conditioins to Each Extension of Credit.......................... 45
SECTION 6. AFFIRMATIVE COVENANTS........................................... 45
6.1 Financial Statements............................................. 45
6.2 Certificates; Other Information.................................. 46
6.3 Payment of Obligations........................................... 47
6.4 Maintenance of Existence; Compliance............................. 47
6.5 Maintenance of Property, Insurance............................... 48
6.6 Inspection of Property; Books and Records; Discussions........... 48
6.7 Notices.......................................................... 48
6.8 Environmental Laws............................................... 49
6.9 Additional Collateral, etc....................................... 49
SECTION 7. NEGATIVE COVENANTS.............................................. 51
7.1 Financial Condition Covenants.................................... 51
7.2 Indebtedness..................................................... 52
7.3 Liens............................................................ 53
7.4 Fundamental Changes.............................................. 55
7.5 Disposition of Property.......................................... 55
7.6 Restricted Payments.............................................. 55
7.7 Capital Expenditures............................................. 56
7.8 Investments...................................................... 56
7.9 Optional Payments and Modifications of Debt Instruments etc...... 57
7.10 Transactions with Affiliates..................................... 58
7.11 Changes in Fiscal Periods........................................ 58
7.12 Negative Pledge Clauses.......................................... 58
7.13 Clauses Restricting Subsidiary Distributions..................... 58
7.14 Lines of Business................................................ 58
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SECTION 8. EVENTS OF DEFAULT............................................ 59
SECTION 9. THE ADMINISTRATIVE AGENT..................................... 62
9.1 Appointment.................................................. 62
9.2 Delegation of Duties......................................... 62
9.3 Exculpatory Provisions....................................... 62
9.4 Reliance by Administrative Agent............................. 63
9.5 Notice of Default............................................ 63
9.6 Non-Reliance on Administrative Agent and Other Lenders....... 64
9.7 Indemnification.............................................. 64
9.8 Administrative Agent in Its Individual Capacity.............. 65
9.9 Successor Administrative Agent............................... 65
9.10 Authorization to Release Liens............................... 65
SECTION 10. MISCELLANEOUS............................................... 65
10.1 Amendments and Waivers...................................... 65
10.2 Notices..................................................... 66
10.3 No Waiver; Cumulative Remedies.............................. 67
10.4 Survival of Representations and Warranties.................. 68
10.5 Payment of Expenses and Taxes............................... 68
10.6 Successors and Assigns; Participations and Assignments...... 69
10.7 Adjustments; Set-off........................................ 71
10.8 Counterparts................................................ 71
10.9 Severability................................................ 71
10.10 Integration................................................. 72
10.11 GOVERNING LAW............................................... 72
10.12 Submission To Jurisdiction; Waivers......................... 72
10.13 Acknowledgements............................................ 72
10.14 WAIVERS OF JURY TRIAL....................................... 73
10.15 Confidentiality............................................. 73
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TABLE OF CONTENTS
ANNEX:
A Pricing Grid
SCHEDULES:
1.1A Revolving Commitments
1.1B Mortgaged Property
3.1 Existing Letters of Credit
4.1(b) Contingent Liabilities
4.4 Consents, Authorizations, Filings and Notices
4.6 Litigation
4.13 ERISA Matters
4.15 Subsidiaries
4.17 Environmental Matters
4.19(a) UCC Filing Jurisdictions
4.19(b) Mortgage Filing Jurisdictions
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
7.5 Planned Dispositions
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Mortgage
E Form of Assignment and Acceptance
F Form of Legal Opinion of Sonnenschein Nath & Rosenthal
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CREDIT AGREEMENT, dated as of May 14, 1998, among HOME PRODUCTS
INTERNATIONAL, INC., a Delaware corporation (the "Borrower"), the several banks
and other financial institutions or entities from time to time parties to this
Agreement (the "Lenders"), and THE CHASE MANHATTAN BANK, as administrative
agent.
The parties hereto hereby agree as follows:
1. DEFINITIONS
1. Defined Terms. As used in this Agreement, the terms listed in this
Section 1.1 shall have the respective meanings set forth in this Section 1.1.
"ABR": for any day, a rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate in effect on
such day, (b) the Base CD Rate in effect on such day plus 1% and (c) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. For
purposes hereof: "Prime Rate" shall mean the rate of interest per annum
publicly announced from time to time by the Reference Lender as its prime rate
in effect at its principal office in New York City (the Prime Rate not being
intended to be the lowest rate of interest charged by the Reference Lender in
connection with extensions of credit to debtors); "Base CD Rate" shall mean the
sum of (a) the product of (i) the Three-Month Secondary CD Rate and (ii) a
fraction, the numerator of which is one and the denominator of which is one
minus the C/D Reserve Percentage and (b) the C/D Assessment Rate; and
"Three-Month Secondary CD Rate" shall mean, for any day, the secondary market
rate for three-month certificates of deposit reported as being in effect on
such day (or, if such day shall not be a Business Day, the next preceding
Business Day) by the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current practices
of the Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day), or, if such rate shall not be so reported
on such day or such next preceding Business Day, the average of the secondary
market quotations for three-month certificates of deposit of major money center
banks in New York City received at approximately 10:00 A.M., New York City
time, on such day (or, if such day shall not be a Business Day, on the next
preceding Business Day) by the Reference Lender from three New York City
negotiable certificate of deposit dealers of recognized standing selected by
it. Any change in the ABR due to a change in the Prime Rate, the Three-Month
Secondary CD Rate or the Federal Funds Effective Rate shall be effective as of
the opening of business on the effective day of such change in the Prime Rate,
the Three-Month Secondary CD Rate or the Federal Funds Effective Rate,
respectively.
"ABR Loans": Loans the rate of interest applicable to which is based upon
the ABR.
"Acquisition": any acquisition, whether in a single transaction or series
of related transactions, by the Borrower or any one or more of its Subsidiaries
of (a) all or a substantial majority of the assets, or of a business, unit or
division, of any Person, whether through purchase of assets or securities, by
merger or otherwise; (b) any Person that becomes a Subsidiary after
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giving effect to such acquisition; or (c) control (as defined in clause (b) of
the definition of "Affiliate") of a partnership, joint venture or other Person.
"Adjustment Date": as defined in the Pricing Grid.
"Administrative Agent": The Chase Manhattan Bank, together with its
affiliates, as the arranger of the Revolving Commitments and as the
administrative agent for the Lenders under this Agreement and the other Loan
Documents, together with any of its successors.
"Affiliate": as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person
means the power, directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"Aggregate Exposure": with respect to any Lender at any time, an amount
equal to such Lender's Revolving Commitment then in effect or, if the Revolving
Commitments have been terminated, the amount of such Lender's Revolving
Extensions of Credit then outstanding.
"Aggregate Exposure Percentage": with respect to any Lender at any time,
the ratio (expressed as a percentage) of such Lender's Aggregate Exposure at
such time to the Aggregate Exposure of all Lenders at such time.
"Agreement": this Credit Agreement, as amended, supplemented or otherwise
modified from time to time.
"Applicable Margin": for each Type of Loan, the rate per annum set forth
under the relevant column heading below:
ABR Loans Eurodollar Loans
--------- ----------------
Revolving Loans 0.75% 1.75%
Swingline Loans 0.75% Not applicable
; provided, that on and after the first Adjustment Date occurring after the
Closing Date, the Applicable Margin with respect to Revolving Loans and
Swingline Loans will be determined pursuant to the Pricing Grid.
"Application": an application, in such form as the applicable Issuing
Lender may specify from time to time, requesting the Issuing Lender to open a
Letter of Credit.
"Asset Sale": any Disposition of property or series of related
Dispositions of property (excluding any such Disposition permitted by clause
(a), (b), (c) or (d) of Section 7.5) that yields gross proceeds to the Borrower
or any of its Subsidiaries (valued at the initial
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principal amount thereof in the case of non-cash proceeds consisting of notes
or other debt securities and valued at fair market value in the case of other
non-cash proceeds) in excess of $250,000.
"Assignee": as defined in Section 10.6(c).
"Assignor": as defined in Section 10.6(c).
"Available Revolving Commitment": as to any Lender at any time, an amount
equal to the excess, if any, of (a) such Lender's Revolving Commitment over (b)
such Lender's Revolving Extensions of Credit; provided, that in calculating any
Lender's Revolving Extensions of Credit for the purpose of determining such
Lender's Available Revolving Commitment pursuant to Section 2.5(a), the
aggregate principal amount of Swingline Loans then outstanding shall be deemed
to be zero.
"Board": the Board of Governors of the Federal Reserve System of the
United States (or any successor).
"Borrowing Date": any Business Day specified by the Borrower as a date on
which the Borrower requests the relevant Lenders to make Loans hereunder.
"Business": as defined in Section 4.17.
"Business Day": a day other than a Saturday, Sunday or other day on which
commercial banks in New York City or Chicago, Illinois are authorized or
required by law to close, provided, that with respect to notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Loans, such day is also a day for trading by and between banks in
Dollar deposits in the interbank eurodollar market.
"Capital Expenditures": for any period, with respect to any Person, the
aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs and
improvements during such period) that are required to be capitalized under GAAP
on a consolidated balance sheet of such Person and its Subsidiaries.
"Capital Lease Obligations": as to any Person, the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination
thereof, which obligations are required to be classified and accounted for as
capital leases on a balance sheet of such Person under GAAP and, for the
purposes of this Agreement, the amount of such obligations at any time shall be
the capitalized amount thereof at such time determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests
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in a Person (other than a corporation) and any and all warrants, rights or
options to purchase any of the foregoing.
"Cash Equivalents": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of one year or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States of America or any state thereof having combined
capital and surplus of not less than $500,000,000; (c) commercial paper of an
issuer rated at least A-1 by Standard & Poor's Ratings Group ("S&P") or P-1 by
Moody's Investors Service, Inc. ("Moody's"), or carrying an equivalent rating
by a nationally recognized rating agency, if both of the two named rating
agencies cease publishing ratings of commercial paper issuers generally, and
maturing within one year from the date of acquisition; and (d) securities with
maturities of one year or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States or by
any political subdivision or taxing authority of any such state, commonwealth
or territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) carry the highest possible rating from S&P or
Moody's.
"C/D Assessment Rate": for any day as applied to any ABR Loan, the annual
assessment rate in effect on such day that is payable by a member of the Bank
Insurance Fund maintained by the Federal Deposit Insurance Corporation (the
"FDIC") classified as well-capitalized and within supervisory subgroup "B" (or
a comparable successor assessment risk classification) within the meaning of 12
C.F.R. Section 327.4 (or any successor provision) to the FDIC (or any
successor) for the FDIC's (or such successor's) insuring time deposits at
offices of such institution in the United States.
"C/D Reserve Percentage": for any day as applied to any ABR Loan, that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board, for determining the maximum reserve requirement for a
Depositary Institution (as defined in Regulation D of the Board as in effect
from time to time) in respect of new non-personal time deposits in Dollars
having a maturity of 30 days or more.
"Closing Date": the date on which the conditions precedent set forth in
Section 5.1 shall have been satisfied, which date is May 14, 1998.
"Code": the Internal Revenue Code of 1986, as amended from time to time.
"Collateral": all property of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security
Document.
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"Commitment Fee Rate": 1/2 of 1% per annum; provided, that on and after
the first Adjustment Date occurring after the Closing Date, the Commitment Fee
Rate will be determined pursuant to the Pricing Grid.
"Commonly Controlled Entity": an entity, whether or not incorporated,
that is under common control with the Borrower within the meaning of Section
4001 of ERISA or is part of a group that includes the Borrower and that is
treated as a single employer under Section 414(b) or (c) of the Code or, for
purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a
single employer under Section 414 (m), (n), (o) or (p) of the Code.
"Compliance Certificate": a certificate duly executed by a Responsible
Officer substantially in the form of Exhibit B.
"Confidential Information Memorandum": the Confidential Information
Memorandum dated April 1998 and furnished to the Lenders.
"Consolidated EBITDA": for any period, Consolidated Net Income for such
period plus, without duplication and to the extent reflected as a charge in the
statement of such Consolidated Net Income for such period, the sum of (a)
income tax expense, (b) interest expense, amortization or writeoff of debt
discount and debt issuance costs and commissions, discounts and other fees and
charges associated with Indebtedness (including the Loans), (c) depreciation
and amortization expense, (d) amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (e) any extraordinary, unusual or
non-recurring expenses or losses (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income
for such period, non-cash losses on sales of assets outside of the ordinary
course of business), (f) any other non-cash charges (including, without
limitation, the amount of any non-cash deduction to Consolidated Net Income as
a result of any grant to members of management of any Capital Stock of the
Borrower) and (g) the prepayment costs associated with the termination of the
Existing Credit Agreement, not to exceed an aggregate amount of $3,100,000, and
minus, to the extent included in the statement of such Consolidated Net Income
for such period, the sum of (a) any extraordinary, unusual or non-recurring
income or gains (including, whether or not otherwise includable as a separate
item in the statement of such Consolidated Net Income for such period, gains on
the sales of assets outside of the ordinary course of business) and (b) any
other non-cash income, all as determined on a consolidated basis; provided,
that for purposes of determining Consolidated EBITDA for the four quarter
period ending on or about June 30, 1998, there shall be added to Consolidated
EBITDA for such period the amount of $3,500,000 and for purposes of determining
Consolidated EBITDA for the four quarter period ending on or about September
30, 1998, there shall be added to Consolidated EBITDA for such period the
amount of $3,350,000.
"Consolidated Interest Coverage Ratio": for any period, the ratio of (a)
Consolidated EBITDA for such period to (b) Consolidated Interest Expense for
such period.
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"Consolidated Interest Expense": for any period, total cash interest
expense (including that attributable to Capital Lease Obligations) of the
Borrower and its Subsidiaries for such period with respect to all outstanding
Indebtedness of the Borrower and its Subsidiaries determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income": for any period, the consolidated net income
(or loss) of the Borrower and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP; provided that there shall be excluded (a) the
income (or deficit) of any Person accrued prior to the date it becomes a
Subsidiary of the Borrower or is merged into or consolidated with the Borrower
or any of its Subsidiaries, (b) the income (or deficit) of any Person (other
than a Subsidiary of the Borrower) in which the Borrower or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Borrower or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary of the Borrower to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any Contractual Obligation (other than under any Loan
Document) or Requirement of Law applicable to such Subsidiary.
"Consolidated Net Worth": as of the date of determination, all items which
in conformity with GAAP would be included under shareholders' equity on a
consolidated balance sheet of the Borrower at such date.
"Consolidated Senior Debt": at any date, the aggregate principal amount
of all Indebtedness of the Borrower and its Subsidiaries (including the Loans)
which is not by its terms subordinated to any other Indebtedness of the
Borrower or any such Subsidiary at such date, determined on a consolidated
basis in accordance with GAAP.
"Consolidated Senior Leverage Ratio": as at the last day of any period,
the ratio of (a) Consolidated Senior Debt on such day to (b) Consolidated
EBITDA for such period.
"Consolidated Total Debt": at any date, the aggregate principal amount of
all Indebtedness of the Borrower and its Subsidiaries at such date, determined
on a consolidated basis in accordance with GAAP.
"Consolidated Total Leverage Ratio": as at the last day of any period,
the ratio of (a) Consolidated Total Debt on such day to (b) Consolidated EBITDA
for such period.
"Continuing Directors": the directors of the Borrower on the Closing
Date, after giving effect to the Refinancing and the other transactions
contemplated hereby, and each other director, if, in each case, such other
director's nomination for election to the board of directors of the Borrower is
recommended by at least a majority of the then Continuing Directors.
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"Contractual Obligation": as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.
"Default": any of the events specified in Section 8, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Disposition": with respect to any property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof; and
the terms "Dispose" and "Disposed of" shall have correlative meanings.
"Dollars" and "$": dollars in lawful currency of the United States of
America.
"Domestic Subsidiary": any Subsidiary of the Borrower organized under the
laws of any jurisdiction within the United States of America.
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of
Law (including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as amended
from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and emergency
reserves under any regulations of the Board or other Governmental Authority
having jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board) maintained by a member bank of the
Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined on the
basis of the rate for deposits in Dollars for a period equal to such Interest
Period appearing on Page 3750 of the Dow Jones Markets screen as of 11:00 A.M.,
London time, two Business Days prior to the beginning of such Interest Period.
In the event that such rate does not appear on Page 3750 of the Dow Jones
Markets screen (or otherwise on such screen), the "Eurodollar Base Rate" shall
be determined by reference to such other comparable publicly available service
for displaying eurodollar rates as may be selected by the Administrative Agent
or, in the absence of such availability, by reference to the rate at which the
Administrative Agent is offered Dollar deposits at or about 11:00 A.M., New
York City time, two Business Days prior to the beginning of such Interest
Period in the interbank eurodollar market where its eurodollar and foreign
currency and
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exchange operations are then being conducted for delivery on the first day of
such Interest Period for the number of days comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th of
1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar Loans the
then current Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such Loans shall originally
have been made on the same day).
"Event of Default": any of the events specified in Section 8, provided
that any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"Excluded Foreign Subsidiary": any Foreign Subsidiary in respect of which
either (a) the pledge of all of the Capital Stock of such Subsidiary as
Collateral or (b) the guaranteeing by such Subsidiary of the Obligations,
would, in the good faith judgment of the Borrower, result in adverse tax
consequences to the Borrower.
"Excluded Taxes": as defined in Section 2.16(a).
"Existing Credit Agreement": as defined in Section 5.1(b).
"Federal Funds Effective Rate": for any day, the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day of such transactions received by the Reference Lender
from three federal funds brokers of recognized standing selected by it.
"Foreign Subsidiary": any Subsidiary of the Borrower that is not a
Domestic Subsidiary.
"Funding Office": the office of the Administrative Agent specified in
Section 10.2.
"GAAP": generally accepted accounting principles in the United States of
America as in effect from time to time set forth in the opinions and
pronouncements of the
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Accounting Principles Board and the American Institute of Certified Public
Accountants and the statements and pronouncements of the Financial Accounting
Standards Board and the rules and regulations of the Securities and Exchange
Commission, or in such other statements by such other entity as may be in
general use by significant segments of the accounting profession, that are
applicable to the circumstances of the Borrower as of the date of
determination, except that for purposes of Section 7.1, GAAP shall be
determined on the basis of such principles in effect on the date hereof and
consistent with those used in the preparation of the most recent audited
financial statements delivered pursuant to Section 4.1(b). In the event that
any "Accounting Change" (as defined below) shall occur and such change results
in a change in the method of calculation of financial covenants, standards or
terms in this Agreement, then the Borrower and the Administrative Agent agree
to enter into negotiations in order to amend such provisions of this Agreement
so as to equitably reflect such Accounting Changes with the desired result that
the criteria for evaluating the Borrower's financial condition shall be the
same after such Accounting Changes as if such Accounting Changes had not been
made. Until such time as such an amendment shall have been executed and
delivered by the Borrower, the Administrative Agent and the Required Lenders,
all financial covenants, standards and terms in this Agreement shall continue
to be calculated or construed as if such Accounting Changes had not occurred.
"Accounting Changes" refers to changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants or, if applicable, the Securities and Exchange Commission (or
successors thereto or agencies with similar functions).
"Governmental Authority": any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government
(including, without limitation, the National Association of Insurance
Commissioners).
"Guarantee and Collateral Agreement": the Guarantee and Collateral
Agreement to be executed and delivered by the Borrower and each Subsidiary
Guarantor, substantially in the form of Exhibit A, as the same may be amended,
supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing person"), any
obligation of (a) the guaranteeing person or (b) another Person (including,
without limitation, any bank under any letter of credit), as to which, to
induce the creation of such obligation, the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or
other obligations (the "primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of
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assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (iv) otherwise to assure
or hold harmless the owner of any such primary obligation against loss in
respect thereof; provided, however, that the term Guarantee Obligation shall
not include endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lesser of (a) an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are not stated
or determinable, in which case the amount of such Guarantee Obligation shall be
such guaranteeing person's maximum reasonably anticipated liability in respect
thereof as determined by the Borrower in good faith.
"Incur": as defined in Section 7.2; and the terms "Incurred" and
"Incurrence" shall have correlative meanings.
"Indebtedness": of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade payables incurred in the ordinary course of such Person's
business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (e) all Capital Lease
Obligations of such Person, (f) all obligations of such Person, contingent or
otherwise, as an account party under acceptance, letter of credit or similar
facilities, (g) all obligations of such Person, contingent or otherwise, to
purchase, redeem, retire or otherwise acquire for value any Capital Stock of
such Person, (h) all Guarantee Obligations of such Person in respect of
obligations of the kind referred to in clauses (a) through (g) above; (i) all
obligations of the kind referred to in clauses (a) through (h) above secured by
(or for which the holder of such obligation has an existing right, contingent
or otherwise, to be secured by) any Lien on property (including, without
limitation, accounts and contract rights) owned by such Person, whether or not
such Person has assumed or become liable for the payment of such obligation;
and (j) for the purposes of Section 8(e) only, all obligations of such Person
in respect of Interest Rate Protection Agreements.
"Insolvency": with respect to any Multiemployer Plan, the condition that
such Plan is insolvent within the meaning of Section 4245(b) of ERISA and any
section incorporated by reference therein.
"Insolvent": pertaining to a condition of Insolvency.
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"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including,
without limitation, copyrights, copyright licenses, patents, patent licenses,
trademarks, trademark licenses, technology, know-how and processes, and all
rights to sue at law or in equity for any infringement or other impairment
thereof, including the right to receive all proceeds and damages therefrom.
"Interest Payment Date": (a) as to any ABR Loan, the last day of each
March, June, September and December to occur while such Loan is outstanding and
the final maturity date of such Loan, (b) as to any Eurodollar Loan having an
Interest Period of three months or less, the last day of such Interest Period,
(c) as to any Eurodollar Loan having an Interest Period longer than three
months, each day that is three months, or a whole multiple thereof, after the
first day of such Interest Period and the last day of such Interest Period and
(d) as to any Eurodollar Loan, the date of any repayment or prepayment made in
respect thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially, the period
commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the last day of
the then current Interest Period with respect thereto; provided that, all of
the foregoing provisions relating to Interest Periods are subject to the
following:
(i) if any Interest Period would otherwise end on a day that is not
a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which event
such Interest Period shall end on the immediately preceding Business Day;
(ii) any Interest Period that would otherwise extend beyond the
Revolving Termination Date shall end on the Revolving Termination Date;
(iii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(iv) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an Interest
Period for such Loan.
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"Interest Rate Protection Agreement": any interest rate protection
agreement, interest rate futures contract, interest rate option, interest rate
cap or other interest rate hedge arrangement, to or under which the Borrower or
any of its Subsidiaries is a party or a beneficiary on the date hereof or
becomes a party or a beneficiary after the date hereof.
"Investments": as defined in Section 7.8.
"Issuing Lender": The Chase Manhattan Bank (or any of its Affiliates,
including, without limitation, Chase Manhattan Bank Delaware), LaSalle National
Bank or any other Lender (or any of their respective Affiliates), in its
capacity as issuer of any Letter of Credit, as determined by the Borrower for
the applicable Letter of Credit.
"L/C Commitment": $15,000,000.
"L/C Fee Payment Date": the last day of each March, June, September and
December and the last day of the Revolving Commitment Period.
"L/C Obligations": at any time, an amount equal to the sum of (a) the
aggregate then undrawn and unexpired amount of the then outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit that
have not then been reimbursed pursuant to Section 3.5.
"L/C Participants": the collective reference to all the Lenders other
than the Issuing Lender.
"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
capital lease having substantially the same economic effect as any of the
foregoing).
"Loan": any loan made by any Lender pursuant to this Agreement.
"Loan Documents": this Agreement, the Security Documents and the Notes.
"Loan Parties": the Borrower and each Subsidiary of the Borrower that is
a party to a Loan Document.
"Material Adverse Effect": a material adverse effect on (a) the
Refinancing, (b) the business, property, assets, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole
or (c) the validity or enforceability of this Agreement or any of
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the other Loan Documents or the rights or remedies of the Administrative Agent
or the Lenders hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"Mortgaged Properties": the real properties listed on Schedule 1.1B, as
to which the Administrative Agent for the benefit of the Lenders shall be
granted a Lien pursuant to the Mortgages.
"Mortgages": each of the mortgages and deeds of trust made by any Loan
Party in favor of, or for the benefit of, the Administrative Agent for the
benefit of the Lenders, substantially in the form of Exhibit D (with such
changes thereto as shall be advisable under the law of the jurisdiction in
which such mortgage or deed of trust is to be recorded), as the same may be
amended, supplemented or otherwise modified from time to time.
"Multiemployer Plan": a Plan that is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents
(including any such proceeds received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price adjustment
receivable or otherwise, but only as and when received) of such Asset Sale or
Recovery Event, net of attorneys' fees, accountants' fees, investment banking
fees, amounts required to be applied to the repayment of Indebtedness secured
by a Lien expressly permitted hereunder on any asset that is the subject of
such Asset Sale or Recovery Event (other than any Lien pursuant to a Security
Document) and other customary fees and expenses actually incurred in connection
therewith and net of taxes paid or reasonably estimated to be payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements) and (b) in connection with any
issuance or sale of equity securities or debt securities or instruments or the
incurrence of loans, the cash proceeds received from such issuance or
incurrence, net of attorneys' fees, investment banking fees, accountants' fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred in connection therewith.
"Non-Excluded Taxes": as defined in Section 2.16(a).
"Non-U.S. Lender": as defined in Section 2.16(b).
"Notes": the collective reference to any promissory note evidencing
Loans.
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"Obligations": the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans and
Reimbursement Obligations and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization
or like proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) the Loans
and all other obligations and liabilities of the Borrower to the Administrative
Agent or to any Lender (or, in the case of Interest Rate Protection Agreements,
any affiliate of any Lender), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, this Agreement, any other Loan
Document, the Letters of Credit, any Interest Rate Protection Agreement entered
into with any Lender or any affiliate of any Lender or any other document made,
delivered or given in connection herewith or therewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all fees, charges and disbursements of
counsel to the Administrative Agent or to any Lender that are required to be
paid by the Borrower pursuant hereto) or otherwise.
"Participant": as defined in Section 10.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA (or any successor).
"Permitted Acquisition": as defined in Section 7.8(g).
"Permitted Investors": the collective reference to officers and directors
of the Borrower on the date hereof and any holder of more than 15% of the
outstanding common stock of the Borrower on the date hereof.
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Plan": at a particular time, any employee benefit plan that is covered
by ERISA and in respect of which the Borrower or a Commonly Controlled Entity
is (or, if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Preferred Stock": any Capital Stock entitled by its terms to a
preference (a) as to dividends or (b) upon a distribution of assets.
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Pro Forma Balance Sheet": as defined in Section 4.1(a).
"Projections": as defined in Section 6.2(c).
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"Properties": as defined in Section 4.17.
"Purchase Price": with respect to any Acquisition, the sum (without
duplication) of (a) the amount of cash paid by the Borrower and its
Subsidiaries in connection with such Acquisition, (b) the value (as determined
for purposes of such Acquisition in accordance with the applicable acquisition
agreement) of all Capital Stock of the Borrower issued or given as
consideration in connection with such Acquisition, (c) the principal amount
(or, if less, the accreted value) at the time of such Acquisition of all
Indebtedness incurred, assumed or acquired by Borrower and its Subsidiaries in
connection with such Acquisition, (d) all additional purchase price amounts in
connection with such Acquisition in the form of earnouts, deferred purchase
price and other contingent obligations that should be recorded as a liability
on the balance sheet of the Borrower and its Subsidiaries in accordance with
GAAP, Regulation S-X under the Securities Act of 1933, as amended, or any other
rule or regulation of the United States Securities and Exchange Commission, (e)
all amounts paid by the Borrower and its Subsidiaries in respect of covenants
not to compete, consulting agreements and other affiliated contracts in
connection with such Acquisition, and (f) the aggregate fair market value of
all other consideration given by the Borrower and its Subsidiaries in
connection with such Acquisition.
"Recovery Event": any settlement of or payment in respect of any property
or casualty insurance claim or any condemnation proceeding relating to any
asset of the Borrower or any of its Subsidiaries.
"Reference Lender": The Chase Manhattan Bank.
"Reference Period": with respect to any date, means the period of four
consecutive fiscal quarters of the Borrower immediately preceding such date or,
if such date is the last day of a fiscal quarter, ending on such date.
"Refinancing": as defined in Section 5.1(b).
"Refunded Swingline Loans": as defined in Section 2.4.
"Refunding Date": as defined in Section 2.4.
"Register": as defined in Section 10.6(d).
"Regulation U": Regulation U of the Board as in effect from time to time.
"Reimbursement Obligation": the obligation of the Borrower to reimburse
the Issuing Lender pursuant to Section 3.5 for amounts drawn under Letters of
Credit.
"Reinvestment Deferred Amount": with respect to any Reinvestment Event,
the aggregate Net Cash Proceeds received by the Borrower or any of its
Subsidiaries in connection
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therewith that are not applied to reduce the Revolving Commitments pursuant to
Section 2.8(b) as a result of the delivery of a Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in respect of
which the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a Responsible Officer
stating that no Event of Default has occurred and is continuing and that the
Borrower (directly or indirectly through a Subsidiary) intends and expects to
use all or a specified portion of the Net Cash Proceeds of an Asset Sale or
Recovery Event to acquire assets useful in its business.
"Reinvestment Prepayment Amount": with respect to any Reinvestment Event,
the Reinvestment Deferred Amount relating thereto less any amount expended
prior to the relevant Reinvestment Prepayment Date to acquire assets useful in
the Borrower's business.
"Reinvestment Prepayment Date": with respect to any Reinvestment Event,
the earlier of (a) the date occurring six months after such Reinvestment Event
and (b) the date on which the Borrower shall have determined not to, or shall
have otherwise ceased to, acquire assets useful in the Borrower's business with
all or any portion of the relevant Reinvestment Deferred Amount.
"Reorganization": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of
ERISA.
"Reportable Event": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .22, .23, .27, .28, .29, .30, .31, .32, .34 or .35 of
PBGC Reg. Section 4043.
"Required Lenders": the holders of more than 50% of the Total Revolving
Commitments or, if the Revolving Commitments have been terminated, the Total
Revolving Extensions of Credit.
"Requirement of Law": as to any Person, the Certificate of Incorporation
and By-Laws or other organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject.
"Responsible Officer": the chief executive officer, president or chief
financial officer of the Borrower, but in any event, with respect to financial
matters, the chief financial officer of the Borrower.
"Restricted Payments": as defined in Section 7.6.
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"Revolving Commitment": as to any Lender, the obligation of such Lender,
if any, to make Revolving Loans and participate in Swingline Loans and Letters
of Credit, in an aggregate principal and/or face amount not to exceed the
amount set forth under the heading "Revolving Commitment" opposite such
Lender's name on Schedule 1.1A, as the same may be changed from time to time
pursuant to the terms hereof. The original amount of the Total Revolving
Commitments is $100,000,000.
"Revolving Commitment Period": the period from and including the Closing
Date to the Revolving Termination Date.
"Revolving Extensions of Credit": as to any Lender at any time, an amount
equal to the sum of (a) the aggregate principal amount of all Revolving Loans
made by such Lender then outstanding, (b) such Lender's Revolving Percentage of
the L/C Obligations then outstanding and (c) such Lender's Revolving Percentage
of the aggregate principal amount of Swingline Loans then outstanding.
"Revolving Facility": the Revolving Commitments and the extensions of
credit made thereunder.
"Revolving Loans": as defined in Section 2.1.
"Revolving Percentage": as to any Lender at any time, the percentage
which such Lender's Revolving Commitment then constitutes of the Total
Revolving Commitments (or, at any time after the Revolving Commitments shall
have expired or terminated, the percentage which the aggregate principal amount
of such Lender's Revolving Loans then outstanding constitutes of the aggregate
principal amount of the Revolving Loans then outstanding).
"Revolving Termination Date": May 13, 2003.
"Security Documents": the collective reference to the Guarantee and
Collateral Agreement, the Mortgages and all other security documents hereafter
delivered to the Administrative Agent granting a Lien on any property of any
Person to secure the obligations and liabilities of any Loan Party under any
Loan Document.
"Senior Subordinated Note Indenture": the Indenture entered into by the
Borrower and certain of its Subsidiaries in connection with the issuance of the
Senior Subordinated Notes, together with all instruments and other agreements
entered into by the Borrower or such Subsidiaries in connection therewith, as
the same may be amended, supplemented or otherwise modified from time to time
in accordance with Section 7.9.
"Senior Subordinated Notes": the subordinated notes of the Borrower
issued on the Closing Date pursuant to the Senior Subordinated Note Indenture.
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"Single Employer Plan": any Plan that is covered by Title IV of ERISA,
but that is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that, as of any
date of determination, (a) the amount of the "present fair saleable value" of
the assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise", as of such date, as such
quoted terms are determined in accordance with applicable federal and state
laws governing determinations of the insolvency of debtors, (b) the present
fair saleable value of the assets of such Person will, as of such date, be
greater than the amount that will be required to pay the probable liability of
such Person on its debts as such debts become absolute and matured, (c) such
Person will not have, as of such date, an unreasonably small amount of capital
with which to conduct its business, and (d) such Person will be able to pay its
debts as they mature. For purposes of this definition, (i) "debt" means
liability on a "claim", and (ii) "claim" means any (x) right to payment,
whether or not such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (y) right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether or not
such right to an equitable remedy is reduced to judgment, fixed, contingent,
matured or unmatured, disputed, undisputed, secured or unsecured.
"Specified Change of Control": a "Change of Control" as defined in the
Senior Subordinated Note Indenture.
"Subsidiary": as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, directly
or indirectly through one or more intermediaries, or both, by such Person.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Borrower.
"Subsidiary Guarantor": each Subsidiary of the Borrower other than any
Excluded Foreign Subsidiary.
"Swingline Commitment": the obligation of the Swingline Lender to make
Swingline Loans pursuant to Section 2.3 in an aggregate principal amount at any
one time outstanding not to exceed $5,000,000.
"Swingline Lender": The Chase Manhattan Bank, in its capacity as the
lender of Swingline Loans.
"Swingline Loans": as defined in Section 2.3.
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"Swingline Participation Amount": as defined in Section 2.4.
"Total Revolving Commitments": at any time, the aggregate amount of the
Revolving Commitments then in effect.
"Total Revolving Extensions of Credit": at any time, the aggregate amount
of the Revolving Extensions of Credit of the Lenders outstanding at such time.
"Transferee": any Assignee or Participant.
"Type": as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500,
as the same may be amended from time to time.
"U.S. Taxes": as defined in Section 10.6(d).
"Wholly Owned Subsidiary": as to any Person, any other Person all of the
Capital Stock of which (other than directors' qualifying shares required by
law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor that is a
Wholly Owned Subsidiary of the Borrower.
2 Other Definitional Provisions. (a) Unless otherwise specified therein,
all terms defined in this Agreement shall have the defined meanings when used in
the other Loan Documents or any certificate or other document made or delivered
pursuant hereto or thereto.
(a) As used herein and in the other Loan Documents, and any certificate or
other document made or delivered pursuant hereto or thereto, (i) accounting
terms relating to the Borrower and its Subsidiaries not defined in Section 1.1
and accounting terms partly defined in Section 1.1, to the extent not defined,
shall have the respective meanings given to them under GAAP and (ii) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, Capital Stock, securities, accounts and contract rights.
(b) For the purposes of calculating Consolidated EBITDA for any Reference
Period pursuant to any determination of the Consolidated Senior Leverage Ratio
and the Consolidated Total Leverage Ratio, (i) if at any time during such
Reference Period the Borrower or any Subsidiary shall have made any Material
Disposition, the Consolidated EBITDA for such Reference Period shall be reduced
by an amount equal to the Consolidated EBITDA (if positive) attributable to the
property that is the subject of such Material Disposition for such Reference
Period or increased by an amount equal to the Consolidated EBITDA (if negative)
attributable
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thereto for such Reference Period and (ii) if during such Reference Period the
Borrower or any Subsidiary shall have made a Material Acquisition, Consolidated
EBITDA for such Reference Period shall be calculated after giving pro forma
effect thereto as if such Material Acquisition occurred on the first day of
such Reference Period. As used in this paragraph, "Material Acquisition" means
any acquisition of property or series of related acquisitions of property that
(a) constitutes assets comprising all or substantially all of an operating unit
of a business or constitutes all or substantially all of the common stock of a
Person and (b) involves the payment of consideration by the Borrower and its
Subsidiaries in excess of $10,000,000 (including any Indebtedness assumed or
incurred in connection therewith); and "Material Disposition" means any
Disposition of property or series of related Dispositions of property that
yields gross proceeds to the Borrower or any of its Subsidiaries in excess of
$10,000,000.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. AMOUNT AND TERMS OF COMMITMENTS
1 Revolving Commitments. (a) Subject to the terms and conditions hereof,
each Lender severally agrees to make revolving credit loans ("Revolving Loans")
to the Borrower from time to time during the Revolving Commitment Period in an
aggregate principal amount at any one time outstanding which, when added to
such Lender's Revolving Percentage of the sum of (i) the L/C Obligations then
outstanding and (ii) the aggregate principal amount of the Swingline Loans then
outstanding, does not exceed the amount of such Lender's Revolving Commitment.
During the Revolving Commitment Period the Borrower may use the Revolving
Commitments by borrowing, prepaying the Revolving Loans in whole or in part,
and reborrowing, all in accordance with the terms and conditions hereof. The
Revolving Loans may from time to time be Eurodollar Loans or ABR Loans, as
determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.2 and 2.9, provided that no Revolving Loan shall be
made as a Eurodollar Loan after the day that is one month prior to the
Revolving Termination Date.
(b) The Borrower shall repay all outstanding Revolving Loans on the
Revolving Termination Date.
2 Procedure for Revolving Loan Borrowing. The Borrower may borrow under
the Revolving Commitments during the Revolving Commitment Period on any
Business Day, provided that the Borrower shall give the Administrative Agent
irrevocable notice (which notice must be received by the Administrative Agent
prior to 12:00 Noon, New York City time, (a) three Business Days prior to the
requested Borrowing Date, in the case of Eurodollar Loans, or
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(b) on the requested Borrowing Date, in the case of ABR Loans), specifying (i)
the amount and Type of Revolving Loans to be borrowed, (ii) the requested
Borrowing Date and (iii) in the case of Eurodollar Loans, the respective
amounts of each such Type of Loan and the respective lengths of the initial
Interest Period therefor. Any Revolving Loans made on the Closing Date shall
initially be ABR Loans. Each borrowing under the Revolving Commitments shall
be in an amount equal to (x) in the case of ABR Loans, $500,000 or a whole
multiple of $250,000 in excess thereof (or, if the then aggregate Available
Revolving Commitments are less than $500,000, such lesser amount) and (y) in
the case of Eurodollar Loans, $1,000,000 or a whole multiple of $500,000 in
excess thereof; provided, that the Swingline Lender may request, on behalf of
the Borrower, borrowings under the Revolving Commitments that are ABR Loans in
other amounts pursuant to Section 2.4. Upon receipt of any such notice from
the Borrower, the Administrative Agent shall promptly notify each Lender
thereof. Each Lender will make the amount of its pro rata share of each
borrowing available to the Administrative Agent for the account of the Borrower
at the Funding Office prior to 2:00 P.M., New York City time, on the Borrowing
Date requested by the Borrower in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to the
Borrower by the Administrative Agent crediting the account of the Borrower on
the books of such office with the aggregate of the amounts made available to
the Administrative Agent by the Lenders and in like funds as received by the
Administrative Agent or by depositing such amounts to such other account as
shall be directed by the Borrower.
3 Swingline Commitment. (a) Subject to the terms and conditions hereof,
the Swingline Lender agrees to make a portion of the credit otherwise available
to the Borrower under the Revolving Commitments from time to time during the
Revolving Commitment Period by making swing line loans ("Swingline Loans") to
the Borrower; provided that (i) the aggregate principal amount of Swingline
Loans outstanding at any time shall not exceed the Swingline Commitment then in
effect (notwithstanding that the Swingline Loans outstanding at any time, when
aggregated with the Swingline Lender's other outstanding Revolving Loans
hereunder, may exceed the Swingline Commitment or such Lender's Revolving
Commitment then in effect) and (ii) the Borrower shall not request, and the
Swingline Lender shall not make, any Swingline Loan if, after giving effect to
the making of such Swingline Loan, the aggregate amount of the Available
Revolving Commitments would be less than zero. During the Revolving Commitment
Period, the Borrower may use the Swingline Commitment by borrowing, repaying and
reborrowing, all in accordance with the terms and conditions hereof. Swingline
Loans shall be ABR Loans only.
(a) The Borrower shall repay all outstanding Swingline Loans on the
Revolving Termination Date.
4 Procedure for Swingline Borrowing; Refunding of Swingline Loans.
Whenever the Borrower desires that the Swingline Lender make Swingline Loans it
shall give the Swingline Lender irrevocable telephonic notice confirmed
promptly in writing (which telephonic notice must be received by the Swingline
Lender not later than 1:00 P.M., New York City time, on the proposed Borrowing
Date), specifying (i) the amount to be borrowed and (ii)
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the requested Borrowing Date (which shall be a Business Day during the
Revolving Commitment Period). Each borrowing under the Swingline Commitment
shall be in an amount equal to $250,000 or a whole multiple of $100,000 in
excess thereof. Not later than 3:00 P.M., New York City time, on the Borrowing
Date specified in a notice in respect of Swingline Loans, the Swingline Lender
shall make available to the Administrative Agent at the Funding Office an
amount in immediately available funds equal to the amount of the Swingline Loan
to be made by the Swingline Lender. The Administrative Agent shall make the
proceeds of such Swingline Loan available to the Borrower on such Borrowing
Date by depositing such proceeds in the account of the Borrower with the
Administrative Agent or such other account as shall be directed by the Borrower
on such Borrowing Date in immediately available funds.
(a) The Swingline Lender, at any time and from time to time in its sole
and absolute discretion may, on behalf of the Borrower (which hereby
irrevocably directs the Swingline Lender to act on its behalf), on one Business
Day's notice given by the Swingline Lender no later than 12:00 Noon, New York
City time, request each Lender to make, and each Lender hereby agrees to make,
a Revolving Loan, in an amount equal to such Lender's Revolving Percentage of
the aggregate amount of the Swingline Loans (the "Refunded Swingline Loans")
outstanding on the date of such notice, to repay the Swingline Lender. Each
Lender shall make the amount of such Revolving Loan available to the
Administrative Agent at the Funding Office in immediately available funds, not
later than 10:00 A.M., New York City time, one Business Day after the date of
such notice. The proceeds of such Revolving Loans shall be immediately made
available by the Administrative Agent to the Swingline Lender for application
by the Swingline Lender to the repayment of the Refunded Swingline Loans. The
Borrower irrevocably authorizes the Swingline Lender to charge the Borrower's
accounts with the Administrative Agent (up to the amount available in each such
account) in order to immediately pay the amount of such Refunded Swingline
Loans to the extent amounts received from the Lenders are not sufficient to
repay in full such Refunded Swingline Loans.
(b) If prior to the time a Revolving Loan would have otherwise been made
pursuant to Section 2.4(b), one of the events described in Section 8(f) shall
have occurred and be continuing with respect to the Borrower or if for any
other reason, as determined by the Swingline Lender in its sole discretion,
Revolving Loans may not be made as contemplated by Section 2.4(b), each Lender
shall, on the date such Revolving Loan was to have been made pursuant to the
notice referred to in Section 2.4(b) (the "Refunding Date"), purchase for cash
an undivided participating interest in the then outstanding Swingline Loans by
paying to the Swingline Lender an amount (the "Swingline Participation Amount")
equal to (i) such Lender's Revolving Percentage times (ii) the sum of the
aggregate principal amount of Swingline Loans then outstanding that were to
have been repaid with such Revolving Loans.
(c) Whenever, at any time after the Swingline Lender has received from
any Lender such Lender's Swingline Participation Amount, the Swingline Lender
receives any payment on account of the Swingline Loans, the Swingline Lender
will distribute to such Lender its Swingline Participation Amount
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender's participating interest was
outstanding and
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funded and, in the case of principal and interest payments, to reflect such
Lender's pro rata portion of such payment if such payment is not sufficient to
pay the principal of and interest on all Swingline Loans then due); provided,
however, that in the event that such payment received by the Swingline Lender
is required to be returned, such Lender will return to the Swingline Lender any
portion thereof previously distributed to it by the Swingline Lender.
(d) Each Lender's obligation to make the Revolving Loans referred to in
Section 2.4(b) and to purchase participating interests pursuant to Section
2.4(c) shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any setoff, counterclaim,
recoupment, defense or other right that such Lender or the Borrower may have
against the Swingline Lender, the Borrower or any other Person for any reason
whatsoever; (ii) the occurrence or continuance of a Default or an Event of
Default or the failure to satisfy any of the other conditions specified in
Section 5; (iii) any adverse change in the condition (financial or otherwise)
of the Borrower; (iv) any breach of this Agreement or any other Loan Document
by the Borrower, any other Loan Party or any other Lender; or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.
5 Commitment Fees, etc. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee for the
period from and including the Closing Date to the last day of the Revolving
Commitment Period, computed at the Commitment Fee Rate on the average daily
amount of the Available Revolving Commitment of such Lender during the period
for which payment is made, payable quarterly in arrears on the last day of each
March, June, September and December and on the Revolving Termination Date,
commencing on the first of such dates to occur after the date hereof.
(a) The Borrower agrees to pay to the Administrative Agent the fees in
the amounts and on the dates previously agreed to in writing by the Borrower
and the Administrative Agent.
6 Termination or Reduction of Revolving Commitments. The Borrower shall
have the right, upon not less than three Business Days' notice to the
Administrative Agent, to terminate the Revolving Commitments or, from time to
time, to reduce the amount of the Revolving Commitments; provided that no such
termination or reduction of Revolving Commitments shall be permitted if, after
giving effect thereto and to any prepayments of the Revolving Loans and
Swingline Loans made on the effective date thereof, the Total Revolving
Extensions of Credit would exceed the Total Revolving Commitments. Any such
reduction shall be in an amount equal to $1,000,000, or a whole multiple
thereof, and shall reduce permanently the Revolving Commitments then in effect.
7 Optional Prepayments. The Borrower may at any time and from time to
time prepay the Loans, in whole or in part, without premium or penalty, upon
irrevocable notice delivered to the Administrative Agent at least three Business
Days prior thereto in the case of Eurodollar Loans and by 12:00 Noon, New York
City time on the Business Day of such
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prepayment in the case of ABR Loans, which notice shall specify the date and
amount of prepayment and whether the prepayment is of Eurodollar Loans or ABR
Loans; provided, that if a Eurodollar Loan is prepaid on any day other than the
last day of the Interest Period applicable thereto, the Borrower shall also pay
any amounts owing pursuant to Section 2.17. Upon receipt of any such notice
the Administrative Agent shall promptly notify each relevant Lender thereof.
If any such notice is given, the amount specified in such notice shall be due
and payable on the date specified therein, together with (in the case of
Eurodollar Loans) accrued interest to such date on the amount prepaid. Partial
prepayments of Revolving Loans shall be in an aggregate principal amount of
$1,000,000 or a whole multiple thereof. Partial prepayments of Swingline Loans
shall be in an aggregate principal amount of $100,000 or a whole multiple
thereof.
8 Mandatory Prepayments and Commitment Reductions. (a) Unless the
Required Lenders shall otherwise agree, if any Indebtedness shall be issued or
Incurred by the Borrower or any of its Subsidiaries (excluding any Indebtedness
Incurred in accordance with Section 7.2), an amount equal to 100% of the Net
Cash Proceeds thereof shall be applied on the date of such issuance or
Incurrence toward the reduction of the Revolving Commitments as set forth in
Section 2.8(c).
(a) Unless the Required Lenders shall otherwise agree, if on any date the
Borrower or any of its Subsidiaries shall receive Net Cash Proceeds from any
Asset Sale or Recovery Event then, unless a Reinvestment Notice shall be
delivered in respect thereof, such Net Cash Proceeds shall be applied on such
date toward the reduction of the Revolving Commitments as set forth in Section
2.8(c); provided, that, notwithstanding the foregoing, on each Reinvestment
Prepayment Date, an amount equal to the Reinvestment Prepayment Amount with
respect to the relevant Reinvestment Event shall be applied toward the
reduction of the Revolving Commitments as set forth in Section 2.8(c).
(b) Amounts to be applied in connection with Revolving Commitment
reductions made pursuant to this Section 2.8 shall be accompanied by prepayment
of the Revolving Loans and/or Swingline Loans to the extent, if any, that the
Total Revolving Extensions of Credit exceed the amount of the Total Revolving
Commitments as so reduced, provided that if the aggregate principal amount of
Revolving Loans and Swingline Loans then outstanding is less than the amount of
such excess (because L/C Obligations constitute a portion thereof), the
Borrower shall, to the extent of the balance of such excess, replace
outstanding Letters of Credit and/or deposit an amount in cash in a cash
collateral account established with the Administrative Agent for the benefit of
the Lenders on terms and conditions satisfactory to the Administrative Agent.
The application of any prepayment pursuant to this Section 2.8 shall be made
first to ABR Loans and second to Eurodollar Loans. Each prepayment of the
Revolving Loans under this Section 2.8 (in the case of Eurodollar Loans) shall
be accompanied by accrued interest to the date of such prepayment on the amount
prepaid.
9 Conversion and Continuation Options. (a) The Borrower may elect from
time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion
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of Eurodollar Loans may only be made on the last day of an Interest Period with
respect thereto. The Borrower may elect from time to time to convert ABR Loans
to Eurodollar Loans by giving the Administrative Agent at least three Business
Days' prior irrevocable notice of such election (which notice shall specify the
length of the initial Interest Period therefor), provided that no ABR Loan may
be converted into a Eurodollar Loan (i) when any Event of Default has occurred
and is continuing and the Administrative Agent or the Required Lenders have
determined in its or their sole discretion not to permit such conversions or
(ii) after the date that is one month prior to the Revolving Termination Date.
Upon receipt of any such notice the Administrative Agent shall promptly notify
each relevant Lender thereof.
(a) Any Eurodollar Loan may be continued as such upon the expiration of
the then current Interest Period with respect thereto by the Borrower giving
irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.1,
of the length of the next Interest Period to be applicable to such Revolving
Loans, provided that no Eurodollar Loan may be continued as such (i) when any
Event of Default has occurred and is continuing and the Administrative Agent
has or the Required Lenders have determined in its or their sole discretion not
to permit such continuations or (ii) after the date that is one month prior to
the Revolving Termination Date, and provided, further, that if the Borrower
shall fail to give any required notice as described above in this paragraph or
if such continuation is not permitted pursuant to the preceding proviso such
Revolving Loans shall be automatically converted to ABR Loans on the last day
of such then expiring Interest Period. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof.
10 Limitations on Eurodollar Tranches. Notwithstanding anything to the
contrary in this Agreement, all borrowings, conversions, continuations and
optional prepayments of Eurodollar Loans hereunder and all selections of
Interest Periods hereunder shall be in such amounts and be made pursuant to
such elections so that, (a) after giving effect thereto, the aggregate
principal amount of the Eurodollar Loans comprising each Eurodollar Tranche
shall be equal to $1,000,000 or a whole multiple of $500,000 in excess thereof
and (b) no more than ten Eurodollar Tranches shall be outstanding at any one
time.
11 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at
a rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(a) Each ABR Loan shall bear interest at a rate per annum equal to the ABR
plus the Applicable Margin.
(b) (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), all outstanding Loans and
Reimbursement Obligations (whether or not overdue) shall bear interest at a
rate per annum equal to (x) in the case of the Loans, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
Section 2.11 plus 2%
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or (y) in the case of Reimbursement Obligations, the rate applicable to ABR
Loans plus 2%, and (ii) if all or a portion of any interest payable on any Loan
or Reimbursement Obligation or any commitment fee or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum equal to the rate then applicable to ABR Loans plus 2%, in each case,
with respect to clauses (i) and (ii) above, from the date of such non-payment
until such amount is paid in full (as well after as before judgment).
(c) Interest shall be payable in arrears on each Interest Payment Date,
provided that interest accruing pursuant to paragraph (c) of this Section 2.11
shall be payable from time to time on demand.
12 Computation of Interest and Fees. (a) Interest and fees payable
pursuant hereto shall be calculated on the basis of a 360-day year for the
actual days elapsed, except that, with respect to ABR Loans the rate of interest
on which is calculated on the basis of the Prime Rate, the interest thereon
shall be calculated on the basis of a 365- (or 366-, as the case may be) day
year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from
a change in the ABR or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of the effective date and the amount of each
such change in interest rate.
(a) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.11(a).
13 Inability to Determine Interest Rate. If prior to the first day of any
Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or
(b) the Administrative Agent shall have received notice from the
Required Lenders that the Eurodollar Rate determined or to be determined
for such Interest Period will not adequately and fairly reflect the cost
to such Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest Period,
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the Administrative Agent shall give telecopy or telephonic notice thereof to
the Borrower and the relevant Lenders as soon as practicable thereafter. If
such notice is given (x) any Eurodollar Loans requested to be made on the first
day of such Interest Period shall be made as ABR Loans or not borrowed, at the
Borrower's option, (y) any Revolving Loans that were to have been converted on
the first day of such Interest Period to Eurodollar Loans shall be prepaid or
continued as ABR Loans at the Borrower's option and (z) any outstanding
Eurodollar Loans shall be prepaid or converted at the Borrower's option, on the
first day of such Interest Period, to ABR Loans. Until such notice has been
withdrawn by the Administrative Agent, no further Eurodollar Loans shall be
made or continued as such, nor shall the Borrower have the right to convert
Revolving Loans to Eurodollar Loans.
14 Pro Rata Treatment and Payments. (a) Each borrowing by the Borrower
from the Lenders hereunder, each payment by the Borrower on account of any
commitment fee and any reduction of the Revolving Commitments of the Lenders
shall be made pro rata according to the respective Revolving Percentages of the
Lenders.
(a) Each payment (including each prepayment) by the Borrower on account
of principal of and interest on the Revolving Loans shall be made pro rata
according to the respective outstanding principal amounts of the Revolving
Loans then held by the Lenders.
(b) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative Agent, for
the account of the Lenders, at the Funding Office, in Dollars and in
immediately available funds. The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received. If
any payment hereunder (other than payments on the Eurodollar Loans) becomes due
and payable on a day other than a Business Day, such payment shall be extended
to the next succeeding Business Day. If any payment on a Eurodollar Loan
becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day unless the result
of such extension would be to extend such payment into another calendar month,
in which event such payment shall be made on the immediately preceding Business
Day. In the case of any extension of any payment of principal pursuant to the
preceding two sentences, interest thereon shall be payable at the then
applicable rate during such extension.
(c) Unless the Administrative Agent shall have been notified in writing
by any Lender prior to a borrowing that such Lender will not make the amount
that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is not made available to
the Administrative Agent by the required time on the Borrowing Date therefor,
such Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available
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to the Administrative Agent. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this Section
2.14(d) shall be conclusive in the absence of manifest error. If such Lender's
share of such borrowing is not made available to the Administrative Agent by
such Lender within three Business Days of such Borrowing Date, the
Administrative Agent shall also be entitled to recover such amount with
interest thereon at the rate per annum applicable to ABR Loans, on demand, from
the Borrower.
(d) Unless the Administrative Agent shall have been notified in writing
by the Borrower prior to the date of any payment being made hereunder that the
Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective pro rata shares
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days of such required date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding
sentence, such amount with interest thereon at the rate per annum equal to the
daily average Federal Funds Effective Rate. Nothing herein shall be deemed to
limit the rights of the Administrative Agent or any Lender against the
Borrower.
15 Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall change the basis of Excluded Taxes of any Lender with
respect to this Agreement, any Letter of Credit, any Application or any
Eurodollar Loan made by it;
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans
or other extensions of credit by, or any other acquisition of funds by,
any office of such Lender that is not otherwise included in the
determination of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable; provided that the Borrower
shall not be required to compensate a Lender pursuant to this paragraph for any
amounts incurred more than six months prior to the date that such Lender
notifies the Borrower of such Lender's intention to claim compensation
therefor; and provided further that, if the circumstances giving rise to such
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claim have a retroactive effect, then such six-month period shall be extended
to include the period of such retroactive effect. If any Lender becomes
entitled to claim any additional amounts pursuant to this Section 2.15, it
shall promptly notify the Borrower (with a copy to the Administrative Agent) of
the event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or any change
in any Requirement of Law regarding capital adequacy or in the interpretation
or application thereof or compliance by such Lender or any corporation
controlling such Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter
of Credit to a level below that which such Lender or such corporation could
have achieved but for such adoption, change or compliance (taking into
consideration such Lender's or such corporation's policies with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time, after submission by such Lender to the Borrower (with a copy to
the Administrative Agent) of a written request therefor, the Borrower shall pay
to such Lender such additional amount or amounts as will compensate such Lender
for such reduction; provided that the Borrower shall not be required to
compensate a Lender pursuant to this paragraph for any amounts incurred more
than six months prior to the date that such Lender notifies the Borrower of
such Lender's intention to claim compensation therefor; and provided further
that, if the circumstances giving rise to such claim have a retroactive effect,
then such six-month period shall be extended to include the period of such
retroactive effect.
(c) A certificate as to any additional amounts payable pursuant to this
Section 2.15 submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error.
The obligations of the Borrower pursuant to this Section 2.15 shall survive the
termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
16 Taxes. (a) All payments made by the Borrower under this Agreement
shall be made free and clear of, and without deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental Authority,
excluding net income taxes and franchise taxes (imposed in lieu of net income
taxes) imposed on the Administrative Agent or any Lender as a result of a
present or former connection between the Administrative Agent or such Lender
and the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Administrative Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document) (such excluded
taxes, "Excluded Taxes"). If any such non-excluded taxes, levies, imposts,
duties, charges, fees, deductions or withholdings ("Non-Excluded Taxes") are
required to be withheld from any amounts payable to the Administrative Agent or
any Lender hereunder, the amounts so payable
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to the Administrative Agent or such Lender shall be increased to the extent
necessary to yield to the Administrative Agent or such Lender (after payment of
all Non-Excluded Taxes) interest or any such other amounts payable hereunder at
the rates or in the amounts specified in this Agreement, provided, however,
that the Borrower shall not be required to increase any such amounts payable to
any Lender that is not organized under the laws of the United States of America
or a state thereof to the extent such Lender's compliance with the requirements
of Section 2.16(b) at the time such Lender becomes a party to this Agreement
fails to establish a complete exemption from such withholding; provided,
further, that the Borrower shall not be required to increase any such amounts
pursuant to this paragraph for any amounts incurred more than six months prior
to the date such Lender notified the Borrower of such Lender's intention to
claim compensation therefor unless (x) such Lender did not have actual
knowledge of the circumstances giving rise to the obligation of the Borrower to
so increase such amount or (y) the Borrower did have actual knowledge of the
circumstances giving rise to its obligation to so increase such amount; and
provided further that, if the circumstances giving rise to such claim have a
retroactive effect, then such six-month period shall be extended to include the
period of such retroactive effect. Whenever any Non-Excluded Taxes are payable
by the Borrower, as promptly as possible thereafter the Borrower shall send to
the Administrative Agent for its own account or for the account of such Lender,
as the case may be, a certified copy of an original official receipt, if
available, received by the Borrower showing payment thereof. If the Borrower
fails to pay any Non-Excluded Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts
or other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as
a result of any such failure. The agreements in this Section 2.16 shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
(a) Each Lender (or Transferee) that is not a citizen or resident of the
United States of America, a corporation, partnership or other entity created or
organized in or under the laws of the United States of America (or any
jurisdiction thereof), or any estate or trust that is subject to federal income
taxation regardless of the source of its income (a "Non-U.S. Lender") shall
deliver to the Borrower and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form 1001 or Form
4224, or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a Form W-8, or any subsequent versions
thereof or successors thereto (and, if such Non-U.S. Lender delivers a Form
W-8, an annual certificate representing that such Non-U.S. Lender is not a
"bank" for purposes of Section 881(c) of the Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the
Borrower and is not a controlled foreign corporation related to the Borrower
(within the meaning of Section 864(d)(4) of the Code)), properly completed and
duly executed by such
Non-U.S. Lender claiming complete exemption from, or a reduced rate of, U.S.
federal withholding tax on all payments by the Borrower under this Agreement
and the other Loan Documents. Such forms shall be delivered by each Non-U.S.
Lender on or before the date it becomes a party to this Agreement (or, in the
case of any Participant, on or before the date such
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Participant purchases the related participation). In addition, each Non-U.S.
Lender shall deliver such forms promptly upon the obsolescence or invalidity of
any form previously delivered by such Non-U.S. Lender. Each Non-U.S. Lender
shall promptly notify the Borrower at any time it determines that it is no
longer in a position to provide any previously delivered certificate to the
Borrower (or any other form of certification adopted by the U.S. taxing
authorities for such purpose). Notwithstanding any other provision of this
Section 2.16(b), a Non-U.S. Lender shall not be required to deliver any form
pursuant to this Section 2.16(b) that such Non-U.S. Lender is not legally able
to deliver.
17 Indemnity. The Borrower agrees to indemnify each Lender and to hold
each Lender harmless from any loss or expense that such Lender may sustain or
incur as a consequence of (a) default by the Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment of Eurodollar Loans on a day that
is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest that would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Revolving
Loans provided for herein (excluding, however, the Applicable Margin included
therein, if any) over (ii) the amount of interest (as reasonably determined by
such Lender) that would have accrued to such Lender on such amount by placing
such amount on deposit for a comparable period with leading banks in the
interbank eurodollar market. A certificate as to any amounts payable pursuant
to this Section 2.17 submitted to the Borrower by any Lender shall be
conclusive in the absence of manifest error. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
18 Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.15 or 2.16(a)
with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or
regulatory disadvantage, and provided, further, that nothing in this Section
2.18 shall affect or postpone any of the obligations of any Borrower or the
rights of any Lender pursuant to Section 2.15 or 2.16(a).
19 Replacement of Lenders. The Borrower shall be permitted to replace
any Lender that (a) requests reimbursement for amounts owing pursuant to
Section 2.15 or 2.16 or (b) defaults in its obligation to make Loans hereunder,
with a replacement financial institution; provided that (i) such replacement
does not conflict with any Requirement of Law, (ii) no Event
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of Default shall have occurred and be continuing at the time of such
replacement, (iii) if applicable, prior to any such replacement, such Lender
shall have taken no action under Section 2.18 so as to eliminate the continued
need for payment of amounts owing pursuant to Section 2.15 or 2.16, (iv) the
replacement financial institution shall purchase, at par, all Loans and other
amounts owing to such replaced Lender on or prior to the date of replacement,
(v) the Borrower shall be liable to such replaced Lender under Section 2.17 if
any Eurodollar Loan owing to such replaced Lender shall be purchased other than
on the last day of the Interest Period relating thereto, (vi) the replacement
financial institution, if not already a Lender, shall be reasonably
satisfactory to the Administrative Agent, (vii) the replaced Lender shall be
obligated to make such replacement in accordance with the provisions of Section
10.6 (provided that the Borrower shall be obligated to pay the registration and
processing fee referred to therein), (viii) until such time as such replacement
shall be consummated, the Borrower shall pay all additional amounts (if any)
required pursuant to Section 2.15 or 2.16, as the case may be, and (ix) any
such replacement shall not be deemed to be a waiver of any rights that the
Borrower, the Administrative Agent or any other Lender shall have against the
replaced Lender.
20 Reporting Requirements of Issuing Lenders. Within two Business Days
following the last day of each calendar month, each Issuing Lender shall
deliver to the Administrative Agent a report detailing all activity during the
preceding month with respect to any Letters of Credit issued by any such
Issuing Lender, including the face amount, the account party, the beneficiary
and the expiration date of such Letters of Credit and any other information
with respect thereto as may be requested by the Administrative Agent.
3. LETTERS OF CREDIT
1 L/C Commitment. (a) Subject to the terms and conditions hereof, the
Issuing Lender, in reliance on the agreements of the other Lenders set forth in
Section 3.4(a), agrees to issue letters of credit ("Letters of Credit") for the
account of the Borrower on any Business Day during the Revolving Commitment
Period in such form as may be approved from time to time by the Issuing Lender;
provided that the Issuing Lender shall have no obligation to issue any Letter
of Credit if, after giving effect to such issuance, (i) the L/C Obligations
would exceed the L/C Commitment or (ii) the aggregate amount of the Available
Revolving Commitments would be less than zero. Letters of Credit may be either
standby letters of credit or commercial letters of credit. Notwithstanding the
foregoing, each of the letters of credit described on Schedule 3.1 shall, from
and after the Closing Date, be deemed to have been issued pursuant to this
Section 3.1(a) with the issuing lender listed on such schedule being deemed to
be the Issuing Lender in respect of such letters of credit. Each Letter of
Credit shall (i) be denominated in Dollars and (ii) expire no later than the
earlier of (x) the first anniversary of its date of issuance and (y) the date
that is five Business Days prior to the Revolving Termination Date, provided
that any Letter of Credit with a one-year term may provide for the renewal
thereof for additional one-year periods (which shall in no event extend beyond
the date referred to in clause (y) above), provided, however, that any Letter
of Credit which is a commercial letter of credit shall expire no later than 180
days after its date of issuance.
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(a) Each Letter of Credit shall be subject to the Uniform Customs and, to
the extent not inconsistent therewith, the laws of the State of New York.
(b) The Issuing Lender shall not at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause the
Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
2 Procedure for Issuance of Letter of Credit. The Borrower may from time
to time request that the Issuing Lender issue a Letter of Credit by delivering
to the Issuing Lender and the Administrative Agent at their respective
addresses for notices specified herein (or to such other address provided by
such Issuing Lender) an Application therefor, completed to the satisfaction of
the Issuing Lender, and such other certificates, documents and other papers and
information as the Issuing Lender may request. Upon receipt of any
Application, the Issuing Lender will process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby (but in no event shall
the Issuing Lender be required to issue any Letter of Credit earlier than three
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed to by the Issuing Lender and the Borrower. The Issuing
Lender shall furnish a copy of such Letter of Credit to the Borrower promptly
following the issuance thereof. The Issuing Lender shall promptly furnish to
the Administrative Agent, which shall in turn promptly furnish to the Lenders,
notice of the issuance of each Letter of Credit (including the amount thereof).
3 Fees and Other Charges. (a) The Borrower will pay a fee on all
outstanding Letters of Credit at a per annum rate equal to (i) the Applicable
Margin then in effect with respect to Eurodollar Loans minus 1/8% times (ii)
the average daily undrawn face amount of all such Letters of Credit, shared
ratably among the Lenders and payable quarterly in arrears on each L/C Fee
Payment Date after the issuance date. In addition, the Borrower shall pay to
the relevant Issuing Lender for its own account a fronting fee at a rate to be
agreed with such Issuing Lender, payable quarterly in arrears on each L/C Fee
Payment Date after the Issuance Date.
(a) In addition to the foregoing fees, the Borrower shall pay or
reimburse the Issuing Lender for such normal and customary costs and expenses
as are incurred or charged by the Issuing Lender in issuing, negotiating,
effecting payment under, amending or otherwise administering any Letter of
Credit.
4 L/C Participations. (a) The Issuing Lender irrevocably agrees to
grant and hereby grants to each L/C Participant, and, to induce the Issuing
Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably
agrees to accept and purchase and hereby accepts and purchases from the Issuing
Lender, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk an undivided interest equal to such L/C
Participant's
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Revolving Percentage in the Issuing Lender's obligations and rights under each
Letter of Credit issued hereunder and the amount of each draft paid by the
Issuing Lender thereunder. Each L/C Participant unconditionally and
irrevocably agrees with the Issuing Lender that, if a draft is paid under any
Letter of Credit for which the Issuing Lender is not reimbursed in full by the
Borrower in accordance with the terms of this Agreement, such L/C Participant
shall pay to the Issuing Lender upon demand at the Issuing Lender's address for
notices specified herein an amount equal to such L/C Participant's Revolving
Percentage of the amount of such draft, or any part thereof, that is not so
reimbursed.
(a) If any amount required to be paid by any L/C Participant to the
Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed
portion of any payment made by the Issuing Lender under any Letter of Credit is
paid to the Issuing Lender within three Business Days after the date such
payment is due, such L/C Participant shall pay to the Issuing Lender on demand
an amount equal to the product of (i) such amount, times (ii) the daily average
Federal Funds Effective Rate during the period from and including the date such
payment is required to the date on which such payment is immediately available
to the Issuing Lender, times (iii) a fraction the numerator of which is the
number of days that elapse during such period and the denominator of which is
360. If any such amount required to be paid by any L/C Participant pursuant to
Section 3.4(a) is not made available to the Issuing Lender by such L/C
Participant within three Business Days after the date such payment is due, the
Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such amount with interest thereon calculated from such due date at the
rate per annum applicable to ABR Loans. A certificate of the Issuing Lender
submitted to any L/C Participant with respect to any amounts owing under this
Section shall be conclusive in the absence of manifest error.
(b) Whenever, at any time after the Issuing Lender has made payment under
any Letter of Credit and has received from any L/C Participant its pro rata
share of such payment in accordance with Section 3.4(a), the Issuing Lender
receives any payment related to such Letter of Credit (whether directly from
the Borrower or otherwise, including proceeds of collateral applied thereto by
the Issuing Lender), or any payment of interest on account thereof, the Issuing
Lender will distribute to such L/C Participant its pro rata share thereof;
provided, however, that in the event that any such payment received by the
Issuing Lender shall be required to be returned by the Issuing Lender, such L/C
Participant shall return to the Issuing Lender the portion thereof previously
distributed by the Issuing Lender to it.
5 Reimbursement Obligation of the Borrower. The Borrower agrees to
reimburse the Issuing Lender on each date on which the Issuing Lender notifies
the Borrower of the date and amount of a draft presented under any Letter of
Credit and paid by the Issuing Lender for the amount of (a) such draft so paid
and (b) any taxes, fees, charges or other costs or expenses incurred by the
Issuing Lender in connection with such payment. Each such payment shall be
made to the Issuing Lender at its address for notices specified herein in
lawful money of the United States of America and in immediately available
funds. Interest shall be payable on any and all amounts remaining unpaid by
the Borrower under this Section from the date such amounts become payable
(whether at stated maturity, by acceleration or otherwise) until payment
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in full at the rate set forth in (i) until the second Business Day following
the date of the applicable drawing, Section 2.11(b) and (ii) thereafter,
Section 2.11(c).
6 Obligations Absolute. The Borrower's obligations under this Section 3
shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment that the
Borrower may have or have had against the Issuing Lender, any beneficiary of a
Letter of Credit or any other Person. The Borrower also agrees with the
Issuing Lender that the Issuing Lender shall not be responsible for, and the
Borrower's Reimbursement Obligations under Section 3.5 shall not be affected
by, among other things, the validity or genuineness of documents or of any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged (subject to the immediately succeeding sentence),
or any dispute between or among the Borrower and any beneficiary of any Letter
of Credit or any other party to which such Letter of Credit may be transferred
or any claims whatsoever of the Borrower against any beneficiary of such Letter
of Credit or any such transferee. The Issuing Lender shall not be liable for
any error, omission, interruption or delay in transmission, dispatch or
delivery of any message or advice, however transmitted, in connection with any
Letter of Credit, except for errors or omissions resulting from the gross
negligence or willful misconduct of the Issuing Lender. The Borrower agrees
that any action taken or omitted by the Issuing Lender under or in connection
with any Letter of Credit or the related drafts or documents, if done in the
absence of gross negligence or willful misconduct and in accordance with the
standards or care specified in the Uniform Commercial Code of the State of New
York, shall be binding on the Borrower and shall not result in any liability of
the Issuing Lender to the Borrower.
7 Letter of Credit Payments. If any draft shall be presented for payment
under any Letter of Credit, the Issuing Lender shall promptly notify the
Borrower of the date and amount thereof. The responsibility of the Issuing
Lender to the Borrower in connection with any draft presented for payment under
any Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are substantially in conformity with such
Letter of Credit.
8 Applications. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of this
Section 3, the provisions of this Section 3 shall apply.
4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the Letters of
Credit, the Borrower hereby represents and warrants to the Administrative Agent
and each Lender that:
1 Financial Condition. (a) The unaudited pro forma consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at March 28, 1998
(including the notes
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thereto) (the "Pro Forma Balance Sheet"), copies of which have heretofore been
furnished to each Lender, has been prepared giving effect (as if such events
had occurred on such date) to (i) the consummation of the Refinancing, (ii) the
Loans to be made and the Senior Subordinated Notes to be issued on the Closing
Date and the use of proceeds thereof and (iii) the payment of fees and expenses
in connection with the foregoing. The Pro Forma Balance Sheet has been
prepared based upon good faith estimates and assumptions believed by management
of the Borrower to be reasonable as of the date of delivery thereof, and
presents fairly on a pro forma basis the estimated financial position of
Borrower and its consolidated Subsidiaries as at March 28, 1998, assuming that
the events specified in the preceding sentence had actually occurred at such
date.
(a) The audited consolidated balance sheets of the Borrower as at
December 28, 1996 and December 27, 1997, and the related audited consolidated
statements of income and of cash flows for the fiscal years ended on such dates
and the unaudited consolidating balance sheet of the Borrower as at December
27, 1997, and the related unaudited consolidating statement of income and of
cash flows for the fiscal year ended on such date, in each case, reported on,
in the case of the consolidated statements, by and accompanied by an
unqualified report from Arthur Andersen LLP, present fairly the consolidated
and consolidating financial condition of the Borrower as at such date, and the
consolidated and consolidating results of its operations and its consolidated
and consolidating cash flows for the respective fiscal years then ended. The
unaudited consolidated and consolidating balance sheets of the Borrower as at
March 28, 1998, and the related unaudited consolidated and consolidating
statements of income and cash flows for the thirteen-week period ended on such
date, present fairly the consolidated and consolidating financial condition of
the Borrower as at such date and the consolidated and consolidating results of
its operations and its consolidated and consolidating cash flows for the
thirteen-week period then ended (subject to normal year-end audit adjustments).
All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by the aforementioned firm
of accountants and disclosed therein). Except as set forth in Schedule 4.1(b),
the Borrower and its Subsidiaries do not have any material Guarantee
Obligations, contingent liabilities or liabilities for taxes, or any long-term
leases or unusual forward or long-term commitments, including, without
limitation, any interest rate or foreign currency swap or exchange transaction
or other obligation in respect of derivatives, that are not reflected in the
most recent financial statements referred to in this paragraph. During the
period from December 27, 1997 to and including the date hereof there has been
no Disposition by the Borrower of any material part of its business or
property.
2 No Change. Since December 27, 1997 there has been no development or
event that has had or could reasonably be expected to have a Material Adverse
Effect.
3 Corporate Existence; Compliance with Law. Each of the Borrower and its
Subsidiaries (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (b) has the corporate power
and authority, and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the
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business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification, except where the failure to be so qualified could
not reasonably be expected to have a Material Adverse Effect, and (d) is in
compliance with all Requirements of Law except to the extent that the failure
to comply therewith could not, in the aggregate, reasonably be expected to have
a Material Adverse Effect.
4 Corporate Power; Authorization; Enforceable Obligations. Each Loan
Party has the corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and, in the case
of the Borrower, to borrow hereunder. Each Loan Party has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Loan Documents to which it is a party and, in the case of the Borrower, to
authorize the borrowings on the terms and conditions of this Agreement. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the Refinancing and the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of this Agreement
or any of the Loan Documents, except (i) consents, authorizations, filings and
notices described in Schedule 4.4, which consents, authorizations, filings and
notices have been obtained or made and are in full force and effect and (ii)
the filings referred to in Section 4.19. Each Loan Document has been duly
executed and delivered on behalf of each Loan Party party thereto. This
Agreement constitutes, and each other Loan Document upon execution will
constitute, a legal, valid and binding obligation of each Loan Party party
thereto, enforceable against each such Loan Party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
5 No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof will not violate any
Requirement of Law or any Contractual Obligation of the Borrower or any of its
Subsidiaries and will not result in, or require, the creation or imposition of
any Lien on any of their respective properties or revenues pursuant to any
Requirement of Law or any such Contractual Obligation (other than the Liens
created by the Security Documents).
6 Litigation. Except as set forth on Schedule 4.6, no litigation,
investigation or proceeding of or before any arbitrator or Governmental
Authority is pending or, to the knowledge of the Borrower, threatened by or
against the Borrower or any of its Subsidiaries or against any of their
respective properties or revenues (a) with respect to any of the Loan Documents
or any of the transactions contemplated hereby or thereby, or (b) that could
reasonably be expected to have a Material Adverse Effect.
7 No Default. Neither the Borrower nor any of its Subsidiaries is in
default under or with respect to any of its Contractual Obligations in any
respect that could reasonably be
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expected to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
8 Ownership of Property; Liens. Each of the Borrower and its
Subsidiaries has title in fee simple to, or a valid leasehold interest in, all
its real property, and good title to, or a valid leasehold interest in, all its
other material property, and none of such property is subject to any Lien
except as permitted by Section 7.3.
9 Intellectual Property. The Borrower and each of its Subsidiaries owns,
or is licensed to use, all Intellectual Property necessary for the conduct of
its business as currently conducted. No material claim has been asserted and
is pending by any Person challenging or questioning the use of any Intellectual
Property or the validity or effectiveness of any Intellectual Property, nor
does the Borrower know of any valid basis for any such claim. To the knowledge
of the Borrower, the use of Intellectual Property by the Borrower and its
Subsidiaries does not infringe on the rights of any Person in any material
respect.
10 Taxes. Each of the Borrower and each of its Subsidiaries has filed or
caused to be filed all Federal, state and other material tax returns that are
required to be filed and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any of its property and all
other taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (in each case, other than any the amount or validity of
which are currently being contested in good faith by appropriate proceedings
and with respect to which reserves in conformity with GAAP have been provided
on the books of the Borrower or its Subsidiaries, as the case may be); no tax
Lien has been filed, and, to the knowledge of the Borrower, no claim is being
asserted, with respect to any such tax, fee or other charge.
11 Federal Regulations. No part of the proceeds of any Loans will be used
for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U as now and from time to
time hereafter in effect or for any purpose that violates the provisions of the
Regulations of the Board. If requested by any Lender or the Administrative
Agent, the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR
Form U-1 referred to in Regulation U.
12 Labor Matters. Except as, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect: (a) there are no strikes or other
labor disputes against the Borrower or any of its Subsidiaries pending or, to
the knowledge of the Borrower, threatened; (b) hours worked by and payment made
to employees of the Borrower and its Subsidiaries have not been in violation of
the Fair Labor Standards Act or any other applicable Requirement of Law dealing
with such matters; (c) all payments due from the Borrower or any of its
Subsidiaries on account of employee health and welfare insurance have been paid
or accrued as a liability on the books of the Borrower or the relevant
Subsidiary.
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13 ERISA. Except as set forth on Schedule 4.13, neither a Reportable
Event nor an "accumulated funding deficiency" (within the meaning of Section
412 of the Code or Section 302 of ERISA) has occurred during the five-year
period prior to the date on which this representation is made or deemed made
with respect to any Plan, and each Plan has complied in all material respects
with the applicable provisions of ERISA and the Code. Except as set forth on
Schedule 4.13, no termination of a Single Employer Plan has occurred, and no
Lien in favor of the PBGC or a Plan has arisen, during such five-year period.
The present value of all accrued benefits under each Single Employer Plan
(based on those assumptions used to fund such Plans) did not, as of the last
annual valuation date prior to the date on which this representation is made or
deemed made, exceed the value of the assets of such Plan allocable to such
accrued benefits by a material amount. Neither the Borrower nor any Commonly
Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan that has resulted or could reasonably be expected to result
in a material liability under ERISA, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any material liability under ERISA if
the Borrower or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding
the date on which this representation is made or deemed made. No such
Multiemployer Plan is in Reorganization or Insolvent.
14 Investment Company Act; Other Regulations. No Loan Party is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law that limits its
ability to incur Indebtedness.
15 Subsidiaries. The Subsidiaries listed on Schedule 4.15 constitute all
the Subsidiaries of the Borrower at the date hereof.
16 Use of Proceeds. The proceeds of the Revolving Loans and the
Swingline Loans, and the Letters of Credit, shall be used to refinance the
Existing Credit Agreement, to finance working capital needs and for general
corporate purposes (including Permitted Acquisitions).
17 Environmental Matters. Except as, in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect and except as set
forth on Schedule 4.17:
(a) the facilities and properties owned, leased or operated by the
Borrower or any of its Subsidiaries (the "Properties") do not contain,
and have not previously contained, any Materials of Environmental Concern
in amounts or concentrations or under circumstances that constitute or
constituted a violation of, or could give rise to liability under, any
Environmental Law;
(b) neither the Borrower nor any of its Subsidiaries has received
or is aware of any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental
matters or compliance with Environmental Laws with regard to
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any of the Properties or the business operated by the Borrower or any of
its Subsidiaries (the "Business"), nor does the Borrower have knowledge
or reason to believe that any such notice will be received or is being
threatened;
(c) Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or in a manner or to a
location that could give rise to liability under, any Environmental Law,
nor have any Materials of Environmental Concern been generated, treated,
stored or disposed of at, on or under any of the Properties in violation
of, or in a manner that could give rise to liability under, any
applicable Environmental Law;
(d) no judicial proceeding or governmental or administrative action
is pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary is or will be
named as a party with respect to the Properties or the Business, nor are
there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with
respect to the Properties or the Business;
(e) there has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or
related to the operations of the Borrower or any Subsidiary in connection
with the Properties or otherwise in connection with the Business, in
violation of or in amounts or in a manner that could give rise to
liability under Environmental Laws;
(f) the Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, with all
applicable Environmental Laws; and
(g) neither the Borrower nor any of its Subsidiaries has assumed
any liability of any other Person under Environmental Laws.
18 Accuracy of Information, etc. No statement or information contained
in this Agreement, any other Loan Document, the Confidential Information
Memorandum or any other document, certificate or statement furnished to the
Administrative Agent or the Lenders or any of them, by or on behalf of any Loan
Party for use in connection with the transactions contemplated by this
Agreement or the other Loan Documents, contained as of the date such statement,
information, document or certificate was so furnished (or, in the case of the
Confidential Information Memorandum, as of the Closing Date), any untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements contained herein or therein not misleading. The
projections and pro forma financial information contained in the materials
referenced above are based upon good faith estimates and assumptions believed
by management of the Borrower to be reasonable at the time made, it being
recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual
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results during the period or periods covered by such financial information may
differ from the projected results set forth therein by a material amount.
19 Security Documents. (a) The Guarantee and Collateral Agreement is
effective to create in favor of the Administrative Agent, for the benefit of
the Lenders, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof. In the case of the Pledged Stock
described in the Guarantee and Collateral Agreement, when stock certificates
representing such Pledged Stock are delivered to the Administrative Agent, and
in the case of the other Collateral described in the Guarantee and Collateral
Agreement, when financing statements in appropriate form are filed in the
offices specified on Schedule 4.19(a), the Guarantee and Collateral Agreement
shall constitute a fully perfected Lien on, and security interest in, all
right, title and interest of the Loan Parties in such Collateral and the
proceeds thereof, as security for the Obligations (as defined in the Guarantee
and Collateral Agreement), in each case prior and superior in right to any
other Person other than the holders of the Liens permitted pursuant to Section
7.3.
(a) Each of the Mortgages is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable Lien on the Mortgaged Properties described therein and proceeds
thereof, and when the Mortgages are filed in the offices specified on Schedule
4.19(b), each such Mortgage shall constitute a legal, valid and enforceable
Lien on, and security interest in, all right, title and interest of the Loan
Parties in the Mortgaged Properties and the proceeds thereof, as security for
the Obligations (as defined in the relevant Mortgage), in each case prior and
superior in right to any other Person other than the holders of the Liens
permitted with respect to such Mortgaged Properties pursuant to Section 7.3.
20 Solvency. Each Loan Party is, and after giving effect to the
Refinancing and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and will continue to be,
Solvent.
21 Senior Indebtedness. The Obligations constitute "Senior Indebtedness"
of the Borrower under and as defined in the Senior Subordinated Note Indenture.
The obligations of each Subsidiary Guarantor under the Guarantee and
Collateral Agreement constitute "Guarantor Senior Indebtedness" of such
Subsidiary Guarantor under and as defined in the Senior Subordinated Note
Indenture.
22 Year 2000 Matters. Any reprogramming reasonably foreseen to be
necessary in accordance with customary business practices to permit the proper
functioning (but only to the extent that such proper functioning would
otherwise be impaired by the occurrence of the year 2000) in and following the
year 2000 of computer systems and other equipment containing embedded
microchips, in either case owned or operated by the Borrower or any of its
Subsidiaries and the testing of all such systems and other equipment as so
reprogrammed, will be completed by June 30, 1999 (or September 30, 1999 in the
case of Tamor Corporation). The Borrower will make reasonable inquiry of all
Persons the computer systems of which interface with the Borrower's computer
systems (other than those of any Lender or any immaterial
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customer or vendor) with regard to such Person's year 2000 compliance. The
Borrower does not have actual knowledge that any of such Persons will not be
year 2000 compliant. The Borrower does not have any actual knowledge that the
reasonably anticipated remaining costs to the Borrower and its Subsidiaries for
such reprogramming and testing and for the other reasonably foreseeable
consequences to them of any improper functioning of other computer systems and
equipment containing embedded microchips due to the occurrence of the year 2000
could result in a Default or Event of Default or to have a Material Adverse
Effect. Except for any reprogramming referred to above, the computer systems
of the Borrower and its Subsidiaries are and, with ordinary course upgrading
and maintenance, will continue for the term of this Agreement to be, sufficient
for the conduct of their business as currently conducted. The Borrower does
not make any representations other than as set forth above about any other
Person's year 2000 compliance.
23 Regulation H. No Mortgage encumbers improved real property that is
located in an area that has been identified by the Secretary of Housing and
Urban Development as an area having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance Act of
1968.
5. CONDITIONS PRECEDENT
1 Conditions to Initial Extension of Credit. The agreement of each
Lender to make the initial extension of credit requested to be made by it is
subject to the satisfaction, prior to or concurrently with the making of such
extension of credit on the Closing Date, of the following conditions precedent:
(a) Credit Agreement; Guarantee and Collateral Agreement. The
Administrative Agent shall have received (i) this Agreement, executed and
delivered by a duly authorized officer of the Borrower and (ii) the
Guarantee and Collateral Agreement, executed and delivered by a duly
authorized officer of the Borrower and each Subsidiary Guarantor.
(b) Refinancing. The following transactions shall have been
consummated, in each case on terms and conditions reasonably satisfactory
to the Lenders (such events, collectively, the "Refinancing"):
(i) all amounts owing under the Amended and Restated Credit
Agreement, dated as of December 30, 1997 (the "Existing Credit
Agreement"), among Selfix, Inc., Tamor Corporation, Shutters, Inc.
and Seymour Housewares Corporation, as borrowers, the other credit
parties signatory thereto, the lenders from time to time signatory
thereto and General Electric Capital Corporation, as agent, shall
have been repaid in full contemporaneously with the drawing of the
Loans on the Closing Date, the Existing Credit Agreement and all
documents executed in connection therewith shall have been
terminated and the liens securing the obligations under the
Existing Credit Agreement shall have been
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terminated pursuant to documentation in form and substance
satisfactory to the Administrative Agent;
(ii) the Subordinated Notes (as defined in the Existing
Credit Agreement) shall have been repaid in full contemporaneously
with the drawing of the Loans on the Closing Date; and
(iii) the Borrower shall have received at least $125,000,000
in gross cash proceeds from the issuance of the Senior Subordinated
Notes on terms and conditions satisfactory to the Lenders.
(c) Pro Forma Balance Sheet; Financial Statements. The Lenders
shall have received (i) the Pro Forma Balance Sheet, (ii) audited
consolidated and unaudited consolidating financial statements of the
Borrower for the 1996 and 1997 fiscal years and (iii) unaudited interim
consolidated financial statements of the Borrower for each fiscal
quarterly period ended subsequent to the date of the latest applicable
financial statements delivered pursuant to clause (ii) of this paragraph
as to which such financial statements are available, and such financial
statements shall not, in the reasonable judgment of the Lenders, reflect
any material adverse change in the consolidated financial condition of
the Borrower, as reflected in the financial statements or projections
contained in the Confidential Information Memorandum.
(d) Approvals. All governmental and third party approvals
(including landlords' and other consents) necessary or, in the discretion
of the Administrative Agent, advisable in connection with the
Refinancing, the continuing operations of the Borrower and its
Subsidiaries and the transactions contemplated hereby shall have been
obtained and be in full force and effect, and all applicable waiting
periods shall have expired without any action being taken or threatened
by any competent authority that would restrain, prevent or otherwise
impose adverse conditions on the Refinancing or the financing
contemplated hereby.
(e) Lien Searches. The Administrative Agent shall have received
the results of a recent lien search in each of the jurisdictions where
assets of the Loan Parties are located, and such search shall reveal no
liens on any of the assets of the Borrower or its Subsidiaries except for
liens permitted by Section 7.3.
(f) Environmental Audit. The Administrative Agent shall have
received a reasonably satisfactory environmental audit with respect to
the real properties of the Borrower and its Subsidiaries specified by the
Administrative Agent.
(g) Closing Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of each Loan
Party, dated the Closing Date, substantially in the form of Exhibit C,
with appropriate insertions and attachments.
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(h) Legal Opinions. The Administrative Agent shall have received
the following executed legal opinions:
(i) the legal opinion of Sonnenschein Nath & Rosenthal,
counsel to the Borrower and its Subsidiaries, substantially in the
form of Exhibit F; and
ii) the legal opinion of local counsel in each jurisdiction
where a Mortgaged Property is located and of such other special and
local counsel, in each case, as may be required by the
Administrative Agent.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent
may reasonably require.
(i) Pledged Stock; Stock Powers. The Administrative Agent shall
have received the certificates representing the shares of Capital Stock
pledged pursuant to the Guarantee and Collateral Agreement, together with
an undated stock power for each such certificate executed in blank by a
duly authorized officer of the pledgor thereof.
(j) Filings, Registrations and Recordings. Each document
(including, without limitation, any Uniform Commercial Code financing
statement) required by the Security Documents or under law or reasonably
requested by the Administrative Agent to be filed, registered or recorded
in order to create in favor of the Administrative Agent, for the benefit
of the Lenders, a perfected Lien on the Collateral described therein,
prior and superior in right to any other Person (other than with respect
to Liens expressly permitted by Section 7.3), shall be in proper form for
filing, registration or recordation.
(k) Mortgages, etc. (i) The Administrative Agent shall have
received a Mortgage with respect to each Mortgaged Property, executed and
delivered by a duly authorized officer of each party thereto.
(ii) If requested by the Administrative Agent, the
Administrative Agent shall have received, and the title insurance
company issuing the policy referred to in clause (iii) below (the
"Title Insurance Company") shall have received, maps or plats of an
as-built survey of the sites of the Mortgaged Properties certified
to the Administrative Agent (if the Administrative Agent determines
such certification to it is reasonably practicable) and the Title
Insurance Company in a manner satisfactory to them, dated a date
satisfactory to the Administrative Agent and the Title Insurance
Company by an independent professional licensed land surveyor
satisfactory to the Administrative Agent and the Title Insurance
Company, which maps or plats and the surveys on which they are
based shall be made in accordance with the Minimum Standard Detail
Requirements for Land Title Surveys jointly established and adopted
by the American Land Title Association and the American Congress on
Surveying and Mapping in 1992, and, without limiting the generality
of the foregoing, there shall be surveyed and shown on
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such maps, plats or surveys the following: (A) the locations on
such sites of all the buildings, structures and other improvements
and the established building setback lines; (B) the lines of
streets abutting the sites and width thereof; (C) all access and
other easements appurtenant to the sites; (D) all roadways, paths,
driveways, easements, encroachments and overhanging projections and
similar encumbrances affecting the site, whether recorded, apparent
from a physical inspection of the sites or otherwise known to the
surveyor; (E) any encroachments on any adjoining property by the
building structures and improvements on the sites; (F) if the site
is described as being on a filed map, a legend relating the survey
to said map; and (G) the flood zone designations, if any, in which
the Mortgaged Properties are located.
(iii) The Administrative Agent shall have received in respect
of each Mortgaged Property a mortgagee's title insurance policy (or
policies) or marked up unconditional binder for such insurance.
Each such policy shall (A) be in an amount satisfactory to the
Administrative Agent; (B) be issued at ordinary rates; (C) insure
that the Mortgage insured thereby creates a valid first Lien on
such Mortgaged Property free and clear of all defects and
encumbrances, except as disclosed therein; (D) name the
Administrative Agent for the benefit of the Lenders as the insured
thereunder; (E) be in the form of ALTA Loan Policy - 1970 (Amended
10/17/70 and 10/17/84) (or equivalent policies); (F) contain such
endorsements and affirmative coverage as the Administrative Agent
may reasonably request and (G) be issued by title companies
satisfactory to the Administrative Agent (including any such title
companies acting as co-insurers or reinsurers, at the option of the
Administrative Agent). The Administrative Agent shall have
received evidence satisfactory to it that all premiums in respect
of each such policy, all charges for mortgage recording tax, and
all related expenses, if any, have been paid.
(iv) If requested by the Administrative Agent, the
Administrative Agent shall have received (A) a policy of flood
insurance that (1) covers any parcel of improved real property that
is encumbered by any Mortgage, (2) is written in an amount not less
than the outstanding principal amount of the indebtedness secured
by such Mortgage that is reasonably allocable to such real property
or the maximum limit of coverage made available with respect to the
particular type of property under the National Flood Insurance Act
of 1968, whichever is less, and (3) has a term ending not later
than the maturity of the Indebtedness secured by such Mortgage and
(B) confirmation that the Borrower has received the notice required
pursuant to Section 208(e)(3) of Regulation H of the Board.
(v) The Administrative Agent shall have received a copy of
all recorded documents referred to, or listed as exceptions to
title in, the title policy or policies referred to in clause (iii)
above and a copy of all other material documents affecting the
Mortgaged Properties.
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(1) Fees. The Lenders and the Administrative Agent shall have
received all fees required to be paid, and all expenses for which
invoices have been presented, on or before the Closing Date.
2 Conditions to Each Extension of Credit. The agreement of each Lender
to make any extension of credit requested to be made by it on any date
(including, without limitation, its initial extension of credit) is subject to
the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations
and warranties made by any Loan Party in or pursuant to the Loan
Documents shall be true and correct in all material respects on and as of
such date as if made on and as of such date except to the extent any such
representation or warranty relates specifically to an earlier date, in
which case such representation or warranty shall be true and correct in
all material respects on and as of such earlier date.
(b) No Default. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the extensions
of credit requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Revolving Commitments
remain in effect, any Letter of Credit remains outstanding or any Loan or other
amount is owing to any Lender or the Administrative Agent hereunder, the
Borrower shall and shall cause each of its Subsidiaries to:
1 Financial Statements. Furnish to the Administrative Agent and each
Lender:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Borrower, a copy of the audited
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related audited
consolidated statements of income and of cash flows for such year,
setting forth in each case in comparative form the figures for the
previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope of
the audit, by Arthur Andersen LLP or other independent certified public
accountants of nationally recognized standing; and
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(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such quarter
and the related unaudited consolidated statements of income and of cash
flows for such quarter and the portion of the fiscal year through the end
of such quarter, setting forth in each case in comparative form the
figures for the previous year, certified by a Responsible Officer as
being fairly stated in all material respects (subject to normal year-end
audit adjustments).
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
2 Certificates; Other Information. Furnish to the Administrative Agent
and each Lender (or, in the case of clause (f), to the relevant Lender):
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent certified
public accountants reporting on such financial statements stating that in
making the examination necessary therefor no knowledge was obtained of
any Default or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer
stating that such Responsible Officer has obtained no knowledge of any
Default or Event of Default during the period covered by such financial
statements except as specified in such certificate (including, in the
case of any such Default or Event of Default, an explanation of the
proposed actions the Borrower intends to take with respect thereto), (ii)
a Compliance Certificate containing all information necessary for
determining compliance by the Borrower and its Subsidiaries with the
provisions of this Agreement referred to therein as of the last day of
the fiscal quarter or fiscal year of the Borrower, as the case may be,
(iii) to the extent not previously disclosed to the Administrative Agent,
a listing of the locations within the United States as to which UCC
financing statements in favor of the Administrative Agent have not been
filed and in which any Loan Party keeps inventory or equipment with an
aggregate value for all such locations and all such Loan Parties in
excess of $500,000, (iv) in the case of annual financial statements, a
report of all Intellectual Property owned by any Loan Party and (v) in
the case of quarterly financial statements, a report of any material
Intellectual Property acquired by any Loan Party since the date of the
most recent list delivered pursuant to this clause (v) (or, in the case
of the first such list so delivered, since the Closing Date);
(c) as soon as available, and in any event no later than 45 days
after the end of each fiscal year of the Borrower, a detailed
consolidated budget for the following fiscal
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year (including a projected consolidated balance sheet of the Borrower
and its Subsidiaries as of the end of the following fiscal year, and the
related consolidated statements of projected cash flow, projected changes
in financial position and projected income and a statement and
explanation of the principal assumptions underlying such projections),
and, as soon as available, significant revisions, if any, of such budget
and projections with respect to such fiscal year (collectively, the
"Projections"), which Projections shall in each case be accompanied by a
certificate of a Responsible Officer stating that such Projections are
based on reasonable estimates, information and assumptions and that such
Responsible Officer has no reason to believe that such Projections are
incorrect or misleading in any material respect;
(d) no later than 10 Business Days prior to the effectiveness
thereof, copies of substantially final drafts of any proposed amendment,
supplement, waiver or other modification with respect to the Senior
Subordinated Note Indenture (other than any such amendments or
supplements which are administrative or corrective in nature, in which
case final copies of which shall be delivered within five days after the
effectiveness thereof);
(e) within five days after the same are sent, copies of all
financial statements and reports that the Borrower sends to the holders
of any class of its debt securities or public equity securities and,
promptly after the same are filed, copies of all financial statements and
reports that the Borrower may make to, or file with, the Securities and
Exchange Commission or any successor or analogous Governmental Authority;
and
(f) promptly, such additional financial and other information as
any Lender may from time to time reasonably request.
3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrower or its Subsidiaries, as the case may be.
4 Maintenance of Existence; Compliance. (a) (i) Continue to engage
in business of the same general type as now conducted by it, (ii) preserve,
renew and keep in full force and effect its corporate existence and (iii) take
all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business, except, in each
case, as otherwise permitted by Section 7.4 or in connection with the
dissolution of any Subsidiary with de minimis assets and except, in the case of
clause (iii) above, to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (b) comply with all
Contractual Obligations and Requirements of Law except to the extent that
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.
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5 Maintenance of Property; Insurance. (a) Keep all property useful and
necessary in its business in good working order and condition, ordinary wear
and tear excepted and (b) maintain with financially sound and reputable
insurance companies insurance on all its property in at least such amounts and
against at least such risks (but including in any event public liability,
product liability and business interruption) as are usually insured against in
the same general area by companies engaged in the same or a similar business.
6 Inspection of Property; Books and Records; Discussions. (a) Keep
proper books of records and account in which proper entries in conformity with
GAAP and all Requirements of Law shall be made of all dealings and transactions
in relation to its business and activities and (b) permit, upon two Business
Days' prior notice to the chief financial officer or other Responsible Officer
of the Borrower (except when a Default or Event of Default has occurred and is
continuing, in which case, no notice shall be required), representatives of the
Administrative Agent or any Lender to visit and inspect any of its properties
and examine and make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be desired and to discuss the
business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and with its independent certified public accountants;
provided that all such visits and inspections shall be coordinated through the
Administrative Agent; provided, further, that such visits and inspections (i)
shall be at the expense of the Borrower (A) upon the occurrence and during the
continuance of an Event of Default and (B) in respect of up to two visits a
year by the Administrative Agent and (ii) shall otherwise be at the expense of
the Administrative Agent or the relevant Lender, as the case may be.
7 Notices. Promptly give notice to the Administrative Agent and each
Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii) litigation,
investigation or proceeding that may exist at any time between the
Borrower or any of its Subsidiaries and any Governmental Authority, that
in either case, if not cured or if adversely determined, as the case may
be, could reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any of
its Subsidiaries in which the amount involved is $1,000,000 or more and
not believed by the Borrower to be covered by insurance or in which
injunctive or similar relief is sought;
(d) (i) any release or discharge by the Borrower or any Subsidiary
of any Materials of Environmental Concern required to be reported under
Environmental Laws to any Governmental Authority; (ii) any condition,
circumstance, occurrence or event that could result in a material
liability under Environmental Laws or could result in the imposition of
any lien or other restriction on the title, ownership or transferability
of any Property; and (iii) any proposed action to be taken by the
Borrower or any Subsidiary that
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could subject the Borrower or any Subsidiary to any additional or
different requirements or liabilities under Environmental Law that could
reasonably be expected to result in a Material Adverse Effect;
(e) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof:
(i) the occurrence of any Reportable Event with respect to any Plan, a
failure to make any required contribution to a Plan, the creation of any
Lien in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action by
the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
termination, Reorganization or Insolvency of, any Plan; and
(f) any development or event that has had or could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower or the relevant Subsidiary
proposes to take with respect thereto.
8 Environmental Laws. Except as could not in the aggregate reasonably be
expected to result in a Material Adverse Effect:
(a) comply with, and use reasonable efforts to ensure compliance by
all tenants and subtenants, if any, with, all applicable Environmental
Laws, and obtain and comply with and maintain, and use reasonable efforts
to ensure that all tenants and subtenants obtain and comply with and
maintain, any and all licenses, approvals, notifications, registrations
or permits required by applicable Environmental Laws; and
(b) conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and
directives of all Governmental Authorities regarding Environmental Laws.
9 Additional Collateral, etc. (a) With respect to any property acquired
after the Closing Date by the Borrower or any of its Subsidiaries (other than
(x) any property described in paragraph (b), (c) or (d) below and (y) any
property subject to a Lien expressly permitted by Section 7.3(g) or 7.3(i)) as
to which the Administrative Agent, for the benefit of the Lenders, does not
have a perfected Lien, promptly (i) execute and deliver to the Administrative
Agent such amendments to the Guarantee and Collateral Agreement or such other
documents as the Administrative Agent deems necessary or reasonably advisable
to grant to the Administrative Agent, for the benefit of the Lenders, a
security interest in such property and (ii) take all actions necessary or
reasonably advisable to grant to the Administrative Agent, for the benefit of
the Lenders, a perfected first priority security interest in such property,
subject to the Liens permitted
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pursuant to Section 7.3, including without limitation, the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be required
by the Guarantee and Collateral Agreement or by law or as may otherwise be
reasonably requested by the Administrative Agent.
(a) With respect to any fee interest in any real property having a value
(together with improvements thereof) of at least $1,000,000 acquired after the
Closing Date by the Borrower or any of its Subsidiaries (other than any such
real property subject to a Lien expressly permitted by Section 7.3(g) or
7.3(i)), promptly (i) execute and deliver a first priority Mortgage, subject to
the Liens permitted pursuant to Section 7.3, in favor of the Administrative
Agent, for the benefit of the Lenders, covering such real property, (ii) if
requested by the Administrative Agent, provide the Lenders with (x) title and
extended coverage insurance covering such real property in an amount at least
equal to the purchase price of such real property (or such other amount as
shall be reasonably specified by the Administrative Agent) as well as, to the
extent reasonably practicable in the judgment of the Administrative Agent, a
current ALTA survey thereof, together with a surveyor's certificate and (y) any
consents or estoppels reasonably deemed necessary or advisable by the
Administrative Agent in connection with such mortgage or deed of trust, each of
the foregoing in form and substance reasonably satisfactory to the
Administrative Agent and (iii) if requested by the Administrative Agent,
deliver to the Administrative Agent legal opinions relating to the matters
described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.
(b) With respect to any new Subsidiary (other than an Excluded Foreign
Subsidiary) created or acquired after the Closing Date by the Borrower (which,
for the purposes of this paragraph (c), shall include any existing Subsidiary
that ceases to be an Excluded Foreign Subsidiary), the Borrower or any of its
Subsidiaries, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative
Agent deems necessary or advisable to grant to the Administrative Agent, for
the benefit of the Lenders, a perfected first priority security interest in the
Capital Stock of such new Subsidiary that is owned by the Borrower or any of
its Subsidiaries, (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of the Borrower or such
Subsidiary, as the case may be, (iii) cause such new Subsidiary (A) to become a
party to the Guarantee and Collateral Agreement and (B) to take such actions
necessary or reasonably advisable to grant to the Administrative Agent for the
benefit of the Lenders a perfected first priority security interest, subject to
the Liens permitted pursuant to Section 7.3, in the Collateral described in the
Guarantee and Collateral Agreement with respect to such new Subsidiary,
including, without limitation, the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be required by the Guarantee and
Collateral Agreement or by law or as may be requested by the Administrative
Agent, and (iv) if reasonably requested by the Administrative Agent, deliver to
the Administrative Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
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(c) With respect to any new Excluded Foreign Subsidiary created or
acquired after the Closing Date by the Borrower or any of its Subsidiaries,
promptly (i) execute and deliver to the Administrative Agent such amendments to
the Guarantee and Collateral Agreement as the Administrative Agent deems
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Lenders, a perfected first priority security interest in the Capital Stock
of such new Subsidiary that is owned by the Borrower or any of its Subsidiaries
(provided that in no event shall more than 65% of the total outstanding Capital
Stock of any such new Subsidiary be required to be so pledged or, following any
change in applicable law, such greater or lesser percentage which would not
result in adverse tax consequences), (ii) deliver to the Administrative Agent
the certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
Borrower or such Subsidiary, as the case may be, and take such other action as
may be necessary or, in the opinion of the Administrative Agent, desirable to
perfect the Administrative Agent's security interest therein, and (iii) if
reasonably requested by the Administrative Agent, deliver to the Administrative
Agent legal opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to
the Administrative Agent.
7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Revolving Commitments
remain in effect, any Letter of Credit remains outstanding or any Loan or other
amount is owing to any Lender or the Administrative Agent hereunder, the
Borrower shall not, and shall not permit any of its Subsidiaries to, directly
or indirectly:
1 Financial Condition Covenants.
(a) Consolidated Total Leverage Ratio. Permit the Consolidated Total
Leverage Ratio as at the last day of any period of four consecutive fiscal
quarters of the Borrower ending on or about any date occurring during the
periods set forth below to exceed the ratio set forth below opposite such
period:
Consolidated Total
Period Leverage Ratio
----------------------------------------------- --------------------
June 30, 1998 - June 30, 1999 5.75 to 1.00
September 30, 1999 - June 30, 2000 5.50 to 1.00
September 30, 2000 - June 30, 2001 5.25 to 1.00
September 30, 2001 - June 30, 2002 5.00 to 1.00
September 30, 2002 - Revolving Termination Date 4.75 to 1.00
(b) Consolidated Senior Leverage Ratio. Permit the Consolidated Senior
Leverage Ratio as at the last day of any period of four consecutive fiscal
quarters of the Borrower
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ending on or about any date occurring during the periods set forth below to
exceed the ratio set forth below opposite such period:
Consolidated Senior
Period Leverage Ratio
----------------------------------------------- ---------------------
June 30, 1998 - June 30, 2000 3.00 to 1.00
September 30, 2000 - June 30, 2002 2.75 to 1.00
September 30, 2002 - Revolving Termination Date 2.50 to 1.00
(c) Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio for any period of four consecutive fiscal quarters of
the Borrower ending on or about any date occurring during the periods set forth
below to be less than the ratio set forth below opposite such period:
Consolidated Interest
Period Coverage Ratio
----------------------------------------------- -----------------------
June 30, 1998 - June 30, 1999 1.75 to 1.00
September 30, 1999 - June 30, 2001 2.00 to 1.00
September 30, 2001 - June 30, 2002 2.25 to 1.00
September 30, 2002 - Revolving Termination Date 2.50 to 1.00
2 Indebtedness and Preferred Stock. Create, incur, assume or suffer to
exist (in each case, to "Incur") any Indebtedness or issue any Preferred Stock,
except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
(b) Indebtedness of the Borrower to any Subsidiary and of any
Wholly Owned Subsidiary Guarantor to the Borrower or any other
Subsidiary;
(c) Indebtedness incurred to finance, contemporaneously therewith,
the acquisition of fixed or capital assets and Capital Lease Obligations
in an aggregate principal amount not to exceed $7,500,000 at any one time
outstanding;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 7.2(d) and any refinancings, refundings, renewals or extensions
thereof (without increasing, or shortening the maturity of, the principal
amount thereof);
(e) Guarantee Obligations Incurred in the ordinary course of
business by the Borrower or any of its Subsidiaries of obligations of any
Wholly Owned Subsidiary Guarantor;
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(f) (i) Indebtedness of the Borrower in respect of the Senior
Subordinated Notes in an aggregate principal amount not to exceed
$125,000,000 and (ii) Guarantee Obligations of any Subsidiary Guarantor
in respect of such Indebtedness, provided that such Guarantee Obligations
are subordinated to the same extent as the obligations of the Borrower in
respect of the Senior Subordinated Notes;
(g) Indebtedness of the Borrower or any of its Subsidiaries
Incurred to finance the Purchase Price of any Permitted Acquisition
permitted by Section 7.8(g) (including, without limitation any assumed
Indebtedness or any Indebtedness of a Subsidiary acquired in any such
Permitted Acquisition so long as the Borrower complies with the
provisions of Section 6.9(c)), in an aggregate principal amount (for the
Borrower and all Subsidiaries) not to exceed $7,500,000 at any one time
outstanding, provided that such Indebtedness is Incurred substantially
simultaneously with such Permitted Acquisition;
(h) the Borrower may issue Preferred Stock so long as such
Preferred Stock is not mandatorily redeemable by the Borrower and is not
convertible into debt obligations of the Borrower or any of its
Subsidiaries, in each case, during the term of this Agreement, the
dividends payable with respect thereto would not be in violation of
Section 7.9, and is otherwise on terms and conditions satisfactory to the
Administrative Agent; and
(i) additional Indebtedness of the Borrower or any of its
Subsidiaries in an aggregate principal amount (for the Borrower and all
Subsidiaries) not to exceed $5,000,000 at any one time outstanding.
3 Liens. Create, incur, assume or suffer to exist any Lien upon any of
its property or revenues, whether now owned or hereafter acquired, except for:
(a) Liens for taxes, assessments and other governmental charges not
yet due or that are being contested in good faith by appropriate
proceedings, provided that adequate reserves with respect thereto are
maintained on the books of the Borrower or its Subsidiaries, as the case
may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business that, in the aggregate, are not substantial in amount and that
do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of the Borrower or any of its Subsidiaries;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance, social security and other similar legislation;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
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(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business that, in the
aggregate, are not substantial in amount and that do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule
7.3(f), securing Indebtedness permitted by Section 7.2(d), provided that
no such Lien is spread to cover any additional property after the Closing
Date and that the principal amount of Indebtedness secured thereby is not
increased;
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 7.2(c) (and Liens associated with
any immaterial intangibles related to the assets financed with such
Indebtedness), provided that (i) such Liens shall be created
substantially simultaneously with the acquisition or lease of the assets
financed thereby, (ii) such Liens do not at any time encumber any
property other than the property financed by such Indebtedness and (iii)
the principal amount of Indebtedness secured thereby is not increased;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered into
by the Borrower or any other Subsidiary in the ordinary course of its
business and covering only the assets so leased;
(j) deposits of money securing statutory obligations of the
Borrower or any Subsidiary;
(k) Liens arising by reason of any judgment, decree or order of any
court or other Governmental Authority, if appropriate legal proceedings
which may have been duly initiated for the review of such judgment,
decree or order, are being diligently prosecuted and shall not have been
finally terminated or the period within which such proceedings may be
initiated shall not have expired and the amount of all such judgments,
decrees and orders are in an aggregate amount not to exceed $1,000,000 at
any one time outstanding;
(l) deposits securing, or in lieu of, surety, appeal or customs
bonds in proceedings to which the Borrower or any Subsidiary is a party;
(m) cash deposits to secure the performance of the Borrower under
any hedging agreements with respect to resin in the ordinary course of
business for legitimate hedging purposes; and
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(n) Liens not otherwise permitted by this Section 7.3 so long as
the aggregate outstanding principal amount of the obligations secured
thereby does not exceed (as to the Borrower and all Subsidiaries)
$2,500,000 at any one time.
4 Fundamental Changes. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of, all or substantially all of its
property or business, except:
(a) any Subsidiary of the Borrower may be merged or consolidated
with or into the Borrower (provided that the Borrower shall be the
continuing or surviving corporation) or with or into any Wholly Owned
Subsidiary Guarantor or into any Person which contemporaneously with such
merger or consolidation is to become a Wholly Owned Subsidiary Guarantor
(provided that the Wholly Owned Subsidiary Guarantor shall be the
continuing or surviving corporation); and
(b) any Subsidiary of the Borrower may Dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or any
Wholly Owned Subsidiary Guarantor or to the extent permitted by Section
7.5.
5 Disposition of Property. Dispose of any of its property (including,
without limitation, receivables and leasehold interests), whether now owned or
hereafter acquired, or, in the case of any Subsidiary, issue or sell any shares
of such Subsidiary's Capital Stock to any Person, except:
(a) the Disposition of obsolete or worn out property in the
ordinary course of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Section 7.4(b);
(d) the sale or issuance of any Subsidiary's Capital Stock to the
Borrower or any Wholly Owned Subsidiary Guarantor;
(e) the Dispositions set forth on Schedule 7.5; and
(f) the Disposition of other property having a fair market value
not to exceed $10,000,000 in the aggregate during the term of this
Agreement.
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6 Restricted Payments. Declare or pay any dividend (other than dividends
payable solely in common stock of the Person making such dividend) on, or make
any payment on account of, or set apart assets for a sinking or other analogous
fund for, the purchase, redemption, defeasance, retirement or other acquisition
of, any Capital Stock of the Borrower or any Subsidiary, whether now or
hereafter outstanding, or make any other distribution in respect thereof,
either directly or indirectly, whether in cash or property or in obligations of
the Borrower or any Subsidiary (collectively, "Restricted Payments"); provided,
that (i) any Subsidiary may make Restricted Payments to the Borrower or any
Wholly Owned Subsidiary Guarantor, (ii) the Borrower may repurchase shares of
its common stock or rights, options or units in respect thereof, from its
officers and directors for an aggregate purchase price not to exceed $1,000,000
in any fiscal year, (iii) so long as no Default or Event of Default has
occurred and is continuing, the Borrower may, at any time after January 1,
1999, otherwise repurchase shares of its common stock so long as (A) there are
no Revolving Extensions of Credit outstanding at the time of such repurchase
(other than outstanding L/C Obligations which have not become Reimbursement
Obligations) and (B) after giving effect to such repurchase, Consolidated Net
Worth at such time shall be an amount at least equal to the sum of (x)
$52,000,000, (y) the aggregate amount of any Preferred Stock permitted to be
issued pursuant to Section 7.2(h) which has been issued prior to the date of
such repurchase and (z) 25% of the cumulative amount of any Consolidated Net
Income since the Closing Date reflected on the financial statements of the
Borrower which have been delivered pursuant to Section 6.1(a) on or prior to
the date of such repurchase and (iv) so long as no Default or Event of Default
has occurred and is continuing, the Borrower may make Restricted Payments up to
$2,000,000 in any fiscal year with respect to Preferred Stock which has been
issued in accordance with Section 7.2(h).
7 Capital Expenditures. Make or commit to make (by way of the
acquisition of securities of a Person or otherwise) any Capital Expenditure,
except Capital Expenditures of the Borrower and its Subsidiaries in the
ordinary course of business not exceeding $15,000,000 in any fiscal year;
provided, that (i) up to $5,000,000 of any such amount referred to above, if
not so expended in the fiscal year for which it is permitted, may be carried
over for expenditure in the next succeeding fiscal year and (ii) Capital
Expenditures made pursuant to this clause (a) during any fiscal year shall be
deemed made, first, in respect of amounts carried over from the prior fiscal
year pursuant to subclause (i) above and, second, in respect of amounts
permitted for such fiscal year as provided above.
8 Investments. Make any advance, loan, extension of credit (by way of
guaranty or otherwise) or capital contribution to, or purchase any Capital
Stock, bonds, notes, debentures or other securities of, or any assets
constituting all or a material part of a business unit of, or make any other
investment in, any Person (all of the foregoing, "Investments"), except:
(a) extensions of trade credit in the ordinary course of business;
(b) Investments in Cash Equivalents;
(c) Guarantee Obligations permitted by Section 7.2;
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(d) loans and advances to employees of the Borrower or any of its
Subsidiaries in the ordinary course of business (including, without
limitation, for travel, entertainment and relocation expenses) in an
aggregate amount for the Borrower and its Subsidiaries not to exceed
$100,000 with respect to any one employee and $500,000 in the aggregate
at any one time outstanding;
(e) Investments by the Borrower or any of its Subsidiaries in the
Borrower or any Person that, prior to such investment, is a Wholly Owned
Subsidiary Guarantor;
(f) Investments by Seymour Housewares Corporation ("Seymour") in or
to Seymour S.A. de C.V. (the "Mexican Subsidiary") in such amounts as are
necessary to fund the working capital requirements of the Mexican
Subsidiary in the ordinary course of business and to maintain level
capital expenditure requirements of the Mexican Subsidiary; provided,
that Seymour shall not permit cash or Cash Equivalents in excess of such
immediate needs to be accumulated or held by the Mexican Subsidiary;
(g) any Acquisition of any Person or business, either through the
purchase of the assets (including the goodwill) of such Person or
business or the purchase of 100% of the Capital Stock of such Person, if
each of the following conditions is satisfied: (i) the Borrower would
have been in compliance as of the last day (such day relating to any
Acquisition, the "Related Test Date") of the most recently completed
fiscal quarter for which financial statements are available, on a pro
forma basis, with each of the financial covenants contained in Section
7.1 as if such Acquisition had been made on the first day of the
Reference Period ending on the Related Test Date for such Acquisition,
and if the Purchase Price for such Acquisition is greater than
$10,000,000, the Borrower shall deliver to the Lenders 10 days prior to
the consummation of such Acquisition a certificate of its chief financial
officer, supported by detailed calculations, demonstrating such pro forma
compliance; (ii) no Default or Event of Default has occurred and is
continuing, or would occur after giving effect to such Acquisition
(including, without limitation, under Section 7.1); (iii) such
Acquisition shall be in compliance with Section 7.14; and (iv) any such
Acquisition shall have been approved by the Board of Directors or such
comparable governing body of the Person or business being acquired (all
such Acquisitions, the "Permitted Acquisitions"); and
(h) other Investments by the Borrower or any of its Subsidiaries in
an aggregate amount (for the Borrower and all Subsidiaries) not to exceed
$7,500,000 during the term of this Agreement.
9 Optional Payments and Modifications of Debt Instruments, etc. (a)
Make or offer to make any payment, prepayment, repurchase or redemption of or
otherwise defease or segregate funds (any such event or combination thereof
referred to herein as a "Take-Out") with respect to the Senior Subordinated
Notes (other than scheduled interest payments required to be made in cash);
provided, that the Borrower may Take Out the Senior Subordinated Notes with
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the proceeds of any issuance of Capital Stock by the Borrower (to the extent
the issuance of such Capital Stock is permitted under Section 7.2), (b) amend,
modify, waive or otherwise change, or consent or agree to any amendment,
modification, waiver or other change to, any of the terms of the Senior
Subordinated Notes (other than any such amendment, modification, waiver or
other change that (x) (i) would extend the maturity or reduce the amount of any
payment of principal thereof or reduce the rate or extend the date for payment
of interest thereon and (ii) does not involve the payment of a consent fee or
(y) is administrative or corrective in nature and is not adverse to the
interests of the Lenders) or (c) designate any Indebtedness (other than
obligations of the Loan Parties pursuant to the Loan Documents) as "Designated
Senior Indebtedness" for the purposes of the Senior Subordinated Note
Indenture.
10 Transactions with Affiliates. Enter into any transaction, including,
without limitation, any purchase, sale, lease or exchange of property, the
rendering of any service or the payment of any management, advisory or similar
fees, with any Affiliate (other than the Borrower or any Wholly Owned
Subsidiary Guarantor) unless such transaction is (a) otherwise permitted under
this Agreement, (b) in the ordinary course of business of the Borrower or such
Subsidiary, as the case may be, and (c) upon fair and reasonable terms no less
favorable to the Borrower or such Subsidiary, as the case may be, than it would
obtain in a comparable arm's length transaction with a Person that is not an
Affiliate; provided, that the Borrower and its Subsidiaries may (i) enter into
transactions with Selfix Europe L.L.C. in the ordinary course of business and
consistent in character with past practice, (ii) make loans and advances to
employees permitted under Section 7.8(d), (iii) pay directors' fees to members
of the Borrower's board of directors who are not employees of the Borrower,
(iv) issue securities in connection with the Borrower's stock option plan to
the extent such plan has been approved by the board of directors of the
Borrower and (v) in the case of any Subsidiary, make payments to the Borrower
pursuant to a tax sharing agreement.
11 Changes in Fiscal Periods. Permit the fiscal year of the Borrower to
end on a day other than the last Saturday in December or change the Borrower's
method of determining fiscal quarters.
12 Negative Pledge Clauses. Enter into or suffer to exist or become
effective any agreement that prohibits or limits the ability of the Borrower or
any of its Subsidiaries to create, incur, assume or suffer to exist any Lien
upon any of its property or revenues, whether now owned or hereafter acquired,
other than (a) this Agreement and the other Loan Documents and (b) any
agreements governing any purchase money Liens or Capital Lease Obligations
otherwise permitted hereby (in which case, any prohibition or limitation shall
only be effective against the assets financed thereby).
13 Clauses Restricting Subsidiary Distributions. Enter into or suffer to
exist or become effective any consensual encumbrance or restriction on the
ability of any Subsidiary of the Borrower to (a) pay dividends or make any
other distributions in respect of any Capital Stock of such Subsidiary held by,
or pay any Indebtedness owed to, the Borrower or any other Subsidiary of the
Borrower, (b) make loans or advances to the Borrower or any other Subsidiary
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of the Borrower or (c) transfer any of its assets to the Borrower or any other
Subsidiary of the Borrower, except for such encumbrances or restrictions
existing under or by reason of (i) any restrictions existing under the Loan
Documents and (ii) any restrictions with respect to a Subsidiary imposed
pursuant to an agreement that has been entered into in connection with the
Disposition of all or substantially all of the Capital Stock or assets of such
Subsidiary.
14 Lines of Business. Enter into any business, either directly or
through any Subsidiary, except for those businesses in which the Borrower and
its Subsidiaries are engaged on the date of this Agreement or that are
reasonably related thereto.
8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or
the Borrower shall fail to pay any interest on any Loan or Reimbursement
Obligation, or any other amount payable hereunder or under any other Loan
Document, within five days after any such interest or other amount
becomes due in accordance with the terms hereof; or
(b) any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other
Loan Document shall prove to have been inaccurate in any material respect
on or as of the date made or deemed made; or
(c) (i) any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of Section
6.4(a) (with respect to the Borrower only), Section 6.7(a) or Section 7
of this Agreement or (ii) an "Event of Default" under and as defined in
any Mortgage shall have occurred and be continuing; or
(d) any Loan Party shall default in the observance or performance
of any other agreement contained in this Agreement or any other Loan
Document (other than as provided in paragraphs (a) through (c) of this
Section), and such default shall continue unremedied for a period of 30
days after notice from the Administrative Agent or the Required Lenders;
or
(e) the Borrower or any of its Subsidiaries shall (i) default in
making any payment of any principal of any Indebtedness (including,
without limitation, any Guarantee Obligation, but excluding the Loans) on
the scheduled or original due date with respect thereto; or (ii) default
in making any payment of any interest on any such Indebtedness beyond the
period of grace, if any, provided in the instrument or agreement under
which such Indebtedness was created; or (iii) default in the observance
or
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performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing,
securing or relating to such Indebtedness, or any other event shall occur
or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or
beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or (in the case
of any such Indebtedness constituting a Guarantee Obligation) to become
payable; provided, that a default, event or condition described in clause
(i), (ii) or (iii) of this paragraph (e) shall not at any time constitute
an Event of Default unless, at such time, one or more defaults, events or
conditions of the type described in clauses (i), (ii) and (iii) of this
paragraph (e) shall have occurred and be continuing with respect to
Indebtedness the outstanding principal amount of which exceeds in the
aggregate $1,000,000; or
(f) (i) the Borrower or any of its Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law of
any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order
for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for
it or for all or any substantial part of its assets, or the Borrower or
any of its Subsidiaries shall make a general assignment for the benefit
of its creditors; or (ii) there shall be commenced against the Borrower
or any of its Subsidiaries any case, proceeding or other action of a
nature referred to in clause (i) above that (A) results in the entry of
an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days; or
(iii) there shall be commenced against the Borrower or any of its
Subsidiaries any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against
all or any substantial part of its assets that results in the entry of an
order for any such relief that shall not have been vacated, discharged,
or stayed or bonded pending appeal within 60 days from the entry thereof;
or (iv) the Borrower or any of its Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) the Borrower or any of its Subsidiaries shall generally
not, or shall be unable to, or shall admit in writing its inability to,
pay its debts as they become due; or
(g) (i) any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving
any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to
any Plan or any Lien in favor of the PBGC or a Plan shall arise on the
assets of the Borrower or any Commonly Controlled Entity, (iii) a
Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Single
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Employer Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes of
Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) the Borrower or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a withdrawal
from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist with respect to a
Plan; and in each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any,
could, in the sole judgment of the Required Lenders, reasonably be
expected to have a Material Adverse Effect; or
(h) one or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance as to which the
relevant insurance company has acknowledged coverage) of $1,000,000 or
more, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 30 days from the entry
thereof; or
(i) any of the Security Documents shall cease, for any reason, to
be in full force and effect, or any Loan Party or any Affiliate of any
Loan Party shall so assert, or any Lien created by any of the Security
Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby; or
(j) the guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason, to be in full force and
effect or any Loan Party or any Affiliate of any Loan Party shall so
assert; or
(k) (i) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) other than the Permitted Investors shall become, or
obtain rights (whether by means or warrants, options or otherwise) to
become, the "beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5
under the Exchange Act), directly or indirectly, of more than 25% of the
outstanding common stock of the Borrower; (ii) the board of directors of
the Borrower shall cease to consist of a majority of Continuing
Directors; or (iii) a Specified Change of Control shall occur; or
(l) the Senior Subordinated Notes or the guarantees thereof shall
cease, for any reason, to be validly subordinated to the Obligations or
the obligations of the Subsidiary Guarantors under the Guarantee and
Collateral Agreement, as the case may be, as provided in the Senior
Subordinated Note Indenture, or any Loan Party, any Affiliate of any Loan
Party, the trustee in respect of the Senior Subordinated Notes or the
holders of at least 25% in aggregate principal amount of the Senior
Subordinated Notes shall so assert;
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then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Revolving Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents (including, without
limitation, all amounts of L/C Obligations, whether or not the beneficiaries of
the then outstanding Letters of Credit shall have presented the documents
required thereunder) shall immediately become due and payable, and (B) if such
event is any other Event of Default, either or both of the following actions
may be taken: (i) unless and to the extent previously cured or waived, with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower declare the Revolving Commitments to be terminated forthwith,
whereupon the Revolving Commitments shall immediately terminate; and (ii) with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan Documents
(including, without limitation, all amounts of L/C Obligations, whether or not
the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) to be due and payable forthwith,
whereupon the same shall immediately become due and payable. With respect to
all Letters of Credit with respect to which presentment for honor shall not
have occurred at the time of an acceleration pursuant to this paragraph, the
Borrower shall at such time deposit in a cash collateral account opened by the
Administrative Agent an amount equal to the aggregate then undrawn and
unexpired amount of such Letters of Credit. Amounts held in such cash
collateral account shall be applied by the Administrative Agent to the payment
of drafts drawn under such Letters of Credit, and the unused portion thereof
after all such Letters of Credit shall have expired or been fully drawn upon,
if any, shall be applied to repay other obligations of the Borrower hereunder
and under the other Loan Documents. After all such Letters of Credit shall
have expired or been fully drawn upon, all Reimbursement Obligations shall have
been satisfied and all other obligations of the Borrower hereunder and under
the other Loan Documents shall have been paid in full, the balance, if any, in
such cash collateral account shall be returned to the Borrower (or such other
Person as may be lawfully entitled thereto). Except as expressly provided
above in this Section, presentment, demand, protest and all other notices of
any kind are hereby expressly waived by the Borrower.
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9. THE ADMINISTRATIVE AGENT
1 Appointment. Each Lender hereby irrevocably designates and appoints
the Administrative Agent as the agent of such Lender under this Agreement and
the other Loan Documents, and each such Lender irrevocably authorizes the
Administrative Agent, in such capacity, to take such action on its behalf under
the provisions of this Agreement and the other Loan Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
2 Delegation of Duties. The Administrative Agent may execute any of its
duties under this Agreement and the other Loan Documents by or through agents
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys in-fact
selected by it with reasonable care.
3 Exculpatory Provisions. Neither the Administrative Agent nor any of
its respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable to any Lender for any action lawfully taken or
omitted to be taken by it or such Person under or in connection with this
Agreement or any other Loan Document (except to the extent that any of the
foregoing are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from its or such Person's own gross
negligence or willful misconduct) or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by
any Loan Party or any officer thereof contained in this Agreement or any other
Loan Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under
or in connection with, this Agreement or any other Loan Document or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Loan Document or for any failure of any Loan Party
a party thereto to perform its obligations hereunder or thereunder. The
Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.
4 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any instrument,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
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(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless it shall
first receive such advice or concurrence of the Required Lenders (or, if so
specified by this Agreement, all Lenders) as it deems appropriate or it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement and the other Loan Documents in accordance with a request of the
Required Lenders (or, if so specified by this Agreement, all Lenders), and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and all future holders of the Loans.
5 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event
that the Administrative Agent receives such a notice, the Administrative Agent
shall give notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders); provided that unless and until the Administrative
Agent shall have received such directions, the Administrative Agent may (but
shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Lenders.
6 Non-Reliance on Administrative Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Administrative Agent nor any of its
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
the Administrative Agent hereinafter taken, including any review of the affairs
of a Loan Party or any affiliate of a Loan Party, shall be deemed to constitute
any representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and
their affiliates and made its own decision to make its Loans hereunder and
enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Loan
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Parties and their affiliates. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder, the Administrative Agent shall not have any duty or responsibility
to provide any Lender with any credit or other information concerning the
business, operations, property, condition (financial or otherwise), prospects
or creditworthiness of any Loan Party or any affiliate of a Loan Party that may
come into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.
7 Indemnification. The Lenders agree to indemnify the Administrative
Agent in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section 9.7 (or, if indemnification is
sought after the date upon which the Revolving Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with such Aggregate Exposure Percentages immediately prior to such date), from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time (including, without limitation, at any time
following the payment of the Loans) be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of, the
Revolving Commitments, this Agreement, any of the other Loan Documents or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements that are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the Administrative Agent's gross negligence or willful misconduct. The
Administrative Agent shall have the right to deduct any amount owed to it by
any Lender under this Section from any payment made by it to such Lender
hereunder. The agreements in this Section 9.7 shall survive the payment of the
Loans and all other amounts payable hereunder.
8 Administrative Agent in Its Individual Capacity. The Administrative
Agent and its affiliates may make loans to, accept deposits from and generally
engage in any kind of business with any Loan Party as though the Administrative
Agent was not the Administrative Agent. With respect to its Loans made or
renewed by it and with respect to any Letter of Credit issued or participated
in by it, the Administrative Agent shall have the same rights and powers under
this Agreement and the other Loan Documents as any Lender and may exercise the
same as though it were not the Administrative Agent, and the terms "Lender" and
"Lenders" shall include the Administrative Agent in its individual capacity.
9 Successor Administrative Agent. The Administrative Agent may resign as
Administrative Agent upon 10 days' notice to the Lenders and the Borrower. If
the Administrative Agent shall resign as Administrative Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor agent
shall (unless an Event of Default under Section 8(a)
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or Section 8(f) with respect to the Borrower shall have occurred and be
continuing) be subject to approval by the Borrower (which approval shall not be
unreasonably withheld or delayed), whereupon such successor agent shall succeed
to the rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. If no successor
agent has accepted appointment as Administrative Agent by the date that is 10
days following a retiring Administrative Agent's notice of resignation, the
retiring Administrative Agent's resignation shall nevertheless thereupon become
effective and the Lenders shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement and the
other Loan Documents.
10 Authorization to Release Liens. The Administrative Agent is hereby
irrevocably authorized by each of the Lenders to release any Lien covering any
property of the Borrower or any of its Subsidiaries that is the subject of a
Disposition or to release the guarantee of any Subsidiary Guarantor which is
the subject of a fundamental change permitted by Section 7.4, in either case,
that is permitted by this Agreement or that has been consented to in accordance
with Section 10.1.
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MISCELLANEOUS
1 Amendments and Waivers. Neither this Agreement, any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may,
or, with the written consent of the Required Lenders, the Administrative Agent
and each Loan Party party to the relevant Loan Document may, from time to time,
(a) enter into written amendments, supplements or modifications hereto and to
the other Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on
such terms and conditions as the Required Lenders or the Administrative Agent,
as the case may be, may specify in such instrument, any of the requirements of
this Agreement or the other Loan Documents or any Default or Event of Default
and its consequences; provided, however, that no such waiver and no such
amendment, supplement or modification shall (i) forgive or reduce the principal
amount or extend the final scheduled date of maturity of any Loan, reduce the
stated rate of any interest or fee payable hereunder, or increase the amount or
extend the expiration date of any Lender's Revolving Commitment, in each case
without the consent of each Lender directly affected thereby; (ii) amend,
modify or waive any provision of this Section 10.1 or reduce any percentage
specified in the definition of Required Lenders, consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement and the other Loan Documents, release all or substantially all of the
Collateral or release all or substantially all of the Subsidiary Guarantors
from their obligations under the Guarantee and Collateral Agreement, in each
case without the written consent of all Lenders; (iii) amend, modify or waive
any provision of Section 9 without the written consent of the Administrative
Agent; (iv) amend, modify or waive any provision of Section 2.3 or 2.4 without
the written consent of the Swingline Lender; or (v) amend, modify or waive any
provision of Section 3 without the written consent of each of the Issuing
Lenders. Any such waiver and any such amendment, supplement or modification
shall apply equally to each of the Lenders and shall be binding upon the Loan
Parties, the Lenders, the Administrative Agent and all future holders of the
Loans. In the case of any waiver, the Loan Parties, the Lenders and the
Administrative Agent shall be restored to their former position and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
2 Notices. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by telecopy),
and, unless otherwise expressly provided herein, shall be deemed to have been
duly given or made when delivered, or three Business Days after being deposited
in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrower and the
Administrative Agent, and as set forth in an administrative questionnaire
delivered to the Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto:
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The Borrower: Home Products International, Inc.
4501 West 47th Street
Chicago, Illinois 60632
Attention: James E. Winslow, Executive Vice
President and Chief Financial Officer
Telecopy: (773) 890-0523
Telephone: (773) 890-8904
The Administrative Agent: The Chase Manhattan Bank
The Loan and Agency Services Group
One Chase Manhattan Plaza
8th Floor
New York, New York 10081
Attention: Margaret Swales
Telecopy: (212) 552-5662
Telephone: (212) 552-7472
with a copy to: The Chase Manhattan Bank
10 South Lasalle Street
23rd Floor
Chicago, Illinois 60603
Attention: Jonathan Twichell
Telecopy: (312) 807-4550
Telephone: (312) 807-4038
in the case of
Letters of Credit,
with a copy to: Chase Manhattan Bank Delaware
Corporate Banking Department
1201 Market Street
Wilmington, Delaware 19801
Attention: Michael Handago
Telecopy: (302) 428-3390
Telephone: (302) 428-3311
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.
3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
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privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
4 Survival of Representations and Warranties. All representations and
warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of
the Loans and other extensions of credit hereunder.
5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Administrative Agent for all its reasonable out-of-pocket costs
and expenses incurred in connection with the development, preparation and
execution of, and any amendment, supplement or modification to, this Agreement
and the other Loan Documents and any other documents prepared in connection
herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation,
the reasonable fees and disbursements of counsel to the Administrative Agent
and filing and recording fees and expenses, with statements with respect to the
foregoing to be submitted to the Borrower prior to the Closing Date (in the
case of amounts to be paid on the Closing Date) and from time to time
thereafter on a quarterly basis or such other periodic basis as the
Administrative Agent shall deem appropriate, (b) to pay or reimburse each
Lender and the Administrative Agent for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, the fees and disbursements of counsel (including the
allocated fees and expenses of in-house counsel) to each Lender and of counsel
to the Administrative Agent, (c) to pay, indemnify, and hold each Lender and
the Administrative Agent harmless from, any and all recording and filing fees
and any and all liabilities with respect to, or resulting from any delay in
paying, stamp, excise and other taxes, if any, that may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and the
Administrative Agent and their respective officers, directors, employees,
affiliates, agents and controlling persons (each, an "Indemnitee") harmless
from and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents and
any such other documents, including, without limitation, any of the foregoing
relating to the use of proceeds of the Loans or the violation of, noncompliance
with or liability under, any Environmental Law applicable to the operations of
the Borrower or any of its Subsidiaries or any of the Properties (all the
foregoing in this clause (d), collectively, the "Indemnified Liabilities"),
provided, that the Borrower shall have no obligation hereunder to any
Indemnitee (x) with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities resulted from the gross negligence or willful
misconduct of such Indemnitee, (y) with respect to any proceeding initiated by
the Administrative Agent against any Lender or by any Lender against the
Administrative Agent or any other Lender or (z) to the extent arising in
connection with any action by or on behalf of the Borrower against such
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Indemnitee where the Borrower is found to be the prevailing party pursuant to a
final and nonappealable decision of a court of competent jurisdiction. Without
limiting the foregoing, and to the extent permitted by applicable law, the
Borrower agrees not to assert and to cause its Subsidiaries not to assert, and
hereby waives and agrees to cause its Subsidiaries to so waive, all rights for
contribution or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature, under or related to Environmental Laws,
that any of them might have by statute or otherwise against any Indemnitee.
The agreements in this Section 10.5 shall survive repayment of the Loans and
all other amounts payable hereunder.
6 Successors and Assigns; Participations and Assignments. (a) This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Administrative Agent, all future holders of the Loans and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of each Lender.
(a) Any Lender may, without the consent of the Borrower, in accordance
with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a "Participant") participating interests
in any Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents. In the
event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the other
Loan Documents, and the Borrower and the Administrative Agent shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and the other Loan Documents. In
no event shall any Participant under any such participation have any right to
approve any amendment or waiver of any provision of any Loan Document, or any
consent to any departure by any Loan Party therefrom, except to the extent that
such amendment, waiver or consent would reduce the principal of, or interest
on, the Loans or any fees payable hereunder, or postpone the date of the final
maturity of the Loans, in each case to the extent subject to such
participation. The Borrower agrees that if amounts outstanding under this
Agreement and the Loans are due or unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event of Default, each
Participant shall, to the maximum extent permitted by applicable law, be deemed
to have the right of setoff in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement, provided that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 10.7(a) as fully as if it were a Lender
hereunder. The Borrower also agrees that each Participant shall be entitled to
the benefits of Sections 2.15, 2.16 and 2.17 with respect to its participation
in the Revolving Commitments and the Loans outstanding from time to time as if
it was a Lender; provided that, in the case of Section 2.16, such Participant
shall have complied with the requirements of said Section and provided,
further, that no Participant shall be entitled to receive any greater amount
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pursuant to any such Section than the transferor Lender would have been
entitled to receive in respect of the amount of the participation transferred
by such transferor Lender to such Participant had no such transfer occurred.
(b) Any Lender (an "Assignor") may, in accordance with applicable law, at
any time and from time to time assign to any Lender or any affiliate thereof
or, with the consent of the Borrower and the Administrative Agent (which, in
each case, shall not be unreasonably withheld or delayed), to an additional
bank, financial institution or other entity (an "Assignee") all or any part of
its rights and obligations under this Agreement pursuant to an Assignment and
Acceptance, substantially in the form of Exhibit E, executed by such Assignee,
such Assignor and any other Person whose consent is required pursuant to this
Section 10.6(c), and delivered to the Administrative Agent for its acceptance
and recording in the Register; provided that no such assignment to an Assignee
(other than any Lender or any affiliate thereof) shall be in an aggregate
principal amount of less than $5,000,000 (other than in the case of an
assignment of all of a Lender's interests under this Agreement), unless
otherwise agreed by the Borrower and the Administrative Agent. Upon such
execution, delivery, acceptance and recording, from and after the effective
date determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with a Commitment and/or Loans as set forth therein, and (y) the
Assignor thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of an Assignor's rights and
obligations under this Agreement, such Assignor shall cease to be a party
hereto). Notwithstanding any provision of this Section 10.6, the consent of
the Borrower shall not be required for any assignment that occurs when an Event
of Default pursuant to Section 8(f) shall have occurred and be continuing with
respect to the Borrower.
(c) The Administrative Agent shall maintain at its address referred to in
Section 10.2 a copy of each Assignment and Acceptance delivered to it and a
register (the "Register") for the recordation of the names and addresses of the
Lenders and the Revolving Commitment of, and the principal amount of the Loans
owing to, each Lender from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower, each other Loan
Party, the Administrative Agent and the Lenders shall treat each Person whose
name is recorded in the Register as the owner of the Loans and any Notes
evidencing the Loans recorded therein for all purposes of this Agreement. Any
assignment of any Loan, whether or not evidenced by a Note, shall be effective
only upon appropriate entries with respect thereto being made in the Register
(and each Note shall expressly so provide). Any assignment or transfer of all
or part of a Loan evidenced by a Note shall be registered on the Register only
upon surrender for registration of assignment or transfer of the Note
evidencing such Loan, accompanied by a duly executed Assignment and Acceptance,
and thereupon one or more new Notes shall be issued to the designated Assignee.
(d) Upon its receipt of an Assignment and Acceptance executed by an
Assignor, an Assignee and any other Person whose consent is required by Section
10.6(c), together with
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payment to the Administrative Agent of a registration and processing fee of
$4,000, the Administrative Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) record the information contained therein in the Register on
the effective date determined pursuant thereto.
(e) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this Section 10.6 concerning assignments of Loans and
Notes relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
(f) The Borrower agrees to issue Notes to any Lender requiring Notes to
facilitate transactions of the type described in paragraph (f) above.
7 Adjustments; Set-off. (a) If any Lender (a "Benefitted Lender") shall
at any time receive any payment of all or part of the Obligations owing to it,
or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 8(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of the Obligations owing to such other Lender, such Benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of the Obligations owing to each such other Lender, or shall provide
such other Lenders with the benefits of any such collateral, as shall be
necessary to cause such Benefitted Lender to share the excess payment or
benefits of such collateral ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(a) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall upon the occurrence and during the continuance of an
Event of Default have the right, without prior notice to the Borrower, any such
notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise), to
set off and appropriate and apply against such amount any and all deposits
(general or special, time or demand, provisional or final), in any currency,
and any other credits, indebtedness or claims, in any currency, in each case
whether direct or indirect, absolute or contingent, matured or unmatured, at
any time held or owing by such Lender or any Affiliate, branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender
agrees promptly to notify the Borrower and the Administrative Agent after any
such setoff and application made by such Lender, provided that the failure to
give such notice shall not affect the validity of such setoff and application.
Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken
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together shall be deemed to constitute one and the same instrument. Delivery
of an executed signature page of this Agreement by facsimile transmission shall
be effective as delivery of a manually executed counterpart hereof. A set of
the copies of this Agreement signed by all the parties shall be lodged with the
Borrower and the Administrative Agent.
9 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10 Integration. This Agreement and the other Loan Documents represent
the agreement of the Borrower, the Administrative Agent and the Lenders with
respect to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Administrative Agent or any Lender
relative to subject matter hereof not expressly set forth or referred to herein
or in the other Loan Documents.
11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
12 Submission To Jurisdiction; Waivers. The Borrower hereby irrevocably
and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts from
any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not
to plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in Section 10.2 or at such other
address of which the Administrative Agent shall have been notified
pursuant thereto;
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(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding
referred to in this Section 10.12 any special, exemplary, punitive or
consequential damages.
13 Acknowledgements. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and
the relationship between Administrative Agent and Lenders, on one hand,
and the Borrower, on the other hand, in connection herewith or therewith
is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among the Borrower and the Lenders.
14 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.
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15 Confidentiality. Each of the Administrative Agent and each Lender
agrees to keep confidential all non-public information provided to it by any
Loan Party pursuant to this Agreement that is designated by such Loan Party as
confidential; provided that nothing herein shall prevent the Administrative
Agent or any Lender from disclosing any such information (a) to the
Administrative Agent, any other Lender or any affiliate of any Lender, (b) to
any Transferee or prospective Transferee that agrees to comply with the
provisions of this Section 10.15, (c) to its employees, directors, agents,
attorneys, accountants and other professional advisors or those of any of its
affiliates that agree to comply with this Section 10.15, (d) upon the request
or demand of any Governmental Authority, (e) in response to any order of any
court or other Governmental Authority or as may otherwise be required pursuant
to any Requirement of Law, in which case the Administrative Agent or such
Lender shall give notice of such order to the Borrower, (f) if requested or
required to do so in connection with any litigation or similar proceeding, (g)
that has been publicly disclosed, (h) to the National Association of Insurance
Commissioners or any similar organization or any nationally recognized rating
agency that requires access to information about a Lender's investment
portfolio in connection with ratings issued with respect to such Lender, or (i)
in connection with the exercise of any remedy hereunder or under any other Loan
Document.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
HOME PRODUCTS INTERNATIONAL, INC.
By: --------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as Administrative
Agent and as a Lender
By:----------------------------------------
Name:
Title:
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Annex A
PRICING GRID FOR REVOLVING LOANS, SWINGLINE LOANS,
AND COMMITMENT FEES
Consolidated Total Applicable Margin Applicable Margin
Leverage Ratio for Eurodollar Loans for ABR Loans Commitment Fee Rate
Greater than or
equal to 4.75 to
1.00 2.00% 1.00% .50%
Less than 4.75 to
1.00 and greater
than or equal to
3.75 to 1.00 1.75% .75% .50%
Less than 3.75 to
1.00 1.50% .50% .375%
Changes in the Applicable Margin with respect to Revolving Loans or Swingline
Loans or in the Commitment Fee Rate resulting from changes in the Consolidated
Total Leverage Ratio shall become effective on the date (the "Adjustment Date")
on which financial statements are delivered to the Lenders pursuant to Section
6.1 (but in any event not later than the 45th day after the end of each of the
first three quarterly periods of each fiscal year or the 90th day after the end
of each fiscal year, as the case may be) and shall remain in effect until the
next change to be effected pursuant to this paragraph. If any financial
statements referred to above are not delivered within the time periods
specified above, then, until such financial statements are delivered, if the
Administrative Agent or the Required Lenders so determine, the Consolidated
Total Leverage Ratio as at the end of the fiscal period that would have been
covered thereby shall for the purposes of this definition be deemed to be
greater than 4.75 to 1.00. In addition, at all times while an Event of Default
shall have occurred and be continuing and the Administrative Agent or the
Required Lenders so determine, the Consolidated Total Leverage Ratio shall for
the purposes of this definition be deemed to be greater than 4.75 to 1.00.
Each determination of the Consolidated Total Leverage Ratio pursuant to this
definition shall be made with respect to the period of four consecutive fiscal
quarters of the Borrower ending at the end of the period covered by the
relevant financial statements.