REVOLVING CREDIT AGREEMENT
Dated as of
August 30, 1994
among
WATTS INVESTMENT COMPANY,
THE FINANCIAL INSTITUTIONS LISTED ON
SCHEDULE 1 HERETO,
THE FIRST NATIONAL BANK OF BOSTON, as Agent
and
WATTS INDUSTRIES, INC., as Guarantor
1. DEFINITIONS AND RULES OF INTERPRETATION. 1
1.1. Definitions. 1
1.2. Rules of Interpretation. 12
2. THE REVOLVING CREDIT FACILITY. 13
2.1. Commitment to Lend. 13
2.2. Facility Fee. 14
2.3. Reduction of Total Commitment. 14
2.4. The Notes. 14
2.5. Interest on Revolving Credit Loans. 15
2.6. Requests for Revolving Credit Loans. 15
2.7. Conversion Options. 15
2.7.1. Conversion to Different Type of Revolving Credit Loan. 15
2.7.2. Continuation of Type of Revolving Credit Loan. 16
2.7.3. Eurodollar Rate Loans. 16
2.8. Funds for Revolving Credit Loans. 17
2.8.1. Funding Procedures. 17
2.8.2. Advances by Agent. 17
3. REPAYMENT OF THE REVOLVING CREDIT LOANS. 18
3.1. Maturity. 18
3.2. Mandatory Repayments of Revolving Credit Loans. 18
3.3. Optional Repayments of Revolving Credit Loans. 18
4. CERTAIN GENERAL PROVISIONS. 19
4.1. Closing Fee. 19
4.2. Agent's Fee. 19
4.3. Funds for Payments. 19
4.3.1. Payments to Agent. 19
4.3.2. No Offset, etc. 19
4.4. Computations. 20
4.5. Inability to Determine Eurodollar Rate. 20
4.6. Illegality. 20
4.7. Additional Costs, etc. 21
4.8. Capital Adequacy. 22
4.9. Certificate. 23
4.10. Indemnity. 23
4.11. Interest on Overdue Amounts. 23
5. GUARANTY. 23
5.1. Guaranty. 23
5.2. Guaranty Absolute. 24
5.3. Effectiveness; Enforcement. 25
5.4. Waivers. 25
5.5. Subrogation Waiver. 25
6. REPRESENTATIONS AND WARRANTIES. 26
6.1. Corporate Authority. 26
6.1.1. Incorporation; Good Standing. (i) 26
6.1.2. Authorization. 26
6.1.3. Enforceability. 26
6.2. Governmental Approvals. 27
6.3. Title to Properties; Leases. 27
6.4. Financial Statements. 27
6.5. No Material Changes, etc. 28
6.6. Franchises, Patents, Copyrights, etc. 28
6.7. Litigation. 28
6.8. No Materially Adverse Contracts, etc. 28
6.9. Compliance With Other Instruments, Laws, etc. 29
6.10. Tax Status. 29
6.11. No Event of Default. 29
6.12. Holding Company and Investment Company Acts. 29
6.13. Absence of Financing Statements, etc. 29
6.14. Certain Transactions. 30
6.15. Employee Benefit Plans. 30
6.15.1. In General. 30
6.15.2. Terminability of Welfare Plans. 30
6.15.3. Guaranteed Pension Plans. 31
6.15.4. Multiemployer Plans. 31
6.16. Regulations U and X. 31
6.17. Environmental Compliance. 32
6.18. Subsidiaries, etc. 34
7. AFFIRMATIVE COVENANTS OF THE BORROWER AND THE PARENT. 34
7.1. Punctual Payment. 34
7.2. Maintenance of Office. 34
7.3. Records and Accounts. 34
7.4. Financial Statements, Certificates and Information. 34
7.5. Notices. 36
7.5.1. Defaults. 36
7.5.2. Environmental Events. 36
7.5.3. Notice of Litigation and Judgments. 36
7.6. Corporate Existence; Maintenance of Properties. 37
7.7. Insurance. 37
7.8. Taxes. 38
7.9. Inspection of Properties and Books, etc. 38
7.9.1. General. 38
7.9.2. Communication with Accountants. 38
7.10. Compliance with Laws, Contracts, Licenses, and Permits. 39
7.11. Employee Benefit Plans. 39
7.12. Use of Proceeds. 40
7.13. Further Assurances. 40
8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER AND THE PARENT. 40
8.1. Restrictions on Indebtedness. 40
8.2. Restrictions on Liens. 42
8.3. Restrictions on Investments. 43
8.4. Distributions. 45
8.5. Merger, Consolidation. 45
8.5.1. Mergers and Acquisitions. 45
8.5.2. Disposition of Assets. 46
8.6. Sale and Leaseback. 46
8.7. Compliance with Environmental Laws. 46
8.8. Employee Benefit Plans. 47
8.9. Certain Transactions. 48
9. FINANCIAL COVENANTS OF THE BORROWER AND THE PARENT. 48
9.1. Fixed Charge Coverage Ratio. 48
9.2. Leverage Ratio. 48
9.3. Consolidated Tangible Net Worth. 48
10. CLOSING CONDITIONS. 48
10.1. Loan Documents. 48
10.2. Certified Copies of Charter Documents. 49
10.3. Corporate Action. 49
10.4. Incumbency Certificate. 49
10.5. Opinion of Counsel. 49
10.6. Proceedings and Documents. 49
10.7. Payment of Fees. 50
11. CONDITIONS TO ALL BORROWINGS. 50
11.1. Representations True; No Event of Default. 50
11.2. No Legal Impediment. 50
11.3. Governmental Regulation. 50
12. EVENTS OF DEFAULT; ACCELERATION; ETC. 50
12.1. Events of Default and Acceleration. 50
12.2. Termination of Commitments. 54
12.3. Remedies. 54
12.4. Distribution of Proceeds. 54
13. SETOFF. 55
14. THE AGENT. 56
14.1. Authorization. 56
14.2. Employees and Agents. 57
14.3. No Liability. 57
14.4. No Representations. 57
14.5. Payments. 58
14.5.1. Payments to Agent. 58
14.5.2. Distribution by Agent. 58
14.5.3. Delinquent Banks. 58
14.6. Holders of Notes. 59
14.7. Indemnity. 59
14.8. Agent as Bank. 59
14.9. Resignation. 59
14.10. Notification of Defaults and Events of Default. 60
15. EXPENSES. 60
16. INDEMNIFICATION. 61
17. SURVIVAL OF COVENANTS, ETC. 62
18. ASSIGNMENT AND PARTICIPATION. 62
18.1. Conditions to Assignment by Banks. 62
18.2. Certain Representations and Warranties;
Limitations; Covenants. 63
18.3. Register. 64
18.4. New Notes. 65
18.5. Participations. 65
18.6. Disclosure. 65
18.7. Assignee or Participant Affiliated with the Borrower. 66
18.8. Miscellaneous Assignment Provisions. 66
18.9. Assignment by Borrower. 67
19. CONFIDENTIALITY. 67
20. NOTICES, ETC. 67
21. GOVERNING LAW. 68
22. HEADINGS. 69
23. COUNTERPARTS. 69
24. ENTIRE AGREEMENT, ETC. 69
25. WAIVER OF JURY TRIAL. 69
26. CONSENTS, AMENDMENTS, WAIVERS, ETC. 70
27. SEVERABILITY. 70
Exhibits & Schedules
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Loan Request
Exhibit C - Form of Compliance Certificate
Exhibit D - Form of Legal Opinion
Exhibit E - Form of Assignment and Acceptance
Schedule 1 - Banks, Commitments, Commitment Percentages,
Domestic Lending Offices, Eurodollar Lending
Offices
Schedule 6.3 - Leased Property
Schedule 6.7 - Litigation
Schedule 6.13 - Financing Statements
Schedule 6.17 - Environmental Matters
Schedule 6.18 - Subsidiaries
Schedule 8.1 - Existing Indebtedness
Schedule 8.2 - Liens
Schedule 8.3 - Investments
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT is made as of August 30, 1994, by and among
(a) Watts Investment Company (the "Borrower") a Delaware corporation having its
principal place of business at 715 King Street, Wilmington, Delaware, 19801, (b)
the financial institutions listed on Schedule 1 hereto and such other financial
institutions that are or may become parties to this Credit Agreement from time
to time in accordance with the provisions hereof, (c) The First National Bank of
Boston, as agent for itself and the other financial institutions party hereto,
and (d) Watts Industries, Inc. (the "Parent"), a Delaware corporation having its
principal place of business at 815 Chestnut Street, North Andover, Massachusetts
01845, as guarantor hereunder.
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. Definitions.
The following terms shall have the meanings set forth in this (section)1 or
elsewhere in the provisions of this Credit Agreement referred to below:
Affiliate. Any Person that would be considered to be an affiliate of the
Parent or the Borrower under Rule 144(a) of the Rules and Regulations of the
Securities and Exchange Commission, as in effect on the date hereof, if such
Person were issuing securities.
Agent's Head Office. The Agent's head office located at 100 Federal Street,
Boston, Massachusetts 02110, or at such other location as the Agent may
designate from time to time.
Agent. The First National Bank of Boston acting as agent for the
Banks.
Agent's Special Counsel. Bingham, Dana & Gould or such other
counsel as may be approved by the Agent.
Applicable Margin. A percentage to be determined for each fiscal quarter as
of the last day of the previous fiscal quarter based on the higher of the
Parent's senior unsecured debt ratings as published by either (i) Moody's
Investors Services, Inc. or (ii) Standard & Poor's Corporation on such date, in
accordance with the schedule set forth below:
Rating
S&P/Moody's Applicable Margin
A/A2 or Higher 0.20%
A-/A3 0.25%
BBB+/Baa 1 0.3125%
BBB/Baa2 0.35%
BBB-/Baa3 0.4375%
Non Investment Grade
or unrated by either 0.75%
rating agency
Assignment and Acceptance. See (section)18.1.
Balance Sheet Date. June 30, 1994.
Banks. FNBB and the other lending institutions listed on Schedule
1 hereto and any other Person who becomes an assignee of any rights and
obligations of a Bank pursuant to (section)18.
Base Rate. The higher of (i) the annual rate of interest announced from
time to time by FNBB at its head office in Boston, Massachusetts, as its "base
rate" and (ii) one-half of one percent (1/2%) above the Federal Funds Effective
Rate. For the purposes of this definition, "Federal Funds Effective Rate" shall
mean, for any day, the rate per annum equal to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three funds brokers of recognized
standing selected by the Agent.
Base Rate Loans. Revolving Credit Loans bearing interest
calculated by reference to the Base Rate.
Borrower. As defined in the preamble hereto.
Business Day. Any day on which banking institutions in Boston,
Massachusetts are open for the transaction of banking business and, in the case
of Eurodollar Rate Loans, also a day which is a Eurodollar Business Day.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.
Capital Expenditures. Amounts paid or indebtedness incurred by the Parent
or any of its Subsidiaries in connection with the purchase or lease by the
Parent or any of its Subsidiaries of Capital Assets that would be required to be
capitalized and shown on the balance sheet of such Person in accordance with
generally accepted accounting principles.
Capitalized Leases. Leases under which the Parent or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with generally accepted accounting
principles.
CERCLA. See (section)6.17.
Closing Date. The first date on which the conditions set forth in
(sections) 10 and 11 have been satisfied and any Revolving Credit Loans are to
be made.
Code. The Internal Revenue Code of 1986.
Commitment. With respect to each Bank, the amount set forth on Schedule 1
hereto as the amount of such Bank's commitment to make Loans to the Borrower, as
the same may be reduced from time to time; or if such commitment is terminated
pursuant to the provisions hereof, zero.
Commitment Percentage. With respect to each Bank, the percentage determined
by dividing such Bank's Commitment by the aggregate Commitments of all of the
Banks. Each Bank's Commitment Percentage as of the Closing Date is set forth on
Schedule 1 hereto.
Consolidated or consolidated. With reference to any term defined herein,
shall mean that term as applied to the accounts of the Parent and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.
Consolidated Net Income (or Deficit). The consolidated net income (or
deficit) of the Parent and its Subsidiaries, after deduction of all expenses,
taxes, and other proper charges, determined in accordance with generally
accepted accounting principles, after eliminating therefrom all extraordinary
nonrecurring items of income or loss.
Consolidated Net Worth. Consolidated Total Assets minus Consolidated Total
Liabilities, and minus, to the extent otherwise includable in the computation of
Consolidated Net Worth, any subscriptions receivable for the purchase of capital
stock.
Consolidated Tangible Net Worth. Consolidated Total Assets minus
Consolidated Total Liabilities, and minus the sum of:
(a) the total book value of all assets of the Parent and its Subsidiaries
properly classified as intangible assets under generally accepted accounting
principles, including such items as good will, the purchase price of acquired
assets in excess of the fair market value thereof, trademarks, trade names,
service marks, brand names, copyrights, patents and licenses, and rights with
respect to the foregoing; plus
(b) all amounts representing any write-up in the book value of any assets
of the Parent or its Subsidiaries resulting from a revaluation thereof
subsequent to the Balance Sheet Date, excluding adjustments to translate foreign
assets and liabilities for changes in foreign exchange rates made in accordance
with Financial Accounting Standards Board Statement No. 52; plus
(c) to the extent otherwise includable in the computation of Consolidated
Tangible Net Worth, any subscriptions receivable for the purchase of capital
stock.
Consolidated Total Assets. All assets of the Parent and its
Subsidiaries determined on a consolidated basis in accordance with
generally accepted accounting principles.
Consolidated Total Interest Expense. For any period, the aggregate amount
of interest required to be paid or accrued by the Parent and its Subsidiaries
during such period on all Indebtedness of the Parent and its Subsidiaries
outstanding during all or any part of such period, whether such interest was or
is required to be reflected as an item of expense or capitalized, including
payments consisting of interest in respect of Capitalized Leases and plus,
without duplication, commitment
fees, agency fees, facility fees, balance deficiency fees and similar fees or
expenses in connection with the borrowing of money.
Consolidated Total Liabilities. All liabilities of the Parent and
its Subsidiaries determined on a consolidated basis in accordance with
generally accepted accounting principles.
Conversion Request. A notice given by the Borrower to the Agent of
the Borrower's election to convert or continue a Loan in accordance with
(section)2.7.
Credit Agreement. This Revolving Credit Agreement, including the
Schedules and Exhibits hereto.
Default. See (section)12.
Distribution. The declaration or payment of any dividend on or in respect
of any shares of any class of capital stock of any of the Borrower, the Parent
or any of their Subsidiaries, other than dividends payable solely in shares of
common stock of such Person; the purchase, redemption, or other retirement of
any shares of any class of capital stock of any of the Borrower, the Parent or
any of their Subsidiaries (or any options, warrants or other rights to acquire
shares of such capital stock), directly or indirectly through a Subsidiary of
such Person or otherwise; the return of capital by any of the Borrower, the
Parent or any of their Subsidiaries to its shareholders as such; or any other
distribution on or in respect of any shares of any class of capital stock of any
of the Borrower, the Parent or any of their Subsidiaries.
Dollars or $. Dollars in lawful currency of the United States of America.
Domestic Lending Office. Initially, the office of each Bank designated as
such in Schedule 1 hereto; thereafter, such other office of such Bank, if any,
located within the United States that will be making or maintaining Base Rate
Loans.
Drawdown Date. The date on which any Revolving Credit Loan is made or is to
be made, and the date on which any Revolving Credit Loan is converted or
continued in accordance with (section)2.7.
Earnings Before Interest, Taxes, Depreciation and Amortization. The
Consolidated Net Income (or Deficit) of the Parent and its Subsidiaries for any
period, after all expenses and other proper charges but before payment or
provision for any income taxes or interest expense for such period, plus
depreciation and amortization for such period, determined in accordance with
generally accepted accounting principles.
Eligible Assignee. Any of (i) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $5,000,000,000; (ii)
a commercial bank organized under the laws of any other country which is a
member of the Organization for Economic Cooperation and Development (the
"OECD"), or a political subdivision of any such country, and having total assets
in excess of $5,000,000,000, provided that such bank is acting through a branch
or agency located in the country in which it is organized or another country
which is also a member of the OECD; and (iii) if, but only if, an Event of
Default has occurred and is continuing, any other bank, insurance company,
commercial finance company or other financial institution or other Person
approved by the Agent, such approval not to be unreasonably withheld.
Employee Benefit Plan. Any employee benefit plan within the meaning of
(section)3(3) of ERISA maintained or contributed to by any of the Borrower, the
Parent or any ERISA Affiliate, other than a Multiemployer Plan.
Environmental Laws. See (section)6.17(a).
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Any Person which is treated as a single employer with
either of the Borrower or the Parent under (section)414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of (section)4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
Eurocurrency Reserve Rate. For any day with respect to a Eurodollar Rate
Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
Eurodollar Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
Eurodollar Lending Office. Initially, the office of each Bank designated as
such in Schedule 1 hereto; thereafter, such other office of such Bank, if any,
that shall be making or maintaining Eurodollar Rate Loans.
Eurodollar Rate. For any Interest Period with respect to a Eurodollar Rate
Loan, the rate of interest equal to (i) the rate at which FNBB's Eurodollar
Lending Office is offered Dollar deposits, at or about 10:00 a.m., Boston time,
two Eurodollar Business Days prior to the beginning of such Interest Period in
the interbank eurodollar market where the eurodollar and foreign currency and
exchange operations of such Eurodollar Lending Office are customarily conducted,
for delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of the Eurodollar
Rate Loan of FNBB to which such Interest Period applies, divided by (ii) a
number equal to 1.00 minus the Eurocurrency Reserve Rate, if applicable.
Eurodollar Rate Loans. Revolving Credit Loans bearing interest
calculated by reference to the Eurodollar Rate.
Event of Default. See (section)12.
Existing Indebtedness. See (section)8.1(f).
Facility Fee. See (section)2.2.
Facility Fee Rate. For any date of determination, a percentage to be
determined for such date based on the higher of the Parent's senior unsecured
debt ratings as published by either (i) Moody's Investors Services, Inc. or (ii)
Standard & Poor's Corporation on such date, in accordance with the schedule set
forth below:
Rating Facility Fee
S&P/Moody's Rate
A/A2 or Higher 0.10%
A-/A3 0.10%
BBB+/Baa 1 0.1250%
BBB/Baa2 0.15%
BBB-/Baa3 0.1875%
Non Investment Grade
or unrated by either 0.25%
rating agency
Fixed Charge Coverage Ratio. For any period, the ratio of (i) the result of
(A) Earnings Before Interest, Taxes, Depreciation and Amortization minus (B)
Capital Expenditures, to (ii) the sum of (A) Consolidated Total Interest Expense
(without duplication of any interest taken into account in the computation of
the Fixed Charged Coverage Ratio in any prior period) plus (B) current
maturities of long term Indebtedness due and payable during such period in
accordance with generally accepted accounting principles, in each case for the
Parent and its Subsidiaries on a consolidated basis for such period.
FNBB. The First National Bank of Boston in its individual
capacity.
generally accepted accounting principles. (i) When used in (sections)8.1 or
9, whether directly or indirectly through reference to a capitalized term used
therein, means (A) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and
(B) to the extent consistent with such principles, the accounting practice of
the Parent reflected in its financial statements for the year ended on the
Balance Sheet Date, and (ii) when used in general, other than as provided above,
means principles that are (A) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, as in
effect from time to time and (B) consistently applied with past financial
statements of the Parent adopting the same principles, provided that in each
case referred to in this definition of "generally accepted accounting
principles" a certified public accountant would, insofar as the use of such
accounting principles is pertinent, be in a position to deliver an unqualified
opinion (other than a qualification regarding changes in generally accepted
accounting principles) as to financial statements in which such principles have
been properly applied.
Guaranteed Obligations. See (section)5.1.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of (section)3(2) of ERISA currently maintained or contributed to by the
Borrower or any ERISA Affiliate the benefits of which are guaranteed on
termination in full or in part by the PBGC pursuant to Title IV of ERISA, other
than a Multiemployer Plan.
Hazardous Substances. See (section)6.17(b).
Indebtedness. All obligations, contingent and otherwise, that in accordance
with generally accepted accounting principles should be classified upon the
obligor's balance sheet as liabilities, or to which reference should be made by
footnotes thereto, including in any event and whether or not so classified: (i)
all debt and similar monetary obligations, whether direct or indirect,
including, without limitation, Capitalized Lease obligations; (ii) all
liabilities secured by any mortgage, pledge, security interest, lien, charge, or
other encumbrance existing on property owned or acquired subject thereto,
whether or not the liability secured thereby shall have been assumed; and (iii)
all guarantees, endorsements and other contingent obligations whether direct or
indirect in respect of indebtedness of others, including any obligation to
supply funds to or in any manner to invest in, directly or indirectly, the
debtor, to purchase indebtedness, or to assure the owner of indebtedness against
loss, through an agreement to purchase goods, supplies, or services for the
purpose of enabling the debtor to make payment of the indebtedness held by such
owner or otherwise, and the obligations to reimburse the issuer in respect of
any letters of credit, whether drawn or undrawn, to the extent not duplicative
of the Indebtedness secured by such letters of credit.
Interest Payment Date. (i) As to any Base Rate Loan, the fifteenth day of
each calendar month and (ii) as to any Eurodollar Rate Loan in respect of which
the Interest Period is (A) 3 months or less, the last day of such Interest
Period, (B) more than 3 months but less than or equal to 6 months, the date that
is 3 months from the first day of such Interest Period, and, in addition, the
last day of such Interest Period and (C) more than 6 months, the date that is 3
months from the first day of such Interest Period, the date that is 6 months
from the first day of such Interest Period, and, in addition, the last day of
such Interest Period.
Interest Period. With respect to each Loan, (i) initially, the period
commencing on the Drawdown Date of such Loan and ending on the last day of one
of the periods set forth below, as selected by the Borrower in a Loan Request
(A) for any Base Rate Loan, the last day of the calendar month and (B) for any
Eurodollar Rate Loan, 1, 2, 3, 4, 5, or 6 months and, with the prior written
consent of each of the Banks, 9 months; and (ii) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to
such Loan and ending on the last day of one of the periods set forth above, as
selected by the Borrower in a Conversion Request; provided that all of the
foregoing provisions relating to Interest Periods are subject to the following:
(a) if any Interest Period with respect to a Eurodollar Rate Loan would
otherwise end on a day that is not a Eurodollar Business Day, that Interest
Period shall be extended to the next succeeding Eurodollar 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 Eurodollar Business Day;
(b) if any Interest Period with respect to a Base Rate Loan would end on a
day that is not a Business Day, that Interest Period shall end on the next
succeeding Business Day;
(c) if the Borrower shall fail to give notice as provided in (section)2.7,
the Borrower shall be deemed to have requested a conversion of the affected
Eurodollar Rate Loan to a Base Rate Loan and the continuance of all Base Rate
Loans as Base Rate Loans on the last day of the then current Interest Period
with respect thereto;
(d) any Interest Period that begins on the last Eurodollar 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 Eurodollar Business Day of a calendar month; and
(e) any Interest Period relating to any Eurodollar Rate Loan that would
otherwise extend beyond the Maturity Date shall end on the Maturity Date.
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (i) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (ii) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(iii) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (iv) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (ii) may be
deducted when paid; and (v) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
Loan Documents. This Credit Agreement and the Notes.
Loan Request. See (section)2.6.
Loans. The Revolving Credit Loans.
Majority Banks. As of any date, the Banks holding at least fifty-one
percent (51%) of the outstanding principal amount of the Notes on such date; and
if no such principal is outstanding, the Banks whose aggregate Commitments
constitutes at least fifty-one percent (51%) of the Total Commitment.
Maturity Date. August 31, 1999.
Multiemployer Plan. Any multiemployer plan within the meaning of
(section)3(37) of ERISA maintained or contributed to by any of the
Borrower, the Parent or any ERISA Affiliate.
Note Record. A Record with respect to a Note.
Notes. See (section)2.4.
Obligations. All indebtedness, obligations and liabilities of any of the
Borrower, the Parent and any of their Subsidiaries to any of the Banks and the
Agent, individually or collectively, existing on the date of this Credit
Agreement or arising thereafter, direct or indirect, joint or several, absolute
or contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Credit Agreement or any of the other Loan Documents or in
respect of any of the Loans or any of the Notes or other instruments at any time
evidencing any thereof.
Other Indebtedness. See (section)8.1(h).
outstanding. With respect to the Loans, the aggregate unpaid
principal thereof as of any date of determination.
Parent. As defined in the Preamble hereto.
PBGC. The Pension Benefit Guaranty Corporation created by
(section)4002 of ERISA and any successor entity or entities having
similar responsibilities.
Permitted Liens. Liens, security interests and other encumbrances
permitted by (section)8.2.
Person. Any individual, corporation, partnership, trust,
unincorporated association, business, or other legal entity, and any
government or any governmental agency or political subdivision thereof.
Real Estate. All real property at any time owned or leased (as
lessee or sublessee) by any of the Borrower, the Parent or any of their
Subsidiaries.
Record. The grid attached to a Note, or the continuation of such grid, or
any other similar record, including computer records, maintained by any Bank
with respect to any Loan referred to in such Note.
Revolving Credit Loans. Revolving credit loans made or to be made
by the Banks to the Borrower pursuant to (section)2.
Subsidiary. Any corporation, association, trust, partnership, joint
venture, or other business entity of which the designated parent shall at any
time own directly or indirectly through a Subsidiary or Subsidiaries at least a
majority (by number of votes) of the outstanding Voting Stock.
Total Commitment. The sum of the Commitments of the Banks, as in
effect from time to time.
Total Funded Debt. The principal amount of Indebtedness for borrowed money
(including obligations under Capitalized Leases allocable to principal) of the
Parent and its Subsidiaries on a consolidated basis.
Type. As to any Revolving Credit Loan its nature as a Base Rate
Loan or a Eurodollar Rate Loan.
Voting Stock. Stock or similar interests, of any class or classes (however
designated), the holders of which are at the time entitled, as such holders, to
vote for the election of a majority of the directors (or persons performing
similar functions) of the corporation, association, trust, partnership, joint
venture, or other business entity involved, whether or not the right so to vote
exists by reason of the happening of a contingency.
1.2. Rules of Interpretation.
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to
time in accordance with its terms and the terms of this Credit Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to
such law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not limiting.
(g) All terms not specifically defined herein or by generally accepted
accounting principles, which terms are defined in the Uniform Commercial
Code as in effect in the Commonwealth of Massachusetts, have the meanings
assigned to them therein, with the term "instrument" being that defined
under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular "(section)" refers to that section of
this Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like import
shall refer to this Credit Agreement as a whole and not to any particular
section or subdivision of this Credit Agreement.
2. THE REVOLVING CREDIT FACILITY.
2.1. Commitment to Lend.
Subject to the terms and conditions set forth in this Credit Agreement,
each of the Banks severally agrees to lend to the Borrower and the Borrower may
borrow, repay, and reborrow from time to time between the Closing Date and the
Maturity Date upon notice by the Borrower to the Agent given in accordance with
(section)2.6, such sums as are requested by the Borrower up to a maximum
aggregate principal amount outstanding (after giving effect to all amounts
requested) at any one time equal to such Bank's Commitment, provided that the
sum of the outstanding amount of the Revolving Credit Loans (after giving effect
to all amounts requested) shall not at any time exceed the Total Commitment. The
Revolving Credit Loans shall be made pro rata in accordance with each Bank's
Commitment Percentage. Each request for a Revolving Credit Loan hereunder shall
constitute a representation and warranty by the Borrower that the conditions set
forth in (section)10 and (section)11.1, in the case of the initial Revolving
Credit Loans to be made on the Closing Date, and (section)11.1, in the case of
all other Revolving Credit Loans, have been satisfied on the date of such
request.
2.2. Facility Fee.
The Borrower agrees to pay to the Agent for the accounts of the Banks in
accordance with their respective Commitment Percentages a facility fee (the
"Facility Fee") calculated at a rate per annum equal to the Facility Fee Rate
determined as of the last day of the calendar quarter for which such Facility
Fee is to be determined (or, in the case of Facility Fee payments to be made
prior the last day of the calendar quarter, the Facility Fee Rate determined as
of such date) on the average daily amount during such calendar quarter or
portion thereof of the Total Commitment in effect during such calendar quarter.
The Facility Fee shall be payable quarterly in arrears on the first day of each
calendar quarter for the immediately preceding calendar quarter commencing on
the first such date following the date hereof, with a final payment on the
Maturity Date or any earlier date on which the Commitments shall terminate.
2.3. Reduction of Total Commitment.
The Borrower shall have the right at any time and from time to time upon
ten (10) Business Days prior written notice to the Agent to reduce by $2,000,000
or integral multiples of $1,000,000 in excess thereof or terminate entirely the
unborrowed portion of the Total Commitment, whereupon the Commitments of the
Banks shall be reduced pro rata in accordance with their respective Commitment
Percentages of the amount specified in such notice or, as the case may be,
terminated. Promptly after receiving any notice of the Borrower delivered
pursuant to this (section)2.3, the Agent will notify the Banks of the substance
thereof. Upon the effective date of any such reduction or termination, the
Borrower shall pay to the Agent for the respective accounts of the Banks the
full amount of any Facility Fee then accrued on the amount of the reduction. No
reduction of the Commitments may be reinstated.
2.4. The Notes.
The Revolving Credit Loans shall be evidenced by separate promissory notes
of the Borrower in substantially the form of Exhibit A hereto (each a "Note"),
dated as of the Closing Date and completed with appropriate insertions. One Note
shall be payable to the order of each Bank in a principal amount equal to such
Bank's Commitment or, if less, the outstanding amount of all Revolving Credit
Loans made by such Bank, plus interest accrued thereon, as set forth below. The
Borrower irrevocably authorizes each Bank to make or cause to be made, at or
about the time of the Drawdown Date of any Revolving Credit Loan or at the time
of receipt of any payment of principal on such Bank's Note, an appropriate
notation on such Bank's Note Record reflecting the making of such Revolving
Credit Loan or (as the case may be) the receipt of such payment. The outstanding
amount of the Revolving Credit Loans set forth on such Bank's Note Record shall
be prima facie evidence of the principal amount thereof owing and unpaid to such
Bank, but the failure to record, or any error in so recording, any such amount
on such Bank's Note Record shall not limit or otherwise affect the obligations
of the Borrower hereunder or under any Note to make payments of principal of or
interest on any Note when due.
2.5. Interest on Revolving Credit Loans.
Except as otherwise provided in (section)4.11,
(a) Each Base Rate Loan shall bear interest for the period commencing
with the Drawdown Date thereof and ending on the last day of the Interest
Period with respect thereto at the Base Rate.
(b) Each Eurodollar Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of the
Interest Period with respect thereto equal to the Eurodollar Rate
determined for such Interest Period plus the Applicable Margin.
(d) The Borrower promises to pay interest on each Revolving Credit
Loan in arrears on each Interest Payment Date with respect thereto.
2.6. Requests for Revolving Credit Loans.
The Borrower shall give to the Agent written notice in the form of Exhibit
B hereto (or telephonic notice confirmed in a writing in the form of Exhibit B
hereto) of each Revolving Credit Loan requested hereunder (a "Loan Request") (i)
no later than 10 o'clock a.m. (Boston time) on the proposed Drawdown Date of any
Base Rate Loan, and (ii) no less than three (3) Eurodollar Business Days prior
to the proposed Drawdown Date of any Eurodollar Rate Loan. Each such notice
shall specify (A) the principal amount of the Revolving Credit Loan requested,
(B) the proposed Drawdown Date of such Revolving Credit Loan, (C) the Interest
Period for such Revolving Credit Loan and (D) the Type of such Revolving Credit
Loan. Promptly upon receipt of any such notice, the Agent shall notify each of
the Banks thereof. Each such notice shall be irrevocable and binding on the
Borrower and shall obligate the Borrower to accept the Revolving Credit Loan
requested from the Banks on the proposed Drawdown Date. Each Loan Request shall
be in a minimum aggregate amount of $2,000,000 or integral multiples of
$1,000,000 in excess thereof.
2.7. Conversion Options.
2.7.1. Conversion to Different Type of Revolving Credit Loan. The
Borrower may elect from time to time to convert any outstanding Revolving
Credit Loan to a Revolving Credit Loan of another Type, provided that (i)
with respect to any such conversion of a Eurodollar Rate Loan to a Base
Rate Loan, the Borrower shall give the Agent at least two (2) Business Days
prior written notice of such election, and such conversion shall only be
made on the last day of the Interest Period with respect to such Eurodollar
Loan; (ii) with respect to any such conversion of a Base Rate Loan to a
Eurodollar Rate Loan, the Borrower shall give the Agent at least three (3)
Eurodollar Business Days prior written notice of such election and (iii) no
Loan may be converted into a Eurodollar Rate Loan when any Default or Event
of Default has occurred and is continuing. On the date on which such
conversion is being made each Bank shall take such action as is necessary
to transfer its Commitment Percentage of such Revolving Credit Loans to its
Domestic Lending Office or its Eurodollar Lending Office, as the case may
be. All or any part of outstanding Revolving Credit Loans of any Type may
be converted as provided herein, provided that partial conversions shall be
in an aggregate principal amount of $2,000,000 or integral multiples of
$1,000,000 in excess thereof. Each Conversion Request relating to the
conversion of a Revolving Credit Loan to a Eurodollar Rate Loan shall be
irrevocable by the Borrower.
2.7.2. Continuation of Type of Revolving Credit Loan. Any Revolving
Credit Loans of any Type may be continued as such upon the expiration of an
Interest Period with respect thereto by compliance by the Borrower with the
notice provisions contained in (section)2.7.1; provided that no Eurodollar
Rate Loan may be continued as such when any Default or Event of Default has
occurred and is continuing, but shall be automatically converted to a Base
Rate Loan on the last day of the first Interest Period relating thereto
ending during the continuance of any Default or Event of Default of which
the officers of the Agent active upon the Borrower's account have actual
knowledge. In the event that the Borrower fails to provide any such notice
with respect to the continuation of any Eurodollar Rate Loan as such, then
such Eurodollar Rate Loan shall be automatically converted to a Base Rate
Loan on the last day of the first Interest Period relating thereto. The
Agent shall notify the Banks promptly when any such automatic conversion
contemplated by this (section)2.7 is scheduled to occur.
2.7.3. Eurodollar Rate Loans. Any conversion to or from Eurodollar
Rate Loans shall be in such amounts and be made pursuant to such elections
so that, after giving effect thereto, the aggregate principal amount of all
Eurodollar Rate Loans having the same Interest Period shall not be less
than $1,000,000 or integral multiples of $100,000 in excess thereof.
2.8. Funds for Revolving Credit Loans.
2.8.1. Funding Procedures. Not later than 11 o'clock a.m. (Boston
time) on the proposed Drawdown Date of any Revolving Credit Loans, each of
the Banks will make available to the Agent, at the Agent's Head Office, in
immediately available funds, the amount of such Bank's Commitment
Percentage of the amount of the requested Revolving Credit Loans. Upon
receipt from each Bank of such amount, and upon receipt of the documents
required by (sections)10 and 11 and the satisfaction of the other
conditions set forth therein, to the extent applicable, the Agent will make
available to the Borrower the aggregate amount of such Revolving Credit
Loans made available to the Agent by the Banks. The failure or refusal of
any Bank to make available to the Agent at the aforesaid time and place on
any Drawdown Date the amount of its Commitment Percentage of the requested
Revolving Credit Loans shall not relieve any other Bank from its several
obligation hereunder to make available to the Agent the amount of such
other Bank's Commitment Percentage of any requested Revolving Credit Loans.
2.8.2. Advances by Agent. The Agent may, unless notified to the
contrary by any Bank on or prior to a Drawdown Date, assume that such Bank
has made available to the Agent on such Drawdown Date the amount of such
Bank's Commitment Percentage of the Revolving Credit Loans to be made on
such Drawdown Date, and the Agent may (but it shall not be required to), in
reliance upon such assumption, make available to the Borrower a
corresponding amount. If any Bank makes available to the Agent such amount
on a date after such Drawdown Date, such Bank shall pay to the Agent on
demand an amount equal to the product of (i) the average computed for the
period referred to in clause (iii) below, of the weighted average interest
rate paid by the Agent for federal funds acquired by the Agent during each
day included in such period, times (ii) the amount of such Bank's
Commitment Percentage of such Revolving Credit Loans, times (iii) a
fraction, the numerator of which is the number of days that elapse from and
including such Drawdown Date to the date on which the amount of such Bank's
Commitment Percentage of such Revolving Credit Loans shall become
immediately available to the Agent, and the denominator of which is 365. A
statement of the Agent submitted to such Bank with respect to any amounts
owing under this paragraph shall be prima facie evidence of the amount due
and owing to the Agent by such Bank. If the amount of such Bank's
Commitment Percentage of such Revolving Credit Loans is not made available
to the Agent by such Bank within three (3) Business Days following such
Drawdown Date, the Agent shall be entitled to recover such amount from the
Borrower on demand, with interest thereon at the rate per annum applicable
to the Revolving Credit Loans made on such Drawdown Date.
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
3.1. Maturity.
The Borrower promises to pay on the Maturity Date, and there shall become
absolutely due and payable on the Maturity Date, all of the Revolving Credit
Loans outstanding on such date, together with any and all accrued and unpaid
interest and fees thereon.
3.2. Mandatory Repayments of Revolving Credit Loans.
If at any time the sum of the outstanding amount of the Revolving Credit
Loans exceeds the Total Commitment, then the Borrower shall immediately pay the
amount of such excess to the Agent for application to the Revolving Credit
Loans.
3.3. Optional Repayments of Revolving Credit Loans.
The Borrower shall have the right, at its election, to repay the
outstanding amount of the Revolving Credit Loans, as a whole or in part, at any
time without penalty or premium, provided that the full or partial prepayment of
the outstanding amount of any Eurodollar Rate Loans pursuant to this
(section)3.3 may be made only on the last day of the Interest Period relating
thereto. The Borrower shall give the Agent, no later than 10:00 a.m., Boston
time, at least three (3) Business Days prior written notice, of any proposed
repayment pursuant to this (section)3.3 of Base Rate Loans, and four (4)
Eurodollar Business Days notice of any proposed repayment pursuant to this
(section)3.3 of Eurodollar Rate Loans, in each case, specifying the proposed
date of payment of Revolving Credit Loans and the principal amount to be paid.
Each such partial prepayment of the Loans shall be in a minimum amount of
$2,000,000 or an integral multiple of $1,000,000 in excess thereof, shall be
accompanied by the payment of accrued interest on the principal repaid to the
date of payment and shall be applied first to the principal of Base Rate Loans
and then to the principal of Eurodollar Rate Loans. Each partial prepayment
shall be allocated among the Banks, in proportion, as nearly as practicable, to
the respective unpaid principal amount of each Bank's Revolving Credit Note,
with adjustments to the extent practicable to equalize any prior repayments not
exactly in proportion.
4. CERTAIN GENERAL PROVISIONS.
4.1. Closing Fee.
The Borrower agrees to pay to the Agent on the Closing Date a closing fee
in the amount set forth in the letter agreement regarding certain fees dated as
of August 4, 1994 between the Borrower, the Parent, and the Agent.
4.2. Agent's Fee.
The Borrower shall pay to the Agent annually in advance, for the Agent's
own account, on the Closing Date and on each anniversary of the Closing Date, an
Agent's fee in the amount set forth in the letter agreement regarding certain
fees dated as of August 4, 1994 between the Borrower, the Parent and the Agent.
4.3. Funds for Payments.
4.3.1. Payments to Agent. All payments of principal, interest,
Facility Fees and any other amounts due hereunder or under any of the other
Loan Documents shall be made to the Agent, for the respective accounts of
the Banks and the Agent, at the Agent's Head Office or at such other
location in the Boston, Massachusetts, area that the Agent may from time to
time designate, in each case in immediately available funds.
4.3.2. No Offset, etc. All payments by the Borrower hereunder and
under any of the other Loan Documents shall be made without setoff or
counterclaim and free and clear of and without deduction for any taxes,
levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or hereafter
imposed or levied by any jurisdiction or any political subdivision thereof
or taxing or other authority therein unless the Borrower is compelled by
law to make such deduction or withholding. If any such obligation is
imposed upon the Borrower with respect to any amount payable by it
hereunder or under any of the other Loan Documents, the Borrower will pay
to the Agent, for the account of the Banks or (as the case may be) the
Agent, on the date on which such amount is due and payable hereunder or
under such other Loan Document, such additional amount in Dollars as shall
be necessary to enable the Banks or the Agent to receive the same net
amount which the Banks or the Agent would have received on such due date
had no such obligation been imposed upon the Borrower. The Borrower will
deliver promptly to the Agent certificates or other valid vouchers for all
taxes or other charges deducted from or paid with respect to payments made
by the Borrower hereunder or under such other Loan Document.
4.4. Computations.
All computations of interest on the Loans and of the Facility Fee and all
other fees shall be based on a 360-day year and paid for the actual number of
days elapsed. Except as otherwise provided in the definition of the term
"Interest Period" with respect to Eurodollar Rate Loans, whenever a payment
hereunder or under any of the other Loan Documents becomes due on a day that is
not a Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension. The
outstanding amount of the Loans as reflected on the Note Records from time to
time shall be considered correct and binding on the Borrower unless within
fifteen (15) Business Days after receipt of any notice by the Agent or any of
the Banks of such outstanding amount, the Agent or such Bank shall notify the
Borrower to the contrary.
4.5. Inability to Determine Eurodollar Rate.
In the event, prior to the commencement of any Interest Period relating to
any Eurodollar Rate Loan, the Agent shall determine that adequate and reasonable
methods do not exist for ascertaining the Eurodollar Rate that would otherwise
determine the rate of interest to be applicable to any Eurodollar Rate Loan
during any Interest Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrower and the
Banks) to the Borrower and the Banks. In such event (i) any Loan Request or
Conversion Request with respect to Eurodollar Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (ii) each
Eurodollar Rate Loan will automatically, on the last day of the then current
Interest Period thereof, become a Base Rate Loan, and (iii) the obligations of
the Banks to make Eurodollar Rate Loans shall be suspended until the Agent
determines that the circumstances giving rise to such suspension no longer
exist, whereupon the Agent shall so notify the Borrower and the Banks.
4.6. Illegality.
Notwithstanding any other provisions herein, if any present or future law,
regulation, treaty or directive or in the interpretation or application thereof
shall make it unlawful for any Bank to make or maintain Eurodollar Rate Loans,
such Bank shall forthwith give notice of such circumstances to the Borrower and
the other Banks and thereupon (i) the commitment of such Bank to make Eurodollar
Rate Loans or convert Loans of another Type to Eurodollar Rate Loans shall
forthwith be suspended and (ii) such Bank's Revolving Credit Loans then
outstanding as Eurodollar Rate Loans, if any, shall be converted automatically
to Base Rate Loans on the last day of each Interest Period applicable to such
Eurodollar Rate Loans or within such earlier period as may be required by law.
The Borrower hereby agrees promptly to pay the Agent for the account of such
Bank, upon demand by such Bank, any additional amounts necessary to compensate
such Bank for any costs incurred by such Bank in making any conversion in
accordance with this (section)4.6, including any interest or fees payable by
such Bank to lenders of funds obtained by it in order to make or maintain its
Eurodollar Loans hereunder.
4.7. Additional Costs, etc.
If any present or future applicable law, which expression, as used herein,
includes statutes, rules and regulations thereunder and interpretations thereof
by any competent court or by any governmental or other regulatory body or
official charged with the administration or the interpretation thereof and
requests, directives, instructions and notices at any time or from time to time
hereafter made upon or otherwise issued to any Bank or the Agent by any central
bank or other fiscal, monetary or other authority (whether or not having the
force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to this
Credit Agreement, the other Loan Documents, such Bank's Commitment or the
Loans (other than taxes based upon or measured by the income or profits of
such Bank or the Agent), or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Bank of the principal of or
the interest on any Loans or any other amounts payable to any Bank or the
Agent under this Credit Agreement or the other Loan Documents, or
(c) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Credit Agreement) any special
deposit, reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held
by, or deposits in or for the account of, or loans by, or commitments of an
office of any Bank, or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, the Loans, such Bank's Commitment, or any class of loans or
commitments of which any of the Loans or such Bank's Commitment forms a
part,
and the result of any of the foregoing clauses (a) through (d) is:
(i) to increase the cost to any Bank of making, funding, issuing,
renewing, extending or maintaining any of the Loans or such Bank's
Commitment, or
(ii) to reduce the amount of principal, interest or other amount
payable to such Bank or the Agent hereunder on account of such Bank's
Commitment or any of the Loans, or
(iii) to require such Bank or the Agent to make any payment or to
forego any interest or other sum payable hereunder, the amount of which
payment or foregone interest or other sum is calculated by reference to the
gross amount of any sum receivable or deemed received by such Bank or the
Agent from the Borrower hereunder, then, and in each such case, the
Borrower will, no later than fifteen (15) days after demand made by such
Bank or (as the case may be) the Agent at any time and from time to time
and as often as the occasion therefor may arise, pay to such Bank or the
Agent such additional amounts as will be sufficient to compensate such Bank
or the Agent for such additional cost, reduction, payment or foregone
interest or other sum.
4.8. Capital Adequacy.
If after the date hereof any Bank or the Agent determines that (i) the
adoption of or change in any law, governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law) regarding
capital requirements for banks or bank holding companies or any change in the
interpretation or application thereof by a court or governmental authority with
appropriate jurisdiction, or (ii) compliance by such Bank or the Agent or any
corporation controlling such Bank or the Agent with any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) of any such entity regarding capital adequacy, has the effect of reducing
the return on such Bank's or the Agent's commitment with respect to any Loans to
a level below that which such Bank or the Agent could have achieved but for such
adoption, change or compliance (taking into consideration such Bank's on the
Agent's then existing policies with respect to capital adequacy and assuming
full utilization of such entity's capital) by any amount deemed by such Bank or
(as the case may be) the Agent to be material, then such Bank or the Agent may
notify the Borrower of such fact. To the extent that the amount of such
reduction in the return on capital is not reflected in the then applicable
interest rate, the Borrower agrees to pay such Bank or (as the case may be) the
Agent for the amount of such reduction in the return on capital as and when such
reduction is determined upon presentation by such Bank or (as the case may be)
the Agent of a certificate in accordance with (section)4.9 hereof. Each Bank
shall allocate such cost increases among its customers in good faith and on an
equitable basis.
4.9. Certificate.
A certificate setting forth any additional amounts payable pursuant to
(sections)4.7 or 4.8 and a brief explanation of such amounts which are due,
submitted by any Bank or the Agent to the Borrower, shall be conclusive, absent
manifest error, that such amounts are due and owing.
4.10. Indemnity.
The Borrower agrees to indemnify each Bank and to hold each Bank harmless
from and against any loss, cost or expense (including loss of anticipated
profits) that such Bank may sustain or incur as a consequence of (i) default by
the Borrower in payment of the principal amount of or any interest on any
Eurodollar Rate Loans as and when due and payable, including any such loss or
expense arising from interest or fees payable by such Bank to lenders of funds
obtained by it in order to maintain its Eurodollar Rate Loans, (ii) default by
the Borrower in making a borrowing after the Borrower has given (or is deemed to
have given) a Loan Request or a Conversion Request relating thereto in
accordance with (sections)2.6 or 2.7 or (iii) the making of any payment of a
Eurodollar Rate Loan or the making of any conversion of any such Loan to a Base
Rate Loan on a day that is not the last day of the applicable Interest Period
with respect thereto, including interest or fees payable by such Bank to lenders
of funds obtained by it in order to maintain any such Loans.
4.11. Interest on Overdue Amounts.
Overdue principal and (to the extent permitted by applicable law) interest
on the Loans and all other overdue amounts payable hereunder or under any of the
other Loan Documents shall bear interest compounded monthly and payable on
demand at a rate per annum equal to two percent (2%) above the Base Rate until
such amount shall be paid in full (after as well as before judgment).
5. GUARANTY.
5.1. Guaranty.
For value received and hereby acknowledged and as an inducement to the
Banks to make the Loans available to the Borrower, the Parent hereby
unconditionally and irrevocably guarantees (i) the full punctual payment when
due, whether at stated maturity, by acceleration or otherwise, of all
Obligations of the Borrower now or hereafter existing hereunder and under the
Notes and the other Loan Documents, whether for principal, interest, fees,
expenses, or otherwise, (ii) the strict performance and observance by the
Borrower of its obligations under this Credit Agreement and the other Loan
Documents and of all agreements, warranties and covenants applicable to the
Borrower in this Credit Agreement; and (iii) the strict performance of all such
obligations under this Credit Agreement and the other Loan Documents which would
become due but for the operation of the automatic stay pursuant to (section)
362(a) of the United States Bankruptcy Code and the operation of (sections)
502(b) and 506(c) of the United States Bankruptcy Code (such obligations
collectively being the "Guaranteed Obligations").
5.2. Guaranty Absolute.
The Parent guarantees that the Guaranteed Obligations will be paid strictly
in accordance with the terms hereof and of the Notes, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of the Banks with respect thereto. The liability of
the Parent under this (section)5 with regard to the Guaranteed Obligations of
the Borrower shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of this Credit Agreement
with respect to the Borrower (with regard to such Guaranteed Obligations),
the Notes of the Borrower, the Loan Documents, or any other agreement or
instrument relating thereto;
(ii) any change in the time of, manner or place of payment of, or in
any other term of, all or any of the Guaranteed Obligations of the Borrower
or any other amendment or waiver of or any consent to departure from this
Credit Agreement (with regard to such Guaranteed Obligations) or the Notes
of the Borrower;
(iii) any exchange, release or nonperfection of any collateral, or any
release or amendment or waiver of or consent to departure from any other
guaranty, for all or any of the Guaranteed Obligations of the Borrower;
(iv) any change in ownership of the Borrower;
(v) any acceptance of any partial payment(s) from the Borrower; or
(vi) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, the Borrower in respect of its Guaranteed
Obligations.
The obligations of the Parent contained in this (section)5 shall continue
to be effective or be reinstated, as the case may be, if at any time any payment
of any of the Guaranteed Obligations is rescinded or must otherwise be returned
by the Banks upon the insolvency, bankruptcy or reorganization of the Borrower
or otherwise, all as though such payment had not been made.
5.3. Effectiveness; Enforcement.
The guaranty obligations of the Parent under this (section)5 shall be
effective and shall be deemed to be made with respect to each Loan made to the
Borrower as of the time it is made. No invalidity, irregularity or
unenforceability by reason of any bankruptcy or similar law, or any law or order
of any government or agency thereof purporting to reduce, amend or otherwise
affect any liability of the Borrower, and no defect in or insufficiency or want
of powers of the Borrower or irregular or improperly recorded exercise thereof,
shall impair, affect, be a defense to or claim against such guaranty. The
agreements of the Parent contained in this (section)5 constitute a continuing
guaranty and shall (i) survive any termination of this Credit Agreement and (ii)
remain in full force and effect until payment in full of, and performance of all
Guaranteed Obligations and all other amounts payable under this (section)5. The
agreements of the Parent contained in this (section)5 are made for the benefit
of the Banks and their successors and assigns, and may be enforced from time to
time as often as occasion therefor may arise and without requirement on the part
of the Banks first to exercise any rights against the Borrower or to exhaust any
remedies available to them against the Borrower or to resort to any other source
or means of obtaining payment of any of the said obligations or to elect any
other remedy.
5.4. Waivers.
To the fullest extent permitted by law, the Parent hereby irrevocably
waives promptness, diligence, presentment, demand, protest notice of acceptance
and any other notice with respect to any of the Guaranteed Obligations and this
(section)5 and any requirement that the Banks protect, secure, perfect or
otherwise take action to ensure any security interest or lien on any property
subject thereto or exhaust any right or take any action against the Borrower or
any other Person or any collateral. The Parent also irrevocably waives, to the
fullest extent permitted by law, all defenses which at any time may be available
to it in respect of the Guaranteed Obligations by virtue of any statute of
limitations, valuation, stay, moratorium law or other similar law now or
hereafter in effect.
5.5. Subrogation Waiver.
Notwithstanding any term contained herein to the contrary, the Parent
hereby waives all rights of subrogation, reimbursement, restitution,
contribution or indemnity against the Borrower, and will not prove any claim in
competition with the Agent or the Banks in respect of any payment hereunder in
any bankruptcy, insolvency, or reorganization case or proceedings of any nature.
6. REPRESENTATIONS AND WARRANTIES.
Each of the Borrower and the Parent represents and warrants to the Banks
and the Agent as follows:
6.1. Corporate Authority.
6.1.1. Incorporation; Good Standing. (i) Each of the Borrower and the
Parent is a corporation, and each of their Subsidiaries is a corporation,
partnership or joint venture, duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, and (ii) each
of the Borrower, the Parent and their Subsidiaries (a) has all requisite
power to own its property and conduct its business as now conducted and as
presently contemplated, and (b) is in good standing and is duly authorized
to do business in each jurisdiction where such qualification is necessary
except where a failure to be so qualified would not have a materially
adverse effect on the business, assets or financial condition of any of the
Borrower or the Parent individually, or the Borrower, the Parent and their
Subsidiaries taken as a whole.
6.1.2. Authorization. The execution, delivery and performance of this
Credit Agreement and the other Loan Documents to which the Borrower, the
Parent or any of their Subsidiaries is or is to become a party and the
transactions contemplated hereby and thereby (i) are within the corporate
authority of such Person, (ii) have been duly authorized by all necessary
corporate proceedings, (iii) do not conflict with or result in any breach
or contravention of any provision of law, statute, rule or regulation to
which any of the Borrower, the Parent or any of their Subsidiaries is
subject or any judgment, order, writ, injunction, license or permit
applicable to any of the Borrower, the Parent or any of their Subsidiaries
and (iv) do not conflict with any provision of the corporate charter or
bylaws of, or any agreement or other instrument binding upon, any of the
Borrower, the Parent or any of their Subsidiaries or any of their
respective properties.
6.1.3. Enforceability. The execution and delivery of this Credit
Agreement and the other Loan Documents to which the Borrower, the Parent or
any of their Subsidiaries is or is to become a party will result in valid
and legally binding obligations of such Person enforceable against it in
accordance with the respective terms and provisions hereof and thereof,
except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting generally
the enforcement of creditors' rights and except to the extent that
availability of the remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding therefor
may be brought.
6.2. Governmental Approvals.
The execution, delivery and performance by the Borrower, the Parent and any
of their Subsidiaries of this Credit Agreement and the other Loan Documents to
which such Person is or is to become a party and the transactions contemplated
hereby and thereby do not require the approval or consent of, or filing with,
any governmental agency or authority other than (i) those already obtained, and
(ii) filings with the Securities and Exchange Commission to be made on or prior
to September 30, 1994.
6.3. Title to Properties; Leases.
Except as indicated on Schedule 6.3 hereto, the Borrower, the Parent and
their Subsidiaries own all of the assets reflected in the consolidated balance
sheet of the Parent and its Subsidiaries as at the Balance Sheet Date or
acquired since that date (except property and assets sold or otherwise disposed
of in the ordinary course of business since that date and other dispositions
permitted pursuant to (section)8.5.2 hereof), subject to no rights of others,
including any mortgages, leases, conditional sales agreements, title retention
agreements, liens or other encumbrances except Permitted Liens.
6.4. Financial Statements.
There has been furnished to the Agent a consolidated balance sheet of the
Parent and its Subsidiaries as at the Balance Sheet Date, and a consolidated
statement of income for the fiscal year then ended, certified by the Parent's
independent certified public accountants. Such balance sheet and statement of
income have been prepared in accordance with generally accepted accounting
principles and fairly present in all material respects the financial condition
of the Parent and its Subsidiaries as at the close of business on the date
thereof and the results of operations for the fiscal year then ended. There are
no contingent liabilities of any of the Borrower, the Parent or any of their
Subsidiaries as of such date involving material amounts, known to the officers
of the Borrower or the Parent not disclosed in said balance sheet and the
related notes thereto.
6.5. No Material Changes, etc.
As of the Closing Date and the first Drawdown Date, there has occurred no
materially adverse change in the financial condition or business of any of the
Borrower, the Parent or their Subsidiaries as shown on or reflected in the
consolidated balance sheet of the Parent and its Subsidiaries as at the Balance
Sheet Date, or the consolidated statement of income for the fiscal year then
ended, other than changes in the ordinary course of business that have not had
any materially adverse effect either individually or in the aggregate on the
business or financial condition of the Borrower or the Parent, or of the Parent
and its Subsidiaries taken as a whole. Since the Balance Sheet Date and prior to
the Closing Date, neither the Borrower nor the Parent has made any Distribution
other than a dividend declared by the Parent in July 1994.
6.6. Franchises, Patents, Copyrights, etc.
Each of the Borrower, the Parent and their Subsidiaries possesses all
material franchises, patents, copyrights, trademarks, trade names, licenses and
permits, and rights in respect of the foregoing, adequate for the conduct of its
business substantially as now conducted without known conflict with any rights
of others.
6.7. Litigation.
Except as provided in Schedule 6.7 hereto, there are no actions, suits,
proceedings or investigations of any kind pending or threatened against any of
the Borrower, the Parent or any of their Subsidiaries before any court, tribunal
or administrative agency or board that, if adversely determined, might, either
in any case or in the aggregate, materially adversely affect the properties,
assets, financial condition or business of the Borrower, the Parent and their
Subsidiaries taken as a whole or materially impair the right of the Borrower,
the Parent and their Subsidiaries, considered as a whole, to carry on business
substantially as now conducted by them, or for which adequate reserves are not
maintained on the consolidated balance sheet of the Parent and its Subsidiaries,
or which question the validity of this Credit Agreement or any of the other Loan
Documents, or any action taken or to be taken pursuant hereto or thereto.
6.8. No Materially Adverse Contracts, etc.
Neither the Borrower nor the Parent nor any of their Subsidiaries is
subject to any charter, corporate or other legal restriction, or any judgment,
decree, order, rule or regulation that has or is expected in the future to have
a materially adverse effect on the business, assets or financial condition of
any of the Borrower, the Parent or any of their Subsidiaries. Neither the
Borrower nor the Parent nor any of their Subsidiaries is a party to any contract
or agreement that has or is expected, in the judgment of the Borrower's or the
Parent's officers, to have any materially adverse effect on the business of any
of the Borrower, the Parent or any of their Subsidiaries.
6.9. Compliance With Other Instruments, Laws, etc.
Neither the Borrower nor the Parent nor any of their Subsidiaries is in
violation of any provision of its charter documents, bylaws, or any agreement or
instrument to which it may be subject or by which it or any of its properties
may be bound or any decree, order, judgment, statute, license, rule or
regulation, in any of the foregoing cases in a manner that could materially
adversely affect the financial condition, properties or business of any of the
Borrower, the Parent or the Parent and its Subsidiaries taken as a whole.
6.10. Tax Status.
Each of the Borrower, the Parent and their Subsidiaries (i) has made or
filed all material federal and state income and all other tax returns, reports
and declarations required by any jurisdiction to which any of them is subject,
(ii) has paid all material taxes and other governmental assessments and charges
shown or determined to be due on such returns, reports and declarations, except
those being contested in good faith and by appropriate proceedings and (iii) has
set aside on its books provisions reasonably adequate for the payment of all
material taxes for periods subsequent to the periods to which such returns,
reports or declarations apply. There are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and the
respective officers of each of the Borrower and the Parent know of no basis for
any such claim.
6.11. No Event of Default.
No Default or Event of Default has occurred and is continuing.
6.12. Holding Company and Investment Company Acts.
Neither the Borrower nor the Parent nor any of their Subsidiaries is a
"holding company", or a "subsidiary company" of a "holding company", or an
affiliate" of a "holding company", as such terms are defined in the Public
Utility Holding Company Act of 1935; nor is it an "investment company", or an
"affiliated company" or a "principal underwriter" of an "investment company", as
such terms are defined in the Investment Company Act of 1940.
6.13. Absence of Financing Statements, etc.
Except with respect to Permitted Liens and except as set forth on Schedule
6.13 attached hereto, as of the Closing Date in respect of all active domestic
operations of the Borrower and the Parent there is no financing statement,
security agreement, chattel mortgage, real estate mortgage or other document
filed or recorded with any filing records, registry, or other public office,
that purports to cover, affect or give notice of any present or possible future
lien on, or security interest in, any assets or property of any of the Borrower,
the Parent or any of their Subsidiaries or rights relating thereto which would
have a material adverse effect on the business, assets, property or financial
condition of any of the Borrower, the Parent or any of their Subsidiaries.
6.14. Certain Transactions.
Except for arm's length transactions pursuant to which the Borrower, the
Parent or any of their Subsidiaries makes payments in the ordinary course of
business upon terms no less favorable than such Person could obtain from third
parties and except for payment of certain legal fees of a voting trust for the
Horne family stock, and payment of expenses for preparation of tax returns of
certain officers and directors of the Parent and its Subsidiaries and other
transactions between the Borrower and the Parent or any of their Subsidiaries
deemed by management of the Borrower and the Parent in good faith to be
beneficial to the Borrower and the Parent, none of the officers, directors,
employees or Affiliates of any of the Borrower, the Parent or any of their
Subsidiaries is presently a party to any transaction with any of the Borrower,
the Parent or any of their Subsidiaries (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, director, Affiliate or any such employee or, to the knowledge of the
Borrower or the Parent or any of their Subsidiaries, any corporation,
partnership, trust or other entity in which any officer, director, Affiliate or
any such employee has a substantial interest or is an officer, director, trustee
or partner.
6.15. Employee Benefit Plans.
6.15.1. In General. Except for the Jameco Industries, Inc. Pension
Plan, each Employee Benefit Plan has been maintained and operated in
compliance in all material respects with the provisions of ERISA and, to
the extent applicable, the Code, including but not limited to the
provisions thereunder respecting prohibited transactions. Each of the
Borrower and the Parent has heretofore delivered to the Agent the most
recently completed annual report, Form 5500, with all required attachments,
and actuarial statement required to be submitted under (section)103(d) of
ERISA, with respect to each Guaranteed Pension Plan.
6.15.2. Terminability of Welfare Plans. Under each Employee Benefit
Plan which is an employee welfare benefit plan within the meaning of
(section)3(1) or (section)3(2)(B) of ERISA, no benefits are due unless the
event giving rise to the benefit entitlement occurs prior to plan
termination (except as required by Title I, Subtitle B Part 6 of ERISA).
Each of the Borrower, the Parent or an ERISA Affiliate thereof, as
appropriate, may terminate each such Plan at any time (or at any time
subsequent to the expiration of any applicable bargaining agreement) in the
discretion of the Borrower, the Parent or such ERISA Affiliate, as the case
may be, without liability to any Person other than those liabilities
relating to events occurring prior to termination.
6.15.3. Guaranteed Pension Plans. Each contribution required to be
made to a Guaranteed Pension Plan, whether required to be made to avoid the
incurrence of an accumulated funding deficiency, the notice or lien
provisions of (section)302(f) of ERISA, or otherwise, has been timely made.
No waiver of an accumulated funding deficiency or extension of amortization
periods has been received with respect to any Guaranteed Pension Plan. No
liability to the PBGC (other than required insurance premiums, all of which
have been paid) has been incurred by any of the Borrower, the Parent or any
ERISA Affiliate thereof with respect to any Guaranteed Pension Plan and
there has not been any ERISA Reportable Event, or any other event or
condition which presents a material risk of termination of any Guaranteed
Pension Plan by the PBGC. Based on the latest valuation of each Guaranteed
Pension Plan (which in each case occurred within twelve months of the date
of this representation), and on the actuarial methods and assumptions
employed for that valuation, the aggregate benefit liabilities of all
Guaranteed Pension Plans within the meaning of (section)4001 of ERISA did
not exceed the aggregate value of the assets of all Guaranteed Pension
Plans, disregarding for this purpose the benefit liabilities and assets of
any Guaranteed Pension Plan with assets in excess of benefit liabilities,
by more than $2,500,000.
6.15.4. Multiemployer Plans. Neither the Borrower nor the Parent nor
any ERISA Affiliate thereof has incurred any material liability (including
secondary liability) to any Multiemployer Plan as a result of a complete or
partial withdrawal from such Multiemployer Plan under (section)4201 of
ERISA or as a result of a sale of assets described in (section)4204 of
ERISA. Neither the Borrower nor the Parent nor any ERISA Affiliate thereof
has been notified that any Multiemployer Plan is in reorganization or
insolvent under and within the meaning of (section)4241 or (section)4245 of
ERISA or that any Multiemployer Plan intends to terminate or has been
terminated under (section)4041A of ERISA.
6.16. Regulations U and X.
The proceeds of the Loans shall be used for working capital and general
corporate purposes of the Borrower, the Parent and their Subsidiaries, including
acquisitions permitted by (section)8.5.1 hereof. No portion of any Loan is to be
used for the purpose of purchasing or carrying any "margin security" or "margin
stock" as such terms are used in Regulations U and X of the Board of Governors
of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
6.17. Environmental Compliance.
Except as set forth on Schedule 6.17 attached hereto, each of Borrower and
the Parent has taken all commercially reasonable steps (determined as of the
time of investigation) to investigate the past and present condition and usage
of the Real Estate and the operations conducted thereon and, based upon such
diligent investigation, has determined that:
(a) neither the Borrower nor the Parent nor any of their Subsidiaries
nor any operation on the Real Estate is in violation, or alleged violation,
of any judgment, decree, order, law, license, rule or regulation pertaining
to environmental matters, including without limitation, those arising under
the Resource Conservation and Recovery Act ("RCRA"), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 as amended
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986
("SARA"), the Federal Clean Water Act, the Federal Clean Air Act, the Toxic
Substances Control Act, or any state or local statute, regulation,
ordinance, order or decree relating to health, safety or the environment
(hereinafter "Environmental Laws"), which violation could reasonably be
expected to have a material adverse effect on the environment or the
business, assets or financial condition of the Borrower, the Parent and
their Subsidiaries taken as a whole;
(b) neither the Borrower nor the Parent nor any of their Subsidiaries
has received notice from any third party including, without limitation, any
federal, state or local governmental authority, (i) that any one of them
has been identified by the United States Environmental Protection Agency
("EPA) as a potentially responsible party under CERCLA with respect to a
site listed on the National Priorities List, 40 C.F.R. Part 300 Appendix B;
(ii) that any hazardous waste, as defined by 42 U.S.C. (section)6903(5),
any hazardous substances as defined by 42 U.S.C. (section)9601(14), any
pollutant or contaminant as defined by 42 U.S.C. (section)9601(33) and any
toxic substances, oil or hazardous materials or other chemicals or
substances regulated by any Environmental Laws ("Hazardous Substances")
which any one of them has generated, transported or disposed of has been
found at any site at which a federal, state or local agency or other third
party has conducted or has ordered that any of the Borrower, the Parent or
any of their Subsidiaries conduct a remedial investigation, removal or
other response action pursuant to any Environmental Law; or (iii) that it
is or shall be a named party to any claim, action, cause of action,
complaint, or legal or administrative proceeding (in each case, contingent
or otherwise) arising out of any third party's incurrence of costs,
expenses, losses or damages of any kind whatsoever in connection with the
release of Hazardous Substances, liability for which could reasonably be
expected to have a material adverse effect on the business, assets or
financial condition of the Borrower, the Parent and their Subsidiaries,
taken as a whole;
(c) (i) to the best of the Borrower's, the Parent's and their
Subsidiaries' knowledge, no portion of the Real Estate has been used for
the handling, processing, storage or disposal of Hazardous Substances
except in material compliance with applicable Environmental Laws; (ii) in
the course of any activities conducted by any of the Borrower, the Parent,
any of their Subsidiaries or to the best knowledge of the executive
officers of the Borrower or the Parent without independent investigation,
operators of their properties, no Hazardous Substances have been generated
or are being used on the Real Estate except in material compliance with
applicable Environmental Laws; (iii) there have been no releases (i.e. any
past or present releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, disposing or dumping) or
threatened releases of Hazardous Substances on, upon, into or from the
properties of any of the Borrower, the Parent or any of their Subsidiaries,
which releases or threatened releases could reasonably be expected have a
material adverse effect on the value of any of the Real Estate or adjacent
properties; (iv) to the best of the Borrower's and the Parent's knowledge,
there have been no releases on, upon, from or into any real property in the
vicinity of any of the Real Estate which, through soil or groundwater
contamination, may have come to be located on, and which would have a
material adverse effect on the value of, the Real Estate; and (v) in
addition, any Hazardous Substances that have been generated on any of the
Real Estate have been managed or disposed of in material compliance with
applicable Environmental Laws, and, to the best of the Borrower's, the
Parent's, and their Subsidiaries' knowledge, without independent
investigation, the transporters and facilities utilized by the Parent, the
Borrower, or any of their Subsidiaries to transport or dispose of such
Person's Hazardous Substances have not failed to operate in compliance with
any permits authorizing such activities and are not in material violation
of any applicable Environmental Laws; and
(d) neither the Borrower nor the Parent nor any of their Subsidiaries
nor any of the Real Estate is subject, by virtue of the transactions set
forth herein and contemplated hereby, to any applicable environmental law
requiring the performance of Hazardous Substances site assessments, or the
removal or remediation of Hazardous Substances, or the giving of notice to
any governmental agency or the recording or delivery to other Persons of an
environmental disclosure document or statement.
6.18. Subsidiaries, etc.
Schedule 6.18 sets forth all of the Subsidiaries of each of the Parent and
the Borrower. Except as set forth on Schedule 6.18 hereto, neither the Borrower
nor the Parent nor any of their Subsidiaries is engaged in any joint venture or
partnership with any other person.
7. AFFIRMATIVE COVENANTS OF THE BORROWER AND THE PARENT.
Each of Borrower and the Parent covenants and agrees that, so long as any
Obligation or Note is outstanding or any Bank has any obligation to make any
Loans:
7.1. Punctual Payment.
Each of the Borrower and the Parent will duly and punctually pay or cause
to be paid the principal and interest on the Loans and the Facility Fee and
Agent's fee provided for in this Credit Agreement, all in accordance with the
terms of this Credit Agreement and the Notes.
7.2. Maintenance of Office.
The Borrower and the Parent will each maintain its chief executive office
in Wilmington, Delaware and North Andover, Massachusetts, respectively, or at
such other place in the United States of America as such Person shall designate
upon written notice to the Agent, where notices, presentations and demands to or
upon such Person in respect of the Loan Documents may be given or made.
7.3. Records and Accounts.
Each of the Borrower and the Parent will (i) keep, and cause each of its
Subsidiaries to keep, true and accurate records and books of account in which
full, true and correct entries will be made in accordance with generally
accepted accounting principles and (ii) maintain adequate accounts and reserves
for all taxes (including income taxes), depreciation, depletion, obsolescence
and amortization of its properties and the properties of its Subsidiaries,
contingencies, and other reserves, all in accordance with generally accepted
accounting principles.
7.4. Financial Statements, Certificates and Information.
Each of the Borrower and the Parent will deliver to the Agent and the
Banks:
(a) as soon as practicable, but in any event not later than ninety
(90) days after the end of each fiscal year of the Parent, the consolidated
balance sheet of the Parent and its Subsidiaries, each as at the end of
such year, and the related consolidated statement of income and
consolidated statement of cash flow for such year, each setting forth in
comparative form the figures for the previous fiscal year and all such
consolidated statements to be in reasonable detail, prepared in accordance
with generally accepted accounting principles, and certified without
qualification by Ernst & Young or any other of the six largest firms of
independent certified public accountants located in the United States,
together with a written statement from such accountants to the effect that
they have read the covenants set forth in (sections)8.1(h), 8.3(i) and (j)
and 9 of this Credit Agreement and the relevant definitions and provisions
applicable thereto, and that, in making the examination necessary to said
certification, they have obtained no knowledge of any Default or Event of
Default, or, if such accountants shall have obtained knowledge of any then
existing Default or Event of Default they shall disclose in such statement
any such Default or Event of Default; provided that such accountants shall
not be liable to the Banks for failure to obtain knowledge of any Default
or Event of Default;
(b) as soon as practicable, but in any event not later than forty-five
(45) days after the end of each of the fiscal quarters of the Parent (other
than the fourth fiscal quarter of each fiscal year), copies of the
unaudited consolidated balance sheet of the Parent and its Subsidiaries,
each as at the end of such quarter, and the related consolidated statement
of income and consolidated statement of cash flow for the portion of the
Parent's fiscal year then elapsed, all in reasonable detail and prepared in
accordance with generally accepted accounting principles (subject to
customary exceptions for interim financial statements), together with a
certification by the principal financial or accounting officer of the
Parent that the information contained in such financial statements fairly
presents the financial position of the Parent and its Subsidiaries on the
date thereof (subject to year-end adjustments);
(c) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement certified by the
principal financial or accounting officer of each of the Borrower and the
Parent in substantially the form of Exhibit C hereto and setting forth in
reasonable detail computations evidencing compliance with the covenants
contained in (section)9 and (if applicable) reconciliations to reflect
changes in generally accepted accounting principles since the Balance Sheet
Date;
(d) promptly following the filing or mailing thereof, copies of all
material of a financial nature filed with the Securities and Exchange
Commission or sent generally to the stockholders of the Borrower; and
(e) from time to time such other financial data and information
(including accountants' management letters) as the Agent or any Bank may
reasonably request.
7.5. Notices.
7.5.1. Defaults.
The Borrower will promptly notify the Agent and each of the Banks in
writing of the occurrence of any Default or Event of Default. If any Person
shall give any notice or take any other action in respect of a claimed default
(whether or not constituting an Event of Default) under this Credit Agreement or
any other note, evidence of indebtedness, indenture or other obligation to which
or with respect to which any of the Borrower, the Parent or any of their
Subsidiaries is a party or obligor, whether as principal or surety, the Borrower
shall forthwith give written notice thereof to each of the Banks, describing the
notice or action and the nature of the claimed default.
7.5.2. Environmental Events.
Each of the Borrower and the Parent will, and will cause each of its
Subsidiaries to, promptly give notice to the Agent (i) of any violation of any
Environmental Law that any of the Borrower, the Parent or any of their
Subsidiaries reports in writing or is reportable by such Person in writing (or
for which any written report supplemental to any oral report is made) to any
federal, state or local environmental agency and (ii) upon becoming aware
thereof, of any inquiry, proceeding, investigation, or other action, including a
notice from any agency of potential environmental liability, or any federal,
state or local environmental agency or board, that has the potential to
materially affect the assets, liabilities, financial conditions or operations of
the Borrower, the Parent and their Subsidiaries, taken as a whole.
7.5.3. Notice of Litigation and Judgments.
Each of the Borrower and the Parent will, and will cause each of its
Subsidiaries to, give notice to the Agent in writing within fifteen (15) days of
becoming aware of any litigation or proceedings threatened in writing or any
pending litigation and proceedings affecting any of the Borrower, the Parent or
any of their Subsidiaries or to which any of the Borrower, the Parent or any of
their Subsidiaries is or becomes a party involving an uninsured claim against
any of the Borrower, the Parent or any of their Subsidiaries that could
reasonably be expected to have a materially adverse effect on any of the
Borrower, the Parent or any of their Subsidiaries and stating the nature and
status of such litigation or proceedings. Each of the Borrower and the Parent
will, and will cause each of their Subsidiaries to, give notice to the Agent, in
writing, in form and detail satisfactory to the Agent, within ten (10) days of
any judgment not covered by insurance, final or otherwise, against any of the
Borrower, the Parent or any of their Subsidiaries in an amount in excess of
$5,000,000.
7.6. Corporate Existence; Maintenance of Properties.
Each of the Borrower and the Parent will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence,
rights and franchises and those of its Subsidiaries, except as otherwise
permitted by (section)8.5.1. Each of the Borrower and the Parent (i) will cause
all of its properties and those of its Subsidiaries used or useful in the
conduct of its business or the business of its Subsidiaries to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment, (ii) will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Borrower or the Parent may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times,
and (iii) will, and will cause each of its Subsidiaries to, continue to engage
primarily in the principal lines of business now conducted by them and in
similar or related businesses; provided that nothing in this (section)7.6 shall
prevent the Borrower or the Parent from discontinuing the operation and
maintenance of any of its properties or those of its Subsidiaries if such
discontinuance is, in the judgment of the Borrower or the Parent, desirable in
the conduct of its or their business and that do not in the aggregate materially
adversely affect the business of the Borrower, the Parent and their
Subsidiaries.
7.7. Insurance.
Each of the Borrower and the Parent will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such casualties
and contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and in
amounts, containing such terms, in such forms and for such periods as may be
reasonable and prudent.
7.8. Taxes.
Each of the Borrower and the Parent will, and will cause each of its
Subsidiaries to, duly pay and discharge, or cause to be paid and discharged,
before the same shall become overdue, all material taxes, assessments and other
governmental charges (other than taxes, assessments and other governmental
charges imposed by foreign jurisdictions that in the aggregate are not material
to the business or assets of any of the Borrower, the Parent or any of their
Subsidiaries on an individual basis or of the Borrower, the Parent and their
Subsidiaries on a consolidated basis) imposed upon it and its real properties,
sales and activities, or any part thereof, or upon the income or profits
therefrom, as well as all material claims for labor, materials, or supplies that
if unpaid might by law become a lien or charge upon any of its property;
provided that any such tax, assessment, charge, levy or claim need not be paid
if the validity or amount thereof shall currently be contested in good faith by
appropriate proceedings and if the Borrower or the Parent or such Subsidiary
shall have set aside on its books adequate reserves with respect thereto; and
provided further that the Borrower, the Parent and each of their Subsidiaries
will pay all such taxes, assessments, charges, levies or claims forthwith upon
the commencement of proceedings to foreclose any lien that may have attached as
security therefor.
7.9. Inspection of Properties and Books, etc.
7.9.1. General. Each of the Borrower and the Parent shall permit the
Banks, through the Agent or any of the Banks' other designated
representatives, to visit and inspect any of the properties of the Borrower
or the Parent or any of their Subsidiaries to examine the books of account
and other records (to the extent not confidential, and if any of such
materials are confidential, subject to the Agent's ability to discuss with
representatives of the Borrower, the Parent and their Subsidiaries and
their professional advisors the matters covered by such confidential
material) of any of the Borrower, the Parent and their Subsidiaries (and to
make copies thereof and extracts therefrom), and to discuss the affairs,
finances and accounts of the Borrower, the Parent and their Subsidiaries
with, and to be advised as to the same by, its and their officers, all at
such reasonable times and intervals during regular business hours as the
Agent or any Bank may reasonably request.
7.9.2. Communication with Accountants. Each of the Borrower and the
Parent authorizes the Agent and the Banks (i) to obtain from the
Borrower's, the Parent's and their Subsidiaries' independent certified
public accountants copies of any and all accountants' management letters
prepared with respect to the Borrower, the Parent or any of their
Subsidiaries, (ii) to communicate directly with such accountants with
regard to matters disclosed in such management letters, and (iii) with the
consent of the Borrower or the Parent, which consent shall not be
unreasonably withheld or delayed, to communicate directly with such
accountants with regard to all other matters concerning the business,
financial condition and other affairs of any of the Borrower, the Parent or
any of their Subsidiaries, provided that after the occurrence and during
the continuance of a Default or an Event of Default, no such consent shall
be required. Each of the Borrower, the Parent and their Subsidiaries hereby
authorize and direct such accountants to disclose to the Agent and the
Banks all such management letters and any and all additional financial
statements and supporting financial documents and schedules with respect to
the business, financial condition and other affairs of any of the Borrower,
the Parent or any of their Subsidiaries in connection with such
communications. At the request of the Agent, the Borrower, the Parent or
the appropriate Subsidiary shall deliver a letter addressed to such
accountants instructing them to comply with the provisions of this
(section)7.9.2.
7.10. Compliance with Laws, Contracts, Licenses, and Permits.
Each of the Borrower and the Parent will, and will cause each of its
Subsidiaries to, comply with (i) the applicable laws and regulations wherever
its business is conducted, including all Environmental Laws, (ii) the provisions
of its charter documents and by-laws, (iii) all agreements and instruments by
which it or any of its properties may be bound and (iv) all applicable decrees,
orders, and judgments, except where non-compliance could not have a materially
adverse effect on the business, assets or financial condition of any of the
Borrower or the Parent individually, or the Parent and its Subsidiaries taken as
a whole. If at any time while any Loan or Note is outstanding or any Bank has
any obligation to make Loans hereunder, any authorization, consent, approval,
permit or license from any officer, agency or instrumentality of any government
shall become necessary or required in order that the Borrower or the Parent may
fulfill any of its obligations hereunder, the Borrower or, as the case may be,
the Parent will immediately take or cause to be taken all reasonable steps
within the power of such Person to obtain such authorization, consent, approval,
permit or license and furnish the Banks with evidence thereof.
7.11. Employee Benefit Plans.
Each of the Borrower and the Parent will (i) promptly upon filing the same
with the Department of Labor or Internal Revenue Service, furnish to the Agent a
copy of the most recent actuarial statement required to be submitted under
(section)103(d) of ERISA and Annual Report, Form 5500, with all required
attachments, in respect of each Guaranteed Pension Plan and (ii) promptly upon
receipt or dispatch, furnish to the Agent any notice, report or demand sent or
received in respect of a Guaranteed Pension Plan under (sections)302, 4041,
4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect of a Multiemployer
Plan, under (sections)4041A, 4202, 4219, 4242, or 4245 of ERISA.
7.12. Use of Proceeds.
The Borrower, the Parent and their Subsidiaries will use the proceeds of
the Loans solely for working capital and general corporate purposes, including
acquisitions permitted by (section)8.5.1.
7.13. Further Assurances.
Each of the Borrower and the Parent will, and will cause each of its
Subsidiaries to, cooperate with the Banks and the Agent and execute such further
instruments and documents as the Banks or the Agent shall reasonably request to
carry out to their reasonable satisfaction the transactions contemplated by this
Credit Agreement and the other Loan Documents.
8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER AND THE PARENT.
Each of the Borrower and the Parent covenants and agrees that, so long as
any Obligations or Note is outstanding or any Bank has any obligation to make
any Loans:
8.1. Restrictions on Indebtedness.
Neither Borrower nor the Parent will, nor will they permit any of their
Subsidiaries to, create, incur, assume, guarantee or be or remain liable,
contingently or otherwise, with respect to any Indebtedness other than:
(a) Indebtedness to the Banks and the Agent arising under any of the
Loan Documents;
(b) current liabilities of the Borrower, the Parent or their
Subsidiaries incurred in the ordinary course of business not incurred
through (i) the borrowing of money, or (ii) the obtaining of credit except
for credit on an open account basis customarily extended and in fact
extended in connection with normal purchases of goods and services, and any
letters of credit issued for the account of the Borrower, the Parent or any
of their Subsidiaries in support of such permitted current liabilities;
(c) Indebtedness in respect of taxes, assessments, governmental
charges or levies and claims for labor, materials and supplies to the
extent that payment therefor shall not at the time be required to be made
in accordance with the provisions of (section)7.8;
(d) Indebtedness in respect of judgments or awards that have been in
force for less than the applicable period for taking an appeal so long as
execution is not levied thereunder or in respect of which the Borrower, the
Parent or the applicable Subsidiary shall at the time in good faith be
prosecuting an appeal or proceedings for review and in respect of which a
stay of execution shall have been obtained pending such appeal or review;
(e) endorsements for collection, deposit or negotiation and warranties
of products or services, in each case incurred in the ordinary course of
business;
(f) Indebtedness existing on the date of this Credit Agreement and
listed and described on Schedule 8.1 hereto ("Existing Indebtedness"), and
any refinancings of Existing Indebtedness, provided that at no time shall
the sum of (i) the aggregate principal amount of Existing Indebtedness
remaining outstanding at such time plus (ii) the aggregate principal amount
of Indebtedness in respect of such refinancings at such time exceed the
aggregate principal amount of Existing Indebtedness on the Closing Date;
(g) Indebtedness of the Borrower or the Parent to any Subsidiary of
the Borrower or the Parent, and Indebtedness of any Subsidiary of the
Borrower or the Parent to the Borrower or the Parent or any other
Subsidiary of the Borrower or the Parent;
(h) other Indebtedness for borrowed money and credit received
(including Capitalized Leases, letters of credit issued for the account of
the Borrower, the Parent or any of their Subsidiaries, and Indebtedness
incurred pursuant to the sale and leaseback of any property permitted by
the provisions of (section)8.6 hereof), provided that at no time shall the
aggregate amount of such Indebtedness exceed 10% of the Consolidated Total
Assets of the Parent and its Subsidiaries determined as of the last day of
the fiscal year of the Parent most recently ended (such Indebtedness
permitted by this subsection (h), "Other Indebtedness"); and
(i) (a) in addition to, or in combination with, Indebtedness permitted
by clause (h) of this (section)8.1, with respect to any Subsidiary acquired
by the Borrower, the Parent or any of their Subsidiaries after the Closing
Date, Indebtedness of such newly acquired Subsidiary in existence as of the
date of such acquisition, provided that such Indebtedness is not incurred
in contemplation of such acquisition, and any guaranties of such
Indebtedness issued by the Borrower, the Parent or any of its Subsidiaries,
including without limitation, with respect to any indemnities for
environmental, employee benefit, tax, litigation and similar liabilities,
but excluding the acquisition price of such Subsidiary; provided that at no
time shall the outstanding aggregate amount of such Indebtedness
(excluding, to the extent duplicative, such guaranties) exceed $10,000,000,
and (b) with respect to any Subsidiary acquired or to be acquired after the
Closing Date, guaranties by the Parent of the acquisition price of such new
Subsidiary which price shall not include any of the obligations
contemplated by clause (a) above.
8.2. Restrictions on Liens.
Neither the Borrower nor the Parent, will, nor will they permit any of
their Subsidiaries to, (i) create or incur or suffer to be created or incurred
or to exist any lien, encumbrance, mortgage, pledge, charge, restriction or
other security interest of any kind upon any of its property or assets of any
character whether now owned or hereafter acquired, or upon the income or profits
therefrom; (ii) transfer any of such property or assets or the income or profits
therefrom for the purpose of subjecting the same to the payment of Indebtedness
or performance of any other obligation in priority to payment of its general
creditors; (iii) acquire, or agree or have an option to acquire, any property or
assets upon conditional sale or other title retention or purchase money security
agreement, device or arrangement; (iv) suffer to exist for a period of more than
thirty (30) days after the same shall have been incurred any Indebtedness or
claim or demand against it that if unpaid might by law or upon bankruptcy or
insolvency, or otherwise, be given any priority whatsoever over its general
creditors; or (v) sell, assign, pledge or otherwise transfer any accounts,
contract rights, general intangibles, chattel paper or instruments, with or
without recourse; provided that the Borrower, the Parent and any Subsidiary of
the Borrower or the Parent may create or incur or suffer to be created or
incurred or to exist:
(a) liens in favor of the Borrower or the Parent on all or part of the
assets of Subsidiaries of the Borrower or the Parent securing Indebtedness
owing by Subsidiaries of the Borrower or the Parent to the Borrower or the
Parent, as the case may be;
(b) liens to secure taxes, assessments and other government charges in
respect of obligations not overdue or liens on properties to secure claims
for labor, material or supplies in respect of obligations not overdue;
(c) deposits or pledges made in connection with, or to secure payment
of, workmen's compensation, unemployment insurance, old age pensions or
other social security obligations, or deposits to secure the performance of
tenders, bids and other contracts (other than for the payment of borrowed
money) arising in the ordinary course of business;
(d) liens in respect of the interest of lessors under leases of real
property;
(e) liens on properties in respect of judgments or awards, the
Indebtedness with respect to which is permitted by (section)8.1(d);
(f) liens of carriers, warehousemen, mechanics and materialmen, and
other like liens on properties, in existence less than 120 days from the
date of creation thereof in respect of obligations not overdue;
(g) encumbrances consisting of easements, rights of way, zoning
restrictions, restrictions on the use of real property and defects and
irregularities in the title thereto, landlord's or lessor's liens under
leases to which the Borrower, the Parent or any of their Subsidiaries is a
party, and other minor liens or encumbrances none of which in the opinion
of the Borrower or the Parent interferes materially with the use of the
property affected in the ordinary conduct of the business of the Borrower,
the Parent and their Subsidiaries, which defects do not individually or in
the aggregate have a materially adverse effect on the business of the
Borrower, the Parent or any of their Subsidiaries individually or of the
Borrower, the Parent and their Subsidiaries on a consolidated basis;
(h) presently outstanding liens listed on Schedule 8.2 hereto, and
liens to secure refinancings of Existing Indebtedness secured by presently
outstanding liens to the extent and up to the amount that the refinanced
Existing Indebtedness was secured; provided that the refinancing of such
Existing Indebtedness is permitted by the provisions of (section)8.1(f)
hereof; and
(i) liens securing Other Indebtedness.
8.3. Restrictions on Investments.
Each of the Borrower and the Parent will not, and will not permit any of
their Subsidiaries to, make or permit to exist or to remain outstanding any
Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United States
of America that mature within one (1) year from the date of purchase by the
Borrower, the Parent or the applicable Subsidiary;
(b) demand deposits, certificates of deposit, bankers acceptances and
time deposits of United States banks having total assets in excess of
$1,000,000,000;
(c) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States of
America or any state thereof that at the time of purchase have been rated
and the ratings for which are not less than "P 1" if rated by Moody's
Investors Services, Inc., and not less than "A 1" if rated by Standard and
Poor's; or other debt securities issued by such a corporation that at the
time of purchase have been rated and the ratings for which are not less
than "A" if rated by either Moody's Investors Services, Inc. or Standard
and Poor's Corporation;
(d) obligations issued by (i) any state of the United States of
America or (ii) any political subdivision of any such state or any public
instrumentality thereof which are rated and the ratings for which are not
less than "Aaa" if rated by Moody's Investors Services, Inc. or "AAA" if
rated by Standard & Poor's Corporation;
(e) Investments in shares of any so-called "money market fund"
provided that such fund is registered under the Investment Company Act of
1940, has net assets of at least $100,000,000, has an investment portfolio
with an average maturity of 365 days or less and is not considered to be a
"high-yield" fund;
(f) Investments existing on the date hereof and listed on Schedule 8.3
hereto;
(g) Investments with respect to Indebtedness permitted by
(section)8.1(g) so long as the applicable Subsidiaries remain Subsidiaries
of the Borrower or the Parent, as the case may be;
(h) Investments consisting of the guaranty by the Parent of the
Obligations hereunder, or Investments by the Borrower or the Parent in
their Subsidiaries;
(i) Investments consisting of (A) loans and advances to employees for
entertainment, travel and other similar expenses in the ordinary course of
business not to exceed $200,000 in the aggregate at any time outstanding,
(B) loans to employees of the Parent, pursuant to the terms of the Parent's
non-qualified stock option plan, secured by pledges of the stock of the
Parent owned by such employee, not to exceed $1,000,000 in the aggregate at
any time outstanding and (C) loans and advances to employees for moving or
relocation expenses not to exceed $1,000,000 in the aggregate at any time
outstanding;
(j) Investments (i) in joint ventures in lines of business that are
similar or related to a line of business in which the Borrower, the Parent,
or any of their Subsidiaries is then engaged, not to exceed $25,000,000 in
the aggregate at any time, and (ii) if the Parent shall own, at any time,
less than a majority (by number of votes) of the outstanding Voting Stock
of Tianjin Tanggu Watts Valve Company Ltd., by the Parent in Tianjin Tanggu
Watts Valve Company Ltd. not to exceed $10,000,000 in the aggregate plus
the amount of any unutilized portion of the $25,000,000 in Investments
otherwise permitted by this clause (j) at any time thereafter;
(k) Investments in stock or asset acquisitions permitted by
(section)8.5.1 hereof.
8.4. Distributions.
The Borrower will not make any Distributions unless both immediately before
and immediately after such Distribution, no Default or Event of Default has
occurred or is continuing.
8.5. Merger, Consolidation.
8.5.1. Mergers and Acquisitions.
Neither the Borrower nor the Parent will, nor will they permit any
of their Subsidiaries to,
(a) become a party to any merger or consolidation with any other
party, unless (i) such other party is in a line of business that is similar
or related to a line of business in which the Borrower, the Parent, or any
of their Subsidiaries is then engaged, (ii) the survivor of such merger or
consolidation is the Borrower, the Parent or a Subsidiary of the Parent
which is a corporation organized and existing under the laws of the United
States or a state thereof, provided that each of the Borrower and the
Parent shall survive any merger or consolidation to which it is a party,
and (iii) immediately following such merger or consolidation no Default or
Event of Default has occurred or is continuing; or
(b) agree to or effect any asset acquisition or stock acquisition
(other than the acquisition of assets in the ordinary course of business
consistent with past practices) unless (i) the business being so acquired
is in a line of business that is similar or related to a line of business
in which the Borrower, the Parent, or any of their Subsidiaries is then
engaged, (ii) except to the extent permitted by (section)8.3(j), the
business being so acquired will be run as part of the Parent or a
Subsidiary of the Parent, and (iii) immediately following such acquisition
no Default or Event of Default has occurred or is continuing.
8.5.2. Disposition of Assets.
Neither the Borrower nor the Parent will, nor will they permit any of their
Subsidiaries to, become a party to or agree to or effect any disposition of
assets (including capital stock), other than (i) the sale of inventory and
obsolete equipment in the ordinary course of business, consistent with past
practices, or (ii) prior to the occurrence of a Default or Event of Default, the
disposition or sale of assets, in one or more arms-length transactions, having a
cumulative aggregate sales price not to exceed (A) in any fiscal year of the
Parent, $70,000,000, and (B) in the aggregate from the Closing Date,
$100,000,000; provided that, the value as of the date of disposition of any
non-cash assets received by the Borrower, the Parent or any Subsidiary in
payment of any portion of the purchase price shall be equal to the fair market
value of such assets.
8.6. Sale and Leaseback.
Neither the Borrower nor the Parent will, nor will they permit any of their
Subsidiaries to, enter into any arrangement, directly or indirectly, whereby any
of the Borrower, the Parent or any of their Subsidiaries shall sell or transfer
any property owned by it in order then or thereafter to lease such property or
lease other property that such Person intends to use for substantially the same
purpose as the property being sold or transferred ("Sale and Leaseback
Arrangements"), other than, so long as no Default or Event of Default shall have
occurred and be continuing, Sale and Leaseback Arrangements with respect to
property, the net book value of which determined on a cumulative basis from the
Closing Date, shall not exceed $5,000,000 in the aggregate.
8.7. Compliance with Environmental Laws.
Neither the Borrower nor the Parent will, nor will they permit any of their
Subsidiaries to, (i) (a) use any of the Real Estate or any portion thereof for
the handling, processing, storage or disposal of Hazardous Substances except in
material compliance with all Environmental Laws, (b) cause or permit to be
located on any of the Real Estate any underground tank or other underground
storage receptacle for Hazardous Substances except in compliance with all
Environmental Laws, or (c) generate any Hazardous Substances on any of the Real
Estate except in compliance with all Environmental Laws, unless non-compliance
could not have a materially adverse effect on the business, assets or financial
condition of any of the Borrower or the Parent individually, or the Parent and
its Subsidiaries taken as a whole, or (ii) (a) conduct any activity at any Real
Estate or use any Real Estate in any manner so as to cause a release (i.e.
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, disposing or dumping) or threatened release of
Hazardous Substances on, upon or into the Real Estate or properties in the
vicinity thereof in violation of any Environmental Laws, or (b) otherwise
conduct any activity at any Real Estate or use any Real Estate in any manner
that would violate any Environmental Law in any material respect or bring such
Real Estate in material violation of any Environmental Law, unless such
violation could not have a materially adverse effect on the business, assets or
financial condition of any of the Borrower or the Parent individually, or the
Parent and its Subsidiaries taken as a whole.
8.8. Employee Benefit Plans.
Neither the Borrower, the Parent nor any ERISA Affiliate thereof will:
(a) engage in any "prohibited transaction" within the meaning of
(section)406 of ERISA or (section)4975 of the Code which could result in a
material liability for any of the Borrower, the Parent or any of their
Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated
funding deficiency", as such term is defined in (section)302 of ERISA,
whether or not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which, could
result in the imposition of a material lien or material encumbrance on the
assets of the Borrower, the Parent or any of their Subsidiaries pursuant to
(section)302(f) or (section)4068 of ERISA; or
(d) permit or take any action which would result in the aggregate
benefit liabilities (with the meaning of (section)4001 of ERISA) of all
Guaranteed Pension Plans exceeding by more than $2,500,000 the value of the
aggregate assets of such Plans, disregarding for this purpose the benefit
liabilities and assets of any such Plan with assets in excess of benefit
liabilities.
8.9. Certain Transactions.
Except for arm's length transactions pursuant to which the Borrower, the
Parent or any of their Subsidiaries makes payments in the ordinary course of
business upon terms no less favorable than such Person could obtain from third
parties and except for payment of certain legal fees of a voting trust for the
Horne family stock, and payment of expenses for preparation of tax returns of
certain officers and directors of the Parent and its Subsidiaries and other
transactions between the Borrower and the Parent or any of their Subsidiaries
deemed by management of the Borrower and the Parent in good faith to be
beneficial to the Borrower and the Parent, neither the Borrower nor the Parent
will, nor will they permit any of their Subsidiaries to, enter into any
transaction with any officer, director, employee or Affiliate of any of the
Borrower, the Parent or any of their Subsidiaries (other than for service as
employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any such officer, director, employee or Affiliate or, any
corporation, partnership, trust or other entity in which any such officer,
director, employee or Affiliate has a substantial interest or is an officer,
director, trustee or partner.
9. FINANCIAL COVENANTS OF THE BORROWER AND THE PARENT.
9.1. Fixed Charge Coverage Ratio.
Neither the Borrower nor the Parent will permit the Fixed Charge Coverage
Ratio for any period of four consecutive fiscal quarters of the Parent to be
less than 3.00:1.00.
9.2. Leverage Ratio.
Neither the Borrower nor the Parent will permit the ratio of (i) Total
Funded Debt to (ii) the sum of (A) Total Funded Debt plus (B) Consolidated Net
Worth, to exceed 0.40:1.00 at any time.
9.3. Consolidated Tangible Net Worth.
Neither the Borrower nor the Parent will permit at any time Consolidated
Tangible Net Worth to be less than the sum of $220,000,000 plus an amount equal
to, on a cumulative basis, 50% of positive Consolidated Net Income for each
prior complete fiscal year of the Parent subsequent to the fiscal year ended on
the Balance Sheet Date.
10. CLOSING CONDITIONS.
The obligations of the Banks to make the initial Revolving Credit Loans
shall be subject to the satisfaction of the following conditions precedent on or
prior to the Closing Date:
10.1. Loan Documents.
Each of the Loan Documents shall have been duly executed and delivered by
the respective parties thereto, shall be in full force and effect and shall be
in form and substance satisfactory to each of the Banks. Each Bank shall have
received a fully executed copy of each such document.
10.2. Certified Copies of Charter Documents.
Each of the Banks shall have received from each of the Borrower and the
Parent, (i) a copy, certified by a duly authorized officer of such Person to be
true and complete on the Closing Date, of each of (a) its charter or other
incorporation documents as in effect on such date of certification, and (b) its
by-laws as in effect on such date and (ii) a certificate of good standing
certified by the Secretary of State of the jurisdiction in which it is
incorporated and each state in which it is qualified to do business as a foreign
corporation.
10.3. Corporate Action.
All corporate action necessary for the valid execution, delivery and
performance by each of the Borrower and the Parent of this Credit Agreement and
the other Loan Documents to which it is or is to become a party shall have been
duly and effectively taken, and evidence thereof satisfactory to the Banks shall
have been provided to each of the Banks.
10.4. Incumbency Certificate.
Each of the Banks shall have received from each of the Borrower and the
Parent an incumbency certificate, dated as of the Closing Date, signed by a duly
authorized officer of such Person, and giving the name and bearing a specimen
signature of each individual who shall be authorized: (i) to sign, in the name
and on behalf of such Person, each of the Loan Documents to which such Person is
or is to become a party; (ii) in the case of the Borrower, to make Loan Requests
and Conversion Requests; and (iii) to give notices and to take other action on
its behalf under the Loan Documents.
10.5. Opinion of Counsel.
Each of the Banks and the Agent shall have received a favorable opinion
addressed to the Banks and the Agent, dated as of the Closing Date, in form and
substance satisfactory to the Banks and the Agent and substantially in the form
of Exhibit D hereof, from Goodwin, Procter & Hoar, counsel to the Borrower and
the Parent, and each of the Borrower and the Parent instruct Goodwin, Procter &
Hoar to deliver such opinion to the Banks and the Agent.
10.6. Proceedings and Documents.
All proceedings in connection with the transactions contemplated by this
Credit Agreement, the other Loan Documents and all other documents incident
thereto shall be satisfactory in substance and in form to the Banks and to the
Agent and the Agent's Special Counsel, and the Banks, the Agent and such counsel
shall have received all information and such counterpart originals or certified
or other copies of such documents as the Agent may reasonably request.
10.7. Payment of Fees.
The Borrower shall have paid to the Agent the closing fee and the Agent's
fee pursuant to (sections)4.1 and 4.2, and all fees, expenses and disbursements
of the Agent's Special Counsel accrued prior to the Closing Date.
11. CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Loan, whether on or after the
Closing Date, shall also be subject to the satisfaction of the following
conditions precedent:
11.1. Representations True; No Event of Default.
Each of the representations and warranties of any of the Borrower, the
Parent and any of their Subsidiaries contained in this Credit Agreement, the
other Loan Documents or in any document or instrument delivered pursuant to or
in connection with this Credit Agreement shall be true as of the date as of
which they were made and shall also be true at and as of the time of the making
of such Loan, with the same effect as if made at and as of that time (except to
the extent of changes resulting from transactions contemplated or permitted by
this Credit Agreement and the other Loan Documents and changes occurring in the
ordinary course of business that singly or in the aggregate are not materially
adverse to the business, assets or financial condition of the Borrower or the
Parent, individually or the Parent and its Subsidiaries taken as a whole, and to
the extent that such representations and warranties relate expressly to an
earlier date) and no Default or Event of Default shall have occurred and be
continuing. The Agent shall have received a certificate from each of the
Borrower and the Parent signed by an authorized officer of such Person to such
effect.
11.2. No Legal Impediment.
No change shall have occurred in any law or regulations thereunder or
interpretations thereof that in the reasonable opinion of any Bank would make it
illegal for such Bank to make such Loan.
11.3. Governmental Regulation.
Each Bank shall have received from the Borrower, the Parent or any
regulatory authority such statements in substance and form reasonably
satisfactory to such Bank as such Bank shall require for the purpose of
compliance with any applicable regulations of the Comptroller of the Currency or
the Board of Governors of the Federal Reserve System.
12. EVENTS OF DEFAULT; ACCELERATION; ETC.
12.1. Events of Default and Acceleration.
If any of the following events ("Events of Default" or, if the giving of
notice or the lapse of time or both is required, then, prior to such notice or
lapse of time, "Defaults") shall occur:
(a) the Borrower shall fail to pay any principal of the Loans when the
same shall become due and payable, whether at the stated date of maturity
or any accelerated date of maturity or at any other date fixed for payment;
(b) the Borrower shall fail to pay any interest on the Loans, the
Facility Fee, the Agent's fee, or other sums due hereunder or under any of
the other Loan Documents, within five (5) days after the same shall become
due and payable, whether at the stated date of maturity or any accelerated
date of maturity or at any other date fixed for payment;
(c) the Borrower or the Parent shall fail to comply with any of their
covenants contained in (sections)7 (other than (sections)7.2, 7.7, 7.10 and
7.11), 8 or 9;
(d) the Borrower or the Parent or any of its Subsidiaries shall fail
to perform any term, covenant or agreement contained herein or in any of
the other Loan Documents (other than those specified elsewhere in this
(section)12) for thirty (30) days after written notice of such failure has
been given to the Borrower by the Agent;
(e) any representation or warranty of the Borrower or the Parent or
any of their Subsidiaries in this Credit Agreement or any of the other Loan
Documents or in any other document or instrument delivered pursuant to or
in connection with this Credit Agreement shall prove to have been false in
any material respect upon the date when made or deemed to have been made or
repeated;
(f) any of the Borrower, the Parent or any of their Subsidiaries shall
fail to pay at maturity, or within any applicable period of grace, any
obligation (including any guaranties thereof) in respect of borrowed money
or credit received (including letters of credit issued for the account of
the Borrower, the Parent or any of its Subsidiaries) or in respect of any
Capitalized Leases in excess of $10,000,000 in the aggregate, or fail to
observe or perform any material term, covenant or agreement contained in
any agreement by which it is bound, evidencing or securing borrowed money
or credit received or in respect of any Capitalized Leases in excess of
$10,000,000 in the aggregate, for such period of time as would permit
(assuming the giving of appropriate notice if required) the holder or
holders thereof or of any obligations issued thereunder to accelerate the
maturity thereof;
(g) any of the Borrower, the Parent or any of their Subsidiaries shall
make an assignment for the benefit of creditors, or admit in writing its
inability to pay or generally fail to pay its debts as they mature or
become due, or shall petition or apply for the appointment of a trustee or
other custodian, liquidator or receiver of any of the Borrower, the Parent
or any of their Subsidiaries or of any substantial part of the assets of
any of the Borrower, the Parent or any of their Subsidiaries or shall
commence any case or other proceeding relating to any of the Borrower, the
Parent or any of their Subsidiaries under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation
or similar law of any jurisdiction, now or hereafter in effect, or shall
take any action to authorize or in furtherance of any of the foregoing, or
if any such petition or application shall be filed or any such case or
other proceeding shall be commenced against any of the Borrower, the Parent
or any of their Subsidiaries and any of the Borrower, the Parent or any of
their Subsidiaries shall indicate its approval thereof, consent thereto or
acquiescence therein or such petition or application shall not have been
dismissed within forty-five (45) days following the filing thereof;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating any of the Borrower, the
Parent or any of their Subsidiaries bankrupt or insolvent, or approving a
petition in any such case or other proceeding, or a decree or order for
relief is entered in respect of any of the Borrower, the Parent or any of
their Subsidiaries in an involuntary case under federal bankruptcy laws as
now or hereafter constituted;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any final
judgment against any of the Borrower, the Parent or any of their
Subsidiaries that, with other outstanding final judgments, undischarged,
against the Borrower, the Parent and any of their Subsidiaries exceeds in
the aggregate $5,000,000;
(j) (i) if any of the Loan Documents shall be cancelled, terminated,
revoked or rescinded otherwise than in accordance with the terms thereof or
with the express prior written agreement, consent or approval of the Banks,
or (ii) any action at law, suit or in equity or other legal proceeding to
cancel, revoke or rescind any of the Loan Documents shall be commenced by
or on behalf of any of (A) the Borrower, the Parent or any of their
Subsidiaries party thereto, or (B) any of the Horne family stockholders, or
(C) any other stockholder if such action, suit or proceeding has not been
dismissed or withdrawn within sixty (60) days of the commencement thereof,
or (iii) any court or any other governmental or regulatory authority or
agency of competent jurisdiction shall make a determination that, or issue
a judgment, order, decree or ruling to the effect that, any one or more of
the Loan Documents is illegal, invalid or unenforceable in accordance with
the terms thereof;
(k) with respect to any Guaranteed Pension Plan, an ERISA Reportable
Event shall have occurred and the Majority Banks shall have determined in
their reasonable discretion that such event reasonably could be expected to
result in liability of any of the Borrower, the Parent or any of their
Subsidiaries to the PBGC or such Guaranteed Pension Plan in an aggregate
amount exceeding $1,000,000 and such event in the circumstances occurring
reasonably could constitute grounds for the termination of such Guaranteed
Pension Plan by the PBGC or for the appointment by the appropriate United
States District Court of a trustee to administer such Guaranteed Pension
Plan; or a trustee shall have been appointed by the United States District
Court to administer such Guaranteed Pension Plan; or the PBGC shall have
instituted proceedings to terminate such Guaranteed Pension Plan;
(l) any of the Borrower, the Parent or any of their Subsidiaries shall
be enjoined, restrained or in any way prevented by the order of any court
or any administrative or regulatory agency from conducting any material
part of its business and such order shall continue in effect for more than
thirty (30) days; or
(m) the Parent shall cease to own, directly or indirectly, 100% of the
capital stock of the Borrower; or Timothy P. Horne and members of the Horne
family (or any trusts or similar entities established for the benefit of
members of the Horne family) shall at any time cease to own, legally or
beneficially, at least fifty-one percent (51%) (by number of votes) of the
Voting Stock of the Parent; or, during any period of twelve consecutive
calendar months, individuals who were directors or who were elected by the
members of the board of directors of the Parent on the first day of such
period shall cease to constitute a majority of the board of directors of
the Parent.
then, and in any such event, so long as the same may be continuing, the
Agent may, and upon the request of the Majority Banks shall, by notice in
writing to the Borrower declare all amounts owing with respect to this Credit
Agreement, the Notes and the other Loan Documents to be, and they shall
thereupon forthwith become, immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by the Borrower and the Parent; provided that in the event of any Event
of Default specified in (sections)12.1(g) or 12.1(h), all such amounts shall
become immediately due and payable automatically and without any requirement of
notice from the Agent or any Bank.
12.2. Termination of Commitments.
If any one or more of the Events of Default specified in (sections)12.1(g)
or 12.1(h) shall occur, the Total Commitment shall forthwith terminate and each
of the Banks shall be relieved of all obligations to make Loans to the Borrower.
If any other Event of Default shall have occurred and be continuing, the Agent
may and, upon the request of the Majority Banks, shall, by notice to the
Borrower, terminate the Total Commitment, and upon such notice being given the
Total Commitment shall terminate immediately and each of the Banks shall be
relieved of all further obligations to make Loans. If any such notice is given
to the Borrower, the Agent will forthwith furnish a copy thereof to each of the
Banks. No termination of the credit hereunder shall relieve the Borrower or the
Parent of any of the Obligations or any of their existing obligations to any of
the Banks arising under other agreements or instruments.
12.3. Remedies.
In case any one or more of the Events of Default shall have occurred and be
continuing, each Bank, if owed any amount with respect to the Loans, may, (i)
prior to acceleration of the maturity of the Loans pursuant to (section)12.1,
with the consent of the Majority Banks but not otherwise, proceed to protect and
enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Credit Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations to such Bank are evidenced,
including as permitted by applicable law the obtaining of the ex parte
appointment of a receiver, and, (ii) following acceleration of the maturity of
the Loans pursuant to (section)12.1, proceed to enforce the payment thereof or
any other legal or equitable right of such Bank. No remedy herein conferred upon
any Bank or the Agent or the holder of any Note is intended to be exclusive of
any other remedy and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute or any other provision of law.
12.4. Distribution of Proceeds.
In the event that, following the occurrence or during the continuance of
any Default or Event of Default, the Agent or any Bank, as the case may be,
receives any monies in connection with the enforcement of any of the Loan
Documents such monies shall be distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the reimbursement of
the Agent for or in respect of all reasonable costs, expenses, disbursements and
losses which shall have been incurred or sustained by the Agent in connection
with the collection of such monies by the Agent, for the exercise, protection or
enforcement by the Agent of all or any of the rights, remedies, powers and
privileges of the Agent under this Credit Agreement or any of the other Loan
Documents and in support of any provision of adequate indemnity to the Agent
against all taxes or liens which by law shall have, or may have, priority over
the rights of the Agent to such monies;
(b) Second, to all other Obligations in such order or preference as the
Majority Banks may determine; provided, however, that distributions in respect
of such Obligations shall be made (i) pari passu among Obligations with respect
to the Agent's fee payable under (section)4.2 and all other Obligations and (ii)
Obligations owing to the Banks with respect to each type of Obligation such as
interest, principal, fees and expenses, shall be made among the Banks pro rata
based upon the amount of the Obligations outstanding with respect to each Bank;
and provided, further, that the Agent may in its reasonable discretion make
proper allowance to take into account any Obligations not then due and payable;
and
(c) Third, the excess, if any, shall be returned to the Borrower or to such
other Persons as are entitled thereto.
13. SETOFF.
Regardless of the adequacy of any collateral, during the continuance of any
Event of Default, any deposits or other sums credited by or due from any of the
Banks to either of the Borrower or the Parent and any securities or other
property of the Borrower or the Parent in the possession of such Bank may be
applied to or set off by such Bank against the payment of Obligations and any
and all other liabilities, direct, or indirect, absolute or contingent, due or
to become due, now existing or hereafter arising, of the Borrower or the Parent
to such Bank. Each of the Banks agrees with each other Bank that (i) except with
respect to the amount of any check or electronic equivalent deposited with such
Bank and credited to the Borrower's or the Parent's account maintained with such
Bank which is subsequently returned to the Borrower or the Parent unpaid, if an
amount to be set off is to be applied to Indebtedness of the Borrower or the
Parent to such Bank, other than the Obligations evidenced by the Notes held by
such Bank, such amount shall be applied ratably to such other Indebtedness and
to the Obligations evidenced by all such Notes held by such Bank, and (ii) if
such Bank shall receive from the Borrower or the Parent, whether by voluntary
payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Notes held by such Bank by proceedings
against the Borrower or the Parent at law or in equity or by proof thereof in
bankruptcy, reorganization, liquidation, receivership or similar proceedings, or
otherwise, and shall retain and apply to the payment of the Note or Notes held
by such Bank any amount in excess of its ratable portion of the payments
received by all of the Banks with respect to the Notes held by all of the Banks,
such Bank will make such disposition and arrangements with the other Banks with
respect to such excess, either by way of distribution, pro tanto assignment of
claims, subrogation or otherwise as shall result in each Bank receiving in
respect of the Notes held by its proportionate payment as contemplated by this
Credit Agreement; provided that if all or any part of such excess payment is
thereafter recovered from such Bank, such disposition and arrangements shall be
rescinded and the amount restored to the extent of such recovery, but without
interest.
14. THE AGENT.
14.1. Authorization.
(a) The Agent is authorized to take such action on behalf of each of
the Banks and to exercise all such powers as are hereunder and under any of
the other Loan Documents and any related documents delegated to the Agent,
together with such powers as are reasonably incident thereto, provided that
no duties or responsibilities not expressly assumed herein or therein shall
be implied to have been assumed by the Agent.
(b) The relationship between the Agent and each of the Banks is that
of an independent contractor. The use of the term "Agent" is for
convenience only and is used to describe, as a form of convention, the
independent contractual relationship between the Agent and each of the
Banks. Nothing contained in this Credit Agreement nor the other Loan
Documents shall be construed to create an agency, trust or other fiduciary
relationship between the Agent and any of the Banks.
(c) As an independent contractor empowered by the Banks to exercise
certain rights and perform certain duties and responsibilities hereunder
and under the other Loan Documents, the Agent is nevertheless a
"representative" of the Banks, as that term is defined in Article 1 of the
Uniform Commercial Code, for purposes of actions for the benefit of the
Banks and the Agent with respect to all collateral security and guaranties
contemplated by the Loan Documents, if any. Such actions include the
designation of the Agent as "secured party", "mortgagee" or the like on all
financing statements and other documents and instruments, whether recorded
or otherwise, relating to the attachment, perfection, priority or
enforcement of any security interests, mortgages or deeds of trust in
collateral security intended to secure the payment or performance of any of
the Obligations.
14.2. Employees and Agents.
The Agent may exercise its powers and execute its duties by or through
employees or agents and shall be entitled to take, and to rely on, advice of
counsel concerning all matters pertaining to its rights and duties under this
Credit Agreement and the other Loan Documents. The Agent may utilize the
services of such Persons as the Agent in its sole discretion may reasonably
determine, and all reasonable fees and expenses of any such Persons shall be
paid by the Borrower.
14.3. No Liability.
Neither the Agent nor any of its shareholders, directors, officers or
employees nor any other Person assisting them in their duties nor any agent or
employee thereof, shall be liable for any waiver, consent or approval given or
any action taken, or omitted to be taken, in good faith by it or them hereunder
or under any of the other Loan Documents, or in connection herewith or
therewith, or be responsible for the consequences of any oversight or error of
judgment whatsoever, except that the Agent or such other Person, as the case may
be, may be liable for losses due to its willful misconduct or gross negligence.
14.4. No Representations.
The Agent shall not be responsible for the execution or validity or
enforceability of this Credit Agreement (except for the execution by the Agent,
or the validity or enforceability against the Agent, of this Credit Agreement),
the Notes, any of the other Loan Documents or any instrument at anytime
constituting, or intended to constitute, collateral security for the Notes, or
for the value of any such collateral security or for the validity,
enforceability or collectability of any such amounts owing with respect to the
Notes, or for any recitals or statements, warranties or representations made
herein or in any of the other Loan Documents or in any certificate or instrument
hereafter furnished to it by or on behalf of the Borrower or the Parent, or be
bound to ascertain or inquire as to the performance or observance of any of the
terms, conditions, covenants or agreements herein or in any instrument at any
time constituting, or intended to constitute, collateral security for the Notes
or to inspect any of the properties, books or records of any of the Borrower,
the Parent or any of their Subsidiaries. The Agent shall not be bound to
ascertain whether any notice, consent, waiver or request delivered to it by the
Borrower or the Parent or any holder of any of the Notes shall have been duly
authorized or is true, accurate and complete. The Agent has not made nor does it
now make any representations or warranties, express or implied, nor does it
assume any liability to the Banks, with respect to the credit worthiness or
financial conditions of any of the Borrower, the Parent or any of their
Subsidiaries. Each Bank acknowledges that it has, independently and without
reliance upon the Agent or any other Bank, and based upon such information and
documents as it has deemed appropriate, made its own credit analysis and
decision to enter into this Credit Agreement.
14.5. Payments.
14.5.1. Payments to Agent. A payment by the Borrower or the Parent to
the Agent hereunder or any of the other Loan Documents for the account of
any Bank shall constitute a payment to such Bank. The Agent agrees promptly
to distribute to each Bank such Bank's pro rata share of payments received
by the Agent for the account of the Banks except as provided in
(sections)4.6 through 4.8, 4.10 and 16 and as otherwise expressly provided
herein or in any of the other Loan Documents.
14.5.2. Distribution by Agent. If in the opinion of the Agent the
distribution of any amount received by it in such capacity hereunder, under
the Notes or under any of the other Loan Documents might involve it in
liability, it may refrain from making distribution until its right to make
distribution shall have been adjudicated by a court of competent
jurisdiction. If a court of competent jurisdiction shall adjudge that any
amount received and distributed by the Agent is to be repaid, each Person
to whom any such distribution shall have been made shall either repay to
the Agent its proportionate share of the amount so adjudged to be repaid or
shall pay over the same in such manner and to such Persons as shall be
determined by such court.
14.5.3. Delinquent Banks. Notwithstanding anything to the contrary
contained in this Credit Agreement or any of the other Loan Documents, any
Bank that fails absent notification to the Agent by such Bank pursuant to
(section)2.8.2 (i) to make available to the Agent its pro rata share of any
Loan or (ii) to comply with the provisions of (section)14 with respect to
making dispositions and arrangements with the other Banks, where such
Bank's share of any payment received, whether by setoff or otherwise, is in
excess of its pro rata share of such payments due and to payable to all of
the Banks, in each case as, when and to the full extent required by the
provisions of this Credit Agreement, shall be deemed delinquent (a
"Delinquent Bank") and shall be deemed a Delinquent Bank until such time as
such delinquency is satisfied. A Delinquent Bank shall be deemed to have
assigned any and all payments due to it from the Borrower or the Parent,
whether on account of outstanding Loans, interest, fees or otherwise, to
the remaining nondelinquent Banks for application to, and reduction of,
their respective pro rata shares of all outstanding Loans. The Delinquent
Bank hereby authorizes the Agent to distribute such payments to the
nondelinquent Banks in proportion to their respective pro rata shares of
all outstanding Loans. A Delinquent Bank shall be deemed to have satisfied
in full a delinquency when and if, as a result of application of the
assigned payments to all outstanding Loans of the nondelinquent Banks, the
Banks' respective pro rata shares of all outstanding Loans have returned to
those in effect immediately prior to such delinquency and without giving
effect to the nonpayment causing such delinquency.
14.6. Holders of Notes.
The Agent may deem and treat the payee of any Note as the absolute owner
thereof for all purposes hereof until it shall have been furnished in writing
with a different name by such payee or by a subsequent holder.
14.7. Indemnity.
The Banks ratably agree hereby to indemnify and hold harmless the Agent
from and against any and all claims, actions and suits (whether groundless or
otherwise), losses, damages, costs, expenses (including any expenses for which
the Agent has not been reimbursed by the Borrower as required by (section)15),
and liabilities of every nature and character arising out of or related to this
Credit Agreement, the Notes, or any of the other Loan Documents or the
transactions contemplated or evidenced hereby or thereby, or the Agent's actions
taken hereunder or thereunder, except to the extent that any of the same shall
be directly caused by the willful misconduct or gross negligence of any of the
Agent, its directors, officers or employees or any other Person assisting them
in their duties or any agent or employee thereof.
14.8. Agent as Bank.
In its individual capacity, FNBB shall have the same obligations and the
same rights, powers and privileges in respect to its Commitment and the Loans
made by it, and as the holder of any of the Notes, as it would have were it not
also the Agent.
14.9. Resignation.
The Agent may resign at any time by giving sixty (60) days prior written
notice thereof to the Banks and the Borrower. Upon any such resignation, the
Majority Banks shall have the right to appoint a successor Agent. Unless a
Default or Event of Default shall have occurred and be continuing, such
successor Agent shall be reasonably acceptable to the Borrower. If no successor
Agent shall have been so appointed by the Majority Banks and shall have accepted
such appointment within thirty (30) days after the retiring Agent's giving of
notice of resignation, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent, which shall be a financial institution having a
rating of not less than A or its equivalent by Standard & Poor's Corporation.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation, the provisions of this Credit Agreement and the
other Loan Documents shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
14.10. Notification of Defaults and Events of Default.
Each Bank hereby agrees that, upon learning of the existence of a Default
or an Event of Default, it shall promptly notify the Agent thereof. The Agent
hereby agrees that upon receipt of any notice under this (section)14.10 it shall
promptly notify the other Banks of the existence of such Default or Event of
Default.
15. EXPENSES.
The Borrower agrees to pay (i) the reasonable costs of producing and
reproducing this Credit Agreement, the other Loan Documents and the other
agreements and instruments mentioned herein, in connection with the preparation,
administration or interpretation of such documents, the closing hereunder, and
any amendments, restatements, modifications, approvals, consents or waivers
hereto or hereunder, (ii) any taxes (including any interest and penalties in
respect thereto) payable by the Agent or any of the Banks (other than taxes
based upon the Agent's or any Bank's net income) on or with respect to the
transactions contemplated by this Credit Agreement (the Borrower hereby agreeing
to indemnify the Agent and each Bank with respect thereto), (iii) the reasonable
fees, expenses and disbursements of the Agent's Special Counsel incurred in
connection with the preparation, administration or interpretation of the Loan
Documents and other instruments mentioned herein, the closing hereunder, and
amendments, restatements, modifications, approvals, consents or waivers hereto
or hereunder, (iv) the reasonable fees, expenses and disbursements of the Agent
incurred by the Agent in connection with the preparation, syndication,
administration or interpretation of the Loan Documents and other instruments
mentioned herein, provided that amounts attributable to syndication expenses
shall not exceed $5,000, and (vi) all reasonable out-of-pocket expenses
(including without limitation reasonable attorneys' fees, costs and
disbursements, which attorneys shall be outside counsel to the Agent or any of
the Banks, and reasonable consulting, accounting, appraisal, investment banking
and similar professional fees and charges) incurred by the Agent or any of the
Banks in connection with (A) the enforcement of or preservation of rights under
any of the Loan Documents against the Borrower or the Parent or any of their
Subsidiaries or the administration thereof after the occurrence of a Default or
Event of Default and (B) any litigation, proceeding or dispute whether arising
hereunder or otherwise, in any way related to the Agent's relationship with the
Borrower, the Parent or any of their Subsidiaries, provided, however that the
Agent shall refund any amounts paid pursuant to the terms of this (section)15 to
the extent that they have been determined by a court of competent jurisdiction,
by final order, to have been incurred solely as a result of a breach by the
Agent of its obligations under this Credit Agreement. The covenants of this
(section)15 shall survive payment or satisfaction of payment of amounts owing
with respect to the Obligations.
16. INDEMNIFICATION.
The Borrower agrees to indemnify and hold harmless the Agent and the Banks
and their respective affiliates, officers, directors, employees, agents or other
representatives from and against any and all actual or threatened claims,
actions and suits whether groundless or otherwise, and from and against any and
all liabilities, losses, damages and expenses of every nature and character
arising out of this Credit Agreement or any of the other Loan Documents or the
transactions contemplated hereby including, without limitation, (i) any actual
or proposed use by any of the Borrower, the Parent or any of their Subsidiaries
of the proceeds of any of the Loans, (ii) any of the Borrower, the Parent or any
of their Subsidiaries entering into or performing this Credit Agreement or any
of the other Loan Documents or (iii) with respect to any of the Borrower, the
Parent and any of their Subsidiaries and their respective properties and assets,
the violation of any Environmental Law, the presence, disposal, escape, seepage,
leakage, spillage, discharge, emission, release or threatened release of any
Hazardous Substances or any action, suit, proceeding or investigation brought or
threatened with respect to any Hazardous Substances (including, but not limited
to claims with respect to wrongful death, personal injury or damage to
property), in each case including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding. In litigation, or the preparation therefor, the
Banks and the Agent shall be entitled to select their own counsel and, in
addition to the foregoing indemnity, the Borrower agrees to pay promptly the
reasonable fees and expenses of such counsel if (x) in the written opinion of
counsel to the Agent, use of counsel of the Borrower's choice could reasonably
be expected to give rise to a conflict of interest, or (y) the Borrower shall
not have employed counsel reasonably satisfactory to the Agent and the Banks to
represent the Agent and the Banks within reasonable time after notice of the
institution of any such litigation or proceeding. If, and to the extent that the
obligations of the Borrower under this (section)16 are unenforceable for any
reason, the Borrower hereby agrees to make the maximum contribution to the
payment in satisfaction of such obligations which is permissible under
applicable law. The covenants contained in this (section)16 shall survive
payment of satisfaction in full of the Obligations.
17. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein, in
the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of the Borrower, the Parent or any of their
Subsidiaries pursuant hereto shall be deemed to have been relied upon by the
Banks and the Agent, notwithstanding any investigation heretofore or hereafter
made by any of them, and shall survive the making by the Banks of the Loans, as
herein contemplated, and shall continue in full force and effect so long as any
Obligations under this Credit Agreement or the Notes or any of the other Loan
Documents remains outstanding or any Bank has any obligation to make any Loans,
and for such further time as may be otherwise expressly specified in this Credit
Agreement. All statements contained in any certificate or other paper delivered
to any Bank or the Agent at any time by or on behalf of the Borrower, the Parent
or any of their Subsidiaries pursuant hereto or in connection with the
transactions contemplated hereby shall constitute representations and warranties
by the Borrower, the Parent or such Subsidiary hereunder.
18. ASSIGNMENT AND PARTICIPATION.
18.1. Conditions to Assignment by Banks.
Except as provided herein, each Bank may assign to one or more Eligible
Assignees all or a portion of its interests, rights and obligations under this
Credit Agreement (including all or a portion of its Commitment Percentage and
Commitment and the same portion of the Loans at the time owing to it) and the
Notes held by it; provided that (i) the Agent shall have given its prior written
consent to such assignment, which consent shall not be unreasonably withheld or
delayed, (ii) prior to the occurrence or continuance of a Default or Event of
Default, the Borrower shall have given its prior written consent to all such
assignments in amounts of less than $20,000,000, which consent shall not be
unreasonably withheld or delayed (it being understood by the parties that no
consent of the Borrower shall be required for assignments in amounts of
$20,000,000 or in excess thereof or following the occurrence of a Default or an
Event of Default), (iii) each such assignment shall be of a constant, and not a
varying, percentage of all the assigning Bank's rights and obligations under
this Credit Agreement, and (iv) the parties to such assignment shall execute and
deliver to the Agent, for recording in the Register (as hereinafter defined), an
Assignment and Acceptance, substantially in the form of Exhibit E hereto (an
"Assignment and Acceptance"), together with any Notes subject to such
assignment. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five (5) Business Days after the execution
thereof, (i) 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
Bank hereunder, and (ii) the assigning Bank shall, to the extent provided in
such assignment and upon payment to the Agent of the registration fee referred
to in (section)18.3, be released from its obligations under this Credit
Agreement.
18.2. Certain Representations and Warranties; Limitations;
Covenants.
By executing and delivering an Assignment and Acceptance, the parties to
the assignment thereunder confirm to and agree with each other and the other
parties hereto as follows:
(a) other than the representation and warranty that it is the legal
and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, the assigning Bank makes no representation or
warranty, express or implied, and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
this Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Credit Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto or
the attachment, perfection or priority of any security interest or
mortgage;
(b) the assigning Bank makes no representation or warranty and assumes
no responsibility with respect to the financial condition of any of the
Borrower, the Parent or any of their Subsidiaries or any other Person
primarily or secondarily liable in respect of any of the Obligations, or
the performance or observance by any of the Borrower, the Parent or any of
their Subsidiaries or any other Person primarily or secondarily liable in
respect of any of the Obligations of any of their obligations under this
Credit Agreement or any of the other Loan Documents or any other instrument
or document furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of this Credit
Agreement, together with copies of the most recent financial statements
referred to in (section)6.4 and (section)7.4 and such other documents and
information as it has deemed appropriate to make its own credit analysis
and decision to enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance upon the
assigning Bank, the Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Credit
Agreement;
(e) such assignee represents and warrants that it is an Eligible
Assignee;
(f) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Credit
Agreement and the other Loan Documents as are delegated to the Agent by the
terms hereof or thereof, together with such powers as are reasonably
incidental thereto;
(g) such assignee agrees that it will perform in accordance with their
terms all of the obligations that by the terms of this Credit Agreement are
required to be performed by it as a Bank; and
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance.
18.3. Register.
The Agent shall maintain a copy of each Assignment and Acceptance delivered
to it and a register or similar list (the "Register") for the recordation of the
names and addresses of the Banks and the Commitment Percentage of, and principal
amount of the Revolving Credit Loans owing to the Banks from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Agent and the Banks may treat each Person whose name is
recorded in the Register as a Bank hereunder for all purposes of this Credit
Agreement. Upon each such recordation, the assigning Bank agrees to pay to the
Agent a registration fee in the sum of $2,500.
18.4. New Notes.
Upon its receipt of an Assignment and Acceptance executed by the parties to
such assignment, together with each Note subject to such assignment, the Agent
shall (i) record the information contained therein in the Register, and (ii)
give prompt notice thereof to the Borrower and the Banks (other than the
assigning Bank). Within five (5) Business Days after receipt of such notice, the
Borrower, at its own expense, shall execute and deliver to the Agent, in
exchange for each surrendered Note, a new Note to the order of such Eligible
Assignee in an amount equal to the amount assumed by such Eligible Assignee
pursuant to such Assignment and Acceptance and, if the assigning Bank has
retained some portion of its obligations hereunder, a new Note to the order of
the assigning Bank in an amount equal to the amount retained by it hereunder.
Such new Notes shall provide that they are replacements for the surrendered
Notes, shall be in an aggregate principal amount equal to the aggregate
principal amount of the surrendered Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of the assigned Notes. Within five (5) days of issuance of any new Notes
pursuant to this (section)18.4, the Borrower shall deliver an opinion of
counsel, addressed to the Banks and the Agent, relating to the due
authorization, execution and delivery of such new Notes and the legality,
validity and binding effect thereof, in form and substance satisfactory to the
Banks. The surrendered Notes shall be cancelled and returned to the Borrower.
18.5. Participations.
Each Bank may sell participations to one or more banks or other entities in
all or a portion of such Bank's rights and obligations under this Credit
Agreement and the other Loan Documents; provided that (i) each such
participation shall be in an amount of not less than $5,000,000 (ii) any such
sale or participation shall not affect the rights and duties of the selling Bank
hereunder to the Borrower and (iii) the only rights granted to the participant
pursuant to such participation arrangements with respect to waivers, amendments
or modifications of the Loan Documents shall be the rights to approve waivers,
amendments or modifications that would reduce the principal of or the interest
rate on any Loans, extend the term or increase the amount of the Commitment of
such Bank as it relates to such participant, reduce the amount of any commitment
fees to which such participant is entitled or extend any regularly scheduled
payment date for principal or interest.
18.6. Disclosure.
The Borrower agrees that in addition to disclosures made in accordance with
standard and customary banking practices and (section)19 hereof, any Bank may
disclose information obtained by such Bank pursuant to this Credit Agreement to
assignees or participants and potential assignees or participants hereunder;
provided that such assignees or participants or potential assignees or
participants shall agree (i) to treat in confidence such information unless such
information otherwise becomes public knowledge, (ii) not to disclose such
information to a third party, except as required by law or legal process and
(iii) not to make use of such information for purposes of transactions unrelated
to such contemplated assignment or participation.
18.7. Assignee or Participant Affiliated with the Borrower.
If any assignee Bank is an Affiliate of the Borrower or the Parent, then
any such assignee Bank shall have no right to vote as a Bank hereunder or under
any of the other Loan Documents for purposes of granting consents or waivers or
for purposes of agreeing to amendments or other modifications to any of the Loan
Documents or for purposes of making requests to the Agent pursuant to
(section)12.1 or (section)12.2, and the determination of the Majority Banks
shall for all purposes of this Agreement and the other Loan Documents be made
without regard to such assignee Bank's interest in any of the Loans. If any Bank
sells a participating interest in any of the Loans to a participant, and such
participant is the Borrower or the Parent or an Affiliate of the Borrower or the
Parent, then such transferor Bank shall promptly notify the Agent of the sale of
such participation. A transferor Bank shall have no right to vote as a Bank
hereunder or under any of the other Loan Documents for purposes of granting
consents or waivers or for purposes of agreeing to amendments or modifications
to any of the Loan Documents or for purposes of making requests to the Agent
pursuant to (section)12.1 or (section)12.2 to the extent that such participation
is beneficially owned by the Borrower or the Parent or any Affiliate of the
Borrower or the Parent, and the determination of the Majority Banks shall for
all purposes of this Agreement and the other Loan Documents be made without
regard to the interest of such transferor Bank in the Loans to the extent of
such participation.
18.8. Miscellaneous Assignment Provisions.
Any assigning Bank shall retain its rights to be indemnified pursuant to
(section)16 with respect to any claims or actions arising prior to the date of
such assignment. If any assignee Bank is not incorporated under the laws of the
United States of America or any state thereof, it shall, prior to the date on
which any interest or fees are payable hereunder or under any of the other Loan
Documents for its account, deliver to the Borrower and the Agent certification
as to its exemption from deduction or withholding of any United States federal
income taxes. If FNBB transfers all of its interest, rights and obligations
under this Credit Agreement, the Agent shall, in consultation with the Borrower
and with the consent of the Borrower and the Majority Banks, appoint another
Bank to act as a reference Bank for the purpose of determining the Eurodollar
Rate hereunder. Anything contained in this (section)18 to the contrary
notwithstanding, any Bank may at any time pledge all or any portion of its
interest and rights under this Credit Agreement (including all or any portion of
its Notes) to any of the twelve Federal Reserve Banks organized under (section)4
of the Federal Reserve Act, 12 U.S.C. (section)341. No such pledge or the
enforcement thereof shall release the pledgor Bank from its obligations
hereunder or under any of the other Loan Documents.
18.9. Assignment by Borrower.
Neither the Borrower nor the Parent shall assign or transfer any of its
rights or obligations under any of the Loan Documents without the prior written
consent of each of the Banks.
19. CONFIDENTIALITY.
Until three (3) years following the date on which the relevant Bank has no
obligation to make any Loan and no Loan or Note in favor of such Bank is
outstanding, all confidential information and documents concerning the Borrower,
the Parent or any of their Subsidiaries supplied by the Borrower or the Parent
to any Bank pursuant to the terms of this Credit Agreement (collectively, the
"Information") which information shall be deemed confidential and will be held
in confidence by such Bank in accordance with its customary procedures for
handling confidential information of this nature and such Banks shall not
disclose such Information, except that each of the Borrower and the Parent
hereby authorizes each Bank to disclose any Information or any other Loan
Document (i) to any bank regulatory authority, governmental agency or
representative thereof, (ii) to any officer, director or employee of such Bank
who has reason to know such Information or any independent auditor, counsel,
agent or other representative of such Bank, provided that such independent
auditor, counsel, agent or other representative enters into a confidentiality
agreement with the Borrower substantially similar to such Bank's agreement with
the Borrower, (iii) to any participant or assignee or potential participant or
potential assignee pursuant to the terms of (section)18.6 hereof, and (iv)
pursuant to subpoena, court order, or legal process but only to the extent
required by applicable laws and regulations, including those applying to
classified material.
20. NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Notes shall be in writing and shall be delivered in
hand, mailed by United States registered or certified first class mail, postage
prepaid, sent by overnight courier, or sent by telegraph, telecopy, telefax or
telex and confirmed by delivery via courier or postal service, addressed as
follows:
(a) if to the Borrower, at 715 King Street, Wilmington, Delaware
19801, Attention: Kenneth Kubacki (with a copy to the Parent at the address
set forth below), or at such other address for notice as the Borrower shall
last have furnished in writing to the Person giving the notice;
(b) if to the Parent, at 815 Chestnut Street, North Andover,
Massachusetts 01845, Attention: William McCartney, or at such other address
for notice as the Parent shall last have furnished in writing to the Person
giving the notice;
(c) if to the Agent, at 100 Federal Street, Boston, Massachusetts
02110, USA, Attention: Harvey H. Thayer, Jr., Vice President, or such other
address for notice as the Agent shall last have furnished in writing to the
Person giving the notice; and
(d) if to any Bank, at such Bank's address set forth on Schedule 1
hereto, or such other address for notice as such Bank shall have last
furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.
21. GOVERNING LAW.
THIS CREDIT AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS, EXCEPT AS
OTHERWISE SPECIFICALLY PROVIDED THEREIN, ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH OF THE
BORROWER AND THE PARENT AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE
COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS
TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY
SUCH SUIT BEING MADE UPON THE BORROWER OR THE PARENT BY MAIL AT THE ADDRESS
SPECIFIED IN (section)20. EACH OF THE BORROWER AND THE PARENT HEREBY WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY
SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
22. HEADINGS.
The captions in this Credit Agreement are for convenience of reference only
and shall not define or limit the provisions hereof.
23. COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when so
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Credit Agreement it shall not be
necessary to produce or account for more than one such counterpart signed by the
party against whom enforcement is sought.
24. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection herewith
or therewith express the entire understanding of the parties with respect to the
transactions contemplated hereby. Neither this Credit Agreement nor any term
hereof may be changed, waived, discharged or terminated, except as provided in
(section)26.
25. WAIVER OF JURY TRIAL.
Each of Borrower, the Parent, the agent and each bank hereby waives its
right to a jury trial with respect to any action or claim arising out of any
dispute in connection with this Credit Agreement, the Notes or any of the other
Loan Documents, any rights or obligations hereunder or thereunder or the
performance of such rights and obligations. Except as prohibited by law, each of
the Borrower and the Parent hereby waives any right it may have to claim or
recover in any litigation referred to in the preceding sentence any special,
exemplary, punitive or consequential damages or any damages other than, or in
addition to, actual damages. Each of the Borrower and the Parent (i) certifies
that no representative, agent or attorney of any Bank or the Agent has
represented, expressly or otherwise, that such Bank or the Agent would not, in
the event of litigation, seek to enforce the foregoing waivers and (ii)
acknowledges that the Agent and the Banks have been induced to enter into this
Credit Agreement, the other Loan Documents to which it is a party by, among
other things, the waivers and certifications contained herein.
26. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Except as otherwise expressly provided in this Credit Agreement, any
consent or approval required or permitted by this Credit Agreement to be given
by one or more or all of the Banks may be given, and any term of this Credit
Agreement or of any other instrument related hereto or mentioned herein may be
amended, and the performance or observance by the Borrower or the Parent of any
terms of this Credit Agreement or such other instrument or the continuance of
any Default or Event of Default may be waived (either generally or in a
particular instance and either retroactively or prospectively) with, but only
with, the written consent of the Borrower and the written consent of the
Majority Banks. Notwithstanding the foregoing, the rate of interest on the
Notes, the payment date for principal, interest or fees hereunder, the term of
the Notes, the amount of the Commitments of the Banks, the amount of the
Facility Fee hereunder, and this (section)26 may not be changed nor may the
guaranty of the Parent set forth in (section)5 be released, without the written
consent of the Borrower and the written consent of each Bank affected thereby;
the definition of Majority Banks may not be amended without the written consent
of all of the Banks; and the amount of the Agent's fee and (section)14 may not
be amended without the written consent of the Agent. No waiver shall extend to
or affect any obligation not expressly waived or impair any right consequent
thereon. No course of dealing or delay or omission on the part of either Bank in
exercising any right shall operate as a waiver thereof or otherwise be
prejudicial thereto. No notice to or demand upon the Borrower or the Parent
shall entitle the Borrower or the Parent to other or further notice or demand in
similar or other circumstances.
27. SEVERABILITY.
The provisions of this Credit Agreement are severable and if any one clause
or provision hereof shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction, and shall not
in any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Credit Agreement in any jurisdiction.
IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
WATTS INVESTMENT COMPANY
By:
______________________________
THE FIRST NATIONAL BANK OF BOSTON,
individually and as Agent
By:
______________________________
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA
By:
______________________________
MELLON BANK, N.A.
By:
______________________________
THE NORTHERN TRUST COMPANY
By:
______________________________
CREDIT LYONNAIS CAYMAN ISLAND BRANCH
By:
______________________________
BROWN BROTHERS HARRIMAN & CO.
By:
______________________________
WATTS INDUSTRIES, INC., as Guarantor
By:
______________________________