Exhibit 10(c)
EXECUTION COPY
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364-DAY
CREDIT AGREEMENT
DATED AS OF
AUGUST 31, 2001
AMONG
FERRO CORPORATION
AS BORROWER
VARIOUS FINANCIAL INSTITUTIONS
AS LENDERS
CREDIT SUISSE FIRST BOSTON
AS THE SYNDICATION AGENT AND
A JOINT LEAD ARRANGER
NATIONAL CITY BANK
AS THE ADMINISTRATIVE AGENT AND A JOINT LEAD ARRANGER
CITICORP USA, INC.
KEYBANK NATIONAL ASSOCIATION
AS THE CO-DOCUMENTATION AGENTS
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CREDIT SUISSE FIRST BOSTON
AS SOLE BOOK RUNNING MANAGER
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS AND TERMS......................................................................1
1.1 Certain Defined Terms..........................................................................1
1.2 Computation of Time Periods...................................................................25
1.3 Accounting Terms..............................................................................25
1.4 Terms Generally...............................................................................25
SECTION 2. AMOUNT AND TERMS OF LOANS.................................................................26
2.1 Commitments for Loans.........................................................................26
2.2 Procedures for Borrowing and Disbursement of Funds............................................26
2.3 Competitive Bid Loans.........................................................................28
2.4 Notes; Loan Accounts..........................................................................33
2.5 Conversions of Loans..........................................................................34
2.6 Intentionally Omitted.........................................................................35
2.7 Interest......................................................................................35
2.8 Selection and Continuation of Interest Periods................................................38
2.9 Increased Costs, Illegality, etc..............................................................39
2.10 Compensation..................................................................................41
2.11 Change of Lending Office; Replacement of Lenders..............................................42
SECTION 3. INTENTIONALLY OMITTED.....................................................................43
SECTION 4. FEES; COMMITMENTS.........................................................................43
4.1 Fees..........................................................................................43
4.2 Voluntary Termination/Reduction of Commitments................................................44
4.3 Mandatory Adjustments of Commitments, etc.....................................................44
4.4 Extension of Maturity Date....................................................................45
SECTION 5. PAYMENTS..................................................................................45
5.1 Voluntary Prepayments of Loans...............................................................45
5.2 Mandatory Prepayments.........................................................................46
5.3 Repayment of Loans............................................................................47
5.4 Method and Place of Payment...................................................................47
5.5 Net Payments..................................................................................48
SECTION 6. CONDITIONS PRECEDENT......................................................................50
6.1 Conditions Precedent at Closing Date..........................................................50
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6.2 Conditions Precedent to All Credit Events (Other than any Competitive Bid Borrowing)..........50
6.3 Conditions Precedent to Each Competitive Bid Borrowing........................................51
SECTION 7. REPRESENTATIONS AND WARRANTIES............................................................52
7.1 Corporate Status, etc.........................................................................52
7.2 Subsidiaries..................................................................................52
7.3 Corporate Power and Authority, etc............................................................52
7.4 No Violation..................................................................................52
7.5 Governmental Approvals........................................................................53
7.6 Litigation....................................................................................53
7.7 Use of Proceeds; Margin Regulations...........................................................53
7.8 Financial Statements, etc.....................................................................53
7.9 No Material Adverse Change....................................................................54
7.10 Tax Returns and Payments......................................................................55
7.11 Title to Properties, etc......................................................................55
7.12 Lawful Operations, etc........................................................................55
7.13 Environmental Matters.........................................................................55
7.14 Compliance with ERISA.........................................................................56
7.15 Intellectual Property, etc....................................................................56
7.16 Investment Company Act, etc...................................................................57
7.17 Burdensome Contracts; Labor Relations.........................................................57
7.18 Existing Indebtedness.........................................................................57
7.19 True and Complete Disclosure..................................................................57
SECTION 8. AFFIRMATIVE COVENANTS.....................................................................58
8.1 Reporting Requirements........................................................................58
8.2 Books, Records and Inspections................................................................61
8.3 Insurance.....................................................................................61
8.4 Payment of Taxes and Claims...................................................................61
8.5 Corporate Franchises..........................................................................62
8.6 Good Repair...................................................................................62
8.7 Compliance with Statutes, etc.................................................................62
8.8 Compliance with Environmental Laws............................................................62
8.9 Fiscal Years, Fiscal Quarters.................................................................62
8.10 Hedge Agreements, etc.........................................................................63
8.11 Certain Subsidiaries to Join in Subsidiary Guaranty...........................................63
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8.12 Most Favored Covenant Status..................................................................64
8.13 Senior Debt...................................................................................64
8.14 Debt Rating Downgrade.........................................................................65
SECTION 9. NEGATIVE COVENANTS........................................................................65
9.1 Changes in Business...........................................................................65
9.2 Consolidation, Merger, Asset Sales, etc.......................................................65
9.3 Restrictions on Acquisitions..................................................................67
9.4 Limitation on Sales and Leasebacks............................................................68
9.5 Indebtedness..................................................................................68
9.6 Leverage Ratio................................................................................70
9.7 Fixed Charge Coverage Ratio...................................................................70
9.8 No Stock Repurchases While Index Debt Rating is Not Investment Grade, etc.....................71
9.9 Transactions with Affiliates..................................................................71
9.10 Plan Terminations, Minimum Funding, etc.......................................................71
9.11 Restricted Payments...........................................................................71
9.12 Restrictive Agreements........................................................................72
SECTION 10. EVENTS OF DEFAULT.........................................................................72
10.1 Events of Default.............................................................................72
10.2 Acceleration, etc.............................................................................75
10.3 Application of Liquidation Proceeds...........................................................75
SECTION 11. THE ADMINISTRATIVE AGENT..................................................................76
11.1 Appointment...................................................................................76
11.2 Delegation of Duties..........................................................................77
11.3 Exculpatory Provisions........................................................................77
11.4 Reliance by Administrative Agent..............................................................77
11.5 Notice of Default.............................................................................78
11.6 Non-Reliance..................................................................................78
11.7 Indemnification...............................................................................79
11.8 The Agents in Individual Capacity.............................................................79
11.9 Successor Administrative Agent................................................................79
11.10 Other Agents..................................................................................80
SECTION 12. MISCELLANEOUS.............................................................................80
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12.1 Payment of Expenses etc.......................................................................80
12.2 Right of Setoff...............................................................................81
12.3 Notices.......................................................................................82
12.4 Benefit of Agreement..........................................................................82
12.5 No Waiver; Remedies Cumulative................................................................88
12.6 Payments Pro Rata; Sharing of Setoffs, etc....................................................88
12.7 Calculations; Computations....................................................................89
12.8 Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial........................89
12.9 Counterparts..................................................................................90
12.10 Effectiveness; Integration....................................................................90
12.11 Headings Descriptive..........................................................................91
12.12 Amendment or Waiver...........................................................................91
12.13 Survival of Indemnities.......................................................................92
12.14 Domicile of Loans.............................................................................92
12.15 Confidentiality...............................................................................92
12.16 Lender Register...............................................................................93
12.17 Intentionally Omitted.........................................................................94
12.18 General Limitation of Liability...............................................................94
12.19 No Duty.......................................................................................94
12.20 Lenders and Agent Not Fiduciary to Borrower, etc..............................................94
12.21 Survival of Representations and Warranties....................................................94
12.22 Severability..................................................................................95
12.23 Independence of Covenants.....................................................................95
12.24 No Reliance on Margin Stock...................................................................95
12.25 Interest Rate Limitation......................................................................95
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Annex I - Information as to Lenders
Annex II - Information as to Subsidiaries
Annex III - Information as to ERISA
Annex IV - Description of Existing Indebtedness and Letters of Credit
Exhibit A-1 - Form of Revolving Note
Exhibit A-2 - Form of Competitive Bid Note
Exhibit B-1 - Form of Notice of Borrowing
Exhibit B-2 - Form of Notice of Competitive Bid Borrowing
Exhibit B-3 - Form of Notice of Conversion
Exhibit C - Form of Subsidiary Guaranty
Exhibit D - Form of Assignment Agreement
Exhibit E - Form of Designation Agreement
Exhibit F - Form of Lender Tax Certificate
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364-DAY CREDIT AGREEMENT
THIS 364-DAY CREDIT AGREEMENT, dated as of August 31, 2001 (this
"AGREEMENT"), is among FERRO CORPORATION, an Ohio corporation (the "BORROWER"),
the various financial institutions and other Persons from time to time parties
hereto (the "LENDERS"), CREDIT SUISSE FIRST BOSTON ("CSFB"), as syndication
agent (in such capacity, the "SYNDICATION AGENT") for the Lenders, NATIONAL CITY
BANK ("NCB"), as administrative agent (in such capacity, the "ADMINISTRATIVE
AGENT", and together with the Syndication Agent, the "AGENTS"), for the Lenders,
and CSFB and NCB, as joint lead arrangers (the "JOINT LEAD ARRANGERS").
WHEREAS, pursuant to the Heads of Agreement, dated as of April 23, 2001
(the "PURCHASE AGREEMENT"), by and between the Borrower and OM Group, Inc., a
Delaware corporation ("OMG"), the Borrower will purchase the electronic
materials, performance pigments and colors, glass systems and cerdec ceramics
divisions (collectively, the "FERRO DIVISIONS") of dmc(2) Degussa Metals
Catalysts Cerdec A.G. ("DMC(2)") from OMG (the "DMC(2) ACQUISITION");
WHEREAS, in order to (a) finance the DMC(2) Acquisition, (b) refinance
existing indebtedness (the "REFINANCING") under the Borrower's existing credit
facility (the "EXISTING CREDIT FACILITY"), (c) pay related fees and expenses
(the "EXPENSE PAYMENTS", and together with the DMC(2) Acquisition and the
Refinancing, the "TRANSACTION") and (d) provide for post-closing working capital
and general corporate purposes of the Borrower and its Subsidiaries following
the consummation of the Acquisition, the Borrower has requested that the Lenders
make the Commitments available to the Borrower; and
WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth, to extend the Commitments and make Loans to
the Borrower;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1.DEFINITIONS AND TERMS.
1.1 CERTAIN DEFINED TERMS. As used herein, the following terms shall
have the meanings herein specified unless the context otherwise requires:
"ACQUISITION" shall mean and include (i) any acquisition on a going
concern basis (whether by purchase, lease or otherwise) of any assets,
facilities and/or businesses operated by any person who is not a Subsidiary of
the Borrower, and (ii) acquisitions of a majority of the outstanding equity or
other similar interests in any such person (whether by merger, stock purchase or
otherwise).
"ADDITIONAL SECURED OBLIGATIONS" shall mean the Borrower's obligations
in respect of (a) the issued and outstanding letters of credit set forth on
Annex IV, (b) the Borrower's senior notes issued pursuant to its existing and
future indentures and (c) the trust notes and trust certificates issued in
connection with the Amended and Restated Participation Agreement, dated as of
October 31, 1995 (as amended and restated as of November 30, 2000 and as further
amended from time to time), by and among the Borrower, State Street Bank and
Trust Company, not in its individual capacity except as expressly stated
therein, the financial institutions named as purchasers thereto and Citibank,
N.A., as agent (the "TRUST INSTRUMENTS"), that will, in each case, share on a
PARI PASSU basis with the Obligations with respect to any collateral required to
be provided pursuant to section 8.14; PROVIDED that, with respect to the
Borrower's senior notes and the Trust Instruments, only the Borrower's and its
Subsidiaries' Principal Domestic Manufacturing Properties and the Capital Stock
of the Borrower's Domestic Subsidiaries will be required to be shared.
"ADJUSTED LIBO RATE" shall mean with respect to each Interest Period
for a LIBOR Loan, (i) the rate per annum appearing on page 3750 of the Telerate
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to Dollar deposits in the
London interbank market), at approximately 11:00 a.m. (London time) two Business
Days prior to the commencement of such Interest Period, as the rate for Dollar
deposits with a maturity comparable to such Interest Period, divided (and
rounded to the nearest ten thousandth of 1%) by (ii) a percentage equal to 100%
minus the then stated maximum rate of all reserve requirements (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves and without benefit of credits for proration, exceptions or offsets
which may be available from time to time) applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency liabilities as defined in
Regulation D (or any successor category of liabilities under Regulation D);
PROVIDED, HOWEVER, that in the event that the rate referred to in clause (i)
above is not available at any such time for any reason, then the rate referred
to in clause (i) shall instead be the average (rounded to the nearest ten
thousandth of 1%) of the rates at which Dollar deposits of $5,000,000 are
offered to the Reference Banks in the London interbank market at approximately
11:00 a.m. (London time), two Business Days prior to the commencement of such
Interest Period, for contracts which would be entered into at the commencement
of such Interest Period.
"ADMINISTRATIVE AGENT" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to section 11.9.
"ADMINISTRATIVE QUESTIONNAIRE" shall mean an Administrative
Questionnaire in a form supplied by the Administrative Agent.
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"AFFILIATE" shall mean, with respect to any person, any other person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with such person. A person shall be deemed to control a second
person if such first person possesses, directly or indirectly, the power (i) to
vote 20% or more of the securities having ordinary voting power for the election
of directors or managers of such second person or (ii) to direct or cause the
direction of the management and policies of such second person, whether through
the ownership of voting securities, by contract or otherwise. Notwithstanding
the foregoing, (x) a director, officer or employee of a person shall not, solely
by reason of such status, be considered an Affiliate of such person; and (y)
neither the Administrative Agent nor any Lender shall in any event be considered
an Affiliate of the Borrower or any other Credit Party or any of their
respective Subsidiaries.
"AGENTS" shall have the meaning provided in the first paragraph of this
Agreement.
"AGREEMENT" shall have the meaning provided in the first paragraph of
this Agreement.
"APPLICABLE FACILITY FEE RATE" shall have the meaning provided in
section 4.1(a).
"APPLICABLE LIBOR MARGIN" shall have the meaning provided in section
2.7(g).
"APPLICABLE LENDING OFFICE" shall mean, (i) with respect to each Lender
and its Loans which are Prime Rate Loans, such Lender's Domestic Lending Office,
(ii) with respect to each Lender and its Loans which are LIBOR Loans, such
Lender's Eurodollar Lending Office, (iii) with respect to each Lender and its
Competitive Bid Loans, such Lender's Domestic Lending Office, and (iv) with
respect to any Designated Bidder and its Competitive Bid Loans, such Designated
Bidder's Applicable Lending Office, located in the United States, as specified
in the Designation Agreement of such Designated Bidder.
"APPLICABLE PRIME RATE MARGIN" shall have the meaning provided in
section 2.7(g).
"ASSET SALE" shall mean the sale, transfer or other disposition
(including by means of sale and leaseback transaction, and by means of mergers,
consolidations, and liquidations of a corporation, partnership or limited
liability company of the interests therein of the Borrower or any Subsidiary) by
the Borrower or any Subsidiary to any person other than the Borrower or any
Subsidiary of any of their respective assets (other than sales, transfers or
other dispositions of inventory, or obsolete or excess furniture, fixtures,
equipment or other property, tangible or intangible, in the ordinary course of
business).
"ASSIGNMENT AGREEMENT" shall mean an Assignment Agreement substantially
in the form of Exhibit D hereto.
"ATTRIBUTABLE DEBT" shall mean, as to any particular lease under which
any person is at the time liable, at any date as of which the amount thereof is
to be determined, the total net amount of rent required to be paid by such
person under such lease during the remaining term thereof (after giving effect
to any extensions at the option of the lessor), discounted from the
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respective due dates thereof to such date at the rate of 1% per annum over the
interest rate which would then be applicable to a new Borrowing of Eurodollar
Loans under the Facility with an Interest Period of six months, compounded
semi-annually. The net amount of rent required to be paid under any such lease
for any such period, after excluding amounts required to be paid on account of
maintenance and repairs, insurance, taxes, assessments, water rates and similar
charges. In the case of any lease which is terminable by the lessee upon the
payment of a penalty, such net amount shall also include the amount of such
penalty, but no rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated.
"AUTHORIZED OFFICER" shall mean any officer or employee of the Borrower
designated as such in writing to the Administrative Agent by the Borrower.
"BANKRUPTCY CODE" shall have the meaning provided in section 10.1(h).
"BORROWER" shall have the meaning provided in the first paragraph of
this Agreement.
"BORROWING" shall mean the incurrence of Loans of a single Type by the
Borrower from all of the Lenders having Commitments in respect thereof on a PRO
RATA basis on a given date (or resulting from Conversions or Continuations on a
given date), which Loans shall, in the case of LIBOR Loans, have the same
Interest Period.
"BUSINESS DAY" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which shall be
in the city in which the Payment Office is located a legal holiday or a day on
which banking institutions are authorized by law or other governmental actions
to close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, LIBOR Loans, any day which is a
Business Day described in clause (i) and which is also a day for trading by and
between banks in Dollar deposits in the interbank Eurodollar market.
"CAPITAL LEASE" as applied to any person shall mean any lease of any
property (whether real, personal or mixed) by that person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that person.
"CAPITALIZED LEASE OBLIGATIONS" shall mean all obligations under
Capital Leases of the Borrower or any of its Subsidiaries in each case taken at
the amount thereof accounted for as liabilities identified as "capital lease
obligations" (or any similar words) on a consolidated balance sheet of the
Borrower and its Subsidiaries prepared in accordance with GAAP.
"CAPITAL STOCK" means, (a) in the case of a corporation, any and all
capital or corporate stock, including shares of preferred or preference stock of
such corporation, (b) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) in respect of corporate or capital stock, (c) in the case of a
partnership or limited liability company, any and all partnership or membership
interests
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(whether general or limited) and (d) any other interest or participation that
confers on a person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing person.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. Section 9601 ET SEQ.
"CHANGE OF CONTROL" shall mean and include any of the following:
(i) during any period of two consecutive calendar years,
individuals who at the beginning of such period constituted the
Borrower's Board of Directors (together with any new directors (x)
whose election by the Borrower's Board of Directors was, or (y) whose
nomination for election by the Borrower's shareholders was (prior to
the date of the proxy or consent solicitation relating to such
nomination), approved by a vote of at least two-thirds of the directors
then still in office who either were directors at the beginning of such
period or whose election or nomination for election was previously so
approved), shall cease for any reason to constitute a majority of the
directors then in office;
(ii) any person or group (as such term is defined in section
13(d)(3) of the 1934 Act), other than the Borrower, any trustee or
other fiduciary holding securities under an employee benefit plan of
the Borrower and the Current Holder Group, shall acquire, directly or
indirectly, beneficial ownership (within the meaning of Rule 13d-3 and
13d-5 of the 1934 Act) of more than 50%, on a fully diluted basis, of
the economic or voting interest in the Borrower's capital stock; and/or
(iii) the shareholders of the Borrower approve a plan of
complete liquidation of the Borrower or an agreement or agreements for
the sale or disposition by the Borrower of all or substantially all of
the Borrower's assets.
"CLOSING DATE" shall mean the date, on or after the Effective Date,
upon which the conditions specified in section 6.1 are satisfied.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the Effective
Date and any subsequent provisions of the Code, amendatory thereof, supplemental
thereto or substituted therefor.
"COMMITMENT" shall mean, with respect to each Lender, the amount set
forth opposite such Lender's name on Annex I as its "Commitment" as the same may
be reduced from time to time pursuant to section 4.2, 4.3 and/or 10.2 or
adjusted from time to time as a result of assignments to or from such Lender
pursuant to section 12.4.
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"COMMITMENT AMOUNT" shall mean, on any date, $187,000,000, as such
amount may be reduced from time to time pursuant to section 4.2, 4.3 and/or
10.2.
"COMPETITIVE BID BORROWING" shall mean a borrowing consisting of one or
more Competitive Bid Loans made pursuant to section 2.3.
"COMPETITIVE BID LOAN" shall mean a Loan denominated in Dollars made
pursuant to section 2.3.
"COMPETITIVE BID NOTE" shall have the meaning provided in section
2.4(a).
2.1. "COMPETITIVE BID REDUCTION" shall have the meaning provided in section
"CONFIDENTIAL INFORMATION MEMORANDUM" shall have the meaning provided
in section 7.8(c).
"CONSOLIDATED AMORTIZATION EXPENSE" shall mean, for any period, all
amortization expenses of the Borrower and its Subsidiaries, all as determined
for the Borrower and its Subsidiaries on a consolidated basis in accordance with
GAAP.
"CONSOLIDATED DEPRECIATION EXPENSE" shall mean, for any period, all
depreciation expenses of the Borrower and its Subsidiaries, all as determined
for the Borrower and its Subsidiaries on a consolidated basis in accordance with
GAAP.
"CONSOLIDATED EBITDA" shall mean, for any period, Consolidated Net
Income for such period; PLUS (A) the sum, without duplication, of the amounts
for such period included in determining such Consolidated Net Income of (i)
Consolidated Fixed Charges (other than dividends), (ii) Consolidated Income Tax
Expense, (iii) Consolidated Depreciation Expense, (iv) Consolidated Amortization
Expense, (v) non-cash losses and charges which are properly classified as
extraordinary or nonrecurring (including any charges relating to the 2001
severance program in an aggregate amount not to exceed $7,000,000 and any
restructuring and integration charges arising out of the DMC(2) Acquisition in
an aggregate amount not to exceed $30,000,000), and (vi) Expense Payments; LESS
(B) gains on sales of assets (excluding sales in the ordinary course of
business) and other gains which are properly classified as extraordinary or
nonrecurring; all as determined for the Borrower and its Subsidiaries on a
consolidated basis in accordance with GAAP.
Notwithstanding the foregoing, in determining Consolidated Net Income
for purposes of this definition there shall be excluded therefrom (i) the income
(or loss) of any entity (other than Subsidiaries of the Borrower) in which the
Borrower or any of its Subsidiaries has a joint interest, except to the extent
of the amount of dividends or other distributions actually paid to the Borrower
or any of its Subsidiaries during such period, and (ii) the income of any
Subsidiary of the Borrower to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its
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charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary.
In addition and notwithstanding the foregoing, the Borrower's
Consolidated EBITDA for any Testing Period shall (x) include the appropriate
financial items for any person or business unit which has been acquired by the
Borrower for any portion of such Testing Period prior to the date of
acquisition, and (y) exclude the appropriate financial items for any person or
business unit which has been disposed of by the Borrower, for the portion of
such Testing Period prior to the date of disposition; PROVIDED that, with
respect to the appropriate financial items for the Ferro Divisions, in computing
Consolidated EBITDA for the period ending on the last day of (i) the fourth
fiscal quarter of the 2001 fiscal year, such financial items shall be those for
the fourth fiscal quarter of the 2001 fiscal year MULTIPLIED by four, (ii) the
first fiscal quarter of the 2002 fiscal year, such financial items shall be
those for the fourth fiscal quarter of the 2001 fiscal year and the first fiscal
quarter of the 2002 fiscal year MULTIPLIED by two, (iii) the second fiscal
quarter of the 2002 fiscal year, such financial items shall be those for the
fourth fiscal quarter of the 2001 fiscal year, the first fiscal quarter of the
2002 fiscal year and the second fiscal quarter of the 2002 fiscal year
MULTIPLIED by 1.333.
"CONSOLIDATED FIXED CHARGES" shall mean, for any period, the sum of (a)
Consolidated Interest Expense during such period, PLUS (b) financing expenses
paid in connection with Permitted Receivables Programs during such period, PLUS
(c) all Capital Lease and Synthetic Lease expenses paid during such period, PLUS
(d) dividends paid by the Borrower during such period.
"CONSOLIDATED INCOME TAX EXPENSE" shall mean, for any period, all
provisions for taxes based on the net income of the Borrower or any of its
Subsidiaries (including, without limitation, any additions to such taxes, and
any penalties and interest with respect thereto), all as determined for the
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period, total
interest expense (including that which is capitalized, that which is
attributable to Capital Leases or Synthetic Leases and the pre-tax equivalent of
dividends payable on Redeemable Stock) of the Borrower and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of the Borrower
and its Subsidiaries, BUT EXCLUDING, HOWEVER, any amortization or write-off of
deferred financing costs and any charges for prepayment penalties on prepayment
of Indebtedness.
"CONSOLIDATED NET INCOME" shall mean, for any period, the net income
(or loss), without deduction for minority interests, of the Borrower and its
Subsidiaries on a consolidated basis for such period taken as a single
accounting period determined in conformity with GAAP.
"CONSOLIDATED NET TANGIBLE ASSETS" shall mean the aggregate amount of
assets (less applicable reserves and other properly deductible items), after
deducting therefrom (i) all current liabilities (excluding any thereof
constituting Indebtedness by reason of being renewable or extendible for a
maturity longer than one year), and (ii) all goodwill and intangibles, including
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trade names trademarks, patents and unamortized debt discount and expense, all
as determined for the Borrower and its Subsidiaries on a consolidated basis in
accordance with GAAP.
"CONSOLIDATED NET WORTH" shall mean at any time for the determination
thereof all amounts which, in conformity with GAAP, would be included under the
caption "total stockholders' equity" (or any like caption) on a consolidated
balance sheet of the Borrower as at such date; PROVIDED that in no event shall
Consolidated Net Worth include any amounts in respect of Redeemable Stock.
"CONTINUE", "CONTINUATION" and "CONTINUED" each refers to a
continuation of the Loans consisting of LIBOR Loans for an additional Interest
Period as provided in section 2.8.
"CONVERT", "CONVERSION" and "CONVERTED" each refers to a conversion of
Loans of one Type into Loans of another Type, pursuant to section 2.5, 2.8(b),
2.9 or 5.2.
"CREDIT DOCUMENTS" shall mean this Agreement, the Notes, any Letter of
Credit Document (as defined in the Five Year Credit Facility Agreement), the
Subsidiary Guaranty, the Five Year Credit Facility Agreement and any notes
issued in connection therewith, and any pledge or security agreement delivered
pursuant to section 8.14.
"CREDIT EVENT" shall mean the making of any Loans.
"CREDIT PARTY" shall mean the Borrower and each of its Subsidiaries
which is a party to any Credit Document.
"CSFB" shall have the meaning provided in the first paragraph of this
Agreement, and its successors and assigns.
"CURRENT HOLDER GROUP" shall mean (i) those persons who are officers
and directors of the Borrower at the Effective Date, (ii) the spouses, heirs,
legatees, descendants and blood relatives to the third degree of consanguinity
of any such person, (iii) the executors and administrators of the estate of any
such person, and any court appointed guardian of any such person, and/or (iv)
any trust for the benefit of any such person referred to in the foregoing
clauses (i) and (ii) or any other persons, so long as one or more members of the
Current Holder Group has the exclusive right to control the voting and
disposition of securities held by such trust.
"DEBT" shall mean, on any date, without duplication, the outstanding
principal amount of all Indebtedness of the Borrower and its Subsidiaries of the
type referred to in clause (i) (which, in the case of the Loans, shall be deemed
to equal the average daily outstanding amount of the Loans for the fiscal
quarter ending on the date of determination LESS the amount of any Loans prepaid
during such fiscal quarter pursuant to section 5.2), clause (ii), clause (iii),
clause (iv) (which shall include only the face amount of letters of credit that
have been drawn), clause (v), clause (vi), clause (vii), clause (viii) and
clause (xii), in each case of the definition of
8
Indebtedness (exclusive of intercompany Indebtedness between the Borrower and
any of its Subsidiaries or between any Subsidiaries of the Borrower) and,
without duplication, any Guaranty Obligation in respect of any of the foregoing.
"DEFAULT" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"DEFAULTING LENDER" shall mean any Lender with, respect to which a
Lender Default is in effect.
"DESIGNATED BIDDER" shall mean (i) an Eligible Transferee or (ii) a
special purpose corporation which is engaged in making, purchasing or otherwise
investing in commercial loans in the ordinary course of its business and that
issues (or the parent of which issues) commercial paper rated at least Prime-1
(or the then equivalent grade) by Moody's or A-1 (or the then equivalent grade)
by S&P, that, in either case, (A) is organized under the laws of the United
States or any State thereof, (B) shall have become a party to this Agreement
pursuant to section 12.4(d), and (C) is not otherwise a Lender.
"DESIGNATION AGREEMENT" shall mean a designation agreement entered into
by a Lender (other than a Designated Bidder) and a Designated Bidder, and
accepted by the Administrative Agent, in substantially the form of Exhibit E
hereto.
"DISPOSITION" shall mean any sale, transfer or other conveyance
(including by way of merger) of any of the Borrower's or its Subsidiaries'
assets (including accounts receivable and Capital Stock of Subsidiaries) to any
other Person in a single transaction or series of transactions.
"DMC(2)" shall have the meaning provided in the first whereas clause of
this Agreement.
"DMC(2) ACQUISITION" shall have the meaning provided in the first
whereas clause of this Agreement.
"DOLLARS", "U.S. DOLLARS" and the sign "$" each means lawful money of
the United States.
"DOMESTIC LENDING OFFICE" shall mean, with respect to any Lender, the
office of such Lender specified as its Domestic Lending Office in its
Administrative Questionnaire or in the Assignment Agreement pursuant to which it
became a Lender, or such other office of such Lender as such Lender may from
time to time specify to the Borrower and the Administrative Agent.
"DOMESTIC SUBSIDIARY" shall mean any Subsidiary organized under the
laws of the United States of America, any State thereof, the District of
Columbia, or any United States possession, the chief executive office and
principal place of business of which is located in, and which conducts the
majority of its business within, the United States of America and its
territories and possessions.
9
"EFFECTIVE DATE" shall have the meaning provided in section 12.10.
"ELIGIBLE TRANSFEREE" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in SEC
Regulation D); PROVIDED that such person:
(i) with respect only to assignments pursuant to section
12.4(c), is not disapproved in writing by the Borrower in a notice
given to the Lender requesting such assignment and the Administrative
Agent, specifying the reasons for such disapproval, within five
Business Days following the giving of notice to the Borrower of the
identity of any proposed transferee (any such disapproval by the
Borrower must be reasonable); PROVIDED that the Borrower shall not be
entitled to exercise the foregoing right of disapproval if and so long
as any Event of Default shall have occurred and be continuing; and
(ii) is not a direct competitor of the Borrower or engaged in
the same or similar business as the Borrower and its Subsidiaries
considered as an entirety or is not an Affiliate of any such
competitors of the Borrower and its Subsidiaries.
"ENVIRONMENTAL CLAIMS" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of non-compliance or violation, investigations or proceedings relating
in any way to any Environmental Law or any permit issued under any such law
(hereafter "CLAIMS"), including, without limitation, (i) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (ii) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the storage, treatment or Release (as defined
in CERCLA) of any Hazardous Materials or arising from alleged injury or threat
of injury to health, safety or the environment.
"ENVIRONMENTAL LAW" shall mean any applicable Federal, state, foreign
or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy and rule of common
law now or hereafter in effect and in each case as amended, and any binding and
enforceable judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment issued to or
rendered against the Borrower or any of its Subsidiaries relating to the
environment, employee health and safety or Hazardous Materials, including,
without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33
U.S.C. Section 2601 ET SEQ.; the Clean Air Act, 42 U.S.C. Section 7401 ET SEQ.;
the Safe Drinking Water Act, 42 U.S.C. Section 3803 ET SEQ.; the Oil Pollution
Act of 1990, 33 U.S.C. Section 2701 ET SEQ.; the Emergency Planning and the
Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 ET SEQ., the
Hazardous Material Transportation Act, 49 U.S.C. Section 1801 ET SEQ. and the
Occupational Safety and Health Act, 29 U.S.C. Section 651 ET SEQ. (to the extent
it regulates occupational exposure to Hazardous Materials); and any state and
local or foreign counterparts or equivalents, in each case as amended from time
to time.
10
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the
Effective Date and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA AFFILIATE" shall mean each person (as defined in section 3(9) of
ERISA) which together with the Borrower or a Subsidiary of the Borrower would be
deemed to be a "single employer" (i) within the meaning of section 414(b), (c),
(m) or (o) of the Code or (ii) as a result of the Borrower or a Subsidiary of
the Borrower being or having been a general partner of such person.
"EURODOLLAR LENDING OFFICE" shall mean, with respect to any Lender, the
office of such Lender specified as its Eurodollar Lending Office in its
Administrative Questionnaire or in the Assignment Agreement pursuant to which it
became a Lender, or such other office or offices for LIBOR Loans of such Lender
as such Lender may from time to time specify to the Borrower and the
Administrative Agent.
"EVENT OF DEFAULT" shall have the meaning provided in section 10.1.
"EXCLUDED EQUITY PROCEEDS" means any proceeds received by the Borrower
or any of its Subsidiaries from the sale or issuance by such person of its
Capital Stock or any warrants or options in respect of any such Capital Stock or
the exercise of any such warrants or options, in each case pursuant to any such
sale, issuance or exercise constituting or resulting from (a) capital
contributions to, or Capital Stock issuances by the Borrower or any of its
Subsidiaries (exclusive of any such contribution or issuance resulting from a
public offering or a widely distributed private offering exempted from the
registration requirements of section 5 of the Securities Act of 1933, as
amended), (b) any subscription agreement, option plan, incentive plan or similar
arrangement with any officer, employee or director of such person or any of its
Subsidiaries, (c) any loan made by the Borrower or any of its Subsidiaries in
the form of loans to officers, directors and employees of the Borrower and any
Subsidiaries for the sole purpose of purchasing the Capital Stock of the
Borrower or the Capital Stock of any person that directly or indirectly holds
the Capital Stock of the Borrower or of refinancing any such loans made by
others (or purchases of such loans made by others), (d) the sale of any Capital
Stock of the Borrower to any officer, director or employee described in clause
(b) above; PROVIDED that such proceeds do not exceed $15,000,000 annually, (e)
the exercise of any options or warrants issued to any officer, employee or
director pursuant to any agreement, plan or arrangement described in clause (b)
above or (f) the exercise of any warrants.
"EXISTING CREDIT FACILITY" shall have the meaning provided in the
second whereas clause of this Agreement.
"EXISTING INDEBTEDNESS" shall have the meaning provided in section
7.18.
"EXISTING INDEBTEDNESS AGREEMENTS" shall have the meaning provided in
section 7.18.
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"EXPENSE PAYMENTS" shall have the meaning provided in the second
whereas clause of this Agreement.
"FACILITY" shall mean the credit facility evidenced by the Total
Commitment.
"FACILITY FEE" shall have the meaning provided in section 4.1(a).
"FACILITY PERCENTAGE" shall mean at any time for any Lender with a
Commitment, the percentage obtained by dividing such Lender's Commitment by the
Total Commitment; PROVIDED that if the Total Commitment has been terminated, the
Facility Percentage for each Lender with a Commitment shall be determined by
dividing such Lender's Commitment immediately prior to such termination by the
Total Commitment immediately prior to such termination.
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
Funds brokers of recognized standing selected by the Administrative Agent.
"FEES" shall mean all amounts payable pursuant to, or referred to in,
section 4.1.
"FERRO DIVISIONS" shall have the meaning provided in the first whereas
clause of this Agreement.
"FIXED CHARGE COVERAGE RATIO" shall mean, on any date, the ratio of (a)
Consolidated EBITDA for the then most recent Testing Period, LESS capital
expenditures determined in accordance with GAAP made during such Testing Period
to (b) Consolidated Fixed Charges for the then most recent Testing Period.
"FIVE YEAR CREDIT FACILITY AGREEMENT" shall mean the credit agreement,
dated as of the date hereof, among the Borrower, the various financial
institutions party thereto, CSFB and NCB, as amended, supplemented, amended and
restated or otherwise modified from time to time.
"FIVE YEAR CREDIT FACILITY REVOLVING LOANS" shall mean the revolving
Loans to be made pursuant to the terms of the Five Year Credit Facility
Agreement.
"FIVE YEAR CREDIT FACILITY TERM LOANS" shall mean the term Loans to be
made pursuant to the terms of the Five Year Credit Facility Agreement.
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"FOREIGN SUBSIDIARY" shall mean any Subsidiary (i) which is not
incorporated in the United States and substantially all of whose assets and
properties are located, or substantially all of whose business is carried on,
outside the United States, or (ii) substantially all of whose assets consist of
Subsidiaries that are Foreign Subsidiaries as defined in clause (i) of this
definition.
"FUNDED DEBT" shall mean, as of any date of determination, all
indebtedness for money borrowed having a maturity of more than 12 months from
such date of determination or having a maturity of less than 12 months but by
its terms being renewable or extendible beyond 12 months from such date at the
option of the borrower or issuer.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time; it being understood and
agreed that determinations in accordance with GAAP for purposes of section 9,
including defined terms as used therein, are subject (to the extent provided
therein) to section 1.3 and 12.7(a).
"GUARANTY OBLIGATIONS" shall mean as to any person (without
duplication) any obligation of such person guaranteeing any Indebtedness
("PRIMARY INDEBTEDNESS") of any other person (the "PRIMARY OBLIGOR") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of such person, whether or not contingent, (a) to purchase any such
primary Indebtedness or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or payment of any
such primary Indebtedness or (ii) to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary Indebtedness of the
ability of the primary obligor to make payment of such primary Indebtedness, or
(d) otherwise to assure or hold harmless the owner of such primary Indebtedness
against loss in respect thereof; PROVIDED that the term Guaranty Obligation
shall not include endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Guaranty Obligation shall be
deemed to be an amount equal to the stated or determinable amount of the primary
Indebtedness in respect of which such Guaranty Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such person is required to perform thereunder) as determined
by such person in good faith.
"HEDGE AGREEMENT" shall mean (i) any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement designed to protect against fluctuations in interest
rates, (ii) any currency swap agreement, forward currency purchase agreement or
similar agreement or arrangement designed to protect against fluctuations in
currency exchange rates, and (iii) any forward commodity purchase agreement or
similar agreement or arrangement designed to protect against fluctuations in raw
material or other commodity prices.
"HAZARDOUS MATERIALS" shall mean (i) any petrochemical or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde
13
foam insulation, transformers or other equipment that contain dielectric fluid
containing levels of polychlorinated biphenyls, and radon gas; and (ii) any
chemicals, materials or substances defined as or included in the definition of
"hazardous substances", "hazardous wastes", "hazardous materials", "restricted
hazardous materials", "extremely hazardous wastes", "restrictive hazardous
wastes", "toxic substances", "toxic pollutants", "contaminants" or "pollutants",
or words of similar meaning and regulatory effect, under any applicable
Environmental Law.
"INDEBTEDNESS" of any person shall mean without duplication:
(i) all indebtedness of such person for borrowed money;
(ii) all bonds, notes, debentures and similar debt securities
of such person;
(iii) the deferred purchase price of capital assets or
services which in accordance with GAAP would be shown on the liability
side of the balance sheet of such person;
(iv) the face amount of all letters of credit issued for the
account of such person and, without duplication, all drafts drawn
thereunder;
(v) all obligations, contingent or otherwise, of such person
in respect of bankers' acceptances;
(vi) all Indebtedness of a second person secured by any Lien
on any property owned by such first person, whether or not such
indebtedness has been assumed;
(vii) all Capitalized Lease Obligations of such person;
(viii) the present value, determined on the basis of the
implicit interest rate, of all basic rental obligations under all
Synthetic Leases of such person;
(ix) all obligations of such person to pay a specified
purchase price for goods or services whether or not delivered or
accepted, I.E., take-or-pay and similar obligations;
(x) all net obligations of such person under Hedge Agreements;
(xi) the full outstanding balance of trade receivables, notes
or other instruments sold with full recourse (and the portion thereof
subject to potential recourse, if sold with limited recourse), other
than in any such case any thereof sold solely for purposes of
collection of delinquent accounts and other than in connection with any
Permitted Receivables Program;
(xii) all obligations (other than intercompany obligations) of
such person pursuant to any Permitted Receivables Program;
14
(xiii) the stated value, or liquidation value if higher, of
all Redeemable Stock of such person; and
(xiv) all Guaranty Obligations of such person;
PROVIDED that (x) neither trade payables nor other similar accrued expenses, in
each case arising in the ordinary course of business, nor obligations in respect
of insurance policies or performance or surety bonds which themselves are not
guarantees of Indebtedness (nor drafts, acceptances or similar instruments
evidencing the same nor obligations in respect of letters of credit supporting
the payment of the same), shall constitute Indebtedness; and (y) the
Indebtedness of any person shall in any event include (without duplication) the
Indebtedness of any other entity (including any general partnership in which
such person is a general partner) to the extent such person is liable thereon as
a result of such person's ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide expressly
that such person is not liable thereon.
"INDEX DEBT" shall mean senior, unsecured, long-term debentures or
other debt securities of the Borrower that are not guaranteed by any other
person or subject to any other credit support or enhancement.
"INDEX DEBT RATING" shall mean, as of any date, the rating of the
Borrower's Index Debt, as given by the Rating Agencies in their regular rating
reports.
"INTEREST PERIOD" with respect to any LIBOR Loan shall mean the
interest period applicable thereto, as determined pursuant to section 2.8.
"INVESTMENT GRADE" shall mean, with respect to Index Debt at any date
of determination, that such Index Debt is rated by both Rating Agencies and that
the Index Debt Rating is not lower than Baa3 from Moody's and not lower than
BBB- from S&P.
"JOINT LEAD ARRANGERS" shall have the meaning provided in the first
paragraph of this Agreement.
"LEASEHOLDS" of any person means all the right, title and interest of
such person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"LENDER" shall have the meaning provided in the first paragraph of this
Agreement and, except when used with reference to a Loan, the Facility, a
Commitment or a related term or defined term, shall also refer to each
Designated Bidder to the extent it has made a Competitive Bid Loan which is then
outstanding.
"LENDER DEFAULT" shall mean (i) the refusal (which has not been
retracted) of a Lender in violation of the requirements of this Agreement to
make available its portion of any incurrence of Loans; or (ii) a Lender having
notified the Administrative Agent and/or the Borrower that it
15
does not intend to comply with the obligations under section 2.1, in the case of
either (i) or (ii) as a result of the appointment of a receiver or conservator
with respect to such Lender at the direction or request of any regulatory agency
or authority.
"LENDER REGISTER" shall have the meaning provided in section 12.16.
"LENDER TAX CERTIFICATE" shall have the meaning provided in section
5.5(c)(ii).
"LEVERAGE RATIO" shall mean, on any date, the ratio of (a) total Debt
outstanding on such date to (b) Consolidated EBITDA for the then most recent
Testing Period.
"LIBOR LOANS" shall mean each Loan bearing interest at the rates
provided in section 2.7(b).
"LIEN" shall mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement or any lease
in the nature thereof).
"LOAN" shall have the meaning provided in section 2.1 or shall mean a
Competitive Bid Loan, as applicable.
"MARGIN STOCK" shall have the meaning provided in Regulation U.
"MATERIAL ADVERSE EFFECT" shall mean (i) a material adverse effect on
the business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower, the Ferro Divisions or the Borrower and
its Subsidiaries, taken as a whole; (ii) any material adverse effect on the
ability of the Borrower to perform its obligations under the Credit Documents to
which it is a party; or (iii) any material adverse effect on the validity or
effectiveness as against, or the enforceability against, any Credit Party of any
of the Credit Documents to which it is a party.
"MATERIAL SUBSIDIARY" shall mean, at any time, with reference to any
person, any Subsidiary of such person (i) that has assets at such time
comprising 5% or more of the consolidated assets of such person and its
Subsidiaries, or (ii) whose operations in the current fiscal year are expected
to, or whose operations in the most recent fiscal year did (or would have if
such person had been a Subsidiary for such entire fiscal year), represent 5% or
more of the consolidated earnings before interest, taxes, depreciation and
amortization of such person and its Subsidiaries for such fiscal year.
"MATURITY DATE" shall mean September 6, 2002, subject in any case to
earlier termination or extension as provided in this Agreement.
16
"MINIMUM BORROWING AMOUNT" shall mean, with respect to (i) Loans which
are Prime Rate Loans, $1,000,000, with minimum increments thereafter of
$100,000, and (ii) Loans which are LIBOR Loans, $5,000,000, with minimum
increments thereafter of $1,000,000.
"MOODY'S" shall mean Moody's Investors Service, Inc. and its
successors.
"MORTGAGE" shall mean and include any mortgage, pledge, lien, security
interest, conditional sale or other title retention agreement or other similar
encumbrance.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan, as defined in
section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is
making or accruing an obligation to make contributions or has within any of the
preceding three plan years made or accrued an obligation to make contributions.
"MULTIPLE EMPLOYER PLAN" shall mean an employee benefit plan, other
than a Multiemployer Plan, to which the Borrower or any ERISA Affiliate, and one
or more employers other than the Borrower or an ERISA Affiliate, is making or
accruing an obligation to make contributions or, in the event that any such plan
has been terminated, to which the Borrower or an ERISA Affiliate made or accrued
an obligation to make contributions during any of the five plan years preceding
the date of termination of such plan.
"NET DEBT PROCEEDS" shall mean with respect to the incurrence, sale or
issuance by the Borrower or any Subsidiary of any Debt other than (x) Debt
incurred as part of the Transaction or (y) Debt permitted by sections 9.5(a)
through 9.5(f) and, if the Five Year Credit Facility Term Loans have been repaid
in full, section 9.5(g), the EXCESS of: (a) the gross cash proceeds received by
the Borrower or any such Subsidiary from such incurrence, sale, or issuance,
OVER (b) the sum of (i) all reasonable and customary underwriting commissions
and legal, investment banking, brokerage and accounting and other professional
fees, sales commissions and disbursements and all other reasonable fees,
expenses and charges, in each case actually incurred in connection with such
incurrence, sale or issuance, (ii) in the case of any Debt incurred, sold or
issued by any Foreign Subsidiary, any taxes or other costs or expenses resulting
from repatriating any such proceeds to the United States, and (iii) in the case
of any Debt incurred, sold or issued by a Subsidiary that is not a Wholly-Owned
Subsidiary, an amount equal to the product of such gross cash proceeds (as
reduced pursuant to subclauses (i) and (ii) of this clause (b)) multiplied by
the percentage equity interest in such Subsidiary not held, directly or
indirectly, by the Borrower.
"NET DISPOSITION PROCEEDS" means, with respect to any Disposition of
any assets of the Borrower or any Subsidiary, other than Dispositions made as
part of the Transaction and other sales permitted pursuant to section 9.2(a) and
section 9.2(b), but including any sale or issuance of Capital Stock of any such
Subsidiary to any Person other than the Borrower or any of its Subsidiaries, the
EXCESS of (a) the sum of the gross cash proceeds received, directly or
indirectly, by the Borrower or any Subsidiary from any such Disposition and any
cash payments received in respect of promissory notes or other non-cash
consideration delivered to the Borrower or such Subsidiary in respect thereof,
OVER (b) the sum of (i) all reasonable and customary fees and
17
expenses with respect to legal, investment banking, brokerage, accounting and
other professional fees, sales commissions and disbursements and all other
reasonable fees, expenses and charges, in each case actually incurred in
connection with such Disposition, (ii) all taxes and other governmental costs
and expenses actually paid or estimated by the Borrower (in good faith) to be
payable in cash in connection with such Disposition (including, in the event of
a Disposition of non-U.S. assets, any such taxes or other costs or expenses
resulting from repatriating any such proceeds to the United States), (iii) the
proceeds received by Foreign Subsidiaries to the extent such proceeds may not,
under applicable law, charter provisions or otherwise, be paid to the Borrower
or another Subsidiary in the form of a dividend or similar distribution, (iv)
payments made by the Borrower or any Subsidiary to retire Indebtedness (other
than the Loans) of the Borrower or any Subsidiary where payment of such
Indebtedness is required in connection with such Disposition, (v) reserves for
purchase price adjustments and retained fixed liabilities reasonably expected to
be payable by the Borrower and its Subsidiaries in cash in connection therewith
and (vi) in the case of any Disposition by a Subsidiary that is not a
Wholly-Owned Subsidiary, an amount equal to the product of such gross cash
proceeds (as reduced pursuant to subclauses (i) through (v) of this clause (b))
multiplied by the percentage equity interest in such Subsidiary not held,
directly or indirectly, by the Borrower; PROVIDED that if, after the payment of
all taxes, purchase price adjustments and retained fixed liabilities with
respect to such Disposition, the amount of estimated taxes, purchase price
adjustments or retained fixed liabilities, if any, pursuant to clause (b)(ii) or
(b)(v) above exceeded the tax, purchase price adjustment or retained fixed
liabilities amount actually paid in cash in respect of such Disposition, the
aggregate amount of such excess shall, at such time, constitute Net Disposition
Proceeds.
"NET EQUITY PROCEEDS" shall mean with respect to any sale or issuance
by the Borrower to any person of any Capital Stock of the Borrower, or any
warrants or options with respect to any such Capital Stock or the exercise of
any such warrants or options after the Effective Date (exclusive of any such
proceeds constituting Excluded Equity Proceeds) the excess of: (i) the gross
cash proceeds received by the Borrower from such sale, exercise or issuance,
OVER (ii) the sum of all reasonable and customary underwriting commissions and
legal, investment banking, brokerage, accounting and other professional fees,
sales commissions and disbursements and all other reasonable fees, expenses and
charges, in each case actually incurred in connection with such sale or
issuance.
"NCB" shall have the meaning provided in the first paragraph of this
Agreement, and its successors and assigns.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended.
"NON-DEFAULTING LENDER" shall mean each Lender other than a Defaulting
Lender.
"NOTE" shall mean a Revolving Note or a Competitive Bid Note, as
applicable.
18
"NOTICE OF BORROWING" shall have the meaning provided in section 2.2(a)
or shall mean a Notice of Competitive Bid Borrowing, as applicable.
"NOTICE OF COMPETITIVE BID BORROWING" shall have the meaning provided
in section 2.3(a).
"NOTICE OF CONTINUATION" shall have the meaning provided in section
2.8(a).
"NOTICE OF CONVERSION" shall have the meaning provided in section 2.5.
"NOTICE OFFICE" shall mean the office of the Administrative Agent at
629 Euclid Avenue, LOC #3028, Cleveland, Ohio 44114, Attention: Agency Services
(telephone: (216) 222-2314; facsimile: (216) 222-0012), or such other office,
located in a city in the United States Eastern Time Zone, as the Administrative
Agent may designate to the Borrower from time to time.
"OBLIGATIONS" shall mean all amounts, direct or indirect, contingent or
absolute, of every type or description, and at any time existing, owing by the
Borrower to the Agents or any Lender or Designated Bidder pursuant to the terms
of this Agreement or any other Credit Document.
"OMG" shall have the meaning provided in the first whereas clause of
this Agreement.
"OPERATING LEASE" as applied to any person shall mean any lease of any
property (whether real, personal or mixed) by that person as lessee which, in
conformity with GAAP, is not accounted for as a Capital Lease on the balance
sheet of that person.
"PARI PASSU" shall mean, when used with reference to the ranking of any
Debt of any person in relation to any other Debt of such person, that each such
Debt (a) either (i) is not subordinate in right of payment to any other Debt of
such person or (ii) is subordinate in right of payment to the same Debt of such
person as is the other and is so subordinate to the same extent and (b) is not
subordinate in right of payment to the other or to any Debt of such person as to
which the other is not so subordinate.
"PAYMENT OFFICE" shall mean the office of the Administrative Agent at
629 Euclid Avenue, LOC #3028, Cleveland, Ohio 44114, Attention: Agency Services
(telephone: (216) 222-2314 or (216) 575-560; facsimile: (216) 222-0012), or such
other office, located in a city in the United States Eastern Time Zone, as the
Administrative Agent may designate to the Borrower from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"PERMITTED LIENS" shall mean:
19
(a) any Liens for current taxes, assessments and other
governmental charges not yet due and payable or being contested in good
faith by the Borrower or one or more of its Subsidiaries by appropriate
proceedings;
(b) any mechanic's, materialman's, carrier's, warehousemen's
or similar Liens for sums not yet due or being contested in good faith
by the Borrower or one or more of its Subsidiaries by appropriate
proceedings;
(c) Liens in favor of the Lenders under this Agreement;
(d) easements, rights-of-way, restrictions and other similar
encumbrances on the Real Property of the Borrower or one or more of its
Subsidiaries incurred in the ordinary course of business that
individually or in the aggregate are not substantial in amount and that
do not in any case materially detract from the value of the property
subject thereto or interfere with the ordinary conduct of the business
of the Borrower or any of its Subsidiaries;
(e) Liens incurred or deposits made in the ordinary course of
business, including Liens in connection with workers' compensation,
unemployment insurance and other types of social security and Liens to
secure performance of tenders, statutory obligations, trade contracts
(other than for Debt), surety and appeal bonds (in the case of appeal
bonds such Lien shall not secure any reimbursement or indemnity
obligation in an amount greater than $500,000), bids, leases that are
not Capital Leases, performance bonds, sales contracts and other
similar obligations, deposits securing liability to insurance carriers
under insurance or self-insurance arrangements, in each case, not
incurred in connection with the obtaining of credit or the payment of a
deferred purchase price, and which do not, in the aggregate, result in
a Material Adverse Effect;
(f) Liens existing upon the date hereof;
(g) Liens securing obligations incurred to finance the
deferred purchase price of property; PROVIDED that (i) such Liens shall
be created within 120 days after the acquisition of such property, (ii)
such Liens do not at any time encumber any property other than the
property financed by such obligations, (iii) the amount of the
obligation secured thereby is not increased, and (iv) the principal
amount of an obligation secured by any such Lien shall at no time
exceed the lesser of (A) 100% of the original purchase price of such
property and (B) the fair value (as determined in good faith by the
Board of Directors of the Borrower) of such property at the time it was
acquired;
(h) Liens securing obligations assumed in connection with
acquisitions made in accordance with Section 9.3; PROVIDED that (i)
such Liens exist at the time of the acquisition and were not created in
anticipation thereof, (ii) any such Lien is not spread to cover any
additional property or assets after the time of such acquisition, and
(iii) the amount of the obligation secured by any such Lien is not
increased;
20
(i) judgment Liens to the extent the entry of such judgment
does not constitute a Default or Event of Default under the terms of
this Agreement;
(j) Liens created in connection with the Permitted Receivables
Programs; and
(k) Liens (not otherwise permitted hereunder) that secure
obligations not exceeding (as to the Borrower and its Subsidiaries)
$5,000,000 in the aggregate at any time outstanding; PROVIDED that such
Liens are limited to assets other than accounts.
"PERMITTED RECEIVABLES PROGRAMS" shall have the meaning provided in
section 9.2(b).
"PERSON" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"PLAN" shall mean any multiemployer or single-employer plan as defined
in section 4001 of ERISA, which is maintained or contributed to by (or to which
there is an obligation to contribute by) the Borrower or a Subsidiary of the
Borrower or an ERISA Affiliate, and each such plan for the five year period
immediately following the latest date on which the Borrower, or a Subsidiary of
the Borrower or an ERISA Affiliate maintained, contributed to or had an
obligation to contribute to such plan.
"PRICING GRID" shall have the meaning provided in section 2.7(g).
"PRIME RATE" shall mean, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time which rate per annum shall at
all times be equal to the greater of (i) the rate of interest established by NCB
in Cleveland, Ohio, from time to time, as its prime rate, whether or not
publicly announced, which interest rate may or may not be the lowest rate
charged by it for commercial loans or other extensions of credit; and (ii) the
Federal Funds Effective Rate in effect from time to time PLUS 1/2 of 1% per
annum.
"PRIME RATE LOAN" shall mean each Loan bearing interest at the rate
provided in section 2.7(a).
"PRINCIPAL DOMESTIC MANUFACTURING PROPERTY" shall mean any building,
structure or other facility, together with the land upon which it is erected and
fixtures comprising a part thereof, used primarily for manufacturing, processing
or warehousing of the Borrower's products and located in the United States of
America, owned or leased by the Borrower or any Subsidiary, the gross book value
(without deduction of any depreciation reserves) of which on the date as of
which the determination is being made exceeds 1% of Consolidated Net Tangible
Assets, other than any such building, structure or other facility or portion
thereof or any such land or fixture (i) which is financed by obligations issued
by a State, a Territory, or a possession of the United States, or any political
subdivision of any of the foregoing, or the District of Columbia, the interest
on which is excludible from gross income of the holders thereof pursuant to the
21
provisions of section 745 of Title 48 of the United States Code (or any
successor to such provisions) as in effect at the time of the issuance of such
obligations, or (ii) which, in the opinion of the Board of Directors of the
Borrower, is not of material importance to the total business conducted by the
Borrower and its Subsidiaries as an entirety.
"PROHIBITED TRANSACTION" shall mean a transaction with respect to a
Plan that is prohibited under section 4975 of the Code or section 406 of ERISA
and not exempt under section 4975 of the Code or section 408 of ERISA.
"PROPERTY" of any person shall mean all of the right, title and
interest of such person in and to any and all property, tangible or intangible,
real or personal or mixed, of every kind and character and wherever located or
whenever acquired.
"PURCHASE AGREEMENT" shall have the meaning provided in the first
whereas clause of this Agreement.
"RATING AGENCY" shall mean S&P or Moody's; collectively, the "RATING
AGENCIES."
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. Section 6901 ET SEQ.
"REAL PROPERTY" of any person shall mean all of the right, title and
interest of such person in and to land, improvements and fixtures, including
Leaseholds.
"REDEEMABLE STOCK" shall mean with respect to any person any capital
stock or similar equity interests of such person that (i) is by its terms
subject to mandatory redemption, in whole or in part, pursuant to a sinking
fund, scheduled redemption or similar provisions, at any time prior to the
Maturity Date; or (ii) otherwise is required to be repurchased or retired on a
scheduled date or dates, upon the occurrence of any event or circumstance, at
the option of the holder or holders thereof, or otherwise, at any time prior to
the Maturity Date, other than any such repurchase or retirement occasioned by a
"change of control" or similar event; PROVIDED that Redeemable Stock shall not
include the Series A ESOP Convertible Preferred Stock of the Borrower.
"REFERENCE BANKS" shall mean (i) NCB and (ii) any other Lender or
Lenders selected as a Reference Bank by the Administrative Agent and the
Required Lenders; PROVIDED that if any of such Reference Banks is no longer a
Lender, such other Lender or Lenders as may be selected by the Administrative
Agent acting on instructions from the Required Lenders.
"REFINANCING" shall have the meaning provided in the second whereas
clause of this Agreement.
22
"REGULATION D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"REGULATION U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing margin requirements.
"REPORTABLE EVENT" shall mean an event described in section 4043 of
ERISA or the regulations thereunder with respect to a Plan, other than those
events as to which the notice requirement is waived under subsections .22, .23,
.24, .25, .27, .28, .29, .30, .31, .32, .34, .35, .62, .63, .64, .65 or .67 of
PBGC Regulation section 4043.
"REQUIRED LENDERS" shall mean Non-Defaulting Lenders whose outstanding
Loans and Unutilized Commitments constitute at least 51% of the sum of the total
outstanding Loans and Unutilized Commitments of Non-Defaulting Lenders (PROVIDED
that, for purposes hereof, neither the Borrower, nor any of its Affiliates,
shall be included in (i) the Lenders holding such amount of such Loans or having
such amount of such Unutilized Commitments, or (ii) determining the aggregate
unpaid principal amount of such Loans or such Unutilized Commitments); and
PROVIDED, FURTHER, that for purpose of declaring the Loans due and payable
pursuant to section 10.2, and for all purposes after the Loans become due and
payable pursuant to section 10.2 or after the Total Commitment expires or is
terminated, the outstanding Competitive Bid Loans of the Non-Defaulting Lenders
shall be included together with the outstanding Loans in determining the
Required Lenders.
"RESTRICTED PAYMENT" shall have the meaning provided in section 9.11.
"REVOLVING NOTE" shall have the meaning provided in section 2.4(a).
"SALE AND LEASEBACK TRANSACTION" shall have the meaning provided in
section 9.4.
"S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., and its successors.
"SEC" shall mean the United States Securities and Exchange Commission.
"SEC REGULATION D" shall mean Regulation D as promulgated under the
Securities Act of 1933, as amended, as the same may be in effect from time to
time.
"SUBSIDIARY" of any person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such person directly or
indirectly through
23
Subsidiaries and (ii) any partnership, association, joint venture or other
entity in which such person directly or indirectly through Subsidiaries, has
more than a 50% equity interest at the time. Unless otherwise expressly
provided, all references herein to "Subsidiary" shall mean a Subsidiary of the
Borrower.
"SUBSIDIARY GUARANTY" shall have the meaning provided in section
8.11(a).
"SUBORDINATED INDEBTEDNESS" shall mean any Indebtedness which has been
subordinated to the Obligations in such manner and to such extent as the
Administrative Agent (acting on instructions from the Required Lenders) may
require.
"SYNTHETIC LEASE" shall mean any lease (i) which is accounted for by
the lessee as an Operating Lease, and (ii) under which the lessee is intended to
be the "owner" of the leased property for Federal income tax purposes.
"TAXES" shall mean any and all income, stamp or other taxes, duties,
levies, imposts, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any taxing authority, and
all interest, penalties or similar liabilities with respect thereto, but
excluding income and franchise taxes imposed on or measured by the net income or
receipts of the Administrative Agent or any Lender by the taxing authority under
the laws of which the Administrative Agent or such Lender, as applicable, is
organized or in which it maintains its applicable lending office.
"TESTING PERIOD" shall mean for any determination a single period
consisting of the four consecutive fiscal quarters of the Borrower then last
ended (whether or not such quarters are all within the same fiscal year), EXCEPT
that if a particular provision of this Agreement indicates that a Testing Period
shall be of a different specified duration, such Testing Period shall consist of
the particular fiscal quarter or quarters then last ended which are so indicated
in such provision.
"TOTAL COMMITMENT" shall mean all the Commitments hereunder.
"TRANSACTION" shall have the meaning provided in the second whereas
clause of this Agreement.
"TRANSACTION DOCUMENTS" means the Purchase Agreement and all of the
principal agreements, documents, instruments, certificates, filings, consents,
approvals, board of directors resolutions and opinions furnished pursuant to or
in connection with the Transaction, and the transactions contemplated hereby or
thereby, each as amended, supplemented, amended and restated or otherwise
modified from time to time as permitted in accordance with the terms hereof or
of any other Credit Document.
"TYPE" shall mean any type of Loan determined with respect to the
interest option applicable thereto, I.E., (i) a Prime Rate Loan or a LIBOR Loan,
in the case of Borrowings under
24
the Facility, or (ii) a Competitive Bid Loan with interest at a fixed rate or on
some other basis, in the case of Borrowings of Competitive Bid Loans.
"UCC" shall mean the Uniform Commercial Code as at the time in effect
in any applicable jurisdiction.
"UNFUNDED CURRENT LIABILITY" of any Plan shall mean the amount, if any,
by which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year exceeds the fair market value
of the assets allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No. 87, based upon the actuarial assumptions used
by the Plan's actuary in the most recent annual valuation of the Plan.
"UNITED STATES" and "U.S." each means United States of America.
"UNUTILIZED COMMITMENT" for any Lender at any time shall mean the
excess of (i) such Lender's Commitment at such time over (ii) the principal
amount of Loans made by such Lender and outstanding at such time.
"UNUTILIZED TOTAL COMMITMENT" shall mean, at any time, the excess of
(i) the Total Commitment at such time over (ii) the aggregate principal amount
of all Loans then outstanding.
"WHOLLY-OWNED SUBSIDIARY" shall mean each Subsidiary of the Borrower at
least 95% of whose capital stock, equity interests and partnership interests,
other than director's qualifying shares or similar interests, are owned directly
or indirectly by the Borrower.
"WRITTEN", "WRITTEN" or "IN WRITING" shall mean any form of written
communication or a communication by means of telex, facsimile transmission,
telegraph or cable.
1.2 COMPUTATION OF TIME PERIODS. In this Agreement in the computation
of periods of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" each means "to
but excluding".
1.3 ACCOUNTING TERMS. Except as otherwise specifically provided herein,
all terms of an accounting or financial nature shall be construed in accordance
with GAAP, as in effect from time to time; PROVIDED that, if the Borrower
notifies the Administrative Agent that the Borrower requests an amendment to any
provision of section 8 or 9 hereof to eliminate the effect of any change
occurring after the Effective Date in GAAP or in the application thereof to such
provision (or if the Administrative Agent notifies the Borrower that the
Required Lenders request an amendment to any such provision hereof for such
purposes), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance with the requirements of this
Agreement.
25
1.4 TERMS GENERALLY. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any person shall be construed to include such person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to sections, Annexes
and Exhibits shall be construed to refer to sections of, and Annexes and
Exhibits to, this Agreement, and (e) the words "asset" and "property" shall be
construed to have the same meaning and effect and to refer to any and all real
property, tangible and intangible assets and properties, including cash,
securities, accounts and contract rights, and interests in any of the foregoing.
SECTION 2. AMOUNT AND TERMS OF LOANS.
2.1 COMMITMENTS FOR LOANS. Subject to and upon the terms and conditions
herein set forth, each Lender that has a Commitment severally agrees to make
Loans (each a "LOAN" and, collectively, the "LOANS") to the Borrower. Loans (i)
may be incurred by the Borrower at any time and from time to time on and after
the Closing Date and prior to the earlier of the Business Day immediately
preceding the Maturity Date or the date the Total Commitment is terminated; (ii)
except as otherwise provided, may, at the option of the Borrower, be incurred
and maintained as, or Converted into, Loans which are Prime Rate Loans or LIBOR
Loans, in each case denominated in Dollars; PROVIDED that all Loans made as part
of the same Borrowing shall, unless otherwise specifically provided herein,
consist of Loans of the same Type; (iii) may be repaid or prepaid and reborrowed
in accordance with the provisions hereof; and (iv) shall not, at any time of
determination, in the aggregate exceed the aggregate amount of the Total
Commitment at such time.
Except as may otherwise be specifically provided in this Agreement, the
Total Commitment shall be deemed used (and correspondently, the Unutilized Total
Commitment shall be deemed reduced) from time to time by the aggregate
outstanding principal amount of the Competitive Bid Loans then outstanding, and
such deemed usage of the Total Commitment (and such deemed reduction in the
Unutilized Total Commitment) shall be pro rated among the Lenders according to
their respective Facility Percentages (such deemed usage of the Total Commitment
and such deemed reduction in the Unutilized Total Commitment, each being a
"COMPETITIVE BID REDUCTION").
26
2.2 PROCEDURES FOR BORROWING AND DISBURSEMENT OF FUNDS. (a) NOTICE OF
BORROWING. Whenever the Borrower desires to incur Loans it shall give the
Administrative Agent at its Notice Office:
(A) BORROWINGS OF LIBOR LOANS: prior to 12:00 noon (local time
at its Notice Office), at least three Business Days' prior written or
telephonic notice (in the case of telephonic notice, promptly confirmed
in writing if so requested by the Administrative Agent) of each
Borrowing of LIBOR Loans to be made hereunder, or
(B) BORROWINGS OF PRIME RATE LOANS: prior to 10:00 a.m. (local
time at its Notice Office) on the proposed date thereof written or
telephonic notice (in the case of telephonic notice, promptly confirmed
in writing if so requested by the Administrative Agent) of each
Borrowing of Prime Rate Loans to be made hereunder.
Each such notice (each such notice, a "NOTICE OF BORROWING") shall (if requested
by the Administrative Agent to be confirmed in writing), be substantially in the
form of Exhibit B-1, and in any event shall be irrevocable and shall specify:
(i) the aggregate principal amount of the Loans to be made pursuant to such
Borrowing; (ii) the Type of Loan to be included in such Borrowing; (iii) the
date of the Borrowing (which shall be a Business Day); and (iv) if the requested
Borrowing consists of LIBOR Loans, the Interest Period to be initially
applicable thereto. The Administrative Agent shall promptly give each Lender
which has a Commitment under the Facility written notice (or telephonic notice
promptly confirmed in writing) of each proposed Borrowing, of such Lender's
proportionate share thereof and of the other matters covered by the Notice of
Borrowing relating thereto.
(b) ACTIONS BY ADMINISTRATIVE AGENT ON TELEPHONE NOTICE. Without in any
way limiting the obligation of the Borrower to confirm in writing any telephonic
notice permitted to be given hereunder, the Administrative Agent may act prior
to receipt of written confirmation without liability upon the basis of such
telephonic notice believed by the Administrative Agent in good faith to be from
an Authorized Officer of the Borrower entitled to give telephonic notices under
this Agreement on behalf of the Borrower. In each such case, the Administrative
Agent's record of the terms of such telephonic notice shall be conclusive absent
manifest error.
(c) MINIMUM BORROWING AMOUNTS, ETC. The aggregate principal amount of
each Borrowing by the Borrower shall not be less than the Minimum Borrowing
Amount. More than one Borrowing may be incurred by the Borrower on any day under
the Facility; PROVIDED that (i) if there are two or more Borrowings of LIBOR
Loans on a single day, each such Borrowing shall have a different initial
Interest Period, and (ii) at no time shall there be more than 10 Borrowings of
LIBOR Loans outstanding under the Facility.
(d) PRO RATA BORROWINGS. All Borrowings shall be made by the Lenders
having Commitments PRO RATA on the basis of their respective Commitments. It is
understood that no Lender shall be responsible for any default by any other
Lender in its obligation to make Loans
27
hereunder and that each Lender shall be obligated to make the Loans provided to
be made by it hereunder, regardless of the failure of any other Lender to
fulfill its Commitment hereunder.
(e) DISBURSEMENT OF FUNDS. (i) No later than 2:00 P.M. (local time at
the Payment Office) on the date specified in each Notice of Borrowing relating
to LIBOR Loans, and no later than 2:00 P.M. (local time at the Payment Office)
on the date specified in each Notice of Borrowing relating to Prime Rate Loans,
each Lender will make available its PRO RATA share, if any, of each Borrowing
requested to be made on such date in the manner provided below. All amounts
shall be made available to the Administrative Agent in Dollars and immediately
available funds at the Payment Office and the Administrative Agent promptly will
make available to the Borrower by depositing to its account at the Payment
Office the aggregate of the amounts so made available in the type of funds
received. Unless the Administrative Agent shall have been notified by any Lender
prior to the date of Borrowing that such Lender does not intend to make
available to the Administrative Agent its portion of the Borrowing or Borrowings
to be made on such date, the Administrative Agent may assume that such Lender
has made such amount available to the Administrative Agent on such date of
Borrowing, and the Administrative Agent, in reliance upon such assumption, may
(in its sole discretion and without any obligation to do so) make available to
the Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent by such Lender and the Administrative
Agent has made available same to the Borrower, the Administrative Agent shall be
entitled to recover such corresponding amount from such Lender. If such Lender
does not pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall promptly notify the Borrower,
and the Borrower shall immediately pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to recover
from such Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the Borrower to the
date such corresponding amount is recovered by the Administrative Agent, at a
rate per annum equal to (x) if paid by such Lender, the overnight Federal Funds
Effective Rate or (y) if paid by the Borrower, the then applicable rate of
interest, calculated in accordance with section 2.7, for the respective Loans
(but without any requirement to pay any amounts in respect thereof pursuant to
section 2.10).
(ii) Nothing in this section 2.2(e) and no subsequent termination of
the Commitments pursuant to section 4.2 or 4.3 shall be deemed to relieve any
Lender from its obligation to fulfill its Commitments hereunder and in existence
from time to time or to prejudice any rights which the Borrower may have against
any Lender as a result of any default by such Lender hereunder.
2.3 COMPETITIVE BID LOANS. (a) GENERAL. The Borrower and each Lender
severally agrees that Competitive Bid Borrowings under this section may only be
made on a Business Day during the period from the Closing Date until the date
occurring one month prior to the earlier of the Maturity Date or the date the
Total Commitment is terminated, in the manner, and subject to the terms and
conditions, set forth below; PROVIDED that notwithstanding anything to the
contrary contained herein, following the making of any Competitive Bid
Borrowing, (x) the sum of the
28
aggregate outstanding Loans and the aggregate outstanding Competitive Bid Loans
shall not exceed the Total Commitment then in effect (computed without regard to
any Competitive Bid Reduction) and (y) the Leverage Ratio shall not be greater
than 3.00 to 1.00 on a pro forma basis after giving effect to such Competitive
Bid Borrowing:
(i) PERMITTED TYPES OF COMPETITIVE BID BORROWINGS. The only
types of Competitive Bid Borrowings which can be made under this
Agreement are the following:
(A) a Competitive Bid Borrowing in which the rate of
interest to be paid to each Lender participating in such
Competitive Bid Borrowing shall be the fixed rate per annum
bid by such Lender for such Competitive Bid Borrowing as
provided below (a "Fixed Rate Competitive Bid Borrowing"), and
(B) a Competitive Bid Borrowing in which the rate of
interest to be paid to each Lender participating in such
Competitive Bid Borrowing shall be the Adjusted LIBO Rate for
the Interest Period applicable to such Competitive Bid
Borrowing plus the margin in basis points which was bid by
such Lender for such Competitive Bid Borrowing as provided
below (an "ADJUSTED LIBO RATE COMPETITIVE BID BORROWING").
(ii) NOTICE OF COMPETITIVE BID BORROWING. The Borrower may
request a Competitive Bid Borrowing under this section 2.3 by
delivering to the Administrative Agent, by telecopier, electronic
e-mail transmission, telex or cable, confirmed immediately in writing,
a notice of a Competitive Bid Borrowing (a "NOTICE OF COMPETITIVE BID
BORROWING"), in substantially the form of Exhibit B-2 hereto,
specifying (x) the date and aggregate amount of the proposed
Competitive Bid Borrowing, (y) the maturity date for repayment of each
Competitive Bid Loan to be made as part of such Competitive Bid
Borrowing (which maturity date shall be the last day of an Interest
Period of one, two, three or six months duration following the date of
such Competitive Bid Borrowing, but in no event later than the Maturity
Date), (z) the interest payment date or dates relating thereto, and any
other terms to be applicable to such Competitive Bid Borrowing, not
later than 10:00 A.M. (local time at the Notice Office)
(A) at least two Business Days prior to the date of
the proposed Competitive Bid Borrowing, if the Borrower shall
specify in the Notice of Competitive Bid Borrowing that the
Borrowing shall be a Fixed Rate Competitive Bid Borrowing), or
(B) at least five Business Days prior to the date of
the proposed Competitive Bid Borrowing, if the Borrower shall
instead specify in the Notice of Competitive Bid Borrowing
that the Borrowing shall be an Adjusted LIBO Rate Competitive
Bid Borrowing.
29
A Notice of Competitive Bid Borrowing shall specify that the requested
Borrowing is either a Fixed Rate Competitive Bid Borrowing or an
Adjusted LIBO Rate Competitive Bid Borrowing, but not both or either in
the alternative. Competitive Bid Loans shall only be made in Dollars.
If the Borrower and the Administrative Agent shall have so agreed, the
Borrower shall pay to the Administrative Agent, for its own account, in
connection with each request for a Competitive Bid Borrowing, promptly
after receipt of an invoice therefor, a competitive bid administrative
fee in such amount as has been so agreed. The Administrative Agent
shall in turn promptly notify each Lender of each request for a
Competitive Bid Borrowing received by it from the Borrower by sending
such Lender a copy of the related Notice of Competitive Bid Borrowing.
(iii) BIDDING BY LENDERS. Each Lender may, in its sole
discretion, elect to irrevocably offer to make one or more Competitive
Bid Loans to the Borrower as part of a proposed Competitive Bid
Borrowing at a rate or rates of interest specified by such Lender in
its sole discretion but responsive to the parameters for a Fixed Rate
Competitive Bid Borrowing or an Adjusted LIBO Rate Competitive Bid
Borrowing, as specified in such Notice of Competitive Bid Borrowing, by
notifying the Administrative Agent (which shall give prompt notice
thereof to the Borrower), before 10:00 A.M. (local time at the Notice
Office) (A) on the Business Day prior to the date of such proposed
Competitive Bid Borrowing, in the case of a Notice of Competitive Bid
Borrowing requesting a Fixed Rate Competitive Bid Borrowing and (B)
four Business Days before the date of such proposed Competitive Bid
Borrowing, in the case of a Notice of Competitive Bid Borrowing
requesting an Adjusted LIBO Rate Competitive Bid Borrowing, of the
minimum amount and maximum amount of each Competitive Bid Loan which
such Lender would be willing to make as part of such proposed
Competitive Bid Borrowing (which amounts may, subject to the proviso to
the first sentence of this section 2.3(a), exceed such Lender's
Commitment), the margin or rate or rates of interest therefor
(specified to four decimal places) and such Lender's Applicable Lending
Office with respect to such Competitive Bid Loan; PROVIDED that if the
Administrative Agent in its capacity as a Lender shall, in its sole
discretion, elect to make any such offer, it shall notify the Borrower
of such offer before 9:00 A.M. (local time at the Notice Office) on the
date on which notice of such election is to be given to the
Administrative Agent by the other Lenders. If any Lender shall elect
not to make such an offer, such Lender shall so notify the
Administrative Agent, before 10:00 A.M. (local time at the Notice
Office) on the date on which notice of such election is to be given to
the Administrative Agent by the other Lenders, and such Lender shall
not be obligated to, and shall not, make any Competitive Bid Loan as
part of such Competitive Bid Borrowing; PROVIDED that the failure by
any Lender to give such notice shall not cause such Lender to be
obligated to make any Competitive Bid Loan as part of such proposed
Competitive Bid Borrowing. It is understood and agreed that the
Borrower may not accept any offer to make a Competitive Bid Loan if
such offer is not made on a timely basis or otherwise fails to comply
with the requirements of this Agreement.
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(iv) ACCEPTANCE OF BIDS OR CANCELLATION OF COMPETITIVE BID
BORROWING. The Borrower shall, in turn, (A) before 12:00 noon (local
time at the Notice Office) on the date of such proposed Competitive Bid
Borrowing, in the case of a Notice of Competitive Bid Borrowing
delivered pursuant to clause (A) of paragraph (i) above and (B) before
12:00 noon (local time at the Notice Office) three Business Days before
the date of such proposed Competitive Bid Borrowing, in the case of a
Notice of Competitive Bid Borrowing delivered pursuant to clause (B) of
paragraph (i) above, either
(x) cancel such Competitive Bid Borrowing by giving
the Administrative Agent notice to that effect, or
(y) accept one or more of the offers made by any
Lender or Lenders pursuant to paragraph (iii) above, in
ascending order, from the lowest cost to the highest cost
acceptable to the Borrower in its sole discretion (subject, if
necessary, to ratable allocation between or among Lenders
offering the same interest rates or margins), by giving notice
to the Administrative Agent of the amount of each Competitive
Bid Loan (which amount shall be equal to or greater than the
minimum amount, and equal to or less than the maximum amount,
notified to the Borrower by the Administrative Agent on behalf
of such Lender for such Competitive Bid Loan pursuant to
paragraph (iii) above) to be made by each Lender as part of
such Competitive Bid Borrowing, and reject any remaining
offers made by Lenders pursuant to paragraph (iii) above by
giving the Administrative Agent notice to that effect;
PROVIDED that the aggregate principal amount of each
Competitive Bid Borrowing may not exceed the applicable amount
requested in the relevant Notice of Competitive Bid Borrowing.
(v) NOTICE TO LENDERS OF CANCELLATION. If the Borrower
notifies the Administrative Agent that such Competitive Bid Borrowing
is cancelled pursuant to paragraph (iv)(x) above, the Administrative
Agent shall give prompt notice thereof to the Lenders and such
Competitive Bid Borrowing shall not be made.
(vi) BORROWING PROCEDURES. If the Borrower accepts one or more
of the offers made by any Lender or Lenders pursuant to paragraph
(iv)(y) above, the Administrative Agent shall in turn promptly notify
(A) each Lender that has made an offer as described in paragraph (iii)
above, of the date and aggregate amount of such Competitive Bid
Borrowing and whether or not any offer or offers made by such Lender
pursuant to paragraph (iii) above have been accepted by the Borrower,
(B) each Lender that is to make a Competitive Bid Loan as part of such
Competitive Bid Borrowing, of the amount of each Competitive Bid Loan
to be made by such Lender as part of such Competitive Bid Borrowing and
(C) each Lender that is to make a Competitive Bid Loan as part of such
Competitive Bid Borrowing, upon receipt, that the Administrative Agent
has (to the extent not previously delivered) received forms of
documents appearing to fulfill the applicable conditions set forth in
section 6. Each Lender that is to make a
31
Competitive Bid Loan as part of such Competitive Bid Borrowing shall,
before 12:00 noon (local time at the Notice Office) on the date of such
Competitive Bid Borrowing specified in the notice received from the
Administrative Agent pursuant to clause (A) of the preceding sentence
or any later time when such Lender shall have received notice from the
Administrative Agent pursuant to clause (C) of the preceding sentence,
make available for the account of its Applicable Lending Office to the
Administrative Agent at its Payment Office such Lender's portion of
such Competitive Bid Borrowing, in same day funds. Upon fulfillment of
the applicable conditions set forth in section 6 and after receipt by
the Administrative Agent of such funds, the Administrative Agent will
make such funds available to the Borrower at the Administrative Agent's
Payment's Office. Promptly after each Competitive Bid Borrowing the
Administrative Agent will notify each Lender of the amount of the
Competitive Bid Borrowing, the consequent Competitive Bid Reduction and
the dates upon which such Competitive Bid Reduction commenced and will
terminate.
(b) AMOUNT OF COMPETITIVE BID BORROWINGS. Each Competitive Bid
Borrowing shall be in an aggregate amount not less than $10,000,000 or an
integral multiple of $1,000,000 in excess thereof and, following the making of
each Competitive Bid Borrowing, the Borrower shall be in compliance with the
limitations set forth in the proviso to the first sentence of section 2.3(a)
above.
(c) BORROWINGS, REPAYMENTS, PREPAYMENTS AND REBORROWINGS; TIME BETWEEN
COMPETITIVE BID BORROWINGS. Within the limits and on the conditions set forth in
this section 2.3, the Borrower may from time to time borrow under this section
2.3, repay or prepay pursuant to section 2.3(d) below, and reborrow under this
section 2.3; PROVIDED that a Competitive Bid Borrowing shall not be made within
10 Business Days of the date of any other Competitive Bid Borrowing.
(d) REPAYMENT OF COMPETITIVE BID LOANS, ETC. The Borrower shall repay
to the Administrative Agent for the account of each Lender which has made a
Competitive Bid Loan, or each other holder of a Competitive Bid Note, on the
maturity date of each Competitive Bid Loan (such maturity date being that
specified by the Borrower for repayment of such Competitive Bid Loan in the
related Notice of Competitive Bid Borrowing delivered pursuant to section
2.3(a)(ii) above and provided in the Competitive Bid Note evidencing such
Competitive Bid Loan), the then unpaid principal amount of such Competitive Bid
Loan. The Borrower shall have no right to prepay any principal amount of any
Competitive Bid Loan unless, and then only on the terms, specified by the
Borrower for such Competitive Bid Loan in the related Notice of Competitive Bid
Borrowing delivered pursuant to section 2.3(a)(ii) above and set forth in the
Competitive Bid Note evidencing such Competitive Bid Loan. Competitive Bid Loans
made by any Lender shall be subject to mandatory prepayment in accordance with
the provisions of section 5.2 hereof. Any such mandatory prepayment shall be
accompanied by accrued interest on the amount of the prepayment to the date of
prepayment and such breakage compensation as may be reasonably determined by
such Lender as necessary to compensate it for all reasonable
32
losses, expenses and liabilities (including, without limitation, any loss,
expense or liability incurred by reason of the liquidation or reemployment of
deposits or other funds required by such Lender to fund its Competitive Bid
Loans) which such Lender may sustain by reason of such mandatory prepayment.
(e) INTEREST ON COMPETITIVE BID LOANS. The Borrower shall pay interest
on the unpaid principal amount of each Competitive Bid Loan from the date of
such Competitive Bid Loan to the date the principal amount of such Competitive
Bid Loan is repaid in full, at the rate of interest for such Competitive Bid
Loan specified by the Lender making such Competitive Bid Loan in its notice with
respect thereto delivered pursuant to section 2.3(a)(iii) above, payable on the
interest payment date or dates specified by the Borrower for such Competitive
Bid Loan in the related Notice of Competitive Bid Borrowing delivered pursuant
to section 2.3(a)(ii) above, as provided in the Competitive Bid Note evidencing
such Competitive Bid Loan.
(f) COMPETITIVE BID NOTES. The indebtedness of the Borrower resulting
from each Competitive Bid Loan made to the Borrower as part of a Competitive Bid
Borrowing shall be evidenced by the Competitive Bid Note of the Borrower payable
to the order of the Lender making such Competitive Bid Loan.
2.4 NOTES; LOAN ACCOUNTS. (a) FORMS OF NOTES. The Borrower's obligation
to pay the principal of, and interest on, the Loans made to it by each Lender
shall be evidenced (i) in the case of a Loan, by a promissory note of the
Borrower substantially in the form of Exhibit A-1 with blanks appropriately
completed in conformity herewith (each a "REVOLVING NOTE" and, collectively, the
"REVOLVING NOTES"), and (ii) in the case of a Competitive Bid Loan, by a
promissory note of the Borrower substantially in the form of Exhibit A-2 with
blanks appropriately completed in conformity herewith (a "COMPETITIVE BID NOTE"
and collectively, the "COMPETITIVE BID NOTES"). The form of Competitive Bid Note
issued to a Lender hereunder may be in a "grid" form with no specific dollar
amount mentioned in words or figures and covering all Competitive Bid Loans made
by such Lender, or if any Lender so requests, the Borrower will issue one or
more Competitive Bid Notes in specified denominations, as evidence of particular
Competitive Bid Loans, in which case the form of Competitive Bid Note attached
hereto as Exhibit A-2 shall be appropriately completed to reflect such
information.
(b) TERMS OF REVOLVING NOTES. The Revolving Note issued by the Borrower
to a Lender with a Commitment shall: (i) be executed by the Borrower; (ii) be
payable to the order of such Lender and be dated on or prior to the Closing Date
(or if later, the date the of the first Loan which is outstanding thereunder);
(iii) be payable in the principal amount of Loans evidenced thereby; (iv) mature
on the Maturity Date; (v) bear interest as provided in section 2.7 in respect of
the Prime Rate Loans or LIBOR Loans, as the case may be, evidenced thereby; (vi)
be subject to mandatory prepayment as provided in section 5.2; and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
33
(c) TERMS OF COMPETITIVE BID NOTES. The Competitive Bid Note issued to
a Lender which has made a Competitive Bid Loan shall: (i) be executed by the
Borrower; (ii) be payable to the order of such Lender and be dated on or prior
to the date the first Competitive Bid Loan is made by such Lender; (iii) be
payable in the principal amount of the Competitive Bid Loans evidenced thereby;
(iv) mature as to any Competitive Bid Loan evidenced thereby on the maturity
date selected therefor in the applicable Notice of Competitive Bid Borrowing;
(v) bear interest as to any such Competitive Bid Loan at the rate and payable on
the dates provided therefor as contemplated by sections 2.3(e) and 2.7; (vi) be
subject in the case of any Competitive Bid Loan evidenced thereby to optional or
mandatory prepayment only as contemplated by section 2.3(d); and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(d) LOAN ACCOUNTS OF LENDERS. Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness of
the Borrower to such Lender resulting from each Loan made by such Lender,
including the amounts of principal and interest payable and paid to such Lender
from time to time hereunder.
(e) LOAN ACCOUNTS OF ADMINISTRATIVE AGENT. The Administrative Agent
shall maintain accounts in which it shall record (i) the amount of each Loan
made hereunder, the Type thereof, and the Interest Period and applicable
interest rate if such Loan is a LIBOR Loan, (ii) the amount of any principal due
and payable or to become due and payable from the Borrower to each Lender
hereunder, and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender's share thereof.
(f) EFFECT OF LOAN ACCOUNTS, ETC. The entries made in the accounts
maintained pursuant to section 2.4(d) and (e) shall be PRIMA FACIE evidence of
the existence and amounts of the obligations recorded therein; PROVIDED that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay or prepay the Loans in accordance with the terms of this Agreement.
(g) ENDORSEMENTS OF AMOUNTS ON NOTES PRIOR TO TRANSFER. Each Lender
will, prior to any transfer of any of the Notes issued to it by the Borrower,
endorse on the reverse side thereof or the grid attached thereto the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or any error in any such notation shall not affect the Borrower's obligations in
respect of such Loans.
2.5 CONVERSIONS OF LOANS. The Borrower shall have the option to Convert
on any Business Day all or a portion at least equal to the applicable Minimum
Borrowing Amount of the outstanding principal amount of its Loans of one Type
into a Borrowing or Borrowings of another Type of Loans; PROVIDED that: (i) no
partial Conversion of a Borrowing of LIBOR Loans shall reduce the outstanding
principal amount of the LIBOR Loans made pursuant to such Borrowing to less than
the Minimum Borrowing Amount applicable thereto; (ii) any Conversion of LIBOR
Loans into Prime Rate Loans shall be made on, and only on, the last day of an
Interest
34
Period for such LIBOR Loans; (iii) Prime Rate Loans may only be Converted into
LIBOR Loans if no Default under section 10.1(a) or Event of Default is in
existence on the date of the Conversion unless the Required Lenders otherwise
agree; and (iv) Borrowings of LIBOR Loans resulting from this section 2.5 shall
conform to the requirements of section 2.2(c). Each such Conversion shall be
effected by the Borrower giving the Administrative Agent at its Notice Office,
prior to 11:00 A.M. (local time at such Notice Office), at least three Business
Days' in the case of a conversion into LIBOR Loans (or prior to 11:00 A.M.
(local time at such Notice Office) on the same Business Day, in the case of a
Conversion into Prime Rate Loans) prior written notice (or telephonic notice
promptly confirmed in writing if so requested by the Administrative Agent) (each
a "NOTICE OF CONVERSION"), substantially in the form of Exhibit B-3, specifying
the Loans to be so Converted, the Type of Loans to be Converted into and, if to
be Converted into a Borrowing of LIBOR Loans, the Interest Period to be
initially applicable thereto. The Administrative Agent shall give each Lender
prompt notice of any such proposed Conversion affecting any of its Loans. For
the avoidance of doubt, the prepayment or repayment of any Loans out of the
proceeds of other Loans by the Borrower is not considered a Conversion of Loans
into other Loans.
2.6 INTENTIONALLY OMITTED.
2.7 INTEREST. (a) INTEREST RATE FOR PRIME RATE LOANS. During such
periods as a Loan is a Prime Rate Loan, the unpaid principal amount thereof
shall bear interest at a fluctuating rate per annum which shall at all times be
equal to the Applicable Prime Rate Margin (defined below) for such Prime Rate
Loan PLUS the Prime Rate in effect from time to time.
(b) INTEREST RATE FOR LIBOR LOANS. During such periods as a Loan is a
LIBOR Loan, the unpaid principal amount thereof shall bear interest at a rate
per annum which shall at all times during any Interest Period applicable thereto
be the Applicable LIBOR Margin (as defined below) for such LIBOR Loan PLUS the
relevant Adjusted LIBO Rate for such Interest Period.
(c) INTEREST RATE FOR COMPETITIVE BID LOANS. The Borrower shall pay
interest on each Competitive Bid Loan in accordance with the provisions of
section 2.3(e).
(d) DEFAULT INTEREST. Notwithstanding the above provisions, if a
Default under section 10.1(a) or Event of Default is in existence, all
outstanding amounts of principal and, to the extent permitted by law, all
overdue interest, in respect of each Loan shall bear interest, payable on
demand, at a fluctuating rate per annum equal to 2% per annum above the interest
rate which would be applicable under section 2.7(a) to Prime Rate Loans in
effect from time to time. If any amount (other than the principal of and
interest on the Loans) payable by the Borrower under the Credit Documents is not
paid when due, such amount shall bear interest, payable on demand, at a
fluctuating rate per annum equal to 2% per annum above the interest rate which
would be applicable under section 2.7(a) to Prime Rate Loans in effect from time
to time.
35
(e) ACCRUAL AND PAYMENT OF INTEREST. Interest shall accrue from and
including the date of any Borrowing to but excluding the date of any prepayment
or repayment thereof and shall be payable:
(i) in the case of any Loan, (A) which is a Prime Rate Loan,
monthly in arrears on the first Business Day of the succeeding calendar
month, (B) which is a LIBOR Loan, on the last day of each Interest
Period applicable thereto and, in the case of an Interest Period in
excess of three months, on the dates which are successively three
months after the commencement of such Interest Period, and (C) on any
repayment, prepayment or Conversion (on the amount repaid, prepaid or
Converted), at maturity (whether by acceleration or otherwise) and,
after such maturity, on demand; and
(ii) in the case of any Competitive Bid Loan, (A) on the
interest payment date or dates contemplated by section 2.3(e), at the
maturity date thereof, which shall in any event be no more than six
months, (B) on any prepayment (on the amount prepaid), and (C) after
maturity (whether by acceleration or otherwise), on demand.
(f) COMPUTATIONS OF INTEREST. All computations of interest hereunder
shall be made in accordance with section 12.7(b).
(g) INTEREST MARGINS. As used herein, the terms "APPLICABLE LIBOR
MARGIN", as applied to any LIBOR Loan, and "APPLICABLE PRIME RATE MARGIN" as
applied to any Prime Rate Loan, mean for any date the particular rate per annum
determined by the Administrative Agent in accordance with the pricing grid table
(the "PRICING GRID") which appears below under the heading "Applicable LIBOR
Margin" or "Applicable Prime Rate Margin", as applicable, based upon the Index
Debt Rating, applicable on such date, and the following provisions:
(i) initially, until changed hereunder in accordance with the
following provisions, the Applicable LIBOR Margin will be 125.0 basis
points per annum and the Applicable Prime Rate Margin will be 25.0
basis points per annum; PROVIDED that, during the six month period
following the Closing Date, the Applicable LIBOR Margin and the
Applicable Prime Rate Margin shall be subject to increases and not to
decreases based on a decline in the Index Debt Rating, in accordance
with the Pricing Grid.
(ii) notwithstanding the above provisions, during any period
when a Default under section 10.1(a) or an Event of Default has
occurred and is continuing, the Applicable LIBOR Margin and the
Applicable Prime Rate Margin shall be the highest rate per annum
indicated therefor in the Pricing Grid, regardless of the then Index
Debt Rating.
(iii) for purposes of determination of the Applicable LIBOR
Margin and the Applicable Prime Rate Margin, (1) if either Moody's or
S&P shall not have in effect an Index Debt Rating (other than by reason
of the circumstances referred to in the last sentence of this
paragraph), then such Rating Agency shall be deemed to have established
36
a rating in Category 5; (2) if the Index Debt Rating shall fall within
different Categories, the Applicable Rate shall be based on the lower
of the two ratings; and (3) if the Index Debt Rating shall be changed
(other than as a result of a change in the rating system of Moody's or
S&P), such change shall be effective as of the date on which it is
first announced by the applicable Rating Agency. Each change in the
Applicable LIBOR Margin and the Applicable Prime Rate Margin shall
apply during the period commencing on the effective date of such change
and ending on the date immediately preceding the effective date of the
next such change. If the rating system of Moody's or S&P shall change,
or if either such Rating Agency shall cease to be in the business of
rating corporate debt obligations, the Borrower and the Lenders shall
negotiate in good faith to amend this definition to reflect such
changed rating system or the unavailability of ratings from such Rating
Agency and, pending the effectiveness of any such amendment, the
Applicable LIBOR Margin Rate and the Applicable Prime Rate Margin Rate
shall be determined by reference to the rating most recently in effect
prior to such change or cessation.
(iv) any changes in the Applicable LIBOR Margin and the
Applicable Prime Rate Margin shall be determined by the Administrative
Agent in accordance with the above provisions and the Administrative
Agent will promptly provide notice of such determinations to the
Borrower and the Lenders. Any such determination by the Administrative
Agent pursuant to this section 2.7(g) shall be conclusive and binding
absent manifest error.
(v) any time during which the Leverage Ratio is greater
than or equal to 3.5 to 1.00, the Applicable LIBOR Margin and the
Applicable Prime Rate Margin shall be increased by 25.0 basis points,
and at any time during which the Leverage Ratio is greater than or
equal to 4.0 to 1.00, the Applicable LIBOR Margin and the Applicable
Prime Rate Margin shall be increased by an additional 12.5 basis
points.
PRICING GRID
(EXPRESSED IN BASIS POINTS)
INDEX DEBT APPLICABLE APPLICABLE FACILITY
RATINGS LIBOR MARGIN PRIME RATE MARGIN FEE RATE
CATEGORY 1 87.5 00.0 12.5
BBB+ or better by S&P
Baa1 or better by Moody's
CATEGORY 2 107.5 7.5 17.5
BBB by S&P
Baa2 by Moody's
CATEGORY 3 125.0 25.0 25.0
BBB- by S&P
Baa3 by Moody's
CATEGORY 4 170.0 70.0 30.0
37
INDEX DEBT APPLICABLE APPLICABLE FACILITY
RATINGS LIBOR MARGIN PRIME RATE MARGIN FEE RATE
BB+ by S&P
Ba1 by Moody's
CATEGORY 5 212.5 112.5 37.5
BB or less by S&P
Ba2 or less by Moody's
(h) INFORMATION AS TO INTEREST RATES. The Administrative Agent upon
determining the interest rate for any Borrowing shall promptly notify the
Borrower and the affected Lenders thereof. If the Administrative Agent is unable
to determine the Adjusted LIBO Rate for any Borrowing of LIBOR Loans based on
the quotation service referred to in clause (i) of the definition of the term
Adjusted LIBO Rate, it will promptly so notify the Reference Banks and each
Reference Bank will furnish the Administrative Agent timely information for the
purpose of determining the Adjusted LIBO Rate for such Borrowing. If any one or
more of the Reference Banks shall not timely furnish such information, the
Administrative Agent shall determine the Adjusted LIBO Rate for such Borrowing
on the basis of timely information furnished by the remaining Reference Banks.
2.8 SELECTION AND CONTINUATION OF INTEREST PERIODS. (a) The Borrower
shall have the right
(x) at the time it gives a Notice of Borrowing or Notice of
Conversion in respect of the making of or Conversion into a Borrowing
of Loans consisting of LIBOR Loans, to select in such Notice the
Interest Period to be applicable to such Borrowing, and
(y) prior to 12:00 noon (local time at the Notice Office) on
the third Business Day prior to the expiration of an Interest Period
applicable to a Borrowing of Loans consisting of LIBOR Loans, to elect
by giving the Administrative Agent written or telephonic notice (in the
case of telephonic notice, promptly confirmed in writing if so
requested by the Administrative Agent) to Continue all or the Minimum
Borrowing Amount of the principal amount of such Loans as one or more
Borrowings of LIBOR Loans and to select the Interest Period to be
applicable to any such Borrowing (any such notice, a "NOTICE OF
CONTINUATION"),
which Interest Period shall, at the option of the Borrower, be a one, two, three
or six month period; PROVIDED that notwithstanding anything to the contrary
contained above, the Borrower's right to select an Interest Period or to effect
any Continuation shall be subject to the applicable provisions of section 2.10
and to the following:
(i) the initial Interest Period for any Borrowing of LIBOR
Loans shall commence on the date of such Borrowing (the date of a
Borrowing resulting from a Conversion or Continuation shall be the date
of such Conversion or Continuation) and
38
each Interest Period occurring thereafter in respect of such Borrowing
shall commence on the day on which the next preceding Interest Period
expires;
(ii) if any Interest Period begins on a day for which there is
no numerically corresponding day in the calendar month at the end of
such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iii) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; PROVIDED that if any Interest Period
would otherwise expire on a day which is not a Business Day but is a
day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding Business
Day;
(iv) no Interest Period for any LIBOR Loan may be selected
which would end after the Maturity Date;
(v) each Borrowing of LIBOR Loans resulting from any
Continuation shall be in at least the Minimum Borrowing Amount
applicable thereto; and
(vi) no Interest Period may be elected at any time when a
Default under section 10.1(a) or an Event of Default is then in
existence unless the Required Lenders otherwise agree.
(b) If upon the expiration of any Interest Period the Borrower has
failed to (or may not) elect a new Interest Period to be applicable to the
respective Borrowing of LIBOR Loans as provided above, the Borrower shall be
deemed to have elected to Convert such Borrowing to Prime Rate Loans effective
as of the expiration date of such current Interest Period.
2.9 INCREASED COSTS, ILLEGALITY, ETC. (a) In the event that (x) in the
case of clause (i) below, the Administrative Agent or (y) in the case of clauses
(ii) and (iii) below, any Lender, shall have determined on a reasonable basis
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto):
(i) on any date for determining the Adjusted LIBO Rate for any
Interest Period that, by reason of any changes arising after the
Effective Date affecting the interbank Eurodollar market, adequate and
fair means do not exist for ascertaining the applicable interest rate
on the basis provided for in the definition of Adjusted LIBO Rate; or
(ii) at any time, that such Lender shall incur increased costs
or reductions in the amounts received or receivable hereunder in an
amount which such Lender deems material with respect to any LIBOR Loans
(other than any increased cost or reduction in the amount received or
receivable resulting from the imposition of or a change in the rate of
taxes or similar charges) because of (x) any change since the Effective
Date in any
39
applicable law, governmental rule, regulation, guideline, order or
request (whether or not having the force of law), or in the
interpretation or administration thereof and including the introduction
of any new law or governmental rule, regulation, guideline, order or
request (such as, for example, but not limited to, a change in official
reserve requirements, but, in all events, excluding reserves includable
in the Adjusted LIBO Rate pursuant to the definition thereof) and/or
(y) other circumstances adversely affecting the interbank Eurodollar
market or the position of such Lender in such market; or
(iii) at any time, that the making or continuance of any LIBOR
Loan has become unlawful by compliance by such Lender in good faith
with any change since the Effective Date in any law, governmental rule,
regulation, guideline or order, or the interpretation or application
thereof, or would conflict with any thereof not having the force of law
but with which such Lender customarily complies or has become
impracticable as a result of a contingency occurring after the
Effective Date which materially adversely affects the interbank
Eurodollar market;
THEN, and in any such event, such Lender (or the Administrative Agent in the
case of clause (i) above) shall (x) on or promptly following such date or time
and (y) within 10 Business Days of the date on which such event no longer exists
give notice (by telephone confirmed in writing) to the Borrower and to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Lenders). Thereafter (x) in
the case of clause (i) above, LIBOR Loans shall no longer be available until
such time as the Administrative Agent notifies the Borrower and the Lenders that
the circumstances giving rise to such notice by the Administrative Agent no
longer exist, and any Notice of Borrowing or Notice of Conversion given by the
Borrower with respect to LIBOR Loans which have not yet been incurred or
Converted shall be deemed rescinded by the Borrower or, in the case of a Notice
of Borrowing, shall, at the option of the Borrower, be deemed converted into a
Notice of Borrowing for Prime Rate Loans to be made on the date of Borrowing
contained in such Notice of Borrowing, (y) in the case of clause (ii) above, the
Borrower shall pay to such Lender, upon written demand therefor, such additional
amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Lender shall determine) as shall be
required to compensate such Lender, for such increased costs or reductions in
amounts receivable hereunder (a written notice as to the additional amounts owed
to such Lender, showing the basis for the calculation thereof, which basis must
be reasonable, submitted to the Borrower by such Lender shall, absent manifest
error, be final and conclusive and binding upon all parties hereto) and (z) in
the case of clause (iii) above, the Borrower shall take one of the actions
specified in section 2.9(b) as promptly as possible and, in any event, within
the time period required by law.
(b) At any time that any LIBOR Loan is affected by the circumstances
described in section 2.9(a)(ii) or (iii), the Borrower may (and in the case of a
LIBOR Loan affected pursuant to section 2.9(a)(iii) the Borrower shall) either
if the affected LIBOR Loan is then being made pursuant to a Borrowing, by giving
the Administrative Agent telephonic notice (confirmed
40
promptly in writing) thereof on the same date that the Borrower was notified by
a Lender pursuant to section 2.9(a)(ii) or (iii), cancel said Borrowing, convert
the related Notice of Borrowing into one requesting a Borrowing of Prime Rate
Loans or require the affected Lender to make its requested Loan as a Prime Rate
Loan, or if the affected LIBOR Loan is then outstanding, upon at least one
Business Day's notice to the Administrative Agent, require the affected Lender
to Convert each such LIBOR Loan into a Prime Rate Loan; PROVIDED that if more
than one Lender is affected at any time, then all affected Lenders must be
treated the same pursuant to this section 2.9(b).
(c) If any Lender shall have determined that after the Effective Date,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged by law with the interpretation or administration thereof, or
compliance by such Lender or its parent corporation with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank, or comparable agency, in each case made
subsequent to the Effective Date, has or would have the effect of reducing by an
amount reasonably deemed by such Lender to be material the rate of return on
such Lender's or its parent corporation's capital or assets as a consequence of
such Lender's commitments or obligations hereunder to a level below that which
such Lender or its parent corporation could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Lender's or
its parent corporation's policies with respect to capital adequacy), then from
time to time, within 15 days after demand by such Lender (with a copy to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender or its parent corporation for
such reduction. Each Lender, upon determining in good faith that any additional
amounts will be payable pursuant to this section 2.9(c), will give prompt
written notice thereof to the Borrower, which notice shall set forth, in
reasonable detail, the basis of the calculation of such additional amounts,
which basis must be reasonable, although the failure to give any such notice
shall not release or diminish any of the Borrower's obligations to pay
additional amounts pursuant to this section 2.9(c) upon the subsequent receipt
of such notice.
(d) Notwithstanding anything in this Agreement to the contrary, no
Lender shall be entitled to compensation or payment or reimbursement of other
amounts under section 2.9 or 3.5 for any amounts incurred or accruing more than
180 days prior to the giving of notice to the Borrower of additional costs or
other amounts of the nature described in such sections; PROVIDED that if a
change in applicable law, rule, regulation, guideline or order, or in the
interpretation or application thereof, becomes effective during such 180 day
period but is retroactive to an earlier date, such 180 day period shall be
extended to include the period of retroactive effect thereof, and no Lender
shall demand compensation for any reduction referred to in section 2.9(c) or
payment or reimbursement of other amounts under section 3.5 if it shall not at
the time be the general policy or practice of such Lender to demand such
compensation, payment or reimbursement in similar circumstances under comparable
provisions of other credit agreements.
41
2.10 COMPENSATION. The Borrower shall compensate each applicable
Lender, upon its written request (which request shall set forth the detailed
basis for requesting and the method of calculating such compensation), for all
reasonable losses, expenses and liabilities (including, without limitation, any
loss, expense or liability incurred by reason of the liquidation or reemployment
of deposits or other funds required by such Lender to fund its LIBOR Loans)
which such Lender may sustain: if for any reason (other than a default by such
Lender or the Administrative Agent) a Borrowing of LIBOR Loans does not occur on
a date specified therefor in a Notice of Borrowing, Notice of Conversion or
Notice of Continuation (whether or not rescinded or withdrawn by or on behalf of
such Borrower or deemed rescinded or withdrawn pursuant to section 2.9(a)); if
any repayment, prepayment, Conversion or Continuation of any of its LIBOR Loans
occurs on a date which is not the last day of an Interest Period applicable
thereto; if any prepayment of any LIBOR Loans is not made on any date specified
in a notice of prepayment given by or on behalf of the Borrower; if the
Borrower, pursuant to section 2.11(b) hereof, requires any Lender (other than a
Defaulting Lender) to transfer its LIBOR Loans on any date other than the last
day of the Interest Period or maturity date thereof; or as a consequence of (x)
any other default by the Borrower to repay its LIBOR Loans when required by the
terms of this Agreement or (y) an election made pursuant to section 2.9(b). Such
loss, cost, expense and liability to any Lender shall be deemed to include an
amount determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the interest rate that would have been applicable to such
Loan, for the period from the date of such event to the last day of the then
current Interest Period therefor (or, in the case of a failure to effect a
Borrowing, Conversion or Continuation, for the period that would have been the
Interest Period for such Loan), over (ii) the amount of interest which would
accrue on such principal amount for such period at the interest rate which such
Lender would bid were it to bid, at the commencement of such period, for Dollar
deposits of a comparable amount and period from other banks in the London
interbank market. A certificate of any Lender setting forth any amount or
amounts that such Lender is entitled to receive pursuant to this section shall
be delivered to the Borrower and shall be conclusive absent convincing evidence
of error. The Borrower shall pay such Lender the amount shown as due on any such
request within 30 days after receipt by the Borrower thereof.
2.11 CHANGE OF LENDING OFFICE; REPLACEMENT OF LENDERS. (a) Each Lender
agrees that, upon the occurrence of any event giving rise to the operation of
section 2.9(a)(ii) or (iii) or 2.9(c) with respect to such Lender, it will, if
requested by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another Applicable Lending Office
for any Loans or Commitment affected by such event; PROVIDED that such
designation is made on such terms that such Lender and its Applicable Lending
Office suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of any such
section.
(b) If any Lender requests any compensation, reimbursement or other
payment under section 2.9(a)(ii) or (iii) or 2.9(c) with respect to such Lender,
or if any Lender is a Defaulting Lender, then the Borrower may, at its sole
expense and effort, upon notice to such Lender and
42
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with the restrictions contained in section 12.4(b)), all
its interests, rights and obligations under this Agreement to an assignee that
shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); PROVIDED that the Borrower shall have received the
prior written consent of the Administrative Agent, which consent shall not be
unreasonably withheld or delayed, such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts), and in the case of any
such assignment resulting from a claim for compensation, reimbursement or other
payments required to be made under section 2.9(a)(ii) or (iii) or 2.9(c) with
respect to such Lender, such assignment will result in a reduction in such
compensation, reimbursement or payments. A Lender shall not be required to make
any such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.
(c) Nothing in this section 2.11 shall affect or postpone any of the
obligations of the Borrower or the right of any Lender provided in section 2.9.
SECTION 3. INTENTIONALLY OMITTED.
SECTION 4. FEES; COMMITMENTS.
4.1 FEES. (a) FACILITY FEES. (i) The Borrower agrees to pay to the
Administrative Agent a Facility Fee ("FACILITY FEE") for the account of each
Non-Defaulting Lender which has a Commitment, for the period from and including
the Effective Date to but not including the date the Total Commitment has been
terminated and no Loans are outstanding. In the case of any such Lender, the
portion of the Facility Fee to which it shall be entitled shall be computed for
each day at a rate per annum equal to the Applicable Facility Fee Rate for such
day, on the amount of its Facility Percentage of the Total Commitment on such
day, whether used or unused. Accrued Facility Fees shall be payable in arrears
on the first Business Day of each April, July, October and January and on the
date when the Total Commitment has been terminated and no Loans are outstanding.
(ii) As used herein the term "APPLICABLE FACILITY FEE RATE"
shall mean the particular rate per annum determined by the
Administrative Agent in accordance with the Pricing Grid which appears
in section 2.7(g), based upon the Index Debt Rating, applicable on any
date, and the following provisions:
(A) Initially, until changed hereunder in accordance
with the following provisions, the Applicable Facility Fee
Rate will be 25.0 basis points per annum; provided that any
time during which the Leverage Ratio is greater than or equal
to
43
4.0 to 1.0, the Applicable Facility Fee Rate will be increased
by 12.5 basis points per annum.
(B) Effective on the effective date of any change in
the Applicable LIBOR Margin and the Applicable Prime Rate
Margin pursuant to section 2.7(g)(ii), the Applicable Facility
Fee Rate shall change on the same date to the Applicable
Facility Fee Rate which corresponds to the changed Applicable
LIBOR Margin and the Applicable Prime Rate Margin, as
indicated in the Pricing Grid which appears in section 2.7(g)
hereof.
(C) Notwithstanding the above provisions, during any
period when a Default under section 10.1(a) or an Event of
Default has occurred and is continuing, the Applicable
Facility Fee Rate shall be the highest rate per annum
indicated therefor in the Pricing Grid, regardless of the then
Index Debt Rating.
(D) Any changes in the Applicable Facility Fee Rate
shall be determined by the Administrative Agent in accordance
with the above provisions and the Administrative Agent will
promptly provide notice of such determinations to the Borrower
and the Lenders. Any such determination by the Administrative
Agent pursuant to this section 4.1(a)(ii) shall be conclusive
and binding absent manifest error.
(b) OTHER FEES. The Borrower shall pay to the Agents and/or
the Joint Lead Arrangers, on the Closing Date and thereafter, for its
or their own account and/or for distribution to the Lenders, such fees
as heretofore agreed in writing by the Borrower, the Joint Lead
Arrangers and the Agents.
(c) COMPUTATIONS OF FEES. All computations of Fees shall be
made in accordance with section 12.7(b).
4.2 VOLUNTARY TERMINATION/REDUCTION OF COMMITMENTS. Upon at least three
Business Days' prior written notice (or telephonic notice confirmed in writing)
to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Lenders), the
Borrower shall have the right to:
(a) TERMINATION OF TOTAL COMMITMENT: terminate the Total
Commitment; PROVIDED that all outstanding Loans are contemporaneously
prepaid in accordance with section 5.1 and all outstanding Competitive
Bid Loans are contemporaneously prepaid in accordance with section
2.3(d);
(b) PARTIAL REDUCTIONS OF UNUTILIZED TOTAL COMMITMENT:
partially and permanently reduce the Unutilized Total Commitment;
PROVIDED that (i) any such reduction shall apply to proportionately and
permanently reduce the Commitment of each of the Lenders; and (ii) any
partial reduction of the Unutilized Total Commitment
44
pursuant to this section 4.2(b) shall be in the amount of at least
$5,000,000 (or, if greater, in integral multiples of $1,000,000).
4.3 MANDATORY ADJUSTMENTS OF COMMITMENTS, ETC. (a) The Total Commitment
(and the Commitment of each Lender) shall terminate on September 30, 2001,
UNLESS the Closing Date has occurred on or prior to such date.
(b) The Total Commitment shall terminate (and the Commitment of each
Lender shall terminate) on the earlier of (x) the Maturity Date and (y) the date
on which a Change of Control occurs.
(c) To the extent that, pursuant to section 5.2(c) or section 5.2(d),
any Loans are or would be required to be mandatorily prepaid with (or as a
result of the receipt of) Net Debt Proceeds, Net Equity Proceeds or Net
Disposition Proceeds, the Commitment Amount shall be permanently reduced, on a
dollar-for-dollar basis, by an amount equal to the amount of such prepayment;
provided, that any term or provision hereof to the contrary notwithstanding,
such reduction to the Commitment Amount shall be made whether or not any
prepayment of the Loans is actually made pursuant to section 5.2(c) or section
5.2(d), as the case may be.
4.4 EXTENSION OF MATURITY DATE. Upon 30 days prior written notice to
the Administrative Agent, the Borrower may, in its sole discretion, so long as
no Default or Event of Default has occurred or is continuing on the Maturity
Date, extend the Maturity Date for one year, in which case the Loans outstanding
on the Maturity Date shall be converted into term Loans maturing on such
extended Maturity Date and upon which time the Commitment shall be terminated.
If the Borrower so decides, the Administrative Agent will so advise the Lenders,
and the Borrower, the Administrative Agent and all of the Lenders shall execute
and deliver a definitive written instrument so extending the Maturity Date and
setting forth the terms and conditions satisfactory to the Borrower, the
Administrative Agent and the Lenders. No such extension of the Maturity Date
shall be valid or effective for any purpose unless such definitive written
instrument is so signed and delivered within 30 days following the giving by the
Administrative Agent of notice to the Lenders that the Borrower has decided on
such an extension.
SECTION 5. PAYMENTS.
5.1 VOLUNTARY PREPAYMENTS OF LOANS. The Borrower may not voluntarily
prepay any Competitive Bid Loan, in whole or in part, unless such prepayment is
permitted and made as contemplated by section 2.3(d). The Borrower shall have
the right to prepay any of its Loans, in whole or in part, without premium or
penalty, from time to time on the following terms and conditions:
(a) NOTICES: the Borrower shall give the Administrative Agent
at the Notice Office written or telephonic notice (in the case of
telephonic notice, promptly confirmed
45
in writing if so requested by the Administrative Agent) of its intent
to prepay the Loans, the amount of such prepayment and (in the case of
LIBOR Loans) the specific Borrowing(s) pursuant to which made, which
notice shall be received by the Administrative Agent by
(i) 12:00 noon (local time at the Notice Office)
three Business Days prior to the date of such prepayment, in
the case of any prepayment of LIBOR Loans, or
(ii) 12:00 noon (local time at the Notice Office) on
the date of such prepayment, in the case of any prepayment of
Prime Rate Loans,
and which notice shall promptly be transmitted by the Administrative
Agent to each of the affected Lenders;
(b) PARTIAL PREPAYMENTS UNDER THE FACILITY: in the case any
partial prepayment of any Borrowing under the Facility, such partial
prepayment shall be in an aggregate principal of at least $1,000,000 or
an integral multiple of $100,000 in excess thereof, in the case of any
Borrowing comprised of Prime Rate Loans and at least $5,000,000 or an
integral multiple of $1,000,000 in excess thereof, in the case of any
Borrowing comprised of LIBOR Loans;
(c) MINIMUM BORROWING AMOUNT REMAINING AFTER PARTIAL
PREPAYMENTS: no partial prepayment of any Loans made pursuant to a
Borrowing shall reduce the aggregate principal amount of such Loans
outstanding pursuant to such Borrowing to an amount less than the
Minimum Borrowing Amount applicable thereto;
(d) PREPAYMENTS TO BE APPLIED PRO RATA: each prepayment in
respect of any Loans made pursuant to a Borrowing shall be applied PRO
RATA among such Loans; and
(e) BREAKAGE COMPENSATION: each prepayment of LIBOR Loans
pursuant to this section 5.1 on any date other than the last day of the
Interest Period applicable thereto, in the case of a LIBOR Loan shall
be accompanied by any amounts payable in respect thereof under section
2.10.
5.2 MANDATORY PREPAYMENTS. The Loans shall be subject to mandatory
prepayment in accordance with the following provisions:
(a) IF OUTSTANDING LOANS EXCEED COMMITMENT AMOUNT. If on any
date (after giving effect to any other payments on such date) the
aggregate outstanding principal amount of Loans, EXCEEDS the Commitment
Amount as then in effect, THEN the Borrower shall prepay on such date
that principal amount of Loans, in an aggregate amount at least equal
to such excess and conforming in the case of partial prepayments of
46
any Loans to the applicable requirements as to the amounts of partial
prepayments which are contained in section 5.1.
(b) MANDATORY PREPAYMENT -- CHANGE OF CONTROL. On the date a
Change of Control occurs, notwithstanding anything to the contrary
contained in this Agreement, no further Borrowings shall be made and
the then outstanding principal amount of all Loans, if any, and other
Obligations, shall become due and payable and shall be prepaid in full,
together with accrued interest and Fees.
(c) MANDATORY PREPAYMENT -- NET DEBT PROCEEDS AND NET EQUITY
PROCEEDS. No later than one Business Day following the receipt of any
Net Debt Proceeds or Net Equity Proceeds by the Borrower or any
Subsidiary, the Borrower shall deliver to the Administrative Agent a
calculation of the amount of such Net Debt Proceeds or Net Equity
Proceeds and, to the extent the amount of such Net Debt Proceeds or Net
Equity Proceeds, with respect to any single transaction or series of
related transactions, exceeds $2,000,000, the Borrower shall make a
mandatory prepayment of the Loans in an amount equal to 100% of such
Net Debt Proceeds or Net Equity Proceeds, as the case may be, to be
applied (i) FIRST, to the prepayment of outstanding Five Year Credit
Facility Term Loans pursuant to the terms of the Five Year Credit
Facility Agreement, until all Five Year Credit Facility Term Loans
shall have been repaid in full, and (ii) SECOND, to the prepayment of
outstanding Loans until all Loans have been repaid in full and the
Commitment Amount has been reduced to zero.
(d) MANDATORY PREPAYMENT -- NET DISPOSITION PROCEEDS. No later
than 30 days following the receipt of any Net Disposition Proceeds by
the Borrower or any Subsidiary, the Borrower shall deliver to the
Administrative Agent a calculation of the amount of such Net
Disposition Proceeds, and, to the extent the amount of such Net
Disposition Proceeds, with respect to any single transaction or series
of related transactions, exceeds $5,000,000, the Borrower shall make a
mandatory prepayment of the Loans in an amount equal to100% of such Net
Disposition Proceeds to be applied to the prepayment of outstanding
Loans until all Loans have been repaid in full and the Commitment
Amount has been reduced to zero.
(e) PARTICULAR LOANS TO BE PREPAID. With respect to each
repayment or prepayment of Loans required by this section 5.2, the
Borrower shall designate the Types of Loans which are to be repaid or
prepaid and the specific Borrowing(s) pursuant to which such repayment
or prepayment is to be made; PROVIDED that (i) the Borrower shall first
so designate all Loans that are Prime Rate Loans and LIBOR Loans with
Interest Periods ending on the date of repayment or prepayment prior to
designating any other LIBOR Loans for repayment or prepayment, (ii) if
the outstanding principal amount of LIBOR Loans made pursuant to a
Borrowing is reduced below the applicable Minimum Borrowing Amount as a
result of any such repayment or prepayment, then all the Loans
outstanding pursuant to such Borrowing shall be converted into Prime
Rate Loans, and
47
(iii) each repayment and prepayment of any Loans made pursuant to a
Borrowing shall be applied PRO RATA among such Loans. In the absence of
a designation by the Borrower as described in the preceding sentence,
the Administrative Agent shall, subject to the above, make such
designation in its sole discretion with a view, but no obligation, to
minimize breakage costs owing under section 2.10. Any repayment or
prepayment of LIBOR Loans pursuant to this section 5.2 shall in all
events be accompanied by such compensation as is required by section
2.10.
5.3 REPAYMENT OF LOANS. The Borrower shall repay in full the unpaid
principal amount of the Loans made to it on the Maturity Date.
5.4 METHOD AND PLACE OF PAYMENT. (a) Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the
Administrative Agent for the ratable (based on its PRO RATA share) account of
the Lenders entitled thereto, not later than 12:00 noon (local time at the
Payment Office) on the date when due and shall be made at the Payment Office in
immediately available funds and in lawful money of the United States of America,
it being understood that written notice by the Borrower to the Administrative
Agent to make a payment from the funds in the Borrower's account at the Payment
Office shall constitute the making of such payment to the extent of such funds
held in such account. Any payments under this Agreement which are made later
than 12:00 noon (local time at the Payment Office) shall be deemed to have been
made on the next succeeding Business Day. Whenever any payment to be made
hereunder shall be stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable during such
extension at the applicable rate in effect immediately prior to such extension.
(b) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, interest and
Fees then due hereunder and an Event of Default is not then in existence, such
funds shall be applied (i) FIRST, towards payment of interest and Fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and Fees then due to such parties, and (ii) SECOND, towards
payment of principal then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of principal then due to such parties.
5.5 NET PAYMENTS. (a) All payments made by the Borrower hereunder,
under any Note or any other Credit Document, will be made without setoff,
counterclaim or other defense. Except as otherwise provided for in section
5.5(d), all such payments will be made free and clear of, and without deduction
or withholding for, any Taxes. In the event that any Taxes are imposed and
required by law to be deducted or withheld from any payment required to made by
the Borrower under any Note or any other Credit Document, then: (i) subject to
clause (d) below, the amount of such payment shall be increased as may be
necessary such that such payment is made, after withholding or deduction for or
on account of such Taxes, in an amount that is not less than the amount provided
for in such Note or other Credit Document and (ii) the Borrower
48
shall withhold the full amount of such Taxes from such payment (as increased
pursuant to clause (a)(i)) and shall pay such amount to the authority imposed
such Taxes in accordance with applicable law. The Borrower will furnish to the
Administrative Agent within 45 days after the date of any withholding or
deduction on account of United States withholding taxes certified copies of tax
receipts, or other evidence satisfactory to the Lender, evidencing payment
thereof by the Borrower.
(b) Subject to clause (d), the Borrower shall indemnify the
Administrative Agent and each Lender for any Taxes levied, imposed or assessed
on (and whether or not paid directly by) the Administrative Agent or such Lender
(and whether or not such Taxes are correctly or legally asserted by the relevant
taxing authority). Promptly upon having knowledge that any such Taxes have been
levied, imposed or assessed, and promptly upon notice thereof by the
Administrative Agent or any Lender, the Borrower shall pay such Taxes directly
to the relevant taxing authority (PROVIDED that neither the Administrative Agent
nor any Lender shall be under any obligation to provide any such notice to the
Borrower). In addition, the Borrower shall indemnify the Administrative Agent
and each Lender for any incremental Taxes that may become payable by the
Administrative Agent or any Lender as a result of any failure of the Borrower to
pay any Taxes when due to the appropriate taxing authority or to deliver to the
Administrative Agent, pursuant to clause (a), documentation evidencing the
payment of Taxes. With respect to indemnification for Taxes actually paid by the
Administrative Agent or any Lender or the indemnification provided in the
immediately preceding sentence, such indemnification shall be made within 30
days after the date the Administrative Agent or such Lender, as the case may be,
makes written demand therefor. The Borrower acknowledges that any payment made
to the Administrative Agent or any Lender or to any taxing authority in respect
of the indemnification obligations of the Borrower provided in this clause shall
constitute a payment in respect of which the provisions of clause (a) and this
clause shall apply.
(c) Each Lender that is not a United States person (as such term is
defined in section 7701(a)(30) of the Code) for Federal income tax purposes
agrees to provide to the Borrower and the Administrative Agent on or prior to
the Effective Date, or in the cases of a Lender that is an assignee or
transferee of an interest under this Agreement pursuant to section 12.4 (unless
the respective Lender was already a Lender hereunder immediately prior to such
assignment or transfer and such Lender is in compliance with the provisions of
this section 5.5(c)), on the date of such assignment or transfer to such Lender,
(i) two accurate and complete original signed copies of Internal Revenue Service
Form W-8BEN, claiming eligibility of such Lender for benefits of an income tax
treaty to which the United States is a party, or W-8ECI (or successor forms), or
(ii) if the Lender is not a "bank" within the meaning of section 881(c)(3)(A) of
the Code and cannot deliver either Internal Revenue Service Form W-8BEN or
W-8ECI pursuant to clause (i) above, (x) a certificate substantially in the form
of Exhibit F (any such certificate, a "LENDER TAX CERTIFICATE") and (y) two
accurate and complete original signed copies of Internal Revenue Service Form
W-8BEN (or successor form). In addition, each Lender agrees that from time to
time after the Effective Date, when a lapse in time or change in circumstances
renders the previous certification obsolete or inaccurate in any material
respect, it will deliver to the
49
Borrower and the Administrative Agent two new accurate and complete original
signed copies of Internal Revenue Service Form W-8BEN or W-8ECI, or Form W-8BEN
and a Lender Tax Certificate, as the case may be, and such other forms as may be
required in order to confirm or establish the entitlement of such Lender to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement, any Note or any other Credit Document,
or it shall immediately notify the Borrower and the Administrative Agent of its
inability to deliver any such Form or Certificate, in which case such Lender
shall not be required to deliver any such Form or Certificate pursuant to this
section 5.5(c).
(d) The Borrower shall not be obligated to pay any additional amounts
pursuant to clause (a), in respect of United States federal withholding taxes to
the extent imposed as a result of the failure of such Lender to deliver to the
Borrower the Internal Revenue Service forms and/or Lender Tax Certificate, as
applicable to such Lender, required to be provided to the Borrower pursuant to
section 5.5(c); PROVIDED that the Borrower shall be obligated to pay additional
amounts to any such Lender pursuant to clause (a), in respect United States
federal withholding taxes if any such failure to deliver the Internal Revenue
Service forms and/or Lender Tax Certificate, as applicable, resulted from a
change in any applicable statute, treaty, regulation or other applicable law or
any interpretation of any of the foregoing occurring after the date hereof,
which change rendered such Lender no longer legally entitled to deliver such
forms and/or Lender Tax Certificate, as applicable.
SECTION 6. CONDITIONS PRECEDENT.
6.1 CONDITIONS PRECEDENT AT CLOSING DATE. The obligation of the Lenders
to make Loans is subject to the satisfaction of each of the following conditions
on the Closing Date:
(a) EFFECTIVENESS; NOTES. On or prior to the Closing Date, (i)
the Effective Date shall have occurred and (ii) there shall have been
delivered to the Administrative Agent for the account of each Lender
each appropriate Note executed by the Borrower, in each case, in the
amount, maturity and as otherwise provided herein.
(b) FEES, ETC. The Borrower shall have paid or caused to be
paid all fees required to be paid by it on or prior to such date
pursuant to section 4.1 hereof and all reasonable fees and expenses of
the Administrative Agent and of special counsel to the Administrative
Agent which have been invoiced on or prior to such date in connection
with the preparation, execution and delivery of this Agreement and the
other Credit Documents and the consummation of the transactions
contemplated hereby and thereby.
(c) FIVE YEAR CREDIT FACILITY AGREEMENT. The Administrative
Agent shall have received evidence satisfactory to it that all
conditions precedent set forth in Article 6 of the Five Year Credit
Facility Agreement shall have been consummated to the satisfaction of
the Administrative Agent.
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(d) PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings and all documents incidental to the transactions
contemplated hereby shall be satisfactory in substance and form to the
Administrative Agent and the Lenders and the Administrative Agent and
its special counsel and the Lenders shall have received all such
counterpart originals or certified or other copies of such documents as
the Administrative Agent or its special counsel or any Lender may
reasonably request.
6.2 CONDITIONS PRECEDENT TO ALL CREDIT EVENTS (OTHER THAN ANY
COMPETITIVE BID BORROWING). The obligations of the Lenders to make each Loan is
subject, at the time thereof, to the satisfaction of the following conditions:
(a) NOTICE OF BORROWING, ETC. The Administrative Agent shall
have received a Notice of Borrowing meeting the requirements of section
2.2 with respect to the incurrence of Loans.
(b) NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time of
each such Credit Event and also after giving effect thereto, (i) there
shall exist no Default or Event of Default and (ii) all representations
and warranties of the Credit Parties contained herein or in the other
Credit Documents shall be true and correct in all material respects
with the same effect as though such representations and warranties had
been made on and as of the date of such Credit Event, except to the
extent that such representations and warranties expressly relate to an
earlier specified date, in which case such representations and
warranties shall have been true and correct in all material respects as
of the date when made.
The acceptance of the benefits of each such Credit Event shall constitute a
representation and warranty by the Borrower to each of the Lenders that all of
the applicable conditions specified in section 6.1 and/or 6.2, as the case may
be, have been satisfied as of the times referred to in sections 6.1 and 6.2. All
of the certificates, legal opinions and other documents and papers referred to
in this section 6, unless otherwise specified, shall be delivered to the
Administrative Agent for the account of each of the Administrative Agent and the
Lenders and, except for the Notes, in sufficient counterparts for the
Administrative Agent and the Lenders, and the Administrative Agent will promptly
distribute to the Lenders their respective Notes and the copies of such other
certificates, legal opinions and documents.
6.3 CONDITIONS PRECEDENT TO EACH COMPETITIVE BID BORROWING. The
obligation of each Lender which is to make a Competitive Bid Loan on the
occasion of a Competitive Bid Borrowing (including the initial Competitive Bid
Borrowing) to make such Competitive Bid Loan as part of such Competitive Bid
Borrowing is subject to satisfaction of each of the following conditions;
(a) NOTICE OF COMPETITIVE BID BORROWING. The Administrative
Agent shall have received the written confirmatory Notice of
Competitive Bid Borrowing with respect thereto.
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(b) COMPETITIVE BID NOTE. Prior to the time such Competitive
Bid Borrowing is to be made by any applicable Lender, the
Administrative Agent shall have received a Competitive Bid Note payable
to the order of such Lender.
(c) NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time
thereof and also after giving effect thereto, (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
of the Credit Parties contained herein or in the other Credit Documents
shall be true and correct in all material respects with the same effect
as though such representations and warranties had been made on and as
of the date of such Credit Event, except to the extent that such
representations and warranties expressly relate to an earlier specified
date, in which case such representations and warranties shall have been
true and correct in all material respects as of the date when made.
The acceptance of the benefits of each Competitive Bid Loan shall constitute a
representation and warranty by the Borrower to each of the Lenders that all of
the applicable conditions specified in this section 6.3 exist as of that time.
The Administrative Agent will promptly distribute to the Lenders participating
in such Competitive Bid Borrowing their respective Competitive Bid Notes (to the
extent not previously delivered).
SECTION 7. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lenders to enter into this Agreement and to make
the Loans provided for herein, the Borrower makes the following representations
and warranties to, and agreements with, the Lenders, all of which shall survive
the execution and delivery of this Agreement and each Credit Event:
7.1 CORPORATE STATUS, ETC. Each of the Borrower and its Subsidiaries
(i) is a duly organized or formed and validly existing corporation, partnership
or limited liability company, as the case may be, in good standing under the
laws of the jurisdiction of its formation and has the corporate, partnership or
limited liability company power and authority, as applicable, to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage, and (ii) has duly qualified and is authorized to
do business in all jurisdictions where it is required to be so qualified except
where the failure to be so qualified would not have a Material Adverse Effect.
7.2 SUBSIDIARIES. Annex II hereto sets forth, as of the date hereof,
each Subsidiary of the Borrower (and the direct and indirect ownership interest
of the Borrower therein).
7.3 CORPORATE POWER AND AUTHORITY, ETC. Each Credit Party has the
corporate or other organizational power and authority to execute, deliver and
carry out the terms and provisions of the Credit Documents to which it is party
and has taken all necessary corporate or other organizational action to
authorize the execution, delivery and performance of the Credit Documents to
which it is party. Each Credit Party has duly executed and delivered each Credit
52
Document to which it is party and each Credit Document to which it is party
constitutes the legal, valid and binding agreement or obligation of such Credit
Party enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting creditors'
rights and by equitable principles (regardless of whether enforcement is sought
in equity or at law).
7.4 NO VIOLATION. Neither the execution, delivery and performance by
any Credit Party of the Credit Documents to which it is party nor compliance
with the terms and provisions thereof (i) will contravene any provision of any
law, statute, rule, regulation, order, writ, injunction or decree of any court
or governmental instrumentality applicable to such Credit Party or its
properties and assets, (ii) will conflict with, or result in any breach of, any
of the terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of (or the obligation to create
or impose) any Lien upon any of the property or assets of such Credit Party
pursuant to, the terms of any promissory note, bond, debenture, indenture,
mortgage, deed of trust, credit or loan agreement, or any other material
agreement or other instrument, to which such Credit Party is a party or by which
it or any of its property or assets are bound or to which it may be subject, or
(iii) will violate any provision of the certificate or articles of
incorporation, code of regulations or by-laws, or other charter documents of
such Credit Party.
7.5 GOVERNMENTAL APPROVALS. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, is required to authorize or is required as a
condition to (i) the execution, delivery and performance by any Credit Party of
any Credit Document to which it is a party, or (ii) the legality, validity,
binding effect or enforceability of any Credit Document to which any Credit
Party is a party.
7.6 LITIGATION. There are no actions, suits, investigations, or
proceedings pending or, to, the knowledge of the Borrower, threatened with
respect to the Borrower or any of its Subsidiaries (i) that have, or could
reasonably be expected to have, a Material Adverse Effect, or (ii) which
question the validity or enforceability of any of the Credit Documents, the
consummation of the Transaction or of any action to be taken by the Borrower or
any of the other Credit Parties pursuant to any of the Credit Documents.
7.7 USE OF PROCEEDS; MARGIN REGULATIONS. (a) The proceeds of all Loans
and Credit Events shall be used (i) to finance the Acquisition, (ii) for the
Refinancing, (iii) to make the Expense Payments and (iv) for post-closing
working capital and general corporate purposes of the Borrower and its
Subsidiaries following the consummation of the Acquisition.
(b) No part of the proceeds of any Credit Event will be used directly
or indirectly to purchase or carry Margin Stock, or to extend credit to others
for the purpose of purchasing or carrying any Margin Stock, in violation of any
of the provisions of Regulation T, U or X of the
53
Board of Governors of the Federal Reserve System. The Borrower is not engaged in
the business of extending credit for the purpose of purchasing or carrying any
Margin Stock. At no time would more than 25% of the value of the assets of the
Borrower or of the Borrower and its consolidated Subsidiaries that are subject
to any "arrangement" (as such term is used in section 221.2(g) of such
Regulation U) hereunder be represented by Margin Stock.
7.8 FINANCIAL STATEMENTS, ETC. (a) The Borrower has furnished to the
Lenders and the Administrative Agent complete and correct copies of (i) the
audited consolidated balance sheets of the Borrower and its consolidated
subsidiaries as of December 31, 1998, December 31, 1999 and December 31, 2000
and the related audited consolidated statements of income, shareholders' equity,
and cash flows of the Borrower and its consolidated subsidiaries for the fiscal
years then ended (the "BORROWER FINANCIAL STATEMENTS"), accompanied by the
report thereon of KPMG LLP, (ii) to the extent available, the unaudited
consolidated balance sheets and consolidated statements of income of the Ferro
Divisions for the years ended September 30, 1998, September 30, 1999 and
December 31, 2000, and for the three months ended December 31, 1999, (iii) to
the extent available, the audited consolidated balance sheet and related
consolidated statement of income of DMC2 for the fiscal year ended December 31,
2000, (iv) the unaudited consolidated financial statements of the Borrower and
its consolidated subsidiaries, DMC2 and the Ferro Divisions for the six months
ended June 30, 2001, and (v) the pro forma consolidated balance sheets and
statements of income of the Borrower and its consolidated subsidiaries and the
Ferro Divisions for December 31, 2000 and for the six months ended June 30,
2001, in each case giving effect to the Transaction and reflecting the proposed
legal and capital structures of the Borrower and its consolidated subsidiaries.
All Borrower Financial Statements have been prepared in accordance with GAAP,
consistently applied (except as stated therein), fairly present the financial
position of the Borrower and its consolidated subsidiaries as of the respective
dates indicated and the consolidated results of their operations and cash flows
for the respective periods indicated, and have been certified by the chief
financial officer of the Borrower.
(b) The Borrower has received consideration which is the reasonable
equivalent value of the obligations and liabilities that the Borrower has
incurred to the Administrative Agent and the Lenders. The Borrower now has
capital sufficient to carry on its business and transactions and all business
and transactions in which it is about to engage and is now solvent and able to
pay its debts as they mature and the Borrower, as of the Closing Date, owns
property having a value, both at fair valuation and at present fair salable
value, greater than the amount required to pay the Borrower's debts; and the
Borrower is not entering into the Credit Documents with the intent to hinder,
delay or defraud its creditors. For purposes of this section 7.8(b), "DEBT"
means any liability on a claim, and "CLAIM" means (x) right to payment whether
or not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured; or (y) right to an equitable remedy for breach of performance if
such breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured.
54
(c) The Borrower has delivered or caused to be delivered to the Lenders
prior to the execution and delivery of this Agreement (i) a copy of the
Borrower's Report on Form 10-K as filed (without Exhibits) with the SEC for its
fiscal year ended December 31, 2000, which contains a general description of the
business and affairs of the Borrower and its Subsidiaries, (ii) a confidential
information brochure dated July 2001 prepared by the Administrative Agent (with
assistance from the Borrower) which contains information with respect to the
business, properties and operations of the Borrower and its Subsidiaries (the
"CONFIDENTIAL INFORMATION MEMORANDUM").
7.9 NO MATERIAL ADVERSE CHANGE. Since December 31, 2000, there has been
no change in the business, performance, operations, projections, prospects,
liabilities or condition (financial or other) of the Borrower, the Ferro
Divisions or the Borrower and its Subsidiaries taken as a whole, or their
properties and assets considered as an entirety, EXCEPT FOR any changes none of
which, individually or in the aggregate, has had or could reasonably be expected
to have, a Material Adverse Effect.
7.10 TAX RETURNS AND PAYMENTS. Each of the Borrower and each of its
Subsidiaries has filed all federal income tax returns and all other material tax
returns, domestic and foreign, required to be filed by it and has paid all
material taxes and assessments payable by it which have become due, other than
those not yet delinquent and except for those contested in good faith. The
Borrower and each of its Subsidiaries has established on its books such charges,
accruals and reserves in respect of taxes, assessments, fees and other
governmental charges for all fiscal periods as are required by GAAP. The
Borrower knows of no proposed assessment for additional federal, foreign or
state taxes for any period, or of any basis therefor, which, individually or in
the aggregate, taking into account such charges, accruals and reserves in
respect thereof as the Borrower and its Subsidiaries have made, could reasonably
be expected to have a Material Adverse Effect.
7.11 TITLE TO PROPERTIES, ETC. The Borrower and each of its
Subsidiaries has good and marketable title, in the case of real property, and
good title (or valid Leaseholds, in the case of any leased property), in the
case of all other property, to all of its properties and assets free and clear
of Liens other than Permitted Liens. The interests of the Borrower and each of
its Subsidiaries in the properties reflected in the most recent consolidated
balance sheet of the Borrower referred to in section 7.8, taken as a whole, were
sufficient, in the judgment of the Borrower, as of the date of such balance
sheet for purposes of the ownership and operation of the businesses conducted by
the Borrower and such Subsidiaries.
7.12 LAWFUL OPERATIONS, ETC. Except for known situations or incidents
which are reserved for on the most recent consolidated balance sheet of the
Borrower referred to in section 7.8 or which, if not so reserved, could not
reasonably be expected to have a Material Adverse Effect, the Borrower and each
of its Subsidiaries is in full compliance with all material requirements imposed
by law, whether federal or state, including (without limitation) Environmental
Laws and zoning ordinances.
55
7.13 ENVIRONMENTAL MATTERS. (a) The Borrower and each of its
Subsidiaries is in compliance with all Environmental Laws governing its
business, except to the extent that any such failure to comply (together with
any resulting penalties, fines or forfeitures) would not reasonably be expected
to have a Material Adverse Effect. All licenses, permits, registrations or
approvals required for the business of the Borrower and each of its Subsidiaries
under any Environmental Law have been secured and the Borrower and each of its
Subsidiaries is in substantial compliance therewith, except for such licenses,
permits, registrations or approvals the failure to secure or to comply therewith
is not reasonably likely to have a Material Adverse Effect. Neither the Borrower
nor any of its Subsidiaries has received written notice, or otherwise knows,
that it is in any respect in noncompliance with, breach of or default under any
Environmental Laws, and no event has occurred and is continuing which, with the
passage of time or the giving of notice or both, would constitute noncompliance,
breach of or default thereunder, except in each such case, such noncompliance,
breaches or defaults as would not reasonably be expected to, in the aggregate,
have a Material Adverse Effect. There are no Environmental Claims pending or, to
the best knowledge of the Borrower, threatened wherein an unfavorable decision,
ruling or finding would reasonably be expected to have a Material Adverse
Effect.
(b) Hazardous Materials have not at any time been (i) generated, used,
treated or stored on, or transported to or from, any Real Property of the
Borrower or any of its Subsidiaries or (ii) released on any such Real Property,
in each case where such occurrence or event is not in compliance with
Environmental Laws and is reasonably likely to have a Material Adverse Effect.
7.14 COMPLIANCE WITH ERISA. Compliance by the Borrower with the
provisions hereof and Credit Events contemplated hereby will not involve any
prohibited transaction within the meaning of ERISA or section 4975 of the Code.
The Borrower and each of its Subsidiaries, (i) has fulfilled all obligations
under minimum funding standards of ERISA and the Code with respect to each Plan
that is not a Multiemployer Plan or a Multiple Employer Plan, (ii) has satisfied
all respective contribution obligations in respect of each Multiemployer Plan
and each Multiple Employer Plan, (iii) is in compliance in all material respects
with all other applicable provisions of ERISA and the Code with respect to each
Plan, each Multiemployer Plan and each Multiple Employer Plan, and (iv) has not
incurred any liability under the Title IV of ERISA to the PBGC (except for
annual premiums payable to the PBGC) with respect to any Plan, any Multiemployer
Plan, any Multiple Employer Plan, or any trust established thereunder. No Plan
or trust created thereunder has been terminated, and there have been no
Reportable Events, with respect to any Plan or trust created thereunder or with
respect to any Multiemployer Plan or Multiple Employer Plan, which termination
or Reportable Event will or could result in the termination of such Plan,
Multiemployer Plan or Multiple Employer Plan and give rise to a material
liability of the Borrower or any ERISA Affiliate in respect thereof. Except as
set forth on Annex III, neither the Borrower nor any ERISA Affiliate is at the
date hereof, or has been at any time within the two years preceding the date
hereof, an employer required to contribute to any Multiemployer Plan or Multiple
Employer Plan, or a "contributing sponsor" (as such term is defined in section
4001 of ERISA) in any Multiemployer Plan or Multiple Employer Plan.
56
Neither the Borrower nor any ERISA Affiliate has any contingent liability with
respect to any post-retirement "welfare benefit plan" (as such term is defined
in ERISA) except as has been disclosed to the Lenders in writing.
7.15 INTELLECTUAL PROPERTY, ETC. The Borrower and each of its
Subsidiaries has obtained or has the right to use all material patents,
trademarks, service marks, trade names, copyrights, licenses and other rights
with respect to the foregoing necessary for the present and planned future
conduct of its business, without any known conflict with the rights of others,
EXCEPT for such patents, trademarks, service marks, trade names, copyrights,
licenses and rights, the loss of which, and such conflicts, which in any such
case individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect.
7.16 INVESTMENT COMPANY ACT, ETC. Neither the Borrower nor any of its
Subsidiaries is subject to regulation with respect to the creation or incurrence
of Indebtedness under the Investment Company Act of 1940, as amended, the ICC
Termination Act of 1995, as amended, the Federal Power Act, as amended, the
Public Utility Holding Company Act of 1935, as amended, or any applicable state
public utility law.
7.17 BURDENSOME CONTRACTS; LABOR RELATIONS. Neither the Borrower nor
any of its Subsidiaries (i) is subject to any burdensome contract, agreement,
corporate restriction, judgment, decree or order, (ii) is a party to any labor
dispute affecting any bargaining unit or other group of employees generally,
(iii) is subject to any material strike, slow down, workout or other concerted
interruptions of operations by employees of the Borrower or any Subsidiary,
whether or not relating to any labor contracts, (iv) is subject to any
significant pending or, to the knowledge of the Borrower, threatened, unfair
labor practice complaint, before the National Labor Relations Board, and (v) is
subject to any significant pending or, to the knowledge of the Borrower,
threatened, grievance or significant arbitration proceeding arising out of or
under any collective bargaining agreement, (vi) is subject to any significant
pending or, to the knowledge of the Borrower, threatened, significant strike,
labor dispute, slowdown or stoppage, or (vii) is, to the knowledge of the
Borrower, involved or subject to any union representation organizing or
certification matter with respect to the employees of the Borrower or any of its
Subsidiaries, EXCEPT (with respect to any matter specified in any of the above
clauses), for such matters as, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
7.18 EXISTING INDEBTEDNESS. Annex IV sets forth a true and complete
list, as of the date or dates set forth therein, of all Indebtedness of the
Borrower and each of its Subsidiaries, on a consolidated basis, which (i) has an
outstanding principal amount of at least $5,000,000, or may be incurred pursuant
to existing commitments or lines of credit, or (ii) is secured by any Lien on
any property of the Borrower or any Subsidiary, and which will be outstanding on
the Closing Date after giving effect to any Borrowing hereunder which is
expected to be made on the Closing Date, other than the Indebtedness created
under the Credit Documents (all such Indebtedness, whether or not in a principal
amount meeting such threshold and required to be so
57
set forth on Annex IV, herein the "EXISTING INDEBTEDNESS"). The Borrower has
provided to the Administrative Agent prior to the date of execution hereof true
and complete copies (or summary descriptions) of all agreements and instruments
governing the Indebtedness set forth on Annex IV (the "EXISTING INDEBTEDNESS
AGREEMENTS").
7.19 TRUE AND COMPLETE DISCLOSURE. All factual information (taken as a
whole) heretofore or contemporaneously furnished by or on behalf of the Borrower
or any of its Subsidiaries in writing to the Administrative Agent or any Lender
for purposes of or in connection with this Agreement or any transaction
contemplated herein is, and all other such factual information (taken as a
whole) hereafter furnished by or on behalf of such person in writing to any
Lender will be, true and accurate in all material respects on the date as of
which such information is dated or certified and not incomplete by omitting to
state any material fact necessary to make such information (taken as a whole)
not misleading at such time in light of the circumstances under which such
information was provided, except that any such future information which may
consist of financial projections prepared by the Borrower is only represented
herein as being based on good faith estimates and assumptions believed by such
persons to be reasonable at the time made, it being recognized by the Lenders
that such projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections may
differ materially from the projected results.
SECTION 8. AFFIRMATIVE COVENANTS.
The Borrower hereby covenants and agrees that on the Effective Date and
thereafter so long as this Agreement is in effect and until such time as the
Total Commitment has been terminated, no Notes remain outstanding and the Loans,
together with interest, Fees and all other Obligations incurred hereunder and
under the other Credit Documents, have been paid in full:
8.1 REPORTING REQUIREMENTS. The Borrower will furnish to each Lender
and the Administrative Agent:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available and in
any event within 95 days after the close of each fiscal year of the
Borrower, the consolidated balance sheets of the Borrower and its
consolidated Subsidiaries as at the end of such fiscal year and the
related consolidated statements of income, of stockholders' equity and
of cash flows for such fiscal year, in each case setting forth
comparative figures for the preceding fiscal year, all in reasonable
detail and accompanied by the opinion with respect to such consolidated
financial statements of independent public accountants of recognized
national standing selected by the Borrower, which opinion shall be
unqualified and shall (i) state that such accountants audited such
consolidated financial statements in accordance with generally accepted
auditing standards, that such accountants believe that such audit
provides a reasonable basis for their opinion, and that in their
opinion such consolidated financial statements present fairly, in all
material
58
respects, the consolidated financial position of the Borrower and its
consolidated subsidiaries as at the end of such fiscal year and the
consolidated results of their operations and cash flows for such fiscal
year in conformity with generally accepted accounting principles, or
(ii) contain such statements as are customarily included in unqualified
reports of independent accountants in conformity with the
recommendations and requirements of the American Institute of Certified
Public Accountants (or any successor organization). Such financial
statements and opinion shall be accompanied by a certificate of such
accountants stating that during the course of their examination no
Default or Event of Default existing at the end of such fiscal year
came to their attention, or if any did come to their attention, briefly
describing the same.
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available and
in any event within 50 days after the close of each of the first three
fiscal quarters in each fiscal year of the Borrower, the unaudited
consolidated balance sheets of the Borrower and its consolidated
Subsidiaries as at the end of such fiscal quarter and the related
unaudited consolidated statements of income and of cash flows for such
fiscal quarter and/or for the fiscal year to date, and setting forth,
in the case of such unaudited consolidated statements of income and of
cash flows, comparative figures for the related periods in the prior
fiscal year, and which shall be certified on behalf of the Borrower by
the Chief Financial Officer or other Authorized Officer of the
Borrower, subject to changes resulting from normal year-end audit
adjustments.
(c) OFFICER'S COMPLIANCE CERTIFICATES. At the time of the
delivery of the financial statements provided for in sections 8.1(a)
and (b), a certificate on behalf of the Borrower of the Chief Financial
Officer or other Authorized Officer of the Borrower to the effect that,
to the best knowledge of the Borrower, no Default or Event of Default
exists or, if any Default or Event of Default does exist, specifying
the nature and extent thereof and the actions the Borrower proposes to
take with respect thereto, which certificate shall set forth the
calculations required to establish compliance with the provisions of
sections 9.6 and 9.7 of this Agreement.
(d) NOTICE OF DEFAULT. Promptly, and in any event within 3
Business Days after the Borrower or any of its Subsidiaries obtains
knowledge thereof, notice of the occurrence of any event which
constitutes a Default or Event of Default, which notice shall specify
the nature thereof, the period of existence thereof and what action the
Borrower proposes to take with respect thereto.
(e) ERISA. Promptly, and in any event within 10 Business Days
after the Borrower, any Subsidiary of the Borrower or any ERISA
Affiliate knows of the occurrence of any of the following, the Borrower
will deliver to each of the Lenders a certificate on behalf of the
Borrower of an Authorized Officer of the Borrower setting forth the
full details as to such occurrence and the action, if any, that the
Borrower, such Subsidiary or such ERISA Affiliate is required or
proposes to take, together with any
59
notices required or proposed to be given to or filed with or by the
Borrower, the Subsidiary, the ERISA Affiliate, the PBGC, a Plan
participant or the Plan administrator with respect thereto:
(i) that a Reportable Event has occurred with respect
to any Plan;
(ii) the institution of any steps by the Borrower,
any ERISA Affiliate, the PBGC or any other person to terminate
any Plan;
(iii) the institution of any steps by the Borrower or
any ERISA Affiliate to withdraw from any Plan;
(iv) the institution of any steps by the Borrower or
any Subsidiary to withdraw from any Multiemployer Plan or
Multiple Employer Plan, if such withdrawal could result in
withdrawal liability (as described in Part 1 of Subtitle E of
Title IV of ERISA) in excess of $5,000,000;
(v) a non-exempt "prohibited transaction" within the
meaning of section 406 of ERISA in connection with any Plan;
(vi) that a Plan has an Unfunded Current Liability
exceeding $5,000,000;
(vii) any material increase exceeding $5,000,000 in
the contingent liability of the Borrower or any Subsidiary
with respect to any post-retirement welfare liability; or
(viii) the taking of any action by, or the
threatening of the taking of any action by, the Internal
Revenue Service, the Department of Labor or the PBGC with
respect to any of the foregoing.
(f) ENVIRONMENTAL MATTERS. Promptly upon, and in any event
within 10 Business Days after, an officer of the Borrower or any of its
Subsidiaries obtains knowledge thereof, notice of one or more of the
following environmental matters: (i) any pending or overtly threatened
in writing material Environmental Claim against the Borrower or any of
its Subsidiaries or any Real Property owned or operated by the Borrower
or any of its Subsidiaries; (ii) any condition or occurrence on or
arising from any Real Property owned or operated by the Borrower or any
of its Subsidiaries that (A) results in material noncompliance by the
Borrower or any of its Subsidiaries with any applicable Environmental
Law or (B) would reasonably be expected to form the basis of a material
Environmental Claim against the Borrower or any of its Subsidiaries or
any such Real Property; (iii) any condition or occurrence on any Real
Property owned, leased or operated by the Borrower or any of its
Subsidiaries that would reasonably be expected to cause such Real
Property to be subject to any material restrictions on the ownership,
occupancy, use or transferability by the Borrower or any of its
Subsidiaries of such Real
60
Property under any Environmental Law; and (iv) the taking of any
material removal or remedial action in response to the actual or
alleged presence of any Hazardous Material on any Real Property owned,
leased or operated by the Borrower or any of its Subsidiaries as
required by any Environmental Law or any governmental or other
administrative agency. All such notices shall describe in reasonable
detail the nature of the Environmental Claim, the Borrower's or such
Subsidiary's response thereto and the potential exposure in dollars, if
known or reasonably quantifiable, of the Borrower and its Subsidiaries
with respect thereto.
(g) SEC REPORTS AND REGISTRATION STATEMENTS. Promptly after
transmission thereof or other filing with the SEC, copies of all
registration statements (other than the exhibits thereto and any
registration statement on Form S-8 or its equivalent) and all annual,
quarterly or current reports that the Borrower or any of its
Subsidiaries files with the SEC on Form 10-K, 10-Q or 8-K (or any
successor forms).
(h) ANNUAL AND QUARTERLY REPORTS, PROXY STATEMENTS AND OTHER
REPORTS DELIVERED TO STOCKHOLDERS GENERALLY. Promptly after
transmission thereof to its stockholders, copies of all annual,
quarterly and other reports and all proxy statements that the Borrower
furnishes to its stockholders generally.
(i) OTHER INFORMATION. With reasonable promptness, such other
information or documents (financial or otherwise) relating to the
Borrower or any of its Subsidiaries as any Lender may reasonably
request from time to time.
8.2 BOOKS, RECORDS AND INSPECTIONS. The Borrower will, and will cause
each of its Subsidiaries to, (i) keep proper books of record and account, in
which full and correct entries shall be made of all financial transactions and
the assets and business of the Borrower or such Subsidiaries, as the case may
be, in accordance with GAAP; and (ii) permit, upon reasonable notice to the
Chief Financial Officer of the Borrower, officers and designated representatives
of the Administrative Agent or any of the Lenders to visit and inspect any of
the properties or assets of the Borrower and any of its Subsidiaries in
whomsoever's possession (but only to the extent the Borrower or such Subsidiary
has the right to do so to the extent in the possession of another person), to
examine the books of account of the Borrower and any of its Subsidiaries, and
make copies thereof and take extracts therefrom, and to discuss the affairs,
finances and accounts of the Borrower and of any of its Subsidiaries with, and
be advised as to the same by, its and their officers and independent accountants
and independent actuaries, if any, all at such reasonable times and intervals
and to such reasonable extent as the Administrative Agent or any of the Lenders
may request.
8.3 INSURANCE. The Borrower will, and will cause each of its
Subsidiaries to, (i) maintain insurance coverage by such insurers and in such
forms and amounts and against such risks as are generally consistent with the
insurance coverage maintained by the Borrower and its Subsidiaries at the date
hereof, and (ii) forthwith upon any Lender's written request, furnish to
61
such Lender (with a copy to the Administrative Agent) such information about
such insurance as such Lender may from time to time reasonably request, which
information shall be prepared in form and detail satisfactory to such Lender and
certified by an Authorized Officer of the Borrower.
8.4 PAYMENT OF TAXES AND CLAIMS. The Borrower will pay and discharge,
and will cause each of its Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which penalties attach thereto, and all lawful claims which, if unpaid, could
become a Lien or charge upon any properties of the Borrower or any of its
Subsidiaries; PROVIDED that neither the Borrower nor any of its Subsidiaries
shall be required to pay any such tax, assessment, charge, levy or claim which
is being contested in good faith and by proper proceedings if it has maintained
adequate reserves with respect thereto in accordance with GAAP; and PROVIDED,
FURTHER, that the Borrower will not be considered to be in default of any of the
provisions of this sentence if the Borrower or any Subsidiary fails to pay any
such amount which, individually or in the aggregate, is immaterial and such
nonpayment could not reasonably be expected to result in a Material Adverse
Effect.
8.5 CORPORATE FRANCHISES. The Borrower will do, and will cause each of
its Subsidiaries to do, or cause to be done, all things necessary to preserve
and keep in full force and effect its corporate existence, rights and authority;
PROVIDED that nothing in this section 8.5 shall be deemed to prohibit (i) any
transaction permitted by section 9.2; (ii) the termination of existence of any
Subsidiary if (A) the Borrower determines that such termination is in its best
interest and (B) such termination is not adverse in any material respect to the
Lenders; or (iii) the loss of any rights, authorities or franchises if the loss
thereof, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.
8.6 GOOD REPAIR. The Borrower will, and will cause each of its
Subsidiaries to, ensure that its material properties and equipment used or
useful in its business in whomsoever's possession they may be, are kept in good
repair, working order and condition, normal wear and tear excepted, and that
from time to time there are made in such properties and equipment all needful
and proper repairs, renewals, replacements, extensions, additions, betterments
and improvements, thereto, to the extent and in the manner customary for
companies in similar businesses.
8.7 COMPLIANCE WITH STATUTES, ETC. The Borrower will, and will cause
each of its Subsidiaries to, comply, in all material respects, with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property, other than those (i)
the noncompliance with which would not have, and which would not be reasonably
expected to have, a Material Adverse Effect; and/or (ii) imposed by
Environmental Laws, as to which section 8.8 shall be applicable.
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8.8 COMPLIANCE WITH ENVIRONMENTAL LAWS. Without limitation of the
covenants contained in section 8.7 hereof, the Borrower will comply, and will
cause each of its Subsidiaries to comply, in all material respects, with all
Environmental Laws applicable to the ownership, lease or use of all Real
Property now or hereafter owned, leased or operated by the Borrower or any of
its Subsidiaries, and will promptly pay or cause to be paid all costs and
expenses incurred in connection with such compliance, EXCEPT to the extent that
such compliance with Environmental Laws is being contested in good faith and by
appropriate proceedings and for which adequate reserves have been established to
the extent required by GAAP, and an adverse outcome in such proceedings is not
reasonably expected to have a Material Adverse Effect.
8.9 FISCAL YEARS, FISCAL QUARTERS. If the Borrower shall change any of
its or any of its Subsidiaries' fiscal years or fiscal quarters (other than the
fiscal year or fiscal quarters of a person which becomes a Subsidiary, made at
the time such person becomes a Subsidiary to conform to the Borrower's fiscal
year and fiscal quarters), the Borrower will promptly, and in any event within
30 days following any such change, deliver a notice to the Administrative Agent
and the Lenders describing such change and any material accounting entries made
in connection therewith and stating whether such change will have any impact
upon any financial computations to be made hereunder, and if any such impact is
foreseen, describing in reasonable detail the nature and extent of such impact.
If the Required Lenders determine that any such change will have any impact upon
any financial computations to be made hereunder which is adverse to the Lenders,
the Borrower will, if so requested by the Administrative Agent, enter into an
amendment to this Agreement, in form and substance reasonably satisfactory to
the Administrative Agent and the Required Lenders, modifying any of the
financial covenants or related provisions hereof in such manner as the Required
Lenders determine is necessary to eliminate such adverse effect.
8.10 HEDGE AGREEMENTS, ETC. If the Borrower determines to enter into
any Hedge Agreement, it may do so, and if any Subsidiary of the Borrower
determines to enter into any Hedge Agreement, the Borrower will ensure that it
does so, but only if such Hedge Agreement is entered into in compliance with the
following requirements: (i) the principal purpose of such Hedge Agreement,
insofar as the Borrower or any Subsidiary is concerned, is to provide protection
to the Borrower or any such Subsidiary from fluctuations and other changes in
interest rates, currency exchange rates and/or raw material or commodity prices,
as and to the extent considered reasonably necessary by the Borrower; and (ii)
such Hedge Agreement does not expose the Borrower or its Subsidiaries to
predominantly speculative risks unrelated to the amount of assets, Indebtedness
or other liabilities intended to be subject to coverage on a notional basis
under such Hedge Agreement and any other Hedge Agreements related thereto.
8.11 CERTAIN SUBSIDIARIES TO JOIN IN SUBSIDIARY GUARANTY. (a) In the
event that at any time after the Closing Date
(x) the Borrower has any Material Subsidiary (other than a
Foreign Subsidiary as to which section 8.11(b) applies) which is not a
party to the Subsidiary Guaranty, or
63
(y) an Event of Default shall have occurred and be continuing
and the Borrower has any Subsidiary which is not a party to the
Subsidiary Guaranty,
THEN the Borrower will notify the Administrative Agent in writing of such event,
identifying the Subsidiary in question and referring specifically to the rights
of the Administrative Agent and the Lenders under this section. The Borrower
will, within 30 days following request therefor from the Administrative Agent
(who may give such request on its own initiative and who shall so give such
request if so instructed by the Required Lenders), cause such Subsidiary to
deliver to the Administrative Agent, in sufficient quantities for the Lenders,
(i) a Subsidiary Guaranty (as modified, amended or supplemented from time to
time in accordance with the terms thereof and hereof, the "SUBSIDIARY
GUARANTY"), substantially in the form attached hereto as Exhibit C, if the
Subsidiary Guaranty has not previously been executed and delivered, (ii) if the
Subsidiary Guaranty has previously been executed and delivered, a joinder
supplement, reasonably satisfactory in form and substance to the Administrative
Agent and the Required Lenders, duly executed by such Subsidiary, pursuant to
which such Subsidiary joins in the Subsidiary Guaranty as a guarantor
thereunder, and (ii) if such Subsidiary is a corporation, resolutions of the
Board of Directors of such Subsidiary, certified by the Secretary or an
Assistant Secretary of such Subsidiary as duly adopted and in full force and
effect, authorizing the execution and delivery of such joinder supplement, or if
such Subsidiary is not a corporation, such other evidence of the authority of
such Subsidiary to execute such joinder supplement as the Administrative Agent
may reasonably request.
(b) Notwithstanding the foregoing provisions of this section 8.11, the
Borrower shall not, unless an Event of Default shall have occurred and be
continuing, be required to cause a Foreign Subsidiary to join in the Subsidiary
Guaranty if to do so would subject the Borrower to liability for additional
United States income taxes by virtue of section 956 of the Code in an amount the
Borrower considers material.
8.12 MOST FAVORED COVENANT STATUS. Should the Borrower at any time
after the Effective Date, issue or guarantee any unsecured Indebtedness for
money borrowed or represented by bonds, notes, debentures or similar securities
in an aggregate amount exceeding $50,000,000, to any lender or group of lenders
acting in concert with one another, or one or more institutional investors,
pursuant to a loan agreement, credit agreement, note purchase agreement,
indenture, guaranty or other similar instrument, which agreement, indenture,
guaranty or instrument, includes affirmative or negative business or financial
covenants (or any events of default or other type of restriction which would
have the practical effect of any affirmative or negative business or financial
covenant, including, without limitation, any "put" or mandatory prepayment of
such Indebtedness upon the occurrence of a "change of control") which are
applicable to the Borrower, other than those set forth herein or in any of the
other Credit Documents, the Borrower shall promptly so notify the Administrative
Agent and the Lenders and, if the Administrative Agent shall so request by
written notice to the Borrower (after a determination has been made by the
Required Lenders that any of the above-referenced documents or instruments
contain any such provisions, which either individually or in the
64
aggregate, are more favorable to the holders of such unsecured Indebtedness than
any of the provisions set forth herein), the Borrower, the Administrative Agent
and the Lenders shall promptly amend this Agreement to incorporate some or all
of such provisions, in the discretion of the Administrative Agent and the
Required Lenders, into this Agreement and, to the extent necessary and
reasonably desirable to the Administrative Agent and the Required Lenders, into
any of the other Credit Documents, all at the election of the Administrative
Agent and the Required Lenders.
8.13 SENIOR DEBT. The Borrower will at all times ensure that (i) the
claims of the Lenders in respect of the Obligations of the Borrower will in all
respects rank prior to or on a parity with the claims of every senior unsecured
creditor of the Borrower, and (ii) any Indebtedness of the Borrower which is
subordinated in any manner to the claims of any other creditor of the Borrower
will be subordinated in like manner to such claims of the Lenders.
8.14 DEBT RATING DOWNGRADE. If the Borrower's Index Debt Rating ceases
to be Investment Grade by both Rating Agencies at any time following the Closing
Date, the Borrower will, and will cause each of its Domestic Subsidiaries that
are Material Subsidiaries to, within 30 days following the date of such
downgrade, pledge to the Administrative Agent, for the benefit of the Lenders
and the obligees of the Additional Secured Obligations, pursuant to pledge
agreements (in form and substance satisfactory to the Administrative Agent), (i)
100%, in the case of each Domestic Subsidiary that is a Material Subsidiary, and
65%, in the case of each Foreign Subsidiary that is a Material Subsidiary, of
the issued and outstanding Capital Stock of each of its Material Subsidiaries
and (ii) all of the tangible and intangible assets (other than trade receivables
and related collateral, credit support and similar rights sold pursuant to the
Permitted Receivables Programs) of the Borrower and each of its Domestic
Subsidiaries that are Material Subsidiaries, in each case as security for the
Obligations and the Additional Secured Obligations. The Borrower will, and will
cause each such Material Subsidiary to, take all such actions as requested by
the Administrative Agent to ensure that the Administrative Agent has a first
priority perfected Lien (subject to Permitted Liens) on and security interest in
all Capital Stock and all tangible and intangible assets of the Borrower and its
Material Subsidiaries pledged in favor of the Administrative Agent and to
deliver legal opinions addressed to all Lenders, the obligees of the Additional
Secured Obligations and the Administrative Agent, in form and substance and from
counsel, reasonably acceptable to the Administrative Agent, relating to the
actions described in this section. The Administrative Agent and the applicable
obligees of the Additional Secured Obligations, or agents on their behalf, will
enter into an intercreditor agreement in form and substance satisfactory to each
of them with respect to the collateral pledged pursuant to this section.
SECTION 9. NEGATIVE COVENANTS.
The Borrower hereby covenants and agrees that on the Effective Date and
thereafter for so long as this Agreement is in effect and until such time as the
Total Commitment has been
65
terminated, no Notes remain outstanding and the Loans, together with interest,
Fees and all other Obligations incurred hereunder and under the other Credit
Documents, have been paid in full:
9.1 CHANGES IN BUSINESS. Neither the Borrower nor any of its
Subsidiaries will engage in any business if, as a result, the general nature of
the business, taken on a consolidated basis, which would then be engaged in by
the Borrower and its Subsidiaries, would be substantially changed from the
general nature of the business engaged in by the Borrower and its Subsidiaries
on the Effective Date.
9.2 CONSOLIDATION, MERGER, ASSET SALES, ETC. The Borrower will not, and
will not permit any Subsidiary to, (i) enter into any transaction of merger or
consolidation, (ii) sell all or substantially all of its Property and business,
(iii) otherwise make or effect any Asset Sale, or (iv) agree to do any of the
foregoing at any future time, EXCEPT that the following shall be permitted:
(a) CERTAIN INTERCOMPANY MERGERS, ETC. If no Default or Event
of Default shall have occurred and be continuing or would result
therefrom,
(i) the merger, consolidation or amalgamation of any
Subsidiary of the Borrower with or into the Borrower; PROVIDED
that the Borrower is the surviving or continuing or resulting
corporation;
(ii) the merger, consolidation or amalgamation of any
Subsidiary of the Borrower with or into another Subsidiary of
the Borrower; PROVIDED that the surviving or continuing or
resulting corporation is a Wholly-Owned Subsidiary of the
Borrower; and PROVIDED, FURTHER, that if any such Subsidiary
is a guarantor under the Subsidiary Guaranty, the surviving or
continuing or resulting corporation is or contemporaneously
therewith becomes a guarantor under the Subsidiary Guaranty;
(iii) the liquidation, winding up or dissolution of
any Subsidiary of the Borrower;
(iv) the making of any Asset Sale by the Borrower to
any Wholly-Owned Subsidiary;
(v) the making of any Asset Sale by any Subsidiary to
the Borrower; and
(vi) the making of any Asset Sale by any Subsidiary
of the Borrower to any Wholly-Owned Subsidiary of the
Borrower; PROVIDED that if the selling Subsidiary is a
guarantor under the Subsidiary Guaranty the purchasing
Subsidiary must be, or contemporaneously become, a guarantor
under the Subsidiary Guaranty.
66
(b) ASSET SALES IN PERMITTED RECEIVABLES PROGRAMS. The
Borrower or any of its Subsidiaries may make any Asset Sale consisting
of trade receivables and related collateral, credit support and similar
rights, pursuant to one or more receivables programs, to a person who
is not a Subsidiary of the Borrower; PROVIDED that (i) the
consideration to be received by the Borrower and its Subsidiaries for
any such Asset Sale consists of cash; (ii) no Default or Event of
Default shall have occurred and be continuing or would result
therefrom; and (iii) the aggregate outstanding balance of the trade
receivables subject to all such programs at any point in time is not in
excess of $300,000,000; PROVIDED that if at any time the Leverage Ratio
is greater than 3.00 to 1.00 after giving pro forma effect to such
receivables programs or the Index Debt Rating is not Investment Grade,
the aggregate outstanding balance of the trade receivables subject to
all such programs at such time may not exceed $200,000,000
(collectively, the "PERMITTED RECEIVABLES PROGRAMS").
(c) OTHER PERMITTED ASSET SALES. In addition to the Asset
Sales permitted in sections 9.2(a) and 9.2(b) above, if no Default or
Event of Default shall have occurred and be continuing or would result
therefrom, the Borrower or any of its Subsidiaries may make any other
Asset Sale to a person who is not a Subsidiary of the Borrower;
PROVIDED that:
(i) in the case of any such Asset Sale or related
series of Asset Sales where the fair value (as determined by
management of the Borrower) of the Property covered thereby
exceeds $50,000,000 in the aggregate, at least 75% of the
consideration to be received by the Borrower and its
Subsidiaries consists of cash;
(ii) the cumulative aggregate consideration for all
such Asset Sales completed during the calendar year ended
December 31, 2001, or any subsequent calendar year, does not
exceed $140,000,000 in the case of any such calendar year; and
(iii) in the case of any such transaction involving
consideration in excess of $50,000,000, at least five Business
Days prior to the date of completion of such transaction the
Borrower shall have delivered to the Administrative Agent an
officer's certificate executed on behalf of the Borrower by an
Authorized Officer of the Borrower, which certificate shall
contain (1) a description of the proposed transaction, the
date such transaction is scheduled to be consummated, the
estimated purchase price or other consideration for such
transaction, (2) a certification that no Default or Event of
Default has occurred and is continuing, or would result from
consummation of such transaction, and (3) which shall (if
requested by the Administrative Agent) include a certified
copy of the draft or definitive documentation pertaining
thereto;
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For the avoidance of doubt, no amounts in respect of Asset Sales made
in Permitted Receivables Programs pursuant to section 9.2(b) shall be
included in any dollar computations pursuant to this section 9.2(c).
9.3 RESTRICTIONS ON ACQUISITIONS. The Borrower will not, and will not
permit any Subsidiary to, consummate (a) Acquisitions for an aggregate
consideration in excess of $50,000,000 in any fiscal year if, at the time of any
such Acquisition, the Leverage Ratio would be greater than or equal to 3.00 to
1.00 after giving pro forma effect to such Acquisition, or (b) any single
Acquisition for an aggregate consideration in excess of $75,000,000 for such
Acquisition (PROVIDED that the aggregate amount of all Acquisitions consummated
during the term of this Agreement does not exceed $300,000,000) if, at the time
of such Acquisition, the Leverage Ratio would be less than 3.00 to 1.00 after
giving pro forma effect to such Acquisition. Without limitation of the
foregoing, the Borrower will not directly or indirectly use any proceeds of a
Credit Event hereunder to finance an Acquisition which is actively opposed by
the Board of Directors (or similar governing body) of the selling person or the
person whose equity interests are to be acquired, UNLESS all of the Lenders
specifically approve or consent to such Acquisition in writing.
9.4 LIMITATION ON SALES AND LEASEBACKS. The Borrower will not itself,
and it will not permit any Domestic Subsidiary to, enter into any arrangement
with any bank, insurance company or other lender or investor (not including the
Borrower or any Subsidiary) or to which any such lender or investor is a party,
providing for the leasing by the Borrower or any Domestic Subsidiary for a
period, including renewals, in excess of three years of any Principal Domestic
Manufacturing Property which has been or is to be sold or transferred, more than
120 days after the acquisition thereof or the completion of construction and
commencement of full operation thereof, by the Borrower or any Domestic
Subsidiary to such lender or investor or to any person to whom funds have been
or are to be advanced by such lender or investor on the security of such
Principal Domestic Manufacturing Property (herein referred to as a "SALE AND
LEASEBACK TRANSACTION") unless either:
(a) the Borrower or such Domestic Subsidiary could create Debt
secured by a Mortgage on the Principal Domestic Manufacturing Property
to be leased back in an amount equal to the Attributable Debt with
respect to such sale and leaseback transaction without equally and
ratably securing the Obligations, or
(b) the Borrower within 120 days after the sale or transfer
shall have been made by the Borrower or by any such Domestic
Subsidiary, applies an amount equal to the greater of (i) the net
proceeds of the sale of the Principal Domestic Manufacturing Property
sold and leased back pursuant to such arrangement or (ii) the fair
market value of the Principal Domestic Manufacturing Property so sold
and leased back at the time of entering into such arrangements (as
determined by any two of the following: the Chairman of the Board of
the Borrower, its President, any Vice President, Finance of the
Borrower, its Treasurer and its Controller) to the retirement of Funded
Debt of the
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Borrower which is PARI PASSU with the Obligations; PROVIDED that the
amount to be applied to the retirement of Funded Debt of the Borrower
shall be reduced by (a) the amount by which the Commitment Amount was
permanently reduced during the 120 days after such sale, if any such
reduction in fact occurred, and (b) the principal amount of such Funded
Debt, other than Obligations, voluntarily retired by the Borrower
within 120 days after such sale. Notwithstanding the foregoing, no
retirement referred to in this clause (2) may be effected by payment at
maturity or pursuant to any mandatory sinking fund payment or any
mandatory prepayment provision.
9.5 INDEBTEDNESS. The Borrower will not, and will not permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness of the Borrower or any of its Subsidiaries, EXCEPT:
(a) CREDIT DOCUMENTS: Indebtedness incurred under this
Agreement and the other Credit Documents;
(b) EXISTING INDEBTEDNESS: Existing Indebtedness and any
refinancing, extension, renewal or refunding of any such Existing
Indebtedness not involving an increase in the principal amount thereof
or a reduction of more than 10% in the remaining weighted average life
to maturity thereof (computed in accordance with standard financial
practice); PROVIDED that any Existing Indebtedness set forth on Annex
IV or otherwise referred to in section 6.1 as being intended to be
refinanced by Loans incurred hereunder or otherwise retired, may not be
otherwise refinanced;
(c) INTERCOMPANY DEBT: unsecured Indebtedness of (i) the
Borrower owed to any of its Subsidiaries and (ii) any of the Borrower's
Subsidiaries owed to the Borrower or to another Subsidiary of the
Borrower;
(d) HEDGE AGREEMENTS: Indebtedness of the Borrower and its
Subsidiaries under Hedge Agreements;
(e) FIVE YEAR CREDIT FACILITY AGREEMENT: Indebtedness incurred
under the Five Year Credit Facility Agreement;
(f) ADDITIONAL UNSECURED INDEBTEDNESS: additional unsecured
Indebtedness of the Borrower and its Subsidiaries in an aggregate
principal amount not to exceed $25,000,000 at any time outstanding;
(g) PERMITTED RECEIVABLES PROGRAMS: Indebtedness incurred
under the Permitted Receivables Programs; provided that, until the Five
Year Credit Facility Term Loans have been repaid in full, any increase
in the amount of such Indebtedness over the amount existing on the
Closing Date shall be applied to a prepayment of the Loans pursuant to
section 5.2(c);
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(h) BOND ISSUANCES: Indebtedness incurred in connection with
the issuance by the Borrower of public or private debt securities; and
(i) ADDITIONAL INDEBTEDNESS AND GUARANTY OBLIGATIONS:
additional Indebtedness and Guaranty Obligations of the Borrower and/or
any of its Subsidiaries not otherwise permitted pursuant to the
foregoing clauses, without limitation as to aggregate amount; PROVIDED
that at the time of incurrence thereof and after giving effect thereto,
(i) no Event of Default shall have occurred and be continuing or shall
result therefrom, (ii) if such Indebtedness or Guaranty Obligation is
secured by any collateral, such Indebtedness is permitted by this
Agreement, and (iii) the Borrower would have been in compliance with
the covenants contained in sections 9.6 and 9.7 hereof if such
Indebtedness had been incurred at the beginning of the most recent
Testing Period for which financial information has been furnished to
the Lenders hereunder, and such Indebtedness remained outstanding
throughout such Testing Period; PROVIDED, FURTHER, that if, at the time
of incurrence of such Indebtedness and after giving pro forma effect
thereto, the Leverage Ratio is greater than 3.00 to 1.00 or the Index
Debt Rating is not Investment Grade, the Borrower and its Subsidiaries
may only incur and suffer to exist up to $50,000,000 in aggregate
principal amount of such additional Indebtedness and Guaranty
Obligations; PROVIDED, FURTHER, that, in any event, the amount of
secured Indebtedness permitted hereunder, other than in connection with
any Permitted Receivables Program, shall not exceed $20,000,000 at any
time outstanding.
9.6 LEVERAGE RATIO. The Borrower will not permit the Leverage Ratio
during any period set forth below to exceed the amount set forth opposite such
period:
PERIOD LEVERAGE RATIO
12/31/01 to 06/29/02 4.75:1
06/30/02 to 09/29/02 4.50:1
09/30/02 to 12/30/02 4.00:1
12/31/02 to 06/29/03 3.75:1
06/30/03 to 12/30/03 3.25:1
12/31/03 and thereafter 3.00:1
9.7 FIXED CHARGE COVERAGE RATIO. The Borrower will not permit the Fixed
Charge Coverage Ratio for any Testing Period ending on a date set forth below to
be less than the amount set forth opposite such date:
DATE FIXED CHARGE
COVERAGE RATIO
12/31/01 1.25:1
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03/31/02 1.35:1
06/30/02 1.50:1
09/30/02 1.75:1
12/31/02 1.75:1
03/31/03 2.00:1
06/30/03 2.15:1
09/30/03 2.25:1
12/31/03 2.50:1
03/31/04 2.50:1
06/30/04 2.75:1
09/30/04 2.75:1
12/31/04 3.00:1
03/31/05 3.50:1
and thereafter
9.8 NO STOCK REPURCHASES WHILE INDEX DEBT RATING IS NOT INVESTMENT
GRADE, ETC. The Borrower will not, at any time when its Index Debt Rating is not
Investment Grade, directly or indirectly make, or permit any of its Subsidiaries
to directly or indirectly make, any purchase, redemption, retirement or other
acquisition of (i) any shares of Capital Stock (other than the Series A ESOP
Convertible Preferred Stock of the Borrower) of any class of the Borrower (other
than for a consideration consisting solely of Capital Stock of the same class of
the Borrower), or (ii) any warrants, rights or options to acquire, or any
securities convertible into or exchangeable for, any Capital Stock (other than
the Series A ESOP Convertible Preferred Stock of the Borrower) of the Borrower.
9.9 TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will not
permit any Subsidiary to, enter into any transaction or series of transactions
with any Affiliate (other than, in the case of the Borrower, any Subsidiary, and
in the case of a Subsidiary, the Borrower or another Subsidiary) other than in
the ordinary course of business of and pursuant to the reasonable requirements
of the Borrower's or such Subsidiary's business and upon fair and reasonable
terms no less favorable to the Borrower or such Subsidiary than would obtain in
a comparable arm's-length transaction with a person other than an Affiliate,
EXCEPT agreements and transactions with and payments to employees, officers,
directors, shareholders and other Affiliates which are either (i) entered into
in the ordinary course of business and not prohibited by any of the provisions
of this Agreement, or (ii) entered into outside the ordinary course of business,
approved by the directors or shareholders of the Borrower, and not prohibited by
any of the provisions of this Agreement.
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9.10 PLAN TERMINATIONS, MINIMUM FUNDING, ETC. The Borrower will not,
and will not permit any ERISA Affiliate to, (i) terminate any Plan or Plans so
as to result in liability of the Borrower or any ERISA Affiliate to the PBGC in
excess of, in the aggregate, $5,000,000, (ii) permit to exist one or more events
or conditions which reasonably present a material risk of the termination by the
PBGC of any Plan or Plans with respect to which the Borrower or any ERISA
Affiliate would, in the event of such termination, incur liability to the PBGC
in excess of such amount in the aggregate, or (iii) fail to comply with the
minimum funding standards of ERISA and the Code with respect to any Plan.
9.11 RESTRICTED PAYMENTS. The Borrower will not declare, pay or make
any payment, dividend, distribution or exchange (in cash, property or
obligations) on or in respect of any class of Capital Stock (now or hereafter
outstanding) of the Borrower or on any warrants, options or other rights with
respect to any class of Capital Stock (now or hereafter outstanding) of the
Borrower (other than (i) dividends or distributions payable in its Capital Stock
or warrants to purchase its Capital Stock and (ii) splits or reclassifications
of its Capital Stock into additional or other shares of its Capital Stock) or
apply any of its funds, property or assets to the purchase, redemption,
exchange, sinking fund or other retirement of any shares of any class of Capital
Stock (now or hereafter outstanding, other than the Series A ESOP Convertible
Preferred Stock) of the Borrower, or warrants, options or other rights with
respect to any class of Capital Stock (now or hereafter outstanding, other than
the Series A ESOP Convertible Preferred Stock) of the Borrower (the foregoing
prohibited acts being herein collectively referred to as "RESTRICTED PAYMENTS")
in an amount in excess of $30,000,000 in the aggregate in any fiscal year if, at
any time during such fiscal year, the Leverage Ratio is greater than 3.00 to
1.00 after giving pro forma effect to such Restricted Payments.
9.12 RESTRICTIVE AGREEMENTS. The Borrower will not, and will not permit
any of its Subsidiaries to, enter into any agreement prohibiting (a) the
creation or assumption of any Lien upon its properties, revenues or assets,
whether now owned or hereafter acquired, (b) its ability to amend or otherwise
modify any Credit Document or (c) the ability of any Subsidiary to make any
payments, directly or indirectly, to the Borrower, including by way of
dividends, advances, repayments of loans, reimbursements of management and other
intercompany charges, expenses and accruals or other returns on investments. The
foregoing prohibitions shall not apply to restrictions contained (i) in any
Credit Document or (ii) in the case of clause (a), any agreement governing any
Indebtedness permitted by section 9.5 as to the assets financed with the
proceeds of such Indebtedness.
SECTION 10. EVENTS OF DEFAULT.
10.1 EVENTS OF DEFAULT. Any of the following specified events shall
constitute an Event of Default (each an "EVENT OF DEFAULT"):
(a) PAYMENTS: the Borrower shall (i) default in the payment
when due of any principal of the Loans; or (ii) default, and such
default shall continue for five or more
72
Business Days, in the payment when due of any interest on the Loans or
any Fees or any other amounts owing hereunder or under any other Credit
Document; or
(b) REPRESENTATIONS, ETC.: any representation, warranty or
statement made by the Borrower or any other Credit Party herein or in
any other Credit Document or in any statement or certificate delivered
or required to be delivered pursuant hereto or thereto shall prove to
be untrue in any material respect on the date as of which made or
deemed made; or
(c) CERTAIN NEGATIVE COVENANTS: the Borrower shall default in
the due performance or observance by it of any term, covenant or
agreement contained in sections 9.2 through 9.8, inclusive, of this
Agreement, or sections 9.10 through 9.12, inclusive, of this Agreement;
or
(d) OTHER COVENANTS: the Borrower shall default in the due
performance or observance by it of any term, covenant or agreement
contained in this Agreement or any other Credit Document, other than
those referred to in section 10.1(a) or (b) or (c) above, and such
default is not remedied within 30 days after the earlier of (i) an
officer of the Borrower obtaining actual knowledge of such default and
(ii) the Borrower receiving written notice of such default from the
Administrative Agent or the Required Lenders (any such notice to be
identified as a "notice of default" and to refer specifically to this
paragraph); or
(e) CROSS DEFAULT UNDER OTHER AGREEMENTS: the Borrower or any
of its Subsidiaries shall (i) default in any payment when due with
respect to the Five Year Credit Facility Agreement, (ii) default in any
payment with respect to any other Indebtedness (other than the
Obligations) owed to any Lender, or having an aggregate unpaid
principal amount (or Capitalized Lease Obligation, in the case of a
Capital Lease, or present value, based on the implicit interest rate,
in the case of a Synthetic Lease) of $25,000,000 or greater, and such
default shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Indebtedness,
or (iii) default in the observance or performance of any agreement or
condition relating to any such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto (and
all grace periods applicable to such observance, performance or
condition shall have expired), or any other event shall occur or
condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause any such Indebtedness to become due prior to its
stated maturity; or any such Indebtedness of the Borrower or any of its
Subsidiaries shall be declared to be due and payable, or shall be
required to be prepaid (other than by a regularly scheduled required
prepayment or redemption, prior to the stated maturity thereof), or
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(f) OTHER CREDIT DOCUMENTS: any Credit Document shall cease
for any reason (other than termination in accordance with its terms) to
be in full force and effect; or any Credit Party shall default in any
payment obligation thereunder; or any Credit Party shall default in any
material respect in the due performance and observance of any other
obligation thereunder and such default shall continue unremedied for a
period of at least 30 days after notice by the Administrative Agent or
the Required Lenders; or any Credit Party shall (or seek to) disaffirm
or otherwise limit its obligations thereunder otherwise than in strict
compliance with the terms thereof; or
(g) JUDGMENTS: one or more judgments, orders or decrees shall
be entered against the Borrower and/or any of its Subsidiaries
involving a liability (other than a liability covered by insurance, as
to which the carrier has adequate claims paying ability and has not
effectively reserved its rights) of $10,000,000 or more in the
aggregate for all such judgments, orders and decrees for the Borrower
and its Subsidiaries, and any such judgments or orders or decrees shall
not have been vacated, discharged or stayed or bonded pending appeal
within 30 days (or such longer period, not in excess of 60 days, during
which enforcement thereof, and the filing of any judgment lien, is
effectively stayed or prohibited) from the entry thereof; or
(h) BANKRUPTCY, ETC.: any of the following shall occur:
(i) the Borrower or any of its Material Subsidiaries
(the Borrower and each of such other persons, each a
"PRINCIPAL PARTY") shall commence a voluntary case concerning
itself under Title 11 of the United States Code entitled
"Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "BANKRUPTCY CODE"); or
(ii) an involuntary case is commenced against any
Principal Party under the Bankruptcy Code and the petition is
not controverted within 10 days, or is not dismissed within 60
days, after commencement of the case; or
(iii) a custodian (as defined in the Bankruptcy Code)
is appointed for, or takes charge of, all or substantially all
of the property of any Principal Party; or
(iv) any Principal Party commences (including by way
of applying for or consenting to the appointment of, or the
taking of possession by, a rehabilitator, receiver, custodian,
trustee, conservator or liquidator (collectively, a
"CONSERVATOR") of itself or all or any substantial portion of
its property) any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency, liquidation, rehabilitation,
conservatorship or similar law of any jurisdiction whether now
or hereafter in effect relating to such Principal Party; or
74
(v) any such proceeding is commenced against any
Principal Party to the extent such proceeding is consented to
by such person or remains undismissed for a period of 60 days;
or
(vi) any Principal Party is adjudicated insolvent or
bankrupt; or
(vii) any order of relief or other order approving
any such case or proceeding is entered; or
(viii) any Principal Party suffers any appointment of
any conservator or the like for it or any substantial part of
its property which continues undischarged or unstayed for a
period of 60 days; or
(ix) any Principal Party makes a general assignment
for the benefit of creditors; or
(x) any corporate (or similar organizational) action
is taken by any Principal Party for the purpose of effecting
any of the foregoing; or
(i) ERISA: (i) any of the events described in clauses (i)
through (viii) of section 8.1(e) shall have occurred; or (ii) there
shall result from any such event or events the imposition of a lien,
the granting of a security interest, or a liability or a material risk
of incurring a liability; and (iii) any such event or events or any
such lien, security interest or liability, individually, and/or in the
aggregate, in the opinion of the Required Lenders, has had, or could
reasonably be expected to have, a Material Adverse Effect.
10.2 ACCELERATION, ETC. Upon the occurrence of any Event of Default,
and at any time thereafter, if any Event of Default shall then be continuing,
the Administrative Agent shall, upon the written request of the Required
Lenders, by written notice to the Borrower, take any or all of the following
actions, without prejudice to the rights of the Administrative Agent or any
Lender to enforce its claims against the Borrower or any other Credit Party in
any manner permitted under applicable law:
(a) declare the Total Commitment terminated, whereupon the
Commitment of each Lender shall forthwith terminate immediately without
any other notice of any kind;
(b) declare the principal of and any accrued interest in
respect of all Loans and all other Obligations owing hereunder and
under the other Credit Documents to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the
Borrower;
(c) exercise any other right or remedy available under any of
the Credit Documents or applicable law;
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PROVIDED that, if an Event of Default specified in section 10.1(h) shall occur
with respect to the Borrower, the result which would occur upon the giving of
written notice by the Administrative Agent as specified in clauses (a) and/or
(b) above shall occur automatically without the giving of any such notice; and
PROVIDED, FURTHER, that any declaration pursuant to clause (b) above, or any
other acceleration of the maturity of the Loans or any other Obligations, shall
automatically and simultaneously terminate the Total Commitment, whereupon the
Commitment of each Lender shall forthwith terminate immediately without any
other notice of any kind.
10.3 APPLICATION OF LIQUIDATION PROCEEDS. All monies received by the
Administrative Agent or any Lender from the exercise of remedies hereunder or
under the other Credit Documents or under any other documents relating to this
Agreement shall, unless otherwise required by the terms of the other Credit
Documents or by applicable law, be applied as follows:
(i) FIRST, to the payment of all expenses (to the extent not
otherwise paid by the Borrower or any of the other Credit Parties)
incurred by the Agents and the Lenders in connection with the exercise
of such remedies, including, without limitation, all reasonable costs
and expenses of collection, reasonable documented attorneys' fees,
court costs and any foreclosure expenses;
(ii) SECOND, to the payment PRO RATA of interest then accrued
on the outstanding Loans;
(iii) THIRD, to the payment PRO RATA of any fees then accrued
and payable to the Agents or any Lender under this Agreement in respect
of the Loans;
(iv) FOURTH, to the payment PRO RATA of the principal balance
then owing on the outstanding Loans;
(v) FIFTH, to the payment to the Lenders of any amounts then
accrued and unpaid under sections 2.9, 2.10 and 5.5 hereof, and if such
proceeds are insufficient to pay such amounts in full, to the payment
of such amounts PRO RATA;
(vi) SIXTH, to the payment PRO RATA of all other amounts owed
by the Borrower to the Agents or any Lender under this Agreement or any
other Credit Document, and if such proceeds are insufficient to pay
such amounts in full, to the payment of such amounts PRO RATA; and
(vii) FINALLY, any remaining surplus after all of the
Obligations have been paid in full, to the Borrower or to whomsoever
shall be lawfully entitled thereto.
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SECTION 11. THE ADMINISTRATIVE AGENT.
11.1 APPOINTMENT. Each Lender hereby irrevocably designates and
appoints NCB as Administrative Agent to act as specified herein and in the other
Credit Documents, and each such Lender hereby irrevocably authorizes NCB as the
Administrative Agent for such Lender, to take such action on its behalf under
the provisions of this Agreement and the other Credit Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Credit
Documents, together with such other powers as are reasonably incidental thereto.
The Administrative Agent agrees to act as such upon the express conditions
contained in this section 11. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Administrative Agent shall not have any duties
or responsibilities, except those expressly set forth herein or in the other
Credit Documents, nor any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Administrative Agent.
The provisions of this section 11 are solely for the benefit of the
Administrative Agent, and the Lenders, and the Borrower and its Subsidiaries
shall not have any rights as a third party beneficiary of any of the provisions
hereof. In performing its functions and duties under this Agreement, the
Administrative Agent shall act solely as agent of the Lenders and does not
assume and shall not be deemed to have assumed any obligation or relationship of
agency or trust with or for the Borrower or any of its Subsidiaries.
11.2 DELEGATION OF DUTIES. The Administrative Agent may execute any of
its duties under this Agreement or any other Credit Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care except to the extent
otherwise required by section 11.3.
11.3 EXCULPATORY PROVISIONS. Neither the Administrative Agent nor any
of its respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such person under or in connection with this Agreement (except
for its or such person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or of its Subsidiaries or any
of their respective officers contained in this Agreement, any other Credit
Document or in any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent under or in
connection with, this Agreement or any other Credit Document or for any failure
of the Borrower or any Subsidiary of the Borrower or any of their respective
officers to perform its obligations hereunder or thereunder. The Administrative
Agent shall not be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement, or to inspect the properties, books or records of
the Borrower or any of its Subsidiaries. The Administrative Agent shall not be
responsible to any Lender for the effectiveness, genuineness,
77
validity, enforceability, collectibility or sufficiency of this Agreement or any
Credit Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statement or in any
financial or other statements, instruments, reports, certificates or any other
documents in connection herewith or therewith furnished or made by the
Administrative Agent to the Lenders or by or on behalf of the Borrower or any of
its Subsidiaries to the Administrative Agent or any Lender or be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained herein or therein or
as to the use of the proceeds of the Loans or of the existence or possible
existence of any Default or Event of Default.
11.4 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, facsimile transmission, telex or teletype message, statement, order or
other document or conversation believed by it, in good faith, to be genuine and
correct and to have been signed, sent or made by the proper person or persons
and upon advice and statements of legal counsel (including, without limitation,
counsel to the Borrower or any of its Subsidiaries), independent accountants and
other experts selected by the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Credit Document unless it shall first receive such advice
or concurrence of the Required Lenders as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Credit Documents in accordance with a request of the Required Lenders (or
all of the Lenders, or all of the Lenders (other than any Defaulting Lender), as
applicable, as to any matter which, pursuant to section 12.12, can only be
effectuated with the consent of all Lenders, or all Lenders (other than any
Defaulting Lender), as the case may be), and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders.
11.5 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give prompt notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; PROVIDED that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
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11.6 NON-RELIANCE. Each Lender expressly acknowledges that neither of
the Agents nor any of their officers, directors, employees, agents,
attorneys-in-fact or Affiliates have made any representations or warranties to
it and that no act by the Agents hereinafter taken, including any review of the
affairs of the Borrower or any of its Subsidiaries, shall be deemed to
constitute any representation or warranty by the Agents to any Lender. Each
Lender represents to each Agent that it has, independently and without reliance
upon the Agents, or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, assets, operations, property, financial and
other conditions, prospects and creditworthiness of the Borrower and its
Subsidiaries and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Agents, or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, assets, operations, property,
financial and other conditions, prospects and creditworthiness of the Borrower
and its Subsidiaries. The Agents shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
operations, assets, property, financial and other conditions, prospects or
creditworthiness of the Borrower or any of its Subsidiaries which may come into
the possession of the Agents or any of their officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
11.7 INDEMNIFICATION. The Lenders agree to indemnify each Agent in its
capacity as such ratably according to their respective Loans and Unutilized
Commitments, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, reasonable expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Obligations) be imposed on,
incurred by or asserted against each Agent in its capacity as such in any way
relating to or arising out of this Agreement or any other Credit Document, or
any documents contemplated by or referred to herein or the transactions
contemplated hereby or any action taken or omitted to be taken by the Agents
under or in connection with any of the foregoing, but only to the extent that
any of the foregoing is not paid by the Borrower; PROVIDED that no Lender shall
be liable to the Agents for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent resulting from either Agent's gross
negligence or willful misconduct. If any indemnity furnished to the Agents for
any purpose shall, in the opinion of either Agent, be insufficient or become
impaired, the Agents may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished. The agreements in this section 11.7 shall survive the payment of all
Obligations.
11.8 THE AGENTS IN INDIVIDUAL CAPACITY. The Agents and their Affiliates
may make Loans to, accept deposits from and generally engage in any kind of
business with the Borrower, its Subsidiaries and their Affiliates as though not
acting as an Agent hereunder. With respect to the Loans made by it and all
Obligations owing to it, each Agent shall have the same rights and
79
powers under this Agreement as any Lender and may exercise the same as though it
were not an Agent, and the terms "Lender" and "Lenders" shall include either
Agent in its individual capacity.
11.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as the Administrative Agent upon not less than 20 Business Days' notice
to the Lenders and the Borrower, with such registration to be effective only
upon the appointment and acceptance of a successor Administrative Agent as
provided below. The Administrative Agent may be removed as the Administrative
Agent for cause upon not less than 20 Business Days' notice to the
Administrative Agent and the Borrower from the Required Lenders. The Required
Lenders shall appoint from among the Lenders a successor Administrative Agent
for the Lenders, subject to prior approval by the Borrower if no Event of
Default has occurred and is continuing (such approval not to be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall include such successor agent effective upon its
appointment, and the resigning or removed Administrative Agent's rights, powers
and duties as the Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement. After the retiring or removed Administrative
Agent's resignation or removal hereunder as the Administrative Agent, the
provisions of this section 11 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent under this
Agreement.
11.10 OTHER AGENTS. Any Lender identified herein as the Syndication
Agent, a Joint Lead Arranger, a Co-Documentation Agent, a Managing Agent, a
Co-Agent or any other corresponding title, other than "Administrative Agent",
shall have no right, power, obligation, liability, responsibility or duty under
this Agreement or any other Credit Document except those applicable to all
Lenders as such. Each Lender acknowledges that it has not relied, and will not
rely, on any Lender so identified in deciding to enter into this Agreement or in
taking or not taking any action hereunder.
SECTION 12. MISCELLANEOUS.
12.1 PAYMENT OF EXPENSES ETC. (a) Whether or not the transactions
contemplated hereby are consummated, the Borrower agrees to pay (or reimburse
the Agents for) all reasonable out-of-pocket costs and expenses of the Agents in
connection with the negotiation, preparation, execution and delivery of the
Credit Documents and the documents and instruments referred to therein,
including, without limitation, the reasonable fees and disbursements of Mayer,
Brown & Platt, special counsel to the Agents.
(b) The Borrower agrees to pay (or reimburse the Agents, the Lenders
and their Affiliates for) all reasonable out-of-pocket costs and expenses of the
Agents, the Lenders and their Affiliates in connection with any amendment,
waiver or consent relating to any of the
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Credit Documents which is requested by any Credit Party, including, without
limitation, the reasonable fees and disbursements of Mayer, Brown & Platt,
special counsel to the Agents.
(c) The Borrower agrees to pay (or reimburse the Agents, the Lenders
and their Affiliates for) all reasonable out-of-pocket costs and expenses of the
Agents, the Lenders and their Affiliates in connection with the enforcement of
any of the Credit Documents or the other documents and instruments referred to
therein, including, without limitation, (i) the reasonable fees and
disbursements of Mayer, Brown & Platt, special counsel to the Agents, and (ii)
the reasonable fees and disbursements of any individual counsel to any Lender
(including allocated costs of internal counsel).
(d) Without limitation of the preceding section 12.1(c), in the event
of the bankruptcy, insolvency, rehabilitation or other similar proceeding in
respect of the Borrower or any of its Subsidiaries, the Borrower agrees to pay
all costs of collection and defense, including reasonable attorneys' fees in
connection therewith and in connection with any appellate proceeding or
post-judgment action involved therein, which shall be due and payable together
with all required service or use taxes.
(e) The Borrower agrees to pay and hold the Agents, each of the Lenders
harmless from and against any and all present and future stamp and other similar
taxes with respect to the foregoing matters and save each such Agent and each of
the Lenders harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable to
any such indemnified person) to pay such taxes.
(f) The Borrower agrees to indemnify the Agents, each Lender, and their
respective officers, directors, trustees, employees, representatives, agents and
Affiliates (collectively, the "INDEMNITEES") from and hold each of them harmless
against any and all losses, liabilities, claims, damages or expenses reasonably
incurred by any of them as a result of, or arising out of, or in any way related
to, or by reason of
(i) any investigation, litigation or other proceeding (whether
or not any Lender is a party thereto) related to the entering into
and/or performance of any Credit Document or the use of the proceeds of
any Loans hereunder or the consummation of any transactions
contemplated in any Credit Document, other than any such investigation,
litigation or proceeding arising out of transactions solely between any
of the Lenders or the Agents, transactions solely involving the
assignment by a Lender of all or a portion of its Loans and
Commitments, or the granting of participations therein, as provided in
this Agreement, or arising solely out of any examination of a Lender by
any regulatory or other governmental authority having jurisdiction over
it, or
(ii) the actual or alleged presence of Hazardous Materials in
the air, surface water or groundwater or on the surface or subsurface
of any Real Property owned, leased or at any time operated by the
Borrower or any of its Subsidiaries, the release, generation, storage,
transportation, handling or disposal of Hazardous Materials at any
location,
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whether or not owned or operated by the Borrower or any of its
Subsidiaries, if the Borrower or any such Subsidiary could have or is
alleged to have any responsibility in respect thereof, the
non-compliance of any such Real Property with foreign, federal, state
and local laws, regulations and ordinances (including applicable
permits thereunder) applicable thereto, or any Environmental Claim
asserted against the Borrower or any of its Subsidiaries, in respect of
any such Real Property,
including, in each case, without limitation, the reasonable documented fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding (but excluding any such losses, liabilities,
claims, damages or expenses to the extent incurred by reason of the gross
negligence or willful misconduct of the person to be indemnified or of any other
Indemnitee who is such person or an Affiliate of such person). To the extent
that the undertaking to indemnify, pay or hold harmless any person set forth in
the preceding sentence may be unenforceable because it is violative of any law
or public policy, the Borrower shall make the maximum contribution to the
payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law.
12.2 RIGHT OF SETOFF. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, each Lender is hereby authorized at any time or from time to time,
without presentment, demand, protest or other notice of any kind to the Borrower
or to any other person, any such notice being hereby expressly waived, to set
off and to appropriate and apply any and all deposits (general or special) and
any other Indebtedness at any time held or owing by such Lender (including,
without limitation, by branches, agencies and Affiliates of such Lender wherever
located) to or for the credit or the account of the Borrower against and on
account of the Obligations and liabilities of the Borrower to such Lender under
this Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations the Borrower purchased by such Lender
pursuant to section 12.4(c), and all other claims of any nature or description
arising out of or connected with this Agreement or any other Credit Document,
irrespective of whether or not such Lender shall have made any demand hereunder
and although said Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured. Each Lender agrees to promptly notify the Borrower
after any such set off and application; PROVIDED that the failure to give such
notice shall not affect the validity of such set off and application.
12.3 NOTICES. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile or electronic e-mail transmission or
cable communication) and mailed, telegraphed, telexed, transmitted, cabled or
delivered, if to the Borrower, at 1000 Lakeside Avenue, Cleveland, Ohio 44114,
attention: D. Thomas George, Vice President and Treasurer (facsimile: (216)
875-7237); if to any Lender at its address specified for such Lender on Annex I
hereto or the Assignment Agreement or Designation Agreement pursuant to which it
became a Lender hereunder; if to the Administrative Agent, at its Notice Office;
or at such other address as shall
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be designated by any party in a written notice to the other parties hereto. All
such notices and communications shall be mailed, telegraphed, telexed,
telecopied, transmitted or cabled or sent by overnight courier, and shall be
effective when received.
12.4 BENEFIT OF AGREEMENT. (a) SUCCESSORS AND ASSIGNS GENERALLY. This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective successors and assigns; PROVIDED that
the Borrower may not assign or transfer any of its rights or obligations
hereunder without the prior written consent of all the Lenders (other than any
Defaulting Lender); and PROVIDED, FURTHER, that any assignment by a Lender of
its rights and obligations hereunder shall be effected in accordance with
section 12.4(c).
(b) GRANT OF PARTICIPATIONS BY LENDERS. Notwithstanding the foregoing,
each Lender may, without notice to or the consent of the Borrower or the
Administrative Agent, at any time grant participations in any of its rights
hereunder or under any of the Notes to (x) an Affiliate of such Lender which is
a commercial bank, financial institution or other "accredited investor" (as
defined in SEC Regulation D), (y) another Lender which is not a Defaulting
Lender, or (z) one or more Eligible Transferees; PROVIDED that in the case of
any such participation,
(i) except as provided below, the participant shall not have
any rights under this Agreement or any of the other Credit Documents,
including rights of consent, approval or waiver (the participant's
rights against such Lender in respect of such participation to be those
set forth in the agreement executed by such Lender in favor of the
participant relating thereto),
(ii) such Lender's obligations under this Agreement
(including, without limitation, its Commitment hereunder) shall remain
unchanged,
(iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations,
(iv) such Lender shall remain the holder of any Note for all
purposes of this Agreement and
(v) the Borrower, the Administrative Agent, and the other
Lenders shall continue to deal solely and directly with the selling
Lender in connection with such Lender's rights and obligations under
this Agreement, and all amounts payable by the Borrower hereunder shall
be determined as if such Lender had not sold such participation, except
that the participant shall be entitled to the benefits of sections 2.9,
2.10 and 5.5 of this Agreement to the extent that such Lender would be
entitled to such benefits if the participation had not been entered
into or sold, and
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PROVIDED, FURTHER, that no Lender shall transfer, grant or sell any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (1) change any date upon which a
mandatory and automatic reduction in any Commitment in which such Participant is
participating is scheduled to be made, or change the amount thereof, (2) change
any date upon which an installment payment of any Loans in which such
Participant is participating is scheduled to be made, or change the amount
thereof, (3) extend the final scheduled maturity of the Loans in which such
participant is participating (it being understood that any waiver of the making
of, or the application of, any mandatory prepayment to such Loans shall not
constitute an extension of the final maturity date thereof), (4) reduce the rate
or extend the time of payment of interest or Fees on any such Loan or Commitment
(except in connection with a waiver of the applicability of any post-default
increase in interest rates), (5) reduce the principal amount of any such Loan,
(6) increase such participant's participating interest in any Commitment over
the amount thereof then in effect, (7) release any Credit Party from its
obligations under the Subsidiary Guaranty, except strictly in accordance with
the provisions of the Credit Documents, or (8) consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement. Each Lender that sells a participation in any of its rights hereunder
or under any of the Notes shall, as agent of the Borrower solely for the purpose
of this section 12.4(b), record in book entries maintained by such Lender the
name and the amount of the participation of each participant entitled to receive
payments in respect of such participations.
(c) ASSIGNMENTS BY LENDERS. Notwithstanding the foregoing, (x) any
Lender may assign all or a fixed portion of its Loans and/or Commitment, and its
rights and obligations hereunder to another Lender that is not a Defaulting
Lender, or to an Affiliate of any Lender (including itself) and which is not a
Defaulting Lender and which is a commercial bank, financial institution or other
"accredited investor" (as defined in SEC Regulation D), and (y) any Lender may
assign all, or if less than all, a fixed portion, equal to at least $5,000,000
in the aggregate for the assigning Lender or assigning Lenders, of its Loans
and/or Commitment and its rights and obligations hereunder to one or more
Eligible Transferees, each of which assignees shall become a party to this
Agreement as a Lender by execution of an Assignment Agreement; PROVIDED that,
(i) in the case of any assignment of a portion of any Loans
and/or Commitment of a Lender, such Lender shall retain a minimum fixed
portion of all Loans and Commitments equal to at least $5,000,000;
(ii) at the time of any such assignment, Annex I shall be
deemed modified to reflect the Commitments of such new Lender and of
the existing Lenders;
(iii) upon surrender of the old Notes, new Notes will be
issued, at the Borrower's expense, to such new Lender and to the
assigning Lender, such new Notes to be in conformity with the
requirements of section 2.4 (with appropriate modifications) to the
extent needed to reflect the revised Commitments;
84
(iv) in the case of clause (y) only, the consent of the
Administrative Agent and, so long as no Default or Event of Default
shall have occurred or be continuing, the Borrower shall be required in
connection with any such assignment (which consent, in each case, shall
not be unreasonably withheld or delayed);
(v) the Administrative Agent shall receive at the time of each
such assignment, from the assigning or assignee Lender, the payment of
a non-refundable assignment fee of $3,500; PROVIDED, that no such
assignment fee shall be payable in the case of an assignee which is
already a Lender or an Affiliate of a Lender;
PROVIDED, FURTHER, that such transfer or assignment will not be effective until
the Assignment Agreement in respect thereof is recorded by the Administrative
Agent on the Lender Register maintained by it as provided herein.
To the extent of any assignment pursuant to this section 12.4(c), the
assigning Lender shall be relieved of its obligations hereunder with respect to
its assigned Commitments.
At the time of each assignment pursuant to this section 12.4(c) to a
person which is not already a Lender hereunder and which is not a United States
person (as such term is defined in section 7701(a)(30) of the Code) for Federal
income tax purposes, the respective assignee Lender shall provide to the
Borrower and the Administrative Agent the appropriate Internal Revenue Service
Forms (and, if applicable a Lender Tax Certificate) described in section 5.5(c).
To the extent that an assignment of all or any portion of a Lender's Commitment
and related outstanding Obligations pursuant to this section 12.4(c) would, at
the time of such assignment, result in increased costs under section 2.9 from
those being charged by the respective assigning Lender prior to such assignment,
then the Borrower shall not be obligated to pay such increased costs (although
the Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
assignment).
Nothing in this section 12.4(c) shall prevent or prohibit (i) any
Lender which is a bank, trust company or other financial institution from
pledging its Notes or Loans to a Federal Reserve Bank in support of borrowings
made by such Lender from such Federal Reserve Bank, or (ii) any Lender which is
a trust, limited liability company, mutual fund, partnership or other investment
company from pledging its Notes or Loans to a trustee or agent for the benefit
of holders of certificates or debt securities issued by it. No such pledge, or
any assignment pursuant to or in lieu of an enforcement of such a pledge, shall
relieve the transferor Lender from its obligations hereunder.
(d) DESIGNATED BIDDER PROVISIONS. (i) Notwithstanding the foregoing,
each Lender may assign to one or more banks or other entities any Competitive
Bid Note or Notes held by it. In addition, each Lender (other than the
Designated Bidders) may designate one or more banks or other entities to have a
right to make Competitive Bid Loans as a Lender pursuant to section 2.3;
PROVIDED that (a) no such Lender shall be entitled to make more than three such
designations, (b) each such Lender making one or more of such designations shall
retain the
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right to make Competitive Bid Loans as a Lender pursuant to section 2.3, (C)
each such designation shall be to a Designated Bidder, and (D) the parties to
each such designation shall execute and deliver to the Administrative Agent, for
its acceptance and recording in the Lender Register, a Designation Agreement.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Designation Agreement, the designee thereunder
shall be a party hereto with a right to make Competitive Bid Loans as a Lender
pursuant to section 2.3 and the obligations related thereto.
(ii) By executing and delivering a Designation Agreement, the Lender
making the designation thereunder and its designee thereunder confirm and agree
with each other and the other parties hereto as follows: (A) such Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (B) such Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower or any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (C) such designee confirms that it has received a copy of this
Agreement, together with copies of the financial statements referred to in
section 7.8(a) and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into the
Designation Agreement; (D) such designee will, independently and without
reliance upon the Administrative Agent, such designating Lender or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (E) such designee confirms that it is a Designated
Bidder; (F) such designee appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; and (G) such
designee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
(iii) Upon its receipt of a Designation Agreement executed by a
designating Lender and a designee representing that it is a Designated Bidder,
the Administrative Agent shall, if such Designation Agreement has been properly
completed, (A) accept such Designation Agreement, (B) record the information
contained therein in the Lender Register and (C) give prompt notice thereof to
the Borrower.
(e) NO SEC REGISTRATION OR BLUE SKY COMPLIANCE. Notwithstanding any
other provisions of this section 12.4, no transfer or assignment of the
interests or obligations of any Lender hereunder or any grant of participation
therein shall be permitted if such transfer, assignment or grant would require
the Borrower to file a registration statement with the SEC or to qualify the
Loans under the "Blue Sky" laws of any State.
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(f) REPRESENTATIONS OF LENDERS. Each Lender initially party to this
Agreement hereby represents, and each person that became a Lender pursuant to an
assignment permitted by this section 12.4 will, upon its becoming party to this
Agreement, represent that it is a commercial bank, financial institution or
other "accredited investor" (as defined in SEC Regulation D) which makes or
acquires loans in the ordinary course of its business and that it will make or
acquire loans for its own account in the ordinary course of such business;
PROVIDED that subject to the preceding sections 12.4(b), (c) and (d), the
disposition of any promissory notes or other evidences of or interests in
Indebtedness held by such Lender shall at all times be within its exclusive
control.
(g) GRANTS BY LENDERS TO SPVS. (i) Notwithstanding anything to the
contrary contained herein, any Lender (a "DESIGNATING LENDER") may grant to a
special purpose funding vehicle (an "SPV"), identified as such in writing from
time to time by the Designating Lender to the Administrative Agent, the Borrower
and the other Lenders, the option to provide to the Borrower all or any part of
any Loan that such Designating Lender would otherwise be obligated to make to
the Borrower pursuant to this Agreement; PROVIDED that (i) nothing herein shall
constitute a commitment by any SPV to make any Loan, (ii) if an SPV elects not
to exercise such option or otherwise fails to provide all or any part of such
Loan, the Designating Lender shall be obligated to make such Loan pursuant to
the terms hereof, and (iii) the Designating Lender shall remain liable for any
indemnity or other payment obligation with respect to its Commitment hereunder.
The making of a Loan by an SPV hereunder shall utilize the Commitment of the
Designating Lender to the same extent, and as if, such Loan were made by such
Designating Lender.
(ii) As to any Loans or portion thereof made by it, each SPV shall have
all the rights that a Lender making such Loans or portion thereof would have had
under this Agreement; PROVIDED that each SPV shall have granted to its
Designating Lender an irrevocable power of attorney, to deliver and receive all
communications and notices under this Agreement (and any other Credit Documents)
and to exercise on such SPV's behalf, all of such SPV's voting rights under this
Agreement. No additional Note shall be required to evidence the Loans or portion
thereof made by an SPV; and the related Designating Lender shall be deemed to
hold its Note as agent for such SPV to the extent of the Loans or portion
thereof funded by such SPV. In addition, any payments for the account of any SPV
shall be paid to its Designating Lender as agent for such SPV.
(iii) Each party hereto hereby agrees that no SPV shall be liable for
any indemnity or payment under this Agreement for which a Lender would otherwise
be liable. In furtherance of the foregoing, each party hereto hereby agrees
(which agreement shall survive the termination of this Agreement) that, prior to
the date that is one year and one day after the payment in full of all
outstanding commercial paper or other senior indebtedness of any SPV, it will
not institute against, or join any other person in instituting against, such SPV
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States or any State thereof.
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(iv) In addition, notwithstanding anything to the contrary contained in
this section 12.4, any SPV may (A) with notice to, but without the prior written
consent of, the Borrower and the Administrative Agent and without paying any
processing fee therefor, assign all or a portion of its interests in any Loans
to the Designating Lender or to any financial institutions providing liquidity
and/or credit support to or for the account of such SPV to support the funding
or maintenance of Loans and (B) disclose on a confidential basis any non-public
information relating to its Loans to any rating agency, commercial paper dealer
or provider of any surety, guarantee or credit or liquidity enhancements to such
SPV. This section 12.4(g) may not be amended without the written consent of any
Designating Lender affected thereby.
12.5 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of
the Administrative Agent or any Lender in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of dealing
between the Borrower and the Administrative Agent or any Lender shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. No notice to or demand on the Borrower in any case
shall entitle the Borrower to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the rights of the
Administrative Agent or the Lenders to any other or further action in any
circumstances without notice or demand. Without limiting the generality of the
foregoing, the making of a Loan shall not be construed as a waiver of any
Default or Event of Default, regardless of whether the Administrative Agent may
have had notice or knowledge of such Default or Event of Default at the time.
The rights and remedies herein expressly provided are cumulative and not
exclusive of any rights or remedies which the Administrative Agent or any Lender
would otherwise have.
12.6 PAYMENTS PRO RATA; SHARING OF SETOFFS, ETC. (a) The Administrative
Agent agrees that promptly after its receipt of each payment from or on behalf
of the Borrower in respect of any Obligations, it shall distribute such payment
to the Lenders (other than any Lender that has expressly waived in writing its
right to receive its PRO RATA share thereof) PRO RATA based upon their
respective shares, if any, of the Obligations with respect to which such payment
was received. As to any such payment received by the Administrative Agent prior
to 1:00 P.M. (local time at the Payment Office) in funds which are immediately
available on such day, the Administrative Agent will use all reasonable efforts
to distribute such payment in immediately available funds on the same day to the
Lenders as aforesaid.
(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans or Fees, of a sum which with respect to the related sum or sums
received by other Lenders is in a greater proportion than the total of such
Obligation then owed and due to such Lender bears to the total of such
Obligation then owed and due to all of the Lenders
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immediately prior to such receipt, THEN such Lender receiving such excess
payment shall purchase for cash without recourse or warranty from the other
Lenders an interest in the Obligations to such Lenders in such amount as shall
result in a proportional participation by all of the Lenders in such amount;
PROVIDED that (i) if all or any portion of such excess amount is thereafter
recovered from such Lender, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest, and (ii)
the provisions of this section 12.6(b) shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement, or any payment obtained by a Lender as consideration
for the assignment of or sale of a participation in any of its Loans to any
assignee or participant pursuant to section 12.4, other than to the Borrower or
any Subsidiary or Affiliate thereof (as to which the provisions of this section
12.6(b) shall apply). The Borrower consents to the foregoing and agrees, to the
extent it may effectively do so under applicable law, that any Lender acquiring
a participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding sections 12.6(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Lenders which are not Defaulting Lenders, as opposed to
Defaulting Lenders.
12.7 CALCULATIONS; COMPUTATIONS. (a) The financial statements to be
furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrower to the Lenders); PROVIDED that if at any time the computations
determining compliance with section 9 utilize accounting principles different
from those utilized in the financial statements furnished to the Lenders, such
computations shall set forth in reasonable detail a description of the
differences and the effect upon such computations.
(b) All computations of interest on Loans hereunder and all
computations of Facility Fees and other Fees hereunder shall be made on the
actual number of days elapsed over a year of 360 days.
12.8 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) HIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. TO THE
FULLEST EXTENT PERMITTED BY LAW, THE BORROWER HEREBY UNCONDITIONALLY AND
IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY JURISDICTION OTHER
THAN THE STATE OF NEW YORK GOVERNS THIS AGREEMENT OR ANY OF THE OTHER CREDIT
DOCUMENTS. Any legal action or proceeding with respect to this Agreement or any
other Credit Document may be brought in the courts of the State of New York,
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New York County, and of the United States District Court for the Southern
District of New York, and, by execution and delivery of this Agreement, the
Borrower hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts. The
Borrower hereby further irrevocably consents to the service of process out of
any of the aforementioned courts in any such action or proceeding by the mailing
of copies thereof by registered or certified mail, postage prepaid, to the
Borrower at its address for notices pursuant to section 12.3, such service to
become effective 30 days after such mailing or at such earlier time as may be
provided under applicable law. Nothing herein shall affect the right of the
Administrative Agent or any Lender to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against
the Borrower in any other jurisdiction.
(b) The Borrower hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in section 12.8(a) above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO HEREBY (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH.
12.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same agreement. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
12.10 EFFECTIVENESS; INTEGRATION. This Agreement shall become effective
on the date (the "EFFECTIVE DATE") on which the Borrower and each of the Lenders
shall have signed a copy hereof (whether the same or different copies) and shall
have delivered the same to the Administrative Agent at the Notice Office of the
Administrative Agent or, in the case of the Lenders, shall have given to the
Administrative Agent telephonic (confirmed in writing), written
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telex or facsimile transmission notice (actually received) at such office that
the same has been signed and mailed to it. This Agreement, the other Credit
Documents and any separate letter agreements with respect to fees payable to the
Administrative Agent, for its own account and benefit and/or for the account,
benefit of, and distribution to, the Lenders, constitute the entire contract
among the parties relating to the subject matter hereof and thereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof or thereof.
12.11 HEADINGS DESCRIPTIVE. The headings of the several sections and
other portions of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.
12.12 AMENDMENT OR WAIVER. Neither this Agreement nor any terms hereof
or thereof may be changed, waived, discharged or terminated UNLESS such change,
waiver, discharge or termination is in writing signed by the Borrower and the
Required Lenders; PROVIDED that no such change, waiver, discharge or termination
shall, without the consent of each Lender affected thereby,
(a) change any date upon which a mandatory and automatic
reduction in any Commitment of such Lender is scheduled to be made, or
change the amount thereof,
(b) change any date upon which an installment payment of any
Loans made by such Lender is scheduled to be made, or change the amount
thereof,
(c) extend the final scheduled maturity of any Commitment or
Loan of such Lender (it being understood that any waiver of the making
of, or the application of, any mandatory prepayment to such Loans shall
not constitute an extension of the final maturity date thereof),
(d) reduce the rate or extend the time of payment of interest
or Fees on any Loan or Commitment of such Lender (except in connection
with a waiver of the applicability of any post-default increase in
interest rates),
(e) reduce the principal amount of any Loan of any Lender,
(f) increase such Lender's Commitment over the amount thereof
then in effect,
(g) release the Borrower from any obligations as a guarantor
of its Subsidiaries' obligations under any Credit Document,
(h) release (i) any Credit Party from the Subsidiary Guaranty
or any pledge or security agreement, or (ii) all or substantially all
of the collateral pledged pursuant to the
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terms of this Agreement, in each case except strictly in accordance
with the provisions of the Credit Documents,
(i) change the definition of the term "Change of Control" or
any of the provisions of section 4.3 or 5.2 which are applicable upon a
Change of Control,
(j) amend, modify or waive any provision of this section
12.12, or section 8.14, 11.7, 12.1, 12.4, 12.6 or 12.7(b), or any other
provision of any of the Credit Documents pursuant to which the consent
or approval of all Lenders is by the terms of such provision explicitly
required,
(k) reduce the percentage specified in, or otherwise modify,
the definition of Required Lenders, or
(l) consent to the assignment or transfer by the Borrower of
any of its rights and obligations under this Agreement; and
PROVIDED, FURTHER, that no change, waiver or other modification affecting the
rights and benefits of a Lender and not all Lenders in a like or similar manner,
shall be made without the written consent of such Lender. No provision of
section 11 may be amended without the consent of the Administrative Agent.
12.13 SURVIVAL OF INDEMNITIES. All indemnities set forth herein
including, without limitation, in section 2.9, 2.10, 11.7 or 12.1 shall survive
the execution and delivery of this Agreement and the making and repayment of
Loans.
12.14 DOMICILE OF LOANS. Each Lender may transfer and carry its Loans
at, to or for the account of any branch office, subsidiary or affiliate of such
Lender; PROVIDED that the Borrower shall not be responsible for costs arising
under section 2.9 resulting from any such transfer (other than a transfer
pursuant to section 2.11) to the extent not otherwise applicable to such Lender
prior to such transfer.
12.15 CONFIDENTIALITY. (a) Each of the Administrative Agent and the
Lenders agrees to maintain the confidentiality of the Confidential Information
(as defined below), EXCEPT that Confidential Information may be disclosed (1) to
its and its Affiliates' directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
persons to whom such disclosure is made will be informed of the confidential
nature of such Confidential Information and instructed to keep such Confidential
Information confidential), (2) to any direct or indirect contractual
counterparty in any swap, hedge or similar agreement (or to any such contractual
counterparty's professional advisor), so long as such contractual counterparty
(or such professional advisor) agrees to be bound by the provisions of this
section 12.15, (3) to the extent requested by any regulatory authority, (4) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, it being understood and agreed that unless prohibited by
law or court order any such person will use
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reasonable efforts to advise the Borrower reasonably in advance of any required
disclosure to be made pursuant to subpoena, discovery proceedings in any
litigation or governmental investigation or any court order, (5) to any other
party to this Agreement, (6) to any other creditor of the Borrower or any other
Credit Party which is a direct or intended beneficiary of any of the Credit
Documents, (7) in connection with the exercise of any remedies hereunder or
under any of the other Credit Documents, or any suit, action or proceeding
relating to this Agreement or any of the other Credit Documents or the
enforcement of rights hereunder or thereunder, (8) subject to an agreement
containing provisions substantially the same as those of this section 12.15, to
any assignee of or participant in, or any prospective assignee of or participant
in, any of its rights or obligations under this Agreement, (9) with the consent
of the Borrower, or (10) to the extent such Confidential Information (i) becomes
publicly available other than as a result of a breach of this section 12.15, or
(ii) becomes available to the Administrative Agent or any Lender on a
nonconfidential basis from a source other than the Borrower without a duty of
confidentiality to the Borrower being violated.
(b) For the purposes of this section 12.15, "CONFIDENTIAL INFORMATION"
means all information received from or on behalf of the Borrower and/or its
Subsidiaries, or obtained by the Administrative Agent or any Lender based on an
inspection or review of the books and records of the Borrower and/or its
Subsidiaries, relating to the Borrower, its Subsidiaries or their business,
other than any such information that is available to the Administrative Agent or
any Lender on a nonconfidential basis prior to disclosure by the Borrower;
PROVIDED that, in the case of information received or obtained from or on behalf
of the Borrower and/or any of its Subsidiaries after the date hereof, such
information is clearly identified at the time of delivery or the time obtained
as confidential.
(c) Any person required to maintain the confidentiality of Confidential
Information as provided in this section 12.15 shall be considered to have
complied with its obligation to do so if such person has exercised the same
degree of care to maintain the confidentiality of such Confidential Information
as such person would accord to its own confidential information. The Borrower
hereby agrees that the failure of the Administrative Agent or any Lender to
comply with the provisions of this section 12.15 shall not relieve the Borrower,
or any other Credit Party, of any of its obligations under this Agreement or any
of the other Credit Documents.
12.16 LENDER REGISTER. The Borrower hereby designates the
Administrative Agent to serve as its agent, solely for purposes of this section
12.16, to maintain a register (the "LENDER REGISTER") on or in which it will
record the names and addresses of the Lenders, and the Commitments from time to
time of each of the Lenders, the Loans made to the Borrower by each of the
Lenders and each repayment and prepayment in respect of the principal amount of
such Loans of each such Lender. Failure to make any such recordation, or (absent
manifest error) any error in such recordation, shall not affect the Borrower's
obligations in respect of such Loans. With respect to any Lender, the transfer
of the Commitment of such Lender and the rights to the principal of, and
interest on, any Loan made pursuant to such Commitment shall not be effective
until such transfer is recorded on the Lender Register maintained by the
Administrative Agent
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with respect to ownership of such Commitment and Loans and prior to such
recordation all amounts owing to the transferor with respect to such Commitment
and Loans shall remain owing to the transferor. The registration of assignment
or transfer of all or part of any Commitments and Loans shall be recorded by the
Administrative Agent on the Lender Register only upon the acceptance by the
Administrative Agent of a properly executed and delivered Assignment Agreement
pursuant to section 12.4(c). The Borrower agrees to indemnify the Administrative
Agent from and against any and all losses, claims, damages and liabilities of
whatsoever nature which may be imposed on, asserted against or incurred by the
Administrative Agent in performing its duties under this section 12.16, except
to the extent attributable to the gross negligence or wilful misconduct of the
Administrative Agent. The Lender Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
12.17 INTENTIONALLY OMITTED.
12.18 GENERAL LIMITATION OF LIABILITY. No claim may be made by the
Borrower, any Lender, the Administrative Agent or any other person against the
Administrative Agent or any other Lender or the Affiliates, directors, officers,
employees, attorneys or agents of any of them for any damages other than actual
compensatory damages in respect of any claim for breach of contract or any other
theory of liability arising out of or related to the transactions contemplated
by this Agreement or any of the other Credit Documents, or any act, omission or
event occurring in connection therewith; and each of the Borrower, each Lender
and the Administrative Agent hereby, to the fullest extent permitted under
applicable law, waives, releases and agrees not to sue or counterclaim upon any
such claim for any special, consequential or punitive damages, whether or not
accrued and whether or not known or suspected to exist in its favor.
12.19 NO DUTY. All attorneys, accountants, appraisers, consultants and
other professional persons (including the firms or other entities on behalf of
which any such person may act) retained by the Administrative Agent or any
Lender with respect to the transactions contemplated by the Credit Documents
shall have the right to act exclusively in the interest of the Administrative
Agent or such Lender, as the case may be, and shall have no duty of disclosure,
duty of loyalty, duty of care, or other duty or obligation of any type or nature
whatsoever to the Borrower, to any of its Subsidiaries, or to any other person,
with respect to any matters within the scope of such representation or related
to their activities in connection with such representation. The Borrower agrees,
on behalf of itself and its Subsidiaries, not to assert any claim or
counterclaim against any such persons with regard to such matters, all such
claims and counterclaims, now existing or hereafter arising, whether known or
unknown, foreseen or unforeseeable, being hereby waived, released and forever
discharged.
12.20 LENDERS AND AGENT NOT FIDUCIARY TO BORROWER, ETC. The
relationship among the Borrower and its Subsidiaries, on the one hand, and the
Administrative Agent and the Lenders, on the other hand, is solely that of
debtor and creditor, and the Administrative Agent and the Lenders have no
fiduciary or other special relationship with the Borrower and its
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Subsidiaries, and no term or provision of any Credit Document, no course of
dealing, no written or oral communication, or other action, shall be construed
so as to deem such relationship to be other than that of debtor and creditor.
12.21 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties herein shall survive the making of Loans, the execution and
delivery of this Agreement, the Notes and the other documents the forms of which
are attached as Exhibits hereto, the issue and delivery of the Notes, any
disposition thereof by any holder thereof, and any investigation made by the
Administrative Agent or any Lender or any other holder of any of the Notes or on
its behalf. All statements contained in any certificate or other document
delivered to the Administrative Agent or any Lender or any holder of any Notes
by or on behalf of the Borrower or of its Subsidiaries pursuant hereto or
otherwise specifically for use in connection with the transactions contemplated
hereby shall constitute representations and warranties by the Borrower
hereunder, made as of the respective dates specified therein or, if no date is
specified, as of the respective dates furnished to the Administrative Agent or
any Lender.
12.22 SEVERABILITY. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
12.23 INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
independent effect so that if a particular action, event, condition or
circumstance is not permitted by any of such covenants, the fact that it would
be permitted by an exception to, or would otherwise be within the limitations or
restrictions of, another covenant, shall not avoid the occurrence of a Default
or an Event of Default if such action is taken or event, condition or
circumstance exists.
12.24 NO RELIANCE ON MARGIN STOCK. Each Lender represents to the
Administrative Agent and each of the other Lenders that it in good faith is not
relying upon any "margin stock" (as defined in Regulation U) as collateral in
the extension or maintenance of the credit provided for in this Agreement.
12.25 INTEREST RATE LIMITATION. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively the "CHARGES"), shall exceed the maximum
lawful rate (the "MAXIMUM RATE") which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this section shall be cumulated and the
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interest and Charges payable to such Lender in respect of other Loans or periods
shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Prime Rate to the date
of repayment, shall have been received by such Lender.
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IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
FERRO CORPORATION
BY:________________________
TITLE:
CREDIT SUISSE FIRST BOSTON,
INDIVIDUALLY AS A LENDER AND IN ITS
CAPACITIES AS A JOINT LEAD ARRANGER AND
THE SYNDICATION AGENT
BY:________________________
TITLE:
BY:________________________
TITLE:
NATIONAL CITY BANK,
INDIVIDUALLY AS A LENDER AND IN ITS
CAPACITIES AS A JOINT LEAD ARRANGER AND
THE ADMINISTRATIVE AGENT
BY:________________________
TITLE:
BANCA NAZIONALE DEL LAVORO S.P.A.,
NEW YORK BRANCH,
INDIVIDUALLY AS A LENDER AND IN ITS
CAPACITY AS A CO-AGENT
BY:____________________________________
TITLE:
BY:____________________________________
TITLE:
BANK HAPOALIM B.M,
AS A LENDER
BY:________________________
TITLE:
THE BANK OF NEW YORK,
INDIVIDUALLY AS A LENDER AND IN ITS
CAPACITY AS A CO-AGENT
BY:________________________
TITLE:
THE BANK OF TOKYO-MITSUBISHI,
LTD. CHICAGO BRANCH,
INDIVIDUALLY AS A LENDER AND IN ITS
CAPACITY AS A MANAGING AGENT
BY:________________________
TITLE:
CITICORP USA, INC.,
INDIVIDUALLY AS A LENDER AND IN ITS
CAPACITY AS A CO-DOCUMENTATION AGENT
BY:________________________
TITLE:
FIFTH THIRD BANK,
INDIVIDUALLY AS A LENDER AND IN ITS
CAPACITY AS A CO-AGENT
BY:________________________
TITLE:
BAYERISCHE HYPO- UND
VEREINSBANK AG, NEW YORK
BRANCH,
INDIVIDUALLY AS A LENDER AND IN ITS
CAPACITY AS A CO-AGENT
BY:________________________
TITLE:
BY:________________________
TITLE:
KEYBANK NATIONAL ASSOCIATION,
INDIVIDUALLY AS A LENDER AND IN ITS
CAPACITY AS A CO-DOCUMENTATION AGENT
BY:________________________
TITLE:
MELLON BANK, N.A.,
INDIVIDUALLY AS A LENDER AND IN ITS
CAPACITY AS A CO-AGENT
BY:________________________
TITLE:
NATIONAL AUSTRALIA BANK
LIMITED, A.C.N. 004044937,
INDIVIDUALLY AS A LENDER AND IN ITS
CAPACITY AS A MANAGING AGENT
BY:________________________
TITLE:
THE NORINCHUKIN BANK,
AS A LENDER
BY:________________________
TITLE:
THE NORTHERN TRUST COMPANY,
AS A LENDER
BY:________________________
TITLE:
SUNTRUST BANK,
INDIVIDUALLY AS A LENDER AND IN ITS
CAPACITY AS A CO-AGENT
BY:________________________
TITLE: