Exhibit 10(R)
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is made as of the 24th day of April, 2002 by and
among:
(i) LINCOLN ELECTRIC HOLDINGS, INC., an Ohio corporation ("Holdings"), THE
LINCOLN ELECTRIC COMPANY, an Ohio corporation ("Lincoln"), LINCOLN ELECTRIC
INTERNATIONAL HOLDING COMPANY, a Delaware corporation ("International"), HARRIS
CALORIFIC, INC., a Delaware corporation ("Harris"), and LINCOLN GLOBAL, INC., a
Delaware corporation ("Global" and with Harris, International, Lincoln and
Holdings, each an "Borrower" and, collectively, the "Borrowers");
(ii) The financial institutions named in Annex A attached hereto and made a part
hereof and their successors and assigns (hereinafter sometimes collectively
called the "Lenders" and each individually a "Lender"); and
(iii) KEYBANK NATIONAL ASSOCIATION, a national banking association, Cleveland,
Ohio, in its capacity as letter of credit issuer and its successors and assigns
(the "Letter of Credit Issuer"); and
(iv) KEYBANK NATIONAL ASSOCIATION, a national banking association, Cleveland,
Ohio, as Administrative Agent for the Lenders under this Agreement (hereinafter
sometimes called the "Agent").
RECITALS:
The Borrowers are indebted to certain banks or lending institutions
under and pursuant to the Existing Credit Agreement (defined below).
The Borrowers have requested the Lenders to extend credit to the
Borrowers in order to enable the Borrowers to borrow on a revolving credit basis
and to have letters of credit issued at their request, on and after the date
hereof and at any time and from time to time during the Commitment Period
(defined below), in an aggregate principal amount not in excess of $125,000,000
at any time outstanding. The proceeds of such loans and credits are to be used
(a) to repay sums owing under and pursuant to the Existing Credit Agreement, (b)
for the general corporate working capital purposes of Holdings and its
Subsidiaries and (c) for other general corporate purposes, including, without
limitation, but subject to the terms and conditions hereinafter set forth, the
acquisition of other businesses. The Lenders are willing to extend such credit
to the Borrowers on the terms and subject to the conditions herein set forth.
AGREEMENTS:
NOW, THEREFORE, in consideration of the foregoing Recitals and the
mutual agreements hereinafter set forth, the Borrowers, the Lenders and the
Agent hereby agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 DEFINITIONS. As used in this Agreement, the following
capitalized terms shall have the following meanings:
"ACCRUAL PERIOD" shall mean (i) the period commencing with the first
day of the Commitment Period and ending on the close of business May 31, 2002,
and (ii) thereafter, each of the following successive periods during the
Commitment Period commencing with each, as the case may be, Fee Adjustment Date
or Interest Adjustment Date during the Commitment Period, commencing with the
Fee Adjustment Date and Interest Adjustment Date which are June 1, 2002:
June 1 through August 31, inclusive
September 1 through November 30, inclusive
December 1 through March 31, inclusive
April 1 through May 31, inclusive.
"ACQUISITION" shall mean and include (i) any acquisition on a going
concern basis (whether by purchase, lease or otherwise) of any facility and/or
business operated by any Person who is not a Subsidiary of Holdings, and (ii)
any acquisition of a majority of the outstanding equity or other similar
interests in any such Person (whether by merger, stock purchase or otherwise).
"ADJUSTED LIBOR" shall mean a rate per annum equal to the quotient
obtained (rounded upwards, if necessary, to the nearest 1/100th of 1%) by
DIVIDING (i) the applicable LIBOR rate by (ii) 1.00 MINUS the Reserve
Percentage, and which Adjusted LIBOR shall be automatically adjusted on and as
of the effective date of any change in the Reserve Percentage.
"ADVANTAGE" shall mean any payment (whether made voluntarily or
involuntarily, by offset of any deposit or other indebtedness or otherwise)
received by any Lender in respect of the Obligations owing by the Borrowers to
the Lenders if such payment results in that Lender having a lesser share (based
upon its Ratable Share) of such Obligations to the Lenders than was the case
immediately before such payment.
"AFFECTED LENDER" has the meaning assigned to such term in Section 3.8.
"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
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Person shall be deemed to control a second Person if such first Person
possesses, directly or indirectly, the power (i) to vote 50% 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) none of the Lenders,
the Agent, or the Letter of Credit Issuer shall in any event be considered to be
an Affiliate of Holdings or any of its Subsidiaries.
"AGENT" has the meaning assigned to such term in the preamble of this
Agreement and any successor thereto pursuant to Section 13.
"AGREEMENT" shall mean this Credit Agreement, as the same may from time
to time be amended, supplemented, restated or otherwise modified.
"ANNIVERSARY DATE" shall mean the date which is one (1) year after the
Closing Date (which Closing Date the Agent shall confirm to the Borrowers in
writing, and which the Borrowers shall acknowledge in writing) occurs and each
successive anniversary of such date thereafter.
"APPLICABLE FEE PERCENTAGE" shall mean, on each day of any Accrual
Period, with respect to any Facility Fee,
(i) commencing on the first day of the Commitment Period and continuing
through and including May 31, 2002, twelve and one-half (12.50) Basis
Points per annum, and
(ii) effective on the Fee Adjustment Date which is June 1, 2002 and on
each Fee Adjustment Date thereafter, the Basis Points per annum
indicated in the following table corresponding to Holdings' Total
Leverage Ratio as of the Fee Determination Date for each such Fee
Adjustment Date:
Total Leverage Ratio: Applicable Fee Percentage (in Basis Points):
-------------------- -------------------------------------------
Equal to or greater than 2.50 to 1 Twenty-five (25)
Less than 2.50 to 1, but equal to
or greater than 2.00 to 1 Twenty (20)
Less than 2.00 to 1, but equal to
or greater than 1.50 to 1 Eighteen and three-fourths (18.75)
Less than 1.50 to 1, but equal to
or greater than 1.00 to 1 Fifteen (15)
Less than 1.00 to 1 Twelve and one-half (12.50);
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provided, however, that, (a) at any and all times during which the Borrowers are
in default of the timely delivery of (1) the financial statements required by
Section 8.1(a) or Section 8.1(b), as the case may be, for any period or (2) the
certificate complying with Section 8.1(c)(ii) certifying the Total Leverage
Ratio, the Applicable Fee Percentage shall be twenty-five (25) Basis Points, and
(b) the accrual of fees based upon the Applicable Fee Percentage pursuant to
clause (a) of this proviso shall not be construed to waive any Event of Default
which may exist by reason of such failure or limit any right or remedy of the
Agent or the Lenders.
"APPLICABLE LIBOR PERCENTAGE" shall mean, on each day of any Accrual
Period with respect to any LIBOR Loans comprising a Revolving Credit Borrowing,
(i) commencing on the first day of the Commitment Period and continuing
through and including May 31, 2002, forty (40) Basis Points per annum,
and
(ii) effective on the Interest Adjustment Date which is June 1, 2002
and on each Interest Adjustment Date thereafter, the Basis Points per
annum indicated in the applicable table below corresponding to
Holdings' Total Leverage Ratio as of the Interest Determination Date
for each such Interest Adjustment Date:
Applicable LIBOR
Total Leverage Ratio: Percentage (in Basis Points):
-------------------- ----------------------------
Equal to or greater than 2.50 to 1 One Hundred Twelve and one-half (112.50)
Less than 2.50 to 1, but equal to
or greater than 2.00 to 1 Ninety (90)
Less than 2.00 to 1, but equal to
or greater than 1.50 to 1 Sixty-seven and one-half (67.50)
Less than 1.50 to 1, but equal to
or greater than 1.00 to 1 Fifty (50)
Less than 1.00 to 1 Forty (40)
provided, however, that, (a) at any and all times during which the Borrowers are
in default of the timely delivery of (1) the financial statements required by
Section 8.1(a) or Section 8.1(b), as the case may be, for any period or (2) the
certificate complying with Section 8.1(c)(ii) certifying the Total Leverage
Ratio, the Applicable LIBOR Percentage shall be one hundred twelve and one-half
(112.50) Basis Points, and (b) the accrual of interest based upon the Applicable
LIBOR Percentage pursuant to clause (a) of this proviso shall not be construed
to waive any Event of Default which may exist by reason of such failure or limit
any right or remedy of the Agent or the Lenders.
"BANKING DAY" shall mean a day of the year on which banks are not
required or authorized to close in Cleveland, Ohio and New York, New York;
provided, however, that, when
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used in connection with a LIBOR Loan, "Banking Day" shall mean any such day on
which banks are open for dealings in or quoting deposit rates for dollar
deposits in the London interbank market.
"BASIS POINT" shall mean one one-hundredth of one percent (0.01%).
"BORROWER" and "BORROWERS" has the meaning assigned to such term in the
preamble of this Agreement.
"BORROWER PROPERTY" shall mean any real property and improvements
owned, leased, used, operated or occupied by any Borrower or any of their
respective corporate predecessors, including any soil, surface water or
groundwater on or under such real property and improvements.
"CAPITALIZED LEASES" shall mean, in respect of any Person, any lease of
property imposing obligations on such Person, as lessee of such property, which
are required in accordance with GAAP to be capitalized on a balance sheet of
such Person.
"CASH EQUIVALENTS" shall mean investments in (i) United States
Governmental Securities maturing within 365 days from the date of acquisition
thereof; (ii) negotiable certificates of deposit and bankers' acceptances
maturing within 365 days from the date of acquisition thereof issued by any
commercial bank or trust company organized under the laws of the United States
or any state thereof or the District of Columbia, having at any date of
determination combined capital and surplus and retained earnings of not less
than $100,000,000, PROVIDED, that the long-term unsecured debt obligations of
such bank or trust company (or the long-term unsecured debt obligations of the
bank holding company owning all of the capital stock of such bank or trust
company) shall have been given a rating of "A" or better by the Standard &
Poor's Ratings Group division of McGraw Hill, Inc. ("S&P") or an equivalent
rating by any other credit rating agency of recognized national standing, and
(iii) commercial paper maturing not more than 270 days from the date of issuance
thereof which has a rating, at the time of acquisition by a Lincoln Party, of
"A-1" or better by S&P or an equivalent rating by any other credit rating agency
of recognized national standing.
"CHANGE OF CONTROL" shall mean and include any of the following:
(i) during any period of twelve (12) consecutive calendar
months, individuals who at the beginning of such period constituted any
Holdings' Board of Directors (together with any new directors (x) whose
election by Holdings' Board of Directors was, or (y) whose nomination
for election by Holdings' 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;
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(ii) any person or group (as such term is defined in section
13(d)(3) of the 1934 Act) 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 Holdings' capital stock;
(iii) the shareholders of Holdings approve a merger or
consolidation of such with any other person, other than a merger or
consolidation which would result in the voting securities of Holdings
outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted or exchanged for voting
securities of the surviving or resulting entity) more than 50% of the
combined voting power of the voting securities of Holdings or such
surviving or resulting entity outstanding after such merger or
consolidation;
(iv) the shareholders of Holdings approve a plan of complete
liquidation of Holdings or an agreement or agreements for the sale or
disposition by Holdings of all or substantially all of Holdings'
assets; and/or
(v) Holdings ceases to own one hundred percent (100%) of the
issued and outstanding capital stock of a Borrower, except as a result
of a transaction expressly permitted in Section 9.3, below.
"CLOSING DATE" shall mean April 24, 2002 or such other date which is
acceptable to the Agent and the Lenders.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the rules and regulations promulgated thereunder from time to
time.
"COMMITMENT" shall mean, with respect to each Lender, the obligation
hereunder of such Lender to make Loans and to participate in the risks of all
Letters of Credit issued by the Letter of Credit Issuer at Holdings' request on
behalf of the Borrowers, up to the amount set forth opposite such Lender's name
under the column headed "Commitments" as set forth in Annex A hereof during the
Commitment Period as such Commitment may be reduced in accordance with a
reduction in the Total Commitment Amount pursuant to Section 3.2 hereof.
"COMMITMENT PERIOD" shall mean the period FROM (i) the Closing Date TO
(ii) the third (3rd) Anniversary Date, or such earlier date on which the
Commitments are terminated pursuant to the terms hereof.
"CONSOLIDATED" shall mean Holdings and its Subsidiaries, taken as a
whole in accordance with GAAP.
"CONSOLIDATED FIXED CHARGES" shall mean, with respect to any period,
the sum of (a) Consolidated Interest Expense for such period and (b)
Consolidated Lease Rentals for such period.
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"CONSOLIDATED INCOME AVAILABLE FOR FIXED CHARGES" shall mean, with
respect to any period, Consolidated Net Income for such period, PLUS all amounts
deducted in the computation thereof on account of (a) Consolidated Fixed Charges
and (b) taxes imposed on or measured by income or excess profits.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period, Interest
Expense of Holdings and its Subsidiaries on a Consolidated basis.
"CONSOLIDATED LEASE RENTALS" shall mean, with respect to any period,
the sum of the rental and other obligations required to be paid during such
period by Holdings and its Subsidiaries as lessee under all leases of real or
personal property (other than Capitalized Leases), on a Consolidated basis,
excluding any amount required to be paid by the lessee (whether or not therein
designated as rental or additional rental) on account of maintenance and
repairs, insurance, taxes, assessments, water rates and similar charges,
PROVIDED that, if at the date of determination, any such rental or other
obligations (or portion thereof) are contingent or not otherwise definitely
determinable by the terms of the related lease, the amount of such obligations
(or such portion thereof) (i) shall be assumed to be equal to the amount of such
obligations for the period of 12 consecutive calendar months immediately
preceding the date of determination or (ii) if the related lease was not in
effect during such preceding 12-month period, shall be the amount estimated by a
responsible officer of Holdings on a reasonable basis and in good faith.
"CONSOLIDATED NET INCOME" shall mean, with reference to any period, the
net income (or loss) of Holdings and its Subsidiaries for such period, on a
Consolidated basis, as determined in accordance with GAAP, after eliminating all
offsetting debits and credits between Holdings and its Subsidiaries and all
other items required to be eliminated in the course of the preparation of
consolidated financial statements of Holdings and its Subsidiaries in accordance
with GAAP, PROVIDED that there shall be excluded:
(a) the income (or loss) of any Person accrued prior to the
date it becomes a Subsidiary or is merged into or consolidated with
Holdings or a Subsidiary, and the income (or loss) of any Person,
substantially all of the assets of which have been acquired in any
manner, realized by such other Person prior to the date of acquisition,
(b) the income (or loss) of any Person (other than a
Subsidiary) in which Holdings or any Subsidiary has an ownership
interest, except to the extent that any such income has been actually
received by Holdings or such Subsidiary in the form of cash dividends
or similar cash distributions,
(c) the undistributed earnings of any Subsidiary to the extent
that, to the best of the knowledge of the Holdings, the declaration or
payment of dividends or similar distributions by such Subsidiary is (i)
not at the time permitted by the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to such Subsidiary, or (ii) otherwise unavailable
for payment,
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(d) any aggregate net gain (but not any aggregate net loss)
during such period arising from the sale, conversion, exchange or other
disposition of Investments or capital assets (such term to include,
without limitation, the following, whether or not current: all fixed
assets, whether tangible or intangible, and all inventory sold in
conjunction with the disposition of fixed assets), and any taxes on
such net gain (or net loss),
(e) any gains resulting from any write-up or reappraisal of
any assets (but not any losses resulting from any write-down or
reappraisal of any assets),
(f) any net gain from the collection of the proceeds of life
insurance policies,
(g) any gain arising from the acquisition of any security (as
defined in the Securities Act of 1933), or the extinguishment, under
GAAP, of any Indebtedness, of Holdings or any Subsidiary,
(h) any deferred or other credit representing the excess of
equity in any Subsidiary at the date of acquisition over the cost of
the investment in such Subsidiary; and
(i) any non-cash charges related to the implementation by
Holdings and its Subsidiaries of FASB Statement 142.
"CONSOLIDATED NET WORTH" shall mean, at any time,
(a) the sum (adjusted for any non-cash charges related to the
implementation by Holdings and its Subsidiaries of FASB Statement 142)
of (i) the par value (or value stated on the books of the corporation)
of the capital stock (but excluding treasury stock and capital stock
subscribed and unissued) of Holdings and its Subsidiaries, PLUS (ii)
the amount of the paid-in capital and retained earnings of Holdings and
its Subsidiaries, in each case as such amounts would be shown on a
Consolidated balance sheet of Holdings and its Subsidiaries as of such
time prepared in accordance with GAAP, MINUS
(b) to the extent included in clause (a), all amounts properly
attributable to minority interests, if any, in the stock and surplus of
Subsidiaries.
"CONTROLLED GROUP" shall mean a controlled group of corporations as
defined in Section 1563 of the Code of 1986, of which any Borrower is a part.
"CREDIT EVENT" shall mean (a) the obligation of (i) each Lender to make
a Loan on the occasion of each Revolving Credit Borrowing, (ii) the Letter of
Credit Issuer to issue any Letter of Credit, or (iii) any Lender to participate
in the risk of any Letter of Credit, (b) the making of a Loan by any Lender, (c)
the delivery by Holdings on behalf of the Borrowers of (i) a Notice of Borrowing
requesting a Revolving Credit Borrowing or a Letter of Credit or (ii) a Rate
Conversion/Continuation Request requesting the conversion or continuation of
Revolving Credit Loans, (d) a Rate Conversion or Rate Continuation, or (e) the
acceptance by any Borrower of proceeds of any Revolving Credit Borrowing.
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"DEFAULT UNDER ERISA" shall mean (a) the occurrence or existence of a
material "accumulated funding deficiency" (as defined in ERISA) in respect of
any Plan within the scope of Section 302(a) of ERISA or (b) any failure by any
Borrower to make a full and timely payment of premiums required by Section 4001
of ERISA in respect of any Plan, or (c) the occurrence or existence of any
material liability under Section 4062, 4063, 4064, 4069, 4201, 4217 or 4243 of
ERISA in respect of any Plan, or (d) the occurrence or existence of any material
breach of any other Law or regulation in respect of any such Plan, or (e) the
institution or existence of any action for the forcible termination of any such
Plan which is within the scope of Section 4001(a)(3) or (15) or ERISA.
"DISTRIBUTION" shall mean any payment made, liability incurred and
other consideration (other than any stock dividend, or stock split or similar
distributions payable only in capital stock of a Borrower) given (i) for the
purchase, acquisition, redemption or retirement of any capital stock of a
Borrower or (ii) as a dividend, return of capital or other distribution of any
kind in respect of a Borrower's capital stock outstanding at any time.
"DOMESTIC SUBSIDIARY" means any Subsidiary which is incorporated or
organized in the United States or any state or territory thereof.
"EBITDA" shall mean, for any period, the sum of the amounts of (i)
Consolidated Net Income, (ii) Consolidated Interest Expense for such period,
(iii) depreciation for such period on a Consolidated basis, as determined in
accordance with GAAP, (iv) amortization for such period on a Consolidated basis,
as determined in accordance with GAAP, and (v) all provisions for any taxes
imposed on or measured by income or excess profits made by Holdings and its
Subsidiaries during such period.
"ENVIRONMENTAL LAWS" shall mean any federal, state or local Law,
regulation, ordinance, or order pertaining to the protection of the environment
and the health and safety of the public, including (but not limited to) the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"),
42 USC secs. 9601 ET SEQ.; the Resource Conservation and Recovery Act ("RCRA"),
42 USC secs. 6901 ET SEQ., the Hazardous Materials Transportation Act, 49 USC
secs. 1801 ET SEQ., the Federal Water Pollution Control Act (33 USC secs. 1251
ET SEQ.), the Toxic Substances Control Act (15 USC secs. 2601 ET SEQ.) and the
Occupational Safety and Health Act (29 USC secs. 651 ET SEQ.), and all similar
state, regional or local Laws, treaties, regulations, statutes or ordinances,
common Law, civil Laws, or any case precedents, rulings, requirements,
directives or requests having the force of Law of any foreign or domestic
governmental authority, agency or tribunal, and all foreign equivalents thereof,
as the same have been or hereafter may be amended, and any and all analogous
future Laws, treaties, regulations, statutes or ordinances, common Law, civil
Laws, or any case precedents, rulings, requirements, directives or requests
having the force of Law of any foreign or domestic governmental authority,
agency or tribunal and the regulations promulgated pursuant thereto, which
governs: (i) the existence, cleanup and/or remedy of contamination on property;
(ii) the emission or discharge of Hazardous Materials into the environment;
(iii) the control of hazardous wastes; (iv) the use, generation, transport,
treatment, storage, disposal, removal or recovery of Hazardous Materials; or (v)
the maintenance and development of wetlands.
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"ERISA" shall mean the Employee Retirement Income Security Act of 1974
(Public Law 93406), as amended, and in the event of any amendment affecting any
section thereof referred to in this Agreement, that reference shall be reference
to that section as amended, supplemented, replaced or otherwise modified.
"ERISA AFFILIATE" of any Person shall mean any other Person that for
purposes of Title IV of ERISA is a member of such Person's Controlled Group, or
under common control with such Person, within the meaning of Section 414 of the
Code.
"ERISA REGULATOR" shall mean any governmental agency (such as the
Department of Labor, the Internal Revenue Service and the Pension Benefit
Guaranty Corporation) having any regulatory authority over any Plan.
"EUROCURRENCY LIABILITIES" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"EVENT OF DEFAULT" has the meaning assigned to such term in Article 11.
"EXEMPTION CERTIFICATE" has the meaning assigned to such term in
Section 3.9(f).
"EXISTING CREDIT AGREEMENT" shall mean the Credit Agreement dated
December 20, 1995, as amended, among Lincoln and others, as borrowers, KeyBank
(as successor by merger to Society National Bank), as agent, and various lenders
party thereto.
"FACILITY FEE" has the meaning assigned to such term in Section 3.4(a).
"FED FUNDS RATE" shall mean, for any period, a fluctuating interest
rate per annum 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 Banking Day, for the next preceding Banking Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Banking Day, the average of the quotations for such day on such
transactions received by the Agent from three (3) federal funds brokers of
recognized standing selected by it.
"FEE ADJUSTMENT DATE" shall mean each April 1, June 1, September 1 and
December 1 during the Commitment Period, commencing with June 1, 2002.
"FEE DETERMINATION DATE" shall mean, as to each Fee Adjustment Date,
the last day of the Fiscal Quarter most recently ended prior to such Fee
Adjustment Date. By way of example, the Fee Determination Date for the Fee
Adjustment Date on June 1, 2002 shall be March 31, 2002, which is the last day
of the Fiscal Quarter most recently ended prior to such Fee Adjustment Date.
"FISCAL QUARTER" shall mean any of the four consecutive three-month
fiscal accounting periods collectively forming a Fiscal Year of Holdings
consistent with Holdings' past practice.
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"FISCAL YEAR" shall mean Holdings' regular annual accounting period
which shall end December 31, 2002, in respect of Holdings' current annual
accounting period, and which thereafter shall end on December 31 of each
succeeding calendar year.
"FIXED CHARGES COVERAGE RATIO" shall mean, at any time, the ratio of
(a) Consolidated Income Available for Fixed Charges for the period of four
consecutive fiscal quarters ending as of the most recent fiscal quarter ended
prior to such time to (b) Consolidated Fixed Charges for such period.
"FORMER AGENT" has the meaning assigned to such term in Section 13.13.
"FORMER LC BANK" has the meaning assigned to such term in Section 5.3.
"FUNDED DEBT" shall mean (a) Indebtedness, other than Indebtedness of
the types described in clauses (ix), (x), (xii) and (xiii) of the definition of
such term, below, and (b) all guaranty obligations of such Person in respect of
any Indebtedness of the type described in clause (a) of this definition.
"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 Sections 8.16
through 8.20, inclusive, including defined terms as used therein, are subject
(to the extent provided therein) to Sections 1.1 and 1.3.
"GUARANTOR" shall mean one who pledges his, her or its credit or
property in any manner for the payment or other performance of the Indebtedness,
contract or other obligation of another and includes (without limitation) any
guarantor (whether of collection or payment), any obligor in respect of a
standby letter of credit or surety bond issued for the obligor's account, and
surety, any co-maker, any endorser, and anyone who agrees conditionally or
otherwise to make any loan, purchase or investment in order thereby to enable
another to prevent or correct a default of any kind.
"GUARANTY" shall mean the obligation of a Guarantor.
"HAZARDOUS MATERIAL" shall mean and include (i) any asbestos or other
material composed of or containing asbestos which is, or may become, even if
properly managed, friable, (ii) petroleum and any petroleum product, including
crude oil or any fraction thereof, and natural gas or synthetic natural gas
liquids or mixtures thereof, (iii) any hazardous, toxic or dangerous waste,
substance or material defined as such in (or for purposes of) CERCLA or RCRA,
any so-called "Superfund" or "Superlien" law, or any other applicable
Environmental Laws, and (iv) any other substance whose generation, handling,
transportation, treatment or disposal is regulated pursuant to any Environmental
Laws.
"INCIPIENT DEFAULT" shall mean an event, condition or thing which
constitutes, or which with the lapse of any applicable grace period or the
giving of notice or both would constitute, any
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Event of Default and which has not been appropriately waived by the Lenders in
writing or fully corrected prior to becoming an actual Event of Default.
"INCREASED RATE" shall mean, at any time and from time to time, a rate
of interest per annum which (i) as to any LIBOR Loan, is Three Hundred (300)
Basis Points in excess of the rate of interest otherwise accruing on such Loan
at such time, and (ii) as to other Obligations, including, without limitation
Prime Rate Loans, One Hundred (100) Basis Points in excess of the Prime Rate.
"INDEBTEDNESS" means, with respect to any Person, without duplication,
(i) all indebtedness for money borrowed of such Person; (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 and all Indebtedness of such Person
secured by purchase money Liens; (viii) the present value, determined on the
basis of the implicit interest rate, of all basic rental obligations under all
"synthetic" leases (i.e. leases accounted for by the lessee as operating leases
under which the lessee is the "owner" of the leased property for Federal income
tax purposes); (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 any so-called `hedge', `swap', `collar', `cap' or similar interest rate or
currency fluctuation protection 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),
including, without limitation, in connection with a Qualifying Securitization
Transaction, other than in any such case any thereof sold solely for purposes of
collection of delinquent accounts; (xii) the stated value, or liquidation value
if higher, of all redeemable stock (or other equity interest) of such Person;
and (xiii) all guaranty obligations of such Person; provided that (a) neither
trade payables nor other similar accrued expenses, in each case arising in the
ordinary course of business, unless evidenced by a note, shall constitute
Indebtedness; and (b) 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.
"INITIAL CREDIT EVENT" shall mean the first Credit Event hereunder to
occur.
"INTEREST ADJUSTMENT DATE" shall mean each April 1, June 1, September 1
and December 1 during the Commitment Period, commencing with June 1, 2002.
"INTEREST DETERMINATION DATE" shall mean, as to each Interest
Adjustment Date, the last day of the Fiscal Quarter most recently ended prior to
such Interest Adjustment Date. By way of
12
example, the Interest Determination Date for the Interest Adjustment Date on
June 1, 2002 shall be March 31, 2002, which is the last day of the Fiscal
Quarter most recently ended prior to such Interest Adjustment Date.
"INTEREST EXPENSE" shall mean, for any fiscal period, all expense of
Holdings or any of its Subsidiaries for such fiscal period classified as
interest expense for such period, including capitalized interest and interest
under "synthetic" leases, in accordance with GAAP.
"INTEREST PERIOD" shall mean, for each of the LIBOR Loans comprising a
Revolving Credit Borrowing, the period commencing on the date of such Loans or
the date of the Rate Conversion or Rate Continuation of any Loans into such
LIBOR Loans and ending on the numerically corresponding day of the period
selected by Holdings on behalf of the Borrowers pursuant to the provisions
hereof and each subsequent period commencing on the last day of the immediately
preceding Interest Period in respect of such Loans and ending on the last day of
the period selected by Holdings on behalf of the Borrowers pursuant to the
provisions hereof. The duration of each such Interest Period shall be one (1),
two (2), three (3) or six (6) months, in each case as Holdings on behalf of the
Borrowers may select, upon delivery to the Agent of a Notice of Borrowing
therefor in accordance with Section 3.l(d) hereof; provided, however, that:
(i) Interest Periods for Loans comprising part of the same
Revolving Credit Borrowing shall be of the same duration;
(ii) no Interest Period may end on a date later than the last day
of the Commitment Period;
(iii) if there is no such numerically corresponding day in the month
that is such, as the case may be, first, second, third or
sixth month after the commencement of an Interest Period, such
Interest Period shall end on the last day of such month;
(iv) whenever the last day of any Interest Period in respect of
LIBOR Loans would otherwise occur on a day other than a
Banking Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Banking Day;
provided, however, that if such extension would cause the last
day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall
occur on the immediately preceding Banking Day; and
(v) Holdings, on behalf of the Borrowers, may not select any
Interest Period ending after the date of any reduction in the
Total Commitment Amount unless, after giving effect to such
selection, the aggregate unpaid principal amount of any then
outstanding Prime Rate Loans taken together with the principal
amount of any then outstanding LIBOR Loans having Interest
Periods ending on or prior to the date of such reduction shall
be at least equal to the principal amount of the Revolving
Credit Loans due and payable on or prior to such date.
"INVESTMENT" means any investment, made in cash, by undertaking or by
delivery of property, by Holdings or any of its Subsidiaries (i) in any Person,
whether by acquisition of stock
13
or other equity interest, joint venture or partnership, Indebtedness or other
obligation or security, or by loan, Guaranty, advance, capital contribution or
otherwise, or (ii) in any property.
"KEYBANK" shall mean KeyBank National Association, a national banking
association, its successors and assigns.
"LC SUBLIMIT" shall mean the amount Five Million Dollars ($5,000,000).
"LAW" shall mean any law, treaty, regulation, statute or ordinance,
common law, civil law, or any case precedent, ruling, requirement, directive or
request having the force of law of any foreign or domestic governmental
authority, agency or tribunal.
"LENDER" or "LENDERS" has the meaning assigned to such term in the
preamble of this Agreement.
"LENDER DEBT" shall mean, collectively, every Indebtedness and
liability now or hereafter owing by any Borrower to the Lenders or any thereof,
whether owing absolutely or contingently, whether created by loan, overdraft,
guaranty of payment or other contract or by quasi-contract, tort, statute or
other operation of Law, whether incurred directly to the Lenders or any thereof
or acquired by any or all thereof by purchase, pledge or otherwise, and whether
participated to or from the Lenders or any thereof in whole or in part.
"LENDING OFFICE" shall mean, with respect to any Lender, the office of
such Lender specified as its "Lending Office" below its name on the signature
pages hereto, or such other office of such Lender as such Lender may from time
to time specify in writing to the Borrowers and the Agent as the office at which
Loans are to be made and maintained.
"LETTER OF CREDIT" shall mean any standby letter of credit issued by
the Letter of Credit Issuer on a risk-participated basis with the other Lenders
pursuant to the provisions of this Agreement.
"LETTER OF CREDIT ISSUER" shall mean KeyBank and any successor thereto
pursuant to Section 5.3.
"LIBOR" shall mean, with respect to any LIBOR Loan for any Interest
Period, the per annum rate of interest, determined by the Agent in accordance
with its usual procedures (which determination shall be conclusive and binding
absent manifest error) as of approximately 11:00 A.M. (London time) two (2)
Banking Days prior to the beginning of such Interest Period pertaining to such
LIBOR Loan, appearing on page 3750 of the Dow Jones Telerate Service (or any
successor to 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 Agent from
time to time for purposes of providing quotations of interest rates applicable
to dollar deposits in the London interbank market) as the rate in the London
interbank market for dollar deposits in immediately available funds with a
maturity comparable to such Interest Period. In the event that such a rate
quotation is not available for any reason, then the rate shall be the rate,
determined by the Agent as of approximately 11:00
14
A.M. (London time) two (2) Banking Days prior to the beginning of such Interest
Period pertaining to such LIBOR Loan, to be the average (rounded upwards, if
necessary, to the nearest one sixteenth of one percent (1/16th of 1%)) of the
per annum rates of interest at which dollar deposits in immediately available
funds approximately equal in principal amount to such LIBOR Loan and for a
maturity comparable to the Interest Period are offered to KeyBank by prime banks
in the London interbank market.
"LIBOR LOANS" shall mean those Loans described in Section 3.1 hereof on
which the Borrowers shall pay interest at a rate based on LIBOR.
"LIEN" shall mean any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on title
to real property.
"LINCOLN PARTY" shall mean any of the Borrowers or any other direct or
indirect Subsidiary of any of them from time to time, collectively, the "Lincoln
Parties".
"LOAN" shall mean a Revolving Credit Loan made by a Lender to or for
the account of the Borrowers pursuant to Article 3 and refers to a Prime Rate
Loan or a LIBOR Loan.
"LOAN DOCUMENT" shall mean this Agreement, any assignment, note
(including the Notes), guaranty, subordination agreement (including, without
limitation, subordination provisions contained in documents evidencing or
governing Subordinated Indebtedness), Reimbursement Agreement, financial
statement, certificate, audit report or other writing furnished by the
Borrowers, or any of their officers to the Lenders pursuant to or otherwise in
connection with this Agreement.
"MAJORITY LENDERS" shall mean, at any time of determination, one or
more Lenders having Commitments in the aggregate of at least fifty-one percent
(51%) of the Total Commitment Amount or, in the event that the Commitments of
the Lenders shall have been terminated, the Lenders holding fifty-one percent
(51%) of the amount of the outstanding Revolving Credit Loans.
"MATERIAL ADVERSE EFFECT" shall mean the occurrence or existence of (a)
a material adverse effect on the business, results of operations or financial
condition of a Borrower, or (b) a material adverse effect on the ability of a
Borrower to perform its Obligations under this Agreement or any of the other
Loan Documents, or (c) a material adverse effect on the legality, validity or
enforceability of a Borrower's Obligations under this Agreement or any of the
other Loan Documents.
"MULTIEMPLOYER PLAN" shall mean any Plan that is a "multiemployer plan"
(as such term is defined in section 4001(a)(3) of ERISA).
"NOTE" or "NOTES" shall mean a note or notes executed and delivered
pursuant to Section 3.1(c) hereof.
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"NOTICE OF BORROWING" shall have the meaning assigned to such term in
Section 3.1(d).
"OBLIGATIONS" shall mean the obligations of the Borrowers under this
Agreement and the other Loan Documents, including, without limitation, the
outstanding principal and accrued interest in respect of any Revolving Credit
Loans, the outstanding principal and accrued interest in respect of Letters of
Credit, all Facility Fees, Risk Participation Fees, fees owing to the Lenders or
the Agent, reimbursement obligations under Letters of Credit, any indebtedness
or obligations under any so-called `hedge', `swap', `collar', `cap' or similar
interest rate or currency fluctuation protection agreements hereafter
constituting one or more of the Loan Documents pursuant to a writing signed by
the Borrowers, the Agent and the Majority Lenders, and any expenses, taxes,
compensation or other amounts owing under this Agreement, the Notes, any
Reimbursement Agreement, including, without limitation, pursuant to Sections
3.3, 3.4, 3.7, 3.8, 3.9 or 15.4 and any and all other amounts owed by any
Borrower to the Agent or the Lenders pursuant to this Agreement, the Notes or
any other Loan Document.
"OTHER TAXES" has the meaning assigned to such term in Section 3.9.
"PAYMENT OFFICE" shall mean such office of the Agent as set forth below
the Agent's name on the signature pages hereof or such offices as may be from
time to time selected by the Agent and notified in writing by the Agent to the
Borrowers and the Lenders as the office to which payments are to be made by the
Borrowers or the Lenders, as the case may be.
"PERMITTED ACQUISITION" shall mean any Acquisition as to which all of
the following conditions are satisfied:
(i) such Acquisition involves a line or lines of business in a
Related Industry;
(ii) such Acquisition is not 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;
(iii) no Event of Default or Incipient Default then exists or
would exist after giving effect to such Acquisition; and
(iv) at least ten (10) Banking Days prior to the completion of
any such Acquisition involving aggregate consideration, including the
principal amount of any assumed Indebtedness and (without duplication)
any Indebtedness of any acquired Person or Persons, in excess of
$10,000,000, Holdings shall have delivered to the Agent and the Lenders
a certificate of a responsible financial or accounting officer of
Holdings demonstrating, in reasonable detail, the computation of the
ratios referred to in Sections 9.7 and 9.8 on a pro forma basis (which
pro forma basis shall be satisfactory to the Agent);
16
provided, that the term Permitted Acquisition specifically excludes any loans,
advances or minority investments otherwise permitted pursuant to Section 9.2.
"PERMITTED HOLDINGS MERGER" shall mean a merger between Holdings and
another Person as to which all of the following conditions are satisfied:
(i) Holdings is the surviving corporation under such merger;
(ii) no Event of Default or Incipient Default then exists or would
exist after giving effect to such merger;
(iii) without limiting the generality of clause (ii), above, no Change
of Control would occur by reason of such merger; and
(iv) at least 20 Banking Days prior to the completion of any such
merger, Holdings shall have delivered to the Agent and the Lenders (A)
audited financial statements for the other merger party (unless audited
financial statements are unavailable, in which case, unaudited
financial statements shall be delivered) for the three most recent
fiscal years of such Person and (B) a certificate of a responsible
officer of Holdings demonstrating, in reasonable detail, the
computation of the ratios referred to in Sections 9.7 and 9.8 hereof on
a pro forma basis (which pro forma basis shall be satisfactory to the
Agent).
"PERMITTED PURCHASE MONEY SECURITY INTEREST" shall mean any Lien which
is created or assumed in purchasing, constructing or improving any real or
personal property (other than inventory) in the ordinary course of business, or
to which any such property is subject when so purchased, including, without
limitation, Capitalized Leases, provided, that (i) such lien shall be confined
to the aforesaid property, (ii) the Indebtedness secured thereby does not exceed
the total cost of the purchase, construction or improvement, (iii) any
refinancing of such indebtedness does not increase the amount of indebtedness
owing as of the date of such refinancing.
"PERSON" shall mean an individual, partnership, limited liability
company, corporation (including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"PLAN" shall mean any employee pension benefit plan subject to Title IV
of the Employee Retirement Income Security Act of 1974, as amended, established
or maintained by Holdings, any Subsidiary, or any member of the Controlled
Group, or any such Plan to which Holdings, any Subsidiary, or any member of the
Controlled Group is required to contribute on behalf of any of its employees
(other than a Multi-Employer Plan, as that term is defined in Section 414(f) of
the Code).
"PREPAYMENT LIBOR" has the meaning assigned to such term in Section
3.3(d).
"PRIME RATE" shall mean the higher of (i) the per annum rate equal to
the Fed Funds Rate PLUS one and one-half percent (1.5%) or (ii) that interest
rate established from time to time by KeyBank as its so-called "prime" rate (or
equivalent rate otherwise named), whether or not such
17
rate is publicly announced; the Prime Rate may not necessarily be the lowest
interest rate charged by KeyBank for commercial or other extensions of credit.
"PRIME RATE LOANS" shall mean those loans described in Section 3.1(b)
hereof on which the Borrowers shall pay interest at the rate based on the Prime
Rate.
"PURCHASE DATE" shall have the meaning assigned to such term in Section
3.1(i).
"QUALIFYING SECURITIZATION TRANSACTION" shall mean a bona fide
securitization transaction effected under terms and conditions customary in the
capital markets and consisting of sales of Trade Receivables by a Lincoln Party
to a Special Purpose Company which in turn either sells or pledges such Trade
Receivables (or undivided interests therein) to a commercial paper conduit or
other financing source (whether with or without recourse to the Special Purpose
Company), and as to which each of the following conditions shall be satisfied:
(i) such sales to the Special Purpose Company are not accounted for under GAAP
as secured loans, (ii) such transactions are, in the good faith opinion of a
responsible officer of Holdings, for fair value and in the best interests of
such Lincoln Party, and (iii) recourse to any Lincoln Party in connection with
any such sale of Trade Receivables is limited to repurchase, substitution or
indemnification obligations customarily provided for in asset securitization
transactions and arising from breaches of representations or warranties made by
any Lincoln Party in connection with such sale.
"QUARTERLY PAYMENT DATE" shall mean each March 31, June 30, September
30 and December 31 during the Commitment Period, commencing with June 30, 2002.
"QUOTED RATE" shall have the meaning assigned to such term in Section
3.1(i).
"RATABLE PORTION" or "RATABLE SHARE" shall mean, in respect of any
Lender, the quotient (expressed as a percentage) obtained at any time by
dividing such Lender's Commitment at such time by the Total Commitment Amount.
"RATE CONTINUATION" shall mean a continuation of LIBOR Loans having a
particular Interest Period as LIBOR Loans having an Interest Period of the same
duration pursuant to Section 3.1(h).
"RATE CONVERSION" refers to a conversion pursuant to Section 3.1(h) of
Loans of one Type into Loans of another Type and, with respect to LIBOR Loans,
from one permissible Interest Period to another permissible Interest Period.
"RATE CONVERSION/CONTINUATION REQUEST" shall have the meaning assigned
to such term in Section 3.l(h).
"REDUCTION NOTICE" shall mean a notice for a request for the reduction
in the Total Commitment Amount pursuant to Section 3.2 in the form of Exhibit D
hereto.
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"REGULATORY CHANGE" shall mean, as to any Lender, any change in United
States federal, state or foreign Laws or regulations or the adoption or making
of any interpretations, directives or requests of or under any United States
federal, state or foreign Laws or regulations (whether or not having the force
of Law) by any court or governmental authority charged with the interpretation
or administration thereof.
"REIMBURSEMENT AGREEMENT" shall mean any reimbursement agreement in
respect of any Letter of Credit.
"RELATED INDUSTRIES" means the welding and cutting industry, including
the manufacture and sale of welding and cutting equipment and related
consummables, industrial gases and gas apparatus, laser and robotics for welding
applications, and the engineered adhesives and industrial fastener industries.
"REPORTABLE EVENT" shall mean a reportable event as that term is
defined in Title IV of the Employee Retirement Income Security Act of 1974, as
amended, except actions of general applicability by the Secretary of Labor under
Section 110 of such Act.
"RESERVE PERCENTAGE" shall mean for any day that percentage (expressed
as a decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, without limitation, all basic,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements) for
a member bank of the Federal Reserve System in Cleveland, Ohio, in respect of
"Eurocurrency Liabilities".
"REVOLVING CREDIT BORROWING" shall mean a group of Revolving Credit
Loans of a single Type, made by the Lenders on a single date and as to which, as
to LIBOR Loans, a single Interest Period is in effect (I.E. any group of
Revolving Credit Loans made by the Lenders having a different Type, or, as to
LIBOR Loans, having a different Interest Period [regardless of whether such
Interest Period commences on the same date as another Interest Period], or made
on a different date shall be considered to comprise a different Revolving Credit
Borrowing).
"REVOLVING CREDIT FACILITY" shall mean the revolving credit established
by the Lenders in favor of the Borrowers hereby in the maximum principal amount
of the Total Commitment Amount.
"REVOLVING CREDIT LOAN" shall mean a Loan by a Lender to the Borrowers
pursuant to Section 3.1(a), and refers to a Prime Rate Loan or a LIBOR Loan.
"REVOLVING CREDIT NOTE" shall mean a note executed and delivered
pursuant to Section 3.l(c) hereof.
"RISK PARTICIPATION EXPOSURE" shall mean, with respect to any Lender,
at any time of determination, such Lender's Ratable Portion of the sum of (a)
the aggregate entire Stated Amount of all such Letters of Credit outstanding at
such time, and (b) the aggregate amount that
19
has been drawn under such Letters of Credit but for which the Letter of Credit
Issuer or the Lenders, as the case may be, have not at such time been reimbursed
by the Borrowers.
"RISK PARTICIPATION FEE" shall mean the fee payable to the Lenders
pursuant to Section 3.4(c).
"SEC" shall mean the Securities and Exchange Commission.
"SIGNIFICANT SUBSIDIARY" shall mean any Domestic Subsidiary that is a
"significant subsidiary" as defined in Regulation S-X, Rule 1-02(w) of the SEC,
as such Regulation and Rule are in effect on the date hereof.
"SPECIAL PURPOSE COMPANY" shall mean any Person created in connection
with a Qualifying Securitization Transaction, PROVIDED, that any Special Purpose
Company shall not own any property or conduct any activities other than those
properties and activities which are reasonably required to be owned and
conducted in connection with the involvement of such Person in Qualifying
Securitization Transactions.
"STATED AMOUNT" of each Letter of Credit shall mean the maximum
available to be drawn thereunder (regardless of whether any conditions or other
requirements for drawing could then be met).
"SUBORDINATED INDEBTEDNESS" shall mean any Indebtedness which has been
subordinated to the Obligations in right and time of payment upon terms which
are satisfactory to the Majority Lenders, which terms may, in the Majority
Lenders' determination, include (without limitation) limitations or restrictions
on the right of the holder of such Indebtedness to receive payments and exercise
remedies.
"SUBSIDIARY" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (ii) any partnership, limited liability
company, 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 in this Agreement, all
references herein to "Subsidiary" shall mean a Subsidiary (direct or indirect)
of Holdings.
"TAXES" has the meaning assigned to such term in Section 3.9(a).
"TOTAL COMMITMENT AMOUNT" shall mean the amount One Hundred Twenty-five
Million Dollars ($125,000,000), as such amount may be reduced pursuant to the
provisions of this Agreement.
"TOTAL FUNDED DEBT" shall mean, as at the date of any determination,
and on a Consolidated basis, the principal amount of any and all outstanding
Funded Debt of Holdings
20
and its Subsidiaries at such date, including, without limitation, the
outstanding Obligations of the Borrowers to the Lenders under this Agreement at
such date and any other Lender Debt at such date.
"TOTAL LEVERAGE RATIO" shall mean, as of the end of any Fiscal Quarter,
the ratio of (i) Total Funded Debt outstanding on such Fiscal Quarter end to
(ii) Trailing EBITDA as of such Fiscal Quarter end.
"TRADE RECEIVABLES" shall mean indebtedness and other obligations owed
to Holdings or any other Lincoln Party, whether constituting accounts, chattel
paper, instruments or general intangibles, arising in connection with the sale
of goods and services by Holdings or such Lincoln Party to commercial customers,
including, without limitation, the obligation to pay any finance charges with
respect thereto, and agreements relating thereto, collateral securing the
foregoing, books and records relating thereto and all proceeds thereof.
"TRAILING EBITDA" shall mean, as of the end of any Fiscal Quarter,
EBITDA for such Fiscal Quarter, plus EBITDA for the three (3) immediately
preceding Fiscal Quarters
"TYPE" shall mean, when used in respect of any Revolving Credit Loan,
LIBOR or Prime Rate as applicable to such Loan.
"UTILIZATION FEE" has the meaning assigned to such term in Section
3.4(f).
The foregoing definitions shall be applicable to the singular and
plurals of the foregoing defined terms.
SECTION 1.2 COMPUTATION OF TIME PERIODS. In this Agreement in the
computation of periods of time from a specific date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
SECTION 1.3 ACCOUNTING TERMS. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP; provided, however, that, for purposes of determining
satisfaction of the financial tests set forth in the definitions of Applicable
LIBOR Percentage, and Applicable Fee Percentage, and Consolidated Net Pre-Tax
Earnings and compliance with the covenants set forth in Article 9, all terms of
an accounting or financial nature shall be construed in accordance with
generally accepted accounting principles as in effect on the date of this
Agreement and in all cases shall be applied on a basis consistent with those
applied in the preparation of the audited financial statements referred to in
Section 10.5.
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ARTICLE 2
AMOUNT AND NATURE OF CREDIT
SECTION 2.1 AMOUNT AND NATURE OF CREDIT. Subject to the terms and
conditions set forth in this Agreement, each of the Lenders hereby establishes a
facility pursuant to which Revolving Credit Loans shall be available to the
Borrowers on a revolving credit basis in an amount, in the aggregate as to all
of the Lenders, not to exceed the Total Commitment Amount, of which an amount
not to exceed the LC Sublimit shall be available for the issuance of Letters of
Credit.
SECTION 2.2 PURPOSE OF FACILITY. The Borrowers shall use the proceeds
of Revolving Credit Loans hereunder (a) to repay sums owing to the "Lenders" and
the "Agent" under and pursuant to the Existing Credit Agreement, including,
without limitation, obligations in respect of letters of credit outstanding
thereunder, and (b) for other general corporate purposes. The Borrowers shall
use the Letters of Credit for the purposes set forth in Article 5 and for
general corporate purposes of the Lincoln Parties.
ARTICLE 3
LOANS
SECTION 3.1 REVOLVING CREDIT LOANS.
(a) REVOLVING CREDIT LOANS. Subject to the terms and provisions of this
Agreement, each Lender severally agrees to make Revolving Credit Loans to the
Borrowers in respect of the Revolving Credit Facility from time to time during
the Commitment Period up to such Lender's respective Commitment; provided,
however, that in no event at any time shall the aggregate principal amount of
all Revolving Credit Loans then outstanding, PLUS the aggregate Risk
Participation Exposure then existing, be in excess of the Total Commitment
Amount. Within the limits set forth herein, the Borrowers may borrow, prepay and
reborrow Revolving Credit Loans.
(b) REVOLVING CREDIT BORROWINGS.
(i) Subject to the terms and conditions set forth in this Agreement,
the Borrowers shall have the option to request Revolving Credit Borrowings in
respect of the Revolving Credit Facility, comprised of (A) Prime Rate Loans
maturing on or before the last day of the Commitment Period, in aggregate
amounts of not less than Five Hundred Thousand Dollars ($500,000) or additional
increments of One Hundred Thousand Dollars ($100,000) or any integral multiple
thereof or (B) LIBOR Loans maturing on the last day of the Interest Period
applicable thereto in aggregate amounts of not less than Three Million Dollars
($3,000,000), or additional increments of One Million Dollars ($1,000,000) or
any integral multiple thereof.
(ii) The Borrowers may request more than one Revolving Credit Borrowing
on any Banking Day; provided, however, that if on the same Banking Day the
Borrowers request two or more Revolving Credit Borrowings which are comprised of
LIBOR Loans, each such Revolving Credit Borrowing of LIBOR Loans shall have an
Interest Period which is different in duration
22
from the Interest Periods in respect of the other such Revolving Credit
Borrowings of LIBOR Loans.
(iii) The Borrowers shall not request a Revolving Credit Borrowing
consisting of LIBOR Loans if, after giving effect to such request, there would
be outstanding more than ten (10) Revolving Credit Borrowings consisting of
LIBOR Loans.
(c) NOTES.
(i) The obligation of the Borrowers to repay Revolving Credit Loans
made by each Lender in respect of the Revolving Credit Facility and to pay
interest thereon shall be evidenced by a Revolving Credit Note of the Borrowers
substantially in the form of Exhibit A hereto, with appropriate insertions,
dated the date of this Agreement and payable to the order of such Lender on the
last day of the Commitment Period, in the principal amount of its Commitment.
(ii) The principal amount of the Revolving Credit Loans made by each
Lender, and all prepayments thereof and the applicable dates with respect
thereto shall be recorded by such Lender from time to time on any ledger or
other record of such Lender or such Lender shall record such information by such
other method as such Lender may generally employ; provided, however, that
failure to make any such record shall in no way detract from each Borrower's
obligations under any Note. The aggregate unpaid amount of the Revolving Credit
Loans shown on the records of such Lender shall be rebuttably presumptive
evidence of the principal amount owing and unpaid on such Revolving Credit Note,
as the case may be.
(d) NOTICE OF BORROWING. The obligation of each Lender to make
Revolving Credit Loans comprising a Revolving Credit Borrowing under the
Revolving Credit Facility is conditioned upon receipt by the Agent of a request
by Holdings on behalf of the Borrowers not later than 12:00 noon (Cleveland,
Ohio time) (i) on the Banking Day which is the requested date of a proposed
Revolving Credit Borrowing comprised of Prime Rate Loans and (ii) on a day which
is three (3) Banking Days prior to the Banking Day which is the requested date
of a proposed Revolving Credit Borrowing comprised of LIBOR Loans (except that
the Revolving Credit Borrowing requested on the Closing Date may be comprised of
LIBOR Loans so long as each of the Lenders shall have agreed to make LIBOR Loans
on the Closing Date without the notice required by this Section 3.l(d) and the
Borrowers shall have agreed in a writing satisfactory in form and substance to
the Agent to indemnify the Lenders in respect of any loss suffered by reason of
such accommodation). Each such request (a "Notice of Borrowing") shall be
transmitted by Holdings on behalf of the Borrowers to the Agent by telecopier or
such other means as the Agent agrees to in writing, substantially in the form of
Exhibit B, specifying therein the requested (A) date of the Revolving Credit
Loans comprising such Revolving Credit Borrowing, (B) Type of Revolving Credit
Loans comprising such Revolving Credit Borrowing, (C) aggregate amount of such
Revolving Credit Loans and (D) in the case of a proposed Revolving Credit
Borrowing comprised of LIBOR Loans, the initial Interest Period for such
Revolving Credit Loans. The Borrowers may give a Notice of Borrowing
telephonically so long as written confirmation of such Revolving Credit
Borrowing by delivery of written Notice of Borrowing is received by the Agent by
1:00 p.m. (Cleveland, Ohio time) on the same day such telephonic Notice of
Borrowing is given. The Agent may rely on such telephonic Notice of
23
Borrowing to the same extent that the Agent may rely on a written Notice of
Borrowing. Each Notice of Borrowing and telephonic Notice of Borrowing shall be
irrevocable and binding on the Borrowers and subject to the indemnification
provisions of this Article 3. The Borrowers shall bear all risks related to the
giving of a Notice of Borrowing telephonically or by such other method of
transmission as Holdings on behalf of the Borrowers shall elect. The Agent shall
give to each Lender reasonably prompt notice by telecopier on the day received
of each such Notice of Borrowing.
(e) LENDERS TO FUND AGENT. Each Lender shall, before the later of one
(1) hour after the Agent issues its notice to such Lender of a Notice of
Borrowing or 2:00 P.M. (Cleveland, Ohio time) on the date of each Revolving
Credit Borrowing, make available to the Agent, in immediately available funds at
the account of the Agent maintained at the Payment Office as specified by the
Agent to the Lenders prior to such date, such Lender's Ratable Portion of the
Revolving Credit Loans comprising such Revolving Credit Borrowing. On the date
requested by Holdings on behalf of the Borrowers for a Revolving Credit
Borrowing, after the Agent's receipt of the funds representing a Lender's
Ratable Portion of such Revolving Credit Borrowing and upon the Borrowers'
fulfillment of the applicable conditions set forth in this Article 3, the Agent
will make the funds of such Lender available to the Borrowers at the aforesaid
applicable Payment Office.
(f) AVAILABILITY OF FUNDS. Unless the Agent shall have received notice
from a Lender prior to the date (except in the case of Prime Rate Loans, in
which case prior to the time) of any Revolving Credit Borrowing that such Lender
will not make available to the Agent such Lender's Ratable Portion of the
Revolving Credit Borrowing, the Agent may assume that such Lender has made its
Ratable Portion of the Revolving Credit Borrowing available to the Agent on the
date of the Revolving Credit Borrowing in accordance with Section 3.1(e). In
reliance upon such assumption, the Agent may, but shall not be obligated to,
make available to the Borrowers on such date a corresponding portion of the
Revolving Credit Borrowing. If and to the extent that such Lender shall not have
made available to the Agent its Ratable Portion of the Loans to be made as to
the Revolving Credit Borrowing, such Lender and the Borrowers severally agree to
repay to the Agent, immediately upon demand, the corresponding portion of the
Revolving Credit Borrowing, together with interest thereon, for each day from
the date such amount is made available to the Borrowers until the date such
amount is repaid to the Agent (i) in the case of the Borrowers, at the interest
rate applicable at the time to the Revolving Credit Loans comprising such
Revolving Credit Borrowing and (ii) in the case of such Lender, at the Fed Funds
Rate. If such Lender shall repay to the Agent such corresponding portion of the
Revolving Credit Borrowing, the amount so repaid shall constitute such Lender's
Ratable Portion as part of such Revolving Credit Borrowing.
(g) FAILURE OF LENDER TO LOAN. The failure of any Lender to make the
Loan to be made by it as its Ratable Portion of any Revolving Credit Borrowing
shall not relieve any other Lender of its obligation hereunder to make its Loan
on the date of such Revolving Credit Borrowing. No Lender shall be responsible
for the failure of any other Lender to make the Loan to be made by such other
Lender on the date of any Revolving Credit Borrowing.
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(h) RATE CONVERSION AND CONTINUATION. The Borrowers shall have the
right to cause a Rate Conversion or Rate Continuation in respect of Revolving
Credit Loans then outstanding, upon request delivered by Holdings on behalf of
the Borrowers to the Agent not later than 12:00 noon (Cleveland, Ohio time) (i)
on the day which is the Banking Day that the Borrowers desire to convert any
LIBOR Loans comprising a Revolving Credit Borrowing into Prime Rate Loans so as
to comprise a Revolving Credit Borrowing, (ii) on the day that is three (3)
Banking Days prior to the Banking Day upon which the Borrowers desire to convert
any Prime Rate Loans comprising a Revolving Credit Borrowing into LIBOR Loans
for a given Interest Period so as to comprise a Revolving Credit Borrowing,
(iii) on the day which is three (3) Banking Days prior to the Banking Day upon
which the Borrowers desire to continue any LIBOR Loans comprising a given
Revolving Credit Borrowing as LIBOR Loans for an additional Interest Period of
the same duration so as to comprise a Revolving Credit Borrowing, (iv) on the
day which is three (3) Banking Days prior to the Banking Day upon which the
Borrowers desire to convert any LIBOR Loans having a particular Interest Period
comprising a Revolving Credit Borrowing into LIBOR Loans having a different
permissible Interest Period so as to comprise a Revolving Credit Borrowing,
provided, however, that each such Rate Conversion or Rate Continuation shall be
subject to the following:
(A) each Rate Conversion or Rate Continuation shall be funded
among the Lenders based upon each Lender's Ratable Portion of such
converted or continued Revolving Credit Loans comprising a Revolving
Credit Borrowing;
(B) if less than all the outstanding principal amount of the
Revolving Credit Loans comprising a Revolving Credit Borrowing is
converted or continued, the aggregate principal amount of such
Revolving Credit Loans converted or continued shall be (1) in the case
of LIBOR Loans, not less than Three Million Dollars ($3,000,000) or
additional increments of One Million Dollars ($1,000,000) in excess
thereof, and (2) in the case of Prime Rate Loans, not less than Five
Hundred Thousand Dollars ($500,000) or additional increments of One
Hundred Thousand Dollars ($100,000) in excess thereof;
(C) each Rate Conversion or Rate Continuation shall be
effected by each Lender by applying the proceeds of the Loan resulting
from such Rate Conversion or Rate Continuation to the Loan of such
Lender being converted or continued, as the case may be, and the
accrued interest on any such Loan (or portion thereof) being converted
or continued shall be paid to the Agent on behalf of each Lender by the
Borrowers at the time of such Rate Conversion or Rate Continuation;
(D) LIBOR Loans may not be converted or continued at a time
other than the end of the Interest Period applicable thereto unless the
Borrowers shall pay, upon demand, any amounts due to the Lenders
pursuant to Section 3.3(d);
(E) Revolving Credit Loans comprising a Revolving Credit
Borrowing may not be converted into or continued as LIBOR Loans less
than one month prior to the last day of the Commitment Period or for an
Interest Period which would continue after the last day of the
Commitment Period;
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(F) LIBOR Loans comprising a Revolving Credit Borrowing that
cannot be converted into or continued as LIBOR Loans by reason of
clause (E) shall be automatically converted at the end of the Interest
Period in effect for such LIBOR Loans into Prime Rate Loans comprising
a Revolving Credit Borrowing; and
(G) in connection with any Rate Conversion or Rate
Continuation, no Interest Period can be selected which ends after the
date of any reduction in the Total Commitment Amount unless, after
giving effect to such selection, the aggregate unpaid principal amount
of any then outstanding Prime Rate Loans taken together with the
principal amount of any then outstanding LIBOR Loans having Interest
Periods ending on or prior to the date of such reduction shall be at
least equal to the principal amount of the Revolving Credit Loans due
and payable on or prior to such reduction date.
Each such request for a conversion or continuation (a "Rate
Conversion/Continuation Request") in respect of Revolving Credit Loans
comprising a Revolving Credit Borrowing shall be transmitted by Holdings on
behalf of the Borrowers to the Agent, by telecopier, telex or cable (in the case
of telex or cable, confirmed in writing prior to the effective date of the Rate
Conversion or Rate Continuation requested), in substantially the form of Exhibit
C hereto, specifying (A) the identity and amount of the Revolving Credit Loans
comprising a Revolving Credit Borrowing that the Borrowers request be converted
or continued, (B) the Type of Revolving Credit Loans into which such Revolving
Credit Loans are to be converted or continued, (C) if such notice requests a
Rate Conversion, the date of the Rate Conversion (which shall be a Banking Day)
and (D) in the case of Revolving Credit Loans comprising a Revolving Credit
Borrowing being converted into or continued as LIBOR Loans, the Interest Period
for such LIBOR Loans. The Borrowers may make Rate Conversion/Continuation
Requests telephonically so long as written confirmation of such Revolving Credit
Borrowing is received by the Agent by 1:00 p.m. (Cleveland, Ohio time) on the
same day of such telephonic Rate Conversion/Continuation Request. The Agent may
rely on such telephonic Rate Conversion/Continuation Request to the same extent
that the Agent may rely on a written Rate Conversion/Continuation Request. Each
Rate Conversion/Continuation Request, whether telephonic or written, shall be
irrevocable and binding on the Borrowers and subject to the indemnification
provisions of this Article 3. The Borrowers shall bear all risks related to its
giving any Rate Conversion/Continuation Request telephonically or by such other
method of transmission as Holdings on behalf of the Borrowers shall elect. The
Agent shall promptly deliver on the day received a copy of each such Rate
Conversion/Continuation Request to the Lenders by telecopier.
SECTION 3.2 OPTIONAL REDUCTIONS; TERMINATION OF COMMITMENTS. The
Borrowers may, at any time and without payment of premium or penalty except as
set forth in Section 3.3, terminate in whole or from time to time in part reduce
the Total Commitment Amount of the Lenders by delivering to the Agent, not later
than 12:00 noon (Cleveland, Ohio time) three (3) Banking Days immediately
preceding the effective date of the reduction, a notice of such reduction (a
"Reduction Notice"), stating the amount by which the Total Commitment Amount is
to be reduced and the effective date of such reduction. Each reduction shall be
subject to the following: (i) each such reduction shall be in an aggregate
principal amount of not less than Five Million Dollars ($5,000,000) or any
integral multiple of $1,000,000 in excess thereof and (ii) each such reduction
shall be in an amount such that the Total Commitment Amount, as so
26
reduced, is not less than an amount equal to the aggregate of (A) the aggregate
principal amount of the Revolving Credit Loans then outstanding hereunder, PLUS
(B) the aggregate Risk Participation Exposure. The Borrowers shall not be
permitted to reduce the Total Commitment Amount unless, concurrently with any
reduction, the Borrowers shall make a principal payment on each Lender's then
outstanding Revolving Credit Loans in an amount equal to the excess, if any, of
such Revolving Credit Loans, PLUS the aggregate Risk Participation Exposure,
OVER the Commitment of such Lender as so reduced. The Agent shall promptly
notify each Lender of its proportionate amount and the date of each such
reduction. From and after each such reduction, the Facility Fees payable
hereunder shall be calculated upon the Commitments of the Lenders as so reduced.
Each reduction of the aggregate Commitments shall be made among the Lenders in
accordance with their respective Ratable Portions and shall be allocated ratably
to the Total Commitment Amount. Any partial reduction in the Total Commitment
Amount shall be irrevocable and effective during the remainder of the Commitment
Period. If the Borrowers terminate in whole the Commitments of the Lenders, on
the effective date of such termination (the Borrowers having prepaid in full the
unpaid principal balance, if any, of the Notes outstanding, together with all
interest (if any) and Facility Fees and Utilization Fees accrued and unpaid and
all other amounts due to the Agent or the Lenders hereunder, including, without
limitation, the satisfaction of all Obligations in respect of Letters of
Credit), all of the Notes outstanding shall be delivered to the Agent marked
"Canceled" and redelivered to the Borrowers.
SECTION 3.3 REPAYMENTS AND PREPAYMENTS; PREPAYMENT COMPENSATION.
(a) PRINCIPAL REPAYMENT. The Borrowers shall repay to the Agent for the
account of the Lenders the outstanding principal amount of the Revolving Credit
Loans under the Revolving Credit Facility (together with all accrued and unpaid
interest, Facility Fees, Utilization Fees and any other amounts owing to the
Lenders, or any thereof, under this Agreement) on the last day of the Commitment
Period (or in the case of a termination of the Commitment Period pursuant to
Section 3.3(e), below, on the date that is 30 days thereafter) or upon
acceleration pursuant to Section 12.1 or 12.2.
(b) PERMITTED PREPAYMENTS. Except as set forth in Section 3.3(d), the
Borrowers may prepay, without penalty or premium, not later than 12:00 noon
(Cleveland, Ohio time): (i) in the case of any LIBOR Loan, at least three (3)
Banking Days' notice to the Agent prior to the date fixed for such prepayment;
and (ii) in the case of any Prime Rate Loan, upon notice to the Agent not later
than 12:00 noon (Cleveland, Ohio time) on the date fixed for such prepayment, in
each case stating the proposed date and aggregate principal amount of the
prepayment, and, upon such notice, shall prepay the outstanding aggregate
principal amount of the Revolving Credit Loans comprising part of the same
Revolving Credit Borrowing in whole or ratably in part, together with accrued
interest to the date of such prepayment on the principal amount prepaid;
provided, however, that (A) each partial prepayment of LIBOR Loans shall be in
an aggregate principal amount of Three Million Dollars ($3,000,000) or
additional increments of One Million Dollars ($1,000,000) in excess thereof, and
(B) each partial prepayment of Prime Rate Loans shall be in an aggregate
principal amount of Five Hundred Thousand Dollars ($500,000) or additional
increments of One Hundred Thousand Dollars ($100,000) in excess thereof. Any
prepayment of any LIBOR Loans made on other than the last day of an Interest
Period shall obligate the Borrowers to reimburse the Lenders in respect thereof
pursuant to Section 3.3(d). Upon receipt
27
by the Agent of a notice pursuant to this Section 3.3(b), the Agent shall
promptly forward a copy of such notice, by telecopier in the case of a
prepayment of LIBOR Loans comprising Revolving Credit Borrowing, to each of the
Lenders.
(c) MANDATORY PREPAYMENTS. If on any Banking Day the aggregate
outstanding amount of the Revolving Credit Loans under the Revolving Credit
Facility PLUS the aggregate Risk Participation Exposures exceeds the Total
Commitment Amount then in effect, the Borrowers shall on such day prepay an
aggregate principal amount of the related Revolving Credit Loans in an amount at
least equal to such excess, together with accrued interest to the date of such
prepayment on the principal amount prepaid, to the Agent for the account of each
of the Lenders ratably in accordance with their Commitments. Any prepayment of
any LIBOR Loans made pursuant to this Section 3.3(c) on other than the last day
of an Interest Period shall obligate the Borrowers to reimburse the Lenders in
respect thereof pursuant to Section 3.3(d).
(d) BREAKAGE COMPENSATION. The Borrowers 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 (including loss of profits), 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: (i) if for
any reason (other than a default by such Lender or the Agent), a Credit Event of
LIBOR Loans does not occur on a date specified therefor in a Notice of Borrowing
or Rate Conversion/Continuation Request (whether or not rescinded or withdrawn
by or on behalf of the Borrowers or deemed rescinded or withdrawn pursuant to
this Agreement); (ii) if any repayment, prepayment, Rate Continuation or Rate
Conversion of any of its LIBOR Loans occurs on a date which is not the last day
of an Interest Period applicable thereto; (iii) if any prepayment of any of its
LIBOR Loans is not made on any date specified in a notice of prepayment given by
the Borrowers; (iv) if such Lender transfers its LIBOR Loans pursuant to a
request by the Borrowers under Section 3.9(d) hereof; or (vi) as a consequence
of any other default by the Borrowers to repay its LIBOR Loans when required by
the terms of this Agreement or any other election by the Borrowers pursuant to
the terms hereof.
(e) PREPAYMENT OF OBLIGATIONS UPON CHANGE OF CONTROL. (i) In the event
that any Change of Control shall occur or Holdings shall have knowledge of any
proposed Change of Control, Holdings shall give written notice (the "Borrower
Notice") of such fact to the Agent and each Lender. The Borrower Notice shall be
delivered promptly upon receipt of such knowledge by Holdings and in any event
no later than three (3) Banking Days following the occurrence of any Change of
Control. The Borrower Notice shall (A) describe the facts and circumstances of
such Change of Control in reasonable detail, (B) make reference to this Section
3.3(e) and the right of the Majority Lenders to require prepayment and discharge
in full of the Loans and all of the other Obligations on the terms and
conditions provided for in this Section 3.3(e), and (C) offer in writing to
prepay in full, no later than the Acceptance Prepayment Date (defined below),
the outstanding principal of the Loans, together with accrued interest to the
date of prepayment and all of the other Obligations, including, without
limitation, the cancellation of all outstanding Letters of Credit (or, at the
option of the Borrowers, the deposit with the Letter of Credit Issuer, on terms
satisfactory to the Letter of Credit Issuer, of cash collateral in an amount
equal the
28
aggregate of the respective Stated Amounts of all such Letters of Credit) and
any breakage compensation under Section 3.3(d), above. The Agent (at the
instruction of the Majority Lenders) shall have the right to accept such offer
on behalf of all of the Lenders and require the prepayment and discharge in full
of the outstanding principal of all of the Loans, together with accrued interest
to the date of prepayment and all of the other Obligations, including, without
limitation, the cancellation of all outstanding Letters of Credit (or, at the
option of the Borrowers, the deposit with the Letter of Credit Issuer, on terms
satisfactory to the Letter of Credit Issuer, of cash collateral in an amount
equal the aggregate of the respective Stated Amounts of all such Letters of
Credit) and any breakage compensation under Section 3.3(d), above, by written
notice to Holdings (the "Acceptance Notice") given not later than twenty (20)
days after the Agent's receipt of the Borrower Notice. If the Agent (at the
instruction of the Majority Lenders) accepts such offer, (1) the Borrowers
shall, no later than the date (the "Acceptance Prepayment Date") that is thirty
(30) days after the date on which the Agent delivers the Acceptance Notice to
Holdings, prepay and discharge in full the outstanding principal of all of the
Loans, together with accrued interest to the date of prepayment and all of the
other Obligations, including, without limitation, the cancellation of all
outstanding Letters of Credit (or, at the option of the Borrowers, the deposit
with the Letter of Credit Issuer, on terms satisfactory to the Letter of Credit
Issuer, of cash collateral in an amount equal the aggregate of the respective
Stated Amounts of all such Letters of Credit) and any breakage compensation
under Section 3.3(d), above, and (2) on the date on which the Agent delivers the
Acceptance Notice to Holdings, the Commitment of each Lender shall terminate in
full.
(ii) Without limiting the provisions of paragraph (i), above, if
Holdings fails to give the Borrower Notice required by paragraph (i), above,
upon and after the occurrence of a Change of Control, the Agent shall have the
right (at the instruction of the Majority Lenders), by delivery of written
notice to Holdings (the "Demand Notice"), to require the Borrowers to prepay and
discharge, and the Borrowers shall prepay and discharge, in full the outstanding
principal of all of the Loans, together with accrued interest to the date of
prepayment and all of the other Obligations, including, without limitation, the
cancellation of all outstanding Letters of Credit (or, at the option of the
Borrowers, the deposit with the Letter of Credit Issuer, on terms satisfactory
to the Letter of Credit Issuer, of cash collateral in an amount equal the
aggregate of the respective Stated Amounts of all such Letters of Credit) and
any breakage compensation under Section 3.3(d), above. The Demand Notice shall
be delivered by the Agent (upon instruction of the Majority Lenders) to Holdings
at any time after the Agent or any Lender has knowledge of such Change of
Control. Upon delivery of the Demand Notice to Holdings, (1) the Borrowers
shall, no later than the date (the "Demand Prepayment Date") that is thirty (30)
days after the date on which the Agent delivers the Demand Notice to Holdings,
prepay and discharge in full the outstanding principal of all of the Loans,
together with accrued interest to the date of prepayment and all of the other
Obligations, including, without limitation, the cancellation of all outstanding
Letters of Credit (or, at the option of the Borrowers, the deposit with the
Letter of Credit Issuer, on terms satisfactory to the Letter of Credit Issuer,
of cash collateral in an amount equal the aggregate of the respective Stated
Amounts of all such Letters of Credit) and any breakage compensation under
Section 3.3(d), above, and (2) on the date on which the Agent delivers the
Demand Notice to Holdings, the Commitment of each Lender shall terminate in
full.
29
(iii) Compliance with the provisions of paragraph (ii) of this Section
3.3(e) shall not be deemed to constitute a waiver of, or consent to, any
Incipient Default or Event of Default caused by any breach of the obligations of
Holdings under paragraph (i) of this Section 3.3(e); and, without limiting the
generality of the provisions of Section 11.1, below, the failure of the
Borrowers timely to prepay and discharge in full all of the Obligations if
required under and pursuant to either of paragraph (i) or (ii), above, shall
constitute an Event of Default under said Section 11.1.
SECTION 3.4 FEES.
(a) FACILITY FEE. The Borrowers agree during the Commitment Period to
pay to each Lender, through the Agent, at the dates specified herein, a facility
fee (the "Facility Fee") at a rate per annum equal to the Applicable Fee
Percentage from time to time in effect for Facility Fees, as determined pursuant
to Section 3.4(b), on the Commitment of such Lender. Such Facility Fee shall be
payable in arrears on each Quarterly Payment Date, commencing June 30, 2002, for
the calendar quarter year, or portion thereof, then ending and on the earlier
date on which the Commitment of such Lender shall be terminated or assigned in
whole (or in the case of a termination of the Commitment of such Lender pursuant
to Section 3.3(e), above, on the date that is 30 days thereafter).
(b) DETERMINATION OF APPLICABLE FEE PERCENTAGE. The Applicable Fee
Percentage shall be adjusted as herein specified as of the first day of the
Commitment Period and thereafter as of each Fee Adjustment Date, commencing with
the Fee Adjustment Date on June 1, 2002, by reference to (A) the financial
statements required by Section 8.1(a) or Section 8.1(b), as the case may be, for
the period ending as of the Fee Determination Date for such Fee Adjustment Date
and (B) a certificate complying with Section 8.1(c)(ii) certifying the Total
Leverage Ratio as of such Fee Determination Date. As of any such Fee Adjustment
Date and during the Accrual Period commencing on such date, the Applicable Fee
Percentage for Facility Fees shall be the Applicable Fee Percentage therefor
indicated in the definition of the term "Applicable Fee Percentage"
corresponding to the Total Leverage Ratio as of the Fee Determination Date for
such Fee Adjustment Date. Any such adjustment of the Applicable Fee Percentage
shall cease to be effective from the next Fee Adjustment Date.
(c) RISK PARTICIPATION FEE. The Borrowers shall pay to the Letter of
Credit Issuer, and the Letter of Credit Issuer shall share with the Lenders, on
a pro rata basis based on their respective Ratable Portions, a risk
participation fee (the "Risk Participation Fee") in an amount equal to the per
annum rate equal to the Applicable LIBOR Percentage in effect pursuant to
Section 3.5(b), TIMES the Stated Amount of each Letter of Credit as of the date
on which payment of the Risk Participation Fee is due and payable. The Borrowers
shall pay the Risk Participation Fee to the Letter of Credit Issuer in advance
on the date of issuance and, for Letters of Credit having a term longer than one
(1) year, on each anniversary of such date of issuance thereafter during the
term of such Letter of Credit, computed at the Applicable LIBOR Percentage in
effect on the date of issuance and, as applicable, each such subsequent
anniversary payment date. Upon receipt of any Risk Participation Fee, the Letter
of Credit Issuer shall pay such Risk Participation Fees to the Agent for the
account of the Lenders.
30
(d) FRONTING FEE. The Borrowers shall pay to the Letter of Credit
Issuer for its own account a fronting fee in an amount equal to the Stated
Amount of each Letter of Credit issued by the Letter of Credit Issuer TIMES
twelve and one-half (12.50) Basis Points, which fee shall be payable on the date
of such issuance.
(e) UP FRONT FEE. The Borrowers shall pay to the Agent, for the ratable
benefit of the Lenders, on the Closing Date a fee in the amount set forth in a
separate letter and term sheet between the Agent and Holdings dated April 5,
2002, which fee shall be deemed fully earned on the Closing Date.
(f) UTILIZATION FEE. The Borrowers shall (through the Agent) pay to the
Banks on the dates specified herein, a utilization fee (the "Utilization Fee")
at a rate of Ten (10) Basis Points per annum, computed on the entire unpaid
balance of the Revolving Credit Loans and the aggregate of the Stated Amounts of
all outstanding Letters of Credit for each day on which the sum of (i) the
aggregate outstanding principal balance of the Revolving Credit Loans on such
day, PLUS (ii) the aggregate of the Stated Amounts of all Letters of Credit then
outstanding, exceeds an amount equal to one-third (1/3) of the Commitment of
such Lender on such day. Such Utilization Fee shall be payable in arrears on
each Quarterly Payment Date, commencing June 30, 2002, in respect of the
calendar quarter year then ending and on the earlier date on which the
Commitment of such Lender shall be terminated or assigned in whole (or in the
case of a termination of the Commitment of such Lender pursuant to Section
3.3(e), above, on the date that is 30 days thereafter).
(g) AGENCY FEE. The Borrowers shall pay to the Agent in advance on the
Closing Date and on each anniversary thereof during the Commitment Period an
agency fee in the amount set forth in a separate fee letter between the Agent
and Holdings dated April 5, 2002, which fee shall be deemed fully earned on each
such date
(h) FEES NONREFUNDABLE. All fees set forth in this Section 3.4 and
closing fees payable pursuant to Sections 6.1 and 6.2 shall be paid on the date
due, in immediately available funds, to the Agent for distribution, if and as
appropriate, to the Lenders and, once paid, none of such fees shall be
refundable under any circumstances.
SECTION 3.5 INTEREST.
(a) REGULAR INTEREST. The Borrowers shall pay interest on the unpaid
principal amount of each Loan made by each Lender from the date of such Loan
until such principal amount shall be paid in full at the following times and
rates per annum:
(i) PRIME RATE LOANS. During such periods as a Revolving
Credit Loan is a Prime Rate Loan, a rate per annum equal at all times
to the Prime Rate in effect from time to time, payable quarterly, in
arrears, on each Quarterly Payment Date and on the date such Prime Rate
Loan shall be converted or paid in full and at maturity (whether by
reason of acceleration or otherwise).
31
(ii) LIBOR LOANS. During such periods as a Revolving Credit
Loan is a LIBOR Loan, a rate per annum equal to the sum of the Adjusted
LIBOR for the Interest Period of such LIBOR Loan, PLUS the Applicable
LIBOR Percentage in effect from time to time during the Interest Period
of such LIBOR Loan, in accordance with Section 3.1(h), payable (A) on
the last day of each Interest Period and (B) if such Interest Period
has a duration of more than three months, three months after the first
day of such Interest Period and (C) on the date such LIBOR Loan shall
be converted to a Prime Rate Loan or to a LIBOR Loan of a different
Interest Period or paid in full and at maturity (whether by reason of
acceleration or otherwise).
(b) APPLICABLE LIBOR PERCENTAGE; TERMS OF ADJUSTMENT.
(i) COMMENCEMENT; CONDITIONS. The Applicable LIBOR Percentage
shall be adjusted as herein specified as of the first day of the
Commitment Period and thereafter as of each Interest Adjustment Date,
commencing with the Interest Adjustment Date on June 1, 2002, by
reference to (A) the financial statements required by Section 8.1(a) or
Section 8.1(b) for the period ending as of the Interest Determination
Date for such Interest Adjustment Date and (B) a certificate complying
with Section 8.l(c)(ii) certifying the Total Leverage Ratio as of such
Interest Determination Date.
(ii) CALCULATION AND DURATION OF ADJUSTMENT. On each Interest
Adjustment Date and during the Accrual Period commencing on such date,
the Applicable LIBOR Percentage shall be the percent per annum in Basis
Points indicated in the definitions of the term "Applicable LIBOR
Percentage" corresponding to the Total Leverage Ratio as of the
Interest Determination Date for such Interest Adjustment Date.
(c) INTEREST ON UNPAID OBLIGATIONS; INTEREST UPON EVENT OF DEFAULT. If
any principal, interest or fees or other sum due under this Agreement shall not
be paid when due, or if any Revolving Credit Note shall not be paid at maturity,
whether such maturity occurs by reason of lapse of time or by operation of any
provision of acceleration of maturity therein contained (and without waiving any
Event of Default resulting therefrom or limiting any right or remedy of the
Lenders or the Agent in respect thereof), the principal thereof and the unpaid
interest and fees thereon, or such fees or other sum shall bear interest,
payable on demand, at the Increased Rate from time to time in effect in respect
of such Loan or other Obligation. The Borrowers acknowledge that this
calculation will result in the accrual of interest on interest and the Borrowers
expressly consent and agree to this provision. In addition, notwithstanding
anything to the contrary contained in this Agreement, upon and during the
continuance of an Event of Default, but without waiving such Event of Default or
limiting any right or remedy of the Lenders or the Agent in respect thereof, all
of the Obligations shall bear interest at the Increased Rate.
(d) INTEREST RATE DETERMINATION.
(i) AGENT DETERMINATION; NOTICE. The Agent shall determine the
Prime Rate and Adjusted LIBOR in accordance with the definitions of
Prime Rate, LIBOR Rate and Adjusted LIBOR set forth in Section 1.1. The
Agent shall give prompt notice to the
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Borrowers and the Lenders of the applicable interest rate determined by
the Agent for purposes of Section 3.5(a)(i) or (ii).
(ii) FAILURE OF BORROWERS TO ELECT. If no Interest Period is
specified in any Notice of Borrowing for any LIBOR Rate Loans
comprising a Revolving Credit Borrowing, the Borrowers shall be deemed
to have selected instead Prime Rate Loans. If Holdings, on behalf of
the Borrowers, shall not have given notice in accordance with Section
3.1(h) to continue any LIBOR Rate Loans comprising a Revolving Credit
Borrowing into a subsequent Interest Period (and shall not have
otherwise delivered a Rate Conversion/Continuation Request in
accordance with Section 3.1(h) to convert such Loans), subject to the
limitations set forth in Section 3.1(h), such LIBOR Rate Loans shall,
at the end of the Interest Period applicable thereto (unless repaid
pursuant to the terms hereof), automatically shall be converted to (or,
as the case may be, continued as) LIBOR Rate Loans having an Interest
Period of one (1) month, provided that if such limitations of Section
3.1(h) would not be complied with, such LIBOR Rate Loans automatically
shall be converted to Prime Rate Loans.
SECTION 3.6 PAYMENTS AND COMPUTATIONS.
(a) PAYMENTS. The Borrowers shall make each payment hereunder and under
the Notes with respect to principal of, interest on, and other amounts relating
to Revolving Credit Loans, not later than 11:00 A.M. (Cleveland, Ohio time) on
the day when due in dollars to the Agent in immediately available funds by
deposit of such funds to the Agent's account maintained at the Payment Office.
Payments received after 12:00 noon (Cleveland, Ohio time) on any day shall be
deemed to have been received on the next succeeding Banking Day. The Agent will
promptly thereafter, on the same Banking Day, cause to be distributed like funds
relating to the payment of principal, interest, Facility Fees, Utilization Fees
or other fees or other amounts which may be received in respect of the
Obligations of the Borrowers under this Agreement ratably (other than amounts
payable pursuant to the express terms of this Agreement solely to the Agent or
the Letter of Credit Issuer, as the case may be) to each of the Lenders for the
account of its respective Lending Office, and like funds relating to the payment
of any other amount payable to any Lender to such Lender for the account of its
Lending Office. The funds so distributed to each Lender shall in each case be
applied by such Lender in accordance with the terms of this Agreement.
(b) AUTHORIZATION TO CHARGE ACCOUNT. If and to the extent payment owed
to any Lender is not made when due hereunder or under the Note held by such
Lender, each Borrower hereby authorizes such Lender to charge from time to time
against any or all of such Borrower's general deposit accounts with such Lender
any amount so due. Any Lender exercising the foregoing authorization will
endeavor to advise such Borrower of such exercise reasonably promptly
thereafter; provided, however, that such Lender's failure to do so shall not
subject such Lender, the Agent or any other Lender to liability or claim of any
nature whatsoever and shall not create in any Borrower any set-off, defense or
other claim of any nature whatsoever.
(c) COMPUTATIONS OF INTEREST AND FEES. All computations of interest,
Facility Fees, Utilization Fees and Risk Participation Fees and all other fees
shall be made by the Agent, (i) in the case of LIBOR Loans, Risk Participation
Fees, Facility Fees and Utilization Fees, on the
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basis of a year of 360 days, and (ii) in the case of Prime Rate Loans, on the
basis of a year of 365/366 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest or fees are payable. Each determination by the Agent (or, in
the case of Section 3.7, by a Lender) of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.
(d) PAYMENT NOT ON BANKING DAY. Whenever any payment hereunder or under
the Notes shall be stated to be due on a day other than a Banking Day, such
payment shall be made on the next succeeding Banking Day, except, that, if such
extension would cause payment of interest on or principal of LIBOR Loans to be
made in the next following calendar month, such payment shall be made on the
immediately preceding Banking Day. Any such extension or reduction of time shall
in such case be included in the computation of payment of interest or Facility
Fee or Utilization Fee, as the case may be.
(e) PRESUMPTION OF PAYMENT IN FULL BY BORROWERS. Unless the Agent shall
have received notice from Holdings, on behalf of the Borrowers, prior to the
date on which any payment is due to the Lenders hereunder that the Borrowers
will not make such payment in full, the Agent may assume that the Borrowers will
make or have made such payment in full to the Agent on such date. In reliance
upon such assumption, the Agent may, but shall not be obligated to, distribute
to each Lender on such due date the amount then due such Lender. If and to the
extent the Borrowers shall not have made such payment in full to the Agent, each
Lender shall repay to the Agent promptly upon demand the amount distributed to
such Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Agent, at the Federal Funds Rate plus the amount of any costs,
expenses, liabilities or losses incurred by the Agent in connection with its
distribution of such funds, unless such costs, expenses, liabilities or losses
are the result of the gross negligence or wilful misconduct of the Agent.
SECTION 3.7 RESERVES; TAXES; INDEMNITIES.
(a) RESERVES OR DEPOSIT REQUIREMENTS. If at any time any Law, treaty or
regulation (including, without limitation, Regulation D of the Board of
Governors of the Federal Reserve System) or the interpretation thereof by any
governmental authority charged with the administration thereof or any central
bank or other fiscal, monetary or other authority shall impose (whether or not
having the force of Law), modify or deem applicable any reserve and/or special
deposit requirement (other than reserves included in the Reserve Percentage, the
effect of which is reflected in the interest rate(s) of the LIBOR Loan(s) in
question) against assets held by, or deposits in or for the amount of any loans
by, any Lender, and the result of the foregoing is to increase the cost (whether
by incurring a cost or adding to a cost) to such Lender of making or maintaining
hereunder LIBOR Loans or to reduce the amount of principal or interest received
by such Lender with respect to such LIBOR Loans, then upon demand by such Lender
the Borrowers shall pay to such Lender from time to time on Interest Adjustment
Dates with respect to such loans, as additional consideration hereunder,
additional amounts sufficient to fully compensate and indemnify such Lender for
such increased cost or reduced amount, assuming (which assumption such Lender
need not corroborate) such additional cost or reduced amount was allocable to
such LIBOR Loans. A certificate as to the increased cost or reduced amount as
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a result of any event mentioned in this Section 3.7(a), setting forth the
calculations therefor, shall be promptly submitted by such Lender to the
Borrowers and shall be rebuttably presumptive evidence as to the amount thereof.
Notwithstanding any other provision of this Agreement, after any such demand for
compensation by any Lender, the Borrowers, upon at least three (3) Banking Days'
prior written notice to such Lender through the Agent, may prepay the affected
LIBOR Loans in full or convert all LIBOR Loans to Prime Rate Loans regardless of
the Interest Period of any thereof. Any such prepayment or conversion shall
entitle the Lenders to the prepayment compensation provided for in Section 3.3
hereof. Each Lender will notify the Borrowers as promptly as practicable (with a
copy thereof delivered to the Agent) of the existence of any event which will
likely require the payment by the Borrowers of any such additional amount under
this Section.
(b) IMPOSITION OF TAXES. In the event that by reason of any Law,
regulation or requirement or in the interpretation thereof by an official
authority, or the imposition of any requirement of any central bank whether or
not having the force of Law, any Lender shall, with respect to this Agreement or
any transaction under this Agreement, be subjected to any tax, levy, impost,
charge, fee, duty, deduction or withholding of any kind whatsoever (other than
any tax imposed upon the total net income of such Lender) and if any such
measures or any other similar measure shall result in an increase in the cost to
such Lender of making or maintaining any LIBOR Loan or in a reduction in the
amount of principal, interest or commitment fee receivable by such Lender in
respect thereof, then such Lender shall promptly notify the Borrowers in writing
stating the reasons therefor. The Borrowers shall thereafter pay to such Lender
upon demand from time to time on Interest Adjustment Dates with respect to such
LIBOR Loans, as additional consideration hereunder, such additional amounts as
will fully compensate such Lender for such increased cost or reduced amount. A
certificate as to any such increased cost or reduced amount, setting forth the
calculations therefor, shall be submitted by such Lender to the Borrowers and
shall be rebuttably presumptive evidence of the amount thereof. Notwithstanding
any other provision of this Agreement, after any such demand for compensation by
any Lender, the Borrowers, upon at least three (3) Banking Days prior written
notice to such Lender through the Agent, may prepay the affected LIBOR Loans in
full or convert all LIBOR Loans to Prime Rate Loans regardless of the Interest
Period of any thereof. Any such prepayment or conversion shall entitle the
Lenders to prepayment compensation provided for in Section 3.3 hereof.
(c) EURODOLLAR DEPOSIT UNAVAILABLE OR INTEREST RATE UNASCERTAINABLE. In
respect of any LIBOR Loans, in the event that the Agent or any Lender shall have
determined that, by reason of circumstances affecting such market, adequate and
reasonable means do not exist for ascertaining the LIBOR rate applicable to such
Interest Period, as the case may be, the Agent or such Lender shall promptly
give notice of such determination to the Borrowers and (i) any notice of new
LIBOR Loans (or conversion of existing loans to LIBOR Loans) previously given by
the Borrowers and not yet borrowed (or converted, as the case may be) shall be
deemed a notice to make Prime Rate Loans, and (ii) the Borrowers shall be
obligated either to prepay or to convert any outstanding LIBOR Loans on the last
day of the then current Interest Period or Periods with respect thereto. Any
such prepayment or conversion shall entitle the Lenders to prepayment
compensation provided for in Section 3.3 hereof.
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(d) INDEMNITY. Without prejudice to any other provisions of this
Article 3, the Borrowers hereby agree to indemnify each Lender against any loss
or expense which such Lender may sustain or incur as a consequence of any
failure by the Borrowers to accept the proceeds of any LIBOR Loan, or otherwise
consummate a Revolving Credit Borrowing in respect of LIBOR Loans, requested by
the Borrowers pursuant to the provisions of this Agreement and of any default by
the Borrowers in payment when due of any amount due hereunder in respect of any
LIBOR Loan, including, but not limited to, any loss of profit, premium or
penalty incurred by such Lender in respect of funds borrowed by it for the
purpose of making or maintaining such LIBOR Loan, as determined by such Lender
in the exercise of its sole but reasonable discretion. A certificate as to any
such loss or expense shall be promptly submitted by such Lender to the Borrowers
and shall be rebuttably presumptive evidence of the amount thereof.
(e) CHANGES IN LAW RENDERING LIBOR LOANS UNLAWFUL. If at any time any
new Law, treaty or regulation, or any change in any existing Law, treaty or
regulation, or any interpretation thereof by any governmental or other
regulatory authority charged with the administration thereof, shall make it
unlawful for any Lender to fund any LIBOR Loans which it is committed to make
hereunder with moneys obtained in the Eurodollar market, the commitment of such
Lender to fund LIBOR Loans shall, upon the happening of such event, forthwith be
suspended for the duration of such illegality, and such Lender shall by written
notice to the Borrowers and the Agent declare that its Commitment with respect
to such Loans has been so suspended and, if and when such illegality ceases to
exist, such suspension shall cease and such Lender shall similarly notify the
Borrowers and the Agent. If any such change shall make it unlawful for any
Lender to continue in effect the funding in the applicable Eurodollar market of
any LIBOR Loan previously made by it hereunder, such Lender shall, upon the
happening of such event, notify the Borrowers, the Agent and the other Lenders
thereof in writing stating the reasons therefor, and the Borrowers shall, on the
earlier of (i) the last day of the then current Interest Period or (ii) if
required by such Law, regulation or interpretation, on such date as shall be
specified in such notice, either convert all LIBOR Loans to Prime Rate Loans to
the extent permissible under this Agreement or prepay all LIBOR Loans to the
Lenders in full. Any such prepayment or conversion shall entitle the Lenders to
prepayment compensation as provided in Section 3.3 hereof.
SECTION 3.8 CAPITAL ADEQUACY. If any Lender shall have determined,
that, whether in effect at the date of this Agreement or hereafter in effect,
any applicable Law, rule, regulation or guideline 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
with the interpretation or administration thereof, or compliance by any Lender
(or its Lending Office) 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, has or would have the effect of reducing the rate of return
on such Lender's capital allocated to the transactions contemplated by this
Agreement (or the capital of its holding company) as a consequence of its
obligations hereunder to a level below that which such Lender (or its holding
company) could have achieved but for such adoption, change or compliance (taking
into consideration such Lender's policies or the policies of its holding company
with respect to capital adequacy) by an amount deemed by such Lender to be
material, then from time to time, within 15 days after demand by such Lender
(with a copy to the Agent), the Borrowers shall pay to such Lender such
36
additional amount or amounts as will compensate such Lender (or its holding
company) for such reduction. Each Lender will designate a different lending
office if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender. A certificate of any Lender claiming
compensation under this section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive and binding in the
absence of manifest error. In determining such amount, such Lender may use any
reasonable averaging and attribution methods. Within four (4) months following
the date such certificate is furnished claiming compensation by any such Lender
(the "Affected Lender"), the Borrowers may replace the Affected Lender with a
lending institution satisfactory to the Agent (the consent to which may not be
unreasonably withheld by the Agent), upon payment to the Affected Lender of all
principal of and interest on all of its then outstanding Revolving Credit Loans
and of all Facility Fees, Utilization Fees and other Obligations then owing to
it and upon such other terms and conditions as are satisfactory to the Majority
Lenders. The protection of this Section 3.8 shall be available to each Lender
regardless of any possible contention of the invalidity or inapplicability of
the Law, regulation or other condition which shall have been imposed.
SECTION 3.9 TAXES.
(a) TAXES; WITHHOLDING. Any and all payments by the Borrowers
hereunder, under the Notes or the other Loan Documents shall be made, in
accordance with the provisions of Article 3, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Lender, taxes imposed on its income, and franchise taxes
imposed on it, by the jurisdiction under the Laws of which such Lender is
organized or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrowers shall be required by Law
to deduct any Taxes from or in respect of any sum payable hereunder or under any
Note to any Lender or the Agent, (i) the sum payable shall be increased as may
be necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 3.9) such Lender (as
the case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrowers shall make such deductions, and
(iii) the Borrowers shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable Law. All such Taxes
shall be paid by the Borrowers prior to the date on which penalties attach
thereto or interest accrues thereon; provided, however, that, if any such
penalties or interest become due, the Borrowers shall make prompt payment
thereof to the appropriate governmental authority. The Borrowers shall indemnify
each Lender for the full amount of such Taxes (including any Taxes on amounts
payable under this Section 3.9) paid by the Lender and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally asserted. Any
indemnification payment shall be made within thirty (30) days from the date the
Lender makes written demand therefor.
(b) STAMP TAXES. The Borrowers agree to pay, and will indemnify each
Lender and the Agent for, any present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies which arise from
any payment made hereunder or under the
37
Notes or from the execution, delivery or registration of, or otherwise with
respect to, this Agreement or the Notes (hereinafter referred to as "Other
Taxes").
(c) OTHER TAXES. The Borrowers shall indemnify each Lender and the
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 3.9) paid by such Lender or the Agent (as the case
may be) and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. Any indemnification payment shall be made within
thirty (30) days from the date such Lender or the Agent (as the case may be)
makes written demand therefor.
(d) REMOVAL OF LENDER. Within four (4) months following the date the
Agent or a Lender shall make a written demand for Taxes or Other Taxes pursuant
to this Section 3.9, the Borrowers may replace the Affected Lender with a
lending institution satisfactory to the Agent (the consent to which may not be
unreasonably withheld by the Agent), upon payment to the Affected Lender of all
principal of and interest on all of its then outstanding Revolving Credit Loans
and of all Facility Fees, Utilization Fees and other Obligations then owing to
it and upon such other terms and conditions as are satisfactory to the Majority
Lenders (exclusive of each Affected Lender and be computed without consideration
of the Commitment of each such Affected Lender). The protection of this Section
shall be available to each Lender regardless of any possible contention of the
invalidity or inapplicability of the law, regulation or other condition which
shall have been imposed.
(e) REQUEST FOR REFUND. At the reasonable request of Holdings, on
behalf of the Borrowers, a Lender or the Agent shall apply at the Borrowers'
expense for a refund in respect of Taxes or Other Taxes previously paid by the
Borrowers pursuant to this Section 3.9. Notwithstanding the foregoing, none of
the Lenders or the Agent shall be obligated to pursue such refund if, in its
sole good faith judgment, such action would be disadvantageous to it. If any
Lender subsequently receives from a taxing authority a refund of any Tax
previously paid by the Borrowers and for which the Borrowers have indemnified
the Lender pursuant to this Section 3.9, such Lender shall within thirty (30)
days after receipt of such refund, and to the extent permitted by applicable
Law, pay to the Borrowers the net amount of any such recovery after deducting
taxes and reasonable expenses attributable thereto.
(f) EXEMPTION CERTIFICATE. Not later than the commencement of the
Commitment Period or, in the case of any bank or financial institution that
becomes a Lender after such date, pursuant to Article 14, the date of the
instrument of assignment pursuant to which such bank or financial institution
became a Lender, and annually on each Anniversary Date thereafter or at such
other times as the Agent or the Borrowers may request, each Lender organized
under the Laws of a jurisdiction outside the United States shall provide the
Agent and the Borrowers with duly completed copies of Form 1001 or Form 4224 or
any successor form prescribed by the Internal Revenue Service of the United
States certifying that such Lender is exempt from United States withholding
taxes with respect to all payments to be made to such Lender hereunder or other
document satisfactory to Holdings, on behalf of the Borrowers, and the Agent
indicating that all payments to be made to such Lender hereunder are not subject
to such taxes (each such certificate, an "Exemption Certificate"). Unless the
Agent and Holdings have received an
38
Exemption Certificate from such Lender, the Borrowers, or the Agent if the
Borrowers have not withheld, may withhold taxes from such payments at the
applicable statutory rate (subject, in the case of the Borrowers to the
requirements of Section 3.9(a)); provided, however, that if the Borrowers have
withheld Holdings shall so notify the Agent. If the Borrowers are required to
pay additional amounts to any Lender pursuant to this Section 3.9, such Lender
shall use reasonable efforts to designate a different Lending Office if such
designation will thereafter avoid the need for any additional payments under
this Section 3.9 and will not, in the sole good faith judgment of such Lender,
be otherwise disadvantageous to such Lender in any material respect. A Lender
which ceases to be exempt from United States withholding taxes shall notify the
Agent and the Borrowers promptly thereof.
(g) FURNISHING OF CERTIFICATE. Within 30 days after the date of any
payment of Taxes, the Borrowers will furnish to the Agent, at its address set
forth on the signature page of the Agent to this Agreement or such other address
as the Agent notifies the Lenders, the original or a certified copy of a receipt
evidencing payment thereof.
(h) SURVIVAL OF PROVISION. Without prejudice to the survival of any
other agreement of the parties hereunder, but subject to Section 3.10, below,
the respective agreements, rights and liabilities of the Borrowers, the Agent
and the Lenders contained in this Section 3.9 shall survive the payment in full
of the outstanding Revolving Credit Loans, Facility Fees, Utilization Fees, Risk
Participation Fees, interest and termination of the Commitments hereunder.
SECTION 3.10 NO WAIVER; REIMBURSEMENT LIMITATION. Failure on the part
of any Lender to demand compensation, payment, or reimbursement of amounts under
any of Sections 3.7, 3.8 and 3.9, above, with respect to any period shall not
constitute a waiver of such Lender's rights to demand such compensation,
payment, or reimbursement in such period or in any other period; PROVIDED,
HOWEVER, that no Lender shall be entitled to compensation, payment, or
reimbursement of amounts under any of Sections 3.7, 3.8 and 3.9 for any amounts
incurred or accruing more than 270 days prior to the giving of notice to
Holdings of any cost, reduction, Taxes or other amount of the nature described
in any of such Sections, and PROVIDED FURTHER, HOWEVER, that, if such cost,
reduction, Tax or other amount is owing by a Lender by reason of a an audit or
assessment by governmental authority or change in law having effect on a date
earlier than the date on which such Lender receives notice thereof, then the
270-day period referred to above shall be extended to include such period of
retroactive effect.
ARTICLE 4
PRO RATA TREATMENT
SECTION 4.1 PRO RATA TREATMENT. Except as required by Section 3.7 or
Section 12.4(b) or as permitted under Section 3.9, each Revolving Credit
Borrowing, each participation in a Letter of Credit, each payment or prepayment
of principal of any Revolving Credit Borrowing, each payment of interest on the
Revolving Credit Loans, each payment of the Facility Fees, each payment of the
Utilization Fees, each payment of Risk Participation Fees, each reduction of the
Commitments, each Rate Conversion or Rate Continuation of Revolving Credit Loans
comprising a Revolving Credit Borrowing shall be allocated among the Lenders in
accordance
39
with each Lender's Ratable Portion of the Total Commitment Amount (or if the
Commitments shall have expired or been terminated, in accordance with the
respective principal amounts of each Lender's Revolving Credit Loans).
ARTICLE 5
LETTERS OF CREDIT
SECTION 5.1 LETTERS OF CREDIT.
(a) ISSUANCE. Subject to the terms and conditions set forth this
Agreement, upon written request from Holdings, on behalf of the Borrowers, a
copy of which is delivered to the Agent, the Letter of Credit Issuer will issue,
for the account of any Borrower, on or at any time after the commencement of the
Commitment Period but prior to the earlier of (i) fifteen (15) days prior to the
last day of the Commitment Period or (ii) the date on which the Lenders'
Commitments are terminated in full, whether pursuant to Section 3.2 or Article
12 hereof or otherwise, Letters of Credit in such form as Holdings, on behalf of
the Borrowers, and the Letter of Credit Issuer may agree, but in no case having
a final expiry date later than fifteen (15) Banking Days prior to last day of
the Commitment Period, and in all cases in compliance with all applicable
provisions of Law; provided, however, that, in no event shall (x) the aggregate
Risk Participation Exposure exceed the LC Sublimit or (y) the aggregate
principal amount of all Revolving Credit Loans, PLUS the aggregate Risk
Participation Exposure, exceed the Total Commitment Amount. The Agent shall
advise the Lenders promptly following the issuance of a Letter of Credit or
other event or condition which affects the Lenders' respective Risk
Participation Exposures.
(b) REIMBURSEMENT OBLIGATIONS. Each Letter of Credit issued by the
Letter of Credit Issuer hereunder shall be issued pursuant to the Letter of
Credit Issuer's standard and customary form of letter of credit application
and/or Reimbursement Agreement (or equivalent agreement otherwise named) then in
use under which the Borrowers are the reimbursement obligors and shall identify:
(i) the respective dates of issuance and expiry of such Letter of Credit (which
date of expiry shall not be later than fifteen (15) days prior to the last day
of the Commitment Period), (ii) the amount of such Letter of Credit (which shall
be a sum certain), (iii) the beneficiary and account party of such Letter of
Credit and (iv) the drafts and other documents (if any) necessary to be
presented to the Letter of Credit Issuer upon a drawing thereunder. To the
extent that any of the terms of the above-referenced Reimbursement Agreement
conflict with the terms of this Agreement, the terms of this Agreement shall
control.
(c) PAYMENT OF LETTER OF CREDIT OBLIGATIONS. The Borrowers hereby agree
to pay the Letter of Credit Issuer, on demand, the amount of each drawing under
any Letter of Credit issued by the Letter of Credit Issuer pursuant to this
Section, plus interest from the date of such drawing until paid in full to the
Letter of Credit Issuer by the Borrowers or pursuant to Section 5.2(b) hereof,
at an annual rate equal to the Prime Rate from time to time in effect.
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SECTION 5.2 LETTER OF CREDIT ISSUER RELATIONSHIP WITH LENDERS.
(a) RISK PARTICIPATION. The Letter of Credit Issuer hereby agrees that
it will sell simultaneously with the issuance of each Letter of Credit, and each
other Lender hereby agrees that it will buy simultaneously with the issuance of
each Letter of Credit (subject to the following sentence) a participation in any
payment which the Letter of Credit Issuer makes for the account of the Borrowers
under any such Letter of Credit for which payment the Letter of Credit Issuer is
not otherwise immediately reimbursed by the Borrowers in an amount equal to such
Lender's Ratable Portion. The aggregate principal amount of all outstanding
Revolving Credit Loans of such Lender, PLUS such Lender's aggregate Risk
Participation Exposure (after taking into effect such Lender's Ratable Portion
of the risk participation created under this Section 5.2) shall not exceed such
Lender's Commitment in effect from time to time. The sale of the risk
participation by the Letter of Credit Issuer and the purchase thereof by each
Lender, respectively, shall occur simultaneously with and shall be evidenced by
each Letter of Credit.
(b) REIMBURSEMENT OF LETTER OF CREDIT ISSUER. The Letter of Credit
Issuer will notify the Agent, who will promptly notify each other Lender, if the
Letter of Credit Issuer makes any payment under any Letter of Credit. Upon
demand by the Agent each such other Lender shall pay to the Agent that Lender's
Ratable Portion of each such payment made by the Letter of Credit Issuer. Each
such payment shall for all purposes hereunder be deemed to be a Prime Rate Loan
(it being understood that (i) each Lender's obligation to make such payment is
absolute and unconditional and shall not be affected by any event or
circumstance whatsoever, including the occurrence of any Incipient Default
hereunder or the failure of any condition precedent set forth in Article 7 to be
satisfied and (ii) each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever). In addition, upon demand by the
Letter of Credit Issuer through the Agent, each other Lender will pay an amount
equal to such Lender's Ratable Portion of all costs and expenses not reimbursed
by the Borrowers which have been incurred or made by the Letter of Credit Issuer
as the result of, or in connection with, any action including, but not limited
to, legal action which may be taken by Agent to obtain reimbursement for
payments made by Agent under any Letter of Credit, unless such costs and
expenses are the result of the gross negligence or willful misconduct of, as the
case may be, the Letter of Credit Issuer or the Agent.
(c) RIGHTS AND OBLIGATIONS OF LETTER OF CREDIT ISSUER. Neither the
Letter of Credit Issuer, nor any of its correspondents, shall be responsible,
provided it has exercised reasonable care, as to any document presented under a
Letter of Credit, or any renewal or extension thereof, which appears to be
regular on its face and appears on its face to conform to the terms of the
Letter of Credit and to make reasonable reference thereto, for the validity or
sufficiency of any signature or endorsement, for delay in giving any notice or
failure of any instrument to bear adequate reference to the Letter of Credit, or
to any renewal or extension thereof, or failure of documents not clearly
specified in the Letter of Credit to accompany any instrument at negotiation, or
for failure of any person to note the amount of any draft on the reverse of the
Letter of Credit or on any renewal or extension thereof. Any action, inaction or
omission on the part of the Letter of Credit Issuer or any of its
correspondents, under or in connection with any Letter of Credit or any renewal
or extension thereof or the related instruments or documents, if in good faith
and in conformity with such Laws, regulations or customs as are applicable and
the terms of this
41
Section 5.2, shall be binding upon the Borrowers and shall not place the Letter
of Credit Issuer or any of its correspondents under any liability to any
Borrower, in the absence of negligence by the Letter of Credit Issuer or its
correspondents. The Letter of Credit Issuer's rights, powers, privileges and
immunities specified in or arising under this Agreement are in addition to any
heretofore or at any time hereafter otherwise created or arising, whether by
statute or rule of Law or contract.
(d) EFFECT OF APPLICABLE LAW OR CUSTOM. All Letters of Credit issued
hereunder will, except to the extent otherwise expressly provided, be governed
by the International Standby Practices, as adopted by the International Chamber
of Commerce at the time of issuance of the Letter of Credit.
(e) TERMINATION OF LETTER OF CREDIT COMMITMENT. In the event that (i)
any restriction is imposed on the Letter of Credit Issuer (including, without
limitation, any legal lending or acceptance limits imposed by the United States
of America or any political subdivision thereof) which in the reasonable
judgment of the Letter of Credit Issuer would prevent the Letter of Credit
Issuer from issuing Letters of Credit or maintaining its commitment to issue
Letters of Credit or (ii) there shall have occurred, at any time during the term
of this Agreement (A) any adverse change or a development involving a
prospective adverse change affecting the condition of any of the Borrowers which
would materially impair the ability of the Borrowers to meet their obligations
under this Article 5, (B) any outbreak of hostilities or other national or
international crisis or change in economic conditions if the effect of such
outbreak, crisis or change would make the creation of Letters of Credit or the
discount or sale thereof impracticable, or (C) the enactment, publication,
decree or other promulgation of any statute, regulation, rule or order of any
court or other governmental authority which would materially and adversely
affect the ability of the Borrowers to perform their obligations under this
Agreement, then the Letter of Credit Issuer, through the Agent, in the case of
the occurrence of any event described above, shall give written notice of the
occurrence of such event to the Borrowers and the Lenders, whereupon the
commitment of the Letter of Credit Issuer to issue Letters of Credit shall
terminate on the effective date of such notice. The Borrowers shall forthwith
pay to the Letter of Credit Issuer all obligations in respect of Letters of
Credit on the date of drawing of such Letter of Credit.
SECTION 5.3 RESIGNATION AND REMOVAL OF LETTER OF CREDIT ISSUER. The
Letter of Credit Issuer (or any successor) may at any time resign (so long as,
at the same time, the institution then serving as the Letter of Credit Issuer
also resigns as Agent in the manner provided in Section 13.13, below, unless
Holdings, on behalf of the Borrowers, has waived in writing the requirements of
this parenthetical) as such by giving thirty (30) days' prior written notice to
the Agent, the Borrowers and each Lender; and the Majority Lenders may remove
the Letter of Credit Issuer at any time with or without cause by giving written
notice to the Agent, the Letter of Credit Issuer and the Borrowers. In any such
case, the Majority Lenders may appoint a successor to the resigned or removed
Letter of Credit Issuer (the "Former LC Bank"), which successor shall (unless
waived by Holdings, on behalf of the Borrowers, in writing) also be successor
Agent, provided that the Majority Lenders obtain the Borrowers' prior written
consent to the successor (which consent shall not be unreasonably withheld), by
giving written notice to the Agent, the Borrowers, the Former LC Bank and each
Lender not participating in the
42
appointment; provided, however, that, if at the time of the proposed resignation
or removal of a Letter of Credit Issuer, any Borrower is the subject of an
action referred to in Section 11.7 or any other Event of Default shall have
occurred and be continuing, the Borrowers' consent shall not be required. In the
absence of a timely appointment, the Former LC Bank shall have the right (but
not the duty) to make a temporary appointment of any Lender (but only with that
Lender's consent) to act as its successor pending an appointment pursuant to the
immediately preceding sentence. In either case, the successor Letter of Credit
Issuer shall deliver its written acceptance of appointment to the Borrowers, the
Agent, each Lender and the Former LC Bank, whereupon (a) the Former LC Bank
shall execute and deliver such assignments and other writings as the successor
Letter of Credit Issuer may reasonably require to facilitate its being and
acting as the Letter of Credit Issuer, (b) the successor Letter of Credit Issuer
shall in any event automatically acquire and assume all the rights and duties as
those prescribed for the Letter of Credit Issuer by this Article 5 and (c) the
Former LC Bank shall be discharged from its duties and obligations under this
Agreement and the other Loan Documents. Notwithstanding anything to the contrary
contained in the foregoing, the Former LC Bank shall continue to enjoy all of
the rights and remedies (as against the Borrowers and the other Lenders)
provided to the Letter of Credit Issuer hereunder with respect to any and all
Letters of Credit which are outstanding on the effective date of its resignation
or removal and which are not replaced by Letters of Credit issued by its
successor or otherwise canceled.
ARTICLE 6
OPENING COVENANTS; CONDITIONS TO INITIAL CREDIT EVENT
SECTION 6.1 OPENING COVENANTS. Prior to or concurrently with the
execution and delivery of this Agreement, Holdings shall, on behalf of the
Borrowers, furnish to Agent originals or copies for delivery to each Lender and
the Letter of Credit Issuer of the following:
(a) BORROWER CERTIFICATES. A certificate executed by an authorized
officer of Holdings and each other Borrower and a secretary or assistant
secretary of Holdings and each other Borrower certifying (a) the resolutions of
the Board of Directors of such Borrower authorizing the execution, performance
and delivery of this Agreement, the Notes and all other Loan Documents, (b) the
names and signatures of the officers of such Borrower executing or attesting to
such documents, and (c) the absence of any Event of Default or Incipient
Default;
(b) GOOD STANDING CERTIFICATES. Certificates of good standing for
Holdings and each other Borrower, certified by the office of the Secretary of
State or other similar official of the state of incorporation of such entities,
and certificates of qualification to transact business as a foreign corporation
or other entity in every other State where such Borrower's failure so to qualify
could have a Material Adverse Effect;
(c) PAYMENT OF AGENT'S LEGAL FEES. Evidence of payment to the Agent,
for its own account, of the legal fees and expenses of the Agent.
43
SECTION 6.2 PRIOR TO INITIAL CREDIT EVENT. Prior to or concurrently
with the occurrence of the Initial Credit Event, Holdings shall, on behalf of
the Borrowers, furnish to Agent originals or copies for delivery to each Lender
and the Letter of Credit Issuer of the following:
(a) REVOLVING CREDIT NOTES. Revolving Credit Notes, in favor of each of
the Lenders, in the principal amount of such Lender's Commitment;
(b) EXISTING CREDIT FACILITY. Contemporaneously with the Initial Credit
Event hereunder, the Borrowers shall have terminated the commitments of the
lenders under the Existing Credit Agreements and prepaid (with such exceptions
as may be agreed to by the Agent and the Lenders) all borrowings thereunder,
including letters of credit outstanding thereunder;
(c) CREDIT REQUEST AND DISBURSEMENT DIRECTION LETTER. To the extent, if
any, that an advance of Loans on such date is to be requested, a Notice of
Borrowing and a letter from Holdings, on behalf of the Borrowers, directing the
Agent to disburse the proceeds of the initial Revolving Credit Borrowing;
(d) LEGAL OPINION. A favorable opinion of counsel for the Borrowers,
all in form and substance reasonably acceptable to the Agent;
(e) BORROWER CERTIFICATE. A certificate executed by an authorized
officer of each Borrower and a secretary or assistant secretary of each Borrower
certifying the absence of any Event of Default or Incipient Default;
(f) LETTER OF CREDIT REIMBURSEMENT AGREEMENT. A Letter of Credit
Reimbursement Agreement duly executed by the applicable Borrower with respect to
any Letter of Credit issued on the Closing Date;
(g) CLOSING FEES. The Borrowers shall have paid to each Lender the
upfront fee provided for in Section 3.4(e);
(h) OTHER MATTERS. Such other documents, certificates and other matters
as the Agent may reasonably request of Holdings and any of the other Borrowers.
ARTICLE 7
CONDITIONS TO ALL CREDIT EVENTS
On the date of each Credit Event, such Credit Event shall constitute a
representation and warranty by the Borrowers that the following are and will be
true as of such date and after giving effect to such Credit Event, and each of
the following shall be true as a condition precedent thereto:
SECTION 7.1 REPRESENTATION BRINGDOWN. The representations and
warranties contained in Article 10 are true and correct in all respects on and
as of the date of such Credit Event with
44
the same effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date;
SECTION 7.2 COMPLIANCE WITH AGREEMENT. The Borrowers shall be in
compliance with all other terms and provisions set forth herein and in each
other Loan Document on its part to be observed or performed, and at the time of
and immediately after such Credit Event, no Event of Default or Incipient
Default shall have occurred and be continuing; and
SECTION 7.3 NO MATERIAL ADVERSE CHANGE. There has been no event since
the date hereof which would or might reasonably be expected to have a Material
Adverse Effect.
ARTICLE 8
AFFIRMATIVE COVENANTS
From and after the Closing Date through the commencement of the
Commitment Period and for so long thereafter as any of the Obligations remain
unpaid and outstanding, or any Lender shall have any Commitment outstanding, or
any Loans shall remain unpaid, the Borrowers shall perform and observe, and
shall cause all of the other Lincoln Parties to perform and observe, all of the
following covenants:
SECTION 8.1 FINANCIAL STATEMENTS.
(a) QUARTERLY FINANCIAL STATEMENTS. Holdings shall furnish to each
Lender promptly, and in any case within forty-five (45) days after the end of
each of the first three (3) Fiscal Quarters of each of its Fiscal Years,
unaudited Consolidated balance sheet of Holdings as at the end of that period
and the related unaudited Consolidated statements of income and cash flows, 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, all prepared in accordance with GAAP and otherwise in form and
detail satisfactory to each Lender and certified by a financial officer of
Holdings.
(b) ANNUAL FINANCIAL STATEMENTS. Holdings shall furnish to each Lender
as soon as available and in any event within 90 days after the close of each
Fiscal Year of Holdings, the Consolidated balance sheets of Holdings and its
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 Holdings, which opinion shall be
unqualified and shall (A) 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 respects, the Consolidated financial position of
Holdings and its 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 (B) contain such
statements
45
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).
(c) OFFICER'S CERTIFICATES. Holdings shall furnish to each Lender the
following:
(i) concurrently with the financial statements delivered in
connection with clauses (a) and (b) above, a certificate of a
responsible financial officer of Holdings, certifying that (A) to his
or her knowledge and belief, those financial statements fairly present
in all material respects the financial condition and results of
operations of Holdings and its Subsidiaries (subject, in the case of
interim financial statements, to routine year-end audit adjustments)
and (B) no Incipient Default or Event of Default then exists or if any
does, a brief description thereof and of Holdings' intentions in
respect thereof, and
(ii) within forty-five (45) days after the end of each of the
first three (3) Fiscal Quarters of any Fiscal Year and within ninety
(90) days after the end of any Fiscal Year, a certificate of a
responsible financial officer of Holdings, in the form of Exhibit E
hereto, setting forth the calculations necessary to determine whether
or not the Borrowers are in compliance with Sections 9.7 and 9.8
hereof.
(d) 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
Holdings or any of its Subsidiaries files with the SEC on Form 10-K, 10-Q or 8-K
(or any successor forms).
(e) 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 Holdings furnishes to its stockholders generally.
(f) OTHER INFORMATION. With reasonable promptness, such other
information or documents (financial or otherwise) relating to Holdings or any of
its Subsidiaries as any Lender may reasonably request from time to time.
(g) FISCAL YEAR. Holdings shall not change its Fiscal Year and shall
not permit any of its Subsidiaries to change its respective fiscal year unless
(i) Holdings has delivered to the Agent written notice thereof at least thirty
(30) days prior to the effectiveness of such change, and (ii) the Borrowers have
executed and delivered to the Agent and the Lenders such amendments to this
Agreement and other Loan Documents as Agent or the Majority Lenders may
reasonably require to cause the provisions of this Agreement and the other Loan
Documents immediately after such change to have the same effect as that intended
by the provisions of this Agreement and the other Loan Documents immediately
prior to such change.
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SECTION 8.2 NOTICE.
(a) NOTICE OF DEFAULT; OTHER EVENTS. Holdings shall give each Lender
prompt written notice as soon as possible, and in any event within five (5)
Banking Days after any responsible officer of any Lincoln Party obtains
knowledge thereof, of (i) the occurrence of any Incipient Default or Event of
Default or of any development which in such officer's reasonable belief would or
might reasonably be expected to result in a Material Adverse Effect, setting
forth the details of such Incipient Default or such development and the action
that such Lincoln Party has taken or proposes to take with respect thereto or
(ii) any litigation or governmental or regulatory proceeding against any Lincoln
Party which is likely to have a Material Adverse Effect.
(b) NOTICE OF ERISA MATTERS. Promptly, and in any event within 10 days
after receipt from any ERISA Regulator of notice of, or a responsible officer of
any Borrower otherwise becoming aware of, any of the following, Holdings shall
give the Agent written notice setting forth the nature thereof and the action,
if any, that Holdings or an ERISA Affiliate proposes to take with respect
thereto:
(i) the occurrence of a Default under ERISA;
(ii) with respect to any Plan, any Reportable Event;
(iii) the taking by the Pension Benefit Guaranty Corporation of steps
to institute, or the threatening by the Pension Benefit Guaranty
Corporation of the institution of, proceedings under section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by Holdings or any ERISA Affiliate
of a notice from a Multiemployer Plan that such action has been taken
by the Pension Benefit Guaranty Corporation with respect to such
Multiemployer Plan (including a copy of any notice thereof); or
(iv) any event, transaction or condition that could result in the
incurrence of any liability by Holdings or any ERISA Affiliate pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of
the Code relating to employee benefit plans (as defined in Section 3 of
ERISA), or in the imposition of any Lien on any of the rights,
properties or assets of Holdings or any ERISA Affiliate pursuant to
Title I or IV of ERISA or such penalty or excise tax provisions, if
such liability or Lien, taken together with any other such liabilities
or Liens then existing, would reasonably be expected to have a Material
Adverse Effect.
(c) ENVIRONMENTAL REPORTING. Holdings shall give each Lender prompt,
and in any event within ten (10) days of the date any Lincoln Party receives or
transmits, as the case may be, copies of all material communications with any
government or governmental agency relating to Environmental Laws.
SECTION 8.3 INSURANCE. Each Lincoln Party shall keep itself and all of
its insurable properties insured at all times to such extent, by such insurers,
and against such hazards and liabilities as is customarily carried by prudent
businesses of like size and enterprise; and promptly upon the Agent's written
request upon and during the continuance of an Event of
47
Default, Holdings shall furnish to the Agent such information about any such
insurance as the Agent may from time to time reasonably request, which
information shall be prepared in form and detail satisfactory to the Agent and
certified by an appropriate officer of Holdings.
SECTION 8.4 MONEY OBLIGATIONS. Each Lincoln Party shall pay, in full
(a) all taxes, assessments and governmental charges and levies (except only
those so long as and to the extent that the same shall be contested in good
faith by appropriate and timely proceedings) for which such Lincoln Party may be
or become liable, or to which any or all of the properties of such Lincoln Party
may be or become subject, prior to the date on which the failure to make such
payment would reasonably be expected to have a Material Adverse Effect, and (b)
all of its other obligations calling for the payment of money (except only those
so long as and to the extent that the same shall be contested in good faith and
except further trade accounts payable consistent with such Lincoln Party's past
practice) before such payment becomes overdue where the failure to make such
payment would reasonably be expected to have a Material Adverse Effect.
SECTION 8.5 RECORDS.
(a) Each Lincoln Party shall at all times maintain true and complete
records and books of account and, without limiting the generality of the
foregoing, maintain appropriate reserves for possible losses and liabilities,
all in accordance with GAAP in all material respects.
(b) If no Incipient Default or Event of Default then exists, the
Borrowers shall permit the Agent, at the expense of the Lenders, and any Lender,
at the expense of such Lender, and upon reasonable prior notice to Holdings, to
visit the principal executive office of each Borrower, to discuss the affairs,
finances and accounts of the Borrowers and the other Subsidiaries with each
Borrower's officers and, with the consent of Holdings (which consent will not be
unreasonably withheld), to visit the other offices and properties of the
Borrowers and the Subsidiaries and to make copies and extracts from the books
and records of such Borrowers and Subsidiaries, all at such reasonable times and
as often as may be reasonably requested; and
(c) If any Incipient Default or Event of Default then exists, the
Borrowers shall permit the Agent and any Lender, at the expense of the
Borrowers, to visit and inspect any of the offices or properties of each
Borrower or any other Subsidiaries, to examine all their respective books of
account, records, reports and other papers, to make copies and extracts
therefrom, and to discuss their respective affairs, finances and accounts with
their respective officers and independent public accountants (and by this
provision each Borrower hereby authorizes said accountants to discuss the
affairs, finances and accounts of such Borrower and its Subsidiaries), all at
such times and as often as may be determined by the Agent or such Lender.
SECTION 8.6 FRANCHISES. Each Lincoln Party shall preserve and maintain
at all times its corporate existence, rights and franchises, except where the
failure to maintain any such corporate right or franchise would reasonably not
be expected to have a Material Adverse Effect; PROVIDED, HOWEVER, that this
Section 8.6 shall not prevent any merger or consolidation permitted by Section
9.3 hereof.
48
SECTION 8.7 CERTAIN SUBSIDIARIES TO JOIN AS BORROWER. In the event that
at any time after the Closing Date any Borrower directly or indirectly has any
Significant Subsidiary that is not a Borrower, Holdings shall notify the Agent
in writing of such event, identifying the Significant Subsidiary in question and
referring specifically to the rights of the Agent and the Lenders under this
Section 8.7. Holdings shall, within 30 days following request therefor from the
Agent, cause such Significant Subsidiary to deliver to the Agent (i) a joinder
to this Agreement and such other Loan Documents as the Agent reasonably requires
to cause such Significant Subsidiary to be a Borrower hereunder and (ii) if such
Significant Subsidiary is a corporation, resolutions of the Board of Directors
of such Significant Subsidiary, certified by the Secretary or an Assistant
Secretary of such Significant Subsidiary as duly adopted and in full force and
effect, authorizing the execution and delivery thereof, or if such Significant
Subsidiary is not a corporation, such other evidence of the authority of such
Significant Subsidiary to execute such joinder and other Loan Documents, as the
Agent may reasonably request.
SECTION 8.8 MOST FAVORED COVENANT STATUS. If any one or more of the
Borrowers at any time after the Closing Date, issues or guarantees any unsecured
Indebtedness denominated in Dollars for money borrowed or represented by bonds,
notes, debentures or similar securities in an aggregate amount exceeding
$25,000,000, 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 such Borrower or
Borrowers, other than those set forth herein or in any of the other Loan
Documents, Holdings shall promptly so notify the Agent and the Lenders and, if
the Agent shall, at the instruction of the Majority Lenders, so request by
written notice to Holdings, the Borrowers, the Agent and the Lenders shall
promptly amend this Agreement to incorporate some or all of such provisions, in
the discretion of the Majority Lenders, into this Agreement and, to the extent
necessary and reasonably desirable to the Majority Lenders, into any of the
other Loan Documents.
SECTION 8.9 COMPLIANCE WITH LAWS. Each Lincoln Party shall comply in
all respects with its Articles of Incorporation or Certificate of
Incorporation(or equivalent organization documentation), as the case may be, and
Regulations or By-laws, as the case may be (or equivalent organization
documentation), and all applicable occupational safety and health Laws, federal
and state securities Laws, product safety Laws, Environmental Laws and every
other Law, treaty, rule, regulation, determination of an arbitrator, and every
lawful governmental order or determination if non-compliance with such Law or
order would have or might reasonably be expected to have a Material Adverse
Effect; provided, however, that this Section 8.9 shall not apply to any
noncompliance if and to the extent that the same is being contested in good
faith by timely and appropriate proceedings which are effective to stay
enforcement thereof and against which appropriate reserves have been
established.
49
SECTION 8.10 PROPERTIES. Each Lincoln Party shall maintain all assets
in any material respect necessary to its continuing operations in good working
order and condition, ordinary wear and tear excepted.
SECTION 8.11 USE OF PROCEEDS. The Borrowers shall use the proceeds of
the Loans and the Letters of Credit only for the purposes specified in Section
2.2.
ARTICLE 9
NEGATIVE COVENANTS
From and after the Closing Date through the commencement of the
Commitment Period and for so long thereafter as any of the Obligations remain
unpaid and outstanding, or any Lender shall have any Commitment outstanding, or
any Loans shall remain unpaid, the Borrowers shall perform and observe, and
shall cause all of the other Lincoln Parties to perform and observe, all of the
following covenants:
SECTION 9.1 ERISA COMPLIANCE. The Borrowers shall not permit (i) any
Plan to fail to satisfy the minimum funding standards of ERISA or the Code, for
any plan year or part thereof or a waiver of such standards or extension of any
amortization period is sought or granted under section 412 of the Code, (ii) the
aggregate "amount of unfunded benefit liabilities" (within the meaning of
section 4001(a)(18) of ERISA) under all Plans, determined in accordance with
Title IV of ERISA, to exceed $50,000,000, (iii) Holdings or any ERISA Affiliate
to incur any liability pursuant to Title I or IV of ERISA or the penalty or
excise tax provisions of the Code relating to employee benefit plans (as defined
in Section 3 of ERISA), or (iv) Holdings or any Subsidiary to establish or amend
any employee welfare benefit plan (as defined in Section 3 of ERISA) that
provides post-employment welfare benefits in a manner that would increase the
liability of Holdings or any Subsidiary thereunder, unless any such event or
events described in clauses (i) through (iv), above, either individually or
together with any other such event or events, would reasonably not be expected
to have a Material Adverse Effect.
SECTION 9.2 INVESTMENTS. No Lincoln Party shall make or have
outstanding any Investment, other than:
(a) Investments by a Lincoln Party in and to its Subsidiaries on the
date hereof, and after the date hereof, (i) any Investment in assets that is a
Permitted Acquisition and (ii) any Investment in any Person which, after giving
effect to such Investment, becomes a Subsidiary of such Lincoln Party under a
Permitted Acquisition, so long as such Lincoln Party causes such Subsidiary to
comply with the requirements of Section 8.7, above;
(b) Investments of the Lincoln Parties existing as of the Closing Date
and described on Schedule 9.2 hereto;
(c) Investments in Cash Equivalents;
(d) Investments in mutual funds registered under the Investment Company
Act of 1940, as amended, which invest only in either money market securities or
United States
50
Governmental Securities, in either case, maturing within three years from the
date of acquisition thereof by such mutual fund;
(e) Subject to the limitations provided for under Section 9.3(c)
hereof, Investments in Special Purpose Companies incidental to the consummation
of Qualifying Securitization Transactions;
(f) Investments in property to be used in the ordinary course of
business of the Borrowers and their Subsidiaries;
(g) Investments in current assets arising from the sale of goods and
services in the ordinary course of business of the Borrowers and their
Subsidiaries; and
(h) Investments of the Lincoln Parties not described in the foregoing
clauses (a) through (g); PROVIDED that the aggregate amount of all such
Investments, on a Consolidated basis, outstanding under this clause (h) shall
not at any time exceed an amount equal to fifteen (15%) of Consolidated Net
Worth at such time.
SECTION 9.3 MERGERS; ACQUISITIONS; BULK TRANSFERS. No Lincoln Party
shall:
(a) be a party to any consolidation, control share acquisition,
majority share acquisition or other business combination or merger, other than:
(i) a Permitted Holdings Merger,
(ii) a Permitted Acquisition, or
(iii) a merger of a Subsidiary into another Subsidiary, PROVIDED that
(A) if either such Subsidiary is a Borrower:
(1) Holdings shall deliver to the Agent written notice thereof
at least five (5) Banking Days prior to the effective date of
such merger,
(2) such merging Subsidiaries (and any other Borrowers
requested by the Agent or the Lenders) shall execute and
deliver to the Agent and the Lenders such assumptions,
confirmations, and other Loan Documents as the Agent or the
Lenders may require to protect their interests under this
Agreement and the other Loan Documents, and
(3) after giving effect to such merger, no Event of Default or
Incipient Default shall exist,
and (B) as to all other mergers of a Subsidiary into another
Subsidiary, Holdings shall advise the Agent in writing of such merger
contemporaneously with its effectiveness, or
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(b) purchase all or a substantial part of the outstanding securities or
assets of any corporation or other business enterprise, except Permitted
Acquisitions, or
(c) other than Holdings, issue any of its own stock (or any options or
warrants to purchase stock or other securities exchangeable for or convertible
into such stock) to any Person other than another Lincoln Party, except (i) to
qualify directors, in the minimum amount required for such qualification, (ii)
stock issued, in the minimum amount required by law, to comply with laws
requiring multiple shareholders, or (iii) in connection with an issuance of such
stock whereby such Lincoln Party maintains its same direct or indirect
proportionate interest in such Subsidiary, unless
(A) such issuance is for cash consideration or Cash Equivalents and
after giving effect to such issuance of such stock, such Lincoln Party
shall continue to be a Subsidiary of Holdings;
(B) in the opinion of a responsible officer of Holdings (and the Board
of Directors of such Lincoln Party to the extent Board approval is
required), that the sale is for fair value and in the best interests of
such Lincoln Party;
(C) said stock issued to a Person on terms reasonably deemed by the
responsible officer of Holdings (or the Board of Directors of such
Lincoln Party to the extent Board approval is required) to be adequate
and satisfactory;
(D) for the purposes of measuring compliance with Section 9.3(d),
below, such issuance shall be treated as a disposition of assets by
such Lincoln Party proportionately equal to the increase in the
minority interests in the stock and surplus of such Lincoln Party; and
(E) no Event of Default or Incipient Default then exists or would exist
after giving effect to such issuance.
(d) lease, sell or otherwise transfer any material assets (other than
such personal property, if any, as may have become obsolete or no longer useful
in the continuance of its present business) except (i) in the normal course of
its present business, (ii) the sale or other transfer of Trade Receivables to a
Special Purpose Company pursuant to one or more Qualifying Securitization
Transactions, to the extent that the aggregate amount outstanding under all
financing facilities relating to such Qualifying Securitization Transactions
shall not exceed $75,000,000 at any time of determination, and (iii) any lease,
sale or transfer by a Lincoln Party to another Lincoln Party, which, as to
leases, sales and transfers by Borrowers to Lincoln Parties that are not
Borrowers, do not exceed in the aggregate $10,000,000 on a Consolidated basis in
any Fiscal Year; PROVIDED that the foregoing restrictions shall not apply to the
sale of assets for cash to a Person other than an Affiliate, if all of the
following conditions are met:
(A) the aggregate book value of such assets, together with all other
assets of the Lincoln Parties previously disposed of (other than
pursuant to clauses (i), (ii) and (iii) above) during any Fiscal Year
on a Consolidated basis does not exceed fifteen percent (15%) of
Consolidated Net Worth as of the end of the Fiscal Year then most
recently ended;
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(B) in the opinion of a responsible officer and the Board of Directors
of such Lincoln Party (to the extent Board approval is required), the
sale is for fair value and in the best interests of such Lincoln Party;
and
(C) no Event of Default or Incipient Default then exists or would exist
after giving effect to such sale.
SECTION 9.4 LIENS. No Lincoln Party shall (a) acquire any property
subject to any inventory consignment, lease, land contract or other title
retention contract (this section shall not apply to true leases, consignments,
tolling or other possessory agreements in respect of the property of others
whereby such Lincoln Party does not have legal or beneficial title to such
property and which, pursuant to GAAP, are not required to be capitalized), (b)
sell or otherwise transfer any Trade Receivables, whether with or without
recourse, or (c) suffer or permit any property now owned or hereafter acquired
by it to be or become encumbered by any mortgage, security interest, financing
statement or Lien of any kind or nature; PROVIDED, that this Section shall not
apply to:
(i) any lien for a tax, assessment or governmental charge or levy which
is not yet due and payable or which is being contested in good faith
and as to which such Lincoln Party shall have made appropriate
reserves,
(ii) any lien securing only its workers' compensation, unemployment
insurance and similar obligations,
(iii) any mechanics, carrier's or similar common law or statutory lien
incurred in the normal course of business,
(iv) any transfer of a check or other medium of payment for deposit or
collection through normal banking channels or any similar transaction
in the normal course of business,
(v) Permitted Purchase Money Security Interests,
(vi) any mortgage, security interest or lien (other than Permitted
Purchase Money Security Interests) securing only indebtedness incurred
to any Lender, so long as the aggregate unpaid principal balance of all
such Indebtedness secured by all such mortgages, security interests and
liens does not at any time exceed Twenty-five Million Dollars
($25,000,000) on a Consolidated basis,
(vii) any financing statement perfecting only a security interest
permitted by this Section,
(viii) easements, restrictions, minor title irregularities and similar
matters having no adverse effect as a practical matter on the ownership
or use of any Borrower's or any Subsidiary's real property,
(ix) liens on assets acquired pursuant to a Permitted Acquisition or a
Permitted Holdings Merger,
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(x) any attachment or judgment Lien, but only so long as (A) the
judgment it secures shall, within thirty (30) days after the entry
thereof, have been discharged or execution thereof stayed pending
appeal, or shall have been discharged within thirty (30) days after the
expiration of any such stay and (B) the judgment it secures, when taken
together with all other judgments related to attachment and judgment
Liens under this clause (x), does not exceed $5,000,000 in the
aggregate,
(xi) Liens incurred in the ordinary course of business to secure (A)
the non-delinquent performance of bids, trade contracts, leases (other
than Capital Leases) and statutory obligations, (B) contingent
obligations on surety bonds and appeal bonds, and (C) other similar
non-delinquent obligations, in each case, not incurred or made in
connection with the obtaining of advances or credit, the payment of the
deferred purchase price of property or the incurrence of other
Indebtedness, PROVIDED that such Liens, taken as a whole, would not,
even if enforced, have a Material Adverse Effect,
(xii) leases or subleases granted to others, easements, rights-of-way,
restrictions and other similar charges or encumbrances in the ordinary
course of business, in each case incidental to, and not interfering in
any material respect with, the ordinary conduct of the business of such
Lincoln Party, and which do not in the aggregate materially impair the
use of such property in the operation of the business of such Lincoln
Party or the value of such property for the purposes of such business,
(xiii) any other liens existing on the date hereof which are identified
on Schedule 9.4 hereto,
(xiv) any extension, renewal or refunding of any Lien permitted by the
preceding clauses (vii), (ix), (xii) and (xiii) of this Section 9.4 in
respect of the same property theretofore subject to such Lien in
connection with the extension, renewal or refunding of the Indebtedness
secured thereby; PROVIDED that (A) such extension, renewal or refunding
shall be without increase in the principal amount remaining unpaid as
of the date of such extension, renewal or refunding, (B) such Lien
shall attach solely to the same such property, (C) the principal amount
remaining unpaid as of the date of such extension, renewal or refunding
is less than or equal to the fair market value of the property
(determined in good faith by the Board or Directors of Holdings) to
which such Lien is attached, (D) at the time of such extension, renewal
or refunding and after giving effect thereto, no Event of Default would
exist, or
(xv) liens (other than liens on Trade Receivables unless in connection
with a Qualifying Securitization Transactions complying with the
limitations contained in Section 9.3(d)(ii), above) not otherwise
permitted in the foregoing clauses (i) through (xiv), above, securing
Indebtedness that does not exceed at any time an amount equal to ten
percent (10%) of Consolidated Net Worth.
SECTION 9.5 TRANSACTIONS WITH AFFILIATES. No Lincoln Party shall enter
into any transaction or series of transactions with any Affiliate other than in
the ordinary course of
54
business of and pursuant to the reasonable requirements of such Lincoln Party's
business and upon fair and reasonable terms no less favorable to such Lincoln
Party than would obtain in a comparable arm's-length transaction with a person
other than an Affiliate.
SECTION 9.6 CHANGE IN NATURE OF BUSINESS, NAME. No Lincoln Party shall
make any material change in the nature of its business as carried on at the date
hereof; and no Borrower make, any change in its corporate or other entity name,
except upon sixty (60) days' prior written notice to the Agent.
SECTION 9.7 FIXED CHARGES COVERAGE. Holdings shall not permit the Fixed
Charges Coverage Ratio as of the end of any Fiscal Quarter to be less than 1.75
to 1.00.
SECTION 9.8 TOTAL LEVERAGE RATIO. Holdings shall not suffer or permit
the Total Leverage Ratio as of the end of any Fiscal Quarter to be equal to or
greater than 3.00 to 1.
SECTION 9.9 DISTRIBUTIONS. Holdings shall not declare or pay any
dividend or other Distribution in cash, property or obligations (other than in
shares of capital stock of Holdings or in options, warrants or other rights to
acquire any such capital stock or in other securities convertible into any such
capital stock) on any shares of capital stock of Holdings of any class; and
Holdings shall not purchase, redeem or otherwise acquire for any consideration
any shares of capital stock Holdings of any class or any option, warrant or
other right to acquire any such capital stock, unless, as to any of the
foregoing, no Event of Default or Incipient Default then exists or would exist
after giving effect thereto.
ARTICLE 10
REPRESENTATIONS AND WARRANTIES
Each Borrower jointly and severally represents and warrants to each of
the Lenders as follows:
SECTION 10.1 EXISTENCE; SUBSIDIARIES.
(a) Each Borrower is a corporation duly organized and validly existing
and in good standing under the Laws of the state of its incorporation or
organization and is duly qualified and authorized to do business wherever it
owns any real estate or personal property or transacts any substantial business
(except in jurisdictions in which failure to so qualify would not have a
Material Adverse Effect).
(b) Except as set forth on Schedule 10.1 hereto, no Lincoln Party has
any Subsidiaries.
SECTION 10.2 POWER, AUTHORIZATION AND CONSENT. The execution, delivery
and performance of this Agreement and the Notes by a Borrower, and of all Loan
Documents to which any of them is party (a) are within Holdings' or such other
Borrower's legal power and authority, (b) have been duly authorized by all
necessary or proper action of Holdings or such other Borrower, (c) do not
require the consent or approval of any governmental body, agency,
55
authority or any other Person which has not been obtained and (d) will not
violate (i) any provision of Law applicable to Holdings or such other Borrower,
(ii) any provision of Holdings' or such other Borrower's, as the case may be,
certificate or articles of incorporation, by-laws or regulations, or operating
agreement, or (iii) any material agreement or material indenture by which
Holdings or such other Borrower or the property of Holdings or such other
Borrower is bound, except where such violation specified in this clause (iii)
would not have a Material Adverse Effect, or (e) will not result in the creation
or imposition of any lien or encumbrance on any property or assets of Holdings
or such other Borrower except as provided herein.
SECTION 10.3 LITIGATION; PROCEEDINGS. Except as set forth on Schedule
10.3 hereto, no action, suit, investigation or proceeding is now pending or, to
the knowledge of Holdings, threatened, against Holdings or any Subsidiary, at
Law, in equity or otherwise, or with respect to this Agreement or any other Loan
Document, before any court, board, commission, agency or instrumentality of any
federal, state, local or foreign government or of any agency or subdivision
thereof, or before any arbitrator or panel of arbitrators which would or might
reasonably be expected to have a Material Adverse Effect.
SECTION 10.4 ERISA COMPLIANCE.
(a) Holdings and each ERISA Affiliate have operated and administered
each Plan in compliance with all applicable Laws except for such instances of
noncompliance as have not resulted in and could not reasonably be expected to
result in a Material Adverse Effect. Neither Holdings nor any ERISA Affiliate
has incurred any liability pursuant to Title I or IV of ERISA or the penalty or
excise tax provisions of the Code relating to employee benefit plans (as defined
in Section 3 of ERISA), and no event, transaction or condition has occurred or
exists that would reasonably be expected to result in the incurrence of any such
liability by Holdings or any ERISA Affiliate, or in the imposition of any Lien
on any of the rights, properties or assets of Holdings or any ERISA Affiliate,
in either case pursuant to Title I or IV of ERISA or to such penalty or excise
tax provisions or to Section 401(a)(29) or 412 of the Code, other than such
liabilities or Liens as would not be individually or in the aggregate material
in relation to the business, operations, affairs, financial condition, assets,
or properties of Holdings and its Subsidiaries taken as a whole.
(b) On the Closing Date, the present value of the aggregate benefit
liabilities under each of the Plans (other than Multiemployer Plans), determined
as of January 1, 2001 on the basis of the actuarial assumptions specified for
funding purposes in such Plan's most recent actuarial valuation report, did not
exceed the aggregate current value of the assets of such Plan allocable to such
benefit liabilities by more than $60,000 in the case of any single Plan and by
more than $0 in the aggregate for all Plans, PROVIDED that Holdings' Annual
Report on Form 10-K for the Fiscal Year ended December 31, 2001 indicated that,
as of December 31, 2001, the projected benefit obligation under all such Plans
exceeds the plan assets of such Plan by not more than $47,000,000. The term
"benefit liabilities" has the meaning specified in Section 4001 of ERISA and the
terms "current value" and "present value" have the meanings specified in Section
3 of ERISA.
56
(c) Holdings and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are material in relation to the business,
operations, affairs, financial condition, assets, or properties of Holdings and
its Subsidiaries taken as a whole.
(d) The expected post-retirement benefit obligation (determined as of
the last day of Holdings' most recently ended Fiscal Year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of Holdings and its Subsidiaries is not material in relation to the
business, operations, affairs, financial condition, assets, or properties of
Holdings and its Subsidiaries taken as a whole.
(e) The execution and delivery of this Agreement and the occurrence of
any Credit Event hereunder will not involve any transaction that is subject to
the prohibitions of section 406 of ERISA or in connection with which a tax could
be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code.
SECTION 10.5 FINANCIAL CONDITION. The Consolidated audited financial
statements of Holdings and its Subsidiaries for the Fiscal Year ending December
31, 2001, previously delivered to the Lenders, are true and complete (including,
without limiting the generality of the foregoing, a disclosure of all material
contingent liabilities), have been prepared in accordance with GAAP applied on a
basis consistent with those used during their next preceding Fiscal Year (except
as noted therein) and fairly present their then financial condition and
operations for the Fiscal Year then ending. There has been no material change in
Holdings' or any Subsidiary's financial condition, properties or business since
that date.
SECTION 10.6 SOLVENCY. Each Borrower has received consideration which
is the reasonable equivalent value of the obligations and liabilities that such
Borrower has incurred to the Lenders. No Borrower is insolvent as defined by any
applicable state or federal Law, nor will any Borrower be rendered insolvent by
the execution and delivery of this Agreement or any Note or Guaranty to the
Lenders. No Borrower is engaged or about to engage in any business or
transaction for which the assets retained by it shall be an unreasonably small
capital, taking into consideration the obligations to the Lenders incurred
hereunder. No Borrower intends to, nor does it believe that it will, incur debts
beyond its ability to pay them as they mature.
SECTION 10.7 DEFAULT. No Incipient Default exists hereunder, nor will
any begin to exist immediately after the execution and delivery hereof.
SECTION 10.8 LAWFUL OPERATIONS. The operations of Holdings, the
operations of each of the Subsidiaries and all Borrower Property are in full
compliance with all requirements imposed by Law or regulation, whether federal,
state or local including (without limitation) all Environmental Laws,
occupational safety and health Laws and zoning ordinances except where the
noncompliance with any such Laws could not be reasonably expected to result in a
Material Adverse Effect; PROVIDED, HOWEVER, that this Section 10.8 shall not
apply to any noncompliance if and to the extent that the same is being contested
in good faith by timely and appropriate
57
proceedings which are effective to stay enforcement thereof and against which
appropriate reserves have been established.
SECTION 10.9 INVESTMENT COMPANY ACT STATUS. No Borrower is an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (15 U.S.C. sec. 80(a)(1), et seq.).
SECTION 10.10 REGULATION G/REGULATION U/REGULATION X COMPLIANCE. No
Borrower is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or carrying "margin
stock", (as defined by Regulation U of the Board of Governors of the Federal
Reserve System of the United States (as amended from time to time)) and all
official rulings and interpretations thereunder or thereof and at no time shall
more than 25% of the value of the assets of Holdings and its Consolidated
Subsidiaries that are subject to any "arrangement" (as such term is used in
section 221.2(g) of Regulation U) be represented by "margin stock". No part of
the proceeds of any Loan will be used, whether directly or indirectly, and
whether immediately, incidentally or ultimately, (i) to purchase or to extend
credit to others for the purpose of purchasing "margin stock" or to carry or to
extend credit to others for the purpose of carrying stock which will be "margin
stock" after giving effect to the Loans or (ii) for any purpose that entails a
violation of, or is inconsistent with, the provisions of the Regulations of the
Board of Governors of the Federal Reserve System of the United States, including
Regulation G, U or X.
SECTION 10.11 TITLE TO PROPERTIES. Each Lincoln Party has good and
marketable title to all assets reflected in such entity's most recent financial
statements referred to in Section 10.5, except for assets disposed of in the
ordinary course of business since the date of such financial statements. All
such assets are free and clear of any mortgage, security interest or other Lien
of any kind, other than any Liens permitted by this Agreement, except for those
defects in title (as distinct from Liens) that, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.
SECTION 10.12 INTELLECTUAL PROPERTY. Each Lincoln Party owns or has the
legal and valid right to use all intellectual property necessary for the
operation of its business as presently conducted, free from any Lien not
permitted under this Agreement and free of any restrictions material to the
operation of its business as presently conducted.
SECTION 10.13 FULL DISCLOSURE. No information, exhibits or reports
furnished by Holdings or any other Borrower to the Agent or any Lender omits to
state any fact necessary to make the statements contained therein not materially
misleading in light of the circumstances and purposes for which such information
was provided. Holdings and each of the other Borrowers has provided all
information requested by the Agent or any Lender and all such information is
complete and accurate in all material respects.
ARTICLE 11
EVENTS OF DEFAULT
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Each of the following shall constitute an event of default (an "Event
of Default") hereunder:
SECTION 11.1 PAYMENTS. If the principal of or interest on any Note, any
Letter of Credit reimbursement obligation not reimbursed pursuant to Section
5.1, any reimbursement, payment or amount due the Agent or any of the Lenders,
any amendment fee or administrative fee imposed by any of the Lenders, any
Letter of Credit fees or any Facility Fee, any Utilization Fee, the Risk
Participation Fee or other fee or amount owing to the Lenders or the Agent under
this Agreement or under any other Loan Document shall not be paid in full
punctually when due and payable.
SECTION 11.2 COVENANTS. If any Borrower shall fail or omit to perform
and observe (i) any covenant or agreement contained in any of Sections 8.4, 8.5,
8.8, 8.9 and 8.10 hereof and such failure or omission is not cured within 30
days following the earlier of a Borrower's actual knowledge thereof or written
notice thereof from the Agent or any Lender or (ii) any other covenant or
agreement or other provision (other than those referred to in Section 11.1
hereof or clause (i) of this Section 11.2) contained or referred to in this
Agreement or any other Loan Document (after giving effect to any required
notice, grace period or both in such other Loan Document) that is on such
Borrower's part to be complied with.
SECTION 11.3 WARRANTIES. If any representation, warranty or statement
made in or pursuant to this Agreement or any other Loan Document or any other
material information furnished by Holdings or any Subsidiary to the Lenders or
any thereof or any other holder of any Note shall be false or erroneous in any
material respect when furnished or made or deemed furnished or made hereunder.
SECTION 11.4 CROSS DEFAULT. If Holdings or any Subsidiary, after any
applicable notice or grace period or both, (i) defaults in the payment of any
principal or interest due and owing upon any other Indebtedness or
Indebtednesses in excess of Ten Million Dollars ($10,000,000) in aggregate
principal amount or (ii) defaults in the performance of any other agreement,
term or condition contained in any promissory note, agreement or other
instrument under which such Indebtedness or Indebtednesses in excess of
$10,000,000 in the aggregate are evidenced, created, constituted, secured or
governed, and by reason of such default the holder or holders of such
Indebtedness or Indebtednesses have accelerated the maturity thereof.
SECTION 11.5 TERMINATION OF PLAN OR CREATION OF WITHDRAWAL LIABILITY.
If (a) any Reportable Event occurs and the Majority Lenders, in their sole
determination, deem such Reportable Event to constitute grounds (i) for the
termination of any Plan by the Pension Benefit Guaranty Corporation or (ii) for
the appointment by the appropriate United States district court of a trustee to
administer any Plan and such Reportable Event shall not have been fully
corrected or remedied to the full satisfaction of the Majority Lenders within
thirty (30) days after giving of written notice of such determination to the
Borrowers by any Lender or (b) any Plan shall be terminated within the meaning
of Title IV of ERISA (other than a Standard Termination, as that term is defined
in Section 4041(b) of ERISA), or (c) a trustee shall be appointed by the
appropriate United States district court to administer any Plan, or (d) the
Pension Benefit Guaranty Corporation shall institute proceedings to terminate
any Plan or to appoint a trustee to
59
administer any Plan or (e) there occurs a withdrawal by Holdings or any
Subsidiary from a Multi-Employer Plan which results or may result in a
withdrawal liability in an amount that is material in relation to the business,
operations, affairs, financial condition, assets, or properties of Holdings and
its Subsidiaries taken as a whole.
SECTION 11.6 VALIDITY OF AGREEMENTS. If this Agreement, the Notes, any
Reimbursement Agreement, or any other Loan Document shall for any reason cease
to be, or be asserted by Holdings, any other Borrower or any other party
intended to be bound thereby (other than a Lender or the Agent) not to be, a
legal, valid and binding obligation of any party thereto (other than the Agent,
the Letter of Credit Issuer or any Lender) enforceable in accordance with its
terms.
SECTION 11.7 SOLVENCY OF BORROWERS. If any Borrower shall (a)
discontinue business (except in connection with a transaction expressly
permitted under Section 9.3, above), or (b) generally not pay its debts as such
debts become due, or (c) make a general assignment for the benefit of creditors,
or (d) apply for or consent to the appointment of a receiver, a custodian, a
trustee, an interim trustee or liquidator of all or a substantial part of its
assets, or (e) be adjudicated a debtor or have entered against it an order for
relief under Title 11 of the United States Code, as the same may be amended from
time to time, or (f) file a voluntary petition in bankruptcy or file a petition
or an answer seeking reorganization or an arrangement with creditors or seeking
to take advantage of any other Law (whether federal or state) relating to relief
of debtors, or admit by any answer, by default or otherwise) the material
allegations of a petition filed against it in any bankruptcy, reorganization,
insolvency or other proceeding (whether federal or state) relating to relief of
debtors, or (g) suffer or permit to continue unstayed and in effect for thirty
(30) consecutive days any judgment, decree or order entered by a court or
governmental commission of competent jurisdiction, which assumes custody or
control of such Borrower approves a petition seeking reorganization of such
Borrower or any other judicial modification of the rights of its creditors, or
appoints a receiver, custodian, trustee, interim trustee or liquidator for such
Borrower or of all or a substantial part of its assets, or (h) take, or omit to
take, any action in order thereby to effect any of the foregoing.
SECTION 11.8 JUDGMENTS. If (a) one or more judgments for the payment of
money in an aggregate amount in excess of Five Million Dollars
($5,000,000)(unless, in the determination of the Majority Lenders, the Borrowers
shall have made adequate provision for the prompt payment thereof) shall be
rendered against one or more Borrowers, and the same shall remain undischarged
for a period of 30 consecutive days during which execution shall not be
effectively stayed, or (b) any action shall be legally taken by a judgment
creditor to levy upon assets or properties of a Borrower to enforce any
judgment.
ARTICLE 12
REMEDIES UPON DEFAULT
Notwithstanding any contrary provision or inference herein or elsewhere,
60
SECTION 12.1 OPTIONAL DEFAULTS. If any Event of Default referred to in
any of Sections 11.1 through and including 11.6, in clause (b) of Section 11.7,
or in Section 11.8 shall occur, the Majority Lenders, shall have the right in
their discretion, (i) by directing the Agent, on behalf of the Lenders, to give
written notice to the Borrowers, to:
(1) terminate the Commitments hereby established, if not theretofore
terminated, and forthwith upon such election the obligations of the Lenders, and
each thereof, to make any further loan or loans hereunder and to risk
participate in Letters of Credit hereunder or otherwise effect any Credit Event,
and the obligation of the Letter of Credit Issuer to issue Letters of Credit,
immediately shall be terminated, and/or
(2) accelerate the maturity of all of the Borrowers' Obligations to the
Lenders and the Agent (if not already due and payable), whereupon all of the
Obligations to the Lenders and the Agent shall become and (including but not
limited to the Notes and all reimbursement obligations under Letters of Credit)
thereafter be immediately due and payable in full without any presentment or
demand and without any further or other notice of any kind, all of which are
hereby waived by each Borrower, and the Borrowers shall immediately deposit with
the Agent as cash collateral an amount equal to the aggregate Stated Amounts of
all Letters of Credit then outstanding,
and (ii) to exercise (or cause the Agent to exercise) such other rights and
remedies as may be available hereunder, under the other Loan Documents, at law
or in equity.
SECTION 12.2 AUTOMATIC DEFAULTS. If any Event of Default referred to in
Section 11.7 (other than clause (b) thereof) shall occur:
(1) all of the Commitments and the credits hereby established shall
automatically and forthwith terminate, if not theretofore terminated, and no
Lender thereafter shall be under any obligation to grant any further loan or
loans hereunder or otherwise effect any Credit Event, nor shall the Letter of
Credit Issuer be under any obligation to issue any Letter of Credit hereunder,
and
(2) the principal of and interest on any Notes and all reimbursement
obligations with respect to Letters of Credit then outstanding, all of the
Borrowers' other Lender Debt, and the Agent shall thereupon become and
thereafter be immediately due and payable in full (if not already due and
payable), all without any presentment, demand or notice of any kind, which are
hereby waived by each Borrower, and the Borrowers shall immediately deposit with
the Agent as cash collateral an amount equal to the aggregate Stated Amounts of
all Letters of Credit then outstanding, and
(3) subject to any applicable automatic stay or other restriction of
Law, the Agent and the Lenders may exercise such other rights and remedies as
may be available hereunder, under the other Loan Documents, at law or in equity.
SECTION 12.3 OFFSETS. If there shall occur or exist any Event of
Default or if the maturity of the Notes or any Letter of Credit is accelerated
pursuant to Section 12.1 or 12.2, each
61
Lender shall have the right at any time to set off against, and to appropriate
and apply toward the payment of, any and all Indebtedness then owing by any
Borrowers to that Lender (including, without limitation, any participation
purchased or to be purchased pursuant to Section 12.4), whether or not the same
shall then have matured, any and all deposit balances and all other indebtedness
then held or owing by that Lender to or for the credit or account of any
Borrowers, all without notice to or demand upon the Borrowers or any other
person, all such notices and demands being hereby expressly waived by the
Borrowers.
SECTION 12.4 EQUALIZATION OF ADVANTAGE. Each Lender agrees with the
other Lenders that if it at any time shall obtain any Advantage over the other
Lenders in respect of the Obligations to the Lenders (except under Section 3.7,
3.8, 3.9 or 15.4), it will purchase from the other Lenders, for cash and at par,
such additional participation in the Obligations to the Lenders as shall be
necessary to nullify the Advantage. If any Advantage so resulting in the
purchase of an additional participation shall be recovered in whole or in part
from the Lender receiving the Advantage, each such purchase shall be rescinded,
and the purchase price restored (but without interest unless the Lender
receiving the Advantage is required to pay interest on the Advantage to the
person recovering the Advantage from such Lender) ratably to the extent of the
recovery. Each Lender further agrees with the other Lenders that if it at any
time shall receive any payment for or on behalf of any Borrowers on any
indebtedness owing by the Borrowers to that Lender by reason of offset of any
deposit or other indebtedness, it will apply such payment first to any and all
indebtedness owing by such Borrowers to that Lender pursuant to this Agreement
(including, without limitation, any participation purchased or to be purchased
pursuant to this Section 12.4) until the Obligations have been paid in full. The
Borrowers agree that any Lender so purchasing a participation from the other
Lenders pursuant to this Section may exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were a direct creditor of any Borrowers in the amount of such
participation.
SECTION 12.5 APPLICATION OF REMEDY PROCEEDS. All monies received by the
Agent and the Lenders from the exercise of remedies hereunder or under the other
Loan Documents or under any other documents relating to this Agreement or at Law
shall, unless otherwise required by the terms of the other Loan Documents or by
applicable Law, be applied as follows:
FIRST, to the payment of all expenses (to the extent not paid by the
Borrowers) incurred by the Agent or the Lenders in connection with the exercise
of such remedies, including, without limitation, all reasonable costs and
expenses of collection, attorneys' fees, court costs and any foreclosure
expenses;
SECOND, to the payment of any fees then accrued and payable to the
Lenders, the Letter of Credit Issuer or the Agent under this Agreement in
respect of the Loans or the Letters of Credit outstanding;
THIRD, to the payment of interest then accrued on the outstanding
Loans;
FOURTH, to the payment of the principal balance then owing on the
outstanding Loans and the stated amounts of the Letters of Credit then
outstanding (to be held and applied by the Agent as security for the
Reimbursement Agreement Obligations in respect thereof);
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FIFTH, to the payment of all other amounts owed by the Borrowers to the
Agent or the Lenders under this Agreement or any other Loan Document; and
FINALLY, any remaining surplus after all of the Obligations have been
paid in full, to the Borrowers or to whomsoever shall be lawfully entitled
thereto.
ARTICLE 13
THE AGENT
SECTION 13.1 THE AGENT. Each Lender irrevocably appoints KeyBank to be
its Agent with full authority to take such actions, and to exercise such powers,
on behalf of the Lenders in respect of this Agreement and the other Loan
Documents as are therein respectively delegated to the Agent or as are
reasonably incidental to those delegated powers. KeyBank in such capacity shall
be deemed to be an independent contractor of the Lenders. For the purposes of
this Article 13, "Lender" shall include any Lender.
SECTION 13.2 NATURE OF APPOINTMENT. The Agent shall have no fiduciary
relationship with any Lender by reason of this Agreement and the other Loan
Documents. The Agent shall not have any duty or responsibility whatsoever to any
Lender except those expressly set forth in this Agreement and the other Loan
Documents. Without limiting the generality of the foregoing, each Lender
acknowledges that the Agent is acting as such solely as a convenience to the
Lenders and not as a manager of the commitments or the Obligations evidenced by
the Notes. This Article 13 does not confer any rights upon the Borrowers or
anyone else (except the Lenders), whether as a third party beneficiary or
otherwise.
SECTION 13.3 KEYBANK AS A LENDER; OTHER TRANSACTIONS. KeyBank's rights
as a Lender under this Agreement and the other Loan Documents shall not be
affected by its serving as the Agent. KeyBank and its affiliates may generally
transact any banking, financial, trust, advisory or other business with Holdings
or its Subsidiaries (including, without limitation, the acceptance of deposits,
the extension of credit and the acceptance of fiduciary appointments) without
notice to the Lenders, without accounting to the Lenders, and without prejudice
to KeyBank's rights as a Lender under this Agreement and the other Loan
Documents except as may be expressly required under this Agreement.
SECTION 13.4 INSTRUCTIONS FROM LENDERS. The Agent shall not be required
to exercise any discretion or take any action as to matters not expressly
provided for by this Agreement and the other Loan Documents (including, without
limitation, collection and enforcement actions in respect of any Obligations
under the Notes or this Agreement and any collateral therefor) EXCEPT that the
Agent shall take such action (or omit to take such action) other than actions
referred to in Section 15.1, as may be reasonably requested of it in writing by
the Majority Lenders with instructions and which actions and omissions shall be
binding upon all the Lenders; PROVIDED, HOWEVER, that the Agent shall not be
required to act (or omit any act) if, in its judgment, any such
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action or omission might expose the Agent to personal liability or might be
contrary to this Agreement, any other Loan Documents or any applicable Law.
SECTION 13.5 LENDERS' DILIGENCE. Each Lender (a) represents and
warrants that it has made its decision to enter into this Agreement and the
other Loan Documents and (b) agrees that it will make its own decision as to
taking or not taking future actions in respect of this Agreement and the other
Loan Documents; in each case without reliance on the Agent or any other Lender
and on the basis of its independent credit analysis and its independent
examination of and inquiry into such documents and other matters as it deems
relevant and material.
SECTION 13.6 NO IMPLIED REPRESENTATIONS. The Agent shall not be liable
for any representation, warranty, agreement or obligation of any kind of any
other party to this Agreement or anyone else, whether made or implied by
Holdings or any other Borrower in this Agreement or any other Loan Document or
by a Lender in any notice or other communication or by anyone else or otherwise.
SECTION 13.7 SUB-AGENTS. The Agent may employ agents and shall not be
liable (except as to money or property received by it or its agents) for any
negligence or misconduct of any such agent selected by it with reasonable care.
The Agent may consult with legal counsel, certified public accountants and other
experts of its choosing (including, without limitation, KeyBank's salaried
employees or any otherwise not independent) and shall not be liable for any
action or inaction taken or suffered in good faith by it in accordance with the
advice of any such counsel, accountants or other experts which shall have been
selected by it with reasonable care.
SECTION 13.8 AGENT'S DILIGENCE. The Agent shall not be required (a) to
keep itself informed as to anyone's compliance with any provision of this
Agreement or any other Loan Document, (b) to make any inquiry into the
properties, financial condition or operation of Holdings or any of its
Subsidiaries or any other matter relating to this Agreement or any other Loan
Document, (c) to report to any Lender any information (other than which this
Agreement or any other Loan Document expressly requires to be so reported) that
the Agent or any of its affiliates may have or acquire in respect of the
properties, business or financial condition of Holdings or any of its
Subsidiaries or any other matter relating to this Agreement or any other Loan
Document or (d) to inquire into the validity, effectiveness or genuineness of
this Agreement or other Loan Document.
SECTION 13.9 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge of any Incipient Default or Event of Default unless and until it shall
have received a written notice describing it and citing the relevant provision
of this Agreement or any other Loan Document. The Agent shall give each Lender
reasonably prompt notice of any such written notice except to any Lender that
shall have given the written notice.
SECTION 13.10 AGENT'S LIABILITY. Neither the Agent nor any of its
directors, officers, employees, attorneys, and other agents shall be liable for
any action or omission on their respective parts except for gross negligence or
willful misconduct. Without limitation of the generality of the foregoing, the
Agent: (i) may treat the payee of any Revolving Credit Note as the holder
thereof until the Agent receives a fully executed copy of the assignment
agreement
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required by Section 14.1(b) signed by such payee and in form satisfactory to the
Agent and the fee required by Section 14.1(c); (ii) may consult with legal
counsel, independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice or such counsel, accountants or experts which
have been selected by the Agent with reasonable care; (iii) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document, including, without limitation, the truth
of the statements made in any certificate delivered by or on behalf of the
Borrowers under Article 6 or any Notice of Borrowing, Rate
Continuation/Conversion Request, Reimbursement Agreement or any other similar
notice or delivery, the Agent being entitled for the purposes of determining
fulfillment of the conditions set forth therein to rely conclusively upon such
certificates; (iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement, the Notes or any other Loan Document or to inspect the property
(including the books and records) of Holdings or any Subsidiaries; (v) shall not
be responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, any
collateral covered by any agreement or any other Loan Document and (vi) shall
incur no liability under or in respect of this Agreement, the Notes or any other
Loan Document by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, telecopy, cable or telex)
believed by it in good faith to be genuine and correct and signed or sent by the
proper party or parties.
Neither the Agent nor any of its directors, officers, employees or
agents shall have any responsibility to the Borrowers on account of the failure
of or delay in performance or breach by any Lender of any of its obligations
hereunder or to any Lender on account of the failure of or delay in performance
or breach by any other Lender or the Borrowers of any of their respective
obligations hereunder or under any other Loan Document or in connection herewith
or therewith.
The Lenders each hereby acknowledge that the Agent shall be under no
duty to take any discretionary action permitted to be taken by it pursuant to
the provisions of this Agreement, the Notes or any other Loan Document unless it
shall be requested in writing to do so by the Majority Lenders.
SECTION 13.11 COMPENSATION. The Agent shall receive no compensation for
its services as agent of the Lenders in respect of this Agreement and the other
Loan Document, except as otherwise expressly agreed between the Borrowers and
the Agent, but the Borrowers shall reimburse the Agent periodically on its
demand for out-of-pocket expenses, if any, reasonably incurred by it as such and
as to which Agent has delivered to the Borrowers' reasonable substantiation.
SECTION 13.12 AGENT'S INDEMNITY. The Lenders shall indemnify the Agent
(to the extent the Agent is not reimbursed by the Borrowers) from and against
(a) any loss or liability (other than any caused by the Agent's gross negligence
or willful misconduct and other than any loss to the Agent resulting from the
Borrowers' non-payment of agency fees owed solely to the Agent) incurred by the
Agent as such in respect of this Agreement, the Notes, the Letters of Credit, or
other Loan Document (as the Agent) and (b) any out-of-pocket expenses incurred
in
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defending itself or otherwise related to this Agreement, the Notes, any Letter
of Credit, or other Loan Documents (other than any caused by the Agent's gross
negligence or willful misconduct) including, without limitation, reasonable fees
and disbursements of legal counsel of its own selection (including, without
limitation, the reasonable interdepartmental charges of its salaried attorneys)
in the defense of any claim against it or in the prosecution of its rights and
remedies as the Agent (other than the loss, liability or costs incurred by the
Agent in the defense of any claim against it by the Lenders arising in
connection with its actions in its capacity as Agent); PROVIDED, HOWEVER, that
each Lender shall be liable for only its Ratable Portion of the whole loss or
liability.
SECTION 13.13 RESIGNATION. The Agent (or any successor) may at any time
resign as such by giving thirty (30) days' prior written notice to the Borrowers
and to each Lender; and the Majority Lenders may remove the Agent at any time
with or without cause by giving written notice to the Agent and the Borrowers.
In either case, resignation or removal, the institution then serving as Agent
shall also resign as Letter of Credit Issuer in the manner provided in Section
5.3, above, unless Holdings, on behalf of the Borrowers, has waived in writing
the requirements of this sentence. In any such case, the Majority Lenders shall
appoint a successor to the resigned or removed agent (the "Former Agent"), which
shall also serve as successor Letter of Credit Issuer, provided that the
Majority Lenders obtain the Borrowers' prior written consent to the successor
(which consent shall not be unreasonably withheld), by giving written notice to
the Borrowers, the Former Agent and each Lender not participating in the
appointment; PROVIDED, HOWEVER, that, if at the time of the proposed resignation
or removal of an Agent, any Borrower is the subject of an action referred to in
Section 11.7 or any other Event of Default shall have occurred and be
continuing, the Borrowers' consent shall not be required. In the absence of a
timely appointment, the Former Agent shall have the right (but not the duty) to
make a temporary appointment of any Lender (but only with that Lender's consent)
to act as its successor (and as successor Letter of Credit Issuer) pending an
appointment pursuant to the immediately preceding sentence. In either case, the
successor Agent and Letter of Credit Issuer shall deliver its written acceptance
of appointment to the Borrowers, to each Lender and to the Former Agent,
whereupon (a) the Former Agent shall execute and deliver such assignments and
other writings as the successor Agent may reasonably require to facilitate its
being and acting as the Agent and Letter of Credit Issuer, (b) the successor
Agent (and successor Letter of Credit Issuer) shall in any event automatically
acquire and assume all the rights and duties as those prescribed for the Agent
by this Article 13 and, subject to the provisions of Section 5.3, above, for the
Letter of Credit Issuer by Article 5, above, and (c) the Former Agent shall be
discharged from its duties and obligations under this Agreement and the other
Loan Documents.
SECTION 13.14 LENDER PURPOSE. Each Lender represents and warrants to
the Agent, the other Lenders and the Borrowers that such Lender is familiar with
the Securities Act of 1933, as amended, and the rules and regulations thereunder
and is not entering into this Agreement with any intention to violate such Act
or any rule or regulation thereunder. Subject to the provisions of Sections
14.1, 14.2 and 14.3, each Lender shall at all times retain full control over the
disposition of its assets subject only to this Agreement and to all applicable
Law.
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ARTICLE 14
ASSIGNMENTS AND PARTICIPATIONS
SECTION 14.1 ASSIGNMENTS.
(a) ASSIGNMENTS BY BORROWERS PROHIBITED. Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the successors and assigns of such party; PROVIDED, HOWEVER, that no Borrower
shall assign or transfer any of its rights or obligations hereunder or under any
Note without the prior written consent of all of the Lenders and the Agent.
(b) ASSIGNMENTS BY LENDERS. Each Lender may assign all or any part of
any of its Revolving Credit Loans, its Note, its Commitment and its
participation in the Letters of Credit with the consent of Holdings and the
Agent, which consent shall not be unreasonably withheld; PROVIDED that (i) no
such consent by Holdings shall be required (A) for any such assignment by any
Lender to an Affiliate of such Lender or to another Lender or an Affiliate of
another Lender, or (B) if, at the time of such assignment, an Event of Default
or Incipient Default has occurred and is continuing; (ii) any such partial
assignment shall be in an amount at least equal to $5,000,000, unless such
partial assignment is to another Lender; (iii) each such assignment shall be
made by a Lender in such manner that the same portion of its Revolving Credit
Loans, its Note, its Commitment and its participation in the Letters of Credit
is assigned to the assignee; and (iv) the assignee, if not already a Lender,
shall agree to become a party to this Agreement pursuant to an Assignment
Agreement in the form of Exhibit F hereto, including, without limitation, an
Administrative Questionnaire as a supplement thereto in the form of Exhibit G
hereto. Upon execution and delivery by the assignor and the assignee to the
Borrowers and the Agent of an instrument in writing pursuant to which such
assignee agrees to become a "Lender" hereunder (if not already a Lender) having
the share of the Total Commitment Amount, Loans and Letters of Credit specified
in such instrument, and upon consent thereto by the Agent and Holdings (to the
extent, if any, required), the assignee shall have, to the extent of such
assignment (unless otherwise provided in such assignment with the consent of the
Agent), the obligations, rights and benefits of a Lender hereunder holding the
share of the Total Commitment Amount, Loans and Letters of Credit (or portions
thereof) assigned to it (in addition to the share of the Total Commitment
Amount, Loans and Letters of Credit, if any, theretofore held by such assignee);
and the assigning Lender shall, to the extent of such assignment, be released
from the share of the Total Commitment Amount, Loans and Letters of Credit and
the obligations hereunder so assigned.
(c) PROCEDURES. Upon its receipt of an assignment pursuant to Section
14.1(b) above duly executed by an assigning Lender and the assignee, together
with any Note subject to such assignment and a processing and recordation fee of
$3,500, the Agent shall, if such assignment has been completed, accept such
assignment. Within five (5) business days after receipt of such notice, the
Borrowers, at the Borrowers' expense, shall execute and deliver to the Agent in
exchange for each surrendered Note a new Note to the order of the assignee in an
amount equal to the Commitment assumed by the assignee and, if the assigning
Lender has retained a portion of its Commitment, a new Note to the order of the
assigning Lender in an amount equal to the share of its Commitment retained by
it hereunder. Such new Notes shall be in an aggregate
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principal amount equal to the aggregate principal amount of such surrendered
Notes, shall be dated the effective date of such assignment, shall otherwise be
in substantially the form of Exhibit A hereto, and, upon such execution and
delivery shall be a "Note" under this Agreement. Canceled Notes shall be
returned to Holdings on behalf of the Borrowers.
(d) ADDITIONAL RESTRICTION ON ASSIGNMENT. Anything in this Section 14.1
to the contrary notwithstanding, except pursuant to this Agreement, no Lender
may assign or participate any interest in any Loan held by it hereunder to
Holdings or any of its Subsidiaries or other Affiliates without the prior
written consent of each Lender.
SECTION 14.2 PARTICIPATIONS. A Lender may sell or agree to sell to one
or more other Persons (each a "Participant") a participation in all or any part
of any Revolving Credit Loans held by it, or in its Commitment or its
participation in the Letters of Credit. Except as otherwise provided in the last
sentence of this Section 14.2, no Participant shall have any rights or benefits
under this Agreement or any Note or any other Loan Documents (the Participant's
rights against such Lender in respect of such participation to be those set
forth in the agreements executed by such Lender in favor of the Participant).
All amounts payable by the Borrowers to any Lender under this Agreement, and in
respect of its Commitment, shall be determined as if such Lender had not sold or
agreed to sell any participations in such Revolving Credit Loans and share of
Commitment, and as if such Lender were funding each of such Revolving Credit
Loans and its share of such Commitment in the same way that it is funding the
portion of such Revolving Credit Loans and its Commitment in which no
participations have been sold. In no event shall a Lender that sells a
participation agree with the Participant (other than an Affiliate of such
Lender) to take or refrain from taking any action hereunder or under any other
Loan Document, except that such Lender may agree with the Participant that it
will not, without the consent of the Participant, agree to any modification,
supplement or waiver hereof or of any of the Loan Documents to the extent that
the same, under Section 15.1 hereof, requires the consent of each Lender. The
Borrowers agree that each Participant shall be entitled to the benefits of
Sections 3.7 through 3.9, inclusive, and Section 12.3 (but, (i) only to the
extent that the selling Lender is entitled to such benefits and (ii) as to any
sums realized thereunder, subject to Section 12.4) with respect to its
participating interest.
SECTION 14.3 PERMITTED PLEDGES. In addition to the assignments and
participations permitted under the foregoing provisions of this Article 13, any
Lender may assign and pledge all or any portion of its Revolving Credit Loans
and its Note to any Federal Reserve Bank as collateral security pursuant to
Regulation A of the Board of Governors of the Federal Reserve System and any
Operating Circular issued by such Federal Reserve Bank. No such assignment shall
release the assigning Lender from its obligations hereunder.
SECTION 14.4 FURNISHING OF BORROWER INFORMATION. A Lender may furnish
any information concerning Holdings and its Subsidiaries in the possession of
such Lender from time to time to assignees and participants (including, with the
prior written consent of Holdings, which consent shall not be unreasonably
withheld or delayed, prospective assignees and participants, PROVIDED that no
such consent shall be required upon and during the continuance of an Event of
Default).
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ARTICLE 15
MISCELLANEOUS
SECTION 15.1 AMENDMENTS, CONSENTS. No amendment, modification,
termination, or waiver of any provision of this Agreement or of the Notes, nor
consent to any variance therefrom, shall be effective unless the same shall be
in writing and signed by the Majority Lenders (and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given); provided, however, that the unanimous consent of all Lenders
shall be required with respect to any amendment, modification, termination, or
waiver which would effect (i) the extension of maturity of any Note, or of the
payment date of interest, principal and/or fees thereunder or hereunder, or (ii)
any reduction in the rate of interest on the Notes, or in any amount of
principal or interest due on any Note or in the rate or amount of fees payable
pursuant to Section 3.4, or any change in the manner of pro rata application of
any payments made by the Borrowers to the Lenders hereunder, or (iii) any change
in any percentage voting requirement in this Agreement, or (iv) any change in
the dollar amount or percentage of the Lenders' Commitments or any Lender's
Commitment (provided that this clause shall not be construed to limit the right
of the Borrowers to reduce the Total Commitment Amount pursuant and subject to
the provisions of Section 3.2, above), or (v) any change in amount or timing of
any fees payable under this Agreement, or (vi) any release of any portion of
collateral, if any, or any release of any Borrower from its obligations under
Article 5, or (vii) any change in any provision of this Agreement which requires
all of the Lenders to take any action under such provision or (viii) any change
in Section 12.4, Article 14 or this Section 15.1 itself. Notice of amendments or
consents ratified by the Lenders hereunder shall immediately be forwarded by the
Borrowers to all Lenders. Each Lender or other holder of a Note shall be bound
by any amendment, waiver or consent obtained as authorized by this section,
regardless of its failure to agree thereto.
SECTION 15.2 NO WAIVER; CUMULATIVE REMEDIES. No omission or course of
dealing on the part of Agent, any Lender or the holder of any Note in exercising
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right, power or remedy preclude
any other or further exercise thereof or the exercise of any other right, power
or remedy hereunder. The remedies herein provided are cumulative and in addition
to any other rights, powers or privileges held by operation of Law, by contract
or otherwise.
SECTION 15.3 NOTICES. All notices, requests, demands and other
communications provided for hereunder to a party hereto shall be in writing and
shall be mailed or delivered to such party (including, without limitation,
delivery by facsimile transmission), addressed to such party at its address
specified on the signature pages of this Agreement or at such other address as
such party may from time to time specify in writing to the other parties hereto.
All notices, statements, requests, demands and other communications provided for
hereunder shall be deemed to be given or made when delivered or forty-eight (48)
hours after being deposited in the mails with postage prepaid by registered or
certified mail or delivered to a telegraph company, addressed as aforesaid,
except that notices from the Borrowers to Agent or the Lenders pursuant to any
of the provisions hereof, including, without limitation, Articles 3, 4, 5 and 6
hereof, shall not be effective until received by Agent or the Lenders.
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SECTION 15.4 COSTS AND EXPENSES. The Borrowers agree to pay on demand
all reasonable costs and expenses of (i) the Agent in connection with the
syndication of the Obligations pursuant to the letter of the Agent to Holdings
dated April 5, 2002 and (ii) the Agent in connection with the preparation,
execution, delivery, filing for record, modification, administration and
amendment of this Agreement (including, without limitation, any amendment), the
Notes, the Letters of Credit, and the other Loan Documents and the other
documents to be delivered hereunder, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for the Agent with respect
thereto and with respect to advising the Agent as to its rights and
responsibilities under this Agreement. Without limiting the generality of the
foregoing, such costs and expenses shall include: (a) reasonable attorneys' and
paralegals' costs, expenses and disbursements of counsel to the Agent; (b)
extraordinary expenses of Agent in connection with the administration of this
Agreement, the Notes, Letters of Credit, any other Loan Document and the other
instruments and documents to be delivered hereunder; (c) the reasonable fees and
out-of-pocket expenses of special counsel for the Agent or the Agent for the
benefit of the Lenders, with respect thereto and of local counsel, if any, who
may be retained by said special counsel with respect thereto; (d) costs and
expenses (including reasonable attorneys and paralegal costs, expenses and
disbursements) for any amendment, supplement, waiver, consent, or subsequent
closing in connection with this Agreement, the Notes, any Letters of Credit or
any other Loan Document and the transactions contemplated thereby; (e) sums paid
or incurred to pay any amount or take any action required of the Borrowers under
this Agreement, the Notes or any Loan Document that the Borrowers fail to pay or
take; (f) the cost of any appraisal, survey, environmental audit or the
retention of any other professional service or consultant commenced after the
occurrence and continuation of an Event of Default and deemed reasonably
necessary by the Agent; (g) costs of inspections and periodic review of the
records of Holdings or any of its Subsidiaries, including, without limitation,
travel, lodging, and meals for inspections of Holdings' and its Subsidiaries'
operations by the Agent at any time after the occurrence and during the
continuation of an Event of Default; (h) as specified in the letter of the Agent
to Holdings dated April 5, 2002, costs and expenses of forwarding loan proceeds,
fees, interest and other payments to the Lenders; and (i) costs and expenses
(including, without limitation, attorneys' fees) paid or incurred to obtain
payment of the Obligations (including the Obligations arising under this Section
15.4), enforce the provisions of the Credit Agreement, the Notes, or any other
Loan Document, or to defend any claims made or threatened against the Agent
arising out of the transactions contemplated hereby (including without
limitation, preparations for and consultations concerning any such matters). The
Borrowers further agree to pay on demand all costs and expenses of each Lender,
if any (including reasonable counsel fees and expenses), in connection with the
restructuring or the enforcement (whether through negotiations, legal
proceedings or otherwise) of this Agreement, the Notes, any other Loan Document
and the other documents to be delivered hereunder, including, without
limitation, reasonable counsel fees and expenses in connection with the
enforcement of rights under this Section 15.4. The foregoing shall not be
construed to limit any other provisions of this Agreement, the Notes, or any
other Loan Documents regarding costs and expenses to be paid by the Borrowers.
All of the foregoing costs and expenses may be charged, in the Agent's sole
discretion, to the Borrowers' loan accounts as Revolving Credit Loans
(notwithstanding existence of any Incipient Default or Event of Default or the
failure of the conditions of Article 7 to have been satisfied).
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SECTION 15.5 OBLIGATIONS SEVERAL. The obligations of the Lenders
hereunder are several and not joint. Nothing contained in this Agreement and no
action taken by Agent or the Lenders pursuant hereto shall be deemed to
constitute the Lenders to be a partnership, association, joint venture or other
entity. No default by any Lender hereunder shall excuse the other Lenders from
any obligation under this Agreement; but no Lender shall have or acquire any
additional obligation of any kind by reason of such default.
SECTION 15.6 EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same agreement.
SECTION 15.7 BINDING EFFECT; ASSIGNMENT. This Agreement shall become
effective when it shall have been executed by the Borrowers, Agent and by each
Lender and thereafter shall be binding upon and inure to the benefit of the
Borrowers and each of the Lenders and their respective successors and permitted
assigns, except that the Borrowers shall not have the right to assign their
rights hereunder or any interest herein without the prior written consent of all
of the Lenders. No person, other than the Lenders, shall have or acquire any
obligation to grant the Borrowers any Loans hereunder. Any Lender may at any
time sell, assign, transfer, grant a participation pursuant to Article 14
hereof.
SECTION 15.8 GOVERNING LAW. This Agreement, each of the Notes and any
other Loan Documents shall be governed by and construed in accordance with the
Laws of the State of Ohio and the respective rights and obligations of the
Borrowers and the Lenders shall be governed by Ohio Law.
SECTION 15.9 SEVERABILITY OF PROVISIONS; CAPTIONS. Any provision of
this Agreement which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. The several captions to sections and subsections herein are
inserted for convenience only and shall be ignored in interpreting the
provisions of this Agreement.
SECTION 15.10 ENTIRE AGREEMENT. This Agreement and the other Loan
Documents referred to in or otherwise contemplated by this Agreement set forth
the entire agreement of the parties as to the transactions contemplated by this
Agreement.
SECTION 15.11 CONFIDENTIALITY. The Agent and the Lenders hereby
acknowledge that Holdings and its Subsidiaries have financial and other data and
information the confidentiality of which is important to their business. The
Agent and the Lenders agree to use all reasonable efforts to keep confidential
any such confidential information conveyed to them and appropriately designated
in writing by Holdings on behalf of the Borrowers as being confidential
information, EXCEPT that this Section shall not be binding on the Agent or the
Lenders after the expiration of three (3) years after the termination of this
Agreement and shall not preclude the Agent and the Lenders from furnishing any
such confidential information: (i) subject to
71
Holdings' receipt of prior notice from the Agent or a Lender, if permitted under
applicable law and such legal proceedings, to the extent which may be required
by subpoena or similar order of any court of competent jurisdiction (which
notice, if so permitted under applicable law and such legal proceedings, shall
advise Holdings of the information required by such subpoena or order, the party
to whom such subpoena or order requires such information to be delivered and the
court of other tribunal that issued such subpoena or order), (ii) to the extent
such information is required to be disclosed to any authority over the Agent or
a Lender or its securities, (iii) to any other party to this Agreement, (iv) to
any Affiliate of the Agent or a Lender so long as such Affiliate agrees in
writing to Holdings to be bound by the provisions of this Section 15.11, (v) to
any actual or prospective successor Agent and to any actual or prospective
transferee, participant or subparticipant of all or part of a Lender's rights
arising out of or in connection with this Agreement or any thereof so long as
such prospective transferee, participant or subparticipant to whom disclosure is
made agrees in writing to Holdings to be bound by the provisions of this Section
15.11, (vi) to anyone if it shall have been already publicly disclosed (other
than by the Agent or a Lender in contravention of this Section 15.11), (vii) to
the extent reasonably required in connection with the exercise of any right or
remedy under this Agreement or any other Loan Document, (viii) to the Agent's or
a Lender's legal counsel, auditors, professional advisors and consultants, and
accountants and (ix) in connection with any legal proceedings instituted by or
against the Agent or a Lender in its capacity as the Agent or a Lender under
this Agreement.
SECTION 15.12 JURY TRIAL WAIVER. EACH BORROWER, EACH LENDER, THE AGENT
AND THE LETTER OF CREDIT ISSUER HEREBY IRREVOCABLY AGREE TO WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT, THE NOTES, OR ANY OTHER LOAN DOCUMENT OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT, THE
NOTES, OR ANY OTHER LOAN DOCUMENT AND THE RELATIONSHIPS THEREBY ESTABLISHED. The
scope of this waiver is intended to be all-encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter of this
transaction, including, without limitation, contract claims, tort claims, breach
of duty claims, and all other statutory and common law claims. THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS OF
THIS AGREEMENT. In the event of litigation, this provision may be filed as a
written consent to a trial by the court.
SECTION 15.13 JURISDICTION; VENUE; INCONVENIENT FORUM.
(a) JURISDICTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF ANY OHIO STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF
AMERICA SITTING IN CUYAHOGA COUNTY, OHIO, AND ANY APPELLATE COURT FROM ANY
THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH OHIO
72
STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL
AFFECT ANY RIGHT THAT ANY PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT IN
THE COURTS OF ANY JURISDICTION.
(b) VENUE; INCONVENIENT FORUM. EACH OF THE PARTIES HERETO IRREVOCABLY
AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY
DO SO, ANY OBLIGATION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT,
THE NOTES OR ANY OTHER LOAN DOCUMENT IN ANY OHIO STATE OR FEDERAL COURT SITTING
IN OHIO. EACH OF THE PARTIES HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
SUCH ACTION OR PROCEEDING IN ANY SUCH COURT. THE BORROWER CONFIRMS THAT THE
FOREGOING WAIVERS ARE INFORMED AND FREELY MADE.
ARTICLE 16
JOINT AND SEVERAL
SECTION 16.1 JOINT AND SEVERAL. The Borrowers agree and acknowledge
that their liability to pay all Loans and to perform all other Obligations under
this Agreement and each other Loan Document to which they are a party is and
shall be joint and several. No Borrower shall have any right of subrogation,
reimbursement or similar right in respect of its payment of any sum or its
performance of any other obligation hereunder unless and until all Obligations
have been paid in full and the Lenders, the Letter of Credit Issuer and the
Agent have no further obligation hereunder. In addition, each Borrower confirms
that upon each Credit Event, it will have received adequate consideration and
reasonably equivalent value for the Indebtedness incurred and other agreements
made in the Loan Documents. No Borrower could reasonably expect to obtain
financing separately on terms as favorable as those provided for herein.
SECTION 16.2 OBLIGATIONS ABSOLUTE. The Obligations of each Borrower
hereunder shall be valid and enforceable and, except as expressly provided
herein, shall not be subject to limitation, impairment or discharge for any
reason (other than the payment in full of the Obligations), including, without
limitation, the occurrence of any failure to assert or enforce or agreement not
to assert or enforce any claim or demand of any right power or remedy with
respect to the Obligations or any agreement relating thereto, or with respect to
any guaranty thereof or security therefor or any other act or thing or omission
which may or might in any manner or to any extent vary the risk of such Borrower
as an obligor in respect of the Obligations; and each Borrower hereby waives (i)
any defense based upon any statute or rule of law or equity to the effect that
the obligation of a surety must be neither larger in amount nor in
73
other respects more burdensome than that of the principal, and (ii) to the
fullest extent permitted by law, any defenses or benefits which may be derived
from or afforded by law or equity which limit the liability of or exonerate
guarantors or sureties, or which may conflict with terms of this Agreement or
the other Loan Documents.
SECTION 16.3 LIMITATIONS.
(a) If the Obligations of a Borrower would be held or determined by a
court or tribunal having competent jurisdiction to be void, invalid or
unenforceable on account of the amount of its aggregate liability under this
Agreement or the Notes, then, notwithstanding any other provision of this
Agreement or the Notes to the contrary, the aggregate amount of the liability of
such Borrower under this Agreement and the Notes shall, without any further
action by such Borrower, the Lenders, the Agent, the Letter of Credit Issuer or
any other person, be automatically limited and reduced to an amount which is
valid and enforceable.
(b) Without limiting the generality of paragraph (a), above, each
Borrower and the Agent, the Letter of Credit Issuer and each Lender, hereby
confirms that it is the intention of all such parties that none of this
Agreement, the Notes or any other Loan Document constitute a fraudulent transfer
or conveyance under the federal Bankruptcy Code, the Uniform Fraudulent
Conveyances Act, the Uniform Fraudulent Transfer Act or similar state statute
applicable to the Loan Documents. Therefore, such parties agree that the
Obligations of a Borrower shall be limited to such maximum amount as will, after
giving effect to such maximum amount and other contingent and fixed liabilities
of such Borrower that are relevant under such laws, and after giving effect to
any collections from, rights to receive contribution from or payments made by or
on behalf of the other Borrowers and any other obligor, result in the
Obligations not constituting a fraudulent transfer or conveyance.
(c) The provisions of this Section 16.3 are intended solely to preserve
the rights of Lenders, the Letter of Credit Issuer and the Agent hereunder to
the maximum extent permitted by applicable Law, and neither a Borrower nor any
other Person shall have any right or claim under such provisions that would not
otherwise be available under applicable Law.
[No additional provisions on this page; this page followed by signature pages]
74
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands as
of the date first above written.
BORROWERS Address
- --------- -------
LINCOLN ELECTRIC HOLDINGS, INC. 22801 St. Clair Avenue
Cleveland, Ohio 44117-1199
By________________________________________ Attention: Chief Financial Officer
Anthony A. Massaro, Chairman, Telecopy: (216) 486-6476
President and Chief Executive Officer
And_______________________________________
H. Jay Elliot, Senior Vice President,
Chief Financial Officer and Treasurer
THE LINCOLN ELECTRIC COMPANY 22801 St. Clair Avenue
Cleveland, Ohio 44117-1199
By________________________________________ Attention: Treasurer
Anthony A. Massaro, Chairman, Telecopy: (216) 486-6476
President and Chief Executive Officer
And_______________________________________
Paul R. Klingensmith, Treasurer
LINCOLN ELECTRIC INTERNATIONAL 22801 St. Clair Avenue
HOLDING COMPANY Cleveland, Ohio 44117-1199
Attention: Treasurer
Telecopy: (216) 486-6476
By________________________________________
H. Jay Elliott, Treasurer
HARRIS CALORIFIC, INC. 22801 St. Clair Avenue
Cleveland, Ohio 44117-1199
Attention: Treasurer
By________________________________________ Telecopy: (216) 486-6476
Vincent K. Petrella, Treasurer
LINCOLN GLOBAL, INC. 22801 St. Clair Avenue
Cleveland, Ohio 44117-1199
Attention: Treasurer
By________________________________________ Telecopy: (216) 486-6476
Vincent K. Petrella, Treasurer
75
AGENT
- -----
KEYBANK NATIONAL ASSOCIATION, 127 Public Square
AS AGENT Cleveland, Ohio 44114-1306
Attention: Large Corporate
Telecopy: (216) 689-4981
By_________________________________________
Daniel W. Lally, Assistant Vice President
76
LENDERS Address
- ------- -------
BANK OF AMERICA, N.A. Mail Code IL1-231-10-10
231 South LaSalle Street
Chicago, Illinois 60697
By________________________________ Attention: Lorraine Johnson
_______________, _______________ Telecopy: 312.828-5140
BANK ONE, NA 611 Woodward Avenue
Detroit, Michigan 48226
Attention: Large Corporate
By________________________________ Telecopy: (313) 225-1671
__________________,_____________
JPMORGAN CHASE BANK 270 Park Avenue, 47th Floor
New York, New York 10017-2070
Attention: Tina Ruyter
By________________________________ Telecopy: 212-270-5120
__________________,_____________
KEYBANK NATIONAL ASSOCIATION 127 Public Square
Cleveland, Ohio 44114-1306
Attention: Large Corporate
By________________________________ Telecopy: (216) 689-4981
Daniel W. Lally, Assistant Vice President
NATIONAL CITY BANK 1900 East 9th Street, Locator 2083
Cleveland, Ohio 44114-3484
Attention: Anthony J. DiMare
By________________________________ Telecopy: (216) 222-9396
__________________,_____________
PNC BANK, NATIONAL ASSOCIATION 1375 East 9th Street, Suite 1250
Cleveland, Ohio 44114
Attention: Joseph G. Moran
By________________________________ Telecopy: (216) 348-8594
__________________,_____________
77
List of Exhibits
----------------
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Rate Conversion/Continuation Request
Exhibit D - Form of Reduction Notice
Exhibit E - Form of Certificate of Financial Officer
Exhibit F - Form of Assignment Agreement
Exhibit G Form of Administrative Questionnaire
78
List of Schedules
-----------------
Schedule 9.2 Existing Investments
Schedule 9.4 - Existing Liens
Schedule 10.1 - Existing Subsidiaries
Schedule 10.3 Litigation
79
ANNEX A
-------
To Credit Agreement dated April 24, 2002 among Lincoln Electric Holdings,
-------------------------------------------------------------------------
Inc., et al.
------------
Lender Amount of Commitment
- ------ --------------------
Bank of America, N.A. $23,000,000
Bank One, NA $23,000,000
JPMorgan Chase Bank $23,000,000
Keybank National Association $23,000,000
National City Bank $10,000,000
PNC Bank, National Association $23,000,000
80