REVOLVING CREDIT AGREEMENT
dated as of November 26, 1997
among
HOLMES PRODUCTS CORP.
HOLMES PRODUCTS (FAR EAST) LIMITED, ESTEEM INDUSTRIES LIMITED,
RAIDER MOTOR CORPORATION,
BANKBOSTON, N.A.
and the other lending institutions set forth on Schedule 1 attached hereto,
BANKBOSTON, N.A.
as Administrative and Syndication Agent
and
LEHMAN COMMERCIAL PAPER INC.
as Documentation Agent
with
BANCBOSTON SECURITIES INC.
having acted as Arranger
TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION. ....................................................... 1
1.1. Definitions. ........................................................................ 1
1.2. Rules of Interpretation. ............................................................26
2. THE REVOLVING CREDIT FACILITY. .................................................................27
2.1. Commitment to Lend. .................................................................27
2.1.1. Revolving Credit Loans to Company. .......................................27
2.1.2. Multicurrency Loans to Subsidiary Borrowers. .............................27
2.2. Commitment Fee. .....................................................................28
2.3. Reduction of Total Commitment. ......................................................29
2.4. The Revolving Credit Notes; Loan Accounts. ..........................................29
2.5. Interest on Revolving Credit Loans. .................................................30
2.6. Requests for Revolving Credit Loans. ................................................30
2.7. Conversion Options. .................................................................31
2.7.1. Conversion to Different Type of Revolving Credit Loan. ...................31
2.7.2. Continuation of Type of Revolving Credit Loan. ...........................31
2.7.3. Eurocurrency Rate Loans. .................................................32
2.8. Funds for Revolving Credit Loan. ....................................................32
2.8.1. Funding Procedures for Revolving Credit Loans to Company. ................32
2.8.2. Advances by Agent for Revolving Credit Loans to Company. .................33
2.8.3. Funding Procedures for Revolving Credit Loans Denominated in Dollars to
Subsidiary Borrowers. ............................................................33
2.8.4. Advances by Agent for Revolving Credit Loans Denominated in Dollars to
Subsidiary Borrowers. ............................................................34
2.8.5. Funding Procedures for Revolving Credit Loans Denominated in an Optional
Currency to Subsidiary Borrowers. ................................................34
2.8.6. Advances by Agent for Revolving Credit Loans denominated in Optional Currency
to Subsidiary Borrowers. .........................................................35
2.9. Optional Currencies. ................................................................35
2.9.1. Request for Optional Currency..............................................35
2.9.2. Exchange Rate. ...........................................................36
2.9.3. Multiple Denominations. ..................................................36
2.9.4. Repayment. ...............................................................37
2.9.5. Funding. .................................................................37
2.10. Fronting Provisions. ...............................................................37
2.10.1. Application of Interest Payments for Multicurrency Loans..................37
2.10.2. Currency Conversions and Contingent Funding Agreement. ..................38
2.10.3. Resignation of Fronting Bank..............................................40
3. REPAYMENT OF THE REVOLVING CREDIT LOANS. .......................................................41
3.1. Maturity. ...........................................................................41
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3.2. Mandatory Repayments of Revolving Credit Loans. .....................................41
3.3. Optional Repayments of Revolving Credit Loans. ......................................42
4. LETTERS OF CREDIT. .............................................................................43
4.1. Letter of Credit Commitments..........................................................43
4.1.1. Commitment to Issue Letters of Credit. ...................................43
4.1.2. Letter of Credit Applications. ...........................................43
4.1.3. Terms of Letters of Credit. ..............................................44
4.1.4. Reimbursement Obligations of Banks. ......................................44
4.1.5. Participations of Banks. .................................................44
4.2. Reimbursement Obligation of the Borrowers. ..........................................44
4.3. Letter of Credit Payments. ..........................................................45
4.4. Obligations Absolute. ...............................................................46
4.5. Reliance by Issuer. .................................................................46
4.6. Letter of Credit Fee. ...............................................................47
5. CERTAIN GENERAL PROVISIONS. ....................................................................47
5.1. Closing Fees. .......................................................................47
5.2. Agent's Fee. ........................................................................47
5.3. Funds for Payments. .................................................................47
5.3.1. Payments to Agent. .......................................................47
5.3.2. No Offset, etc. ..........................................................48
5.3.3. Currency Matters...........................................................48
5.3.3.1. Currency of Account. ..........................................48
5.3.3.2. Currency Fluctuations. ........................................49
5.4. Computations. .......................................................................50
5.5. Inability to Determine Eurocurrency Rate. ...........................................51
5.6. Illegality. .........................................................................51
5.7. Additional Costs, etc. ..............................................................52
5.8. Capital Adequacy. ...................................................................53
5.9. Certificate. ........................................................................53
5.10. Indemnity. .........................................................................54
5.11. Interest After Default. ............................................................54
5.11.1. Overdue Amounts. ........................................................54
5.11.2. Amounts Not Overdue. ....................................................54
6. COLLATERAL SECURITY AND GUARANTIES. ............................................................54
6.1. Security of Borrowers. ..............................................................54
6.2. Guaranties and Security of Subsidiaries. ............................................55
6.3. Guaranty by the Company of the Obligations.............................................55
6.3.1. Guaranty. ................................................................55
6.3.2. Guaranty Absolute. .......................................................55
6.3.3. Effectiveness; Enforcement. ..............................................57
6.3.4. Waiver. ..................................................................57
6.3.5. Subordination; Subrogation. ..............................................58
6.3.6. Payments. ................................................................58
6.3.7. Receipt of Information. ..................................................59
7. REPRESENTATIONS AND WARRANTIES. ................................................................59
7.1. Corporate Authority. ................................................................59
7.1.1. Incorporation; Good Standing. ............................................59
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7.1.2. Authorization. ...........................................................59
7.1.3. Enforceability. ..........................................................60
7.2. Governmental Approvals. .............................................................60
7.3. Title to Properties; Leases. ........................................................60
7.4. Financial Statements and Projections. ...............................................61
7.4.1. Fiscal Year. .............................................................61
7.4.2. Financial Statements. ....................................................61
7.4.3. Projections. .............................................................61
7.4.4. Solvency. ................................................................61
7.5. No Material Changes, etc. ...........................................................62
7.6. Franchises, Patents, Copyrights, etc. ...............................................62
7.7. Litigation. .........................................................................62
7.8. No Materially Adverse Contracts, etc. ...............................................62
7.9. Compliance with Other Instruments, Laws, etc. .......................................62
7.10. Tax Status. ........................................................................63
7.11. No Event of Default. ...............................................................63
7.12. Holding Company and Investment Company Acts. .......................................63
7.13. Absence of Financing Statements, etc. ..............................................63
7.14. Perfection of Security Interest. ...................................................63
7.15. Certain Transactions. ..............................................................64
7.16. Employee Benefit Plans. ............................................................64
7.16.1. In General. .............................................................64
7.16.2. Terminability of Welfare Plans. .........................................64
7.16.3. Guaranteed Pension Plans. ...............................................65
7.16.4. Multiemployer Plans. ....................................................65
7.17. Use of Proceeds. ...................................................................65
7.17.1. General. ................................................................65
7.17.2. Regulations U and X. ....................................................66
7.17.3. Ineligible Securities. ..................................................66
7.18. Environmental Compliance. ..........................................................66
7.19. Subsidiaries, etc. .................................................................68
7.20. Bank Accounts. .....................................................................68
7.21. Disclosure. ........................................................................68
7.22. Status of Loans as Senior Debt. ....................................................68
7.23. Subordinated Debt Documents and Transaction Documents. .............................69
7.24. No Other Senior Debt. ..............................................................69
7.25. No Withholding. ....................................................................69
7.26. No Filings Required. ...............................................................69
7.27. Chief Executive Office. ............................................................69
7.28. Delivery of Certain Documents. .....................................................70
7.29. Insurance. .........................................................................70
8. AFFIRMATIVE COVENANTS OF THE BORROWERS. ........................................................70
8.1. Punctual Payment. ...................................................................70
8.2. Maintenance of Office. ..............................................................70
8.3. Records and Accounts. ...............................................................71
8.4. Financial Statements, Certificates and Information. .................................71
8.5. Notices. ............................................................................73
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8.5.1. Defaults. ................................................................73
8.5.2. Environmental Events. ....................................................73
8.5.3. Notification of Claim against Collateral. ................................73
8.5.4. Notice of Litigation and Judgments. ......................................74
8.6. Corporate Existence; Maintenance of Properties. .....................................74
8.7. Insurance. ..........................................................................74
8.8. Taxes. ..............................................................................75
8.9. Inspection of Properties and Books, etc. ............................................75
8.9.1. General. .................................................................75
8.9.2. Appraisals. ..............................................................75
8.10. Compliance with Laws, Contracts, Licenses, and Permits. ............................75
8.11. Employee Benefit Plans. ............................................................76
8.12. Use of Proceeds. ...................................................................76
8.13. Additional Mortgaged Property. .....................................................76
8.14. Fair Labor Standards Act. ..........................................................77
8.15. Guarantors. ........................................................................77
8.16. Subordinated Guarantees. ...........................................................77
8.17. Status of Loans as Senior Debt. ....................................................77
8.18. Further Assurances. ................................................................78
8.19. Additional Subsidiaries. ...........................................................78
8.20. Landlord Consents. .................................................................78
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS. ...................................................78
9.1. Restrictions on Indebtedness. .......................................................78
9.2. Restrictions on Liens. ..............................................................80
9.3. Restrictions on Investments. ........................................................81
9.4. Distributions and Restricted Payments. ..............................................82
9.5. Merger, Consolidation and Disposition of Assets. ....................................83
9.5.1. Mergers and Acquisitions. ................................................83
9.5.2. Disposition of Assets. ...................................................86
9.6. Sale and Leaseback. .................................................................87
9.7. Compliance with Environmental Laws. .................................................87
9.8. Subordinated Debt. ..................................................................87
9.9. Employee Benefit Plans. .............................................................87
9.10. Business Activities. ...............................................................88
9.11. Fiscal Year. .......................................................................88
9.12. Transactions with Affiliates. ......................................................88
9.13. Modification of Documents and Charter. .............................................89
9.14. Upstream Limitations. ..............................................................89
9.15. Inconsistent Agreements. ...........................................................89
9.16. Senior Debt. .......................................................................89
9.17. Limitations on Foreign Exchange Arrangements. ......................................89
10. FINANCIAL COVENANTS OF THE BORROWERS. .........................................................90
10.1. Leverage Ratio. ....................................................................90
10.2. Interest Coverage Ratio. ...........................................................90
10.3. Fixed Charge Coverage Ratio. .......................................................90
10.4. Capital Expenditures. ..............................................................90
11. CLOSING CONDITIONS. ...........................................................................91
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11.1. Loan Documents, etc.. ..............................................................91
11.1.1. Loan Documents. .........................................................91
11.1.2. Subordination Documents. ................................................91
11.1.3. Transaction Documents. ..................................................91
11.2. Certified Copies of Charter Documents. .............................................91
11.3. Corporate Action. ..................................................................92
11.4. Incumbency Certificate. ............................................................92
11.5. Validity of Liens. .................................................................92
11.6. Perfection Certificates and UCC Search Results. ....................................92
11.7. Landlord Consents. .................................................................92
11.8. Certificates of Insurance. .........................................................93
11.9. Hazardous Waste Assessments. .......................................................93
11.10. Solvency Opinion. .................................................................93
11.11. Opinion of Counsel. ...............................................................93
11.12. Payment of Fees. ..................................................................93
11.13. Payoff Letter. ....................................................................93
11.14. Disbursement Instructions. ........................................................93
11.15. Completion of Transaction. ........................................................94
11.16. Capitalization. ...................................................................94
11.17. Consents and Approvals. ...........................................................94
11.18. Closing Date EBITDA. ..............................................................94
11.19. Availability. .....................................................................94
11.20. Designation of Senior Debt. .......................................................94
11.21. Conditions to Funding to Subsidiary Borrowers. ....................................94
12. CONDITIONS TO ALL BORROWINGS. .................................................................95
12.1. Representations True; No Event of Default. .........................................95
12.2. No Legal Impediment. ...............................................................95
12.3. Governmental Regulation. ...........................................................96
12.4. Proceedings and Documents. .........................................................96
12.5. Exchange Limitations. ..............................................................96
13. EVENTS OF DEFAULT; ACCELERATION; ETC. .........................................................96
13.1. Events of Default and Acceleration. ................................................96
13.2. Termination of Commitments. ........................................................100
13.3. Remedies. ..........................................................................100
13.4. Exchange Rate. .....................................................................101
13.5. Distribution of Collateral Proceeds. ...............................................101
14. SETOFF. .......................................................................................102
15. THE AGENT. ....................................................................................103
15.1. Authorization. .....................................................................103
15.2. Employees and Agents. ..............................................................104
15.3. No Liability. ......................................................................104
15.4. No Representations. ................................................................104
15.4.1. General. ................................................................104
15.4.2. Closing Documentation, etc. .............................................105
15.5. Payments. ..........................................................................105
15.5.1. Payments to Agent. ......................................................105
15.5.2. Distribution by Agent. ..................................................105
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15.5.3. Delinquent Banks. .......................................................106
15.6. Holders of Revolving Credit Notes. .................................................106
15.7. Indemnity. .........................................................................106
15.8. Agent as Bank. .....................................................................107
15.9. Resignation. .......................................................................107
15.10. Notification of Defaults and Events of Default. ...................................107
15.11. Duties in the Case of Enforcement. ................................................107
15.12. Duties of Documentation Agent. ....................................................108
16. EXPENSES AND INDEMNIFICATION. .................................................................108
16.1. Expenses. ..........................................................................108
16.2. Indemnification. ...................................................................109
16.3. Survival. ..........................................................................109
17. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION. ................................................109
17.1. Sharing of Information with Section 20 Subsidiary. .................................109
17.2. Confidentiality. ...................................................................110
17.3. Prior Notification. ................................................................110
17.4. Other. .............................................................................110
18. SURVIVAL OF COVENANTS, ETC. ...................................................................111
19. ASSIGNMENT AND PARTICIPATION. .................................................................111
19.1. Conditions to Assignment by Banks. .................................................111
19.2. Certain Representations and Warranties; Limitations; Covenants. ....................112
19.3. Register. ..........................................................................113
19.4. New Revolving Credit Notes. ........................................................113
19.5. Participations. ....................................................................114
19.6. Disclosure. ........................................................................114
19.7. Assignee or Participant Affiliated with any Borrower. ..............................114
19.8. Miscellaneous Assignment Provisions. ...............................................115
19.9. Assignment by Borrowers. ...........................................................115
20. NOTICES, ETC. .................................................................................115
21. GOVERNING LAW. ................................................................................116
22. HEADINGS. .....................................................................................116
23. COUNTERPARTS. .................................................................................116
24. ENTIRE AGREEMENT, ETC. ........................................................................117
25. WAIVER OF JURY TRIAL. .........................................................................117
26. CONSENTS, AMENDMENTS, WAIVERS, ETC. ...........................................................117
27. SEVERABILITY. .................................................................................118
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT is made as of November 26, 1997, by and
among (a) HOLMES PRODUCTS CORP. (the "Company"), a Massachusetts corporation
having its principal place of business at 233 Fortune Boulevard, Milford,
Massachusetts 01757, (b) HOLMES PRODUCTS (FAR EAST) LIMITED ("Holmes Far East"),
a Bahamas corporation having its principal place of business at 9th Floor, 9
Wing Hong Street, Cheung Sha Wan, Kowloon Hong Kong, (c) ESTEEM INDUSTRIES
LIMITED ("Esteem"), a corporation organized under the laws of Hong Kong and
having its principal place of business at 9th Floor, 9 Wing Hong Street, Cheung
Sha Wan, Kowloon, Hong Kong, (d) RAIDER MOTOR CORPORATION ("Raider", and
collectively with Holmes Far East and Esteem, the "Subsidiary Borrowers", and
together with the Company the "Borrowers" and each individually a "Borrower"), a
Bahamas corporation having its principal place of business at 9th Floor, 9 Wing
Hong Street, Cheung Sha Wan, Kowloon, Hong Kong, (e) BANKBOSTON, N.A., a
national banking association and the other lending institutions listed on
Schedule 1, (f) BANKBOSTON, N.A. as syndication and administrative agent for
itself and such other lending institutions, (g) LEHMAN COMMERCIAL PAPER INC. as
documentation agent for such lending institutions and (h) BANKBOSTON, N.A.,
acting through its Hong Kong branch as fronting bank for the Banks.
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. Definitions. The following terms shall have the meanings set forth
in this ss.1 or elsewhere in the provisions of this Credit Agreement referred to
below:
Adjustment Date. The first day of the month immediately following the
month in which a Compliance Certificate is to be delivered by the Company
pursuant to ss.8.4(d) hereof.
Affiliate. Any Person that would be considered to be an affiliate of
the Company under Rule 144(a) of the Rules and Regulations of the Securities and
Exchange Commission, as in effect on the date hereof, if the Company were
issuing securities.
Agent's Head Office. The Agent's head office located at 100 Federal
Street, Boston, Massachusetts 02110, or at such other location as the Agent may
designate from time to time.
Agent. BankBoston, N.A. acting as administrative and syndication agent
for the Banks.
Agent's Special Counsel. Bingham Dana LLP or such other counsel as may
be approved by the Agent.
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Applicable Margin. For each period commencing on an Adjustment Date
through the date immediately preceding the next Adjustment Date (each a "Rate
Adjustment Period"), the Applicable Margin shall be the applicable margin set
forth below with respect to the Leverage Ratio, as determined for the period
ending on the fiscal quarter ended immediately preceding the applicable Rate
Adjustment Period.
- ------------------------------------------------------------------------------------------------------
BASE
RATE EUROCURRENCY LETTER OF COMMITMENT FEE
LEVEL LEVERAGE RATIO LOANS RATE LOANS CREDIT FEES RATE
======================================================================================================
I Greater than or equal to
4.75:1.00 0.75% 2.25% 2.25% 0.50%
======================================================================================================
II Less than 4.75:1.00 but greater
than or equal to 4.25:1.00 0.50% 2.00% 2.00% 0.50%
======================================================================================================
III Less than 4.25:1.00 but greater
than or equal to 3.75:1.00 0.25% 1.75% 1.75% 0.375%
======================================================================================================
IV Less than 3.75:1.00 but greater
than or equal to 3.25:1.00 0.00% 1.50% 1.50% 0.375%
======================================================================================================
V Less than 3.25:1.00 0.00% 1.25% 1.25% 0.375%
======================================================================================================
Notwithstanding the foregoing, (a) for Revolving Credit Loans
outstanding, the Letter of Credit Fees and the commitment fees payable during
the period commencing on the Closing Date through the date immediately preceding
the first Adjustment Date to occur after June 30, 1998, the Applicable Margin
shall be Level II set forth above, provided, however, notwithstanding the
foregoing, to the extent that the Compliance Certificate demonstrates the
Leverage Ratio is greater than or equal to 4.75:1.00 and the EBITDA is less than
$30,000,000 for any period of four consecutive fiscal quarters (treated as a
single accounting period) ending between the Closing Date and the fiscal quarter
ending June 30, 1998, the Applicable Margin shall be Level I above for each Rate
Adjustment Period in which such criteria are met, and (b) if the Company fails
to deliver any Compliance Certificate pursuant to ss.8.4(d) hereof then, for the
period commencing on the next Adjustment Date to occur subsequent to such
failure through the date immediately following the date on which such Compliance
Certificate is delivered, the Applicable Margin shall be the highest Applicable
Margin set forth above.
Asco. Asco Investments Ltd., a Bahamas corporation.
Asco Letters of Credit. Those certain letters of credit issued prior to
the Closing Date for the account of certain of the Subsidiary Borrowers and more
fully described on Schedule 1.1(a) hereto.
Asset Sale. Any one or series of related transactions in which any
applicable Person conveys, sells, transfers or otherwise disposes of, directly
or indirectly, any
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of its properties, businesses or assets (including the sale or issuance of
capital stock of a Subsidiary), whether owned on the Closing Date or thereafter
acquired.
Assignment and Acceptance. See ss.19.1.
Balance Sheet Date. September 30, 1997.
Banks. BKB and the other lending institutions listed on Schedule 1
hereto and any other Person who becomes an assignee of any rights and
obligations of a Bank pursuant to ss.19 and, unless the context otherwise
requires, the Fronting Bank.
Base Rate. The higher of (a) the annual rate of interest announced from
time to time by BKB at its head office in Boston, Massachusetts, as its "base
rate" and (b) one-half of one percent (1/2%) above the Federal Funds Effective
Rate. For the purposes of this definition, "Federal Funds Effective Rate" shall
mean for any day, the rate per annum equal to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three (3) funds brokers of recognized
standing selected by the Agent.
Base Rate Loans. Revolving Credit Loans denominated in Dollars bearing
interest calculated by reference to the Base Rate.
Berkshire Fund IV. Berkshire Fund IV, L.P., a Massachusetts limited
partnership.
Berkshire Fund IV Investment Corp. Berkshire Fund IV Investment Corp.,
a Massachusetts corporation.
Berkshire Investors LLC. Berkshire Investors LLC, a Massachusetts
limited liability company.
Berkshire Partners. Berkshire Partners LLC, a Massachusetts limited
liability company.
BKB. BankBoston, N.A. (f/k/a The First National Bank of Boston), a
national banking association, in its individual capacity.
Borrowers. As defined in the preamble hereto.
Business Day. Any day on which banking institutions in Boston,
Massachusetts, are open for the transaction of banking business and, in
addition, (a) if Eurocurrency Rate Loans denominated in Dollars are involved, a
day which is also a day in which commercial banks are open for international
business (including dealings in Dollar deposits) in London or such other
eurodollar interbank market as
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may be selected by the Agent in its sole discretion acting in good faith; and
(b) if Eurocurrency Rate Loans denominated in an Optional Currency are involved,
a day on which dealings and exchange in Dollars and the relevant Optional
Currency can be carried on in the relevant Eurocurrency Interbank Market and
Dollar settlements of such dealings may be effected in New York, New York and
London, and also a day on which dealings and exchange in Dollars and in the
relevant Optional Currency can be carried on in the principal financial center
of the country in which such currency is legal tender and in London, England.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery, equipment and all other assets which are treated as capital
assets in accordance with generally accepted accounting principles) and
intangible (such as patents, copyrights, trademarks, franchises and good will);
provided that Capital Assets shall not include any item customarily charged
directly to expense or depreciated over a useful life of twelve (12) months or
less in accordance with generally accepted accounting principles.
Capital Expenditures. Amounts paid or Indebtedness incurred by the
Company or any of its Subsidiaries in connection with (a) the purchase or lease
by the Company or any of its Subsidiaries of Capital Assets that would be
required to be capitalized and shown on the balance sheet of such Person in
accordance with generally accepted accounting principles or (b) the lease of any
assets by the Company or any of its Subsidiaries as lessee under any synthetic
lease referred to in clause (f) of the definition of the term "Indebtedness" to
the extent that such assets would have been Capital Assets had the synthetic
lease been treated for accounting purposes as a Capitalized Lease.
Capitalization Documents. Collectively, the Stockholders Agreement and
the articles of organization or comparable charter documents, as the case may
be, of the Company and its Subsidiaries.
Capitalized Leases. Leases under which the Company or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with generally accepted accounting
principles.
CERCLA. See ss.7.18(a).
Charges Over Shares. Collectively, (a) the Charge Over Shares, dated or
to be dated on or prior to the Closing Date, between Holmes Far East and the
Agent and (b) the Charge Over Shares, dated or to be dated on or prior to the
Closing Date, between Raider and the Agent, and each to be in form and substance
satisfactory to the Banks and the Agent.
Closing Date. The first date on which the conditions set forth in ss.11
have been satisfied and any Revolving Credit Loans are to be made or any Letter
of Credit is to be issued hereunder.
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Code. The Internal Revenue Code of 1986, as amended.
Collateral. All of the property, rights and interests of the Company
and its Subsidiaries that are or are intended to be subject to the security
interests and mortgages created by the Security Documents.
Commitment. With respect to each Bank, the amount set forth on Schedule
1 hereto as the amount of such Bank's commitment to make Revolving Credit Loans
to the Company and to purchase a risk participation from the Fronting Bank for
Multicurrency Loans made to the Subsidiary Borrowers by the Fronting Bank
pursuant to ss.2.10 hereof, and to participate in the issuance, extension and
renewal of Letters of Credit for the account of, the Borrowers, as the same may
be reduced from time to time; or if such commitment is terminated pursuant to
the provisions hereof, zero.
Commitment Fee Rate. The applicable rate per annum set forth in the
chart contained in the definition of Applicable Margin under the heading
"Commitment Fee Rate".
Commitment Percentage. With respect to each Bank, the percentage set
forth on Schedule 1 hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks.
Company. As defined in the preamble hereto.
Compliance Certificate. See ss.8.4(d).
Consolidated or consolidated. With reference to any term defined
herein, shall mean that term as applied to the accounts of the Company and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.
Consolidated Net Income (or Deficit). The consolidated net income (or
loss) of the Company and its Subsidiaries, determined in accordance with
generally accepted accounting principles and before any reduction in respect of
preferred stock dividends, excluding, however, (a) any gain (but not loss),
together with any related provision for taxes on such gain (but not loss)
realized in connection with (i) any Asset Sale (including, without limitation,
dispositions pursuant to sale and leaseback transactions) or (ii) the
disposition of any securities by the Company or any of its Subsidiaries or the
extinguishment of any Indebtedness of the Company or any of its Subsidiaries and
(b) any extraordinary or nonrecurring gain (but not loss), together with any
related provision for taxes on such extraordinary or nonrecurring gain (but not
loss); provided that (1) the Consolidated Net Income (but not loss) of any
Subsidiary that is accounted for by the equity method of accounting shall be
included only to the extent of the amount of dividends or distributions paid in
cash to the Company or another Subsidiary thereof; (2) the net income of any
Subsidiary shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary of that net income is not
at the date of determination permitted without any prior governmental
-6-
approval (that has not been obtained) or, directly or indirectly, by operation
of the terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to such Subsidiary or
its stockholders; (3) the net income of any Person acquired in a pooling of
interest transaction for any period prior to the date of such acquisition shall
be excluded; and (4) the cumulative effect of a change in accounting principles
shall be excluded; provided, however, solely for purposes of determining the
Leverage Ratio for purposes of the Applicable Margin, Consolidated Net Income
shall exclude any effect of the PRC Reserve up to an aggregate amount of
$600,000 in any fiscal year.
Consolidated Total Interest Expense. For any period, the aggregate
amount of interest required to be paid or accrued by the Company and its
Subsidiaries during such period on all Indebtedness of the Company and its
Subsidiaries outstanding during all or any part of such period, whether such
interest was or is required to be reflected as an item of expense or
capitalized, including payments consisting of interest in respect of any
Capitalized Lease, or any synthetic lease referred to in clause (f) of the
definition of the term "Indebtedness," and including commitment fees, agency
fees, facility fees, balance deficiency fees and similar fees or expenses in
connection with the borrowing of money.
Continuing Directors. As of any date of determination, any member of
the Board of Directors of the Company who (a) was a member of such Board of
Directors on the Closing Date or (b) was nominated for election or elected to
such Board of Directors with the approval of the majority of the Continuing
Directors who were members of such Board at the time of such nomination or
election.
Conversion Request. A notice given by the applicable Borrower to the
Agent of such Borrower's election to convert or continue a Revolving Credit Loan
in accordance with ss.2.7.
Credit Agreement. This Revolving Credit Agreement, including the
Schedules and Exhibits hereto.
Debentures. Collectively, (a) the Debenture, dated or to be dated on or
prior to the Closing Date, between Far East and the Agent, (b) the Debenture,
dated or to be dated on or prior to the Closing Date, between Esteem and the
Agent, and (c) the Debenture, dated or to be dated on or prior to the Closing
Date, between Raider and the Agent and each in form and substance satisfactory
to the Banks and the Agent.
Deeds of Charge. Collectively, (a) the Deed of Charge, dated or to be
dated on or prior to the Closing Date, between Holmes Far East and the Agent and
(b) the Deed of Charge, dated or to be dated on or prior to the Closing Date,
between Raider and the Agent, and each to be in form and substance satisfactory
to the Banks and the Agent.
Default. See ss.13.1.
Delinquent Bank. See ss.15.5.3.
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Delivered Pro Forma Results. As defined in the definition of
"Historical Pro Forma Results".
Distribution. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of the Company, other than
dividends payable solely in shares of common stock of the Company; the purchase,
redemption, or other retirement of any shares of any class of capital stock of
the Company, directly or indirectly through a Subsidiary of the Company or
otherwise; the return of capital by the Company to its shareholders as such; or
any other distribution on or in respect of any shares of any class of capital
stock of the Company.
Documentation Agent. Lehman Commercial Paper Inc., in its capacity as
documentation agent for the Banks.
Dollar Equivalent. On any particular date, with respect to any amount
denominated in Dollars, such amount of Dollars, and with respect to any amount
denominated in a currency other than Dollars, the amount (as conclusively
ascertained by the Agent absent manifest error) of Dollars which could be
purchased by the Agent (in accordance with its normal banking practices) in the
London foreign currency deposit markets with such amount of such currency at the
spot rate of exchange prevailing at or about 11:00 a.m. (London time) on such
date.
Dollars or $. Dollars in lawful currency of the United States of
America.
Domestic Lending Office. Initially, the office of each Bank designated
as such in Schedule 1 hereto; thereafter, such other office of such Bank, if
any, located within the United States that will be making or maintaining Base
Rate Loans.
Domestic Subsidiary. Any Subsidiary which is not a Foreign Subsidiary.
Drawdown Date. The date on which any Revolving Credit Loan is made or
is to be made, and the date on which any Revolving Credit Loan is converted or
continued in accordance with ss.2.7.
EBITDA. With respect to the Company and its Subsidiaries and any fiscal
period, an amount equal to Consolidated Net Income for such period, plus, to the
extent deducted in the calculation of Consolidated Net Income and without
duplication, (a) depreciation and amortization for such period, plus (b) other
noncash charges for such period, plus (c) income tax expense for such period,
plus (d) Consolidated Total Interest Expense paid or accrued during such period,
all as determined on a Pro Forma Basis and in accordance with generally accepted
accounting principles.
Eligible Assignee. Any of (a) a commercial bank, insurance company or
commercial finance company or other financial institution organized under the
laws of the United States, or any State thereof or the District of Columbia, and
having total assets in excess of $1,000,000,000; (b) a savings and loan
association or savings
-8-
bank organized under the laws of the United States, or any State thereof or the
District of Columbia, and having a net worth of at least $100,000,000,
calculated in accordance with generally accepted accounting principles; (c) a
commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having total assets in excess of
$1,000,000,000, provided that such bank is acting through a branch or agency
located in the country in which it is organized or another country which is also
a member of the OECD; (d) the central bank of any country which is a member of
the OECD; and (e) if, but only if, any Event of Default has occurred and is
continuing, any other bank, insurance company, commercial finance company or
other financial institution or other Person approved by the Agent, such approval
not to be unreasonably withheld.
Employee Benefit Plan. Any employee benefit plan within the meaning of
ss.3(3) of ERISA maintained or contributed to by any Borrower or any Subsidiary
of any Borrower, other than a Guaranteed Pension Plan or a Multiemployer Plan.
Environmental Laws. See ss.7.18(a).
EPA. See ss.7.18(b).
Equity Issuance. The sale or issuance by the Company or any of its
Subsidiaries of any of its capital stock or equity interests or any warrants,
rights or options to acquire its capital stock or equity interests.
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Subsidiaries of the Borrowers and, other than for
purposes of ss.7.16, clause (i) of ss.8.11 and ss.9.9(e), any Person which is
treated as a single employer with any Borrower under ss.414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of ss.4043 of ERISA and the regulations
promulgated thereunder.
Esteem. As defined in the preamble hereto.
"Euro" or "Euro" Currency. The use of the term "Euro" in this Credit
Agreement relates to the establishment of the "Euro" as a single currency
pursuant to the Treaty Establishing the European Economic Community, as amended
by the Treaty on the European Union (the Maastrict Treaty), and the conversion
(pursuant to the requirements of such Treaty) of any Obligations under the Loan
Documents from an Optional Currency of a country that is a member of the
European Union into Euro. As of the date that any such Optional Currency is no
longer the lawful currency of its respective country, all payment Obligations
under the Loan Documents that would otherwise be in such Optional Currency shall
thereafter be satisfied in the "Euro" Currency. For the avoidance of doubt, the
parties hereto
-9-
affirm and agree that neither the fixing of a conversion rate of any such
Optional Currency against the Euro, nor the mandatory conversion of such
Obligations into Euro, in each case pursuant to such Treaty, shall require the
early termination of this Credit Agreement or the prepayment of any amount due
under the Loan Documents or create any liability of one party to another party
for any direct or consequential loss otherwise arising from any of such events
to the extent required by such Treaty.
Eurocurrency Interbank Market. Any lawful recognized market in which
deposits of Dollars and the relevant Optional Currencies are offered by
international banking units of United States banking institutions and by foreign
banking institutions to each other and in which foreign currency and exchange
operations or eurocurrency funding operations are customarily conducted.
Eurocurrency Lending Office. Initially, the office of each Bank
designated as such in Schedule 1 hereto; thereafter, such other office of such
Bank, if any, that shall be making or maintaining Eurocurrency Rate Loans.
Eurocurrency Offered Rate. With respect to the Interest Period for any
Eurocurrency Rate Loan denominated in an Optional Currency, the rate per annum
(rounded upwards to the nearest 1/16 of one percent) equal to the rate at which
the Reference Bank is offered deposits in Dollars or the relevant Optional
Currency, as the case may be, two (2) Business Days prior to the beginning of
such Interest Period in the Eurocurrency Interbank Market where the foreign
currency and exchange operations or eurocurrency funding operations of the Agent
are customarily conducted at or about 10:00 a.m. (London time) for delivery on
the first day of such Interest Period and for the number of days comprised
therein and in an amount equal (as nearly as may be) to the Reference Bank's
Commitment Percentage of such Eurocurrency Rate Loan to which such Interest
Period applies.
Eurocurrency Rate. With respect to amounts denominated in Dollars, the
Eurodollar Rate, and with respect to amounts denominated in any Optional
Currency, the International Eurocurrency Rate.
Eurocurrency Rate Loans. Revolving Credit Loans bearing interest
calculated by reference to a Eurocurrency Rate.
Eurocurrency Reserve Rate. For any day with respect to a Eurocurrency
Rate Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
Eurodollar Rate. For any Interest Period with respect to a Eurocurrency
Rate Loan denominated in Dollars, the rate of interest equal to (a) the rate per
annum
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(rounded upwards to the nearest 1/16 of one percent) at which the Reference
Bank's Eurocurrency Lending Office is offered Dollar deposits two (2) Business
Days prior to the beginning of such Interest Period in the interbank eurodollar
market where the eurodollar and foreign currency and exchange operations of such
Eurocurrency Lending Office are customarily conducted, for delivery on the first
day of such Interest Period for the number of days comprised therein and in an
amount comparable to the amount of the Eurocurrency Rate Loan denominated in
Dollars of the Reference Bank to which such Interest Period applies, divided by
(b) a number equal to 1.00 minus the Eurocurrency Reserve Rate, if applicable.
Event of Default. See ss.13.1.
Exchange Offer. The offer by the Company and those certain Domestic
Subsidiaries of the Company party to the Subordinated Guarantee to exchange the
Subordinated Notes issued on the Closing Date pursuant to the Offering for a new
issue of Subordinated Notes (with terms substantially identical to those of the
Subordinated Notes issued on the Closing Date) pursuant to a registration
statement to be filed with the Securities and Exchange Commission within sixty
(60) days after the Closing Date (the "Registration Statement").
Fee Letter. The fee letter, dated on or prior to the Closing Date,
between the Company and the Agent, as the same may be amended, modified or
supplemented from time to time.
Fixed Charge Coverage Ratio. As at any date of determination, the ratio
of (a) EBITDA for the Reference Period most recently ended on such date (or, if
such date is not a fiscal quarter end date, the period of four consecutive
fiscal quarters most recently ended) less the aggregate amount of all Capital
Expenditures made in such period, less the aggregate amount of taxes paid in
cash in such period to (b) the Fixed Charges of the Company and its Subsidiaries
for such Reference Period.
Fixed Charges. For any period, all scheduled mandatory payments of
principal on Indebtedness of the Company and its Subsidiaries made or required
to be made in such period, plus the Consolidated Total Interest Expense of the
Company and its Subsidiaries for such period, less non-cash interest expense and
amortization in such period or write-off of fees and expenses in such period
relating to financing activities.
Foreign Guarantees. Collectively (a) the Guarantee and Indemnities
Agreement and (b) those certain guarantee agreements, each dated as of the date
hereof, from each of Holmes Far East and Raider, and each in form and substance
satisfactory to the Banks and the Agent.
Foreign Security Documents. Collectively, each of the Foreign
Guarantees, the Debentures, the Deeds of Charge, the Share Security Deeds and
the Charges Over Shares.
-11-
Foreign Subsidiary. Any Subsidiary which conducts substantially all of
its business in countries other than the United States of America and that is
organized under the laws of a jurisdiction other than the United States of
America and the States (or the District of Columbia) thereof.
Fronted Loans. That portion of the Revolving Credit Loans which is
funded by the Fronting Bank and is not funded by another Bank.
Fronting Bank. BankBoston, N.A., acting through its Hong Kong branch,
as fronting bank and any other Person who replaces BankBoston, N.A. as Fronting
Bank pursuant to the provisions of ss.2.10.3 hereof, provided, for purposes of
this Credit Agreement, in the event the Fronting Bank is also a Bank, such
Person's funding requirements in its capacity as Fronting Bank shall not include
its independent requirement in its individual capacity to fund as a Bank.
Fronting Loan Event. A Fronting Loan Event shall be deemed to occur if
at any time it should become illegal or would violate any law, order, regulation
or policy (including without limitation any internal banking or other lending
policy of the Fronting Bank) or would otherwise not be practicable for the
Fronting Bank to hold the Fronted Loans.
generally accepted accounting principles. (a) When used in ss.10,
whether directly or indirectly through reference to a capitalized term used
therein, means (i) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year ended on December 31, 1996, and (ii)
to the extent consistent with such principles, the accounting practice of the
Company reflected in its financial statements for the fiscal quarter ended on
September 30, 1997, and (b) when used in general, other than as provided above,
means principles that are (i) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, as in
effect from time to time, and (ii) consistently applied with past financial
statements of the Company adopting the same principles, provided that in each
case referred to in this definition of "generally accepted accounting
principles" a certified public accountant would (but for the absence of
footnotes and year-end adjustments for interim financial statements), insofar as
the use of such accounting principles is pertinent, be in a position to deliver
an unqualified opinion (other than a qualification regarding changes in
generally accepted accounting principles) as to financial statements in which
such principles have been properly applied.
Guaranteed Obligations. See ss.6.3.1 hereof.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of ss.3(2) of ERISA maintained or contributed to by any Borrower or any
Subsidiary of any Borrower or (except for purposes of ss.7.16, clause (i) of
ss.8.11 and ss.9.9(e)) any ERISA Affiliate, the benefits of which are guaranteed
on termination in
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full or in part by the PBGC pursuant to Title IV of ERISA, other than a
Multiemployer Plan.
Guarantee and Indemnities Agreement. The Guarantee and Indemnities,
dated or to be dated on or prior to the Closing Date, made by Esteem in favor of
the Banks and the Agent pursuant to which Esteem guaranties to the Banks and the
Agent the payment and performance of the other Subsidiary Borrowers' Obligations
and in form and substance satisfactory to the Banks and the Agent.
Guarantors. Each Domestic Subsidiary of the Company existing on the
Closing Date and each other Persons which are required to be or become
guarantors from time to time pursuant to ss.8.15 hereof.
Guaranty. The Guaranty, dated or to be dated on or prior to the Closing
Date, made by each Domestic Subsidiary of the Company in favor of the Banks and
the Agent pursuant to which each Domestic Subsidiary of the Company guaranties
to the Banks and the Agent the payment and performance of the Obligations and in
form and substance satisfactory to the Banks and the Agent.
Hazardous Substances. See ss.7.18(b).
Historical Pro Forma Results. The pro forma historical financial
results of the Company and its Subsidiaries on a consolidated basis for the
three consecutive fiscal quarters ended September 30, 1997 delivered to the
Agent on or prior to the Closing Date (the "Delivered Pro Forma Results")
together with the pro forma historical financial results of the Company and its
Subsidiaries for the fiscal quarter ending December 31, 1997, which are prepared
in a manner consistent with the Delivered Pro Forma Results (but excluding fees,
management bonuses and expenses relating to the Transaction) and which are
otherwise reasonably satisfactory to the Agent.
Holmes Acquisition. Holmes Acquisition LLC, a Delaware limited
liability company.
Holmes Far East. As defined in the preamble hereto.
Indebtedness. As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:
(a) every obligation of such Person for money borrowed,
(b) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or
businesses,
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(c) every reimbursement obligation of such Person with respect
to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person,
(d) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (including securities
repurchase agreements but excluding (i) trade accounts payable or
accrued liabilities arising to third parties in the ordinary course of
business and (ii) intercompany accounts payable of the Company or any
of its Subsidiaries to the Company or any of its Subsidiaries, as the
case may be, arising in the ordinary course of business, priced
consistent with past practices and provided that (1) such Subsidiary
agrees on terms acceptable to the Agent that, if any Default or Event
of Default shall have occurred and be continuing, no payment shall be
made or received on such account payable prior to performance and
payment in full, in cash, of all Obligations to the Banks and the
Agent; and (2) the transaction giving rise to such account payable was
either conducted on an arms-length basis for fair market value or is on
terms favorable to the Company or any Guarantor (the "Intercompany
Accounts"),
(e) every obligation of such Person under any Capitalized
Lease,
(f) every obligation of such Person under any lease (a
"synthetic lease") treated as an operating lease under generally
accepted accounting principles and as a loan or financing for U.S.
income tax purposes,
(g) all sales by such Person of (i) accounts or general
intangibles for money due or to become due, (ii) chattel paper,
instruments or documents creating or evidencing a right to payment of
money or (iii) other receivables (collectively "receivables"), whether
pursuant to a purchase facility or otherwise, other than in connection
with the disposition of the business operations of such Person relating
thereto or a disposition of doubtful, bad, overdue or defaulted
receivables for collection or sale and not as a financing arrangement,
and together with any obligation of such Person to pay any discount,
interest, fees, indemnities, penalties, recourse, expenses or other
amounts in connection therewith,
(h) every obligation of such Person (an "equity related
purchase obligation") to purchase, redeem, retire or otherwise acquire
for value any shares of capital stock of any class issued by such
Person, any warrants, options or other rights to acquire any such
shares, or any rights measured by the value of such shares, warrants,
options or other rights other than equity related purchase obligations
which by their terms are not payable until such time as all Obligations
have been indefeasibly repaid in full in cash,
(i) every obligation of such Person under any forward
contract, futures contract, swap, option or other financing agreement
or arrangement (including, without limitation, caps, floors, collars
and similar agreements),
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the value of which is dependent upon interest rates, currency exchange
rates, commodities or other indices,
(j) every obligation in respect of Indebtedness of any other
entity (including any partnership in which such Person is a general
partner) to the extent that such Person is liable therefor as a result
of such Person's ownership interest in or other relationship with such
entity, except to the extent that the terms of such Indebtedness
provide that such Person is not liable therefor and such terms are
enforceable under applicable law,
(k) every obligation, contingent or otherwise, of such Person
guaranteeing, or having the economic effect of guarantying or otherwise
acting as surety for, any obligation of a type described in any of
clauses (a) through (j) (the "primary obligation") of another Person
(the "primary obligor"), in any manner, whether directly or indirectly,
and including, without limitation, any obligation of such Person (i) to
purchase or pay (or advance or supply funds for the purchase of) any
security for the payment of such primary obligation, (ii) to purchase
property, securities or services for the purpose of assuring the
payment of such primary obligation, or (iii) to maintain working
capital, equity capital or other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to
pay such primary obligation.
The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by (u) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with generally accepted
accounting principles, (v) any Capitalized Lease shall be the principal
component of the aggregate of the rentals obligation under such Capitalized
Lease payable over the term thereof that is not subject to termination by the
lessee, (w) any interest rate or exchange rate protection arrangements shall be
the net liability of such Person under such arrangement at such time, calculated
on a basis satisfactory to the Agent in accordance with accepted practices, (x)
any sale of receivables shall be the amount of unrecovered capital or principal
investment of the purchaser (other than the Company or any of its wholly-owned
Subsidiaries) thereof, excluding amounts representative of yield or interest
earned on such investment, (y) any synthetic lease shall be the stipulated loss
value, termination value or other equivalent amount and (z) any equity related
purchase obligation shall be the maximum fixed redemption or purchase price
thereof inclusive of any accrued and unpaid dividends to be comprised in such
redemption or purchase price.
Indenture Trustee. State Street Bank and Trust Company.
Ineligible Securities. Securities which may not be underwritten or
dealt in by member banks of the Federal Reserve System under Section 16 of the
Banking Act of 1993 (12 U.S.C. ss.24, Seventh), as amended.
-15-
Initial Public Offering. The initial underwritten public offering of
the common stock of the Company registered under the Securities Act of 1933.
Instrument of Adherence. See ss.9.5.1.
Intercompany Accounts. As defined in the definition of "Indebtedness".
Interest Coverage Ratio. As at any date of determination, the ratio of
(a) the EBITDA of the Company and its Subsidiaries for the Reference Period
ending on such date (or, if such date is not a fiscal quarter end date, the
period of four consecutive fiscal quarters most recently ended) to (b)
Consolidated Total Interest Expense for such Reference Period less non-cash
interest expense and amortization for such Reference Period or write-off of fees
and expenses in such Reference Period relating to financing activities.
Interest Payment Date. (a) As to any Base Rate Loan, the last day of
the calendar quarter with respect to interest accrued during such calendar
quarter, including, without limitation, the calendar quarter which includes the
Drawdown Date of such Base Rate Loan; and (b) as to any Eurocurrency Rate Loan
in respect of which the Interest Period is (i) three (3) months or less, the
last day of such Interest Period and (ii) more than three (3) months, the date
that is three (3) months from the first day of such Interest Period and, in
addition, the last day of such Interest Period.
Interest Period. With respect to each Revolving Credit Loan, (a)
initially, the period commencing on the Drawdown Date of such Revolving Credit
Loan and ending on the last day of one of the periods set forth below, as
selected by the applicable Borrower in a Loan Request or as otherwise required
by the terms of this Credit Agreement (i) for any Base Rate Loan, the last day
of the calendar quarter; and (ii) for any Eurocurrency Rate Loan, 1, 2, 3, or 6
months; and (b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Revolving Credit Loan and ending on
the last day of one of the periods set forth above, as selected by the
applicable Borrower in a Conversion Request; provided that all of the foregoing
provisions relating to Interest Periods are subject to the following:
(a) if any Interest Period with respect to a Eurocurrency Rate
Loan would otherwise end on a day that is not a Business Day, that
Interest Period shall be extended to the next succeeding Business Day
unless the result of such extension would be to carry such Interest
Period into another calendar month, in which event such Interest Period
shall end on the immediately preceding Business Day;
(b) if any Interest Period with respect to a Base Rate Loan
would end on a day that is not a Business Day, that Interest Period
shall end on the next succeeding Business Day;
-16-
(c) if the applicable Borrower shall fail to give notice as
provided in ss.2.7, (i) for Eurocurrency Rate Loans denominated in
Dollars, the applicable Borrower shall be deemed to have requested a
conversion of the affected Eurocurrency Rate Loan to a Base Rate Loan
and the continuance of all Base Rate Loans as Base Rate Loans on the
last day of the then current Interest Period with respect thereto and
(ii) for Eurocurrency Rate Loans denominated in an Optional Currency,
the relevant Borrower shall repay such Eurocurrency Rate Loan on the
last day of the then current Interest Period with respect thereto;
(d) any Interest Period relating to any Eurocurrency Rate Loan
that begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last
Business Day of a calendar month; and
(e) any Interest Period that would otherwise extend beyond the
Revolving Credit Loan Maturity Date shall end on the Revolving Credit
Loan Maturity Date.
International Eurocurrency Rate. With respect to all Eurocurrency Rate
Loans denominated in an Optional Currency for any Interest Period, the annual
rate of interest, rounded to the nearest 1/16th of one percent (1%), determined
by the Agent for such Interest Period in accordance with the following formula:
Eurocurrency Offered Rate
-------------------------
International Eurocurrency Rate = 1 - Eurocurrency Reserve Rate
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person; provided, however, Intercompany
Accounts shall not be considered Investments. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (d) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
-17-
Kahn Permitted Transferee. Each Person to whom Jordan A. Kahn may
transfer shares of the common stock of the Company pursuant to Section 4.1 of
the Kahn Stock Purchase Agreement.
Kahn Stock Purchase Agreement. That certain Stock Purchase Agreement
dated as of October 27, 1997 between Jordan A. Kahn and Holmes Acquisition.
Letter of Credit. See ss.4.1.1.
Letter of Credit Application. See ss.4.6.
Letter of Credit Fee. See ss.4.1.1.
Letter of Credit Participation. See ss.4.1.4.
Leverage Ratio. As at any date of determination, the ratio of (a) Total
Funded Indebtedness of the Company and its Subsidiaries outstanding on such date
to (b) EBITDA of the Company and its Subsidiaries for the Reference Period ended
on such date (or, if such date is not a fiscal quarter end date the period of
four consecutive fiscal quarters most recently ended), to be calculated on a Pro
Forma Basis.
Loan Account Record. See ss.2.4.
Loan Documents. This Credit Agreement, the Revolving Credit Notes, the
Letter of Credit Applications, the Letters of Credit, the Fee Letter and the
Security Documents.
Loan Request. See ss.2.6.
Majority Banks. As of any date, the Banks having Total Percentages
aggregating to at least fifty-one percent (51%) on such date.
Management Agreement. That Management Agreement dated as of November
26, 1997 between Berkshire Partners and the Company, in the form delivered to
the Banks and the Agent on or prior to the Closing Date.
Material Adverse Effect. A material adverse effect on (a) the business,
condition (financial or otherwise), operations, performance or properties of the
Company and the Guarantors, taken as a whole, or the Company and its
Subsidiaries taken as a whole, or the Collateral, (b) the rights and remedies of
the Agent or any Bank under any Loan Document or (c) the ability of the
Borrowers or any of their Subsidiaries to perform their obligations under the
Loan Documents.
Maximum Drawing Amount. The maximum aggregate amount that the
beneficiaries may at any time draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
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Multicurrency Loans. Revolving Credit Loans made or to be made by the
Fronting Bank to the Subsidiary Borrowers pursuant to ss.2.1 hereof.
Multiemployer Plan. Any multiemployer plan within the meaning of
ss.3(37) of ERISA maintained or contributed to by any Borrower or any Subsidiary
of any Borrower, or (except for ss.7.16) any ERISA Affiliate.
Net Cash Proceeds. With respect to any Equity Issuance, the excess of
the gross cash proceeds received by such Person from such Equity Issuance after
deduction of reasonable and customary transaction expenses (including without
limitation, underwriting discounts and commissions) actually incurred in
connection with the Equity Issuance.
Net Cash Sale Proceeds. The net cash proceeds received by the Company
and its Subsidiaries in respect of any Asset Sale, less the sum of (a) all
reasonable out-of-pocket fees, commissions and other expenses incurred in
connection with such Asset Sale, including the amount (estimated in good faith
by such Person) of income, franchise, sales and other applicable taxes required
to be paid by such Person in connection with such Asset Sale and (b) the
aggregate amount of cash so received by such Person which is used to retire (in
whole or in part) any Indebtedness (other than under the Loan Documents) of such
Person permitted by this Credit Agreement that was secured by a lien or security
interest (if any) permitted by this Credit Agreement having priority over the
liens and security interests (if any) of the Agent (for the benefit of the
Banks) with respect to such assets transferred, and which is required to be
repaid in whole or in part (which repayment, in the case of any other revolving
credit arrangements or multiple advance arrangements, reduces the commitment
thereunder) in connection with such Asset Sale.
Obligations. All indebtedness, obligations and liabilities of any of
the Borrowers and their respective Subsidiaries to any of the Banks and the
Agent, individually or collectively, existing on the date of this Credit
Agreement or arising thereafter, direct or indirect, joint or several, absolute
or contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Credit Agreement or any of the other Loan Documents or in
respect of any of the Revolving Credit Loans made or Reimbursement Obligations
incurred or any of the Revolving Credit Notes, Letter of Credit Applications or
Letters of Credit, or arising or incurred in connection with any interest rate,
foreign exchange and/or currency risk protection arrangements entered into with
any of the Banks, or any documents, agreements or instruments executed in
connection therewith, or other instruments at any time evidencing any thereof.
OC Notice. See ss.2.9.
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Offering. The offering by the Company to certain accredited investors
and qualified institutional buyers of the Subordinated Notes pursuant to the
offering circular dated November 19, 1997.
Offering Documents. Collectively, the Subordinated Notes, the
Subordinated Indenture, the Company's articles of organization and all
documents, instruments and agreements executed in connection with any of the
foregoing (including, without limitation, all documents, instruments and
agreements executed in connection with the exchange of all documents entered
into in connection with the Offering for those to be entered into in connection
with the Exchange Offer).
Optional Currency. Hong Kong Dollars and the "Euro", so long as such
currency is freely convertible into Dollars and which is traded on any
recognized Eurocurrency Interbank Market selected by the Agent in good faith.
outstanding. With respect to the Revolving Credit Loans, the aggregate
unpaid principal thereof as of any date of determination.
Overnight Rate. For any day, (a) as to Revolving Credit Loans
denominated in Dollars, the weighted average interest rate paid by the Agent for
federal funds acquired by the Agent, and (b) as to Revolving Credit Loans
denominated in an Optional Currency, the rate of interest per annum at which
overnight deposits in the applicable Optional Currency, in an amount
approximately equal to the amount with respect to which such rate is being
determined, would be offered for such day by the Agent to major banks in the
London interbank market.
Patent Assignment. The Patent Assignment, dated or to be dated on or
prior to the Closing Date, made by the Company in favor of the Agent and in form
and substance satisfactory to the Banks and the Agent.
PBGC. The Pension Benefit Guaranty Corporation created by ss.4002 of
ERISA and any successor entity or entities having similar responsibilities.
Perfection Certificates. The Perfection Certificates as defined in the
Security Agreements.
Permitted Acquisition. As defined in ss.9.5.1 (b) hereto, and any other
stock or asset acquisition consented to in writing by the Majority Banks.
Permitted Liens. Liens, security interests and other encumbrances
permitted by ss.9.2.
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
PRC Reserve. The amount of the reserve imposed by the appropriate
governmental or other regulatory authority of the People's Republic of China
which
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any Subsidiary organized under the laws of the People's Republic of China is
required to take to protect against repatriation of funds from the People's
Republic of China.
Principal Affiliate. Any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with a specified
Person. For purposes of this definition, "control" (including, with correlative
meanings, the terms "controlling", "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether through the ownership of voting securities,
by agreement or otherwise; provided that beneficial ownership of ten percent
(10%) or more of the Voting Stock of a Person shall be deemed to be control.
Principals. Collectively, Berkshire Partners, Berkshire Fund IV,
Berkshire Fund IV Investment Corp., Berkshire Investors LLC and any of their
respective Principal Affiliates, Jordan A. Kahn and his Principal Affiliates,
Stanley Rosenzweig and Gregory F. White; provided, however, for purposes of this
Credit Agreement, any shares of the capital stock of the Company owned by a Kahn
Permitted Transferee on the Closing Date, and any shares of capital stock of the
Company owned by Jordan A. Kahn on the Closing Date but that subsequently are
transferred to a Kahn Permitted Transferee, will in each case be deemed to be
owned by Jordan A. Kahn.
Pro Forma Basis. In connection with any proposed Permitted Acquisition
after the Closing Date, the calculation of compliance with the financial
covenants described in ss.9.5.1 hereof by the Company and its Subsidiaries
(including the Person to be acquired) with reference to either (a) the audited
historical financial results of the Person so acquired together with any interim
financial results of such Person prepared since the date of the last audited
financial statements and prepared in a manner consistent with past practices or
(b) to the extent such Person to be acquired has no audited historical financial
results, the management prepared financial results of such Person, with such
results to be in form and substance reasonably acceptable to the Agent, and the
Company and its Subsidiaries for the applicable Test Period after giving effect
on a pro forma basis to such Permitted Acquisition in the manner described in
(i), (ii) and (iii) below; and, following a Permitted Acquisition, the
calculation of compliance with the financial covenants contained in ss.10 for
the fiscal quarter in which such Permitted Acquisition occurred and each of the
three fiscal quarters immediately following such Permitted Acquisition with
reference to either (a) the audited historical financial results of the Person
so acquired together with any interim financial results of such Person prepared
since the date of the last audited financial statements and prepared in a manner
consistent with past practices or (b) to the extent such Person to be acquired
has no audited historical financial results, the management prepared financial
results of such Person, with such results to be in form and substance reasonably
acceptable to the Agent and the Company and its Subsidiaries for the applicable
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Test Period after giving effect on a pro forma basis to such Permitted
Acquisition in the manner described in (i), (ii) and (iii) below, provided,
however, that, in each case, in the event that no historical financial results
are available with respect to the Person or assets to be acquired, such
calculations shall be made with reference to reasonable estimates of such past
performance made by the Company based on existing data and other available
information, such estimates to be acceptable to the Agent:
(i) all Indebtedness (whether under this Credit Agreement or
otherwise) and any other balance sheet adjustments incurred or made in
connection with the Permitted Acquisition shall be deemed to have been
incurred or made on the first day of the Test Period, and all
Indebtedness of the Person acquired or to be acquired in such Permitted
Acquisition which was or will have been repaid in connection with the
consummation of the Permitted Acquisition shall be deemed to have been
repaid concurrently with the deemed incurrence of the Indebtedness
incurred in connection with the Permitted Acquisition;
(ii) all Indebtedness assumed to have been incurred pursuant
to the preceding clause (i) shall be deemed to have borne interest at
the sum of (a) the arithmetic mean of (x) the Eurodollar Rate for
Eurocurrency Rate Loans denominated in Dollars having an Interest
Period of one month in effect on the first day of the Test Period and
(y) the Eurodollar Rate for Eurocurrency Rate Loans denominated in
Dollars having an Interest Period of one month in effect on the last
day of the Test Period plus (b) the Applicable Margin for Revolving
Credit Loans then in effect (after giving effect to the Permitted
Acquisition on a Pro Forma Basis); and
(iii) other reasonable cost savings, expenses and other income
statement or operating statement adjustments which are attributable to
the change in ownership and/or management resulting from such Permitted
Acquisition as may be approved by the Agent in writing (which approval
shall not be unreasonably withheld) shall be deemed to have been
realized on the first day of the Test Period; provided, however,
adequately documented reductions in management compensation and rental
expenses which will be effective upon the consummation of such
Permitted Acquisition shall not require the approval of the Agent.
Raider. As defined in the preamble hereto.
Rate Adjustment Period. See the definition of Applicable Margin
RCRA. See ss.7.18(a).
Real Estate. All real property at any time owned or leased (as lessee
or sublessee) by the Company or any of its Subsidiaries.
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Record. The grid attached to a Revolving Credit Note, or the
continuation of such grid, or any other similar record, including computer
records, maintained by any Bank with respect to any Revolving Credit Loan
referred to in such Revolving Credit Note.
Reference Bank. BankBoston, N.A..
Reference Period. The period of (a) the four (4) consecutive fiscal
quarters of the Company ending on the relevant date (or, if such date is not a
fiscal quarter end date, the period of four (4) consecutive fiscal quarters most
recently ended) or (b) if the relevant date occurs prior to the end of the
fiscal quarter ending December 31, 1998, the Reference Period for any
calculations made as of (i) December 31, 1997 shall be for the period of the
four (4) consecutive fiscal quarters ending on such date based on the Historical
Pro Forma Results for such four quarters; (ii) March 31, 1998 shall be the
actual financial results for the fiscal quarter ending March 31, 1998 plus the
immediately prior three fiscal quarters, with such results being based on the
Historical Pro Forma Results; (iii) June 30, 1998 shall be the actual financial
results for the two consecutive fiscal quarters ending June 30, 1998 plus the
financial results of the two consecutive fiscal quarters ended December 31, 1997
based on the Historical Pro Forma Results; and (iv) September 30, 1998 shall be
the actual financial results for the three consecutive fiscal quarters ending
September 30, 1998 plus the financial results of the fiscal quarter ended
December 31, 1997 based on the Historical Pro Forma Results.
Register. See ss.19.3.
Registration Rights Agreement. That certain Registration Rights
Agreement dated as of November 26, 1997 by and among the Company, certain
Domestic Subsidiaries of the Company party to the Subordinated Guarantee,
BancBoston Securities Inc. and Lehman Commercial Paper Inc., as initial
purchasers, and in the form delivered to the Agent and the Banks on or prior to
the Closing Date.
Reimbursement Obligation. The applicable Borrower's obligation to
reimburse the Agent and the Banks on account of any drawing under any Letter of
Credit as provided in ss.4.2.
Representation Agreement. That certain Representation Agreement dated
as of June 20, 1983 between Jordan Kahn Co., Inc. and the Company, and in the
form delivered to the Agent and the Banks on or prior to the Closing Date.
Restricted Payment. In relation to the Company and its Subsidiaries,
any (a) Distribution; (b) payment by the Company or any of its Subsidiaries to
(i) Holmes Acquisition or (ii) to any other Affiliate of the Company or Holmes
Acquisition other than payments to Affiliates (other than Holmes Acquisition)
for goods and services in the ordinary course of business on terms equivalent to
those obtainable in arms length transactions.
Revolving Credit Loan Maturity Date. January 2, 2003.
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Revolving Credit Loans. Revolving credit loans made or to be made by
the Banks to the Borrowers pursuant to ss.2 hereof (including, without
limitation, all Multicurrency Loans).
Revolving Credit Notes. See ss.2.4.
SARA. See ss.7.18(a).
Same Day Funds. With respect to disbursements and payments in (a)
Dollars, immediately available funds, and (b) an Optional Currency, same day or
other funds as may be determined by the Agent to be customary in the place of
disbursement or payment for the settlement of international banking transactions
in the relevant Optional Currency.
Section 20 Subsidiary. A Subsidiary of the bank holding company
controlling any Bank, which Subsidiary has been granted authority by the Federal
Reserve Board to underwrite and deal in certain Ineligible Securities.
Security Agreements. The several Security Agreements, dated or to be
dated on or prior to the Closing Date, between the Company and certain of its
Subsidiaries and the Agent and in form and substance satisfactory to the Banks
and the Agent.
Security Documents. The Guaranty, the Security Agreements, the
Debentures, the Deeds of Charge, the Patent Assignment, the Trademark
Assignment, the Share Security Deeds, the Charges Over Shares, the Foreign
Guarantees, the Stock Pledge Agreement and all other instruments and documents,
including without limitation Uniform Commercial Code financing statements,
required to be executed or delivered pursuant to any Security Document.
Share Security Deeds. Collectively, (a) the Share Security Deed, dated
or to be dated on or prior to the Closing Date, between Far East and the Agent
and (b) the Share Security Deed, dated or to be dated on or prior to the Closing
Date, between Esteem and the Agent, and each in form and substance satisfactory
to the Banks and the Agent.
Stockholders Agreement. The Stockholders Agreement dated as of November
26, 1997 among the Company and certain stockholders party thereto and in the
form delivered to the Agent on or prior to the Closing Date.
Stock Option Plan. The 1997 Stock Option Plan, a copy of which has been
delivered to the Agent on or prior to the Closing Date.
Stock Pledge Agreement. The Stock Pledge Agreement, dated or to be
dated on or prior to the Closing Date, between the Company and the Agent and in
form and substance satisfactory to the Banks and the Agent.
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Stock Purchase Agreement. The Stock Purchase and Redemption Agreement
dated as of October 27, 1997 by and among Asco Investments Ltd., Jordan A. Kahn,
the Company, Holmes Products (Far East) Ltd. and Holmes Acquisition.
Subordinated Debt. Unsecured Indebtedness of the Company or any of its
Subsidiaries that is expressly subordinated and made junior to the payment and
performance in full of the Obligations on terms satisfactory to the Agent and
the Banks and evidenced as such by the Subordinated Debt Documents.
Subordinated Debt Documents. The Subordinated Purchase Agreement, the
Subordinated Indenture, the Subordinated Guarantees, the Registration Rights
Agreement and the Subordinated Notes.
Subordinated Guarantees. The guarantees to be entered into by certain
of the Company's Domestic Subsidiaries pursuant to the Subordinated Indenture,
which shall be in form and substance satisfactory to the Agent and the Banks.
Subordinated Indenture. The Indenture dated as of November 26, 1997
between the Company and the Indenture Trustee and any such documents,
instruments or agreements issued in exchange pursuant to the Exchange Offer, and
each in the form delivered to the Agent on or prior to the Closing Date.
Subordinated Notes. The 9 7/8% Senior Subordinated Notes due 2007
issued by the Company in the aggregate principal amount of $105,000,000 pursuant
to the Subordinated Indenture and any such documents, instruments or agreements
issued in exchange therefor pursuant to the Exchange Offer.
Subordinated Purchase Agreement. The Purchase Agreement, dated as of a
date on or prior to the Closing Date, among the Company, BancBoston Securities
Inc. and Lehman Commercial Paper Inc., as initial purchasers, relating to the
issuance and sale by the Company of the Subordinated Notes, which shall be in
form and substance satisfactory to the Agent and the Banks.
Subsidiary. Any corporation, association, trust, limited liability
company, partnership or other business entity of which the designated parent
shall at any time own directly or indirectly through a Subsidiary or
Subsidiaries at least a majority (by number of votes) of the outstanding Voting
Stock.
Subsidiary Borrowers. As defined in the preamble hereto.
Test Period. The period of all fiscal quarters (and any portion of a
fiscal quarter) included in any covenant calculation and occurring prior to the
date of such Permitted Acquisition as set forth in the definition of Pro Forma
Basis.
Total Commitment. The sum of the Commitments of the Banks, as in effect
from time to time.
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Total Funded Indebtedness. All Indebtedness of the Company and its
Subsidiaries for borrowed money (including, without limitation, all guarantees
by such Person of Indebtedness of others for borrowed money), purchase money
Indebtedness, with respect to Capitalized Leases and synthetic leases,
determined on a consolidated basis in accordance with generally accepted
accounting principles; provided, however, for purposes of calculating the
Leverage Ratio, Total Funded Indebtedness shall not include (a) the Maximum
Drawing Amount of any issued, outstanding but undrawn documentary Letters of
Credit and (b) the maximum aggregate amount that the beneficiaries may at any
time draw under the Asco Letters of Credit, as such aggregate amount may be
reduced from time to time pursuant to the terms of such Asco Letters of Credit.
Total Percentage. With respect to each Bank, the Commitment (or, if the
Commitment is terminated, Revolving Credit Loans, Letter of Credit
Participations in Unpaid Reimbursement Obligations and participating interests
in the risk relating to outstanding Letters of Credit and Fronted Loans) held by
such Bank as a percentage of the Total Commitment.
Trademark Assignment. The Trademark Assignment, dated or to be dated on
or prior to the Closing Date, made by the Company in favor of the Agent and in
form and substance satisfactory to the Banks and the Agent.
Transaction. The series of related transactions occurring on or prior
to the Closing Date in which (a) Asco and Jordan A. Kahn shall, pursuant to the
terms of the Stock Purchase Agreement, contribute 100% of the capital stock of
Holmes Far East owned by each such Person to the Company (at which time Holmes
Far East shall become a wholly-owned Subsidiary of the Company); (b) Holmes
Acquisition and its assignees shall, pursuant to the terms of the Stock Purchase
Agreement, purchase approximately $16,900,000 of the capital stock of the
Company from the Company and, pursuant to the terms of the Kahn Stock Purchase
Agreement, purchase approximately $9,300,000 of the capital stock of the Company
from Jordan A. Kahn; and (c) the Company shall, pursuant to the terms of the
Stock Purchase Agreement, redeem an amount of its capital stock such that Asco
Investments Ltd.
shall hold approximately 5.1% of such capital stock after giving effect thereto.
Transaction Documents. All documents, instruments and agreements which
are to be executed in connection with the Transaction (including, but not
limited to, the Stock Purchase Agreement and the Kahn Stock Purchase Agreement),
all in form and substance satisfactory to the Agent and the Banks.
Type. As to any Revolving Credit Loan, its nature as a Base Rate Loan
or a Eurocurrency Rate Loan.
Uniform Customs. With respect to any Letter of Credit, the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500 or any successor version thereto adopted
by the Agent in the ordinary course of its business as a letter of credit issuer
and in effect at the time of issuance of such Letter of Credit.
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Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which
the applicable Borrower does not reimburse the Agent and the Banks on the date
specified in, and in accordance with, ss.4.2.
Voting Stock. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, limited liability
company, partnership, trust or other business entity involved, whether or not
the right so to vote exists by reason of the happening of a contingency.
1.2. Rules of Interpretation.
(a) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented from
time to time in accordance with its terms and the terms of this Credit
Agreement.
(b) The singular includes the plural and the plural includes
the singular.
(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting principles
applied on a consistent basis by the accounting entity to which they
refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, have
the meanings assigned to them therein, with the term "instrument" being
that defined under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular "ss." refers to that section of
this Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Credit Agreement as a whole and not to
any particular section or subdivision of this Credit Agreement.
(j) Unless otherwise expressly indicated, in the computation
of periods of time from a specified date to a later specified date, the
word
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"from" means "from and including," the words "to" and "until" each
mean "to but excluding," and the word "through" means "to and
including."
(k) This Credit Agreement and the other Loan Documents may use
several different limitations, tests or measurements to regulate the
same or similar matters. All such limitations, tests and measurements
are, however, cumulative and are to be performed in accordance with the
terms thereof.
(l) This Credit Agreement and the other Loan Documents are the
result of negotiation among, and have been reviewed by counsel to,
among others, the Agent and the Borrower and are the product of
discussions and negotiations among all parties. Accordingly, this
Credit Agreement and the other Loan Documents are not intended to be
construed against the Agent or any of the Banks merely on account of
the Agent's or any Bank's involvement in the preparation of such
documents.
2. THE REVOLVING CREDIT FACILITY.
2.1. Commitment to Lend.
2.1.1. Revolving Credit Loans to Company. Subject to the terms
and conditions set forth in this Credit Agreement, each of the Banks
severally agrees to lend to the Company and the Company may borrow,
repay, and reborrow from time to time from the Closing Date up to but
not including the Revolving Credit Loan Maturity Date upon notice by
the Company to the Agent given in accordance with ss.2.6, such sums in
Dollars as are requested by the Company up to a maximum aggregate
amount outstanding (after giving effect to all amounts requested by any
Borrower) at any one time equal to such Bank's Commitment minus such
Bank's Commitment Percentage of the sum of the Maximum Drawing Amount
and all Unpaid Reimbursement Obligations, provided that the sum of the
outstanding amount of the Revolving Credit Loans (after giving effect
to all amounts requested), plus the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations shall not at any time exceed the Total
Commitment. The Revolving Credit Loans shall be made pro rata in
accordance with each Bank's Commitment Percentage. Each request for a
Revolving Credit Loan hereunder shall constitute a representation and
warranty by the Company that the conditions set forth in ss.11 (other
than ss.11.21) and ss.12, in the case of the initial Revolving Credit
Loans to be made on the Closing Date, and ss.12, in the case of all
other Revolving Credit Loans, have been satisfied on the date of such
request. Each Base Rate Loan shall be denominated in Dollars. Each
Eurocurrency Rate Loan to the Company shall be denominated in Dollars.
2.1.2. Multicurrency Loans to Subsidiary Borrowers. Subject to
the terms and conditions set forth in this Credit Agreement, each of
the Banks severally agrees to lend to the Subsidiary Borrowers and the
Subsidiary Borrowers may borrow, repay, and reborrow from time to time
from the
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Closing Date up to but not including the Revolving Credit Loan Maturity
Date upon notice by the applicable Subsidiary Borrower to the Agent
given in accordance with ss.2.6, such sums in Dollars and/or at the
applicable Subsidiary Borrower's option from time to time, subject to
ss.2.9 hereof, in an Optional Currency, as are requested by the
applicable Subsidiary Borrower up to a maximum aggregate amount
outstanding (after giving effect to all amounts requested) at any one
time equal to such Bank's Commitment minus such Bank's Commitment
Percentage of the sum of the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations, provided that the sum of the outstanding
amount of the Revolving Credit Loans (after giving effect to all
amounts requested) plus the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations shall not at any time exceed the Total
Commitment, and, provided further, that (a) the sum of the outstanding
amount of all Revolving Credit Loans (after giving effect to all
amounts requested) advanced to the Subsidiary Borrowers shall not at
any time exceed $15,000,000, and (b) the sum of the outstanding amount
of all Revolving Credit Loans (after giving effect to all amounts
requested) advanced to the Subsidiary Borrowers plus the Maximum
Drawing Amount and all Unpaid Reimbursement Obligations shall not at
any time exceed $20,000,000. The Revolving Credit Loans shall be made
pro rata in accordance with each Bank's Commitment Percentage,
provided, however, that notwithstanding anything to the contrary
contained herein, with respect to any Revolving Credit Loan denominated
in an Optional Currency, the Commitment Percentage of each Bank shall
be fronted by the Fronting Bank (with each Bank hereby agreeing to
participate in the risk associated with such Multicurrency Loan in
accordance with ss.2.10 hereof), with each Bank having no obligation or
commitment to fund in any Optional Currency. Each request for a
Revolving Credit Loan hereunder shall constitute a representation and
warranty by the requesting Subsidiary Borrower that the conditions set
forth in ss.11 and ss.12, in the case of the initial Revolving Credit
Loans to be made on the Closing Date, and ss.12, in the case of all
other Revolving Credit Loans, have been satisfied on the date of such
request. Each Eurocurrency Rate Loan to the Subsidiary Borrowers shall
be denominated in Dollars, or, subject to ss.2.9 hereof, in an Optional
Currency.
2.2. Commitment Fee. The Company agrees to pay to the Agent for the
accounts of the Banks in accordance with their respective Commitment Percentages
a commitment fee calculated at the rate of the Commitment Fee Rate per annum on
the average daily amount during each calendar quarter or portion thereof from
the Closing Date to the Revolving Credit Loan Maturity Date by which the Total
Commitment minus the sum of the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations exceeds the outstanding amount of Revolving Credit
Loans during such calendar quarter. The commitment fee shall be payable
quarterly in arrears on the first day of each calendar quarter for the
immediately preceding calendar quarter commencing on the first such date
following the date hereof, with a final payment on the Revolving Credit Maturity
Date or any earlier date on which the Commitments shall terminate.
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2.3. Reduction of Total Commitment. The Company shall have the right at
any time and from time to time upon seven (7) Business Days prior written notice
to the Agent to reduce by $5,000,000 or an integral multiple of $1,000,000 in
excess thereof or terminate entirely the Total Commitment, whereupon the
Commitments of the Banks shall be reduced pro rata in accordance with their
respective Commitment Percentages of the amount specified in such notice or, as
the case may be, terminated. Promptly after receiving any notice of the Company
delivered pursuant to this ss.2.3, the Agent will notify the Banks of the
substance thereof. Upon the effective date of any such reduction or termination,
the Borrower shall pay to the Agent for the respective accounts of the Banks the
full amount of any commitment fee then accrued on the amount of the reduction.
No reduction or termination of the Commitments may be reinstated.
2.4. The Revolving Credit Notes; Loan Accounts. The Revolving Credit
Loans shall be evidenced by separate promissory notes of the Company in
substantially the form of Exhibit A hereto (each a "Revolving Credit Note"),
dated as of the Closing Date and completed with appropriate insertions. The
obligations of each of the Subsidiary Borrowers to repay all amounts borrowed by
it as Revolving Credit Loans, all interest thereon and all other amounts payable
by it in respect thereof shall be evidenced by this Credit Agreement, it being
the intention of the parties hereto that each Subsidiary Borrower's obligations
with respect to the Revolving Credit Loans owed by it is evidenced only as
stated herein and not by separate promissory notes or other instruments. One
Revolving Credit Note shall be payable to the order of each Bank in a principal
amount equal to such Bank's Commitment or, if less, the outstanding amount of
all Revolving Credit Loans made by such Bank, plus interest accrued thereon, as
set forth below. Each of the Borrowers irrevocably authorizes each Bank to make
or cause to be made, at or about the time of the Drawdown Date of any Revolving
Credit Loan or at the time of receipt of any payment of principal on such Bank's
Revolving Credit Note or loan account, as the case may be, an appropriate
notation on such Bank's Record or record pertaining to the loan account (the
"Loan Account Record"), as the case may be, reflecting the making of such
Revolving Credit Loan or (as the case may be) the receipt of such payment. The
outstanding amount of the Revolving Credit Loans set forth on such Bank's Record
and Loan Account Record shall be prima facie evidence of the principal amount
thereof owing and unpaid to such Bank, but the failure to record, or any error
in so recording, any such amount on such Bank's Record or Loan Account Record,
as the case may be, shall not limit or otherwise affect the obligations of the
Borrowers hereunder or under any Revolving Credit Note to make payments of
principal of or interest on any Revolving Credit Note or loan account when due.
2.5. Interest on Revolving Credit Loans. Except as otherwise provided
in ss.5.11,
(a) Each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of
the Interest Period with respect thereto at the rate per annum equal to
the
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Base Rate plus the Applicable Margin with respect to Base Rate Loans
as in effect from time to time.
(b) Each Eurocurrency Rate Loan shall bear interest for the
period commencing with the Drawdown Date thereof and ending on the last
day of the Interest Period with respect thereto at the rate per annum
equal to the Eurodollar Rate determined for such Interest Period plus
the Applicable Margin with respect to Eurocurrency Rate Loans as in
effect from time to time.
(c) Each Borrower promises to pay interest on each Revolving
Credit Loan requested by such Borrower in arrears on each Interest
Payment Date with respect thereto.
2.6. Requests for Revolving Credit Loans.
The applicable Borrower shall give to the Agent written notice
in the form of Exhibit B hereto (or telephonic notice confirmed in a
writing in the form of Exhibit B hereto) of each Revolving Credit Loan
requested hereunder (a "Loan Request") no less than (a) one (1)
Business Day prior to the proposed Drawdown Date of any Base Rate Loan
and (b) three (3) Business Days prior to the proposed Drawdown Date of
any Eurocurrency Rate Loan, provided that any such notice requesting a
Revolving Credit Loan denominated in an Optional Currency must comply
with the requirements of this ss.2.6 and the requirements of an OC
Notice pursuant to ss.2.9(a). Each such notice shall specify (i) the
principal amount of the Revolving Credit Loan requested, stated either
in Dollars or, subject to ss.2.9 hereof, in an Optional Currency, (ii)
the proposed Drawdown Date of such Revolving Credit Loan, (iii) the
Interest Period for such Revolving Credit Loan and (iv) the Type of
such Revolving Credit Loan. Promptly upon receipt of any such notice
(but in any event on the day the Agent receives a request for a
Revolving Credit Loan by the Company and by the day following the date
the Agent receives a request for a Revolving Credit Loan by a
Subsidiary Borrower), the Agent shall notify each of the Banks thereof.
Each Loan Request shall be irrevocable and binding on the Borrowers and
shall obligate the requesting Borrower to accept the Revolving Credit
Loan requested from the Banks on the proposed Drawdown Date. Each Loan
Request shall be in a minimum aggregate amount of $500,000 or an
integral multiple of $100,000 in excess thereof.
2.7. Conversion Options.
2.7.1. Conversion to Different Type of Revolving Credit Loan.
The Borrowers may elect from time to time to convert any outstanding
Revolving Credit Loan denominated in Dollars to a Revolving Credit Loan
of another Type denominated in Dollars, provided that (a) with respect
to any such conversion of a Revolving Credit Loan to a Base Rate Loan,
the applicable
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Borrower shall give the Agent at least one (1) Business Day prior
written notice of such election; (b) with respect to any such
conversion of a Base Rate Loan to a Eurocurrency Rate Loan, the
applicable Borrower shall give the Agent at least three (3) Business
Days prior written notice of such election; (c) with respect to any
such conversion of a Eurocurrency Rate Loan into a Revolving Credit
Loan of another Type, such conversion shall only be made on the last
day of the Interest Period with respect thereto and (d) no Revolving
Credit Loan may be converted into a Eurocurrency Rate Loan when any
Default or Event of Default has occurred and is continuing. The Agent
shall promptly notify the Banks of such election (but in any event on
the day the Agent receives an election by the Company and by the day
following the date the Agent receives an election by any Subsidiary
Borrower). On the date on which such conversion is being made each Bank
shall take such action as is necessary to transfer its Commitment
Percentage of such Revolving Credit Loans to its Domestic Lending
Office or its Eurocurrency Lending Office, as the case may be. All or
any part of outstanding Revolving Credit Loans denominated in Dollars
of any Type may be converted into a Revolving Credit Loan of another
Type as provided herein, provided that any partial conversion shall be
in an aggregate principal amount of $500,000 or an integral multiple of
$100,000 in excess thereof. Each Conversion Request relating to the
conversion of a Revolving Credit Loan to a Eurocurrency Rate Loan shall
be irrevocable by the applicable Borrower.
2.7.2. Continuation of Type of Revolving Credit Loan. Any
Revolving Credit Loan of any Type may be continued as a Revolving
Credit Loan of the same Type upon the expiration of an Interest Period
with respect thereto by compliance by the applicable Borrower with the
notice provisions contained in ss.2.7.1; provided that (a) as to any
Eurocurrency Rate Loans denominated in Dollars, no such Eurocurrency
Rate Loan may be continued as such when any Default or Event of Default
has occurred and is continuing, but shall be automatically converted to
a Base Rate Loan on the last day of the first Interest Period relating
thereto ending during the continuance of any Default or Event of
Default of which officers of the Agent active upon the Company's
account have actual knowledge; and (b) as to any Eurocurrency Rate Loan
denominated in an Optional Currency, no such Eurocurrency Rate Loan may
be continued as such when a Default or Event of Default has occurred or
is continuing or the provisions of ss.2.9 hereof have not or cannot be
met at the time of such continuation, but shall be repaid by the
relevant Subsidiary Borrower on the last day of the Interest Period
relating thereto. In the event that the applicable Borrower fails to
provide any such notice with respect to the continuation of any
Eurocurrency Rate Loan as such, then (a) such Eurocurrency Rate Loan
denominated in Dollars shall be automatically converted to a Base Rate
Loan on the last day of the first Interest Period relating thereto; and
(b) as to any Eurocurrency Rate Loan denominated in an Optional
Currency, shall be repaid on the last day of the Interest Period
relating thereto. The Agent shall notify the Banks
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promptly when any such automatic conversion contemplated by this ss.2.7
is scheduled to occur.
2.7.3. Eurocurrency Rate Loans. Any conversion to or from
Eurocurrency Rate Loans shall be in such amounts and be made pursuant
to such elections so that, after giving effect thereto, the aggregate
principal amount of all Eurocurrency Rate Loans having the same
Interest Period shall not be less than $500,000 or a whole multiple of
$100,000 (or, in the case of a Eurocurrency Rate Loan denominated in an
Optional Currency, that whole number which is nearest to the Dollar
Equivalent of $500,000, rounded to the nearest one thousandth) in
excess thereof.
2.8. Funds for Revolving Credit Loan.
2.8.1. Funding Procedures for Revolving Credit Loans to
Company. Not later than 1:00 p.m. (Boston time) on the proposed
Drawdown Date of any Revolving Credit Loans to be made to the Company,
each of the Banks will make available to the Agent to credit to the
Company's account in Same Day Funds, the amount of such Bank's
Commitment Percentage of the amount of the requested Revolving Credit
Loans at the Agent's Head Office. Upon receipt from each Bank of such
amount, and upon receipt of the documents required by ss.11 and ss.12
and the satisfaction of the other conditions set forth therein, to the
extent applicable, the Agent will make available to the Company the
aggregate amount of such Revolving Credit Loans made available to the
Agent by the Banks. The failure or refusal of any Bank to make
available to the Agent at the aforesaid time and place on any Drawdown
Date the amount of its Commitment Percentage of the requested Revolving
Credit Loans shall not relieve any other Bank from its several
obligation hereunder to make available to the Agent the amount of such
other Bank's Commitment Percentage of any requested Revolving Credit
Loans.
2.8.2. Advances by Agent for Revolving Credit Loans to
Company. The Agent may, unless notified to the contrary by any Bank
prior to a Drawdown Date, assume that such Bank has made available to
the Agent on such Drawdown Date the amount of such Bank's Commitment
Percentage of the Revolving Credit Loans to be made on such Drawdown
Date, and the Agent may (but it shall not be required to), in reliance
upon such assumption, make available to the Company a corresponding
amount. If any Bank makes available to the Agent such amount on a date
after such Drawdown Date, such Bank shall pay to the Agent on demand an
amount equal to the product of (a) the average computed for the period
referred to in clause (c) below, of the Overnight Rate for each day
included in such period, times (b) the amount of such Bank's Commitment
Percentage of such Revolving Credit Loans, times (c) a fraction, the
numerator of which is the number of days that elapse from and including
such Drawdown Date to the date on which the amount of such Bank's
Commitment Percentage of such
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Revolving Credit Loans shall become immediately available to the Agent,
and the denominator of which is 365. A statement of the Agent submitted
to such Bank with respect to any amounts owing under this paragraph
shall be prima facie evidence of the amount due and owing to the Agent
by such Bank. If the amount of such Bank's Commitment Percentage of
such Revolving Credit Loans is not made available to the Agent by such
Bank within three (3) Business Days following such Drawdown Date, the
Agent shall be entitled to recover such amount from the Company on
demand, with interest thereon at the rate per annum applicable to the
Revolving Credit Loans made on such Drawdown Date.
2.8.3. Funding Procedures for Revolving Credit Loans
Denominated in Dollars to Subsidiary Borrowers. Not later than 11:00
a.m. (Hong Kong time) on the proposed Drawdown Date of any Revolving
Credit Loans requested by the applicable Subsidiary Borrower and which
is denominated in Dollars, each of the Banks will make available to the
Agent to credit to the applicable Subsidiary Borrower's account in Same
Day Funds, the amount of such Bank's Commitment Percentage of the
amount of the requested Revolving Credit Loans at the Agent's local
branch located at Jardine House, Suites 801-809, One Connaught Place,
Central Hong Kong. Upon receipt from each Bank of such amount, and upon
receipt of the documents required by ss.11 and ss.12 and the
satisfaction of the other conditions set forth therein, to the extent
applicable, the Agent will make available to the applicable Subsidiary
Borrower the aggregate amount of such Revolving Credit Loans made
available to the Agent by the Banks. The failure or refusal of any Bank
to make available to the Agent at the aforesaid time and place on any
Drawdown Date the amount of its Commitment Percentage of the requested
Revolving Credit Loans shall not relieve any other Bank from its
several obligation hereunder to make available to the Agent the amount
of such other Bank's Commitment Percentage of any requested Revolving
Credit Loans.
2.8.4. Advances by Agent for Revolving Credit Loans
Denominated in Dollars to Subsidiary Borrowers. The Agent may, unless
notified to the contrary by any Bank prior to a Drawdown Date, assume
that such Bank has made available to the Agent on such Drawdown Date
the amount of such Bank's Commitment Percentage of the Revolving Credit
Loans to be made in Dollars to the applicable Subsidiary Borrower on
such Drawdown Date, and the Agent may (but it shall not be required
to), in reliance upon such assumption, make available to the applicable
Subsidiary Borrower a corresponding amount. If any Bank makes available
to the Agent such amount on a date after such Drawdown Date, such Bank
shall pay to the Agent on demand an amount equal to the product of (a)
the average computed for the period referred to in clause (c) below, of
the Overnight Rate for each day included in such period, times (b) the
amount of such Bank's Commitment Percentage of such Revolving Credit
Loans, times (c) a fraction, the numerator of which is the number of
days that elapse from and
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including such Drawdown Date to the date on which the amount of such
Bank's Commitment Percentage of such Revolving Credit Loans shall
become immediately available to the Agent, and the denominator of which
is 365. A statement of the Agent submitted to such Bank with respect to
any amounts owing under this paragraph shall be prima facie evidence of
the amount due and owing to the Agent by such Bank. If the amount of
such Bank's Commitment Percentage of such Revolving Credit Loans is not
made available to the Agent by such Bank within three (3) Business Days
following such Drawdown Date, the Agent shall be entitled to recover
such amount from the applicable Subsidiary Borrower on demand, with
interest thereon at the rate per annum applicable to the Revolving
Credit Loans made on such Drawdown Date.
2.8.5. Funding Procedures for Revolving Credit Loans
Denominated in an Optional Currency to Subsidiary Borrowers. Not later
than 11:00 a.m. (Hong Kong time) on the proposed Drawdown Date of any
Revolving Credit Loans which is denominated in an Optional Currency to
any Subsidiary Borrower, the Fronting Bank shall make available to the
Agent at its local office at Jardine House, Suites 801-809, One
Connaught Place, Central Hong Kong the amount of such Revolving Credit
Loans made or to be made on such date corresponding to the aggregate
Commitment Percentages of the Banks. Upon receipt from the Fronting
Bank of such amount, and upon receipt of the documents required by
ss.11 and ss.12 and the satisfaction of the other conditions set forth
therein, to the extent applicable, the Agent will make available to the
applicable Subsidiary Borrower the aggregate amount of such Revolving
Credit Loans made available to the Agent by the Fronting Bank.
2.8.6. Advances by Agent for Revolving Credit Loans
denominated in Optional Currency to Subsidiary Borrowers. The Agent
may, unless notified to the contrary by the Fronting Bank prior to a
Drawdown Date, assume that the Fronting Bank has made available to the
Agent on such Drawdown Date the amount of the aggregate Commitment
Percentages of the Banks of such Revolving Credit Loans to be made on
such Drawdown Date, and the Agent may (but it shall not be required
to), in reliance upon such assumption, make available to the applicable
Subsidiary Borrower a corresponding amount. If the Fronting Bank makes
available to the Agent such amount on a date after such Drawdown Date,
the Fronting Bank shall pay to the Agent on demand an amount equal to
the product of (a) the average computed for the period referred to in
clause (c) below, of the Overnight Rate for each day included in such
period, times (b) the aggregate Commitment Percentages of the Banks of
such Revolving Credit Loans, times (c) a fraction, the numerator of
which is the number of days that elapse from and including such
Drawdown Date to the date on which the amount of the aggregate
Commitment Percentages of all the Banks of such Revolving Credit Loans
shall become immediately available to the Agent, and the denominator of
which is 365. A statement of the Agent submitted to the
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Fronting Bank with respect to any amounts owing under this paragraph
shall be prima facie evidence of the amount due and owing to the Agent
by such Bank. If the amount of the aggregate Commitment Percentages of
all Banks of such Revolving Credit Loans is not made available to the
Agent by the Fronting Bank within three (3) Business Days following
such Drawdown Date, the Agent shall be entitled to recover such amount
from the applicable Subsidiary Borrower on demand, with interest
thereon at the rate per annum applicable to the Revolving Credit Loans
made on such Drawdown Date.
2.9. Optional Currencies.
2.9.1. Request for Optional Currency. Subject to the
limitations set forth in ss.2.1., any Subsidiary Borrower may, upon at
least three (3) Business Days' notice to the Agent (an "OC Notice"),
request that one or more Revolving Credit Loans be made in an Optional
Currency, provided that any Revolving Credit Loan proposed to be made
under this ss.2.9.1 shall be in an amount not less than $250,000, or a
greater amount which is an integral multiple of $100,000, or the Dollar
Equivalent in an Optional Currency. Each OC Notice requesting a
Revolving Credit Loan in an Optional Currency shall be by written
notice (or telephonic notice confirmed in writing by the applicable
Subsidiary Borrower), specifying (a) the Revolving Credit Loan to be
made, (b) the requested Drawdown Date of the proposed borrowing of such
Revolving Credit, (c) the requested Optional Currency in which the
Revolving Credit Loan is to be made, and (d) the initial Interest
Period for the Revolving Credit Loan to be borrowed. If any Bank, on or
prior to any Drawdown Date, determines (which determination shall be
conclusive) that the requested Optional Currency is not freely
transferable and convertible into Dollars or that it will be
impracticable for such Bank to fund the Revolving Credit Loan in such
Optional Currency, then such Bank shall immediately so notify the
Agent, which notification shall be given immediately by the Agent to
the applicable Subsidiary Borrower, and such Bank's portion of the
requested Revolving Credit Loan shall instead be denominated in
Dollars. In the event that the applicable Subsidiary Borrower repays
such portion of a Revolving Credit Loan denominated in Dollars in
accordance with ss.3 hereof and such repayment, and the fluctuation of
currency exchange rates, results in Revolving Credit Loans being then
outstanding that are not in Dollar Equivalent amounts held pro rata in
accordance with the Commitment Percentages, then all subsequent
principal repayments denominated in the Optional Currency which the
applicable Bank did not advance shall be made by the applicable
Subsidiary Borrower to the Agent for the respective accounts of the
Banks other than such Bank on a pro rata basis until such time as the
Revolving Credit Loans are outstanding on a pro rata basis. Subject to
the foregoing and to the satisfaction of the terms and conditions of
ss.11 (in the case of such Revolving Credit Loans to be made on the
Closing Date) and ss.12, each Revolving Credit Loan requested to be
made in an Optional Currency will be made on the Drawdown Date
specified therefor in the OC Notice, in the currency
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requested in the OC Notice and, upon being so made, will have the
Interest Period requested in the OC Notice.
2.9.2. Exchange Rate. For purposes of this Credit Agreement
the amount in one Optional Currency which shall be equivalent on any
particular date to a specified amount in another Optional Currency
shall be that amount (as conclusively ascertained by the Agent by its
normal banking practices, absent manifest error) in the first Optional
Currency which is or could be purchased by the Agent (in accordance
with normal banking practices) with such specified amount in the second
Optional Currency in any recognized Eurocurrency Interbank Market
selected by the Agent in good faith for delivery on such date at the
spot rate of exchange prevailing at 10:00 a.m. (London time) (or as
soon thereafter as practicable) on such date.
2.9.3. Multiple Denominations. In the event that any portion
of the funds available under the terms of this Credit Agreement is
denominated in one or more Optional Currencies, the Dollar Equivalent
of such portion of the funds shall be calculated pursuant to the
definition of "Dollar Equivalent". The amount so determined shall then
be added to the amount already outstanding in Dollars for the purpose
of determining the remaining availability of funds under ss.2.1 and
ss.2.9.1 hereof and any required repayments under the following
ss.2.9.4.
2.9.4. Repayment. If at any time prior to the Revolving Credit
Loan Maturity Date, the Dollar Equivalent of the aggregate principal
amount outstanding of all Revolving Credit Loans hereunder shall exceed
the Total Commitment as a result of fluctuations in respective currency
conversion rates for three (3) or more consecutive Business Days, the
applicable Subsidiary Borrower shall pay or cause to be paid
immediately, upon demand made by the Agent, such amounts as are
sufficient to eliminate such excess and to reduce the aggregate
principal amount outstanding to the Dollar Equivalent in the applicable
currencies of the Total Commitment. In the event there are any
Revolving Credit Loans outstanding which are denominated in an Optional
Currency, the Agent shall provide the Banks and Subsidiary Borrowers
with calculations on the last day of each calendar month in which such
Revolving Credit Loans in Optional Currencies are outstanding as to the
amount in Dollar Equivalents of such Revolving Credit Loans.
2.9.5. Funding. The Fronting Bank (or, after a Bank has
purchased its interest in any Fronted Loan, such Bank) may make any
Revolving Credit Loan denominated in an Optional Currency by causing
its Eurocurrency Lending Office or any of its foreign branches or
foreign affiliate to make such Revolving Credit Loan (whether or not
such lending office, branch or affiliate is named as a lending office
on the signature pages hereof); provided that in such event the
obligation of the applicable Subsidiary Borrower to repay such
Revolving Credit Loan shall nevertheless be to such Bank and
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shall, for all purposes of this Credit Agreement (including without
limitation for purposes of the definition of the term "Majority Banks")
be deemed made by such Bank to the extent of such Revolving Credit
Loan, for the account of such applicable lending office, branch or
affiliate.
2.10. Fronting Provisions.
2.10.1. Application of Interest Payments for Multicurrency
Loans.(a) As promptly as is practicable following each date upon which
the Agent receives a payment of interest under this Credit Agreement on
account of any Revolving Credit Loans denominated in Dollars made to
any Subsidiary Borrower, the Agent shall distribute such amount to the
Banks in accordance with their respective Commitment Percentages.
(b) As promptly as is practicable following each date upon
which the Agent receives a payment of interest under this Credit
Agreement on account of any Multicurrency Loans denominated in an
Optional Currency, the Agent shall distribute to the Fronting Bank such
amount. Promptly upon receipt of such amount, the Fronting Bank shall
convert into Dollars (based upon the actual exchange rate then
applicable to the Fronting Bank) the amount equal to the portion of
such interest payment which constitutes the Applicable Margin thereof
(or, with respect to each Bank which funded the purchase of a
participating interest in such Multicurrency Loan pursuant to
ss.2.11.3, such Bank's Commitment Percentage of the full amount of such
interest payment applicable to the period commencing upon such
funding). In consideration of the agreement of the Banks to purchase
participating interests in the Revolving Credit Loans denominated in an
Optional Currency, the Fronting Bank hereby agrees to pay to the Agent,
for the ratable accounts of each Bank, a risk participation fee in an
amount equal to the proceeds received by the Fronting Bank from such
conversion to Dollars (other than any such proceeds payable for the
account of any Delinquent Bank, which proceeds shall be retained by the
Fronting Bank for its own account); provided, however, that with
respect to each Bank which has funded the purchase of participating
interests in the extensions of credit on account of which such interest
was paid pursuant to ss.2.11.3, the Fronting Bank shall instead pay to
the Agent, for the account of such Bank which has so funded such
purchase, the amount equal to such Bank's Commitment Percentage of the
proceeds received by the Fronting Bank from such conversion. Such
amount shall be payable to the Agent in Dollars on the date upon which
the Fronting Bank receives the proceeds of such conversion.
2.10.2. Currency Conversions and Contingent Funding Agreement.
(a) Each of the Banks hereby unconditionally and irrevocably agrees to
purchase (in Dollars) an undivided participating interest in its
ratable share, determined by reference to its Commitment Percentage, of
all Revolving Credit Loans denominated in an Optional Currency made by
the Fronting Bank as the Agent may at any time request, provided that:
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(i) the Agent and the Fronting Bank hereby agree
that, unless an Event of Default has occurred and is continuing or a
Fronting Loan Event has occurred, such Persons will not request any
such purchase of participating interests; and
(ii) in the event that any Event of Default specified
in ss.ss.13.1(g) or (h) shall have occurred with respect to Borrowers,
each Bank shall be deemed to have purchased, automatically and without
request, such participating interest in the Revolving Credit Loans
denominated in an Optional Currency made by the Fronting Bank to the
applicable Subsidiary Borrower.
Any such request shall be made in writing to each Bank and
shall specify the amount of Dollars (based upon the actual exchange
rate at which the Agent anticipates being able to obtain the relevant
Optional Currency on the relevant date, with any excess payment being
refunded to the Banks and any deficiency remaining payable by the
Banks) required from such Bank in order to effect the purchase by such
Bank of a participating interest in the amount equal to its Commitment
Percentage times the aggregate then outstanding principal amount (in
the applicable Optional Currency) of the Revolving Credit Loans
denominated in an Optional Currency which have been fronted by the
Fronting Bank. Promptly upon receipt of such request, each Bank shall
deliver to the Agent (in immediately available funds) the amount so
specified by the Agent. The Agent shall convert such amounts into the
relevant Optional Currency and shall promptly deliver the proceeds of
such conversion to the Fronting Bank in immediately available funds.
Promptly following receipt thereof, the Fronting Bank will deliver to
each Bank (through the Agent) a certificate setting forth the amount of
the Revolving Credit Loans purchased by such Bank, dated the date of
receipt of such funds and in such amount. From and after such purchase,
(i) all outstanding Revolving Credit Loans (whether denominated in
Dollars or the relevant Optional Currency and including those Revolving
Credit Loans advanced by the Fronting Bank) shall be deemed to have
been converted into Base Rate Loans denominated in Dollars (with such
conversion constituting, for purposes of ss.5.10, a conversion of a
Revolving Credit Loan of one Type into a Revolving Credit Loan of
another Type prior to the expiration of the relevant Interest Period),
(ii) any further Revolving Credit Loans to be made to the Subsidiary
Borrowers shall be made in Dollars by each Bank in accordance with each
such Bank's Commitment Percentage, (iii) all amounts from time to time
accruing, and all amounts from time to time payable, on account of such
Revolving Credit Loans (including any interest and other amounts which
were accrued but unpaid on the date of such purchase) shall be payable
in Dollars as if such Revolving Credit Loans had originally been made
in Dollars and shall be distributed by the Agent to the Banks, on
account of such participating interests. Notwithstanding anything to
the contrary contained in this ss.2.11, the failure of any Bank to
purchase its participating interest in any Revolving Credit Loans shall
not relieve any
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other Bank of its obligations hereunder to purchase its participating
interest in a timely manner, but no Bank shall be responsible for the
failure of any other Bank to purchase the participating interest to be
purchased by such other Banks on any date.
(b) If any amount required to be paid by any Bank pursuant to
ss.2.11.3(a) is not paid to the Agent within one (1) Business Day
following the date upon which such Bank receives a request from the
Agent that such Bank fund its participating interest relating to such
Revolving Credit Loan, such Bank shall pay to the Agent on demand an
amount equal to the product of (i) such amount, times (ii) the daily
average federal funds rate, as quoted by the Agent, during the period
from and including the date such payment is required to be made to the
date on which such payment is immediately available to the Agent, times
(iii) a fraction the numerator of which is the number of days that
elapse during such period and the denominator of which is 360. If any
such amount required to be paid by any Bank pursuant to ss.2.11.3(a) is
not in fact made available to the Agent within three (3) Business Days
following the date upon which such Bank receives a request from the
Agent that such Bank fund its participating interest relating to such
Revolving Credit Loan, the Agent shall be entitled to recover from the
applicable Subsidiary Borrower, on demand, such amount with interest
thereon calculated from such due date at the rate per annum applicable
to Revolving Credit Loans which are Base Rate Loans. A certificate from
the Agent submitted to any Bank with respect to any amounts owing under
this ss.2.11.3(b) shall be conclusive in the absence of manifest error.
Amounts payable by any Bank pursuant to this ss.2.11.3(b) shall be paid
to the Agent, for the account of the Fronting Bank; provided that, if
the Agent (in its sole discretion) has elected to fund on behalf of
such Bank the amounts owing to the Fronting Bank, then the amounts
shall be paid to the Agent, for its own account.
(c) Whenever, at any time after the Fronting Bank has received
from any Bank such Bank's participating interest in a Revolving Credit
Loan pursuant to ss.2.11.3(b) above, the Fronting Bank receives any
payment on account thereof, such Fronting Bank will distribute to the
Agent, for the account of such Bank, such Bank's participating interest
in such amount (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Bank's
participating interest was outstanding and funded) in like funds
received; provided, however, that in the event that any such payment
received by the Fronting Bank is required to be returned, such Bank
will return to the Fronting Bank any portion thereof previously
distributed by the Fronting Bank to the Bank in like funds as such
payment is required to be returned by the Fronting Bank.
(d) Each Bank's obligation to purchase participating interests
pursuant to this ss.2.11 shall be absolute and unconditional and shall
not be affected by any circumstance, including (i) any set-off,
counterclaim,
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recoupment, defense or other right which such Bank may have against the
Fronting Bank, any Borrower or any other Person for any reason
whatsoever; (ii) the occurrence and continuation of any Default or
Event of Default; (iii) any adverse change in the condition (financial
or otherwise) of any Person party hereto; (iv) any breach of any of the
Loan Documents by any Person; or (v) any other circumstance, happening
or event whatsoever, whether or not similar to any of the foregoing.
2.10.3. Resignation of Fronting Bank.The Fronting Bank may
resign at any time by giving sixty (60) days prior written notice
thereof to the Banks and the Company. Upon any such resignation, the
Majority Banks shall have the right to appoint a successor Fronting
Bank. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Fronting Bank shall be reasonably acceptable
to the Borrowers. If no successor Fronting Bank shall have been so
appointed by the Majority Banks and shall have accepted such
appointment within thirty (30) days after the retiring Fronting Bank's
giving of notice of resignation, then the retiring Fronting Bank may,
on behalf of the Banks, appoint a successor Fronting Bank, which shall
be a financial institution having a rating of not less than A or its
equivalent by Standard & Poor's Ratings Group. Upon the acceptance of
any appointment as Fronting Bank hereunder by a successor Fronting
Bank, such successor Fronting Bank shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring Fronting Bank, and the retiring Fronting Bank shall be
discharged from its duties and obligations hereunder. After any
retiring Fronting Bank's resignation, the provisions of this Credit
Agreement and the other Loan Documents shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it
while it was acting as Fronting Bank.
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
3.1. Maturity. Each Borrower promises to pay on the Revolving Credit
Loan Maturity Date, and there shall become absolutely due and payable on the
Revolving Credit Loan Maturity Date, all of the Revolving Credit Loans
outstanding on such date to such Borrower, together with any and all accrued and
unpaid interest thereon.
3.2. Mandatory Repayments of Revolving Credit Loans. If at any time the
sum of the outstanding amount of the Revolving Credit Loans, the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations exceeds the Total Commitment,
then each of the Borrowers shall immediately pay its pro rata share (based upon
the outstanding principal amount of the Revolving Credit Loans made to each such
Borrower) of the amount of such excess to the Agent for the respective accounts
of the Banks and the Fronting Bank for application: first, to any Unpaid
Reimbursement Obligations; second, to the Revolving Credit Loans; and third, to
provide to the Agent cash collateral for Reimbursement Obligations as
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contemplated by ss.4.2(b) and (c). Each payment of any Unpaid Reimbursement
Obligations or prepayment of Revolving Credit Loans shall be allocated among the
Banks, in proportion, as nearly as practicable, to each Reimbursement Obligation
or (as the case may be) the respective unpaid principal amount of each Bank's
Revolving Credit Note or loan account, as the case may be, with adjustments to
the extent practicable to equalize any prior payments or repayments not exactly
in proportion. In addition, in the event the Company or any of its Subsidiaries
receives any (a) Net Cash Sale Proceeds from the sale or other disposition of
assets permitted by ss.9.5, which Net Cash Sale Proceeds are required by ss.9.5
to be repaid to the Agent hereunder; (b) proceeds of insurance claims which have
not been either (i) reinvested by the Company or such Subsidiary in replacement
assets or to repair the asset so damaged, as the case may be, within 360 days of
receipt by such Person of such proceeds or (ii) subject to a commitment by the
Company or such Subsidiary pursuant to any contract to be used to make such a
reinvestment, subject only to customary conditions (other than obtaining
financing), on or prior to the 270th day following the Company's or such
Subsidiary's receipt of the claimed amount and the claimed amounts contractually
committed are so applied within 360 days following receipt of such amounts or
(c) Net Cash Proceeds from any Equity Issuances by the Company or its
Subsidiaries after the Closing Date (except for Net Cash Proceeds received by
the Company from Equity Issuances by the Company (i) made in connection with its
Stock Option Plan or to members of the Company's management (other than in
connection with the sale of Equity Issuances to such members of management in
the Initial Public Offering), (ii) received from any Principal of the Company or
other shareholders of the Company existing on the Closing Date (the "Additional
Investors") so long as no Event of Default has occurred and is continuing and
provided such Net Cash Proceeds are not received in connection with the sale of
Equity Issuances to the Principals or such Additional Investors in the Initial
Public Offering, or (iii) received from any other Person so long as no Event of
Default has occurred and is continuing, such Net Cash Proceeds are not received
in connection with the sale of Equity Issuances to such Persons in the Initial
Public Offering and provided the aggregate amount of such Net Cash Proceeds are
used to finance all or any portion of a Permitted Acquisition), the Company
shall, within thirty (30) days of receipt thereof, repay the outstanding
Revolving Credit Loans in an amount equal to 100% of such Net Cash Sale Proceeds
or Net Cash Proceeds, as the case may be, provided, however, that
notwithstanding the foregoing, in the event the Company receives any Net Cash
Proceeds from its Initial Public Offering or any subsequent public offering of
its capital stock, the Company shall only be required to pay 50% of the Net Cash
Proceeds of such Equity Issuance, and the Total Commitment shall be
automatically reduced by the amount of such Net Cash Proceeds or Net Cash Sale
Proceeds, as the case may be.
3.3. Optional Repayments of Revolving Credit Loans. Each Borrower shall
have the right, at its election, to repay the outstanding amount of its
Revolving Credit Loans, as a whole or in part, at any time without penalty or
premium (but subject to ss.5.10). The applicable Borrower shall give the Agent,
no later than 10:00 a.m., Boston time, at least one (1) Business Days prior
written notice of any proposed prepayment pursuant to this ss.3.3 of Base Rate
Loans, and three (3)
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Business Days notice of any proposed prepayment pursuant to this ss.3.3 of
Eurocurrency Rate Loans, in each case specifying the proposed date of prepayment
of Revolving Credit Loans and the principal amount to be prepaid. Each such
partial prepayment of the Revolving Credit Loans shall be in an integral
multiple of $500,000 (or the Dollar Equivalent), shall be accompanied by the
payment of accrued interest on the principal prepaid to the date of prepayment
and shall be applied, in the absence of instruction by the applicable Borrower,
first to the principal of Base Rate Loans and then to the principal of
Eurocurrency Rate Loans. Each partial prepayment shall be allocated among the
Banks and the Fronting Bank, in proportion, as nearly as practicable, to the
respective unpaid principal amount of each Bank's Revolving Credit Note or loan
account, as the case may be, with adjustments to the extent practicable to
equalize any prior repayments not exactly in proportion.
4. LETTERS OF CREDIT.
4.1. Letter of Credit Commitments.
4.1.1. Commitment to Issue Letters of Credit. Subject to the
terms and conditions hereof and the execution and delivery by any
Borrower of a letter of credit application on the Agent's customary
form (a "Letter of Credit Application"), the Agent on behalf of the
Banks and in reliance upon the agreement of the Banks set forth in
ss.4.1.4 and upon the representations and warranties of such Borrower
contained herein, agrees, in its individual capacity, to issue, extend
and renew for the account of such Borrower one or more standby or
documentary letters of credit (individually, a "Letter of Credit"),
denominated in Dollars or any Optional Currency in such form as may be
requested from time to time by such Borrower and agreed to by the
Agent; provided, however, that, after giving effect to such request,
(a) the sum of the aggregate Maximum Drawing Amount and all Unpaid
Reimbursement Obligations shall not exceed $20,000,000 (or the Dollar
Equivalent) at any one time and (b) the sum of (i) the Dollar
Equivalent of the Maximum Drawing Amount on all Letters of Credit, (ii)
the Dollar Equivalent of all Unpaid Reimbursement Obligations, and
(iii) the Dollar Equivalent of the amount of all Revolving Credit Loans
outstanding shall not exceed the Total Commitment. Notwithstanding the
foregoing, the Agent shall have no obligation to issue any Letter of
Credit to support or secure any Indebtedness of the Company or any of
its Subsidiaries to the extent that such Indebtedness was incurred
prior to the proposed issuance date of such Letter of Credit, unless in
any such case the Company demonstrates to the satisfaction of the Agent
that (x) such prior incurred Indebtedness were then fully secured by a
prior perfected and unavoidable security interest in collateral
provided by the Company or such Subsidiary to the proposed beneficiary
of such Letter of Credit or (y) such prior incurred Indebtedness were
then secured or supported by a letter of credit issued for the account
of the Company or such Subsidiary and the reimbursement obligation with
respect to such letter of credit was fully secured by a prior perfected
and
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unavoidable security interest in collateral provided to the issuer of
such letter of credit by the Company or such Subsidiary.
4.1.2. Letter of Credit Applications. Each Letter of Credit
Application shall be completed to the satisfaction of the Agent. In the
event that any provision of any Letter of Credit Application shall be
inconsistent with any provision of this Credit Agreement, then the
provisions of this Credit Agreement shall, to the extent of any such
inconsistency, govern.
4.1.3. Terms of Letters of Credit. Each Letter of Credit
issued, extended or renewed hereunder shall, among other things, (a)
provide for the payment of sight drafts for honor thereunder when
presented in accordance with the terms thereof and when accompanied by
the documents described therein, and (b) have an expiry date no later
than the date which is fourteen (14) days (or, if the Letter of Credit
is confirmed by a confirmer or otherwise provides for one or more
nominated persons, forty-five (45) days) prior to the Revolving Credit
Loan Maturity Date. Each Letter of Credit so issued, extended or
renewed shall be subject to the Uniform Customs.
4.1.4. Reimbursement Obligations of Banks. Each Bank severally
agrees that it shall be absolutely liable, without regard to the
occurrence of any Default or Event of Default or any other condition
precedent whatsoever, to the extent of such Bank's Commitment
Percentage, to reimburse the Agent on demand for the amount of each
draft paid by the Agent (as calculated pursuant to ss.4.2) under each
Letter of Credit to the extent that such amount is not reimbursed by
the applicable Borrower pursuant to ss.4.2 (such agreement for a Bank
being called herein the "Letter of Credit Participation" of such Bank).
4.1.5. Participations of Banks. Each such payment made by a
Bank shall be treated as the purchase by such Bank of a participating
interest in the applicable Borrower's Reimbursement Obligation under
ss.4.2 in an amount equal to such payment. Each Bank shall share in
accordance with its participating interest in any interest which
accrues pursuant to ss.4.2.
4.2. Reimbursement Obligation of the Borrowers. In order to induce the
Agent to issue, extend and renew each Letter of Credit and the Banks to
participate therein, each Borrower hereby agrees to reimburse or pay to the
Agent, for the account of the Agent or (as the case may be) the Banks, with
respect to each Letter of Credit issued, extended or renewed by the Agent
hereunder for the account of such Borrower,
(a) except as otherwise expressly provided in ss.4.2(b) and
(c), on each date that any draft presented under such Letter of Credit
is honored by the Agent, or the Agent otherwise makes a payment with
respect thereto (in the same currency in which such Letter of Credit
was issued or the Dollar Equivalent thereof), (i) the amount paid by
the Agent under or with respect
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to such Letter of Credit, and (ii) the amount of any taxes (other than
taxes based upon or measured by the income or profits of a Bank or the
Agent), fees, charges or other costs and expenses whatsoever incurred
by the Agent or any Bank in connection with any payment made by the
Agent or any Bank under, or with respect to, such Letter of Credit,
(b) upon the reduction (but not termination) of the Total
Commitment to an amount less than the Maximum Drawing Amount, an amount
equal to such difference, which amount shall be held by the Agent for
the benefit of the Banks and the Agent as cash collateral for all
Reimbursement Obligations, and
(c) upon the termination of the Total Commitment, or the
acceleration of the Reimbursement Obligations with respect to all
Letters of Credit in accordance with ss.13, an amount equal to the then
Maximum Drawing Amount on all Letters of Credit, which amount shall be
held by the Agent for the benefit of the Banks and the Agent as cash
collateral for all Reimbursement Obligations.
Each such payment shall be made to the Agent at the Agent's Head Office in Same
Day Funds. Interest on any and all amounts remaining unpaid by the applicable
Borrower under this ss.4.2 at any time from the date such amounts become due and
payable (whether as stated in this ss.4.2, by acceleration or otherwise) until
payment in full (whether before or after judgment) shall be payable to the Agent
on demand at the rate specified in ss.5.11 for overdue principal on the
Revolving Credit Loans.
4.3. Letter of Credit Payments. If any draft shall be presented or
other demand for payment shall be made under any Letter of Credit, the Agent
shall notify the applicable Borrower of the date and amount of the draft
presented or demand for payment and of the date and time when it expects to pay
such draft or honor such demand for payment. If the applicable Borrower fails to
reimburse the Agent as provided in ss.4.2 on or before the date that such draft
is paid or other payment is made by the Agent, the Agent may at any time
thereafter notify the Banks of the amount of any such Unpaid Reimbursement
Obligation and shall specify such amount in Dollars (based upon the actual
exchange rate at which the Agent anticipates being able to obtain the applicable
Optional Currency on the date payment is to be made by the Banks, with any
excess payment being refunded to the Banks and any deficiency being payable by
the Banks) required from each of the Banks. No later than 3:00 p.m. (Boston
time) on the Business Day next following the receipt of such notice, each Bank
shall make available to the Agent, at the Agent's Head Office, in Same Day
Funds, such Bank's Commitment Percentage of such Unpaid Reimbursement
Obligation, together with an amount equal to the product of (a) the average,
computed for the period referred to in clause (c) below, of the Overnight Rate
for each day included in such period, times (b) the amount equal to such Bank's
Commitment Percentage of such Unpaid Reimbursement Obligation, times (c) a
fraction, the numerator of which is the number of days that elapse from and
including the date the Agent paid the draft presented for honor or otherwise
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made payment to the date on which such Bank's Commitment Percentage of such
Unpaid Reimbursement obligation shall become immediately available to the Agent,
and the denominator of which is 365. The responsibility of the Agent to the
Borrowers and the Banks shall be only to determine that the documents (including
each draft) delivered under each Letter of Credit in connection with such
presentment shall be in conformity in all material respects with such Letter of
Credit. From and after such purchase of the applicable Letter of Credit
Participations, such Unpaid Reimbursement Obligations shall be deemed to have
been converted into Base Rate Loans made by the Banks, and all amounts from time
to time accruing, and all amounts from time to time payable, on account of such
Unpaid Reimbursement Obligations shall be payable in Dollars as if such Letter
of Credit had originally been issued in Dollars.
4.4. Obligations Absolute. The Borrowers' obligations under this ss.4
shall be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which any Borrower may have or have had against the Agent, any Bank or any
beneficiary of a Letter of Credit. Each Borrower further agrees with the Agent
and the Banks that the Agent and the Banks shall not be responsible for, and
each Borrower's Reimbursement Obligations under ss.4.2 shall not be affected by,
among other things, the validity or genuineness of documents or of any
endorsements thereon, even if such documents should in fact prove to be in any
or all respects invalid, fraudulent or forged, or any dispute between or among
any Borrower, the beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may be transferred or
any claims or defenses whatsoever of any Borrower against the beneficiary of any
Letter of Credit or any such transferee. The Agent and the Banks shall not be
liable for any error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in connection with
any Letter of Credit. Each Borrower agrees that any action taken or omitted by
the Agent or any Bank under or in connection with each Letter of Credit and the
related drafts and documents, if done in good faith, shall be binding upon such
Borrower and shall not result in any liability on the part of the Agent or any
Bank to any Borrower.
4.5. Reliance by Issuer. To the extent not inconsistent with ss.4.4,
the Agent shall be entitled to rely, and shall be fully protected in relying
upon, any Letter of Credit, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Credit Agreement unless it
shall first have received such advice or concurrence of the Majority Banks as it
reasonably deems appropriate or it shall first be indemnified to its reasonable
satisfaction by the Banks against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take
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any such action. The Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Credit Agreement in accordance with a
request of the Majority Banks, and such request and any action taken or failure
to act pursuant thereto shall be binding upon the Banks and all future holders
of the Revolving Credit Notes, loan accounts or of a Letter of Credit
Participation.
4.6. Letter of Credit Fee. Each Borrower requesting a Letter of Credit
shall pay a fee (in each case, a "Letter of Credit Fee") to the Agent (a) in
respect of each standby Letter of Credit issued pursuant to this Credit
Agreement, calculated at the rate of the Applicable Margin for letter of credit
fees per annum on the face amount of each such Letter of Credit, which shall be
for the accounts of the Banks in accordance with their respective Commitment
Percentages, plus an amount equal to one quarter of one percent (1/4%) per annum
of the face amount of such standby Letter of Credit shall be for the account of
the Agent, as a fronting fee and (b) in respect of each documentary Letter of
Credit issued pursuant to this Credit Agreement, calculated at the rate of the
Applicable Margin for letter of credit fees minus one half of one percent (1/2%)
per annum on the face amount of each such Letter of Credit, which shall be for
the accounts of the Banks in accordance with their respective Commitment
Percentages, plus an amount equal to one quarter of one percent (1/4%) per annum
of the face amount of such documentary Letter of Credit shall be for the account
of the Agent, as a fronting fee. The Letter of Credit Fees for each Letter of
Credit shall be payable quarterly in arrears on the last day of each calendar
quarter. In respect of each Letter of Credit, the applicable Borrower shall also
pay to the Agent for the Agent's own account, on the date of any issuance,
extension, renewal or amendment of any Letter of Credit, or at such other time
or times as such charges are customarily made by the Agent, for the Agent's own
account, the Agent's customary issuance, amendment, negotiation or document
examination and other administrative fees as in effect from time to time.
5. CERTAIN GENERAL PROVISIONS.
5.1. Closing Fees. The Company agrees to pay to the Agent on the
Closing Date the closing fees as set forth in the Fee Letter.
5.2. Agent's Fee. The Borrower shall pay to the Agent an Agent's fee
(the "Agent's Fee") at the times and in the amounts as provided in the Fee
Letter.
5.3. Funds for Payments.
5.3.1. Payments to Agent. All payments of principal, interest,
Reimbursement Obligations, commitment fees, Letter of Credit Fees, the
closing fee and the Agent's Fee and any other amounts due hereunder or
under any of the other Loan Documents shall be made to the Agent, for
the respective accounts of the Banks and the Agent, at the Agent's Head
Office or at such other location in the Boston, Massachusetts area that
the Agent may from time to time designate, in each case in Same Day
Funds. All payments of principal of and interest on Revolving Credit
Loans made to any
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Subsidiary Borrower which are denominated in an Optional Currency or
Currencies and all other fees due hereunder by any local branch or
affiliate of the Agent or any Bank located outside of the United States
shall be made in immediately available funds, for the account of each
such Bank or the Agent, as the case may be, at a depository designated
by such Bank in the country in which such Optional Currency is legal
tender. Each payment in respect of any Revolving Credit Loan made by a
Borrower shall be made in the same currency in which such Revolving
Credit Loan was made unless otherwise agreed to by such Bank.
5.3.2. No Offset, etc. All payments by the Borrowers hereunder
and under any of the other Loan Documents shall be made without setoff
or counterclaim and free and clear of and without deduction for any
taxes, levies, imposts, duties, charges, fees, deductions,
withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any
political subdivision thereof or taxing or other authority therein
unless such Borrower is compelled by law to make such deduction or
withholding. If any such obligation is imposed upon any such Borrower
with respect to any amount payable by it hereunder or under any of the
other Loan Documents, such Borrower will pay to the Agent, for the
account of the Banks or (as the case may be) the Agent, on the date on
which such amount is due and payable hereunder or under such other Loan
Document, such additional amount in Dollars as shall be necessary to
enable the Banks or the Agent to receive the same net amount which the
Banks or the Agent would have received on such due date had no such
obligation been imposed upon such Borrower. Each such Borrower will
deliver promptly to the Agent certificates or other valid vouchers for
all taxes or other charges deducted from or paid with respect to
payments made by the Borrower hereunder or under such other Loan
Document.
5.3.3. Currency Matters.
5.3.3.1. Currency of Account.
Dollars are the currency of account and payment for
each and every sum at any time due from the Borrowers
hereunder; provided that:(a) except as expressly provided in
this Credit Agreement, each repayment of a Revolving Credit
Loan or a part thereof shall be made in the currency in which
such Revolving Credit Loan is denominated at the time of that
repayment;
(b) each payment of interest shall be made in the
currency in which such principal or other sum in respect of
which such interest is payable, is denominated;
(c) each payment of Letter of Credit Fees and the
commitment fees shall be in Dollars;
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(d) each payment in respect of costs, expenses and
indemnities shall be made in the currency in which the same
were incurred; and
(e) any amount expressed to be payable in a currency
other than Dollars shall be paid in that other currency.
No payment to the Agent or any Bank (whether under
any judgment or court order or otherwise) shall discharge the
obligation or liability in respect of which it was made unless
and until the Agent or such Bank shall have received payment
in full in the currency in which such obligation or liability
was incurred, and to the extent that the amount of any such
payment shall, on actual conversion into such currency, fall
short of such obligation or liability actual or contingent
expressed in that currency, the Borrower shall indemnify and
hold harmless the Agent, the Issuing Bank or such Bank, as the
case may be, with respect to the amount of the shortfall.
5.3.3.2. Currency Fluctuations.
(a) Not later than 1:00 p.m. (Boston time) on the
last Business Day of each calendar month (the "Calculation
Date"), the Agent shall determine the Dollar Equivalent as of
such date. The Dollar Equivalent so determined shall become
effective on the first Business Day immediately following such
determination (a "Reset Date") and shall remain effective
until the next succeeding Reset Date.
(b) If, on any Reset Date and on the Revolving Credit
Loan Maturity Date, the Dollar Equivalent of the aggregate
outstanding amount of all Revolving Credit Loans, the Maximum
Drawing Amount and all Unpaid Reimbursement Obligations
exceeds the Total Commitment for three (3) or more consecutive
Business Days (but only as to the Reset Date), then the
Borrowers shall repay or prepay the Revolving Credit Loans in
accordance with this Credit Agreement in an aggregate
principal amount such that, after giving effect thereto, the
aggregate outstanding amount (expressed in Dollars) of all
Revolving Credit Loans plus the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations no longer exceeds the Total
Commitment (expressed in Dollars).
(c) Without limiting subsection ss.5.3.3.2(b), if, on
any day prior to the Revolving Credit Loan Maturity Date, the
aggregate outstanding amount (expressed in Dollars) of all
Revolving Credit Loans plus the Maximum Drawing Amount plus
the Unpaid Reimbursement Obligations exceeds the Total
Commitment by five percent (5%) or more, then (i) the Agent
shall give notice thereof to the Borrower and the Banks and
(ii) within two (2) Business Days thereafter, the Borrowers
shall repay or prepay the Revolving Credit Loans in accordance
with this Credit Agreement in an aggregate
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principal amount such that, after giving effect thereto, the
aggregate outstanding amount (expressed in Dollars) of all
Revolving Credit Loans plus the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations no longer exceeds the Total
Commitment (expressed in Dollars). Nothing set forth in this
ss.5.3.3.2 shall be construed to require the Agent to
calculate daily compliance under this ss.5.3.3.2 unless
expressly requested to do so by a Bank.
(d) If on any Reset Date, the aggregate outstanding
sum of the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations (expressed in Dollars) exceeds the Letter of
Credit sublimit set forth in ss.4.1 (expressed in Dollars) by
more than five percent (5%), then the Company shall
immediately upon demand provide cash collateral to the Agent
such that, after giving effect thereto, the aggregate
outstanding sum of the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations (expressed in Dollars) no longer
exceed the Letter of Credit sublimit set forth in ss.4.1.
5.4. Computations. All computations of interest on Base Rate Loans and
of commitment fees, Letter of Credit Fees or other fees shall, unless otherwise
expressly provided herein, be based on a 365-day year and paid for the actual
number of days elapsed. All computations of interest on the Eurocurrency Rate
Loans shall be based on a 360-day year and paid for the actual number of days
elapsed. Except as otherwise provided in the definition of the term "Interest
Period" with respect to Eurocurrency Rate Loans, whenever a payment hereunder or
under any of the other Loan Documents becomes due on a day that is not a
Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension. The
outstanding amount of the Revolving Credit Loans as reflected on the Records and
the Loan Account Records from time to time shall, absent manifest error, be
considered correct and binding on the applicable Borrower unless within five (5)
Business Days after receipt by the applicable Borrower of any notice from the
Agent or any of the Banks of such outstanding amount, the applicable Borrower
shall notify the Agent or such Bank to the contrary.
5.5. Inability to Determine Eurocurrency Rate. In the event, prior to
the commencement of any Interest Period relating to any Eurocurrency Rate Loan,
the Agent shall determine or be notified by the Majority Banks that adequate and
reasonable methods do not exist for ascertaining the Eurodollar Rate or the
International Eurocurrency Rate, as the case may be, that would otherwise
determine the rate of interest to be applicable to any Eurocurrency Rate Loan
during any Interest Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the applicable Borrower
and the Banks) to the Borrowers and the Banks. In such event (a) any Loan
Request or Conversion Request with respect to Eurocurrency Rate Loans shall be
automatically withdrawn and, in the case of Revolving Credit Loans denominated
in Dollars, shall be deemed
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a request for Base Rate Loans to be denominated in Dollars and in the case of
any Eurocurrency Rate Loan denominated in an Optional Currency, shall be
withdrawn, (b) each Eurocurrency Rate Loan denominated in Dollars will
automatically, on the last day of the then current Interest Period relating
thereto, become a Base Rate Loan and each Eurocurrency Rate Loan denominated in
any Optional Currency will be required to repaid on the last day of the then
current Interest Period relating thereto, and (c) the obligations of the Banks
to make Eurocurrency Rate Loans shall be suspended until the Agent or the
Majority Banks determine that the circumstances giving rise to such suspension
no longer exist, whereupon the Agent or, as the case may be, the Agent upon the
instruction of the Majority Banks, shall so notify the Borrower and the Banks.
5.6. Illegality. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Bank to make or maintain
Eurocurrency Rate Loans, such Bank shall forthwith give notice of such
circumstances to the Borrowers and the other Banks and thereupon (a) the
commitment of such Bank to make Eurocurrency Rate Loans or convert Revolving
Credit Loans of another Type to Eurocurrency Rate Loans or to make Revolving
Credit Loans in any Optional Currency shall forthwith be suspended and (b) such
Bank's Revolving Credit Loans then outstanding as Eurocurrency Rate Loans, if
any, shall (i) if comprising a Revolving Credit Loan denominated in Dollars, be
converted automatically to Base Rate Loans on the last day of each Interest
Period applicable to such Eurocurrency Rate Loans or within such earlier period
as may be required by law and (ii) if comprising a Revolving Credit Loan
denominated in an Optional Currency, be immediately repaid. Each Borrower hereby
severally and not jointly agrees promptly to pay the Agent for the account of
such Bank, upon demand by such Bank, any additional amounts necessary to
compensate such Bank for any costs incurred by such Bank in making any
conversion in accordance with this ss.5.6, including any interest or fees
payable by such Bank to lenders of funds obtained by it in order to make or
maintain its Eurocurrency Rate Loans hereunder.
5.7. Additional Costs, etc. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Bank or the Agent by any central bank or other fiscal,
monetary or other authority (whether or not having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature with respect
to this Credit Agreement, the other Loan Documents, any Letters of
Credit, such Bank's Commitment or the Revolving Credit Loans (other
than taxes based upon or measured by the income or profits of such Bank
or the Agent), or
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(b) materially change the basis of taxation (except for
changes in taxes on income or profits) of payments to any Bank of the
principal of or the interest on any Revolving Credit Loans or any other
amounts payable to any Bank or the Agent under this Credit Agreement or
any of the other Loan Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit Agreement)
any special deposit, reserve, assessment, liquidity, capital adequacy
or other similar requirements (whether or not having the force of law)
against assets held by, or deposits in or for the account of, or loans
by, or letters of credit issued by, or commitments of an office of any
Bank, or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, any Letters of Credit, the Revolving Credit Loans, such
Bank's Commitment, or any class of loans, letters of credit or
commitments of which any of the Revolving Credit Loans or such Bank's
Commitment forms a part, and the result of any of the foregoing is
(i) to increase the cost to any Bank of making,
funding, issuing, renewing, extending or maintaining any of
the Revolving Credit Loans or such Bank's Commitment or any
Letter of Credit, or
(ii) to reduce the amount of principal, interest,
Reimbursement Obligation or other amount payable to such Bank
or the Agent hereunder on account of such Bank's Commitment,
any Letter of Credit or any of the Revolving Credit Loans, or
(iii) to require such Bank or the Agent to make any
payment or to forego any interest or Reimbursement Obligation
or other sum payable hereunder, the amount of which payment or
foregone interest or Reimbursement Obligation or other sum is
calculated by reference to the gross amount of any sum
receivable or deemed received by such Bank or the Agent from
the Borrowers hereunder,
then, and in each such case, each Borrower will, upon demand made by such Bank
or (as the case may be) the Agent at any time and from time to time and as often
as the occasion therefor may arise, pay to such Bank or the Agent such
additional amounts as will be sufficient to compensate such Bank or the Agent
for such additional cost, reduction, payment or foregone interest or
Reimbursement Obligation or other sum applicable to such Borrower's Revolving
Credit Loans, Reimbursement Obligations and Unpaid Reimbursement Obligations
hereunder.
5.8. Capital Adequacy. If after the date hereof any Bank or the Agent
determines that (a) the adoption of or change in any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) regarding capital requirements for banks or bank holding companies or any
change
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in the interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (b) compliance by such Bank or the
Agent or any corporation controlling such Bank or the Agent with any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) of any such entity regarding capital adequacy, has the
effect of reducing the return on such Bank's or the Agent's commitment with
respect to any Revolving Credit Loans to a level below that which such Bank or
the Agent could have achieved but for such adoption, change or compliance
(taking into consideration such Bank's or the Agent's then existing policies
with respect to capital adequacy and assuming full utilization of such entity's
capital) by any amount deemed by such Bank or (as the case may be) the Agent to
be material, then such Bank or the Agent may notify the Company of such fact. To
the extent that the amount of such reduction in the return on capital is not
reflected in the Base Rate, the Company and such Bank shall thereafter attempt
to negotiate in good faith, within thirty (30) days of the day on which the
Company receives such notice, an adjustment payable hereunder that will
adequately compensate such Bank in light of these circumstances. If the Company
and such Bank are unable to agree to such adjustment within thirty (30) days of
the date on which the Company receives such notice, then commencing on the date
of such notice (but not earlier than the effective date of any such increased
capital requirement), the fees payable hereunder shall increase by an amount
that will, in such Bank's reasonable determination, provide adequate
compensation. Each Bank shall allocate such cost increases among its customers
in good faith and on an equitable basis.
5.9. Certificate. A certificate setting forth any additional amounts
payable pursuant to ss.ss.5.7 or 5.8 and a brief explanation of such amounts
which are due, submitted by any Bank or the Agent to the Borrowers, shall be
conclusive, absent manifest error, that such amounts are due and owing.
5.10. Indemnity. Each Borrower agrees to indemnify each Bank and to
hold each Bank harmless from and against any loss, cost or expense that such
Bank may sustain or incur as a consequence of (a) default by such Borrower in
payment of the principal amount of or any interest on any Eurocurrency Rate
Loans as and when due and payable, including any such loss or expense arising
from interest or fees payable by such Bank to lenders of funds obtained by it in
order to maintain its Eurocurrency Rate Loans, (b) default by such Borrower in
making a borrowing or conversion after such Borrower has given (or is deemed to
have given) a Loan Request or a Conversion Request relating thereto in
accordance with ss.2.6 or ss.2.7 or (c) the making of any payment of a
Eurocurrency Rate Loan or the making of any conversion of any such Revolving
Credit Loan to a Base Rate Loan on a day that is not the last day of the
applicable Interest Period with respect thereto, including interest or fees
payable by such Bank to lenders of funds obtained by it in order to maintain any
such Revolving Credit Loans.
5.11. Interest After Default.
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5.11.1. Overdue Amounts. Overdue principal and (to the extent
permitted by applicable law) interest on the Revolving Credit Loans and
all other overdue amounts payable hereunder or under any of the other
Loan Documents shall bear interest compounded monthly and payable on
demand at a rate per annum equal to two percent (2%) above the highest
rate of interest otherwise applicable to such Revolving Credit Loans
pursuant to ss.2.5 until such amount shall be paid in full (after as
well as before judgment).
5.11.2. Amounts Not Overdue. During the continuance of an
Event of Default under ss.13.1(c) as it relates to ss.10, the principal
of the Revolving Credit Loans not overdue shall, until such Default or
Event of Default has been cured or remedied or such Default or Event of
Default has been waived by the Majority Banks pursuant to ss.26, bear
interest at a rate per annum equal to two percent (2%) above the
highest rate of interest otherwise applicable to such Revolving Credit
Loans pursuant to ss.2.5.
6. COLLATERAL SECURITY AND GUARANTIES.
6.1. Security of Borrowers. The Obligations shall be secured by a
perfected first priority security interest (subject only to Permitted Liens
entitled to priority under applicable law) in (a) all of the assets of the
Company, whether now owned or hereafter acquired, pursuant to the terms of the
Security Documents to which the Company is a party, including, without
limitation, a pledge by the Company of 100% of the capital stock of each
Domestic Subsidiary and 66% of the capital stock of each Foreign Subsidiary
owned by the Company and (b) all of the assets of the Subsidiary Borrowers,
whether now owned or hereafter acquired, pursuant to the terms of the Security
Documents to which each such Subsidiary Borrower is a party.
6.2. Guaranties and Security of Subsidiaries. The Obligations shall
also be guaranteed pursuant to the terms of the Guaranty, and the Obligations of
each Subsidiary Borrower shall also be guaranteed by the Company pursuant to
ss.6.3, and by each other Subsidiary Borrower pursuant to the terms of the
Foreign Guarantees. The obligations of the Guarantors under the Guaranty and of
the Subsidiary Borrowers under the Foreign Guarantees shall be in turn secured
by a perfected first priority security interest (subject only to Permitted Liens
entitled to priority under applicable law) in all of the assets of each such
Guarantor and Subsidiary Borrower, as the case may be, whether now owned or
hereafter acquired, pursuant to the terms of the Security Documents to which
such Guarantor and Subsidiary Borrower, as the case may be, is a party,
including, without limitation, a pledge by such Guarantor of 100% of the capital
stock of each Domestic Subsidiary of such Guarantor and 66% of the capital stock
of each Foreign Subsidiary of such Guarantor.
6.3. Guaranty by the Company of the Obligations.
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6.3.1. Guaranty. For value received and hereby acknowledged
and as an inducement to the Banks and the Agents to make the Revolving
Credit Loans and Letters of Credit available to the Borrowers, the
Company hereby unconditionally and irrevocably guarantees (a) the full
punctual payment when due, whether at stated maturity, by acceleration
or otherwise, of all Obligations of the Subsidiary Borrowers now or
hereafter existing whether for principal, interest, fees, expenses or
otherwise, and (b) the strict performance and observance by the
Subsidiary Borrowers of all agreements, warranties and covenants
applicable to the Subsidiary Borrowers in the Loan Documents and (c)
the obligations of the Subsidiary Borrowers under the Loan Documents
(such Obligations collectively being hereafter referred to as the
"Guaranteed Obligations").
6.3.2. Guaranty Absolute. The Company guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the
terms hereof, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or
the rights of the Banks with respect thereto. The liability of the
Company under this guaranty with regard to the Guaranteed Obligations
of the Subsidiary Borrowers shall be absolute and unconditional
irrespective of:
(a) the Subsidiary Borrowers' lack of authorization,
execution, validity or enforceability of this Credit Agreement and any
amendment hereof (with regard to such Guaranteed Obligations), or any
other obligation, agreement or instrument relating thereto (it being
agreed by the Company that the Guaranteed Obligations shall not be
discharged prior to the final and complete satisfaction of all of the
Obligations of the Subsidiary Borrowers) or any failure to obtain any
necessary governmental consent or approvals or necessary third party
consents or approvals;
(b) the Agent's or any Bank's exercise or enforcement of, or
failure or delay in exercising or enforcing, legal proceedings to
collect the Obligations or the Guaranteed Obligations or any power,
right or remedy with respect to any of the Obligations or the
Guaranteed Obligations, including (i) any suspension of the Agent or
any Bank's right to enforce against the Subsidiary Borrowers of the
Guaranteed Obligations, or (ii) any change in the time, manner or place
of payment of, or in any other term of, all or any of the Guaranteed
Obligations of the Subsidiary Borrowers or any other amendment or
waiver of or any consent to departure from this Credit Agreement or the
other Loan Documents (with regard to such Guaranteed Obligations) or
any other agreement or instrument governing or evidencing any of the
Guaranteed Obligations;
(c) any exchange, release or non-perfection of any collateral,
or any release or amendment or waiver of or consent to departure from
any other guaranty, for all or any of the Guaranteed Obligations of the
Subsidiary Borrowers;
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(d) any change in ownership of the Subsidiary Borrowers;
(e) any acceptance of any partial payment(s) from the
Subsidiary Borrowers;
(f) any insolvency, bankruptcy, reorganization, arrangement,
adjustment, composition, assignment for the benefit of creditors,
appointment of a receiver or trustee for all or any part of the
Subsidiary Borrowers' assets;
(g) any assignment, participation or other transfer or
reallocation, in whole or in part (whether or not subject to a
conversion of a loan of one Type into a loan of another Type or a
conversion from one currency to another), of the Agent's or any Bank's
interest in and rights under this Credit Agreement or any other Loan
Document, or of the Agent or any Bank's interest in the Obligations or
the Guaranteed Obligations;
(h) any cancellation, renunciation or surrender of any pledge,
guaranty or any debt instrument evidencing the Obligations or the
Guaranteed Obligations;
(i) the Agent's or any Bank's vote, claim, distribution,
election, acceptance, action or inaction in any bankruptcy or
reorganization case related to the Obligations or the Guaranteed
Obligations; or
(j) any other action or circumstance, other than payment,
which might otherwise constitute a defense available to, or a discharge
of, the Subsidiary Borrowers or the Company in respect of its
Guaranteed Obligations (other than the defense of payment in full in
cash).
This guaranty shall continue to be effective or be reinstated,
as the case may be, if at any time any payment of any Guaranteed
Obligation is rescinded or must otherwise be returned by the Agent or
any Bank upon the insolvency, bankruptcy or reorganization of the
Subsidiary Borrowers or otherwise, all as though such payment had not
been made.
6.3.3. Effectiveness; Enforcement. The guaranty hereunder
shall be effective and shall be deemed to be made with respect to each
Revolving Credit Loan made as of the time it is made or accepted, as
applicable. No invalidity, irregularity or unenforceability by reason
of any bankruptcy or similar law, or any law or order of any government
or agency thereof purporting to reduce, amend or otherwise affect any
liability of the Subsidiary Borrowers, and no defect in or
insufficiency or want of powers of the Subsidiary Borrowers or
irregular or improperly recorded exercise thereof, shall impair,
affect, be a defense to or claim against such guaranty. The guaranty
hereunder is a continuing guaranty and shall (a) survive any
termination of this Credit Agreement, and (b) remain in full force and
effect until payment in full of, and performance of, all Guaranteed
Obligations and
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all other amounts payable under the guaranty hereunder, all the
Commitments shall have expired and been terminated, all of the Letters
of Credit shall have expired or been terminated and all lending and
other credit commitments of the Banks in respect thereof have
terminated. The guaranty under this Credit Agreement is made for the
benefit of the Agents and the Banks and their successors and assigns,
and may be enforced from time to time as often as occasion therefor may
arise and without requirement on the part of the Agents or the Banks
first to exercise any rights against the Subsidiary Borrowers, or to
resort to any other source or means of obtaining payment of any of the
said Obligations or to elect any other remedy.
6.3.4. Waiver. The Company hereby waives promptness,
diligence, protest, notice of protest, all suretyship defenses, notice
of acceptance and any other notice with respect to any of the
Guaranteed Obligations and this guaranty and any requirement that the
Agent or any Bank secure, perfect or protect any security interest or
lien on any property subject thereto or exhaust any right or take any
action against the Subsidiary Borrowers or any other person or any
collateral. The Company also irrevocably waives, to the fullest extent
permitted by law, all defenses which at any time may be available to it
in respect of the Guaranteed Obligations by virtue of any statute of
limitations, valuation, stay, moratorium law or similar law now or
hereinafter in effect and all suretyship defenses generally.
6.3.5. Subordination; Subrogation. Until the payment and
performance in full of all the Obligations, the Company shall not
exercise and hereby waives any rights against the Subsidiary Borrowers
as a result of payment by the Company hereunder, by way of subrogation,
reimbursement, restitution, contribution or otherwise, and the Company
will not prove any claim in competition with the Agent or any Bank in
respect of any payment hereunder in bankruptcy, insolvency, or
reorganization proceedings of any nature; the Company will not claim
any set-off, recoupment or counterclaim against the Subsidiary
Borrowers in respect of any liability of the Company to the Subsidiary
Borrowers; and the Company waives any benefit of and any right to
participate in any collateral which may be held by any Bank or the
Agent. The Company agrees that, after the occurrence and during the
continuance of any Default or Event of Default, the Company will not
demand, sue for or otherwise attempt to collect any Indebtedness of the
Subsidiary Borrowers to the Company until all of the Obligations of the
Subsidiary Borrowers shall have been paid in full. If, notwithstanding
the foregoing sentence, the Company shall collect, enforce or receive
any amounts in respect of such indebtedness in violation of the
foregoing sentence while any Obligations of the Subsidiary Borrowers
are still outstanding, such amounts shall be collected, enforced and
received by the Company as trustee for the Banks and the Agent and be
paid over to the Agent, for the benefit of the Banks and the Agent on
account of the Obligations of the Subsidiary Borrowers without
affecting in any manner the liability of the Company under the other
provisions hereof. The provisions
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of this section shall survive the expiration or termination of the
Credit Agreement and the other Loan Documents.
6.3.6. Payments. The Company shall pay the Guaranteed
Obligations in the currency in which such Obligation is payable by the
Subsidiary Borrowers and all payments by the Company hereunder shall be
made without setoff or counterclaim and shall be free and clear of and
without deduction for any foreign or domestic taxes, levies, imposts,
duties, charges, fees, deductions, withholdings, compulsory loans,
restrictions or conditions of any nature now or hereafter imposed or
levied by any jurisdiction or any political subdivision thereof or
taxing or other authority therein unless the Subsidiary Borrowers is
required by law to make such deduction or withholding. Except as
otherwise expressly provided in this ss.6.3.6, if any such obligation
is imposed upon the Company or the Subsidiary Borrowers with respect to
any amounts payable by it hereunder or under any of the Loan Documents,
the Company will pay to the Agent for the account of the Banks or, as
the case may be the Agent, on the date on which such amount is due and
payable hereunder or under such other Loan Documents, such additional
amount in Dollars as shall be necessary to enable the Banks or the
Agent to receive the same net amount which the Banks or the Agent would
have received on such due date had not such obligation been imposed on
the Company or the Subsidiary Borrowers.
6.3.7. Receipt of Information. The Company acknowledges and
confirms that the Company itself has established its own adequate means
of obtaining from the Subsidiary Borrowers on a continuing basis all
information desired by the Company concerning the financial condition
of the Subsidiary Borrowers and that the Company will look to the
Subsidiary Borrowers and not to the Agent or any Bank in order for the
Company to keep adequately informed of changes in the Subsidiary
Borrowers' financial condition.
7. REPRESENTATIONS AND WARRANTIES.
Each Borrower represents and warrants to the Banks and the Agent as
follows:
7.1. Corporate Authority.
7.1.1. Incorporation; Good Standing. Each of the Borrowers and
its Subsidiaries (a) is a corporation (or similar business entity) duly
organized, validly existing and in good standing under the laws of its
state or country of incorporation or formation, (b) has all requisite
corporate or similar power to own its property and conduct its business
as now conducted and as presently contemplated, and (c) is in good
standing as a foreign corporation (or similar business entity) and is
duly authorized to do business in each jurisdiction where such
qualification is necessary except where a failure to be so qualified
would not have a Material Adverse Effect.
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7.1.2. Authorization. The execution, delivery and performance
of this Credit Agreement and the other Loan Documents to which the
Borrowers or any of their Subsidiaries is or is to become a party and
the transactions contemplated hereby and thereby (a) are within the
corporate (or similar) authority of such Person, (b) have been duly
authorized by all necessary corporate (or similar organizational)
proceedings, (c) do not conflict with or result in any breach or
contravention of any provision of law, statute, rule or regulation to
which the Borrowers or any of their Subsidiaries is subject or any
judgment, order, writ, injunction, license or permit applicable to the
Borrowers or any of their Subsidiaries and (d) do not conflict with any
provision of the corporate charter or bylaws of, or the Subordinated
Debt Documents or any agreement or other instrument binding upon, the
Borrowers or any of their Subsidiaries.
7.1.3. Enforceability. The execution and delivery of this
Credit Agreement and the other Loan Documents to which the Borrowers or
any of their Subsidiaries is or is to become a party will result in
valid and legally binding obligations of such Person enforceable
against it in accordance with the respective terms and provisions
hereof and thereof, except as enforceability is limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors' rights and except to
the extent that availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court before
which any proceeding therefor may be brought.
7.2. Governmental Approvals. The execution, delivery and performance by
the Borrowers and any of their Subsidiaries of this Credit Agreement and the
other Loan Documents to which such Borrower or any of its Subsidiaries is or is
to become a party and the transactions contemplated hereby and thereby
(including, but not limited to the making by the Borrowers of any borrowings
contemplated by this Credit Agreement or the obtaining by the Company of any
Letters of Credit) do not require the approval, consent, order, authorization or
license by, or giving of notice to, or taking of any other action with respect
to, any governmental agency or authority of any jurisdiction, or other fiscal,
monetary or other authority, under any provisions of any laws or governmental
rules, regulations, orders, or decrees of any jurisdiction or the central bank
of any jurisdiction or other fiscal, monetary or other authority, under any
provision of any laws or governmental rules, regulations, orders or decrees of
any jurisdiction applicable to or binding on any Borrower, other than those
already obtained.
7.3 Title to Properties; Leases. Except as indicated on Schedule 7.3
hereto, the Borrowers and their Subsidiaries own all of the assets reflected in
the Historical Pro Forma Results of the Borrower and its Subsidiaries as at
September 30, 1997 or acquired since that date (except property and assets sold
or otherwise disposed of in the ordinary course of business since that date),
subject to no rights of others, including any mortgages, leases, conditional
sales agreements, title retention agreements, liens or other encumbrances except
Permitted Liens.
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7.4. Financial Statements and Projections.
7.4.1. Fiscal Year. The Borrowers and each of their
Subsidiaries has a fiscal year which is the twelve months ending on
December 31 of each calendar year.
7.4.2. Financial Statements. There has been furnished to each
of the Banks the Historical Pro Forma Results of the Company and its
Subsidiaries as at the Balance Sheet Date, and a pro forma historical
consolidated statement of income of the Company and its Subsidiaries
for the nine and twelve month period then ended. Such balance sheet and
statement of income have been prepared in accordance with generally
accepted accounting principles and fairly present the financial
condition of the Company as at the close of business on the date
thereof and the results of operations for the fiscal year then ended.
Except as disclosed in the Transaction Documents, there are no
contingent liabilities of the Company or any of its Subsidiaries as of
such date involving material amounts, known to the officers of the
Company, which were not disclosed in such balance sheet and the notes
related thereto.
7.4.3. Projections. The projections of the annual operating
budgets of the Company and its Subsidiaries on a consolidated basis,
balance sheets and cash flow statements for the 1997 to 2002 fiscal
years have been delivered to the Agent and the Banks on or prior to the
Closing Date. To the knowledge of the Company and its Subsidiaries, no
facts exist that (individually or in the aggregate) would result in any
material adverse change in any of such projections. The projections
were based when made upon reasonable estimates and assumptions and as
of the Closing Date reflect the reasonable estimates of the Company and
its Subsidiaries of the results of operation and other information
projected therein, it being understood that the projections are not
guaranties of results and that the actual results may vary from the
projections and such variations may be material.
7.4.4. Solvency. The Company and its Subsidiaries, on a
consolidated and consolidating basis, both before and after giving
effect to the transactions contemplated by this Credit Agreement and
the other Loan Documents (a) are solvent, (b) have assets having a fair
value in excess of their liabilities, (c) have assets having a fair
value in excess of the amount required to pay their liabilities on
existing debts as such debts become absolute and matured, and (d) have,
and expect to continue to have, access to adequate capital for the
conduct of their business and the ability to pay their debts from time
to time incurred in connection with the operation of their business as
such debts mature.
7.5. No Material Changes, etc. Since the Balance Sheet Date there has
occurred no materially adverse change in the financial condition or business of
the Company and its Subsidiaries as shown on or reflected in the pro forma
historical
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consolidated balance sheet of the Company and its Subsidiaries as at the Balance
Sheet Date, or the consolidated statement of income for the fiscal year then
ended, other than changes in the ordinary course of business that have not had
any Materially Adverse Effect. Since the Balance Sheet Date, the Company has not
made any Distributions, except for the redemption of its capital stock on the
Closing Date or otherwise pursuant to the Stock Purchase Agreement and except
for redemptions otherwise expressly permitted by this Credit Agreement.
7.6. Franchises, Patents, Copyrights, etc. Each of the Borrowers and
their Subsidiaries possesses all franchises, patents, copyrights, trademarks,
trade names, licenses and permits, and rights in respect of the foregoing,
adequate for the conduct of its business substantially as now conducted without
known conflict with any rights of others, except where such nonpossession or
conflict, as the case may be, could not reasonably be expected to have a
Material Adverse Effect.
7.7. Litigation. Except as set forth in Schedule 7.7 hereto, there are
no actions, suits, proceedings or investigations of any kind pending or
threatened against any of the Borrowers or any of their Subsidiaries before any
court, tribunal or administrative agency or board that, if adversely determined,
might, either in any case or in the aggregate, have a Material Adverse Effect,
result in any substantial liability not adequately covered by insurance, or for
which adequate reserves are not maintained on the consolidated balance sheet of
the Company and its Subsidiaries, or which question the validity of this Credit
Agreement or any of the other Loan Documents, or any action taken or to be taken
pursuant hereto or thereto.
7.8. No Materially Adverse Contracts, etc. The Borrowers and their
Subsidiaries are not subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation that has or is
expected in the future to have a Material Adverse Effect. Neither the Borrowers
nor any of their Subsidiaries is a party to any contract or agreement that has
or is expected, in the judgment of the Company's officers, to have a Material
Adverse Effect.
7.9. Compliance with Other Instruments, Laws, etc. Neither any Borrower
nor any of its Subsidiaries is in violation of any provision of its charter
documents, bylaws, or any agreement or instrument to which it may be subject or
by which it or any of its properties may be bound or any decree, order,
judgment, statute, license, rule or regulation, in any of the foregoing cases in
a manner that could reasonably be expected to have a Material Adverse Effect.
7.10. Tax Status. Except as set forth on Schedule 7.10 hereto, each of
the Borrower and their Subsidiaries (a) have made or filed all federal, state
and foreign income and all other tax returns, reports and declarations required
by any jurisdiction to which any of them is subject, (b) have paid all taxes and
other governmental assessments and charges shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and by appropriate proceedings and (c) have set aside on their books provisions
reasonably
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adequate for the payment of all taxes for periods subsequent to the periods to
which such returns, reports or declarations apply. There are no unpaid taxes in
any material amount claimed to be due from any of the Borrowers or their
Subsidiaries by the taxing authority of any jurisdiction, and the officers of
the Borrowers know of no basis for any such claim.
7.11. No Event of Default. No Default or Event of Default has occurred
and is continuing.
7.12. Holding Company and Investment Company Acts. Neither the
Borrowers nor any of their Subsidiaries is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company", as
such terms are defined in the Public Utility Holding Company Act of 1935; nor is
it an "investment company", or an "affiliated company" or a "principal
underwriter" of an "investment company", as such terms are defined in the
Investment Company Act of 1940.
7.13. Absence of Financing Statements, etc. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of any of the Borrowers or any of their Subsidiaries
or any rights relating thereto.
7.14. Perfection of Security Interest. All filings, assignments,
pledges and deposits of documents or instruments have been made and all other
actions have been taken that are necessary or advisable, under applicable law,
to establish and perfect the Agent's security interest in the Collateral. The
Collateral and the Agent's rights with respect to the Collateral are not subject
to any setoff, claims, withholdings or other defenses. The Company or a
Subsidiary of the Borrower party to one of the Security Agreements is the owner
of the Collateral free from any lien, security interest, encumbrance and any
other claim or demand, except for Permitted Liens.
7.15. Certain Transactions. Except as set forth on Schedule 7.15 hereto
and except for arm's length transactions pursuant to which the Borrowers or any
of their Subsidiaries makes payments in the ordinary course of business upon
terms no less favorable than such Borrower or such Subsidiary could obtain from
third parties, none of the officers, directors, or employees of the Borrowers or
any of their Subsidiaries is presently a party to any transaction with the
Borrowers or any of their Subsidiaries (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Borrowers, any
corporation, partnership, trust or other entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director,
trustee or partner.
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7.16. Employee Benefit Plans. Except as otherwise expressly disclosed
in Schedule 7.16 hereto:
7.16.1. In General. Each Employee Benefit Plan and each
Guaranteed Pension Plan has been maintained and operated in compliance
in all material respects with the provisions of ERISA and, to the
extent applicable, the Code, including but not limited to the
provisions thereunder respecting prohibited transactions and the
bonding of fiduciaries and other persons handling plan funds as
required by ss.412 of ERISA, except to the extent that noncompliance
would not have a Material Adverse Effect. The Company has heretofore
delivered to the Agent the most recently completed annual report, Form
5500, with all required attachments, and actuarial statement required
to be submitted under ss.103(d) of ERISA, with respect to each
Guaranteed Pension Plan.
7.16.2. Terminability of Welfare Plans. No Employee Benefit
Plan, which is an employee welfare benefit plan within the meaning of
ss.3(1) or ss.3(2)(B) of ERISA, provides benefit coverage subsequent to
termination of employment, except as required by Title I, Part 6 of
ERISA or the applicable state insurance laws. The Borrowers may
terminate each such Plan at any time (or at any time subsequent to the
expiration of any applicable bargaining agreement) in the discretion of
the Borrowers without liability to any Person other than for claims
arising prior to termination.
7.16.3. Guaranteed Pension Plans. Each contribution required
to be made to a Guaranteed Pension Plan, whether required to be made to
avoid the incurrence of an accumulated funding deficiency, the notice
or lien provisions of ss.302(f) of ERISA, or otherwise, has been timely
made. No waiver of an accumulated funding deficiency or extension of
amortization periods has been received with respect to any Guaranteed
Pension Plan, and neither the Borrowers nor any ERISA Affiliate is
obligated to or has posted security in connection with an amendment to
a Guaranteed Pension Plan pursuant to ss.307 of ERISA or ss.401(a)(29)
of the Code. No liability to the PBGC (other than required insurance
premiums, all of which have been paid) has been incurred by the
Borrowers or any ERISA Affiliate with respect to any Guaranteed Pension
Plan and there has not been any ERISA Reportable Event (other than an
ERISA Reportable Event as to which the requirement of thirty (30) days
notice has been waived), or any other event or condition which presents
a material risk of termination of any Guaranteed Pension Plan by the
PBGC. Based on the latest valuation of each Guaranteed Pension Plan
(which in each case occurred within twelve months of the date of this
representation), and on the actuarial methods and assumptions employed
for that valuation, the aggregate benefit liabilities of all such
Guaranteed Pension Plans within the meaning of ss.4001 of ERISA did not
exceed the aggregate value of the assets of all such Guaranteed Pension
Plans, disregarding for this purpose the benefit liabilities and assets
of any Guaranteed Pension Plan with assets in excess of benefit
liabilities.
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7.16.4. Multiemployer Plans. Neither the Borrowers nor any
ERISA Affiliate has incurred any material liability (including
secondary liability) to any Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan under
ss.4201 of ERISA or as a result of a sale of assets described in
ss.4204 of ERISA. Neither the Borrowers nor any ERISA Affiliate has
been notified that any Multiemployer Plan is in reorganization or
insolvent under and within the meaning of ss.4241 or ss.4245 of ERISA
or is at risk of entering reorganization or becoming insolvent, or that
any Multiemployer Plan intends to terminate or has been terminated
under ss.4041A of ERISA.
7.17. Use of Proceeds.
7.17.1. General. The proceeds of the Revolving Credit Loans
shall be used (a) to refinance existing Indebtedness of the Company;
(b) to finance a portion of the Transactions (including fees,
management bonuses and expenses relating thereto) and (c) for working
capital and general corporate purposes (including the financing of all
or any portion of Permitted Acquisitions (including fees and expenses
relating thereto)). The Borrowers will obtain Letters of Credit solely
for working capital and general corporate purposes.
7.17.2. Regulations U and X. No portion of any Revolving
Credit Loan is to be used, and no portion of any Letter of Credit is to
be obtained, for the purpose of purchasing or carrying any "margin
security" or "margin stock" as such terms are used in Regulations U and
X of the Board of Governors of the Federal Reserve System, 12 C.F.R.
Parts 221 and 224.
7.17.3. Ineligible Securities. No portion of the proceeds of
any Revolving Credit Loan is to be used, and no portion of any Letter
of Credit is to be obtained, for the purpose of (a) knowingly
purchasing, or providing credit support for the purchase of, Ineligible
Securities from a Section 20 Subsidiary during any period in which such
Section 20 Subsidiary makes a market in such Ineligible Securities, (b)
knowingly purchasing, or providing credit support for the purchase of,
during the underwriting or placement period, any Ineligible Securities
being underwritten or privately placed by a Section 20 Subsidiary, or
(c) making, or providing credit support for the making of, payments of
principal or interest on Ineligible Securities underwritten or
privately placed by a Section 20 Subsidiary and issued by or for the
benefit of the Borrowers or any Subsidiary or other Affiliate of the
Borrowers.
7.18. Environmental Compliance. The Borrowers have taken all necessary
steps to investigate the past and present condition and usage of the Real Estate
and the operations conducted thereon and, based upon such diligent
investigation, has determined that:
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(a) none of the Borrowers, their Subsidiaries or any operator
of the Real Estate or any operations thereon is in violation, or
alleged violation, of any judgment, decree, order, law, license, rule
or regulation pertaining to environmental matters, including without
limitation, those arising under the Resource Conservation and Recovery
Act ("RCRA"), the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 as amended ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986 ("SARA"), the Federal Clean
Water Act, the Federal Clean Air Act, the Toxic Substances Control Act,
or any state or local statute, regulation, ordinance, order or decree
relating to health, safety or the environment (hereinafter
"Environmental Laws"), which violation would have a material adverse
effect on the environment or a Material Adverse Effect;
(b) neither the Borrowers nor any of their Subsidiaries has
received notice from any third party including, without limitation, any
federal, state or local governmental authority, (i) that any one of
them has been identified by the United States Environmental Protection
Agency ("EPA") as a potentially responsible party under CERCLA with
respect to a site listed on the National Priorities List, 40 C.F.R.
Part 300 Appendix B; (ii) that any hazardous waste, as defined by 42
U.S.C. ss.6903(5), any hazardous substances as defined by 42 U.S.C.
ss.9601(14), any pollutant or contaminant as defined by 42 U.S.C.
ss.9601(33) and any toxic substances, oil or hazardous materials or
other chemicals or substances regulated by any Environmental Laws
("Hazardous Substances") which any one of them has generated,
transported or disposed of has been found at any site at which a
federal, state or local agency or other third party has conducted or
has ordered that any Borrower or any of its respective Subsidiaries
conduct a remedial investigation, removal or other response action
pursuant to any Environmental Law; or (iii) that it is or shall be a
named party to any claim, action, cause of action, complaint, or legal
or administrative proceeding (in each case, contingent or otherwise)
arising out of any third party's incurrence of costs, expenses, losses
or damages of any kind whatsoever in connection with the release of
Hazardous Substances;
(c) except as set forth on Schedule 7.18 attached hereto: (i)
no portion of the Real Estate has been used by the Company or any of
its Subsidiaries for the handling, processing, storage or disposal of
Hazardous Substances except in accordance with applicable Environmental
Laws; and, to the best of the Company's and its Subsidiaries'
knowledge, no underground tank or other underground storage receptacle
for Hazardous Substances is located on any portion of the Real Estate;
(ii) in the course of any activities conducted by the Borrowers, their
Subsidiaries or operators of its properties, no Hazardous Substances
have been generated or are being used on the Real Estate except in
accordance with applicable Environmental Laws; (iii) to the best of the
Borrowers' knowledge, there have been no releases (i.e. any past or
present releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, disposing or dumping) or
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threatened releases of Hazardous Substances on, upon, into or from the
properties of the Borrowers or their Subsidiaries, which releases would
have a Material Adverse Effect; (iv) to the best of the Borrowers'
knowledge, there have been no releases on, upon, from or into any real
property in the vicinity of any of the Real Estate which, through soil
or groundwater contamination, may have come to be located on, and which
would have a material adverse effect on the value of, the Real Estate;
and (v) in addition, any Hazardous Substances that have been generated
on any of the Real Estate by the Company or any of its Subsidiaries
have been transported offsite only by carriers having an identification
number issued by the EPA, treated or disposed of only by treatment or
disposal facilities maintaining valid permits as required under
applicable Environmental Laws, which transporters and facilities have
been and are, to the best of the Borrowers' knowledge, operating in
compliance with such permits and applicable Environmental Laws; and
(d) Except as set forth on Schedule 7.18 hereto, none of the
Borrowers and their Subsidiaries or any of the Real Estate is subject
to any applicable environmental law requiring the performance of
Hazardous Substances site assessments, or the removal or remediation of
Hazardous Substances, or the giving of notice to any governmental
agency or the recording or delivery to other Persons of an
environmental disclosure document or statement by virtue of the
transactions set forth herein and contemplated hereby, or as a
condition to the effectiveness of any other transactions contemplated
hereby.
7.19. Subsidiaries, etc. Schedule 7.19(a) sets forth the Subsidiaries
of each of the Borrowers as of the Closing Date. Except as set forth on Schedule
7.19(b) hereto, neither the Borrowers nor any Subsidiary of any Borrower is
engaged in any joint venture or partnership with any other Person.
7.20. Bank Accounts. Schedule 7.20 sets forth the account numbers and
location of all bank accounts of the Borrowers or any of their Subsidiaries.
7.21. Disclosure. Each of this Credit Agreement and the other Loan
Documents, taken as a whole, do not contain any untrue statement of a material
fact or omit to state a material fact (known to the Borrower or any of its
Subsidiaries in the case of any document or information not furnished by it or
any of its Subsidiaries) necessary in order to make the statements herein or
therein not misleading. As of the Closing Date, there is no fact known to the
Company's President, Chief Operating Officer, Chief Financial Officer or Manager
of Far East Operations which has a Material Adverse Effect, or which is
reasonably likely in the future to have a Material Adverse Effect, exclusive of
effects resulting from changes in general economic conditions, legal standards
or regulatory conditions.
7.22. Status of Loans as Senior Debt. All Indebtedness of each of the
Borrowers and their Subsidiaries to the Banks and the Agent in respect of the
Revolving Credit Loans and the Reimbursement Obligations constitute "Senior
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Debt" (or the analogous term used therein) under the terms of the Subordinated
Debt Documents or of any other instrument evidencing or pursuant to which there
is issued Indebtedness which purports to be Subordinated Debt of any Borrower or
any Subsidiary. In addition, (a) this Credit Agreement would constitute the
"Credit Facility" under the terms of the Subordinated Indenture and (b) the
Indebtedness of each of the Borrowers and their Subsidiaries to the Banks and
the Agents in respect of the Revolving Credit Loans and the Reimbursement
Obligations constitutes "Senior Debt". In addition, without prejudice to the
Credit Agreement's status as the "Credit Facility" referred to in the
Subordinated Indenture, the Company expressly designates all Obligations
hereunder, and under the other Loan Documents, as "Senior Debt" for purposes of
the Subordinated Indenture.
7.23. Subordinated Debt Documents and Transaction Documents. Each of
the representations and warranties made by the Company and its Subsidiaries in
any of the Subordinated Debt Documents, the Offering Documents and the
Transaction Documents was true and correct in all material respects when made
and continue to remain true and correct in all material respects on the Closing
Date, except to the extent that any of such representations and warranties
relate, by the express terms thereof, solely to a date falling prior to the
Closing Date, and except to the extent that any of such representations and
warranties may have been affected by the consummation of the transactions
contemplated and permitted or required by the Loan Documents.
7.24. No Other Senior Debt. The Company (a) has not designated any
Indebtedness of the Company or any of its Subsidiaries as, and has no,
"Designated Senior Debt" for purposes of (and as defined in) the Subordinated
Indenture, other than the Obligations, and (b) has no "Senior Debt" as such term
is defined in the Subordinated Indenture other than the Obligations and that set
forth on Schedule 7.24 hereto.
7.25. No Withholding. None of the Borrowers are required by the laws of
any jurisdiction to make any deduction or withholding of any nature whatsoever
from any payment to be made by way of the Borrowers hereunder unless disclosed
to the Agent in writing prior to the Closing Date (which may be in the form of
legal opinions) and unless the amount and likelihood such deductions or
withholdings are not, in the Agent's reasonable discretion, material. Neither
this Credit Agreement nor any of the other Loan Documents is subject to any
registration or stamp tax or any other similar or like taxes payable in any
jurisdiction.
7.26. No Filings Required. No filing, recording or enrolling of this
Credit Agreement or any other Loan Document is required to ensure the legality,
validity, enforceability or admissibility in evidence of this Credit Agreement
or any other Loan Document.
7.27. Chief Executive Office. The Company's chief executive office is
at 233 Fortune Boulevard, Milford, Massachusetts 01757, at which location its
books and
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records are kept. Each of the Guarantors' chief executive office is as set
forth in the Security Agreement to which it is a party.
7.28. Delivery of Certain Documents. The Company has delivered to the
Agent true and complete copies of all of the Capitalization Documents, the
Offering Documents and the Transaction Documents (including any amendments
thereto). Each of the representations and warranties made by the Company and any
of its Subsidiaries in any of the Subordinated Debt Documents, the
Capitalization Documents, the Offering Documents and the Transaction Documents
was true and correct in all material respects when made and continues to be true
and correct in all material respects on the Closing Date, except to the extent
that any of such representations and warranties relate, by the express terms
thereof, solely to a date falling prior to the Closing Date, and except to the
extent that any of such representations and warranties may have been affected by
the consummation of the transactions contemplated and permitted or required by
the Loan Documents.
7.29. Insurance. The Company and each of its Subsidiaries maintains
with financially sound and reputable insurers insurance with respect to its
properties and businesses against such casualties and contingencies as are in
accordance with sound business practices and with the details of such coverage
being more fully described on Schedule 7.29 hereto.
8. AFFIRMATIVE COVENANTS OF THE BORROWERS.
Each of the Borrowers covenants and agrees that, so long as any
Revolving Credit Loan, Unpaid Reimbursement Obligation, Letter of Credit,
Revolving Credit Note or loan account is outstanding or any Bank has any
obligation to make any Revolving Credit Loans or the Agent has any obligation to
issue, extend or renew any Letters of Credit:
8.1. Punctual Payment. Each Borrower will duly and punctually pay or
cause to be paid the principal and interest on the Revolving Credit Loans, all
Reimbursement Obligations, the Letter of Credit Fees, the commitment fees, the
Agent's Fee and all other amounts to be paid by it provided for in this Credit
Agreement and the other Loan Documents to which the Borrowers or any of their
Subsidiaries is a party, all in accordance with the terms of this Credit
Agreement and such other Loan Documents.
8.2. Maintenance of Office. The Company will maintain its chief
executive office in Milford, Massachusetts, or at such other place in the United
States of America as the Company shall designate upon written notice to the
Agent where notices, presentations and demands to or upon the Borrowers in
respect of the Loan Documents to which the Borrowers are a party may be given or
made.
8.3. Records and Accounts. The Borrowers will (a) keep, and cause each
of its Subsidiaries to keep, true and accurate records and books of account in
which full, true and correct entries will be made in accordance with generally
accepted accounting principles, (b) maintain adequate accounts and reserves for
all taxes
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(including income taxes), depreciation, depletion, obsolescence and amortization
of its properties and the properties of its Subsidiaries, contingencies, and
other reserves, and (c) at all times engage Price Waterhouse LLP or other
independent certified public accountants reasonably satisfactory to the Agent as
the independent certified public accountants of the Company and its Subsidiaries
and will not permit more than thirty (30) days to elapse between the cessation
of such firm's (or any successor firm's) engagement as the independent certified
public accountants of the Company and its Subsidiaries and the appointment in
such capacity of a successor firm as shall be reasonably satisfactory to the
Agent.
8.4. Financial Statements, Certificates and Information. The Company
will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than
ninety (90) days after the end of each fiscal year of the Company, the
consolidated balance sheet of the Company and its Subsidiaries and the
consolidating balance sheet of the Company and its Subsidiaries, each
as at the end of such year, and the related consolidated statement of
income and consolidated statement of cash flow and consolidating
statement of income and consolidating statement of cash flow for such
year, each setting forth in comparative form the figures for the
previous fiscal year and all such consolidated and consolidating
statements to be in reasonable detail, prepared in accordance with
generally accepted accounting principles, and certified without
qualification by Price Waterhouse LLP or by other independent certified
public accountants reasonably satisfactory to the Agent, together with
a written statement from such accountants to the effect that they have
read a copy of this Credit Agreement, and that, in making the
examination necessary to said certification, they have obtained no
knowledge of any Default or Event of Default as it relates to any
financial covenant, or, if such accountants shall have obtained
knowledge of any then existing Default or Event of Default they shall
disclose in such statement any such Default or Event of Default;
provided that such accountants shall not be liable to the Banks for
failure to obtain knowledge of any Default or Event of Default, and,
together with such financial statements and accountant's certification,
a management prepared analysis of such statements, to be in reasonable
detail and prepared in accordance with past practices;
(b) commencing with the fiscal quarter ending December 31,
1997, as soon as practicable, but in any event not later than (i)
forty-five (45) days after the end of each of the first three fiscal
quarters of the Company and (ii) sixty (60) days after the end of the
last fiscal quarter of the Company, copies of the unaudited
consolidated balance sheet of the Company and its Subsidiaries and the
unaudited consolidating balance sheet of the Company and its
Subsidiaries, each as at the end of such quarter, and the related
consolidated statement of income and consolidated statement of cash
flow and consolidating statement of income and consolidating statement
of cash flow for the portion of the Company's fiscal year then elapsed,
each setting
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forth in comparative form the figures for the previous fiscal year and
a comparison setting forth the corresponding figures from the budgeted
or projected figures for such period, all in reasonable detail and
prepared in accordance with generally accepted accounting principles,
together with (i) a certification by the principal financial or
accounting officer of the Company that the information contained in
such financial statements fairly presents the financial position of the
Company and its Subsidiaries on the date thereof (subject to year-end
adjustments) and (ii) a management prepared analysis of such
statements, to be in reasonable detail and prepared in accordance with
past practices;
(c) as soon as practicable, but in any event within (i) thirty
(30) days after the end of each of the first eleven (11) months in each
fiscal year of the Company and (ii) sixty (60) days after the end of
the last month in each fiscal year of the Company, unaudited monthly
consolidated financial statements of the Company and its Subsidiaries
for such month and unaudited monthly consolidating financial statements
of the Company and its Subsidiaries for such month, each setting forth
in comparative form the figures for the previous fiscal year and a
comparison setting forth the corresponding figures from the budgeted or
projected figures for such period and prepared in accordance with
generally accepted accounting principles, together with a certification
by the principal financial or accounting officer of the Company that
the information contained in such financial statements fairly presents
the financial condition of the Company and its Subsidiaries on the date
thereof (subject to year-end adjustments);
(d) commencing with the fiscal period ending December 31,
1997, simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement certified by
the principal financial or accounting officer of the Company in
substantially the form of Exhibit C hereto (the "Compliance
Certificate") and setting forth in reasonable detail computations
evidencing compliance with the covenants contained in ss.10 and (if
applicable) reconciliations to reflect changes in generally accepted
accounting principles since the Balance Sheet Date;
(e) contemporaneously with the filing or mailing thereof,
copies of all material of a financial nature filed with the Securities
and Exchange Commission or sent to the stockholders of the Company;
(f) from time to time upon request of the Agent, annual
projections of the Company and its Subsidiaries updating for a one year
period those projections delivered to the Banks and referred to in
ss.7.4.3 or, if applicable, updating any later such projections
delivered in response to a request pursuant to this ss.8.4(f); and
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(g) from time to time such other financial data and
information (including accountants, management letters) as the Agent or
any Bank may reasonably request.
8.5. Notices.
8.5.1. Defaults. The Borrowers will promptly notify the Agent
and each of the Banks in writing of the occurrence of any Default or
Event of Default. If any Person shall give any notice or take any other
action in respect of a claimed default (whether or not constituting an
Event of Default) under this Credit Agreement or any other note,
evidence of indebtedness, indenture or other obligation to which or
with respect to which the Borrowers or any of their Subsidiaries is a
party or obligor, whether as principal, guarantor, surety or otherwise,
the Borrowers shall forthwith give written notice thereof to the Agent
and each of the Banks, describing the notice or action and the nature
of the claimed default.
8.5.2. Environmental Events. The Borrower will promptly give
notice to the Agent and each of the Banks (a) of any violation of any
Environmental Law that such Borrower or any of its Subsidiaries reports
in writing or is reportable by such Person in writing (or for which any
written report supplemental to any oral report is made) to any federal,
state or local environmental agency and (b) upon becoming aware
thereof, of any inquiry, proceeding, investigation, or other action,
including a notice from any agency of potential environmental
liability, of any federal, state or local environmental agency or
board, that has the potential to materially affect the assets,
liabilities, financial conditions or operations of the Borrowers or any
of their Subsidiaries, or the Agent's security interests pursuant to
the Security Documents.
8.5.3. Notification of Claim against Collateral. The Borrowers
will, immediately upon becoming aware thereof, notify the Agent and
each of the Banks in writing of any setoff, claims (including, with
respect to the Real Estate, environmental claims), withholdings or
other defenses to which any of the Collateral, or the Agent's rights
with respect to the Collateral, are subject.
8.5.4. Notice of Litigation and Judgments. The Borrowers will,
and will cause each of their Subsidiaries to, give notice to the Agent
and each of the Banks in writing within fifteen (15) days of becoming
aware of any litigation or proceedings threatened in writing or any
pending litigation and proceedings affecting the Borrowers or any of
their Subsidiaries or to which the Borrowers or any of their
Subsidiaries is or becomes a party involving an uninsured claim against
the Borrowers or any of their Subsidiaries that could reasonably be
expected to have a Material Adverse Effect and stating the nature and
status of such litigation or proceedings. The Borrowers will, and will
cause each of their Subsidiaries to, give notice to the Agent and each
of
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the Banks, in writing, in form and detail satisfactory to the Agent,
within ten (10) days of any judgment not covered by insurance, final or
otherwise, against the Borrowers or any of their Subsidiaries in an
amount in excess of $500,000.
8.6. Corporate Existence; Maintenance of Properties. Each of the
Borrowers will do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence, rights and franchises and
those of its Subsidiaries and will not, and will not cause or permit any of
their Subsidiaries to, convert to a limited liability company. It (a) will cause
all of its properties and those of its Subsidiaries used or useful in the
conduct of its business or the business of its Subsidiaries to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment, (b) will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Borrower may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times, and (c)
will, and will cause each of its Subsidiaries to, continue to engage primarily
in the businesses conducted by them and in related businesses and those business
acquired in any Permitted Acquisition; provided that nothing in this ss.8.6
shall prevent any Borrower from discontinuing the operation and maintenance of
any of its properties or any of those of its Subsidiaries if such discontinuance
is, in the judgment of such Borrower, desirable in the conduct of its or their
business and that do not in the aggregate materially adversely affect the
business of such Borrower and its Subsidiaries on a consolidated basis.
8.7. Insurance. The Borrowers will, and will cause each of their
Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such casualties
and contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and in
amounts, containing such terms, in such forms and for such periods as may be
reasonable and prudent and in accordance with the terms of the Security
Agreements.
8.8. Taxes. The Borrowers will, and will cause each of their
Subsidiaries to, duly pay and discharge, or cause to be paid and discharged,
before the same shall become overdue, all taxes, assessments and other
governmental charges imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by law
become a lien or charge upon any of its property; provided that any such tax,
assessment, charge, levy or claim need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate proceedings
and if the applicable Borrower or such Subsidiary shall have set aside on its
books adequate reserves with respect thereto; and provided further that the
Borrowers and each Subsidiary of the Borrowers will pay all such taxes,
assessments, charges, levies or claims forthwith upon the commencement of
proceedings to foreclose any lien that may have attached as security therefor.
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8.9. Inspection of Properties and Books, etc.
8.9.1. General. The Borrowers shall permit the Banks,
individually or through the Agent or any of the Banks' other designated
representatives, to visit and inspect any of the properties of the
Borrowers or any of their Subsidiaries, to examine the books of account
of the Borrowers and their Subsidiaries (and to make copies thereof and
extracts therefrom), and to discuss the affairs, finances and accounts
of the Borrowers and their Subsidiaries with, and to be advised as to
the same by, its and their officers, all at such reasonable times and
intervals and, so long as no Default or Event of Default has occurred
and is continuing, subject to reasonable notice, as the Agent or any
Bank may reasonably request.
8.9.2. Appraisals. If an Event of Default shall have occurred
and be continuing, upon the request of the Agent, the Borrowers will
obtain and deliver to the Agent appraisal reports in form and substance
and from appraisers satisfactory to the Agent, stating (a) the then
current fair market, orderly liquidation and forced liquidation values
of all or any portion of the equipment or real estate owned by any
Borrower or any of its Subsidiaries and (b) the then current business
value of each of the Borrowers and their Subsidiaries. All such
appraisals shall be conducted and made at the expense of the Borrower.
8.10. Compliance with Laws, Contracts, Licenses, and Permits. The
Borrowers will, and will cause each of their Subsidiaries to, comply with (a)
the applicable laws and regulations wherever its business is conducted,
including all Environmental Laws, (b) the provisions of its charter documents
and by-laws, (c) all agreements and instruments by which it or any of its
properties may be bound and (d) all applicable decrees, orders, and judgments,
except where any such noncompliance could not reasonably be expected to have a
Material Adverse Effect. If any authorization, consent, approval, permit or
license from any officer, agency or instrumentality of any government shall
become necessary or required in order that the Borrowers or any of their
Subsidiaries may fulfill any of its obligations hereunder or any of the other
Loan Documents to which the Borrowers or such Subsidiary is a party, the
Borrowers will, or (as the case may be) will cause such Subsidiary to,
immediately take or cause to be taken all reasonable steps within the power of
the Borrowers or such Subsidiary to obtain such authorization, consent,
approval, permit or license and furnish the Agent and the Banks with evidence
thereof.
8.11. Employee Benefit Plans. The Borrowers will (a) promptly upon
filing the same with the Department of Labor or Internal Revenue Service,
furnish to the Agent a copy of the most recent actuarial statement required to
be submitted under ss.103(d) of ERISA and Annual Report, Form 5500, with all
required attachments, in respect of each Guaranteed Pension Plan and (b)
promptly upon receipt or dispatch, furnish to the Agent any notice, report or
demand sent (other than as part of a Guaranteed Pension Plan's annual report) or
received in respect of a Guaranteed
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Pension Plan under ss.ss.302, 4041, 4042, 4043, 4063, 4066 and 4068 of ERISA, or
in respect of a Multiemployer Plan, under ss.ss.4041A, 4202, 4219, 4242, or 4245
of ERISA.
8.12. Use of Proceeds. The Borrowers will use the proceeds of the
Revolving Credit Loans solely (a) to refinance existing Indebtedness of the
Borrowers; (b) to finance a portion of the Transaction (including fees and
expenses relating thereto) and (c) for working capital and general corporate
purposes (including to finance all or any portion of Permitted Acquisitions
(including fees and expense relating thereto)). The Borrowers will obtain
Letters of Credit solely for working capital and general corporate purposes.
8.13. Additional Mortgaged Property. If, after the Closing Date, the
Borrowers or any of their Subsidiaries acquires real estate located in the
United States, such Borrower shall, or shall cause such Subsidiary to, forthwith
deliver to the Agent a fully executed mortgage or deed of trust over such real
estate, in form and substance satisfactory to the Agent, together with title
insurance policies, surveys, evidences of insurance with the Agent named as loss
payee and additional insured, legal opinions and other documents and
certificates with respect to such real estate as is required by the Agent. The
Borrowers further agrees that, following the taking of such actions with respect
to such real estate, the Agent shall have for the benefit of the Banks and the
Agent a valid and enforceable first priority mortgage or deed of trust over such
real estate, free and clear of all defects and encumbrances except for Permitted
Liens.
8.14. Fair Labor Standards Act. The Company shall, and shall require
each Subsidiary to, at all times operate its business in compliance with all
material applicable provisions of the Fair Labor Standards Act of 1938, as
amended. None of the inventory of the Company or any of its Subsidiaries are or
will be produced by employees of (a) the Company or any of its Subsidiaries, or
(b) to the best knowledge of the Company, by employees of suppliers, who are, in
each case, employed in violation of any applicable minimum wage or maximum hour
provisions of the Fair Labor Standards Act (29 U.S.C. ss.ss.206 and 207) or any
applicable regulations promulgated thereunder, in each case, as in effect from
time to time.
8.15. Guarantors. The Company will, and will cause each Domestic
Subsidiary created, acquired or existing on or after the Closing Date or any
other Subsidiary which is otherwise required to become a guarantor under the
Subordinated Indenture, to become a Guarantor immediately and shall cause such
Subsidiary to execute and deliver to the Agent for the benefit of the Agent and
the Banks (a) a Guaranty (or an Instrument of Adherence to the Guaranty executed
on the Closing Date), and (b) further Security Documents or other instruments
and documents as the Agent may reasonably require in order to grant to the Agent
a first priority perfected security interest in such Subsidiary's assets,
together with legal opinions in form and substance reasonably satisfactory to
the Agent to be delivered to the Agent and the Banks opining as to the
authorization, validity and enforceability of such Guaranty or Instrument of
Adherence and Security
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Documents and (as to the applicable Security Documents) the perfection of such
security interests.
8.16. Subordinated Guarantees. The Company will promptly advise the
Agent of any Subordinated Guarantee entered into in connection with the
Subordinated Indenture, identifying the guarantor thereunder.
8.17. Status of Loans as Senior Debt. The Company shall, on the Closing
Date and at such other times as may reasonably be requested by the Agent,
deliver to the Agent certificates and, if requested, legal opinions, evidencing
that the Indebtedness of each of the Borrowers and their Subsidiaries to the
Agent and the Banks in respect of the Revolving Credit Loans and Reimbursement
Obligations constitutes "Senior Debt" (or the analogous term used therein) under
the terms of the Subordinated Debt Documents or of any other instrument
evidencing or pursuant to which there is issued indebtedness which purports to
be Subordinated Debt of the Company or any of its Subsidiaries and that (a) this
Credit Agreement would constitute the "Credit Facility" under the terms of the
Subordinated Indenture, and (b) the Indebtedness of each of the Borrowers and
their Subsidiaries to the Banks and the Agents in respect of the Revolving
Credit Loans and Reimbursement Obligations constitutes "Designated Senior Debt"
as defined by the Subordinated Indenture.
8.18. Further Assurances. The Borrower will, and will cause each of its
Subsidiaries to, cooperate with the Banks and the Agent and execute such further
instruments and documents as the Banks or the Agent shall reasonably request to
carry out to their satisfaction the transactions contemplated by this Credit
Agreement and the other Loan Documents.
8.19. Additional Subsidiaries. If, after the Closing Date, the Company
or any of its Subsidiaries creates or acquires, either directly or indirectly,
any Subsidiary, it will immediately notify the Agent and the Banks if such
creation or acquisition, as the case may be, and provide the Agent and the Banks
with an updated Schedule 7.19(a) hereof and take all other actions required by
ss.8.15 and ss.9.5.1 hereof.
8.20. Landlord Consents. The Company will use its best efforts to
deliver to the Agent within thirty (30) days from the Closing Date landlord
consents from the landlords of the leased Real Estate set forth on Schedule 8.20
hereto, which landlord consents shall be in form and substance reasonably
satisfactory to the Agent.
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS.
Each of the Borrowers covenants and agrees that, so long as any
Revolving Credit Loan, Unpaid Reimbursement Obligation, Letter of Credit,
Revolving Credit Note or loan account is outstanding or any Bank has any
obligation to make any Revolving Credit Loans or the Agent has any obligations
to issue, extend or renew any Letters of Credit:
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9.1. Restrictions on Indebtedness. The Borrowers will not, and will not
permit any of their Subsidiaries to, create, incur, assume, guarantee or be or
remain liable, contingently or otherwise, with respect to any Indebtedness other
than:
(a) Indebtedness to the Banks and the Agent arising under any
of the Loan Documents;
(b) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the
ordinary course of business;
(c) Subordinated Debt (including Indebtedness of a Domestic
Subsidiary of the Company pursuant to the Subordinated Guarantee
provided for in the Subordinated Indenture);
(d) Indebtedness incurred in connection with the acquisition
after the date hereof of any real or personal property by the Borrowers
or such Subsidiary or under any Capitalized Lease, provided that the
aggregate principal amount of such Indebtedness of the Borrowers and
their Subsidiaries shall not exceed the aggregate amount of $15,000,000
at any one time;
(e) Indebtedness existing on the date hereof and listed and
described on Schedule 9.1 hereto;
(f) (i) Indebtedness of a Subsidiary of a Borrower to a
Borrower so long as such Subsidiary is a Guarantor hereunder; and (ii)
Indebtedness of a Subsidiary of a Borrower which is not a Guarantor to
a Borrower provided that the aggregate principal amounts of all such
Indebtedness permitted under this ss.9.1(f)(ii) shall not exceed at any
one time an amount equal to $20,000,000 less the aggregate amount of
all Revolving Credit Loans, Reimbursement Obligations and Unpaid
Reimbursement Obligations outstanding to all Subsidiary Borrowers at
such time;
(g) (i) unsecured Indebtedness incurred in connection with any
Permitted Acquisitions, including Indebtedness of Persons acquired
pursuant to ss.9.5.1 hereof, so long as the terms of such Indebtedness
comply with the provisions of ss.9.5.1(b) (iii) hereof; and (ii)
secured Indebtedness assumed in connection with any Permitted
Acquisitions so long as the aggregate principal amount of all such
Indebtedness does not exceed $5,000,000 at any one time, the terms of
such Indebtedness comply with the provisions of ss.9.5.1(b)(iii)
hereof, and, if such Indebtedness is secured, such security interest
covers only the real or personal property acquired in such Permitted
Acquisition;
(h) Indebtedness of the Company in respect of any promissory
notes issued by the Company to certain members of its management as
permitted
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by ss.9.4(e) hereof as payment for the redemption by the Company of
certain shares of its capital stock issued to such member; and
(i) unsecured Indebtedness of the Company to any of the
Principals or Additional Investors, provided (i) no Default or Event of
Default has occurred and is continuing or would exist as a result
thereof; (ii) the amount of such Indebtedness and the terms and
conditions (including, without limitation, a prohibition on any cash
payments to be made to the holders thereof during the term of this
Credit Agreement and a limitation of use of proceeds) of such
Indebtedness are acceptable to the Agent and the Majority Banks; and
(iii) such Indebtedness shall contain subordination provisions
acceptable to the Agent and the Majority Banks.
provided, however, notwithstanding the foregoing provisions of this
ss.9.1, all such Indebtedness must in any event qualify at all times as
"Indebtedness" (as such term is defined in the Subordinated Indenture) permitted
to be incurred pursuant to ss.4.09 of the Subordinated Indenture.
9.2. Restrictions on Liens. The Borrowers will not, and will not permit
any of their Subsidiaries to, (a) create or incur or suffer to be created or
incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest of any kind upon any of its property or
assets of any character whether now owned or hereafter acquired, or upon the
income or profits therefrom; (b) transfer any of such property or assets or the
income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; (c) acquire, or agree or have an option to
acquire, any property or assets upon conditional sale or other title retention
or purchase money security agreement, device or arrangement; (d) suffer to exist
for a period of more than thirty (30) days after the same shall have been
incurred any Indebtedness or claim or demand against it that if unpaid might by
law or upon bankruptcy or insolvency, or otherwise, be given any priority
whatsoever over its general creditors; (e) sell, assign, pledge or otherwise
transfer any "receivables" as defined in clause (g) of the definition of the
term "Indebtedness," with or without recourse; or (f) enter into or permit to
exist any arrangement or agreement, enforceable under applicable law, which
directly or indirectly prohibits the Borrowers or any of their Subsidiaries from
creating or incurring any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest other than in favor of the Agent for the
benefit of the Banks and the Agent under the Loan Documents and other than
customary anti-assignment provisions in leases and licensing agreements entered
into by the Borrowers or such Subsidiary in the ordinary course of its business,
provided that the Borrowers or any of their Subsidiaries may create or incur or
suffer to be created or incurred or to exist:
(a) liens in favor of the Borrowers on all or part of the
assets of Subsidiaries of the Borrowers securing Indebtedness owing by
Subsidiaries of the Borrowers to such Borrower;
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(b) liens to secure taxes, assessments and other government
charges in respect of obligations not overdue or liens on properties to
secure claims for labor, material or supplies in respect of obligations
not overdue;
(c) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations;
(d) liens on properties in respect of judgments or awards that
have been in force for less than the applicable period for taking an
appeal so long as execution is not levied thereunder or in respect of
which such Borrowers or such Subsidiary shall at the time in good faith
be prosecuting an appeal or proceedings for review and in respect of
which a stay of execution shall have been obtained pending such appeal
or review;
(e) liens of carriers, warehousemen, mechanics and
materialmen, and other like liens on properties, in existence less than
120 days from the date of creation thereof in respect of obligations
not overdue;
(f) encumbrances on Real Estate consisting of easements,
rights of way, zoning restrictions, restrictions on the use of real
property and defects and irregularities in the title thereto,
landlord's or lessor's liens under leases to which the Borrowers or a
Subsidiary of any Borrower is a party, and other minor liens or
encumbrances none of which in the opinion of the applicable Borrower
interferes materially with the use of the property affected in the
ordinary conduct of the business of such Borrower and its Subsidiaries,
which defects do not individually or in the aggregate have a materially
adverse effect on the business of such Borrower individually or of such
Borrower and its Subsidiaries on a consolidated basis;
(g) liens existing on the date hereof and listed on Schedule
9.2 hereto;
(h) purchase money security interests in or purchase money
mortgages on real or personal property acquired after the date hereof
to secure purchase money Indebtedness of the type and amount permitted
by ss.9.1(d) and ss.9.1(g)(ii), incurred in connection with the
acquisition of such property, which security interests or mortgages
cover only the real or personal property so acquired;
(i) liens in favor of the Agent for the benefit of the Banks
and the Agent under the Loan Documents; and
(j) liens incurred in the ordinary course of business
consistent with past practices in favor of a Person providing insurance
of collection of certain of the Company's accounts receivable, provided
such liens cover only those receivables so insured and provided that
the Agent has a first priority perfected security interest in such
insurance proceeds.
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9.3. Restrictions on Investments. The Borrowers will not, and will not
permit any of their Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United
States of America that mature within one (1) year from the date of
purchase by the Borrowers;
(b) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks having total
assets in excess of $1,000,000,000;
(c) securities commonly known as "commercial paper" issued by
a corporation organized and existing under the laws of the United
States of America or any state thereof that at the time of purchase
have been rated and the ratings for which are not less than "P 1" if
rated by Moody's Investors Service, Inc., and not less than "A 1" if
rated by Standard and Poor's Rating Group;
(d) Investments existing on the date hereof and listed on
Schedule 9.3 hereto;
(e) Investments with respect to Indebtedness permitted by
ss.9.1(f)(i) so long as such entities remain a Subsidiary of any
Borrower and a Guarantor hereunder and Investments with respect to
Indebtedness permitted by ss.9.1(f)(ii) so long as such entities remain
a Subsidiary of any Borrower hereunder;
(f) Investments with respect to Indebtedness permitted by
ss.9.1(g) hereof so long as the Person incurring such Indebtedness
remains a Subsidiary of any Borrower hereunder and Investments
consisting of Permitted Acquisitions under ss.9.5.1 hereof, of assets
or Persons that become, at the time of such Permitted Acquisitions, a
Subsidiary of the Company.
(g) Investments consisting of the Guaranty or the Foreign
Guarantees or Investments by the Borrowers in Guarantors; and
(h) Investments consisting of promissory notes or other
obligations or securities received as proceeds of asset dispositions
permitted by ss.9.5.2;
provided, however, that (a) with the exception of demand deposits referred to in
ss.9.3(b), such Investments will be considered Investments permitted by this
ss.9.3 only if all actions have been taken to the satisfaction of the Agent to
provide to the Agent, for the benefit of the Banks and the Agent, a first
priority perfected security interest in all of such Investments free of all
encumbrances other than Permitted Liens and (b) all Investments made pursuant to
this ss.9.3 must be permitted to be made pursuant to the Subordinated Indenture.
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9.4. Distributions and Restricted Payments. The Company and its
Subsidiaries will not make any Distributions or Restricted Payments, other than
dividends or payments:
(a) so long as no Event of Default under ss.13.1(c) as it relates to
ss.10 or under ss.13.1(a) or (b) has occurred and is continuing or would result
therefrom, by the Company to Berkshire Partners consisting of quarterly
management services fees pursuant to the Management Agreement in an aggregate
amount not to exceed (i) $100,000 in any fiscal quarter plus (ii) the amount of
management services fees, if any, which are in arrears under the Management
Agreement, provided, however, that the aggregate amount of all fees to be paid
in any fiscal quarter under this ss.9.4(a)(i) and (ii) shall not exceed 150% of
the amount otherwise required to be paid by ss.9.4(a)(i), and provided,.
further, that such payments shall not be made earlier than ten (10) days prior
to the date such payments are due and payable pursuant to the terms of the
Management Agreement;
(b) by any Subsidiary of the Company to such Subsidiary's parent.
(c) expressly permitted to be made pursuant to the Transaction
Documents;
(d) so long as no Event or Default under ss.13.1(c) as it relates to
ss.10 or under ss.13.1(a) or (b) has occurred and is continuing or would result
therefrom, by the Company in the form of redemptions of Equity Interests of the
Company held by any member of the Company's or any Subsidiary's management or
Board of Directors, provided that the aggregate sum paid therefor shall not
exceed the sum of (i) $500,000 in any twelve (12) month period, plus (ii) the
aggregate Net Cash Proceeds received by the Company from the issuance after the
Closing Date of Equity Interests to members of management or the Company's Board
of Directors; and
(e) by the Company as a Distribution in the form of promissory notes
issued by the Company to repurchase or redeem shares of its capital stock
pursuant to certain buy-back arrangements with certain members of the Company's
management, provided that (i) no Event of Default then exists or would result
after the making of such Distribution; (ii) the terms of such notes are
acceptable to the Agent in all respects; and (iii) such notes contain
subordination provisions acceptable to the Agent.
9.5. Merger, Consolidation and Disposition of Assets.
9.5.1. Mergers and Acquisitions. The Borrowers will not, and
will not permit any of their Subsidiaries to, become a party to any
merger or consolidation, or agree to or effect any asset acquisition or
stock acquisition except, so long as no Default or Event of Default has
occurred and is continuing, or would exist after giving effect thereto:
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(a) the merger of one or more of the Subsidiaries of the
Company with and into the Company, any other Borrower hereunder or a
Guarantor hereunder, and provided the Company, the other Borrower or
the Guarantor, as the case may be, has taken or caused to be taken all
action necessary to grant to the Agent a first priority perfected
security interest in all of the Company's or such other Borrower's or
Guarantor's assets after such merger; and
(b) the acquisition of the assets or stock of Persons in the
same or a similar line of business as the Company and its Subsidiaries
(including home electrical and other consumer appliances and products)
(each, a "Permitted Acquisition") where (i) the Company has provided
the Agent with thirty (30) days prior written notice of such Permitted
Acquisition, which notice shall include a reasonably detailed
description of such Permitted Acquisition and copies of all acquisition
documents in connection therewith; (ii) the business to be acquired
would not subject the Agent or the Banks to regulatory or third party
approvals in connection with the exercise of their rights and remedies
under this Credit Agreement or any other Loan Document; (iii) no
contingent liabilities or liabilities will be incurred or assumed in
connection with such Permitted Acquisition which could be expected to
have a Material Adverse Effect, and any Indebtedness incurred or
assumed in connection with such Permitted Acquisition (1) shall have
been permitted to be incurred or assumed pursuant to ss.9.1 hereof; (2)
shall not bear cash interest at a rate in excess of 600 basis points
over the applicable treasury rate per annum and shall not bear interest
at a rate in excess of 900 basis points over the applicable treasury
rate per annum; (3) shall not have a maturity prior to the Revolving
Credit Loan Maturity Date; (4) shall not contain any financial
covenants; (5) shall be unsecured; (6) shall contain an amortization
schedule acceptable to the Agent and (7) shall contain subordination
provisions acceptable to the Agent and the Banks; provided that any
such Indebtedness permitted by ss.9.1(g)(ii) shall not have to comply
with clauses (2)-(7) hereof; (iv) the Company has provided the Agent
with such other information as was reasonably requested by the Agent;
(v) after the consummation of the Permitted Acquisition, the Company
shall own a majority of the capital stock of the Person to be acquired
or shall otherwise control such Person (including, without limitation,
controlling the ability of such Person to make loans, advances and
Distributions in cash to the Company); (vi) the Company shall take, or
shall cause to be taken, all necessary action to grant to the Agent a
first priority perfected lien in all assets and stock acquired in
connection with such Permitted Acquisition, with such exceptions as the
Agent may approve; provided, however, the Company or any Guarantor, as
the case may be, shall only be required to pledge 66% of the capital
stock of any Foreign Subsidiary or any other Person not incorporated or
otherwise organized in the United States of America (a "Foreign
Entity"), and such Foreign Entity shall not be required to grant a lien
on its assets to secure the Obligations of the Company or any
Guarantor; (vii) the Company has demonstrated to the reasonable
satisfaction of the Agent, based on a pro
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forma Compliance Certificate, compliance with ss.10 immediately prior
to and on a Pro Forma Basis immediately after giving effect to such
Permitted Acquisition and the Leverage Ratio (calculated on a Pro Forma
Basis) after giving effect to such Permitted Acquisition shall not
exceed 5.50:1.00; (viii) the maximum amount of the proceeds of the
Revolving Credit Loans to be used for any single Permitted Acquisition
or series of Permitted Acquisitions relating to the same business
organization or group of related companies does not exceed the sum of
$40,000,000 plus the aggregate amount of secured Indebtedness assumed
in connection with such Permitted Acquisition; (ix) board of directors
and the shareholders (if required by applicable law), or the
equivalent, of each of the Company and the Person to be acquired has
approved such merger, consolidation or acquisition and such Permitted
Acquisition is otherwise considered "friendly"; (x) to the extent the
Company or any Subsidiary is acquiring any Real Estate in connection
with such Permitted Acquisition, the Company shall have delivered to
the Agent all appraisals and environmental site assessments which the
Agent shall reasonably require, with all such appraisals and site
assessments to be in form and substance reasonably satisfactory to the
Agent; and (xi) the Company has delivered to the Agent a certificate of
the chief financial officer of the Company to the effect that (1) the
Company will be solvent upon the consummation of the Permitted
Acquisition; (2) the pro forma Compliance Certificate fairly presents
the financial condition of the Company and its Subsidiaries as of the
date thereof and after giving effect to such Permitted Acquisition; and
(3) no Default or Event of Default then exists or would result after
giving effect to the Permitted Acquisition.
In the event any new Domestic Subsidiary is formed or acquired
as a result of or in connection with any acquisition, such new Domestic
Subsidiary shall, immediately upon its creation or acquisition, execute
and deliver to the Agent for the benefit of the Agent and the Banks, an
Instrument of Adherence in substantially the form of Exhibit D hereto
(an "Instrument of Adherence") and the Loan Documents shall be amended
and/or supplemented as necessary to make the terms and conditions of
the Loan Documents applicable to such Domestic Subsidiary. Such
Domestic Subsidiary shall become a Guarantor hereunder and shall become
party to the Guaranty and the Security Agreement and shall execute and
deliver to the Agent any and all other agreements, documents,
instruments and financing statements necessary to grant to the Agent a
first priority perfected lien in such Domestic Subsidiary's assets. The
Company and its Subsidiaries shall, immediately upon the creation or
acquisition of such Domestic Subsidiary, pledge all of such Domestic
Subsidiary's capital stock to the Agent for the benefit of the Agent
and the Banks. In the event any new Foreign Subsidiary is formed or
acquired as a result of or in connection with any acquisition, such new
Foreign Subsidiary shall, immediately upon its creation or acquisition,
and to the extent legally possible in its jurisdiction of organization
and to the extent that to do so would not result in the recognition of
a deemed dividend from such Foreign Subsidiary, execute and
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deliver to the Agent for the benefit of the Agent and the Banks such
guarantees and security documents as the Agent deems necessary to make
the terms and conditions of the Loan Documents applicable to such
Foreign Subsidiary. To the extent legally permissable, and to the
extent that to do so would not result in the recognition of a deemed
dividend from such Foreign Subsidiary, such Foreign Subsidiary shall
guarantee the Obligations of the Subsidiary Borrowers hereunder and
shall execute and deliver to the Agent any and all other agreements,
documents, instruments and financing statements necessary to grant to
the Agent a first priority perfected lien in such Foreign Subsidiary's
assets to secure its guarantee obligations. In addition, the Company
and its Subsidiaries shall (unless otherwise previously agreed to in
writing by the Agent), immediately upon the creation or acquisition of
such Foreign Subsidiary, pledge 66% of such Foreign Subsidiary's
capital stock to the Agent for the benefit of the Agent and the Banks.
9.5.2. Disposition of Assets. The Borrowers will not, and will
not permit any of their Subsidiaries to, become a party to or agree to
or effect any Asset Sale or other disposition of assets, other than (a)
the sale of inventory, the sale or other disposition of doubtful, bad,
overdue or defaulted receivables (that does not constitute a financing
arrangement), the licensing of intellectual property and the
disposition of obsolete assets, in each case in the ordinary course of
business consistent with past practices and (b) the sale of assets in
arms-length transactions for fair and reasonable value, provided that,
with respect to this clause (b) (i) no Default or Event of Default
shall have occurred and be continuing at the time of such sale and no
Default or Event of Default will exist after giving effect to such
Asset Sale; (ii) at least seventy five percent (75%) of the purchase
price for such assets is received in cash and the Net Cash Sale
Proceeds from such sales are applied as provided in ss.3.2 hereof,
(iii) any promissory note or other instrument received by the Company
or any of its Subsidiaries in connection with such sale is an
Investment permitted by ss.9.3 hereof, and the Company or such
Subsidiary, as applicable, has delivered such promissory note or other
instrument to the Agent to be held in pledge for the benefit of itself
and the Banks in accordance with the terms of the Loan Documents; (iv)
the aggregate value of all assets sold in any Asset Sale is not more
than $10,000,000 in any fiscal year and (v) the Company shall have
delivered to the Agent on the date of such sale a certificate signed by
an authorized officer of the Company and evidence satisfactory to the
Agent showing compliance with the provisions of clauses (i) through
(iv) of this ss.9.5.2.
Notwithstanding anything to the contrary contained in this
ss.9.5, neither the Company nor any of its Subsidiaries shall be
permitted to dispose of any assets or take (or omit to take) any action
in connection with any Asset Sale or other asset disposition or engage
in any other transaction which action (or omission) would require or
result in any repayment, repurchase or redemption (or any mandatory
offer to repay, repurchase or
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redeem) by the Company or any of its Subsidiaries of the Subordinated
Notes pursuant to the Subordinated Indenture.
9.6. Sale and Leaseback. Except as permitted by ss.9.5.2, the Borrowers
will not, and will not permit any of their Subsidiaries to, enter into any
arrangement, directly or indirectly, whereby such Borrower or any Subsidiary of
such Borrower shall sell or transfer any property owned by it in order then or
thereafter to lease such property or lease other property that such Borrower or
any Subsidiary of such Borrower intends to use for substantially the same
purpose as the property being sold or transferred.
9.7. Compliance with Environmental Laws. The Borrowers will not, and
will not permit any of their Subsidiaries to, (a) use any of the Real Estate or
any portion thereof for the handling, processing, storage or disposal of
Hazardous Substances, (b) cause or permit to be located on any of the Real
Estate any underground tank or other underground storage receptacle for
Hazardous Substances, (c) generate any Hazardous Substances on any of the Real
Estate, (d) conduct any activity at any Real Estate or use any Real Estate in
any manner so as to cause a release (i.e. releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
disposing or dumping) or threatened release of Hazardous Substances on, upon or
into the Real Estate or (e) otherwise conduct any activity at any Real Estate or
use any Real Estate, each in any manner that would violate any Environmental Law
or bring such Real Estate in violation of any Environmental Law, except where
such noncompliance would not have a Material Adverse Effect.
9.8. Subordinated Debt. The Company will not, and will not permit any
of its Subsidiaries to, amend, supplement or otherwise modify the terms of any
of the Subordinated Debt Documents or prepay, redeem or repurchase (or offer to
prepay, redeem or repurchase) any of the Subordinated Debt; provided, however,
the Company shall be permitted to use any Net Cash Proceeds received from its
Initial Public Offering and subsequent public offerings of its capital stock
which it is not otherwise required pursuant to the terms of the Credit Agreement
to apply to the repayment of the Revolving Credit Loans and the reduction of the
Total Commitment pursuant to ss.3.2 hereof to prepay, redeem and repurchase the
Subordinated Debt so long as no Default or Event of Default has occurred and is
continuing or would occur as a result thereof.
9.9. Employee Benefit Plans. Neither the Borrowers nor any ERISA
Affiliate will
(a) engage in any "prohibited transaction" within the meaning
of ss.406 of ERISA or ss.4975 of the Code which could reasonably be
expected to result in a material liability for the Borrower or any of
its Subsidiaries; or
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(b) permit any Guaranteed Pension Plan to incur an
"accumulated funding deficiency", as such term is defined in ss.302 of
ERISA, whether or not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an
extent which, or terminate any Guaranteed Pension Plan in a manner
which, could reasonably be expected to result in the imposition of a
lien or encumbrance on the assets of the Borrower or any of its
Subsidiaries pursuant to ss.302(f) or ss.4068 of ERISA; or
(d) amend any Guaranteed Pension Plan in circumstances
requiring the posting of security pursuant to ss.307 of ERISA or
ss.401(a)(29) of the Code; or
(e) permit or take any action which would result in the
aggregate benefit liabilities (with the meaning of ss.4001 of ERISA) of
all Guaranteed Pension Plans exceeding the value of the aggregate
assets of such Plans, disregarding for this purpose the benefit
liabilities and assets of any such Plan with assets in excess of
benefit liabilities.
9.10. Business Activities. The Borrowers will not, and will not permit
any of their Subsidiaries to, engage directly or indirectly (whether through
Subsidiaries or otherwise) in any type of business other than the businesses
conducted by them on the Closing Date or businesses conducted by subjects of
Permitted Acquisitions and in related businesses.
9.11. Fiscal Year. The Borrowers will not, and will not permit any of
their Subsidiaries to, change the date of the end of its fiscal year from that
set forth in ss.7.4.1.
9.12. Transactions with Affiliates. The Borrowers will not, and will
not permit any of their Subsidiaries to, engage in any transaction with any
Affiliate (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any such
Affiliate or, to the knowledge of the Borrowers, any corporation, partnership,
trust or other entity in which any such Affiliate has a substantial interest or
is an officer, director, trustee or partner, on terms more favorable to such
Person than would have been obtainable on an arm's-length basis in the ordinary
course of business.
9.13. Modification of Documents and Charter. Neither the Borrowers nor
any of their Subsidiaries will consent to or agree to any amendment, supplement
or other modification to the Transaction Documents, the Stockholders Agreement
or the Management Agreement without the prior written consent of the Agent
unless such amendment, supplement or modification would not have any material
adverse effect on the Agent's or the Banks' rights under the Loan Documents or
the Borrowers' or any of their Subsidiaries' obligations under the Loan
Documents. In
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addition, neither the Borrowers nor any of their Subsidiaries will consent to or
agree to any amendment, supplement or modification to the Offering Documents, or
amend or permit to be amended its certificate of incorporation or bylaws, or
similar organizational documents unless such change or amendment would not have
any material adverse effect on the Agent's or the Banks' rights under the Loan
Documents or the Borrowers' or any of their Subsidiaries' obligations under the
Loan Documents.
9.14. Upstream Limitations. Neither the Borrowers nor any of their
Subsidiaries will enter into, or permit any of their Subsidiaries to enter into,
any agreement, contract or arrangement (other than the Credit Agreement and the
other Loan Documents) restricting the ability of any Subsidiary to pay or make
dividends or distributions in cash or kind, to make loans, advances or other
payments of whatsoever nature or to make transfers or distributions of all or
any part of its assets to any Borrower or any Guarantor.
9.15. Inconsistent Agreements. Neither the Borrowers nor any of their
Subsidiaries will, nor will they permit their Subsidiaries to, enter into any
agreement containing any provision which would be violated or breached by the
performance by such Borrower or such Subsidiary of its obligations hereunder or
under any of the Loan Documents.
9.16. Senior Debt. The Company and its Subsidiaries will not (a) in any
manner designate or permit to exist any other Indebtedness of the Company or any
of its Subsidiaries as "Designated Senior Debt" for purposes (and as defined in)
of the Subordinated Indenture, other than the Indebtedness arising under this
Credit Agreement and the Guaranty, or (b) incur or permit to exist any "Senior
Debt" as such term is defined in the Subordinated Indenture, other than the
Indebtedness arising or permitted under this Credit Agreement and the Guaranty
and the other Obligations.
9.17. Limitations on Foreign Exchange Arrangements. The Company will
not and will not permit any of its Subsidiaries to enter into any interest rate
hedging or risk protection arrangements, foreign exchange risk protection
arrangements, or currency risk protection arrangements which are not in the
ordinary course of business or are for speculative purposes.
10. FINANCIAL COVENANTS OF THE BORROWERS.
Each of the Borrowers covenants and agrees that, so long as any
Revolving Credit Loan, Unpaid Reimbursement Obligation, Letter of Credit or
Revolving Credit Note or loan account is outstanding or any Bank has any
obligation to make any Revolving Credit Loans or the Agent has any obligation to
issue, extend or renew any Letters of Credit:
10.1. Leverage Ratio. The Borrowers will not at any time during the
period described in the table set forth below, permit the Leverage Ratio to
exceed the ratio set forth opposite such period in such table:
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Period Ratio
------ -----
Closing Date - March 30, 1999 6.00:1.00
-------------------------------------------------------
any time thereafter 5.50:1.00
-------------------------------------------------------
10.2. Interest Coverage Ratio. The Borrowers will not, as of the end of
any fiscal quarter ending on any date or during any period described in the
table set forth below, permit the Interest Coverage Ratio to be less than the
ratio set forth opposite such period in such table:
Period Ratio
------ -----
Closing Date - December 31, 1998 1.75:1.00
-------------------------------------------------------
January 1, 1999 - December 31, 1999 1.95:1.00
-------------------------------------------------------
any fiscal quarter ending thereafter 2.15:1.00
-------------------------------------------------------
10.3. Fixed Charge Coverage Ratio. The Borrowers will not, as of the
end of any fiscal quarter ending on any date or during any period described in
the table set forth below, permit the Fixed Charge Coverage Ratio to be less
than the ratio set forth opposite such period in such table:
Period Ratio
------ -----
Closing Date - December 31, 1998 1.05:1.00
-------------------------------------------------------
January 1, 1999 - December 31, 1999 1.10:1.00
-------------------------------------------------------
any fiscal quarter ending thereafter 1.20:1.00
-------------------------------------------------------
10.4. Capital Expenditures. The Borrowers will not make, or permit any
Subsidiary of such Borrower to make, Capital Expenditures (other than Capital
Expenditures consisting of Permitted Acquisitions) in any fiscal year that
exceed, in the aggregate, $10,000,000 for such fiscal year; provided, however,
fifty percent (50%) of Capital Expenditures not spent in a given year may be
carried over and added to the Capital Expenditures permitted only for the
immediately following year (after first utilizing the amount of Capital
Expenditures permitted for such fiscal year), each such carry over not to exceed
one year.
11. CLOSING CONDITIONS.
The obligations of the Banks to make the initial Revolving Credit Loans
to the Company and of the Agent to issue any initial Letters of Credit for the
account of the Company shall be subject to the satisfaction of the following
conditions precedent (other than ss.11.21) on or prior to November 26, 1997, and
the obligations of the Banks to make the initial Revolving Credit Loans to the
Subsidiary Borrowers and of the Agent to issue any initial Letters of Credit for
the account of any Subsidiary Borrower shall be subject to the following
conditions precedent (including, without limitation, ss.11.21) on or prior to
December 15, 1997:
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11.1. Loan Documents, etc..
11.1.1. Loan Documents. Each of the Loan Documents other than
the Foreign Security Documents shall have been duly executed and
delivered by the respective parties thereto, shall be in full force and
effect and shall be in form and substance satisfactory to each of the
Banks. Each Bank shall have received a fully executed copy of each such
document.
11.1.2. Subordination Documents. Each of the Offering
Documents and the Subordinated Debt Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in
full force and effect and shall be in form and substance satisfactory
to each of the Banks. Each Bank shall have received a fully executed
copy of each such document.
11.1.3. Transaction Documents. Each of the Transaction
Documents shall have been duly executed and delivered by the respective
parties thereto, shall be in full force and effect and shall be in form
and substance satisfactory to each of the Banks. Each Bank shall have
received a fully executed copy of each such document.
11.2. Certified Copies of Charter Documents. Each of the Banks shall
have received from the Company and each of its Subsidiaries a copy, certified by
a duly authorized officer of such Person to be true and complete on the Closing
Date, of each of (a) its charter or other incorporation documents as in effect
on such date of certification, and (b) its by-laws as in effect on such date.
11.3. Corporate Action. All corporate action necessary for the valid
execution, delivery and performance by the Borrowers and each of their
Subsidiaries of this Credit Agreement and the other Loan Documents to which it
is or is to become a party shall have been duly and effectively taken, and
evidence thereof satisfactory to the Banks shall have been provided to each of
the Banks.
11.4. Incumbency Certificate. Each of the Banks shall have received
from each of the Borrowers and each of the Guarantors an incumbency certificate,
dated as of the Closing Date, signed by a duly authorized officer of such
Borrower or such Guarantor, and giving the name and bearing a specimen signature
of each individual who shall be authorized: (a) to sign, in the name and on
behalf of each of such Borrower or such Guarantor, each of the Loan Documents to
which such Borrower or such Guarantor is or is to become a party; (b) in the
case of the Borrowers, to make Loan Requests and Conversion Requests and, in the
case of the Company, to apply for Letters of Credit; and (c) to give notices and
to take other action on its behalf under the Loan Documents.
11.5. Validity of Liens. The Security Documents other than the Foreign
Security Documents shall be effective to create in favor of the Agent a legal,
valid and enforceable first (except for Permitted Liens entitled to priority
under applicable law) security interest in and lien upon the Collateral. All
filings, recordings, deliveries of instruments and other actions necessary or
desirable in the
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opinion of the Agent to protect and preserve such security interests shall have
been duly effected. The Agent shall have received evidence thereof in form and
substance satisfactory to the Agent.
11.6. Perfection Certificates and UCC Search Results. The Agent shall
have received from each of the Borrowers and the Guarantors a completed and
fully executed Perfection Certificate and the results of UCC searches with
respect to the Collateral, indicating no liens other than Permitted Liens and
otherwise in form and substance satisfactory to the Agent.
11.7. Landlord Consents. The Company and its Subsidiaries shall have
delivered to the Agent all landlord consents as the Agent may request.
11.8. Certificates of Insurance. The Agent shall have received (a) a
certificate of insurance from an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance limits, and
policy terms, and otherwise describing the insurance obtained in accordance with
the provisions of the Security Agreements and (b) certified copies of all
policies evidencing such insurance (or certificates therefore signed by the
insurer or an agent authorized to bind the insurer).
11.9. Hazardous Waste Assessments. The Agent shall have received
hazardous waste site assessments from environmental engineers and in form and
substance satisfactory to the Agent, covering all Real Estate and all other real
property in respect of which any Borrower or any of its Subsidiaries may have
material liability, whether contingent or otherwise, for dumping or disposal of
Hazardous Substances.
11.10. Solvency Opinion. Each of the Banks shall have received a copy
of an opinion from Valuation Research dated not less than three (3) days prior
to the Closing Date, describing in detail the solvency of the Company and its
Subsidiaries after the consummation of the transactions contemplated herein and
in form and substances satisfactory to the Banks.
11.11. Opinion of Counsel. Each of the Banks and the Agent shall have
received a favorable legal opinion addressed to the Banks and the Agent, dated
as of the Closing Date, in form and substance satisfactory to the Banks and the
Agent, from Posternak, Blankstein & Lund, L.L.P., counsel to the Company and its
Subsidiaries.
11.12. Payment of Fees. The Company shall have paid to the Banks or the
Agent, as appropriate, the closing fees and the Agent's Fee as contemplated by
the Fee Letter.
11.13. Payoff Letter. The Agent shall have received appropriate payoff
letters, termination letters and collateral discharges in form and substance
satisfactory to the Agent from holders of existing Indebtedness of the Borrowers
and their Subsidiaries not otherwise permitted hereunder.
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11.14. Disbursement Instructions. The Agent shall have received
disbursement instructions from the Company with respect to the proceeds of the
initial Revolving Credit Loan.
11.15. Completion of Transaction. The Agent shall have received
evidence that all of the closing conditions in the Transaction Documents have
been satisfied and the Transaction shall have been completed pursuant to the
Transaction Documents and otherwise on terms and conditions that are reasonably
satisfactory to the Agent in all respects. The purchase price of the assets and
business acquired pursuant to the Transaction (including the redemption by the
Company of its capital stock) and all expenditures and transaction costs
associated therewith shall not exceed $190,000,000 in the aggregate.
11.16. Capitalization. The Agent and the Banks shall have received
evidence satisfactory to the Agent and the Banks that (a) the Company shall have
received an equity investment of not less than $35,000,000 constituted by a cash
investment of not less than $26,215,000 from Holmes Acquisition and its
assignees and the balance being the value of stock retained by existing
stockholders, in each case on terms and conditions which are satisfactory to the
Agent in all respects and (b) the Company shall have received the gross proceeds
from the Subordinated Notes in an aggregate amount of not less than
$100,000,000.
11.17. Consents and Approvals. The Agent shall have received evidence
that all consents and approvals necessary to complete the Transaction and all
transactions contemplated hereby have been obtained.
11.18. Closing Date EBITDA. The Company shall provide the Agent with
evidence satisfactory to the Agent that the Leverage Ratio on the Closing Date
(after giving effect to all amounts to be borrowed on the Closing Date) is not
greater than 6.00:1.00.
11.19. Availability. The Agent shall have received evidence that on the
Closing Date, after giving effect to the transactions contemplated hereby
(including, without limitation, after giving effect to all borrowings under the
Credit Agreement), the Borrowers will have unused availability under the Credit
Agreement of not less than $10,000,000.
11.20. Designation of Senior Debt. The Agent shall have received
evidence that the Company and the Agent have taken all necessary action under
the Subordinated Indenture to designate the Obligations as "Designated Senior
Debt".
11.21. Conditions to Funding to Subsidiary Borrowers. Each of the
following shall have been satisfied: (a) each of the Foreign Security Documents
shall have been duly executed and delivered by the respective parties thereto,
shall be in full force and effect and shall be in form and substance
satisfactory to each of the Banks, and each Bank shall have received a fully
executed copy of each such document; (b) the Foreign Security Documents shall be
effective to create in favor of the Agent a legal, valid and enforceable first
(except for Permitted Liens entitled to
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priority under applicable law) security interest in and lien upon the
Collateral, and all filings, recordings, deliveries of instruments and other
actions necessary or desirable in the opinion of the Agent to protect and
preserve such security interests shall have been duly effected, with the Agent
having received evidence thereof in form and substance satisfactory to the
Agent; and (c) each of the Banks and the Agent shall have received a favorable
legal opinion addressed to the Banks and the Agent, dated as of the Closing
Date, in form and substance satisfactory to the Banks and the Agent from Messrs.
David Y.W. Ho and Co. and Messrs. McKenney, Bancroft & Hughes, local counsel to
the Subsidiary Borrowers.
12. CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Revolving Credit Loan and of
the Agent to issue, extend or renew any Letter of Credit, in each case whether
on or after the Closing Date, shall also be subject to the satisfaction of the
following conditions precedent:
12.1. Representations True; No Event of Default. Each of the
representations and warranties of any of the Borrowers and its Subsidiaries
contained in this Credit Agreement, the other Loan Documents or in any document
or instrument delivered pursuant to or in connection with this Credit Agreement
shall be true as of the date as of which they were made and shall also be true
at and as of the time of the making of such Revolving Credit Loan or the
issuance, extension or renewal of such Letter of Credit, with the same effect as
if made at and as of that time (except to the extent of changes resulting from
transactions contemplated or permitted by this Credit Agreement and the other
Loan Documents and changes occurring in the ordinary course of business that
singly or in the aggregate are not materially adverse to the Company and its
Subsidiaries taken as a whole, and to the extent that such representations and
warranties relate expressly to an earlier date) and no Default or Event of
Default shall have occurred and be continuing.
12.2. No Legal Impediment. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Bank would make it illegal for such Bank to make such Revolving Credit
Loan or to participate in the issuance, extension or renewal of such Letter of
Credit or in the reasonable opinion of the Agent would make it illegal for the
Agent to issue, extend or renew such Letter of Credit.
12.3. Governmental Regulation. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
12.4. Proceedings and Documents. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
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all other documents incident thereto shall be satisfactory in substance and in
form to the Banks and to the Agent and the Agent's Special Counsel, and the
Banks, the Agent and such counsel shall have received all information and such
counterpart originals or certified or other copies of such documents as the
Agent may reasonably request.
12.5. Exchange Limitations. There exists no reason whatsoever,
including without limitation, by reason of the application of any so-called
"currency exchange" laws or regulations (as in effect at the time of any
proposed borrowing hereunder) which could reasonably be expected to interfere
with any Borrower satisfying any of its Obligations hereunder in full at such
time as such Obligations become due and payable pursuant to the terms hereof.
13. EVENTS OF DEFAULT; ACCELERATION; ETC.
13.1. Events of Default and Acceleration. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:
(a) any Borrower shall fail to pay any principal of the
Revolving Credit Loans or any Reimbursement Obligation when the same
shall become due and payable, whether at the stated date of maturity or
any accelerated date of maturity or at any other date fixed for
payment;
(b) any Borrower shall fail to pay any interest on the
Revolving Credit Loans, the commitment fee, any Letter of Credit Fee,
the Agent's Fee, or other sums due hereunder or under any of the other
Loan Documents, when the same shall become due and payable, whether at
the stated date of maturity or any accelerated date of maturity or at
any other date fixed for payment, and such failure shall continue for
three (3) days;
(c) any Borrower shall fail to comply with any of its
covenants contained in ss.ss.8.1-8.4, 8.5.1, 8.7, 8.9, 8.10-8.12,
8.15-8.17, 9.1-9.6, 9.8, 9.10-9.17 or 10;
(d) any Borrower or any of its Subsidiaries shall fail to
perform any term, covenant or agreement contained herein or in any of
the other Loan Documents (other than those specified elsewhere in this
ss.13.1) for thirty (30) days after written notice of such failure has
been given to the Borrower by the Agent;
(e) any representation or warranty of any Borrower or any of
its Subsidiaries in this Credit Agreement or any of the other Loan
Documents or in any of the Transaction Documents or the Offering
Documents or in any other document or instrument delivered pursuant to
or in connection with this Credit Agreement or any of the other Loan
Documents, or any of the Transaction Documents or the Offering
Documents shall prove to have been
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false in any material respect upon the date when made or deemed to have
been made or repeated;
(f) any Borrower or any of its Subsidiaries shall fail to pay
at maturity, or within any applicable period of grace, any obligation
for borrowed money or credit received or in respect of any Capitalized
Leases in an aggregate amount in excess of $2,000,000, or fail to
observe or perform any material term, covenant or agreement contained
in any agreement by which it is bound, evidencing or securing borrowed
money or credit received or in respect of any Capitalized Leases in an
aggregate amount in excess of $2,000,000 for such period of time as
would permit (assuming the giving of appropriate notice if required)
the holder or holders thereof or of any obligations issued thereunder
to accelerate the maturity thereof;
(g) any Borrower or any of its Subsidiaries shall make an
assignment for the benefit of creditors, or admit in writing its
inability to pay or generally fail to pay its debts as they mature or
become due, or shall petition or apply for the appointment of a trustee
or other custodian, liquidator or receiver of any Borrower or any of
its Subsidiaries or of any substantial part of the assets of any
Borrower or any of its Subsidiaries or shall commence any case or other
proceeding relating to any Borrower or any of its Subsidiaries under
any bankruptcy, reorganization, arrangement, insolvency, readjustment
of debt, dissolution or liquidation or similar law of any jurisdiction,
now or hereafter in effect, or shall take any action to authorize or in
furtherance of any of the foregoing, or if any such petition or
application shall be filed or any such case or other proceeding shall
be commenced against any Borrower or any of its Subsidiaries and such
Borrower or any of its Subsidiaries shall indicate its approval
thereof, consent thereto or acquiescence therein or such petition or
application shall not have been dismissed within forty-five (45) days
following the filing thereof;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating any Borrower or any
of its Subsidiaries bankrupt or insolvent, or approving a petition in
any such case or other proceeding, or a decree or order for relief is
entered in respect of any Borrower or any Subsidiary of such Borrower
in an involuntary case under federal bankruptcy laws as now or
hereafter constituted;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any
final judgment against any Borrower or any of its Subsidiaries that,
with other outstanding final judgments, undischarged, against such
Borrower or any of its Subsidiaries exceeds in the aggregate
$1,000,000;
(j) the holders of all or any part of the Subordinated Debt
shall accelerate the maturity of all or any part of the Subordinated
Debt or, except
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as expressly permitted by ss.9.8, the Subordinated Debt shall be (or
shall be required at such time to be) prepaid, redeemed or repurchased
in whole or in part; or the Company or any of its Subsidiaries shall be
or become required under the Subordinated Indenture to prepay, redeem
or repurchase (or shall be or become required thereunder to offer to
prepay, redeem or repurchase) all or any part of the Subordinated Debt;
(k) if any of the Loan Documents shall be cancelled,
terminated, revoked or rescinded or the Agent's security interests,
mortgages or liens in a substantial portion of the Collateral shall
cease to be perfected, or shall cease to have the priority contemplated
by the Security Documents, in each case otherwise than in accordance
with the terms thereof or with the express prior written agreement,
consent or approval of the Banks, or any action at law, suit or in
equity or other legal proceeding to cancel, revoke or rescind any of
the Loan Documents shall be commenced by or on behalf of any Borrower
or any of its Subsidiaries party thereto or any of their respective
stockholders, or any court or any other governmental or regulatory
authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to the
effect that, any one or more of the Loan Documents is illegal, invalid
or unenforceable in accordance with the terms thereof;
(l) any Borrower or any of its Subsidiaries incurs any
liability to the PBGC or a Guaranteed Pension Plan pursuant to Title IV
of ERISA in an aggregate amount exceeding $1,000,000, or any Borrower
or any of its Subsidiaries is assessed withdrawal liability pursuant to
Title IV of ERISA by a Multiemployer Plan requiring aggregate annual
payments exceeding $1,000,000, or any of the following occurs with
respect to a Guaranteed Pension Plan: (i) an ERISA Reportable Event, a
failure to make a required installment or other payment (within the
meaning of ss.302(f)(1) of ERISA), an ERISA Affiliate incurs any
liability to the PBGC or a Guaranteed Pension Plan pursuant to Title IV
of ERISA or is assessed withdrawal liability pursuant to Title IV of
ERISA, provided that the Agent determines in its reasonable discretion
that such event (A) could reasonably be expected to result in liability
of the Borrowers or any of their Subsidiaries to the PBGC or such
Guaranteed Pension Plan in an aggregate amount exceeding $1,000,000 and
(B) could constitute grounds for the termination of such Guaranteed
Pension Plan by the PBGC, for the appointment by the appropriate United
States District Court of a trustee to administer such Guaranteed
Pension Plan or for the imposition of a lien in favor of such
Guaranteed Pension Plan; or (ii) the appointment by a United States
District Court of a trustee to administer such Guaranteed Pension Plan;
or (iii) the institution by the PBGC of proceedings to terminate such
Guaranteed Pension Plan;
(m) any Borrower or any of its Subsidiaries shall be enjoined,
restrained or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting any material part
of its
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business and such order shall continue in effect for more than thirty
(30) days;
(n) there shall occur any material damage to, or loss, theft
or destruction of, any Collateral, whether or not insured, or any
strike, lockout, labor dispute, embargo, condemnation, act of God or
public enemy, or other casualty, which in any such case causes, for
more than fifteen (15) consecutive days, the cessation or substantial
curtailment of revenue producing activities at any facility of any
Borrower or any of its Subsidiaries if such event or circumstance is
not covered by business interruption insurance and would have a
Material Adverse Effect;
(o) there shall occur the loss, suspension or revocation of,
or failure to renew, any license or permit now held or hereafter
acquired by any Borrower or any of its Subsidiaries if such loss,
suspension, revocation or failure to renew would have a Material
Adverse Effect;
(p) the Company shall at any time, legally or beneficially own
less than (i) 100% of the capital stock of each of its Subsidiaries
existing on the Closing Date, or (ii) the greater of (1) 80% of that
portion of the capital stock of any Subsidiary acquired or formed after
the Closing Date which the Company owned on the date of such
acquisition or formation, and (2) 51% of the capital stock of such
Subsidiary;
(q) a Change of Control (as such term is defined in the
Subordinated Indenture) occurs; or
(r) prior to the Initial Public Offering, the Principals shall
at any time, legally or beneficially own less than 51% of the capital
stock of the Company, as adjusted pursuant to any stock split, stock
dividend or recapitalization or reclassification of the capital of the
Company and after the Initial Public Offering, any person or group of
persons (within the meaning of Section 13 or 14 of the Securities
Exchange Act of 1934, as amended) other than the Principals shall have
acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under said Act)
of twenty five percent (25%) or more of the outstanding shares of
common stock of the Company or, at any time, more than a majority of
the members of the Board of Directors of the Company are not Continuing
Directors.
then, and in any such event, so long as the same may be continuing, the Agent,
upon the request of the Majority Banks shall, by notice in writing to the
Company declare all amounts owing with respect to this Credit Agreement, the
Revolving Credit Notes and the other Loan Documents and all Reimbursement
Obligations to be, and they shall thereupon forthwith become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Borrowers; provided that in the
event of any Event of Default specified in ss.ss.13.1(g), 13.1(h) or 13.1(j),
all such amounts shall become
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immediately due and payable automatically and without any requirement of notice
from the Agent or any Bank.
13.2. Termination of Commitments. If any one or more of the Events of
Default specified in ss.13.1(g), ss.13.1(h) or ss.13.1(j) shall occur, any
unused portion of the credit hereunder shall forthwith terminate and each of the
Banks shall be relieved of all further obligations to make Revolving Credit
Loans to the Borrowers and the Agent shall be relieved of all further
obligations to issue, extend or renew Letters of Credit. If any other Event of
Default shall have occurred and be continuing, or if on any Drawdown Date or
other date for issuing, extending or renewing any Letter of Credit the
conditions precedent to the making of the Revolving Credit Loans to be made on
such Drawdown Date or (as the case may be) to issuing, extending or renewing
such Letter of Credit on such other date are not satisfied, the Agent, upon the
request of the Majority Banks, shall, by notice to the Company, terminate the
unused portion of the credit hereunder, and upon such notice being given such
unused portion of the credit hereunder shall terminate immediately and each of
the Banks shall be relieved of all further obligations to make Revolving Credit
Loans and the Agent shall be relieved of all further obligations to issue,
extend or renew Letters of Credit. No termination of the credit hereunder shall
relieve the Borrowers or any of their Subsidiaries of any of the Obligations.
13.3. Remedies. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Revolving Credit Loans pursuant to ss.13.1, each
Bank, if owed any amount with respect to the Revolving Credit Loans or the
Reimbursement Obligations, may, with the consent of the Majority Banks but not
otherwise, proceed to protect and enforce its rights by suit in equity, action
at law or other appropriate proceeding, whether for the specific performance of
any covenant or agreement contained in this Credit Agreement and the other Loan
Documents or any instrument pursuant to which the Obligations to such Bank are
evidenced, including as permitted by applicable law the obtaining of the ex
parte appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Bank. No remedy herein conferred upon any Bank
or the Agent or the holder of any Revolving Credit Note or loan account or
purchaser of any Letter of Credit Participation is intended to be exclusive of
any other remedy and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute or any other provision of law.
13.4. Exchange Rate. If, for the purpose of obtaining judgment in any
court or obtaining an order enforcing a judgment, it becomes necessary for any
Bank to convert any amount due to such Bank under this Credit Agreement in
Dollars or in any other currency (hereinafter in this ss.13.4 called the "first
currency") into any other currency (hereinafter in this ss.13.4 called the
"second currency"), then the conversion shall be made at such Bank's spot rate
of exchange for buying the first
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currency with the second currency prevailing at such Bank's close of business on
the Business Day next preceding the day on which the judgment is given or (as
the case may be) the order is made. Any payment made to any Bank pursuant to
this Credit Agreement in the second currency shall constitute a discharge of the
obligations of the respective Borrower to pay to such Bank any amount originally
due to such Bank in the first currency under this Credit Agreement only to the
extent of the amount of the first currency which such Bank is able, on the date
of the actual receipt by it of such payment in any second currency, to purchase,
in accordance with such Bank's normal banking procedures, with the amount of
such second currency so received. If the amount of the first currency falls
short of the amount originally due to such Bank in the first currency under this
Credit Agreement, the Borrowers hereby agree that they will indemnify such Bank
against and save such Bank harmless from any shortfall so arising. This
indemnity shall constitute an obligation of such Borrower separate and
independent from the other obligations contained in this Credit Agreement, shall
give rise to a separate and independent cause of action and shall continue in
full force and effect notwithstanding any judgment or order for a liquidated sum
or sums in respect of amounts due to such Bank under this Credit Agreement or
under any such judgment or order. Any such shortfall shall be deemed to
constitute a loss suffered by such Bank and the Borrowers shall not be entitled
to require any proof or evidence of any actual loss. The covenant contained in
this ss.13.4 shall survive the payment in full of all of the other obligations
of the Borrowers under this Credit Agreement.
13.5. Distribution of Collateral Proceeds. In the event that, following
the occurrence or during the continuance of any Default or Event of Default, the
Agent or any Bank, as the case may be, receives any monies in connection with
the enforcement of any the Security Documents, or otherwise with respect to the
realization upon any of the Collateral, such monies shall be distributed for
application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Agent in connection with the collection of such monies
by the Agent, for the exercise, protection or enforcement by the Agent
of all or any of the rights, remedies, powers and privileges of the
Agent under this Credit Agreement or any of the other Loan Documents or
in respect of the Collateral or in support of any provision of adequate
indemnity to the Agent against any taxes or liens which by law shall
have, or may have, priority over the rights of the Agent to such
monies;
(b) Second, to all other Obligations in such order or
preference as the Majority Banks may determine; provided, however, that
(i) distributions shall be made (A) pari passu among Obligations with
respect to the Agent's fee payable pursuant to ss.5.2 and all other
Obligations and (B) with respect to each type of Obligation owing to
the Banks, such as interest, principal, fees and expenses, among the
Banks pro rata in accordance with each Bank's
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Commitment Percentage, and (ii) the Agent may in its reasonable
discretion make proper allowance to take into account any Obligations
not then due and payable;
(c) Third, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Banks and the Agent
of all of the Obligations, to the payment of any obligations required
to be paid pursuant to ss.9-504(1)(c) of the Uniform Commercial Code of
the Commonwealth of Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the
Borrowers or to such other Persons as are entitled thereto.
14. SETOFF.
Regardless of the adequacy of any collateral, during the continuance of
any Event of Default, any deposits or other sums credited by or due from any of
the Banks to any Borrower and any securities or other property of any Borrower
in the possession of such Bank may be applied to or set off by such Bank against
the payment of Obligations and any and all other liabilities, direct, or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of any Borrower to such Bank. Each of the Banks agrees with
each other Bank that (a) if an amount to be set off is to be applied to
Indebtedness of any Borrower to such Bank, other than Indebtedness evidenced by
the Revolving Credit Notes or loan accounts held by such Bank or constituting
Reimbursement Obligations owed to such Bank, such amount shall be applied
ratably to such other Indebtedness and to the Indebtedness evidenced by all such
Revolving Credit Notes and loan accounts held by such Bank or constituting
Reimbursement Obligations owed to such Bank, and (b) if such Bank shall receive
from any Borrower, whether by voluntary payment, exercise of the right of
setoff, counterclaim, cross action, enforcement of the claim evidenced by the
Revolving Credit Notes or loan accounts held by, or constituting Reimbursement
Obligations owed to, such Bank by proceedings against such Borrower at law or in
equity or by proof thereof in bankruptcy, reorganization, liquidation,
receivership or similar proceedings, or otherwise, and shall retain and apply to
the payment of the Revolving Credit Note, Revolving Credit Notes or loan
accounts held by, or Reimbursement Obligations owed to, such Bank any amount in
excess of its ratable portion of the payments received by all of the Banks with
respect to the Revolving Credit Notes or loan accounts held by, and
Reimbursement Obligations owed to, all of the Banks, such Bank will make such
disposition and arrangements with the other Banks with respect to such excess,
either by way of distribution, pro tanto assignment of claims, subrogation or
otherwise as shall result in each Bank receiving in respect of the Revolving
Credit Notes and loan accounts held by it or Reimbursement obligations owed it,
its proportionate payment as contemplated by this Credit Agreement; provided
that if all or any part of such excess payment is thereafter recovered from such
Bank, such disposition and arrangements shall be rescinded and the amount
restored to the extent of such recovery, but without interest.
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15. THE AGENT.
15.1. Authorization.
(a) The Agent is authorized to take such action on behalf of
each of the Banks and to exercise all such powers as are hereunder and
under any of the other Loan Documents and any related documents
delegated to the Agent, together with such powers as are reasonably
incident thereto, provided that no duties or responsibilities not
expressly assumed herein or therein shall be implied to have been
assumed by the Agent.
(b) The relationship between the Agent and each of the Banks
is that of an independent contractor. The use of the term "Agent" is
for convenience only and is used to describe, as a form of convention,
the independent contractual relationship between the Agent and each of
the Banks. Nothing contained in this Credit Agreement nor the other
Loan Documents shall be construed to create an agency, trust or other
fiduciary relationship between the Agent and any of the Banks.
(c) As an independent contractor empowered by the Banks to
exercise certain rights and perform certain duties and responsibilities
hereunder and under the other Loan Documents, the Agent is nevertheless
a "representative" of the Banks, as that term is defined in Article 1
of the Uniform Commercial Code, for purposes of actions for the benefit
of the Banks and the Agent with respect to all collateral security and
guaranties contemplated by the Loan Documents. Such actions include the
designation of the Agent as "secured party", "mortgagee" or the like on
all financing statements and other documents and instruments, whether
recorded or otherwise, relating to the attachment, perfection, priority
or enforcement of any security interests, mortgages or deeds of trust
in collateral security intended to secure the payment or performance of
any of the Obligations, all for the benefit of the Banks and the Agent.
15.2. Employees and Agents. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
rights and duties under this Credit Agreement and the other Loan Documents. The
Agent may utilize the services of such Persons as the Agent in its sole
discretion may reasonably determine, and all reasonable fees and expenses of any
such Persons shall be paid by the Borrowers.
15.3. No Liability. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment
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whatsoever, except that the Agent or such other Person, as the case may be, may
be liable for losses due to its willful misconduct or gross negligence.
15.4. No Representations.
15.4.1. General. The Agent shall not be responsible for the
execution or validity or enforceability of this Credit Agreement, the
Revolving Credit Notes, the loan accounts the Letters of Credit, any of
the other Loan Documents or any instrument at any time constituting, or
intended to constitute, collateral security for the Revolving Credit
Notes and loan accounts, or for the value of any such collateral
security or for the validity, enforceability or collectability of any
such amounts owing with respect to the Revolving Credit Notes and loan
accounts, or for any recitals or statements, warranties or
representations made herein or in any of the other Loan Documents or in
any certificate or instrument hereafter furnished to it by or on behalf
of any Borrower or any of its Subsidiaries, or be bound to ascertain or
inquire as to the performance or observance of any of the terms,
conditions, covenants or agreements herein or in any instrument at any
time constituting, or intended to constitute, collateral security for
the Revolving Credit Notes and loan accounts or to inspect any of the
properties, books or records of the Borrower or any of its
Subsidiaries. The Agent shall not be bound to ascertain whether any
notice, consent, waiver or request delivered to it by any Borrower or
any holder of any of the Revolving Credit Notes or loan accounts shall
have been duly authorized or is true, accurate and complete. The Agent
has not made nor does it now make any representations or warranties,
express or implied, nor does it assume any liability to the Banks, with
respect to the credit worthiness or financial conditions of the
Borrowers or any of their Subsidiaries. Each Bank acknowledges that it
has, independently and without reliance upon the Agent or any other
Bank, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into
this Credit Agreement.
15.4.2. Closing Documentation, etc. For purposes of
determining compliance with the conditions set forth in ss.11, each
Bank that has executed this Credit Agreement shall be deemed to have
consented to, approved or accepted, or to be satisfied with, each
document and matter either sent, or reasonably made available, by the
Agent or BancBoston Securities Inc., as arranger to such Bank for
consent, approval, acceptance or satisfaction, or required thereunder
to be to be consent to or approved by or acceptable or satisfactory to
such Bank, unless an officer of the Agent or BancBoston Securities Inc.
active upon the Borrowers' account shall have received notice from such
Bank prior to the Closing Date specifying such Bank's objection thereto
and such objection shall not have been withdrawn by notice to the Agent
or BancBoston Securities Inc. to such effect on or prior to the Closing
Date.
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15.5. Payments.
15.5.1. Payments to Agent. A payment by any Borrower to the
Agent hereunder or any of the other Loan Documents for the account of
any Bank shall constitute a payment to such Bank. The Agent agrees
promptly to distribute to each Bank such Bank's pro rata share (in
accordance with such Bank's Commitment Percentage) of payments received
by the Agent for the account of the Banks except as otherwise expressly
provided herein or in any of the other Loan Documents.
15.5.2. Distribution by Agent. If in the opinion of the Agent
the distribution of any amount received by it in such capacity
hereunder, under the Revolving Credit Notes, loan accounts or under any
of the other Loan Documents might involve it in liability, it may
refrain from making distribution until its right to make distribution
shall have been adjudicated by a court of competent jurisdiction. If a
court of competent jurisdiction shall adjudge that any amount received
and distributed by the Agent is to be repaid, each Person to whom any
such distribution shall have been made shall either repay to the Agent
its proportionate share of the amount so adjudged to be repaid or shall
pay over the same in such manner and to such Persons as shall be
determined by such court.
15.5.3. Delinquent Banks. Notwithstanding anything to the
contrary contained in this Credit Agreement or any of the other Loan
Documents, any Bank that fails (a) to make available to the Agent its
pro rata share of any Revolving Credit Loan or to purchase any Letter
of Credit Participation or (b) to comply with the provisions of ss.14
with respect to making dispositions and arrangements with the other
Banks, where such Bank's share of any payment received, whether by
setoff or otherwise, is in excess of its pro rata share of such
payments due and payable to all of the Banks, in each case as, when and
to the full extent required by the provisions of this Credit Agreement,
shall be deemed delinquent (a "Delinquent Bank") and shall be deemed a
Delinquent Bank until such time as such delinquency is satisfied. A
Delinquent Bank shall be deemed to have assigned any and all payments
due to it from the Borrowers, whether on account of outstanding
Revolving Credit Loans, Unpaid Reimbursement Obligations, interest,
fees or otherwise, to the remaining nondelinquent Banks for application
to, and reduction of, their respective pro rata shares of all
outstanding Revolving Credit Loans and Unpaid Reimbursement
Obligations. The Delinquent Bank hereby authorizes the Agent to
distribute such payments to the nondelinquent Banks in proportion to
their respective pro rata shares of all outstanding Revolving Credit
Loans and Unpaid Reimbursement Obligations. A Delinquent Bank shall be
deemed to have satisfied in full a delinquency when and if, as a result
of application of the assigned payments to all outstanding Revolving
Credit Loans and Unpaid Reimbursement Obligations of the nondelinquent
Banks, the Banks' respective pro rata shares of all outstanding
Revolving Credit Loans and Unpaid Reimbursement
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Obligations have returned to those in effect immediately prior to such
delinquency and without giving effect to the nonpayment causing such
delinquency.
15.6. Holders of Revolving Credit Notes. The Agent may deem and treat
the payee of any Revolving Credit Note or the purchaser of any Letter of Credit
Participation as the absolute owner or purchaser thereof for all purposes hereof
until it shall have been furnished in writing with a different name by such
payee or by a subsequent holder, assignee or transferee.
15.7. Indemnity. The Banks ratably agree hereby to indemnify and hold
harmless the Agent and its affiliates from and against any and all claims,
actions and suits (whether groundless or otherwise), losses, damages, costs,
expenses (including any expenses for which the Agent or such affiliate has not
been reimbursed by the Borrowers as required by ss.16), and liabilities of every
nature and character arising out of or related to this Credit Agreement, the
Revolving Credit Notes, the loan accounts or any of the other Loan Documents or
the transactions contemplated or evidenced hereby or thereby, or the Agent's
actions taken hereunder or thereunder, except to the extent that any of the same
shall be directly caused by the Agent's willful misconduct or gross negligence.
15.8. Agent as Bank. In its individual capacity, BKB shall have the
same obligations and the same rights, powers and privileges in respect to its
Commitment and the Revolving Credit Loans made by it, and as the holder of any
of the Revolving Credit Notes, loan accounts and as the purchaser of any Letter
of Credit Participations, as it would have were it not also the Agent.
15.9. Resignation. The Agent may resign at any time by giving sixty
(60) days prior written notice thereof to the Banks and the Company. Upon any
such resignation, the Majority Banks shall have the right to appoint a successor
Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the Company.
If no successor Agent shall have been so appointed by the Majority Banks and
shall have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be a financial institution
having a rating of not less than A or its equivalent by Standard & Poor's
Corporation. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation, the provisions of this Credit
Agreement and the other Loan Documents shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Agent.
15.10. Notification of Defaults and Events of Default. Each Bank hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
it
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shall promptly notify the Agent thereof. The Agent hereby agrees that upon
receipt of any notice under this ss.15.10 it shall promptly notify the other
Banks of the existence of such Default or Event of Default.
15.11. Duties in the Case of Enforcement. In case one of more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have occurred, the Agent shall, if (a) so requested by
the Majority Banks and (b) the Banks have provided to the Agent such additional
indemnities and assurances against expenses and liabilities as the Agent may
reasonably request, proceed to enforce the provisions of the Security Documents
authorizing the sale or other disposition of all or any part of the Collateral
and exercise all or any such other legal and equitable and other rights or
remedies as it may have in respect of such Collateral. The Majority Banks may
direct the Agent in writing as to the method and the extent of any such sale or
other disposition, the Banks hereby agreeing to indemnify and hold the Agent,
harmless from all liabilities incurred in respect of all actions taken or
omitted in accordance with such directions, provided that the Agent need not
comply with any such direction to the extent that the Agent reasonably believes
the Agent's compliance with such direction to be unlawful or commercially
unreasonable in any applicable jurisdiction.
15.12. Duties of Documentation Agent. The parties hereto hereby
acknowledge and agree that the Documentation Agent shall have no duties or
obligations under this Credit Agreement.
16. EXPENSES AND INDEMNIFICATION.
16.1. Expenses. The Borrowers agree to pay (a) the reasonable costs of
producing and reproducing this Credit Agreement, the other Loan Documents and
the other agreements and instruments mentioned herein, (b) any taxes (including
any interest and penalties in respect thereto) payable by the Agent or any of
the Banks (other than taxes based upon the Agent's or any Bank's net income) on
or with respect to the transactions contemplated by this Credit Agreement (the
Borrowers hereby agreeing to indemnify the Agent and each Bank with respect
thereto), (c) the reasonable fees, expenses and disbursements of the Agent's
Special Counsel or any local counsel to the Agent incurred in connection with
the preparation, syndication, administration or interpretation of the Loan
Documents and other instruments mentioned herein, each closing hereunder, any
amendments, modifications, approvals, consents or waivers hereto or hereunder,
or the cancellation of any Loan Document upon payment in full in cash of all of
the Obligations or pursuant to any terms of such Loan Document for providing for
such cancellation, (d) the fees, expenses and disbursements of the Agent or any
of its affiliates incurred by the Agent or such affiliate in connection with the
preparation, syndication, administration or interpretation of the Loan Documents
and other instruments mentioned herein, including all title insurance premiums
and surveyor, engineering and appraisal charges, (v) all reasonable
out-of-pocket expenses (including without limitation reasonable attorneys' fees
and costs, which attorneys
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may be employees of any Bank or the Agent, and reasonable consulting,
accounting, appraisal, investment banking and similar professional fees and
charges) incurred by any Bank or the Agent in connection with (A) the
enforcement of or preservation of rights under any of the Loan Documents against
any Borrower or any of its Subsidiaries or the administration thereof after the
occurrence of a Default or Event of Default and (B) any litigation, proceeding
or dispute whether arising hereunder or otherwise, in any way related to any
Bank's or the Agent's relationship with the Borrowers or any of their
Subsidiaries and (vi) all reasonable fees, expenses and disbursements of any
Bank or the Agent incurred in connection with UCC searches, UCC filings or
mortgage (including intellectual property mortgage) recordings.
16.2. Indemnification. Each of the Borrowers agrees to indemnify and
hold harmless the Agent, its affiliates and the Banks from and against any and
all claims, actions and suits whether groundless or otherwise, and from and
against any and all liabilities, losses, damages and expenses of every nature
and character arising out of this Credit Agreement or any of the other Loan
Documents or the transactions contemplated hereby including, without limitation,
(a) any actual or proposed use by any Borrower or any of its Subsidiaries of the
proceeds of any of the Revolving Credit Loans or Letters of Credit, (ii) any
actual or alleged infringement of any patent, copyright, trademark, service mark
or similar right of the Company or any of its Subsidiaries comprised in the
Collateral, (iii) the Borrowers or any of their Subsidiaries entering into or
performing this Credit Agreement or any of the other Loan Documents or (iv) with
respect to the Borrowers and their Subsidiaries and their respective properties
and assets, the violation of any Environmental Law, the presence, disposal,
escape, seepage, leakage, spillage, discharge, emission, release or threatened
release of any Hazardous Substances or any action, suit, proceeding or
investigation brought or threatened with respect to any Hazardous Substances
(including, but not limited to, claims with respect to wrongful death, personal
injury or damage to property), in each case including, without limitation, the
reasonable fees and disbursements of counsel and allocated costs of internal
counsel incurred in connection with any such investigation, litigation or other
proceeding. In litigation, or the preparation therefor, the Banks and the Agent
and its affiliates shall each be entitled to select their own counsel and, in
addition to the foregoing indemnity, each of the Borrowers agrees to pay
promptly the reasonable fees and expenses of such counsel. If, and to the extent
that the obligations of the Borrowers under this ss.16.2 are unenforceable for
any reason, the each of the Borrowers hereby agrees to make the maximum
contribution to the payment in satisfaction of such obligations which is
permissible under applicable law.
16.3. Survival. The covenants contained in this ss.16 shall survive
payment or satisfaction in full of all other Obligations.
17. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
17.1. Sharing of Information with Section 20 Subsidiary. The Company
acknowledges that from time to time financial advisory, investment banking and
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other services may be offered or provided to the Company or one or more of its
Subsidiaries, in connection with this Credit Agreement or otherwise, by a
Section 20 Subsidiary. The Company, for itself and each of its Subsidiaries,
hereby authorizes (a) such Section 20 Subsidiary to share with the Agent and
each Bank any information delivered to such Section 20 Subsidiary by the
Borrower or any of its Subsidiaries, and (b) the Agent and each Bank to share
with such Section 20 Subsidiary any information delivered to the Agent or such
Bank by the Company or any of its Subsidiaries pursuant to this Credit
Agreement, or in connection with the decision of such Bank to enter into this
Credit Agreement; it being understood, in each case, that any such Section 20
Subsidiary receiving such information shall be bound by the confidentiality
provisions of this Credit Agreement. Such authorization shall survive the
payment and satisfaction in full of all of Obligations.
17.2. Confidentiality. Each of the Banks and the Agent agrees, on
behalf of itself and each of its affiliates, directors, officers, employees and
representatives, to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of the same nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by the Company or any of its Subsidiaries
pursuant to this Credit Agreement that is identified by such Person as being
confidential at the time the same is delivered to the Banks or the Agent,
provided that nothing herein shall limit the disclosure of any such information
(a) after such information shall have become public other than through a
violation of this ss.17, (b) to the extent required by statute, rule, regulation
or judicial process, (c) to counsel for any of the Banks or the Agent, (d) to
bank examiners or any other regulatory authority having jurisdiction over any
Bank or the Agent, or to auditors or accountants, (e) to the Agent, any Bank or
any Section 20 Subsidiary, (f) in connection with any litigation to which any
one or more of the Banks, the Agent or any Section 20 Subsidiary is a party, or
in connection with the enforcement of rights or remedies hereunder or under any
other Loan Document, (g) to a Subsidiary or affiliate of such Bank as provided
in ss.17.1 or (h) to any assignee or participant (or prospective assignee or
participant) so long as such assignee or participant agrees to be bound by the
provisions of ss.19.6.
17.3. Prior Notification. Unless specifically prohibited by applicable
law or court order, each of the Banks and the Agent shall, prior to disclosure
thereof, notify the Company of any request for disclosure of any such non-public
information by any governmental agency or representative thereof (other than any
such request in connection with an examination of the financial condition of
such Bank by such governmental agency) or pursuant to legal process.
17.4. Other. In no event shall any Bank or the Agent be obligated or
required to return any materials furnished to it or any Section 20 Subsidiary by
the Company or any of its Subsidiaries. The obligations of each Bank under this
ss.17 shall supersede and replace the obligations of such Bank under any
confidentiality letter in respect of this financing signed and delivered by such
Bank to the Company prior to the date hereof and shall be binding upon any
assignee of, or
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purchaser of any participation in, any interest in any of the Revolving Credit
Loans or Reimbursement Obligations from any Bank.
18. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein,
in the Revolving Credit Notes, in any of the other Loan Documents or in any
certificates or financial statements expressly required by the terms of the
Credit Agreement to be delivered by or on behalf of the Borrowers or any of
their Subsidiaries pursuant hereto shall be deemed to have been relied upon by
the Banks and the Agent, notwithstanding any investigation heretofore or
hereafter made by any of them, and shall survive the making by the Banks of any
of the Revolving Credit Loans and the issuance, extension or renewal of any
Letters of Credit, as herein contemplated, and shall continue in full force and
effect so long as any Letter of Credit or any amount due under this Credit
Agreement or the Revolving Credit Notes or the loan accounts or any of the other
Loan Documents remains outstanding or any Bank has any obligation to make any
Revolving Credit Loans or the Agent has any obligation to issue, extend or renew
any Letter of Credit, and for such further time as may be otherwise expressly
specified in this Credit Agreement.
19. ASSIGNMENT AND PARTICIPATION.
19.1. Conditions to Assignment by Banks. Except as provided herein,
each Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all or
a portion of its Commitment Percentage and Commitment and the same portion of
the Revolving Credit Loans at the time owing to it, the Revolving Credit Notes
held by it and its participating interest in the risk relating to any Letters of
Credit); provided that (a) each of the Agent and, unless a Default or Event of
Default shall have occurred and be continuing, the Company shall have given its
prior written consent to such assignment, which consent, in the case of the
Company, will not be unreasonably withheld, (b) each such assignment shall be of
a constant, and not a varying, percentage of all the assigning Bank's rights and
obligations under this Credit Agreement, (c) each assignment shall be in an
amount that is a whole multiple of $5,000,000 (or if less, such assignor's
entire Commitment), and (d) the parties to such assignment shall execute and
deliver to the Agent, for recording in the Register (as hereinafter defined), an
Assignment and Acceptance, substantially in the form of Exhibit E hereto (an
"Assignment and Acceptance"), together with any Revolving Credit Notes subject
to such assignment. Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in each Assignment and Acceptance,
which effective date shall be at least five (5) Business Days after the
execution thereof, (i) the assignee thereunder shall be a party hereto and, to
the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Bank hereunder, and (ii) the assigning Bank shall, to the
extent provided in such assignment and upon payment to the Agent of the
registration fee referred to in ss.19.3, be released from its obligations under
this Credit Agreement.
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19.2. Certain Representations and Warranties; Limitations; Covenants.
By executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:
(a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, the assigning Bank makes no
representation or warranty, express or implied, and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement or
the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, the other Loan Documents
or any other instrument or document furnished pursuant hereto or the
attachment, perfection or priority of any security interest or
mortgage,
(b) the assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of
the Company and its Subsidiaries or any other Person primarily or
secondarily liable in respect of any of the Obligations, or the
performance or observance by the Company and its Subsidiaries or any
other Person primarily or secondarily liable in respect of any of the
Obligations of any of their obligations under this Credit Agreement or
any of the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of this
Credit Agreement, together with copies of the most recent financial
statements referred to in ss.7.4 and ss.8.4 and such other documents
and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance
upon the assigning Bank, the Agent or any other Bank and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking
action under this Credit Agreement;
(e) such assignee represents and warrants that it is an
Eligible Assignee;
(f) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under
this Credit Agreement and the other Loan Documents as are delegated to
the Agent by the terms hereof or thereof, together with such powers as
are reasonably incidental thereto;
(g) such assignee agrees that it will perform in accordance
with their terms all of the obligations that by the terms of this
Credit Agreement are required to be performed by it as a Bank;
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(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
(i) such assignee acknowledges that it has made arrangements
with the assigning Bank satisfactory to such assignee with respect to
its pro rata share of Letter of Credit Fees in respect of outstanding
Letters of Credit.
19.3. Register. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Revolving Credit Loans owing to and
Letter of Credit Participations purchased by, the Banks from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Agent and the Banks may treat each Person whose name is
recorded in the Register as a Bank hereunder for all purposes of this Credit
Agreement. The Register shall be available for inspection by the Company and the
Banks at any reasonable time and from time to time upon reasonable prior notice.
Upon each such recordation, the assigning Bank agrees to pay to the Agent a
registration fee in the sum of $2,500.
19.4. New Revolving Credit Notes. Upon its receipt of an Assignment and
Acceptance executed by the parties to such assignment, together with each
Revolving Credit Note subject to such assignment, the Agent shall (a) record the
information contained therein in the Register, and (b) give prompt notice
thereof to the Company and the Banks (other than the assigning Bank). Within
five (5) Business Days after receipt of such notice, the Company, at its own
expense, shall execute and deliver to the Agent, in exchange for each
surrendered Revolving Credit Note, a new Revolving Credit Note to the order of
such Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Bank
has retained some portion of its obligations hereunder, a new Revolving Credit
Note to the order of the assigning Bank in an amount equal to the amount
retained by it hereunder. Such new Revolving Credit Notes shall provide that
they are replacements for the surrendered Revolving Credit Notes, shall be in an
aggregate principal amount equal to the aggregate principal amount of the
surrendered Revolving Credit Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be substantially the form of the
assigned Revolving Credit Notes. Within five (5) days of issuance of any new
Revolving Credit Notes pursuant to this ss.19.4, the Company shall deliver an
opinion of counsel, addressed to the Banks and the Agent, relating to the due
authorization, execution and delivery of such new Revolving Credit Notes and the
legality, validity and binding effect thereof, in form and substance
satisfactory to the Banks. The surrendered Revolving Credit Notes shall be
cancelled and returned to the Company.
19.5. Participations. Each Bank may sell participations to one or more
banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; provided
that (a) each such
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participation shall be in an amount of not less than $2,500,000, (b) any such
sale or participation shall not affect the rights and duties of the selling Bank
hereunder to the Borrowers and (c) the only rights granted to the participant
pursuant to such participation arrangements with respect to waivers, amendments
or modifications of the Loan Documents shall be the rights to approve waivers,
amendments or modifications that would reduce the principal of or the interest
rate on any Revolving Credit Loans, extend the term or increase the amount of
the Commitment of such Bank as it relates to such participant, reduce the amount
of any commitment fees or Letter of Credit Fees to which such participant is
entitled or extend any regularly scheduled payment date for principal or
interest.
19.6. Disclosure. Each of the Borrowers agrees that in addition to
disclosures made in accordance with standard and customary banking practices any
Bank may disclose information obtained by such Bank pursuant to this Credit
Agreement to assignees or participants and potential assignees or participants
hereunder; provided that such assignees or participants or potential assignees
or participants shall agree (a) to treat in confidence such information unless
such information otherwise becomes public knowledge, (b) not to disclose such
information to a third party, except as required by law or legal process and (c)
not to make use of such information for purposes of transactions unrelated to
such contemplated assignment or participation.
19.7. Assignee or Participant Affiliated with any Borrower. If any
assignee Bank is an Affiliate of any Borrower, then any such assignee Bank shall
have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Agent pursuant to ss.13.1 or ss.13.2, and
the determination of the Majority Banks shall for all purposes of this Credit
Agreement and the other Loan Documents be made without regard to such assignee
Bank's interest in any of the Revolving Credit Loans or Reimbursement
Obligations. If any Bank sells a participating interest in any of the Revolving
Credit Loans or Reimbursement Obligations to a participant, and such participant
is any Borrower or an Affiliate of any Borrower, then such transferor Bank shall
promptly notify the Agent of the sale of such participation. A transferor Bank
shall have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or modifications to any of the Loan Documents or for
purposes of making requests to the Agent pursuant to ss.13.1 or ss.13.2 to the
extent that such participation is beneficially owned by any Borrower or any
Affiliate of any Borrower, and the determination of the Majority Banks shall for
all purposes of this Credit Agreement and the other Loan Documents be made
without regard to the interest of such transferor Bank in the Revolving Credit
Loans or Reimbursement Obligations to the extent of such participation.
19.8. Miscellaneous Assignment Provisions. Any assigning Bank shall
retain its rights to be indemnified pursuant to ss.16 or any other express
provision of
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this Credit Agreement with respect to any claims or actions arising prior to the
date of such assignment. If any assignee Bank is not incorporated under the laws
of the United States of America or any state thereof, it shall, prior to the
date on which any interest or fees are payable hereunder or under any of the
other Loan Documents for its account, deliver to the Borrowers and the Agent
certification as to its exemption from deduction or withholding of any United
States federal income taxes. If any Reference Bank transfers all of its
interest, rights and obligations under this Credit Agreement, the Agent shall,
in consultation with the Borrowers and with the consent of the Borrowers and the
Majority Banks, appoint another Bank to act as a Reference Bank hereunder.
Anything contained in this ss.19 to the contrary notwithstanding, any Bank may
at any time pledge all or any portion of its interest and rights under this
Credit Agreement (including all or any portion of its Revolving Credit Notes) to
any of the twelve Federal Reserve Banks organized under ss.4 of the Federal
Reserve Act, 12 U.S.C. ss.341. No such pledge or the enforcement thereof shall
release the pledgor Bank from its obligations hereunder or under any of the
other Loan Documents.
19.9. Assignment by Borrowers. The Borrowers shall not assign or
transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Banks.
20. NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Revolving Credit Notes or any Letter of Credit
Applications shall be in writing and shall be delivered in hand, mailed by
United States registered or certified first class mail, postage prepaid, sent by
overnight courier, or sent by telegraph, telecopy, facsimile or telex and
confirmed by delivery via courier or postal service, addressed as follows:
(a) if to any Borrower, at 233 Fortune Boulevard, Milford,
Massachusetts 01757, Attention: President, or at such other address for
notice as the Borrower shall last have furnished in writing to the
Person giving the notice;
(b) if to the Agent, at 100 Federal Street, Boston,
Massachusetts 02110, USA, Attention: Linda Alto, Vice President, or
such other address for notice as the Agent shall last have furnished in
writing to the Person giving the notice; and
(c) if to any Bank, at such Bank's address set forth on
Schedule 1 hereto, or such other address for notice as such Bank shall
have last furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (a) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of
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the receipt thereof by such officer or the sending of such facsimile and (b) if
sent by registered or certified first-class mail, postage prepaid, on the third
Business Day following the mailing thereof.
21. GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH OF THE
BORROWERS AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH
OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON SUCH BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN ss.20. EACH OF
THE BORROWERS HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
22. HEADINGS.
The captions in this Credit Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
23. COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart, each of which
when executed and delivered shall be an original, and all of which together
shall constitute one instrument. In proving this Credit Agreement it shall not
be necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.
24. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Credit Agreement
nor any term hereof may be changed, waived, discharged or terminated, except as
provided in ss.26.
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25. WAIVER OF JURY TRIAL.
Each of the Borrowers hereby waives its right to a jury trial with
respect to any action or claim arising out of any dispute in connection with
this Credit Agreement, the Revolving Credit Notes or any of the other Loan
Documents, any rights or obligations hereunder or thereunder or the performance
of which rights and obligations. Except as prohibited by law, each of the
Borrowers hereby waives any right it may have to claim or recover in any
litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. Each of the Borrowers (a) certifies that no representative,
agent or attorney of any Bank or the Agent has represented, expressly or
otherwise, that such Bank or the Agent would not, in the event of litigation,
seek to enforce the foregoing waivers and (b) acknowledges that the Agent and
the Banks have been induced to enter into this Credit Agreement, the other Loan
Documents to which it is a party by, among other things, the waivers and
certifications contained herein.
26. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any consent or approval required or permitted by this Credit Agreement
to be given by the Banks (including, without limitation, an increase in the
sublimit of Revolving Credit Loans and Letters of Credit available to the
Subsidiary Borrowers) may be given, and any term of this Credit Agreement, the
other Loan Documents or any other instrument related hereto or mentioned herein
may be amended, and the performance or observance by the Borrowers or any of
their Subsidiaries of any terms of this Credit Agreement, the other Loan
Documents or such other instrument or the continuance of any Default or Event of
Default may be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of the
Borrowers and the written consent of the Majority Banks. Notwithstanding the
foregoing, a decrease in the rate of interest on the Revolving Credit Notes and
loan accounts (other than interest accruing pursuant to ss.5.11.2 following the
effective date of any waiver by the Majority Banks of the Default or Event of
Default relating thereto), any change in the regularly scheduled or otherwise
required payment dates for any amounts owing under the Loan Documents to the
Banks, the release of any security interest or lien as to Collateral
constituting all or substantially all of the Collateral (except if the release
or disposition of such Collateral is permitted or provided for in the provisions
of ss.9.5.2. hereof or elsewhere in the Loan Documents), the release of any
Guarantor (except if the release or disposition of such Collateral is permitted
or provided for in the provisions of ss.9.5.2 hereof or elsewhere in the Loan
Documents), the amount of the Commitments of the Banks, and the amount of
commitment fee or Letter of Credit Fees hereunder may not be changed without the
written consent of the Borrower and the written consent of each Bank affected
thereby; the Revolving Credit Loan Maturity Date may not be postponed without
the written consent of each Bank affected thereby; this ss.26 and the definition
of Majority Banks may not be amended, without the written consent of all of the
Banks; and the amount of the Agent's Fee or any Letter of Credit Fees payable
for the Agent's account and ss.15
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may not be amended without the written consent of the Agent. No waiver shall
extend to or affect any obligation not expressly waived or impair any right
consequent thereon. No course of dealing or delay or omission on the part of the
Agent or any Bank in exercising any right shall operate as a waiver thereof or
otherwise be prejudicial thereto. No notice to or demand upon the Borrowers
shall entitle the Borrowers to other or further notice or demand in similar or
other circumstances.
27. SEVERABILITY.
The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Credit Agreement in any jurisdiction.
IN WITNESS WHEREOF, the undersigned has duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
HOLMES PRODUCTS CORP.
By: /s/ Jordan A. Kahn
-------------------------------
Name: Jordan A. Kahn
Title: Director
HOLMES PRODUCTS (FAR EAST) LIMITED
By: /s/ Jordan A. Kahn
-------------------------------
Name: Jordan A. Kahn
Title: Director
ESTEEM INDUSTRIES LTD.
By: /s/ Jordan A. Kahn
-------------------------------
Name: Jordan A. Kahn
Title: Director
RAIDER MOTOR CORPORATION
By: /s/ Jordan A. Kahn
-------------------------------
Name: Jordan A. Kahn
Title: Director
BANKBOSTON, N.A., individually and as Agent
By: /s/ Linda Alto
-------------------------------
Title: Vice President
BANKBOSTON, N.A. acting through its
Hong Kong branch, as Fronting Bank
By: /s/ Linda Alto
-------------------------------
LEHMAN COMMERCIAL PAPER INC.
Individually and as Documentation Agent
By: /s/ Dennis J. Dee
---------------------------------
Name: Dennis J. Dee
Title:
COMERICA BANK
By: /s/ Kimberly S. Kersten
-------------------------------
Name: Kimberly S. Kersten
Title: Vice President
FLEET NATIONAL BANK
By: /s/ Wayne S. Antion
-------------------------------
Name: Wayne S. Antion
Title: Director
KEY CORPORATE CAPITAL INC.
By: /s/ Guy J. Simmons
-------------------------------
Name: Guy J. Simmons
Title: Senior Vice President
LASALLE NATIONAL BANK
By: /s/ Shonagh Aylsworth
-------------------------------
Name: Shonagh Aylsworth
Title: First Vice President
USTRUST
By: /s/ Thomas F. Macina
-------------------------------
Name: Thomas F. Macina
Title: Vice President