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ATRIUM COMPANIES, INC.,
as Borrower,
D AND W HOLDINGS, INC.,
as Parent,
and
THE GUARANTORS PARTY HERETO
-----------------
$205,000,000
CREDIT AGREEMENT
Dated as of October 2, 1998
-----------------
MERRILL LYNCH & CO.,
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
as Lead Arranger, Syndication Agent and Documentation Agent,
and
BANKBOSTON, N.A.,
as Administrative Agent,
and
THE LENDERS PARTY HERETO
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TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it is
attached but is inserted for convenience of reference only.
Page
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Section 1. DEFINITIONS, ACCOUNTING MATTERS AND RULES OF CONSTRUCTION 1
1.01. Certain Defined Terms 1
1.02. ACCOUNTING TERMS AND DETERMINATIONS 36
1.03. CLASSES AND TYPES OF LOANS 36
1.04. RULES OF CONSTRUCTION 36
Section 2. Commitments, Letters of Credit, Fees, Register, PREPAYMENTS
AND REPLACEMENT OF LENDERS 37
2.01. LOANS 37
2.02. BORROWINGS 40
2.03. LETTERS OF CREDIT 40
2.04. TERMINATION AND REDUCTIONS OF COMMITMENTS 45
2.05. FEES 46
2.06. LENDING OFFICES 46
2.07. SEVERAL OBLIGATIONS OF LENDERS 46
2.08. Notes; Register 46
2.09. OPTIONAL PREPAYMENTS AND CONVERSIONS OR CONTINUATIONS OF LOANS 47
2.10. MANDATORY PREPAYMENTS 48
2.11. REPLACEMENT OF LENDERS 50
Section 3. PAYMENTS OF PRINCIPAL AND INTEREST 51
3.01. REPAYMENT OF LOANS 51
3.02. INTEREST 52
Section 4. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC. 53
4.01. PAYMENTS 53
4.02. PRO RATA TREATMENT 53
4.03. COMPUTATIONS 54
4.04. MINIMUM AMOUNTS 54
4.05. CERTAIN NOTICES 54
4.06. NON-RECEIPT OF FUNDS BY ADMINISTRATIVE AGENT 55
4.07. RIGHT OF SETOFF; SHARING OF PAYMENTS; ETC. 56
Section 5. YIELD PROTECTION, ETC. 57
5.01. ADDITIONAL COSTS 57
5.02. LIMITATION ON TYPES OF LOANS 59
5.03. ILLEGALITY 60
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5.04. TREATMENT OF AFFECTED LOANS 60
5.05. COMPENSATION 60
5.06. NET PAYMENTS 61
Section 6. GUARANTEE 64
6.01. THE GUARANTEE 64
6.02. OBLIGATIONS UNCONDITIONAL 64
6.03. REINSTATEMENT 66
6.04. SUBROGATION; SUBORDINATION 66
6.05. REMEDIES 66
6.06. INSTRUMENT FOR THE PAYMENT OF MONEY 67
6.07. CONTINUING GUARANTEE 67
6.08. GENERAL LIMITATION ON GUARANTEE OBLIGATIONS 67
Section 7. CONDITIONS PRECEDENT 67
7.01. EFFECTIVENESS AND INITIAL EXTENSION OF CREDIT 67
7.02. INITIAL AND SUBSEQUENT EXTENSIONS OF CREDIT 74
7.03. PERMITTED ACQUISITIONS 74
Section 8. REPRESENTATIONS AND WARRANTIES 75
8.01. CORPORATE EXISTENCE 75
8.02. FINANCIAL CONDITION; ETC. 75
8.03. LITIGATION 76
8.04. NO BREACH; NO DEFAULT 76
8.05. ACTION 77
8.06. APPROVALS 77
8.07. REPRESENTATIONS AND WARRANTIES IN THE MERGER AGREEMENT. 77
8.08. ERISA 77
8.09. TAXES 78
8.10. INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT;
OTHER RESTRICTIONS 78
8.11. ENVIRONMENTAL MATTERS 79
8.12. ENVIRONMENTAL INVESTIGATIONS 79
8.13. USE OF PROCEEDS 80
8.14. SUBSIDIARIES 80
8.15. PROPERTIES 80
8.16. SECURITY INTEREST; ABSENCE OF FINANCING STATEMENTS; ETC. 81
8.17. LICENSES AND PERMITS; COMPLIANCE WITH LAWS 81
8.18. TRUE AND COMPLETE DISCLOSURE 81
8.19. SOLVENCY; ETC. 82
8.20. CONTRACTS 82
8.21. LABOR MATTERS 82
8.22. YEAR 2000 82
8.23. CHANGE OF CONTROL OFFER DOCUMENTS 82
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Section 9. COVENANTS 83
9.01. FINANCIAL STATEMENTS, ETC. 83
9.02. LITIGATION, ETC. 87
9.03. EXISTENCE; COMPLIANCE WITH LAW; PAYMENT OF TAXES; INSPECTION
RIGHTS; PERFORMANCE OF OBLIGATIONS; ETC. 87
9.04. INSURANCE 87
9.05. LIMITATION ON LINES OF BUSINESS 89
9.06. LIMITATION ON FUNDAMENTAL CHANGES, ACQUISITIONS OR DISPOSITIONS 89
9.07. Limitation on LIENS AND RELATED MATTERS 92
9.08. PROHIBITION ON DISQUALIFIED CAPITAL STOCK; LIMITATION ON
INDEBTEDNESS AND CONTINGENT OBLIGATIONS 95
9.09. LIMITATION ON INVESTMENTS; LIMITATION ON CREATION OF
SUBSIDIARIES 97
9.10. Limitation on DIVIDEND PAYMENTS 99
9.11. FINANCIAL COVENANTS 100
9.12. PLEDGE OR MORTGAGE OF ADDITIONAL COLLATERAL 103
9.13. SECURITY INTERESTS; FURTHER ASSURANCES 104
9.14. COMPLIANCE WITH ENVIRONMENTAL LAWS 105
9.15. Limitation on TRANSACTIONS WITH AFFILIATES 106
9.16. LIMITATION ON ACCOUNTING CHANGES; LIMITATION ON INVESTMENT
COMPANY STATUS 106
9.17. Limitation on MODIFICATIONS OF CERTAIN DOCUMENTS, ETC. 107
9.18. INTEREST RATE PROTECTION AGREEMENTS 107
9.19. LIMITATION ON CERTAIN RESTRICTIONS AFFECTING SUBSIDIARIES 107
9.20. ADDITIONAL OBLIGORS 107
9.21. LIMITATION ON DESIGNATION OF DESIGNATED SENIOR INDEBTEDNESS 108
9.22. FOREIGN SUBSIDIARIES' SECURITY 108
9.23. LIMITATION ON ACTIVITIES OF PARENT AND ATRIUM HOLDINGS 109
9.24. LIMITATION ON ISSUANCE OR DISPOSITIONS OF EQUITY INTERESTS
OF COMPANIES 109
9.25. LIMITATION ON PAYMENTS OR PREPAYMENTS OF INDEBTEDNESS OR
MODIFICATION OF DEBT DOCUMENTS 109
9.26. CASUALTY AND CONDEMNATION 111
9.27. TAX SHARING ARRANGEMENTS 111
9.29. CHANGE OF CONTROL OFFER 111
Section 10. EVENTS OF DEFAULT 111
Section 11. The AGENTS 115
11.01. General Provisions 115
11.02. INDEMNIFICATION 117
11.03. CONSENTS UNDER OTHER CREDIT DOCUMENTS 118
11.04. COLLATERAL SUB-AGENTS. 118
Section 12. MISCELLANEOUS 118
12.01. WAIVER 118
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12.02. NOTICES 119
12.03. EXPENSES, INDEMNIFICATION, ETC. 119
12.04. AMENDMENTS, ETC. 121
12.05. SUCCESSORS AND ASSIGNS 124
12.06. ASSIGNMENTS AND PARTICIPATIONS 124
12.07. SURVIVAL 126
12.08. CAPTIONS 126
12.09. COUNTERPARTS; INTERPRETATION; EFFECTIVENESS 126
12.10. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVERS; ETC. 127
12.11. CONFIDENTIALITY 127
12.12. INDEPENDENCE OF REPRESENTATIONS, WARRANTIES AND COVENANTS 128
12.13. SEVERABILITY 128
12.14. Acknowledgments 128
Signatures S-1
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ANNEX A - Commitments
SCHEDULE 1.01(a) - Applicable Margins Before Reset Date
SCHEDULE 1.01(b) - Applicable Margins After Reset Date
SCHEDULE 1.01(c) - Applicable Revolving Credit Fee Percentage
SCHEDULE 1.01(d) - Guarantors
SCHEDULE 1.01(e) - Schedule of Refinanced Debt
SCHEDULE 3.01(b) - Amortization Schedule
SCHEDULE 7.01(xx) - Mortgaged Real Property at Closing Date
SCHEDULE 8.03 - Litigation
SCHEDULE 8.11 - Environmental Matters
SCHEDULE 8.14 - Subsidiaries of Borrower
SCHEDULE 8.20 - Certain Contracts
SCHEDULE 8.21 - Labor Matters
SCHEDULE 9.06 - Certain Dispositions
SCHEDULE 9.07 - Certain Existing Liens
SCHEDULE 9.08 - Certain Indebtedness to Remain Outstanding
SCHEDULE 9.09 - Investments
SCHEDULE 9.15 - Existing Affiliate Agreements
EXHIBIT A-1 - Form of Revolving Credit Note
EXHIBIT A-2 - Form of Tranche B Term Loan Note
EXHIBIT A-3 - Form of Tranche C Term Loan Note
EXHIBIT A-4 - Form of Swing Loan Note
EXHIBIT B - Form of Intercompany Note
EXHIBIT C - Form of Interest Rate Certificate
EXHIBIT D - Form of Mortgage
EXHIBIT E - Form of Security Agreement
EXHIBIT F-1 - Form of Credit Facility Escrow Agreement
EXHIBIT F-2 - Form of Investor Escrow Agreement
EXHIBIT G - Form of Opinion of Counsel to the Obligors
EXHIBIT H - Form of Notice of Assignment
EXHIBIT I - Form of Notice of Borrowing
EXHIBIT J - Form of Notice of Conversion/Continuation
EXHIBIT K - Form of Joinder Agreement
EXHIBIT L - Form of Section 5.06 Certificate for Lenders
EXHIBIT M - Form of Solvency Certificate
EXHIBIT N - Form of Assignment Agreement
EXHIBIT O - Form of Tax Sharing Agreement
EXHIBIT P - Form of Perfection Certificate
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CREDIT AGREEMENT dated as of October 2, 1998, among ATRIUM COMPANIES,
INC., a Delaware corporation, as Borrower; the Guarantors party hereto; D AND
W HOLDINGS, INC., a Delaware corporation, as Parent (with respect to Sections
9.23 and 9.27 and the representations and warranties made by it in Article
8), each of the lenders that is a signatory hereto identified under the
caption "LENDERS" on the signature pages hereto or that, pursuant to Section
12.06(b), shall become a "Lender" hereunder (individually, a "LENDER" and,
collectively, the "LENDERS"); MERRILL LYNCH & CO., MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED, as lead arranger, syndication agent and
documentation agent (collectively in such capacities, the "LEAD ARRANGER");
and BANKBOSTON, N.A., as administrative agent (in such capacity, the
"ADMINISTRATIVE AGENT").
The parties hereto agree as follows:
Section 1. DEFINITIONS, ACCOUNTING MATTERS AND RULES OF CONSTRUCTION.
1.01. CERTAIN DEFINED TERMS. As used herein, the following terms shall
have the following meanings:
"ABR LOANS" shall mean Loans that bear interest at rates based upon the
Alternate Base Rate.
"ACQUISITION" shall mean, with respect to any Person, any transaction or
series of related transactions for the direct or indirect (a) acquisition of
all or substantially all of the Property of any other Person, or of any
business or division of any other Person, (b) acquisition of in excess of 50%
of the Equity Interests of any other Person, or otherwise causing any other
Person to become a Subsidiary of such Person, or (c) merger or consolidation
or any other combination with any other Person.
"ACQUISITION CONSIDERATION" shall mean the purchase consideration for
any Acquisition and all other payments made and Indebtedness assumed by any
Company in exchange for, or as part of, or in connection with, any
Acquisition, whether paid in cash or by exchange of Equity Interests or of
assets or otherwise and whether payable at or prior to the consummation of
such Acquisition or deferred for payment at any future time, whether or not
any such future payment is subject to the occurrence of any contingency, and
includes any and all payments and liabilities representing the purchase price
and the amount of any Indebtedness assumed, "earn-outs" and other similar
agreements in an amount reasonably determined in good faith by Borrower at
the time of consummation of such Acquisition equal to the net present value
of the payment provided for in such "earn-out" or other similar agreement,
consulting agreements and service agreements and non-competition agreements.
"ADDITIONAL COLLATERAL" see Section 9.12.
"ADDITIONAL OBLIGORS" see Section 9.20.
"ADJUSTED NET INCOME" shall mean, for any period, the consolidated net
income (loss) for such period, of Borrower and its Consolidated Subsidiaries
calculated on a consolidated basis in
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accordance with GAAP, adjusted by excluding (to the extent taken into account
in the calculation of such consolidated net income (loss)) the effect of (a)
gains or losses for such period from Dispositions not in the ordinary course
of business and Excluded Dispositions not in the ordinary course of business,
and the tax consequences thereof, (b) any non-recurring or extraordinary
items of income or expense for such period and the tax consequences thereof
(including expenses related to the Transactions), (c) the portion of net
income (loss) of any Person (other than a Subsidiary) in which Borrower or
any Subsidiary has an ownership interest, except to the extent of the amount
of cash dividends or other cash distributions actually paid to Borrower or
(subject to clause (e) below) any Subsidiary during such period to the extent
not in excess of Borrower's or such Subsidiary's proportionate interest in
such Person's consolidated net income for such period, (d) the net income
(loss) of any Person combined with Borrower or any Subsidiary on a "pooling
of interests" basis attributable to any period prior to the date of
combination, and (e) the net income of any Subsidiary to the extent that the
declaration or payment of dividends or similar distribution by such
Subsidiary was not for the relevant period permitted (without giving effect
to any non-permanent waiver), 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.
"ADMINISTRATIVE AGENT" see the introduction hereto.
"ADMINISTRATIVE AGENT'S FEE LETTER" shall mean the Fee Letter dated as
of October 1, 1998 between BankBoston, N.A. and Borrower.
"ADVANCE DATE" see Section 4.06.
"AFFILIATE" shall mean, with respect to any Person, any other
Person which directly or indirectly controls, or is under common control
with, or is controlled by, such Person. As used in this definition,
"CONTROL" (including, with its correlative meanings, "CONTROLLED BY" and
"UNDER COMMON CONTROL WITH") shall mean possession, directly or indirectly,
of power to direct or cause the direction of management or policies (whether
through ownership of securities or partnership or other ownership interests,
by contract or otherwise). Notwithstanding the foregoing, solely for purposes
of Section 9.15, no Company shall be deemed an Affiliate of any other Company.
"AFFILIATE TRANSACTION" see Section 9.15.
"AGENT" means either of the Lead Arranger or the Administrative Agent.
"AGREEMENT" shall mean this Credit Agreement, as amended from time to
time.
"ALTERNATE BASE RATE" shall mean for any day, a rate per annum that is
equal to the higher of (i) the Federal Funds Rate, PLUS 0.50%, or (ii) the
Prime Rate.
"AMORTIZATION PAYMENT" shall mean each scheduled installment of
principal payments on the Term Loans as set forth in Section 3.01(b).
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"APPLICABLE LENDING OFFICE" shall mean, for each Lender and for each
Type of Loan, the "Lending Office" of such Lender (or of an Affiliate of such
Lender) designated for such type of Loan on the signature pages hereof or
such other office of such Lender (or of an Affiliate of such Lender) as such
Lender may from time to time specify in writing to the Administrative Agent
and Borrower as the office by which its Loans of such Type are to be made and
maintained.
"APPLICABLE MARGIN" shall be, for any Loan, (x) from the Closing Date to
the date (the "RESET DATE") Borrower shall have delivered to the Lenders the
financial statements and Interest Rate Certificates required by Sections
9.01(a) and (e) for the first fiscal quarter of Borrower ending on or
immediately after six months after the Closing Date and an Officers'
Certificate demonstrating the then applicable Total Leverage Ratio, the
percentage PER ANNUM set forth on SCHEDULE 1.01(a) for such Loan (PROVIDED,
HOWEVER, that each of such percentages shall be increased effective as of the
date of consummation of the Change of Control Offer (x) by 0.125% if $70.0
million or more in aggregate principal amount of the Existing Notes are
purchased by Borrower in the Change of Control Offer (as specified in the
Officers' Certificate required to be delivered pursuant to Section 9.01(o)),
or (y) by 0.250% if $95.0 million in aggregate principal amount of the
Existing Notes are purchased by Borrower in the Change of Control Offer (as
specified in such Officers' Certificate or if no such Officers' Certificate
is so delivered)), and (y) on and after the Reset Date, when the Total
Leverage Ratio at the end of the most recently ended fiscal quarter is as set
forth in SCHEDULE 1.01(b), the percentage per annum set forth opposite such
Total Leverage Ratio in SCHEDULE 1.01(b) for such Loan (PROVIDED, HOWEVER,
that each of such percentages shall be increased effective as of the date of
consummation of the Change of Control Offer (x) by 0.375% if more than $70.0
million in aggregate principal amount of the Existing Notes are purchased by
Borrower in the Change of Control Offer (as specified in the Officers'
Certificate required to be delivered pursuant to Section 9.01(o)), or (y) by
0.50% if more than $95.0 million in aggregate principal amount of the
Existing Notes are purchased by Borrower in the Change of Control Offer (as
specified in such Officers' Certificate or if no such Officers' Certificate
is so delivered)). Any change in the Total Leverage Ratio shall be effective
to adjust the Applicable Margin as of the date of receipt by the
Administrative Agent of the Interest Rate Certificate most recently delivered
pursuant to Section 9.01(e). If Borrower fails to deliver the Interest Rate
Certificates and financial statements within the times specified in Sections
9.01(a), (b) and (e), the Total Leverage Ratio shall be deemed to be that in
Tier I of SCHEDULE 1.01(b) until Borrower delivers such Interest Rate
Certificates and financial statements.
"APPLICABLE REVOLVING CREDIT FEE PERCENTAGE" shall mean 0.5000% per
annum; PROVIDED, HOWEVER, that on and after the Reset Date, when the Total
Leverage Ratio at the end of the most recently ended fiscal quarter is as set
forth in SCHEDULE 1.01(c), the Applicable Revolving Credit Fee Percentage
shall be the percentage PER ANNUM set forth opposite such Total Leverage
Ratio in SCHEDULE 1.01(c). Any change in the Total Leverage Ratio shall be
effective to adjust the Applicable Revolving Credit Fee Percentage as of the
date of receipt by the Administrative Agent of the Interest Rate Certificate
most recently delivered pursuant to Section 9.01(e). If Borrower fails to
deliver the Interest Rate Certificates and financial statements within the
times specified in Sections 9.01(a), (b) and (e), such ratio shall be deemed
to be that in Tier I of SCHEDULE 1.01(c) until Borrower delivers such
Interest Rate Certificates and financial statements.
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"APPROVED FUND" shall mean, with respect to any Lender that is a fund or
commingled investment vehicle that invests in commercial loans, any other
fund that invests in commercial loans and is managed or advised by the same
investment advisor as such Lender or by an Affiliate of such investment
advisor.
"ARDSHIEL" see the definition of Investors.
"ARDATRIUM" shall mean Ardatrium L.L.C., a Delaware limited liability
company.
"ATRIUM HOLDINGS" means Atrium Corporation, a Delaware corporation and
the direct parent of Borrower on the Closing Date.
"BANKRUPTCY CODE" shall mean the Federal Bankruptcy Code of 1978.
"BORROWER" see the introduction to this Agreement.
"BORROWER PORTION OF EXCESS CASH FLOW" shall mean, at any time, the
excess of that portion of Excess Cash Flow for the fiscal year immediately
prior to such time which is not required to be applied to the Loans and
Commitments pursuant to Section 2.10 (a)(v) OVER the sum of (i) all Dividends
after the end of such prior fiscal year and prior to such time PLUS (ii) all
Restricted Debt Payments made after the end of such prior fiscal year and
prior to such time pursuant to Section 9.25(a)(2)(y).
"BUSINESS DAY" shall mean any day (a) on which commercial banks are not
authorized or required to close in New York City or Dallas, Texas and (b) if
such day relates to a borrowing of, a payment or prepayment of principal of
or interest on, a Continuation or Conversion of or into, or an Interest
Period for, a LIBOR Loan or a notice by Borrower with respect to any such
borrowing, payment, prepayment, Continuation, Conversion or Interest Period,
that is also a day on which dealings in Dollar deposits are carried out in
the London interbank market.
"CAPITAL EXPENDITURES" shall mean, for any period, any direct or
indirect expenditures of Borrower and the Subsidiaries which should be
capitalized on the consolidated balance sheet of Borrower and the
Subsidiaries in accordance with GAAP in respect of the purchase or other
acquisition of fixed or capital assets (including, without limitation,
securities), excluding (i) normal replacement and maintenance programs
properly charged to current operations, (ii) any expenditure made with the
Net Available Proceeds of any Disposition to the extent such Net Available
Proceeds are not required to be applied to the prepayment of the Loans in
accordance with Section 2.10(a)(iv), (iii) any expenditure made with the
proceeds of any Excluded Disposition, (iv) expenditures in an amount not to
exceed the sum of (x) the Net Available Proceeds of any Casualty Event to the
extent such Net Available Proceeds are not required to be applied to the
prepayment of the Loans in accordance with Section 2.10(a)(i) and (y) the
amount of any applicable insurance deductibles with respect to such Casualty
Event to the extent such amount is applied as set forth in clause (x) of
Section 2.10(a)(i) within the period specified therein, (v) expenditures to
effect Permitted Acquisitions, and (vi) the purchase price of equipment to
the extent that the consideration therefor consists of used or surplus
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equipment being traded in at such time or the proceeds of a concurrent sale
of such used or surplus equipment, in each case in the ordinary course of
business.
"CAPITAL LEASE," as applied to any Person, shall mean any lease of any
Property by that Person as lessee which, in conformity with GAAP, is required
to be classified and accounted for as a capital lease on the balance sheet of
that Person.
"CAPITAL LEASE OBLIGATIONS" shall mean, for any Person, all obligations
of such Person to pay rent or other amounts under a Capital Lease, and, for
purposes of this Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP.
"CASUALTY EVENT" shall mean, with respect to any Property (including
Real Property) of any Person, any loss of title with respect to Real Property
or any loss of or damage to or destruction of, or any condemnation or other
taking (including by any Governmental Authority) of, such Property (including
Real Property) for which such Person or any of its Subsidiaries receives
insurance proceeds or proceeds of a condemnation award or other compensation;
PROVIDED, HOWEVER, no such event shall constitute a Casualty Event if (x)
such proceeds or other compensation in respect thereof is less than $1.0
million and (y) all such proceeds and other compensation in respect of all
such events since the Closing Date are less than $5.0 million. "CASUALTY
EVENT" shall include but not be limited to any taking of any Mortgaged Real
Property or Real Property of any Company or any part thereof, in or by
condemnation or other eminent domain proceedings pursuant to any law, general
or special, or by reason of the requisition (other than for temporary
purposes) of the use or occupancy of any Mortgaged Real Property or Real
Property of any Company or any part thereof, by any Governmental Authority,
civil or military.
"CERCLA" see Section 8.11.
"CHANGE OF CONTROL" shall mean any transaction or event (including,
without limitation, an issuance, sale or exchange of Equity Interests, a
merger or consolidation, or a dissolution or liquidation) occurring on or
after the date hereof (whether or not approved by the board of directors of
Parent) as a direct or indirect result of which (a) if such transaction or
event occurs prior to the consummation of an Initial Public Offering, the
Permitted Holders fail to collectively beneficially own, directly or
indirectly, Equity Interests of Borrower representing at least a majority (on
a fully diluted basis) of the aggregate voting power of the Equity Interests
of Borrower at the time outstanding or fail to have the ability to appoint a
majority of the board of directors of Borrower; (b) if such transaction or
event is an Initial Public Offering or occurs after the consummation of an
Initial Public Offering, (i) any Person or any group (other than the
Permitted Holders) shall (A) (directly or indirectly) beneficially own in the
aggregate Equity Interests of Borrower representing 35% or more (on a fully
diluted basis) of the aggregate voting power of the Equity Interests of
Borrower at the time outstanding; or (B) have the right or power to appoint,
directly or indirectly, a majority of the board of directors of Borrower or
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constituted the board of directors of Borrower
(together with any new directors whose election by the shareholders of
Borrower was approved by a vote of at least a majority of the directors of
Borrower then still in office who were either directors at the beginning of
such period or whose election
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or nomination for election was previously so approved) cease for any reason
to constitute a majority of the board of directors of Borrower then in
office; or (c) if such transaction or event occurs at any time, whether
before or after the consummation of an Initial Public Offering, any event or
circumstance constituting a "change of control" or other similar occurrence
under the Existing Notes Indenture (other than any "change of control"
resulting from consummation of the Merger) or the Investor Debt Securities
Documents shall occur which results in an obligation of any Company to
prepay, purchase, offer to purchase, redeem or defease all or a portion of
such Indebtedness. For purposes of this definition, (x) the terms
"BENEFICIALLY OWN" and "GROUP" shall have the respective meanings ascribed to
them pursuant to Section 13(d) of the United States Securities Exchange Act
of 1934, except that a Person or group shall be deemed to "beneficially own"
all securities that such Person or group has the right to acquire, whether
such right is exercisable immediately or only after the passage of time, and
(y) any Person or group shall be deemed to beneficially own any Equity
Interests beneficially owned by any other Person (the "PARENT ENTITY") so
long as such Person or group beneficially owns, directly or indirectly, a
majority of the voting power of the then outstanding Equity Interests of the
parent entity and no other Person or group has the right to designate or
appoint a majority of the directors of such parent entity.
"CHANGE OF CONTROL OFFER" shall mean the change of control offer that
Borrower is required to make for the Existing Notes pursuant to the Existing
Notes Indenture as a result of the consummation of the Merger.
"CHANGE OF CONTROL OFFER DOCUMENTS" shall mean the offer to purchase and
such other related documents to be utilized by Borrower in connection with
the Change of Control Offer.
"CLASS" see Section 1.03.
"CLOSING DATE" shall mean the date on which the initial extensions of
credit are made hereunder.
"CODE" shall mean the United States Internal Revenue Code of 1986, as
amended, and the U.S. Treasury Regulations promulgated thereunder.
"COLLATERAL" shall mean all of the Pledged Collateral and Mortgaged Real
Property.
"COLLATERAL ACCOUNT" see Section 4.01 of the Security Agreement.
"COMMISSION" shall mean the United States Securities and Exchange
Commission.
"COMMITMENT LETTER" shall mean the Credit Facilities Commitment Letter
among Merrill Lynch Capital Corporation and the Investors dated August 3,
1998 together with Exhibit A thereto and incorporated therein.
"COMMITMENTS" shall mean the Revolving Credit Commitments and the Term
Loan Commitments.
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"COMPANIES" shall mean the Obligors and their respective Subsidiaries;
and "COMPANY" shall mean any of them.
"CONSOLIDATED EBITDA" shall mean, for any Measurement Period, the sum
(without duplication) of the amounts for such period of (i) Adjusted Net
Income, (ii) income tax expense to the extent deducted in determining
Adjusted Net Income for such period, (iii) all interest expense to the extent
deducted in determining Adjusted Net Income for such period, (iv)
depreciation expenses and amortization expense to the extent deducted in
determining Adjusted Net Income for such period, and (v) the non-cash
component of any item of expense to the extent deducted in determining
Adjusted Net Income for such period, other than to the extent requiring an
accrual or reserve for future cash expenses, all as determined on a
consolidated basis for Borrower and its Consolidated Subsidiaries in
accordance with GAAP, and MINUS cash dividends and other distributions paid
by Borrower pursuant to Sections 9.10(c)(i). Prior to the first anniversary
of the Closing Date, Consolidated EBITDA shall be calculated on a pro forma
basis as if the Transactions had occurred on the first day of the relevant
Measurement Period (including giving effect to $3.7 million of pro forma
expense and cost reductions relating to the Merger and the Contributions;
PROVIDED, HOWEVER, that the amount of such pro forma expense and cost
reductions shall be (i) $2.775 million if the Measurement Period ends on
March 31, 1999, (ii) $1.850 million if the Measurement Period ends on June
30, 1999, (iii) $0.925 million if the Measurement Period ends on September
30, 1999, and (iv) $0 if the Measurement Period ends on December 31, 1999).
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any Measurement Period,
all cash interest expense (including commitment fees, letter of credit fees
and the interest component of Capital Leases) of Borrower and its
Consolidated Subsidiaries for such Measurement Period including the net
amounts payable under all Interest Rate Protection Agreements.
"CONSOLIDATED SUBSIDIARY" shall mean, for any Person, each Subsidiary of
such Person (whether now existing or hereafter created or acquired) the
financial statements of which shall be (or should have been) consolidated
with the financial statements of such Person in accordance with GAAP.
"CONTINGENT OBLIGATION" shall mean, as to any Person, any direct or
indirect liability of such Person, whether or not contingent, with or without
recourse, (a) with respect to any Indebtedness, lease, dividend, letter of
credit or other obligation (the "PRIMARY OBLIGATIONS") of another Person (the
"PRIMARY OBLIGOR"), including any obligation of such Person (i) to purchase,
repurchase or otherwise acquire such primary obligations or any security
therefor, (ii) to advance or provide funds for the payment or discharge of
any such primary obligation, or to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or solvency or
any balance sheet item, level of income or financial condition of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation, or (iv)
other wise to assure or hold harmless the holder of any such primary
obligation against loss in respect thereof (each of (i)-(iv), a "GUARANTY
OBLIGATION"); (b) with respect to any Surety Instrument (other than any
Letter of Credit) issued for the account of such Person or as to which such
Person is otherwise liable for reimbursement
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of drawings or payments; (c) to purchase any materials, supplies or other
property from, or to obtain the services of, another Person if the relevant
contract or other related document or obligation requires that payment for
such materials, supplies or other property, or for such services, shall be
made regardless of whether delivery of such materials, supplies or other
property is ever made or tendered, or such services are ever performed or
tendered; or (d) in respect of any Swap Contract; PROVIDED, HOWEVER, that the
term Contingent Obligation shall not include endorsements of instruments for
deposit or collection or standard contractual indemnities entered into, in
each case in the ordinary course of business. The amount of any Contingent
Obligation shall (x) in the case of a Guaranty Obligation, be deemed equal to
the stated or determinable amount of the primary obligation in respect of
which such Guaranty Obligation is made or, if not stated or if
indeterminable, the maximum reasonably anticipated liability in respect
thereof, and (y) in the case of other Contingent Obligations, be equal to the
maximum reasonably anticipated liability in respect thereof.
"CONTINUE," "CONTINUATION" and "CONTINUED" shall refer to the
continuation pursuant to Section 2.09 of a LIBOR Loan from one Interest
Period to the next Interest Period.
"CONTRACTUAL OBLIGATION" shall mean as to any Person, any provision of
any security issued by such Person or of any mortgage, security agreement,
pledge agreement, indenture, credit agreement, securities purchase agreement,
debt instrument, contract, agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its Property is bound
or subject.
"CONTRIBUTED BUSINESSES" shall mean Wing Industries Holdings, Inc., a
Delaware corporation and the owner of all of the outstanding capital stock of
Wing Industries, Inc., a Texas corporation (together, "WING"), and Door
Holdings, Inc., a Delaware corporation and the owner of all of the
outstanding capital stock of R.G. Darby Company, an Alabama corporation, and
Total Trim, Inc., an Alabama corporation (collectively, "DARBY").
"CONTRIBUTION AGREEMENTS" shall mean collectively the (i) Contribution
and Subscription Agreement, dated as of October 2, 1998, by and among Door
Holdings, Inc., GEIPPP II and Arddoor L.L.C. (ii) Contribution and
Subscription Agreement, dated as of October 2, 1998, by and among Parent Wing
Industries Holdings, Inc., GEIPPP II, Ardshiel and Ardwing LLC; (iii)
Contribution and Subscription Agreement, dated as of October 2, 1998, by and
among Parent and the stockholders signatory thereto; (iv) Subscription
Agreement, dated as of October 2, 1998, by and among Parent and the
stockholders signatory thereto; (v) Contribution Agreement, dated as of
October 2, 1998, by and between Parent and D and W Acquisition Corp.; (vi)
Contribution Agreement, dated as of October 2, 1998, by and between Parent
and Atrium Holdings; and (vii) Contribution Agreement, dated as of October 2,
1998, by and between Atrium Holdings and Borrower, as such may be amended and
in effect from time to time in accordance with its terms and this Agreement.
"CONTRIBUTIONS" shall mean (i) the conversion on the Closing Date of all
outstanding subordinated indebtedness and warrants of the Contributed
Businesses into common equity of the Contributed Businesses and (ii) the
contribution on the Closing Date of all the outstanding capital stock of the
Contributed Businesses by the owners thereof to Borrower through a series of
transactions, in each case pursuant to and in accordance with the terms of
the Contribution Agreements.
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"CONVERT," "CONVERSION" and "CONVERTED" shall refer to a conversion
pursuant to Section 2.09 of one Type of Loan into another Type of Loan, which
may be accompanied by the transfer by a Lender (at its sole discretion) of a
Loan from one Applicable Lending Office to another.
"COVERED TAXES" see Section 5.06(a).
"CREDIT DOCUMENTS" shall mean this Agreement, the Notes, the Letter of
Credit Documents and the Security Documents.
"CREDIT FACILITY ESCROW AGREEMENT" shall mean the Credit Facility Escrow
Agreement substantially in the form of EXHIBIT F-1 among Borrower, the
Administrative Agent and State Street Bank & Trust Company, N.A., as escrow
agent, as such may be amended and in effect from time to time in accordance
with its terms and this Agreement.
"CREDIT FACILITY ESCROWED AMOUNT" shall mean $75.0 million of the
aggregate amount of Tranche C Term Loans.
"CREDIT FACILITY UTILIZED AMOUNT" shall mean that portion of the Credit
Facility Escrowed Amount released to the trustee under the Existing Notes
Indenture pursuant to the terms of the Credit Facility Escrow Agreement to
fund in part the purchase price for the Existing Notes that are put to
Borrower in the Change of Control Offer.
"CREDITOR" shall mean (i) any Agent, (ii) the Issuing Lender, (iii) any
Lender, and (iv) any party to a Swap Contract relating to the Loans if at the
date of entering into such Swap Contract such party was a Lender or an
Affiliate of a Lender.
"DARBY" see the definition of Contributed Businesses.
"DEBT ISSUANCE" shall mean the incurrence by any Obligor of any
Indebtedness after the Closing Date (other than as permitted by Section 9.08).
"DEFAULT" shall mean any event or condition that constitutes an Event of
Default or that would become, with notice or lapse of time or both, an Event
of Default.
"DESIGNATED EQUITY ISSUANCE PROCEEDS" shall mean at any time the excess
of (A) any net cash proceeds of any issuance of Equity Interests by Parent
(to the extent the net proceeds therefrom are contemporaneously contributed
in cash to Atrium Holdings and, if used pursuant to Section 9.06(i), by
Atrium Holdings to Borrower) or issuance of Qualified Capital Stock by Atrium
Holdings designated in writing by Borrower to the Administrative Agent
pursuant to an Officers' Certificate as being "Designated Equity Issuance
Proceeds" to the extent that the aggregate amount of such net cash proceeds
so designated since the Closing Date does not exceed $40.0 million OVER (B)
the aggregate sum total of all amounts applied in reliance on such Designated
Equity Issuance Proceeds since the Closing Date and on or prior to such time
pursuant to Section 9.06(i) and Section 9.25(a)(4)(y).
-10-
"DISPOSITION" shall mean (i) any conveyance, sale, lease, assignment,
transfer or other disposition (including by way of merger or consolidation
and including any sale-leaseback transaction) of any Property (including
receivables and Equity Interests of any Person owned by any Company other
than Borrower) (whether now owned or hereafter acquired) by any Company to
any Person other than Borrower or any Qualified Subsidiary, (ii) any issuance
or sale by any Subsidiary of its Equity Interests to any Person other than
Borrower or any Subsidiary, and (iii) any liquidating or other non-ordinary
course dividend or distribution or return of Investment received by any
Company in respect of any joint venture or similar enterprise, excluding,
however, in each case any Excluded Disposition.
"DISPOSITION EVENT" shall mean the receipt by any Company of cash
proceeds or cash distributions of any kind from Property received in
consideration for a Disposition.
"DISQUALIFIED CAPITAL STOCK" shall mean, with respect to any Person, any
Equity Interest of such Person that, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable), or
upon the happening of any event, matures (excluding any maturity as the
result of an optional redemption by the issuer thereof) or is mandatorily
redeemable (other than solely for Qualified Capital Stock), pursuant to a
sinking fund obligation or otherwise, or is redeemable at the sole option of
the holder thereof (other than solely for Qualified Capital Stock) or
exchangeable or convertible into debt securities of the issuer thereof at the
sole option of the holder thereof, in whole or in part, on or prior to the
date which is 90 days after the Final Maturity Date.
"DIVIDEND PAYMENT" shall mean dividends (in cash, Property or
obligations) on, or other payments or distributions on account of, or the
setting apart of money for a sinking or other analogous fund for, or the
purchase, redemption, retirement or other acquisition of, any Equity
Interests or Equity Rights of any Company, but excluding dividends paid
through the issuance of additional shares of Qualified Capital Stock and any
redemption or exchange of any Qualified Capital Stock of such Company through
the issuance of Qualified Capital Stock of such Company.
"DOLLARS" and "$" shall mean lawful money of the United States of
America.
"ELIGIBLE PERSON" shall mean (i) a commercial bank organized under the
laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $100.0 million; (ii) a commercial bank
organized under the laws of any other country that is a member of the
Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having a combined capital and
surplus in a dollar equivalent amount of at least $100.0 million; PROVIDED,
HOWEVER, that such bank is acting through a branch or agency located in the
country in which it is organized or another country that is also a member of
the OECD; (iii) an insurance company, mutual fund or other entity which is
regularly engaged in making, purchasing or investing in loans or securities
or other financial institution organized under the laws of the United States,
any state thereof, any other country that is a member of the OECD or a
political subdivision of any such country with assets, or assets under
management, in a dollar equivalent amount of at least $100.0 million; (iv)
any Affiliate of a Lender or an Approved Fund of a Lender; and (v) any other
entity (other than a natural person) which is an "accredited investor" (as
defined in Regulation D under
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the United States Securities Act of 1933, as amended) which extends credit or
buys loans as one of its businesses including, but not limited to, insurance
companies, mutual funds and investment funds. With respect to any Lender,
any Approved Fund in respect thereof shall be treated as a single Eligible
Person.
"EMPLOYEE BENEFIT PLAN" shall mean an employee benefit plan (as defined
in Section 3(3) of ERISA) that is maintained or contributed to by any ERISA
Entity or with respect to which Borrower or a Subsidiary could incur
liability.
"ENVIRONMENTAL CLAIM" shall mean, with respect to any Person, any
written notice, claim, demand or other communication (collectively, a
"CLAIM") by any other Person alleging such Person's liability for any costs,
cleanup costs, response, corrective action or other costs, damages to natural
resources or other Property, personal injuries, fines or penalties arising
out of or resulting from (i) the presence, Release or threatened Release into
the environment, of any Hazardous Material at any location, whether or not
owned by such Person, or (ii) any violation of any Environmental Law. The
term "ENVIRONMENTAL CLAIM" shall include, without limitation, any claim by
any Person seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from the presence of Hazardous
Materials or arising from alleged injury or threat of injury to health,
safety or the environment.
"ENVIRONMENTAL LAWS" shall mean any and all present and future
applicable laws, rules or regulations of any Governmental Authority, any
orders, decrees, judgments or injunctions and the common law in each case as
now or hereafter in effect, relating to pollution or protection of human
health, safety or the environment, including without limitation, ambient air,
indoor air, soil, surface water, ground water, land or subsurface strata and
natural resources such as wetlands, flora and fauna, including, without
limitation, those relating to Releases or threatened Releases of Hazardous
Materials into the environment, or otherwise relating to the manufacture,
processing, generation, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials.
"EQUITY CONTRIBUTIONS" shall mean cash capital contributions by the
Investors of at least $50.0 million to Parent on the Closing Date which will
in turn be contributed to Merger Sub by Parent and then by Merger Sub to
Atrium Holdings as a common equity contribution on the Closing Date in
connection with the Merger.
"EQUITY INTERESTS" shall mean, with respect to any Person, any and all
shares, interests, participations or other equivalents, including membership
interests (however designated, whether voting or non-voting), of capital of
such Person, including, if such Person is a partnership, partnership
interests (whether general or limited) and any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, such partnership,
whether outstanding on the date hereof or issued after the Closing Date.
"EQUITY ISSUANCE" shall mean any of (a) any issuance or sale after the
Closing Date by Borrower, Atrium Holdings, Parent or any other direct or
indirect parent of Borrower of (x) any Equity Interests (including any Equity
Interests issued upon exercise of any Equity Rights) or any Equity
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Rights, or (y) any other security or instrument representing an Equity
Interest (or the right to obtain any Equity Interest) in the issuing or
selling Person, or (b) the receipt by Parent or any Company after the Closing
Date of any capital contribution (whether or not evidenced by any Equity
Interest issued by the recipient of such contribution) other than from any
other Company or Parent, excluding in each case (i) any issuance of Equity
Interests of Parent to the seller or sellers in consideration for a Permitted
Acquisition, (ii) any issuance or sale of Equity Interests of any Person
(other than Borrower) owned by any Company (which, for the avoidance of
doubt, is treated as a Disposition), (iii) any issuance or sale by Parent of
Equity Interests of Parent to employees, directors, officers or consultants
in the ordinary course of business in an amount not to exceed 10% of the
outstanding Equity Interests of Parent at any time, and (iv) any issuance of
Equity Interests of Parent to the extent that the proceeds thereof are used
for a substantially contemporaneous purchase or redemption of Equity
Interests of Parent pursuant to Section 9.10(c)(ii).
"EQUITY RIGHTS" shall mean, with respect to any Person, any outstanding
subscriptions, options, warrants, commitments, preemptive rights or
agreements of any kind (including any stockholders' or voting trust
agreements) for the issuance, sale, registration or voting of, or outstanding
securities convertible into, any additional Equity Interests of any class, or
partnership or other ownership interests of any type in, such Person.
"ERISA" shall mean the United States Employee Retirement Income Security
Act of 1974, as amended.
"ERISA ENTITY" shall mean any member of an ERISA Group.
"ERISA EVENT" shall mean (a) any "reportable event," as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b)
the existence with respect to any Plan of an "accumulated funding deficiency"
(as defined in Section 412 of the Code or Section 302 of ERISA), whether or
not waived, the failure to make by its due date a required installment under
Section 412(m) of the Code with respect to any Plan or the failure to make
any required contribution to a Multiemployer Plan; (c) the filing pursuant to
Section 412(d) of the Code or Section 303(d) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Plan; (d) the
incurrence by any ERISA Entity of any liability under Title IV of ERISA with
respect to the termination of any Plan; (e) the receipt by any ERISA Entity
from the PBGC of any notice relating to an intention of the PBGC to terminate
any Plan or Plans or to appoint a trustee to administer any Plan, or the
occurrence of any event or condition which is reasonably likely to constitute
grounds under ERISA for the PBGC to terminate or appoint a trustee to
administer any Plan; (f) the incurrence by any ERISA Entity of any liability
with respect to the withdrawal or partial withdrawal from any Multiemployer
Plan; (g) the receipt by an ERISA Entity of any notice, or the receipt by any
Multiemployer Plan from any Company of any notice, concerning the imposition
of Withdrawal Liability or a determination that a Multiemployer Plan is, or
is expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA; (h) the making of any amendment to any Plan which could
result in the imposition of a lien or the posting of a bond or other
security; or (i) the occurrence of a nonexempt prohibited transaction (within
the
-13-
meaning of Section 4975 of the Code or Section 406 of ERISA) which is
reasonably likely to result in liability to any Company.
"ERISA GROUP" shall mean any Company and all members of a controlled
group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with Parent or any
Subsidiary are treated as a Single employer under Section 414 of the Code.
"EVENT OF DEFAULT" see Section 10.
"EXCESS CASH FLOW" shall mean, for any period, (A) the sum of (i)
Consolidated EBITDA for such period (calculated for this definition by adding
back the cash portion of all extraordinary or non-recurring items of income
(other than from Dispositions and Excluded Dispositions) to the extent
excluded in the calculation of Adjusted Net Income and by deducting the cash
portion of all extraordinary or non-recurring items of expense to the extent
excluded in the calculation of Adjusted Net Income), (ii) any net decrease in
Working Capital during such period (except to the extent attributable to
assets or Persons subject to a Disposition during such period), and (iii)
cash received from the proceeds of any life insurance or "key man" policy
during such period, MINUS (B) the sum of (i) cash interest expense
(including, without duplication, Capital Lease expense and commitment fees)
of Borrower and its Consolidated Subsidiaries for such period to the extent
deducted in calculating Adjusted Net Income, (ii) the sum of all scheduled
principal payments (other than pursuant to Section 2.10(a)(v)) on any
Indebtedness (including Capital Leases and Term Loans pursuant to Section
3.01(b)) of Borrower and its Consolidated Subsidiaries made during such
period from internally generated funds and all prepayments of Revolving
Credit Loans made from internally generated funds and to the extent
accompanied by a permanent reduction in Revolving Credit Commitments, (iii)
Capital Expenditures made during such period by Borrower and the
Subsidiaries, (iv) all income taxes actually paid in cash by Borrower or any
Subsidiary during such period or within a normal payment period thereafter
(PROVIDED, HOWEVER, that any amount deducted pursuant to this clause (iv)
which was not actually paid during such period shall not again be deducted
for determining Excess Cash Flow for another period), (v) cash dividends paid
during such period by Borrower pursuant to Section 9.10(c)(ii) to the extent
made with internally generated funds, (vi) cash paid during such period for
any Permitted Acquisition to the extent funded from internally generated
funds, and (vii) any net increases in Working Capital during such period
(except to the extent attributable to assets or Persons subject to an
Acquisition during such period).
"EXCHANGE ACT" shall mean the United States Securities Exchange Act of
1934, as amended.
"EXCLUDED DISPOSITIONS" shall mean (i) Dispositions for fair market
value resulting in no more than $1.0 million in aggregate proceeds in any
fiscal year; (ii) an exchange of equipment or inventory for other equipment
or inventory, provided that the Company effecting such exchange receives at
least substantially equivalent value in such exchange for the Property
disposed of; (iii) any transaction permitted by Section 9.06 (other than
clause (g) and (h) thereof), any Lien permitted by Section 9.07 and any
Investment permitted by Section 9.09; (iv) any issuance of Equity Interests
by
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any Subsidiary to directors or nominees if required by applicable law if
resulting in DE MINIMIS proceeds; and (v) the sale of inventory in the
ordinary course of business.
"EXCLUDED EQUITY ISSUANCE" shall mean any issuance of Equity Interests
of Parent excluded from the definition of Equity Issuance by virtue of clause
(iv) thereof.
"EXCLUDED TAXES" see Section 5.06(a).
"EXEMPT LENDER" see Section 5.06(b).
"EXISTING AFFILIATE AGREEMENTS" see Section 9.15.
"EXISTING DEBT REPAYMENT" shall mean the repayment of all Indebtedness
and cancellation of all commitments to make extensions of credit under the
Refinanced Debt.
"EXISTING NOTES" shall mean the 10-1/2% Senior Subordinated Notes due 2006,
Series B of Borrower issued pursuant to the Existing Notes Indenture.
"EXISTING NOTES INDENTURE" shall mean the Indenture among Borrower, as
issuer, Atrium Door and Window Company -- West Coast (f/k/a H-R Window
Supply, Inc.), Atrium Door and Window Company of the Northeast (f/k/a Bishop
Manufacturing Company, Incorporated, and successor by merger to Vinyl
Building Specialties of Connecticut, Inc.), Atrium Door and Window Company of
New York (f/k/a Bishop Manufacturing Company of New York), Atrium Door and
Window Company of New England, Inc. (f/k/a Bishop Manufacturing Co. of New
England) and Atrium Door and Window Company of Arizona, as subsidiary
guarantors, and United States Trust Company of New York, as trustee, dated as
of November 27, 1996, as such may be amended and in effect from time to time
in accordance with its terms and this Agreement.
"FAIR MARKET VALUE" shall mean, with respect to any asset, a price
(after taking into account any liabilities relating to such assets), as
determined by Borrower in good faith, that is within a reasonable range of
prices which could be negotiated in an arm's-length free market transaction,
for cash, between a willing seller and a willing and able buyer, neither of
which is under any compulsion to complete the transaction.
"FEDERAL FUNDS RATE" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) 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 on
such day, as published by the Federal Reserve Bank of New York on the
Business Day next succeeding such day; PROVIDED, HOWEVER, that (a) if the day
for which such rate is to be determined is not a Business Day, the Federal
Funds Rate for such day shall be such rate on such transactions on the next
preceding Business Day as so published on the next succeeding Business Day
and (b) if such rate is not so published for any Business Day, the Federal
Funds Rate for such Business Day shall be the average rate quoted to the
Administrative Agent on such Business Day on such transactions by three
federal funds brokers of recognized standing, as determined by the
Administrative Agent.
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"FEE LETTER" shall mean the Credit Facilities Fee Letter dated as of
August 3, 1998 by and among Merrill Lynch Capital Corporation and the
Investors.
"FINAL MATURITY DATE" shall mean June 30, 2006.
"FINANCIAL MAINTENANCE COVENANTS" shall mean the covenants set forth
in Section 9.11(a) through (d).
"FIXED CHARGE COVERAGE RATIO" shall mean, for any Test Date, the
ratio of (x) Consolidated EBITDA for the Measurement Period ending on or
immediately prior to such Test Date to (y) Fixed Charges for the Measurement
Period ending on or immediately prior to such Test Date; PROVIDED, HOWEVER,
that prior to the first anniversary of the Closing Date, Consolidated Interest
Expense included in Fixed Charges shall be the product of (x) Consolidated
Interest Expense for the period since the Closing Date multiplied by (y) a
fraction, the numerator of which is 365 and the denominator of which is the
number of days in such period since the Closing Date.
"FIXED CHARGES" shall mean, for any Measurement Period, the sum of
(i) Consolidated Interest Expense for such period, (ii) the sum of all
scheduled principal payments on any Indebtedness of Borrower and its
Consolidated Subsidiaries (including, without duplication, any lease payments
in respect of Capital Leases attributable to the principal component thereof
for such period), and (iii) Capital Expenditures during such period.
"FOREIGN PLAN" shall mean any employee benefit plan, program, policy,
arrangement or agreement maintained or contributed to by, or entered into with,
Borrower or any Subsidiary with respect to employees employed outside the
United States.
"FOREIGN SUBSIDIARY" shall mean any direct or indirect Subsidiary
organized outside of the United States as defined in Section 7701(a)(9) of the
Code (or any successor provision).
"FUNDING DATE" shall mean the date of the making of any extension of
credit hereunder (including the Closing Date).
"GAAP" shall mean generally accepted accounting principles set forth
as of the relevant date in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
U.S. accounting profession), which are applicable to the circumstances as of
the date of determination.
"GEIPPP II" see the definition of Investors.
"GOVERNMENTAL AUTHORITY" shall mean any government or political
subdivision of the United States or any other country or any agency, authority,
board, bureau, central bank, commission, department or instrumentality thereof
or therein, including, without limitation, any court, tribunal, grand jury or
arbitrator, in each case whether foreign or domestic, or any entity exercising
executive,
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legislative, judicial, regulatory or administrative functions of or
pertaining to such government or political subdivision.
"GROSS-UP AMOUNT" see Section 5.06(a).
"GUARANTEE" shall mean the guarantee of each Guarantor pursuant to
Section 6.
"GUARANTEED OBLIGATIONS" see Section 6.01.
"GUARANTORS" shall mean Atrium Holdings, each Subsidiary listed on
SCHEDULE 1.01(d) and each direct and indirect Wholly Owned Subsidiary (other
than a Foreign Subsidiary) that guarantees the payment of the Obligations of
Borrower under the Credit Documents pursuant to Section 9.20.
"GUARANTY OBLIGATION" see the definition of Contingent Obligation.
"HAZARDOUS MATERIAL" shall mean any pollutant, contaminant, toxic,
hazardous or extremely hazardous substance, constituent or waste, or any other
constituent, waste, material, compound or substance subject to regulation under
any Environmental Law including, without limitation, petroleum or any petroleum
product, including crude oil or any fraction thereof, polychlorinated
biphenyls, urea-formaldehyde insulation and asbestos.
"IN THE ORDINARY COURSE OF BUSINESS" shall mean in the ordinary
course of business of Borrower and the Subsidiaries and on ordinary business
terms.
"INCUR" shall mean, with respect to any Indebtedness or other
obligation of any Person, to create, issue, incur (including by conversion,
exchange or otherwise), assume, guarantee or otherwise become liable in respect
of such Indebtedness or other obligation or the recording, as required pursuant
to GAAP or otherwise, of any such Indebtedness or other obligation on the
balance sheet of such Person (and "INCURRENCE," "INCURRED" and "INCURRING"
shall have meanings correlative to the foregoing). Indebtedness of any Person
or any of its Subsidiaries existing at the time such Person becomes a Company
(or is merged into or consolidates with any Company), whether or not such
Indebtedness was incurred in connection with, or in contemplation of, such
Person becoming a Company (or being merged into or consolidated with any
Company), shall be deemed incurred at the time any such Person becomes a
Company or merges into or consolidates with any Company. Neither the accrual
of interest, nor the accretion of accreted value or amortization of financing
fees, shall be deemed to be an incurrence.
"INDEBTEDNESS" shall mean, for any Person, without duplication, (a)
all indebtedness for borrowed money of such Person; (b) all obligations issued,
undertaken or assumed by such Person as the deferred purchase price of Property
or services (other than trade payables and accrued expenses paid on customary
terms and not more than 60 days past due and incurred in the ordinary course of
business on ordinary terms); (c) all non-contingent reimbursement or payment
obligations of such Person with respect to Surety Instruments (such as, for
example, unpaid reimbursement obligations in respect of a drawing under a
letter of credit); (d) all obligations of such Person evidenced by notes,
bonds, debentures or similar instruments, including obligations so evidenced
incurred in connection
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with the acquisition of Property or businesses; (e) all indebtedness of such
Person created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to Property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to
repossession or sale of such Property), the amount of such indebtedness to be
deemed the fair market value of such Property; (f) all Capital Lease
Obligations of such Person; (g) all net obligations of such Person with
respect to Swap Contracts (such obligations to be equal at anytime to the
aggregate net amount that would have been payable by such Person at the most
recent fiscal quarter end in connection with the termination of such Swap
Contracts at such fiscal quarter end); (h) all amounts required to be paid by
such Person as a guaranteed payment to partners, including any mandatory
redemption of shares or interests; (i) all indebtedness of other Persons
referred to in clauses (a) through (h) above secured by (or for which the
holder of such indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien upon or in Property (including accounts and
contracts rights) owned by such Person, whether or not such Person has
assumed or become liable for the payment of such indebtedness, the amount of
such indebtedness to be deemed to be the fair market value of such Property;
and (j) all Guaranty Obligations of such Person in respect of indebtedness or
obligations of others of the kinds referred to in clauses (a) through (h)
above. Indebtedness shall not include accounts extended by suppliers in the
ordinary course of business on normal trade terms in connection with the
purchase of goods and services. The Indebtedness of any Person shall include
any Indebtedness of any partnership in which such Person is the general
partner.
"INDEMNITEE" see Section 12.03.
"INITIAL PUBLIC OFFERING" shall mean a primary underwritten public
offering of the common stock of Parent or Atrium Holdings or any other direct
or indirect holding company thereof, other than any public offering or sale
pursuant to a registration statement on Form S-8 or a comparable form.
"INSOLVENCY PROCEEDING" shall mean, with respect to any Person,
(a) any case, action or proceeding with respect to such Person before any court
or by or before any other Governmental Authority relating to bankruptcy,
insolvency, reorganization, liquidation, receivership, dissolution,
sequestration, conservatorship, winding-up or relief of debtors (or the passing
of a resolution for or with a view to any of the foregoing), or (b) any
assignment for the benefit of creditors, composition, marshalling of assets for
creditors, or other similar arrangement in respect of such Person's creditors
generally or any substantial portion of its creditors.
"INTERCOMPANY NOTE" shall mean a promissory note substantially in the
form of EXHIBIT B.
"INTEREST COVERAGE RATIO" shall mean, for any Test Date, the ratio of
(x) Consolidated EBITDA for the Measurement Period ending on or immediately
prior to such Test Date to (y) (1) prior to the first anniversary of the
Closing Date, the product of (i) Consolidated Interest Expense for the period
since the Closing Date multiplied by (ii) a fraction, the numerator of which is
365 and the denominator of which is the number of days in such period since the
Closing Date and (2) on and after
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the first anniversary of the Closing Date, Consolidated Interest Expense for
the Measurement period ending on or immediately prior to such Test Date.
"INTEREST PERIOD" shall mean, with respect to any LIBOR Loan, each
period commencing on the date such LIBOR Loan is made or Converted from an ABR
Loan or the last day of the next preceding Interest Period for such LIBOR Loan
and (subject to the requirements of Sections 2.01(a), 2.01(b), 2.01(c) and
2.09) ending on the numerically corresponding day in the first, second, third
or sixth calendar month or, if available to each Lender, the ninth or twelfth
calendar month thereafter or, in the case of a seven-day LIBOR Loan, the
seventh day thereafter, as Borrower may select as provided in Section 4.05,
except that each Interest Period that commences on the last Business Day of a
calendar month (or on any day for which there is no numerically corresponding
day in the appropriate subsequent calendar month) shall end on the last
Business Day of the appropriate subsequent calendar month. Notwithstanding the
foregoing: (i) if any Interest Period for any Revolving Credit Loan would
otherwise end after the Revolving Credit Commitment Termination Date, such
Interest Period shall end on the Revolving Credit Commitment Termination Date;
(ii) no Interest Period for any Term Loan may commence before and end after any
Principal Payment Date, unless, after giving effect thereto, the aggregate
principal amount of the Term Loans having Interest Periods that end after such
Principal Payment Date shall be equal to or less than the aggregate principal
amount of the Term Loans scheduled to be outstanding after giving effect to the
payments of principal required to be made on such Principal Payment Date;
(iii) each Interest Period that would otherwise end on a day that is not a
Business Day shall end on the next succeeding Business Day (or, if such next
succeeding Business Day falls in the next succeeding calendar month, on the
next preceding Business Day); and (iv) notwithstanding clauses (i) and (ii)
above, no Interest Period shall have a duration of less than one month and, if
the Interest Period for any LIBOR Loan would otherwise be a shorter period,
such Loan shall not be available hereunder as a LIBOR Loan for such period;
PROVIDED, HOWEVER, that the foregoing shall not prohibit an Interest Period of
seven days pursuant to and in accordance with Section 4.05.
"INTEREST RATE CERTIFICATE" shall mean an Officers' Certificate
substantially in the form of EXHIBIT C, delivered pursuant to Section 9.01(e),
demonstrating in reasonable detail the calculation of the Total Leverage Ratio
as of the last day of the Measurement Period then last ended on or immediately
prior to the date such certificate is required to be delivered.
"INTEREST RATE PROTECTION AGREEMENT" shall mean, for any Person, an
interest rate swap, cap or collar agreement or similar arrangement between such
Person and one or more financial institutions providing for the transfer or
mitigation of interest risks either generally or under specific contingencies.
"INTERNALLY GENERATED FUNDS" shall mean funds not generated from the
proceeds of any Loan, Debt Issuance, Equity Issuance, Disposition, insurance
recovery or Indebtedness (in each case without regard to the exclusions from
the definition thereof) (other than sales of inventory in the ordinary course
of business).
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"INVESTMENT" shall mean, for any Person: (a) the acquisition
(whether for cash, Property, services or securities or otherwise) of Equity
Interests, bonds, notes, debentures or other securities of any other Person;
(b) the making of any deposit with, or advance, loan or other extension of
credit to, any other Person (including the purchase of Property from another
Person subject to an understanding or agreement, contingent or otherwise, to
resell such Property to such Person); (c) any capital contribution to (by means
of any transfer of cash or other Property to others or any payment for Property
or services for the account or use of others) any other Person; (d) the
entering into, or direct or indirect incurrence, of any Guaranty Obligation
with respect to Indebtedness or other liability of any other Person; (e) the
entering into of any Swap Contract; or (f) any agreement to make any Investment
(including any "short sale" or any sale of any securities at a time when such
securities are not owned by the Person entering in to such sale).
"INVESTOR DEBT SECURITIES" shall mean the 12% Senior Discount Notes
due 2010 of Atrium Holdings issued pursuant to the Investor Debt Securities
Documents.
"INVESTOR DEBT SECURITIES DOCUMENTS" shall mean the Investor Debt
Securities, the Investor Debt Securities Indenture, the Investor Escrow
Agreement, the purchase agreement among GEIPPP II, Ardatrium and Atrium
Holdings dated as of the Closing Date and any subsequent purchase agreement
relating to the further issuance upon consummation of the Change of Control
Offer of Investor Debt Securities generating gross proceeds equal to the
Investor Utilized Amount, any registration rights agreement relating thereto
and all other documents relating thereto, as any such documents may be amended
and in effect from time to time in accordance with their terms and this
Agreement.
"INVESTOR DEBT SECURITIES FINANCING" shall mean the issuance and sale
of the Investor Debt Securities to GEIPPP II on the Closing Date resulting in
gross proceeds to Atrium Holdings of $20.0 million.
"INVESTOR DEBT SECURITIES INDENTURE" shall mean the Indenture among
Atrium Holdings, as issuer, and United States Trust Company of New York, as
trustee, dated as of the Closing Date, as such may be amended and in effect
from time to time in accordance with its terms and this Agreement.
"INVESTOR ESCROW AGREEMENT" shall mean the Investor Escrow Agreement
substantially in the form of EXHIBIT F-2 among Borrower, Atrium Holdings,
Ardatrium, GEIPPP II, the Administrative Agent and State Street Bank and Trust
Company, N.A., as escrow agent, as such may be amended and in effect from time
to time in accordance with its terms and this Agreement.
"INVESTOR ESCROWED AMOUNT" shall mean $25.0 million in cash.
"INVESTOR ESCROW FUNDING" shall mean the funding of the Investor
Escrowed Amount by GEIPPP II and Ardatrium into escrow pursuant to the Investor
Escrow Agreement on the Closing Date.
"INVESTOR UTILIZED AMOUNT" shall mean that portion of the Investor
Escrowed Amount released to the trustee under the Existing Notes Indenture
pursuant to the terms of the Investor Escrow
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Agreement to fund in part the purchase price for the Existing Notes that are
put to Borrower in the Change of Control Offer.
"INVESTORS" shall mean Ardshiel, Inc. ("ARDSHIEL") and GE Investment
Private Placement Partners II, Limited Partnership ("GEIPPP II").
"ISSUING LENDER" shall mean BankBoston, N.A. or any of its
Affiliates, or such other Lender or Lenders selected by Borrower reasonably
satisfactory to the Administrative Agent, as the issuer of Letters of Credit
under Section 2.03, together with its successors and assigns in such capacity.
"JOINDER AGREEMENT" shall mean a Joinder Agreement substantially in
the form of EXHIBIT K.
"LEAD ARRANGER" see the introduction to this Agreement.
"LEASE" shall mean any lease, sublease, franchise agreement, license,
occupancy or concession agreement.
"LENDER" and "LENDERS" see the introduction to this Agreement.
"LETTER OF CREDIT" see Section 2.03.
"LETTER OF CREDIT DOCUMENTS" shall mean, with respect to any Letter
of Credit, collectively, any other agreements, instruments, guarantees or other
documents (whether general in application or applicable only to such Letter of
Credit) governing or providing for (a) the rights and obligations of the
parties concerned or at risk with respect to such Letter of Credit or (b) any
collateral security for any of such obligations, each as the same may be
modified and supplemented and in effect from time to time.
"LETTER OF CREDIT INTEREST" shall mean, for each Revolving Credit
Lender, such Lender's participation interest (or, in the case of the Issuing
Lender, the Issuing Lender's retained interest) in the Issuing Lender's
liability under Letters of Credit and such Lender's rights and interests in
Reimbursement Obligations and fees, interest and other amounts payable in
connection with Letters of Credit and Reimbursement Obligations.
"LETTER OF CREDIT LIABILITY" shall mean, without duplication, at any
time and in respect of any Letter of Credit, the sum of (a) the undrawn face
amount of such Letter of Credit, PLUS (b) the aggregate unpaid principal amount
of all Reimbursement Obligations of Borrower at such time due and payable in
respect of all drawings made under such Letter of Credit.
"LIBOR BASE RATE" shall mean, with respect to any LIBOR Loan for any
Interest Period therefor, the rate PER ANNUM determined by the Administrative
Agent to be the arithmetic mean (rounded to the nearest 1/100th of 1%) of the
offered rates for deposits in Dollars with a term comparable to such Interest
Period that appears on the Dow Jones Page 3750 (as defined below) at
approxi-
-21-
mately 11:00 a.m., London, England time, on the second full Business Day
preceding the first day of such Interest Period; PROVIDED, HOWEVER, that (i)
if no comparable term for an Interest Period is available, the LIBOR Base
Rate shall be determined using the weighted average of the offered rates for
the two terms most nearly corresponding to such Interest Period and (ii) if
there shall at any time no longer exist a Telerate British Bankers Assoc.
Interest Settlement Rates Page, "LIBOR BASE RATE" shall mean, with respect to
each day during each Interest Period pertaining to LIBOR Loans comprising
part of the same Borrowing, the rate PER ANNUM equal to the rate at which the
Administrative Agent is offered deposits in Dollars at approximately 11:00
a.m., London, England time, two Business Days prior to the first day of such
Interest Period in the London interbank market for delivery on the first day
of such Interest Period for the number of days comprised therein and in an
amount comparable to its portion of the amount of such LIBOR Loan to be
outstanding during such Interest Period. "DOW JONES PAGE 3750" shall mean
the display designated as Page 3750 on the Dow Jones (or such other page as
may replace such page on such service for the purpose of displaying the rates
at which Dollar deposits are offered by leading banks in the London interbank
deposit market).
"LIBOR LOANS" shall mean Loans that bear interest at rates based on
rates referred to in the definition of LIBOR Base Rate in this Section 1.01.
"LIBOR RATE" shall mean, for any LIBOR Loan for any Interest Period
therefor, a rate PER ANNUM (rounded upwards, if necessary, to the nearest 1/100
of 1%) determined by the Administrative Agent to be equal to the LIBOR Base
Rate for such Loan for such Interest Period divided by 1 minus the Reserve
Requirement (if any) for such Loan for such Interest Period.
"LIEN" shall mean, with respect to any Property, any mortgage, lien,
pledge, claim, charge, security interest or encumbrance of any kind, any other
type of preferential arrangement in respect of such Property having the effect
of a security interest or any filing consented to by any Company of any
financing statement under the UCC or any other similar notice of Lien under any
similar notice or recording statute of any Governmental Authority consented to
by any Company, including any easement, right-of-way or other encumbrance on
title to Real Property, and any agreement to give any of the foregoing. For
purposes of the Credit Documents, a Person shall be deemed to own subject to a
Lien any Property that it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement (other than an operating lease) relating to such
Property.
"LOANS" shall mean the Revolving Credit Loans and the Term Loans.
"LOSSES" of any Person shall mean the losses, liabilities, claims
(including those based upon negligence, strict or absolute liability and
liability in tort), damages, reasonable expenses, obligations, penalties,
actions, judgments, encumbrances, liens, penalties, fines, suits, reasonable
and documented costs or disbursements of any kind or nature whatsoever
(including reasonable fees and expenses of counsel in connection with any
Proceeding commenced or threatened in writing, whether or not such Person shall
be designated a party thereto) at any time (including following the payment of
the Obligations) incurred by, imposed on or asserted against such Person.
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"MAJORITY LENDERS" shall mean (i) at any time prior to the Closing
Date, Lenders holding at least a majority of the aggregate amount of the
Commitments, and (ii) at any time after the Closing Date, Lenders holding at
least a majority of the sum of (without duplication) (a) the aggregate
principal amount of outstanding Loans (other than Swing Loans), PLUS (b) the
aggregate amount of all Letter of Credit Liabilities, PLUS (c) the aggregate
Unutilized Revolving Credit Commitments then in effect, PLUS (d) in the case of
the Swing Loan Lender only, the aggregate amount of Swing Loans then
outstanding.
"MAJORITY REVOLVING CREDIT LENDERS" shall mean (i) at any time prior
to the Closing Date, Lenders holding at least a majority of the aggregate
amount of the Revolving Credit Commitments and (ii) at any time after the
Closing Date, Lenders holding at least a majority of the sum of (without
duplication) (a) the aggregate principal amount of outstanding Revolving Credit
Loans, PLUS (b) the aggregate amount of all Letter of Credit Liabilities, PLUS
(c) the aggregate Unutilized Revolving Credit Commitments then in effect, PLUS
(d) in the case of the Swing Loan Lender only, the aggregate amount of Swing
Loans then outstanding.
"MAJORITY TRANCHE B TERM LOAN LENDERS" shall mean (i) at any time
prior to the Closing Date, Lenders holding at least a majority of the Tranche B
Term Loan Commitments and (ii) at any time after the Closing Date, Lenders
holding at least a majority of the aggregate principal amount of outstanding
Tranche B Term Loans.
"MAJORITY TRANCHE C TERM LOAN LENDERS" shall mean (i) at any time
prior to the Closing Date, Lenders holding at least a majority of the Tranche C
Term Loan Commitments and (ii) at any time after the Closing Date, Lenders
holding at least a majority of the aggregate principal amount of outstanding
Tranche C Term Loans.
"MANAGEMENT AGREEMENT" shall mean the management agreement dated as
of October 2, 1998 among Ardshiel, Parent, Atrium Holdings and Borrower, as
such agreement may be amended and in effect from time to time in accordance
with its terms and this Agreement.
"MARGIN STOCK" shall mean margin stock within the meaning of
Regulations T, U and X.
"MATERIAL ADVERSE CHANGE" shall mean, with respect to any Person, a
material adverse change, or any condition or event that has resulted or could
reasonably be expected to result in a material adverse change, in the business,
operations, financial condition or results of operations of such Person,
together with the Subsidiaries taken as a whole. Unless otherwise indicated,
Material Adverse Change refers to Borrower and the Subsidiaries taken as a
whole.
"MATERIAL ADVERSE EFFECT" shall mean, any of (a) a material adverse
effect, or any condition or event that has resulted or could reasonably be
expected to result in a material adverse effect, on the business, operations,
financial condition or results of operations of Borrower, together with the
Subsidiaries taken as a whole, (b) a material adverse effect on the ability of
the Obligors to consummate in a timely manner the Transactions or to perform
any of their material obligations under any Credit Document or (c) an adverse
effect on the legality, binding effect or enforceability of any
-23-
material provision of any Credit Document or any of the material rights and
remedies of the Lenders, the Issuing Lender or Lead Arrangers thereunder. In
determining whether the occurrence of any individual event or the existence
of any individual condition would, or the failure of any individual event to
occur or any individual condition to exist would, have a Material Adverse
Effect, notwithstanding that the occurrence of such individual event or the
existence of such individual condition does not, or the failure to occur of
such individual event or such individual condition to exist does not, of
itself have such effect, a Material Adverse Effect shall be deemed to have
occurred if the cumulative effect of such event or condition or failure of
event or condition and all other then existing events or conditions and
failures or events or conditions would have a Material Adverse Effect.
"MEASUREMENT PERIOD" shall mean the most recent trailing four fiscal
quarters of Borrower for which financial statements have been, or should have
been, provided pursuant to Section 9.01(a) or (b); PROVIDED, HOWEVER, that for
purposes of Section 7.01(xviii), the Measurement Period shall be the four
fiscal quarters ended June 30, 1998.
"MERGER" shall mean the merger on the Closing Date of Atrium Holdings
with and into Merger Sub, with Atrium Holdings as the survivor, pursuant to and
in accordance with the terms of the Merger Agreement.
"MERGER AGREEMENT" shall mean the Agreement and Plan of Merger dated
as of August 3, 1998 among Parent, Merger Sub and Atrium Holdings, as such may
be amended and in effect from time to time in accordance with its terms and
this Agreement.
"MERGER SUB" shall mean D and W Acquisition Corp., a Delaware
corporation and a Wholly Owned Subsidiary of Parent.
"MORTGAGE" shall mean an agreement, including, but not limited to, a
mortgage, deed of trust or any other document, creating and evidencing a Lien
on a Mortgaged Real Property, which shall be substantially in the form of
EXHIBIT D, with such schedules and including such provisions as shall be
necessary to conform such document to applicable or local law or as shall be
customary under local law, as the same may at any time be amended in accordance
with the terms thereof and hereof.
"MORTGAGED REAL PROPERTY" shall mean each Real Property set forth on
SCHEDULE 7.01(xx) which shall be subject to a Mortgage delivered on the Closing
Date or thereafter (if any) pursuant to Sections 7.01(xx) and 9.12.
"MULTIEMPLOYER PLAN" shall mean at any time a multiemployer plan
within the meaning of Section 4001(a)(3) of ERISA (i) to which any member of
the ERISA Group is then making or accruing an obligation to make contributions
while a member of the ERISA Group, (ii) to which any member of the ERISA Group
has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group during
such five year period, or (iii) with respect to which any Company is reasonably
likely to incur liability.
"NAIC" shall mean the National Association of Insurance
Commissioners.
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"NET AVAILABLE PROCEEDS" shall mean:
(i) in the case of any Disposition Event, the amount of Net Cash
Payments received by any Company in connection with such Disposition Event
less deductions for amounts applied to (x) Indebtedness (other than
Indebtedness hereunder) secured by Liens permitted hereunder on the assets
sold, (y) taxes and (z) costs of sale;
(ii) in the case of any Casualty Event, the aggregate amount of
proceeds of insurance, condemnation awards and other compensation received
by any Company in respect of such Casualty Event net of (A) fees and
expenses incurred by such Company in connection with recovery thereof,
(B) repayments of Indebtedness (other than Indebtedness hereunder) to the
extent secured by a Lien on such Property that is permitted hereunder, and
(C) any taxes (including income, transfer, stamp, duty, customs,
withholding and any other taxes) paid or payable by any Company in respect
of the amount so recovered (after application of all credits and other
offsets); and
(iii) in the case of any Equity Issuance or any Debt Issuance, the
aggregate amount of all cash received by any Company in respect thereof
net of all investment banking fees, discounts and commissions, legal fees,
consulting fees, accountants' fees, underwriting discounts and commissions
and other customary fees and expenses, actually incurred and
satisfactorily documented in connection therewith.
"NET CASH PAYMENTS" shall mean, with respect to any Disposition
Event, the aggregate amount of all cash payments (including any cash payments
received by way of deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or otherwise,
but only as and when received) received by any Company directly or indirectly
in connection with such Disposition Event; PROVIDED, HOWEVER, that Net Cash
Payments shall be net (without duplication) of (i) the amount of all fees and
expenses paid by any Company in connection with such Disposition Event (the
"RELEVANT DISPOSITION"); (ii) any taxes (including income, transfer, stamp,
duty, customs, withholding and any other taxes) paid or estimated to be payable
by any Company as a result of the Relevant Disposition (after application of
all credits and other offsets); (iii) any repayments by any Company of
Indebtedness other than Indebtedness hereunder to the extent that (a) such
Indebtedness is secured by a Lien on the Property that is the subject of the
Relevant Disposition that is permitted hereunder and (b) the transferee of (or
holder of a Lien on) such Property requires that such Indebtedness be repaid as
a condition to the purchase or sale of such Property; and (iv) amounts required
to be paid to any Person (other than any Company) owning a beneficial interest
in the assets subject to such Relevant Disposition.
"NEW WITHHOLDING REGULATIONS" see Section 5.06(b).
"NON-U.S. LENDER" see Section 5.06(b).
"NOTES" shall mean the Revolving Credit Notes, Term Loan Notes and
the Swing Loan Note.
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"NOTICE OF ASSIGNMENT" shall mean a notice of assignment pursuant to
Section 12.06 substantially in the form of EXHIBIT H.
"NOTICE OF BORROWING" shall mean a notice of borrowing substantially
in the form of EXHIBIT I.
"OBLIGATIONS" shall mean all amounts, direct or indirect, contingent
or absolute, of every type or description, and at any time existing, owing to
any Creditor or any of its Related Parties or their respective permitted
successors, transferees or assignees pursuant to the terms of any Credit
Document or any Swap Contract or secured by any of the Security Documents,
whether or not the right of such Person to payment in respect of such
obligations and liabilities is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured and whether or not such claim is discharged, stayed or
otherwise affected by any bankruptcy case or insolvency or liquidation
proceeding.
"OBLIGORS" shall mean Borrower and the Guarantors.
"OFFICERS' CERTIFICATE" shall mean, as applied to any corporation, a
certificate executed on behalf of such corporation by its Chairman of the Board
(if an officer) or its Chief Executive Officer or its Chief Financial Officer
or its President or one of its Vice Presidents (or an equivalent officer) and
by its Chief Financial Officer (if not already a signatory), Vice President-
Finance or its Treasurer (or an equivalent officer) or any Assistant Treasurer
in their official (and not individual) capacities; PROVIDED, HOWEVER, that
every Officers' Certificate with respect to the compliance with a condition
precedent to the making of any Loan or the taking of any other action hereunder
shall include (i) a statement that the officers making or giving such Officers'
Certificate have read such condition and any definitions or other provisions
contained in this Agreement relating thereto, and (ii) a statement as to
whether, in the opinion of the signers, such condition has been complied with.
"ORIGINAL LENDERS" shall mean the Lenders named on the signature
pages hereof who were Lenders at the Closing Date.
"ORGANIC DOCUMENT" shall mean, relative to any Person, its
certificate of incorporation, its by-laws, its partnership agreement, its
memorandum and articles of association, share designations or similar
organization documents and all shareholder agreements, voting trusts and
similar arrangements applicable to any of its authorized shares of Equity
Interests.
"OTHER TAXES" see Section 5.06(c).
"PARENT" see the introduction to this Agreement.
"PARTICIPANT" see Section 12.06(c).
"PAYMENT DATE" shall mean any Principal Payment Date and each date on
which interest is due and payable on any Loan.
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"PAYOR" see Section 4.06.
"PBGC" shall mean the United States Pension Benefit Guaranty
Corporation or any successor thereto.
"PERMITS" see Section 8.17.
"PERMITTED ACQUISITION" shall mean any Acquisition effected in
compliance with Section 9.06(i) or (m).
"PERMITTED HOLDERS" means each of the Investors and any Affiliates
thereof.
"PERMITTED INVESTMENTS" shall mean, for any Person: (a) direct
obligations of the United States of America, or of any agency thereof, or
obligations guaranteed as to principal and interest by the United States of
America, or by any agency thereof, in either case maturing not more than one
year from the date of acquisition thereof by such Person; (b) time deposits,
certificates of deposit or bankers' acceptances (including eurodollar deposits)
issued by any bank or trust company organized under the laws of the United
States of America or any state thereof and having capital, surplus and
undivided profits of at least $500.0 million and a deposit rating of investment
grade; (c) commercial paper rated A-1 or better by Standard & Poor's
Corporation or P-1 or better by Moody's Investors Service, Inc., respectively,
maturing not more than 180 days from the date of acquisition thereof by such
Person; (d) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (a) above entered into
with a bank meeting the qualifications described in clause (b) above; (e)
securities with maturities of six months or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the
United States of America, or by any political subdivision or taxing authority
thereof, and rated at least A by Standard & Poor's Corporation or A by Moody's
Investors Service, Inc.; or (f) money market mutual funds that invest primarily
in the foregoing items.
"PERMITTED LIENS" see Section 9.07.
"PERMITTED REFINANCING" shall mean, with respect to any Indebtedness
or Contingent Obligation, any refinancing thereof, PROVIDED, HOWEVER, that (w)
no Event of Default shall have occurred and be continuing or would arise
therefrom, (x) any such refinancing Indebtedness shall (I) not be on financial
and other terms that are taken as a whole materially more onerous (as
determined by Borrower and the Lead Arranger) to any Company or Creditor than
the Indebtedness or Contingent Obligation being refinanced and shall not have
defaults, rights or remedies more burdensome (as determined by Borrower and the
Lead Arranger) to any Company or Creditor than the Indebtedness being
refinanced, (II) not have a stated maturity or weighted average life that is
shorter than the Indebtedness or Contingent Obligation being refinanced, (III)
if the Indebtedness or Contingent Obligation being refinanced is subordinated
by its terms or by the terms of any agreement or instrument relating to such
Indebtedness or Contingent Obligation, be at least as subordinate to the
Obligations as the Indebtedness or Contingent Obligation being refinanced (and
unsecured if the refinanced Indebtedness is unsecured), and (IV) be in
principal amount that does not exceed the principal amount so refinanced, plus
the lesser of (1) the stated amount of any premium or other payment required to
be paid
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in connection with such refinancing pursuant to the terms of the Indebtedness
or Contingent Obligation being refinanced and (2) the amount of premium or
other payment actually paid at such time to refinance the Indebtedness, PLUS,
in either case, the amount of fees and reasonable expenses of any Company
incurred in connection with such refinancing, (y) the sole obligor on such
refinancing Indebtedness or Contingent Obligation shall be the original
obligor on such Indebtedness or Contingent Obligation being refinanced;
PROVIDED, HOWEVER, that any guarantor of the Indebtedness or Contingent
Obligation being refinanced shall be permitted to guarantee the refinancing
Indebtedness, and (z) any refinancing of the Investor Debt Securities (or any
refinancing thereof) shall provide for non-cash interest through September
30, 2003 on terms and conditions reasonably satisfactory to the Lead Arranger.
"PERSON" shall mean any individual, corporation, company, voluntary
association, partnership, limited liability company, joint venture, trust,
unincorporated organization or government (or any agency, instrumentality or
political subdivision thereof).
"PLAN" shall mean at any time an employee pension benefit plan (other
than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the Code or Section 302 of
ERISA and is maintained or contributed to by any member of the ERISA Group or
with respect to which any Company could incur liability.
"PLEDGED COLLATERAL" shall have the meaning set forth in the Security
Agreement.
"PRIME RATE" shall mean for any day, a rate PER ANNUM that is equal
to the corporate base rate of interest established by the Administrative Agent
from time to time, changing when and as said corporate base rate changes. The
corporate base rate is not necessarily the lowest rate charged by the
Administrative Agent to its customers.
"PRINCIPAL OFFICE" shall mean the principal office of the
Administrative Agent, located on the date hereof at BankBoston, N.A.,
100 Federal Street, Mail Stop 01-08-05, Boston, Massachusetts 02110, or such
other office as may be designated by the Administrative Agent.
"PRINCIPAL PAYMENT DATE" shall mean, with respect to any Term Loan,
each Quarterly Date or other date set forth on Schedule 3.01(b) on which a
payment of principal is due with respect to such Term Loan.
"PRIOR LIENS" shall mean Liens which, pursuant to the provisions of
any Security Document, are or may be superior to the Lien of such Security
Document.
"PROCEEDING" shall mean any claim, counterclaim, action, judgment,
suit, hearing, governmental investigation, arbitration or proceeding, including
by or before any Governmental Authority and whether judicial or administrative.
"PRO FORMA BALANCE SHEETS" see Section 8.02(d).
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"PROPERTY" shall mean any right, title or interest in or to
property or assets of any kind whatsoever, whether real, personal or mixed
and whether tangible or intangible and including Equity Interests or other
ownership interests of any Person.
"QUALIFIED CAPITAL STOCK" shall mean with respect to any Person any
Equity Interests of such Person that is not Disqualified Capital Stock.
"QUALIFIED SUBSIDIARY" shall mean any Wholly Owned Subsidiary that
is an Obligor.
"QUARTER" shall mean each three month period ending on March 31,
June 30, September 30 and December 31.
"QUARTERLY DATES" shall mean the last Business Day of March, June,
September and December in each year, commencing with the last Business Day of
December, 1998.
"REAL PROPERTY" shall mean all right, title and interest of any
Company (including, without limitation, any leasehold estate) in and to a
parcel of real property owned or operated by any Company, whether by lease,
license or other use agreement, together with, in each case, all improvements
and appurtenant fixtures, equipment, personal property, easements and other
property and rights incidental to the ownership, lease or operation thereof
or thereon.
"REDEEM" shall mean redeem, repurchase, repay, defease or otherwise
acquire or retire for value; and "REDEMPTION" and "REDEEMED" have correlative
meanings.
"REFINANCE" shall mean refinance, renew, extend, replace, defease
or refund, in whole or in part, including successively; and "REFINANCING" and
"REFINANCED" have correlative meanings.
"REFINANCED DEBT" shall mean the Indebtedness of and the
commitments to make extensions of credit to any Company under the existing
Indebtedness listed on SCHEDULE 1.01(e).
"REGISTER" see Section 2.08.
"REGULATION D" shall mean Regulation D (12 C.F.R. Part 204) of the
Board of Governors of the United States Federal Reserve System.
"REGULATIONS T, U AND X" shall mean, respectively, Regulation T (12
C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) and Regulation X (12
C.F.R. Part 224) of the Board of Governors of the United States Federal
Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
"REGULATORY CHANGE" shall mean, with respect to any Lender, any
change after the date hereof in United States Federal, state or foreign law
or regulations (including Regulation D) or the adoption or making after such
date of any interpretation, directive or request applying to a class of banks
or other financial institutions including such Lender of or under any
Federal, state or foreign law or regulations (whether or not having the force
of law and whether or not failure to comply there-
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with would be unlawful) by any court or governmental or monetary authority or
any other regulatory agency with proper authority, including non-governmental
agencies or bodies, charged with the interpretation or administration thereof
or by the NAIC.
"REIMBURSEMENT OBLIGATIONS" shall mean, at any time, the
obligations of Borrower then outstanding, or that may thereafter arise in
respect of all Letters of Credit then outstanding, to reimburse amounts paid
by the Issuing Lender in respect of any drawings under a Letter of Credit.
"RELATED PARTIES" see Section 11.01.
"RELEASE" shall mean any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the environment.
"REPLACED LENDER" see Section 2.11.
"REPLACEMENT LENDER" see Section 2.11.
"REQUIRED PAYMENT" see Section 4.06.
"REQUIREMENT OF LAW" shall mean as to any Person, the Certificate
of Incorporation and By-Laws or other organizational or governing documents
of such Person, and any law, treaty, rule or regulation or determination of
an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its Property or to which
such Person or any of its Property is subject.
"RESERVE REQUIREMENT" shall mean, for any Interest Period for any
LIBOR Loan, the average maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by member banks of the United
States Federal Reserve System in New York City with deposits exceeding one
billion Dollars against "Eurocurrency liabilities" (as such term is used in
Regulation D).
"RESET DATE" see the definition of Applicable Margin.
"RESTRICTED DEBT PAYMENT" see Section 9.25.
"RESPONSIBLE OFFICER" shall mean the chief executive officer of
Borrower and the president of Borrower (if not the chief executive officer)
and, with respect to financial matters, the chief financial officer of
Borrower, any vice-president-finance or treasurer (or an equivalent officer).
"REVOLVING CREDIT COMMITMENT" shall mean, for each Revolving Credit
Lender, the obligation of such Lender to make Revolving Credit Loans in an
aggregate principal amount at any one time outstanding up to but not
exceeding the amount set opposite the name of such Lender on ANNEX A under
the caption "Revolving Credit Commitment" (as the same may be reduced from
time to time pursuant to Section 2.04 or changed pursuant to Section
12.06(b)). The initial aggregate principal amount of the Revolving Credit
Commitments is $30.0 million.
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"REVOLVING CREDIT COMMITMENT PERCENTAGE" shall mean, with respect
to any Revolving Credit Lender, the ratio of (a) the amount of the Revolving
Credit Commitment of such Lender to (b) the aggregate amount of the Revolving
Credit Commitments of all of the Lenders.
"REVOLVING CREDIT COMMITMENT TERMINATION DATE" shall mean June 30,
2004.
"REVOLVING CREDIT COMMITMENTS" shall mean the aggregate sum of the
Revolving Credit Commitments of all of the Revolving Credit Lenders.
"REVOLVING CREDIT FACILITY" shall mean the credit facility
comprising the Revolving Credit Commitment of all of the Revolving Credit
Lenders.
"REVOLVING CREDIT LENDERS" shall mean (a) on the date hereof, the
Lenders having Revolving Credit Commitments on the signature pages hereof and
(b) thereafter, the Lenders from time to time holding Revolving Credit Loans
and Revolving Credit Commitments after giving effect to any assignments
thereof permitted by Section 12.06(b).
"REVOLVING CREDIT LOANS" see Section 2.01(a).
"REVOLVING CREDIT NOTES" shall mean the promissory notes provided
for by Section 2.08(a) and all promissory notes delivered in substitution or
exchange therefor, in each case as the same shall be modified and
supplemented and in effect from time to time.
"SECURITY AGREEMENT" shall mean a Security Agreement substantially
in the form of EXHIBIT E among the Obligors and the Administrative Agent, as
the same may be amended in accordance with the terms thereof and hereof or
such other agreements reasonably acceptable to the Administrative Agent as
shall be necessary to comply with applicable Requirements of Law and
effective to grant to the Administrative Agent a perfected first priority
security interest (subject to Prior Liens, if any) in the Pledged Collateral
covered thereby.
"SECURITY DOCUMENTS" shall mean the Security Agreement, the
Mortgages, the Credit Facility Escrow Agreement and each other security
document or pledge agreement required by applicable local law to grant a
valid, perfected security interest in any property or asset acquired or
developed pursuant to a Permitted Acquisition, and all UCC or other financing
statements or instruments of perfection required by this Agreement, the
Security Agreement, any Mortgage or the Credit Facility Escrow Agreement to
be filed with respect to the security interests in Property and fixtures
created pursuant to the Security Agreement, any Mortgage or the Credit
Facility Escrow Agreement and any other document or instrument utilized to
pledge as collateral for the Obligations any Property of whatever kind or
nature.
"SENIOR DEBT" shall mean, at any date, Total Debt, LESS
Subordinated Debt of Borrower and the Subsidiaries on a consolidated basis.
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"SENIOR LEVERAGE RATIO" shall mean, for any Test Date, the ratio of
(x) Senior Debt at such Test Date to (y) Consolidated EBITDA for the
Measurement Period ended on or immediately prior to such Test Date.
"SOLVENT" and "SOLVENCY" shall mean, for any Person on a particular
date, that on such date (a) the fair value of the Property of such Person is
greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (b) the present fair salable value of
the assets of such Person is not less than the amount that will be required
to pay the probable liability of such Person on its debts as they become
absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts and liabilities beyond such Person's
ability to pay as such debts and liabilities mature, (d) such Person is not
engaged in a business or a transaction, and is not about to engage in a
business or a transaction, for which such Person's Property would constitute
an unreasonably small capital and (e) such Person is able to pay its debts as
they become due and payable.
"STATE AND LOCAL REAL PROPERTY DISCLOSURE REQUIREMENTS" shall mean
any state or local laws requiring notification of the buyer of real property,
or notification, registration, or filing to or with any state or local
agency, prior to the sale of any Real Property or transfer of control of an
establishment, of the actual or threatened presence or release into the
environment, or the use, disposal, or handling of Hazardous Materials on, at,
under, or near the Real Property to be sold or the establishment for which
control is to be transferred.
"SUBORDINATED DEBT" shall mean the Existing Notes and any other
Indebtedness of any Company that is subordinated to any other Indebtedness of
such Company.
"SUBSIDIARY" shall mean, with respect to any Person, any
corporation, partnership or other entity of which at least a majority of the
securities or other ownership interests having by the terms thereof ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions of such corporation, partnership or other entity
(irrespective of whether or not at the time securities or other ownership
interests of any other class or classes of such corporation, partnership or
other entity shall have or might have voting power by reason of the happening
of any contingency) is at the time directly or indirectly owned or controlled
by such Person or one or more Subsidiaries of such Person or by such Person
and one or more Subsidiaries of such Person. Unless the context clearly
requires otherwise, all references to any Subsidiary shall mean a Subsidiary
of Borrower. All references to any Subsidiary of Borrower shall include all
those Persons which become Subsidiaries of Borrower upon consummation of the
Merger and the Contributions.
"SUPERMAJORITY LENDERS" shall mean (i) at any time prior to the
Closing Date, Lenders holding at least two-thirds of the aggregate amount of
the Commitments and (ii) at any time after the Closing Date, Lenders holding
at least two-thirds of the sum of (without duplication) (a) the aggregate
principal amount of outstanding Loans (other than Swing Loans), PLUS (b) the
aggregate amount of all Letter of Credit Liabilities, PLUS (c) the aggregate
unused amount of Revolving Credit Commitments then in effect, plus (d) in the
case of the Swing Loan Lender only, the aggregate amount of Swing Loans then
outstanding.
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"SUPERMAJORITY LENDERS OF THE AFFECTED CLASS" shall mean (i) at any
time prior to the Closing Date, Lenders holding at least two-thirds of the
aggregate amount of the Commitments of the applicable tranche of Term Loan
Commitments which would be affected by any modification, supplement or waiver
contemplated by clause (f) to the proviso to Section 12.04(i), and (ii) at
any time after the Closing Date, Lenders holding at least two-thirds of the
sum of the aggregate amount of the outstanding Loans of the applicable
tranche of Term Loans which would be affected by any modification, supplement
or waiver contemplated by clause (f) to the proviso to Section 12.04(i).
"SURETY INSTRUMENTS" shall mean all letters of credit (including
standby and commercial), bankers' acceptances, bank guarantees, surety bonds
and similar instruments.
"SURVEY" shall mean a survey of any Mortgaged Real Property (and
all improvements thereon): (i) prepared by a surveyor or engineer licensed
to perform surveys in the state, province or country where such Mortgaged
Real Property is located, (ii) dated (or redated) not earlier than six months
prior to the date of delivery thereof unless there shall have occurred after
the date of such survey any exterior construction on the site of such
Mortgaged Real Property, in which event such survey shall be dated (or
redated) after the completion of such construction or, if such construction
shall not have been completed as of such date of delivery, not earlier than
20 days prior to such date of delivery, (iii) certified by the surveyor (in a
manner reasonably acceptable to the Administrative Agent) to the
Administrative Agent and (iv) complying in all material respects with
Requirements of Law.
"SWAP CONTRACT" shall mean any agreement entered into in the
ordinary course of business (as a BONA FIDE hedge and not for speculative
purposes) (including any master agreement and any agreement, whether or not
in writing, relating to any single transaction) that is an interest rate swap
agreement, basis swap, forward rate agreement, commodity swap, commodity
option, forward commodity purchase agreement, equity or equity index swap or
option, bond option, interest rate option, foreign exchange agreement, rate
cap, collar or floor agreement, currency swap agreement, cross-currency rate
swap agreement, swaption, currency option or any other similar agreement
(including any option to enter into any of the foregoing) and is designed to
protect the Obligors against fluctuations in interest rates, currency
exchange rates, or similar risks (including any Interest Rate Protection
Agreement entered into pursuant to Section 9.18).
"SWING LOAN COMMITMENT" shall mean the obligation of the Swing Loan
Lender to make or continue Swing Loans hereunder in an aggregate principal
amount up to but not exceeding $5.0 million, as the same may be reduced or
terminated pursuant to Section 2.04 or Section 10, it being understood that
the Swing Loan Commitment is part of the Revolving Credit Commitment of the
Swing Loan Lender, rather than a separate, independent commitment.
"SWING LOAN LENDER" shall mean BankBoston, N.A. and its successors
and assigns in such capacity.
"SWING LOAN MATURITY DATE" shall mean the Revolving Credit
Commitment Termination Date.
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"SWING LOAN NOTE" shall mean the promissory note made by Borrower
evidencing the Swing Loans, in the form of EXHIBIT A-4.
"SWING LOANS" see Section 2.01(e).
"TAX RETURNS" see Section 8.09.
"TAX SHARING AGREEMENT" shall mean the Tax Sharing Agreement
substantially in the form of EXHIBIT O among Parent and each of the
Companies, as such may be amended and in effect from time to time in
accordance with its terms and this Agreement.
"TAXES" shall mean any and all taxes, imposts, duties, charges,
fees, levies or other charges or assessments of whatever nature, including
income, gross receipts, excise, real or personal property, sales,
withholding, social security, retirement, unemployment, occupation, use,
service, license, net worth, payroll, franchise, and transfer and recording,
imposed by the Internal Revenue Service or any taxing authority (whether
domestic or foreign, including any federal, state, U.S. possession, county,
local or foreign government or any subdivision or taxing agency thereof),
whether computed on a separate, consolidated, unitary, combined or any other
basis, including interest, fines, penalties or additions to tax attributable
to or imposed on or with respect to any such taxes, charges, fees, levies or
other assessments.
"TERM LOAN COMMITMENTS" shall mean the Tranche B Term Loan
Commitments and the Tranche C Term Loan Commitments, collectively.
"TERM LOAN FACILITIES" shall mean the credit facilities comprising
the Term Loan Commitments.
"TERM LOAN LENDERS" shall mean the Tranche B Term Loan Lenders and
the Tranche C Term Loan Lenders, collectively.
"TERM LOAN NOTES" shall mean the Tranche B Term Loan Notes and the
Tranche C Term Loan Notes, collectively.
"TERM LOAN TRANCHES" shall mean the Term Loans outstanding under
the Tranche B Term Loans and the Tranche C Term Loans, collectively, and
"TERM LOAN TRANCHE" shall mean either of them.
"TERM LOANS" shall mean the Tranche B Term Loans and the Tranche C
Term Loans, collectively.
"TEST DATE" shall mean, for any Financial Maintenance Covenant,
the last day of each fiscal quarter included within any period set forth in
the table for such Financial Maintenance Covenant. Compliance with the
Financial Maintenance Covenants shall be tested, as of each Test Date, on the
date on which financial statements pursuant to Section 9.01(a) or (b) have
been, or should have been, delivered for the applicable fiscal period.
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"TITLE COMPANY" shall mean First American Title Insurance Company
or such other title insurance or abstract company as shall be designated by
the Lead Arranger.
"TOTAL DEBT" shall mean, at any date, the aggregate amount of
Indebtedness of Borrower and its Consolidated Subsidiaries as of such date
determined on a consolidated basis in accordance with GAAP.
"TOTAL LEVERAGE RATIO" shall mean, for any Test Date, the ratio of
(x) Total Debt at such Test Date to (y) Consolidated EBITDA for the
Measurement Period ended on or immediately prior to such Test Date.
"TRANCHE B TERM LOAN COMMITMENT" shall mean, for each Tranche B
Term Loan Lender, the obligation of such Lender to make a Tranche B Term Loan
in an amount up to but not exceeding the amount set opposite the name of such
Lender on ANNEX A under the caption "Tranche B Term Loan Commitment" (as the
same may be changed pursuant to Section 12.06(b)). The initial aggregate
principal amount of the Tranche B Term Loan Commitments is $75.0 million.
"TRANCHE B TERM LOAN COMMITMENTS" shall mean the aggregate sum of
the Tranche B Term Loan Commitment of all the Lenders.
"TRANCHE B TERM LOAN LENDERS" shall mean (a) on the date hereof,
the Lenders having Tranche B Term Loan Commitments on the signature pages
hereof, and (b) thereafter, the Lenders from time to time holding Tranche B
Term Loans and Tranche B Term Loan Commitments after giving effect to any
assignments thereof permitted by Section 12.06(b).
"TRANCHE B TERM LOAN NOTES" shall mean the promissory notes
provided for by Section 2.08(a)(ii) and all promissory notes delivered in
substitution or exchange therefor, in each case as the same shall be modified
and supplemented and in effect from time to time.
"TRANCHE B TERM LOANS" shall mean the loans provided for by Section
2.01(b), which may be ABR Loans and/or LIBOR Loans.
"TRANCHE C TERM LOAN COMMITMENT" shall mean, for each Tranche C
Term Loan Lender, the obligation of such Lender to make a Tranche C Term Loan
in an amount up to but not exceeding the amount set opposite the name of such
Lender on ANNEX A under the caption "Tranche C Term Loan Commitment" (as the
same may be changed pursuant to Section 12.06(b)). The initial aggregate
principal amount of the Tranche C Term Loan Commitments is $100.0 million.
"TRANCHE C TERM LOAN COMMITMENT PERCENTAGE" shall mean, with
respect to any Tranche C Term Loan Lender, the ratio of (a) the amount of the
Tranche C Term Loan Commitment of such Lender to (b) the Tranche C Term Loan
Commitments.
"TRANCHE C TERM LOAN COMMITMENTS" shall mean the aggregate sum of
the Tranche C Term Loan Commitment of all the Lenders.
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"TRANCHE C TERM LOAN ESCROW MATURITY DATE" shall mean the earlier
of (x) the Business Day next succeeding the date of consummation of the
Change of Control Offer and (y) the 45th day after the Closing Date.
"TRANCHE C TERM LOAN ESCROW REPAYMENT AMOUNT" shall mean, at any
date, the Credit Facility Escrowed Amount LESS the Credit Facility Utilized
Amount.
"TRANCHE C TERM LOAN LENDERS" shall mean (a) on the date hereof,
the Lenders having Tranche C Term Loan Commitments on the signature pages
hereof, and (b) thereafter, the Lenders from time to time holding Tranche C
Term Loans and Tranche C Term Loan Commitments after giving effect to any
assignments thereof permitted by Section 12.06(b).
"TRANCHE C TERM LOAN NOTES" shall mean the promissory notes
provided for by Section 2.08(a)(iii) and all promissory notes delivered in
substitution or exchange therefor, in each case as the same shall be modified
and supplemented and in effect from time to time.
"TRANCHE C TERM LOANS" shall mean the loans provided for by Section
2.01(c), which may be ABR Loans and/or LIBOR Loans.
"TRANSACTION DOCUMENTS" shall mean the Merger Agreement, the
Contribution Agreements, the Investor Debt Securities Documents, the Investor
Escrow Agreement, the Change of Control Offer Documents, the Tax Sharing
Agreement and all documents related thereto and all exhibits, appendices,
schedules and annexes to any thereof.
"TRANSACTIONS" shall mean the Merger, the Contributions, the
Investor Debt Securities Financing, the Equity Contributions, the Investor
Escrow Funding, the Change of Control Offer, the Existing Debt Repayment and
the borrowings hereunder on the Closing Date.
"TYPE" see Section 1.03.
"UCC" shall mean the Uniform Commercial Code as in effect in the
applicable state or jurisdiction.
"UNUTILIZED REVOLVING CREDIT COMMITMENT" shall mean, for any
Revolving Credit Lender, at any time, the excess of such Lender's Revolving
Credit Commitment at such time over the sum of (i) the aggregate outstanding
principal amount of Revolving Credit Loans made by such Lender, (ii) such
Lender's Revolving Credit Commitment Percentage of the aggregate amount of
Letter of Credit Liabilities at such time and (iii) with respect to the Swing
Loan Lender only, the aggregate principal amount of Swing Loans then
outstanding.
"U.S. LENDER" see Section 5.06(b).
"WHOLLY OWNED SUBSIDIARY" shall mean, with respect to any Person,
any corporation, partnership or other entity of which all of the Equity
Interests (other than, in the case of a corporation, directors' qualifying
shares or nominee shares required under applicable law) are directly or
indirectly
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owned or controlled by such Person or one or more Wholly Owned Subsidiaries
of such Person or by such Person and one or more Wholly Owned Subsidiaries of
such Person. Unless the context clearly requires otherwise, all references
to any Wholly Owned Subsidiary shall mean a Wholly Owned Subsidiary of
Borrower.
"WING" see the definition of Contributed Businesses.
"WITHDRAWAL LIABILITY" shall mean liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan,
as such terms are defined in Part 1 of Subtitle E of Title IV of ERISA.
"WORKING CAPITAL" shall mean an amount determined for Borrower and
the Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP) equal to the sum of all current assets (other than
cash) less the sum of all current liabilities (other than the current portion
of long-term Indebtedness and non-cash deferred tax assets).
1.02. ACCOUNTING TERMS AND DETERMINATIONS. Except as otherwise
provided in this Agreement, all computations and determinations as to
accounting or financial matters (including financial covenants) shall be made
in accordance with GAAP consistently applied for all applicable periods, and
all accounting or financial terms shall have the meanings ascribed to such
terms by GAAP. All financial statements to be delivered pursuant to this
Agreement shall be prepared in accordance with GAAP. All financial covenants
are to be calculated in accordance with GAAP as in effect on the date hereof
unless such modifications are agreed to by the parties hereto.
1.03. CLASSES AND TYPES OF LOANS. Loans hereunder are
distinguished by "Class" and by "Type". The "CLASS" of a Loan (or of a
Commitment to make a Loan) refers to whether such Loan is a Revolving Credit
Loan, Tranche B Term Loan or Tranche C Term Loan, each of which constitutes a
Class. The "TYPE" of a Loan refers to whether such Loan is an ABR Loan or a
LIBOR Loan, each of which constitutes a Type. Loans may be identified by
both Class and Type.
1.04. RULES OF CONSTRUCTION. (a) In this Agreement and each
other Credit Document, unless the context clearly requires otherwise (or such
other Credit Document clearly provides otherwise), references to (i) the
plural include the singular, the singular the plural and the part the whole;
(ii) Persons include their respective permitted successors and assigns or, in
the case of governmental Persons, Persons succeeding to the relevant
functions of such Persons; (iii) agreements (including this Agreement),
promissory notes and other contractual instruments include subsequent
amendments, assignments, and other modifications thereto, but only to the
extent such amendments, assignments or other modifications thereto are not
prohibited by their terms or the terms of any Credit Document; (iv) statutes
and related regulations include any amendments of same and any successor
statutes and regulations; and (v) time shall be a reference to New York City
time. Where any provision herein refers to action to be taken by any Person,
or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such
Person.
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(b) In this Agreement and each other Credit Document, unless the
context clearly requires otherwise (or such other Credit Document clearly
provides otherwise), (i) "AMEND" shall mean "amend, restate, amend and
restate, supplement or modify"; and "AMENDED," "AMENDING," and "AMENDMENT"
shall have meanings correlative to the foregoing; (ii) in the computation of
periods of time from a specified date to a later specified date, "FROM" shall
mean "from and including"; "TO" and "UNTIL" shall mean "to but excluding";
and "THROUGH" shall mean "to and including"; (iii) "HEREOF," "HEREIN" and
"HEREUNDER" (and similar terms) in this Agreement or any other Credit
Document refer to this Agreement or such other Credit Document, as the case
may be, as a whole and not to any particular provision of this Agreement or
such other Credit Document; (iv) "INCLUDING" (and similar terms) shall mean
"including without limitation" (and similarly for similar terms); (v) "OR"
has the inclusive meaning represented by the phrase "and/or"; (vi)
"SATISFACTORY TO" any Creditor shall mean in form, scope and substance and on
terms and conditions reasonably satisfactory to such Creditor; (vii)
references to "THE DATE HEREOF" shall mean the date first set forth above;
and (viii) "ASSET" and "PROPERTY" shall have the same meaning and effect and
refer to all tangible and intangible assets and property, whether real,
personal or mixed and of every type and description.
(c) In this Agreement unless the context clearly requires
otherwise, any reference to (i) an Annex, Exhibit or Schedule is to an Annex,
Exhibit or Schedule, as the case may be, attached to this Agreement and
constituting a part hereof, and (ii) a Section or other subdivision is to a
Section or such other subdivision of this Agreement.
(d) No doctrine of construction of ambiguities in agreements or
instruments against the interests of the party controlling the drafting
thereof shall apply to any Credit Document.
Section 2. COMMITMENTS, LETTERS OF CREDIT, FEES, REGISTER,
PREPAYMENTS AND REPLACEMENT OF LENDERS.
2.01. LOANS.
(a) REVOLVING CREDIT LOANS. Each Revolving Credit Lender
severally agrees, on the terms and conditions of this Agreement, to make
revolving credit loans (the "REVOLVING CREDIT LOANS") to Borrower in Dollars
during the period from and including the Closing Date to but not including
the Revolving Credit Commitment Termination Date in an aggregate principal
amount at any one time outstanding not exceeding the amount of the Revolving
Credit Commitment of such Lender as in effect from time to time; PROVIDED,
HOWEVER, that in no event shall the sum of the aggregate principal amount of
(without duplication) all Revolving Credit Loans then outstanding, PLUS the
aggregate principal amount of Swing Loans then outstanding, PLUS the
aggregate amount of all Letter of Credit Liabilities at any time exceed the
aggregate amount of the Revolving Credit Commitments as in effect at such
time. Subject to the terms and conditions of this Agreement, during such
period Borrower may borrow, repay and reborrow the amount of the Revolving
Credit Commitments by means of ABR Loans and LIBOR Loans and may Convert
Revolving Credit Loans of one Type into Revolving Credit Loans of another
Type (as provided in Section 2.09) or Continue Revolving Credit Loans of one
Type as Revolving Credit Loans of the same Type (as provided in Section 2.09).
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(b) TRANCHE B TERM LOANS. Each Tranche B Term Loan Lender
severally agrees, on the terms and conditions of this Agreement, to make a
single term loan to Borrower in Dollars on the Closing Date in an aggregate
principal amount equal to the Tranche B Term Loan Commitment of such Lender,
such loan to be used to finance the Transactions and to pay related fees and
expenses. Subject to the terms and conditions of this Agreement, thereafter
Borrower may Convert Tranche B Term Loans of one Type into Tranche B Term
Loans of another Type (as provided in Section 2.09) or Continue Tranche B
Term Loans of one Type as Tranche B Term Loans of the same Type (as provided
in Section 2.09).
Tranche B Term Loans that are repaid or prepaid may not be
reborrowed.
(c) TRANCHE C TERM LOANS. Each Tranche C Term Loan Lender
severally agrees, on the terms and conditions of this Agreement, to make a
single term loan to Borrower in Dollars on the Closing Date in an aggregate
principal amount equal to the Tranche C Term Loan Commitment of such Lender,
such loan to be used to finance the Transactions and to pay related fees and
expenses. Subject to the terms and conditions of this Agreement, thereafter
Borrower may Convert Tranche C Term Loans of one Type into Tranche C Term
Loans of another Type (as provided in Section 2.09) or Continue Tranche C
Term Loans of one Type as Tranche C Term Loans of the same Type (as provided
in Section 2.09).
Tranche C Term Loans that are repaid or prepaid may not be
reborrowed.
(d) LIMIT ON LIBOR LOANS. No more than five separate Interest
Periods in respect of LIBOR Loans of each Class may be outstanding at any one
time. Unless consented to by the Lead Arranger in its sole discretion, no
LIBOR Loans (other than 7-day LIBOR Loans) may be made prior to the earlier
of (x) completion of the primary syndication of the Commitments and Loans, as
determined by the Lead Arranger, and (y) 30 days after the Closing Date.
(e) SWING LOANS. Subject to the terms and conditions of this
Agreement, upon request of Borrower, the Swing Loan Lender agrees to make one
or more swing loans to Borrower from time to time from and including the
Closing Date to but excluding the Swing Loan Maturity Date, up to but not
exceeding the amount of the Swing Loan Lender's Swing Loan Commitment as then
in effect. (Such swing loans referred to in this Section 2.01(e) now or
hereafter made by the Swing Loan Lender to Borrower from and including the
Closing Date to but excluding the Swing Loan Maturity Date are hereinafter
collectively called the "SWING LOANS.") Prior to the Swing Loan Maturity
Date, Borrower may borrow, repay and reborrow Swing Loans up to the Swing
Loan Commitment in accordance with the terms of this Agreement. The Swing
Loan Lender shall not make any Swing Loans on or after the Swing Loan
Maturity Date. Notwithstanding anything to the contrary contained in this
Section 2.01(e) or elsewhere in this Agreement, the Swing Loan Lender shall
not be obligated, pursuant to this Section 2.01(e) or otherwise, to make any
Swing Loan to or for the account of Borrower, and Borrower shall not be
entitled to borrow, pursuant to this Section 2.01(e), if, after giving full
effect to the requested Swing Loan, the aggregate outstanding amount of
Revolving Credit Loans, PLUS the aggregate outstanding amount of Swing Loans,
PLUS the aggregate outstanding Letter of Credit Liabilities would exceed the
aggregate amount of the Revolving Credit Commitments as in effect at such
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time. Notwithstanding anything herein or elsewhere to the contrary, the
Swing Loans will be made and maintained only as ABR Loans. The Swing Loan
Lender shall not make any Swing Loan after receiving a written notice from
Borrower or the Majority Revolving Credit Lenders stating that a Default
exists and is continuing until such time as the Swing Loan Lender shall have
received written notice of (i) rescission of all such notices from the party
or parties originally delivering such notice, (ii) the waiver of such Default
by the Majority Lenders, or (iii) the Administrative Agent's good faith
determination that such Default has ceased to exist. Swing Loans shall be
made in minimum amounts of $500,000 and integral multiples of $500,000 above
such amount.
Upon the occurrence of a Default, each Revolving Credit Lender
shall be deemed to have purchased (and each Revolving Credit Lender hereby
irrevocably agrees to purchase on a PRO RATA basis (based upon each Revolving
Credit Lender's Revolving Credit Commitment)) an irrevocable participation in
all outstanding Swing Loans, together with all accrued interest thereon,
without any further action by or on behalf of the Swing Loan Lender, any
other Lender, Borrower or any other Person. Upon one Business Day's notice
from the Swing Loan Lender, each other Revolving Credit Lender shall deliver
to the Swing Loan Lender an amount equal to its respective participation in
such Swing Loan (as determined pursuant to the immediately preceding
sentence) in cash. In order to evidence such participation, each Revolving
Credit Lender agrees to enter into a participation agreement at the request
of the Swing Loan Lender in form and substance satisfactory to the Swing Loan
Lender and the Revolving Credit Lender. If any Revolving Credit Lender fails
to make available to the Swing Loan Lender the amount of such Revolving
Credit Lender's participation as provided in this paragraph, the Swing Loan
Lender shall be entitled to recover such amount on demand from such Revolving
Credit Lender, together with interest thereon at the Federal Funds Rate until
such amount is paid in full in cash. In the event the Swing Loan Lender
receives a payment from Borrower or any other Obligor of any amount in which
the Revolving Credit Lenders have purchased participations as provided in
this paragraph, the Swing Loan Lender shall promptly distribute to each
Revolving Credit Lender its PRO RATA share of such payment. Anything
contained in this Agreement or otherwise to the contrary notwithstanding, (A)
each Revolving Credit Lender's obligation to purchase a participation in each
unpaid Swing Loan shall be absolute and unconditional and shall not be
affected by any circumstances, including, without limitation, (1) any setoff,
counterclaim, recoupment, defense or other right which such Revolving Credit
Lender may now or hereafter have against the Swing Loan Lender, Borrower or
any other Person for any reason whatsoever, (2) the occurrence or
continuation of a Default or an Event of Default, (3) any material adverse
change in the condition of Borrower or any Subsidiary, (4) any breach or
default of this Agreement or any of the Security Documents by any Person, or
(5) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing, and (B) the Swing Loan Lender shall not have
any obligation to make any Swing Loans if (1) Borrower fails for whatever
reason to satisfy any of the conditions precedent set forth in Section 7.02
or (2) any Revolving Credit Lender fails for whatever reason to comply with
its obligations under this Section 2.01(e).
2.02. BORROWINGS. Borrower shall give the Administrative Agent
notice of each borrowing hereunder as provided in Section 4.05. The form of
such notice of borrowing shall be substantially in the form of EXHIBIT I.
Not later than 12:00 noon New York time on the date specified for each
borrowing hereunder, each Lender shall make available the amount of the Loan
or Loans to be
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made by it on such date to the Administrative Agent, at an account specified
by the Administrative Agent maintained at the Principal Office, in
immediately available funds, for the account of Borrower; PROVIDED, HOWEVER,
that a portion of the Tranche C Term Loan made by each Tranche C Term Loan
Lender in amount equal to the product of (i) the Tranche C Term Loan
Commitment Percentage of such Tranche C Term Loan Lender and (ii) the Credit
Facility Escrowed Amount shall be made available to the Administrative Agent
on the date and by the time specified in this sentence and shall be funded by
the Administrative Agent on the Closing Date to an account specified by the
escrow agent under the Credit Facilities Escrow Agreement pursuant to and in
accordance with the terms of the Credit Facilities Escrow Agreement. Each
borrowing of Revolving Credit Loans shall be made by each Revolving Credit
Lender PRO RATA based on such Lender's Revolving Credit Commitment
Percentage. The amounts so received by the Administrative Agent shall,
subject to the terms and conditions of this Agreement, be made available to
Borrower by depositing the same, in immediately available funds, in an
account of Borrower maintained with the Administrative Agent at the Principal
Office designated by Borrower.
2.03. LETTERS OF CREDIT. Subject to the terms and conditions
hereof, the Revolving Credit Commitments may be utilized, upon the request of
Borrower, in addition to the Revolving Credit Loans provided for by Section
2.01(a), for standby and commercial documentary letters of credit (herein
collectively called "LETTERS OF CREDIT") issued by the Issuing Lender for the
account of Borrower or any Subsidiary which is an Obligor (PROVIDED, that
Borrower shall be a co-applicant (and jointly and severally liable) with
respect to each Letter of Credit issued for the account of any such
Subsidiary); PROVIDED, HOWEVER, that in no event shall (i) the aggregate
amount of all Letter of Credit Liabilities, PLUS the aggregate principal
amount of the Revolving Credit Loans then outstanding, PLUS the aggregate
principal amount of Swing Loans then outstanding exceed at any time the
Revolving Credit Commitments as in effect at such time, (ii) the sum of the
aggregate principal amount of Revolving Credit Loans then outstanding made by
any Revolving Credit Lender, PLUS such Lender's PRO RATA share (based on the
Revolving Credit Commitments) of the aggregate principal amount of Swing
Loans then outstanding), PLUS such Lender's PRO RATA share (based on the
Revolving Credit Commitments) of the aggregate amount of all Letter of Credit
Liabilities exceed such Lender's Revolving Credit Commitment as in effect at
such time, (iii) the outstanding aggregate amount of all Letter of Credit
Liabilities exceed $5.0 million, (iv) the face amount of any Letter of Credit
be less than $10,000, (v) the expiration date of any Letter of Credit extend
beyond the earlier of (x) the fifth Business Day preceding the Revolving
Credit Commitment Termination Date and (y) the date twelve months following
the date of such issuance for standby Letters of Credit or 180 days after the
date of such issuance for commercial documentary Letters of Credit, unless
the Majority Revolving Credit Lenders have approved such expiry date in
writing (but never beyond the fifth Business Day prior to the Revolving
Credit Commitment Termination Date); PROVIDED, HOWEVER, that any standby
Letter of Credit may be automatically extendible for periods of up to one
year (but never beyond the fifth Business Day preceding the Revolving Credit
Commitment Termination Date) so long as such Letter of Credit provides that
the Issuing Lender retains an option satisfactory to the Issuing Lender to
terminate such Letter of Credit prior to each extension date, unless the
Majority Revolving Credit Lenders have approved such expiry date in writing,
or (vi) the Issuing Lender issue any Letter of Credit after it has received
notice from Borrower or the Majority Revolving Credit Lenders stating that a
Default exists until such time as the Issuing Lender shall have received
written notice of (x) rescission of such
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notice from the Majority Revolving Credit Lenders, (y) waiver of such Default
in accordance with this Agreement or (z) the Administrative Agent's good
faith determination that such Default has ceased to exist. The following
additional provisions shall apply to Letters of Credit:
(a) Borrower shall give the Administrative Agent at least three
Business Days' irrevocable prior notice (effective upon receipt)
specifying the date (which shall be no later than thirty days preceding
the Revolving Credit Termination Date) each Letter of Credit is to be
issued and describing in reasonable detail the proposed terms of such
Letter of Credit (including the beneficiary thereof) (including whether
such Letter of Credit is to be a commercial Letter of Credit or a standby
Letter of Credit). Upon receipt of any such notice, the Administrative
Agent shall advise the Issuing Lender of the contents thereof. Each
Lender hereby authorizes the Issuing Lender to issue, and perform its
obligations under, Letters of Credit. Letters of Credit shall be issued
in accordance with the customary procedures of the Issuing Lender, which
may include an application for Letters of Credit. The Issuing Lender may
refuse to issue any Letter of Credit the contents of which are not
reasonably satisfactory to it. If there is any conflict between the
procedures required by the Issuing Lender and this Agreement, this
Agreement shall govern.
(b) On each day during the period commencing with the issuance by
the Issuing Lender of any Letter of Credit and until such Letter of Credit
shall have expired or been terminated, the Revolving Credit Commitment of
each Revolving Credit Lender shall be deemed to be utilized for all
purposes hereof in an amount equal to such Lender's Revolving Credit
Commitment Percentage of the then undrawn face amount of such Letter of
Credit. Each Revolving Credit Lender (other than the Issuing Lender)
agrees that, upon the issuance of any Letter of Credit hereunder, it shall
automatically acquire a participation in the Issuing Lender's liability
under such Letter of Credit in an amount equal to such Lender's Revolving
Credit Commitment Percentage of such liability, and each Revolving Credit
Lender (other than the Issuing Lender) thereby shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as
surety, and shall be unconditionally obligated to the Issuing Lender to
pay and discharge when due, its Revolving Credit Commitment Percentage of
the Issuing Lender's liability under such Letter of Credit. The Issuing
Lender shall be deemed to hold a Letter of Credit Liability in an amount
equal to its retained interest in the related Letter of Credit after
giving effect to such acquisition by the Revolving Credit Lenders other
than the Issuing Lender of their participation interests.
(c) Upon the making of any payment to the beneficiary of any Letter
of Credit, the Issuing Lender shall promptly notify Borrower (through the
Administrative Agent) of the amount paid by the Issuing Lender and the
date on which payment was made to such beneficiary. Borrower hereby
unconditionally agrees to pay and reimburse the Issuing Lender for the
amount of payment under such Letter of Credit, together with interest
thereon at the Alternate Base Rate plus the Applicable Margin applicable
to Revolving Credit Loans from the date payment was made to such
beneficiary to the date on which payment is due, not later than the next
Business Day after the date on which Borrower receives such notice from
the Issuing
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Lender. Any such payment due from Borrower and not paid on
the required date shall bear interest at rates specified in Section
3.02(b).
(d) Forthwith upon its receipt of a notice referred to in
clause (c) of this Section 2.03, Borrower shall advise the Issuing Lender
whether or not Borrower intends to borrow hereunder to finance its
obligation to reimburse the Issuing Lender for the amount of the related
demand for payment and, if it does, submit a notice of such borrowing as
provided in Section 4.05. In the event that Borrower fails to so advise
the Administrative Agent, or if Borrower fails to reimburse the Issuing
Lender for a demand for payment under a Letter of Credit by the next
Business Day after the date of such notice, the Administrative Agent shall
give each Revolving Credit Lender prompt notice of the amount of the
demand for payment, specifying such Lender's Revolving Credit Commitment
Percentage of the amount of the related demand for payment.
(e) Each Revolving Credit Lender (other than the Issuing Lender)
shall pay to the Administrative Agent for account of the Issuing Lender at
the Principal Office in Dollars and in immediately available funds, the
amount of such Lender's Revolving Credit Commitment Percentage of any
payment under a Letter of Credit upon not less than one Business Day's
notice by the Issuing Lender (through the Administrative Agent) to such
Revolving Credit Lender requesting such payment and specifying such
amount. Each such Revolving Credit Lender's obligation to make such
payments to the Administrative Agent for account of the Issuing Lender
under this clause (e), and the Issuing Lender's right to receive the same,
shall be absolute and unconditional and shall not be affected by any
circumstance whatsoever, including (i) the failure of any other Revolving
Credit Lender to make its payment under this clause (e), (ii) the
financial condition of Borrower or the existence of any Default or (iii)
the termination of the Commitments. Each such payment to the Issuing
Lender shall be made without any offset, abatement, withholding or
reduction whatsoever.
(f) Upon the making of each payment by a Revolving Credit Lender to
the Issuing Lender pursuant to clause (e) above in respect of any Letter
of Credit, such Lender shall, automatically and without any further action
on the part of the Administrative Agent, the Issuing Lender or such
Lender, acquire (i) a participation in an amount equal to such payment in
the Reimbursement Obligation owing to the Issuing Lender by Borrower
hereunder and under the Letter of Credit Documents relating to such Letter
of Credit and (ii) a participation in a percentage equal to such Lender's
Revolving Credit Commitment Percentage in any interest or other amounts
payable by Borrower hereunder and under such Letter of Credit Documents in
respect of such Reimbursement Obligation. Upon receipt by the Issuing
Lender from or for the account of Borrower of any payment in respect of
any Reimbursement Obligation or any such interest or other amounts
(including by way of setoff or application of proceeds of any collateral
security) the Issuing Lender shall promptly pay to the Administrative
Agent for account of each Revolving Credit Lender which has satisfied its
obligations under clause (e) above, such Revolving Credit Lender's
Revolving Credit Commitment Percentage of such payment, each such payment
by the Issuing Lender to be made in the same money and funds in which
received by the Issuing Lender. In the event any payment received by the
Issuing
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Lender and so paid to the Revolving Credit Lenders hereunder is
rescinded or must otherwise be returned by the Issuing Lender, each
Revolving Credit Lender shall, upon the request of the Issuing Lender
(through the Administrative Agent), repay to the Issuing Lender (through
the Administrative Agent) the amount of such payment paid to such Lender,
with interest at the rate specified in clause (i) of this Section 2.03.
(g) Borrower shall pay to the Administrative Agent for the account
of the Issuing Lender in respect of each Letter of Credit a letter of
credit commission in an amount (not less than $250) equal to (x) the rate
PER ANNUM equal to the Applicable Margin for Revolving Credit Loans that
are LIBOR Loans in effect from time to time, multiplied by (y) the daily
average undrawn face amount of such Letter of Credit for the period from
and including the date of issuance of such Letter of Credit (i) in the
case of a Letter of Credit which expires in accordance with its terms, to
and including such expiration date and (ii) in the case of a Letter of
Credit which is drawn in full or is otherwise terminated other than on the
stated expiration date of such Letter of Credit, to but excluding the date
such Letter of Credit is drawn in full or is terminated, such fee to be
non-refundable and to be paid in arrears quarterly, on each Quarterly Date
(or such $250 PER ANNUM fee to be paid on the date of issuance of the
applicable Letter of Credit), and on the earlier of the Revolving Credit
Commitment Termination Date or the date of the termination of the
Revolving Credit Commitments or the date of such termination, expiration
or the Business Day subsequent to notice of a drawing. The Issuing Lender
shall pay to the Administrative Agent for account of each Revolving Credit
Lender (other than the Issuing Lender), from time to time at reasonable
intervals (but in any event at least quarterly), but only to the extent
actually received from Borrower, an amount equal to such Lender's
Revolving Credit Commitment Percentage of all letter of credit commissions
referred to in the first sentence of this clause (g). In addition,
Borrower shall pay to the Administrative Agent for account of the Issuing
Lender only in respect of each Letter of Credit a letter of credit
issuance fee in an amount equal to, in the case of standby Letters of
Credit, 0.25% PER ANNUM multiplied by the original face amount, and, in
the case of documentary Letters of Credit, 0.25% PER ANNUM multiplied by
the average daily outstanding amount, in each case from the issue date
through the expiry date of such Letter of Credit (but in no event less
than $500 per Letter of Credit), such amount to be payable quarterly in
arrears on each Quarterly Date, plus all charges, costs and expenses in
the amounts customarily charged by the Issuing Lender from time to time in
like circumstances with respect to the issuance, amendment or transfer of
each Letter of Credit and drawings and other transactions relating
thereto.
(h) Promptly following the end of each calendar month, the Issuing
Lender shall deliver (through the Administrative Agent) to each Revolving
Credit Lender and Borrower a notice describing the aggregate amount of all
Letters of Credit outstanding at the end of such month. Upon the request
of any Revolving Credit Lender from time to time, the Issuing Lender shall
deliver any other information reasonably requested by such Lender with
respect to each Letter of Credit then outstanding.
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(i) To the extent that any Revolving Credit Lender fails to pay an
amount required to be paid pursuant to clause (e) or (f) of this Section
2.03 on the due date therefor, such Lender shall pay interest to the
Issuing Lender (through the Administrative Agent) on such amount from and
including such due date to but excluding the date such payment is made (i)
during the period from and including such due date to but excluding the
date three Business Days thereafter, at a rate PER ANNUM equal to the
Federal Funds Rate (as in effect from time to time) and (ii) thereafter,
at a rate PER ANNUM equal to the post-default rate (as in effect from time
to time) pursuant to Section 3.02(b).
(j) The issuance by the Issuing Lender of any modification or
supplement to any Letter of Credit hereunder that would extend the expiry
date or increase the face amount thereof shall be subject to the same
conditions applicable under this Section 2.03 to the issuance of new
Letters of Credit, and no such modification or supplement shall be issued
hereunder unless either (x) the respective Letter of Credit affected
thereby would have complied with such conditions had it originally been
issued hereunder in such modified or supplemented form or (y) each
Revolving Credit Lender shall have consented thereto.
(k) Notwithstanding the foregoing, the Issuing Lender shall not be
under any obligation to issue any Letter of Credit if at the time of such
issuance, any order, judgment or decree of any Governmental Authority or
arbitrator shall purport by its terms to enjoin or restrain the Issuing
Lender from issuing such Letter of Credit or any requirement of law
applicable to the Issuing Lender or any request or directive (whether or
not having the force of law) from any Governmental Authority shall
prohibit, or request that the Issuing Lender refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or
shall impose upon such Issuing Lender with respect to such Letter of
Credit any restriction or reserve or capital requirement (for which the
Issuing Lender is not otherwise compensated) not in effect on the date
hereof. At any time that the Issuing Lender shall not be under any
obligation to issue Letters of Credit pursuant to this paragraph (k), the
Issuing Lender may be replaced by Borrower with another Lender reasonably
acceptable to the Administrative Agent upon notice to the Issuing Lender
and the Administrative Agent. Upon any such replacement, the
Administrative Agent shall notify the Lenders of any such replacement of
the Issuing Lender and the replacement Issuing Lender shall agree to be
bound by the applicable provisions of this Agreement. At the time any
such replacement shall become effective, Borrower shall pay all unpaid
fees accrued for the account of the replaced Issuing Lender pursuant to
Section 2.03(g). From and after the effective date of any such
replacement, (i) the successor Issuing Lender shall have all the rights
and obligations of the Issuing Lender under this Agreement with respect to
Letters of Credit to be issued thereafter and (ii) references herein to
the term "Issuing Lender" shall be deemed to refer to such successor or to
any previous Issuing Lender, or to such successor and all previous Issuing
Lenders, as the context shall require. After the replacement of an
Issuing Lender hereunder, the replaced Issuing Lender shall remain a party
hereto and shall continue to have all the rights and obligations of an
Issuing Lender under this Agreement with respect to Letters of Credit
issued by it prior to such replacement, but shall not be required to issue
additional Letters of Credit.
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The obligations of Borrower under this Agreement and any Letter of Credit
Document to reimburse the Issuing Lender for a drawing under a Letter of
Credit, and to repay any drawing under a Letter of Credit converted into
Revolving Credit Loans, shall be unconditional and irrevocable, and shall be
paid strictly in accordance with the terms of this Agreement and each such
other Letter of Credit Document under all circumstances, including the
following: (i) any lack of validity or enforceability of this Agreement or
any Letter of Credit Document; (ii) the existence of any claim, setoff,
defense or other right that Borrower may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any Person for whom
any such beneficiary or any such transferee may be acting), the Issuing
Lender or any other Person, whether in connection with this Agreement, the
transactions contemplated hereby or by the Letter of Credit Documents or any
unrelated transaction; (iii) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue
or inaccurate in any respect; or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any
Letter of Credit; or any defense based upon the failure of any drawing under
a Letter of Credit to conform to the terms of the Letter of Credit or any
non-application or misapplication by the beneficiary of the proceeds of such
drawing; or (iv) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of,
Borrower or a Guarantor; PROVIDED, HOWEVER, that Borrower shall not be
obligated to reimburse the Issuing Lender for any wrongful payment determined
by a court of competent jurisdiction to have been made by the Issuing Lender
as a result of acts or omissions constituting bad faith or gross negligence
on the part of the Issuing Lender. To the extent that any provision of any
Letter of Credit Document is inconsistent with the provisions of this Section
2.03, the provisions of this Section 2.03 shall control.
2.04. TERMINATION AND REDUCTIONS OF COMMITMENTS. (a) (i) The
aggregate amount of the Revolving Credit Commitments shall be automatically
and permanently reduced to zero on the Revolving Credit Commitment
Termination Date. The aggregate amount of Revolving Credit Commitments shall
be permanently reduced on the date any required prepayments described in
Section 2.10(a) are required to be made in the amount specified in Section
2.10(b)(ii).
(ii) The aggregate amount of the Term Loan Commitments shall be
automatically and permanently reduced to zero immediately after the making of
the Term Loans on the Closing Date.
(b) Borrower shall have the right at any time or from time to time
(without premium or penalty except breakage costs (if any)) (i) so long as no
Revolving Credit Loans or Letter of Credit Liabilities will be outstanding as
of the date specified for termination, to terminate the Revolving Credit
Commitments, and (ii) to reduce the aggregate amount of the Unutilized
Revolving Credit Commitments of all the Revolving Credit Lenders; PROVIDED,
HOWEVER, that (x) Borrower shall give notice of each such termination or
reduction as provided in Section 4.05, and (y) each partial reduction shall
be in an aggregate amount at least equal to $5.0 million (or a larger
multiple of $1.0 million) or, if less, the remaining Revolving Credit
Commitments.
(c) The Commitments once terminated or reduced may not be
reinstated.
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2.05. FEES. (a) Borrower shall pay to the Administrative Agent
for the account of each Revolving Credit Lender a commitment fee on the daily
average amount of such Lender's Unutilized Revolving Credit Commitment, for
the period from and including the Closing Date to but not including the
earlier of the date such Revolving Credit Commitment is terminated and the
Revolving Credit Commitment Termination Date, at a rate PER ANNUM equal to
the Applicable Revolving Credit Fee Percentage. Any accrued commitment fee
under this Section 2.05(a) shall be payable in arrears on each Quarterly Date
and on the earlier of the date the Revolving Credit Commitments are
terminated and the Revolving Credit Commitment Termination Date.
(b) Borrower shall pay to the Administrative Agent for its own
account a nonrefundable administrative fee pursuant to the terms of the
Administrative Agent's Fee Letter.
2.06. LENDING OFFICES. The Loans of each Type made by each Lender
shall be made and maintained at such Lender's Applicable Lending Office for
Loans of such Type. No Lender shall (unless required by law or if the
failure to do so would adversely affect such Lender) change its Applicable
Lending Office for LIBOR Loans if such change would increase Borrower's net
costs or expenses hereunder materially (including withholding payments).
2.07. SEVERAL OBLIGATIONS OF LENDERS. The failure of any Lender
to make any Loan to be made by it on the date specified therefor shall not
relieve any other Lender of its obligation to make its Loan on such date, but
neither any Lender nor the Administrative Agent shall be responsible for the
failure of any other Lender to make a Loan to be made by such other Lender,
and no Lender shall have any obligation to the Administrative Agent or any
other Lender for the failure by such Lender to make any Loan required to be
made by such Lender.
2.08. NOTES; REGISTER. (a) (i) At the request of any Lender,
the Revolving Credit Loans made by such Revolving Credit Lender shall be
evidenced by one or more promissory notes of Borrower, substantially in the
form of EXHIBIT A-1, dated the Closing Date, payable to such Lender and
otherwise duly completed.
(ii) At the request of any Lender, the Tranche B Term Loans made or
to be made by such Tranche B Term Loan Lender shall be evidenced by one or
more promissory notes of Borrower, substantially in the form of EXHIBIT A-2,
dated the Closing Date, payable to such Lender and otherwise duly completed.
(iii) At the request of any Lender, the Tranche C Term Loans made or
to be made by such Tranche C Term Loan Lender shall be evidenced by one or
more promissory notes of Borrower, substantially in the form of EXHIBIT A-3,
dated the Closing Date, payable to such Lender and otherwise duly completed.
(iv) At the request of the Swing Loan Lender, the Swing Loans made
by the Swing Loan Lender shall be evidenced by one or more promissory notes
of Borrower, substantially in the form of EXHIBIT A-4, dated the Closing
Date, payable to the Swing Loan Lender and otherwise duly completed.
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(b) The date, amount, Type, interest rate and duration of Interest
Period (if applicable) of each Loan of each Class made by each Lender to
Borrower, and each payment made on account of the principal thereof, shall be
recorded by such Lender on its books and, prior to any transfer of any Note
evidencing the Loans of such Class held by it, endorsed by such Lender on the
schedule attached to such Note or any continuation thereof; PROVIDED,
HOWEVER, that the failure of such Lender to make any such recordation or
endorsement shall not affect the obligations of Borrower to make a payment
when due of any amount owing hereunder or under such Note.
(c) Borrower hereby designates the Administrative Agent to serve
as its agent, solely for purposes of this Section 2.08, to maintain a
register (the "REGISTER") on which it will record the name and address of
each Lender, the Commitment from time to time of each of the Lenders, the
principal amount of the Loans made by each of the Lenders and each repayment
in respect of the principal amount of the Loans of each Lender. Failure to
make any such recordation or any error in such recordation shall not affect
Borrower's obligations in respect of such Loans. The entries in the Register
shall be conclusive, in the absence of manifest error, and Borrower, the
Administrative Agent and the Lenders shall treat each Person whose name is
recorded in the Register as the owner of a Loan or other obligation hereunder
as the owner thereof for all purposes of this Agreement and the other Credit
Documents, notwithstanding any notice to the contrary. The Register shall be
available for inspection by Borrower or any Lender at any reasonable time and
from time to time upon reasonable prior notice.
2.09. OPTIONAL PREPAYMENTS AND CONVERSIONS OR CONTINUATIONS OF
LOANS. Subject to Section 4.04, Borrower shall have the right to prepay
Loans, or to Convert Loans of one Type into Loans of another Type or to
Continue Loans of one Type as Loans of the same Type, at any time or from
time to time to be applied as specified by Borrower; PROVIDED, HOWEVER, that:
(a) Borrower shall give the Administrative Agent notice of each such
prepayment, Conversion or Continuation as provided in Section 4.05 (and, upon
the date specified in any such notice of prepayment, the amount to be prepaid
shall become due and payable hereunder); (b) if LIBOR Loans are prepaid or
Converted other than on the last day of an Interest Period for such Loans,
Borrower shall at such time pay all expenses and costs required by Section
5.05; and (c) prepayments of the Term Loans pursuant to this Section 2.09
shall be applied PRO RATA between the Term Loan Tranches based upon the
remaining unpaid amounts thereof and, as to each such Term Loan Tranche, the
amount to be applied thereto shall be applied in inverse order of maturity
among the remaining Amortization Payments based upon the remaining unpaid
amounts thereof. Each notice of Conversion or Continuation shall be
substantially in the form of EXHIBIT J.
Notwithstanding the foregoing, and without limiting the rights and
remedies of the Lenders under Section 10, in the event that any Event of
Default shall have occurred and be continuing, the Administrative Agent may
(and at the request of the Majority Lenders shall) suspend the right of
Borrower to Convert any Loan into a LIBOR Loan, or to Continue any Loan as a
LIBOR Loan, in which event all Loans shall be Converted (on the last day(s)
of the respective Interest Periods therefor) or Continued, as the case may
be, as ABR Loans.
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2.10. MANDATORY PREPAYMENTS. (a) Borrower shall prepay the Term
Loans as follows (each such prepayment to be effected in each case in the
manner, order and to the extent specified in subsection (b) below of this
Section 2.10):
(i) CASUALTY EVENTS. On or prior to the third Business Day after
the date on which any Company receives any Net Available Proceeds from any
Casualty Event, in an aggregate principal amount equal to 100% of such Net
Available Proceeds; PROVIDED, HOWEVER, that (x) so long as no Event of
Default then exists or would arise therefrom, such Net Available Proceeds
shall not be required to be so applied on such date to the extent that
Borrower has delivered an Officers' Certificate to the Administrative
Agent on or prior to such date stating that such proceeds shall be used to
(1) repair, replace or restore any Property in respect of which such Net
Available Proceeds were paid or (2) fund the substitution of other
Property used or usable in the business of Borrower and the Subsidiaries,
in each case within 180 days following the date of the receipt of such Net
Available Proceeds, (y) all such Net Available Proceeds shall be held in
the Collateral Account and released therefrom only in accordance with the
terms of the Security Agreement, and (z) if all or any portion of such Net
Available Proceeds not required to be applied to the prepayment of Term
Loans pursuant to the preceding proviso is not so used within 180 days
after the date of the receipt of such Net Available Proceeds, such
remaining portion shall be applied on the last day of such period as
specified in Section 2.10(b), unless prior to such 180th day a Company
shall have entered into a binding agreement to so use such Net Available
Proceeds, in each case within 180 days after the date of such agreement
(and if not so used, the Net Available Proceeds shall be applied as
specified in Section 2.10(b)).
(ii) EQUITY ISSUANCE. On or prior to the third Business Day after
the date on which any Company receives any Net Available Proceeds from any
Equity Issuance after the Closing Date, in an aggregate principal amount
equal to 50% of such Net Available Proceeds; PROVIDED, HOWEVER, that the
Designated Equity Issuance Proceeds need not be so applied to the extent
contemporaneously applied pursuant to Section 9.06(i) or Section
9.25(a)(4)(y).
(iii) DEBT ISSUANCE. On or prior to the third Business Day after the
date on which any Company receives any Net Available Proceeds from any
Debt Issuance after the Closing Date, in an aggregate principal amount
equal to 100% of such Net Available Proceeds.
(iv) DISPOSITION EVENTS. On or prior to the third Business Day after
the date of receipt by any Company of any Net Available Proceeds from any
Disposition Event, in an aggregate principal amount equal to 100% of the
Net Available Proceeds from such Disposition Event; PROVIDED, HOWEVER,
that (x) the Net Available Proceeds from any Disposition Event permitted
by Section 9.06(g) and Section 9.06(h) shall not be required to be applied
as provided herein on such date if and to the extent that (1) no Event of
Default then exists or would arise therefrom and (2) Borrower delivers an
Officers' Certificate to the Administrative Agent on or prior to such date
stating that such Net Available Proceeds shall be reinvested in capital
assets of Borrower or any Subsidiary in each case within 180 days
following the date of such Disposition Event (which certificate shall set
forth the estimates of the proceeds to be so ex-
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pended), (y) all such Net Available Proceeds shall be held in the
Collateral Account and released therefrom only in accordance with the
terms of the Security Agreement, and (z) if all or any portion of such
Net Available Proceeds not so applied as provided herein is not so used
within such 180 day period, such remaining portion shall be applied on
the last day of such period as specified in Section 2.10(b), unless
prior to such 180th day a Company shall have entered into a binding
agreement to so use such Net Available Proceeds, in each case within
180 days after the date of such agreement (and if not so used, the Net
Available Proceeds shall be applied as specified in Section 2.10(b)).
(v) EXCESS CASH FLOW. Not later than 100 days after the end of each
fiscal year of Borrower commencing with the fiscal year ended December 31,
1999, in an aggregate principal amount equal to (A) 75% of Excess Cash
Flow for such fiscal year if the Total Leverage Ratio at the end of such
fiscal year is greater than or equal to 2.75:1.0 (as evidenced in an
Officers' Certificate delivered to the Administrative Agent), and (B) 50%
of Excess Cash Flow for such fiscal year if the Total Leverage Ratio at
the end of such fiscal year is less than 2.75:1.0 (as evidenced in an
Officers' Certificate delivered to the Administrative Agent); PROVIDED,
HOWEVER, that on and after the consummation date of the Change of Control
Offer, so long as less than $50.0 million in aggregate principal amount of
the Existing Notes are purchased by Borrower in the Change of Control
Offer, references in this paragraph (v) to "Total Leverage Ratio" shall be
deemed to be references to "Senior Leverage Ratio."
(vi) OTHER REQUIRED PREPAYMENTS. If the terms of any agreement,
instrument or indenture pursuant to which any Indebtedness PARI PASSU with
or junior in right of payment to the Loans is outstanding (or pursuant to
which such Indebtedness is guaranteed) require prepayment of such
Indebtedness out of the proceeds of any Disposition or otherwise unless
such proceeds are used to prepay other Indebtedness, then, to the extent
not otherwise required by this Section 2.10(a), the Loans shall be repaid
in an amount not less than the minimum amount that would be required to be
prepaid not later than the latest time as and upon such terms so that such
other Indebtedness will not be required to be prepaid pursuant to the
terms of the agreement, indenture or instrument or guarantee governing
such other Indebtedness.
(b) APPLICATION. The amount of any required prepayments described
in Section 2.10(a) shall be applied as follows:
(i) FIRST, the amount of the required prepayment shall be applied to
the reduction of Amortization Payments on the Term Loans required by
Section 3.01(b) pro rata among the Term Loan Tranches based upon the
remaining unpaid amounts thereof and, as to each such Term Loan Tranche,
the amount to be applied thereto shall be applied in inverse order of
maturity to the remaining Amortization Payments of such Term Loan Tranche;
and
(ii) SECOND, after such time as no Term Loans remain outstanding,
Revolving Credit Commitments shall be permanently reduced (at the same
time that the prepayment of the Term Loans would have been made and
assuming an unlimited amount thereof then outstanding) PRO RATA in an
amount equal to the remaining amount of any such required prepay-
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ment that would have been applied to the Term Loans (assuming an
unlimited amount thereof then outstanding) and to the extent that,
after giving effect to such reduction, the aggregate principal amount
of Revolving Credit Loans, PLUS the aggregate principal amount of Swing
Loans, PLUS the aggregate amount of all Letter of Credit Liabilities
would exceed the Revolving Credit Commitments, Borrower shall, FIRST,
prepay outstanding Revolving Credit Loans, SECOND, prepay outstanding
Swing Loans and, THIRD, provide cover for Letter of Credit Liabilities
as specified in Section 2.10(d), in an aggregate amount equal to such
excess.
Notwithstanding the foregoing, if the amount of any prepayment of
Loans required under this Section 2.10 shall be in excess of the amount of
the ABR Loans at the time outstanding, only the portion of the amount of such
prepayment as is equal to the amount of such outstanding ABR Loans shall be
immediately prepaid and, at the election of Borrower, the balance of such
required prepayment shall be either (i) deposited in the Collateral Account
and applied to the prepayment of LIBOR Loans on the last day of the then
next-expiring Interest Period for LIBOR Loans or (ii) prepaid immediately,
together with any amounts owing to the Lenders under Section 5.05.
Notwithstanding any such deposit in the Collateral Account, interest shall
continue to accrue on such Loans until prepayment.
(c) REVOLVING CREDIT EXTENSION REDUCTIONS. Until the Revolving
Credit Commitment Termination Date, Borrower shall from time to time
immediately prepay the Swing Loans and the Revolving Credit Loans (and/or
provide cover for Letter of Credit Liabilities as specified in Section
2.10(d)) in such amounts as shall be necessary so that at all times the
aggregate outstanding amount of the Revolving Credit Loans, PLUS the
aggregate outstanding amount of Swing Loans, PLUS the aggregate outstanding
Letter of Credit Liabilities shall not exceed the Revolving Credit
Commitments as in effect at such time, such amount to be applied, FIRST, to
Swing Loans, SECOND, to Revolving Credit Loans outstanding and, THIRD, as
cover for Letter of Credit Liabilities outstanding as specified in Section
2.10(d).
(d) COVER FOR LETTER OF CREDIT LIABILITIES. In the event that
Borrower shall be required pursuant to this Section 2.10 to provide cover for
Letter of Credit Liabilities, Borrower shall effect the same by paying to the
Administrative Agent immediately available funds in an amount equal to the
required amount, which funds shall be retained by the Administrative Agent in
the Collateral Account (as provided in the Security Agreement as collateral
security in the first instance for the Letter of Credit Liabilities) until
such time as all Letters of Credit shall have been terminated and all of the
Letter of Credit Liabilities paid in full.
2.11. REPLACEMENT OF LENDERS. Borrower shall have the right, if
no Default then exists, to replace any Lender (the "REPLACED LENDER") with
one or more other Eligible Persons reasonably acceptable to the Lead Arranger
(collectively, the "REPLACEMENT LENDER") if (x) such Lender is charging
Borrower increased costs pursuant to Section 5.01 or 5.06 in excess of those
being charged generally by the other Lenders or such Lender becomes incapable
of making LIBOR Loans as provided in Section 5.03 and/or (y) as provided in
Section 12.04(ii), such Lender refuses to consent to certain proposed
amendments, waivers or modifications with respect to this Agreement;
PROVIDED, HOWEVER, that (i) at the time of any replacement pursuant to this
Section 2.11, the Replacement Lender
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shall enter into one or more assignment agreements in accordance with Section
12.06(b) (and with all fees payable pursuant to Section 12.06 to be paid by
the Replacement Lender) pursuant to which the Replacement Lender shall
acquire all of the Commitments and outstanding Loans of, and in each case
Letter of Credit Interests for, the Replaced Lender and, in connection
therewith, shall pay to (x) the Replaced Lender, an amount equal to the sum
of (A) the principal of, and all accrued interest on, all outstanding Loans
of the Replaced Lender, (B) all Reimbursement Obligations owing to such
Replaced Lender, together with all then unpaid interest with respect thereto
at such time, and (C) all accrued, but theretofore unpaid, fees owing to the
Replaced Lender pursuant to Section 2.05, and (y) the Issuing Lender an
amount equal to such Replaced Lender's Revolving Credit Commitment Percentage
of any Reimbursement Obligations (which at such time remains a Reimbursement
Obligation) to the extent such amount was not theretofore funded by such
Replaced Lender, and (ii) all obligations of Borrower owing to the Replaced
Lender (other than those specifically described in clause (i) above in
respect of which the assignment purchase price has been, or is concurrently
being, paid, but including any amounts which would be paid to a Lender
pursuant to Section 5.05 if Borrower were prepaying a LIBOR Loan) shall be
paid in full to such Replaced Lender concurrently with such replacement.
Upon the execution of the applicable assignment agreement, the payment of
amounts referred to in clauses (i) and (ii) above and, if so requested by the
Replacement Lender, delivery to the Replacement Lender of Notes executed by
Borrower, the Replacement Lender shall become a Lender hereunder and the
Replaced Lender shall cease to constitute a Lender hereunder and be released
of all its obligations as a Lender, except with respect to indemnification
provisions applicable to the Replaced Lender under this Agreement, which
shall survive as to such Replaced Lender.
Section 3. PAYMENTS OF PRINCIPAL AND INTEREST.
3.01. REPAYMENT OF LOANS.
(a) REVOLVING CREDIT AND SWING LOANS. Borrower hereby promises to
pay to the Administrative Agent for the account of each Lender the entire
outstanding principal amount of such Lender's Revolving Credit Loans, and
each Revolving Credit Loan shall mature, on the Revolving Credit Commitment
Termination Date. Borrower hereby promises to pay the Swing Loan Lender for
its account the entire outstanding principal amount of the Swing Loans, and
the Swing Loans shall mature, on the Swing Loan Maturity Date.
(b) (1) TRANCHE B TERM LOANS. Borrower hereby promises to pay to
the Administrative Agent for the account of the Tranche B Term Loan Lenders,
in repayment of the principal of the Tranche B Term Loans, the amounts set
forth on SCHEDULE 3.01(B) on the dates set forth on SCHEDULE 3.01(B) (subject
to adjustment for any prepayments required by Section 2.10 to the extent
actually made).
(2) TRANCHE C TERM LOANS. Borrower hereby promises to pay to the
Administrative Agent for the account of the Tranche C Term Loan Lenders, in
repayment of the principal of the Tranche C Term Loans, the amounts set forth
on SCHEDULE 3.01(B) on the dates set forth on SCHEDULE 3.01(B) (subject to
adjustment for any prepayments required by Section 2.10 to the extent
actually made). Notwithstanding the foregoing, Borrower hereby promises to
pay to the Administrative Agent
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for the account of the Tranche C Term Loan Lenders, in repayment in part of
the principal of the Tranche C Term Loans, the Tranche C Term Loan Escrow
Repayment Amount on the Tranche C Term Loan Escrow Maturity Date. In the
event any such repayment pursuant to the preceding sentence is made, the
amounts set forth in SCHEDULE 3.01(b) in respect of Tranche C Term Loans
shall be adjusted by applying the Tranche C Term Loan Escrow Repayment Amount
to reduce such amounts in inverse order of maturity.
3.02. INTEREST. (a) Borrower hereby promises to pay to the
Administrative Agent for the account of each Lender interest on the unpaid
principal amount of each Loan made by such Lender for the period from and
including the date of such Loan to but excluding the date such Loan shall be
paid in full at the following rates PER ANNUM:
(i) during such periods as such Loan is an ABR Loan, the Alternate
Base Rate (as in effect from time to time), PLUS the Applicable Margin and
(ii) during such periods as such Loan is a LIBOR Loan, for each
Interest Period relating thereto, the LIBOR Rate for such Loan for such
Interest Period, PLUS the Applicable Margin.
(b) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and other overdue amounts owed by any
Obligor under the Credit Documents (including such interest accruing before
and after judgment) shall bear interest at a rate PER ANNUM equal to (x) in
the case of principal of any Loans, the rate which is 2% in excess of the
rate then borne by such Loans and (y) in the case of interest and such other
amounts, the rate which is 2% in excess of the rate otherwise applicable to
ABR Loans which are Revolving Credit Loans from time to time. Interest which
accrues under this paragraph shall be payable on demand.
(c) Accrued interest on each Loan shall be payable (i) in the case
of an ABR Loan, quarterly on the Quarterly Dates, (ii) in the case of a LIBOR
Loan, on the last day of each Interest Period therefor and, if such Interest
Period is longer than three months, at three-month intervals following the
first day of such Interest Period and (iii) in the case of any LIBOR Loan,
upon the payment or prepayment thereof or the Conversion of such Loan to a
Loan of another Type (but only on the principal amount so paid, prepaid or
Converted), except that interest payable at the rate set forth in Section
3.02(b) shall be payable from time to time on demand. Promptly after the
determination of any interest rate provided for herein or any change therein,
the Administrative Agent shall give notice thereof to the Lenders to which
such interest is payable and to Borrower.
Section 4. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
4.01. PAYMENTS. (a) Except to the extent otherwise provided
herein, all payments of principal, interest, Reimbursement Obligations and
other amounts to be made by Borrower under this Agreement and the Notes, and,
except to the extent otherwise provided therein, all payments to be made by
the Obligors under any other Credit Document, shall be made in Dollars, in
immediately available funds, without deduction, set-off or counterclaim, to
the Administrative Agent at its account at the Principal Office, not later
than 12:00 noon New York time on the date on which such payment
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shall become due (each such payment made after such time on such due date to
be deemed to have been made on the next succeeding Business Day).
(b) Borrower shall, at the time of making each payment under this
Agreement or any Note for the account of any Lender, specify (in accordance
with Section 2.09 and 2.10, if applicable) to the Administrative Agent (which
shall so notify the intended recipient(s) thereof) the Loans, Reimbursement
Obligations or other amounts payable by Borrower hereunder to which such
payment is to be applied (and in the event that Borrower fails to so specify,
or if an Event of Default has occurred and is continuing, the Administrative
Agent may distribute such payment to the Lenders for application to the
Obligations under the Credit Documents in such manner as it or the Majority
Lenders, subject to Section 4.02, may determine to be appropriate).
(c) Except to the extent otherwise provided in the second sentence
of Section 2.03(g), each payment received by the Administrative Agent or by
the Issuing Lender (through the Administrative Agent) under this Agreement or
any Note for the account of any Lender shall be paid by the Administrative
Agent or by the Issuing Lender (through the Administrative Agent), as the
case may be, to such Lender, in immediately available funds, (x) if the
payment was actually received by the Administrative Agent or by the Issuing
Lender (through the Administrative Agent), as the case may be, prior to 12:00
noon (New York time) on any day, on such day and (y) if the payment was
actually received by the Administrative Agent or by the Issuing Lender
(through the Administrative Agent), as the case may be, after 12:00 noon (New
York time) on any day, by 1:00 p.m. (New York time) on the following Business
Day (it being understood that to the extent that any such payment is not made
in full by the Administrative Agent or by the Issuing Lender (through the
Administrative Agent), as the case may be, the Administrative Agent shall pay
to such Lender, upon demand, interest at the Federal Funds Rate from the date
such amount was required to be paid to such Lender pursuant to the foregoing
clauses until the date the Administrative Agent pays such Lender the amount).
(d) If the due date of any payment under this Agreement or any
Note would otherwise fall on a day that is not a Business Day, such date
shall be extended to the next succeeding Business Day, and interest shall be
payable for any principal so extended for the period of such extension.
4.02. PRO RATA TREATMENT. Except to the extent otherwise provided
herein: (a) each borrowing of Loans of a particular Class from the Lenders
under Section 2.01 shall be made from the relevant Lenders, each payment of
commitment fee under Section 2.05 in respect of Commitments of a particular
Class shall be made for account of the relevant Lenders, and each termination
or reduction of the amount of the Commitments of a particular Class under
Section 2.04 shall be applied to the respective Commitments of such Class of
the relevant Lenders, PRO RATA according to the amounts of their respective
Commitments of such Class; PROVIDED, HOWEVER, that Swing Loans shall be made
only by, and interest thereon shall be paid by Borrower only to, the Swing
Loan Lender (subject to such Lender's obligations in respect of any
participation therein purchased by the other Revolving Credit Lenders as
provided in Section 2.01(e)); (b) except as otherwise provided in Section
5.04, LIBOR Loans of any Class having the same Interest Period shall be
allocated PRO RATA among the relevant Lenders according to the amounts of
their respective Revolving Credit and Term Loan Commitments (in the case
of the making of Loans) or their respective Revolving Credit and Term Loans
(in the case
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of Conversions and Continuations of Loans); (c) each payment or prepayment of
principal of Revolving Credit Loans or Term Loans by Borrower shall be made
for account of the relevant Lenders pro rata in accordance with the
respective unpaid outstanding principal amounts of the Loans of such Class
held by them; and (d) each payment of interest on Revolving Credit Loans and
Term Loans by Borrower shall be made for account of the relevant Lenders pro
rata in accordance with the amounts of interest on such Loans then due and
payable to the respective Lenders.
4.03. COMPUTATIONS. Interest on LIBOR Loans and commitment fee
and letter of credit fees shall be computed on the basis of a year of 360
days and actual days elapsed (including the first day but excluding the last
day) occurring in the period for which payable and interest on ABR Loans and
Reimbursement Obligations shall be computed on the basis of a year of 365 or
366 days, as the case may be, and actual days elapsed (including the first
day but excluding the last day) occurring in the period for which payable.
Notwithstanding the foregoing, for each day that the Alternate Base Rate is
calculated by reference to the Federal Funds Rate, interest on ABR Loans and
Reimbursement Obligations shall be computed on the basis of a year of 360
days and actual days elapsed (including the first day but excluding the last
day).
4.04. MINIMUM AMOUNTS. Except for mandatory prepayments made
pursuant to Section 2.10, Conversions or prepayments made pursuant to Section
5.04 and borrowings hereunder to finance any payment made in respect of a
Letter of Credit, each borrowing, Conversion and prepayment of principal of
Loans (other than Swing Loans, for which the minimum amounts thereof are in
Section 2.01(e)) shall be in an amount at least equal to $500,000 (or, if
less, the remaining aggregate principal amount thereof) with respect to ABR
Loans and $500,000 (or, if less, the remaining aggregate principal amount
thereof) with respect to LIBOR Loans and in multiples of $100,000 in excess
thereof (borrowings, Conversions or prepayments of or into Loans of different
Types or, in the case of LIBOR Loans, having different Interest Periods at
the same time hereunder to be deemed separate borrowings, Conversions and
prepayments for purposes of the foregoing, one for each Type or Interest
Period). Anything in this Agreement to the contrary notwithstanding, the
aggregate principal amount of LIBOR Loans having the same Interest Period
shall be in an amount at least equal to $500,000 and in multiples of $100,000
in excess thereof and, if any LIBOR Loans or portions thereof would otherwise
be in a lesser principal amount for any period, such Loans or portions, as
the case may be, shall be ABR Loans during such period.
4.05. CERTAIN NOTICES. Notices by Borrower to the Administrative
Agent of terminations or reductions of the Commitments, of borrowings,
Conversions, Continuations and optional prepayments of Loans and of Classes
of Loans, of Types of Loans and of the duration of Interest Periods shall be
irrevocable and shall be effective only if received by the Administrative
Agent not later than 12:00 noon New York time on the number of Business Days
prior to the date of the relevant termination, reduction, borrowing,
Conversion, Continuation or prepayment or the first day of such Interest
Period specified in the table below.
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NOTICE PERIODS
Notice Number of Business Days Prior
- ------ -----------------------------
Termination or reduction of Commitments 2
Borrowing or optional prepayment of, or
Conversions into, ABR Loans (including Swing Loans) 1
Borrowing or optional prepayment of,
Conversions into, Continuations as, or
duration of Interest Periods for, LIBOR Loans 3
Each such notice of termination or reduction shall specify the
amount and the Class of the Commitments to be terminated or reduced. Each
such notice of borrowing, Conversion, Continuation or prepayment shall
specify the Class of Loans to be borrowed, Converted, Continued or prepaid
and the amount (subject to Section 4.04) and Type of each Loan to be
borrowed, Converted, Continued or prepaid and the date of borrowing,
Conversion, Continuation or prepayment (which shall be a Business Day). Each
such notice of the duration of an Interest Period shall specify the Loans to
which such Interest Period is to relate. Unless otherwise consented to by
the Lead Arranger in its sole discretion, prior to the later of (x) 10
Business Days after the date of consummation of the Change of Control Offer,
and (y) the date on which Borrower has been notified by the Lead Arranger
that the primary syndication of the Commitments has been completed, no
borrowing of or Conversion into any LIBOR Loan may be made having an Interest
Period of other than seven days. The Administrative Agent shall promptly
notify the Lenders of the contents of each such notice. In the event that
Borrower fails to select the Type of Loan within the time period and
otherwise as provided in this Section 4.05, such Loan (if outstanding as a
LIBOR Loan) will be automatically Converted into an ABR Loan on the last day
of the then current Interest Period for such Loan or (if outstanding as an
ABR Loan) will remain as, or (if not then outstanding) will be made as, an
ABR Loan. In the event that Borrower fails to select an Interest Period for
any LIBOR Loan within the time period and otherwise as provided in this
Section 4.05, such Interest Period shall be for one month.
4.06. NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT. Unless
the Administrative Agent shall have received written notice from a Lender or
Borrower (the "PAYOR") prior to the date on which the Payor is to make
payment to the Administrative Agent of (in the case of a Lender) the proceeds
of a Loan to be made by such Lender hereunder or a payment to the
Administrative Agent for the account of one or more of the Lenders hereunder
(such payment being herein called the "REQUIRED PAYMENT"), which notice shall
be effective upon receipt, that the Payor does not intend to make the
Required Payment to the Administrative Agent, the Administrative Agent may
assume that the Required Payment has been made and may, in reliance upon such
assumption (but shall not be required to), make the amount thereof available
to the intended recipient(s) on such date; and, if the Payor has not in fact
made the Required Payment to the Administrative Agent, the recipient(s) of
such payment shall, on demand, repay to the Administrative Agent the amount
so made available together with interest thereon in respect of each day
during the period commencing on the date (the "ADVANCE DATE")
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such amount was so made available by the Administrative Agent until the date
the Administrative Agent recovers such amount at a rate per annum equal to
the Federal Funds Rate for such day and, if such recipient(s) shall fail
promptly to make such payment, the Administrative Agent shall be entitled to
recover such amount, on demand, from the Payor, together with interest as
aforesaid; PROVIDED, HOWEVER, that if neither the recipient(s) nor the Payor
shall return the Required Payment to the Administrative Agent within three
Business Days of the date such demand was made, then, retroactively to the
Advance Date, the Payor and the recipient(s) shall each be obligated to pay
interest on the Required Payment as follows (without double recovery):
(i) if the Required Payment shall represent a payment to be made by
Borrower to the Lenders, Borrower and the recipient(s) shall each be
obligated retroactively to the Advance Date to pay interest in respect of
the Required Payment at the rate set forth in Section 3.02(b) (without
duplication of the obligation of Borrower under Section 3.02 to pay
interest on the Required Payment at the rate set forth in
Section 3.02(b)), it being understood that the return by the recipient(s)
of the Required Payment to the Administrative Agent shall not limit such
obligation of Borrower under Section 3.02 to pay interest at the rate set
forth in Section 3.02(b) in respect of the Required Payment and
(ii) if the Required Payment shall represent proceeds of a Loan to be
made by the Lenders to Borrower, the Payor and Borrower shall each be
obligated retroactively to the Advance Date to pay interest in respect of
the Required Payment pursuant to Section 3.02, it being understood that
the return by Borrower of the Required Payment to the Administrative Agent
shall not limit any claim Borrower may have against the Payor in respect
of such Required Payment.
4.07. RIGHT OF SETOFF; SHARING OF PAYMENTS; ETC. (a) Each
Obligor agrees that, in addition to (and without limitation of) any right of
setoff, banker's lien or counterclaim a Lender may otherwise have, each
Lender shall be entitled, at its option (to the fullest extent permitted by
law), to set off and apply any deposit (general or special, time or demand,
provisional or final), or other indebtedness, held by it for the credit or
account of such Obligor at any of its offices, in Dollars or in any other
currency, against any principal of or interest on any of such Lender's Loans,
Reimbursement Obligations or any other amount payable to such Lender
hereunder that is not paid when due (regardless of whether such deposit or
other indebtedness is then due to such Obligor), in which case it shall
promptly notify such Obligor and the Administrative Agent thereof; PROVIDED,
HOWEVER, that such Lender's failure to give such notice shall not affect the
validity thereof.
(b) Each of the Lenders agrees that, if it should receive (other
than pursuant to Section 5) any amount hereunder (whether by voluntary
payment, by realization upon security, by the exercise of the right of setoff
or banker's lien, by counterclaim or cross action, by the enforcement of any
right under the Credit Documents, or otherwise) which is applicable to the
payment of the principal of, or interest on, the Loans, Reimbursement
Obligations or fees, of a sum which with respect to the related sum or sums
received by other Lenders is in a greater proportion than the total of such
amounts then owed and due to such Lender bears to the total of such amounts
then owed and due to all of the Lenders immediately prior to such receipt,
then such Lender receiving such excess payment
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shall purchase for cash without recourse or warranty from the other Lenders
an interest in the Obligations of the respective Obligor to such Lenders in
such amount as shall result in a proportional participation by all of the
Lenders in such amount; PROVIDED, HOWEVER, that if all or any portion of such
excess amount is thereafter recovered from such Lender, such purchase shall
be rescinded and the purchase price restored to the extent of such recovery,
but without interest. Borrower consents to the foregoing arrangements.
(c) Borrower agrees that any Lender so purchasing such a
participation may exercise all rights of setoff, banker's lien, counterclaim
or similar rights with respect to such participation as fully as if such
Lender were a direct holder of Loans or other amounts (as the case may be)
owing to such Lender in the amount of such participation.
(d) Nothing contained herein shall require any Lender to exercise
any such right or shall affect the right of any Lender to exercise, and
retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of any Obligor. If, under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a secured
claim in lieu of a setoff to which this Section 4.07 applies, such Lender
shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders entitled
under this Section 4.07 to share in the benefits of any recovery on such
secured claim.
Section 5. YIELD PROTECTION, ETC.
5.01. ADDITIONAL COSTS. (a) If the adoption of, or any change
in, any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority or
the NAIC made subsequent to the date hereof:
(i) shall subject any Lender or Issuing Lender to any tax of any
kind whatsoever with respect to this Agreement, any Note, any Letter of
Credit or any Lender's participation therein, any Letter of Credit
Document or any LIBOR Loan made by it or change the basis of taxation of
payments to such Lender in respect thereof by any Governmental Authority
(except for taxes covered by or expressly excluded from coverage by
Section 5.06 and changes in the rate of tax on the overall net income of
such Lender or its Applicable Lending Office, or any affiliate thereof or
franchise tax by any Governmental Authority);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender or Issuing Lender which is not otherwise included in
the determination of the LIBOR Rate hereunder; or
(iii) shall impose on such Lender or Issuing Lender any other
condition (excluding taxes);
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and the result of any of the foregoing is to increase the cost to such Lender
or Issuing Lender, by an amount which such Lender or Issuing Lender deems to
be material, of making, converting into, continuing or maintaining LIBOR
Loans or issuing or participating in Letters of Credit or to reduce any
amount receivable hereunder in respect thereof then, in any such case,
Borrower shall promptly pay such Lender or Issuing Lender, upon its written
demand, any additional amounts necessary to compensate such Lender or Issuing
Lender for such increased cost or reduced amount receivable; PROVIDED,
HOWEVER, that a Lender that is an assignee or transferee of an interest under
this Agreement pursuant to Section 2.11 or 12.06 that was already a Lender
hereunder immediately prior to such assignment or transfer shall be entitled
to additional amounts pursuant to this Section 5.01 on the assigned or
transferred interest only to the same extent as the assignor Lender. If any
Lender or Issuing Lender becomes entitled to claim any additional amounts
pursuant to this subsection, it shall promptly notify Borrower, through the
Administrative Agent, of the event by reason of which it has become so
entitled. A certificate as to any additional amounts setting forth the
calculation of such additional amounts pursuant to this Section 5.01
submitted by such Lender or Issuing Lender, through the Administrative Agent,
to Borrower shall be conclusive in the absence of clearly demonstrable error.
Without limiting the survival of any other covenant hereunder, this Section
5.01 shall survive the termination of this Agreement and the payment of the
Notes and all other amounts payable hereunder.
(b) In the event that any Lender or Issuing Lender shall have
determined that the adoption of any law, rule, regulation or guideline
regarding capital adequacy (or any change after the date hereof therein or in
the interpretation or application thereof) or compliance by any Lender or
Issuing Lender or any corporation controlling such Lender or Issuing Lender
with any request or directive regarding capital adequacy (whether or not
having the force of law) from any central bank or Governmental Authority or
the NAIC, in each case, made subsequent to the date hereof including, without
limitation, the issuance of any final rule, regulation or guideline, does or
shall have the effect of reducing the rate of return on such Lender's or
Issuing Lender's or such corporation's capital as a consequence of its
obligations hereunder or under any Letter of Credit to a level below that
which such Lender or Issuing Lender or such corporation could have achieved
but for such adoption, change or compliance (taking into consideration such
Lender's or Issuing Lender's or such corporation's policies with respect to
capital adequacy) by an amount deemed by such Lender or Issuing Lender to be
material, then from time to time, after submission by such Lender or Issuing
Lender to Borrower (with a copy to the Administrative Agent) of a written
request therefor, Borrower shall promptly pay to such Lender or Issuing
Lender such additional amount or amounts as will compensate such Lender or
Issuing Lender for such reduction.
(c) Each Lender (and Issuing Lender) shall notify Borrower of any
event that will entitle such Lender (or Issuing Lender, as the case may be)
to compensation under paragraph (a) or (b) of this Section 5.01 as promptly
as practicable, but in any event within 90 days after such Lender (or Issuing
Lender, as the case may be) obtains actual knowledge thereof; PROVIDED,
HOWEVER, that (i) if any Lender (or Issuing Lender, as the case may be) fails
to give such notice within 90 days after it obtains actual knowledge of such
an event, such Lender (or Issuing Lender, as the case may be) shall, with
respect to compensation payable pursuant to this Section 5.01 in respect of
any costs resulting from such event, only be entitled to payment under this
Section 5.01 for costs incurred from and after the date 90 days prior to the
date that such Lender (or Issuing Lender, as the case may be) does give
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such notice and (ii) each Lender (or Issuing Lender, as the case may be),
will designate a different Applicable Lending Office for the Loans of such
Lender (or the Letters of Credit, as the case may be) affected by such event
if such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole opinion of such Lender (or Issuing
Lender, as the case may be), be disadvantageous to such Lender (or Issuing
Lender, as the case may be). Each Lender (or Issuing Lender, as the case may
be) will furnish to Borrower at the time of request for compensation under
paragraph (a) or (b) of this Section 5.01 a certificate setting forth the
basis, amount and reasonable detail of computation of each request by such
Lender for compensation under paragraph (a) or (b) of this Section 5.01,
which certificate shall, except for demonstrable error, be final, conclusive
and binding for all purposes.
5.02. LIMITATION ON TYPES OF LOANS. Anything herein to the
contrary notwithstanding, if, on or prior to the determination of any LIBOR
Base Rate for any Interest Period:
(i) the Administrative Agent determines, which determination shall
be conclusive, absent manifest error, that quotations of interest rates
for the relevant deposits referred to in the definition of "LIBOR Base
Rate" in Section 1.01 are not being provided in the relevant amounts or
for the relevant maturities for purposes of determining rates of interest
for LIBOR Loans as provided herein; or
(ii) if the related Loans are Revolving Credit Loans, the Majority
Revolving Credit Lenders or, if the related Loans are Tranche B Term
Loans, the Majority Tranche B Term Loan Lenders or, if the related Loans
are Tranche C Term Loans, the Majority Tranche C Term Loan Lenders
determine, which determination shall be conclusive, that the relevant
rates of interest referred to in the definition of "LIBOR Base Rate" in
Section 1.01 upon the basis of which the rate of interest for LIBOR Loans
for such Interest Period is to be determined are not likely adequate to
cover the cost to the applicable Lenders of making or maintaining LIBOR
Loans for such Interest Period,
then the Administrative Agent shall give Borrower and each Lender prompt
notice thereof, and so long as such condition remains in effect, the affected
Lenders shall be under no obligation to make additional LIBOR Loans (but
shall make their portion of any additional Borrowings as ABR Loans), to
Continue LIBOR Loans or to Convert ABR Loans into LIBOR Loans and Borrower
shall, on the last day(s) of the then current Interest Period(s) for the
outstanding LIBOR Loans, either prepay such Loans of such affected Lenders or
Convert such Loans of such affected Lenders into ABR Loans in accordance with
Section 2.09.
5.03. ILLEGALITY. Notwithstanding any other provision of this
Agreement, in the event that any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender
or Issuing Lender or its Applicable Lending Office to honor its obligation to
make or maintain LIBOR Loans or issue Letters of Credit hereunder (and, in
the sole opinion of such Lender or Issuing Lender, the designation of a
different Applicable Lending Office would either not avoid such unlawfulness
or would be disadvantageous to such Lender or Issuing Lender), then such
Lender or Issuing Lender shall promptly notify Borrower thereof (with a copy
to the Administrative
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Agent) and such Lender's or Issuing Lender's obligation to make or Continue,
or to Convert Loans of any other Type into, LIBOR Loans or issue Letters of
Credit shall be suspended until such time as such Lender or Issuing Lender
may again make and maintain LIBOR Loans or issue Letters of Credit (in which
case the provisions of Section 5.04 shall be applicable).
5.04. TREATMENT OF AFFECTED LOANS. If the obligation of any
Lender to make LIBOR Loans or to Continue, or to Convert ABR Loans into,
LIBOR Loans shall be suspended pursuant to Section 5.03, such Lender's LIBOR
Loans shall be automatically Converted into ABR Loans on the last day(s) of
the then current Interest Period(s) for such LIBOR Loans (or on such earlier
date as such Lender may specify to Borrower with a copy to the Administrative
Agent as is required by law) and, unless and until such Lender gives notice
as provided below that the circumstances specified in Section 5.03 which gave
rise to such Conversion no longer exist:
(i) to the extent that such Lender's LIBOR Loans have been so
Converted, all payments and prepayments of principal which would otherwise
be applied to such Lender's LIBOR Loans shall be applied instead to its
ABR Loans; and
(ii) all Loans which would otherwise be made or Continued by such
Lender as LIBOR Loans shall be made or Continued instead as ABR Loans and
all ABR Loans of such Lender which would otherwise be Converted into LIBOR
Loans shall remain as ABR Loans.
If such Lender gives notice to Borrower with a copy to the Administrative
Agent that the circumstances specified in Section 5.03 which gave rise to the
Conversion of such Lender's LIBOR Loans pursuant to this Section 5.04 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when LIBOR Loans are outstanding, such Lender's
ABR Loans shall be automatically Converted, on the first day(s) of the next
succeeding Interest Period(s) for such outstanding LIBOR Loans, to the extent
necessary so that, after giving effect thereto, all Loans held by the Lenders
holding LIBOR Loans and by such Lender are held pro rata (as to principal
amounts, Types and Interest Periods) in accordance with their respective
Commitments.
5.05. COMPENSATION. (a) Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender
may sustain or incur as a consequence of (1) default by Borrower in payment
when due of the principal amount of or interest on any LIBOR Loan, (2)
default by Borrower in making a borrowing of, Conversion into or Continuation
of LIBOR Loans after Borrower has given a notice requesting the same in
accordance with the provisions of this Agreement, (3) default by Borrower in
making any prepayment after Borrower has given a notice thereof in accordance
with the provisions of the Agreement, or (4) the making of a payment or a
prepayment of LIBOR Loans on a day which is not the last day of an Interest
Period with respect thereto, including in each case, any such loss (excluding
loss of margin) or expense arising from the reemployment of funds obtained by
it or from fees payable to terminate the deposits from which such funds were
obtained.
(b) For the purpose of calculation of all amounts payable to a
Lender under this Section 5.05 each Lender shall be deemed to have actually
funded its relevant LIBOR Loan through the
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purchase of a deposit bearing interest at the LIBOR Rate in an amount equal
to the amount of the LIBOR Loan and having a maturity comparable to the
relevant Interest Period; PROVIDED, HOWEVER, that each Lender may fund each
of its LIBOR Loans in any manner it sees fit, and the foregoing assumption
shall be utilized only for the calculation of amounts payable under this
subsection. Any Lender requesting compensation pursuant to this Section 5.05
will furnish to the Administrative Agent and Borrower a certificate setting
forth the basis and amount of such request and such certificate, absent
manifest error, shall be conclusive. Without limiting the survival of any
other covenant hereunder, this covenant shall survive the termination of this
Agreement and the payment of the Notes and all other amounts payable
hereunder.
5.06. NET PAYMENTS. (a) All payments made by Borrower or any
Guarantor hereunder or under any Note or any Guarantee will be made without
setoff, counterclaim or other defense. Except as provided in Section
5.06(b), all such payments will be made free and clear of, and without
deduction or withholding for, any present or future Taxes now or hereafter
imposed by any Governmental Authority or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding any Excluded Tax) and all interest, penalties or similar
liabilities with respect thereto (all such Taxes (other than Excluded Taxes)
being referred to collectively as "COVERED TAXES"). If any Covered Taxes are
so levied or imposed, Borrower and each Guarantor, as the case may be, agrees
(on a joint and several basis for the Guarantors) to pay the full amount of
such Covered Taxes, and such additional amounts as may be necessary so that
every payment of all amounts due under this Agreement, the Guarantees or
under any Note, after withholding or deduction for or on account of any
Covered Taxes, will not be less than the amount provided for herein or in
such Note. If any amounts are payable in respect of Covered Taxes pursuant
to the preceding sentence (any such amounts, the "GROSS-UP AMOUNT"), Borrower
and each Guarantor agrees, notwithstanding the definition of Excluded Taxes,
to reimburse (on a joint and several basis for the Guarantors) each Lender,
upon the written request of such Lender, (i) for Taxes imposed on or measured
by the net income or net profits of such Lender pursuant to the laws of the
jurisdiction in which such Lender is organized or in which the principal
office or Applicable Lending Office of such Lender is located or under the
laws of any political subdivision or taxing authority of any such
jurisdiction by reason of the making of payments in respect of Covered Taxes
pursuant to this Section (including pursuant to this sentence) and (ii) for
any withholding of Taxes as such Lender shall determine are payable by, or
withheld from, such Lender in respect of amounts paid in respect of Covered
Taxes to or on behalf of such Lender pursuant to the preceding sentence and
in respect of any amounts paid to or on behalf of such Lender pursuant to
this sentence. Borrower and each Guarantor, as the case may be, will furnish
to the Administrative Agent within 45 days after the date the payment of any
Covered Taxes is due pursuant to applicable law certified copies of tax
receipts or other documentation reasonably satisfactory to such Lender
evidencing such payment by Borrower or any Guarantor. Borrower and the
Guarantors agree (jointly and severally for the Guarantors) to indemnify and
hold harmless each Lender, and reimburse such Lender upon its written
request, for the amount of any Covered Taxes so levied or imposed and paid by
such Lender and any liability (including penalties, additions to tax,
interest and expenses) arising therefrom or with respect thereto.
"EXCLUDED TAXES" shall mean other than as provided in the third
sentence of the first paragraph of this Section 5.06(a), any Tax (other than
any Other Taxes) imposed on or measured by
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the net income or net profits of a Lender pursuant to the laws of the
jurisdiction in which it is organized or the jurisdiction in which the
principal office or Applicable Lending Office of such Lender is located or
any jurisdiction in which such Lender conducts business or any subdivision
thereof or therein.
(b) Each Lender that is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) for U.S. federal income tax
purposes (a "NON-U.S. LENDER") agrees to deliver to Borrower and the
Administrative Agent on or prior to the Closing Date or, in the case of a
Lender that is an assignee or transferee of an interest under this Agreement
pursuant to Section 2.11 or 12.06 (unless the respective Lender was already a
Lender hereunder immediately prior to such assignment or transfer), on the
date of such assignment or transfer to such Lender, (i) two accurate and
complete original signed copies of Internal Revenue Service Form 4224 or 1001
(or successor forms) certifying to such Lender's entitlement to a complete
exemption from United States withholding tax with respect to payments to be
made under this Agreement and under any Note (or, with respect to any
assignee Lender, at least as extensive as the assigning Lender), or (ii) if
the Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code and cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (i) above, (x) a certificate substantially in the form of
EXHIBIT L (any such certificate, a "SECTION 5.06 CERTIFICATE") and (y) two
accurate and complete original signed copies of Internal Revenue Service Form
W-8 (or successor form) certifying to such Lender's entitlement to a complete
exemption from United States withholding tax with respect to payments to be
made under this Agreement and under any Note (or, with respect to any
assignee Lender, at least as extensive as the assigning Lender). At the
request of Borrower, each Lender that is a United States person (as such term
is defined in Section 7701(a)(30) of the Code) for U.S. federal income tax
purposes (a "U.S. Lender"), other than a U.S. Lender that is a corporation or
financial institution (an "Exempt Lender"), agrees to deliver to Borrower and
the Administrative Agent on or prior to the Closing Date, or in the case of a
U.S. Lender that is not an Exempt Lender and that is an assignee or
transferee of an interest under this Agreement pursuant to Section 2.11 or
12.06 (unless the respective Lender was already a Lender hereunder
immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Lender, two accurate and complete original
signed copies of Internal Revenue Service Form W-9 (or successor form) in
order to demonstrate such Lender's entitlement to a complete exemption from
United States back-up withholding tax with respect to payments to be made
under this Agreement and under any Note. In addition, each Lender agrees that
from time to time after the Closing Date, when a lapse in time or change in
circumstances renders the previous certifica tion obsolete or inaccurate in
any material respect, it will deliver to Borrower and the Administrative
Agent two new accurate and complete original signed copies of Internal
Revenue Service Form 4224, Form 1001, Form W-8 and a Section 5.06
Certificate, or Form W-9 (if a Form W-9 was previously provided to Borrower
and the Administrative Agent pursuant to Borrower's request), as the case may
be, and such other forms as may be required in order to confirm or establish
the entitlement of such Lender to a continued exemption from or reduction in
United States withholding tax with respect to payments under this Agreement
and any Note, or it shall immediately notify Borrower and the Administrative
Agent of its inability to deliver any such form or certificate, in which case
such Lender shall not be required to deliver any such form or certificate
pursuant to this Section 5.06(b). Notwithstanding the foregoing, no Lender
shall be required to deliver any such form or certificate if a change in
treaty, law or regulation has occurred prior to the date on which such
delivery would other-
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wise be required that renders any such form or certificate inapplicable or
would prevent the Lender from duly completing and delivering any such form or
certificate with respect to it and such Lender so advises Borrower. Neither
Borrower nor any Guarantor shall be required to indemnify any Non-U.S.
Lender, or to pay any additional amounts to any Non-U.S. Lender, in respect
of any Covered Taxes to the extent that (i) the obligation to pay such
Covered Taxes would not have arisen but for a failure by such Non-U.S. Lender
to comply with the provisions of this Section 5.06(b) or (ii) if the Internal
Revenue Service makes a final determination that a Lender is a "conduit
entity" participating in a "conduit financing arrangement" within the meaning
of Treasury Regulation Section 1.881-3, such additional amounts are in excess
of the amounts that would otherwise have been payable had such Lender not
been a "conduit entity" participating in a "conduit financing arrangement"
within the meaning of Treasury Regulation Section 1.881-3. Notwithstanding
anything to the contrary contained in the preceding sentence or elsewhere in
this Section 5.06 and except as set forth in Section 12.06(b), Borrower
agrees to pay additional amounts and to indemnify each Lender in the manner
set forth in Section 5.06(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any
amounts deducted or withheld by it as described in the immediately preceding
sentence as a result of any changes after the Closing Date in any applicable
law, treaty, governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of income or
similar Covered Taxes. For purposes of the immediately preceding sentence,
the final U.S. Treasury regulations that were issued October 6, 1997 with
respect to the withholding of United States federal income tax (the "NEW
WITHHOLDING REGULATIONS") shall not be considered to constitute a change
after the Closing Date, or otherwise, in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the interpretation
thereof, relating to the deducting or withholding of income or similar
Covered Taxes, notwithstanding that the New Withholding Regulations generally
are only effective for payments made after December 31, 1999.
(c) In addition, Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under the Notes
or from the execution, delivery or registration of, or otherwise with respect
to, this Agreement or the Notes (hereinafter referred to as "OTHER TAXES").
(d) Any Lender claiming any additional amounts payable pursuant to
this Section 5.06 agrees to use (at the Obligors' expense) reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions)
to change the jurisdiction of its Applicable Lending Office if it would avoid
the need for, or reduce the amount of, any such additional amounts that may
thereafter accrue; PROVIDED, HOWEVER, that such change of the Applicable
Lending Office, and the filing of any certificates or forms contemplated by
the immediately succeeding sentence, would not, in the sole judgment of such
Lender, be otherwise disadvantageous to such Lender. Each Lender shall
submit to Borrower or any applicable Governmental Authority all certificates
or forms relating to Taxes reasonably requested of it by Borrower pursuant to
applicable provisions of the Code, treaties or regulations.
(e) If Borrower or any Guarantor pays any Gross-up Amount or
additional amount under this Section 5.06 to a Lender and such Lender
determines in its sole and absolute discretion that it has actually received
or realized in connection therewith any refund or any reduction of, or credit
against, its tax liabilities (a "TAX BENEFIT"), such Lender shall pay to such
Borrower or such Guarantor,
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as the case may be, an amount that the Lender shall, in its sole and absolute
discretion, determine is equal to the net benefit, after tax, which was
obtained by the Lender as a consequence of such Tax Benefit; PROVIDED,
HOWEVER, that (i) such Lender shall not be required to make any payment under
this Section 5.06(e) if an Event of Default shall have occurred and be
continuing; (ii) any taxes that are imposed on a Lender as a result of a
disallowance or reduction (including through the expiration of any tax credit
carryover or carryback of such Lender that otherwise would not have expired)
of any Tax Benefit with respect to which such Lender has made a payment to
Borrower or any Guarantor pursuant to this Section 5.06(e) shall be treated
as a tax for which Borrower or any Guarantor is obligated to indemnify such
Lender pursuant to this Section 5.06 without any exclusions or defenses; and
(iii) nothing in this Section 5.06(e) shall require the Lender to disclose
any confidential information to Borrower or any Guarantor (including its tax
returns).
Section 6. GUARANTEE.
6.01. THE GUARANTEE. The Guarantors hereby jointly and severally
guarantee as a primary obligor and not as a surety to each Lender, Issuing
Lender and Agent and their respective successors and assigns the prompt
payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the principal of and interest (including any interest, fees,
costs or charges that would accrue but for the provisions of the Bankruptcy
Code after any bankruptcy or insolvency petition under the Bankruptcy Code)
on the Loans made by the Lenders to, and the Notes held by each Lender of,
Borrower and all other Obligations from time to time owing to the Lenders,
Issuing Lender or Agents by Borrower under this Agreement and under the Notes
and by any Obligor under any of the other Credit Documents, and all
obligations of Borrower or any Subsidiary to any Lender or any Affiliate of
any Lender in respect of any Swap Contract and all Obligations owing to the
Issuing Lender under the Letter of Credit Documents, in each case strictly in
accordance with the terms thereof (such obligations being herein collectively
called the "GUARANTEED OBLIGATIONS"). The Guarantors hereby jointly and
severally agree that if Borrower shall fail to pay in full when due (whether
at stated maturity, by acceleration or otherwise) any of the Guaranteed
Obligations, the Guarantors will promptly pay the same, without any demand or
notice whatsoever, and that in the case of any extension of time of payment
or renewal of any of the Guaranteed Obligations, the same will be promptly
paid in full when due (whether at extended maturity, by acceleration or
otherwise) in accordance with the terms of such extension or renewal.
6.02. OBLIGATIONS UNCONDITIONAL. The obligations of the
Guarantors under Section 6.01 are absolute, irrevocable and unconditional,
joint and several, irrespective of the value, genuineness, validity,
regularity or enforceability of the obligations of Borrower under this
Agreement, the Notes or any other agreement or instrument referred to herein
or therein, or any substitution, release or exchange of any other guarantee
of or security for any of the Guaranteed Obligations, and, to the fullest
extent permitted by applicable law, irrespective of any other circumstance
whatsoever that might otherwise constitute a legal or equitable discharge or
defense of a surety or Guarantor (except for payment in full). Without
limiting the generality of the foregoing, it is agreed that the occurrence of
any one or more of the following shall not alter or impair the liability of
the Guarantors hereunder which shall remain absolute, irrevocable and
unconditional under any and all circumstances as described above:
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(i) at any time or from time to time, without notice to the
Guarantors, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of this
Agreement or the Notes or any other agreement or instrument referred to
herein or therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be amended in any
respect, or any right under this Agreement, the Notes or any other Credit
Document or any other agreement or instrument referred to herein or
therein shall be amended or waived in any respect or any other guarantee
of any of the Guaranteed Obligations or any security therefor shall be
released or exchanged in whole or in part or otherwise dealt with;
(iv) any lien or security interest granted to, or in favor of, the
Issuing Lender or any Lender or Agent as security for any of the
Guaranteed Obligations shall fail to be perfected; or
(v) the release of any other Guarantor.
The Guarantors hereby expressly waive diligence, presentment,
demand of payment, protest and all notices whatsoever, and any requirement
that the Issuing Lender or any Agent or any Lender exhaust any right, power
or remedy or proceed against Borrower under this Agreement or the Notes or
any other agreement or instrument referred to herein or therein, or against
any other Person under any other guarantee of, or security for, any of the
Guaranteed Obligations. The Guarantors waive any and all notice of the
creation, renewal, extension, waiver, termination or accrual of any of the
Guaranteed Obligations and notice of or proof of reliance by the Issuing
Lender, any Lender or any Agent upon this guarantee or acceptance of this
guarantee, and the Guaranteed Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred in
reliance upon this guarantee, and all dealings between Borrower and the
Issuing Lender, Lenders and Agents shall likewise be conclusively presumed to
have been had or consummated in reliance upon this guarantee. This guarantee
shall be construed as a continuing, absolute, irrevocable and unconditional
guarantee of payment without regard to any right of offset with respect to
the Guaranteed Obligations at any time or from time to time held by the
Issuing Lender, Lenders and Agents, and the obligations and liabilities of
the Guarantors hereunder shall not be conditioned or contingent upon the
pursuit by the Issuing Lender, Lenders or Agents or any other Person at any
time of any right or remedy against Borrower or against any other Person
which may be or become liable in respect of all or any part of the Guaranteed
Obligations or against any collateral security or guarantee therefor or right
of offset with respect thereto. This guarantee shall remain in full force
and effect and be binding in accordance with and to the extent of its terms
upon the Guarantors and the successors and assigns thereof, and shall inure
to the benefit of the Lenders, and their respective successors and assigns,
notwithstanding that from time to time during the term of this Agreement
there may be no Guaranteed Obligations outstanding.
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6.03. REINSTATEMENT. The obligations of the Guarantors under this
Section 6 shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of Borrower in respect of the Guaranteed
Obligations is rescinded or must be otherwise restored by any holder of any
of the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise. The Guarantors jointly and
severally agree that they will indemnify the Issuing Lender, each Agent and
each Lender on demand for all reasonable costs and expenses (including
reasonable fees of counsel) incurred by the Issuing Lender, such Agent or
such Lender in connection with such rescission or restoration, including any
such costs and expenses incurred in defending against any claim alleging that
such payment constituted a preference, fraudulent transfer or similar payment
under any bankruptcy, insolvency or similar law, other than any costs or
expenses resulting from the gross negligence or bad faith of such Creditor.
6.04. SUBROGATION; SUBORDINATION. Each Guarantor hereby agrees
that until the indefeasible payment and satisfaction in full in cash of all
Guaranteed Obligations and the expiration and termination of the Commitments
of the Lenders under this Agreement it shall not exercise any right or remedy
arising by reason of any performance by it of its guarantee in Section 6.01,
whether by subrogation or otherwise, against Borrower or any other Guarantor
of any of the Guaranteed Obligations or any security for any of the
Guaranteed Obligations. The payment of any amounts due with respect to any
indebtedness of Borrower or any other Guarantor now or hereafter owing to any
Guarantor by reason of any payment by such Guarantor under the Guarantee in
this Section 6 is hereby subordinated to the prior indefeasible payment in
full in cash of the Guaranteed Obligations. Each Guarantor agrees that it
will not demand, sue for or otherwise attempt to collect any such
indebtedness of Borrower to such Guarantor until the Obligations shall have
been indefeasibly paid in full in cash. If, notwithstanding the foregoing
sentence, any Guarantor shall prior to the indefeasible payment in full in
cash of the Guaranteed Obligations collect, enforce or receive any amounts in
respect of such indebtedness, such amounts shall be collected, enforced and
received by such Guarantor as trustee for the Lead Arranger, the Issuing
Lender and the Lenders and be paid over to the Administrative Agent on
account of the Guaranteed Obligations without affecting in any manner the
liability of such Guarantor under the other provisions of the guaranty
contained herein.
6.05. REMEDIES. The Guarantors jointly and severally agree that,
as between the Guarantors and the Lenders, the obligations of Borrower under
this Agreement and the Notes may be declared to be forthwith due and payable
as provided in Section 10 (and shall be deemed to have become automatically
due and payable in the circumstances provided in said Section 10) for
purposes of Section 6.01 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or such obligations from becoming
automatically due and payable) as against Borrower and that, in the event of
such declaration (or such obligations being deemed to have become
automatically due and payable), such obligations (whether or not due and
payable by Borrower) shall forthwith become due and payable by the Guarantors
for purposes of Section 6.01.
6.06. INSTRUMENT FOR THE PAYMENT OF MONEY. Each Guarantor hereby
acknowledges that the guarantee in this Section 6 constitutes an instrument
for the payment of money, and consents and agrees that any Lender or Agent,
at its sole option, in the event of a dispute by such Guarantor in
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the payment of any moneys due hereunder, shall have the right to bring
motion-action under New York CPLR Section 3213.
6.07. CONTINUING GUARANTEE. The guarantee in this Section 6 is a
continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.
6.08. GENERAL LIMITATION ON GUARANTEE OBLIGATIONS. In any action
or proceeding involving any state corporate law, or any state, Federal or
foreign bankruptcy, insolvency, reorganization or other law affecting the
rights of creditors generally, if the obligations of any Guarantor under
Section 6.01 would otherwise be held or determined to be void, voidable,
invalid or unenforceable, or subordinated to the claims of any other
creditors, on account of the amount of its liability under Section 6.01,
then, notwithstanding any other provision to the contrary, the amount of such
liability shall, without any further action by such Guarantor, any Lender,
any Agent or any other Person, be automatically limited and reduced to the
highest amount that is valid and enforceable and not subordinated to the
claims of other creditors as determined in such action or proceeding.
Section 7. CONDITIONS PRECEDENT.
7.01. EFFECTIVENESS AND INITIAL EXTENSION OF CREDIT. The
effectiveness of the Credit Documents and the obligation of the Lenders to
make any initial extension of credit hereunder (whether by making a Loan or
issuing a Letter of Credit) is subject to the satisfaction of the conditions
precedent that:
(i) DOCUMENTATION AND EVIDENCE OF CERTAIN MATTERS. The Lead
Arranger shall have received the following documents, each duly executed
where appropriate (with sufficient conformed copies for each Lender), each
of which shall be reasonably satisfactory to the Lead Arranger (and to the
extent specified below, to the Majority Lenders or to each Lender, as the
case may be) in form and substance:
(1) CORPORATE DOCUMENTS. Certified true and complete copies of
the charter and by-laws and all amendments thereto (or equivalent
documents) of each Obligor and Parent and of all corporate authority
for each Obligor and Parent (including board of director resolutions
and evidence of the incumbency, including specimen signatures, of
officers) with respect to the execution, delivery and performance of
such of the Credit Documents to which such Obligor and Parent is
intended to be a party and each other document to be delivered by
such Obligor or Parent from time to time in connection herewith and
the extensions of credit hereunder and the consummation of the
Transactions, certified as of the Closing Date as complete and
correct copies thereof by the Secretary or an Assistant Secretary of
such Obligor or Parent.
(2) OFFICERS' CERTIFICATE. An Officers' Certificate of
Borrower, dated the Closing Date, to the effect set forth in clauses
(a) and (b) of Section 7.02(i) and to the effect that all conditions
precedent to the making of such extension of credit have
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been satisfied (except to the extent that any such condition is
required to be satisfactory to, or determined by, any Agent, the
Lenders or the Majority Lenders).
(3) OPINIONS OF COUNSEL. (i) Opinion of Paul, Hastings,
Janofsky & Walker, LLP, counsel to the Obligors and Parent,
substantially in the form of EXHIBIT G-1 and (ii) Opinion of local
counsel to the Obligors reasonably acceptable to the Lead Arranger
(and each Obligor and Parent hereby instructs such counsel to deliver
such opinion to the Lenders and the Agents).
(4) THE CREDIT AGREEMENT. This Agreement, (i) executed and
delivered by a duly authorized officer of each Obligor with a
counterpart for each Lender, and (ii) executed and delivered by a
duly authorized officer of each Lender and Agent.
(5) NOTES. The Notes, duly completed and executed for each
Lender that has requested Notes prior to the Closing Date.
(6) SECURITY DOCUMENTS. The Security Agreement, the Credit
Facility Escrow Agreement, such other pledge agreements required
under local law in the reasonable judgment of counsel to the
Administrative Agent and requested reasonably in advance of the
intended Closing Date (each of which shall be in full force and
effect) and the Perfection Certificate, substantially in the form of
EXHIBIT P, duly authorized, executed and delivered by the Obligors
and the Administrative Agent, and the certificates identified under
the name of such Obligors in Annex 1 to the Security Agreement,
accompanied by undated stock powers executed in blank if applicable,
and the notes identified under the name of such Obligors in Annex 1B
to the Security Agreement, accompanied by undated notations or
instruments of assignment executed in blank.
(7) SOLVENCY CERTIFICATE AND OPINION. A certificate from the
chief financial officer of Borrower substantially in the form of
EXHIBIT M, and, at Borrower's expense, an opinion of Houlihan Lokey
Howard & Zukin Financial Advisors, Inc. in form and substance
reasonably satisfactory to the Lead Arranger with respect to the
Solvency of Borrower (on a consolidated basis) immediately after
giving effect to the Transactions.
(8) INSURANCE. Evidence of insurance complying with the
requirements of Section 9.04 and the Security Documents in scope,
form and substance reasonably satisfactory to the Lead Arranger and
certificates naming the Administrative Agent as an additional insured
and/or loss payee, and stating that such insurance shall not be
canceled or revised without 30 days prior written notice by the
insurer to the Administrative Agent.
(9) TRANSACTION DOCUMENTS, ETC. Copies of each of the
Transaction Documents, any management or similar agreement entered
into by any Obligor or any executive officer or director thereof with
Parent or any of its Affiliates, and all exhib-
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its, appendices, annexes and schedules to any thereof, each certified
by a senior officer of Borrower as true, complete and correct copies
thereof.
(10) AUDITED FINANCIAL STATEMENTS OF WING. Audited financial
statements of Wing for the fiscal year ended December 31, 1997,
together with the report thereon by Pricewaterhousecoopers, certified
public accountants, which shall not have any material qualification.
(11) CHANGE OF CONTROL OFFER DOCUMENTS. Substantially final
drafts of the Change of Control Offer Documents in form and substance
reasonably satisfactory to the Lead Arranger, and such drafts shall
reflect that the Change of Control Offer will be commenced no later
than the fifth succeeding Business Day after the Closing Date.
(ii) DATE OF CLOSING. Such extension of credit shall be made on or
before October 7, 1998.
(iii) COMPLETION OF INVESTOR DEBT SECURITIES FINANCING. Atrium
Holdings shall have received aggregate gross proceeds of not less than
$20.0 million from the Investor Debt Securities Financing.
(iv) INVESTOR ESCROW FUNDING. The Investor Escrow Agreement shall
have been duly authorized, executed and delivered by the parties thereto
and the Investor Escrow Amount shall have been delivered thereunder.
(v) EQUITY CONTRIBUTIONS. Atrium Holdings shall have received at
least $50.0 million from the Equity Contributions. Immediately after
giving effect to the Transactions, the Investors and/or entities
controlled by, or under common control with, them shall beneficially own
not less than a majority of the economic and voting interests in Parent,
and Parent shall beneficially own all of the economic and voting interests
in Atrium Holdings, and Atrium Holdings shall beneficially own all of the
economic and voting interests in Borrower.
(vi) CONSUMMATION OF TRANSACTIONS. The Transactions (other than the
Change of Control Offer) shall have been or shall simultaneously be
consummated in accordance with the terms hereof and the terms of the
Transaction Documents and the other documentation therefor (without the
waiver or amendment of any material condition unless consented to by the
Lead Arranger and the Majority Lenders).
(vii) MAXIMUM CONSIDERATION. The total consideration (including debt
assumed) to consummate the Merger shall not exceed $275.0 million.
(viii) EXISTING DEBT REPAYMENT. All obligations of each Company with
respect to the Refinanced Debt shall have been (or shall be
simultaneously) paid in full and all lending commitments thereunder
terminated to the satisfaction of the Lead Arranger with all Liens in
favor of existing lenders being unconditionally released. The Lead
Arranger shall have received a "pay-off" letter with respect to all such
Refinanced Debt. In addition, the Lead Ar-
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ranger shall have received from any Person holding any Lien securing any
such Refinanced Debt, such Uniform Commercial Code termination statements,
mortgage releases and other instruments, in each case in proper form for
recording, as the Lead Arranger shall have reasonably requested to release
and terminate of record the Liens securing such Refinanced Debt.
(ix) NO OTHER DEBT OR PREFERRED STOCK. After giving effect to the
Transactions and the initial borrowings hereunder on the Closing Date,
each Company shall have outstanding no Indebtedness or preferred stock (or
direct or indirect guarantee or other credit support in respect thereof)
outstanding other than (i) the Loans, (ii) the Existing Notes, (iii) the
Investor Debt Securities and (iv) Capitalized Lease Obligations and
purchase money indebtedness listed on SCHEDULE 9.08 not exceeding $5.0
million in the aggregate on terms and conditions reasonably satisfactory
to the Lead Arranger.
(x) TAX SHARING AGREEMENT. The Tax Sharing Agreement shall have
been executed and delivered by the parties thereto and shall be in full
force and effect.
(xi) FEES AND EXPENSES. The Lead Arranger shall have received
satisfactory evidence that fees and expenses in connection with the
Transactions (other than prepayment penalties and option compensation
resulting from the Transactions) will not exceed $14.0 million (exclusive
of any expenses paid by seller pursuant to the Merger Agreement).
(xii) NO STRUCTURAL SUBORDINATION TO THE EXISTING NOTES. Borrower and
the obligor on the Existing Notes (or any refinancing thereof) shall be
the same entity.
(xiii) NO MATERIAL ADVERSE CHANGE. There shall not have occurred or
become known any Material Adverse Change of the Contributed Businesses and
Borrower, together with their respective Subsidiaries taken as a whole,
after giving effect to the Transactions, since December 31, 1997.
(xiv) PRO FORMA BALANCE SHEET. The Lead Arranger and the Lenders
shall have received a pro forma consolidated balance sheet of Borrower as
of June 30, 1998 after giving effect to the Transactions.
(xv) APPROVALS. All requisite Governmental Authorities and third
parties shall have approved or consented to the Transactions and the other
transactions contemplated hereby to the extent required and all applicable
appeal periods shall have expired. There shall be no governmental or
judicial action or Proceeding, actual or threatened, that has had the
effect of (or could reasonably be expected to have the effect of)
restraining, preventing or imposing materially burdensome conditions on
any of the Transactions or the other transactions contemplated hereby.
(xvi) PAYMENT OF FEES AND EXPENSES OF AGENTS. All accrued fees and
expenses (including the reasonable fees and expenses of Cahill Gordon &
Reindel, special counsel to both the Lead Arranger and the Administrative
Agent (and appropriate local counsel in respect of
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security interest matters)) of the Lead Arranger and the Administrative
Agent in connection with the Credit Documents shall have been paid.
(xvii) MAXIMUM REVOLVING CREDIT LOANS. The aggregate amount of
Revolving Credit Loans made in connection with the consummation of the
Transactions on the Closing Date shall not exceed $5.0 million unless
consented to by the Lead Arranger in its sole discretion.
(xviii) MAXIMUM PRO FORMA TOTAL LEVERAGE RATIO. The Lead Arranger and
the Lenders shall have received satisfactory evidence (including
satisfactory supporting schedules and other data) that the Total Leverage
Ratio (assuming for purposes of Consolidated EBITDA that the Transactions
(other than the Change of Control Offer) had occurred on the first day of
the relevant Measurement Period) is not greater than 4.6:1.0.
(xix) FILINGS AND LIEN SEARCHES. The Obligors shall have authorized,
executed and delivered each of the following:
(1) UCC Financing Statements (Form UCC-1) in appropriate form
for filing under the UCC and any other applicable law, rule or
regulation in each jurisdiction as may be necessary or appropriate to
perfect the Liens created, or purported to be created, by the
Security Documents;
(2) the results of a recent lien, tax and judgment search
against each Company as debtor in each of the jurisdictions and
offices where (a) assets of each Company are located or recorded,
(b) any of the Collateral is located and (c) each Company's principal
place of business is located, and such search shall reveal no liens
on any of their assets except for liens permitted by the Credit
Documents or liens to be discharged in connection with the
transactions contemplated hereby; and
(3) evidence of arrangements for (A) the completion of all
recordings and filings of, or with respect to, the Security
Documents, including, to the extent required by Lead Arrangers,
filings with the United States Patent, Trademark and Copyright
offices, (B) delivery of such other security and other documents, and
(C) the taking of all actions as may be necessary or, in the
reasonable opinion of the Lead Arranger, desirable, to perfect the
Liens created, or purported to be created, by the Security Agreement.
(xx) CONDITIONS RELATING TO MORTGAGED REAL PROPERTY AND REAL
PROPERTY. On or prior to the Closing Date, each Obligor to enter into a
Mortgage shall have caused to be delivered to the Administrative Agent, on
behalf of the Lenders, the following documents and instruments:
(i) a Mortgage encumbering each Mortgaged Real Property in
favor of the Administrative Agent, for the benefit of the Lenders, in
form for recording in the recording office of each jurisdiction where
each such Mortgaged Real Property is
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situated, together with such other documentation as shall
be required to create a lien under applicable law, and other
similar statements as are contemplated by the counsel opinions
described in subsection 7.01(i)(3) hereof in respect of such
Mortgage, all of which shall be in form and substance reasonably
satisfactory to the Lead Arranger, which Mortgage and other
instruments shall be effective to create a first priority Lien on
such Mortgaged Real Property subject to no Liens other than Prior
Liens applicable to such Mortgaged Real Property;
(ii) with respect to each Mortgaged Real Property, such
consents, approvals, estoppels, tenant subordination agreements or
other instruments as necessary or as shall be reasonably deemed
required by the Lead Arranger to consummate the transactions
contemplated hereby or to grant the Lien contemplated by the
Mortgage; and
(iii) the following documents and instruments:
(1) with respect to each Mortgage, a policy (or commitment
to issue a policy) of title insurance insuring (or committing to
insure) the Lien of such Mortgage as a valid first priority Lien
on the real property and fixtures described therein in an amount
not less than 115% of the fair market value thereof which policy
(or commitment) shall (a) be issued by the Title Company,
(b) include such reinsurance arrangements (with provisions for
direct access) as shall be reasonably acceptable to the Lead
Arranger, (c) have been supplemented by such endorsements (or
where such endorsements are not available, opinions of special
counsel or other professionals reasonably acceptable to the Lead
Arranger) as shall be reasonably requested by the Lead Arranger,
(d) such affidavits and instruments of indemnification as shall
be reasonably required to induce the Title Company to issue the
policy or policies (or commitment) and endorsements contemplated
in this subparagraph (iii) and (e) contain no exceptions to
title other than exceptions for (x) Liens of the type described
in clauses (a), (b), (c), (d) and (f) of the definition of
Permitted Liens, (y) any Lien of the type described in clause
(s) of the definition of Permitted Liens to the extent the
original Lien is permitted hereunder and (z) the Prior Liens
applicable to such Mortgaged Real Property;
(2) with respect to each Mortgaged Real Property (other
than as set forth on SCHEDULE 7.01(XX)), a Survey;
(3) with respect to each Mortgaged Real Property, policies
or certificates of insurance as required by the Mortgage
relating thereto;
(4) with respect to each Mortgaged Real Property, UCC,
judgment and tax lien searches complying with Section
7.01(xix)(ii) above;
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(5) evidence acceptable to the Lead Arrangers of payment
by Borrower of all title insurance premiums, search and
examination charges, survey costs, mortgage recording taxes and
related charges required for the recording of the Mortgages and
issuance of the title insurance policies referred to in
subclause (iii)(1) of this Section 7.01(xxv) above;
(6) with respect to each Real Property or Mortgaged Real
Property, copies of all Leases, subleases, leases in which
Borrower holds the tenant's interest or other agreements
relating to possessory interests, if any. To the extent any of
the foregoing affect any Mortgaged Real Property, such agreement
shall be subordinate to the Lien of the Mortgage to be recorded
against such Mortgaged Real Property either expressly by its
terms or pursuant to a subordination, non-disturbance and
attornment agreement and shall otherwise be reasonably
acceptable to the Lead Arrangers;
(7) with respect to each Mortgaged Real Property, Borrower
shall have made all notification, registrations and filings, to
the extent required by, and in accordance with, all State and
Local Real Property Disclosure Requirements applicable to such
Mortgaged Real Property, including the use of forms provided by
state or local agencies, where such forms exist, whether to
Borrower or to or with the state or local agency; and
(8) with respect to each Mortgaged Real Property, an
Officers' Certificate or other evidence reasonably satisfactory
to the Lead Arranger that as of the date thereof there (a) has
been issued and is in effect, to the extent required, a valid
and proper certificate of occupancy or local or foreign
equivalent for the use then being made of such Mortgaged Real
Property, (b) has not occurred any material Casualty Event of
any Mortgaged Real Property and (c) except as could not be
reasonably expected to have a Material Adverse Effect or as may
be disclosed in the Survey of such Mortgaged Real Property
delivered pursuant to subclause (iii)(2) of this
Section 7.01(xx) above, are no disputes regarding boundary
lines, location, encroachment or possession of such Mortgaged
Real Property and no state of facts existing which could give
rise to any such claim.
(xxi) OTHER MATTERS. The Lenders shall have received such other legal
opinions, corporate documents and other instruments and/or certificates as
the Lead Arranger or the Majority Lenders may request in their reasonable
discretion.
7.02. INITIAL AND SUBSEQUENT EXTENSIONS OF CREDIT. The obligation
of the Lenders to make any Loan or otherwise extend any credit to Borrower upon
the occasion of each borrowing or other extension of credit (whether by making
a Loan or issuing a Letter of Credit but excluding any Continuation of any
LIBOR Loan) hereunder (including the initial borrowing) is subject to the
further conditions precedent that:
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(i) NO DEFAULT; REPRESENTATIONS AND WARRANTIES TRUE. Both
immediately prior to the making of such Loan or other extension of credit
and also after giving pro forma effect thereto and to the intended use
thereof:
(a) no Default shall have occurred and be continuing; and
(b) the representations and warranties made by the Obligors in
Section 8, and by each Obligor in each of the other Credit Documents
to which it is a party, shall be true and complete in all material
respects on and as of the date of the making of such Loan or other
extension of credit with the same force and effect as if made on and
as of such date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such
specific date).
(ii) NO LEGAL BAR. The Loans and the use of proceeds thereof shall
not contravene, violate or conflict with, nor involve any Lender in a
violation of, any law, rule, injunction, or regulation or determination of
any court of law or other Governmental Authority.
Each notice of borrowing or request for the issuance of a Letter of
Credit by Borrower hereunder shall constitute a certification by Borrower to
the effect set forth in clause (i) above as of the date of such borrowing or
issuance.
Each notice submitted by Borrower hereunder for an extension of
credit hereunder shall constitute a representation and warranty by Borrower,
as of the date of such notice and as of the relevant borrowing date or date
of issuance of a Letter of Credit, as applicable, that the applicable
conditions in Sections 7.01 and 7.02 have been satisfied or waived in
accordance with the terms hereof.
7.03. PERMITTED ACQUISITIONS. The obligation of the Lenders to
make any Revolving Loan or otherwise extend any credit to Borrower, the
proceeds of which will be used to make a Permitted Acquisition, is subject to
the satisfaction of the conditions set forth in Section 7.01 (if the date of
such extension of credit is the Closing Date) and Section 7.02 and to the
further condition precedent that there is at least $10.0 million of aggregate
Unutilized Revolving Credit Commitments after giving effect to such extension
of credit to effect any such Permitted Acquisition.
Section 8. REPRESENTATIONS AND WARRANTIES. Each of the Obligors
and Parent (with respect to itself only) represents and warrants to the
Creditors that at and as of each Funding Date (in each case immediately
before and immediately after giving effect to the transactions to occur on
such date (including the Transactions)):
8.01. CORPORATE EXISTENCE. Parent, each Obligor and each
Subsidiary: (a) is a corporation, partnership or other entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization; (b) has all requisite corporate or other
power and authority, and has all governmental licenses, authorizations,
consents and approvals necessary to own its Property and carry on its
business as now being conducted, except as would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect; and (c) is
qualified to do business and is
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in good standing in all jurisdictions in which the nature of the business
conducted by it makes such qualification necessary and where failure to be so
qualified and in good standing individually or in the aggregate is reasonably
likely to have a Material Adverse Effect.
8.02. FINANCIAL CONDITION; ETC. (a) Borrower has heretofore
delivered to the Lenders (A) the audited consolidated balance sheets of
Borrower and its Subsidiaries as of December 31, 1995, December 31, 1996 and
December 31, 1997, and the related statements of earnings, changes in
stockholders' equity and cash flows for the fiscal years ended on those
dates, together with reports thereon by Pricewaterhousecoopers, certified
public accountants, (B) the unaudited consolidated balance sheets of Borrower
and its Subsidiaries as of March 31, 1998 and June 30, 1998, and the related
statements of earnings and cash flows for the fiscal periods ended on those
dates, (C) the audited consolidated balance sheets of Wing as of June 30,
1995, June 30, 1996, June 30, 1997 and December 31, 1997, and the related
statements of earnings, changes in stockholders' equity and cash flows for
the fiscal years ended on those dates, together with reports thereon by
Pricewaterhousecoopers, certified public accountants, (D) the unaudited
consolidated balance sheets of Wing as of March 31, 1998 and June 30, 1998
and the related statements of earnings and cash flows for the fiscal periods
ended on those dates, (E) the audited consolidated balance sheets of Darby as
of December 31, 1996 and December 31, 1997, and the related statements of
earnings, changes in stockholders' equity and cash flows for the fiscal years
ended on those dates, together with reports thereon by
Pricewaterhousecoopers, certified public accountants, and (F) the unaudited
consolidated balance sheets of Darby as of March 31, 1998 and June 30, 1998
and the related statements of earnings and cash flows for the fiscal periods
ended on those dates. All of said financial statements, including in each
case the related schedules and notes are true, complete (in the case of
year-end financial statements) and correct in all material respects, have
been prepared in accordance with GAAP consistently applied (other than the
omission of footnotes with respect to interim statements) and present fairly
the financial position of Borrower and its Subsidiaries, Wing and its
Subsidiaries or Darby and its Subsidiaries, as the case may be, as of the
respective dates of said balance sheets and the results of their operations
for the respective periods covered thereby, subject (in the case of interim
statements) to period-end audit adjustments.
(b) Except as set forth in the financial statements or other
information referred to in Section 8.02(a), as of the Closing Date there are
no material liabilities of any Company of any kind, whether accrued,
contingent, absolute, determined, determinable or otherwise, and there is no
existing condition, situation or set of circumstances which is reasonably
likely to result in such a liability, other than:
(i) liabilities incurred in the ordinary course of business
consistent with past practice since December 31, 1997 which in the
aggregate are not reasonably likely to have a Material Adverse Effect; and
(ii) liabilities under this Agreement and the other Credit Documents,
the Merger Agreement, the Contribution Agreements or the Investor Debt
Securities Documents or liabilities incurred in connection with the
transactions contemplated hereby.
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(c) Except as set forth in the financial statements referred to in
Section 8.02(a), since December 31, 1997, there has been no Material Adverse
Effect or any event, change or circumstance which could reasonably be expected
to cause or evidence, either individually or together with any other events,
changes and circumstances, a Material Adverse Effect.
(d) The pro forma balance sheets of Borrower and its Consolidated
Subsidiaries (the "PRO FORMA BALANCE SHEETS"), certified by the chief financial
officer of Borrower, copies of which have been heretofore furnished to each
Lender, together with the notes thereto, accurately reflect in all material
respects all adjustments necessary to give effect to the Transactions, were
prepared based on good faith assumptions, and present fairly in all material
respects on a pro forma basis the consolidated financial position of Borrower
and its Consolidated Subsidiaries as of June 30, 1998, adjusted as described
above.
8.03. LITIGATION. Except as disclosed in SCHEDULE 8.03, there is no
Proceeding pending against, or to the knowledge of any Company threatened in
writing against or affecting, any Company or any of its respective Properties
before any Governmental Authority that has a reasonable likelihood of being
adversely determined and that, if determined or resolved adversely to such
Company in accordance with the plaintiff's demands, is reasonably likely to
have (individually or in the aggregate) a Material Adverse Effect.
8.04. NO BREACH; NO DEFAULT. (a) None of the execution, delivery
and performance by each of the Obligors and Parent of any Credit Document or
Transaction Document to which it is a party and the consummation of the
transactions herein and therein contemplated (including the Transactions) will
(i) conflict with or result in a breach of, or require any consent (which has
not been obtained and is in full force and effect) under, any Organic Document
of any Company or Parent, or any applicable Requirement of Law or any order,
writ, injunction or decree of any Governmental Authority binding on any Company
or Parent, or any term or provision of any Contractual Obligation of any
Company or Parent, or (ii) constitute (with due notice or lapse of time or
both) a default under any such Contractual Obligation, or (iii) result in the
creation or imposition of any Lien (except for the Liens created pursuant to
the Security Documents) upon any Property of any Company or Parent pursuant to
the terms of any such Contractual Obligation, except with respect to each of
the foregoing which is not (either individually or in the aggregate) reasonably
likely to have a Material Adverse Effect.
(b) No Company is in default under or with respect to any
Contractual Obligation (including any Transaction Document) or any order,
award or decree of any Governmental Authority or arbitrator binding upon it
or any of its Property in any respect which is likely to have (individually
or in the aggregate) a Material Adverse Effect.
(c) No Default has occurred and is continuing.
8.05. ACTION. Each of the Obligors and Parent has all necessary
corporate power, authority and legal right to execute, deliver and perform
its obligations under each Credit Document and Transaction Document to which
it is a party and to consummate the transactions herein and
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therein contemplated; the execution, delivery and performance by each of the
Obligors and Parent of each Credit Document and Transaction Document to which
it is a party and the consummation of the transactions herein and therein
contemplated have been duly authorized by all necessary corporate action on
its part; and this Agreement has been duly and validly executed and delivered
by each of the Obligors and Parent and constitutes, and each of the Notes and
the other Credit Documents and Transaction Documents to which it is a party
when executed and delivered by such Obligor or Parent (in the case of the
Notes, for value) will constitute, its legal, valid and binding obligation,
enforceable against each of the Obligors and Parent in accordance with its
terms, except as such enforceability may be limited by (a) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar laws
of general applicability from time to time in effect affecting the
enforcement of creditors' rights and remedies and (b) the application of
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
8.06. APPROVALS. No authorizations, approvals or consents of, and
no filings or registrations with, any Governmental Authority or any
securities exchange are necessary for the execution, delivery or performance
by any Obligor or Parent of the Credit Documents and the Transaction
Documents to which it is a party or for the legality, validity or
enforceability hereof or thereof or for the consummation of the transactions
herein and therein contemplated, except for filings and recordings in respect
of the Liens created pursuant to the Security Documents and, in connection
with the Transactions, except for consents, filings and authorizations that
have been maintained or made and are in full force and effect.
8.07. REPRESENTATIONS AND WARRANTIES IN THE MERGER AGREEMENT. The
representations and warranties set forth in Section 3.1 of the Merger
Agreement are, in each case, true and correct in all material respects as of
the time such representations and warranties were made and shall be true and
correct in all material respects as of the Closing Date as if such
representations and warranties were made on and as of such date, unless such
representations and warranty expressly indicates that it is being made as of
any other specific date.
8.08. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events
for which liability could reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. The present value of all
accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed the fair market value of the assets of all
such underfunded Plans by an amount that could reasonably be expected to have
a Material Adverse Effect. Each Company is in compliance in all material
respects with the presently applicable provisions of ERISA and the Code with
respect to each Employee Benefit Plan maintained by such Company. Using
actuarial assumptions and computation methods consistent with subpart 1 of
subtitle E of Title IV of ERISA, the aggregate liabilities of any of each
ERISA Entity to all Multiemployer Plans in the event of a complete withdrawal
therefrom, as of the close of the most recent fiscal year of each such
Multiemployer Plan, would not reasonably be expected to result in a Material
Adverse Effect.
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Each Foreign Plan has been maintained in substantial compliance
with its terms and with the requirements of any and all applicable laws,
statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities, except
where failure to do so would not be expected to have a Material Adverse
Effect. Neither the Borrower nor any Subsidiary have incurred any material
obligation in connection with the termination of or withdrawal from any
Foreign Plan. The present value of the accrued benefit liabilities (whether
or not vested) under each Foreign Plan which is funded, determined as of the
end of the most recently ended fiscal year of the Borrower or Subsidiary on
the basis of actuarial assumptions, each of which is reasonable, did not
materially exceed the current value of the assets of such Foreign Plan, and
for each Foreign Plan which is not funded, the obligations of such Foreign
Plan are properly accrued.
8.09. TAXES. Each Company has filed or caused to be filed all
U.S. federal income tax returns and all other material returns, statements,
forms and reports for taxes (the "RETURNS"), domestic or foreign, required to
be filed by it and has paid all taxes payable by it which have become due or
any assessments made against it or any of its Property and all other material
taxes, fees or other charges imposed on it or any of its Property (including
the Mortgaged Real Property) by any Governmental Authority (other than those
which, in the aggregate, are not substantial in amount or those the amount or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have
been provided on the books of the relevant Company, as the case may be); the
Returns accurately reflect in all material respects all liability for taxes
of the relevant Company for the periods covered thereby; and no tax lien has
been filed (except with respect to taxes not yet due and payable) and, to the
best knowledge of the Obligors, no action, suit, proceeding, investigation,
audit or claim is being asserted or has been threatened in writing or
otherwise by any authority with respect to any such tax, fee or other charge,
except as could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. No Company has entered into an
agreement or waiver extending any statute of limitations relating to the
payment or collection of taxes of any Company.
8.10. INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT;
OTHER RESTRICTIONS. No Company is an "investment company", or a company
"controlled" by an "investment company", within the meaning of the United
States Investment Company Act of 1940, as amended. No Company is a "holding
company", or an "affiliate" of a "holding company" or a "subsidiary company"
of a "holding company", within the meaning of the United States Public
Utility Holding Company Act of 1935, as amended. No Obligor is subject to
regulation under any law or regulation which limits its ability to incur
Indebtedness, other than Regulation X of the Board of Governors of the
Federal Reserve System.
8.11. ENVIRONMENTAL MATTERS. Except as disclosed in SCHEDULE 8.11
and except as would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect: (i) each Company is in
compliance with and in the last two years has been in compliance with, and is
not subject to liability under, any Environmental Laws applicable to it and
there are no Environmental Laws, including such Laws which have been formally
proposed for public comment, which would reasonably be expected to result in
material expenditures by any Company, and no such Environmental Laws would
reasonably be expected to interfere in any material way with current or
pro-
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jected operations of any Company; (ii) no Company has received written notice
that it or any of its predecessors in interest has been identified as a
potentially responsible party under the United States Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), or any other Environmental Law, nor has any Company received
notice that any Hazardous Materials that it or any of its predecessors in
interest has used, generated, stored, treated, handled, transported or
disposed of, or arranged for disposal or treatment of, have been found at any
site at which any Person is conducting or plans to conduct any action
pursuant to any Environmental Law, and no Company, or to the knowledge of the
Obligors, any of their respective predecessors in interest, has disposed of,
arranged for the disposal or treatment of, or otherwise released Hazardous
Materials at any site at which any Person is conducting or plans to conduct
any action under Environmental Law; (iii) no properties now or formerly
owned, leased or operated by any Company or any of their respective
predecessors in interest, are (x) listed or proposed for listing on the
National Priorities List under CERCLA or (y) listed on the Comprehensive
Environmental Response, Compensation and Liability Information System List
promulgated pursuant to CERCLA or (z) included on any similar lists
maintained by any Governmental Authority; (iv) there are no past or present
events, conditions, activities, practices or actions, or any agreements,
judgments, decrees or orders by which any Company is bound, which would
reasonably be expected to prevent any Company's compliance with any
Environmental Law, or which would reasonably be expected to give rise to any
liability of any Company under any Environmental Law, including, without
limitation, liability under CERCLA or similar state or foreign laws; (v) no
Lien has been asserted or recorded, or to the knowledge of the Obligors,
threatened, under any Environmental Law with respect to any asset, facility,
inventory or property currently owned, leased or operated by any Company;
(vi) there are no underground storage tanks or related piping at any property
owned, operated or leased by any Company and no such tanks or related piping
have been removed from such properties; and (vii) no Company is subject to
any Proceeding alleging the violation of, or liability under, any
Environmental Law and, to the knowledge of the Obligors, no such Proceeding
is threatened.
8.12. ENVIRONMENTAL INVESTIGATIONS. All material environmental
investigations, studies, audits, assessments and data which are in the
possession, custody or control of any Company relating (i) to the current or
prior business, operations, facilities or Property of any Company or any of
their respective predecessors in interest or (ii) to any facility, Property
or other asset now or previously owned, operated, leased or used by any
Company or any of their respective predecessors in interest have been made
available to the Lead Arranger and the Lenders.
8.13. USE OF PROCEEDS. No Company is engaged principally, or as
one of its important activities, in the business of extending credit for the
purpose, whether immediate, incidental or ultimate, of buying or carrying
Margin Stock and no part of the proceeds of any extension of credit hereunder
will be used directly or indirectly and whether immediately, incidentally or
ultimately to purchase or carry any Margin Stock or to extend credit to
others for such purpose or to refund Indebtedness originally incurred for
such purpose. Borrower will use the proceeds of (i) all Term Loans to
finance the Transaction and related fees and expenses, and (ii) Revolving
Credit Loans to finance the Transactions (in an amount not to exceed $5.0
million unless consented to by the Lead Arranger in its sole discretion), and
for general corporate purposes; provided, however, that not more than $20.0
million in aggregate principal amount of Revolving Credit Loans shall be used
to finance Acquisitions.
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Following application of the proceeds of each extension of credit
hereunder, not more than 25 percent of the value of the assets (either of
Borrower only or of Borrower and its Consolidated Subsidiaries) will be
Margin Stock. If requested by any Lender or the Lead Arranger, Borrower will
furnish to the Administrative Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR Form U-1 referred
to in Regulation U.
8.14. SUBSIDIARIES. As of the Closing Date (after giving effect
to the Transactions), none of Borrower or Atrium Holdings has any
Subsidiaries or interests in partnerships, joint ventures or business trusts
other than the entities set forth on SCHEDULE 8.14. Borrower and Atrium
Holdings own, as of the Closing Date, the percentage of the issued and
outstanding Equity Interests or other evidences of the ownership of each of
their respective Subsidiaries, partnerships or joint ventures listed on
SCHEDULE 8.14 as set forth on such Schedule. Except as set forth on SCHEDULE
8.14, no such Subsidiary, partnership or joint venture has issued any
securities convertible into shares of its Equity Interests (or other evidence
of ownership) or any Equity Rights to acquire such shares or securities
convertible into such shares (or other evidence of ownership), and the
outstanding stock and securities (or other evidence of ownership) of such
Subsidiaries, partnerships or joint ventures are owned by Borrower, Atrium
Holdings or Parent free and clear of all Liens and Equity Rights of others of
any kind whatsoever, except for Liens pursuant to the Security Documents.
Atrium Holdings does not have any direct equity interest in any Person other
than Borrower. Parent does not have any direct equity interest in any Person
other than Atrium Holdings.
8.15. PROPERTIES. Each of the Companies (i) has good title to and
beneficial ownership of all Property owned by it, including all the Property
reflected in the most recent financial statements provided hereunder (except
Property sold or otherwise disposed of since the date thereof in the ordinary
course of business or as otherwise not prohibited by the Credit Documents),
or acquired after the date thereof, free and clear of all Liens, except
Permitted Liens or Liens otherwise permitted by Section 9.07 and (ii) is the
lessee of all leasehold estates and is in possession of the Properties
purported to be leased thereunder, and each such lease is valid without
default thereunder by the lessee or, to the knowledge of the Obligors, the
lessor. Title to all Property of any Company is held by such Company free
and clear of all Liens except for Permitted Liens and Prior Liens or as
otherwise permitted by Section 9.07.
8.16. SECURITY INTEREST; ABSENCE OF FINANCING STATEMENTS; ETC.
The Security Documents, once executed and delivered, will create, in favor of
the Administrative Agent for the benefit of the Issuing Lender, Lenders and
Agents, as security for the obligations purported to be secured thereby, a
valid and enforceable, and upon filing or recording with the appropriate
Governmental Authorities and delivery of the applicable documents to the
Administrative Agent, perfected first priority security interest in and Lien
upon all of the Collateral (and the proceeds thereof), superior to and prior
to the rights of all third persons other than the holders of Prior Liens and
subject to no other Liens other than Permitted Liens or Liens otherwise
permitted by Section 9.07.
Except with respect to Prior Liens, Permitted Liens or as otherwise
permitted by Section 9.07 and the Liens created by the Security Documents,
there is no financing statement, security agreement, chattel mortgage, real
estate mortgage or other document filed or recorded with any filing
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records, registry, or other public office, that purports to cover, affect or
give notice of any Lien on, or security interest in, any Property of any
Company or rights thereunder.
8.17. LICENSES AND PERMITS; COMPLIANCE WITH LAWS. The Companies
hold all governmental permits, licenses, authorizations, consents and
approvals necessary for the Companies to own, lease, and operate their
respective Properties and to operate their respective businesses as now being
conducted (collectively, the "PERMITS"), except for Permits the failure of
which to obtain is not reasonably likely to have a Material Adverse Effect.
None of the Permits has been modified in any way that is reasonably likely to
have a Material Adverse Effect. All Permits are in full force and effect
except where the failure to be in full force and effect is not reasonably
likely to have a Material Adverse Effect.
Each Company is in material compliance with all applicable
statutes, laws, ordinances, rules, orders and regulations of any Governmental
Authority in all jurisdictions in which it is presently doing business, and
each Company will comply with all such laws and regulations which may be
imposed in the future in jurisdictions in which it may then be doing
business, in each case other than those the non-compliance with which would
not (individually or in the aggregate) reasonably be expected to have a
Material Adverse Effect. There does not exist any judgment, order or
injunction prohibiting or imposing material adverse conditions upon any of
the Transactions, or the performance by any Obligor of its obligations under
the Credit Documents, the Transaction Documents and all applicable laws.
8.18. TRUE AND COMPLETE DISCLOSURE. The information, reports,
financial statements, exhibits and schedules furnished in writing by or on
behalf of any Obligor to any Creditor in connection with the negotiation,
preparation or delivery of this Agreement and the other Credit Documents or
included herein or therein or delivered pursuant hereto or thereto or
pursuant to any information memorandum distributed in connection with the
syndication of the Commitments and Loans, including all filings made with the
Commission by Borrower or any Company but in each case excluding all
projections, whether prior to or after the date of this Agreement, when taken
as a whole, do not, as of the date such information was furnished, contain
any untrue statement of material fact or omit to state a material fact
necessary in order to make the statements herein or therein, in light of the
circumstances under which they were made, not materially misleading. The
projections and pro forma financial information furnished at any time by any
Obligor to any Creditor pursuant to this Agreement have been prepared in good
faith based on assumptions believed by Borrower to be reasonable at the time
made, it being recognized by the Lenders that such financial information as
it relates to future events is not to be viewed as fact and that actual
results during the period or periods covered by such financial information
may differ from the projected results set forth therein by a material amount
and no Obligor, however, makes any representation as to the ability of any
Company to achieve the results set forth in any such projections. Each
Obligor understands that all such statements, representations and warranties
shall be deemed to have been relied upon by the Lenders as a material
inducement to make each extension of credit hereunder.
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8.19. SOLVENCY; ETC. As of the Closing Date and each other date
of an extension of credit hereunder immediately prior to and immediately
following such extension of credit, each Obligor is and will be Solvent
(after giving effect to Section 6.08).
8.20. CONTRACTS. No Company is in default under any material
contract or agreement to which it is a party or by which it is bound, nor, to
Borrower's knowledge, does any condition exist that, with notice or lapse of
time or both, would constitute such default, excluding in any case such
defaults that are not reasonably likely to have a Material Adverse Effect.
SCHEDULE 8.20 accurately and completely lists (x) all agreements, if any,
among the stockholders (or any of their Affiliates other than any Company) of
Parent on the one hand and any Company on the other in effect on the date
hereof and all (y) material agreements which are in effect on the date hereof
in connection with the conduct of the business of the Companies.
8.21. LABOR MATTERS. Set forth on SCHEDULE 8.21 is a list and
description (including dates of termination) of all collective bargaining or
similar agreements between or applicable to any Company as of the date hereof
and any union, labor organization or other bargaining agent in respect of the
employees of any Company on the date indicated on SCHEDULE 8.21. Except as
set forth in SCHEDULE 8.21, there are no strikes or other labor disputes
against any Company pending or, to the knowledge of any Obligor, threatened.
8.22. YEAR 2000. Each Company has reviewed their operations with
a view to assessing whether their business or operations will, in the
receipt, transmissions, processing, manipulation, storage, retrieval,
retransmission or other utilization of data, be vulnerable to any significant
risk that computer hardware, software or any equipment containing embedded
microchips used in their business or operations will not in the case of dates
or time periods occurring after December 31, 1999 function at least as
effectively as in the case of dates or time periods occurring prior to
January 1, 2000. No Company has reason to believe that the risks associated
with the Year 2000 issue are reasonably likely to have a Material Adverse
Effect.
8.23. CHANGE OF CONTROL OFFER DOCUMENTS. The Change of Control
Offer Documents will not, as of their respective dates, taken as a whole,
contain an untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading.
Section 9. COVENANTS. Each Obligor, for itself and on behalf of
its Subsidiaries, covenants and agrees with the Creditors that, so long as
any Commitment, Loan or Letter of Credit Liability is outstanding and until
payment in full of all amounts payable by Borrower hereunder:
9.01. FINANCIAL STATEMENTS, ETC. The Companies shall deliver to
the Administrative Agent (and the Administrative Agent shall deliver to each
Lender within three Business Days after the receipt thereof):
(a) QUARTERLY FINANCIALS. As soon as available and in any event
within 45 days after the end of each of the first three quarterly fiscal
periods of each fiscal year beginning with the fiscal quarter ending
September 30, 1998, consolidated statements of operations, cash flows
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and stockholders' equity of Borrower and its Consolidated Subsidiaries for
such period and for the period from the beginning of the respective fiscal
year to the end of such period, and the related consolidated balance sheet
of Borrower and its Consolidated Subsidiaries as at the end of such
period, setting forth in each case in comparative form (i) the
corresponding consolidated statements of operations, cash flows and
stockholders' equity for the corresponding periods in the preceding fiscal
year (provided that for purposes of any fiscal quarter ending on or prior
to the first anniversary after the Closing Date, this clause (i) shall
only require pro forma consolidated statements of operations for the
corresponding periods in the preceding fiscal year that give effect to the
Transactions as if they occurred on the first day of the preceding fiscal
year) and (ii) the corresponding budget or plan for such period,
accompanied by a certificate of a Responsible Officer of Borrower, which
certificate shall state that said consolidated financial statements fairly
present the consolidated financial condition, results of operations and
cash flows of Borrower and its Consolidated Subsidiaries in accordance
with GAAP, consistently applied, as at the end of, and for, such period
(subject to normal year-end audit adjustments); in addition, Borrower
shall provide consolidated financial statements for Foreign Subsidiaries
(if any) for the same periods in fiscal years 1998 and thereafter
substantially consistent with the foregoing;
(b) ANNUAL FINANCIALS. As soon as available and in any event within
90 days after the end of each fiscal year beginning with the fiscal year
ending December 31, 1998, consolidated and consolidating statements of
operations, cash flows and stockholders' equity of Borrower and its
Consolidated Subsidiaries for such year and the related consolidated and
consolidating balance sheet of Borrower and its Consolidated Subsidiaries
as at the end of such year, setting forth in each case in comparative form
(i) the corresponding consolidated and consolidating information as of the
end of and for the preceding fiscal year (provided that for purposes of
any fiscal year ending on or prior to the first anniversary after the
Closing Date, this clause (i) shall only require a pro forma consolidated
statement of operations for the preceding fiscal year that gives effect to
the Transactions as if they occurred on the first day of such preceding
fiscal year and consolidating information as of the end of and for the
preceding fiscal year) and (ii) the corresponding budget or plan for such
period, and accompanied by an opinion, without material qualification,
thereon of independent certified public accountants of recognized national
standing, which opinion shall state that said consolidated and
consolidating financial statements fairly present the consolidated and
consolidating financial condition, results of operations and cash flows of
Borrower and its Consolidated Subsidiaries as at the end of, and for, such
fiscal year in accordance with GAAP, consistently applied; Borrower shall
supply such additional information and detail as to any item or items
contained on any such statement that Lenders (to the extent applicable)
may reasonably require; all such information will be prepared in
accordance with GAAP consistently applied; in addition, Borrower shall
provide consolidated financial statements for Foreign Subsidiaries (if
any) for the same periods in fiscal years 1998 and thereafter
substantially consistent with the foregoing;
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(c) COMPLIANCE CERTIFICATE.
(i) concurrently with the delivery of the financial statements
referred to in Section 9.01(b), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no
knowledge was obtained of any Event of Default relating to the
Financial Maintenance Covenants, except as specified in such
certificate; and
(ii) at the time it furnishes each set of financial statements
pursuant to paragraph (a) or (b) above, a certificate of a senior
financial officer of Borrower (I) to the effect that no Default has
occurred and is continuing (or, if any Default has occurred and is
continuing, describing the same in reasonable detail and describing
the action that Borrower has taken and proposes to take with respect
thereto) and (II) setting forth in reasonable detail the computations
necessary (to the extent applicable) to determine whether each
Company is in compliance with Sections 9.07, 9.08, 9.09, 9.10 and
9.11 as of the end of the respective quarterly fiscal period or
fiscal year;
(d) OTHER FINANCIAL INFORMATION. Promptly upon delivery thereof to
the stockholders of any Company generally, copies of all financial
statements and reports and proxy statements so delivered, and within five
days after the same are filed, copies of all financial statements and
reports which any Company may make to or file with the Commission or any
successor or analogous Governmental Authority;
(e) INTEREST RATE CERTIFICATES. Together with the financial
statements delivered pursuant to clause (a) or (b) of this Section 9.01,
an Interest Rate Certificate;
(f) NOTICE OF DEFAULT. Promptly after any Company knows or has
reason to believe that any Default has occurred or that Atrium Holdings is
in default of any material term or provision of the Investor Debt
Securities Documents or any other agreement or instrument relating to or
evidencing material Indebtedness of any Company (including, without
limitation, the Existing Notes Indenture), a notice of such Default
describing the same in reasonable detail and, together with such notice or
as soon thereafter as possible, a description of the action that the
Companies have taken and propose to take with respect thereto;
(g) ENVIRONMENTAL MATTERS. Written notice of any Environmental
Claim materially affecting any Company, any Mortgaged Real Property or the
operations of any Company, and any notice from any Person of (i) the
occurrence of any release, spill or discharge of any Hazardous Material
that is reportable under any Environmental Law, (ii) the commencement of
any clean-up pursuant to or in accordance with any Environmental Law of
any Hazardous Material at, on, under or within the Mortgaged Real Property
or any part thereof, (iii) any matters relating to Hazardous Materials or
Environmental Laws that may impair, or threaten to impair, Lenders'
security interest in the Mortgaged Real Property or any Obligor's ability
to perform any of its obligations under this Agreement when such
performance is due or (iv) any
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other condition, circumstance, occurrence or event which could reasonably
be expected to result in a material liability of any Company under any
Environmental Law;
(h) AUDITORS' REPORTS. Promptly upon receipt thereof, copies of all
reports submitted to any Company by independent certified public
accountants in connection with each annual, interim or special audit of
such Company's books made by such accountants, including, without
limitation, any management letter commenting on any Company's internal
controls submitted by such accountants to management at any time;
(i) ANNUAL BUDGETS. As soon as practicable and in any event within
60 days after the beginning of each fiscal year of Borrower beginning with
fiscal year 1999, a consolidated plan and financial forecast for such
fiscal year, including without limitation (a) a forecasted consolidated
balance sheet and forecasted consolidated statements of income and cash
flows of Borrower and its Consolidated Subsidiaries for such fiscal year,
together with an Officers' Certificate demonstrating pro forma compliance
for such fiscal year with Section 9.11 and an explanation of the
assumptions on which such forecasts are based and (b) forecasted
consolidated statements of income and cash flows of Borrower and its
Consolidated Subsidiaries for each month of each such fiscal year,
together with an explanation of the assumptions on which such forecasts
are based;
(j) LIEN MATTERS. Written notice of (1) the incurrence of any Lien
(other than Permitted Liens, Prior Liens and other Liens expressly
permitted by the terms of the applicable Security Document) on, or claim
asserted against any of the Collateral or (2) the occurrence of any other
event which is reasonably likely to adversely affect the aggregate value
of the Collateral;
(k) NOTICE OF MATERIAL ADVERSE EFFECT OR MATERIAL ADVERSE CHANGE.
Written notice of the occurrence of any event or condition which has had
or has resulted in or is reasonably likely to have or result in any
Material Adverse Effect or any Material Adverse Change;
(l) GOVERNMENTAL FILINGS AND NOTICES. Promptly after request by the
Administrative Agent, copies of any other reports or documents that were
filed by any Company with any Governmental Agency;
(m) ERISA INFORMATION. Promptly upon the occurrence of any ERISA
Event that, alone or together with any other ERISA Events that have
occurred, is reasonably likely to result in liability to the Companies in
an aggregate amount exceeding $250,000, a written notice specifying the
nature thereof, what action the Borrower, its Subsidiaries or other ERISA
Entity have taken, are taking or propose to take with respect thereto,
and, when known, any action taken or threatened by the Internal Revenue
Service, Department of Labor, PBGC or Multiemployer Plan sponsor with
respect thereto;
(n) ERISA FILINGS, ETC. Upon request by the Administrative Agent,
copies of: (i) each Schedule B (Actuarial Information) to the annual
report (Form 5500 Series) filed by the Borrower, its Subsidiaries or ERISA
Affiliates with the Internal Revenue Service with re-
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spect to each Plan; (ii) the most recent actuarial valuation report for
each Plan; (iii) all notices received by the Borrower or any of its
Subsidiaries or ERISA Affiliates from a Multiemployer Plan sponsor or
any governmental agency concerning an ERISA Event; and (iv) such other
documents or governmental reports or filings relating to any Employee
Benefit Plan as the Administrative Agent shall reasonably request;
(o) CHANGE OF CONTROL OFFER. On the date of commencement of the
Change of Control Offer, copies of the Change of Control Offer Documents;
as soon as available, any amendment or supplement to the Change of Control
Offer Documents after the date of commencement thereof; and on the date of
consummation of the Change of Control Offer (i) an Officers' Certificate
stating the principal amount of Existing Notes Borrower is required to
purchase in the Change of Control Offer and the principal amount of
Existing Notes that will remain outstanding after consummation of the
Change of Control Offer and (ii) the opinion of Paul, Hastings, Janofsky &
Walker, LLP, counsel to the Obligors, addressed to the Administrative
Agent and the Lenders, to the effect that Borrower has satisfied all of
its obligations under the Existing Notes Indenture to purchase the
Existing Notes from the holders thereof arising as a result of the
consummation of the Transactions (other than the Change of Control Offer);
(p) NAME AND LOCATION CHANGES. Promptly, written notice of any
change (i) in such Company's corporate name or in any trade name used to
identify it in the conduct of its business or in the ownership of its
properties, (ii) in the location of such Obligor's chief executive office,
its principal place of business, any office in which it maintains books or
records relating to Collateral owned by it or any office or facility at
which Collateral owned by it is located (including the establishment of
any such new office or facility), (iii) in such Company's identity or
corporate structure, (iv) resulting in any tangible Collateral being
located in any jurisdiction in which a financing statement must be, but
has not been, filed in order to perfect the Administrative Agent's Liens,
or (v) in such Company's Federal Taxpayer Identification Number (to the
extent applicable); each Company will not effect or permit any change
referred to in the preceding sentence unless all filings have been made
under the Uniform Commercial Code or otherwise that are required in order
for the Administrative Agent to continue at all times following such
change to have a valid, legal and perfected security interest in all the
Collateral; and
(q) MISCELLANEOUS. Promptly, such financial and other information
with respect to any Company as any Creditor may from time to time
reasonably request.
9.02. LITIGATION, ETC. Borrower shall promptly give to the
Administrative Agent and each Lender notice of all Proceedings, and any
material development thereof, affecting any Company, except Proceedings which
could not reasonably be expected to have (individually or in the aggregate) a
Material Adverse Effect.
9.03. EXISTENCE; COMPLIANCE WITH LAW; PAYMENT OF TAXES; INSPECTION
RIGHTS; PERFORMANCE OF OBLIGATIONS; ETC. Each Company shall (i) preserve and
maintain its legal existence and
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all of its material rights, privileges and franchises (PROVIDED, HOWEVER,
that nothing in this Section 9.03 shall prohibit any transaction expressly
permitted under Section 9.06), (ii) except as is not reasonably likely to
have (individually or in the aggregate) a Material Adverse Effect, comply
with the requirements of all applicable laws, rules, regulations and orders
of Governmental Authorities, (iii) except as is not reasonably likely to have
(individually or in the aggregate) a Material Adverse Effect, timely file
true, accurate and complete tax returns required by all Governmental
Authorities and pay and discharge all Taxes, assessments and governmental
charges or levies imposed on it or on its income or profits or on any of its
Property prior to the date on which any penalties attach thereto (except for
any such Tax, assessment, charge or levy the payment of which is being
contested in good faith and by proper proceedings and against which adequate
reserves are being maintained in accordance with GAAP); (iv) maintain all of
its Properties used or useful in its business in good working order and
condition, ordinary wear and tear excepted, except to the extent that the
failure to do so with respect to any such Property is not reasonably likely
to have (individually or in the aggregate) a Material Adverse Effect; (v)
permit representatives of any Creditor during normal business hours and upon
reasonable notice to examine, copy and make extracts from its books and
records, to inspect its Properties, and to discuss its business and affairs
with its officers and employees, all to the extent reasonably requested by
such Creditor; (vi) allow the Lead Arranger to consult with Borrower's
independent public accountants and auditors with respect to the financial
affairs of the Companies and authorize such accountants to disclose to the
Lead Arranger and the Lenders any and all financial statements and other
supporting financial documents and schedules including copies of any
management letter with respect to the business, financial condition and other
affairs of the Companies; at the request of the Lead Arranger, Borrower shall
deliver a letter addressed to such accountants instructing them to comply
with the provisions of this Section 9.03(vi); (vii) perform in all material
respects all of its Contractual Obligations, except where such failure to so
perform, singly or in the aggregate with all other such failures, is not
reasonably likely to have a Material Adverse Effect; and (viii) keep proper
books of record and accounts, in which full and correct entries shall be made
of all financial transactions and the Property and business of each Company
in accordance with GAAP in effect from time to time or as otherwise required
by applicable rules and regulations of any Governmental Authority having
jurisdiction over such Company.
9.04. INSURANCE. (A) Each Company shall maintain, with
financially sound and reputable insurers, insurance of the kinds and in the
amounts customarily insured against by companies engaged in the same or
similar business and similarly situated (including business interruption
insurance). Each Company shall pay all insurance premiums payable by it as
and when due. Borrower will advise the Administrative Agent promptly of any
material policy cancellation, reduction or amendment. No Obligor will and
will not permit any Subsidiary to materially modify any of the provisions of
any policy with respect to casualty insurance without delivering the original
copy of the endorsement reflecting such modification to the Administrative
Agent.
(B) All policies of insurance required to be maintained by any
Obligor must name the Administrative Agent on behalf of the Issuing Lender,
Lenders and Agents as loss payee (in the case of property insurance) or
additional insured (in the case of liability insurance), as applicable, or
certificate holder (in the case of workers' compensation insurance) and must
provide that no cancellation, non-renewal or modification (including reduced
coverage) of the policies will be made without thirty
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days' prior written notice to the Administrative Agent and if the insurance
carrier shall have received written notice from the Administrative Agent of
the occurrence and continuance of an Event of Default, the insurance carrier
shall pay all proceeds otherwise payable to any Obligor under such policies
directly to the Administrative Agent.
(C) The Obligors shall give immediate written notice of any loss
in excess of $5.0 million to the insurance carrier and to Administrative
Agent. Each Obligor hereby irrevocably authorizes and empowers the
Administrative Agent, as its attorney-in-fact coupled with an interest, if
any Default shall have occurred or such loss is reasonably likely to be
materially adverse to the Lenders, to make proof of loss, to adjust and
compromise any claim under insurance policies, to appear in and prosecute any
action rising from such insurance policies, to collect and receive insurance
proceeds, and to deduct therefrom the Administrative Agent's expenses
incurred in the collection of such proceeds. Nothing contained in this
Section 9.04(C), however, shall require the Administrative Agent to incur any
expense or take any action hereunder.
(D) Each policy of insurance obtained or maintained by any Company
shall: (i) be written by financially responsible companies selected by
Borrower and having an A.M. Best rating of "A" or better and being in a
financial size category of XII or larger, or by other companies reasonably
acceptable to the Administrative Agent and the Lead Arranger; (ii) waive all
rights of subrogation of the insurers against the Creditors; (iii) waive any
right of the insurers to set-off or counterclaim or to make any other
deduction, whether by way of attachment or otherwise, as against any
Creditor; (iv) waive all claims for insurance premiums or commissions or
additional premiums or assessments against the Creditors; and (v) provide
that, except in the case of third-party liability insurance, the proceeds of
any loss affecting any Property which is Collateral (including Real Property)
or interests therein shall be applied in accordance with the terms of this
Agreement.
(E) If at any time the area in which any Mortgaged Real Property
is located is designated (i) a "flood hazard area" in any Flood Insurance
Rate Map published by the Federal Emergency Management Agency (or any
successor agency), Borrower shall obtain flood insurance in such total amount
as the Administrative Agent or the Majority Lenders may from time to time
reasonably require, and otherwise comply with the National Flood Insurance
Program as set forth in the Flood Disaster Protection Act of 1973, as amended
from time to time, or (ii) a "Zone 1" area, Borrower shall obtain earthquake
insurance in such total amount as the Administrative Agent or the Majority
Lenders may reasonably require; PROVIDED, HOWEVER, that Borrower shall not,
unless required by applicable law pertaining to Borrower or any Creditor, be
required to obtain any insurance described in this Section 9.04(E) if not
available at commercially reasonable rates.
(F) In the event that Borrower deems it necessary in its
reasonable business judgment to obtain insurance with respect to
environmental liabilities of Wing and Darby substantially similar to that
being obtained with respect to Borrower in connection with the Merger,
Borrower shall obtain such insurance with respect to Wing and Darby from a
financially capable company to the extent economically feasable in the
reasonable judgment of Borrower.
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9.05. LIMITATION ON LINES OF BUSINESS No Company shall directly
or indirectly engage to any material extent in any line or lines of business
activity other than the business of the type conducted by Borrower and the
Subsidiaries as of the Closing Date (after giving effect to the Merger and
the Contributions) or any business related, ancillary or complementary
thereto.
9.06. LIMITATION ON FUNDAMENTAL CHANGES, ACQUISITIONS OR
DISPOSITIONS. No Company shall, directly or indirectly, in a single
transaction or series of transactions, (1) merge, consolidate or amalgamate
with or into any Person (other than pursuant to the Transactions on the
Closing Date), or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), (2) effect any Acquisition, or (3) effect any
Disposition (or agree to do any of the foregoing). Notwithstanding the
foregoing provisions of this Section 9.06, each of the following shall be
permitted:
(a) purchases and sales of Property to be sold or used in the
ordinary course of business;
(b) the pledge of the Collateral pursuant to the Security Documents
and the incurrence of any Permitted Lien;
(c) the merger, consolidation, dissolution or liquidation of (1) any
Subsidiary with or into (i) Borrower if Borrower shall be the continuing
or surviving corporation or (ii) any Qualified Subsidiary or if such
Qualified Subsidiary shall be the continuing or surviving corporation, and
(2) any Subsidiary that is not a Qualified Subsidiary with or into any
other Subsidiary that is not a Qualified Subsidiary;
(d) Dispositions by (1) any Company to Borrower or to any Qualified
Subsidiary or (2) any Subsidiary that is not a Qualified Subsidiary to any
other Subsidiary that is not a Qualified Subsidiary;
(e) Dispositions of used, worn out, obsolete or surplus Property by
any Company in the ordinary course of business;
(f) sale or discount, in each case without recourse, of accounts
receivable past due arising in the ordinary course of business, but only
in connection with the compromise or collection thereof; PROVIDED,
HOWEVER, that in no event may any Company enter into any factoring or
securitization program with respect to receivables;
(g) any Disposition by Borrower or any Subsidiary for fair market
value not to exceed $10.0 million in the aggregate in any fiscal year of
Borrower and $35.0 million in the aggregate since the Closing Date;
PROVIDED, HOWEVER, that the Net Available Proceeds therefrom are applied
as specified in Section 2.10(a)(iv) or applied to the prepayment of the
Loans as specified in Section 2.10 (a)(iv);
(h) Dispositions described on SCHEDULE 9.06 for fair market value
not to exceed $4.0 million; PROVIDED, HOWEVER, that the Net Available
Proceeds therefrom are applied as specified
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in Section 2.10(a)(iv) or applied to the prepayment of the Loans as
specified in Section 2.10 (a)(iv);
(i) Acquisitions by Borrower or any Qualified Subsidiary; PROVIDED,
HOWEVER, that each Acquisition under this Section 9.06(i) shall satisfy
each of the following conditions:
(i) the Loans to be made on the Closing Date shall have been
made, and the Transactions shall have been consummated;
(ii) no Default then exists or would result therefrom;
(iii) immediately after giving effect to such Acquisition,
Borrower would be in compliance with Section 9.05;
(iv) after giving pro forma effect in accordance with GAAP to
such Acquisition, (1) Borrower shall be in compliance with all of the
Financial Maintenance Covenants as of the Test Date immediately prior
to the consummation thereof (assuming, for purposes of the Financial
Maintenance Covenants, that such Acquisition, and all other
Acquisitions consummated since the first day of the relevant
Measurement Period for each of the Financial Maintenance Covenant
ending on or prior to the date of such Acquisition, had occurred on
the first day of such relevant Measurement Period), and the Lenders
shall have been provided reasonably detailed calculations of such
compliance and reasonable supporting data and information with
respect thereto), and (2) as reasonably determined in good faith by
Borrower at such time based on available information then known by
Borrower, Borrower and the Subsidiaries can reasonably be expected to
remain in compliance with such covenants through the Final Maturity
Date and to have sufficient cash liquidity to conduct their
respective business and pay their respective debts and other
liabilities as they come due;
(v) no Company shall, in connection with any such Acquisition,
assume or remain liable with respect to any Indebtedness or other
liability (including any material tax or ERISA liability) of the
related seller, except (1) to the extent permitted under Section 9.08
or, if after giving pro forma effect thereto, the representations and
warranties of each Obligor and Parent in Section 8 would be true in
all material respects, and (2) obligations of the seller or acquired
Person or business incurred in the ordinary course of business and
necessary or desirable to the continued operation of the underlying
properties, and any other such liabilities or obligations not
permitted to be assumed or otherwise supported by any of the
Companies hereunder shall be paid in full or released as to the
assets being so acquired on or before the consummation of such
Acquisition;
(vi) the Properties acquired in connection with any such
Acquisition shall be free and clear of any Liens, other than
Permitted Liens or Liens otherwise permitted by Section 9.07;
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(vii) the board of directors of the acquired Person shall not
have indicated privately to any Company or publicly its opposition to
the consummation of such Acquisition;
(viii) either (x) such Acquisition shall be effected through
Borrower or a Qualified Subsidiary and the Person or business
acquired shall at the time of consummation of such Acquisition be
merged or combined or consolidated with or into a domestic Qualified
Subsidiary or shall be at the time of consummation thereof a domestic
Qualified Subsidiary or (y) the Acquisition Consideration for such
Acquisition, together with the aggregate amount of the Acquisition
Consideration for all other Acquisitions (other than Acquisitions
made pursuant to Section 9.06(m)) effected pursuant to this Section
9.06(i) that do not comply with clause (x) of this subparagraph
(viii) since the Closing Date, shall not exceed $5.0 million;
(ix) with respect to any Acquisition involving Acquisition
Consideration of more than $10.0 million, Borrower shall have
provided not fewer than 30 days prior to the proposed closing thereof
the Lead Arranger and the Lenders with (1) written notice thereof and
a brief description of the material terms thereof and a brief
description of the business or Person to be acquired, (2) historical
financial statements for the last three fiscal years (or, if less,
for the period of such Person's existence) of the Person or business
to be acquired (audited if available without undue cost or delay) and
unaudited financial statements thereof for the most recent interim
period which are available, (3) reasonably detailed projections for
the succeeding five years (or, if earlier, through the year in which
the Final Maturity Date occurs) pertaining to the Person or business
to be acquired, (4) copies of all material documentation pertaining
to such Acquisition, and (5) all such other information and data
relating to such Acquisition or the Person or business to be acquired
as may be reasonably requested by Lead Arrangers or the Majority
Lenders;
(x) Borrower shall have delivered to the Lead Arranger and the
Lenders (x) an Officers' Certificate at least 10 days prior to the
date of consummation of such Acquisition (but in any event not
earlier than a date which would result in the Test Date occurring on
or immediately prior to the consummation of such Acquisition being
more than 135 days prior to the date of consummation of such
Acquisition) certifying that (1) such Acquisition complies with this
Section 9.06(i) (which shall have attached thereto reasonably
detailed backup data and calculations showing such compliance), and
(2) such Acquisition is not reasonably likely to have a Material
Adverse Effect and (y) financial statements referred to in clause
(ix) of this Section 9.06(i) for the most recently ended fiscal
period if the latest financial statements previously delivered
pursuant to clause (ix) cover a period ending more than 135 days
before the date of consummation of such Acquisition; and
(xi) the Acquisition Consideration for such Acquisition,
together with the aggregate amount of the Acquisition Consideration
for all Acquisitions (other than
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Acquisitions made pursuant to Sections 9.06(m) below) effected
pursuant to this Section 9.06(i) since the Closing Date, shall not
exceed $20.0 million (PROVIDED, HOWEVER that any portion of such
Acquisition Consideration that consists of an "earn-out" or similar
payment shall not exceed $5.0 million in the aggregate since the
Closing Date), PLUS the then available amount of the Designated
Equity Issuance Proceeds but not to exceed $20.0 million.
(j) transfers resulting from any casualty or condemnation of
Property;
(k) licenses or sublicenses by any Company of software, trademarks
and other intellectual property and general intangible and leases,
licenses or subleases of other property in the ordinary course of business
and which do not materially interfere with the business of any Company;
(l) any consignment arrangements or similar arrangements for the
sale of assets in the ordinary course of business of any Company;
(m) Acquisitions not otherwise permitted hereunder by Borrower or
any Subsidiary; PROVIDED, HOWEVER, that (1) the sole consideration
provided therefor by any Company is Equity Interests of Parent or
Qualified Capital Stock of Atrium Holdings, and (2) such Acquisition shall
comply with each of clauses (i), (ii), (iii), (iv), (v), (vi), (vii),
(viii)(x), (ix) and (x) of Section 9.06(i) (with references therein to
Section 9.06(i) being deemed references to this Section 9.06(m)); and
(n) the making of Investments permitted by Section 9.09 and the
liquidation in the ordinary course of business of (A) Permitted
Investments and (B) Investments made pursuant to Sections 9.09(a) and
9.09(b).
To the extent the Majority Lenders waive the provisions of this Section 9.06
with respect to the sale or other disposition of any Collateral, or any
Collateral is sold or otherwise disposed of as permitted by this Section 9.06
(other than to any Obligor), such Collateral in each case shall be sold or
otherwise disposed of free and clear of the Liens created by the Security
Documents and the Administrative Agent shall take such actions as are
appropriate in connection therewith.
9.07. LIMITATION ON LIENS AND RELATED MATTERS. No Company shall,
directly or indirectly, create, incur, assume or suffer to exist any Lien
upon or with respect to any Collateral except for Prior Liens and other Liens
created by or expressly permitted by the applicable Security Document. No
Company shall, directly or indirectly, create, incur, assume or suffer to
exist any Lien upon or with respect to any of their respective Property that
does not constitute Collateral, whether now owned or hereafter acquired, or
assign any right to receive income, or file or permit the filing of any
financing statement under the UCC or any other similar notice of Lien under
any similar recording or notice statute, except the following, which are
herein collectively referred to as "PERMITTED LIENS":
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(a) Liens in existence on the Closing Date and identified in
SCHEDULE 9.07 (excluding, however, following the making of the initial
Loans hereunder, Liens securing any Refinanced Debt);
(b) Liens imposed by any Governmental Authority for taxes,
assessments or charges not yet due or which are being contested in good
faith and by appropriate proceedings if adequate reserves with respect
thereto are maintained on the books of the relevant Company, in accordance
with GAAP;
(c) Liens imposed by law which were incurred in the ordinary course
of business, such as carriers', warehousemen's, landlords' and mechanics'
Liens and other similar Liens arising in the ordinary course of business,
in each case for sums the payment of which is not required by Section
9.03;
(d) pledges or deposits under workers' compensation, unemployment
insurance and other social security legislation or the deposits securing
the liability to insurance carriers;
(e) pledges or deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(f) easements, rights-of-way, restrictions or minor defects or
irregularities in title incurred in the ordinary course of business and
encumbrances consisting of zoning restrictions, easements, licenses,
restrictions on the use of Real Property or minor imperfections in title
thereto which, in the aggregate, are not material in amount, and which do
not in any case materially detract from the value of the Real Property
subject thereto or interfere with the ordinary conduct of the business of
any Company;
(g) Liens upon tangible personal Property acquired after the Closing
Date by Borrower or any Subsidiary, each of which Liens either (A) existed
on such Property before the time of its acquisition and was not created in
anticipation thereof, or (B) was created solely for the purpose of
securing Indebtedness representing, or incurred to finance or refinance,
the cost of such Property or improvements thereon; PROVIDED, HOWEVER, that
(1) no such Lien shall extend to or cover any Property of any Company
other than the Property so acquired and improvements thereon and proceeds
thereof, and (2) the principal amount of Indebtedness secured by any such
Lien shall at no time exceed 100% of the fair market value of such
Property at the time it was acquired;
(h) Liens existing on any Property of any Person at the time such
Property is acquired or such Person becomes a Subsidiary or is merged or
consolidated with or into a Subsidiary and, in each case, not created in
contemplation of or in connection with such event; PROVIDED, HOWEVER, that
such Liens do not extend to any other Property of any Company;
(i) Liens not otherwise permitted hereunder securing obligations of
Borrower or any Subsidiary at any time not exceeding in the aggregate $5.0
million;
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(j) Liens securing obligations under Swap Contracts with any
Creditor to the extent such Swap Contract relates to the Loans and only so
long as the Obligations are secured by the same collateral on at least a
pari passu basis;
(k) Liens consisting of judgment or judicial attachment Liens
(including prejudgment attachment) in existence less than 60 days after
the entry thereof or the enforcement of which is effectively stayed or
payment of which is covered in full (subject to a customary deductible) by
insurance or which do not otherwise result in an Event of Default under
Section 10(h);
(l) Liens securing obligations in respect of Capital Leases solely
on Property subject to such Capital Leases;
(m) leases or subleases granted to third Persons not interfering in
any material respect with the business of any Company;
(n) Liens arising from UCC financing statements regarding leases
permitted by this Agreement;
(o) any interest or title of a lessor or sublessor under any lease
permitted by this Agreement;
(p) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of custom duties in connection with the
importation of goods so long as such Liens attach only to the imported
goods;
(q) Liens arising out of consignment or similar arrangements for the
sale of goods entered into by any Company in the ordinary course of
business;
(r) Liens created under the Credit Documents securing the
obligations owing to the Creditors; and
(s) any extension, renewal or replacement of the foregoing;
PROVIDED, HOWEVER, that the Liens permitted by this Section 9.07(s) shall
not cover any additional principal amount of Indebtedness or Property
(other than like Property substituted for Property covered by such Lien).
Except with respect to (i) specific Property encumbered pursuant to
a Lien permitted to be incurred pursuant to this Section 9.07 or (ii)
specific Property to be sold pursuant to an executed agreement with respect
to a Disposition consummated in accordance with this Agreement, no Company
will directly or indirectly enter into any agreement on or after the Closing
Date prohibiting or restricting in any manner (directly or indirectly and
including by way of covenant, representation or warranty or event of default)
the creation or assumption of any Lien upon its Property, whether now owned
or hereafter acquired, except pursuant to the Credit Documents, the Existing
Notes Indenture and the Investor Debt Securities Documents and any Permitted
Refinancing of either thereof (so long
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as such Permitted Refinancing is not more restrictive in such regard than the
Existing Notes Indenture or the Investor Debt Securities Documents, as
applicable, as in effect on the Closing Date).
9.08. PROHIBITION ON DISQUALIFIED CAPITAL STOCK; LIMITATION ON
INDEBTEDNESS AND CONTINGENT OBLIGATIONS. No Company shall directly or
indirectly issue or permit to be outstanding any Disqualified Capital Stock,
other than Disqualified Capital Stock issued to and held by Borrower or any
Qualified Subsidiary. No Company shall, directly or indirectly, incur any
Indebtedness or any Contingent Obligation, except (each of which shall be
given independent effect) for the following:
(a) the Loans and the other Obligations (including the Guarantees)
under the Credit Documents;
(b) (A) the Refinanced Debt, (B) the Existing Notes (less all
repayments (including, without limitation, in connection with the Change
of Control Offer) and prepayments thereof), (C) the Investor Debt
Securities issued on the Closing Date and any further Investor Debt
Securities issued to GEIPPP II and Ardatrium in connection with the
consummation of the Change of Control Offer and having identical terms to
the Investor Debt Securities not to exceed an amount sufficient to produce
gross proceeds equal to the Investor Utilized Amount (but only so long as
not a direct or indirect obligation of Borrower or any Subsidiary), (D)
other Indebtedness and Contingent Obligations (other than the Existing
Notes and the Refinanced Debt) outstanding on the Closing Date and listed
in SCHEDULE 9.08 and specified on SCHEDULE 9.08 as to remain outstanding
after the Closing Date (less the aggregate amount of any permanent
prepayments or repayments thereof), and (E) in the case of the Investor
Debt Securities, the Existing Notes and any such Indebtedness listed on
SCHEDULE 9.08, Permitted Refinancings thereof; PROVIDED, HOWEVER, that the
Refinanced Debt shall not be outstanding after the Closing Date;
(c) (x) Indebtedness and Contingent Obligations of Borrower or any
Subsidiary owing to Borrower or any Qualified Subsidiary, (y) Indebtedness
and Contingent Obligations of any Subsidiary that is not a Qualified
Subsidiary owed to any other Subsidiary that is not a Qualified Subsidiary
and (z) Indebtedness of Atrium Holdings owing to Borrower incurred on the
Closing Date in connection with the Transactions in form and substance
satisfactory to the Lead Arranger; PROVIDED, HOWEVER, that (1) such
Indebtedness shall be evidenced by an Intercompany Note which (other than
if issued by or held by a Foreign Subsidiary) shall be pledged to the
Administrative Agent on behalf of the Lenders pursuant to the Security
Agreement and (2) such Indebtedness and Contingent Obligations shall not
be held by any Person other than Borrower or a Qualified Subsidiary and
shall not be subordinate to any other Indebtedness or Contingent
Obligations or other obligation of the obligor unless also subordinated to
the Loans on terms no less favorable to the Lenders than that of any other
creditor;
(d) Contingent Obligations in respect of operating leases;
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(e) Indebtedness and Contingent Obligations arising from honoring a
check, draft or similar instrument against insufficient funds; PROVIDED,
HOWEVER, that such Indebtedness is extinguished within two Business Days
of its incurrence;
(f) Swap Contracts;
(g) Contingent Obligations of Borrower, Atrium Holdings or any
Subsidiary in respect of Indebtedness or other liabilities of Borrower or
any Subsidiary to the extent that the existence of such Indebtedness or
other liabilities is not prohibited under this Agreement;
(h) Contingent Obligations in connection with Dispositions permitted
under Section 9.06, arising in connection with indemnification and other
agreements in respect of any contract relating to such Disposition, not to
exceed the consideration received by Borrower or any Subsidiary in
connection with such sale and excluding, however, in all cases any
Contingent Obligation with respect to any obligation of any third person
incurred in connection with the acquisition of the Property which is the
subject of such Disposition;
(i) Indebtedness and Contingent Obligations of Borrower and the
Subsidiaries (including Permitted Refinancings thereof) secured by Liens
permitted under Section 9.07(g) or (l) (and extensions, renewals or
replacements thereof pursuant to Section 9.07(s)) not exceeding (together
with any Permitted Refinancing thereof) $5.0 million in the aggregate at
any time outstanding for Borrower and the Subsidiaries collectively;
(j) Contingent Obligations of Atrium Holdings and any Subsidiary in
respect of any registration rights agreement permitted by the proviso to
Section 9.25(b);
(k) Indebtedness of a Person that becomes a Subsidiary after the
date hereof; PROVIDED, HOWEVER, that (1) such Indebtedness existed at the
time such Person became a Subsidiary and was not created in connection
with or in anticipation thereof, (2) immediately after giving effect to
the acquisition of such Person by Borrower no Default shall have occurred
and be continuing, and (3) the aggregate amount of Indebtedness
outstanding at any time pursuant to this Section 9.08(k) shall not exceed
$5.0 million for all Subsidiaries; and
(l) Indebtedness and Contingent Obligations incurred by Borrower or
any Subsidiary, and any Permitted Refinancing thereof, not to exceed in
the aggregate at any time outstanding the excess of (1) $10.0 million over
(2) the aggregate amount of Indebtedness outstanding pursuant to
Section 9.08(k).
All intercompany debt shall be unsecured and subordinate in right
of payment (to the same extent as the subordination provisions set forth in
EXHIBIT B hereto) to the Obligations. Each Obligor, by its execution and
delivery of this Agreement, hereby agrees to subordinate its right of payment
under any intercompany debt owed to it by Borrower or any Subsidiary to the
full and complete payment and performance of the Obligations. No Obligor
shall incur any Subordinated Debt unless such Subordinated Debt shall be
subordinated to the Obligations at least to the same extent and
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for so long as such Subordinated Debt is subordinated to any other
Indebtedness pursuant to documentation reasonably acceptable to the Lead
Arranger.
9.09. LIMITATION ON INVESTMENTS; LIMITATION ON CREATION OF
SUBSIDIARIES. No Company shall, directly or indirectly, make or permit to
remain outstanding any Investment, except for the following:
(a) operating deposit accounts and certificates of deposit with
banks in the ordinary course of business;
(b) Permitted Investments;
(c) Investments by any Company in Borrower or any Qualified
Subsidiary or in any Subsidiary if as a result thereof or in connection
therewith such Subsidiary becomes a Qualified Subsidiary (provided that no
Investment will be permitted in respect of any Subsidiary with respect to
which Borrower has not complied with Section 9.20);
(d) Investments outstanding on the Closing Date and identified in
SCHEDULE 9.09 and any renewals, amendments and replacements thereof that
do not increase the amount thereof;
(e) Investments that constitute Indebtedness or Contingent
Obligations permitted under Section 9.08;
(f) advances, loans or extensions of credit by any Company to
(1) employees of any Company in the ordinary course of business; PROVIDED,
HOWEVER, that the aggregate amount of all such loans, advances and
extensions of credit shall not at any time exceed in the aggregate $2.0
million (without giving effect to any write-down or write-off thereof) and
(2) employees of any Company in connection with stock option plans so long
as (x) such loans do not involve cash payments by any Company and (y) no
Company incurs any obligations at any time to repurchase the stock so
purchased;
(g) extensions of credit in the nature of accounts receivable or
notes receivable arising from the sale or lease of goods or services in
the ordinary course of business;
(h) pledges or deposits required in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other
social security or similar legislation;
(i) pledges or deposits in connection with (i) the non-delinquent
performance of bids, trade contracts (other than for borrowed money),
leases or statutory obligations, (ii) contingent obligations on surety or
appeal bonds, and (iii) other non-delinquent obligations of a like nature,
in each case incurred in the ordinary course of business;
(j) Investments (including debt obligations) received in connection
with the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obliga-
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tions of, and other disputes with, customers and suppliers arising in the
ordinary course of business;
(k) Borrower and the Subsidiaries may hold additional Investments in
any Subsidiary which is not a Qualified Subsidiary to the extent that such
Investments reflect an increase in the stockholders' equity of such
Subsidiary resulting from retained earnings of such Subsidiary;
(l) Investments by any Subsidiary (other than a Qualified
Subsidiary) in any other Subsidiary (other than a Qualified Subsidiary);
(m) Capital Expenditures permitted by Section 9.11(d);
(n) Investments by any Company in any Subsidiary which is not a
Qualified Subsidiary to the extent made in the ordinary course to fund or
support the ordinary course operations of such Subsidiary so long as no
Default shall have occurred and be continuing; PROVIDED, HOWEVER, that (1)
the amount of such Investments made pursuant to this clause (n) shall not
exceed $1.0 million in the aggregate outstanding at any time (without
giving effect to any write-down or write-off thereof), and (2) all such
Investments which are Indebtedness shall be evidenced by Intercompany
Notes, which shall be pledged to Administrative Agent pursuant to the
Security Agreement;
(o) Borrower or any Subsidiary may hold the Equity Interests of any
Subsidiary existing on the Closing Date or created or acquired thereafter
in accordance with the provisions hereof and any additional Equity
Interests issued in exchange therefor or as a dividend thereon;
(p) Investments for the creation of any Wholly Owned Foreign
Subsidiary which is a foreign sales corporation consisting of de minimis
capitalization;
(q) Investments consisting of non-cash consideration received in the
form of securities, notes or similar obligations in connection with any
Disposition permitted by Section 9.06(g) (which shall not be subordinated
by its terms to any obligations of the issuer thereof); PROVIDED, HOWEVER,
that (1) the aggregate amount of such non-cash consideration received in
connection with any such Disposition shall not exceed 20% of the total
consideration received in connection with such Disposition, (2) such non-
cash consideration is pledged pursuant to the appropriate Security
Document, and (3) the aggregate amount of such Investments made and
outstanding at any time shall not exceed $5.0 million (without giving
effect to any write-downs or write-offs thereof);
(r) Investments by Foreign Subsidiaries in high quality investments
of the type similar to Permitted Investments made outside the United
States;
(s) Permitted Acquisitions;
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(t) Investments by Borrower or any Subsidiary in any joint venture
so long as after giving effect thereto Borrower shall be in compliance
with Section 9.05 and the aggregate amount thereof outstanding at any time
(without giving effect to any write-downs or write-offs thereof, but net
of any cash returns of capital, cash dividends and cash distributions
received in respect thereof) does not exceed $5.0 million; and
(u) in addition to the foregoing, other Investments by Borrower or
any Subsidiary not exceeding in the aggregate outstanding at any time
(without giving effect to any write-downs or write-offs thereof, but net
of any cash returns of capital, cash dividends and cash distributions
received in respect thereof) $5.0 million.
No Company shall, directly or indirectly, create or acquire any
Subsidiary without the prior written consent of the Majority Lenders, which
consent shall not be unreasonably withheld; PROVIDED, HOWEVER, that the
provisions of this paragraph shall not require the Majority Lenders' consent
for (I) the creation or acquisition of direct or indirect Wholly Owned
Subsidiaries so long as Section 9.20 is complied with at the time of
formation or acquisition thereof, and (II) the creation or acquisition of any
Subsidiary which is not a Wholly Owned Subsidiary so long as the Investment
made in connection therewith complies with this Section 9.09 at the time of
formation or acquisition thereof.
9.10. LIMITATION ON DIVIDEND PAYMENTS. No Company shall, directly
or indirectly, declare or make any Dividend Payment at any time, except:
(a) any Subsidiary may declare and make Dividend Payments to
Borrower or any Subsidiary to the extent made PRO RATA to all holders of
Equity Interests thereof;
(b) Dividend Payments on the Closing Date necessary to consummate
the Merger (including transaction expenses) in accordance with the
Transaction Documents and any management agreement entered into with any
Investor on the Closing Date;
(c) so long as no Default has occurred and is continuing or would
arise therefrom, Borrower may make Dividend Payments to Atrium Holdings if
the proceeds thereof are used at the time of such Dividend Payment by
Atrium Holdings (and Atrium Holdings may use such Dividend Payments by
Borrower as set forth below):
(i) to pay out-of-pocket expenses, for administrative, legal
and accounting services provided by third parties that are reasonable
and customary and incurred in the ordinary course of business for the
professional services, or to pay franchise fees and similar costs;
and
(ii) to make a Dividend Payment to Parent to redeem Equity
Interests (other than Disqualified Capital Stock) held by current or
former employees or directors of any Company (or their estates or
beneficiaries of their estates) upon the death, disability,
retirement or termination of employment or directorship, as the case
may be, pursuant to any agreement in effect on the Closing Date as in
effect on the Closing Date and pursuant to other agreements on
substantially similar terms entered into after
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the Closing Date; PROVIDED, HOWEVER, that the aggregate cash
consideration paid, or distributions made, pursuant to this clause
(c)(ii) shall not exceed $2.0 million in the aggregate since the
Closing Date, PLUS, in each case, the proceeds of any Excluded
Equity Issuance consummated contemporaneously with such purchase or
redemption; and
(d) so long as no Default has occurred and is continuing or would
arise therefrom, Borrower may make Dividend Payments to Atrium Holdings
out of the then existing amount of the Borrower Portion of Excess Cash
Flow to the extent that, at the time of making such Dividend Payment and
after giving pro forma effect to any Revolving Loans made to fund such
Dividend Payment, the Total Leverage Ratio as of the most recently
completed fiscal quarter for which financial statements have been
delivered pursuant to Section 9.01(a) or (b) is less than 2.75:1.0;
PROVIDED HOWEVER, that (A) either (I) such Dividend Payment is made after
September 30, 2003 and not earlier than the second Business Day prior to
the due date of any scheduled interest payment on the Investor Debt
Securities and the proceeds thereof are used at the time of such Dividend
Payment by Atrium Holdings to pay, on the scheduled semiannual interest
payments dates, interest accrued on the Investor Debt Securities
subsequent to September 30, 2003 or (II) the proceeds of such Dividend
Payment are contemporaneously used by Atrium Holdings to repay Investor
Debt Securities and (B) on and after the consummation date of the Change
of Control Offer, so long as less than $50.0 million in aggregate
principal amount of the Existing Notes are purchased by Borrower in the
Change of Control Offer, references in this paragraph (d) to "Total
Leverage Ratio" shall be deemed to be references to "Senior Leverage
Ratio."
9.11. FINANCIAL COVENANTS.
(a) MAXIMUM TOTAL LEVERAGE RATIO. The Total Leverage Ratio shall
not, as of any Test Date during the period from the Closing Date until the
date of the consummation of the Change of Control Offer, exceed the ratio of
5.25. On and after the date of consummation of the Change of Control Offer,
the Total Leverage Ratio shall not, as of any Test Date during any period set
forth in the table below, exceed (i) if $50.0 million or less in aggregate
principal amount of the Existing Notes are purchased by Borrower in the
Change of Control Offer (as specified in the Officers' Certificate delivered
pursuant to Section 9.01(o)), the ratio set forth opposite such period in
column I of the table below, (ii) if $100.0 million in aggregate principal
amount of the Existing Notes are purchased by Borrower in the Change of
Control Offer (as specified in such Officers' Certificate or if no such
Officers' Certificate is so delivered), the ratio set forth opposite the
corresponding period in column II of the table below, and (iii) if more than
$50.0 million but less than $100.0 million of the Existing Notes are
purchased by Borrower in the Change of Control Offer (as specified in such
Officers' Certificate), the ratio equal to (x) the ratio set forth opposite
such period in column I of the table below MINUS (y) the product of (A) a
fraction, the numerator of which is the aggregate principal amount of
Existing Notes in excess of $50.0 million purchased by Borrower in the Change
of Control Offer (as specified in the Officers' Certificate or if no such
Officers' Certificate is so delivered), and the denominator of which is $50.0
million, MULTIPLIED by (B) the absolute value of the difference between the
ratios set forth opposite such period in columns I and II below (such ratio
to be confirmed by Borrower, the
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Administrative Agent and the Lead Arranger by a notice distributed to each
Lender within 30 days after consummation of the Change of Control Offer).
Period Column I Column II
------ -------- ---------
Consummation of Change of
Control Offer - 3/31/99 5.25 4.75
4/1/99 - 9/30/99 5.00 4.50
10/1/99 - 3/31/00 4.75 4.00
4/1/00 - 9/30/00 4.50 3.80
10/1/00 - 3/31/01 4.25 3.40
4/1/01 - 9/30/01 4.00 3.10
10/1/01 - 3/31/02 3.75 2.70
4/1/02 - 9/30/02 3.50 2.50
10/1/02 - 3/31/03 3.25 2.20
4/1/03 - 9/30/03 3.00 2.20
10/1/03 - 3/31/04 2.75 2.00
4/1/04 and thereafter 2.50 2.00
(b) MINIMUM INTEREST COVERAGE RATIO. The Interest Coverage Ratio
shall not, as of any Test Date during the period from the Closing Date until
the date of the consummation of the Change of Control Offer, be less than the
ratio of 1.90. On and after the date of consummation of the Change of
Control Offer, the Interest Coverage Ratio shall not, as of any Test Date
during any period set forth in the table below, be less than (i) if $50.0
million or less in aggregate principal amount of the Existing Notes are
purchased by Borrower in the Change of Control Offer (as specified in the
Officers' Certificate delivered pursuant to Section 9.01(o)), the ratio set
forth opposite such period in column I of the table below, (ii) if $100.0
million in aggregate principal amount of the Existing Notes are purchased by
Borrower in the Change of Control Offer (as specified in such Officers'
Certificate)), the ratio set forth opposite such period in column II of the
table below, and (iii) if more than $50.0 million but less than $100.0
million of the Existing Notes are purchased by Borrower in the Change of
Control Offer (as specified in such Officers' Certificate or if no such
Officers' Certificate is so delivered), the ratio equal to (x) the ratio set
forth opposite such period in column I of the table below PLUS (y) the
product of (A) a fraction, the numerator of which is the aggregate principal
amount of Existing Notes in excess of $50.0 million purchased by Borrower in
the Change of Control Offer (as specified in such Officers' Certificate), and
the denominator of which is $50.0 million, MULTIPLIED by (B) the absolute
value of the difference between the numbers set forth opposite such period in
columns I and II below (such ratio to be confirmed by Borrower by a notice
distributed to each Lender within 30 days after consummation of the Change of
Control Offer).
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Period Column I Column II
------ -------- ---------
Consummation of Change of
Control Offer - 3/31/99 1.90 2.20
4/1/99 - 9/30/99 2.00 2.35
10/1/99 - 3/31/00 2.10 2.50
4/1/00 - 9/30/00 2.20 2.65
10/1/00 - 3/31/01 2.30 2.85
4/1/01 - 9/30/01 2.50 3.30
10/1/01 - 3/31/02 2.75 3.75
4/1/02 - 9/30/02 3.20 4.25
10/1/02 - 3/31/03 3.50 4.75
4/1/03 - 9/30/03 3.75 4.75
10/1/03 and thereafter 4.00 5.00
(c) MINIMUM FIXED CHARGE COVERAGE RATIO. The Fixed Charge
Coverage Ratio shall not, as of any Test Date during the period from the
Closing Date until the date of the consummation of the Change of Control
Offer, be less than the ratio of 1.25. On and after the date of consummation
of the Change of Control Offer, the Fixed Charge Coverage Ratio shall not, as
of any Test Date during any period set forth in the table below, be less than
(i) if $50.0 million or less in aggregate principal amount of the Existing
Notes are purchased by Borrower in the Change of Control Offer (as specified
in the Officers' Certificate delivered pursuant to Section 9.01(o)), the
ratio set forth opposite such period in column I of the table below, (ii) if
$100.0 million in aggregate principal amount of the Existing Notes are
purchased by Borrower in the Change of Control Offer (as specified in such
Officers' Certificate)), the ratio set forth opposite such period in column
II of the table below, and (iii) if more than $50.0 million but less than
$100.0 million of the Existing Notes are purchased by Borrower in the Change
of Control Offer (as specified in such Officers' Certificate), the ratio
equal to (x) the ratio set forth opposite such period in column I of the
table below PLUS (y) the product of (A) a fraction, the numerator of which is
the aggregate principal amount of Existing Notes in excess of $50.0 million
purchased by Borrower in the Change of Control Offer (as specified in such
Officers' Certificate or if no such Officers' Certificate is so delivered),
and the denominator of which is $50.0 million, MULTIPLIED by (B) the absolute
value of the difference between the numbers set forth opposite such period in
columns I and II below (such ratio to be confirmed by Borrower by a notice
distributed to each lender within 30 days after consummation of the Change of
Control Offer).
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Period Column I Column II
------ -------- ---------
Consummation of Change of
Control Offer - 3/31/99 1.25 1.40
4/1/99 - 9/30/99 1.30 1.50
10/1/99 - 3/31/00 1.40 1.60
4/1/00 - 9/30/00 1.50 1.70
10/1/00 - 3/31/01 1.60 1.80
4/1/01 - 9/30/01 1.70 1.95
10/1/01 - 3/31/02 1.75 2.10
4/1/02 - 9/30/02 1.90 2.30
10/1/02 - 3/31/03 2.00 2.50
4/1/03 - 9/30/03 2.15 2.80
10/1/03 - 3/31/04 2.30 3.10
4/1/04 - 9/30/04 2.70 3.50
10/1/04 and thereafter 3.00 3.80
(d) CAPITAL EXPENDITURES. Borrower shall not permit the aggregate
amount of Capital Expenditures made by Borrower and the Subsidiaries to
exceed (a) $1.75 million in the aggregate for the period from the Closing
Date until December 31, 1998, (b) $7.0 million in the aggregate for the
fiscal year ended December 31, 1999, (c) $7.5 million in the aggregate for
the fiscal year ended December 31, 2000, (d) $8.0 million in the aggregate
for the fiscal year ended December 31, 2001 and (e) $10.0 million in the
aggregate for the fiscal year ended December 31, 2002 and for any fiscal year
of Borrower thereafter; PROVIDED, HOWEVER, that (x) if the aggregate amount
of Capital Expenditures for any fiscal year shall be less than the amount
permitted for such fiscal year (before giving effect to any carryover), then
the shortfall may be added to the amount of Capital Expenditures permitted
for the immediately succeeding (but not any other) fiscal year if the amount
expended in such fiscal year would not exceed 125% of the amount permitted
for such fiscal year (before any carryover) and (y) in determining whether
any amount is available for carryover, the amount expended in any fiscal year
shall first be deemed to be from the amount allocated to such year before any
carryover.
9.12. PLEDGE OR MORTGAGE OF ADDITIONAL COLLATERAL. (a) Promptly,
and in any event within 30 days, after the acquisition of any Property of the
type that would have constituted Collateral at the Closing Date (including
the Equity Interests of any Subsidiary hereafter created or acquired owned
directly by Borrower or any Qualified Subsidiary) other than Real Property
(the "ADDITIONAL COLLATERAL") and after the creation or acquisition of any
Wholly Owned Subsidiary or other Subsidiary (so long as such creation or
acquisition is by Borrower or any Qualified Subsidiary), each Obligor shall
take all action reasonably necessary or desirable, if any, including the
execution and delivery of all such agreements, assignments, documents,
registers and instruments (including amendments to the Credit Documents) and
the filing of appropriate financing statements or other documents under the
provisions of the UCC or applicable requirements of any Governmental
Authority in each of the offices where such filing is necessary or
appropriate, to grant (in the reasonable judgment of Administrative Agent or
the Majority Lenders) to the Administrative Agent for the benefit of the
Issuing Lender, Lenders and Agents a duly perfected first priority Lien on
such Property pursuant to the appropriate Security Documents subject to Prior
Liens permitted under Section 9.07(g) or (h); PROVIDED,
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HOWEVER, that not more than 65% of the capital stock of any Foreign
Subsidiary (limited to "first-tier" Foreign Subsidiaries) need be pledged.
In the event that, after the Closing Date, any Obligor (including
any Qualified Subsidiary created or acquired on or after the Closing Date)
acquires or holds an interest with a market or book value of $2.0 million or
more in any Real Property, such Obligor shall (i) take such actions and
execute such documents as the Administrative Agent shall reasonably require
to confirm the Lien of an existing Mortgage, if applicable, or to create a
new Mortgage on such additional Real Property and (ii) cause to be delivered
to the Administrative Agent, on behalf of the Lenders, the documents and
instruments reasonably requested by the Administrative Agent, including,
without limitation, the items set forth in Section 7.01 in respect of
Mortgaged Real Property. If requested by the Lead Arranger or the Majority
Lenders, Borrower shall obtain at its sole expense and as soon as practicable
but in any event not later than 45 days after request therefor, Phase 1
environmental reports from an environmental engineering firm reasonably
acceptable to the Lead Arranger with respect to any Real Property held by any
Company if not delivered on or prior to the Closing Date.
The costs of all actions taken by the parties in connection with
the pledge of Additional Collateral or in connection with any Mortgage,
including reasonable costs of counsel for the Administrative Agent, shall be
paid by the Obligors promptly following written demand.
(b) With respect to each Mortgaged Real Property set forth in
SCHEDULE 7.01(XX), the Obligors shall deliver a Survey to the Administrative
Agent, on behalf of the Lenders, on or prior to the 30th day after the
Closing Date.
9.13. SECURITY INTERESTS; FURTHER ASSURANCES. Each Obligor shall,
promptly, upon the reasonable request of the Administrative Agent or any
Lender, at Borrower's expense, execute, acknowledge and deliver, or cause the
execution, acknowledgment and delivery of, and thereafter register, file or
record, or cause to be registered, filed or recorded, in an appropriate
governmental office, any document or instrument supplemental to or
confirmatory of the Security Documents or otherwise deemed by the
Administrative Agent reasonably necessary or desirable for the continued
validity, perfection and priority of the Liens on the Collateral covered
thereby, or obtain any consents, including, without limitation, landlord or
similar lien waivers and consents, as may be reasonably necessary or
appropriate in connection therewith.
Each Obligor shall deliver or cause to be delivered to the
Administrative Agent from time to time such other documentation, consents,
authorizations, approvals and orders in form and substance reasonably
satisfactory to the Administrative Agent as the Administrative Agent shall
reasonably deem necessary to perfect or maintain the Liens on the Collateral.
If any Lender determines in good faith that it is required by any
Governmental Authority or any Requirement of Law to obtain appraisals as to
the market value of any Real Property constituting Collateral, Borrower shall
obtain such appraisals as soon as practicable but in any event not less than
60 days after request therefor, at the sole cost and expense of Borrower and
in confor-
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mity with the requirements of such Governmental Authority and all
Requirements of Law, as from time to time in effect.
If an Event of Default shall have occurred and be continuing, upon
the reasonable request of the Administrative Agent, Borrower will obtain and
deliver to the Administrative Agent appraisal reports in form and substance
and from appraisers satisfactory to the Administrative 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 Company
and (b) the then current business value of each Company. All such appraisals
shall be conducted and made at the reasonable expense of the Borrower.
Upon the exercise by the Administrative Agent or the Lenders of any
power, right, privilege or remedy pursuant to any Credit Document which
requires any consent, approval, registration, qualification or authorization
of any Governmental Authority, each Obligor shall execute and deliver all
applications, certifications, instruments and other documents and papers that
the Administrative Agent or the Lenders may be so required to obtain.
9.14. COMPLIANCE WITH ENVIRONMENTAL LAWS. (a) Each Company shall
comply with all Environmental Laws, and will keep or cause all Property to be
kept free of any Liens under Environmental Laws, unless failure to do so
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect or subject any Agent, Lender or Issuing Lender to any
material risk of damages or liability; (b) in the event of the presence of
any Hazardous Material at, on, under or emanating from any Real Property
which would reasonably be expected to result in liability under or a
violation of any Environmental Law, in each case which could reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect, each Company shall undertake, and/or use their best efforts to cause
any of their respective tenants or occupants to undertake, at no expense to
any Lender, any action required pursuant to Environmental Laws to mitigate
and eliminate such adverse effect; PROVIDED, HOWEVER, that no Company shall
be required to comply with any order or directive of a Governmental Authority
which is being contested in good faith and by proper proceedings so long as
it has maintained adequate reserves with respect to such compliance to the
extent required in accordance with GAAP; (c) each Company shall promptly
notify the Administrative Agent of the occurrence of any event specified in
clause (b) of this Section 9.14 and shall periodically thereafter keep the
Administrative Agent informed of any material actions taken in response to
such event and the results of such actions; and (d) at the written request of
the Administrative Agent at any time and from time to time, each Obligor will
provide, at such Obligor's sole cost and expense, an environmental site
assessment (including, without limitation, the results of any groundwater or
other testing, conducted if the Administrative Agent directs that such
testing be conducted) concerning any Real Property now or hereafter owned,
leased or operated by any Company, conducted by an environmental consulting
firm proposed by such Obligor and approved by the Administrative Agent
indicating the presence or absence of Hazardous Materials and the potential
cost of any required investigation or other response or any corrective action
in connection with any Hazardous Materials on, at, under or emanating from
such Real Property and the potential cost of any required investigation,
response or corrective action to address any such Hazardous Materials;
PROVIDED, HOWEVER, that such request may be made only if (a) there has
occurred and is continuing an Event of
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Default, (b) the Administrative Agent reasonably believes that any Company or
any such Real Property or operations are not in material compliance with
Environmental Law or (c) circumstances exist that reasonably could be
expected to form the basis of an Environmental Claim against such Company or
any such Real Property which could, individually or in the aggregate, have a
Material Adverse Effect. If any Obligor fails to provide the same within 60
days after such request was made, the Administrative Agent may but is under
no obligation to conduct the same, and such Obligor shall grant and hereby
grants to the Administrative Agent and its agents access to such Real
Property and specifically grants the Administrative Agent an irrevocable
non-exclusive license, subject to the rights of tenants, to undertake such an
assessment, all at such Obligor's sole cost and expense.
9.15. LIMITATION ON TRANSACTIONS WITH AFFILIATES. No Company
shall, directly or indirectly, enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange of any
Property, the rendering of any service, or a merger or consolidation) with or
for the benefit of any Affiliate (an "AFFILIATE TRANSACTION") unless such
Affiliate Transaction is (i) otherwise not prohibited under this Agreement;
(ii) in the ordinary course of such Company's business, and (iii) on fair and
reasonable terms that are not less favorable to such Company than those that
are reasonably obtainable at the time in an arm's-length transaction with a
Person that is not such an Affiliate; PROVIDED, HOWEVER, that, other than
with respect to clauses (b) or (f) of this Section 9.15, so long as no
Default under Section 10(a), (e), (f), (g) or (j) or Section 10(d) arising by
virtue of a default in the performance of any obligation in Section 9.05,
9.06, 9.07, 9.08, 9.09, 9.10, 9.15, 9.25 or 9.28 shall have occurred and be
continuing or would arise therefrom, the following shall be permitted: (a)
Dividend Payments permitted by Section 9.10; (b) reasonable fees and
compensation paid to, and customary indemnity and reimbursement provided on
behalf of, officers, directors and employees of any Company in the ordinary
course of business; (c) loans or advances to employees permitted by Section
9.09; (d) transactions and agreements contemplated by the Management
Agreement and any amendments thereof permitted by Section 9.17 (including any
payment of accrued fees thereunder for any prior period during which the
payment thereof was not permitted by this Section 9.15); (e) transactions and
agreements in respect of any registration rights agreement permitted by the
proviso to Section 9.25(b); (f) transactions and agreements pursuant to and
payments under the Tax Sharing Agreement and any amendments thereof permitted
by Section 9.27; or (g) transactions and agreements in existence on the
Closing Date and described with particularity in SCHEDULE 9.15 (as such
agreements are in effect on the Closing Date, the "EXISTING AFFILIATE
AGREEMENTS") and the transactions pursuant to the Existing Affiliate
Agreements; PROVIDED, FURTHER, HOWEVER, so long as any Default under Section
10(d) arising by virtue of a default in the performance of any obligation in
Section 9.11 has not been cured or waived and Borrower shall not subsequently
be in compliance therewith in each case within 90 days after the occurrence
thereof, payments pursuant to management agreements described in clause (d)
of this Section 9.15 shall only be permitted in an amount equal to 50% of the
amount then due (other than any accrued and unpaid portion) provided for
therein as in effect on the Closing Date and the remaining 50% shall be
permitted to (and shall) accrue thereunder on a subordinated basis.
9.16. LIMITATION ON ACCOUNTING CHANGES; LIMITATION ON INVESTMENT
COMPANY STATUS. No Company shall make or permit, any change in (i)
accounting policies or reporting practices, except immaterial changes and
except as required by GAAP or (ii) its fiscal year end (December 31 of each
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year). No Obligor shall be or become an investment company subject to the
registration requirements under the United States Investment Company Act of
1940, as amended.
9.17. LIMITATION ON MODIFICATIONS OF CERTAIN DOCUMENTS, ETC. No
Company shall, directly or indirectly, consent to any modification,
supplement or waiver of, or amend, in any manner which could reasonably be
expected to be materially adverse to the Lenders, any of the provisions of
any Organic Document. No material change that could reasonably be expected
to be adverse to the Lenders may be made to the Merger Agreement, the
Contribution Agreements, the Investor Debt Securities Documents, the Existing
Notes Indenture, the Management Agreement, in each case without the consent
of the Lead Arranger and the Majority Lenders and, in the case of the
Investor Escrow Agreement, the Majority Tranche C Term Loan Lenders.
9.18. INTEREST RATE PROTECTION AGREEMENTS. Borrower shall obtain,
on or within 90 days after the Closing Date, interest rate protection
agreements having terms and with counterparties reasonably satisfactory to
the Lead Arranger as shall result in at least 50% of the aggregate principal
amount of then outstanding Total Debt of Borrower (as of the next Business
Day after the consummation of the Change of Control Offer) either bearing
interest at a fixed rate or being hedged for a period of at least three years
from the date the initial interest rate protection agreements were obtained.
9.19. LIMITATION ON CERTAIN RESTRICTIONS AFFECTING SUBSIDIARIES.
No Company (other than a Foreign Subsidiary) shall, directly or indirectly,
create or otherwise cause or suffer to exist or become effective any direct
or indirect encumbrance or restriction on the ability of such Company to (a)
pay dividends or make any other distributions on such Company's Equity
Interests or any other interest or participation in its profits owned by any
other Company, or pay any Indebtedness or any other obligation owed to any
other Company, (b) make Investments in or to any other Company, or (c)
transfer any of its Property to any other Company. The foregoing shall not
prohibit (i) any such encumbrances or restrictions existing under or by
reason of (A) applicable law, (B) the Credit Documents, (C) the Investor Debt
Securities Documents as in effect on the date hereof, (D) the Existing Notes
Indenture as in effect on the date hereof and (E) any Permitted Refinancing
of the Investor Debt Securities Documents or the Existing Notes Indenture so
long as such restriction in such Permitted Refinancing is not more
disadvantageous to the Lenders or Borrower than the Investor Debt Securities
Documents or Existing Notes Indenture, as applicable, as in effect on the
date hereof, (ii) restrictions on the transfer of assets subject to a Lien
permitted under Section 9.07, (iii) customary restrictions on subletting or
assignment of any lease governing a leasehold interest of any Company, and
(iv) with respect to restrictions described in clause (c) only, restrictions
on the transfer of any Property subject to a Disposition permitted under this
Agreement.
9.20. ADDITIONAL OBLIGORS. Upon any Obligor creating or acquiring
any Wholly Owned Subsidiary (other than a Foreign Subsidiary) after the
Closing Date (each such Wholly Owned Subsidiary referred to herein as an
"ADDITIONAL OBLIGOR" and collectively as the "ADDITIONAL OBLIGORS"), Borrower
shall (i) cause each such Wholly Owned Subsidiary to execute and deliver all
such agreements, guarantees, documents and certificates (including any
amendments to the Credit Documents and a Joinder Agreement) as the
Administrative Agent may reasonably request and do such other acts and things
as the Administrative Agent may reasonably request in order to have such
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Wholly Owned Subsidiary guarantee the Obligations in accordance with the
terms of the Credit Documents, (ii) promptly (I) execute and deliver to the
Administrative Agent such amendments to the Security Documents as the
Administrative Agent deems necessary or advisable in order to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected first
priority security interest in the Equity Interests and debt securities of
such new Wholly Owned Subsidiary which are owned by Borrower or any Wholly
Owned Subsidiary and required to be pledged pursuant to the Security
Agreement, (II) deliver to the Administrative Agent the certificates
representing such Equity Interests and debt securities, together with (A) in
the case of such Equity Interests, undated stock powers endorsed in blank,
and (B) in the case of such debt securities, endorsed in blank, in each case
executed and delivered by a responsible officer of Borrower or such
Subsidiary, as the case may be, (III) cause such new Wholly Owned Subsidiary
to take such actions necessary or advisable to grant to the Administrative
Agent for the benefit of the Lenders a perfected first priority security
interest in the collateral described in the Security Agreement with respect
to such new Wholly Owned Subsidiary (subject to Prior Liens, if any),
including, without limitation, the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required by the Security
Agreement or by law or as may be reasonably requested by the Administrative
Agent, and (IV) if reasonably requested by the Administrative Agent, deliver
to the Administrative Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
9.21. LIMITATION ON DESIGNATION OF DESIGNATED SENIOR INDEBTEDNESS.
Borrower shall not, nor shall it permit any Subsidiary to, designate any
Indebtedness or other obligation, other than Indebtedness under the Credit
Documents, as "Designated Senior Indebtedness," as such term is defined in
the Existing Notes Indenture as in effect on the Closing Date or any
Permitted Refinancing thereof, or any comparable designation that confers
upon the holders of such Indebtedness or other obligation (or any Person
acting on their behalf) the right to initiate blockage periods under the
Existing Notes Indenture or any other Indebtedness or other obligation of the
Borrower and its Subsidiaries.
9.22. FOREIGN SUBSIDIARIES' SECURITY. If following a change in
the relevant sections of the Code or the regulations, rules, rulings, notices
or other official pronouncements issued or promulgated thereunder, counsel
for Borrower reasonably acceptable to the Administrative Agent does not
within 30 days after a request from the Administrative Agent or the Majority
Lenders deliver evidence, in form and substance mutually satisfactory to the
Administrative Agent and Borrower, with respect to any Foreign Subsidiary
which has not already had all of its stock pledged pursuant to the Security
Agreement that (i) a pledge of 65% or more of the total combined voting power
of all classes of capital stock of such Foreign Subsidiary entitled to vote
and (ii) the entering into by such Foreign Subsidiary of a Joinder Agreement,
in any such case could reasonably be expected to cause the undistributed
earnings of such Foreign Subsidiary as determined for Federal income tax
purposes to be treated as a deemed dividend to such Foreign Subsidiary's
United States parent for Federal income tax purposes, then in the case of a
failure to deliver the evidence described in clause (i) above, that portion
of such Foreign Subsidiary's outstanding capital stock so issued by such
Foreign Subsidiary and not theretofore pledged pursuant to the Security
Agreement shall be pledged to the Administrative Agent for the benefit of the
Lenders pursuant to the Security Agreement (or another security agreement in
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substantially similar form, if needed), and in the case of a failure to
deliver the evidence described in clause (ii) above, such Foreign Subsidiary
shall execute and deliver a Joinder Agreement, guaranteeing the Obligations
of Borrower under the Loan Documents and granting the Administrative Agent
for the benefit of the Lenders a security interest in all of such Foreign
Subsidiary's assets securing the Obligations of such Foreign Subsidiary under
its Guarantee, in each case to the extent that the entering into of such
Joinder Agreement is permitted by the laws of the respective foreign
jurisdiction and with all documents delivered pursuant to this Section 9.22
to be in form and substance reasonably satisfactory to the Administrative
Agent.
9.23. LIMITATION ON ACTIVITIES OF PARENT AND ATRIUM HOLDINGS.
Neither Parent nor Atrium Holdings shall conduct any business, incur any
obligations (other than the Credit Documents and corporate overhead
(including, without limitation, fees and expenses incidental to an initial
public offering) and, in the case of Atrium Holdings, the Investor Debt
Securities Documents and Indebtedness permitted by Section 9.08(c)(z)) or
hold or acquire any assets (other than (i) the Equity Interests of, (x) in
the case of Parent, Atrium Holdings and (y) in the case of Atrium Holdings,
Borrower and (ii) in the case of Atrium Holdings, cash in an amount not to
exceed $1.0 million at any time) and shall have no operations other than
holding such Equity Interests and activities reasonably related thereto.
9.24. LIMITATION ON ISSUANCE OR DISPOSITIONS OF EQUITY INTERESTS
OF COMPANIES. Borrower shall not issue any of its Equity Interests or Equity
Rights or permit any Person to own any of its Equity Interests or Equity
Rights other than Atrium Holdings or any parent or indirect parent thereof.
Atrium Holdings shall not, directly or indirectly, effect any Disposition of
any Equity Interests or Equity Rights of Borrower other than the pledge
thereof pursuant to the Security Agreement. No Company shall effect the
Disposition of any Equity Interests of any Subsidiary unless (i) all Equity
Interests owned by such Company are sold pursuant thereto in accordance with
the Credit Documents, upon which sale the Guarantee of such Subsidiary shall
be automatically deemed to be released, or (ii) an Investment in an amount
equal to the fair market value of the remaining Equity Interests owned by
such Company in such Subsidiary after giving effect to such Disposition would
have been permitted to be made at such time pursuant to Section 9.09 (at the
time of such sale an Investment shall be deemed made in such Subsidiary in an
amount equal to the fair market value of such Equity Interests).
9.25. LIMITATION ON PAYMENTS OR PREPAYMENTS OF INDEBTEDNESS OR
MODIFICATION OF DEBT DOCUMENTS. No Company shall, directly or indirectly:
(a) make any payment or prepayment (optional or otherwise) on or
redemption of or any payments in redemption, defeasance or repurchase (any
such action, a "RESTRICTED DEBT PAYMENT") of the Investor Debt Securities,
any Existing Notes or any Subordinated Debt (whether in cash, securities
or other Property), except (1) regularly scheduled mandatory payments of
interest, (2) (x) any Restricted Debt Payment with respect to the Existing
Notes pursuant to the Change of Control Offer and (y) so long as no
Default has occurred and is continuing or would arise therefrom, such
repurchase is at a price not in excess of the then applicable redemption
price in the Existing Notes Indenture and such Existing Notes are
can-
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celled upon repurchase, any Restricted Debt Payment with respect to the
Existing Notes out of the then existing amount of the Borrower Portion of
Excess Cash Flow to the extent that, immediately prior to such repayment
and after giving pro forma effect to any Revolving Credit Loans made to
fund such repayment, the Total Leverage Ratio as of the most recently
completed fiscal quarter for which financial statements have been
delivered pursuant to Section 9.01(a) or (b) is less than 2.75:1.0;
PROVIDED, HOWEVER, that on and after the consummation date of the Change
of Control Offer, so long as less than $50.0 million in aggregate
principal amount of the Existing Notes are purchased by Borrower in the
Change of Control Offer, references in this paragraph (a)(2)(y) to "Total
Leverage Ratio" shall be deemed to be references to "Senior Leverage
Ratio", (3) any Permitted Refinancing to the extent permitted hereunder,
(4) any Restricted Debt Payment with respect to the Investor Debt
Securities (x) to the extent permitted by Section 9.10(d), (y) so long as
no Default has occurred and is continuing or would arise therefrom, with
the then available amount of the Designated Equity Issuance Proceeds but
not to exceed $20.0 million and (z) so long as no Default has occurred and
is continuing or would arise therefrom, out of that portion of the Net
Available Proceeds from any Equity Issuance not required to be applied to
the Loans and the Commitments pursuant to Section 2.10(a)(ii), in each
case of such clause (x), (y) or (z) so long as such repayment or
repurchase is at a price not in excess of that provided for in the
Investor Debt Securities Documents applicable at such time and such
Investor Debt Securities are cancelled and (5) the conversion or exchange
of any Indebtedness into shares of common Equity Interests of Parent; or
(b) amend, supplement, waive or otherwise modify any of the
provisions of any Investor Debt Securities Document or the Existing Notes
Indenture or the Existing Notes or any Subordinated Debt (or any Permitted
Refinancing thereof):
(i) which shortens the fixed maturity, or increases the rate
or shortens the time of payment of interest or dividends on, or
increases the amount or shortens the time of payment of any
principal, liquidation preference or premium payable whether at
maturity, at a date fixed for prepayment or by acceleration or
otherwise of such Indebtedness, or increases the amount of, or
accelerates the time of payment of, any fees payable in connection
therewith;
(ii) which relates to the affirmative or negative covenants,
events of default, redemption or repurchase provisions, or remedies
under the documents or instruments evidencing such Indebtedness and
the effect of which is to subject any Company to any more onerous or
more restrictive provisions taken as a whole; or
(iii) which otherwise materially adversely affects the interests
of the Lenders as senior creditors or the interests of the Lenders
under this Agreement or any other Credit Document in any respect;
PROVIDED, HOWEVER, that the foregoing shall not prohibit (i) any amendment,
supplement or other modification of any Investor Debt Securities Document to
the extent that such amended, supplemented or modified Investor Debt Security
Document is not materially more onerous taken as a whole to Atrium
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Holdings and its Subsidiaries and the Lenders than the Existing Notes
Indenture taken as a whole (as in effect on the date hereof as if Atrium
Holdings were the issuer thereunder and the Investor Debt Securities were
issued and outstanding as of the date of the Existing Notes Indenture and
whether or not the Existing Notes Indenture is in effect on the date of such
amendment, supplement or waiver) (provided that if such amended, supplemented
or modified Investor Debt Document is less onerous to Atrium Holdings and its
Subsidiaries and the Lenders than such Investor Debt Security Document on the
date hereof, the foregoing clause (i) shall be satisfied) and (ii) the
entering into by Atrium Holdings of a registration rights agreement providing
for registration rights with respect to the Investor Debt Securities
customary for an offering of securities exempt from registration pursuant to
Rule 144A under the Securities Act in form and substance satisfactory to the
Lead Arranger.
9.26. CASUALTY AND CONDEMNATION. Each Obligor will furnish to the
Administrative Agent and the Lenders prompt written notice of any casualty or
other insured damage to any material portion of the Collateral or the
commencement of any action or proceeding for the taking of any material
portion of the Collateral or any part thereof or interest therein under power
of eminent domain or by condemnation or similar proceeding.
9.27. TAX SHARING ARRANGEMENTS. Neither Parent nor any Company
shall enter into or permit to exist any amendment to the Tax Sharing
Agreement or any other tax sharing agreement or similar arrangement unless
the same shall have been reviewed by, and consented to, by the Lead Arranger
and the Majority Lenders.
9.28. CHANGE OF CONTROL OFFER. (a) On a date not later than the
fifth succeeding Business Day after the Closing Date, Borrower shall commence
the Change of Control Offer pursuant to the Change of Control Offer
Documents, which shall be substantially identical to the Change of Control
Offer Documents provided to the Lenders pursuant to Section 7.01(i)(11).
Borrower shall comply with all terms of the Existing Notes Indenture and
applicable laws in connection with the Change of Control Offer.
(b) Unless consented to by the Lead Arranger, the Majority Lenders
and the Majority Tranche C Term Loan Lenders, the consummation date of the
Change of Control Offer shall not be later than the 30th day after the date
of commencement of the Change of Control Offer, except as otherwise required
by applicable law, rule or regulation.
(c) Borrower shall not amend or supplement the Change of Control
Offer without the prior written consent of the Lead Arranger and Majority
Lenders and the Majority Tranche C Term Loan Lenders, except as otherwise
required by applicable law, rule or regulation.
Section 10. EVENTS OF DEFAULT. If one or more of the following
events (herein called "EVENTS OF DEFAULT") shall occur and be continuing:
(a) (i) Borrower shall default in the payment when due (whether at
stated maturity upon prepayment or repayment or acceleration or otherwise)
of any principal of any Loan or Reimbursement Obligation, or (ii) Borrower
shall default in the payment when due of interest on any Loan or any
Reimbursement Obligation or any fee or any other amount payable by it
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hereunder or under any other Credit Document when due and such default
under this clause (ii) shall have continued unremedied for three or more
Business Days; or
(b) Any Company shall default in the payment when due of any
principal of or interest on any of its Indebtedness (other than the Loans)
aggregating $3.5 million or more, beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was
created, after giving effect to any consents or waivers relating thereto
obtained before the expiration of any such period of grace; or any event
specified in any note, agreement, indenture or other document evidencing
or relating to any Indebtedness aggregating $3.5 million or more if the
effect of such event (after giving effect to any consents or waivers
relating thereto obtained before the expiration of any such period of
grace) is to cause, or (with the giving of any notice or the lapse of time
or both) to permit the holder or holders of such Indebtedness (or a
trustee or agent on behalf of such holder or holders) to cause, such
Indebtedness to become due, or to be prepaid in full (whether by
redemption, purchase, offer to purchase or otherwise), prior to its stated
maturity; PROVIDED, HOWEVER, that the $3.5 million threshold in this
paragraph (b) shall be increased to $5.0 million so long as no Company has
outstanding any Indebtedness that would permit any holder thereof to
declare such Indebtedness due and payable prior to its stated maturity
upon the occurrence of a default or event of default with respect to any
one or more issues of other Indebtedness of any Company aggregating $6.0
million or less; or
(c) Any representation or warranty made or deemed made in any Credit
Document (or in any modification or supplement thereto) by any Obligor or
in any certificate furnished to any Creditor pursuant to the provisions
thereof, shall prove to have been false or misleading as of the time made,
deemed made or furnished in any material respect; or
(d) Any Obligor shall default in the performance of any of its
obligations under any of Sections 9.01(f), 9.06 through 9.13, 9.15 through
9.25, 9.27 and 9.28; or any Obligor shall default in the performance of
any of its obligations under Section 5.02 of the Security Agreement; or
Borrower shall default in the performance of its obligations under Section
9.01(e) or (k) and such default shall continue unremedied for five
Business Days; or any Obligor shall default in the performance of any of
its other obligations in this Agreement, the Security Documents or the
Letter of Credit Documents and such default shall continue unremedied for
a period of thirty days after written notice thereof to such Obligor or
Borrower by the Administrative Agent or any Lender; or
(e) Any Company shall not, or shall admit in writing its inability
to, or be generally unable to, pay its debts as such debts become due; or
(f) Any Company or Parent shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian,
trustee or liquidator of itself or of all or a substantial part of its
Property, (ii) make a general assignment for the benefit of its creditors,
(iii) commence or consents to any Insolvency Proceeding, (iv) file a
petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, winding-up, or
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composition or readjustment of debts, (v) fail to controvert within 60
days or in a timely and appropriate manner, or acquiesce in writing to,
any petition filed against it in an involuntary Insolvency Proceeding,
or (vi) take any corporate action for the purpose of effecting any of
the foregoing; or
(g) (i) Any Insolvency Proceeding is commenced or filed against any
Company or Parent, or any writ, judgment, warrant of attachment, execution
or similar process is issued or levied against any Company or Parent, and
either (1) such proceeding or petition shall not be dismissed, or such
writ, judgment, warrant of attachment, execution or similar process shall
not be released, vacated or fully bonded, within 60 days after
commencement, filing or levy or (2) such proceeding shall not be actively
contested by such Company; (ii) any Company or Parent admits the material
allegations of a petition against it in any Insolvency Proceeding, or an
order for relief (or similar order under non-U.S. law) is ordered in any
Insolvency Proceeding; (iii) any Company or Parent acquiesces in the
appointment of a receiver, receiver and manager, trustee, custodian,
conservator, liquidator, mortgagee in possession (or agent therefor), or
other similar person for itself or a substantial portion of its Property
or business; or (iv) an order of relief against any Company shall be
entered in any involuntary Insolvency Proceeding; or
(h) A final judgment or judgments for the payment of money in excess
of $3.5 million in the aggregate (exclusive of judgment amounts to the
extent covered by insurance) shall be rendered by one or more courts,
administrative tribunals or other bodies having jurisdiction against any
Company and the same shall not be discharged (or provision shall not be
made for such discharge), vacated or bonded pending appeal, or a stay of
execution thereof shall not be procured, within 60 days from the date of
entry thereof and such Company shall not, within said period of 60 days,
or such longer period during which execution of the same shall have been
stayed, appeal therefrom and cause the execution thereof to be stayed
during such appeal; PROVIDED, HOWEVER, that the $3.5 million threshold in
this paragraph (h) shall be increased to $5.0 million so long as no
Company has outstanding any Indebtedness that would permit any holder
thereof to declare such Indebtedness due and payable prior to its stated
maturity upon the occurrence of any judgment rendered by one or more
courts, administrative tribunals or bodies having jurisdiction against any
Company for the payment of money of $6.0 million or less in the aggregate;
or
(i) An ERISA Event or noncompliance with respect to foreign plans
shall have occurred that, when taken together with all other ERISA Events
and noncompliance with respect to foreign plans that have occurred, is
reasonably likely to result in liability of any Company in an aggregate
amount exceeding $5.0 million; or
(j) Any Change of Control shall occur; or
(k) Any Security Document after delivery thereof by any Obligor at
any time shall cease to be in full force and effect or shall for any
reason fail to create or cease to maintain a valid and duly perfected
first priority security interest in and Lien upon (subject to Prior Liens
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and other Liens expressly permitted by the terms of the applicable
Security Document) any material portion of the Collateral; or
(l) Any Guarantee ceases to be in full force and effect or any of
the Guarantors repudiates or attempts to repudiate, any of its obligations
under any of the Guarantees; or
(m) Any Credit Document or any material provision thereof shall at
any time and for any reason be declared by a court of competent
jurisdiction to be null and void, or a Proceeding shall be commenced by
any Obligor, or by any Governmental Authority, seeking to establish the
invalidity or unenforceability thereof (exclusive of questions of
interpretation of any provision thereof), or any Obligor shall repudiate
or deny that it has any liability or obligation for the payment of
principal or interest or other obligations purported to be created under
any Credit Document; or
(n) Any non-monetary judgment, order or decree is entered against
any Company which is reasonably likely to have a Material Adverse Effect,
and there shall be any period of 60 consecutive days during which a stay
of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(o) The Merger or Contributions shall not be consummated in all
material respects in accordance with this Agreement and the Merger
Agreement or Contribution Agreements, as applicable, substantially
concurrently with the making of the initial extensions of credit hereunder
or the Merger or Contributions shall be unwound, reversed or otherwise
rescinded in whole or in any material part for any reason; or
(p) The subordination provisions relating to the Existing Notes or
any other Subordinated Debt (the "SUBORDINATION PROVISIONS") shall fail in
any material respect to be enforceable by the Lenders (which have not
effectively waived the benefits thereof) in accordance with the terms
thereof, or any Obligation shall fail to constitute Senior Debt (as
defined in any Subordinated Debt), or any Obligor shall, directly or
indirectly, disavow or contest in any manner any of the Subordination
Provisions;
THEREUPON: (1) in the case of an Event of Default other than one referred to
in clause (f) or (g) with respect to Borrower of this Section 10, the
Administrative Agent may, and upon written direction of the Majority Lenders
shall, by notice to Borrower, terminate the Commitments and/or declare the
principal amount then outstanding of, and the accrued interest on, the Loans,
the Reimbursement Obligations and all other amounts payable by Borrower
hereunder and under the Notes (including any amounts payable under Section
5.05 or 5.06) to be forthwith due and payable, whereupon such amounts shall
be immediately due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by
Borrower, reduce any claim to judgment, take any other action permitted by
law and/or take any action permitted to be taken by the Security Documents
during the existence of an Event of Default; and (2) in the case of the
occurrence of an Event of Default referred to in clause (f) or (g) of this
Section 10 with respect to Borrower, the Commitments shall automatically be
terminated and the principal amount then outstanding of, and the ac-
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crued interest on, the Loans, the Reimbursement Obligations and all other
amounts payable by Borrower hereunder and under the Notes (including any
amounts payable under Section 5.05 or 5.06) shall automatically become
immediately due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by Borrower.
In addition, Borrower agrees, upon the occurrence and during the
continuance of any Event of Default if the Administrative Agent has declared
the principal amount then outstanding of, and accrued interest on, the
Revolving Credit Loans, and all other amounts payable to the Revolving Credit
Lenders hereunder and under the Notes evidencing such Loans to be due and
payable, it may and shall, if requested by the Majority Revolving Credit
Lenders through the Administrative Agent (and, in the case of any Event of
Default referred to in clause (f) or (g) of this Section 10 with respect to
Borrower, forthwith, without any demand or the taking of any other action by
the Administrative Agent or such Lenders) provide cover for the Letter of
Credit Liabilities by paying to the Administrative Agent immediately
available funds in an amount equal to the then aggregate undrawn face amount
of all Letters of Credit, which funds shall be held by the Administrative
Agent in the Collateral Account as collateral security in the first instance
for the Letter of Credit Liabilities and be subject to withdrawal only as
provided in the Security Agreement.
Section 11. THE AGENTS.
11.01. GENERAL PROVISIONS. Each of the Lenders and the Issuing
Lender hereby irrevocably appoints the Administrative Agent as its agent and
authorizes the Administrative Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Administrative Agent by the
terms hereof and the Security Documents, together with such actions and
powers as are reasonably incidental thereto. The Administrative Agent agrees
to give promptly to each Lender a copy of each notice or other document
received by it pursuant to any Credit Document (other than any that are
required to be delivered to the Lenders by any Credit Party).
The Lender or other financial institution serving as any Agent or
Issuing Lender hereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender and may exercise the same as though
it were not such Agent or Issuing Lender, and such bank and its Affiliates
may accept deposits from, lend money to and generally engage in any kind of
business with any Company or other Affiliate thereof as if it were not such
Agent or Issuing Lender hereunder.
No Agent or Issuing Lender shall have any duties or obligations
except those expressly set forth herein. Without limiting the generality of
the foregoing, (a) no Agent or Issuing Lender shall be subject to any
fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) no Agent or Issuing Lender shall have any
duty to take any discretionary action or exercise any discretionary powers,
except discretionary rights and powers expressly contemplated hereby that
such Agent or Issuing Lender is required to exercise in writing by the
Majority Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 12.04), and (c)
except as expressly set forth herein, no Agent or Issuing Lender shall have
any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to any Company that is communicated to or obtained
by the financial institution
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serving as such Agent or Issuing Lender or any of its Affiliates in any
capacity. No Agent or Issuing Lender shall be liable for any action taken or
not taken by it with the consent or at the request of the Majority Lenders
(or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 12.04) or in the absence of
its own gross negligence or willful misconduct. No Agent shall be deemed to
have knowledge of any Default or Event of Default unless and until written
notice thereof is given to the Administrative Agent and such Agent by
Borrower or a Lender, and no Agent or Issuing Lender shall be responsible for
or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement or any other
Credit Document, (ii) the contents of any certificate, report or other
document delivered hereunder or under any other Credit Document or in
connection herewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement or
any other Credit Document or any other agreement, instrument or document, or
(v) the satisfaction of any condition set forth in Section 7 or elsewhere
herein, other than to confirm receipt of items expressly required to be
delivered to such Agent.
Each Agent and Issuing Lender shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing
believed by it to be genuine and to have been signed or sent by the proper
Person. Each Agent and Issuing Lender also may rely upon any statement made
to it orally or by telephone and believed by it to be made by the proper
Person, and shall not incur any liability for relying thereon. Each Agent
and Issuing Lender may consult with legal counsel (who may be counsel for
Borrower), independent accountants and other experts selected by it, and
shall not be liable for any action taken or not taken by it in accordance
with the advice of any such counsel, accountants or experts. Each Agent and
Issuing Lender may deem and treat the payee of any Note as the owner thereof
for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with such Agent or Issuing Lender.
Each Agent and Issuing Lender shall be fully justified in failing or refusing
to take any action under this Agreement or any other Credit Document unless
it shall first receive such advice or concurrence of the Majority Lenders
(or, if so specified by this Agreement, all Lenders) as it deems appropriate
or it shall first be indemnified to its satisfaction by the Lenders against
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action (it being understood that this
provision shall not release the Administrative Agent from performing any
action with respect to Borrower expressly required to be performed by it
pursuant to the terms hereof) under this Agreement. Each Agent and Issuing
Lender shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Credit Documents in accordance
with a request of the Majority Lenders (or, if so specified by this
Agreement, all Lenders), and such request and any action taken or failure to
act pursuant thereto shall be binding upon all the Lenders and all future
holders of the Loans.
Each Agent and Issuing Lender may perform any and all its duties
and exercise its rights and powers by or through any one or more sub-agents
appointed by such Agent or Issuing Lender and reasonably acceptable to
Borrower. Each Agent, Issuing Lender and any such sub-agent may perform any
and all its duties and exercise its rights and powers through their
respective Affiliates, directors, officers, employees, agents and advisors
("RELATED PARTIES"). The exculpatory provi-
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sions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of each Agent and Issuing Lender and any such sub-agent,
and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as
activities of such Agent or Issuing Lender.
Subject to the appointment and acceptance of a successor Agent as
provided in this paragraph, any Agent may resign at any time by notifying the
Lenders, the Issuing Lender (with respect to the Administrative Agent only)
and Borrower. Upon any such resignation, the Majority Lenders shall have the
right to appoint a successor which, so long as no Event of Default is
continuing, shall be reasonably acceptable to Borrower. If no successor
shall have been so appointed by the Majority Lenders and shall have accepted
such appointment within 30 days after the retiring Agent gives notice of its
resignation, then the retiring Agent may, on behalf of the Lenders and the
Issuing Lender, appoint a successor Agent which shall be a bank with an
office in New York, New York, or an Affiliate of any such bank which, so long
as no Event of Default is continuing, shall be reasonably acceptable to
Borrower. Upon the acceptance of its appointment as Agent hereunder by a
successor, such successor shall 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. The
fees payable by Borrower to a successor Agent shall be the same as those
payable to its predecessor unless otherwise agreed between Borrower and such
successor. After the Agent's resignation hereunder, the provisions of this
Section 11 shall continue in effect for the benefit of such retiring Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while it was acting as such Agent.
Each Lender acknowledges that it has, independently and without
reliance upon any Agent, Issuing Lender or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon any Agent,
Issuing Lender or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make
its own decisions in taking or not taking action under or based upon this
Agreement, any related agreement or any document furnished hereunder or
thereunder. No Agent or Issuing Lender shall be deemed a trustee or other
fiduciary on behalf of any party.
11.02. INDEMNIFICATION. Each Lender agrees to indemnify and hold
harmless each Agent and the Issuing Lender (to the extent not reimbursed
under Section 12.03, but without limiting the obligations of Borrower under
Section 12.03), ratably in accordance with the aggregate principal amount of
the respective Commitments of and/or Loans and Reimbursement Obligations held
by the Lenders (or, if all of the Commitments shall have been terminated or
expired, ratably in accordance with the aggregate outstanding amount of the
Loans and Reimbursement Obligations held by the Lenders), for any and all
liabilities (including, without limitation, pursuant to any Environmental
Law), obligations, losses, damages, fines, penalties, actions, judgments,
deficiencies, suits, costs, expenses (including reasonable attorneys' and
experts' fees) or disbursements of any kind and nature whatsoever that may be
imposed on, incurred by or asserted against such Agent or Issuing Lender
(including by any Lender) arising out of or by reason of any investigation in
or in any way relating to or arising out of any Credit Document or any other
documents contemplated by or referred to therein for
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any action taken or omitted to be taken by such Agent or Issuing Lender under
or in respect of any of the Credit Documents or other such documents or the
transactions contemplated thereby (including the costs and expenses that
Borrower is obligated to pay under Section 12.03, but excluding, unless a
Default has occurred and is continuing, normal administrative costs and
expenses incident to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof or of any such other
documents; PROVIDED, HOWEVER, that no Lender shall be liable for any of the
foregoing to the extent they are determined by a court of competent
jurisdiction in a final and nonappealable judgment to have resulted from the
gross negligence or bad faith of the party to be indemnified. The agreements
set forth in this Section 11.02 shall survive the payment of all Loans and
other obligations hereunder and shall be in addition to and not in lieu of
any other indemnification agreements contained in any other Credit Document.
11.03. CONSENTS UNDER OTHER CREDIT DOCUMENTS. Except as otherwise
provided in this Agreement and the other Credit Documents, the Administrative
Agent may, with the prior consent of the Majority Lenders (but not
otherwise), consent to any modification, supplement or waiver under any of
the other Credit Documents.
11.04. COLLATERAL SUB-AGENTS. Each Lender by its execution and
delivery of this Agreement agrees, as contemplated by Section 4.03 of the
Security Agreement, that, in the event it shall hold any Permitted
Investments referred to therein, such Permitted Investments shall be held in
the name and under the control of such Lender, and such Lender shall hold
such Permitted Investments as a collateral sub-agent for the Administrative
Agent thereunder. Borrower by its execution and delivery of this Agreement
hereby consents to the foregoing.
11.05. ASSISTANCE BY LENDERS. Each of the Lenders shall provide
full assistance and cooperation to the Administrative Agent and each Lender
hereby grants express and exclusive foreclosing and mortgage enforcement
authority to the Administrative Agent with respect to the Collateral.
Section 12. MISCELLANEOUS.
12.01. WAIVER. No failure on the part of any Creditor to exercise
and no delay in exercising, and no course of dealing with respect to, any
right, power or privilege under any Credit Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege under any Credit Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The remedies
provided herein are cumulative and not exclusive of any remedies provided by
law.
12.02. NOTICES. All notices, requests and other communications
provided for herein and under the Security Documents (including any
modifications of, or waivers, requests or consents under, this Agreement)
shall be given or made in writing (including by facsimile) delivered to the
intended recipient at the "Address for Notices" specified below its name on
the signature pages hereof (or as to any Guarantor, as so specified for
Borrower) or, as to any party, at such other address as shall be designated
by such party in a notice to each other party. Except as otherwise provided
in this
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Agreement, all such communications shall be deemed to have been duly given
when transmitted by facsimile or personally delivered or, in the case of a
mailed notice, upon receipt, in each case given or addressed as aforesaid.
Any Notice of Borrowing or Notice of Continuation/Conversion shall be deemed
to have been received when actually received.
12.03. EXPENSES, INDEMNIFICATION, ETC. (a) The Obligors, jointly
and severally, agree to pay or reimburse:
(i) the Issuing Lender, the Lead Arranger and the Administrative
Agent for all of their reasonable out-of-pocket costs and expenses
(including the reasonable fees and expenses of one legal counsel and one
legal counsel in each applicable locality) in connection with (1) the
negotiation, preparation, execution and delivery of the Credit Documents
and the extension of credit hereunder, (2) the negotiation or preparation
of any modification, supplement or waiver of any of the terms of any
Credit Document (whether or not consummated or effective) and (3) the
syndication of the Loans and Commitments;
(ii) each of the Lenders, the Issuing Lender and the Administrative
Agent for all reasonable out-of-pocket costs and expenses of the Lenders,
the Issuing Lender and the Administrative Agent (including the reasonable
fees and expenses of legal counsel) in connection with (1) any enforcement
or collection proceedings resulting from any Default, including all manner
of participation in or other involvement with (x) bankruptcy, insolvency,
receivership, foreclosure, winding up or liquidation proceedings, (y)
judicial or regulatory proceedings and (z) workout, restructuring or other
negotiations or proceedings (whether or not the workout, restructuring or
transaction contemplated thereby is consummated), (2) the enforcement of
this Section 12.03 and (3) any documentary taxes; and
(iii) the Administrative Agent for all reasonable costs, expenses,
taxes, assessments and other charges incurred in connection with any
filing, registration, recording or perfection of any security interest
contemplated by any Credit Document or any other document referred to
therein.
(b) The Obligors, jointly and severally, hereby agree to indemnify
each Creditor and their respective Affiliates, directors, trustees, officers,
employees and agents (each, an "INDEMNITEE") from, and hold each of them
harmless against, and that no Indemnitee will have any liability for, any and
all Losses incurred by any of them (including any and all Losses incurred by
the Administrative Agent, the Lead Arranger or the Issuing Lender to any
Lender, whether or not any Creditor is a party thereto) directly or indirectly
arising out of or by reason of or relating to the negotiation, execution,
delivery, performance, administration or enforcement of any Credit Document,
any of the transactions contemplated by the Credit Documents, any breach by any
Obligor of any representation, warranty, covenant or other agreement contained
in any of the Credit Documents in connection with any of the Transactions, the
use or proposed use of any of the Loans or Letters of Credit, the issuance of
or performance under any Letter of Credit or the use of any collateral security
for the Loans (including the exercise by any Creditor of the rights and
remedies or any power of attorney with respect thereto and any action or
inaction in respect thereof), but excluding (i) any such Losses to the extent
finally de-
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termined by a court of competent jurisdiction in a final and nonappealable
judgment to have arisen primarily from the gross negligence or bad faith of
the Indemnitee and (ii) claims among the Agents and the Lenders other than to
the extent arising out of or as a result of any direct or indirect act or
omission of any Obligor or any Affiliate, director, officer, employee or
agent thereof.
Without limiting the generality of the foregoing, the Obligors,
jointly and severally, will indemnify each Creditor and each other Indemnitee
from, and hold each Creditor and each other Indemnitee harmless against, any
Losses described in the preceding sentence arising under any Environmental
Law as a result of (A) the past, present or future operations of any Company
(or any predecessor in interest to any Company), (B) the past, present or
future condition of any site or facility owned, operated, leased or used at
any time by any Company (or any such predecessor in interest), or (C) any
Release or threatened Release of any Hazardous Materials at, on, under or
from any such site or facility, including any such Release or threatened
Release that shall occur during any period when any Creditor shall be in
possession of any such site or facility following the exercise by such
Creditor of any of its rights and remedies hereunder or under any of the
Security Documents (except to the extent such release or threatened release
is caused by the actions of such Creditor); PROVIDED, HOWEVER, that the
indemnity hereunder shall be subject to the exclusions from indemnification
set forth in the preceding paragraph.
To the extent that the undertaking to indemnify and hold harmless
set forth in this Section 12.03 or any other provision of any Credit Document
providing for indemnification is unenforceable because it is violative of any
law or public policy or otherwise, the Obligors, jointly and severally, shall
contribute the maximum portion that each of them is permitted to pay and
satisfy under applicable law to the payment and satisfaction of all
indemnified liabilities incurred by any of the Persons indemnified hereunder.
The Obligors also agree that no Indemnitee shall have any liability
(whether direct or indirect, in contract or tort or otherwise) for any Losses
to any Obligor or any Obligor's security holders or creditors resulting from,
arising out of, in any way related to or by reason of any matter referred to
in any indemnification or expense reimbursement provisions set forth in this
Agreement or any other Credit Document, except to the extent that any Loss is
determined by a court of competent jurisdiction in a final nonappealable
judgment to have resulted primarily from the gross negligence or bad faith of
such Indemnitee.
The Obligors agree that, without the prior written consent of the
Administrative Agent, the Lead Arranger and the Majority Lenders which
consent shall not be unreasonably withheld, no Obligor will settle,
compromise or consent to the entry of any judgment in any pending or
threatened Proceeding in respect of which indemnification is reasonably
likely to be sought under the indemnification provisions of this Section
12.03 (whether or not any Indemnitee is an actual or potential party to such
Proceeding), unless such settlement, compromise or consent includes an
unconditional written release of each Indemnitee from all liability arising
out of such Proceeding and does not include any statement as to an admission
of fault, culpability or failure to act by or on behalf of any Indemnitee and
does not involve any payment of money or other value by any Indemnitee or any
injunctive relief or factual findings or stipulations binding on any
Indemnitee.
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12.04. AMENDMENTS, ETC. (i) No provision of any Credit Document
may be amended, modified or supplemented except by an instrument in writing
signed by the Obligors party thereto and the Majority Lenders, or by the
Obligors party thereto and the Administrative Agent acting with the written
consent of the Majority Lenders, and no provision of any Credit Document may
be waived except by an instrument in writing signed by the Obligors party
thereto and the Majority Lenders, or by the Obligors party thereto and the
Administrative Agent acting with the written consent of the Majority Lenders;
PROVIDED, HOWEVER, that:
(a) no amendment or waiver shall, unless by an instrument signed by
all of the Lenders or by the Administrative Agent acting with the written
consent of each Lender (with Obligations directly affected in the case of
clause (I)): (I) extend the scheduled final maturity of any Loan or Note,
or extend the stated expiration date of any Letter of Credit beyond the
Revolving Credit Commitment Termination Date, or reduce the rate of
interest (other than any waiver of any increase in the interest rate
applicable to any of the Loans pursuant to clause (b) of Section 3.02) or
fees thereon, or extend the time of payment of interest or fees thereon,
or reduce the principal amount thereof, or make any change to the
definition of Applicable Margin or Applicable Revolving Credit Fee
Percentage, (II) extend the final maturity of any of the Commitments (or
reinstate any Commitment terminated pursuant to Section 10), (III) change
the currency in which any Obligation is payable, (IV) amend the terms of
this Section 12.04 or Section 4.07, 5 or 11.03, (V) reduce the percentages
specified in the definition of the term "Majority Lenders" or
"Supermajority Lenders" or amend any provision of any Credit Document
requiring the consent of all the Lenders or reduce any other percentage of
the Lenders required to make any determinations or waive any rights
hereunder or to modify any provision hereof (it being understood that,
with the consent of the Majority Lenders, additional extensions of credit
pursuant to this Agreement may be included in the determination of the
Majority Lenders and Supermajority Lenders without notice to or consent of
any other Lender or Agent on substantially the same basis as the
Commitments (and related extensions of credit) are included on the Closing
Date), (VI) release any Guarantor from its obligations under Section 6
(unless permitted by this Agreement), (VII) consent to the assignment or
transfer by any Obligor of any of its rights and obligations under any
Credit Document, (VIII) release all or substantially all the Collateral or
terminate the Lien under any Credit Document in respect of all or
substantially all the Collateral (except as permitted by the Credit
Documents) or agree to additional obligations (other than the Obligations
and other extensions of credit under this Agreement consented to by the
Majority Lenders) being secured by the Collateral, (IX) waive the
requirement that nine and twelve month LIBOR Interest Periods require the
consent of all Lenders or (X) amend Section 12.03 or any other
indemnification and expense reimbursement provision set forth in any
Credit Document (it being understood that any prepayment required by
Section 2.10(a) (and any corresponding reduction of the Revolving Credit
Commitments), other than pursuant to Section 2.10(a)(v), may be waived or
amended by the Majority Lenders);
(b) no such amendment, modification, supplement or waiver shall
increase the Commitments of any Lender over the amount thereof then in
effect without the consent of such Lender (it being understood that
amendments, modifications or waivers of conditions prece-
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dent, covenants, Defaults or Events of Default shall not constitute an
increase of the Commitment of any Lender);
(c) any modification or supplement of or waiver with respect to
Section 11 which affects any Agent in their respective capacities as such
shall require the consent of such Agent;
(d) no consent of any Lender need be obtained, and the
Administrative Agent is hereby authorized, to release any Lien securing
the Obligations on Property which is the subject of any Disposition
permitted by the Credit Documents and to release any Guarantee of a
Subsidiary upon the sale of all of the Equity Interests of such Subsidiary
in accordance with the Credit Documents;
(e) subject to clause (a)(I) above of this proviso to this Section
12.04(i), the consent of the Majority Tranche B Term Loan Lenders, if the
Tranche B Term Loans are directly affected, or the Majority Tranche C Term
Loan Lenders, if the Tranche C Term Loans are directly affected, shall be
required with respect to any extension of any scheduled Amortization
Payment or any reduction in the amount of any scheduled Amortization
Payment or any change to Section 3.01(b)(2) (it being understood that,
subject to clause (f) below of this Section 12.04, any prepayment required
by Section 2.10 (and any corresponding reduction of the Revolving Credit
Commitments), other than pursuant to Section 2.10(a)(v), may be modified,
supplemented or waived by the Majority Lenders);
(f) no modification, supplement or waiver shall, unless by an
instrument signed by the Supermajority Lenders of the Affected Class or by
the Administrative Agent acting with the written consent of the
Supermajority Lenders of the Affected Class, change the timing of the
receipt or the application of mandatory prepayments hereunder as among the
Tranche B Term Loans and the Tranche C Term Loans or the order in which
any such prepayment is applied to the Tranche B Term Loans or Tranche C
Term Loans (although any required prepayment set forth in Section 2.10
(and any corresponding reduction of the Revolving Credit Commitments),
other than pursuant to Section 2.10(a)(v), may otherwise be modified,
supplemented or waived by the Majority Lenders);
(g) no reduction of the percentage specified in the definition of
"Majority Revolving Credit Lenders," "Majority Tranche B Term Loan
Lenders" or "Majority Tranche C Term Loan Lenders" shall be made without
the consent of each Revolving Credit Lender, each Tranche B Term Loan
Lender or each Tranche C Term Loan Lender, respectively (it being
understood that, only the Class of such Loan to which such definition
relates need consent to any such reduction and that with the consent of
the Majority Lenders, other additional extensions of credit pursuant to
this Agreement may be included in any such definition without notice to or
consent of any other Lender or Agent on substantially the same terms as
the Commitments (and related extensions of credit) are included on the
Closing Date);
(h) no reduction of the percentage specified in the definition of
"Supermajority Lenders of the Affected Class" shall be made without the
consent of each Term Loan Lender (it
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being understood that, with the consent of the Majority Lenders,
additional extensions of credit pursuant to this Agreement may be
included in either such definition without notice to or consent of any
other Lender or Agent on substantially the same terms as the Commitments
(and related extensions of credit) are included on the Closing Date);
(i) no amendment or waiver shall make any change to Section 2.01(e)
or the definitions of "Swing Loan Commitment," "Swing Loan Maturity Date"
or "Swing Loans" or the Swing Loan Note without the consent of the Swing
Loan Lender;
(j) no amendment or waiver shall affect the rights or duties of the
Issuing Lender in its capacity as such or alter the obligation of any
Revolving Credit Lender pursuant to Section 2.03(e) or 2.03(f) without the
consent of the Issuing Lender;
(k) no consent of any Lender need be obtained to effect any
amendment of any Credit Document necessary to comply with Section 9.12 or
Section 9.20;
(l) no modification or waiver may be made to Section 2.10(a)(v) or
the timing of any prepayment required thereunder or to the definition of
"Excess Cash Flow" or any definition used therein (solely in the context
used therein but not in any other context) may be made without the consent
of the Supermajority Lenders;
(m) no amendment, modification, supplement or waiver may be made to
Section 9.28, the definition of "Tranche C Term Loan Escrow Maturity
Date", the Credit Facility Escrow Agreement or the Investor Escrow
Agreement without the consent of the Majority Lenders and the Majority
Tranche C Term Loan Lenders; and
(n) no amendment, modification, supplement or waiver may be made to
any condition precedent to any extension of credit under the Revolving
Credit Facility set forth in Section 7.02 or 7.03 without the written
consent of the Majority Revolving Credit Lenders, it being understood that
no amendment to or waiver of any representation or warranty or any
covenant contained in this Agreement or any other Credit Document, or of
any Default, shall be deemed to be effective for purposes of determining
whether the conditions precedent set forth in Section 7.02 or 7.03 to the
making of any extension of credit under the Revolving Credit Loans have
been satisfied unless the Majority Revolving Credit Lenders shall have
consented to such amendment or waiver.
(ii) If, in connection with any proposed change, waiver, discharge
or termination to any of the provisions of this Agreement as contemplated by
Section 12.04(i)(a) (other than clause (I) of such section), the consent of
the Majority Lenders is obtained but the consent of one or more of such other
Lenders whose consent is required is not obtained, then Borrower shall have
the right to replace each such non-consenting Lender or Lenders (so long as
all non-consenting Lenders are so replaced) with one or more Replacement
Lenders pursuant to Section 2.11 so long as at the time of such replacement
each such Replacement Lender consents to the proposed change, waiver,
discharge or termination; PROVIDED, HOWEVER, that Borrower shall not have the
right to replace a Lender solely as
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a result of the exercise of such Lender's rights (and the withholding of any
required consent by such Lender) pursuant to clause (I) of Section
12.04(i)(a).
12.05. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
12.06. ASSIGNMENTS AND PARTICIPATIONS. (a) No Obligor may assign
its respective rights or obligations hereunder or under the Notes or any
other Credit Document without the prior written consent of all of the Lenders.
(b) Each Lender may assign to any Eligible Person any of its
Loans, its Notes, its Letter of Credit Interests and its Commitments (but
only with the consent (which shall not be unreasonably withheld, delayed or
conditioned) of Borrower, the Lead Arranger and the Administrative Agent and,
in the case of the Revolving Credit Commitments, the Issuing Lender);
PROVIDED, HOWEVER, that (i) no such consent by Borrower, the Issuing Lender,
the Lead Arranger or the Administrative Agent shall be required in the case
of any assignment to another Lender or any Lender's Affiliate or an Approved
Fund of any Lender (in which case, the assignee and assignor Lenders shall
give notice of the assignment to the Lead Arranger and the Administrative
Agent); (ii) no consent of Borrower need be obtained if any Event of Default
shall have occurred and be continuing or if determined by the Lead Arranger
(in consultation with Borrower) to achieve a successful primary syndication;
(iii) each assignment, other than to a Lender or any Lender's Affiliate or an
Approved Fund of any Lender and other than any assignment effected by Merrill
Lynch Capital Corporation or any of its Affiliates in connection with the
syndication of the Commitments and/or Loans or otherwise, shall be in an
aggregate amount at least equal to $5.0 million unless the assigning Lender's
exposure is reduced to $0 or unless Borrower and the Lead Arranger otherwise
agree and (iv) in no event may any such assignment be made to any Obligor or
any of its Affiliates without consent of all Lenders. Any assignment of a
Loan shall be effective only upon appropriate entries with respect thereto
being made in the Register (and each Note shall expressly so provide). Any
assignment or transfer of a Loan shall be registered on the Register only
upon surrender for registration of assignment or transfer of the Note
evidencing such Loan (if a Note was issued in respect thereof), accompanied
by an instrument in writing substantially in the form of EXHIBIT H, and upon
consent thereto by Borrower, the Lead Arranger, the Administrative Agent and
the Issuing Lender to the extent required above (none of which consents to be
unreasonably withheld), one or more new Notes (if requested by the new
Lender) in the same aggregate principal amount shall be issued to the
designated assignee and the old Notes shall be returned by the Administrative
Agent to Borrower marked "cancelled". Upon execution and delivery by the
assignee to Borrower, the Lead Arranger and the Administrative Agent of an
instrument in writing substantially in the form of EXHIBIT H, and upon
consent thereto by Borrower, the Lead Arranger, the Administrative Agent and
the Issuing Lender to the extent required above (none of which consents to be
unreasonably withheld), and in the case of a Loan, upon appropriate entries
being made in the Register the assignee shall have, to the extent of such
assignment (unless otherwise provided in such assignment with the consent of
the Administrative Agent), the obligations, rights and benefits of a Lender
hereunder holding the Commitment(s), Loans (or portions thereof) and Letter
of Credit Interests assigned to it (in addition to the Commitment(s), Letter
of Credit Interests and Loans, if any, theretofore held by such assignee) and
the assigning Lender shall, to the extent of such assignment, be released
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from the Commitment(s) (or portion(s) thereof) so assigned. Upon any such
assignment (other than to a Lender or any Affiliate of a Lender or any
Approved Fund and other than any assignment by Merrill Lynch Capital
Corporation or any of its Affiliates) the assignee Lender shall pay a fee of
$3,500 to the Administrative Agent. Upon any such assignment, certain rights
and obligations of the assigning Lender shall survive as set forth in Section
12.07. Each assignment shall be made pursuant to an agreement substantially
in the form of EXHIBIT N. At the time of each assignment pursuant to this
Section 12.06(b) to any Eligible Person that is not already a Lender
hereunder, the respective assignee Lender shall provide to Borrower and the
Administrative Agent the appropriate Internal Revenue Service forms (and, if
applicable, a Section 5.06 Certificate) described in Section 5.06(b).
(c) A Lender may sell or agree to sell to one or more other
Eligible Persons a participation in all or any part of any Loans and Letter
of Credit Interests held by it, or in its Commitments, in which event each
purchaser of a participation (a "PARTICIPANT") shall be entitled to the
rights and benefits of the provisions of Section 5 (PROVIDED, HOWEVER, that
no Participant shall be entitled to receive any greater amount pursuant to
Section 5 than the transferor Lender would have been entitled to receive in
respect of the participation effected by such transferor Lender had no
participation occurred) with respect to its participation in such Loans,
Letter of Credit Interests and Commitments as if such Participant were a
"Lender" for purposes of said Section, but, except as otherwise provided in
Section 4.07(c), shall not have any other rights or benefits under this
Agreement or any Note or any other Credit Document (the Participant's rights
against such Lender in respect of such participation to be those set forth in
the agreements executed by such Lender in favor of the Participant). All
amounts payable by Borrower to any Lender under Section 5 in respect of
Loans, Letter of Credit Interests and its Commitments shall be no greater
than the amount that would have applied if such Lender had not sold or agreed
to sell any participation in such Loans, Letter of Credit Interests and
Commitments, and as if such Lender were funding each of such Loan, Letter of
Credit Interests and Commitments in the same way that it is funding the
portion of such Loan, Letter of Credit Interests and Commitments in which no
participations have been sold. In no event shall a Lender that sells a
participation agree with the Participant to take or refrain from taking any
action hereunder or under any other Credit Document, except that such Lender
may agree with the Participant that it will not, without the consent of the
Participant, agree to any modification or amendment set forth in subclauses
(I), (II), (III) or (VIII) of clause (a) of the proviso to Section 12.04.
(d) In addition to the assignments and participations permitted
under the foregoing provisions of this Section 12.06, any Lender may assign
and pledge all or any portion of its Loans and its Notes to any United States
Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any Operating Circular
issued by such Federal Reserve Bank and, in the case of a Lender that is an
investment fund, any such Lender may assign or pledge all or any portion of
its Loans and its Notes to its trustee in support of its obligations to its
trustee, without notice to or consent of Borrower, the Administrative Agent,
Lead Arranger or Issuing Lender. No such assignment shall release the
assigning Lender from its obligations hereunder.
(e) A Lender may furnish any information concerning any Company in
the possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants) subject, however, to and
so long as the recipient agrees in writing to be bound by the
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provisions of Section 12.11. In addition, each of the Administrative Agent
and Lead Arranger may furnish any information concerning any Obligor or any
of its Affiliates in the Administrative Agent's or Lead Arranger's possession
to any Affiliate of Administrative Agent or Lead Arranger, subject, however,
to the provisions of Section 12.11. The Obligors shall assist any Lender in
effectuating any assignment or participation pursuant to this Section 12.06
(including during syndication) in whatever manner such Lender reasonably
deems necessary, including participation in meetings with prospective
transferees.
12.07. SURVIVAL. The obligations of the Obligors under Sections
5.01, 5.05, 5.06 and 12.03, the obligations of each Guarantor under Section
6.03, and the obligations of the Lenders under Sections 5.06 and 11.02, shall
survive the repayment of the Loans and Reimbursement Obligations and the
termination of the Commitments and, in the case of any Lender that may assign
any interest in its Commitments, Loans or Letter of Credit Interest
hereunder, shall (to the extent relating to such time as it was a Lender)
survive the making of such assignment, notwithstanding that such assigning
Lender may cease to be a "Lender" hereunder. In addition, each
representation and warranty made, or deemed to be made by a notice of any
extension of credit, herein or pursuant hereto shall be considered to have
been relied upon by the other parties hereto and shall survive the execution
and delivery of this Agreement and the Notes and the making of any extension
of credit hereunder, regardless of any investigation made by any such other
party or on its behalf and notwithstanding that the Administrative Agent or
any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty and regardless of whether any such representation
or warranty under the Merger Agreement survives the Merger.
12.08. CAPTIONS. The table of contents and captions and section
headings appearing herein are included solely for convenience of reference
and are not intended to affect the interpretation of any provision of this
Agreement.
12.09. COUNTERPARTS; INTERPRETATION; EFFECTIVENESS. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract. This
Agreement and any separate letter agreements with respect to fees payable to
the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject
matter hereof, other than the indemnity, confidentiality, waiver of jury
trial and governing law provisions of the Commitment Letter, which are not
superseded and survive and except that if the initial extensions of credit do
not occur on the date of execution and delivery hereof the Fee Letter shall
survive until the earlier of the date of the initial extensions of credit
hereunder or the date of expiration or termination of the Commitments and any
ticking fee thereunder (if any) shall be payable up to such earlier date.
Except as provided in Section 7.01, this Agreement shall become effective
when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.
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12.10. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVERS; ETC.
Each Credit Document shall be governed by, and construed in accordance with,
the law of the State of New York, without regard to the principles of
conflicts of laws thereof (except in the case of the other Credit Documents,
to the extent otherwise expressly stated therein). Each Obligor hereby
irrevocably and unconditionally: (I) submits for itself and its Property in
any Proceeding relating to any Credit Document to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the Supreme Court of the State of New
York sitting in New York County, the courts of the United States of America
for the Southern District of New York, and appellate courts from any thereof;
(II) consents that any such Proceeding may be brought in any such court and
waives trial by jury and any objection that it may now or hereafter have to
the venue of any such Proceeding in any such court or that such Proceeding
was brought in an inconvenient court and agrees not to plead or claim the
same; (III) agrees that service of process in any such Proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to Borrower at its
address set forth in Section 12.02 or at such other address of which
Administrative Agent shall have been notified pursuant thereto; and (IV)
agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue
in any other jurisdiction.
12.11. CONFIDENTIALITY. Each Lender agrees to keep confidential
information obtained by it pursuant hereto and the other Credit Documents
confidential in accordance with such Lender's customary practices for
treatment of its confidential information and agrees that it will only use
such information in connection with the transactions contemplated by this
Agreement and not disclose any of such information other than (a) to such
Lender's employees, representatives, directors, attorneys, auditors, agents,
professional advisors, trustees or affiliates who are advised of the
confidential nature of such information or to any direct or indirect
contractual counterparty in swap agreements or such contractual
counterparty's professional advisor (so long as such contractual counterparty
or professional advisor to such contractual counterparty agrees to be bound
by the provision of this Section 12.11), (b) to the extent such information
presently is or hereafter becomes available to such Lender on a
non-confidential basis from any source of such information that is in the
public domain at the time of disclosure, (c) to the extent disclosure is
required by law (including applicable securities laws), regulation, subpoena
or judicial order or process (PROVIDED that notice of such requirement or
order shall be promptly furnished to Borrower unless such notice is legally
prohibited) or requested or required by bank, securities, insurance or
investment company regulations or auditors or any administrative body or
commission (including the Securities Valuation Office of the National
Association of Insurance Commissioners) to whose jurisdiction such Lender may
be subject, (d) to any rating agency to the extent required in connection
with any rating to be assigned to such Lender, (e) to assignees or
participants or prospective assignees or participants who agree to be bound
by the provisions of this Section 12.11, (f) to the extent required in
connection with any litigation between any Obligor and any Lender with
respect to the Loans or this Agreement and the other Credit Documents or (g)
with Borrower's prior written consent.
12.12. INDEPENDENCE OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
The representations, warranties and covenants contained herein shall be
independent of each other and no exception to any representation, warranty or
covenant shall be deemed to be an exception to any other represen-
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tation, warranty or covenant contained herein unless expressly provided, nor
shall any such exception be deemed to permit any action or omission that
would be in contravention of applicable law. Notwithstanding anything herein
to the contrary, any matter identified on a Schedule to this Agreement shall
be deemed to be set forth on all other Schedules to this Agreement for
purposes of determining compliance with any of the representations,
warranties or covenants contained herein.
12.13. SEVERABILITY. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Agreement.
12.14. ACKNOWLEDGMENTS. The Obligors hereby acknowledge that: (a)
this Agreement and the other Credit Documents are the result of negotiation
and each of the Obligors has been advised by counsel in connection with the
negotiation, execution and delivery of this Agreement and the other Credit
Documents; (b) no Creditor has any fiduciary or similar relationship to any
Obligor and the relationship between the Creditors on the one hand, and the
Obligors, on the other hand, is solely that of debtor and creditor; and (c)
no joint venture exists among the Creditors or among the Obligors and the
Creditors.
[Signature Pages Follow]
S-1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered as of the day and year first above written.
ATRIUM COMPANIES, INC.
By:
--------------------------------------
Name:
Title:
Address for Notices:
Contact Person:
Telecopier No.:
Telephone No.:
S-2
GUARANTORS:
ATRIUM CORPORATION
[ ]
By:
--------------------------------------
Name:
Title:
S-3
D AND W HOLDINGS, INC., as Parent
By:
--------------------------------------
Name:
Title:
S-4
BANKBOSTON, N.A.,
as Administrative Agent, Issuing Lender
and as a Lender
By:
--------------------------------------
Name:
Title:
Address for Notices:
BankBoston, N.A.
100 Federal Street
Mail Stop 01-08-05
Boston, Massachusetts 02110
Attention: Marie C. Duprey
Telecopier No.: 617-434-4929
Telephone No.: 617-434-3037
S-5
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED,
as Lead Arranger, Syndication Agent and
Documentation Agent
By:
--------------------------------------
Name:
Title:
Address for Notices:
World Financial Center
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
South Tower
225 Liberty Street
New York, New York 10080-6114
Attention:
Telecopier No.: (212) 449-8230
Telephone No.: (212) 449-8221
S-6
LENDERS
MERRILL LYNCH CAPITAL CORPORATION,
as a Lender
By:
--------------------------------------
Name:
Title:
Lending Office for all Loans:
World Financial Center
c/o Merrill Lynch & Co.
North Tower - 7th Floor
250 Vesey Street
New York, New York 10281-1307
Address for Notices:
World Financial Center
c/o Merrill Lynch & Co.
North Tower
250 Vesey Street
New York, New York 10281-1316
Attention: Peter Wersching
Telecopier No.: (212) 449-4972
Telephone No.: (212) 449-9435
S-7
[ ],
as a Lender
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
Lending Office for all Loans:
Address for Notices:
Attention:
Telecopier No.:
Telephone No.:
ANNEX A
COMMITMENTS
Allocation
-----------------------------------------------------------------
Revolving Tranche B Tranche C
Credit Term Loan Term Loan
Legal Name Commitments Commitment Commitment Total
- --------------------------------------------- ----------- -------------- -------------- ---------------
Merrill Lynch Capital Corporation $ 5,000,000 $16,456,790.16 $ 26,543,209.84 $ 48,000,000.00
BankBoston, N.A. 5,000,000 4,975,308.64 8,024,691.36 18,000,000.00
BHF-Bank Aktiengesellschaft 5,000,000 5,500,000.00 - 10,500,000.00
Balanced High-Yield Fund II Ltd 7,500,000.00 - 7,500,000.00
Greater Bay Corporate Finance, A Division of
Cupertino National Bank & Trust 3,000,000 2,679,012.35 4,320,987.65 10,000,000.00
Credit Lyonnais New York Branch 4,000,000 4,209,876.54 6,790,123.46 15,000,000.00
Heller Financial, Inc. 4,000,000 4,209,876.54 6,790,123.46 15,000,000.00
Bank One, Texas, NA 4,000,000 4,209,876.54 6,790,123.46 15,000,000.00
Massachusetts Mutual Life Insurance Company - 2,564,197.53 4,135,802.47 6,700,000.00
Massmutual High Yield Partners II, LLC 1,262,962.96 2,037,037.04 3,300,000.00
KZH Riverside LLC - 3,827,160.49 6,172,839.51 10,000,000.00
KZH ING-2 LLC - 4,592,592.59 7,407,407.41 12,000,000.00
Floating Rate Portfolio - 1,722,222.22 2,777,777.78 4,500,000.00
Medical Liability Mutual Insurance Company - 2,870,370.37 4,629,629.63 7,500,000.00
CypressTree Investment Fund, LLC - 574,074.07 925,925.93 1,500,000.00
CypressTree Institutional Fund, LLC - 574,074.07 925,925.93 1,500,000.00
KZH CypressTree - 1 LLC - 3,253,086.42 5,246,913.58 8,500,000.00
CypressTree Senior Floating Rate Fund - 95,679.01 154,320.99 250,000.00
North American Senior Floating Rate Fund - 95,679.01 154,320.99 250,000.00
Morgan Stanley Dean Witter Prime Income Trust - 3,827,160.49 6,172,839.51 10,000,000.00
----------- -------------- --------------- ---------------
Total $30,000,000 $75,000,000.00 $100,000,000.00 $205,000,000.00
SCHEDULE 1.01(a)
LIBOR Loans ABR Loans
----------- ---------
Revolving Credit Loans 2.250% 1.250%
Tranche B Term Loans 2.750% 1.750%
Tranche C Term Loans 3.000% 2.000%
SCHEDULE 1.01(b)
- ----------------------------------------------------------------------------------------
REVOLVING LOANS
- ----------------------------------------------------------------------------------------
TIER TOTAL LEVERAGE RATIO LIBOR MARGIN ABR MARGIN
- ----------------------------------------------------------------------------------------
I Greater than or equal to 4.0 2.250% 1.250%
- ----------------------------------------------------------------------------------------
II Less than 4.0 but
Greater than or equal to 3.5 2.000% 1.000%
- ----------------------------------------------------------------------------------------
III Less than 3.5 but
Greater than or equal to 3.0 1.750% 0.750%
- ----------------------------------------------------------------------------------------
IV Less than 3.0 but
Greater than or equal to 2.5 1.500% 0.500%
- ----------------------------------------------------------------------------------------
V Less than 2.5 but
Greater than or equal to 2.0 1.250% 0.250%
- ----------------------------------------------------------------------------------------
VII Less than 2.0 1.000% 0%
- ----------------------------------------------------------------------------------------
SCHEDULE 1.01(c)
Total Leverage Ratio Applicable Revolving Credit Fee Percentage
-------------------- ------------------------------------------
Greater than or equal to 3.5 0.500%
Less than 3.5 but
Greater than or equal to 2.0 0.375%
Less than 2.0 0.250%
SCHEDULE 1.01(d)
GUARANTORS
ATRIUM CORPORATION
Atrium Door and Window Company - West Coast
Atrium Door and Window Company of the Northeast
Atrium Door and Window Company of New York
Atrium Door and Window Company of Arizona
Atrium Door and Window Company of New England
Door Holdings, Inc.
R.L. Darby Company, Inc.
Total Trim, Inc.
Wing Industries Holdings, Inc.
Wing Industries, Inc.
SCHEDULE 3.01(b)
AMORTIZATION PAYMENTS
TRANCHE B TRANCHE C
DATE* TERM LOANS TERM LOANS
- --------------- ------------ ------------
December 1998 $ 250,000 $ 250,000
March 1999 250,000 250,000
June 1999 250,000 250,000
September 1999 250,000 250,000
December 1999 250,000 250,000
March 2000 250,000 250,000
June 2000 250,000 250,000
September 2000 250,000 250,000
December 2000 250,000 250,000
March 2001 250,000 250,000
June 2001 250,000 250,000
September 2001 250,000 250,000
December 2001 250,000 250,000
March 2002 250,000 250,000
June 2002 250,000 250,000
September 2002 250,000 250,000
December 2002 250,000 250,000
March 2003 250,000 250,000
June 2003 250,000 250,000
September 2003 250,000 250,000
December 2003 250,000 250,000
March 2004 250,000 250,000
June 2004 250,000 250,000
September 2004 250,000 250,000
December 2004 250,000 250,000
March 2005 250,000 250,000
June 2005 68,500,000 250,000
September 2005 N.A. 250,000
December 2005 N.A. 250,000
March 2006 N.A. 250,000
June 2006 N.A. 92,500,000
------------ ------------
$75,000,000 $100,000,000
------------ ------------
------------ ------------
- --------------------
*Unless otherwise indicated, such date is the last Business Day of the
specified month.