AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of November 20, 1998
and amended and restated as of February 11, 1999
Among
COMPASS AEROSPACE CORPORATION
as Borrower
the Lending Institutions listed on Schedule 1 hereto
as Lenders,
BANKBOSTON, N.A.,
as Agent,
ROYAL BANK OF CANADA,
as Syndication Agent,
GENERAL ELECTRIC CAPITAL CORPORATION,
as Documentation Agent,
NATIONSBANK, N.A.,
as Co-Agent
and
BANCBOSTON ROBERTSON STEPHENS INC.,
as Arranger
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Table of Contents
1. DEFINITIONS AND RULES OF INTERPRETATION................................ 2
1.1. Definitions........................................... 2
1.2. Rules of Interpretation............................... 43
2. AMOUNT AND TERMS OF CREDIT FACILITIES.................................. 44
2.1. The Commitments....................................... 44
2.2. Minimum Amount of Each Borrowing...................... 45
2.3. Requests for Loans; Conditions to Loans............... 45
2.4. Settlement; Failure to Make Funds Available........... 46
2.5. The Notes............................................. 51
2.6. Conversion and Continuation Options................... 52
2.7. Pro-Rata Borrowings................................... 53
2.8. Interest on the Loans................................. 53
2.9. Change in Borrowing Base.............................. 54
2.10. Inability to Determine Eurocurrency Rate.............. 55
2.11. Illegality............................................ 55
2.12. Additional Costs, etc................................. 56
2.13. Capital Adequacy...................................... 57
2.14. Change of Lending Office.............................. 57
2.15. Certificate........................................... 57
2.16. Indemnity............................................. 58
2.17. Replacement of Lenders................................ 58
2.18. Resignation of UK Fronting Lender..................... 60
2.19. Nature of Acquisition Loan Lenders' Interests in UK
Acquisition Loans..................................... 61
3. LETTERS OF CREDIT...................................................... 61
3.1. Letter of Credit Commitments.......................... 61
3.2. Reimbursement Obligation of Borrower.................. 62
3.3. Letter of Credit Payments............................. 63
3.4. Obligations Absolute.................................. 63
3.5. Reliance by Issuer.................................... 64
3.6. Existing Letters of Credit............................ 64
4. REDUCTION OF COMMITMENTS; PAYMENTS; PREPAYMENTS........................ 65
4.1. Reallocation and Voluntary Reduction of Unutilized
Commitments........................................... 65
4.2. Mandatory Reduction of Commitments.................... 66
4.3. Voluntary Prepayments of Loans........................ 67
4.4. Obligations Exceed Commitment or Borrowing Base....... 68
4.5. Scheduled Payments of Principal of Term Loans A....... 69
4.6. Scheduled Payments of Principal of Term Loans B....... 69
4.7. Scheduled Payments of Principal of Acquisition Loans
and UK Acquisition Loans.............................. 70
4.8. Revolving Credit Maturity Date........................ 70
4.9. Certain Mandatory Prepayments of Loans................ 71
4.10. Application of Mandatory Prepayments.................. 74
4.11. Change in Control..................................... 75
5. FEES; TAXES; ETC....................................................... 75
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5.1. Fees.................................................. 75
5.2. Funds for Payments.................................... 77
5.3. Computations.......................................... 78
5.4. Currency of Account................................... 78
5.5. Judgment Currency..................................... 79
6. COLLATERAL SECURITY AND GUARANTEE...................................... 79
6.1. Security of Borrower.................................. 79
6.2. Guarantee and Security of Guarantors.................. 80
6.3. Security for and Guarantee of UK Obligations.......... 80
7. GUARANTEE.............................................................. 80
7.1. Guarantee of Payment and Performance.................. 80
7.2. Guarantors' Agreement to Pay Enforcement Costs, etc... 81
7.3. Waivers by the Guarantors; Lenders' Freedom to Act.... 81
7.4. Unenforceability of Obligations Against Borrowers..... 82
7.5. Subrogation; Subordination............................ 82
7.6. Security; Setoff...................................... 83
7.7. Further Assurances.................................... 83
7.8. Termination........................................... 84
7.9. Successors and Assigns................................ 84
7.10. Limitation on Guarantee of Obligations................ 84
7.11. Contribution with Respect to Guarantee of
Obligations........................................... 84
8. REPRESENTATIONS AND WARRANTIES......................................... 85
8.1. Corporate Authority................................... 85
8.2. Approvals............................................. 86
8.3. Title to Properties; Leases........................... 86
8.4. Financial Statements and Projections.................. 86
8.5. No Material Changes; Solvency; Intellectual Property.. 88
8.6. Litigation............................................ 88
8.7. No Materially Adverse Contracts, etc.................. 88
8.8. Compliance with Other Instruments, Laws, etc.......... 88
8.9. Tax Status............................................ 88
8.10. No Event of Default................................... 89
8.11. Holding Company and Investment Company Acts........... 89
8.12. Absence of Financing Statements, etc.................. 89
8.13. Perfection of Security Interests...................... 89
8.14. Employee Benefit Plans................................ 90
8.15. Use of Proceeds....................................... 91
8.16. Environmental Compliance.............................. 91
8.17. Subsidiaries, etc..................................... 93
8.18. Bank Accounts......................................... 93
8.19. Chief Executive Office................................ 94
8.20. Fiscal Year........................................... 94
8.21. Accuracy and Completeness of Information.............. 94
8.22. Insurance............................................. 94
8.23. Senior Debt........................................... 94
8.24. Representations and Warranties in Ancillary
Documents............................................. 94
8.25. Material Contracts.................................... 95
8.26. Indebtedness.......................................... 95
8.27. Lamsco Acquisition.................................... 95
8.28. Year 2000 Problem..................................... 95
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9. AFFIRMATIVE COVENANTS.................................................. 95
9.1. Maintenance of Office................................. 95
9.2. Records and Accounts.................................. 96
9.3. Financial Statements, Certificates and Information.... 96
9.4. Annual Meetings With Lenders.......................... 98
9.5. Notices............................................... 98
9.6. Corporate Existence; Maintenance of Properties;
Performance of Obligations............................ 99
9.7. Insurance............................................. 100
9.8. Taxes................................................. 100
9.9. Inspection of Properties and Books, etc............... 100
9.10. Compliance with Laws, Contracts, Licenses, and
Permits............................................... 101
9.11. Use of Proceeds....................................... 102
9.12. Cash Management System. The Borrower will at all
times maintain the Concentration Account ............. 102
9.13. Inventory Restrictions................................ 103
9.14. Mortgaged Properties.................................. 103
9.15. Ownership of Subsidiaries............................. 103
9.16. Collateral for Loans.................................. 103
9.17. Permitted Acquisitions................................ 104
9.18. Interest Rate Protection.............................. 105
9.19. UCC Searches.......................................... 105
9.20. Employee Benefit Plans................................ 106
9.21. Further Assurances.................................... 106
10. NEGATIVE COVENANTS.................................................... 106
10.1. Indebtedness.......................................... 106
10.2. Liens................................................. 108
10.3. Investments........................................... 109
10.4. Distributions and Restricted Payments................. 110
10.5. Mergers, Consolidations and Acquisitions.............. 112
10.6. Disposition of Assets................................. 112
10.7. Issuance of Capital Stock............................. 112
10.8. Sale and Leaseback.................................... 113
10.9. Compliance with Environmental Laws.................... 113
10.10. Employee Benefit Plans................................ 113
10.11. Transactions with Affiliates.......................... 114
10.12. Restrictive or Inconsistent Agreements................ 114
10.13. Amendments or Termination of Documents, etc........... 115
10.14. Bank Accounts......................................... 115
10.15. Fiscal Year........................................... 115
10.16. Line of Business...................................... 115
11. FINANCIAL COVENANTS................................................... 115
11.1. Maximum Leverage Ratio................................ 115
11.2. Minimum Consolidated EBITDA........................... 116
11.3. Minimum Interest Coverage Ratio....................... 116
11.4. Minimum Debt Service Coverage Ratio................... 116
11.5. Maximum Capital Expenditures.......................... 116
11.6. General Provisions Relating to Financial Terms and
Covenants............................................. 117
11.7. Computations of Financial Covenants During First
Year of Credit Facilities............................. 118
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12. CLOSING CONDITIONS.................................................... 119
12.1. Loan Documents, etc................................... 119
12.1.1. Loan Documents............................. 119
12.1.2. Senior Subordinated Note Documents......... 119
12.1.3. Acquisition Documents...................... 119
12.1.4. Equity Documents........................... 119
12.1.5. Management Consulting Agreement............ 120
12.1.6. Permitted Disqualified Capital Stock
Documents.................................. 120
12.2. Completion of Acquisition............................. 120
12.3. Certified Copies of Charter Documents................. 120
12.4. Corporate Action...................................... 120
12.5. Incumbency Certificate................................ 120
12.6. Plans; Shareholders' Agreements; Management
Agreements; Employee Agreements; Collective
Bargaining Agreements; Debt Agreements; Affiliate
Contracts; Tax Sharing Agreements and Other
Material Contracts.................................... 121
12.7. Validity of Liens..................................... 122
12.8. Perfection Certificates and UCC Search Results........ 122
12.9. Intentionally Omitted................................. 122
12.10. Certificates of Insurance............................. 122
12.11. Borrowing Base Report................................. 122
12.12. Accounts Receivables Aging Report..................... 122
12.13. Landlord Waivers...................................... 123
12.14. Solvency Certificate.................................. 123
12.15. Opinion of Counsel.................................... 123
12.16. Payment of Fees....................................... 123
12.17. Updated Collateral Examinations....................... 123
12.18. Satisfactory Due Diligence Review..................... 124
12.19. Litigation............................................ 124
12.20. Material Adverse Effect............................... 124
12.21. Borrowing Availability................................ 124
12.22. Financial Statements and Projections.................. 124
12.23. Refinancings.......................................... 124
12.24. Cash Management System................................ 124
12.25. Disbursement Instructions............................. 125
12.26. Consolidated Total Funded Debt to Consolidated
EBITDA................................................ 125
12.27. Deposits with DLJ Capital Funding, Inc................ 125
12.28. Sources and Uses Statement............................ 125
13. CONDITIONS TO ALL BORROWINGS.......................................... 125
13.1. Representations True; No Default or Event of
Default............................................... 125
13.2. No Legal Impediment................................... 125
13.3. Governmental Regulation............................... 125
13.4. Proceedings and Documents............................. 126
13.5. Borrowing Base Report................................. 126
13.6. Borrowing Availability................................ 126
13.7. Senior Debt........................................... 126
13.8. Permitted Acquisitions................................ 126
14. EVENTS OF DEFAULT; ACCELERATION; ETC.................................. 127
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14.1. Events of Default and Acceleration.................... 127
14.2. Termination of Commitments............................ 130
14.3. Remedies.............................................. 131
14.4. Distribution of UK Collateral Proceeds................ 131
14.5. Distribution of Other Collateral Proceeds............. 132
15. THE AGENT............................................................. 132
15.1. Authorization......................................... 132
15.2. Employees and Agents.................................. 133
15.3. No Liability.......................................... 133
15.4. No Representations.................................... 134
15.5. Payments.............................................. 134
15.6. Holders of Notes...................................... 135
15.7. Indemnity............................................. 135
15.8. Agent as Lender....................................... 135
15.9. Resignation........................................... 135
15.10. Notification of Defaults and Events of Default........ 136
15.11. Duties in the Case of Enforcement..................... 136
16. ASSIGNMENT AND PARTICIPATION.......................................... 136
16.1. Conditions to Assignment by Lenders................... 136
16.2. Certain Representations and Warranties;
Limitations; Covenants................................ 137
16.3. Register.............................................. 138
16.4. New Notes............................................. 138
16.5. Participations........................................ 138
16.6. Disclosure............................................ 139
16.7. Assignee or Participant Affiliated with Borrower...... 139
16.8. Miscellaneous Assignment Provisions................... 140
16.9. Assignment by Borrower or Guarantor................... 140
17. PROVISIONS OF GENERAL APPLICATION..................................... 140
17.1. Setoff................................................ 140
17.2. Expenses.............................................. 141
17.3. Indemnification....................................... 142
17.4. Survival of Covenants, Etc............................ 142
17.5. Notices, Etc.......................................... 143
17.6. Governing Law......................................... 143
17.7. Headings.............................................. 143
17.8. Counterparts.......................................... 143
17.9. Entire Agreement, Etc................................. 144
17.10. Waiver of Jury Trial.................................. 144
17.11. Consents, Amendments, Waivers, Etc.................... 144
17.12. Severability.......................................... 147
17.13. Understanding as to Revolving Credit Commitments
and Acquisition Loan Commitment Period................ 147
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Schedules and Exhibits
Schedule 1 Commitments; Banks' Offices
Schedule 1.1 Mandatory Liquid Asset Costs
Schedule 1.2 Applicable Margins
Schedule 2 Permitted Inventory Locations
Schedule 8.3 Title to Properties; Leases
Schedule 8.5 Distributions since Balance Sheet Date
Schedule 8.6 Litigation
Schedule 8.7 Material Adverse Contracts
Schedule 8.8 Compliance with Law
Schedule 8.9 Taxes
Schedule 8.13 Real Estate
Schedule 8.16 Environmental
Schedule 8.17 Subsidiaries
Schedule 8.18 Bank Accounts
Schedule 8.19 Chief Executive Offices
Schedule 8.22 Insurance
Schedule 8.25 Material Contracts
Schedule 8.26 Existing Indebtedness
Schedule 10.1 Permitted Existing Indebtedness
Schedule 10.2 Permitted Existing Liens
Schedule 10.3 Permitted Existing Investments
Exhibit A-1 Form of Revolving Credit Note
Exhibit A-2 Form of Term A Note
Exhibit A-3 Form of Term B Note
Exhibit A-4 Form of Acquisition Note
Exhibit B-1 Form of US Loan Request
Exhibit B-2 Form of UK Loan Request
Exhibit C Form of Borrowing Base Report
Exhibit D Form of Compliance Certificate
Exhibit E Form of Security Agreement
Exhibit F Form of Stock Pledge Agreement
Exhibit G Form of Assignment and Acceptance
Exhibit H Form of Agency Account Agreement
Exhibit I Form of Accession Agreement
Exhibit J Form of Commitment Reallocation Request
Exhibit K Form of UK Borrower Accession Agreement
AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is made as of November 20,
1998, and restated as of February 11, 1999, by and among (a) COMPASS AEROSPACE
CORPORATION, a Delaware corporation (the "Borrower"), (b) AEROMIL ENGINEERING
COMPANY, a Delaware corporation ("Aeromil"), (c) WESTERN METHODS MACHINERY
CORPORATION, a California corporation ("Western Methods"), (d) BARNES MACHINE
INCORPORATED, a Washington corporation ("Barnes"), (e) BRITTAIN MACHINE, INC. a
Kansas corporation ("Brittain"), (f) WICHITA MANUFACTURING, INC., a California
corporation ("Wichita"), (g) J&J LEASING, INC. a Washington corporation ("J&J"),
(h) SEA-LECT PRODUCTS, INC., a Delaware corporation ("Sea-Lect"), (i) CWE
ACQUISITION CO., a Delaware corporation ("CWE"), (j) LAMSCO WEST, INC., a
California corporation ("Lamsco"), (k) MODERN MANUFACTURING, INC., a Delaware
corporation ("Modern Manufacturing" and, together with Aeromil, Western Methods,
Barnes, Brittain, Wichita, J&J, Sea-Lect, CWE, Lamsco, and any other
Subsidiaries of the Borrower that may become parties hereto as Guarantors
hereunder, the "Guarantors"), (l) the Lenders (as defined in ss.1 below), (m)
BANKBOSTON, N.A. as Issuing Bank and as Agent (as such terms are defined in ss.1
below), (n) ROYAL BANK OF CANADA, as Syndication Agent (as defined in ss.1
below), (o) GENERAL ELECTRIC CAPITAL CORPORATION, as Documentation Agent (as
defined in ss.1 below), and (p) NATIONSBANK, N.A., as Co-Agent (as defined in
ss.1 below).
RECITALS
The Borrowers, the Guarantors, BankBoston, N.A. (the "Existing Lender"),
and the Agent are party to a Credit Agreement, dated as of November 20, 1998 (as
amended and supplemented, through the date hereof, the "Existing Credit
Agreement"), pursuant to which the Existing Lender made Loans to and issued
Letters of Credit for the account of the Borrower (the "Existing Credit
Extensions").
The Borrower has requested the Existing Lender and the Agent to amend and
restate the Existing Credit Agreement in its entirety to, among other things,
(a) reduce the Total Term Loan A Commitment to $35,000,000;
(b) reduce the Total Term Loan B Commitment to $45,000,000;
(c) increase the Total Acquisition Commitment to $65,000,000;
(d) revise certain of the financial covenants set forth in ss.11 of
the Existing Credit Agreement in connection with the Modern Acquisition;
and
(e) make certain other changes to the terms and provisions of the
Existing Credit Agreement.
The Existing Lender and the Agent are willing, on the terms set forth in
this Agreement and subject to the conditions and in reliance on the
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representations set forth herein, to amend and restate in its entirety the
Existing Credit Agreement so as to accomplish the foregoing.
Each of the Borrower, the Lenders, the Issuing Bank and the Agent
acknowledges and agrees that (a) all Loans made and Letters of Credit issued
under the Existing Credit Agreement shall continue as Loans and Letters of
Credit under this Agreement, as provided in Sections 2.1 and 3.6, and shall be
governed by this Agreement and secured by all the Collateral, (b) all other
outstanding Obligations under the Existing Credit Agreement shall continue as
Obligations of the same type under this Agreement and shall be governed by this
Agreement and secured by all the Collateral, (c) the security interests granted
to the Agent, on behalf of itself, the Issuing Bank and the Lenders pursuant to
the Loan Documents (as defined in the Existing Credit Agreement), shall remain
outstanding and in full force and effect and shall continue to secure the
Obligations (as defined herein), and (d) all Liens (as defined under the
Existing Credit Agreement) evidenced by the Loan Documents (as defined in the
Existing Credit Agreement) are hereby ratified, confirmed and continued.
Accordingly, in consideration of the premises and the mutual agreements
herein contained, the parties hereto hereby agree that, from and after the
Restatement Effective Date, the Existing Credit Agreement (including all the
Schedules and Exhibits thereto) is amended and restated in its entirety to read
as set forth above and as follows (and, in the case of the Schedules and
Exhibits, in the forms attached hereto).
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. Definitions. The following terms shall have the meanings set forth in
this ss.1 or elsewhere in the provisions of this Agreement referred to below:
Accounts Receivable. All rights of the Borrower or any of its Subsidiaries
to payment for goods sold, leased or otherwise marketed in the ordinary course
of business and all rights of the Borrower or any of its Subsidiaries to payment
for services rendered in the ordinary course of business and all sums of money
or other proceeds due thereon pursuant to transactions with account debtors,
except for that portion of the sum of money or other proceeds due thereon that
relate to sales, use or property taxes in conjunction with such transactions,
recorded on books of account in accordance with GAAP.
Acquisition. Any transaction, or any series of related transactions,
consummated prior to or after the Original Closing Date, in which the Borrower
or any Subsidiary of the Borrower (in one transaction or as the most recent
transaction in a series of transactions) (a) acquires any business or all or
substantially all of the assets of any Person or any division or business unit
thereof, whether through purchase of assets, merger or otherwise, (b) directly
or indirectly acquires control of at least a majority (in number of votes) of
the Securities of a corporation which have ordinary voting power for the
election of directors or (c) directly or indirectly acquires control of a
majority ownership in any partnership or joint venture.
Acquisition Commitment Fee. See ss.5.1(c)(i).
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Acquisition Documents. Each of the Aeromil Acquisition Documents, the
Western Methods Acquisition Documents, the Barnes Acquisition Documents, the
Brittain Acquisition Documents, the J&J Acquisition Documents, the Sea-Lect
Acquisition Documents, the Lamsco Acquisition Documents, the Modern Acquisition
Documents and all other agreements, documents and instruments executed and/or
delivered in connection with any Acquisition.
Acquisition Loan Commitment. With respect to a Lender, the commitment of
such Lender to make Acquisition Loans to the Borrower hereunder in the amount
set forth on Schedule 1 hereto, as the same may be reduced from time to time;
or, after the Acquisition Loan Commitment Period or if such commitment is
terminated, zero.
Acquisition Loan Commitment Percentage. With respect to each Lender with
an Acquisition Loan Commitment, the percentage of such Lender's Acquisition Loan
Commitment to the Total Acquisition Loan Commitment or, after the termination of
the Acquisition Loan Commitments, the percentage of such Lender's outstanding
Acquisition Loans to the aggregate outstanding Acquisition Loans.
Acquisition Loan Commitment Period. The period from the Original Closing
Date through to the earlier to occur of (a) November 17, 2000 and (b) the
termination of the Total Acquisition Commitment.
Acquisition Loan Lenders. Lenders with Acquisition Loan Commitments or UK
Acquisition Loan Commitments or, after the termination of the Acquisition Loan
Commitment Period, Lenders with outstanding Acquisition Loans and/or UK
Acquisition Loans.
Acquisition Loan Maturity Date. November 19, 2003.
Acquisition Loan Percentage. With respect to each Lender holding an
Acquisition Loan after the termination of the Acquisition Loan Commitments, the
percentage of such Lender's Acquisition Loans to the aggregate principal amount
of all Term Loans, Acquisition Loans and UK Acquisition Loans outstanding at
such time.
Acquisition Loans. Loans made or to be made by the Lenders with an
Acquisition Loan Commitment to the Borrower pursuant to ss.2.1(d)(i).
Acquisition Note. See ss.2.5.
Acquisition Note Record. A Record with respect to an Acquisition Note.
Additional Acquisition Loans. See ss.2.1(d).
Aeromil. Aeromil Engineering Company, a Delaware corporation, formerly
known as "AOM Acquisition Co."
Aeromil Acquisition. The acquisition by the Borrower of all of the assets
of Aeromil pursuant to the Aeromil Acquisition Documents.
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Aeromil Acquisition Agreement. The Asset Purchase Agreement, dated as of
November 24, 1997, by and among Doy B. Henley and Delores J. Henley,
individually and as trustees of the Henley Family Trust and AOM Acquisition.
Aeromil Acquisition Documents. The Aeromil Acquisition Agreement, and all
other agreements and documents relating to the Aeromil Acquisition.
Affiliate. With respect to any Person (a) any other Person which directly
or indirectly controls, is controlled by, or is under common control with, such
Person, or (b) any other Person who is a Relative, director, officer, or general
partner of such Person or of any Person described in clause (a). For purposes of
this definition, control of a Person shall include the power, whether direct or
indirect, (i) to vote five percent (5%) or more of the equity securities having
ordinary voting power for the election of directors or other managers of such
Person or (ii) to direct or to cause the direction of the management and
policies of such Person, whether by contract or otherwise.
Affiliate Contracts. See ss.12.6.
Agency Account Institutions. Any financial institutions which receive
deposits directly or indirectly (as a result of interim concentration of funds
in depository accounts) from the Borrower or any Domestic Subsidiary of the
Borrower.
Agency Account Agreements. The Agency Account Agreements, in the form of
Exhibit H hereto (or a form otherwise approved by the Agent in its sole
discretion), entered into by the Borrower or a Domestic Subsidiary of the
Borrower, the Agent and an Agency Account Institution.
Agency Accounts. The depository accounts maintained by the Borrower and
each Domestic Subsidiary of the Borrower with the Agency Account Institutions.
Agent. BankBoston, N.A. acting as administrative and collateral agent for
the Lenders, and any successor Agent appointed pursuant to ss.15.9.
Agents. Collectively, the Agent, the Co-Agent, the Documentation Agent and
the Syndication Agent.
Agent's Head Office. The Agent's head office located at 100 Federal
Street, Boston, Massachusetts 02110, or at such other location as the Agent may
designate from time to time.
Agent's Special Counsel. Bingham Dana LLP or such other counsel as may be
approved by the Agent.
Agreement. This Amended and Restated Credit Agreement, including the
Schedules and Exhibits hereto.
Allocable Amount. See ss.7.11(b).
Amendment Agreement. The Amendment Agreement, dated as of February 11,
1999, among the parties to the Existing Credit Agreement.
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Ancillary Documents. Collectively, (i) the Subordinated Debt Documents,
(ii) the Equity Documents, (iii) the Acquisition Documents, (iv) the Management
Consulting Agreement, (v) Permitted Disqualified Capital Stock Documents, and
(vi) any other Instruments designated by the Borrower and the Agent as an
"Ancillary Document" for purposes of this Agreement.
AOM Acquisition. AOM Acquisition Co., a Delaware corporation, now known as
Aeromil Engineering Company.
Applicable Currency. As to any particular payment or the making of any
Loan, the applicable currency, consisting of Dollars or Sterling, in which it is
denominated.
Applicable Law. As to any Person, any law (including common law), treaty,
rule or regulation, or any determination of any 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.
Applicable Margin. With respect to any Loan or Commitment Fees, the
applicable percentage set forth on Schedule 1.2 hereto opposite the Leverage
Ratio set forth therein as of the relevant date of determination; provided,
however, that for the period commencing on the Original Closing Date and ending
on the date the Lenders receive the financial statements and certificates
required under ss.9.3(b) and (d) for the fiscal quarter ended June 30, 1999, the
Applicable Margin shall be as set forth opposite Level I on Schedule 1.2.
Each change in the Applicable Margin resulting from a change in the
Leverage Ratio shall be effective with respect to all Loans, Commitments and
Letters of Credit outstanding on and after the date of delivery to the Agent of
the Compliance Certificate required by ss.9.3(d) (which shall include attached
thereto the financial statements and certificates required by ss.9.3(a) or (b))
indicating such change until the date immediately preceding the next delivery of
such Compliance Certificate indicating another such change. Notwithstanding the
foregoing, (i) at any time during which the Borrower has failed to timely
deliver such Compliance Certificate required by ss.9.3(d) and the financial
statements and certificates required by ss.9.3(a) or (b), or (ii) at any time
after the occurrence and during the continuance of an Event of Default, the
Leverage Ratio shall be deemed to be in Level I for purposes of determining the
Applicable Margin.
Applicable Reference Bank. With respect to any determination of the
Eurocurrency Rate applicable to (a) any portions of any UK Acquisition Loans
which are Eurocurrency Rate Loans, the UK Fronting Lender, and (b) any portions
of any other Loans which are Eurocurrency Rate Loans, BankBoston and any other
Lender identified by the Agent as a reference bank hereunder.
Approval. With respect to any Transaction Party, each and every approval,
consent, filing or registration by or with any Governmental Authority, or any
creditor or shareholder of such Transaction Party or any of its Subsidiaries,
necessary to authorize or permit the execution, delivery and performance by such
Transaction Party of any of the Loan Documents to which
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it is a party, and to ensure the validity and enforceability of such Loan
Documents.
Arranger. BancBoston Robertson Stephens Inc., a Massachusetts corporation.
Assignment and Acceptance. See ss.16.1.
Balance Sheet Date. December 31, 1997.
BankBoston. BankBoston, N.A., a national banking association, in its
individual capacity.
Barnes. Barnes Machine Incorporated, a Washington corporation.
Barnes Acquisition. The acquisition by the Borrower of all of the Capital
Stock of Barnes pursuant to the Barnes Acquisition Documents.
Barnes Acquisition Agreement. The Stock Purchase Agreement, dated as of
January 19, 1998, by and among Barnes, Robert E. Barnes and J. Joy Barnes and
Compass LLC.
Barnes Acquisition Documents. The Barnes Acquisition Agreement, and all
other agreements and documents relating to the Barnes Acquisition.
Base Rate. The higher of (a) the annual rate of interest announced from
time to time by BankBoston at its head office in Boston, Massachusetts, as its
"base rate" and (b) one-half of one percent (1/2%) above the Federal Funds
Effective Rate. For the purposes of this definition, "Federal Funds Effective
Rate" shall mean, for any day, the rate per annum equal to the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by the Agent.
Base Rate A Loans. All or any portion of any Revolving Credit Loans,
Acquisition Loans or Term Loans A bearing interest calculated by reference to
the Base Rate.
Base Rate B Loans. All or any portion of Term Loans B bearing interest
calculated by reference to the Base Rate.
Base Rate Loans. The Base Rate A Loans and Base Rate B Loans.
Boeing. Boeing Company.
Borrower. As defined in the preamble hereto.
Borrowers. The Borrower and the UK Borrower.
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Borrowing Base. At the time of reference thereto, an amount determined by
the Agent by reference to the most recent Borrowing Base Report, which is equal
to the sum of:
(a) 85.00% of Eligible Accounts Receivable of all US Transaction
Parties for which invoices have been issued and are payable; plus
(b) 50.00% of the net book value (determined on a first-in first-out
basis at lower of cost or market) of Eligible Inventory of all US
Transaction Parties; plus
(c) 25.00% of the orderly liquidation value (as determined by the
most recent appraisal performed by or for the Agent) of Eligible Machinery
and Equipment of all US Transaction Parties; minus
(d) Reserves.
No assets (i) of Modern Manufacturing or (ii) which are acquired in an
Acquisition after the Restatement Effective Date (including after-acquired
property of the type acquired in any such Acquisition) shall be included in the
Borrowing Base unless and until a commercial finance examination acceptable to
the Agent has been delivered to the Agent and the Agent has made such
adjustments to Reserves as the Agent determines appropriate in its reasonable
discretion.
Borrowing Base Report. A Borrowing Base Report signed by the chief
financial officer of the Borrower and in substantially the form of Exhibit C
hereto.
Brittain. Brittain Machine, Inc., a Kansas corporation.
Brittain Acquisition. The acquisition by the Borrower of all of the
Capital Stock of Brittain pursuant to the Brittain Acquisition Documents.
Brittain Acquisition Agreement. The Stock Purchase Agreement, dated as of
March 7, 1998, by and among Brittain, the stockholders named therein, and
Compass LLC.
Brittain Acquisition Documents. The Brittain Acquisition Agreement, and
all other agreements and documents relating to the Brittain Acquisition.
Business Day. Any day on which banking institutions in Boston,
Massachusetts and New York, New York (or, in the case of any UK Acquisition
Loan, London, England), are open for the transaction of banking business and, in
the case of Eurocurrency Rate Loans, also a day which is a Eurocurrency Business
Day.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of less than twelve (12) months in accordance with GAAP.
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Capital Expenditures. Amounts paid or indebtedness incurred by any Person
or any of its Subsidiaries in connection with the purchase or lease by any such
Person or any of its Subsidiaries of Capital Assets that would be required to be
capitalized and shown on the balance sheet of such Person in accordance with
GAAP.
Capital Stock. Any shares, interests, participations, rights or other
equivalents (howsoever designated) of capital stock or share capital of a
corporation (including common or preferred stock) or any equivalent ownership
interests in a Person other than a corporation (including any equivalent
ownership interests in any entity organized under the laws of any applicable
foreign jurisdiction).
Capitalized Leases. Leases under which a Person or any of its Subsidiaries
is the lessee or obligor, the discounted future rental payment obligations under
which are required to be capitalized on the balance sheet of the lessee or
obligor in accordance with GAAP.
Cash Equivalents. Any of the following:
(a) marketable obligations issued or unconditionally guaranteed by
the government of the United States, in each case maturing within 270 days
after the date of acquisition thereof;
(b) marketable direct obligations issued by any state of the United
States or any political subdivision of any such state maturing within 270
days after the date of acquisition thereof and, at the time of
acquisition, is rated "A-2" or better from Standard & Poor's and "P-2" or
better by Moody's;
(c) commercial paper maturing no more than 270 days after the date
of acquisition thereof, issued by a corporation organized under the laws
of any state of the United States or of the District of Columbia and, at
the time of acquisition, is rated "A-2" or better from Standard & Poor's
and "P-2" or better by Moody's;
(d) money market funds whose investments are made solely in
securities described in clause (a) of this definition maturing within one
(1) year after the date of acquisition thereof;
(e) time or demand deposits or certificates of deposit maturing
within ninety (90) days after the date of acquisition thereof, or
overnight bank deposits of any commercial bank that is either (i) a member
of the Federal Reserve System that has capital and surplus (as shown on
its most recent statement of condition) in excess of $100,000,000 and is
rated "A" or better by Moody's or Standard & Poor's or (ii) a Lender
(including any domestic or foreign branch of any Lender);
(f) BankBoston's 1784 money market fund and in other overnight
investments customarily provided by BankBoston to its corporate customers;
and
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(g) other short-term investments utilized by UK Subsidiaries in
accordance with normal investment practices for cash management purposes
not exceeding at any time the Dollar Equivalent of $1,000,000 in aggregate
outstanding principal amount.
CERCLA. See ss.8.16.
Change of Control.
(a) Prior to consummation of the Borrower's Initial Public Equity
Offering Excluded Persons shall cease to own beneficially and of record at
least fifty-one percent (51%) of the total voting power in the aggregate
of all classes of Capital Stock of the Borrower then outstanding normally
entitled to vote in elections of directors; or
(b) on or following the consummation of the Borrower's Initial
Public Equity Offering (i) any merger or consolidation of the Borrower
with or into any person or any sale, transfer or other conveyance, whether
direct or indirect, of all or substantially all of the assets of the
Borrower and its Subsidiaries, on a consolidated basis, in one transaction
or a series of related transactions, if, immediately after giving effect
to such transaction(s), any "person" or "group" (as such terms are used
for purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or
not applicable) (other than any of the Excluded Persons) (A) is or becomes
the "beneficial owner," directly or indirectly, of more than thirty-five
percent (35%) of the total voting power in the aggregate normally entitled
to vote in the election of directors, managers, or trustees, as
applicable, of the transferee(s) or surviving entity or entities, and (B)
any such person or group becomes, directly or indirectly, the beneficial
owner of a greater percentage of such total voting power than beneficially
owned by the Excluded Persons, (ii) any "person" or "group" (as such terms
are used for purposes of Sections 13(d) and 14(d) of the Exchange Act,
whether or not applicable) (other than any of the Excluded Persons) (A) is
or becomes the "beneficial owner," directly or indirectly, of more than
thirty-five percent (35%) of the total voting power in the aggregate of
all classes of Capital Stock of the Borrower then outstanding normally
entitled to vote in elections of directors, and (B) any such person or
group becomes, directly or indirectly, the beneficial owner of a greater
percentage of such total voting power, than beneficially owned by the
Excluded Persons, or (iii) during any period of twelve (12) consecutive
months after the Original Closing Date, individuals who at the beginning
of any such twelve (12) month period constituted the Board of Directors of
the Borrower (together with any new directors whose election by such Board
of Directors or whose nomination for election by the shareholders of the
Borrower, as applicable, was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning
of such period or whose election or nomination for elections was
previously so approved) cease for any reason to constitute a majority of
the Board of Directors of the Borrower, as applicable, then in office.
Closing Date. The first date on which the conditions set forth in ss.12
and ss.13 have been satisfied and any Revolving Credit Loans, any Term Loans,
any Acquisition Loans or any UK Acquisition Loans are to be made or any Letter
of Credit is to be issued hereunder.
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Co-Agent. NationsBank, N.A. acting as co-agent for the Lenders
Code. The Internal Revenue Code of 1986.
Collateral. All of the property, rights and interests of the Borrower and
its Subsidiaries that are or are intended to be subject to the security
interests, liens and mortgages created by the Security Documents.
Collective Bargaining Agreements. See ss.12.6.
Commitment. With respect to each Lender, such Lender's Term Loan A
Commitment, Term Loan B Commitment, Acquisition Loan Commitment, UK Acquisition
Loan Commitment, and Revolving Credit Commitment, if any.
Commitment Fees. The Acquisition Commitment Fee, the UK Acquisition
Commitment Fee and the Revolving Credit Commitment Fee.
Commitment Letter. The Commitment Letter agreement, dated as of November
18, 1998, between the Borrower, the Agent and the Arranger.
Commitment Percentage. With respect to each Lender, such Lender's Term
Loan A Commitment Percentage, Term Loan B Commitment Percentage, Acquisition
Loan Commitment Percentage, UK Acquisition Loan Commitment Percentage, and
Revolving Credit Commitment Percentage, if any.
Commitment Reallocation Date. See ss.4.1(e).
Commitment Reallocation Request. See ss.4.1(e).
Compliance Certificate. See ss.9.3(d).
Concentration Account. The Borrower's depository concentration account
with BankBoston.
Confidential Information. See ss.16.6.
Confidential Information Memorandum. The Confidential Information
Memorandum, dated as of January, 1999, disclosing the terms and conditions of
this Agreement.
Consolidated or consolidated. With reference to any term defined herein,
shall mean that term as applied to the accounts of a Person and its
Subsidiaries, consolidated in accordance with GAAP.
Consolidated Current Assets. With respect to any Person at any date of
determination, the total assets that would properly be classified as current
assets (other than cash and cash equivalents) of such Person and its
Subsidiaries as of such date, determined on a consolidated basis in accordance
with GAAP.
Consolidated Current Liabilities. With respect to any Person at any date
of determination, the total liabilities (other than, without duplication, (a)
the current portion of long-term Indebtedness and (b) outstanding Revolving
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Credit Loans) that would properly be classified as current liabilities of any
Person and its Subsidiaries as of such date, determined on a consolidated basis
in accordance with GAAP.
Consolidated Debt Service. With respect to any Person for any period, the
sum, without duplication, of (a) Consolidated Total Interest Expense for such
period, and (b) the scheduled amount of all principal payments on all
Indebtedness (including, without limitation, the principal component of all
Capitalized Lease Obligations) of such Person and its Subsidiaries for such
period.
Consolidated EBITDA. With respect to any Person for any period (subject to
any adjustments required by ss.11.6 and determined on a consolidated basis in
accordance with GAAP), Consolidated Net Income of such Person and its
Subsidiaries for such period plus (a) to the extent deducted in determining
Consolidated Net Income, the sum of interest, taxes, depreciation and
amortization of such Person and its Subsidiaries for such period on a
consolidated basis, all determined in accordance with GAAP, plus (b) all
non-cash charges of such Person for such period arising from the vesting of
stock options granted by such Person or as a result of the effect of an initial
public offering of Capital Stock of such Person on stock options granted by such
Person.
Consolidated Excess Cash Flow. With respect to the Borrower and its
Subsidiaries for any period:
Consolidated EBITDA for such period; plus
(b) the sum of (i) reductions to non-cash working capital for such period
(i.e., the decrease, if any, in Consolidated Current Assets minus Consolidated
Current Liabilities from the beginning to the end of such period); provided that
such working capital as of the first day of such period shall be determined on a
pro forma basis adjusted to give effect (as if such event had occurred on the
first day of such period) to each Permitted Acquisition made during such period,
plus (ii) (to the extent not included in Consolidated EBITDA and to the extent
the same have not resulted in a permanent prepayment of the Loans) all other
cash income for such period (including cash income on Cash Equivalents), plus
(iii) the proceeds of any Indebtedness permitted by paragraphs (c) or (g) of
ss.10.1 to the extent used to finance permitted cash Capital Expenditures made
during such period; minus
(c) the sum of (i) all permanent payments or prepayments (including
voluntary prepayments) of Consolidated Total Funded Debt during such period
(other than prepayments made out of Net Cash Proceeds or out of the prior year's
Consolidated Excess Cash Flow), plus (ii) additions to non-cash working capital
for such period (i.e., the increase, if any, in Consolidated Current Assets
minus Consolidated Current Liabilities from the beginning to the end of such
period); provided that such working capital as of the first day of such period
shall be determined on a pro forma basis adjusted to give effect (as if such
event had occurred on the first day of such period) to each Permitted
Acquisition made during such period, plus (iii) all permitted Capital
Expenditures made during such period (other than any such Capital Expenditures
made to acquire Capital Assets in any Permitted Acquisition),
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plus (iv) all interest payments on Consolidated Total Funded Debt made in cash
during such period, plus (v) all dividend payments on Permitted Disqualified
Capital Stock made in cash during such period, to the extent made in compliance
with ss.10.4(a), plus (vi) all income taxes paid in cash during such period.
Consolidated Net Income (or Deficit). With respect to any Person for any
period, an amount equal to the consolidated net income (or deficit) of such
Person and its Subsidiaries for such period, after deduction of all expenses,
taxes and other proper charges, determined in accordance with GAAP and after
eliminating therefrom all extraordinary nonrecurring items of income including,
without limitation (a) income from unusual transactions, (b) income from the
sale of Capital Assets, (c) income from the write-up in the book value of any
Property of such Person or its Subsidiaries and (d) income from any Cash
Equivalents or any other Investments (except Receivables).
Consolidated Operating Cash Flow. With respect to any Person for any
period, an amount equal to
(a) Consolidated EBITDA for such period, less
(b) the sum of (i) cash payments made during such period in respect
of tax liabilities of such Person and its Subsidiaries, plus (ii) to the
extent not already deducted in the determination of Consolidated EBITDA,
the aggregate amount of cash Capital Expenditures of such Person and its
Subsidiaries during such period (other than Capital Expenditures made (A)
with the proceeds of Indebtedness permitted by paragraphs (c) or (g) of
ss.10.1 or (B) made to acquire Capital Assets in a Permitted Acquisition).
Consolidated Total Funded Debt. With respect to any Person at any time,
(a) all Indebtedness referred to in clause (a) of the definition of
Indebtedness, plus (b) the principal amount of all obligations under Capitalized
Leases, determined in each case on a consolidated basis in accordance with GAAP.
Consolidated Total Interest Expense. With respect to any Person for any
period (subject to any adjustments required by ss.11.6 and determined on a
consolidated basis in accordance with GAAP), the aggregate amount of (a)
interest expense of such Person and its Subsidiaries for such period, whether
such interest was or is required to be reflected as an item of expense or
capitalized, including payments consisting of interest in respect of Capitalized
Leases or synthetic leases and including Commitment Fees, fronting fees,
facility fees, balance deficiency fees and similar fees or expenses in
connection with the borrowing of money, and (b) in the case of the Borrower,
dividend payments made in cash during such period in respect of any Capital
Stock.
Contractual Obligation. With respect to any Person, any provision of any
Security issued by such Person or of any Instrument or undertaking to which such
Person is a party or by which it or any of its Property is bound.
Conversion Request. A notice given by the Borrower to the Agent of the
Borrower's election to convert or continue a Loan in accordance with ss.2.6(a).
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Counterparty. Any Lender, or any other bank or financial institution which
has entered into a Rate Protection Agreement with the Borrower.
CWE. CWE Acquisition Co., a Delaware corporation.
Debt Agreements. See ss.12.6.
Default. See ss.14.1.
Defaulting Lender. See ss.15.5(c).
Disqualified Capital Stock. With respect to any Person, any Capital Stock
of such Person which is not Permitted Capital Stock.
Distribution. The declaration or payment of any dividend on or in respect
of any shares of any class of Capital Stock of a Person, other than dividends
payable solely in shares of Permitted Capital Stock of such Person; the
purchase, redemption, or other retirement of any shares of any class of Capital
Stock or other Equity Interests of a Person, directly or indirectly through a
Subsidiary of such Person or otherwise; the return of capital by a Person to its
shareholders or equity holders as such; or any other distribution on or in
respect of any shares of any class of Capital Stock or other Equity Interests of
such Person.
Documentation Agent. General Electric Capital Corporation acting as
documentation agent for the Lenders.
Dollar Equivalent. On any date of determination, with respect to an amount
denominated in Dollars, such amount of Dollars, and with respect to an amount
denominated in Sterling, the amount (as conclusively ascertained by the UK
Fronting Lender absent manifest error) of Dollars which could be purchased by
the UK Fronting Lender (in accordance with its normal banking practices) with
that amount of Sterling in the London foreign exchange market at the spot rate
of exchange prevailing at or about 11:00 a.m. (London time) on such date of
determination.
Dollars or $. Dollars in lawful currency of the United States.
Domestic Lending Office. Initially, the office of each Lender designated
as such in Schedule 1 hereto; thereafter, such other office of such Lender, if
any, located within the United States that will be making or maintaining Base
Rate Loans.
Domestic Company. A company organized under the laws of the United States
or any state thereof.
Domestic Subsidiary. A Subsidiary organized under the laws of the United
States or any state thereof.
Drawdown Date. The date on which any Revolving Credit Loan, Term Loan,
Acquisition Loan or UK Acquisition Loan is made or is to be made, and the date
on which all or any portion of any Loan is converted or continued in accordance
with ss.2.3 and ss.2.6.
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Eligible Accounts Receivable. With respect to any US Transaction Party,
the aggregate of the unpaid portions of Accounts Receivable (net of any credits,
rebates, offsets, holdbacks or other adjustments or commissions payable to third
parties that are adjustments to such Accounts Receivable) (a) that such US
Transaction Party reasonably and in good faith determines to be collectible; (b)
that are with account debtors that (i) are not Affiliates of the Borrower or any
of its Subsidiaries, (ii) purchased the goods or services giving rise to the
relevant Account Receivable in an arm's length transaction, (iii) are not
insolvent or the subject of any case or proceeding, whether voluntary or
involuntary, under any bankruptcy, reorganization, arrangement, insolvency,
adjustment of debt, dissolution, liquidation or similar law of any jurisdiction
and (iv) are, in the Agent's reasonable judgment, creditworthy; (c) that are in
payment of obligations that have been fully performed and are not subject to
dispute or any other similar claims that would reduce the cash amount payable
therefor; (d) that are not subject to any pledge, restriction, security interest
or other lien or encumbrance other than those created by the Loan Documents; (e)
in which the Agent has a valid and perfected first priority security interest;
(f) that are not outstanding for more than ninety (90) days past the earlier to
occur of (i) the date of the respective invoices therefor and (ii) the date of
shipment therefor in the case of goods or the end of the calendar month
following the provision thereof in the case of services; (g) that are not due
from an account debtor located in Indiana, Minnesota or New Jersey unless such
US Transaction Party (i) has received a certificate of authority to do business
and is in good standing in such state or (ii) has filed a notice of business
activities report with the appropriate office or agency of such state for the
current year; (h) that are payable in Dollars; (i) that are not payable from an
office outside of the United States; and (j) that are not secured by a letter of
credit unless the Agent has a prior, perfected security interest in such letter
of credit. Eligible Accounts Receivable shall not include any Accounts
Receivable of (x) any account debtor if more that twenty-five percent (25%) of
the aggregate amount of all Accounts Receivable owing from such account debtor
are not Eligible Accounts Receivable as a result of the failure of such Accounts
Receivable to satisfy the criteria set forth in clauses (a), (b)(iii), (b)(iv),
(c) or (f) of this definition, or (y) any account debtor and any Affiliate of
any account debtor if more than twenty-five percent (25%) of the aggregate
amount of all Accounts Receivable owing from such account debtor and its
Affiliates are not Eligible Accounts Receivable as a result of the failure of
such Accounts Receivable to satisfy the criteria set forth in clauses (a),
(b)(iii), (b)(iv), (c) or (f) of this definition.
Eligible Assignee. Any of (a) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (b) a
savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with GAAP; (c) a
commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having total assets in excess of
$1,000,000,000, provided that such bank is acting through a branch or agency
located in the country in which it is organized or another country which is also
a member of the OECD; (d) the central bank of any country which is a member of
the OECD; and (e) any other bank, insurance company,
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commercial finance company or other financial institution or other Person
approved by the Agent, such approval not to be unreasonably withheld.
Notwithstanding the foregoing, no assignee of the rights and obligations of the
UK Fronting Lender shall be deemed to be an Eligible Assignee unless such
assignee is also a UK Qualifying Lender.
Eligible Inventory. With respect to any US Transaction Party, finished
goods, work in progress and raw materials and component parts inventory owned by
such US Transaction Party; provided that Eligible Inventory shall not include
any inventory (a) held on consignment, or not otherwise owned by such US
Transaction Party, or of a type no longer sold by such US Transaction Party; (b)
which has been returned by a customer and is damaged or subject to any legal
encumbrance other than Permitted Liens; (c) which is not in the possession of
such US Transaction Party unless the Agent has received (i) a waiver in form and
substance satisfactory to the Agent from the possessor of such inventory, (ii)
financing statements in form and substance satisfactory to the Agent executed
and delivered by such US Transaction Party as secured party/bailor and the
possessor of such inventory as debtor/bailee, for filing in the appropriate
jurisdictions provided, however, that the Agent may, in its sole discretion,
waive the foregoing requirements with respect to waivers and financing
statements, and (iii) an assignment in form and substance satisfactory to the
Agent by the secured party/bailor to the Agent of the aforementioned financing
statements; (d) in which the Agent does not have a valid and perfected first
priority security interest; (e) which has been shipped to a customer of the such
US Transaction Party regardless of whether such shipment is on a consignment
basis; (f) which is not located at a Permitted Inventory Location of such US
Transaction Party within the United States; (g) which is held by such US
Transaction Party on property leased by such US Transaction Party, unless the
Agent has received a waiver from the lessor and any sublessor of such leased
property, in form and substance satisfactory to the Agent; or (h) which the
Agent reasonably deems to be obsolete or not marketable in the ordinary course
of business.
Eligible Machinery and Equipment. With respect to any US Transaction
Party, those items of machinery and equipment owned by such US Transaction Party
at the relevant time of reference thereto with respect to which such US
Transaction Party has full and unencumbered title (except for liens granted to
the Agent pursuant to the Security Documents) and with respect to which the
Agent has a valid and perfected first priority security interest, securing all
of the Obligations.
Employee Benefit Plan. Any employee benefit plan within the meaning of
ss.3(3) of ERISA maintained or contributed to by the Borrower, or any ERISA
Affiliate, other than a Multiemployer Plan.
Employee Stock Proceeds. See ss.4.9(a)(iv)(A).
Employee Stock Proceeds Payment Period. See ss.4.9(a)(iv)(A)
Employment Agreements. See ss.12.6.
Enforcement Notice. A written notice delivered by the Agent to any
Transaction Party stating that one or more Defaults or Events of Default are
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continuing, setting forth and describing the nature thereof, and setting forth
the restrictions to be imposed by the Agent in respect of the covenants set
forth in ss.10.3(g), ss.10.4(a) or ss.10.4(c).
Enforcement Period. With respect to any Enforcement Notice, the period
commencing on the date on which the Agent delivers such Enforcement Notice to
any of the Transaction Parties, and ending on the first date thereafter on which
the Defaults and Events of Default specified in the Enforcement Notice are no
longer continuing.
Environmental Laws. See ss.8.16(a).
Equity Documents. Collectively, (a) the Stockholders Agreement, dated as
of April 15, 1998, among the Borrower, each of the purchasers named therein and
each of the other stockholders named therein, and (b) each subscription
agreement and each other instrument or document governing the investment
arrangements by such purchasers and other stockholders in the Borrower.
Equity Interests. Capital Stock and warrants, options and other rights to
acquire Capital Stock.
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Any Person which is treated as a single employer with the
Borrower under ss.414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of ss.4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
Eurocurrency Reserve Rate. For any day with respect to a Eurocurrency Rate
Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
Eurocurrency Business Day. Any day on which commercial banks are open for
business (including dealings in Dollar and Sterling deposits) in London or such
other eurocurrency interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
Eurocurrency Lending Office. Initially, the office of each Lender
designated as such in Schedule 1 hereto; thereafter, such other office of such
Lender, if any, that shall be making or maintaining Eurocurrency Rate Loans.
Eurocurrency Rate.
(a) With respect to all Loans (other than the UK Acquisition Loans)
and for any Interest Period with respect to such Eurocurrency Rate Loan,
the rate of interest equal to (i) the rate per annum
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(rounded upwards to the nearest 1/16 of one percent) at which the
Applicable Reference Bank's Eurocurrency Lending Office is offered Dollar
deposits two Eurocurrency Business Days prior to the beginning of such
Interest Period in the interbank eurocurrency market where the
eurocurrency and foreign currency and exchange operations of such
Eurocurrency Lending Office are customarily conducted, for delivery on the
first day of such Interest Period for the number of days comprised therein
and in an amount comparable to the amount of the Eurocurrency Rate Loan of
the Applicable Reference Bank to which such Interest Period applies,
divided by (ii) a number equal to 1.00 minus the Eurocurrency Reserve
Rate, if applicable.
(b) With respect to all UK Acquisition Loans, at the time any
determination is to be made with respect to an Applicable Currency for any
Interest Period, the rate at which the UK Fronting Lender, in accordance
with its normal practice, is able to obtain like deposits in such
Applicable Currency in the London interbank offered market for such
currency for a period comparable in length to such Interest Period plus
the cost (if any) to the UK Fronting Lender of maintaining the reserve
deposit and/or liquidity requirements of any applicable regulatory
authority.
(c) The parties acknowledge that the Applicable Reference Bank will
not accept offers of Dollar deposits at rates that are substantially
higher than the published eurocurrency rates in the most current edition
of the Wall Street Journal.
Eurocurrency Rate A Loans. All or any portion of Revolving Credit Loans,
Acquisition Loans, UK Acquisition Loans and Term Loans A bearing interest
calculated by reference to the Eurocurrency Rate.
Eurocurrency Rate B Loans. All or any portion of the Term Loans B bearing
interest calculated by reference to the Eurocurrency Rate.
Eurocurrency Rate Loans. The Eurocurrency Rate A Loans and the
Eurocurrency Rate B Loans.
Event of Default. See ss.14.1.
Exchange Act. The Securities and Exchange Act of 1934, as amended, and the
rules and regulations promulgated by the Securities and Exchange Commission
thereunder.
Exchange Note Documents. The Exchange Notes, the Senior Subordinated
Indenture and each of the documents, instruments and other agreements,
evidencing or governing obligations of the Transaction Parties in respect of the
Exchange Notes, as in effect on the Original Closing Date and as the same may be
amended, modified or supplemented from time to time in accordance with the terms
thereof and hereof.
Exchange Notes. The Senior Subordinated Notes due 2005 issued by the
Borrower in accordance with the terms contained in the Senior Subordinated
Indenture.
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Excluded Persons. Officers and directors of the Borrower and those Persons
who beneficially own membership interests in the Parent, in each case, as of the
Original Closing Date.
Excess UK Working Capital Outstandings. As of any date, with respect to
the Permitted UK Working Capital Facility, the amount by which (a) the sum of
the Dollar Equivalent of (i) all outstanding loans to the UK Borrower and/or any
UK Subsidiary, plus (ii) all outstanding liabilities of the UK Borrower and/or
any UK Subsidiary (whether contingent or otherwise) in respect of all letters of
credit, bank guarantees, indemnities or other similar instruments (including the
maximum amount available to be drawn by beneficiaries under all such letters of
credit, bank guarantees, indemnities or other similar instruments), plus (iii)
any indemnity or counter indemnity from the UK Borrower and/or any UK Subsidiary
in favor of an issuer of any letters of credit, bank guarantees, indemnities or
other similar instruments issued to or for the account or for the benefit of the
UK Borrower or a UK Subsidiary, plus (iv) any other extensions of credit to the
UK Borrower and/or any UK Subsidiary (in each case to the extent made pursuant
to the Permitted UK Working Capital Facility) exceeds (b) the Dollar Equivalent
of $5,000,000.
Existing Acquisition Loans. The outstanding "Acquisition Loans" (as
defined in the Existing Credit Agreement) made by the Existing Lenders under the
Existing Credit Agreement.
Existing Indebtedness. See ss.8.26.
Existing Credit Agreement. As defined in the Recitals.
Existing Lender. As defined in the Recitals.
Existing Letters of Credit. See ss.3.6.
Existing Term Loans A. The outstanding "Term Loans A" (as defined in the
Existing Credit Agreement) made by the Existing Lender under the Existing Credit
Agreement.
Existing Term Loans B. The outstanding "Term Loans B" (as defined in the
Existing Credit Agreement) made by the Existing Lender under the Existing Credit
Agreement.
Fees. The Commitment Fees, the Letter of Credit Fee, the Fronting Fee, the
UK Fronting Fee, and all other fees payable under ss.5.1.
Fee Letter. The Fee Letter agreement, dated as of November 20, 1998,
between the Borrower, the Agent and the Arranger.
First Amendment to Security Documents Agreement. The First Amendment to
Security Documents Agreement, dated as of the Restatement Effective Date, among
the Borrower, the Guarantors and the Agent.
Fronting Fee. See ss.5.1(d).
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GAAP. (a) When used in ss.11, whether directly or indirectly through
reference to a capitalized term used therein, (i) principles that are consistent
with the principles promulgated or adopted by the Financial Accounting Standards
Board and its predecessors (or its equivalent in England and Wales, with respect
to a UK Subsidiary), in effect for the fiscal year ended on the Balance Sheet
Date, and (ii) to the extent consistent with such principles, the accounting
practices of the Transaction Parties reflected in the consolidated financial
statements for the year ended on the Balance Sheet Date, and (b) when used in
general, other than as provided above, principles that are (i) consistent with
the principles promulgated or adopted by the Financial Accounting Standards
Board and its predecessors (or its equivalent in England and Wales, with respect
to a UK Subsidiary), as in effect from time to time, and (ii) consistently
applied with past financial statements of the Borrower adopting the same
principles, provided that in each case referred to in this definition of "GAAP"
a certified public accountant (or a chartered accountant in the case of a UK
Subsidiary) would, insofar as the use of such accounting principles is
pertinent, be in a position to deliver an unqualified opinion (other than a
qualification regarding changes in GAAP) as to financial statements in which
such principles have been properly applied.
Governing Documents. With respect to any Person, its certificate or
articles of incorporation, its by-laws or other organizational documents and all
shareholder agreements, voting trusts and similar arrangements applicable to any
of its Equity Interests.
Governmental Authority. Any foreign, federal, state, provincial, regional,
local, municipal or other government, or any department, commission, board,
bureau, agency, public authority or instrumentality thereof, or any court or
arbitrator.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of ss.3(2) of ERISA maintained or contributed to by any Transaction
Party or any ERISA Affiliate the benefits of which are guaranteed on termination
in full or in part by the PBGC pursuant to Title IV of ERISA, other than a
Multiemployer Plan.
Guarantor Payment. See ss.7.11(a).
Guarantors. Collectively, (a) Aeromil, Western Methods, Barnes, Brittain,
Wichita, J&J and Sea-Lect, Lamsco, Modern Manufacturing, CWE, (b) each other
Subsidiary of the Borrower which becomes a party to this Agreement as a
Guarantor hereunder, and (c) the Borrower, with respect to any Obligation for
which it is not the direct obligor.
Guarantee. The Guarantee made by the Guarantors in favor of the Lenders,
the Issuing Bank and the Agent, pursuant to ss.7 hereof, pursuant to which each
Guarantor guarantees to the Lenders, the Issuing Bank and the Agent the payment
and performance of the Obligations.
Hazardous Substances. See ss.8.16(b).
Indebtedness. With respect to any Person, without duplication,
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(a) all liabilities and obligations, contingent or otherwise, of
such Person, to the extent such liabilities and obligations would appear
as a liability upon the consolidated balance sheet of such Person in
accordance with GAAP, (i) in respect of borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or
only to a portion thereof), (ii) evidenced by bonds, notes, debentures or
similar instruments, (iii) representing the balance deferred and unpaid of
the purchase price of any property or services, except (other than
accounts payable or other obligations to trade creditors which have
remained unpaid for greater that sixty (60) days past their original due
date) those incurred in the ordinary course of its business that would
constitute ordinarily a trade payable to trade creditors;
(b) all liabilities and obligations, contingent or otherwise, of
such Person (x) evidenced by bankers' acceptances or similar instruments
issued or accepted by banks, (y) relating to any obligations under
Capitalized Leases, or (z) evidenced by a letter of credit or
reimbursement obligation of such Person with respect to any letter of
credit;
(c) all net obligations of such Person under Rate Protection
Agreements;
(d) all liabilities and obligations of others of the kinds described
in the preceding clause (a), (b) or (c) that such Person has guaranteed or
that are otherwise its legal liability or which are secured by any assets
or property of such Person and all obligations to purchase, redeem or
acquire any Equity Interests;
(e) any and all deferrals, renewals, extensions, refinancings and
refundings (whether direct or indirect) of, or amendments, modifications
or supplements to, any liability of the kind described in any of the
preceding clauses (a), (b), (c) or (d), or this clause (e), whether or not
between or among the same parties; and
(f) all Disqualified Capital Stock of such Person (measured at the
greater of its voluntary or involuntary maximum fixed repurchase price
plus accrued and unpaid dividends). For purposes hereof, the "maximum
fixed repurchase price" of any Disqualified Capital Stock which does not
have a fixed repurchase price shall be calculated in accordance with the
terms of such Disqualified Capital Stock as if such Disqualified Capital
Stock were purchased on any date on which Indebtedness shall be required
to be determined pursuant to this Agreement, and if such price is based
upon, or measured by, the fair market value of such Disqualified Capital
Stock, such fair market value to be determined in good faith by the board
of directors of the issuer (or managing general partner of the issuer) of
such Disqualified Capital Stock.
Independent Public Accountants. Ernst & Young, or any other firm of
certified public accountants selected by the Borrower and reasonably acceptable
to the Agent.
Initial Public Equity Offering. An initial underwritten offering of common
stock of the Borrower or Parent for cash pursuant to an effective registration
statement under the Securities Act as a consequence of which the
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common stock of the Borrower or Parent is listed on a national securities
exchange or quoted on the national market system of the Nasdaq stock market.
Insolvency Event of Default. See ss.14.1.
Instrument. Any contract, agreement, indenture, mortgage, guarantee,
debenture, pledge agreement or other document, instrument or writing (whether by
formal agreement, letter or otherwise) under which any obligation is evidenced,
assumed or undertaken, or any right to any Lien is granted or perfected.
Intercompany Debt Payment. See ss.10.4(c)
Interest Payment Date. As to (a) any Base Rate Loan, the last day of the
calendar quarter which includes the Drawdown Date thereof and (b) as to any
Eurocurrency Rate Loan in respect of which the Interest Period is (i) three (3)
months or less, the last day of such Interest Period and (ii) more than three
(3) months, the date that is three (3) months from the first day of such
Interest Period and, in addition, the last day of such Interest Period
Interest Period. With respect to each Loan, (i) initially, the period
commencing on the Drawdown Date of such Loan and ending (A) for any Base Rate
Loan, on the last day of the calendar quarter during which the Drawdown Date
occurs, or (B) for any Eurocurrency Rate Loan, the last day of a 1, 2, 3, or 6
month period, as selected by the Borrower or the UK Borrower in the applicable
Loan Request; and (ii) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Loan and ending on the last
day of one of the periods set forth above, as selected by the Borrower in a
Conversion Request; provided that all of the foregoing provisions relating to
Interest Periods are subject to the following:
(a) if any Interest Period with respect to a Eurocurrency Rate Loan
would otherwise end on a day that is not a Eurocurrency Business Day, that
Interest Period shall be extended to the next succeeding Eurocurrency
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Eurocurrency Business Day;
(b) if any Interest Period with respect to a Base Rate Loan would
end on a day that is not a Business Day, that Interest Period shall end on
the next succeeding Business Day;
(c) if the Borrower shall fail to give notice as provided in
ss.2.6(a), the Borrower shall be deemed to have requested a conversion of
the affected Eurocurrency Rate Loan to a Base Rate Loan and the
continuance of all Base Rate Loans as Base Rate Loans on the last day of
the then current Interest Period with respect thereto;
(d) any Interest Period relating to any Eurocurrency Rate Loan that
begins on the last Eurocurrency Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the
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calendar month at the end of such Interest Period) shall end on the last
Eurocurrency Business Day of a calendar month;
(e) no Interest Period relating to Term Loans, Acquisition Loans or
UK Acquisition Loans or any portion thereof bearing interest based on the
Eurocurrency Rate shall extend beyond the date on which a regularly
scheduled installment payment of the principal of Term Loans, the
Acquisition Loans or the UK Acquisition Loans is to be made unless a
portion of the Term Loans, the Acquisition Loans or the UK Acquisition
Loans, as the case may be, at least equal to such installment payment has
an Interest Period ending on such date or is a Base Rate Loan; and
(f) any Interest Period relating to any Eurocurrency Rate Loan that
would otherwise extend beyond the Revolving Credit Loan Maturity Date (if
comprising a Revolving Credit Loan), the Term Loan A Maturity Date (if
comprising Term Loans A or a portion thereof), the Term Loan B Maturity
Date (if comprising Term Loans B or a portion thereof) or the Acquisition
Loan Maturity Date (if comprising an Acquisition Loan or a UK Acquisition
Loan, or any portion thereof) shall end on the Revolving Credit Loan
Maturity Date, the Term Loan A Maturity Date, the Term Loan B Maturity
Date or the Acquisition Loan Maturity Date (as the case may be).
International Standby Practices. With respect to any standby Letter of
Credit, International Standby Practices (ISP98) as promulgated by the Institute
of International Banking Law & Practice, Inc., or any successor code of standby
letter of credit practices among banks adopted by the Agent in the ordinary
course of its business as a standby letter of credit issuer and in effect at the
time of issuance of such Letter of Credit.
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guarantees (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guarantee shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (d) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
Issuing Bank. With respect to any Letter of Credit, BankBoston and any
successor Issuing Bank.
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J&J. J&J Leasing, Inc., a Washington corporation.
J&J Acquisition. The acquisition by SLP Acquisition of all of the Capital
Stock of J&J pursuant to the J&J Acquisition Documents.
J&J Acquisition Agreement. The Stock Purchase Agreement, dated as of May
11, 1998, by and among J&J, SLP Acquisition and the stockholders named therein.
J&J Acquisition Documents. The J&J Acquisition Agreement, and all other
agreements and documents relating to the J&J Acquisition.
Lamsco. Lamsco West, Inc., a California corporation.
Lamsco Acquisition. The acquisition by the Borrower of all of the Capital
Stock of Lamsco pursuant to the Lamsco Acquisition Documents.
Lamsco Acquisition Agreement. The Stock Purchase Agreement, dated as of
October 12, 1998, by and among Lamsco, Alinabal Holdings Corporation, a Delaware
corporation, Stephen G. Cerri, Kevin M. Conlisk and Samuel S. Bergami, and the
Borrower.
Lamsco Acquisition Documents. The Lamsco Acquisition Agreement, and all
other agreements and documents relating to the Lamsco Acquisition.
Lenders. (a) The financial institutions listed on Schedule 1 hereto (other
than any such financial institution that has ceased to be a party hereto
pursuant to an Assignment and Acceptance) and (b) any financial institution that
has become a party hereto (in accordance with the requirements hereof) pursuant
to an Assignment and Acceptance.
Letter of Credit. See ss.3.1(a).
Letter of Credit Application. See ss.3.1(a).
Letter of Credit Cash Collateral Account. A cash collateral account
established and maintained by the Agent pursuant to a cash collateral agreement
in form and substance satisfactory to the Agent, into which shall be deposited
cash and Cash Equivalents to be held as security for Letter of Credit Exposure
as required under this Agreement.
Letter of Credit Exposure. At any time, the sum of (a) the Maximum Drawing
Amount with respect to all Letters of Credit issued, and (b) all Unpaid
Reimbursement Obligations.
Letter of Credit Fee. See ss.5.1(d).
Letter of Credit Participation. See ss.3.1(d).
Leverage Ratio. As of the end of any Reference Period, the ratio of (a)
Consolidated Total Funded Debt of the Borrower and its Subsidiaries as at such
date, to (b) Consolidated EBITDA of the Borrower and its Subsidiaries for such
Reference Period.
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Lien. Any mortgage, security interest, pledge, hypothecation, assignment,
attachment, deposit arrangement, encumbrance, lien (statutory, judgment or
otherwise), charge (whether fixed or floating), preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
(including any similar such interest arising under the laws of any applicable
domestic or foreign jurisdiction and including any conditional sale or other
title retention agreement, any financing lease involving substantially the same
economic effect as any of the foregoing and the filing of any financing
statement under the UCC or comparable law of any domestic or foreign
jurisdiction).
Liquidity. At any time, the sum of (a) all cash and Cash Equivalents of
the Borrower plus (b) the lesser of (i) the Borrowing Base (ii) the Total
Revolving Credit Commitment, minus the aggregate of (A) the Letter of Credit
Exposure, (B) outstanding Revolving Credit Loans (after giving effect to all
amounts requested) and (C) any Excess UK Working Capital Outstandings and (iii)
the maximum amount of Indebtedness constituting Revolving Credit Loans permitted
to be incurred under the Subordinated Debt Documents at such date of
determination.
Loan Documents. This Agreement, the Notes, the Security Documents, the
Commitment Letter, the Fee Letter, the Amendment Agreement and any Rate
Protection Agreement between the Borrower and any Lender.
Loan Request. A US Loan Request and/or a UK Loan Request.
Loans. The Revolving Credit Loans, the Term Loans, the Acquisition Loans
and the UK Acquisition Loans.
Macluan Capital. Macluan Capital Corporation, a corporation incorporated
under the laws of the province of British Columbia, Canada.
Management Agreements. See ss.12.6.
Management Consulting Agreement. The Management Consulting Agreement,
dated as of November 26, 1997, among the Borrower, Dunhill Bank Caribbean Ltd.
and Hayes Capital Corporation.
Mandatory Liquid Asset Costs. With respect to the UK Fronting Lender and
each Acquisition Loan Lender in respect of any UK Acquisition Loan, any
additional cost to the UK Fronting Lender or to such Acquisition Loan Lender of
complying with the relevant reserve asset ratio required by the Bank of England
from time to time, expressed as a percentage per annum, and calculated as set
forth in Schedule 1.1 hereto.
Material Contracts. See ss.12.6.
Materially Adverse Effect. With respect to any event or occurrence of
whatever nature (including any adverse determination in any litigation,
arbitration or governmental investigation or proceeding):
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(a) a materially adverse effect on the business, Properties,
operations, prospects or condition, financial or otherwise, of the
Borrower and its Subsidiaries, taken as a whole;
(b) a materially adverse effect on the ability of any Transaction
Party to perform any of its payment or other obligations under any Loan
Document to which it is a party; or
(c) any impairment of the validity or enforceability of any Loan
Document or any impairment of the rights, remedies or benefits available
to the Agent or any Lender under any Loan Document.
Maximum Drawing Amount. The maximum aggregate amount that the
beneficiaries may at any time draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
Modern Acquisition. The acquisition by the Borrower of all of the Capital
Stock of Y.F. Americas, Inc. (now known as Modern Manufacturing, Inc.) pursuant
to the Modern Acquisition Documents.
Modern Acquisition Agreement. The Stock Purchase Agreement, dated as of
December 1, 1998, by and among the Borrower, Y.F. Americas, Inc. (now known as
Modern Manufacturing, Inc.) and Y.F. International, Ltd. as the stockholder of
Y.F. Americas, Inc.
Modern Acquisition Documents. The Modern Acquisition Agreement, and all
other agreements and documents relating to the Modern Acquisition.
Modern Holdings. Modern Holdings, Inc., a Washington corporation, which
merged with and into Y.F. Americas, Inc. (now known as Modern Manufacturing,
Inc.) pursuant to the Modern Merger.
Modern Manufacturing. Modern Manufacturing, Inc., a Delaware corporation,
formerly known as Y.F. Americas, Inc.
Modern Merger. The merger of (a) Y.F. Americas, Inc. and Modern Holdings,
Inc. (a Washington corporation and Subsidiary of Y. F. Americas, Inc.) pursuant
to the Agreement and Plan of Merger Agreement, dated as of January 8, 1999,
pursuant to which Y.F. Americas, Inc. (now known as Modern Manufacturing, Inc.)
was the surviving corporation and (b) Y.F. Americas, Inc. and Modern
Manufacturing, Inc. (a Washington corporation and Subsidiary of Y. F. Americas,
Inc.) pursuant to the Agreement and Plan of Merger Agreement, dated as of
January 18, 1999, pursuant to which Y.F. Americas, Inc. (now known as Modern
Manufacturing, Inc.) was the surviving corporation.
Moody's. Moody's Investors Service, Inc.
Mortgage Indebtedness. Indebtedness (other than the Obligations) secured
solely by a mortgage over Real Property.
Mortgaged Property. Any Real Estate which is subject to any Mortgage.
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Mortgages. Collectively, the several mortgages and deeds of trust from the
time to time executed and delivered by any Transaction Party to the Agent with
respect to fee and leasehold interests of such Transaction Party in the Real
Estate and in each case in form and substance satisfactory to the Agent.
Most Recent Reference Period. The most recent Reference Period for which
financial statements of the Borrower and its Subsidiaries have been delivered to
the Lenders in compliance with ss.9.3 hereof.
Multiemployer Plan. Any multiemployer plan within the meaning of ss.3(37)
of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate.
Net Cash Proceeds. With respect to any (a) sale or other disposition of
any assets (including Capital Stock of any Subsidiary of the Borrower) of the
Borrower or any of its Subsidiaries, (b) issuance or sale by the Borrower or any
Subsidiary of the Borrower of any Capital Stock, or (c) any issuance, incurrence
or disposition of Indebtedness by the Borrower or any of its Subsidiaries, the
gross consideration received by or payable to the Borrower or any of its
Subsidiaries (in cash) from such sale or issuance, net of reasonable and
customary commissions, underwriting costs, direct sales costs, normal closing
adjustments, income taxes attributable to such sale and professional fees and
expenses incurred directly in connection therewith, to the extent the foregoing
are actually paid in connection with such sale or issuance.
Non-Defaulting Lender. Each Lender that is not a Defaulting Lender.
Note Record. A record with respect to a Note.
Notes. The Revolving Credit Notes, the Term Notes and the Acquisition
Notes.
Obligations. All indebtedness, obligations and liabilities of the Borrower
or any of its Subsidiaries to the Agent or any of the Lenders, existing on the
date of this Agreement or arising thereafter, direct or indirect, joint or
several, absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract, operation of law or
otherwise, arising or incurred under this Agreement, any of the other Loan
Documents or any cash management agreement or arrangement between any
Transaction Party and the Agent or in respect of any deposit or other account of
any Transaction Party maintained with the Agent pursuant to this Agreement.
Offering Memorandum. The Offering Memorandum, dated as of April 15, 1998,
disclosing the terms and conditions of the Senior Subordinated Notes and the
Exchange Notes.
Operating Account. Any demand deposit account(s) maintained by any
Transaction Party with BankBoston.
Original Closing Date. November 20, 1998.
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Original Credit Facility. The Revolving Credit Agreement, dated as of
April 15, 1998, among (a) the Borrower, (b) certain subsidiaries of the
Borrower, (c) BankBoston and certain other lenders, (d) BankBoston as
administrative agent, and (e) DLJ Capital Funding, Inc., as documentation agent.
Parent. Compass Holdings, LLC, a Nevada limited liability company.
PBGC. The Pension Benefit Guaranty Corporation created by ss.4002 of ERISA
and any successor entity or entities having similar responsibilities.
Perfection Certificates. The Perfection Certificates as defined in the
Security Agreement.
Permitted Acquisition. Any Acquisition after the Restatement Effective
Date by the Borrower or any other Transaction Party of any business so long as,
in each case, either the Required Lenders have given their written consent to
such Acquisition or all of the following conditions are satisfied:
(a) the target is a Domestic Company or a UK Company in a Related
Business;
(b) the Acquisition is on friendly terms;
(c) after giving effect to the Acquisition, the assets comprising
such business (as used in this definition, the "Acquired Assets") shall be
owned or leased exclusively by such Transaction Party and substantially
all of the Acquired Assets shall be located in the United States or the
United Kingdom;
(d) any Indebtedness incurred or assumed in connection with the
Acquisition is Permitted Indebtedness or its incurrence is consented to by
the Required Lenders;
(e) the Borrower, or a wholly-owned direct or indirect Subsidiary of
the Borrower, is the surviving entity;
(f) if the Acquired Assets are owned or leased by a newly-formed or
newly-acquired Domestic Subsidiary of the Borrower, such Domestic
Subsidiary (together with any Domestic Subsidiary thereof and any parent
of such Domestic Subsidiary that is not already a Guarantor) shall have
executed and delivered to the Agent and the Lenders (A) an Accession
Agreement substantially in the form attached hereto as Exhibit I pursuant
to the terms of which such Subsidiary (and such parent or parents, if
applicable) (i) become a party to this Agreement as a Guarantor, become a
party to the Security Agreement as an Assignor, become a party to the
Stock Pledge Agreement as a Pledgor, and become a party to any of the
other Loan Documents as the Agent may reasonably request, and (ii) agree
to perform and observe all of the obligations and covenants (including all
obligations and covenants contained in ss.7 hereof) of a Transaction Party
hereunder, and of the appropriate party under any Loan Document to which
it becomes a party, and (B) such other Security Documents in form and
substance
-28-
satisfactory to the Agent as may be reasonably required by the Agent, in
each case within ten (10) days after the closing of the Acquisition;
(g) if the Acquired Assets are owned by a UK Subsidiary of the
Borrower:
(i) the Borrower and such UK Subsidiary (and any parent of
such UK Subsidiary that has not already done so) shall to the extent
not constituting the giving of unlawful financial assistance for the
purposes of Sections 151 to 158 of the Companies Act 1985 (England)
(A)(1) have executed and delivered to the Agent and the Lenders on
or prior to the completion of the Acquisition such Instruments and
other documents, in each case in form and substance satisfactory to
the Agent, as the Agent may require in order to create a perfected
first priority Lien on and create a first fixed and floating charge
over (x) all of the Acquired Assets (subject only to Permitted Liens
on certain assets entitled to priority under Applicable Law) as
security for the UK Obligations, (y) all the Capital Stock of any
such UK Subsidiary as security for the UK Obligations and (z)
sixty-five percent (65%) of the Capital Stock of any such UK
Subsidiary that is a direct Subsidiary of the Borrower or a Domestic
Subsidiary of the Borrower as security for the Obligations, and (2)
become a party to any other Loan Document as the Agent may
reasonably request, and (ii) agree to perform and observe all of the
obligations and covenants (other than obligations and covenants of a
Guarantor contained in ss.7 hereof) of a Transaction Party
hereunder, and of the appropriate party under any Loan Document to
which it becomes a party; and
(ii) to the extent that such UK Subsidiary cannot comply with
any of the requirements of subclause (i) above due to the
applicability of Sections 151 to 158 of the Companies Act 1985
(England), (A) the Agent shall have determined in its sole
discretion immediately prior to the closing of the Acquisition that
within ten (10) days after the closing of the Acquisition such UK
Subsidiary would complete the Whitewash Procedure and satisfy all of
the requirements of subclause (i) above, and (B) such UK Subsidiary
shall have in fact completed the Whitewash Procedure and satisfied
all of the requirements of subclause (i) above, within ten (10) days
after the closing of the Acquisition;
provided, however, that notwithstanding anything herein to the contrary,
in the case of Acquisitions by the UK Borrower or a UK Subsidiary of the
Capital Stock of one or more UK Companies the aggregate purchase price of
which does not exceed the Dollar Equivalent of $3,000,000, the UK
Obligations shall not be secured by all Acquired Assets of such UK
Companies to the extent that the Borrower or any of its Affiliates would
need to undergo a Whitewash Procedure solely in order to provide such
Acquired Assets of such UK Companies as security for such UK Obligations,
but instead such UK Obligations shall be secured by a first priority
pledge of, and fixed charge over, one hundred percent (100%) of the
Capital Stock of such UK Companies;
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(h) the Transaction Parties shall have complied with the
requirements of ss.ss.9.16 and 9.17 hereof;
(i) the Borrower shall have demonstrated to the reasonable
satisfaction of the Agent (based on, among other things, operating and
financial projections and pro forma financial statements delivered to the
Agent and certified by the Chief Financial Officer) that, immediately
after giving effect to the Acquisition (including the making of any Loans
and the incurrence of any Indebtedness required to finance the
Acquisition), all covenants (including covenants contained in ss.11 of
this Agreement) contained herein (A) would have been satisfied on a pro
forma basis as at the end of and for the Most Recent Reference Period, and
(B) will be satisfied on a pro forma basis through the Term Loan B
Maturity Date;
(j) the Borrower shall have Liquidity (assuming pro-forma covenant
compliance) of at least $10,000,000 after giving effect to the
Acquisition;
(k) the Agent shall have received satisfactory audits or independent
accountant reviews of the target company;
(l) any and all pro-forma adjustments to historical EBITDA shall be
acceptable to the Agent in its reasonable discretion (provided that
contractual and adequately documented reductions in compensation payable
to former owners and/or rental income payable to Affiliates which are
effective as of the Drawdown Date shall be deemed acceptable to the
Agent);
(m) no Default or Event of Default is continuing immediately prior
to such Acquisition, and no Default or Event of Default would result from
such Acquisition;
(n) the Agent shall have received satisfactory evidence that the
business to be acquired has complied with, and, following the consummation
of the Acquisition, is in compliance with, in all material respects all
Applicable Laws, including Environmental Laws (without limiting the
foregoing, if Real Estate is being acquired as part of the Acquisition,
the Agent shall have received environmental surveys and appraisals
reasonably satisfactory to the Agent);
(o) a commercial finance exam satisfactory to the Agent shall have
been delivered to the Agent prior to inclusion of the target company's
assets in the Borrowing Base;
(p) prior to the closing of the Acquisition, the Borrower has
delivered to the Agent the definitive acquisition documents between the
applicable Transaction Parties and the applicable selling entities; and
(q) the Agent shall have received
(i) a copy of the favorable legal opinion addressed to the
Borrower and/or the Subsidiary of the Borrower which is
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party to the Acquisition, from counsel to the seller in the
Acquisition, with such legal opinion either addressed to the Agent
and the Lenders or accompanied by a reliance letter authorizing the
Agent and the Lenders to rely on such opinion, with such opinion
and, if applicable, such reliance letter, in form and substance
satisfactory to the Agent;
(ii) a copy of the favorable legal opinion addressed to the
seller in such Acquisition from counsel to the Borrower and/or the
Subsidiary of the Borrower which is party to the Acquisition, with
such legal opinion either addressed to the Agent and the Lenders or
accompanied by a reliance letter authorizing the Agent and the
Lenders to rely on such opinion, with such opinion and, if
applicable, such reliance letter, in form and substance satisfactory
to the Agent;
(iii) in the case of an Acquisition of a UK Company, a
favorable legal opinion addressed to the Lenders and the Agent, in
form and substance satisfactory to the Agent, from counsel to the UK
Borrower, as to, among other things, the effectiveness of the
Collateral and/or UK Collateral granted pursuant to clauses (f) and
(g) above; and
(iv) in the case of an Acquisition of a Domestic Company, to
the extent requested by the Agent, a favorable legal opinion
addressed to the Lenders and the Agent, in form and substance
satisfactory to the Agent, from counsel (including any local
counsel, as applicable) to the Borrower.
Permitted Additional Acquisition Loan. Any Additional Acquisition Loan or
UK Acquisition Loan requested by the Borrower after the Restatement Effective
Date so long as, in each case, all of the following conditions are satisfied:
(a) all proceeds of such Additional Acquisition Loan shall be used
in compliance with ss.8.15(a)(iii) hereof; and
(b) the aggregate amount of any Additional Acquisition Loan (after
giving effect to any requests therefor), plus all Additional Acquisition
Loans previously made, shall not exceed the aggregate amount of Net Cash
Proceeds of Permitted Capital Stock and Permitted Disqualified Capital
Stock issued and sold by the Borrower after the Restatement Effective Date
and prior to June 30, 1999, the entire proceeds of which have been used to
finance Permitted Acquisitions.
Permitted Capital Stock. Any Capital Stock of any Person with respect to
which (by its terms or the terms of any Security into which it is convertible,
exercisable or exchangeable, or otherwise) such Person has no obligation
(whether as a result of the passage of time or the occurrence of any other event
or contingency) to make or pay any Distribution.
Permitted Dispositions. Dispositions permitted by ss.10.6.
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Permitted Disqualified Capital Stock. Disqualified Capital Stock issued by
the Borrower (a) which, by its terms or by the terms of any Security into which
it is convertible, exercisable or exchangeable, is not required to be redeemed
or repurchased prior to one (1) year after the Term Loan B Maturity Date, (b)
all other terms of which (including mandatory redemption or repurchase
obligations, redemption or repurchase premiums, covenants and remedies) shall
have been approved in writing by the Agent and the Required Lenders (such
approval not to be unreasonably withheld), and (c) all the Net Cash Proceeds
from the issuance of which are used concurrently with such issuance to finance a
Permitted Acquisition.
Permitted Disqualified Capital Stock Documents. Each of the Instruments
pursuant to which any Disqualified Capital Stock is issued.
Permitted Indebtedness. Indebtedness permitted by ss.10.1.
Permitted Inventory Locations. The distribution locations and
manufacturing facilities of the US Transaction Parties located in the United
States and listed on Schedule 2 hereto, as such Schedule 2 may be supplemented
from time to time with the consent of the Agent, such consent not to be
unreasonably withheld.
Permitted Liens. Liens, security interests and other encumbrances
permitted by ss.10.2.
Permitted Payments to Parent. Without duplication,
(a) payments by the Borrower to Parent in an amount sufficient to
permit Parent to pay reasonable and necessary operating expenses and other
general corporate expenses to the extent such expenses are related and are
fairly allocable to the Borrower and its Subsidiaries, provided that (i)
such expenses do not exceed $250,000 in any fiscal year and (ii) at the
time of any such payment, no Default or Event of Default is continuing;
and
(b) payments to Parent by the Borrower in amounts required for
Parent to pay its federal, state or local income taxes ("Tax Payments");
provided that (i) such Tax Payments for any period do not exceed the
lesser of (A) the amount of such income taxes of Parent which are
attributable to the net income of the Borrower for such period and (B) the
amount of such income taxes which would be required to be paid in cash by
the Borrower and its Subsidiaries for such period on a consolidated basis
if the Borrower and its Subsidiaries were not consolidated with Parent and
its other Subsidiaries for tax purposes (and assuming that all payments
made to the Parent pursuant to this clause (b) are treated as deductible
expenses of the Borrower in the year in which the obligation to make such
payment accrues); and (ii) any Tax Payments shall either be used by Parent
to pay such tax liabilities within fifteen (15) days of Parent's receipt
of such payment or refunded to the Borrower.
Permitted Seller Subordinated Debt. Indebtedness of the Borrower, or any
Subsidiary of the Borrower which is the purchaser in a Permitted Acquisition,
(whether in respect of promissory notes, non-compete covenants, earn-out
obligations or other deferred payment obligations) incurred to any seller or
affiliate of any seller to finance a Permitted Acquisition, (a) which is
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subordinated on terms reasonably satisfactory to the Agent, (b) which is not
secured by any assets of the Borrower or any of its Subsidiaries, (c) which is
not guaranteed by the Borrower or a Subsidiary of the Borrower (except that the
Borrower shall be permitted to guarantee any such Indebtedness so long as such
guarantee is on terms (and subject to subordination provisions) reasonably
satisfactory to the Agent), (d) which requires no scheduled principal payment
prior to one (1) year after the Term Loan B Maturity Date, and (e) for which all
other terms (including mandatory prepayment or redemption obligations,
prepayment or redemption premiums, covenants, events of default, remedies and
subordination provisions) shall have been approved in writing by the Agent and
the Required Lenders (such approval not to be unreasonably withheld).
Permitted Seller Subordinated Debt Documents. Each of the Instruments
evidencing any Permitted Seller Subordinated Debt or pursuant to which any
Permitted Seller Subordinated Debt is issued, incurred or guaranteed.
Permitted Subordinated Debt. Indebtedness for borrowed money of the
Borrower (a) which is subordinated on terms reasonably satisfactory to the
Agent, (b) which is not secured by any assets of the Borrower or any of its
Subsidiaries, (c) which is not guaranteed by any Subsidiary of the Borrower, (d)
which requires no scheduled principal payment prior to one (1) year after the
Term Loan B Maturity Date, (e) for which all other terms (including mandatory
prepayment or redemption obligations, prepayment or redemption premiums,
covenants, events of default, remedies and subordination provisions) shall have
been approved in writing by the Agent and the Required Lenders, and (f) all Net
Cash Proceeds of which are used, concurrently with the issuance or incurrence of
such Indebtedness, to finance a Permitted Acquisition.
Permitted Subordinated Debt Documents. Instruments evidencing any
Permitted Subordinated Debt or pursuant to which any Permitted Subordinated Debt
is issued, incurred or guaranteed.
Permitted UK Working Capital Facility. A credit facility for the UK
Borrower (a) which is established in connection with, or following the
completion of, a Permitted Acquisition of a UK Company, (b) the proceeds of
which are used solely for working capital purposes, (c) which is subject to
intercreditor arrangements between the Acquisition Loan Lenders and the lenders
under such UK credit facility in form and substance satisfactory to the Agent
and the Required Acquisition Loan Lenders, and (d) for which the scope and
priority of the Liens securing such facility are satisfactory to the Agent and
the Required Acquisition Loan Lenders.
Person. Any individual, corporation, partnership, limited liability
company, limited liability partnership, trust, unincorporated association,
business, or other legal entity, and any government or any governmental agency
or political subdivision thereof.
Plan. Any pension plan as defined in Section 3(2) of ERISA, which is
maintained or contributed to by (or to which there is an obligation to
contribute of) the Borrower, a Subsidiary or an ERISA Affiliate, and each such
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plan for the five year period immediately following the latest date on which the
Borrower, a Subsidiary, or an ERISA Affiliate maintained, contributed to or had
an obligation to contribute to such plan.
Prepayment Obligations Cash Collateral Account. A cash collateral account
established and maintained by the Agent pursuant to a cash collateral agreement
in form and substance satisfactory to the Agent, into which shall be deposited
Net Cash Proceeds under the circumstances contemplated by ss.4.9(a)(iv)(C).
Pro Forma Balance Sheet. See ss.8.4(b).
Property. Any interest in any kind of property or asset, whether real,
personal or mixed, and whether tangible or intangible.
Purchase Money Indebtedness. With respect to any Transaction Party, any
Indebtedness of such Person to any seller or other Person which (a) is incurred
solely to finance the acquisition (including, in the case of Capitalized Lease
obligations, the lease) by such Transaction Party of any tangible property which
is directly related to a Related Business of the Borrower, (b) is incurred
substantially concurrently with such acquisition, (c) is not guaranteed by the
Borrower or any of its Subsidiaries (except that the Borrower shall be permitted
to guarantee any Purchase Money Indebtedness so long as such guarantee is on
terms reasonably satisfactory to the Agent, (d) is secured only by the property
so financed and (e) does not exceed the cost (determined in accordance with
GAAP) to the Transaction Party of the property so acquired.
Rate Protection Agreement. Any interest rate swap, cap, collar or similar
agreement or arrangement entered into, from time to time, by the Borrower and a
Counterparty to protect the Borrower against fluctuations in interest rates on
Indebtedness of the Borrower and its Subsidiaries.
Real Estate. All real property now or in the future owned or leased (as
lessee or sublessee) by the Borrower or any of its Subsidiaries.
Record. The grid attached to a Note, or the continuation of such grid, or
any other similar record, including computer records, maintained by any Lender
with respect to any Loan referred to in such Note.
Recovery Event. The receipt by the Borrower or any Subsidiary of the
Borrower of any cash insurance proceeds payable by reason of theft, physical
destruction or damage or any other similar event with respect to any Property of
the Borrower or any Subsidiary of the Borrower (including, without limitation,
business interruption insurance).
Reference Period. Each period of four (4) consecutive fiscal quarters of
the Borrower.
Refinanced Indebtedness. See ss.12.23.
Register. See ss.16.3.
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Reimbursement Obligation. The Borrower's obligation to reimburse the
Issuing Bank and the Lenders on account of any drawing under any Letter of
Credit as provided in ss.3.2.
Related Business. The business conducted by the Borrower and its
Subsidiaries on the Original Closing Date and any similar line of business.
Relative. In relation to any Person, any spouse, parent, grandparent,
child, grandchild, brother or sister of such Person, or the spouse of any of the
foregoing.
Replaced Lender. See ss.2.17.
Replacement Lender. See ss.2.17.
Required Acquisition Loan Lenders. Non-Defaulting Lenders the sum of whose
(a) outstanding Acquisition Loan Commitments represents an amount greater than
fifty percent (50%) of the Total Acquisition Loan Commitment, or (b) after the
termination of the Acquisition Loan Commitment Period, outstanding Acquisition
Loans represents an amount greater than fifty percent (50%) of all outstanding
Acquisition Loans made by Non-Defaulting Lenders.
Required Lenders. Non-Defaulting Lenders, the sum of whose (a) outstanding
(i) Term Loan A Commitments, or after the termination thereof, outstanding Term
Loans A, (i) Term Loan B Commitments, or after the termination thereof,
outstanding Term Loans B, (iii) Acquisition Loan Commitments or, after the
termination thereof, outstanding Acquisition Loans, (iv) UK Acquisition Loan
Commitments or, after the termination thereof, outstanding UK Acquisition Loans,
(v) Revolving Credit Commitments or, after the termination thereof, outstanding
Revolving Credit Loans and (vi) Letter of Credit Exposure, represents an amount
greater than 50% of the sum of (b) all outstanding (i) Term Loan A Commitments,
or after the termination thereof, outstanding Term Loans A, (i) Term Loan B
Commitments, or after the termination thereof, outstanding Term Loans B, (iii)
Acquisition Loan Commitments or, after the termination thereof, all outstanding
Acquisition Loans, (iv) UK Acquisition Loan Commitments or, after the
termination thereof, outstanding UK Acquisition Loans, (v) Revolving Credit
Commitments or, after the termination thereof, all outstanding Revolving Credit
Loans and (vi) Letter of Credit Exposure.
Required Revolving Credit Lenders. Non-Defaulting Lenders the sum of whose
(a) outstanding Revolving Credit Commitments represents an amount greater than
fifty percent (50%) of the Total Revolving Credit Commitment, or (b) after the
termination of the Revolving Credit Commitments, outstanding Revolving Credit
Loans represents an amount greater than fifty percent (50%) of all outstanding
Revolving Credit Loans made by Non-Defaulting Lenders.
Required Term Loan A Lenders. Non-Defaulting Lenders the sum of whose (a)
outstanding Term Loan A Commitments represents an amount greater than fifty
percent (50%) of the Total Term Loan A Commitment, or (b) after the termination
of the Term Loan A Commitments, outstanding Term Loans A represents an amount
greater than fifty percent (50%) of all outstanding Term Loans A made by
Non-Defaulting Lenders.
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Required Term Loan B Lenders. Non-Defaulting Lenders the sum of whose (a)
outstanding Term Loan B Commitments represents an amount greater than fifty
percent (50%) of the Total Term Loan B Commitment, or (b) after the termination
of the Term Loan B Commitments, outstanding Term Loans B represents an amount
greater than fifty percent (50%) of all outstanding Term Loans B made by
Non-Defaulting Lenders.
Required UK Acquisition Loan Lenders. Non-Defaulting Lenders the sum of
whose (a) outstanding UK Acquisition Loan Commitments represents an amount
greater than fifty percent (50%) of the Total UK Acquisition Loan Commitment, or
(b) after the termination of the Acquisition Loan Commitment Period, outstanding
UK Acquisition Loans represents an amount greater than fifty percent (50%) of
all outstanding UK Acquisition Loans made by Non-Defaulting Lenders.
Reserves. Such amounts as the Agent may from time to time establish and
revise (a) to reflect events, conditions, contingencies or risks which do or may
adversely affect (A) any Collateral or its value or (B) the security interests
or other rights of the Agent or the Lenders in or with respect to any Collateral
or (b) to reflect the belief of the Agent that any Borrowing Base Report or
other collateral report or financial information furnished by or on behalf of
the Borrower or any of its Subsidiaries to the Agent or the Lenders was or may
have been incomplete, inaccurate or misleading in any respect. Without limiting
the foregoing, the Agent shall be entitled from time to time to establish and
revise Reserves to the extent that the Agent determines that: (i) dilution with
respect to Accounts Receivable of the US Transaction Parties for any period has
increased or may be reasonably anticipated to increase above historical levels
or is above levels that are consistent with the then applicable advance rate
against Eligible Accounts Receivable, (ii) the creditworthiness of account
debtors of the US Transaction Parties has declined or is not consistent with the
then applicable advance rate against Eligible Accounts Receivable, (iii) the
turnover period for inventory of the US Transaction Parties has changed in any
adverse respect or is not consistent with the then applicable advance rate for
Eligible Inventory, (iv) the liquidation value of Eligible Inventory, or any
category thereof, has decreased or is not consistent with the then applicable
advance rate for Eligible Inventory, or (v) the nature or quality of the
inventory of the US Transaction Parties has deteriorated in any respect or the
mix of such inventory has changed in any adverse respect.
Restatement Effective Date. As defined in the Amendment Agreement.
Revolving Credit Commitment. With respect to a Lender, the commitment of
such Lender to make Revolving Credit Loans hereunder in the amount set forth on
Schedule 1 hereto, as the same may be reduced from time to time; or, if such
commitment is terminated, zero.
Revolving Credit Commitment Fee. See ss.5.1(c)(i).
Revolving Credit Commitment Percentage. With respect to each Lender with a
Revolving Credit Commitment, the percentage of such Lender's Revolving Credit
Commitment to the Total Revolving Credit Commitment or, after the termination of
the Total Revolving Credit Commitment, the
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percentage of such Lender's outstanding Revolving Credit Loans to the aggregate
outstanding Revolving Credit Loans.
Revolving Credit Lenders. Lenders with Revolving Credit Commitments or,
after the termination of the Revolving Credit Commitments, Lenders with
outstanding Revolving Credit Loans.
Revolving Credit Loan Maturity Date. November 19, 2003.
Revolving Credit Loans. Loans made or to be made by the Lenders with a
Revolving Credit Commitment to the Borrower pursuant to ss.2.1(c).
Revolving Credit Note Record. A Record with respect to a Revolving Credit
Note.
Revolving Credit Notes. See ss.2.5.
Sea-Lect. Sea-Lect Products, Inc., a Delaware corporation, formerly known
as "SLP Acquisition Co."
Sea-Lect Acquisition. The acquisition by SLP Acquisition of all of the
assets of Sea-Lect Products, Inc., a Washington corporation, pursuant to the
Sea-Lect Acquisition Documents.
Sea-Lect Acquisition Agreement. The Asset Purchase Agreement, dated as of
May 11, 1998, by and among the shareholders named therein and SLP Acquisition.
Sea-Lect Acquisition Documents. The Sea-Lect Acquisition Agreement, and
all other agreements and documents relating to the Sea-Lect Acquisition.
Securities. Any Capital Stock, partnership interests, voting trust
certificates, bonds, debentures, notes, or other evidences of Indebtedness,
secured or unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities."
Securities Act. The Securities Act of 1933, as amended, and the rules and
regulations promulgated by the Securities and Exchange Commission thereunder.
Security Agreement. The Security Agreement, dated as of the Original
Closing Date, among the Agent and the US Transaction Parties, as amended by the
First Amendment to Security Documents Agreement.
Security Documents. The Security Agreement, the Stock Pledge Agreement,
the First Amendment to Security Documents Agreement, the Agency Account
Agreements, the Mortgages and each other Instrument executed and delivered by
any Transaction Party to or in favor of the Agent or any Lender and designated a
"Security Document" for purposes of this Agreement.
Security Instrument. Any security agreement, chattel mortgage, assignment,
financing or similar statement or notice, continuation statement,
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other agreement or Instrument or amendment or supplement to any thereof,
providing for, evidencing or perfecting any Lien.
Senior Subordinated Indenture. The Senior Subordinated Indenture, dated as
of April 21, 1998, by and among the Borrower and IBJ Schroder Bank & Trust
Company, as Trustee.
Senior Subordinated Note Documents. The Senior Subordinated Notes, the
Senior Subordinated Indenture, any and all guarantees of any Subsidiary of the
Borrower given or made pursuant to the Senior Subordinated Indenture, and each
of the Instruments evidencing the Senior Subordinated Notes or pursuant to which
any Senior Subordinated Note is issued, incurred or guaranteed.
Senior Subordinated Notes. The Senior Subordinated Notes due 2005 issued
by the Borrower in accordance with the terms contained in the Offering
Memorandum, in an aggregate principal amount outstanding not to exceed
$110,000,000, and the Exchange Notes.
Settlement. Among the Lenders, the making or receiving of payments in
immediately available funds to the extent necessary to cause each Lender's
actual share of the outstanding amount of Loans (after giving effect to any US
Loan Request) to be equal to each Lender's Commitment Percentage of the
outstanding amount of such Loans, in any case where, prior to such event or
action, the actual share is not so equal.
Settlement Amount. See ss.2.4(a).
Settlement Date. (a) The Drawdown Date relating to any US Loan Request,
(b) Friday of each week, or if Friday is not a Business Day, the Business Day
immediately following such Friday, (c) the Business Day immediately following
the Agent becoming aware of the existence of an Event of Default, (d) any
Business Day on which the amount of Revolving Credit Loans outstanding from
BankBoston plus BankBoston's Revolving Credit Commitment Percentage of the
Letter of Credit Exposures is equal to or greater than BankBoston's Revolving
Credit Commitment Percentage of the Total Revolving Credit Commitment, (e) the
Business Day immediately following any Business Day on which the amount of Loans
outstanding increases or decreases by more than $2,000,000 as compared to the
previous Settlement Date, (f) any day on which any conversion of a Base Rate
Loan to a Eurocurrency Rate Loan occurs or (g) any Business Day on which (i) the
amount of outstanding Loans decreases and (ii) the amount of the Agent's Loans
outstanding equals zero Dollars ($0).
Settling Lender. See ss.2.4(a).
Shareholder Agreements. See ss.12.6.
SLP Acquisition. SLP Acquisition Co., a Delaware corporation, now known as
Sea-Lect Products, Inc.
Solvent. See ss.8.5(b).
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Standard & Poor's. Standard & Poor's Corporation.
Sterling or (pound). The lawful currency for the time being of the United
Kingdom.
Sterling Equivalent. On any date of determination, with respect to any
amount denominated in Sterling, such amount of Sterling, and with respect to any
amount denominated in Dollars, the amount (as conclusively ascertained by the UK
Fronting Lender absent manifest error) of Sterling which could be purchased by
the UK Fronting Lender (in accordance with its normal banking practices) with
that amount in Dollars in the London foreign exchange market at the spot rate of
exchange prevailing at or about 11:00 a.m. (London time), on such date of
determination.
Stock Pledge Agreement. The Stock Pledge Agreement, , dated as of the
Original Closing Date, among the Borrower, Brittain, Sea-Lect, and the Agent, as
amended by the First Amendment to Security Documents Agreement.
Subordinated Debt. Indebtedness under or in respect of the Subordinated
Debt Documents.
Subordinated Debt Documents. The Senior Subordinated Note Documents, the
Exchange Note Documents, the Permitted Subordinated Debt Documents, and the
Permitted Seller Subordinated Debt Documents.
Subsidiary. Any corporation, limited liability company, association,
trust, or other business entity of which the designated parent shall at any time
own directly or indirectly through a Subsidiary or Subsidiaries at least a
majority (by number of votes) of the outstanding Voting Stock and, in relation
to the UK Borrower, any "subsidiary" or "subsidiary undertaking" as defined in
the Companies Act 1989, Sections 144 and 21 and Schedule 9 respectively.
Syndication Agent. Royal Bank of Canada acting as syndication agent for
the Lenders.
Tax Sharing Agreements. See ss.12.6.
Term A Notes. See ss.2.5.
Term A Note Record. A record with respect to a Term A Note.
Term B Notes. See ss.2.5.
Term B Note Record. A record with respect to a Term B Note.
Term Loans A. The term loans made or to be made by the Lenders with a Term
Loan A Commitment to the Borrower in the aggregate principal amount of
$35,000,000 pursuant to ss.2.1(a).
Term Loan A Commitment. With respect to a Lender, the commitment of such
Lender to make Term Loans A to the Borrower hereunder in the amount set forth on
Schedule 1 hereto, as the same may be reduced from time to time; or if such
commitment is terminated, zero.
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Term Loan A Commitment Percentage. With respect to each Lender with a Term
Loan A Commitment, the percentage of such Lender's Term Loan A Commitment to the
Total Term Loan A Commitment or, after the termination of the Total Term Loan A
Commitment, the percentage of such Lender's outstanding Term Loan A to the
aggregate outstanding Term Loans A.
Term Loan A Lenders. Lenders with Term Loan A Commitments or, after the
termination of the Term Loan A Commitments, Lenders with outstanding Term Loans
A.
Term Loan A Maturity Date. November 19, 2003.
Term Loan A Payment Date. See ss.4.5.
Term Loan A Percentage. With respect to each Lender holding a Term Loan A,
the percentage of such Lender's Term Loan A to the aggregate principal amount of
all Term Loans and (after the expiration of the Acquisition Loan Commitment
Period) Acquisition Loans and UK Acquisition Loans outstanding at such time.
Term Loans B. The term loans made or to be made by the Lenders with a Term
Loan B Commitment to the Borrower in the aggregate principal amount of
$45,000,000 pursuant to ss.2.1(b).
Term Loan B Commitment. With respect to a Lender, the commitment of such
Lender to make Term Loans B to the Borrower hereunder in the amount set forth on
Schedule 1 hereto, as the same may be reduced from time to time; or if such
commitment is terminated, zero.
Term Loan B Commitment Percentage. With respect to each Lender with a Term
Loan B Commitment, the percentage of such Lender's Term Loan B Commitment to the
Total Term Loan B Commitment or, after the termination of the Total Term Loan B
Commitment, the percentage of such Lender's outstanding Term Loan B to the
aggregate outstanding Term Loans B.
Term Loan B Lenders. Lenders with Term Loan B Commitments or, after the
termination of the Term Loan B Commitments, Lenders with outstanding Term Loans
B.
Term Loan B Maturity Date. February 1, 2005.
Term Loan B Payment Date. See ss.4.6.
Term Loan B Percentage. With respect to each Lender holding a Term Loan B,
the percentage of such Lender's Term Loan B to the aggregate principal amount of
all Term Loans and (after the expiration of the Acquisition Loan Commitment
Period) Acquisition Loans and UK Acquisition Loans outstanding at such time.
Term Loans. Term Loans A and Term Loans B.
Term Note Records. Term A Note Records and Term B Note Records.
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Term Notes. The Term A Notes and the Term B Notes.
Total Acquisition Commitment. The sum of the Total Acquisition Loan
Commitments and Total UK Acquisition Loan Commitments of the Lenders, as in
effect from time to time. The Total Acquisition Commitment as of the Restatement
Effective Date is $65,000,000.
Total Acquisition Loan Commitment. The sum of the Acquisition Loan
Commitments of the Lenders, as in effect from time to time.
Total Commitment. The sum of the Commitments of the Lenders, as in effect
from time to time.
Total Revolving Credit Commitment. The sum of the Revolving Credit
Commitments of the Lenders, as in effect from time to time. The Total Revolving
Credit Commitment as of the Restatement Effective Date is $25,000,000.
Total Term Loan A Commitment. The sum of the Term Loan A Commitments of
the Lenders, as in effect from time to time. The Total Term Loan A Commitment as
of the Restatement Effective Date is $35,000,000.
Total Term Loan B Commitment. The sum of the Term Loan B Commitments of
the Lenders, as in effect from time to time. The Total Term Loan B Commitment as
of the Restatement Effective Date is $45,000,000.
Total UK Acquisition Loan Commitment. The sum of the UK Acquisition Loan
Commitments of the Lenders, as in effect from time to time.
Tranche. The respective facility and commitments utilized in making Loans
hereunder, with there being five (5) separate Tranches, i.e., Term Loans A, Term
Loans B, Acquisition Loans, UK Acquisition Loans and Revolving Credit Loans.
Transaction Parties. Collectively, the Borrower and all Guarantors.
Type. As to any Loan, its nature as a Base Rate Loan or a Eurocurrency
Rate Loan.
UCC. The Uniform Commercial Code, as amended from time to time, as in
effect in the applicable jurisdiction.
UK Acquisition Loan Commitment. With respect to a Lender, the commitment
of such Lender to purchase a risk participation from the UK Fronting Lender in
UK Acquisition Loans to the UK Borrower, in the amount set forth on Schedule 1
hereto, as the same may be reduced from time to time, or after the Acquisition
Loan Commitment Period, or if such Commitment is terminated, zero.
UK Acquisition Commitment Fee. See ss.5.1(c)(ii).
UK Acquisition Loan Commitment Percentage. With respect to each Lender
with a UK Acquisition Loan Commitment, the percentage of such
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Lender's UK Acquisition Loan Commitment to the Total UK Acquisition Loan
Commitment or, after the termination of the UK Acquisition Loan Commitments, the
percentage of such Lender's outstanding UK Acquisition Loans to the aggregate
outstanding UK Acquisition Loans.
UK Acquisition Loan Percentage. With respect to each Lender holding a UK
Acquisition Loan after the termination of the UK Acquisition Loan Commitments,
the percentage of such Lender's UK Acquisition Loans to the aggregate principal
amount of all Term Loans, Acquisition Loans and UK Acquisition Loans outstanding
at such time.
UK Acquisition Loans. Acquisition loans made or to be made by the UK
Fronting Lender to the UK Borrower pursuant to ss.2.1(e).
UK Borrower. A UK Subsidiary of the Borrower that shall become party
hereto as the "UK Borrower" pursuant to ss.13.8 of this Agreement by executing
and delivering an Accession Agreement substantially in the form attached hereto
as Exhibit K.
UK Collateral. Any Collateral which, by the terms of the Security
Documents applicable thereto, is or is intended to constitute collateral
security for all or part of the UK Obligations, but not any of the other
Obligations.
UK Company. A private limited liability company organized under the laws
of England and Wales.
UK Fronting Fee. See ss.5.1(e).
UK Fronting Lender. BankBoston, acting through its London, England branch
office, in its capacity as fronting bank with respect to UK Acquisition Loans,
provided that in the event the UK Fronting Lender is also an Acquisition Loan
Lender, such Person's funding requirements in its capacity as the UK Fronting
Lender shall not include its independent requirement, in its individual
capacity, to fund as an Acquisition Loan Lender.
UK Insolvency Event. Any of the following events or circumstances: (i) the
UK Borrower or any of its Subsidiaries shall be deemed unable to pay its debts
within the meaning of section 123(l) (a), (b), (e) or (2) of the Insolvency Act
1986 or shall otherwise become insolvent or stop or suspend making payments
(whether of principal or interest) with respect to all or any class of its
Indebtedness or announce an intention to do so, (ii) a meeting shall be convened
by the UK Borrower or any of its Subsidiaries for the purpose of passing any
resolution to purchase, reduce or redeem any of its Capital Stock or to comply
with section 142 of the Companies Act 1985, (iii) any petition shall be
presented or other step taken for the purpose of the appointment of an
administrator or the winding up the UK Borrower or any of its Subsidiaries (not
being, in the case of a winding up, a petition which the UK Borrower can
demonstrate to the reasonable satisfaction of the Agent, by providing an opinion
of leading counsel to that effect, is frivolous, vexatious or an abuse of the
process of the court or relates to a claim to which the UK Borrower has a good
defense and which is being vigorously contested by the UK Borrower) or an order
shall be made or resolution passed for the winding-up of the UK Borrower or any
of its Subsidiaries or a notice shall be issued by convening a
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meeting for the purpose of passing any such resolution (except for the purpose
of a solvent amalgamation or reconstitution which shall have been approved by
the Agent), or (iv) any steps shall be taken, or negotiations commenced by the
UK Borrower or any of its Subsidiaries or by any of their respective creditors
with a view to proposing any kind of composition, compromise or arrangement
involving such Person and any of its creditors or for the presentation of a
petition for the appointment of an administrator.
UK Loan Request. See ss.2.3(b).
UK Obligations. All Obligations of any of the Transaction Parties to the
UK Fronting Lender or the Agent under or in respect of or in connection with any
of the UK Acquisition Loans, and including any UK Fronting Fees and all other
obligations arising under any other instruments at any time evidencing any
thereof, or under or in respect of the guarantee by any Transaction Party of any
of the foregoing obligations of any other Transaction Party.
UK Office. BankBoston's London branch at 39 Victoria Street, London SW1H
OED, or such other location in the United Kingdom as the UK Fronting Lender may
from time to time designate to the Agent and the UK Borrower as the UK Office.
UK Qualifying Lender. A bank, trust or other financial institution which
(i) is a "lender" as defined in Section 840A of the Income and Corporation Taxes
Act 1988 (or any statutory reenactment or modification thereof in substantially
the same form and context as at June 21, 1996) which is within the charge to
United Kingdom corporation tax as regards interest payable or paid to it under
this Agreement; or (ii) if at any time Section 349 or Section 840A of the Income
and Corporation Taxes Act 1988 (or a statutory re-enactment or modification
thereof, in substantially the same form and context as at the Original Closing
Date) shall not at any time continue in full force and effect, is a bank
carrying on through its Domestic Lending Office or Eurocurrency Lending Office
for the purposes of this Agreement a bona fide banking business in the United
Kingdom which is within the charge to United Kingdom corporation tax as regards
any interest payable or paid to it under this Agreement.
UK Risk Participation Fee. See ss.2.4(b)(ii).
UK Subsidiary. A Subsidiary of the Borrower organized under the laws of
England and Wales.
Uniform Customs. With respect to any Letter of Credit, the Uniform Customs
and Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500 or any successor version thereto adopted by the
Issuing Bank in the ordinary course of its business as a letter of credit issuer
and in effect at the time of issuance of such Letter of Credit.
United Kingdom. The United Kingdom of Great Britain and Northern Ireland.
United States. The United States of America.
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Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which
the Borrower does not reimburse the Issuing Bank and the Lenders on the date
specified in, and in accordance with, ss.3.2.
US Loan Request. See ss.2.3(a).
US Transaction Parties. Collectively, the Borrower and all Guarantors
which are Domestic Subsidiaries.
Voting Stock. Stock or similar interests, of any class or classes (however
designated), the holders of which are at the time entitled, as such holders, to
vote for the election of a majority of the directors (or persons performing
similar functions) of the corporation, association, trust or other business
entity involved, whether or not the right so to vote exists by reason of the
happening of a contingency.
Western Methods. Western Methods Machinery Corporation, a California
corporation.
Western Methods Acquisition. Shall mean the acquisition by the Borrower of
all of the Capital Stock of Western Method pursuant to the Western Method
Acquisition Documents.
Western Methods Acquisition Agreement. The Stock Purchase Agreement, dated
as of November 25, 1997, by and among the Borrower and James N. Smith, Stella M.
Smith and Smith Charitable Remainder Unitrust No. 97-1.
Western Methods Acquisition Documents. The Western Method Acquisition
Agreement, and all other agreements and documents relating to the Western
Methods Acquisition.
Whitewash Procedure. Procedures pursuant to which the UK Borrower and/or a
UK Subsidiary and its directors satisfy the requirements of Sections 151 through
158 of the Companies Act 1985 (England) in respect of this Agreement and the
other Loan Documents.
Wichita. Wichita Manufacturing, Inc., a California corporation.
1.2. Rules of Interpretation.
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to
time in accordance with its terms and the terms of this Agreement. The
singular includes the plural and the plural includes the singular. A
reference to any Applicable Law includes any amendment or modification to
such Applicable Law. A reference to any Person includes its permitted
successors and assigns. Accounting terms not otherwise defined herein have
the meanings assigned to them by GAAP. The words "include", "includes" and
"including" are not limiting. All terms not specifically defined herein or
by GAAP, which terms are defined in the Uniform Commercial Code as in
effect in the State of New York, have the meanings assigned to them
therein. Reference to a
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particular "ss." refers to that section of this Agreement unless otherwise
indicated. The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Agreement as a whole and not to any particular
section or subsection of this Agreement.
(b) This Agreement contains references to the Borrower and/or its
Subsidiaries in numerous places. These references shall not affect or
impair in any respect the prohibitions contained in this Agreement on the
Borrower's forming or investing in any Subsidiaries.
(c) Any statute, statutory instrument, regulation, by-law or other
requirement of United States federal, state or local law and any United
States legal term for any action, remedy, method of judicial proceeding,
legal documents, legal statutes, procedure, court, official or any legal
concept or doctrine or other expression shall in respect of any non-United
States jurisdiction be deemed to include that which most nearly
approximates in such non-United States jurisdiction such United States
statute, statutory instrument, regulation, by-law or other requirement of
law or legal term.
2. AMOUNT AND TERMS OF CREDIT FACILITIES.
2.1. The Commitments.
(a) Term Loans A. On the Restatement Effective Date (i) all Existing
Term Loans A shall be continued as Term Loans A hereunder and (ii)
$7,631,579 of Existing Acquisition Loans outstanding on the Restatement
Effective Date shall be converted to Term Loans A hereunder, such that,
after giving effect to such continuation and such conversion, the
aggregate outstanding principal amount of Term Loans A hereunder is
$35,000,000.
(b) Term Loans B. On the Restatement Effective Date (i) all Existing
Term Loans B shall be continued as Term Loans B hereunder and (ii)
$7,368,421 of Existing Acquisition Loans outstanding on the Restatement
Effective Date shall be converted to Term Loans B hereunder, such that,
after giving effect to such continuation and such conversion, the
aggregate outstanding principal amount of Term Loans B hereunder is
$45,000,000.
(c) Revolving Credit Loans. Subject to the terms and conditions set
forth in this Agreement, each Revolving Credit Lender severally agrees to
lend to the Borrower Revolving Credit Loans which may be repaid and
reborrowed in accordance with the provisions hereof. The aggregate
principal amount of (i) Revolving Credit Loans of any Revolving Credit
Lender at any time (and after giving effect to any requests therefor),
plus (ii) such Lender's Revolving Credit Commitment Percentage of all
Letter of Credit Exposure at such time plus (iii) such Lender's Revolving
Credit Commitment Percentage of the Excess UK Working Capital
Outstandings, shall not exceed the lesser of (x) the Revolving Credit
Commitment of such Lender at such time and (y) such Lender's Revolving
Credit Commitment Percentage of the Borrowing Base at such time. The Total
Revolving Credit Commitment as of the Restatement Effective Date is
$25,000,000.
(d) Acquisition Loans and UK Acquisition Loans. On the Restatement
Effective Date (i) $1,000,000 of the Existing Acquisition Loans
outstanding on
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the Restatement Effective Date shall be continued as Acquisition Loans
hereunder, and (ii) the $15,000,000 balance of Existing Acquisition Loans
outstanding on the Restatement Effective Date shall be converted to Term
Loans A and Term Loans B as provided in ss.ss.2.1(a) and 2.1(b) above.
Subject to the terms and conditions set forth in this Agreement, (i) each
Acquisition Loan Lender severally agrees, on the closing date of each
Permitted Acquisition of a Domestic Subsidiary, to lend to the Borrower
Acquisition Loans which may be repaid and reborrowed in accordance with
the provisions hereof, and (ii) the UK Fronting Lender agrees, on the
closing date of each Permitted Acquisition of a UK Subsidiary, to lend to
the UK Borrower UK Acquisition Loans (in Sterling or in Dollars) which may
be repaid and reborrowed in accordance with the provisions hereof;
provided that that portion of any Acquisition Loans and/or UK Acquisition
Loans which (after giving effect to any request therefor), when added to
all Acquisition Loans and/or UK Acquisition Loans previously made and
outstanding, would exceed the aggregate principal amount of $35,000,000
(such Acquisition Loans and/or UK Acquisition Loans, or portion thereof,
exceeding $35,000,000, being referred to herein as an "Additional
Acquisition Loan") must constitute a Permitted Additional Acquisition
Loan. The aggregate principal amount of (x) the Acquisition Loans of any
Acquisition Loan Lender at any time during the Acquisition Loan Commitment
Period (and after giving effect to any requests therefor), shall not
exceed the Acquisition Loan Commitment of such Lender at such time (y) the
Dollar Equivalent of all UK Acquisition Loans of such Acquisition Loan
Lender at any time during the Acquisition Loan Commitment Period (and
after giving effect to any requests therefor), shall not exceed the UK
Acquisition Loan Commitment of such Lender at such time and (z) the sum of
(A) the Acquisition Loans of any Acquisition Loan Lender plus (B) the
Dollar Equivalent of all UK Acquisition Loans of such Acquisition Loan
Lender at any time during the Acquisition Loan Commitment Period (and
after giving effect to any requests therefor), shall not exceed the sum of
(1) the Acquisition Loan Commitment of such Lender at such time plus (2)
the UK Acqusition Loan Commitment of such Lender at such time. The Total
Acquisition Commitment as of the Restatement Effective Date is
$65,000,000. Each UK Acquisition Loan shall be funded from the UK Fronting
Lender's UK Office.
2.2. Minimum Amount of Each Borrowing. Each Loan Request shall be in a
minimum amount of $500,000, or, in the case of a UK Acquisition Loan denominated
in Sterling, (pound)250,000. Any conversion to or from Eurocurrency Rate Loans
shall be in such amounts and be made pursuant to such elections so that, after
giving effect thereto, the aggregate principal amount of all Eurocurrency Rate
Loans having the same Interest Period shall not be less than the Dollar
Equivalent of $5,000,000 or a whole multiple of $1,000,000 in excess thereof.
2.3. Requests for Loans; Conditions to Loans.
(a) US Loan Requests. The Borrower shall give to the Agent written
notice in the form of Exhibit B-1 hereto (or telephonic notice confirmed
in a writing in the form of Exhibit B-1 hereto) of each Loan requested by
the Borrower hereunder (a "US Loan Request"), not later than 1:00 p.m.
(Boston time) (A) one (1) Business Day prior to the proposed Drawdown Date
of any Base Rate Loan and (B) three (3) Eurocurrency Business Days prior
to the proposed Drawdown Date of any Eurocurrency Rate Loan. Each such
notice
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shall specify (i) the principal amount of the Loan requested, (ii) the
proposed Drawdown Date of such Loan; (iii) the Interest Period of such
Loan, and (iv) the Type and Tranche of such Loan. Promptly upon receipt of
any such notice, the Agent shall notify each Lender which is required to
make Loans of the Tranche specified in the US Loan Request of such
Lender's proportionate share thereof and of the other matters specified in
the US Loan Request. Each US Loan Request shall be irrevocable and binding
on the Borrower and shall obligate the Borrower to accept the Loans of the
Type and Tranche requested from the respective Lenders on the proposed
Drawdown Date. The Borrower shall not, without the consent of the Agent,
request any Eurocurrency Rate Loans, or request a conversion of any Base
Rate Loans into Eurocurrency Rate Loan until the date which is the earlier
to occur of (i) ninety (90) days following the Original Closing Date and
(ii) the date on which the syndication of the Commitments and Loans
hereunder has been completed to the satisfaction of the Agent.
(b) UK Loan Requests. The UK Borrower shall give to the UK Fronting
Lender (with a copy to the Agent) written notice in the form of Exhibit
B-2 hereto (or telephonic notice, confirmed in a writing in the form of
Exhibit B-2 hereto) of each UK Acquisition Loan requested by the UK
Borrower hereunder (a "UK Loan Request"), not later than three (3)
Eurocurrency Business Days prior to the proposed Drawdown Date of any UK
Acquisition Loan. Each UK Loan Request shall constitute due evidence
pursuant to ss.2.5(e) of the UK Acquisition Loan made pursuant thereto.
All such UK Acquisition Loans requested by the UK Borrower pursuant to
this ss.2.3(b) shall be Eurocurrency Rate Loans. Each UK Loan Request
shall specify (i) the principal amount and Applicable Currency of the UK
Acquisition Loan requested, (ii) the proposed Drawdown Date of such UK
Acquisition Loan, and (iii) the Interest Period for such UK Acquisition
Loan. Promptly upon receipt of any such notice, the Agent shall notify
each of the Acquisition Loan Lenders thereof and of the other matters
specified in the UK Loan Request. Each UK Loan Request shall be
irrevocable and binding on the UK Borrower and shall obligate the UK
Borrower to accept the UK Acquisition Loan requested from the UK Fronting
Lender on the proposed Drawdown Date. The UK Borrower shall not, without
the consent of the Agent, request any Eurocurrency Rate Loans until the
date which is the earlier to occur of (i) ninety (90) days following the
Original Closing Date and (ii) the date on which the syndication of the
Commitments and Loans hereunder has been completed to the satisfaction of
the Agent.
(c) Intentionally Omitted.
2.4. Settlement; Failure to Make Funds Available.
(a) US Loan Requests.
(i) Settlement and Funding Procedures. On each Settlement
Date, the Agent shall, not later than 1:00 p.m. (Boston time), give
facsimile notice (i) to each Lender with a Commitment of the
respective Tranche and the Borrower of (A) the respective
outstanding amount of Base Rate Loans made by the Agent on behalf of
the Lenders with a Commitment of the respective Tranche from the
immediately preceding Settlement Date through the close of business
on the prior day and (B) the amount of any Eurocurrency Rate Loans
to be
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made (following the giving of notice pursuant to ss.2.3(a)) on such
date pursuant to a US Loan Request and (ii) to each Lender with a
Commitment of the respective Tranche of the amount (a "Settlement
Amount") that each such Lender (the "Settling Lender") shall pay to
effect a Settlement of a Loan of its respective Tranche. A statement
of the Agent submitted to the Lenders with a Commitment of the
respective Tranche and the Borrower or to such Lenders with respect
to any amounts owing under this ss.2.4 shall be prima facie evidence
of the amount due and owing. The Settling Lender shall, not later
than 3:00 p.m. (Boston time) on such Settlement Date, effect a wire
transfer of immediately available funds to the Agent in the amount
of the Settlement Amount. All funds advanced by any Lender as a
Settling Lender pursuant to this ss.2.4(a) shall for all purposes be
treated as a Loan of the respective Tranche made by such Settling
Lender to the Borrower and all funds received by any Lender pursuant
to this ss.2.4(a) shall for all purposes be treated as repayment of
amounts owed with respect to Loans of the respective Tranche made by
such Lender. In the event that any bankruptcy, reorganization,
liquidation, receivership or similar case or proceeding in which the
Borrower is a debtor prevent a Settling Lender from making any Loan
of the respective Tranche to effect a Settlement as contemplated
hereby, such Settling Lender will make such disposition and
arrangements with the other Lenders with respect to such Loans,
either by way of purchase of participations, distribution, pro tanto
assignment of claims, subrogation or otherwise as shall result in
each Lender's share of the outstanding Loans of the respective
Tranche being equal, as nearly as may be, to such Lender's
Commitment Percentage of the outstanding amount of the Loans of the
respective Tranche.
(ii) Advances by Agent. The Agent may, unless notified to the
contrary by any Lender prior to a Settlement Date, assume that such
Lender has made or will make available to the Agent on such
Settlement Date the amount of such Lender's Settlement Amount, and
the Agent may (but it shall not be required to), in reliance upon
such assumption, make available to the Borrower a corresponding
amount. If any Lender makes available to the Agent such amount on a
date after such Settlement Date, such Lender shall pay to the Agent
on demand an amount equal to the product of (a) the amount of such
Settlement Amount, times (b) the Base Rate during the period from
but not including the date such payment is required to be made to
and including the date on which such payment is immediately
available to the Agent, times (c) a fraction, the numerator of which
is the number of days that elapse from and including such Settlement
Date to the date on which the amount of such Settlement Amount shall
become immediately available to the Agent, and the denominator of
which is 360. A statement of the Agent submitted to such Lender with
respect to any amounts owing under this paragraph shall be prima
facie evidence of the amount due and owing to the Agent by such
Lender. If such Lender's Settlement Amount is not made available to
the Agent by such Lender within three (3) Business Days following
such Settlement Date, the Agent shall be entitled to recover such
amount from the Borrower on demand, with interest thereon at the
rate per annum applicable to the Loans as of such Settlement Date.
(iii) Failure to Make Funds Available. The failure or refusal
of any Lender to make available to the Agent at the aforesaid time
and place on any Settlement Date the amount of its Settlement Amount
(a) shall not relieve any other Lender from its several obligations
hereunder to make available to the
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Agent the amount of such other Lender's Settlement Amount and (b)
shall not impose upon such other Lender any liability with respect
to such failure or refusal or otherwise increase the Commitment of
such other Lender.
(b) UK Loan Requests.
(i) UK Funding Procedure. Not later than 11:00 a.m. (London
time) on the proposed Drawdown Date of any UK Acquisition Loan, so
long as the limitations set forth in ss.2.1(d) have not been
exceeded and so long as the UK Fronting Lender has not received
notice from the Agent of the occurrence and continuance of a Default
or Event of Default or of the UK Borrower's failure to satisfy any
of the other conditions to making UK Acquisition Loans set forth
herein, the UK Fronting Lender will make available to the UK
Borrower, at the UK Fronting Lender's UK Office, in immediately
available funds, the amount of such requested UK Acquisition Loan.
Promptly following the making of each UK Acquisition Loan, the UK
Fronting Lender shall provide notice to the Agent of the amount
thereof.
(ii) Application of Interest Payments for UK Acquisition
Loans. As promptly as is practicable following each date upon which
the UK Fronting Lender receives a payment of interest under this
Agreement on account of any UK Acquisition Loans, the UK Fronting
Lender shall, in the event that such payment is made in Sterling,
convert into Dollars (based upon the actual exchange rate then
applicable to the UK Fronting Lender) the amount equal to the
portion of such interest payment which constitutes the Applicable
Margin thereof. In consideration of the agreement of the Acquisition
Loan Lenders to purchase participating interests in the UK
Acquisition Loans, the UK Fronting Lender hereby agrees to pay to
the Agent, for the ratable accounts of each Acquisition Loan Lender
in accordance with their UK Acquisition Loan Commitments, a risk
participation fee (the "UK Risk Participation Fee") in the amount
equal to (A) the proceeds received by such UK Fronting Lender from
such conversion to Dollars (other than any such proceeds payable for
the account of any Defaulting Lender, which proceeds shall be
retained by the UK Fronting Lender for its own account) or, (B) if
no such conversion is required, the amount in Dollars constituting
the Applicable Margin in respect of such interest payment actually
received by the UK Fronting Lender on account of any UK Acquisition
Loans (other than any such proceeds payable for the account of any
Defaulting Lender, which proceeds shall be retained by the UK
Fronting Lender for its own account); provided, however, that in the
event that any Acquisition Loan Lender has funded the purchase of
participating interests in the extensions of credit on account of
which such interest payment was made pursuant to ss.2.4(b)(iii) the
UK Fronting Lender shall instead pay to the Agent, for the account
of each Acquisition Loan Lender which has so funded such purchase,
the amount equal to such Acquisition Loan Lender's UK Acquisition
Loan Commitment Percentage of the proceeds received by the UK
Fronting Lender from such conversion (or, if no such conversion is
required, the amount in Dollars constituting such Acquisition Loan
Lender's UK Acquisition Loan Commitment Percentage of such interest
payment actually received by the UK Fronting Lender on account of
any UK Acquisition Loans). Such amount shall be payable to the Agent
in Dollars on the date upon which the UK Fronting Lender receives
the proceeds of such conversion.
(iii) Currency Conversions and Contingent Funding Agreement.
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(A) Each of the Acquisition Loan Lenders hereby
unconditionally and irrevocably agrees to purchase, as the
Agent may at any time request, an undivided participating
interest (in Dollars) in its ratable share, determined by
reference to its UK Acquisition Loan Commitment Percentage, of
all UK Acquisition Loans made by the UK Fronting Lender,
provided that:
(x) the Agent hereby agrees that, unless an Event
of Default has occurred and is continuing, it will not
request any such purchase of participating interests
unless the Agent has given to the UK Borrower at least
three (3) Business Days' prior notice thereof;
(y) the Agent hereby agrees that it promptly will
request that the Acquisition Loan Lenders purchase such
participating interest in all outstanding UK Acquisition
Loans made by the UK Fronting Lender if the UK Fronting
Lender provides to the Agent a written certification
that an Event of Default of the type described in
ss.ss.14.1(a) or (b) has occurred and is continuing and
requesting that such a request be made by the Agent to
the Acquisition Loan Lenders; and
(z) in the event that any of the Insolvency Events
of Default shall have occurred with respect to the UK
Borrower, each Acquisition Loan Lender shall be deemed
to have purchased, automatically and without request,
such participating interest in the UK Acquisition Loans
made by the UK Fronting Lender to the UK Borrower.
Any such request by the Agent shall be made in writing to each
Acquisition Loan Lender and shall specify the amount of
Dollars (in the case of purchases of participating interests
in UK Acquisition Loans denominated in Sterling, based upon
the actual exchange rate at which the Agent anticipates being
able to obtain the relevant amount in Sterling on the relevant
date, with any excess payment being refunded to the
Acquisition Loan Lenders and any deficiency remaining payable
by the Acquisition Loan Lenders) required from such
Acquisition Loan Lender in order to effect the purchase by
such Acquisition Loan Lender of a participating interest in
the amount equal to its UK Acquisition Loan Commitment
Percentage times the aggregate then outstanding principal
amount (in the Applicable Currency) of the UK Acquisition
Loans (which participating interest shall thereafter also
cover accrued interest thereon and other amounts owing in
connection therewith). Promptly upon receipt of such request,
each Acquisition Loan Lender shall deliver to the Agent (in
immediately available funds) the amount so specified by the
Agent. The Agent shall convert such amounts into the
Applicable Currency and shall promptly deliver the proceeds of
such conversion to the UK Fronting Lender in immediately
available funds. Promptly following receipt thereof, the UK
Fronting Lender will deliver to each Acquisition Loan Lender
(through the Agent) a certificate setting forth the amount of
the UK Acquisition Loans purchased by such Acquisition Loan
Lender, dated the date of receipt of such funds and in such
amount. From and after such purchase, (i) the outstanding UK
Acquisition Loans shall be deemed to have been converted into
UK Acquisition Loans denominated in Dollars, (ii) any further
UK Acquisition Loans to be made to the UK Borrower shall be
Eurocurrency Rate Loans made in Dollars, with each Acquisition
Loan Lender purchasing a participating interest therein in the
manner described in the foregoing provisions of this
ss.2.4(b)(iii) immediately upon the making thereof in the
amount equal to such
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Acquisition Loan Lender's UK Acquisition Loan Commitment
Percentage thereof (with the Agent hereby agreeing to provide
prompt notice to each such Acquisition Loan Lender of its
receipt from the UK Fronting Lender of a notice of borrowing
and of the making of any UK Acquisition Loans), and (iii) all
amounts from time to time accruing, and all amounts from time
to time payable, on account of such UK Acquisition Loans
(including any interest and other amounts which were accrued
but unpaid on the date of such purchase) shall be payable in
Dollars as if such UK Acquisition Loans had originally been
made in Dollars and as to UK Acquisition Loans shall be
distributed by the UK Fronting Lender to the Agent, for the
accounts of the Acquisition Loan Lenders, on account of such
participating interests. Notwithstanding anything to the
contrary contained in this ss.2.4, the failure of any
Acquisition Loan Lender to purchase its participating interest
in any UK Acquisition Loans shall not relieve any other
Acquisition Loan Lender of its obligations hereunder to
purchase its participating interest in a timely manner, but no
Acquisition Loan Lender shall be responsible for the failure
of any other Acquisition Loan Lender to purchase the
participating interest to be purchased by such other
Acquisition Loan Lenders on any date.
(B) If any amount required to be paid by any Acquisition
Loan Lender pursuant to ss.2.4(b)(iii) is paid to the Agent
within three (3) Business Days following the date upon which
such Acquisition Loan Lender receives notice from the Agent
that the UK Acquisition Loan in which such Acquisition Loan
Lender has purchased a participating interest has been made,
such Acquisition Loan Lender shall pay to the Agent on demand
an amount equal to the product of (x) such amount, times (y)
the Base Rate during the period from but not including the
date such payment is required to be made to and including the
date on which such payment is immediately available to the
Agent, times (z) a fraction the numerator of which is the
number of days that elapse during such period and the
denominator of which is 360. If any such amount required to be
paid by any Acquisition Loan Lender pursuant to ss.2.4(b)(iii)
is not in fact made available to the Agent within three (3)
Business Days following the date upon which such Acquisition
Loan Lender receives notice from the Agent that the UK
Acquisition Loan in which such Acquisition Loan Lender has
purchased a participating interest has been made, the Agent
shall be entitled to recover from such Acquisition Loan
Lender, on demand, such amount with interest thereon
calculated from such due date at the rate per annum applicable
to Acquisition Loans which are Base Rate Loans. A certificate
from the Agent submitted to any Acquisition Loan Lender with
respect to any amounts owing under this ss.2.4(b)(iii) shall
be conclusive in the absence of manifest error. Amounts
payable by any Acquisition Loan Lender pursuant to this
ss.2.4(b)(iii) shall be paid to the Agent, for the account of
the UK Fronting Lender; provided that, if the Agent (in its
sole discretion) has elected to fund on behalf of such
Acquisition Loan Lender the amounts owing to the UK Fronting
Lender, then the amounts shall be paid to the Agent, for its
own account.
(C) Whenever, at any time after the UK Fronting Lender
has received from any Acquisition Loan Lender such Acquisition
Loan Lender's participating interest in a UK Acquisition Loan
pursuant to ss.2.4(b)(iii) above, the UK Fronting Lender
receives any payment on account thereof, such UK Fronting
Lender will distribute to the Agent, for the account of such
Acquisition Loan Lender, such Acquisition Loan Lender's
participating interest in such amount (appropriately adjusted,
in the case of interest
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payments, to reflect the period of time during which such
Acquisition Loan Lender's participating interest was
outstanding and funded) in like funds received; provided,
however, that in the event that any such payment received by
the UK Fronting Lender is required to be returned, such
Acquisition Loan Lender will return to the UK Fronting Lender
any portion thereof previously distributed by the UK Fronting
Lender to the Acquisition Loan Lender in like funds as such
payment is required to be returned by the UK Fronting Lender.
(D) Each Acquisition Loan Lender's obligation to
purchase participating interests pursuant to this ss.2.4 shall
be absolute and unconditional and shall not be affected by any
circumstance, including (i) any set-off, counterclaim,
recoupment, defense or other right which such Acquisition Loan
Lender may have against the UK Fronting Lender, any Borrower
or any other Person for any reason whatsoever; (ii) the
occurrence and continuation of any Default or Event of
Default; (iii) any adverse change in the condition (financial
or otherwise) of any Transaction Party or any other Lender;
(iv) any breach of any of the Loan Documents by any of the
Transaction Parties or any other Lender; or (v) any other
circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.
2.5. The Notes.
(a) Revolving Credit Notes. Revolving Credit Loans shall be
evidenced by separate promissory notes of the Borrower, each in
substantially the form of Exhibit A-1 hereto (each a "Revolving Credit
Note"), with appropriate insertions. One Revolving Credit Note shall be
payable to the order of each Revolving Credit Lender in a principal amount
equal to such Lender's Revolving Credit Commitment as of the Restatement
Effective Date and representing the obligation of the Borrower to pay to
such Lender such principal amount or, if less, the outstanding amount of
such Lender's Revolving Credit Loans, plus interest accrued thereon, as
set forth below.
(b) Term A Notes. Term Loans A shall be evidenced by separate
promissory notes of the Borrower in substantially the form of Exhibit A-2
hereto (each a "Term A Note"), with appropriate insertions. One Term A
Note shall be payable to the order of each Term Loan A Lender in a
principal amount equal to such Lender's Term Loans A as of the Restatement
Effective Date and representing the obligation of the Borrower to pay to
such Lender the outstanding amount of such Lender's Term Loans A, plus
interest accrued thereon, as set forth below.
(c) Term B Notes. Term Loans B shall be evidenced by separate
promissory notes of the Borrower in substantially the form of Exhibit A-3
hereto (each a "Term B Note"), with appropriate insertions. One Term B
Note shall be payable to the order of each Term Loan B Lender in a
principal amount equal to such Lender's Term Loans B as of the Restatement
Effective Date and representing the obligation of the Borrower to pay to
such Lender the outstanding amount of such Lender's Term Loans B, plus
interest accrued thereon, as set forth below.
(d) Acquisition Notes. Acquisition Loans shall be evidenced by
separate promissory notes of the Borrower in substantially the form of
Exhibit A-4 hereto (each an "Acquisition Note"), with appropriate
insertions. One Acquisition Note shall be payable to the order of each
Acquisition Loan Lender in a principal amount equal to such Lender's
Acquisition Loan
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Commitment as of the Restatement Effective Date and representing the
obligation of the Borrower to pay to such Lender such principal amount or,
if less, the outstanding amount of such Lender's Acquisition Loans, plus
interest accrued thereon, as set forth below.
(e) Evidence of UK Acquisition Loans. The obligations of the UK
Borrower to repay all amounts borrowed by it as UK Acquisition Loans, all
interest thereon and all other amounts payable by it in respect thereof
shall be evidenced by this Agreement, it being the intention of the
parties hereto that the UK Borrower's obligations with respect to the UK
Acquisition Loans owed by it shall be evidenced only as stated herein and
not by separate promissory notes or other instruments.
(f) Note Records. The Borrower irrevocably authorizes each Lender
with a Commitment of the respective Tranche to make or cause to be made,
at or about the time of the Drawdown Date of any Loans of the respective
Tranche or at the time of receipt of any payment of principal on any Note
of such Lender, an appropriate notation on such Lender's applicable Note
Record reflecting the making of such Loan or (as the case may be) the
receipt of such payment. The outstanding amount of the Loans set forth on
such Lender's Note Records shall be prima facie evidence of the principal
amount thereof owing and unpaid to such Lender, but the failure to record,
or any error in so recording, any such amount on any Note Record of such
Lender shall not limit or otherwise affect the obligations of the Borrower
hereunder or under any Note to make payments of principal of or interest
on any Note when due.
2.6. Conversion and Continuation Options.
(a) Conversion to Different Type of Loan. The Borrower may elect
from time to time to convert any of its outstanding Loans to a Loan of
another Type, provided that (i) with respect to any such conversion of a
Eurocurrency Rate Loan to a Base Rate Loan, the Borrower shall give the
Agent at least one (1) Business Day's prior written notice of such
election; (ii) with respect to any such conversion of a Base Rate Loan to
a Eurocurrency Rate Loan, the Borrower shall give the Agent at least three
(3) Eurocurrency Business Days' prior written notice of such election;
(iii) with respect to any such conversion of a Eurocurrency Rate Loan into
a Base Rate Loan, such conversion shall only be made on the last day of
the Interest Period with respect thereto; (iv) no Loan may be converted
into a Eurocurrency Rate Loan when any Default or Event of Default has
occurred and is continuing; (v) the Borrower may not have more than five
(5) Eurocurrency Rate Loans outstanding at any time; (vi) any partial
conversion shall be in an aggregate principal amount of $1,000,000 or an
integral multiple of $500,000 in excess thereof, provided, that any
conversion to or from Eurocurrency Rate Loans shall be in such amounts and
be made pursuant to such elections so that, after giving effect thereto,
the aggregate principal amount of all Eurocurrency Rate Loans having the
same Interest Period shall not be less than $5,000,000 or a whole multiple
of $1,000,000 in excess thereof; and (vii) each Conversion Request
relating to the conversion of a Base Rate Loan to a Eurocurrency Rate Loan
shall be irrevocable by the Borrower.
(b) Continuation of Type of Loans of Borrower. Any Loan of the
Borrower of any Type may be continued as a Loan of the same Type upon the
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expiration of an Interest Period with respect thereto by compliance by the
Borrower with the notice provisions contained in ss.2.6(a); provided that
no Eurocurrency Rate Loan may be continued as such when any Default or
Event of Default has occurred and is continuing, but shall be
automatically converted to a Base Rate Loan on the last day of the first
Interest Period relating thereto ending during the continuance of any
Default or Event of Default of which officers of the Agent active upon the
Borrower's account have actual knowledge. In the event that the Borrower
fails to provide any such notice with respect to the continuation of any
Eurocurrency Rate Loan as such, then such Eurocurrency Rate Loan shall be
automatically converted to a Base Rate Loan on the last day of the first
Interest Period relating thereto. The Agent shall notify the Lenders
promptly when any such automatic conversion contemplated by this ss.2.6(b)
is scheduled to occur.
(c) Continuation of Type of UK Acquisition Loans. Each UK
Acquisition Loan shall be continued as a Eurocurrency Rate Loan upon the
expiration of an Interest Period with respect thereto, provided, that (i)
with respect to any such continuation of a UK Acquisition Loan as a
Eurocurrency Rate Loan, the UK Borrower shall give the Agent at least
three (3) Business Days prior written notice of the Interest Period to be
applicable to such Eurocurrency Rate Loan (or such shorter period prior
thereto as the UK Fronting Lender shall agree), (ii) in the event that the
UK Borrower fails to provide any such notice with respect to the
continuation of any Eurocurrency Rate Loan as such, then such Eurocurrency
Rate Loan shall be automatically continued as a Eurocurrency Rate Loan
having a one (1) month Interest Period commencing on the last day of the
then expiring Interest Period relating thereto, and (iii) any Eurocurrency
Rate Loan being continued as such when any payment Default or Event of
Default has occurred and is continuing shall be automatically continued as
a Eurocurrency Rate Loan having a one (1) month Interest Period commencing
on the last day of the then current Interest Period relating thereto
ending during the continuance of any payment Default or any Event of
Default. The Agent shall notify the UK Fronting Lender and the Acquisition
Loan Lenders promptly when any such automatic continuation of a
Eurocurrency Rate Loan contemplated by clauses (ii) or (iii) of this
ss.2.6(c) occurs or is scheduled to occur.
2.7. Pro-Rata Borrowings. All Loans (other than Loans subject to the
Settlement provisions of ss.2.4 hereof and UK Acquisition Loans made by the UK
Fronting Lender) made under this Agreement shall be made by the Lenders pro rata
on the basis of their respective Term Loan A Commitments, Term Loan B
Commitments, Revolving Credit Commitments, and Acquisition Loan Commitments, as
the case may be.
2.8. Interest on the Loans.
(a) Each of the Borrowers promises to pay interest on each of its
Loans or any portions thereof outstanding during each Interest Period in
arrears on each Interest Payment Date with respect thereto.
(b) Except as otherwise provided in this ss.2.8, each Loan to the
Borrower shall bear interest during each Interest Period relating to all
or any portion of such Loan at the following rates:
(i) To the extent that all or any portion of a Loan bears
interest during such Interest Period based on the Base Rate, such
Loan or such
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portion thereof shall bear interest during such Interest Period at
the rate per annum of the Base Rate plus the Applicable Margin.
(ii) To the extent that all or any portion of a Loan bears
interest during such Interest Period based on the Eurocurrency Rate,
such Loan or such portion thereof shall bear interest during such
Interest Period at the rate per annum of the Eurocurrency Rate
determined for such Interest Period plus the Applicable Margin.
(c) Except as otherwise provided in this ss.2.8, each Loan to the UK
Borrower shall bear interest during each Interest Period relating to all
or any portion of such Loan at the following rates:
(i) Each UK Acquisition Loan which is denominated in Dollars
shall bear interest for each Interest Period with respect thereto at
the rate per annum equal to the Eurocurrency Rate determined for
such Interest Period plus the Applicable Margin for Eurocurrency
Rate A Loans; and
(ii) Each UK Acquisition Loan which is denominated in Sterling
shall bear interest for each Interest Period with respect thereto at
the rate per annum equal to the Eurocurrency Rate determined for
such Interest Period plus the Applicable Margin for Eurocurrency
Rate A Loans plus any Mandatory Liquid Asset Costs incurred by the
UK Fronting Lender or any UK Acquisition Loan Lender in respect of
such UK Acquisition Loan from time to time.
(d) Overdue principal and (to the extent permitted by Applicable
Law) interest on the Loans and all other overdue amounts payable hereunder
or under any of the other Loan Documents shall bear interest compounded
monthly and payable on demand at a rate per annum equal to two percent
(2%) above the rate of interest otherwise applicable thereto until such
amount shall be paid in full (after as well as before judgment).
(e) During the continuance of an Event of Default the principal of
each Loan not overdue shall, until such Event of Default has been cured or
remedied or such Event of Default has been waived by the Required Lenders
pursuant to ss.17.11, bear interest at a rate per annum equal to the rate
of interest applicable to overdue principal of such Loan pursuant to
ss.2.8(d).
2.9. Change in Borrowing Base. The Borrowing Base shall be determined
monthly (or at such other interval as may be specified pursuant to ss.9.3(f)) by
the Agent by reference to the Borrowing Base Report. The Agent shall give to the
Lenders and the Borrower written notice of any change in the Borrowing Base
resulting from the Agent's determination to add reserves or to change advance
rates with respect to the Borrowing Base, as provided in the definition of
Borrowing Base, which notice shall be effective upon receipt by the Borrower.
Prior to such time as the Borrower receives such notice, the Borrowing Base
shall be the amount in effect in the absence of such notice. For purposes of
this Agreement and the other Loan Documents, the Agent may assume, subject to
adjustment based upon the provisions of this Agreement, that the Borrowing Base
in effect on any given date is the Borrowing Base, as indicated on the most
recent Borrowing Base Report delivered on a timely
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basis to the Lenders and the Agent in accordance with the provisions of
ss.9.3(e) hereof.
2.10. Inability to Determine Eurocurrency Rate. In the event, prior to the
commencement of any Interest Period relating to any Eurocurrency Rate Loan, the
Agent or the UK Fronting Lender (as applicable) shall determine or be notified
by the Required Lenders that adequate and reasonable methods do not exist for
ascertaining the Eurocurrency Rate that would otherwise determine the rate of
interest to be applicable to any Eurocurrency Rate Loan during any Interest
Period, the Agent shall forthwith give notice of such determination (which shall
be conclusive and binding on the Borrowers and the Lenders) to the Borrower and
the Lenders. In such event (i) any Loan Request or Conversion Request with
respect to Eurocurrency Rate Loans (other than UK Acquisition Loans) shall be
automatically withdrawn and shall be deemed a request for Base Rate Loans, (ii)
any UK Loan Request with respect to a UK Acquisition Loan shall be deemed to be,
rather than a request for a Eurocurrency Rate Loan, a request for a UK
Acquisition Loan bearing interest at a rate reasonably determined by the UK
Fronting Lender to be equal to its costs of funds for such UK Acquisition Loan
for the applicable Interest Period plus the Applicable Margin for Eurocurrency
Rate Loans for UK Acquisition Loans, (iii) each Eurocurrency Rate Loan (other
than a UK Acquisition Loan) will automatically, on the last day of the then
current Interest Period relating thereto, become a Base Rate Loan, (iv) each UK
Acquisition Loan will automatically, on the last day of the then current
Interest Period relating thereto, become a UK Acquisition Loan bearing interest
at a rate reasonably determined by the UK Fronting Lender to be equal to its
costs of funds for such UK Acquisition Loan for the applicable Interest Period
plus the Applicable Margin for Eurocurrency Rate Loans for UK Acquisition Loans
and (v) the obligations of the Lenders to make Eurocurrency Rate Loans shall be
suspended until the Agent determines that the circumstances giving rise to such
suspension no longer exist, whereupon the Agent shall so notify th Borrower and
the Lenders.
2.11. Illegality. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurocurrency Rate Loans, such Lender shall forthwith give notice of such
circumstances to the Borrower and the Agent and thereupon (a) the commitment of
such Lender to make Eurocurrency Rate Loans or convert Loans of another Type to
Eurocurrency Rate Loans shall forthwith be suspended, (b) such Lender's Loans
then outstanding as Eurocurrency Rate Loans (other than any UK Acquisition
Loans), if any, shall be converted automatically to Base Rate Loans on the last
day of each Interest Period applicable to such Eurocurrency Rate Loans or within
such earlier period as may be required by law, and (iii) such Lender's UK
Acquisition Loans, if any, shall be converted automatically, on the last day of
the then current Interest Period relating thereto or within such earlier period
as may be required by law, to UK Acquisition Loans bearing interest at a rate
reasonably determined by the UK Fronting Lender to be equal to its costs of
funds for such UK Acquisition Loans for the applicable Interest Period plus the
Applicable Margin for Eurocurrency Rate Loans for UK Acquisition Loans. Each of
the Borrowers hereby agrees promptly to pay the Agent for the account of such
Lender, promptly upon demand by such Lender, any additional amounts
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necessary to compensate such Lender for any costs incurred by such Lender in
making any conversion in accordance with this ss.2.11, including any interest or
fees payable by such Lender to lenders of funds obtained by it in order to make
or maintain its Eurocurrency Rate Loans hereunder.
2.12. Additional Costs, etc. If any present or future Applicable Law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Lender or the Agent by any central bank or other fiscal,
monetary or other authority (whether or not having the force of law), shall:
(i) subject any Lender or the Agent to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to this
Agreement, the other Loan Documents, any Letters of Credit or such
Lender's Commitments or Loans (other than taxes based upon or measured by
the income or profits of such Lender or the Agent), or
(ii) materially change the basis of taxation (except for changes in
taxes based upon or measured by the income or profits of such Lender or
the Agent) of payments to any Lender of the principal of or the interest
on any Loans or any other amounts payable to any Lender or the Agent under
this Agreement or any of the other Loan Documents, or
(iii) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Agreement) any special
deposit, reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held
by, or deposits in or for the account of, or loans by, or letters of
credit issued by, or commitments of an office of any Lender, or
(iv) impose on any Lender or the Agent any other conditions or
requirements with respect to this Agreement, the other Loan Documents, the
Loans, such Lender's Commitments or any Letters of Credit, or any class of
loans, letters of credit or commitments of which any of the Loans or such
Commitments forms a part, and the result of any of the foregoing is
(A) to increase the cost to any Lender of making, funding,
issuing, renewing, extending or maintaining any of such Lender's
Loans or Commitments or Letters of Credit, or
(B) to reduce the amount of principal, interest, Reimbursement
Obligation or other amount payable to such Lender or the Agent
hereunder on account of such Lender's Loans or Commitments or
Letters of Credit, or
(C) to require such Lender or the Agent to make any payment or
to forgo any interest or Reimbursement Obligation or other sum
payable hereunder, the amount of which payment or
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forgone interest or Reimbursement Obligation or other sum is
calculated by reference to the gross amount of any sum receivable or
deemed received by such Lender or the Agent from the Borrowers
hereunder;
then, and in each such case, the applicable Borrower will, upon demand made by
such Lender or (as the case may be) the Agent at any time and from time to time
and as often as the occasion therefor may arise, pay to such Lender or the Agent
such additional amounts as will be sufficient to compensate such Lender or the
Agent for such additional cost, reduction, payment or forgone interest or
Reimbursement Obligation or other sum.
2.13. Capital Adequacy. If after the Original Closing Date any Lender or
the Agent determines that (a) the adoption of or change in any law, governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law) regarding capital requirements for banks or bank holding companies
or any change in the interpretation or application thereof by a court or
governmental authority with appropriate jurisdiction, or (b) compliance by such
Lender or the Agent or any corporation controlling such Lender or the Agent with
any law, governmental rule, regulation, policy, guideline or directive (whether
or not having the force of law) of any such entity regarding capital adequacy,
has the effect of reducing the return on such Lender's or the Agent's capital as
a result of such Lender's obligations hereunder to a level below that which such
Lender or the Agent could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or the Agent's then existing
policies with respect to capital adequacy and assuming full utilization of such
entity's capital) by any amount deemed by such Lender or (as the case may be)
the Agent to be material, then such Lender or the Agent may notify the Borrower
of such fact. To the extent that the amount of such reduction in the return on
capital is not reflected in the Base Rate, the Borrowers agree to pay such
Lender or (as the case may be) the Agent for the amount of such reduction in the
return on capital as and when such reduction is determined upon presentation by
such Lender or (as the case may be) the Agent of a certificate in accordance
with ss.2.15 hereof.
2.14. Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of ss.ss.2.12 or 2.13 with
respect to such Lender, it will, if requested by the Borrower, use reasonable
efforts (subject to overall policy consideration of such Lender) to designate
another lending office for any Loans affected by such event, provided that such
designation is made on such terms that such Lender and its lending office suffer
no economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of any such Section.
Nothing in this ss.2.14 shall affect or postpone any of the obligations of the
Borrower or the right of any Lender provided in ss.ss.2.12 or 2.13.
2.15. Certificate. A certificate setting forth any additional amounts
payable pursuant to ss.ss.2.11, 2.12 or 2.13 and a brief explanation of such
amounts which are due, submitted by any Lender or the Agent to the Borrower,
shall be conclusive, absent manifest error, that such amounts are due and owing.
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2.16. Indemnity. Each of the Borrowers agrees to indemnify each Lender and
to hold each Lender harmless from and against any loss, cost or expense
(including loss of anticipated profits) that such Lender may sustain or incur as
a consequence of (a) default by such Borrower in payment of the principal amount
of or any interest on any Eurocurrency Rate Loans as and when due and payable,
including any such loss or expense arising from interest or fees payable by such
Lender to lenders of funds obtained by it in order to maintain its Eurocurrency
Rate Loans, (b) default by such Borrower in making a borrowing or conversion
after such Borrower has given (or is deemed to have given) a Loan Request or a
Conversion Request relating thereto in accordance with ss.2.6 or (c) the making
of any payment of a Eurocurrency Rate Loan or the making of any conversion of
any such Loan to a Base Rate Loan on a day that is not the last day of the
applicable Interest Period with respect thereto, including interest or fees
payable by such Lender to lenders of funds obtained by it in order to maintain
any such Loans.
2.17. Replacement of Lenders. (a) If any Lender becomes a Defaulting
Lender or (b) if any Lender (other than the Agent) refuses to consent to a
proposed change, waiver, discharge or termination with respect to this Agreement
or any other Loan Document which has been approved by the Required Lenders as
provided in ss.17.11, then the Borrower shall have the right, if no Default or
Event of Default then exists, to replace such Lender (the "Replaced Lender")
with any other Lender or with one or more other Eligible Assignees, none of whom
shall constitute a Defaulting Lender at the time of such replacement
(collectively, the "Replacement Lender") reasonably acceptable to the Agent or,
at the option of the Borrower, to replace only (i) the Revolving Credit
Commitment (and Letter of Credit Participations and Revolving Credit Loans
outstanding pursuant thereto) of the Replaced Lender with an identical Revolving
Credit Commitment (and Letter of Credit Participations and Revolving Credit
Loans outstanding pursuant thereto) provided by the Replacement Lender, (ii) the
Acquisition Loan Commitment and UK Acquisition Loan Commitment (and Acquisition
Loans and UK Acquisition Loans outstanding pursuant thereto) of the Replaced
Lender with an identical Acquisition Loan Commitment and UK Acquisition Loan
Commitment (and Acquisition Loans and UK Acquisition Loans outstanding pursuant
thereto) provided by the Replacement Lender, (iii) the Term Loan A Commitment
(and Term Loans A outstanding pursuant thereto) of the Replaced Lender with an
identical Term Loan A Commitment (and Term Loans A outstanding pursuant thereto)
provided by the Replacement Lender, and/or (iv) the Term Loan B Commitment (and
Term Loans B outstanding pursuant thereto) of the Replaced Lender with an
identical Term Loan B Commitment (and Term Loans B outstanding pursuant thereto)
provided by the Replacement Lender; provided that:
(A) at the time of any replacement pursuant to this Section ss.2.17,
the Replacement Lender shall enter into one or more Assignment and
Acceptances pursuant to ss.16 (and with all fees payable pursuant to
ss.16.3 to be paid by the Replacement Lender) pursuant to which the
Replacement Lender shall acquire all of the Commitments and outstanding
Loans of and Letter of Credit Participations (or, in the case of the
replacement of only (w) the Revolving Credit Commitment (and Letter of
Credit Participations and Revolving Credit Loans outstanding pursuant
thereto) of the Replaced Lender with an identical Revolving
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Credit Commitment (and Letter of Credit Participations and Revolving
Credit Loans outstanding pursuant thereto) provided by the Replacement
Lender (x) the Acquisition Loan Commitment and UK Acquisition Loan
Commitment (and Acquisition Loans and UK Acquisition Loans outstanding
pursuant thereto) of the Replaced Lender with an identical Acquisition
Loan Commitment and UK Acquisition Loan Commitment (and Acquisition Loans
and UK Acquisition Loans outstanding pursuant thereto) provided by the
Replacement Lender, (y) the Term Loan A Commitment (and Term Loans A
outstanding pursuant thereto) of the Replaced Lender with an identical
Term Loan A Commitment (and Term Loans A outstanding pursuant thereto)
provided by the Replacement Lender and/or (z) the Term Loan B Commitment
(and Term Loans B outstanding pursuant thereto) of the Replaced Lender
with an identical Term Loan B Commitment (and Term Loans B outstanding
pursuant thereto) provided by the Replacement Lender) of the Replaced
Lender and, in connection therewith, the Replacement Lender shall pay to
(x) the Replaced Lender in respect thereof an amount equal to
the sum of (1) an amount equal to the principal of, and all accrued
interest on, all outstanding Loans of the Replaced Lender (or, in
the case of the replacement of only (I) the Revolving Credit
Commitment, the outstanding Revolving Credit Loans (II) the
Acquisition Loan Commitments and UK Acquisition Loan Commitments,
the outstanding Acquisition Loans and UK Acquisition Loans, (III)
the Term Loan A Commitment, the outstanding Term Loans A and/or (IV)
the Term Loan B Commitment, the outstanding Term Loans B of the
Replaced Lender), (2) except in the case of the replacement of only
(I) the Term Loan A Commitment or outstanding Term Loans A of a
Replaced Lender (II) the Term Loan B Commitment or outstanding Term
Loans B of a Replaced Lender, and/or (III) only the Acquisition Loan
Commitments and UK Acquisition Loan Commitments or outstanding
Acquisition Loans and/or UK Acquisition Loans of a Replaced Lender,
an amount equal to such Replacement Lender's Revolving Credit
Commitment Percentage of all Unpaid Reimbursement Obligations that
have been funded by (and not reimbursed to) such Replaced Lender,
together with all then unpaid interest with respect thereto at such
time and (3) an amount equal to all accrued, but theretofore unpaid,
Fees owing to the Replaced Lender but only with respect to the
relevant Tranche, in the case of the replacement of less than all
the Tranches of Loans then held by the respective Replaced Lender)
pursuant to ss.5.1 hereof,
and (y) except in the case of the replacement of only one or
more Tranches of (I) the Term Loan A Commitment and Term Loans A,
(II) Term Loan B Commitment and Term Loans B, (III) the Acquisition
Loan Commitment and/or Acquisition Loans, or (IV) the UK Acquisition
Loan Commitment and/or UK Acquisition Loans of the Replaced Lender,
the Issuing Bank or Lenders an amount equal to such Replaced
Lender's Revolving Credit Commitment Percentage of any Unpaid
Reimbursement
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Obligations with respect to a Letter of Credit issued by the Issuing
Bank, to the extent such amount was not theretofore funded by such
Replaced Lender; and
(B) all obligations of the Borrower owing to the Replaced Lender
(other than (x) those specifically described in clause (A) above in
respect of which the assignment purchase price has been, or is
concurrently being, paid or (y) relating to any Tranche of Loans and/or
Commitments of the respective Replaced Lender which will remain
outstanding after giving effect to the respective replacement) shall be
paid in full by the Borrower to such Replaced Lender concurrently with
such replacement.
Upon the execution of the respective Assignment and Acceptance, the payment of
amounts referred to in clauses (A) and (B) above, recordation of the assignment
on the Register by the Agent pursuant to ss.16.1 and, if so requested by the
Replacement Lender, delivery to the Replacement Lender of the appropriate Note
or Notes executed by the Borrower, (x) the Replacement Lender shall become a
Lender hereunder with respect to the assigned interest(s) (y) unless the
respective Replaced Lender continues to have a Term Loan A Commitment or Term
Loans A, a Term Loan B Commitment or Term Loans B, an Acquisition Loan
Commitment or Acquisition Loans, a UK Acquisition Loan Commitment or UK
Acquisition Loans, or a Revolving Credit Commitment or Revolving Credit Loans,
the Replaced Lender shall cease to constitute a Lender hereunder with respect to
the Loans and Term Loan A Commitments, Term Loan B Commitments, Acquisition Loan
Commitments, UK Acquisition Loan Commitments and/or Revolving Credit Commitments
so transferred, except with respect to indemnification provisions applicable to
the Replaced Lender under this Agreement, which shall survive as to such
Replaced Lender, and (z) the Term Loan A Commitment Percentages, Term Loan B
Commitment Percentages, Acquisition Loan Commitment Percentages, UK Acquisition
Loan Commitment Percentages and Revolving Credit Commitment Percentages of the
Lenders shall be automatically adjusted at such time to give effect to such
replacement.
2.18. Resignation of UK Fronting Lender. The UK Fronting Lender may resign
at any time by giving thirty (30) days prior written notice thereof to the
Agent, the Acquisition Loan Lenders and the UK Borrower; provided such
resignation shall not become effective until the date upon which a replacement
UK Fronting Lender reasonably acceptable to the Required Acquisition Loan
Lenders and the Agent has been selected and has assumed the rights and
obligations of the UK Fronting Lender hereunder. Unless an Event of Default
shall have occurred and be continuing, such successor UK Fronting Lender shall
be reasonably acceptable to the UK Borrower. If no successor UK Fronting Lender
shall have been so appointed by the Required UK Acquisition Loan Lenders and
shall have accepted such appointment within thirty (30) days after the resigning
UK Fronting Lender's giving of notice of resignation, then the resigning UK
Fronting Lender may, on behalf of the Acquisition Loan Lenders, appoint a
successor UK Fronting Lender, which shall be a financial institution having a
rating of not less than A or its equivalent by Standard & Poor's, which
qualifies as a UK Qualifying Lender, and which shall otherwise have the ability
to fund the UK Acquisition Loans from an appropriate lending office. Upon the
acceptance of any appointment as UK Fronting Lender hereunder by a successor UK
Fronting Lender, such successor UK Fronting
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Lender shall thereupon succeed to and become vested with all the rights, powers,
privileges, duties and obligations of the resigning UK Fronting Lender, and the
resigning UK Fronting Lender shall be discharged from its duties and obligations
hereunder. After any resigning UK Fronting Lender's resignation, the provisions
of this Agreement and the other Loan Documents shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as UK Fronting Lender.
2.19. Nature of Acquisition Loan Lenders' Interests in UK Acquisition
Loans. For the avoidance of any doubt, the interest of the Acquisition Loan
Lenders in the UK Acquisition Loans (and the related interest and fees) shall be
a sub-participation only, and the obligations of the Acquisition Loan Lenders
under ss.2.4 shall not constitute or be deemed a direct assignment or novation
of the UK Obligations in favor of the Acquisition Loan Lenders or otherwise
evidence a direct contractual relationship or any direct rights or obligations
between any of the Acquisition Loan Lenders (in their capacities as such), on
the one hand, and the UK Borrower, on the other. The UK Fronting Lender is the
sole counterpart to the UK Borrower in respect of the UK Acquisition Loans. The
sole claims of each of the Acquisition Loan Lenders in respect of its interest
hereunder shall be to the UK Fronting Lender in respect of such Acquisition Loan
Lender's actual share of the any payments, actually received by the UK Fronting
Lender in cash or solvent credits on or in respect of the principal of, and
interest on, and fees accrued with respect to, the UK Acquisition Loans, in each
case which shall be payable to such Acquisition Loan Lender pursuant to the
provisions hereof.
3. LETTERS OF CREDIT.
3.1. Letter of Credit Commitments.
(a) Commitment to Issue Letters of Credit. Subject to the terms and
conditions hereof and the execution and delivery by the Borrower of a
letter of credit application on the Issuing Bank's customary form (a
"Letter of Credit Application"), the Issuing Bank on behalf of the
Revolving Credit Lenders and in reliance upon the agreement of the
Revolving Credit Lenders set forth in ss.3.1(d) and upon the
representations and warranties of the Transaction Parties contained
herein, agrees, in its individual capacity, to issue, extend and renew for
the account of the Borrower one or more standby or documentary letters of
credit (individually, a "Letter of Credit"), in such form as may be
requested from time to time by the Borrower and reasonably agreed to by
the Issuing Bank; provided, however, that, after giving effect to such
request, (a) the Letter of Credit Exposure shall not exceed $10,000,000
and (b) the sum of (i) the Letter of Credit Exposure plus (ii) the amount
of all Revolving Loans outstanding plus (iii) any Excess UK Working
Capital Outstandings shall not exceed the lesser of (A) the Total
Revolving Credit Commitment and (B) the Borrowing Base.
(b) Letter of Credit Applications. Each Letter of Credit Application
shall be completed to the reasonable satisfaction of the Issuing Bank. In
the event that any provision of any Letter of Credit Application shall be
inconsistent with any provision of this Agreement, then the provisions of
this Agreement shall, to the extent of any such inconsistency, govern.
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(c) Terms of Letters of Credit. Each Letter of Credit issued,
extended or renewed hereunder shall, among other things, (i) provide for
the payment of sight drafts for honor thereunder when presented in
accordance with the terms thereof and when accompanied by the documents
described therein, and (ii) shall by its terms terminate on or before the
earlier to occur of (A) the date which is fourteen (14) days (or, if the
Letter of Credit is confirmed by a confirmer or otherwise provides for one
or more nominated persons, forty-five (45) days) prior to the Revolving
Credit Loan Maturity Date, and (B) the date which is one (1) year after
the date of issuance thereof (subject to renewal on terms satisfactory to
the Issuing Bank). Each Letter of Credit so issued, extended or renewed
shall be subject to the Uniform Customs or, in the case of a standby
Letter of Credit issued on or after January 1, 1999, either the Uniform
Customs or the International Standby Practices.
(d) Reimbursement Obligations of Lenders. Each Revolving Credit
Lender severally agrees that it shall be absolutely liable, without regard
to the occurrence of any Default or Event of Default or any other
condition precedent whatsoever, to the extent of such Lender's Revolving
Credit Commitment Percentage, to reimburse the Issuing Bank on demand for
the amount of each draft paid by the Issuing Bank under each Letter of
Credit to the extent that such amount is not reimbursed by the Borrower
pursuant to ss.3.2 (such agreement for a Revolving Credit Lender being
called herein the "Letter of Credit Participation" of such Lender).
(e) Participations of Lenders. Each such payment made by a Revolving
Credit Lender shall be treated as the purchase by such Lender of a
participating interest in the Borrower's Reimbursement Obligations under
ss.3.2 in an amount equal to such payment. Each Revolving Credit Lender
shall share in accordance with its participating interest in any interest
which accrues pursuant to ss.3.2.
3.2. Reimbursement Obligation of Borrower. In order to induce the Issuing
Bank to issue, extend and renew each Letter of Credit and the Revolving Credit
Lenders to participate therein, the Borrower hereby agrees to reimburse or pay
to the Issuing Bank, for the account of the Issuing Bank or (as the case may be)
the Revolving Credit Lenders, with respect to each Letter of Credit issued,
extended or renewed by the Issuing Bank hereunder at the request of the
Borrower,
(a) except as otherwise expressly provided in ss.3.2(b) and (c), on
each date that any draft presented under such Letter of Credit is honored
by the Issuing Bank, or the Issuing Bank otherwise makes a payment with
respect thereto, (i) the amount paid by the Issuing Bank under or with
respect to such Letter of Credit, and (ii) the amount of any taxes, fees,
charges or other costs and expenses whatsoever incurred by the Issuing
Bank or any Revolving Credit Lender in connection with any payment made by
the Issuing Bank or any Revolving Credit Lender under, or with respect to,
such Letter of Credit,
(b) upon the reduction (but not termination) of the Total Revolving
Credit Commitment to an amount less than the Maximum Drawing Amount, an
amount equal to such difference, which amount shall be held by the Issuing
Bank or by the Agent for the benefit of the
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Revolving Credit Lenders, the Issuing Bank and the Agent, as cash
collateral for all Reimbursement Obligations, and
(c) upon the termination of the Total Revolving Credit Commitment,
or the acceleration of the Reimbursement Obligations with respect to
Letters of Credit in accordance with ss.14, an amount equal to the then
Maximum Drawing Amount with respect to Letters of Credit, which amount
shall be held by the Issuing Bank or by the Agent for the benefit of the
Revolving Credit Lenders, the Issuing Bank and the Agent, as cash
collateral for all Reimbursement Obligations, until all Reimbursement
Obligations are paid in full.
Each such payment shall be made to the Issuing Bank at the Issuing Bank's head
office located at 100 Federal Street, Boston, Massachusetts in immediately
available funds. Interest on any and all amounts remaining unpaid by the
Borrower under this ss.3.2 at any time from the date such amounts become due and
payable (whether as stated in this ss.3.2, by acceleration or otherwise) until
payment in full (whether before or after judgment) shall be payable to the
Issuing Bank on demand at the rate specified in ss.2.8 for overdue principal on
the Revolving Credit Loans.
3.3. Letter of Credit Payments. If any draft shall be presented or other
demand for payment shall be made under any Letter of Credit, the Issuing Bank
shall notify the Borrower of the date and amount of the draft presented or
demand for payment and of the date and time when it expects to pay such draft or
honor such demand for payment. If the Borrower fails to reimburse the Issuing
Bank as provided in ss.3.2 on or before the date that such draft is paid or
other payment is made by the Issuing Bank, the Issuing Bank may at any time
thereafter notify the Lenders of the amount of any such Unpaid Reimbursement
Obligation. No later than 3:00 p.m. (Boston time) on the Business Day next
following the receipt of such notice, each Lender with a Revolving Credit
Commitment, or if such Commitment is terminated, with outstanding Revolving
Credit Loans, shall make available to the Issuing Bank, at its head office
located at 100 Federal Street, Boston, Massachusetts, in immediately available
funds, such Lender's Revolving Credit Commitment Percentage of such Unpaid
Reimbursement Obligation, together with an amount equal to the product of (a)
the amount equal to such Lender's Revolving Credit Commitment Percentage of such
Unpaid Reimbursement Obligation, times (b) the Base Rate during the period from
but not including the date such payment is required to be made to and including
the date on which such payment is immediately available to the Issuing Bank,
times (c) a fraction, the numerator of which is the number of days that elapse
from and including the date the Issuing Bank paid the draft presented for honor
or otherwise made payment to the date on which such Lender's Revolving Credit
Commitment Percentage of such Unpaid Reimbursement obligation shall become
immediately available to the Issuing Bank, and the denominator of which is 360.
3.4. Obligations Absolute. The Borrower's obligations under this ss.3
shall be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Issuing Bank,
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any Revolving Credit Lender, the Agent or any beneficiary of a Letter of Credit.
The Borrower further agrees with the Issuing Bank and the Revolving Credit
Lenders that the Issuing Bank and such Lenders shall not be responsible for, and
the Borrower's Reimbursement Obligations under ss.3.2 shall not be affected by,
among other things, the validity or genuineness of documents or of any
endorsements thereon, even if such documents should in fact prove to be in any
or all respects invalid, fraudulent or forged, or any dispute between or among
the Borrower, the beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may be transferred or
any claims or defenses whatsoever of the Borrower against the beneficiary of any
Letter of Credit or any such transferee. The Issuing Bank and the Revolving
Credit Lenders shall not be liable for any error, omission, interruption or
delay in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit. The Borrower agrees that
any action taken or omitted by the Issuing Bank or any Revolving Credit Lender
under or in connection with each Letter of Credit and the related drafts and
documents, if done in good faith, shall be binding upon the Borrower and shall
not result in any liability on the part of the Issuing Bank or any such Lender
to such Borrower.
3.5. Reliance by Issuer. To the extent not inconsistent with ss.3.4, the
Issuing Bank shall be entitled to rely, and shall be fully protected in relying
upon, any Letter of Credit, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document reasonably believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Issuing Bank. The Issuing Bank
shall be fully justified in failing or refusing to take any action under this
Agreement unless it shall first have received such advice or concurrence of the
Required Revolving Credit Lenders as it reasonably deems appropriate or it shall
first be indemnified to its reasonable satisfaction by the Revolving Credit
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Issuing Bank shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement in accordance with a request of the Required Revolving Credit
Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon the Revolving Credit Lenders and all future
holders of the Notes or of a Letter of Credit Participation.
3.6. Existing Letters of Credit. The Borrower and the Lenders each agree
that (a) any letter of credit which has been previously issued by BankBoston
under the Existing Credit Agreement (the "Existing Letters of Credit") for the
account of the Borrower or any of its Subsidiaries, shall be deemed a Letter of
Credit issued under and governed by this Agreement, (b) this Credit Agreement
supercedes any and all prior agreements between the Borrower or any of its
Subsidiaries and BankBoston with respect to the Existing Letters of Credit, and
(c) all Existing Letters of Credit, from and after the Restatement Effective
Date, shall be subject to and governed by the terms of this Agreement.
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4. REDUCTION OF COMMITMENTS; PAYMENTS; PREPAYMENTS.
4.1. Reallocation and Voluntary Reduction of Unutilized Commitments.
(a) Voluntary Reduction of Revolving Credit Loan Commitment. The
Borrower shall have the right at any time and from time to time, upon
three (3) Business Days prior written notice to the Agent, to reduce by
$1,000,000 or an integral multiple of $500,000 in excess thereof or to
terminate entirely the Total Revolving Credit Commitment, whereupon the
Revolving Credit Commitments of each Revolving Credit Lender shall be
reduced pro rata in accordance with its respective Revolving Credit
Commitment Percentage of the amount specified in such notice or, as the
case may be, terminated. Promptly after receiving any notice of the
Borrower delivered pursuant to this ss.4.1(a), the Agent will notify the
Lenders with a Revolving Credit Commitment of the substance thereof. Upon
the effective date of any such reduction or termination, the Borrower
shall pay to the Agent for the respective accounts of such Lenders the
full amount of any Revolving Credit Commitment Fee then accrued on the
amount of the reduction. No reduction or termination of the Revolving
Credit Commitment may be reinstated.
(b) Voluntary Reduction of Total Acquisition Commitment. The
Borrower shall have the right at any time and from time to time upon three
(3) Business Days prior written notice to the Agent, to reduce by
$1,000,000 or an integral multiple of $500,000 in excess thereof or to
terminate entirely the Total Acquisition Commitment, whereupon the Total
Acquisition Loan Commitment and the Total UK Acquisition Loan Commitment
shall be reallocated, subject to the provisions of ss.4.1(e), and the
Acquisition Loan Commitments and UK Acquisition Loan Commitments of the
Acquisition Loan Lenders shall be reduced pro rata in accordance with
their respective Acquisition Loan Commitment Percentages and UK
Acquisition Loan Commitment Percentages of the amount specified in such
notice or, as the case may be, terminated. Promptly after receiving any
notice of any Borrower delivered pursuant to this ss.4.1(b), the Agent
will notify the Lenders of the substance thereof. Upon the effective date
of any such reduction and reallocation or termination, the applicable
Borrower shall pay to the Agent for the respective accounts of the
applicable Lenders the full amount of any Acquisition Commitment Fee or UK
Acquisition Commitment Fee then accrued on the amount of the reduction. No
reduction or termination of the Total Acquisition Commitment may be
reinstated.
(c) Intentionally Omitted.
(d) Intentionally Omitted.
(e) Reallocation of Total Acquisition Commitment. The Borrower shall
have the right, no more frequently than once in any calendar month (unless
otherwise permitted by the Agent) to request the reallocation of the
unborrowed and unused portion of the Total Acquisition Commitment between
the Total Acquisition Loan Commitment and the Total UK Acquisition Loan
Commitment, whereupon the Total Acquisition Loan Commitment and the Total
UK Acquisition Loan Commitment shall be reallocated as specified in such
notice and the Acquisition Loan Commitments and UK Acquisition Loan
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Commitments of the Acquisition Loan Lenders shall be reallocated pro rata
in accordance with their respective Acquisition Loan Commitment
Percentages and UK Acquisition Loan Commitment Percentages of the amount
specified in such notice. The Borrower shall give to the Agent written
notice in the form of Exhibit J hereto of each reallocation requested
under this ss.4.1(e) (a "Commitment Reallocation Request"). Each such
notice shall specify (i) the Total Acquisition Loan Commitment and Total
UK Acquisition Loan Commitment as of the date of such notice, (ii) each
Borrower's Total Acquisition Loan Commitment and Total UK Acquisition Loan
Commitment, as the case may be, after giving effect to such notice, and
(iii) the effective date of such reallocation, which date shall be no less
than ten (10) Business Days after the date of such notice (the "Commitment
Reallocation Date"). Upon giving effect to a Commitment Reallocation
Request, the sum of the Acquisition Loan Commitments and UK Acquisition
Loan Commitments shall not exceed the Total Acquisition Commitment in
effect at that time. On the Commitment Reallocation Date, the Acquisition
Loan Commitments and UK Acquisition Loan Commitments shall be reallocated
in accordance with the related Commitment Reallocation Request given in
compliance with the foregoing requirements and Schedule 1 shall be deemed
revised to reflect the reallocation. The Agent shall keep a record of each
Commitment Reallocation Request and the Acquisition Loan Commitments and
UK Acquisition Loan Commitments of each Lender as in effect on each date
and such record shall be conclusive and binding on all parties hereto, in
the absence of manifest error. A reallocation of the Total Acquisition
Commitment under this ss.4.1 shall not be deemed to be a reduction of the
Total Acquisition Commitment.
4.2. Mandatory Reduction of Commitments.
(a) Intentionally Omitted.
(b) The Term Loan A Commitment of each Lender with such a Commitment
and the Term Loan B Commitment of each Lender with such a Commitment shall
terminate immediately following the conversion of Existing Acquisition
Loans to Term Loans on the Restatement Effective Date pursuant to
ss.ss.2.1(a) and 2.1(b).
(c) The Revolving Credit Commitment of each Lender with such a
Commitment shall terminate on the Revolving Credit Loan Maturity Date.
(d) The Acquisition Loan Commitment of each Lender with such a
Commitment and the UK Acquisition Loan Commitment of each Lender with such
a Commitment shall terminate in their entirety on November 19, 2000.
(e) If the Borrower has not received during the period commencing on
the Restatement Effective Date and ending on June 30, 1999, at least
$30,000,000 of Net Cash Proceeds from the issuance and sale of Permitted
Capital Stock and/or Permitted Disqualified Capital Stock, the Acquisition
Loan Commitment shall automatically be reduced on June 30, 1999 by the
amount by which such Net Cash Proceeds received by the Borrower during
such period is less than $30,000,000. On or prior to the date of such
mandatory reduction the Borrower shall reallocate the Total Acquisition
Commitment between the Total Acquisition Loan Commitment and the Total UK
Acquisition Loan Commitment, whereupon the Acquisition Loan Commitments
and UK
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Acquisition Loan Commitments of the Acquisition Loan Lenders shall be
reallocated pro rata in accordance with their respective Acquisition Loan
Commitment Percentages and UK Acquisition Loan Commitment Percentages. Upon
giving effect to the reallocation, the sum of the Acquisition Loan Commitments
and UK Acquisition Loan Commitments shall not exceed the Total Acquisition
Commitment then in effect. Schedule 1 shall be deemed revised to reflect the
reallocation. The Agent shall keep a record of such reallocation and the
Acquisition Loan Commitments and UK Acquisition Loan Commitments of each Lender
in effect following such reallocation and such record shall be conclusive and
binding on all parties hereto, in the absence of manifest error. Upon the
effective date of such reduction and reallocation, the applicable Borrower shall
pay to the Agent for the respective accounts of the applicable Lenders the full
amount of any Acquisition Commitment Fee or UK Acquisition Commitment Fee then
accrued on the amount of the reduction. No such reduction of the Total
Acquisition Commitment may be reinstated.
4.3. Voluntary Prepayments of Loans.
(a) The Borrower shall have the right, at its election, to repay
outstanding Revolving Credit Loans, Acquisition Loans and Term Loans as a
whole, or in part, at any time without premium or penalty (but subject to
ss.2.16); provided, however, that during the period from the Original
Closing Date through the first anniversary of the Original Closing Date,
any prepayment of the outstanding Term Loans B shall be subject to a
prepayment premium in an amount equal to one percent (1%) of the total
amount of each such prepayment. Such prepayment premium shall be due and
payable on the date that any such prepayment is made by the Borrower. The
Borrower shall give the Agent, no later than 1:00 p.m. (Boston time), at
least one (1) Business Day prior written notice of any proposed prepayment
pursuant to this ss.4.3 of Base Rate Loans, and three (3) Eurocurrency
Business Days notice of any proposed prepayment pursuant to this ss.4.3 of
Eurocurrency Rate Loans, in each case specifying the proposed date of
prepayment, and the principal amount, Type and Tranche of Loans to be
prepaid.
(b) The UK Borrower shall have the right, at its election, to repay
the outstanding amount of the UK Acquisition Loans, as a whole or in part,
at any time without penalty or premium (but subject to ss.2.16). The UK
Borrower shall give the UK Fronting Lender (with a copy to the Agent), no
later than 10:00 a.m. (London time), at least three (3) Eurocurrency
Business Days notice of any proposed prepayment pursuant to this ss.4.3 of
Eurocurrency Rate Loans, in each case specifying the proposed date of
prepayment of UK Acquisition Loans and the principal amount to be prepaid.
(c) Each partial prepayment shall be in the principal amount of
$500,000 or an integral multiple thereof and shall be accompanied by the
payment of accrued interest on the principal prepaid to the date of
prepayment and shall be applied, in the absence of instruction by the
Borrower, first to principal of Base Rate Loans and then to principal of
Eurocurrency Rate Loans. Any partial prepayment of Eurocurrency Rate Loans
shall be in such amounts and be made pursuant to such elections so that,
after giving effect thereto, the aggregate principal amount of all
Eurocurrency Rate Loans having the same Interest Period shall not be less
than $5,000,000 or a whole multiple of $1,000,000 in excess thereof.
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(d) Each partial repayment or prepayment in respect of Loans of any
Tranche (whether voluntary, mandatory or scheduled) shall be applied pro
rata to such Loans based on the then outstanding amount of such Loans on
such prepayment date.
(e) Each prepayment of Term Loans, or, following the termination of
the Acquisition Loan Commitment Period, the Acquisition Loans and/or the
UK Acquisition Loans, pursuant to this ss.4.3 must consist of a prepayment
of Term Loans A (in an amount equal to the Term Loan A Percentage of such
prepayment), Term Loans B (in an amount equal to the Term Loan B
Percentage of such prepayment), Acquisition Loans (in an amount equal to
the Acquisition Loan Percentage of such prepayment), and UK Acquisition
Loans (in an amount equal to the UK Acquisition Loan Percentage of such
prepayment); provided, however, that during the Acquisition Loan
Commitment Period (x) a prepayment of Acquisition Loans shall not be
required to be accompanied by a prepayment of Term Loans or UK Acquisition
Loans, (y) a prepayment of UK Acquisition Loans shall not be required to
be accompanied by a prepayment of Acquisition Loans or Term Loans, and (z)
a prepayment of Term Loans shall not be required to be accompanied by a
prepayment of Acquisition Loans or UK Acquisition Loans. No amount prepaid
with respect to the Term Loans may be reborrowed. No amount prepaid,
following the termination of the Acquisition Loan Commitment Period, with
respect to the Acquisition Loans or the UK Acquisition Loans, may be
reborrowed.
(f) Each prepayment, pursuant to this ss.4.3, of (i) Acquisition
Loans and UK Acquisition Loans, following the termination of the
Acquisition Loan Commitment Period, shall be applied to reduce the then
remaining scheduled repayments of the respective Tranche being repaid on a
pro rata basis (based upon the then remaining principal amount of each
such scheduled repayment), and (ii) Term Loans shall be applied to reduce
the then remaining scheduled repayments of the respective Tranche being
repaid on a pro rata basis (based upon the then remaining principal amount
of each such scheduled repayment).
(g) Any Term Loan B Lender may elect, by notice to the Agent in
writing (or by telephone or telecopy promptly confirmed in writing) at
least one (1) Business day prior to any prepayment of Term Loans B being
made by the Borrower for the account of such Lender pursuant to this
ss.4.3, to cause all or a portion of such prepayment to be applied instead
to prepay the Term Loans A, and, following the termination of the
Acquisition Loan Commitment Period, the Acquisition Loans and the UK
Acquisition Loans, in accordance with ss.4.3.
4.4. Obligations Exceed Commitment or Borrowing Base.
(a) If at any time the sum of the outstanding (i) Revolving Credit
Loans, plus (ii) Letter of Credit Exposure plus (iii) Excess UK Working
Capital Outstandings exceeds the lesser of (x) the Total Revolving Credit
Commitment in effect at such time and (y) the Borrowing Base in effect at
such time, then the Borrower shall immediately pay the amount of such
excess to the Agent for the respective accounts of the Lenders for
application: first, to any Unpaid Reimbursement Obligations; second, to
the Revolving Credit Loans; and third, to provide to the Agent cash
collateral for Reimbursement Obligations as contemplated by ss.3.2(b) and
(c). Each payment of any Unpaid Reimbursement Obligations or
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prepayment of Revolving Credit Loans shall be allocated among Revolving
Credit Lenders, in proportion, as nearly as practicable, to Unpaid
Reimbursement Obligations or (as the case may be) the outstanding
Revolving Credit Loans of such Lender, with adjustments to the extent
practicable to equalize any prior payments or repayments not exactly in
proportion.
(b) If at any time during the Acquisition Loan Commitment Period the
sum of outstanding Acquisition Loans exceeds the Total Acquisition Loan
Commitment, then the Borrower shall immediately pay the amount of such
excess to the Agent for the respective accounts of the Acquisition Loan
Lenders for application to the Acquisition Loans. Each payment of any
portion of the Acquisition Loans shall be allocated among such Lenders
according to such Lenders' Acquisition Loan Commitment Percentage.
(c) If at any time during the Acquisition Loan Commitment Period the
sum of the Dollar Equivalent of all outstanding UK Acquisition Loans
exceeds the Total UK Acquisition Loan Commitment for any reason (including
fluctuations in currency rates) for a period of five (5) or more
consecutive Business Days, then the UK Borrower shall immediately pay the
amount of such excess to the UK Fronting Lender for application to the UK
Acquisition Loans.
4.5. Scheduled Payments of Principal of Term Loans A. The Borrower
promises to pay to the Agent for the account of the Lenders with Term Loans A
the principal amount of the Term Loans A in twenty (20) consecutive quarterly
installments with each installment payment due and payable on the last day of
each March, June, September and December (each such date a "Term Loan A Payment
Date"), commencing on March 31, 1999, with a final payment on the Term Loan A
Maturity Date in an amount equal to the unpaid balance of Term Loans A, together
with all accrued and unpaid interest thereon. The aggregate principal amount of
the Term Loans A due on each Term Loan A Payment Date shall be the amount
obtained by (i) multiplying (A) the outstanding aggregate principal amount of
Term Loans A on the Restatement Effective Date (after giving effect to the
continuations and conversions contemplated by ss.2.1(a)) by (B) the percentage
set forth below opposite the period during which such Term Loan A Payment Date
falls and (ii) dividing the product of clause (i) above by the number of Term
Loan A Payment Dates in such period.
Amortization
Date Percentage
---- ----------
March 31, 1999 through December 31, 1999 10.0%
January 1, 2000 through December 31, 2000 15.0%
January 1, 2001 through December 31, 2001 15.0%
January 1, 2002 through December 31, 2002 23.75%
January 1, 2003 through November 19, 2003 36.25%
Total 100%
4.6. Scheduled Payments of Principal of Term Loans B. The Borrower
promises to pay to the Agent for the account of the Lenders with Term Loans B
the principal amount of the Term Loans B in twenty-five (25)
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consecutive quarterly installments with each installment payment due and payable
on the last day of each March, June, September and December (each such date a
"Term Loan B Payment Date"), commencing on March 31, 1999, with a final payment
on the Term Loan B Maturity Date in an amount equal to the unpaid balance of
Term Loans B, together with all accrued and unpaid interest thereon. The
aggregate principal amount of the Term Loans B due on each Term Loan B Payment
Date shall be the amount obtained by (i) multiplying (A) the outstanding
aggregate principal amount of Term Loans B on the Restatement Effective Date
(after giving effect to the continuations and conversions contemplated by
ss.2.1(b)) by (B) the percentage set forth below opposite the period during
which such Term Loan B Payment Date falls and (ii) dividing the product of
clause (i) above by the number of Term Loan B Payment Dates in such period.
Amortization
Date Percentage
---- ----------
March 31, 1999 through December 31, 1999 1.0%
January 1, 2000 through December 31, 2000 1.0%
January 1, 2001 through December 31, 2001 1.0%
January 1, 2002 through December 31, 2002 1.0%
January 1, 2003 through December 31, 2003 1.0%
January 1, 2004 through December 31, 2004 47.5%
January 1, 2005 through February 1, 2005 47.5%
Total 100%
4.7. Scheduled Payments of Principal of Acquisition Loans and UK
Acquisition Loans.
(a) The Borrower promises to pay to the Agent for the account of the
Lenders with Acquisition Loans the aggregate principal amount of the
Acquisition Loans outstanding on the last day of the Acquisition Loan
Commitment Period in thirteen (13) equal consecutive quarterly
installments. Each such installment shall be due and payable on the last
day of each calendar quarter, commencing with the calendar quarter ended
December 31, 2000, with the remaining unpaid balance of the Acquisition
Loans being absolutely due and payable on the Acquisition Loan Maturity
Date, together with all accrued and unpaid interest thereon.
(b) The UK Borrower promises to pay to the UK Fronting Lender for
the account of the Lenders with UK Acquisition Loans the aggregate
principal amount of the UK Acquisition Loans outstanding on the last day
of the Acquisition Loan Commitment Period in thirteen (13) equal
consecutive quarterly installments. Each such installment shall be due and
payable on the last day of each calendar quarter, commencing with the
calendar quarter ended December 31, 2000, with the remaining unpaid
balance of the UK Acquisition Loans being absolutely due and payable on
the Acquisition Loan Maturity Date, together with all accrued and unpaid
interest thereon.
4.8. Revolving Credit Maturity Date. The Borrower promises to pay to the
Agent for the account of the Lenders with Revolving Credit Loans the aggregate
principal amount of the Revolving Credit Loans outstanding on the
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Revolving Credit Loan Maturity Date, and there shall become absolutely due and
payable on the Revolving Credit Loan Maturity Date all of the Revolving Credit
Loans outstanding on such date, together with all accrued and unpaid interest
thereon.
4.9. Certain Mandatory Prepayments of Loans.
(a) The Borrower or the UK Borrower, as the case may be, will prepay
the Loans, in accordance with the allocation and application provisions of
ss.4.10, on the date of receipt by the Borrower or any of its Subsidiaries
of any of the amounts described below, by the amount described below:
(i) Asset Sales. One hundred percent (100%) of the Net Cash
Proceeds from any sale or other disposition of Property (including
any sale or other disposition of Capital Stock of any Subsidiary of
the Borrower) of the Borrower or any of its Subsidiaries (other than
Net Cash Proceeds from (x) the sale or other disposition of
inventory in the ordinary course of business consistent with past
practices, (y) the sale or other disposition of equipment in the
ordinary course of business, to the extent that the Borrower
delivers a certificate to the Agent on or prior to the date of
receipt stating that such Net Cash Proceeds shall be reinvested in
the ordinary course of business in replacement assets in which the
Agent shall have a perfected first priority security interest for
the benefit of the Agent and the Lenders (subject only to Permitted
Liens) within a period specified in such certificate not to exceed
180 days after the receipt of such Net Cash Proceeds (which
certificate shall set forth the Borrower's estimate of the proceeds
to be so expended); provided, that if any portion of such proceeds
are not so used within the period specified in such certificate,
such remaining portion of such Net Cash Proceeds shall be applied to
prepay the Loans on the last day of such period, and (z) other sales
or dispositions of Property so long as the aggregate amount of Net
Cash Proceeds from such asset sales or dispositions does not exceed
$100,000 in the aggregate for all such sales or dispositions in any
fiscal year of the Borrower).
(ii) Recovery Events. One hundred percent (100%) of the cash
proceeds from any Recovery Event (net of any reasonable costs
incurred in connection with such Recovery Event ), provided, that
such cash proceeds not in excess of $10,000,000 in the aggregate for
all Recovery Events received during any fiscal year of the Borrower
shall not be required to be so applied on such date to the extent
that (A) the Borrower shall have demonstrated to the reasonable
satisfaction of the Agent (based on, among other things, operating
and financial projections and pro forma financial statements
delivered to the Agent and certified by the Borrower's chief
financial officer) that, after giving effect to the receipt and
application of such proceeds, all covenants (including covenants
contained in ss.11 of this Agreement) contained herein (x) would
have been satisfied on a pro forma basis as at the end of and for
the Most Recent Reference Period, and (y) will be satisfied on a pro
forma basis through the period ending two years after receipt of
such proceeds and (B) the Borrower delivers to the Agent on or prior
to such date a certificate stating that such cash proceeds shall be
used to replace or restore any Property in respect of which such
proceeds were paid within a period specified in such certificate not
to exceed 180 days
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after the date of receipt of such proceeds (which certificate shall
set forth the Borrower's estimate of the proceeds to be so
expended); and provided further, that if any portion of such
proceeds are not so used within the period specified in the
foregoing proviso, such remaining portion of such cash proceeds
shall be applied to prepay the Loans on the last day of such period.
(iii) Debt Issuances. One hundred percent (100%) of the Net
Cash Proceeds from any issuance, incurrence or disposition of any
Indebtedness (other than the issuance or incurrence of Indebtedness
permitted pursuant to ss.10.1).
(iv) Equity Issuances. Fifty percent (50%) of Net Cash
Proceeds from any issuance by the Borrower of any Equity Interests
and one hundred percent (100%) of any Net Cash Proceeds from any
issuance by any Subsidiary of the Borrower of any Equity Interests,
provided that
(A) Net Cash Proceeds of Equity Interests of the
Borrower issued to officers or employees of the Borrower or
any of its Subsidiaries ("Employee Stock Proceeds") shall not
be required to be applied to prepay the Loans on the date of
the receipt thereof (unless such date of receipt is also a
date specified below) but instead shall be required to be paid
on each date on which the aggregate amount of such Employee
Stock Proceeds received during the period commencing on the
later of (x) the Original Closing Date and (y) the date on
which a mandatory prepayment was most recently made pursuant
to this ss.4.9(a)(iv) as a result of the receipt of Employee
Stock Proceeds and ending on the date of determination (the
"Employee Stock Proceeds Payment Period"), equals $100,000,
with the amount of the prepayments required on each such date
to equal fifty percent (50%) of the aggregate amount of
Employee Stock Proceeds received on or before such date during
the applicable Employee Stock Proceeds Payment Period;
(B) Net Cash Proceeds of Permitted Disqualified Capital
Stock issued and sold by the Borrower after the Original
Closing Date in compliance with the requirements of ss.10.7(b)
shall not be required to be applied to prepay the Loans if all
such Net Cash Proceeds are used substantially concurrently
with such issuance to finance a Permitted Acquisition;
(C) Up to $30,000,000 of Net Cash Proceeds of Permitted
Capital Stock issued and sold by the Borrower after the
Original Closing Date in compliance with the requirements of
ss.10.7(c) shall not be required to be applied to prepay the
Loans if
(x) all such Net Cash Proceeds are used
substantially concurrently with such issuance to finance
a Permitted Acquisition; or
(y) the Borrower notifies the Agent in writing
prior to its receipt of such Net Cash Proceeds that it
intends to
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use such Net Cash Proceeds to finance a Permitted
Acquisition, and each of the following conditions
precedent is satisfied:
(1) such Net Cash Proceeds are deposited
into the Prepayment Obligations Cash Collateral
Account pending application of such Net Cash
Proceeds, in which event the Agent need not
release such Net Cash Proceeds to the Borrower
except upon presentation of evidence satisfactory
to the Agent that such Net Cash Proceeds are to be
applied in accordance with the provisions of this
Agreement; and
(2) such Net Cash Proceeds are in fact so
used to finance a Permitted Acquisition during the
Acquisition Loan Commitment Period;
if any such Net Cash Proceeds are not used to finance a
Permitted Acquisition during the Acquisition Loan
Commitment Period, such Net Cash Proceeds shall
forthwith be used and applied in the manner required for
Net Cash Proceeds governed by ss.4.9(a)(iv) but not by
this subparagraph (C) (e.g., if the Borrower receives
$30,000,000 of Net Cash Proceeds from its issuance of
Permitted Capital Stock, gives the notice required by
clause (y) of this subparagraph (C), deposits such Net
Cash Proceeds as required by subclause (1) above, does
not use any of such Net Cash Proceeds during the
Acquisition Loan Commitment Period, and, at the end of
the Acquisition Loan Commitment Period, has not used any
of the $20,000,000 basket amount of subparagraph (D) of
ss.4.9(a)(iv), the result would be as follows:
$20,000,000 of such Net Cash Proceeds would utilize in
full the $20,000,000 basket amount of subparagraph (D)
of ss.4.9(a)(iv), and would not be required to be used
to prepay the Loans, and fifty percent (50%) of the
$10,000,000 balance of such Net Cash Proceeds would be
required to be used forthwith to prepay the Loans, in
accordance with the allocation and application
provisions of ss.4.10).
(D) Up to an additional $20,000,000 of Net Cash Proceeds
of Permitted Capital Stock issued and sold by the Borrower
after the Original Closing Date in compliance with the
requirements of ss.10.7(c) shall not be required to be applied
to prepay the Loans.
(v) Acquisition Proceeds. One hundred percent (100%) of the
cash proceeds (net of reasonable expenses incurred in connection
with obtaining such proceeds) received by the Borrower or any of its
Subsidiaries pursuant to any Acquisition Document, including
indemnification or similar payments and post-closing adjustments,
but excluding, in each case, reimbursement of out-of-pocket costs
and expenses.
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(b) Excess Cash Flow. Not later than the earlier to occur of (i)
ninety (90) days after the end of each fiscal year of the Borrower,
commencing with the fiscal year ending December 31, 1999, and (ii) the
date on which the financial statements with respect to such fiscal year
are delivered pursuant to ss.9.4(a), the Borrower shall prepay the Loans
in accordance with ss.4.10 in an aggregate amount equal to (A)
seventy-five percent (75%) of Consolidated Excess Cash Flow for such
fiscal year, or (B) if the Leverage Ratio as of the last day of such
fiscal year is less than 3.5:1, fifty percent (50%) of Consolidated Excess
Cash Flow for such fiscal year. Notwithstanding the foregoing, the amount
of any Excess Cash Flow prepayment pursuant to this paragraph (b) shall
not exceed that amount which, if paid on the last day of the fiscal year
ended immediately prior to such prepayment, would have left the Borrower
and its Subsidiaries with not less than the Dollar Equivalent of
$20,000,000 of cash and Cash Equivalents as of such last day.
(c) Notice of Prepayment. The Borrower shall deliver to the Agent,
at the time of any prepayment required under this ss.4.9, (i) a
certificate signed by a financial officer of the Borrower setting forth in
reasonable detail the calculation of the amount of such prepayment and
(ii) to the extent practicable, at least three (3) days prior written
notice of such prepayment. Each notice of prepayment shall specify the
prepayment date, the Type and Tranche of each Loan being prepaid and the
principal amount of each Loan (or portion thereof) to be prepaid. All
prepayments of Loans under this ss.4.9 shall be subject to ss.2.16, but
shall (except as provided in the next sentence) be otherwise without
premium or penalty. Any prepayment of Term Loans B during the period from
the Original Closing Date through the first anniversary of the Original
Closing Date shall be subject to a prepayment premium of one percent (1%)
of the total amount of such prepayment. Such prepayment premium shall be
due and payable on the date that any such prepayment is made.
4.10. Application of Mandatory Prepayments.
(a) Whenever any mandatory prepayment is required to be made
pursuant to ss.4.9, such prepayment shall be applied by the Agent in the
following order:
first, to (A) prior to the termination of the Acquisition Loan
Commitment Period, first to prepay the principal of outstanding Term
Loans A and Term Loans B on a pro rata basis, with the Term Loans A
to receive the Term Loan A Percentage and the Term Loans B to
receive the Term Loan B Percentage, in each case, of the total
amount to be applied as a mandatory prepayment of Term Loans
pursuant to this ss.4.10, and which prepayments of such Term Loans
shall be applied to reduce the then remaining scheduled installments
of principal due on the respective Tranche pro rata (based on the
then remaining scheduled installment payments of the respective
Tranche), and second to prepay the outstanding principal of the
Acquisition Loans and the UK Acquisition Loans on a pro rata basis,
and (B) after the termination of the Acquisition Loan Commitment, to
prepay the principal of outstanding Term Loans A, Term Loans B,
Acquisition Loans and UK Acquisition Loans on a pro rata basis, with
the Term Loans A to receive the Term Loan A Percentage, the Term
Loans B to receive the Term Loan B Percentage, the Acquisition Loans
to receive the Acquisition Loan Percentage, and the UK Acquisition
Loans to receive the UK Acquisition Loan Percentage, in each case,
of the total amount to be
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applied as a mandatory prepayment of Term Loans, Acquisition Loans
and UK Acquisition Loans pursuant to this ss.4.10, and which
prepayments of such Term Loans, Acquisition Loans and UK Acquisition
Loans shall be applied to reduce the then remaining scheduled
installments of principal due on the respective Tranche pro rata
(based on the then remaining scheduled installment payments of the
respective Tranche),
second, to prepay the outstanding principal of the Revolving
Credit Loans;
third, to pay outstanding Reimbursement Obligations;
fourth, to cash collateralize Letter of Credit Exposure by
depositing cash into the Letter of Credit Cash Collateral Account in
an amount equal to such Letter of Credit Exposure.
(b) Any Term Loan B Lender may elect, by notice to the Agent in
writing (or by telephone or telecopy promptly confirmed in writing) at
least one (1) Business Day prior to any prepayment of Term Loans B
required to be made by the Borrower for the account of the such Lender
pursuant to ss.4.9, to refuse such prepayment of such Term Loans B. Any
amount so refused by any Term Loan B Lender shall be applied as provided
in paragraph (a) above.
(c) With respect to each prepayment required by ss.4.9, the Borrower
may designate the Types of Loans which are to be repaid, and, in the case
of Eurocurrency Rate Loans, the specific borrowings of the respective
Tranche pursuant to which made; provided, that (i) repayments of
Eurocurrency Rate Loans under this ss.4.10 may only be made on the last
day of an Interest Period applicable thereto unless all Eurocurrency Rate
Loans of the respective Tranche with Interest Periods ending on such date
of required payment and all Base Rate Loans of the respective Tranche have
been paid in full; (ii) in the event that any prepayment of Eurocurrency
Rate Loans shall be in such amounts and be made pursuant to such elections
so that, after giving effect thereto, the aggregate principal amount of
all Eurocurrency Rate Loans having the same Interest Period shall be less
than $5,000,000 or a whole multiple of $1,000,000 in excess thereof, such
Loans shall be immediately converted into Base Rate Loans; and (iii) each
prepayment in respect of any Loans shall be applied pro rata among such
Loans. In the absence of a designation by the Borrower as described in the
preceding sentence, the Agent shall, subject to the above, make such
designation in its sole discretion.
4.11. Change in Control. Upon the occurrence of any Change in Control, the
Borrower shall immediately prepay all the outstanding Obligations, and deposit
cash into the Letter of Credit Cash Collateral Account to secure Reimbursement
Obligations in accordance with ss.3.2.
5. FEES; TAXES; ETC.
5.1. Fees.
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(a) Closing Fees. The Borrower has paid to the Agent on the Original
Closing Date the funding fees and closing fees payable by the Borrower
pursuant to the Fee Letter.
(b) Agent's Fee and Other Fees. The Borrower shall pay to the Agent
(i) an agent's fee at the time and in the amounts required by the Fee
Letter, and (ii) any other fees or amounts required by the Commitment
Letter or the Fee Letter, as and when required by the Commitment Letter or
Fee Letter, as applicable.
(c) Commitment Fees.
(i) Revolving Credit Commitment Fee; Acquisition Commitment
Fee. The Borrower agrees to pay to the Agent, with respect to each
calendar quarter or portion thereof ending after the Original
Closing Date, for the account of the Lenders with a Commitment in
the respective Tranche, in accordance with their respective
Revolving Credit Commitment Percentages and Acquisition Loan
Commitment Percentages, (A) a Revolving Credit Loan commitment fee
(the "Revolving Credit Commitment Fee") and (B) an Acquisition Loan
commitment fee (the "Acquisition Commitment Fee") in an amount equal
to the Applicable Margin for the applicable Commitment Fee then in
effect per annum multiplied by, respectively, (x) the average daily
amount during such calendar quarter or portion thereof by which the
Total Revolving Credit Commitment exceeds the outstanding amount of
such Revolving Credit Loans and all Letter of Credit Exposure or (y)
the average daily amount during such calendar quarter or portion
thereof by which the Total Acquisition Loan Commitment exceeds the
outstanding amount of the Acquisition Loan. The Revolving Credit
Commitment Fee and the Acquisition Commitment Fee shall be payable
quarterly in arrears, on the first day of each calendar quarter for
the immediately preceding calendar quarter (or portion thereof),
commencing on the first such date following the Original Closing
Date and with a final payment on, respectively, (A) the Revolving
Credit Loan Maturity Date or any earlier date on which the Revolving
Credit Commitments shall terminate and (B) the last day of the
Acquisition Loan Commitment Period or any earlier date on which the
Total Acquisition Loan Commitment shall terminate.
(ii) UK Acquisition Commitment Fee. The UK Borrower agrees to
pay to the UK Fronting Lender, with respect to each calendar quarter
or portion thereof ending after the Original Closing Date, for the
account of the Lenders with a UK Acquisition Loan Commitment, in
accordance with their respective UK Acquisition Loan Commitment
Percentages, a UK Acquisition Loan commitment fee (the "UK
Acquisition Commitment Fee") in an amount equal to the Applicable
Margin for the UK Acquisition Commitment Fee then in effect per
annum multiplied by the average daily amount during such calendar
quarter or portion thereof by which the Total UK Acquisition Loan
Commitment exceeds the outstanding amount of the UK Acquisition
Loan. The UK Acquisition Commitment Fee shall be payable quarterly
in arrears, on the first day of each calendar quarter for the
immediately preceding calendar quarter (or portion thereof),
commencing on the first such date following the Original Closing
Date and with a final payment on the last day of the Acquisition
Loan Commitment Period or any earlier date on which the Total UK
Acquisition Loan Commitment shall terminate.
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(iii) Intentionally Omitted.
(iv) Distribution of UK Acquisition Commitment Fee. Promptly
after receipt by the UK Fronting Lender of UK Acquisition Commitment
Fees pursuant to ss.5.1(c)(ii), the UK Fronting Lender shall pay to
the Agent, for the ratable accounts of each Acquisition Loan Lender,
the amount of such UK Acquisition Commitment Fees actually received
by the UK Fronting Lender (other than any such fees payable for the
account of any Defaulting Lender, which proceeds shall be retained
by the UK Fronting Lender for its own account). Such amount shall be
paid by the Agent to the Acquisition Loan Lenders ratably in
accordance with their respective UK Acquisition Loan Commitment
Percentages.
(d) Letter of Credit Fees. The Borrower shall pay a fee (in each
case, a "Letter of Credit Fee") to the Issuing Bank in respect of each
Letter of Credit, in an amount equal to the Applicable Margin for
Eurocurrency Rate A Loans then in effect per annum multiplied by the
average daily aggregate Maximum Drawing Amount of all Letters of Credit,
and payable quarterly in arrears on the first Business Day of each
calendar quarter with respect to the previous calendar quarter. The
Issuing Bank shall distribute the Letter of Credit Fee among the Revolving
Credit Lenders pro rata in accordance with such Lenders' Revolving Credit
Commitment Percentages. In addition, the Borrower shall pay to the Issuing
Bank, solely for the account of the Issuing Bank, (i) the Issuing Bank's
customary issuance, processing, negotiation, amendment and administrative
fees, determined in accordance with customary fees and charges for similar
facilities, and (ii) a fronting fee (the "Fronting Fee") equal to one
quarter of one percent (0.25%) of the Maximum Drawing Amount of each
Letter of Credit, payable upon the issuance of such Letter of Credit.
(e) UK Fronting Fee. The UK Borrower agrees to pay to the UK
Fronting Lender for its own account a fronting fee (the "UK Fronting Fee")
of one-quarter of one percent (.25%) per annum on the Dollar Equivalent of
the average principal amount of UK Acquisition Loans outstanding during
the immediately preceding calendar month. The UK Fronting Fee shall be
payable in arrears on the first day of each month, commencing on the first
such date following the Original Closing Date, and on the Acquisition Loan
Maturity Date, or any earlier date on which the Total UK Acquisition Loan
Commitment has terminated.
5.2. Funds for Payments.
(a) Payment to Agent. All payments by the Borrower of principal,
interest, Reimbursement Obligations, Fees and any other amounts due from
the Borrower hereunder or under any of the other Loan Documents shall be
made to the Agent, for the respective accounts of the Lenders with a
Commitment in the Loans of the respective Tranche and the Agent, at the
Agent's Head Office or at such other location that the Agent may from time
to time designate, in each case on or before 2:00 p.m. (Boston,
Massachusetts, time or other local time at the place of payment), in
immediately available funds. All payments by the UK Borrower of principal,
interest, Fees, and any other amounts due from the UK Borrower hereunder
or under any of the other Loan Documents shall be made to the UK Fronting
Lender, at the UK Office of the UK Fronting Lender, or at such other
location that the UK Fronting Lender may from time to time designate, in
each case on
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or before 11:00 a.m. (London, England, time or other local time at the
place of payment), in immediately available funds.
(b) No Offset, etc. All payments by any of the Transaction Parties
hereunder and under any of the other Loan Documents shall be made without
setoff or counterclaim and free and clear of and without deduction for any
taxes, levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or
hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein (including the
United States, the United Kingdom or any political subdivision in or of
the United States, the United Kingdom or any other jurisdiction from or to
which a payment is made by or on behalf of the Transaction Parties or by
any federation or organization of which the United States, the United
Kingdom or any such jurisdiction is a member at the time of payment)
unless such Transaction Party is compelled by law to make such deduction
or withholding. If any such obligation is imposed upon any of the
Transaction Parties with respect to any amount payable by it hereunder or
under any of the other Loan Documents, such Transaction Party will pay to
the Agent, for the account of (i) the Lenders with a Commitment in Loans
of the respective Tranche, (ii) in the event of the termination of any
Commitment, the Lenders with outstanding Loans of the respective Tranche,
or (as the case may be), (iii) the Agent, on the date on which such amount
is due and payable hereunder or under such other Loan Document, such
additional amount in Dollars as shall be necessary to enable the Lenders
or the Agent to receive the same net amount which such Lenders or the
Agent would have received on such due date had no such obligation been
imposed upon such Transaction Party. Each of the Transaction Parties will
deliver promptly to the Agent certificates or other valid vouchers for all
taxes or other charges deducted from or paid with respect to payments made
by such Transaction Party hereunder or under such other Loan Document.
5.3. Computations. All computations of interest on (a) Base Rate Loans and
of Fees shall, unless otherwise expressly provided herein, be based on a 365-day
year and paid for the actual number of days elapsed, and (b) Eurocurrency Rate
Loans shall, unless otherwise expressly provided herein, be based on a 360-day
year (except as may otherwise be in accordance with the UK Fronting Lender's
customary method of calculation of interest and fees) and paid for the actual
number of days elapsed. Except as otherwise provided in the definition of the
term "Interest Period" with respect to Eurocurrency Rate Loans, whenever a
payment hereunder or under any of the other Loan Documents becomes due on a day
that is not a Business Day, the due date for such payment shall be extended to
the next succeeding Business Day, and interest shall accrue during such
extension.
5.4. Currency of Account.
(a) Dollars are the currency of account and payment for each and
every sum at any time due from the Transaction Parties hereunder; provided
that:
(i) each repayment or prepayment of a UK Acquisition Loan or a
part thereof shall be made in the Applicable Currency in which such
Loan is denominated at the time of that repayment;
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(ii) each payment of interest shall be made in the Applicable
Currency in which the sum in respect of which such interest is
payable is denominated, and each payment of UK Fronting Fees shall
be made in the Applicable Currency in which the sum in respect of
which such fees are payable is denominated;
(iii) each payment in respect of costs, expenses and
indemnities shall be made in the Applicable Currency in which the
same were incurred; and
(iv) any amount expressed to be payable in a currency other
than Dollars shall be paid in that other currency.
(b) No payment to the Agent, the Arranger, the Issuing Bank or any
Lender (whether under any judgment or court order or otherwise) shall
discharge the obligation or liability in respect of which it was made
unless and until the Agent, the Arranger, the Issuing Bank or such Lender
shall have received payment in full in the currency in which such
obligation or liability was incurred, and to the extent that the amount of
any such payment shall, on actual conversion into such currency, fall
short of such obligation or liability actual or contingent expressed in
that currency, the applicable Borrower shall indemnify and hold harmless
the Agent, the Arranger, the Issuing Bank or such Lender, as the case may
be, with respect to the amount of the shortfall.
5.5. Judgment Currency. If any sum due from any of the Transaction Parties
under this Agreement or any order or judgment given or made in relation hereto
has to be converted from the currency (the "first currency") in which the same
is payable hereunder or under such order or judgment into another currency (the
"second currency") for the purpose of (a) making or filing a claim or proof
against such Transaction Party, (b) obtaining an order or judgment in any court
or other tribunal or (c) enforcing any order or judgment given or made in
relation hereto, such Transaction Party shall indemnify and hold harmless each
of the Persons to whom such sum is due from and against any loss suffered as a
result of any discrepancy between (i) the rate of exchange used for such purpose
to convert the sum in question from the first currency into the second currency
and (ii) the rate or rates of exchange at which such Person may in the ordinary
course of business purchase the first currency with the second currency upon
receipt of a sum paid to it in satisfaction, in whole or in part, of any such
order, judgment, claim or proof.
6. COLLATERAL SECURITY AND GUARANTEE.
6.1. Security of Borrower. All the Obligations shall be secured by a
perfected first priority security interest (subject only to Permitted Liens
entitled to priority under Applicable Law) in all of the assets of the Borrower
(with such exceptions as contemplated by this Agreement or which are acceptable
to the Required Lenders), including all Capital Stock of any direct Subsidiary
of the Borrower (but excluding thirty-five percent (35%) of the Capital Stock of
each such direct Subsidiary which is a UK Subsidiary), and all intercompany
obligations owing to the Borrower, in each case wherever located and whether now
owned or hereafter acquired, pursuant to the terms of the Security Documents to
which the Borrower is a party.
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6.2. Guarantee and Security of Guarantors. All Obligations shall also be
guaranteed pursuant to the terms of the Guarantee. The Obligations of each
Guarantor shall be secured by a perfected first priority security interest
(subject only to Permitted Liens entitled to priority under Applicable Law) in
all of the assets of such Guarantor (with such exceptions as are contemplated by
this Agreement or which are acceptable to the Required Lenders) including all
Capital Stock of any direct Subsidiary of any Guarantor (but excluding
thirty-five percent (35%) of the Capital Stock of each such direct Subsidiary
which is a UK Subsidiary), and all intercompany obligations owing to such
Guarantor, in each case wherever located and whether now owned or hereafter
acquired, pursuant to the terms of the Security Documents to which such
Guarantor is a party.
6.3. Security for and Guarantee of UK Obligations. The UK Obligations
shall be secured by a perfected first priority Lien on and a first fixed and
floating charge over (subject only to Permitted Liens on certain assets entitled
to priority under Applicable Law) (a) all of the assets which secure the
Obligations of the Borrower or of any Guarantor, (b) certain assets of the UK
Borrower and any other UK Subsidiary, whether now owned or hereafter acquired,
to the extent such a fixed and floating charge would not constitute the giving
of unlawful financial assistance for the purposes of sections 151 to 158 of the
Companies Act 1985 (England), provided, however, that to the extent that the UK
Borrower or a UK Subsidiary cannot comply with any of the requirements of this
clause (b) due to the applicability of sections 151 to 158 of the Companies Act
1985 (England), the UK Borrower and/or a UK Subsidiary shall have completed a
Whitewash Procedure within ten (10) days after the closing of any Acquisition
whereby such assets were acquired and (c) a first priority pledge of, and fixed
charge over, all of the Capital Stock of the UK Borrower and any other UK
Subsidiary which is now or hereafter owned by any Transaction Party, in each
case to the extent contemplated by the Security Documents; provided, however,
that notwithstanding anything herein to the contrary, in the case of
Acquisitions by the UK Borrower or a UK Subsidiary of the Capital Stock of one
or more UK Companies the aggregate purchase price of which does not exceed the
Dollar Equivalent of $3,000,000, the UK Obligations shall not be secured by all
Acquired Assets of such UK Companies to the extent that the Borrower or any of
its Affiliates would need to undergo a Whitewash Procedure solely in order to
provide such Acquired Assets of such UK Companies as security for such UK
Obligations, but instead such UK Obligations shall be secured solely by the
security set forth in clause (a) and (c) above with respect to such acquired UK
Companies.
7. GUARANTEE.
7.1. Guarantee of Payment and Performance. Each of the Guarantors hereby
jointly and severally guarantees to the Lenders, the Issuing Bank and the Agent
the full and punctual payment when due (whether at stated maturity, by required
prepayment, by acceleration or otherwise), as well as the performance, of all of
the Obligations including all such which would become due but for the operation
of the automatic stay pursuant to ss.362(a) of the Federal Bankruptcy Code and
the operation of ss.ss.502(b) and 506(b) of the Federal Bankruptcy Code. This
Guarantee is an absolute, unconditional and continuing guarantee of the full and
punctual payment and performance of all of the Obligations and not of their
collectability only and is in no way
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conditioned upon any requirement that any Agent, the Issuing Bank or any Lender
first attempt to collect any of the Obligations from the Borrower or resort to
any collateral security or other means of obtaining payment. Should any of the
Borrowers default in the payment or performance of any of the Obligations, the
obligations of the Guarantors hereunder with respect to such Obligations in
default shall, upon demand by the Agent, become immediately due and payable to
the Agent, for the benefit of the Lenders, the Issuing Bank and the Agent,
without any other requirements for demand or notice of any nature, all of which
are expressly waived by each of the Guarantors. Payments by the Guarantors
hereunder may be required by the Agent on any number of occasions. All payments
by any of the Guarantors hereunder shall be made to the Agent, in the manner and
at the place of payment specified therefor in ss.5 hereof, for the account of
the Lenders, the Issuing Bank and the Agent.
7.2. Guarantors' Agreement to Pay Enforcement Costs, etc. Each of the
Guarantors further jointly and severally agrees, as the principal obligor and
not as a guarantor only, to pay to the Agent, on demand, all reasonable
out-of-pocket costs and expenses (including court costs and legal expenses,
including, in the case of the occurrence and continuation of a Default or Event
of Default, the allocated cost of staff counsel) incurred or expended by any
Agent, the Issuing Bank or any Lender in connection with the Obligations, this
Guarantee and the enforcement thereof, together with interest on amounts
recoverable under this ss.7 from the time when such amounts become due until
payment, whether before or after judgment, at the rate of interest for overdue
principal set forth in ss.2.8 hereof, provided that if such interest exceeds the
maximum amount permitted to be paid under applicable law, then such interest
shall be reduced to such maximum permitted amount.
7.3. Waivers by the Guarantors; Lenders' Freedom to Act. Each of the
Guarantors agrees that the Obligations will be paid and performed strictly in
accordance with their respective terms, regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such terms
or the rights of any Agent, the Issuing Bank or any Lender with respect thereto.
Each of the Guarantors waives promptness, diligence, presentment, demand,
protest, notice of acceptance, notice of any Obligations incurred and all other
notices of any kind, all defenses which may be available by virtue of any
valuation, stay, moratorium law or other similar law now or hereafter in effect,
any right to require the marshalling of assets of any of the Borrowers or any
other entity or other Person primarily or secondarily liable with respect to any
of the Obligations, and all suretyship defenses generally. Without limiting the
generality of the foregoing, each of the Guarantors agrees to the provisions of
any instrument evidencing, securing or otherwise executed in connection with any
Obligation and agrees that the obligations of such Guarantor hereunder shall not
be released or discharged, in whole or in part, or otherwise affected by (a) the
failure of any Agent, the Issuing Bank or any Lender to assert any claim or
demand or to enforce any right or remedy against any of the Borrowers or any
other entity or other person primarily or secondarily liable with respect to any
of the Obligations; (b) any extension, compromise, refinancing, consolidation or
renewal of any Obligation; (c) any change in the time, place or manner of
payment of any of the Obligations or any rescissions, waivers, compromise,
refinancing, consolidation or other amendments or modifications of any of the
terms or provisions of this Agreement, the other Loan Documents or any other
agreement evidencing, securing or otherwise
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executed in connection with any of the Obligations, (d) the addition,
substitution or release of any entity or other person primarily or secondarily
liable for any Obligation; (e) theadequacy of any rights which any Agent, the
Issuing Bank or any Lender may have against any collateral security or other
means of obtaining repayment of any of the Obligations; (f) the impairment of
any collateral securing any of the Obligations, including without limitation the
failure to perfect or preserve any rights which any Agent, the Issuing Bank or
any Lender might have in such collateral security or the substitution, exchange,
surrender, release, loss or destruction of any such collateral security; or (g)
any other act or omission which might in any manner or to any extent vary the
risk of such Guarantor or otherwise operate as a release or discharge of such
Guarantor, all of which may be done without notice to such Guarantor (it being
understood, however, that any Guarantor may make inquiries to the Agent as to
the amount of the outstanding Obligations at any time). To the fullest extent
permitted by law, each of the Guarantors hereby expressly waives any and all
rights or defenses arising by reason of (i) any "one action" or
"anti-deficiency" law which would otherwise prevent any Agent, the Issuing Bank
or any Lender from bringing any action, including any claim for a deficiency, or
exercising any other right or remedy (including any right of set-off), against
such Guarantor before or after such Agent's, the Issuing Bank's or such Lender's
commencement or completion of any foreclosure action, whether judicially, by
exercise of power of sale or otherwise, or (ii) any other law which in any other
way would otherwise require any election of remedies by any Agent, the Issuing
Bank or any Lender.
7.4. Unenforceability of Obligations Against Borrowers. If for any reason
any of the Borrowers has no legal existence or is under no legal obligation to
discharge any of the Obligations, or if any of the Obligations have become
irrecoverable from any of the Borrowers by reason of such Borrower's insolvency,
bankruptcy or reorganization or by other operation of law or for any other
reason, this Guarantee shall nevertheless be binding on each of the Guarantors
to the same extent as if each such Guarantor at all times had been the principal
obligor on all such Obligations. In the event that acceleration of the time for
payment of any of the Obligations is stayed upon the insolvency, bankruptcy or
reorganization of any of the Borrowers, or for any other reason, all such
amounts otherwise subject to acceleration under the terms of this Agreement, the
other Loan Documents or any other agreement evidencing, securing or otherwise
executed in connection with any Obligation shall be immediately due and payable
by each of the Guarantors.
7.5. Subrogation; Subordination.
(a) Postponement of Rights Against Borrowers. Until the final
payment and performance in full in cash of all of the Obligations: none of
the Guarantors shall exercise any rights against any of the Borrowers or
any other Guarantor arising as a result of payment by each such Guarantor
hereunder, by way of subrogation, reimbursement, restitution, contribution
or otherwise, and will not prove any claim in competition with the Agent,
the Issuing Bank or any Lender in respect of any payment hereunder in any
bankruptcy, insolvency or reorganization case or proceedings of any
nature; none of the Guarantors will claim any setoff, recoupment or
counterclaim against any of the Borrowers in respect of any liability of
any such Guarantor to such Borrower; and each of the Guarantors waives any
benefit of and any right to participate in any collateral security which
may be held by the Agent, the Issuing Bank or any Lender.
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(b) Subordination. The payment of any amounts due with respect to
any indebtedness of any of the Borrowers for money borrowed or credit
received now or hereafter owed to any of the Guarantors is hereby
subordinated to the prior payment in full in cash of all of the
Obligations. Each of the Guarantors agrees that such Guarantor will not
demand, sue for or otherwise attempt to collect any such indebtedness of
any of the Borrowers to such Guarantor until all of the Obligations shall
have been paid in full. If, notwithstanding the foregoing sentence, any of
the Guarantors shall collect, enforce or receive any amounts in respect of
such indebtedness while any Obligations are still outstanding, such
amounts shall be collected, enforced and received by such Guarantor as
trustee for the Lenders, the Issuing Bank and the Agent and be paid over
to the Agent, for the benefit of the Lenders, the Issuing Bank and the
Agent, on account of the Obligations without affecting in any manner the
liability of the Guarantors under the other provisions of this Guarantee.
(c) Provisions Supplemental. The provisions of this ss.7.5 shall be
supplemental to and not in derogation of any rights and remedies of the
Lenders, the Issuing Bank and the Agent under any separate subordination
agreement which the Agent may at any time and from time to time enter into
with any of the Guarantors for the benefit of the Lenders, the Issuing
Bank and the Agent.
7.6. Security; Setoff. Each of the Guarantors grants to each of the Agent,
the Issuing Bank and the Lenders, as security for the full and punctual payment
and performance of all of the Guarantors' obligations hereunder, a continuing
lien on and security interest in all securities or other property belonging to
each such Guarantor now or hereafter held by such Agent, the Issuing Bank or
such Lender and in all deposits (general or special, time or demand, provisional
or final) and other sums credited by or due from such Agent, the Issuing Bank or
such Lender to such Guarantor or subject to withdrawal by such Guarantor.
Regardless of the adequacy of any collateral security or other means of
obtaining payment of any of the Obligations, each of the Agent, the Issuing Bank
and the Lenders is hereby authorized at any time and from time to time, without
notice to any of the Guarantors (any such notice being expressly waived by each
of the Guarantors) and to the fullest extent permitted by law, to set off and
apply such deposits and other sums against the obligations of such Guarantor
under this Guaranty, whether or not such Agent, the Issuing Bank or such Lender
shall have made any demand under this Guarantee and although such obligations
may be contingent or unmatured.
7.7. Further Assurances. Each of the Guarantors agrees that it will from
time to time, at the request of the Agent, do all such things and execute all
such documents as the Agent may consider necessary or desirable to give full
effect to this Guarantee and to perfect and preserve the rights and powers of
the Lenders, the Issuing Bank and the Agent hereunder. Each of the Guarantors
acknowledges and confirms that such Guarantor itself has established its own
adequate means of obtaining from the Transaction Parties on a continuing basis
all information desired by such Guarantor concerning the financial condition of
the Transaction Parties and that such Guarantor will look to the other
Transaction Parties and not to the Agent, the Issuing Bank or any Lender in
order for such Guarantor to keep adequately informed of changes in the financial
condition of the Transaction Parties.
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7.8. Termination. Notwithstanding any termination of this Guarantee, this
Guarantee shall continue to be effective or be reinstated, if at any time any
payment made or value received with respect to any Obligation is rescinded or
must otherwise be returned by any Agent, the Issuing Bank or any Lender upon the
insolvency, bankruptcy or reorganization of the Borrower, any Guarantor, or
otherwise, all as though such payment had not been made or value received.
7.9. Successors and Assigns. This Guarantee shall be binding upon each of
the Guarantors, its successors and assigns, and shall inure to the benefit of
the Agent, the Issuing Bank and the Lenders and their respective successors,
transferees and assigns. Without limiting the generality of the foregoing
sentence, each Lender may, in accordance with the provisions of ss.16, assign or
otherwise transfer this Agreement, the other Loan Documents or any other
agreement or note held by it evidencing, securing or otherwise executed in
connection with the Obligations, or sell participations in any interest therein,
to any other entity or other person, and such other entity or other person shall
thereupon become vested, to the extent set forth in the agreement evidencing
such assignment, transfer or participation, with all the rights in respect
thereof granted to such Lender herein. None of the Guarantors may assign any of
its obligations hereunder.
7.10. Limitation on Guarantee of Obligations. Notwithstanding any
provision herein contained to the contrary, each Guarantor's liability hereunder
shall be limited to an amount not to exceed as of any date of determination the
greater of:
(a) the net amount of all Loans and other extensions of credit
(including Letters of Credit) advanced under this Agreement and directly
or indirectly re-loaned or otherwise transferred to, or incurred for the
benefit of, such Guarantor, plus interest thereon at the applicable rate
specified in this Agreement; or
(b) the amount which could be claimed by the Agent and Lenders from
such Guarantor under this Guarantee without rendering such claim voidable
or avoidable under ss.548 of Chapter 11 of the Federal Bankruptcy Code or
under any applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or common law after taking
into account, among other things, such Guarantor's right of contribution
and indemnification from each other Guarantor under ss.7.11.
7.11. Contribution with Respect to Guarantee of Obligations.
(a) To the extent that any Guarantor shall make a payment under this
Guarantee with respect to all or any of the Obligations (a "Guarantor
Payment") which, taking into account all other Guarantor Payments then
previously or concurrently made by the other Guarantors, exceeds the
amount which such Guarantor would otherwise have paid if each Guarantor
had paid the aggregate Obligations satisfied by such Guarantor Payment in
the same proportion that such Guarantor's "Allocable Amount" (as defined
below) (in effect immediately prior to such Guarantor Payment) bore to the
aggregate Allocable Amounts of all Guarantors in effect immediately prior
to the making
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of such Guarantor Payment, then following the final payment and
performance in full in cash of the Obligations and termination of the
Commitments, such Guarantor shall be entitled to receive contribution and
indemnification payments from, and be reimbursed by, each of the other
Guarantors for the amount of such excess, pro rata based upon their
respective Allocable Amounts in effect immediately prior to such Guarantor
Payment.
(b) As of any date of determination, the "Allocable Amount" of any
Guarantor shall be equal to the maximum amount of the claim which could
then be recovered from such Guarantor under this Guarantee without
rendering such claim voidable or avoidable under ss.548 of Chapter 11 of
the Federal Bankruptcy Code or under any applicable state Uniform
Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar
statute or common law.
(c) This ss.7.11 is intended only to define the relative rights of
Guarantors and nothing set forth in this ss.7.11 is intended to or shall
impair the obligations of Guarantors, jointly or severally, to pay any
amount as and when the same shall become due and payable in accordance
with the terms of this Guarantee.
(d) The rights of the parties under this ss.7.11 shall be
exercisable upon the final payment and performance in full in cash of all
of the Obligations and the termination of the Commitments.
(e) The parties hereto acknowledge that the rights of contribution
and indemnification hereunder shall constitute assets of any Guarantor to
which such contribution and indemnification is owing.
8. REPRESENTATIONS AND WARRANTIES.
The US Transaction Parties jointly and severally represent and warrant to
the Lenders, the Issuing Bank and the Agent as follows:
8.1. Corporate Authority.
(a) Incorporation; Good Standing. Each Transaction Party (a) is a
corporation (or similar business entity) duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation
or organization, (b) has all requisite corporate or other legal power to
own its property and conduct its business as now conducted and as
presently contemplated to be conducted, and (c) is in good standing as a
foreign corporation (or similar business entity) or other organization and
is duly authorized to do business in each jurisdiction in which it
conducts business, except where a failure to be so qualified would not
have a Materially Adverse Effect.
(b) Authorization. The execution, delivery and performance of the
Loan Documents to which each Transaction Party is or is to become a party
(a) are within the corporate or other legal authority of such Person, (b)
have been duly authorized by all necessary corporate or other proceedings
and (c) do not and will not conflict with or result in any breach or
contravention of any
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Applicable Law or any Contractual Obligation or Governing Document of any
Transaction Party.
(c) Enforceability. The execution and delivery of the Loan Documents
to which each Transaction Party is or is to become a party will result in
valid and legally binding obligations of such Person enforceable against
it in accordance with the respective terms and provisions hereof and
thereof, except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and except to the extent
that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any
proceeding therefor may be brought.
8.2. Approvals. The execution, delivery and performance by each
Transaction Party of the Loan Documents to which it is or is to become a party
and the transactions contemplated thereby do not require any Approval that has
not already been obtained.
8.3. Title to Properties; Leases. Except as indicated on Schedule 8.3
hereto, the Borrower and its Subsidiaries own all of the assets reflected on the
consolidated balance sheet of the Borrower and its Subsidiaries as at the
Balance Sheet Date or acquired since that date (except assets sold or otherwise
disposed of in the ordinary course of business since that date), subject to no
Liens or other rights of others, except Permitted Liens.
8.4. Financial Statements and Projections.
(a) Financial Statements. There has been furnished to each of the
Lenders
(i) the audited consolidated balance sheet and consolidated
statement of income, statement of stockholders' equity and cash
flows of the Borrower and its Subsidiaries as of December 31, 1997
and for the period from October 21, 1997 through December 31, 1997;
(ii) the audited balance sheet and unaudited statement of
income and retained earnings and cash flows of Western Methods for
the period from January 1, 1997 through November 25, 1997;
(iii) the audited balance sheet and statement of operations
and retained earnings and cash flows of Aeromil for the period from
January 1, 1997 through November 25, 1997;
(iv) the audited consolidated balance sheets and consolidated
statements of earnings and retained earnings and cash flows of
Brittain and its Subsidiaries for the fiscal year ended December 31,
1997;
(v) the audited balance sheet and statement of income and
retained earnings and cash flows of Barnes for the fiscal year ended
September 30, 1997;
(vi) the audited consolidated balance sheets and consolidated
statements of income and cash flows of Sea-Lect and its Subsidiaries
for the fiscal year ended December 31, 1997;
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(vii) the audited consolidated balance sheet and consolidated
statement of income and cash flows of Lamsco for the fiscal year
ended January 3, 1998;
(viii) the unaudited consolidated balance sheets and
statements of income and cash flows of the Borrower and its
Subsidiaries as of and for the nine (9) month period ended September
30, 1998;
(ix) the unaudited consolidated balance sheets and statements
of income of Lamsco and its Subsidiaries as of and for the nine (9)
month period ended September 30, 1998; and
(x) the audited consolidated balance sheet and consolidated
statement of income, statement of stockholders' equity and cash
flows of Modern Holdings and its Subsidiaries as of December 31,
1997.
Such financial statements have been prepared in accordance with GAAP and fairly
present the consolidated financial condition of the Borrower and its
Subsidiaries listed above, Lamsco and its Subsidiaries, or Modern Holdings and
its Subsidiaries (as the case may be), as at the close of business on the date
thereof and the results of operations and cash flows for the fiscal year or
other fiscal period then ended. There are no contingent liabilities of the
Transaction Parties as of such date involving material amounts, known to the
Borrower, Lamsco or Modern Holdings (as the case may be), which were not
disclosed in such balance sheets or the notes related thereto.
(b) Pro Forma Balance Sheet. There has been furnished to each of the
Lenders the Borrower's unaudited pro forma consolidated balance sheet as
of December 31, 1998 (the "Pro Forma Balance Sheet"), prepared after
giving effect to (i) the Lamsco Acquisition and the making of the Loans on
the Original Closing Date and the consummation of the other transactions
to occur on the Original Closing Date and (ii) the Modern Acquisition, as
if each such transaction had occurred on such date. Such Pro Forma Balance
Sheet has been prepared (i) in good faith by the Borrower, based upon
reasonable estimates and assumptions and (ii) on the basis of the
assumptions stated therein, accurately reflects all adjustments required
to be made to give effect to the transactions contemplated to occur on the
Original Closing Date and present fairly on a pro forma basis the
estimated consolidated financial position of the Borrower and its
consolidated Subsidiaries, as of such date, assuming that such
transactions had actually occurred at such date.
(c) Projections. There has been furnished to each of the Lenders
copies of the projections of (i) the annual operating budgets of the
Borrower and its Subsidiaries on a consolidated basis, (ii) balance sheets
and (iii) cash flow statements for the 1998 to 2005 fiscal years, which
disclose all assumptions made with respect to general economic, financial
and market conditions used in formulating such projections. To the
knowledge of the Borrower or any of its Subsidiaries, no facts exist that
(individually or in the aggregate) would result in any material change in
any of such projections. The projections are based upon reasonable
estimates and assumptions, have been prepared on the basis of the
assumptions stated therein and reflect the reasonable estimates of the
Borrower and its Subsidiaries of the results of operations and other
information projected therein.
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8.5. No Material Changes; Solvency; Intellectual Property.
(a) Changes. Since the Balance Sheet Date there has occurred no
Materially Adverse Effect. Since the Balance Sheet Date the Transaction
Parties have not made any Distributions or made any payments to, or
entered into any transactions with, any Affiliate, except as disclosed on
Schedule 8.5.
(b) Solvency. Each Transaction Party (after giving effect to the
transactions contemplated by this Agreement and the other Loan Documents),
is Solvent. As used herein, "Solvent" shall mean, as to any Person, that
such Person, (a) has assets having a fair value in excess of its
liabilities, (b) has assets having a fair value in excess of the amount
required to pay its liabilities on existing debts as such debts become
absolute and matured, and (c) has, and expects to continue to have, access
to adequate capital for the conduct of its business and the ability to pay
its debts from time to time incurred in connection with the operation of
its business as such debts mature.
(c) Franchises, Patents, Copyrights, etc. The Borrower and each of
its Subsidiaries possess all franchises, patents, copyrights, trademarks,
trade names, licenses and permits, and rights in respect of the foregoing,
adequate for the conduct of their respective business substantially as now
conducted without known conflict with any rights of others.
8.6. Litigation. Except as disclosed on Schedule 8.6 hereto, there are no
actions, suits, proceedings or investigations of any kind pending or, to the
Borrower's knowledge, threatened against the Borrower or any of its Subsidiaries
before any Governmental Authority, that (a) if adversely determined, could,
either in any case or in the aggregate, (i) have a Materially Adverse Effect or
(ii) result in any substantial liability not adequately covered by insurance, or
(b) question the validity or enforceability of any of the Loan Documents, or any
action taken or to be taken pursuant hereto or thereto.
8.7. No Materially Adverse Contracts, etc. Except as disclosed on Schedule
8.7 hereto, neither the Borrower nor any of its Subsidiaries is subject to any
Contractual Obligation, any Governing Document or, to the knowledge of the
Borrower, any Applicable Law, which could reasonably be expected to have a
Materially Adverse Effect.
8.8. Compliance with Other Instruments, Laws, etc. Neither the Borrower
nor any of its Subsidiaries is in violation in any material respect of any
provision of Applicable Law (except as disclosed on Schedule 8.8 hereto) or of
its Governing Documents or Contractual Obligations (including any Ancillary
Documents). Notwithstanding the reference to Schedule 8.8 hereto in this ss.8.8,
and notwithstanding the disclosures made in such Schedule 8.8, none of the
matters disclosed in such Schedule 8.8, either individually or in the aggregate,
has had, or could reasonably be expected to have, a Materially Adverse Effect.
8.9. Tax Status. Except as disclosed on Schedule 8.9 hereto, each of the
Borrower and its Subsidiaries (a) have made or filed all federal, state and
foreign income and all other tax returns, reports and declarations required by
any jurisdiction to which any of them is subject, (b) have paid all taxes and
other governmental assessments and charges shown or determined to be due
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on such returns, reports and declarations, except those being contested in good
faith and by appropriate proceedings and (c) have set aside on their books
provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply.
Except as disclosed on Schedule 8.9 hereto, there are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction,
and none of the officers of the Borrower knows of any basis for any such claim.
8.10. No Event of Default. No Default or Event of Default has occurred and
is continuing.
8.11. Holding Company and Investment Company Acts. Neither the Borrower
nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of
a "holding company", or an "affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.
8.12. Absence of Financing Statements, etc. Except with respect to
Permitted Liens, there is no Security Instrument that purports to cover, affect
or give notice of any present or possible future Lien on any Property of the
Borrower or any of its Subsidiaries.
8.13. Perfection of Security Interests.
(a) The provisions of the Security Agreement are effective to create
in favor of the Agent, for the benefit of the Agent, the Issuing Bank and
the Lenders, a legal, valid and enforceable security interest in all
right, title and interest of the respective US Transaction Parties in the
Collateral described therein and the Agent, for the benefit of Agent, the
Issuing Bank and the Lenders, has a fully perfected Lien on, and security
interest in, all right, title and interest of such Transaction Parties, in
all of the Collateral described therein, subject to no Liens other than
Permitted Liens. Each of the Transaction Parties party to the Security
Agreement has good and merchantable title to all Collateral described
therein, free and clear of all Liens except Permitted Liens.
(b) So long as the Agent maintains possession of the stock
certificates representing the Stock Collateral (as defined in the Stock
Pledge Agreement) pledged to the Agent pursuant to the Stock Pledge
Agreement, together with properly completed stock powers endorsing such
shares of Stock Collateral, the security interests created in favor of the
Agent, as pledgee for the benefit of the Agent, the Issuing Bank and the
Lenders, under the Stock Pledge Agreement constitute first priority
perfected security interests in such Stock Collateral, subject to no
security interests of any other Person. No filings or recordings are
required in order to perfect (or maintain the perfection or priority of)
the security interests created in the Stock Collateral and the proceeds
thereof under the Stock Pledge Agreement.
(c) The Mortgages create, as security for the Obligations, a valid
and enforceable perfected security interest in and Lien on all of the
Mortgaged Properties in favor of the Agent for the benefit of the Agent,
the Issuing Bank and the Lenders, superior to and prior to the rights of
all third persons and subject to no other Liens (other than Permitted
Liens). Schedule 8.13 hereto
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contains a true and complete list of all Real Estate of the Borrower and
each of its Subsidiaries and the type of interest therein held by the
Borrower and/or its Subsidiaries. Each of the Borrower and its
Subsidiaries has good and marketable title at the time of the grant
thereof and at all times thereafter to all Mortgaged Properties free and
clear of all Liens except those described in the first sentence of this
subsection (c).
8.14. Employee Benefit Plans.
(a) In General. Each Employee Benefit Plan and each Guaranteed
Pension Plan has been maintained and operated in compliance in all
material respects with the provisions of ERISA and, to the extent
applicable, the Code, including but not limited to the provisions
thereunder respecting prohibited transactions and the bonding of
fiduciaries and other persons handling plan funds as required by ss.412 of
ERISA. The Borrower has heretofore delivered to the Agent the most
recently completed annual report, Form 5500, with all required
attachments, and actuarial statement required to be submitted under
ss.103(d) of ERISA, with respect to each Guaranteed Pension Plan.
(b) Terminability of Welfare Plans. Under each Employee Benefit Plan
which is an employee welfare benefit plan within the meaning of ss.3(1) or
ss.3(2)(B) of ERISA, no benefits are due unless the event giving rise to
the benefit entitlement occurs prior to plan termination (except as
required by Title I, Subtitle B, Part 6 of ERISA). The Borrower or an
ERISA Affiliate, as appropriate, may terminate each such Plan at any time
(or at any time subsequent to the expiration of any applicable bargaining
agreement) in the discretion of the Borrower or such ERISA Affiliate
without liability to any Person other than for benefits accrued prior to
such termination.
(c) Guaranteed Pension Plans. Each contribution required to be made
to a Guaranteed Pension Plan, whether required to be made to avoid the
incurrence of an accumulated funding deficiency, the notice or lien
provisions of ss.302(f) of ERISA, or otherwise, has been timely made. No
waiver of an accumulated funding deficiency or extension of amortization
periods has been received with respect to any Guaranteed Pension Plan, and
neither the Borrower nor any ERISA Affiliate is obligated to or has posted
security in connection with an amendment to a Guaranteed Pension Plan
pursuant to ss.307 of ERISA or ss.401(a)(29) of the Code. No liability to
the PBGC (other than required insurance premiums, all of which have been
paid) has been incurred by the Borrower or any ERISA Affiliate with
respect to any Guaranteed Pension Plan and there has not been any ERISA
Reportable Event (other than an ERISA Reportable Event as to which the
requirement of thirty (30) days notice has been waived), or any other
event or condition which presents a material risk of termination of any
Guaranteed Pension Plan by the PBGC. Based on the latest valuation of each
Guaranteed Pension Plan (which in each case occurred within twelve months
of the date of this representation), and on the actuarial methods and
assumptions employed for that valuation, the aggregate benefit liabilities
of all such Guaranteed Pension Plans within the meaning of ss.4001 of
ERISA did not exceed the aggregate value of the assets of all such
Guaranteed Pension Plans, disregarding for this purpose the benefit
liabilities and assets of any Guaranteed Pension Plan with assets in
excess of benefit liabilities.
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(d) Multiemployer Plans. Neither the Borrower nor any ERISA
Affiliate has incurred any material liability (including secondary
liability) to any Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan under ss.4201 of ERISA or as a
result of a sale of assets described in ss.4204 of ERISA. Neither the
Borrower nor any ERISA Affiliate has been notified that any Multiemployer
Plan is in reorganization or insolvent under and within the meaning of
ss.4241 or ss.4245 of ERISA or is at risk of entering reorganization or
becoming insolvent, or that any Multiemployer Plan intends to terminate or
has been terminated under ss.4041A of ERISA.
(e) UK Pension Schemes. The UK Borrower and the UK Subsidiaries have
no pension schemes whether final salary schemes or money purchase schemes.
8.15. Use of Proceeds.
(a) The Borrower will:
(i) use the proceeds of the Term Loans solely to fund (A) the
purchase price of the Lamsco Acquisition, (B) fees and expenses
incurred in connection with the Lamsco Acquisition, and the
financing thereof, (C) the purchase price of the Modern Acquisition
and (D) fees and expenses incurred in connection with the Modern
Acquisition and the financing thereof;
(ii) use the proceeds of Revolving Credit Loans solely to
finance permitted Capital Expenditures and for working capital and
general corporate purposes and will not use any proceeds of
Revolving Credit Loans to finance any Permitted Acquisition or any
fees or expenses incurred in connection therewith;
(iii) use the proceeds of Acquisition Loans solely to fund the
purchase price of Permitted Acquisitions and related fees and
expenses in connection therewith; and
(iv) obtain Letters of Credit solely (A) for working capital
purposes and (B) as security for capital expenditures of the
Borrower and its Subsidiaries.
(b) The UK Borrower will use the proceeds of UK Acquisition Loans
solely to fund the purchase price of Permitted Acquisitions of UK
Companies and related fees and expenses in connection therewith; and
(c) No portion of any Loan is to be used for the purpose of
purchasing or carrying any "margin security" or "margin stock" as such
terms are used in Regulations U and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R. Parts 221 and 224.
8.16. Environmental Compliance. Each Transaction Party has taken all
reasonable steps to investigate the past and present condition and usage of the
Real Estate and the operations conducted thereon and has determined that:
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(a) except as disclosed on Schedule 8.16 hereto, no Transaction
Party and no operator of the Real Estate or any operations thereon is in
violation, or alleged violation, in any material respect, of any judgment,
decree, order, law, license, rule or regulation pertaining to health,
safety or environmental matters, including without limitation, those
arising under the United Kingdom Environmental Protection Act 1990, the
United Kingdom Control of Pollution Act 1974, the United Kingdom Water
Industry Act 1991, the United Kingdom Water Resources Act 1991, the United
Kingdom Clean Air Acts, the United Kingdom Planing Hazardous Substance Act
1990, the United Kingdom Public Health Acts, the United Kingdom
Radioactive Substances Act 1960, the Environment Act 1995, any European
Community legislation regulating the same, Resource Conservation and
Recovery Act ("RCRA"), the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986 ("SARA"), the Federal
Clean Water Act, the Federal Clean Air Act, the Toxic Substances Control
Act, or any other Applicable Law relating to health, safety or the
environment (hereinafter "Environmental Laws");
(b) except as disclosed on Schedule 8.16 hereto, no Transaction
Party has received notice from any third party, including any Governmental
Authority, (i) that any one of them has been identified by the United
States Environmental Protection Agency ("EPA") as a potentially
responsible party under CERCLA with respect to a site listed on the
National Priorities List, 40 C.F.R. Part 300 Appendix B nor has any of the
Real Estate been listed on the CERCLA Information System for consideration
of placement on the National Priorities List; (ii) that any hazardous
waste, as defined by 42 U.S.C. ss.6903(5), any hazardous substances as
defined by 42 U.S.C. ss.9601(14), any pollutant or contaminant as defined
by 42 U.S.C. ss.9601(33), any pollutant or contaminant, as defined in the
Environmental Protection Act 1990 (United Kingdom), and any toxic
substances, petroleum (including crude oil), radioactive material,
asbestos or hazardous materials or other chemicals or substances regulated
by any Environmental Laws ("Hazardous Substances") which any one of them
has generated, transported or disposed of has been found at any site at
which a Governmental Authority has conducted or has ordered that any
Transaction Party conduct a remedial investigation, removal or other
response action pursuant to any Environmental Law; or (iii) that it is or
shall be a named party to any claim, action, cause of action, complaint,
or legal or administrative proceeding (in each case, contingent or
otherwise) arising out of any third party's incurrence of costs, expenses,
losses or damages of any kind whatsoever in connection with the release of
Hazardous Substances;
(c) except as disclosed on Schedule 8.16 hereto, (i) no portion of
the Real Estate is currently being or, to the Borrower's knowledge, has
been used for the handling, processing, storage or disposal of Hazardous
Substances or non-hazardous Solid Waste (as defined in the RCRA) except in
accordance with applicable Environmental Laws; and no underground tank,
underground injection facility or other underground storage receptacle for
Hazardous Substances is located on any portion of
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the Real Estate; (ii) in the course of any activities conducted by any
Transaction Party or any operators of their properties, no Hazardous
Substances or non-hazardous Solid Waste have been generated or are being
used on the Real Estate except in accordance with applicable Environmental
Laws; (iii) to the Borrower's knowledge there have been no releases (i.e.
any past or present releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, disposing or
dumping) or threatened releases of Hazardous Substances or non-hazardous
Solid Waste on, upon, into or from the Properties of any Transaction
Party, which releases would have a material adverse effect on the value of
any of the Real Estate or adjacent properties or the environment; (iv) to
the Borrower's knowledge, there have been no releases on, upon, from or
into any real property in the vicinity of any of the Real Estate which,
through soil or groundwater contamination, may have come to be located on,
and which would have an adverse effect on the value of, the Real Estate;
and (v) in addition, any Hazardous Substances or non-hazardous Solid Waste
that have been generated on any of the Real Estate have been transported
offsite only by carriers having an identification number issued by the
EPA, treated or disposed of only by treatment or disposal facilities
maintaining valid permits as required under applicable Environmental Laws,
which transporters and facilities have been and are, to the Borrower's
knowledge, operating in compliance with such permits and applicable
Environmental Laws; and
(d) no Real Estate is subject to any applicable Environmental Laws
requiring the performance of Hazardous Substances site assessments, or the
removal or remediation of Hazardous Substances, or the giving of notice to
any Governmental Authority or the recording or delivery to other Persons
of an environmental disclosure document or statement by virtue of the
transactions contemplated hereby, or as a condition to the recording of
any mortgage.
Notwithstanding the reference to Schedule 8.16 hereto in this ss.8.16, and
notwithstanding the disclosures made in such Schedule 8.16, none of the matters
disclosed in such Schedule 8.16, either individually or in the aggregate, has
had, or could reasonably be expected to have, a Materially Adverse Effect.
8.17. Subsidiaries, etc. Set forth on Schedule 8.17 hereto is a complete
and accurate list of all Subsidiaries of the Borrower and each of its
Subsidiaries, and showing (as to the Borrower and each such Subsidiary) the
jurisdiction of its incorporation, the number of shares of each class of Capital
Stock authorized and the number outstanding or issued (as applicable) and the
percentage of the outstanding or issued (as applicable) shares of each such
class legally and/or beneficially owned (directly or indirectly) by the
Borrower, such Subsidiary or Parent and the number of shares covered by all
outstanding options, warrants, rights of conversion or purchase and similar
rights. All of the outstanding Capital Stock of the Borrower and all such
Subsidiaries has been validly issued, is fully paid and non-assessable and is
owned by Parent, the Borrower or one or more of its Subsidiaries free and clear
of all Liens except those created by the Security Documents.
8.18. Bank Accounts. Schedule 8.18 sets forth the account holder, account
number, sort code (if applicable), location and a description (including
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type and currency) of each account maintained by the Borrower and each of its
Subsidiaries with any bank or similar institution, including all Agency
Accounts.
8.19. Chief Executive Office. Set forth on Schedule 8.19 hereto is a
complete and accurate list of the chief executive office or registered office,
as applicable, of the Borrower and each of its Subsidiaries, at which location
such Person keeps its books and records.
8.20. Fiscal Year. The Borrower and each of its Subsidiaries has a fiscal
year which is the twelve (12) months ending on December 31 of each year.
8.21. Accuracy and Completeness of Information. All information, reports
and other papers and data (including the Ancillary Documents, the Offering
Memorandum and the Confidential Information Memorandum) furnished to the Agent
or any Lender in connection with the transactions contemplated by this Agreement
were, at the time the same were so furnished, complete and correct in all
material respects. No Loan Document, and no document furnished or statement made
to the Agent or any Lender in connection with the negotiation, preparation or
execution of the Loan Documents, contains or will contain any untrue statement
of fact or omits or will omit to state a material fact necessary in order to
make the statements contained therein not misleading. No fact is known to the
Borrower which has had or may in the future have (so far as Borrower can
reasonably foresee) a Materially Adverse Effect that has not been set forth in
the financial statements furnished to the Agent or any Lender or other reports
or other papers or data otherwise disclosed in writing to the Agent or any
Lender.
8.22. Insurance. The Borrower and each of its Subsidiaries maintains with
financially sound and reputable insurers insurance with respect to its
Properties and businesses against such casualties and contingencies as are in
accordance with sound business practices, with the details of such coverage
being more fully described on Schedule 8.22 hereto.
8.23. Senior Debt. All Obligations, including all Loans, Reimbursement
Obligations and the Maximum Drawing Amount of all Letters of Credit, constitute
(a) "Senior Debt" (or the equivalent term) under all Subordinated Debt Documents
and (b) "Designated Senior Debt" under the Senior Subordinated Indenture. The
Borrower hereby irrevocably expressly designates all such Obligations to be
"Senior Debt" and "Designated Senior Debt" under and for all purposes of the
Senior Subordinated Indenture. The Borrower and each Guarantor hereby
irrevocably agree that all Obligations are, and are hereby made, senior in right
of payment to the Securities and each Guarantee (as such terms are defined in
the Senior Subordinated Indenture) and to all other Obligations of the Borrower
or any of its Subsidiaries under or in respect of the Senior Subordinated
Indenture or any of the other Senior Subordinated Debt Documents.
8.24. Representations and Warranties in Ancillary Documents. All
representations and warranties set forth in the Ancillary Documents are true and
correct in all material respects at the time as of which such representations
and warranties were made and on the Original Closing Date.
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8.25. Material Contracts. All Material Contracts of the Borrower and each
of its Subsidiaries as of the Original Closing Date are listed on Schedule 8.25
hereto.
8.26. Indebtedness. Schedule 8.26 sets forth a true and complete list of
all Indebtedness (other than the Loans) of the Borrower and each of its
Subsidiaries as of the Original Closing Date after giving effect to the Lamsco
Acquisition and the other transactions contemplated hereby (the "Existing
Indebtedness"), in each case showing the aggregate amount thereof and the name
of the respective obligor and any other entity which directly or indirectly
guaranteed such debt. None of the Existing Indebtedness was incurred in
connection with, or in contemplation of, the Lamsco Acquisition or the other
transactions contemplated hereby.
8.27. Lamsco Acquisition. All aspects of the Lamsco Acquisition have been
effected in accordance with the Lamsco Acquisition Documents and all Applicable
Laws. At the time of consummation thereof, all Approvals required in order to
consummate the Lamsco Acquisition shall have been obtained, given, filed or
taken and be in full force and effect. All applicable waiting periods with
respect thereto have or, prior to the time when required, will have, expired
without, in all such cases, any action being taken by any competent authority
which restrains, prevents or imposes adverse conditions upon the consummation of
the Lamsco Acquisition. There does not exist any judgment, order or injunction
prohibiting or imposing material adverse conditions upon the consummation of the
Lamsco Acquisition.
8.28. Year 2000 Problem. The Borrower and its Subsidiaries have reviewed
the areas within their businesses and operations which could be adversely
affected by, and have developed or are developing a program to address on a
timely basis, the "Year 2000 Problem" (i.e. the risk that computer applications
used by the Borrower or any of its Subsidiaries may be unable to recognize and
perform properly date-sensitive functions involving certain dates prior to and
any date after December 31, 1999). Based upon such review, the Borrower
reasonably believes that the "Year 2000 Problem" will not have any materially
adverse effect on the business or financial condition of the Borrower or any of
its Subsidiaries.
9. AFFIRMATIVE COVENANTS.
Each of the US Transaction Parties covenants and agrees with the Agent,
the Issuing Bank and each Lender that until all Commitments have terminated and
the principal of and interest on each Loan, all Fees, and all other expenses or
amounts payable under any Loan Document (other than wholly contingent
indemnification Obligations) shall have been paid in full and all Letters of
Credit have been cancelled or have expired and all amounts drawn thereunder have
been reimbursed, unless the Required Lenders shall otherwise consent in writing,
each Transaction Party will, and will cause each of its Subsidiaries to:
9.1. Maintenance of Office. Maintain its chief executive office or
registered office, as applicable, at the location set forth on Schedule 8.19
hereto, or at such other place in the United States (or the United Kingdom, in
the case of the UK Borrower or any other UK Subsidiary) as the Borrower shall
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designate upon thirty (30) days' prior written notice to the Agent, where
notices, presentations and demands to or upon such Person in respect of the Loan
Documents to which such Person is a party may be given or made.
9.2. Records and Accounts. (a) Keep true and accurate records and books of
account in which full, true and correct entries are made in accordance with GAAP
and (b) maintain adequate accounts and reserves for all taxes (including income
taxes), depreciation, depletion, obsolescence and amortization of its properties
and the properties of its Subsidiaries, contingencies, and other reserves.
9.3. Financial Statements, Certificates and Information. Deliver to each
of the Lenders:
(a) as soon as practicable, but in any event not later than ninety
(90) days after the end of each fiscal year of the Borrower, commencing
with the fiscal year ending December 31, 1998, the consolidated and
consolidating balance sheets of the Borrower and its Subsidiaries as at
the end of such year, and the related consolidated and consolidating
statements of income and consolidated statements of retained earnings and
cash flow for such year, each such statement setting forth in comparative
form the figures for the previous fiscal year and prepared in reasonable
detail and in accordance with GAAP, and all such consolidated statements
to be certified without qualification by the Independent Public
Accountants, together with a written statement from such Accountants to
the effect that they have read a copy of this Agreement, and that, in
making the examination necessary to said certification, they have obtained
no knowledge of any Default or Event of Default, or, if such Accountants
shall have obtained knowledge of any Default or Event of Default, they
shall disclose in such statement any such Default or Event of Default;
provided that such Accountants shall not be liable to the Lenders for
failure to obtain knowledge of any Default or Event of Default;
(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the first three fiscal
quarters in each fiscal year of the Borrower, commencing with the fiscal
quarter ending March 31, 1999, copies of the unaudited consolidated and
consolidating balance sheets of the Borrower and its Subsidiaries as at
the end of such quarter, and the related consolidated and consolidating
statements of income and consolidated statements of retained earnings and
cash flow for such quarter and for the portion of the Borrower's fiscal
year then elapsed, each such statement showing the comparison of the
Borrower's performance for such periods (i) to the corresponding periods
for the prior year, and (ii) to the Borrower's projected budget for such
periods, and each prepared in accordance with GAAP, together with a
certification by the principal financial or accounting officer of the
Borrower that the information contained in such financial statements
fairly presents the financial condition of the Borrower and its
Subsidiaries on the date thereof and the results of operations of the
Borrower and its Subsidiaries for the periods specified therein (in each
case, subject to normal year-end audit adjustments);
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(c) as soon as practicable, but in any event within (i) forty-five
(45) days after the end of each month ending after the Original Closing
Date and prior to May 30, 1999, and (ii) thirty (30) days after the end of
each month thereafter, copies of the unaudited monthly consolidated and
consolidating balance sheets of the Borrower and its Subsidiaries as at
the end of such month and the related consolidated and consolidating
statements of income for such month, each prepared in accordance with
GAAP, together with a certification by the principal financial or
accounting officer of the Borrower that the information contained in such
financial statements fairly presents the financial condition of the
Borrower and its Subsidiaries on the date thereof and the results of
operations of the Borrower and its Subsidiaries for the periods specified
therein (in each case, subject to normal year-end audit adjustments);
(d) simultaneously with the delivery of the financial statements
referred to in subsections (a), (b) and (c) above, a statement certified
by the principal financial or accounting officer of the Borrower in
substantially the form of Exhibit D hereto (a "Compliance Certificate"),
setting forth (in the case of any Compliance Certificate delivered in
connection with annual or quarterly financial statements) in reasonable
detail computations evidencing compliance with the covenants contained in
ss.11 and (if applicable) reconciliations to reflect changes in GAAP since
the Balance Sheet Date;
(e) contemporaneously with the filing or mailing thereof, copies of
all material of a financial nature filed with the Securities and Exchange
Commission or sent to the stockholders of the Borrower;
(f) within ten (10) Business Days after the end of each calendar
month or at such earlier time as the Agent may reasonably request, a
Borrowing Base Report setting forth the Borrowing Base as at the end of
such calendar month or other date so requested by the Agent;
(g) within ten (10) Business Days after the end of each calendar
month, an Accounts Receivable aging report with respect to the Borrower in
form and substance satisfactory to the Agent;
(h) from time to time as the Agent may reasonably request detailed
management prepared reports summarizing the Borrowers' inventory,
including information on the aging and obsolescence of such inventory;
(i) as soon as practicable, but in any event (A) for the fiscal year
commencing on January 1, 1999, not later than thirty (30) days after the
beginning of such fiscal year, and (B) for each fiscal year thereafter,
not later than thirty (30) days prior to the beginning of such fiscal
year, management-prepared consolidated and consolidating financial
forecasts of the Borrower and its Subsidiaries with respect to such fiscal
year, prepared on a quarterly basis in form satisfactory to the Agent;
(j) within ten (10) Business Days after the delivery of any
financial statements pursuant to paragraph (a) or (b), a written
explanation for the variations reflected in such financial statements
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from the financial forecasts for the applicable period, together with a
narrative discussion and analysis by management of the financial condition
and performance of the Borrower and its Subsidiaries as of the end of and
for the periods covered by such financial statements;
(k) promptly after delivery thereof, copies of any officers'
certificate or fairness opinion required to be delivered by the Borrower
under ss.4.10 of the Senior Subordinated Indenture;
(l) promptly after delivery thereof (to the extent not previously or
concurrently delivered to the Agent and the Lenders), copies of all
financial statements, projections and other financial information,
including compliance certificates, required to be delivered by the
Borrower under the Senior Subordinated Indenture;
(m) simultaneously with the delivery of the financial statements
referred to in subsection (c) above, and at such other times as the Agent
may reasonably request, a statement certified by the principal financial
or accounting officer of the Borrower setting forth the Excess UK Working
Capital Outstandings as of the end of the month for which such financial
statements relate or as of such other date as the Agent may reasonably
request;
(n) from time to time such other financial data and information
(including accountants' management letters) as the Agent or any Lender may
reasonably request.
9.4. Annual Meetings With Lenders. Within 120 days after the end of each
fiscal year of the Borrower, at the request of the Agent or Required Lenders,
hold a meeting (at a mutually agreeable location and time) with all Lenders who
choose to attend such meeting at which meeting shall be reviewed the financial
results of the previous year and the financial condition of the Borrower and its
Subsidiaries and the management-prepared financial forecasts of the Borrower and
its Subsidiaries for the current fiscal year of the Borrower and its
Subsidiaries.
9.5. Notices. Promptly notify the Agent and each of the Lenders in writing
in reasonable detail of:
(a) Defaults.
(i) The occurrence of any Default or Event of Default,
together with a reasonably detailed description thereof, and the
actions the Borrower proposes to take with respect thereto.
(ii) Any Person giving any notice or taking any other action
in respect of a claimed default (whether or not constituting an
Event of Default) under any (A) Ancillary Document, or (B) any other
Instrument or Contractual Obligation to which the Borrower or any of
its Subsidiaries is a party or obligor if such default under such
other Instruments or Contractual Obligations could result,
individually or in the aggregate, in a Materially Adverse Effect.
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(b) Environmental Events; Governmental Actions.
(i) Any violation of any Environmental Law that the Borrower
or any of its Subsidiaries reports or is required under
Environmental Laws to report to any Governmental Authority.
(ii) Upon becoming aware thereof, any inquiry, proceeding,
investigation or other action of any Governmental Authority that
could have a Materially Adverse Effect.
(c) Notification of Claim against Collateral. Any setoff, claims
(including environmental claims) withholdings or other defenses to which
any of the Collateral, or the Agent's rights with respect to Collateral,
are subject.
(d) Notice of Litigation and Judgments.
(i) Any litigation or proceedings threatened or any pending
litigation or proceedings affecting the Borrower or any of its
Subsidiaries that could have a Materially Adverse Effect and stating
the nature and status of such litigation or proceedings.
(i) Any judgment, final or otherwise, against the Borrower or
any of its Subsidiaries in an amount in excess of $500,000.
9.6. Corporate Existence; Maintenance of Properties; Performance of
Obligations.
(a) Preserve and keep in full force and effect its corporate
existence, rights and franchises.
(b) Cause all of its Properties used or useful in the conduct of its
business to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment.
(c) Make all necessary repairs, renewals, replacements, betterments
and improvements to its Properties, all as in the judgment of the Borrower
may be necessary so that the business carried on in connection therewith
may be properly and advantageously conducted at all times.
(d) Continue to engage in Related Business; provided that nothing in
this ss.9.6 shall prevent any Transaction Party from discontinuing the
operation and maintenance of any of its Properties if such discontinuance
is, in the judgment of the Borrower, desirable in the conduct of the
business of such Transaction Party and such discontinuance would not have
a Materially Adverse Effect.
(e) Perform all of the Contractual Obligations of such Transaction
Party under each of the Ancillary Documents to which such Transaction
Party is a party without giving effect to any waiver or amendment thereof
not consented to in writing by the Agent.
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9.7. Insurance. Maintain with financially sound and reputable insurers
insurance with respect to its Properties and business against such casualties
and contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and in such
amounts, containing such terms, in such forms and for such periods as described
on Schedule 8.22 hereto and as may be reasonable and prudent and in accordance
with the terms of the Security Agreement and naming the Agent as additional
insured and loss payee.
9.8. Taxes. Duly pay and discharge, or cause to be paid and discharged,
before the same shall become overdue, all taxes, assessments and other
governmental charges imposed upon it and its Real Estate, sales and activities,
or any part thereof, or upon the income or profits therefrom, as well as all
claims for labor, materials, or supplies that if unpaid might by law become a
Lien upon any of its Property; provided that any such tax, assessment, charge,
levy or claim need not be paid if the validity or amount thereof shall currently
be contested in good faith by appropriate proceedings and if adequate reserves
with respect thereto shall have been set aside on its books; and provided
further that all such taxes, assessments, charges, levies or claims shall be
paid forthwith upon the commencement of proceedings to foreclose any Lien that
may have attached as security therefor.
9.9. Inspection of Properties and Books, etc.
(a) General. Permit the Lenders, through the Agent or any of the
Lenders' other designated representatives, to visit and inspect any of its
Properties, to examine its books of account (and to make copies thereof
and extracts therefrom), and to discuss the affairs, finances and accounts
with, and to be advised as to the same by, its officers, all at such
reasonable times and intervals as the Agent or any Lender may reasonably
request.
(b) Inventory Reports and Appraisals. Promptly upon the request of
the Agent (but not more frequently than twice each calendar year, or more
frequently as determined by the Agent if an Event of Default shall have
occurred and be continuing), obtain and deliver to the Agent a report of
an independent collateral auditor (or, if an Event of Default shall have
occurred and be continuing, an appraiser) satisfactory to the Agent
(which, to the extent practicable, shall be affiliated with one of the
Lenders), with respect to the inventory component included in the
Borrowing Base, which report shall indicate (among other things) whether
or not the information set forth in the Borrowing Base Report most
recently delivered is accurate and complete in all material respects based
upon a review of the inventory (including verification as to the value,
location and respective types). All such reports shall be conducted and
made at the expense of the Borrower.
(c) Commercial Finance Examinations. No more frequently than four
times each calendar year, or more frequently as determined by the Agent if
an Event of Default shall have occurred and be continuing, upon the
Agent's request, permit the Agent's commercial finance examiners to
conduct commercial finance examinations of the Properties of the Borrower
and its Subsidiaries, all at such reasonable times as the Agent may
request. All such commercial finance examinations shall be conducted and
made at the expense of the Borrower.
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(d) Appraisals. No more frequently than once each calendar year, or
more frequently as determined by the Agent if an Event of Default shall
have occurred and be continuing, upon the request of the Agent, obtain and
deliver to the Agent appraisal reports in form and substance and from
appraisers satisfactory to the Agent, stating the then current fair
market, orderly liquidation and forced liquidation values of all or any
portion of the equipment owned by the Borrower or any of its Subsidiaries
or of any Mortgaged Property or other Real Estate that, pursuant to
ss.9.14, will become a Mortgaged Property. All such appraisals referred to
in this ss.9.9(d) shall be conducted and made at the expense of the
Borrower.
(e) Environmental Assessments. If (a) an Event of Default shall have
occurred and be continuing, or (ii) the Agent believes in good faith that
any representation hereunder relating to environmental matters is not then
true and correct, or any covenant hereunder relating to environmental
matters has not been performed, the Agent may, for the purpose of
assessing and ensuring the value of any Mortgaged Property, obtain one or
more environmental assessments or audits of such Mortgaged Property
prepared by a hydrogeologist, an independent engineer or other qualified
consultant or expert approved by the Agent to evaluate or confirm (x)
whether any Hazardous Materials are present in the soil or water at such
Mortgaged Property and (y) whether the use and operation of such Mortgaged
Property complies with all Environmental Laws. Environmental assessments
may include without limitation detailed visual inspections of such
Mortgaged Property including any and all storage areas, storage tanks,
drains, dry wells and leaching areas, and the taking of soil samples,
surface water samples and ground water samples, as well as such other
investigations or analyses as the Agent deem appropriate. All such
environmental assessments shall be conducted and made at the expense of
the Borrowers.
(f) Communications with Accountants. The US Transaction Parties (i)
authorize the Agent and, if accompanied by the Agent, the Lenders, upon
reasonable advance written notice to the Borrower, to communicate directly
with the Independent Public Accountants, provided, that a representative
of the Borrower shall have the right to participate in any such
communication and (ii) authorize such accountants to disclose to the Agent
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 any Transaction Party. At the request of the Agent, the Borrower shall
deliver a letter addressed to such accountants instructing them to comply
with the provisions of this ss.9.9(f).
9.10. Compliance with Laws, Contracts, Licenses, and Permits.
(a) Comply with (i) all Applicable Laws wherever its business is
conducted, including all Environmental Laws, (ii) all the provisions of
its Governing Documents and (iii) all its Contractual Obligations.
(b) Promptly obtain any Approval at any time required to be
obtained.
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9.11. Use of Proceeds. Each Borrower will use the proceeds of its Loans
and will obtain Letters of Credit solely for the purposes set forth in ss.8.15.
9.12. Cash Management System. The Borrower will at all times maintain the
Concentration Account. Each of the Borrower and its Domestic Subsidiaries will
(a) at all times maintain Agency Account Agreements (whereby the Agency Account
Institution party thereto shall, among other things, waive any right of set off,
other than for service charges and returns incurred in connection therewith),
with each Agency Account Institution where the Borrower or any of its Domestic
Subsidiaries maintains depository accounts, other than (i) accounts which are
used exclusively for the purposes of payment of payroll, (ii) accounts which
have balances that at all times are less than $25,000 and which are closed out
by March 31, 1999, or (iii) during the period from the Original Closing Date
through February 26, 1999, accounts maintained at Bank of America, (b) at all
times from and after March 31, 1999 direct each Agency Account Institution
pursuant to the Agency Account Agreements, to cause all funds held by such
Agency Account Institution in the Agency Accounts to be transferred daily (or
such other period as the Agent requests) to, and only to, the Agent for deposit
in the Concentration Account; provided, however, that (x) prior to March 31,
1999 the Borrower and its Domestic Subsidiaries will direct such Agency Account
Institutions pursuant to the Agency Account Agreements that such Agency Accounts
will be subject to the instructions of the Agent with respect to the cash
deposited into such Agency Accounts and (y) notwithstanding the foregoing
requirements of clause (b) and clause (x), so long as no Event of Default shall
have occurred and be continuing, (A) funds held in the Borrower's concentration
account maintained with Bank of America shall be transferred by Bank of America
to the Agent, for deposit into the Concentration Account, only on days when the
balance of the Bank of America concentration account exceeds $1,000,000, and (B)
any such transfer of funds by Bank of America to the Agent shall be limited to
an amount which, after giving effect to such transfer, results in the the
balance of the Bank of America concenration account being equal to $500,000, and
(c) direct its account debtors and obligors on instruments or other obligors of
such Borrower or Domestic Subsidiary with respect to any of the Collateral to
make all payments on or with respect to any of the Collateral due or to become
due to such Borrower or Domestic Subsidiary directly to the Concentration
Account or the Borrower's or such Domestic Subsidiary's Agency Accounts. If,
notwithstanding the requirements of the foregoing sentence, any of the Borrower
or its Domestic Subsidiaries receives any cash proceeds of any of the
Collateral, whether in the form of money, checks or otherwise, such Borrower or
Domestic Subsidiary will hold such cash proceeds in trust for the benefit of the
Agent and the Lenders and turn such cash proceeds promptly over to the Agent in
the identical form received by deposit to any Agency Account or the
Concentration Account. The Borrower and its Domestic Subsidiaries may also
maintain one or more Operating Accounts into which, prior to the occurrence of
an Event of Default, cash may be transferred from the Concentration Account (or,
during the period from the Original Closing Date through March 31, 1999, the
Borrower's concentration account maintained with Bank America) at the request of
the Borrower for purposes of paying expenses of the Borrower or such Domestic
Subsidiary, and short term investment accounts into which, prior to the
occurrence of an Event of Default, cash may be transferred from the
Concentration Accounts at the request of the Borrower for purposes of
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managing investments for the Borrower or one of its Domestic Subsidiaries.
Following the occurrence and during the continuance of an Event of Default, the
Agent shall have sole control over the Concentration Account.
9.13. Inventory Restrictions. Each of the US Transaction Parties shall
cause all Eligible Inventory to be located at all times solely at Permitted
Inventory Locations, and to be sold or otherwise disposed of in the ordinary
course of such Transaction Party's business, consistent with past practices or
as required pursuant to the terms of this Agreement.
9.14. Mortgaged Properties. The US Transaction Parties will deliver to the
Agent, promptly upon the request of the Agent, a fully executed Mortgage over
any Real Estate, in form and substance satisfactory to the Agent, together with
title insurance policies, surveys, evidences of insurance with the Agent named
as loss payee and additional insured, legal opinions (only as to due execution,
delivery, authorization and enforceability of such Mortgage and the absence of
approvals, taxes, conflicts or governmental filings or qualifications) and other
documents and certificates with respect to such Real Estate as may be reasonably
required by the Agent. The US Transaction Parties further agree that, following
the taking of such actions with respect to such Real Estate, the Agent shall
have for the benefit of the Lenders and the Agent a valid and enforceable
Mortgage over such Real Estate, free and clear of all title defects and
encumbrances except for Permitted Liens.
9.15. Ownership of Subsidiaries. Maintain legal and beneficial ownership
of one hundred percent (100%) of the Equity Interests of each of the Guarantors.
9.16. Collateral for Loans.
(a) Pledge and maintain the pledge of all of the Capital Stock of
each of its direct Subsidiaries in favor of the Agent, for the benefit of
the Secured Parties, in accordance with the provisions of the Stock Pledge
Agreement or any other Instrument evidencing a pledge of stock or charge
over shares entered into by the Borrower or any of its Subsidiaries,
except that only sixty-five percent (65%) of the Capital Stock of any
direct UK Subsidiary of the Borrower shall be pledged to secure the
Obligations (other than the UK Obligations) if the Borrowers establish, to
the reasonable satisfaction of the Agent, that a pledge of a greater
amount would result in adverse tax consequences.
(b) From time to time, at its own cost and expense, promptly secure
or cause to be secured (a) the Obligations by creating or causing to be
created in favor of the Agent for the benefit of the Lenders perfected
security interests (subject only to Permitted Liens) with respect to all
inventory, receivables, equipment, accounts, copyrights, patents,
trademarks, other general intangibles, real property and other assets of
the Borrower or any of its Domestic Subsidiaries, now owned, or hereafter
acquired, and (b) the UK Obligations by creating or causing to be created
in favor of the Agent for the benefit of the UK Fronting Lenders and
Acquisition Loan Lenders perfected security interests in and first fixed
and floating charges over (subject only to Permitted Liens) all inventory,
receivables, equipment, accounts, copyrights, patents, trademarks, other
general intangibles, real property and other assets of the UK Borrower or
any of its UK Subsidiaries, now owned, or hereafter acquired, to the
extent such a fixed and floating charge would not constitute
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the giving of unlawful financial assistance for the purposes of Sections
151 to 158 of the Companies Act 1985 (England), and each to the extent
that the Agent or the Required Acquisition Loan Lenders shall so request;
provided, that to the extent that the UK Borrower or a UK Subsidiary
cannot comply with any of the requirements of this ss.9.16(b) due to the
applicability of Sections 151 to 158 of the Companies Act 1985 (England),
the UK Borrower and/or a UK Subsidiary shall have completed a Whitewash
Procedure within ten (10) days after the closing of any Acquisition
whereby such assets were acquired; provided, further, that notwithstanding
anything herein to the contrary, in the case of Acquisitions by the UK
Borrower or another UK Subsidiary of the Capital Stock of one or more UK
Companies the aggregate purchase price of which does not exceed the Dollar
Equivalent of $3,000,000, the UK Obligations shall not be secured by all
assets of such UK Companies to the extent that the Borrower or any of its
Affiliates would need to undergo a Whitewash Procedure solely in order to
provide such assets of such UK Companies as security for such UK
Obligations, but instead such UK Obligations shall be secured by a first
priority pledge of, and fixed charge over, one hundred percent (100%) of
the Capital Stock of such UK Companies as set forth in clause (a) above.
All such security interests in and charges over such Property will be
created under Security Instruments in form and substance satisfactory to
the Agent, and the Borrower and its Subsidiaries shall deliver to the
Agent all such Security Instruments (including, without limitation, legal
opinions, title insurance policies and lien searches) as the Agent or the
Required Lenders shall reasonably request to evidence the satisfaction of
the obligations created by this ss.9.16. The Borrower agrees to provide
such evidence as the Agent or the Required Lenders shall request as to the
perfection and priority of such security interests in and charges over
such Property (subject only to Permitted Liens).
9.17. Permitted Acquisitions.
(a) In the case of any personal property or fixtures acquired by (i)
the Borrower or any of its Domestic Subsidiaries in connection with a
Permitted Acquisition (A) pledge such personal property or fixtures (to
the maximum extent permitted by Applicable Law) to the Agent as security
for the payment in full of all the Obligations, pursuant to documentation
satisfactory to the Agent (but in any event not materially more
restrictive or burdensome than the Security Documents in effect as of the
Original Closing Date), and (ii) the UK Borrower or any of its UK
Subsidiaries in connection with a Permitted Acquisition (x) pledge such
personal property or fixtures (to the extent not constituting the giving
of unlawful financial assistance for the purposes of Sections 151 to 158
of the Companies Act 1985 (England)) to the Agent as security for the
payment in full of all the UK Obligations, pursuant to documentation
satisfactory to the Agent; provided, that to the extent that the UK
Borrower or a UK Subsidiary cannot comply with any of the requirements of
this ss.9.17(a)(ii) due to the applicability of Sections 151 to 158 of the
Companies Act 1985 (England), the UK Borrower and/or a UK Subsidiary shall
have completed a Whitewash Procedure within ten (10) days after the
closing of any Acquisition whereby such assets were acquired; provided,
however, that notwithstanding anything herein to the contrary, in the case
of Acquisitions by the UK Borrower or a UK Subsidiary of the Capital Stock
of one or more UK Companies the aggregate purchase price of which does not
exceed the Dollar Equivalent of $3,000,000, the UK Obligations shall not
be secured by all Acquired Assets of such UK Companies to the extent that
the Borrower or any of its Affiliates would need to undergo a
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Whitewash Procedure solely in order to provide such Acquired Assets of
such UK Companies as security for such UK Obligations, but instead such UK
Obligations shall be secured by a first priority pledge of, and fixed
charge over, one hundred percent (100%) of the Capital Stock of such UK
Companies and (y) perform any filings, recordings or other actions
necessary in the reasonable judgment of the Agent to create in favor of
the Agent a perfected first-priority security interest in and/or charge
over all such personal property or fixtures (subject only to Permitted
Liens) within ten (10) days of any Transaction Party acquiring such
personal property or fixtures.
(b) In the case of Real Estate acquired by any Transaction Party
after the effectiveness hereof in connection with a Permitted Acquisition,
at the request of the Agent, (i) execute and deliver to the Agent, within
ten (10) days after such Transaction Party takes possession of such Real
Estate, a mortgage granting to the Agent a perfected Lien on such Real
Estate and (ii) deliver to the Agent, within ten (10) days after such
Transaction Party takes or receives possession of such Real Estate, ALTA
mortgage policies of title insurance (or its equivalent in a UK
Subsidiary's jurisdiction of organization) covering all such Real Estate
and issued by title insurance companies satisfactory to the Agent, with
proof of payment of all fees and premiums of such policy, and naming the
Agent as additional insured and loss payee; provided, further, that the
amount, form, and substance of each such mortgage title insurance policy
shall be reasonably satisfactory to the Agent and shall contain no
exceptions for coverage other than for Liens which the Agent reasonably
determines are Permitted Liens.
(c) Deliver to the Agent and the Agent's Special Counsel within ten
(10) days after the date of any Permitted Acquisition, true, complete, and
correct copies of each instrument of transfer, officer's certificate,
legal opinion and other instrument or agreement executed and delivered by
the applicable seller and/or the applicable Transaction Party in
connection with such Permitted Acquisition.
9.18. Interest Rate Protection. The Borrower will at all times maintain
Rate Protection Agreements acceptable to the Agent establishing a fixed or
maximum interest rate acceptable to the Agent with respect to an aggregate
notional principal amount of Indebtedness equal to at least fifty percent (50%)
of the Consolidated Total Funded Debt of the Borrower and its Subsidiaries. Any
fixed rate debt instruments (including the Senior Subordinated Notes) issued by
the Borrower or any of its Subsidiaries and outstanding as of the Original
Closing Date and permitted hereby shall be deemed Rate Protection Agreements
acceptable to the Agent for purposes of the previous sentence, and shall count
towards the fifty percent (50%) requirement of such sentence.
9.19. UCC Searches. On or prior to the sixtieth (60th) day following the
Original Closing Date, deliver to the Agent (at the Borrower's own cost) copies
of Request for Information or Copies (UCC-11), or equivalent reports for the
purpose of verifying that all financing statements necessary or, in the opinion
of the Agent desirable, to perfect the security interests purported to be
created by the Security Documents shall have been properly recorded and filed.
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9.20. Employee Benefit Plans. (a) Promptly upon filing the same with the
Department of Labor or Internal Revenue Service upon request of the Agent,
furnish to the Agent a copy of the most recent actuarial statement required to
be submitted under ss.103(d) of ERISA and Annual Report, Form 5500, with all
required attachments, in respect of each Guaranteed Pension Plan and (b)
promptly upon receipt or dispatch, furnish to the Agent any notice, report or
demand sent or received in respect of a Guaranteed Pension Plan under ss.ss.302,
4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect of a
Multiemployer Plan, under ss.ss.4041A, 4202, 4219, 4242, or 4245 of ERISA.
9.21. Further Assurances. Cooperate with the Lenders and the Agent and
execute such further instruments and documents as Lenders or the Agent shall
reasonably request to carry out to their satisfaction the transactions
contemplated by this Agreement and the other Loan Documents.
10. NEGATIVE COVENANTS.
Each of the US Transaction Parties covenants and agrees with the Agent,
the Issuing Bank and each Lender that until all Commitments have terminated and
the principal of and interest on each Loan, all Fees, and all other expenses or
amounts payable under any Loan Document (other than wholly contingent
indemnification Obligations) shall have been paid in full and all Letters of
Credit have been cancelled or have expired and all amounts drawn thereunder have
been reimbursed, unless the Required Lenders shall otherwise consent in writing,
such Transaction Party will not, and will not permit any of its Subsidiaries to:
10.1. Indebtedness. Create, issue, incur, assume, guarantee or be or
remain liable, contingently or otherwise, with respect to (including as a result
of an Acquisition) any Indebtedness (including any Disqualified Capital Stock)
which is not permitted under Section 4.11 of the Senior Subordinated Indenture
and which is not also permitted by one of the following paragraphs:
(a) Indebtedness of the Transaction Parties to the Lenders, the
Issuing Bank and the Agent arising under the Loan Documents;
(b) Indebtedness of the Borrower and its Subsidiaries solely in
respect of bankers acceptances and performance bonds (to the extent that
such incurrence does not result in the incurrence of any obligation to
repay any obligation relating to borrowed money of others), all in the
ordinary course of business in accordance with customary industry
practices, in amounts and for the purposes customary in the Borrower's
industry; provided, that the aggregate principal amount outstanding of
such Indebtedness shall at no time exceed $250,000;
(c) Indebtedness of any Transaction Party for Purchase Money
Indebtedness; provided that the aggregate outstanding principal amount of
all such Indebtedness (including any such Indebtedness outstanding on the
Original Closing Date) shall not exceed $10,000,000 at any time;
(d) Indebtedness which is Permitted Subordinated Debt, Permitted
Seller Subordinated Debt or Permitted Disqualified Capital
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Stock, in an aggregate outstanding principal amount for all such
Indebtedness not to exceed $25,000,000 at any time;
(e) Indebtedness of the Borrower under the Senior Subordinated Notes
in an aggregate principal amount not to exceed $110,000,000, minus the
amount of any payment, prepayment, redemption, repurchase or other
acquisition of, or cancellation or discharge of, any Senior Subordinated
Notes;
(f) Indebtedness of the Borrower under the Exchange Notes issued in
exchange for the Senior Subordinated Notes in the manner described in the
Offering Memorandum, provided, that the aggregate principal amount of the
Exchange Notes outstanding at any time shall not exceed the outstanding
principal amount of the Senior Subordinated Notes on the date of the
issuance of the Exchange Notes, minus the amount of any payment,
prepayment, redemption, repurchase or other acquisition of, or
cancellation or other discharge of, any Exchange Notes;
(g) Mortgage Indebtedness secured by real property other than
Collateral, provided that the outstanding principal amount of such
Mortgage Indebtedness (including any such Indebtedness outstanding on the
Original Closing Date) shall not exceed $8,000,000 in the aggregate at any
time; and provided further that the Borrower and its Subsidiaries shall
not be permitted to incur any Mortgage Indebtedness after the Original
Closing Date unless the Borrower shall have demonstrated to the reasonable
satisfaction of the Agent (based on, among other things, operating and
financial projections and pro forma financial statements delivered to the
Agent and certified by the Borrower's chief financial officer) that,
immediately after incurring such Mortgage Indebtedness, all covenants
(including covenants contained in ss.11 of this Agreement) contained
herein (i) would have been satisfied on a pro forma basis as at the end of
and for the Most Recent Reference Period, and (ii) will be satisfied on a
pro forma basis through the Term Loan B Maturity Date;
(h) Indebtedness in respect of intercompany loans permitted by
ss.10.3(g);
(i) Indebtedness of the Borrower under Rate Protection Agreements
entered into for bona fide hedging purposes, and not for speculative
purposes;
(j) Indebtedness of the UK Borrower under a Permitted UK Working
Capital Facility, provided, that the outstanding principal amount of such
Indebtedness (including undrawn amounts under letters of credit, bank
guarantees, indemnities or other similar instruments) shall be less than
$10,000,000 (or the Dollar Equivalent thereof) in the aggregate at all
times;
(k) Any guarantee by the Borrower of Purchase Money Indebtedness
permitted by paragraph (c) of this ss.10.1 (to the extent permitted in the
definition of Purchase Money Indebtedness), and any
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guarantee by the Borrower of Permitted Seller Subordinated Debt permitted
by paragraph (d) of this ss.10.1 (to the extent permitted in the
definition of Permitted Seller Subordinated Debt); and
(l) Indebtedness not otherwise permitted by this ss.10.1 existing on
the Original Closing Date and listed and described on Schedule 10.1
hereto, but without giving effect to any refinancings, renewals or
increases in the principal amount thereof.
10.2. Liens. Do any of the following: (i) create or incur or suffer to
exist any Lien upon any of its Property whether now owned or hereafter acquired,
or upon the income or profits therefrom; (ii) transfer any such Property or the
income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; or (iii) sell, assign, pledge or otherwise
transfer any accounts, contract rights, general intangibles, chattel paper or
instruments, with or without recourse; other than:
(a) Liens to secure taxes, assessments and other government charges
in respect of obligations not overdue or Liens to secure claims for labor,
material or supplies in respect of obligations not overdue;
(b) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations;
(c) encumbrances on Real Estate consisting of easements, rights of
way, zoning restrictions, conditions, covenants and restrictions on the
use of real property and defects and irregularities in the title thereto,
landlord's or lessor's liens under leases to which the Borrower or a
Subsidiary of the Borrower is a party, and other minor liens or
encumbrances; provided that none of such Liens (i) interferes with the use
of the Property affected in the ordinary conduct of its business and (ii)
individually or in the aggregate have an adverse effect on the business of
the Borrower and its Subsidiaries or on the value of the Property subject
to such Liens;
(d) Liens to secure obligations under Capitalized Leases of the type
and amount permitted by ss.10.1(c), so long as such Liens cover only the
personal property subject to such Capitalized Leases, and purchase money
security interests in personal property securing purchase money
Indebtedness of the type and amount permitted by ss.10.1(c), so long as
such security interests are incurred in connection with the acquisition of
such property and cover only the personal property so acquired;
(e) Liens in favor of the Agent for the benefit of the Lenders and
the Agent under the Loan Documents;
(f) Liens securing the Real Estate that is the subject of Mortgage
Indebtedness permitted hereunder;
(g) Liens of carriers, warehousemen, mechanics and materialmen, and
other like liens on properties, in existence less than
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120 days from the date of creation thereof in respect of obligations not
overdue;
(h) Liens securing the Permitted UK Working Capital Facility;
provided that (i) such Permitted UK Working Capital Facility does not
exceed the limitations of ss.10.1(j) and (ii) such Liens are permitted
under the definition of Permitted UK Working Capital Facility; and
(i) Liens existing on the Original Closing Date and listed and
described on Schedule 10.2 hereto.
10.3. Investments. Make or permit to exist or to remain outstanding any
Investment, except:
(a) Investments by the Borrower in Cash Equivalents;
(b) Investments by the Transaction Parties consisting of Accounts
Receivables;
(c) Investments consisting of loans and advances by the Transaction
Parties to employees of the Transaction Parties in the ordinary course of
business for travel, entertainment, relocation and other similar business
related expenses in the aggregate amount outstanding at any time not to
exceed $250,000;
(d) Investments constituting Permitted Acquisitions;
(e) Investments consisting of the Guarantee;
(f) Investments existing on the Original Closing Date and listed on
Schedule 10.3 hereto;
(g) Investments by the Borrower or any Guarantor in a Guarantor
which is a Domestic Subsidiary or the Borrower in the form of intercompany
loans made in cash, provided, however, that if any Enforcement Period is
continuing, then no such Investments shall be permitted under this
paragraph (g) in violation of the restrictions set forth in the
Enforcement Notice commencing such Enforcement Period; and
(h) Investments by the Borrower in the UK Borrower or any
Subsidiaries of the UK Borrower which are (i) made out of Net Cash
Proceeds of Permitted Capital Stock issued by the Borrower after the
Original Closing Date which are not required to be used to prepay the
Loans and which have not been used to finance any Permitted Acquisitions
of any Domestic Companies or for any other purpose, or (ii) made from
other sources, in an aggregate principal amount not greater than the
lesser of (x) $10,000,000 and (y) 20% of the aggregate cash purchase price
paid by the UK Borrower and its Subsidiaries for Permitted Acquisitions of
UK Companies; provided that no Investment pursuant to this clause (ii)
shall be permitted unless the Borrower shall have Liquidity of at least
$10,000,000 after giving effect to such Investment.
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10.4. Distributions and Restricted Payments.
(a) Make any Distributions, except that:
(i) Subsidiaries of the Borrower may make Distributions in the
form of cash dividends to the Borrower or any other Subsidiary of
the Borrower, provided, however, that if any Enforcement Period is
continuing, then no such Distributions shall be permitted under this
clause (i) in violation of the restrictions set forth in the
Enforcement Notice commencing such Enforcement Period; and
(ii) the Borrower may purchase, redeem, retire or otherwise
acquire shares of its Capital Stock, or options or warrants to
purchase its Capital Stock, held by officers, directors or employees
of the Borrower or any of its Subsidiaries pursuant to a
compensation plan or arrangement upon the death, disability or
termination of employment of any such officer, director or employee,
provided, that the aggregate amount of such payments made by the
Borrower pursuant to this clause (ii) shall not exceed $300,000 in
the aggregate in any fiscal year of the Borrower;
(iii) the Borrower may make Permitted Payments to Parent; and
(iv) the Borrower may pay accrued unpaid dividends on
Permitted Disqualified Capital Stock as required by the terms of
such Permitted Disqualified Capital Stock; provided, that no such
payment shall be permitted if any Default or Event of Default is
continuing or would result from such payment.
(b) Make any payment, prepayment, redemption, repurchase or other
acquisition of or in respect of, or cancel or discharge in any other
manner, any Subordinated Debt or make any payment or distribution in
respect of any interest or other amounts payable under any of the
Subordinated Debt Documents (or make any offer to do any of the
foregoing), except for:
(i) mandatory payments of principal of and accrued unpaid
interest on Subordinated Debt made as required by the terms of the
Subordinated Debt Documents, so long as such payments are not
prohibited by the subordination provisions set forth in the
Subordinated Debt Documents (it being understood that the redemption
of Senior Subordinated Notes pursuant to Article III of the Senior
Subordinated Indenture is prohibited by this Agreement); and
(ii) the issuance of the Exchange Notes for the Senior
Subordinated Notes originally issued under the Senior Subordinated
Indenture in accordance with the terms of the Senior Subordinated
Note Documents.
(c) Make any payment, prepayment, redemption, repurchase or other
acquisition of, or cancel or discharge in any manner, any Indebtedness of
any Transaction Party to any other Transaction Party, or make any payment
or distribution in respect of any interest or other sums due in respect of
any such Indebtedness (an "Intercompany Debt Payment"), at any time while
any
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Enforcement Period shall be continuing if the Enforcement Notice for such
Enforcement Period prohibits such Intercompany Debt Payment.
(d) Make any payment to Parent or any Affiliate of the Borrower or
Parent of any fees or commissions of any kind, including, without
limitation, any consulting fees, management fees, investment banking fees
or commissions, arrangement, placement or syndication fees, or brokers',
finders' or other transaction fees or commissions, except for:
(i) payments of management fees by the Borrower pursuant to
the Management Consulting Agreement, provided, however, that (A) at
the time of any such payment, the entire amount of such payment is
then required to be made in accordance with the terms of the
Management Consulting Agreement, (B) no Default or Event of Default
is continuing at the time of such payment or would result therefrom,
(C) the maximum amount of such management fees paid or payable by
the Borrower with respect to any fiscal year shall not exceed
$200,000 plus one and one-half percent (1 1/2%) of Consolidated
EBITDA of the Borrower and its Subsidiaries for such fiscal year,
and (D) the Borrower shall pay such management fees quarterly in
arrears, in an amount for any quarter not in excess of one and
one-half percent (1 1/2%) of Consolidated EBITDA for the prior
fiscal quarter. In the event that the Borrower pays any such
management fees prior to the delivery by the Borrower of the
financial statements required pursuant to ss.9.3(a) and/or (b) and
the Borrower or the Agent (in the case of any over-payment)
determines that an over-payment or under-payment of such management
fees has occurred as a result of the Borrower's final determination
of Consolidated EBITDA, such management fees shall be adjusted
accordingly, with appropriate (x) refunds of such management fees
for the prior fiscal quarter being made to the Borrower, or (y)
additional payments of such management fees for the prior fiscal
quarter being made by the Borrower, each as the case may be.
(ii) payments by the Borrower to Dunhill Bank Caribbean, Ltd.
and/or Hayes Capital Corporation on the closing date of any
Permitted Acquisition of advisory fees in respect of such Permitted
Acquisition, provided, that the aggregate amount of such advisory
fees payable under this subparagraph (ii) for any Permitted
Acquisition shall not exceed one percent (1%) of the purchase price
paid by the Borrower (or one of its Subsidiaries) at closing for the
businesses acquired by the Borrower (or one of its Subsidiaries) in
such Permitted Acquisition;
(iii) payments by the Borrower to Dunhill Bank Caribbean, Ltd.
and/or Hayes Capital Corporation of a transaction fee on the closing
date of the issuance by the Borrower after the Original Closing Date
of (A) Indebtedness permitted hereby or consented to by the Required
Lenders, or (B) Equity Interests permitted hereby or consented to by
the Required Lenders, in each case obtained solely through the
efforts and services of Dunhill Bank Caribbean, Ltd. and/or Hayes
Capital Corporation and not through the efforts of any other
intermediary who has or would receive a fee in connection with such
issuance; provided however, that any such transaction fee payable in
connection with any issuance of (x) Indebtedness shall not exceed
one percent (1%) of Net
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Cash Proceeds (computed without regard to payment of such fee) of
the Indebtedness issued or (y) Equity Interests shall not exceed
three percent (3%) of the Net Cash Proceeds (computed without regard
to payment of such fee) of the Equity Interests issued; and
(iv) payments by the Borrower of fees in respect of the
transactions contemplated to occur on or prior to the Original
Closing Date pursuant to the Acquisition Documents or the Loan
Documents, provided, that such fees shall have been disclosed to and
approved by the Agent prior to the Original Closing Date.
10.5. Mergers, Consolidations and Acquisitions. Become a party to any
merger or consolidation, or agree to or effect any asset acquisition or stock
acquisition (other than the acquisition of assets in the ordinary course of
business consistent with past practices) except for (a) the merger or
consolidation of one (1) or more of the Domestic Subsidiaries of the Borrower
with and into the Borrower (with the Borrower being the surviving entity), (b)
the merger or consolidation of two (2) or more Domestic Subsidiaries of the
Borrower, provided that if any of such Subsidiaries is also a Guarantor, such
Guarantor is the surviving entity of such merger or consolidation, (c) a
Permitted Acquisition, or (d) the Lamsco Acquisition, as contemplated by the
Lamsco Acquisition Documents.
10.6. Disposition of Assets. Become a party to or agree to or effect any
disposition of assets, other than (i) the sale of inventory and the disposition
of obsolete and no longer useful assets, in each case in the ordinary course of
business, consistent with past practices and (ii) the sale of other assets so
long as the aggregate amount of Net Cash Proceeds from such sales pursuant to
this clause (ii) in any one year do not exceed $100,000. To the extent that the
Required Lenders waive the provisions of this ss.10.6 with respect to the sale
of any Collateral (to the extent the Required Lenders are permitted to waive
such provisions in accordance with ss.17.11), or any Collateral is sold as
permitted by this ss.10.6, such Collateral shall be sold free and clear of the
Liens created by the Security Documents, and the Agent shall be authorized to
take any actions deemed appropriate in order to effect the foregoing.
10.7. Issuance of Capital Stock. Issue any Capital Stock or any other
Equity Interests other than:
(a) the issuance by any Transaction Party (other than the Borrower)
of its own Permitted Capital Stock to its direct parent;
(b) the issuance and sale by the Borrower of its Permitted
Disqualified Capital Stock; provided that such issuance and sale would not
cause the Borrower to exceed the Dollar limitation of ss.10.1(d) or
otherwise cause or result in an Event of Default;
(c) the issuance and sale by the Borrower of Permitted Capital Stock
of the Borrower and Equity Interests constituting rights to purchase
Permitted Capital Stock of the Borrower, provided, that no Default or
Event of Default shall be continuing as of the date of such issuance or
sale or would result from such issuance or sale or the application of the
proceeds of such issuance or sale.
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Any Equity Interests issued as permitted by this ss.10.7, if owned by the
Borrower or any of its Subsidiaries, shall be immediately pledged as Collateral
and delivered pursuant to the Stock Pledge Agreement.
10.8. Sale and Leaseback. Enter into any arrangement, directly or
indirectly, whereby the Borrower or any of its Subsidiaries shall sell or
transfer any Property owned by it in order then or thereafter to lease such
Property or lease other Property for substantially the same purpose as the
property being sold or transferred.
10.9. Compliance with Environmental Laws. (a) Use any of the Real Estate
or any portion thereof for the handling, processing, storage or disposal of
Hazardous Substances in violation of Environmental Laws, (b) cause or permit to
be located on any of the Real Estate any underground tank or other underground
storage receptacle for Hazardous Substances in violation of Environmental Laws,
(c) generate any Hazardous Substances on any of the Real Estate in violation of
Environmental Laws, (d) conduct any activity at any Real Estate or use any Real
Estate in any manner so as to cause a release (i.e. releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, disposing or dumping) or threatened release of Hazardous Substances
on, upon or into the Real Estate or (e) otherwise conduct any activity at any
Real Estate or use any Real Estate in any manner that would violate any
Environmental Law or bring such Real Estate in violation of any Environmental
Law.
10.10. Employee Benefit Plans.
(a) Engage in any "prohibited transaction" within the meaning of
ss.406 of ERISA or ss.4975 of the Code, which could result in a material
liability for the Borrower or any of its Subsidiaries.
(b) Permit any Guaranteed Pension Plan to incur an "accumulated
funding deficiency", as such term is defined in ss.302 of ERISA, whether
or not such deficiency is or may be waived.
(c) Fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which, could
result in the imposition of a Lien on the assets of the Borrower or any of
its Subsidiaries pursuant to ss.302(f) or ss.4068 of ERISA.
(d) Permit or take any action which would result in the aggregate
benefit liabilities (with the meaning of ss.4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of the aggregate assets of
such Plans, disregarding for this purpose the benefit liabilities and
assets of any such Plan with assets in excess of benefit liabilities.
(e) Amend any Guaranteed Pension Plan in circumstances requiring the
posting of security pursuant to ss.307 of ERISA or ss.401(a)(29) of the
Code.
(f) Take any action referred to in paragraphs (a) through (c) above
that would violate any provisions of any applicable foreign pension and
retirement benefits legislation.
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10.11. Transactions with Affiliates. Enter into, or cause, suffer or
permit to exist any transaction or agreement with any Affiliate, or make any
payment to any Affiliate, except:
(a) transactions contemplated to be effected on or prior to the
Original Closing Date under the Equity Documents;
(b) the Equity Documents, provided that this paragraph (b) shall not
be construed to permit any payments or distributions under or pursuant to
the Equity Documents;
(c) the payment of management fees, advisory fees and other fees
permitted under ss.10.4(d);
(d) Distributions permitted under ss.10.4(a);
(e) transactions, agreements and payments among US Transaction
Parties not prohibited by any of the other terms of this Agreement or the
other Loan Documents;
(f) Permitted Payments to Parent;
(g) employment agreements entered into in the ordinary course of
business by the Transaction Parties and loans and advances to employees of
the Transaction Parties permitted by ss.10.3; and
(h) any transaction or agreement (and payments made pursuant
thereto) (other than as described in the following paragraphs of this
ss.10.9) having terms not less favorable to the Transaction Parties than
would be the case if such transaction or agreement had been entered into
with a Person that is not an Affiliate, provided that (i) the aggregate
potential value payable or receivable by the Transaction Parties in
connection with all such transactions during any fiscal year of the
Borrower shall not exceed $50,000; and (ii) the terms of any such
transaction or agreement shall have been disclosed to the Agent.
10.12. Restrictive or Inconsistent Agreements. Permit to exist any
Contractual Obligation:
(a) which directly or indirectly prohibits or restrains, or has the
effect of prohibiting or restraining, or otherwise imposes any materially
adverse or burdensome condition upon, the declaration or payment of
Distributions, the incurrence of Indebtedness, the payment of any
Indebtedness owed to the Borrower or a Subsidiary of the Borrower, the
granting of Liens, the making of loans or advances to the Borrower or any
of its Subsidiaries or the amendment or modification of any of the Loan
Documents;
(b) containing any provision that would be violated or breached by
any Loan or by the performance by any Transaction Party of any of its
obligations hereunder or under any of the other Loan Documents; or
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(c) which prohibits the Borrower or any Subsidiary of the Borrower
from transferring any of its Properties to the Borrower or any Subsidiary
of the Borrower; provided, that the foregoing covenant shall not prohibit
(i) encumbrances or restrictions (A) under the Subordinated Debt
Documents, as amended in compliance with this Agreement, or (B) under the
Loan Documents, (ii) restrictions under Instruments governing Purchase
Money Indebtedness on transfer of Property financed with proceeds of such
Indebtedness.
10.13. Amendments or Termination of Documents, etc.
(a) Permit any amendment, supplement or other modification to any
Ancillary Document, any Governing Document, any Tax Sharing Agreement, or
any Debt Agreements, if such amendment, supplement or modification would
adversely affect the Lenders or have a Material Adverse Effect;
(b) Cause or permit any waiver, release, discharge or compromise of
any material obligation of any party other than the Transaction Parties
under any Ancillary Documents
10.14. Bank Accounts. (a) Establish any bank accounts other than those
listed on Schedule 8.18, unless such new account is subject to an Agency Account
Agreement executed and delivered to the Agent (whereupon Schedule 8.18 shall be
amended as appropriate to reflect such new account), (b) violate directly or
indirectly any Agency Account Agreement or other bank agency or lock box
agreement in favor of the Agent for the benefit of the Banks and the Agent with
respect to such account, or (c) deposit into any of the payroll accounts listed
on Schedule 8.18 any amounts in excess of amounts necessary to pay current
payroll obligations from such accounts.
10.15. Fiscal Year. Permit the fiscal year of the Borrower and each of its
Subsidiaries to end on a day other than December 31.
10.16. Line of Business. Permit the Borrower to engage in any business or
activity other than the ownership of the Capital Stock of its wholly-owned
Subsidiaries and other activities incidental thereto.
11. FINANCIAL COVENANTS.
The Borrower covenants and agrees with the Agent, the Issuing Bank and
each Lender that until all Commitments have terminated and the principal of and
interest on each Loan, all Fees, and all other expenses or amounts payable under
any Loan Document (other than wholly contingent indemnification Obligations)
shall have been paid in full and all Letters of Credit have been cancelled or
have expired and all amounts drawn thereunder have been reimbursed, unless the
Required Lenders shall otherwise consent in writing, the Borrower will not
permit:
11.1. Maximum Leverage Ratio. The Leverage Ratio as of the end of any
Reference Period ending on any date or during any period set forth in the table
below to be greater than the ratio set forth below opposite such period:
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Period Ratio
------ -----
Original Closing Date through September 30, 1999 4.50 to 1
October 1, 1999 through September 30, 2000 4.25 to 1
October 1, 2000 through September 30, 2001 4.00 to 1
October 1, 2001 through September 30, 2002 3.75 to 1
October 1, 2002 through September 30, 2003 3.50 to 1
October 1, 2003 through February 1, 2005 3.25 to 1
11.2. Minimum Consolidated EBITDA. Consolidated EBITDA of the Borrower and
its Subsidiaries for any Reference Period ending on any date or during any
period set forth in the table below to be less than the amount set forth below
opposite such date or period:
Minimum
Consolidated
Period EBITDA
------ ------
Original Closing Date through December 31, 1999 $43,500,000
January 1, 2000 through December 31, 2000 $46,000,000
January 1, 2001 through December 31, 2001 $48,500,000
January 1, 2002 through December 31, 2002 $50,500,000
January 1, 2003 through December 31, 2003 $53,000,000
January 1, 2004 through December 31, 2004 $55,000,000
January 1, 2005 through February 1, 2005 $57,500,000
11.3. Minimum Interest Coverage Ratio. The ratio of (a) Consolidated
EBITDA of the Borrower and its Subsidiaries for any Reference Period ending on
any date or during any period set forth in the table below to (b) Consolidated
Total Interest Expense of the Borrower and its Subsidiaries for such Reference
Period, to be less than the ratio set forth below opposite such period:
Minimum Interest
Period Coverage Ratio
------ --------------
March 31, 1999 through December 31, 1999 2.25 to 1
January 1, 2000 through February 1, 2005 2.50 to 1
11.4. Minimum Debt Service Coverage Ratio. The ratio of (a) Consolidated
Operating Cash Flow of the Borrower and its Subsidiaries for any Reference
Period ending on or after March 31, 1999, to (b) Consolidated Debt Service of
the Borrower and its Subsidiaries for such Reference Period to be less than 1.15
to 1.
11.5. Maximum Capital Expenditures. The aggregate amount of Capital
Expenditures of the Borrower and its Subsidiaries (other than Capital
Expenditures made (a) with the proceeds of Indebtedness permitted by paragraphs
(c) of ss.10.1 or (b) as a result of the acquisition of Capital Assets in any
Permitted Acquisition) (i) to exceed $10,000,000 in the 1999 calendar year and
(ii) for any Reference Period ending on any date or during any period set
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forth in the table below to exceed the amount set forth in the table below
opposite such date or period:
Maximum
Capital
Period Expenditures
------ ------------
January 1, 2000 through December 31, 2000 $10,000,000
January 1, 2001 through December 31, 2001 $10,500,000
January 1, 2002 through December 31, 2003 $11,500,000
January 1, 2004 through December 31, 2004 $12,000,000
January 1, 2005 through February 1, 2005 $12,500,000
11.6. General Provisions Relating to Financial Terms and Covenants. In the
event the Borrower or any of its Subsidiaries makes any Permitted Acquisition,
the following adjustments shall be made:
(a) Consolidated EBITDA. In determining Consolidated EBITDA of the
Borrower and its Subsidiaries for any period, there shall be (i) included
in such Consolidated EBITDA all EBITDA attributable to any business
acquired by the Borrower or any of its Subsidiaries during such period as
if such business were acquired on the first day of such period and (ii)
excluded from such Consolidated EBITDA all EBITDA attributable to any
business disposed of by the Borrower or any of its Subsidiaries during
such period as if such business were disposed of on the first day of such
period. For purposes hereof, the EBITDA attributable to any such acquired
or disposed of business prior to the date of acquisition or disposition
thereof shall be determined in a manner consistent with the method for
determining Consolidated EBITDA, but on a non-consolidated basis (subject
to any adjustments made pursuant to paragraph (c) below. Notwithstanding
the foregoing, this paragraph (a) shall not cause any increase in
Consolidated EBITDA of the Borrower and its Subsidiaries on account of the
Lamsco Acquisition for the fiscal quarters ended March 31, 1998, June 30,
1998 and September 30, 1998. The effect of the Lamsco Acquisition and the
Modern Acquisition on Consolidated EBITDA of the Borrower and its
Subsidiaries for such three fiscal quarters is fully reflected and
accounted for in ss.11.7(a).
(b) Consolidated Total Interest Expense. In determining Consolidated
Total Interest Expense for any period, there shall be (i) included all
Consolidated Total Interest Expense attributable to Indebtedness incurred
or assumed by the Borrower or any of its Subsidiaries during such period
in connection with any Permitted Acquisition as if such Indebtedness were
incurred or assumed on the first day of such period and (ii) excluded all
Consolidated Total Interest Expense attributable to that portion of the
principal amount of the Loans prepaid during such period with proceeds
from any disposition of a business as if such portion of the principal
amount of the Loans were prepaid on the first day of such period.
(c) EBITDA Adjustments. For the purpose of this ss.11.6, EBITDA
attributable to any business acquired by the Borrower or any of
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its Subsidiaries during any period may be adjusted to more accurately
reflect the financial condition and results of operations of the acquired
business after giving effect to the Acquisition as mutually determined and
agreed to by the Borrower and the Agent. The Borrower and the Agent shall
each use good faith efforts to mutually determine and agree to any such
adjustments. It is understood and agreed, however, that the Agent shall
have no liability for failing to agree to any such adjustments. In the
case of an Acquisition by the Borrower or any of its Subsidiaries, such
adjustments may reflect any cost savings (but not revenue enhancements)
that would have been achieved if such business had been owned by the
Borrower or one of its Subsidiaries for the entire relevant period,
including adjustments for excess owner's compensation, excess rent paid to
related parties, directors' fees paid to related parties and workmen's
compensation and other insurance expense in excess of that which would
have been incurred under policies of the Borrower and its Subsidiaries
existing at the time of such Acquisition.
(d) Covenant Adjustments.
(i) Upon completion of any Permitted Acquisition, the minimum
Consolidated EBITDA of the Borrower and its Subsidiaries required by
ss.11.2 shall be increased by the Agent, in consultation with the
Borrower, (i) for any Reference Period ended prior to the date of
such Acquisition, by the amount of EBITDA of the acquired business
for such Reference Period added to Consolidated EBITDA of the
Borrower and its Subsidiaries pursuant to ss.11.6(a) and (c), and
(ii) for all periods thereafter, by eighty percent (80%) of the
amount of EBITDA of the acquired business, as reflected in the
projections and pro-forma financial statements provided by the
Borrower to the Agent (and approved by the Agent) and on the basis
of which such Acquisition has satisfied the requirements for a
Permitted Acquisition.
(ii) Upon completion of any Permitted Acquisition, the maximum
Capital Expenditures covenant set forth in ss.11.5 will be adjusted
to reflect the acquired businesses, as determined by the Agent,
acting in its reasonable judgment in consultation with the Borrower.
11.7. Computations of Financial Covenants During First Year of Credit
Facilities.
(a) Consolidated EBITDA Calculation. In determining Consolidated
EBITDA of the Borrower and its Subsidiaries for any Reference Period which
includes any fiscal quarter ending March 31, 1998, June 30, 1998 or
September 30, 1998, the Consolidated EBITDA of the Borrower and its
Subsidiaries for such fiscal quarter shall be deemed for all purposes of
this Agreement to be as follows:
Fiscal Quarter Ended Consolidated EBITDA
-------------------- -------------------
March 31, 1998 $12,000,000
June 30, 1998 $12,000,000
September 30, 1998 $12,000,000
(b) Consolidated Operating Cash Flow Calculation. In determining
Consolidated Operating Cash Flow of the Borrower and its Subsidiaries for any
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Reference Period which includes any fiscal quarter ending June 30, 1998 or
September 30, 1998, the Consolidated Operating Cash Flow of the Borrower and its
Subsidiaries for such fiscal quarter shall be deemed for all purposes of this
Agreement to be as follows:
Consolidated
Fiscal Quarter Ended Operating Cash Flow
-------------------- -------------------
June 30, 1998 $8,000,000
September 30, 1998 $8,000,000
(c) Consolidated Total Interest Expense; Consolidated Debt Service.
In determining Consolidated Total Interest Expense and Consolidated Debt
Service of the Borrower and its Subsidiaries for any Reference Period
ending prior to December 31, 1999, Consolidated Total Interest Expense and
Consolidated Debt Service shall be deemed to be (i) for the Reference
Period ending March 31, 1999, Consolidated Total Interest Expense and
Consolidated Debt Service for the fiscal quarter ending on such date,
multiplied by 4, (ii) for the Reference Period ending June 30, 1999
Consolidated Total Interest Expense and Consolidated Debt Service for the
fiscal quarter ending on such date, multiplied by 2, and (iii) for the
Reference Period ending September 30, 1999, Consolidated Total Interest
Expense and Consolidated Debt Service for the fiscal quarter ending on
such date, multiplied by 4/3.
12. CLOSING CONDITIONS.
The obligations of the Lenders to make the initial Loans and of the
Issuing Bank to issue any initial Letters of Credit shall be subject to the
satisfaction of the following conditions precedent on or prior to the Original
Closing Date (unless waived in writing by the Agent and each of the Lenders on
or prior to the Original Closing Date).
12.1. Loan Documents, etc..
12.1.1. Loan Documents. Each of the Loan Documents (other than the
Rate Protection Agreements) shall have been duly executed and delivered by
the respective parties thereto, shall be in full force and effect and
shall be in form and substance satisfactory to each of the Lenders. The
Agent shall have received fully executed original counterparts or
originals of each such document.
12.1.2. Senior Subordinated Note Documents. The Agent shall have
received fully executed copies of each Senior Subordinated Note Document,
each of which shall be in form and substance satisfactory to the Agent.
12.1.3. Acquisition Documents. The Agent shall have received fully
executed copies of each of the Acquisition Documents, each of which shall
be in form and substance satisfactory to the Agent.
12.1.4. Equity Documents. The Agent shall have received fully
executed copies of each Equity Document, each of which shall be in form
and substance satisfactory to the Agent.
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12.1.5. Management Consulting Agreement. The Agent shall have
received a fully executed copy of the Management Consulting Agreement,
which shall be in form and substance satisfactory to the Agent.
12.1.6. Permitted Disqualified Capital Stock Documents. The Agent
shall have received fully executed copies of each Permitted Disqualified
Capital Stock Document (if any), each of which shall be in form and
substance satisfactory to the Agent.
12.2. Completion of Acquisition.
(a) The Lamsco Acquisition, including all of the terms and
conditions thereof, shall have been duly approved by the board of
directors and (if required by Applicable Law) the shareholders of the
parties thereto, and all Lamsco Acquisition Documents shall have been duly
executed and delivered by the parties thereto and shall be in full force
and effect. The representations and warranties set forth in the Lamsco
Acquisition Documents shall be true and correct in all material respects
as if made on and as of the Original Closing Date. Each of the conditions
precedent to the Borrower's and Lamsco's selling shareholders' obligations
to consummate the Lamsco Acquisition as set forth in the Lamsco
Acquisition Documents shall have been satisfied or waived with the consent
of the Agent. The Lamsco Acquisition shall have been consummated in
accordance with the terms of the Lamsco Acquisition Documents and all
Applicable Laws. The purchase price for the Lamsco Acquisition, together
with all fees and expenses payable by the Borrower of any of its
Subsidiaries in connection therewith and the financing thereof, shall not
exceed $80,000,000.
(b) On the Original Closing Date, after giving effect to the Lamsco
Acquisition, the ownership and capital structure (including the terms of
any Equity Interests issued or to be issued by the Borrower or any of its
Subsidiaries) and management of the Borrower and its Subsidiaries shall be
satisfactory to the Agent.
12.3. Certified Copies of Charter Documents. The Agent shall have received
from each of the Transaction Parties a copy, certified by a duly authorized
officer of such Person to be true and complete on the Original Closing Date, of
each of (i) its charter or other incorporation documents as in effect on such
date of certification, and (ii) its by-laws as in effect on such date.
12.4. Corporate Action. All corporate action necessary for the valid
execution, delivery and performance by the Borrower and each of its Subsidiaries
of the Existing Credit Agreement and the other Loan Documents to which it is or
is to become a party shall have been duly and effectively taken, and evidence
thereof, including good standing certificates, satisfactory to the Agent shall
have been provided to the Agent.
12.5. Incumbency Certificate. The Agent shall have received from each
Transaction Party an incumbency certificate, dated as of the Original Closing
Date, signed by a duly authorized officer of such Transaction Party, and giving
the name and bearing a specimen signature of each individual who shall be
authorized: (a) to sign, in the name and on behalf of such Transaction Party,
each of the Loan Documents to which such Transaction Party is or is to become a
party; (b) in the case of the Borrowers, to make Loan Requests and
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Conversion Requests and to apply for Letters of Credit; and (c) to give notices
and to take other action on its behalf under the Loan Documents.
12.6. Plans; Shareholders' Agreements; Management Agreements; Employee
Agreements; Collective Bargaining Agreements; Debt Agreements; Affiliate
Contracts; Tax Sharing Agreements and Other Material Contracts. The Agent shall
have received true and correct copies, certified as true and complete by an
appropriate officer of the Borrower of:
(i) all Plans, and (for each Plan that is required to file an annual
report on Internal Revenue Service Form 5500-series, a copy of the most
recent such report including, to the extent required, the related
financial and actuarial statements and opinions and other supporting
statements, certifications, schedules and information), and for each Plan
that is a "single-employer plan" (as defined in Section 4001(a)(15) of
ERISA) the most recently completed actuarial valuation prepared therefor
and any other "employee benefit plan", as defined in Section 3(3) of
ERISA, and any other material agreements, plans or arrangements, with or
for the benefit of current or former employees of the Borrower or any of
its Subsidiaries or any ERISA Affiliate (provided that the foregoing shall
apply in the case of any Multi-employer Plan only to the extent that any
document described therein is in possession of the Borrower or any
Subsidiary of the Borrower or any ERISA Affiliate or reasonably available
thereto from the sponsor or trustee of any such plan);
(ii) all agreements entered into by the Borrower or any of its
Subsidiaries governing the terms and relative stock rights of its Capital
Stock and any agreements entered into by shareholders relating to any such
entity with respect to their Capital Stock (collectively, the "Shareholder
Agreements");
(iii) all agreements with members of, or with respect to the,
management of the Borrower or any of its Subsidiaries other than
Employment Agreements (collectively, the "Management Agreements");
(iv) any employment agreements entered into by the Borrower or any
of its Subsidiaries (collectively, the "Employment Agreements");
(v) all collective bargaining agreements applying or relating to any
employees of the Borrower or any of its Subsidiaries (collectively, the
"Collective Bargaining Agreements");
(vi) all tax sharing, tax allocation and other similar agreements
entered into by the Borrower and/or any of its Subsidiaries (collectively,
the "Tax Sharing Agreements");
(vii) all agreements evidencing or relating to Indebtedness for
borrowed money of the Borrower or any of its Subsidiaries, whether or not
such agreement is to remain outstanding after giving effect to the
incurrence of the Loans on the Original Closing Date (collectively, the
"Debt Agreements");
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(viii) all contracts, agreements or understandings entered into
between (x) the Borrower or any of its Subsidiaries on the one hand, and
(y) any Affiliates of the Borrower on the other hand (collectively, the
"Affiliate Contracts");
(ix) all material contracts and licenses of the Borrower or any of
its Subsidiaries that are to remain in effect after the Original Closing
Date (collectively, the "Material Contracts");
all of which Plans, Shareholders' Agreements, Management Agreements, Employment
Agreements, Collective Bargaining Agreements, Debt Agreements, Tax Sharing
Agreements, Affiliate Contracts and Material Contracts shall be in form and
substance satisfactory to the Agent and shall be in full force and effect on the
Original Closing Date.
12.7. Validity of Liens. The Security Documents shall be effective to
create in favor of the Agent a legal, valid and enforceable first priority
(except for Permitted Liens entitled to priority under applicable law) security
interest in and Lien upon the Collateral. All filings, recordings, deliveries of
Instruments and other actions necessary or desirable in the opinion of the Agent
to create and perfect such security interests shall have been duly effected. The
Agent shall have received evidence thereof in form and substance satisfactory to
the Agent.
12.8. Perfection Certificates and UCC Search Results. The Agent shall have
received from each Transaction Party a completed and fully executed Perfection
Certificate and the results of UCC searches and tax lien searches with respect
to the Collateral, indicating no Liens other than Permitted Liens and otherwise
in form and substance satisfactory to the Agent.
12.9. Intentionally Omitted.
12.10. Certificates of Insurance. The Agent shall have received (i) a
certificate(s) of insurance from an independent insurance broker dated as of the
Original Closing Date, identifying insurers, types of insurance, insurance
limits, and policy terms, and otherwise describing the insurance obtained in
accordance with the provisions of the Security Agreement and naming the Agent as
additional insured and loss payee, and (ii) certified copies of all policies
evidencing such insurance (or certificates therefor signed by the insurer or an
agent authorized to bind the insurer) and the Agent shall be satisfied with the
adequacy of all such insurance.
12.11. Borrowing Base Report. The Agent shall have received from the
Borrower the initial Borrowing Base Report dated as of the Original Closing
Date.
12.12. Accounts Receivables Aging Report. The Agent shall have received
from the Borrower the most recent Accounts Receivables aging report of the
Transaction Parties as of a date which shall be no more than fifteen (15) days
prior to the Original Closing Date and shall have notified the Agent in writing
on the Original Closing Date of any material deviation from the Accounts
Receivables values reflected in such Accounts Receivables aging
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report and shall have provided the Agent with such supplementary documentation
as the Agent may reasonably request.
12.13. Landlord Waivers. The Agent shall have received from each of the
landlords for the leased facilities of the Transaction Parties, landlord waivers
with respect to the statutory Liens over the Collateral located at such
facilities.
12.14. Solvency Certificate. The Agent shall have received an officer's
certificate of the Borrower dated as of the Original Closing Date as to the
solvency of the Transaction Parties following the consummation of the
transactions contemplated herein to occur on or prior to the Original Closing
Date, and in form and substance satisfactory to the Lenders.
12.15. Opinion of Counsel. The Agent shall have received a favorable legal
opinion addressed to the Lenders and the Agent, in form and substance
satisfactory to the Lenders and the Agent, from Morgan Lewis & Bockius, counsel
to the Borrower and each of its Subsidiaries, and from such local counsel (if
any) as the Agent deems appropriate.
12.16. Payment of Fees.
(a) The Borrowers shall have paid to the Agent all accrued
commitment fees and letter of credit fees and any other fees or amounts
payable as of the Original Closing Date under the Original Credit
Facility.
(b) The Borrowers shall have paid to the Agent the Fees required to
be paid pursuant to ss.ss.5.1(a) and (b). The aggregate amount of all
fees, costs and expenses paid or payable by the Borrower and its
Subsidiaries in connection with the transactions contemplated by the
Lamsco Documents and the Loan Documents shall not have exceeded
$80,000,000.
(c) The Borrowers shall have paid or reimbursed the Agent for all
fees and disbursements of the Agent's Special Counsel which shall have
been incurred in connection with the preparation, negotiation, execution
and delivery of (i) the Loan Documents and the implementation of the
transactions contemplated thereby, or which otherwise are required to be
paid under the Existing Credit Agreement, and (ii) the Original Credit
Facility or which are otherwise required to be paid under the Original
Credit Facility.
12.17. Updated Collateral Examinations. The Agent shall have reviewed and
been satisfied with the update of the commercial finance examinations of the
Borrower and its Subsidiaries performed by the Agent's field examiners,
including (a) satisfactory review of the Borrower's and each of its
Subsidiaries' books and records in connection with the calculation of the
Borrowing Base and the Agent's satisfaction with the components and the
Borrower's method of calculating the Borrowing Base, (b) satisfactory review of
the cash management system of the Transaction Parties, (c) satisfactory review
of receivables, inventory and backlog of the Borrower and its Subsidiaries, and
(d) satisfactory appraisals (to the extent available) and environmental reports
on any owned Real Estate.
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12.18. Satisfactory Due Diligence Review. The Agent shall have completed
and be satisfied with the results of all aspects of its due diligence including,
without limitation, (a) satisfactory discussions by the Agent with officers or
representatives of Boeing regarding Boeing's existing relationship with Lamsco,
(b) current fixed assets appraisals by firms selected by the Agent, and (c)
satisfactory examinations performed by an external accounting/consulting firm
including a financial review of the six (6) months ended June 30, 1998 for the
Transaction Parties and Lamsco.
12.19. Litigation. As of the Original Closing Date, there shall be no
actions, suits, proceedings or investigations of any kind pending or, to the
best of the Borrower's knowledge, threatened against the Borrower or any of its
Subsidiaries before any Governmental Authority, that (a) if adversely
determined, could, either in any case or in the aggregate, (i) have a Materially
Adverse Effect or (ii) result in any substantial liability not adequately
covered by insurance, or (b) question the validity or enforceability of any of
the Loan Documents, or any action taken or to be taken pursuant hereto or
thereto.
12.20. Material Adverse Effect. Since the Balance Sheet Date there shall
have occurred no Materially Adverse Effect.
12.21. Borrowing Availability. The Agent shall have received evidence
satisfactory to the Agent that, after giving effect to all transactions to occur
on the Original Closing Date, the Borrower shall have aggregate borrowing
availability (taking account of applicable restrictions under the terms of the
Subordinated Note Documents) under ss.2.1(c) of the Existing Credit Agreement on
the Original Closing Date of not less than $20,000,000. After giving effect to
all transactions to occur on the Original Closing Date, no Revolving Credit
Loans shall be outstanding.
12.22. Financial Statements and Projections. The Agent shall have received
copies of the financial statements, Pro Forma Balance Sheet and projections
described in ss.8.4.
12.23. Refinancings. On the Original Closing Date and after giving effect
to the Loans incurred on the Original Closing Date, the Lamsco Acquisition and
the other transactions contemplated hereby, neither the Borrower nor any of its
Subsidiaries shall have any Indebtedness outstanding except for the Loans and
the Existing Indebtedness, which Existing Indebtedness shall not exceed
$117,000,000. All of the Existing Indebtedness shall remain outstanding after
the transactions contemplated hereby without any defaults or events of default
existing thereunder or arising as a result of the transactions contemplated
hereby. The Agent and the Required Lenders shall be satisfied with the amount of
and the terms and conditions of all Existing Indebtedness
12.24. Cash Management System. The Borrower shall have opened the
Concentration Account and the Agent shall have received Agency Account
Agreements, duly executed and delivered by the Borrower and its Domestic
Subsidiaries and each Agency Account Institution at which the Borrower and any
Domestic Subsidiary of the Borrower (including Lamsco) maintains depository
accounts as required under ss.9.12, and such Agency Account Agreements shall be
in form and substance satisfactory to the Agent.
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12.25. Disbursement Instructions. The Agent shall have received
disbursement instructions from the Borrower with respect to the proceeds of the
initial Revolving Credit Loans, the Term Loans, the initial portion of the
Acquisition Loans and any initial Letters of Credit.
12.26. Consolidated Total Funded Debt to Consolidated EBITDA. The Agent
shall have received evidence that, after giving effect to the Lamsco Acquisition
and the Loans to be made on the Original Closing Date, the ratio of Consolidated
Total Funded Debt of the Borrower and its Subsidiaries to Consolidated EBITDA of
the Borrower and its Subsidiaries shall not exceed 4.25 to 1.
12.27. Deposits with DLJ Capital Funding, Inc. The Borrower shall have, on
or prior to the Original Closing Date (a) converted all cash equivalents
maintained with DLJ Capital Funding, Inc. into cash, and (b) deposited all such
cash into an account maintained by the Borrower with BankBoston.
12.28. Sources and Uses Statement. The Agent shall have received a sources
and uses statement from the Borrower which reflects (a) the source of all funds
to be used by the Borrower and any Subsidiary of the Borrower to consummate all
the transactions contemplated by the Existing Credit Agreement, including the
Lamsco Acquisition, and (b) all uses of such funds, such statement to be in form
and substance satisfactory to the Lenders.
13. CONDITIONS TO ALL BORROWINGS.
The obligations of the Lenders to make any Loan, and of the Issuing Bank
to issue, extend or renew any Letter of Credit, in each case whether on or after
the Original Closing Date, shall also be subject to the satisfaction of the
following conditions precedent:
13.1. Representations True; No Default or Event of Default. Each of the
representations and warranties of the Transaction Parties contained in this
Agreement, the other Loan Documents or in any Instrument delivered pursuant to
or in connection with this Agreement shall be true in all material respects as
of the date as of which they were made and shall also be true in all material
respects at and as of the time of the making of such Loan, or the issuance,
extension or renewal of such Letter of Credit, with the same effect as if made
at and as of that time (except to the extent that such representations and
warranties relate expressly to an earlier date) and no Default or Event of
Default shall have occurred and be continuing.
13.2. No Legal Impediment. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Lender would make it illegal for such Lender to make such Loan, or to
participate in the issuance , extension or renewal of such Letter of Credit or
in the reasonable opinion of the Issuing Bank would make it illegal for the
Issuing Bank to issue, extend or renew such Letter of Credit.
13.3. Governmental Regulation. Each Lender shall have received such
statements in substance and form reasonably satisfactory to such Lender as such
Lender shall require for the purpose of compliance with any applicable
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regulations of the Comptroller of the Currency or the Board of Governors of the
Federal Reserve System.
13.4. Proceedings and Documents. All proceedings in connection with the
transactions contemplated by this Agreement, the other Loan Documents and all
other documents incident thereto shall be satisfactory in substance and in form
to the Agent and the Agent's Special Counsel, and the Agent shall have received
all information and such counterpart originals or certified or other copies of
such documents as the Agent may reasonably request.
13.5. Borrowing Base Report. The Agent shall have received the most recent
Borrowing Base Report required to be delivered to the Agent in accordance with
ss.9.3(f) and, if requested by the Agent, a Borrowing Base Report dated within
three (3) days of the Drawdown Date of such Loan or of the issuance, extension
or renewal of such Letter of Credit.
13.6. Borrowing Availability.
(a) After giving effect to all amounts requested, the sum of the
outstanding amount of all Revolving Credit Loans plus the Letter of Credit
Exposure plus Excess UK Working Capital Outstandings shall not exceed the
lesser of (a) the Total Revolving Credit Commitment and (b) the Borrowing
Base.
(b) During the Acquisition Loan Commitment Period, after giving
effect to all amounts requested, the outstanding amount of all Acquisition
Loans shall not exceed the Total Acquisition Loan Commitment.
(c) During the Acquisition Loan Commitment Period, after giving
effect to all amounts requested, the Dollar Equivalent of the outstanding
amount of all UK Acquisition Loans shall not exceed the Total UK
Acquisition Loan Commitment.
13.7. Senior Debt. The Borrower shall have demonstrated to the reasonable
satisfaction of the Agent that (a) all outstanding Obligations (after giving
effect to the requested Loans or Letters of Credit) constitute "Senior Debt" (or
corresponding alternative terms) under the Subordinated Debt Documents and
"Designated Senior Debt" under and for all purposes of the Senior Subordinated
Indenture, and (b) the incurrence of Indebtedness in respect of the requested
Loans or Letters of Credit shall be permitted by all Subordinated Debt
Documents. The foregoing demonstration shall include (if requested by the Agent)
certificates of the chief financial officer of the Borrower setting forth in
reasonable detail the basis therefor, and the calculations (if any) required to
evidence compliance with the applicable covenants set forth in the Subordinated
Debt Documents.
13.8. Permitted Acquisitions.
(a) Prior to the making of the initial UK Acquisition Loan, a UK
Subsidiary shall have been duly organized and such UK Subsidiary shall
have
(i) (A) executed and delivered to the Agent and the Lenders an
Accession Agreement substantially in the form attached hereto as
Exhibit K pursuant to the terms of which such UK Subsidiary becomes
a party to this Agreement as the UK Borrower, and becomes a party to
any other Loan Document as the Agent may reasonably request, and (B)
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agrees to perform and observe all of the obligations and covenants
of the UK Borrower and of a Transaction Party hereunder, and of the
appropriate party under any Loan Document to which it becomes a
party;
(ii) delivered to the Agent a copy, certified by a duly
authorized officer of such UK Subsidiary to be true and complete, of
each of (A) its Memorandum and Articles of Association, Certificate
of Incorporation and any Certificate of Incorporation on Name Change
as in effect on such date of certification, and (B) its by-laws as
in effect on such date;
(iii) delivered to the Agent a copy of all corporate action
necessary for the valid execution, delivery and performance by such
UK Subsidiary of this Agreement and the other Loan Documents to
which it is or is to become a party which corporate action shall
have been duly and effectively taken, and which shall be in form and
substance satisfactory to the Agent;
(iv) delivered to the Agent an incumbency certificate, signed
by a duly authorized officer of such UK Subsidiary, and giving the
name and bearing a specimen signature of each individual who shall
be authorized: (a) to sign, in the name and on behalf of such UK
Subsidiary, each of the Loan Documents to which such UK Subsidiary
is or is to become a party; (b) to make UK Loan Requests and
Conversion Requests; and (c) to give notices and to take other
action on its behalf under the Loan Documents;
(v) delivered to the Agent a favorable legal opinion addressed
to the Lenders and the Agent, in form and substance satisfactory to
the Lenders and the Agent, from local counsel to such UK Subsidiary.
(b) Prior to the making of each Acquisition Loan and each UK
Acquisition Loan, the proceeds of which are to be used to fund an
Acquisition, all conditions precedent for such Acquisition to be a
Permitted Acquisition set forth in the definition thereof shall have been
satisfied and a duly authorized officer of the Borrower shall have
delivered to the Agent an officer's certificate certifying that such
conditions have been met.
(c) Prior to the making of each Permitted Additional Acquisition
Loan, all conditions precedent for such Acquisition Loan or UK Acquisition
Loan to be a Permitted Additional Acquisition Loan set forth in the
definition thereof shall have been satisfied and a duly authorized officer
of the Borrower shall have delivered to the Agent an officer's certificate
certifying that such conditions have been met.
14. EVENTS OF DEFAULT; ACCELERATION; ETC.
14.1. Events of Default and Acceleration. If any of the following events
("Events of Default" or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice or lapse of time, "Defaults") shall occur:
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(a) the Borrower shall fail to pay any principal of the Loans or any
Reimbursement Obligation when the same shall become due and payable,
whether at the stated date of maturity or any accelerated date of maturity
or at any other date fixed for payment;
(b) the Borrower or any of their Subsidiaries shall fail to pay any
interest on the Loans, the Fees, or other sums due hereunder or under any
of the other Loan Documents, when the same shall become due and payable,
whether at the stated date of maturity or any accelerated date of maturity
or at any other date fixed for payment, and such Default shall continue
for three (3) Business Days after the due date of such payments;
(c) the Transaction Parties shall fail to comply with any of the
covenants contained in ss.10 or ss.11;
(d) any Transaction Party shall fail to perform any term, covenant
or agreement contained herein or in any of the other Loan Documents (other
than those specified elsewhere in this ss.14.1) for thirty (30) days after
written notice of such failure has been given to the Borrower by the
Agent;
(e) any representation or warranty of any Transaction Party in any
Loan Document or in any other Instrument delivered pursuant to or in
connection with this Agreement shall prove to have been false in any
material respect upon the date when made or deemed to have been made or
repeated;
(f) the Borrower or any of its Subsidiaries shall (i) fail to pay
any principal or interest, regardless of amount, due in respect of any
Indebtedness in a principal amount in excess of $1,000,000, when and as
the same shall become due and payable, or (ii) fail to observe or perform
any other term, covenant, condition or agreement contained in any
Instrument evidencing or governing such Indebtedness if the effect of any
failure referred to in this clause (ii) is to cause, or to permit the
holder or holders of such Indebtedness or a trustee on its or their behalf
(with or without the giving of notice, the lapse of time or both) to
cause, such Indebtedness to become due prior to its stated maturity;
(g) any of the Transaction Parties shall make an assignment for the
benefit of creditors, or admit in writing its inability to pay or
generally fail to pay its debts as they mature or become due, or shall
petition or apply for the appointment of a trustee or other custodian,
liquidator or receiver of such Transaction Party or of any substantial
part of the assets of such Transaction Party or shall commence any case or
other proceeding relating to such Transaction Party under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution
or liquidation or similar law of any jurisdiction, now or hereafter in
effect, or any UK Insolvency Event shall occur, or any of the Transaction
Parties shall take any action to authorize or in furtherance of any of the
foregoing, or if any such petition or application shall be filed or any
such case or other proceeding shall be commenced against such Transaction
Party and such Transaction Party shall indicate its
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approval thereof, consent thereto or acquiescence therein or such petition
or application shall not have been dismissed within forty-five (45) days
following the filing thereof;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating any Transaction Party
bankrupt or insolvent, or approving a petition in any such case or other
proceeding, or a decree or order for relief is entered in respect of such
Transaction Party in an involuntary case under federal bankruptcy laws as
now or hereafter constituted;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than sixty (60) days, whether or not consecutive, any
judgment against the Borrower or any of its Subsidiaries that, together
with other such outstanding judgments against the Borrower or any of its
Subsidiaries exceeds in the aggregate $1,000,000;
(j) (i) any default or event of default shall occur under any
Subordinated Debt Document, (ii) any holder or holders of any Subordinated
Debt (or any representatives of any such holders) shall exercise, purport
to exercise, give any notice of its intention to exercise, or become
entitled by the terms of any Subordinated Debt Document to exercise (A)
any right to accelerate any Subordinated Debt, or (B) any right to require
any prepayment, repurchase or other acquisition of any Subordinated Debt,
or (iii) any Transaction Party shall make, offer to make or become
obligated to make or offer to make, any prepayment, repurchase or other
acquisition of any Subordinated Debt, including any optional prepayment,
repurchase or other acquisition of Subordinated Debt, or any prepayment,
repurchase or other acquisition of Subordinated Debt upon a change in
control, or upon a sale of assets;
(k) any of the Loan Documents shall be cancelled, terminated,
revoked or rescinded or the Agent's security interests, mortgages or liens
in the Collateral shall cease to be perfected, or shall cease to have the
priority contemplated by the Security Documents, in each case otherwise
than in accordance with the terms thereof or with the express prior
written agreement, consent or approval of the Agent, or any action at law,
suit or in equity or other legal proceeding to cancel, revoke or rescind
any of the Loan Documents shall be commenced by or on behalf of any of the
Transaction Parties party thereto or any of their respective stockholders,
or any court or any other governmental or regulatory authority or agency
of competent jurisdiction shall make a determination that, or issue a
judgment, order, decree or ruling to the effect that, any one or more of
the Loan Documents is illegal, invalid or unenforceable in accordance with
the terms thereof;
(l) the Borrower or any of its Subsidiaries shall be enjoined,
restrained or in any way prevented by the order of any Governmental
Authority from conducting any material part of its business and such order
shall continue in effect for more than ten (10) days;
(m) there shall occur any material damage to, or loss, theft or
destruction of, any Collateral, whether or not insured, or any strike,
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lockout, labor dispute, embargo, condemnation, act of God or public enemy
or other casualty, which in any such case causes, for more than fifteen
(15) consecutive days, the cessation or substantial curtailment of revenue
producing activities of the Borrower or any of its Subsidiaries if such
event or circumstance is not covered by business interruption insurance;
(n) the Borrower or any ERISA Affiliate incurs any liability to the
PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA in an
aggregate amount exceeding $1,000,000, or the Borrower or any ERISA
Affiliate is assessed withdrawal liability pursuant to Title IV of ERISA
by a Multiemployer Plan requiring aggregate annual payments exceeding
$1,000,000, or any of the following occurs with respect to a Guaranteed
Pension Plan: (i) an ERISA Reportable Event, or a failure to make a
required installment or other payment (within the meaning of ss.302(f)(1)
of ERISA), provided that the Agent determines in its reasonable discretion
that such event (A) could be expected to result in liability of the
Borrower or any of its Subsidiaries to the PBGC or such Guaranteed Pension
Plan in an aggregate amount exceeding $1,000,000 and (B) could constitute
grounds for the termination of such Guaranteed Pension Plan by the PBGC,
for the appointment by the appropriate United States District Court of a
trustee to administer such Guaranteed Pension Plan or for the imposition
of a lien in favor of such Guaranteed Pension Plan; or (ii) the
appointment by a United States District Court of a trustee to administer
such Guaranteed Pension Plan; or (iii) the institution by the PBGC of
proceedings to terminate such Guaranteed Pension Plan;
(o) any Change in Control shall occur;
(p) the Borrower shall at any time, directly or indirectly through
one or more Guarantors, legally or beneficially own less than one hundred
percent (100%) of the shares of the Capital Stock and other outstanding
Equity Interests of each of the Guarantors; or
(q) the Borrower and/or any Domestic Subsidiary or UK Subsidiary of
the Borrower shall have failed to satisfy all conditions necessary for an
Acquisition to constitute a Permitted Acquisition within ten (10) days
after the closing of such Acquisition;
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Required Lenders shall, by notice in writing to
the Borrower declare all amounts owing with respect to this Agreement, the Notes
and the other Loan Documents to be, and they shall thereupon forthwith become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived by the Borrower; provided
that in the event of any Event of Default specified in ss.ss.14.1(g) or 14.1(h)
(an "Insolvency Event of Default") all such amounts shall become immediately due
and payable automatically and without any requirement of notice from the Agent
or any Lender.
14.2. Termination of Commitments. If any Insolvency Event of Default shall
occur, the Total Commitment and all Commitments of each
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Lender shall terminate immediately. If any other Event of Default shall have
occurred and be continuing, the Agent may and, upon the request of the Required
Lenders, shall, by notice to the Borrower, terminate the Total Commitment and
all Commitments of each Lender, and upon such notice being given such Total
Commitment and all Commitments of each Lender shall terminate immediately. If
any such notice is given to the Borrower the Agent will forthwith furnish a copy
thereof to each of the Lenders. No termination of the credit hereunder shall
relieve the Borrower or any Transaction Party of any of its Obligations.
14.3. Remedies. No remedy herein conferred upon any Lender or the Agent or
the holder of any Note is intended to be exclusive of any other remedy and each
and every remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute or any other provision of law.
14.4. Distribution of UK Collateral Proceeds. In the event that, during
the continuance of any Event of Default, the Agent, any Issuer or any Lender, as
the case may be, receives any monies constituting proceeds of UK Collateral in
connection with the enforcement of any Security Documents, or otherwise with
respect to the realization upon any of the UK Collateral, such monies shall be
distributed, to the fullest extent permitted by Applicable Law, for application
as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent and the UK Fronting Lender for or in respect
of, all costs, expenses, disbursements and losses which shall have been
incurred or sustained by the Agent or the UK Fronting Lender in connection
with the collection of such monies or in connection with the exercise,
protection or enforcement of all or any of the rights, remedies, powers
and privileges of the Agent or the UK Fronting Lender under any of the
Loan Documents or in support of any provision of adequate indemnity to the
Agent or the UK Fronting Lender against any taxes or Liens which by law
shall have, or may have, priority over the rights of the Agent to such
monies, in each case under this ss.14.4(a), solely to the extent such
costs, expenses, disbursements and losses of the Agent or the UK Fronting
Lender arise in connection with the Agent's realization upon the UK
Collateral;
(b) Second, to all other UK Obligations in such order or preference
as the Required UK Acquisition Loan Lenders may determine; provided,
however, that UK Obligations owing to the UK Fronting Lender and the
Acquisition Loan Lenders with respect to each type of UK Obligation such
as interest, principal and fees, shall be made to the UK Fronting Lender
and the Acquisition Loan Lenders pro rata in accordance with
ss.2.4(b)(iii)(C); and provided, further, that the Agent may in its
discretion make proper allowance to take into account any UK Obligations
not then due and payable;
(c) Third, as may be required pursuant to Applicable Law; and
(d) Fourth, the excess, if any, shall be returned to the UK Borrower
or to such other Persons as are entitled thereto.
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14.5. Distribution of Other Collateral Proceeds. In the event that, during
the continuance of any Event of Default, the Agent or any Lender, as the case
may be, receives any monies constituting proceeds of Collateral (other than UK
Collateral) in connection with the enforcement of any the Security Documents, or
otherwise with respect to the realization upon any of the Collateral (other than
UK Collateral), such monies shall be distributed, to the fullest extent
permitted by Applicable Law, for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of, all costs, expenses,
disbursements and losses which shall have been incurred or sustained by
the Agent in connection with the collection of such monies by the Agent,
for the exercise, protection or enforcement by the Agent of all or any of
the rights, remedies, powers and privileges of the Agent under this
Agreement or any of the other Loan Documents or in respect of the
Collateral or in support of any provision of adequate indemnity to the
Agent against any taxes or liens which by law shall have, or may have,
priority over the rights of the Agent to such monies;
(b) Second, to all other Obligations (including the UK Obligations)
in such order or preference as the Required Lenders may determine;
provided, however, that distributions in respect of Obligations owing to
the Lenders with respect to each type of Obligation such as interest,
principal, fees and expenses, shall be made among the Lenders pro rata;
and provided, further, that the Agent may in its discretion make proper
allowance to take into account any Obligations not then due and payable;
(c) Third, upon payment and satisfaction in full or other provisions
for payment in full satisfactory to the Lenders and the Agent of all of
the Obligations, to the payment of any obligations required to be paid
pursuant to ss.9-504(1)(c) of the Uniform Commercial Code of the State of
New York; and
(d) Fourth, the excess, if any, shall be returned to the Borrower or
to such other Persons as are entitled thereto.
15. THE AGENT.
15.1. Authorization.
(a) The Agent is authorized to take such action on behalf of each of
the Lenders and to exercise all such powers as are hereunder and under any
of the other Loan Documents and any related documents delegated to the
Agent, together with such powers as are reasonably incident thereto,
provided that no duties or responsibilities not expressly assumed herein
or therein shall be implied or deemed to have been assumed by the Agent.
(b) The relationship between the Agent and each of the Lenders is
that of an independent contractor. The use of the term "Agent" is for
convenience only and is used to describe, as a form of convention, the
independent
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contractual relationship between the Agent and each of the Lenders.
Nothing contained in this Agreement nor the other Loan Documents shall be
construed to create an agency, trust or other fiduciary relationship
between the Agent and any of the Lenders.
(c) As an independent contractor empowered by the Lenders to
exercise certain rights and perform certain duties and responsibilities
hereunder and under the other Loan Documents, the Agent is nevertheless a
"representative" of the Lenders, as that term is defined in Article 1 of
the Uniform Commercial Code, for purposes of actions for the benefit of
the Lenders and the Agent with respect to all collateral security and
guarantees contemplated by the Loan Documents. Such actions include the
designation of the Agent as "secured party", "mortgagee" or the like on
all financing statements and other documents and instruments, whether
recorded or otherwise, relating to the attachment, perfection, priority or
enforcement of any security interests, mortgages or deeds of trust in
collateral security intended to secure the payment or performance of any
of the Obligations, all for the benefit of the Lenders and the Agent.
(d) General Electric Capital Corporation, in its capacity as
Documentation Agent, shall not have any duties or responsibilities, under
this Agreement or any other Loan Document.
(e) Royal Bank of Canada, in its capacity as Syndication Agent,
shall not have any duties or responsibilities, under this Agreement or any
other Loan Document.
(f) NationsBank, N.A., in its capacity as Co-Agent, shall not have
any duties or responsibilities, under this Agreement or any other Loan
Document.
15.2. Employees and Agents. The Agent may exercise its powers and execute
its duties by or through employees or agents and shall be entitled to take, and
to rely on, advice of counsel concerning all matters pertaining to its rights
and duties under this Agreement and the other Loan Documents. The Agent may
utilize the services of such Persons as the Agent in its sole discretion may
reasonably determine, and all reasonable fees and expenses of any such Persons
shall be paid by the Borrower.
15.3. No Liability. Neither the Agent nor any of its shareholders,
directors, affiliates, officers or employees nor any other Person assisting them
in their duties nor any agent or employee thereof, shall be liable for any
waiver, consent or approval given or any action taken, or omitted to be taken,
in good faith by it or them hereunder or under any of the other Loan Documents,
or in connection herewith or therewith, or be responsible for the consequences
of any oversight or error of judgment whatsoever, except that the Agent or such
other Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence. Neither the Agent nor any of its shareholders,
directors, officers or employees shall have any responsibilities, duties or
commitments to any Person under any of the Loan Documents, or any liabilities of
any kind or nature arising out of any of the financing
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arrangements provided by the Agent or the Lenders under the Loan Documents.
15.4. No Representations. The Agent shall not be responsible for the
execution or validity or enforceability of this Agreement, the Notes, any of the
other Loan Documents or any instrument at any time constituting, or intended to
constitute, collateral security for the Notes, or for the value of any such
collateral security or for the validity, enforceability or collectability of any
such amounts owing with respect to the Notes, or for any recitals or statements,
warranties or representations made herein or in any of the other Loan Documents
or in any certificate or instrument hereafter furnished to it by or on behalf of
any Transaction Party, or be bound to ascertain or inquire as to the performance
or observance of any of the terms, conditions, covenants or agreements herein or
in any instrument at any time constituting, or intended to constitute,
collateral security for the Notes or to inspect any of the properties, books or
records of any Transaction Party. The Agent shall not be bound to ascertain
whether any notice, consent, waiver or request delivered to it by the Borrower
or any holder of any of the Notes shall have been duly authorized or is true,
accurate and complete. The Agent has not made nor does it now make any
representations or warranties, express or implied, nor does it assume any
liability to the Lenders, with respect to the credit worthiness or financial
conditions of any of the Transaction Parties. Each Lender acknowledges that it
has, independently and without reliance upon the Agent or any other Lender, and
based upon such information and documents as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement.
15.5. Payments.
(a) Payments to Agent. A payment by any of the Transaction Parties
to the Agent hereunder or under any of the other Loan Documents for the
account of any Lender shall constitute a payment to such Lender. The Agent
agrees promptly to distribute to each Lender such Lender's pro rata share
of payments received by the Agent for the account of the Lenders except as
otherwise expressly provided herein or in any of the other Loan Documents.
(b) Distribution by Agent. If in the opinion of the Agent the
distribution of any amount received by it in such capacity hereunder,
under the Notes or under any of the other Loan Documents might involve it
in liability, it may refrain from making distribution until its right to
make distribution shall have been adjudicated by a court of competent
jurisdiction. If a court of competent jurisdiction shall adjudge that any
amount received and distributed by the Agent is to be repaid, each Person
to whom any such distribution shall have been made shall either repay to
the Agent its proportionate share of the amount so adjudged to be repaid
or shall pay over the same in such manner and to such Persons as shall be
determined by such court.
(c) Defaulting Lenders. Notwithstanding anything to the contrary
contained in this Agreement or any of the other Loan Documents, any Lender
that fails (a) to make available to the Agent its pro rata share of any
Loan or comply with any Settlement provisions in ss.2.4 or (b) to comply
with the provisions of ss.17.1 with respect to making dispositions and
arrangements with
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the other Lenders, where such Lender's share of any payment received,
whether by setoff or otherwise, is in excess of its pro rata share of such
payments due and payable to all or any of the Lenders, in each case as,
when and to the full extent required by the provisions of this Agreement,
shall be deemed in default (a "Defaulting Lender") and shall be deemed a
Defaulting Lender until such time as such default is satisfied. A
Defaulting Lender shall be deemed to have assigned any and all payments
due to it from the Borrower, whether on account of outstanding Loans,
interest, fees or otherwise, to the remaining Non-Defaulting Lenders of
its respective Tranche(s) for application to, and reduction of, their
respective pro rata shares of all outstanding Loans of such Tranche. The
Defaulting Lender hereby authorizes the Agent to distribute such payments
to the Non-Defaulting Lenders of its respective Tranche(s) in proportion
to their respective pro rata shares of all outstanding Loans of such
Tranche. A Defaulting Lender shall be deemed to have satisfied in full a
default when and if, as a result of application of the assigned payments
to all outstanding Loans of the Non-Defaulting Lenders of such Defaulting
Lender's respective Tranche(s), the Lenders' respective pro rata shares of
all outstanding Loans for which such Lender has Commitments have returned
to those in effect immediately prior to such default and without giving
effect to the nonpayment causing such default. Until such time as its
default is satisfied, a Defaulting Lender shall have no right to vote with
respect to any matters under or in respect of this Agreement and shall not
be entitled to receive its portion of any Commitment Fee paid in
accordance with ss.4.1 of this Agreement.
15.6. Holders of Notes. The Agent may deem and treat the payee of any Note
as the absolute owner or purchaser thereof for all purposes hereof until it
shall have been furnished in writing with a different name by such payee or by a
subsequent holder, assignee or transferee.
15.7. Indemnity. The Lenders ratably agree (in accordance with the amount
of Loans owing to each Lender) hereby to indemnify and hold harmless the Agent
from and against any and all claims, actions and suits (whether groundless or
otherwise), losses, damages, costs, expenses (including any expenses for which
the Agent has not been reimbursed by the Borrower as required by ss.17.2), and
liabilities of every nature and character arising out of or related to this
Agreement, the Notes, or any of the other Loan Documents or the transactions
contemplated or evidenced hereby or thereby, or the Agent's actions taken
hereunder or thereunder, except to the extent that any of the same shall be
directly caused by the Agent's willful misconduct or gross negligence.
15.8. Agent as Lender. In its individual capacity, BankBoston shall have
the same obligations and the same rights, powers and privileges in respect to
its Commitments and Loans, and as the holder of any of the Notes, as it would
have were it not also the Agent.
15.9. Resignation. The Agent may resign at any time by giving sixty (60)
days prior written notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
Agent in such capacity. Unless a Default or Event of Default shall have occurred
and be continuing, such successor Agent shall be reasonably acceptable to the
Borrower. If no successor Agent shall have been so
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appointed by the Required Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Agent's giving of notice of
resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall be a financial institution having a rating of not
less than A or its equivalent by Standard & Poor's. Upon the acceptance of any
appointment as an Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring Agent's
resignation, the provisions of this Agreement and the other Loan Documents shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Agent.
15.10. Notification of Defaults and Events of Default. Each Lender hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the Agent thereof. The Agent hereby agrees that upon
receipt of any notice under this ss.15.10 it shall promptly notify the other
Lenders of the existence of such Default or Event of Default.
15.11. Duties in the Case of Enforcement. In case one of more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have occurred, the Agent shall, if (a) so requested by
the Required Lenders and (b) the Lenders have provided to the Agent such
additional indemnities and assurances against expenses and liabilities as the
Agent may reasonably request, proceed to enforce the provisions of the Security
Documents authorizing the sale or other disposition of all or any part of the
Collateral and exercise all or any such other legal and equitable and other
rights or remedies as it may have in respect of such Collateral. The Required
Lenders may direct the Agent in writing as to the method and the extent of any
such sale or other disposition, the Lenders hereby agreeing to indemnify and
hold the Agent, harmless from all liabilities incurred in respect of all actions
taken or omitted in accordance with such directions, provided that the Agent
need not comply with any such direction to the extent that the Agent reasonably
believes the Agent's compliance with such direction to be unlawful or
commercially unreasonable in any applicable jurisdiction.
16. ASSIGNMENT AND PARTICIPATION.
16.1. Conditions to Assignment by Lenders. Except as provided herein, each
Lender may assign to (a) one or more Eligible Assignees or (b) a Lender or an
Affiliate of such assigning Lender, all or a portion of its interests, rights
and obligations under this Agreement (including all or a portion of all or any
of its Commitment Percentages and Commitments and the same portion of the Loans
of the respective Tranche at the time owing to it, and the Notes held by it);
provided that (i) except in the case of an assignment to a Lender or an
Affiliate of such assigning Lender of outstanding Loans at the time owing to the
assigning Lender; (x) the Agent, and unless an Event of Default shall have
occurred and be continuing, the Borrower shall have given its prior written
consent to such assignment, which consent, with respect to the Borrower, shall
not be unreasonably withheld or delayed and (y) each such assignment shall be in
an amount that is a whole multiple of $2,500,000 or, if less, the entire
remaining Commitment, or outstanding Loans of the assigned Tranche at the
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time owing, to such Lender, (ii) any assignment by an Acquisition Loan Lender
shall be of the same percentage for the (A) Acquisition Loan Commitment and/or
outstanding Acquisition Loans and (B) UK Acquisition Loan Commitment and/or
outstanding UK Acquisition Loans, of such Acquisition Loan Lender, and (iii) the
parties to such assignment shall execute and deliver to the Agent, for recording
in the Register (as hereinafter defined), an Assignment and Acceptance,
substantially in the form of Exhibit G hereto (an "Assignment and Acceptance"),
together with any Notes subject to such assignment. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least five
(5) Business Days after the execution thereof, (i) the assignee thereunder shall
be a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder, and (ii) the assigning
Lender shall, to the extent provided in such assignment and upon payment to the
Agent of the registration fee referred to in ss.16.3, be released from its
obligations under this Agreement.
16.2. Certain Representations and Warranties; Limitations; Covenants. By
executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:
(a) other than the representation and warranty that it is the legal
and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, the assigning Lender makes no representation or
warranty, express or implied, and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection
with this Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto or
the attachment, perfection or priority of any security interest or
mortgage;
(b) the assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any
of Transaction Parties liable in respect of any of the Obligations, or the
performance or observance by the Transaction Parties liable in respect of
any of the Obligations of any of their obligations under this Agreement or
any of the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements
referred to in ss.8.4 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance upon the
assigning Lender, the Agent, or any other Lender and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement;
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(e) such assignee represents and warrants that it is an Eligible
Assignee;
(f) such assignee appoints and authorizes the Agent to take such
action as Agent on its behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to the Agent by
the terms hereof or thereof, together with such powers as are reasonably
incidental thereto;
(g) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Agreement are
required to be performed by it as a Lender; and
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance.
16.3. Register. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the (a) the names and addresses of the Lenders, (b) the
Commitment Percentage of their respective Tranche(s), (c) the principal amount
of the Loans owing to, and/or as the case may be, the risk participations in any
UK Acquisition Loans held by, the Lenders from time to time, and (d) the Letter
of Credit Participations purchased by the Lenders from time to time. The entries
in the Register shall be conclusive, in the absence of manifest error, and the
Transaction Parties, the Agent and the Lenders may treat each Person whose name
is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower and
the Lenders at any reasonable time and from time to time upon reasonable prior
notice. Upon each such recordation, the assigning Lender agrees to pay to the
Agent a registration fee in the sum of $3,500.
16.4. New Notes. Upon its receipt of an Assignment and Acceptance executed
by the parties to such assignment, together with each Note subject to such
assignment, the Agent shall (a) record the information contained therein in the
Register, and (b) give prompt notice thereof to the Borrower. Within five (5)
Business Days after receipt of such notice, the Borrower, at its own expense,
shall execute and deliver to the Agent, in exchange for each surrendered Note, a
new Note with respect to the Borrower to the order of such Eligible Assignee in
an amount equal to the amount assumed by such Eligible Assignee pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained some portion
of its obligations hereunder, a new Note to the order of the assigning Lender in
an amount equal to the amount retained by it hereunder. Such new Notes shall
provide that they are replacements for the surrendered Notes, shall be in an
aggregate principal amount equal to the aggregate principal amount of the
surrendered Notes, shall be dated the effective date of such in Assignment and
Acceptance and shall otherwise be substantially the form of the assigned Notes.
The surrendered Notes shall be cancelled and returned to the Borrower.
16.5. Participations. Each Lender may sell participations to one or more
banks or other entities in all or a portion of such Lender's rights and
obligations under this Agreement and the other Loan Documents; provided
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that (a) any such sale or participation shall not affect the rights and duties
of the selling Lender hereunder to the Borrower and (b) the only rights granted
to the participant pursuant to such participation arrangements with respect to
waivers, amendments or modifications of the Loan Documents shall be the rights
to approve waivers, amendments or modifications that would reduce the principal
of or the interest rate on any Loans, extend the term or increase the amount of
any Commitment of such Lender as it relates to such participant, reduce the
amount of any Commitment Fees to which such participant is entitled or extend
any regularly scheduled payment date for principal or interest.
16.6. Disclosure. Each of the Borrowers agree that in addition to
disclosures made in accordance with standard and customary banking practices any
Lender may disclose information obtained by such Lender pursuant to this
Agreement to (i) assignees or participants hereunder or to any direct or
indirect contractual counterparty in swap agreements or such contractual party's
professional advisor and (ii) potential assignees, participants hereunder,
contractual counterparties in swap agreements or such contractual parties'
professional advisors; provided that such (x) assignees, participants,
contractual counterparties or such contractual parties' professional advisors or
(y) potential assignees, participants, contractual counterparties or such
contractual parties' professional advisors shall agree (a) to treat in
confidence such information as the Borrowers shall have specifically designated
as confidential ("Confidential Information") unless such Confidential
Information otherwise becomes public knowledge, (b) not to disclose such
Confidential Information to a third party, except as required by law or legal
process and (c) not to make use of such Confidential Information for purposes of
transactions unrelated to such contemplated assignment or participation.
16.7. Assignee or Participant Affiliated with Borrower. If any assignee
Lender is an Affiliate of the Borrower, then any such assignee Lender shall have
no right to vote as a Lender hereunder or under any of the other Loan Documents
for purposes of granting consents or waivers or for purposes of agreeing to
amendments or other modifications to any of the Loan Documents or for purposes
of making requests to the Agent pursuant to ss.14.1 or ss.14.2, and the
determination of the Required Lenders, Required Revolving Credit Lenders,
Required Acquisition Loan Lenders, Required Term Loan A Lenders and/or Required
Term Loan B Lenders shall for all purposes of this Agreement and the other Loan
Documents be made without regard to such assignee Lender's interest in any of
the Loans. If any Lender sells a participating interest in any of the Loans to a
participant, and such participant is the Borrower or an Affiliate of the
Borrower, then such transferor Lender shall promptly notify the Agent of the
sale of such participation. A transferor Lender shall have no right to vote as a
Lender hereunder or under any of the other Loan Documents for purposes of
granting consents or waivers or for purposes of agreeing to amendments or
modifications to any of the Loan Documents or for purposes of making requests to
the Agent pursuant to ss.14.1 or ss.14.2 to the extent that such participation
is beneficially owned by the Borrower or any Affiliate of the Borrower, and the
determination of the Required Lenders, the Required Term Loan A Lenders, the
Required Term Loan B Lenders, the Required Revolving Credit Lenders, the
Required Acquisition Loan Lenders, and the Required UK Acquisition Loan Lenders
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shall for all purposes of this Agreement and the other Loan Documents be made
without regard to the interest of such transferor Lender in the Loans to the
extent of such participation.
16.8. Miscellaneous Assignment Provisions. On or before the date it
becomes a party to this Agreement and from time to time thereafter upon any
change in status rendering any certificate or document previously delivered
pursuant to ss.2.12 invalid or inaccurate, each Lender that is organized under
the laws of a jurisdiction outside the United States shall (but, with respect to
any renewal or change in status, if legally able to do so) deliver to the
Borrowers and the Agent certification as to its exemption from deduction or
withholding of any United States federal income taxes, and each such Lender
shall comply with all Applicable Laws with respect to such exemption and any
renewal or extension thereof. Anything contained in this ss.16 to the contrary
notwithstanding, any Lender may at any time pledge all or any portion of its
interest and rights under this Agreement (including all or any portion of its
Notes) to any of the twelve (12) Federal Reserve Banks organized under ss.4 of
the Federal Reserve Act, 12 U.S.C. ss.341. No such pledge or the enforcement
thereof shall release the pledgor Lender from its obligations hereunder or under
any of the other Loan Documents.
16.9. Assignment by Borrower or Guarantor. No Transaction Party shall
assign or transfer any of its rights or obligations under any of the Loan
Documents without the prior written consent of each of the Lenders.
17. PROVISIONS OF GENERAL APPLICATION.
17.1. Setoff. Regardless of the adequacy of any Collateral, during the
continuance of any Event of Default, any deposits or other sums credited by or
due from any Lender to the Borrower and any securities or other Property of the
Borrower in the possession of such Lender may be applied to or set off by such
Lender against the payment of Obligations and any and all other liabilities,
direct, or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, of the Borrower to such Lender. Each Lender agrees with
each other Lender that (a) if an amount to be set off is to be applied to
Indebtedness of the Borrower to such Lender, other than Indebtedness evidenced
by the Notes held by such Lender, such amount shall be applied ratably to such
other Indebtedness and to the Indebtedness evidenced by all such Notes held by
such Lender, and (b) if such Lender shall receive from the Borrower, whether by
voluntary payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Notes held by such Lender by
proceedings against the Borrower at law or in equity or by proof thereof in
bankruptcy, reorganization, liquidation, receivership or similar proceedings, or
otherwise, and shall retain and apply to the payment of the Note or Notes held
by such Lender any amount in excess of its ratable portion of the payments
received by all of the Lenders with respect to the Notes held by such Lender
will make such disposition and arrangements with the other Lenders with respect
to such excess, either by way of distribution, pro tanto assignment of claims,
subrogation or otherwise as shall result in each Lender receiving in respect of
the Notes held by it, its proportionate payment as contemplated by this
Agreement; provided that if all or any part of such excess payment is thereafter
recovered from such Lender,
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such disposition and arrangements shall be rescinded and the amount restored to
the extent of such recovery, but without interest.
17.2. Expenses. The Transaction Parties jointly and severally agree to pay
upon demand by the Agent (a) the reasonable costs of producing and reproducing
this Agreement, the other Loan Documents and the other agreements and
instruments mentioned herein; (b) any taxes (including any interest and
penalties in respect thereto) payable by the Agent or any of the Lenders (other
than taxes based upon the Agent's or any Lender's net income) on or with respect
to the transactions contemplated by this Agreement (the Transaction Parties
hereby jointly and severally agreeing to indemnify the Agent and each Lender
with respect thereto); (c) the reasonable fees, expenses and disbursements of
the Agent's Special Counsel or any local counsel to the Agent incurred in
connection with the preparation, administration, interpretation or syndication
of the Loan Documents and other instruments mentioned herein, each closing
hereunder, and amendments, modifications, approvals, consents or waivers of the
Loan Documents (including in each case the allocated cost of staff counsel) and
the termination hereof, and each Lender's counsel in the case of amendments,
modifications, approvals, consents or waivers hereto or hereunder; (d) the
reasonable fees, expenses and disbursements of (i) the Agent incurred by the
Agent in connection with the preparation, administration, interpretation or
syndication of the Loan Documents and other instruments mentioned herein,
including all title insurance premiums and surveyor, engineering and appraisal
charges, and (ii) the Agent and the Lenders for amendments, modifications,
approvals, consents or waivers of the Loan Documents; (e) any reasonable fees,
costs, expenses and bank charges, including bank charges for returned checks,
incurred by the Agent in establishing, maintaining or handling agency accounts,
lock box accounts and other accounts for the collection of any of the
Collateral; (f) all out-of-pocket expenses (including without limitation
attorneys' fees and costs (which attorneys, during the continuation of a Default
or Event of Default, may be employees of any Lender or the Agent) and reasonable
consulting, accounting, appraisal, investment banking and similar professional
fees and charges) incurred by any Lender or the Agent in connection with (A) the
enforcement of or preservation of rights under any of the Loan Documents against
any of the Transaction Parties or the administration thereof after the
occurrence of a Default or Event of Default and (B) any litigation, proceeding
or dispute whether arising hereunder or otherwise, in any way related to any
Lender's or the Agent's relationship with the Transaction Parties; (g) all
reasonable fees, expenses and disbursements of the Agent incurred in connection
with UCC searches, UCC filings and other lien, judgment or litigation searches
(h) all reasonable costs of conducting commercial finance examinations and
appraisals of the Properties of the Borrower and its Subsidiaries, including the
applicable daily time charges of the Agent's commercial finance examiners,
agents, consultants and representatives engaged in such examinations and
appraisals as in effect from time to time and reasonable out-of-pocket travel
and other related expenses, subject to the frequency limitations set forth in
ss.9.9 or at any time after the occurrence of a Default or Event of Default; and
(i) all amounts paid by the Agent to any Agency Account Institution pursuant to
any Agency Account Agreement, as indemnity or otherwise. The covenants of this
ss.17.2 shall survive payment or satisfaction of all other Obligations.
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17.3. Indemnification. The Transaction Parties hereby jointly and
severally agree to indemnify and hold harmless the Arranger, the Lenders, the
Issuing Bank and the Agents from and against any and all claims, actions and
suits whether groundless or otherwise, and from and against any and all
liabilities, losses, damages and expenses of every nature and character arising
out of this Agreement or any of the other Loan Documents or the transactions
contemplated hereby including, without limitation, (a) any actual or proposed
use by any Transaction Party of the proceeds of any of the Loans, (b) the
reversal or withdrawal of any provisional credits granted by the Agent upon the
transfer of funds from bank agency or lock box accounts or in connection with
the provisional honoring of checks or other items, (c) any actual or alleged
infringement of any patent, copyright, trademark, service mark or similar right
of any Transaction Party comprised in the Collateral, (d) the Transaction
Parties entering into or performing this Agreement or any of the other Loan
Documents or (e) with respect to the Transaction Parties and their respective
properties and assets, the violation of any Environmental Law, the presence,
disposal, escape, seepage, leakage, spillage, discharge, emission, release or
threatened release of any Hazardous Substances or any action, suit, proceeding
or investigation brought or threatened with respect to any Hazardous Substances
(including, but not limited to, claims with respect to wrongful death, personal
injury or damage to property), in each case including, without limitation, the
reasonable fees and disbursements of counsel and allocated costs of internal
counsel incurred in connection with any such investigation, litigation or other
proceeding; provided, however, that the foregoing indemnification shall not
apply to any liabilities, losses, damages or expenses resulting directly from
the gross negligence or willful misconduct of the Arranger, any Lender, the
Issuing Bank, and any of the Agents. In litigation, or the prepartion therefor,
the Arranger, Lenders, the Issuing Bank and the Agents shall be entitled to
select their own counsel and, in addition to the foregoing indemnity, the
Transaction Parties agree to pay promptly the reasonable fees and expenses of
such counsel. If, and to the extent that the obligations of each Transaction
Party under this ss.17.3 are unenforceable for any reason, each Transaction
Party hereby agrees to make the maximum contribution to the payment in
satisfaction of such obligations which is permissible under applicable law. The
covenants contained in this ss.17.3 shall survive payment or satisfaction in
full of all other Obligations.
17.4. Survival of Covenants, Etc. All covenants, agreements,
representations and warranties made herein, in the Notes, in any of the other
Loan Documents or in any documents or other papers delivered by or on behalf of
the Transaction Parties pursuant hereto shall be deemed to have been relied upon
by the Lenders and the Agent, notwithstanding any investigation heretofore or
hereafter made by any of them, and shall survive the making by the Lenders of
any of the Loans as herein contemplated, and shall continue in full force and
effect so long as any of the covenants contained in ss.ss.9, 10, and 11 herein
remain in effect, and for such further time as may be otherwise expressly
specified in this Agreement. All statements contained in any certificate or
other paper delivered to any Lender or the Agent at any time by or on behalf of
the Transaction Parties pursuant hereto or in connection with the transactions
contemplated hereby shall constitute representations and warranties by the
Transaction Parties hereunder.
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17.5. Notices, Etc. Except as otherwise expressly provided in this
Agreement, all notices and other communications made or required to be given
pursuant to this Agreement or the Notes shall be in writing and shall be
delivered by hand, mailed by United States registered or certified first class
mail, postage prepaid, sent by overnight courier, or sent by telegraph,
telecopy, facsimile or telex and confirmed by delivery via courier or postal
service, addressed as follows:
(a) if to the Borrowers, at 2029 Century Park East, Suite 1112, Los
Angeles, California 90067, Attention: Douglas M. Hayes, or at such other
address for notice as the Borrowers shall last have furnished in writing
to the Person giving the notice; and
(b) if to the Agent, at 100 Federal Street, Boston, Massachusetts
02110, USA, Attention: Brian Geraghty, Director, or such other address for
notice as the Agent shall last have furnished in writing to the Person
giving the notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof. The UK Borrower, by its
execution of this Agreement, irrevocably appoints the Borrower as its agent for
service of process in all suits in connection with this Credit Agreement and the
other Loan Documents.
17.6. Governing Law. THIS AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS
OF THE STATE OF NEW YORK AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF SAID STATE OF NEW YORK. EACH TRANSACTION PARTY
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR ANY
FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF
SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON SUCH
TRANSACTION PARTY BY MAIL AT THE ADDRESS SPECIFIED IN ss.17.5. EACH TRANSACTION
PARTY HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE
OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
17.7. Headings. The captions in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.
17.8. Counterparts. This Agreement and any amendment hereof may be
executed in several counterparts and by each party on a separate counterpart,
each of which when executed and delivered shall be an original, and all of which
together shall constitute one instrument. In proving this
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Agreement it shall not be necessary to produce or account for more than one such
counterpart signed by the party against whom enforcement is sought.
17.9. Entire Agreement, Etc. The Loan Documents express the entire
understanding of the parties with respect to the transactions contemplated
hereby. Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated, except as provided in ss.17.11.
17.10. Waiver of Jury Trial. Each Transaction Party hereby waives its
right to a jury trial with respect to any action or claim arising out of any
dispute in connection with this Agreement, the Notes or any of the other Loan
Documents, any rights or obligations hereunder or thereunder or the performance
of such rights and obligations. Each Transaction Party (a) certifies that no
representative, Agent or attorney of any Lender or the Agent has represented,
expressly or otherwise, that such Lender or the Agent, would not, in the event
of litigation, seek to enforce the foregoing waivers and (b) acknowledges that
the Agent and the Lenders have been induced to enter into this Agreement, the
other Loan Documents to which it is a party by, among other things, the waivers
and certifications contained herein.
17.11. Consents, Amendments, Waivers, Etc.
(a) Neither this Agreement nor any other Loan Document nor any terms
hereof or thereof may be changed, waived, discharged or terminated unless
such change, waiver, discharge or termination is in writing signed by the
respective Transaction Parties party thereto and the Required Lenders;
provided that no such change, waiver, discharge or termination shall,
without the consent of each Lender (with Obligations of the respective
types being directly affected thereby):
(i) extend the final scheduled maturity of any Loan or Note or
extend the stated maturity of any Letter of Credit beyond the
Revolving Credit Loan Maturity Date, or reduce the rate or extend
the time of payment of interest or fees thereon (except in
connection with a waiver of applicability of any post-default
increase in interest rates), or reduce the principal amount thereof;
(ii) release all or substantially all of the Collateral
(except as expressly provided in the respective Loan Documents);
(iii) amend, modify or waive any provision of this ss.17.11,
(iv) reduce the percentage specified in, or otherwise modify,
the definition of Required Lenders (it being understood that, with
the consent of the Required Lenders, additional extensions of credit
pursuant to this Agreement may be included in the determination of
the Required Lenders on substantially the same basis as Loans and
Commitments are included on the Original Closing Date); or
(v) consent to the assignment or transfer by a Borrower of any
of its rights and obligations under this Agreement; provided
further, that no change, waiver, discharge or termination shall:
(A) increase the Commitments of any Lender over the
amount thereof then in effect (it being understood that a
waiver of any
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conditions precedent, covenants, Defaults or Events of Default
or of a mandatory prepayment shall not constitute an increase
of the Commitment of any Lender, and that an increase in the
available portion of any Commitment of any Lender shall not
constitute an increase in such Commitment of such Lender)
without the consent of such Lender; or
(B) without the consent of the Issuing Bank, amend,
modify or waive any provision of ss.3 or alter its rights or
obligations with respect to Letters of Credit; or
(C) without the consent of the Agent, amend, modify or
waive any provision of ss.15 or any other provision of this
Agreement or any of the other Loan Documents relating to the
rights or obligations of the Agent; or
(D) without the consent of the Required Term Loan A
Lenders amend, modify or waive any of the terms contained in
(x) ss.ss.4.3(e), 4.3(f), 4.10(a) or the definitions of Term
Loan A Percentage, Term Loan B Percentage, Acquisition Loan
Percentage, UK Acquisition Loan Percentage or Required Term
Loan A Lenders to the extent that, in any such case, such
amendment, modification or waiver would alter the application
of prepayments or repayments as among Term Loans A, Term Loans
B, Acquisition Loans and UK Acquisition Loans, in a manner
adverse to Term Loans A Lenders or (y) ss.ss.4.3(d) or 4.5; or
(E) without the consent of the Required Term Loan B
Lenders amend, modify or waive any of the terms contained in
(x) ss.ss.4.3(e), 4.3(f) 4.10(a) or the definitions of Term
Loan A Percentage, Term Loan B Percentage, Acquisition Loan
Percentage, UK Acquisition Loan Percentage or Required Term
Loan B Lenders to the extent that, in any such case, such
amendment, modification or waiver would alter the application
of prepayments or repayments as among Term Loans A, Term Loans
B, Acquisition Loans and UK Acquisition Loans, in a manner
adverse to Term Loans B Lenders or (y) ss.ss.4.3(d) or 4.6; or
(F) without the consent of the Required Acquisition Loan
Lenders amend, modify or waive any of the terms contained in
(x) ss.ss.4.3(e) 4.3(f), 4.10(a) or the definitions of Term
Loan A Percentage, Term Loan B Percentage, Acquisition Loan
Percentage, UK Acquisition Loan Percentage or Required
Acquisition Loan Lenders to the extent that, in any such case,
such amendment, modification or waiver would alter the
application of prepayments or repayments as among Term Loans
A, Term Loans B, Acquisition Loans and the UK Acquisition
Loans, in a manner adverse to Acquisition Loans Lenders or (y)
ss.ss.4.3(d) or 4.7(a) or the definition of Acquisition Loan
Commitment Period; or
(G) without the consent of the Required UK Acquisition
Loan Lenders amend, modify or waive any of the terms contained
in (x) ss.ss.4.3(e), 4.3(f), 4.10(a) or the definitions of
Term Loan A Percentage, Term Loan B Percentage, Acquisition
Loan Percentage, UK Acquisition Loan Percentage or Required UK
Acquisition Loan Lenders to the extent that, in any such case,
such amendment, modification or waiver would
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alter the application of prepayments or repayments as among
Term Loans A, Term Loans B, Acquisition Loans and UK
Acquisition Loans, in a manner adverse to the UK Acquisition
Loan Lenders or (y) ss.ss.4.3(d) or 4.7(b) or the definition
of Acquisition Loan Commitment Period.
(H) without the consent of the UK Fronting Lender,
amend, modify or waive any provision in this Agreement or any
of the other Loan Documents relating to the rights or
obligations of the UK Fronting Lender.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any provisions of this Agreement as contemplated by clause
(a)(i) through (v), inclusive, of the first proviso to ss.17.11(a), the
consent of the Required Lenders is obtained but the consent of the one or
more other Lenders whose consent is required is not obtained, then the
Borrower shall have the right to replace each such non-consenting Lender
or Lenders (so long as all nonconsenting Lenders are so replaced) with one
or more Replacement Lenders pursuant to ss.2.17 so long as at the time of
such replacement, each such Replacement Lender consents to the proposed
change, waiver, discharge or termination, provided that the Borrower shall
not have the right to replace a Lender solely as a result of the exercise
of such Lender's right (and the withholding of any required consent by
such Lender) pursuant to clauses (A) through (F) of the second proviso to
ss.17.11(a).
(c) No waiver shall extend to or affect any obligation not expressly
waived or impair any right consequent thereon. No course of dealing or
delay or omission on the part of the Agent or any Lender in exercising any
right shall operate as a waiver thereof or otherwise be prejudicial
thereto. No notice to or demand upon the Borrower shall entitle the
Borrower to other or further notice or demand in similar or other
circumstances.
(d) Notwithstanding anything to the contrary contained above in this
ss.17.11, the Agent may (i) enter into amendments to this Agreement, the
Guarantee and the Security Documents for the purpose of adding additional
Subsidiaries of the Borrower (or other Transaction Parties) as parties
thereto and (ii) enter into security documents to satisfy the requirements
of ss.ss.9.16, 9.17 and 9.21, in each case without the consent of the
Required Lenders.
(e) Notwithstanding anything to the contrary contained above in this
ss.17.11, Schedules 8.13, 8.17, 8.18, 8.19, and 8.22 may be supplemented
or amended and restated by the Borrower in connection with any Permitted
Acquisition, to the extent that such supplement or amendment and
restatement reflects changes that are permitted by this Agreement and the
other Loan Documents. Such supplement or amendment and restatement shall
become effective upon the Borrower's delivery of the same to the Agent,
together with a certificate of an authorized officer of the Borrower that
such supplement or amendment and restatement reflects changes that are
permitted by this Agreement and the other Loan Documents. The Agent shall
promptly distribute to each Lender a copy of such supplement or amendment
and restatement, together with the certificate of the authorized officer
of the Borrower referred to above.
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17.12. Severability. The provisions of this Agreement are severable and if
any one clause or provision hereof shall be held invalid or unenforceable in
whole or in part in any jurisdiction, then such invalidity or unenforceability
shall affect only such clause or provision, or part thereof, in such
jurisdiction, and shall not in any manner affect such clause or provision in any
other jurisdiction, or any other clause or provision of this Agreement in any
jurisdiction.
17.13. Understanding as to Revolving Credit Commitments and Acquisition
Loan Commitment Period. The Transaction Parties acknowledge that each Loan or
Letter of Credit to be made or issued hereunder shall be subject to satisfaction
of each of the conditions precedent set forth in ss.13, including, without
limitation, ss.13.7. The efforts that may be required to satisfy the conditions
set forth in ss.13.7 may result in a delay in the availability of Loans and/or
Letters of Credit hereunder. The Transaction Parties acknowledge that none of
the Agent or any of the Lenders shall have any liability to the Transaction
Parties as a result of any good faith determination by the Agent that the
conditions set forth in ss.13.7 are not satisfied with respect to any request
for Loans or Letters of Credit hereunder.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as a
sealed instrument as of the date first set forth above.
BORROWER: COMPASS AEROSPACE CORPORATION
By:
----------------------------------------
Name:
Title:
GUARANTORS: AEROMIL ENGINEERING COMPANY
By:
----------------------------------------
Name:
Title:
WESTERN METHODS MACHINERY CORPORATION
By:
----------------------------------------
Name:
Title:
BARNES MACHINE INCORPORATED
By:
----------------------------------------
Name:
Title:
BRITTAIN MACHINE, INC.
By:
----------------------------------------
Name:
Title:
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WICHITA MANUFACTURING, INC.,
By:
----------------------------------------
Name:
Title:
J&J LEASING, INC
By:
----------------------------------------
Name:
Title:
SEA-LECT PRODUCTS, INC.,
By:
----------------------------------------
Name:
Title:
CWE ACQUISITION CO.
By:
----------------------------------------
Name:
Title:
LAMSCO WEST, INC.
By:
----------------------------------------
Name:
Title:
MODERN MANUFACTURING, INC.
By:
----------------------------------------
Name:
Title:
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LENDERS
AND AGENTS: BANKBOSTON, N.A., individually and as Agent
By:
----------------------------------------
Name:
Title:
BANKBOSTON, N.A. (London Branch),
individually and as UK Fronting Lender
By:
----------------------------------------
Name:
Title:
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GENERAL ELECTRIC CAPITAL
CORPORATION, as Documentation Agent
By:
----------------------------------------
Name:
Title:
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NATIONSBANK, N.A., as Co- Agent
By:
----------------------------------------
Name:
Title:
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ROYAL BANK OF CANADA, as Syndication Agent
By:
----------------------------------------
Name:
Title:
Schedule 1.2
Applicable Margins
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Eurocurrency Acquisition Commitment
Base Rate Rate A Base Eurocurrency Revolving Credit Fees and UK Acquisition
Level Leverage Ratio A Loans Loans Rate B Loans Rate B Loans Commitment Fees Commitment Fees
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I Greater than 3.5:1.0 1.50% 3.00% 2.00% 3.50% 0.50% 0.75%
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II Less than or equal to
3.5:1.0 but greater 1.25% 2.75% 2.00% 3.50% 0.50% 0.75%
than 3.0:1.0
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III Less than or equal to
3.0:1.0 1.00% 2.50% 2.00% 3.50% 0.375% 0.50%
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