Exhibit 10.1
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REVOLVING CREDIT AGREEMENT
Dated as of February 28, 2002
among
WATTS INDUSTRIES, INC.,
WATTS REGULATOR CO.,
WATTS INDUSTRIES EUROPE B.V.,
THE LENDERS LISTED ON SCHEDULE 1 HERETO,
and
FLEET NATIONAL BANK, as Administrative Agent
with
Fleet Securities, Inc. having acted as Arranger
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TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION.................................. 1
1.1. Definitions...................................................... 1
1.2. Rules of Interpretation.......................................... 24
2. THE REVOLVING CREDIT FACILITY............................................ 26
2.1. Commitment to Lend............................................... 26
2.2. Facility Fee; Utilization Fee.................................... 26
2.2.1. Facility Fee........................................... 26
2.2.2. Utilization Fee........................................ 26
2.3. Reduction of Total Commitment.................................... 27
2.4. The Revolving Credit Notes....................................... 27
2.5. Interest on Revolving Credit Loans............................... 27
2.6. Requests for Revolving Credit Loans.............................. 28
2.6.1. General................................................ 28
2.6.2. Swing Line............................................. 29
2.7. Conversion Options............................................... 29
2.7.1. Conversion to Different Type of Revolving Credit Loan.. 29
2.7.2. Continuation of Type of Revolving Credit Loan.......... 30
2.7.3. Eurocurrency Rate Loans................................ 30
2.8. Funds for Revolving Credit Loan.................................. 31
2.8.1. Funding Procedures..................................... 31
2.8.2. Advances by Administrative Agent....................... 31
2.9. Settlements...................................................... 32
2.9.1. General................................................ 32
2.9.2. Failure to Make Funds Available........................ 32
2.9.3. No Effect on Other Lenders............................. 33
2.10. Optional Currency................................................ 33
2.10.1. Request for Euros...................................... 33
2.10.2. Denominations.......................................... 34
2.10.3. Repayment.............................................. 34
2.10.4. Funding................................................ 35
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.................................. 35
3.1. Maturity......................................................... 35
3.2. Mandatory Repayments of Revolving Credit Loans................... 35
3.2.1. General................................................ 35
3.2.2. Proceeds of Certain Events............................. 35
3.3. Optional Repayments of Revolving Credit Loans.................... 36
4. CERTAIN GENERAL PROVISIONS............................................... 36
4.1. Closing Fee...................................................... 36
4.2. Administrative Agent's Fee....................................... 36
4.3. Funds for Payments............................................... 37
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4.3.1. Payments to Administrative Agent....................... 37
4.3.2. No Offset, etc......................................... 37
4.3.3. Non-U.S. Lenders....................................... 37
4.4. Computations..................................................... 38
4.5. Inability to Determine Eurocurrency Rate......................... 39
4.6. Illegality....................................................... 39
4.7. Additional Costs, etc............................................ 40
4.8. Capital Adequacy................................................. 41
4.9. Certificate...................................................... 41
4.10. Indemnity........................................................ 42
4.11. Interest After Default........................................... 42
4.12. Currency Matters................................................. 42
4.13. Lending Office................................................... 43
5. GUARANTIES............................................................... 43
5.1. General.......................................................... 43
5.2. Guaranty from Domestic Borrower.................................. 43
5.3. Guaranty Absolute................................................ 43
5.4. Effectiveness, Enforcement....................................... 45
5.5. Waiver........................................................... 45
5.6. Subordination; Subrogation....................................... 45
5.7. Payments......................................................... 46
5.8. Receipt of Information........................................... 46
6. REPRESENTATIONS AND WARRANTIES........................................... 46
6.1. Corporate Authority.............................................. 47
6.1.1. Incorporation; Good Standing........................... 47
6.1.2. Authorization.......................................... 47
6.1.3. Enforceability......................................... 47
6.2. Governmental Approvals........................................... 47
6.3. Title to Properties; Leases...................................... 48
6.4. Financial Statements and Projections............................. 48
6.4.1. Fiscal Year............................................ 48
6.4.2. Financial Statements................................... 48
6.4.3. Projections............................................ 48
6.4.4. Solvency............................................... 48
6.5. No Material Adverse Changes, etc................................. 49
6.6. Franchises, Patents, Copyrights, etc............................. 49
6.7. Litigation....................................................... 49
6.8. No Materially Adverse Contracts, etc............................. 49
6.9. Compliance with Other Instruments, Laws, etc..................... 49
6.10. Tax Status....................................................... 49
6.11. No Event of Default.............................................. 50
6.12. Holding Company and Investment Company Acts...................... 50
6.13. Absence of Financing Statements, etc............................. 50
6.14. Certain Transactions............................................. 50
6.15. Employee Benefit Plans........................................... 51
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6.15.1. In General............................................ 51
6.15.2. Terminability of Welfare Plans........................ 51
6.15.3. Guaranteed Pension Plans.............................. 51
6.15.4. Multiemployer Plans................................... 51
6.16. Use of Proceeds.................................................. 52
6.16.1. General............................................... 52
6.16.2. Regulations U and X................................... 52
6.16.3. Ineligible Securities................................. 52
6.16.4. Indenture Debt........................................ 52
6.17. Environmental Compliance......................................... 52
6.18. Subsidiaries, etc................................................ 54
6.19. No Withholding, Etc.............................................. 54
6.20. No Filing, Recording Required.................................... 54
6.21. Indenture Debt................................................... 54
6.22. Disclosure....................................................... 55
6.23. Insurance........................................................ 55
6.24. Dutch Companies.................................................. 55
7. AFFIRMATIVE COVENANTS.................................................... 55
7.1. Punctual Payment................................................. 56
7.2. Maintenance of Office............................................ 56
7.3. Records and Accounts............................................. 56
7.4. Financial Statements, Certificates and Information............... 56
7.5. Notices.......................................................... 57
7.5.1. Defaults............................................... 57
7.5.2. Environmental Events................................... 58
7.5.3. Notification of Claim Against Assets................... 58
7.5.4. Notice of Litigation and Judgments..................... 58
7.6. Legal Existence; Maintenance of Properties....................... 58
7.7. Insurance........................................................ 59
7.8. Taxes............................................................ 59
7.9. Inspection of Properties and Books, etc.......................... 59
7.9.1. General................................................ 59
7.9.2. Appraisals............................................. 60
7.9.3. Communications with Accountants........................ 60
7.10. Compliance with Laws, Contracts, Licenses, and Permits........... 60
7.11. Employee Benefit Plans........................................... 61
7.12. Use of Proceeds.................................................. 61
7.13. Fair Labor Standards Act......................................... 61
7.14. Additional Subsidiaries.......................................... 61
7.15. New Guarantors................................................... 61
7.16. Amendments to Governing Documents................................ 62
7.17. Further Assurances............................................... 62
7.18. Post-Closing Covenant............................................ 63
8. CERTAIN NEGATIVE COVENANTS............................................... 63
8.1. Restrictions on Indebtedness..................................... 63
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8.2. Restrictions on Liens............................................ 65
8.3. Restrictions on Investments...................................... 67
8.4. Restricted Payments.............................................. 68
8.5. Merger, Consolidation and Disposition of Assets.................. 68
8.5.1. Mergers and Acquisitions............................... 68
8.5.2. Disposition of Assets.................................. 70
8.6. Sale and Leaseback............................................... 71
8.7. Compliance with Environmental Laws............................... 71
8.8. Employee Benefit Plans........................................... 71
8.9. Business Activities.............................................. 72
8.10. Fiscal Year...................................................... 72
8.11. Transactions with Affiliates..................................... 72
8.12. Modification of Governing Documents.............................. 72
8.13. Indenture Debt................................................... 72
9. FINANCIAL COVENANTS...................................................... 73
9.1. Leverage Ratio................................................... 73
9.2. Fixed Charge Coverage Ratio...................................... 73
9.3. Consolidated Net Worth........................................... 73
10. CLOSING CONDITIONS...................................................... 73
10.1. Loan Documents, etc.............................................. 73
10.1.1. Loan Documents........................................ 73
10.1.2. Indenture Debt Documents.............................. 73
10.2. Certified Copies of Governing Documents.......................... 73
10.3. Corporate or Other Action........................................ 73
10.4. Incumbency Certificate........................................... 74
10.5. Uniform Commercial Code Searches................................. 74
10.6. Certificates of Insurance........................................ 74
10.7. Opinions of Counsel.............................................. 74
10.8. Payment of Fees.................................................. 74
10.9. Payoff Letter.................................................... 74
10.10. Disbursement Instructions........................................ 75
11. CONDITIONS TO ALL BORROWINGS............................................ 75
11.1. Representations True; No Event of Default........................ 75
11.2. No Legal Impediment.............................................. 75
11.3. Proceedings and Documents........................................ 75
12. EVENTS OF DEFAULT; ACCELERATION; ETC.................................... 75
12.1. Events of Default and Acceleration............................... 75
12.2. Termination of Commitments....................................... 78
12.3. Remedies......................................................... 79
12.4. Distribution of Proceeds......................................... 79
12.5. Judgement Currency............................................... 80
13. THE ADMINISTRATIVE AGENT................................................ 81
13.1. Authorization.................................................... 81
13.2. Employees and Agents............................................. 81
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13.3. No Liability..................................................... 82
13.4. No Representations............................................... 82
13.4.1. General............................................... 82
13.4.2. Closing Documentation, etc............................ 82
13.5. Payments......................................................... 83
13.5.1. Payments to Administrative Agent...................... 83
13.5.2. Distribution by Administrative Agent.................. 83
13.5.3. Delinquent Lenders.................................... 83
13.6. Holders of Revolving Credit Notes................................ 84
13.7. Indemnity........................................................ 84
13.8. Administrative Agent as Lender................................... 84
13.9. Resignation...................................................... 84
13.10. Notification of Defaults and Events of Default................... 84
14. ASSIGNMENT AND PARTICIPATION............................................ 85
14.1. Conditions to Assignment by Lenders.............................. 85
14.1.1. General Conditions.................................... 85
14.1.2. Assignment to Special Purpose Funding Vehicle......... 85
14.2. Certain Representations and Warranties; Limitations; Covenants... 86
14.3. Register......................................................... 87
14.4. New Revolving Credit Notes....................................... 88
14.5. Participations................................................... 88
14.6. Assignee or Participant Affiliated with the Borrowers............ 88
14.7. Miscellaneous Assignment Provisions.............................. 89
14.8. Assignment by Parent or the Borrowers............................ 89
14.9. Increase in Total Commitment..................................... 89
15. PROVISIONS OF GENERAL APPLICATIONS...................................... 92
15.1. Setoff........................................................... 92
15.2. Expenses......................................................... 93
15.3. Indemnification.................................................. 94
15.4. Treatment of Certain Confidential Information.................... 94
15.4.1. Confidentiality....................................... 94
15.4.2. Prior Notification.................................... 95
15.4.3. Other................................................. 95
15.5. Survival of Covenants, Etc....................................... 95
15.6. Notices.......................................................... 96
15.7. Governing Law; Consent to Jurisdiction; Waiver of Immunities..... 97
15.8. Headings......................................................... 98
15.9. Counterparts..................................................... 98
15.10. Entire Agreement, Etc............................................ 98
15.11. Waiver of Jury Trial............................................. 98
15.12. Consents, Amendments, Waivers, Etc............................... 99
15.13. Severability..................................................... 100
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Exhibits
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Loan Request
Exhibit C Form of Compliance Certificate
Exhibit D Form of Assignment and Acceptance
Exhibit E Form of Election Request
Schedules
Schedule 1 Lenders and Commitments
Schedule 2 Foreign Guarantors
Schedule 6.3 Title to Properties; Leases
Schedule 6.5 Restricted Payments
Schedule 6.7 Litigation
Schedule 6.17 Environmental Compliance
Schedule 6.18(a) Subsidiaries
Schedule 6.18(b) Joint Ventures and Partnerships
Schedule 8.1 Existing Indebtedness
Schedule 8.2 Existing Liens
Schedule 8.3(d) Existing Investments
Schedule 8.3(h) Existing Investments in Joint Ventures
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT is made as of February 28, 2002, by and
among (a) Watts Industries, Inc., a Delaware corporation having its principal
place of business at 815 Chestnut Street, North Andover, Massachusetts 01845
(the "Parent"), (b) WATTS REgulator CO., a Massachusetts corporation having its
principal place of business at 815 Chestnut Street, North Andover, Massachusetts
01845 (the "Domestic Borrower"), (c) Watts Industries Europe B.V., a private
company with limited liability organized under the laws of The Netherlands,
established at Eerbeek, The Netherlands, and with business address at Kollergang
14, 6961 LZ Eerbeek, The Netherlands (the "Foreign Borrower", and together with
the Domestic Borrower, the "Borrowers" and each individually, a "Borrower"), (d)
FLEET NATIONAL BANK, a national banking association and the other lending
institutions listed on Schedule 1 and (e) FLEET NATIONAL BANK as administrative
agent for itself and such other lending institutions.
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. Definitions. The following terms shall have the meanings set forth in
this ss.1 or elsewhere in the provisions of this Credit Agreement referred to
below:
Acceding Lender. See ss.14.9.
Administrative Agent. Fleet National Bank, acting as administrative agent
for the Lenders and each other Person appointed as the successor Administrative
Agent in accordance with ss.15.9.
Administrative Agent's Fee. See ss.4.2.
Administrative Agent's Office. The Administrative Agent's office located
at 100 Federal Street, Boston, Massachusetts 02110, or at such other location as
the Administrative Agent may designate from time to time.
Administrative Agent's Special Counsel. Bingham Dana LLP or such other
counsel as may be approved by the Administrative Agent.
Affiliate. Any Person which, directly or indirectly, controls, is
controlled by or is under common control with any Borrower or any Lender, as the
case may be. "Control" of a Person means the power, directly or indirectly, (a)
to vote ten percent (10%) or more of the Capital Stock (on a fully diluted
basis) of such Person having ordinary voting power for the election of
directors, managing members or general partners (as applicable); or (b) to
direct or cause the direction of the management and policies of such Person
(whether by contract or otherwise).
Applicable Margin. (a) For the period from the Closing Date through and
including the Margin Modification Date, with respect to all Base Rate Loans,
Euro Base Rate Loans, Eurocurrency Rate Loans and the Facility Fee, at any time
of determination
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thereof, the applicable annual percentage rate set forth in the table below
opposite the Debt Ratings with respect to Long Term Senior Debt of the Parent
then in effect, subject to the provisions set forth below:
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Debt Rating Applicable Margin
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Eurocurrency
Rate Loans and
Base Rate Euro Base Rate Facility
S&P Moody's Loans Loans Fee
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A- or better A3 or better 0% 0.50% 0.10%
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BBB+ Baa1 0% 0.60% 0.15%
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BBB Baa2 0% 0.70% 0.175%
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BBB- Baa3 0% 0.80% 0.20%
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BB+ Ba1 0% 1.05% 0.25%
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Below BB+ Below Ba1 0% 1.30% 0.325%
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provided that (i) in the event of a split rating by the two rating agencies with
respect to the same Long Term Senior Debt where such ratings differ only by one
level, the higher rating shall determine the Applicable Margin, (ii) in the
event of a split rating by the two rating agencies with respect to the same Long
Term Senior Debt where such ratings differ by more than one level, the rating
level that is one level above the lower level shall determine the Applicable
Margin, (iii) in the event that only one of the two rating agencies issues a
Debt Rating, such rating shall determine the Applicable Margin, (iv) in the
event that different types or series of Long Term Senior Debt have different
Debt Ratings, the Long Term Senior Debt with the highest Debt Ratings will be
used to determine the Applicable Margin, (v) determinations of the Applicable
Margin, and any resulting adjustment of the effective interest rate with respect
to Base Rate Loans and Eurocurrency Rate Loans and the Facility Fee, shall be
made on the first day of each fiscal quarter (the "Adjustment Date") based on
the Parent's Debt Rating as of the last day of the previous fiscal quarter and
shall remain in effect until the next Adjustment Date, and all adjustments shall
take effect on the applicable Adjustment Date, and (vi) in the event that S&P
and Moody's and any Successor Rating Agency cease to issue Debt Ratings (other
than as a result of the Margin Modification Date having occurred), the
Administrative Agent, the Lenders and the Borrowers shall commence negotiations
in good faith to agree on a new methodology for determining the Applicable
Margin and until such new methodology has been agreed to in writing by the
Borrowers and the Lenders, the Applicable Margin shall be two levels higher than
the most recent Applicable Margin which was determined by a Debt Rating; and
provided, further, in the event that there is a Successor Rating Agency or there
is a change in rating terminology by S&P or Moody's, each of the Borrowers and
the Required Lenders shall agree as to the amendment of the table set forth
above taking into account the explanation of such new rating terminology by S&P,
Moody's or such Successor Rating Agency, as the case may be, and its
comparability to the Debt Ratings set forth in the
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table above; and (b) from and after the Margin Modification Date, with respect
to all Base Rate Loans, Euro Base Rate Loans, Eurocurrency Rate Loans and the
Facility Fee for each period commencing on a Leverage Adjustment Date through
the date immediately preceding the next Leverage Adjustment Date (each a "Rate
Adjustment Period"), the Applicable Margin shall be the applicable margin set
forth below with respect to the Leverage Ratio, as determined for the Reference
Period of the Parent and its Subsidiaries ending on the fiscal quarter ended
immediately prior to the applicable Rate Adjustment Period.
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Eurocurrency
Loans and Rate
Leverage Base Rate Euro Base Rate Facility
Level Ratio Loans Loans Fee
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I Greater than or
equal to 0% 1.30% 0.325%
2.75:1.00
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II Less than
2.75:1.00 but 0% 1.05% 0.250%
greater than or
equal to
2.25:1.00
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III Less than
2.25:1.00 but 0% 0.80% 0.200%
greater than or
equal to
1.75:1.00
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IV Less than
1.75:1.00 but 0% 0.70% 0.175%
greater than or
equal to
1.25:1.00
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IV Less than 0% 0.60% 0.150%
1.25:1.00
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Notwithstanding the foregoing, (a) for the Revolving Credit Loans
outstanding and the Facility Fee payable during the period commencing on the
Margin Modification Date through the date immediately preceding the first
Leverage Adjustment Date to occur after the Margin Modification Date, the
Applicable Margin shall be based on the Parent's Leverage Ratio as of the fiscal
quarter most recently ended prior to the Margin Modification Date, and (b) if
the Parent fails to deliver any Compliance Certificate pursuant to ss.7.4(c)
hereof then, for the period commencing on the next Leverage Adjustment Date to
occur subsequent to such failure through the date immediately following the date
on which such Compliance Certificate is delivered, the Leverage Applicable
Margin shall be the highest Applicable Margin set forth above.
Applicable Pension Legislation. At any time, any pension or retirement
benefits legislation (be it national, federal, provincial, territorial or
otherwise) then applicable to the Parent or any of its Subsidiaries.
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Arranger. Fleet Securities, Inc.
Asset Sale. Any one or series of related transactions in which any
Borrower or any of its Subsidiaries conveys, sells, leases, licenses or
otherwise disposes of, directly or indirectly, any of its properties, businesses
or assets (including the sale or issuance of capital stock of any Subsidiary
other than to such Borrower or any Subsidiary of such Borrower) whether owned on
the Closing Date or thereafter acquired.
Assignment and Acceptance. See ss.14.1.
Balance Sheet Date. December 31, 2000.
Base Rate. The higher of (a) the variable annual rate of interest so
designated from time to time by Fleet as its "prime rate", such rate being a
reference rate and not necessarily representing the lowest or best rate being
charged to any customer, and (b) one-half of one percent (0.5%) 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 Administrative
Agent from three funds brokers of recognized standing selected by the
Administrative Agent. Changes in the Base Rate resulting from any changes in
Fleet's "prime rate" shall take place immediately without notice or demand of
any kind.
Base Rate Loans. Revolving Credit Loans denominated in Dollars and bearing
interest calculated by reference to the Base Rate.
Borrowers. As defined in the preamble hereto.
Business Day. Any day other than a Saturday or a Sunday on which banking
institutions in Boston, Massachusetts, are open for the transaction of banking
business and, in addition, (a) if Eurocurrency Rate Loans denominated in Dollars
are involved, a day which is also a day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Administrative Agent
in its sole discretion acting in good faith, and (b) if Eurocurrency Rate Loans
denominated in Euros are involved, a day which is also a day on which (i)
dealings and exchange in Dollars and in the Euro are carried on in the London
interbank market and a day upon which such clearing system as is determined by
the Administrative Agent to be suitable for clearing or settlement of the Euro
is open for business) and (ii) Euro settlements of such dealings may be effected
in New York, New York and London, England.
Capital Expenditures. Amounts paid or Indebtedness incurred by the Parent
or any of its Subsidiaries in connection with (a) the purchase or lease by the
Parent or any
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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 or (b) the
lease of any assets by the Parent or any of its Subsidiaries as lessee under any
Synthetic Lease to the extent that such assets would have been Capital Assets
had the Synthetic Lease been treated for accounting purposes as a Capitalized
Lease.
Capitalized Leases. Leases under which the Parent 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.
Capital Stock. Any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.
CERCLA. See ss.6.17(a).
Change of Control. An event or series of events by which (a) George B.
Horne, Timothy P. Horne, Frederic B. Horne, David H. Horne, Deborah Horne, Peter
W. Horne and their descendants (or any trusts (including any voting trusts) or
similar entities established for their benefit or that of their descendants)
(collectively, the "Horne Investors") shall at any time cease to own, legally or
beneficially, at least fifty-one percent (51%) (by number of votes) of the
Voting Stock of the Parent; (b) during any period of twelve (12) consecutive
calendar months, individuals who were directors of the Parent on the first day
of such period shall cease to constitute a majority of the board of directors of
the Parent (except to the extent that individuals who at the beginning of such
twelve (12) month period were replaced by individuals (x) elected by a majority
of the remaining members of the board of directors of the Parent or (y)
nominated for election by a majority of the remaining members of the board of
directors of the Parent and thereafter as elected as directors by shareholders
of the Parent); or (c) except for directors' qualifying shares in jurisdictions
where such qualifying shares are required, the Parent shall fail to own directly
or indirectly, one hundred percent (100%) of the Capital Stock of each of the
Borrowers and the other Guarantors.
Closing Date. The first date on which the conditions set forth inss.10
have been satisfied and any Revolving Credit Loans are to be made.
Closing Fee. See ss.4.1.
Code. The Internal Revenue Code of 1986.
Commitment. With respect to each Lender, the amount set forth on Schedule
1 hereto as the amount of such Lender's commitment to make Revolving Credit
Loans to the Borrowers, as the same may be modified pursuant to ss.14.9 hereof,
and as the same may be reduced from time to time; or if such commitment is
terminated pursuant to the provisions hereof, zero.
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Commitment Increase Request. See ss.14.9.
Commitment Percentage. With respect to each Lender, the percentage set
forth on Schedule 1 hereto as such Lender's percentage of the aggregate
Commitments of all of the Lenders.
Compliance Certificate. See ss.8.4(d).
Consolidated or consolidated. With reference to any term defined herein,
shall mean that term as applied to the accounts of the Parent and its
Subsidiaries, consolidated in accordance with GAAP.
Consolidated EBITDA. With respect to the Parent and its Subsidiaries for
any fiscal period, an amount equal to the sum of (a) Consolidated Net Income of
the Parent and its Subsidiaries for such fiscal period, plus (b) in each case to
the extent deducted in the calculation of such Person's Consolidated Net Income
and without duplication, (i) depreciation and amortization for such period, plus
(ii) income tax expense for such period, plus (iii) Consolidated Total Interest
Expense paid or accrued during such period, plus (iv) other noncash charges for
such period, plus (v) restructuring charges taken in the fiscal quarter ending
December 31, 2001 and the fiscal year ending December 31, 2002 provided that the
amount of such charges shall not exceed (A) $6,200,000 for the fiscal quarter
ending December 31, 2001 and (B) $10,000,000 for the fiscal year ending December
31, 2002, minus (c) to the extent added in computing Consolidated Net Income,
and without duplication, all noncash gains (including income tax benefits) for
such period, in each case as determined in accordance with GAAP.
Consolidated Net Income (or Deficit). The consolidated net income (or
deficit) of the Parent and its Subsidiaries, after deduction of all expenses,
taxes (including franchise and foreign withholding taxes and any state single
business or unitary tax of any Foreign Subsidiary), and other proper charges,
determined in accordance with GAAP, after eliminating therefrom all
extraordinary nonrecurring items of income.
Consolidated Net Worth. The excess of Consolidated Total Assets over
Consolidated Total Liabilities (excluding adjustments to translate foreign
assets and liabilities for changes in foreign exchange rates made in accordance
with Financial Accounting Standards Board Statement Nos. 52 and 133), less, to
the extent otherwise includable in the computations of Consolidated Net Worth,
any subscriptions receivable.
Consolidated Operating Cash Flow. For any period, an amount equal to (a)
the sum of (i) Consolidated EBITDA for such period, less (b) to the extent not
already deducted in the determination of Consolidated EBITDA, Capital
Expenditures made during such period.
Consolidated Total Assets. The sum of (a) all assets ("consolidated
balance sheet assets") of the Parent and its Subsidiaries determined on a
consolidated basis in accordance with GAAP, plus (b) without duplication, all
assets leased by the Parent or
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any Subsidiary as lessee under any Synthetic Lease to the extent that such
assets would have been consolidated balance sheet assets had the Synthetic Lease
been treated for accounting purposes as a Capitalized Lease, plus (c) without
duplication, all sold receivables referred to in clause (g) of the definition of
the term "Indebtedness" to the extent that such receivables would have been
consolidated balance sheet assets had they not been sold.
Consolidated Total Debt Service. With respect to the Parent and its
Subsidiaries and for any period, the sum, without duplication, of (a)
Consolidated Total Interest Expense for such period plus (b) any and all
scheduled repayments of principal during such period in respect of Indebtedness
that becomes due and payable or that are to become due and payable during such
period pursuant to any agreement or instrument to which the Parent or any of its
Subsidiaries is a party relating to (i) the borrowing of money or the obtaining
of credit, including the issuance of notes or bonds, (provided, to the extent
the Parent makes the scheduled principal repayment at maturity of the Senior
Notes issued pursuant to the terms of the Senior Note Indenture with the
proceeds of Refinanced Indenture Debt, that portion of such repayment which was
paid with such proceeds shall be excluded from the subparagraph (i) which
calculating Consolidated Total Debt Service), (ii) the deferred purchase price
of assets (other than trade payables incurred in the ordinary course of
business), (iii) in respect of any Synthetic Leases or any Capitalized Leases,
(iv) in respect of any reimbursement obligations in respect of letters of credit
or bankers acceptances due and payable during such period, and (v) Indebtedness
of the type referred to above of another Person guaranteed by the Parent or any
of its Subsidiaries (provided, for the avoidance of doubt, any Indebtedness of
the Parent and its Subsidiaries consisting of derivative contracts shall not be
included in the calculation of this subparagraph (b)). Demand obligations shall
be deemed to be due and payable during any fiscal period during which such
obligations are outstanding.
Consolidated Total Funded Debt. With respect to the Parent and its
Subsidiaries, the sum, without duplication, of (a) the aggregate amount of
Indebtedness of the Parent and its Subsidiaries, on a consolidated basis,
relating to (i) the borrowing of money or the obtaining of credit, including the
issuance of notes or bonds, (ii) the deferred purchase price of assets (other
than trade payables incurred in the ordinary course of business), (iii) in
respect of any Synthetic Leases or any Capitalized Leases, and (iv) the maximum
drawing amount of all letters of credit outstanding in excess of aggregate
amount equal to $20,000,000, and bankers' acceptances plus (b) Indebtedness of
the type referred to in clause (a) of another Person guaranteed by the Parent or
any of its Subsidiaries. For the avoidance of doubt, any Indebtedness of the
Parent and its Subsidiaries consisting of derivative contracts shall not be
included as Consolidated Total Funded Debt.
Consolidated Total Interest Expense. For any period, the aggregate amount
of interest required to be paid or accrued by the Parent and its Subsidiaries
during such period on all Indebtedness of the Parent and its Subsidiaries
outstanding during all or any part of such period, whether such interest was or
is required to be reflected as an item of expense or capitalized, including
payments consisting of interest in respect of
-8-
any Capitalized Lease or any Synthetic Lease, and including commitment fees,
agency fees, facility fees, utilization fees, balance deficiency fees and
similar fees or expenses in connection with the borrowing of money.
Consolidated Total Liabilities. All liabilities of the Parent and its
Subsidiaries determined on a consolidated basis in accordance with GAAP and
classified as such on the consolidated balance sheet of the Parent and its
Subsidiaries and all other Indebtedness of the Parent and its Subsidiaries,
whether or not so classified.
Conversion Request. A notice given by a Borrower to the Administrative
Agent of such Borrower's election to convert or continue a Revolving Credit Loan
in accordance with ss.2.7.
Credit Agreement. This Revolving Credit Agreement, including the Schedules
and Exhibits hereto.
Debt Rating. At the relevant time of reference thereto, the rating issued
from time to time (whether on a preliminary basis or otherwise) by S&P or
Moody's or such other rating service or services as the Borrowers may designate
from time to time with the consent of the Required Lenders (each a "Successor
Rating Agency") with respect to unsecured Indebtedness of the Parent not
maturing within twelve (12) months, the repayment obligations of the Parent
thereunder are not supported or otherwise enhanced by any of other Person
(including, without limitation, supported by any letter of credit or other
instrument, agreement, or document issued by any other Person, and not
subordinated by its terms in right of payment to other unsecured Indebtedness of
the Parent (such Indebtedness, "Long Term Senior Debt").
Default. See ss.12.1.
Delinquent Lender. See ss.13.5.3.
Distribution. The declaration or payment of any dividend on or in respect
of any shares of any class of Capital Stock of the Parent or any of its
Subsidiaries, other than dividends payable solely in shares of common stock of
such Parent or Subsidiary; the purchase, redemption, defeasance, retirement or
other acquisition of any shares of any class of Capital Stock of the Parent or
any of its Subsidiaries, directly or indirectly through a Subsidiary of such
Person or otherwise (including the setting apart of assets for a sinking or
other analogous fund to be used for such purpose); the return of capital by the
Parent or any of its Subsidiaries to its shareholders as such; or any other
distribution on or in respect of any shares of any class of Capital Stock of the
Parent or any of its Subsidiaries.
Dollar Equivalent. On any particular date, with respect to any amount
denominated in Dollars, such amount in Dollars, and with respect to any amount
denominated in Euros, the amount (as conclusively ascertained by the
Administrative Agent absent manifest error) of Dollars which could be purchased
by the Administrative Agent (in accordance with its normal banking practices) in
the London foreign currency
-9-
deposit markets with such amount of such currency at the spot rate of exchange
prevailing at or about 11:00 a.m. (London time) on such date.
Dollars or $. Dollars in lawful currency of the United States of America.
Domestic Borrower. As defined in the preamble hereto.
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 Subsidiary. Any Subsidiary which is not a Foreign Subsidiary.
Drawdown Date. The date on which any Revolving Credit Loan is made or is
to be made, and the date on which any Revolving Credit Loan is converted or
continued in accordance with ss.2.7.
Dutch Companies. Collectively, the Foreign Borrower and Watts Ocean.
Effective Commitment Amount. See ss.14.9.
Election Request. See definition of "Foreign Guarantor".
Employee Benefit Plan. Any employee benefit plan within the meaning of
ss.3(3) of ERISA maintained or contributed to by the Parent or any ERISA
Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.
Environmental Laws. See ss.6.17(a).
EPA. See ss.6.17(b).
Equity Issuance. The sale or issuance by the Parent or any of its
Subsidiaries of any of its Capital Stock.
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Any Person which is treated as a single employer with the
Parent 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.
EURIBOR Rate. For any Interest Period with respect to a Eurocurrency Rate
Loan denominated in Euros, the rate of interest equal to (a) the per annum rate
determined by the Administrative Agent to be the rate at which deposits in Euro
appear on the Reuters Screen EURIBOR01 as of 11:00 a.m. (Brussels time) on the
date that is two (2) TARGET Settlement Days preceding the first day of such
Interest Period; provided,
-10-
that if such rate does not appear on the Reuters Screen EURIBOR01, the EURIBOR
Rate shall be an interest rate per annum equal to the arithmetic mean determined
by the Administrative Agent (rounded upwards to the nearest 0.01%) of the rates
per annum at which deposits in Euro are offered by three (3) major banks in the
Eurocurrency Interbank Market at approximately 11:00 a.m. (London time) on the
day that is two (2) TARGET Settlement Days preceding the first day of such
Interest Period to other leading banks in the Eurocurrency Interbank Market rate
at which deposits in Euro are offered, adjusted for reserves, divided by (b) a
number equal to 1.00 minus the Eurocurrency Reserve Rate, if applicable
Euro or e. The euro referred to in the Council Regulation (EC) No. 1103/97
dated 17 June 1997 passed by the Council of the European Union, or, if
different, the then lawful currency of the member states of the European Union
that participate in the third stage of the Economic and Monetary Union.
Euro Base Rate. The annual rate of interest announced from time to time by
the Swing Line Lender at its London branch as its "base rate" or "prime rate"
for loans denominated in Euros.
Euro Base Rate Loans. Swing Line Loans to the Foreign Borrower bearing
interest calculated by reference to the Euro Base Rate.
Eurocurrency Interbank Market. Any lawful recognized market in which
deposits of Dollars and Euros are offered by international banking units of
United States banking institutions and by foreign banking institutions to each
other and in which foreign currency and exchange operations or eurocurrency
funding operations are customarily conducted.
Eurocurrency Lending Office. Initially, the office of each 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 amounts denominated in Euros, the
EURIBOR Rate, and (b) with respect to amounts denominated in Dollars, the LIBOR
Rate.
Eurocurrency Rate Loans. Revolving Credit Loans bearing interest
calculated by reference to the Eurocurrency Rate.
Eurocurrency Reserve Rate. For any day with respect to a Eurocurrency Rate
Loan, the maximum rate (expressed as a decimal) at which any bank 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.
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Euro Notice. See ss.2.10.1.
Event of Default. See ss.12.1.
Existing Credit Agreement. The Amended and Restated Revolving Credit and
Term Loan Agreement, dated as of March 27, 1998, by and among the Parent, WIC,
the Domestic Borrower, the "Banks" party thereto and defined therein and Fleet
National Bank (f/k/a BankBoston, N.A.), as administrative agent and competitive
bid agent, as amended and in effect from time to time.
Facility Fee. See ss.2.2.1.
Fee Letter. The fee letter, dated on or prior to the Closing Date, among
the Borrowers, the Administrative Agent and the Arranger, as amended and in
effect from time to time.
Fees. Collectively, the Facility Fee, the Utilization Fee, the
Administrative Agent's Fee and the Closing Fee.
Financial Affiliate. A Subsidiary of the bank holding company controlling
any Lender, which Subsidiary is engaging in any of the activities permitted
byss.4(e) of the Bank Holding Company Act of 1956 (12 U.S.C.ss.1843).
Fixed Charge Coverage Ratio. As of any date of determination, the ratio of
(a) Consolidated Operating Cash Flow for the Reference Period most recently
ended to (b) Consolidated Total Debt Service for such Reference Period;
provided, however, when calculating the Fixed Charge Coverage Ratio for any
period in which a Permitted Acquisition has occurred, the calculation of the
Fixed Charge Coverage Ratio shall be made on a Pro Forma Basis.
Fleet. Fleet National Bank, a national banking association, in its
individual capacity and, for purposes of making any Revolving Credit Loans to
the Foreign Borrower, if so directed by Fleet, Fleet Bank (Europe) Ltd., in its
individual capacity.
Foreign Borrower. As defined in the preamble hereto.
Foreign Guarantor. Collectively, (a) each Foreign Subsidiary of the Parent
or any Borrower existing on the Closing Date and set forth on Schedule 2 hereto
and (b) any Foreign Subsidiary of the Parent which shall have delivered to the
Administrative Agent an election to become a Foreign Guarantor, in substantially
the form of Exhibit E hereto (the "Election Request"), duly executed by such
Foreign Subsidiary, the Parent and the Borrowers and which Election Request
shall have been approved in writing by the Required Lenders, provided, as to
Watts Eurotherm, Watts GRC and Watts Intermes, such Election Request shall only
be required to be approved by the Administrative Agent.
-12-
Foreign Subsidiary. Any Subsidiary that is organized under the laws of a
jurisdiction other than the United States of America and the States (or the
District of Columbia) thereof.
GAAP or generally accepted accounting principles. (a) When used in ss.9,
whether directly or indirectly through reference to a capitalized term used
therein, means (i) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal period ended on the Balance Sheet Date,
and (ii) to the extent consistent with such principles, the accounting practice
of the Parent reflected in its financial statements for the fiscal period ended
on the Balance Sheet Date, and (b) when used in general, other than as provided
above, means principles that are (i) consistent with the principles promulgated
or adopted by the Financial Accounting Standards Board and its predecessors, as
in effect from time to time, and (ii) consistently applied with past financial
statements of the Parent adopting the same principles, provided that in each
case referred to in this definition of "GAAP" a certified public accountant
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 and all shareholder agreements, voting
trusts and similar arrangements applicable to any of its Capital Stock.
Governmental Authority. Any foreign, federal, state, regional, local,
municipal or other government, or any department, commission, board, bureau,
agency, public authority or instrumentality thereof, or any court or any other
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to any government.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of ss.3(2) of ERISA maintained or contributed to by the Parent 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.
Guaranties. Collectively, (a) the Guaranties, dated or to be dated on or
prior to the Closing Date made by the Guarantors in favor of the Lenders and the
Administrative Agent, and (b) the Guaranties dated as of the date required by
ss.7.15 hereof made by the applicable Guarantors in favor of the Lenders and the
Administrative Agent, and in each case pursuant to which each Guarantor
guaranties to the Lenders and the Administrative Agent the payment and
performance of the Obligations and in form and substance satisfactory to the
Lenders and the Administrative Agent.
Guarantors. Collectively, (a) the Parent, (b) WIC, (c) each Material
Domestic Subsidiary of WIC existing on the Closing Date other than the Domestic
Borrower, (d) each Foreign Subsidiary of the Parent or any Borrower existing on
the Closing Date and set forth on Schedule 2 hereto, and (e) each other
Subsidiary of the Parent which elects to
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or is otherwise required to become a Guarantor from time to time pursuant to
ss.7.15. Each such Person shall be a party to a Guaranty.
Hazardous Substances. See ss.6.17(b).
Hedging Agreement. Any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate futures contract,
interest rate option agreement, interest rate exchange agreement, forward
currency exchange agreement, forward rate currency agreement or other similar
agreement or arrangement to which the Parent or any of its Subsidiaries and any
Lender is a party, designed to protect the Parent or any of its Subsidiaries
against fluctuations in interest rates, exchange rates or forward rates.
Horne Investors. As such term is defined in the definition of "Change of
Control".
Immaterial Domestic Subsidiary. Any Domestic Subsidiary of the Parent
which is not a Material Domestic Subsidiary.
Indebtedness. As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:
(a) every obligation of such Person for money borrowed,
(b) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or businesses,
(c) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for
the account of such Person,
(d) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (including securities
repurchase agreements but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business which are not
overdue or which are being contested in good faith),
(e) every obligation of such Person under any Capitalized Lease,
(f) every obligation of such Person under any Synthetic Lease,
(g) all sales by such Person of (i) accounts or general intangibles
for money due or to become due, (ii) chattel paper, instruments or
documents creating or evidencing a right to payment of money or (iii)
other receivables (collectively "receivables"), whether pursuant to a
purchase facility or otherwise, other than in connection with the
disposition of the business operations of such
-14-
Person relating thereto or a disposition of defaulted receivables for collection
and not as a financing arrangement, and together with any obligation of such
Person to pay any discount, interest, fees, indemnities, penalties, recourse,
expenses or other amounts in connection therewith,
(h) every obligation of such Person (an "equity related purchase
obligation") to purchase, redeem, retire or otherwise acquire for value
any shares of Capital Stock issued by such Person or any rights measured
by the value of such Capital Stock,
(i) every obligation of such Person under any forward contract,
futures contract, swap, option or other financing agreement or arrangement
(including, without limitation, caps, floors, collars and similar
agreements), the value of which is dependent upon interest rates, currency
exchange rates, commodities or other indices (a "derivative contract"),
(j) every obligation in respect of Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to
the extent that such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity,
except to the extent that the terms of such Indebtedness provide that such
Person is not liable therefor and such terms are enforceable under
applicable law,
(k) every obligation, contingent or otherwise, of such Person
guaranteeing, or having the economic effect of guarantying or otherwise
acting as surety for, any obligation of a type described in any of clauses
(a) through (j) (the "primary obligation") of another Person (the "primary
obligor"), in any manner, whether directly or indirectly, and including,
without limitation, any obligation of such Person (i) to purchase or pay
(or advance or supply funds for the purchase of) any security for the
payment of such primary obligation, (ii) to purchase property, securities
or services for the purpose of assuring the payment of such primary
obligation, or (iii) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such primary obligation.
The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by (t) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with GAAP, (u) any
Capitalized Lease shall be the principal component of the aggregate of the
rentals obligation under such Capitalized Lease payable over the term thereof
that is not subject to termination by the lessee, (v) any sale of receivables
shall be the amount of unrecovered capital or principal investment of the
purchaser (other than the Borrowers or any of their wholly owned Subsidiaries)
thereof, excluding amounts representative of yield or interest earned on such
investment, (w) any Synthetic Lease shall be the stipulated loss value,
termination value or other equivalent amount, (x) any derivative contract shall
be the maximum amount of any termination or loss payment required to be paid by
such Person if such
-15-
derivative contract were, at the time of determination, to be terminated by
reason of any event of default or early termination event thereunder, whether or
not such event of default or early termination event has in fact occurred, (y)
any equity related purchase obligation shall be the maximum fixed redemption or
purchase price thereof inclusive of any accrued and unpaid dividends to be
comprised in such redemption or purchase price and (z) any guaranty or other
contingent liability referred to in clause (k) shall be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
guaranty or other contingent obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
Indenture Debt. Unsecured Indebtedness of the Parent permitted byss.8.1(c)
and evidenced by the Indenture Debt Documents.
Indenture Debt Documents. Collectively, the Senior Note Indenture, the
Senior Notes and any amendments, supplements or modifications thereto permitted
by ss.8.1(c) (including the Referenced Indenture Debt Documents).
Ineligible Securities. Securities which may not be underwritten or dealt
in by member banks of the Federal Reserve System under Section 16 of the Banking
Act of 1933 (12 U.S.C.ss.24, Seventh), as amended.
Interest Payment Date. (a) As to any Base Rate Loan or Euro Base Rate
Loan, the last day of the calendar quarter with respect to interest accrued
during such calendar quarter, including, without limitation, the calendar
quarter which includes the Drawdown Date of such Base Rate Loan or Euro Base
Rate Loan, as the case may be; and (b) as to any Eurocurrency Rate Loan in
respect of which the Interest Period is (i) three (3) months or less, the last
day of such Interest Period and (ii) more than three (3) months, the date that
is three (3) months from the first day of such Interest Period and, in addition,
the last day of such Interest Period.
Interest Period. With respect to each Revolving Credit Loan, (a)
initially, the period commencing on the Drawdown Date of such Revolving Credit
Loan and ending on the last day of one of the periods set forth below, as
selected by the Borrowers in a Loan Request or as otherwise required by the
terms of this Credit Agreement (i) for any Base Rate Loan or Euro Base Rate
Loan, the last day of the calendar quarter; and (ii) for any Eurocurrency Rate
Loan, one (1), two (2), three (3) or six (6) months; and (b) thereafter, each
period commencing on the last day of the then ending Interest Period applicable
to such Revolving Credit Loan and ending on the last day of one of the periods
set forth above, as selected by the Borrowers in a Conversion Request; provided
that all of the foregoing provisions relating to Interest Periods are subject to
the following:
(A) if any Interest Period with respect to a Eurocurrency Rate Loan
would otherwise end on a day that is not a Business Day, that Interest
Period shall be extended to the next succeeding Business Day unless the
result of such
-16-
extension would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the immediately
preceding Business Day;
(B) if any Interest Period with respect to a Base Rate Loan or Euro
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 Borrowers shall fail to give notice as provided in
ss.2.7, (i) for Revolving Credit Loans denominated in Dollars, the
Borrowers shall be deemed to have requested a conversion of the affected
Eurocurrency Rate Loan to a Base Rate Loan and the continuance of all Base
Rate Loans as Base Rate Loans on the last day of the then current Interest
Period with respect thereto and (ii) for Revolving Credit Loans
denominated in Euros, the Foreign Borrower shall be deemed to have
requested a continuation of such Revolving Credit Loan as such on the last
day of the then current Interest Period with respect thereto for an
Interest Period of one (1) month;
(D) subject to paragraph (A) above, any Interest Period relating to
any Eurocurrency Rate Loan that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(E) any Interest Period that would otherwise extend beyond the
Revolving Credit Loan Maturity Date shall end on the Revolving Credit Loan
Maturity Date.
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (d) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
Lender Affiliate. (a) With respect to any Lender, (i) an Affiliate of such
Lender or (ii) any entity (whether a corporation, partnership, limited liability
company, trust or
-17-
legal entity) that is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary course
of its business and is administered or managed by such Lender or an Affiliate of
such Lender and (b) with respect to any Lender that is a fund which invests in
bank loans and similar extensions of credit, any other entity (whether a
corporation, partnership, limited liability company, trust or other legal
entity) that is a fund that invests in bank loans and similar extensions of
credit and is managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
Lender Increase Notice. See ss.14.9.
Lenders. Fleet and the other lending institutions listed on Schedule 1
hereto and any other Person who becomes an assignee of any rights and
obligations of a Lender pursuant to ss.14.
Leverage Adjustment Date. The first day of the month immediately following
the month in which a Compliance Certificate is to be delivered by the Parent
pursuant to ss.7.4(c).
Leverage Ratio. As at any date of determination, the ratio of (a)
Consolidated Total Funded Debt outstanding on such date to (b) Consolidated
EBITDA for the Reference Period ending on such date; provided, however, when
calculating the Leverage Ratio for any period in which a Permitted Acquisition
has occurred, the calculation of the Leverage Ratio shall be made on a Pro Forma
Basis.
LIBOR Rate. For any Interest Period with respect to a Eurocurrency Rate
Loan denominated in Dollars, the rate of interest equal to (a) the rate
determined by the Administrative Agent at which Dollar deposits for such
Interest Period are offered based on information presented on Telerate Page 3750
as of 11:00 a.m. (London time) on the second LIBOR Business Day prior to the
first day of such Interest Period, divided by (b) a number equal to 1.00 minus
the Eurocurrency Reserve Rate. If the rate described above does not appear on
the Telerate System on any applicable interest determination date, the LIBOR
Rate shall be the rate (rounded upward, if necessary, to the nearest one
hundred-thousandth of a percentage point), determined on the basis of the
offered rates for deposits in Dollars for a period of time comparable to such
LIBOR Rate Loan which are offered by four (4) major banks in the London
interbank market at approximately 11:00 a.m. (London time) on the second
Business Day prior to the first day of such Interest Period as selected by the
Administrative Agent. The principal London office of each of the four (4) major
London banks will be requested to provide a quotation of its Dollar deposit
offered rate. If at least two (2) such quotations are provided, the rate for
that date will be the arithmetic mean of the quotations. If fewer than two (2)
quotations are provided as requested, the rate for that date will be determined
on the basis of the rates quoted for loans in Dollars to leading European banks
for a period of time comparable to such Interest Period offered by major banks
in New York City at approximately 11:00 a.m. (New York City time) on the second
Business Day prior to the first day of such Interest Period. In the event that
the Administrative Agent is unable to
-18-
obtain any such quotation as provided above, it will be considered that LIBOR
Rate pursuant to a Eurocurrency Rate Loan denominated in Dollars cannot be
determined.
Lien. Any mortgage, deed of trust, security interest, pledge,
hypothecation, assignment, attachment, deposit arrangement, encumbrance, lien
(statutory, judgment or otherwise), or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement, any Capitalized Lease, any Synthetic Lease, any
financing lease involving substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the Uniform Commercial
Code or comparable law of any jurisdiction).
Loan Documents. This Credit Agreement, the Revolving Credit Notes, the
Guaranties and the Fee Letter.
Loan Request. See ss.2.6.
Long Term Senior Debt. See definition of "Debt Rating".
Mandatory Costs. With respect to any Lender or the Administrative Agent,
any cost of compliance by such Lender or the Administrative Agent with (a) the
requirements of the Bank of England and/or the Financial Services Authority (or,
in either case, any other authority which replaces all or any of its functions)
and/or (b) the requirements of the European Central Bank.
Margin Modification Date. The date on which the Parent either (a) repays
the Indenture Debt evidenced by the Senior Note Indenture without the proceeds
of refinancing indebtedness or (b) refinances the Indenture Debt evidenced by
the Senior Note Indenture and the Senior Notes with the proceeds of a private
Indebtedness issuances for which no Debt Rating is available and, as a result of
such repayment or refinancing, as the case may be, the Parent ceases to have a
Debt Rating issued by either S&P or Moody's.
Material 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):
(a) a material adverse effect on the business, properties, condition
(financial or otherwise), assets, operations or income of the Parent or any
Borrower, individually or the Parent and its Subsidiaries, taken as a whole;
(b) an adverse effect on the ability of the Parent or any of its
Subsidiaries, individually and taken as a whole, to perform any of their
respective Obligations under any of the Loan Documents to which it is a party;
or
(c) any impairment of the validity, binding effect or enforceability of
this Credit Agreement or any of the other Loan Documents, any impairment of the
rights, remedies
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or benefits available to the Administrative Agent or any Lender under any Loan
Document.
Material Domestic Subsidiary. As at any date of determination, any
Domestic Subsidiary of the Parent with respect to which any of the following
criteria has been met: (a) the aggregate revenue generated by such Domestic
Subsidiary equals or exceeds an amount equal to one percent (1%) of the
consolidated aggregate revenues generated by the Parent and its Subsidiaries for
the period of four (4) consecutive fiscal quarters most recently ended, (b) the
aggregate book value of the assets of such Domestic Subsidiary equals or exceeds
one percent (1%) of the then current book value of all of the assets of the
Parent and its Subsidiaries, (c) whose assets exceed $5,000,000 in aggregate
book value, or (d) the Administrative Agent in its reasonable discretion, deems
such Domestic Subsidiary to be material. A Domestic Subsidiary that is a
Material Domestic Subsidiary at any date pursuant to this definition shall
continue to be or be deemed to be a Material Domestic Subsidiary at all times
thereafter, without regard to the results of any future re-determination
pursuant to this definition.
Moody's. Moody's Investors Services, Inc.
Multiemployer Plan. Any multiemployer plan within the meaning ofss.3(37)
of ERISA maintained or contributed to by the Parent or any ERISA Affiliate.
Net Cash Equity Issuance Proceeds. With respect to any Equity Issuance,
the excess of the gross cash proceeds received by such Person for such Equity
Issuance after deduction of all reasonable transaction expenses (including,
without limitation, underwriting discounts and commissions) incurred in
connection with such a sale or other issuance.
Net Cash Sale Proceeds. The net cash proceeds received by a Person in
respect of any Asset Sale, less the sum of (a) all reasonable out-of-pocket
fees, commissions and other reasonable direct expenses actually incurred in
connection with such Asset Sale, including the amount of any transfer or
documentary taxes required to be paid by such Person in connection with such
Asset Sale, and (b) the aggregate amount of cash so received by such Person
which is required to be used to retire (in whole or in part) any Indebtedness
(other than under the Loan Documents) of such Person permitted by this Credit
Agreement that was secured by a lien or security interest permitted by this
Credit Agreement with respect to such assets transferred and which is required
to be repaid in whole or in part (which repayment, in the case of any other
revolving credit arrangement or multiple advance arrangement, reduces the
commitment thereunder) in connection with such Asset Sale.
Obligations. All indebtedness, obligations and liabilities of the Parent
and its Subsidiaries to any of the Lenders and the Administrative Agent,
individually or collectively, existing on the date of this Credit Agreement or
arising thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Credit Agreement or any of the other Loan Documents or
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any Hedging Agreement or in respect of any of the Revolving Credit Loans made or
any of the Revolving Credit Notes or other instruments at any time evidencing
any thereof.
Other Labor Regulations. See ss.7.13.
outstanding. With respect to the Revolving Credit Loans, the aggregate
unpaid principal thereof as of any date of determination.
Overnight Rate. For any day (a) as to Revolving Credit Loans denominated
in Dollars, the weighted average interest rate paid by the Administrative Agent
for federal funds acquired by the Administrative Agent, and (b) as to Revolving
Credit Loans denominated in Euros, the rate of interest per annum at which
overnight deposits in the Euro, in an amount approximately equal to the amount
with respect to which such rate is being determined, would be offered for such
day by the Administrative Agent to major banks in the London interbank market.
Parent. As defined in the preamble hereto.
PBGC. The Pension Benefit Guaranty Corporation created byss.4002 of ERISA
and any successor entity or entities having similar responsibilities.
Permitted Acquisition. See ss.8.5.1.
Permitted Liens. Liens permitted by ss.8.2.
Person. Any individual, corporation, limited liability company
partnership, limited liability partnership, trust, other unincorporated
association, business, or other legal entity, and any Governmental Authority.
Pro Forma Basis. Following any proposed Permitted Acquisition, the
Consolidated Total Debt Service, Consolidated Total Funded Debt (or, in the case
of Consolidated Total Interest Expense, all Indebtedness), Consolidated EBITDA
and Capital Expenditures for the fiscal quarter in which such Permitted
Acquisition occurred and each of the three Fiscal quarters immediately following
such Permitted Acquisition being calculated with reference to the audited
historical financial results of Person so acquired together with any interim
financial results of such Person so acquired prepared since the date of the last
audited financial statements and prepared in a manner consistent with past
practices (or, to the extent such Person so acquired has no audited historical
financial results, the management prepared financial results of such Person so
acquired, with such results to be in form and substance reasonably acceptable to
the Administrative Agent), and the Parent and its Subsidiaries for the
applicable Test Period after giving effect on a pro forma basis to such
Permitted Acquisition (and assuming that such Permitted Acquisition had been
consummated at the beginning of such Test Period) in the manner described in
(i), (ii) and (iii) below; provided, however, that, in each case, in the event
that either no historical financial results are available with respect to the
Person to be acquired, the Person to be acquired is not a separate legal entity,
the Parent or Subsidiary effecting the acquisition is acquiring only assets of
another Person
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or, in the Administrative Agent's reasonable discretion it determines the
historical financial results do not adequately reflect the financial results of
the Person or assets to be acquired, such calculations shall be made with
reference to reasonable estimates of such past performance made by the Parent
based on existing data and other available information, such estimates to be
acceptable to the Administrative Agent:
(i) all Indebtedness (whether under this Credit Agreement or
otherwise) and any other balance sheet adjustments incurred or made in
connection with the Permitted Acquisition shall be deemed to have been
incurred or made on the first day of the Test Period, and all Indebtedness
of the Acquired Party or to be acquired in such Permitted Acquisition
which was or will have been repaid in connection with the consummation of
the Permitted Acquisition shall be deemed to have been repaid concurrently
with the deemed incurrence of the Indebtedness incurred in connection with
the Permitted Acquisition;
(ii) all Indebtedness assumed to have been incurred pursuant to the
preceding clause (i) shall be deemed to have borne interest at the sum of
(a) the arithmetic mean of (x) the LIBOR Rate for Eurocurrency Rate Loans
denominated in Dollars having an Interest Period of one month in effect on
the first day of the Test Period and (y) the LIBOR Rate for Eurocurrency
Rate Loans denominated in Dollars having an Interest Period of one month
in effect on the last day of the Test Period plus (b) the Applicable
Margin for the applicable Type of Loans then in effect (after giving
effect to the Permitted Acquisition on a Pro Forma Basis); and
(iii) other reasonable cost savings, expenses and other income
statement or operating statement adjustments which are attributable to the
change in ownership and/or management resulting from such Permitted
Acquisition as may be approved by the Administrative Agent in writing
shall be deemed to have been realized on the first day of the Test Period.
Rate Adjustment Period. As defined in the definition of "Applicable
Margin".
Rate of Exchange. See ss.2.10.2.
RCRA. See ss.6.17(a).
Real Estate. All real property at any time owned or leased (as lessee or
sublessee) by any of the Borrowers or any of its Subsidiaries.
Record. The grid attached to a Revolving Credit Note, or the continuation
of such grid, or any other similar record, including computer records,
maintained by any Lender with respect to any Revolving Credit Loan referred to
in such Revolving Credit Note.
-22-
Reference Period. As of any date of determination, the period of four (4)
consecutive fiscal quarters of the Parent and its Subsidiaries ending on such
date, or if such date is not a fiscal quarter end date, the period of four (4)
consecutive fiscal quarters most recently ended (in each case treated as a
single accounting period).
Refinanced Indenture Debt. See ss.8.1(c).
Refinanced Indenture Debt Documents. Collectively, each of the promissory
notes, instruments and other documents evidencing any of the Refinanced
Indenture Debt, each of which shall be in form and substance satisfactory to the
Lenders.
Register. See ss.14.3.
Release. See ss.6.17(c).
Required Lenders. As of any date, (a) if there are fewer than three (3)
Lenders on such date, all the Lenders and (b) if there are three (3) or more
Lenders on such date, the Lenders holding an aggregate of at least fifty-one
percent (51%) of the outstanding principal amount of the Revolving Credit Notes
on such date; and if no such principal is outstanding, the Lenders whose
aggregate Commitments constitutes at least fifty-one percent (51%) of the Total
Commitment.
Restricted Payment. In relation to the Parent and its Subsidiaries, any
(a) Distribution, (b) payment or prepayment by the Parent or its Subsidiaries to
(i) the Parent's or any Subsidiary's shareholders (or other equity holders) or
(ii) any Affiliate of the Parent or any Subsidiary or any Affiliate of the
Parent's or such Subsidiary's shareholders (or other equity holders), in each
case other than a payment to the Domestic Borrower, (c) derivatives or other
transactions with any financial institution, commodities or stock exchange or
clearinghouse (a "Derivatives Counterparty") obligating the Parent or any of its
Subsidiaries to make payments to such Derivatives Counterparty as a result of
any change in market value of any Capital Stock of the Parent or such Subsidiary
or (d) payment in respect of any phantom stock or similar interests.
Revolving Credit Loan Maturity Date. February 28, 2005.
Revolving Credit Loans. Revolving credit loans made or to be made by the
Lenders to the Borrower pursuant to ss.2.
Revolving Credit Notes. See ss.2.4.
Sale and Leaseback Transaction. See ss.8.6.
Same Day Funds. With respect to disbursements and payments in (a) Dollars,
immediately available funds, and (b) Euros, same day or other funds as may be
determined by the Administrative Agent to be customary in the place of
disbursement or payment for the settlement of international banking transactions
in Euros.
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SARA. See ss.6.17(a).
Senior Note Indenture. That certain Indenture, dated as of December 1,
1991, between the Parent and The First National Bank of Boston, as Trustee.
Senior Notes. Collectively, the 8 3/8% Notes Due 2003 in the initial
aggregate principal amount of $75,000,000 issued pursuant to the terms and
conditions of the Senior Note Indenture.
Settlement. The making or receiving of payments, in Same Day Funds, by the
Lenders, to the extent necessary to cause each Lender's actual share of the
outstanding amount of Revolving Credit Loans (after giving effect to any Loan
Request) to be equal to such Lender's Commitment Percentage of the outstanding
amount of such Revolving Credit Loans (after giving effect to any Loan Request),
in any case where, prior to such event or action, the actual share is not so
equal.
Settlement Amount. See ss.2.9.1.
Settlement Date. (a) Any Business Day so requested by the Administrative
Agent, and if no request has been made, the date which is the thirtieth (30th)
Business Day following the Drawdown Date of the applicable Swing Line Loan made
to the applicable Borrower pursuant to ss.2.6.2, (b) at the option of the
Administrative Agent, on any Business Day following a day on which the account
officers of the Administrative Agent active upon the Borrowers' account become
aware of the existence of an Event of Default, (c) any Business Day on which the
amount of Revolving Credit Loans outstanding from Fleet is equal to or greater
than Fleet's Commitment Percentage of the Total Commitment, or (d) as to a Swing
Line Loan to the Domestic Borrower, any day on which any conversion of a Base
Rate Loan to a Eurocurrency Rate Loan occurs.
Settling Lender. See ss.2.9.1.
S&P. Standard & Poor's Ratings Group.
Subsidiary. Any corporation, 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.
Successor Rating Agency. See definition of "Debt Rating".
Swing Line Lender. Fleet.
Swing Line Loans. See ss.2.6.2.
Synthetic Lease. Any lease of goods or other property, whether real or
personal, which is treated as an operating lease under GAAP and as a loan or
financing for U.S. income tax purposes.
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TARGET Settlement Day. Any day on which the Trans-European Automated
Real-Time Gross Settlement Transfer (TARGET) System is open.
Test Period. The period of all fiscal quarters (and any portion of a
fiscal quarter) included in any covenant calculation and occurring prior to the
date of such Permitted Acquisition as set forth in the definition of "Pro Forma
Basis".
Total Commitment. The sum of the Commitments of the Lenders, as in effect
from time to time.
Type. As to any Revolving Credit Loan, its nature as a Base Rate Loan or a
Eurocurrency Rate Loan.
Utilization Fee. See ss.2.2.2.
Utilized Amount. As of any date of determination, the aggregate amount of
the Revolving Credit Loans (including, without limitation, the Swing Line Loans)
outstanding on such date.
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.
Watts Cazzaniga. Watts Cazzaniga S.p.A., a private company with limited
liability organized under the laws of Italy and a wholly owned Subsidiary of the
Parent.
Watts Eurotherm. Watts Eurotherm SA, a private company with limited
liability organized under the laws of France and a wholly-owned Subsidiary of
the Parent.
Watts Germany. Watts MTR GmbH Germany, a private company with limited
liability organized under the laws of Germany and a wholly-owned Subsidiary of
the Parent.
Watts GRC. Watts GRC Control SA, a private company with limited liability
organized under the laws of Spain and a wholly-owned Subsidiary of the Parent.
Watts Intermes. Watts Intermes S.r.l., a private company with limited
liability organized under the laws of Italy and a wholly owned Subsidiary of the
Parent.
Watts Ocean. Watts Ocean, a private company with limited liability
organized under the laws of The Netherlands and a wholly owned Subsidiary of the
Parent.
WIC. Watts Investment Company, a Delaware corporation and a wholly owned
Subsidiary of the Parent.
1.2. Rules of Interpretation.
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(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to
time in accordance with its terms and the terms of this Credit Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to
such law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by GAAP applied on a consistent basis by the accounting
entity to which they refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by GAAP, which
terms are defined in the Uniform Commercial Code as in effect in the
Commonwealth of Massachusetts, have the meanings assigned to them therein,
with the term "instrument" being that defined under Article 9 of the
Uniform Commercial Code.
(h) Reference to a particular "ss." refers to that section of this
Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Credit Agreement as a whole and not to any
particular section or subdivision of this Credit Agreement.
(j) Unless otherwise expressly indicated, in the computation of
periods of time from a specified date to a later specified date, the word
"from" means "from and including," the words "to" and "until" each mean
"to but excluding," and the word "through" means "to and including."
(k) This Credit Agreement and the other Loan Documents may use
several different limitations, tests or measurements to regulate the same
or similar matters. All such limitations, tests and measurements are,
however, cumulative and are to be performed in accordance with the terms
thereof.
(l) This Credit Agreement and the other Loan Documents are the
result of negotiation among, and have been reviewed by counsel to, among
others, the Administrative Agent, the Parent and the Borrowers and are the
product of discussions and negotiations among all parties. Accordingly,
this Credit Agreement and the other Loan Documents are not intended to be
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construed against the Administrative Agent or any of the Lenders merely on
account of the Administrative Agent's or any Lender's involvement in the
preparation of such documents.
(m) Unless otherwise expressly indicated, each reference to a
specific amount denominated in Dollars shall also be deemed to be a
reference to the Dollar Equivalent of such amount.
2. THE REVOLVING CREDIT FACILITY.
2.1. Commitment to Lend. Subject to the terms and conditions set forth in
this Credit Agreement, each of the Lenders severally agrees to lend to the
Borrowers and the Borrowers may borrow, repay, and reborrow from time to time
from the Closing Date up to but not including the Revolving Credit Loan Maturity
Date upon notice by the Borrowers to the Administrative Agent given in
accordance with ss.2.6.1, such sums in Dollars or, solely with respect to
borrowings by (and at the request of) the Foreign Borrower and subject to
ss.2.10, Euros, as are requested by the Borrowers up to a maximum aggregate
amount outstanding (after giving effect to all amounts requested) at any one
time equal to such Lender's Commitment; provided that the outstanding amount of
the Revolving Credit Loans (after giving effect to all amounts requested) shall
not at any time exceed the Total Commitment at such time; and provided, further,
that the aggregate outstanding amount of the Revolving Credit Loans borrowed by
the Foreign Borrower shall not at any time exceed $50,000,000. The Revolving
Credit Loans shall be made pro rata in accordance with each Lender's Commitment
Percentage. Each request for a Revolving Credit Loan hereunder shall constitute
a representation and warranty by the Borrowers that the conditions set forth in
ss.10 and ss.11, in the case of the initial Revolving Credit Loans to be made on
the Closing Date, and ss.11, in the case of all other Revolving Credit Loans,
have been satisfied on the date of such request. Each Base Rate Loan shall be
denominated in Dollars, and each Eurocurrency Rate Loan shall be denominated in
Dollars, or subject to ss.2.10, in Euros.
2.2. Facility Fee; Utilization Fee.
2.2.1. Facility Fee. The Borrowers jointly and severally agree to
pay to the Administrative Agent for the accounts of the Lenders in
accordance with their respective Commitment Percentages a facility fee
(the "Facility Fee") calculated daily on the Total Commitment in effect on
such date at the rate per annum of the Applicable Margin with respect to
the Facility Fee as in effect from time to time. The Facility Fee shall be
payable quarterly in arrears on the first day of each calendar quarter for
the immediately preceding calendar quarter commencing on the first such
date following the date hereof, with a final payment on the Revolving
Credit Loan Maturity Date or any earlier date on which the Commitments
shall terminate.
2.2.2. Utilization Fee. The Borrowers jointly and severally agree to
pay to the Administrative Agent for the accounts of the Lenders in
accordance with their respective Commitment Percentages a utilization fee
(the "Utilization Fee")
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calculated daily on the Utilized Amount at the per annum rate equal to
0.125% for each day on which the Utilized Amount exceeds the product of
(a) 0.50 multiplied by (b) the Total Commitment as in effect on such date.
The Utilization Fee shall be payable quarterly in arrears on the first day
of each calendar quarter for the immediately preceding calendar quarter
commencing on the first such date following the Closing Date, with a final
payment on the Revolving Credit Loan Maturity Date or any earlier date on
which the Commitments shall terminate.
2.3. Reduction of Total Commitment. The Borrowers shall have the right at
any time and from time to time upon five (5) Business Days prior written notice
to the Administrative Agent to reduce by $1,000,000 or an integral multiple
thereof or to terminate entirely the Total Commitment, whereupon the Commitments
of the Lenders shall be reduced pro rata in accordance with their respective
Commitment Percentages of the amount specified in such notice or, as the case
may be, terminated. Promptly after receiving any notice of the Borrower
delivered pursuant to this ss.2.3, the Administrative Agent will notify the
Lenders of the substance thereof. Upon the effective date of any such reduction
or termination, the Borrower shall pay to the Administrative Agent for the
respective accounts of the Lenders the full amount of any Facility Fee then
accrued on the amount of the reduction. No reduction or termination of the
Commitments may be reinstated.
2.4. The Revolving Credit Notes. The Revolving Credit Loans shall be
evidenced by separate promissory notes of the Borrowers in substantially the
form of Exhibit A hereto (each a "Revolving Credit Note"), dated as of the
Closing Date (or such other date on which a Lender may become a party hereto in
accordance with ss.14 hereof) and completed with appropriate insertions. One
Revolving Credit Note shall be payable to the order of each Lender in a
principal amount equal to such Lender's Commitment or, if less, the outstanding
amount of all Revolving Credit Loans made by such Lender, plus interest accrued
thereon, as set forth below. Each Borrower irrevocably authorizes each Lender to
make or cause to be made, at or about the time of the Drawdown Date of any
Revolving Credit Loan or at the time of receipt of any payment of principal on
such Lender's Revolving Credit Note, an appropriate notation on such Record
reflecting the making of such Revolving Credit Loan or (as the case may be) the
receipt of such payment. The outstanding amount of the Revolving Credit Loans
set forth on such Lender's Record 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 such Lender's Record shall not
limit or otherwise affect the obligations of the Borrower hereunder or under any
Revolving Credit Note to make payments of principal of or interest on any
Revolving Credit Note when due.
2.5. Interest on Revolving Credit Loans. Except as otherwise provided
in ss.4.11,
(a) Each Revolving Credit Loan which is a Base Rate Loan shall bear
interest for the period commencing with the Drawdown Date thereof and
ending on the last day of the Interest Period with respect thereto at the
rate per annum
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equal to the Base Rate plus the Applicable Margin with respect to Base
Rate Loans as in effect from time to time.
(b) Each Revolving Credit Loan which is a Eurocurrency Rate Loan
shall bear interest for the period commencing with the Drawdown Date
thereof and ending on the last day of the Interest Period with respect
thereto at the rate per annum equal to the Eurocurrency Rate determined
for such Interest Period plus the Applicable Margin with respect to
Eurocurrency Rate Loans as in effect from time to time.
(c) Each Revolving Credit Loan which is a Euro Base Rate Loan shall
bear interest for the period commencing with the Drawdown Date thereof and
ending on the last day of the Interest Period with respect thereto at the
rate per annum equal to the Euro Base Rate plus the greater of (i) one
percent (1%) and (ii) the Applicable Margin with respect to Euro Base Rate
Loans as in effect from time to time.
Each Borrower promises to pay interest on each Revolving Credit Loan made
to it (and the Domestic Borrower promises to pay interest on all the Revolving
Credit Loans) in arrears on each Interest Payment Date with respect thereto.
Interest on the Revolving Credit Loans calculated by reference to the Base Rate
shall be payable in Dollars, interest on the Revolving Credit Loans calculated
by reference to the Eurocurrency Rate and which are denominated in Dollars shall
be payable in Dollars, and interest on the Revolving Credit Loans calculated by
reference to the Eurocurrency Rate and which are denominated in Euros shall be
payable in Euros.
2.6. Requests for Revolving Credit Loans.
2.6.1. General. The applicable Borrower shall give to the
Administrative Agent written notice in the form of Exhibit B hereto (or
telephonic notice confirmed in a writing in the form of Exhibit B hereto)
of each Revolving Credit Loan requested hereunder (a "Loan Request") no
later than (a) 10:00 a.m. (Boston time) on the proposed Drawdown Date of
any Base Rate Loan, (b) 10:00 a.m. (Boston time) on the third Business Day
prior to the proposed Drawdown Date of any Eurocurrency Rate Loan to be
denominated in Dollars and (c) 10:00 a.m. (Boston time) on the fifth
Business Day prior to the proposed Drawdown Date of any Eurocurrency Rate
Loan to be denominated in Euros; provided that any notice requesting a
Revolving Credit Loan be made in Euros must comply with the requirements
of this ss.2.6 and the requirements of a Euro Notice pursuant to ss.2.10.
Each such notice shall specify (i) the principal amount of the Revolving
Credit Loan requested stated in Dollars, or, subject to ss.2.10, Euros,
(ii) the proposed Drawdown Date of such Revolving Credit Loan, (iii) the
Interest Period for such Revolving Credit Loan and (iv) the Type of such
Revolving Credit Loan. Promptly upon receipt of any such notice, the
Administrative Agent shall notify each of the Lenders thereof. Each Loan
Request shall be irrevocable and binding on the Borrowers and shall
obligate the applicable Borrower to accept the Revolving Credit Loan
requested from the Lenders on the
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proposed Drawdown Date. Each Loan Request shall be in a minimum aggregate
amount of $1,000,000 or an integral multiple of $500,000 in excess
thereof.
2.6.2. Swing Line. Unless a Default or Event of Default shall have
occurred and be continuing, notwithstanding the notice and minimum amount
requirements set forth in ss.2.6.1 (but subject to the second proviso of
this sentence) but otherwise in accordance with the terms and conditions
of this Credit Agreement, the Swing Line Lender may, in its sole
discretion and without conferring with the Lenders, make Revolving Credit
Loans to the Borrowers in an amount as otherwise requested by any of the
Borrowers; provided that the aggregate amount of all advances made
pursuant to this ss.2.6.2 shall not exceed $10,000,000 at any time
outstanding (each a "Swing Line Loan"); and provided, further, that the
Foreign Borrower shall give to the Administrative Agent written notice (or
telephonic notice promptly confirmed in writing) of any requested
borrowing of a Swing Line Loan which is a Euro Base Rate Loan no later
than 10:00 a.m. (Boston time) on the Business Day prior to the requested
date of borrowing for such Swing Line Loan. Each Borrower acknowledges and
agrees that the making of such Swing Line Loans shall, in each case, be
subject in all respects to the provisions of this Credit Agreement as if
they were Revolving Credit Loans covered by a Loan Request including,
without limitation, the limitations set forth in ss.2.1 and the
requirements that the applicable provisions of ss.10 (in the case of Swing
Line Loans made on the Closing Date) and ss.11 be satisfied. All actions
taken by the Swing Line Lender pursuant to the provisions of this ss.2.6.2
shall be conclusive and binding on the Borrowers and the Lenders absent
the Swing Line Lender's gross negligence or willful misconduct. Swing Line
Loans made pursuant to this ss.2.6.2 to the Domestic Borrower shall be
Base Rate Loans denominated in Dollars until converted in accordance with
the provisions of the Credit Agreement and, prior to a Settlement, such
interest shall be for the account of the Swing Line Lender. Swing Line
Loans made pursuant to this ss.2.6.2 to the Foreign Borrower shall be
either (a) Base Rate Loans denominated in Dollars until converted in
accordance with the provisions of the Credit Agreement or (b) at the
Foreign Borrower's option (and subject to the discretion of the Swing Line
Lender), Euro Base Rate Loans denominated in Euros and, prior to a
Settlement, such interest shall be for the account of the Swing Line
Lender.
2.7. Conversion Options.
2.7.1. Conversion to Different Type of Revolving Credit Loan. The
applicable Borrower may elect from time to time to convert any outstanding
Revolving Credit Loan denominated in Dollars to a Revolving Credit Loan of
another Type denominated in Dollars, provided that (a) with respect to any
such conversion of a Eurocurrency Rate Loan to a Base Rate Loan, the
applicable Borrower shall give the Administrative Agent at least two (2)
Business Days prior written notice of such election; (b) with respect to
any such conversion of a Base Rate Loan to a Eurocurrency Rate Loan, the
applicable Borrower shall give the Administrative Agent at least three (3)
Business Days prior written notice of
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such election; (c) 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 and (d) no Revolving
Credit Loan may be converted into a Eurocurrency Rate Loan when any
Default or Event of Default has occurred and is continuing. On the date on
which such conversion is being made each Lender shall take such action as
is necessary to transfer its Commitment Percentage of such Revolving
Credit Loans to its Domestic Lending Office or its Eurocurrency Lending
Office, as the case may be. All or any part of outstanding Revolving
Credit Loans of any Type may be converted into a Revolving Credit Loan of
another Type as provided herein, provided that any partial conversion
shall be in an aggregate principal amount of $1,000,000 or a whole
multiple thereof. Each Conversion Request relating to the conversion of a
Revolving Credit Loan to a Eurocurrency Rate Loan shall be irrevocable by
the applicable Borrower.
2.7.2. Continuation of Type of Revolving Credit Loan. Any Revolving
Credit Loan of any Type may be continued as a Revolving Credit Loan of the
same Type upon the expiration of an Interest Period with respect thereto
by compliance by the applicable Borrower with the notice provisions
contained in ss.2.7.1; provided that (a) as to any Eurocurrency Rate Loan
denominated in Dollars, no such Eurocurrency Rate Loan may be continued as
such when any Default or Event of Default has occurred and is continuing,
but shall be automatically converted to a Base Rate Loan on the last day
of the first Interest Period relating thereto ending during the
continuance of any Default or Event of Default of which officers of the
Administrative Agent active upon the Borrowers' account have actual
knowledge; and (b) as to any Eurocurrency Rate Loan denominated in Euros,
no such Eurocurrency Rate Loan may be continued as such when any Default
or Event of Default has occurred and is continuing or the provisions of
ss.2.10 hereof have not or cannot be met at the time of such continuation
but shall be repaid by the Foreign Borrowers on the last day of the
Interest Period relating thereto. In the event that the Borrowers fail to
provide any such notice with respect to the continuation of any
Eurocurrency Rate Loan as such, then (a) as to Eurocurrency Rate Loans
denominated in Euros, such Eurocurrency Rate Loans shall be automatically
continued as such on the last day of the first Interest Period relating
thereto for a one (1) month Interest Period, and (b) as to Eurocurrency
Rate Loans denominated in Dollars, 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 Administrative Agent shall notify
the Lenders promptly when any such automatic conversion contemplated by
this ss.2.7 is scheduled to occur.
2.7.3. Eurocurrency Rate Loans. Any conversion to or from
Eurocurrency Rate Loans shall be in such amounts and be made pursuant to
such elections so that, after giving effect thereto, the aggregate
principal amount of all Eurocurrency Rate Loans having the same Interest
Period shall not be less than $1,000,000 or a whole multiple of $500,000
in excess thereof (or, in the case
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of Eurocurrency Rate Loans denominated in Euros, that whole number which
is nearest to the Dollar Equivalent of $1,000,000 or $500,000 as the case
may be). With respect to any borrowing of, conversion to or continuation
of Eurocurrency Rate Loans by (a) the Domestic Borrower, no more than six
(6) Eurocurrency Rate Loans having different Interest Periods may be
outstanding at any time to such Domestic Borrower, and (b) the Foreign
Borrower, no more than six (6) Eurocurrency Rate Loans having different
Interest Periods may be outstanding at any time to such Foreign Borrower.
2.8. Funds for Revolving Credit Loan.
2.8.1. Funding Procedures. Not later than noon (Boston time) on the
proposed Drawdown Date of any Revolving Credit Loans, each of the Lenders
will make available to the Administrative Agent, at the Administrative
Agent's Office, in Same Day Funds, the amount of such Lender's Commitment
Percentage of the amount of the requested Revolving Credit Loans. Upon
receipt from each Lender of such amount, and upon receipt of the documents
required by ss.ss.10 and 11 and the satisfaction of the other conditions
set forth therein, to the extent applicable, the Administrative Agent will
make available to the applicable Borrower the aggregate amount of such
Revolving Credit Loans made available to the Administrative Agent by the
Lenders. The failure or refusal of any Lender to make available to the
Administrative Agent at the aforesaid time and place on any Drawdown Date
the amount of its Commitment Percentage of the requested Revolving Credit
Loans shall not relieve any other Lender from its several obligation
hereunder to make available to the Administrative Agent the amount of such
other Lender's Commitment Percentage of any requested Revolving Credit
Loans.
2.8.2. Advances by Administrative Agent. The Administrative Agent
may, unless notified to the contrary by any Lender prior to a Drawdown
Date, assume that such Lender has made available to the Administrative
Agent on such Drawdown Date the amount of such Lender's Commitment
Percentage of the Revolving Credit Loans to be made on such Drawdown Date,
and the Administrative Agent may (but it shall not be required to), in
reliance upon such assumption, make available to the Borrowers a
corresponding amount. If any Lender makes available to the Administrative
Agent such amount on a date after such Drawdown Date, such Lender shall
pay to the Administrative Agent on demand an amount equal to the product
of (a) the average computed for the period referred to in clause (c)
below, of the Overnight Rate for each day included in such period, times
(b) the amount of such Lender's Commitment Percentage of such Revolving
Credit Loans, times (c) a fraction, the numerator of which is the number
of days that elapse from and including such Drawdown Date to the date on
which the amount of such Lender's Commitment Percentage of such Revolving
Credit Loans shall become immediately available to the Administrative
Agent, and the denominator of which is 360. A statement of the
Administrative Agent submitted to such Lender with respect to any amounts
owing under this paragraph shall be prima facie evidence of the amount due
and
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owing to the Administrative Agent by such Lender. If the amount of such
Lender's Commitment Percentage of such Revolving Credit Loans is not made
available to the Administrative Agent by such Lender within three (3)
Business Days following such Drawdown Date, the Administrative Agent shall
be entitled to recover such amount from the Borrowers on demand, with
interest thereon at the rate per annum applicable to the Revolving Credit
Loans made on such Drawdown Date.
2.9. Settlements.
2.9.1. General. On each Settlement Date, the Administrative Agent
shall, not later than 11:00 a.m. (Boston time), give telephonic or
facsimile notice (a) to the Lenders and the Borrowers of the respective
outstanding amount of Swing Line Loans made by the Swing Line Lender on
behalf of the Lenders from the immediately preceding Settlement Date
through the close of business on the prior day and the amount of any
Eurocurrency Rate Loans to be made (following the giving of notice
pursuant to ss.2.6.1(b) or (c)) on such date pursuant to a Loan Request
and (b) to the Lenders of the amount (a "Settlement Amount") that each
Lender (a "Settling Lender") shall pay to effect a Settlement of any
Revolving Credit Loan. A statement of the Administrative Agent submitted
to the Lenders and the applicable Borrowers or to the Lenders with respect
to any amounts owing under this ss.2.9 shall be prima facie evidence of
the amount due and owing. Each Settling Lender shall, not later than (i)
3:00 p.m. (Boston time) on such Settlement Date for any Loan denominated
in Dollars and (ii) noon (Boston time) on the Business Day immediately
following such Settlement Date for any Loan denominated in Euros, effect a
wire transfer of Same Day Funds to the Administrative Agent in the amount
of the Settlement Amount for such Settling Lender. All funds advanced by
any Lender as a Settling Lender pursuant to this ss.2.9 shall for all
purposes be treated as a Revolving Credit Loan made by such Settling
Lender to the Borrowers and all funds received by any Lender pursuant to
this ss.2.9 shall for all purposes be treated as repayment of amounts owed
with respect to Revolving Credit Loans made by such Lender. In the event
that any bankruptcy, reorganization, liquidation, receivership or similar
cases or proceedings in which any Borrower is a debtor prevent a Settling
Lender from making any Revolving Credit Loan to effect a Settlement as
contemplated hereby, such Settling Lender will make such dispositions and
arrangements with the other Lenders with respect to such Revolving Credit
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 Revolving Credit Loans being equal,
as nearly as may be, to such Lender's Commitment Percentage of the
outstanding amount of the Revolving Credit Loans.
2.9.2. Failure to Make Funds Available. The Administrative Agent
may, unless notified to the contrary by any Settling Lender prior to a
Settlement Date, assume that such Settling Lender has made or will make
available to the Administrative Agent on such Settlement Date the amount
of such Settling
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Lender's Settlement Amount, and the Administrative Agent may (but it shall
not be required to), in reliance upon such assumption, make available to
the Borrower a corresponding amount. If any Settling Lender makes
available to the Administrative Agent such amount on a date after such
Settlement Date, such Settling Lender shall pay to the Administrative
Agent on demand an amount equal to the product of (a) the average computed
for the period referred to in clause (c) below, of the Overnight Rate for
each day included in such period, times (b) the amount of such Settlement
Amount, 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 Administrative Agent, and the denominator of which is 360. A statement
of the Administrative Agent submitted to such Settling Lender with respect
to any amounts owing under this ss.2.9.2 shall be prima facie evidence of
the amount due and owing to the Administrative Agent by such Settling
Lender. If such Settling Lender's Settlement Amount is not made available
to the Administrative Agent by such Settling Lender within three (3)
Business Days following such Settlement Date, the Administrative Agent
shall be entitled to recover such amount from the Domestic Borrower on
demand, with interest thereon at the rate per annum applicable to the
Revolving Credit Loans as of such Settlement Date.
2.9.3. No Effect on Other Lenders. The failure or refusal of any
Settling Lender to make available to the Administrative Agent at the
aforesaid time and place on any Settlement Date the amount of such
Settling Lender's Settlement Amount shall not (a) relieve any other
Settling Lender from its several obligations hereunder to make available
to the Administrative Agent the amount of such other Settling Lender's
Settlement Amount or (b) impose upon any Lender, other than the Settling
Lender so failing or refusing, any liability with respect to such failure
or refusal or otherwise increase the Commitment of such other Lender.
2.10. Optional Currency.
2.10.1. Request for Euros. Subject to the limitations set forth in
ss.2.1, the Foreign Borrower may, upon at least five (5) Business Days'
notice to the Administrative Agent (a "Euro Notice"), request that one or
more Revolving Credit Loans be made as Eurocurrency Rate Loans in Euros,
provided that any Revolving Credit Loan proposed to be made under this
ss.2.10.1 shall be in an amount not less than the Euro equivalent of
$1,000,000 or an integral multiple of the Euro equivalent of $500,000 in
excess thereof and provided, further, the aggregate amount of outstanding
Revolving Credit Loans denominated in Euros shall not exceed $50,000,000
at any time. Each Euro Notice requesting a Revolving Credit Loan in Euros
shall be by telephone, telex, telecopy or cable (in each case confirmed in
writing by the Foreign Borrower), specifying (a) the amount of the
Revolving Credit Loan to be made, (b) the requested date of the proposed
borrowing, (c) the initial Interest Period for the Revolving Credit Loan
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to be borrowed, and (d) the Foreign Borrower's account to which payment of
the proceeds of such Revolving Credit Loan is to be made. If any Lender,
on or prior to the second Business Day preceding the first day of any
Interest Period for which a Euro Notice has been delivered requesting a
Revolving Credit Loan in Euros or on any funding date, determines (which
determination shall be conclusive) that the Euro is not freely
transferable and convertible into Dollars or that it will be impracticable
for such Lender to fund the Revolving Credit Loan in Euros, then such
Lender shall so notify the Administrative Agent, which notification shall
be given immediately by the Administrative Agent to the Foreign Borrower,
and such Lender's portion of the requested Revolving Credit Loan shall,
notwithstanding any contrary election by the Foreign Borrower or any other
provisions hereof, be denominated in Dollars as a Base Rate Loan unless
the Foreign Borrower, three (3) Business Days prior to the commencement of
the Interest Period and pursuant to the terms of ss.2.6.1, elects to have
such Revolving Credit Loan denominated in Dollars as a Eurocurrency Rate
Loan. In the event that the Foreign Borrower repays such portion of a
Revolving Credit Loan denominated in Dollars as a Base Rate Loan or a
Eurocurrency Rate Loan, as the case may be, in accordance with ss.3 and
such repayment results in Revolving Credit Loans outstanding that are not
pro rata in accordance with the Commitment Percentages, than all
subsequent principal repayments denominated in the Euro which the
applicable Lender did not advance shall be made by the Foreign Borrower to
the Administrative Agent for the respective accounts of the Lenders other
than such Lender on a pro rata basis until such times as the Revolving
Credit Loans are outstanding on a pro rata basis. Subject to the foregoing
and to the satisfaction of the terms and conditions of ss.ss.10 and 11,
each Revolving Credit Loan requested to be made in Euros will be made on
the date specified therefor in the Euro Notice and, upon being so made,
will have the Interest Period requested in the Euro Notice.
2.10.2. Denominations. In the event that any portion of the funds
available under the terms of this Credit Agreement is denominated in
Euros, the Dollar Equivalent of such portion of the funds shall be
calculated pursuant to the definition of "Dollar Equivalent". The amount
so determined shall then be added to the amount already outstanding in
Dollars for the purpose of determining the remaining availability of funds
under ss.ss.2.1 and 2.10.1 and any required repayments under ss.2.10.3.
2.10.3. Repayment. If at any time prior to the Revolving Credit Loan
Maturity Date, the Dollar Equivalent of the aggregate principal amount
outstanding of all Revolving Credit Loans denominated in Euros shall
exceed $50,000,000 at any time by more than five percent (5%) as a result
of fluctuations in respective conversion rates, the Borrowers shall
jointly and severally pay or cause to be paid immediately, upon demand
made by the Administrative Agent, such amounts as are sufficient to
eliminate such excess and to reduce the aggregate principal amount
outstanding of such Revolving Credit Loans denominated in Euros to the
Dollar Equivalent of $50,000,000. Nothing set forth
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in this ss.2.10.3 shall be construed to require the Administrative Agent
to calculate daily compliance under this ss.2.10.3 unless expressly
requested to do so by a Lender.
2.10.4. Funding. Each Lender may make any Eurocurrency Rate Loan
denominated in Euros by causing any of its domestic or foreign branches or
foreign affiliates to make such Eurocurrency Rate Loan (whether or not
such branch or affiliate is named as a lending office on the signature
pages hereof); provided that in such event the obligation of the Borrowers
to repay such Eurocurrency Rate Loan shall nevertheless be to such Lender
and shall, for all purposes of this Credit Agreement (including without
limitation for purposes of the definition of "Required Lenders") be deemed
made by such Lender, to the extent of such Eurocurrency Rate Loan, for the
account of such branch or affiliate.
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
3.1. Maturity. The Foreign Borrower promises to pay on the Revolving
Credit Loan Maturity Date, and there shall become absolutely due and payable on
the Revolving Credit Loan Maturity Date, all of the Revolving Credit Loans
outstanding to the Foreign Borrower on such date, together with any and all
accrued and unpaid interest thereon. In addition, the Domestic Borrower promises
to pay on the Revolving Credit Loan Maturity Date, and there shall become
absolutely due and payable on the Revolving Credit Loan Maturity Date, all of
the Revolving Credit Loans outstanding on such date, together with any and all
accrued and unpaid interest thereon.
3.2. Mandatory Repayments of Revolving Credit Loans.
3.2.1. General. If at any time the outstanding amount of the
Revolving Credit Loans exceeds the Total Commitment at such time, then the
Borrowers shall immediately pay the amount of such excess to the
Administrative Agent for the respective accounts of the Lenders for
application to the outstanding principal balance of the Revolving Credit
Loans. Each prepayment of Revolving Credit Loans shall be allocated among
the Lenders, in proportion, as nearly as practicable, to the respective
unpaid principal amount of each Lender's Revolving Credit Note, with
adjustments to the extent practicable to equalize any prior payments or
repayments not exactly in proportion.
3.2.2. Proceeds of Certain Events. Concurrently with the receipt by
the Parent or any of its Subsidiaries of:
(a) Net Cash Sale Proceeds in excess of $50,000,000 from Asset Sales
(other than the sale, lease, license or other disposition of assets in the
ordinary course of business consistent with past practices);
(b) Net Cash Equity Issuance Proceeds in excess of $50,000,000 from
Equity Issuances; or
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(c) net cash proceeds in excess of $50,000,000 from any issuance of
Indebtedness permitted byss.8.1(d).
then the Borrowers jointly and severally agree to pay to the
Administrative Agent for the respective accounts of the Lenders an amount
equal to one hundred percent (100%) of such proceeds, to be applied to
reduce the outstanding amount of the Revolving Credit Loans and to
permanently reduce the Total Commitment by such amount. Such mandatory
prepayments shall be allocated among the Lenders in proportion, as nearly
as practicable, to the respective outstanding amounts of each Lender's
Revolving Credit Note, with adjustments to the extent practicable to
equalize any prior prepayments not exactly in proportion.
3.3. Optional Repayments of Revolving Credit Loans. The Borrowers shall
have the right, at their election, to repay the outstanding amount of the
Revolving Credit Loans, as a whole or in part, at any time without penalty or
premium, provided that any full or partial prepayment of the outstanding amount
of any Eurocurrency Rate Loans pursuant to this ss.3.3 may be made only on the
last day of the Interest Period relating thereto unless breakage costs incurred
by the Lenders in connection therewith are paid by the Borrowers in accordance
with ss.4.10. The applicable Borrower shall give the Administrative Agent, no
later than 10:00 a.m. (Boston time), at least (a) three (3) Business Days prior
written notice of any proposed prepayment pursuant to this ss.3.3 of Base Rate
Loans, (b) four (4) Business Days notice of any proposed prepayment pursuant to
this ss.3.3 of Eurocurrency Rate Loans denominated in Dollars and (c) five (5)
Business Days notice of any proposed prepayment pursuant to this ss.3.3 of
Eurocurrency Rate Loans denominated in Euros, in each case specifying the
proposed date of prepayment of Revolving Credit Loans and the principal amount
to be prepaid. Each such partial prepayment of the Revolving Credit Loans shall
be in an integral multiple of $1,000,000, (or the Dollar Equivalent in the case
of Revolving Credit Loans denominated in Euros) shall be accompanied by the
payment of accrued interest on the principal prepaid to the date of prepayment
and shall be applied, in the absence of instruction by the applicable Borrower,
first to the principal of Base Rate Loans and then to the principal of
Eurocurrency Rate Loans. Each partial prepayment shall be allocated among the
Lenders, in proportion, as nearly as practicable, to the respective unpaid
principal amount of each Lender's Revolving Credit Note, with adjustments to the
extent practicable to equalize any prior repayments not exactly in proportion.
4. CERTAIN GENERAL PROVISIONS.
4.1. Closing Fee. The Borrowers jointly and severally agree to pay to the
Administrative Agent on the Closing Date a closing fee (the "Closing Fee") in
the amount and at the times specified in the Fee Letter.
4.2. Administrative Agent's Fee. The Borrowers jointly and severally agree
to pay to the Administrative Agent, for the Administrative Agent's own account,
an Administrative Agent's fee (the "Administrative Agent's Fee") in the amount
and at the times specified in the Fee Letter.
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4.3. Funds for Payments.
4.3.1. Payments to Administrative Agent. All payments of principal
and interest on Revolving Credit Loans which are denominated in Dollars
and all Fees and any other amounts due hereunder or under any of the other
Loan Documents shall be made on the due date thereof to the Administrative
Agent, for the respective accounts of the Lenders and the Administrative
Agent in Dollars, at the Administrative Agent's Office or at such other
place that the Administrative Agent may from time to time designate, in
each case at or about 11:00 a.m. (Boston, Massachusetts time or other
local time at the place of payment) and in Same Day Funds. All payments of
principal and interest on Revolving Credit Loans which are denominated in
Euros shall be made by the Foreign Borrower to the Administrative Agent,
for the respective account of the Lenders and the Administrative Agent, in
Euros, at the Administrative Agent's Office or at such other place that
the Administrative Agent may from time to time designate, in each case of
or about 11:00 a.m. (London time or other local time at the place of
payment) and in Same Day Funds. Each payment in respect of any Revolving
Credit Loan made by a Borrower shall be made in the same currency in which
such Revolving Credit Loan was made unless otherwise agreed by the
Lenders.
4.3.2. No Offset, etc. All payments by the Borrowers hereunder and
under any of the other Loan Documents shall be made without recoupment,
setoff or counterclaim and free and clear of and without deduction for any
taxes, levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or
hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein unless the
Borrowers are compelled by law to make such deduction or withholding. If
any such obligation is imposed upon the Borrowers with respect to any
amount payable by it hereunder or under any of the other Loan Documents,
the Borrowers will pay to the Administrative Agent, for the account of the
Lenders or (as the case may be) the Administrative 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 Administrative Agent to receive the same net
amount which the Lenders or the Administrative Agent would have received
on such due date had no such obligation been imposed upon the Borrowers.
The Borrowers will deliver promptly to the Administrative Agent
certificates or other valid vouchers for all taxes or other charges
deducted from or paid with respect to payments made by the Borrowers
hereunder or under such other Loan Document.
4.3.3. Non-U.S. Lenders. Each Lender and the Administrative Agent
that is not a U.S. Person as defined in Section 7701(a)(30) of the Code
for federal income tax purposes (a "Non-U.S. Lender") hereby agrees that,
if and to the extent it is legally able to do so, it shall, prior to the
date of the first payment by the Borrowers hereunder to be made to such
Lender or the Administrative Agent
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or for such Lender's or the Administrative Agent's account, deliver to the
Borrowers and the Administrative Agent, as applicable, such certificates,
documents or other evidence, as and when required by the Code or Treasury
Regulations issued pursuant thereto, including (a) in the case of a
Non-U.S. Lender that is a "bank" for purposes of Section 881(c)(3)(A) of
the Code, two (2) duly completed copies of Internal Revenue Service Form
W-8BEN or Form W-8ECI and any other certificate or statement of exemption
required by Treasury Regulations, or any subsequent versions thereof or
successors thereto, properly completed and duly executed by such Lender or
the Administrative Agent establishing that with respect to payments of
principal, interest or fees hereunder it is (i) not subject to United
States federal withholding tax under the Code because such payment is
effectively connected with the conduct by such Lender or Administrative
Agent of a trade or business in the United States or (ii) totally exempt
or partially exempt from United States federal withholding tax under a
provision of an applicable tax treaty and (b) in the case of a Non-U.S.
Lender that is not a "bank" for purposes of Section 881(c)(3)(A) of the
Code, a certificate in form and substance reasonably satisfactory to the
Administrative Agent and the Borrowers and to the effect that (i) such
Non-U.S. Lender is not a "bank" for purposes of Section 881(c)(3)(A) of
the Code, is not subject to regulatory or other legal requirements as a
bank in any jurisdiction, and has not been treated as a bank for purposes
of any tax, securities law or other filing or submission made to any
governmental authority, any application made to a rating agency or
qualification for any exemption from any tax, securities law or other
legal requirements, (ii) is not a ten percent (10%) shareholder for
purposes of Section 881(c)(3)(B) of the Code and (iii) is not a controlled
foreign corporation receiving interest from a related person for purposes
of Section 881(c)(3)(C) of the Code, together with a properly completed
Internal Revenue Service Form W-8 or W-9, as applicable (or successor
forms). Each Lender or the Administrative Agent agrees that it shall,
promptly upon a change of its lending office or the selection of any
additional lending office, to the extent the forms previously delivered by
it pursuant to this section are no longer effective, and promptly upon the
Borrowers' or the Administrative Agent's reasonable request after the
occurrence of any other event (including the passage of time) requiring
the delivery of a Form W-8BEN, Form W-8ECI, Form W-8 or W-9 in addition to
or in replacement of the forms previously delivered, deliver to the
Borrowers and the Administrative Agent, as applicable, if and to the
extent it is properly entitled to do so, a properly completed and executed
Form W-8BEN, Form W-8ECI, Form W-8 or W-9, as applicable (or any successor
forms thereto).
4.4. Computations. All computations of interest on Base Rate Loans shall
be based on a 365-day year and paid for the actual number of days elapsed, and
all computations of interest on Eurocurrency Rate Loans, Euro Base Rate Loans
and of Fees shall be based on a 360-day year and paid for the actual number of
days elapsed. Except as otherwise provided in the definition of the term
"Interest Period" with respect to Eurocurrency Rate Loans, whenever a payment
hereunder or under any of the other Loan Documents becomes due on a day that is
not a Business Day, the due date for such
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payment shall be extended to the next succeeding Business Day, and interest
shall accrue during such extension. The outstanding amount of the Revolving
Credit Loans as reflected on the Records from time to time shall be considered
correct and binding on the Borrowers unless within five (5) Business Days after
receipt of any notice by the Administrative Agent or any of the Lenders of such
outstanding amount, the Administrative Agent or such Lender shall notify the
Borrowers to the contrary.
4.5. Inability to Determine Eurocurrency Rate. In the event, prior to the
commencement of any Interest Period relating to any Eurocurrency Rate Loan, the
Administrative Agent shall determine or be notified by the Required Lenders that
(a) 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 or deposits
in Euros in the relevant Interest Period are not are not available to the
Administrative Agent or the Lenders in any Eurocurrency Interbank Market, or (b)
the Eurocurrency Rate determined or to be determined for such Interest Period
will not adequately and fairly reflect the cost to the Lenders of making or
maintaining their Eurocurrency Rate Loans during such period, the Administrative
Agent shall forthwith give notice of such determination (which shall be
conclusive and binding on the Borrowers and the Lenders) to the Borrowers and
the Lenders. In such event (i) any Loan Request, Conversion Request or Euro
Notice with respect to Eurocurrency Rate Loans shall be automatically withdrawn
and, in the case of Revolving Credit Loans denominated in Dollars, shall be
deemed a request for Base Rate Loans, and in the case of any Eurocurrency Rate
Loan denominated in Euros, shall be withdrawn, (ii) each Eurocurrency Rate Loan
shall, on the last day of the then current Interest Period relating thereto, if
denominated in Dollars, automatically become a Base Rate Loan, and if
denominated in Euros, be repaid, (iii) the obligations of the Lenders to make
Eurocurrency Rate Loans shall be suspended until the Administrative Agent or the
Required Lenders determine that the circumstances giving rise to such suspension
no longer exist, whereupon the Administrative Agent or, as the case may be, the
Administrative Agent upon the instruction of the Required Lenders, shall so
notify the Borrowers and the Lenders.
4.6. 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 or perform its obligations in respect of any
Eurocurrency Rate Loans, such Lender shall forthwith give notice of such
circumstances to the Borrowers and the other Lenders and thereupon (a) the
commitment of such Lender to make Eurocurrency Rate Loans or convert Base Rate
Loans to Eurocurrency Rate Loans shall forthwith be suspended and (b) such
Lender's Revolving Credit Loans then outstanding as Eurocurrency Rate Loans
denominated in Dollars, 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 the
Eurocurrency Rate Loans then outstanding an denominated in Euros, if any, shall
be repaid 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.
The Borrowers hereby jointly and severally agree promptly
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to pay the Administrative Agent for the account of such Lender, upon demand by
such Lender, any additional amounts necessary to compensate such Lender for any
costs incurred by such Lender in making any conversion in accordance with this
ss.4.6, 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.
4.7. Additional Costs, etc. If any present or future applicable law, which
expression, as used herein, includes statutes, rules, orders 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 Administrative Agent by any central bank
or other fiscal, monetary or other authority (whether or not having the force of
law), shall:
(a) subject any Lender or the Administrative Agent to any tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature with
respect to this Credit Agreement, the other Loan Documents, such Lender's
Commitment or the Revolving Credit Loans (other than taxes based upon or
measured by the income or profits of such Lender or the Administrative
Agent), or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Lender of the principal of
or the interest on any Revolving Credit Loans or any other amounts payable
to any Lender or the Administrative Agent under this Credit Agreement or
any of the other Loan Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit Agreement) any
special deposit, reserve, assessment, liquidity, capital adequacy or other
similar requirements (whether or not having the force of law) against
assets held by, or deposits in or for the account of, or loans by, or
letters of credit issued by, or commitments of an office of any Lender, or
(d) impose on any Lender or the Administrative Agent any other
conditions or requirements with respect to this Credit Agreement, the
other Loan Documents, the Revolving Credit Loans, such Lender's
Commitment, or any class of loans, letters of credit or commitments of
which any of the Revolving Credit Loans or such Lender's Commitment forms
a part, and the result of any of the foregoing is
(i) to increase the cost to any Lender of making, funding,
issuing, renewing, extending or maintaining any of the Revolving
Credit Loans or such Lender's Commitment, or
(ii) to reduce the amount of principal, interest or other
amount payable to such Lender or the Administrative Agent hereunder
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on account of such Lender's Commitment or any of the Revolving
Credit Loans, or
(iii) to require such Lender or the Administrative Agent to
make any payment or to forego any interest or other sum payable
hereunder, the amount of which payment or foregone interest or other
sum is calculated by reference to the gross amount of any sum
receivable or deemed received by such Lender or the Administrative
Agent from the Borrowers hereunder, or
(e) impose on any Lender or the Administrative Agent any Mandatory
Costs with respect to this Credit Agreement, the other Loan Documents,
such Lender's Commitment or the Revolving Credit Loans,
then, and in each such case, the Borrowers will, upon demand made by such Lender
or (as the case may be) the Administrative Agent at any time and from time to
time and as often as the occasion therefor may arise, pay to such Lender or the
Administrative Agent such additional amounts as will be sufficient to compensate
such Lender or the Administrative Agent for such additional cost, reduction,
payment or foregone interest or other sum.
4.8. Capital Adequacy. If after the date hereof any Lender or the
Administrative 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 Lenders or Lender
holding companies or any change in the interpretation or application thereof by
a Governmental Authority with appropriate jurisdiction, or (b) compliance by
such Lender or the Administrative Agent or any corporation controlling such
Lender or the Administrative 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 Administrative Agent's commitment with respect to any
Revolving Credit Loans to a level below that which such Lender or the
Administrative Agent could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or the Administrative
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 Administrative Agent to be material, then such
Lender or the Administrative Agent may notify the Borrowers 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 jointly and severally agree to pay
such Lender or (as the case may be) the Administrative 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 Administrative
Agent of a certificate in accordance with ss.6.9 hereof. Each Lender shall
allocate such cost increases among its customers in good faith and on an
equitable basis.
4.9. Certificate. A certificate setting forth any additional amounts
payable pursuant to ss.ss.4.7 or 4.8 and a brief explanation of such amounts
which are due,
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submitted by any Lender or the Administrative Agent to the Borrowers, shall be
conclusive, absent manifest error, that such amounts are due and owing.
4.10. Indemnity. The Borrowers agree 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 the Borrowers 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
banks of funds obtained by it in order to maintain its Eurocurrency Rate Loans,
(b) default by the Borrowers in making a borrowing or conversion after the
Borrowers have given (or is deemed to have given) a Loan Request or a Conversion
Request relating thereto in accordance with ss.2.6 or ss.2.7 or (c) the making
of any payment (including, without limitation, any prepayment) of a Eurocurrency
Rate Loan or the making of any conversion of any such Revolving Credit Loan to a
Base Rate Loan on a day that is not the last day of the applicable Interest
Period with respect thereto, including interest or fees payable by such Lender
to lenders of funds obtained by it in order to maintain any such Revolving
Credit Loans.
4.11. Interest After Default.
During the continuance of an Event of Default, principal and (to the
extent permitted by applicable law) interest on the Revolving Credit Loans and
all other 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 then applicable thereto
until such amount shall be paid in full (after as well as before judgment).
4.12. Currency Matters.
Dollars are the currency of account and payment for each and every sum at
any time due from the Borrowers hereunder; provided that:
(a) except as expressly provided in this Credit Agreement, each
repayment of a Revolving Credit Loan or a part thereof shall be made in
the currency in which such Revolving Credit Loan is denominated at the
time of that repayment;
(b) each payment of interest shall be made in the currency in which
such principal or other sum in respect of which such interest is payable,
is denominated;
(c) each payment of any Fees shall be in Dollars;
(d) each payment in respect of costs, expenses and indemnities shall
be made in the currency in which the same were incurred; and
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(e) any amount expressed to be payable in Euros shall be paid in
Euros.
No payment to the Administrative Agent 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 Administrative
Agent 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 Borrowers jointly and severally agree to indemnify and hold
harmless the Administrative Agent or such Lender, as the case may be, with
respect to the amount of the shortfall, with such indemnity surviving the
termination of this Credit Agreement and any legal proceeding, judgment or court
order pursuant to which the original payment was made which resulted in the
shortfall.
4.13. Lending Office. Each Revolving Credit Loan made by any Lender in
Euros, and each payment by the Foreign Borrower in respect thereof, shall be
made by, or, as the case may be, for the account of, such applicable lending
office of the Administrative Agent as the Administrative Agent shall designate.
5. GUARANTIES.
5.1. General. The Obligations shall be guaranteed pursuant to the terms of
the Guaranties.
5.2. Guaranty from Domestic Borrower. For value received and hereby
acknowledged and as an inducement to the Lenders to make Revolving Credit Loans
to the Borrowers, including the Foreign Borrower, the Domestic Borrower hereby
unconditionally and irrevocably guarantees: (i) the full punctual payment when
due, whether at stated maturity, by acceleration or otherwise, of all
Obligations of each Borrower now or hereafter existing hereunder whether for
principal, interest, fees, expenses or otherwise, and (ii) the strict
performance and observance by each such Borrower of all agreements, warranties
and covenants in this Credit Agreement applicable to each such Borrower (such
obligations collectively being the "Guaranteed Obligations"). The obligations of
the Domestic Borrower under this ss.5 shall be joint and several with the
obligations of the Guarantors under the Guaranties.
5.3. Guaranty Absolute. The Domestic Borrower guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms
hereof, regardless of any law, regulation or order now or hereafter in effect in
any jurisdiction affecting any of such terms or the rights of the Administrative
Agent or any Lender with respect thereto. The liability of the Domestic Borrower
under this guaranty with regard to the Guaranteed Obligations of each Borrower
shall be absolute and unconditional irrespective of:
(a) any lack of authorization, execution, validity or enforceability
or any illegality of such Foreign Borrower to become a Borrower hereunder,
this Credit Agreement and any amendment hereof (with regard to such
Guaranteed
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Obligations), or any other obligation, agreement or instrument relating
thereto (it being agreed by the Domestic Borrower that the Guaranteed
Obligations shall not be discharged prior to the final and complete
satisfaction of all of the Obligations of the Borrowers) or any failure to
obtain any necessary governmental consent or approvals or necessary third
party consents or approvals;
(b) the Administrative Agent's or any Lender's exercise or
enforcement of, or failure or delay in exercising or enforcing, legal
proceedings to collect the Obligations or the Guaranteed, as the case may
be, or any power, right or remedy with respect to any of the Obligations
or the Guaranteed Obligations, as the case may be, including (i) any
suspension of the Administrative Agent's or any Lender's right to enforce
against any other Borrower of the Guaranteed Obligations or (ii) any
change in the time, manner or place of payment of, or in any other term
of, all or any of the Guaranteed Obligations or any other amendment or
waiver of or any consent to departure from this Credit Agreement or the
other Loan Documents (with regard to such Guaranteed Obligations) or any
other agreement or instrument governing or evidencing any of the
Guaranteed Obligations;
(c) any exchange, release or non-perfection of any collateral, or
any release or amendment or waiver of or consent to departure from any
other guaranty, for all or any of the Guaranteed Obligations of the
Foreign Borrower;
(d) any change in ownership of the Foreign Borrower;
(e) any acceptance of any partial payment(s) from the Foreign
Borrower;
(f) any insolvency, bankruptcy, reorganization, arrangement,
adjustment, composition, assignment for the benefit of creditors,
appointment of a receiver, examiner or trustee for all or any part of the
Foreign Borrower's assets;
(g) any assignment, participation or other transfer, in whole or in
part, of the Administrative Agent's or any Lender's interest in and rights
under this Credit Agreement or any other Loan Document, or of the
Administrative Agent's or any Lender's interest in the obligations or the
Guaranteed Obligations;
(h) any cancellation, renunciation or surrender of any pledge,
guaranty or any debt instrument evidencing the Obligations or the
Guaranteed Obligations, as the case may be;
(i) the Administrative Agent's or any Lender's vote, claim,
distribution, election, acceptance, action or inaction in any bankruptcy
or reorganization case related to the Obligations or the Guaranteed
Obligations, as the case may be; or
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(j) any other action or circumstance, other than payment, which
might otherwise constitute a defense available to, or a discharge of, the
Foreign Borrower in respect of its Guaranteed Obligations.
This guaranty shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of any Guaranteed Obligation is rescinded or
must otherwise be returned by the Administrative Agent or any Lender upon the
insolvency, bankruptcy or reorganization, examination of any Borrower or
otherwise, all as though such payment had not been made.
5.4. Effectiveness, Enforcement. The guaranty herein of the Domestic
Borrower shall be effective and shall be deemed to be made with respect to each
Revolving Credit Loan made to the Foreign Borrower as of the time it is made. No
invalidity, irregularity or unenforceability by reason of any bankruptcy or
similar law, or any law or order of any government or agency thereof purporting
to reduce, amend or otherwise affect any liability of a Borrower, and no defect
in or insufficiency or want of powers of any Borrower or irregular or improperly
recorded exercise thereof, shall impair, affect, be a defense to or claim
against such guaranty. This guaranty is a continuing guaranty and shall (a)
survive any termination of this Credit Agreement and (b) remain in full force
and effect until payment in full and performance of all Guaranteed Obligations
and all other amounts payable under this guaranty. This guaranty is made for the
benefit of the Administrative Agent and each of the Lenders and their respective
successors and assigns, and may be enforced from time to time as often as
occasion therefor may arise and without requirement on the part of the
Administrative Agent or any Lender first to exercise any rights against any
Borrower or to exhaust any remedies available to it against any Borrower or to
resort to any other source or means of obtaining payment of any of the
Guaranteed Obligations, or to elect any other remedy. In the event that
acceleration of the time for payment (or the giving of notice of such
acceleration) of the Guaranteed Obligations of any Borrower is stayed upon the
insolvency, bankruptcy, examination or reorganization, of such Borrower or for
any other reason, all such amounts otherwise subject to acceleration under the
terms of this Credit Agreement shall be immediately due and payable by the
Domestic Borrower under the guaranty herein provided.
5.5. Waiver. The Domestic Borrower hereby waives promptness, diligence,
protest, notice of protest, all suretyship defenses, notice of acceptance and
any other notice with respect to any of the Guaranteed Obligations and this
guaranty and any requirement that the Administrative Agent or any Lender secure,
perfect or protect any security interest or lien or any property subject thereto
or exhaust any right or take any action against any Borrower or any other person
or any collateral. The Domestic Borrower also irrevocably waives, to the fullest
extent permitted by law, all defenses which at any time may be available to it
in respect of the Guaranteed Obligations by virtue of any statute of
limitations, valuation, stay, moratorium law or other similar law now or
hereafter in effect.
5.6. Subordination; Subrogation. Until the payment and performance in full
of all the Obligations, the Domestic Borrower shall not exercise and hereby
waives any
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rights against any Foreign Borrower as a result of payment by the Domestic
Borrower hereunder, by way of subrogation, reimbursement, restitution,
contribution or otherwise, and the Domestic Borrower will not prove any claim in
competition with the Administrative Agent or any Lender in respect of any
payment hereunder in bankruptcy, insolvency or reorganization proceedings of any
nature; the Domestic Borrower will not claim any set-off, recoupment or
counterclaim against the Foreign Borrower in respect of any liability of the
Domestic Borrower to such Foreign Borrower; and the Domestic Borrower waives any
benefit of and any right to participate in any collateral which may be held by
the Administrative Agent and any Lender. The payment of any amounts due with
respect to any Indebtedness of the Foreign Borrower now or hereafter held by the
Domestic Borrower is hereby subordinated to the prior payment in full of the
Guaranteed Obligations. The Domestic Borrower agrees that after the occurrence
of any default in the payment or performance of the Guaranteed Obligations the
Domestic Borrower will not demand, sue for, or otherwise attempt to collect any
such Indebtedness of the Foreign Borrower to the Domestic Borrower until the
Guaranteed Obligations then due shall have been paid in full. If,
notwithstanding the foregoing sentence, the Domestic Borrower shall collect or
receive any amounts in respect of such indebtedness, such amounts shall be
collected and received by the Domestic Borrower as trustee for the
Administrative Agent and the Lenders and be paid over to the Administrative
Agent for the respective accounts of the Administrative Agent and the Lenders on
account of the Guaranteed Obligations without affecting in any manner the
liability of the Domestic Borrower under the other provisions of this ss.5. The
provisions of this section shall survive the expiration or termination of the
Credit Agreement and the other Loan Documents and the provisions of this section
shall be supplemental to and not in derogation of any rights and remedies of the
Administrative Agent or any Lender under any separate subordination agreement
which the Administrative Agent or any Lender may at any time and from time to
time entered into with the Domestic Borrower for the benefit of the
Administrative Agent or any Lender.
5.7. Payments. All payments made by the Domestic Borrower pursuant to this
ss.5 in respect of any Revolving Credit Loans made to the Foreign Borrower shall
be made in the same currency in which such Revolving Credit Loan was made,
unless otherwise agreed to in writing by the Administrative Agent or the
Lenders.
5.8. Receipt of Information. The Domestic Borrower acknowledges and
confirms that the Domestic Borrower itself has established its own adequate
means of obtaining from the Foreign Borrower on a continuing basis all
information desired by the Domestic Borrower concerning the financial condition
of the Foreign Borrower and that the Domestic Borrower will look to the Foreign
Borrower and not to the Administrative Agent or any Lender in order for the
Domestic Borrower to keep adequately informed of changes in the Foreign
Borrower's financial condition.
6. REPRESENTATIONS AND WARRANTIES.
Each of the Parent and the Borrowers represents and warrants to the
Lenders and the Administrative Agent as follows:
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6.1. Corporate Authority.
6.1.1. Incorporation; Good Standing. Each of the Parent and its
Subsidiaries (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 formation, (b) has all requisite
corporate (or the equivalent company) power to own its property and
conduct its business as now conducted and as presently contemplated, and
(c) is in good standing as a foreign corporation (or similar business
entity) and is duly authorized to do business in each jurisdiction where
such qualification is necessary except where a failure to be so qualified
would not have a Material Adverse Effect.
6.1.2. Authorization. The execution, delivery and performance of
this Credit Agreement and the other Loan Documents to which the Parent or
any of its Subsidiaries is or is to become a party and the transactions
contemplated hereby and thereby (a) are within the corporate (or the
equivalent company) authority of such Person, (b) have been duly
authorized by all necessary corporate (or the equivalent company)
proceedings, (c) do not and will not conflict with or result in any breach
or contravention of any provision of law, statute, rule or regulation to
which such Person is subject or any judgment, order, writ, injunction,
license or permit applicable to such Person, (d) do not require any
consents or approvals by any of such Person's shareholders (except such as
will be duly obtained on or prior to the Closing Date and will be in full
force and effect on and as of such date), and (e) do not conflict with any
provision of the Governing Documents of, or any agreement or other
instrument binding upon, such Person.
6.1.3. Enforceability. The execution and delivery of this Credit
Agreement and the other Loan Documents to which the Parent or any of its
Subsidiaries is or is to become a party will result in valid and legally
binding obligations of such Person enforceable against it in accordance
with the respective terms and provisions hereof and thereof, except as
enforceability is limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the
enforcement of creditors' rights and except to the extent that
availability of the remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding
therefor may be brought.
6.2. Governmental Approvals. The execution, delivery and performance by
the Parent and any of its Subsidiaries of this Credit Agreement and the other
Loan Documents to which such Person is or is to become a party and the
transactions contemplated hereby and thereby do not require the approval,
consent, order, authorization or license by, or giving of notice to, or taking
any other action with respect to or filing with, any Governmental Authority of
any jurisdiction, or other fiscal, monetary or other authority under any
provision of any laws or governmental rules, regulations, orders or decrees of
any jurisdiction or the central bank of any jurisdiction or other fiscal,
monetary or other authority under any provisions of any laws or
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governmental rules, regulations, orders or decrees of any jurisdiction
applicable to or binding on any Person other than those already obtained.
6.3. Title to Properties; Leases. Except as indicated on Schedule 6.3
hereto, the Parent and its Subsidiaries own all of the assets reflected in the
consolidated balance sheet of the Parent and its Subsidiaries as at the Balance
Sheet Date or acquired since that date (except property and assets sold or
otherwise disposed of in the ordinary course of business since that date),
subject to no Liens or other rights of others, except Permitted Liens.
6.4. Financial Statements and Projections.
6.4.1. Fiscal Year. The Parent and each of its Subsidiaries has a
fiscal (or financial) year which is the twelve (12) months ending on
December 31 of each calendar year.
6.4.2. Financial Statements. There has been furnished to each of the
Lenders a consolidated balance sheet of the Parent and its Subsidiaries as
at the Balance Sheet Date, and a consolidated statement of income of the
Parent and its Subsidiaries for the fiscal year then ended, certified by
KPMG Peat Marwick. Such balance sheet and statement of income have been
prepared in accordance with GAAP and fairly present the financial
condition of the Parent and its Subsidiaries as at the close of business
on the date thereof and the results of operations for the fiscal year then
ended. There are no contingent liabilities of the Parent or any of its
Subsidiaries as of such date involving material amounts, known to the
officers of the Parent, which were not disclosed in such balance sheet and
the notes related thereto.
6.4.3. Projections. There has been furnished to each Lender a copy
of the projections of the annual operating budgets of the Parent and its
Subsidiaries on a consolidated basis, balance sheets and cash flow
statements for the 2002 to 2005 fiscal (or financial) years. The Parent
has disclosed all material assumptions made with respect to general
economic, financial and market conditions used in formulating such
projections and such projections. The projections reflect the reasonable
estimates of the Parent and its Subsidiaries of the results of operations
and other information projected therein.
6.4.4. Solvency. The Parent and its Subsidiaries, on a consolidated
and consolidating basis, both before and after giving effect to the
transactions contemplated by this Credit Agreement, the other Loan
Documents and all contribution arrangements among the Parent and its
Subsidiaries (a) are solvent, (b) the fair value of the property of such
Person exceeds its total liabilities (including contingent liabilities but
without duplication of any underlying liability related thereto), (c) the
present fair saleable value on a going concern basis of the assets of such
Person is not less than the amount required to pay its probable
liabilities on its debts as they become absolute and mature, (d) does not
intend to, and does not believe that it will, incur debts or liabilities
beyond its
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ability to pay as such debts and liabilities mature, and (e) is not
engaged, and is not about to engage, in business or a transaction for
which its property would constitute unreasonably small capital.
6.5. No Material Adverse Changes, etc. Since the Balance Sheet Date there
has been no event or occurrence which has had a Material Adverse Effect. Since
the Balance Sheet Date, neither the Parent nor any of its Subsidiaries has made
any Restricted Payments.
6.6. Franchises, Patents, Copyrights, etc. The Parent and each of its
Subsidiaries possesses all material franchises, patents, copyrights, trademarks,
trade names, licenses and permits, and rights in respect of the foregoing,
adequate for the conduct of its business substantially as now conducted without
known conflict with any rights of others.
6.7. Litigation. Except as set forth in Schedule 6.7 hereto, there are no
actions, suits, proceedings or investigations of any kind pending or threatened
in writing against the Parent or any of its Subsidiaries before any Governmental
Authority, that, (a) if adversely determined, might, either in any case or in
the aggregate, (i) materially adversely affect the properties, assets, financial
condition or business of the Parent and its Subsidiaries taken as a whole, or
(ii) materially impair the right of the Parent and its Subsidiaries, considered
as a whole, to carry on business substantially as now conducted by them, or
result in any substantial liability for which adequate reserves are not
maintained on the consolidated balance sheet of the Parent and its Subsidiaries,
or (b) which question the validity of this Credit Agreement or any of the other
Loan Documents, or any action taken or to be taken pursuant hereto or thereto.
6.8. No Materially Adverse Contracts, etc. Neither the Parent nor any of
its Subsidiaries is subject to any Governing Document or other legal
restriction, or any judgment, decree, order, law, statute, rule or regulation
that has or is expected in the future to have a Material Adverse Effect. Neither
the Parent nor any of its Subsidiaries is a party to any contract or agreement
that has or is expected, in the judgment of the Parent's officers, to have any
Material Adverse Effect.
6.9. Compliance with Other Instruments, Laws, etc. Neither the Parent nor
any of its Subsidiaries is in violation of any provision of its Governing
Documents, or any agreement or instrument to which it may be subject or by which
it or any of its properties may be bound or any decree, order, judgment,
statute, license, rule or regulation, in any of the foregoing cases in a manner
that could result in the imposition of substantial penalties or have a Material
Adverse Effect.
6.10. Tax Status. The Parent 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 on such returns, reports and declarations, except those
being contested in good faith and by appropriate proceedings and except where
the failure to pay could not reasonably be
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expected to have a Material Adverse Effect, 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 where the failure to do so could not reasonably be expected to have a
Material Adverse Effect. 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 Parent know of any basis for any such claim.
6.11. No Event of Default. No Default or Event of Default has occurred and
is continuing.
6.12. Holding Company and Investment Company Acts. Neither the Parent 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.
6.13. Absence of Financing Statements, etc. Except with respect to
Permitted Liens, there is no financing statement, registration statement,
security agreement, chattel mortgage, real estate mortgage, fixed charge,
floating charge, legal charge, equitable mortgage, legal mortgage, pledge or
analogous type of security interest applicable in such foreign jurisdiction or
other document filed or recorded with any filing records, registry or other
public office, that purports to cover, affect or give notice of any present or
possible future Lien on any assets or property of the Parent or any of its
Subsidiaries or any rights relating thereto except for any such Lien which would
not reasonably be expected to have a Material Adverse Effect.
6.14. Certain Transactions. Except for (a) arm's length transactions
pursuant to which the Parent or any of its Subsidiaries makes payments in the
ordinary course of business upon terms no less favorable than the Parent or such
Subsidiary could obtain from third parties and (b) payment of legal fees
incurred in the ordinary course of business consistent with past practices by
voting trusts established for any of the Horne Investors in connection with
their ownership of the Capital Stock of the Parent and payment of expenses for
preparation of tax returns of certain officers and directors of the Parent and
its Subsidiaries and other transactions between the Parent or any of its
Subsidiaries deemed by management of the Parent or any of their Subsidiaries in
good faith to be beneficial to the Parent or such Subsidiary, none of the
officers, directors, or employees of the Parent or any of its Subsidiaries is
presently a party to any transaction with the Parent or any of its Subsidiaries
(other than for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any officer, director or such
employee or, to the knowledge of the Parent, any corporation, partnership, trust
or other entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner.
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6.15. Employee Benefit Plans.
6.15.1. In General. Each Employee Benefit Plan and each Guaranteed
Pension Plan has been maintained and operated in compliance in all
material respects with the provisions of ERISA and all Applicable Pension
Legislation 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 Parent has heretofore delivered to the
Administrative 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.
6.15.2. Terminability of Welfare Plans. No Employee Benefit Plan,
which is an employee welfare benefit plan within the meaning of ss.3(1) or
ss.3(2)(B) of ERISA, provides benefit coverage subsequent to termination
of employment, except as required by Title I, Part 6 of ERISA or the
applicable state insurance laws. The Parent 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 Parent without liability to
any Person other than for claims arising prior to termination.
6.15.3. Guaranteed Pension Plans. Each contribution required to be
made to a Guaranteed Pension Plan, whether required to be made to avoid
the incurrence of an accumulated funding deficiency, the notice or lien
provisions of ss.302(f) of ERISA, or otherwise, has been timely made. No
waiver of an accumulated funding deficiency or extension of amortization
periods has been received with respect to any Guaranteed Pension Plan, and
neither the Parent 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 Parent 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
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, by
more than $5,000,000.
6.15.4. Multiemployer Plans. Neither the Parent nor any ERISA
Affiliate has incurred any material liability (including secondary
liability) to any
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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 Parent 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.
6.16. Use of Proceeds.
6.16.1. General. The proceeds of the Revolving Credit Loans shall be
used (a) to refinance certain existing Indebtedness other than the
Indenture Debt, (b) to finance Permitted Acquisitions and (c) for working
capital and general corporate purposes. The proceeds of the Revolving
Credit Loans shall not be used to refinance all or any portion of the
Indenture Debt.
6.16.2. Regulations U and X. No portion of any Revolving Credit 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.
6.16.3. Ineligible Securities. No portion of the proceeds of any
Revolving Credit Loan is to be used for the purpose of knowingly
purchasing, or providing credit support for the purchase of, during the
underwriting or placement period or within thirty (30) days thereafter,
any Ineligible Securities underwritten or privately placed by a Financial
Affiliate.
6.16.4. Indenture Debt. No portion of the proceeds of any Revolving
Credit Loan is to be used to repay any portion of the Indenture Debt.
6.17. Environmental Compliance. The Parent has taken all commercially
reasonable steps to investigate the past and present condition and usage of the
Real Estate and the operations conducted thereon and, based upon such diligent
investigation, has determined that, except as set forth on Schedule 6.17 hereto:
(a) none of the Parent, its Subsidiaries, any operator of any Real
Estate owned by the Parent or any Subsidiary or, to the knowledge of the
Parent or any Subsidiary, any operator of the Real Estate not owned by the
Parent or any Subsidiary, or any operations thereon is in violation, or
alleged violation, of any judgment, decree, order, law, license, rule or
regulation pertaining to environmental matters, including without
limitation, those arising under the Resource Conservation and Recovery Act
("RCRA"), the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 as amended ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 ("SARA"), the Federal Clean Water Act, the
Federal Clean Air Act, the Toxic Substances Control Act, or any state,
local or foreign law, statute, regulation, ordinance, order or decree
relating to health, safety or the environment
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(hereinafter "Environmental Laws"), which violation could reasonably be
expected to have a material adverse effect on the environment or a
Material Adverse Effect;
(b) neither the Parent nor any of its Subsidiaries has received
notice from any third party including, without limitation, 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; (ii) that any
hazardous waste, as defined by 42 U.S.C. ss.6903(5), any hazardous
substances as defined by 42 U.S.C. ss.9601(14), any pollutant or
contaminant as defined by 42 U.S.C. ss.9601(33) and any toxic substances,
oil or hazardous materials or other chemicals or substances regulated by
any Environmental Laws ("Hazardous Substances") which any one of them has
generated, transported or disposed of has been found at any site at which
a Governmental Authority has conducted or has ordered that any Parent or
any of its Subsidiaries conduct a remedial investigation, removal or other
response action pursuant to any Environmental Law; or (iii) that it is or
shall be a named party to any claim, action, cause of action, complaint,
or legal or administrative proceeding (in each case, contingent or
otherwise) arising out of any third party's incurrence of costs, expenses,
losses or damages of any kind whatsoever in connection with the release of
Hazardous Substances;
(c) (i) to the best of the Parent's and its Subsidiaries' knowledge,
no portion of the Real Estate has been used for the handling, processing,
storage or disposal of Hazardous Substances except in accordance with
applicable Environmental Laws or except where the failure to have done so
has not had (and could not reasonably be expected to have) a Material
Adverse Effect, and no underground tank or other underground storage
receptacle for Hazardous Substances is located on any portion of the Real
Estate; (ii) in the course of any activities conducted by the Parent, its
Subsidiaries or, to the best knowledge of the Parent and its Subsidiaries,
without independent investigation, operators of its properties, no
Hazardous Substances have been generated or are being used on the Real
Estate except in accordance with applicable Environmental Laws or except
where any noncompliance with such Environmental Laws could not reasonably
be expected to have a Material Adverse Effect; (iii) there have been no
releases (i.e., any past or present releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, disposing
or dumping (a "Release")) or threatened Releases of Hazardous Substances
on, upon, into or from the properties of the Parent or its Subsidiaries by
the Parent or its Subsidiaries or, to the best of their knowledge, by
operators of its properties or any other Person, which Releases could
reasonably be expected to have a material adverse effect on the value of
any of the Real Estate or adjacent properties; (iv) to the best of the
Parent's and its Subsidiaries' 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
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have come to be located on, and which would have a material adverse effect
on the value of, the Real Estate; and (v) any Hazardous Substances that
have been generated on any of the Real Estate by the Parent, its
Subsidiaries or any of their respective operators have been managed or
disposed of in compliance with all applicable Environmental Laws, except
where any such noncompliance could not reasonably be expected to have a
Material Adverse Effect and, to the best of the Parent's and its
Subsidiaries' knowledge, without independent investigation, the
transporters and facilities utilized by the Parent or any of its
Subsidiaries to transport or dispose of such Person's Hazardous Substances
have not failed to operate in compliance with any permits authorizing such
activities and are not in violation of any applicable Environmental Laws,
except where any such noncompliance could not reasonably be expected to
have a Material Adverse Effect; and
(d) none of the Parent and its Subsidiaries or any of the Real
Estate is subject by virtue of the transactions set forth herein and
contemplated hereby, or as a condition to the effectiveness of any
transactions contemplated hereby to any applicable Environmental Law
requiring the performance of Hazardous Substances site assessments, or the
removal or remediation of Hazardous Substances, or the giving of notice to
any Governmental Authority or the recording or delivery to other Persons
of an environmental disclosure document or statement.
6.18. Subsidiaries, etc. Schedule 6.18(a) sets forth a true and complete
list of each Subsidiary of the Parent, together with the jurisdiction of
incorporation/formation and principal place of business or registered office of
each such Subsidiary. Except as set forth on Schedule 6.18(b) hereto, neither
the Parent nor any Subsidiary of the Parent is engaged in any joint venture or
partnership with any other Person.
6.19. No Withholding, Etc. Neither the Parent nor any of its Subsidiaries
is required by the laws of any jurisdiction to make any deduction or withholding
of any nature whatsoever from any payment to be made by it hereunder (provided
that all relevant Non-US Lenders have complied with the provisions of ss.4.3.3)
unless disclosed in writing to the Administrative Agent. Neither this Credit
Agreement nor any of the Loan Documents is subject to any registration or stamp
tax or any other similar or like taxes payable in any jurisdiction.
6.20. No Filing, Recording Required. No filing, recording or enrolling of
this Credit Agreement or any other Loan Document is required to ensure the
legality, validity, enforceability or admissibility in evidence of this Credit
Agreement or any other Loan Document.
6.21. Indenture Debt. The Parent has heretofore furnished to the
Administrative Agent true, complete and correct copies of the Indenture Debt
Documents (including schedules, exhibits and annexes thereto). The Indenture
Debt Documents have not subsequently been amended, supplemented or modified, and
constitute the complete understanding among the parties thereto in respect of
the
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matters and transactions covered thereby. All of the representations and
warranties contained in the Indenture Debt Documents were true and correct in
all material respects when made or deemed to have been made.
6.22. Disclosure. Neither this Credit Agreement nor any of the other Loan
Documents contains any untrue statement of a material fact or omits to state a
material fact (known to the Parent or any of its Subsidiaries in the case of any
document or information not furnished by it or any of its Subsidiaries)
necessary in order to make the statements herein or therein not misleading.
There is no fact known to the Parent or any of its Subsidiaries which has a
Material Adverse Effect, or which is reasonably likely in the future to have a
Material Adverse Effect, exclusive of effects resulting from changes in general
economic conditions, legal standards or regulatory conditions.
6.23. Insurance. The Parent 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.
6.24. Dutch Companies. (a) None of the borrowing, investment or lending
activities of any of the Dutch Companies, whether or not related to the Credit
Agreement or any of the Loan Documents, when regarded in combination with their
other commercial or financial activities, bring them within the definition of a
"credit institution" as defined in section 1 of the Act on the Supervision of
the Credit System 1992 (The Netherlands), or if any Dutch Company is deemed to
be such a "credit institution", it has the benefit of either (i) an individual
dispensation given by the Dutch Central Bank on the basis of section 1
sub-paragraph 4 of the Act on the Supervision of the Credit System 1992 (The
Netherlands), or (ii) the exemptive relief available to finance companies under
the Ministerial Regulation dated 4 February 1993 from the Dutch Ministry of
Finance.
(b) Each of the Dutch Companies has complied with all consultation
obligations in respect of each Dutch works council and the Dutch central works
council with jurisdiction over the transactions as envisaged by the Credit
Agreement or the Loan Documents, and, in this respect, there are no objections
against the entering into the transactions envisaged by the Loan Documents by
any of the Dutch Companies.
(c) To the best of the Parent's and its Subsidiaries' knowledge, none of
the assets owned by any of the Dutch Companies have a public utility function,
such that seizure of these assets is prohibited by virtue of sections 436 and
703 of the Dutch Code of Civil Procedure.
7. AFFIRMATIVE COVENANTS.
Each of the Parent and the Borrowers covenants and agrees that, so long as
any Revolving Credit Loan or Revolving Credit Note is outstanding or any Lender
has any obligation to make any Revolving Credit Loans:
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7.1. Punctual Payment. Each of the Borrowers will, duly and punctually pay
or cause to be paid the principal and interest on the Revolving Credit Loans,
the Fees and all other amounts provided for in this Credit Agreement and the
other Loan Documents to which the Borrowers are parties, all in accordance with
the terms of this Credit Agreement and such other Loan Documents.
7.2. Maintenance of Office. The (a) Parent and the Domestic Borrower will
maintain their chief executive office in North Andover, Massachusetts, and (b)
Foreign Borrower will maintain its registered office in Eerbeek, The
Netherlands, or, in each case, at such other place as such Person(s) shall
designate upon written notice to the Administrative Agent, where notices,
presentations and demands to or upon the such Person(s) in respect of the Loan
Documents to which the such Person(s) is a party may be given or made.
7.3. Records and Accounts. The Parent will (a) keep, and cause each of its
Subsidiaries to keep, true and accurate records and books of account in which
full, true and correct entries will be made in accordance with GAAP, (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, and (c) at
all times engage KPMG Peat Marwick or other independent certified public
accountants reasonably satisfactory to the Administrative Agent as the
independent certified public accountants of the Parent and its Subsidiaries and
will not permit more than thirty (30) days to elapse between the cessation of
such firm's (or any successor firm's) engagement as the independent certified
public accountants of the Parent and its Subsidiaries and the appointment in
such capacity of a successor firm as shall be satisfactory to the Administrative
Agent.
7.4. Financial Statements, Certificates and Information. The Parent will
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 Parent, the
consolidated balance sheet of the Parent and its Subsidiaries and the
consolidating balance sheet of the Parent and its Subsidiaries, each as at
the end of such year, and the related consolidated statement of income and
consolidated statement of cash flow and consolidating statement of income
and consolidating statement of cash flow for such year, each setting forth
in comparative form the figures for the previous fiscal year and all such
consolidated and consolidating statements to be in reasonable detail,
prepared in accordance with GAAP, and as to such consolidated statements
are certified, without qualification and without an expression of
uncertainty as to the ability of the Parent or any of its Subsidiaries to
continue as going concerns, by KPMG Peat Marwick or by other independent
certified public accountants satisfactory to the Administrative Agent,
together with a written statement from such accountants to the effect that
they have read ss.ss.8.1(d), 8.3(h) and (J) and 9 of this Credit Agreement
and the provisions applicable thereto, and that, in making the examination
necessary to said certification, they have obtained no knowledge of any
Event of Default, or, if
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such accountants shall have obtained knowledge of any then existing Event
of Default they shall disclose in such statement any such 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 (3) fiscal
quarters of each fiscal year of the Parent, copies of the unaudited
consolidated balance sheet of the Parent and its Subsidiaries and the
unaudited consolidating balance sheet of the Parent and its Subsidiaries,
each as at the end of such quarter, and the related consolidated statement
of income and consolidated statement of cash flow and consolidating
statement of income and consolidating statement of cash flow for the
portion of the Parent's fiscal year then elapsed, all in reasonable detail
and prepared in accordance with GAAP (subject to customary exceptions for
interim financial statements), together with a certification by the
principal financial or accounting officer of the Parent that the
information contained in such financial statements fairly presents the
financial position of the Parent and its Subsidiaries on the date thereof
(subject to year-end adjustments);
(c) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement certified by the
principal financial or accounting officer of the Parent in substantially
the form of Exhibit C hereto (a "Compliance Certificate") and setting
forth in reasonable detail computations evidencing compliance with the
covenants contained in ss.ss.8 and 9 and (if applicable) reconciliations
to reflect changes in GAAP since the Balance Sheet Date;
(d) promptly after 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 Parent; and
(e) from time to time such other financial data and information
(including accountants' management letters) as the Administrative Agent,
the Arranger or any Lender may reasonably request.
7.5. Notices.
7.5.1. Defaults. The Parent will, and will cause each of its
Subsidiaries to, promptly notify the Administrative Agent and each of the
Lenders in writing of the occurrence of any Default or Event of Default,
together with a reasonably detailed description thereof, and the actions
such Person proposes to take with respect thereto. If any Person shall
give any notice or take any other action in respect of a claimed default
(whether or not constituting an Event of Default) under this Credit
Agreement or any other note, evidence of indebtedness, indenture or other
obligation to which or with respect to which the Parent or any of its
Subsidiaries is a party or obligor, whether as principal, guarantor,
surety or otherwise, such Person shall forthwith give written notice
thereof to the
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Administrative Agent and each of the Lenders, describing the notice or
action and the nature of the claimed default.
7.5.2. Environmental Events. The Parent will, and will cause each of
its Subsidiaries to, promptly give notice to the Administrative Agent and
each of the Lenders (a) of any violation of any Environmental Law that the
Parent or any of its Subsidiaries reports in writing or is reportable by
such Person in writing (or for which any written report supplemental to
any oral report is made) to any Governmental Authority and (b) upon
becoming aware thereof, of any inquiry, proceeding, investigation, or
other action, including a notice from any agency of potential
environmental liability, of any Governmental Authority that has the likely
potential to have a Material Adverse Effect.
7.5.3. Notification of Claim Against Assets. The Parent will, and
will cause each of its Subsidiaries to, immediately upon becoming aware
thereof, notify the Administrative Agent and each of the Lenders in
writing of any setoff, claims, withholdings or other defenses to which any
of the Parent's or such Subsidiary's assets are subject if any such
setoff, claim, withholding or other defense would reasonably be expected
to have a Material Adverse Effect.
7.5.4. Notice of Litigation and Judgments. The Parent will, and will
cause each of its Subsidiaries to, give notice to the Administrative Agent
in writing within fifteen (15) days of becoming aware of any litigation or
proceedings threatened in writing or any pending litigation and
proceedings affecting the Parent or any of its Subsidiaries or to which
the Parent or any of its Subsidiaries is or becomes a party involving an
uninsured claim against the Parent or any of its Subsidiaries that could
reasonably be expected to have a Material Adverse Effect on the Parent or
any of its Subsidiaries and stating the nature and status of such
litigation or proceedings. The Parent will, and will cause each of its
Subsidiaries to, give notice to the Administrative Agent, in writing, in
form and detail satisfactory to the Administrative Agent, within ten (10)
days of any judgment not covered by insurance, final or otherwise, against
the Parent or any of its Subsidiaries in an amount in excess of
$5,000,000.
7.6. Legal Existence; Maintenance of Properties. The Parent will do or
cause to be done all things necessary to preserve and keep in full force and
effect its legal existence, rights and franchises and those of its Subsidiaries
and will not, and will not cause or permit any of its Subsidiaries to, convert
to a limited liability company or a limited liability partnership. It (a) will
cause all of its properties and those of its Subsidiaries used or useful in the
conduct of its business or the business of its Subsidiaries to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment, (b) will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Parent may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times, and (c)
will, and will cause each of its Subsidiaries to, continue to engage primarily
in the businesses now conducted by them and in related businesses; provided that
nothing in this 7.6 shall
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prevent (i) the Parent from discontinuing the operation and maintenance of any
of its properties or any of those of its Subsidiaries if such discontinuance is,
in the judgment of the Parent, desirable in the conduct of its or their business
and that do not in the aggregate have a Material Adverse Effect, (ii) the
dissolution of WIC so long as the assets of WIC are transferred simultaneously
with such dissolution to a Material Domestic Subsidiary or (iii) the Parent or
any of its Subsidiaries from consummating any transaction permitted by ss.8.5.1.
7.7. Insurance. The The Parent will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such casualties
and contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and in
amounts, containing such terms, in such forms and for such periods as may be
reasonable and prudent.
7.8. Taxes. The Parent will, and will cause each of its Subsidiaries to,
duly pay and discharge, or cause to be paid and discharged, before the same
shall become overdue, all taxes, assessments and other governmental charges
imposed upon it and its Real 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 or charge upon
any of its property; provided that any such tax, assessment, charge, levy or
claim need not be paid if the validity or amount thereof shall currently be
contested in good faith by appropriate proceedings and if the Parent or such
Subsidiary shall have set aside on its books adequate reserves with respect
thereto; and provided further that the Parent and each Subsidiary of the Parent
will pay all such taxes, assessments, charges, levies or claims forthwith upon
the commencement of proceedings to foreclose any Lien that may have attached as
security therefor.
7.9. Inspection of Properties and Books, etc.
7.9.1. General. The Parent shall permit the Lenders, through the
Administrative Agent or any of the Lenders' other designated
representatives, to visit and inspect any of the properties of the Parent
or any of its Subsidiaries, to examine the books of account (to the extent
any such materials are identified as not confidential to the Person making
such examination at such time, and if any such materials are identified as
confidential to the Person making such examination at such time, such
materials shall be handled in accordance with ss.14.5.1) of the Parent and
its Subsidiaries (and to make copies thereof and extracts therefrom), and
to discuss the affairs, finances and accounts of the Parent and its
Subsidiaries with, and to be advised as to the same by, its and their
officers all at such reasonable times and intervals and during regular
business hours as the Administrative Agent or such Lender may reasonably
request unless a Default or Event of Default shall have occurred and be
continuing (in which case the matters described in this ss.7.9.1 shall be
permitted to occur at such time and times as the Administrative Agent or
such Lender shall request).
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7.9.2. Appraisals. If an Event of Default shall have occurred and be
continuing, upon the request of the Administrative Agent, the Parent will
obtain and deliver to the Administrative Agent appraisal reports in form
and substance and from appraisers satisfactory to the Administrative
Agent, stating (a) the then current fair market, orderly liquidation and
forced liquidation values of all or any portion of the equipment or real
estate owned by the Parent or any of its Subsidiaries and (b) the then
current business value of each of the Parent and its Subsidiaries. All
such appraisals shall be conducted and made at the expense of the
Borrowers.
7.9.3. Communications with Accountants. Each of the Parent and its
Subsidiaries authorizes the Administrative Agent and the Lenders (a) to
obtain from the Parent's and its Subsidiaries' independent certified
public accountants copies of any and all accountants' management letters
prepared with respect to the Parent or any of its Subsidiaries, (b) to
communicate directly with such accountants with regard to matters
disclosed in such management letters, and (c) with the consent of the
Parent or any Subsidiary, which consent shall not be unreasonably withheld
or delayed, to communicate directly with such accountants with regard to
all other matters concerning the business, financial condition and other
affairs of the Parent or any of its Subsidiaries, provided that after the
occurrence and during the continuance of a Default or an Event of Default,
no such consent shall be required. Each of the Parent and its Subsidiaries
hereby authorize and direct such accountants to disclose to the
Administrative Agent and the Lenders all such management letters and any
and all additional financial statements and supporting financial documents
and schedules with respect to the business, financial condition and other
affairs of any of the Parent or any of its Subsidiaries in connection with
such communications. At the request of the Administrative Agent, the
Parent or the appropriate Subsidiary shall deliver a letter addressed to
such accountants instructing them to comply with the provisions of this
ss.7.9.3.
7.10. Compliance with Laws, Contracts, Licenses, and Permits. (a) The
Parent will, and will cause each of its Subsidiaries to, comply with (i) the
applicable laws and regulations wherever its business is conducted, including
all Environmental Laws, except where the failure to comply could not reasonably
be expected to have a Material Adverse Effect, (ii) the provisions of its
Governing Documents, (iii) all agreements and instruments by which it or any of
its properties may be bound, except where the failure to comply could not
reasonably be expected to have a Material Adverse Effect, and (iv) all
applicable decrees, orders and judgments, except where the failure to comply
could not reasonably be expected to have a Material Adverse Effect. If any
authorization, consent, approval, permit or license from any Governmental
Authority shall become necessary or required in order that the Parent or any of
its Subsidiaries may fulfill any of its obligations hereunder or any of the
other Loan Documents to which the Parent or such Subsidiary is a party, the
Parent will, or (as the case may be) will cause such Subsidiary to, immediately
take or cause to be taken all reasonable steps within the power of the Parent or
such Subsidiary to obtain such authorization, consent, approval,
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permit or license and furnish the Administrative Agent and the Lenders with
evidence thereof.
(b) Each of the Foreign Borrower and Watts Ocean will comply with all
notification and registration requirements of the Dutch Central Bank in
connection with all payments to be made by either the Foreign Borrower or Watts
Ocean (as applicable) under the Loan Documents to or from non-residents of The
Netherlands in accordance with the General Reporting Instructions 2000 issued by
the Dutch Central Bank pursuant to the External Financial Relations Act 1994.
7.11. Employee Benefit Plans. The Parent will (a) promptly upon filing the
same with the Department of Labor or Internal Revenue Service, furnish to the
Administrative 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, (b) promptly
upon receipt or dispatch, furnish to the Administrative 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
and (c) promptly furnish to the Administrative Agent a copy of all actuarial
statements required to be submitted under all Applicable Pension Legislation.
7.12. Use of Proceeds. The Borrowers will use the proceeds of the
Revolving Credit Loans solely for the purposes set forth in ss.7.16.1. No
portion of the proceeds of the Revolving Credit Loans shall be used to repay or
refinance all or any portion of the Indenture Debt.
7.13. Fair Labor Standards Act. The Parent will, and will cause each of
its Subsidiaries to, at all times operate its business in compliance with all
material applicable provisions of the Fair Labor Standards Act of 1938, as
amended, or other similar legislation in the jurisdiction in which the Parent or
any of its Subsidiaries operates ("Other Labor Regulations") as the case may be.
None of the inventory or services provided by the Parent or any of its
Subsidiaries is or will be produced by employees of the Parent or any of its
Subsidiaries who are employed in violation of the applicable minimum wage or
maximum hour provisions of the Fair Labor Standards Act (29 U.S.C. ss.ss.206 and
207) or any regulations promulgated thereunder or Other Labor Regulations, in
each case, as in effect from time to time.
7.14. Additional Subsidiaries. If, after the Closing Date, the Parent or
any of its Subsidiaries creates or acquires, either directly or indirectly, any
Subsidiary, it will promptly (but in any event no later than five (5) days after
such creation or acquisition) notify the Administrative Agent of such creation
or acquisition, as the case may be, and provide the Administrative Agent and the
Lenders with an updated Schedule 6.18(a) hereto and take all other action
required by ss.7.15.
7.15. New Guarantors. (a) The Parent will cause each Material Domestic
Subsidiary created, acquired or otherwise existing on or after the Closing Date
(other
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than the Domestic Borrower) to immediately become a Guarantor hereunder and
shall cause such Subsidiary to execute and deliver to the Administrative Agent,
for the benefit of the Administrative Agent and the Lenders, a Guaranty and
certified copies of such Subsidiary's Governing Documents, together with legal
opinions in form and substance satisfactory to the Administrative Agent opining
as to authorization, validity and enforceability of such Guaranty. In addition,
the Borrower will not at any time permit either (a) the aggregate revenue
generated by all Domestic Subsidiaries which are not Guarantors to exceed an
amount equal to five percent (5%) of the consolidated aggregate revenues
generated by the Parent and its Subsidiaries for the period of four (4)
consecutive fiscal quarters most recently ended, or (b) the aggregate book value
of the assets of all Domestic Subsidiaries which are not Guarantors to exceed
five percent (5%) of the then current book value of all the assets of the Parent
and its Subsidiaries. The Borrower shall require certain Domestic Subsidiaries
which are not Guarantors to become Guarantors hereunder to the extent necessary
to comply at all times with this clause (a), and such Subsidiary shall remain a
Guarantor hereunder.
(b) To the extent requested by the Administrative Agent and to the extent
legally permissible, the Parent will cause any Foreign Subsidiary which is not
otherwise a Guarantor to become a Guarantor hereunder, and to execute and
deliver to the Administrative Agent, for the benefit of the Administrative Agent
and the Lenders, a Guaranty and certified copies of such Foreign Subsidiary's
Governing Documents, together with legal opinions in form and substance
satisfactory to the Administrative Agent opining as to authorization, validity
and enforceability of such Guaranty. In addition, to the extent any Foreign
Subsidiary of the Parent becomes a Foreign Guarantor after the Closing Date
pursuant to an Election Request, such Foreign Subsidiary shall execute and
deliver to the Administrative Agent, for the benefit of the Administrative Agent
and the Lenders, a Guaranty and certified copies of such Foreign Subsidiary's
Governing Documents, together with legal opinions in form and substance
reasonably satisfactory to the Administrative Agent opining as to authorization,
validity and enforceability of such Guaranty.
(c) The Parent shall provide the Administrative Agent and the Lenders with
an updated Schedule 2 at the time any Person becomes a Guarantor hereunder.
7.16. Amendments to Governing Documents. The Parent will, and will cause
each of its Subsidiaries to, promptly furnish to the Administrative Agent any
amendment, supplement or modification to any of such Person's Governing
Documents permitted by ss.8.12.
7.17. Further Assurances. The Parent will, and will cause each of its
Subsidiaries to, cooperate with the Lenders and the Administrative Agent and
execute such further instruments and documents as the Lenders or the
Administrative Agent shall reasonably request to carry out to their satisfaction
the transactions contemplated by this Credit Agreement and the other Loan
Documents.
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7.18. Post-Closing Covenant.
(a) The Borrowers shall deliver, within fifteen (15) days of the
Closing Date, to the Administrative Agent, a perfection certificate for
each of the Domestic Borrower and the Guarantors in existence on the
Closing Date (other than the Foreign Guarantors) indicating locations of
assets and certain other corporate information of such Persons, each in
form and substance satisfactory to the Administrative Agent.
(b) The Borrowers shall deliver, within (30) days of the Closing
Date, to the Administrative Agent and each of the Lenders a favorable
legal opinion addressed to the Lenders and the Administrative Agent from
local counsel to those Guarantors incorporated in Arizona, California, New
York and New Hampshire, each to be in form and substance satisfactory to
the Administrative Agent.
8. CERTAIN NEGATIVE COVENANTS.
Each of the Parent and the Borrowers covenants and agrees that, so long as
any Revolving Credit Loan or Revolving Credit Note is outstanding or any Lender
has any obligation to make any Revolving Credit Loans:
8.1. Restrictions on Indebtedness. The Parent will not, and will not
permit any of its Subsidiaries to, create, incur, assume, guarantee or be or
remain liable, contingently or otherwise, with respect to any Indebtedness other
than:
(a) Indebtedness to the Lenders and the Administrative Agent arising
under any of the Loan Documents;
(b) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the ordinary
course of business;
(c) (i) the Indenture Debt and (ii) any refinancings of the
Indenture Debt (the "Refinanced Indenture Debt"), provided that (i) the
Refinanced Indenture Debt is unsecured and is not guaranteed by any
Subsidiary of the Parent, (ii) such Refinanced Indenture Debt is in an
aggregate principal amount equal to or less than the aggregate principal
amount of the Indebtedness being refinanced or, if such Refinanced
Indenture Debt is in an aggregate principal amount greater than the
aggregate principal amount of the Indebtedness being refinanced, such
excess amount is permitted by ss.8.1(d), (iii) the Refinanced Indenture
Debt has subordination terms which are substantially the same as in the
Indenture Debt, (iv) the material terms and conditions of such Refinanced
Indenture Debt are less restrictive than the terms and conditions set
forth in this Credit Agreement with respect to the Obligations but no more
restrictive than the terms and conditions of the Indenture Debt as
reasonably determined by the Administrative Agent, and (v) final copies of
all documents, agreements and instruments relating thereto have been
delivered to the Administrative Agent
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and the Lenders (for the purposes of clarification, if any Refinanced
Indenture Debt has an interest rate higher than the interest rate
applicable to the Senior Notes, such Refinanced Indenture Debt shall not
be deemed more restrictive than the Indenture Debt solely because of such
higher interest rate);
(d) unsecured Indebtedness for borrowed money and credit received
(including Capitalized Leases, letters of credit issued for the account of
the Parent or any of its Subsidiaries, Indebtedness incurred pursuant to
Sale and Leaseback Transactions and the aggregate amount of Refinanced
Indenture Debt in excess of the Indebtedness being refinanced pursuant to
ss.8.1(c)), provided that at no time shall the aggregate amount of such
Indebtedness exceed twenty percent (20%) of Consolidated Total Assets
determined as of the last day of the fiscal year of the Parent most
recently ended; and provided, further, the Parent or such Subsidiary, as
the case may be, shall be permitted to make an intercompany loan to any of
its Subsidiaries (other than an Immaterial Domestic Subsidiary) with the
proceeds of such Indebtedness so long as (x) such Person makes such
intercompany loan within three (3) days of receiving the proceeds of such
Indebtedness and (y) the amount of such intercompany loan does not exceed
the amount of the proceeds so received by such Person;
(e) unsecured Indebtedness of Watts Germany to a non-affiliated
Person in an aggregate amount not to exceed $30,000,000 at any time
outstanding;
(f) Indebtedness in respect of Hedging Agreements so long as such
arrangements are in the ordinary course of business and are not for
speculative purposes;
(g) Indebtedness existing on the date hereof and listed and
described on Schedule 8.1 hereto;
(h) unsecured Indebtedness of (i) the Domestic Borrower or a
Guarantor (which is a Material Domestic Subsidiary) to the Domestic
Borrower or Guarantor (which is a Material Domestic Subsidiary) so long as
such Person creating, incurring, assuming, guaranteeing or otherwise
becoming liable for such Indebtedness remains a Subsidiary of the Parent
and the Domestic Borrower or, as the case may be, a Guarantor (which is a
Material Domestic Subsidiary) hereunder and (ii) a Foreign Guarantor to
the Foreign Borrower so long as such Person creating, incurring, assuming,
guaranteeing or otherwise becoming liable for such Indebtedness remains a
Subsidiary of the Parent and a Guarantor hereunder, provided, however, the
aggregate outstanding amount of Indebtedness of the Foreign Guarantors to
the Foreign Borrower shall not exceed $50,000,000 at any time and the
Foreign Borrower shall make such intercompany loan with the proceeds of
Revolving Credit Loans (it being understood that the Indebtedness
permitted by this ss.8.1(h) is in addition to Indebtedness permitted by
ss.8.1(d) and this ss.8.1(h) in no way limits the amount of intercompany
loans that may be made under ss.8.1(d));
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(i) Indebtedness of Watts Germany to a Borrower consisting of an
intercompany loan to the extent permitted byss.8.3(k); and
(j) Indebtedness of (A) a Subsidiary of the Parent which is not a
Guarantor to a Borrower or a Guarantor which is not otherwise permitted by
ss.8.1(i), or (B) a Foreign Guarantor to the Foreign Borrower which is not
otherwise permitted by ss.8.1(d) or (h)(ii), provided, that the aggregate
outstanding amount of such Indebtedness shall not exceed $20,000,000 at
any time;
provided, however, notwithstanding the foregoing provisions of this ss.8.1, all
such Indebtedness permitted by this ss.8.1 must in any event qualify at all
times as "Debt" (as such term is defined in the Indenture Debt Documents)
permitted to be incurred pursuant to the Senior Note Indenture (or any indenture
or other agreement governing any Replacement Indenture Debt).
8.2. Restrictions on Liens.
8.2.1. Permitted Liens. The Parent will not, and will not permit any
of its Subsidiaries to, (a) create or incur or suffer to be created or
incurred or to exist any Lien upon any of its property or assets of any
character whether now owned or hereafter acquired, or upon the income or
profits therefrom; (b) transfer any of such property or assets or the
income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority
to payment of its general creditors; (c) acquire, or agree or have an
option to acquire, any property or assets upon conditional sale or other
title retention or purchase money security agreement, device or
arrangement; (d) suffer to exist for a period of more than thirty (30)
days after the same shall have been incurred any Indebtedness or claim or
demand against it that if unpaid might by law or upon bankruptcy or
insolvency, or otherwise, be given any priority whatsoever over its
general creditors; or (e) sell, assign, pledge or otherwise transfer any
"receivables" as defined in clause (g) of the definition of the term
"Indebtedness," with or without recourse; provided that the Parent and its
Subsidiaries may create or incur or suffer to be created or incurred or to
exist:
(i) Liens in favor of any Borrower or on all or part of the
assets of Subsidiaries of such Borrower or Guarantor (other than a
Borrower or Guarantor) securing Indebtedness owing by Subsidiaries
of such Borrower or Guarantor to such Borrower or Guarantor;
(ii) Liens to secure taxes, assessments and other government
charges in respect of obligations not overdue or Liens on properties
to secure claims for labor, material or supplies in respect of
obligations not overdue;
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(iii) 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;
(iv) Liens on properties in respect of judgments or awards
that have been in force for less than the applicable period for
taking an appeal so long as execution is not levied thereunder or in
respect of which the Parent or such Subsidiary shall at the time in
good faith be prosecuting an appeal or proceedings for review and in
respect of which a stay of execution shall have been obtained
pending such appeal or review;
(v) Liens of carriers, warehousemen, mechanics and
materialmen, and other like Liens on properties, in existence less
than one hundred twenty (120) days from the date of creation thereof
in respect of obligations not overdue;
(vi) encumbrances on Real Estate consisting of easements,
rights of way, zoning restrictions, restrictions on the use of real
property and defects and irregularities in the title thereto,
landlord's or lessor's liens and other minor Liens, provided that
none of such Liens (A) interferes materially with the use of the
property affected in the ordinary conduct of the business of the
Borrower and its Subsidiaries, and (B) individually or in the
aggregate have a Material Adverse Effect;
(vii) Liens existing on the date hereof and listed on Schedule
8.2 hereto; and
(viii) purchase money security interests in or purchase money
mortgages on real or personal property acquired (in the case of
purchase money security interests) or leased (in the case of
Capitalized Leases) after the date hereof to secure purchase money
Indebtedness or Capitalized Leases of the type and amount permitted
by ss.8.1(d), incurred in connection with the acquisition of such
property, which security interests or mortgages cover only the real
or personal property so acquired; provided that the amount of such
Indebtedness or Capitalized Leases so secured shall not exceed an
aggregate amount equal to $15,000,000.
8.2.2. Restrictions on Negative Pledges and Upstream Limitations.
The Parent will not, nor will it permit any of its Subsidiaries to, (a)
enter into or permit to exist any arrangement or agreement (excluding the
Credit Agreement and the other Loan Documents) which directly or
indirectly prohibits the Parent or any of its Subsidiaries from creating,
assuming or incurring any Lien upon its properties, revenues or assets or
those of any of its Subsidiaries whether now owned or hereafter acquired,
or (b) enter into any agreement, contract or arrangement (excluding the
Credit Agreement and the other Loan Documents) restricting the ability of
any Subsidiary of the Parent, any Borrower or other
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Guarantor to pay or make dividends or distributions in cash or kind to the
Parent, any Borrower or other Guarantor or to make loans, advances or
other payments of whatsoever nature to the Parent, any Borrower or other
Guarantor, or to make transfers or distributions of all or any part of its
assets to the Parent, any Borrower or other Guarantor, in each case other
than (i) restrictions on specific assets which assets are the subject of
purchase money security interests to the extent permitted under ss.8.2.1,
and (ii) customary anti-assignment provisions contained in leases and
licensing agreements entered into by the Parent or such Subsidiary in the
ordinary course of its business.
8.3. Restrictions on Investments. The Parent will not, and will not permit
any of its Subsidiaries to, make or permit to exist or to remain outstanding any
Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United States
of America that mature within one (1) year from the date of purchase by
the Borrower;
(b) demand deposits, certificates of deposit, bank acceptances and
time deposits of United States banks having total assets in excess of
$1,000,000,000 and any obligations issued by any state of the United
States of America or any political subdivision of any such state or any
public instrumentality thereof which are rated and the ratings for which
are not less than "Aaa" if rated by Moody's or "AAA" if rated by S&P;
(c) (i) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States of
America or any state thereof that at the time of purchase have been rated
and the ratings for which are not less than "P 1" if rated by Moody's, and
not less than "A 1" if rated by S&P and (ii) shares with any so-called
"money market fund" provided that such fund is registered under the
Investment Company Act of 1940, has net assets of at least $100,000,000,
has an investment portfolio with an average maturity of 30 days or less,
is not considered to be a "high yield" fund, and invests substantially all
of its assets in Investments of the type listed in clauses (a), (b) and
(c)(i) above;
(d) Investments existing on the date hereof and listed on Schedule
8.3(d) hereto;
(e) Investments with respect to Indebtedness permitted by (i)
ss.8.1(d) so long as such entities remain Subsidiaries of the Parent and
(ii) ss.8.1(h) so long as such entities remain Subsidiaries of the Parent
and a Borrower or a Guarantor hereunder;
(f) Investments consisting of the Guaranty or Investments by the
Parent, any Borrower or Guarantor in the Domestic Borrower or Guarantor
(other than the Parent) so long as such Person in which such Investment is
made
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is either the Domestic Borrower or, as the case may be, a Guarantor
hereunder existing on the Closing Date;
(g) Investments consisting of promissory notes received as proceeds
of asset dispositions permitted byss.8.5.2;
(h) (i) an initial Investment of $7,800,000 in a joint venture to be
entered into by the Domestic Borrower with Shida Pipe for the purpose of
manufacturing flexible connection and related plumbing equipment and (ii)
other Investments (other than Investments as of the Closing Date listed on
Schedule 8.3(h) hereto and the initial Investment referenced in clause (i)
above), in joint ventures in lines of business that are the same or
similar to the line of business in which the Parent is engaged, not to
exceed $25,000,000 in the aggregate at any time outstanding;
(i) Investments in Permitted Acquisitions;
(j) Investments consisting of (i) loans and advances to employees
for moving, entertainment, travel and other similar expenses in the
ordinary course of business and (ii) loans to employees of the Parent
pursuant to the terms of the Parent's non-qualified stock option plan,
secured by pledges of the stock of the Parent owned by such employee;
provided that the aggregate outstanding amount of such Investments
permitted pursuant to this ss.8.3(j) shall not exceed $3,000,000 at any
time; and
(k) a one-time Investment by any Borrower in Watts Germany (whether
directly or indirectly through another Borrower) in the form of either an
intercompany loan or a capital contribution in an amount not to exceed the
Dollar Equivalent of 20,000,000e, provided that (i) such amount is used by
Watts Germany toward the retirement of existing Indebtedness and (ii)
Watts Germany remains a Subsidiary of the Parent;
provided, however, notwithstanding anything to the contrary contained herein,
all Investments made pursuant to this ss.8.3 must be permitted to be made
pursuant to the Senior Note Indenture (or any indenture or other agreement
governing any Replacement Indenture Debt).
8.4. Restricted Payments. Neither the Parent nor any of its Subsidiaries
will make any Restricted Payments except that, so long as no Default or Event of
Default then exists or would result from such payment, the Parent and its
Subsidiaries may make Distributions.
8.5. Merger, Consolidation and Disposition of Assets.
8.5.1. Mergers and Acquisitions. The Parent will not, and will not
permit any of its Subsidiaries to, become a party to any merger or
consolidation, or agree to or effect any asset acquisition or stock
acquisition (other than the
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acquisition of assets in the ordinary course of business consistent with
past practices) except, so long as no Default or Event of Default has
occurred and is continuing or would result from such merger, consolidation
or acquisition (including, without limitation, taking into account any
borrowings anticipated to be made to consummate such acquisition), (a) a
merger or consolidation of two or more Borrowers so long as each entity
that survives any such merger or consolidation is a Borrower, (b) a merger
or consolidation of one or more of the Subsidiaries of a Borrower with and
into a Borrower, so long as, in connection with any such merger or
consolidation, a Borrower is the surviving entity, (c) a merger or
consolidation of two or more Guarantors so long as each entity that
survives any such merger or consolidation is a Guarantor, (d) a merger or
consolidation of a Guarantor and a Subsidiary of the Parent (other than a
Borrower) so long as each entity that survives any such merger or
consolidation is a Guarantor, or (e) any merger or asset or stock
acquisition by the Parent or any of its Subsidiaries of Persons (or, in
the case of an asset acquisition, assets of a Person) in the same or a
similar line of business as the Parent (a "Permitted Acquisition") so long
as
(i) the Parent has provided the Administrative Agent with prior
written notice of such acquisition, which notice shall include a
reasonably detailed description of such Permitted Acquisition;
(ii) the board of directors and (if required by applicable law) the
shareholders, or the equivalent thereof, of each of the Parent or the
applicable Subsidiary and of the Person to be acquired has approved such
merger, consolidation or acquisition;
(iii) any Indebtedness incurred or assumed in connection with such
Permitted Acquisition (including, without limitation, any assumed
Indebtedness, earnout arrangements, seller Indebtedness and non-compete
payments) shall have been permitted to be incurred or assumed pursuant to
ss.8.1;
(iv) not less than five (5) days prior to the consummation of the
proposed acquisition, the Parent shall have delivered to the
Administrative Agent (A) a Compliance Certificate prepared on a Pro Forma
Basis demonstrating (1) that the Leverage Ratio immediately after giving
effect to such proposed acquisition shall not exceed 2.75:1.00 (provided,
however, that the Parent shall only be required to comply with such
Leverage Ratio and to deliver this certification required by this
subparagraph (iv)(A)(1) to the extent that the (x) the purchase price for
such proposed acquisition (or series of related proposed acquisitions) is
$50,000,000 or more and (y) all or any portion of the purchase price is
payable in anything other than Capital Stock of the Parent (and such
Capital Stock shall have not redemption or repurchase rights prior to a
date which is one (1) year after the Revolving Credit Loan Maturity Date
and shall not have the ability to convert into any form of Indebtedness)
and (2) compliance with the financial covenants set forth in ss.ss.9.1
(but only for acquisitions in which the Parent does not need to comply
with (iv)(A)(1) above), 9.2 and 9.3 and (B) a certificate from the chief
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financial officer of the Parent to the effect that (1) the Parent and its
Subsidiaries, on a consolidated and consolidating basis, will be solvent
both before and after consummating the Permitted Acquisition and (2) no
Default or Event of Default then exists or would result after giving
effect to the Permitted Acquisition;
(v) in the event of a stock acquisition, the Person so acquired
shall become a wholly owned Subsidiary of the Parent, shall comply with
the terms and conditions set forth in ss.7.15;
(vi) the business to be acquired would not subject the
Administrative Agent or any Lender to regulatory or third party approvals
in connection with the exercise of any of its rights and remedies under
this Credit Agreement or any other Loan Document;
(vii) no contingent obligations or liabilities will be incurred or
assumed in connection with such acquisition which could reasonably be
expected to have a material adverse effect on the business condition
(financial or otherwise), operations, performance or properties of the
Borrowers, individually or the Parent or its Subsidiaries, taken as a
whole;
(viii) the aggregate amount of the purchase price for any single
acquisition or series of related acquisitions which is payable in anything
other than the Capital Stock of the Parent (and such Capital Stock shall
have no redemption or repurchase rights prior to a date which is one (1)
year after the Revolving Credit Loan Maturity Date and shall not have the
ability to convert into any form of Indebtedness) shall not exceed
$75,000,000; and
(ix) the aggregate amount of the purchase price for all acquisitions
over the life of this Credit Agreement which is payable in anything other
than the Capital Stock of the Parent (and such Capital Stock shall have no
redemption or repurchase rights prior to a date which is one (1) year
after the Revolving Credit Loan Maturity Date and shall not have the
ability to convert into any form of Indebtedness) shall not exceed
$150,000,000.
8.5.2. Disposition of Assets. The Parent will not, and will not
permit any of its Subsidiaries to, become a party to or agree to or effect
any disposition of assets, other than (a) the sale of inventory, the
licensing of intellectual property and the disposition of obsolete assets,
in each case in the ordinary course of business consistent with past
practices, and (b) so long as no Default or Event of Default has occurred,
the disposition or sale of assets, in one or more arms' length
transactions, having a cumulative aggregate sales price not to exceed (A)
$100,000,000 in any fiscal year, and (B) $150,000,000 over the life of
this Credit Agreement; provided that, the value as of the date of
disposition of any noncash assets received by the Parent or any of its
Subsidiaries in payment of any portion of the purchase price shall be
equal to the fair market value of such assets. Notwithstanding anything to
the contrary contained in this ss.8.5.2, the Parent and its Subsidiaries
shall not be permitted to dispose of any assets or take (or omit to
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take) any action in connection with an Asset Sale or other asset
disposition or engage in any other transaction which action (or omission)
would require or result in any repayment, repurchase or redemption (or any
mandatory offer to repay, repurchase or redeem) by the Parent or any of
its Subsidiaries of the Senior Notes pursuant to the Senior Note Indenture
or any other notes issued under any agreement governing the Refinanced
Indenture Debt or would violate the provisions of any of the Indenture
Debt Documents.
8.6. Sale and Leaseback. The Parent will not, and will not permit any of
its Subsidiaries to, enter into any arrangement, directly or indirectly, whereby
the Parent 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
that the Parent or any of its Subsidiaries intends to use for substantially the
same purpose as the property being sold or transferred (each a "Sale and
Leaseback Transaction"); provided that, so long as no Default or Event of
Default has occurred and is continuing, the Parent and its Subsidiaries may
consummate Sale and Leaseback Transactions with respect to property the net book
value of which (determined on a cumulative basis from the Closing Date) shall
not exceed $15,000,000 in the aggregate.
8.7. Compliance with Environmental Laws. Except in compliance with all
applicable Environmental Laws or except as could not reasonably be expected to
have a Material Adverse Effect, the Parent will not, and will not permit any of
its Subsidiaries to, (a) use any of the Real Estate or any portion thereof for
the handling, processing, storage or disposal of Hazardous Substances, (b) cause
or permit to be located on any of the Real Estate any underground tank or other
underground storage receptacle for Hazardous Substances, (c) generate any
Hazardous Substances on any of the Real Estate, or (d) conduct any activity at
any Real Estate or use any Real Estate in any manner so as to cause a Release or
threatened Release of Hazardous Substances on, upon or into the Real Estate. In
addition, except as could not reasonably be expected to have a Material Adverse
Effect, the Parent will not, and will not permit any of it Subsidiaries to
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.
8.8. Employee Benefit Plans. Neither the Parent nor any ERISA Affiliate
will:
(a) engage in any "prohibited transaction" within the meaning of
ss.406 of ERISA or ss.4975 of the Code which could result in a material
liability for the Parent or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated
funding deficiency", as such term is defined in ss.302 of ERISA, whether
or not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which, could
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result in the imposition of a lien or encumbrance on the assets of the
Parent or any of its Subsidiaries pursuant to ss.302(f) or ss.4068 of
ERISA; or
(d) amend any Guaranteed Pension Plan in circumstances requiring the
posting of security pursuant toss.307 of ERISA orss.401(a)(29) of the
Code;
(e) permit or take any action which would result in the aggregate
benefit liabilities (with the meaning of ss.4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of the aggregate assets of
such Plans, disregarding for this purpose the benefit liabilities and
assets of any such Plan with assets in excess of benefit liabilities, by
more than the amount set forth in ss.6.15.3; or
(f) permit or take any action which would contravene any Applicable
Pension Legislation.
8.9. Business Activities. The Parent will not, and will not permit any of
its Subsidiaries to, engage directly or indirectly (whether through Subsidiaries
or otherwise) in any type of business other than the businesses conducted by
them on the Closing Date and in related businesses.
8.10. Fiscal Year. The Parent will not, and will not permit any of it
Subsidiaries to, change the date of the end of its fiscal (or financial) year
from that set forth in ss.6.4.1.
8.11. Transactions with Affiliates. The Parent will not, and will not
permit any of its Subsidiaries to, engage in any transaction with any Affiliate
(other than for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any such Affiliate or, to the
knowledge of the Parent, any corporation, partnership, trust or other entity in
which any such Affiliate has a substantial interest or is an officer, director,
trustee or partner, on terms more favorable to such Person than would have been
obtainable on an arm's-length basis in the ordinary course of business.
8.12. Modification of Governing Documents. Neither the Parent nor any of
its Subsidiaries will consent to or agree to any amendment, supplement or other
modification to the Governing Documents without the prior written consent of the
Administrative Agent unless such amendment, supplement or modification could not
reasonably be expected to have a Material Adverse Effect on the Administrative
Agent's or the Lenders rights under the Loan Documents or the Parent's or any of
its Subsidiaries obligations under the Loan Documents.
8.13. Indenture Debt. The Parent will not, and will not permit any of its
Subsidiaries to amend, supplement or otherwise modify the terms of any of the
Indenture Debt Documents (provided that the Senior Notes and the Senior Notes
Indenture shall be permitted to be refinanced pursuant to ss.8.1(c)) or prepay,
redeem or repurchase (or offer to prepay, redeem or repurchase) any of the
Indenture Debt.
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9. FINANCIAL COVENANTS.
Each of the Parent and the Borrowers covenants and agrees that, so long as
any Revolving Credit Loan or Revolving Credit Note is outstanding or any Lender
has any obligation to make any Revolving Credit Loans:
9.1. Leverage Ratio. Neither the Parent nor any Borrower will permit the
Leverage Ratio to exceed 3.00:1.00 at any time.
9.2. Fixed Charge Coverage Ratio. Neither the Parent nor any Borrower will
permit the Fixed Charge Coverage Ratio at the end of any fiscal quarter to be
less than 3.00:1.00.
9.3. Consolidated Net Worth. Neither the Parent nor any Borrower will
permit Consolidated Net Worth at any time to be less than the sum of (a)
$200,000,000 plus (b) on a cumulative basis, fifty percent (50%) of positive
Consolidated Net Income for each fiscal quarter beginning with the fiscal
quarter ending March 31, 2002 plus (c) one hundred percent (100%) of the
proceeds of any sales by the Parent of (i) equity securities issued by the
Parent or (ii) warrants or subscription rights for equity securities issued by
the Parent.
10. CLOSING CONDITIONS.
The obligations of the Lenders to make the initial Revolving Credit Loans
shall be subject to the satisfaction of the following conditions precedent on or
prior to March 15, 2002:
10.1. Loan Documents, etc.
10.1.1. Loan Documents. Each of the Loan Documents shall have been
duly executed and delivered by the respective parties thereto, shall be in
full force and effect and shall be in form and substance satisfactory to
each of the Lenders. Each Lender shall have received a fully executed copy
of each such Loan Document.
10.1.2. Indenture Debt Documents. Copies of the Indenture Debt
Documents in effect on the Closing Date shall continue to be in full force
and effect. Each Lender shall have received a fully executed copy of each
such document.
10.2. Certified Copies of Governing Documents. Each of the Lenders shall
have received from each of the Borrowers and the Guarantors a copy, certified by
a duly authorized officer of such Person to be true and complete on the Closing
Date, of each of its Governing Documents as in effect on such date of
certification.
10.3. Corporate or Other Action. All corporate (or other) action necessary
for the valid execution, delivery and performance by the Parent and each of its
Subsidiaries of this Credit Agreement and the other Loan Documents to which it
is or is to become a
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party shall have been duly and effectively taken, and evidence thereof
satisfactory to the Lenders shall have been provided to each of the Lenders.
10.4. Incumbency Certificate. Each of the Lenders shall have received from
each of the Borrowers and the Guarantors an incumbency certificate, dated as of
the Closing Date, signed by a duly authorized officer of such Person, 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 Person, each of the
Loan Documents to which such Person is or is to become a party; (b) in the case
of the Borrowers, to make Loan Requests and Conversion Requests; and (c) to give
notices and to take other action on its behalf under the Loan Documents.
10.5. Uniform Commercial Code Searches. The Administrative Agent shall
have received the results of Uniform Commercial Code searches (and the
equivalent thereof in all applicable foreign jurisdictions) indicating no Liens
other than Permitted Liens, and otherwise with form and substance satisfactory
to the Administrative Agent.
10.6. Certificates of Insurance. The Administrative Agent shall have
received (a) a certificate of insurance from an independent insurance broker
dated as of the Closing Date, identifying insurers, types of insurance,
insurance limits, and policy terms, and otherwise describing the insurance
obtained in accordance with ss.7.7 and (b) certified copies of all policies
evidencing such insurance (or certificates therefore signed by the insurer or an
agent authorized to bind the insurer).
10.7. Opinions of Counsel. Each of the Lenders and the Administrative
Agent shall have received a favorable legal opinion addressed to the Lenders and
the Administrative Agent, dated as of the Closing Date, in form and substance
satisfactory to the Lenders and the Administrative Agent, from:
(i) Goodwin Procter LLP, counsel to the Parent and its Subsidiaries
(other than the Foreign Borrower);
(ii) Clifford Chance Amsterdam, local counsel in The Netherlands to
the Foreign Borrower and Watts Ocean; and
(iii) Rechtsanwaltsozietat Studio Legale Associato Brandstatter,
local counsel in Italy to Watts Cazzaniga;
10.8. Payment of Fees. The Borrowers shall have paid to the Lenders or the
Administrative Agent, as appropriate, the Fees pursuant to ss.ss.4.1 and 4.2.
10.9. Payoff Letter. The Administrative Agent shall have received a payoff
letter from Fleet National Bank, as Administrative Agent, indicating the amount
of the loan obligations of the Parent, WIC and the Domestic Borrower to the
Banks party to the Existing Credit Agreement to be discharged on the Closing
Date, together with evidence satisfactory to the Administrative Agent that the
obligations under the Existing Credit
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Agreement have been repaid in full on or prior to the Closing Date and all
commitments thereunder have been terminated.
10.10. Disbursement Instructions. The Administrative Agent shall have
received disbursement instructions from the Borrower, indicating that a portion
of the proceeds of the Revolving Credit Loans, in an amount equal to the
aggregate loan obligations of the Borrower to the "Banks" party to Existing
Credit Agreement are paid to Fleet National Bank, as administrative agent for
such Banks.
11. CONDITIONS TO ALL BORROWINGS.
The obligations of the Lenders to make any Revolving Credit Loans, whether
on or after the Closing Date, shall also be subject to the satisfaction of the
following conditions precedent:
11.1. Representations True; No Event of Default. Each of the
representations and warranties of any of the Parent and its Subsidiaries
contained in this Credit Agreement, the other Loan Documents or in any document
or instrument delivered pursuant to or in connection with this Credit Agreement
shall be true as of the date as of which they were made and shall also be true
at and as of the time of the making of such Revolving Credit Loan, with the same
effect as if made at and as of that time (except to the extent of changes
resulting from transactions contemplated or permitted by this Credit Agreement
and the other Loan Documents and changes occurring in the ordinary course of
business that singly or in the aggregate are not materially adverse, and to the
extent that such representations and warranties relate expressly to an earlier
date) and no Default or Event of Default shall have occurred and be continuing.
11.2. 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 Revolving
Credit Loan.
11.3. Proceedings and Documents. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be satisfactory in substance and in
form to the Lenders and to the Administrative Agent and the Administrative
Agent's Special Counsel, and the Lenders, the Administrative Agent and such
counsel shall have received all information and such counterpart originals or
certified or other copies of such documents as the Administrative Agent may
reasonably request.
12. EVENTS OF DEFAULT; ACCELERATION; ETC.
12.1. Events of Default and Acceleration. If any of the following events
("Events of Default" or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice or lapse of time, "Defaults") shall occur:
(a) any Borrower shall fail to pay any principal of the Revolving
Credit Loans when the same shall become due and payable, whether at the
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stated date of maturity or any accelerated date of maturity or at any
other date fixed for payment;
(b) any Borrower or any Guarantor shall fail to pay any interest on
the Revolving Credit Loans, any Fees, or other sums due hereunder or under
any of the other Loan Documents, within five (5) days after the same shall
have 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;
(c) the Parent or any of its Subsidiaries shall fail to comply with
any of its covenants contained in ss.ss.7.1, 7.4, 7.5.1, the first
sentence of 7.6, 7.9.1, 7.12, 7.14, 7.15, 7.18, 8 or 9;
(d) the Parent or any of its Subsidiaries shall fail to perform any
term, covenant or agreement contained herein or in any of the other Loan
Documents (other than those specified elsewhere in this ss.12.1) for
thirty (30) days after written notice of such failure has been given to
the Parent by the Administrative Agent or any Lender entitled to give such
notice;
(e) any representation or warranty of the Parent or any of its
Subsidiaries in this Credit Agreement or any of the other Loan Documents
or in any other document or instrument delivered pursuant to or in
connection with this Credit 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 Parent or any of its Subsidiaries shall (i) fail to pay at
maturity, or within any applicable period of grace, any (A) obligation for
borrowed money or credit received or in respect of any Capitalized Leases,
in an amount in excess of $10,000,000, or (B) obligation in respect of any
of the Indenture Debt, or (ii) fail to observe or perform any material
term, covenant or agreement contained in any agreement by which it is
bound, evidencing or securing borrowed money or credit received or in
respect of any Capitalized Leases, in an amount in excess of $10,000,000,
for such period of time as would permit (assuming the giving of
appropriate notice if required) the holder or holders thereof or of any
obligations issued thereunder to accelerate the maturity thereof, or any
such holder or holders shall rescind or shall have a right to rescind the
purchase of any such obligations;
(g) the Parent or any of its Subsidiaries shall make an assignment
for the benefit of creditors, or admit in writing its inability to pay or
generally fail to pay its debts as they mature or become due, or shall
petition or apply for the appointment of a trustee or other custodian,
liquidator or receiver of the Parent or any of its Subsidiaries or of any
substantial part of the assets of the Parent or any of its Subsidiaries or
shall commence any case or other proceeding relating to the Parent or any
of its Subsidiaries under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar
law of any jurisdiction, now or hereafter in effect, or shall take any
action
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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 the Parent or any of its
Subsidiaries and the Parent or any of its Subsidiaries shall indicate its
approval thereof, consent thereto or acquiescence therein or such petition
or application shall not have been dismissed within forty-five (45) days
following the filing thereof;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Parent or any of its
Subsidiaries bankrupt or insolvent, or approving a petition in any such
case or other proceeding, or a decree or order for relief is entered in
respect of the Parent or any Subsidiary of the Parent in an involuntary
case under federal bankruptcy laws as now or hereafter constituted;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any final
judgment against the Parent or any of its Subsidiaries that, with other
outstanding final judgments, undischarged, against the Parent or any of
its Subsidiaries exceeds in the aggregate $5,000,000;
(j) (i) the holders of all or any part of the Indenture Debt or the
Refinanced Indenture Debt (if any) shall accelerate the maturity of all or
any part of the Indenture Debt or the Refinanced Indenture Debt (if any),
as the case may be, or (ii) the Indenture Debt or the Refinanced Indenture
Debt (if any) shall be prepaid, redeemed or repurchased in whole or in
part or an offer to prepay, redeem or repurchase the Indenture Debt or the
Refinanced Indenture Debt (if any), as the case may be, in whole or in
part shall have been made (provided, any regularly scheduled repayment of
the Indenture Debt made on the maturity date thereof shall not be
considered a prepayment hereunder);
(k) if any of the Loan Documents shall be cancelled, terminated,
revoked or rescinded other than in accordance with the terms thereof or
with the express prior written agreement, consent or approval of the
Lenders, 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 the Parent or any of its Subsidiaries party thereto or
any of their respective stockholders, or any court or any other
governmental or regulatory authority or agency of competent jurisdiction
shall make a determination that, or issue a judgment, order, decree or
ruling to the effect that, any one or more of the Loan Documents is
illegal, invalid or unenforceable in accordance with the terms thereof;
(l) the Parent 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 Parent 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
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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
Administrative Agent determines in its reasonable discretion that such
event (A) could be expected to result in liability of the Parent 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;
(m) the Parent 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 thirty (30) days;
(n) there shall occur any strike, lockout, labor dispute, embargo,
condemnation, act of God or public enemy, or other casualty, which in any
such case causes, for more than fifteen (15) consecutive days, the
cessation or substantial curtailment of revenue producing activities at
any facility of the Parent or any of its Subsidiaries if such event or
circumstance is not covered by business interruption insurance and would
have a Material Adverse Effect;
(o) there shall occur the loss, suspension or revocation of, or
failure to renew, any license or permit now held or hereafter acquired by
the Parent or any of its Subsidiaries if such loss, suspension, revocation
or failure to renew would have a Material Adverse Effect; or
(p) a Change of Control shall occur;
then, and in any such event, so long as the same may be continuing, the
Administrative Agent may, and upon the request of the Required Lenders shall, by
notice in writing to the Borrowers declare all amounts owing with respect to
this Credit Agreement, the Revolving Credit 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 each of the Borrowers; provided that in the event
of any Event of Default specified in ss.ss.12.1(g) or 12.1(h), all such amounts
shall become immediately due and payable automatically and without any
requirement of notice from the Administrative Agent or any Lender.
12.2. Termination of Commitments. If any one or more of the Events of
Default specified in ss.12.1(g) or ss.12.1(h) shall occur, any unused portion of
the credit hereunder shall forthwith terminate and each of the Lenders shall be
relieved of all further obligations to make Revolving Credit Loans to the
Borrowers. If any other Event of
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Default shall have occurred and be continuing, the Administrative Agent may and,
upon the request of the Required Lenders, shall, by notice to the Borrowers,
terminate the unused portion of the credit hereunder, and upon such notice being
given such unused portion of the credit hereunder shall terminate immediately
and each of the Lenders shall be relieved of all further obligations to make
Revolving Credit Loans. No termination of the credit hereunder shall relieve the
Parent or any of its Subsidiaries of any of the Obligations.
12.3. Remedies. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Lenders shall have
accelerated the maturity of the Revolving Credit Loans pursuant to ss.12.1, each
Lender, if owed any amount with respect to the Revolving Credit Loans, may, with
the consent of the Required Lenders but not otherwise, proceed to protect and
enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Credit Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations to such Lender are evidenced,
including as permitted by applicable law the obtaining of the ex parte
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Lender. No remedy herein conferred upon any
Lender or the Administrative Agent or the holder of any Revolving Credit 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.
12.4. Distribution of Proceeds. In the event that, following the
occurrence or during the continuance of any Default or Event of Default, the
Administrative Agent or any Lender, as the case may be, receives any monies in
connection with the enforcement of its rights hereunder or under any of the
other Loan Documents, such monies shall be distributed for application as
follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Administrative Agent for or in respect of all
reasonable costs, expenses, disbursements and losses which shall have been
incurred or sustained by the Administrative Agent in connection with the
collection of such monies by the Administrative Agent, for the exercise,
protection or enforcement by the Administrative Agent of all or any of the
rights, remedies, powers and privileges of the Administrative Agent under
this Credit Agreement or any of the other Loan Documents in support of any
provision of adequate indemnity to the Administrative Agent against any
taxes or liens which by law shall have, or may have, priority over the
rights of the Administrative Agent to such monies;
(b) Second, to all other Obligations, other than the Obligations
arising under any Hedging Agreement, in such order or preference as the
Required Lenders may determine; provided, however, that (i) distributions
shall be made (A) pari passu among Obligations with respect to the
Administrative Agent's Fee and all other Obligations and (B) with respect
to each type of Obligation owing
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to the Lenders, such as interest, principal, fees and expenses, among the
Lenders pro rata, and (ii) the Administrative Agent may in its discretion
make proper allowance to take into account any Obligations not then due
and payable;
(c) Third, to obligations of the Borrowers and their Subsidiaries to
any of the Lenders and/or the Administrative Agent with respect to Hedging
Agreements; and
(d) Third, upon payment and satisfaction in full or other provisions
for payment in full satisfactory to the Lenders and the Administrative
Agent of all of the Obligations, to the payment of any obligations
required to be paid pursuant to ss.9-504(1)(c) of the Uniform Commercial
Code of the Commonwealth of Massachusetts; and
(e) Fourth, the excess, if any, shall be returned to the Borrowers
or to such other Persons as are entitled thereto.
12.5. Judgement Currency. If, for the purpose of obtaining judgment in any
court or obtaining an order enforcing a judgment, it becomes necessary to
convert any amount due under this Credit Agreement in Dollars or in any other
currency (hereinafter in this ss.12.5 called the "first currency") into any
other currency (hereinafter in this ss.12.5 called the "second currency"), then
the conversion shall be made at the Administrative Agent's spot rate of exchange
for buying the first currency with the second currency prevailing at the
Administrative Agent's close of business on the Business Day next preceding the
day on which the judgment is given or (as the case may be) the order is made.
Any payment made to the Administrative Agent or any Lender pursuant to this
Credit Agreement in the second currency shall constitute a discharge of the
obligations of the Borrowers to pay to the Administrative Agent and the Lenders
any amount originally due to the Administrative Agent and the Lenders in the
first currency under this Credit Agreement only to the extent of the amount of
the first currency which the Administrative Agent and each of the Lenders is
able, on the date of the receipt by it of such payment in any second currency,
to purchase, in accordance with the Administrative Agent's and such Lender's
normal banking procedures, with the amount of such second currency so received.
If the amount of the first currency falls short of the amount originally due to
the Administrative Agent and the Lenders in the first currency under this Credit
Agreement, each of the Borrowers hereby jointly and severally agrees that it
will indemnify the Administrative Agent and each of the Lenders against and save
the Administrative Agent and each of the Lenders harmless from any shortfall so
arising. This indemnity shall constitute an obligation of each such Borrower
separate and independent from the other obligations contained in this Credit
Agreement, shall give rise to a separate and independent cause of action and
shall continue in full force and effect notwithstanding any judgment or order
for a liquidated sum or sums in respect of amounts due to the Administrative
Agent or any Lender under this Credit Agreement or under any such judgment or
order. Any such shortfall shall be deemed to constitute a loss suffered by the
Administrative Agent and each such Lender, as the case may be, and the Borrowers
shall not be entitled to require any proof or evidence of any
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actual loss. The covenant contained in this ss.12.5 shall survive the payment in
full of all of the other obligations of the Borrower under this Credit
Agreement.
13. THE ADMINISTRATIVE AGENT.
13.1. Authorization.
(a) The Administrative 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 Administrative Agent, together with such powers
as are reasonably incident thereto, provided that no duties or
responsibilities not expressly assumed herein or therein shall be implied
to have been assumed by the Administrative Agent.
(b) The relationship between the Administrative Agent and each of
the Lenders is that of an independent contractor. The use of the term
"Administrative Agent" is for convenience only and is used to describe, as
a form of convention, the independent contractual relationship between the
Administrative Agent and each of the Lenders. Nothing contained in this
Credit Agreement nor the other Loan Documents shall be construed to create
an agency, trust or other fiduciary relationship between the
Administrative 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 Administrative 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 Administrative Agent with respect to all
collateral security and guaranties contemplated by the Loan Documents.
Such actions include the designation of the Administrative 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 Administrative Agent.
13.2. Employees and Agents. The Administrative Agent may exercise its
powers and execute its duties by or through employees or agents and shall be
entitled to take, and to rely on, advice of counsel concerning all matters
pertaining to its rights and duties under this Credit Agreement and the other
Loan Documents. The Administrative Agent may utilize the services of such
Persons as the Administrative Agent in its sole discretion may reasonably
determine, and all reasonable fees and expenses of any such Persons shall be
paid by the Borrowers.
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13.3. No Liability. Neither the Administrative Agent nor any of its
shareholders, directors, officers or employees nor any other Person assisting
them in their duties nor any agent or employee thereof, shall be liable for any
waiver, consent or approval given or any action taken, or omitted to be taken,
in good faith by it or them hereunder or under any of the other Loan Documents,
or in connection herewith or therewith, or be responsible for the consequences
of any oversight or error of judgment whatsoever, except that the Administrative
Agent or such other Person, as the case may be, may be liable for losses due to
its willful misconduct or gross negligence.
13.4. No Representations.
13.4.1. General. The Administrative Agent shall not be responsible
for the execution or validity or enforceability of this Credit Agreement,
the Revolving Credit Notes, any of the other Loan Documents or any
instrument at any time constituting, or intended to constitute, collateral
security for the Revolving Credit 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 Revolving Credit 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 the Parent or any of its
Subsidiaries, or be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements herein
or in any instrument at any time constituting, or intended to constitute,
collateral security for the Revolving Credit Notes or to inspect any of
the properties, books or records of the Parent or any of its Subsidiaries.
The Administrative Agent shall not be bound to ascertain whether any
notice, consent, waiver or request delivered to it by the Parent or any of
its Subsidiaries or any holder of any of the Revolving Credit Notes shall
have been duly authorized or is true, accurate and complete. The
Administrative 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
the Parent or any of its Subsidiaries. Each Lender acknowledges that it
has, independently and without reliance upon the Administrative 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 Credit Agreement.
13.4.2. Closing Documentation, etc. For purposes of determining
compliance with the conditions set forth in ss.10, each Lender that has
executed this Credit Agreement shall be deemed to have consented to,
approved or accepted, or to be satisfied with, each document and matter
either sent, or made available, by the Administrative Agent or the
Arranger to such Lender for consent, approval, acceptance or satisfaction,
or required thereunder to be to be consent to or approved by or acceptable
or satisfactory to such Lender, unless an officer of the Administrative
Agent or the Arranger active upon the Borrowers' account shall have
received notice from such Lender not less than five (5) days
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prior to the Closing Date specifying such Lender's objection thereto and
such objection shall not have been withdrawn by notice to the
Administrative Agent or the Arranger to such effect on or prior to the
Closing Date.
13.5. Payments.
13.5.1. Payments to Administrative Agent. A payment by any Borrower
or any Guarantor to the Administrative Agent hereunder or any of the other
Loan Documents for the account of any Lender shall constitute a payment to
such Lender. The Administrative Agent agrees promptly to distribute to
each Lender such Lender's pro rata share of payments received by the
Administrative Agent for the account of the Lenders except as otherwise
expressly provided herein or in any of the other Loan Documents.
13.5.2. Distribution by Administrative Agent. If in the opinion of
the Administrative Agent the distribution of any amount received by it in
such capacity hereunder, under the Revolving Credit 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 Administrative Agent is to be repaid, each Person to
whom any such distribution shall have been made shall either repay to the
Administrative 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.
13.5.3. Delinquent Lenders. Notwithstanding anything to the contrary
contained in this Credit Agreement or any of the other Loan Documents, any
Lender that fails (a) to make available to the Administrative Agent its
pro rata share of any Revolving Credit Loan or (b) to comply with the
provisions of ss.15.1 with respect to making dispositions and arrangements
with 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 of the Lenders, in each case as, when and
to the full extent required by the provisions of this Credit Agreement,
shall be deemed delinquent (a "Delinquent Lender") and shall be deemed a
Delinquent Lender until such time as such delinquency is satisfied. A
Delinquent Lender shall be deemed to have assigned any and all payments
due to it from the Borrower, whether on account of outstanding Revolving
Credit Loans, interest, fees or otherwise, to the remaining nondelinquent
Lenders for application to, and reduction of, their respective pro rata
shares of all outstanding Revolving Credit Loans. The Delinquent Lender
hereby authorizes the Administrative Agent to distribute such payments to
the nondelinquent Lenders in proportion to their respective pro rata
shares of all outstanding Revolving Credit Loans. A Delinquent Lender
shall be deemed to have satisfied in full a delinquency when and if, as a
result of application of the assigned payments to all outstanding
Revolving Credit Loans of the nondelinquent Lenders, the Lenders'
respective pro rata shares of all outstanding
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Revolving Credit Loans have returned to those in effect immediately prior
to such delinquency and without giving effect to the nonpayment causing
such delinquency.
13.6. Holders of Revolving Credit Notes. The Administrative Agent may deem
and treat the payee of any Revolving Credit 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.
13.7. Indemnity. The Lenders ratably agree hereby to indemnify and hold
harmless the Administrative Agent and its affiliates from and against any and
all claims, actions and suits (whether groundless or otherwise), losses,
damages, costs, expenses (including any expenses for which the Administrative
Agent or such affiliate has not been reimbursed by the Borrowers as required by
ss.15.2), and liabilities of every nature and character arising out of or
related to this Credit Agreement, the Revolving Credit Notes, or any of the
other Loan Documents or the transactions contemplated or evidenced hereby or
thereby, or the Administrative Agent's actions taken hereunder or thereunder,
except to the extent that any of the same shall be directly caused by the
Administrative Agent's willful misconduct or gross negligence.
13.8. Administrative Agent as Lender. In its individual capacity, Fleet
shall have the same obligations and the same rights, powers and privileges in
respect to its Commitment and the Revolving Credit Loans made by it, and as the
holder of any of the Revolving Credit Notes as it would have were it not also
the Administrative Agent.
13.9. Resignation. The Administrative Agent may resign at any time by
giving sixty (60) days prior written notice thereof to the Lenders and the
Borrowers. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor Administrative Agent. Unless a Default or Event of
Default shall have occurred and be continuing, such successor Administrative
Agent shall be reasonably acceptable to the Borrower. If no successor
Administrative Agent shall have been so appointed by the Required Lenders and
shall have accepted such appointment within thirty (30) days after the retiring
Administrative Agent's giving of notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be a financial institution having a rating of
not less than A or its equivalent by S&P. Upon the acceptance of any appointment
as Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. After any retiring Administrative Agent's
resignation, the provisions of this Credit Agreement and the other Loan
Documents shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Administrative Agent.
13.10. 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 Administrative Agent thereof. The Administrative
Agent hereby
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agrees that upon receipt of any notice under this ss.13.10 it shall
promptly notify the other Lenders of the existence of such Default or
Event of Default.
14. ASSIGNMENT AND PARTICIPATION.
14.1. Conditions to Assignment by Lenders.
14.1.1. General Conditions. Except as provided herein, each Lender
may assign to one or more commercial banks, other financial institutions
or other Persons, all or a portion of its interests, rights and
obligations under this Credit Agreement (including all or a portion of its
Commitment Percentage and Commitment and the same portion of the Revolving
Credit Loans at the time owing to it, the Revolving Credit Notes held by
it); provided that (a) each of the Administrative Agent and, unless a
Default or Event of Default shall have occurred and be continuing, the
Borrowers shall have given its prior written consent to such assignment,
which consent, will not be unreasonably withheld; except that the consent
of the Borrowers or the Administrative Agent shall not be required in
connection with any assignment by a Lender to (i) an existing Lender or
(ii) a Lender Affiliate of such Lender, (b) each such assignment shall be
of a constant, and not a varying, percentage of all the assigning Lender's
rights and obligations under this Credit Agreement, (c) each assignment
(or, in the case of assignments by a Lender to its Lender Affiliates, the
aggregate holdings of such Lender and its Lender Affiliates after giving
effect to such assignments), shall be in an amount that is a whole
multiple of $1,000,000 (or such lesser amount as shall constitute the
aggregate holdings of such Lender) and (d) the parties to such assignment
shall execute and deliver to the Administrative Agent, for recording in
the Register (as hereinafter defined), an Assignment and Acceptance,
substantially in the form of Exhibit D hereto (an "Assignment and
Acceptance"), together with any Revolving Credit Notes subject to such
assignment. Upon such execution, delivery, acceptance and recording, from
and after the effective date specified in each Assignment and Acceptance,
which effective date shall be at least five (5) Business Days after the
execution thereof, (y) 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 (z) the assigning Lender
shall, to the extent provided in such assignment and upon payment to the
Administrative Agent of the registration fee referred to in ss.14.3, be
released from its obligations under this Credit Agreement.
14.1.2. Assignment to Special Purpose Funding Vehicle.
Notwithstanding anything to the contrary contained herein, any Lender (a
"Granting Lender") may grant to a special purpose funding vehicle (a
"SPV") of such Granting Lender, identified as such in writing from time to
time by the Granting Lender to the Administrative Agent and the Borrowers,
the option to provide to the Borrowers all or any part of any Revolving
Credit Loan that such Granting Lender would otherwise be obligated to make
the Borrowers pursuant to ss.2.1 hereof, provided that (a) nothing herein
shall constitute a
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commitment to make any Revolving Credit Loan by any SPV and (ii) if an SPV
elects not to exercise such option or otherwise fails to provide all or
any part of such Revolving Credit Loan, the Granting Lender shall be
obligated to make such Revolving Credit Loan pursuant to the terms hereof.
The making of a Revolving Credit Loan by a SPV hereunder shall utilize the
Commitment of the Granting Lender to the same extent, and as if, such
Revolving Credit Loan were made by the Granting Lender. Each party hereto
hereby agrees that no SPV shall be liable for any payment under this
Credit Agreement for which a Granting Lender would otherwise be liable. In
furtherance of the foregoing, each party hereto hereby agrees that, prior
to the date that is one year and one day after the later of (i) the
payment in full of all outstanding senior indebtedness of any SPV and (ii)
the Revolving Credit Loan Maturity Date, it will not institute against, or
join any other person in instituting against, such SPV any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or
similar proceedings under the laws of the United States of America or any
State thereof. In addition, notwithstanding anything to the contrary
contained in this ss.14.1.2, any SPV may (i) with notice to, but without
the prior written consent of, the Borrowers or the Administrative Agent
and without paying any processing fee therefor, assign all or a portion of
its interests in any Revolving Credit Loans to its Granting Lender or to
any financial institutions providing liquidity and/or credit facilities to
or for the account of such SPV to fund the Revolving Credit Loans made by
such SPV or to support the securities (if any) issued by such SPV to fund
such Revolving Credit Loans and (ii) disclose on a confidential basis any
non-public information relating to its Revolving Credit Loans (other than
financial statements referred to in ss.7.4 or ss.8.4) to any rating
agency, commercial paper dealer or provider of a surety, guarantee or
credit or liquidity enhancement to such SPV. In no event shall any
Borrower be obligated to pay to an SPV that has made a Revolving Credit
Loan any greater amount than such Borrower would have been obligated to
pay under this Credit Agreement if the Granting Lender had made such
Revolving Credit Loan.
14.2. 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 Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Credit
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or the attachment, perfection or priority of any
security interest or mortgage,
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(b) the assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Parent and its Subsidiaries or any other Person primarily or secondarily
liable in respect of any of the Obligations, or the performance or
observance by the Parent and its Subsidiaries or any other Person
primarily or secondarily liable in respect of any of the Obligations of
any of their obligations under this Credit Agreement or any of the other
Loan Documents or any other instrument or document furnished pursuant
hereto or thereto;
(c) such assignee confirms that it has received a copy of this
Credit Agreement, together with copies of the most recent financial
statements referred to in ss.6.4 and ss.7.4 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 Administrative 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 Credit Agreement;
(e) such assignee appoints and authorizes the Administrative Agent
to take such action as agent on its behalf and to exercise such powers
under this Credit Agreement and the other Loan Documents as are delegated
to the Administrative Agent by the terms hereof or thereof, together with
such powers as are reasonably incidental thereto;
(f) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Credit
Agreement are required to be performed by it as a Lender;
(g) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
(h) such assignee acknowledges that it has complied with the
provisions of ss.4.3.3 to the extent applicable.
14.3. Register. The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register or similar list (the
"Register") for the recordation of the names and addresses of the Lenders and
the Commitment Percentage of, and principal amount of the Revolving Credit Loans
owing to, the Lenders from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrowers, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this Credit
Agreement. The Register shall be available for inspection by the Borrowers and
the Lenders at any reasonable time and from time to time upon
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reasonable prior notice. Upon each such recordation, the assigning Lender agrees
to pay to the Administrative Agent a registration fee in the sum of $3,500.
14.4. New Revolving Credit Notes. Upon its receipt of an Assignment and
Acceptance executed by the parties to such assignment, together with each
Revolving Credit Note subject to such assignment, the Administrative Agent shall
(a) record the information contained therein in the Register, and (b) give
prompt notice thereof to the Borrowers and the Lenders (other than the assigning
Lender). Within five (5) Business Days after receipt of such notice, the
Borrowers, at their own expense, shall execute and deliver to the Administrative
Agent, in exchange for each surrendered Revolving Credit Note, a new Revolving
Credit Note to the order of such Assignee in an amount equal to the amount
assumed by such Assignee pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained some portion of its obligations hereunder, a new
Revolving Credit Note to the order of the assigning Lender in an amount equal to
the amount retained by it hereunder. Such new Revolving Credit Notes shall
provide that they are replacements for the surrendered Revolving Credit Notes,
shall be in an aggregate principal amount equal to the aggregate principal
amount of the surrendered Revolving Credit Notes, shall be dated the effective
date of such Assignment and Acceptance and shall otherwise be in substantially
the form of the assigned Revolving Credit Notes. Within five (5) days of
issuance of any new Revolving Credit Notes pursuant to this ss.14.4, the
Borrower shall deliver upon the request of the assignee Lender an opinion of
counsel, addressed to the Lenders and the Administrative Agent, relating to the
due authorization, execution and delivery of such new Revolving Credit Notes and
the legality, validity and binding effect thereof, in form and substance
satisfactory to the Lenders. The surrendered Revolving Credit Notes shall be
cancelled and returned to the Borrowers.
14.5. Participations. Each Lender may sell participations to one or more
Lenders or other entities in all or a portion of such Lender's rights and
obligations under this Credit Agreement and the other Loan Documents; provided
that (a) any such sale or participation shall not affect the rights and duties
of the selling Lender hereunder to the Borrowers 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 Revolving Credit Loans, extend the term or
increase the amount of the Commitment of such Lender as it relates to such
participant, reduce the amount of any Facility Fee or Utilization Fee to which
such participant is entitled or extend any regularly scheduled payment date for
principal or interest.
14.6. Assignee or Participant Affiliated with the Borrowers. If any
assignee Lender is an Affiliate of the Parent or any 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 Administrative Agent
pursuant to ss.12.1 or ss.12.2, and the determination of the
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Required Lenders shall for all purposes of this Credit Agreement and the other
Loan Documents be made without regard to such assignee Lender's interest in any
of the Revolving Credit Loans. If any Lender sells a participating interest in
any of the Revolving Credit Loans to a participant, and such participant is the
Parent, a Borrower or an Affiliate of the Parent, a Borrower, then such
transferor Lender shall promptly notify the Administrative 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
Administrative Agent pursuant to ss.12.1 or ss.12.2 to the extent that such
participation is beneficially owned by the Parent, a Borrower or any Affiliate
of the Parent, a Borrower, and the determination of the Required Lenders shall
for all purposes of this Credit Agreement and the other Loan Documents be made
without regard to the interest of such transferor Lender in the Revolving Credit
Loans to the extent of such participation.
14.7. Miscellaneous Assignment Provisions. Any assigning Lender shall
retain its rights to be indemnified pursuant to ss.15.3 with respect to any
claims or actions arising prior to the date of such assignment. Anything
contained in this ss.14 to the contrary notwithstanding, any Lender may at any
time pledge or assign a security interest in all or any portion of its interest
and rights under this Credit Agreement (including all or any portion of its
Revolving Credit Notes) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to (a) any of the twelve Federal
Reserve Banks organized under ss.4 of the Federal Reserve Act, 12 U.S.C. ss.341
and (b) with respect to any Lender that is a fund that invests in bank loans, to
any lender or any trustee for, or any other representative of, holders of
obligations owed or securities issued by such fund as security for such
obligations or securities or any institutional custodian for such fund or for
such lender. Any foreclosure or similar action by any Person in respect of such
pledge or assignment shall be subject to the other provisions of this ss.14. No
such pledge or the enforcement thereof shall release the pledgor Lender from its
obligations hereunder or under any of the other Loan Documents, provide any
voting rights hereunder to the pledgee thereof, or affect any rights or
obligations of the Borrowers or Administrative Agent hereunder.
14.8. Assignment by Parent or the Borrowers. None of the Parent nor any
Borrower 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.
14.9. Increase in Total Commitment.
(a) At the request of the Borrowers, the Total Commitment may be increased
in the sole discretion of the Lenders; provided that, without the prior written
consent of the Required Lenders, the Total Commitment shall at no time exceed
$200,000,000 minus the aggregate amount of all reductions in the Total
Commitment under this Credit Agreement previously made pursuant to ss.2.3 or
ss.3.2.2. The Borrowers may request such increase by submitting a written
request (a "Commitment Increase Request") to the Administrative Agent and the
Lenders which Commitment Increase Request shall be
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consented to by the Administrative Agent. Such Commitment Increase Request shall
be made not fewer than ten (10) Business Days prior to the proposed effective
date of such increase, which Commitment Increase Request shall specify the
amount of the proposed increase in the Total Commitment and the proposed
effective date of such increase. In the event of such a Commitment Increase
Request, each of the Lenders shall be given the opportunity to participate in
the requested increase ratably in proportion that its Commitment bears to the
Total Commitment under this Credit Agreement, but no Lender shall have any
obligation to increase its Commitment pursuant to a Commitment Increase Request.
On or prior to a date that is five (5) Business Days after receipt of the
Commitment Increase Request, each Lender shall submit to the Administrative
Agent a notice indicating the maximum amount by which it is willing to increase
its Commitments in connection with such Commitment Increase Request (any such
notice to the Administrative Agent being herein a "Lender Increase Notice"). Any
Lender which does not submit a Lender Increase Notice to the Administrative
Agent prior to the expiration of such five (5) Business Day period shall be
deemed to have denied any increase in its Commitment. In the event that the
increases of Commitments set forth in the Lender Increase Notices exceed the
amount requested by the Borrowers in the Commitment Increase Request, the
Administrative Agent shall have the right, in consultation with the Borrowers,
to allocate the amount of increases necessary to meet the Borrowers' Commitment
Increase Request; provided, no Lender shall be allocated an amount less than its
pro rata share of such increase based upon the proportion its Commitment bears
to the Total Commitment under this Credit Agreement. In the event that the
Lender Increase Notices are less than the amount requested by the Borrowers, no
later than three (3) Business Days prior to the proposed effective date the
Borrowers may notify the Administrative Agent of any commercial banks, other
financial institutions or other Persons that shall have agreed to become a
"Lender" party hereto (each, an "Acceding Lender") in connection with the
Commitment Increase Request. Any Acceding Lender, and the amount of such
Acceding Lender's proposed Commitment, shall be consented to by the
Administrative Agent. If the Borrowers shall not have arranged any Acceding
Lender(s) to commit to the shortfall from the Lender Increase Notices, then the
Borrowers shall be deemed to have reduced the amount of its Commitment Increase
Request to the aggregate amount set forth in the Lender Increase Notices. Based
upon the Lender Increase Notices, any allocations made in connection therewith
and any notice regarding any Acceding Lender, if applicable, the Administrative
Agent shall notify the Borrowers and the Lenders on or before the Business Day
immediately prior to the proposed effective date of the amount of each Lender's
and Acceding Lender's Commitment after giving effect to the increase in the
Total Commitment pursuant to this ss.14.9 (the "Effective Commitment Amount")
and the amount of the Total Commitment, which amounts shall be effective on the
following Business Day subject to the conditions set forth herein. Any increase
in the Total Commitment under this Credit Agreement shall be subject to the
following conditions precedent: (i) as of the date of the Commitment Increase
Request and as of the proposed effective date of the increase in the Total
Commitment under this Credit Agreement, all representations and warranties shall
be true and correct in all material respects as though made on such date (unless
such representation and warranty is made as of a specific date, in which case,
such representation and warranty shall be true and correct
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as of such date) and no Default or Event of Default shall have occurred and then
be continuing; (ii) the Borrowers, the Administrative Agent and each Acceding
Lender shall have agreed to provide a Commitment in support of such increase in
the Total Commitment under this Credit Agreement and shall have executed and
delivered an instrument of accession in a form reasonably acceptable to the
Administrative Agent; (iii) counsel for the Borrowers shall have delivered to
the Administrative Agent a supplemental opinion in form and substance reasonably
satisfactory to the Administrative Agent; and (iv) the Borrowers and the
Acceding Lender(s) shall otherwise have executed and delivered such other
instruments and documents as the Administrative Agent shall have reasonably
requested in connection with such increase. Upon satisfaction of the conditions
precedent to any increase in the Total Commitment under this Credit Agreement,
the Administrative Agent shall promptly advise the Borrowers and each Lender of
the effective date of such increase. Upon the effective date of any increase the
Total Commitment under this Credit Agreement that is supported by an Acceding
Lender, such Acceding Lender shall be a party to this Credit Agreement as a
Lender and shall have the rights and obligations of a Lender hereunder. In
addition, on the effective date, the Administrative Agent shall replace the
existing Schedule 1 attached hereto with a revised Schedule 1 reflecting such
new Total Commitment and each Lender's Commitment. Nothing contained herein
shall constitute, or otherwise be deemed to be, a commitment on the part of any
Lender to increase its Commitment hereunder.
(b) For purposes of this clause (b), (i) the term "Buying Lender(s)" shall
mean (A) each Lender the Effective Commitment Amount of which is greater than
its Commitment prior to the effective date of any increase in the Total
Commitment under this Credit Agreement and (B) each Acceding Lender that is
allocated an Effective Commitment Amount in connection with any Commitment
Increase Request, and (ii) the term "Selling Lender(s)" shall mean each Lender
whose Commitment under this Credit Agreement is not being increased from that in
effect prior to such increase in the Total Commitment under this Credit
Agreement as the case may be. Effective on the effective date of any increase in
the Total Commitment under this Credit Agreement pursuant to clause (a) above,
each Selling Lender hereby sells, grants, assigns and conveys to each Buying
Lender, without recourse, warranty or representation of any kind, except as
specifically provided herein, an undivided percentage in such Selling Lender's
right, title and interest in and to its outstanding Revolving Credit Loans in
the respective amounts and percentages necessary so that, from and after such
sale, each such Selling Lender's outstanding Revolving Credit Loans shall equal
such Selling Lender's pro rata share (calculated based upon the Effective
Commitment Amounts) of the outstanding Revolving Credit Loans under this Credit
Agreement. Effective on the effective date of any increase in the Total
Commitment under this Credit Agreement pursuant to clause (a) above, each Buying
Lender hereby purchases and accepts such grant, assignment and conveyance from
the Selling Lenders. Each Buying Lender hereby agrees that its respective
purchase price for the portion of the outstanding Revolving Credit Loans
purchased hereby shall equal the respective amount necessary so that, from and
after such payments, each Buying Lender's outstanding Revolving Credit Loans
shall equal such Buying Lender's pro rata share (calculated based upon the
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Effective Commitment Amounts) of the outstanding Revolving Credit Loans under
this Credit Agreement. Such amount shall be payable on the effective date of the
increase in the Total Commitment under this Credit Agreement by wire transfer of
immediately available funds to the Administrative Agent. The Administrative
Agent, in turn, shall wire transfer any such funds received to the Selling
Lenders, in same day funds, for the sole account of the Selling Lenders. Each
Selling Lender hereby represents and warrants to each Buying Lender that such
Selling Lender owns the Revolving Credit Loans being sold and assigned hereby
for its own account and has not sold, transferred or encumbered any or all of
its interests in such Revolving Credit Loans, except for participations which
will be extinguished upon payment to the Selling Lender of any amount equal to
the portion of the outstanding Revolving Credit Loans being sold by such Selling
Lender. Each Buying Lender hereby acknowledges and agrees that, except for such
Selling Lender's representations and warranties contained in the foregoing
sentence, each such Buying Lender has entered into its Instrument of Accession
with respect to such increase on the basis of its own independent investigation
and has not relied upon, and will not rely upon, any explicit or implicit
written or oral representation, warranty or other statement of the Lenders or
the Administrative Agent concerning the authorization, execution, legality,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Credit Agreement or the other Loan Documents. Each of the Borrowers hereby
jointly and severally agrees to compensate each Selling Lender for all losses,
expenses and liabilities incurred by each Lender in connection with the sale and
assignment of any Eurocurrency Rate Loans hereunder on the terms and in the
manner set forth in ss.4.10.
15. PROVISIONS OF GENERAL APPLICATIONS.
15.1. Setoff. Regardless of the adequacy of any collateral, if any of the
Obligations are due and payable and have not been paid or any Event of Default
shall have occurred, any deposits or other sums credited by or due from any of
the Lenders to any Borrower and any securities or other property of such Parent
or 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 such Parent or Borrower to such Lender.
ANY AND ALL RIGHTS TO REQUIRE ANY LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH
RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO
EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER
PROPERTY OF THE PARENT OR ANY BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND
IRREVOCABLY WAIVED. Each of the Lenders agrees with each other Lender that (a)
if an amount to be set off is to be applied to Indebtedness of the Parent or any
Borrower to such Lender, other than Indebtedness evidenced by the Revolving
Credit Notes held by such Lender, such amount shall be applied ratably to such
other Indebtedness and to the Indebtedness evidenced by all such Revolving
Credit Notes held by such Lender, and (b) if such Lender shall receive from any
Parent or Borrower, whether by voluntary payment, exercise of the right of
setoff, counterclaim, cross action, enforcement of the claim evidenced by the
Revolving Credit Notes held by such Lender by proceedings against the Parent or
such Borrower at
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law or in equity or by proof thereof in bankruptcy, reorganization, liquidation,
receivership or similar proceedings, or otherwise, and shall retain and apply to
the payment of the Revolving Credit Note or Revolving Credit 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 Revolving Credit Notes held by all of the
Lenders, 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 Revolving Credit Notes held by it. its proportionate
payment as contemplated by this Credit Agreement; provided that if all or any
part of such excess payment is thereafter recovered from such Lender, such
disposition and arrangements shall be rescinded and the amount restored to the
extent of such recovery, but without interest. If, for the purpose of exercising
the right of setoff pursuant to this ss.15.1, it becomes necessary to convert
any amount in Dollars or in any other currency into any other currency, such
conversion shall be made as provided in the first sentence of ss.12.5.
15.2. Expenses. Each of the Borrowers jointly and severally agrees to pay
(a) the reasonable costs of producing and reproducing this Credit Agreement, the
other Loan Documents and the other agreements and instruments mentioned herein,
(b) any taxes (including any interest and penalties in respect thereto) payable
by the Administrative Agent or any of the Lenders (other than taxes based upon
the Administrative Agent's or any Lender's net income) on or with respect to the
transactions contemplated by this Credit Agreement (such Borrower hereby
agreeing to indemnify the Administrative Agent and each Lender with respect
thereto), (c) the reasonable fees, expenses and disbursements of the
Administrative Agent's Special Counsel or any local counsel to the
Administrative Agent incurred in connection with the preparation, syndication,
administration or interpretation of the Loan Documents and other instruments
mentioned herein, each closing hereunder, any amendments, modifications,
approvals, consents or waivers hereto or hereunder, or the cancellation of any
Loan Document upon payment in full in cash of all of the Obligations or pursuant
to any terms of such Loan Document for providing for such cancellation, (d) the
fees, expenses and disbursements of the Administrative Agent or any of its
affiliates incurred by the Administrative Agent or such affiliate in connection
with the preparation, syndication, administration or interpretation of the Loan
Documents and other instruments mentioned herein, including all title insurance
premiums and surveyor, engineering, appraisal and examination charges, (e) all
reasonable out-of-pocket expenses (including without limitation reasonable
attorneys' fees and costs, which attorneys may be employees of any Lender or the
Administrative Agent, and reasonable consulting, accounting, appraisal,
investment banker and similar professional fees and charges) incurred by any
Lender or the Administrative Agent in connection with (i) the enforcement of or
preservation of rights under any of the Loan Documents against such Borrower or
any of its Subsidiaries or the administration thereof after the occurrence of a
Default or Event of Default and (ii) any litigation, proceeding or dispute
whether arising hereunder or otherwise, in any way related to any Lender's or
the Administrative Agent's relationship with such Borrower or any of its
Subsidiaries and (g) all reasonable fees, expenses and disbursements of any
Lender or the Administrative Agent incurred in
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connection with Uniform Commercial Code searches or intellectual property
searches. The covenants contained in this ss.15.2 shall survive payment or
satisfaction in full of all other obligations.
15.3. Indemnification. Each of the Borrowers jointly and severally agrees
to indemnify and hold harmless the Administrative Agent, its affiliates and the
Lenders from and against any and all claims, actions and suits whether
groundless or otherwise, and from and against any and all liabilities, losses,
damages and expenses of every nature and character arising out of this Credit
Agreement or any of the other Loan Documents or the transactions contemplated
hereby including, without limitation, (a) any actual or proposed use by the
Borrowers or any of their Subsidiaries of the proceeds of any of the Revolving
Credit Loans, (b) the reversal or withdrawal of any provisional credits granted
by the Administrative Agent upon the transfer of funds from lock box, bank
agency, concentration accounts or otherwise under any cash management
arrangements with the Parent or any of its Subsidiaries or in connection with
the provisional honoring of funds transfers, checks or other items, (c) the
Parent or any of its Subsidiaries entering into or performing this Credit
Agreement or any of the other Loan Documents or (d) with respect to the Parent
and its Subsidiaries and their respective properties and assets, the violation
of any Environmental Law, the presence, disposal, escape, seepage, leakage,
spillage, discharge, emission, release or threatened release of any Hazardous
Substances or any action, suit, proceeding or investigation brought or
threatened with respect to any Hazardous Substances (including, but not limited
to, claims with respect to wrongful death, personal injury or damage to
property), in each case including, without limitation, the reasonable fees and
disbursements of counsel and allocated costs of internal counsel incurred in
connection with any such investigation, litigation or other proceeding except to
the extent that any of the foregoing are directly caused by the gross negligence
or willful misconduct of the otherwise indemnified party. In litigation, or the
preparation therefor, the Lenders and the Administrative Agent and its
affiliates shall be entitled to select their own counsel and, in addition to the
foregoing indemnity, the Borrowers jointly and severally agree to pay promptly
the reasonable fees and expenses of such counsel. If, and to the extent that the
obligations of the Borrowers under this ss.15.3 are unenforceable for any
reason, the Borrowers hereby agree 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.15.3 shall survive payment or
satisfaction in full of all other Obligations.
15.4. Treatment of Certain Confidential Information.
15.4.1. Confidentiality. Each of the Lenders and the Administrative
Agent agrees, on behalf of itself and each of its affiliates, directors,
officers, employees and representatives, to use reasonable precautions to
keep confidential, in accordance with their customary procedures for
handling confidential information of the same nature and in accordance
with safe and sound banking practices, any non-public information supplied
to it by the Parent or any of its Subsidiaries pursuant to this Credit
Agreement that is identified by such Person as being confidential at the
time the same is delivered to the Lenders or the Administrative Agent,
provided that nothing herein shall limit the
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disclosure of any such information (a) after such information shall have
become public other than through a violation of this ss.15.4, or becomes
available to any of the Lenders or the Administrative Agent on a
nonconfidential basis from a source other than the Parent or any of its
Subsidiaries, (b) to the extent required by statute, rule, regulation or
judicial process, (c) to counsel for any of the Lenders or the
Administrative Agent, (d) to bank examiners or any other regulatory
authority having jurisdiction over any Lender or the Administrative Agent,
or to auditors or accountants, (e) to the Administrative Agent, any Lender
or any Financial Affiliate, (f) in connection with any litigation to which
any one or more of the Lenders, the Administrative Agent or any Financial
Affiliate is a party, or in connection with the enforcement of rights or
remedies hereunder or under any other Loan Document, (g) to a Lender
Affiliate or a Subsidiary or affiliate of the Administrative Agent, (h) to
any actual or prospective assignee or participant or any actual or
prospective counterparty (or its advisors) to any swap or derivative
transactions referenced to credit or other risks or events arising under
this Credit Agreement or any other Loan Document so long as such assignee,
participant or counterparty, as the case may be, agrees to be bound by the
provisions of ss.15.4 or (i) with the consent of the Parent or any
Borrower.
15.4.2. Prior Notification. Unless specifically prohibited by
applicable law or court order, each of the Lenders and the Administrative
Agent shall, prior to disclosure thereof, notify the Parent of any request
for disclosure of any such non-public information by any governmental
agency or representative thereof (other than any such request in
connection with an examination of the financial condition of such Lender
by such governmental agency) or pursuant to legal process.
15.4.3. Other. In no event shall any Lender or the Administrative
Agent be obligated or required to return any materials furnished to it or
any Financial Affiliate by the Parent or any of its Subsidiaries. The
obligations of each Lender under this ss.15.4 shall supersede and replace
the obligations of such Lender under any confidentiality letter in respect
of this financing signed and delivered by such Lender to the Parent or any
of its Subsidiaries prior to the date hereof and shall be binding upon any
assignee of, or purchaser of any participation in, any interest in any of
the Revolving Credit Loans from any Lender.
15.5. Survival of Covenants, Etc. All covenants, agreements,
representations and warranties made herein, in the Revolving Credit Notes, in
any of the other Loan Documents or in any documents or other papers delivered by
or on behalf of the Parent or any of its Subsidiaries pursuant hereto shall be
deemed to have been relied upon by the Lenders and the Administrative Agent,
notwithstanding any investigation heretofore or hereafter made by any of them,
and shall survive the making by the Lenders of any of the Revolving Credit
Loans, as herein contemplated, and shall continue in full force and effect so
long as any amount due under this Credit Agreement or the Revolving Credit Notes
or any of the other Loan Documents remains outstanding
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or any Lender has any obligation to make any Revolving Credit Loans, and for
such further time as may be otherwise expressly specified in this Credit
Agreement. All statements contained in any certificate or other paper delivered
to any Lender or the Administrative Agent at any time by or on behalf of the
Parent or any of its Subsidiaries pursuant hereto or in connection with the
transactions contemplated hereby shall constitute representations and warranties
by the Parent or such Subsidiary hereunder.
15.6. Notices. Except as otherwise expressly provided in this Credit
Agreement, all notices and other communications made or required to be given
pursuant to this Credit Agreement or the Revolving Credit Notes shall be in
writing and shall be delivered in hand, mailed by United States registered or
certified first class mail, postage prepaid, sent by overnight courier, or sent
by telegraph, telecopy, facsimile or telex and confirmed by delivery via courier
or postal service, addressed as follows:
(a) if to the Domestic Borrower or any Guarantor, at 815 Chestnut
Street, North Andover, Massachusetts 01845, Attention: William McCartney,
Treasurer, with a copy to Robert Whalen, Jr., P.C., Goodwin Procter LLP,
Exhange Place 02109, or at such other address for notice as such Person
shall last have furnished in writing to the Person giving the notice;
(b) if to any Foreign Borrower, at Kollergang 14, 6961 LZ Eerbeek,
The Netherlands, Attention: Arjan Stokkel, Controller, with copies to
William McCartney, Watts Industries, Inc., 815 Chestnut Street, North
Andover, Massachusetts 01845, and to Robert Whalen, Jr., P.C., Goodwin
Procter LLP, Exhange Place 02109, or at such other address for notice as
the Foreign Borrower shall last have furnished in writing to the Person
giving the notice;
(c) if to the Administrative Agent, at 100 Federal Street, Boston,
Massachusetts 02110, USA, Attention: John P. O'Loughlin, Director, with a
copy to Marion Giliberti Barish, Esq., Bingham Dana LLP, 150 Federal
Street, Boston, Massachusetts 02110, or such other address for notice as
the Administrative Agent shall last have furnished in writing to the
Person giving the notice; and
(d) if to any Lender, at such Lender's address set forth on Schedule
1 hereto, or such other address for notice as such Lender shall have last
furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (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. Any notice or other
communication to be made hereunder or under the Revolving Credit Notes, even if
otherwise required to be in writing under other provisions of this Credit
Agreement or the Revolving Credit Notes, may alternatively be made in an
electronic record transmitted electronically under such authentication and other
procedures as the parties hereto may from time to time agree in writing (but not
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an electronic record), and such electronic transmission shall be effective at
the time set forth in such procedures. Unless otherwise expressly provided in
such procedures, such an electronic record shall be equivalent to a writing
under the other provisions of this Credit Agreement or the Revolving Credit
Notes, and such authentication, if made in compliance with the procedures so
agreed by the parties hereto in writing (but not an electronic record), shall be
equivalent to a signature under the other provisions of this Credit Agreement or
the Revolving Credit Notes.
15.7. Governing Law; Consent to Jurisdiction; Waiver of Immunities. (a)
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED THEREIN,
EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH OF THE
PARENT AND THE BORROWERS AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE
COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS
TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY
SUCH SUIT BEING MADE UPON THE PARENT OR THE BORROWERS BY MAIL AT THE ADDRESS FOR
SUCH PERSON(S) SPECIFIED IN ss.15.6. EACH OF THE PARENT AND THE BORROWERS HEREBY
WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
(b) The Foreign Borrower hereby irrevocably and unconditionally appoints
CT Corporation Systems, with an office on the date hereof at 101 Federal Street,
Suite 300, Boston, Massachusetts 02110 (the "Process Agent"), as its agent to
receive on behalf of the Foreign Borrower and its respective property service of
copies of the summons and complaint and any other process which may be served in
any such action or proceeding in any such court of the Commonwealth of
Massachusetts or any Federal court sitting therein and agrees promptly to
appoint a successor Process Agent. In any such action or proceeding in such
court of the Commonwealth of Massachusetts or Federal court sitting therein,
such service may be made on the Foreign Borrower by delivering a copy of such
process to the Foreign Borrower in care of the appropriate Process Agent at such
Process Agent's above address and by depositing a copy of such process in the
mails by certified or registered air mail, addressed to the Foreign Borrower at
its address referred to in ss.15.6 (such service to be effective upon such
receipt by the appropriate Process Agent and the depositing of such process in
the mails as aforesaid). The Foreign Borrower hereby irrevocably and
unconditionally authorizes and directs such Process Agent to accept such service
on its behalf. As an alternate method of service, the Foreign Borrower also
irrevocably and unconditionally consents to the service of any and all process
in any such action or proceeding in such court of the Commonwealth of
Massachusetts or any Federal court sitting therein by mailing of
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copies of such process to the Foreign Borrower by certified or registered air
mail at its address referred to in ss.15.6. The Foreign Borrower hereby agrees
that, to the fullest extent permitted by applicable law, a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
(c) To the extent that the Foreign Borrower has or hereafter may acquire
any immunity (sovereign or otherwise) from any legal action, suit or proceeding,
from jurisdiction of any court or from set-off or any legal process (whether
service or notice, attachment prior to judgment, attachment in aid of execution
of judgment, execution of judgment or otherwise) with respect to itself or any
of its property, the Foreign Borrower each hereby irrevocably waives and agrees
not to plead or claim such immunity in respect of its obligations under this
Credit Agreement and the Revolving Credit Notes.
(d) The Foreign Borrower hereby agrees that the waivers set forth in this
ss.15.7 shall have the fullest extent permitted under the Foreign Sovereign
Immunities Act of 1976 of the United States of America and are intended to be
irrevocable and not subject to withdrawal for purposes of such Act.
15.8. Headings. The captions in this Credit Agreement are for convenience
of reference only and shall not define or limit the provisions hereof.
15.9. Counterparts. This Credit Agreement and any amendment hereof may be
executed in several counterparts and by each party on a separate counterpart,
each of which when executed and delivered shall be an original, and all of which
together shall constitute one instrument. In proving this Credit Agreement it
shall not be necessary to produce or account for more than one such counterpart
signed by the party against whom enforcement is sought. Delivery by facsimile by
any of the parties hereto of an executed counterpart hereof or of any amendment
or waiver hereto shall be as effective as an original executed counterpart
hereof or of such amendment or waiver and shall be considered a representation
that an original executed counterpart hereof or such amendment or waiver, as the
case may be, will be delivered.
15.10. Entire Agreement, Etc. The Loan Documents and any other documents
executed in connection herewith or therewith express the entire understanding of
the parties with respect to the transactions contemplated hereby. Neither this
Credit Agreement nor any term hereof may be changed, waived, discharged or
terminated, except as provided in ss.15.12.
15.11. Waiver of Jury Trial. EACH OF THE PARENT AND THE BORROWERS HEREBY
WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT
OF ANY DISPUTE IN CONNECTION WITH THIS CREDIT AGREEMENT, THE REVOLVING CREDIT
NOTES OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR
THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS OR ANY COURSE OF
CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
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OF ANY PARTY, INCLUDING ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR
ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY LENDER RELATING TO THE ADMINISTRATION
OF THE REVOLVING CREDIT LOANS OR ENFORCEMENT OF THE LOAN DOCUMENTS AND AGREES
THAT IT WILL NOT SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN
WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. Except as prohibited by
law, each of the Parent and the Borrowers hereby waives any right it may have to
claim or recover in any litigation referred to in the preceding sentence any
special, exemplary, punitive or consequential damages or any damages other than,
or in addition to, actual damages. Each of the Parent and the Borrowers (a)
certifies that no representative, agent or attorney of any Lender or the
Administrative Agent has represented, expressly or otherwise, that such Lender
or the Administrative Agent would not, in the event of litigation, seek to
enforce the foregoing waivers and (b) acknowledges that the Administrative Agent
and the Lenders have been induced to enter into this Credit Agreement, the other
Loan Documents to which it is a party by, among other things, the waivers and
certifications contained herein.
15.12. Consents, Amendments, Waivers, Etc. Any consent or approval
required or permitted by this Credit Agreement to be given by the Lenders may be
given, and any term of this Credit Agreement, the other Loan Documents or any
other instrument related hereto or mentioned herein may be amended, and the
performance or observance by the Parent or any of its Subsidiaries of any terms
of this Credit Agreement, the other Loan Documents or such other instrument or
the continuance of any Default or Event of Default may be waived (either
generally or in a particular instance and either retroactively or prospectively)
with, but only with, the written consent of the Borrowers and the written
consent of the Required Lenders. Notwithstanding the foregoing, no amendment,
modification or waiver shall:
(a) without the written consent of each of the Borrowers and each
Lender directly affected thereby:
(i) reduce or forgive the principal amount of any Revolving
Credit Loans, or reduce the rate of interest on the Revolving Credit
Notes or the amount of the Facility Fee or the Utilization Fee
(other than interest accruing pursuant to ss.4.11 following the
effective date of any waiver by the Required Lenders of the Default
or Event of Default relating thereto);
(ii) increase the amount of such Lender's Commitment or extend
the expiration date of such Lender's Commitment; and
(iii) postpone or extend the Revolving Credit Loan Maturity
Date or any other regularly scheduled dates for payments of
principal of, or interest on, the Revolving Credit Loans or any Fees
or other amounts payable to such Lender (it being understood that
(A) a waiver of the application of the default rate of interest
pursuant to ss.4.11, (B) any vote to rescind any acceleration made
pursuant to ss.12.1 of amounts owing with
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respect to the Revolving Credit Loans and other Obligations and (C)
any modifications of the provisions relating to amounts, timing or
application of prepayments of Revolving Credit Loans and other
Obligations, including under ss.3.2.2, shall require only the
approval of the Required Lenders);
(b) without the written consent of all of the Lenders, (i) amend or
waive this ss.15.12 or the definition of "Required Lenders" or (ii) other
than pursuant to a transaction permitted by the terms of this Credit
Agreement, release all or substantially all of the Guarantors from their
guaranty obligations under the Guaranties;
(c) without the written consent of the Swing Line Lender, amend or
waive ss.2.6.2 or any other provision applicable to the Swing Line Lender;
and
(d) without the written consent of the Administrative Agent, amend
or waive ss.13, the amount or time of payment of the Administrative
Agent's Fee payable for the Administrative Agent's account or any other
provision applicable to the Administrative Agent.
No waiver shall extend to or affect any obligation not expressly waived or
impair any right consequent thereon. No course of dealing or delay or omission
on the part of the Administrative 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 Borrowers shall entitle the Borrowers to other or further
notice or demand in similar or other circumstances.
15.13. Severability. The provisions of this Credit Agreement are severable
and if any one clause or provision hereof shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this Credit
Agreement in any jurisdiction.
[signature pages follow]
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IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
WATTS INDUSTRIES, INC.
By: _______________________________
Name:
Title:
WATTS REGULATOR CO.
By: _______________________________
Name:
Title:
WATTS INDUSTRIES EUROPE B.V.
By: _______________________________
Name:
Title:
FLEET NATIONAL BANK, individually and as
Administrative Agent
By: _______________________________
Name:
Title:
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BANK OF AMERICA, N.A.
By: _______________________________
Name:
Title:
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CITIZENS BANK OF MASSACHUSETTS
By: _______________________________
Name:
Title:
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MELLON BANK, N.A.
By: _______________________________
Name:
Title:
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FIRST UNION NATIONAL BANK
By: _______________________________
Name:
Title:
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BROWN BROTHERS HARRIMAN & CO.
By: _______________________________
Name:
Title:
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JPMORGAN CHASE BANK
By: _______________________________
Name:
Title:
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KEYBANK NATIONAL ASSOCIATION
By: _______________________________
Name:
Title: