================================================================================
PROSPECTUS SUPPLEMENT Filed Pursuant to Rule 424(b)(3) of
the Rules and Regulations Under the
(To Prospectus dated June 7, 1999 Securities Act of 1933
and to the Prospectus Supplements dated
July 22, 1999, August 11, 1999,
September 3, 1999, October 5, 1999, Registration Statement No. 333-63563
November 12, 1999, December
28, 1999, February 24, 2000, March
3, 2000, March 30, 2000, April 20, 2000
May 12, 2000, May 19, 2000, August 4,
2000 and August 16, 2000)
INSILCO HOLDING CO.
COMMON STOCK
WARRANTS TO PURCHASE COMMON STOCK
PAY-IN-KIND PREFERRED STOCK
---------------------------------
RECENT DEVELOPMENTS
-------------------
Attached hereto and incorporated by reference herein is the Current
Report on Form 8-K of Insilco Holding Co. dated August 25, 2000, and filed with
the Securities and Exchange Commission on September 7, 2000.
---------------------------------
This Prospectus Supplement, together with the Prospectus, is to be used
by Donaldson, Lufkin & Jenrette Securities Corporation ("DLJSC") in connection
with offers and sale of the above-referenced securities in market-making
transactions at negotiated prices related to prevailing market prices at the
time of the sale. DLJSC may act as principal or agent in such transactions.
September 15, 2000
<PAGE>
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: August 25, 2000
INSILCO HOLDING CO.
-------------------
(Exact Name of Registrant as specified in its charter)
Delaware 0-24813 06-1158291
-------- ------- ----------
(State or other jurisdiction of (Commission File No.) (IRS Employer
incorporation or organization) Identification Number)
425 Metro Place North
Fifth Floor
Dublin, Ohio 43017
(614) 792-0468
--------------
(Address, including zip code, and telephone number
including area code of Registrant's
principal executive offices)
================================================================================
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On August 25, 2000, Insilco Holding Co., (the "Company") completed a
transaction agreement, dated as of July 20, 2000, with ThermaSys Holding
Company, pursuant to which ThermaSys purchased all of the businesses
comprising the Company's automotive components business segment. ThermaSys
is a newly organized entity wholly owned by the merchant banking units of
Donaldson Lufkin & Jenrette and CitiCorp, which units also together
beneficially own approximately 90% of the Company's outstanding common
stock.
The net proceeds of $143.8 million were determined by arm's-length
negotiations between the parties and, in the case of Insilco Holding Co,
were approved by a special committee of Insilco Holding Co.'s Board of
Directors comprised of the Insilco Holding Co.'s independent director. The
net proceeds of the transaction were used to repay the outstanding
principal of Insilco Technologies Inc.'s Credit Facility.
The Company's press release issued August 28, 2000, is attached as an
exhibit and is incorporated herein by reference.
ITEM 5. OTHER EVENTS
The Company also announced it changed the name of Insilco Corporation to
Insilco Technologies, Inc. (IT), amended and restated IT's previous Bank
Credit Agreement and Facilities and completed IT's acquisition of Precision
Cable Manufacturing Company (PCM), a Texas-based custom wire and cable
assembler. The name change was made to reflect the telecommunication and
electronics nature of the remaining businesses. The Company amended and
restated IT's previous Bank Credit Agreement and Bank Credit Facilities to
include a $35.0 million Term A Facility, a $125.0 million Term B Facility,
and a $50.0 million undrawn Revolving Credit Facility, which has available
an additional tack-on of $25.0 million. Proceeds from the new Bank Credit
Facilities were used to payoff the balances of the previous Bank Credit
Facilities, acquire PCM, pay fees and expenses, and increase cash balances.
The PCM acquisition will be accounted for using the purchase method of
accounting. The acquisition did not result in a significant business
combination within the definition provided by the Securities and Exchange
Commission and therefore, pro forma financial information has not been
presented.
Insilco Technologies, Inc.'s credit agreement, dated August 25, 2000, is
attached as an exhibit and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired
--- -----------------------------------------
Not applicable.
(b) Forma financial Information
--- ---------------------------
The following unaudited pro forma condensed consolidated financial
statements are filed with this report:
<PAGE>
Pro Forma Condensed Consolidated Balance
Sheet as of June 30, 2000 Page F-1
Pro Forma Condensed Consolidated Statement
Of Operations
Six months ended June 30, 2000 Page F-2
Year ended December 31, 1999 Page F-3
The following pro forma unaudited condensed balance sheet as of June 20,
2000 presents the estimated impact of the sale of the automotive components
businesses as discussed in Item 2 on the Company's consolidated financial
position assuming such sale had occurred at June 30, 2000. The following
pro forma unaudited condensed consolidated statements of operations for the
six months ended June 30, 2000 and the year ended December 31, 1999 present
the estimated impact of the sale of the automotive components businesses on
the Company's historical consolidated statements of operations as if such
sale had occurred at the beginning of the applicable period. The
nonrecurring transactions related directly to the sale are excluded from
the pro forma statements of operations. The significant assumptions
utilized for the pro forma financial statements include: (i) the net
proceeds will be utilized to reduce the outstanding debt described above;
(ii) the interest rates for the outstanding debt are based upon the
weighted average rates during the applicable period; (iii) deferred tax
assets representing net operating losses will be used to minimize the tax
effect of the gain on the sale; and (iv) income tax expense (benefit)
attributable to the pro forma transactions is provided at the statutory tax
rate.
The unaudited pro forma condensed consolidated financial statements have
been prepared by the Company based upon assumptions deemed proper. The
unaudited pro forma condensed consolidated financial statements presented
herein are shown for illustrative purposes only and are not necessarily
indicative of the future financial position or future results of operations
of the Company or of the financial position or results of operations that
would have actually occurred had the transaction been in effect as of the
date or for the periods presented.
The unaudited pro forma condensed consolidated financial statements should
be read in conjunction with the historical financial statements and related
notes of the Company.
(c) Exhibits.
--- ---------
Exhibit No. Description
----------- -----------
2 (a) Transaction Agreement, dated July 20, 2000, by and
among Insilco Holding Co. (and certain of its
subsidiaries) and ThermaSys Holding Company (and
certain of its subsidiaries). (Reference made to
Exhibit 2(a) in the Form 8-K dated July 20, 2000, and
filed with the SEC on July 26, 2000.)
99 (a) Press release of Insilco Holding Co. issued August 28,
2000.
<PAGE>
99 (b) Credit Agreement dated August 25, 2000, among Insilco
Technologies, Inc., TAT Technology, Inc., Various
Financial Institutions, Bank One, NA, DLJ Capital
Funding, Inc., and Huntington Bank.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INSILCO TECHNOLOGIES, INC.
-------------------------------------
Registrant
Date: September 7, 2000 By: /s/ Michael R. Elia
------------------------
Michael R. Elia
Senior Vice President, Chief Financial
Officer, Treasurer and Secretary
<PAGE>
EXHIBIT INDEX
-------------
Exhibit No. Description
----------- -----------
2 (a) Transaction Agreement, dated July 20, 2000, by and
among Insilco Holding Co. (and certain of its
subsidiaries) and ThermaSys Holding Company (and
certain of its subsidiaries). (Reference made to
Exhibit 2(a) in the Form 8-K dated July 20, 2000, and
filed with the SEC on July 26, 2000.)
99 (a) Press release of Insilco Holding Co. issued August 28,
2000.
99 (b) Credit Agreement dated August 25, 2000, among Insilco
Technologies, Inc., TAT Technology, Inc., Various
Financial Institutions, Bank One, NA, DLJ Capital
Funding, Inc., and Huntington Bank.
<PAGE>
Insilco Holding Co. and Subsidiaries
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of June 30, 2000
(In thousands)
<TABLE><CAPTION>
Automotive
Businesses
Sale
Assets Historical Adjustments Pro Forma
------ ---------- ----------- ---------
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 3,705 3,705
Trade receivables, net 60,308 60,308
Other receivables 899 899
Inventories, net 48,255 48,255
Deferred taxes 9,572 (1,293)(3) 8,279
Net assets of discontinued operations 106,685 (106,685)(1) --
Prepaid expenses and other current assets 2,078 2,078
--------- --------- ---------
Total current assets 231,502 (107,978) 123,524
Property, plant and equipment, net 49,655 49,655
Goodwill, net 87,407 87,407
Other assets and deferred charges 17,162 17,162
--------- --------- ---------
Total assets $ 385,726 (107,978) 277,748
========= ========= =========
Liabilities and Stockholder's Deficit
Current liabilities:
Current portion of long-term debt $ 1,266 1,266
Accounts payable 26,164 26,164
Accrued expenses 27,265 300 (2) 27,565
Income taxes payable 15,013 7,056 (3) 22,069
Other current liabilities 7,581 7,581
--------- --------- ---------
Total current liabilities 77,289 7,356 84,645
Long-term debt, excluding current portion 432,327 (143,782)(4) 288,545
Other long-term obligations, excluding current portion 35,007 5,352 (3) 40,359
Minority interest 100 100
15% Preferred stock; 3,000,000 shares authorized; 1,497,890 shares and
1,400,000 shares issued and outstanding at June 30, 2000 and
December 31, 1999, respectively 43,472 43,472
Stockholders' deficit:
Common stock, $.001 par value; 15,000,000 shares authorized;
1,478,987 shares issued and 1,471,769 outstanding at June 30, 2000, and
1,472,487 shares issued and 1,455,335 outstanding at December 31, 1999 1 1
Treasury stock, at cost (480) (480)
Additional paid-in capital 62,851 62,851
Accumulated deficit (261,213) 23,096 (5) (238,117)
Accumulated other comprehensive loss (3,628) (3,628)
--------- --------- ---------
Total liabilities and stockholder's deficit $ 385,726 (107,978) 277,748
========= ========= =========
1) To record the removal of the net assets of the automotive components businesses.
2) To record the accrual of expenses related to the sale.
3) To record the reduction of the deferred tax asset, the accrual of capital gains
tax and the increase in long term taxes payable.
4) To record the reduction in debt from the net proceeds of the sale.
5) To record the net gain on the sale.
</TABLE>
F-1
<PAGE>
INSILCO HOLDING CO. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Statement of Operations
Six Months Ended June 30, 2000
(In thousands, except per share data)
<TABLE><CAPTION>
TAT Automotive
(1) Net Purchase Taylor Businesses
TAT and Interest Interest Interest
Historical Operations Adjustments Adjustments Adjustment Pro Forma
---------- ---------- ----------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 170,669 5,819 -- -- -- 176,488
Cost of goods sold 123,864 3,709 -- -- -- 127,573
Depreciation and amortization 6,679 13 517(2) -- -- 7,209
Selling, general and administrative 23,955 1,224 -- -- -- 25,179
Restructuring Charge -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Operating income (loss) 16,171 873 (517) -- -- 16,527
Other Income (expense):
Interest expense (25,758) -- (1,141)(3) 938(5) 6,488(7) (19,473)
Interest income 153 21 -- -- -- 174
Other income, net (404) -- -- -- -- (404)
--------- --------- --------- --------- --------- ---------
Income (loss) from continuing
operations before income taxes (9,838) 894 (1,658) 938 6,488 (3,176)
Income tax (expense) benefit 1,629 (309) 422(4) (347)(6) (2,401)(8) (1,006)
--------- --------- --------- --------- --------- ---------
Net income (loss) (8,209) 585 (1,236) 591 4,087 (4,182)
Preferred stock dividend (3,359) -- -- -- -- (3,359)
--------- --------- --------- --------- --------- ---------
Net income (loss) available
to common $ (11,568) 585 (1,236) 591 4,087 (7,541)
========= ========= ========= ========= ========= =========
Basic loss available per common share:
Loss per share available to common $ (7.56) (4.93)
Basic shares 1,531 1,531
Diluted loss available per common share:
Loss per share available to common $ (7.56) (4.93)
Diluted shares 1,531 1,531
1) To include TAT Technologies 1 1/2 month translated statement of operations in our financial statement.
2) To reflect 1 1/2 months amortization of goodwill based on a straight-line basis over 20 years.
3) To reflect 1 1/2 months interest expense on borrowings under Insilco Technologies, Inc.'s credit facility to finance the
acquisition. Interest is calculated on the new debt of $102.1 million less the cash acquired of $3.6 million using an
assumed interest rate of 9 percent. A change of 1/8 percent in the interest rate would result in a change in interest
expense and net income of $16 and $10, before and after taxes, respectively.
4) To reflect the tax effect of the deductible pro forma adjustments at a statutory rate, 35 percent for federal and 2
percent for state. The amortization of the goodwill is not tax deductible.
5) To reflect 1 1/2 months decrease in interest expense resulting from the reduction of Insilco Technologies, Inc.'s credit
facility from the proceeds of the Taylor transaction. Interest is calculated on the decrease in debt of $92.8 million
at an assumed interest rate of 9 percent. A change of 1/8 percent in the interest rate would result in a change in
interest expense and net income of $13 and $8, before and after taxes, respectively.
6) To reflect the tax effect of the deductible pro forma adjustments at a statutory rate, 35 percent for federal and 2
percent for state.
7) To reflect a decrease in interest expense resulting from the reduction of Insilco Technologies, Inc.'s credit facility
from the proceeds of the ThermaSys transaction. Interest is calculated on the decrease in debt of $143.8 million at an
assumed interest rate of 9 percent. A change of 1/8 percent in the interest rate would result in a change in interest
expense and net income of $90 and $58, before and after taxes, respectively.
8) To reflect the tax effect of the deductible pro forma adjustments at a statutory rate, 35 percent for federal and 2
percent for state.
</TABLE>
F-2
<PAGE>
INSILCO HOLDING CO. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Statement of Operations
Twelve Months Ended December 31, 1999
(In thousands, except per share data)
<TABLE><CAPTION>
TAT (7) Automotive
(1) Net Purchase Taylor Automotive Businesses
TAT and Interest Interest Businesses Interest
Historical Operations Adjustments Adjustment Operations Adjustment Pro Forma
---------- ---------- ----------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales $ 476,355 46,549 -- -- (228,313) -- 294,591
Cost of goods sold 367,905 29,668 -- -- (176,501) -- 221,072
Depreciation and amortization 19,541 100 4,136(2) -- (9,365) -- 14,412
Selling, general and administrative 60,450 9,795 -- -- (20,303) -- 49,942
Restructuring Charge 6,382 -- -- -- (595) -- 5,787
--------- --------- --------- --------- --------- --------- ---------
Operating income (loss) 22,077 6,986 (4,136) -- (21,549) -- 3,378
Other Income (expense):
Interest expense (47,279) -- (8,861)(3) 8,352(5) 23 12,940(8) (34,825)
Interest income 389 164 -- -- 2 -- 555
Equity in net income of Thermalex 3,043 -- -- -- (3,043) -- --
Other income, net 10,064 -- -- -- (7,590) -- 2,474
--------- --------- --------- --------- --------- --------- ---------
Income (loss) from continuing
operations before income taxes (11,706) 7,150 (12,997) 8,352 (32,157) 12,940 (28,418)
Income tax (expense) benefit 8,112 (2,470) 3,279(4) (3,090)(6) 11,355 (4,788)(9) 12,398
--------- --------- --------- --------- --------- --------- ---------
Net income (loss) (3,594) 4,680 (9,718) 5,262 (20,802) 8,152 (16,020)
Preferred stock dividend (6,019) -- -- -- -- -- (6,019)
--------- --------- --------- --------- --------- --------- ---------
Net income (loss) available
to common $ (9,613) 4,680 (9,718) 5,262 (20,802) 8,152 (22,039)
========= ========= ========= ========= ========= ========= =========
Basic loss available per common share:
Loss per share available to common $ (6.17) (14.15)
Basic shares 1,558 1,558
Diluted loss available per common share:
Loss per share available to common $ (6.17) (14.15)
Diluted shares 1,558 1,558
</TABLE>
F-3
<PAGE>
Notes to the Unaudited Pro Forma Condensed Consolidated Statements of Income:
1) To include TAT Technologies twelve-month translated statement of
operations in our financial statement.
2) To reflect the increase in amortization due to the amortization of
goodwill on a straight-line basis over 20 years.
3) To reflect interest expense on borrowings under Insilco Technologies,
Inc.'s credit facility to finance the acquisition. Interest is
calculated on the new debt of $102.1 million less the cash acquired of
$3.6 million using an assumed interest rate of 9 percent. A change of
1/8 percent in the interest rate would result in a change in interest
expense and net income of $123 and $79, before and after taxes,
respectively.
4) To reflect the tax effect of the deductible pro forma adjustments at a
statutory rate, 35 percent for federal and 2 percent for state. The
amortization of the goodwill is not tax deductible.
5) To reflect a decrease in interest expense resulting from the reduction
of Insilco Technologies, Inc.'s credit facility from the proceeds of
the Taylor transaction. Interest is calculated on the decrease in debt
of $92.8 million at an assumed interest rate of 9 percent. A change of
1/8 percent in the interest rate would result in a change in interest
expense and net income of $116 and $74, before and after taxes,
respectively.
6) To reflect the tax effect of the deductible pro forma adjustments at a
statutory rate, 35 percent for federal and 2 percent for state.
7) To remove the operations of the automotive components businesses as a
result of the sale.
8) To reflect a decrease in interest expense resulting from the reduction
of Insilco Technologies, Inc.'s credit facility from the proceeds of
the ThermaSys transaction. Interest is calculated on the decrease in
debt of $143.8 million at an assumed interest rate of 9 percent. A
change of 1/8 percent in the interest rate would result in a change in
interest expense and net income of $180 and $115, before and after
taxes, respectively.
9) To reflect the tax effect of the deductible pro forma adjustments at a
statutory rate, 35 percent for federal and 2 percent for state.
F-4
<PAGE>
EX-99.(a)
PRESS RELEASE OF INSILCO HOLDING CO.
EXHIBIT 99 (a)
--------------
[LOGO]
INSILCO
Excellence in Electronics and Telecommunications Components
--------------------------------------------------------------------------------
News Release
--------------------------------------------------------------------------------
For Immediate Release
Investors: Michael R. Elia Media: Melodye Demastus
Sr. Vice President & CFO Melrose Consulting
(614) 791-3117 (614) 771-0860
INSILCO HOLDING CO. COMPLETES SALE OF AUTOMOTIVE BUSINESSES AND
PURCHASE OF PRECISION CABLE MANUFACTURING
Columbus, Ohio, August 28, 2000 -- Insilco Holding Co. (OTC Bulletin
Board: INSL) today announced that on August 25, 2000, through its wholly owned
subsidiary, Insilco Corporation, it completed the previously announced sale of
its automotive businesses. Net proceeds of $143.8 million from the divestiture
were used to reduce drawn balances under the existing Bank Credit Facilities.
The Company also announced that as part of its strategic repositioning
it has changed the name of its operating subsidiary, Insilco Corporation, to
Insilco Technologies, Inc. (IT), amended IT's previous Bank Credit Agreement and
Facilities to $210 million, and completed IT's previously announced acquisition
of Precision Cable Manufacturing Company (PCM). Proceeds from the amended credit
agreement, net of fees and expenses, were used to repay the balances under the
previous Bank Credit Facilities, complete the acquisition of PCM, and increase
liquidity.
Insilco Holding Co., based in suburban Columbus, Ohio is a leading
global supplier of custom cable assemblies and wire harnesses; passive
electronic components, including high-speed network connectors and power
transformers; and high precision metal stampings. Insilco serves several rapidly
growing markets including the telecommunications, computer networking, data
processing, medical instrumentation and automotive markets. Insilco has
operations in the United States, Canada, Mexico, Northern Ireland, Ireland,
Puerto Rico and the Dominican Republic.
Investor Relations Contact: Michael R. Elia, (614) 791-3117 or write to Insilco
Holding Co., Investor Relations, 425 Metro Place North, Box 7196, Dublin, OH
43017 or call Melodye Demastus, Melrose Consulting (614) 771-0860. You may also
visit our web site at http://www.insilco.com.
----------------------
# # #
<PAGE>
EX-99.(b)
CREDIT AGREEMENT DATED AUGUST 25, 2000
EXHIBIT 99(b)
-------------
[EXECUTION COPY]
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT,
dated as of August 25, 2000,
among
INSILCO TECHNOLOGIES, INC.,
as a Borrower,
T.A.T. TECHNOLOGY INC.,
as the Canadian Borrower,
VARIOUS FINANCIAL INSTITUTIONS,
as the Lenders,
BANK ONE, NA,
as the Administrative Agent
for the Lenders,
DLJ CAPITAL FUNDING, INC.,
as the Syndication Agent
for the Lenders,
and
TRANSAMERICA BUSINESS CREDIT CORPORATION and
LASALLE NATIONAL BANK,
as Co-Documentation Agents
for the Lenders.
-----------------------------
LEAD ARRANGER:
DLJ CAPITAL FUNDING, INC.
<PAGE>
TABLE OF CONTENTS
Section Page
------- ----
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms.....................................................3
1.2. Use of Defined Terms.............................................45
1.3. Cross-References.................................................46
1.4. Accounting and Financial Determinations..........................46
ARTICLE II
CONTINUATION OF CERTAIN EXISTING LOANS,
COMMITMENTS, BORROWING AND ISSUANCE PROCEDURES,
NOTES AND LETTERS OF CREDIT
2.1. Commitments......................................................47
2.1.1. Term Loan Commitments............................................47
2.1.2. Revolving Loan Commitment and Swing Line Loan Commitment.........48
2.1.3. Letter of Credit Commitment......................................49
2.1.4. Lenders Not Permitted or Required to Make the Loans..............49
2.1.5. Issuer Not Permitted or Required to Issue Letters of Credit......50
2.2. Changes in Commitment Amount.....................................50
2.2.1. Reduction of Commitment Amount...................................50
2.2.2. Increases in Revolving Loan Commitment Amount; Additional Term
Loan Commitments.................................................51
2.3. Borrowing Procedures and Funding Maintenance.....................52
2.3.1. Revolving Loans..................................................52
2.3.2. Swing Line Loans.................................................53
2.4. Continuation and Conversion Elections............................54
2.5. Funding..........................................................55
2.6. Issuance Procedures..............................................55
2.6.1. Other Lenders' Participation.....................................56
2.6.2. Disbursements; Conversion to Committed Revolving Loans...........56
2.6.3. Reimbursement....................................................57
2.6.4. Deemed Disbursements.............................................58
2.6.5. Nature of Reimbursement Obligations..............................58
2.7. Register; Notes..................................................59
-i-
<PAGE>
2.8. Uncommitted Revolving Loans......................................60
2.8.1. Uncommitted Revolving Loan Borrowing Request.....................61
2.8.2. Invitation for Uncommitted Interest Quotes.......................62
2.8.3. Submission and Contents of Uncommitted Interest Quotes...........62
2.8.4. Uncommitted Revolving Loan Acceptance............................63
2.9. Special Provisions for Foreign Currency Loans and Letters of
Credit...........................................................64
2.9.1. Dollar Equivalent Determinations.................................64
2.9.2. Foreign Currency Letters of Credit...............................65
2.9.3. Currency Fluctuation, etc........................................65
2.9.4. European Monetary Union..........................................65
2.10. Consequences of Effectiveness....................................66
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
3.1. Repayments and Prepayments; Application..........................66
3.1.1. Repayments and Prepayments.......................................66
3.1.2. Application......................................................71
3.1.3. Limitation on Mandatory Prepayments of the Initial Canadian
Term-B Loans.....................................................72
3.2. Interest Provisions..............................................73
3.2.1. Rates............................................................73
3.2.2. Post-Maturity Rates..............................................74
3.2.3. Payment Dates....................................................74
3.3. Fees.............................................................75
3.3.1. Commitment Fees..................................................75
3.3.2. Administrative Agent Fee.........................................75
3.3.3. Letter of Credit Fee.............................................75
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
4.1. LIBO Rate Lending Unlawful.......................................76
4.2. Deposits Unavailable.............................................76
4.3. Increased LIBO Rate Loan Costs, etc..............................77
4.4. Funding Losses...................................................77
4.5. Increased Capital Costs..........................................78
4.6. Taxes............................................................78
4.7. Payments, Computations, etc......................................81
4.8. Sharing of Payments; Canadian Collateral.........................82
4.9. Setoff...........................................................84
-ii-
<PAGE>
4.10. Mitigation.......................................................84
4.11. Replacement of Lenders...........................................84
ARTICLE V
CONDITIONS TO EFFECTIVENESS AND
TO FUTURE CREDIT EXTENSIONS
5.1. Effectiveness....................................................85
5.1.1. Resolutions, etc.................................................85
5.1.2. Delivery of Notes................................................85
5.1.3. Subsidiary Guaranty..............................................85
5.1.4. Pledge Agreements, etc...........................................86
5.1.5. Closing Fees, Expenses, etc......................................87
5.1.6. UCC Filing Service...............................................87
5.1.7. Opinions of Counsel..............................................87
5.1.8. Solvency, etc....................................................88
5.1.9. Effective Date Certificate.......................................88
5.1.10. Transaction Documents............................................88
5.1.11. Consummation of Transaction......................................88
5.1.12. Financial Information, etc.......................................88
5.1.13. Payment of Outstanding Indebtedness, etc.........................89
5.1.14. Litigation.......................................................89
5.1.15. Insurance........................................................89
5.1.16. Satisfactory Legal Form..........................................89
5.2. All Credit Extensions............................................89
5.2.1. Compliance with Warranties, No Default, etc......................89
5.2.2. Credit Extension Request.........................................90
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1. Organization, etc................................................91
6.2. Due Authorization, Non-Contravention, etc........................91
6.3. Government Approval, Regulation, etc.............................91
6.4. Validity, etc....................................................91
6.5. Financial Information............................................92
6.6. No Material Adverse Change.......................................92
6.7. Litigation, etc..................................................92
6.8. Subsidiaries.....................................................92
6.9. Ownership of Properties..........................................92
-iii-
<PAGE>
6.10. Taxes............................................................93
6.11. Pension and Welfare Plans........................................93
6.12. Environmental Matters............................................93
6.13. Regulations U and X..............................................94
6.14. Accuracy of Information..........................................94
6.15. Solvency.........................................................95
ARTICLE VII
COVENANTS
7.1. Affirmative Covenants............................................95
7.1.1. Financial Information, Reports, Notices, etc.....................95
7.1.2. Compliance with Laws, etc........................................97
7.1.3. Maintenance of Properties........................................97
7.1.4. Insurance........................................................98
7.1.5. Books and Records................................................98
7.1.6. Environmental Covenant...........................................98
7.1.7. Future Subsidiaries..............................................99
7.1.8. Future Acquisitions of Leased, Real or Other Property...........100
7.1.9. Use of Proceeds, etc............................................101
7.1.10. Hedging Obligations.............................................101
7.1.11. Intellectual Property...........................................101
7.1.12. Material Subsidiaries...........................................101
7.2. Negative Covenants..............................................102
7.2.1. Business Activities.............................................102
7.2.2. Indebtedness....................................................102
7.2.3. Liens...........................................................104
7.2.4. Financial Covenants.............................................106
7.2.5. Investments.....................................................108
7.2.6. Restricted Payments, etc........................................110
7.2.7. Capital Expenditures, etc.......................................112
7.2.8. Consolidation, Merger, etc......................................112
7.2.9. Asset Dispositions, etc.........................................113
7.2.10. Modification of Certain Agreements..............................114
7.2.11. Transactions with Affiliates....................................115
7.2.12. Negative Pledges, Restrictive Agreements, etc...................115
7.2.13. Securities of Subsidiaries......................................116
7.2.14. Sale and Leaseback..............................................116
7.2.15. Designation of Senior Indebtedness..............................116
-iv-
<PAGE>
ARTICLE VIII
EVENTS OF DEFAULT
8.1. Listing of Events of Default....................................116
8.1.1. Non-Payment of Obligations......................................116
8.1.2. Breach of Warranty..............................................116
8.1.3. Non-Performance of Certain Covenants and Obligations............117
8.1.4. Non-Performance of Other Covenants and Obligations..............117
8.1.5. Default on Other Indebtedness...................................117
8.1.6. Judgments.......................................................117
8.1.7. Pension Plans...................................................117
8.1.8. Change in Control...............................................118
8.1.9. Bankruptcy, Insolvency, etc.....................................118
8.1.10. Impairment of Security, etc.....................................119
8.1.11. Subordinated Notes..............................................119
8.2. Action if Bankruptcy, etc.......................................119
8.3. Action if Other Event of Default................................119
ARTICLE IX
THE AGENTS
9.1. Actions.........................................................120
9.2. Funding Reliance, etc...........................................121
9.3. Exculpation; Notice of Default..................................122
9.4. Successor.......................................................123
9.5. Credit Extensions by each Agent.................................123
9.6. Credit Decisions................................................124
9.7. Copies, etc.....................................................124
9.8. The Syndication Agent and the Administrative Agent..............124
9.9. Co-Documentation Agents.........................................124
9.10. Action on Instructions of Lenders...............................125
9.11. Canadian Collateral Documents...................................125
9.12. Release of Certain Liens and Obligations........................126
-v-
<PAGE>
ARTICLE X
COMPANY GUARANTY
10.1. Guaranty........................................................126
10.2. Acceleration of Obligations Hereunder...........................127
10.3. Obligations Hereunder Absolute, etc.............................127
10.4. Reinstatement, etc..............................................128
10.5. Waiver, etc.....................................................128
10.6. Postponement of Subrogation.....................................128
10.7. Successors, Transferees and Assigns; Transfers of Notes, etc....129
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1. Waivers, Amendments, etc........................................129
11.2. Notices.........................................................131
11.3. Payment of Costs and Expenses...................................131
11.4. Indemnification.................................................132
11.5. Survival........................................................134
11.6. Severability....................................................134
11.7. Headings........................................................134
11.8. Execution in Counterparts, Effectiveness, etc...................134
11.9. Governing Law; Entire Agreement.................................135
11.10. Successors and Assigns..........................................135
11.11. Sale and Transfer of Loans and Commitments; Participations in
Loans...........................................................135
11.11.1. Assignments.....................................................135
11.11.2. Participations..................................................138
11.12. Other Transactions..............................................139
11.13. Forum Selection and Consent to Jurisdiction.....................139
11.14. Waiver of Jury Trial............................................140
11.15. Confidentiality.................................................140
11.16. Judgment Currency...............................................141
11.17. English Language................................................141
SCHEDULE I - Disclosure Schedule
SCHEDULE II - Percentages and Administrative Information
EXHIBIT A-1 - Form of Revolving Note
EXHIBIT A-2 - Form of Term-A Note
-vi-
<PAGE>
EXHIBIT A-3 - Form of Term-B Note
EXHIBIT A-4 - Form of Swing Line Note
EXHIBIT B-1 - Form of Borrowing Request
EXHIBIT B-2 - Form of Uncommitted Revolving Loan Borrowing Request
EXHIBIT B-3 - Form of Issuance Request
EXHIBIT C - Form of Continuation/Conversion Notice
EXHIBIT D - Form of Effective Date Certificate
EXHIBIT E - Form of Compliance Certificate
EXHIBIT F-1 - Form of Invitation for Uncommitted Interest Quotes
EXHIBIT F-2 - Form of Uncommitted Interest Quotes
EXHIBIT G-1 - Form of Holdco Guaranty and Pledge Agreement
EXHIBIT G-2 - Form of Company Pledge and Security Agreement
EXHIBIT G-3 - Form of Subsidiary Pledge and Security Agreement
EXHIBIT H - Form of Subsidiary Guaranty
EXHIBIT I - Form of Lender Assignment Agreement
EXHIBIT J - Form of Solvency Certificate
-vii-
<PAGE>
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August 25,
2000, is among INSILCO TECHNOLOGIES, INC. (formerly known as Insilco
Corporation), a Delaware corporation (the "Company"), T.A.T. TECHNOLOGY INC., a
company organized under the laws of Quebec (the "Canadian Borrower"), the
various financial institutions as are or may become parties hereto
(collectively, the "Lenders"), DLJ CAPITAL FUNDING, INC. ("DLJ"), as lead
arranger and sole book runner (in such capacity, the "Lead Arranger") and
syndication agent (in such capacity, the "Syndication Agent") for the Lenders,
BANK ONE, NA ("Bank One"), with its main office in Chicago, Illinois, as
administrative agent (in such capacity, the "Administrative Agent", and
collectively with the Syndication Agent, the "Agents") for the Lenders, and
TRANSAMERICA BUSINESS CREDIT CORPORATION and LASALLE NATIONAL BANK, as
co-documentation agents (in such capacity, the "Co- Documentation Agents") for
the Lenders.
W I T N E S S E T H:
WHEREAS, DLJ Merchant Banking Partners II, L.P., DLJ Merchant Banking
Partners II-A, L.P., DLJ Offshore Partners II, L.P., DLJ Diversified Partners,
L.P., DLJ Diversified Partners-A, L.P., DLJMB Funding II, Inc., DLJ Millennium
Partners, L.P., DLJ Millennium Partners-A, L.P., DLJ EAB Partners, L.P., DLJ
ESC II, L.P. and DLJ First ESC, L.L.C. (collectively, the "DLJMB Entities"),
and Citicorp Venture Capital, Limited ("CVC", and together with the DLJMB
Entities, the "Equity Investors") own 100% of the issued and outstanding
Capital Stock of Insilco Holding Corporation, a Delaware corporation
("Holdco"), and Holdco owns 100% of the issued and outstanding Capital Stock of
the Company;
WHEREAS, the Company intends to consummate an acquisition (the
"Acquisition") from Byford Fleming and Dale Fleming (collectively, the
"Precision Sellers") of all issued and outstanding Capital Stock of Precision
Cable Manufacturing Corporation, a Texas corporation ("Precision"), and 0.0004%
of the Capital Stock of Precision Cable Manufacturing Corporation De Mexico,
S.A de C.V. pursuant to the Purchase Agreement, dated as of July 17, 2000,
among the Company, Precision and the Precision Sellers (the "Acquisition
Agreement");
WHEREAS, the Company intends
(a) to sell (the "Sales") to ThermaSys Corporation ("ThermaSys") (i)
all of the outstanding assets comprising the General Thermodynamics and
Thermal Components divisions of the Company (the "Sold Divisions"), (ii)
51% of the issued and outstanding Capital Stock of Dalian Thermodynamics
Incorporated, Ltd., a limited liability company organized and existing
under the laws of the People's Republic of China ("Dalian")
1
<PAGE>
(provided, however, that the consummation of such sale may be deferred by
up to 12 months after the Effective Date), and (iii) 100% of the issued
and outstanding Capital Stock of Thermal Components, Inc., a Delaware
corporation ("TCI"), and, indirectly through a Wholly-Owned Subsidiary,
Arup Alu-Rohr und Profil GmbH, a company organized and existing under the
laws of Germany ("Arup" and together with TCI and Dalian, collectively,
the "Sold Subsidiaries"); and
(b) cause its Subsidiaries Great Lake, Inc. (as survivor of the GLI
Merger), a Delaware corporation ("GLI"), and Thermal Transfer Products,
Ltd., a Wisconsin corporation ("TTP"), to enter into mergers (including
the GLI Merger, the "Reverse Mergers") with newly-formed Wholly-Owned
Subsidiaries of ThermaSys (the "Reverse Merger Subsidiaries"), with GLI
and TTP being the surviving corporations of the Reverse Mergers, and cause
its Subsidiary Steel Parts Corporation, a Delaware corporation ("SPC", and
together with GLI and TTP, the "Merger Companies"), to be merged (the
"Forward Merger", and together with the Reverse Mergers, the "Mergers";
the Mergers and the Sales being collectively referred to as the
"Divestiture"; and the Divestiture, the Acquisition and all transactions
related thereto, including those described in the recitals hereto, being
collectively referred to as the "Transaction") with and into a third
newly- formed Wholly-Owned Subsidiary of ThermaSys (the "Forward Merger
Subsidiary", and together with the Reverse Merger Subsidiaries, the
"Merger Subsidiaries"), with the Forward Merger Subsidiary to be the
surviving corporation of the Forward Merger;
WHEREAS, pursuant to the Amended and Restated Credit Agreement, dated as
of February 16, 2000 (as amended, supplemented or otherwise modified prior to
the date hereof, the "Existing Credit Agreement"), among the Company, the
Canadian Borrower, Insilco Deutschland Gmbh, the institutions party thereto as
lenders (the "Existing Lenders"), the institutions party thereto as issuing
banks (the "Existing Issuers"), the Syndication Agent, the Administrative
Agent, ABN Amro Bank N.V., Pittsburgh Branch, as Documentation Agent, and
Donaldson, Lufkin & Jenrette Securities Corporation, as Lead Arranger, the
Existing Lenders and the Existing Issuers committed to make, and made,
extensions of credit to the borrowers thereunder (the "Existing Borrowers") on
the terms and conditions set forth therein, including, term loans (the
"Existing Term Loans"), revolving loans (the "Existing Revolving Loans", and
collectively with the Existing Term Loans, the "Existing Loans") and letters of
credit (the "Existing Letters of Credit");
WHEREAS, in connection with the Transaction, the Company has requested
that the Existing Credit Agreement be amended and restated, and the Agents, the
Lenders and the Issuer have agreed (subject to the terms of this Agreement) to
amend and restate the Existing Credit Agreement in its entirety as set forth in
this Agreement, and the parties hereto have agreed that (a) this Agreement does
not constitute a novation of the obligations and liabilities existing under the
Existing Credit Agreement or evidence payment of all or any of such obligations
and liabilities, (b) the commitments extended to the Borrowers under the
Existing Credit Agreement
2
<PAGE>
shall be extended or advanced upon the amended and restated terms and conditions
contained in this Agreement, and (c) the Existing Loans and other Obligations
outstanding under the Existing Credit Agreement shall be governed by and deemed
to be outstanding under the amended and restated terms and conditions contained
in this Agreement, with the intent that the terms of this Agreement shall
supersede the terms of the Existing Credit Agreement (each of which shall
hereafter have no further effect upon the parties thereto, other than for
accrued fees and expenses, and indemnification provisions, accrued and owing
under the terms of the Existing Credit Agreement on or prior to the date hereof
or arising (in the case of an indemnification) under the terms of the Existing
Credit Agreement);
WHEREAS, all Obligations are and shall continue to be secured by, among
other things, the Pledge Agreements and the other Loan Documents and shall be
guaranteed pursuant to the Subsidiary Guaranty; and
WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth, to extend the Commitments and make the Loans
and issue (or participate in) Letters of Credit for the account of the Company
and its Subsidiaries;
NOW, THEREFORE, the parties hereto agree to amend and restate the Existing
Credit Agreement, and the Existing Credit Agreement is hereby, upon
satisfaction (or waiver in accordance with Section 11.1) of the conditions set
forth in Section 5.1, amended and restated in its entirety, as follows.
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Absolute Rate Auction" means a solicitation of Uncommitted Interest
Quotes setting forth Uncommitted Absolute Interest Rates pursuant to Section
2.8.
"Acquired Controlled Person" means any Person (a) in which the Company or
any Restricted Subsidiary has made an Investment permitted under clause (k) of
Section 7.2.5 and (b) as to which the Company or such Restricted Subsidiary
exercises control. For purposes hereof, "control" means the power to appoint a
majority of the board of directors (or other equivalent governing body) of such
Person or to otherwise direct or cause the direction of the management or
policies of such Person, whether by contractual arrangement or otherwise.
3
<PAGE>
"Acquisition" is defined in the second recital.
"Acquisition Agreement" is defined in the second recital.
"Additional Term-A Loan" is defined in clause (a)(ii) of Section 2.1.1.
"Additional Term-A Loan Commitment" is defined in Section 2.2.2.
"Additional Term-A Loan Commitment Amount" is defined in Section 2.2.2.
"Additional Term-A Loan Commitment Termination Date" means, with respect
to any Additional Term-A Loan Commitment, the earliest of (a) any date agreed
by the Company, the Lender providing such Additional Term-A Loan Commitment and
the other Lenders providing related Additional Term-A Loan Commitments, (b) the
date upon which Additional Term-A Loans in an aggregate principal amount equal
to the related Additional Term-A Loan Commitment Amount shall have been made
(immediately after the making of such Additional Term-A Loans on such date) and
(c) the date on which any Commitment Termination Event occurs.
"Additional Term-B Loan" is defined in clause (b)(ii) of Section 2.1.1.
"Additional Term-B Loan Commitment" is defined in Section 2.2.2.
"Additional Term-B Loan Commitment Amount" is defined in Section 2.2.2.
"Additional Term-B Loan Commitment Termination Date" means, with respect
to any Additional Term-B Loan Commitment, the earliest of (a) any date agreed
by the Company, the Lender providing such Additional Term-B Loan Commitment and
the other Lenders providing related Additional Term-B Loan Commitments, (b) the
date upon which Additional Term-B Loans in an aggregate principal amount equal
to the related Additional Term-B Loan Commitment Amount shall have been made
(immediately after the making of such Additional Term-A Loans on such date) and
(c) the date on which any Commitment Termination Event occurs.
"Additional Term Loan Commitment" means an Additional Term-A Loan
Commitment or an Additional Term-B Loan Commitment.
"Additional Term Loan Commitment Amount" means an Additional Term-A Loan
Commitment Amount or an Additional Term-B Loan Commitment Amount.
4
<PAGE>
"Additional Term Loan Commitment Termination Date" mean an Additional
Term-A Loan Commitment Termination Date or an Additional Term-B Loan Commitment
Termination Date.
"Additional Term Loans" means, collectively, Additional Term-A Loans and
Additional Term-B Loans.
"Administrative Agent" is defined in the preamble and includes each other
Person as shall have subsequently been appointed as the successor
Administrative Agent pursuant to Section 9.4.
"Administrative Agent Fee Letter" means the confidential fee letter, dated
the date hereof, between the Company and the Administrative Agent.
"Affiliate" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power (a)
to vote 10% or more of the securities (on a fully diluted basis) having
ordinary voting power for the election of directors or managing general
partners, or (b) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"Agents" means, collectively, the Administrative Agent and the Syndication
Agent.
"Agreement" means, on any date, the Existing Credit Agreement as amended
and restated hereby and as further amended, supplemented, amended and restated,
or otherwise modified and in effect on such date.
"Aggregate Pro Rata Share" means, with respect to any Lender, the
percentage obtained by dividing (a) the sum of (i) such Lender's Revolving Loan
Commitment at such time and (ii) such Lender's Term Loans outstanding at such
time by (b) the sum of (i) the aggregate amount of all Revolving Loan
Commitments at such time and (ii) the aggregate amount of all Term Loans
outstanding at such time; provided, however, if all of the Commitments are
terminated pursuant to the terms hereof, then "Aggregate Pro Rata Share" means
the percentage obtained by dividing (x) such Lender's outstanding Term Loans
and Revolving Loans by (y) the aggregate outstanding amount of all Term Loans
and Revolving Loans.
"Alternate Base Rate" means, for any day and with respect to all Base Rate
Loans, the higher of: (a) 0.50% per annum above the latest Federal Funds Rate;
and (b) the Prime Rate of interest in effect for such day as most recently
publicly announced by the Administrative Agent in Chicago, Illinois. Any change
in the Prime Rate established or announced by the
5
<PAGE>
Administrative Agent shall take effect at the opening of business on the day of
such establishment or announcement.
"Annualized" means (a) with respect to the end of the first Fiscal Quarter
of the Company ending after the Effective Date, the applicable amount for such
Fiscal Quarter multiplied by four, (b) with respect to the second Fiscal
Quarter of the Company ending after the Effective Date, the applicable amount
for such Fiscal Quarter and the immediately preceding Fiscal Quarter multiplied
by two, and (c) with respect to the third Fiscal Quarter of the Company ending
after the Effective Date, the applicable amount for such Fiscal Quarter and the
immediately preceding two Fiscal Quarters multiplied by one and one-third.
"Applicable Commitment Fee" means, (a) for each day from the Effective
Date through (but excluding) the date upon which the Compliance Certificate for
the second full Fiscal Quarter ending after the Effective Date is delivered or
required to be delivered by the Company to the Administrative Agent pursuant to
clause (c) of Section 7.1.1, a fee which shall accrue at a rate of 0.50% per
annum, and (b) for each day thereafter, a fee which shall accrue at the
applicable rate per annum set forth below under the column entitled "Applicable
Commitment Fee", determined by reference to the applicable Leverage Ratio
referred to below:
Applicable
Leverage Ratio Commitment Fee
-------------- --------------
greater than or
equal to 3.25:1 .500%
less than 3.25:1 .375%
The Leverage Ratio used to compute the Applicable Commitment Fee for any
day referred to in clause (ii) above shall be the Leverage Ratio set forth in
the Compliance Certificate most recently delivered by the Company to the
Administrative Agent on or prior to such day pursuant to clause (c) of Section
7.1.1. Changes in the Applicable Commitment Fee resulting from a change in the
Leverage Ratio shall become effective on the first day following delivery by
the Company to the Administrative Agent of a new Compliance Certificate
pursuant to clause (c) of Section 7.1.1. If the Company shall fail to deliver a
Compliance Certificate within the number of days after the end of any Fiscal
Quarter as required pursuant to clause (c) of Section 7.1.1 (without giving
effect to any grace period), the Applicable Commitment Fee from and including
the first day after the date on which such Compliance Certificate was required
to be delivered to and including the date the Company delivers to the
Administrative Agent the next Compliance Certificate shall conclusively equal
the highest Applicable Commitment Fee set forth above. Notwithstanding the
foregoing, the Company may, in its sole discretion, within ten Business Days
following the end of any Fiscal Quarter, deliver to the Administrative Agent a
written
6
<PAGE>
estimate (the "Leverage Ratio Estimate") setting forth the Company's good faith
estimate of the Leverage Ratio (based on calculations contained in an estimated
Compliance Certificate) that will be set forth in the next Compliance
Certificate required to be delivered by the Company to the Administrative Agent
pursuant to clause (c) of Section 7.1.1. In the event that the Leverage Ratio
Estimate indicates that there would be a change in the Applicable Commitment Fee
resulting from a change in the Leverage Ratio, such change will become effective
on the first day following delivery of the Leverage Ratio Estimate. In the event
that, once the next Compliance Certificate is delivered, the Leverage Ratio as
set forth in such Compliance Certificate differs from that calculated in the
Leverage Ratio Estimate delivered for the Fiscal Quarter with respect to which
such Compliance Certificate has been delivered, and such difference results in
an Applicable Commitment Fee which is greater than the Applicable Commitment Fee
theretofore in effect, then (A) such greater Applicable Commitment Fee shall be
deemed to be in effect for all purposes of this Agreement from the first day
following the delivery of the Leverage Ratio Estimate and (B) if the Company
shall have theretofore made any payment of commitment fees in respect of the
period from the first day following the delivery of the Leverage Ratio Estimate
to the actual date of delivery of such Compliance Certificate, then, on the next
Quarterly Payment Date, the Company shall pay as a supplemental payment of
commitment fees, an amount which equals the difference between the amount of
commitment fees that would otherwise have been paid based on such new Leverage
Ratio and the amount of such commitment fees actually so paid.
"Applicable Margin" means at all times during the applicable periods set
forth below,
(a) with respect to the unpaid principal amount of each Term-B Loan
maintained as a (i) Base Rate Loan, 2.50% per annum and (ii) LIBO Rate
Loan, 3.75% per annum;
(b) from the Effective Date through (but excluding) the date upon
which the Compliance Certificate for the second full Fiscal Quarter ending
after the Effective Date is delivered by the Company to the Administrative
Agent pursuant to clause (c) of Section 7.1.1, with respect to the unpaid
principal amount of each (i) Swing Line Loan (which shall be borrowed and
maintained only as a Base Rate Loan) and each Committed Revolving Loan and
Term-A Loan maintained as a Base Rate Loan, 2.00% per annum, and (ii)
Committed Revolving Loan and Term-A Loan maintained as a LIBO Rate Loan,
3.25% per annum; and
(c) at all times after the date of delivery of the Compliance
Certificate described in clause (b) above, with respect to the unpaid
principal amount of each (i) Swing Line Loan, Committed Revolving Loan and
Term-A Loan maintained as a Base Rate Loan, the rate determined by
reference to the applicable Leverage Ratio and at the applicable
percentage per annum set forth below under the column entitled "Applicable
Margin for Base Rate Loans", and (ii) Committed Revolving Loan and Term-A
Loan maintained as a LIBO Rate Loan, the rate determined by reference to
the applicable Leverage Ratio and at
7
<PAGE>
the applicable percentage per annum set forth below under the column
entitled "Applicable Margin for LIBO Rate Loans".
Applicable Margin For Committed Revolving Loans, Swing Line Loans
and Term-A Loans
Applicable Applicable
Margin For Base Margin For LIBO
Leverage Ratio Rate Loans Rate Loans
-------------- ---------- ----------
greater than or equal to
3.25:1 2.00% 3.25%
greater than or equal to
2.75:1 and less than 3.25:1 1.50% 2.75%
greater than or equal to
2.25:1 and less than 2.75:1 1.00% 2.25%
less than 2.25:1 0.50% 1.75%
The Leverage Ratio used to compute the Applicable Margin for Swing Line
Loans, Committed Revolving Loans and Term-A Loans for any day referred to in
clause (c) above shall be the Leverage Ratio set forth in the Compliance
Certificate most recently delivered by the Company to the Administrative Agent
on or prior to such day pursuant to clause (c) of Section 7.1.1. Changes in the
Applicable Margin for Swing Line Loans, Committed Revolving Loans and Term-A
Loans resulting from a change in the Leverage Ratio shall become effective on
the first day following delivery by the Company to the Administrative Agent of
a new Compliance Certificate pursuant to clause (c) of Section 7.1.1. If the
Company shall fail to deliver a Compliance Certificate within the number of
days after the end of any Fiscal Quarter as required pursuant to clause (c) of
Section 7.1.1 (without giving effect to any grace period), the Applicable
Margin for Swing Line Loans, Committed Revolving Loans and Term-A Loans from
and including the first day after the date on which such Compliance Certificate
was required to be delivered to the date the Company delivers to the
Administrative Agent the next Compliance Certificate shall conclusively equal
the highest Applicable Margin for Swing Line Loans, Committed Revolving Loans
and Term-A Loans set forth above. Notwithstanding the foregoing, the Company
may, in its sole discretion, within ten Business Days following the end of any
Fiscal Quarter, deliver to the Administrative Agent a Leverage Ratio Estimate
setting forth the Company's good faith estimate of the Leverage Ratio (based on
calculations set forth in an estimated Compliance Certificate) that will be set
forth in the next Compliance Certificate required to be delivered by the
Company to the Administrative Agent pursuant to clause (c) of Section 7.1.1. In
the event that the Leverage Ratio Estimate indicates that there would be a
change in the Applicable Margin resulting from a change in the Leverage Ratio,
such change will
8
<PAGE>
become effective on the first day following delivery of the Leverage Ratio
Estimate. In the event that, once the next Compliance Certificate is delivered,
the Leverage Ratio as set forth in such Compliance Certificate differs from that
calculated in the Leverage Ratio Estimate delivered for the Fiscal Quarter with
respect to which such Compliance Certificate has been delivered, and such
difference results in an Applicable Margin which is greater than the Applicable
Margin theretofore in effect, then (A) such greater Applicable Margin shall be
deemed to be in effect for all purposes of this Agreement from the first day
following the delivery of the Leverage Ratio Estimate and (B) if the Company
shall have theretofore made any payment of interest in respect of Swing Line
Loans, Committed Revolving Loans or Term-A Loans, or of letter of credit fees
pursuant to the first sentence of Section 3.3.3, in any such case in respect of
the period from the first day following the delivery of the Leverage Ratio
Estimate to the actual date of delivery of such Compliance Certificate, then, on
the next Quarterly Payment Date, the Company shall pay as a supplemental payment
of interest and/or letter of credit fees, an amount which equals the difference
between the amount of interest and letter of credit fees that would otherwise
have been paid based on such new Leverage Ratio and the amount of such interest
and letter of credit fees actually so paid.
"Arup" is defined in the third recital.
"Assignee Lender" is defined in Section 11.11.1.
"Assignor Lender" is defined in Section 11.11.1.
"Assumed Indebtedness" means Indebtedness of a Person which is (a) in
existence at the time such Person becomes a Restricted Subsidiary or (b) is
assumed in connection with an Investment in or acquisition of such Person, and
has not been incurred or created by such Person in connection with, or in
anticipation or contemplation of, such Person becoming a Restricted Subsidiary.
"Authorized Officer" means, relative to any Obligor, those of its officers
whose signatures and incumbency shall have been certified to the Administrative
Agent and the Lenders pursuant to Section 5.1.1.
"Available Currency" means, at any time, Dollars, Canadian Dollars, Euros
and any other Foreign Currency approved by the Administrative Agent and, with
respect to Letters of Credit issued or to be issued by any Issuer in any such
Foreign Currency, such Issuer (which approval shall not be unreasonably
withheld).
"Bank One" is defined in the preamble.
"Base Financial Statements" is defined in clause (a) of Section 5.1.15.
9
<PAGE>
"Base Rate Loan" means a Loan bearing interest at a fluctuating rate
determined by reference to the Alternate Base Rate or, in the case of Canadian
Dollar Loans, the Canadian Prime Rate.
"Borrowers" means the Company and the Canadian Borrower.
"Borrowing" means Loans of the same type and Tranche made to the same
Borrower and in the same currency (and, in the case of LIBO Rate Loans, having
the same Interest Period) made by the relevant Lenders on the same Business Day
and pursuant to the same Borrowing Request in accordance with Section 2.1 (in
the case of Committed Loans) or Section 2.8 (in the case of Uncommitted
Revolving Loans).
"Borrowing Request" means (a) in the case of Committed Loans, a Committed
Loan Borrowing Request and (b) in the case of Uncommitted Revolving Loans, an
Uncommitted Revolving Loan Borrowing Request.
"Business Day" means any day which is neither a Saturday or Sunday nor a
legal holiday on which banks are authorized or required to be closed in New
York City or Chicago, Illinois and, (a) with respect to Borrowings of, Interest
Periods with respect to, payments of principal and interest in respect of, and
conversions of Base Rate Loans into, LIBO Rate Loans (i) on which dealings in
Dollars (or, in the case of LIBO Rate Loans denominated in a Foreign Currency,
such Foreign Currency) are carried on in the London interbank market and (ii)
with respect to LIBO Rate Loans denominated in a Foreign Currency, on which
banks are not authorized or required to be closed in the principal financial
center in the country of issue of such Foreign Currency (or in the case of LIBO
Rate Loans denominated in Euros, Frankfurt am Main, Germany) and (b) with
respect to Canadian Dollar Loans, on which banks are not authorized or required
to be closed in Toronto, Ontario, Canada.
"Calculation Date" means the last Business Day of each Fiscal Month.
"Canadian Borrower" is defined in the preamble.
"Canadian Borrower Hypothec" means collectively, the deed of hypothec, the
debenture bond(s) issued thereunder and the movable hypothec affecting such
bond(s), executed and delivered by an Authorized Officer of the Canadian
Borrower pursuant to the Existing Credit Agreement, as the same may be amended,
supplemented or modified from time to time.
"Canadian Collateral Documents" means the Canadian Hypothecs, the Company
Canadian Pledge Agreement and the Canadian Parent Guaranty.
"Canadian Dollar" and the sign "Cdn $" each mean the lawful money of
Canada.
10
<PAGE>
"Canadian Dollar Loan" means a Loan made in Canadian Dollars.
"Canadian Hypothecs" means the Canadian Borrower Hypothec and the Canadian
Parent Hypothec.
"Canadian Parent" means Insilco Technology (Canada)
Corporation/Corporation Technologie Insilco (Canada), a company organized under
the laws of Quebec.
"Canadian Parent Guaranty" means the Guarantee executed and delivered by
an Authorized Officer of the Canadian Parent pursuant to the Existing Credit
Agreement, as amended, supplemented, amended and restated or otherwise modified
from time to time.
"Canadian Parent Hypothec" means, collectively, the deed of hypothec, the
bond(s) issued thereunder and the movable hypothec affecting such bond(s),
executed and delivered by and Authorized Officer of the Canadian Parent
pursuant to the Existing Credit Agreement, including a specific hypothecation
of the issued and outstanding Capital Stock of the Canadian Borrower, as
amended, supplemented, amended and restated or otherwise modified from time to
time.
"Canadian Prime Rate" means, on any date and relative to Canadian Dollar
Loans, a fluctuating rate of interest per annum equal to the greater of (a) the
per annum rate of interest quoted, published and commonly known as the "prime
rate" of the Royal Bank of Canada which the Royal Bank of Canada establishes in
Canada as the reference rate of interest in order to determine interest rates
for loans in Canadian Dollars to its Canadian commercial borrowers, and (b) the
rate per annum determined by the Administrative Agent for one month bankers'
acceptances as appears on the Reuters Screen CDOR (Canadian Deposit Offered
Rate) page, plus 3/4 of 1% per annum, in each case as determined as at 10:00
a.m. (Montreal time), on the relevant Business Day (provided, however, that for
non-Business Days and if no CDOR rate is available for a given Business Day,
the CDOR rate for the immediately previous Business Day for which a CDOR rate
is available shall be used). The Canadian Prime Rate is not necessarily
intended to be the lowest rate of interest determined by the Administrative
Agent in connection with extensions of credit. Changes in the rate of interest
on that portion of any Canadian Dollar Loans maintained at the Canadian Prime
Rate will take effect simultaneously with each change in the Canadian Prime
Rate. The Administrative Agent will give notice promptly to the Canadian
Borrower and the applicable Lenders of changes in the Canadian Prime Rate.
"Canadian Term Loan Excess Amount" is defined in Section 3.1.3.
"Capital Expenditures" means for any period, the sum, without duplication,
of (a) the aggregate amount of all expenditures of the Company and its
Restricted Subsidiaries for fixed or capital assets made during such period
which, in accordance with GAAP, would be classified as capital expenditures,
and (b) the aggregate amount of the principal component of all Capitalized
11
<PAGE>
Lease Liabilities incurred during such period by the Company and its Restricted
Subsidiaries; provided, however, that Capital Expenditures shall not include (i)
any such expenditures or any such principal component funded with (A) any
Casualty Proceeds, as permitted under clause (e) of Section 3.1.1, or (B) any
Net Disposition Proceeds of any asset sale permitted under clause (c) of Section
7.2.9 or any asset sale of obsolete or worn out equipment permitted under
subclause (a)(i) of Section 7.2.9 or (ii) any Investment made under Section
7.2.5 (other than pursuant to clause (d) thereof).
"Capital Stock" means, (a) in the case of a corporation, any and all
capital or corporate stock, including shares of preferred or preference stock
of such corporation, (b) in the case of an association or business entity, any
and all shares, interests, participations, rights or other equivalents (however
designated) in respect of corporate or capital stock, (c) in the case of a
partnership or limited liability company, any and all partnership or membership
interests (whether general or limited) and (d) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Capitalized Lease Liabilities" means all monetary obligations of the
Company or any of its Subsidiaries under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as capitalized leases, and,
for purposes of this Agreement and each other Loan Document, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP, and the stated maturity thereof shall be the date of the last
payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Cash Collateralize" means, with respect to a Letter of Credit, the
deposit of immediately available funds, in the currency in which such Letter of
Credit is denominated, into a cash collateral account maintained with (or on
behalf of) the Administrative Agent on terms satisfactory to the Administrative
Agent in an amount equal to the Stated Amount of such Letter of Credit.
"Cash Equivalent Investment" means, at any time:
(a) any evidence of Indebtedness, maturing not more than one year
after such time, issued directly by the United States or any agency
thereof or guaranteed by the United States or any agency thereof;
(b) commercial paper, maturing not more than nine months from the
date of issue, which is (i) rated at least A-l by S&P or P-l by Moody's
and not issued by an Affiliate of any Obligor, or (ii) issued by any
Lender (or its holding company);
12
<PAGE>
(c) any time deposit, certificate of deposit or bankers acceptance,
maturing not more than one year after such time, maintained with or issued
by either (i) a commercial banking institution (including U.S. branches of
foreign banking institutions) that has a combined capital and surplus and
undivided profits of not less than $500,000,000, or (ii) any Lender;
(d) short-term tax-exempt securities rated not lower than MIG-1/1+ by
either Moody's or S&P with provisions for liquidity or maturity
accommodations of 183 days or less;
(e) repurchase agreements which (i) are entered into with any Person
referred to in clause (b) or (c) above or any other financial institution
whose unsecured long-term debt (or the unsecured long-term debt of whose
holding company) is rated at least A- or better by S&P or Baa1 or better
by Moody's and maturing not more than one year after such time and (ii)
are secured by a fully perfected security interest in securities of the
type referred to in clause (a) above;
(f) any money market or similar fund not less than 95% of the assets
of which are comprised of any of the items specified in clauses (a)
through (e) above and as to which withdrawals are permitted at least every
90 days; or
(g) in the case of any Restricted Subsidiary organized or having a
material place of business outside the United States, investments
denominated in the currency of the jurisdiction in which such Subsidiary
is organized or has a material place of business which are similar to the
items specified in clauses (a) through (f) above.
"Casualty Event" means the damage, destruction or condemnation, as the
case may be, of any property of the Company or any Restricted Subsidiary.
"Casualty Proceeds" means, with respect to any Casualty Event, the amount
of any insurance proceeds or condemnation awards received by the Company or any
Restricted Subsidiary in connection therewith, but excluding any proceeds or
awards required to be paid to a creditor (other than the Lenders) which holds a
Lien on the property which is the subject of such Casualty Event which Lien (a)
is permitted by Section 7.2.3 and (b) has priority over the Liens securing the
Obligations.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
13
<PAGE>
"Change in Control" means (a) the failure of Holdco at any time to own,
free and clear of all Liens and encumbrances (other than Liens of the types
permitted to exist under clauses (b), (d) and (g) of Section 7.2.3), all right,
title and interest in 100% of the Capital Stock of the Company; (b) the failure
of the Equity Investors, their Affiliates and members of management of the
Company and the Restricted Subsidiaries, in the aggregate, at any time to own,
free and clear of all Liens and encumbrances (other than Liens of the types
permitted to exist under clause (d) or (g) of Section 7.2.3) all right, title
and interest in at least 51% (on a fully diluted basis) of the economic and
voting interest in the Voting Stock of Holdco.
"Charter Document" means, relative to any Obligor, its certificate of
incorporation, its by-laws or other constituent documents and all shareholder
agreements, voting trusts and similar arrangements to which such Obligor is a
party applicable to any of its authorized shares of Capital Stock.
"Co-Documentation Agents" is defined in the preamble.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means all property of any Obligor and interests therein upon
which a Lien is granted to the Administrative Agent pursuant to any Loan
Document.
"Commitment" means, as the context may require, (a) a Lender's Additional
Term-A Loan Commitment, Additional Term-B Loan Commitment, Revolving Loan
Commitment or Letter of Credit Commitment or (b) the Swing Line Lender's Swing
Line Loan Commitment.
"Commitment Amount" means, as the context may require, any Additional Term
Loan Commitment Amount, the Revolving Loan Commitment Amount, the Letter of
Credit Commitment Amount or the Swing Line Loan Commitment Amount.
"Commitment Letter" means the commitment letter, dated July 14, 2000, from
DLJ to the Company, including all annexes and exhibits thereto.
"Commitment Termination Date" means, as the context may require, the
Revolving Loan Commitment Termination Date or any Additional Term Loan
Commitment Termination Date.
"Commitment Termination Event" means (a) the occurrence of any Event of
Default described in clauses (b) through (d) of Section 8.1.9, with respect to
any Obligor (other than Subsidiaries that are not Material Subsidiaries) or (b)
the occurrence and continuance of any other Event of Default and either (A) the
declaration of the Loans to be due and payable pursuant to Section 8.3, or (B)
in the absence of such declaration, the giving of notice to the Company by the
Administrative Agent, acting at the direction of the Required Lenders, that the
Commitments have been terminated.
14
<PAGE>
"Committed Borrowing" means a Borrowing comprised of Committed Loans.
"Committed Foreign Currency Sublimit" means $30,000,000.
"Committed Loan" means a Term Loan, a Committed Revolving Loan or a Swing
Line Loan.
"Committed Loan Borrowing Request" means a loan request and certificate
executed by an Authorized Officer of the Company, substantially in the form of
Exhibit B-1.
"Committed Revolving Loans" is defined in clause (a) of Section 2.1.2.
"Company" is defined in the preamble.
"Company Canadian Pledge Agreement " means the Company Canadian Pledge
Agreement executed and delivered by an Authorized Officer of the Company
pursuant to the Existing Credit Agreement, as amended, supplemented, amended
and restated or otherwise modified from time to time.
"Company Pledge and Security Agreement" means the Pledge and Security
Agreement, executed and delivered by an Authorized Officer of the Company
pursuant to the terms hereof, substantially in the form of Exhibit G-2 hereto,
amending and restating in its entirety the (a) Amended and Restated Company
Security Agreement, dated as of November 24, 1998, between the Company and the
Administrative Agent and (b) Amended and Restated Company Pledge Agreement,
dated as of November 24, 1998, between the Company and the Administrative
Agent, together with any supplemental Foreign Pledge Agreements delivered
pursuant to the terms of this Agreement, in each case as further amended,
supplemented, amended and restated or otherwise modified from time to time.
"Compliance Certificate" means a certificate duly completed and executed
by an Authorized Officer that is the president, the chief executive officer or
the chief financial or accounting officer of the Company, substantially in the
form of Exhibit E hereto.
"Contingent Liability" means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other
Person. The amount of any Person's obligation under any Contingent Liability
shall (subject to any limitation set forth therein) be deemed to be the
outstanding principal amount of the debt, obligation or other liability
guaranteed thereby.
15
<PAGE>
"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
applicable Borrower, substantially in the form of Exhibit C hereto.
"Continued Revolving Loans" is defined in clause (c) of Section 2.10.
"Controlled Group" means all members of a controlled group of corporations
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with the Company, are
treated as a single employer under Section 414(b) or 414(c) of the Code or
Section 4001 of ERISA, or for purposes of Section 412 of the Code, Section
414(m) or Section 414(o) of the Code.
"Credit Extension" means, as the context may require, (a) the making of a
Loan by a Lender, or (b) the issuance of any Letter of Credit, or the extension
of any Stated Expiry Date of any previously issued Letter of Credit, by any
Issuer.
"Current Assets" means, on any date, all assets which, in accordance with
GAAP, would be included as current assets on a consolidated balance sheet of
the Company and its Restricted Subsidiaries at such date as current assets
(excluding, however, amounts due and to become due from Affiliates of the
Company which have arisen from transactions which are other than arm's- length
and in the ordinary course of its business).
"Current Liabilities" means, on any date, all amounts which, in accordance
with GAAP, would be included as current liabilities on a consolidated balance
sheet of the Company and its Restricted Subsidiaries at such date, excluding
current maturities of Indebtedness.
"CVC" is defined in the first recital.
"Dalian" is defined in the third recital.
"Debt" means the outstanding principal amount of all Indebtedness of the
Company and its Restricted Subsidiaries that (i) is of the type referred to in
clause (a) (provided, however, that any Earn-Outs included in Indebtedness
under such clause (a) shall be included as "Debt" at the after-tax amount
thereof), (b) (other than undrawn commercial letters of credit and undrawn
letters of credit in respect of workers' compensation, insurance, performance
and surety bonds and similar obligations, in each case incurred in the ordinary
course of business) or (c), in each case of the definition of "Indebtedness"
and (ii) any Contingent Liability in respect of any of the foregoing types of
Indebtedness.
"Default" means any Event of Default or any condition, occurrence or event
which, after notice or lapse of time or both, would, unless cured or waived,
constitute an Event of Default.
16
<PAGE>
"Disbursement" is defined in Section 2.6.2.
"Disbursement Date" is defined in Section 2.6.2.
"Disbursement Due Date" is defined in Section 2.6.2.
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule I, as it may be amended, supplemented or otherwise modified from time
to time by the Company with the written consent of the Required Lenders.
"Disposition" (or similar words such as "Dispose") means any sale,
transfer or other conveyance (including by way of merger) of any of the
Company's or its Subsidiaries' assets (including accounts receivable and
Capital Stock of Subsidiaries) to any other Person (other than to another
Obligor) in a single transaction or series of transactions.
"Divestiture" is defined in the third recital.
"DLJ" is defined in the first recital.
"DLJMB Entities" is defined in the first recital.
"Dollar" and the sign "$" mean lawful money of the United States.
"Dollar Equivalent" means, on any date of determination, the equivalent in
Dollars of any Foreign Currency, determined by using the quoted spot rate at
which the Administrative Agent's principal office in Chicago, Illinois offers
to exchange Dollars for such Foreign Currency at the opening of business on
such date.
"Earn-outs" means any obligations by the Company or any of its Restricted
Subsidiaries to pay any amounts constituting the payment of deferred purchase
price with respect to any acquisition of a business (whether through the
purchase of assets or shares of Capital Stock), the amount of which payments is
calculated on the basis of, or by reference to, the bona fide financial or
other operating performance of such business or specified portion thereof or
any other similar arrangement.
"EBITDA" means, for any applicable period, subject to clause (b) of
Section 1.4, the sum for the Company and its Restricted Subsidiaries on a
consolidated basis of
17
<PAGE>
(a) Net Income;
plus
(b) the amount deducted in determining Net Income for such period
representing non-cash charges or expenses, including depreciation,
amortization, non-cash periodic post-retirement benefits and non-cash
expenses related to employee stock options and stock incentive plans
(excluding any non-cash charges representing an accrual of or reserve for
cash charges to be paid within the next twelve months);
plus
(c) the amount deducted in determining Net Income for such period
representing income taxes (whether paid or deferred);
plus
(d) the amount deducted in determining Net Income for such period
representing interest expense and Transaction Payments;
plus
(e) the amount deducted in determining Net Income for such period
representing all transaction-related costs and expenses incurred in
connection with or relating to the Taylor Sale or the T.A.T. Acquisition;
plus
(f) the "Performance Bonus" payable by the Canadian Borrower to David
Mesri pursuant to Section 4.1 of the Employment Agreement attached as
Schedule B to the T.A.T. Acquisition Agreement and accrued bonuses payable
in connection with the Acquisition;
plus
(g) to the extent not included in Transaction Payments, deferred
compensation or performance bonuses actually paid in cash to members of
management in connection with an acquisition permitted pursuant to clause
(b) of Section 7.2.8;
minus
18
<PAGE>
(h) Restricted Payments of the type referred to in clause (a) of
Section 7.2.6 made during such period.
"Effective Date" means the date this Agreement becomes effective pursuant
to Section 5.1.
"Effective Date Certificate" means a certificate of an Authorized Officer
of the Company, substantially in the form of Exhibit D hereto, delivered
pursuant to the terms hereof.
"Eligible Institution" means a financial institution that has combined
capital and surplus of not less than $500,000,000 or its equivalent in foreign
currency, whose long-term certificate of deposit or long-term senior unsecured
debt is rated "BBB" or higher by S&P and "Baa2" or higher by Moody's or an
equivalent or higher rating by a nationally recognized rating agency if both of
the two named rating agencies cease publishing ratings of investments.
"EMU" means economic and monetary union as contemplated in the Treaty on
European Union.
"EMU Legislation" means legislative measures of the European Council for
the introduction of, changeover to or operation of a single or unified European
currency (whether known as the euro or otherwise), being in part the
implementation of the third stage of EMU.
"Environmental Laws" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules and regulations (including consent
decrees and administrative orders) relating to the protection of the
environment or the effect of the environment on human health and safety.
"Equity Investors" is defined in the first recital.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Euro" means the single currency of Participating Member States of the
European Union.
"Euro Unit" means the currency unit of the Euro.
"Event of Default" is defined in Section 8.1.
"Excess Cash Flow" means, for any Fiscal Year, the excess (if any), of
(a) EBITDA for such Fiscal Year;
19
<PAGE>
over
(b) the sum (for such applicable period) of
(i) the cash portion of Interest Expense (net of interest
income) and Transaction Payments for such Fiscal Year;
plus
(ii) scheduled payments, to the extent actually made, of the
principal amount of the Term Loans and scheduled payments and
optional and mandatory prepayments of the principal of any other
funded Debt (including Capitalized Lease Liabilities) and mandatory
prepayments of the principal amount of Revolving Loans pursuant to
clause (f) of Section 3.1.1 in connection with a permanent reduction
of the Revolving Loan Commitment Amount, in each case to the extent
actually made and for such applicable period;
plus
(iii) all federal, state and foreign income taxes actually paid
or payable in cash by the Company and its Restricted Subsidiaries for
such applicable period;
plus
(iv) Capital Expenditures actually made during such applicable
period pursuant to clause (a) of Section 7.2.7 (excluding Capital
Expenditures constituting Capitalized Lease Liabilities and by way of
the incurrence of Indebtedness permitted pursuant to clause (c) of
Section 7.2.2 to a vendor of any assets permitted to be acquired
pursuant to Section 7.2.7 to finance the acquisition of such assets);
plus
(v) the amount of the net increase (if any) of Current Assets,
other than cash and Cash Equivalent Investments, over Current
Liabilities of the Company and its Restricted Subsidiaries for such
applicable period;
plus
(vi) Investments permitted and actually made, in cash, pursuant
to clause (d), (k), (o) or (q) of Section 7.2.5 during such
applicable period (excluding
20
<PAGE>
Investments financed with the proceeds of any issuance of Capital
Stock or Indebtedness other than Loans);
plus
(vii) Restricted Payments of the type described in clauses (b)
and (c) of Section 7.2.6 made during such applicable period;
plus
(viii) to the extent not deducted in determining EBITDA during
such period, amounts paid in cash in respect of periodic
post-retirement benefits (whether or not previously accrued) during
such period;
plus
(ix) amounts paid in cash during such period in respect of any
extraordinary or non-recurring loss;
plus
(x) amounts included in EBITDA for such period pursuant to
clauses (f) or (g) of the definition of EBITDA and actually paid in
cash;
plus
(xi) long-term liabilities (other than the Obligations and other
funded Debt) actually paid in cash by the Company and its Restricted
Subsidiaries during such period.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Equity Proceeds" means any proceeds received by Holdco, the
Company or any of their respective Subsidiaries from the sale or issuance by
such Person of its Capital Stock or any warrants or options in respect of any
such Capital Stock or the exercise of any such warrants or options, in each
case pursuant to any such sale, issuance or exercise constituting or resulting
from (a) capital contributions to, or Capital Stock issuances by, Holdco, the
Company or any of their respective Subsidiaries (exclusive of any such
contribution or issuance resulting from a Public Offering or a widely
distributed private offering exempted from the registration requirements of
Section 5 of the Securities Act of 1933, as amended), (b) any subscription
agreement, option plan, incentive plan or similar arrangement with any officer,
employee or director of such Person or any of its Subsidiaries, (c) any loan
made by Holdco, the Company or
21
<PAGE>
any of their respective Subsidiaries pursuant to clause (g) of Section 7.2.5,
(d) the sale of any Capital Stock of Holdco to any officer, director or employee
described in clause (b) above; provided, however, such proceeds do not exceed
$15,000,000 in the aggregate, (e) the exercise of any options or warrants issued
to any officer, employee or director pursuant to any agreement, plan or
arrangement described in clause (b) above or (f) the exercise of any Warrants.
"Exempted Foreign Intercompany Transactions" means with respect to
intercompany Investments or Indebtedness made or incurred by the Company or any
of its Restricted Subsidiaries, any such Investments or Indebtedness (a) into
which any Indebtedness or Investment of any Foreign Subsidiary owing to any
Borrower or any Subsidiary Guarantor that was outstanding on the Effective Date
was converted, (b) made as part of, or to finance, any acquisition permitted
hereunder, (c) outstanding on the Effective Date or (d) consisting of transfers
of inventory or other assets in the ordinary course of the Company's business.
"Existing Credit Agreement" is defined in the fourth recital.
"Existing Lenders" is defined in the fourth recital.
"Existing Letters of Credit" is defined in the fourth recital.
"Existing Loans" is defined in the fourth recital.
"Existing Revolving Loans" is defined in the fourth recital.
"Existing Term Loans" is defined in the fourth recital.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to (a) 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 (b) if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three federal
funds brokers of recognized standing selected by it.
"Fee Letter" means the confidential fee letter, dated July 14, 2000, from
DLJ to the Company.
22
<PAGE>
"Filing Agent" is defined in Section 5.1.6.
"Filing Statement" means any UCC financing statement (Form UCC-1) or other
similar statement or UCC termination statement (Form UCC-3) required pursuant
to the Loan Documents.
"Fiscal Month" means the period beginning on the day following the last
day of the preceding Fiscal Month and ending on the Friday that is four or five
weeks thereafter, consistent with the Company's historical practice; provided,
however, that the last Fiscal Month of each Fiscal Year shall end on December
31 of such Fiscal Year.
"Fiscal Quarter" means the period beginning on the day following the last
day of the preceding Fiscal Quarter and ending three Fiscal Months thereafter.
"Fiscal Year" means any twelve-month period ending on December 31 of any
calendar year.
"Fixed Charge Coverage Ratio" means, at the end of any Fiscal Quarter,
subject to clause (b) of Section 1.4, the ratio computed for the period
consisting of such Fiscal Quarter and each of the three immediately prior
Fiscal Quarters of
(a) EBITDA for all such Fiscal Quarters;
over
(b) the sum of
(i) Capital Expenditures actually made pursuant to clause (a) of
Section 7.2.7 during the period of four consecutive Fiscal Quarters
ending on the last day of the second Fiscal Quarter preceding such
Fiscal Quarter (excluding Capital Expenditures constituting
Capitalized Lease Liabilities and by way of the incurrence of
Indebtedness permitted pursuant to clause (c) of Section 7.2.2 to a
vendor of any assets permitted to be acquired pursuant to Section
7.2.7 to finance the acquisition of such assets); plus
(ii) the cash portion of Interest Expense (net of interest
income) for all such Fiscal Quarters (provided, however, that for the
first full three Fiscal Quarters ending after the Effective Date,
Interest Expense shall be determined on an Annualized basis);
23
<PAGE>
plus
(iii) all scheduled payments of principal of the Term Loans and
other funded Debt (including the principal portion of any Capitalized
Lease Liabilities) during all such Fiscal Quarters (provided,
however, that for the first full three Fiscal Quarters ending after
the Effective Date, such payments shall be determined on an
Annualized basis);
plus
(iv) Restricted Payments made or permitted to be made pursuant
to clauses (b) of Section 7.2.6 during all such Fiscal Quarters;
plus
(v) all federal, state and foreign income taxes actually paid or
payable in cash by the Borrowers and their Restricted Subsidiaries
for all such Fiscal Quarters.
"Foreign Currency" means, Euros, Canadian Dollars and any additional
currency, other than Dollars, that is freely transferable and convertible into
Dollars.
"Foreign Currency Equivalent" means, on any date of determination, the
equivalent in any Foreign Currency of Dollars, determined by using the quoted
spot rate at which the Administrative Agent's principal office in Chicago,
Illinois, offers to exchange such Foreign Currency for Dollars at the opening
of business on such date.
"Foreign Currency Letter of Credit" means any Letter of Credit denominated
in a Foreign Currency.
"Foreign Currency Letter of Credit Outstandings" means any Letter of
Credit Outstandings in respect of Foreign Currency Letters of Credit.
"Foreign Currency Loan" means any Loan made in a Foreign Currency.
"Foreign Currency Revolving Loan" means a Revolving Loan that is a Foreign
Currency Loan.
"Foreign Pledge Agreement" means any supplemental pledge agreement
governed by the laws of a jurisdiction other than the United States or a State
thereof executed and delivered by the Company or any Restricted Subsidiary
pursuant to the terms of this Agreement, in form and substance satisfactory to
the Administrative Agent, as may be necessary or desirable under the
24
<PAGE>
laws of organization or incorporation of a Subsidiary to further protect or
perfect the Lien on and security interest in any Collateral.
"Foreign Subsidiary" means any Subsidiary that is not a U.S. Subsidiary.
"Forward Merger" is defined in clause (b) of the third recital.
"Forward Merger Subsidiary" is defined in the third recital.
"F.R.S. Board" means the Board of Governors of the Federal Reserve System
or any successor thereto.
"Future Pledged Foreign Subsidiary" means a Restricted Subsidiary that is
a Foreign Subsidiary and a direct Subsidiary of the Company or a U.S.
Subsidiary and which has, at any time of determination, total assets with a
value of at least $5,000,000.
"GAAP" is defined in Section 1.4.
"GLI" is defined in the third recital.
"GLI Merger" means the merger of Thermal Components Division, Inc. ("TCD")
with and into Great Lake, Inc., with Great Lake, Inc. being the survivor of the
GLI Merger and continuing to be known as "Great Lake, Inc.".
"Guarantor" means Holdco, the Company and each Subsidiary Guarantor.
"Hazardous Material" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource Conservation
and Recovery Act, as amended;
(c) any petroleum product; or
(d) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance within the meaning of any other applicable
Environmental Law.
"Hedging Obligations" means, with respect to any Person, all liabilities
of such Person under interest rate or currency swap agreements, interest or
exchange rate cap agreements and interest or exchange rate collar agreements,
and all other agreements or arrangements designed
25
<PAGE>
to protect such Person against fluctuations in interest rates, currency exchange
rates or commodity prices.
"herein", "hereof", "hereto", "hereunder" and similar terms contained in
this Agreement or any other Loan Document refer to this Agreement or such other
Loan Document, as the case may be, as a whole and not to any particular
Section, paragraph or provision of this Agreement or such other Loan Document.
"Holdco" is defined in the first recital.
"Holdco Discount Note Indenture" means the Indenture, dated as of August
17, 1998, entered into between Holdco and the trustee thereunder, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Holdco Discount Notes" means the Senior Discount Notes due 2008 of Holdco
issued by Holdco and governed by the terms of the Holdco Discount Note
Indenture.
"Holdco Guaranty and Pledge Agreement" means the Guaranty and Pledge
Agreement executed and delivered by an Authorized Officer of Holdco pursuant to
the terms hereof, substantially in the form of Exhibit G-1 hereto, amending and
restating in their entirety the Amended and Restated Guaranty, dated as of
November 24, 1998, duly executed and delivered to the Administrative Agent by
Holdco, the Amended and Restated Agreement dated as of November 24, 1998
between Holdco and the Administrative Agent, and the Amended and Restated
Security Agreement dated as of November 24, 1998 between Holdco and the
Administrative Agent, as the same may be further amended, supplemented, amended
and restated or otherwise modified from time to time.
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial
statement of any Obligor, any qualification or exception to such opinion or
certification (a) which is of a "going concern" or similar nature, (b) which
relates to the limited scope of examination of matters relevant to such
financial statement (except, in the case of matters relating to any acquired
business or assets, in respect of the period prior to the acquisition by such
Obligor of such business or assets), or (c) which relates to the treatment or
classification of any item in such financial statement and which, as a
condition to its removal, would require an adjustment to such item the effect
of which would be to cause the Company to be in default of any of its
obligations under Section 7.2.4.
"including" means including without limiting the generality of any
description preceding such term, and, for purposes of each Loan Document, the
parties hereto agree that the rule of ejusdem generis shall not be applicable
to limit a general statement, which is followed by or referable to an
enumeration of specific matters, to matters similar to the matters specifically
mentioned.
26
<PAGE>
"Indebtedness" of any Person means:
(a) all obligations of such Person for borrowed money or for the
deferred purchase price of property or services (exclusive of (i) deferred
purchase price arrangements in the nature of open or other accounts
payable owed to suppliers on normal terms in connection with the purchase
of goods and services in the ordinary course of business and (ii)
Earn-outs (until such time as the obligation associated with the Earn-out
is recorded as a liability on the balance sheet of the Company in
accordance with GAAP)) and all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments;
(b) all obligations, contingent or otherwise, relative to the face
amount of all letters of credit, whether or not drawn, and banker's
acceptances issued for the account of such Person;
(c) all Capitalized Lease Liabilities;
(d) net liabilities of such Person under all Hedging Obligations;
(e) whether or not so included as liabilities in accordance with
GAAP, all Indebtedness of the types referred to in clauses (a) through (d)
above (excluding prepaid interest thereon) secured by a Lien on property
owned or being purchased by such Person (including Indebtedness arising
under conditional sales or other title retention agreements), whether or
not such Indebtedness shall have been assumed by such Person or is limited
in recourse; provided, however, that, to the extent such Indebtedness is
limited in recourse to the assets securing such Indebtedness, the amount
of such Indebtedness shall be limited to the fair market value of such
assets; and
(f) all Contingent Liabilities of such Person in respect of any of
the foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer (to the extent such Person is liable for
such Indebtedness).
"Indemnified Liabilities" is defined in Section 11.4.
"Indemnified Parties" is defined in Section 11.4.
"Initial Canadian Term-B Loans" is defined in clause (c) of Section 2.10.
"Initial Term-A Loans" is defined in clause (c) of Section 2.10.
27
<PAGE>
"Initial Term-B Loans" means, collectively, Initial Canadian Term-B Loans
and Initial U.S. Term-B Loans.
"Initial U.S. Term-B Loans" is defined in clause (c) of Section 2.10.
"Interest Coverage Ratio" means, at the end of any Fiscal Quarter, subject
to clause (b) of Section 1.4, the ratio computed for the period consisting of
such Fiscal Quarter and each of the three immediately prior Fiscal Quarters of
(a) EBITDA (for all such Fiscal Quarters) to (b) the cash portion of Interest
Expense (net of interest income) (for all such Fiscal Quarters; provided,
however, that for the first full three Fiscal Quarters ending after the
Effective Date, Interest Expense shall be determined on an Annualized basis).
"Interest Expense" means, for any applicable period, the aggregate
consolidated interest expense of the Company and the Restricted Subsidiaries
for such period, as determined in accordance with GAAP, including the portion
of any payments made in respect of Capitalized Lease Liabilities allocable to
interest expense, but excluding (to the extent included in interest expense)
up-front fees and expenses and the amortization of all deferred financing
costs.
"Interest Period" means (a) as to any LIBO Rate Loan that is a Committed
Loan, the period commencing on the Borrowing date of such Loan or on the date
on which the Loan is converted into or continued as a LIBO Rate Loan, and
ending on the date one, two, three, six or, if consented to by each applicable
Lender, nine or twelve months thereafter as selected by the applicable Borrower
in its Borrowing Request or its Conversion/Continuation Notice, or (b) as to
any Uncommitted LIBO Revolving Loan, the period commencing on the Borrowing
date of such Loan and ending on the date such integral number of weeks or
months thereafter as selected by the Company in the applicable Uncommitted
Revolving Loan Borrowing Request, provided, however, that:
(i) if any Interest Period would otherwise end on a day that is
not a Business Day, that Interest Period shall be extended to the
following Business Day unless the result of such extension would be
to carry such Interest Period into another calendar month, in which
event such Interest Period shall end on the preceding Business Day;
(ii) any Interest Period (other than an Interest Period the
duration of which is not, without regard to clauses (i) through (iv)
hereof, an integral number of months) 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 the calendar month at the
end of such Interest Period;
(iii) no Interest Period for any Loan shall extend beyond the
Stated Maturity Date for such Loan;
28
<PAGE>
(iv) no Interest Period applicable to a Term Loan or portion
thereof shall extend beyond any date upon which is due any scheduled
principal payment in respect of the Term Loans unless the aggregate
principal amount of Term Loans represented by Base Rate Loans, or by
LIBO Rate Loans having Interest Periods that will expire on or before
such date, equals or exceeds the amount of such principal payment;
and
(v) there shall be no more than ten Interest Periods in respect
of Committed Loans in effect at any one time;
provided, further, that (A) with respect to all Existing Loans outstanding on
the Effective Date and deemed to be Initial Term-A Loans or Initial Term-B Loans
pursuant to Section 2.10, the initial Interest Period after the Effective Date
in respect of such Existing Loans, shall be the period commencing on (and
including) the Effective Date and ending on (and including) the last Business
Day of the calendar month following the month in which the Effective Date occurs
and (B) with respect to each Borrowing of Additional Term Loans of any Tranche,
the initial Interest Period (or, if there shall be more than one Interest Period
then in effect in respect of outstanding Term Loans of such Tranche, initial
Interest Periods) in respect of the Loans constituting such Borrowing shall be
the period (or periods) commencing on (and including) the Business Day on which
such Borrowing is made and ending on (and including) the last day (or days) of
the Interest Period (or Interest Periods) applicable to Term Loans of such
Tranche then outstanding (with, if there is more than one Interest Period with
respect to outstanding Term Loans of such Tranche then in effect, the aggregate
principal amount of such Additional Term Loans with initial Interest Periods
ending on the last day of each such Interest Period being in proportion to the
aggregate principal amount of the outstanding Term Loans of such Tranche having
Interest Periods ending on such day).
"Investment" means, relative to any Person, (a) any loan or advance made
by such Person to any other Person (excluding commission, travel, relocation
and similar advances to officers, directors and employees (or individuals
acting in similar capacities) made in the ordinary course of business), and (b)
any ownership or similar interest (in the nature of Capital Stock) held by such
Person in any other Person. The amount of any Investment shall be the original
principal or capital amount thereof less all returns of principal or equity
thereon (and without adjustment by reason of the financial condition of such
other Person) and shall, if made by the transfer or exchange of property other
than cash, be deemed to have been made in an original principal or capital
amount equal to the fair market value of such property at the time of such
transfer or exchange.
"Investors' Agreement" means the Investors' Agreement, dated as of August
25, 2000, among Holdco, the DLJMB Entities, CVC and certain other holders of
the Capital Stock of Holdco from time to time party thereto.
29
<PAGE>
"Invitation for Uncommitted Interest Quotes" means an invitation to the
Lenders having a Percentage of the Revolving Loan Commitments of greater than
zero, substantially in the form of Exhibit F-1 hereto, sent to such Lenders by
the Administrative Agent on behalf of the Company pursuant to Section 2.8,
inviting such Lenders to submit Uncommitted Interest Quotes in accordance with
Section 2.8.3.
"Issuance Request" means a Letter of Credit request and certificate duly
executed by an Authorized Officer of the Company, substantially in the form of
Exhibit B-3 hereto.
"Issuer" means the Administrative Agent in its capacity as issuer of
Letters of Credit and any Lender as may be designated by the Company (and
consented to by the Agents and such Lender, such consent by the Agents not to
be unreasonably withheld) in its capacity as issuer of Letters of Credit.
"Lead Arranger" is defined in the preamble.
"Lender Assignment Agreement" means a Lender Assignment Agreement,
substantially in the form of Exhibit I hereto.
"Lender Parties" means, collectively, the Lenders, the Issuers, the Agents
and the Lead Arrangers.
"Lenders" is defined in the preamble.
"Letter of Credit" is defined in Section 2.1.3.
"Letter of Credit Commitment" means, with respect to any Issuer, such
Issuer's obligation to issue Letters of Credit pursuant to Section 2.1.3 and,
with respect to each of the other Lenders that has a Revolving Loan Commitment,
the obligation of each such Lender to participate in such Letters of Credit
pursuant to Section 2.6.1.
"Letter of Credit Commitment Amount" means, on any date, a maximum amount
of $35,000,000, as such amount may be reduced from time to time pursuant to
Section 2.2.1.
"Letter of Credit Outstandings" means, on any date, an amount equal to the
sum of
(a) the then aggregate amount which is undrawn and available under
all issued and outstanding Letters of Credit (after converting the
aggregate Stated Amounts of all Foreign Currency Letters of Credit to the
Dollar Equivalents thereof),
30
<PAGE>
plus
(b) the then aggregate amount of all unpaid and outstanding
Reimbursement Obligations (after converting the aggregate Reimbursement
Obligations with respect to Disbursements made in a Foreign Currency to
the Dollar Equivalents thereof) in respect of such Letters of Credit.
"Leverage Ratio" means, at the end of any Fiscal Quarter, subject to
clause (b) of Section 1.4 and Section 3.1.3, the ratio of
(a) total Debt less cash and Cash Equivalent Investments of the
Company and its Restricted Subsidiaries on a consolidated basis
outstanding at such time;
to
(b) EBITDA for the period of four consecutive Fiscal Quarters ended
on such date.
"Leverage Ratio Estimate" is defined in the definition of Applicable
Commitment Fee.
"LIBO Rate" means, relative to any Interest Period for LIBO Rate Loans,
the applicable London interbank offered rate for deposits in Dollars or in the
applicable Foreign Currency, as the case may be, appearing on Dow Jones Markets
(Telerate Page 3750) as of 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period, and having a maturity equal to such
Interest Period; provided, however, that, if Dow Jones Markets (Telerate Page
3750) is not available for any reason, the applicable LIBO Rate for the
relevant Interest Period shall instead be the applicable London interbank
offered rate for deposits in Dollars or in the applicable Foreign Currency, as
the case may be, appearing on Reuters Screen FRBD as of 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period, and
having a maturity equal to such Interest Period; provided, further, that if
neither the Dow Jones Markets (Telerate Page 3750) nor Reuters Screen FRBD is
available for any reason, the applicable LIBO Rate shall be the interest rate
per annum at which the Administrative Agent or one of its affiliate banks
offers deposits in Dollars or in the applicable Foreign Currency to leading
banks in the London interbank market at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a period
equal to such Interest Period in the approximate amount of such Borrowing.
"LIBO Rate Auction" means a solicitation of Uncommitted Interest Quotes
setting forth Uncommitted Interest Margins based on the LIBO Rate pursuant to
Section 2.8.
31
<PAGE>
"LIBO Rate Loan" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a fixed rate of interest determined
by reference to a LIBO Rate or, in the case of Loans denominated in Dollars, a
LIBO Rate (Reserve Adjusted).
"LIBO Rate (Reserve Adjusted)" means, relative to any Loan denominated
in Dollars to be made, continued or maintained as, or converted into, a LIBO
Rate Loan for any Interest Period, the rate of interest per annum (rounded
upwards to the next 1/100th of 1%) determined by the Administrative Agent as
follows:
LIBO Rate LIBO Rate
= -------------------------------
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate
Loans denominated in Dollars will be adjusted automatically as to all LIBO Rate
Loans denominated in Dollars then outstanding as of the effective date of any
change in the LIBOR Reserve Percentage.
"LIBOR Office" means, relative to any Lender, the office of such Lender
designated as such on Schedule II hereto or in the Lender Assignment Agreement
pursuant to which such Lender became a Lender hereunder or such other office of
a Lender as shall be so designated from time to time by notice from such Lender
to the Borrowers and the Administrative Agent, which shall be making or
maintaining LIBO Rate Loans of such Lender hereunder.
"LIBOR Reserve Percentage" means, relative to any Interest Period for LIBO
Rate Loans denominated in Dollars, the percentage (expressed as a decimal,
rounded upward to the next 1/100th of 1%) in effect on such day (whether or not
applicable to any Lender) under regulations issued from time to time by the
F.R.S. Board for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with respect to
Eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the F.R.S. Board).
"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property, or any filing or recording of any
instrument or document in respect of the foregoing, to secure payment of a debt
or performance of an obligation or any other priority or preferential treatment
of any kind or nature whatsoever that has the practical effect of creating a
security interest in property.
"Loan" means, as the context may require, a Revolving Loan, a Term-A Loan,
a Term-B Loan or a Swing Line Loan, of any type.
"Loan Document" means this Agreement, the Notes, the Letters of Credit,
each Rate Protection Agreement, each Borrowing Request, each Issuance Request,
the Fee Letter, the
32
<PAGE>
Administrative Agent Fee Letter, each Pledge Agreement, the Subsidiary Guaranty,
the Canadian Collateral Documents, each Mortgage (upon execution and delivery
thereof), and each other agreement, document or instrument delivered in
connection with this Agreement or any other Loan Document, whether or not
specifically mentioned herein or therein.
"Material Adverse Effect" means (a) a material adverse effect on the
financial condition, operations, assets, business, properties or prospects of
the Company and the Restricted Subsidiaries, taken as a whole, (b) a material
impairment of the ability of any Obligor to perform its respective material
obligations under the Loan Documents to which it is or will be a party, or (c)
an impairment of the validity or enforceability of, or a material impairment of
the rights, remedies or benefits available to each Secured Party under any Loan
Document.
"Material Subsidiary" means (a) any direct or indirect Restricted
Subsidiary which holds, owns or contributes, as the case may be, 3% or more of
the gross revenues, assets or EBITDA of the Company and its Restricted
Subsidiaries, on a consolidated basis, and (b) any other Restricted Subsidiary
designated by the Company as a Material Subsidiary.
"Mergers" is defined in clause (b) of the third recital.
"Merger Companies" is defined in clause (b) of the third recital.
"Merger Subsidiaries" is defined in clause (b) of the third recital.
"Moody's" means Moody's Investors Service, Inc.
"Mortgage" means, collectively, each Mortgage or Deed of Trust executed
and delivered pursuant to the terms of this Agreement, including clause (b) of
Section 7.1.8, in form and substance reasonably satisfactory to the Agents.
"Multicurrency Lender" means each Lender with a Commitment to make
Committed Revolving Loans that is not a Non-Participating Multicurrency Lender.
"Multicurrency Percentage" means, with respect to any Multicurrency
Lender, the percentage obtained by dividing (a) such Lender's Percentage with
respect to Revolving Loans multiplied by the Revolving Loan Commitment Amount
at such time by (b) the aggregate Percentage with respect to Revolving Loans of
the Multicurrency Lenders multiplied by the Revolving Loan Commitment Amount at
such time.
"National Currency Unit" means a unit of currency (other than a Euro Unit)
of a Participating Member State.
33
<PAGE>
"Net Debt Proceeds" means with respect to the incurrence, sale or issuance
by Holdco, the Company or any Restricted Subsidiary of any Debt other than Debt
incurred as part of the Transaction, other Debt permitted by Section 7.2.2 and
clause (b)(i) of Section 5.9 of the Holdco Guaranty and Pledge Agreement, the
excess of:
(a) the gross cash proceeds received by Holdco, the Company or any
such Restricted Subsidiary from such incurrence, sale, or issuance,
over
(b) the sum of (i) all reasonable and customary underwriting
commissions and legal, investment banking, brokerage and accounting and
other professional fees, sales commissions and disbursements and all other
reasonable fees, expenses and charges, in each case actually incurred in
connection with such incurrence, sale or issuance, (ii) in the case of any
Debt incurred, sold or issued by any Foreign Subsidiary, any taxes or
other costs or expenses resulting from repatriating any such proceeds to
the United States and (iii) in the case of any Debt incurred, sold or
issued by a Restricted Subsidiary that is not a Wholly-Owned Subsidiary,
an amount equal to the product of such gross cash proceeds (as reduced
pursuant to subclauses (i) and (ii) of this clause (b)) multiplied by the
percentage equity interest in such Restricted Subsidiary not held,
directly or indirectly, by the Company.
"Net Disposition Proceeds" means, with respect to any Disposition of any
assets of the Company or any Restricted Subsidiary, other than Dispositions
made as part of the Transaction and other sales permitted pursuant to clause
(a), (b), (d) (to the extent the proceeds of the Disposition permitted
thereunder constitute Net Casualty Proceeds) or (e) of Section 7.2.9, but
including any sale or issuance of Capital Stock of any such Subsidiary to any
Person other than the Company or any of the Restricted Subsidiaries, the excess
of
(a) the sum of the gross cash proceeds received, directly or
indirectly, by the Company or any Restricted Subsidiary from any such
Disposition and any cash payments received in respect of promissory notes
or other non-cash consideration delivered to the Company or such
Restricted Subsidiary in respect thereof,
over
(b) the sum of (i) all reasonable and customary fees and expenses
with respect to legal, investment banking, brokerage, accounting and other
professional fees, sales commissions and disbursements and all other
reasonable fees, expenses and charges, in each case actually incurred in
connection with such Disposition, (ii) all taxes and other governmental
costs and expenses actually paid or estimated by the Company (in good
faith) to be payable in cash in connection with such Disposition
(including, in the event of
34
<PAGE>
a Disposition of non-U.S. assets, any such taxes or other costs or
expenses resulting from repatriating any such proceeds to the United
States), (iii) payments made by the Company or any Restricted Subsidiary
to retire Indebtedness (other than the Loans) of the Company or any
Restricted Subsidiary where payment of such Indebtedness is required in
connection with such Disposition, (iv) reserves for purchase price
adjustments and retained fixed liabilities reasonably expected to be
payable by the Company and the Restricted Subsidiaries in cash in
connection therewith and (v) in the case of any Disposition by a
Restricted Subsidiary that is not a Wholly-Owned Subsidiary, an amount
equal to the product of such gross cash proceeds (as reduced pursuant to
subclauses (i) through (iv) of this clause (b)) multiplied by the
percentage equity interest in such Restricted Subsidiary not held,
directly or indirectly, by the Company;
provided, however, that if, after the payment of all taxes, purchase price
adjustments and retained fixed liabilities with respect to such Disposition, the
amount of estimated taxes, purchase price adjustments or retained fixed
liabilities, if any, pursuant to clause (b)(ii) or (b)(iv) above exceeded the
tax, purchase price adjustment or retained fixed liabilities amount actually
paid in cash in respect of such Disposition, the aggregate amount of such excess
shall, at such time, constitute Net Disposition Proceeds.
"Net Equity Proceeds" means with respect to any sale or issuance by Holdco
or the Company to any Person of any Capital Stock of Holdco or the Company, as
the case may be, or any warrants or options with respect to any such Capital
Stock or the exercise of any such warrants or options after the Effective Date
(exclusive of any such proceeds constituting Excluded Equity Proceeds) the
excess of:
(a) the gross cash proceeds received by Holdco or the Company from
such sale, exercise or issuance,
over
(b) the sum of all reasonable and customary underwriting commissions
and legal, investment banking, brokerage, accounting and other
professional fees, sales commissions and disbursements and all other
reasonable fees, expenses and charges, in each case actually incurred in
connection with such sale or issuance.
"Net Income" means, for any period, the net income of the Company and its
Subsidiaries for such period on a consolidated basis, excluding (a) net losses
or gains realized in connection with any Disposition of any asset (other than
in the ordinary course of business) and (b) extraordinary or non-recurring
items; provided, however, that the Net Income or loss of any Person that is not
a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid to the Company or a Restricted Subsidiary in cash.
35
<PAGE>
"1998 Subordinated Note Indenture" means the Indenture, dated as of
November 9, 1998, entered into between the Company and Star Bank, N.A., as
trustee, as amended, supplemented or otherwise modified form time to time.
"1998 Subordinated Notes" means the 12% Senior Subordinated Notes due 2007
in an aggregate outstanding principal amount not to exceed $120,000,000 issued
by the Company and governed by the terms of the 1998 Subordinated Note
Indenture.
"1998 Subordinated Notes Documents" means the 1998 Subordinated Note
Indenture, the 1998 Subordinated Notes, all other instruments, agreements or
other documents evidencing or governing any of the 1998 Subordinated Notes or
pursuant to which any 1998 Subordinated Notes has been issued.
"Non-Consenting Lender" means any Lender that, in response to any request
by any Borrower or any Agent to a departure from, waiver of or amendment to any
provision of any Loan Document that requires the agreement of all Lenders or
all Lenders with respect to a particular Tranche, which departure, waiver or
amendment receives the consent of the Required Lenders or the holders of a
majority of the Commitments or (if the applicable Commitments in respect of
such Tranche shall have expired or been terminated) outstanding Credit
Extensions in respect of such Tranche, as the case may be, shall not have given
its consent to such departure, waiver or amendment.
"Non-Funding Lender" means a Lender that shall have failed to fund any
Loan hereunder that it was required to have funded in accordance with the terms
hereof, which Loan was included in any Borrowing in respect of which a majority
of the aggregate principal amount of all Loans included in such Borrowing were
funded by the Lenders party thereto.
"Non-Participating Multicurrency Lender" means the Lenders party to this
Agreement on the Effective Date identified on Schedule II as "Non-Participating
Multicurrency Lenders" or any other Lender with a Commitment to make Committed
Revolving Loans becoming a party to this Agreement after the Effective Date
whose request for such designation is consented to by the Company and the
Administrative Agent.
"Non-Recourse Debt" means Indebtedness (a) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any Restricted Subsidiary to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity, and (b) as to which the lenders have been notified that
they will not have any recourse to the Capital Stock or assets of the Company
or any Restricted Subsidiary (other than Capital Stock of Unrestricted
Subsidiaries pledged by the Company or a Restricted Subsidiary to secure
Indebtedness of such Unrestricted Subsidiary); provided, however, that in no
event shall
36
<PAGE>
Indebtedness of any Unrestricted Subsidiary fail to be Non-Recourse Debt solely
as a result of any default provisions contained in a guarantee thereof by the
Company or a Restricted Subsidiary if the Company or such Restricted Subsidiary
was otherwise permitted to incur such guarantee under this Agreement.
"Non-U.S. Lender" means any Lender (including each Assignee Lender) that
is not (a) a citizen or resident of the United States, (b) a Person created or
organized in or under the laws of the United States or any state thereof, or
(c) an estate or trust that is subject to U.S. Federal income taxation
regardless of the source of its income.
"Note" means, as the context may require, a Revolving Note, a Term-A Note,
a Term-B Note or a Swing Line Note.
"Notice of Uncommitted Revolving Borrowing" is defined in clause (a) of
Section 2.8.4.
"Obligations" means all obligations (monetary or otherwise, whether
absolute or contingent, matured or unmatured) of the Borrowers and each other
Obligor arising under or in connection with a Loan Document, including
Reimbursement Obligations and the principal of and premium, if any, and
interest (including interest accruing during the pendency of any proceeding of
the type described in Section 8.1.9, whether or not allowed in such proceeding)
on the Loans.
"Obligor" means a Borrower or any other Person (other than any Secured
Party) obligated under any Loan Document.
"Participant" is defined in Section 11.11.2.
"Participating Member State" means each state so described in any EMU
Legislation.
"PBGC" means the Pension Benefit Guaranty Corporation and any successor
Person.
"Pension Plan" means a "pension plan", as such term is defined in Section
3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA) and to which the
Company or any corporation, trade or business that is, along with the Company,
a member of a Controlled Group, has or within the prior six years has had any
liability, including any liability by reason of having been a substantial
employer within the meaning of Section 4063 of ERISA at any time during the
preceding five years, or by reason of being deemed to be a contributing sponsor
under Section 4069 of ERISA.
"Percentage" means, relative to any Lender, the applicable percentage
relating to Committed Revolving Loans as set forth opposite its name on
Schedule II hereto or the applicable percentage relating to Additional Term-A
Loans or Additional Term-B Loans pursuant
37
<PAGE>
to Section 2.2.2, or, in each case, in a Lender Assignment Agreement(s) under
the applicable column heading, as such percentage may be adjusted from time to
time pursuant to Lender Assignment Agreement(s) executed by such Lender and its
Assignee Lender(s) and delivered pursuant to Section 11.11. A Lender shall not
have any Commitment to make Loans of any particular Tranche if its percentage
under the respective column heading is zero.
"Person" means any natural person, corporation, partnership, firm,
association, trust, government, governmental agency, limited liability company
or any other entity, whether acting in an individual, fiduciary or other
capacity.
"Plan" means any Pension Plan or Welfare Plan.
"Pledge Agreement" means, as the context may require, the Holdco Guaranty
and Pledge Agreement, the Company Pledge and Security Agreement, the Subsidiary
Pledge and Security Agreement and the Company Canadian Pledge Agreement.
"Precision"is defined in the second recital.
"Precision Sellers" is defined in the second recital.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by the Administrative Agent or its parent (which is
not necessarily the lowest rate charged to any customer), changing when and as
said prime rate changes.
"Pro Forma Financial Statements" is defined in clause (b) of Section
5.1.12.
"Public Offering" means, for any Person, any sale after the Effective Date
of the Capital Stock of such Person to the public pursuant to a primary
offering registered under the Securities Act of 1933, as amended.
"Quarterly Payment Date" means the last day of each of March, June,
September and December occurring after the Effective Date, or, if any such day
is not a Business Day, the next succeeding Business Day.
"Rate Protection Agreement" means any interest rate swap, cap, collar or
similar agreement entered into by any Borrower pursuant to the terms of this
Agreement under which the counterparty to such agreement is (or at the time
such Rate Protection Agreement was entered into, was) a Lender or an Affiliate
of a Lender.
"Refunded Swing Line Loans" is defined in clause (b) of Section 2.3.2.
"Register" is defined in clause (b) of Section 2.7.
38
<PAGE>
"Reimbursement Obligation" is defined in Section 2.6.3.
"Reinstatement Date" is defined in Section 4.1.
"Related Fund" means, with respect to any Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial loans
and is managed or advised by the same investment advisor as such Lender or by
an Affiliate of such investment advisor.
"Release" means a "release", as such term is defined in CERCLA.
"Replacement Lender" is defined in Section 4.11.
"Replacement Notice" is defined in Section 4.11.
"Required Lenders" means, at any time, Lenders holding at least 51% of the
Total Exposure Amount.
"Reset Date" is defined in Section 2.9.3.
"Resource Conservation and Recovery Act" means the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901, et seq., as in effect from time to
time.
"Restricted Payments" is defined in Section 7.2.6.
"Restricted Subsidiary" means any Subsidiary of the Company that is not an
Unrestricted Subsidiary.
"Reverse Mergers" is defined in clause (b) of the third recital.
"Revolving Loan" means a Committed Revolving Loan or an Uncommitted
Revolving Loan.
"Revolving Loan Commitment" is defined in Section 2.1.2.
"Revolving Loan Commitment Amount" means, on any date, $50,000,000, as
such amount may be increased from time to time pursuant to Section 2.2.2 or
reduced from time to time pursuant to Section 2.2.1.
39
<PAGE>
"Revolving Loan Commitment Termination Date" means the earliest of (a)
September 15, 2000 if the Effective Date has not occurred on or prior to such
date, (b) the sixth anniversary of the Effective Date, (c) the date on which
the Revolving Loan Commitment Amount is terminated in full or reduced to zero
pursuant to Section 2.2.1, and (d) the date on which any Commitment Termination
Event occurs.
"Revolving Note" means a promissory note of the Company payable to the
order of any Lender, substantially in the form of Exhibit A-1 hereto (as such
promissory note may be amended, endorsed or otherwise modified from time to
time), evidencing the aggregate Indebtedness of the Company to such Lender
resulting from outstanding Revolving Loans, and also means all other promissory
notes accepted from time to time in substitution therefor or renewal thereof.
"Sales" is defined in the third recital.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc.
"Secured Parties" means, collectively, the Lender Parties and each
counterparty to a Rate Protection Agreement that is (or at the time such Rate
Protection Agreement was entered into, was) a Lender or an Affiliate of a
Lender.
"Sold Divisions" is defined in the third recital.
"Sold Subsidiaries" is defined in the third recital.
"Solvency Certificate" is defined in Section 5.1.11.
"Solvent" means, with respect to any Person on a particular date, that on
such date (a) the fair value of the property of such Person is greater than the
total amount of liabilities, including contingent liabilities, of such Person,
(b) the present fair salable value of the assets of such Person is not less
than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (c) such Person does
not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person's ability to pay as such debts and liabilities mature, and
(d) such Person is not engaged in business or a transaction, and such Person is
not about to engage in business or a transaction, for which such Person's
property would constitute an unreasonably small capital. The amount of
contingent liabilities at any time shall be computed as the amount that, in
light of all the facts and circumstances existing at such time, can reasonably
be expected to become an actual or matured liability.
"SPC" is defined in the third recital.
40
<PAGE>
"Stated Amount" of each Letter of Credit means the total amount available
to be drawn under such Letter of Credit upon the issuance thereof.
"Stated Expiry Date" is defined in Section 2.6.
"Stated Maturity Date" means (a) in the case of any Committed Loan (other
than a Term- B Loan), the sixth anniversary of the Effective Date, (b) in the
case of any Term-B Loan, the seventh anniversary of the Effective Date, (c) in
the case of any Uncommitted Revolving Loan, the earlier of (i) the Stated
Maturity Date for Committed Revolving Loans and (ii) the maturity date that
shall have been agreed between the Company and the Lender or Lenders that shall
have made, or offered or agreed to make, such Uncommitted Revolving Loan, or,
in the case of any such day that is not a Business Day, the first Business Day
following such day.
"Subject Lender" is defined in Section 4.11.
"Subsidiary" means, with respect to any Person, any other Person of which
more than 50% of the outstanding Capital Stock having ordinary voting power to
elect a majority of the board of directors, managers or other voting members of
the governing body of such Person (irrespective of whether at the time Capital
Stock of any other class or classes of such Person shall or might have voting
power upon the occurrence of any contingency) is at the time directly or
indirectly owned by such Person, by such Person and one or more other
Subsidiaries of such Person, or by one or more other Subsidiaries of such
Person. For purposes of each Loan Document, any Acquired Controlled Person
shall be deemed to be a "Subsidiary" of the Company for purposes of Sections
6.1, 6.9, 6.10, 6.11, 6.12, 7.1.2, 7.1.3, 7.1.4, 7.1.5, 7.1.6, 7.1.7(b), 7.2.1,
7.2.2, 7.2.3, 7.2.5, 7.2.6, 7.2.9, 7.2.11, 7.2.12 and 7.2.14 and, to the extent
that it relates to any of the foregoing Sections, Article VIII.
"Subsidiary Guarantor" means each Subsidiary of the Company that has
executed and delivered a Subsidiary Guaranty (or a supplement thereto).
"Subsidiary Guaranty" means the Guaranty, if any, executed and delivered
by an Authorized Officer of a Subsidiary Guarantor pursuant to the terms
hereof, substantially in the form of Exhibit H hereto, amending and restating
in their entirety the Amended and Restated Subsidiary Guaranty, dated as of
November 24, 1998, made by the Subsidiary Guarantors, TCD and certain of the
Sold Subsidiaries and Merger Companies, as amended, supplemented, amended and
restated or otherwise modified prior to the date hereof and as further amended,
supplemented, amended and restated or otherwise modified from time to time.
"Subsidiary Pledge and Security Agreement" means the Pledge and Security
Agreement executed and delivered by an Authorized Officer of each Subsidiary
Guarantor pursuant to the terms of this Agreement, substantially in the form of
Exhibit G-3 hereto, amending and restating in their entirety (a) the Amended
and Restated Subsidiary Security Agreement, dated as of
41
<PAGE>
November 24, 1998, and (b) each other Subsidiary Security Agreement (as defined
in the Existing Credit Agreement) made by the Subsidiary Guarantors, TCD and
certain of the Sold Subsidiaries and the Merger Companies, together with any
supplemental Foreign Pledge Agreements delivered pursuant to the terms of this
Agreement, in each case as amended, supplemented, amended and restated or
otherwise modified prior to the date hereof and as further amended,
supplemented, amended and restated or otherwise modified from time to time.
"Substantial Subsidiary" means, at any time, one or more Subsidiary
Guarantors which hold, own or contribute, as the case may be, in the aggregate,
15% or more of the gross revenues, assets or EBITDA of the Company and the
Restricted Subsidiaries, on a consolidated basis, for the most recently
completed period of four consecutive Fiscal Quarters of the Company for which,
at such time, financial statements shall have been delivered to the Lenders
pursuant to this Agreement.
"Swing Line Lender" means the Administrative Agent in its capacity as
Swing Line Lender hereunder.
"Swing Line Loan" is defined in clause (b) of Section 2.1.2.
"Swing Line Loan Commitment" is defined in clause (b) of Section 2.1.2.
"Swing Line Loan Commitment Amount" means, on any date, $5,000,000, as
such amount may be reduced from time to time pursuant to Section 2.2.1.
"Swing Line Note" means a promissory note of the Company payable to the
Swing Line Lender, in the form of Exhibit A-4 hereto (as such promissory note
may be amended, endorsed or otherwise modified from time to time), evidencing
the aggregate Indebtedness of the Company to the Swing Line Lender resulting
from outstanding Swing Line Loans, and also means all other promissory notes
accepted from time to time in substitution therefor or renewal thereof.
"Syndication Agent" is defined in the preamble.
"T.A.T. Acquisition" means the acquisition by the Company, or an Affiliate
thereof, of all of the Capital Stock of 9011-7243 Quebec Inc., a corporation
organized under the laws of Quebec, pursuant to the terms of the T.A.T.
Acquisition Documents.
"T.A.T. Acquisition Agreement" means the Agreement of Purchase and Sale,
dated as of December 22, 1999, among Nahid Salim, David Mesri and the Company.
"T.A.T. Acquisition Documents" means the T.A.T. Acquisition Agreement and
the other documents entered into in connection with the transactions
contemplated thereby, including, without limitation, the T.A.T. Amalgamation.
42
<PAGE>
"T.A.T. Amalgamation" means the amalgamation under Quebec law of T.A.T.
and 9011- 7243 Quebec Inc., a corporation organized under the laws of Quebec.
"Taxes" is defined in Section 4.6.
"Taylor Purchase Agreement" means the Purchase Agreement, dated as of
December 17, 1999, among the Company, Taylor Publishing Company and TP
Acquisition Corp.
"Taylor Sale" means the Disposition of all of the Capital Stock in or all
or substantially all of the assets of Taylor Publishing Company and Taylor
Production Services Company, LP, each a Wholly-Owned Subsidiary of the Company,
made pursuant to the Taylor Purchase Agreement.
"TCI" is defined in the third recital.
"Term-A Loans" means, collectively, the Initial Term-A Loans and the
Additional Term- A Loans.
"Term-A Note" means a promissory note of the Company payable to the order
of any Lender, in the form of Exhibit A-2 hereto (as such promissory note may
be amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Company to such Lender resulting from outstanding
Term-A Loans, and also means all other promissory notes accepted from time to
time in substitution therefor or renewal thereof.
"Term-B Loans" means, collectively, the Initial Term-B Loans and the
Additional Term- B Loans.
"Term-B Note" means a promissory note of a Borrower payable to the order
of any Lender, in the form of Exhibit A-3 hereto (as such promissory note may
be amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of such Borrower to such Lender resulting from
outstanding Term-B Loans, and also means all other promissory notes accepted
from time to time in substitution therefor or renewal thereof.
"Term Loans" means, collectively, the Term-A Loans or the Term-B Loans.
"Termination Date" means the date on which all Obligations have been paid
in full in cash, all Letters of Credit have been terminated, expired or Cash
Collateralized, all Rate Protection Agreements have been terminated and all
Commitments shall have terminated.
"Total Exposure Amount" means, on any date of determination, (a) with
respect to any provision of this Agreement other than the declaration of the
acceleration of the maturity of all or any portion of the outstanding principal
amount of the Loans and other Obligations to be due and
43
<PAGE>
payable pursuant to Section 8.3, the sum of (i) the aggregate principal amount
of all Term Loans outstanding at such time, (ii) the aggregate undrawn amount of
any Additional Term Loan Commitments then outstanding and (iii) (A) the then
effective Revolving Loan Commitment Amount, if there are any Revolving Loan
Commitments then outstanding, or (B) if all Revolving Loan Commitments shall
have expired or been terminated, the sum of (1) the aggregate principal amount
of all Revolving Loans and Swing Line Loans outstanding at such time and (2) the
Letter of Credit Outstandings at such time; and (b) with respect to the
declaration of the acceleration of the maturity of all or any portion of the
outstanding principal amount of the Loans and other Obligations to be due and
payable pursuant to Section 8.3, the sum of (i) the aggregate principal amount
of all Loans outstanding at such time and (ii) the Letter of Credit Outstandings
at such time.
"Tranche" means, as the context may require, the Loans or Commitments
constituting Term-A Loans or Additional Term-A Loan Commitments, Term-B Loans
or Additional Term-B Loan Commitments, Revolving Loans or Revolving Loan
Commitments, Swing Line Loans or the Swing Line Loan Commitment.
"Transaction" is defined in the third recital.
"Transaction Agreement" means the Transaction Agreement, dated as of July
20, 2000, among Holdco, the Company, TTP, the Merger Company, ThermaSys Holding
Company, ThermaSys Corporation and certain other parties thereto, as the same
may, subject to Section 7.2.10 hereof, be amended, supplemented, amended and
restated or otherwise modified from time to time.
"Transaction Documents" means the Transaction Agreement and all other
agreements, documents, instruments, certificates, filings, consents, approvals,
board of directors resolutions and opinions furnished pursuant to or in
connection with the Transaction, and the transactions contemplated hereby or
thereby, each as amended, supplemented, amended and restated or otherwise
modified from time to time as permitted in accordance with the terms hereof or
of any other Loan Document.
"Transaction Payments" means the retention bonus payments, performance
bonus payments, Earn-outs and any fees, expenses and financing and other
transaction costs paid or to be paid by the Company or any Restricted
Subsidiary in respect of (i) the Recapitalization Transactions (as defined in
the Existing Credit Agreement), (ii) the transactions contemplated in the 1998
Subordinated Notes and the Existing Credit Agreement and (iii) any present or
future acquisition.
"Treaty on European Union" means the Treaty of Rome of 25 March 1957, as
amended by the Single European Act 1986 and the Maastricht Treaty (which was
signed at Maastricht on 7 February 1992, and came into force on 1 November
1993), as amended from time to time.
44
<PAGE>
"TTP" is defined in the third recital.
"type" means, (a) relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a LIBO Rate Loan and (b) relative to any
Uncommitted Revolving Loan, whether such Uncommitted Revolving Loan is an
Uncommitted Absolute Rate Revolving Loan or an Uncommitted LIBO Revolving Loan.
"UCC" means the Uniform Commercial Code as in effect from time to time in
the State of New York; provided, however, that if, with respect to any Filing
Statement or by reason of any mandatory provisions of law, the perfection or
the effect of perfection or non-perfection of the security interests granted to
the Administrative Agent pursuant to the applicable Loan Document is governed
by the Uniform Commercial Code as in effect in a jurisdiction of the United
States other than New York, UCC means the Uniform Commercial Code as in effect
from time to time in such other jurisdiction for purposes of the provisions of
this Agreement, each Loan Document and any Filing Statement relating to such
perfection or effect of perfection or non-perfection.
"Uncommitted Absolute Interest Rate" is defined in clause (b)(iv) of
Section 2.8.3.
"Uncommitted Absolute Rate Revolving Loan" means a loan made or to be made
by a Lender pursuant to an Absolute Rate Auction.
"Uncommitted Foreign Currency Sublimit" means $20,000,000.
"Uncommitted Interest Margin" is defined in clause (b)(iii) of Section
2.8.3.
"Uncommitted Interest Quote" means an offer by a Lender to make an
Uncommitted Revolving Loan in accordance with Section 2.8.
"Uncommitted Interest Rate" means, with respect to any Uncommitted
Revolving Loan, the interest rate per annum for such Uncommitted Revolving
Loan, as agreed to and accepted by the Company and the Lender that shall have
made or offered or agreed to make such Uncommitted Revolving Loan pursuant to
Section 2.8.
"Uncommitted LIBO Revolving Loan" means a loan made or to be made by a
Lender pursuant to a LIBO Rate Auction.
"Uncommitted Revolving Loan" means an Uncommitted Absolute Rate Revolving
Loan or an Uncommitted LIBO Revolving Loan.
45
<PAGE>
"Uncommitted Revolving Loan Borrowing" means a Borrowing of Uncommitted
Revolving Loans made by each of the Lenders whose offer to make such
Uncommitted Revolving Loans as part of such Borrowing has been accepted by the
Company pursuant to Section 2.8.4.
"Uncommitted Revolving Loan Borrowing Request" means a loan request and
certificate requesting Uncommitted Revolving Loans, duly executed by an
Authorized Officer of the Company, substantially in the form of Exhibit B-2
hereto, delivered pursuant to Section 2.8.1.
"United States" or "U.S." means the United States of America.
"Unrestricted Subsidiary" means any Subsidiary of the Company that is
designated by a resolution of the Board of Directors of the Company as an
Unrestricted Subsidiary, but only to the extent that such Subsidiary: (a) has
no Indebtedness other than Non-Recourse Debt; (b) is not party to any
agreement, contract, arrangement or understanding with the Company or any
Restricted Subsidiary unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time from
Persons who are not Affiliates of the Company; (c) is a Person with respect to
which neither the Company nor any of its Restricted Subsidiaries has any direct
or indirect obligation (i) to subscribe for additional Capital Stock or
warrants, options or other rights to acquire Capital Stock or (ii) to maintain
or preserve such Person's financial condition or to cause such Person to
achieve any specified levels of operating results; and (d) has not guaranteed
or otherwise directly or indirectly provided credit support for any
Indebtedness of the Company or any Restricted Subsidiaries. If, at any time,
any Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes hereof. The Board of Directors of the Company may at
any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided, however, that such designation shall be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation shall only be permitted if no
Default or Event of Default would be in existence following such designation.
"U.S. Subsidiary" means any Subsidiary of the Company that is incorporated
or organized in or under the laws of the United States, any state thereof or
the District of Columbia.
"Voting Stock" means, with respect to any Person, any class or classes of
Capital Stock pursuant to which the holders thereof have a general voting power
under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees (or Persons performing similar functions) of
such Person (irrespective of whether or not, at the time, Capital Stock of any
other class or classes shall have, or might have, voting power by reason of the
happening of any contingency).
46
<PAGE>
"Welfare Plan" means a "welfare plan", as such term is defined in Section
3(1) of ERISA, and to which the Company has any liability.
"Wholly-Owned Subsidiary" means, with respect to any Person, any
Subsidiary of such Person all of the Capital Stock (and all rights and options
to purchase such Capital Stock) of which, other than directors' qualifying
shares, are owned, beneficially and of record, by such Person and/or one or
more Wholly-Owned Subsidiaries of such Person.
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the context
otherwise requires, terms for which meanings are provided in this Agreement
shall have such meanings when used in the Disclosure Schedule and in each other
Loan Document, notice and other communication delivered from time to time in
connection with this Agreement or any other Loan Document.
SECTION 1.3. Cross-References. Unless otherwise specified, references in
this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in
any Article, Section or definition to any clause are references to such clause
of such Article, Section or definition.
SECTION 1.4. Accounting and Financial Determinations.
(a) Unless otherwise specified and subject to clause (b) of this
Section 1.4, all accounting terms used herein or in any other Loan
Document shall be interpreted, all accounting determinations and
computations hereunder or thereunder shall be made, and all financial
statements required to be delivered hereunder or thereunder shall be
prepared in accordance with, those generally accepted accounting
principles as in effect from time to time in the United States, applied on
a basis consistent (except for changes concurred in by the Company's
independent public accountants) with the most recent audited consolidated
financial statements of the Company and the Restricted Subsidiaries
delivered to the Lenders ("GAAP"); provided, however, that, if the Company
notifies the Administrative Agent that the Company wishes to amend any
covenant in Section 7.2.4, the definition of EBITDA, Leverage Ratio, Fixed
Charge Coverage Ratio, Interest Coverage Ratio, Capital Expenditure, Net
Income, Interest Expense, Applicable Margin, Applicable Commitment Fee or
clause (b) or (d) of Section 3.1.1 to eliminate the effect of any change
in GAAP on the operation of such covenant, definition or clause (or if the
Administrative Agent notifies the Company that the Required Lenders wish
to amend any such covenant, definition or clause for such purpose), then
the Company's compliance with such covenant shall be determined, and such
definitions and clauses shall be applied, on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until
either such notice is withdrawn or such covenant, definition or clause is
amended in a manner satisfactory to the Company and the Required Lenders.
47
<PAGE>
(b) For purposes of computing the Fixed Charge Coverage Ratio,
Interest Coverage Ratio and Leverage Ratio (and any financial calculations
required to be made or included within such ratios) as of the end of any
Fiscal Quarter, all components of such ratios, including Capital
Expenditures, in the case of any Disposition, but excluding Capital
Expenditures, in the case of any acquisition, for the period of four
Fiscal Quarters ending at the end of such Fiscal Quarter shall include or
exclude, as the case may be, without duplication, such components of such
ratios attributable to any business or assets that have been acquired or
Disposed of by the Company or any Subsidiary (including through mergers or
consolidations) after the first day of such period of four Fiscal Quarters
and prior to the end of such period, as determined in good faith by the
Company on a pro forma basis for such period of four Fiscal Quarters as if
such acquisition or Disposition had occurred on such first day of such
period (including cost savings that would have been realized had such
acquisition occurred on such day and which inclusion when not otherwise
permitted under GAAP has been approved by a majority of the board of
directors of Holdco).
ARTICLE II
CONTINUATION OF CERTAIN EXISTING LOANS,
COMMITMENTS, BORROWING AND ISSUANCE PROCEDURES,
NOTES AND LETTERS OF CREDIT
SECTION 2.1. Commitments. On the terms and subject to the conditions of
this Agreement, the Lenders and the Issuers agree to the continuation and
reallocation (as the case may be) of Existing Loans and participations in
Existing Letters of Credit and:
(a) each Lender severally agrees to make Loans (other than Swing Line
Loans and Uncommitted Revolving Loans) pursuant to each of its Commitments
and the Swing Line Lender agrees to make Swing Line Loans pursuant to the
Swing Line Loan Commitment, in each case as described in this Section 2.1;
and
(b) each Issuer severally agrees that it will issue Letters of Credit
pursuant to Section 2.1.3, and each other Lender that has a Revolving Loan
Commitment severally agrees that it will purchase participation interests
in such Letters of Credit pursuant to Section 2.6.1.
SECTION 2.1.1. Term Loan Commitments. (a) (i) The Existing Loans
outstanding under the Existing Credit Agreement as of the Effective Date and
deemed to be Initial Term-A Loans pursuant to clause (c) of Section 2.10 shall
be governed by the terms and conditions of this Agreement; and
48
<PAGE>
(ii) On any date on or prior to the Additional Term-A Loan
Commitment Termination Date with respect to any Additional Term-A
Loan Commitment, each Lender that has a Percentage in excess of zero
of such Additional Term-A Loan Commitment will make a loan (each such
loan an "Additional Term-A Loan") in Dollars or any Foreign Currency
agreed by the Company and such Lenders to the Company equal to such
Lender's Percentage of the aggregate Borrowing or Borrowings of
Additional Term-A Loans requested by the Company to be made on such
date pursuant to such Additional Term-A Loan Commitment; and
(b) (i) The Existing Loans outstanding under the Existing Credit
Agreement as of the Effective Date and deemed to be Initial Canadian
Term-B Loans or Initial U.S. Term- B Loans pursuant to clause (c) of
Section 2.10 shall be governed by the terms and conditions of this
Agreement; and
(ii) On any date on or prior to the Additional Term-B Loan
Commitment Termination Date with respect to any Additional Term-B
Loan Commitment, each Lender that has a Percentage in excess of zero
of such Additional Term-B Loan Commitment will make a loan (each such
loan an "Additional Term-B Loan") in Dollars or any Foreign Currency
agreed by the Company and such Lenders to the Company equal to such
Lender's Percentage of the aggregate Borrowing or Borrowings of
Additional Term-B Loans requested by the Company to be made on such
date pursuant to such Additional Term-B Loan Commitment.
No amounts paid or prepaid with respect to Term Loans may be reborrowed.
SECTION 2.1.2. Revolving Loan Commitment and Swing Line Loan Commitment.
(a) From time to time on any Business Day occurring on or after the Effective
Date but prior to the Revolving Loan Commitment Termination Date,
(i) each Lender that has a Percentage in excess of zero of the
Revolving Loan Commitment will make loans (relative to such Lender,
its "Committed Revolving Loans") denominated in Dollars, Euros or
Canadian Dollars to the Company equal to such Lender's Percentage of
the aggregate amount of the Borrowing or Borrowings of Committed
Revolving Loans requested by the Company to be made on such day (with
the Commitment of each Lender described in this clause (a) referred
to as its "Revolving Loan Commitment"); provided, however, that the
Dollar Equivalent of Committed Revolving Loans denominated in (A)
Canadian Dollars outstanding at any time shall not exceed $15,000,000
and (B) Euros outstanding at any time shall not exceed $15,000,000.
On the terms and subject to the conditions hereof, the Company may
from time to time borrow, prepay and reborrow Revolving Loans.
49
<PAGE>
(ii) the Swing Line Lender will make a loan (a "Swing Line
Loan") in Dollars to the Company equal to the principal amount of the
Swing Line Loan requested by the Company to be made on such day (with
the Commitment of the Swing Line Lender described in this clause (b)
referred to as its "Swing Line Loan Commitment"). On the terms and
subject to the conditions hereof, the Company may from time to time
borrow, prepay and reborrow Swing Line Loans.
(b) The Existing Loans outstanding under the Existing Credit
Agreement as of the Effective Date and deemed to be Continued Revolving
Loans pursuant to clause (c) of Section 2.10 shall be governed by the
terms and conditions of this Agreement.
Notwithstanding anything herein to the contrary, in the event the Company
requests a Borrowing of Revolving Loans in an Available Currency, those Lenders
that are Non- Participating Multicurrency Lenders shall not be required to fund
their Percentage of such Borrowing. Subject to clause (f) of Section 2.1.4 and
the fulfillment of the conditions precedent with respect to such Borrowing set
forth in Section 5.2, as applicable, each Multicurrency Lender agrees to fund
an amount in such Available Currency equal to its Multicurrency Percentage of
such Borrowing.
SECTION 2.1.3. Letter of Credit Commitment. From time to time on any
Business Day occurring on or after the Effective Date but prior to the
Revolving Loan Commitment Termination Date, the applicable Issuer will (a)
issue one or more standby or commercial letters of credit (each referred to as
a "Letter of Credit") for the account of the Company or any of its Restricted
Subsidiaries in the Stated Amount and the Available Currency requested by the
Company on such day, or (b) extend the Stated Expiry Date of an existing
standby or commercial Letter of Credit previously issued hereunder to a date
not later than the earlier of (i) the sixth anniversary of the Effective Date
and (ii) one year from the date of such extension (subject to automatic renewal
provisions); provided, however, that, notwithstanding the terms of this clause
(ii), a Letter of Credit may, if required by the beneficiary thereof, contain
automatic renewal provisions pursuant to which the Stated Expiry Date shall be
automatically extended (to a date not beyond the date specified in clause (i)
above), unless notice to the contrary shall have been given to the beneficiary
prior to the then existing Stated Expiry Date in accordance with the terms
specified in such Letter of Credit by the applicable Issuer or the account
party of such Letter of Credit (which notice by the account party shall also
have been provided to the applicable Issuer in writing).
50
<PAGE>
SECTION 2.1.4. Lenders Not Permitted or Required to Make the Loans. No
Lender shall be permitted or required to, and the Company shall not request any
Lender to, make
(a) any Additional Term-A Loan or Additional Term-B Loan (as the case
may be) pursuant to any Additional Term-A Loan Commitment or Additional
Term-B Loan Commitment (as the case may be) if, after giving effect
thereto, the aggregate original principal amount of all Additional Term-A
Loans or Additional Term-B Loans (as the case may be) of such Lender made
pursuant to such Additional Term-A Loan Commitment or Additional Term-B
Loan Commitment (as the case may be) would exceed such Lender's Percentage
of the Additional Term-A Loan Commitment Amount in respect of such
Additional Term-A Loan Commitment (in the case of Additional Term- A
Loans) or the Additional Term-B Commitment Amount in respect of such
Additional Term-B Commitment (in the case of Additional Term-B Loans);
(b) any Revolving Loan if, after giving effect thereto, the aggregate
outstanding principal amount of all the Revolving Loans, after converting
the aggregate outstanding principal amount of all Revolving Loans that are
Foreign Currency Loans to the Dollar Equivalent thereof, of all the
Lenders with Revolving Loan Commitments, together with the Letter of
Credit Outstandings and the aggregate outstanding principal amount of all
Swing Line Loans, would exceed the then existing Revolving Loan Commitment
Amount;
(c) any Swing Line Loan if, after giving effect thereto (i) the
aggregate outstanding principal amount of all Swing Line Loans would
exceed the Swing Line Loan Commitment Amount or (ii) the sum of the
aggregate amount of all Letter of Credit Outstandings plus the aggregate
principal amount of all Revolving Loans, after converting the aggregate
outstanding principal amount of all Revolving Loans that are Foreign
Currency Loans to the Dollar Equivalent thereof, and Swing Line Loans then
outstanding would exceed the then existing Revolving Loan Commitment
Amount;
(d) any Uncommitted Revolving Loans that are Foreign Currency Loans,
if, after giving effect thereto, the aggregate outstanding principal
amount of all Uncommitted Revolving Loans that are Foreign Currency Loans,
after converting the aggregate outstanding principal amount thereof to the
Dollar Equivalent thereof, would exceed the Uncommitted Foreign Currency
Sublimit; or
(e) any Committed Revolving Loans that are Foreign Currency Loans,
if, after giving effect thereto, the aggregate outstanding principal
amount of all Committed Revolving Loans that are Foreign Currency Loans,
after converting the aggregate outstanding principal amount thereof to the
Dollar Equivalent thereto, together with the aggregate amount of all
Foreign Currency Letter of Credit Outstandings, after converting the
aggregate Stated Amount thereof and the aggregate unpaid and outstanding
51
<PAGE>
Reimbursement Obligations in respect thereof to the Dollar Equivalent
thereof, would exceed the Committed Foreign Currency Sublimit.
SECTION 2.1.5. Issuer Not Permitted or Required to Issue Letters of
Credit. No Issuer shall be permitted or required to issue any Letter of Credit
if, after giving effect thereto, (a) the aggregate amount of all Letter of
Credit Outstandings would exceed the Letter of Credit Commitment Amount, or (b)
the sum of the aggregate amount of all Letter of Credit Outstandings plus the
aggregate principal amount of all Revolving Loans, after converting the
aggregate outstanding principal amount of all Revolving Loans that are Foreign
Currency Loans to the Dollar Equivalent thereof, and Swing Line Loans then
outstanding would exceed the then existing Revolving Loan Commitment Amount.
SECTION 2.2. Changes in Commitment Amount. The Company may reduce any
Commitment Amount, request to increase the Revolving Loan Commitment Amount or
request Additional Term Loan Commitments, in each case as set forth below.
SECTION 2.2.1. Reduction of Commitment Amount. The Company may, from time
to time on any Business Day occurring on or after the Effective Date,
voluntarily reduce any Commitment Amount; provided, however, that all such
reductions shall require at least three Business Days' prior notice to the
Administrative Agent and shall be permanent, and any partial reduction of any
Commitment Amount shall be in an aggregate amount of $500,000 or any larger
integral multiple of $100,000. Any such reduction of the Revolving Loan
Commitment Amount which reduces the Revolving Loan Commitment Amount below the
Letter of Credit Commitment Amount or the Swing Line Loan Commitment Amount
shall result in an automatic and corresponding reduction of the Letter of
Credit Commitment Amount or the Swing Line Loan Commitment Amount, as the case
may be, to an aggregate amount not in excess of the Revolving Loan Commitment
Amount, as so reduced, without any further action on the part of the applicable
Issuer or the Swing Line Lender.
SECTION 2.2.2. Increases in Revolving Loan Commitment Amount; Additional
Term Loan Commitments. At any time that no Default has occurred and is
continuing, and prior to the Revolving Loan Commitment Termination Date, the
Company may notify the Agents that it is requesting that, on the terms and
subject to the conditions contained in this Agreement, the Lenders and/or other
lenders not then a party to this Agreement provide up to an aggregate amount of
$25,000,000 in additional Revolving Loan Commitments and/or commitments to make
Additional Term-A Loans (any such commitment an "Additional Term-A Loan
Commitment"; and the aggregate amount thereof agreed to be provided by the
applicable Lenders or other lenders in response to any such request an
"Additional Term-A Loan Commitment Amount") and/or Additional Term-B Loans (any
such commitment an "Additional Term-B Loan Commitment"; and the aggregate
amount thereof agreed to be provided by the applicable Lenders or other lenders
in response to any such request an "Additional Term-B Loan Commitment Amount").
Upon receipt of such notice, the Syndication Agent shall use commercially
52
<PAGE>
reasonable efforts to arrange for the Lenders or other Eligible Institutions to
provide such additional Commitments; provided, however, that the Syndication
Agent will first offer each of the Lenders that then has a Percentage in excess
of zero with respect to the applicable Tranche a pro rata portion of any such
additional Commitments. Alternatively, DLJ may commit to provide the full amount
of the requested additional Commitments and then offer portions of such
additional Commitments to the Lenders or other Eligible Institutions, subject to
the proviso to the immediately preceding sentence. Nothing contained in this
Section or otherwise in this Agreement is intended to commit any Lender or any
Agent to provide any portion of any such additional Commitments. If and to the
extent that any Lenders and/or other lenders agree, in their sole discretion, to
provide any such additional Commitments, (i) in the case of any Additional
Term-A Loan Commitment or Additional Term-B Loan Commitment, upon the making of
any Additional Term Loans pursuant to such Additional Term Loan Commitment, the
Administrative Agent will adjust the amortization schedule set forth in clause
(g) or (h) of Section 3.1.1, as the case may be, so that the Company will repay
an additional amount on each Quarterly Payment Date equal to whatever percentage
of the Initial Term Loans of the applicable Tranche would have otherwise been
due on such Quarterly Payment Date multiplied by the aggregate principal amount
of such Additional Term Loans, with any remaining principal amount of such
Additional Term Loans to be due and payable on the Stated Maturity Date for the
applicable Tranche, (ii) in the case of an increase in the Revolving Loan
Commitment Amount, (A) the Revolving Loan Commitment Amount shall be increased
by the amount of the additional Revolving Loan Commitments agreed to be so
provided, (B) the Percentages of the respective Lenders in respect of the
increased Revolving Loan Commitment Amount shall be proportionally adjusted
(provided, however, that the amount equal to the adjusted Percentage of a Lender
in respect of Revolving Loans multiplied by the Revolving Loan Commitment Amount
as increased pursuant to clause (A) may not exceed the amount equal to the
Percentage of such Lender in respect of Revolving Loans immediately prior to any
adjustment made pursuant to this clause (B) multiplied by the Revolving Loan
Commitment Amount immediately prior to the corresponding increase thereof
pursuant to clause (A) without the consent of such Lender) and such adjustment
shall be recorded in the Register, and (C) at such time and in such manner as
the Company and the Syndication Agent shall agree (it being understood that the
Company and the Agents will use commercially reasonable efforts to avoid the
prepayment or assignment of any Committed LIBO Rate Loan on a day other than the
last day of the Interest Period applicable thereto), the Lenders shall assign
and assume outstanding Committed Revolving Loans and participations in
outstanding Letters of Credit so as to cause the amounts of such Committed
Revolving Loans and participations in Letters of Credit held by each Lender with
a Percentage in excess of zero of the Revolving Loan Commitment to conform to
its Percentage of the Revolving Loan Commitment and (iii) the Company shall
execute and deliver any additional Notes, other amendments or modifications to
any Loan Document, and any other certificates, consents or legal opinions as the
Agents may reasonably request.
53
<PAGE>
SECTION 2.3. Borrowing Procedures and Funding Maintenance. Loans (other
than Swing Line Loans and Uncommitted Revolving Loans) shall be made by the
Lenders in accordance with Section 2.3.1, Swing Line Loans shall be made by the
Swing Line Lender in accordance with Section 2.3.2 and Uncommitted Revolving
Loans shall be made by the Lenders agreeing to make such Loans in accordance
with Section 2.8.
SECTION 2.3.1. Revolving Loans. By delivering a Committed Loan Borrowing
Request to the Administrative Agent on or before 11:00 a.m., Chicago time (or
2:00 p.m., London time, in the case of a Committed Borrowing of Foreign
Currency Loans), on a Business Day, an Company may from time to time
irrevocably request, on not less than one Business Day's notice (in the case of
Base Rate Loans) or three Business Days' notice (in the case of LIBO Rate
Loans) that a Committed Borrowing be made in an aggregate amount of (a) in the
case of Committed Loans in Dollars, $500,000, or any larger integral multiple
of $100,000, (b) in the case of Committed Loans in any Foreign Currency in an
integral multiple of 100,000 units of such Foreign Currency or (c) in any case,
in the unused amount of the applicable Commitment. No Borrowing Request shall
be required, and the minimum aggregate amounts specified under this Section
2.3.1 shall not apply, in the case of Committed Revolving Loans made under
clause (b) of Section 2.3.2 to refund Refunded Swing Line Loans or Committed
Revolving Loans deemed made under Section 2.6.2 in respect of unreimbursed
Disbursements. On the terms and subject to the conditions of this Agreement,
each Committed Borrowing shall be comprised of the type of Loans, and shall be
made to the Company on the Business Day specified in such Committed Loan
Borrowing Request. On or before 12:00 p.m., Chicago time, on such Business Day
each Lender shall deposit with the Administrative Agent same day funds in the
applicable Available Currency in an amount equal to such Lender's Percentage of
the requested Committed Borrowing. Such deposit will be made to an account
which the Administrative Agent shall specify from time to time by notice to the
Lenders. To the extent funds are received from the Lenders, the Administrative
Agent shall make such funds available to the Company by wire transfer to the
accounts the Company shall have specified in its Committed Loan Borrowing
Request. No Lender's obligation to make any Loan shall be affected by any other
Lender's failure to make any Loan.
SECTION 2.3.2. Swing Line Loans. (a) By written or telephonic notice,
promptly followed (within one Business Day), in the case of telephonic notice,
by the delivery of a confirming Committed Loan Borrowing Request, to the Swing
Line Lender and the Administrative Agent on or before 1:00 p.m., Chicago time,
on the Business Day the proposed Swing Line Loan is to be made, the Company may
from time to time irrevocably request that a Swing Line Loan be made by the
Swing Line Lender in a minimum principal amount of $100,000 or any larger
integral multiple of $50,000. All Swing Line Loans shall be made as Base Rate
Loans and shall not be entitled to be converted into LIBO Rate Loans. The
proceeds of each Swing Line Loan shall be made available by the Swing Line
Lender, by 2:00 p.m., Chicago time, on the Business Day the initial written or
telephonic notice is received by it as
54
<PAGE>
provided in this clause (a), to the Company by wire transfer to the account the
Company shall have specified in its notice therefor.
(b) If (i) any Swing Line Loan shall be outstanding for more than four
Business Days or (ii) any Default shall occur and be continuing, each Lender
with a Revolving Loan Commitment (other than the Swing Line Lender) irrevocably
agrees that it will, at the request of the Swing Line Lender and upon notice
from the Administrative Agent, unless such Swing Line Loan shall have been
earlier repaid in full, make a Committed Revolving Loan (which shall initially
be funded as a Base Rate Loan) in an amount equal to such Lender's Percentage
in respect of the Revolving Loan Commitments of the aggregate principal amount
of all such Swing Line Loans then outstanding (such outstanding Swing Line
Loans hereinafter referred to as the "Refunded Swing Line Loans"); provided,
however, that the Swing Line Lender shall not request, and no Lender with a
Revolving Loan Commitment shall make, any such Committed Revolving Loan if,
after giving effect to the making of the applicable Refunded Swing Line Loan,
the sum of all outstanding Committed Revolving Loans, after converting the
aggregate outstanding principal amount of all Committed Revolving Loans that
are Foreign Currency Loans made by such Lender to the Dollar Equivalent
thereof, plus the aggregate amount of all Letter of Credit Outstandings and all
Swing Line Loans outstanding, exceeded the then existing Revolving Loan
Commitment Amount. On or before 11:00 a.m., Chicago time, on the first Business
Day following receipt by each Lender of a request to make Committed Revolving
Loans as provided in the preceding sentence, each such Lender with a Revolving
Loan Commitment shall deposit in an account specified by the Swing Line Lender
the amount so requested in same day funds and such funds shall be applied by
the Swing Line Lender to repay the Refunded Swing Line Loans. At the time the
aforementioned Lenders make the above referenced Committed Revolving Loans, the
Swing Line Lender shall be deemed to have made, in consideration of the making
of the Refunded Swing Line Loans, a Committed Revolving Loan in an amount equal
to the Swing Line Lender's Percentage in respect of the Revolving Loan
Commitments of the aggregate principal amount of the Refunded Swing Line Loans.
Upon the making (or deemed making, in the case of the Swing Line Lender) of any
Committed Revolving Loans pursuant to this clause (b), the amount so funded
shall become outstanding as a Committed Revolving Loan of such Lender and to
the extent made (or deemed made, in the case of the Swing Line Lender) shall no
longer constitute a portion of the applicable Swing Line Loan. All interest
payable with respect to any Committed Revolving Loans made (or deemed made, in
the case of the Swing Line Lender) pursuant to this clause (b) shall be
appropriately adjusted to reflect the period of time during which the Swing
Line Lender had outstanding Swing Line Loans in respect of which such Committed
Revolving Loans were made. Each Lender's obligation (in the case of Lenders
with a Revolving Loan Commitment) to make the Committed Revolving Loans
referred to in this clause (b) shall be absolute and unconditional and shall
not be affected by any circumstance, including (i) any set-off, counterclaim,
recoupment, defense or other right which such Lender may have against the Swing
Line Lender, the Company or any other Person for any reason whatsoever; (ii)
the occurrence or continuance of any Default; (iii) any adverse change in the
condition (financial or otherwise) of the Company or any other Obligor; (iv)
the acceleration or
55
<PAGE>
maturity of any Loans or the termination of any Commitment after the making of
any Swing Line Loan; (v) any breach of this Agreement or any other Loan Document
by the Company or any Lender; or (vi) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
SECTION 2.4. Continuation and Conversion Elections. By delivering a
Continuation/ Conversion Notice to the Administrative Agent on or before 12:00
noon, Chicago time, on a Business Day, the applicable Borrower may from time to
time irrevocably elect, on not less than one Business Day's notice (in the case
of a conversion of Committed Loans that are LIBO Rate Loans to Base Rate Loans)
or three Business Days' notice (in the case of a continuation of Committed
Loans that are LIBO Rate Loans or a conversion of Committed Loans that are Base
Rate Loans into LIBO Rate Loans) nor more than five Business Days' notice (in
the case of any Committed Loans) that all, or any portion in a minimum amount
of (i) in the case of Committed Loans in Dollars, $500,000 or any larger
integral multiple of $100,000 or (ii) in the case of Committed Loans in any
Foreign Currency, in an integral multiple of 100,000 units of such Foreign
Currency be, in the case of Committed Loans that are Base Rate Loans, converted
into LIBO Rate Loans or, in the case of Committed Loans that are LIBO Rate
Loans, continued as LIBO Rate Loans or, in the case of Committed Loans in
Dollars or Canadian Dollars, converted into Base Rate Loans (in the absence of
delivery of a Continuation/Conversion Notice with respect to any Committed Loan
that is a LIBO Rate Loan at least three Business Days before the last day of
the then current Interest Period with respect thereto, such LIBO Rate Loan
shall, on such last day, (i) in the case of Committed Loans in Dollars or
Canadian Dollars, automatically convert to a Base Rate Loan and (ii) in the
case of Committed Loans in any Foreign Currency other than Canadian Dollars,
automatically be continued for an additional Interest Period of one month);
provided, however, that (x) each such conversion or continuation shall be pro
rated among the applicable outstanding Committed Loans of the relevant Lenders,
and (y) no portion of the outstanding principal amount of any Committed Loans
in Dollars or Canadian Dollars may be continued as, or be converted into, LIBO
Rate Loans when any Default has occurred and is continuing. No Committed Loan
or portion of the outstanding principal amount of any Committed Loan may be
continued as or converted into a Loan denominated in a currency other than the
one in which it was originally made and no Committed Loan in any Foreign
Currency other than Canadian Dollars may be converted into a Base Rate Loan.
SECTION 2.5. Funding. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing
one of its foreign branches or affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan, so long as
such action does not result in increased costs to the applicable Borrower;
provided, however, that such LIBO Rate Loan shall nonetheless be deemed to have
been made and to be held by such Lender, and the obligation of the applicable
Borrower to repay such LIBO Rate Loan shall nevertheless be to such Lender for
the account of such foreign branch, affiliate or international banking
facility; and provided, further, however, that, except for purposes of
determining whether any such increased costs are payable by the applicable
56
<PAGE>
Borrower, such Lender shall cause such foreign branch, affiliate or
international banking facility to comply with the applicable provisions of
clause (b) of Section 4.6 with respect to such LIBO Rate Loan. In addition, the
Borrowers hereby consent and agree that, for purposes of any determination to be
made for purposes of Section 4.1, 4.2, 4.3 or 4.4, it shall be conclusively
assumed that each Lender elected to fund all LIBO Rate Loans by purchasing
deposits in the applicable currency in its LIBOR Office's interbank Eurodollar
market.
SECTION 2.6. Issuance Procedures. By delivering to the applicable Issuer
and the Administrative Agent an Issuance Request on or before 10:00 a.m.,
Chicago time, on a Business Day, the Company may, from time to time irrevocably
request, on not less than five Business Days' notice (or such shorter or longer
notice as may be acceptable to the applicable Issuer), in the case of an
initial issuance of a Letter of Credit, and not less than five nor more than
ten Business Days' notice (unless a shorter or longer notice period is
acceptable to the applicable Issuer) prior to the then existing Stated Expiry
Date of a Letter of Credit, in the case of a request for the extension of the
Stated Expiry Date of a Letter of Credit, that such Issuer issue, or extend the
Stated Expiry Date of, as the case may be, an irrevocable Letter of Credit on
behalf of the Company (whether issued for the account of or on behalf of the
Company or any of its Subsidiaries) in such form as may be requested by the
Company and approved by such Issuer. In the event of any conflict between the
terms of the Issuance Request and the terms of this Agreement, the terms of
this Agreement shall govern. Notwithstanding anything to the contrary contained
herein or in any separate application for any Letter of Credit, the Company
hereby acknowledges and agrees that it shall be obligated to reimburse the
applicable Issuer upon each Disbursement paid under a Letter of Credit
requested by it, and it shall be deemed to be the obligor for purposes of each
such Letter of Credit issued hereunder (whether the account party on such
Letter of Credit is the Company or a Subsidiary of the Company). Upon receipt
of an Issuance Request, the Administrative Agent shall promptly notify the
applicable Issuer and each Lender that has a Revolving Loan Commitment thereof.
Each Letter of Credit shall by its terms be stated to expire on a date (its
"Stated Expiry Date") no later than the earlier to occur of (i) the sixth
anniversary of the Effective Date or (ii) one year from the date of its
issuance (subject to automatic renewal provisions); provided, however, that,
notwithstanding the terms of this clause (ii), a Letter of Credit may, if
required by the beneficiary thereof, contain automatic renewal provisions
pursuant to which the Stated Expiry Date shall be automatically extended (to a
date not beyond the date specified in clause (i) above), unless notice to the
contrary shall have been given to the beneficiary prior to the then existing
Stated Expiry Date in accordance with the terms specified in such Letter of
Credit by the applicable Issuer or the account party of such Letter of Credit
(which notice by the account party shall also have been provided to the
applicable Issuer in writing). The applicable Issuer will make available to the
beneficiary thereof the original of each Letter of Credit which it issues
hereunder. In the event that the Issuer is other than the Administrative Agent,
such Issuer will send by facsimile transmission to the Administrative Agent,
promptly on the first Business Day of each week, its daily maximum amount
available to be drawn under the Letters of Credit issued by such Issuer for the
previous week. The Administrative Agent shall deliver to each Lender upon each
calendar month end,
57
<PAGE>
and upon each payment of the letter of credit fees payable pursuant to Section
3.3.3, a report setting forth the daily maximum amount available to be drawn for
all Issuers during such period.
SECTION 2.6.1. Other Lenders' Participation. Upon the issuance of each
Letter of Credit issued by an Issuer pursuant hereto, and without further
action, each Lender (other than such Issuer) that has a Revolving Loan
Commitment shall be deemed to have irrevocably purchased from such Issuer, to
the extent of its Percentage in respect of the Revolving Loan Commitments, and
such Issuer shall be deemed to have irrevocably granted and sold to such Lender
a participation interest in such Letter of Credit (including the Contingent
Liability and any Reimbursement Obligation and all rights with respect
thereto), and such Lender shall, to the extent of its Percentage in respect of
the Revolving Loan Commitments, be responsible for reimbursing promptly (and in
any event within one Business Day) the applicable Issuer for Reimbursement
Obligations which have not been reimbursed by the Company in accordance with
Section 2.6.3. In addition, such Lender shall, to the extent of its Percentage
in respect of the Revolving Loan Commitments, be entitled to receive a ratable
portion of the letter of credit fees payable pursuant to the first sentence of
Section 3.3.3 with respect to each Letter of Credit and of interest payable
pursuant to Section 2.6.2 or 3.2 with respect to any Reimbursement Obligation.
To the extent that any Lender has reimbursed the applicable Issuer for a
Disbursement as required by this Section, such Lender shall be entitled to
receive its ratable portion of any amounts subsequently received (from the
Company or otherwise) in respect of such Disbursement.
SECTION 2.6.2. Disbursements; Conversion to Committed Revolving Loans. The
applicable Issuer will notify the Company and the Administrative Agent promptly
of the presentment for payment of any drawing under any Letter of Credit issued
by such Issuer, together with notice of the date (the "Disbursement Date") such
payment shall be made (each such payment, a "Disbursement"). Subject to the
terms and provisions of such Letter of Credit and this Agreement, such Issuer
shall make such payment to the beneficiary (or its designee) of such Letter of
Credit. Prior to 12:30 p.m., Chicago time, on the first Business Day following
the Disbursement Date (the "Disbursement Due Date"), the Company will reimburse
the Administrative Agent, for the account of such Issuer, for all amounts which
such Issuer has disbursed under such Letter of Credit (in the currency in which
such disbursement was made, in the case of disbursements made in Dollars,
Canadian Dollars or Euros, or in Dollars in an amount equal to the Dollar
Equivalent of the amount disbursed, in the case of disbursements made in any
currency other than Dollars, Canadian Dollars or Euros), together with interest
thereon (in the currency in which such amount is payable by the Company) at the
rate per annum otherwise applicable to Committed Revolving Loans (made as Base
Rate Loans, in the case of amounts payable in Dollars or Canadian Dollars, or
as LIBO Rate Loans having an Interest Period of one month, in the case of
amounts payable in Euros) from and including the Disbursement Date to but
excluding the Disbursement Due Date and, thereafter (unless such Disbursement
is converted into a Base Rate Loan, in the case of Disbursements made in
Dollars or any Foreign Currency other than Euros, or a LIBO Rate Loan in the
case of Disbursements made in Euros, on the
58
<PAGE>
Disbursement Due Date), at a rate per annum equal to the rate per annum then in
effect with respect to overdue Committed Revolving Loans (made as Base Rate
Loans, in the case of amounts payable in Dollars or Canadian Dollars, or as LIBO
Rate Loans having an Interest Period of one month, in the case of amounts
payable in Euros) pursuant to Section 3.2.2 for the period from the Disbursement
Due Date through the date of such reimbursement; provided, however, that, if no
Default shall have then occurred and be continuing, unless the Company has
notified the Administrative Agent no later than one Business Day prior to the
Disbursement Due Date that it will reimburse such Issuer for the applicable
Disbursement, then the amount of the Disbursement (or, in the case of
Disbursements made in a currency other than Dollars, Canadian Dollars or Euros,
the Dollar Equivalent of such amount) shall be deemed to be a Borrowing of
Committed Revolving Loans made in the currency in which such Disbursement was
made (or made in Dollars in the case of Disbursements made in currencies other
than Dollars, Canadian Dollars or Euros) constituting Base Rate Loans (in the
case of Committed Revolving Loans deemed made in Dollars or Canadian Dollars) or
as LIBO Rate Loans having an Interest Period of one month (in the case of
Committed Revolving Loans deemed made in Euros) and following the giving of
notice thereof by the Administrative Agent to the Lenders, each Lender with a
Revolving Loan Commitment (other than such Issuer) will deliver to such Issuer
on the Disbursement Due Date immediately available funds in the currency of such
Borrowing and in an amount equal to such Lender's Percentage of such Borrowing.
Each conversion of Disbursement amounts (or, in the case of Disbursements made
in a currency other than Dollars, Canadian Dollars or Euros, the Dollar
Equivalent of such Disbursement amounts) into Committed Revolving Loans shall
constitute a representation and warranty by the Company that on the date of the
making of such Committed Revolving Loans all of the statements set forth in
Section 5.2.1 are true and correct.
SECTION 2.6.3. Reimbursement. The obligation (a "Reimbursement
Obligation") of the Company under Section 2.6.2 to reimburse the applicable
Issuer with respect to each Disbursement (including interest thereon) not
converted into Committed Revolving Loans pursuant to Section 2.6.2, and, upon
the Company failing or electing not to reimburse such Issuer and the giving of
notice thereof by the Administrative Agent to the Lenders, each Lender's (to
the extent it has a Revolving Loan Commitment) obligation under Section 2.6.1
to reimburse such Issuer or fund its Percentage of any Disbursement converted
into Committed Revolving Loans, shall be absolute and unconditional under any
and all circumstances and irrespective of any setoff, counterclaim or defense
to payment which the Company or such Lender, as the case may be, may have or
have had against such Issuer or any such Lender, including any defense based
upon the failure of any Disbursement to conform to the terms of the applicable
Letter of Credit (if, in such Issuer's good faith opinion, such Disbursement is
determined to be appropriate) or any non-application or misapplication by the
beneficiary of the proceeds of such Letter of Credit; provided, however, that
after paying in full its Reimbursement Obligation hereunder, nothing herein
shall adversely affect the right of the Company or such Lender, as the case may
be, to commence any proceeding against such Issuer for any wrongful
Disbursement
59
<PAGE>
made by such Issuer under a Letter of Credit as a result of acts or omissions
constituting gross negligence or willful misconduct on the part of such Issuer.
SECTION 2.6.4. Deemed Disbursements. Upon the occurrence and during the
continuation of any Event of Default of the type described in clauses (b)
through (d) of Section 8.1.9 or, with notice from the Administrative Agent
acting at the direction of the Required Lenders, upon the occurrence and during
the continuation of any other Event of Default,
(a) an amount equal to that portion of all Letter of Credit
Outstandings attributable to the then aggregate amount which is undrawn
and available under all Letters of Credit issued at the request of the
Company and outstanding shall, without demand upon or notice to the
Company or any other Person, be deemed to have been paid or disbursed in
the applicable currency or currencies by the applicable Issuer under such
Letters of Credit (notwithstanding that such amount may not in fact have
been so paid or disbursed); and
(b) upon notification by the Administrative Agent to the Company of
its obligations under this Section, the Company shall be immediately
obligated to reimburse the applicable Issuer for the amount, and in the
currency, deemed to have been so paid or disbursed by such Issuer.
Any amounts so payable by the Company pursuant to this Section shall be
deposited in cash with the Administrative Agent and held as collateral security
for the Obligations in connection with the Letters of Credit issued at the
request of the Company by the applicable Issuer. At such time as the Events of
Default giving rise to the deemed disbursements hereunder shall have been cured
or waived, the Administrative Agent shall return to the Company all amounts then
on deposit with the Administrative Agent pursuant to this Section, together with
accrued interest at the Federal Funds Rate, which have not been applied to the
satisfaction of such Obligations.
SECTION 2.6.5. Nature of Reimbursement Obligations. The Company and, to
the extent set forth in Section 2.6.1, each Lender with a Revolving Loan
Commitment, shall assume all risks of the acts, omissions or misuse of any
Letter of Credit by the beneficiary thereof. No Issuer (except to the extent of
its own gross negligence or willful misconduct) shall be responsible for:
(a) the form, validity, sufficiency, accuracy, genuineness or legal
effect of any Letter of Credit or any document submitted by any party in
connection with the application for and issuance of a Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged;
(b) the form, validity, sufficiency, accuracy, genuineness or legal
effect of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit
60
<PAGE>
or the rights or benefits thereunder or the proceeds thereof in whole or
in part, which may prove to be invalid or ineffective for any reason;
(c) failure of the beneficiary to comply fully with conditions
required in order to emand payment under a Letter of Credit;
(d) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise;
or
(e) any loss or delay in the transmission or otherwise of any
document or draft required in order to make a Disbursement under a Letter
of Credit.
None of the foregoing shall affect, impair or prevent the vesting of any of the
rights or powers granted to any Issuer or any Lender with a Revolving Loan
Commitment hereunder. In furtherance and extension and not in limitation or
derogation of any of the foregoing, any action taken or omitted to be taken by
the applicable Issuer in good faith (and not constituting gross negligence or
willful misconduct) shall be binding upon the Company, each Obligor and each
such Lender, and shall not put such Issuer under any resulting liability to the
Company, any Obligor or any such Lender, as the case may be. The Issuer shall be
entitled to rely, and shall be fully protected in relying, upon any Letter of
Credit draft, writing, Issuance Request, resolution, notice, consent,
certificate, affidavit, letter, electronic mail, cablegram, telegram, telecopy,
telex, or teletype message, statement, order, or other document believed by it
to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel, independent
accountants, and other experts selected by the Issuer. Notwithstanding any other
provision of this Section 2.6, the Issuer shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement in accordance with
a request of the Required Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon the Lenders.
SECTION 2.7. Register; Notes.
(a) Each Lender may maintain in accordance with its usual practice an
account or accounts evidencing the Indebtedness of each Borrower to such
Lender resulting from each Loan made by such Lender to such Borrower,
including the amounts of principal and interest payable and paid to such
Lender from time to time hereunder. Such account or accounts shall, to the
extent not inconsistent with the notations made by the Administrative
Agent in the Register, be conclusive and binding on such Borrower absent
manifest error; provided, however, that the failure of any Lender to
maintain such account or accounts shall not limit or otherwise affect any
Obligations of any Borrower or any other Obligor.
61
<PAGE>
(b)(i) Each Borrower hereby designates the Administrative Agent to
serve as its agent, solely for the purpose of this clause (b), to maintain
a register (the "Register") on which the Administrative Agent will record
each Lender's Commitments, the Loans made by each Lender to each Borrower
and each repayment in respect of the principal amount of the Loans of each
Lender to each Borrower. Failure to make any recordation, or any error, in
the Register shall not affect the applicable Borrower's obligation in
respect of such Loans. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrowers, the Administrative Agent
and the Lenders shall treat each Person in whose name a Loan is registered
as the owner thereof for all purposes of this Agreement, notwithstanding
notice or any provision herein to the contrary, other than in accordance
with Section 11.11. A Lender's Commitment and the Loans made pursuant
thereto may be assigned or otherwise transferred in whole or in part only
by registration of such assignment or transfer in the Register in
accordance with Section 11.11.
(ii) Each Borrower agrees that, upon the request to the
Administrative Agent by any Lender, such Borrower will execute and deliver
to such Lender, as applicable, a Note of the applicable Tranche evidencing
the Loans of such Tranche made by such Lender to such Borrower. Each
Borrower hereby irrevocably authorizes each Lender to make (or cause to be
made) appropriate notations on the grid attached to such Lender's Notes
issued by such Borrower (or on any continuation of such grid), which
notations, if made, shall evidence, inter alia, the date of, the
outstanding principal amount of, and the interest rate and Interest Period
applicable to the Loans evidenced thereby. Such notations shall, to the
extent not inconsistent with the notations made by the Administrative
Agent in the Register, be conclusive and binding on the Borrower that
shall have issued such Note absent manifest error; provided, however, that
the failure of any Lender to make any such notations or any error in any
such notations shall not limit or otherwise affect any Obligations of the
Borrowers or any other Obligor. The Loans evidenced by any such Note and
interest thereon shall at all times (including after assignment pursuant
to Section 11.11.1) be represented by one or more Notes payable to the
order of the payee named therein and its registered assigns. A Note and
the obligation evidenced thereby may be assigned or otherwise transferred
in whole or in part only by registration of such assignment or transfer of
such Note and the obligation evidenced thereby in the Register in
accordance with Section 11.11.
SECTION 2.8. Uncommitted Revolving Loans. Each Lender severally agrees
that the Company may request that Uncommitted Revolving Loan Borrowings be made
to it pursuant to this Section 2.8 from time to time on any Business Day prior
to the Revolving Loan Commitment Termination Date.
62
<PAGE>
SECTION 2.8.1. Uncommitted Revolving Loan Borrowing Request. (a) The
Company may request that a Borrowing of Uncommitted Revolving Loans be made to
it in any Foreign Currency by delivering to the Administrative Agent an
Uncommitted Revolving Loan Borrowing Request, which shall specify:
(i) the Foreign Currency in which each such Loan is requested to
be made;
(ii) the principal amount of the Uncommitted Revolving Loan
Borrowing requested to be made (which shall be in an aggregate
principal amount which is an integral multiple of 100,000 units of
the applicable Foreign Currency) and that, after giving effect to
such Uncommitted Revolving Loan Borrowing, the conditions set forth
in Section 5.2.1 applicable thereto shall have been satisfied;
(iii) the proposed date of each such proposed Uncommitted
Revolving Loan Borrowing, which shall be a Business Day;
(iv) in the case of a proposed Borrowing of Uncommitted
Revolving Loans that are to be LIBO Rate Loans, the proposed Interest
Period for each such proposed Borrowing, subject to the provisions of
the definition of Interest Period;
(v) the proposed Stated Maturity Date for the Uncommitted
Revolving Loans to be made pursuant to each such Uncommitted
Revolving Loan Borrowing; and
(vi) whether the Uncommitted Interest Quotes requested are to
set forth an Uncommitted Interest Margin or an Uncommitted Absolute
Interest Rate.
(b) Each Uncommitted Revolving Loan Borrowing Request shall be transmitted
to the Administrative Agent by telecopy so as to be received by the
Administrative Agent (i) not later than 11:00 a.m., Chicago time, on the fourth
Business Day before the date of the Borrowing proposed therein, in the case of
a LIBO Rate Auction, or (ii) not later than 11:00 a.m., Chicago time, on the
Business Day next preceding the date of the Borrowing proposed therein, in the
case of an Absolute Rate Auction, or, in any such case, such other time or date
as the Company and the Administrative Agent shall have mutually agreed and
shall have notified to the Lenders having a Percentage of any Revolving Loan
Commitment of greater than zero no later than the date of the Uncommitted
Revolving Loan Borrowing Request for the first LIBO Rate Auction or Absolute
Rate Auction for which such change is to be effective.
(c) The Company shall not deliver to the Administrative Agent any
Uncommitted Revolving Loan Borrowing Request in respect of Uncommitted
Revolving Loans to be made to the Company in any Foreign Currency within five
Business Days after the delivery by the
63
<PAGE>
Company of any other Uncommitted Revolving Loan Borrowing Request in respect of
Uncommitted Revolving Loans to be made in such Foreign Currency.
SECTION 2.8.2. Invitation for Uncommitted Interest Quotes. Promptly upon
receipt of an Uncommitted Revolving Loan Borrowing Request delivered pursuant
to Section 2.8.1, but in no event later than 12:00 noon, Chicago time, on the
Business Day of such receipt, the Administrative Agent shall send to each of
the Lenders having a Percentage of the Revolving Loan Commitments of greater
than zero (by telecopy) an Invitation for Uncommitted Interest Quotes (which
shall include a copy of each Uncommitted Revolving Loan Borrowing Request
delivered pursuant to Section 2.8.1), which shall constitute an invitation on
behalf of the Company to each such Lender to submit Uncommitted Interest Quotes
offering to make all or a portion of the Uncommitted Revolving Loan Borrowing
requested by the Company pursuant to Section 2.8.1. The Lenders may, but shall
have no obligation to, make such offers and the Company may, but shall have no
obligation to, accept any such offers in the manner set forth herein.
SECTION 2.8.3. Submission and Contents of Uncommitted Interest Quotes. (a)
Each Lender having a Percentage of the Revolving Loan Commitments of greater
than zero may submit an Uncommitted Interest Quote containing an offer or
offers to make Uncommitted Revolving Loans in response to any Invitation for
Uncommitted Interest Quotes. Each Uncommitted Interest Quote must be submitted
to the Administrative Agent (by telecopy) (i) not later than 2:00 p.m., Chicago
time, on the fourth Business Day before the proposed date of the Borrowing, in
the case of a LIBO Rate Auction, or (ii) not later than 9:30 a.m., Chicago
time, on the proposed date of the Borrowing, in the case of an Absolute Rate
Auction, or, in any such case, such other time or date as the Company or the
Company and the Administrative Agent shall have mutually agreed and shall have
notified to the Lenders having a Percentage of the Revolving Loan Commitments
of greater than zero not later than the date of the Uncommitted Revolving Loan
Borrowing Request for the first LIBO Rate Auction or Absolute Rate Auction for
which such change is to be effective; provided, however, that Uncommitted
Interest Quotes submitted by the Administrative Agent (or any Affiliate of the
Administrative Agent) in the capacity of a Lender may be submitted, and may
only be submitted, if the Administrative Agent or such Affiliate notifies the
Company of the terms of the offer or offers contained therein not later than
(x) one hour before the deadline for the other Lenders, in the case of a LIBO
Rate Auction or (y) 15 minutes before the deadline for the other Lenders, in
the case of an Absolute Rate Auction.
(b) Each Uncommitted Interest Quote shall be substantially in the form of
Exhibit F-2 hereto, shall comply with the provisions of this Section 2.8.3, and
shall in any case specify the following:
(i) the proposed date of Borrowing,
64
<PAGE>
(ii) the principal amount (stated in the applicable Foreign Currency)
of the Uncommitted Revolving Loan for which each such offer is being made,
which principal amount (x) may be greater than or less than the Revolving
Loan Commitments of the quoting Lender, (y) shall be in an amount which is
an integral multiple of 100,000 units of the applicable Foreign Currency
and (z) may not exceed the principal amount of Uncommitted Revolving Loans
for which offers were requested,
(iii) in the case of a LIBO Rate Auction, the margin above the
applicable LIBO Rate (the "Uncommitted Interest Margin") offered for each
such Uncommitted Revolving Loan, expressed as a percentage (specified to
the nearest 1/10,000 of 1%) to be added to or subtracted from such LIBO
Rate,
(iv) in the case of an Absolute Rate Auction, the rate of interest
per annum (specified to the nearest 1/10,000 of 1%) (the "Uncommitted
Absolute Interest Rate") offered for each such Uncommitted Revolving Loan,
and
(v) the identity of the quoting Lender;
provided, however, that any Uncommitted Interest Quote submitted by a Lender
pursuant to this Section 2.8.3 shall be irrevocable (subject to Articles V and
VIII hereof), unless otherwise consented to in writing by the Administrative
Agent acting upon the instructions of the Company.
(c) Any Uncommitted Interest Quote that: (i) is not substantially in the
form of Exhibit F-2 hereto, as determined by the Administrative Agent in its
sole discretion, or does not specify all of the information required in clause
(b) above; (ii) contains qualifying, conditional or similar language; or (iii)
arrives after the time set forth in clause (a) above, may be disregarded by the
Company and the Administrative Agent.
(d) The Administrative Agent (by telephone, promptly confirmed in writing)
shall promptly notify the Company of the terms of all Uncommitted Interest
Quotes submitted by the Lenders in accordance with this Section 2.4.3, as well
as the identity of any such Lender.
SECTION 2.8.4. Uncommitted Revolving Loan Acceptance. (a) The Company
shall notify the Administrative Agent of its acceptance or non-acceptance of
the offers notified to it pursuant to clause (d) of Section 2.8.3 (x) not later
than 4:00 p.m., Chicago time, on the fourth Business Day before the proposed
date of Borrowing, in the case of a LIBO Rate Auction, or (y) not later than
10:30 a.m., Chicago time, on the proposed date of Borrowing, in the case of an
Absolute Rate Auction, or, in any such case, such other time or date as the
Company or the Company and the Administrative Agent shall have mutually agreed
and shall have given notice thereof to each Lender having a Percentage of the
Revolving Loan Commitments of greater than zero not later than the date of the
Uncommitted Revolving Loan Borrowing Request for the first
65
<PAGE>
LIBO Rate Auction or Absolute Rate Auction for which such change is to be
effective. In the case of acceptance, such notice (a "Notice of Uncommitted
Revolving Borrowing") shall specify the aggregate principal amount of offers for
each requested maturity date and, in the case of LIBO Rate Loans, Interest
Period that are accepted.
(b) The Company may accept any Uncommitted Interest Quote in whole or in
part; provided, however, that:
(i) the aggregate principal amount of each Uncommitted Revolving Loan
Borrowing may not exceed the applicable amount set forth in the related
Uncommitted Revolving Loan Borrowing Request;
(ii) the aggregate principal amount of each Uncommitted Revolving
Loan Borrowing must be an integral multiple of 100,000 units of the
applicable Foreign Currency;
(iii) acceptance of offers may only be made on the basis of ascending
Uncommitted Interest Margins or Uncommitted Absolute Interest Rates, as
the case may be;
(iv) the Company may not accept any offer that fails to comply with
the requirements of this Agreement; and
(v) the conditions set forth in Section 5.2.1 applicable to such
Uncommitted Revolving Loan Borrowing shall have been satisfied.
(c) Not later than 12:00 noon, Chicago time, on the date specified for
each Uncommitted Revolving Loan Borrowing hereunder, each Lender participating
therein shall, by wire transfer in same day funds, deposit to an account of the
Company specified by the Company the amount of the Uncommitted Revolving Loans
to be made by it on such date in the applicable Foreign Currency.
(d) As soon as practicable after the Uncommitted Revolving Loan Borrowing
is made, the Administrative Agent shall notify each Lender having a Percentage
of the Revolving Loan Commitments greater than zero of (i) the amount of the
Uncommitted Revolving Loan Borrowing, (ii) the Dollar Equivalent of the
outstanding principal amount of all Foreign Currency Revolving Loans
immediately after giving effect to such Borrowing and (iii) the date on which
such Uncommitted Revolving Loan Borrowing was made.
66
<PAGE>
SECTION 2.9. Special Provisions for Foreign Currency Loans and Letters
of Credit.
SECTION 2.9.1. Dollar Equivalent Determinations. For purposes of
determining the Revolving Loan outstandings borrowed in a Foreign Currency and
Letter of Credit Outstandings denominated in a Foreign Currency and for purposes
of calculating fees payable under Sections 3.3.1 and 3.3.2 with respect to
Foreign Currency Loans outstanding and Letter of Credit Outstandings, the
principal amount of such Loans and the Letter of Credit Outstandings with
respect to any Foreign Currency Letter of Credit shall be deemed to be, as of
any date of determination, the Dollar Equivalent thereof at such date. The
initial Dollar Equivalent shall be determined by the Administrative Agent and/or
Issuer, as the case may be, on the date of borrowing or issuance thereof
determined in accordance with the definition of "Dollar Equivalent" in Section
1.1.
SECTION 2.9.2. Foreign Currency Letters of Credit. If a Disbursement is
made by the Issuer under any Foreign Currency Letter of Credit other than a
Foreign Currency Letter of Credit denominated in Canadian Dollars or Euros, the
Dollar Equivalent of such Disbursement shall be determined by the Issuer on the
Disbursement Date related thereto. The Issuer shall notify the Administrative
Agent and the Company promptly of such Dollar Equivalent determined by it, on
the date that such determination is required to be made.
SECTION 2.9.3. Currency Fluctuation, etc. Not later than 12:00 p.m.,
Chicago time, on each Calculation Date, the Administrative Agent shall (a)
determine the Dollar Equivalent as of such Calculation Date with respect to each
Foreign Currency for which there are at such time outstanding Foreign Currency
Loans or Foreign Currency Letters of Credit or Reimbursement Obligations in
respect thereof (after giving effect to any Loans to be made or repaid or
Letters of Credit to be issued or Reimbursement Obligations to be repaid on such
date) and (b) notify the Company of the results of such determination. The
Dollar Equivalent so determined shall become effective on the first Business Day
immediately following the relevant Calculation Date (a "Reset Date") and shall
remain effective until the next succeeding Reset Date.
SECTION 2.9.4. European Monetary Union. If and to the extent that any
provision of this Section 2.9.4 relates to any state (or the currency of such
state) that is not a Participating Member State on the Effective Date, such
provision shall become effective in relation to such state (and the currency of
such state) at and from the date on which such state becomes a Participating
Member State.
(a) An amount denominated in the National Currency Unit of a
Participating Member State shall be redenominated into Euros in
accordance with EMU Legislation and paid by the applicable party to
this Agreement either in the Euro Unit or in that National Currency
Unit and an amount denominated in the Euro Unit shall be paid by the
applicable party to this Agreement in the Euro Unit unless EMU
Legislation provides otherwise; provided, however, that if and to the
extent that any EMU Legislation provides
67
<PAGE>
that an amount denominated either in Euros or in the National Currency
Unit of a Participating Member State and payable within the
Participating Member State by crediting an account of the creditor can
be paid by a debtor either in the Euro Unit or in that National
Currency Unit, any party to this Agreement shall be entitled to pay or
repay any such amount either in the Euro Unit or in such National
Currency Unit.
(b) If the basis of accrual of interest or fees expressed in
this Agreement with respect to the currency of any state that is or
becomes a Participating Member State shall be inconsistent with any
convention or practice in the London, England interbank market for the
basis of accrual of interest or fees in respect of the Euro, such
convention or practice shall replace such expressed basis effective as
of and from the date on which such state becomes a Participating Member
State.
(c) Without prejudice to the respective liabilities of the
Borrowers to the Lenders, the Issuers and the Agents under or pursuant
to this Agreement, except as expressly provided in this clause (c),
each provision of this Agreement shall be subject to such reasonable
changes of construction as the Administrative Agent in consultation
with the Borrowers may from time to time specify to be necessary or
appropriate to reflect the introduction of or changeover to the Euro in
Participating Member States.
SECTION 2.10. Consequences of Effectiveness. (a) On the Effective Date,
without further action by any of the parties thereto, the Existing Credit
Agreement will be automatically amended and restated to read in its entirety as
set forth in this Agreement.
(b) On and after the Effective Date, the rights and
obligations of the parties hereto shall be governed by the provisions
hereof (as amended in accordance with the terms hereof). The rights and
obligations of the parties to the Existing Credit Agreement with
respect to the period prior to the Effective Date shall continue to be
governed by the provisions thereof as in effect prior to the Effective
Date.
(c) On the Effective Date, the Existing Loans outstanding, as
set forth on Schedule II hereto, shall be governed by the terms and
conditions of this Agreement and deemed to be Initial Term-A Loans
(such Loans, the "Initial Term-A Loans"), Initial U.S. Term-B Loans
(such Loans, the "Initial U.S. Term-B Loans"), Initial Canadian Term-B
Loans (such Loans, the "Initial Canadian Term-B Loans"), and Revolving
Loans (such Loans, the "Continued Revolving Loans"), such that each
Lender shall have such Loans in the aggregate outstanding principal
amount set forth opposite the name of such Lender on Schedule II under
the captions "Initial Term-A Loans", "Initial U.S. Term-B Loans",
"Initial Canadian Term-B Loans" and "Continued Revolving Loans",
respectively.
68
<PAGE>
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments; Application.
SECTION 3.1.1. Repayments and Prepayments. Each Borrower shall repay in
full the unpaid principal amount of each Loan made to it upon the Stated
Maturity Date therefor in the currency in which such Loan was made. Prior
thereto, payments and repayments of Loans shall or may be made, in each case in
the currency in which such Loans were made, as set forth below.
(a) From time to time on any Business Day, any Borrower (or,
in the case of Swing Line Loans, the Company) may make a voluntary
prepayment, in whole or in part, of the outstanding principal amount of
any
(i) Loans of such Borrower (other than Swing Line Loans);
provided, however, that
(A) (1) any such prepayment of the Term-A
Loans or Term-B Loans shall be made pro rata among
Term-A Loans and Term-B Loans, as applicable, of the
same type, in the same currency and, if applicable,
having the same Interest Period of all Lenders that
have made such Term-A Loans or Term-B Loans;
provided, however, that prepayments of Term-B Loans,
shall be applied, first, to Initial U.S. Term-B Loans
and Additional Term-B Loans until all Initial U.S.
Term-B Loans and Additional Term-B Loans shall have
been repaid in full and, second, to Initial Canadian
Term-B Loans, (2) any such prepayment of Committed
Revolving Loans shall be made pro rata among the
Committed Revolving Loans of the same type and in the
same currency and, if applicable, having the same
Interest Period of all Lenders that have made such
Committed Revolving Loans and (3) any such prepayment
of Uncommitted Revolving Loans shall be made pro rata
among the Uncommitted Revolving Loans in the
applicable Borrowing of Uncommitted Revolving Loans;
(B) the applicable Borrower shall comply
with Section 4.4 in the event that any LIBO Rate Loan
is prepaid on any day other than the last day of the
Interest Period for such Loan;
(C) all such voluntary prepayments shall
require at least one Business Day's notice in the
case of Base Rate Loans or Absolute Rate Loans, three
Business Days' notice in the case of LIBO Rate Loans,
but no
69
<PAGE>
more than five Business Days' notice in the case of
any Loans, in each case in writing to the
Administrative Agent; and
(D) all such voluntary partial prepayments
shall be in an aggregate amount of (i) in the case of
Loans in Dollars, $500,000 or any larger integral
multiple of $100,000, (ii) in the case of Loans in
any Foreign Currency, in an integral multiple of
100,000 units of such Foreign Currency or (iii) in
any case in the aggregate principal amount of all
Loans of the applicable Tranche, type, currency and,
in the case of prepayments of Uncommitted Revolving
Loans, Borrowing then outstanding; or
(ii) Swing Line Loans; provided, however, that
(A) all such voluntary prepayments shall
require prior telephonic notice to the Swing Line
Lender on or before 1:00 p.m., Chicago time, on the
day of such prepayment (such notice to be confirmed
in writing by the Company within 24 hours
thereafter); and
(B) all such voluntary partial prepayments
shall be in an aggregate amount of $100,000 and an
integral multiple of $50,000 or in the aggregate
principal amount of all Swing Line Loans then
outstanding.
(b) Subject to Section 3.1.3, no later than five Business Days
following the delivery by the Company of its annual audited financial
reports required pursuant to clause (b) of Section 7.1.1, (beginning
with the financial reports delivered in respect of the 2001 Fiscal
Year), the Company shall deliver to the Administrative Agent a
calculation of the Excess Cash Flow for the Fiscal Year last ended and,
no later than five Business Days following the delivery of such
calculation, the Borrowers shall make or cause to be made a mandatory
prepayment of the Loans in an amount equal to (i) 50% of the Excess
Cash Flow (if any) for such Fiscal Year less (ii) the aggregate amount
of all voluntary prepayments of the principal of the Term Loans
actually made in such Fiscal Year pursuant to clause (a) of Section
3.1.1, to be applied as set forth in Section 3.1.2; provided, however,
that no such prepayment shall be required to be made beyond the extent
that the amount of Debt as reduced by giving effect to such prepayment
would result, on a pro forma basis, in a Leverage Ratio of 3.50:1 or
less as of the end of the immediately preceding Fiscal Quarter.
(c) Subject to Section 3.1.3, no later than one Business Day
(in the case of Net Debt Proceeds) or 30 days (in the case of Net
Disposition Proceeds) following the receipt of any Net Disposition
Proceeds or Net Debt Proceeds by (x) in the case of Net Debt Proceeds,
Holdco, the Company or any Restricted Subsidiary and (y) in the case of
Net Disposition Proceeds, the Company or any Restricted Subsidiary, the
Company shall
70
<PAGE>
deliver to the Administrative Agent a calculation of the amount of such
Net Disposition Proceeds or Net Debt Proceeds, as the case may be, and,
to the extent the amount of such Net Disposition Proceeds or Net Debt
Proceeds, as the case may be, with respect to any single transaction or
series of related transactions, exceeds $2,000,000, the Borrowers shall
make a mandatory prepayment of the Loans in an amount equal to 100% of
such Net Disposition Proceeds or Net Debt Proceeds, as the case may be,
to be applied as set forth in Section 3.1.2; provided, however, that no
mandatory prepayment on account of such Net Disposition Proceeds shall
be required under this clause if the Company informs the Agents no
later than 30 days following the receipt of any Net Disposition
Proceeds of its or any Restricted Subsidiary's good faith intention to
apply such Net Disposition Proceeds to the acquisition of other assets
or property consistent with the business permitted to be conducted
pursuant to Section 7.2.1 (including by way of merger or Investment)
within 365 days following the receipt of such Net Disposition Proceeds,
with the amount of such Net Disposition Proceeds unused after such 365
day period being applied to the Loans pursuant to Section 3.1.2.
(d) Subject to Section 3.1.3, concurrently with the receipt of
any Net Equity Proceeds by Holdco, the Company or any Restricted
Subsidiary, the Company shall deliver to the Administrative Agent a
calculation of the amount of such Net Equity Proceeds, and no later
than five Business Days following the delivery of such calculation,
and, to the extent that the amount of such Net Equity Proceeds with
respect to any single transaction or series of related transactions
exceeds $2,000,000, and subject to the proviso below, the Borrowers
shall make or cause to be made a mandatory prepayment of the Loans in
an amount equal to 50% of such Net Equity Proceeds to be applied as set
forth in Section 3.1.2; provided, however, that no such prepayment
shall be required to be made beyond the extent that the amount of Debt
as reduced by giving effect to such prepayment would result, on a pro
forma basis, in a Leverage Ratio of 3.50:1 or less as of the end of the
immediately preceding Fiscal Quarter;
(e) Subject to Section 3.1.3, no later than the 60th calendar
day following the receipt by the Company or any Restricted Subsidiary
of any Casualty Proceeds in excess of $2,000,000 (individually or in
the aggregate in any Fiscal Year), the Borrowers shall make or cause to
be made a mandatory prepayment of the Loans in an amount equal to 100%
of such Casualty Proceeds, to be applied as set forth in Section 3.1.2;
provided, however, that no mandatory prepayment on account of Casualty
Proceeds shall be required under this clause if the Company informs the
Agents no later than 60 days following the occurrence of the Casualty
Event resulting in such Casualty Proceeds of its or any Restricted
Subsidiary's good faith intention to apply such Casualty Proceeds to
the rebuilding or replacement of the damaged, destroyed or condemned
assets or property subject to such Casualty Event or the acquisition of
other assets or property consistent with the business permitted to be
conducted pursuant to Section 7.2.1 (including by way of merger or
Investment) and in fact uses such Casualty Proceeds to rebuild or
replace the
71
<PAGE>
damaged, destroyed or condemned assets or property subject to such
Casualty Event or to acquire such other property or assets within 365
days following the receipt of such Casualty Proceeds, with the amount
of such Casualty Proceeds unused after such 365 day period being
applied to the Loans pursuant to Section 3.1.2; provided further,
however, that at any time when any Event of Default shall have occurred
and be continuing or Casualty Proceeds not applied as provided above
shall exceed $2,000,000, such Casualty Proceeds will be deposited in an
account maintained with the Administrative Agent (over which the
Administrative Agent has sole dominion and control) for disbursement at
the request of the Company to pay for such rebuilding, replacement or
acquisition.
(f) On each date when any reduction in the Revolving Loan
Commitment Amount shall become effective, the Company shall make a
mandatory prepayment of Revolving Loans and (if necessary) Swing Line
Loans and (if necessary) Cash Collateralize Letter of Credit
Outstandings in an aggregate amount equal to the excess, if any, of the
sum of (A) the aggregate outstanding principal amount of all Revolving
Loans, after converting the aggregate outstanding principal amount of
all Foreign Currency Loans to the Dollar Equivalent thereof, and Swing
Line Loans and (B) the aggregate amount of all Letter of Credit
Outstandings over the Revolving Loan Commitment Amount as so reduced.
(g) On the Stated Maturity Date and on each Quarterly Payment
Date occurring during any period set forth below, the Company shall
make a repayment of the outstanding principal amount, if any, of Term-A
Loans in an aggregate amount equal to the amount set forth below
opposite such period or the Stated Maturity Date, as applicable (as
such amounts may have otherwise been reduced or increased pursuant to
this Agreement):
Scheduled
Principal
Period Repayment
--------------------------- ---------
12/31/00 to (and including)
10/15/02 $875,000
10/16/02 to (and including)
10/15/03 $1,312,500
10/16/03 to (and including)
10/15/05 $1,750,000
10/16/05 to (and including)
the Stated Maturity Date for $2,187,500
Term-A Loans
72
<PAGE>
On the Stated Maturity Date and on each Quarterly Payment Date
occurring during any period set forth below, the Borrowers shall,
collectively, make a repayment of the outstanding principal amount, if
any, of Term-B Loans in an aggregate amount equal to the amount set
forth below opposite such period or the Stated Maturity Date, as
applicable (as such amounts may have otherwise been reduced or
increased pursuant to this Agreement):
Scheduled
Principal
Period Repayment
---------------------------- ---------
12/31/00 to (and including)
10/15/06 $312,500
10/16/06 to (and including) $29,375,000
the Stated Maturity Date for
Term-B Loans
(h) On each date when the sum of (a) the aggregate outstanding
principal amount (after converting the aggregate outstanding principal
amount of all Foreign Currency Loans to the Dollar Equivalent thereof)
of all Revolving Loans and (b) the Letter of Credit Outstandings
exceeds 105% of the Revolving Loan Commitment Amount then in effect,
the Company shall make a mandatory prepayment of all Revolving Loans in
an amount equal to such excess;
(i) Immediately upon any acceleration of the Stated Maturity
Date of any Loans or Obligations pursuant to Section 8.2 or Section
8.3, the Borrowers shall repay all of their respective outstanding
Loans and other Obligations, unless, pursuant to Section 8.3, only a
portion of all Loans and other Obligations are so accelerated (in which
case the portion so accelerated shall be so prepaid).
Each prepayment of any Loans made pursuant to this Section shall be
without premium or penalty, except as may be required by Section 4.4. No
prepayment of principal of any Revolving Loans or Swing Line Loans or Cash
Collateralization of Letters of Credit pursuant to this Section 3.1.1 shall
cause a reduction in the Revolving Loan Commitment Amount, the Swing Line Loan
Commitment Amount or the Letter of Credit Commitment Amount, as the case may be.
SECTION 3.1.2. Application. (a) Subject to clauses (b) and (c) below,
each prepayment or repayment of principal of the Loans of any Tranche shall be
applied, to the extent of such prepayment or repayment, first, to the principal
amount thereof being maintained as Base Rate Loans, and second, to the principal
amount thereof being maintained as LIBO Rate Loans.
73
<PAGE>
(b) Each prepayment of Loans pursuant to clauses (b), (c), (d)
and (e) of Section 3.1.1 or clause (d) of this Section 3.1.2 shall be
applied (i) first, to the prepayment of Term Loans, until all Term
Loans shall have been repaid in full, (ii) second, to the prepayment of
Swing Line Loans, until all Swing Line Loans shall have been repaid in
full, (iii) third, to the prepayment of Revolving Loans, until all
Revolving Loans shall have been repaid in full and (iv) fourth, to the
Cash Collateralization of Letter of Credit Outstandings.
(c) Each prepayment of Term Loans made pursuant to clauses
(a), (b), (c), (d) and (e) of Section 3.1.1 shall be applied, (i)
except in the case of a payment made pursuant to the last sentence of
Section 3.1.3, on a pro rata basis, to the outstanding principal amount
of all remaining Term-A Loans and Term-B Loans, (provided, however,
that prepayments of Term-B Loans shall be applied, first, to Initial
U.S. Term-B Loans and Additional Term-B Loans until all Initial U.S.
Term-B Loans and Additional Term-B Loans have been repaid in full and,
second, to Initial Canadian Term-B Loans) and (ii) in respect of each
Tranche of Term Loans, in direct order of maturity of the remaining
scheduled quarterly amortization payments in respect thereof, until all
such Term-A Loans and Term-B Loans have been repaid in full (provided,
however, that if the Company at any time elects in writing, in its sole
discretion, to permit any Lender that has Term-B Loans to decline to
have such Loans prepaid, then any Lender having Term-B Loans
outstanding may, by delivering a notice to the Agents at least one
Business Day prior to the date that such prepayment is to be made,
decline to have such Loans prepaid with the amounts set forth above, in
which case 50% of the amounts that would have been applied to a
prepayment of such Lender's Term-B Loans, shall instead be applied to a
prepayment of the Term-A Loans (until paid in full), with the balance
being retained by the Company and the Restricted Subsidiaries).
(d) Following the prepayment in full of the Term Loans, on the
date the Term Loans would otherwise have been required to be prepaid
pursuant to clauses (b), (c), (d) and (e) of Section 3.1.1 , the
applicable Borrower shall first, prepay Revolving Loans and Swing Line
Loans, and, second, Cash Collateralize Letter of Credit Outstandings,
in an aggregate amount equal to the amount by which the Term Loans
would otherwise have been required to be prepaid if Term Loans had been
outstanding. No prepayment of principal of any Revolving Loans or Swing
Line Loans or Cash Collateralization of Letters of Credit pursuant to
Section 3.1.1 or this clause (d) shall cause a reduction in the
Revolving Loan Commitment Amount, the Swing Line Loan Commitment Amount
or the Letter of Credit Commitment Amount, as the case may be.
SECTION 3.1.3. Limitation on Mandatory Prepayments of the Initial
Canadian Term-B Loans. Notwithstanding anything to the contrary in this
Agreement, the Canadian Borrower shall not be required to make any prepayment
pursuant to clauses (b), (c) (with respect to Net Disposition Proceeds) or (d)
of Section 3.1.1 of any principal amount outstanding in respect of
74
<PAGE>
Initial Canadian Term-B Loans at any time on or prior to February 16, 2005 (the
"Canadian Target Date"). In addition, notwithstanding anything to the contrary
in this Agreement, the Canadian Borrower shall not be required to make any
prepayment pursuant to clause (e) of Section 3.1.1 of any principal amount
outstanding in respect of Initial Canadian Term-B Loans if such prepayment,
together with all repayments that the Canadian Borrower is required to make
pursuant to clause (g) of Section 3.1.1 on account of the principal amount of
the Initial Canadian Term-B Loans would result in a repayment in excess of 25%
of the aggregate principal amount of Initial Canadian Term-B Loans outstanding
on the Effective Date on or prior to the Canadian Target Date (any such excess
amount being the "Canadian Term Loan Excess Amount "). If any prepayment of
Initial Canadian Term-B Loans otherwise required under clause (e) of Section
3.1.1 would result in the prepayment of all or any portion of the Canadian Term
Loan Excess Amount, then the Canadian Borrower shall, on or prior to the date
upon which such Canadian Term Loan Excess Amount otherwise would be required to
be prepaid pursuant to the terms of clause (e) of Section 3.1.1, either (i)
deposit an amount equal to such Canadian Term Loan Excess Amount as cash
collateral in a separate, interest-bearing deposit account maintained with, and
subject to the Lien of, the Administrative agent, which deposit account shall be
subject to terms and conditions reasonably acceptable to the Administrative
Agent or (ii) make a voluntary prepayment of Initial Canadian Term-B Loans in an
amount equal to such Canadian Term Loan Excess Amount in accordance with the
terms of clause (a) of Section 3.1.1. If such a deposit is made, then the
Initial Canadian Term-B Loans shall (to the extent of such deposit) be deemed no
longer outstanding for purposes of Article VII or the definition of "Leverage
Ratio". On the first Business Day following the Canadian Target Date, any amount
held as cash collateral pursuant to the terms of this Section 3.1.3 shall be
applied as a prepayment or repayment of Initial Canadian Term-B Loans pursuant
to clause (a) of Section 3.1.1.
SECTION 3.2. Interest Provisions. Interest on the outstanding principal
amount of the Loans shall accrue and be payable in accordance with this Section
3.2.
SECTION 3.2.1. Rates.
(a) Each Base Rate Loan (other than an Uncommitted Revolving
Loan) shall accrue interest on the unpaid principal amount thereof for
each day from and including the day upon which such Loan was made or
converted to a Base Rate Loan to but excluding the date such Loan is
repaid or converted to a LIBO Rate Loan at a rate per annum equal to
the sum of the Alternate Base Rate or, in the case of Canadian Dollar
Loans, the Canadian Prime Rate for such day plus the Applicable Margin
for such Loan on such day.
(b) Each LIBO Rate Loan (other than an Uncommitted Revolving
Loan) in any currency shall accrue interest on the unpaid principal
amount thereof for each day during each Interest Period applicable
thereto in the currency in which such LIBO Rate Loan is denominated at
a rate per annum equal to the sum of (i)(A) in the case of LIBO Rate
75
<PAGE>
Loans made in currencies other than Dollars, the LIBO Rate for such
currency for such Interest Period and (B) in the case of LIBO Rate
Loans made in Dollars, the LIBO Rate (Reserve Adjusted) for such
Interest Period plus (ii) the Applicable Margin for such Loan on such
day.
(c) Each Uncommitted Revolving Loan shall accrue interest on
the unpaid principal amount thereof for each day from and including the
day upon which such Loan was made to but excluding the date such Loan
is repaid at a rate per annum equal to the Uncommitted Interest Rate
for such Loan.
All LIBO Rate Loans shall bear interest from and including the first day of the
applicable Interest Period to (but not including) the last day of such Interest
Period at the interest rate determined as applicable to such LIBO Rate Loan.
SECTION 3.2.2. Post-Maturity Rates. After the date any principal amount
of any Loan shall have become due and payable (whether on the applicable Stated
Maturity Date, upon acceleration or otherwise), or any other monetary Obligation
(other than overdue Reimbursement Obligations which shall bear interest as
provided in Section 2.6.2) of any Borrower shall have become due and payable,
the applicable Borrower shall pay, but only to the extent permitted by law,
interest (after as well as before judgment) on such amounts at a rate per annum
equal to (a) in the case of any overdue principal of Loans, overdue interest
thereon, overdue commitment fees or other overdue amounts in respect of Loans or
other obligations (or the related Commitments) under a particular Tranche, the
rate that would otherwise be applicable to Base Rate Loans (or, in the case of
Foreign Currency Loans denominated in a Foreign Currency other than Canadian
Dollars, LIBO Rate Loans having an Interest Period of one month beginning on the
date such amount shall have become due or the last day of the prior Interest
Period applicable thereto) under such Tranche pursuant to Section 3.2.1 plus 2%,
(b) in the case of Uncommitted Revolving Loans, the rate that would otherwise be
applicable to such Loans pursuant to clause (c) of Section 3.2.1 plus 2%, and
(c) in the case of other overdue monetary Obligations, the rate that would
otherwise be applicable to Revolving Loans maintained as Base Rate Loans
pursuant to Section 3.2.1 plus 2%.
SECTION 3.2.3. Payment Dates. Interest accrued on each Loan shall be
payable, in the currency in which such Loan was made, without duplication:
(a) on the Stated Maturity Date therefor;
(b) in the case of a LIBO Rate Loan or an Uncommitted Absolute
Rate Revolving Loan, on the date of any payment or prepayment, in whole
or in part, of principal outstanding on such Loan, to the extent of the
unpaid interest accrued through such date on the principal so paid or
prepaid;
76
<PAGE>
(c) with respect to Base Rate Loans, on each Quarterly
Payment Date occurring after the Effective Date;
(d) with respect to LIBO Rate Loans, on the last day of each
applicable Interest Period (and, if such Interest Period shall exceed
three months, at intervals of three months after the first day of such
Interest Period); and
(e) on that portion of any Loans the Stated Maturity Date of
which is accelerated pursuant to Section 8.2 or Section 8.3,
immediately upon such acceleration.
Interest accrued on Loans, Reimbursement Obligations or other monetary
Obligations arising under any Loan Document after the date such amount is due
and payable (whether on the Stated Maturity Date, upon acceleration or
otherwise) shall be payable upon demand.
SECTION 3.3. Fees. The Borrowers agree to pay the fees set forth in
this Section 3.3. All such fees shall be non-refundable.
SECTION 3.3.1. Commitment Fees. The Company agrees to pay to the
Administrative Agent for the account of each Lender that has a Revolving Loan
Commitment, for each day during the period (including any portion thereof when
any of the Lenders' Commitments are suspended by reason of the Company's
inability to satisfy any condition of Article V) commencing on the Effective
Date and continuing to but excluding the Revolving Loan Commitment Termination
Date, a commitment fee, in Dollars, on such Lender's Percentage of the unused
portion, whether or not then available, of the Revolving Loan Commitment Amount
(net of Letter of Credit Outstandings) for such day at a rate per annum equal to
the Applicable Commitment Fee for such day. Such commitment fee shall be payable
by the Company in arrears on each Quarterly Payment Date, commencing with the
first such day following the Effective Date, and on the Revolving Loan
Commitment Termination Date. The making of Swing Line Loans and Uncommitted
Revolving Loans shall not constitute usage of the Revolving Loan Commitment with
respect to the calculation of commitment fees to be paid by the Company to the
Lenders; provided, however, that the making of Uncommitted Revolving Loans by
any Lender shall constitute usage of such Lender's Percentage of the Revolving
Loan Commitment Amount for purposes of calculating the commitment fees payable
to such Lender. Any term or provision hereof to the contrary notwithstanding,
commitment fees payable for any period prior to the Effective Date shall be
payable in accordance with the Existing Credit Agreement. Payments by the
Company to the Swing Line Lender in respect of accrued interest on Swing Line
Loans shall be net of the commitment fee payable in respect of the Swing Line
Lender's Revolving Loan Commitment.
SECTION 3.3.2. Administrative Agent Fee. The Company agrees to pay an
annual administration fee to the Administrative Agent, for its own account, in
the amount set forth in the
77
<PAGE>
Administrative Agent Fee Letter, payable in advance on the Effective Date and
quarterly thereafter.
SECTION 3.3.3. Letter of Credit Fee. Each Borrower that shall have
requested the issuance of a Letter of Credit agrees to pay to the Administrative
Agent, for the pro rata account of the applicable Issuer and each other Lender
that has a Revolving Loan Commitment, a letter of credit fee, in Dollars, for
each day on which there shall be any Letters of Credit requested by it
outstanding (i) with respect to each standby Letter of Credit requested by it,
at a rate per annum equal to the then Applicable Margin for Committed Revolving
Loans maintained as LIBO Rate Loans on the Dollar Equivalent of the Stated
Amount of each such Letter of Credit outstanding on such day; and (ii) with
respect to each documentary Letter of Credit requested by it, 1.25% per annum on
the Dollar Equivalent of the Stated Amount of each such Letter of Credit
outstanding on such day, such fees being payable quarterly in arrears on each
Quarterly Payment Date. Each such Borrower further agrees to pay to the
applicable Issuer an issuance fee at such rates and on such dates as are agreed
between the Company and such Issuer.
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. LIBO Rate Lending Unlawful. If any Lender shall determine
(which determination shall, in the absence of manifest error, upon notice
thereof to the Borrowers and the Lenders, be conclusive and binding on the
Borrowers) that the introduction of or any change in or in the interpretation of
any law, in each case after (i) in the case of any such introduction or change
with respect to any Committed Loan, the date upon which such Lender shall have
become a Lender hereunder, and (ii) in the case of any such introduction or
change with respect to any Uncommitted Revolving Loan, the date upon which such
Lender submitted an Uncommitted Interest Quote in respect of such Uncommitted
Revolving Loan pursuant to Section 2.8, makes it unlawful, or any central bank
or other governmental authority asserts, after such date, that it is unlawful,
for such Lender to make, continue or maintain any Loan as, or to convert any
Loan into, a LIBO Rate Loan in any currency, the obligations of such Lender to
make, continue, maintain or convert any Loans as or to LIBO Rate Loans in such
currency shall, upon such determination, forthwith be suspended until such
Lender shall notify the Administrative Agent that the circumstances causing such
suspension no longer exist (with the date of such notice being the
"Reinstatement Date"), and (i) all LIBO Rate Loans in such currency previously
made by such Lender shall (A) in the case of Loans in Dollars or Canadian
Dollars, automatically convert into Base Rate Loans and (B) in the case of
Foreign Currency Loans other than Foreign Currency Loans in Canadian Dollars,
accrue interest at each applicable Lender's cost of funds in such currency, as
reasonably determined and as notified by such Lender to the Administrative Agent
and the Borrowers, plus the Applicable Margin in respect of such Foreign
Currency Loans, in each case at the end of the then current Interest Periods
with respect thereto or sooner, if
78
<PAGE>
required by such law or assertion and (ii) all Loans in such currency thereafter
made by such Lender and outstanding prior to the Reinstatement Date shall (A) in
the case of Loans in Dollars or Canadian Dollars, be made as Base Rate Loans,
with interest thereon being payable on the same date that interest is payable
with respect to the corresponding Borrowing of LIBO Rate Loans made by Lenders
not so affected, and (B) in the case of Foreign Currency Loans other than
Foreign Currency Loans in Canadian Dollars, accrue interest at each applicable
Lender's cost of funds in such currency, as reasonably determined and as
notified by such Lender to the Administrative Agent and the Borrowers, plus the
Applicable Margin in respect of such Foreign Currency Loans.
SECTION 4.2. Deposits Unavailable. If the Administrative Agent shall
have determined that (a) deposits in the relevant amount and currency and for
the relevant Interest Period are not available to the Administrative Agent in
its relevant market, or (b) by reason of circumstances affecting the
Administrative Agent's relevant market, adequate means do not exist for
ascertaining the interest rate applicable hereunder to LIBO Rate Loans in any
currency, then, upon notice from the Administrative Agent to the Borrowers and
the Lenders, the obligations of all Lenders under Section 2.3 and Section 2.4 to
make or continue any Loans in such currency as, or to convert any Loans in such
currency into, LIBO Rate Loans in such currency shall forthwith be suspended
and, in the case of Loans in Dollars, such Loans shall accrue interest at the
Base Rate plus the Applicable Margin in respect of such Loans and, in the case
of Foreign Currency Loans, such Loans shall accrue interest at each applicable
Lender's cost of funds in such currency, as reasonably determined and as
notified by such Lender to the Administrative Agent and the Borrowers, plus the
Applicable Margin in respect of such Foreign Currency Loans, in each case from
the end of the then current Interest Period applicable thereto, until the
Administrative Agent shall notify the Borrowers and the Lenders that the
circumstances causing such suspension no longer exist, and subsequent LIBO Rate
Loans in such currency shall be made at an interest rate equal to, in the case
of Loans in Dollars, the Base Rate plus the Applicable Margin in respect of such
Loans and, in the case of Foreign Currency Loans, each applicable Lender's cost
of funds in such currency, as reasonably determined and as notified by such
Lender to the Administrative Agent and the Borrowers, plus the Applicable Margin
in respect of such Foreign Currency Loans.
SECTION 4.3. Increased LIBO Rate Loan Costs, etc. Each Borrower agrees
to reimburse each Lender for any increase in the cost to such Lender of, or any
reduction in the amount of any sum receivable by such Lender in respect of,
making, continuing or maintaining (or of its obligation to make, continue or
maintain) any Loans to such Borrower as, or of converting (or of its obligation
to convert) any Loans to such Borrower into, LIBO Rate Loans (excluding any
amounts, whether or not constituting Taxes, referred to in Section 4.6) arising
as a result of any change in, or the introduction, adoption, effectiveness,
interpretation, reinterpretation or phase-in of, any law or regulation,
directive, guideline, decision or request (whether or not having the force of
law) of any court, central bank, regulator or other governmental authority that
occurs after (i) in the case of any such increased costs or reduced
79
<PAGE>
return in respect of any Committed Loan, the date upon which such Lender became
a Lender hereunder and (ii) in the case of any such increased costs or reduced
return in respect of any Uncommitted Revolving Loan, the date on which such
Lender submitted an Uncommitted Interest Quote with respect to such Uncommitted
Revolving Loan pursuant to Section 2.8. Such Lender shall promptly notify the
Administrative Agent and the Borrowers in writing of the occurrence of any such
event, such notice to state, in reasonable detail, the reasons therefor and the
additional amount required fully to compensate such Lender for such increased
cost or reduced amount. Such additional amounts shall be payable by the
applicable Borrower directly to such Lender within five days of its receipt of
such notice, and such notice shall, in the absence of manifest error, be
conclusive and binding on the Borrowers.
SECTION 4.4. Funding Losses. In the event any Lender shall incur any
loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to make, continue or maintain any portion of the principal amount of any Loan to
any Borrower as, or to convert any portion of the principal amount of any Loan
to such Borrower into, a LIBO Rate Loan, but excluding any loss of margin after
the date of any such conversion, repayment, prepayment or failure to borrow,
continue or convert) as a result of (a) any conversion or repayment or
prepayment of the principal amount of any LIBO Rate Loans to such Borrower on a
date other than the scheduled last day of the Interest Period applicable
thereto, whether pursuant to Section 3.1 or otherwise, (b) any Loans to such
Borrower not being borrowed as LIBO Rate Loans in accordance with the Borrowing
Request therefor, or (c) any Loans to such Borrower not being continued as, or
converted into, LIBO Rate Loans in accordance with the Continuation/ Conversion
Notice therefor, then, upon the written notice of such Lender to such Borrower
(with a copy to the Administrative Agent), such Borrower shall, within five days
of its receipt thereof, pay directly to such Lender such amount as will (in the
reasonable determination of such Lender) reimburse such Lender for such loss or
expense. Such written notice (which shall include calculations in reasonable
detail) shall, in the absence of manifest error, be conclusive and binding on
the Borrowers.
SECTION 4.5. Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other governmental authority, in each case occurring after (i) in the case of
any such change, introduction, adoption, effectiveness, interpretation,
reinterpretation or phase-in in respect of any Committed Loan, the date upon
which the applicable Lender became a Lender hereunder and (ii) in the case of
any such change, introduction, adoption, effectiveness, interpretation,
reinterpretation or phase-in in respect of any Uncommitted Revolving Loan, the
date upon which the applicable Lender submitted an Uncommitted Interest Quote in
respect of such Uncommitted Revolving Loan pursuant to Section 2.8, affects or
would affect the amount of capital required or expected to be maintained by any
Lender or any Person controlling such Lender, and such Lender determines (in its
sole and absolute discretion) that the rate of return on its or such controlling
Person's capital as a consequence of its Commitments, participation in
80
<PAGE>
Letters of Credit, the Loans made by such Lender, in each case to or at the
request of such Borrower, is reduced to a level below that which such Lender or
such controlling Person could have achieved but for the occurrence of any such
circumstance, then, in any such case upon notice from time to time by such
Lender to the Borrowers, such Borrower shall immediately pay directly to such
Lender additional amounts sufficient to compensate such Lender or such
controlling Person for such reduction in rate of return. A statement of such
Lender as to any such additional amount or amounts (including calculations
thereof in reasonable detail) shall, in the absence of manifest error, be
conclusive and binding on the Borrowers. In determining such amount, such Lender
may use any method of averaging and attribution that it (in its sole and
absolute discretion) shall deem applicable; provided, however, that such Lender
may not impose materially greater costs on the Borrowers than on other similarly
situated borrowers by virtue of any such averaging or attribution method.
SECTION 4.6. Taxes. (a) All payments by a Borrower of principal of, and
interest on, the Loans and all other amounts payable hereunder or under any
other Loan Document (including Reimbursement Obligations, fees and expenses)
shall be made free and clear of and without deduction for any present or future
income, excise, stamp or franchise taxes and other taxes, fees, duties,
withholdings or other charges of any nature whatsoever imposed by any taxing
authority from or through which payments originate or are made or deemed made by
or to such Borrower, but excluding (i) any income, excise, stamp or franchise
taxes and other similar taxes, fees, duties, withholdings or other charges
imposed on any Lender or either of the Agents by a jurisdiction under the laws
of which such Lender or Agent is organized or in which its principal executive
office is located, or otherwise as a result of a present or former connection
between the applicable lending office (or office through which it performs any
of its actions as Lender or Agent) of such Lender or Agent and the jurisdiction
of the governmental authority imposing such tax or any political subdivision or
taxing authority thereof or therein (other than any such connection arising
solely from such Agent or such Lender having executed, delivered or performed
its obligations or received a payment under, or taken any action to enforce,
this Agreement and any Note) and (ii) any income, excise, stamp or franchise
taxes and other similar taxes, fees, duties, withholdings or other charges to
the extent that they are in effect and would apply (x) as of the date any Person
becomes a Lender or Assignee Lender, to the extent such taxes, fees, duties,
withholdings or other charges relate to payments other than payments in respect
of any Uncommitted Revolving Loan, (y) as of the date on which such Lender
submitted an Uncommitted Interest Quote with respect to such Uncommitted
Revolving Loan pursuant to Section 2.8 to the extent such taxes, fees, duties,
withholdings or other charges become applicable as a result of or in connection
with any Uncommitted Revolving Loan, or (z) in either case as of the date that
any Lender changes its applicable lending office, to the extent such taxes
become applicable as a result of such change (other than a change in an
applicable lending office made pursuant to Section 4.10 below) (such
non-excluded items being called "Taxes"). In the event that any withholding or
deduction from any payment to be made by a Borrower hereunder is required in
respect of any Taxes pursuant to any applicable law, rule or regulation, then
such Borrower will (i) pay directly to the relevant taxing authority the full
amount required to be so
81
<PAGE>
withheld or deducted, (ii) promptly forward to the Administrative Agent an
official receipt or other documentation available to such Borrower reasonably
satisfactory to the Administrative Agent evidencing such payment to such
authority, and (iii) pay to the Administrative Agent for the account of the
Lenders such additional amount or amounts as is necessary to ensure that the net
amount actually received by each Lender will equal the full amount such Lender
would have received had no such withholding or deduction been required,
provided, however, that no Borrower shall be required to pay any such additional
amounts in respect of amounts payable to any Lender that is not organized under
the laws of the United States or a state thereof to the extent that the related
tax is imposed (or an exemption therefrom is not available) as a result of such
Lender or Agent failing to comply with the requirements of clause (b) of Section
4.6.
Moreover, if any Taxes are directly asserted against either of the
Agents or any Lender with respect to any payment received by such Agents or such
Lender from any Borrower hereunder, such Agents or such Lender may pay such
Taxes and such Borrower will promptly pay to such Person such additional amount
(including any penalties, interest or expenses) as is necessary in order that
the net amount received by such Person (including any Taxes on such additional
amount) shall equal the amount of such Taxes paid by such Person; provided,
however, that no Borrower shall be obligated to make payment to the Lenders or
the Agents (as the case may be) pursuant to this sentence in respect of
penalties or interest attributable to any Taxes, if written demand therefor has
not been made by such Lenders or the Agents within 60 days from the date on
which such Lenders or the Agents knew of the imposition of Taxes by the relevant
taxing authority or for any additional imposition which may arise from the
failure of the Lenders or the Agents to apply payments in accordance with the
tax law after the applicable Borrower has made the payments required hereunder;
provided, further, that no Borrower shall be required to pay any such additional
amounts in respect of any amounts payable to any Lender or any Agent (as the
case may be) that is not organized under the laws of the United States or a
state thereof to the extent the related Tax is imposed as a result of such
Lender failing to comply with the requirements of clause (b) of Section 4.6.
After the Lenders or the Agents (as the case may be) learn of the imposition of
Taxes, such Lenders and the Agents will act in good faith to notify the
Borrowers of their respective obligations hereunder as soon as reasonably
possible.
If any Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Administrative Agent, for the account
of the respective Lenders, the required receipts or other required documentary
evidence, such Borrower shall indemnify the Lenders for any incremental Taxes,
interest or penalties that may become payable by any Lender as a result of any
such failure.
(b) Each Non-U.S. Lender shall, (i) on or prior to the date of the
execution and delivery of this Agreement, in the case of each Lender listed on
the signature pages hereof, or, in the case of an Assignee Lender, on or prior
to the date it becomes a Lender, execute and deliver to the Borrowers and the
Administrative Agent, two or more (as the Borrowers or the Agents may reasonably
request) United States Internal Revenue Service Forms W-8ECI or Forms W-8BEN
82
<PAGE>
(or successor forms) establishing the Lender's exemption from United States
federal withholding tax, or, solely if such Lender is claiming exemption from
United States withholding tax under Section 871(h) or 881(c) of the Code with
respect to payments of "portfolio interest", United States Internal Revenue
Service Forms W-8BEN and a certificate signed by a duly authorized officer of
such Lender representing that such Lender is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code, or such other forms or documents (or successor
forms or documents), appropriately completed, establishing that payments to such
Lender are exempt from withholding or deduction of United States federal
withholding taxes; and (ii) deliver to the Borrowers and the Administrative
Agent two further copies of any such form or documents on or before the date
that any such form or document expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent such form or
document previously delivered by it to the Borrowers. Each Lender and each Agent
agrees, to the extent reasonable and without material cost to it, to provide to
the Borrowers and the Administrative Agent such other applicable forms or
certificates as would reduce or eliminate any Tax otherwise applicable.
(c) If any Borrower determines in good faith that a reasonable basis
exists for contesting the imposition of a Tax with respect to a Lender or either
of the Agents, the relevant Lender or Agent, as the case may be, shall cooperate
with such Borrower in challenging such Tax at such Borrower's expense if
requested by such Borrower; provided, however, that nothing in this Section 4.6
shall require any Lender or Agent to submit to the Borrowers or any Person any
tax returns or any part thereof, or to prepare or file any tax returns other
than as such Lender or Agent in its sole discretion shall determine.
(d) If a Lender or an Agent shall receive a refund (including any
offset or credits) from a taxing authority (as a result of any error in the
imposition of Taxes by such taxing authority) of any Taxes paid by any Borrower
pursuant to subsection 4.6(a) above, such Lender or such Agent (as the case may
be) shall promptly pay such Borrower the amount so received, with interest from
the taxing authority with respect to such refund, net of any tax liability
incurred by such Lender or Agent that is attributable to the receipt of such
refund and such interest.
(e) Each Lender and each Agent agrees, to the extent reasonable and
without material cost to it, to cooperate with the Borrowers to minimize any
amounts payable by the Borrowers under this Section 4.6; provided, however, that
nothing in this Section 4.6 shall require any Lender or Agent to take any action
which, in the sole discretion of such Lender or Agent, is inconsistent with its
internal policy and legal and regulatory restrictions.
(f) If any Borrower is required to pay additional amounts to or for the
account of any Lender or Agent pursuant to clause (a) of this Section 4.6 as a
result of a change of law occurring after the date hereof, then such Lender or
Agent, at the request of such Borrower, will change the jurisdiction of its
applicable lending office (or office through which it performs any of its
actions as Agent) if such change (i) would eliminate or reduce any such
additional payment which may
83
<PAGE>
thereafter accrue and (ii) is not, in the good faith determination of such
Lender or Agent, otherwise disadvantageous to such Lender or Agent.
SECTION 4.7. Payments, Computations, etc. Unless otherwise expressly
provided, all payments by or on behalf of a Borrower pursuant to any Loan
Document shall be made by such Borrower to the Administrative Agent for the pro
rata account of the Lender Parties entitled to receive such payment. All such
payments required to be made to the Administrative Agent shall be made, without
setoff, deduction or counterclaim, not later than 1:00 p.m., Chicago time (1:00
p.m., London time, in the case of Foreign Currency Loans other than Canadian
Dollar Loans) on the date due, in same day or immediately available funds, to
such account as the Administrative Agent shall specify from time to time by
notice to the Borrowers. Funds received after that time may be deemed by the
Administrative Agent to have been received by the Administrative Agent on the
next succeeding Business Day. The Administrative Agent shall promptly remit in
same day funds to each Lender Party, its share, if any, of such payments
received by the Administrative Agent for the account of such Lender Party. All
interest and fees shall be computed on the basis of the actual number of days
(including the first day but excluding the last day) occurring during the period
for which such interest or fee is payable over a year comprised of 360 days (or,
in the case of interest on a Base Rate Loan, 365 days or, if appropriate, 366
days). Whenever any payment to be made shall otherwise be due on a day which is
not a Business Day, such payment shall (except as otherwise required by clause
(i) of the definition of the term "Interest Period") be made on the next
succeeding Business Day and such extension of time shall be included in
computing interest and fees, if any, in connection with such payment. To the
extent the current market practice is to compute interest and/or fees in respect
of any Foreign Currency or any Loan denominated in any Foreign Currency in a
manner other than as set forth above, all interest and fees hereunder payable in
such Foreign Currency or with respect to Loans denominated in such Foreign
Currency shall be computed on the basis of such market practice, as certified to
the Borrowers by the Administrative Agent. For the purpose of the Interest Act
(Canada) and disclosure thereunder, whenever interest to be paid hereunder by
the Canadian Borrower is to be calculated on the basis of a year of 360 days or
any other period of time that is less than a calendar year, the yearly rate of
interest to which the rate determined pursuant to such calculation is equivalent
is the rate so determined multiplied by the actual number of days in the
calendar year in which the same is to be ascertained and divided by either 360
or such other period of time, as the case may be.
SECTION 4.8. Sharing of Payments; Canadian Collateral. (a) If any
Lender shall obtain any payment or other recovery (whether voluntary,
involuntary, by application of setoff or otherwise) on account of any Loan or
Reimbursement Obligation of a Borrower (other than pursuant to the terms of
Sections 4.3, 4.4 and 4.5) in excess of its pro rata share of payments then or
therewith obtained by all Lenders entitled thereto, such Lender shall purchase
from the other Lenders such participation in the Credit Extensions made by them
as shall be necessary to cause such purchasing Lender to share the excess
payment or other recovery ratably with each of them; provided, however, that if
all or any portion of the excess payment or other recovery is thereafter
84
<PAGE>
recovered from such purchasing Lender, the purchase shall be rescinded and each
Lender which has sold a participation to the purchasing Lender shall repay to
the purchasing Lender the purchase price to the ratable extent of such recovery
together with an amount equal to such selling Lender's ratable share (according
to the proportion of (i) the amount of such selling Lender's required repayment
to the purchasing Lender in respect of such recovery, to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
Each Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section may, to the fullest extent permitted by law,
exercise all its rights of payment (including pursuant to Section 4.9) with
respect to such participation as fully as if such Lender were the direct
creditor of such Borrower in the amount of such participation. If under any
applicable bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a setoff to which this Section applies, such Lender
shall, to the extent practicable, exercise its rights in respect of such secured
claim in a manner consistent with the rights of the Lenders entitled under this
Section to share in the benefits of any recovery on such secured claim.
(b) If, upon the exercise by the Administrative Agent of remedies in
respect of any Collateral (as defined in the applicable Pledge Agreement) in
accordance with the terms of any Pledge Agreement, sufficient funds are not made
available to fund the payments to be made to the Secured Parties in respect of
any of the Obligations described in such Pledge Agreement, the available funds
being applied with respect to any such Obligations shall be allocated in
accordance with the order of priority established by such Pledge Agreement to
the payment of such Obligations ratably, based on the proportion of each Secured
Party's interest in the aggregate outstanding Obligations described in such
clause; provided, however, in the event any Non-Participating Multicurrency
Lender's pro rata share of the Obligations allocable to outstanding Revolving
Loans and Letter of Credit Outstandings is less than its interest in the
aggregate outstanding Revolving Loans and Letter of Credit Outstandings, then
the Administrative Agent shall apply the available funds with respect to any
such outstanding Revolving Loans and Letter of Credit Outstandings first to the
Multicurrency Lenders in accordance with their respective Multicurrency
Percentages until each applicable Lender's remaining interest in such
outstanding Revolving Loans and Letter of Credit Outstandings is equal to such
Lender's pro rata share of such outstanding Revolving Loans and Letter of Credit
Outstandings (it being understood and agreed that such reallocation of amounts
shall not affect in any way the amount of available funds that are applied to
the Obligations owing in respect of the Term Loans). Notwithstanding the
foregoing proviso, in the event any Non-Participating Multicurrency Lender's pro
rata share of outstanding Revolving Loans and Letter of Credit Outstandings is
less than its interest in the aggregate outstanding Revolving Loans and Letter
of Credit Outstandings, the Administrative Agent may, and shall at the request
of the Multicurrency Lenders whose Multicurrency Percentages exceed 51%, require
each Non-Participating Multicurrency Lender (and each Non-Participating
Multicurrency hereby agrees) to purchase, without recourse or warranty, an
undivided interest and participation in the outstanding Revolving Loans
denominated in Dollars owing to the Multicurrency Lenders so that, after
85
<PAGE>
giving effect to such purchases, each applicable Lender's interest in the
outstanding Revolving Loans and Letter of Credit Outstandings is equal to such
Lender's pro rata share of such Obligations at the time of such purchase.
(c) Each Lender that has made Initial Canadian Term-B Loans agrees
that, to the extent any amount received in respect of Initial Canadian Term-B
Loans from the Canadian Borrower or from proceeds of the Collateral securing the
Initial Canadian Term-B Loans (as provided in the Canadian Collateral Documents)
at any time after an acceleration of the Obligations pursuant to Sections 8.2 or
8.3 would cause such Lender to receive more than its Aggregate Pro Rata Share of
all amounts received by the Lenders from the Borrowers and the Subsidiary
Guarantors or the Collateral after such acceleration, such Lender shall
purchase, without recourse or warranty, an undivided interest and participation
(which it shall be deemed to have done simultaneously upon the receipt of such
payment) in the outstanding Revolving Loans, Letter of Credit Outstandings,
Term-A Loans and U.S. Term-B Loans so that all such recoveries with respect to
the Initial Canadian Term-B Loans shall be applied ratably in accordance with
the Aggregate Pro Rata Shares of all the Lenders; provided, however, if all or
part of such excess payment received by such Lender is thereafter recovered from
it, those purchases shall be rescinded and the purchase prices paid for such
participation shall be returned to such Lender to the extent necessary to adjust
for such recovery, but without interest except to the extent such Lender is
required to pay interest in connection with such recovery. Each Lender
authorizes the Administrative Agent to make payments among the Lenders as
necessary to effect any such purchases by the Lenders that have made Initial
Canadian Term-B Loans pursuant to the preceding sentence. Each Borrower agrees
that any participation purchased by any Lender pursuant to this Section shall be
subject to the provisions of Section 11.11.12.
SECTION 4.9. Setoff. Each Lender shall, upon the occurrence of any
Event of Default described in clauses (b) through (d) of Section 8.1.9 with
respect to any Borrower (other than a Subsidiary that is not a Material
Subsidiary) or, with the consent of the Required Lenders, upon the occurrence of
any other Event of Default, to the fullest extent permitted by law, have the
right to appropriate and apply to the payment of the Obligations then due to it,
and (as security for such Obligations) such Borrower hereby grants to each
Lender a continuing security interest in, any and all balances, credits,
deposits, accounts or moneys of such Borrower then or thereafter maintained with
or otherwise held by such Lender; provided, however, that any such appropriation
and application shall be subject to the provisions of Section 4.8. Each Lender
agrees promptly to notify the Borrowers and the Administrative Agent after any
such setoff and application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of such setoff and
application. The rights of each Lender under this Section are in addition to
other rights and remedies (including other rights of setoff under applicable law
or otherwise) which such Lender may have.
SECTION 4.10. Mitigation. Each Lender agrees that if it makes any
demand for payment under Sections 4.3, 4.4, 4.5, or 4.6, or if any adoption or
change of the type described in
86
<PAGE>
Section 4.1 shall occur with respect to it, it will use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions and
so long as such efforts would not be disadvantageous to it, as determined in its
sole discretion) to designate a different lending office if the making of such a
designation would reduce or obviate the need for any Borrower to make payments
under Section 4.3, 4.4, 4.5, or 4.6, or would eliminate or reduce the effect of
any adoption or change described in Section 4.1.
SECTION 4.11. Replacement of Lenders. Each Lender hereby severally
agrees as set forth in this Section. If any Lender (a "Subject Lender") (i)
makes demand upon a Borrower for (or if a Borrower is otherwise required to pay)
amounts pursuant to Section 4.3, 4.5 or 4.6, (ii) gives notice pursuant to
Section 4.1 requiring a conversion of such Subject Lender's LIBO Rate Loans to
Base Rate Loans or any other change in the basis upon which interest is to
accrue in respect of such Subject Lender's LIBO Rate Loans or suspending such
Lender's obligation to make Loans as, or to convert Loans into, LIBO Rate Loans,
(iii) becomes a Non-Consenting Lender or (iv) becomes a Non-Funding Lender, the
Company may, within 180 days of receipt by such Borrower of such demand or
notice (or the occurrence of such other event causing such Borrower to be
required to pay such compensation) or within 180 days of such Lender becoming a
Non-Consenting Lender or a Non-Funding Lender, as the case may be, give notice
(a "Replacement Notice") in writing to the Agents and such Subject Lender of its
intention to replace such Subject Lender with a financial institution (a
"Replacement Lender") designated in such Replacement Notice. If the Agents
shall, in the exercise of their reasonable discretion and within 30 days of
their receipt of such Replacement Notice, notify the Company and such Subject
Lender in writing that the designated financial institution is satisfactory to
the Agents (such consent not being required where the Replacement Lender is
already a Lender), then such Subject Lender shall, subject to the payment of any
amounts due pursuant to Section 4.4, assign, in accordance with Section 11.11.1,
all of its Commitments, Loans and other rights and obligations under this
Agreement and all other Loan Documents (including Reimbursement Obligations) to
such designated financial institution; provided, however, that (i) such
assignment shall be without recourse, representation or warranty and shall be on
terms and conditions reasonably satisfactory to such Subject Lender and such
designated financial institution and (ii) the purchase price paid by such
designated financial institution shall be in the amount of such Subject Lender's
Loans and its Percentage in respect of the Revolving Loan Commitments of all
outstanding Reimbursement Obligations as to which such Lender shall have made
payments pursuant to Section 2.6.1, together with all accrued and unpaid
interest and fees in respect thereof, plus all other amounts (including the
amounts demanded and unreimbursed under Sections 4.3, 4.5 and 4.6), owing to
such Subject Lender hereunder. Upon the effective date of an assignment
described above, the designated financial institution or Replacement Lender
shall become a "Lender" for all purposes under this Agreement and the other Loan
Documents.
87
<PAGE>
ARTICLE V
CONDITIONS TO EFFECTIVENESS AND
TO FUTURE CREDIT EXTENSIONS
SECTION 5.1. Effectiveness. The amendment and restatement of the
Existing Credit Agreement and the obligations of the Lenders to continue
Existing Loans as Loans under this Agreement shall be subject to the prior or
concurrent satisfaction of each of the conditions precedent set forth in this
Section 5.1.
SECTION 5.1.1. Resolutions, etc. The Agents shall have received from
each Obligor a certificate, dated the Effective Date, of its Secretary or
Assistant Secretary as to (a) resolutions of its Board of Directors then in full
force and effect authorizing the execution, delivery and performance of each
Loan Document to be executed by it, and (b) the incumbency and signatures of
those of its officers authorized to act with respect to each Loan Document
executed by it, upon which certificate each Agent and each Lender may
conclusively rely until it shall have received a further certificate of the
Secretary or Assistant Secretary of such Obligor canceling or amending such
prior certificate.
SECTION 5.1.2. Delivery of Notes. The Agents shall have received a Note
in respect of each applicable Tranche, for each Lender that has requested a Note
of such Tranche, duly executed and delivered by each applicable Borrower.
SECTION 5.1.3. Subsidiary Guaranty. The Agents shall have received the
Subsidiary Guaranty, dated as of the Effective Date, duly executed and delivered
by an Authorized Officer of each U.S. Subsidiary of the Company and that is in
existence on the Effective Date (after giving effect to the Transaction).
SECTION 5.1.4. Pledge Agreements, etc. The Agents shall have received:
(a) the Holdco Guaranty and Pledge Agreement, dated as of the
Effective Date, duly executed by an Authorized Officer of Holdco,
together with the certificates evidencing all of the issued and
outstanding shares of Capital Stock of the Company, which certificates
shall in each case be accompanied by undated powers of transfer duly
executed in blank; and
(b) the Company Pledge and Security Agreement and the
Subsidiary Pledge and Security Agreement, each dated as of the
Effective Date, duly executed and delivered by an Authorized Officer of
the Company and each U.S. Subsidiary that is a Restricted Subsidiary,
as applicable, together with
88
<PAGE>
(i) the certificates evidencing all of the issued and
outstanding shares of Capital Stock pledged pursuant to the
applicable Pledge Agreement, which certificates shall in each
case be accompanied by undated powers of transfer duly
executed in blank, or, if any such shares of Capital Stock of
a U.S. Subsidiary of such Obligor pledged pursuant to such
Pledge Agreement are uncertificated securities or are held
through a securities intermediary, the Administrative Agent
shall have obtained "control" (as defined in the UCC) over
such shares of Capital Stock, and such other instruments and
documents as the Administrative Agent shall deem necessary or
in the reasonable opinion of the Administrative Agent
desirable under applicable law to perfect the security
interest of the Administrative Agent in such shares of Capital
Stock;
(ii) all promissory notes evidencing intercompany
Indebtedness payable to the Company or any Subsidiary
Guarantor duly endorsed to the order of the Administrative
Agent;
(iii) except to the extent previously filed under the
Existing Credit Agreement and not terminated, executed UCC
financing statements (Form UCC-1) naming such Obligor as the
debtor and the Administrative Agent as the secured party, or
other similar instruments or documents, suitable for filing
under the UCC of all jurisdictions as may be necessary or, in
the opinion of the Agents, desirable to perfect the security
interest of the Administrative Agent in the interests of such
Obligor in the Collateral pledged pursuant to the applicable
Pledge Agreement (provided, however, that perfection of
security interests in (1) motor vehicles shall not be required
and (ii) certain intellectual property owned as of the
Effective Date by the Company or its U.S. Subsidiaries shall
be completed in accordance with Section 7.1.11); and
(iv) executed copies of proper UCC termination
statements (Form UCC-3), if any, necessary to release all
Liens and other rights of any Person (other than Liens
permitted under Section 7.2.3)
(A) in any Collateral described in the
applicable Pledge Agreement previously granted by any
Person, and
(B) securing any of the Indebtedness to be
repaid in connection with the Transaction on or prior
to the Effective Date,
together with such other UCC termination statements (Form
UCC-3) as the Agents may reasonably request from such Obligor.
89
<PAGE>
SECTION 5.1.5. Closing Fees, Expenses, etc. The Agents and the Lead
Arranger shall have received, each for its own respective account, or, in the
case of the Administrative Agent, for the account of each Lender, as the case
may be, all fees, costs and expenses due and payable pursuant to Sections 3.3
and 11.3, if then invoiced.
SECTION 5.1.6. UCC Filing Service. All UCC financing statements (Form
UCC-1), termination statements (Form UCC-3) or other similar financing
statements, if any, required pursuant to the Loan Documents (collectively, the
"Filing Statements") shall have been made available on the Effective Date to CT
Corporation System or another similar filing service company reasonably
acceptable to the Agents (the "Filing Agent"). The Filing Agent shall have
acknowledged in writing reasonably satisfactory to the Agents and their counsel
(i) the Filing Agent's receipt of all such Filing Statements, (ii) that such
Filing Statements have either been submitted for filing in the appropriate
filing offices therefor or will be submitted for filing in such appropriate
offices within ten days of the Effective Date and (iii) that the Filing Agent
will notify the Agents and their counsel of the result of such submissions
within 30 days of the Effective Date.
SECTION 5.1.7. Opinions of Counsel. The Agents shall have received
opinions, dated the Effective Date and addressed to the Agents and all Lenders,
from
(a) Davis Polk & Wardwell, special New York counsel to each
of the Obligors, in form and substance satisfactory to the
Agents;
(b) Sorokin, Gross & Hyde, special Connecticut counsel to
the Obligors, in form and substance satisfactory to the Agents;
(c) Barley, Snyder, Senft & Cohen, special Pennsylvania
counsel to the Obligors, in form and substance satisfactory to
the Agents; and
(d) Ogilvy Renault S.E.N.C., special Canadian counsel to the
Obligors, in form and substance satisfactory to the Agents.
SECTION 5.1.8. Solvency, etc. The Agents shall have received a solvency
certificate (the "Solvency Certificate") from an Authorized Officer that is the
chief financial or accounting officer of the Company, dated the Effective Date,
substantially in the form of Exhibit J hereto.
SECTION 5.1.9. Effective Date Certificate. The Agents shall have
received the Effective Date Certificate, dated the Effective Date, duly executed
and delivered by an Authorized Officer that is the president, the chief
executive officer or the chief financial or accounting officer of the Company.
All documents and agreements required to be appended to the Effective Date
Certificate shall be in form and substance satisfactory to the Administrative
Agent.
90
<PAGE>
SECTION 5.1.10. Transaction Documents. The Agents shall have received
(with copies for each Lender that shall have expressly requested copies thereof)
copies of fully executed versions of the Transaction Documents, certified to be
true and complete copies thereof by an Authorized Officer of the Company. The
Transaction Agreement shall be in full force and effect and shall not have been
modified or waived in any material respect, nor shall there have been any
forbearance to exercise any material rights with respect to any of the terms or
provisions relating to the conditions to the consummation of the Divestiture as
set forth in the Transaction Agreement unless otherwise agreed to by the
Required Lenders.
SECTION 5.1.11. Consummation of Transaction. The Agents shall have
received evidence satisfactory to each of them that all actions necessary to
consummate the Divestiture shall have been taken (provided, however, that the
consummation of the sale of 51% of the Capital Stock of Dalian may be deferred
by up to 12 months after the Effective Date) and the Company shall have received
not less than $147,000,000 (less the amount of purchase price and post-closing
adjustments pursuant to the Transaction Agreement) in gross proceeds in respect
thereof.
SECTION 5.1.12. Financial Information, etc. The Agents shall have
received,
(a) the (i) audited consolidated balance sheets of the Company
as at December 31, 1998 and December 31, 1999 and audited consolidated
statements of operations and cash flows of the Company for the years
ended December 31, 1997, December 31, 1998 and December 31, 1999 and
(ii) an unaudited consolidated balance sheet of the Company as at the
end of the Fiscal Quarter ended on or about March 31, 2000 and related
unaudited consolidated statements of operations for such Fiscal Quarter
and the portion of the Fiscal Year then ended and unaudited
consolidated statement of cash flows for the portion of the Fiscal Year
then ended (collectively, the "Base Financial Statements"); and
(b) a pro forma consolidated balance sheet of the Company, as
of March 31, 2000 (the "Pro Forma Financial Statements"), certified by
the chief financial or accounting Authorized Officer of the Company,
giving effect to the consummation of the Transaction and reflecting the
proposed capital structure of the Company and its Subsidiaries.
SECTION 5.1.13. Payment of Outstanding Indebtedness, etc. All
Indebtedness identified in Item 7.2.2(a)(ii) ("Indebtedness to be Paid") of the
Disclosure Schedule, together with all interest, all prepayment premiums and
other amounts due and payable with respect thereto, shall have been paid in full
from the proceeds of the initial Credit Extension and the commitments in respect
of such Indebtedness shall have been terminated, and all Liens securing payment
of any such Indebtedness have been released.
91
<PAGE>
SECTION 5.1.14. Litigation. There shall exist no pending or threatened
material litigation, proceedings or investigations which (a) could reasonably be
expected to materially, adversely affect the consummation of the Transaction or
(b) could reasonably be expected to have a Material Adverse Effect.
SECTION 5.1.15. Insurance. The Agents shall have received satisfactory
evidence of the existence of insurance in compliance with Section 7.1.4
(including all endorsements included therein), and the Administrative Agent
shall be named additional insured or loss payee, on behalf of the Lenders,
pursuant to documentation reasonably satisfactory to the Agents and the Company.
SECTION 5.1.16. Satisfactory Legal Form. All documents executed or
submitted pursuant hereto by or on behalf of any Obligor, shall be reasonably
satisfactory in form and substance to the Agents and their counsel; the Agents
and their counsel shall have received all information, approvals, opinions,
documents or instruments that the Agents or their counsel shall have reasonably
requested.
SECTION 5.2. All Credit Extensions. The obligation of each Lender and,
if applicable, the Issuer, to make any Credit Extension (other than a Revolving
Loan made pursuant to clause (b) of Section 2.3.2) shall be subject to the
satisfaction of each of the conditions precedent set forth in this Section 5.2.
SECTION 5.2.1. Compliance with Warranties, No Default, etc. Both before
and after giving effect to any Credit Extension the following statements shall
be true and correct:
(a) the representations and warranties set forth in Article VI
and in each other Loan Document shall, in each case, be true and
correct in all material respects with the same effect as if then made
(unless stated to relate solely to an earlier date, in which case such
representations and warranties shall be true and correct in all
material respects as of such earlier date);
(b) in the case of a Revolving Loan, Swing Line Loan or Letter
of Credit Issuance, the sum of (i) the aggregate outstanding principal
amount of all Revolving Loans, after converting the aggregate
outstanding principal amount of all Foreign Currency Revolving Loans to
the Dollar Equivalent thereof, and all Swing Line Loans plus (ii) the
aggregate amount of all Letter of Credit Outstandings does not exceed
the then existing Revolving Loan Commitment Amount;
92
<PAGE>
(c) in the case of an Uncommitted Revolving Loan that is a
Foreign Currency Loan, the aggregate outstanding principal amount of
all Uncommitted Revolving Loans that are Foreign Currency Loans, after
converting the aggregate outstanding principal thereof to the Dollar
Equivalent thereof, does not exceed the Uncommitted Foreign Currency
Sublimit;
(d) in the case of a Committed Revolving Loan that is a
Foreign Currency Loan, the sum of (i) the aggregate outstanding
principal of all Committed Revolving Loans that are Foreign Currency
Loans, after converting the aggregate outstanding principal amount
thereof to the Dollar Equivalent thereof, plus (ii) aggregate amount of
all Foreign Currency Letter of Credit Outstandings, after converting
the aggregate Stated Amount thereof and the aggregate unpaid and
outstanding Reimbursement Obligations in respect thereof to the Dollar
Equivalent thereof, does not exceed the Committed Foreign Currency
Sublimit; and
(e) no Default shall have then occurred and be continuing.
SECTION 5.2.2. Credit Extension Request. Subject to Section 2.3.2, the
Administrative Agent shall have received a Borrowing Request if Loans are being
requested, or an Issuance Request if a Letter of Credit is being requested or
extended. Each of the delivery of a Borrowing Request or Issuance Request and
the acceptance by the applicable Borrower of proceeds of any Credit Extension
shall constitute a representation and warranty by the Company that on the date
of such Credit Extension (both immediately before and after giving effect
thereto and the application of the proceeds thereof) the statements made in
Section 5.2.1 are true and correct.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders, the Issuers and the Agents to enter
into this Agreement, continue the Existing Loans as Loans hereunder and to make
Credit Extensions hereunder, the Company represents and warrants unto the
Agents, the Issuers and each Lender as set forth in this Article VI.
SECTION 6.1. Organization, etc. The Company and each of its Restricted
Subsidiaries (a) is validly organized and existing and in good standing to the
extent required under the laws of the jurisdiction of its incorporation, except
to the extent that the failure to be in good standing would not reasonably be
expected to have a Material Adverse Effect, (b) is duly qualified to do business
and is in good standing to the extent required under the laws of each
jurisdiction where the nature of its business requires such qualification,
except to the extent that the failure to
93
<PAGE>
qualify would not reasonably be expected to result in a Material Adverse Effect,
and (c) has full power and authority and holds all requisite governmental
licenses, permits and other approvals to (i) enter into and perform its
obligations in connection with the Transaction and its Obligations under the
Loan Documents to which it is a party and (ii) own and hold under lease its
property and to conduct its business substantially as currently conducted by it
except, in the case of this clause (c)(ii), where the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 6.2. Due Authorization, Non-Contravention, etc. The execution,
delivery and performance by each Obligor of each Loan Document executed or to be
executed by it, and the Company's and, where applicable, each other Obligor's
participation in the consummation of the Transaction, are within the Company's
and each such Obligor's company powers, have been duly authorized by all
necessary company action, and do not (a) contravene any Obligor's Charter
Documents, (b) contravene any contractual restriction (other than any such
contractual restriction that shall have been waived on or prior to the Effective
Date), law or governmental regulation or court decree or order binding on or
affecting the Company or any such Obligor, where such contravention,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, or (c) result in, or require the creation or imposition
of, any Lien on any Obligor's properties, except pursuant to the terms of a Loan
Document.
SECTION 6.3. Government Approval, Regulation, etc. No authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other Person, is required for the due execution,
delivery or performance by any Obligor of any Loan Document to which it is a
party, except as have been duly obtained or made and are in full force and
effect or those which the failure to obtain or make could not reasonably be
expected to have a Material Adverse Effect. All authorizations, approvals and
other actions by, and all notices to and filings with, any governmental
authority or regulatory body that are required pursuant to the Transaction
Agreement in connection with the Transaction have been duly obtained or made and
are in full force and effect, except those which the failure to obtain or make
could not reasonably be expected to have a Material Adverse Effect. No Obligor
is an "investment company" within the meaning of the Investment Company Act of
1940, as amended, or a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
SECTION 6.4. Validity, etc. This Agreement constitutes, and each other
Loan Document executed by any Borrower will, on the due execution and delivery
thereof, constitute, the legal, valid and binding obligations of such Borrower
enforceable in accordance with their respective terms; and each Loan Document
executed pursuant hereto by each other Obligor will, on the due execution and
delivery thereof by such Obligor, be the legal, valid and binding obligation of
such Obligor enforceable in accordance with its terms, in each case with respect
to this Section 6.4 subject to the effects of bankruptcy, insolvency, fraudulent
conveyance,
94
<PAGE>
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.
SECTION 6.5. Financial Information. The Base Financial Statements and
the Pro Forma Financial Statements have been prepared (a) in the case of the
Base Financial Statements, in accordance with GAAP consistently applied, (b) in
the case of the Pro Forma Financial Statements, on a basis substantially
consistent with the basis used to prepare the Base Financial Statements. The
Base Financial Statements present fairly the combined financial condition of the
corporations covered thereby as at the date thereof and the results of their
operations for the periods then ended. The Pro Forma Financial Statements
include appropriate pro forma adjustments to give pro forma effect to the
Transaction.
SECTION 6.6. No Material Adverse Change. Since March 31, 2000, there
has occurred no event, circumstance or condition that constitutes a Material
Adverse Effect.
SECTION 6.7. Litigation, etc. There is no pending or, to the knowledge
of the Company, threatened litigation, action, proceeding, arbitration or
governmental investigation affecting any Obligor, or any of their respective
properties, businesses, assets or revenues, which could reasonably be expected
to result in a Material Adverse Effect except as disclosed in Item 6.7
("Litigation") of the Disclosure Schedule. No development has occurred in any
litigation, action or governmental investigation or other proceeding disclosed
in Item 6.7 ("Litigation") of the Disclosure Schedule which could reasonably be
expected to have a Material Adverse Effect.
SECTION 6.8. Subsidiaries. After giving effect to the consummation of
the Transaction, the Company has only those Subsidiaries (a) which are
identified in Item 6.8 ("Existing Subsidiaries") of the Disclosure Schedule, or
(b) which are permitted to have been acquired in accordance with Section 7.2.5
or 7.2.8.
SECTION 6.9. Ownership of Properties. Except to the extent that the
failure to do so could not reasonably be expected to have a Material Adverse
Effect, the Company and each Restricted Subsidiary owns good title to, or
leasehold interests in, all of its properties and assets, real and personal,
tangible and intangible, of any nature whatsoever (including patents,
trademarks, trade names, service marks and copyrights), free and clear of all
Liens or material claims (including material infringement claims with respect to
patents, trademarks, copyrights and the like), except as permitted pursuant to
Section 7.2.3.
SECTION 6.10. Taxes. Each of Holdco, the Company and each of their
respective Subsidiaries has filed all Federal, State and other material tax
returns required by law to have been filed by it and has paid all material taxes
and governmental charges thereby shown to be owing, except any such taxes or
charges which are being contested in good faith by appropriate
95
<PAGE>
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books.
SECTION 6.11. Pension and Welfare Plans. During the
twelve-consecutive-month period prior to the date of the execution and delivery
of this Agreement, no steps have been taken to terminate any Pension Plan, and
no contribution failure has occurred with respect to any Pension Plan sufficient
to give rise to a Lien under section 302(f) of ERISA, which, in either case, is
reasonably expected to lead to a liability to such Pension Plan in excess of
$5,000,000. No condition exists or event or transaction has occurred with
respect to any Pension Plan which could reasonably be expected to result in the
incurrence by the Company or any member of the Controlled Group of any material
liability, fine or penalty other than such condition, event or transaction which
would not reasonably be expected to have a Material Adverse Effect. Except as
disclosed in Item 6.11 ("Employee Benefit Plans") of the Disclosure Schedule or
otherwise approved by the Agents (such approval not to be unreasonably withheld
or delayed), since the date of the most recent financial statement delivered
pursuant to the terms of this Agreement the Company has not increased any
contingent liability with respect to any post-retirement benefit under a Welfare
Plan, other than liability for continuation coverage described in Part 6 of
Subtitle B of Title I of ERISA, except as would not have a Material Adverse
Effect.
SECTION 6.12. Environmental Matters. Except as set forth in Item 6.12
("Environmental Matters") of the Disclosure Schedule or as, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect:
(a) all facilities and property owned or leased by the Company
or any of its Subsidiaries are, and continue to be, owned or leased by
the Company and its Subsidiaries in compliance with all Environmental
Laws;
(b) there are no pending or threatened (i) written claims,
complaints, notices or requests for information received by the Company
or any of its Subsidiaries with respect to any alleged violation of any
Environmental Law, or (ii) written complaints, notices or inquiries to
the Company or any of its Subsidiaries regarding potential liability
under any Environmental Law;
(c) the Company and its Subsidiaries have been issued and are
in compliance with all permits, certificates, approvals, licenses and
other authorizations relating to environmental matters and necessary or
desirable for their businesses;
(d) no property now or, to the best knowledge of the Company,
previously owned or leased by the Company or any of its Subsidiaries is
listed or, to the knowledge of the Company, proposed for listing (with
respect to owned property only) on the National Priorities List
pursuant to CERCLA, on the CERCLIS or on any similar state list of
sites requiring investigation or clean-up;
96
<PAGE>
(e) to the knowledge of the Company, the Company and its
Subsidiaries have not directly transported or directly arranged for the
transportation of any Hazardous Material to any location (i) which is
listed or, to the knowledge of the Company, proposed for listing on the
National Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar state list, or (ii) which is the subject of federal, state or
local enforcement actions or other investigations in respect of any
Environmental Law;
(f) to the knowledge of the Company, there are no underground
storage tanks, active or abandoned, including petroleum storage tanks,
on or under any property now or previously owned or leased by the
Company or any of its Subsidiaries;
(g) to the knowledge of the Company, there are no
polychlorinated biphenyls or friable asbestos present in a manner or
condition requiring remedial action to comply with any Environmental
Law; and
(h) to the best knowledge of the Company, no conditions exist
at, on or under any property now or previously owned or leased by the
Company or any of its Subsidiaries which, with the passage of time, or
the giving of notice or both, would give rise to liability to the
Company or any of its Subsidiaries under any Environmental Law.
SECTION 6.13. Regulations U and X. Neither Holdco nor any of the
Borrowers is engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock, and no proceeds of any Credit Extension
will be used in violation of F.R.S. Board Regulation U or X. Terms for which
meanings are provided in F.R.S. Board Regulation U or X or any regulations
substituted therefor, as from time to time in effect, are used in this Section
with such meanings.
SECTION 6.14. Accuracy of Information. All material factual information
concerning the financial condition, operations or prospects of the Company,
Holdco and their respective Subsidiaries heretofore or contemporaneously
furnished by or on behalf of the Company in writing to any Lender Party for
purposes of or in connection with this Agreement or any transaction contemplated
hereby or with respect to the Transaction is, and all other such factual
information hereafter furnished by or on behalf of the Company, Holdco or any of
their respective Subsidiaries to such Lender Party will be, taken as a whole,
true and accurate in every material respect on the date as of which such
information is dated or certified and such information is not, or shall not be,
as the case may be, taken as a whole, incomplete by omitting to state any fact
necessary to make such information not materially misleading.
Any term or provision of this Section to the contrary notwithstanding,
insofar as any of the factual information described above includes assumptions,
estimates, projections or opinions, no representation or warranty is made herein
with respect thereto; provided, however, that to the extent any such
assumptions, estimates, projections or opinions are based on factual matters,
the
97
<PAGE>
Company has reviewed such factual matters and nothing has come to its attention
in the context of such review which would lead it to believe that such factual
matters were not or are not true and correct in all material respects or that
such factual matters omit to state any material fact necessary to make such
assumptions, estimates, projections or opinions not misleading in any material
respect.
SECTION 6.15. Solvency. The Transaction (including the incurrence of
the initial Credit Extension hereunder, the execution and delivery by each
Subsidiary Guarantor of the Subsidiary Guaranty and the application of the
proceeds of the Credit Extensions), will not involve or result in any fraudulent
transfer or fraudulent conveyance under the provisions of Section 548 of the
Bankruptcy Code (11 U.S.C. ss.101 et seq., as from time to time hereafter
amended, and any successor or similar statute) or any applicable state law
respecting fraudulent transfers or fraudulent conveyances. On the Effective
Date, after giving effect to the Transaction, the Company is Solvent.
ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenants. The Company agrees with the Agents,
the Issuers and each Lender that, until the Termination Date has occurred, the
Company will perform the obligations set forth below.
SECTION 7.1.1. Financial Information, Reports, Notices, etc. The
Company will furnish, or will cause to be furnished, to each Lender and each
Agent copies of the following financial statements, reports, notices and
information:
(a) as soon as available and in any event within 60 days after
the end of each of the first three Fiscal Quarters of each Fiscal Year
of the Company (or, if the Company is required to file such information
on a Form 10-Q with the Securities and Exchange Commission, promptly
following such filing), a consolidated balance sheet of the Company and
its Subsidiaries as of the end of such Fiscal Quarter, together with
the related consolidated statement of operations for such Fiscal
Quarter and the related consolidated statements of operations and cash
flows for the period commencing at the end of the previous Fiscal Year
and ending with the end of such Fiscal Quarter (it being understood
that the foregoing requirement may be satisfied by delivery of the
Company's report to the Securities and Exchange Commission on Form
10-Q, if any), certified by an Authorized Officer that is the
president, chief executive officer, treasurer, assistant treasurer,
controller or chief financial or accounting officer of the Company;
98
<PAGE>
(b) as soon as available and in any event within 105 days
after the end of each Fiscal Year of the Company (or, if the Company is
required to file such information on a Form 10-K with the Securities
and Exchange Commission, promptly following such filing), a copy of the
annual audit report for such Fiscal Year for the Company and its
Subsidiaries, including therein a consolidated balance sheet for the
Company and its Subsidiaries as of the end of such Fiscal Year,
together with the related consolidated statements of operations and
cash flows for such Fiscal Year (it being understood that the foregoing
requirement may be satisfied by delivery of the Company's report to the
Securities and Exchange Commission on Form 10-K, if any), in each case
certified (without any Impermissible Qualification) by KPMG LLP or
another "Big Five" firm of independent public accountants, together
with a certificate from such accountants as to whether, in making the
examination necessary for the signing of their report on such annual
report by such accountants, they have become aware of any Default in
respect of any term, covenant, condition or other provision of this
Agreement (including any Default in respect of any of the financial
covenants contained in Section 7.2.4) that relates to accounting
matters that has occurred and is continuing or, if in the opinion of
such accounting firm such a Default has occurred and is continuing, a
statement as to the nature thereof;
(c) together with the delivery of the financial information
required pursuant to clauses (a) and (b), a Compliance Certificate,
executed by an Authorized Officer that is the president, the chief
executive officer or the chief financial or accounting officer of the
Company;
(d) as soon as possible and in any event within five Business
Days after any executive or financial officer of the Borrower obtains
knowledge of the occurrence of any Default, if such Default is then
continuing, a statement of an Authorized Officer that is the president,
chief executive officer, treasurer, assistant treasurer, controller or
chief financial or accounting officer of the Company setting forth
details of such Default and the action which the Company has taken or
proposes to take with respect thereto;
(e) promptly and in any event within five Business Days after
(A) the occurrence of any development with respect to any litigation,
action, proceeding or labor controversy described in Section 6.7 which
could reasonably be expected to have a Material Adverse Effect or (B)
the commencement of any labor controversy, litigation, action or
proceeding of the type described in Section 6.7, notice thereof and of
the action which the Company has taken or proposes to take with respect
thereto;
(f) promptly after the sending or filing thereof, copies of
all reports and registration statements (other than exhibits thereto
and any registration statement on Form S-8 or its equivalent) which the
Company or any of its Subsidiaries files with the Securities and
Exchange Commission or any national securities exchange;
99
<PAGE>
(g) as soon as practicable after the controller, chief
financial or accounting officer or the chief executive officer of the
Company or a member of the Company's Controlled Group becomes aware of
(i) formal steps in writing to terminate any Pension Plan or (ii) the
occurrence of any event with respect to a Pension Plan which, in the
case of clause (i) or (ii), could reasonably be expected to result in a
contribution to such Pension Plan by (or a liability to) the Company or
a member of the Company's Controlled Group in excess of $5,000,000,
(iii) the failure to make a required contribution to any Pension Plan
if such failure is sufficient to give rise to a Lien under section
302(f) of ERISA in an amount in excess of $5,000,000, (iv) the taking
of any action with respect to a Pension Plan which could reasonably be
expected to result in the requirement that the Company furnish a bond
to the PBGC or such Pension Plan in an amount in excess of $5,000,000
or (v) any material increase in the contingent liability of the Company
with respect to any post-retirement Welfare Plan benefit as a result of
a change in the level or scope of benefits thereunder, notice thereof
and copies of all documentation relating thereto;
(h) concurrently with the delivery of the financial
information required pursuant to clauses (a) and (b), the Company will
notify the Administrative Agent of any changes in GAAP that resulted in
a different calculation in the financial statements than would have
resulted had GAAP not changed; and
(i) such other information respecting the condition or
operations, financial or otherwise, of the Company or any of its
Subsidiaries as any Lender through the Administrative Agent may from
time to time reasonably request.
SECTION 7.1.2. Compliance with Laws, etc. The Company will, and will
cause each of its Subsidiaries to, comply in all material respects with all
applicable laws, rules, regulations and orders, such compliance to include (a)
except as otherwise permitted under Section 7.2.8, the maintenance and
preservation of its existence and qualification as a foreign business entity,
except where the failure to so qualify could not reasonably be expected to have
a Material Adverse Effect, and (b) the payment, before the same become
delinquent, of all material taxes, assessments and governmental charges imposed
upon it or such Subsidiary or upon its property except to the extent being
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its or such
Subsidiary's books.
SECTION 7.1.3. Maintenance of Properties. Except to the extent that the
failure to do so could not reasonably be expected to have a Material Adverse
Effect, the Company will, and will cause each of its Restricted Subsidiaries to,
maintain, preserve, protect and keep its properties in good repair, working
order and condition (ordinary wear and tear excepted), and make necessary and
proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times unless the Company
determines in good faith that the continued maintenance of any of its properties
is no longer economically desirable.
100
<PAGE>
SECTION 7.1.4. Insurance. The Company will, and will cause each of its
Restricted Subsidiaries to, maintain or cause to be maintained with responsible
insurance companies insurance with respect to its properties and business
against such casualties and contingencies and of such types and in such amounts
as is customary in the case of similar businesses and with such provisions and
endorsements as the Agents may reasonably request and will, upon request of the
Agents, furnish to the Agents and each Lender a certificate of an Authorized
Officer of the Company setting forth the nature and extent of all insurance
maintained by the Company and the Restricted Subsidiaries in accordance with
this Section.
SECTION 7.1.5. Books and Records. The Company will, and will cause each
of its Restricted Subsidiaries to, keep books and records which accurately
reflect in all material respects all of its business affairs and transactions
and permit the Agents, the Issuers and each Lender or any of their respective
representatives, at reasonable times and intervals, and upon reasonable notice,
but, unless an Event of Default shall have occurred and be continuing, not more
frequently than once in each Fiscal Year, to visit its business offices, to
discuss its financial matters with its officers and, after notice to the Company
and provision of an opportunity for the Company to participate in such
discussion, its independent public accountants (and the Company hereby
authorizes such independent public accountants to discuss the Company's
financial matters with each Issuer and each Lender or its representatives,
whether or not any representative of the Company is present so long as the
Company has been afforded a reasonable opportunity to be present) and to
examine, and to photocopy extracts from, any of its books or other financial
records. The cost and expense of each such visit shall be borne by the
applicable Agent or Lender, except that the Administrative Agent may make one
such visit each Fiscal Year and the cost and expense thereof shall be borne by
the Company.
SECTION 7.1.6. Environmental Covenant. The Company will and will cause
each of its Subsidiaries to,
(a) use and operate all of its facilities and properties in
compliance with all Environmental Laws, keep all necessary permits,
approvals, certificates, licenses and other authorizations relating to
environmental matters in effect and remain in compliance therewith, and
handle all Hazardous Materials in compliance with all applicable
Environmental Laws, in each case except where the failure to comply
with the terms of this clause could not reasonably be expected to have
a Material Adverse Effect;
(b) promptly notify the Agents and provide copies of all
written claims, complaints, notices or inquiries relating to the
condition of its facilities and properties which relate to
environmental matters or compliance with Environmental Laws which would
have, or would reasonably be expected to have, a Material Adverse
Effect, and promptly cure and have dismissed with prejudice any
material actions and proceedings relating to compliance with
Environmental Laws, except to the extent being diligently
101
<PAGE>
contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP have been set aside on its
books; and
(c) provide such information and certifications which the
Agents may reasonably request from time to time to evidence compliance
with this Section 7.1.6.
SECTION 7.1.7. Future Subsidiaries. Upon any Person becoming, after the
Effective Date, a Future Pledged Foreign Subsidiary or a U.S. Subsidiary of the
Company that is a Restricted Subsidiary, or upon the Company or any such
Subsidiary acquiring additional Capital Stock of any existing Subsidiary that is
a Restricted Subsidiary and a U.S. Subsidiary or a Future Pledged Foreign
Subsidiary, the Company shall notify the Agents of such acquisition, and
(a) the Company shall promptly cause each such U.S. Subsidiary
to execute and deliver to the Administrative Agent, with counterparts
for each Lender, a supplement to the Subsidiary Guaranty and a
supplement to the Subsidiary Pledge and Security Agreement (and, if
such U.S. Subsidiary owns any real property, to the extent required by
clause (b) of Section 7.1.8, a Mortgage), together with UCC financing
statements (form UCC-1) executed and delivered by such U.S. Subsidiary
naming such U.S. Subsidiary as the debtor and the Administrative Agent
as the secured party, or other similar instruments or documents, in
appropriate form for filing under the UCC and any other applicable
recording statutes, in the case of real property, of all jurisdictions
as may be necessary or, in the reasonable opinion of the Administrative
Agent, desirable to perfect the security interest of the Administrative
Agent pursuant to the Subsidiary Pledge and Security Agreement or a
Mortgage, as the case may be (other than the perfection of security
interests in motor vehicles); and
(b) the Company shall promptly deliver, or cause to be
delivered, to the Administrative Agent under a Pledge Agreement (as
supplemented, if necessary, by a Foreign Pledge Agreement or other
supplement thereto) certificates (if any) representing all of the
issued and outstanding Capital Stock of such Subsidiary owned by the
Company or any U.S. Subsidiary that is a Restricted Subsidiary, as the
case may be, along with undated powers of transfer for such
certificates, executed in blank, or, if any Capital Stock of a U.S.
Subsidiary subject thereto is comprised of uncertificated securities or
is held through a securities intermediary, the Administrative Agent
shall have obtained "control" (as defined in the UCC applicable to the
perfection of such securities) over such Capital Stock, or other
appropriate steps shall have been taken under applicable law resulting
in the perfection of the security interest granted in favor of the
Administrative Agent pursuant to the terms of a Pledge Agreement;
together, in each case, with such opinions, in form and substance and from
counsel satisfactory to the Agents, as the Agents may reasonably require;
provided, however, that notwithstanding the foregoing, (A) subject to clause
(C), no Foreign Subsidiary shall be required to execute and
102
<PAGE>
deliver a Mortgage or a supplement to the Subsidiary Guaranty or the Subsidiary
Pledge and Security Agreement, (B) neither the Company nor any U.S. Subsidiary
of the Company be required to deliver in pledge pursuant to a Pledge Agreement
in excess of 65% of the Capital Stock of a Foreign Subsidiary, and (C) any
Foreign Subsidiary organized in Canada shall only be required to do the
foregoing solely to secure or guaranty the Obligations of the Canadian Borrower.
SECTION 7.1.8. Future Acquisitions of Leased, Real or Other Property.
(a) Prior to entering into any new lease of real property or
renewing any existing lease of real property following the Effective
Date, the Company shall, and shall cause each of its U.S. Subsidiaries
that are Restricted Subsidiaries to, use its (and their) best efforts
(which shall not require the expenditure of cash or the making of any
material concessions under the relevant lease) to deliver to the
Administrative Agent a waiver executed by the lessor of any real
property that is to be leased by the Company or such U.S. Subsidiary
for a term in excess of one year in any state which by statute grants
such lessor a "landlord's" (or similar) Lien which is superior to the
Administrative Agent's, to the extent the value of any personal
property of the Company or its U.S. Subsidiaries that are Restricted
Subsidiaries to be held at such leased property exceeds (or it is
anticipated that the value of such personal property will, at any point
in time during the term of such leasehold term, exceed) $2,000,000.
(b) In the event that the Company or any of its U.S.
Subsidiaries that are Restricted Subsidiaries shall acquire any real
property having a market value in excess of $2,000,000, the Company or
the applicable U.S. Subsidiary shall, promptly after such acquisition,
execute a Mortgage in favor of the Administrative Agent, as mortgagee
for the ratable benefit of the Secured Parties, and provide the
Administrative Agent with (i) evidence of the completion (or
satisfactory arrangements for the completion) of all recordings and
filings of such Mortgage as may be necessary or, in the reasonable
opinion of the Administrative Agent, desirable effectively to create a
valid, perfected, first priority Lien, subject to the Liens permitted
by Section 7.2.3, against the properties purported to be covered
thereby, (ii) mortgagee's title insurance policies in favor of the
Administrative Agent, as mortgagee for the ratable benefit of the
Secured Parties, in amounts and in form and substance and issued by
insurers, in each case reasonably satisfactory to the Agents, with
respect to the property purported to be covered by such Mortgage,
insuring that title to such property is indefeasible and that the
interests created by the Mortgage constitute valid first Liens thereon
free and clear of all defects and encumbrances other than as permitted
by Section 7.2.3 or as approved by the Agents, and such policies shall
also include, to the extent available, a revolving credit endorsement
and such other endorsements as the Agents shall reasonably request and
shall be accompanied by evidence of the payment in full of all premiums
thereon, and (iii) such other approvals, opinions, or documents as the
Agents may reasonably request.
103
<PAGE>
(c) In accordance with the terms and provisions of the Pledge
Agreements, the Company and each U.S. Subsidiary that is a Restricted
Subsidiary shall provide the Agents with evidence of all recordings and
filings as may be necessary or, in the reasonable opinion of the
Administrative Agent, desirable to create a valid, perfected first
priority Lien, subject to the Liens permitted by Section 7.2.3, against
all property acquired after the Effective Date (excluding motor
vehicles, leases of real property and (except to the extent required
under clause (b) of this Section 7.1.8) fee interests in real property)
and not otherwise subject to Section 7.1.10.
SECTION 7.1.9. Use of Proceeds, etc. The Borrowers shall
(a) apply the proceeds of any Loans made on or after the
Effective Date for working capital and general corporate purposes of
the Company and its Subsidiaries; and
(b) use Letters of Credit issued on or after the Effective
Date only for purposes of supporting working capital and general
corporate purposes of the Company and its Subsidiaries.
SECTION 7.1.10. Hedging Obligations. The Administrative Agent shall
have received (within six months following the Closing Date, in the case of
clause (a), on or prior to the first anniversary of the Closing Date, in the
case of clause (b), and on or prior to the second anniversary of the Closing
Date, in the case of clause (c)) evidence satisfactory to it that the Borrowers
have entered into interest rate swap, cap, collar or similar arrangements
(including such Indebtedness accruing interest at a fixed rate by its terms)
designed to protect such Borrowers against fluctuations in interest rates with
respect to at least (a) 40% of the aggregate principal amount of the Term Loans
and the outstanding principal amount of the 1998 Subordinated Notes (the "Hedged
Debt") for a period of one year from the Closing Date, (b) 45% of the Hedged
Debt for the period from one year from the Closing Date through two years from
the Closing Date and (c) 50% of the Hedged Debt for the period from two years
from the Closing Date through three years from the Closing Date, on terms
reasonably satisfactory to the Borrowers and the Agents.
SECTION 7.1.11. Intellectual Property. The Company will deliver to the
Administrative Agent, no later than 60 days after the Effective Date,
instruments or documents, in appropriate form for filing with the United States
Patent and Trademark Office, sufficient to create and perfect a security
interest in all intellectual property owned as of the Effective Date by the
Company and the U.S. Subsidiaries that are Restricted Subsidiaries as identified
in Item 7.1.11 ("Intellectual Property") of the Disclosure Schedule.
SECTION 7.1.12. Material Subsidiaries. The Company shall designate one
or more Restricted Subsidiaries of the Company as Material Subsidiaries if, in
the absence of such designation, the aggregate gross revenues, assets or EBITDA
of all Restricted Subsidiaries of the
104
<PAGE>
Company that are not Material Subsidiaries would exceed 5% of the gross
revenues, assets or EBITDA of the Company and its Restricted Subsidiaries, on a
consolidated basis.
SECTION 7.2. Negative Covenants. The Company agrees with the Agents and
each Lender that, until the Termination Date has occurred, the Company will
perform the obligations set forth in this Section 7.2.
SECTION 7.2.1. Business Activities. The Company will not, and will not
permit any Restricted Subsidiary to, engage in any business activity, except the
business activities of the type in which the Company and its Subsidiaries are
engaged on the date hereof (after giving effect to the Transaction) and any
businesses reasonably ancillary, incidental or related thereto.
SECTION 7.2.2. Indebtedness. The Company will not, and will not permit
any Restricted Subsidiary to, create, incur, assume or suffer to exist or
otherwise become or be liable in respect of any Indebtedness, except, without
duplication:
(a) (i) Indebtedness outstanding on the Effective Date, or
incurred pursuant to commitments or lines of credit outstanding on the
Effective Date, which Indebtedness or commitments are identified in
Item 7.2.2(a)(i) ("Ongoing Indebtedness") of the Disclosure Schedule,
and refinancings and replacements thereof in a principal amount not
exceeding the principal amount of the Indebtedness or commitments so
refinanced or replaced and with an average life to maturity of not less
than the then average life to maturity of the Indebtedness or
commitments so refinanced or replaced; and (ii) until the Effective
Date, Indebtedness identified in Item 7.2.2(a)(ii) ("Indebtedness to be
Paid") of the Disclosure Schedule;
(b) Indebtedness in respect of the Obligations;
(c) Indebtedness incurred by the Company or any Restricted
Subsidiary that is represented by Capitalized Lease Liabilities,
mortgage financings or purchase money obligations (but only to the
extent otherwise permitted by Section 7.2.7); provided, however, that
the maximum aggregate amount of all Indebtedness permitted under this
clause (c) shall not at any time exceed $10,000,000;
(d) intercompany Indebtedness of (i) (x) any Subsidiary
Guarantor owing to the Company or any Restricted Subsidiary or (y) the
Company owing to any Restricted Subsidiary, and (ii) any Foreign
Subsidiary that is a Restricted Subsidiary owing to the Company or any
Subsidiary Guarantor; provided, however, that the aggregate principal
amount of Indebtedness incurred pursuant to this clause (d)(ii) (other
than any such Indebtedness constituting Exempted Foreign Intercompany
Transactions), together with the aggregate principal amount of
Indebtedness incurred pursuant to clause (g) of this Section 7.2.2 and
the aggregate amount of Investments made in Foreign Subsidiaries
105
<PAGE>
pursuant to clause (j)(iii) of Section 7.2.5 (other than any such
Investments constituting Exempted Foreign Intercompany Transactions),
shall not exceed $20,000,000 at any time outstanding; provided further
that in the case of any Indebtedness described in this clause (d) which
is owing to the Company or any Subsidiary Guarantor, (1) to the extent
requested by the Agents, such Indebtedness shall be evidenced by one or
more promissory notes in form and substance satisfactory to the Agents
which shall be duly executed and delivered to (and indorsed to the
order of) the Administrative Agent in pledge pursuant to a Pledge
Agreement, and (2) in the case of any such Indebtedness owed by a
Person other than the Company or a Subsidiary Guarantor, such
Indebtedness shall not be forgiven or otherwise discharged for any
consideration other than payment (Dollar for Dollar or, if denominated
in any currency other than Dollars, such currency) in cash unless the
Agents otherwise consent;
(e) Assumed Indebtedness of the Company and the Restricted
Subsidiaries in an aggregate principal amount not to exceed $15,000,000
at any time outstanding;
(f) Hedging Obligations of the Company or any Restricted
Subsidiary in respect of the Credit Extensions or otherwise entered
into by the Company or any Restricted Subsidiary to hedge against
interest rate, currency exchange rate or commodity price risk, in each
case arising in the ordinary course of business of the Company and the
Restricted Subsidiaries and not for speculative purposes;
(g) Indebtedness of Foreign Subsidiaries of the Company in an
aggregate principal amount not to exceed $5,000,000 at any time
outstanding; provided, however, that the aggregate principal amount of
Indebtedness incurred pursuant to this clause (g), together with the
aggregate principal amount of Indebtedness incurred pursuant to clause
(d)(ii) of this Section 7.2.2 (other than any such Indebtedness
constituting Exempted Foreign Intercompany Transactions) and the
aggregate amount of Investments made in Foreign Subsidiaries pursuant
to clause (j)(iii) of Section 7.2.5 (other than any such Investments
constituting Exempted Foreign Intercompany Transactions), shall not
exceed $20,000,000 at any time outstanding;
(h) other unsecured Indebtedness of the Company and the
Restricted Subsidiaries in an aggregate principal amount at any time
outstanding not to exceed $10,000,000 plus the difference between the
maximum amount of additional Commitments that have been or could be
provided under Section 2.2.2 and the then outstanding amount of
additional Loans made pursuant to such Commitments; and
(i) Indebtedness of any Foreign Subsidiary owing to any other
Foreign Subsidiary;
106
<PAGE>
provided, however, that (i) no Indebtedness otherwise permitted by clauses (c),
(d) (as such clause (d) relates to loans made by the Company or any Subsidiary
Guarantor to Restricted Subsidiaries which are not Guarantors), (e), (g) or (h)
may be incurred if, immediately before or after giving effect to the incurrence
thereof, any Default shall have occurred and be continuing, and (ii) all such
Indebtedness of the type described in clause (d)(i)(y) above that is owed to
Subsidiaries that are not Subsidiary Guarantors shall be subordinated, in
writing, to the Obligations upon terms satisfactory to the Agents.
SECTION 7.2.3. Liens. The Company will not, and will not permit any
Restricted Subsidiary to, create, incur, assume or suffer to exist any Lien upon
any of its property, revenues or assets, whether now owned or hereafter
acquired, except:
(a) Liens existing on the Effective Date and identified in
Item 7.2.3(a) ("Ongoing Liens") of the Disclosure Schedule and
extensions and renewals thereof; provided, however, that no such
extension or renewal shall increase the obligations secured by such
Lien, extend such Lien to additional assets or otherwise result in a
Default hereunder;
(b) Liens securing payment of the Obligations or any
obligation under any Rate Protection Agreement granted pursuant to any
Loan Document;
(c) Liens granted to secure payment of Indebtedness of the
type permitted and described in clause (c) of Section 7.2.2;
(d) Liens for taxes, assessments or other governmental charges
or levies, including Liens pursuant to Section 107(l) of CERCLA or
other similar law, not at the time delinquent or thereafter payable
without penalty or being contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;
(e) Liens of carriers, warehousemen, mechanics, repairmen,
materialmen, contractors, laborers and landlords or other like Liens
incurred in the ordinary course of business for sums not overdue for a
period of more than 30 days or being diligently contested in good faith
by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books;
(f) Liens incurred in the ordinary course of business in
connection with workmen's compensation, unemployment insurance or other
forms of governmental insurance or benefits, or to secure performance
of tenders, bids, statutory or regulatory obligations, insurance
obligations, leases and contracts (other than for borrowed money)
entered into in the ordinary course of business or to secure
obligations on surety or appeal bonds;
107
<PAGE>
(g) judgment Liens in existence less than 30 days after the
entry thereof or with respect to which execution has been stayed or the
payment of which is covered in full by a bond or a letter of credit or
(subject to a customary deductible) by insurance maintained with
responsible insurance companies and Liens in existence less than 30
days, which Liens secure any such bond or reimbursement obligation with
respect to such letter of credit;
(h) (i) Liens with respect to minor imperfections of title and
easements, rights-of- way, restrictions, reservations, permits,
servitudes and other similar encumbrances on real property and fixtures
which do not materially detract from the value or materially impair the
use by the Company or any such Restricted Subsidiary in the ordinary
course of their business of the property subject thereto; and (ii) in
the case of any property covered by a Mortgage, encumbrances disclosed
in the title insurance policy issued to, and reasonably approved by the
Agents insuring the Mortgage (provided that upon certification by the
Company that an easement, right-of-way, restriction, reservation,
permit, servitude or other similar encumbrance granted or to be granted
by the Company or any such Restricted Subsidiary does not materially
detract from the value of or materially impair the use by the Company
or such Restricted Subsidiary in the ordinary course of its business of
the property subject to or to be subject to such encumbrance, the
Administrative Agent shall execute such documents as are reasonably
requested to subordinate its Mortgage to such encumbrance);
(i) leases or subleases granted by the Company or any
Restricted Subsidiary to any other Person in the ordinary course of
business;
(j) Liens in the nature of trustees' Liens granted pursuant to
any indenture governing any Indebtedness permitted by Section 7.2.2, in
each case in favor of the trustee under such indenture and securing
only obligations to pay compensation to such trustee, to reimburse its
expenses and to indemnify it under the terms thereof;
(k) Liens of sellers of goods to the Company and the
Restricted Subsidiaries arising under Article 2 of the UCC or similar
provisions of applicable law in the ordinary course of business,
covering only the goods sold and securing only the unpaid purchase
price for such goods and related expenses;
(l) Liens securing Assumed Indebtedness of the Company and the
Restricted Subsidiaries permitted pursuant to clause (e) of Section
7.2.2; provided, however, that (i) any such Liens attach only to the
property of the Subsidiary acquired, or the property acquired, in
connection with such Assumed Indebtedness and shall not attach to any
assets of the Company or any Restricted Subsidiary theretofore existing
or which arise after the date thereof and (ii) the Assumed Indebtedness
and other secured Indebtedness of the Company and the Restricted
Subsidiaries secured by any such Lien shall not
108
<PAGE>
exceed 100% of the fair market value of the assets being acquired in
connection with such Assumed Indebtedness;
(m) Liens on assets of Foreign Subsidiaries of the Company
securing Indebtedness permitted pursuant to clauses (g) or (i) of
Section 7.2.2;
(n) Liens on the Capital Stock of Unrestricted Subsidiaries
securing Debt incurred by such Unrestricted Subsidiaries; and
(o) Liens securing obligations in an aggregate principal
amount not to exceed $5,000,000 at any time outstanding.
SECTION 7.2.4. Financial Covenants.
(a) Leverage Ratio. The Company will not permit the Leverage
Ratio as of the end of any Fiscal Quarter occurring during any period
set forth below to be greater than the ratio set forth opposite such
period:
109
<PAGE>
Period Leverage Ratio
------ --------------
12/31/00 through and including the last 4.00:1
day of the Fiscal Quarter ending on or
about 06/30/01
the last day of the Fiscal Quarter ending 3.50:1
on or about 09/30/01 through and
including the last day of the Fiscal
Quarter ending on or about 06/30/02
the last day of the Fiscal Quarter ending 3.00:1
on or about 09/30/02 through and
including the last day of the Fiscal
Quarter ending on or about 06/30/03
the last day of the Fiscal Quarter ending 2.50:1
on or about 09/30/03 through and
including the last day of the Fiscal
Quarter ending on or about 06/30/04
the last day of the Fiscal Quarter ending 2.00:1
on or about 09/30/04 through and
including the last day of the Fiscal
Quarter ending on or about 06/30/05
the last day of the Fiscal Quarter ending 1.75:1
on or about 09/30/05 through and
including the last day of the Fiscal
Quarter ending on or about 06/30/06
the last day of the Fiscal Quarter ending 1.50:1
on or about 09/30/06 and each Fiscal
Quarter thereafter
(b) Interest Coverage Ratio. The Company will not permit the Interest
Coverage Ratio as of the end of any Fiscal Quarter occurring during any
period set forth below to be less than the ratio set forth opposite such
period:
110
<PAGE>
Interest Coverage
Period Ratio
------ -----
12/31/00 through and including the last 2.00:1
day of the Fiscal Quarter ending on or
about 06/30/01
the last day of the Fiscal Quarter ending 2.25:1
on or about 09/30/01 through and
including the last day of the Fiscal
Quarter ending on or about 06/30/02
the last day of the Fiscal Quarter ending 2.75:1
on or about 09/30/02 through and
including the last day of the Fiscal
Quarter ending on or about 06/30/03
the last day of the Fiscal Quarter ending 3.00:1
on or about 09/30/03 through and
including the last day of the Fiscal
Quarter ending on or about 06/30/04
the last day of the Fiscal Quarter ending 3.50:1
on or about 09/30/04 through and
including the last day of the Fiscal
Quarter ending on or about 06/30/05
the last day of the Fiscal Quarter ending 4.00:1
on or about 09/30/05 through and
including the last day of the Fiscal
Quarter ending on or about 06/30/06
the last day of the Fiscal Quarter ending 5.00:1
on or about 09/30/06 and each Fiscal
Quarter thereafter
(c) Fixed Charge Coverage Ratio. The Company will not permit the Fixed
Charge Coverage Ratio as of the end of any Fiscal Quarter ending on or
after December 31, 2000 to be less than 1.20:1.
SECTION 7.2.5. Investments. The Company will not, and will not permit
any Restricted Subsidiary to, make, incur, assume or suffer to exist any
Investment in any other Person, except, without duplication:
111
<PAGE>
(a) (i) Investments existing on the Effective Date and
identified in Item 7.2.5(a) ("Ongoing Investments") of the Disclosure
Schedule and extensions or renewals thereof; provided, however, that no
such extension or renewal shall be permitted if it would (x) increase
the amount of such Investment at the time of such extension or renewal
or (y) result in a Default hereunder and (ii) Investments resulting
from the conversion or recharacterization of Ongoing Investments
(including the conversion of any Ongoing Investments constituting
equity Investments into debt Investments); provided, however, that no
such Investment may be made in reliance on this clause (a)(ii) if such
Investment would require, at the time of the making thereof, the
contribution or other payment by the Company or any Subsidiary
Guarantor of any additional cash or other assets to any Subsidiary that
is not a Subsidiary Guarantor;
(b) Cash Equivalent Investments;
(c) Investments permitted as Indebtedness pursuant to
Section 7.2.2;
(d) Investments permitted as Capital Expenditures pursuant to
Section 7.2.7 (including any such Investments which would otherwise
constitute Capital Expenditures but for the operation of clause (i) of
the proviso to the definition of Capital Expenditures) so long as such
Investments are not incurred pursuant to clause (k) of this Section
7.2.5;
(e) Investments made by the Company or any Restricted
Subsidiary, solely with proceeds which have been contributed, directly
or indirectly after the Effective Date, to the Company or such
Restricted Subsidiary as cash equity from holders of Holdco's Capital
Stock for the purpose of making an Investment identified in a notice to
the Agents on or prior to the date that such capital contribution is
made, which Investments shall result in the Company or such Restricted
Subsidiary acquiring a majority controlling interest in the Person in
which such Investment was made or increasing any such controlling
interest already maintained by it;
(f) Investments to the extent the consideration received
pursuant to clause (c)(i) of Section 7.2.9 is not all cash;
(g) Investments in the form of loans to officers, directors
and employees of the Company and any Restricted Subsidiaries for the
sole purpose of purchasing Holdco Capital Stock or the Capital Stock of
any Person that directly or indirectly holds Holdco Capital Stock or of
refinancing any such loans made by others (or purchases of such loans
made by others);
(h) Letters of Credit issued in support of, and guarantees by
the Company or any Restricted Subsidiary of, Indebtedness permitted
under clauses (b), (c), (f) and (h) of Section 7.2.2;
112
<PAGE>
(i) Investments made or held by any Foreign Subsidiary of the
Company that is a Restricted Subsidiary in any other Foreign Subsidiary
of the Company that is a Restricted Subsidiary;
(j) (i) Investments of the Company or any U.S. Subsidiary of
the Company that is a Restricted Subsidiary in the Company or any U.S.
Subsidiary of the Company that is a Restricted Subsidiary, (ii)
Investments by the Company or any U.S. Subsidiary of the Company that
is a Restricted Subsidiary in a Foreign Subsidiary of the Company that
is a Restricted Subsidiary in connection with the creation of such
Foreign Subsidiary (provided, however, that in the case of clause
(j)(ii), such Investment is in the form of Capital Stock of one or more
other Foreign Subsidiaries), and (iii) equity Investments of any
Borrower or any Subsidiary Guarantor in Foreign Subsidiaries; provided,
however, that the aggregate amount of Investments made pursuant to
clause (j)(iii) (other than any such Investments constituting Exempted
Foreign Intercompany Transactions), together with the aggregate
principal amount of Indebtedness incurred pursuant to clause (d)(ii) of
Section 7.2.2 (other than any such Indebtedness constituting Exempted
Foreign Intercompany Transactions), and clause (g) of Section 7.2.2
shall not exceed $20,000,000 at any time outstanding.
(k) Investments made by the Company or any Restricted
Subsidiary in an aggregate amount not to exceed $30,000,000 in any
single transaction (or a series of related transactions) or
$100,000,000 in an aggregate amount over the term of this Agreement;
provided, however, that (i) such Investments (A) result in the Company
or the relevant Restricted Subsidiary acquiring (subject to Section
7.2.1) a majority controlling interest in the Person (or its assets and
businesses) in which such Investment was made, or increasing any such
controlling interest maintained by it in such Person or (B) result in
the Person in which such Investment was made becoming an Acquired
Controlled Person and a Restricted Subsidiary for the purposes set
forth in the last sentence of the definition of Subsidiary, (ii) to the
extent any Assumed Indebtedness permitted pursuant to clause (e) of
Section 7.2.2 would be incurred in connection with any such Investment
to be made pursuant to this clause (k), the permitted amounts set forth
in this clause shall be reduced, Dollar for Dollar, by the outstanding
principal amount of any such Assumed Indebtedness to be assumed; and
(iii) the amount of Investments made by the Company or any of its U.S.
Subsidiaries that are Restricted Subsidiaries in any of its Foreign
Subsidiaries that are Restricted Subsidiaries shall not exceed
$20,000,000 at any time outstanding;
(l) extensions of trade credit in the ordinary course of
business;
(m) Investments in Hedging Obligations permitted hereunder;
113
<PAGE>
(n) Investments (including debt obligations and Capital Stock)
received in connection with the bankruptcy or reorganization of
suppliers and customers and in settlement of delinquent obligations of
and other disputes with customers and suppliers arising in the ordinary
course of business;
(o) Investments in any Person in which the Company or any
Restricted Subsidiary holds an Investment as permitted under clause (a)
of this Section 7.2.5 in an aggregate amount not to exceed $25,000,000
(including any such Investment made in connection with any Investment
made in reliance on clause (k) of this Section 7.2.5);
(p) Investments in the Capital Stock of Holdco to the extent
that Restricted Payments to Holdco to purchase, redeem or otherwise
retire such Capital Stock for value would be permitted under clause (c)
of Section 7.2.6; and
(q) other Investments in an aggregate amount at any time
outstanding not to exceed $10,000,000;
provided, however, that
(r) any Investment which when made complies with the
requirements of the definition of the term "Cash Equivalent Investment"
may continue to be held notwithstanding that such Investment if made
thereafter would not comply with such requirements; and
(s) no Investment otherwise permitted by clauses (c) (except
to the extent permitted under Section 7.2.2), (g), (h) (to the extent
that the applicable Letter of Credit relates to Indebtedness permitted
under clause (c) or (i) of Section 7.2.2), (k) or (q) shall be
permitted to be made if, immediately before or after giving effect
thereto, any Default shall have occurred and be continuing.
SECTION 7.2.6. Restricted Payments, etc. The Company will not, and will
not permit any Restricted Subsidiary to, declare, pay or make any payment,
dividend, distribution or exchange (in cash, property or obligations) on or in
respect of any class of Capital Stock (now or hereafter outstanding) of the
Company or on any warrants, options or other rights with respect to any class of
Capital Stock (now or hereafter outstanding) of the Company (other than (i)
dividends or distributions payable in its Capital Stock or warrants to purchase
its Capital Stock and (ii) splits or reclassifications of its Capital Stock into
additional or other shares of its Capital Stock) or apply, or permit any of its
Restricted Subsidiaries to apply, any of its funds, property or assets to the
purchase, redemption, exchange, sinking fund or other retirement of, or agree or
permit any of its Subsidiaries to purchase, redeem or exchange, any shares of
any class of Capital Stock (now or hereafter outstanding) of the Company, or
warrants, options or other rights with respect to any class of Capital Stock
(now or hereafter outstanding) of the Company (the
114
<PAGE>
foregoing prohibited acts being herein collectively referred to as "Restricted
Payments"); provided, however, that the Company shall be permitted to make
Restricted Payments to Holdco to the extent necessary to enable Holdco to
(a) pay its overhead expenses (including advisory fees in an
amount not to exceed $300,000 in the aggregate in any Fiscal Year) in
an amount not to exceed $500,000 in the aggregate in any Fiscal Year;
(b) pay taxes;
(c) so long as (i) no Default shall have occurred and be
continuing on the date such Restricted Payment is declared or to be
made, nor would a Default result from the making of such Restricted
Payment, (ii) after giving effect to the making of such Restricted
Payment, the Company shall be in pro forma compliance with the covenant
set forth in clause (a) of Section 7.2.4 for the most recent full
Fiscal Quarter immediately preceding the date of the making of such
Restricted Payment for which the relevant financial information has
been delivered pursuant to clause (a) or clause (b) of Section 7.1.1,
and (iii) an Authorized Officer of the Company shall have delivered a
certificate to the Administrative Agent in form and substance
satisfactory to the Administrative Agent (including a calculation of
the Company's pro forma compliance with the covenant set forth in
clause (a) of Section 7.2.4 in reasonable detail) certifying as to the
accuracy of clauses (c)(i) and (c)(ii) above, repurchase, redeem or
otherwise acquire or retire for value any Capital Stock of Holdco, or
any warrant, option or other right to acquire any such Capital Stock of
Holdco or the Capital Stock of any Person that directly or indirectly
holds the Capital Stock of Holdco, held by any director, member of
management or an employee of the Company or any Restricted Subsidiary
pursuant to any employment agreement, management equity subscription
agreement, restricted stock plan, stock option agreement or other
similar arrangement so long as the total amount of such repurchases,
redemptions, acquisitions, retirements and payments shall not exceed a
maximum amount of (A) $12,000,000 during the term of this Agreement
plus (B) the aggregate cash proceeds and aggregate principal amount of
any notes received by the Company during such calendar year from any
reissuance of Capital Stock of Holdco, and warrants, options and other
rights to acquire Capital Stock of Holdco, by Holdco or the Company to
directors, members of management and employees of the Company and the
Restricted Subsidiaries (to the extent such proceeds are not otherwise
required to be applied pursuant to clause (d) of Section 3.1.1); and
(d) so long as no Event of Default shall have occurred and be
continuing, pay cash interest on the Holdco Discount Notes; provided,
however, that no such Restricted Payment made pursuant to this clause
(d) shall be permitted (i) prior to February 15, 2004 and (ii) unless
the chief financial officer, chief accounting officer or treasurer of
the Company has delivered a certificate to the Administrative Agent
certifying that the
115
<PAGE>
Leverage Ratio (calculated on a pro forma basis after giving effect to
such Restricted Payment) for the period of four Fiscal Quarters ending
on the last day of the most recent Fiscal Quarter for which the
relevant financial information has been delivered pursuant to clause
(a) or clause (b) of Section 7.1.1 is not greater than 2.00:1.
SECTION 7.2.7. Capital Expenditures, etc. With respect to Capital
Expenditures, the parties covenant and agree as follows:
(a) The Company will not, and will not permit any Restricted
Subsidiary to, make or commit to make Capital Expenditures in any
Fiscal Year ending on or after December 31, 2000, except Capital
Expenditures of the Company and the Restricted Subsidiaries not to
exceed (i) an amount (the "Base Amount") equal to $15,000,000 in the
aggregate in the case of any Fiscal Year plus (ii) an aggregate amount
in addition to the Base Amount over the term of this Agreement equal to
$25,000,000; provided, however, that, to the extent the Base Amount
exceeds the aggregate amount of Capital Expenditures (other than
amounts permitted to be made pursuant to clause (a)(ii) above or clause
(b) below) actually made during such Fiscal Year, such excess amount
(up to an aggregate of 50% of the Base Amount for such Fiscal Year) may
be carried forward to (but only to) the next succeeding Fiscal Year
(any such amount to be certified by the Company to the Agents in the
Compliance Certificate delivered for the last Fiscal Quarter of such
Fiscal Year, and any such amount carried forward to a succeeding Fiscal
Year shall be deemed to be used prior to the Company and the Restricted
Subsidiaries using the Base Amount for such succeeding Fiscal Year,
without giving effect to such carry-forward).
(b) The parties acknowledge and agree that the permitted
Capital Expenditure level set forth in clause (a) above shall be
exclusive of (i) the amount of Capital Expenditures actually made with
cash capital contributions made to the Company or any Restricted
Subsidiary, directly or indirectly, by any Person other than the
Company and the Restricted Subsidiaries after the Effective Date and
specifically identified in a certificate delivered by an Authorized
Officer of the Company to the Agents on or about the time such capital
contribution or equity issuance is made (but in any event prior to the
time of the Capital Expenditure made with such capital contribution or
equity issuance) (provided, however, that, to the extent such cash
capital contributions or any proceeds from such equity issuance
constitute Net Equity Proceeds arising from the issuance by Holdco or
the Company of their respective Capital Stock, only that portion of
such Net Equity Proceeds which is not required to be applied as a
prepayment pursuant to clause (d) of Section 3.1.1 may be used for
Capital Expenditures pursuant to this clause (b)) and (ii) any portion
of any acquisition that is permitted under Section 7.2.5 (other than
pursuant to clause (d) thereof) that is accounted for as a Capital
Expenditure.
SECTION 7.2.8. Consolidation, Merger, etc. The Company will not, and
will not permit any Restricted Subsidiary to, liquidate or dissolve, consolidate
with, or merge into or with, any
116
<PAGE>
other corporation, or purchase or otherwise acquire all or substantially all of
the assets of any Person (or of any division thereof), except
(a) any such Restricted Subsidiary may liquidate or dissolve
voluntarily into, and may merge with and into, the Company (so long as
the Company is the surviving Person of such combination or merger) or
any other Restricted Subsidiary, and the assets or Capital Stock of any
Restricted Subsidiary may be purchased or otherwise acquired by the
Company or any other Restricted Subsidiary; provided, however, that
notwithstanding the above, a Restricted Subsidiary may only liquidate
or dissolve into, or merge with and into, another Restricted Subsidiary
if, after giving effect to such combination or merger, the Company
continues to own (directly or indirectly), and the Administrative Agent
continues to have pledged to it pursuant to a Pledge Agreement, a
percentage of the issued and outstanding shares of Capital Stock (on a
fully diluted basis) of the Restricted Subsidiary surviving such
combination or merger that is equal to or in excess of the percentage
of the issued and outstanding shares of Capital Stock (on a fully
diluted basis) of the Restricted Subsidiary that does not survive such
combination or merger that was (immediately prior to the combination or
merger) owned (directly or indirectly) by the Company or pledged to the
Administrative Agent;
(b) so long as no Default has occurred and is continuing or
would occur after giving effect thereto, the Company or any Restricted
Subsidiary may purchase all or substantially all of the assets of any
Person (or any division thereof) not then a Restricted Subsidiary, or
acquire such Person by merger (so long as the Company is the surviving
Person of such combination or merger), if permitted (without
duplication) pursuant to clauses (e), (f), (k) (n), (o) or (q) of
Section 7.2.5; and
(c) the Company and the Restricted Subsidiaries may
consummate the Transaction.
SECTION 7.2.9. Asset Dispositions, etc. The Company will not, and will
not permit any Restricted Subsidiary to, Dispose, or grant options, warrants or
other rights with respect to, all or any part of its assets, whether now owned
or hereafter acquired (including accounts receivable and Capital Stock of
Restricted Subsidiaries) to any Person, unless:
(a) such Disposition of such assets is (i) in the ordinary
course of its business (and does not constitute a Disposition of all or
a substantial part of the Company's and the Restricted Subsidiaries'
assets, taken as a whole) or is of obsolete or worn out property or
property not otherwise required to be maintained pursuant to Section
7.1.3, (ii) permitted by Section 7.2.8, (iii) an assignment or license
of intellectual property in the ordinary course of business or (iv)
between the Company and a Restricted Subsidiary or between Restricted
Subsidiaries;
117
<PAGE>
(b) such Disposition constitutes (i) an Investment permitted
under Section 7.2.5, (ii) a Lien permitted under Section 7.2.3, (iii) a
Restricted Payment permitted under Section 7.2.6 or (iv) a
sale-and-leaseback transaction permitted under Section 7.2.14;
(c) (i) such Disposition of such assets is for fair market
value and the consideration consists of no less than 75% in cash or is
a Lien permitted under clause (h)(ii) of Section 7.2.3, and (ii) except
in the case of a Disposition of the Myrtle Beach or Loris facilities,
the Net Disposition Proceeds received from such assets, together with
the Net Disposition Proceeds of all other assets (other than the Myrtle
Beach and Loris facilities) Disposed of pursuant to this clause (c)
does not exceed (individually or in the aggregate) $15,000,000 over the
term of this Agreement;
(d) such Disposition results from a casualty or condemnation
in respect of such property or assets; or
(e) such Disposition consists of the sale or discount of
overdue accounts receivable in the ordinary course of business, but
only in connection with the compromise or collection thereof.
SECTION 7.2.10. Modification of Certain Agreements. The Company will
not, and will not permit any of its Restricted Subsidiaries to, consent to any
amendment, supplement, amendment and restatement, waiver or other modification
of any of the terms or provisions contained in, or applicable to, the
Transaction Agreement, the Investors' Agreement or the 1998 Subordinated Note
Indenture or any schedules, exhibits or agreements related thereto (the
"Restricted Agreements"), in each case which would materially adversely affect
the rights or remedies of the Lenders, or any Obligor's ability to perform under
any Loan Document or which would (a) decrease the cash consideration payable in
respect of the Divestiture, (b) increase the Company's or any Restricted
Subsidiary's obligations or liabilities, contingent or otherwise (other than
adjustments to the cash consideration payable in respect of the Divestiture made
pursuant to the terms of such Transaction Agreement), (c) increase the principal
amount of, or increase the interest rate on, or add or increase any fee with
respect to the Indebtedness evidenced by such 1998 Subordinated Notes or any
such Restricted Agreement, advance any dates upon which payments of principal or
interest are due thereon or change any of the covenants with respect thereto in
a manner which is more restrictive to the Borrower or any of its Restricted
Subsidiaries or (d) in the case of any 1998 Subordinated Notes Documents, change
the subordination provisions thereof (including any default or conditions to an
event of default relating thereto), or change any collateral therefor (other
than to release such collateral), if (in the case of this clause (d)), the
effect of such amendment or change, individually or together with all other
amendments or changes made, is to increase the obligations of the obligor
thereunder or to confer any additional rights on the holders of such 1998
Subordinated Notes, or any such Restricted Agreement (or a trustee or other
representative on their behalf)
118
<PAGE>
SECTION 7.2.11. Transactions with Affiliates. The Company will not, and
will not permit any Restricted Subsidiary to, enter into, or cause, suffer or
permit to exist any arrangement or contract with any of its Affiliates (other
than any Obligor or any other Restricted Subsidiary) unless such arrangement or
contract is fair and equitable to the Company or such Restricted Subsidiary and
is an arrangement or contract of the kind which would be entered into by a
prudent Person in the position of the Company or such Restricted Subsidiary with
a Person which is not one of its Affiliates; provided, however that the Company
and the Restricted Subsidiaries shall be permitted to (a) enter into and perform
their obligations, or take any actions contemplated or permitted, under the
Transaction Documents and the Investors' Agreement, (b) make any Restricted
Payment permitted under Section 7.2.6, (c) enter into and perform their
obligations under arrangements with DLJ and its Affiliates for underwriting,
investment banking and advisory services (including payments of the fees in
respect of advisory services referred to in clause (a) of Section 7.2.6) on
usual and customary terms, (d) make payment of reasonable and customary fees and
reimbursement of expenses payable to directors of Holdco (e) enter into
employment arrangements with respect to the procurement of services of
directors, officers and employees in the ordinary course of business and pay
reasonable fees in connection therewith and (f) perform transition services for
ThermaSys and its Subsidiaries during the period of one month following the
consummation of the Divestiture.
SECTION 7.2.12. Negative Pledges, Restrictive Agreements,
etc. The Company will not, and will not permit any Restricted
Subsidiary to, enter into any agreement prohibiting
(a) (i) the creation or assumption of any Lien upon
its properties, revenues or assets, whether now owned or
hereafter acquired securing any Obligation or any senior
refinancing thereof (other than, in the case of any assets
acquired with the proceeds of any Indebtedness permitted under
clause (c) of Section 7.2.2, customary limitations and
prohibitions contained in such Indebtedness and in the case of
any Indebtedness permitted under clauses (e), (f), (g), (h)
and (i) of Section 7.2.2, customary limitations in respect of
the Foreign Subsidiaries of the Company that are Restricted
Subsidiaries that shall have incurred such Indebtedness and
its assets), or (ii) the ability of the Company or any other
Obligor to amend or otherwise modify this Agreement or any
other Loan Document; or
(b) any Restricted Subsidiary from making any
payments, directly or indirectly, to the Company by way of
dividends, advances, repayments of loans or advances,
reimbursements of management and other intercompany charges,
expenses and accruals or other returns on investments, or any
other agreement or arrangement which restricts the ability of
any such Restricted Subsidiary to make any payment, directly
or indirectly, to the Company (other than customary
limitations and prohibitions in any Indebtedness permitted
under clauses (b), (f), (g), (h) and (i) of Section 7.2.2 that
are applicable to the Restricted Subsidiary that
119
<PAGE>
has incurred such Indebtedness and its assets; provided,
however, that such limitations shall be limited solely to such
Restricted Subsidiary (and any of its Subsidiaries) and its
(and their) assets).
SECTION 7.2.13. Securities of Subsidiaries. The Company will
not permit any Wholly-Owned Subsidiary that is a Restricted Subsidiary
to issue any Capital Stock (whether for value or otherwise) to any
Person other than the Company or another Wholly-Owned Subsidiary that
is a Restricted Subsidiary.
SECTION 7.2.14. Sale and Leaseback. The Company will not, and
will not permit any Restricted Subsidiary to, enter into any agreement
or arrangement with any other Person providing for the leasing by the
Company or any Restricted Subsidiary of real or personal property which
has been or is to be sold or transferred by the Company or any
Restricted Subsidiary to such other Person or to any other Person to
whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Company or any
Restricted Subsidiary except for such transactions relating to assets
the fair market value of which, in the aggregate over the term of this
Agreement, does not exceed $5,000,000.
SECTION 7.2.15. Designation of Senior Indebtedness. The
Company will not permit any Indebtedness (other than the Indebtedness
incurred hereunder or under any other the Loan Document) to constitute
"Senior Debt" (or any other similar term) under the 1998 Subordinated
Notes Documents, without the consent of the Required Lenders.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default. Each of the
following events or occurrences described below shall constitute an
"Event of Default".
SECTION 8.1.1. Non-Payment of Obligations. (a) Any Borrower
shall default in the payment or prepayment of any principal of any Loan
when due or any Reimbursement Obligations or any deposit of cash for
collateral purposes pursuant to Section 2.6.4, as the case may be, or
(b) any Obligor shall default (and such default shall continue
unremedied for a period of three Business Days) in the payment when due
of any interest or commitment fee with respect to the Loans or
Commitments or of any other monetary Obligation.
120
<PAGE>
SECTION 8.1.2. Breach of Warranty. Any representation or
warranty of the Company or any other Obligor made or deemed to be made
hereunder or in any other Loan Document executed by it or any other
writing or certificate furnished by or on behalf of the Company or any
other Obligor to any Lender Party for the purposes of or in connection
with this Agreement or any such other Loan Document (including any
certificates delivered pursuant to Article V) is or shall be incorrect
when made in any material respect.
SECTION 8.1.3. Non-Performance of Certain Covenants and
Obligations. The Company shall default in the due performance and
observance of any of its obligations under Sections 7.1.1(e), 7.1.7(b),
7.1.9, 7.1.10, or 7.2 (other than Section 7.2.1).
SECTION 8.1.4. Non-Performance of Other Covenants and
Obligations. Any Obligor shall default in the due performance and
observance of any other agreement contained herein or in any other Loan
Document executed by it, and such default shall continue unremedied for
a period of 30 days after notice thereof shall have been given to the
Company by the Administrative Agent at the direction of the Required
Lenders.
SECTION 8.1.5. Default on Other Indebtedness. A default shall
occur (i) in the payment when due (subject to any applicable grace
period), whether by acceleration or otherwise, of any Indebtedness,
other than Indebtedness described in Section 8.1.1, of the Company or
any Restricted Subsidiary or Holdco having a principal amount,
individually or in the aggregate for Holdco, the Company and the
Restricted Subsidiaries, in excess of $5,000,000, or (ii) a default
shall occur in the performance or observance of any obligation or
condition with respect to such Indebtedness having a principal amount,
individually or in the aggregate, in excess of $5,000,000 if the effect
of such default is to accelerate the maturity of any such Indebtedness
or such default shall continue unremedied for any applicable period of
time sufficient to permit the holder or holders of such Indebtedness,
or any trustee or agent for such holders, to cause such Indebtedness to
become due and payable prior to its expressed maturity.
SECTION 8.1.6. Judgments. Any judgment or order for the
payment of money in excess of $5,000,000 in the aggregate for Holdco,
the Company and the Restricted Subsidiaries (not covered by insurance
from a responsible insurance company that is not denying its liability
with respect thereto) shall be rendered against the Company or any
Restricted Subsidiary or Holdco and remain unvacated and unpaid and
either (a) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order, or (b) there shall be any period
of 30 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect.
121
<PAGE>
SECTION 8.1.7. Pension Plans. Any of the following events
shall occur with respect to any Pension Plan (a) the termination of any
Pension Plan if, as a result of such termination, the Company would be
required to make a contribution to such Pension Plan, or would
reasonably expect to incur a liability or obligation to such Pension
Plan, in excess of $5,000,000, or (b) a contribution failure occurs
with respect to any Pension Plan sufficient to give rise to a Lien
under Section 302(f) of ERISA in an amount in excess of $5,000,000.
SECTION 8.1.8. Change in Control. Any Change in Control shall
occur.
SECTION 8.1.9. Bankruptcy, Insolvency, etc. The Company, any
Material Subsidiary or any other Obligor shall
(a) become insolvent or generally fail to pay, or
admit in writing its inability to pay, debts as they become
due;
(b) apply for, consent to, or acquiesce in, the
appointment of a trustee, receiver, sequestrator or other
custodian for the Company, any Material Subsidiary or any
other Obligor or any material property of any thereof, or make
a general assignment for the benefit of creditors;
(c) in the absence of such application, consent,
acquiescence or assignment, permit or suffer to exist the
appointment of a trustee, receiver, sequestrator or other
custodian for the Company, any Material Subsidiary or any
other Obligor or for a substantial part of the property of any
thereof, and such trustee, receiver, sequestrator or other
custodian shall not be discharged within 60 days, provided,
however, that the Company, each Material Subsidiary and each
other Obligor hereby expressly authorizes the Agents, the
Issuers and each Lender to appear in any court conducting any
relevant proceeding during such 60-day period to preserve,
protect and defend their rights under the Loan Documents;
(d) permit or suffer to exist the commencement of any
bankruptcy, reorganization, debt arrangement or other case or
proceeding under any bankruptcy or insolvency law, or any
dissolution, winding up or liquidation proceeding, in respect
of the Company, any Material Subsidiary or any other Obligor,
and, if any such case or proceeding is not commenced by the
Company, any Material Subsidiary or such other Obligor, such
case or proceeding shall be consented to or acquiesced in by
the Company, such Material Subsidiary or such other Obligor or
shall result in the entry of an order for relief or shall
remain for 60 days undismissed; provided, however, that the
Company, each Material Subsidiary and each other Obligor
hereby expressly authorizes the Agents, the Issuers and each
Lender to appear in any court conducting any such case or
122
<PAGE>
proceeding during such 60-day period to preserve, protect and
defend their rights under the Loan Documents; or
(e) take any action (corporate or otherwise)
authorizing, or in furtherance of, any of the foregoing.
SECTION 8.1.10. Impairment of Security, etc. (a) Any Loan
Document, or any Lien granted thereunder, shall (except in accordance
with its terms or pursuant to an agreement of the parties thereto), in
whole or in part, terminate, cease to be in full force and effect or
cease to be the legally valid, binding and enforceable obligation of
any Obligor party thereto; the Company or any other Obligor shall,
directly or indirectly, contest in any manner the effectiveness,
validity, binding nature or enforceability thereof, or (b) any Lien
securing any Obligation shall, in whole or in part, cease to be a
perfected first priority Lien, subject only to those exceptions
expressly permitted by the Loan Documents, except to the extent any
event referred to above (i) relates to assets of the Company or any
Restricted Subsidiary which are immaterial, (ii) results from the
failure of the Administrative Agent to maintain possession of
certificates representing securities pledged under any Pledge Agreement
or to file continuation statements under the UCC of any applicable
jurisdiction or (iii) is covered by a lender's title insurance policy
and the relevant insurer promptly after the occurrence thereof shall
have acknowledged in writing that the same is covered by such title
insurance policy.
SECTION 8.1.11. Subordinated Notes. The subordination
provisions relating to the 1998 Subordinated Notes or any other
subordinated debt of the Borrower or any of its Restricted Subsidiaries
(the "Subordination Provisions") shall fail to be enforceable by the
Lenders (which have not effectively waived the benefits thereof) in
accordance with the terms thereof, or the principal or interest on any
Loan, Reimbursement Obligation or other Obligations shall fail to
constitute "Senior Debt" (as defined in any 1998 Subordinated Note) or
"senior indebtedness" (or any other similar term) under any document
instrument or agreement evidencing any such other subordinated debt; or
the Borrower or any of its Subsidiaries shall, directly or indirectly,
disavow or contest in any manner (a) the effectiveness, validity or
enforceability of any of the Subordination Provisions, or (b) that any
of such Subordination Provisions exist for the benefit of the Agents
and the Lenders.
SECTION 8.2. Action if Bankruptcy, etc. If any Event of
Default described in clauses (b), (c) and (d) of Section 8.1.9 shall
occur with respect to any Obligor (other than Subsidiaries that are not
Material Subsidiaries), the Commitments (if not theretofore terminated)
shall automatically terminate and the outstanding principal amount of
all outstanding Loans and all other Obligations (including
Reimbursement Obligations) shall automatically be and become
immediately due and payable, without notice or demand and each Borrower
shall automatically and immediately be obligated to Cash Collateralize
all
123
<PAGE>
Letter of Credit Outstandings in respect of Letters of Credit issued at
the request of such Borrower.
SECTION 8.3. Action if Other Event of Default. If any Event of
Default (other than an Event of Default described in clauses (b), (c)
and (d) of Section 8.1.9 with respect to any Obligor (other than
Subsidiaries that are not Material Subsidiaries)) shall occur for any
reason, whether voluntary or involuntary, and be continuing, the
Administrative Agent, upon the direction of the Required Lenders, shall
by notice to the Company declare all or any portion of the outstanding
principal amount of the Loans and other Obligations (including
Reimbursement Obligations) to be due and payable, require each Borrower
to Cash Collateralize all Letter of Credit Outstandings in respect of
Letters of Credit issued at the request of such Borrower and/or declare
the Commitments (if not theretofore terminated) to be terminated,
whereupon the full unpaid amount of such Loans and other Obligations
which shall be so declared due and payable shall be and become
immediately due and payable, without further notice, demand or
presentment, and/or, as the case may be, the Commitments shall
terminate and each Borrower shall automatically and immediately be
obligated to Cash Collateralize all Letter of Credit Outstandings in
respect of Letters of Credit issued at the request of such Borrower.
ARTICLE IX
THE AGENTS
SECTION 9.1. Actions. Each Lender hereby appoints DLJ as its
Syndication Agent and Bank One as its Administrative Agent under and
for purposes of this Agreement and each other Loan Document. Each
Lender authorizes the Agents to act on behalf of such Lender under this
Agreement and each other Loan Document and, in the absence of other
written instructions from the Required Lenders received from time to
time by the Agents (with respect to which each of the Agents agrees
that it will comply, except as otherwise provided in this Section or as
otherwise advised by counsel), to exercise such powers hereunder and
thereunder as are specifically delegated to or required of the Agents
by the terms hereof and thereof, together with such powers as may be
reasonably incidental thereto, including the authorization to execute
and deliver to the Borrowers on their behalf any Loan Document (other
than the Credit Agreement and any amendment thereto) and any financing
statements, agreements, documents or instruments as shall be necessary
or appropriate to effect the purposes of such Loan Document and the
authorization by the Lenders to execute and deliver to the Borrowers on
their behalf any agreements, documents, or instruments as shall be
necessary or appropriate to effect any releases of Collateral which
shall be permitted by the terms of any Loan Document or which shall
otherwise have been approved by the Required Lenders (or, if so
required, by all of the Lenders). The Administrative Agent may execute
any of its duties as
124
<PAGE>
Administrative Agent under any Loan Document by or through employees,
agents and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its
authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The
Administrative Agent shall be entitled to advice of counsel concerning
the contractual arrangement between the Administrative Agent and the
Lenders and all matters pertaining to the Administrative Agent's duties
under any Loan Document. In its capacity as the Lenders' contractual
representative, the Agents (a) do not hereby assume any fiduciary
duties to any of the Lenders, (b) are "representatives" of the Lenders
within the meaning of Section 9-105 of the UCC and (c) are acting as
independent contractors, the rights and duties of which are limited to
those expressly set forth in the Loan Documents. Each of the Lenders
hereby agrees to assert no claim against the Agents on any agency
theory or any other theory of liability for breach of fiduciary duty,
all of which claims each Lender hereby waives. Each Lender hereby
indemnifies (which indemnity shall survive any termination of this
Agreement) the Agents, ratably in accordance with their respective Term
Loans outstanding and Commitments (or, if no Term Loans or Commitments
are at the time outstanding and in effect, then ratably in accordance
with the principal amount of Term Loans held by such Lender and their
respective Commitments as in effect in each case on the date of the
termination of this Agreement), from and against any and all
liabilities, obligations, losses, damages, claims, costs or expenses of
any kind or nature whatsoever which may at any time be imposed on,
incurred by, or asserted against, either of the Agents in any way
relating to or arising out of this Agreement and any other Loan
Document, including reasonable attorneys' fees, and as to which any
Agent is not reimbursed by the Company or any other Obligor (and
without limiting the obligation of the Company or any other Obligor to
do so); provided, however, that no Lender shall be liable for the
payment of any portion of such liabilities, obligations, losses,
damages, claims, costs or expenses which are determined by a court of
competent jurisdiction in a final proceeding to have resulted solely
from such Agent's gross negligence or willful misconduct. The Agents
shall not be required to take any action hereunder or under any other
Loan Document, or to prosecute or defend any suit in respect of this
Agreement or any other Loan Document, unless it is indemnified
hereunder to its satisfaction. If any indemnity in favor of either of
the Agents shall be or become, in such Agent's determination,
inadequate, such Agent may call for additional indemnification from the
Lenders and cease to do the acts indemnified against hereunder until
such additional indemnity is given. The Borrowers and the Lenders agree
that the Administrative Agent may delegate any of its duties under this
Agreement to any of its Affiliates. Any such Affiliate (and such
Affiliate's directors, officers, agents and employees) which performs
duties in connection with this Agreement shall be entitled to the same
benefits of the indemnification, waiver and other protective provisions
to which such Agent is entitled under Articles IX and XI.
125
<PAGE>
SECTION 9.2. Funding Reliance, etc. Unless the Administrative
Agent shall have been notified by telephone, confirmed in writing, by
any Lender by 3:00 p.m., Chicago time (5:00 p.m., London time, in the
case of Foreign Currency Loans other than Canadian Dollar Loans), on
the Business day prior to a Borrowing or disbursement with respect to a
Letter of Credit pursuant to Section 2.6.2 that such Lender will not
make available the amount which would constitute its Percentage of such
Borrowing on the date specified therefor, the Administrative Agent may
assume that such Lender has made such amount available to the
Administrative Agent and, in reliance upon such assumption, make
available to the applicable Borrower a corresponding amount. If and to
the extent that such Lender shall not have made such amount available
to the Administrative Agent, such Lender severally agrees and the
applicable Borrower agrees to repay the Administrative Agent forthwith
on demand such corresponding amount together with interest thereon, for
each day from the date the Administrative Agent made such amount
available to the applicable Borrower to the date such amount is repaid
to the Administrative Agent, at the interest rate applicable at the
time to Loans comprising such Borrowing.
SECTION 9.3. Exculpation; Notice of Default. (a) None of the
Agents or the Lead Arranger nor any of their respective directors,
officers, employees or agents shall be liable to any Lender or any
Borrower for any action taken or omitted to be taken by it under any
Loan Document, or in connection herewith or therewith, except for its
own willful misconduct or gross negligence, nor responsible for any
recitals or warranties herein or therein, nor for the effectiveness,
enforceability, validity or due execution of any Loan Document, nor for
the creation, perfection or priority of any Liens purported to be
created by any of the Loan Documents, or the validity, genuineness,
enforceability, existence, value or sufficiency of any Collateral, nor
to make any inquiry respecting the performance by the Borrowers of
their obligations hereunder or under any other Loan Document. Any such
inquiry which may be made by any Agent or any Issuer shall not obligate
it to make any further inquiry or to take any action. The Agents and
each Issuer shall be entitled to rely upon advice of counsel concerning
legal matters and upon any notice, consent, certificate, statement or
writing which the Agents or the Issuers, as applicable, believe to be
genuine and to have been presented by a proper Person.
(b) No Agent shall be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default hereunder unless such
Agent has received written notice from (A) in the case of the
Administrative Agent, a Lender or the Company referring to this
Agreement describing such Default or Event of Default and stating that
such notice is a "notice of default" and (B) in the case of the
Syndication Agent, from the Administrative Agent as set forth in the
immediately following sentence. In the event that the Administrative
Agent receives such a notice, the Administrative Agent shall give
prompt notice thereof to the Syndication Agent and the Lenders.
126
<PAGE>
(c) Neither the Administrative Agent nor any of its directors,
officers, agents or employees shall be responsible for or have any duty
to ascertain, inquire into, or verify (i) any statement, warranty or
representation made in connection with any Loan Document or any
borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of any obligor under any Loan Document,
including, without limitation, any agreement by an obligor to furnish
information directly to each Lender; (iii) the satisfaction of any
condition specified in Article V, except receipt of items required to
be delivered solely to the Administrative Agent; (iv) the existence or
possible existence of any Default; (v) the validity, enforceability,
effectiveness, sufficiency, or genuineness of any Loan Document or any
other instrument or writing furnished in connection therewith; (vi) the
value, sufficiency, creation, perfection, or priority of any Lien in
any Collateral; or (vii) the financial condition of any Obligor or such
Obligor's respective Subsidiaries. The Administrative Agent shall have
no duty to disclose to the Lenders information that is not required to
be furnished by the Borrowers to the Administrative Agent at such time,
but is voluntarily furnished by the Borrowers to the Administrative
Agent (either in its capacity as Administrative Agent or in its
individual capacity).
SECTION 9.4. Successor. The Syndication Agent may resign as
such upon one Business Day's notice to the Borrowers and the
Administrative Agent. The Administrative Agent may resign as such at
any time upon at least 30 days' prior notice to the Borrowers and all
Lenders. If the Administrative Agent at any time shall resign, the
Required Lenders may, with the prior consent of the Borrowers (which
consent shall not be unreasonably withheld), appoint another Lender as
a successor Administrative Agent which shall thereupon become the
Administrative Agent hereunder. If no successor Administrative Agent
shall have been so appointed by the Required Lenders, and shall have
accepted such appointment, within 30 days after the retiring
Administrative Agent's giving notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be one of the Lenders or a commercial
banking institution organized under the laws of the United States or a
United States branch or agency of a commercial banking institution, and
having a combined capital and surplus of at least $500,000,000. Upon
the acceptance of any appointment as Administrative Agent hereunder by
a successor Administrative Agent, such successor Administrative Agent
shall be entitled to receive from the retiring Administrative Agent
such documents of transfer and assignment as such successor
Administrative Agent may reasonably request, and shall thereupon
succeed to and become vested with all rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Administrative
Agent's resignation hereunder as the Administrative Agent, the
provisions of (i) this Article IX shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was the
Administrative Agent under this Agreement, and (ii) Section 11.3 and
Section 11.4 shall continue to inure to its benefit. In the event that
there is a successor to the Administrative
127
<PAGE>
Agent by merger, or the Administrative Agent assigns its duties and
obligations to an Affiliate pursuant to this Section 9.4, then the term
"Prime Rate" as used in this Agreement shall mean the prime rate, base
rate, or other analogous rate of the new Administrative Agent.
SECTION 9.5. Credit Extensions by each Agent. Each Agent and
each Issuer shall have the same rights and powers with respect to (x)
(i) in the case of an Agent, the Credit Extensions made by it or any of
its Affiliates and (ii) in the case of an Issuer, the Loans made by it
or any of its Affiliates, and (y) the Notes held by it or any of its
Affiliates as any other Lender and may exercise the same as if it were
not an Agent or Issuer. Each Agent, each Issuer and each of their
respective Affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with the Borrowers or any
Subsidiary or Affiliate of any Borrower as if such Agent or Issuer were
not an Agent or Issuer hereunder.
SECTION 9.6. Credit Decisions. Each Lender acknowledges that
it has, independently of each other Lender Party, and based on such
Lender's review of the financial information of the Company, this
Agreement, the other Loan Documents (the terms and provisions of which
being satisfactory to such Lender) and such other documents,
information and investigations as such Lender has deemed appropriate,
made its own credit decision to extend its Commitments. Each Lender
also acknowledges that it will, independently of each other Lender
Party, and based on such other documents, information and
investigations as it shall deem appropriate at any time, continue to
make its own credit decisions as to exercising or not exercising from
time to time any rights and privileges available to it under any Loan
Document.
SECTION 9.7. Copies, etc. The Administrative Agent shall give
prompt notice to each Lender of each notice or request required or
permitted to be given to the Administrative Agent by any Borrower
pursuant to the terms of this Agreement (unless concurrently delivered
to the Lenders by such Borrower). The Administrative Agent will
distribute to each Lender each document or instrument received for such
Lender's account and copies of all other communications received by the
Administrative Agent from the Borrowers for distribution to the Lenders
by the Administrative Agent in accordance with the terms of this
Agreement.
SECTION 9.8. The Syndication Agent and the Administrative
Agent. Notwithstanding anything else to the contrary contained in this
Agreement or any other Loan Document, the Agents, in their respective
capacities as such, each in such capacity, shall have no duties or
responsibilities under this Agreement or any other Loan Document nor
any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or
128
<PAGE>
otherwise exist against either Agent, as applicable, in such capacity
except as are explicitly set forth herein or in the other Loan
Documents.
SECTION 9.9. Co-Documentation Agents. The Lender identified on
the signature pages of this Agreement as the "Co-Documentation Agents"
shall not have any right, power, obligation, liability, responsibility
or duty under this Agreement (or any other Loan Document) other than
those applicable to all Lenders as such. Without limiting the
foregoing, the Lenders so identified as the "Co-Documentation Agents"
shall not have or be deemed to have any fiduciary relationship with any
other Lender. Each Lender acknowledges that it has not relied, and will
not rely, on any Lender so identified as the "Co-Documentation Agent"
in deciding to enter into this Agreement and each other Loan Document
to which it is a party or in taking or not taking action hereunder or
thereunder.
SECTION 9.10. Action on Instructions of Lenders. The
Administrative Agent shall in all cases be fully protected in acting,
or in refraining from acting, under any Loan Document in accordance
with written instructions signed by the Required Lenders, and such
instructions and any action taken or failure to act pursuant thereto
shall be binding on all of the Lenders. The Lenders hereby acknowledge
that the Administrative Agent shall be under no duty to take any
discretionary action permitted to be taken by it pursuant to the
provisions of any Loan Document unless it shall be requested in writing
to do so by the Required Lenders. The Administrative Agent shall be
fully justified in failing or refusing to take any action under any
Loan Document unless it shall first be indemnified to its satisfaction
by the Lenders pro rata against any and all liability, cost, and
expense that it may incur by reason of taking or continuing to take any
such action.
SECTION 9.11. Canadian Collateral Documents. (a) Without
prejudice to the provisions of Section 9.1, each Lernder Party hereby
designates and appoints the Administrative Agent as the person holding
the power of attorney (fonde de pouvoir) of the Lender Parties as
contemplated under Article 2692 of the Civil Code of Quebec, to enter
into, to take and to hold on their behalf, and for their benefit, the
Canadian Hypothecs and to exercise such powers and duties which are
conferred upon the Administrative Agent under the Canadian Hypothecs.
Any Person who becomes a Lender Party shall be deemed to have consented
to and confirmed the Administrative Agent as the person holding the
power of attorney (fonde de pouvoir) and to have ratified as of the
date it becomes a Lender Party all actions taken by the Administrative
Agent in such capacity. As the person holding the power of attorney
(fonde de pouvoir), the Administrative Agent shall be entitled to
delegate from time to time any of its powers or duties under the
Canadian Hypothecs to any Person and on such terms and conditions as
the Administrative Agent may determine from time to time.
129
<PAGE>
(b) Without prejudice to the designations and appointment of
the Administrative Agent as the person holding the power of attorney
(fonde de pouvoir), each Lender Party hereby additionally designates
and appoints the Administrative Agent as agent and custodian for and on
behalf of each of them to hold and to be the sole registered holder of
any bond issued under any Canadian Hypothecs, notwithstanding Section
32 of the Special Corporate Powers Act (Quebec) or any other
Requirement of Law. In this respect, (i) the Administrative Agent, as
agent and custodian of the Lender Parties, shall keep a record
indicating the names and addresses of, and the pro rata portion of the
Obligations secured by the Canadian Hypothecs owing to, the Persons for
and on behalf of whom the aforesaid bond is so held from time to time
and (ii) each Lender Party will be entitled to the benefits of any
Collateral subject to any Canadian Hypothecs and will participate in
the proceeds of realization of any such Collateral, the whole in
accordance with the terms hereof. The Administrative Agent, in such
capacity as agent and custodian shall, (x) have the sole and exclusive
right and authority to exercise, except as may be otherwise
specifically restricted by the terms hereof, all rights and remedies
given to the Lender Parties with respect to the Collateral under the
Canadian Hypothecs, applicable law or otherwise, and (y) benefit from
and be subject to all provisions hereof with respect to the
Administrative Agent mutatis mutandis, including, without limitation,
all such provisions with respect to the liability or responsibility to
and indemnification by the Lender Parties. Any Person who becomes a
Lender Party shall be deemed to have consented to and confirmed the
Administrative Agent as the agent and custodian and to have ratified as
of the date it becomes a Lender Party all actions taken by the
Administrative Agent in such capacity. As agent and custodian, the
Administrative Agent shall be entitled to delegate from time to time
any of its powers or duties hereunder to any Person and on such terms
and conditions as the Administrative Agent may determine from time to
time.
SECTION 9.12. Release of Certain Liens and Obligations. On the
Effective Date, the Liens created under the Loan Documents on any of
the assets constituting any assets of a Sold Division or a Sold
Subsidiary or the Capital Stock of a Sold Subsidiary shall be
automatically released and each Sold Subsidiary of the Company that is
a guarantor under the Existing Credit Agreement shall be automatically
released from its obligations under such guaranty, and each Lender
hereby consents to such release and to the Administrative Agent
executing such documents (including without limitation UCC-3 releases)
as shall be reasonably requested by the Company to evidence such
release. The Administrative Agent agrees that it shall execute any such
documents reasonably requested by the Company, at the expense of the
Company.
ARTICLE X
COMPANY GUARANTY
130
<PAGE>
SECTION 10.1. Guaranty. The Company hereby absolutely,
unconditionally and irrevocably
(a) guarantees the full and punctual payment when
due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise, of all
Obligations of the Canadian Borrower now or hereafter existing
under this Agreement and each other Loan Document to which the
Canadian Borrower is or may become a party, whether for
principal, interest, fees, expenses or otherwise (including
all such amounts which would become due but for the operation
of the automatic stay under Section 362(a) of the United
States Bankruptcy Code, 11 U.S.C. ss.362(z), and the operation
of Section 502(b) and 506(b) of the United States Bankruptcy
Code, 11 U.S.C. ss.502(b) and ss.506(b)), and
(b) indemnifies and holds harmless each Lender for
any and all costs and expenses (including reasonable
attorney's fees and expense) incurred by such Lender, in
enforcing any rights under this Article X.
This Article X constitutes a guaranty of payment when due and not of
collection, and the Company specifically agrees that it shall not be
necessary or required that any Lender exercise any right, assert any
claim or demand or enforce any remedy whatsoever against any other
Obligor (or any other Person) before or as a condition to the
obligations of the Company hereunder.
SECTION 10.2. Acceleration of Obligations Hereunder. The
Company agrees that, in the event of the dissolution or insolvency of
the Canadian Borrower, or the inability or failure of the Canadian
Borrower to pay its debts as they become due, or an assignment by the
Canadian Borrower for the benefit of creditors, or the commencement of
any case or proceeding in respect of the Canadian Borrower under any
bankruptcy, insolvency or similar laws, and if such event shall occur
at a time when any of the Obligations of the Canadian Borrower may not
then be due and payable, the Company agrees that it will pay to the
Lenders forthwith the full amount which would be payable hereunder by
the Canadian Borrower if all such Obligations were then due and
payable. The foregoing provisions of this Section 10.2 shall not be
applicable if the dissolution, insolvency or other events described
above relate to an Immaterial Subsidiary.
SECTION 10.3. Obligations Hereunder Absolute, etc. The
obligations of the Company under this Article X shall in all respects
be a continuing, absolute, unconditional and irrevocable guaranty of
payment, and shall remain in full force and effect until all
Obligations of the Canadian Borrower have been paid in full and all
Commitments shall have terminated. The Company guarantees that the
Obligations of the Canadian Borrower will be paid strictly in
accordance with the terms of this Agreement and each other Loan
Document under which they arise, regardless of any law,
131
<PAGE>
regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of any Lender or any holder
of any Note with respect thereto. The liability of the Company under
this Article X shall be absolute, unconditional and irrevocable
irrespective of:
(a) any lack of validity, legality or enforceability
of the other provisions of this Agreement or any other Loan
Document;
(b) the failure of any Lender
(i) to assert any claim or demand or to
enforce any right or remedy against the Canadian
Borrower or any other Person (including any other
guarantor) under the provisions of any Loan Document
or otherwise, or
(ii) to exercise any right or remedy
against the other guarantor of, or Collateral
securing, any Obligations of the Canadian Borrower;
(c) any change in the time, manner or place of
payment of, or in any term of, all or any of the Obligations
of the Canadian Borrower, or any other extension, compromise
or renewal of any Obligation of the Canadian Borrower;
(d) any reduction, limitation, impairment or
termination of any Obligation of the Canadian Borrower for any
reason, including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to (and the
Company hereby waives any right to or claim of) any defense or
setoff, counterclaim, recoupment or termination whatsoever by
reason of the invalidity, illegality, nongenuineness,
irregularity, compromise, unenforceability of, or any other
event or occurrence affecting, any Obligation of the Canadian
Borrower or otherwise;
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the
other terms of this Agreement or any other Loan Document;
(f) any addition, exchange, release, surrender or
non-perfection of any Collateral, or any amendment to or
waiver or release or addition of, or consent to departure
from, any other guaranty, held by any Lender securing any of
the Obligations of the Canadian Borrower; or
(g) any other circumstance which might otherwise
constitute a defense available to, or a legal or equitable
discharge of, the Canadian Borrower, any surety or any
guarantor.
132
<PAGE>
SECTION 10.4. Reinstatement, etc. The Company agrees that this
Article X shall continue to be effective or be reinstated, as the case
may be, if at any time any payment (in whole or in part) of any of the
Obligations of the Canadian Borrower is rescinded or must otherwise be
restored by any Lender upon the insolvency, bankruptcy or
reorganization of the Canadian Borrower or otherwise, all as though
such payment had not been made.
SECTION 10.5. Waiver, etc. The Company hereby waives
promptness, diligence, notice of acceptance and any other notice with
respect to any of the Obligations of the Canadian Borrower and this
Article X and any requirement that the Administrative Agent and any
other Lender protect, secure or perfect or insure any security interest
or Lien, or any property subject thereto, or exhaust any right or take
any action against the Canadian Borrower or any other Person (including
any other guarantor) or entity or any Collateral securing the
Obligations of the Canadian Borrower.
SECTION 10.6. Postponement of Subrogation. The Company agrees
that it will not exercise any rights which it may acquire by way of
subrogation under this Article X, by any payment made hereunder or
otherwise, until the prior payment, in full and in cash, of all
Obligations of the Canadian Borrower. Any amount paid to the Company on
account of any such subrogation rights prior to the Termination Date
shall be held in trust for the benefit of the Lenders and shall
immediately be paid to the Lenders and credited and applied against the
Obligations of the Canadian Borrower whether matured or unmatured, in
accordance with the terms of this Agreement; provided, however, that if
all Obligations of the Canadian Borrower have been paid in full and all
Commitments have been permanently terminated, each Lender agrees that,
at the Company's request, the Lenders will execute and deliver to the
Company appropriate documents (without recourse and without
representation or warranty) necessary to evidence the transfer by
subrogation to the Company of an interest in the Obligations of the
Canadian Borrower resulting from such payment by the Company. In
furtherance of the foregoing, for so long as any Obligations of the
Canadian Borrower or any Commitments remain outstanding, the Company
shall refrain from taking any action or commencing any proceeding
against the Canadian Borrower (or its successors or assigns), whether
in connection with a bankruptcy proceeding or otherwise to recover any
amounts in respect of payments made under this Article X to any Lender.
SECTION 10.7. Successors, Transferees and Assigns; Transfers
of Notes, etc. Without limiting the generality of Section 11.11, any
Lender may assign or otherwise transfer (in whole or in part) any
Obligation of the Canadian Borrower held by it to any other Person, and
such other Person shall thereupon become vested with all rights and
benefits in respect thereof granted to such Lender under any Loan
Document (including this Article X) or otherwise, subject, however, to
any contrary provisions in such
133
<PAGE>
assignment or transfer, and to the provisions of Section 11.11 and
Article IX of this Agreement.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1. Waivers, Amendments, etc. The provisions of this
Agreement and of each other Loan Document may from time to time be
amended, modified or waived, if such amendment, modification or waiver
is in writing and consented to by the Company and each Obligor party
thereto and by the Required Lenders; provided, however, that any such
amendment, modification or waiver of the type set forth below shall
require the consent of the Person or Persons described below for such
amendment, modification or waiver:
(a) Unless consented to by each Lender, no such
amendment, modification or waiver shall be effective if it
would modify any requirement hereunder that any particular
action be taken by all the Lenders, all the Lenders with
respect to any Tranche of Loans or Commitments or by the
Required Lenders, release Holdco from its obligations under
the Holdco Guaranty and Pledge Agreement, release any
Subsidiary Guarantor or Subsidiary Guarantors that
individually or in the aggregate constitute a Substantial
Subsidiary from its or their obligations under the Subsidiary
Guaranty (except as otherwise provided in the Subsidiary
Guaranty), if any, or release all or substantially all of the
Collateral (except in each case as otherwise specifically
provided in this Agreement, any such Subsidiary Guaranty or a
Pledge Agreement).
(b) Unless consented to by each Lender adversely
affected thereby, no such amendment, modification or waiver
shall be effective if it would modify this Section 11.1, or
clause (a) of Section 11.10, change the definition of
"Required Lenders", increase any Commitment Amount or the
Percentage of any Lender (other than pursuant to Section
2.2.2), reduce any fees described in Section 3.3 (other than
the administration fee referred to in Section 3.3.2) or extend
any Commitment Termination Date.
(c) No such amendment, modification or waiver shall
be effective if it would extend the Stated Maturity Date for
any Loan, reduce the principal amount of or rate of interest
on or fees payable in respect of any Loan or any Reimbursement
Obligation (which shall in each case include the conversion of
all or any part of the Obligation into equity of any Obligor)
or extend the date on which interest or fees are payable in
respect of any Loan or any Reimbursement
134
<PAGE>
Obligation, unless such amendment, modification or waiver
shall have been consented to by the Lender which has made such
Loan or, in the case of a Reimbursement Obligation, the Issuer
owed, and those Lenders participating in, such Reimbursement
Obligation.
(d) No such amendment, modification or waiver shall
be effective if it would affect adversely the interests,
rights or obligations of any Agent, Issuer or Lead Arranger
(in its capacity as Agent, Issuer or Lead Arranger), unless
such amendment, modification or waiver shall have been
consented to by such Agent, Issuer or Lead Arranger, as the
case may be.
(e) No such amendment, modification or waiver shall
be effective if it would amend, modify or waive the provisions
of clause (a)(i) of Section 3.1.1 or clause (b) of Section
3.1.2 or effect any amendment, modification or waiver that by
its terms adversely affects the rights of Lenders
participating in any Tranche differently from those of Lenders
participating in other Tranches, unless such amendment,
modification or waiver shall have been consented to by the
holders of at least 51% of the aggregate amount of Loans
outstanding under the Tranche or Tranches affected by such
modification, or, in the case of a modification affecting the
Revolving Loan Commitments, the Lenders holding at least 51%
of the Revolving Loan Commitments.
No failure or delay on the part of any Lender Party in exercising any
power or right under any Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power or
right preclude any other or further exercise thereof or the exercise of
any other power or right. No notice to or demand on any Borrower in any
case shall entitle it to any notice or demand in similar or other
circumstances. No waiver or approval by any Lender Party under any Loan
Document shall, except as may be otherwise stated in such waiver or
approval, be applicable to subsequent transactions. No waiver or
approval hereunder shall require any similar or dissimilar waiver or
approval thereafter to be granted hereunder.
For purposes of this Section 11.1, the Syndication Agent, in
coordination with the Administrative Agent, shall have primary
responsibility, together with the Company, in the negotiation,
preparation and documentation relating to any amendment, modification
or waiver under this Agreement, any other Loan Document or any other
agreement or document related hereto or thereto contemplated pursuant
to this Section.
SECTION 11.2. Notices. All notices and other communications
provided to any party under this Agreement or any other Loan Document
shall be in writing or by facsimile and addressed, delivered or
transmitted to such party (a) in the case of any Lender by any party
other than the Administrative Agent, to such Lender in care of the
135
<PAGE>
Administrative Agent at its address or facsimile number set forth on
Schedule II hereto (and the Administrative Agent shall promptly forward
such notice to the address or facsimile number of such Lender set forth
on Schedule II hereto or in the Lender Assignment Agreement pursuant to
which such Lender became a Lender hereunder), (b) in the case of any
Lender by the Administrative Agent, to such Lender at its address or
facsimile number set forth on its signature page hereto or in the
Lender Assignment Agreement pursuant to which it became a party hereto,
(c) in the case of any Agent or the Company, at its address or
facsimile number set forth on Schedule II hereto, or (d) in the case of
the Canadian Borrower, in care of the Company at the Company's address
or facsimile number set forth on Schedule II hereto, or, in any case,
at such address or facsimile number as may be designated by such party
in a notice to the other parties. Any notice, if mailed and properly
addressed with postage prepaid or if properly addressed and sent by
pre-paid courier service, shall be deemed given when received; any
notice, if transmitted by facsimile, shall be deemed given when
transmitted (receipt acknowledged).
SECTION 11.3. Payment of Costs and Expenses. The Company
hereby agrees to pay on demand all reasonable expenses of each of the
Agents (including the reasonable fees and out-of-pocket expenses of
counsel to the Agents and of local or foreign counsel, if any, who may
be retained by such legal counsel to the Agents) in connection with
(a) the syndication by the Syndication Agent and the
Lead Arranger of the Loans, the negotiation, preparation,
execution and delivery of this Agreement and of each other
Loan Document (whether or not executed or effective),
including schedules and exhibits, and any amendments, waivers,
consents, supplements or other modifications to this Agreement
or any other Loan Document as may from time to time hereafter
be required, whether or not the transactions contemplated
hereby are consummated;
(b) the filing, recording, refiling or rerecording of
any Loan Document and/or any UCC financing statements relating
thereto and all amendments, supplements and modifications to
any thereof and any and all other documents or instruments of
further assurance required to be filed or recorded or refiled
or rerecorded by the terms hereof or of such Loan Document;
and
(c) the preparation and review of any document or
instrument relevant to any Loan Document.
The Company further agrees to pay, and to save the Agents, the Issuers
and the Lenders harmless from all liability for, any stamp or other
similar taxes which may be payable in connection with the execution or
delivery of this Agreement, the Credit Extensions made hereunder or the
issuance of any Notes or Letters of Credit or any other Loan Documents.
136
<PAGE>
The Company agrees to reimburse each Agent, each Issuer and each Lender
upon demand for all reasonable out-of-pocket expenses (including
reasonable attorneys' fees and legal expenses) incurred by such Agent,
such Issuer or such Lender in connection with (x) the negotiation of
any restructuring or "work-out", whether or not consummated, of any
Obligations and (y) the enforcement of any Obligations.
SECTION 11.4. Indemnification. In consideration of the
execution and delivery of this Agreement by each Lender and the
extension of the Commitments, the Company hereby, to the fullest extent
permitted under applicable law, indemnifies, exonerates and holds each
Lender Party and each of their respective Affiliates, and each of their
respective partners, officers, directors, employees and agents, and
each other Person controlling any of the foregoing within the meaning
of either Section 15 of the Securities Act of 1933, as amended, or
Section 20 of the Securities Exchange Act of 1934, as amended
(collectively, the "Indemnified Parties"), free and harmless from and
against any and all actions, causes of action, suits, losses, costs,
liabilities and damages, and expenses actually incurred in connection
therewith (irrespective of whether any such Indemnified Party is a
party to the action for which indemnification hereunder is sought),
including reasonable attorneys' fees and disbursements (collectively,
the "Indemnified Liabilities"), incurred by the Indemnified Parties or
any of them as a result of, or arising out of, or relating to
(a) any transaction financed or to be financed in
whole or in part, directly or indirectly, with the proceeds of
any Credit Extension;
(b) the entering into and performance of this
Agreement and any other Loan Document by any of the
Indemnified Parties (excluding any successful action brought
by or on behalf of any Borrower as the result of any failure
by any Lender to make any Credit Extension hereunder);
(c) any investigation, litigation or proceeding
related to any acquisition or proposed acquisition by the
Company or any Subsidiary of all or any portion of the Capital
Stock or assets of any Person, whether or not such Agent, such
Issuer, such Lead Arranger or such Lender is party thereto;
(d) any alleged or actual investigation, litigation
or proceeding related to any environmental cleanup, audit or
noncompliance with or liability under any Environmental Law
relating to the use, ownership or operation by Holdco, the
Company or any Subsidiary of any Hazardous Material; or
(e) the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission or release from, any
real property owned or operated by Holdco, the Company or any
Subsidiary thereof of any Hazardous Material
137
<PAGE>
present on or under such property in a manner giving rise to
liability at or prior to the time Holdco, the Company or such
Subsidiary owned or operated such property (including any
losses, liabilities, damages, injuries, costs, expenses or
claims asserted or arising under any Environmental Law),
regardless of whether caused by, or within the control, of
Holdco, the Company or such Subsidiary,
except for any such Indemnified Liabilities arising for the account of
a particular Indemnified Party by reason of the relevant Indemnified
Party's gross negligence or willful misconduct or any Hazardous
Materials that are manufactured, emitted, generated, treated, released,
stored or disposed of on any real property of the Company or any of its
Subsidiaries or any violation of Environmental Law that occurs on or
with respect to any real property of the Company or any of its
Subsidiaries to the extent occurring after such real property is
transferred to any Indemnified Person or its successor by foreclosure
sale, deed in lieu of foreclosure, or similar transfer, except to the
extent such manufacture, emission, release, generation, treatment,
storage or disposal or violation is actually caused by Holdco, the
Company or any of the Company's Subsidiaries. The Company and its
permitted successors and assigns hereby waive, release and agree not to
make any claim, or bring any cost recovery action against, any Lender
Party under CERCLA or any state equivalent, or any similar law now
existing or hereafter enacted, except to the extent arising out of the
gross negligence or willful misconduct of any Indemnified Party or
arising out of any Hazardous Materials that are manufactured, emitted,
generated, treated, released, stored or disposed of on any real
property of the Company or any Subsidiary or any violation of
Environmental Law that occurs on or with respect to any real property
of the Company or any Subsidiary to the extent occurring after such
real property is transferred to any Indemnified Person or its successor
by foreclosure sale, deed in lieu of foreclosure, or similar transfer.
It is expressly understood and agreed that to the extent that any
Indemnified Party is strictly liable under any Environmental Laws, the
Company's obligation to such Indemnified Party under this indemnity
shall likewise be without regard to fault on the part of the Company,
to the extent permitted under applicable law, with respect to the
violation or condition which results in liability of such Indemnified
Party. Notwithstanding anything to the contrary herein, each Lender
Party shall be responsible with respect to any Hazardous Materials that
are manufactured, emitted, generated, treated, released, stored or
disposed of on any real property of the Company or any Subsidiary or
any violation of Environmental Law that occurs on or with respect to
any such real property to the extent it occurs after such real property
is transferred to any Lender Party to its successor by foreclosure
sale, deed in lieu of foreclosure, or similar transfer, except to the
extent such manufacture, emission, release, generation, treatment,
storage or disposal or violation is actually caused by Holdco, the
Company or any of the Company's Subsidiaries. If and to the extent that
the foregoing undertaking may be unenforceable for any reason, the
Company hereby agrees to make the maximum contribution to the payment
and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.
138
<PAGE>
SECTION 11.5. Survival. The obligations of the Borrowers under
Sections 4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and the obligations of the
Lenders under Sections 4.8 and 9.1, shall in each case survive any
termination of this Agreement, the payment in full of all Obligations
and the termination of all Commitments. The representations and
warranties made by the Company and each other Obligor in this Agreement
and in each other Loan Document shall survive the execution and
delivery of this Agreement and each such other Loan Document.
SECTION 11.6. Severability. Any provision of this Agreement or
any other Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such provision and such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions of this Agreement or such
Loan Document or affecting the validity or enforceability of such
provision in any other jurisdiction.
SECTION 11.7. Headings. The various headings of this Agreement
and of each other Loan Document are inserted for convenience only and
shall not affect the meaning or interpretation of this Agreement or
such other Loan Document or any provisions hereof or thereof.
SECTION 11.8. Execution in Counterparts, Effectiveness, etc.
This Agreement may be executed by the parties hereto in several
counterparts, each of which shall be deemed to be an original and all
of which shall constitute together but one and the same agreement. This
Agreement shall become effective when counterparts hereof executed on
behalf of each of the parties hereto shall have been received by the
Agents.
SECTION 11.9. Governing Law; Entire Agreement. THIS AGREEMENT,
ANY NOTES AND, EXCEPT TO THE EXTENT OTHERWISE EXPRESSLY PROVIDED
THEREIN, EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT
MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
This Agreement and the other Loan Documents constitute the entire
understanding among the parties hereto with respect to the subject
matter hereof and supersede any prior agreements, written or oral, with
respect thereto. Upon the execution and delivery of this Agreement by
the parties hereto, all obligations and liabilities of the Company
under or relating or with respect to the Commitment Letter shall be
terminated and of no further force or effect.
SECTION 11.10. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns; provided, however, that (a) no
Borrower may assign or transfer its rights or obligations hereunder
without the prior written consent of each of the Agents and all
139
<PAGE>
Lenders, and (b) the rights of sale, assignment and transfer of the
Lenders are subject to Section 11.11.
SECTION 11.11. Sale and Transfer of Loans and Commitments;
Participations in Loans. Each Lender may assign, or sell participations
in, its Loans and Commitments to one or more other Persons, on a non
pro rata basis (except as provided below), in accordance with this
Section 11.11.
SECTION 11.11.1. Assignments. Any Lender (the "Assignor
Lender"),
(a) with the written consents of the Company, the
Agents and (in the case of any assignment of participations in
Letters of Credit or Revolving Loan Commitments) the Issuers
(which consents (i) shall not be unreasonably delayed or
withheld, (ii) of the Company shall not be required upon the
occurrence and during the continuance of any Event of Default,
(iii) of the Agents and the Issuers shall not be required in
the case of assignments made by DLJ or any of its Affiliates
and (iv) of any other Person shall not be required in the case
of assignments made by DLJ or any of its Affiliates to another
Lender or an Affiliate of another Lender), may at any time
assign and delegate to one or more commercial banks, funds
that are regularly engaged in making, purchasing or investing
in loans or securities, or other financial institutions, and
(b) with notice to the Company, the Agents and (in
the case of any assignment of participations in Letters of
Credit or Revolving Loan Commitments) the Issuers, but without
the consent of the Company, the Agents or the Issuers, may
assign and delegate to any of its Affiliates or Related Funds
or to any other Lender or any Affiliate or Related Fund of any
other Lender
(each Person described in either of the foregoing clauses as being the
Person to whom such assignment and delegation is to be made, being
hereinafter referred to as an "Assignee Lender"), all or any fraction
of such Assignor Lender's Loans, participations in Letters of Credit
and Letter of Credit Outstandings with respect thereto and Commitments
(which assignment and delegation shall be, as among Revolving Loan
Commitments, Revolving Loans and participations in Letters of Credit,
of a constant, and not a varying, percentage) in a minimum aggregate
amount of (i) $5,000,000, in the case of Revolving Loans, Revolving
Loan Commitments or Term-A Loans, and $2,500,000, in the case of Term-B
Loans (provided, however, that (1) assignments that are made on the
same day to funds that (x) invest in commercial loans and (y) are
managed or advised by the same investment advisor or any Affiliate of
such investment advisor may be treated as a single assignment for
purposes of the minimum amount and (2) no minimum amount shall be
required in the case of any assignment between two Lenders so long as
the Assignor Lender has an aggregate amount of Loans and Commitments of
at least $5,000,000, in the
140
<PAGE>
case of Revolving Loans, Revolving Loan Commitments and Term-A Loans,
and $2,500,000, in the case of Term-B Loans following such assignment)
unless the Company and the Agents otherwise consent or (ii) the then
remaining amount of such Assignor Lender's Loans and Commitments;
provided, however, that any such Assignee Lender will comply, if
applicable, with the provisions contained in Section 4.6 and, each
Obligor and the Agents shall be entitled to continue to deal solely and
directly with such Assignor Lender in connection with the interests so
assigned and delegated to an Assignee Lender until
(c) written notice of such assignment and delegation,
together with payment instructions, addresses and related
information with respect to such Assignee Lender, shall have
been given to the Company and the Agents by such Assignor
Lender and such Assignee Lender;
(d) such Assignee Lender shall have executed and
delivered to the Company and the Agents a Lender Assignment
Agreement, accepted by the Agents;
(e) the processing fees described below shall have
been paid; and
(f) the Administrative Agent shall have registered
such assignment and delegation in the Register pursuant to
clause (b) of Section 2.7.
From and after the date that the Agents accept such Lender Assignment
Agreement and such assignment and delegation is registered pursuant to
clause (b) of Section 2.7, (x) the Assignee Lender thereunder shall be
deemed automatically to have become a party hereto and to the extent
that rights and obligations hereunder have been assigned and delegated
to such Assignee Lender in connection with such Lender Assignment
Agreement, shall have the rights and obligations of a Lender hereunder
and under the other Loan Documents, and (y) the Assignor Lender, to the
extent that rights and obligations hereunder have been assigned and
delegated by it in connection with such Lender Assignment Agreement,
shall be released from its obligations hereunder and under the other
Loan Documents. Any Assignor Lender that shall have previously
requested and received any Note or Notes of any Borrower in respect of
any Tranche to which any such assignment applies shall, upon the
acceptance by the Administrative Agent of the applicable Lender
Assignment Agreement, mark such Note or Notes "exchanged" and deliver
them to such Borrowers (against, if the Assignor Lender has retained
Loans or Commitments with respect to the applicable Tranche and has
requested replacement Notes pursuant to clause (b)(ii) of Section 2.7,
its receipt from such Borrower of replacement Notes in the principal
amount of the Loans and Commitments of the applicable Tranche retained
by it). Such Assignor Lender or such Assignee Lender (unless the
Assignor Lender or the Assignee Lender is DLJ or one of its Affiliates)
must
141
<PAGE>
also pay a processing fee to the Administrative Agent upon delivery of
any Lender Assignment Agreement in the amount of $3,500, unless such
assignment and delegation is by a Lender to its Affiliate or Related
Fund or if such assignment and delegation is by a Lender to a Federal
Reserve Bank, as provided below or is otherwise consented to by the
Administrative Agent. Any attempted assignment and delegation not made
in accordance with this Section 11.11.1 shall be null and void. Nothing
contained in this Section 11.11.1 shall prevent or prohibit any Lender
from pledging its rights (but not its obligations to make Loans or
participate in Letters of Credit or Letter of Credit Outstandings)
under this Agreement and/or its Loans hereunder to a Federal Reserve
Bank in support of borrowings made by such Lender from such Federal
Reserve Bank and any Lender that is a fund that invests in bank loans
may pledge all or any portion of its rights (but not its obligations to
make Loans or participate in Letters of Credit or Letter of Credit
Outstandings) hereunder to any trustee or any other representative of
holders of obligations owed or securities issued by such fund as
security for such obligations or securities. In the event that S&P,
Moody's or Thompson's BankWatch (or InsuranceWatch Ratings Service, in
the case of Lenders that are insurance companies (or Best's Insurance
Reports, if such insurance company is not rated by Insurance Watch
Ratings Service)) shall, after the date that any Lender with a
Commitment to make Revolving Loans or participate in Letters of Credit
becomes a Lender, downgrades the long-term certificate of deposit
rating or long-term senior unsecured debt rating of such Lender, and
the resulting rating shall be below BBB-, Baa3 or C (or BB, in the case
of Lender that is an insurance company (or B, in the case of an
insurance company not rated by InsuranceWatch Ratings Service)),
respectively, then the applicable Issuer or the Company shall have the
right, but not the obligation, upon notice to such Lender and the
Agents, to replace such Lender with an Assignee Lender in accordance
with and subject to the restrictions contained in this Section, and
such Lender hereby agrees to transfer and assign without recourse (in
accordance with and subject to the restrictions contained in this
Section) all its interests, rights and obligations in respect of its
Revolving Loan Commitment under this Agreement to such Assignee Lender;
provided, however, that (i) no such assignment shall conflict with any
law, regulation or order of any governmental authority and (ii) such
Assignee Lender shall pay to such Lender in immediately available funds
on the date of such assignment the principal of and interest and fees
(if any) accrued to the date of payment on the Loans made, and Letters
of Credit participated in, by such Lender hereunder and all other
amounts accrued for such Lender's account or owed to it hereunder.
SECTION 11.11.2. Participations. Any Lender may at any time
sell to one or more commercial banks or other Persons (each such
commercial bank and other Person being herein called a "Participant")
participating interests in any of the Loans, Commitments,
participations in Letters of Credit and Letters of Credit Outstandings
or other interests of such Lender hereunder; provided, however, that
142
<PAGE>
(a) no participation contemplated in this Section
shall relieve such Lender from its Commitments or its other
obligations hereunder or under any other Loan Document;
(b) such Lender shall remain solely responsible for
the performance of its Commitments and such other obligations;
(c) the Company and each other Obligor and the Agents
shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under
this Agreement and each of the other Loan Document;
(d) no Participant, unless such Participant is an
Affiliate or Related Fund of such Lender, or is itself a
Lender, shall be entitled to require such Lender to take or
refrain from taking any action hereunder or under any other
Loan Document, except that such Lender may agree with any
Participant that such Lender will not, without such
Participant's consent, agree to (i) any reduction in the
interest rate or amount of fees that such Participant is
otherwise entitled to, (ii) a decrease in the principal
amount, or an extension of the final Stated Maturity Date, of
any Loan in which such Participant has purchased a
participating interest or (iii) a release of all or
substantially all of the Collateral under the Loan Documents
or any Subsidiary Guarantor or Subsidiary Guarantors that
individually or in the aggregate constitute a Substantial
Subsidiary from its or their obligations under the Subsidiary
Guaranty, in each case except as otherwise specifically
provided in a Loan Document; and
(e) the Borrowers shall not be required to pay any
amount under Sections 4.3, 4.4, 4.5, 4.6, 11.3 and 11.4 that
is greater than the amount which it would have been required
to pay had no participating interest been sold.
The Borrowers acknowledge and agree, subject to clause (e) above, that,
to the fullest extent permitted under applicable law, each Participant,
for purposes of Sections 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 11.3 and 11.4,
shall be considered a Lender.
SECTION 11.12. Other Transactions. Nothing contained herein
shall preclude any Lender Party from engaging in any transaction, in
addition to those contemplated by this Agreement or any other Loan
Document, with any Borrower or any Affiliate of any Borrower in which
such Borrower or such Affiliate is not restricted hereby from engaging
with any other Person.
SECTION 11.13. Forum Selection and Consent to Jurisdiction.
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS AGREEMENT OR ANY OTHER LOAN
143
<PAGE>
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE LENDER PARTIES, OR THE
BORROWERS RELATING THERETO SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY
(TO THE EXTENT PERMITTED UNDER APPLICABLE LAW) IN THE COURTS OF THE
STATE OF NEW YORK, NEW YORK COUNTY, OR IN THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY
MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF
ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.
THE BORROWERS HEREBY EXPRESSLY AND IRREVOCABLY SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, NEW YORK COUNTY,
AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND
IRREVOCABLY AGREE TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH SUCH LITIGATION. THE BORROWERS IRREVOCABLY CONSENT TO
THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY
PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. THE BORROWERS
HEREBY EXPRESSLY AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION WHICH THEY MAY HAVE OR HEREAFTER MAY HAVE TO THE
LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY BORROWER HAS
OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OF
FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH
RESPECT TO ITSELF OR ITS PROPERTY, THE BORROWERS HEREBY IRREVOCABLY
WAIVE (TO THE EXTENT PERMITTED UNDER APPLICABLE LAW) SUCH IMMUNITY IN
RESPECT OF THEIR OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
144
<PAGE>
SECTION 11.14. Waiver of Jury Trial. THE LENDER PARTIES AND
THE BORROWERS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE
LENDER PARTIES OR THE BORROWERS RELATING THERETO. THE BORROWERS
ACKNOWLEDGE AND AGREE THAT THEY HAVE RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH
OTHER LOAN DOCUMENT TO WHICH ANY BORROWER IS A PARTY) AND THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER PARTIES ENTERING INTO
THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
SECTION 11.15. Confidentiality. The Lender Parties shall hold
all non-public information obtained pursuant to or in connection with
this Agreement or obtained by them based on a review of the books and
records of the Company or any of its Subsidiaries in accordance with
their customary procedures for handling confidential information of
this nature, but may make disclosure to any of their examiners,
Affiliates, Related Funds, investment advisors or Affiliates thereof,
outside auditors, counsel and other professional advisors in connection
with this Agreement or as reasonably required by any potential bona
fide transferee, participant or assignee, or to any direct or indirect
contractual counterparties in swap agreements or such contractual
counterparties' professional advisors, or in connection with the
exercise of remedies under a Loan Document, or as requested by any
governmental or regulatory agency, any rating agency or the National
Association of Insurance Commissioners, or representative of any
thereof or pursuant to legal process; provided, however, that
(a) unless specifically prohibited by applicable law
or court order, each Lender Party shall promptly notify the
Company of any request by any governmental agency or
representative thereof (other than any such request in
connection with an examination of the financial condition of
such Lender Party by such governmental agency) for disclosure
of any such non-public information prior to disclosure of such
information;
(b) prior to any such disclosure pursuant to this
Section 11.15, each Lender Party shall require any such bona
fide transferee, participant and assignee receiving a
disclosure of non-public information to agree in writing
145
<PAGE>
(i) to be bound by this Section 11.15; and
(ii) to require such Person to require any
other Person to whom such Person discloses such
non-public information to be similarly bound by this
Section 11.15; and
(c) except as may be required by an order of a court
of competent jurisdiction and to the extent set forth therein,
no Lender shall be obligated or required to return any
materials furnished by the Borrowers or any Subsidiary.
SECTION 11.16. Judgment Currency. (a) If, for the purpose of
obtaining judgment in any court, it is necessary to convert a sum due
under any Loan Document in another currency into Dollars or into a
Foreign Currency, as the case may be, the parties hereto agree, to the
fullest extent that they may effectively do so, that the rate of
exchange used shall be that at which, in accordance with normal banking
procedures, the applicable Secured Party could purchase such other
currency with Dollars or with such Foreign Currency, as the case may
be, in New York City, at the close of business on the Business Day
immediately preceding the day on which final judgment is given,
together with any premiums and costs of exchange payable in connection
with such purchase.
(b) The obligation of each of the Borrowers in
respect of any sum due from it to any Secured Party under any
Loan Document shall, notwithstanding any judgment in a
currency other than Dollars or a Foreign Currency, as the case
may be, be discharged only to the extent that on the Business
Day next succeeding receipt by such Secured Party of any sum
adjudged to be so due in such other currency, such Secured
Party may, in accordance with normal banking procedures,
purchase Dollars or such Foreign Currency, as the case may be,
with such other currency. If the Dollars or such Foreign
Currency so purchased are less than the sum originally due to
such Secured Party in Dollars or in such Foreign Currency,
each of the Borrowers agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify such other
Secured Party against such loss.
SECTION 11.17. English Language. The parties acknowledge that
they have required that this agreement and all related documents be
prepared in English. Les parties reconnaissent avoir exige que la
presente convention et tous les documents connexes soient rediges en
anglais.
146
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized as of the day and year first above written.
INSILCO TECHNOLOGIES, INC.
By: /s/ Michael R. Elia
-------------------------------
Name:
Title:
T.A.T. TECHNOLOGY INC.
By: /s/ Michael R. Elia
-------------------------------
Name:
Title:
DLJ CAPITAL FUNDING, INC.,
as Syndication Agent and as a Lender
By: /s/ James L. Paradise
-------------------------------
Name:
Title:
BANK ONE, NA,
as Administrative Agent
By: /s/ Erik C. Back
-------------------------------
Name:
Title:
147
<PAGE>
TRANSAMERICA BUSINESS CREDIT
CORPORATION,
as Co-Documentation Agent
By: /s/ Perry Vavoules
-------------------------------
Name:
Title:
LASALLE NATIONAL BANK,
as Co-Documentation Agent
By: /s/ Jeffrey L. Miller
-------------------------------
Name:
Title:
148
<PAGE>
SCHEDULE I
DISCLOSURE SCHEDULE
ITEM 6.7 Litigation.
----------
Description of Proceeding Action or Claim Sought
------------------------- ----------------------
ITEM 6.8 Existing Subsidiaries.
---------------------
ITEM 6.11 Employee Benefit Plans.
----------------------
ITEM 6.12 Environmental Matters.
---------------------
ITEM 7.1.11 Intellectual Property.
---------------------
ITEM 7.2.2(a)(i) Ongoing Indebtedness.
--------------------
ITEM 7.2.2(a)(ii) Indebtedness to be Paid.
-----------------------
ITEM 7.2.3(a) Ongoing Liens.
-------------
ITEM 7.2.5(a) Ongoing Investments.
-------------------
<PAGE>
<TABLE>
SCHEDULE II
Percentages and Administrative Information
Revolving Continued Initial Initial Address for Notices (other
Loan Revolving Term-A Initial U.S. Canadian than Notices relating to
Lender Commitment Loans Loans Term-B Loans Term-B Loans LIBO Rate Loans) LIBOR Office
------ ---------- ----- ----------- ------------ ------------ ---------------- --------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
DLJ Capital 100% 100% $35,000,000 $35,000,000 $90,000,000 277 Park Avenue 277 Park Avenue
Funding, Inc. New York, NY 10172 New York, NY 10172
Attention: James Paradise Attention: James Paradise
Telephone: (212) 892-7740 Telephone: (212) 892-7740
Telecopier: (212) 892-7542 Telecopier: (212) 892-7542
</TABLE>
