<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
Commission file number: 0-5256
GREAT AMERICAN MANAGEMENT AND INVESTMENT, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 58-1351398
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
Two North Riverside Plaza
Chicago, Illinois 60606
(Address of Principal Executive Office)
(312) 648-5656
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock, as of the latest practicable date.
11,194,587 Shares of Common Stock outstanding as of August 1, 1995
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GREAT AMERICAN MANAGEMENT AND INVESTMENT, INC. AND SUBSIDIARIES
FORM 10-Q
JUNE 30, 1995
INDEX
PART I. Financial Information:
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
Condensed Consolidated Statements of Income
Condensed Consolidated Statements of Cash Flows
Notes to Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
PART II. Other Information:
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
GREAT AMERICAN MANAGEMENT AND INVESTMENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN MILLIONS)
JUNE 30, DECEMBER 31,
1995 1994
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $ 58.1 $ 34.9
Trade receivables, net 28.8 29.4
Inventories, net 154.7 126.5
Other current assets 44.4 38.2
Deferred tax assets 40.8 56.1
Net assets of discontinued operations 9.9 32.3
Total current assets 336.7 317.4
Investments accounted for by the
equity method 70.9 70.9
Loans receivable and real estate, net 27.1 79.3
Property, plant and equipment, net 188.0 185.1
Goodwill 289.9 290.0
Deferred tax assets 22.2 19.9
Other long-term assets 88.1 124.0
Total assets $1,022.9 $1,086.6
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion long-term debt $ 23.4 $ 25.3
Accounts payable 75.6 65.1
Accrued income taxes 10.8 5.0
Accrued liabilities 85.8 110.8
Total current liabilities 195.6 206.2
Long-term debt 334.2 378.0
Accrued employee benefit obligations 76.9 77.1
Other long-term liabilities 134.7 129.5
Total liabilities 741.4 790.8
Redeemable preferred stock of subsidiary -- 46.7
Stockholder's equity:
Common stock 0.1 0.1
Additional paid-in capital 195.3 195.1
Retained earnings 105.1 74.4
Pension liability adjustment (6.4) (6.4)
Cumulative translation adjustments 0.4 (0.9)
Common stock in treasury, at cost (13.0) (13.2)
Total stockholders' equity 281.5 249.1
Total liabilities and
stockholders' equity $1,022.9 $1,086.6
The accompanying notes are an integral part of
these condensed consolidated financial statements.
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GREAT AMERICAN MANAGEMENT AND INVESTMENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(AMOUNTS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
QUARTER ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1995 1994 1995 1994
(RESTATED) (RESTATED)
Net sales and revenues $270.6 $257.5 $525.3 $487.7
Cost of goods sold 211.8 200.5 410.3 381.0
Selling, general and
administrative expenses 36.9 44.8 72.4 82.5
Operating income 21.9 12.2 42.6 24.2
Earnings accounted for by
the equity method 11.9 12.8 16.0 14.5
Gain on sale of investment -- -- 6.5 --
Net interest expense (6.8) (9.6) (14.7) (21.3)
Income from continuing
operations before income
taxes 27.0 15.4 50.4 17.4
Income tax expense from
continuing operations 10.2 7.7 17.8 7.2
Income from continuing
operations 16.8 7.7 32.6 10.2
Discontinued operations:
Net loss from discontinued
operations (0.6) (4.1) (0.3) (3.9)
Loss on disposal of business,
net of income tax benefit
of $4.0 million -- (31.1) -- (31.1)
Reversal of net loss from
discontinued operations
subsequently retained -- 2.4 -- 4.5
Income (loss) before
extraordinary item 16.2 (25.1) 32.3 (20.3)
Extraordinary gain (loss) from
early retirement of debt -- 4.2 -- (21.3)
Net income (loss) 16.2 (20.9) 32.3 (41.6)
Dividends on subsidiary
preferred stock 0.8 0.8 1.6 1.5
Net income (loss) to common
stockholders $ 15.4 $(21.7) $30.7 $(43.1)
Weighted average common
and common equivalent
shares outstanding 11.2 11.2 11.2 11.2
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Income (loss) per common share:
Continuing operations $ 1.43 $ 0.63 $ 2.77 $ 0.78
Discontinued operations (0.05) (2.94) (0.03) (2.73)
Extraordinary item -- 0.37 -- (1.90)
Net income (loss) $ 1.38 $(1.94) $ 2.74 $(3.85)
The accompanying notes are an integral part of
these condensed consolidated financial statements.
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GREAT AMERICAN MANAGEMENT AND INVESTMENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN MILLIONS)
(UNAUDITED)
SIX MONTHS ENDED
JUNE 30,
1995 1994
(RESTATED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Income from continuing operations $32.6 $10.2
Adjustments to reconcile income from continuing
operations to net cash flow from operations:
Depreciation and amortization 19.8 19.8
Undistributed earnings of investments
accounted for under the equity method (13.6) (12.3)
Accretion of discount on senior
subordinated notes 8.5 10.5
Proceeds from sale of accounts receivable -- 110.3
Gain on sale of investment (6.5) --
Cash effects of changes in other working
capital balances, accrued employee
benefit obligations, and other long-term
liabilities (excluding the effects of
acquisitions and dispositions of businesses) (14.5) (3.6)
Net cash flow from continuing operations 26.3 134.9
Net cash flow from (used by)
discontinued operations 0.5 (30.6)
Net cash flow from operating activities 26.8 104.3
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of notes receivable 39.8 --
Proceeds from sale of businesses 33.5 59.9
Loan principal repayments and proceeds from
sale of real estate 6.1 1.6
Purchases of businesses (10.4) --
Capital expenditures (13.8) (10.6)
Other (3.8) 0.2
Net cash flow from investing activities 51.4 51.1
CASH FLOWS FROM FINANCING ACTIVITIES:
Retirement of senior subordinated notes (45.0) --
Repayment of senior subordinated debt -- (233.8)
Repayment of senior credit facilities -- (221.1)
Dividends paid (2.9) --
Proceeds from new credit facility -- 317.9
Payments on long-term debt (39.4) (25.1)
Net borrowing (payment) on revolving credit
facilities 32.0 (41.4)
Other 0.3 0.5
Net cash flow used in financing activities (55.0) (203.0)
CHANGE IN CASH AND CASH EQUIVALENTS 23.2 (47.6)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 34.9 78.6
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 58.1 $ 31.0
The accompanying notes are an integral part of
these condensed consolidated financial statements.
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GREAT AMERICAN MANAGEMENT AND INVESTMENT, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1995
(UNAUDITED)
(1) BASIS OF PRESENTATION
The accompanying unaudited Condensed Consolidated Financial Statements
of Great American Management and Investment, Inc. (the "Company" or
"GAMI") include its wholly owned subsidiary, Eagle Industries, Inc.
("Eagle") and have been prepared in accordance with generally accepted
accounting principles for interim financial information. Accordingly,
they do no include all of the information and footnotes required by
generally accepted accounting principles for a complete set of financial
statements. In the opinion of management, all adjustments considered
necessary, consisting only of normal recurring adjustments, are included
for fair presentation. Operating results for the quarter and six months
ended June 30, 1995 are not necessarily indicative of results that may
be expected for the full year. The unaudited Condensed Consolidated
Financial Statements for the quarters and six months ended June 30, 1995
and 1994 should be read in conjunction with the audited Consolidated
Financial Statements of the Company for the year ended December 31, 1994
contained in its Annual Report on Form 10-K. The historical statements
of the Company have been restated for companies being reported as
discontinued operations. Certain balances in 1994 have been
reclassified to conform with classifications in the 1995 Condensed
Consolidated Financial Statements.
(2) INVENTORIES
Inventories consist of the following (in millions):
JUNE 30, DECEMBER 31,
1995 1994
(UNAUDITED)
Raw materials and supplies $ 51.0 $ 46.4
Work in process 29.0 25.2
Finished goods 74.7 54.9
$ 154.7 $ 126.5
(3) LONG-TERM DEBT
Components of long-term debt were as follows (in millions):
JUNE 30, DECEMBER 31,
1995 1994
(UNAUDITED)
Senior Debt:
GAMI $ -- $ 10.1
Eagle 207.8 202.0
207.8 212.1
Subordinated Debt - Eagle 141.9 180.4
Other Debt:
GAMI 1.3 1.5
Eagle 6.6 9.3
7.9 10.8
Total debt 357.6 403.3
Less current portion (23.4) (25.3)
Total long-term debt $ 334.2 $ 378.0
On June 30, 1995 Eagle's subsidiary, Falcon Building Products, Inc.
("Falcon"), amended and restated its existing senior credit facility,
increasing it to a $250 million credit facility (the "Falcon Credit
Facility") with its existing group of banks. The Falcon Credit Facility
consists of a six-year $100 million term loan, maturing in June 2001, due in
quarterly installments increasing in amount from $2.5 million beginning
September 30, 1995 to $6.25 million per quarter beginning in September 2000,
and a $150 million revolving credit facility (the "Revolver") that expires in
2001. Borrowings under the Falcon Credit Facility bear interest, at
management's option, at rates equal to London Interbank Offered Rates
("LIBOR") plus a margin or the prime rate. The Falcon Credit Facility is
secured by substantially all of the inventory, intangibles, property, plant,
equipment and stock of Falcon's subsidiaries. The Falcon Credit Facility
also allows for $25 million to be used in the form of letters of credit,
which when issued, reduce the availability under the Revolver. The Falcon
Credit Facility contains various covenants pertaining to the maintenance of
certain cash flow and expense coverage ratios, the incurrence of additional
indebtedness and restrictions on the payment of dividends.
In May 1995, Falcon entered into a five-year interest rate swap agreement.
This agreement, covering $100 million of Falcon's floating rate debt, fixed
the interest rate at 6.52 percent per annum, plus the then current margin.
The Company and its subsidiaries complied with all covenants of their
respective debt agreements at June 30, 1995. For a more detailed description
of the Company's other credit facilities, refer to the Company's December 31,
1994 report on Form 10-K.
During the six months ended June 30, 1995, Eagle retired $65.5 million face
value ($47.0 million accreted value) of its senior subordinated notes, no
gain or loss was recorded on the repurchases.
(4) SUBSEQUENT EVENTS
In July 1995, GAI Partners Limited Partnership ("GAI Partners") defaulted on
its secured promissory note held by GAMI. At June 30, 1995, the note was
valued at $48.3 million, including accrued interest. GAI Partners secured
the note with Redeemable Preferred Stock ("Preferred Stock") of a GAMI
subsidiary valued at $48.3 million at June 30, 1995. Pursuant to a pledge
agreement, GAMI has foreclosed on the collateral, thereby transferring title
to the Preferred Stock to GAMI. As a result of the default on the note and
the foreclosure on the Preferred Stock, GAMI has reflected the redemption of
the Preferred Stock and the settlement of its note receivable in the June 30,
1995 Condensed Consolidated Balance Sheet. No gain or loss was recorded in
connection with this transaction.
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GREAT AMERICAN MANAGEMENT AND INVESTMENT, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
JUNE 30, 1995
RESULTS OF OPERATIONS
The following is a discussion of the results of operations of Great
American Management and Investment, Inc., ("GAMI") and subsidiaries for the
quarter and six months ended June 30, 1995 as compared to the quarter and six
months ended June 30, 1994 and should be read in conjunction with the
Condensed Consolidated Financial Statements included herein and the Company's
Annual Report on Form 10-K for the year ended December 31, 1994 and the
audited Consolidated Financial Statements of the Company for the year ended
December 31, 1994 included therein.
The following tables show net sales and revenues and operating income
for GAMI's manufacturing operations consisting of its wholly owned
subsidiary, Eagle Industries, Inc., ("Eagle") and GAMI's other operations. A
complete discussion of the Eagle results is included in the Eagle Industries,
Inc., Form 10-Q for the quarter ended June 30, 1995, which is included as an
exhibit hereto and incorporated herein by reference.
QUARTER ENDED JUNE 30, 1995 COMPARED TO THE QUARTER ENDED JUNE 30, 1994
NET SALES AND REVENUES OPERATING INCOME
QUARTER ENDED QUARTER ENDED
JUNE 30, JUNE 30,
1995 1994 1995 1994
(IN MILLIONS)
Eagle $ 267.4 $ 253.5 $ 20.8 $ 11.7
Financial Services Group 3.2 4.0 2.2 2.2
Corporate and Other -- -- (1.1) (1.7)
Total $ 270.6 $ 257.5 $ 21.9 $ 12.2
Net sales and revenues of $270.6 million for the second quarter of 1995
were $13.1 million or 5.1% higher than the second quarter of 1994, primarily
due to increased sales volume at Eagle. Operating income of $21.9 million
for the second quarter of 1995 was $9.7 million or 79.5% higher than the
second quarter of 1994 primarily due to $8.3 million of charges related to
self-insurance reserves in the 1994 period and higher sales volume at Eagle.
Earnings accounted for by the equity method were $11.9 million and $12.8
million for the quarters ended June 30, 1995 and 1994, respectively. The
decrease resulted primarily from the sale of GAMI's interest in The Commodore
Corporation ("Commodore") in March 1995.
Net interest expense was $6.8 million for the quarter ended June 30,
1995 compared to $9.6 million for the comparable 1994 period. The decrease
was primarily due to the overall decline in the level of debt.
<PAGE>
SIX MONTHS ENDED JUNE 30, 1995 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
1994
NET SALES AND REVENUES OPERATING INCOME
SIX MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1995 1994 1995 1994
(IN MILLIONS)
Eagle $518.6 $479.7 $ 39.8 $ 22.8
Financial Services 6.7 8.0 4.6 4.4
Corporate and Other -- -- (1.8) (3.0)
Total $525.3 $487.7 $ 42.6 $ 24.2
Net sales and revenues of $525.3 million for the six months ended June 30,
1995 were $37.6 million or 7.7% higher than the comparable 1994 period due to
higher sales volume at Eagle. Operating income of $42.6 million was $18.4
million or 76.0% higher than the comparable 1994 period. The improvement in
operating income was due primarily to $8.7 million of charges recorded by
Eagle for self-insurance reserves in the 1994 period and higher sales volume
at Eagle. In addition, a reduction in GAMI's corporate expenses contributed
to the improvement in operating income.
Earnings accounted for by the equity method were $16.0 million and $14.5
million for the six months ended June 30, 1995 and 1994, respectively. The
increase reflected higher earnings by The Vigoro Corporation, partially
offset by reduced equity in earnings of Commodore due to the sale of GAMI's
interest in the first quarter of 1995. Total proceeds from the sale of
Commodore were $20.4 million, including a $3.0 million note, which resulted
in a pretax gain of $6.5 million.
Net interest expense was $14.7 million for the six months ended June 30, 1995
compared to $21.3 million for the comparable 1994 period. The decrease was
primarily due to the decrease in the level of debt combined with a decrease
in borrowing rates associated with the refinancing of the Eagle debt which
was completed in January 1994.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically met its debt service, capital expenditure
requirements and operating needs through a combination of operating cash flow
and external financing. Excluding the effects of the initial proceeds from
Eagle's asset securitization program in the 1994 period, cash flow from
continuing operations was $26.3 million for the six months ended June 30,
1995 compared to $24.6 million in the comparable 1994 period. The increase
in 1995 was primarily due to an increase in income offset by higher working
capital requirements. During the six months ended June 30, 1995, Eagle sold
the note receivable and 200,000 stock appreciation rights received from
Robbins & Myers, Inc. in conjunction with the sale of certain businesses in
1994. Net cash proceeds received for the note and stock appreciation rights
were $39.8 million. No gain or loss was recorded in conjunction with this
sale. During the quarter ended June 30, 1995, GAMI repaid its outstanding
bank debt and Eagle retired $65.5 million face value ($47.0 million accreted
value) of its senior subordinated notes using available cash. In addition,
in the six months ended June 30, 1995, GAMI sold its interest in Commodore
and Equality Specialties, Inc. for total cash proceeds of $33.4 million and
notes receivable of $7.0 million.
On June 30, 1995, Falcon amended and restated its senior credit facility
increasing it to a $250 million credit facility. See Note 3 to the Company's
Condensed Consolidated Financial Statements for a further description of the
agreement.
Management believes that cash flow from continuing operations along with
availability under its credit facilities will be sufficient to pay interest
on outstanding debt, meet current maturities, fund capital expenditures and
meet operating needs.
<PAGE>
PART II -- OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
4.1 Amended and Restated Credit Agreement dated June 30, 1995
among Falcon Building Products, Inc. and Chemical Bank as
Administrative Agent and Citicorp North America, Inc. as
Collateral Agent and other financial institutions named therein.
20.1 Eagle Industries, Inc. Form 10-Q for the quarter ended June
30, 1995.
b) Reports on Form 8-K
None.
<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.
GREAT AMERICAN MANAGEMENT AND
INVESTMENT, INC.
By: /s/ SAM A. COTTONE
------------------
Sam A. Cottone
Senior Vice President, Chief
Financial Officer and
Treasurer
Dated: August 14, 1995
EXHIBIT 4.1
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of June 30, 1995
among
FALCON BUILDING PRODUCTS, INC.
as Borrower
THE FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTY HERETO,
as Lenders,
and
CHEMICAL BANK,
as Administrative Agent
and
CITICORP NORTH AMERICA, INC.
as Collateral Agent
CHEMICAL BANK
CITICORP NORTH AMERICA, INC.
Managing Agents
CHEMICAL SECURITIES INC.
Syndication Agent and Arranger
CITICORP SECURITIES, INC.
Documentation Agent and Co-Arranger
<PAGE>
TABLE OF CONTENTS
ARTICLE I
Definitions
1.01. Certain Defined Terms
1.02. Computation of Time Periods
1.03. Accounting Terms
1.04. Other Definitional Provisions
ARTICLE II
Amounts and Terms of Loans
2.01. Revolving Loans and Term Loans
2.02. Revolving Loan Facility Mechanics
2.03. Interest on the Loans
2.04. Fees
2.05. Mandatory Prepayments
2.06. Payments
2.07. Interest Periods
2.08. Special Provisions Governing Eurodollar Rate
Loans
2.09. Taxes
2.10. Increased Capital
2.11. Use of Proceeds of the Loans
2.12. Authorized Officers of Borrower
2.13. Replacement of Certain Lenders
ARTICLE III
Letters of Credit
3.01. Obligation to Issue
3.02. Types and Amounts
3.03. Conditions
3.04. Issuance of Letters of Credit
3.05. Reimbursement Obligations; Duties of the
Issuing Bank
3.06. Participations
3.07. Payment of Reimbursement Obligations
3.08. Compensation for Letters of Credit
3.09. Indemnification; Exoneration
3.10. Reporting By Issuing Banks
ARTICLE IV
Conditions to Loans and Letters of Credit
4.01. Conditions Precedent to the Effective Date
4.02. Conditions Precedent to all Loans and Letters of
Credit
<PAGE>
ARTICLE V
Representations and Warranties
5.01. Representations and Warranties on the Effective
Date
5.02. Subsequent Funding Representations and
Warranties
ARTICLE VI
Reporting Covenants
6.01. Financial Statements
6.02. Environmental Notices
ARTICLE VII
Affirmative Covenants
7.01. Corporate Existence, Etc.
7.02. Corporate Powers, Etc.
7.03. Compliance with Laws
7.04. Payment of Taxes and Claims
7.05. Maintenance of Properties; Insurance
7.06. Inspection of Property; Books and Records;
Discussions
7.07. Labor Matters
7.08. Maintenance of Permits
7.09. Employee Benefit Matters
7.10. Formation of Subsidiaries
7.12. Future Liens on Real Property in Favor of the
Collateral Agent
ARTICLE VIII
Negative Covenants
8.01. Indebtedness
8.02. Sales of Assets; Liens
8.03. Investments
8.04. Accommodation Obligations
8.05. Restricted Junior Payments
8.06. Conduct of Business
8.07. Transactions with Affiliates
8.08. Restriction on Fundamental Changes
8.09. Employee Benefit Matters
8.10. Environmental Liabilities
8.11. Margin Regulations
8.12. Change of Fiscal Year
8.13. Amendment of Certain Documents
8.14. Modification of Receivables Agreements; New
Receivables Securitization
ARTICLE IX
Financial Covenants
9.01. Minimum Consolidated Net Worth
9.02. Leverage Ratio
9.03. Interest Coverage Ratio
9.04. Capital Expenditures
9.05. Fixed Charges Coverage Ratio
ARTICLE X
Events of Default; Rights and Remedies
10.01. Events of Default
10.02. Rights and Remedies
ARTICLE XI
Administrative Agent and Collateral Agent
11.01. Appointment
11.02. Nature of Duties
11.03. Rights, Exculpation, Etc.
11.04. Reliance
11.05. Indemnification
11.06. The Administrative Agent and the Collateral
Agent Individually
11.07. Successor Administrative Agent or Collateral
Agent; Resignation of Administrative Agent
or Collateral Agent
11.08. Collateral Matters
11.09. Relations Among Lenders
ARTICLE XII
Miscellaneous
12.01. Survival of Warranties and Agreements
12.02. Assignments and Participations
12.03. Expenses
12.04. Indemnification and Waiver
12.05. Limitation of Liability
12.06. Ratable Sharing; Defaulting Lender; Setoff
12.07. Amendments and Waivers
12.08. Notices
12.09. Failure or Indulgence Not Waiver; Remedies
Cumulative
12.10. Termination
12.11. Marshalling; Recourse to Security; Payments
Set Aside
12.12. Severability
12.13. Headings
12.14. GOVERNING LAW
12.15. Successors and Assigns; Subsequent Holders
of Notes
12.16. CONSENT TO JURISDICTION; SERVICE OF PROCESS;
JURY TRIAL
12.17. Counterparts; Effectiveness; Inconsistencies
12.18. Performance of Obligations
12.19. ENTIRE AGREEMENT
<PAGE>
AMENDED AND RESTATED
CREDIT AGREEMENT
This Amended and Restated Credit Agreement dated as of
June 30, 1995 (as amended, supplemented, modified or restated
from time to time, this "Agreement") is entered into among FALCON
BUILDING PRODUCTS, INC., a Delaware corporation ("Borrower"), THE
FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF and
each other financial institution which from time to time becomes
a party hereto in accordance with Section 12.02(a) (together with
their respective successors and assigns, individually, a "Lender"
and, collectively, the "Lenders"), CHEMICAL BANK, a New York
banking corporation, in its separate capacity as administrative
agent for the Lenders hereunder (in such capacity, the
"Administrative Agent") and CITICORP NORTH AMERICA, INC. as
collateral agent for the Lenders hereunder (the "Collateral
Agent").
R E C I T A L S
A. The Borrower entered into a Credit Agreement dated
as of October 28, 1994, as amended by Amendment No. 1 dated as of
April 12, 1995, with the Lenders and certain other financial
institutions, the Administrative Agent and the Collateral Agent
(the "Original Credit Agreement").
B. The Borrower has requested that the credit
facilities provided under the Original Credit Agreement be
increased in amount and made available to the Borrower for
acquisitions, working capital and other general corporate
purposes, and the Lenders are willing, on the terms and
conditions set forth herein, to grant the Borrower's request.
C. Accordingly, the Borrower, the Lenders, the
Administrative Agent and the Collateral Agent have entered into
this Agreement to amend in certain respects, and restate in its
entirety, the Original Credit Agreement.
D. Immediately prior to the effectiveness of this
Agreement, certain of the original lenders under the Original
Credit Agreement assigned their entire interests under the
Original Credit Agreement to one or more of the Lenders.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
Definitions
1.01. Certain Defined Terms.
The following terms used in this Agreement shall have
the following meanings (such meanings to be applicable, except to
the extent otherwise indicated in a definition of a particular
term, both to the singular and the plural forms of the terms
defined):
"Accommodation Obligation," as applied to any Person,
shall mean any contractual obligation, contingent or otherwise,
of that Person with respect to any Indebtedness or other
obligation or liability of another, including, without
limitation, any such Indebtedness, obligation or liability
directly or indirectly guaranteed, endorsed (otherwise than for
collection or deposit in the ordinary course of business), co-made
or discounted or sold with recourse by that Person, or in
respect of which that Person is otherwise directly or indirectly
liable, including Contractual Obligations (contingent or
otherwise) arising through any agreement to purchase, repurchase,
or otherwise acquire such Indebtedness, obligation or liability
or any security therefor, or to provide funds for the payment or
discharge thereof (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain
solvency, assets, level of income, or other financial condition,
or to make payment other than for value received. For purposes
of interpreting any provision of this Agreement which refers to
the Dollar amount of Accommodation Obligations of any Person,
such provision shall be deemed to mean the maximum amount of such
Accommodation Obligations or, in the case of an Accommodation
Obligation to maintain solvency, assets, level of income or other
financial condition, the amount of Indebtedness to which such
Accommodation Obligation relates, or if less, the stated maximum,
if any, in the documents evidencing such Accommodation
Obligation.
"Account Debtor" shall mean a party that is obligated
to the Borrower or a Guarantor on or under a Receivable.
"Administrative Agent" shall have the meaning ascribed
to such term in the preamble hereto and shall include any
successor Administrative Agent.
"Affiliate," as applied to any Person, shall mean any
other Person directly or indirectly controlling, controlled by,
or under common control with, that Person. For purposes of this
definition, "control" (including, with correlative meanings, the
terms "controlling," "controlled by" and "under common control
with"), as applied to any Person, means the possession, directly
or indirectly, of the power to vote 10% or more of the Securities
having voting power for the election of directors of such Person
or otherwise to direct or cause the direction of the management
and policies of that Person, whether through the ownership of
voting Securities or by contract or otherwise.
"Agreement" shall have the meaning ascribed to such
term in the preamble hereto.
"Agreement Accounting Principles" shall mean GAAP as of
the date of this Agreement together with any changes in GAAP
after the date hereof which are not "Material Accounting Changes"
(as defined below). If any changes in GAAP are hereafter
required or permitted and are adopted by the Borrower with the
agreement of its independent certified public accountants and
such changes result in a material change in method of the
calculation of any of the financial covenants, restrictions or
standards herein or in the related definitions or terms used
therein ("Material Accounting Changes"), the parties hereto agree
to enter into negotiations, in good faith, in order to amend such
provisions in a credit neutral manner so as to reflect equitably
such changes with the desired result that the criteria for
evaluating the Borrower's financial condition shall be
substantially the same after such changes as if such changes had
not been made; provided, however, that no Material Accounting
Change shall be given effect in such calculations until such
provisions are amended, in a manner reasonably satisfactory to
the Requisite Lenders. In the event such amendment is entered
into, all references in this Agreement to Agreement Accounting
Principles shall mean GAAP as of the date of such amendment
together with any changes in GAAP after the date of such
amendment which are not Material Accounting Changes. Unless
otherwise expressly indicated herein, all financial covenants and
ratios shall be calculated for the Consolidated Borrower Group on
a consolidated basis.
"Agreement Obligations" shall mean all Obligations
other than with respect to Eligible Hedging Contracts.
"Alternate Base Rate" shall mean, for any day, a
fluctuating interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) as shall be in effect from
time to time, which rate per annum shall at all times be equal to
the greatest of (a) the Prime Rate in effect on such day; (b) the
sum of one-half of one percent (0.50%) and the Federal Funds
Effective Rate in effect on such day; and (c) the sum of one
percent (1.0%) and (1) the product of (x) the Three-Month
Secondary CD Rate in effect on such day and (y) Statutory
Reserves and (2) the Assessment Rate. For purposes hereof,
"Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by Chemical Bank as its prime rate in
effect at its principal office in New York City; each change in
the Prime Rate shall be effective on the date such change is
publicly announced as being effective. "Three-Month Secondary CD
Rate" shall mean, for any day, the secondary market rate for
three-month certificates of deposit reported as being in effect
on such day (or, if such day shall not be a Business Day, the
next preceding Business Day) by the Federal Reserve Board through
the public information telephone line of the Federal Reserve Bank
of New York (which rate will, under the current practices of the
Federal Reserve Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such
day), or, if such rate shall not be so reported on such day or
such next preceding Business Day, the average of the secondary
market quotations for three-month certificates of deposit of
major money center banks in New York City received at
approximately 10:00 a.m., New York City time, on such day (or, if
such day shall not be a Business Day, on the next preceding
Business Day) by Chemical Bank from three New York City
negotiable certificate of deposit dealers of recognized standing
selected by the Administrative Agent. "Federal Funds Effective
Rate" shall mean, for any day, a fluctuating interest rate per
annum equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New
York, or, 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 Chemical Bank from three Federal funds
brokers of recognized standing selected by the Administrative
Agent. If for any reason the Administrative Agent shall have
determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Three-Month
Secondary CD Rate or the Federal Funds Effective Rate or both for
any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in
accordance with the terms hereof, the Alternate Base Rate shall
be determined without regard to clause (b) or (c), or both, of
the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any
change in the Alternate Base Rate due to a change in the Prime
Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such
change.
"Applicable Eurodollar Rate Margin" shall mean, at any
date of determination, the rate per annum set forth in the chart
below which corresponds to the ratio below as at the end of the
immediately preceding fiscal quarter:
Applicable
Eurodollar
Rate Margin Leverage Ratio
0.875% Equal to or greater than 2.25 to 1
0.750% Less than 2.25 to 1 but equal to or
greater than 1.50 to 1
0.625% Less than 1.50 to 1
The Applicable Eurodollar Rate Margin initially shall be 0.750%,
and after each fiscal quarter ending on or after June 30, 1995
shall be adjusted as provided in Section 2.03(a) by reference to
the table set forth above on the basis of the Leverage Ratio.
Notwithstanding the foregoing, if the Borrower attains, and so
long as it maintains, at least two of the following Senior Debt
Ratings corresponding to an Applicable Eurodollar Rate Margin set
forth below, the Applicable Eurodollar Rate Margin shall be
determined, and adjusted from time to time, as provided in
Section 2.03(a) by reference to the table set forth below:
Applicable
Eurodollar
Rate Margin Senior Debt Ratings
0.50% BBB- or better from S&P;
Baa3 or better from Moody's;
Baa3 or better from D&P
0.45% BBB or better from S&P;
Baa2 or better from Moody's;
Baa2 or better from D&P
"Applicable Lending Office" shall mean, with respect to
each Lender, such Lender's Domestic Lending Office, in the case
of a Base Rate Loan and such Lender's Eurodollar Lending Office,
in the case of a Eurodollar Rate Loan.
"Assessment Rate" shall mean for any date the annual
rate (rounded upwards, if necessary, to the next 1/100 of 1%)
most recently estimated by the Administrative Agent as the then-current
net annual assessment rate that will be employed in
determining amounts payable by Chemical Bank or any other Lender
to the FDIC (or any successor) for insurance by the FDIC (or such
successor) of time deposits made in dollars at Chemical Bank's or
such other Lender's domestic offices.
"Assignment and Acceptance" shall mean an Assignment
and Acceptance in the form of Exhibit 1 (with blanks appropri-
ately filled in) delivered to the Administrative Agent in connec-
tion with an assignment of a Lender's interest under this
Agreement pursuant to Section 12.02.
"Assumption Agreement" shall mean the Assumption and
Release Agreement dated as of November 9, 1994 among the
Borrower, each of its Subsidiaries, EIPC, each of EIPC's other
domestic Subsidiaries, Eagle Industries, Inc., the Administrative
Agent and the Collateral Agent.
"Base Rate Loans" shall mean all Loans outstanding
which bear interest at a rate determined by reference to the
Alternate Base Rate, as provided in Section 2.03(a)(i).
"Benefit Plan" shall mean a defined benefit plan as
defined in Section 3(35) of ERISA (other than a Multiemployer
Plan) in respect of which Borrower or any ERISA Affiliate is, or
within the immediately preceding six (6) years was, an "employer"
as defined in Section 3(5) of ERISA while an ERISA Affiliate.
"Borrower" shall have the meaning ascribed to such term
in the preamble hereto.
"Borrower Security Agreement" shall mean that certain
Borrower Security Agreement executed by the Borrower in favor of
the Collateral Agent for the benefit of itself and the Holders of
Secured Obligations dated as of November 9, 1994, as the same may
be amended, restated, supplemented or otherwise modified from
time to time.
"Borrower Subsidiary" shall mean any Subsidiary of the
Borrower.
"Borrowing" shall mean a borrowing consisting of Loans
of the same Type, having the same Interest Period, in the case of
Eurodollar Rate Loans, and made on the same day by the Lenders.
"Business Day" shall mean (i) for all purposes other
than as described by clause (ii) below, any day excluding
Saturday, Sunday and any day which is a legal holiday under the
laws of the State of New York, or is a day on which banking
institutions located in New York are required or authorized by
law or other governmental action to close and (ii) with respect
to all notices, determinations, fundings and payments in
connection with Eurodollar Rate Loans, any day which is a
Business Day described in clause (i) and which is also a day for
trading in dollar deposits by and between banks in the London
interbank Eurodollar market.
"Capital Expenditures" shall mean, with respect to any
Person on a consolidated basis for any period, the aggregate of
all expenditures incurred by such Person during such period that,
in accordance with Agreement Accounting Principles, are or should
be included in "additions to property, plant or equipment" or
similar items reflected in the statement of cash flows of such
Person, excluding interest and start-up expenses that otherwise
would be included and less any cash proceeds from the disposal of
property, plants or equipment not paid to the Lenders as a
mandatory prepayment; provided, however, that Capital
Expenditures shall not include expenditures of proceeds of
insurance settlements in respect of lost, destroyed or damaged
assets, equipment or other property to the extent such
expenditures are made in connection with the replacement or
repair of such lost, destroyed or damaged assets, equipment or
other property commenced within 6 months of such destruction or
damage and pursued with diligence.
"Capital Lease," as applied to any Person, shall mean
any lease of any property (whether real, personal, or mixed) by
that Person as lessee which, in conformity with Agreement
Accounting Principles, is or should be accounted for as a capital
lease on the balance sheet of that Person.
"Cash Equivalents" shall mean (i) marketable direct
obligations issued or unconditionally guaranteed by the United
States Government or issued by an agency thereof and backed by
the full faith and credit of the United States of America, in
each case maturing within one year after the date of acquisition
thereof; (ii) marketable direct obligations issued by any state
of the United States of America maturing within six months after
the date of acquisition thereof and, at the time of acquisition,
having one of the two highest ratings obtainable from either S&P
or Moody's (or, if at any time neither S&P nor Moody's shall be
rating such obligations, then from such other nationally
recognized rating services acceptable to the Administrative
Agent) and not listed in Credit Watch published by S&P (or a
similar publication of S&P or another nationally recognized
rating service); or (iii) commercial paper (other than commercial
paper issued by the Borrower or any of its Subsidiaries or
Affiliates), domestic and Eurodollar certificates of deposit,
time deposits or bankers' acceptances, in any such case maturing
no more than ninety (90) days after the date of acquisition
thereof and, at the time of the acquisition thereof, the issuer's
rating on its commercial paper is at least A-1 or P-1 from either
S&P or Moody's (or, if at any time neither S&P nor Moody's shall
be rating such obligations, then the highest rating from other
nationally recognized rating services acceptable to the
Administrative Agent).
"Cash Interest Expense" shall mean, with respect to the
Consolidated Borrower Group for any period, (a) interest expense
for such period determined in accordance with Agreement
Accounting Principles consistently applied, excluding the
amortization of all fees payable in connection with the
incurrence of the Obligations plus (b) capitalized interest paid
during such period minus (c) interest received in cash in the
United States during such period.
"Change of Control" shall mean that either (a) the
Samuel Zell Group shall cease to own, directly or indirectly, at
least 20% of the combined voting power of the Borrower's
outstanding securities ordinarily having the right to vote at
elections of directors, provided that the failure by the Samuel
Zell Group to own such a minimum percentage of securities shall
not be deemed a change of control hereunder if the Borrower shall
have attained at least two of the following Senior Debt Ratings:
BBB+ or better from S&P; Baa1 or better from Moody's; and Baa1
from D&P; or (b) any other Person or Group (as defined below)
shall acquire or own, directly or indirectly, 30% or more of the
combined voting power of the Borrower's outstanding securities
ordinarily having the right to vote at elections of directors and
such percentage of securities owned shall be greater than the
percentage of securities owned by the Samuel Zell Group. "Group"
shall mean two or more Persons that agree to act together as a
partnership, syndicate or other group for the purpose of
acquiring, holding, voting, or disposing of the Borrower's
securities.
"Chemical" shall mean Chemical Bank, a New York banking
corporation, and any successor thereto.
"Citicorp" shall mean Citicorp North America, Inc., and
any successor thereto.
"Collateral" shall mean all property and interests in
property now owned or hereafter acquired by the Borrower or any
of the Borrower's Subsidiaries in or upon which a security
interest, pledge, lien or mortgage is intended to be granted, or
of which a collateral assignment is intended to be made, under
the Collateral Documents.
"Collateral Agent" shall have the meaning ascribed to
such term in the preamble hereto and shall include any successor
Collateral Agent.
"Collateral Documents" shall mean the Borrower Security
Agreement, the Subsidiary Security Agreement, the Subsidiary
Guaranty, the Intellectual Property Agreements, the Pledge
Agreements, the Mortgages, and all other security agreements,
mortgages, deeds of trust, collateral assignments, financing
statements and other agreements, conveyances or documents at any
time delivered to the Administrative Agent by the Borrower or any
Borrower Subsidiary which intend to create or evidence Liens to
secure or to guarantee the Obligations.
"Commercial Letter of Credit" shall mean any letter of
credit which is drawable upon presentation of a sight draft and
other documents evidencing the sale or shipment of goods pur-
chased by Borrower or any of its domestic Subsidiaries in the
ordinary course of such entity's business.
"Commission" shall mean the Securities and Exchange
Commission or any Governmental Authority succeeding to the
functions thereof.
"Commitments" shall mean, collectively, the Letter of
Credit Commitments and the Revolving Credit Commitments of all
Lenders.
"Commitment Fee" shall have the meaning ascribed to
that term in Section 2.04(a).
"Compliance Certificate" shall mean a certificate in
substantially the form of Exhibit 2 delivered to the
Administrative Agent by Borrower covering Borrower's compliance
with the covenants contained in Article IX and certain other
provisions of this Agreement.
"Consolidated Borrower Group" shall mean the Borrower
and its Subsidiaries on a consolidated basis.
"Consolidated Net Income" shall mean, with respect to
the Consolidated Borrower Group for any period, net income for
such period, but excluding from the definition of Consolidated
Net Income the effect of any extraordinary or non-recurring gains
or losses, or gains or losses from the sale of assets in
connection with any Asset Sale Prepayment Event as defined in
Section 2.05(b)(i), all computed in accordance with Agreement
Accounting Principles consistently applied.
"Contaminant" shall mean any pollutant, hazardous
substance, hazardous chemical, toxic substance, hazardous waste
or special waste, as those terms are defined in federal, state or
local laws and regulations, radioactive material, petroleum,
including crude oil or any petroleum-derived substance, or break-
down or decomposition product thereof, or any constituent of any
such substance or waste, including but not limited to polychlor-
inated biphenyls and asbestos.
"Contractual Obligation", as applied to any Person,
shall mean any provision of any Securities issued by that Person
or any indenture, mortgage, deed of trust, contract, undertaking,
document, instrument or other agreement or instrument to which
that Person is a party or by which it or any of its properties is
bound, or to which it or any of its properties is subject
(including, without limitation, any restrictive covenant
affecting such Person or any of its properties).
"Contribution Agreement" shall mean that certain
contribution agreement executed by each of the Subsidiaries of
the Borrower dated as of November 9, 1994, as the same may be
amended, restated, supplemented or otherwise modified from time
to time with the consent of the Requisite Lenders.
"Customary Permitted Liens" shall mean (i) Liens (other
than Environmental Liens, Liens imposed under ERISA or
Enforceable Judgments) for claims, taxes, assessments or charges
of any Governmental Authority not yet due or which are being con-
tested in good faith by appropriate proceedings and with respect
to which adequate reserves or other appropriate provisions are
being maintained in accordance with GAAP, (ii) statutory Liens of
landlords, bankers, carriers, warehousemen, mechanics,
materialmen, and other Liens (other than Environmental Liens,
Liens imposed under ERISA or Enforceable Judgments) imposed by
law arising in the ordinary course of business and for amounts
which (A) are not yet due, (B) are not more than thirty (30) days
past due as long as no notice of default has been given or other
action taken to enforce such Liens, or (C) (1) are not more than
thirty (30) days past due and a notice of default has been given
or other action taken to enforce such Liens, or (2) are more than
thirty (30) days past due, and, in the case of clause (1) or (2),
are being contested in good faith by appropriate proceedings
which are sufficient to prevent imminent foreclosure of such
Liens and with respect to which adequate reserves or other
appropriate provisions are being maintained in accordance with
GAAP, (iii) Liens (other than Environmental Liens, Liens imposed
under ERISA or Enforceable Judgments) incurred or deposits made
in the ordinary course of business (including, without
limitation, surety bonds and appeal bonds) in connection with
workers' compensation, unemployment insurance and other types of
employment benefits or to secure the performance of tenders,
bids, leases, contracts (other than for the repayment of Indebt-
edness), statutory obligations and other similar obligations or
arising as a result of progress payments under government con-
tracts, (iv) easements (including, without limitation, reciprocal
easement agreements and utility agreements), rights-of-way,
covenants, consents, rights of landlords, reservations, encroach-
ments, variations and other restrictions, charges or encumbrances
(whether or not recorded) affecting the use of real property,
which do not materially interfere with the ordinary conduct of
the business of Borrower or any of Borrower's Subsidiaries, (v)
Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection
with the importation of goods; and (vi) precautionary filings of
financing statements in connection with Operating Leases entered
into in the ordinary course of business.
"D&P" shall mean Duff & Phelps Credit Rating Co. and
its successors.
"Debt Service" shall mean, with respect to the
Consolidated Borrower Group for any period, without duplication
(i) Cash Interest Expense for such period, (ii) the aggregate
principal amount of the Term Loans that was due during such
period pursuant to Section 2.01(c) as the same may be adjusted
from time to time, excluding amounts paid on the Term Loans as a
result of a Prepayment Event and applied to such scheduled
amortization payments, and (iii) scheduled principal payments on
any other Indebtedness of any member of the Consolidated Borrower
Group for such period.
"Default Rate" shall have the meaning ascribed to that
term in Section 2.03(d).
"DOL" shall mean the United States Department of Labor
and any successor department or agency.
"Dollars" and "$" shall mean the lawful money of the
United States of America.
"Domestic Lending Office" means, with respect to any
Lender, the office of such Lender specified as its "Domestic
Lending Office" under its name on Schedule A or on the Assignment
and Acceptance by which it became a Lender or such other office
of such Lender as such Lender may from time to time specify by
written notice to Borrower and the Administrative Agent.
"EBITDA" shall mean, with respect to the Consolidated
Borrower Group for any period, the sum of Consolidated Net Income
for such period (excluding undistributed earnings in Persons
which are 50% or less owned, directly or indirectly, by the
Borrower) plus, to the extent reflected in the income statement
of the Consolidated Borrower Group for such period for which
Consolidated Net Income is determined, without duplication, (i)
consolidated Net Interest Expense, (ii) federal, state and local
income and franchise tax expense, (iii) depreciation expense,
(iv) amortization expense, (v) Securitization Expenses, (vi) any
other noncash items which had the effect of reducing Consolidated
Net Income for such period, but minus any noncash items which had
the effect of increasing Consolidated Net Income for such period
and (vii) non-recurring charges, restructuring charges and
management fees incurred prior to November 9, 1994.
"Effective Date" shall have the meaning ascribed to
that term in Section 4.01.
"EIPC" shall mean Eagle Industrial Products
Corporation, a Delaware corporation.
"Eligible Hedging Contract" shall mean Hedging
Contracts of the Borrower or any Guarantor with any Lender as the
counterparty.
"Enforceable Judgment" means a judgment or order as to
which (a) the Borrower has not demonstrated to the reasonable
satisfaction of the Administrative Agent that the Borrower is
covered by third-party insurance (other than retro-premium
insurance that determines retro-premiums solely on the basis of
losses of the Borrower) therefor or that the Borrower has
adequate reserves therefor and (b) the period, if any, during
which the enforcement of such judgment or order is stayed shall
have expired, it being understood that a judgment or order which
is under appeal or as to which the time in which to perfect an
appeal has not expired shall not be deemed an "Enforceable Judg-
ment" so long as enforcement thereof is effectively stayed pend-
ing the outcome of such appeal or the expiration of such period,
as the case may be; provided that if enforcement of a judgment or
order has been stayed on condition that a bond or collateral
equal to or greater than $1,000,000 be posted or provided, such
judgment or order shall be an "Enforceable Judgment."
"Environmental Lien" shall mean a Lien in favor of any
Governmental Authority for (i) any liability of Borrower or any
of its Subsidiaries under federal or state environmental laws or
regulations, or (ii) damages arising from, or costs incurred by
such Governmental Authority in response to, a Release or
threatened Release of a Contaminant into the environment.
"Environmental Property Transfer Acts" shall mean any
applicable Requirement of Law that conditions, restricts,
prohibits or requires notification or disclosure of any closure,
transfer, sale, lease or mortgage of any Property for reasons
relating to environmental matters including, but not limited to,
any so-called Industrial Site Recovery Acts or Responsible
Property Transfer Acts.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time, and any
successor statute.
"ERISA Affiliate" shall mean any (i) corporation which
is a member of the same controlled group of corporations (within
the meaning of Section 414(b) of the IRC) as the Borrower or any
of its Subsidiaries, (ii) partnership or other trade or business
(whether or not incorporated) under common control (within the
meaning of Section 414(c) of the IRC) with the Borrower or any of
its Subsidiaries, and (iii) member of the same affiliated service
group (within the meaning of Section 414(m) of the IRC) as the
Borrower or any of its Subsidiaries, any corporation described in
clause (i) above or any partnership or trade or business
described in clause (ii) above. For purposes of any
representation set forth in Section 5.01(t), any reporting
covenant set forth in Section 6.01(h), any affirmative covenant
set forth in Section 7.09, or any negative covenant set forth in
Section 8.09, which relates to a GAMI Pension Plan (as defined in
the agreement attached to Schedule 5.01(t), the term "ERISA
Affiliate" shall also include EIPC and all other entities which
are members of EIPC's controlled group or under common control
with EIPC (within the meaning of Sections 414(b) and (c) of the
IRC), even if such entities are not otherwise ERISA Affiliates of
Borrower within the meaning of the preceding sentence, but only
until the termination of the agreement attached to Schedule
5.01(t).
"Eurodollar Lending Office" means, with respect to any
Lender, the office of such Lender specified as its "Eurodollar
Lending Office" under its name on Schedule A or on the Assignment
and Acceptance by which it became a Lender (or, if no such office
is specified, its Domestic Lending Office) or such other office
of such Lender as such Lender may from time to time specify by
written notice to Borrower and the Administrative Agent.
"Eurodollar Rate Loans" shall mean those Loans
outstanding which bear interest at a rate determined by reference
to the LIBO Rate as provided in Section 2.03(a)(ii).
"Event of Default" shall mean any of the occurrences
set forth in Section 10.01 after the expiration of any applicable
grace period expressly provided therein.
"Existing Indebtedness" shall mean the Indebtedness of
the Borrower or any of its Subsidiaries reflected on Schedule
1.01-A.
"FDIC" shall mean the Federal Deposit Insurance
Corporation or any successor thereto.
"Federal Reserve Board" shall mean the Board of
Governors of the Federal Reserve System or any Governmental
Authority succeeding to its functions.
"Fee Letters" shall have the meaning ascribed to that
term in Section 2.04(c).
"Fiscal Year" shall mean the fiscal year of Borrower,
which shall be each twelve (12) month period ending on December
31 of each calendar year or such other period as Borrower may
designate and the Requisite Lenders may approve in writing.
"Fixed Charges" shall mean, with respect to the
Consolidated Borrower Group for any period, the sum of (i) Debt
Service during such period (but without duplication of payments
on Capital Leases to the extent included in Capital Expenditures
during such period), (ii) Capital Expenditures during such period
and (iii) Federal, state and local income tax expenses paid in
cash (net of any refunds received in cash) during such period.
"Fixed Charges Coverage Ratio" shall mean, with respect
to the Consolidated Borrower Group for any period, the ratio of
(a) EBITDA for such period to (b) Fixed Charges for such period.
For purposes of calculating the Fixed Charges Coverage Ratio for
the two fiscal quarter period ending June 30, 1995, Capital
Expenditures shall be assumed to be the lesser of actual Capital
Expenditures for such period or $13,000,000; and for purposes of
calculating the Fixed Charges Coverage Ratio for the three fiscal
quarter period ending September 30, 1995, Capital Expenditures
shall be assumed to be the lesser of actual Capital Expenditures
for such period or $19,500,000.
"Funding Date" shall mean, with respect to any Loan or
Letter of Credit, the date of the funding of such Loan or
issuance of such Letter of Credit.
"GAAP" shall mean generally accepted accounting
principles set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board, or in such other
statements by such other entity as may be in general use by
significant segments of the accounting profession, which are
applicable to the circumstances as of the date of determination.
"Governmental Authority" shall mean any nation, state,
sovereign, or government, any federal, regional, state, local or
political subdivision and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of
or pertaining to government including without limitation, any
central bank.
"Guarantor" shall mean any Borrower Subsidiary which
has executed the Subsidiary Guaranty.
"Hedging Contracts" shall mean interest rate, foreign
currency or commodity exchange, swap, collar, cap or similar
agreements entered into before or after the Effective Date by
Borrower or any of its Subsidiaries to hedge its interest rate,
foreign currency or commodity exposure and not for purposes of
speculation.
"Holders of Secured Obligations" shall mean the holders
of the Obligations from time to time and shall refer to (i) each
Lender in respect of its Loans, (ii) the Issuing Bank in respect
of Reimbursement Obligations, (iii) the Administrative Agent, the
Collateral Agent, the Lenders and the Issuing Bank in respect of
all other present and future obligations and liabilities of
Borrower of every type and description arising under or in
connection with this Agreement or any other Loan Document,
(iii) each other Person entitled to indemnification pursuant to
Section 12.04, in respect of the obligations and liabilities of
Borrower to such Person thereunder, (iv) each Lender, in respect
of all obligations and liabilities of Borrower or any Guarantor
to such Lender as exchange party or counterparty under any
Eligible Hedging Contract, and (v) their respective successors,
transferees and assigns.
"Indebtedness," as applied to any Person, shall mean
any obligation for the payment of money which is a Contractual
Obligation, and shall include, without limitation but without
duplication, (i) all indebtedness, obligations or other
liabilities of such Person for borrowed money or under any debt
Securities, whether or not subordinated, (ii) all obligations
with respect to redeemable stock and redemption or repurchase
obligations under any equity securities or profit payment
agreements, (iii) all reimbursement obligations (absolute or
contingent) and other liabilities of such Person with respect to
letters of credit issued for such Person's account or for which
such party is a co-applicant, (iv) all obligations of such Person
to pay the purchase price of property or services, except trade
payables and accrued expenses incurred by such Person in the
ordinary course of business as currently conducted, (v) all
obligations in respect of Capital Leases of such Person, (vi) all
Accommodation Obligations of such Person, (vii) all indebtedness,
obligations or other liabilities, contingent or otherwise, of
such Person or others secured, by a Lien on any asset of such
Person, whether or not such indebtedness, obligations or
liabilities are assumed by or are a personal liability of such
Person, (viii) all obligations upon which interest charges are
customarily paid (including zero coupon instruments), (ix) all
obligations under conditional sale or other title retention
agreements relating to property purchased by such person and (x)
obligations in respect of interest rate, foreign currency or
commodity exchange, swap, collar, cap or similar agreements.
"Intellectual Property Agreements" shall mean patent or
trademark security agreements executed by the Borrower and
certain of its Subsidiaries in favor of the Collateral Agent on
behalf of itself and the Holders of Secured Obligations as the
same may be amended, restated, supplemented or otherwise modified
from time to time.
"Interest Coverage Ratio" shall mean, with respect to
the Consolidated Borrower Group for any period, the ratio of (a)
Net EBITDA for such period to (b) the amount of Cash Interest
Expense for such period.
"Interest Payment Date" shall mean, with respect to any
Eurodollar Rate Loan, (i) the last day of each Interest Period
applicable to such Loan and (ii) with respect to any Eurodollar
Rate Loan having an Interest Period in excess of three (3)
calendar months, the last day of each three (3) calendar month
interval during such Interest Period and, in addition, the date
of any refinancing or conversion of such Borrowing with or to a
Borrowing of a different Type.
"Interest Period" shall have the meaning ascribed to
such term in Section 2.07.
"Interest Rate Determination Date" shall mean the date
on which the Administrative Agent determines the LIBO Rate
applicable to a Borrowing, continuation or conversion of Euro-
dollar Rate Loans. The Interest Rate Determination Date shall be
the second (2nd) Business Day prior to the first day of the
Interest Period applicable to such Borrowing, continuation or
conversion.
"Investment" shall have the meaning ascribed to that
term in Section 8.03.
"IRC" shall mean the Internal Revenue Code of 1986, as
amended from time to time hereafter, and any successor statute.
"IRS" shall mean the Internal Revenue Service of the
United States or any Governmental Authority succeeding to the
functions thereof.
"Issuing Banks" shall mean the Lenders listed on
Schedule A hereto and any other Lender which, at the Borrower's
request, agrees, in each such Lender's sole discretion, to become
an Issuing Bank for the purpose of issuing Letters of Credit, and
their respective successors and assigns, in each case in such
Lender's separate capacity as an issuer of Standby Letters of
Credit or Commercial Letters of Credit, or both, pursuant to
Article III. The designation of any Lender as an Issuing Bank
after the date hereof shall be subject to the prior written
consent of the Administrative Agent, which consent shall not be
unreasonably withheld.
"Lender" shall have the meaning ascribed to such term
in the preamble and each Person which at any time becomes a
Lender pursuant to Section 12.02(a).
"Letter of Credit" shall mean any Commercial Letter of
Credit or any Standby Letter of Credit issued by an Issuing Bank
for the account of Borrower, or for the joint and several account
of Borrower and any of its Subsidiaries, in accordance with the
provisions of Article III.
"Letter of Credit Application" shall mean, with respect
to any proposed Letter of Credit requested to be delivered
pursuant to Section 3.03, an application substantially in the
form of the Issuing Bank's standard form application for letters
of credit of the type to be issued.
"Letter of Credit Commitment" shall mean, with respect
to any Lender that is an Issuing Bank, the obligation of such
Lender to issue Letters of Credit pursuant to the terms and
conditions of this Agreement which shall not exceed the principal
amount set forth opposite such Lender's name under the heading
"Letter of Credit Commitment" on the signature pages hereof, the
signature page of the Assignment and Acceptance by which it
became a Lender, or the signature page of a writing designating
such Lender as an Issuing Bank signed by the Borrower and such
Lender and delivered to the Administrative Agent in form and
substance satisfactory to the Administrative Agent, in each case,
as modified from time to time pursuant to the terms of this
Agreement or to give effect to any applicable Assignment and
Acceptance.
"Letter of Credit Obligations" shall mean, at any
particular time, the sum of (i) outstanding Reimbursement Obli-
gations and (ii) the aggregate undrawn face amount of outstanding
Letters of Credit.
"Letter of Credit Reimbursement Agreement" shall mean,
with respect to a Letter of Credit, such reimbursement agreement
as the Issuing Bank may employ in the ordinary course of business
for its own account.
"Leverage Ratio" shall mean, with respect to the
Consolidated Borrower Group for any period, the ratio of (a)
Total Indebtedness (other than Accommodation Obligations)
calculated at the end of such period to (b) Net EBITDA for such
period.
"Liabilities and Costs" shall mean all liabilities,
claims, obligations, responsibilities, losses, damages, punitive
damages, consequential damages, treble damages, charges, costs
and expenses (including, without limitation, attorneys', experts'
and consulting fees and costs of investigation and feasibility
studies), fines, penalties and monetary sanctions, interest,
direct or indirect, known or unknown, absolute or contingent,
past, present or future.
"LIBO Rate" shall mean, with respect to any Interest
Period applicable to a Borrowing of Eurodollar Rate Loans, an
interest rate per annum equal to the product of (i) the rate of
interest determined by the Administrative Agent to be the average
(rounded upwards, if necessary, to the next 1/16 of 1%) of the
rate per annum determined by each of the Reference Banks to be
the rate per annum at which deposits in Dollars are offered to
the principal London office of such Reference Bank in immediately
available funds in the London interbank market at approximately
11:00 a.m. (London time) on the Interest Rate Determination Date
for such Interest Period, in the approximate amount of such
Reference Bank's portion (or, in the case of Citibank, N.A.,
Citicorp USA, Inc.'s portion) of the relevant Eurodollar Rate
Loan and having a maturity comparable to such Interest Period and
(ii) Statutory Reserves.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, security
interest, encumbrance (including, but not limited to, easements,
rights of way and the like), judgment, lien (statutory or other),
Environmental Lien, Enforceable Judgment, charge, security
agreement or transfer intended as security, including, without
limitation, any conditional sale or other title retention
agreement, the interest of a lessor under a Capital Lease, any
financing lease having substantially the same economic effect as
any of the foregoing and, in the case of securities, any purchase
option, call or similar right of a third party with respect to
such securities.
"Loan" shall mean any Revolving Loan or any of the Term
Loans.
"Loans" shall mean, collectively, the Revolving Loans
and the Term Loans.
"Loan Account" shall have the meaning ascribed to such
term in Section 2.06(d).
"Loan Documents" shall mean this Agreement, the
Assumption Agreement, the Notes, the Fee Letters, the Collateral
Documents, the Letters of Credit, the Letter of Credit
Applications, the Letter of Credit Reimbursement Agreements and
all other agreements delivered to the Administrative Agent, the
Collateral Agent, any Issuing Bank or any Lender by or on behalf
of the Borrower or any of the Borrower's Subsidiaries in
satisfaction or furtherance of the requirements of this Agreement
or any other Loan Document.
"Margin Stock" shall have the meaning ascribed to such
term in Regulation G and Regulation U.
"Material Adverse Effect" shall mean a material adverse
effect (a) upon the business, assets or other properties,
liabilities or condition (financial or otherwise), results of
operations or prospects of Borrower, individually, or the
Consolidated Borrower Group taken as a whole; or (b) upon the
ability of the Borrower or any of the Subsidiaries of the
Borrower to perform any of its Obligations under any Loan
Document to which it is or will be a party, including, without
limitation, payment of the Obligations. In no event shall the
events or conditions described in Schedule 1.01-B be deemed to
have resulted in a Material Adverse Effect or be deemed to be
reasonably likely to have a Material Adverse Effect.
"Moody's" shall mean Moody's Investors Service, Inc.
and its successors.
"Mortgages" shall mean any and all mortgages, deeds of
trust, collateral assignments of beneficial interest, leasehold
mortgages and leasehold deeds of trust and covering the owned and
leased real property of Borrower and its Subsidiaries identified
on Schedule 1.01-C, executed by Borrower or a Subsidiary of the
Borrower, as applicable, in favor of the Collateral Agent for the
benefit of itself and the Holders of Secured Obligations, as the
same may be amended, supplemented or otherwise modified from time
to time.
"Multiemployer Plan" shall mean a "multiemployer plan"
as defined in Section 4001(a)(3) of ERISA which is, or within the
immediately preceding six (6) years was, contributed to by either
Borrower or any ERISA Affiliate.
"Net EBITDA" shall mean, with respect to the
Consolidated Borrower Group for any period (a) EBITDA for such
period minus (b) Securitization Expenses for such period.
"Net Interest Expense" shall mean, with respect to the
Consolidated Borrower Group for any period, net interest expense
for such period calculated in accordance with Agreement
Accounting Principles.
"Net Proceeds" shall mean with respect to any
Prepayment Event (a) the gross amount of cash proceeds (including
in each Fiscal Year the amount of insurance settlements and
condemnation awards in such fiscal year in excess of Set Aside
Amounts (it being understood that Set Aside Amounts shall not be
included in "Net Proceeds", and may be retained by the Borrower
or a Subsidiary of Borrower, as applicable, for the purposes
described in clause (i) of the definition of the term "Set Aside
Amount", unless and until any such amount shall cease to be a
"Set Aside Amount" as a result of any failure to meet any of the
criteria set forth in clause (i) or (ii) of such definition))
paid to or received by the Borrower or any Subsidiary of Borrower
in respect of such Prepayment Event (including cash proceeds
subsequently received in respect of such Prepayment Event in
respect of non-cash consideration initially received or
otherwise), less (b) the amount, if any, of all taxes (other than
income taxes) and the Borrower's good-faith best estimate of all
income taxes (to the extent that such amount shall have been set
aside or reserved for the purpose of paying such taxes when due),
and customary fees, commissions, costs and other expenses
(excluding fees and expenses payable to the Borrower, any
Affiliate of the Borrower or any Subsidiary of Borrower, other
than the reasonable fees and expenses of Rosenberg & Liebentritt,
P.C., Greenberg & Pociask, Equity Assets Management, Inc. or any
other Affiliate of Borrower performing services in connection
with any such Prepayment Event) that are incurred in connection
with such Prepayment Event and are payable by the seller or the
transferor of the assets or property or issuer of the securities,
as the case may be, to which such Prepayment Event relates, but
only to the extent not already deducted in arriving at the amount
referred to in clause (a).
"Net Worth" shall mean, with respect to the
Consolidated Borrower Group, total stockholders' equity in the
Borrower determined in accordance with Agreement Accounting
Principles consistently applied; adjusted, however, to exclude
the effect of any valuation adjustments, which are required by
GAAP or Agreement Accounting Principles (as applicable) to be
shown as a direct increase or decrease, as the case may be, in
Net Worth, including adjustments for currency translations,
unrealized gains or losses on marketable securities, receivables
arising from stock purchase plans and unearned compensation.
"Notes" shall mean the Notes executed by the Borrower
and delivered to the Lenders pursuant to Section 2.02 or Section
12.02.
"Notice of Borrowing" shall mean, with respect to a
proposed Borrowing pursuant to Section 2.02(a), or a proposed
issuance of a Letter of Credit pursuant to Section 3.04(a), a
notice substantially in the form of Exhibit 3 or other form
acceptable to the Administrative Agent.
"Notice of Conversion/Continuation" shall mean, with
respect to a proposed conversion or continuation of a Loan
pursuant to Section 2.03(c), a notice substantially in the form
of Exhibit 4 or other form acceptable to the Administrative
Agent.
"Obligations" shall mean the principal of and all
interest on all Loans and Reimbursement Obligations, all fees,
expense reimbursements, taxes, compensation and indemnities
payable by Borrower to the Administrative Agent, the Collateral
Agent, the Issuing Banks or any Lender pursuant to this Agreement
and all other present and future Indebtedness and other
liabilities of Borrower arising pursuant to this Agreement or any
other Loan Document and owing to the Administrative Agent, the
Collateral Agent, any Issuing Bank, any Lender, or any Person
entitled to indemnification pursuant to Section 12.04, or any of
their respective successors, transferees or assigns, arising
under or in connection with this Agreement, any Note, the Fee
Letters, any other Loan Document or any Eligible Hedging
Contract, whether or not evidenced by any note, guaranty or other
instrument, whether or not for the payment of money, whether
direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or
hereafter arising and however arising.
"Officer's Certificate" shall mean, as to any
corporation, a certificate executed on behalf of such corporation
by (i) its chairman or vice chairman of the board (if an officer)
or its president or any vice president or (ii) by its chief
financial officer, its controller or its treasurer.
"Operating Lease" shall mean, as applied to any Person,
any lease of any Property by that Person as lessee which is not a
Capital Lease.
"Other Indebtedness" shall mean all Indebtedness of
Borrower other than the Obligations.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation and any Person succeeding to the functions thereof.
"Permits" shall mean any permit, approval, consent,
authorization, license, variance, or permission required from a
Governmental Authority under an applicable Requirement of Law.
"Permitted Existing Liens" shall mean the Liens on any
property of the Borrower or its Subsidiaries, in each case
reflected on Schedule 1.01-D.
"Person" shall mean any natural person, corporation,
limited partnership, general partnership, joint stock company,
joint venture, association, company, trust, bank, trust company,
land trust, business trust or other organization, whether or not
a legal entity, or any other non-governmental entity, or any
Governmental Authority.
"Plan" shall mean an employee benefit plan defined in
Section 3(3) of ERISA in respect of which either the Borrower or
any ERISA Affiliate is, or within the immediately preceding six
(6) years was, an "employer" as defined in Section 3(5) of ERISA.
"Pledge Agreements" shall mean the Amended and Restated
Pledge Agreements dated as of November 9, 1994 executed in favor
of the Collateral Agent for the benefit of itself and the Holders
of Secured Obligations by (i) the Borrower in connection with the
pledge of the stock of each of the Borrower's Subsidiaries, and
(ii) certain of the Borrower's Subsidiaries in connection with
the pledge of the stock of their respective Subsidiaries, and the
Pledge Agreement dated as of April 12, 1995 executed in favor of
the Collateral Agent for the benefit of itself and the Holders of
Secured Obligations by Mansfield Plumbing Products, Inc. in
connection with the pledge of the stock of its Subsidiary, as any
of the same may be amended, restated, supplemented or otherwise
modified from time to time.
"Pooling and Servicing Agreement" shall mean (i) that
certain Pooling and Servicing Agreement dated as of January 1,
1994, as amended from time to time, among Centrally Held Eagle
Receivables Program, Inc., as seller, EIPC, as master servicer,
and Bank of America Illinois, as Trustee, or (ii) any replacement
pooling and servicing agreement, receivables transfer agreement
or similar agreement entered into by a Receivables Subsidiary
(or, if applicable, entered into by the Borrower or any
Subsidiary other than a Receivables Subsidiary directly with any
unaffiliated third parties) as part of a new Receivables
Securitization permitted hereby.
"Potential Event of Default" shall mean an event,
condition or circumstance which, with the giving of notice or the
lapse of time, or both, would constitute an Event of Default.
"Prepayment Event" shall mean (i) any sale, lease,
transfer, assignment, loss, damage or destruction (in the case of
loss, damage or destruction, to the extent covered by insurance)
or other disposition of assets (including trademarks and other
intangibles), business units, individual business assets or
property of the Borrower or any of its Subsidiaries, including
the sale, transfer or disposition of any capital stock thereof;
or (ii) the issuance by the Borrower for cash of any equity
securities or options or warrants convertible into or
exchangeable for such equity securities of the Borrower to any
party other than in connection with any employee stock option,
ownership or purchase plan of the Borrower or any of its
Subsidiaries; provided, however, that none of (a) the sale of
inventory in the ordinary course of business, (b) the sale of
accounts receivable pursuant to the Receivables Agreement, (c)
the sale, lease, transfer, assignment or other disposition of
assets of the Borrower or any Subsidiary of the Borrower to the
Borrower or any Guarantor or (d) the loss, damage or destruction
of any property (to the extent covered by insurance) to the
extent that the Net Proceeds of any single loss do not exceed
$2,000,000 shall be deemed to be a "Prepayment Event."
"Prime Rate" shall have the meaning ascribed to such
term in the definition of "Alternate Base Rate."
"Property" shall mean with respect to any Person, any
real or personal property, plant, building, facility, structure,
equipment or unit, or other asset (tangible or intangible) owned,
leased or operated by such Person.
"Pro Rata Share" shall mean, at any particular time and
with respect to any Lender, a fraction (expressed as a
percentage), the numerator of which shall be the amount of such
Lender's Revolving Credit Commitment plus the outstanding
principal balance of such Lender's Term Loan at such time and the
denominator of which shall be the aggregate Revolving Credit
Commitments plus the aggregate outstanding principal balance of
the Term Loans at such time; provided, however, in the event that
the Revolving Credit Commitments have been terminated pursuant to
the terms of this Agreement, the numerator of such fraction shall
be the outstanding principal balance of such Lender's Revolving
Loans and Term Loan plus the amount of such Lender's
participations in the outstanding Letters of Credit at such time,
and the denominator thereof shall be the aggregate outstanding
principal balance of the Loans plus the aggregate outstanding
balance of the Letters of Credit at such time.
"RCRA" shall mean the Resource Conservation and
Recovery Act, 42 U.S.C. subsection 6901 et seq., and any successor
statute, and regulations promulgated thereunder.
"Receivables Agreement" shall mean (i) the Amended and
Restated Receivables Sale and Servicing Agreement dated as of
July 1, 1994, among EIPC, as buyer and master servicer, and
certain Subsidiaries of the Borrower, as sellers and sub-servicers,
as the same may be amended, restated, supplemented or
otherwise modified from time to time as permitted hereby or (ii)
any replacement receivables purchase agreement entered into by
the foregoing sellers as part of a new Receivables Securitization
permitted hereby and any related Pooling and Servicing Agreement
to which the Borrower or any Subsidiary is a party.
"Receivables Securitization" shall mean (i) the sales
by certain of the Borrower's Subsidiaries of accounts receivable
originated by such Subsidiaries from time to time and related
general intangibles supporting or guaranteeing the payment of
such accounts receivable and (ii) the transfers (whether
characterized as sales or non-recourse loans) by any Receivables
Subsidiary of interests in the assets so purchased to a trust,
collateral agent or other institution not affiliated with the
Borrower in order to finance the Receivables Subsidiary's
acquisition of such accounts receivable.
"Receivables Subsidiary" shall mean any Subsidiary of
the Borrower created solely for the purpose of purchasing
accounts receivable and related general intangibles of the
Borrower and its Subsidiaries in connection with a Receivables
Securitization and which has no other material assets except for
the accounts receivable and related property so purchased and
which engages in no other business activities except as may be
necessary or incidental to the financing of such purchases.
"Reference Banks" shall mean Chemical, Citibank, N.A.
and PNC Bank, National Association.
"Regulation D," "Regulation G," "Regulation T,"
"Regulation U" and "Regulation X" shall mean Regulation D,
Regulation G, Regulation T, Regulation U and Regulation X,
respectively, of the Federal Reserve Board as in effect from time
to time.
"Reimbursement Obligations" shall mean the reimburse-
ment or repayment obligations of Borrower to the Issuing Banks
pursuant to any Letter of Credit and related Letter of Credit
Applications or Letter of Credit Reimbursement Agreements issued
or delivered pursuant to Article III hereof.
"Release" shall mean any release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration from any Property into the
indoor or outdoor environment, including the movement of
Contaminants through or in the air, soil, surface water,
groundwater or Property.
"Remedial Action" shall mean any action required to
(i) clean up, remove, treat or in any other way address
Contaminants in the indoor or outdoor environment; (ii) prevent a
Release or threat of Release or minimize the further Release of
Contaminants so they do not migrate or endanger or threaten to
endanger public health or welfare or the indoor or outdoor
environment; or (iii) perform pre-remedial studies and
investigations or post-remedial monitoring and care.
"Reportable Event" shall mean the events described in
Sections 4043(b)(1), 4043(b)(4), 4043(b)(5), 4043(b)(6) or
4043(b)(9) of ERISA or the regulations thereunder.
"Requirements of Law" shall mean, as to any Person, the
charter and by-laws or other organizational or governing
documents of such Person, and any law, rule or regulation,
Permit, or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding
upon such Person or any of its Property or to which such Person
or any of its property is subject, including, without limitation,
the Securities Act, the Securities Exchange Act, Regulation G,
Regulation T, Regulation U and Regulation X, and any certificate
of occupancy, zoning ordinance, building, environmental or land
use, law, rule, regulation, ordinance or Permit or occupational
safety or health law, rule or regulation.
"Requisite Lenders" shall mean, except as otherwise
provided in Section 12.06(b)(v), Lenders whose Pro Rata Shares,
in the aggregate, are greater than fifty percent (50%).
"Restricted Junior Payment" shall mean (i) any dividend
or other distribution, direct or indirect, on account of any
shares of any class of capital stock of Borrower or any of its
Subsidiaries, except a distribution of stock as part of a stock
split and except a dividend payable solely in shares of that
class of stock or in any junior class of stock to the holders of
that class, provided that the issuance of such stock or junior
class of stock is not an incurrence of Indebtedness, (ii) any
redemption, retirement, sinking fund or similar payment, purchase
or other acquisition for value, direct or indirect, of any shares
of any class of capital stock of Borrower or any of its
Subsidiaries now or hereafter outstanding, (iii) any payment made
to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class
of capital stock of Borrower or any of its Subsidiaries now or
hereafter outstanding, (iv) any payment of a claim for the
rescission of the purchase or sale of, or for material damages
arising from the purchase or sale of, any shares of the capital
stock of Borrower or any of its Subsidiaries or of a claim for
reimbursement, indemnification or contribution arising out of or
related to any such claim for damages or rescission, (v) any
payment of tax-sharing payments, allocated corporate overhead,
guaranty fees or management fees to any of Borrower's Affiliates
(other than a Guarantor) and (vi) any payment in the nature of a
loan from Borrower or any of its Subsidiaries to EIPC or any of
EIPC's other Affiliates.
"Revolving Credit Availability" shall mean, as at any
particular date of determination, the amount by which the
Revolving Credit Commitments exceed Revolving Loan Usage. For
purposes of calculating Revolving Credit Availability as at any
date, all Revolving Loans requested but not yet advanced and the
aggregate face amount of all Letters of Credit requested but not
yet issued will be treated as advanced and issued in calculating
Revolving Loan Usage unless the Borrower has directed that the
requested advance be disbursed to repay the Revolving Loans.
"Revolving Credit Commitment" means, with respect to
any Lender, the obligation of such Lender to make Revolving Loans
and to participate in Letters of Credit pursuant to the terms and
conditions of this Agreement, and which shall not exceed the
principal amount set forth opposite such Lender's name under the
heading "Revolving Credit Commitment" on the signature pages
hereof or determined in accordance with the provisions of the
Assignment and Acceptance by which it became a Lender, as
modified from time to time pursuant to the terms of this
Agreement or to give effect to any applicable Assignment and
Acceptance, and "Revolving Credit Commitments" means the
aggregate principal amount of the Revolving Credit Commitments of
all the Lenders, the maximum amount of which shall be
$150,000,000.
"Revolving Credit Facility" shall mean the revolving
credit facility established for Revolving Loans pursuant to
Section 2.01.
"Revolving Credit Termination Date" shall mean the
earlier of (a) June 30, 2001 (or, if the Revolving Credit
Facility is extended pursuant to Section 2.02(g), June 30, 2002)
and (b) the date of termination of the Revolving Credit
Commitments pursuant to Section 2.02(d) or Section 10.02(a).
"Revolving Loan" shall have the meaning ascribed to
such term in Section 2.01(a).
"Revolving Loan Usage" shall mean, at any given time,
the sum of (i) the aggregate outstanding principal balance of
Revolving Loans and (ii) the aggregate outstanding Letter of
Credit Obligations.
"S&P" shall mean Standard & Poor's Rating Group, a
division of McGraw-Hill Corporation, and its successors.
"Samuel Zell Group" shall mean Samuel Zell, Ann Lurie,
any trust created for the benefit of Samuel Zell or Ann Lurie or
their families, and any of their affiliates (as such term is
defined in Rule 12b-2 of the Securities Exchange Act).
"Securities" shall mean any stock, shares, voting trust
certificates, bonds, debentures, notes or other evidences of
indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as
"securities", or any certificates of interest, shares, or
participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to,
purchase or acquire any of, the foregoing, but shall not include
any evidence of the Obligations.
"Securities Act" shall mean the Securities Act of 1933,
as amended to the date hereof and from time to time hereafter,
and any successor statute.
"Securities Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended to the date hereof and from time
to time hereafter, and any successor statute.
"Securitization Expenses" shall mean, with respect to
any period, the sum of (i) the amount by which (A) the stated
amount of accounts receivable sold by Borrower and/or its
Subsidiaries pursuant to the Receivables Agreement during such
period exceeds (B) the consideration received for such accounts
receivable, plus (ii) any payments made during such period
pursuant to the indemnification provisions of the Receivables
Agreement.
"Senior Debt Ratings" shall mean the publicly announced
ratings of the Borrower's senior, unsecured, non-credit enhanced
long-term debt by Moody's, S&P and D&P.
"Set Aside Amount" shall mean, in respect of any
insurance settlement or condemnation award which does not in the
aggregate exceed $10,000,000 received by the Borrower or any
Subsidiary of the Borrower and (i) set aside by the Borrower or
the applicable Subsidiary for the replacement or repair of any
lost, destroyed or damaged assets, equipment or other property
that were the subject of an insurable loss, destruction or damage
and for which an insurance settlement was made or (ii) set aside
by the Borrower or the applicable Subsidiary for the replacement
of any real property that was the subject of a taking and in
respect of which a condemnation award was made provided such
replacement or repair is commenced within six months of the
receipt of any such condemnation award or insurance proceeds
related to such loss, destruction or damage or such taking, as
applicable and pursued with diligence.
"Solvent" shall mean, when used with respect to any
Person, that at the time of determination:
(i) the fair value of its assets (both at fair
valuation and at present fair saleable value) is equal
to or in excess of the total amount of its liabilities,
including, without limitation, contingent liabilities;
and
(ii) it is then able and expects to be able to
pay its debts as they mature; and
(iii) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted.
With respect to contingent liabilities (such as litigation,
guarantees and pension plan liabilities), such liabilities shall
be computed at the amount which, in light of all the facts and
circumstances existing at the time, represent the amount which
can reasonably be expected to become an actual or matured
liability.
"Standby Letter of Credit" shall mean any letter of
credit which is not a Commercial Letter of Credit.
"Statutory Reserves" shall mean a fraction (expressed
as a decimal), the numerator of which is the number one and the
denominator of which is the number one minus the aggregate of the
maximum applicable reserve percentages (including any marginal,
special, emergency or supplemental reserves) expressed as a
decimal established by the Federal Reserve Board and any other
banking authority to which the Administrative Agent or any Lender
is subject (a) with respect to the Three-month Secondary CD Rate
(as such term is used in the definition of "Alternate Base
Rate"), for new negotiable nonpersonal time deposits in dollars
of over $100,000 with maturities approximately equal to three
months or (b) with respect to the LIBO Rate, for Eurocurrency
Liabilities (as defined in Regulation D of the Federal Reserve
Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Rate Loans shall be
deemed to constitute Eurocurrency Liabilities and to be subject
to such reserve requirements without benefit of or credit for
proration, exceptions or offsets which may be available from time
to time to any Lender under such Regulation D. Statutory
Reserves shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"Subsidiary" shall mean, with respect to any Person,
any corporation, partnership, trust or other entity of which a
majority of the stock (or equivalent ownership or controlling
interest) having voting power to elect a majority of the Board of
Directors (if a corporation) or to select the trustee or
equivalent controlling interest is directly or indirectly owned
or controlled by such Person or one or more of the other
Subsidiaries of such Person or any combination thereof.
"Subsidiary Guaranty" shall mean the guaranties of the
Borrower's Obligations pursuant to the Subsidiary Guaranty dated
as of November 9, 1994, as amended, executed by each of the
Borrower's domestic Subsidiaries in favor of the Administrative
Agent, the Collateral Agent and the Lenders, as the same may be
amended, restated, supplemented or otherwise modified from time
to time.
"Subsidiary Security Agreement" shall mean the
Subsidiary Security Agreement dated as of November 9, 1994, as
amended, executed by each of the domestic Subsidiaries of the
Borrower in favor of the Collateral Agent, for the benefit of
itself and the Holders of Secured Obligations as the same may be
amended, restated, supplemented or otherwise modified from time
to time.
"Supermajority Lenders" shall mean, except as otherwise
provided in Section 12.06(b)(v), Lenders whose Pro Rata Shares,
in the aggregate, are equal to or greater than sixty-six and two-thirds
percent (66 2/3%).
"Tax Sharing Agreement" shall mean that certain GAMI-Falcon
Disaffiliation Tax Sharing Agreement among the Borrower,
EIPC, O.D.E. Manufacturing Inc., Amerace Corporation and Great
American Management and Investment, Inc. dated as of November 9,
1994, as the same may be amended, restated, supplemented or
otherwise modified from time to time (i) in any respect which
does not (a) result in the Borrower being required to make any
greater payments thereunder either in absolute amounts or
percentage terms or (b) reduce either in absolute amounts or
percentage terms the benefits to the Borrower or (ii) otherwise
with the consent of the Requisite Lenders.
"Taxes" shall have the meaning ascribed to such term in
Section 2.09(a).
"Term Loans" shall have the meaning ascribed to such
term in Section 2.01(c).
"Term Loan Termination Date" shall mean the earlier of
(a) June 30, 2001 and (b) the date of acceleration of the Term
Loans pursuant to Section 10.02(a).
"Termination Event" shall mean (i) a Reportable Event
with respect to any Benefit Plan; (ii) the withdrawal of Borrower
or any ERISA Affiliate from a Benefit Plan during a plan year in
which Borrower or such ERISA Affiliate was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA; (iii) the
imposition of an obligation on Borrower or any ERISA Affiliate
under Section 4041 of ERISA to provide affected parties written
notice of intent to terminate a Benefit Plan in a distress
termination described in Section 4041(c) of ERISA; (iv) the
institution by the PBGC of proceedings to terminate a Benefit
Plan; (v) any event or condition which might constitute grounds
under Section 4042 of ERISA for the distress termination of, or
the appointment of a trustee to administer, any Benefit Plan; or
(vi) the partial or complete withdrawal of Borrower or any ERISA
Affiliate at the time the withdrawing entity was an ERISA
Affiliate from a Multiemployer Plan if such withdrawal could
result in the imposition of withdrawal liability under Section
4219 of ERISA.
"Total Indebtedness" shall mean, with respect to the
Consolidated Borrower Group as of any date, all Indebtedness
which would be reflected as long-term debt on a balance sheet of
the Consolidated Borrower Group prepared in accordance with
Agreement Accounting Principles, including all current maturities
thereof.
"Transaction Costs" shall mean the fees, costs and
expenses payable by or reasonably allocated to Borrower or any of
its Subsidiaries pursuant hereto or in connection herewith or in
respect hereof or of the other Loan Documents.
"Transaction Documents" shall mean the Loan Documents
and the Contribution Agreement.
"Type" when used in respect of any Loan or Borrowing,
shall refer to the rate by reference to which interest on such
Loan or on the Loans comprising such Borrowing is determined.
"U.S. Person" shall mean a citizen or resident of the
United States of America, a corporation, partnership or other
entity created or organized in or under any laws of the United
States of America, or any estate or trust that is subject to
Federal income taxation regardless of the source of its income.
"U.S. Taxes" shall mean any present or future tax,
assessment or other charge or levy imposed by or on behalf of the
United States of America or any taxing authority thereof.
1.02. Computation of Time Periods. In this Agreement,
in the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including"
and the words "to" and "until" each mean "to but excluding."
Periods of days referred to in this Agreement shall be counted in
calendar days unless Business Days are expressly prescribed.
1.03. Accounting Terms. For purposes of this
Agreement, all accounting terms not otherwise defined herein
shall have the meanings assigned to them in conformity with
Agreement Accounting Principles.
1.04. Other Definitional Provisions. Whenever the
context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include,"
"includes" and "including" shall be deemed to be followed by the
phrase "without limitation." References to "Articles,"
"Sections," "subsections," "Schedules," "Exhibits," "the
preamble" and "the recitals" shall be to Articles, Sections,
subsections, Schedules, Exhibits, the preamble and the recitals,
respectively, of this Agreement unless otherwise specifically
provided.
ARTICLE II
Amounts and Terms of Loans
2.01. Revolving Loans and Term Loans.
(a) Availability. Subject to the terms and conditions
set forth in this Agreement, each Lender hereby severally and not
jointly agrees to make revolving loans, in Dollars (each
individually, a "Revolving Loan" and, collectively, the
"Revolving Loans") to Borrower and to participate in Letters of
Credit issued pursuant to Article III hereof from time to time
during the period from the Effective Date to the Business Day
immediately preceding the Revolving Credit Termination Date, in
an amount which shall not exceed such Lender's Pro Rata Share of
the Revolving Credit Availability at such time.
(b) Several Commitments. All Revolving Loans
comprising the same Borrowing under this Agreement shall be made
by the Lenders simultaneously and proportionately to their
respective Pro Rata Shares, it being understood that no Lender
shall be responsible for any failure by any other Lender to
perform its obligation to make a Revolving Loan hereunder and
that the Commitment of any Lender shall not be increased or
decreased without the prior written consent of such Lender as a
result of the failure by any other Lender to perform its
obligation to make a Revolving Loan. The failure of any Lender
to make available to the Administrative Agent its Pro Rata Share
of any Borrowing of the Commitments shall not relieve any other
Lender of its obligation hereunder to make available to the
Administrative Agent such other Lender's Pro Rata Share of any
Borrowing of the Commitments on the date such funds are to be
made available pursuant to the terms of this Agreement.
(c) Term Loans. As of the Effective Date,
$100,000,000 aggregate principal amount of the outstanding
Agreement Obligations shall be deemed to be outstanding hereunder
as term loans (the "Term Loans") with respect to each Lender in
the principal amount set forth opposite such Lender's name under
the heading "Term Loan" on the signature pages hereof. The
balance of the outstanding principal amount of the Agreement
Obligations in excess of $100,000,000 as of the Effective Date
shall be deemed to be outstanding hereunder as Revolving Loans.
The Term Loans shall be payable as follows:
Amount of Term Loans
Period Payable During Such Period
July 1, 1995 through
June 30, 1996 $ 10,000,000
July 1, 1996 through
June 30, 1997 15,000,000
July 1, 1997 through
June 30, 1998 15,000,000
July 1, 1998 through
June 30, 1999 15,000,000
July 1, 1999 through
June 30, 2000 20,000,000
July 1, 2000 through
June 30, 2001 25,000,000
Each amortization payment for each period described above shall
be payable in equal installments of principal, plus accrued
interest, on the last calendar day of each calendar quarter
during such period beginning with September 30, 1995.
(d) Optional Repayments. The Borrower may, at any
time and from time to time, prepay any Base Rate Loan, in whole
or in part upon at least one (1) Business Day's prior written
notice to the Administrative Agent (which the Administrative
Agent shall promptly transmit to each Lender). Eurodollar Rate
Loans may be prepaid (A) in whole or in part on the expiration
date of the then applicable Eurodollar Interest Period and (B)
upon at least three (3) Business Days' prior written notice to
the Administrative Agent (which the Administrative Agent shall
promptly transmit to each Lender) and only upon payment of the
amounts described in Section 2.08(d). Unless the aggregate
outstanding principal balance of the Term Loans is to be prepaid
in full, voluntary prepayments of the Term Loans shall be in an
aggregate minimum amount of $1,000,000 and integral multiples of
$1,000,000 in excess of that amount. Each voluntary prepayment
of the Term Loans shall be applied, first, to the first unpaid
scheduled installment of the Term Loans due following the date of
such repayment and, thereafter, pro rata to all remaining unpaid
scheduled installments of the Term Loans. Any notice of
prepayment given to the Administrative Agent under this Section
2.01(d) shall specify the date (which shall be a Business Day) of
prepayment, the aggregate principal amount of the prepayment and
any allocation of such amount among Base Rate Loans and
Eurodollar Rate Loans. When notice of prepayment is delivered as
provided herein, the principal amount of the Loans specified in
the notice shall become due and payable on the prepayment date
specified in such notice.
(e) Maturity. Each Lender's Revolving Credit
Commitment shall expire, and each of the Revolving Loans then
outstanding shall mature and be repaid by Borrower, without
further action on the part of the Lenders, on the Revolving
Credit Termination Date; and each Lender's Term Loan then
outstanding shall mature and be repaid by Borrower, without
further action on the part of the Lenders, on the Term Loan
Termination Date.
(f) Minimum Amounts. Loans made on any Funding Date
shall be in integral multiples of $500,000 and in the aggregate
minimum amount of $1,000,000, in the case of Loans constituting
Base Rate Loans, and in integral multiples of $1,000,000 and in
the aggregate minimum amount of $2,000,000, in the case of Loans
constituting Eurodollar Rate Loans.
(g) Adjustment on the Effective Date. On the
Effective Date, each Lender shall make a payment to or receive a
payment from the Administrative Agent according to whether such
Lender's Pro Rata Share of the Loans outstanding on the Effective
Date, after giving effect to any request for Revolving Loans to
be made on the Effective Date, is greater or smaller,
respectively, than the outstanding amount of such Lender's loans
under the Original Credit Agreement (as defined in the Recitals
to this Agreement) immediately prior to giving effect to this
Agreement. Any failure by any Lender to make a payment to the
Administrative Agent required by this Section 2.01(g) shall be
deemed to be a failure to fund subject to Section 2.02(c) and
Section 12.06(b).
2.02. Revolving Loan Facility Mechanics.
(a) Notice of Borrowing. Whenever Borrower desires to
borrow under Section 2.01(a), Borrower shall deliver to the
Administrative Agent a Notice of Borrowing no later than 12:00
noon (New York City time) (i) at least one (1) Business Day in
advance of the proposed Funding Date, in the case of a Borrowing
of Base Rate Loans, and (ii) at least three (3) Business Days in
advance of the proposed Funding Date, in the case of a Borrowing
of Eurodollar Rate Loans. The Notice of Borrowing shall specify
(A) the Funding Date (which shall be a Business Day) in respect
of the Loan, (B) the amount of the proposed Borrowing, (C)
whether the proposed Borrowing will be of Base Rate Loans or
Eurodollar Rate Loans, and (D) in the case of Eurodollar Rate
Loans, the requested Interest Period. In lieu of delivering the
above-described Notice of Borrowing, and only with the consent of
the Administrative Agent in its sole discretion at such time,
Borrower may give the Administrative Agent telephonic notice of
any proposed Borrowing by the time required under this Section
2.02(a); provided that, in the event the Administrative Agent so
consents, such notice shall be confirmed in writing by delivery
to the Administrative Agent promptly (but in no event later than
12:00 noon on the Funding Date of the requested Loan) of a Notice
of Borrowing. Any Notice of Borrowing (or telephonic notice in
lieu thereof) pursuant to this Section 2.02(a) shall be
irrevocable.
(b) Making of Loans. Promptly after receipt of a
Notice of Borrowing under Section 2.02(a) (or telephonic notice
in lieu thereof if the Administrative Agent consents to such
telephonic notice), the Administrative Agent shall notify each
Lender by telex or telecopy or other similar form of teletrans-
mission, of the proposed Borrowing. Each Lender shall make the
amount of its Revolving Loan available to the Administrative
Agent in Dollars and in immediately available funds, not later
than 11:00 a.m. (New York City time) on the Funding Date. After
the Administrative Agent's receipt of the proceeds of such
Revolving Loans, the Administrative Agent shall (unless it has
not received the Notice of Borrowing in satisfaction of the
requirements of Section 4.02(a) or has been informed that any of
the other conditions precedent have not been satisfied) make the
proceeds of such Revolving Loans available to Borrower on such
Funding Date and shall disburse such funds in Dollars and in
immediately available funds to an account of Borrower, designated
in writing by Borrower in the Notice of Borrowing.
(c) Failure to Fund by Lender. Unless the
Administrative Agent shall have been notified by any Lender prior
to any Funding Date in respect of any Borrowing of Revolving
Loans that such Lender does not intend to make available to the
Administrative Agent such Lender's Revolving Loan on such Funding
Date, the Administrative Agent may assume that such Lender has
made such amount available to the Administrative Agent on such
Funding Date and the Administrative Agent in its sole discretion
may, but shall not be obligated to, make available to Borrower a
corresponding amount on such Funding Date. If such corresponding
amount is not in fact made available to the Administrative Agent
by such Lender on or prior to 11:00 a.m. (New York City time) on
a Funding Date, such Lender agrees to pay and Borrower agrees to
repay to the Administrative Agent forthwith on demand such corre-
sponding amount together with interest thereon, for each day from
the date such amount is made available to Borrower until the date
such amount is paid or repaid to the Administrative Agent, at (i)
in the case of such Lender, the Federal Funds Effective Rate (as
such term is defined in the definition of Alternate Base Rate)
for the first three (3) Business Days and thereafter at the
Alternate Base Rate, and (ii) in the case of Borrower, the
interest rate which would be applicable at the time to a
Borrowing of Base Rate Loans. If such Lender shall pay to the
Administrative Agent such corresponding amount, such amount so
paid shall constitute such Lender's Revolving Loan, and if both
such Lender and Borrower shall have paid and repaid, respec-
tively, such corresponding amount, the Administrative Agent shall
promptly pay over to Borrower such corresponding amount in same
day funds, but Borrower shall remain obligated for all interest
thereon. Nothing in this Section 2.02(c) shall be deemed to
relieve any Lender of its obligation hereunder to make its
Revolving Loan on any Funding Date.
(d) Voluntary Reduction of Commitments. Borrower
shall have the right, at any time and from time to time, (i) to
terminate the Revolving Credit Commitments in whole, without
premium or penalty, if no Revolving Loans or Letters of Credit
are then outstanding, and no Revolving Loans or Letters of Credit
have been requested but not yet advanced, or (ii) subject to the
second to last sentence of this Section 2.02(d), permanently to
reduce in part, without premium or penalty, the Revolving Credit
Commitments up to the amount by which the Revolving Credit
Commitments exceed the sum of (A) the Revolving Loan Usage,
(B) the aggregate principal amount of all Revolving Loans
requested hereunder but not yet advanced and (C) the aggregate
face amount of all Letters of Credit requested hereunder but not
yet issued. Borrower shall give not fewer than five (5) Business
Days' prior written notice to the Administrative Agent
designating the date (which shall be a Business Day) of such
termination or reduction and the amount of any partial reduction.
Promptly after receipt of a notice of such termination or
reduction, the Administrative Agent shall notify each Lender of
the proposed termination or reduction. Such termination or
partial reduction of the Revolving Credit Commitments shall be
effective on the date specified in the Borrower's notice and
shall reduce the Revolving Credit Commitment of each Lender
proportionately in accordance with its Pro Rata Share. Any such
partial reduction of the Revolving Credit Commitments shall be in
an aggregate minimum amount of $1,000,000 and integral multiples
of $1,000,000 in excess of that amount. Any notice of reduction
or termination pursuant to this Section 2.02(d) shall be
irrevocable.
(e) Retention of Rights and Remedies. Notwithstanding
the termination of this Agreement on June 30, 2001 (or, if
extended pursuant to Section 2.02(g), June 30, 2002), until all
of the Obligations shall have been fully and indefeasibly paid in
cash and satisfied and all financing arrangements among Borrower
and the Lenders pursuant to any Loan Document shall have been
terminated, all of the rights and remedies under this Agreement
and the other Loan Documents shall survive and the Collateral
Agent shall be entitled to retain its security interest in and to
all existing and future Collateral for the benefit of itself and
the Holders of Secured Obligations.
(f) Notes. The Borrower shall execute and deliver to
each Lender (or to the Administrative Agent on behalf of each
Lender) on or before the Effective Date promissory notes
substantially in the form of the applicable notes in Exhibit 5 to
evidence the aggregate amount of that Lender's Loans and with
other appropriate insertions. Each Lender is hereby authorized
to, and prior to any transfer of the Notes issued to it each
Lender shall, endorse the date and amount of each Loan made by
such Lender and each payment or prepayment of principal of the
Loans evidenced thereby on the schedule annexed to and
constituting a part of such Note, which endorsement shall
constitute prima facie evidence, absent manifest error, of the
accuracy of the information so endorsed, provided that failure by
any such Lender to make such endorsement shall not affect the
obligations of the Borrower hereunder or under such Note. In
lieu of endorsing such schedule as hereinabove provided, prior to
any transfer of such Note, each Lender is hereby authorized, at
its option, to record such Loans and such payments or prepayments
in its books and records, such books and records constituting
prima facie evidence, absent manifest error, of the accuracy of
the information contained therein; provided, however, that if the
Loan Account differs from the information endorsed by a Lender on
such Lender's Notes, the Loan Account, absent manifest error,
shall govern.
(g) Extension of Revolving Credit Facility. Subject
to the terms and conditions set forth in this Agreement, the
Revolving Credit Facility shall be in effect until June 30, 2001
(the "Initial Termination Date"), unless it is extended pursuant
hereto to June 30, 2002 (the "Extended Termination Date").
During the period from and including January 1, 2000, to and
including March 31, 2000, the Borrower may request in writing
(the "Extension Request") an extension of the Revolving Credit
Facility to the Extended Termination Date. The Revolving Credit
Facility shall be so extended if, after receipt of the Extension
Request, the Supermajority Lenders approve such extension within
60 days after receipt by the Administrative Agent of the
Extension Request; provided, however, that the failure by any
Lender to respond to the Extension Request shall be deemed to
constitute such Lender's denial of such Extension Request. If
the Extension Request is not made or is made but not approved by
the Supermajority Lenders, the Revolving Credit Facility shall
expire on the Initial Termination Date. Notwithstanding anything
herein to the contrary, no Lender that has denied its consent to
the Extension Request ("Dissenting Lender") shall be bound by the
approval of the Extension Request granted by the Supermajority
Lenders, and the Revolving Credit Commitment of each Dissenting
Lender, and each Dissenting Lender's participation in the Letters
of Credit, shall expire on the Initial Termination Date. The
Borrower shall have the right, at any time, to replace a
Dissenting Lender with another financial institution reasonably
acceptable to the Administrative Agent. In the event that one or
more Dissenting Lenders are not so replaced prior to the Initial
Termination Date, on such date the amount of the Revolving Credit
Commitments shall be reduced by the aggregate amount of the
expiring Revolving Credit Commitments of Dissenting Lenders not
so replaced, each remaining Lender's Pro Rata Share shall be
adjusted accordingly (including its pro rata participation in the
Letters of Credit) and the Borrower shall pay to each Dissenting
Lender all amounts due and owing to such Dissenting Lender
hereunder or under any other Loan Document, including, without
limitation, the aggregate outstanding principal amount of the
Revolving and Term Loans owed to such Dissenting Lender, together
with accrued interest and fees thereon through the date of
repayment and amounts payable under Sections 2.09 and 2.10, all
of which amounts shall be immediately due and payable at such
time. Upon the replacement of a Dissenting Lender or payment of
a Dissenting Lender's Obligations on the Initial Termination Date
in accordance with the terms hereof, such Dissenting Lender shall
cease to be a party hereto but shall continue to be entitled to
the benefits of Sections 2.08, 2.09, 2.10, 3.09, 12.03 and 12.04.
2.03. Interest on the Loans.
(a) Rate of Interest. All Loans shall bear interest
on the unpaid principal amount thereof from the date made until
paid in full at a fluctuating rate determined from time to time
by reference to the Alternate Base Rate or the LIBO Rate. The
applicable basis for determining the rate of interest shall be
selected by Borrower at the time a Notice of Borrowing is given
by the Borrower or at the time a Notice of Conversion/Continua-
tion is delivered by Borrower pursuant to Section 2.03(c); pro-
vided, however, that Borrower may not select the LIBO Rate as the
applicable basis for determining the rate of interest on a Loan
if at the time of such selection a Potential Event of Default or
Event of Default exists or if such a selection would be otherwise
prohibited by the terms of this Agreement. If on any day a Loan
is outstanding with respect to which a Notice of Borrowing or a
Notice of Conversion/Continuation has not been delivered to the
Administrative Agent in accordance with the terms of this
Agreement specifying the basis for determining the rate of
interest, then for each such day such Loan shall be a Base Rate
Loan. Loans shall bear interest, subject to Section 2.03(d), at
the following rates:
(i) if a Base Rate Loan, then at a rate per annum
equal to the Alternate Base Rate as in effect from time
to time as interest accrues; and
(ii) if a Eurodollar Rate Loan, then at a rate
per annum equal to the sum of (A) the Applicable
Eurodollar Rate Margin and (B) the LIBO Rate determined
for the applicable Interest Period.
Upon receipt by the Administrative Agent of the first set of
financial statements delivered pursuant to Section 6.01(b) after
the fiscal quarter ending June 30, 1995 and each set of such
financial statements delivered pursuant to Section 6.01(b)
thereafter and the Compliance Certificate to be delivered in
connection therewith, the Applicable Eurodollar Rate Margin shall
be adjusted on the basis of the Borrower's Leverage Ratio as set
forth in such Compliance Certificate, such adjustment being
effective on the first Business Day after receipt of such
financial statements and Compliance Certificate; provided,
however, if the Borrower shall not have delivered such financial
statements on a timely basis in accordance with Section 6.01(b),
beginning with the date upon which such financial statements
should have been delivered and continuing until such financial
statements are delivered, the Applicable Eurodollar Rate Margin
shall be adjusted based on the assumption that the Leverage Ratio
was greater than 2.25 to 1.0. Notwithstanding the foregoing, if
reference is made to the Senior Debt Ratings for determination of
the Applicable Eurodollar Rate Margin, the Applicable Eurodollar
Rate Margin shall be adjusted without reference to the delivery
of the Borrower's financial statements, such adjustment being
effective on the first Business Day after any change in the
Senior Debt Ratings. In no event shall any adjustment which
would reduce the Applicable Eurodollar Rate Margin be made
pursuant to this Section 2.03(a) if on the date such adjustment
would otherwise become effective an Event of Default or Potential
Event of Default exists.
(b) Interest Payments. Subject to Section 2.03(d),
(i) interest accrued on each Base Rate Loan shall be payable in
arrears (A) on the last calendar day of each calendar quarter
occurring after the Effective Date, (B) upon the prepayment in
full of the Loans and the termination of all Commitments under
this Agreement, (C) upon the date any principal of the Loan is
due or prepaid, with respect to the principal amount then due or
prepaid, and (D) on the Revolving Credit Termination Date, and
(ii) interest accrued on each Eurodollar Rate Loan shall be
payable in arrears (A) on each Interest Payment Date applicable
to such Eurodollar Rate Loan, (B) upon the prepayment in full of
the Loans and the termination of all Commitments under this
Agreement, (C) upon the date any principal of the Loan is due or
prepaid, with respect to the principal then due or prepaid, and
(D) on the Revolving Credit Termination Date.
(c) Conversion or Continuation. (i) Subject to the
provisions of Sections 2.07 and 2.08, Borrower shall have the
option (A) to convert at any time all or any part of outstanding
Loans which comprise part of the same Borrowing and which, in the
aggregate, equal or exceed $2,000,000 from Base Rate Loans to
Eurodollar Rate Loans; or (B) to convert all or any part of
outstanding Loans which comprise part of the same Borrowing and
which, in the aggregate, equal or exceed $2,000,000 from
Eurodollar Rate Loans to Base Rate Loans on the expiration date
of any Interest Period applicable thereto or upon the payment of
compensation payable pursuant to Section 2.08(d); or (C) upon the
expiration of any Interest Period applicable to a Borrowing of
Eurodollar Rate Loans, to continue all or any portion of such
Loans equal to or in excess of $5,000,000 as Eurodollar Rate
Loans of the same type, and the succeeding Interest Period of
such continued Loans shall commence on the expiration date of the
Interest Period applicable thereto; provided that no outstanding
Loan may be continued as, or be converted into, a Eurodollar Rate
Loan if any Potential Event of Default or Event of Default exists
or if such a continuation or conversion would otherwise be
prohibited by the terms of this Agreement.
(ii) In the event Borrower shall elect to convert or
continue a Loan under this Section 2.03(c), Borrower shall
deliver a Notice of Conversion/Continuation to the Administrative
Agent no later than 12:00 noon (New York City time) (A) at least
one (1) Business Day in advance of the proposed conversion date
in the case of a conversion to a Base Rate Loan and (B) at least
three (3) Business Days in advance of the proposed conversion or
continuation date in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan. A Notice of Conversion/
Continuation shall specify (1) the proposed conversion or continuation
date (which shall be a Business Day), (2) the amount
of the Loan to be converted or continued, (3) the nature of the
proposed conversion or continuation, and (4) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, the
requested Interest Period. If no Interest Period is specified in
any such Notice of Conversion/Continuation with respect to a
Eurodollar Rate Loan, the Borrower shall be deemed to have
selected an Interest Period of one month's duration. In lieu of
delivering the above-described Notice of Conversion/Continuation,
Borrower may give the Administrative Agent telephonic notice of
any proposed conversion or continuation by the time required
under this Section 2.03(c); provided that such notice shall be
confirmed in writing by delivery to the Administrative Agent
promptly (but in no event later than 12:00 noon (New York City
time) on the proposed conversion or continuation date) of a
Notice of Conversion/Continuation. Promptly after receipt of a
Notice of Conversion/Continuation under this Section 2.03(c) (or
telephonic notice in lieu thereof), the Administrative Agent
shall notify each Lender by telex, telecopy, telephone or other
similar form of transmission, of the proposed conversion or continuation.
(iii) Any Notice of Conversion/Continuation for
conversion to, or continuation of, a Loan (or telephonic notice
in lieu thereof) shall be irrevocable and the Borrower shall be
bound to convert or continue in accordance therewith.
(iv) Any portion of a Borrowing maturing or required
to be repaid in less than one month may not be converted into or
continued as a Eurodollar Rate Loan.
(d) Default Interest. Notwithstanding the rates of
interest specified in Section 2.03(a) and the payment dates
specified in Section 2.03(b), from and after the occurrence of an
Event of Default and for so long thereafter as such Event of
Default is continuing, the principal balance of all Loans and
other Obligations then outstanding (including, without
limitation, all amounts due and payable pursuant to
Section 10.02(a)) and, to the extent permitted by applicable law,
any interest payments on the Loans not paid when due, shall bear
interest payable upon demand at a rate per annum equal to the sum
of (A) two percent (2.0%) and (B) the interest rate otherwise
applicable thereto (the "Default Rate").
(e) Computation of Interest. Interest on all
Agreement Obligations (other than those on which the interest
rate is determined by reference to the Prime Rate) shall be
computed on the basis of the actual number of days elapsed in the
period during which interest accrues and a year of 360 days.
Interest on all Agreement Obligations with respect to which the
interest rate is determined by reference to the Prime Rate shall
be computed on the basis of the actual number of days elapsed in
the period during which interest accrues and a year of 365 or 366
days, as applicable. In computing interest on any Loan, the date
of the making of the Loan or the first day of an Interest Period,
as the case may be, shall be included and the date of payment or
the expiration date of an Interest Period, as the case may be,
shall be excluded; provided that if a Loan is repaid on the same
day on which it is made, one (1) day's interest shall be paid on
that Loan.
(f) Changes; Legal Restrictions. In the event that
after the date hereof (i) the adoption of or any change in any
law, treaty, rule, regulation, guideline or determination of a
Governmental Authority or any change in the interpretation or
application thereof by a Governmental Authority, or (ii)
compliance by any Lender with any request or directive (whether
or not having the force of law and whether or not the failure to
comply therewith would be unlawful) from any central bank or
other Governmental Authority or quasi-governmental authority
exercising jurisdiction, power or control over banks or financial
institutions generally, does impose, modify, or hold applicable,
in the reasonable determination of a Lender, any reserve, special
deposit, compulsory loan, FDIC insurance, capital allocation or
similar requirement against assets held by, or deposits or other
liabilities (including those pertaining to Letters of Credit) in
or for the account of, advances or loans by, Commitments made, or
other credit extended by, or any other acquisition of funds by, a
Lender or any Applicable Lending Office of such Lender (except
with respect to Base Rate Loans, so long as the Base Rate in
effect at the time is determined under clause (a) in the
definition of "Alternate Base Rate"), and the result of any of
the foregoing is to increase the cost to such Lender of making,
renewing or maintaining the Loans or its Commitment or issuing or
participating in any Letter of Credit or to reduce any amount
receivable hereunder or thereunder; then, in any such case,
Borrower shall upon written notice from and demand by that Lender
pay to such Lender, within thirty (30) Business Days of the date
specified in such notice and demand, such amount or amounts
(based upon a reasonable allocation thereof by such Lender to the
financing transactions contemplated by this Agreement and
affected by this Section 2.03(f)) as may be necessary to compen-
sate that Lender for any such additional cost incurred or reduced
amount received, but without interest. Such Lender shall deliver
to the Borrower a written statement of the costs or reductions
claimed and the basis therefor, and the reasonable allocation
made by such Lender of such costs and reductions, which statement
shall, in the absence of manifest error, be conclusive. If a
Lender subsequently recovers from another Person any amount
previously paid by Borrower pursuant to this Section 2.03(f),
such Lender shall, within thirty (30) days after receipt of such
refund and to the extent permitted by applicable law, pay to the
Borrower, without interest, the amount of any such recovery.
2.04. Fees.
(a) Commitment Fee. The Borrower shall pay to the
Administrative Agent, for the account of the Lenders in
accordance with their respective Pro Rata Shares except as set
forth in Section 12.06(b)(vi), a fee (the "Commitment Fee"),
accruing at the rate of 0.25% per annum on the average daily
amount by which the Revolving Credit Commitments exceed Revolving
Loan Usage for the period commencing on the Effective Date and
ending on the Revolving Credit Termination Date; provided,
however, if and for so long as the Applicable Eurodollar Rate
Margin is 0.50% per annum, then the Commitment Fee shall accrue
at the rate of 0.20% per annum, and if and for so long as the
Applicable Eurodollar Rate Margin is 0.45% per annum, then the
Commitment Fee shall accrue at the rate of 0.15% per annum. The
Commitment Fee is payable quarterly, in arrears, on the last
calendar day of each calendar quarter occurring after the
Effective Date, commencing September 30, 1995, and on the
Revolving Credit Termination Date.
(b) Letter of Credit Fees. Borrower shall pay to the
Administrative Agent, for the ratable account of the Lenders, a
fee for each Letter of Credit issued on behalf of Borrower, in
accordance with the provisions of Section 3.08(a).
(c) Payment of Fees. The fees described in this
Section 2.04 represent compensation for services rendered and to
be rendered separate and apart from the lending of money or the
provision of credit and do not constitute compensation for the
use, detention or forbearance of money, and the obligation of
Borrower to pay each fee described herein shall be in addition
to, and not in lieu of, the obligation of Borrower to pay inter-
est, other fees and expenses otherwise described in this Agree-
ment. Fees and expenses shall be payable when due in immediately
available funds. All fees and expenses shall be nonrefundable
when paid. All fees and expenses specified or referred to in
this Agreement or in the letter agreements dated September 28,
1994 between the Borrower and Chemical and between the Borrower
and Citicorp or the letter agreement dated June 5, 1995 among the
Borrower, Chemical and Citicorp Securities, Inc. (collectively,
the "Fee Letters") due to the Administrative Agent, the
Collateral Agent, any Issuing Bank or any Lender, including,
without limitation, amounts referred to in this Section 2.04 and
in Section 12.03, shall constitute Obligations and shall be
secured by all the Collateral. All fees described in this
Section 2.04 (other than Section 2.04(b)) which are expressed as
a per annum charge shall be calculated on the basis of the actual
number of days elapsed in a 365 or 366 day year, as applicable.
2.05. Mandatory Prepayments. (a) Borrower shall not
at any time cause or permit Revolving Loan Usage to exceed the
Revolving Credit Commitments. If at any time any such excess
exists, Borrower shall, without demand or notice, promptly pay to
the Administrative Agent such amount as may be necessary to
eliminate such excess, which prepayment shall be applied as set
forth in Section 2.06(b).
(b) (i) In the event and on each occasion after the
Effective Date that a Prepayment Event that is an event described
in clause (i) of the definition of the term "Prepayment Event"
and is not excluded from the definition of such term pursuant to
the proviso in such definition (an "Asset Sale Prepayment Event")
occurs, the Borrower shall, promptly upon (and in any event not
later than the third Business Day next following) receipt by or
on behalf of the Borrower or any Subsidiary thereof of the Net
Proceeds from such Prepayment Event, pay an amount equal to 100%
(or, if on the date of such Asset Sale Prepayment Event the
Applicable Eurodollar Rate Margin is 0.625% per annum or less,
fifty percent (50%)) of the Net Proceeds of such Asset Sale
Prepayment Event to the Administrative Agent, which prepayment
shall be applied as set forth in Section 2.06(b); provided,
however, that in any Fiscal Year such amount shall not be
required to be paid to the Administrative Agent for such
application to the extent that such amount would be applied to
the Term Loans pursuant to Section 2.06(b), until, and except to
the extent that, the aggregate, cumulative amount of such
payments during such Fiscal Year that, but for this proviso,
would be applied to the Term Loans, exceeds $5,000,000. The
amount of any prepayment required by this clause (i) shall be
determined without regard to any portion of such Net Proceeds
used to repurchase accounts receivable previously sold pursuant
to the Receivables Securitization.
(ii) In the event and on each occasion after the
Effective Date that a Prepayment Event described in clause (ii)
of the definition of the term Prepayment Event occurs, the
Borrower shall, promptly upon (and in any event not later than
the third Business Day next following) the occurrence of such
Prepayment Event, pay an amount equal to 25% of the Net Proceeds
of such Prepayment Event to the Administrative Agent, which
prepayment shall be applied as set forth in Section 2.06(b).
Notwithstanding the foregoing, no prepayment shall be required
pursuant to this clause (ii) if, at the time any such prepayment
would otherwise be required, either (1) the Applicable Eurodollar
Rate Margin is 0.625% per annum or less or (2) the outstanding
principal balance of the Term Loans is less than $60,000,000.
(iii) In the event that the calculation of the Net
Proceeds relating to any Prepayment Event included an estimate
for income taxes that was at least $500,000 greater than the
income taxes actually payable in respect thereof, the Borrower
shall, promptly after determining the amount of income taxes
actually payable, pay to the Administrative Agent the amount by
which such estimate exceeded the amount of taxes actually
payable, which prepayment shall be applied as set forth in
Section 2.06(b).
Any payment required by this Section 2.05 shall be payable
without penalty or premium, except as may be required by
Section 2.08(d) with respect to any Eurodollar Rate Loan prepaid
as a result thereof.
2.06. Payments.
(a) Manner and Time of Payment. Except as otherwise
expressly set forth herein, all payments of principal of and
interest on the Loans and other Agreement Obligations (including
without limitation, fees and expenses) payable to the
Administrative Agent, the Lenders or the Issuing Banks (or any of
them) shall be made without setoff, counterclaim, defense,
condition or reservation of rights, in Dollars and in immediately
available funds, delivered to the Administrative Agent (or, in
the case of Reimbursement Obligations, the applicable Issuing
Bank) not later than 12:00 noon (New York City time) on the date
and at the place due, to such account of the Administrative Agent
(or the Issuing Bank) as it may designate, for the account of the
Administrative Agent or the Lenders as the case may be; and funds
received by the Administrative Agent (or the applicable Issuing
Bank) after that time and date shall be deemed to have been paid
and received on the next succeeding Business Day. Payments
actually received by the Administrative Agent for the account of
the Administrative Agent or the Lenders or the Issuing Bank or
any of them, shall be paid to them promptly after receipt thereof
by the Administrative Agent. All payments of principal,
interest, Reimbursement Obligations and fees, and all
reimbursements for expenses pursuant to this Agreement and the
other Loan Documents, may at the option of the Administrative
Agent (but without any obligation to do so) and upon not less
than fifteen (15) days advance written notice to Borrower be paid
from the proceeds of Revolving Loans made to Borrower hereunder.
Borrower hereby irrevocably and unconditionally authorizes the
Lenders to make Revolving Loans to it under the Revolving Credit
Facility, which Revolving Loans shall be Base Rate Loans, for the
purpose of paying interest, Reimbursement Obligations and fees
due from it and for the purpose of reimbursing the Administrative
Agent, the Issuing Bank and each Lender for expenses due and
payable pursuant to this Agreement and the other Loan Documents
and agrees that all such Revolving Loans so made shall be deemed
to have been requested by it and at the option of the
Administrative Agent (but without any obligation to do so) may be
charged to Borrower's Loan Account; provided, however, that the
Administrative Agent has given Borrower fifteen (15) days advance
written notice of the making of such Revolving Loans.
Notwithstanding anything contained in this Agreement to the
contrary, if, at any time that any payment of Agreement
Obligations shall be required hereunder as a mandatory
prepayment, the aggregate amount of such payment to the
Administrative Agent for the accounts of the Lenders is less than
$250,000, so long as no Event of Default or Potential Event of
Default shall then exist, such payment may be deferred, at the
option of the Borrower exercised in writing, until the next date
on which a payment is required or made such that the combined
payment would exceed such minimum amount.
(b) Apportionment of Payments and Prepayments. (i)
Subject to the provisions of Section 12.06(b), all payments and
prepayments of principal and interest in respect of outstanding
Loans and all payments of fees and all other payments in respect
of any other Agreement Obligations, shall be allocated among such
of the Lenders and the Issuing Banks as are entitled thereto, in
proportion to their Pro Rata Shares, or otherwise as provided
herein. Subject to the provisions of Section 2.06(b)(ii), all
such payments and prepayments and any other amounts received by
the Administrative Agent from or for the benefit of the Borrower
shall be applied first, to pay principal of and interest on any
portion of the Loans which the Administrative Agent may have
advanced on behalf of any Lender for which the Administrative
Agent has not then been reimbursed by such Lender or the
Borrower, second, to pay principal of and interest on any advance
made under Section 12.18 for which the Administrative Agent or
the Collateral Agent has not then been paid by the Borrower or
reimbursed by the Lenders, third, to pay all other Agreement
Obligations (other than those referred to in clauses fourth
through ninth) then due and payable, fourth, to pay the principal
of the Revolving Loans to the extent required pursuant to Section
2.05(a), fifth, to pay interest due in respect of the Term Loans
and the Revolving Loans ratably, sixth, to pay principal of the
Term Loans then due and payable, seventh, to pay principal of the
Term Loans not then due and payable, eighth, to pay the principal
of the Revolving Loans, ninth, to pay principal on contingent
Letter of Credit Obligations by depositing such funds as cash
collateral pursuant to Section 10.02(b), and tenth, to the
ratable payment of all Obligations in respect of Eligible Hedging
Contracts. All principal payments and prepayments in respect of
Loans shall be applied first, to the Eurodollar Rate Loans
maturing on the date of such payment, second, to repay
outstanding Base Rate Loans, and then to repay outstanding
Eurodollar Rate Loans with those Eurodollar Rate Loans which have
earlier expiring Interest Periods being repaid prior to those
which have later expiring Interest Periods.
Notwithstanding the above provisions of this Section 2.06(b), all
of the mandatory prepayments required pursuant to Section 2.05(b)
shall be applied to the Term Loans until the Term Loans are paid
in full. All such prepayments shall be applied pro rata to the
remaining unpaid installments of the Term Loans; and thereafter
all mandatory prepayments shall be applied to the Revolving
Loans. Payments to be applied to the unpaid installments of the
Term Loans on a pro rata basis shall be applied to the fullest
extent possible such that the unpaid installments, after giving
effect to such application, are in each case a multiple of
$10,000; if any amount of such payment remains unapplied after
such application, such unapplied amount shall be applied to the
final installment of the Term Loans.
(ii) Subject to the provisions of Section 12.06(b),
after the occurrence of an Event of Default and while the same is
continuing, the Administrative Agent shall, unless otherwise
specified at the direction of the Requisite Lenders which
direction shall be consistent with the last sentence of this
clause (ii), apply all payments and prepayments in respect of any
Obligations and all proceeds of Collateral in the following
order:
(A) first, to pay interest on and then principal of
any portion of the Loans which the Administrative Agent may
have advanced on behalf of any Lender for which the
Administrative Agent has not then been reimbursed by such
Lender or the Borrower;
(B) second, to pay interest on and then principal of
any advance made under Section 12.18 for which the
Administrative Agent or the Collateral Agent, as applicable,
has not then been paid by the Borrower or reimbursed by the
Lenders;
(C) third, to pay Agreement Obligations in respect of
any fees, expense reimbursements or indemnities then due to
the Administrative Agent or the Collateral Agent, as
applicable;
(D) fourth, to pay Agreement Obligations in respect of
any fees, expenses, reimbursements or indemnities then due
to the Lenders and any of the Issuing Banks;
(E) fifth, to pay principal of the Revolving Loans to
the extent required pursuant to Section 2.05(a);
(F) sixth, to the ratable payment of interest due in
respect of the Term Loans, the Revolving Loans and the
Letter of Credit Obligations;
(G) seventh, to the ratable payment or prepayment of
principal outstanding on Loans and Reimbursement
Obligations;
(H) eighth, to pay principal on contingent Letter of
Credit Obligations by depositing such funds as cash
collateral pursuant to Section 10.02(b);
(I) ninth, to the ratable payment of all other
Agreement Obligations; and
(J) tenth, to the ratable payment of all Obligations
in respect of Eligible Hedging Contracts.
The order of priority set forth in this Section 2.06(b)(ii) and
the related provisions of this Agreement are set forth solely to
determine the rights and priorities of the Administrative Agent,
the Lenders and the other Holders of Secured Obligations as among
themselves. The order of priority set forth in clauses (A)
through (C) of this Section 2.06(b)(ii) may be changed only with
the prior written consent of the Administrative Agent and/or
Collateral Agent, as applicable.
(iii) Subject to Section 12.06(b), the Administrative
Agent shall promptly distribute to each Lender at its primary
address set forth on Schedule A or the signature page to the
Assignment and Acceptance by which it became a Lender, or at such
other address as a Lender or other Holder of Secured Obligations
may request in writing, such funds as such Person may be entitled
to receive in accordance with the provisions of this Section
2.06(b).
(c) Payments on Non-Business Days. Whenever any
payment to be made by Borrower hereunder shall be stated to be
due on a day which is not a Business Day, payments shall be made
on the next succeeding Business Day, unless such Business Day
occurs in the succeeding month in which case such payment shall
be made on the immediately preceding Business Day, and such
extension of time, if any, shall be included in the computation
of the payment of interest hereunder and of any of the fees
specified in Section 2.04, as the case may be.
(d) Administrative Agent's and Issuing Banks' Account-
ing. The Administrative Agent shall maintain such accounts,
books and records (a "Loan Account") in which it shall record
(i) the names and addresses of the Lenders and the respective
Commitments of, and principal amount of Loans owing to, each
Lender from time to time; (ii) other appropriate debits and
credits as provided in this Agreement, including, without
limitation, all interest and fees constituting Obligations; and
(iii) all payments of such Obligations made by Borrower or for
Borrower's account. Each Lender shall maintain in accordance
with its usual practices an account or accounts evidencing the
indebtedness of Borrower to such Lender resulting from each Loan
owing to such Lender from time to time, including the amount of
principal and interest payable and paid to such Lender from time
to time hereunder. Each of the Issuing Banks shall maintain a
separate Loan Account in which it shall record appropriate debits
and credits related to the Letter of Credit Obligations. Entries
in any Loan Account made in accordance with the Administrative
Agent's or any Lender's or each Issuing Bank's customary
accounting practices as in effect from time to time shall con-
stitute prima facie evidence of the matters reflected therein,
absent manifest error.
2.07. Interest Periods. By giving notice as set forth
in Section 2.02(a) or 2.03(c) with respect to a Borrowing of,
conversion into or continuation of Loans consisting of Eurodollar
Rate Loans, Borrower shall have the option, subject to the other
provisions of this Section 2.07 and Section 2.08, to specify an
interest period (each an "Interest Period") to apply to the
Borrowing described in such notice, which Interest Period shall
be either a one (1), two (2), three (3) or six (6) month period.
The determination of Interest Periods shall be subject to the
following provisions:
(a) In the case of immediately successive Interest
Periods, each successive Interest Period shall commence on the
day on which the next preceding Interest Period expires;
(b) If any Interest Period would otherwise expire on a
day which is not a Business Day, the Interest Period shall be
extended to expire on the next succeeding Business Day; provided
that if any such Interest Period would otherwise expire on a day
which is not a Business Day and no further Business Day occurs in
that calendar month, that Interest Period shall expire on the
immediately preceding Business Day;
(c) Borrower may not select an Interest Period for
Eurodollar Rate Loans constituting Revolving Loans which
terminates later than the Revolving Credit Termination Date;
(d) Without the prior written consent of the
Administrative Agent, there shall be no more than eight (8)
Interest Periods under this Agreement in effect at any one time.
(e) No Interest Period may be selected for any
Eurodollar Rate Loan that would end later than a scheduled
repayment date for the Term Loans determined pursuant to Section
2.01(c) and (d) if, after giving effect to such selection, the
aggregate outstanding amount of (i) the Eurodollar Rate Loans
with Interest Periods ending on or prior to such repayment date
and (ii) the Base Rate Loans would not be at least equal to the
principal amount of the Term Loans to be paid on such repayment
date.
2.08. Special Provisions Governing Eurodollar Rate
Loans. Notwithstanding other provisions of this Agreement, the
following provisions shall govern with respect to Eurodollar Rate
Loans as to the matters covered:
(a) Determination of Interest Rate. As soon as
practicable after 11:00 a.m. (New York City time) on the Interest
Rate Determination Date, the Administrative Agent shall determine
(which determination shall, absent manifest error, be presump-
tively correct) the interest rate which shall apply to the
Eurodollar Rate Loans for which an interest rate is then being
determined for the applicable Interest Period and shall promptly
give notice thereof (in writing or by telephone confirmed in
writing) to Borrower and to each Lender.
(b) Interest Rate Unascertainable, Inadequate or
Unfair. With respect to any Interest Period, if the
Administrative Agent is advised by any Reference Bank that
deposits in Dollars (in the applicable amount) are not being
offered to such Reference Bank in the London interbank Eurodollar
market for such Interest Period, if the Administrative Agent
shall have reasonably determined that the rates at which such
dollar deposits are being offered to the Reference Banks will not
adequately and fairly reflect the cost to any Lender of making or
maintaining its Eurodollar Rate Loans during such Interest Period
or if adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the defini-
tion of LIBO Rate, then the Administrative Agent shall forthwith
give notice thereof to Borrower and each Lender, whereupon until
the Administrative Agent has determined that the circumstances
giving rise to such suspension no longer exist, (a) the right of
Borrower to elect to have Loans bear interest based upon the LIBO
Rate shall be suspended, and (b) each outstanding Eurodollar Rate
Loan shall be converted into a Base Rate Loan on the last day of
the then current Interest Period therefor, notwithstanding any
prior election by the Borrower to the contrary.
(c) Illegality. (i) In the event that on any date
any Lender shall have determined (which determination shall, in
the absence of manifest error, be final and conclusive and
binding upon all parties) that the making or continuation of any
Eurodollar Rate Loan has become unlawful by compliance by that
Lender in good faith with any law, governmental rule, regulation
or order of any Governmental Authority (whether or not having the
force of law and whether or not failure to comply therewith would
be unlawful), then, and in any such event, such Lender shall
promptly give notice (by teletransmission or by telephone
promptly confirmed in writing) to Borrower and the Administrative
Agent of that determination and the reasons therefor. The
Administrative Agent shall promptly forward any such notice it
receives to the other Lenders.
(ii) Upon the giving of the notice referred to in
Section 2.08(c)(i), (A) Borrower's right to request of the
Lenders and the Lenders' obligation to make Eurodollar Rate Loans
with respect to the requested Borrowing shall be immediately
suspended, and the Lenders shall make Loans, with respect to such
requested Borrowing of Eurodollar Rate Loans as Base Rate Loans,
and (B) if Eurodollar Rate Loans are then outstanding, Borrower
shall immediately (or, if permitted by applicable law, no later
than the date permitted thereby, upon at least one (1) Business
Day's written notice to the Administrative Agent and the Lenders)
convert all such Loans of the same Borrowing into Base Rate Loans
without cost to the Borrower for any breakage fees or other
costs.
(iii) In the event that a Lender determines at any
time following its giving of a notice referred to in
Section 2.08(c)(i) that such Lender may lawfully make Eurodollar
Rate Loans, such Lender shall promptly give notice (by
teletransmission or by telephone promptly confirmed in writing)
to Borrower and the Administrative Agent of that determination,
whereupon Borrower's right to request of the Lenders and the
Lenders' obligation to make Eurodollar Rate Loans shall be
restored. The Administrative Agent shall promptly forward any
such notice it receives to the Lenders.
(d) Compensation. In addition to such amounts as are
required to be paid by Borrower pursuant to Sections 2.03(a),
2.03(d), 2.03(f), 2.04 and each other provision of this Agreement
requiring payment by Borrower, Borrower shall compensate each
Lender, upon demand, for all losses (excluding lost profits),
expenses and liabilities (including, without limitation, any loss
or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by such Lender to fund or
maintain such Lender's Eurodollar Rate Loans to the Borrower)
which such Lender may sustain (i) if for any reason a Borrowing
of, conversion into or continuation of Eurodollar Rate Loans does
not occur on a date specified therefor in a Notice of Borrowing
or a Notice of Conversion/Continuation (other than pursuant to
Section 2.08(c)(i)) or in a telephonic request for borrowing or
conversion or continuation or a successive Interest Period does
not commence after notice therefor is given pursuant to Section
2.03(c)(ii), (ii) if any principal payment of any Eurodollar Rate
Loan (including, without limitation, any prepayment pursuant to
Section 2.05 but excluding any prepayment of any Eurodollar Rate
Loan in connection with the replacement of any Lender under
clause (i) of Section 2.13) occurs for any reason on a date which
is not the last day of the applicable Interest Period, (iii) as a
consequence of an acceleration of the Obligations pursuant to
Section 10.02(a) or (iv) as a consequence of any other failure by
Borrower to repay Eurodollar Rate Loans when required by the
terms of this Agreement. Such Lender shall deliver to Borrower,
as a condition of Borrower's obligation to compensate such
Lender, a written statement as to such losses, expenses and
liabilities which statement, in the absence of manifest error,
shall be conclusive as to such amounts.
(e) Booking of Eurodollar Rate Loans. Any Lender may
make, carry or transfer Eurodollar Rate Loans at, to, or for the
account of, any of its branch offices, agencies or the office of
an Affiliate of that Lender; provided that no such Lender shall
be entitled to receive any greater amount under Section 2.03(f)
or Section 2.09 as a result of the transfer of any such Loan than
such Lender would be entitled to immediately prior thereto unless
(i) such transfer occurred at a time when circumstances giving
rise to the claim for such greater amount did not exist and were
not reasonably foreseeable by such Lender, or (ii) such claim
would have arisen even if such transfer had not occurred.
2.09. Taxes. (a) Any and all payments by Borrower
hereunder shall be made, in accordance with Section 2.06, free
and clear of and without deduction or withholding for or on
account of any and all present or future taxes, levies, imposts,
deductions, charges, or withholdings, and all liabilities with
respect thereto including those arising after the date hereof as
a result of the adoption of or any change in any law, treaty,
rule, regulation, guideline or determination of a Governmental
Authority or any change in the interpretation or application
thereof by a Governmental Authority but excluding, in the case of
each Lender, each Issuing Bank and the Administrative Agent, such
taxes (including income taxes, franchise taxes and branch profit
taxes) as are imposed on or measured by such Lender's, such
Issuing Bank's or the Administrative Agent's, as the case may be,
income by the United States of America or any Governmental
Authority of the jurisdiction under the laws of which such
Lender, Issuing Bank or Administrative Agent, as the case may be,
is organized, maintains an Applicable Lending Office or is deemed
to be engaged in trade or business (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings, and liabili-
ties which the Administrative Agent, any Issuing Bank or a Lender
determines to be applicable to this Agreement, the other Loan
Documents, the Commitments or the Loans or the Letters of Credit
being hereinafter referred to as "Taxes"). If Borrower shall be
required by law to deduct any Taxes from or in respect of any sum
payable hereunder or under the other Loan Documents to any
Lender, any Issuing Bank or the Administrative Agent, (i) the sum
payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable
to additional sums payable under this Section 2.09) such Lender,
such Issuing Bank or the Administrative Agent (as the case may
be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) Borrower shall make such
deductions, and (iii) Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in
accordance with applicable law. If a withholding tax of the
United States of America or any other Governmental Authority
shall be or become applicable (y) after the date of this Agree-
ment, to such payments by Borrower made to the Applicable Lending
Office or any other office that a Lender may claim as its
Applicable Lending Office, or (z) after such Lender's selection
and designation of any other Applicable Lending Office, to such
payments made to such other Applicable Lending Office, such
Lender shall use reasonable efforts to make, fund and maintain
its Loans through another Applicable Lending Office of such
Lender in another jurisdiction so as to reduce the Borrower's
liability hereunder, if the making, funding or maintenance of
such Loans through such other Applicable Lending Office of such
Lender does not, in the judgment of such Lender, otherwise
materially adversely affect such Loans, obligations under the
Commitments or such Lender.
(b) In addition, Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property
taxes, charges, or similar levies which arise from any payment
made hereunder or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement, the other Loan
Documents, the Commitments, the Loans or the Letters of Credit
(hereinafter referred to as "Other Taxes").
(c) Borrower will indemnify each Lender, each Issuing
Bank, the Administrative Agent and the Collateral Agent for the
full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any Governmental
Authority on amounts payable under this Section 2.09) paid by
such Lender, such Issuing Bank or the Administrative Agent or the
Collateral Agent (as the case may be) and any liability
(including penalties, interest, and expenses) arising therefrom
or with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted. This indemnification shall
be made within thirty (30) days after the date such Lender, such
Issuing Bank or the Administrative Agent or the Collateral Agent
(as the case may be) makes written demand therefor. A
certificate as to any additional amount payable to any Lender,
any Issuing Bank or the Administrative Agent or the Collateral
Agent under this Section 2.09 submitted to Borrower and the
Administrative Agent (if a Lender or an Issuing Bank is so
submitting) by such Lender, such Issuing Bank or the
Administrative Agent or the Collateral Agent shall show in
reasonable detail the amount payable and the calculations used to
determine such amount and shall, absent manifest error, be final,
conclusive and binding upon all parties hereto. With respect to
such deduction or withholding for or on account of any Taxes and
to confirm that all such Taxes have been paid to the appropriate
Governmental Authorities, Borrower shall promptly (and in any
event not later than thirty (30) days after receipt) furnish to
each Lender, each Issuing Bank and the Administrative Agent and
the Collateral Agent such certificates, receipts and other
documents as may be required (in the judgment of such Lender,
such Issuing Bank or the Administrative Agent or the Collateral
Agent) to establish any tax credit to which such Lender, such
Issuing Bank or the Administrative Agent or the Collateral Agent
may be entitled.
(d) Within thirty (30) days after the date of any
payment of Taxes or Other Taxes by Borrower, Borrower will
furnish to the Administrative Agent, at its address referred to
in Section 12.08, the original or a certified copy of a receipt
evidencing payment thereof.
(e) Without prejudice to the survival of any other
agreement of Borrower hereunder, the agreements and obligations
of Borrower contained in this Section 2.09 shall survive the
payment in full of principal and interest hereunder, expiration
or termination of the Letters of Credit and the termination of
this Agreement.
(f) Without limiting the obligations of Borrower under
this Section 2.09, each Lender that is not created or organized
under the laws of the United States of America or a political
subdivision thereof shall deliver to Borrower and the
Administrative Agent on or before the Effective Date, or, if
later, the date on which such Lender becomes a Lender pursuant to
Section 12.02 hereof, a true and accurate certificate executed in
duplicate by a duly authorized officer of such Lender, in a form
satisfactory to Borrower and the Administrative Agent, to the
effect that such Lender is capable under the provisions of an
applicable tax treaty concluded by the United States of America
(in which case the certificate shall be accompanied by two exe-
cuted copies of Form 1001 of the IRS) or under Section 1442 of
the IRC (in which case the certificate shall be accompanied by
two copies of Form 4224 of the IRS) of receiving payments of
interest hereunder without deduction or withholding of United
States federal income tax. Each such Lender further agrees to
deliver to Borrower and the Administrative Agent from time to
time a true and accurate certificate executed in duplicate by a
duly authorized officer of such Lender substantially in a form
satisfactory to Borrower and the Administrative Agent, before or
promptly upon the occurrence of any event requiring a change in
the most recent certificate previously delivered by it to
Borrower and the Administrative Agent pursuant to this Sec-
tion 2.09(f). Further, each Lender which delivers a certificate
accompanied by Form 1001 of the IRS covenants and agrees to
deliver to Borrower and the Administrative Agent within fifteen
(15) days prior to January 1, 1998, and every third (3rd)
anniversary of such date thereafter, on which this Agreement is
still in effect, another such certificate and two accurate and
complete original signed copies of Form 1001 (or any successor
form or forms required under the IRC or the applicable regula-
tions promulgated thereunder), and each Lender that delivers a
certificate accompanied by Form 4224 of the IRS covenants and
agrees to deliver to Borrower and the Administrative Agent within
fifteen (15) days prior to the beginning of each subsequent
taxable year of such Lender during which this Agreement is still
in effect, another such certificate and two accurate and complete
original signed copies of IRS Form 4224 (or any successor form or
forms required under the IRC or the applicable regulations
promulgated thereunder). Each such certificate shall certify as
to one of the following:
(i) that such Lender is capable of receiving
payments of interest hereunder without deduction or
withholding of United States of America federal income
tax;
(ii) that such Lender is not capable of receiving
payments of interest hereunder without deduction or
withholding of United States of America federal income
tax as specified therein but is capable of recovering
the full amount of any such deduction or withholding
from a source other than the Borrower and will not seek
any such recovery from Borrower; or
(iii) that, as a result of the adoption of or any
change in any law, treaty, rule, regulation, guideline
or determination of a Governmental Authority or any
change in the interpretation or application thereof by
a Governmental Authority after the date such Lender
became a party hereto, such Lender is not capable of
receiving payments of interest hereunder without
deduction or withholding of United States of America
federal income tax as specified therein and that it is
not capable of recovering the full amount of the same
from a source other than the Borrower.
Each such Lender shall promptly furnish to Borrower and
the Administrative Agent such additional documents as may be
reasonably required by Borrower or the Administrative Agent to
establish any exemption from or reduction of any Taxes or Other
Taxes required to be deducted or withheld and which may be
obtained without undue expense to such Lender.
2.10. Increased Capital. If any Lender determines
that (a) the applicability of any law, rule, regulation,
agreement or guideline adopted pursuant to or arising out of the
July 1988 report of the Basle Committee on Banking Regulations
and Supervisory Practices entitled "International Convergence of
Capital Measurement and Capital Standards"; (b) the introduction
of or any change in any law, order or regulation or in the inter-
pretation or administration of any law, order or regulation by
any Governmental Authority charged with the interpretation or
administration thereof after the date hereof or (c) compliance
with any guideline or request issued or made after the date
hereof from any central bank or other Governmental Authority
(whether or not having the force of law) has or would have the
effect of reducing the rate of return on the capital of such
Lender or any corporation controlling such Lender, as a
consequence of or with reference to this Agreement, such Lender's
Commitments or its making or maintaining Loans, or, in the case
of such Lender acting in its capacity as the Issuing Bank, the
Issuing Bank's issuance or maintenance of any Letter of Credit,
or any Lender's participation in any Letter of Credit, below the
rate which such Lender or such other corporation could have
achieved but for such compliance (taking into account the
policies of such Lender or corporation with regard to capital),
then Borrower shall from time to time, upon demand by such Lender
(with a copy of such demand to the Administrative Agent), pay to
such Lender additional amounts sufficient to compensate such
Lender or such corporation for such reduction, upon receipt by
Borrower (with a copy to the Administrative Agent) of a certifi-
cate as to such amounts, by such Lender, setting forth in
reasonable detail the basis for, and the calculations used by
such Lender in determining, any such amounts. Such certificate,
in the absence of manifest error, shall be conclusive and binding
for all purposes. Each Lender agrees promptly to notify Borrower
and the Administrative Agent of any circumstances that would
cause Borrower to pay additional amounts pursuant to this Section
2.10, provided that the failure to give such notice shall not
affect Borrower's obligation to pay such additional amounts
hereunder.
2.11. Use of Proceeds of the Loans. The proceeds of
the Loans shall be used for acquisitions, working capital and
other general corporate purposes of the Borrower and the
Borrower's Subsidiaries.
2.12. Authorized Officers of Borrower. Borrower shall
notify the Administrative Agent and each of the Issuing Banks in
writing of the names of the officers and employees authorized to
request Loans and Letters of Credit and to request a conversion
or continuation of any Loan and shall provide the Administrative
Agent and each of the Issuing Banks with a specimen signature of
each such officer or employee. The Administrative Agent and each
of the Issuing Banks shall be entitled to rely conclusively on
such officer's or employee's authority to request such Loan or
Letter of Credit or such Conversion or Continuation until the
Administrative Agent and the applicable Issuing Bank receives
written notice to the contrary. The Administrative Agent and the
Issuing Banks shall have no duty to verify the authenticity of
the signature appearing on any written Notice of Borrowing or
Notice of Conversion/Continuation and, with respect to an oral
request for such a Loan or Letter of Credit or such Conversion or
Continuation, the Administrative Agent and the Issuing Banks
shall have no duty to verify the identity of any person repre-
senting himself as one of the officers or employees authorized to
make such request on behalf of Borrower. Neither the
Administrative Agent nor any of the Issuing Banks nor any Lender
shall incur any liability to Borrower in acting upon any tele-
phonic notice referred to above which the Administrative Agent
believes to have been given by a duly authorized officer or other
person authorized to borrow on behalf of Borrower.
2.13. Replacement of Certain Lenders. In the event a
Lender ("Affected Lender") shall have: (i) failed to fund its
Pro Rata Share of any Borrowing requested by the Borrower which
such Lender is obligated to fund under the terms of this
Agreement and such failure has not been cured, (ii) failed to
issue a Letter of Credit requested by the Borrower which such
Lender is obligated to issue as an Issuing Bank under the terms
of this Agreement, (iii) has requested compensation from the
Borrower under Sections 2.03(f), 2.09 or 2.10 to recover
additional costs incurred by such Lender which are not being
incurred generally by the other Lenders, or (iv) delivered a
notice pursuant to Section 2.08(c)(i) claiming that such Lender
is unable to extend Eurodollar Rate Loans to the Borrower for
reasons not generally applicable to the other Lenders, then, in
any such case, the Borrower or the Administrative Agent may make
written demand on such Affected Lender (with a copy to the
Administrative Agent in the case of a demand by the Borrower and
a copy to the Borrower in the case of a demand by the
Administrative Agent) for the Affected Lender to assign, and such
Affected Lender shall assign pursuant to one or more duly
executed Assignment and Acceptances five (5) Business Days after
the date of such demand, to one or more financial institutions
which comply with the provisions of Section 12.02) (and, if
selected by the Borrower is reasonably acceptable to the
Administrative Agent) which the Borrower or the Administrative
Agent, as the case may be, shall have engaged for such purpose
("Replacement Lender"), all of such Affected Lender's rights and
obligations under this Agreement and the other Loan Documents
(including, without limitation, its Commitments and all Loans
owing to it all of its participation interests in existing
Letters of Credit, and its obligations to participate in
additional Letters of Credit hereunder) in accordance with
Section 12.02. The Administrative Agent is hereby authorized to
execute one or more Assignment and Acceptances as attorney-in-fact
for any Affected Lender failing to execute and deliver the
same within five (5) Business Days after the date of such demand.
Further, with respect to such assignment,
(a) in the event the Affected Lender is the Issuing
Bank, the Borrower shall have, with respect to each
outstanding Letter of Credit, provided the Affected Lender
with cash collateral, arranged for surrender of such Letters
of Credit, arranged for a back-to-back Letter of Credit or
made such other arrangements in respect of such Letter of
Credit as shall be mutually acceptable to the Borrower and
such Affected Lender; and
(b) the Affected Lender shall have concurrently
received, in cash, all amounts due and owing to the Affected
Lender hereunder or under any other Loan Document,
including, without limitation, the aggregate outstanding
principal amount of the Loans owed to such Lender, together
with accrued interest thereon through the date of such
assignment, amounts payable under Sections 2.03(f), 2.09 and
2.10, and compensation payable under Section 2.08(d) in the
event of any replacement of any Affected Lender under clause
(ii) or clause (iii) of this Section 2.13 through the date
of the replacement of any Affected Lender; provided, upon
such Affected Lender's replacement, such Affected Lender
shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 2.08, 2.09, 2.10, 12.03
and 12.04, as well as to any fees accrued for its account
hereunder and not yet paid.
Upon the replacement of any Affected Lender pursuant to this
Section 2.13, (x) each Letter of Credit issued by such Affected
Lender shall cease to be a Letter of Credit under this Agreement,
each such Affected Lender shall cease to have any participation
in, entitlement to, or other right to share in the security
interests and liens of the Collateral Agent and the Holders of
Secured Obligations in the Collateral and shall no longer be
subject to the participation provisions of Section 3.06, all of
which participations shall be deemed to have terminated and been
repurchased by the Issuing Bank hereunder and (y) the provisions
of Section 12.06(b) shall continue to apply with respect to
Borrowings which are then outstanding with respect to which the
Affected Lender failed to fund its Pro Rata Share and which
failure has not been cured.
ARTICLE III
Letters of Credit
3.01. Obligation to Issue. Subject to the terms and
conditions set forth in this Agreement, from time to time during
the period commencing on the Effective Date and ending on the
Business Day which is twenty (20) Business Days prior to the
Revolving Credit Termination Date, Borrower may request any of
the Issuing Banks, and upon such request such Issuing Bank hereby
agrees, to issue for the account of Borrower, or for the joint
and several account of Borrower and any of its Subsidiaries, one
or more Letters of Credit.
3.02. Types and Amounts. Notwithstanding the
provisions of Section 3.01, no Issuing Bank shall have any
obligation to issue any Letter of Credit at any time:
(a) if the aggregate maximum amount then avail-
able for drawing under Letters of Credit issued by such
Issuing Bank, after giving effect to the Letter of
Credit requested hereunder, shall exceed either such
Issuing Bank's Letter of Credit Commitment or any limit
imposed by law or regulation upon such Issuing Bank;
(b) if, after giving effect to such requested
Letter of Credit, (i) Revolving Loan Usage exceeds the
Revolving Credit Commitments or (ii) the aggregate
outstanding Letter of Credit Obligations would exceed
$25,000,000; and any letter of credit issued by an
Issuing Bank in excess of any such amounts shall not,
to the extent of the excess, constitute a Letter of
Credit hereunder and the deemed purchase of
participations pursuant to Section 3.06 shall not occur
with respect to such letter of credit; or
(c) which has an expiration date which is (i)
more than (1) one year after the date of issuance of
such Letter of Credit (provided that a Standby Letter
of Credit may provide for an annual renewal, subject to
Section 3.02(c)(ii) below, if such renewal is consented
to by such Issuing Bank and the conditions precedent to
the issuance of such Standby Letter of Credit are met
at the time of such renewal) or (ii) after three (3)
Business Days immediately preceding the Revolving
Credit Termination Date, and any letter of credit
issued by an Issuing Bank with an expiration date after
three (3) Business Days immediately preceding the
Revolving Credit Termination Date shall not constitute
a Letter of Credit hereunder and the deemed purchase of
participations pursuant to Section 3.06 shall not occur
with respect to such letter of credit.
3.03. Conditions. In addition to being subject to the
satisfaction of the conditions precedent contained in
Sections 4.01 and 4.02, the obligation of each Issuing Bank to
issue any Letter of Credit is subject to the satisfaction in full
of the following conditions:
(a) Borrower shall have delivered to the Issuing Bank,
at such times and in such manner as the Issuing Bank may
prescribe, a Letter of Credit Application and a Letter of Credit
Reimbursement Agreement and such other documents and materials as
may be required pursuant to the terms thereof, and the terms of
the proposed Letter of Credit shall be reasonably satisfactory to
the Issuing Bank and shall be consistent with the Issuing Bank's
ordinary practice with respect to terms of its letters of credit;
and
(b) as of the date of issuance, no order, judgment or
decree of any court, arbitrator or Governmental Authority shall
purport by its terms to enjoin or restrain the Issuing Bank from
issuing such Letter of Credit and no law, rule or regulation
applicable to the Issuing Bank, and no request or directive
(whether or not having the force of law and whether or not the
failure to comply therewith would be unlawful) from any Govern-
mental Authority with jurisdiction over the Issuing Bank shall
prohibit or request the Issuing Bank to refrain from the issuance
of letters of credit generally or the issuance of that Letter of
Credit.
3.04. Issuance of Letters of Credit.
(a) Borrower shall give the Issuing Bank written
notice (with a copy to the Administrative Agent) not later than
12:00 noon (New York City time) on the third (3rd) Business Day
immediately preceding the requested issuance of a Letter of
Credit under this Agreement, which notice as provided to the
Administrative Agent shall be accompanied by a Notice of
Borrowing as required pursuant to Section 4.02. Such notice
shall be irrevocable and shall specify (i) the stated amount of
the Letter of Credit requested, (ii) the effective date (which
day shall be a Business Day) of issuance of such requested Letter
of Credit, (iii) whether such Letter of Credit is a Commercial
Letter of Credit or a Standby Letter of Credit, (iv) the date on
which such requested Letter of Credit is to expire, which date
shall be a Business Day, (v) the Person for whose benefit the
requested Letter of Credit is to be issued, (vi) the amount of
Letter of Credit Obligations then outstanding and (vii) any other
terms to be included in such Letter of Credit. Prior to issuing
any Letter of Credit, the Issuing Bank shall request and the
Administrative Agent shall provide confirmation that the request
for such Letter of Credit complies with the provisions of Section
3.02(b). If the Administrative Agent notifies the Issuing Bank
that it is authorized to issue such Letter of Credit, and the
conditions described in Sections 3.02, 3.03, and 4.02 otherwise
have been satisfied, then the Issuing Bank shall issue such
Letter of Credit as requested. The Issuing Bank shall give the
Administrative Agent prompt notice of the issuance of any such
Letter of Credit.
(b) No Letter of Credit may be amended, extended,
renewed, modified or supplemented unless Borrower shall have
complied with the requirements of Section 3.04(a) to the same
extent as if such Letter of Credit, as so amended, extended,
renewed, modified or supplemented, were requested to be reissued
hereunder. No Issuing Bank may amend, extend, renew, modify or
supplement any Letter of Credit if the issuance of a new Letter
of Credit having the same terms as such Letter of Credit as so
amended, extended, renewed, modified or supplemented would be
prohibited by Section 3.02. Each Issuing Bank shall provide the
Administrative Agent with a copy of each amendment, extension,
renewal, modification or supplement to any Letter of Credit.
3.05. Reimbursement Obligations; Duties of the
Issuing Bank.
(a) Notwithstanding any provisions to the contrary in any
Letter of Credit Reimbursement Agreement or Letter of Credit
Application:
(i) Borrower shall reimburse each Issuing Bank,
as applicable (by paying the Administrative Agent for
the account of the Issuing Bank), for drawings under a
Letter of Credit issued by it no later than the earlier
of (a) the time specified in such Letter of Credit
Reimbursement Agreement or Letter of Credit
Application, and (b) one (1) Business Day after the
payment by such Issuing Bank; and
(ii) any Reimbursement Obligation with respect to
any Letter of Credit shall bear interest from the date
of the relevant drawing under the pertinent Letter of
Credit at the interest rate then applicable to Base
Rate Loans until the third (3rd) Business Day after
such date on which the Issuing Bank with respect to
such Letter of Credit gives notice of such drawing to
Borrower and thereafter at the Default Rate.
(b) No action taken or omitted to be taken by any Issuing
Bank under or in connection with any Letter of Credit shall put
such Issuing Bank under any resulting liability to any Lender
(except for its gross negligence or willful misconduct in
connection therewith, as determined by the final judgment of a
court of competent jurisdiction) or, subject to Sections 3.02 and
3.03, relieve that Lender of its obligations hereunder to such
Issuing Bank. In the event this Agreement and any Letter of
Credit Reimbursement Agreement or any Letter of Credit
Application are inconsistent, the terms of this Agreement shall
prevail. In determining whether to pay under any Letter of
Credit, the Issuing Bank shall have no obligation to the Lenders
other than to confirm that any documents required to be delivered
under such Letter of Credit appear to have been delivered and
that they appear on their face to comply with the requirements of
such Letter of Credit.
3.06. Participations.
(a) Immediately upon issuance by one of the Issuing
Banks of any Letter of Credit for the account of Borrower in
accordance with the provisions set forth in this Article III,
each Lender irrevocably and unconditionally agrees that it shall
be deemed to have purchased and received from such Issuing Bank,
without recourse or warranty, an undivided interest in the amount
of such Lender's Pro Rata Share in such Letter of Credit (other
than the fees earned with respect to such Letter of Credit
pursuant to Section 3.08(b)) and any security therefor or
guaranty pertaining thereto; provided, however, that a letter of
credit issued by an Issuing Bank shall not be deemed to be a
Letter of Credit for purposes of this Section 3.06(a) if the
Issuing Bank shall not have received the confirmation from the
Administrative Agent provided for in Section 3.04(a) or shall
have received written notice from the Administrative Agent or any
Lender on or before the Business Day immediately prior to the
date of the Issuing Bank's issuance of such letter of credit that
one or more conditions of this Article III are not satisfied and,
in the event the Issuing Bank receives such a notice, it shall
have no further obligation to issue any Letter of Credit until
such notice is subsequently withdrawn or it receives notice from
the Administrative Agent that such conditions have been waived in
writing by the Requisite Lenders or otherwise have been
satisfied.
(b) If one of the Issuing Banks makes any payment
under any Letter of Credit and Borrower does not repay such
amount to such Issuing Bank pursuant to Section 3.05(a), 3.07 or
3.09, such Issuing Bank shall promptly notify the Administrative
Agent of such failure, and the Administrative Agent shall, in
turn, promptly notify each Lender of such failure, and each
Lender shall promptly and unconditionally pay to the
Administrative Agent for the account of such Issuing Bank the
amount of such Lender's Pro Rata Share of such payment, in
Dollars and in immediately available funds, and the
Administrative Agent shall promptly pay such amount, and any
other amounts received by the Administrative Agent for such
Issuing Bank's account pursuant to this Section 3.06(b), to such
Issuing Bank. If the Administrative Agent so notifies any such
Lender prior to 11:00 a.m. (New York City time) on any Business
Day of such failure, such Lender shall make available to the
Administrative Agent for the account of such Issuing Bank its Pro
Rata Share of the amount of such payment on such Business Day in
Dollars and in immediately available funds, and otherwise on the
next succeeding Business Day. If and to the extent such Lender
shall not have so made its Pro Rata Share of the amount of such
payment available to the Administrative Agent for the account of
such Issuing Bank, such Lender agrees to pay to the
Administrative Agent for the account of such Issuing Bank
forthwith on demand such amount together with interest thereon,
for each day from the date such payment was first due until the
date such amount is paid to the Administrative Agent for the
account of such Issuing Bank, at the Federal Funds Effective Rate
(as such term is defined in the definition of Alternate Base
Rate) for three (3) Business Days and then at the Alternate Base
Rate. The failure of any Lender to make available to the
Administrative Agent for the account of any Issuing Bank its Pro
Rata Share of any such payment shall not relieve any other Lender
of its obligation hereunder to make available to the
Administrative Agent for the account of such Issuing Bank its Pro
Rata Share of any payment on the date such payment is to be made.
(c) Whenever one of the Issuing Banks receives a
payment on account of a Reimbursement Obligation, including any
interest thereon, as to which the Administrative Agent has
previously received payments from the Lenders for such account of
the Issuing Bank pursuant to this Section 3.06, it shall promptly
pay to the Administrative Agent and the Administrative Agent
shall promptly pay to each Lender which has funded its
participating interest therein, in Dollars, an amount equal to
such Lender's Pro Rata Share thereof. Each such payment shall be
made by the Issuing Bank or the Administrative Agent, as the case
may be, on the Business Day on which such Person receives the
funds paid to such Person pursuant to the preceding sentence, if
received prior to 11:00 a.m. (New York City time) on such
Business Day, and otherwise on the next succeeding Business Day
together with interest thereon at the Federal Funds Effective
Rate (as such term is defined in the definition of Alternate Base
Rate) unless the Issuing Bank certifies that it received such
amount later than it could be invested overnight.
(d) Promptly upon the request of any Lender, any
Issuing Bank shall furnish to such Lender copies of any
documentation with respect to the Letters of Credit as may
reasonably be requested by such Lender.
(e) The obligations of a Lender to make payments to
the Administrative Agent for the account of one of the Issuing
Banks with respect to a Letter of Credit issued on behalf of the
Borrower shall be irrevocable, shall not be subject to any
qualification or exception whatsoever, and shall be honored in
accordance with the terms and conditions of this Agreement under
all circumstances (subject to Section 3.02), including, without
limitation, (i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents; (ii) the existence
of any claim, set-off, defense or other right which Borrower may
have at any time against a beneficiary named in a Letter of
Credit or any transferee of any Letter of Credit (or any Person
for whom any such transferee may be acting), the Administrative
Agent, any Issuing Bank, any Lender, or any other Person, whether
in connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions
(including any underlying transactions between Borrower and the
beneficiary named in any Letter of Credit); (iii) any draft,
certificate or any other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or
inaccurate in any respect (in the absence of gross negligence or
willful misconduct in connection therewith, as determined by the
final judgment of a court of competent jurisdiction, on the part
of the Issuing Bank); (iv) the surrender or impairment of any
security for the performance or observance of any of the terms of
any of the Loan Documents; (v) any failure by the Administrative
Agent or any Issuing Bank to make any reports required pursuant
to Section 3.10; or (vi) the occurrence of any Event of Default
or Potential Event of Default.
3.07. Payment of Reimbursement Obligations.
(a) Borrower irrevocably and unconditionally agrees to
pay to each of the Issuing Banks the amount of all Reimbursement
Obligations, interest and other amounts payable to any such
Issuing Bank under or in connection with any Letter of Credit
issued on behalf of Borrower immediately when due, irrespective
of any and all events, including, without limitation, (i) any
lack of validity or enforceability of this Agreement or any of
the other Loan Documents; (ii) the existence of any claim, set-off,
defense or other right which Borrower may have at any time
against a beneficiary named in a Letter of Credit or any
transferee of any Letter of Credit (or any Person for whom any
such transferee may be acting), the Administrative Agent, any
Issuing Bank, any Lender, or any other Person, whether in connec-
tion with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any
underlying transactions between Borrower and the beneficiary
named in any Letter of Credit); (iii) any draft, certificate or
any other document presented under any Letter of Credit proving
to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any
respect (in the absence of gross negligence or willful misconduct
in connection therewith, as determined by the final judgment of a
court of competent jurisdiction, on the part of the Issuing
Bank); or (iv) the surrender or impairment of any security for
the performance or observance of any of the terms of any of the
Loan Documents.
(b) In the event any payment by Borrower received by
an Issuing Bank with respect to any Letter of Credit and distri-
buted by the Administrative Agent to the Lenders on account of
their participations is thereafter set aside, avoided or
recovered from the Issuing Bank in connection with any receiver-
ship, liquidation or bankruptcy proceeding or otherwise, each
Lender which received such distribution shall, upon demand by the
Issuing Bank, contribute such Lender's Pro Rata Share of the
amount set aside, avoided or recovered together with interest at
the rate required to be paid by the Issuing Bank upon the amount
required to be repaid by it.
3.08. Compensation for Letters of Credit.
(a) Lenders' Letter of Credit Fees. Borrower shall
pay, with respect to each Letter of Credit, a Letter of Credit
fee (computed based upon actual days elapsed in a year of 360
days) at a per annum rate equal to the Applicable Eurodollar Rate
Margin in effect from time to time, in the case of a Standby
Letter of Credit, or the Applicable Eurodollar Rate Margin in
effect from time to time minus 0.125% per annum, in the case of a
Commercial Letter of Credit, applied to the maximum amount
available to be drawn under such Letter of Credit. Such fee
shall be paid to the Administrative Agent, for the account of the
Lenders in proportion to their respective Pro Rata Shares, in
arrears, on a calendar quarterly basis, on the last calendar day
of each March, June, September and December occurring after the
Effective Date and on the Revolving Credit Termination Date.
Each of the Issuing Banks shall provide the Borrower and the
Administrative Agent on or before the last Business Day of each
March, June, September and December occurring after the Effective
Date a statement calculating the Letter of Credit fees payable
under this Section 3.08(a) for the quarter then ending.
(b) Issuing Bank Fees. In addition to the fees under
clause (a) above, Borrower shall pay to each of the Issuing
Banks, (i) with respect to each Commercial Letter of Credit
payable at such time as is agreed to between the Borrower and the
applicable Issuing Bank, the customary charges of such Issuing
Bank with respect thereto for commercial letters of credit of
similar type, (ii) with respect to each Standby Letter of Credit,
such fronting fee as shall have been agreed to (both with respect
to amount and timing) between such Issuing Bank and the Borrower
and (iii) with respect to all Letters of Credit, on demand, each
Issuing Bank's customary administration fees charged in
connection with its issuance, administration, transfer or
amendment of or drawing under any Letter of Credit. Such fees
shall be paid directly to and shall be solely for the account of
the Issuing Banks.
3.09. Indemnification; Exoneration. (a) In addition
to amounts payable as elsewhere provided in this Article III,
Borrower hereby agrees to protect, indemnify, pay and save
harmless the Administrative Agent, the Issuing Banks and each
Lender from and against any and all Liabilities and Costs which
the Administrative Agent, the Issuing Banks or any Lender may
incur or be subject to as a consequence, direct or indirect, of
(i) the issuance of any Letter of Credit other than, in the case
of any Issuing Bank, as a result of its gross negligence or
willful misconduct, as determined by the final judgment of a
court of competent jurisdiction or (ii) the failure of such
Issuing Bank to honor a drawing under such Letter of Credit as a
result of any act or omission, whether rightful or wrongful, of
any present or future de jure or de facto Governmental Authority
(all such acts or omissions herein called "Governmental Acts").
(b) As among Borrower, the Lenders, the Issuing Banks
and the Administrative Agent, Borrower assumes all risks of the
acts and omissions of, or misuse of such Letter of Credit by, the
beneficiary of any Letter of Credit. In furtherance and not in
limitation of the foregoing, subject to the provisions of the
Letter of Credit Applications and Letter of Credit Reimbursement
Agreements, the Issuing Banks, the Administrative Agent and the
Lenders shall not be responsible (in the absence of gross
negligence or willful misconduct in connection therewith, as
determined by the final judgment of a court of competent
jurisdiction): (i) for the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted
by any party in connection with the application for and issuance
of the Letters of Credit, even if it should in fact prove to be
in any or all respects invalid, insufficient, inaccurate, fraudu-
lent or forged; (ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or
assign a Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) for failure of the
beneficiary of a Letter of Credit to comply duly with conditions
required in order to draw upon such Letter of Credit; (iv) for
errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex, or
other similar form of teletransmission or otherwise; (v) for
errors in interpretation of technical terms; (vi) for any loss or
delay in the transmission or otherwise of any document required
in order to make a drawing under any Letter of Credit or of the
proceeds thereof; (vii) for the misapplication by the beneficiary
of a Letter of Credit of the proceeds of any drawing under such
Letter of Credit; and (viii) for any consequences arising from
causes beyond the control of the Administrative Agent, the
Issuing Banks and the Lenders including, without limitation, any
Governmental Acts. None of the above shall affect, impair, or
prevent the vesting of any of the Issuing Banks' rights or powers
under this Section 3.09.
(c) In furtherance and extension and not in limitation
of the specific provisions hereinabove set forth, any action
taken or omitted by any Issuing Bank under or in connection with
Letters of Credit issued on behalf of the Borrower or any related
certificates shall not, in the absence of gross negligence or
willful misconduct, as determined by the final judgment of a
court of competent jurisdiction, put any Issuing Bank, the
Administrative Agent or any Lender under any resulting liability
to Borrower or relieve Borrower of any of its obligations
hereunder to any such Person.
(d) Without prejudice to the survival of any other
agreement of Borrower hereunder, the agreements and obligations
of Borrower contained in this Section 3.09 shall survive the
payment in full of principal and interest hereunder, the
termination of the Letters of Credit and the termination of this
Agreement.
3.10. Reporting By Issuing Banks. On or before the
thirtieth (30th) day following the end of each calendar month
ending after the Effective Date, each of the Issuing Banks shall
provide the Administrative Agent and the Administrative Agent
shall provide each Lender with a written report describing, as of
the end of such month, the then aggregate outstanding face amount
of each Letter of Credit, whether such Letter of Credit is a
Standby Letter of Credit or Commercial Letter of Credit, the
beneficiary of such Letter of Credit, and any other additional
information with respect thereto which the Administrative Agent
or any Lender reasonably requests. Together with each monthly
report, each of the Issuing Banks shall provide the
Administrative Agent and the Administrative Agent shall provide
each Lender with a copy of each Letter of Credit issued during
the immediately preceding month and each Letter of Credit
Application and/or Letter of Credit Reimbursement Agreement
executed in connection therewith.
ARTICLE IV
Conditions to Loans and Letters of Credit
4.01. Conditions Precedent to the Effective Date.
This Agreement shall become effective on the date (the "Effective
Date") when all of the following conditions precedent shall have
been satisfied:
(a) Documents. The Administrative Agent and the
Collateral Agent shall have received on or before the Effective
Date (i) this Agreement, the Notes, the other Transaction
Documents and all other agreements, documents and instruments
described in the List of Closing Documents attached hereto as
Exhibit 6 and made a part hereof, each duly executed where
appropriate and in form and substance satisfactory to the
Administrative Agent and the Collateral Agent and (ii) such
additional documentation as the Administrative Agent or the
Collateral Agent may reasonably request.
(b) Perfection of Liens. The Collateral Agent shall
have received (i) evidence that all additional and/or amended
financing statements relating to the Collateral have been filed
and the Collateral Agent shall be satisfied that arrangements for
the filing and recording of all modifications to the Mortgages
have been made, (ii) title endorsements (in form and substance
acceptable to the Collateral Agent), (iii) certificates
representing capital stock constituting Collateral (together with
duly executed stock powers) and (iv) such other evidence (includ-
ing, without limitation, legal opinions from counsel to the
Borrower), as the Administrative Agent or the Collateral Agent
may request, confirming that the Collateral Agent's security
interests in the Collateral for the benefit of the Holders of
Secured Obligations have been properly perfected and constitute
first and prior security interests subject only to Permitted
Existing Liens and Customary Permitted Liens. In addition, all
title charges, recording fees and filing taxes shall have been
paid or adequate provisions for the payment of such charges, fees
and taxes shall have been made.
(c) No Legal Impediments. No law, regulation, order,
judgment or decree of any Governmental Authority shall, and the
Administrative Agent shall not have received any notice that
litigation is pending or threatened which is likely to (i)
enjoin, prohibit or restrain the making of the Loans or the
issuance of Letters of Credit on or after the Effective Date or
(ii) impose or result in the imposition of a Material Adverse
Effect.
(d) No Change in Condition. No change in the
business, assets, management, operations, financial condition or
prospects of the Borrower or the Consolidated Borrower Group
taken as a whole shall have occurred since December 31, 1994,
which change, in the judgment of the Lenders, will have or is
reasonably likely to have a Material Adverse Effect.
(e) No Default. No Event of Default or Potential
Event of Default shall have occurred and be continuing or would
result from the making of the Loans or the issuance of Letters of
Credit.
(f) Representations and Warranties. All of the
representations and warranties contained in Section 5.01 and in
any of the other Loan Documents shall be true and correct in all
material respects on and as of the Effective Date.
(g) Fees and Expenses Paid. There shall have been
paid to the Administrative Agent, for the accounts of the Lenders
and the Administrative Agent, as applicable, and to the
Collateral Agent for its own account, all fees due and payable on
or before the Effective Date (including, without limitation, all
fees described in the Fee Letters), and all expenses due and
payable on or before the Effective Date.
(h) Legal Matters. All legal and regulatory matters
shall be reasonably satisfactory to the Administrative Agent and
the Collateral Agent.
4.02. Conditions Precedent to all Loans and Letters of
Credit. The obligation of each Lender to make any Loan requested
to be made by it or to convert or continue any Loan requested to
be converted or continued on any date, and of the Issuing Banks
to issue any Letter of Credit on any date, is subject to the
following conditions precedent as of such date:
(a) Notice of Borrowing. The Administrative Agent
shall have received in accordance with the provisions of
Section 2.02(a), with respect to any Revolving Loan, or Section
3.04(a), with respect to any Letter of Credit, an original and
duly executed Notice of Borrowing or, in accordance with the
provisions of Section 2.03, with respect to
conversion/continuation of any Loan, an original and duly
executed Notice of Conversion/Continuation.
(b) Additional Matters. As of the Funding Date for
any Loan or the date of issuance of any Letter of Credit or as of
the proposed date for continuation/conversion, as applicable:
(i) Representations and Warranties. All of the
representations and warranties of the Borrower
contained in or repeated pursuant to Section 5.02 and
of the Borrower or its Subsidiaries contained in any
other Loan Document (other than representations and
warranties which expressly speak only as of a different
date) shall be true and complete in all respects on and
as of such Funding Date as though made on and as of
such date both before and after taking into account the
requested Loans to be made and Letters of Credit to be
issued.
(ii) No Default. No Event of Default or
Potential Event of Default shall have occurred and be
continuing or would result from the making of the
requested Loan or the issuance of the requested Letter
of Credit.
(iii) No Injunction. No law or regulation shall
have been adopted, no order, judgment or decree of any
Governmental Authority shall have been issued, and no
litigation shall be pending or threatened (other than
as a result of any condition described in Section
2.08(d), 2.09 or 2.10), which in the reasonable
judgment of the Requisite Lenders, would enjoin,
prohibit or restrain any Lender from making the
requested Loan or any Issuing Bank from issuing the
requested Letter of Credit or as a result of making any
such Loan or issuing such Letter of Credit impose or
result in the imposition of any material adverse
condition upon any Lender or any Issuing Bank.
(iv) No Material Adverse Change. No event shall
have occurred after December 31, 1994 which, in the
reasonable judgment of the Requisite Lenders, has had
or is reasonably likely to have a Material Adverse
Effect.
(v) No Forfeiture Proceedings. Neither the Borrower
nor any of its Subsidiaries shall have been named as a
defendant in a criminal indictment under the Racketeering
Influenced and Corrupt Organizations Act or any similar
federal or state statute which provides for forfeiture of
assets as a potential criminal penalty unless such
proceeding shall not be adverse to the interests of the
Lenders.
The request by Borrower for any Loan made, or to be
made, or any Letter of Credit issued, or to be issued, on any
Funding Date or delivery of any Notice of Conversion/Continuation
shall constitute a representation and warranty by Borrower as of
such Funding Date or as of such conversion/continuation date, as
applicable, that all the conditions contained in this
Section 4.02 have been satisfied or waived in writing pursuant to
Section 12.07.
ARTICLE V
Representations and Warranties
5.01. Representations and Warranties on the Effective
Date. To induce each Lender, the Issuing Banks and the
Administrative Agent to enter into this Agreement and to make the
Loans and to issue or participate in the Letters of Credit, the
Borrower hereby represents and warrants to each Lender, the
Issuing Banks, the Administrative Agent and the Collateral Agent
that the following statements are true and correct:
(a) Organization; Corporate Powers. The Borrower and
each of its Subsidiaries (i) is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its organization, (ii) is duly qualified to do
business as a foreign corporation and is in good standing under
the laws of each jurisdiction in which the nature of its business
requires it to be so qualified, except those jurisdictions where
the failure to be in good standing or to so qualify has not had
and will not have a Material Adverse Effect, and (iii) has all
requisite corporate power and authority to own, operate and
encumber its property and assets and to conduct its business as
presently conducted and as proposed to be conducted in connection
with and following the consummation of the transactions
contemplated by the Transaction Documents.
(b) Authority. (i) The Borrower and each of its
Subsidiaries has the requisite corporate power and authority to
execute, deliver and perform its obligations under each of the
Transaction Documents executed by it, or to be executed by it.
(ii) The execution, delivery and performance (or
filing or recording, as the case may be) of each of the Trans-
action Documents to which it is party and the consummation of the
transactions contemplated thereby have been duly authorized by
all necessary corporate action on the part of the Borrower and
each of its Subsidiaries and no other corporate proceedings on
the part of any such Person are necessary to consummate such
transactions.
(iii) Each of the Transaction Documents to which
it is a party has been duly executed and delivered (or filed or
recorded, as the case may be) by the Borrower and each of its
Subsidiaries and constitutes its legal, valid and binding obliga-
tion, enforceable against it in accordance with its terms (except
as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by general
equitable principles), is in full force and effect (unless
terminated in accordance with the terms thereof) and no term or
condition thereof has been amended, modified or waived from the
terms and conditions contained therein without the prior written
consent of the Administrative Agent and the Requisite Lenders or,
where so required, the Supermajority Lenders or all of the
Lenders, and the Borrower and each of its Subsidiaries have
performed and complied in all material respects with all the
material terms, provisions, agreements and conditions set forth
therein and required to be performed or complied with by such
parties on or before the effective date thereof, and no default
by any such party exists thereunder.
(c) Subsidiaries. Neither the Borrower nor any of its
Subsidiaries has any Subsidiaries other than those described in
Schedule 5.01(c) and those, if any, which are permitted by
Section 8.03 to be created after the Effective Date.
(d) No Conflict. The execution, delivery and perfor-
mance of each Transaction Document to which it is a party by the
Borrower and each of its Subsidiaries and each of the trans-
actions contemplated thereby do not and will not (i) conflict
with any contractual obligation of any such Person, any liability
resulting from which would have or be reasonably expected to have
a Material Adverse Effect, or (ii) conflict with or violate such
Person's Certificate or Articles of Incorporation or By-Laws or
(iii) except as set forth on Schedule 5.01(d), conflict with,
result in a breach of or constitute (with or without notice or
lapse of time or both) a default under any Requirement of Law or
contractual obligation of any such Person, any liability
resulting from which would have or be reasonably expected to have
a Material Adverse Effect, or under the Receivables Agreement or
the Indenture dated July 1, 1993, between Eagle Industries, Inc.
and Harris Trust and Savings Bank pursuant to which the Senior
Deferred Coupon Notes due 2003 were issued, or (iv) result in or
require the creation or imposition of any Lien whatsoever upon
any of the properties or assets of any such Person (other than
Liens in favor of the Collateral Agent, for the benefit of itself
and the Holders of Secured Obligations, arising pursuant to the
Loan Documents or Liens permitted pursuant to Section 8.02(b)),
or (v) require any approval of stockholders of any such Person,
unless such approval has been obtained.
(e) Governmental Consents. The execution, delivery
and performance of each Transaction Document to which it is a
party, by the Borrower and each of its Subsidiaries and the
transactions contemplated thereby do not and will not require any
registration with, consent or approval of, or notice to, or other
action with or by, any Governmental Authority, except filings,
consents or notices which have been made, obtained or given.
(f) Governmental Regulation. Neither the Borrower nor
any of its Subsidiaries is subject to regulation under the Public
Utility Holdings Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, the Investment Company Act of 1940 or
any other statute or regulation of any Governmental Authority
such that its ability to incur indebtedness is limited or its
ability to consummate the transactions contemplated hereby or by
the other Transaction Documents is materially impaired.
(g) Financial Position. (i) As of the Effective
Date, all quarterly and annual financial statements of the
Borrower or of the Consolidated Borrower Group delivered to the
Administrative Agent were prepared in conformity with GAAP
(except as otherwise noted therein) and fairly present the
financial position of the Borrower or the consolidated financial
position of the Consolidated Borrower Group, as the case may be,
as at the respective dates thereof and the results of operations
and changes in cash flows for each of the periods covered
thereby, subject, in the case of any unaudited interim financial
statements, to changes resulting from audit and normal year-end
adjustments.
(ii) All quarterly and annual financial statements of
the Borrower or of the Consolidated Borrower Group delivered to
the Administrative Agent after the Effective Date will have been
prepared in conformity with GAAP (except as otherwise noted
therein) and will fairly present the financial position of the
Borrower or the consolidated financial position of the
Consolidated Borrower Group as at the respective dates thereof
and the results of operations and changes in cash flows for each
of the periods covered thereby, subject, in the case of any
unaudited interim financial statements, to changes resulting from
audit and normal year-end adjustments. Except as contemplated or
disclosed in the Transaction Documents, neither the Borrower nor
any of its Subsidiaries has any material obligations, material
contingent liabilities requiring disclosure under GAAP or
Agreement Accounting Principles, as the case may be or material
liabilities for taxes, long term leases or material or unusual
forward or long term commitments which are not reflected in such
financial statements and the notes thereto.
(h) Financial Projections. As of the Effective Date,
the financial projections (and the assumptions made in preparing
such projections) concerning the Consolidated Borrower Group set
forth in the Amendment Summary dated June 1995 delivered to the
Lenders reflected the Borrower's best estimate of the
Consolidated Borrower Group's future performance based upon the
information available to the Borrower at the time, and the
assumptions and methodology used in the projections were, in
Borrower's judgment, reasonable.
(i) Capitalization.
(i) As of June 23, 1995, Schedule 5.01(i) sets forth
the number of shares and the relevant percentages of capital
stock held by each shareholder of the Borrower that holds in
excess of 5% of the Capital Stock of the Borrower of which the
Borrower has knowledge.
(ii) There are outstanding no shares of any class of
capital stock (or any securities, instruments, warrants, option
or purchase rights, conversion or exchange rights, calls,
commitments or claims of any character convertible into or exer-
cisable for capital stock) of:
(A) the Borrower other than capital stock described on
Schedule 5.01(i) or pursuant to the Borrower's 1994 Stock
Option and Restricted Share Plan; or
(B) any Subsidiary of the Borrower other than the
capital stock held directly or indirectly by the Borrower
and pledged to the Collateral Agent for the benefit of
itself and Holders of Secured Obligations pursuant to the
Pledge Agreements.
The outstanding capital stock of the Borrower and of each of its
Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable.
(j) Litigation; Adverse Effects. (i) Except as set
forth in Schedule 5.01(j), there is no action, suit, proceeding,
investigation of any Governmental Authority or arbitration, at
law or in equity, or before or by any Governmental Authority,
pending, or, to the best knowledge of the Borrower, threatened
against the Borrower or any of its Subsidiaries or any Property
of any of them, which if adversely determined would be reasonably
expected to have a Material Adverse Effect.
(ii) Neither the Borrower nor any of its
Subsidiaries is (A) in violation of any applicable law which
violation has or might reasonably be expected to have a Material
Adverse Effect, or (B) subject to or in default with respect to
any final judgment, writ, injunction, decree, order, rule or
regulation of any court or Governmental Authority which has or is
reasonably likely to have a Material Adverse Effect. Except as
set forth in Schedule 5.01(j), there is no action, suit, pro-
ceeding or investigation pending or, to the knowledge of the
Borrower, threatened in writing against or affecting the Borrower
or any of its Subsidiaries (1) which challenges the validity or
the enforceability of any of the Transaction Documents or (2)
which will or would reasonably be expected to result in any
liability in the aggregate in the amount of greater than
$2,000,000 with respect to any such Person (in each case net of
applicable third-party insurance coverage other than
retro-premium insurance that determines retro-premiums solely on
the basis of losses of the insured person) or (3) which involves
a claim under the Racketeering Influenced and Corrupt
Organizations Act or any similar federal or state statute where
such Person is a defendant in a criminal indictment that provides
for the forfeiture of assets to any Governmental Authority as a
potential criminal penalty.
(k) No Material Adverse Change. There has occurred no
event since December 31, 1994 which has or is reasonably likely
to have a Material Adverse Effect.
(l) Payment of Taxes. All tax returns and reports of
the Borrower and each of its Subsidiaries required to be filed
(including extensions) have been timely filed, and all taxes,
assessments, fees and other charges of Governmental Authorities
thereupon and upon their respective properties, assets, income
and franchises which are shown on such returns as being due and
payable have been paid when due and payable, except (i) taxes
being contested in good faith by appropriate proceedings and that
are reserved against in accordance with Agreement Accounting
Principles, (ii) taxes which are not yet delinquent, (iii) taxes
which are payable in installments so long as paid before any
penalty accrues with respect thereto and (iv) other taxes,
assessments, fees and other charges of Governmental Authorities
which do not exceed $500,000. On the Effective Date, except as
set forth in clause (iv) above or on Schedule 5.01(l), and after
the Effective Date, except as set forth in clauses (i) through
(iv) above or on Schedule 5.01(l), the Borrower has no knowledge
of any proposed tax assessment against the Borrower or any of its
Subsidiaries. All tax assessments referred to in
Schedule 5.01(l) are being contested in good faith by the
Borrower or such Subsidiary or a settlement with respect to any
such assessment is being negotiated in good faith by such Person
and appropriate reserves have been established in accordance with
GAAP or Agreement Accounting Principles, as applicable. As of
the Effective Date, all payments due and payable by any party to
the Tax Sharing Agreement have been paid.
(m) Material Adverse Agreements. Neither the Borrower
nor any of its Subsidiaries is a party to or subject to any
Contractual Obligation or other restriction contained in its
charter or By-laws which has or is reasonably expected to have a
Material Adverse Effect after giving effect to the consummation
of the transactions contemplated in the Transaction Documents or
otherwise.
(n) Performance. Neither the Borrower nor any of its
Subsidiaries is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions
contained in any Contractual Obligation applicable to it under
any agreement or instrument the absence or termination of which
Contractual Obligations would be reasonably likely to have a
Material Adverse Effect, and no condition exists which, with the
giving of notice or the lapse of time, or both, would constitute
a default under such Contractual Obligation, except where the
consequences, direct or indirect, of such default or defaults, if
any, would not have or are not reasonably expected to have a
Material Adverse Effect.
(o) Securities Activities. Neither the Borrower nor
any of its Subsidiaries is engaged in the business of extending
credit for the purpose of purchasing or carrying any Margin
Stock.
(p) Disclosure. Subject to changes in facts or
conditions which are required or permitted under this Agreement,
the representations and warranties of the Borrower and any of its
Subsidiaries contained in the Transaction Documents, and all
certificates and other documents delivered to the Administrative
Agent in connection therewith, taken as a whole do not contain
any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained
herein or therein, in light of the circumstances under which they
were made, not materially misleading.
(q) Requirements of Law. The Borrower and each of its
Subsidiaries is in compliance with all Requirements of Law
(including, without limitation, the Securities Act and the
Securities Exchange Act, the applicable rules and regulations
thereunder, and state securities laws) applicable to it and its
business, where the failure to so comply would have or would be
reasonably expected to have a Material Adverse Effect.
(r) Patents, Trademarks, Permits, Etc. The Borrower
and each of its Subsidiaries owns, is licensed or otherwise has
the lawful right to use, or has all permits and other approvals
of Governmental Authorities, patents, trademarks, service marks,
trade names, copyrights, technology, know-how and processes used
in or necessary for the conduct of its business as currently
conducted which are material to the financial condition,
business, operations, assets and prospects of the Borrower, any
such Subsidiary or the Consolidated Borrower Group. The use of
such permits and other approvals of Governmental Authorities,
patents, trademarks, service marks, trade names, copyrights,
technology, know-how and processes by the Borrower or any of its
Subsidiaries does not infringe on the rights of any Person,
subject to such claims and infringements the existence of which
do not have or are not reasonably expected to have a Material
Adverse Effect. The consummation of the transactions
contemplated by the Transaction Documents will not impair the
ownership of or rights under (or the license or other right to
use, as the case may be) any permits and governmental approvals,
patents, trademarks, service marks, trade names, copyrights,
technology, know-how or processes by the Borrower or any of its
Subsidiaries in any manner which has or is reasonably likely to
have a Material Adverse Effect.
(s) Environmental Matters. Except where the
circumstances causing the failure of any of the representations
and warranties set forth in this subsection (s) to be true and
correct are not reasonably likely to result in a Material Adverse
Effect or except as disclosed in the documents identified in
Schedule 5.01(s), (i) the operations of the Borrower and its
Subsidiaries comply in all respects with all applicable
environmental, health and safety Requirements of Law; (ii) the
Borrower and each of its Subsidiaries has obtained all
environmental, health and safety Permits necessary for its
operations, all such Permits are in good standing and the Bor-
rower and each of its Subsidiaries is in compliance with all
terms and conditions of such Permits; (iii) (A) none of the
Borrower or any of its Subsidiaries, any of their presently owned
Property or present operations and (B) none of the Borrower's or
any of its Subsidiaries' previously owned Property or past
operations is subject to any order from or agreement with any
Governmental Authority or private party or any judicial or
administrative proceeding or investigations respecting any
environmental, health or safety Requirements of Law or is the
subject of any investigation by any Governmental Authority
evaluating the need for Remedial Action to respond to a material
Release or threatened Release of a Contaminant into the
environment, or is subject to any Remedial Action or other
Liabilities and Costs arising from the Release or threatened
Release of a Contaminant into the environment; (iv) none of the
operations of the Borrower or any of its Subsidiaries is subject
to any judicial or administrative proceeding alleging a violation
of any environmental, health or safety Requirement of Law; (v)
neither the Borrower nor any of its Subsidiaries has sent or
directly arranged for the transport of any waste or Contaminant
to any site listed or proposed for listing on the federal
national priorities list or any state equivalent list of sites
designated for Remedial Action; (vi) no past or present property
of the Borrower or any of its Subsidiaries is now or has ever
been a storage, treatment or disposal facility for hazardous
waste, as those terms are defined under 40 CFR Part 261 or any
state equivalent; (vii) neither the Borrower nor any of its
Subsidiaries has filed any notice under any applicable Require-
ment of Law reporting a Release of a Contaminant into the
environment; (viii) there is not now, nor has there ever been, on
or in the Property of the Borrower or any of its Subsidiaries:
(A) any underground storage tanks or surface impoundments or
(B) any polychlorinated biphenyls used in hydraulic oils,
electrical transformers or other equipment; (ix) neither the
Borrower nor any of its Subsidiaries has received any notice or
claim to the effect that it is or might be liable to any Person
as a result of the Release or threatened Release of a Contaminant
into the environment, or as a result of exposure to any
Contaminant, which might result in liability in excess of workers
compensation; (x) no Environmental Lien has attached to any
Property of the Borrower or any of its Subsidiaries; or (xi)
within the last eighteen months, the Borrower has inspected its
Property and the Property of its Subsidiaries and all asbestos
containing material, if any, which is on or part of such Property
(excluding any raw materials which are used in the manufacture of
products or products themselves) is in good repair according to
the current standards and practices governing such material, and
its presence or condition does not violate any currently
applicable or proposed Requirement of Law; and (xii) none of the
products which the Borrower or any of its Subsidiaries
manufactures, distributes or sells, or ever has manufactured,
distributed or sold, contains asbestos material.
(t) Employee Benefit Matters. Neither the Borrower
nor any ERISA Affiliate maintains or contributes to any Benefit
Plan or Multiemployer Plan other than those listed on
Schedule 5.01(t). Each Plan which is intended to be qualified
under Section 401(a) of the IRC as currently in effect has been
determined by the IRS to be so qualified (or will be submitted to
the IRS for a determination as to its qualified status within the
applicable remedial amendment period for such Plan), and each
trust related to any such Plan has been determined to be exempt
from Federal income tax under Section 501(a) of the IRC as
currently in effect. Except as disclosed in Schedule 5.01(t),
neither the Borrower nor any ERISA Affiliate maintains or
contributes to any employee welfare benefit plan within the
meaning of Section 3(1) of ERISA which provides benefits to
employees after termination of employment other than as required
by Part 6 of Title I of ERISA. The Borrower and all of its ERISA
Affiliates are in compliance in all material respects with all of
the responsibilities, obligations or duties imposed on them by
ERISA or regulations promulgated thereunder with respect to all
Plans. No Benefit Plan has incurred any accumulated funding
deficiency (as defined in Sections 302(a)(2) of ERISA and 412(a)
of the IRC) whether or not waived which has had or is reasonably
likely to have a Material Adverse Effect. Neither the Borrower
nor any ERISA Affiliate or any fiduciary of any Plan which is not
a Multiemployer Plan (i) has engaged in a nonexempt prohibited
transaction described in Section 406 of ERISA or 4975 of the IRC
or (ii) has taken or failed to take any action which would
constitute or result in a Termination Event. Except as disclosed
on Schedule 5.01(t), neither the Borrower nor any ERISA Affiliate
has any potential liability under Section 4063, 4064, 4069, 4204
or 4212(c) of ERISA which has had or is reasonably likely to have
a Material Adverse Effect. Neither the Borrower nor any ERISA
Affiliate has incurred any liability to the PBGC which remains
outstanding other than the payment of premiums, and there are no
premium payments which have become due which are unpaid.
Schedule B to the most recent annual report filed with the IRS
with respect to each Benefit Plan and furnished to the
Administrative Agent is complete and accurate. Since the date of
each such Schedule B, there has been no material adverse change
in the funding status or financial condition of the Benefit Plan
relating to such Schedule B. Neither the Borrower nor any ERISA
Affiliate has (i) failed to make a required contribution
or payment to a Multiemployer Plan or (ii) made a complete or
partial withdrawal under Section 4203 or 4205 of ERISA from a
Multiemployer Plan in either case which has had or is reasonably
likely to have a Material Adverse Effect. Neither the Borrower
nor any ERISA Affiliate has failed to make a required installment
or any other required payment under Section 412 of the IRC on or
before the due date for such installment or other payment.
Neither the Borrower nor any ERISA Affiliate is required to
provide security to a Benefit Plan under Section 401(a)(29) of
the IRC due to a Plan amendment that results in an increase in
current liability for the plan year. Neither the Borrower nor
any ERISA Affiliate has by reason of the transactions
contemplated hereby any obligation to make any payment to any
employee pursuant to any Plan or existing contract or
arrangement.
(u) Solvency. Each of the Borrower, individually, and
the Consolidated Borrower Group, considered as one enterprise, is
Solvent after giving effect to the transactions contemplated by
this Agreement and the other Transaction Documents and the
payment and accrual of all Transaction Costs with respect to any
of the foregoing.
(v) Assets and Properties. The Borrower and each of
its Subsidiaries has good title to all of the assets (tangible
and intangible) owned by it, except for imperfections of title
(including Liens to the extent permitted under Section 8.02(b))
which in the aggregate do not have a Material Adverse Effect; and
all such assets are free and clear of all Liens, except as
otherwise specifically permitted by the terms and provisions of
this Agreement and the other Loan Documents.
(w) Joint Venture; Partnership. Except as set forth
in Schedule 5.01(w), neither the Borrower nor any of its
Subsidiaries is engaged in any joint venture or partnership with
any other Person.
(x) Labor Matters. Except as listed on Schedule
5.01(x), there are no collective bargaining agreements, other
labor agreements or Multiemployer Plans covering any of the
employees of the Borrower or any of its Subsidiaries. No attempt
to organize the employees of the Borrower or any of its
Subsidiaries, and no labor disputes, strikes or walkouts
affecting the operations of the Borrower or any of its
Subsidiaries, is pending, or, to the Borrower's knowledge,
threatened, planned or contemplated which has had or is
reasonably likely to have a Material Adverse Effect.
(y) No Default. No Potential Event of Default or
Event of Default exists.
(z) Restricted Junior Payments. On or after the
Effective Date, neither the Borrower nor any Subsidiary of the
Borrower has directly or indirectly declared, ordered, paid or
made or set apart any sum or property for any Restricted Junior
Payment or agreed to do so, except to the extent permitted
pursuant to Section 8.05.
5.02. Subsequent Funding Representations and
Warranties. To induce each Lender, each of the Issuing Banks,
the Administrative Agent and the Collateral Agent to enter into
this Agreement and to make the Loans and to issue or participate
in Letters of Credit, the Borrower hereby represents and warrants
to each Lender, each Issuing Bank, the Administrative Agent and
the Collateral Agent that the statements set forth in Section
5.01 (except to the extent that such statements expressly are
made only as of the Effective Date), are true, correct and
complete in all material respects on and as of the Funding Date
in respect of each Borrowing and the issuance of each Letter of
Credit after the Effective Date and on and as of the date any
Notice of Continuation/Conversion is delivered to the
Administrative Agent, except that the representations and
warranties need not be true and correct to the extent that
changes in the facts and conditions on which such representations
and warranties are based are required or permitted under this
Agreement or any Loan Document.
ARTICLE VI
Reporting Covenants
The Borrower covenants and agrees that so long as the
Borrower shall have any outstanding Agreement Obligations or any
Lender shall have any Commitment hereunder or any Letter of
Credit remains outstanding:
6.01. Financial Statements. The Borrower shall
maintain or cause to be maintained a system of accounting
established and administered in accordance with sound business
practices and consistent with past practice to permit preparation
of financial statements in conformity with GAAP, and, if required
by the terms of this Agreement in conformity with Agreement
Accounting Principles, and each of the financial statements
described below shall be prepared from such system and records.
The Borrower shall deliver or cause to be delivered to the
Administrative Agent:
(a) Annual Reports. As soon as practicable, and in
any event within one hundred and five (105) days after the end of
each Fiscal Year on a consolidated basis and on a consolidating
basis for the Consolidated Borrower Group, annual financial
statements consisting of a balance sheet, income statement and
cash flow statement, setting forth in comparative form in each
case the consolidated figures for the corresponding periods of
the previous Fiscal Year all in reasonable detail, and
accompanied, in the case of such consolidated financial
statements, by an opinion (unqualified as to scope or going
concern and which is not adverse and does not contain any
disclaimer) thereon of independent certified public accountants
of recognized national standing and acceptable to the
Administrative Agent, which report shall state that such
financial statements present fairly the financial position of the
Persons covered thereby as at the dates indicated and the results
of their operations and cash flow for the periods indicated in
conformity with GAAP or Agreement Accounting Principles, as
applicable, applied on a basis consistent with prior years (or,
in the event of a change in accounting principles, such
accountants' concurrence with such change) and that such firm's
audit has been conducted in accordance with generally accepted
auditing standards.
(b) Quarterly Reports.
As soon as practicable, and in any event within fifty
(50) days after the end of each of the Borrower's fiscal
quarters, on a consolidated basis and on a consolidating
basis for the Consolidated Borrower Group as to the most
recent fiscal quarter and the year to date, each of the
following:
(A) a balance sheet as of the end of such fiscal
quarter, and as of the end of the previous Fiscal Year;
(B) an income statement for such fiscal quarter
and for the period from the beginning of the current
Fiscal Year to the end of such fiscal quarter, setting
forth in each case in comparative form and in
reasonable detail the figures for the corresponding
periods of the previous Fiscal Year and in the
projected financial statements delivered pursuant to
clause (c) below; and
(C) a cash flow statement for the period from the
beginning of the current Fiscal Year to the end of such
fiscal quarter, setting forth in each case in
comparative form and in reasonable detail the figures
for the corresponding period of the previous Fiscal
Year;
all prepared by the Borrower, together with a certification by
the chief financial officer, treasurer or controller of Borrower
that they fairly represent the financial condition of the Persons
covered thereby as at the dates indicated in accordance with GAAP
or Agreement Accounting Principles, as applicable, subject to
changes resulting from audit and normal year-end adjustments.
(c) Budget and Business Plan. Promptly upon
completion, but in any event not later than forty-five (45) days
after the end of each Fiscal Year, a copy of the operating budget
and projections by the Borrower of the income statement, balance
sheet and cash flow of the Consolidated Borrower Group, taken as
a whole, for the next succeeding fiscal year of the Consolidated
Borrower Group, all in form customarily prepared by the
Borrower's management, and promptly after preparation of any
commentary on any such budget or projected financial statements,
a copy of such commentary, such operating budget and projected
financial statements to be accompanied by a certificate of the
chief financial officer, treasurer or controller of Borrower, to
the effect that such operating budget and projected financial
statements have been prepared on the basis of sound financial
planning practice and that such officer has no reason to believe
they are incorrect or misleading in any material respect.
(d) Compliance Certificate. Together with each
delivery of (i) the financial statements pursuant to
subsections (a) and (b) above, (A) an Officers' Certificate of
the Borrower stating that the signers have reviewed the terms of
this Agreement and the Loan Documents, and have made, or caused
to be made under their supervision, a review in reasonable detail
of the transactions and condition of Borrower and its
Subsidiaries during the accounting period covered by such
financial statements, and that such review has not disclosed the
existence during or at the end of such accounting period, and
that the signers do not have knowledge of the existence as at the
date of the Officer's Certificate, of any condition or event
which constitutes an Event of Default or Potential Event of
Default, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what
action the Borrower has taken, is taking and proposes to take
with respect thereto; and (B) a Compliance Certificate (1)
demonstrating in reasonable detail compliance during and at the
end of such accounting periods with the provisions set forth in
Sections 2.05, 8.01, 8.03, 8.04, 8.05 and 8.11 and Article IX and
(2) in the case of the financial statements delivered pursuant to
subsection (a) or subsection (b) above, stating that such
financial statements present fairly the financial position of the
Consolidated Borrower Group, as at the dates indicated and the
results of their operations and changes in their cash flow for
the periods indicated in conformity with GAAP or Agreement
Accounting Principles, as applicable (except as otherwise noted
therein), consistently applied, and (ii) the financial statements
pursuant to subsection (a) above, a written discussion and
analysis by the management of the Borrower of such financial
statements.
(e) Accountants' Compliance Certificate.
Simultaneously with the delivery of the financial statements
referred to in subsection (a) above, a statement of the firm of
independent certified public accountants which reported on such
financial statements whether anything has come to their attention
to cause them to believe that there existed on the date of such
statements any Event of Default or Potential Event of Default
under Article IX hereof.
(f) Report of Material Events. Promptly upon the
Borrower obtaining knowledge (A) of any condition or event which
constitutes an Event of Default or Potential Event of Default, or
(B) of any condition or event which has or is reasonably likely
to have a Material Adverse Effect, an Officer's Certificate
specifying the nature and period of existence of any such
condition or event and what action the Borrower has taken, is
taking and proposes to take with respect thereto.
(g) Notice of Claims and Proceedings. (i) Promptly
after learning thereof, notice of the institution of, or written
threat of, any action, suit, proceeding, governmental
investigation or arbitration against or affecting the Borrower or
any of its Subsidiaries (or any Property of such Person)
involving claims in excess of $2,000,000 with respect to any such
Person or any Property of such Person valued in excess of
$5,000,000 except where the same is fully covered (other than any
applicable deductible) by insurance (other than insurance in the
nature of retro-premium insurance or other self insurance
programs) and of any material adverse change in any existing
action, suit, proceeding, governmental investigation or
arbitration; and (ii) promptly upon learning thereof, notice of
any investigation or proceeding before or by any Governmental
Authority, the effect of which might limit, prohibit or restrict
materially the manner in which the Borrower or any of its
Subsidiaries currently conducts its business or to declare any
substance contained in the products manufactured or distributed
by it to be dangerous, if such declaration has or is reasonably
likely to have a Material Adverse Effect.
(h) ERISA Matters.
(i) As soon as possible, and in any event within
fifteen (15) Business Days after the Borrower or any ERISA
Affiliate knows or has reason to know that a Termination
Event has occurred, a written statement of the chief finan-
cial officer of the Borrower describing such Termination
Event and the action, if any, which the Borrower or such
ERISA Affiliate has taken, is taking or proposes to take
with respect thereto, and when known, any action taken or
threatened by the IRS, DOL or PBGC with respect thereto;
(ii) As soon as possible, and in any event within
fifteen (15) Business Days, after the Borrower or any ERISA
Affiliate knows or has reason to know that a prohibited
transaction (as defined in Section 406 of ERISA and
Section 4975 of the IRC) involving the Borrower or any ERISA
Affiliate has occurred, a statement of the chief financial
officer of the Borrower describing such transaction and the
action which the Borrower or such ERISA Affiliate has taken,
is taking or proposes to take with respect thereto;
(iii) Within fifteen (15) Business Days after receipt
by the Borrower or any ERISA Affiliate of a written request
from the Administrative Agent (which shall make such request
at the request of any Lender), a copy of each annual report
(Form 5500 series), including Schedule B thereto, filed
after the Effective Date with respect to each Benefit Plan;
(iv) Within fifteen (15) Business Days after the
filing thereof with the IRS, a copy of each funding waiver
request filed with respect to any Benefit Plan and within
fifteen (15) Business Days after receipt, a copy of any
communications received by the Borrower or any ERISA
Affiliate with respect to such request;
(v) Within fifteen (15) Business Days after receipt by
the Borrower or any ERISA Affiliate of a written request
from the Administrative Agent (which shall make such request
at the request of any Lender), a copy of each actuarial
report for any Benefit Plan or Multiemployer Plan and each
annual report for any Multiemployer Plan; provided that
neither the Borrower nor any ERISA Affiliate shall have an
obligation to provide a copy of any actuarial report or
annual report for any Multiemployer Plan if it is unable to
obtain such documents after good faith efforts to do so;
(vi) Within fifteen (15) Business Days after the
occurrence thereof, notification of any increases in the
benefits of any existing Benefit Plan or the establishment
of any new Plan or the commencement of contributions to any
Multiemployer Plan to which the Borrower or any ERISA
Affiliate was not previously contributing;
(vii) Within fifteen (15) Business Days after receipt
by the Borrower or an ERISA Affiliate of notice of the
PBGC's intention to terminate a Benefit Plan or to have a
trustee appointed to administer a Benefit Plan, a copy of
each such notice;
(viii) Within fifteen (15) Business Days after receipt
by the Borrower or any ERISA Affiliate of any unfavorable
determination letter from the IRS regarding the
qualification of a Plan under Section 401(a) of the IRC, a
copy of such letter;
(ix) Within fifteen (15) Business Days after receipt
by the Borrower or an ERISA Affiliate of a notice from a
Multiemployer Plan regarding the imposition of withdrawal
liability, copies of each such notice;
(x) Within fifteen (15) Business Days after the
failure by the Borrower or any ERISA Affiliate to make a
required installment or any other payment required under
Section 412 of the IRC on or before the due date for such
installment or payment, a notification of such failure; and
(xi) Within fifteen (15) Business Days after the
Borrower or any ERISA Affiliate knows or has reason to know
(A) a Multiemployer Plan has been terminated, (B) the
administrator or plan sponsor of a Multiemployer Plan
intends to terminate a Multiemployer Plan, or (C) the PBGC
has instituted or will institute proceedings under
Section 4042 of ERISA to terminate a Multiemployer Plan, a
notification of such information.
For purposes of this Section 6.01(h), the Borrower and any ERISA
Affiliate shall be deemed to know all facts known by the
administrator of any Plan of which the Borrower or any ERISA
Affiliate is the plan sponsor.
(i) Other Information. Such other information
respecting the financial condition of the Borrower or its
business, operations, assets, performance or prospects as the
Administrative Agent, the Collateral Agent or any Lender may,
from time to time, reasonably request including, without
limitation, financial projections, business plans and (following
written notice to Borrower) any information such Person's
accountants may have with respect to such Person's financial
condition, its business, operations, assets, performance and
prospects. The Administrative Agent and the Lenders shall treat
any non-public information so obtained as confidential.
(j) Publicly Distributed Information. On a timely
basis, copies of all financial statements, reports and notices,
sent or made available generally by the Borrower to the holders
of its publicly-held securities, if any, or filed with the
Commission, and of all press releases made available generally by
the Borrower to the public, if any, concerning material
developments in the business of the Borrower.
(k) Property Damage or Condemnation. Promptly after
the occurrence thereof, written notification (or telephonic
notice promptly confirmed in writing) of and a description of any
Property of the Borrower or any of its Subsidiaries with an
aggregate value in excess of $1,000,000 damaged, lost or taken
and the anticipated amount of any insurance or condemnation
proceeds in connection therewith.
6.02. Environmental Notices. The Borrower shall
notify the Administrative Agent in writing, promptly upon the
Borrower's learning thereof, of any:
(a) Notice or claim to the effect that the
Borrower or any of its Subsidiaries is or may be liable
to any Person as a result of the Release or threatened
Release of any Contaminant into the environment;
(b) Notice that the Borrower or any of its
Subsidiaries is subject to investigation by any
Governmental Authority evaluating whether any Remedial
Action is needed to respond to the Release or
threatened Release of any Contaminant into the
environment;
(c) Notice that any Property of the Borrower or any of
its Subsidiaries is subject to an Environmental Lien;
(d) Notice of violation to the Borrower or any of
its Subsidiaries or awareness by the Borrower or any of
its Subsidiaries of a condition which might reasonably
be expected to result in a notice of violation of any
environmental, health or safety Requirement of Law
which has or could have a Material Adverse Effect;
(e) Commencement or threat of any judicial or
administrative proceeding alleging a violation by the
Borrower or any of its Subsidiaries of any environmen-
tal, health or safety Requirement of Law which, if
adversely determined, has or could have a Material
Adverse Effect; or
(f) Any proposed acquisition of stock, assets,
real estate, or leasing of property, or any other
action by the Borrower or any of its Subsidiaries that
is reasonably likely to subject the Borrower or any
such Subsidiary to environmental, health or safety
Liabilities and Costs in excess of $250,000.
ARTICLE VII
Affirmative Covenants
The Borrower covenants and agrees that so long as the
Borrower shall have any outstanding Agreement Obligations or any
Lender shall have any Commitment hereunder or any Letter of
Credit remains outstanding:
7.01. Corporate Existence, Etc. The Borrower shall,
and shall cause each of its Subsidiaries to, at all times,
maintain its corporate existence and preserve and keep in full
force and effect its rights and franchises. The Borrower shall
promptly provide the Administrative Agent and the Collateral
Agent with a complete list of its Subsidiaries upon the
occurrence of any change in the list set forth on Schedule
5.01(c) hereto.
7.02. Corporate Powers, Etc. The Borrower shall, and
shall cause each of its Subsidiaries to, qualify and remain
qualified to do business in each jurisdiction in which the nature
of its business requires it to be so qualified, except in those
jurisdictions where the failure to so qualify does not have and
is not reasonably likely to have a Material Adverse Effect.
7.03. Compliance with Laws. The Borrower shall, and
shall cause each of its Subsidiaries to, comply with all Require-
ments of Law, and all Contractual Obligations affecting it or its
business, properties, assets or operations, except where the
failure so to comply does not have and is not reasonably likely
to have a Material Adverse Effect.
7.04. Payment of Taxes and Claims. The Borrower
shall, and shall cause each of its Subsidiaries to, pay (a) all
taxes, assessments and other governmental charges imposed upon it
or on any of its properties or assets or in respect of any of its
franchises, business, income or property before any penalty or
interest accrues thereon, and (b) all claims (including, without
limitation, claims for labor, services, materials and supplies)
for sums which have become due and payable and which by law have
or may become a Lien (other than a Customary Permitted Lien) upon
any of its properties or assets, prior to the time when any
penalty or fine shall be incurred with respect thereto; provided
that no such taxes, assessments and governmental charges referred
to in clause (a) above or claims referred to in clause (b) above
need be paid if being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and if
such reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made therefor.
7.05. Maintenance of Properties; Insurance. The
Borrower shall, and shall cause each of the Borrower Subsidiaries
to, maintain or cause to be maintained in good repair, working
order and condition, excepting ordinary wear and tear and damage,
due to casualty or condemnation, all Property material to its
operations (which shall in any event include each parcel of real
property subject to any Mortgage) and will make or cause to be
made all appropriate repairs, renewals and replacements thereof.
The Borrower shall, and shall cause each of the Borrower Subsidi-
aries to, maintain with financially sound insurance companies the
insurance policies and programs, including self-insurance
retention levels, listed on Schedule 7.05 hereto (or
substantially similar programs or policies and amounts or other
programs, policies and amounts) insuring all Property and other
assets material to the operations of Borrower and the Borrower
Subsidiaries (which shall in any event include each parcel of
real property subject to any Mortgage) against loss or damage by
fire, theft, burglary, pilferage and loss in transit and business
interruption, together with such other hazards as are reasonably
consistent with prudent industry practice, and maintain liability
insurance consistent with prudent industry practice with
financially sound insurance companies. Not later than thirty
(30) days after the renewal, replacement or material modification
of any policy or program, the Borrower shall deliver or cause to
be delivered to the Collateral Agent (which the Collateral Agent
shall promptly distribute to each Lender) a detailed schedule
setting forth for each such policy or program: (a) the amount of
such policy, (b) the risks insured against by such policy, (c)
the name of the insurer and each insured party under such policy,
and (d) the policy number of such policy. All casualty and
business interruption insurance covering the Borrower or any
Subsidiary of the Borrower or any Property of the Borrower or any
Subsidiary of the Borrower shall contain an endorsement in the
form of Exhibit 7.
7.06. Inspection of Property; Books and Records;
Discussions. The Borrower shall permit, and shall cause each of
its Subsidiaries to permit, any authorized representative(s)
designated by the Administrative Agent or the Collateral Agent to
visit and inspect any of its properties, including financial and
accounting records, and to make copies and take extracts
therefrom, and to discuss its affairs, finances and accounts with
its officers, employees, representatives, agents or independent
certified public accountants, all upon reasonable notice and at
such reasonable time and as often as may be reasonably requested.
Each such reasonable visitation and inspection made by or on
behalf of the Administrative Agent or the Collateral Agent shall
be at the Borrower's expense.
7.07. Labor Matters. The Borrower shall notify the
Administrative Agent, in writing, promptly, but in any event
within two (2) Business Days after learning thereof, of any
material labor dispute to which it or any of its Subsidiaries may
become a party and any strikes or walkouts relating to any of its
or their facilities.
7.08. Maintenance of Permits. The Borrower shall
obtain and maintain, and shall cause each of its Subsidiaries to
obtain and maintain, in full force and effect all licenses,
franchises, Permits or other rights necessary for the operation
of its business, except where the failure to obtain or maintain
such licenses, franchises, Permits or rights does not have and is
not reasonably likely to have a Material Adverse Effect.
7.09. Employee Benefit Matters. The Borrower shall
establish, maintain and operate, and cause each of its Subsid-
iaries to exercise their best efforts to cause other ERISA
Affiliates to establish, maintain and operate, all Plans in all
material respects in compliance with the applicable provisions of
ERISA, the IRC, and all other applicable laws, and the
regulations and interpretations thereunder, and the respective
requirements of the governing documents for such Plans.
7.10. Formation of Subsidiaries. (a) The Borrower or
any of its Subsidiaries may form additional Subsidiaries
organized as corporations under the laws of one of the states of
the United States provided each of the following conditions
precedent is met in connection therewith:
(i) such Subsidiary shall have executed and delivered a
Subsidiary Guaranty, a Subsidiary Security Agreement, and if
requested by the Collateral Agent, an Intellectual Property
Agreement;
(ii) such Subsidiary shall have executed and become a
party to the Contribution Agreement;
(iii) to the extent such Subsidiary has an interest of
record in real property, such Subsidiary shall execute and
deliver such Mortgages in connection therewith as shall be
requested by the Collateral Agent (with Schedule 1.01-C
being automatically amended as of the execution thereof);
(iv) all financing statements and Mortgages relating
to the Collateral of such Subsidiary shall have been filed
or recorded and the Collateral Agent shall have received in
form and substance reasonably satisfactory to the Collateral
Agent, such assurances, including, without limitation,
insurance policies, as the Collateral Agent may deem
appropriate to establish such Subsidiary's title, the due
creation, perfection and priority of the Collateral Agent's
Liens for the benefit of itself and the Holders of Secured
Obligations on such Collateral and the absence of any Liens
which are not specifically permitted hereunder (with
Schedule 1.01-C being automatically amended to reflect any
Permitted Existing Liens on such proposed Subsidiary's
assets);
(v) the Borrower shall have executed or shall have
caused its appropriate Subsidiary to execute a Pledge Agree-
ment in respect of all of the stock of such Subsidiary;
(vi) the Collateral Agent shall have received an
opinion of counsel, in form and substance reasonably
satisfactory to the Collateral Agent, covering such matters
relating to the proposed Subsidiary and the Collateral
Documents executed and delivered to the Collateral Agent
pursuant to this Section 7.10 as the Collateral Agent deems
necessary;
(vii) the Administrative Agent shall have received a
compliance certificate from the chief financial officer,
treasurer or controller of the Borrower certifying that
after the formation of such Subsidiary, no Event of Default
or Potential Event of Default exists; and
(viii) the Lenders shall have received such other
documents, instruments or agreements as are reasonably
requested by the Administrative Agent, the Collateral Agent
or the Requisite Lenders in order to ensure that the docu-
mentation with respect to such Subsidiary is substantially
the same as that received with respect to the Subsidiaries
of the Borrower existing on the Effective Date.
(b) The Borrower or any of its Subsidiaries may form
additional Subsidiaries organized under the laws of jurisdictions
outside of the United States, provided each of the following
conditions precedent is met in connection therewith:
(i) the majority of the outstanding shares of capital
stock of each such Subsidiary shall be owned directly or
indirectly by the Borrower or any of its Subsidiaries,
(ii) immediately following the formation of each such
Subsidiary,
(A) 65% of the shares (or, if the Borrower owns
directly or indirectly less than 65% of such shares,
all of the shares owned directly or indirectly by the
Borrower) of such Subsidiary shall be pledged to the
Collateral Agent, for the ratable benefit of the
Holders of Secured Obligations pursuant to an amendment
to the Borrower's or the owning Subsidiary's Pledge
Agreement in form and substance reasonably satisfactory
to the Administrative Agent, and
(B) the Borrower shall deliver to the
Administrative Agent such opinions of counsel with
respect to, and copies of the Boards of Directors
resolutions authorizing, the execution, delivery and
performance of the agreements described in clause (A)
immediately preceding as the Administrative Agent may
reasonably request, and
(iii) the aggregate investment by the Borrower in all
such Subsidiaries pursuant to this Section 7.10(b) shall not
exceed the limit set forth in Section 8.03(iv).
7.11. Liquidity. The Borrower shall maintain at all
times, and shall cause each of its Subsidiaries to maintain at
all times, sufficient liquidity for working capital purposes,
including, without limitation, financing for or liquidity to
support the accounts receivable of the Borrower and its
Subsidiaries.
7.12. Future Liens on Real Property in Favor of the
Collateral Agent. The Borrower shall cause each of the
Guarantors to execute and deliver to the Collateral Agent,
immediately upon the acquisition or leasing of any real property
after the Effective Date, a mortgage, deed of trust, collateral
assignment or other appropriate instrument evidencing a Lien upon
any such acquired property, lease or interest, the same to be in
form and substance substantially the same as the Mortgages
executed and delivered on or prior to the Effective Date, to be
subject only to such Liens as otherwise shall be permitted by
this Agreement and in all respects to be reasonably acceptable to
the Collateral Agent. The foregoing provision shall apply to the
leasing of any real property only if either (i) the term of such
lease (without regard to any extension thereof at then current
market rent) is more than five years or (ii) such lease has a
material value by reason of a purchase option, below-market rent
or otherwise.
ARTICLE VIII
Negative Covenants
The Borrower covenants and agrees that so long as the
Borrower shall have any outstanding Agreement Obligations or any
Lender shall have any Commitment hereunder or any Letter of
Credit remains outstanding:
8.01. Indebtedness. The Borrower shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly
create, incur, assume or otherwise become or remain directly or
indirectly liable with respect to any Indebtedness, except:
(i) the Obligations;
(ii) the Existing Indebtedness;
(iii) Indebtedness in respect of Accommodation
Obligations permitted by Section 8.04;
(iv) Indebtedness incurred by any Subsidiary of
the Borrower with respect to which the Borrower or any
other Subsidiary of the Borrower is the obligee;
(v) Indebtedness incurred by the Borrower with respect
to which any Subsidiary of the Borrower is the obligee;
(vi) net obligations in respect of Hedging Contracts;
(vii) Indebtedness incurred by the Borrower or any of
its Subsidiaries in connection with the issuance of letters
of credit (including Letters of Credit but excluding other
letters of credit fully secured by cash collateral and
letters of credit with respect to which the reimbursement
obligation is fully supported by a Letter of Credit) for
which such Person is the account party in an aggregate
amount (for all such Persons) of up to $25,000,000 at any
one time;
(viii) other Indebtedness of the Borrower and its
Subsidiaries not exceeding in the aggregate $25,000,000 at
any one time outstanding;
(ix) Indebtedness with respect to Capital Leases not
in excess of $10,000,000 at any one time; and
(x) any refinancing of the Indebtedness described in
clauses (i) through (viii) of this Section 8.01 provided
that any such refinancing is on market terms;
provided, however, in each case after taking such
Indebtedness into account the Consolidated Borrower Group is
in full compliance with the provisions of Article IX hereof.
Any additional Indebtedness (other than Indebtedness already
permitted pursuant to this Section 8.01) consented to by the
Requisite Lenders shall be on terms which shall include without
limitation that the applicable interest rate shall be at a market
rate, covenants shall be no more restrictive than those contained
in this Agreement, such Indebtedness shall be unsecured, no
principal payments, sinking fund or similar payments shall be
scheduled in the case of subordinated indebtedness prior to six
months after the Revolving Credit Termination Date or in the case
of other Indebtedness prior to two years after the Revolving
Credit Termination Date and such additional Indebtedness shall
not result in a violation of any of the covenants contained in
this Agreement on a pro forma basis.
8.02. Sales of Assets; Liens.
(a) Limitation on Sales. The Borrower shall not, and
shall not permit any of its Subsidiaries to, sell, assign, trans-
fer, lease, convey or otherwise dispose of, in a single
transaction or in a series of related transactions, any proper-
ties or assets, including, without limitation, any capital stock
of any of their respective Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, except
for (i) sales of inventory in the ordinary course of business,
(ii) the disposition of equipment in the ordinary course of
business, (iii) sales of accounts receivable pursuant to the
Receivables Agreement for cash consideration not less than the
fair market value of such accounts receivable, and (iv) so long
as no Event of Default or Potential Event of Default exists, any
other sales or dispositions if such properties or assets
contributed less than 15% of the EBITDA of the Consolidated
Borrower Group in the immediately preceding Fiscal Year and
represent, as of the end of the most recent Fiscal Year, less
than 15% of the total assets of the Consolidated Borrower Group
based on valuations reasonably satisfactory in form and substance
to the Administrative Agent and the Collateral Agent. In
addition, neither the Borrower nor any Borrower Subsidiary shall
issue any Securities for any consideration other than cash except
with the consent of the Requisite Lenders.
(b) Liens. The Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly create,
incur, assume or permit to exist any Lien on or with respect to
any of its Property (including all capital stock of any
Subsidiary of the Borrower and all Collateral) except:
(i) Liens granted to the Collateral Agent for the
benefit of itself and the Holders of Secured
Obligations securing the Obligations;
(ii) Customary Permitted Liens;
(iii) Permitted Existing Liens;
(iv) Liens on property existing at the time of
acquisition thereof by the Borrower or any of its
Subsidiaries and Liens securing purchase money Indebtedness
for equipment to the extent the aggregate outstanding
principal amount of such Indebtedness is permitted under
Section 8.01 and the value of the equipment securing such
Indebtedness approximates the amount of such Indebtedness
provided that in each case such Liens do not apply to other
property or assets of such Person;
(v) Liens with respect to judgments or
attachments which do not result in an Event of Default
or Potential Event of Default hereunder;
(vi) Liens granted on cash collateral securing letters
of credit permitted pursuant to Section 8.01(vii) in favor
of the issuer of such letter of credit;
(vii) Liens granted to secure Indebtedness permitted
under Section 8.01(ix); and
(viii) Liens filed to perfect the transfers of
accounts receivable pursuant to the Receivables Agreement or
otherwise to evidence the transactions contemplated
thereunder.
8.03. Investments. The Borrower shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly
make or commit to make any advance, loan, extension of credit or
capital contribution to, or purchase of any stock, bonds, notes,
debentures or other Securities of, or make any other investment
in, any Person or enter into a partnership with any Person,
including, without limitation, any Affiliate of the Borrower (all
such transactions being referred to as "Investments"), except:
(i) Investments by the Borrower or any of its Subsid-
iaries in Cash Equivalents;
(ii) Investments by the Borrower in any Guarantor;
(iii) Investments by any Borrower Subsidiary in
the Borrower;
(iv) Investments by the Borrower or a Borrower
Subsidiary in Subsidiaries created pursuant to Section 7.10,
provided that Investments in Subsidiaries created pursuant
to Section 7.10(b) shall not exceed $10,000,000 in the
aggregate;
(v) loans to employees and Accommodation Obligations
with respect to loans to employees in the ordinary course of
business not in excess of an aggregate amount of $1,000,000
outstanding at any one time;
(vi) Investments by the Borrower or a Borrower
Subsidiary in any other Person constituting an acquisition
of all or substantially all of the capital stock or assets
of such Person, provided such Investments do not exceed
$50,000,000 in the case of any single Investment or series
of related Investments or an aggregate amount of
$100,000,000 (in each case, including the cash and noncash
consideration for such Investment plus the amount of any
liabilities, including contingent liabilities, assumed in
connection with such Investment, but not including accrued
expenses and trade accounts payable in the ordinary course
of the acquired business) during the term of this Agreement
(plus an amount equal to the amount realized by the Borrower
and the Guarantors from the sale of any such Investments and
which are not required to be prepaid and applied to the Term
Loans pursuant to Sections 2.05 and 2.06), and no single
Investment or series of related Investments shall exceed
$25,000,000 (including the cash and noncash consideration
for such Investment plus the amount of any liabilities,
including contingent liabilities, assumed in connection with
such Investment, but not including accrued expenses and
trade accounts payable in the ordinary course of the
acquired business) unless the Borrower would have been in
compliance with a Leverage Ratio equal to or less than 2.5
to 1 on a combined basis for the four fiscal quarter period
most recently ended prior to the date of such Investment as
if such Investment had occurred at the beginning of such
period and delivers an Officer's Certificate confirming such
compliance, and provided further that any such Investment
shall be in a Person that is in substantially the same
business or a reasonably related business as existing
businesses of the Borrower or any Borrower Subsidiary, and
the Borrower shall deliver to the Administrative Agent an
Officer's Certificate confirming that after such Investment
has been made (a) on a pro forma basis the Borrower will
remain in compliance with the covenants in this Agreement,
(b) as a result of such Investment neither the Borrower nor
any of its Subsidiaries shall be exposed to additional
material contingent liabilities and (c) Revolving Credit
Availability shall be not less than $25,000,000;
(vii) loans to executive officers of the Borrower for
the purchase of Class A Common Stock of the Borrower
pursuant to the Borrower's Senior Executive Stock Purchase
Plan in an aggregate amount not to exceed 95% of the
purchase price of 500,000 shares of Class A Common Stock;
(viii) other Investments by the Borrower and the
Borrower Subsidiaries not in excess of an annual amount of
$5,000,000 during the term of this Agreement;
(ix) increases in Investments arising from
undistributed earnings or changes in currency translations;
and
(x) Investments by foreign Borrower Subsidiaries in
other foreign Borrower Subsidiaries.
Notwithstanding anything herein to the contrary, (a) there shall
be excluded from the calculation of Investments the accrual of
intercompany charges incurred in the ordinary course and (b)
there shall be included in the calculation of investments all
transfers of cash or assets (other than the purchase of inventory
in the ordinary course of business and upon terms that would be
obtained in an arms-length transaction).
8.04. Accommodation Obligations. The Borrower shall
not, and shall not permit any of its Subsidiaries to, directly or
indirectly, create or become or be liable with respect to any
Accommodation Obligation, except:
(i) guaranties resulting from endorsement of
negotiable instruments for collection in the ordinary
course of business;
(ii) Accommodation Obligations arising in
connection with the Transaction Documents;
(iii) Accommodation Obligations issued with respect to
the Indebtedness of the Borrower or any Guarantor in the
ordinary course of business of the Borrower or any of the
Borrower Subsidiaries; and
(iv) Accommodation Obligations of any foreign Borrower
Subsidiary with respect to the Indebtedness of any other
foreign Borrower Subsidiary.
8.05. Restricted Junior Payments. The Borrower shall
not, and shall not permit any Subsidiary of the Borrower to,
declare or make any Restricted Junior Payment, except:
(i) purchases of the Borrower's common stock from
stockholders other than EIPC or any member of the Samuel
Zell Group in an aggregate, cumulative amount not to exceed
$25,000,000, without restriction by clause (ii) below;
(ii) dividends on and/or purchases of the Borrower's
common stock in an aggregate, cumulative amount from and
after November 9, 1994 not to exceed 25% of cumulative
Consolidated Net Income of the Consolidated Borrower Group
for the period from November 9, 1994 to the end of the most
recently ended fiscal quarter of the Borrower prior to the
date of declaration of any such dividend, treating such
period as a single accounting period, provided, however,
that (a) the aggregate amount of dividends paid and/or
repurchases made during any Fiscal Year shall not exceed an
amount equal to 50% of Consolidated Net Income of the
Consolidated Borrower Group for the previous Fiscal Year and
(b) no dividend and/or purchase may be paid or made pursuant
to this clause (ii) unless such dividend and/or purchase
would be permitted after treating all purchases previously
made pursuant to clause (i) above as purchases made pursuant
to this clause (ii);
(iii) any wholly-owned Subsidiary of the Borrower and
any Subsidiary formed by the Borrower pursuant to Section
7.10(b) may pay dividends to its stockholders;
(iv) repayments to the Borrower or any of its
Subsidiaries of any Investments permitted under Section
8.03; and
(v) payments required by the Tax Sharing Agreement
when due and payments of allocated salaries and other
corporate overhead consistent with Section 8.07.
If, as a result of purchases of the Borrower's common stock
permitted hereby, the Borrower shall be required to join with any
other corporation or corporations (in addition to the Borrower's
Subsidiaries) in the filing of a consolidated federal income tax
return (all such corporations required to join in such filing
being a "Consolidated Group"), then the Borrower shall enter into
a tax sharing agreement or agreements with the corporation
responsible for the filing of such consolidated return and any
other members of the Consolidated Group as may be appropriate, in
each case in form and substance satisfactory to the Requisite
Lenders.
8.06. Conduct of Business. The Borrower shall not,
and shall not permit any of its Subsidiaries to, engage in any
business other than the business engaged in by such persons on
the Effective Date and any business activities substantially
similar or related thereto.
8.07. Transactions with Affiliates. The Borrower
shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly enter into or permit to exist any
transaction (including, without limitation, the purchase, sale,
lease or exchange of any property or the rendering of any
service) with any of its Affiliates on terms that are less
favorable to it than those fair and reasonable terms that might
be obtained in a comparable arms-length transaction at the time.
Without limiting the foregoing, to the extent the Borrower or any
of its Subsidiaries employs any individual who is also employed
by any such Affiliate or utilizes facilities that are also
utilized by any such Affiliate, there shall be a fair and
reasonable allocation of all salaries and expenses related
thereto.
8.08. Restriction on Fundamental Changes.
(a) The Borrower shall not, and shall not permit any
of its Subsidiaries to, enter into any merger or consolidation,
or liquidate, wind-up or dissolve (or suffer any liquidation or
dissolution), discontinue its business or convey, lease, sell,
transfer or otherwise dispose of, in one transaction or series of
transactions, all or any substantial part of its business or
Property, whether now or hereafter acquired, except:
(i) as otherwise permitted under Section 8.02(a)
or as disclosed in Schedule 8.08 attached hereto; and
(ii) any Subsidiary of the Borrower may merge
into or convey, sell, lease or transfer all or sub-
stantially all of its assets to the Borrower or any
Guarantor.
(b) The Borrower shall not, and shall not permit any
of its Subsidiaries to, acquire by purchase or otherwise any
property or assets of, or stock or other evidence of beneficial
ownership of, any Person, except in the ordinary course of its
business or to the extent permitted pursuant to Section 8.03 or
as contemplated by the Receivables Agreement.
8.09. Employee Benefit Matters. The Borrower shall
not, and shall not permit any of its Subsidiaries to, and will
exercise its best efforts to not permit any of its other ERISA
Affiliates to:
(i) Engage in any prohibited transaction
described in Section 406 of ERISA or 4975 of the IRC
for which a statutory or class exemption is not
available or a private exemption has not been
previously obtained from the DOL;
(ii) permit to exist any accumulated funding
deficiency (as defined in Sections 302 of ERISA and 412
of the IRC), whether or not waived;
(iii) fail to pay timely required contributions
or annual installments due with respect to any waived
funding deficiency to any Benefit Plan;
(iv) terminate any Benefit Plan in a distress
termination under Section 4041(c) of ERISA which would
result in any liability to the Borrower or any ERISA
Affiliate;
(v) fail to make any contribution or payment to
any Multiemployer Plan which the Borrower or any ERISA
Affiliate may be required to make under any agreement
relating to such Multiemployer Plan, or any law
pertaining thereto;
(vi) fail to pay any required installment or any
other payment required under Section 412 of the IRC on
or before the due date for such installment or other
payment; or
(vii) amend a Plan resulting in an increase in
current liability for the plan year such that the
Borrower or any ERISA Affiliate is required to provide
security to such Plan under Section 401(a)(29) of the
IRC.
8.10. Environmental Liabilities. The Borrower shall
not, and shall not permit any of its Subsidiaries to, become sub-
ject to any Liabilities and Costs, which are reasonably likely to
have a Material Adverse Effect, arising out of or related to (a)
the Release or threatened Release at any location of any Contami-
nant into the environment, or any Remedial Action in response
thereto, or (b) any violation of any environmental, health and
safety Requirements of Law.
8.11. Margin Regulations. No portion of the proceeds
of any credit extended under this Agreement shall be used in any
manner which might cause the extension of credit or the
application of such proceeds to violate Regulation G,
Regulation T, Regulation U or Regulation X or any other
regulation of the Federal Reserve Board or to violate the
Securities Exchange Act or the Securities Act, in each case as in
effect on the date or dates of such Borrowing and the use of such
proceeds.
8.12. Change of Fiscal Year. The Borrower shall not
change its Fiscal Year.
8.13. Amendment of Certain Documents. The Borrower
and its Subsidiaries shall not permit any termination of, or any
modification or amendment that is adverse in any respect to the
Lenders to be made to either the certificate of incorporation or
by-laws of the Borrower or any of its Subsidiaries.
8.14. Modification of Receivables Agreements; New
Receivables Securitization. The Borrower shall not, and shall
not permit any of its Subsidiaries to (i) agree to or enter into
any amendment, waiver or other modification of the Receivables
Agreement or (ii) enter into any new Receivables Agreement that
would, in either such event: (a) increase the certificate rates
paid to any investors thereunder to more than a market rate, (b)
reduce the purchase price or the cash portion thereof received by
the Borrower or any of its Subsidiaries for accounts receivable
sold thereunder, (c) materially delay the timing of any payments
owed thereunder to the Borrower or any of its Subsidiaries, (d)
render the covenants, representations and warranties or events of
termination or amortization thereunder more restrictive in any
material respect, (e) create any recourse obligations of the
Borrower or any of its Subsidiaries in excess of those
contemplated by the Receivables Agreement as in effect on the
Effective Date (except that any Receivables Subsidiary may incur
recourse obligations which are substantially similar to those
incurred by Centrally Held Eagle Receivables Program, Inc. under
the Pooling and Servicing Agreement as in effect on the Effective
Date), (f) accelerate the date of any required termination or
amortization thereunder or (g) provide for the continued sales or
transfers by the Borrower or any of its Subsidiaries of accounts
receivable after the "Amortization Period Commencement Date" (as
such term is defined in the Pooling and Servicing Agreement as in
effect on the Effective Date) or after the date of any required
amortization or termination under any successor Pooling and
Servicing Agreement.
ARTICLE IX
Financial Covenants
The Borrower covenants and agrees that so long as the
Borrower shall have any outstanding Agreement Obligations or any
Lender shall have any Commitment hereunder or any Letter of
Credit remains outstanding:
9.01. Minimum Consolidated Net Worth.
The Borrower shall not permit Net Worth for the
Consolidated Borrower Group determined on a consolidated basis at
any time to be less than the amounts set forth below during the
periods set forth below:
Period Minimum Amount
December 31, 1994 through
December 30, 1995 (25,000,000)
December 31, 1995 through
December 30, 1996 (10,000,000)
December 31, 1996 through
December 30, 1997 10,000,000
December 31, 1997 through
December 30, 1998 30,000,000
December 31, 1998 through
December 30, 1999 50,000,000
December 31, 1999
and thereafter 70,000,000
Each of the minimum amounts specified above for the respective
periods shall be automatically reduced on a cumulative basis by
(i) the amount of any write-off of goodwill by the Borrower in
accordance with Agreement Accounting Principles, provided that
such automatic reductions shall be limited to $10,000,000 in any
one Fiscal Year and $40,000,000 in the aggregate, and (ii) the
amount of permitted purchases of the Borrower's common stock
pursuant to Section 8.05(i).
9.02. Leverage Ratio.
The Borrower shall not permit the Leverage Ratio of the
Consolidated Borrower Group calculated at the end of each fiscal
quarter, for the two fiscal quarter period ending June 30, 1995,
for the three fiscal quarter period ending September 30, 1995,
and for the period of the immediately preceding four fiscal
quarters at the end of each fiscal quarter thereafter, to be
greater than 2.75 to 1. For purposes of calculation of the
foregoing ratio at the end of the second and third fiscal
quarters in 1995, Net EBITDA for the relevant periods ending on
such dates shall be annualized by multiplying such Net EBITDA by
2 and by 4/3, respectively.
9.03. Interest Coverage Ratio.
The Borrower shall not permit the Interest Coverage
Ratio calculated at the end of each fiscal quarter for the period
from November 9, 1994 through June 30, 1995, for the period from
November 9, 1994 through September 30, 1995, and for the period
of the immediately preceding four fiscal quarters at the end of
each fiscal quarter thereafter for the Consolidated Borrower
Group to be less than 5.0 to 1.
9.04. Capital Expenditures.
The Borrower shall not, and shall not permit any of its
Subsidiaries to, in any Fiscal Year, incur Capital Expenditures
which exceed in the aggregate for the Consolidated Borrower Group
the sum of (a) $26,000,000 in Fiscal Year 1995 (increasing by
$4,000,000 in each Fiscal Year thereafter) plus (b) the
difference, if positive (but not to exceed $5,000,000), between
(1) the maximum aggregate amount of Capital Expenditures
permitted pursuant to this Section 9.04 for the immediately
preceding Fiscal Year and (2) the aggregate amount of Capital
Expenditures actually incurred during such preceding Fiscal Year.
9.05. Fixed Charges Coverage Ratio.
The Borrower shall not permit the Fixed Charges
Coverage Ratio at June 30, 1995 for the two fiscal quarter period
ending June 30, 1995, at September 30, 1995 for the three fiscal
quarter period ending September 30, 1995, and at the end of each
fiscal quarter thereafter for the period of the immediately
preceding four fiscal quarters for the Consolidated Borrower
Group determined in accordance with Agreement Accounting
Principles to be less than 1.0 to 1.
ARTICLE X
Events of Default; Rights and Remedies
10.01. Events of Default. Each of the following
occurrences shall constitute an Event of Default under this
Agreement:
(a) Failure to Make Payments When Due. The Borrower
shall fail to pay when due any principal of any Loan or
Reimbursement Obligation or to pay when due any interest on any
Loan or Reimbursement Obligation or any fee or other amount
payable under this Agreement or any of the other Loan Documents
and such failure shall continue for three (3) calendar days.
(b) Breach of Certain Covenants. The Borrower or any
of its Subsidiaries shall fail duly and punctually to perform or
observe any agreement, covenant or obligation under Sections
6.01, 7.01, 7.05 or under Articles VIII and IX or binding on the
Borrower or any of its Subsidiaries under any section of the
Collateral Documents (which failure continues after the
expiration of any grace period applicable thereto).
(c) Breach of Representation or Warranty. Any
representation or warranty made or deemed made by the Borrower to
the Administrative Agent, the Collateral Agent, any of the
Issuing Banks or any Lender herein or by the Borrower or any of
its Subsidiaries in any of the other Loan Documents or in any
written statement or certificate at any time given by the
Borrower or any of its Subsidiaries pursuant to any of the Loan
Documents shall be false or misleading in any respect on the date
as of which made or deemed made.
(d) Other Defaults. The Borrower or any of its
Subsidiaries shall fail duly and punctually to perform or observe
any agreement, covenant or obligation arising under this Agree-
ment (except those described in Sections 10.01(a), (b) and (c))
or under any of the other Loan Documents, and such failure shall
continue for thirty (30) days (or, in the case of Loan Documents
other than this Agreement, any longer period of grace expressly
set forth therein).
(e) Default as to Other Indebtedness. The Borrower or
any of its Subsidiaries shall fail to make any payment when due
(whether by scheduled maturity, required prepayment, accelera-
tion, demand or otherwise) on any Indebtedness of such Person
other than any of the Obligations, if the aggregate outstanding
amount of all such Indebtedness is $5,000,000 or more, or any
breach, default or event of default shall occur, or any other
event shall occur or condition shall exist, under any instrument,
agreement or indenture pertaining thereto, if the effect thereof
is to accelerate, or permit the holder(s) of such Indebtedness to
accelerate, the maturity of any such Indebtedness; or any such
Indebtedness shall be declared to be due and payable or required
to be prepaid or mandatorily redeemed (other than by a regularly
scheduled required prepayment prior to the stated maturity there-
of); or the holder of any Lien, in any amount, shall commence
foreclosure of such Lien upon property of the Borrower or any of
its Subsidiaries having a book or fair market value in excess of
$1,000,000 with respect to such Person in the aggregate.
(f) Involuntary Bankruptcy; Appointment of
Receiver, Etc. (i) An involuntary case shall be commenced
against the Borrower or any of its Subsidiaries and the petition
shall not be dismissed within sixty (60) days after commencement
of the case, or a court having jurisdiction in the premises shall
enter a decree or order for relief in respect of the Borrower or
any of its Subsidiaries in an involuntary case, under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect; or any other similar relief shall be granted
under any applicable federal, state or foreign law.
(ii) A decree or order of a court having jurisdiction
in the premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar
powers over the Borrower or any of its Subsidiaries or over all
or a substantial part of the property of the Borrower or any of
its Subsidiaries shall be entered; or an interim receiver,
trustee or other custodian of the Borrower or any of its
Subsidiaries or of all or a substantial part of the property of
the Borrower or any of its Subsidiaries shall be appointed; or a
warrant of attachment, execution or similar process against any
substantial part of the property of the Borrower or any of its
Subsidiaries shall be issued and any such event shall not be
stayed, vacated, dismissed, bonded or discharged within sixty
(60) days of entry, appointment or issuance.
(g) Voluntary Bankruptcy; Appointment of Receiver,
Etc. The Borrower or any of its Subsidiaries shall have an order
for relief entered with respect to it or commence a voluntary
case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or shall consent to the entry of
an order for relief in an involuntary case, or to the conversion
of an involuntary case to a voluntary case, under any such law,
or shall consent to the appointment of or taking of possession by
a receiver, trustee or other custodian for all or a substantial
part of its property; the Borrower or any of its Subsidiaries
shall make any assignment for the benefit of creditors or shall
be unable or generally fail, or admit in writing its inability,
to pay its debts as such debts become due; or the Board of
Directors (or any committee thereof) of the Borrower or any of
its Subsidiaries shall adopt any resolution to authorize or
approve any of the foregoing.
(h) Judgments. (i) Enforceable Judgments (other than
an Enforceable Judgment described in the proviso contained in the
definition of Enforceable Judgment) for the payment of money in
an aggregate amount in excess of $2,000,000 shall be rendered
against the Borrower or any of its Subsidiaries and such
Enforceable Judgments shall continue unsatisfied or unstayed for
a period of thirty (30) days or action shall have been commenced
to foreclose on such Enforceable Judgments, or (ii) Enforceable
Judgments described in the proviso contained in the definition of
Enforceable Judgments shall be rendered against the Borrower or
any of its Subsidiaries.
(i) Dissolution. Any order, judgment or decree shall
be entered against the Borrower or any of its Subsidiaries
decreeing its involuntary dissolution or split-up and such order
shall remain undischarged and unstayed for a period in excess of
thirty (30) days; or the Borrower or any of its Subsidiaries
shall otherwise dissolve or cease to exist except as expressly
permitted pursuant to Section 8.08.
(j) Collateral Documents; Failure of Security. For
any reason other than a release of Liens in accordance with the
terms of the Loan Documents or the failure of the Collateral
Agent and the Lenders to take any action available to them to
maintain the perfection of the Liens created in favor of the
Collateral Agent, for the benefit of itself and the Holders of
Secured Obligations, pursuant to this Agreement and the Collat-
eral Documents, any Collateral Document ceases to be in full
force and effect or any Lien intended to be created thereby
ceases to be or is not valid and perfected and such lapse,
invalidity or failure is not corrected within 30 days or the
Borrower or any of its Subsidiaries asserts that any such Lien is
not valid and perfected.
(k) Change of Control. Any Change of Control occurs.
(l) Employee Benefit Related Liabilities. (i) Any
Termination Event occurs which the Administrative Agent believes
could subject the Borrower or any of its Subsidiaries to a
material liability to pay money, or (ii) the plan administrator
of any Plan applies under Section 412(d) of the IRC for a waiver
of the minimum funding standards of Section 412(a) of the IRC and
the Administrative Agent believes that the substantial business
hardship upon which the application for the waiver is based could
subject the Borrower or any of its Subsidiaries to a material
liability to pay money.
(m) Contribution Agreement Default. Any party to the
Contribution Agreement shall terminate or revoke any of its
obligations under the Contribution Agreement or breach any of the
terms of the Contribution Agreement, or the Contribution
Agreement shall otherwise become unenforceable against any
Guarantor for any reason or shall cease to be in full force and
effect.
(n) Subsidiary Guaranty Default. Any Guarantor shall
terminate or revoke any of its obligations under the Subsidiary
Guaranty or breach any of the terms of the Subsidiary Guaranty,
or the Subsidiary Guaranty shall otherwise become unenforceable
against any Guarantor for any reason.
For purposes of this Agreement and each of the other
Loan Documents, an Event of Default shall be deemed "continuing"
until cured or waived in writing in accordance with Section
11.08.
10.02. Rights and Remedies.
(a) Acceleration and Termination of Commitments. Upon
the occurrence and during the continuance of any Event of Default
described in Section 10.01(f) or 10.01(g) with respect to the
Borrower or any of its Subsidiaries, the Commitments shall
automatically and immediately terminate and the unpaid principal
amount of and any and all accrued interest on the Loans, all
Reimbursement Obligations and all other Agreement Obligations
shall automatically become immediately due and payable, with all
additional interest from time to time accrued thereon and without
presentment, demand, or protest or other requirements of any kind
(including, without limitation, valuation and appraisement,
diligence, presentment, notice of intent to demand or accelerate
and of acceleration), all of which are hereby expressly waived by
the Borrower, and the obligation of each Lender to make any Loan
hereunder and of the Issuing Banks to issue any Letter of Credit
shall thereupon terminate; and upon the occurrence and during the
continuance of any other Event of Default, the Administrative
Agent shall at the request, or may with the consent, of the
Requisite Lenders, by written notice to the Borrower, (i) declare
that the Commitments are terminated, whereupon the Commitments
and the obligation of each Lender to make any Loan hereunder and
of the Issuing Banks to issue any Letter of Credit shall
immediately terminate, and (ii) declare the unpaid principal
amount of and any and all accrued and unpaid interest on the
Loans, and all Reimbursement Obligations and all other Agreement
Obligations to be, and the same shall thereupon be, immediately
due and payable with all additional interest from time to time
accrued thereon and (except as expressly provided herein) without
presentment, demand, or protest or other requirements of any kind
(including, without limitation, valuation and appraisement,
diligence, presentment, notice of intent to demand or accelerate
and of acceleration), all of which are hereby expressly waived by
the Borrower.
(b) Deposit for Letters of Credit. In addition, upon
demand by the Administrative Agent, or any of the Issuing Banks
or the Requisite Lenders after the occurrence and during the
continuance of any Event of Default, the Borrower shall deposit
with the Collateral Agent for the benefit of the Issuing Banks
with respect to each Letter of Credit then outstanding which was
issued by any Issuing Bank, cash or Cash Equivalents in an amount
equal to the greatest amount for which such Letters of Credit may
then be drawn. The Borrower grants to the Collateral Agent, for
the benefit of itself and the Holders of Secured Obligations, a
security interest in and right of setoff against any such deposit
or deposits. Pending the application of such deposit to payment
of the Reimbursement Obligations, the Collateral Agent may invest
such deposit in an open account or similar immediately available
savings deposit and all interest accrued thereon shall be held
with such deposit as additional security for the Reimbursement
Obligations. Such deposits shall be held by the Collateral Agent
until the Reimbursement Obligations have been paid in full and
all Letters of Credit have expired or been cancelled.
(c) Rescission. If at any time after acceleration of
the maturity of the Loans, the Borrower shall pay all arrears of
interest and all payments on account of principal of the Loans
and Reimbursement Obligations which shall have become due other-
wise than by acceleration (with interest on principal and, to the
extent permitted by law, on overdue interest, at the rates speci-
fied in this Agreement) and all Events of Default and Potential
Events of Default (other than nonpayment of principal of and
accrued interest on the Loans due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to Sec-
tion 12.07, then by written notice to the Borrower, the Requisite
Lenders may elect, in the sole discretion of such Requisite
Lenders, to rescind and annul the acceleration and its conse-
quences; but such action shall not affect any subsequent Event of
Default or Potential Event of Default or impair any right or
remedy consequent thereon. The provisions of the preceding
sentence are intended merely to bind the Lenders to a decision
which may be made at the election of the Requisite Lenders; they
are not intended to benefit the Borrower and do not give the
Borrower the right to require the Lenders to rescind or annul any
acceleration hereunder, even if the conditions set forth herein
are met.
ARTICLE XI
Administrative Agent and Collateral Agent
11.01. Appointment. (a) Each of the Lenders and the
Issuing Banks hereby designates and appoints Chemical as the
Administrative Agent and Citicorp as the Collateral Agent of such
Lender and such Issuing Bank under this Agreement and the Loan
Documents, and each of the Lenders and Issuing Banks hereby
irrevocably authorizes the Administrative Agent and the
Collateral Agent to take such action on its behalf under the
provisions of this Agreement and the other Loan Documents and to
exercise such powers as are set forth herein or therein, together
with such other powers as are incidental thereto. Each of the
Administrative Agent and the Collateral Agent agrees to act as
such on the express conditions contained in this Article XI.
(b) The provisions of this Article XI are solely for
the benefit of the Administrative Agent, the Collateral Agent,
the Issuing Banks and the Holders of Secured Obligations and the
Borrower shall have no right to rely on or enforce any of the
provisions hereof (other than as expressly set forth in Sec-
tion 11.07 or in Section 11.08). In performing its functions and
duties under this Agreement, the Administrative Agent and the
Collateral Agent shall each act solely as agent for the Issuing
Banks and the Holders of Secured Obligations and neither assumes
or shall be deemed to have assumed any obligation toward or
relationship of agency or trust with or for Borrower or any of
its Affiliates.
11.02. Nature of Duties. The Administrative Agent and
the Collateral Agent shall not have any duties or responsibili-
ties except those expressly set forth in this Agreement or in the
other Loan Documents. The duties of the Administrative Agent and
the Collateral Agent shall be mechanical and administrative in
nature. Neither the Administrative Agent nor the Collateral
Agent shall have by reason of this Agreement a fiduciary
relationship in respect of any Holder of Secured Obligations or
any Issuing Bank. Nothing in this Agreement or any of the other
Loan Documents, expressed or implied, is intended to or shall be
construed to impose upon the Administrative Agent or the
Collateral Agent any obligations in respect of this Agreement or
any of the other Loan Documents except as expressly set forth
herein or therein. Each Holder of Secured Obligations and each
Issuing Bank shall make its own independent investigation of the
financial condition and affairs of the Borrower and its
Subsidiaries in connection with the making and the continuance of
the Loans hereunder, the issuance of Letters of Credit and the
entering into any Eligible Hedging Contract and shall make its
own appraisal of the creditworthiness of the Borrower and its
Subsidiaries, and neither the Administrative Agent nor the
Collateral Agent shall have any duty or responsibility, either
initially or on a continuing basis, to provide any Holder of
Secured Obligations or any Issuing Bank with any credit or other
information with respect thereto, whether coming into its
possession before the Effective Date or at any time or times
thereafter. Each Lender acknowledges that neither the
Administrative Agent nor the Collateral Agent nor any other
Lender nor counsel to any of the foregoing is providing any
assurances, or shall have any responsibility, with respect to the
ownership of the Property or the absence of any prior Liens or
defects of title, or the legality, sufficiency or effect of any
mortgage, certificate or notice, or any other document, or the
validity, creation, perfection or priority of any Lien, or as to
any decision to request, take, defer, omit or release any Collat-
eral or to investigate or not to investigate any of those
matters, and each Lender agrees to look solely to its rights as
one of the Lenders with respect to any of the foregoing. If the
Administrative Agent or the Collateral Agent seeks the consent or
approval of the Requisite Lenders to the taking or refraining
from taking any action hereunder, the Administrative Agent or the
Collateral Agent, as applicable, shall send notice thereof to
each Lender. The Administrative Agent or the Collateral Agent,
as applicable, shall promptly notify each Lender at any time that
the Requisite Lenders or, where expressly required, all of the
Lenders, have instructed the Administrative Agent or the
Collateral Agent, as applicable, to act or refrain from acting
pursuant hereto.
11.03. Rights, Exculpation, Etc. Neither the
Administrative Agent nor the Collateral Agent nor any of their
Affiliates nor any of their officers, directors, employees,
agents, attorneys or consultants shall be liable to any Holder of
Secured Obligations or any Issuing Bank for any action taken or
omitted by it or such Person hereunder or under any of the other
Loan Documents, or in connection herewith or therewith, except
that (i) the Administrative Agent and the Collateral Agent shall
be obligated on the terms set forth herein for performance of
their respective express obligations hereunder, and (ii) no
Person shall be relieved of any liability imposed by law for its
gross negligence or willful misconduct (as determined by the
final judgment of a court of competent jurisdiction). Neither
the Administrative Agent nor the Collateral Agent shall be
responsible to any Holder of Secured Obligations or any Issuing
Bank for any recitals, statements, representations or warranties
herein or for the execution, effectiveness, genuineness,
validity, enforceability, collectibility, or sufficiency of this
Agreement, any of the Collateral Documents or any of the other
Loan Documents, or any of the transactions contemplated hereby
and thereby, or of any of the Transaction Documents or any of the
transactions contemplated thereby, or for the financial condition
of the Borrower or any of its Subsidiaries. Neither the
Administrative Agent nor the Collateral Agent shall be required
to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this
Agreement or any of the other Loan Documents or the financial
condition of the Borrower or any of its Subsidiaries or the
existence or possible existence of any Potential Event of Default
or Event of Default. The Administrative Agent and the Collateral
Agent may at any time request instructions from the Lenders with
respect to any actions or approvals which by the terms of this
Agreement or of any of the other Loan Documents the
Administrative Agent or the Collateral Agent, as applicable, is
permitted or required to take or to grant, and if such instruc-
tions are promptly requested, the Administrative Agent or the
Collateral Agent, as applicable, shall be absolutely entitled to
refrain from taking any action or to withhold any approval and
shall not be under any liability whatsoever to any Person for
refraining from any action or withholding any approval under any
of the Loan Documents until it shall have received such
instructions from the Requisite Lenders or, where expressly
required, the Supermajority Lenders or all of the Lenders. With-
out limiting the foregoing, no Holder of Secured Obligations or
Issuing Bank shall have any right of action whatsoever against
the Administrative Agent or the Collateral Agent, as applicable,
as a result of the Administrative Agent or the Collateral Agent,
as applicable, acting or refraining from acting under this Agree-
ment, the Collateral Documents or any of the other Loan Documents
in accordance with the instructions of the Requisite Lenders or,
where expressly required, the Supermajority Lenders or all of the
Lenders.
11.04. Reliance. The Administrative Agent and the
Collateral Agent shall be entitled to rely upon any written
notices, statements, certificates, orders or other documents or
any telephone message believed by it in good faith to be genuine
and correct and to have been signed, sent or made by the proper
Person, and with respect to all matters pertaining to this
Agreement, the Collateral Documents or any of the other Loan
Documents and its duties hereunder or thereunder, upon advice of
legal counsel (including counsel for the Borrower), independent
public accountants and other experts selected by it in good
faith.
11.05. Indemnification. To the extent that the
Administrative Agent or the Collateral Agent, as applicable, is
not reimbursed and indemnified by the Borrower or the Borrower
fails upon demand by the Administrative Agent or the Collateral
Agent, as applicable, to perform its obligations to reimburse or
indemnify the Administrative Agent or the Collateral Agent, as
applicable, the Lenders will reimburse and indemnify the
Administrative Agent or the Collateral Agent, as applicable, for
and against any and all liabilities, obligations, losses, damag-
es, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against the Administrative
Agent or the Collateral Agent, as applicable, in any way relating
to or arising out of this Agreement, the Collateral Documents or
any of the other Transaction Documents or any action taken or
omitted by the Administrative Agent or the Collateral Agent, as
applicable, under this Agreement, the Collateral Documents or any
of the other Transaction Documents, in proportion to each
Lender's Pro Rata Share; provided that no Lender shall be liable
for any portion of such liabilities, obligations, losses, dam-
ages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the gross negligence or willful
misconduct of the Administrative Agent or the Collateral Agent,
as applicable, as determined by the final judgment of a court of
competent jurisdiction. The obligations of the Lenders under
this Section 11.05 shall survive the payment in full of the Loans
and Reimbursement Obligations and the termination of this Agree-
ment.
11.06. The Administrative Agent and the Collateral
Agent Individually. With respect to its Pro Rata Share hereunder
and the Loans made by it, the Administrative Agent shall have and
may exercise the same rights and powers hereunder and is subject
to the same obligations and liabilities as and to the extent set
forth herein for any other Lender. The terms "Lenders" or
"Requisite Lenders" or any similar terms shall, unless the
context clearly otherwise indicates, include the Administrative
Agent in its individual capacity as a Lender or one of the
Requisite Lenders. The Administrative Agent and the Collateral
Agent each may accept deposits from, lend money to, and generally
engage in any kind of banking, trust or other business with the
Borrower as if it were not acting as Administrative Agent or
Collateral Agent, respectively, pursuant hereto.
11.07. Successor Administrative Agent or Collateral
Agent; Resignation of Administrative Agent or Collateral Agent.
(a) The Administrative Agent or the Collateral Agent may resign
from the performance of its functions and duties hereunder at any
time by giving at least thirty (30) days prior written notice to
the Lenders and the Borrower. In the event that the
Administrative Agent or the Collateral Agent gives notice of its
desire to resign from the performance of its functions and duties
hereunder, any such resignation shall take effect only upon the
acceptance by a successor Administrative Agent or Collateral
Agent of appointment pursuant to clauses (b) and (c) below.
(b) The Requisite Lenders shall appoint a successor
Administrative Agent or Collateral Agent who shall be reasonably
satisfactory to the Borrower provided no such approval of the
Borrower shall be required after the occurrence and during the
continuance of an Event of Default.
(c) If a successor Administrative Agent or Collateral
Agent shall not have been so appointed within said thirty (30)
day period, the retiring Administrative Agent or Collateral
Agent, with the consent of the Borrower (which may not be
withheld unreasonably), shall then appoint a successor
Administrative Agent or Collateral Agent who shall serve as such
until such time, if any, as the Requisite Lenders, with the
consent of the Borrower (which may not be withheld unreasonably),
appoint a successor as provided above. No consent of the
Borrower shall be required after the occurrence and during the
continuance of an Event of Default.
(d) Upon the appointment of a successor Administrative
Agent, the term "Administrative Agent" shall, for all purposes of
this Agreement, thereafter include such successor, except that
the retiring Administrative Agent shall reserve all rights as to
Obligations accrued or due to it, in its capacity as such, at the
time of such succession and all rights (whenever arising) under
Section 12.04.
(e) Upon the appointment of a successor Collateral
Agent, the term "Collateral Agent" shall, for all purposes of
this Agreement, thereafter include such successor, except that
the retiring Collateral Agent shall reserve all rights as to
Obligations accrued or due to it, in its capacity as such, at the
time of such succession and all rights (whenever arising) under
Section 12.04.
(f) Notwithstanding anything in this Section 11.07 to
the contrary, no Person shall serve as an Administrative Agent
unless such Person is a Lender.
11.08. Collateral Matters. (a) Each of the Lenders
and the Issuing Banks authorizes and directs the Administrative
Agent and the Collateral Agent to enter into the Loan Documents
relating to the Collateral for the benefit of itself and the
Holders of Secured Obligations. Each of the Lenders and the
Issuing Banks agrees that any action taken by the Administrative
Agent or the Collateral Agent or the Requisite Lenders (or, where
required by the express terms of this Agreement or any other Loan
Document, a greater proportion of the Lenders) in accordance with
the provisions of this Agreement or the other Loan Documents, and
the exercise by the Administrative Agent or the Collateral Agent
or the Requisite Lenders (or, where so required, such greater
proportion) of the powers set forth herein or therein, together
with such other powers as are reasonably incidental thereto,
shall be authorized and binding upon all of the Lenders and the
Issuing Banks. Without limiting the generality of the foregoing,
the Administrative Agent shall have the sole and exclusive right
and authority to (i) act as the disbursing and collecting agent
for the Lenders and the Issuing Banks with respect to all
payments and collections arising in connection with this
Agreement and the other Loan Documents relating to the Loans or
Collateral; and (ii) execute and deliver each Loan Document
relating to the Collateral and accept delivery of each such
agreement delivered by the Borrower or any of its Subsidiaries.
Without limiting the generality of the foregoing, the Collateral
Agent shall have the sole and exclusive right and authority to
(i) act as collateral agent for the Lenders and the Issuing Banks
for purposes of the perfection of all security interests and
Liens created by such agreements and all other purposes stated
therein, provided, however, the Administrative Agent hereby
appoints, authorizes and directs the Lenders and the Issuing
Banks to act as collateral sub-agent for the Administrative Agent
and the Issuing Banks and the Lenders for purposes of the perfec-
tion of all security interests and Liens with respect to the
Borrower's and its Subsidiaries' respective deposit accounts
maintained with, and cash and Cash Equivalents held by, such
Lender or the Issuing Banks; (ii) manage, supervise and otherwise
deal with the Collateral in accordance with the terms of this
Agreement and the other Loan Documents; (iii) take such action as
is necessary or desirable to maintain the perfection and priority
of the security interests and Liens created or purported to be
created by the Loan Documents; and (iv) except as may be other-
wise specifically restricted by the terms of this Agreement or
any other Loan Document, exercise all remedies given to the
Administrative Agent, the Collateral Agent, the Lenders or the
Issuing Banks with respect to the Collateral under the Loan
Documents relating thereto, under applicable law or otherwise.
(b) The Holders of Secured Obligations hereby
irrevocably authorize the Collateral Agent, at the option and in
the discretion of the Collateral Agent, to release any Lien
granted to or held by the Collateral Agent upon any Collateral
(i) upon termination of the Commitments and payment and satisfac-
tion of all Loans, Reimbursement Obligations, other Letter of
Credit Obligations (whether or not due) and all other Agreement
Obligations which have matured and which the Administrative Agent
has been notified in writing are then due and payable; or (ii)
constituting property being sold or disposed of if Borrower
certifies to the Administrative Agent and the Collateral Agent
that the sale or disposition is made in compliance with
Section 8.02 (and the Administrative Agent and the Collateral
Agent may rely conclusively on any such certificate, without
further inquiry); or (iii) constituting property in which neither
the Borrower nor any of its Subsidiaries owned any interest at
the time the Lien was granted or at any time thereafter; or
(iv) if approved or consented to by the Requisite Lenders (or,
where so required, the Supermajority Lenders or all of the
Lenders). Upon request by the Collateral Agent at any time, the
Lenders will confirm in writing the Collateral Agent's authority
to release particular types or items of Collateral pursuant to
this Section 11.08(b).
(c) Without in any manner limiting the Collateral
Agent's authority to act without any specific or further authori-
zation or consent by the Requisite Lenders (as set forth in
Section 11.08(b)), each Lender agrees to confirm in writing, upon
request by the Borrower, the authority to release Collateral
conferred upon the Collateral Agent under clauses (i) through
(iv) of Section 11.08(b). So long as no Event of Default is then
continuing, upon receipt by the Administrative Agent of the net
cash proceeds of any sale and transfer of Collateral which is
expressly permitted pursuant to the terms of this Agreement, and
upon at least five (5) Business Days' prior written request by
Borrower, the Collateral Agent shall (and is hereby irrevocably
authorized by the Holders of Secured Obligations to) execute such
documents as may be necessary to evidence the release of the
Liens granted to the Collateral Agent for the benefit of the
Holders of Secured Obligations herein or pursuant hereto upon
such Collateral; provided, that (i) the Collateral Agent shall
not be required to execute any such document on terms which, in
the Collateral Agent's opinion, would expose the Collateral Agent
to liability or create any obligation or entail any consequence
other than the release of such Liens without recourse or
warranty, and (ii) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or
obligations of Borrower in respect of) all interests retained by
the Borrower, including, without limitation, the proceeds of any
sale, all of which shall continue to constitute part of the
Collateral.
(d) The benefit of the Collateral Documents and of the
provisions of this Agreement relating to the Collateral shall
extend to and be available in respect of any Obligations
("Related Obligations") which arise under any Eligible Hedging
Contracts or which are otherwise owed to Persons entitled to
indemnification pursuant to Section 12.04; provided that (i) the
Related Obligations shall be entitled to the benefit of the
Collateral to the extent and with the priority expressly set
forth in this Agreement and the Collateral Documents, and to such
extent the Collateral Agent shall hold, and have the right and
power to act with respect to, the Collateral on behalf of and as
agent for the holders of the Related Obligations; but the
Administrative Agent and the Collateral Agent are otherwise
acting solely as agents for the Lenders and the Issuing Banks and
shall have no separate fiduciary duty, duty of loyalty, duty of
care, duty of disclosure or other obligation whatsoever to any
holder of Related Obligations; and (ii) all matters, acts and
omissions relating in any manner to the Collateral, or the
omission, creation, perfection, priority, abandonment or release
of any Lien, shall be governed solely by the provisions of this
Agreement and the Collateral Documents, and no separate Lien,
right, power or remedy shall arise or exist in favor of any
Holder of Secured Obligations under any separate instrument or
agreement or in respect of any Related Obligations; and
(iii) each Holder of Secured Obligations shall be bound by all
actions taken or omitted, in accordance with the provisions of
this Agreement and the Collateral Documents, by the
Administrative Agent, the Collateral Agent or the Requisite
Lenders or, where expressly required, the Supermajority Lenders
or all of the Lenders, each of whom shall be entitled to act at
its sole discretion and exclusively in its own interest given its
own Commitments and its own interest in the Loans, Reimbursement
Obligations, Letter of Credit Obligations and its other Agreement
Obligations, without any duty or liability to any other Holder of
Secured Obligations or as to any Related Obligations and without
regard to whether any Related Obligations remain outstanding or
are deprived of the benefit of the Collateral or become unsecured
or are otherwise affected or put in jeopardy thereby; and (iv) no
holder of Related Obligations and no other Holder of Secured
Obligations (except the Administrative Agent and the Lenders, to
the extent set forth in this Agreement) shall have any right to
be notified of, or to direct, require or be heard with respect
to, any action taken or omitted in respect of the Collateral or
under this Agreement or the Collateral Documents; and (v) no
holder of any Related Obligations shall exercise any right of
setoff, banker's lien or similar right.
11.09. Relations Among Lenders.
(a) Each Lender agrees that it will not take any ac-
tion, nor institute any actions or proceedings, against the
Borrower or any other obligor hereunder or with respect to any
Collateral or Loan Document, without the prior written consent of
the Requisite Lenders or, as may be provided in this Agreement or
the other Loan Documents, at the direction of the Administrative
Agent.
(b) The Lenders are not partners or co-venturers, and
no Lender shall be liable for the acts or omissions of, or
(except as otherwise set forth herein in case of the
Administrative Agent or the Collateral Agent, as applicable)
authorized to act for, any other Lender.
ARTICLE XII
Miscellaneous
12.01. Survival of Warranties and Agreements. All
agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement and the
other Loan Documents and the making of the Loans hereunder.
12.02. Assignments and Participations.
(a) At any time after the Effective Date, each Lender
may assign to one or more banks or financial institutions all or
a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its
Commitments, Loans, participations in the Letters of Credit and
its obligations to acquire such participations) in conformity
with the following provisions:
(i) each such assignment shall be of a constant, and
not a varying, percentage of the assigning Lender's rights and
obligations under this Agreement with respect to such Lender's
Revolving Credit Commitment, Revolving Credit Loans, Term Loan,
Letter of Credit Obligations and related interests hereunder
(provided, however, any assignment by an Issuing Bank shall not
include an assignment of its obligation to issue Letters of
Credit);
(ii) unless the Administrative Agent and the Borrower
otherwise consent, the aggregate amount of the Term Loan and
Revolving Credit Commitment of the assigning Lender being
assigned pursuant to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than $5,000,000 or, if
less, the full amount of the assigning Lender's Term Loan and
Revolving Credit Commitment (provided that assignments between
Lenders shall have no minimum amount and assignments after the
occurrence and during the continuance of an Event of Default
shall not require the Borrower's consent regardless of the size
of such assignment);
(iii) the Administrative Agent and, in the case of the
assignment of Letter of Credit Obligations, the Issuing Banks
shall each consent (which consent shall not unreasonably be
withheld) to each such assignment and the parties to each such
assignment shall execute and deliver to the Administrative Agent
an Assignment and Acceptance, together with a processing and
recordation fee of $3,000; provided, that such consent of the
Administrative Agent shall not be required for any assignment
made by a Lender to an Affiliate of such Lender; and
(iv) With respect to any assignment made at a time
when no Event of Default exists, the Borrower shall have
consented to such assignment, which consent shall not
unreasonably be withheld or delayed; provided, that such consent
of the Borrower shall not be required for any assignment made by
a Lender to an Affiliate of such Lender.
Upon such execution, delivery, approval, acceptance and
recording, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least
five (5) Business Days after the execution date thereof, (x) the
assignee thereunder shall be a party hereto and, to the extent
that rights and obligations hereunder have been assigned or
negotiated to it pursuant to such Assignment and Acceptance, have
the rights and obligations of a Lender hereunder (including, in
respect of the Collateral, all the rights and obligations of a
Holder of Secured Obligations, as fully as if such assignee had
been named as a Lender in accordance with the terms of this
Agreement) and (y) the Lender assignor thereunder shall, to the
extent that rights and obligations hereunder have been assigned
or negotiated by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under
this Agreement and, in the case of an Assignment and Acceptance
covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall
cease to be a party hereto but shall continue to be entitled to
the benefits of Sections 2.08, 2.09, 2.10, 12.03 and 12.04, as
well as to any fees accrued for its account hereunder and not yet
paid.
(b) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the assignee
thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) the assignment made under such
Assignment and Acceptance is made without recourse and, other
than as provided in such Assignment and Acceptance, such
assigning Lender makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or
any other Loan Document or any other document, instrument or
agreement executed or delivered in connection herewith or
therewith or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other
Transaction Document or any other instrument or document
furnished pursuant hereto or thereto; (ii) such assigning Lender
makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower or any of
its Subsidiaries or the performance or observance by the Borrower
or any of its Subsidiaries of any of its obligations under any
Transaction Document or any other instrument or document fur-
nished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the
financial statements most recently delivered pursuant to
Article VI and such other Loan Documents and other documents and
information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Accept-
ance; (iv) such assignee will, independently and without reliance
upon the Administrative Agent, the Collateral Agent, the Issuing
Banks, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee
appoints and authorizes the Administrative Agent and the
Collateral Agent, respectively, to take such action as an
Administrative Agent and the Collateral Agent, respectively, on
its behalf and to exercise such powers under this Agreement and
the other Loan Documents as are delegated to them by the terms
hereof and thereof, together with such powers as are reasonably
incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations
which by the terms of this Agreement are required to be performed
by it as a Lender.
(c) The Administrative Agent shall maintain at its
address referred to on Schedule A a copy of each Assignment and
Acceptance delivered to and accepted by it and shall record in
the Administrative Agent's Loan Account the names and addresses
of each Lender and the Commitment of, and principal amount of the
Loans owing to, such Lender from time to time. The Borrower, the
Administrative Agent, the Collateral Agent and the Lenders may
treat each Person whose name is recorded in the Loan Account as a
Lender hereunder for all purposes of this Agreement.
(d) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and the assignee, the
Administrative Agent shall, if such Assignment and Acceptance has
been properly completed and is in substantially the form of
Exhibit 1 and if the conditions for the assignment referred to in
the Assignment and Acceptance and set forth in Section 12.02(a)
have been met, (i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the
Administrative Agent's Loan Account and (iii) give prompt notice
thereof to the Borrower.
(e) Each Lender may sell participations to one or more
banks or other entities as to all or a portion of its rights and
obligations under this Agreement (including, without limitation,
all or a portion of its Commitments and Loans, participations in
the Letters of Credit and its obligations to acquire such
participations); provided, that (i) notice thereof is given to
the Borrower and the Administrative Agent, (ii) such Lender's
obligations under this Agreement (including, without limitation,
its Commitments to the Borrower hereunder) shall remain
unchanged, (iii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations,
(iv) the participating banks or other entities shall be entitled
to the benefit of the cost protection provisions contained in
Sections 2.03(f), 2.08, 2.09 and 2.10 to the same extent as if
they were Lenders; provided, however, that no such participating
bank or entity shall be entitled to receive any greater amount
pursuant to such Sections than the Lender from which it purchased
its participation would have been entitled to receive in respect
of the amount of the participation transferred by such Lender to
such participating bank or entity had no transfer occurred, (v)
the Borrower, the Administrative Agent, the Collateral Agent, the
Issuing Banks and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and with regard to
any and all payments to be made under this Agreement, and
(vi) the holder of any such participation shall not be entitled
to voting rights under this Agreement; provided, that the
participation agreement between a Lender and its participants may
provide that such Lender will obtain the approval of such
participant whose interest would be affected thereby prior to any
amendment or waiver of any provisions of this Agreement which
would (A) extend the Revolving Credit Termination Date (except
pursuant to Section 2.02(g)), the Term Loan Termination Date, or
the time of payment of interest or fees with respect to the Loans
or Letter of Credit Obligations, (B) reduce the interest rate or
any fees hereunder, or the principal amount of the Loans or the
Letter of Credit Obligations, (C) increase the aggregate amount
of any of the Commitments or the Loans of the Lender granting the
participation, or increase such Lender's Pro Rata Share, (D)
release all or substantially all of the Collateral, or (E)
release the Subsidiary Guaranty (other than in connection with
the sale of any Subsidiary of the Borrower, or all or
substantially all of the assets of such Subsidiary, permitted by
Section 8.02(a)).
(f) Upon the acceptance by the Administrative Agent of
any Assignment and Acceptance, the parties to such Assignment and
Acceptance may at any time request that new Notes be issued to
the Lender assignor and the Lender assignee by (i) providing
written notice of such request to the Administrative Agent and
the Borrower and (ii) delivering to the Borrower such assigning
Lender's Notes for cancellation and substitution. Promptly
following receipt by the Borrower of any such notice, and
verification from the Administrative Agent that the applicable
Assignment and Acceptance shall have been accepted by the
Administrative Agent, the Borrower forthwith shall cause to be
executed, and shall deliver to the Lender assignee, new Notes to
the order of the assignee and, if applicable, replacement Notes
to the order of the Lender assignor, and such Notes shall equal
the aggregate principal amount of such assigning Lender's Notes
issued by the Borrower immediately prior to the acceptance by the
Administrative Agent of the applicable Assignment and Acceptance.
The Borrower shall immediately upon delivery of such new Note(s),
cancel the original Notes delivered by the Lender assignor to the
Borrower.
(g) Notwithstanding anything herein to the contrary,
each Lender may assign all or any portion of its rights under
this Agreement as collateral security to the Federal Reserve Bank
or any Governmental Authority succeeding to its functions.
12.03. Expenses.
(a) Generally. Whether or not any Funding Date shall
have occurred, Borrower agrees upon demand to pay, or reimburse
the Administrative Agent and the Collateral Agent for all of
their and any of their Affiliates' out-of-pocket costs and
expenses of every type and nature (including, without limitation,
the reasonable fees, expenses and disbursements of attorneys and
legal assistants, auditors, accountants, appraisers, printers,
insurance and environmental advisers, and other consultants re-
tained by the Administrative Agent or the Collateral Agent, and
other travel, search and filing fees and expenses and all fees,
taxes (except income and franchise taxes), assessments and duties
incurred by any of them) incurred by the Administrative Agent or
the Collateral Agent or their Affiliates in connection with (i)
the negotiation, preparation and execution of this Agreement and
any amendments or waivers thereto (including, without limitation,
the satisfaction or attempted satisfaction of any of the
conditions set forth in Article IV), the Collateral Documents and
the other Transaction Documents or any amendment or waiver
thereto and the making of the Loans hereunder; (ii) the creation,
perfection or protection of the Collateral Agent's Liens in the
Collateral for the benefit of the Holders of Secured Obligations
(including, without limitation, any fees and expenses for title
and lien searches, filing and recording fees and taxes, trustee's
fees, duplication costs and corporate search fees); (iii)
reasonable fees, expenses and disbursements of the Administrative
Agent's and the Collateral Agent's legal counsel in connection
with the administration of this Agreement, the Transaction
Documents, the Loans and the Collateral; and (iv) the protection,
collection or enforcement of any of the Obligations or the
Collateral. In addition, the Borrower shall pay, or reimburse
the Administrative Agent, the Collateral Agent, the Issuing Banks
and the Lenders for, all out-of-pocket costs and expenses,
including, without limitation, reasonable attorneys' and legal
assistants' fees, expenses and disbursements incurred by the
Administrative Agent, the Collateral Agent, any Issuing Bank or
any Lender prior to the occurrence of an Event of Default in
commencing, defending or intervening in any litigation or in
filing a petition, complaint, answer, motion or other pleading in
any legal proceeding relating to the Borrower or any of its
Subsidiaries and arising out of or in connection with the
Transaction Documents.
(b) After Default. The Borrower further agrees to
pay, or reimburse the Administrative Agent, the Collateral Agent,
the Issuing Banks and the Lenders for all out-of-pocket costs and
expenses, including, without limitation, reasonable attorneys'
and legal assistants' fees, expenses and disbursements (including
allocated costs of internal counsel and costs of settlement)
incurred by the Administrative Agent, the Collateral Agent, any
Issuing Bank or any Lender after the occurrence of an Event of
Default (i) in enforcing any of the Obligations or in foreclosing
against the Collateral or exercising or enforcing any other right
or remedy available by reason of such Event of Default; (ii) in
connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a
"work-out" or in any insolvency or bankruptcy proceeding; (iii)
in commencing, defending or intervening in any litigation or in
filing a petition, complaint, answer, motion or other pleading in
any legal proceeding relating to the Borrower or any of its
Subsidiaries and related to or arising out of the transactions
contemplated hereby or by any of the Transaction Documents; (iv)
in taking any other action in or with respect to any suit or
proceeding (whether in bankruptcy or otherwise); (v) in
protecting, preserving, collecting, leasing, selling, taking
possession of, or liquidating any of the Collateral; or (vi) in
attempting to enforce or enforcing any security interest in any
of the Collateral or any other rights under the Collateral
Documents. Any payments made by the Borrower or received by the
Administrative Agent or the Collateral Agent and applied as
reimbursements for costs and expenses under this Section 12.03(b)
shall be apportioned among the Administrative Agent, the
Collateral Agent, the Issuing Bank and the Lenders in the order
of priority set forth in Section 2.06.
12.04. Indemnification and Waiver. The Borrower
agrees: (a) to defend, protect, indemnify, and hold harmless the
Administrative Agent, the Collateral Agent, the Issuing Banks and
each and all of the Lenders, each of their respective Affiliates
and each of the respective officers, directors, employees and
agents of each of the foregoing (collectively called the
"Indemnitees") from and against any and all liabilities, obliga-
tions, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the reasonable fees
and disbursements of counsel for such Indemnitees in connection
with any investigative, administrative or judicial proceeding,
whether or not such Indemnitees shall be designated a party
thereto), imposed on, incurred by, or asserted against such
Indemnitees (whether direct, indirect or consequential and
whether based on any federal or state laws or other statutory
regulations, including, without limitation, securities and
commercial laws and regulations, under common law or at equitable
cause, or on contract or otherwise, including any liabilities and
costs under federal, state or local environmental, health or
safety laws, regulations, or common law principles, arising from
or in connection with the past, present or future operations of
the Borrower or any of its Subsidiaries, or their respective
predecessors in interest, or the past, present or future
environmental condition of the Property of the Borrower or any of
its Subsidiaries, the presence of asbestos-containing materials
at any such Property, or the Release or threatened Release of any
Contaminant into the environment from any such Property) in any
manner relating to or arising out of this Agreement, the
Collateral Documents or any of the other Transaction Documents,
the capitalization of the Borrower, the Lenders' Commitments, the
making of, management of and participation in the Loans or the
Letters of Credit, or the use or intended use of the Letters of
Credit and the proceeds of the Loans hereunder (collectively, the
"Indemnified Matters"); provided, that the Borrower shall have no
obligation to an Indemnitee hereunder with respect to (i) matters
for which such Indemnitee has been compensated pursuant to or for
which an exemption is provided in Section 2.03(f) or 2.08(d) or
any other provision of this Agreement and (ii) Indemnified
Matters caused by or resulting from the gross negligence or
willful misconduct of that Indemnitee, as determined by a final
judgment of a court of competent jurisdiction; and (b) to assert
no claim against the Administrative Agent, the Collateral Agent,
any of the Lenders, any of the Issuing Banks or any other
Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages, all of which claims, if any,
are hereby waived. To the extent that the undertaking to
indemnify, pay and hold harmless set forth in the preceding
clause (a) may be unenforceable because it is violative of any
law or public policy, the Borrower shall contribute the maximum
portion which it is permitted to pay and satisfy under applicable
law, to the payment and satisfaction of all Indemnified Matters
incurred by the Indemnitees. Without prejudice to the survival
of any other agreement of the Borrower hereunder, the agreements
and obligations of the Borrower contained in this Section 12.04
shall survive the payment in full of principal and interest
hereunder, the termination of the Letters of Credit and the
termination of this Agreement.
12.05. Limitation of Liability. No claim may be made
by the Borrower, any Lender or other Person against the
Administrative Agent, the Collateral Agent, any Issuing Bank, or
any Lender or the Affiliates, directors, officers, employees, or
agents of any of them for any special, indirect, consequential or
punitive damages in respect of any claim for breach of contract
or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement or any other
Transaction Document, or any act, omission or event occurring in
connection therewith, and the Borrower and each Lender hereby
waives, releases and agrees not to sue upon any claim for any
such damages, whether or not accrued and whether or not known or
suspected to exist in its favor.
12.06. Ratable Sharing; Defaulting Lender; Setoff.
(a) Subject to Sections 2.06 and 12.06(b), the Lenders
agree among themselves that (i) with respect to all amounts
received by them which are applicable to the payment of the
Agreement Obligations (excluding amounts payable under this
Agreement which are determined on a non-pro-rata basis,
including, without limitation, amounts payable under Sections
2.03(f), 2.04(b), 2.08(d), 2.09, 2.10, 2.13, 12.03 and 12.04),
equitable adjustment will be made so that, in effect, all such
amounts will be shared among them ratably in accordance with
their Pro Rata Shares, whether received by voluntary payment, by
the exercise of the right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any or all
of the Agreement Obligations (excluding amounts payable under
this Agreement which are determined on a non-pro-rata basis,
including, without limitation, amounts payable under Sections
2.02(c), 2.03(f), 2.04(b), 2.08(d), 2.09, 2.10, 2.13, 12.03 and
12.04) or the Collateral, (ii) if any of them shall by voluntary
payment or by the exercise of any right of counterclaim, setoff,
banker's lien or otherwise, receive payment of a proportion of
the aggregate amount of the Agreement Obligations held by it
which is greater than its appropriate pro rata share of the
payments on account of the Agreement Obligations (excluding the
fees described or referred to in Section 2.04), the one receiving
such excess payment shall purchase, without recourse or warranty,
an undivided interest and participation (which it shall be deemed
to have been done simultaneously upon the receipt of such
payment) in such Agreement Obligations owed to the others so that
all such recoveries with respect to such Agreement Obligations
shall be applied ratably in accordance with their Pro Rata
Shares; provided, that if all or part of such excess payment
received by the purchasing party is thereafter recovered from it,
those purchases shall be rescinded and the purchase prices paid
for such participations shall be returned to that party to the
extent necessary to adjust for such recovery, but without
interest except to the extent the purchasing party is required to
pay interest in connection with such recovery. The Borrower
agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 12.06(a) may, to the fullest
extent permitted by law, exercise all its rights of payment with
respect to such participation as fully as if such Lender were the
direct creditor of the Borrower in the amount of such partici-
pation.
(b) In the event that any Lender fails to fund its Pro
Rata Share of any Borrowing requested or deemed requested by the
Borrower which such Lender is obligated to fund under the terms
of this Agreement (the funded portion of such Borrowing being
hereinafter referred to as a "Non Pro Rata Loan"), until the
earlier of such Lender's cure of such failure and the termination
of the Commitments, the proceeds of all amounts thereafter repaid
to the Administrative Agent by the Borrower and otherwise
required to be applied to such Lender's share of all other
Obligations pursuant to the terms of this Agreement shall be
advanced to the Borrower by the Administrative Agent on behalf of
such Lender to cure, in full or in part, such failure by such
Lender, but shall nevertheless be deemed to have been paid to
such Lender in satisfaction of such other Obligations.
Notwithstanding anything in this Agreement to the contrary:
(i) the foregoing provisions of this Section
12.06(b) shall apply only with respect to the proceeds
of payments of Obligations and shall not affect the
conversion or continuation of Loans pursuant to Section
2.03(c);
(ii) any such Lender shall be deemed to have
cured its failure to fund its Pro Rata Share of any
Borrowing at such time as an amount equal to such
Lender's original Pro Rata Share of the requested
principal portion of such Borrowing is fully funded to
the Borrower, whether made by such Lender itself or by
operation of the terms of this Section 12.06(b), and
whether or not the Non Pro Rata Loan with respect
thereto has been repaid, converted or continued;
(iii) amounts advanced to the Borrower to cure,
in full or in part, any such Lender's failure to fund
its Pro Rata Share of any Borrowing ("Cure Loans")
shall bear interest at the rate applicable to Base Rate
Loans under Section 2.03 in effect from time to time,
and for all other purposes of this Agreement shall be
treated as if they were Base Rate Loans;
(iv) regardless of whether or not an Event of
Default has occurred or is continuing, and
notwithstanding the instructions of the Borrower as to
its desired application, all repayments of principal
which, in accordance with the terms of Section 2.06,
would be applied to the outstanding Base Rate Loans
shall be applied first, ratably to all Base Rate Loans
constituting Non Pro Rata Loans, second, ratably to
Base Rate Loans other than those constituting Non Pro
Rata Loans or Cure Loans and, third, ratably to Base
Rate Loans constituting Cure Loans;
(v) for so long as and until the earlier of any
such Lender's cure of the failure to fund its Pro Rata
Share of any Borrowing and the termination of the
Commitments, the term "Requisite Lenders" for purposes
of this Agreement shall mean Lenders (excluding all
Lenders whose failure to fund their respective Pro Rata
Shares of such Borrowing have not been so cured) whose
Pro Rata Shares represent more than fifty percent (50%)
of the aggregate Pro Rata Shares of such Lenders, and
the term "Supermajority Lenders" for purposes of this
Agreement shall mean Lenders (excluding all Lenders
whose failure to fund their respective Pro Rata Shares
of such Borrowing have not been so cured) whose Pro
Rata Shares represent at least sixty-six and two-thirds
percent (66 2/3%) of the aggregate Pro Rata Shares of
such Lenders; and
(vi) for so long as and until any such Lender's
failure to fund its Pro Rata Share of any Borrowing is
cured in accordance with Section 12.06(b)(ii), (A) such
Lender shall not be entitled to any Commitment Fees
with respect to its Revolving Credit Commitment and (B)
the Commitment Fee shall accrue in favor of the Lenders
which have funded their respective Pro Rata Shares of
such requested Borrowing, shall be allocated among such
performing Lenders ratably based upon their relative
Revolving Credit Commitments, and shall be calculated
based upon the average amount by which the aggregate
Revolving Credit Commitments of such performing Lenders
exceeds the sum of (I) the outstanding principal amount
of the Loans owing to such performing Lenders, plus
(II) the outstanding Reimbursement Obligations owing to
such performing Lenders, plus, (III) the aggregate
participation interests of such performing Lenders
arising pursuant to Section 3.06 with respect to
undrawn and outstanding Letters of Credit.
(c) In addition to any Liens granted to the Collateral
Agent, the Issuing Banks or Lenders and any rights now or
hereafter granted under applicable law and not by way of
limitation of any such Lien or rights, upon the occurrence and
during the continuance of any Event of Default, each Lender and
Issuing Bank is hereby authorized by the Borrower at any time or
from time to time, without notice to the Borrower, or to any
other Person (any such notice being hereby expressly waived) to
set off and to appropriate and to apply any and all deposits
(general or special, including, but not limited to, indebtedness
evidenced by certificates of deposit, whether matured or
unmatured but not including trust accounts) and any other
Indebtedness at any time held or owing by that Lender or Issuing
Bank to or for the credit or the account of the Borrower against
and on account of the Obligations of the Borrower to that Lender
or Issuing Bank including, but not limited to, all Loans and
Reimbursement Obligations and all claims of any nature or
description arising out of or connected with this Agreement or
any of the other Loan Documents, irrespective of whether or not
(i) that Lender or Issuing Bank shall have made any demand
hereunder or (ii) the Administrative Agent shall have declared
the principal of and interest on the Loans and other amounts due
hereunder to be due and payable as permitted by Article X and
although said obligations and liabilities, or any of them, may be
contingent or unmatured.
12.07. Amendments and Waivers. No amendment or modi-
fication of any provision of this Agreement shall be effective
without the written agreement of the Requisite Lenders and the
Borrower, and no termination or waiver of any provision of this
Agreement, or consent to any departure by the Borrower therefrom,
shall in any event be effective without the written concurrence
of the Requisite Lenders, which the Requisite Lenders shall have
the right to grant or withhold at their sole discretion, except
that waivers or amendments with respect to prepayments required
pursuant to Section 2.05 (other than a prepayment required from
the proceeds of insurance upon the loss, damage or destruction of
any asset exceeding $10,000,000) shall not be effective without
the written concurrence of the Supermajority Lenders and except
that any amendment, modification, or waiver of any provision of
this Agreement which would (i) extend the time of expiration or
termination of any of the Commitments (other than pursuant to
Section 2.02(g)) or the Term Loan Termination Date or the time of
payment of principal on any Loan or the Reimbursement
Obligations, interest thereon or fees (provided that any
amendment, modification or waiver with respect to any of the
prepayments required pursuant to Section 2.05 that results in a
reduction in the amount of any such prepayment applied to any
particular scheduled amortization payment of the Term Loans shall
be deemed not to be such an extension of time of payment),
including, without limitation by any amendment to or waiver of
Section 10.02(a), (ii) reduce the interest rate, the amount of
any fees, indemnities or reimbursements hereunder, or the
principal amount of the Loans or the Letters of Credit
Obligations including, without limitation by any amendment to or
waiver of Section 10.02(a), (iii) increase the amount of any of
the Lenders' Commitments or increase any Lender's Pro Rata Share,
(iv) release the security interest of the Holders of Secured
Obligations in all or substantially all of the Collateral, (v)
release the Subsidiary Guaranty or any party thereto (other than
in connection with the sale of any Subsidiary of the Borrower, or
all or substantially all of the assets of such Subsidiary,
permitted by Section 8.02(a)), or (vi) amend the definitions of
"Requisite Lenders", "Pro Rata Share", "Supermajority Lenders",
the provisions of Section 2.01(b), 2.02(g), 3.02, 3.04 or 3.06,
the next to the last sentence of Section 12.15 or the provisions
contained in Section 12.06 or in this Section 12.07 or the
parties whose consent is required for action hereunder or under
the other Loan Documents, shall be effective only if evidenced by
a writing signed by or on behalf of all Lenders. Notwithstanding
the foregoing, with the written approval of the Supermajority
Lenders, individual Lenders may agree to defer interim
amortization payments due to such Lenders with respect to the
Term Loans, provided, however, that each Lender that votes
against such deferral shall receive such payments on each
scheduled interim amortization date as required pursuant to
Section 2.01(c). No amendment, modification, termination, or
waiver of any provision of Article XI or any other provision
referring to the Administrative Agent or the Collateral Agent
shall be effective without the written concurrence of the
Administrative Agent or the Collateral Agent, as applicable. No
amendment, modification, termination or waiver of any provision
of Article III shall be effective without the written consent of
all of the Issuing Banks. The Administrative Agent and the
Collateral Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications,
waivers or consents on behalf of such Lender. Any waiver or
consent shall be effective only in the specific instance and for
the specific purpose for which it was given. No notice to or
demand on the Borrower in any case shall entitle Borrower to any
other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver
or consent effected in accordance with this Section 12.07 shall
be binding on each assignee, transferee or recipient of a
Lender's Commitments or Loans, each future assignee, transferee,
recipient of a Lender's Commitments or Loans, and, if signed by
the Borrower, on the Borrower.
12.08. Notices. Unless otherwise specifically
provided herein, any notice or other communication herein
required or permitted to be given shall be in writing and may be
personally served, telecopied, telexed or sent by courier service
or United States mail and shall be deemed to have been given when
delivered in person or by courier service, upon receipt of a
telecopy or telex or four (4) Business Days after deposit in the
United States mail (registered or certified, with postage prepaid
and properly addressed). Notices to the Administrative Agent
shall not be effective until received by the Administrative
Agent. For the purposes hereof, the addresses of the parties
hereto (until notice of a change thereof is delivered as provided
in this Section 12.08) shall be as set forth in Schedule A or on
the applicable Assignment and Acceptance, or, as to each party,
at such other address as may be designated by such party in a
written notice to all of the other parties.
12.09. Failure or Indulgence Not Waiver; Remedies
Cumulative. No failure or delay on the part of the
Administrative Agent, the Collateral Agent, any Issuing Bank or
any Lender in the exercise of any power, right or privilege under
any of the Loan Documents shall impair such power, right or
privilege or be construed to be a waiver of any default or acqui-
escence therein, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise
thereof or of any other right, power or privilege. All rights
and remedies existing under the Loan Documents are cumulative to
and not exclusive of any rights or remedies otherwise available.
12.10. Termination. Upon the termination in whole of
the Commitments pursuant to the terms of this Agreement, the
Borrower shall pay to the Administrative Agent for the benefit of
the Lenders and the Issuing Banks an amount equal to any and all
Agreement Obligations then outstanding.
12.11. Marshalling; Recourse to Security; Payments
Set Aside. Neither any Lender nor the Collateral Agent nor the
Administrative Agent shall be under any obligation to marshal any
assets in favor of Borrower or any other party or against or in
payment of any or all of the Obligations. Recourse to security
shall not be required at any time. To the extent that the
Borrower makes a payment or payments to the Administrative Agent
or the Lenders, or the Administrative Agent or the Collateral
Agent or the Lenders enforce their security interests or exercise
their rights of setoff, and such payment or payments or the
proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then to the
extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and
remedies therefor, shall be revived and continued in full force
and effect as if such payment had not been made or such
enforcement or setoff had not occurred.
12.12. Severability. In case any provision in or
obligation under this Agreement or the other Loan Documents shall
be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions
or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired
thereby.
12.13. Headings. Article and Section headings in this
Agreement and in the Table of Contents hereto are included herein
for convenience of reference only and shall not constitute a part
of this Agreement for any other purpose or be given any
substantive effect.
12.14. GOVERNING LAW. THE ADMINISTRATIVE AGENT HEREBY
ACCEPTS THIS AGREEMENT, ON BEHALF OF ITSELF, THE COLLATERAL AGENT
AND THE LENDERS, AT NEW YORK, NEW YORK BY ACKNOWLEDGING AND
AGREEING TO IT THERE. ANY DISPUTE AMONG THE BORROWER AND THE
ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE ISSUING BANKS,
ANY LENDER OR ANY OTHER HOLDER OF SECURED OBLIGATIONS ARISING OUT
OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS, AND WHETHER ARISING IN CONTRACT,
TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
12.15. Successors and Assigns; Subsequent Holders
of Notes. This Agreement and the other Loan Documents shall be
binding upon the parties hereto and their respective successors
and assigns and shall inure to the benefit of the parties hereto
and the successors and permitted assigns of the Lenders. The
terms and provisions of this Agreement shall inure to the benefit
of any assignee or transferee of the Loans and the Commitments of
any Lender (to the extent such assignment or transfer is effected
in accordance with Section 12.02), and in the event of such
transfer or assignment, the rights and privileges herein
conferred upon Lenders shall automatically extend to and be
vested in such transferee or assignee, all subject to the terms
and conditions hereof. The Borrower's rights or any interest
therein hereunder, and the Borrower's duties and Obligations
hereunder, may not be assigned without the written consent of all
of the Lenders. All of the Borrower's obligations and duties
under this Agreement and under each of the other Loan Documents
shall be binding upon each of the Borrower's successors and
assigns, including, without limitation, any receiver, trustee or
debtor-in-possession of or for the Borrower.
12.16. CONSENT TO JURISDICTION; SERVICE OF PROCESS;
JURY TRIAL.
(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN
SUBSECTION (B), EACH OF THE PARTIES HERETO AGREES THAT ALL
DISPUTES AMONG THEM ARISING OUT OF, CONNECTED WITH, RELATED TO,
OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR
OTHERWISE, SHALL BE RESOLVED EXCLUSIVELY BY STATE OR FEDERAL
COURTS LOCATED IN NEW YORK, NEW YORK, BUT THE PARTIES HERETO
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. EACH OF
THE PARTIES HERETO WAIVES IN ALL DISPUTES BROUGHT PURSUANT TO
THIS SUBSECTION ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF
THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. THE BORROWER AGREES THAT THE
ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE ISSUING BANKS OR
ANY LENDER SHALL HAVE THE RIGHT TO PROCEED AGAINST THE BORROWER
OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE SUCH PERSON
TO (1) OBTAIN PERSONAL JURISDICTION OVER THE BORROWER OR (2)
REALIZE ON THE COLLATERAL (INCLUDING, WITHOUT LIMITATION, THE
REAL PROPERTY COLLATERAL) OR ANY OTHER SECURITY FOR THE
OBLIGATIONS OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED
IN FAVOR OF SUCH PERSON. THE BORROWER WAIVES ANY OBJECTION THAT
IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH SUCH PERSON HAS
COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION.
(C) SERVICE OF PROCESS. THE BORROWER WAIVES PERSONAL
SERVICE OF ANY PROCESS UPON IT AND, AS ADDITIONAL SECURITY FOR
THE OBLIGATIONS, IRREVOCABLY APPOINTS CT CORPORATION SYSTEM, THE
BORROWER'S REGISTERED ADMINISTRATIVE AGENT, WHOSE ADDRESS IS 1633
BROADWAY, NEW YORK, NEW YORK 10019, AS THE BORROWER'S
ADMINISTRATIVE AGENT FOR THE PURPOSE OF ACCEPTING SERVICE OF
PROCESS ISSUED BY ANY COURT; PROVIDED THAT NOTICE OF ANY SUCH
SERVICE IS CONCURRENTLY THEREWITH DELIVERED TO BORROWER PURSUANT
TO SECTION 12.08. THE BORROWER IRREVOCABLY WAIVES ANY OBJECTION
(INCLUDING, WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH IN ANY JURISDICTION SET FORTH ABOVE.
(D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT
OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EACH
OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.
(E) WAIVER OF BOND. THE BORROWER WAIVES THE POSTING
OF ANY BOND OTHERWISE REQUIRED OF ANY PARTY HERETO IN CONNECTION
WITH ANY JUDICIAL PROCESS OR PROCEEDING TO REALIZE ON THE
COLLATERAL (INCLUDING, WITHOUT LIMITATION, THE REAL PROPERTY
COLLATERAL) OR ANY OTHER SECURITY FOR THE OBLIGATIONS OR TO
ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF
SUCH PARTY, OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY
RESTRAINING ORDER, PRELIMINARY OR PERMANENT INJUNCTION, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT.
(F) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS
TO EACH OTHER PARTY HERETO THAT IT HAS DISCUSSED THIS AGREEMENT
AND, SPECIFICALLY, THE PROVISIONS OF THIS SECTION 12.16, WITH ITS
COUNSEL.
12.17. Counterparts; Effectiveness; Inconsistencies.
This Agreement and any amendments, waivers, consents, or
supplements may be executed in counterparts, each of which when
so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same
instrument. This Agreement shall become effective against each
of the Borrower, each Lender, the Collateral Agent, the Issuing
Banks and the Administrative Agent on the date when all of such
parties have duly executed and delivered this Agreement to each
other (delivery by the Borrower to the Lenders and by any Lender
to the Borrower and any other Lender being deemed to have been
made by delivery to the Administrative Agent). This Agreement
and each of the other Loan Documents shall be construed to the
extent reasonable to be consistent one with the other, but to the
extent that the terms and conditions of this Agreement are
actually inconsistent with the terms and conditions of any other
Loan Document, this Agreement shall govern.
12.18. Performance of Obligations. The Borrower
agrees that the Administrative Agent and the Collateral Agent may
each, but shall have no obligation to, make any payment or
perform any act required of the Borrower under any Loan Document
or take any other action which the Administrative Agent or the
Collateral Agent in its discretion deems necessary or desirable
to protect or preserve the Collateral, including, without
limitation, any action to (i) pay or discharge taxes, liens,
security interests or other encumbrances levied or placed on or
threatened against any Collateral, (ii) effect any repairs or
obtain any insurance called for by the terms of any of the Loan
Documents and to pay all or any part of the premiums therefor and
the costs thereof and (iii) pay any rents payable by the Borrower
which are more than 30 days past due, or as to which the landlord
has given notice of termination, under any lease. The
Administrative Agent or the Collateral Agent, as applicable,
shall use its best efforts to give the Borrower notice of any
action taken under this Section 12.18 prior to the taking of such
action or promptly thereafter provided the failure to give such
notice shall not affect the Borrower's obligations in respect
thereof. The Borrower agrees to pay the Administrative Agent or
the Collateral Agent, as applicable, upon demand, the principal
amount of all funds advanced by the Administrative Agent or the
Collateral Agent under this Section 12.18, together with interest
thereon at the rate from time to time applicable to Base Rate
Loans from the date of such advance until the outstanding princi-
pal balance thereof is paid in full. If the Borrower fails to
make payment in respect of any such advance under this Section
12.18 within one (1) Business Day after the date the Borrower
receives written demand therefor from the Administrative Agent or
the Collateral Agent, as applicable, the Administrative Agent or
the Collateral Agent shall promptly notify each Lender and each
Lender agrees that it shall thereupon make available to the
Administrative Agent or the Collateral Agent, as applicable, in
Dollars in immediately available funds, the amount equal to such
Lender's Pro Rata Share of such advance. If such funds are not
made available to the Administrative Agent or the Collateral
Agent, as applicable, by such Lender within one (1) Business Day
after the Administrative Agent's or Collateral Agent's demand
therefor, the Administrative Agent or Collateral Agent, as
applicable, will be entitled to recover any such amount from such
Lender together with interest thereon at the Federal Funds Rate
(as such term is defined in the definition of Alternate Base
Rate) for each day during the period commencing on the date of
such demand and ending on the date such amount is received. The
failure of any Lender to make available to the Administrative
Agent or Collateral Agent, as applicable, its Pro Rata Share of
any such unreimbursed advance under this Section 12.18 shall
neither relieve any other Lender of its obligation hereunder to
make available to the Administrative Agent or Collateral Agent,
as applicable, such other Lender's Pro Rata Share of such advance
on the date such payment is to be made nor increase the
obligation of any other Lender to make such payment to the
Administrative Agent or Collateral Agent, as applicable. All
outstanding principal of, and interest on, advances made under
this Section 12.18 shall constitute Obligations secured by the
Collateral until paid in full by the Borrower.
12.19. ENTIRE AGREEMENT. THIS WRITTEN CREDIT
AGREEMENT REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES AS TO
ITS SUBJECT MATTER AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS AMONG THE
PARTIES. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES.
THIS SPACE INTENTIONALLY LEFT BLANK
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly
executed on the date set forth above.
FALCON BUILDING PRODUCTS, INC.,
as Borrower
By: /s/ Gus J. Athas
------------------------------
Name: Gus J. Athas
-----------------------
Title: Senior Vice-President
----------------------
CHEMICAL BANK,
as Administrative Agent
By: /s/ Lisa D. Benitez
------------------------------
Name: Lisa D. Benitez
-----------------------
Title: Vice-President
----------------------
CITICORP NORTH AMERICA, INC.,
as Collateral Agent
By: /s/ Jeffery D. Klein
------------------------------
Name: Jeffery D. Klein
-----------------------
Title: Vice-President
----------------------
<PAGE>
Revolving Credit Commitment CHEMICAL BANK
$12,000,000.00
Letter of Credit Commitment By: /s/ Lisa D. Benitez
----------------------
$25,000,000.00 Name: Lisa D. Benitez
--------------------
Term Loan Title: Vice-President
-------------------
$8,000,000.00
<PAGE>
Revolving Credit Commitment CITICORP USA, INC.
$12,000,000.00
Letter of Credit Commitment By: /s/ Edward Lettieri
----------------------
$0 Name: Edward Lettieri
--------------------
Term Loan Title: Vice-President
-------------------
$8,000,000.00
<PAGE>
Revolving Credit Commitment PNC BANK, NATIONAL ASSOCIATION
$12,000,000.00
Letter of Credit Commitment By: /s/ William S. Richards, Jr.
-----------------------------
$0 Name: William S. Richards, Jr.
---------------------------
Term Loan Title: Assistant Vice-President
--------------------------
$8,000,000.00
<PAGE>
Revolving Credit Commitment BANK OF AMERICA ILLINOIS
$10,200,000.00
Letter of Credit Commitment By: /s/ John J. Compernolle
------------------------
$0 Name: John J. Compernolle
--------------------
Term Loan Title: Vice-President
-------------------
$6,800,000.00
<PAGE>
Revolving Credit Commitment CREDIT LYONNAIS CAYMAN
ISLAND BRANCH
$10,200,000.00
Letter of Credit Commitment By: /s/ W. Michael George
----------------------
$0 Name: W. Michael George
--------------------
Term Loan Title: Authorized Signature
---------------------
$6,800,000.00
<PAGE>
Revolving Credit Commitment FIRST BANK NATIONAL ASSOCIATION
$10,200,000.00
Letter of Credit Commitment By: /s/ Megan Mourning
-----------------------
$0 Name: Megan Mourning
---------------------
Term Loan Title: Vice-President
--------------------
$6,800,000.00
<PAGE>
Revolving Credit Commitment THE LONG-TERM CREDIT BANK OF
JAPAN, LTD. CHICAGO BRANCH
$10,200,000.00
Letter of Credit Commitment By: /s/ Armund J. Schoen, Jr.
--------------------------
$0 Name: Armund J. Schoen, Jr.
------------------------
Term Loan Title: Vice-President
-----------------------
$6,800,000.00
<PAGE>
Revolving Credit Commitment NATIONSBANK, N.A. (CAROLINAS)
$10,200,000.00
Letter of Credit Commitment By: /s/ Michael Zehfuss
----------------------
$0 Name: Michael Zehfuss
--------------------
Term Loan Title: Senior Vice-President
----------------------
$6,800,000.00
<PAGE>
Revolving Credit Commitment THE BANK OF NEW YORK
$9,000,000.00
Letter of Credit Commitment By: /s/ John C. Lambert
----------------------
$0 Name: John C. Lambert
--------------------
Term Loan Title: Assistant Vice-President
-------------------------
$6,000,000.00
<PAGE>
Revolving Credit Commitment BANQUE PARIBAS
$9,000,000.00
Letter of Credit Commitment By: /s/ Clark C. King, III
-----------------------
$0 Name: Clark C. King, III
---------------------
Term Loan Title: Vice-President
--------------------
$6,000,000.00
By: /s/ Albert A. Young, Jr.
-------------------------
Name: Albert A. Young, Jr.
-----------------------
Title: Senior Credit Officer
----------------------
<PAGE>
Revolving Credit Commitment CAISSE NATIONALE DE CREDIT
AGRICOLE
$9,000,000.00
Letter of Credit Commitment By: /s/ David Bouhl
----------------------
$0 Name: David Bouhl, F.V.P
--------------------
Term Loan Title: Head of Corporate Banking
--------------------------
$6,000,000.00
<PAGE>
Revolving Credit Commitment DRESDNER BANK AG, CHICAGO AND
CAYMAN ISLAND BRANCHES
$9,000,000.00
Letter of Credit Commitment By: /s/ Brian J. Brodeur
----------------------
$0 Name: Brian J. Brodeur
--------------------
Term Loan Title: Vice-President
-------------------
$6,000,000.00
By: /s/ Paul M. Casey
----------------------
Name: Paul M. Casey
--------------------
Title: Assistant Treasurer
--------------------
<PAGE>
Revolving Credit Commitment HARRIS TRUST & SAVINGS BANK
$9,000,000.00
Letter of Credit Commitment By: /s/ John R. Smart
----------------------
$0 Name: John R. Smart
--------------------
Term Loan Title: Vice-President
-------------------
$6,000,000.00
<PAGE>
Revolving Credit Commitment MIDLANTIC NATIONAL BANK
$9,000,000.00
Letter of Credit Commitment By: /s/ M. Lynn Conover
----------------------
$0 Name: M. Lynn Conover
--------------------
Term Loan Title: Vice-President
-------------------
$6,000,000.00
<PAGE>
Revolving Credit Commitment THE NORTHERN TRUST COMPANY
$9,000,000.00
Letter of Credit Commitment By: /s/ Michelle M. Teteak
-----------------------
$0 Name: Michelle M. Teteak
---------------------
Term Loan Title: Vice-President
--------------------
$6,000,000.00
EXHIBIT 20.1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 0-20416
EAGLE INDUSTRIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 13-3384361
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
Two North Riverside Plaza
Chicago, Illinois 60606
(Address of Principal Executive Office)
(312) 906-8700
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock, as of the latest practicable date.
1,860,000 shares of Common Stock as of August 1, 1995
<PAGE>
EAGLE INDUSTRIES, INC.
FORM 10-Q
JUNE 30, 1995
INDEX
PART I. Financial Information:
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
Condensed Consolidated Statements of Income
Condensed Consolidated Statements of Cash Flows
Notes to Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis
of Results of Operations and Financial Condition
PART II. Other Information:
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN MILLIONS)
JUNE 30, DECEMBER 31,
1995 1994
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $ 31.0 $ 31.1
Accounts receivable, net 28.8 29.4
Inventories, net 154.7 126.5
Other current assets 65.1 76.6
Net assets of discontinued
operations 9.9 9.8
Total current assets 289.5 273.4
Property, plant and equipment,
net 187.9 184.9
Goodwill 289.9 290.0
Other long-term assets 85.6 119.7
Total assets $ 852.9 $ 868.0
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current portion long-term debt $ 23.2 $ 24.7
Accounts payable 75.2 64.8
Accrued liabilities 71.9 84.2
Total current liabilities 170.3 173.7
Senior subordinated notes 141.9 180.4
Other long-term debt 191.2 186.6
Accrued employee benefit
obligations 73.9 73.6
Other long-term liabilities 95.5 90.2
Total liabilities 672.8 704.5
Stockholder's equity:
Common stock -- --
Additional paid-in capital 188.7 188.7
Accumulated deficit (6.4) (21.7)
Cumulative translation
adjustments 2.9 1.6
Pension liability adjustment (5.1) (5.1)
Total stockholder's equity 180.1 163.5
Total liabilities and
stockholder's equity $ 852.9 $ 868.0
The accompanying notes are an integral part of
these condensed consolidated financial statements.
<PAGE>
EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN MILLIONS)
(UNAUDITED)
QUARTER ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1995 1994 1995 1994
(RESTATED) (RESTATED)
Net sales $ 267.4 $ 253.5 $ 518.6 $ 479.7
Cost of sales 211.8 200.5 410.3 381.0
Gross earnings 55.6 53.0 108.3 98.7
Selling and administrative
expenses 32.6 39.1 64.1 71.5
Goodwill amortization 2.2 2.2 4.4 4.4
Operating income 20.8 11.7 39.8 22.8
Net interest expense 7.2 9.6 14.9 21.6
Income from continuing operations
before income taxes 13.6 2.1 24.9 1.2
Provision for income taxes from
continuing operations 5.7 1.1 9.6 1.3
Income (loss) from continuing
operations 7.9 1.0 15.3 (0.1)
Discontinued Operations:
Loss from discontinued operations,
less income tax benefit
of $1.1 and $1.0, respectively
in the quarter and six months
ended June, 1994 -- (4.2) -- (4.1)
Reversal of net loss from
discontinued operations
subsequently retained -- 2.4 -- 4.5
Loss on disposal of businesses,
net of applicable income tax
benefit of $7.9 in 1994 -- (27.2) -- (27.2)
Income (loss) before extraordinary
item 7.9 (28.0) 15.3 (26.9)
Extraordinary loss from early
retirement of debt, net of
income tax benefit of $9.4
in 1994 -- -- -- (16.6)
Net income (loss) $ 7.9 $ (28.0) $ 15.3 $(43.5)
The accompanying notes are an integral part of
these condensed consolidated financial statements.
<PAGE>
EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN MILLIONS)
(UNAUDITED)
SIX MONTHS ENDED
JUNE 30,
1995 1994
(RESTATED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Income (loss) from continuing operations $ 15.3 $ (0.1)
Adjustments to reconcile income (loss)
from continuing operations
to net cash flow used in operations:
Depreciation and amortization 19.8 19.4
Accretion of discount on subordinated
debt 8.5 10.5
Proceeds from sales of accounts
receivable -- 110.3
Cash effects of changes in other working
capital balances, accrued employee
benefit obligations, and other long-term
liabilities (excluding the effects of
acquisitions and dispositions of
businesses) (10.2) 6.5
Net cash flow from continuing
operating activities 33.4 146.6
Net cash flow used in discontinued
operations (1.8) (30.3)
Net cash flow from operations 31.6 116.3
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of businesses (10.4) --
Proceeds from sale of businesses -- 59.9
Proceeds from sale of notes receivable 39.8 --
Capital expenditures (13.7) (10.3)
Other (5.4) 0.6
Net cash flow from investing
activities 10.3 50.2
CASH FLOWS FROM FINANCING ACTIVITIES:
Retirement of senior subordinated notes (45.0) --
Repayment of senior subordinated debt -- (234.1)
Repayment of senior credit facilities -- (221.1)
Capital contribution -- 50.0
Proceeds from new credit facility -- 317.9
Payments on long-term debt (29.0) (25.0)
Net borrowing (payment) on revolving
credit facilities 32.0 (41.4)
Net cash flow used in financing
activities (42.0) (153.7)
CHANGE IN CASH AND CASH EQUIVALENTS (0.1) 12.8
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 31.1 4.8
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 31.0 $ 17.6
The accompanying notes are an integral part of
these condensed consolidated financial statements.
<PAGE>
EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1995
(UNAUDITED)
(1) BASIS OF PRESENTATION
The accompanying unaudited Condensed Consolidated Financial Statements
of Eagle Industries, Inc. (the "Company") have been prepared in
accordance with generally accepted accounting principles for interim
financial information. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for a complete set of financial statements. In the opinion
of management, all adjustments considered necessary, consisting only of
normal recurring adjustments are included for fair presentation.
Operating results for the quarter and six months ended June 30, 1995 are
not necessarily indicative of results that may be expected for the full
year. The unaudited Condensed Consolidated Financial Statements for the
quarters and six months ended June 30, 1995 and 1994 should be read in
conjunction with the audited Consolidated Financial Statements of the
Company for the year ended December 31, 1994. The historical statements
of the Company have been restated for companies being reported as
discontinued operations.
(2) INVENTORIES
Inventory consists of the following (in millions):
JUNE 30, DECEMBER 31,
1995 1994
(UNAUDITED)
Raw materials and supplies $ 51.0 $ 46.4
Work in process 29.0 25.2
Finished goods 74.7 54.9
$ 154.7 $ 126.5
(3) LONG-TERM DEBT
Components of other long-term debt are as follows (in millions):
JUNE 30, DECEMBER 31,
1995 1994
(UNAUDITED)
Eagle Industrial Credit Facility $ 75.8 $ 89.5
Falcon Credit Facility 132.0 112.5
Other 6.6 9.3
214.4 211.3
Less current portion (23.2) (24.7)
Total other long-term debt $ 191.2 $186.6
On June 30, 1995 Eagle's subsidiary, Falcon Building Products, Inc.
("Falcon"), amended and restated its existing senior credit facility,
increasing it to a $250 million credit facility (the "Falcon Credit
Facility") with its existing group of banks. The Falcon Credit Facility
consists of a six-year $100 million term loan, maturing in June 2001,
due in quarterly installments increasing in amount from $2.5 million
beginning September 30, 1995 to $6.25 million per quarter beginning in
September 2000, and a $150 million revolving credit facility (the
"Revolver") that expires in 2001. Borrowings under the Falcon Credit
Facility bear interest, at management's option, at rates equal to London
Interbank Offered Rates ("LIBOR") plus a margin or the prime rate. The
Falcon Credit Facility is secured by substantially all of the inventory,
intangibles, property, plant, equipment and stock of Falcon's
subsidiaries. The Falcon Credit Facility also allows for $25 million to
be used in the form of letters of credit, which when issued, reduce the
availability under the Revolver.
The Falcon Credit Facility does not include a borrowing base qualifier
to determine the availability under the Revolver, but does contain
various covenants pertaining to the maintenance of certain cash flow and
expense coverage ratios, the incurrence of additional indebtedness and
restrictions on the payment of dividends.
In May 1995, Falcon entered into a five-year interest rate swap
agreement. This agreement, covering $100 million of the Falcon's
floating rate debt, fixed the interest rate at 6.52 percent per annum,
plus the then applicable margin.
The Company and its subsidiaries complied with all covenants of their
respective debt agreements at June 30, 1995. For a more detailed
description of all of the Company's other credit facilities, refer to
the Company's December 31, 1994 report on Form 10-K.
During the six months ended June 30, 1995, the Company retired $65.5
million face value ($47.0 million accreted value) of its senior
subordinated notes, no gain or loss was recorded on the repurchases.
<PAGE>
EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
The following is a discussion of the results of operations of Eagle
Industries, Inc. (the "Company") and subsidiaries for the quarter and
six months ended June 30, 1995 as compared to the quarter and six months
ended June 30, 1994 and should be read in conjunction with the Condensed
Consolidated Financial Statements included herein and the Company's
Annual Report on Form 10-K for the year ended December 31, 1994 and the
audited Consolidated Financial Statements of the Company for the year
ended December 31, 1994 included therein.
QUARTER ENDED JUNE 30, 1995 COMPARED TO THE QUARTER ENDED JUNE 30, 1994
The following table shows net sales and operating income by business
group (in millions):
NET SALES OPERATING INCOME
QUARTER ENDED QUARTER ENDED
JUNE 30, JUNE 30,
1995 1994 1995 1994
Building Products Group $ 116.7 $ 112.1 $ 14.3 $ 12.1
Electrical Products Group 76.3 71.6 10.0 2.5
Automotive Products Group 49.4 46.7 2.6 2.0
Corporate and Other 25.0 23.1 (6.1) (4.9)
Total $ 267.4 $ 253.5 $ 20.8 $ 11.7
NET SALES
Net sales of $267.4 million for the second quarter of 1995 were $13.9
million or 5.5% higher than net sales for the second quarter of 1994.
This increase was primarily due to increased volume in most of the
Company's business groups.
Net sales of $116.7 million for the Building Products Group were $4.6
million or 4.0% higher than net sales for the 1994 period. During the
quarter ended June 30, 1995, Falcon Building Products, Inc. acquired
three businesses. Excluding the effects of these acquisitions, net
sales were $0.8 million higher than in the 1994 period. This increase
was primarily due to new products and an improvement in pricing,
partially offset by volume declines in bathroom fixtures.
Net sales of $76.3 million for the Electrical Products Group were $4.7
million or 6.6% higher than net sales for the 1994 period. This
increase was primarily due to increased volume and, to a lesser extent,
improved pricing at most businesses within the group due to continued
improvement in the economy, as well as new products at Elastimold.
These increases were partially offset by decreased volume at Lapp
primarily due to the sale of its polymer product line in 1994.
Net sales of $49.4 million for the Automotive Products Group were $2.7
million or 6.0% higher than net sales for the 1994 period. This
increase was primarily due to increased volume at Denman and the
automotive parts distribution businesses as a result of increased market
penetration and geographic expansion.
Other net sales of $25.0 million were $1.9 million or 8.2% higher than
net sales for the 1994 period. This increase was primarily due to
shipments under a major order from British Airways at Burns Aerospace.
GROSS EARNINGS
Gross earnings of $55.6 million were $2.6 million or 4.8% higher than
gross earnings for the 1994 period. This increase was primarily due to
the higher volume and, to a lesser extent, improved pricing in the
Electrical Products Group in the 1995 period. Gross margin was 20.8% in
1995 and 20.9% in 1994.
OPERATING INCOME
Operating income of $20.8 million for the second quarter of 1995 was
$9.1 million or 78.1% higher than operating income for the comparable
period in 1994. Excluding charges to establish self-insurance reserves
recorded in the second quarter of 1994 of $8.3 million, operating income
increased $0.8 million or 4.0%. This increase is primarily due to
increased sales volume in each of the business groups, improved pricing
and equity earnings from joint ventures, partially offset by increased
operating expenses related to new locations and new product lines.
Operating income of $14.3 million for the Building Products Group was
$2.2 million or 18.2% higher than in the 1994 period. Excluding the
effects of acquisitions, operating income increased $1.8 million. This
increase was primarily due to the absence of $3.6 million in charges
recorded in 1994 to establish self-insurance reserves. This increase
was partially offset by raw material cost inflation.
Operating income of $10.0 million for the Electrical Products Group was
$7.5 million higher than in the 1994 period. Excluding charges to
establish self-insurance reserves of $2.6 million recorded in 1994,
operating income increased $4.9 million or 93.5%. This increase was
primarily due to the increased sales volume, improved pricing and equity
earnings from Elastimold's joint ventures. In addition, the sale of
Lapp's polymer product line also contributed to the increase.
Operating income of $2.6 million for the Automotive Products Group was
$0.6 million or 27.9% higher than in the 1994 period. Excluding charges
to establish self-insurance reserves of $0.5 million recorded in 1994,
operating income increased $0.1 million.
Corporate and other expenses of $6.1 million were $1.2 million higher
than in the 1994 period. Excluding charges to establish self-insurance
reserves of $1.6 million recorded in 1994, corporate and other expenses
were $2.8 million higher than in the 1994 period. This increase was
primarily due to increased compensation expenses as well as increased
costs at Burns Aerospace.
INTEREST EXPENSE
Net interest expense was $7.2 million for the quarter ended June 30,
1995 compared to $9.6 million for the comparable 1994 period, a decrease
of $2.4 million or 25.0%. This decrease was primarily due to the
overall decrease in the level of debt.
PROVISION FOR INCOME TAXES
The effective tax rates for the second quarters of 1995 and 1994 reflect
non-deductible expenses, primarily goodwill amortization and state
income taxes.
SIX MONTHS ENDED JUNE 30, 1995 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
1994
The following table shows net sales and operating income by business
group (in millions):
NET SALES OPERATING INCOME
SIX MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1995 1994 1995 1994
Building Products Group $ 229.5 $ 212.6 $ 28.1 $ 24.6
Electrical Products Group 146.1 138.2 16.9 3.4
Automotive Products Group 94.7 87.5 4.6 3.6
Corporate and Other 48.3 41.4 (9.8) (8.8)
Total $ 518.6 $ 479.7 $ 39.8 $ 22.8
NET SALES
Net sales of $518.6 million for the six months ended June 30, 1995 were
$38.9 million or 8.1% higher than net sales for the comparable period in
1994. This increase was primarily due to increased volume at most of
the Company's business groups.
Net sales of $229.5 million for the Building Products Group were $16.9
million or 8.0% higher for the first six months of 1995 compared to the
first six months of 1994. Excluding the effects of acquisitions, net
sales were $13.2 million or 6.2% higher than in 1994. This increase was
primarily due to increased volume and improved pricing at Falcon.
Net sales of $146.1 million for the Electrical Products Group were $7.9
million or 5.7% higher in the first six months of 1995 compared to the
first six months of 1994. This increase was primarily due to increased
volume and improved pricing at most companies within the group due to
continued improvement in the economy, as well as new products at
Elastimold. These increases were partially offset by decreased volume
at Lapp due to the sale of its polymer product line in 1994.
Net sales of $94.7 million for the Automotive Products Group were $7.2
million or 8.1% higher in the first six months of 1995 compared to the
first six months of 1994. This increase was primarily due to increased
sales volume at Denman and the automotive parts distribution businesses
as a result of increased market penetration and geographic expansion.
Other net sales increased $6.9 million or 16.8% compared to 1994. This
increase was primarily due to shipments under a major order from British
Airways at Burns Aerospace.
<PAGE>
GROSS EARNINGS
Gross earnings of $108.3 million were $9.6 million or 9.7% higher than
gross earnings for the first six months of 1994. This increase was
primarily due to the increased volume in the 1995 period. Gross margin
increased to 20.9% in the first six months of 1995 compared to 20.6% in
the comparable 1994 period due to improved pricing, as well as various
cost reduction programs.
OPERATING INCOME
Operating income of $39.8 million for the six months ended June 30, 1995
was $17.0 million or 74.9% higher than operating income for the
comparable period in 1994. Excluding charges to establish self-
insurance reserves recorded in 1994 of $8.7 million, operating income
increased $8.3 million or 26.4%. This increase was due to increased
volume at each of the Company's business groups, improved pricing and
equity earnings from joint ventures.
Operating income of $28.1 million for the Building Products Group was
$3.5 million or 14.1% higher than in the 1994 period. Excluding the
effects of acquisitions in 1995 and charges recorded to establish self-
insurance reserves in 1994 and 1995, operating income decreased $0.2
million. This decrease was primarily due to increased raw material
costs, partially offset by improved pricing and increased volume.
Operating income of $16.9 million for the Electrical Products Group was
$13.5 million or 397.1% higher than in the 1994 period. Excluding
charges to establish self-insurance reserves of $2.7 million, operating
income increased $10.8 million. The increase was primarily due to
increased sales volume, improved pricing, and equity earnings from
Elastimold's joint ventures. The restructuring of Lapp's porcelain
operations and the sale of its polymer product line also contributed to
the increase.
Operating income of $4.6 million for the Automotive Products Group was
$1.0 million or 28.1% higher than in the 1994 period. Excluding charges
to establish self-insurance reserves of $0.5 million, operating income
increased $0.5 million primarily due to increased volume.
Corporate and other expenses of $9.8 million were $1.0 million higher
than in the 1994 period. Excluding charges to establish self-insurance
reserves of $1.6 million, other expenses increased $2.6 million. This
was primarily due to an increase in expense associated with the
Company's asset securitization program and increased compensation
expense.
INTEREST EXPENSE
Net interest expense was $14.9 million for the six months ended June 30,
1995 compared to $21.6 million for the comparable 1994 period. This
decrease was primarily due to the overall decrease in the level of debt.
<PAGE>
PROVISION FOR INCOME TAXES
The effective tax rates for the six months ended June 30, 1995 and 1994
reflect non-deductible expenses, primarily goodwill amortization and
state income taxes.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically met its debt service, capital expenditure
requirements and operating needs through a combination of operating cash
flow and external financing. Excluding the effects of the initial
proceeds from the asset securitization program in the 1994 period, cash
flow from continuing operations activities was $33.4 million for the six
months ended June 30, 1995 and $36.3 million in the comparable 1994
period. The decrease in 1995 was primarily due to an increase in
working capital requirements caused by the higher level of sales
activity, partially offset by the increased income. During the quarter
ended June 30, 1995, the Company sold the note receivable and 200,000
stock appreciation rights received from Robbins & Myers, Inc. in
conjunction with the sale of certain businesses in 1994. Net cash
proceeds received for the note and the stock appreciation rights were
$39.8 million. No gain or loss was recorded in conjunction with this
sale. During the six months ended June 30, 1995, the Company retired
$65.5 million face value ($47.0 million accreted value) of its senior
subordinated notes using available cash.
On June 30, 1995, Falcon amended and restated its senior credit facility
increasing it to a $250 million credit facility. See Note 3 to the
Company's Condensed Consolidated Financial Statements for a further
description of the agreement.
Management believes that cash flow from continuing operations along with
availability under the credit facilities will be sufficient to pay
interest on outstanding debt, meet current maturities, pay income taxes,
fund capital expenditures and meet other operating needs.
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
4.1 Amended and Restated Credit Agreement dated June 30, 1995 among
Falcon Building Products, Inc. and Chemical Bank as Administrative
Agent and Citicorp North America, Inc. as Collateral Agent and the
other financial institutions named therein.
b) Reports on Form 8-K
None.
<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.
EAGLE INDUSTRIES, INC.
By: /s/ SAM A. COTTONE
------------------
Sam A. Cottone
Senior Vice President and
Chief Financial Officer
Dated: August 14, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
June 30, 1995 Form 10-Q and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
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<COMMON> 0
0
0
<OTHER-SE> 282
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