- -----------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- -----------------------------------------------------------------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission File No. 1-7695
KUHLMAN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 58-2058047
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3 Skidaway Village Square
Savannah, Georgia 31411
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code -- (912) 598-7809
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 (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes X No
------- -------
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at October 31, 1996
----- -------------------------------
Common Stock, $1.00 Par Value 13,722,969
- -----------------------------------------------------------------------------
<PAGE>
KUHLMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- --------------------
1996 1995 1996 1995
--------- --------- --------- ---------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net sales. . . . . . . . . $ 119,198 $ 108,561 $ 334,855 $ 318,301
Cost of goods sold . . . . 91,934 86,500 262,403 256,136
--------- --------- --------- ---------
Gross profit . . . . . . . 27,264 22,061 72,452 62,165
Selling, engineering,
general and
administrative
expenses. . . . . . . . 16,023 14,150 44,967 41,063
--------- --------- --------- ---------
Operating profit . . . . . 11,241 7,911 27,485 21,102
--------- --------- --------- ---------
Other income (expense):
Interest expense, net. . (1,815) (1,677) (5,150) (5,360)
Merger expenses. . . . . --- --- --- (4,510)
Other, net . . . . . . . (650) (481) (1,443) 895
--------- --------- --------- ---------
Total other income
(expense), net . . . (2,465) (2,158) (6,593) (8,975)
--------- --------- --------- ---------
Income before taxes and
extraordinary item . . . 8,776 5,753 20,892 12,127
Taxes on income. . . . . . 3,647 2,360 8,613 5,911
--------- --------- --------- ---------
Income before extra-
ordinary item . . . . . 5,129 3,393 12,279 6,216
Extraordinary item
(net of tax effect
of $1,175). . . . . . . --- --- --- (1,861)
--------- --------- --------- ---------
Net income . . . . . . . . $ 5,129 $ 3,393 $ 12,279 $ 4,355
========= ========= ========= =========
Per share amounts
Primary:
Income before extra-
ordinary item . . . $ 0.37 $ 0.26 $ 0.90 $ 0.47
Extraordinary item . . --- --- --- (0.14)
--------- --------- --------- ---------
Net income . . . . . . $ 0.37 $ 0.26 $ 0.90 $ 0.33
========= ========= ========= =========
Fully dilutive:
Income before extra-
ordinary item . . . $ 0.37 $ 0.26 $ 0.89 $ 0.47
Extraordinary item . . --- --- --- (0.14)
--------- --------- --------- ---------
Net income . . . . . . $ 0.37 $ 0.26 $ 0.89 $ 0.33
========= ========= ========= =========
Average shares outstanding
- primary . . . . . . . 13,829 13,227 13,614 13,181
========= ========= ========= =========
Average shares outstanding
- fully diluted . . . . 13,838 13,227 13,872 13,181
========= ========= ========= =========
</TABLE>
The Notes To Consolidated Financial Statements
should be read in conjunction with these statements.
<PAGE>
KUHLMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
--------- ---------
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . $ 1,696 $ 581
Accounts receivable, less reserves
of $2,026 and $1,442 at September
30, 1996 and December 31, 1995,
respectively. . . . . . . . . . . . 68,531 55,753
Inventories . . . . . . . . . . . . . 54,238 41,833
Deferred income taxes . . . . . . . . 5,639 4,901
Prepaid expenses and other current
assets. . . . . . . . . . . . . . . 2,327 3,535
--------- ---------
Total current assets . . . . . . . 132,431 106,603
--------- ---------
Plant and equipment, at cost:
Land, buildings and leasehold
improvements . . . . . . . . . . . 43,021 37,077
Machinery and equipment . . . . . . . 121,359 111,175
Construction in progress . . . . . . 3,503 2,241
--------- ---------
167,883 150,493
Less - accumulated depreciation . . . (91,917) (84,244)
--------- ---------
75,966 66,249
--------- ---------
Intangible assets, net of amortization
of $3,992 and $2,672 at September
30, 1996 and December 31, 1995,
respectively. . . . . . . . . . . . . 57,244 37,201
--------- ---------
Other assets . . . . . . . . . . . . . . 4,762 4,849
--------- ---------
$ 270,403 $ 214,902
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt . . $ 3,605 $ 10,522
Accounts payable . . . . . . . . . . 35,809 28,542
Accrued liabilities . . . . . . . . . 39,254 28,357
--------- ---------
Total current liabilities . . . . . 78,668 67,421
--------- ---------
Bank debt. . . . . . . . . . . . . . . . 92,297 60,217
Other long-term debt . . . . . . . . . . 5,231 3,436
--------- ---------
Total long-term debt. . . . . . . . . 97,528 63,653
--------- ---------
Accrued postretirement benefits . . . . 8,543 8,462
--------- ---------
Other long-term liabilities. . . . . . . 2,936 1,134
--------- ---------
Total liabilities . . . . . . . . . 187,675 140,670
--------- ---------
Shareholders' equity:
Preferred stock, par value $1.00,
authorized 2,000 shares, none
issued; Junior participating
preferred stock, series A,
no par value, authorized 200
shares, none issued . . . . . . . . --- ---
Common stock, par value $1.00,
authorized 20,000 shares,
issued 13,466 shares at September
30, 1996 and 13,240 at December
31, 1995, respectively . . . . . . 13,466 13,240
Additional paid-in capital . . . . . 28,092 26,217
Retained earnings . . . . . . . . . . 44,275 37,988
Foreign currency translation adjustments (1,803) (1,911)
Minimum pension liability . . . . . . (382) (382)
--------- ---------
83,648 75,152
Less - treasury shares at cost (72
shares at September 30, 1996
and December 31, 1995). . . . . . . (920) (920)
--------- ---------
Total shareholders' equity . . . . 82,728 74,232
--------- ---------
$ 270,403 $ 214,902
========= =========
</TABLE>
The Notes to Consolidated Financial Statements
should be read in conjunction with these statements.
<PAGE>
KUHLMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
--------------------
1996 1995
--------- --------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . . $ 12,279 $ 4,355
Adjustments to reconcile net income to net cash
provided by operating activities:
Extraordinary item, net . . . . . . . --- 1,861
Merger expenses . . . . . . . . . . . --- 4,510
Depreciation and amortization . . . . 9,578 8,789
Deferred income taxes, net. . . . . . 1,837 2,806
Provision for losses on accounts receivable 445 994
Other, net. . . . . . . . . . . . . . (487) (90)
Changes in operating assets and liabilities: (1)
Accounts receivable . . . . . . . . (5,398) (7,142)
Inventories . . . . . . . . . . . . (6,160) (2,725)
Prepaid expenses and other current assets 1,358 1,177
Accounts payable. . . . . . . . . . 5,017 7,061
Accrued liabilities . . . . . . . . 5,820 (175)
-------- --------
Net cash provided by operating
activities . . . . . . . . . . 24,289 21,421
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures . . . . . . . . (7,405) (11,856)
Acquisitions, net of cash acquired. . (35,097) ---
Proceeds from the sale of assets. . . 103 89
-------- --------
Net cash used by investing activities (42,399) (11,767)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in revolving loan facility (14,736) 323
Proceeds from issuance of long-term debt 39,435 24,873
Repayments of long-term debt . . . . (1,085) (25,539)
Dividends paid . . . . . . . . . . . (5,958) (3,829)
Payments for merger and related expenses --- (5,675)
Stock options exercised . . . . . . . 1,911 917
Other . . . . . . . . . . . . . . . . (525) (103)
-------- --------
Net cash provided (used) by financing
activities. . . . . . . . . . . . 19,042 (9,033)
-------- --------
Effect of exchange rate changes on cash. 183 146
-------- --------
Net increase in cash and cash equivalents 1,115 767
Cash and cash equivalents at beginning of
period . . . . . . . . . . . . . . . . 581 3,036
-------- --------
Cash and cash equivalents at end of period $ 1,696 $ 3,803
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest . . . . . . . . . . . . . . $ 4,505 $ 5,132
======== ========
Income taxes, net of refunds . . . . $ 5,229 $ 1,807
======== ========
(1) Net of the effects of acquisition, where applicable.
</TABLE>
The Notes To Consolidated Financial Statements
should be read in conjunction with these statements.
<PAGE>
KUHLMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
For The Nine Months Ended September 30, 1996
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Foreign
Additional Currency Minimum
Common Paid-in Retained Translation Pension Treasury
Stock Capital Earnings Adjustment Liability Stock Total
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31,
1995 . . . . . $13,240 $26,217 $ 37,988 $ (1,911) $(382) $(920) $74,232
------- ------- -------- -------- ----- ----- -------
Net income. . . --- --- 12,279 --- --- --- 12,279
Cash dividends
declared
($0.45 per share) --- --- (5,992) --- --- --- (5,992)
Foreign currency
translation
adjustment . . --- --- --- 108 --- --- 108
Stock options
exercised and
other. . . . . 226 1,875 --- --- --- --- 2,101
------- ------- -------- -------- ----- ----- -------
Balance at
September 30,
1996. . . . . $13,466 $28,092 $ 44,275 $ (1,803) $(382) $(920) $82,728
======= ======= ======== ======== ===== ===== =======
</TABLE>
The Notes To Consolidated Financial Statements
should be read in conjunction with these statements.
<PAGE>
KUHLMAN CORPORATION AND SUBSIDIARIES
------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three and Nine Months Ended September 30, 1996
(Unaudited)
1. Consolidated Financial Statements
The consolidated balance sheet at September 30, 1996 and the
related consolidated statements of income, cash flows and
shareholders' equity for the three and nine months ended
September 30, 1996 and 1995, have been prepared by Kuhlman
Corporation (the "Company") without audit. In the opinion of
management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position
of the Company at September 30, 1996 and the results of
operations and cash flows for the three and nine months ended
September 30, 1996 and 1995, have been made. On May 31, 1995, a
wholly-owned subsidiary of the Company merged with Schwitzer,
Inc. ("Schwitzer"). The merger was accounted for as a pooling of
interests. Therefore, the financial statements for all periods
shown have either been restated to include, or include the
combined balance sheet and results of operations of both
companies as if the merger had been in effect for all periods
presented. Certain amounts in the 1995 consolidated financial
statements have been reclassified to conform with the 1996
presentation.
Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been omitted from
the accompanying financial statements. These consolidated
financial statements, including the notes thereto, should be read
in conjunction with the Company's audited consolidated financial
statements as of and for the three years in the period ended
December 31, 1995 included in the Company's Annual Report on Form
10-K.
The results of operations for the three and nine months ended
September 30, 1996 are not necessarily indicative of the results
to be expected for the full year 1996.
2. Acquisition of Communication Cable, Inc.
On February 16, 1996, the Company, through a wholly-owned
subsidiary, completed a tender offer for the outstanding shares
of Communication Cable, Inc. ("CCI"), a North Carolina
corporation, at $14.00 per share in cash. The purchase of the
tendered shares, which was consummated on February 21, 1996,
along with subsequent actions have resulted in CCI becoming a
wholly-owned subsidiary of the Company as of June 28, 1996. The
aggregate total cost of the acquisition of the outstanding shares
of CCI, which was primarily funded through bank debt, was
$43,775,000. CCI engineers, designs and manufactures a wide
variety of low voltage electronic wire and cable products.
The transaction is being accounted for as a purchase and
accordingly the goodwill associated with the transaction will be
amortized over 40 years. The purchase price allocations have
been completed on a preliminary basis, subject to adjustment
should new or additional facts about the business become known.
The results of operations of CCI are included in the consolidated
financial statements of the Company subsequent to February 21,
1996.
The following unaudited pro forma information for the periods
shown below gives effect to the acquisition of CCI as if it had
occurred at the beginning of each period. The pro forma
information for 1996 and 1995 combines the results of the Company
with those for CCI's quarter ended January 31, 1996 and nine
months ended July 31, 1995, respectively.
In thousands, except per share data
<TABLE>
<CAPTION>
Nine Months Ended September 30,
------------------------------
1996 1995
-------- --------
<S> <C> <C>
Net sales $344,090 $357,860
Net income before extraordinary item $ 12,301 $ 5,880
Net income $ 12,301 $ 4,019
Fully diluted per share amounts:
Net income before extraordinary item $ 0.89 $ 0.45
Net income $ 0.89 $ 0.30
</TABLE>
The unaudited pro forma information assumes that the Company
owned the outstanding shares of CCI at the beginning of the
periods presented, and accordingly, includes adjustments for
goodwill amortization, interest expense, certain administrative
costs and income taxes. The unaudited pro forma financial data
is presented for information purposes only and is not necessarily
indicative of the results of operations that actually would have
been achieved had the acquisition of CCI been consummated as of
that time.
3. Earnings and Dividends Per Share
Earnings per share in the accompanying consolidated
statements of income for the three and nine months ended
September 30, 1996 and 1995 have been computed based on the
weighted average number of shares of common stock and common
stock equivalents, if any, outstanding throughout the period.
For the three months ended September 30, 1996, primary and fully
dilutive average shares outstanding included approximately
444,000 and 453,000 shares, respectively, resulting from the
dilutive effects of common stock equivalents. For the nine
months ended September 30, 1996, primary and fully dilutive
average shares outstanding included approximately 327,000 and
585,000 shares, respectively, resulting from the dilutive effects
of common stock equivalents. There was no materially dilutive
effect for the comparable year ago period.
A cash dividend of $0.15 per share was declared during each
of the first three quarters of 1996 and 1995, excluding the
effect prior to May 1995 of the shares issued in connection with
the merger with Schwitzer.
4. Inventories
Inventories consisted of the following, in thousands:
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
-------- ---------
(unaudited)
<S> <C> <C>
FIFO cost:
Raw materials $ 22,023 $ 20,630
Work-in-process 12,080 7,359
Finished goods 21,164 16,276
-------- --------
Total 55,267 44,265
Excess of FIFO over LIFO cost (1,029) (2,432)
-------- --------
Net inventories $ 54,238 $ 41,833
======== ========
</TABLE>
5. Debt
On July 1, 1996, the Company amended its bank credit facility
in order to, among other things, enhance its flexibility, lower
its cost of borrowed funds and provide a facility to fund future
acquisitions. The credit facility in the amended agreement has
two components. The first component is a $125 million revolving
credit facility to be used for general corporate purposes and is
due on July 1, 2001. The second component is a 364-day, $125
million facility that would be used primarily to fund future
acquisitions, and amounts drawn under this facility, if any,
would convert to a 4-year term loan commencing on July 1, 1997
with equal quarterly amortization. Interest rates on amounts
borrowed under the credit agreement are based on certain
financial ratios which have been amended to reflect the Company's
improved financial strength.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
On February 16, 1996, Kuhlman Corporation (the "Company"),
through a wholly-owned subsidiary, completed a tender offer for
the outstanding shares of Communication Cable, Inc. ("CCI"), a
North Carolina corporation at $14.00 per share.
The purchase price for the shares of CCI was approximately
$43,775,000 and was primarily funded through an increase in the
Company's bank credit facility. The acquisition has been
accounted for by the purchase method of accounting and
accordingly, the net assets and results of operations for CCI are
included in the Company's consolidated financial statements as
part of the Electrical Products Segment from the date of
acquisition.
CCI engineers, designs and manufactures a wide variety of low
voltage electronic wire and cable products which are marketed to
original equipment manufacturers and, through distributors, to a
variety of end users, principally in the United States. CCI's
products include coaxial, multi-conductor and "category" cables
which are used for data, voice and video communication
applications by the computer and data processing industries,
medical and industrial electronics industries and for satellite
and other telecommunication applications.
On July 1, 1996, the Company amended its bank credit facility in
order to, among other things, enhance its flexibility, lower its
cost of borrowed funds and provide a facility to fund future
acquisitions. The credit facility in the amended agreement has
two components. The first component is a $125 million revolving
credit facility to be used for general corporate purposes and is
due on July 1, 2001. The second component is a 364-day, $125
million facility that would be used primarily to fund future
acquisitions, and amounts drawn under this facility, if any,
would convert to a 4-year term loan commencing on July 1, 1997
with equal quarterly amortization. Interest rates on amounts
borrowed under the credit agreement are based on certain
financial ratios which have been amended to reflect the Company's
improved financial strength.
LIQUIDITY AND CAPITAL RESOURCES
The Company generated a record $24,289,000 in cash flow from
operations in the first nine months of 1996 compared to
$21,421,000 for the same period in 1995, an increase of
$2,868,000 (13%). The increase was due primarily to higher
earnings in the first three quarters of 1996 and the timing of
payments for certain accrued expenses. Working capital was
$53,763,000 at September 30, 1996 compared to $39,182,000 at
December 31, 1995, an increase of $14,581,000 (37%). The
increase was due primarily to greater cash balances at September
30, 1996, the acquisition of CCI and the change in classification
of the Company's bank debt based on the amended credit agreement,
partially offset by higher accounts payable and accrued
liabilities at September 30, 1996. Cash and cash equivalents
increased to $1,696,000 at September 30, 1996 from $581,000 at
December 31, 1995 due to the timing of cash receipts. Accounts
receivable, net was $68,531,000 at September 30, 1996 compared to
$55,753,000 at December 31, 1995, an increase of $12,778,000
(23%). The increase was due primarily to the acquisition of CCI
and the Company's record sales volume in the third quarter of
1996. Similarly, inventories increased $12,405,000 (30%) to
$54,238,000 at September 30, 1996 from December 31, 1995
primarily due to the inclusion of CCI and because of higher
expected sales activity in the Electrical Products Segment
particularly for battery booster cables. Prepaid expenses and
other current assets decreased to $2,327,000 at September 30,
1996 from $3,535,000 at the end of 1995 due to the collection of
certain non-trade receivables. Accounts payable and accrued
liabilities increased $18,164,000 (32%) to $75,063,000 at
September 30, 1996 from December 31, 1995 due primarily to the
addition of CCI, higher accounts payable to vendors caused in
part by the greater level of inventories noted above and
increased accrued liabilities due to the timing of payments for
certain expenses. Total debt outstanding was $101,133,000 at
September 30, 1996, up $26,958,000 from the end of 1995. The
increase in total debt was due to the funding of the acquisition
of CCI, partially offset by the Company's record cash flow in the
first nine months of 1996. Shareholders' equity increased
$8,496,000 (11%) in the first three quarters of 1996 to
$82,728,000 at September 30, 1996 from the end of 1995 due
primarily to the Company's record earnings, partially offset by
dividends declared.
Capital expenditures in the nine months ended September 30, 1996
were $7,405,000 compared to $11,856,000 reported in the same
period last year. Expenditures in 1996 have been primarily for
normal additions and replacements to machinery and equipment,
tooling for specific customer applications and capacity
enhancements.
Management believes that the Company's liquidity, forecasted cash
flows, available borrowing capacity and other financial resources
are adequate to support the anticipated operations, to finance
future capital expenditures as previously planned and to service
all existing debt requirements.
RESULTS OF OPERATIONS
The following table summarizes net sales and operating earnings
by segment, in thousands:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- ---------------------
1996 1995 1996 1995
-------- -------- -------- --------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Net sales:
Electrical $ 71,560 $ 63,898 $195,390 $178,902
Industrial 47,638 44,663 139,465 139,399
-------- -------- -------- --------
$119,198 $108,561 $334,855 $318,301
======== ======== ======== ========
Income before taxes:
Electrical $ 5,997 $ 3,601 $ 13,863 $ 9,310
Industrial 6,149 4,998 16,462 15,060
-------- -------- -------- --------
Operating earnings(1) 12,146 8,599 30,325 24,370
Corporate (1,555) (1,175) (4,283) (3,003)
Merger expenses --- --- --- (4,510)
Interest expense, net (1,815) (1,677) (5,150) (5,360)
Unallocated --- 6 --- 630
-------- -------- -------- --------
$ 8,776 $ 5,753 $ 20,892 $ 12,127
======== ======== ======== ========
(1) Operating earnings is defined as Operating profit plus
Other, net directly attributable to each segment.
</TABLE>
Three Months Ended September 30, 1996 and 1995
In the third quarter of 1996 the Company sold more products and
generated greater earnings than in any other quarterly period in
its history . Net sales, operating profit and net income
increased approximately 10%, 42% and 51%, respectively, in the
third quarter of 1996 when compared to the same period in 1995.
The increases were attributable to the positive operating
performance reported in each of the Company's two segments,
Electrical and Industrial Products.
Net sales were $119,198,000 in the third quarter of 1996 compared
to $108,561,000 reported in the same period in 1995, an increase
of $10,637,000 (10%). Each of the Company's two segments
contributed to the increase in net sales as demand for the
Company's key products remained vibrant throughout the period.
In the Electrical Products Segment, net sales increased
$7,662,000 (12%) in the third quarter of 1996 compared to the
same period in 1995 primarily because of greater shipments of
transformer products, particularly medium power transformers, and
the addition of CCI, partially offset by the impact of the
disposal of Nehring Electrical Works which was sold in the fourth
quarter of 1995. Net sales reported in the Industrial Products
Segment increased by $2,975,000 (7%) in the third quarter of 1996
compared to the same period in 1995 due primarily to record sales
of engine component products in North America.
Operating profit for the third quarter of 1996 was $11,241,000
compared to $7,911,000 reported for the same period in 1995, an
increase of $3,330,000 (42%). Operating profit margins advanced
to 9.4% of net sales in the third quarter for 1996, the Company's
highest in several years, because of the record sales volume
noted above and improved operating efficiencies in most key
product lines. This compares favorably to the operating profit
margin of 7.3% of net sales reported in the third quarter of
1995. In the Electrical Products Segment, operating earnings in
the third quarter of 1996 were $5,997,000 compared to $3,601,000
in the same period a year ago, an increase of $2,396,000 (67%).
The increase in operating profit was due primarily to the higher
sales volume noted above, benefits from profit improvement
programs and the addition of higher margin electronic wire
products from CCI. In the Industrial Products Segment, operating
earnings improved $1,151,000 (23%) to $6,149,000 in the third
quarter of 1996 when compared to the same period in 1995. The
increase was due primarily to the record shipments of engine
component products in North America and the positive impact of a
change in sales mix. Also in the Industrial Products Segment,
operating earnings in the third quarter of 1996 for the
international operations remained relatively constant compared to
the same period in 1995, though the operating performance in
Europe and Brazil began to show signs of improvement compared to
the first two quarters of 1996. Overall, operating expenses
increased $1,873,000 (13%) to $16,023,000 or 13.4% of net sales
in the third quarter of 1996 compared to $14,150,000 or 13.0% of
net sales reported in the third quarter of 1995. The increase in
operating expenses was due primarily to the higher sales noted
above and the addition of CCI. The increase in operating
expenses as a percentage of sales was due primarily to the sale
of Nehring which had substantially lower operating expenses
compared to the overall average.
Interest expense, net was $1,815,000 in the third quarter for
1996 compared to $1,677,000 for the same period in 1995, an
increase of $138,000 (8%). The increase was due to the higher
levels of debt outstanding in the 1996 period due to the
acquisition of CCI, partially offset by the lower cost of
borrowed funds as a result of the Company's amended and restated
loan agreement. Other, net was an expense of $650,000 in the
third quarter of 1996 compared to $481,000 in the year ago
period. The increase was due to miscellaneous one-time expenses,
none of which were significant.
Net income for the third quarter of 1996 was a record $5,129,000
compared to $3,393,000 reported in the same period in 1995, an
increase of $1,736,000 (51%). Earnings per share on a fully
diluted basis were $0.37 compared to $0.26 for the third quarter
of 1995, an increase of 42%. The Company's effective tax rate
for the third quarter of 1996 and 1995 was 41.6% and 41.0%,
respectively. The difference in rates was due primarily to the
acquisition of CCI.
In addition, the Company's consolidated backlog at September 30,
1996 was a record $118,279,000. This represents an increase of
$16,979,000 (17%) and $10,112,000 (9%) from December 31, 1995 and
September 30, 1995, respectively. The increases were due
primarily to increased orders for engine component products,
battery booster cables and the addition of CCI.
Nine Months Ended September 30, 1996 and 1995
Net sales, operating profit and net income (excluding the Merger
Expenses, defined below, in the 1995 period) for the first nine
months of 1996 were record highs for the Company, up 5%, 30% and
23%, respectively, over the results reported for the same period
in 1995.
Net sales for the first nine months of 1996 were $334,855,000
compared to $318,301,000 for the same period in 1995, an increase
of 5%. The increase was due primarily to the improved
performance in the Electrical Products Segment driven by the
record sales volume for medium power transformers and the
addition of CCI, partially offset by the sale of Nehring. In the
Industrial Products Segment, net sales for the first nine months
of 1996 were essentially the same when compared to the year ago
period primarily because record demand in North America for the
Company's various engine component products was offset by weak
orders for spring products domestically and lower shipments of
turbochargers in Brazil principally due to soft demand caused by
weak economic conditions in that country.
Operating profit for the first nine months of 1996 was
$27,485,000 compared to $21,102,000 reported for the same period
in 1995, an increase of $6,383,000 (30%). The increase in
operating profit was due to the positive financial performance in
both of the Company's product segments. Operating earnings in
the Electrical Products Segment increased $4,553,000 (49%) to
$13,863,000 in the first nine months of 1996 compared to the same
period in 1995 due to the record sales volume noted above,
improved gross profit margins on key products and the addition of
CCI. In the Industrial Product Segment, operating earnings
increased $1,402,000 (9%) to $16,462,000 in the first nine months
of 1996 compared to the same period in 1995. Operating earnings
in this segment were benefitted by strong demand in North America
for various engine component products and improved operating
efficiencies, partially offset by lower earnings for spring
products and Schwitzer's international operations. The
international operations were effected by changes in product mix,
higher material costs and the impact of a soft economic
environment in Brazil. Overall, consolidated operating profit
margins for the first three quarters of 1996 improved to 8.2% of
net sales from 6.6% reported in the same period in 1995. The
improvement was due to higher gross profit margins which were
benefitted by the record sales volumes noted above and improved
operating efficiencies at key manufacturing facilities, partially
offset by greater operating expenses as a percentage of sales.
Operating expenses for the first nine months of 1996 were
$44,967,000 or 13.4% of net sales compared to $41,063,000 or
12.9% of net sales reported in the year ago period due to the
higher sales volume noted above and the addition of CCI.
Interest expense, net for the first nine months of 1996 was
$5,150,000 compared to $5,360,000 for the same period in 1995, a
decrease of $210,000 (4%). The decrease was due to the lower
cost of borrowed funds in 1996, partially offset by higher debt
levels throughout the 1996 period due to the acquisition of CCI.
Other, net for the nine months ended September 30, 1996 was an
expense of $1,443,000 compared to expense of $3,615,000 in the
same period in 1995. Other, net in the 1995 period included
certain expenses related to the merger with Schwitzer, completed
in May 1995. Total merger expenses, including costs associated
with the early retirement of certain outstanding debt of
Schwitzer, were $5,600,000 net of tax (the "Merger Expenses").
Excluding the effect of the Merger Expenses, the Company recorded
income of $895,000 in the first nine months of 1995 in Other,
net, primarily because of a non-recurring gain on the settlement
of certain liabilities and income from a covenant not to compete
which expired in the second quarter of 1995.
Net income for the first nine months of 1996 increased $2,324,000
(23%) to $12,279,000 from $9,955,000 for the same period in 1995,
prior to deducting the Merger Expenses. After deducting the
Merger Expenses, the Company reported net income of $4,355,000
for the 1995 period. Earnings per share on a fully diluted basis
were $0.89 in the first three quarters of 1996 compared to $0.76
for the same period in 1995 prior to deducting the Merger
Expenses, and $0.33 after taking such expenses into account. In
addition, net income in the first nine months of 1995 was
benefitted by $1,251,000 (net of tax) or $0.09 per share related
to the non-recurring items included in Other, net noted above.
The Company's effective tax rate for the nine months ended
September 30, 1996 and 1995 was 41.2% and 48.7%, respectively.
The difference in rates was due primarily to the non-
deductibility of certain Merger Expenses in the 1995 period. The
fully diluted average shares outstanding in the first nine months
for 1996 were 13,872,000 compared to 13,181,000 in the year ago
period, an increase of 691,000 (5%).
OUTLOOK FOR 1996
Management believes the results of the third quarter support its
view that the Company is positioned to grow and prosper in the
future. However, management's optimism about the future
continues to be tempered somewhat by matters including the
potential impact of fluctuating raw material costs, an uncertain
economic environment in certain key markets and the potential for
rising interest rates. Management will continue to focus on
these variables very carefully.
SAFE HARBOR STATEMENT
Statements in this report that are not strictly historical are
"forward-looking" statements which should be considered as
subject to the many uncertainties that exist in the Company's
operations and business environment. These uncertainties
include, but are not limited to, economic conditions, market
demand and pricing, competitive and cost factors and other risk
factors.
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 Sixth Amendment to Credit Agreement dated as of July 1,
1996 among the Registrant, The Chase Manhattan Bank,
N.A. as Administrative Agent and certain other parties.
27.0 Financial Data Schedule for the nine month period ended
September 30, 1996.
(b) Reports on Form 8-K
During the period covered by this report, Registrant has
filed the following reports on Form 8-K.
Form 8-K dated September 20, 1996 and reporting under Item 5
an agreement to purchase assets.
<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.
Kuhlman Corporation
------------------------------------------
(Registrant)
/s/ Robert S. Jepson, Jr.
------------------------------------------
Robert S. Jepson, Jr.
Chairman and Chief Executive Officer
/s/ Vernon J. Nagel
------------------------------------------
Vernon J. Nagel
Executive Vice President of Finance,
Chief Financial Officer and Treasurer
Date: November 6, 1996
-----------------------
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS RESTATED SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE KUHLMAN SEPTEMBER 1996 CONSOLIDATED BALANCE SHEET AND THE STATEMENT OF
INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1996
<CASH> 1,696
<SECURITIES> 0
<RECEIVABLES> 70,557
<ALLOWANCES> 2,026
<INVENTORY> 54,238
<CURRENT-ASSETS> 132,431
<PP&E> 167,883
<DEPRECIATION> 91,917
<TOTAL-ASSETS> 270,403
<CURRENT-LIABILITIES> 78,668
<BONDS> 97,528
0
0
<COMMON> 13,466
<OTHER-SE> 69,262
<TOTAL-LIABILITY-AND-EQUITY> 270,403
<SALES> 334,855
<TOTAL-REVENUES> 334,855
<CGS> 262,403
<TOTAL-COSTS> 262,403
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 445
<INTEREST-EXPENSE> 5,460
<INCOME-PRETAX> 20,892
<INCOME-TAX> 8,613
<INCOME-CONTINUING> 12,279
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,279
<EPS-PRIMARY> 0.90
<EPS-DILUTED> 0.89
</TABLE>
EXECUTION COPY
SIXTH AMENDMENT to CREDIT AGREEMENT dated as of
July 1, 1996, among KUHLMAN CORPORATION, a Delaware
corporation (the "Borrower"); the Guarantors referred
to herein; the lenders listed in Annex I hereto under
the captions "Departing Lenders" (the "Departing
Lenders"), "Continuing Lenders" (the "Continuing
Lenders") and "Additional Lenders" (the "Additional
Lenders" and, together with the Departing Lenders and
the Continuing Lenders, the "Lenders"); and THE CHASE
MANHATTAN BANK, N.A., as swingline lender (in such
capacity, the "Swingline Lender") and as agent for the
Lenders (in such capacity, the "Administrative
Agent").
A. The Borrower, the Continuing Lenders and the Departing
Lenders are parties to the Existing Credit Agreement (such term and each
other capitalized term used and not otherwise defined herein having the
meaning assigned to it in the Amended Credit Agreements referred to in
paragraph B below).
B. The Borrower has requested the Continuing Lenders and
the Additional Lenders, and such Lenders are willing, to amend and
restate the Existing Credit Agreement in the form of the agreements
attached hereto as Exhibit A and Exhibit B (the "Amended Credit
Agreements") and to extend credit in the form of (a) the Revolving Loans
provided for in the Facility A Credit Agreement in an aggregate
principal amount at any time outstanding not exceeding $125,000,000,
(b) the Revolving Loans provided for in the Facility B Credit Agreement
in an aggregate principal amount at any time outstanding not exceeding
$125,000,000 and (c) Swingline Loans under the Facility A Credit
Agreement and the Facility B Credit Agreement in an aggregate principal
amount at any time outstanding not in excess of $10,000,000. The
proceeds of Loans under Facility A are to be used solely to finance
Permitted Business Acquisitions by the Borrower and for general
corporate purposes of companies acquired in Permitted Business
Acquisitions. The proceeds of Loans under Facility B are to be used
solely to provide for general corporate purposes of the Borrower.
C. At the time the amendment and restatement of the
Existing Credit Agreement becomes effective, the commitments of the
Departing Lenders under the Existing Credit Agreement will terminate and
the Departing Lenders shall cease to be parties to such Agreement.
NOW, THEREFORE, in consideration of the mutual agreements
contained in this Amendment and other good and valuable consideration,
the sufficiency and receipt of which are hereby acknowledged, the
parties hereto hereby agree as follows:
SECTION 1. Amendment of Credit Agreement; Termination of
certain Loan Documents. (a) The Existing Credit Agreement is hereby
amended and restated, effective as of the Restatement Closing Date (as
hereinafter defined), in the form of the Amended Credit Agreements.
Upon the effectiveness of such amendment and restatement, all loans
outstanding under the Existing Credit Agreement will be deemed to be
Swingline Loans and Eurodollar Loans outstanding under the Facility B
Credit Agreement in amounts and, in the case of the Eurodollar Loans,
with initial Interest Periods ending on such dates as designated in
writing by the Borrower to the Administrative Agent prior to the
Restatement Closing Date.
(b) The Loan Documents (as defined in the Existing Credit
Agreement), other than the Existing Credit Agreement, and all Liens
created thereunder are terminated as of the Restatement Closing Date.
SECTION 2. Assignment. (a) Subject to the conditions
referred to in Section 5, on and as of the Restatement Closing Date,
each Lender shall sell and assign or purchase, as the case may be, the
interests in the Loans outstanding under the Facility B Credit Agreement
by virtue of Section 1 above, in order that, after giving effect to all
such sales, assignments and purchases, such Loans will be held by the
Continuing Lenders and the Additional Lenders ratably in accordance with
their Commitments as set forth in Schedule 2.01 of the Facility B Credit
Agreement. Such assignments and purchases shall be without recourse,
warranty or representation, except that each assigning Lender
(collectively, the "Assigning Lenders") shall be deemed to have
represented that it is the legal and beneficial owner of the loans
assigned by it and that such loans are free and clear of any adverse
claim. The purchase price for each such sale, assignment and purchase
shall equal the principal amount of the subject Loans. Each Lender
purchasing Loans hereunder (collectively, the "Purchasing Lenders")
shall be deemed to have purchased such Loans from each of the Assigning
Lenders pro rata based on the amounts of the Loans being sold by such
Assigning Lenders. As of the Restatement Closing Date, NationsBank,
N.A., (South) in all capacities under the Existing Credit Agreement and
each Departing Lender shall cease to be a party to the Existing Credit
Agreement.
(b) On the Restatement Closing Date, (i) each Purchasing
Lender shall pay the amount to be paid by it pursuant to paragraph (a)
above by wire transfer to such account in New York City as the
Administrative Agent may designate in Federal funds not later than
12:00 (noon), New York City time, and (ii) the Administrative Agent
shall pay each Assigning Lender, solely from the amounts received by it
pursuant to clause (i) above, the amounts to be received by such
Assigning Lender pursuant to paragraph (a) above by wire transfer of
Federal funds not later than 3:00 p.m., New York City time to the
account of such Assigning Lender designated on the Administrative
Questionnaire submitted to the Administrative Agent by such Assigning
Lender or, in the case of any Departing Lender, to the account of such
Assigning Lender designated in writing to the Administrative Agent. The
Borrower agrees that if any Lender shall default in the payment of any
amount due from it under this Section 2, the Borrower shall promptly pay
the defaulted amount to the Administrative Agent by wire transfer of
immediately available funds, together with interest on such amount at
the Alternate Base Rate from the Restatement Closing Date to the date of
payment. Upon any such payment by the Borrower, (i) the Borrower shall
be subrogated to all rights of the assigning Lender against the
defaulting Lender and (ii) the Borrower shall have the right, at the
defaulting Lender's expense, upon notice to the defaulting Lender and to
the Administrative Agent, to require such defaulting Lender to transfer
and assign without recourse (in accordance with and subject to the
restrictions contained in Section 9.06 of the Amended Credit Agreements)
all its interests, rights and obligations under the Amended Credit
Agreements to another financial institution which shall assume such
interests, rights and obligations; provided that (A) no such assignment
shall conflict with any law, rule or regulation or order of any
Governmental Authority and (B) the assignee shall pay to the defaulting
Lender, in immediately available funds on the date of such assignment,
the outstanding principal of and interest accrued to the date of payment
on the Loans made or deemed made by such defaulting Lender under the
Amended Credit Agreements, if any, and all other amounts accrued for
such defaulting Lender's account or owed to it under the Amended Credit
Agreements.
SECTION 3. Fees; Interest. (a) On the Restatement Closing
Date, simultaneously with the effectiveness of the assignments provided
for in Section 2, the Borrower shall pay (i) to the Administrative
Agent, for its own account or the accounts of the Departing Lenders and
Continuing Lenders, as the case may be, the fees that have accrued to
but excluding the Restatement Closing Date but not been paid under the
Existing Credit Agreement and (ii) for the accounts of the
Administrative Agent and the Lenders entitled thereto, the Fees referred
to in Section 5(e). The fees referred to in this Section will be
payable in immediately available funds and, once paid, will not be
refundable.
(b) On the Restatement Closing Date, simultaneously with
the effectiveness of the assignments provided for in Section 2, the
Borrower shall pay to the Administrative Agent, for the accounts of the
Departing Lenders and the Continuing Lenders, all unpaid interest
accrued to but excluding the Restatement Closing Date on the loans
outstanding under the Existing Credit Agreement.
(c) The Administrative Agent will, upon receipt thereof,
promptly pay to the Departing Lenders and Continuing Lenders any fees
and unpaid interest received pursuant to clause (a) or (b) above for
their account.
SECTION 4. Representations and Warranties. The Borrower
represents and warrants to the Administrative Agent and to each of the
Lenders that:
(a) This Amendment and the Amended Credit Agreements have
been duly authorized, executed and delivered by it and constitute
its legal, valid and binding obligations enforceable in accordance
with their terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws
affecting the enforcement of creditors' rights generally, or by
general equity principles (whether enforcement is sought by
proceedings in equity or at law), including but not limited to
principles governing the availability of the remedies of specific
performance and injunctive relief.
(b) The representations and warranties set forth in Article
III of each Amended Credit Agreement and in the other Loan
Documents are true and correct in all material respects with the
same effect as if made on the date hereof, except to the extent
such representations and warranties expressly relate to an earlier
date, in which case they were true and correct in all material
respects on and as of such earlier date.
(c) As of the date hereof, no Default or Event of Default
has occurred and is continuing.
SECTION 5. Effectiveness. The sales, assignments and
purchases provided for in Section 2 shall become effective on the
Effective Date, but only upon satisfaction of the following conditions
precedent (such date, in the event such conditions shall be satisfied,
being the "Restatement Closing Date"):
(a) The Administrative Agent shall have received on behalf
of itself and the Lenders a favorable written opinion of Rudnick &
Wolfe, counsel for the Borrower, dated the Effective Date and
addressed to the Administrative Agent and the Lenders,
substantially to the effect set forth in Exhibit C hereto and
satisfactory to Cravath, Swaine & Moore, counsel for the
Administrative Agent. The Borrower hereby instructs such counsel
to deliver such opinion.
(b) All legal matters incident to this Amendment and the
Amended Credit Agreements, the borrowings and extensions of credit
thereunder and the other Loan Documents shall be satisfactory to
the Lenders and the Administrative Agent and to Cravath, Swaine &
Moore, counsel for the Administrative Agent.
(c) The Administrative Agent shall have received (i) a copy
of the certificate or articles of incorporation, including all
amendments thereto, of the Borrower and each Guarantor, certified
as of a recent date by the Secretary of State of the state of its
organization, and a certificate as to the good standing of the
Borrower and each Guarantor as of a recent date, from such
Secretary of State; (ii) a certificate of the Secretary or
Assistant Secretary of the Borrower dated the Effective Date and
certifying (A) that attached thereto is a true and complete copy
of the by-laws of the Borrower as in effect on the Effective Date
and reflecting all changes since a date prior to the date of the
resolutions described in clause (B) below, (B) that attached
thereto is a true and complete copy of resolutions duly adopted by
the Board of Directors of the Borrower authorizing the execution,
delivery and performance of this Amendment, the Amended Credit
Agreements and the other Loan Documents and the borrowings
thereunder, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect, (C) that
the certificate or articles of incorporation of the Borrower have
not been amended since the date of the last amendment thereto
shown on the certificate of good standing furnished pursuant to
clause (i) above, and (D) as to the incumbency and specimen
signature of each officer executing this Amendment, the Amended
Credit Agreements or any Loan Document or other document delivered
in connection herewith on behalf of the Borrower; (iii) a
certificate of another officer as to the incumbency and specimen
signature of the Secretary or Assistant Secretary executing the
certificate pursuant to (ii) above; and (iv) such other documents
as the Lenders or Cravath, Swaine & Moore, counsel for the
Administrative Agent, may reasonably request.
(d) The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by a Financial
Officer of the Borrower, confirming compliance with the conditions
precedent set forth in paragraphs (b) and (c) of Article IV of the
Amended Credit Agreements.
(e) The Administrative Agent shall have received all Fees
and other amounts due and payable on or prior to the Restatement
Closing Date hereunder or under the Amended Credit Agreements or
the Fee Letter.
(f) The Administrative Agent shall have received
counterparts of this Amendment and the Amended Credit Agreements
which, when taken together, bear the signatures of all the parties
hereto and thereto.
(g) The Pledge Agreement shall have been duly executed by
the parties thereto and delivered to the Administrative Agent and
shall be in full force and effect, and all the outstanding Capital
Stock of the Designated Subsidiaries shall have been duly and
validly pledged thereunder to the Administrative Agent for the
ratable benefit of the Secured Parties and certificates
representing such shares, accompanied by undated instruments of
transfer and stock powers endorsed in blank, shall be in the
actual possession of the Administrative Agent.
SECTION 6. Applicable Law. THIS AMENDMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK.
SECTION 7. Counterparts. This Amendment may be executed in
two or more counterparts, each of which shall constitute an original,
but all of which when taken together shall constitute but one contract.
Delivery of an executed counterpart of a signature page by facsimile
transmission shall be effective as delivery of a manually executed
counterpart of this Amendment.
SECTION 8. Expenses. The Borrower agrees to reimburse the
Administrative Agent for its reasonable out-of-pocket expenses in
connection with this Amendment and the Amended Credit Agreements,
including the reasonable fees, charges and disbursements of Cravath,
Swaine & Moore, counsel for the Administrative Agent.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their respective authorized officers as
of the day and year first written above.
KUHLMAN CORPORATION, as Borrower,
by
/s/ Vernon J. Nagel
-------------------------
Name: Vernon J. Nagel
Title: Executive Vice President
of Finance
KUHLMAN ELECTRIC CORPORATION,
COLEMAN CABLE SYSTEMS, INC.,
COMMUNICATION CABLE, INC.,
SCHWITZER, INC.,
SCHWITZER U.S. INC.,
ASSOCIATED ENGINEERING COMPANY,
and
BARON WIRE & CABLE CORP., as Guarantors,
by
/s/ Vernon J. Nagel
--------------------------
Name: Vernon J. Nagel
Title: Vice President
THE CHASE MANHATTAN BANK, N.A.,
individually and as Administrative Agent,
by
/s/ Bruce S. Borden
--------------------------
Name: Bruce S. Borden
Title: Vice President
ABN AMRO BANK N.V.,
ATLANTA AGENCY,
by
/s/ Steven Hipsman
--------------------------
Name: Steven Hipsman
Title: Vice President
by
/s/ Robert Budnek
--------------------------
Name: Robert Budnek
Title: Assistant Vice President
AMSOUTH BANK OF ALABAMA,
by
/s/ Dennis S. Losin
--------------------------
Name: Dennis S. Losin
Title: Vice President
THE FIRST NATIONAL BANK OF BOSTON,
by
/s/ Rod Guinn
---------------------------
Name: Rod Guinn
Title: Director
BANQUE PARIBAS, NEW YORK BRANCH,
by
/s/ Duane P. Helkowski
----------------------------
Name: Duane P. Helkowski
Title: Assistant Vice President
by
/s/ Ann C. Pifer
----------------------------
Name: Ann C. Pifer
Title: Vice President
COMERICA BANK,
by
/s/ John M. Costa
----------------------------
Name: John M. Costa
Title: Vice President
CREDIT LYONNAIS, ATLANTA AGENCY,
by
/s/ David M. Cawrse
----------------------------
Name: David M. Cawrse
Title: Vice President
FIRST UNION NATIONAL BANK OF GEORGIA,
by
/s/ Louis K. Beasley, III
----------------------------
Name: Louis K. Beasley, III
Title: Vice President
HARRIS TRUST AND SAVINGS BANK,
by
/s/ Patrick J. McDonnell
----------------------------
Name: Patrick J. McDonnell
Title: Vice President
MELLON BANK, N.A.,
by
/s/ Clifford A. Mull
----------------------------
Name: Clifford A. Mull
Title: Assistant Vice President
NBD BANK,
by
/s/ J. Philip Lowman
----------------------------
Name: J. Philip Lowman
Title: First Vice President
PNC BANK, NATIONAL ASSOCIATION,
by
/s/ Robert J. Mitchell Jr.
----------------------------
Name: Robert J. Mitchell Jr.
Title: Vice President
THE SUMITOMO BANK, LIMITED,
by
/s/ Roger N. Arsham
----------------------------
Name: Roger N. Arsham
Title: Vice President
by
/s/ Lauren P. Carrigan
----------------------------
Name: Lauren P. Carrigan
Title: Assistant Vice-President
SUNTRUST BANK, ATLANTA,
by
/s/ Bradley J. Staples
----------------------------
Name: Bradley J. Staples
Title: Bank Officer
by
/s/ C. Wes Burton, Jr.
----------------------------
Name: C. Wes Burton, Jr.
Title: Vice President
WACHOVIA BANK OF GEORGIA, N.A.,
by
/s/ Kevin B. Harrison
----------------------------
Name: Kevin B. Harrison
Title: Vice President
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
by
/s/ Jeffrey Hwang
----------------------------
Name: Jeffrey Hwang
Title: Vice President
NATIONSBANK CORPORATION,
by
/s/ Shawn B. Welch
----------------------------
Name: Shawn B. Welch
Title: Vice President
ANNEX I
Departing Lenders
Morgan Guaranty Trust Company of New York
NationsBank Corporation
Continuing Lenders
The Chase Manhattan Bank, N.A.
The First National Bank of Boston
Harris Trust and Savings Bank
NBD Bank
Suntrust Bank, Atlanta
Additional Lenders
ABN Amro Bank N.V., Atlanta Agency
Amsouth Bank of Alabama
Banque Paribas, New York Branch
Comerica Bank
Credit Lyonnais, Atlanta Agency
First Union National Bank of Georgia
Mellon Bank, N.A.
PNC Bank, National Association
The Sumitomo Bank, Limited
Wachovia Bank of Georgia, N.A.
EXECUTION COPY
364-DAY AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of July 1, 1996
among
KUHLMAN CORPORATION,
THE GUARANTORS PARTY HERETO,
THE LENDERS PARTY HERETO
and
THE CHASE MANHATTAN BANK, N.A.,
as Administrative Agent
[CS&M Ref. No. 6700-426]
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Defined Terms 1
SECTION 1.02. Terms Generally 14
ARTICLE II
The Credits
SECTION 2.01. Commitments 14
SECTION 2.02. Revolving Loans 15
SECTION 2.03. Borrowing Procedure 15
SECTION 2.04. Repayment of Loans; Evidence
of Debt 16
SECTION 2.05. Fees 16
SECTION 2.06. Interest on Loans 17
SECTION 2.07. Default Interest 17
SECTION 2.08. Alternate Rate of Interest 18
SECTION 2.09. Termination and Reduction of
Commitments 18
SECTION 2.10. Conversion and Continuation of
Revolving Borrowings 18
SECTION 2.11. Repayment of Revolving Borrowings and
Swingline Loans 20
SECTION 2.12. Prepayment 20
SECTION 2.13. Reserve Requirements; Change
in Circumstances 21
SECTION 2.14. Change in Legality 22
SECTION 2.15. Indemnity 22
SECTION 2.16. Pro Rata Treatment 23
SECTION 2.17. Sharing of Setoffs 23
SECTION 2.18. Payments 23
SECTION 2.19. Taxes 24
SECTION 2.20. Duty to Mitigate; Assignment of
Commitments Under Certain
Circumstances 25
SECTION 2.21. Extension of Conversion Date 25
SECTION 2.22. Swingline Loans 26
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers 27
SECTION 3.02. Authorization 28
SECTION 3.03. Enforceability 28
SECTION 3.04. Governmental Approvals 28
SECTION 3.05. Financial Condition 28
SECTION 3.06. No Material Adverse Change 28
SECTION 3.07. Title to Properties; Possession
Under Leases 28
SECTION 3.08. Subsidiaries 29
SECTION 3.09. Litigation; Compliance with Laws 29
SECTION 3.10. Agreements 29
SECTION 3.11. Federal Reserve Regulations 29
SECTION 3.12. Investment Company Act; Public Utility
Holding Company Act 30
SECTION 3.13. Use of Proceeds 30
SECTION 3.14. Tax Returns 30
SECTION 3.15. Employee Benefit Plans 30
SECTION 3.16. No Material Misstatements 30
SECTION 3.17. Environmental and Safety Matters 31
SECTION 3.18. Security Documents 31
ARTICLE IV
Conditions of Lending 31
ARTICLE V
Affirmative Covenants
SECTION 5.01. Existence; Businesses and Properties 32
SECTION 5.02. Insurance 32
SECTION 5.03. Taxes 33
SECTION 5.04. Financial Statements, Reports, etc. 33
SECTION 5.05. Litigation and Other Notices 34
SECTION 5.06. Employee Benefits 34
SECTION 5.07. Books and Records; Inspection Rights 34
SECTION 5.08. Compliance with Laws 34
SECTION 5.09. Use of Proceeds 34
SECTION 5.10. Further Assurances 34
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness 35
SECTION 6.02. Liens 36
SECTION 6.03. Sale and Leaseback Transactions 37
SECTION 6.04. Investments, Loans and Advances 38
SECTION 6.05. Mergers, Consolidations, Sales of
Assets and Acquisitions 38
SECTION 6.06. Restrictions on Ability of
Subsidiaries to Pay Dividends 39
SECTION 6.07. Transactions with Affiliates 39
SECTION 6.08. Interest Coverage Ratio 39
SECTION 6.09. Leverage Ratio 39
SECTION 6.10. Consolidated Net Worth 39
ARTICLE VII
Events of Default 40
ARTICLE VIII
The Administrative Agent 42
ARTICLE IX
Guarantee 44
ARTICLE X
Miscellaneous
SECTION 10.01. Notices 46
SECTION 10.02. No Waivers; Amendments 46
SECTION 10.03. Governing Law; Submission to
Jurisdiction 47
SECTION 10.04. Expenses; Indemnity 48
SECTION 10.05. Survival of Agreements,
Representations and Warranties, etc.49
SECTION 10.06. Successors and Assigns 49
SECTION 10.07. Right of Setoff 51
SECTION 10.08. Severability 51
SECTION 10.09. Cover Page, Table of Contents and
Section Headings 51
SECTION 10.10. Counterparts; Effectiveness 51
SECTION 10.11. Waiver of Jury Trial 51
SECTION 10.12. Entire Agreement 52
SECTION 10.13. Interest Rate Limitations 52
Exhibits and Schedules
Exhibit A Form of Administrative Questionnaire
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Additional Guarantor Agreement
Exhibit D Form of Pledge Agreement
Schedule 2.01 Lenders and Commitments
Schedule 3.08 Subsidiaries
364-DAY AMENDED AND RESTATED
CREDIT AGREEMENT dated as of July 1, 1996,
among KUHLMAN CORPORATION, a Delaware
corporation (the "Borrower"); the Guarantors
referred to herein; the financial institutions from
time to time party hereto, initially consisting of the
institutions listed in Schedule 2.01 (the "Lenders");
and THE CHASE MANHATTAN BANK, N.A., as
swingline lender (in such capacity, the "Swingline
Lender") and as agent for the Lenders (in such
capacity, the "Administrative Agent").
The Borrower has requested the Lenders, and the Lenders,
pursuant to the Sixth Amendment to the Existing Credit Agreement (such
term and each other capitalized term used and not otherwise defined herein
having the meaning assigned to it in Article I), have agreed, to extend credit
in the form of (a) Revolving Loans at any time and from time to time on or
after the Effective Date and prior to the Conversion Date, in an aggregate
principal amount at any time outstanding not exceeding $125,000,000 and (b)
Swingline Loans in an aggregate principal amount outstanding not in excess
of the lesser of (i) $10,000,000 minus the aggregate amount of the swingline
loans outstanding under the Facility B Credit Agreement at such time and (ii)
the excess of the aggregate amount of the Commitments over the Aggregate
Revolving Loan Exposure at such time. The proceeds of Revolving Loans
and Swingline Loans are to be used solely to finance Permitted Business
Acquisitions by the Borrower and for general corporate purposes of
companies acquired in Permitted Business Acquisitions.
Accordingly, the Borrower, the Guarantors, the Lenders, the
Swingline Lender and the Administrative Agent agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this
Agreement, the following terms shall have the meanings specified below:
"ABR Loan" shall mean any Revolving Loan bearing
interest at a rate determined by reference to the Alternate Base Rate in
accordance with the provisions of Article II.
"ABR Borrowing" shall mean a Borrowing comprised of
ABR Loans.
"Additional Guarantor Agreement" shall mean an Additional
Guarantor Agreement in the form of Exhibit C.
"Administrative Agent Fees" shall have the meaning
assigned to such term in Section 2.05(b).
"Administrative Questionnaire" shall mean an
Administrative Questionnaire in the form of Exhibit A.
"Affiliate" shall mean, when used with respect to a specified
person, another person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with
the person specified.
"Aggregate Revolving Loan Exposure" shall mean the
aggregate amount of the Lenders' Revolving Loan Exposures.
"Alternate Base Rate" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect
on such day plus 1/2 of 1%. For purposes hereof, "Prime Rate" shall mean
the rate of interest per annum publicly announced from time to time by the
Administrative Agent 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 effective. "Base CD Rate" shall mean the
sum of (a) the product of (i) the Three-Month Secondary CD Rate and
(ii) Statutory Reserves and (b) the Assessment Rate. "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 Board through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices of
the 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 the Administrative Agent from
three New York City negotiable certificate of deposit dealers of recognized
standing selected by it. "Federal Funds Effective Rate" shall mean, for any
day, the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as reported on such Business Day by the Federal Reserve Bank of
New York, or, if such rate is not so reported for any day which is a Business
Day, the average of the quotations for the day for such transactions received
by the Administrative Agent or Swingline Lender, as applicable, from three
Federal funds brokers of recognized standing selected by it. 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 Base CD
Rate or the Federal Funds Effective Rate or both for any reason, including the
inability of the Administrative Agent to obtain sufficient quotations in
accordance with the terms thereof, 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 in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds Effective Rate, respectively.
"Applicable Margin" shall mean, for any day, with respect
to any Eurodollar Loan or Swingline Loan, as the case may be, the applicable
percentage set forth below under the caption "LIBOR Spread" or "Swingline
Spread", as the case may be, based upon the Leverage Ratio as set forth
below:
Leverage
Ratio
LIBOR
Spread
Swingline
Spread
Category 1
Less than or equal to 1.75
0.5000
0.5625
Category 2
Greater than 1.75 but less than
or equal to 2.50
0.6250
0.6875
Category 3
Greater than 2.50 but less than
or equal to 3.00
0.7500
0.8125
Category 4
Greater than 3.00 but less than
or equal to 3.50
1.0000
1.0625
Category 5
Greater than 3.50
1.5000
1.5625
The Leverage Ratio utilized for purposes of determining the Eurodollar
Spread and the Swingline Spread shall be that in effect as of the last day of
the most recently completed fiscal quarter of the Borrower in respect of
which financial statements have been delivered pursuant to this Agreement or
the Existing Credit Agreement. Each change in the Applicable Margin
resulting from a change in the Leverage Ratio shall be effective with respect
to all Loans and Commitments outstanding on and after the date of delivery
to the Administrative Agent of the applicable financial statements to the date
of delivery of financial statements and certificates indicating another such
change.
"Applicable Percentage" means, with respect to any Lender,
the percentage of the total Commitments represented by such Lender's
Commitment. If the Commitments have terminated or expired, the
Applicable Percentages shall be determined based upon the Commitments
most recently in effect, giving effect to any assignments.
"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 the
Administrative Agent to the Federal Deposit Insurance Corporation (or any
successor) for insurance by such Corporation (or such successor) of time
deposits made in Dollars at the Administrative Agent's domestic offices.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an assignee, and accepted by the
Administrative Agent, in the form of Exhibit B or such other form as shall be
approved by the Administrative Agent and the Borrower.
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"Borrowing" shall mean (a) a group of Revolving Loans of
a single Type made by the Lenders on a single date pursuant to the
Commitments and as to which a single Interest Period is in effect or (b) a
Swingline Loan.
"Borrowing Request" shall mean a request by the Borrower
for a Borrowing in accordance with the terms of Section 2.03.
"Business Day" shall mean any day (other than a day which
is a Saturday, Sunday or legal holiday in the State of New York) on which
banks are open for business in New York City; provided, however, that when
used in connection with a Eurodollar Loan, the term "Business Day" shall
also exclude any day on which banks are not open for dealings in dollar
deposits in the London interbank market.
"Capital Lease Obligations" of any person shall mean the
obligations of such person and its consolidated subsidiaries to pay rent or
other amounts under any lease of (or other arrangement conveying the right
to use) real or personal property, which obligations are required to be
classified and accounted for as capital leases on a consolidated balance sheet
of such person under GAAP, and the amount of such obligations shall be the
capitalized amount thereof determined in accordance with GAAP.
"Capital Stock" of any person shall mean any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) equity of such person,
including any preferred stock, any limited or general partnership interest and
any limited liability company membership interest.
A "Change in Control" shall be deemed to have occurred if
(a) any person or group (within the meaning of Rule 13d-5 of the Securities
and Exchange Commission as in effect on the date hereof) shall own directly
or indirectly, beneficially or of record, shares representing 25% or more of
the aggregate ordinary voting power represented by the issued and
outstanding capital stock of the Borrower; (b) a majority of the seats (other
than vacant seats) on the board of directors of the Borrower shall at any time
have been occupied by persons who were neither (i) nominated by the board
of directors of the Borrower (or a designee or nominating committee thereof)
prior to their initial election to such board of directors, nor (ii)
appointed by directors so nominated; or (c) any person or group (other than the
board of directors of the Borrower) shall otherwise directly or indirectly
Control the Borrower. Notwithstanding anything in the foregoing definition, a
merger or consolidation of the Borrower that complies with the requirements of
Section 6.05(c) will in no event be deemed of itself to result in a Change in
Control.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender
(or, for purposes of Section 2.13(b), by any lending office of such Lender or
by such Lender's holding company, if any) with any request, guideline or
directive (whether or not having the force of law) of any Governmental
Authority addressing matters within the scope of its jurisdiction and made or
issued after the date of this Agreement.
"Chase Letters of Credit" shall mean letters of credit with an
aggregate face amount not to exceed $10,000,000 issued for the account of
the Borrower or any of the Subsidiaries by The Chase Manhattan Bank, N.A.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Collateral" shall have the meaning assigned to such term in
the Pledge Agreement.
"Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans hereunder as set forth
on Schedule 2.01 or in the Assignment and Acceptance pursuant to which
such Lender assumed its Commitment, as applicable, as the same may be
reduced from time to time pursuant to Section 2.09 and pursuant to
assignments by such Lender pursuant to Section 10.06.
"Commitment Fee" shall have the meaning assigned to such
term in Section 2.05(a).
"Consolidated Capital Expenditures" shall mean, for any
period, (a) the aggregate amount of all expenditures (whether paid in cash or
other consideration or accrued as a liability) by the Borrower and its
Subsidiaries during that period that, in conformity with GAAP, would be
included in "additions to property, plant or equipment" or comparable items
in a consolidated statement of cash flows of the Borrower and its Subsidiaries
for such period, minus (b) the aggregate net proceeds of all dispositions of
property, plant and equipment by the Borrower and its Subsidiaries in the
ordinary course of business during that period.
"Consolidated EBITDA" shall mean, for any period, the
Consolidated Net Income of the Borrower and the Subsidiaries for such
period plus, to the extent deducted in computing such consolidated net
income and without duplication, the sum of (a) income tax expense, (b)
interest expense, (c) depreciation and amortization expense, and
(d) extraordinary losses during such period, minus, to the extent added in
computing such consolidated net income and without duplication, (i) interest
income and (ii) extraordinary gains during such period. For any period,
Consolidated EBITDA shall be determined on a pro forma basis as if
Permitted Business Acquisitions occurring during such period had been
completed on the first day of such period. For purposes of this definition, the
acquisition of Communication Cable, Inc. shall be deemed to be a Permitted
Business Acquisition.
"Consolidated Interest Expense" shall mean, with respect to
any period, the net interest expense of the Borrower and the Subsidiaries for
such period, determined on a consolidated basis in accordance with GAAP.
For any period, Consolidated Interest Expense shall be determined on a pro
forma basis as if Permitted Business Acquisitions occurring during such
period had been completed on the first day of such period. For purposes of
this definition, the acquisition of Communication Cable, Inc. shall be deemed
to be a Permitted Business Acquisition.
"Consolidated Net Income" shall mean, with respect to the
Borrower for any period, the net income (or loss) of the Borrower and the
Subsidiaries for such period before extraordinary items, determined in
accordance with GAAP on a consolidated basis, provided that there shall be
excluded (i) income (or loss) of the Borrower in which any other person
(other than the Borrower or any of its wholly owned Subsidiaries) has a joint
interest, except to the extent of the amount of dividends or other distributions
actually paid to the Borrower or any of its Subsidiaries by such other person
during such period in cash, (ii) the income (or loss) of any person accrued
prior to the date it becomes a consolidated subsidiary of the Borrower or is
merged into or consolidated with such person or any of its consolidated
subsidiaries, (iii) the income of any consolidated subsidiary of the Borrower
to the extent that the declaration or payment of dividends or similar
distributions by such consolidated subsidiary of such income is not at the
time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to such consolidated subsidiary, (iv) expenses incurred in effecting
acquisitions and mergers by or involving the Borrower or any of its
consolidated subsidiaries, (v) non-cash charges (other than depreciation and
amortization) in accordance with GAAP and (vi) any extraordinary gains or
extraordinary income net of any extraordinary losses.
"Consolidated Net Worth" shall mean, at any date, the
consolidated stockholders' equity of the Borrower and the Subsidiaries, as
determined on a consolidated basis in accordance with GAAP, but excluding
any gains or losses in periods ending after the date hereof as a result of
foreign currency translation.
"Consolidated Total Assets" shall mean the total assets of
the Borrower and the Subsidiaries, determined on a consolidated basis in
accordance with GAAP.
"Control" shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
a person, whether through the ownership of voting securities, by contract or
otherwise, and "Controlling" and "Controlled" shall have meanings correlative
thereto.
"Conversion Date" shall mean July 1, 1997, as such date
may be extended pursuant to Section 2.21.
"Default" shall mean any event or condition which with the
giving of notice or lapse of time or both would constitute an Event of
Default.
"Designated Subsidiary" shall mean each Significant
Subsidiary that is a Domestic Subsidiary.
"dollars" or "$" shall mean lawful money of the United
States of America.
"Domestic Subsidiary" shall mean any Subsidiary organized
under the laws of the United States of America or any state or political
subdivision thereof.
"Effective Date" shall mean the date hereof.
"Environmental and Safety Laws" shall have the meaning
assigned to such term in Section 3.17.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether
or not incorporated) that, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code, or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA Event" shall mean (i) any "reportable event", as
defined in Section 4043 of ERISA or the regulations issued thereunder, with
respect to a Plan; (ii) the adoption of any amendment to a Plan that would
require the provision of security pursuant to Section 401(a)(29) of the Code
or Section 307 of ERISA; (iii) the existence with respect to any Plan of an
"accumulated funding deficiency" (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (iv) the filing pursuant to
Section 412(d) of the Code or Section 303(d) of ERISA of an application for
a waiver of the minimum funding standard with respect to any Plan; (v) the
incurrence of any liability under Title IV of ERISA with respect to the
termination of any Plan or the withdrawal or partial withdrawal of the
Borrower or any of its ERISA Affiliates from any Plan or Multiemployer
Plan; (vi) the receipt by the Borrower or any ERISA Affiliate from the PBGC
or a plan administrator of any notice relating to the intention to terminate any
Plan or Plans or to appoint a trustee to administer any Plan; (vii) the receipt
by the Borrower or any ERISA Affiliate of any notice concerning the
imposition of Withdrawal Liability or a determination that a Multiemployer
Plan is, or is expected to be, insolvent or in reorganization, within the
meaning of Title IV of ERISA; and (viii) the occurrence of a "prohibited
transaction" with respect to which the Borrower or any Subsidiary is a
"disqualified person" (within the meaning of Section 4975 of the Code) and
with respect to which the Borrower or any Subsidiary would be liable for the
payment of an excise tax.
"Eurodollar Borrowing" shall mean a Borrowing comprised
of Eurodollar Loans.
"Eurodollar Loan" shall mean any Revolving Loan bearing
interest at a rate determined by reference to the LIBO Rate in accordance
with the provisions of Article II.
"Event of Default" shall have the meaning assigned to such
term in Article VII.
"Excluded Taxes" means, with respect to the Administrative
Agent, any Lender or any other recipient of any payment to be made by or
on account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the
jurisdiction under the laws of which it is organized, or the jurisdiction in
which its principal office is located or, in the case of any Lender, in which
its applicable lending office is located, (b) any branch profits taxes imposed
by the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located and (c) in the case of a Foreign
Lender, any U.S. Federal withholding tax imposed on amounts payable to
such Foreign Lender under this Agreement because of its failure or inability
to comply with Section 2.19(f) or for any other reason, unless (and to the
extent that) (i) such withholding tax liability arises or is increased by reason
of a Change in Law occurring after such Foreign Lender becomes a Lender
under this Agreement or (ii) such Foreign Lender's assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from the
Borrower with respect to such withholding tax liability pursuant to Section
2.19(a).
"Existing Credit Agreement" shall mean the Credit
Agreement dated as of December 15, 1993, among the Borrower,
NationsBank of Georgia, N.A. ("NationsBank") and the Chase Manhattan
Bank, N.A. as Managing Agents and Lenders, NationsBank as administrative
agent for the lenders party thereto and The Chase Manhattan Bank, N.A., as
syndication agent, as amended to but excluding the date hereof.
"Extension Date" shall mean each date that would have been
the Conversion Date but for an extension effected pursuant to Section 2.21.
"Facility B Credit Agreement" shall mean the Five-Year
Amended and Restated Credit Agreement dated as of the date hereof among
the Borrower, the lenders party thereto and The Chase Manhattan Bank, N.A.,
as Administrative Agent.
"Federal Funds Effective Rate" shall have the meaning
assigned to such term in the definition of "Alternate Base Rate".
"Fee Letter" shall mean the Fee Letter dated May 15, 1996,
between the Borrower and the Administrative Agent.
"Fees" shall mean the Commitment Fees and the
Administrative Agent Fees.
"Financial Officer" of any person shall mean the chief
financial officer, the treasurer, the Director of Finance, the principal
accounting officer or the Manager of Corporate Accounting of such person or
any other senior financial officer designated by the Chief Financial Officer in
a notice delivered to the Administrative Agent.
"Foreign Lender" means any Lender that is organized under
the laws of a jurisdiction other than that in which the Borrower is located.
For purposes hereof, the United States of America and each State thereof
shall be considered to constitute a single jurisdiction.
"GAAP" shall mean generally accepted accounting
principles applied on a consistent basis.
"Governmental Authority" shall mean any Federal, state,
local or foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantee" of or by any person shall mean any obligation,
contingent or otherwise, of such person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other person (the "primary
obligor") (excluding endorsements of checks for collection or deposit in the
ordinary course of business) in any manner, whether directly or indirectly,
and including any obligation of such person, direct or indirect, (i) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or to purchase (or to advance or supply funds for the purchase
of) any security for the payment of such Indebtedness, (ii) to purchase
property, securities or services for the purpose of assuring the owner of such
Indebtedness of the payment of such Indebtedness or (iii) to maintain working
capital, equity capital or other financial statement condition or liquidity of
the primary obligor so as to enable the primary obligor to pay such
Indebtedness.
"Guarantor" shall mean each Subsidiary executing this
Agreement as a Guarantor and each other Subsidiary hereafter becoming a
Guarantor as provided in Section 5.10.
"Indebtedness" of any person shall mean, without
duplication, (a) all obligations of such person for borrowed money or with
respect to deposits or advances of any kind (including repurchase
obligations), (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such person
upon which interest charges are customarily paid, (d) all obligations of such
person under conditional sale or other title retention agreements relating to
property purchased by such person, (e) all obligations of such person issued
or assumed as the deferred purchase price of property or services (other than
accounts payable to suppliers incurred in the ordinary course of business),
(f) all Capital Lease Obligations of such person, (g) all obligations of others
secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property or
assets owned or acquired by such person, whether or not the obligations
secured thereby have been assumed, (h) all Guarantees of such person, (i) all
obligations of such person with respect to interest rate protection agreements,
foreign currency exchange agreements or other hedging arrangements (valued
at the termination value thereof computed in accordance with a method
approved by the International Swap Dealers Association and agreed to by
such person in the applicable hedging agreement, if any) and (j) all
obligations, contingent or otherwise, of such person as an account party in
respect of letters of credit, letters of guaranty and bankers' acceptances. The
Indebtedness of any person shall include, without duplication, the
Indebtedness of any other entity (including any partnership in which such
person is a general partner) to the extent such person is liable therefor as a
result of such person's ownership interest in or other relationship with such
entity, except to the extent the terms of Indebtedness provide that such person
is not liable therefor.
"Indemnitee" shall have the meaning assigned to such term
in Section 10.04.
"Interest Payment Date" shall mean, with respect to any
Loan, the last day of the Interest Period applicable to the Borrowing of which
such Loan is a part and, in the case of a Eurodollar Borrowing with an
Interest Period of more than three months' duration, each day that would have
been an Interest Payment Date had successive Interest Periods of three
months' duration been applicable to such Borrowing, 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 mean (a) as to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing or on the
last day of the immediately preceding Interest Period applicable to such
Borrowing, as the case may be, and ending on the numerically corresponding
day (or, if there is no numerically corresponding day, on the last day) in the
calendar month that is 1, 2, 3 or 6 months thereafter (or 12 months thereafter
in the event each Lender shall at the time be making available interest periods
of such duration), as the Borrower may elect, and (b) as to any
ABR Borrowing, the period commencing on the date of such Borrowing or
on the last day of the immediately preceding Interest Period applicable to
such Borrowing, as the case may be, and ending on the earliest of (i) the next
succeeding March 31, June 30, September 30 or December 31, (ii) the
Maturity Date and (iii) the date such Borrowing is converted to a Borrowing
of a different Type in accordance with Section 2.10 or repaid or prepaid in
accordance with Section 2.11 or 2.12; provided, however, that if any Interest
Period would end on a day other than a Business Day, such Interest Period
shall be extended to the next succeeding Business Day unless, in the case of
a Eurodollar Borrowing only, such next succeeding Business Day would fall
in the next calendar month, in which case such Interest Period shall end on
the next preceding Business Day. Interest shall accrue from and including the
first day of an Interest Period to but excluding the last day of such Interest
Period.
"Lenders" shall mean (a) the financial institutions listed on
Schedule 2.01 (other than any such financial institution that has ceased to be
a party hereto, pursuant to an Assignment and Acceptance) and (b) any
financial institution that has become a party hereto pursuant to an Assignment
and Acceptance. Unless the context indicates otherwise, the term "Lenders"
shall include the Swingline Lender.
"Leverage Ratio" shall mean, on any date, the ratio of
(a) Total Indebtedness as of such date to (b) the Consolidated EBITDA of the
Borrower and the Subsidiaries for the period of four consecutive fiscal
quarters ended most recently on or prior to such date, determined on a
consolidated basis in accordance with GAAP.
"LIBO Rate" shall mean, with respect to any Eurodollar
Borrowing, an interest rate per annum (rounded upwards, if necessary, to the
next higher 1/16th of 1%) equal to the rate at which dollar deposits
approximately equal in principal amount to the Administrative Agent's portion
of such Eurodollar Borrowing and for a maturity comparable to the applicable
Interest Period are offered in immediately available funds to the
Administrative Agent in the London interbank market at approximately 11:00
a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Lien" shall mean, with respect to any asset, (a) any
mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or
security interest in, on or of such asset, (b) the interest of a vendor or a
lessor under any conditional sale agreement, capital lease or title retention
agreement relating to such asset and (c) in the case of securities, any purchase
option, call or similar right of a third party with respect to such securities.
"Loan Documents" shall mean this Agreement, the Pledge
Agreement, any note issued to any Lender by the Borrower pursuant to this
Agreement, any security agreement entered into pursuant to Section 5.10 and
any amendment, supplement, modification, consent or waiver of, to or in
respect of any of the foregoing.
"Loans" shall mean the Revolving Loans and the Swingline
Loans.
"Margin Stock" shall have the meaning assigned to such
term in Regulation U.
"Material Adverse Effect" shall mean (a) a material adverse
effect on the business, assets, operations, prospects or financial condition of
the Borrower and the Subsidiaries taken as a whole, (b) any material
impairment of the ability of the Borrower or any Subsidiary to perform any
of its obligations under any Loan Document or (c) any material impairment
of the rights of or benefits available to the Lenders or the Administrative
Agent under any of the Loan Documents.
"Material Indebtedness" means Indebtedness (other than the
Loans) of the Borrower and/or one or more of its consolidated Subsidiaries,
arising in one or more related or unrelated transactions, in an aggregate
principal amount exceeding $10,000,000.
"Maturity Date" shall mean the fourth anniversary of the
Conversion Date.
"Multiemployer Plan" shall mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Obligations" shall mean the obligations of the Borrower
under this Agreement (as it may hereafter be amended, restated, extended,
supplemented or otherwise modified from time to time) with respect to (i) the
principal amount of the Loans, (ii) interest on the Loans and (iii) all other
monetary obligations of the Borrower under this Agreement or any other
Loan Document.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution or
delivery of, or otherwise with respect to, this Agreement.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation referred to and defined in ERISA.
"Permitted Business Acquisition" shall mean any acquisition
of substantially all the assets of, or of shares or other equity interests in, a
person or division or line of business of a person (or any subsequent
investment made in a previously acquired Permitted Business Acquisition) if
immediately after giving effect thereto: (a) (i) a majority of the Capital Stock
of any acquired or newly formed corporation, partnership, association or other
business entity is owned directly or indirectly by the Borrower or (ii) the
Borrower holds directly or indirectly securities representing a majority of the
voting power of such acquired or newly formed corporation, partnership,
association or other business entity, (b) such person, division or line of
business is an industrial manufacturing company with its principal place of
business and its headquarters located in the United States, (c) a majority of
the board of directors or other governing body of any acquired corporation,
partnership, association or other business entity shall have approved such
acquisition prior to acquisition by the Borrower of equity interests therein or
the commencement by the Borrower of any tender offer or proxy solicitation,
(d) the Borrower and the Subsidiaries shall be in compliance, on a pro forma
basis after giving effect to such acquisition or formation, with the covenants
contained in Sections 6.08, 6.09 and 6.10, recomputed as at the last day of
the most recently ended fiscal quarter of the Borrower as if such acquisition
had occurred on the first day of each relevant period for testing such
compliance, and the Borrower shall have delivered to the Administrative
Agent a certificate of a Financial Officer to such effect, together with all
relevant financial information and calculations demonstrating such compliance
and (e) in the case of any acquisition involving consideration (whether in
cash or property, and including the aggregate amount of Indebtedness of such
acquired corporation, partnership, association or other business entity) in
excess of $75,000,000, the Required Lenders shall have given their prior
written consent to such acquisition.
"Permitted Investments" shall mean:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United
States of America (or by any agency thereof to the extent such
obligations are backed by the full faith and credit of the United
States of America), in each case maturing within 90 days from the
date of acquisition thereof;
(b) investments in commercial paper maturing within 90
days from the date of acquisition thereof and having, at such date of
acquisition, a rating of A-2 or better from Standard & Poor's Ratings
Group or a rating of P-2 or better from Moody's Investors Service,
Inc. (or, if either shall change the basis on which it establishes
ratings, the equivalent rating after such change);
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 90 days from the date
of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, any domestic
office of any commercial bank organized under the laws of the
United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than
$250,000,000 and whose short-term debt has, at such date of
acquisition, a rating of A or better from Standard & Poor's Ratings
Group or a rating of A or better from Moody's Investors Service, Inc.
(or, if either shall change the basis on which it establishes ratings,
the equivalent rating after such change); and
(d) other investment instruments approved in writing by the
Required Lenders and offered by financial institutions which have a
combined capital and surplus and undivided profits of not less than
$250,000,000.
"person" shall mean any natural person, corporation,
business trust, joint venture, association, company, partnership or
Governmental Authority (including any agency or political subdivision
thereof).
"Plan" shall mean any employee pension benefit plan (other
than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA, and in respect of which
the Borrower or any ERISA Affiliate is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Pledge Agreement" shall mean the Pledge Agreement,
substantially in the form of Exhibit D, among the Borrower and the
Administrative Agent, as such agreement may be amended or modified from
time to time.
"Prime Rate" shall have the meaning assigned to such term
in the definition of "Alternate Base Rate".
"Register" shall have the meaning assigned to such term in
Section 10.06(f).
"Regulation G" shall mean Regulation G of the Board as
from time to time in effect and all official rulings and interpretations
thereunder or thereof.
"Regulation U" shall mean Regulation U of the Board as
from time to time in effect and all official rulings and interpretations
thereunder or thereof.
"Regulation X" shall mean Regulation X of the Board as
from time to time in effect and all official rulings and interpretations
thereunder or thereof.
"Repayment Date" shall have the meaning assigned to such
term in Section 2.11.
"Required Lenders" shall mean, at any time, Lenders having
Revolving Loans and unused Commitments representing at least 51% of the
sum of all Revolving Loans outstanding and unused Commitments at such
time.
"Responsible Officer" of any person shall mean any
executive officer or Financial Officer of such person and any other officer or
similar official thereof responsible for the administration of the obligations
of such person in respect of this Agreement.
"Revolving Borrowing" shall mean a Borrowing comprised
of Revolving Loans.
"Revolving Loan Exposure" shall mean, with respect to any
Lender at any time, the aggregate principal amount at such time of all
outstanding Revolving Loans of such Lender.
"Revolving Loans" shall mean the loans made by the
Lenders to the Borrower pursuant to Section 2.01. Each Revolving Loan
shall be a Eurodollar Loan or an ABR Loan.
"Secured Parties" shall have the meaning assigned to such
term in the Pledge Agreement.
"Significant Subsidiary" shall have the meaning assigned to
such term in Regulation S-X of the Securities and Exchange Commission as
in effect on the date hereof: provided, that (a) any Subsidiary that directly or
indirectly owns a Significant Subsidiary shall itself be a Significant
Subsidiary and (b) in the event Subsidiaries that would otherwise not be
Significant Subsidiaries shall in the aggregate account for a percentage in
excess of 20% of Consolidated Total Assets, then one or more of such
Subsidiaries designated by the Borrower (or, if the Borrower shall make no
designation, one or more of such Subsidiaries in descending order based on
their respective contributions to Consolidated Total Assets), shall be included
as Significant Subsidiaries to the extent necessary to eliminate such excess.
"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 reserve
percentages (including any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by the Board and any other
banking authority to which the Agent is subject for new negotiable
nonpersonal time deposits in Dollars of over $100,000 with maturities
approximately equal to three months in the case of the Base CD Rate (as
such term is used in the definition of "Alternate Base Rate"). 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 (the
"parent"), any corporation, company, association, partnership or other
business entity of which securities or other ownership interests representing
50% or more of the ordinary voting power are, at the time as of which any
determination is being made, beneficially owned or controlled by the parent,
by one or more subsidiaries of the parent or by the parent and one or more
subsidiaries of the parent.
"Subsidiary" shall mean any subsidiary of the Borrower.
"Swingline Exposure" shall mean, with respect to the
Swingline Lender at any time, the aggregate principal amount at such time of
all outstanding Swingline Loans of such Swingline Lender.
"Swingline Loan" shall mean the swingline loans made by
the Swingline Lender pursuant to Section 2.22.
"Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority, other than Excluded Taxes.
"Total Indebtedness" shall mean, at any time, all
Indebtedness of the Borrower and the Subsidiaries at such time (other than
Indebtedness described under clauses (h), (i) and (j) of the definition of
"Indebtedness"), determined on a consolidated basis in accordance with
GAAP.
"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. For purposes hereof, "Rate"
shall include the LIBO Rate, the Alternate Base Rate and the Federal Funds
Effective Rate.
"Withdrawal Liability" shall mean liability to a
Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan, as such terms are defined in Part I of Subtitle E of
Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions in
Section 1.01 shall apply equally to both the singular and plural forms of the
terms defined. 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". All references herein to Articles, Sections,
Exhibits and Schedules shall be deemed references to Articles and Sections
of, and Exhibits and Schedules to, this Agreement unless the context shall
otherwise require. Except as otherwise expressly provided herein, (a) any
reference in this Agreement to any Loan Document shall mean such
document as amended, restated, supplemented or otherwise modified from
time to time and (b) all terms of an accounting or financial nature shall be
construed in accordance with GAAP as in effect from time to time; provided,
however, that if after the effectiveness of any change in GAAP occurring
after the date of this Agreement the Borrower notifies the Administrative
Agent that the Borrower wishes to amend any covenant in Article VI or any
related definition to eliminate the effect of such change on the operation of
such covenant (or if the Administrative Agent notifies the Borrower that the
Required Lenders wish to amend Article VI or any related definition for such
purpose), then (i) the Borrower and the Administrative Agent shall negotiate
in good faith to agree upon an appropriate amendment to such covenant and
(ii) until such covenant is amended in a manner satisfactory to the Borrower
and the Required Lenders, the Borrower's compliance with such covenant
shall be determined on the basis of GAAP as in effect immediately before the
relevant change in GAAP became effective.
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and
conditions and relying upon the representations and warranties herein set
forth, each Lender agrees, severally and not jointly, to make Revolving Loans
to the Borrower, at any time and from time to time on or after the Effective
Date and until the earlier of the Conversion Date and the termination of the
Commitment of such Lender in accordance with the terms hereof, in an
aggregate principal amount at any time outstanding that will not result in
(x) such Lender's Revolving Loan Exposure exceeding such Lender's
Commitment or (y) the outstanding aggregate principal amount of the sum of
Swingline Loans and Revolving Loans exceeding the aggregate amount of the
Commitments. Within the limits set forth in the preceding sentence, the
Borrower may borrow, pay or prepay and reborrow Loans on and after the
Effective Date and prior to the Conversion Date, in each case subject to the
terms, conditions and limitations set forth herein. Amounts paid or prepaid in
respect of Revolving Loans on or after the Conversion Date may not be
reborrowed.
SECTION 2.02. Revolving Loans. (a) Each Revolving
Loan shall be made as part of a Borrowing consisting of Loans made by the
Lenders ratably in accordance with their Commitments; provided, however,
that the failure of any Lender to make any Revolving Loan shall not in itself
relieve any other Lender of its obligation to lend hereunder (it being
understood, however, that no Lender shall be responsible for the failure of
any other Lender to make any Loan required to be made by such other
Lender). The Revolving Loans comprising any Borrowing shall be in an
aggregate principal amount which is (i) an integral multiple of $1,000,000
and not less than $2,000,000 or (ii) equal to the remaining available balance
of the Commitments.
(b) Subject to Sections 2.08 and 2.14, each Borrowing other
than a Swingline Borrowing shall be comprised entirely of ABR Loans or
Eurodollar Loans as the Borrower may request pursuant to Section 2.03 or
2.10. Each Lender may at its option make any Eurodollar Loan by causing
any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement. Borrowings of more than one Type may be outstanding at the
same time; provided, however, that the Borrower shall not be entitled to
request any Borrowing which, if made, would result in more than 10
Eurodollar Borrowings outstanding hereunder at any time. For purposes of
the foregoing, Borrowings having different Interest Periods, regardless of
whether they commence on the same date, shall be considered separate
Borrowings.
(c) Each Lender shall make each Revolving Loan to be
made by it hereunder on the proposed date thereof by wire transfer to such
account as the Administrative Agent may designate in federal funds not later
than 1:00 p.m., New York City time, and the Administrative Agent shall by
3:00 p.m., New York City time, credit the amounts so received to a domestic
account designated by the Chief Financial Officer of the Borrower by notice
to the Administrative Agent, which account must be in the name of the
Borrower or, if a Borrowing shall not occur on such date because any
condition precedent herein specified shall not have been met, return the
amounts so received to the respective Lenders.
(d) Unless the Administrative Agent shall have received
notice from a Lender prior to the date of any Borrowing that such Lender
will not make available to the Administrative Agent such Lender's portion of
such Borrowing, the Administrative Agent may assume that such Lender has
made such portion available to the Administrative Agent on the date of such
Borrowing in accordance with paragraph (c) above and the Administrative
Agent may, in reliance upon such assumption, make available to the
Borrower on such date a corresponding amount. If the Administrative Agent
shall have so made funds available then, to the extent that such Lender shall
not have made such portion available to the Administrative Agent, such
Lender and the Borrower severally agree to repay to the Administrative Agent
forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Administrative Agent at
(i) in the case of the Borrower, the interest rate applicable at the time to the
Loans comprising such Borrowing and (ii) in the case of such Lender, a rate
determined by the Administrative Agent to represent its cost of overnight or
short-term funds (which determination shall be conclusive absent manifest
error). If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount shall constitute such Lender's Loan as
part of such Borrowing for purposes of this Agreement.
SECTION 2.03. Borrowing Procedure. In order to request
a Borrowing (other than a Swingline Borrowing), the Borrower, acting
through a Financial Officer, shall submit a Borrowing Request by hand
delivery or telecopy or by telephone to the Administrative Agent (a) in the
case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before a proposed Borrowing and (b) in the case of
an ABR Borrowing, not later than 11:00 a.m., New York City time, on the
day of a proposed Borrowing. Each Borrowing Request shall be irrevocable
and shall specify the following information: (i) whether such Borrowing is to
be a Eurodollar Borrowing or an ABR Borrowing; (ii) the date of such
Borrowing (which shall be a Business Day), (iii) the number and location of
the account to which funds are to be disbursed (which shall be an account
that complies with the requirements of Section 2.02(c)); (iv) the amount of
such Borrowing; and (v) if such Borrowing is to be a Eurodollar Borrowing,
the Interest Period with respect thereto; provided, however, that,
notwithstanding any contrary specification in any Borrowing Request, each
requested Borrowing shall comply with the requirements set forth in
Section 2.02. If no election as to the Type of Borrowing is specified in any
such notice, then the requested Borrowing shall be an ABR Borrowing. If no
Interest Period with respect to any Eurodollar Borrowing is specified in any
such notice, then the Borrower shall be deemed to have selected an Interest
Period of one month's duration. The Administrative Agent shall promptly
advise the applicable Lenders of any notice given pursuant to this
Section 2.03 and of each Lender's portion of the requested Borrowing.
SECTION 2.04. Repayment of Loans; Evidence of Debt.
(a) The Borrower agrees to pay the outstanding principal balance of each
Loan as provided in Section 2.11.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts with respect to each Loan made by such
Lender from time to time, including the amounts of principal and interest
payable and paid such Lender from time to time under this Agreement.
(c) The Administrative Agent shall maintain accounts in
which it will record (i) the amount of each Loan made hereunder, the Type of
each Loan made and the Interest Period applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due and payable from
the Borrower to each Lender hereunder and (iii) the amount of any sum
received by the Administrative Agent hereunder from the Borrower and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) and (c) of this Section 2.04 shall be prima facie evidence of the
existence and amounts of the obligations therein recorded; provided, however,
that the failure of any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligations of
the Borrower to repay the Loans in accordance with their terms.
(e) Notwithstanding any other provision of this Agreement,
in the event any Lender shall request a note evidencing the Loans made by it
hereunder to the Borrower, the Borrower shall deliver such a note reasonably
satisfactory to the Administrative Agent, payable to such Lender and its
registered assigns, and the interests represented by that note shall at all
times (including after any assignment of all or part of such interests pursuant
to Section 10.06) be represented by one or more notes payable to the payee
named therein or its registered assigns.
SECTION 2.05. Fees. (a) The Borrower agrees to pay to
each Lender, through the Administrative Agent, on the first day of January,
April, July and October in each year, and on the date on which the
Commitment of such Lender shall be terminated as provided herein, a
commitment fee (a "Commitment Fee") equal to 0.15% per annum on the
average daily unused amount of the Commitment of such Lender during the
preceding quarter (or shorter period commencing with the date hereof or
ending with the date on which the Commitment of such Lender shall have
been terminated). The Commitment Fee shall be computed on the basis of
the actual number of days elapsed in a year of 360 days. The Commitment
Fee due to each Lender shall commence to accrue on the date hereof and
shall cease to accrue on the date on which the Commitment of such Lender
shall be terminated as provided herein.
(b) The Borrower agrees to pay to the Administrative
Agent, for its own account, the fees set forth in the Fee Letter in the amounts
and at the times specified therein (the "Administrative Agent Fees").
(c) All Fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, if and as
appropriate, among the Lenders. Once paid, none of the Fees shall be
refundable under any circumstances (other than to correct errors in
computation or payment).
SECTION 2.06. Interest on Loans. (a) Subject to the
provisions of Section 2.07, the Loans comprising each ABR Borrowing shall
bear interest (computed on the basis of the actual number of days elapsed
over a year of 365 or 366 days, as the case may be, when determined by
reference to the Prime Rate and over a year of 360 days at all other times) at
a rate per annum equal to the Alternative Base Rate. Interest on each ABR
Borrowing shall be payable on each applicable Interest Payment Date except
as otherwise provided in this Agreement. The Alternate Base Rate shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
(b) Subject to the provisions of Section 2.07, the Loans
comprising each Eurodollar Borrowing shall bear interest (computed on the
basis of the actual number of days elapsed over a year of 360 days) at a rate
per annum equal to the LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Margin in effect from time to time. Interest
on each Eurodollar Borrowing shall be payable on each applicable Interest
Payment Date except as otherwise provided in this Agreement. The LIBO
Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
(c) Subject to the provisions of Section 2.07, each
Swingline Loan shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to
the Federal Funds Effective Rate plus the Applicable Margin in effect from
time to time. Interest on each Swingline Loan shall be payable on the first
Business Day of each calendar month and on the Conversion Date.
SECTION 2.07. Default Interest. If the Borrower shall
default in the payment of the principal of or interest on any Loan or any
other amounts becoming due hereunder, whether by scheduled maturity,
notice of prepayment, acceleration or otherwise, the Borrower shall on
demand from time to time from the Administrative Agent pay interest from
and including the date of such default, to the extent permitted by law, on
such defaulted amount up to (but not including) the date of actual payment
(after as well as before judgment) (a) in the case of overdue principal of any
Loan, at the rate otherwise applicable to such Loan hereunder plus 2.00% per
annum and (b) in all other cases, at a rate per annum (computed on the basis
of the actual number of days elapsed over a year of 365 or 366 days, as the
case may be, when determined by reference to the Prime Rate and over a
year of 360 days at all other times) equal to the Alternate Base Rate plus
2.00%.
SECTION 2.08. Alternate Rate of Interest. In the event,
and on each occasion, that on the day two Business Days prior to the
commencement of any Interest Period for a Eurodollar Borrowing the
Administrative Agent shall have determined that dollar deposits in the
principal amounts of the Loans comprising such Borrowing are not generally
available in the London interbank market, or that the rates at which such
dollar deposits are being offered will not adequately and fairly reflect the
cost to any Lender of making or maintaining its Eurodollar Loan during such
Interest Period, or that reasonable means do not exist for ascertaining the
LIBO Rate, the Administrative Agent shall, as soon as practicable thereafter,
give written or telecopy notice of such determination to the Borrower and the
Lenders. In the event of any such determination, any request by the
Borrower for a Eurodollar Borrowing pursuant to Section 2.03 or 2.10 shall,
until the Administrative Agent shall have advised the Borrower and the
Lenders that the circumstances giving rise to such notice no longer exist, be
deemed to be a request for an ABR Borrowing. Each determination by the
Administrative Agent hereunder shall be conclusive absent manifest error.
SECTION 2.09. Termination and Reduction of
Commitments. (a) The Commitments shall be automatically terminated at
5:00 p.m., New York City time, on the date 364 days after the date hereof, if
not terminated earlier pursuant to the terms hereof. The Commitments shall
be automatically reduced on each Extension Date by the aggregate principal
amount of the Revolving Borrowings outstanding on such Extension Date.
(b) Upon at least three Business Days' prior irrevocable
written, telecopy or telephonic notice given by a Financial Officer to the
Administrative Agent, the Borrower may at any time in whole permanently
terminate, or from time to time in part permanently reduce, the Commitments;
provided, however, that (i) each partial reduction of the Commitments shall
be in an amount which is an integral multiple of $1,000,000 and which is not
less than $5,000,000 (or, if less, the remaining amount of the Commitments)
and (ii) no such termination or reduction shall be made which would reduce
the Commitments to an amount less than the aggregate outstanding amount of
the Revolving Loans and Swingline Loans.
(c) Each reduction in the Commitments hereunder shall be
made ratably among the Lenders in accordance with their respective
applicable Commitments. The Borrower shall pay to the Administrative
Agent for the account of the Lenders, on the date of each termination or
reduction, the Commitment Fees on the amount of the Commitments so
terminated or reduced accrued to the date of such termination or reduction.
SECTION 2.10. Conversion and Continuation of Revolving
Borrowings. The Borrower shall, to the extent that no Event of Default has
occurred and is continuing, have the right at any time upon prior irrevocable
written, telecopy or telephonic notice given by a Financial Officer to the
Administrative Agent (i) not later than 12:00 (noon), New York City time,
one Business Day prior to conversion or continuation, to convert any
Eurodollar Borrowing into an ABR Borrowing or to continue on the last day
of the current Interest Period applicable thereto, any ABR Borrowing for an
additional Interest Period, (ii) not later than 11:00 a.m., New York City time,
three Business Days prior to conversion or continuation, to convert any ABR
Borrowing into a Eurodollar Borrowing or to continue any Eurodollar
Borrowing as a Eurodollar Borrowing for an additional Interest Period and
(iii) not later than 11:00 a.m., New York City time, three Business Days prior
to conversion, to convert the Interest Period with respect to any Eurodollar
Borrowing to another permissible Interest Period, subject in each case to the
following:
(a) each conversion or continuation shall be made pro rata
among the Lenders in accordance with the respective principal
amounts of the Loans comprising the converted or continued
Eurodollar or ABR Borrowing;
(b) if less than all the outstanding principal amount of any
Eurodollar or ABR Borrowing shall be converted or continued, then
each resulting Eurodollar or ABR Borrowing shall satisfy the
limitations specified in Sections 2.02(a) and (b) regarding the
principal amount and maximum number of Borrowings of the
relevant Type;
(c) each conversion or continuation shall be effected by each
Lender by recording for the account of such Lender the new Loan of
such Lender resulting from such conversion or continuation and
reducing the Loan (or portion thereof) of such Lender being
converted or continued by an equivalent principal amount; accrued
interest on a Loan (or portion thereof) being converted or continued
shall be paid by the Borrower at the time of conversion or
continuation;
(d) if any Eurodollar Borrowing is converted or continued at
a time other than the end of the Interest Period applicable thereto,
the Borrower shall pay, upon demand, any amounts due to the
Lenders pursuant to Section 2.15;
(e) 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 Borrowing;
(f) any portion of a Eurodollar Borrowing which cannot be
converted into or continued as a Eurodollar Borrowing by reason of
clause (e) above shall be automatically converted at the end of the
Interest Period in effect for such Borrowing into an ABR Borrowing;
and
(g) no Interest Period may be selected for any Eurodollar
Borrowing that would end later than a Repayment Date occurring on
or after the first day of such Interest Period if, after giving effect to
such selection, the aggregate outstanding amount of (i) the
Eurodollar Borrowings with Interest Periods ending on or prior to
such Repayment Date and (ii) the ABR Borrowings would not be at
least equal to the principal amount of Borrowings to be paid on such
Repayment Date.
Each notice pursuant to this Section 2.10 shall be
irrevocable and shall refer to this Agreement and specify (i) the identity and
amount of the Borrowing that the Borrower requests be converted or
continued, (ii) whether such Borrowing is to be converted to or continued as
a Eurodollar Borrowing or an ABR Borrowing, (iii) if such notice requests a
conversion, the date of such conversion (which shall be a Business Day) and
(iv) if such Borrowing is to be converted to or continued as a Eurodollar
Borrowing, the Interest Period with respect thereto. If no Interest Period is
specified in any such notice with respect to any conversion to or continuation
as a Eurodollar Borrowing, the Borrower shall be deemed to have selected an
Interest Period of one month's duration. The Administrative Agent shall
advise the other Lenders of any notice given pursuant to this Section 2.10 and
of each Lender's portion of any converted or continued Borrowing. If the
Borrower shall not have given notice in accordance with this Section 2.10 to
continue any Borrowing into a subsequent Interest Period (and shall not
otherwise have given notice in accordance with this Section 2.10 to convert
such Borrowing), such Borrowing shall, at the end of the Interest Period
applicable thereto (unless repaid pursuant to the terms hereof), automatically
be continued into a new Interest Period as an ABR Borrowing. Swingline
Loans may not be converted or continued hereunder.
SECTION 2.11. Repayment of Revolving Borrowings and
Swingline Loans. (a) The Revolving Borrowings outstanding on any
Extension Date or on the Conversion Date shall be payable as to principal in
sixteen consecutive equal installments payable on the first day of the October
next following the date on which such Extension Date or the Conversion Date
shall occur and on each January 1, April 1, July 1 or October 1 thereafter
until such Borrowings shall have been paid in full (each such date being
called a "Repayment Date").
(b) Each prepayment of principal of Revolving Borrowings
which shall have been outstanding on an Extension Date or the Conversion
Date pursuant to Section 2.12(a) shall be applied to reduce scheduled
installments of principal due with respect to such Revolving Borrowings
under this Section 2.11 after the date of such prepayment on a pro rata basis.
(c) To the extent not previously paid, all Revolving
Borrowings shall be due and payable on the Maturity Date. Each payment of
Revolving Borrowings pursuant to this Section 2.11 shall be subject to
Section 2.15, but shall otherwise be without premium or penalty.
(d) All Swingline Loans shall be due and payable on
demand, and shall in any event become due on the Conversion Date.
(e) Each payment pursuant to this Section 2.11 shall be
accompanied by accrued interest on the principal amount paid to but exclud-
ing the date of payment.
SECTION 2.12. Prepayment. (a) The Borrower shall have
the right at any time and from time to time to prepay any Revolving
Borrowing, in whole or in part, upon at least three Business Days' prior
written, telecopy or telephonic notice given by a Financial Officer to the
Administrative Agent before 11:00 a.m., New York City time; provided,
however, that each partial prepayment of a Borrowing shall be in an amount
which is an integral multiple of $1,000,000 and which is not less than
$2,000,000 (or, if less, the remaining amount outstanding of Revolving Loans
or Swingline Loans, as applicable).
(b) In the event of the termination by the Borrower of all
the Commitments prior to the Conversion Date, the Borrower shall repay or
prepay all outstanding Revolving Borrowings and Swingline Loans on the
date of such termination. If, after giving effect to any partial reduction of
the Commitments prior to the Conversion Date, the Aggregate Revolving Loan
Exposure plus the Swingline Exposure would exceed the aggregate amount of
the Commitments, the Borrower shall, on the date of such reduction, repay or
prepay Revolving Borrowings or Swingline Loans in an amount sufficient to
eliminate such excess.
(c) Each notice of prepayment shall specify the prepayment
date and the principal amount of each Revolving Borrowing (or portion
thereof) to be prepaid, shall be irrevocable and shall commit the Borrower to
prepay such Borrowing by the amount stated therein on the date stated
therein. All prepayments under this Section 2.12 shall be subject to
Section 2.15 but otherwise without premium or penalty. All prepayments
under this Section 2.12 shall be accompanied by accrued interest on the
principal amount being prepaid to but excluding the date of payment. Unless
otherwise specified in the applicable notice of prepayment, all prepayments
under this Section 2.12 shall be applied to outstanding ABR Borrowings up
to the full amount thereof and thereafter shall be applied to outstanding
Eurodollar Borrowings.
SECTION 2.13. Reserve Requirements; Change in
Circumstances. (a) Notwithstanding any other provision herein, if after the
date of this Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof (whether or not
having the force of law) shall change the basis of taxation of payments to any
Lender of the principal of or interest on any Eurodollar Loan made by such
Lender or any Fees or other amounts payable hereunder (other than changes
in respect of taxes imposed on the overall net income of such Lender by the
jurisdiction in which such Lender has its principal office or by any political
subdivision or taxing authority therein), or shall impose, modify or deem
applicable any reserve, special deposit or similar requirement against assets
of, deposits with or for the account of or credit extended by such Lender or
shall impose on such Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender,
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan, or to reduce the
amount of any sum received or receivable by such Lender hereunder (whether
of principal, interest or otherwise) by an amount deemed by such Lender in
good faith to be material, then the Borrower will pay to such Lender upon
demand such additional amount or amounts as will compensate such Lender
for such additional costs incurred or reduction suffered.
(b) If any Lender shall have determined in good faith that
the adoption after the date hereof of any law, rule, regulation, agreement or
guideline regarding capital adequacy, or any change in any of the foregoing
or in the interpretation or administration of any of the foregoing by any
Governmental Authority charged with the interpretation or administration
thereof, or compliance by any Lender (or any lending office of such Lender)
or any Lender's holding company with any request or directive regarding
capital adequacy (whether or not having the force of law) made or
promulgated after the date hereof by any such Governmental Authority, has
or would have the effect of reducing the rate of return on such Lender's
capital or on the capital of such Lender's holding company, if any, as a
consequence of its obligations under this Agreement or the Loans made by
such Lender pursuant hereto to a level below that which such Lender or such
Lender's holding company could have achieved but for such adoption, change
or compliance (taking into consideration such Lender's policies and the
policies of such Lender's holding company with respect to capital adequacy)
by an amount deemed by such Lender in good faith to be material, then from
time to time the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such Lender's holding company
for any such reduction suffered. It is acknowledged that this Agreement is
being entered into by the Lenders on the understanding that the Lenders will
not be required to maintain capital against the Commitments under currently
applicable laws, regulations and regulatory guidelines.
(c) If any Lender becomes entitled to claim any additional
amounts pursuant to this Section 2.13, it shall promptly notify the Borrower,
through the Administrative Agent, of the event by reason of which it has
become so entitled; provided that if any Lender fails to give such notice
within 90 days after it obtains such actual knowledge of such an event, such
Lender shall, with respect to additional amounts payable pursuant to this
Section 2.13 in respect of such event, only be entitled to payment under this
Section 2.13 with respect to the period from and after 90 days prior to the
date that such Lender does give such notice. A certificate of a Lender,
delivered through the Administrative Agent, setting forth such amount or
amounts as shall be necessary to compensate such Lender as specified in
paragraph (a) or (b) above, as the case may be, and the method by which
such amount or amounts shall have been determined, shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall
pay each Lender the amount shown as due on any such certificate delivered
by it within 30 days after the receipt of the same.
(d) The protection of this Section shall be available to each
Lender regardless of any possible contention of the invalidity or
inapplicability of the law, rule, regulation, guideline or other change or
condition which shall have occurred or been imposed.
SECTION 2.14. Change in Legality. (a) Notwithstanding
any other provision herein, if, after the date hereof, any change in any law or
regulation or in the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof or any judgment,
order or directive of any competent court, tribunal or authority shall make it
unlawful for any Lender to make or maintain any Eurodollar Loan or to give
effect to its obligations as contemplated hereby with respect to any Eurodollar
Loan, then, by written notice to the Borrower and to the Administrative
Agent:
(i) such Lender may declare that Eurodollar Loans will not
thereafter be made by such Lender hereunder, whereupon any request
for a Eurodollar Borrowing shall, as to such Lender only, be deemed
a request for an ABR Loan unless such declaration shall be
subsequently withdrawn; and
(ii) such Lender may require that all outstanding Eurodollar
Loans made by it be converted to ABR Loans, in which event all
such Eurodollar Loans shall be automatically converted to ABR
Loans as of the effective date of such notice as provided in
paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal which would otherwise have been
applied to repay the Eurodollar Loans that would have been made by such
Lender or the converted Eurodollar Loans of such Lender shall instead be
applied to repay the ABR Loans made by such Lender in lieu of, or resulting
from the conversion of, such Eurodollar Loans.
(b) For purposes of this Section 2.14, a notice to the
Borrower by any Lender shall be effective as to each Eurodollar Loan, if
lawful, on the last day of the Interest Period currently applicable to such
Eurodollar Loan; in all other cases such notice shall be effective on the date
of receipt by the Borrower.
SECTION 2.15. Indemnity. The Borrower shall indemnify
each Lender against any loss or expense which such Lender may sustain or
incur (and which such Lender shall in good faith deem material) as a
consequence of (a) any event, other than a default by such Lender in the
performance of its obligations hereunder, which results in (i) such Lender
receiving or being deemed to receive any amount on account of the principal
of any Eurodollar Loan prior to the end of the Interest Period in effect
therefor, (ii) the conversion of any Eurodollar Loan to an ABR Loan, or the
conversion of the Interest Period with respect to any Eurodollar Loan, other
than on the last day of the Interest Period in effect therefor, or (iii) any
Eurodollar Loan to be made by such Lender (including any Eurodollar Loan
to be made pursuant to a conversion or continuation under Section 2.10) not
being made after notice of such Loan shall have been given by the Borrower
hereunder (any of the events referred to in this clause (a) being called a
"Breakage Event") or (b) any default in the making of any payment or
prepayment required to be made hereunder with respect to any Eurodollar
Loan. In the case of any Breakage Event, such loss shall include an amount
equal to the excess, as reasonably determined by such Lender, of (i) its cost
of obtaining funds for the Eurodollar Loan that is the subject of such
Breakage Event for the period from the date of such Breakage Event to the
last day of the Interest Period in effect (or that would have been in effect)
for such Loan over (ii) the amount of interest determined by such Lender to be
likely to be realized by it in redeploying the funds released or not utilized by
reason of such Breakage Event for such period. A certificate of any Lender
setting forth any amount or amounts which such Lender is entitled to receive
pursuant to this Section 2.15 shall be delivered to the Borrower and shall be
conclusive absent manifest error.
SECTION 2.16. Pro Rata Treatment. Except as required
under Section 2.14 or 2.20(b), each Borrowing (other than a Swingline
Borrowing), each payment or prepayment of principal of any Borrowing
(other than a Swingline Borrowing), each payment of interest on the
Revolving Loans, each payment of the Commitment Fee and each reduction
of the Commitments shall be allocated pro rata among the Lenders in
accordance with their respective applicable Commitments (or, if such
Commitments shall have expired or been terminated, in accordance with the
respective principal amounts of their outstanding Revolving Loans). Each
Lender agrees that in computing such Lender's portion of any Borrowing to
be made hereunder, the Administrative Agent may, in its discretion, round
each Lender's percentage of such Borrowing to the next higher or lower
whole dollar amount.
SECTION 2.17. Sharing of Setoffs. Each Lender agrees
that if it shall, through the exercise of a right of banker's lien, setoff or
counterclaim against the Borrower, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, obtain payment (voluntary or involuntary) in respect of any
Revolving Loan or Loans as a result of which the unpaid principal portion of
its Revolving Loans shall be proportionately less than the unpaid principal
portion of the Revolving Loans of any other Lender, it shall be deemed
simultaneously to have purchased from such other Lender at face value, and
shall promptly pay to such other Lender the purchase price for, a participation
in the Revolving Loans of such other Lender, so that the aggregate unpaid
principal amount of the Revolving Loans and participations in Revolving
Loans held by each Lender shall be in the same proportion to the aggregate
unpaid principal amount of all Revolving Loans then outstanding as the
principal amount of its Revolving Loans prior to such exercise of banker's
lien, setoff or counterclaim or other event was to the principal amount of all
Loans outstanding prior to such exercise of banker's lien, setoff or counter-
claim or other event; provided, however, that, if any such purchase or
purchases or adjustments shall be made pursuant to this Section 2.17 and the
payment giving rise thereto shall thereafter be recovered, such purchase or
purchases or adjustments shall be rescinded to the extent of such recovery
and the purchase price or prices or adjustment restored without interest. The
Borrower expressly consents to the foregoing arrangements and agrees that
any Lender holding a participation in a Revolving Loan deemed to have been
so purchased may exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing by the Borrower to
such Lender by reason thereof as fully as if such Lender had made a
Revolving Loan directly to the Borrower in the amount of such participation.
SECTION 2.18. Payments. (a) With the exception of
Swingline Loans, payments in respect of which shall be made directly to the
Swingline Lender not later than 3:00 p.m. (New York City time) on the date
when due, the Borrower shall make each payment (including principal of or
interest on any Borrowing or any Fees or other amounts) hereunder and under
any other Loan Document not later than 11:00 a.m., local time at the place of
payment, on the date when due in immediately available funds; provided, that
any such payment may be made not later than 3:00 p.m. if the Borrower shall
have given irrevocable notice to the Administrative Agent not later than
11:00 a.m. that such payment will be made on such date. Each such payment
shall be made to the Administrative Agent at its offices at 270 Park Avenue,
New York, New York. Each such payment not received by the time due
shall be deemed received on the next Business Day. Each such payment
shall be made in dollars.
(b) Whenever any payment (including principal of or
interest on any Borrowing or any Fees or other amounts) hereunder or under
any other Loan Document shall become due, or otherwise would occur, on a
day that is not a Business Day, such payment may be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of interest or Fees, if applicable.
SECTION 2.19. Taxes. (a) Any and all payments by or an
account of any obligation of the Borrower hereunder shall be made free and
clear of and without deduction for any Taxes or Other Taxes; provided that if
the Borrower shall be required to deduct any Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent or
Lender (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall
make such deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent
and each Lender within 10 days after written demand therefor, for the full
amount of any Taxes or Other Taxes (including Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
paid by the Administrative Agent or such Lender, as the case may be, and
any liability (including penalties, interest and reasonable expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability
delivered to the Borrower by a Lender, or by the Administrative Agent on its
own behalf or on behalf of a Lender, shall be conclusive absent manifest
error.
(d) As soon as practicable after any payment of Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a
copy of the tax return reporting such payment or other evidence of such
payment reasonably satisfactory to the Administrative Agent.
(e) If any Lender shall become eligible for a refund in
respect of any Taxes or Other Taxes in respect of which the Borrower shall
have made a payment to such Lender under this Section 2.19, then, upon the
request of the Borrower, and at the Borrower's expense, such Lender shall
apply for such refund and, upon receipt thereof, will return to the Borrower
the amount so paid by it to the extent of such refund.
(f) Any Foreign Lender that is entitled to an exemption
from or reduction of withholding tax under the law of the jurisdiction in
which the Borrower is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, properly completed and executed forms
prescribed by applicable law (together with such other documentation or
certification as the Borrower may reasonably request) that will permit the
Borrower to make such payments without withholding or at a reduced rate.
SECTION 2.20. Duty to Mitigate; Assignment of
Commitments Under Certain Circumstances. (a) Any Lender claiming any
additional amounts payable pursuant to Section 2.13 or Section 2.19 shall use
reasonable efforts (consistent with legal and regulatory restrictions) to file
any certificate or document requested by the Borrower or to change the
jurisdiction of its applicable lending office if the making of such a filing or
change would avoid the need for or reduce the amount of any such additional
amounts which may thereafter accrue or avoid the circumstances giving rise
to such exercise and would not, in the sole determination of such Lender, be
otherwise disadvantageous to such Lender.
(b) In the event that any Lender shall have delivered a
notice or certificate pursuant to Section 2.13 or 2.14, or the Borrower shall be
required to make additional payments to any Lender under Section 2.19, the
Borrower shall have the right, at its own expense, upon notice to such Lender
and the Administrative Agent, to require such Lender to transfer and assign
without recourse (in accordance with and subject to the restrictions and
payments provided for in Section 10.06) all interests, rights and obligations
contained hereunder to another financial institution approved by the
Administrative Agent (which approval shall not be unreasonably withheld)
which shall assume such obligations; provided that (i) no such assignment
shall conflict with any law, rule or regulation or order of any Governmental
Authority and (ii) the assignee or the Borrower, as the case may be, shall pay
to the affected Lender in immediately available funds on the date of such
assignment the principal of and interest accrued to the date of payment on the
Loans made by it hereunder and all other amounts accrued for its account or
owed to it hereunder (including the additional amounts asserted and payable
pursuant to Section 2.13, 2.14 or 2.19, if any).
SECTION 2.21. Extension of Conversion Date. (a) The
Borrower may, on one or more occasions, by notice to the Administrative
Agent (which shall promptly deliver a copy to each of the Lenders) not fewer
than 45 days and not more than 60 days prior to the Existing Conversion
Date (as defined below) request that the Lenders extend the Conversion Date
for an additional 364 days from the Conversion Date then in effect hereunder
prior to such extension (the "Existing Conversion Date"). Each Lender,
acting in its sole discretion, shall, by notice to the Borrower and the
Administrative Agent given not fewer than 20 days prior to the Existing
Conversion Date, advise the Borrower whether or not such Lender agrees to
such extension and any Lender that does not advise the Borrower on or
before the 20th day prior to the Existing Conversion Date shall be deemed to
be a Non-extending Lender. The election of any Lender to agree to such
extension shall not obligate any other Lender to agree.
(b) The Borrower shall have the right on or before the
Existing Conversion Date, at its own expense, to require any Lender which
shall have advised or been deemed to advise the Borrower that it will not
agree to an extension of the Conversion Date (each a "Non-Extending
Lender") to transfer without recourse (in accordance with and subject to the
restrictions contained in Section 10.06) all its interests, rights and
obligations under this Agreement to one or more other banks or other financial
institutions (any such bank or other financial institution being called a
"Substitute Lender"), which may include any Lender, provided that (i) such
Substitute Lender, if not already a Lender hereunder, shall be subject to the
approval of the Administrative Agent (not to be unreasonably withheld) and
shall execute all such documentation as the Administrative Agent shall
specify to evidence its status as a Lender hereunder and (ii) such assignment
shall become effective as of the Existing Conversion Date.
(c) If (and only if) Lenders (including Substitute Lenders)
holding Commitments that represent at least a majority of the aggregate
amount of remaining Commitments on the date immediately preceding the
Existing Conversion Date (excluding for purposes of such computation any
Commitments that will terminate pursuant to the second sentence of
Section 2.09(a)) shall have agreed to extend the Existing Conversion Date
(the "Continuing Lenders"), then (i) the Conversion Date shall be extended to
the date 364 days after the Existing Conversion Date (provided, that if such
date is not a Business Day, then the Conversion Date as so extended shall be
the next preceding Business Day), and (ii) the Commitment of each Non-
Extending Lender (after giving effect to each transfer and assignment
pursuant to paragraph (b) above) shall terminate on the Existing Conversion
Date.
Notwithstanding the foregoing, no extension of the
Conversion Date shall be effective with respect to any Lender unless, on and
as of the Existing Conversion Date, the conditions set forth in paragraphs (b)
and (c) of Section 4.01 shall be satisfied (with all references in such
paragraphs to a Borrowing being deemed to be references to such extension)
and the Administrative Agent shall have received a certificate to that effect,
dated the Existing Conversion Date and executed by a Responsible Officer of
the Borrower. No fee will be payable in connection with any extension
pursuant to this Section 2.21.
SECTION 2.22. Swingline Loans. (a) On the terms and
subject to the conditions and relying upon the representations and warranties
herein set forth, the Swingline Lender agrees, at any time and from time to
time from and including the Effective Date to but excluding the earlier of
(x) the Conversion Date and (y) the termination of the Commitments in
accordance with the terms hereof, to make Swingline Loans to the Borrower
in an aggregate principal amount at any time outstanding not to exceed the
lesser of (i) of $10,000,000 minus the aggregate amount of the swingline
loans outstanding under the Facility B Credit Agreement at such time and
(ii) the excess of the aggregate amount of the Commitments over the
Aggregate Revolving Loan Exposure at such time. Each Swingline Loan
shall be in a principal amount that is an integral multiple of $500,000 and in
a minimum principal amount of $500,000. Within the limits set forth in the
first sentence of this paragraph, the Borrower may borrow, pay or prepay and
reborrow Swingline Loans on or after the Effective Date and prior to the
Conversion Date on the terms and subject to the conditions and limitations
set forth herein.
(b) In order to request a Swingline Loan, the Borrower,
acting through a Financial Officer, shall notify the Administrative Agent of
such request by telephone, not later than 12:00 noon, New York City time, on
the day of a proposed Swingline Loan. Each such notice shall be irrevocable
and shall specify the requested date (which shall be a Business Day) and
amount of the requested Swingline Loan. The Administrative Agent will
promptly advise the Swingline Lender of any such notice received from the
Borrower. The Swingline Lender shall make each Swingline Loan available
to the Borrower by means of a credit or wire transfer to domestic account of
the Borrower designated by the Chief Financial Officer of the Borrower by
notice to the Administrative Agent by 3:00 p.m., New York City time, on the
requested date of such Swingline Loan.
(c) The Swingline Lender may by written notice given to
the Administrative Agent not later than 10:00 a.m., New York City time, on
any Business Day require the Lenders to acquire participations on such
Business Day in all or a portion of the Swingline Loans outstanding. Such
notice shall specify the aggregate amount of Swingline Loans in which
Lenders will participate. Promptly upon receipt of such notice, the
Administrative Agent will give notice thereof to each Lender, specifying in
such notice such Lender's Applicable Percentage of such Swingline Loan or
Loans. In furtherance of the foregoing, each Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above, to pay to
the Administrative Agent, for the account of the Swingline Lender, such
Lender's Applicable Percentage of such Swingline Loan or Loans. Each
Lender acknowledges and agrees that its obligation to acquire participations
in Swingline Loans pursuant to this paragraph is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including the
occurrence and continuance of a Default or reduction or termination of the
Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever. Each Lender shall comply
with its obligation under this paragraph by wire transfer of immediately
available funds, in the same manner as provided in Section 2.02 with respect
to Loans made by such Lender (and Section 2.02 shall apply, mutatis
mutandis, to the payment obligations of the Lenders), and the Administrative
Agent shall promptly pay to the Swingline Lender the amounts so received by
it from the Lenders. The Administrative Agent shall notify the Borrower of
any participations in any Swingline Loan acquired pursuant to this paragraph
and thereafter payments in respect of such Swingline Loan shall be made to
the Administrative Agent and not to the Swingline Lender. Any amounts
received by the Swingline Lender from the Borrower (or other party on behalf
of the Borrower) in respect of a Swingline Loan after receipt by the
Swingline Lender of the proceeds of a sale of participations therein shall be
promptly remitted to the Administrative Agent; any such amounts received by
the Administrative Agent shall be promptly remitted by the Administrative
Agent to the Lenders that shall have made their payments pursuant to this
paragraph and to the Swingline Lender, as their interests may appear. The
purchase of participations in a Swingline Loan pursuant to this paragraph
shall not relieve the Borrower of any default in the payment thereof.
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to each of the
Lenders that:
SECTION 3.01. Organization; Powers. The Borrower and
each Subsidiary (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has all requisite
power and authority to own its property and assets and to carry on its
business as now conducted and as proposed to be conducted, (c) is qualified
to do business in every jurisdiction where such qualification is required,
except where the failure so to qualify would not result in a Material Adverse
Effect and (d) has the power and authority to execute, deliver and perform its
obligations under each of the Loan Documents and each other agreement or
instrument contemplated hereby or thereby to which it is or will be a party
and, in the case of the Borrower, to borrow hereunder. The Borrower and
each Subsidiary possesses all licenses, permits, franchises, patents,
copyrights, trademarks, trade names, consents and approvals required to own its
property and assets and to carry on its business as now conducted, except where
the failure to obtain any of the foregoing could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.02. Authorization. The execution, delivery
and performance of each Loan Document, the borrowings hereunder, the
creation of the Liens provided for in the Pledge Agreement and the other
transactions contemplated hereby (collectively, the "Transactions") (a) have
been duly authorized by all requisite corporate, partnership and, if required,
stockholder or partner action and (b) will not (i) violate (A) any provision of
law, statute, rule or regulation, or the constitutive documents or by-laws of
the Borrower or any Subsidiary, (B) any order of any Governmental
Authority or (C) any provision of any indenture, agreement or other
instrument to which the Borrower or any Subsidiary is a party or by which
any of them or any of their property is or may be bound, (ii) be in conflict
with, result in a breach of or constitute (alone or with notice or lapse of time
or both) a default under any such indenture, agreement or other instrument or
(iii) result in the creation or imposition of any Lien upon or with respect to
any property or assets now owned or hereafter acquired by the Borrower or
any Subsidiary, except for any such violations, conflicts, breaches, defaults or
Liens which, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.03. Enforceability. This Agreement has been
duly executed and delivered by the Borrower and each Guarantor and consti-
tutes, and each other Loan Document when executed and delivered by the
Borrower and each Guarantor will constitute, a legal, valid and binding
obligation of the Borrower and each Guarantor, as the case may be, enforce-
able against the Borrower and each Guarantor, as the case may be, in
accordance with its terms.
SECTION 3.04. Governmental Approvals. No action,
consent or approval of, registration or filing with or other action by any
Governmental Authority is or will be required in connection with the
Transactions, other than any which have been made or obtained and are in
full force and effect.
SECTION 3.05. Financial Condition. The consolidated
balance sheet of the Borrower as at December 31, 1995, and the related
statements of income and retained earnings and changes in financial condition
for the fiscal year ended on such date, reported on by Arthur Andersen, LLP
are complete and correct in all material respects and present fairly the
financial condition of the Borrower and its consolidated Subsidiaries as at
such date and the results of the operations and changes in financial condition
of the Borrower and its consolidated Subsidiaries for the fiscal year then
ended. The unaudited consolidated balance sheet of the Borrower and its
consolidated subsidiaries as at March 31, 1996 and the related unaudited
statements of income and retained earnings and changes in financial condition
for the three-month period ended on such date are complete and correct in all
material respects and present fairly the financial condition of the Borrower
and its consolidated Subsidiaries as at such date and the results of their
operations and changes in financial condition for the three-month period then
ended (subject to normal year-end audit adjustments). All such financial
statements, including the related notes thereto, have been prepared in
accordance with GAAP applied consistently throughout all relevant periods.
SECTION 3.06. No Material Adverse Change. There has
been no material adverse change in the business, assets, operations, prospects
or condition, financial or otherwise, of the Borrower and the Subsidiaries,
taken as a whole, since December 31, 1995.
SECTION 3.07. Title to Properties; Possession Under
Leases. (a) The Borrower and each Subsidiary has good title to, or valid
leasehold interests in, all its material properties and assets, except for such
assets and properties as are no longer being used or useful in the conduct of
its businesses or have been disposed of in the ordinary course of business and
except for defects in title and exceptions to leasehold interests that either
alone or in the aggregate could not reasonably be expected to result in a
Material Adverse Effect. All such material properties and assets are free and
clear of Liens, other than Liens expressly permitted by Section 6.02.
(b) The Borrower and each of the Subsidiaries has
complied with all material obligations under all material leases to which it is
a party and all such leases are in full force and effect, except where such
noncompliance or failure to be in full force and effect, alone or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. Each of the Borrower and the Subsidiaries enjoys peaceful and
undisturbed possession under all such material leases, except where the lack
thereof, alone or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect.
SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as
of the Effective Date a list of all the Subsidiaries and the percentage
ownership interest of the Borrower in each of them. As of the Effective
Date, all the issued and outstanding shares of capital stock or the partnership
interests, as the case may be, of each of the Subsidiaries have been validly
issued and are fully paid and nonassessable and are owned directly or
indirectly by the Borrower free and clear of all Liens whatsoever, and there
are no options, warrants, calls, conversion or exchange rights, commitments
or agreements of any character obligating any of the Subsidiaries to issue,
deliver or sell additional shares of their respective capital stock of any class
or any securities convertible into or exchangeable for any such capital stock
or any additional partnership interests.
SECTION 3.09. Litigation; Compliance with Laws.
(a) There are no actions, suits or proceedings at law or in equity or by or
before any Governmental Authority now pending or, to the knowledge of the
Borrower, threatened against or affecting the Borrower or any Subsidiary or
any business, property or rights of any such person (i) which involve any
Loan Document or (ii) as to which there is a reasonable possibility of an
adverse determination and which, if adversely determined, could, individually
or in the aggregate, reasonably be expected to result in a Material Adverse
Effect.
(b) Neither the Borrower nor any of the Subsidiaries is in
violation of any law, rule or regulation, or in default with respect to any
judgment, writ, injunction or decree of any Governmental Authority, where
such violation or default could reasonably be expected to result in a Material
Adverse Effect.
SECTION 3.10. Agreements. (a) Neither the Borrower nor
any of the Subsidiaries is a party to any agreement or instrument or subject to
any restriction that has resulted or could reasonably be expected to result in a
Material Adverse Effect.
(b) Neither the Borrower nor any of the Subsidiaries is in
default in any manner under any provision of any indenture or other agree-
ment or instrument evidencing Indebtedness, or any other material agreement
or instrument to which it is a party or by which it or any of its properties or
assets are or may be bound, where such default could reasonably be expected
to result in a Material Adverse Effect.
SECTION 3.11. Federal Reserve Regulations. (a) Neither
the Borrower nor any of the Subsidiaries is engaged, directly or indirectly, in
the business of extending credit for the purpose of purchasing or carrying
Margin Stock.
(b) No part of the proceeds of any Loan will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately for any purpose which entails a violation of, or which is inconsis-
tent with, the provisions of the Regulations of the Board, including
Regulation G, U or X.
(c) Not more than 25% of the assets subject to the
restrictions of Section 6.02 or Section 6.05 will at any time consist of Margin
Stock unless the Borrower shall have so advised the Administrative Agent
and shall have delivered to the Administrative Agent executed statements on
Form U-1 of the Board demonstrating compliance with Regulation U,
Regulation G and Regulation X, or otherwise established to the satisfaction of
the Administrative Agent and its counsel that the Borrowings hereunder will
not entail a violation of Regulation U, Regulation G or Regulation X.
SECTION 3.12. Investment Company Act; Public Utility
Holding Company Act. Neither the Borrower nor any Subsidiary is (a) an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a "holding company" as defined in,
or subject to regulation under the Public Utility Holding Company Act of
1935.
SECTION 3.13. Use of Proceeds. The Borrower will use
the proceeds of the Loans solely for the purposes specified in the preamble to
this Agreement.
SECTION 3.14. Tax Returns. The Borrower and each
Subsidiary has filed or caused to be filed all Federal, state, local and foreign
income and other material tax returns or materials required to have been filed
by it and has paid or caused to be paid all taxes shown to be due and payable
on such returns or on any assessments received by it, other than taxes that are
being contested in good faith by appropriate proceedings and with respect to
which the Borrower or such Subsidiary, to the extent required by GAAP, has
set aside on its books adequate reserves.
SECTION 3.15. Employee Benefit Plans. Each of the
Borrower and its ERISA Affiliates is in compliance in all material respects
with the applicable provisions of ERISA and the Code and the regulations
and published interpretations thereunder. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such
ERISA Events, could reasonably be expected to result in a Material Adverse
Effect. The present value of all benefit liabilities under each Plan (based on
those assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the last annual valuation date applicable
thereto, exceed by more than $6,000,000 the fair market value of the assets of
such Plan, and the present value of all benefit liabilities of all underfunded
Plans (based on those assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the last annual
valuation dates applicable thereto, exceed by more than $6,000,000 the fair
market value of the assets of all such underfunded Plans.
SECTION 3.16. No Material Misstatements. (a) No
information, report, financial statement, exhibit or schedule (other than the
financial projections referred to in paragraph (b) below) furnished by or on
behalf of the Borrower to the Administrative Agent or any Lender in
connection with the negotiation of any Loan Document or included therein or
delivered pursuant thereto (including the Confidential Information
Memorandum (the "Information Memorandum") dated May 1996 relating to
the Borrower) taken together contained or contains any material misstatement
of fact or omitted or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were or
are made, not materially misleading.
(b) All financial projections that are or have been made
available to the Administrative Agent or any Lender by the Borrower,
including those contained in the Information Memorandum, have been or will
be prepared in good faith based upon assumptions believed by management
of the Borrower to be reasonable.
SECTION 3.17. Environmental and Safety Matters. Each
of the Borrower and each Subsidiary has complied in all respects with all
Federal, state, local and other statutes, ordinances, orders, judgments, rulings
and regulations relating to the environment or to employee health and safety
(including those related to the retention and maintenance of all required
environmental, health and safety permits or authorizations) ("Environmental
and Safety Laws") except for violations that either alone or in the aggregate
could not reasonably be expected to result in a Material Adverse Effect.
Neither the Borrower nor any Subsidiary has received notice of any failure so
to comply which alone or together with any other such failure could
reasonably be expected to result in a Material Adverse Effect. Neither the
Borrower nor any Subsidiary manages or handles any hazardous wastes,
hazardous substances, hazardous materials, toxic substances or toxic
pollutants referred to in or regulated by Environmental and Safety Laws in
violation of such laws or of any other applicable law where such violation
could reasonably be expected to result, individually or together with other
violations, in a Material Adverse Effect. To the best knowledge of the
Borrower, neither the Borrower nor any Subsidiary has any liabilities or
contingent liabilities relating to environmental or employee health and safety
matters (including on-site or off-site contamination) which, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.18. Security Documents. The Pledge
Agreement is effective to create in favor of the Administrative Agent, for the
ratable benefit of the Secured Parties, a legal, valid and enforceable security
interest in the Collateral (as defined in the Pledge Agreement) and, when the
certificates representing the Pledged Securities (as defined in the Pledge
Agreement) are delivered to the Administrative Agent, the Pledge Agreement
will constitute a fully perfected first priority Lien on and security interest
in all right, title and interest of the pledgors thereunder in the Collateral,
in each case prior and superior in right to any other person.
ARTICLE IV
Conditions of Lending
The obligations of the Lenders to make Loans hereunder are
subject to the satisfaction on the date of each Borrowing of the following
conditions:
(a) The Administrative Agent shall have received a notice
of such Borrowing as required by Section 2.03 or Section 2.22(b), as
applicable.
(b) The representations and warranties set forth in
Article III hereof shall be true and correct in all material respects on
and as of the date of such Borrowing with the same effect as though
made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date.
(c) At the time of and immediately after such Borrowing no
Event of Default or Default shall have occurred and be continuing.
(d) In the event any proceeds of such Borrowing are to be
used directly or indirectly, whether immediately, incidentally or
ultimately, to purchase or carry Margin Stock or to repay or
refinance Indebtedness originally incurred for such purpose, the
Borrower shall have so notified the Administrative Agent and shall
have delivered to the Administrative Agent executed statements on
Form U-1 of the Board demonstrating compliance with
Regulation U, Regulation G and Regulation X or otherwise
established to the satisfaction of the Administrative Agent and its
counsel that such Borrowing will not entail a violation of Regulation
U, Regulation G or Regulation X.
Each Borrowing shall be deemed to constitute a representation and warranty
by the Borrower on the date of such Borrowing as to the matters specified in
paragraphs (b) and (c) above and to the effect that, unless the condition set
forth in paragraph (d) above shall have been satisfied, no proceeds of such
Borrowing will be used directly or indirectly, whether immediately,
incidentally or ultimately, to purchase or carry Margin Stock or to repay or
refinance Indebtedness originally incurred for such purpose.
ARTICLE V
Affirmative Covenants
The Borrower covenants and agrees with each Lender that
so long as this Agreement shall remain in effect and until the Commitments
have been terminated and the principal of and interest on each Loan, all Fees
and all other expenses or amounts payable under any Loan Document shall
have been paid in full, unless the Required Lenders shall otherwise consent in
writing, the Borrower will, and will cause each of the Subsidiaries to:
SECTION 5.01. Existence; Businesses and Properties.
(a) Do or cause to be done all things necessary to preserve, renew and keep
in full force and effect the legal existence of the Borrower and each
Significant Subsidiary, except as otherwise permitted by Section 6.05.
(b) Do or cause to be done all things necessary to preserve,
renew and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; maintain and operate such business in
substantially the manner in which it is presently operated; and at all times
maintain and preserve all property material to the conduct of such business
and keep such property in good repair, working order and condition and from
time to time make, or cause to be made, all needed and proper repairs,
renewals, additions, improvements and replacements thereto necessary in
order that the business carried on in connection therewith may be properly
conducted at all times.
SECTION 5.02. Insurance. Keep its insurable properties
adequately insured at all times by financially sound and reputable insurers;
maintain such other insurance, to such extent and against such risks,
including fire and other risks insured against by extended coverage, as is
customary with similarly situated companies in the same or similar
businesses, including public liability insurance against claims for personal
injury or death or property damage occurring upon, in, about or in connection
with the use of any properties owned, occupied or controlled by it; and
maintain such other insurance as may be required by law; provided, however,
that nothing in this Section 5.02 shall preclude the Borrower or any
Subsidiary from being self-insured to the extent customary with similarly
situated companies in the same or similar businesses.
SECTION 5.03. Taxes. Pay and discharge promptly when
due all taxes, assessments and governmental charges or levies imposed upon
it or upon its income or profits or in respect of its property, before the same
shall become delinquent or in default, as well as all lawful claims for labor,
materials and supplies or otherwise which, if unpaid, would (with or without
action by any other person) give rise to a Lien upon such properties or any
part thereof; provided, however, that such payment and discharge shall not be
required with respect to any such tax, assessment, charge, levy or claim so
long as the validity or amount thereof shall be contested in good faith by
appropriate proceedings and adequate reserves in respect thereof shall be
maintained in accordance with GAAP.
SECTION 5.04. Financial Statements, Reports, etc. Furnish
to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of the
Borrower, the consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such year and the related
consolidated statements of income and retained earnings and
statements of cash flow of the Borrower and its consolidated
Subsidiaries for such year, all complete and correct in all material
respects and prepared in accordance with GAAP applied consistently
throughout the periods involved, and reported on without a "going
concern" or like qualification or exception, or qualification arising
out of the scope of the audit, by Arthur Andersen LLP or other
independent certified public accountants of nationally recognized
standing;
(b) not later than 60 days after the end of each of the first
three quarterly periods of each fiscal year of the Borrower, the
unaudited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of each such quarter and the
related unaudited consolidated statements of income and retained
earnings and statements of cash flow of the Borrower and its
consolidated Subsidiaries for such quarter and the portion of the
fiscal year through such quarter, certified by a Responsible Officer as
being, in his or her opinion, complete and correct in all material
respects and prepared in accordance with GAAP applied consistently
throughout the periods involved (subject to normal year-end audit
adjustments);
(c) concurrently with the delivery of the financial statements
referred to in clauses (a) and (b) above, a certificate of a Financial
Officer of the Borrower (i) stating that, to the best of such officer's
knowledge, the Borrower during such period has performed each
covenant and condition contained in the Loan Documents and that
such officer has obtained no knowledge of any Default or Event of
Default hereunder, except as specifically indicated and (ii) showing
in detail the calculations supporting such statement in respect of
Sections 6.08, 6.09 and 6.10;
(d) within five days after the same are sent, copies of all
proxy statements and reports which the Borrower sends to its
stockholders, and within five days after the same are filed, copies of
all reports which the Borrower shall file with the Securities and
Exchange Commission or any successor on Form 10-K, Form 10-Q,
Form 8-K or any successor form; and
(e) promptly, such additional financial and other information
as the Administrative Agent or any Lender may from time to time
reasonably request.
SECTION 5.05. Litigation and Other Notices. Promptly
notify the Administrative Agent and each Lender in writing of the following:
(a) any Event of Default or Default, specifying the nature
and extent thereof and the corrective action (if any) proposed to be
taken with respect thereto;
(b) the filing or commencement of, or any written threat or
notice of intention of any person to file or commence, any action,
suit or proceeding, whether at law or in equity or before any
Governmental Authority, where there exists a reasonable likelihood
of an adverse determination and an adverse determination could
reasonably be expected to result in a Material Adverse Effect; and
(c) any other development that has resulted in, or could
reasonably be expected to result in, a Material Adverse Effect.
SECTION 5.06. Employee Benefits. (a) Comply in all
material respects with the applicable provisions of ERISA and the Code and
(b) furnish to the Administrative Agent as soon as possible after, and in any
event within 10 days after any Responsible Officer of the Borrower or any
ERISA Affiliate knows or has reason to know that, any ERISA Event has
occurred that, alone or together with any other ERISA Events that have
occurred, could reasonably be expected to result in liability of the Borrower
in an aggregate amount exceeding $10,000,000, a statement of a Financial
Officer setting forth details as to such ERISA Event and the action, if any,
that the Borrower proposes to take with respect thereto.
SECTION 5.07. Books and Records; Inspection Rights.
Keep, and cause each Subsidiary to keep, proper books of record and account
in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities and (b) permit, and
cause each Subsidiary to permit, any representatives designated by the
Administrative Agent or any Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its principal
officers and independent accountants, all at such reasonable times and as
often as reasonably requested.
SECTION 5.08. Compliance with Laws. Comply with all
applicable laws, rules and regulations, and all orders of any Governmental
Authority, applicable to it or any of its property, business, operations or
transactions (including ERISA and all Environmental and Safety Laws),
except where the failure so to comply could not reasonably be expected to
result in a Material Adverse Effect, and provide prompt written notice to the
Lenders following the receipt of any notice of any violation of any such laws,
rules, regulations or orders from any Governmental Authority charged with
enforcing the same where such violation could reasonably be expected to
result in a Material Adverse Effect.
SECTION 5.09. Use of Proceeds. Use the proceeds of the
Loans solely for the purposes set forth in the preamble to this Agreement.
SECTION 5.10. Further Assurances. (a) Execute any and
all further documents, financing statements, agreements and instruments, and
take all further action, that may be required under applicable law, or that the
Required Lenders or the Administrative Agent may reasonably request, in
order to grant, preserve, protect and perfect the validity and first priority of
the security interests created or intended to be created by the Pledge
Agreement.
(b) Promptly after the acquisition or formation of any
Subsidiary that is a Designated Subsidiary, and promptly after any existing
Subsidiary becomes a Designated Subsidiary, (i) execute and cause such
Designated Subsidiary to execute, and deliver to the Administrative Agent, an
Additional Guarantor Agreement under which such Designated Subsidiary
shall become and assume the obligations of a Guarantor hereunder, and (ii)
promptly cause all Capital Stock directly or indirectly owned by it in such
Designated Subsidiary to be subjected to the Lien of the Pledge Agreement,
and promptly deliver to the Administrative Agent any and all certificates or
other instruments evidencing such Capital Stock, together with undated stock
powers or other instruments of transfer executed in blank, and take all such
other actions as may be required or as the Required Lenders or the
Administrative Agent may reasonably request to perfect and ensure the first
priority of such Lien.
ARTICLE VI
Negative Covenants
The Borrower covenants and agrees with each Lender that
so long as this Agreement shall remain in effect and until the Commitments
have been terminated and the principal of and interest on each Loan, all Fees
and all other expenses or amounts payable hereunder have been paid in full,
unless the Required Lenders shall otherwise consent in writing, the Borrower
will not, and will not cause or permit any of the Subsidiaries to:
SECTION 6.01. Indebtedness. Incur, create, assume or
permit to exist any Indebtedness, except:
(a) Indebtedness for borrowed money existing on the
Effective Date or incurred after such date in an aggregate principal
amount for all such Indebtedness not in excess of $10,000,000;
(b) Indebtedness created hereunder and under the other Loan
Documents;
(c) Indebtedness of the Borrower or any Subsidiary to any
Subsidiary or the Borrower, as the case may be;
(d) Indebtedness of companies acquired in Permitted
Business Acquisitions, in an aggregate principal amount for all such
Indebtedness not in excess of $15,000,000;
(e) Indebtedness of Schwitzer (Europe) Limited, Schwitzer
(Europe) Holdings Limited or Lacom Schwitzer Equipamentos, Ltda.
in an aggregate principal amount for all such Indebtedness not in
excess of $8,000,000;
(f) Indebtedness of Schwitzer Pension Trustee Limited
arising in the ordinary course of business to meet its pension
obligations;
(g) Indebtedness of the nature described in clause (h) of the
definition of Indebtedness in an aggregate principal amount for all
such Indebtedness not in excess of $5,000,000 without duplication;
(h) Indebtedness of the nature described in clause (j) of the
definition of Indebtedness (other than the Chase Letters of Credit) in
an aggregate principal amount for all such Indebtedness not in excess
of $10,000,000 without duplication;
(i) Indebtedness in respect of the Chase Letters of Credit;
and
(j) Indebtedness of the nature described in clause (i) of the
definition of Indebtedness, but only to the extent that such
Indebtedness is not created for speculative purposes.
SECTION 6.02. Liens. Create, incur, assume or permit to
exist any Lien on any property or assets (including stock or other securities of
any person, including any Subsidiary) now owned or hereafter acquired by it
or any income or revenues or rights in respect of any thereof, or sell or
transfer any account receivable or other income or revenues or any right in
respect thereof, except:
(a) Liens on property or assets of the Borrower and the
Subsidiaries existing on the date hereof or incurred after such date
and securing obligations in an aggregate principal amount not in
excess of $10,000,000;
(b) Liens incurred and pledges and deposits made in the
ordinary course of business in connection with workers'
compensation, unemployment insurance, old-age pensions, retiree
health benefits and other social security benefits and deposits
securing liability to insurance carriers under insurance or self-
insurance arrangements in respect of such obligations;
(c) Liens securing the performance of bids, tenders, leases,
contracts (other than for the repayment of borrowed money),
statutory obligations, surety, customs and appeal bonds and other
obligations of a like nature, incurred as an incident to and in the
ordinary course of business;
(d) Liens imposed by law, such as carriers', warehousemen's,
mechanics', materialmen's and vendors' liens, incurred in the ordinary
course of business and securing obligations which are not yet due or
which are being contested in good faith by appropriate proceedings
as to which the Borrower or a Subsidiary, as the case may be, shall,
to the extent required by GAAP, have set aside on its books ade-
quate reserves;
(e) Liens securing the payment of taxes, assessments and
governmental charges or levies, either (i) not delinquent or (ii) being
contested in good faith by appropriate legal or administrative
proceedings and as to which the Borrower or a Subsidiary, as the
case may be, shall, to the extent required by GAAP, have set aside
on its books adequate reserves;
(f) zoning restrictions, easements, licenses, reservations,
provisions, covenants, conditions, waivers, restrictions on the use of
property or irregularities of title (and with respect to leasehold
interests, mortgages, obligations, liens and other encumbrances
incurred, created, assumed or permitted to exist and arising by,
through or under a landlord or owner of the leased property, with or
without consent of the lessee) which do not in the aggregate
materially detract from the value of its property or assets or
materially impair the use thereof in the operation of its business;
(g) Liens on the property or assets of any Subsidiary in
favor of the Borrower or any other wholly owned Domestic
Subsidiary;
(h) Liens in an aggregate amount not in excess of
$10,000,000 arising by law to secure any judgment that has not
resulted in an Event of Default and that is being contested in good
faith by appropriate proceedings;
(i) leases or subleases of equipment to customers that do not
materially interfere with the conduct of the business of the Borrower
and its Subsidiaries taken as a whole; and
(j) Liens consisting of interests of lessors under capital
leases permitted by Section 6.01;
(k) purchase money security interests in real property or
equipment securing obligations in an aggregate principal amount not
in excess of $5,000,000 without duplication;
(l) Liens on the assets or Capital Stock of companies
acquired after the date hereof in Permitted Business Acquisitions
securing Indebtedness described in Section 6.01(d);
(m) Liens created by any Loan Document;
(n) Liens on the assets of Schwitzer (Europe) Limited or
Schwitzer (Europe) Holdings Limited located in the United Kingdom
or on the assets of Lacom Schwitzer Equipamentos, Ltda. located in
Brazil which secure Indebtedness of such person or persons in an
aggregate principal amount not in excess of $8,000,000;
(o) restrictions on the transfer of assets imposed by any
federal, state or local statute, regulation or ordinance applicable to
the Borrower and its Subsidiaries; and
(p) extensions, renewals and replacements of Liens referred
to in paragraphs (a) through (p) of this Section 6.02; provided that
any such extension, renewal or replacement Lien shall be limited to
the property or assets (or improvements thereon) covered by the Lien
extended, renewed or replaced and that the obligations secured by
any such extension, renewal or replacement Lien shall be in an
amount not greater than the amount of the obligations secured by the
Lien extended, renewed or replaced (and any such extension, renewal
or replacement Lien shall continue to utilize any applicable basket
set forth above).
SECTION 6.03. Sale and Lease-Back Transactions. Enter
into any arrangement, directly or indirectly, with any person whereby it shall
sell or transfer any property, real or personal, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property or other property which it intends to use for substantially the same
purpose or purposes as the property being sold or transferred; provided, that
the Borrower and its subsidiaries may enter into such transactions to the
extent the aggregate sale or transfer price of the property sold or transferred
therein does not exceed $5,000,000.
SECTION 6.04. Investments, Loans and Advances.
Purchase, hold or acquire any capital stock, evidences of indebtedness or
other securities of, make or permit to exist any loans or advances to, or make
or permit to exist any investment or acquire any other interest whatsoever in,
any other person, except:
(a) investments in Subsidiaries;
(b) loans and advances permitted under Section 6.01(c);
(c) Permitted Investments;
(d) loans and advances to employees of the Borrower or the
Subsidiaries not to exceed $1,000,000 in the aggregate at any time
outstanding;
(e)(i) accounts receivable arising and trade credit granted in
the ordinary course of business and investments received in
connection with the exercise of customary creditors' rights upon
default or to the extent reasonably necessary in order to prevent or
limit loss and (ii) prepayments and other credits to suppliers made in
the ordinary course of business consistent with the past practices of
the Borrower;
(f) investments resulting from pledges and deposits referred
to in Section 6.02(b) or (c);
(g) investments constituting Permitted Business
Acquisitions; and
(h) investments (other than investments described in clauses
(a) through (g) above) to the extent the aggregate amount thereof
made in any fiscal year does not exceed $15,000,000.
SECTION 6.05. Mergers, Consolidations, Sales of Assets
and Acquisitions. Merge into or consolidate with any other person, or permit
any other person to merge into or consolidate with it, or sell, transfer, lease
or otherwise dispose of (in one transaction or in a series of transactions) all
or any substantial part of the consolidated assets of the Borrower (whether
now owned or hereafter acquired), or purchase, lease or otherwise acquire (in
one transaction or a series of transactions) all or any substantial part of the
assets of, or any division or line of business of, any other person, except that
this Section 6.05 shall not prohibit:
(a) the purchase or sale of inventory in the ordinary course
of business by the Borrower or any Subsidiary or the acquisition of
facilities, equipment or other assets in the ordinary course of
business;
(b) if at the time thereof and immediately after giving effect
thereto no Event of Default or Default shall have occurred and be
continuing, the merger, consolidation or restructuring of any
Subsidiary into the Borrower in a transaction in which the Borrower
is the surviving person, or the merger or consolidation of any
Subsidiary with any other Subsidiary, in each case in a transaction in
which no person other than the Borrower or a Subsidiary receives
any consideration; provided, that if any Designated Subsidiary shall
be merged with another Subsidiary, the resulting corporation must be
a Designated Subsidiary, unless the resulting corporation does not
meet the requirements of the definition of Significant Subsidiary.
(c) the merger or consolidation of the Borrower with or
into any other corporation if at the time thereof and immediately
after giving effect thereto (i) no Event of Default or Default shall
have occurred and be continuing, (ii) a majority of the Board of
Directors of the surviving or resulting corporation shall consist of
individuals that were members of the Board of Directors of the
Borrower immediately prior to such merger or consolidation; and
(iii) the surviving or resulting corporation (if not the Borrower) shall
be a U.S. corporation and shall expressly assume by a written
agreement in form and substance satisfactory to the Administrative
Agent (and its counsel) and the Required Lenders all obligations of
the Borrower hereunder; and
(d) Permitted Business Acquisitions and other investments
permitted by Section 6.04.
SECTION 6.06. Restrictions on Ability of Subsidiaries to
Pay Dividends. Permit any Subsidiary to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any such Subsidiary to (a) pay any dividends or
make any other distributions on its capital stock or any other interest or
(b) make or repay any loans or advances to the Borrower or the parent of
such Subsidiary.
SECTION 6.07. Transactions with Affiliates. Sell or
transfer any assets to, or purchase or acquire any assets from, or otherwise
engage in any material transaction with, any Affiliate except upon fair and
reasonable terms no less favorable to the Borrower or any Subsidiary than
those that would prevail in an arm's-length transaction with a person which
was not an Affiliate, provided that this Section 6.07 shall not apply to
transactions between the Borrower and any Subsidiary of which more than
90% of the equity interests are at the time owned, directly or indirectly, by
the Borrower.
SECTION 6.08. Interest Coverage Ratio. Permit the ratio
of (i) Consolidated EBITDA minus Consolidated Capital Expenditures to
(ii) Consolidated Interest Expense for any period of four fiscal quarters to be
less than 2.25 to 1.00.
SECTION 6.09. Leverage Ratio. Permit the Leverage
Ratio as of the end of any fiscal quarter to be greater than 3.75 to 1.00;
provided, that the Leverage Ratio may be greater than 3.75 to 1.00 (but shall
in no event exceed 4.00 to 1.00) at any time when the Borrower and its
Designated Subsidiaries shall have created in favor of the Administrative
Agent, for the benefit of the Lenders, pursuant to one or more security
agreements reasonably satisfactory to the Administrative Agent, perfected first
priority security interests securing the Obligations (and on a pari passu basis
the Obligations under and as defined in the Facility B Credit Agreement) in
all the accounts receivable and inventory of the Borrower and such
Designated Subsidiaries, and shall have executed and filed all such financing
statements and taken all such other actions as shall have been reasonably
requested by the Administrative Agent to ensure the perfection and first
priority of such security interests.
SECTION 6.10. Consolidated Net Worth. Permit
Consolidated Net Worth at any date to be less than the sum of
(i) $65,000,000, (ii) 85% of the amount by which Consolidated Net Worth
shall have been increased by any acquisition accounted for by the pooling of
interests method (after deducting merger and related expenses) and (iii) one-
half of Consolidated Net Income (to the extent positive) for each fiscal year
ended on or prior to such date, beginning with fiscal year 1996.
ARTICLE VII
Events of Default
In case of the happening of any of the following events
("Events of Default"):
(a) any representation or warranty made or deemed made in
or in connection with any Loan Document or the borrowings
hereunder, or any representation, warranty, statement or information
contained in any report, certificate, financial statement or other
instrument furnished in connection with or pursuant to any Loan
Document, shall prove to have been false or misleading in any
material respect when so made, deemed made or furnished;
(b) default shall be made in the payment of any principal of
any Loan when and as the same shall become due and payable,
whether at the due date thereof or at a date fixed for prepayment
thereof or by acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest on
any Loan or any Fee or any other amount (other than an amount
referred to in (b) above) due under any Loan Document, when and as
the same shall become due and payable, and such default shall
continue unremedied for a period of 3 Business Days;
(d) default shall be made in the due observance or
performance by the Borrower or any Subsidiary of any covenant,
condition or agreement contained in Section 5.01(a), 5.05, 5.09 or
5.10(b) or in Article VI;
(e) default shall be made in the due observance or
performance by the Borrower or any Subsidiary of any covenant,
condition or agreement contained in any Loan Document (other than
those specified in (b), (c) or (d) above) and such default shall
continue unremedied for a period of 30 days after notice thereof
from the Administrative Agent or any Lender to the Borrower;
(f) the Borrower or any Subsidiary shall fail to make any
payment (whether of principal or interest and regardless of amount)
in respect of any Material Indebtedness, when and as the same shall
become due and payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that
enables or permits the holder or holders of any Material Indebtedness
or any trustee or agent on its or their behalf (with or without the
giving of notice, the lapse of time or both) to cause any Material
Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that this clause (g) shall not apply to secured
Indebtedness that becomes due as a result of the voluntary sale or
transfer of the property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent jurisdiction
seeking (i) relief in respect of the Borrower or any Significant
Subsidiary, or of a substantial part of the property or assets of the
Borrower or a Significant Subsidiary, under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other
bankruptcy, insolvency, receivership or similar law, (ii) the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Significant
Subsidiary or for a substantial part of the property or assets of the
Borrower or a Significant Subsidiary or (iii) the winding-up or
liquidation of the Borrower or any Significant Subsidiary; and the
Borrower or any Significant Subsidiary by any act indicates its
approval thereof, consent thereto or acquiescence therein or such
proceeding or petition shall continue undismissed for 60 days or an
order, judgment or decree approving or ordering any of the foregoing
shall be entered;
(i) the Borrower or any Significant Subsidiary shall
(i) voluntarily commence any proceeding or file any petition seeking
relief under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other applicable bankruptcy, insolvency,
receivership or similar law, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or the
filing of any petition described in (h) above, (iii) apply for or
consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any
Subsidiary or for a substantial part of the property or assets of the
Borrower or any Significant Subsidiary, (iv) file an answer admitting
the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of
creditors, (vi) become unable, admit in writing its inability or fail
generally to pay its debts as they become due or (vii) take any action
for the purpose of effecting any of the foregoing;
(j) one or more judgments for the payment of money in an
aggregate amount in excess of $10,000,000 shall be rendered against
the Borrower, any Subsidiary or any combination thereof and the
same shall remain undischarged for a period of 30 consecutive days
during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to levy upon assets or
properties of the Borrower or any Subsidiary to enforce any such
judgment;
(k) an ERISA Event shall have occurred that, when taken
together with all other such ERISA Events that have occurred, could
reasonably be expected to result in liability of the Borrower and its
ERISA Affiliates in an aggregate amount exceeding $10,000,000;
(l) there shall have occurred a Change in Control;
(m) any security interest purported to be created by the
Pledge Agreement shall for any reason be held by a court of
competent jurisdiction not to be, or shall be asserted by the Borrower
not to be, a valid, first priority perfected security interest in
accordance with the terms of the Pledge Agreement; or
(n) any guarantee hereunder or under any Additional
Guarantor Agreement shall for any reason be held by a court of
competent jurisdiction not to be, or shall be asserted by the Borrower
or any Guarantor not to be valid in accordance with the terms
thereof.
then, and in every such event (other than an event with respect to the
Borrower described in paragraph (h) or (i) above), and at any time thereafter
during the continuance of such event, the Administrative Agent, at the request
of the Required Lenders, shall, by notice to the Borrower, take either or both
of the following actions, at the same or different times: (i) terminate
forthwith the Commitments and (ii) declare the Loans then outstanding to be
forthwith due and payable in whole or in part, whereupon the principal of the
Loans so declared to be due and payable, together with accrued interest
thereon and any unpaid accrued Fees and all other liabilities of the Borrower
accrued hereunder and under any other Loan Document, shall become
forthwith due and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any other Loan Document to the
contrary notwithstanding; and in any event with respect to the Borrower
described in paragraph (h) or (i) above, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with
accrued interest thereon and any unpaid accrued Fees and all other liabilities
of the Borrower accrued hereunder and under any other Loan Document, shall
automatically become due and payable, without presentment, demand, protest
or any other notice of any kind, all of which are hereby expressly waived by
the Borrower, anything contained herein or in any other Loan Document to
the contrary notwithstanding.
ARTICLE VIII
The Administrative Agent
In order to expedite the transactions contemplated by this
Agreement, The Chase Manhattan Bank, N.A. is hereby appointed to act as
Administrative Agent on behalf of the Lenders. Each of the Lenders, and
each assignee of any such Lender, hereby irrevocably authorizes the
Administrative Agent to take such actions on behalf of such Lender or
assignee and to exercise such powers as are specifically delegated to the
Administrative Agent by the terms and provisions hereof and of the other
Loan Documents, together with such actions and powers as are reasonably
incidental thereto. The Administrative Agent is hereby expressly authorized
by the Lenders, without hereby limiting any implied authority, (a) to receive
on behalf of the Lenders all payments of principal of and interest on the
Loans and all other amounts due to the Lenders hereunder, and promptly to
distribute to each Lender its proper share of each payment so received; (b) to
give notice on behalf of each of the Lenders to the Borrower of any Event of
Default specified in this Agreement of which the Administrative Agent has
actual knowledge acquired in connection with its agency hereunder; and (c) to
distribute to each Lender copies of all notices, financial statements and other
materials delivered by the Borrower pursuant to this Agreement as received
by the Administrative Agent.
Neither the Administrative Agent nor any of its directors,
officers, employees or agents shall be liable as such for any action taken or
omitted by any of them except for its or his own gross negligence or wilful
misconduct, or be responsible for any statement, warranty or representation
herein or the contents of any document delivered in connection herewith, or
be required to ascertain or to make any inquiry concerning the performance
or observance by the Borrower of any of the terms, conditions, covenants or
agreements contained in any Loan Document. The Administrative Agent
shall not be responsible to the Lenders for the due execution, genuineness,
validity, enforceability or effectiveness of this Agreement or any other Loan
Documents or other instruments or agreements. The Administrative Agent
shall in all cases be fully protected in acting, or refraining from acting, in
accordance with written instructions signed by the Required Lenders, or all
Lenders where unanimity is expressly required by the applicable provision of
this Agreement, and, except as otherwise specifically provided herein, such
instructions and any action or inaction pursuant thereto shall be binding on all
the Lenders. The Administrative Agent shall, in the absence of knowledge to
the contrary, be entitled to rely on any instrument, document or oral
communication believed by it in good faith to be genuine and correct and to
have been signed, sent or given by the proper person or persons, and the
Administrative Agent shall have no liability to the Borrower or any Lender
for, and the Borrower will indemnify the Administrative Agent and each
Lender against, any loss or damage that may result from such reliance to the
extent that such losses or damages of the Administrative Agent or any Lender
have not resulted from their gross negligence or wilful misconduct. Neither
the Administrative Agent nor any of its directors, officers, employees or
agents shall have any responsibility to the Borrower on account of the failure
of or delay in performance or breach by any Lender of any of its obligations
hereunder or to any Lender on account of the failure of or delay in
performance or breach by any other Lender or the Borrower of any of their
respective obligations hereunder or under any other Loan Document or in
connection herewith or therewith. The Administrative Agent may execute
any and all duties hereunder by or through agents or employees and shall be
entitled to rely upon the advice of legal counsel selected by it with respect to
all matters arising hereunder and shall not be liable for any action taken or
suffered in good faith by it in accordance with the advice of such counsel.
The Lenders hereby acknowledge that the Administrative
Agent shall be under no duty to take any discretionary action permitted to be
taken by it pursuant to the provisions of this Agreement or any other Loan
Document unless it shall be requested in writing to do so by the Required
Lenders.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, the Administrative Agent may
resign at any time by notifying the Lenders and the Borrower. Upon any
such resignation, the Required Lenders shall have the right to appoint a
successor (which shall be a Lender) with the consent of the Borrower (which
consent shall not be unreasonably withheld). If no successor shall have been
so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives
notice of its resignation, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent which shall
be a bank having a combined capital and surplus of at least $500,000,000 or
an Affiliate of any such bank. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor bank, such successor shall
succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. After
the Administrative Agent's resignation hereunder, the provisions of this
Article and Section 10.05 shall continue in effect for its benefit in respect of
any actions taken or omitted to be taken by it while it was acting as
Administrative Agent.
With respect to the Loans made by it hereunder, the
Administrative Agent in its individual capacity and not as Administrative
Agent shall have the same rights and powers as any other Lender and may
exercise the same as though it were not the Administrative Agent, and the
Administrative Agent and its Affiliates may accept deposits from, lend money
to and generally engage in any kind of business with the Borrower or any
Subsidiary or other Affiliate thereof as if it were not the Administrative
Agent.
Each Lender agrees (i) to reimburse the Administrative
Agent, on demand, in the amount of its pro rata share (based on its Commit-
ment hereunder) of any expenses incurred for the benefit of the Lenders by
the Administrative Agent, including counsel fees and compensation of agents
and employees paid for services rendered on behalf of the Lenders, which
shall not have been reimbursed by the Borrower and (ii) to indemnify and
hold harmless the Administrative Agent and any of its directors, officers,
employees or agents, on demand, in the amount of such pro rata share, from
and against any and all liabilities, taxes, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against it in its capacity as the Administrative Agent or any of them in any
way relating to or arising out of this Agreement or any other Loan Document
or any action taken or omitted by it or any of them under this Agreement or
any other Loan Document, to the extent the same shall not have been reim-
bursed by the Borrower; provided that no Lender shall be liable to the
Administrative Agent for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or wilful misconduct of the
Administrative Agent or any of its directors, officers, employees or agents.
Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender and
based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance
upon the Administrative Agent or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or
based upon this Agreement or any other Loan Document, any related
agreement or any document furnished hereunder or thereunder.
Notwithstanding anything herein to the contrary, no Lender
identified herein as Co-Agent shall have any separate duties, responsibilities,
obligations or authority as Co-Agent hereunder.
ARTICLE IX
Guarantee
In order to induce the Lenders to extend credit hereunder,
each Guarantor hereby unconditionally guarantees, jointly with the other
Guarantors and severally, as a primary obligor and not merely as a surety, the
Obligations. Each Guarantor further agrees that the Obligations may be
extended or renewed, in whole or in part, without notice to or further assent
from it, and that it will remain bound upon its Guarantee hereunder
notwithstanding any such extension or renewal of any Obligation.
Each Guarantor waives presentment to, demand of payment
from and protest to the Borrower of any of the Obligations, and also waives
notice of acceptance of its obligations and notice of protest for nonpayment.
The obligations of each Guarantor hereunder shall not be affected by (a) the
failure of any Lender or the Administrative Agent to assert any claim or
demand or to enforce any right or remedy against the Borrower under the
provisions of this Agreement or any of the other Loan Documents or
otherwise; (b) any rescission, waiver, amendment or modification of any of
the terms or provisions of this Agreement, any of the other Loan Documents
or any other agreement; (c) the failure of any Lender to exercise any right or
remedy against the Borrower; or (d) any release of any Collateral or any other
Guarantor.
Each Guarantor further agrees that its agreement hereunder
constitutes a promise of payment when due and not merely of collection, and
waives any right to require that any resort be had by any Lender to any
balance of any deposit account or credit on the books of any Lender in favor
of the Borrower or any other person.
The obligations of each Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason,
and shall not be subject to any defense or setoff, counterclaim, recoupment or
termination whatsoever, by reason of the invalidity, illegality or
unenforceability of the Obligations, any impossibility in the performance of
the Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of each Guarantor hereunder shall not be
discharged or impaired or otherwise affected by the failure of the
Administrative Agent or any Lender to assert any claim or demand or to
enforce any remedy under this Agreement or under any other Loan Document
or any other agreement, by any waiver or modification in respect of any
thereof, by any default, failure or delay, wilful or otherwise, in the
performance of the Obligations, or by any other act or omission which may
or might in any manner or to any extent vary the risk of such Guarantor or
otherwise operate as a discharge of such Guarantor as a matter of law or
equity.
Each Guarantor further agrees that its obligations hereunder
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of principal of or interest on any
Obligation is rescinded or must otherwise be restored by the Administrative
Agent or any Lender upon the bankruptcy or reorganization of the Borrower
or otherwise.
In furtherance of the foregoing and not in limitation of any
other right which the Administrative Agent or any Lender may have at law or
in equity against any Guarantor by virtue hereof, upon the failure of the
Borrower to pay any Obligation when and as the same shall become due,
whether at maturity, by acceleration, after notice of prepayment or otherwise,
each Guarantor hereby promises to and will, upon receipt of written demand
by the Administrative Agent, forthwith pay, or cause to be paid, in cash the
amount of such unpaid Obligation.
Upon payment by any Guarantor of any Obligations, each
Lender shall, in a reasonable manner, assign the amount of the Obligations
owed to it and so paid to such Guarantor, such assignment to be pro tanto to
the extent to which the Obligations in question were discharged by such
Guarantor, or make such disposition thereof as such Guarantor shall direct (all
without recourse to and without any representation or warranty by any
Lender).
Upon payment by any Guarantor of any sums as provided
above, all rights of such Guarantor against the Borrower or any other
Guarantor arising as a result thereof by way of right of subrogation or
otherwise (including the rights of such Guarantor under the previous and the
next paragraphs) shall in all respects be subordinated and junior in right of
payment to the prior indefeasible payment in full of all the Obligations to the
Lenders.
In addition to all such rights of indemnity and subrogation
as the Guarantors may have under applicable law, the Borrower agrees that
(a) in the event a payment shall be made by any Guarantor under its
Guarantee, the Borrower shall indemnify such Guarantor for the full amount
of such payment and such Guarantor shall be subrogated to the rights of the
person to whom such payment shall have been made to the extent of such
payment. Each Guarantor agrees that in the event a payment shall be made
by any Guarantor under its Guarantee, and such Guarantor (the "Claiming
Guarantor") shall not have been indemnified by the Borrower as provided in
the preceding sentence, each other Guarantor (a "Contributing Guarantor")
shall indemnify the Claiming Guarantor in an amount equal to the amount of
such payment multiplied by a fraction of which the numerator shall be the net
worth of the Contributing Guarantor on the date hereof (or any later date on
which it shall have become a Guarantor) and the denominator shall be the
aggregate net worth of all the Guarantors on the date hereof (or, as to any
Guarantor, on any later date on which it shall have become a Guarantor).
ARTICLE X
Miscellaneous
SECTION 10.01. Notices. (a) Notices and other
communications provided for herein shall be in writing and shall be delivered
by hand or overnight courier service, mailed by certified or registered mail or
sent by telecopy, as follows:
(i) if to the Borrower or any Guarantor, to or in care of the
Borrower at 3 Skidaway Village Square, Savannah, Georgia 31411,
Attention of Vernon J. Nagel, Executive Vice President of Finance,
Chief Financial Officer and Treasurer (Telecopy No. (912) 598-
0737), with a copy to Richard A. Walker, Executive Vice President,
Chief Administrative Officer, General Counsel and Secretary, or at
such other address as shall be specified in writing by the Borrower to
the Administrative Agent from time to time;
(ii) if to the Administrative Agent, to Chemical Bank Agency
Services Corporation, Grand Central Tower, 140 East 45th Street,
New York, NY 10017, Attention of Sandra Miklave (Telecopy No.
(212) 622-0122), with a copy to The Chase Manhattan Bank, N.A. at
One Chase Manhattan Plaza, New York, NY 10081, Attention of
Thomas T. Daniels (telecopy No. (212) 552-1711); and
(iii) if to a Lender, to it at its address (or telecopy number) set
forth in the Administrative Questionnaire delivered to the
Administrative Agent by such Lender in connection with the
execution of this Agreement or in the Assignment and Acceptance
pursuant to which such Lender shall have become a party hereto or
at such other address as shall be specified in writing by such Lender
to the Administrative Agent from time to time.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on
the date of receipt if delivered by hand or overnight courier service or sent by
telecopy or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 10.01 or in accordance
with the latest unrevoked direction from such party given in accordance with
this Section 10.01.
(b) Notwithstanding any provision to the contrary in this
Agreement, if the Borrower shall have submitted to the Administrative Agent
a notice or other communication by telephone (without a written confirmation
thereof), the Administrative Agent may send immediately (or, if such notice
or communication relates to a Swingline Loan, on a monthly basis) to the
Borrower a written confirmation containing the details of such telephone
notice or communication, in which case the Borrower shall promptly upon
receipt thereof either initial and return the written statement sent by the
Administrative Agent or advise the Administrative Agent of any errors
contained in such statement.
SECTION 10.02. No Waivers; Amendments. (a) No
failure or delay of the Administrative Agent or any Lender in exercising any
power or right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other
or further exercise thereof or the exercise of any other right or power. The
rights and remedies of the Administrative Agent and the Lenders hereunder
and under the other Loan Documents are cumulative and not exclusive of any
rights or remedies which they would otherwise have. Except as may be
otherwise expressly provided herein, no waiver of any provision of this
Agreement nor any consent to any departure by the Borrower or any
Guarantor therefrom shall in any event be effective unless the same shall be
in writing and signed by the Administrative Agent on behalf of the Required
Lenders (unless otherwise specified herein), and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice or demand on the Borrower or any Guarantor in any case
shall entitle the Borrower or such Guarantor to any other or further notice or
demand in similar or other circumstances.
(b) Neither this Agreement, nor any provision hereof nor
any exhibit or schedule hereto may be amended or modified except pursuant
to an agreement or agreements in writing entered into by the Borrower and
the Required Lenders; provided, however, that no such agreement shall
(i) decrease the principal amount of, or extend the maturity of or any dates
for the payment of any scheduled installment of principal of or interest on,
any Loan, or waive or excuse any such payment or any part thereof, or
reduce the rate of interest on any Loan, or reduce the Commitment Fee,
without the written consent of each Lender affected thereby, (ii) change or
extend the Commitment of any Lender, without the prior written consent of
such Lender, (iii) amend or modify or otherwise affect the rights or duties of
the Administrative Agent hereunder without the prior written consent of the
Administrative Agent or (iv) amend or modify the definition of "Required
Lenders", Section 2.16, this Section 10.02 or Section 10.06(a), or release any
Guarantor or all or substantially all the Collateral, without the written
consent of each Lender.
SECTION 10.03. Governing Law; Submission to
Jurisdiction. (a) THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK.
(b) The Borrower and each Guarantor irrevocably submits
to the nonexclusive jurisdiction of any New York State or Federal court
sitting in the Borough of Manhattan, The City of New York, over any suit,
action or proceeding arising out of or relating to this Agreement, any Loan
Document or any other document contemplated hereby or thereby, irrevocably
waives and agrees not to assert, by way of motion, as a defense or otherwise,
any claim that it is not subject to the jurisdiction of any such court, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding brought in any such court and any claim that
any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum.
(c) The Borrower and each Guarantor agrees, to the fullest
extent it may effectively do so under applicable law, that a judgment in any
suit, action or proceeding of the nature referred to in paragraph (b) above
brought in any such court shall be conclusive and binding upon the Borrower
or such Guarantor and may be enforced in the courts of the United States of
America or the State of New York (or any other courts to the jurisdiction of
which the Borrower or such Guarantor is or may be subject) by a suit upon
such judgment.
(d) The Borrower and each Guarantor consents to process
being served in any suit, action or proceeding of the nature referred to in
paragraph (b) by mailing a copy thereof by registered or certified mail,
postage prepaid, return receipt requested, to the address of the Borrower or
such Guarantor, as set forth or referred to in Section 10.01. The Borrower
and each Guarantor agrees that such service (i) shall be deemed in every
respect effective service of process upon the Borrower or such Guarantor in
any such suit, action or proceeding and (ii) shall, to the fullest extent
permitted by law, be taken and held to be valid personal service upon and
personal delivery to the Borrower or such Guarantor.
(e) Nothing in this Section 10.03 shall affect the right of
the Administrative Agent or any Lender to serve process in any manner per-
mitted by law, or limit any right that the Administrative Agent or any Lender
may have to bring proceedings against the Borrower or any Guarantor in the
courts of any jurisdiction or to enforce in any lawful manner a judgment
obtained in one jurisdiction in any other jurisdiction.
SECTION 10.04. Expenses; Indemnity. (a) The Borrower
shall pay all reasonable out-of-pocket expenses incurred by the Administrative
Agent in connection with the syndication of the credit facility provided for
herein and the preparation and administration of this Agreement and the other
Loan Documents or in connection with any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
hereby or thereby contemplated shall be consummated), or incurred during the
continuance of a Default or Event of Default by the Administrative Agent or
any Lender in connection with the enforcement or protection of its rights
under this Agreement and the other Loan Documents or in connection with
the Loans made hereunder, including the reasonable fees, charges and
disbursements of Cravath, Swaine & Moore, counsel for the Administrative
Agent, and, in connection with any such enforcement or protection, the
reasonable fees, charges and disbursements of any other counsel for the
Administrative Agent, the Collateral Agent or any Lender.
(b) The Borrower shall indemnify the Administrative
Agent, each Lender and each Affiliate of any of the foregoing persons and
each of their respective directors, officers, employees and agents (each such
person being called an "Indemnitee") against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable counsel fees, charges and disbursements,
incurred by or asserted against any Indemnitee arising out of, in any way
connected with, or as a result of (i) the execution or delivery of this
Agreement or any other Loan Document or any agreement or instrument
contemplated thereby, the performance by the parties thereto of their
respective obligations thereunder and the other transactions contemplated
thereby, (ii) the use of the proceeds of the Loans and (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto, provided, however, that
such indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses have resulted
from the gross negligence or wilful misconduct of such Indemnitee.
(c) The provisions of this Section 10.04 shall remain
operative and in full force and effect regardless of the expiration of the term
of this Agreement, the consummation of the transactions contemplated
hereby, the repayment of any of the Loans, the expiration of the
Commitments, the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document, or any investigation made by or
on behalf of the Administrative Agent or any Lender. All amounts due under
this Section 10.04 shall be payable on written demand therefor.
SECTION 10.05. Survival of Agreements, Representations
and Warranties, etc. All warranties, representations and covenants made by
the Borrower or any Guarantor herein or in any certificate or other instrument
delivered by the Borrower or any Guarantor or on its behalf in connection
with this Agreement or any other Loan Document shall be considered to have
been relied upon by the Lenders and shall survive the making of the Loans
herein contemplated regardless of any investigation made by the Lenders or
on their behalf and shall continue in full force and effect so long as any
amount due or to become due hereunder is outstanding and unpaid. All
statements in any such certificate or other instrument made by or on behalf of
the Borrower, any Subsidiary or any Affiliate of any of them shall constitute
representations and warranties by the Borrower hereunder. The right of each
Lender to receive payments pursuant to Sections 2.13, 2.15, 2.19 and 10.04
shall survive the termination of this Agreement and the repayment of the
Loans.
SECTION 10.06. Successors and Assigns. (a) This
Agreement shall be binding upon and inure to the benefit of the Borrower,
the Guarantors, the Lenders, the Administrative Agent and their respective
successors and assigns. Neither the Borrower nor any Guarantor may assign
or transfer any of its rights or obligations hereunder without the prior written
consent of all the Lenders.
(b) Each Lender may assign all or a portion of its interests,
rights and obligations under this Agreement (including all or a portion of its
Commitments and the Loans at the time owing to it); provided, however, that
(i) except in the case of an assignment by a Lender to an Affiliate of such
Lender or to another Lender, the Borrower must consent to such assignment
in writing (which consent may not be unreasonably withheld), (ii) except in
the case of an assignment to another Lender or an Affiliate of any Lender or
in the case of an assignment of all the assigning Lender's Loans and
Commitments, the aggregate amount of the Commitments and Loans, without
duplication, of the assigning Lender subject to any such assignment shall not
be less than $10,000,000 and will not result in such assigning Lender holding
an aggregate amount of Commitments and Loans less than $10,000,000,
(iii) each assignment of Commitments or Loans will be made on a pro rata
basis as between the Commitments and the commitments under the Facility
B Credit Agreement and the Loans and the loans under the Facility B Credit
Agreement, respectively, and (iv) 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 $3,500. Upon
such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective
date shall be (unless waived by the Administrative Agent) at least five
Business Days after the execution thereof, (A) the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such Assign-
ment and Acceptance, have the rights and obligations of a Lender under this
Agreement and (B) the assignor thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obliga-
tions under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of the assignor's rights and
obligations under this Agreement, the assignor shall cease to be a party hereto
but shall continue to be entitled to the benefits of Sections 2.13, 2.15, 2.19
and 10.04 as well as to any Commitment Fee accrued for its account here-
under and not yet paid).
(c) By executing and delivering an Assignment and
Acceptance, the assignor and the assignee thereunder shall be deemed to
confirm to and agree with each other and the Borrower as follows: (i) such
assignor warrants that it is the legal and beneficial owner of the interest
being assigned free and clear of any adverse claim; (ii) except as set forth in
clause (i) above, the assignor makes no other representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement, or the execu-
tion, legality, validity, enforceability, genuineness, sufficiency or value of
this Agreement or any other instrument or document furnished pursuant hereto or
thereto, or the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under this Agreement or
any other instrument or document furnished pursuant hereto or thereto;
(iii) such assignee represents and warrants that it is legally authorized to
enter into such Assignment and Acceptance; (iv) such assignee confirms that it
has received a copy of this Agreement together with copies of the financial
statements described in Section 3.05 or the most recent financial statements
delivered pursuant to Section 5.04, as applicable, and such other documents
and information as it has deemed appropriate to make its own credit analysis
and decision to enter into such Assignment and Acceptance; (v) such assignee
will independently and without reliance upon the assignor 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; (vi) such assignee appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Administrative Agent by the
terms hereof, together with such powers as are reasonably incidental thereto;
and (vii) such assignee agrees that it will, to the extent of the interest
assigned to it, perform in accordance with their terms all the obligations
which by the terms of this Agreement are required to be performed by the
Lenders.
(d) Each Lender may without the consent of the Borrower
or any Guarantor sell participations to one or more banks or other entities in
all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment and the same portion of
the Loans owing to it) and the Borrower and each Guarantor agrees that any
purchaser of a participation in such Loans so acquired may exercise any and
all rights of banker's lien, setoff, counterclaim or otherwise with respect to
any and all moneys owing by the Borrower or such Guarantor to such
purchaser as fully as if such purchaser were a holder of the Loans acquired
by each Lender hereunder in the amount of such participation; provided,
however, that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the Borrower
for the performance of its obligations hereunder, (iii) the participating
Lenders or other entities shall be entitled to the benefit of the cost
protection provisions contained in Sections 2.13, 2.15 and 2.19 to the same
extent as if they were the Lender and (iv) the Borrower shall continue to
deal solely and directly with the Lender in connection with the Lender's rights
and obligations under this Agreement, and the Lender shall retain the sole right
to enforce the obligations of the Borrower and the Guarantors relating to the
Loans and to approve, without the consent of or consultation with any
participant, any amendment, modification or waiver of any provision of this
Agreement (other than amendments, modifications or waivers with respect to
Fees payable hereunder or an increase in the amount of principal of or a
decrease in the rate at which interest is payable on the Loans, or an extension
of the dates fixed for payments of principal of or interest on the Loans).
(e) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
10.06, disclose to the assignee or participant or proposed assignee or partici-
pant any information relating to the Borrower or the Subsidiaries furnished to
the Lenders by or on behalf of the Borrower or the Subsidiaries, as
applicable; provided that, prior to any such disclosure, each such assignee or
participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of any confidential information
relating to the Borrower or any Subsidiary received from the Lenders.
(f) The Administrative Agent shall maintain at one of its
offices in The City of New York a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses
of the Lenders, the Commitment of, and principal amount of any Loans
owing to, each Lender pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive in the absence of
manifest error and the Borrower, the Guarantors, the Administrative Agent
and the Lenders may treat each person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement. The Register shall be available for inspection by the
Borrower at any reasonable time and from time to time upon reasonable prior
notice.
(g) Any Lender may at any time pledge all or any portion
of its rights under this Agreement to a Federal Reserve Bank; provided that
no such pledge shall release any Lender from its obligations hereunder or
substitute any such Federal Reserve Bank for such Lender as a party hereto.
SECTION 10.07. Right of Setoff. If an Event of Default
shall have occurred and be continuing, each Lender is hereby authorized at
any time and from time to time, to the extent not prohibited by applicable
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender to or for the credit or the account of the
Borrower or any Guarantor against any of and all the obligations of the
Borrower or such Guarantor now or hereafter existing under this Agreement
and other Loan Documents held by such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement or such
other Loan Document and although such obligations may be unmatured. The
rights of each Lender under this Section 10.07 are in addition to other rights
and remedies (including other rights of setoff) which such Lender may have.
SECTION 10.08. Severability. In case any one or more of
the provisions contained in this Agreement shall be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein or therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
SECTION 10.09. Cover Page, Table of Contents and
Section Headings. The cover page, Table of Contents and section headings
used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of or be taken into
consideration in interpreting this Agreement.
SECTION 10.10. Counterparts; Effectiveness. This
Agreement may be signed in any number of counterparts with the same effect
as if the signatures thereon and hereon were upon the same instrument. This
Agreement shall become effective when copies hereof which, when taken
together, bear the signatures of each of the parties hereto shall have been
received by the Administrative Agent.
SECTION 10.11. Waiver of Jury Trial. Each party hereto
hereby waives, to the fullest extent permitted by applicable law, any right it
may have to a trial by jury in respect of any litigation directly or indirectly
arising out of, under or in connection with this Agreement. Each party hereto
(a) certifies that no representative, agent or attorney of any other party has
represented, expressly or otherwise, that such other party would not, in the
event of litigation, seek to enforce the foregoing waiver and (b) acknowledges
that it and the other parties hereto have been induced to enter into this Agree-
ment by, among other things, the mutual waivers and certifications in this
Section 10.11.
SECTION 10.12. Entire Agreement. This Agreement, the
other Loan Documents and the Fee Letter constitute the entire contract
between the parties relative to the subject matter hereof. Any previous
agreement among the parties with respect to the subject matter hereof is
superseded by this Agreement, the other Loan Documents and the Fee Letter.
Nothing in this Agreement, the other Loan Documents or the Fee Letter,
expressed or implied, is intended to confer upon any party other than the
parties hereto and thereto any rights, remedies, obligations or liabilities
under or by reason of this Agreement, the other Loan Documents or the Fee
Letter.
SECTION 10.13. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the applicable interest rate,
together with all fees and charges which are treated as interest under appli-
cable law (collectively the "Charges"), as provided for herein or in any other
document executed in connection herewith, or otherwise contracted for,
charged, received, taken or reserved by any Lender, shall exceed the
maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by such Lender in accordance with
applicable law, the rate of interest payable hereunder, together with all
Charges payable to such Lender, shall be limited to the Maximum Rate.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective authorized officers as
of the day and year first written above.
KUHLMAN CORPORATION, as Borrower,
by
/s/ Vernon J. Nagel
------------------------------
Name: Vernon J. Nagel
Title: Executive Vice President of Finance
KUHLMAN ELECTRIC CORPORATION,
COLEMAN CABLE SYSTEMS, INC.,
COMMUNICATION CABLE, INC.,
SCHWITZER, INC.,
SCHWITZER U.S. INC.,
ASSOCIATED ENGINEERING COMPANY,
and
BARON WIRE & CABLE CORP., as Guarantors,
by
/s/ Vernon J. Nagel
---------------------------
Name: Vernon J. Nagel
Title: Vice President
THE CHASE MANHATTAN BANK, N.A.,
individually and as Administrative Agent,
by
/s/ Bruce S. Borden
---------------------------
Name: Bruce S. Borden
Title: Vice President
ABN AMRO BANK N.V.,
ATLANTA AGENCY,
by
/s/ Steven Hipsman
---------------------------
Name: Steven Hipsman
Title: Vice President
by
/s/ Robert Budnek
---------------------------
Name: Robert Budnek
Title: Assistant Vice President
AMSOUTH BANK OF ALABAMA,
by
/s/ Dennis S. Losin
---------------------------
Name: Dennis S. Losin
Title: Vice President
THE FIRST NATIONAL BANK OF BOSTON,
by
/s/ Rod Guinn
---------------------------
Name: Rod Guinn
Title: Director
BANQUE PARIBAS, NEW YORK BRANCH,
by
/s/ Duane P. Helkowski
---------------------------
Name: Duane P. Helkowski
Title: Assistant Vice President
by
/s/ Ann C. Pifer
---------------------------
Name: Ann C. Pifer
Title: Vice President
COMERICA BANK,
by
/s/ John M. Costa
---------------------------
Name: John M. Costa
Title: Vice President
CREDIT LYONNAIS ATLANTA AGENCY,
by
/s/ David M. Cawrse
---------------------------
Name: David M. Cawrse
Title: Vice President
FIRST UNION NATIONAL BANK OF GEORGIA,
by
/s/ Louis K. Beasley, III
---------------------------
Name: Louis K. Beasley, III
Title: Vice President
HARRIS TRUST AND SAVINGS BANK,
by
/s/ Patrick J. McDonnell
---------------------------
Name: Patrick J. McDonnell
Title: Vice President
MELLON BANK, N.A.,
by
/s/ Clifford A. Mull
---------------------------
Name: Clifford A. Mull
Title: Assistant Vice President
NBD BANK,
by
/s/ J. Philip Lowman
---------------------------
Name: J. Philip Lowman
Title: First Vice President
PNC BANK, NATIONAL ASSOCIATION,
by
/s/ Robert J. Mitchell Jr.
---------------------------
Name: Robert J. Mitchell Jr.
Title: Vice President
THE SUMITOMO BANK, LIMITED,
by
/s/ Roger N. Arsham
---------------------------
Name: Roger N. Arsham
Title: Vice-President
by
/s/ Lauren P. Carrigan
---------------------------
Name: Lauren P. Carrigan
Title: Asst. Vice-President
SUNTRUST BANK, ATLANTA,
by
/s/ Bradley J. Staples
---------------------------
Name: Bradley J. Staples
Title: Bank Officer
by
/s/ C. Wes Burton, Jr.
---------------------------
Name: C. Wes Burton, Jr.
Title: Vice President
WACHOVIA BANK OF GEORGIA, N.A.,
by
/s/ Kevin B. Harrison
---------------------------
Name: Kevin B. Harrison
Title: Vice President
EXECUTION COPY
FIVE-YEAR AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of July 1, 1996
among
KUHLMAN CORPORATION,
THE GUARANTORS PARTY HERETO,
THE LENDERS PARTY HERETO
and
THE CHASE MANHATTAN BANK, N.A.,
as Administrative Agent
[CS&M Ref. No. 6700-426]
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Defined Terms 1
SECTION 1.02. Terms Generally 15
ARTICLE II
The Credits
SECTION 2.01. Commitments 15
SECTION 2.02. Revolving Loans 15
SECTION 2.03. Borrowing Procedure 16
SECTION 2.04. Repayment of Loans; Evidence of Debt 16
SECTION 2.05. Fees 17
SECTION 2.06. Interest on Loans 17
SECTION 2.07. Default Interest 18
SECTION 2.08. Alternate Rate of Interest 18
SECTION 2.09. Termination and Reduction of Commitments 18
SECTION 2.10. Conversion and Continuation of Revolving
Borrowings 19
SECTION 2.11. Repayment of Revolving Borrowings and
Swingline Loans 20
SECTION 2.12. Prepayment 20
SECTION 2.13. Reserve Requirements; Change in
Circumstances 21
SECTION 2.14. Change in Legality 22
SECTION 2.15. Indemnity 23
SECTION 2.16. Pro Rata Treatment 23
SECTION 2.17. Sharing of Setoffs 23
SECTION 2.18. Payments 24
SECTION 2.19. Taxes 24
SECTION 2.20. Duty to Mitigate; Assignment of
Commitments Under Certain
Circumstances 25
SECTION 2.21. Swingline Loans 25
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers 27
SECTION 3.02. Authorization 27
SECTION 3.03. Enforceability 27
SECTION 3.04. Governmental Approvals 27
SECTION 3.05. Financial Condition 27
SECTION 3.06. No Material Adverse Change 28
SECTION 3.07. Title to Properties; Possession Under
Leases 28
SECTION 3.08. Subsidiaries 28
SECTION 3.09. Litigation; Compliance with Laws 28
SECTION 3.10. Agreements 29
SECTION 3.11. Federal Reserve Regulations 29
SECTION 3.12. Investment Company Act; Public Utility
Holding Company Act 29
SECTION 3.13. Use of Proceeds 29
SECTION 3.14. Tax Returns 29
SECTION 3.15. Employee Benefit Plans 29
SECTION 3.16. No Material Misstatements 30
SECTION 3.17. Environmental and Safety Matters 30
SECTION 3.18. Security Documents 30
ARTICLE IV
Conditions of Lending 31
ARTICLE V
Affirmative Covenants
SECTION 5.01. Existence; Businesses and Properties 32
SECTION 5.02. Insurance 32
SECTION 5.03. Taxes 32
SECTION 5.04. Financial Statements, Reports, etc. 32
SECTION 5.05. Litigation and Other Notices 33
SECTION 5.06. Employee Benefits 33
SECTION 5.07. Books and Records; Inspection Rights 33
SECTION 5.08. Compliance with Laws 34
SECTION 5.09. Use of Proceeds 34
SECTION 5.10. Further Assurances 34
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness 35
SECTION 6.02. Liens 35
SECTION 6.03. Sale and Leaseback Transactions 37
SECTION 6.04. Investments, Loans and Advances 37
SECTION 6.05. Mergers, Consolidations, Sales of Assets
and Acquisitions 38
SECTION 6.06. Restrictions on Ability of Subsidiaries
to Pay Dividends 38
SECTION 6.07. Transactions with Affiliates 38
SECTION 6.08. Interest Coverage Ratio 39
SECTION 6.09. Leverage Ratio 39
SECTION 6.10. Consolidated Net Worth 39
ARTICLE VII
Events of Default 39
ARTICLE VIII
The Administrative Agent 41
ARTICLE IX
Guarantee 44
ARTICLE X
Miscellaneous
SECTION 10.01. Notices 45
SECTION 10.02. No Waivers; Amendments 46
SECTION 10.03. Governing Law; Submission to
Jurisdiction 47
SECTION 10.04. Expenses; Indemnity 47
SECTION 10.05. Survival of Agreements, Representations
and Warranties, etc. 48
SECTION 10.06. Successors and Assigns 48
SECTION 10.07. Right of Setoff 50
SECTION 10.08. Severability 50
SECTION 10.09. Cover Page, Table of Contents and
Section Headings 51
SECTION 10.10. Counterparts; Effectiveness 51
SECTION 10.11. Waiver of Jury Trial 51
SECTION 10.12. Entire Agreement 51
SECTION 10.13. Interest Rate Limitations 51
Exhibits and Schedules
Exhibit A Form of Administrative Questionnaire
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Additional Guarantor Agreement
Exhibit D Form of Pledge Agreement
Schedule 2.01 Lenders and Commitments
Schedule 3.08 Subsidiaries
FIVE-YEAR AMENDED AND
RESTATED CREDIT AGREEMENT dated as of
July 1, 1996, among KUHLMAN CORPORATION,
a Delaware corporation (the "Borrower"); the
Guarantors referred to herein; the financial
institutions from time to time party hereto, initially
consisting of the institutions listed in Schedule 2.01
(the "Lenders"); and THE CHASE MANHATTAN
BANK, N.A., as swingline lender (in such capacity,
the "Swingline Lender") and as agent for the
Lenders (in such capacity, the "Administrative
Agent").
The Borrower has requested the Lenders, and the Lenders,
pursuant to the Sixth Amendment to the Existing Credit Agreement (such
term and each other capitalized term used and not otherwise defined herein
having the meaning assigned to it in Article I), have agreed, to extend credit
in the form of (a) Revolving Loans at any time and from time to time on or
after the Effective Date and prior to the Maturity Date, in an aggregate
principal amount at any time outstanding not exceeding $125,000,000 and (b)
Swingline Loans in an aggregate principal amount outstanding not in excess
of the lesser of (i) $10,000,000 minus the aggregate amount of the swingline
loans outstanding under the Facility A Credit Agreement at such time and (ii)
the excess of the aggregate amount of the Commitments over the Aggregate
Revolving Loan Exposure at such time. The proceeds of Revolving Loans
and Swingline Loans are to be used solely to provide for general corporate
purposes of the Borrower.
Accordingly, the Borrower, the Guarantors, the Lenders, the
Swingline Lender and the Administrative Agent agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this
Agreement, the following terms shall have the meanings specified below:
"ABR Loan" shall mean any Revolving Loan bearing
interest at a rate determined by reference to the Alternate Base Rate in
accordance with the provisions of Article II.
"ABR Borrowing" shall mean a Borrowing comprised of
ABR Loans.
"Additional Guarantor Agreement" shall mean an Additional
Guarantor Agreement in the form of Exhibit C.
"Administrative Agent Fees" shall have the meaning
assigned to such term in Section 2.05(b).
"Administrative Questionnaire" shall mean an
Administrative Questionnaire in the form of Exhibit A.
"Affiliate" shall mean, when used with respect to a specified
person, another person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with
the person specified.
"Aggregate Revolving Loan Exposure" shall mean the
aggregate amount of the Lenders' Revolving Loan Exposures.
"Alternate Base Rate" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect
on such day plus 1/2 of 1%. For purposes hereof, "Prime Rate" shall mean
the rate of interest per annum publicly announced from time to time by the
Administrative Agent 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 effective. "Base CD Rate" shall mean the
sum of (a) the product of (i) the Three-Month Secondary CD Rate and
(ii) Statutory Reserves and (b) the Assessment Rate. "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 Board through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices of
the 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 the Administrative Agent from
three New York City negotiable certificate of deposit dealers of recognized
standing selected by it. "Federal Funds Effective Rate" shall mean, for any
day, the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as reported on such Business Day by the Federal Reserve Bank of
New York, or, if such rate is not so reported for any day which is a Business
Day, the average of the quotations for the day for such transactions received
by the Administrative Agent or Swingline Lender, as applicable, from three
Federal funds brokers of recognized standing selected by it. 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 Base CD
Rate or the Federal Funds Effective Rate or both for any reason, including the
inability of the Administrative Agent to obtain sufficient quotations in
accordance with the terms thereof, 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 in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds Effective Rate, respectively.
"Applicable Commitment Fee Percentage" shall mean, for
any day, the applicable percentage set forth below under the caption "Fee
Percentage", based upon the Leverage Ratio as set forth below:
Leverage
Ratio
Fee Percentage
Category 1
Less than or equal to 1.75
0.200
Category 2
Greater than 1.75 but less than or
equal to 2.50
0.225
Category 3
Greater than 2.50 but less than or
equal to 3.00
0.250
Category 4
Greater than 3.00 but less than or
equal to 3.50
0.300
Category 5
Greater than 3.50
0.375
The Leverage Ratio utilized for purposes of determining the Fee Percentage
shall be that in effect as of the last day of the most recently completed fiscal
quarter of the Borrower in respect of which financial statements have been
delivered pursuant to this Agreement or the Existing Credit Agreement. Each
change in the Applicable Commitment Fee Percentage resulting from a
change in the Leverage Ratio shall be effective on and after the date of
delivery to the Administrative Agent of the applicable financial statements to
the date of delivery of financial statements and certificates indicating another
such change.
"Applicable Margin" shall mean, for any day, with respect
to any Eurodollar Loan or Swingline Loan, as the case may be, the applicable
percentage set forth below under the caption "LIBOR Spread" or "Swingline
Spread", as the case may be, based upon the Leverage Ratio as set forth
below:
Leverage
Ratio
LIBOR
Spread
Swingline
Spread
Category 1
Less than or equal to 1.75
0.5000
0.5625
Category 2
Greater than 1.75 but less than
or equal to 2.50
0.6250
0.6875
Category 3
Greater than 2.50 but less than
or equal to 3.00
0.7500
0.8125
Category 4
Greater than 3.00 but less than
or equal to 3.50
1.0000
1.0625
Category 5
Greater than 3.50
1.5000
1.5625
The Leverage Ratio utilized for purposes of determining the Eurodollar
Spread and the Swingline Spread shall be that in effect as of the last day of
the most recently completed fiscal quarter of the Borrower in respect of
which financial statements have been delivered pursuant to this Agreement or
the Existing Credit Agreement. Each change in the Applicable Margin
resulting from a change in the Leverage Ratio shall be effective with respect
to all Loans and Commitments outstanding on and after the date of delivery
to the Administrative Agent of the applicable financial statements to the date
of delivery of financial statements and certificates indicating another such
change.
"Applicable Percentage" means, with respect to any Lender,
the percentage of the total Commitments represented by such Lender's
Commitment. If the Commitments have terminated or expired, the
Applicable Percentages shall be determined based upon the Commitments
most recently in effect, giving effect to any assignments.
"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 the
Administrative Agent to the Federal Deposit Insurance Corporation (or any
successor) for insurance by such Corporation (or such successor) of time
deposits made in Dollars at the Administrative Agent's domestic offices.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an assignee, and accepted by the
Administrative Agent, in the form of Exhibit B or such other form as shall be
approved by the Administrative Agent and the Borrower.
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"Borrowing" shall mean (a) a group of Revolving Loans of
a single Type made by the Lenders on a single date pursuant to the
Commitments and as to which a single Interest Period is in effect or (b) a
Swingline Loan.
"Borrowing Request" shall mean a request by the Borrower
for a Borrowing in accordance with the terms of Section 2.03.
"Business Day" shall mean any day (other than a day which
is a Saturday, Sunday or legal holiday in the State of New York) on which
banks are open for business in New York City; provided, however, that when
used in connection with a Eurodollar Loan, the term "Business Day" shall
also exclude any day on which banks are not open for dealings in dollar
deposits in the London interbank market.
"Capital Lease Obligations" of any person shall mean the
obligations of such person and its consolidated subsidiaries to pay rent or
other amounts under any lease of (or other arrangement conveying the right
to use) real or personal property, which obligations are required to be
classified and accounted for as capital leases on a consolidated balance sheet
of such person under GAAP, and the amount of such obligations shall be the
capitalized amount thereof determined in accordance with GAAP.
"Capital Stock" of any person shall mean any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) equity of such person,
including any preferred stock, any limited or general partnership interest and
any limited liability company membership interest.
A "Change in Control" shall be deemed to have occurred if
(a) any person or group (within the meaning of Rule 13d-5 of the Securities
and Exchange Commission as in effect on the date hereof) shall own directly
or indirectly, beneficially or of record, shares representing 25% or more of
the aggregate ordinary voting power represented by the issued and
outstanding capital stock of the Borrower; (b) a majority of the seats (other
than vacant seats) on the board of directors of the Borrower shall at any time
have been occupied by persons who were neither (i) nominated by the board
of directors of the Borrower (or a designee or nominating committee thereof)
prior to their initial election to such board of directors, nor (ii) appointed
by directors so nominated; or (c) any person or group (other than the board of
directors of the Borrower) shall otherwise directly or indirectly Control the
Borrower. Notwithstanding anything in the foregoing definition, a merger or
consolidation of the Borrower that complies with the requirements of
Section 6.05(c) will in no event be deemed of itself to result in a Change in
Control.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender
(or, for purposes of Section 2.13(b), by any lending office of such Lender or
by such Lender's holding company, if any) with any request, guideline or
directive (whether or not having the force of law) of any Governmental
Authority addressing matters within the scope of its jurisdiction and made or
issued after the date of this Agreement.
"Chase Letters of Credit" shall mean letters of credit with an
aggregate face amount not to exceed $10,000,000 issued for the account of
the Borrower or any of the Subsidiaries by The Chase Manhattan Bank, N.A.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Collateral" shall have the meaning assigned to such term in
the Pledge Agreement.
"Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans hereunder as set forth
on Schedule 2.01 or in the Assignment and Acceptance pursuant to which
such Lender assumed its Commitment, as applicable, as the same may be
reduced from time to time pursuant to Section 2.09 and pursuant to
assignments by such Lender pursuant to Section 10.06.
"Commitment Fee" shall have the meaning assigned to such
term in Section 2.05(a).
"Consolidated Capital Expenditures" shall mean, for any
period, (a) the aggregate amount of all expenditures (whether paid in cash or
other consideration or accrued as a liability) by the Borrower and its
Subsidiaries during that period that, in conformity with GAAP, would be
included in "additions to property, plant or equipment" or comparable items
in a consolidated statement of cash flows of the Borrower and its Subsidiaries
for such period, minus (b) the aggregate net proceeds of all dispositions of
property, plant and equipment by the Borrower and its Subsidiaries in the
ordinary course of business during that period.
"Consolidated EBITDA" shall mean, for any period, the
Consolidated Net Income of the Borrower and the Subsidiaries for such
period plus, to the extent deducted in computing such consolidated net
income and without duplication, the sum of (a) income tax expense, (b)
interest expense, (c) depreciation and amortization expense, and
(d) extraordinary losses during such period, minus, to the extent added in
computing such consolidated net income and without duplication, (i) interest
income and (ii) extraordinary gains during such period. For any period,
Consolidated EBITDA shall be determined on a pro forma basis as if
Permitted Business Acquisitions occurring during such period had been
completed on the first day of such period. For purposes of this definition, the
acquisition of Communication Cable, Inc. shall be deemed to be a Permitted
Business Acquisition.
"Consolidated Interest Expense" shall mean, with respect to
any period, the net interest expense of the Borrower and the Subsidiaries for
such period, determined on a consolidated basis in accordance with GAAP.
For any period, Consolidated Interest Expense shall be determined on a pro
forma basis as if Permitted Business Acquisitions occurring during such
period had been completed on the first day of such period. For purposes of
this definition, the acquisition of Communication Cable, Inc. shall be deemed
to be a Permitted Business Acquisition.
"Consolidated Net Income" shall mean, with respect to the
Borrower for any period, the net income (or loss) of the Borrower and the
Subsidiaries for such period before extraordinary items, determined in
accordance with GAAP on a consolidated basis, provided that there shall be
excluded (i) income (or loss) of the Borrower in which any other person
(other than the Borrower or any of its wholly owned Subsidiaries) has a joint
interest, except to the extent of the amount of dividends or other distributions
actually paid to the Borrower or any of its Subsidiaries by such other person
during such period in cash, (ii) the income (or loss) of any person accrued
prior to the date it becomes a consolidated subsidiary of the Borrower or is
merged into or consolidated with such person or any of its consolidated
subsidiaries, (iii) the income of any consolidated subsidiary of the Borrower
to the extent that the declaration or payment of dividends or similar
distributions by such consolidated subsidiary of such income is not at the
time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to such consolidated subsidiary, (iv) expenses incurred in effecting
acquisitions and mergers by or involving the Borrower or any of its
consolidated subsidiaries, (v) non-cash charges (other than depreciation and
amortization) in accordance with GAAP and (vi) any extraordinary gains or
extraordinary income net of any extraordinary losses.
"Consolidated Net Worth" shall mean, at any date, the
consolidated stockholders' equity of the Borrower and the Subsidiaries, as
determined on a consolidated basis in accordance with GAAP, but excluding
any gains or losses in periods ending after the date hereof as a result of
foreign currency translation.
"Consolidated Total Assets" shall mean the total assets of
the Borrower and the Subsidiaries, determined on a consolidated basis in
accordance with GAAP.
"Control" shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
a person, whether through the ownership of voting securities, by contract or
otherwise, and "Controlling" and "Controlled" shall have meanings correlative
thereto.
"Default" shall mean any event or condition which with the
giving of notice or lapse of time or both would constitute an Event of
Default.
"Designated Subsidiary" shall mean each Significant
Subsidiary that is a Domestic Subsidiary.
"dollars" or "$" shall mean lawful money of the United
States of America.
"Domestic Subsidiary" shall mean any Subsidiary organized
under the laws of the United States of America or any state or political
subdivision thereof.
"Effective Date" shall mean the date hereof.
"Environmental and Safety Laws" shall have the meaning
assigned to such term in Section 3.17.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether
or not incorporated) that, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code, or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA Event" shall mean (i) any "reportable event", as
defined in Section 4043 of ERISA or the regulations issued thereunder, with
respect to a Plan; (ii) the adoption of any amendment to a Plan that would
require the provision of security pursuant to Section 401(a)(29) of the Code
or Section 307 of ERISA; (iii) the existence with respect to any Plan of an
"accumulated funding deficiency" (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (iv) the filing pursuant to
Section 412(d) of the Code or Section 303(d) of ERISA of an application for
a waiver of the minimum funding standard with respect to any Plan; (v) the
incurrence of any liability under Title IV of ERISA with respect to the
termination of any Plan or the withdrawal or partial withdrawal of the
Borrower or any of its ERISA Affiliates from any Plan or Multiemployer
Plan; (vi) the receipt by the Borrower or any ERISA Affiliate from the PBGC
or a plan administrator of any notice relating to the intention to terminate any
Plan or Plans or to appoint a trustee to administer any Plan; (vii) the receipt
by the Borrower or any ERISA Affiliate of any notice concerning the
imposition of Withdrawal Liability or a determination that a Multiemployer
Plan is, or is expected to be, insolvent or in reorganization, within the
meaning of Title IV of ERISA; and (viii) the occurrence of a "prohibited
transaction" with respect to which the Borrower or any Subsidiary is a
"disqualified person" (within the meaning of Section 4975 of the Code) and
with respect to which the Borrower or any Subsidiary would be liable for the
payment of an excise tax.
"Eurodollar Borrowing" shall mean a Borrowing comprised
of Eurodollar Loans.
"Eurodollar Loan" shall mean any Revolving Loan bearing
interest at a rate determined by reference to the LIBO Rate in accordance
with the provisions of Article II.
"Event of Default" shall have the meaning assigned to such
term in Article VII.
"Excluded Taxes" means, with respect to the Administrative
Agent, any Lender or any other recipient of any payment to be made by or
on account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the
jurisdiction under the laws of which it is organized, or the jurisdiction in
which its principal office is located or, in the case of any Lender, in which
its applicable lending office is located, (b) any branch profits taxes imposed
by the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located and (c) in the case of a Foreign
Lender, any U.S. Federal withholding tax imposed on amounts payable to
such Foreign Lender under this Agreement because of its failure or inability
to comply with Section 2.19(f) or for any other reason, unless (and to the
extent that) (i) such withholding tax liability arises or is increased by reason
of a Change in Law occurring after such Foreign Lender becomes a Lender
under this Agreement or (ii) such Foreign Lender's assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from the
Borrower with respect to such withholding tax liability pursuant to Section
2.19(a).
"Existing Credit Agreement" shall mean the Credit
Agreement dated as of December 15, 1993, among the Borrower,
NationsBank of Georgia, N.A. ("NationsBank") and the Chase Manhattan
Bank, N.A. as Managing Agents and Lenders, NationsBank as administrative
agent for the lenders party thereto and The Chase Manhattan Bank, N.A., as
syndication agent, as amended to but excluding the date hereof.
"Facility A Credit Agreement" shall mean the 364-Day
Amended and Restated Credit Agreement dated as of the date hereof among
the Borrower, the lenders party thereto and The Chase Manhattan Bank, N.A.,
as Administrative Agent.
"Federal Funds Effective Rate" shall have the meaning
assigned to such term in the definition of "Alternate Base Rate".
"Fee Letter" shall mean the Fee Letter dated May 15, 1996,
between the Borrower and the Administrative Agent.
"Fees" shall mean the Commitment Fees and the
Administrative Agent Fees.
"Financial Officer" of any person shall mean the chief
financial officer, the treasurer, the Director of Finance, the principal
accounting officer or the Manager of Corporate Accounting of such person or
any other senior financial officer designated by the Chief Financial Officer in
a notice delivered to the Administrative Agent.
"Foreign Lender" means any Lender that is organized under
the laws of a jurisdiction other than that in which the Borrower is located.
For purposes hereof, the United States of America and each State thereof
shall be considered to constitute a single jurisdiction.
"GAAP" shall mean generally accepted accounting
principles applied on a consistent basis.
"Governmental Authority" shall mean any Federal, state,
local or foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantee" of or by any person shall mean any obligation,
contingent or otherwise, of such person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other person (the "primary
obligor") (excluding endorsements of checks for collection or deposit in the
ordinary course of business) in any manner, whether directly or indirectly,
and including any obligation of such person, direct or indirect, (i) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or to purchase (or to advance or supply funds for the purchase
of) any security for the payment of such Indebtedness, (ii) to purchase
property, securities or services for the purpose of assuring the owner of such
Indebtedness of the payment of such Indebtedness or (iii) to maintain working
capital, equity capital or other financial statement condition or liquidity of
the primary obligor so as to enable the primary obligor to pay such
Indebtedness.
"Guarantor" shall mean each Subsidiary executing this
Agreement as a Guarantor and each other Subsidiary hereafter becoming a
Guarantor as provided in Section 5.10.
"Indebtedness" of any person shall mean, without
duplication, (a) all obligations of such person for borrowed money or with
respect to deposits or advances of any kind (including repurchase
obligations), (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such person
upon which interest charges are customarily paid, (d) all obligations of such
person under conditional sale or other title retention agreements relating to
property purchased by such person, (e) all obligations of such person issued
or assumed as the deferred purchase price of property or services (other than
accounts payable to suppliers incurred in the ordinary course of business),
(f) all Capital Lease Obligations of such person, (g) all obligations of others
secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property or
assets owned or acquired by such person, whether or not the obligations
secured thereby have been assumed, (h) all Guarantees of such person, (i) all
obligations of such person with respect to interest rate protection agreements,
foreign currency exchange agreements or other hedging arrangements (valued
at the termination value thereof computed in accordance with a method
approved by the International Swap Dealers Association and agreed to by
such person in the applicable hedging agreement, if any) and (j) all
obligations, contingent or otherwise, of such person as an account party in
respect of letters of credit, letters of guaranty and bankers' acceptances. The
Indebtedness of any person shall include, without duplication, the
Indebtedness of any other entity (including any partnership in which such
person is a general partner) to the extent such person is liable therefor as a
result of such person's ownership interest in or other relationship with such
entity, except to the extent the terms of Indebtedness provide that such person
is not liable therefor.
"Indemnitee" shall have the meaning assigned to such term
in Section 10.04.
"Interest Payment Date" shall mean, with respect to any
Loan, the last day of the Interest Period applicable to the Borrowing of which
such Loan is a part and, in the case of a Eurodollar Borrowing with an
Interest Period of more than three months' duration, each day that would have
been an Interest Payment Date had successive Interest Periods of three
months' duration been applicable to such Borrowing, 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 mean (a) as to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing or on the
last day of the immediately preceding Interest Period applicable to such
Borrowing, as the case may be, and ending on the numerically corresponding
day (or, if there is no numerically corresponding day, on the last day) in the
calendar month that is 1, 2, 3 or 6 months thereafter (or 12 months thereafter
in the event each Lender shall at the time be making available interest periods
of such duration), as the Borrower may elect, and (b) as to any
ABR Borrowing, the period commencing on the date of such Borrowing or
on the last day of the immediately preceding Interest Period applicable to
such Borrowing, as the case may be, and ending on the earliest of (i) the next
succeeding March 31, June 30, September 30 or December 31, (ii) the
Maturity Date and (iii) the date such Borrowing is converted to a Borrowing
of a different Type in accordance with Section 2.10 or repaid or prepaid in
accordance with Section 2.11 or 2.12; provided, however, that if any Interest
Period would end on a day other than a Business Day, such Interest Period
shall be extended to the next succeeding Business Day unless, in the case of
a Eurodollar Borrowing only, such next succeeding Business Day would fall
in the next calendar month, in which case such Interest Period shall end on
the next preceding Business Day. Interest shall accrue from and including the
first day of an Interest Period to but excluding the last day of such Interest
Period.
"Lenders" shall mean (a) the financial institutions listed on
Schedule 2.01 (other than any such financial institution that has ceased to be
a party hereto, pursuant to an Assignment and Acceptance) and (b) any
financial institution that has become a party hereto pursuant to an Assignment
and Acceptance. Unless the context indicates otherwise, the term "Lenders"
shall include the Swingline Lender.
"Leverage Ratio" shall mean, on any date, the ratio of
(a) Total Indebtedness as of such date to (b) the Consolidated EBITDA of the
Borrower and the Subsidiaries for the period of four consecutive fiscal
quarters ended most recently on or prior to such date, determined on a
consolidated basis in accordance with GAAP.
"LIBO Rate" shall mean, with respect to any Eurodollar
Borrowing, an interest rate per annum (rounded upwards, if necessary, to the
next higher 1/16th of 1%) equal to the rate at which dollar deposits
approximately equal in principal amount to the Administrative Agent's portion
of such Eurodollar Borrowing and for a maturity comparable to the applicable
Interest Period are offered in immediately available funds to the
Administrative Agent in the London interbank market at approximately 11:00
a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Lien" shall mean, with respect to any asset, (a) any
mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or
security interest in, on or of such asset, (b) the interest of a vendor or a
lessor under any conditional sale agreement, capital lease or title retention
agreement relating to such asset and (c) in the case of securities, any purchase
option, call or similar right of a third party with respect to such securities.
"Loan Documents" shall mean this Agreement, the Pledge
Agreement, any note issued to any Lender by the Borrower pursuant to this
Agreement, any security agreement entered into pursuant to Section 5.10 and
any amendment, supplement, modification, consent or waiver of, to or in
respect of any of the foregoing.
"Loans" shall mean the Revolving Loans and the Swingline
Loans.
"Margin Stock" shall have the meaning assigned to such
term in Regulation U.
"Material Adverse Effect" shall mean (a) a material adverse
effect on the business, assets, operations, prospects or financial condition of
the Borrower and the Subsidiaries taken as a whole, (b) any material
impairment of the ability of the Borrower or any Subsidiary to perform any
of its obligations under any Loan Document or (c) any material impairment
of the rights of or benefits available to the Lenders or the Administrative
Agent under any of the Loan Documents.
"Material Indebtedness" means Indebtedness (other than the
Loans) of the Borrower and/or one or more of its consolidated Subsidiaries,
arising in one or more related or unrelated transactions, in an aggregate
principal amount exceeding $10,000,000.
"Maturity Date" shall mean the fifth anniversary of the
Effective Date.
"Multiemployer Plan" shall mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Obligations" shall mean the obligations of the Borrower
under this Agreement (as it may hereafter be amended, restated, extended,
supplemented or otherwise modified from time to time) with respect to (i) the
principal amount of the Loans, (ii) interest on the Loans and (iii) all other
monetary obligations of the Borrower under this Agreement or any other
Loan Document.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution or
delivery of, or otherwise with respect to, this Agreement.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation referred to and defined in ERISA.
"Permitted Business Acquisition" shall mean any acquisition
of substantially all the assets of, or of shares or other equity interests in, a
person or division or line of business of a person (or any subsequent
investment made in a previously acquired Permitted Business Acquisition) if
immediately after giving effect thereto: (a) (i) a majority of the Capital
Stock of any acquired or newly formed corporation, partnership, association or
other business entity is owned directly or indirectly by the Borrower or (ii)
the Borrower holds directly or indirectly securities representing a majority of
the voting power of such acquired or newly formed corporation, partnership,
association or other business entity, (b) such person, division or line of
business is an industrial manufacturing company with its principal place of
business and its headquarters located in the United States, (c) a majority of
the board of directors or other governing body of any acquired corporation,
partnership, association or other business entity shall have approved such
acquisition prior to acquisition by the Borrower of equity interests therein or
the commencement by the Borrower of any tender offer or proxy solicitation,
(d) the Borrower and the Subsidiaries shall be in compliance, on a pro forma
basis after giving effect to such acquisition or formation, with the covenants
contained in Sections 6.08, 6.09 and 6.10, recomputed as at the last day of
the most recently ended fiscal quarter of the Borrower as if such acquisition
had occurred on the first day of each relevant period for testing such
compliance, and the Borrower shall have delivered to the Administrative
Agent a certificate of a Financial Officer to such effect, together with all
relevant financial information and calculations demonstrating such compliance
and (e) in the case of any acquisition involving consideration (whether in
cash or property, and including the aggregate amount of Indebtedness of such
acquired corporation, partnership, association or other business entity) in
excess of $75,000,000, the Required Lenders shall have given their prior
written consent to such acquisition.
"Permitted Investments" shall mean:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United
States of America (or by any agency thereof to the extent such
obligations are backed by the full faith and credit of the United
States of America), in each case maturing within 90 days from the
date of acquisition thereof;
(b) investments in commercial paper maturing within 90
days from the date of acquisition thereof and having, at such date of
acquisition, a rating of A-2 or better from Standard & Poor's Ratings
Group or a rating of P-2 or better from Moody's Investors Service,
Inc. (or, if either shall change the basis on which it establishes
ratings, the equivalent rating after such change);
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 90 days from the date
of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, any domestic
office of any commercial bank organized under the laws of the
United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than
$250,000,000 and whose short-term debt has, at such date of
acquisition, a rating of A or better from Standard & Poor's Ratings
Group or a rating of A or better from Moody's Investors Service, Inc.
(or, if either shall change the basis on which it establishes ratings,
the equivalent rating after such change); and
(d) other investment instruments approved in writing by the
Required Lenders and offered by financial institutions which have a
combined capital and surplus and undivided profits of not less than
$250,000,000.
"person" shall mean any natural person, corporation,
business trust, joint venture, association, company, partnership or
Governmental Authority (including any agency or political subdivision
thereof).
"Plan" shall mean any employee pension benefit plan (other
than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA, and in respect of which
the Borrower or any ERISA Affiliate is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Pledge Agreement" shall mean the Pledge Agreement,
substantially in the form of Exhibit D, among the Borrower and the
Administrative Agent, as such agreement may be amended or modified from
time to time.
"Prime Rate" shall have the meaning assigned to such term
in the definition of "Alternate Base Rate".
"Register" shall have the meaning assigned to such term in
Section 10.06(f).
"Regulation G" shall mean Regulation G of the Board as
from time to time in effect and all official rulings and interpretations
thereunder or thereof.
"Regulation U" shall mean Regulation U of the Board as
from time to time in effect and all official rulings and interpretations
thereunder or thereof.
"Regulation X" shall mean Regulation X of the Board as
from time to time in effect and all official rulings and interpretations
thereunder or thereof.
"Required Lenders" shall mean, at any time, Lenders having
Revolving Loans and unused Commitments representing at least 51% of the
sum of all Revolving Loans outstanding and unused Commitments at such
time.
"Responsible Officer" of any person shall mean any
executive officer or Financial Officer of such person and any other officer or
similar official thereof responsible for the administration of the obligations
of such person in respect of this Agreement.
"Revolving Borrowing" shall mean a Borrowing comprised
of Revolving Loans.
"Revolving Loan Exposure" shall mean, with respect to any
Lender at any time, the aggregate principal amount at such time of all
outstanding Revolving Loans of such Lender.
"Revolving Loans" shall mean the loans made by the
Lenders to the Borrower pursuant to Section 2.01. Each Revolving Loan
shall be a Eurodollar Loan or an ABR Loan.
"Secured Parties" shall have the meaning assigned to such
term in the Pledge Agreement.
"Significant Subsidiary" shall have the meaning assigned to
such term in Regulation S-X of the Securities and Exchange Commission as
in effect on the date hereof: provided, that (a) any Subsidiary that directly or
indirectly owns a Significant Subsidiary shall itself be a Significant
Subsidiary and (b) in the event Subsidiaries that would otherwise not be
Significant Subsidiaries shall in the aggregate account for a percentage in
excess of 20% of Consolidated Total Assets, then one or more of such
Subsidiaries designated by the Borrower (or, if the Borrower shall make no
designation, one or more of such Subsidiaries in descending order based on
their respective contributions to Consolidated Total Assets), shall be included
as Significant Subsidiaries to the extent necessary to eliminate such excess.
"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 reserve
percentages (including any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by the Board and any other
banking authority to which the Agent is subject for new negotiable
nonpersonal time deposits in Dollars of over $100,000 with maturities
approximately equal to three months in the case of the Base CD Rate (as
such term is used in the definition of "Alternate Base Rate"). 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 (the
"parent"), any corporation, company, association, partnership or other
business entity of which securities or other ownership interests representing
50% or more of the ordinary voting power are, at the time as of which any
determination is being made, beneficially owned or controlled by the parent,
by one or more subsidiaries of the parent or by the parent and one or more
subsidiaries of the parent.
"Subsidiary" shall mean any subsidiary of the Borrower.
"Swingline Exposure" shall mean, with respect to the
Swingline Lender at any time, the aggregate principal amount at such time of
all outstanding Swingline Loans of such Swingline Lender.
"Swingline Loan" shall mean the swingline loans made by
the Swingline Lender pursuant to Section 2.21.
"Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority, other than Excluded Taxes.
"Total Indebtedness" shall mean, at any time, all
Indebtedness of the Borrower and the Subsidiaries at such time (other than
Indebtedness described under clauses (h), (i) and (j) of the definition of
"Indebtedness"), determined on a consolidated basis in accordance with
GAAP.
"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. For purposes hereof, "Rate"
shall include the LIBO Rate, the Alternate Base Rate and the Federal Funds
Effective Rate.
"Withdrawal Liability" shall mean liability to a
Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan, as such terms are defined in Part I of Subtitle E of
Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions in
Section 1.01 shall apply equally to both the singular and plural forms of the
terms defined. 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". All references herein to Articles, Sections,
Exhibits and Schedules shall be deemed references to Articles and Sections
of, and Exhibits and Schedules to, this Agreement unless the context shall
otherwise require. Except as otherwise expressly provided herein, (a) any
reference in this Agreement to any Loan Document shall mean such
document as amended, restated, supplemented or otherwise modified from
time to time and (b) all terms of an accounting or financial nature shall be
construed in accordance with GAAP as in effect from time to time; provided,
however, that if after the effectiveness of any change in GAAP occurring
after the date of this Agreement the Borrower notifies the Administrative
Agent that the Borrower wishes to amend any covenant in Article VI or any
related definition to eliminate the effect of such change on the operation of
such covenant (or if the Administrative Agent notifies the Borrower that the
Required Lenders wish to amend Article VI or any related definition for such
purpose), then (i) the Borrower and the Administrative Agent shall negotiate
in good faith to agree upon an appropriate amendment to such covenant and
(ii) until such covenant is amended in a manner satisfactory to the Borrower
and the Required Lenders, the Borrower's compliance with such covenant
shall be determined on the basis of GAAP as in effect immediately before the
relevant change in GAAP became effective.
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and
conditions and relying upon the representations and warranties herein set
forth, each Lender agrees, severally and not jointly, to make Revolving Loans
to the Borrower, at any time and from time to time on or after the Effective
Date and until the earlier of the Maturity Date and the termination of the
Commitment of such Lender in accordance with the terms hereof, in an
aggregate principal amount at any time outstanding that will not result in
(x) such Lender's Revolving Loan Exposure exceeding such Lender's
Commitment or (y) the outstanding aggregate principal amount of the sum of
Swingline Loans and Revolving Loans exceeding the aggregate amount of the
Commitments. Within the limits set forth in the preceding sentence, the
Borrower may borrow, pay or prepay and reborrow Loans on and after the
Effective Date and prior to the Maturity Date, in each case subject to the
terms, conditions and limitations set forth herein.
SECTION 2.02. Revolving Loans. (a) Each Revolving
Loan shall be made as part of a Borrowing consisting of Loans made by the
Lenders ratably in accordance with their Commitments; provided, however,
that the failure of any Lender to make any Revolving Loan shall not in itself
relieve any other Lender of its obligation to lend hereunder (it being
understood, however, that no Lender shall be responsible for the failure of
any other Lender to make any Loan required to be made by such other
Lender). The Revolving Loans comprising any Borrowing shall be in an
aggregate principal amount which is (i) an integral multiple of $1,000,000
and not less than $2,000,000 or (ii) equal to the remaining available balance
of the Commitments.
(b) Subject to Sections 2.08 and 2.14, each Borrowing other
than a Swingline Borrowing shall be comprised entirely of ABR Loans or
Eurodollar Loans as the Borrower may request pursuant to Section 2.03 or
2.10. Each Lender may at its option make any Eurodollar Loan by causing
any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement. Borrowings of more than one Type may be outstanding at the
same time; provided, however, that the Borrower shall not be entitled to
request any Borrowing which, if made, would result in more than 10
Eurodollar Borrowings outstanding hereunder at any time. For purposes of
the foregoing, Borrowings having different Interest Periods, regardless of
whether they commence on the same date, shall be considered separate
Borrowings.
(c) Each Lender shall make each Revolving Loan to be
made by it hereunder on the proposed date thereof by wire transfer to such
account as the Administrative Agent may designate in federal funds not later
than 1:00 p.m., New York City time, and the Administrative Agent shall by
3:00 p.m., New York City time, credit the amounts so received to a domestic
account designated by the Chief Financial Officer of the Borrower by notice
to the Administrative Agent, which account must be in the name of the
Borrower or, if a Borrowing shall not occur on such date because any
condition precedent herein specified shall not have been met, return the
amounts so received to the respective Lenders.
(d) Unless the Administrative Agent shall have received
notice from a Lender prior to the date of any Borrowing that such Lender
will not make available to the Administrative Agent such Lender's portion of
such Borrowing, the Administrative Agent may assume that such Lender has
made such portion available to the Administrative Agent on the date of such
Borrowing in accordance with paragraph (c) above and the Administrative
Agent may, in reliance upon such assumption, make available to the
Borrower on such date a corresponding amount. If the Administrative Agent
shall have so made funds available then, to the extent that such Lender shall
not have made such portion available to the Administrative Agent, such
Lender and the Borrower severally agree to repay to the Administrative Agent
forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Administrative Agent at
(i) in the case of the Borrower, the interest rate applicable at the time to the
Loans comprising such Borrowing and (ii) in the case of such Lender, a rate
determined by the Administrative Agent to represent its cost of overnight or
short-term funds (which determination shall be conclusive absent manifest
error). If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount shall constitute such Lender's Loan as
part of such Borrowing for purposes of this Agreement.
SECTION 2.03. Borrowing Procedure. In order to request
a Borrowing (other than a Swingline Borrowing), the Borrower, acting
through a Financial Officer, shall submit a Borrowing Request by hand
delivery or telecopy or by telephone to the Administrative Agent (a) in the
case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before a proposed Borrowing and (b) in the case of
an ABR Borrowing, not later than 11:00 a.m., New York City time, on the
day of a proposed Borrowing. Each Borrowing Request shall be irrevocable
and shall specify the following information: (i) whether such Borrowing is to
be a Eurodollar Borrowing or an ABR Borrowing; (ii) the date of such
Borrowing (which shall be a Business Day), (iii) the number and location of
the account to which funds are to be disbursed (which shall be an account
that complies with the requirements of Section 2.02(c)); (iv) the amount of
such Borrowing; and (v) if such Borrowing is to be a Eurodollar Borrowing,
the Interest Period with respect thereto; provided, however, that,
notwithstanding any contrary specification in any Borrowing Request, each
requested Borrowing shall comply with the requirements set forth in
Section 2.02. If no election as to the Type of Borrowing is specified in any
such notice, then the requested Borrowing shall be an ABR Borrowing. If no
Interest Period with respect to any Eurodollar Borrowing is specified in any
such notice, then the Borrower shall be deemed to have selected an Interest
Period of one month's duration. The Administrative Agent shall promptly
advise the applicable Lenders of any notice given pursuant to this
Section 2.03 and of each Lender's portion of the requested Borrowing.
SECTION 2.04. Repayment of Loans; Evidence of Debt.
(a) The Borrower agrees to pay the outstanding principal balance of each
Loan as provided in Section 2.11.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts with respect to each Loan made by such
Lender from time to time, including the amounts of principal and interest
payable and paid such Lender from time to time under this Agreement.
(c) The Administrative Agent shall maintain accounts in
which it will record (i) the amount of each Loan made hereunder, the Type of
each Loan made and the Interest Period applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due and payable from
the Borrower to each Lender hereunder and (iii) the amount of any sum
received by the Administrative Agent hereunder from the Borrower and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) and (c) of this Section 2.04 shall be prima facie evidence of the
existence and amounts of the obligations therein recorded; provided, however,
that the failure of any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligations of
the Borrower to repay the Loans in accordance with their terms.
(e) Notwithstanding any other provision of this Agreement,
in the event any Lender shall request a note evidencing the Loans made by it
hereunder to the Borrower, the Borrower shall deliver such a note reasonably
satisfactory to the Administrative Agent, payable to such Lender and its
registered assigns, and the interests represented by that note shall at all
times (including after any assignment of all or part of such interests pursuant
to Section 10.06) be represented by one or more notes payable to the payee
named therein or its registered assigns.
SECTION 2.05. Fees. (a) The Borrower agrees to pay to
each Lender, through the Administrative Agent, on the first day of January,
April, July and October in each year, and on the date on which the
Commitment of such Lender shall be terminated as provided herein, a
commitment fee (a "Commitment Fee") at a per annum rate equal to the
Applicable Commitment Fee Percentage from time to time in effect on the
average daily unused amount of the Commitment of such Lender during the
preceding quarter (or shorter period commencing with the date hereof or
ending with the date on which the Commitment of such Lender shall have
been terminated). The Commitment Fee shall be computed on the basis of
the actual number of days elapsed in a year of 360 days. The Commitment
Fee due to each Lender shall commence to accrue on the date hereof and
shall cease to accrue on the date on which the Commitment of such Lender
shall be terminated as provided herein.
(b) The Borrower agrees to pay to the Administrative
Agent, for its own account, the fees set forth in the Fee Letter in the amounts
and at the times specified therein (the "Administrative Agent Fees").
(c) All Fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, if and as
appropriate, among the Lenders. Once paid, none of the Fees shall be
refundable under any circumstances (other than to correct errors in
computation or payment).
SECTION 2.06. Interest on Loans. (a) Subject to the
provisions of Section 2.07, the Loans comprising each ABR Borrowing shall
bear interest (computed on the basis of the actual number of days elapsed
over a year of 365 or 366 days, as the case may be, when determined by
reference to the Prime Rate and over a year of 360 days at all other times) at
a rate per annum equal to the Alternative Base Rate. Interest on each ABR
Borrowing shall be payable on each applicable Interest Payment Date except
as otherwise provided in this Agreement. The Alternate Base Rate shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
(b) Subject to the provisions of Section 2.07, the Loans
comprising each Eurodollar Borrowing shall bear interest (computed on the
basis of the actual number of days elapsed over a year of 360 days) at a rate
per annum equal to the LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Margin in effect from time to time. Interest
on each Eurodollar Borrowing shall be payable on each applicable Interest
Payment Date except as otherwise provided in this Agreement. The LIBO
Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
(c) Subject to the provisions of Section 2.07, each
Swingline Loan shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to
the Federal Funds Effective Rate plus the Applicable Margin in effect from
time to time. Interest on each Swingline Loan shall be payable on the first
Business Day of each calendar month and on the Maturity Date.
SECTION 2.07. Default Interest. If the Borrower shall
default in the payment of the principal of or interest on any Loan or any
other amounts becoming due hereunder, whether by scheduled maturity,
notice of prepayment, acceleration or otherwise, the Borrower shall on
demand from time to time from the Administrative Agent pay interest from
and including the date of such default, to the extent permitted by law, on
such defaulted amount up to (but not including) the date of actual payment
(after as well as before judgment) (a) in the case of overdue principal of any
Loan, at the rate otherwise applicable to such Loan hereunder plus 2.00% per
annum and (b) in all other cases, at a rate per annum (computed on the basis
of the actual number of days elapsed over a year of 365 or 366 days, as the
case may be, when determined by reference to the Prime Rate and over a
year of 360 days at all other times) equal to the Alternate Base Rate plus
2.00%.
SECTION 2.08. Alternate Rate of Interest. In the event,
and on each occasion, that on the day two Business Days prior to the
commencement of any Interest Period for a Eurodollar Borrowing the
Administrative Agent shall have determined that dollar deposits in the
principal amounts of the Loans comprising such Borrowing are not generally
available in the London interbank market, or that the rates at which such
dollar deposits are being offered will not adequately and fairly reflect the
cost to any Lender of making or maintaining its Eurodollar Loan during such
Interest Period, or that reasonable means do not exist for ascertaining the
LIBO Rate, the Administrative Agent shall, as soon as practicable thereafter,
give written or telecopy notice of such determination to the Borrower and the
Lenders. In the event of any such determination, any request by the
Borrower for a Eurodollar Borrowing pursuant to Section 2.03 or 2.10 shall,
until the Administrative Agent shall have advised the Borrower and the
Lenders that the circumstances giving rise to such notice no longer exist, be
deemed to be a request for an ABR Borrowing. Each determination by the
Administrative Agent hereunder shall be conclusive absent manifest error.
SECTION 2.09. Termination and Reduction of
Commitments. (a) The Commitments shall be automatically terminated at
5:00 p.m., New York City time, on the Maturity Date, if not terminated
earlier pursuant to the terms hereof.
(b) Upon at least three Business Days' prior irrevocable
written, telecopy or telephonic notice given by a Financial Officer to the
Administrative Agent, the Borrower may at any time in whole permanently
terminate, or from time to time in part permanently reduce, the Commitments;
provided, however, that (i) each partial reduction of the Commitments shall
be in an amount which is an integral multiple of $1,000,000 and which is not
less than $5,000,000 (or, if less, the remaining amount of the Commitments)
and (ii) no such termination or reduction shall be made which would reduce
the Commitments to an amount less than the aggregate outstanding amount of
the Revolving Loans and Swingline Loans.
(c) Each reduction in the Commitments hereunder shall be
made ratably among the Lenders in accordance with their respective
applicable Commitments. The Borrower shall pay to the Administrative
Agent for the account of the Lenders, on the date of each termination or
reduction, the Commitment Fees on the amount of the Commitments so
terminated or reduced accrued to the date of such termination or reduction.
SECTION 2.10. Conversion and Continuation of Revolving
Borrowings. The Borrower shall, to the extent that no Event of Default has
occurred and is continuing, have the right at any time upon prior irrevocable
written, telecopy or telephonic notice given by a Financial Officer to the
Administrative Agent (i) not later than 12:00 (noon), New York City time,
one Business Day prior to conversion or continuation, to convert any
Eurodollar Borrowing into an ABR Borrowing or to continue on the last day
of the current Interest Period applicable thereto, any ABR Borrowing for an
additional Interest Period, (ii) not later than 11:00 a.m., New York City time,
three Business Days prior to conversion or continuation, to convert any ABR
Borrowing into a Eurodollar Borrowing or to continue any Eurodollar
Borrowing as a Eurodollar Borrowing for an additional Interest Period and
(iii) not later than 11:00 a.m., New York City time, three Business Days prior
to conversion, to convert the Interest Period with respect to any Eurodollar
Borrowing to another permissible Interest Period, subject in each case to the
following:
(a) each conversion or continuation shall be made pro rata
among the Lenders in accordance with the respective principal
amounts of the Loans comprising the converted or continued
Eurodollar or ABR Borrowing;
(b) if less than all the outstanding principal amount of any
Eurodollar or ABR Borrowing shall be converted or continued, then
each resulting Eurodollar or ABR Borrowing shall satisfy the
limitations specified in Sections 2.02(a) and (b) regarding the
principal amount and maximum number of Borrowings of the
relevant Type;
(c) each conversion or continuation shall be effected by each
Lender by recording for the account of such Lender the new Loan of
such Lender resulting from such conversion or continuation and
reducing the Loan (or portion thereof) of such Lender being
converted or continued by an equivalent principal amount; accrued
interest on a Loan (or portion thereof) being converted or continued
shall be paid by the Borrower at the time of conversion or
continuation;
(d) if any Eurodollar Borrowing is converted or continued at
a time other than the end of the Interest Period applicable thereto,
the Borrower shall pay, upon demand, any amounts due to the
Lenders pursuant to Section 2.15;
(e) 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 Borrowing;
(f) any portion of a Eurodollar Borrowing which cannot be
converted into or continued as a Eurodollar Borrowing by reason of
clause (e) above shall be automatically converted at the end of the
Interest Period in effect for such Borrowing into an ABR Borrowing;
and
(g) no Interest Period may be selected for any Eurodollar
Borrowing that would end later than the Maturity Date.
Each notice pursuant to this Section 2.10 shall be
irrevocable and shall refer to this Agreement and specify (i) the identity and
amount of the Borrowing that the Borrower requests be converted or
continued, (ii) whether such Borrowing is to be converted to or continued as
a Eurodollar Borrowing or an ABR Borrowing, (iii) if such notice requests a
conversion, the date of such conversion (which shall be a Business Day) and
(iv) if such Borrowing is to be converted to or continued as a Eurodollar
Borrowing, the Interest Period with respect thereto. If no Interest Period is
specified in any such notice with respect to any conversion to or continuation
as a Eurodollar Borrowing, the Borrower shall be deemed to have selected an
Interest Period of one month's duration. The Administrative Agent shall
advise the other Lenders of any notice given pursuant to this Section 2.10 and
of each Lender's portion of any converted or continued Borrowing. If the
Borrower shall not have given notice in accordance with this Section 2.10 to
continue any Borrowing into a subsequent Interest Period (and shall not
otherwise have given notice in accordance with this Section 2.10 to convert
such Borrowing), such Borrowing shall, at the end of the Interest Period
applicable thereto (unless repaid pursuant to the terms hereof), automatically
be continued into a new Interest Period as an ABR Borrowing. Swingline
Loans may not be converted or continued hereunder.
SECTION 2.11. Repayment of Revolving Borrowings and
Swingline Loans. (a) All Revolving Borrowings shall be due and payable on
the Maturity Date.
(b) To the extent not previously paid, all Revolving
Borrowings shall be due and payable on the Maturity Date. Each payment of
Revolving Borrowings pursuant to this Section 2.11 shall be subject to
Section 2.15, but shall otherwise be without premium or penalty.
(c) All Swingline Loans shall be due and payable on
demand, and shall in any event become due on the Maturity Date.
(d) Each payment pursuant to this Section 2.11 shall be
accompanied by accrued interest on the principal amount paid to but exclud-
ing the date of payment.
SECTION 2.12. Prepayment. (a) The Borrower shall have
the right at any time and from time to time to prepay any Revolving
Borrowing, in whole or in part, upon at least three Business Days' prior
written, telecopy or telephonic notice given by a Financial Officer to the
Administrative Agent before 11:00 a.m., New York City time; provided,
however, that each partial prepayment of a Borrowing shall be in an amount
which is an integral multiple of $1,000,000 and which is not less than
$2,000,000 (or, if less, the remaining amount outstanding of Revolving Loans
or Swingline Loans, as applicable).
(b) In the event of the termination by the Borrower of all
the Commitments prior to the Maturity Date, the Borrower shall repay or
prepay all outstanding Revolving Borrowings and Swingline Loans on the
date of such termination. If, after giving effect to any partial reduction of
the Commitments prior to the Maturity Date, the Aggregate Revolving Loan
Exposure plus the Swingline Exposure would exceed the aggregate amount of
the Commitments, the Borrower shall, on the date of such reduction, repay or
prepay Revolving Borrowings or Swingline Loans in an amount sufficient to
eliminate such excess.
(c) Each notice of prepayment shall specify the prepayment
date and the principal amount of each Revolving Borrowing (or portion
thereof) to be prepaid, shall be irrevocable and shall commit the Borrower to
prepay such Borrowing by the amount stated therein on the date stated
therein. All prepayments under this Section 2.12 shall be subject to
Section 2.15 but otherwise without premium or penalty. All prepayments
under this Section 2.12 shall be accompanied by accrued interest on the
principal amount being prepaid to but excluding the date of payment. Unless
otherwise specified in the applicable notice of prepayment, all prepayments
under this Section 2.12 shall be applied to outstanding ABR Borrowings up
to the full amount thereof and thereafter shall be applied to outstanding
Eurodollar Borrowings.
SECTION 2.13. Reserve Requirements; Change in
Circumstances. (a) Notwithstanding any other provision herein, if after the
date of this Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof (whether or not
having the force of law) shall change the basis of taxation of payments to any
Lender of the principal of or interest on any Eurodollar Loan made by such
Lender or any Fees or other amounts payable hereunder (other than changes
in respect of taxes imposed on the overall net income of such Lender by the
jurisdiction in which such Lender has its principal office or by any political
subdivision or taxing authority therein), or shall impose, modify or deem
applicable any reserve, special deposit or similar requirement against assets
of, deposits with or for the account of or credit extended by such Lender or
shall impose on such Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender,
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan, or to reduce the
amount of any sum received or receivable by such Lender hereunder (whether
of principal, interest or otherwise) by an amount deemed by such Lender in
good faith to be material, then the Borrower will pay to such Lender upon
demand such additional amount or amounts as will compensate such Lender
for such additional costs incurred or reduction suffered.
(b) If any Lender shall have determined in good faith that
the adoption after the date hereof of any law, rule, regulation, agreement or
guideline regarding capital adequacy, or any change in any of the foregoing
or in the interpretation or administration of any of the foregoing by any
Governmental Authority charged with the interpretation or administration
thereof, or compliance by any Lender (or any lending office of such Lender)
or any Lender's holding company with any request or directive regarding
capital adequacy (whether or not having the force of law) made or
promulgated after the date hereof by any such Governmental Authority, has
or would have the effect of reducing the rate of return on such Lender's
capital or on the capital of such Lender's holding company, if any, as a
consequence of its obligations under this Agreement or the Loans made by
such Lender pursuant hereto to a level below that which such Lender or such
Lender's holding company could have achieved but for such adoption, change
or compliance (taking into consideration such Lender's policies and the
policies of such Lender's holding company with respect to capital adequacy)
by an amount deemed by such Lender in good faith to be material, then from
time to time the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such Lender's holding company
for any such reduction suffered. It is acknowledged that this Agreement is
being entered into by the Lenders on the understanding that the Lenders will
not be required to maintain capital against the Commitments under currently
applicable laws, regulations and regulatory guidelines.
(c) If any Lender becomes entitled to claim any additional
amounts pursuant to this Section 2.13, it shall promptly notify the Borrower,
through the Administrative Agent, of the event by reason of which it has
become so entitled; provided that if any Lender fails to give such notice
within 90 days after it obtains such actual knowledge of such an event, such
Lender shall, with respect to additional amounts payable pursuant to this
Section 2.13 in respect of such event, only be entitled to payment under this
Section 2.13 with respect to the period from and after 90 days prior to the
date that such Lender does give such notice. A certificate of a Lender,
delivered through the Administrative Agent, setting forth such amount or
amounts as shall be necessary to compensate such Lender as specified in
paragraph (a) or (b) above, as the case may be, and the method by which
such amount or amounts shall have been determined, shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall
pay each Lender the amount shown as due on any such certificate delivered
by it within 30 days after the receipt of the same.
(d) The protection of this Section shall be available to each
Lender regardless of any possible contention of the invalidity or
inapplicability of the law, rule, regulation, guideline or other change or
condition which shall have occurred or been imposed.
SECTION 2.14. Change in Legality. (a) Notwithstanding
any other provision herein, if, after the date hereof, any change in any law or
regulation or in the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof or any judgment,
order or directive of any competent court, tribunal or authority shall make it
unlawful for any Lender to make or maintain any Eurodollar Loan or to give
effect to its obligations as contemplated hereby with respect to any Eurodollar
Loan, then, by written notice to the Borrower and to the Administrative
Agent:
(i) such Lender may declare that Eurodollar Loans will not
thereafter be made by such Lender hereunder, whereupon any request
for a Eurodollar Borrowing shall, as to such Lender only, be deemed
a request for an ABR Loan unless such declaration shall be
subsequently withdrawn; and
(ii) such Lender may require that all outstanding Eurodollar
Loans made by it be converted to ABR Loans, in which event all
such Eurodollar Loans shall be automatically converted to ABR
Loans as of the effective date of such notice as provided in
paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal which would otherwise have been
applied to repay the Eurodollar Loans that would have been made by such
Lender or the converted Eurodollar Loans of such Lender shall instead be
applied to repay the ABR Loans made by such Lender in lieu of, or resulting
from the conversion of, such Eurodollar Loans.
(b) For purposes of this Section 2.14, a notice to the
Borrower by any Lender shall be effective as to each Eurodollar Loan, if
lawful, on the last day of the Interest Period currently applicable to such
Eurodollar Loan; in all other cases such notice shall be effective on the date
of receipt by the Borrower.
SECTION 2.15. Indemnity. The Borrower shall indemnify
each Lender against any loss or expense which such Lender may sustain or
incur (and which such Lender shall in good faith deem material) as a
consequence of (a) any event, other than a default by such Lender in the
performance of its obligations hereunder, which results in (i) such Lender
receiving or being deemed to receive any amount on account of the principal
of any Eurodollar Loan prior to the end of the Interest Period in effect
therefor, (ii) the conversion of any Eurodollar Loan to an ABR Loan, or the
conversion of the Interest Period with respect to any Eurodollar Loan, other
than on the last day of the Interest Period in effect therefor, or (iii) any
Eurodollar Loan to be made by such Lender (including any Eurodollar Loan
to be made pursuant to a conversion or continuation under Section 2.10) not
being made after notice of such Loan shall have been given by the Borrower
hereunder (any of the events referred to in this clause (a) being called a
"Breakage Event") or (b) any default in the making of any payment or
prepayment required to be made hereunder with respect to any Eurodollar
Loan. In the case of any Breakage Event, such loss shall include an amount
equal to the excess, as reasonably determined by such Lender, of (i) its cost
of obtaining funds for the Eurodollar Loan that is the subject of such
Breakage Event for the period from the date of such Breakage Event to the
last day of the Interest Period in effect (or that would have been in effect)
for such Loan over (ii) the amount of interest determined by such Lender to be
likely to be realized by it in redeploying the funds released or not utilized by
reason of such Breakage Event for such period. A certificate of any Lender
setting forth any amount or amounts which such Lender is entitled to receive
pursuant to this Section 2.15 shall be delivered to the Borrower and shall be
conclusive absent manifest error.
SECTION 2.16. Pro Rata Treatment. Except as required
under Section 2.14 or 2.20(b), each Borrowing (other than a Swingline
Borrowing), each payment or prepayment of principal of any Borrowing
(other than a Swingline Borrowing), each payment of interest on the
Revolving Loans, each payment of the Commitment Fee and each reduction
of the Commitments shall be allocated pro rata among the Lenders in
accordance with their respective applicable Commitments (or, if such
Commitments shall have expired or been terminated, in accordance with the
respective principal amounts of their outstanding Revolving Loans). Each
Lender agrees that in computing such Lender's portion of any Borrowing to
be made hereunder, the Administrative Agent may, in its discretion, round
each Lender's percentage of such Borrowing to the next higher or lower
whole dollar amount.
SECTION 2.17. Sharing of Setoffs. Each Lender agrees
that if it shall, through the exercise of a right of banker's lien, setoff or
counterclaim against the Borrower, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, obtain payment (voluntary or involuntary) in respect of any
Revolving Loan or Loans as a result of which the unpaid principal portion of
its Revolving Loans shall be proportionately less than the unpaid principal
portion of the Revolving Loans of any other Lender, it shall be deemed
simultaneously to have purchased from such other Lender at face value, and
shall promptly pay to such other Lender the purchase price for, a participation
in the Revolving Loans of such other Lender, so that the aggregate unpaid
principal amount of the Revolving Loans and participations in Revolving
Loans held by each Lender shall be in the same proportion to the aggregate
unpaid principal amount of all Revolving Loans then outstanding as the
principal amount of its Revolving Loans prior to such exercise of banker's
lien, setoff or counterclaim or other event was to the principal amount of all
Loans outstanding prior to such exercise of banker's lien, setoff or counter-
claim or other event; provided, however, that, if any such purchase or
purchases or adjustments shall be made pursuant to this Section 2.17 and the
payment giving rise thereto shall thereafter be recovered, such purchase or
purchases or adjustments shall be rescinded to the extent of such recovery
and the purchase price or prices or adjustment restored without interest. The
Borrower expressly consents to the foregoing arrangements and agrees that
any Lender holding a participation in a Revolving Loan deemed to have been
so purchased may exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing by the Borrower to
such Lender by reason thereof as fully as if such Lender had made a
Revolving Loan directly to the Borrower in the amount of such participation.
SECTION 2.18. Payments. (a) With the exception of
Swingline Loans, payments in respect of which shall be made directly to the
Swingline Lender not later than 3:00 p.m. (New York City time) on the date
when due, the Borrower shall make each payment (including principal of or
interest on any Borrowing or any Fees or other amounts) hereunder and under
any other Loan Document not later than 11:00 a.m., local time at the place of
payment, on the date when due in immediately available funds; provided, that
any such payment may be made not later than 3:00 p.m. if the Borrower shall
have given irrevocable notice to the Administrative Agent not later than
11:00 a.m. that such payment will be made on such date. Each such payment
shall be made to the Administrative Agent at its offices at 270 Park Avenue,
New York, New York. Each such payment not received by the time due
shall be deemed received on the next Business Day. Each such payment
shall be made in dollars.
(b) Whenever any payment (including principal of or
interest on any Borrowing or any Fees or other amounts) hereunder or under
any other Loan Document shall become due, or otherwise would occur, on a
day that is not a Business Day, such payment may be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of interest or Fees, if applicable.
SECTION 2.19. Taxes. (a) Any and all payments by or an
account of any obligation of the Borrower hereunder shall be made free and
clear of and without deduction for any Taxes or Other Taxes; provided that if
the Borrower shall be required to deduct any Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent or
Lender (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall
make such deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent
and each Lender within 10 days after written demand therefor, for the full
amount of any Taxes or Other Taxes (including Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
paid by the Administrative Agent or such Lender, as the case may be, and
any liability (including penalties, interest and reasonable expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability
delivered to the Borrower by a Lender, or by the Administrative Agent on its
own behalf or on behalf of a Lender, shall be conclusive absent manifest
error.
(d) As soon as practicable after any payment of Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a
copy of the tax return reporting such payment or other evidence of such
payment reasonably satisfactory to the Administrative Agent.
(e) If any Lender shall become eligible for a refund in
respect of any Taxes or Other Taxes in respect of which the Borrower shall
have made a payment to such Lender under this Section 2.19, then, upon the
request of the Borrower, and at the Borrower's expense, such Lender shall
apply for such refund and, upon receipt thereof, will return to the Borrower
the amount so paid by it to the extent of such refund.
(f) Any Foreign Lender that is entitled to an exemption
from or reduction of withholding tax under the law of the jurisdiction in
which the Borrower is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, properly completed and executed forms
prescribed by applicable law (together with such other documentation or
certification as the Borrower may reasonably request) that will permit the
Borrower to make such payments without withholding or at a reduced rate.
SECTION 2.20. Duty to Mitigate; Assignment of
Commitments Under Certain Circumstances. (a) Any Lender claiming any
additional amounts payable pursuant to Section 2.13 or Section 2.19 shall use
reasonable efforts (consistent with legal and regulatory restrictions) to file
any certificate or document requested by the Borrower or to change the
jurisdiction of its applicable lending office if the making of such a filing or
change would avoid the need for or reduce the amount of any such additional
amounts which may thereafter accrue or avoid the circumstances giving rise
to such exercise and would not, in the sole determination of such Lender, be
otherwise disadvantageous to such Lender.
(b) In the event that any Lender shall have delivered a
notice or certificate pursuant to Section 2.13 or 2.14, or the Borrower shall be
required to make additional payments to any Lender under Section 2.19, the
Borrower shall have the right, at its own expense, upon notice to such Lender
and the Administrative Agent, to require such Lender to transfer and assign
without recourse (in accordance with and subject to the restrictions and
payments provided for in Section 10.06) all interests, rights and obligations
contained hereunder to another financial institution approved by the
Administrative Agent (which approval shall not be unreasonably withheld)
which shall assume such obligations; provided that (i) no such assignment
shall conflict with any law, rule or regulation or order of any Governmental
Authority and (ii) the assignee or the Borrower, as the case may be, shall pay
to the affected Lender in immediately available funds on the date of such
assignment the principal of and interest accrued to the date of payment on the
Loans made by it hereunder and all other amounts accrued for its account or
owed to it hereunder (including the additional amounts asserted and payable
pursuant to Section 2.13, 2.14 or 2.19, if any).
SECTION 2.21. Swingline Loans. (a) On the terms and
subject to the conditions and relying upon the representations and warranties
herein set forth, the Swingline Lender agrees, at any time and from time to
time from and including the Effective Date to but excluding the earlier of
(x) the Maturity Date and (y) the termination of the Commitments in
accordance with the terms hereof, to make Swingline Loans to the Borrower
in an aggregate principal amount at any time outstanding not to exceed the
lesser of (i) of $10,000,000 minus the aggregate amount of the swingline
loans outstanding under the Facility A Credit Agreement at such time and
(ii) the excess of the aggregate amount of the Commitments over the
Aggregate Revolving Loan Exposure at such time. Each Swingline Loan
shall be in a principal amount that is an integral multiple of $500,000 and in
a minimum principal amount of $500,000. Within the limits set forth in the
first sentence of this paragraph, the Borrower may borrow, pay or prepay and
reborrow Swingline Loans on or after the Effective Date and prior to the
Maturity Date on the terms and subject to the conditions and limitations set
forth herein.
(b) In order to request a Swingline Loan, the Borrower,
acting through a Financial Officer, shall notify the Administrative Agent of
such request by telephone, not later than 12:00 noon, New York City time, on
the day of a proposed Swingline Loan. Each such notice shall be irrevocable
and shall specify the requested date (which shall be a Business Day) and
amount of the requested Swingline Loan. The Administrative Agent will
promptly advise the Swingline Lender of any such notice received from the
Borrower. The Swingline Lender shall make each Swingline Loan available
to the Borrower by means of a credit or wire transfer to domestic account of
the Borrower designated by the Chief Financial Officer of the Borrower by
notice to the Administrative Agent by 3:00 p.m., New York City time, on the
requested date of such Swingline Loan.
(c) The Swingline Lender may by written notice given to
the Administrative Agent not later than 10:00 a.m., New York City time, on
any Business Day require the Lenders to acquire participations on such
Business Day in all or a portion of the Swingline Loans outstanding. Such
notice shall specify the aggregate amount of Swingline Loans in which
Lenders will participate. Promptly upon receipt of such notice, the
Administrative Agent will give notice thereof to each Lender, specifying in
such notice such Lender's Applicable Percentage of such Swingline Loan or
Loans. In furtherance of the foregoing, each Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above, to pay to
the Administrative Agent, for the account of the Swingline Lender, such
Lender's Applicable Percentage of such Swingline Loan or Loans. Each
Lender acknowledges and agrees that its obligation to acquire participations
in Swingline Loans pursuant to this paragraph is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including the
occurrence and continuance of a Default or reduction or termination of the
Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever. Each Lender shall comply
with its obligation under this paragraph by wire transfer of immediately
available funds, in the same manner as provided in Section 2.02 with respect
to Loans made by such Lender (and Section 2.02 shall apply, mutatis
mutandis, to the payment obligations of the Lenders), and the Administrative
Agent shall promptly pay to the Swingline Lender the amounts so received by
it from the Lenders. The Administrative Agent shall notify the Borrower of
any participations in any Swingline Loan acquired pursuant to this paragraph
and thereafter payments in respect of such Swingline Loan shall be made to
the Administrative Agent and not to the Swingline Lender. Any amounts
received by the Swingline Lender from the Borrower (or other party on behalf
of the Borrower) in respect of a Swingline Loan after receipt by the
Swingline Lender of the proceeds of a sale of participations therein shall be
promptly remitted to the Administrative Agent; any such amounts received by
the Administrative Agent shall be promptly remitted by the Administrative
Agent to the Lenders that shall have made their payments pursuant to this
paragraph and to the Swingline Lender, as their interests may appear. The
purchase of participations in a Swingline Loan pursuant to this paragraph
shall not relieve the Borrower of any default in the payment thereof.
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to each of the
Lenders that:
SECTION 3.01. Organization; Powers. The Borrower and
each Subsidiary (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has all requisite
power and authority to own its property and assets and to carry on its
business as now conducted and as proposed to be conducted, (c) is qualified
to do business in every jurisdiction where such qualification is required,
except where the failure so to qualify would not result in a Material Adverse
Effect and (d) has the power and authority to execute, deliver and perform its
obligations under each of the Loan Documents and each other agreement or
instrument contemplated hereby or thereby to which it is or will be a party
and, in the case of the Borrower, to borrow hereunder. The Borrower and
each Subsidiary possesses all licenses, permits, franchises, patents,
copyrights, trademarks, trade names, consents and approvals required to own its
property and assets and to carry on its business as now conducted, except where
the failure to obtain any of the foregoing could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.02. Authorization. The execution, delivery
and performance of each Loan Document, the borrowings hereunder, the
creation of the Liens provided for in the Pledge Agreement and the other
transactions contemplated hereby (collectively, the "Transactions") (a) have
been duly authorized by all requisite corporate, partnership and, if required,
stockholder or partner action and (b) will not (i) violate (A) any provision of
law, statute, rule or regulation, or the constitutive documents or by-laws of
the Borrower or any Subsidiary, (B) any order of any Governmental
Authority or (C) any provision of any indenture, agreement or other
instrument to which the Borrower or any Subsidiary is a party or by which
any of them or any of their property is or may be bound, (ii) be in conflict
with, result in a breach of or constitute (alone or with notice or lapse of time
or both) a default under any such indenture, agreement or other instrument or
(iii) result in the creation or imposition of any Lien upon or with respect to
any property or assets now owned or hereafter acquired by the Borrower or
any Subsidiary, except for any such violations, conflicts, breaches, defaults or
Liens which, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.03. Enforceability. This Agreement has been
duly executed and delivered by the Borrower and each Guarantor and consti-
tutes, and each other Loan Document when executed and delivered by the
Borrower and each Guarantor will constitute, a legal, valid and binding
obligation of the Borrower and each Guarantor, as the case may be, enforce-
able against the Borrower and each Guarantor, as the case may be, in
accordance with its terms.
SECTION 3.04. Governmental Approvals. No action,
consent or approval of, registration or filing with or other action by any
Governmental Authority is or will be required in connection with the
Transactions, other than any which have been made or obtained and are in
full force and effect.
SECTION 3.05. Financial Condition. The consolidated
balance sheet of the Borrower as at December 31, 1995, and the related
statements of income and retained earnings and changes in financial condition
for the fiscal year ended on such date, reported on by Arthur Andersen, LLP
are complete and correct in all material respects and present fairly the
financial condition of the Borrower and its consolidated Subsidiaries as at
such date and the results of the operations and changes in financial condition
of the Borrower and its consolidated Subsidiaries for the fiscal year then
ended. The unaudited consolidated balance sheet of the Borrower and its
consolidated subsidiaries as at March 31, 1996 and the related unaudited
statements of income and retained earnings and changes in financial condition
for the three-month period ended on such date are complete and correct in all
material respects and present fairly the financial condition of the Borrower
and its consolidated Subsidiaries as at such date and the results of their
operations and changes in financial condition for the three-month period then
ended (subject to normal year-end audit adjustments). All such financial
statements, including the related notes thereto, have been prepared in
accordance with GAAP applied consistently throughout all relevant periods.
SECTION 3.06. No Material Adverse Change. There has
been no material adverse change in the business, assets, operations, prospects
or condition, financial or otherwise, of the Borrower and the Subsidiaries,
taken as a whole, since December 31, 1995.
SECTION 3.07. Title to Properties; Possession Under
Leases. (a) The Borrower and each Subsidiary has good title to, or valid
leasehold interests in, all its material properties and assets, except for such
assets and properties as are no longer being used or useful in the conduct of
its businesses or have been disposed of in the ordinary course of business and
except for defects in title and exceptions to leasehold interests that either
alone or in the aggregate could not reasonably be expected to result in a
Material Adverse Effect. All such material properties and assets are free and
clear of Liens, other than Liens expressly permitted by Section 6.02.
(b) The Borrower and each of the Subsidiaries has
complied with all material obligations under all material leases to which it is
a party and all such leases are in full force and effect, except where such
noncompliance or failure to be in full force and effect, alone or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. Each of the Borrower and the Subsidiaries enjoys peaceful and
undisturbed possession under all such material leases, except where the lack
thereof, alone or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect.
SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as
of the Effective Date a list of all the Subsidiaries and the percentage
ownership interest of the Borrower in each of them. As of the Effective
Date, all the issued and outstanding shares of capital stock or the partnership
interests, as the case may be, of each of the Subsidiaries have been validly
issued and are fully paid and nonassessable and are owned directly or
indirectly by the Borrower free and clear of all Liens whatsoever, and there
are no options, warrants, calls, conversion or exchange rights, commitments
or agreements of any character obligating any of the Subsidiaries to issue,
deliver or sell additional shares of their respective capital stock of any class
or any securities convertible into or exchangeable for any such capital stock
or any additional partnership interests.
SECTION 3.09. Litigation; Compliance with Laws.
(a) There are no actions, suits or proceedings at law or in equity or by or
before any Governmental Authority now pending or, to the knowledge of the
Borrower, threatened against or affecting the Borrower or any Subsidiary or
any business, property or rights of any such person (i) which involve any
Loan Document or (ii) as to which there is a reasonable possibility of an
adverse determination and which, if adversely determined, could, individually
or in the aggregate, reasonably be expected to result in a Material Adverse
Effect.
(b) Neither the Borrower nor any of the Subsidiaries is in
violation of any law, rule or regulation, or in default with respect to any
judgment, writ, injunction or decree of any Governmental Authority, where
such violation or default could reasonably be expected to result in a Material
Adverse Effect.
SECTION 3.10. Agreements. (a) Neither the Borrower nor
any of the Subsidiaries is a party to any agreement or instrument or subject to
any restriction that has resulted or could reasonably be expected to result in a
Material Adverse Effect.
(b) Neither the Borrower nor any of the Subsidiaries is in
default in any manner under any provision of any indenture or other agree-
ment or instrument evidencing Indebtedness, or any other material agreement
or instrument to which it is a party or by which it or any of its properties or
assets are or may be bound, where such default could reasonably be expected
to result in a Material Adverse Effect.
SECTION 3.11. Federal Reserve Regulations. (a) Neither
the Borrower nor any of the Subsidiaries is engaged, directly or indirectly, in
the business of extending credit for the purpose of purchasing or carrying
Margin Stock.
(b) No part of the proceeds of any Loan will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately for any purpose which entails a violation of, or which is inconsis-
tent with, the provisions of the Regulations of the Board, including
Regulation G, U or X.
(c) Not more than 25% of the assets subject to the
restrictions of Section 6.02 or Section 6.05 will at any time consist of Margin
Stock unless the Borrower shall have so advised the Administrative Agent
and shall have delivered to the Administrative Agent executed statements on
Form U-1 of the Board demonstrating compliance with Regulation U,
Regulation G and Regulation X, or otherwise established to the satisfaction of
the Administrative Agent and its counsel that the Borrowings hereunder will
not entail a violation of Regulation U, Regulation G or Regulation X.
SECTION 3.12. Investment Company Act; Public Utility
Holding Company Act. Neither the Borrower nor any Subsidiary is (a) an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a "holding company" as defined in,
or subject to regulation under the Public Utility Holding Company Act of
1935.
SECTION 3.13. Use of Proceeds. The Borrower will use
the proceeds of the Loans solely for the purposes specified in the preamble to
this Agreement.
SECTION 3.14. Tax Returns. The Borrower and each
Subsidiary has filed or caused to be filed all Federal, state, local and foreign
income and other material tax returns or materials required to have been filed
by it and has paid or caused to be paid all taxes shown to be due and payable
on such returns or on any assessments received by it, other than taxes that are
being contested in good faith by appropriate proceedings and with respect to
which the Borrower or such Subsidiary, to the extent required by GAAP, has
set aside on its books adequate reserves.
SECTION 3.15. Employee Benefit Plans. Each of the
Borrower and its ERISA Affiliates is in compliance in all material respects
with the applicable provisions of ERISA and the Code and the regulations
and published interpretations thereunder. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such
ERISA Events, could reasonably be expected to result in a Material Adverse
Effect. The present value of all benefit liabilities under each Plan (based on
those assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the last annual valuation date applicable
thereto, exceed by more than $6,000,000 the fair market value of the assets of
such Plan, and the present value of all benefit liabilities of all underfunded
Plans (based on those assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the last annual
valuation dates applicable thereto, exceed by more than $6,000,000 the fair
market value of the assets of all such underfunded Plans.
SECTION 3.16. No Material Misstatements. (a) No
information, report, financial statement, exhibit or schedule (other than the
financial projections referred to in paragraph (b) below) furnished by or on
behalf of the Borrower to the Administrative Agent or any Lender in
connection with the negotiation of any Loan Document or included therein or
delivered pursuant thereto (including the Confidential Information
Memorandum (the "Information Memorandum") dated May 1996 relating to
the Borrower) taken together contained or contains any material misstatement
of fact or omitted or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were or
are made, not materially misleading.
(b) All financial projections that are or have been made
available to the Administrative Agent or any Lender by the Borrower,
including those contained in the Information Memorandum, have been or will
be prepared in good faith based upon assumptions believed by management
of the Borrower to be reasonable.
SECTION 3.17. Environmental and Safety Matters. Each
of the Borrower and each Subsidiary has complied in all respects with all
Federal, state, local and other statutes, ordinances, orders, judgments, rulings
and regulations relating to the environment or to employee health and safety
(including those related to the retention and maintenance of all required
environmental, health and safety permits or authorizations) ("Environmental
and Safety Laws") except for violations that either alone or in the aggregate
could not reasonably be expected to result in a Material Adverse Effect.
Neither the Borrower nor any Subsidiary has received notice of any failure so
to comply which alone or together with any other such failure could
reasonably be expected to result in a Material Adverse Effect. Neither the
Borrower nor any Subsidiary manages or handles any hazardous wastes,
hazardous substances, hazardous materials, toxic substances or toxic
pollutants referred to in or regulated by Environmental and Safety Laws in
violation of such laws or of any other applicable law where such violation
could reasonably be expected to result, individually or together with other
violations, in a Material Adverse Effect. To the best knowledge of the
Borrower, neither the Borrower nor any Subsidiary has any liabilities or
contingent liabilities relating to environmental or employee health and safety
matters (including on-site or off-site contamination) which, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.18. Security Documents. The Pledge
Agreement is effective to create in favor of the Administrative Agent, for the
ratable benefit of the Secured Parties, a legal, valid and enforceable security
interest in the Collateral (as defined in the Pledge Agreement) and, when the
certificates representing the Pledged Securities (as defined in the Pledge
Agreement) are delivered to the Administrative Agent, the Pledge Agreement
will constitute a fully perfected first priority Lien on and security interest
in all right, title and interest of the pledgors thereunder in the Collateral,
in each case prior and superior in right to any other person.
ARTICLE IV
Conditions of Lending
The obligations of the Lenders to make Loans hereunder are
subject to the satisfaction on the date of each Borrowing of the following
conditions:
(a) The Administrative Agent shall have received a notice
of such Borrowing as required by Section 2.03 or Section 2.21(b), as
applicable.
(b) The representations and warranties set forth in
Article III hereof shall be true and correct in all material respects on
and as of the date of such Borrowing with the same effect as though
made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date.
(c) At the time of and immediately after such Borrowing no
Event of Default or Default shall have occurred and be continuing.
(d) In the event any proceeds of such Borrowing are to be
used directly or indirectly, whether immediately, incidentally or
ultimately, to purchase or carry Margin Stock or to repay or
refinance Indebtedness originally incurred for such purpose, the
Borrower shall have so notified the Administrative Agent and shall
have delivered to the Administrative Agent executed statements on
Form U-1 of the Board demonstrating compliance with
Regulation U, Regulation G and Regulation X or otherwise
established to the satisfaction of the Administrative Agent and its
counsel that such Borrowing will not entail a violation of Regulation
U, Regulation G or Regulation X.
Each Borrowing shall be deemed to constitute a representation and warranty
by the Borrower on the date of such Borrowing as to the matters specified in
paragraphs (b) and (c) above and to the effect that, unless the condition set
forth in paragraph (d) above shall have been satisfied, no proceeds of such
Borrowing will be used directly or indirectly, whether immediately,
incidentally or ultimately, to purchase or carry Margin Stock or to repay or
refinance Indebtedness originally incurred for such purpose.
ARTICLE V
Affirmative Covenants
The Borrower covenants and agrees with each Lender that
so long as this Agreement shall remain in effect and until the Commitments
have been terminated and the principal of and interest on each Loan, all Fees
and all other expenses or amounts payable under any Loan Document shall
have been paid in full, unless the Required Lenders shall otherwise consent in
writing, the Borrower will, and will cause each of the Subsidiaries to:
SECTION 5.01. Existence; Businesses and Properties.
(a) Do or cause to be done all things necessary to preserve, renew and keep
in full force and effect the legal existence of the Borrower and each
Significant Subsidiary, except as otherwise permitted by Section 6.05.
(b) Do or cause to be done all things necessary to preserve,
renew and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; maintain and operate such business in
substantially the manner in which it is presently operated; and at all times
maintain and preserve all property material to the conduct of such business
and keep such property in good repair, working order and condition and from
time to time make, or cause to be made, all needed and proper repairs,
renewals, additions, improvements and replacements thereto necessary in
order that the business carried on in connection therewith may be properly
conducted at all times.
SECTION 5.02. Insurance. Keep its insurable properties
adequately insured at all times by financially sound and reputable insurers;
maintain such other insurance, to such extent and against such risks,
including fire and other risks insured against by extended coverage, as is
customary with similarly situated companies in the same or similar
businesses, including public liability insurance against claims for personal
injury or death or property damage occurring upon, in, about or in connection
with the use of any properties owned, occupied or controlled by it; and
maintain such other insurance as may be required by law; provided, however,
that nothing in this Section 5.02 shall preclude the Borrower or any
Subsidiary from being self-insured to the extent customary with similarly
situated companies in the same or similar businesses.
SECTION 5.03. Taxes. Pay and discharge promptly when
due all taxes, assessments and governmental charges or levies imposed upon
it or upon its income or profits or in respect of its property, before the same
shall become delinquent or in default, as well as all lawful claims for labor,
materials and supplies or otherwise which, if unpaid, would (with or without
action by any other person) give rise to a Lien upon such properties or any
part thereof; provided, however, that such payment and discharge shall not be
required with respect to any such tax, assessment, charge, levy or claim so
long as the validity or amount thereof shall be contested in good faith by
appropriate proceedings and adequate reserves in respect thereof shall be
maintained in accordance with GAAP.
SECTION 5.04. Financial Statements, Reports, etc. Furnish
to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of the
Borrower, the consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such year and the related
consolidated statements of income and retained earnings and
statements of cash flow of the Borrower and its consolidated
Subsidiaries for such year, all complete and correct in all material
respects and prepared in accordance with GAAP applied consistently
throughout the periods involved, and reported on without a "going
concern" or like qualification or exception, or qualification arising
out of the scope of the audit, by Arthur Andersen LLP or other
independent certified public accountants of nationally recognized
standing;
(b) not later than 60 days after the end of each of the first
three quarterly periods of each fiscal year of the Borrower, the
unaudited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of each such quarter and the
related unaudited consolidated statements of income and retained
earnings and statements of cash flow of the Borrower and its
consolidated Subsidiaries for such quarter and the portion of the
fiscal year through such quarter, certified by a Responsible Officer as
being, in his or her opinion, complete and correct in all material
respects and prepared in accordance with GAAP applied consistently
throughout the periods involved (subject to normal year-end audit
adjustments);
(c) concurrently with the delivery of the financial statements
referred to in clauses (a) and (b) above, a certificate of a Financial
Officer of the Borrower (i) stating that, to the best of such officer's
knowledge, the Borrower during such period has performed each
covenant and condition contained in the Loan Documents and that
such officer has obtained no knowledge of any Default or Event of
Default hereunder, except as specifically indicated and (ii) showing
in detail the calculations supporting such statement in respect of
Sections 6.08, 6.09 and 6.10;
(d) within five days after the same are sent, copies of all
proxy statements and reports which the Borrower sends to its
stockholders, and within five days after the same are filed, copies of
all reports which the Borrower shall file with the Securities and
Exchange Commission or any successor on Form 10-K, Form 10-Q,
Form 8-K or any successor form; and
(e) promptly, such additional financial and other information
as the Administrative Agent or any Lender may from time to time
reasonably request.
SECTION 5.05. Litigation and Other Notices. Promptly
notify the Administrative Agent and each Lender in writing of the following:
(a) any Event of Default or Default, specifying the nature
and extent thereof and the corrective action (if any) proposed to be
taken with respect thereto;
(b) the filing or commencement of, or any written threat or
notice of intention of any person to file or commence, any action,
suit or proceeding, whether at law or in equity or before any
Governmental Authority, where there exists a reasonable likelihood
of an adverse determination and an adverse determination could
reasonably be expected to result in a Material Adverse Effect; and
(c) any other development that has resulted in, or could
reasonably be expected to result in, a Material Adverse Effect.
SECTION 5.06. Employee Benefits. (a) Comply in all
material respects with the applicable provisions of ERISA and the Code and
(b) furnish to the Administrative Agent as soon as possible after, and in any
event within 10 days after any Responsible Officer of the Borrower or any
ERISA Affiliate knows or has reason to know that, any ERISA Event has
occurred that, alone or together with any other ERISA Events that have
occurred, could reasonably be expected to result in liability of the Borrower
in an aggregate amount exceeding $10,000,000, a statement of a Financial
Officer setting forth details as to such ERISA Event and the action, if any,
that the Borrower proposes to take with respect thereto.
SECTION 5.07. Books and Records; Inspection Rights.
Keep, and cause each Subsidiary to keep, proper books of record and account
in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities and (b) permit, and
cause each Subsidiary to permit, any representatives designated by the
Administrative Agent or any Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its principal
officers and independent accountants, all at such reasonable times and as
often as reasonably requested.
SECTION 5.08. Compliance with Laws. Comply with all
applicable laws, rules and regulations, and all orders of any Governmental
Authority, applicable to it or any of its property, business, operations or
transactions (including ERISA and all Environmental and Safety Laws),
except where the failure so to comply could not reasonably be expected to
result in a Material Adverse Effect, and provide prompt written notice to the
Lenders following the receipt of any notice of any violation of any such laws,
rules, regulations or orders from any Governmental Authority charged with
enforcing the same where such violation could reasonably be expected to
result in a Material Adverse Effect.
SECTION 5.09. Use of Proceeds. Use the proceeds of the
Loans solely for the purposes set forth in the preamble to this Agreement.
SECTION 5.10. Further Assurances. (a) Execute any and
all further documents, financing statements, agreements and instruments, and
take all further action, that may be required under applicable law, or that the
Required Lenders or the Administrative Agent may reasonably request, in
order to grant, preserve, protect and perfect the validity and first priority of
the security interests created or intended to be created by the Pledge
Agreement.
(b) Promptly after the acquisition or formation of any
Subsidiary that is a Designated Subsidiary, and promptly after any existing
Subsidiary becomes a Designated Subsidiary, (i) execute and cause such
Designated Subsidiary to execute, and deliver to the Administrative Agent, an
Additional Guarantor Agreement under which such Designated Subsidiary
shall become and assume the obligations of a Guarantor hereunder, and (ii)
promptly cause all Capital Stock directly or indirectly owned by it in such
Designated Subsidiary to be subjected to the Lien of the Pledge Agreement,
and promptly deliver to the Administrative Agent any and all certificates or
other instruments evidencing such Capital Stock, together with undated stock
powers or other instruments of transfer executed in blank, and take all such
other actions as may be required or as the Required Lenders or the
Administrative Agent may reasonably request to perfect and ensure the first
priority of such Lien.
ARTICLE VI
Negative Covenants
The Borrower covenants and agrees with each Lender that
so long as this Agreement shall remain in effect and until the Commitments
have been terminated and the principal of and interest on each Loan, all Fees
and all other expenses or amounts payable hereunder have been paid in full,
unless the Required Lenders shall otherwise consent in writing, the Borrower
will not, and will not cause or permit any of the Subsidiaries to:
SECTION 6.01. Indebtedness. Incur, create, assume or
permit to exist any Indebtedness, except:
(a) Indebtedness for borrowed money existing on the
Effective Date or incurred after such date in an aggregate principal
amount for all such Indebtedness not in excess of $10,000,000;
(b) Indebtedness created hereunder and under the other Loan
Documents;
(c) Indebtedness of the Borrower or any Subsidiary to any
Subsidiary or the Borrower, as the case may be;
(d) Indebtedness of companies acquired in Permitted
Business Acquisitions, in an aggregate principal amount for all such
Indebtedness not in excess of $15,000,000;
(e) Indebtedness of Schwitzer (Europe) Limited, Schwitzer
(Europe) Holdings Limited or Lacom Schwitzer Equipamentos, Ltda.
in an aggregate principal amount for all such Indebtedness not in
excess of $8,000,000;
(f) Indebtedness of Schwitzer Pension Trustee Limited
arising in the ordinary course of business to meet its pension
obligations;
(g) Indebtedness of the nature described in clause (h) of the
definition of Indebtedness, in an aggregate principal amount for all
such Indebtedness not in excess of $5,000,000 without duplication;
(h) Indebtedness of the nature described in clause (j) of the
definition of Indebtedness (other than the Chase Letters of Credit), in
an aggregate principal amount for all such Indebtedness not in excess
of $10,000,000 without duplication;
(i) Indebtedness in respect of the Chase Letters of Credit;
and
(j) Indebtedness of the nature described in clause (i) of the
definition of Indebtedness, but only to the extent that such
Indebtedness is not created for speculative purposes.
SECTION 6.02. Liens. Create, incur, assume or permit to
exist any Lien on any property or assets (including stock or other securities of
any person, including any Subsidiary) now owned or hereafter acquired by it
or any income or revenues or rights in respect of any thereof, or sell or
transfer any account receivable or other income or revenues or any right in
respect thereof, except:
(a) Liens on property or assets of the Borrower and the
Subsidiaries existing on the date hereof or incurred after such date
and securing obligations in an aggregate principal amount not in
excess of $10,000,000;
(b) Liens incurred and pledges and deposits made in the
ordinary course of business in connection with workers'
compensation, unemployment insurance, old-age pensions, retiree
health benefits and other social security benefits and deposits
securing liability to insurance carriers under insurance or self-
insurance arrangements in respect of such obligations;
(c) Liens securing the performance of bids, tenders, leases,
contracts (other than for the repayment of borrowed money),
statutory obligations, surety, customs and appeal bonds and other
obligations of a like nature, incurred as an incident to and in the
ordinary course of business;
(d) Liens imposed by law, such as carriers', warehousemen's,
mechanics', materialmen's and vendors' liens, incurred in the ordinary
course of business and securing obligations which are not yet due or
which are being contested in good faith by appropriate proceedings
as to which the Borrower or a Subsidiary, as the case may be, shall,
to the extent required by GAAP, have set aside on its books ade-
quate reserves;
(e) Liens securing the payment of taxes, assessments and
governmental charges or levies, either (i) not delinquent or (ii) being
contested in good faith by appropriate legal or administrative
proceedings and as to which the Borrower or a Subsidiary, as the
case may be, shall, to the extent required by GAAP, have set aside
on its books adequate reserves;
(f) zoning restrictions, easements, licenses, reservations,
provisions, covenants, conditions, waivers, restrictions on the use of
property or irregularities of title (and with respect to leasehold
interests, mortgages, obligations, liens and other encumbrances
incurred, created, assumed or permitted to exist and arising by,
through or under a landlord or owner of the leased property, with or
without consent of the lessee) which do not in the aggregate
materially detract from the value of its property or assets or
materially impair the use thereof in the operation of its business;
(g) Liens on the property or assets of any Subsidiary in
favor of the Borrower or any other wholly owned Domestic
Subsidiary;
(h) Liens in an aggregate amount not in excess of
$10,000,000 arising by law to secure any judgment that has not
resulted in an Event of Default and that is being contested in good
faith by appropriate proceedings;
(i) leases or subleases of equipment to customers that do not
materially interfere with the conduct of the business of the Borrower
and its Subsidiaries taken as a whole; and
(j) Liens consisting of interests of lessors under capital
leases permitted by Section 6.01;
(k) purchase money security interests in real property or
equipment securing obligations in an aggregate principal amount not
in excess of $5,000,000 without duplication;
(l) Liens on the assets or Capital Stock of companies
acquired after the date hereof in Permitted Business Acquisitions
securing Indebtedness described in Section 6.01(d);
(m) Liens created by any Loan Document;
(n) Liens on the assets of Schwitzer (Europe) Limited or
Schwitzer (Europe) Holdings Limited located in the United Kingdom
or on the assets of Lacom Schwitzer Equipamentos, Ltda. located in
Brazil which secure Indebtedness of such person or persons in an
aggregate principal amount not in excess of $8,000,000;
(o) restrictions on the transfer of assets imposed by any
federal, state or local statute, regulation or ordinance applicable to
the Borrower and its Subsidiaries; and
(p) extensions, renewals and replacements of Liens referred
to in paragraphs (a) through (p) of this Section 6.02; provided that
any such extension, renewal or replacement Lien shall be limited to
the property or assets (or improvements thereon) covered by the Lien
extended, renewed or replaced and that the obligations secured by
any such extension, renewal or replacement Lien shall be in an
amount not greater than the amount of the obligations secured by the
Lien extended, renewed or replaced (and any such extension, renewal
or replacement Lien shall continue to utilize any applicable basket
set forth above).
SECTION 6.03. Sale and Lease-Back Transactions. Enter
into any arrangement, directly or indirectly, with any person whereby it shall
sell or transfer any property, real or personal, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property or other property which it intends to use for substantially the same
purpose or purposes as the property being sold or transferred; provided, that
the Borrower and its subsidiaries may enter into such transactions to the
extent the aggregate sale or transfer price of the property sold or transferred
therein does not exceed $5,000,000.
SECTION 6.04. Investments, Loans and Advances.
Purchase, hold or acquire any capital stock, evidences of indebtedness or
other securities of, make or permit to exist any loans or advances to, or make
or permit to exist any investment or acquire any other interest whatsoever in,
any other person, except:
(a) investments in Subsidiaries;
(b) loans and advances permitted under Section 6.01(c);
(c) Permitted Investments;
(d) loans and advances to employees of the Borrower or the
Subsidiaries not to exceed $1,000,000 in the aggregate at any time
outstanding;
(e)(i) accounts receivable arising and trade credit granted in
the ordinary course of business and investments received in
connection with the exercise of customary creditors' rights upon
default or to the extent reasonably necessary in order to prevent or
limit loss and (ii) prepayments and other credits to suppliers made in
the ordinary course of business consistent with the past practices of
the Borrower;
(f) investments resulting from pledges and deposits referred
to in Section 6.02(b) or (c);
(g) investments constituting Permitted Business
Acquisitions; and
(h) investments (other than investments described in clauses
(a) through (g) above) to the extent the aggregate amount thereof
made in any fiscal year does not exceed $15,000,000.
SECTION 6.05. Mergers, Consolidations, Sales of Assets
and Acquisitions. Merge into or consolidate with any other person, or permit
any other person to merge into or consolidate with it, or sell, transfer, lease
or otherwise dispose of (in one transaction or in a series of transactions) all
or any substantial part of the consolidated assets of the Borrower (whether
now owned or hereafter acquired), or purchase, lease or otherwise acquire (in
one transaction or a series of transactions) all or any substantial part of the
assets of, or any division or line of business of, any other person, except that
this Section 6.05 shall not prohibit:
(a) the purchase or sale of inventory in the ordinary course
of business by the Borrower or any Subsidiary or the acquisition of
facilities, equipment or other assets in the ordinary course of
business;
(b) if at the time thereof and immediately after giving effect
thereto no Event of Default or Default shall have occurred and be
continuing, the merger, consolidation or restructuring of any
Subsidiary into the Borrower in a transaction in which the Borrower
is the surviving person, or the merger or consolidation of any
Subsidiary with any other Subsidiary, in each case in a transaction in
which no person other than the Borrower or a Subsidiary receives
any consideration; provided, that if any Designated Subsidiary shall
be merged with another Subsidiary, the resulting corporation must be
a Designated Subsidiary, unless the resulting corporation does not
meet the requirements of the definition of Significant Subsidiary.
(c) the merger or consolidation of the Borrower with or
into any other corporation if at the time thereof and immediately
after giving effect thereto (i) no Event of Default or Default shall
have occurred and be continuing, (ii) a majority of the Board of
Directors of the surviving or resulting corporation shall consist of
individuals that were members of the Board of Directors of the
Borrower immediately prior to such merger or consolidation, and (iii)
the surviving or resulting corporation (if not the Borrower) shall be a
U.S. corporation and shall expressly assume by a written agreement
in form and substance satisfactory to the Administrative Agent (and
its counsel) and the Required Lenders all obligations of the Borrower
hereunder; and
(d) Permitted Business Acquisitions and other investments
permitted by Section 6.04.
SECTION 6.06. Restrictions on Ability of Subsidiaries to
Pay Dividends. Permit any Subsidiary to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any such Subsidiary to (a) pay any dividends or
make any other distributions on its capital stock or any other interest or
(b) make or repay any loans or advances to the Borrower or the parent of
such Subsidiary.
SECTION 6.07. Transactions with Affiliates. Sell or
transfer any assets to, or purchase or acquire any assets from, or otherwise
engage in any material transaction with, any Affiliate except upon fair and
reasonable terms no less favorable to the Borrower or any Subsidiary than
those that would prevail in an arm's-length transaction with a person which
was not an Affiliate, provided that this Section 6.07 shall not apply to
transactions between the Borrower and any Subsidiary of which more than
90% of the equity interests are at the time owned, directly or indirectly, by
the Borrower.
SECTION 6.08. Interest Coverage Ratio. Permit the ratio
of (i) Consolidated EBITDA minus Consolidated Capital Expenditures to
(ii) Consolidated Interest Expense for any period of four fiscal quarters to be
less than 2.25 to 1.00.
SECTION 6.09. Leverage Ratio. Permit the Leverage
Ratio as of the end of any fiscal quarter to be greater than 3.75 to 1.00;
provided, that the Leverage Ratio may be greater than 3.75 to 1.00 (but shall
in no event exceed 4.00 to 1.00) at any time when the Borrower and its
Designated Subsidiaries shall have created in favor of the Administrative
Agent, for the benefit of the Lenders, pursuant to one or more security
agreements reasonably satisfactory to the Administrative Agent, perfected first
priority security interests securing the Obligations (and on a pari passu basis
the Obligations under and as defined in the Facility A Credit Agreement) in
all the accounts receivable and inventory of the Borrower and such
Designated Subsidiaries, and shall have executed and filed all such financing
statements and taken all such other actions as shall have been reasonably
requested by the Administrative Agent to ensure the perfection and first
priority of such security interests.
SECTION 6.10. Consolidated Net Worth. Permit
Consolidated Net Worth at any date to be less than the sum of
(i) $65,000,000, (ii) 85% of the amount by which Consolidated Net Worth
shall have been increased by any acquisition accounted for by the pooling of
interests method (after deducting merger and related expenses) and (iii) one-
half of Consolidated Net Income (to the extent positive) for each fiscal year
ended on or prior to such date, beginning with fiscal year 1996.
ARTICLE VII
Events of Default
In case of the happening of any of the following events
("Events of Default"):
(a) any representation or warranty made or deemed made in
or in connection with any Loan Document or the borrowings
hereunder, or any representation, warranty, statement or information
contained in any report, certificate, financial statement or other
instrument furnished in connection with or pursuant to any Loan
Document, shall prove to have been false or misleading in any
material respect when so made, deemed made or furnished;
(b) default shall be made in the payment of any principal of
any Loan when and as the same shall become due and payable,
whether at the due date thereof or at a date fixed for prepayment
thereof or by acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest on
any Loan or any Fee or any other amount (other than an amount
referred to in (b) above) due under any Loan Document, when and as
the same shall become due and payable, and such default shall
continue unremedied for a period of 3 Business Days;
(d) default shall be made in the due observance or
performance by the Borrower or any Subsidiary of any covenant,
condition or agreement contained in Section 5.01(a), 5.05, 5.09 or
5.10(b) or in Article VI;
(e) default shall be made in the due observance or
performance by the Borrower or any Subsidiary of any covenant,
condition or agreement contained in any Loan Document (other than
those specified in (b), (c) or (d) above) and such default shall
continue unremedied for a period of 30 days after notice thereof
from the Administrative Agent or any Lender to the Borrower;
(f) the Borrower or any Subsidiary shall fail to make any
payment (whether of principal or interest and regardless of amount)
in respect of any Material Indebtedness, when and as the same shall
become due and payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that
enables or permits the holder or holders of any Material Indebtedness
or any trustee or agent on its or their behalf (with or without the
giving of notice, the lapse of time or both) to cause any Material
Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that this clause (g) shall not apply to secured
Indebtedness that becomes due as a result of the voluntary sale or
transfer of the property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent jurisdiction
seeking (i) relief in respect of the Borrower or any Significant
Subsidiary, or of a substantial part of the property or assets of the
Borrower or a Significant Subsidiary, under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other
bankruptcy, insolvency, receivership or similar law, (ii) the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Significant
Subsidiary or for a substantial part of the property or assets of the
Borrower or a Significant Subsidiary or (iii) the winding-up or
liquidation of the Borrower or any Significant Subsidiary; and the
Borrower or any Significant Subsidiary by any act indicates its
approval thereof, consent thereto or acquiescence therein or such
proceeding or petition shall continue undismissed for 60 days or an
order, judgment or decree approving or ordering any of the foregoing
shall be entered;
(i) the Borrower or any Significant Subsidiary shall
(i) voluntarily commence any proceeding or file any petition seeking
relief under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other applicable bankruptcy, insolvency,
receivership or similar law, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or the
filing of any petition described in (h) above, (iii) apply for or
consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any
Subsidiary or for a substantial part of the property or assets of the
Borrower or any Significant Subsidiary, (iv) file an answer admitting
the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of
creditors, (vi) become unable, admit in writing its inability or fail
generally to pay its debts as they become due or (vii) take any action
for the purpose of effecting any of the foregoing;
(j) one or more judgments for the payment of money in an
aggregate amount in excess of $10,000,000 shall be rendered against
the Borrower, any Subsidiary or any combination thereof and the
same shall remain undischarged for a period of 30 consecutive days
during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to levy upon assets or
properties of the Borrower or any Subsidiary to enforce any such
judgment;
(k) an ERISA Event shall have occurred that, when taken
together with all other such ERISA Events that have occurred, could
reasonably be expected to result in liability of the Borrower and its
ERISA Affiliates in an aggregate amount exceeding $10,000,000;
(l) there shall have occurred a Change in Control;
(m) any security interest purported to be created by the
Pledge Agreement shall for any reason be held by a court of
competent jurisdiction not to be, or shall be asserted by the Borrower
not to be, a valid, first priority perfected security interest in
accordance with the terms of the Pledge Agreement; or
(n) any guarantee hereunder or under any Additional
Guarantor Agreement shall for any reason be held by a court of
competent jurisdiction not to be, or shall be asserted by the Borrower
or any Guarantor not to be valid in accordance with the terms
thereof.
then, and in every such event (other than an event with respect to the
Borrower described in paragraph (h) or (i) above), and at any time thereafter
during the continuance of such event, the Administrative Agent, at the request
of the Required Lenders, shall, by notice to the Borrower, take either or both
of the following actions, at the same or different times: (i) terminate
forthwith the Commitments and (ii) declare the Loans then outstanding to be
forthwith due and payable in whole or in part, whereupon the principal of the
Loans so declared to be due and payable, together with accrued interest
thereon and any unpaid accrued Fees and all other liabilities of the Borrower
accrued hereunder and under any other Loan Document, shall become
forthwith due and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any other Loan Document to the
contrary notwithstanding; and in any event with respect to the Borrower
described in paragraph (h) or (i) above, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with
accrued interest thereon and any unpaid accrued Fees and all other liabilities
of the Borrower accrued hereunder and under any other Loan Document, shall
automatically become due and payable, without presentment, demand, protest
or any other notice of any kind, all of which are hereby expressly waived by
the Borrower, anything contained herein or in any other Loan Document to
the contrary notwithstanding.
ARTICLE VIII
The Administrative Agent
In order to expedite the transactions contemplated by this
Agreement, The Chase Manhattan Bank, N.A. is hereby appointed to act as
Administrative Agent on behalf of the Lenders. Each of the Lenders, and
each assignee of any such Lender, hereby irrevocably authorizes the
Administrative Agent to take such actions on behalf of such Lender or
assignee and to exercise such powers as are specifically delegated to the
Administrative Agent by the terms and provisions hereof and of the other
Loan Documents, together with such actions and powers as are reasonably
incidental thereto. The Administrative Agent is hereby expressly authorized
by the Lenders, without hereby limiting any implied authority, (a) to receive
on behalf of the Lenders all payments of principal of and interest on the
Loans and all other amounts due to the Lenders hereunder, and promptly to
distribute to each Lender its proper share of each payment so received; (b) to
give notice on behalf of each of the Lenders to the Borrower of any Event of
Default specified in this Agreement of which the Administrative Agent has
actual knowledge acquired in connection with its agency hereunder; and (c) to
distribute to each Lender copies of all notices, financial statements and other
materials delivered by the Borrower pursuant to this Agreement as received
by the Administrative Agent.
Neither the Administrative Agent nor any of its directors,
officers, employees or agents shall be liable as such for any action taken or
omitted by any of them except for its or his own gross negligence or wilful
misconduct, or be responsible for any statement, warranty or representation
herein or the contents of any document delivered in connection herewith, or
be required to ascertain or to make any inquiry concerning the performance
or observance by the Borrower of any of the terms, conditions, covenants or
agreements contained in any Loan Document. The Administrative Agent
shall not be responsible to the Lenders for the due execution, genuineness,
validity, enforceability or effectiveness of this Agreement or any other Loan
Documents or other instruments or agreements. The Administrative Agent
shall in all cases be fully protected in acting, or refraining from acting, in
accordance with written instructions signed by the Required Lenders, or all
Lenders where unanimity is expressly required by the applicable provision of
this Agreement, and, except as otherwise specifically provided herein, such
instructions and any action or inaction pursuant thereto shall be binding on all
the Lenders. The Administrative Agent shall, in the absence of knowledge to
the contrary, be entitled to rely on any instrument, document or oral
communication believed by it in good faith to be genuine and correct and to
have been signed, sent or given by the proper person or persons, and the
Administrative Agent shall have no liability to the Borrower or any Lender
for, and the Borrower will indemnify the Administrative Agent and each
Lender against, any loss or damage that may result from such reliance to the
extent that such losses or damages of the Administrative Agent or any Lender
have not resulted from their gross negligence or wilful misconduct. Neither
the Administrative Agent nor any of its directors, officers, employees or
agents shall have any responsibility to the Borrower on account of the failure
of or delay in performance or breach by any Lender of any of its obligations
hereunder or to any Lender on account of the failure of or delay in
performance or breach by any other Lender or the Borrower of any of their
respective obligations hereunder or under any other Loan Document or in
connection herewith or therewith. The Administrative Agent may execute
any and all duties hereunder by or through agents or employees and shall be
entitled to rely upon the advice of legal counsel selected by it with respect to
all matters arising hereunder and shall not be liable for any action taken or
suffered in good faith by it in accordance with the advice of such counsel.
The Lenders hereby acknowledge that the Administrative
Agent shall be under no duty to take any discretionary action permitted to be
taken by it pursuant to the provisions of this Agreement or any other Loan
Document unless it shall be requested in writing to do so by the Required
Lenders.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, the Administrative Agent may
resign at any time by notifying the Lenders and the Borrower. Upon any
such resignation, the Required Lenders shall have the right to appoint a
successor (which shall be a Lender) with the consent of the Borrower (which
consent shall not be unreasonably withheld). If no successor shall have been
so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives
notice of its resignation, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent which shall
be a bank having a combined capital and surplus of at least $500,000,000 or
an Affiliate of any such bank. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor bank, such successor shall
succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. After
the Administrative Agent's resignation hereunder, the provisions of this
Article and Section 10.05 shall continue in effect for its benefit in respect of
any actions taken or omitted to be taken by it while it was acting as
Administrative Agent.
With respect to the Loans made by it hereunder, the
Administrative Agent in its individual capacity and not as Administrative
Agent shall have the same rights and powers as any other Lender and may
exercise the same as though it were not the Administrative Agent, and the
Administrative Agent and its Affiliates may accept deposits from, lend money
to and generally engage in any kind of business with the Borrower or any
Subsidiary or other Affiliate thereof as if it were not the Administrative
Agent.
Each Lender agrees (i) to reimburse the Administrative
Agent, on demand, in the amount of its pro rata share (based on its Commit-
ment hereunder) of any expenses incurred for the benefit of the Lenders by
the Administrative Agent, including counsel fees and compensation of agents
and employees paid for services rendered on behalf of the Lenders, which
shall not have been reimbursed by the Borrower and (ii) to indemnify and
hold harmless the Administrative Agent and any of its directors, officers,
employees or agents, on demand, in the amount of such pro rata share, from
and against any and all liabilities, taxes, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against it in its capacity as the Administrative Agent or any of them in any
way relating to or arising out of this Agreement or any other Loan Document
or any action taken or omitted by it or any of them under this Agreement or
any other Loan Document, to the extent the same shall not have been reim-
bursed by the Borrower; provided that no Lender shall be liable to the
Administrative Agent for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or wilful misconduct of the
Administrative Agent or any of its directors, officers, employees or agents.
Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender and
based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance
upon the Administrative Agent or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or
based upon this Agreement or any other Loan Document, any related
agreement or any document furnished hereunder or thereunder.
Notwithstanding anything herein to the contrary, no Lender
identified herein as Co-Agent shall have any separate duties, responsibilities,
obligations or authority as Co-Agent hereunder.
ARTICLE IX
Guarantee
In order to induce the Lenders to extend credit hereunder,
each Guarantor hereby unconditionally guarantees, jointly with the other
Guarantors and severally, as a primary obligor and not merely as a surety, the
Obligations. Each Guarantor further agrees that the Obligations may be
extended or renewed, in whole or in part, without notice to or further assent
from it, and that it will remain bound upon its Guarantee hereunder
notwithstanding any such extension or renewal of any Obligation.
Each Guarantor waives presentment to, demand of payment
from and protest to the Borrower of any of the Obligations, and also waives
notice of acceptance of its obligations and notice of protest for nonpayment.
The obligations of each Guarantor hereunder shall not be affected by (a) the
failure of any Lender or the Administrative Agent to assert any claim or
demand or to enforce any right or remedy against the Borrower under the
provisions of this Agreement or any of the other Loan Documents or
otherwise; (b) any rescission, waiver, amendment or modification of any of
the terms or provisions of this Agreement, any of the other Loan Documents
or any other agreement; (c) the failure of any Lender to exercise any right or
remedy against the Borrower; or (d) any release of any Collateral or any other
Guarantor.
Each Guarantor further agrees that its agreement hereunder
constitutes a promise of payment when due and not merely of collection, and
waives any right to require that any resort be had by any Lender to any
balance of any deposit account or credit on the books of any Lender in favor
of the Borrower or any other person.
The obligations of each Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason,
and shall not be subject to any defense or setoff, counterclaim, recoupment or
termination whatsoever, by reason of the invalidity, illegality or
unenforceability of the Obligations, any impossibility in the performance of
the Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of each Guarantor hereunder shall not be
discharged or impaired or otherwise affected by the failure of the
Administrative Agent or any Lender to assert any claim or demand or to
enforce any remedy under this Agreement or under any other Loan Document
or any other agreement, by any waiver or modification in respect of any
thereof, by any default, failure or delay, wilful or otherwise, in the
performance of the Obligations, or by any other act or omission which may
or might in any manner or to any extent vary the risk of such Guarantor or
otherwise operate as a discharge of such Guarantor as a matter of law or
equity.
Each Guarantor further agrees that its obligations hereunder
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of principal of or interest on any
Obligation is rescinded or must otherwise be restored by the Administrative
Agent or any Lender upon the bankruptcy or reorganization of the Borrower
or otherwise.
In furtherance of the foregoing and not in limitation of any
other right which the Administrative Agent or any Lender may have at law or
in equity against any Guarantor by virtue hereof, upon the failure of the
Borrower to pay any Obligation when and as the same shall become due,
whether at maturity, by acceleration, after notice of prepayment or otherwise,
each Guarantor hereby promises to and will, upon receipt of written demand
by the Administrative Agent, forthwith pay, or cause to be paid, in cash the
amount of such unpaid Obligation.
Upon payment by any Guarantor of any Obligations, each
Lender shall, in a reasonable manner, assign the amount of the Obligations
owed to it and so paid to such Guarantor, such assignment to be pro tanto to
the extent to which the Obligations in question were discharged by such
Guarantor, or make such disposition thereof as such Guarantor shall direct (all
without recourse to and without any representation or warranty by any
Lender).
Upon payment by any Guarantor of any sums as provided
above, all rights of such Guarantor against the Borrower or any other
Guarantor arising as a result thereof by way of right of subrogation or
otherwise (including the rights of such Guarantor under the previous and the
next paragraphs) shall in all respects be subordinated and junior in right of
payment to the prior indefeasible payment in full of all the Obligations to the
Lenders.
In addition to all such rights of indemnity and subrogation
as the Guarantors may have under applicable law, the Borrower agrees that
(a) in the event a payment shall be made by any Guarantor under its
Guarantee, the Borrower shall indemnify such Guarantor for the full amount
of such payment and such Guarantor shall be subrogated to the rights of the
person to whom such payment shall have been made to the extent of such
payment. Each Guarantor agrees that in the event a payment shall be made
by any Guarantor under its Guarantee, and such Guarantor (the "Claiming
Guarantor") shall not have been indemnified by the Borrower as provided in
the preceding sentence, each other Guarantor (a "Contributing Guarantor")
shall indemnify the Claiming Guarantor in an amount equal to the amount of
such payment multiplied by a fraction of which the numerator shall be the net
worth of the Contributing Guarantor on the date hereof (or any later date on
which it shall have become a Guarantor) and the denominator shall be the
aggregate net worth of all the Guarantors on the date hereof (or, as to any
Guarantor, on any later date on which it shall have become a Guarantor).
ARTICLE X
Miscellaneous
SECTION 10.01. Notices. (a) Notices and other
communications provided for herein shall be in writing and shall be delivered
by hand or overnight courier service, mailed by certified or registered mail or
sent by telecopy, as follows:
(i) if to the Borrower or any Guarantor, to or in care of the
Borrower at 3 Skidaway Village Square, Savannah, Georgia 31411,
Attention of Vernon J. Nagel, Executive Vice President of Finance,
Chief Financial Officer and Treasurer (Telecopy No. (912) 598-
0737), with a copy to Richard A. Walker, Executive Vice President,
Chief Administrative Officer, General Counsel and Secretary, or at
such other address as shall be specified in writing by the Borrower to
the Administrative Agent from time to time;
(ii) if to the Administrative Agent, to Chemical Bank Agency
Services Corporation, Grand Central Tower, 140 East 45th Street,
New York, NY 10017, Attention of Sandra Miklave (Telecopy No.
(212) 622-0122), with a copy to The Chase Manhattan Bank, N.A. at
One Chase Manhattan Plaza, New York, NY 10081, Attention of
Thomas T. Daniels (telecopy No. (212) 552-1711); and
(iii) if to a Lender, to it at its address (or telecopy number) set
forth in the Administrative Questionnaire delivered to the
Administrative Agent by such Lender in connection with the
execution of this Agreement or in the Assignment and Acceptance
pursuant to which such Lender shall have become a party hereto or
at such other address as shall be specified in writing by such Lender
to the Administrative Agent from time to time.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on
the date of receipt if delivered by hand or overnight courier service or sent by
telecopy or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 10.01 or in accordance
with the latest unrevoked direction from such party given in accordance with
this Section 10.01.
(b) Notwithstanding any provision to the contrary in this
Agreement, if the Borrower shall have submitted to the Administrative Agent
a notice or other communication by telephone (without a written confirmation
thereof), the Administrative Agent may send immediately (or, if such notice
or communication relates to a Swingline Loan, on a monthly basis) to the
Borrower a written confirmation containing the details of such telephone
notice or communication, in which case the Borrower shall promptly upon
receipt thereof either initial and return the written statement sent by the
Administrative Agent or advise the Administrative Agent of any errors
contained in such statement.
SECTION 10.02. No Waivers; Amendments. (a) No
failure or delay of the Administrative Agent or any Lender in exercising any
power or right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other
or further exercise thereof or the exercise of any other right or power. The
rights and remedies of the Administrative Agent and the Lenders hereunder
and under the other Loan Documents are cumulative and not exclusive of any
rights or remedies which they would otherwise have. Except as may be
otherwise expressly provided herein, no waiver of any provision of this
Agreement nor any consent to any departure by the Borrower or any
Guarantor therefrom shall in any event be effective unless the same shall be
in writing and signed by the Administrative Agent on behalf of the Required
Lenders (unless otherwise specified herein), and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice or demand on the Borrower or any Guarantor in any case
shall entitle the Borrower or such Guarantor to any other or further notice or
demand in similar or other circumstances.
(b) Neither this Agreement, nor any provision hereof nor
any exhibit or schedule hereto may be amended or modified except pursuant
to an agreement or agreements in writing entered into by the Borrower and
the Required Lenders; provided, however, that no such agreement shall
(i) decrease the principal amount of, or extend the maturity of or any dates
for the payment of any scheduled installment of principal of or interest on,
any Loan, or waive or excuse any such payment or any part thereof, or
reduce the rate of interest on any Loan, or reduce the Commitment Fee,
without the written consent of each Lender affected thereby, (ii) change or
extend the Commitment of any Lender, without the prior written consent of
such Lender, (iii) amend or modify or otherwise affect the rights or duties of
the Administrative Agent hereunder without the prior written consent of the
Administrative Agent or (iv) amend or modify the definition of "Required
Lenders", Section 2.16, this Section 10.02 or Section 10.06(a), or release any
Guarantor or all or substantially all the Collateral, without the written
consent of each Lender.
SECTION 10.03. Governing Law; Submission to
Jurisdiction. (a) THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK.
(b) The Borrower and each Guarantor irrevocably submits
to the nonexclusive jurisdiction of any New York State or Federal court
sitting in the Borough of Manhattan, The City of New York, over any suit,
action or proceeding arising out of or relating to this Agreement, any Loan
Document or any other document contemplated hereby or thereby, irrevocably
waives and agrees not to assert, by way of motion, as a defense or otherwise,
any claim that it is not subject to the jurisdiction of any such court, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding brought in any such court and any claim that
any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum.
(c) The Borrower and each Guarantor agrees, to the fullest
extent it may effectively do so under applicable law, that a judgment in any
suit, action or proceeding of the nature referred to in paragraph (b) above
brought in any such court shall be conclusive and binding upon the Borrower
or such Guarantor and may be enforced in the courts of the United States of
America or the State of New York (or any other courts to the jurisdiction of
which the Borrower or such Guarantor is or may be subject) by a suit upon
such judgment.
(d) The Borrower and each Guarantor consents to process
being served in any suit, action or proceeding of the nature referred to in
paragraph (b) by mailing a copy thereof by registered or certified mail,
postage prepaid, return receipt requested, to the address of the Borrower or
such Guarantor, as set forth or referred to in Section 10.01. The Borrower
and each Guarantor agrees that such service (i) shall be deemed in every
respect effective service of process upon the Borrower or such Guarantor in
any such suit, action or proceeding and (ii) shall, to the fullest extent
permitted by law, be taken and held to be valid personal service upon and
personal delivery to the Borrower or such Guarantor.
(e) Nothing in this Section 10.03 shall affect the right of
the Administrative Agent or any Lender to serve process in any manner per-
mitted by law, or limit any right that the Administrative Agent or any Lender
may have to bring proceedings against the Borrower or any Guarantor in the
courts of any jurisdiction or to enforce in any lawful manner a judgment
obtained in one jurisdiction in any other jurisdiction.
SECTION 10.04. Expenses; Indemnity. (a) The Borrower
shall pay all reasonable out-of-pocket expenses incurred by the Administrative
Agent in connection with the syndication of the credit facility provided for
herein and the preparation and administration of this Agreement and the other
Loan Documents or in connection with any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
hereby or thereby contemplated shall be consummated), or incurred during the
continuance of a Default or Event of Default by the Administrative Agent or
any Lender in connection with the enforcement or protection of its rights
under this Agreement and the other Loan Documents or in connection with
the Loans made hereunder, including the reasonable fees, charges and
disbursements of Cravath, Swaine & Moore, counsel for the Administrative
Agent, and, in connection with any such enforcement or protection, the
reasonable fees, charges and disbursements of any other counsel for the
Administrative Agent, the Collateral Agent or any Lender.
(b) The Borrower shall indemnify the Administrative
Agent, each Lender and each Affiliate of any of the foregoing persons and
each of their respective directors, officers, employees and agents (each such
person being called an "Indemnitee") against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable counsel fees, charges and disbursements,
incurred by or asserted against any Indemnitee arising out of, in any way
connected with, or as a result of (i) the execution or delivery of this
Agreement or any other Loan Document or any agreement or instrument
contemplated thereby, the performance by the parties thereto of their
respective obligations thereunder and the other transactions contemplated
thereby, (ii) the use of the proceeds of the Loans and (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto, provided, however, that
such indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses have resulted
from the gross negligence or wilful misconduct of such Indemnitee.
(c) The provisions of this Section 10.04 shall remain
operative and in full force and effect regardless of the expiration of the term
of this Agreement, the consummation of the transactions contemplated
hereby, the repayment of any of the Loans, the expiration of the
Commitments, the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document, or any investigation made by or
on behalf of the Administrative Agent or any Lender. All amounts due under
this Section 10.04 shall be payable on written demand therefor.
SECTION 10.05. Survival of Agreements, Representations
and Warranties, etc. All warranties, representations and covenants made by
the Borrower or any Guarantor herein or in any certificate or other instrument
delivered by the Borrower or any Guarantor or on its behalf in connection
with this Agreement or any other Loan Document shall be considered to have
been relied upon by the Lenders and shall survive the making of the Loans
herein contemplated regardless of any investigation made by the Lenders or
on their behalf and shall continue in full force and effect so long as any
amount due or to become due hereunder is outstanding and unpaid. All
statements in any such certificate or other instrument made by or on behalf of
the Borrower, any Subsidiary or any Affiliate of any of them shall constitute
representations and warranties by the Borrower hereunder. The right of each
Lender to receive payments pursuant to Sections 2.13, 2.15, 2.19 and 10.04
shall survive the termination of this Agreement and the repayment of the
Loans.
SECTION 10.06. Successors and Assigns. (a) This
Agreement shall be binding upon and inure to the benefit of the Borrower,
the Guarantors, the Lenders, the Administrative Agent and their respective
successors and assigns. Neither the Borrower nor any Guarantor may assign
or transfer any of its rights or obligations hereunder without the prior written
consent of all the Lenders.
(b) Each Lender may assign all or a portion of its interests,
rights and obligations under this Agreement (including all or a portion of its
Commitments and the Loans at the time owing to it); provided, however, that
(i) except in the case of an assignment by a Lender to an Affiliate of such
Lender or to another Lender, the Borrower must consent to such assignment
in writing (which consent may not be unreasonably withheld), (ii) except in
the case of an assignment to another Lender or an Affiliate of any Lender or
in the case of an assignment of all the assigning Lender's Loans and
Commitments, the aggregate amount of the Commitments and Loans, without
duplication, of the assigning Lender subject to any such assignment shall not
be less than $10,000,000 and will not result in such assigning Lender holding
an aggregate amount of Commitments and Loans less than $10,000,000,
(iii) each assignment of Commitments or Loans will be made on a pro rata
basis as between the Commitments and the commitments under the Facility A
Credit Agreement and the Loans and the loans under the Facility A Credit
Agreement, respectively, and (iv) 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 $3,500. Upon
such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective
date shall be (unless waived by the Administrative Agent) at least five
Business Days after the execution thereof, (A) the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such Assign-
ment and Acceptance, have the rights and obligations of a Lender under this
Agreement and (B) the assignor thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obliga-
tions under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of the assignor's rights and
obligations under this Agreement, the assignor shall cease to be a party hereto
but shall continue to be entitled to the benefits of Sections 2.13, 2.15, 2.19
and 10.04 as well as to any Commitment Fee accrued for its account here-
under and not yet paid).
(c) By executing and delivering an Assignment and
Acceptance, the assignor and the assignee thereunder shall be deemed to
confirm to and agree with each other and the Borrower as follows: (i) such
assignor warrants that it is the legal and beneficial owner of the interest
being assigned free and clear of any adverse claim; (ii) except as set forth in
clause (i) above, the assignor makes no other representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement, or the execu-
tion, legality, validity, enforceability, genuineness, sufficiency or value of
this Agreement or any other instrument or document furnished pursuant hereto or
thereto, or the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under this Agreement or
any other instrument or document furnished pursuant hereto or thereto;
(iii) such assignee represents and warrants that it is legally authorized to
enter into such Assignment and Acceptance; (iv) such assignee confirms that it
has received a copy of this Agreement together with copies of the financial
statements described in Section 3.05 or the most recent financial statements
delivered pursuant to Section 5.04, as applicable, and such other documents
and information as it has deemed appropriate to make its own credit analysis
and decision to enter into such Assignment and Acceptance; (v) such assignee
will independently and without reliance upon the assignor 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; (vi) such assignee appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Administrative Agent by the
terms hereof, together with such powers as are reasonably incidental thereto;
and (vii) such assignee agrees that it will, to the extent of the interest
assigned to it, perform in accordance with their terms all the obligations
which by the terms of this Agreement are required to be performed by the
Lenders.
(d) Each Lender may without the consent of the Borrower
or any Guarantor sell participations to one or more banks or other entities in
all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment and the same portion of
the Loans owing to it) and the Borrower and each Guarantor agrees that any
purchaser of a participation in such Loans so acquired may exercise any and
all rights of banker's lien, setoff, counterclaim or otherwise with respect to
any and all moneys owing by the Borrower or such Guarantor to such
purchaser as fully as if such purchaser were a holder of the Loans acquired
by each Lender hereunder in the amount of such participation; provided,
however, that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the Borrower
for the performance of its obligations hereunder, (iii) the participating
Lenders or other entities shall be entitled to the benefit of the cost
protection provisions contained in Sections 2.13, 2.15 and 2.19 to the same
extent as if they were the Lender and (iv) the Borrower shall continue to deal
solely and directly with the Lender in connection with the Lender's rights and
obligations under this Agreement, and the Lender shall retain the sole right to
enforce the obligations of the Borrower and the Guarantors relating to the
Loans and to approve, without the consent of or consultation with any
participant, any amendment, modification or waiver of any provision of this
Agreement (other than amendments, modifications or waivers with respect to
Fees payable hereunder or an increase in the amount of principal of or a
decrease in the rate at which interest is payable on the Loans, or an extension
of the dates fixed for payments of principal of or interest on the Loans).
(e) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
10.06, disclose to the assignee or participant or proposed assignee or partici-
pant any information relating to the Borrower or the Subsidiaries furnished to
the Lenders by or on behalf of the Borrower or the Subsidiaries, as
applicable; provided that, prior to any such disclosure, each such assignee or
participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of any confidential information
relating to the Borrower or any Subsidiary received from the Lenders.
(f) The Administrative Agent shall maintain at one of its
offices in The City of New York a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses
of the Lenders, the Commitment of, and principal amount of any Loans
owing to, each Lender pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive in the absence of
manifest error and the Borrower, the Guarantors, the Administrative Agent
and the Lenders may treat each person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement. The Register shall be available for inspection by the
Borrower at any reasonable time and from time to time upon reasonable prior
notice.
(g) Any Lender may at any time pledge all or any portion
of its rights under this Agreement to a Federal Reserve Bank; provided that
no such pledge shall release any Lender from its obligations hereunder or
substitute any such Federal Reserve Bank for such Lender as a party hereto.
SECTION 10.07. Right of Setoff. If an Event of Default
shall have occurred and be continuing, each Lender is hereby authorized at
any time and from time to time, to the extent not prohibited by applicable
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender to or for the credit or the account of the
Borrower or any Guarantor against any of and all the obligations of the
Borrower or such Guarantor now or hereafter existing under this Agreement
and other Loan Documents held by such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement or such
other Loan Document and although such obligations may be unmatured. The
rights of each Lender under this Section 10.07 are in addition to other rights
and remedies (including other rights of setoff) which such Lender may have.
SECTION 10.08. Severability. In case any one or more of
the provisions contained in this Agreement shall be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein or therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
SECTION 10.09. Cover Page, Table of Contents and
Section Headings. The cover page, Table of Contents and section headings
used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of or be taken into
consideration in interpreting this Agreement.
SECTION 10.10. Counterparts; Effectiveness. This
Agreement may be signed in any number of counterparts with the same effect
as if the signatures thereon and hereon were upon the same instrument. This
Agreement shall become effective when copies hereof which, when taken
together, bear the signatures of each of the parties hereto shall have been
received by the Administrative Agent.
SECTION 10.11. Waiver of Jury Trial. Each party hereto
hereby waives, to the fullest extent permitted by applicable law, any right it
may have to a trial by jury in respect of any litigation directly or indirectly
arising out of, under or in connection with this Agreement. Each party hereto
(a) certifies that no representative, agent or attorney of any other party has
represented, expressly or otherwise, that such other party would not, in the
event of litigation, seek to enforce the foregoing waiver and (b) acknowledges
that it and the other parties hereto have been induced to enter into this Agree-
ment by, among other things, the mutual waivers and certifications in this
Section 10.11.
SECTION 10.12. Entire Agreement. This Agreement, the
other Loan Documents and the Fee Letter constitute the entire contract
between the parties relative to the subject matter hereof. Any previous
agreement among the parties with respect to the subject matter hereof is
superseded by this Agreement, the other Loan Documents and the Fee Letter.
Nothing in this Agreement, the other Loan Documents or the Fee Letter,
expressed or implied, is intended to confer upon any party other than the
parties hereto and thereto any rights, remedies, obligations or liabilities
under or by reason of this Agreement, the other Loan Documents or the Fee
Letter.
SECTION 10.13. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the applicable interest rate,
together with all fees and charges which are treated as interest under appli-
cable law (collectively the "Charges"), as provided for herein or in any other
document executed in connection herewith, or otherwise contracted for,
charged, received, taken or reserved by any Lender, shall exceed the
maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by such Lender in accordance with
applicable law, the rate of interest payable hereunder, together with all
Charges payable to such Lender, shall be limited to the Maximum Rate.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective authorized officers as
of the day and year first written above.
KUHLMAN CORPORATION, as Borrower,
by
/s/ Vernon J. Nagel
------------------------
Name: Vernon J. Nagel
Title: Executive Vice President
of Finance
KUHLMAN ELECTRIC CORPORATION,
COLEMAN CABLE SYSTEMS, INC.,
COMMUNICATION CABLE, INC.,
SCHWITZER, INC.,
SCHWITZER U.S. INC.,
ASSOCIATED ENGINEERING COMPANY,
and
BARON WIRE & CABLE CORP., as Guarantors,
by
/s/ Vernon J. Nagel
------------------------
Name: Vernon J. Nagel
Title: Vice President
THE CHASE MANHATTAN BANK, N.A.,
individually and as Administrative Agent,
by
/s/ Bruce S. Borden
------------------------
Name: Bruce S. Borden
Title: Vice President
ABN AMRO BANK N.V.,
ATLANTA AGENCY,
by
/s/ Steven Hipsman
------------------------
Name: Steven Hipsman
Title: Vice President
by
/s/ Robert Budnek
------------------------
Name: Robert Budnek
Title: Assistant Vice President
AMSOUTH BANK OF ALABAMA,
by
/s/ Dennis S. Losin
------------------------
Name: Dennis S. Losin
Title: Vice President
THE FIRST NATIONAL BANK OF BOSTON,
by
/s/ Rod Guinn
------------------------
Name: Rod Guinn
Title: Director
BANQUE PARIBAS, NEW YORK BRANCH,
by
/s/ Duane P. Helkowski
------------------------
Name: Duane P. Helkowski
Title: Assistant Vice President
by
/s/ Ann C. Pifer
------------------------
Name: Ann C. Pifer
Title: Vice President
COMERICA BANK,
by
/s/ John M. Costa
------------------------
Name: John M. Costa
Title: Vice President
CREDIT LYONNAIS ATLANTA AGENCY,
by
/s/ David M. Cawrse
------------------------
Name: David M. Cawrse
Title: Vice President
FIRST UNION NATIONAL BANK OF GEORGIA,
by
/s/ Louis K. Beasley, III
------------------------
Name: Louis K. Beasley, III
Title: Vice President
HARRIS TRUST AND SAVINGS BANK,
by
/s/ Patrick J. McDonnell
-------------------------
Name: Patrick J. McDonnell
Title: Vice President
MELLON BANK, N.A.,
by
/s/ Clifford A. Mull
-------------------------
Name: Clifford A. Mull
Title: Assistant Vice President
NBD BANK,
by
/s/ J. Philip Lowman
------------------------
Name: J. Philip Lowman
Title: First Vice President
PNC BANK, NATIONAL ASSOCIATION,
by
/s/ Robert J. Mitchell Jr.
-------------------------
Name: Robert J. Mitchell Jr.
Title: Vice President
THE SUMITOMO BANK, LIMITED,
by
/s/ Roger N. Arsham
-------------------------
Name: Roger N. Arsham
Title: Vice President
by
/s/ Lauren P. Carrigan
-------------------------
Name: Lauren P. Carrigan
Title: Assistant Vice-President
SUNTRUST BANK, ATLANTA,
by
/s/ Bradley J. Staples
-------------------------
Name: Bradley J. Staples
Title: Bank Officer
by
/s/ C. Wes Burton, Jr.
-------------------------
Name: C. Wes Burton, Jr.
Title: Vice President
WACHOVIA BANK OF GEORGIA, N.A.,
by
/s/ Kevin B. Harrison
-------------------------
Name: Kevin B. Harrison
Title: Vice President
