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 March 31, 1999
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OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 1-11978
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The Manitowoc Company, Inc.
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(Exact name of registrant as specified in its charter)
Wisconsin 39-0448110
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- --- (State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
500 So. 16th Street, Manitowoc, Wisconsin 54220
- --- ---------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(920) 684-4410
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(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (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 ( )
The number of shares outstanding of the Registrant's common stock,
$.01 par value, as of April 30, 1999, the most recent practicable date, was
25,964,700.
PART I. FINANCIAL INFORMATION
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Item 1. Financial Statements
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<TABLE>
<CAPTION>
THE MANITOWOC COMPANY, INC.
Consolidated Statements of Earnings
For the First Quarter of Calendar Years 1999 and 1998
(Unaudited)
(In thousands, except per-share and average shares data)
March 31, 1999 March 31, 1998
----------------------- ---------------------
<S> <C> <C>
Net Sales $ 184,189 $ 154,139
Costs And Expenses:
Cost of goods sold 131,629 110,667
Engineering, selling and
administrative expenses 29,910 25,887
----------- ---------
Total 161,539 136,554
Earnings From Operations 22,650 17,585
Other Income (Expense):
Interest expense (2,708) (2,408)
Interest and dividend income 72 (9)
Other expense (290) (348)
------------ ---------
Total (2,926) (2,765)
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Earnings Before Taxes
On Income 19,724 14,820
Provision For Taxes On Income 7,296 5,483
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Net Earnings $ 12,428 $ 9,337
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Net Earnings Per Share - Basic $ .48 $ .36
Net Earnings Per Share - Diluted $ .47 $ .36
Dividends Per Share $ .075 $ .075
Average Shares Outstanding - Basic 25,962,372 25,911,848
Average Shares Outstanding - Diluted 26,166,099 26,175,801
See accompanying notes which are an integral part of these statements.
</TABLE>
<TABLE>
<CAPTION>
THE MANITOWOC COMPANY, INC.
Consolidated Balance Sheets
As of March 31, 1999 and December 31, 1998
(Unaudited)
(In thousands, except share data)
-ASSETS-
March 31, 1999 Dec. 31, 1998
Current Assets: ------------------------------------
<S> <C> <C>
Cash and cash equivalents $ 14,250 $ 10,582
Marketable securities 1,858 1,834
Accounts receivable 86,205 69,504
Inventories 85,271 81,978
Prepaid expenses and other 1,483 5,297
Future income tax benefits 21,682 21,682
------------- ------------
Total current assets 210,749 190,877
Intangibles assets-net 215,297 184,926
Other assets 15,790 11,628
Property, plant and equipment:
At cost 213,679 211,360
Less accumulated depreciation (119,260) (117,777)
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Property, plant and equipment-net 94,419 93,583
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TOTAL $ 536,255 $ 481,014
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-LIABILITIES AND STOCKHOLDERS' EQUITY-
Current Liabilities:
Accounts payable and accrued expenses $ 131,708 $123,534
Current portion of long-term debt 6,256 10,968
Short term borrowings 60,000 48,500
Product warranties 15,142 15,110
--------- ---------
Total current liabilities 213,106 198,112
Non-Current Liabilities:
Long-term debt, less current portion 109,824 79,834
Product warranties 4,589 4,723
Postretirement health benefits obligations 19,805 19,705
Other 6,070 6,088
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Total non-current liabilities 140,288 110,350
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Stockholders' Equity:
Common stock (36,746,483 shares issued at both dates) 245 245
Additional paid-in capital 31,041 31,029
Accumulated other comprehensive income (382) (212)
Retained earnings 233,167 222,687
Treasury stock at cost (10,781,783 and
10,789,616 shares) (81,210) (81,197)
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Total stockholders' equity 182,861 172,552
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TOTAL $ 536,255 $ 481,014
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See accompanying notes which are an integral part of these statements.
</TABLE>
<TABLE>
<CAPTION>
THE MANITOWOC COMPANY, INC.
Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 1999 and 1998
(In thousands)
(Unaudited)
March 31, 1999 March 31, 1998
---------------------------------------
<S> <C> <C>
Cash Flows From Operations:
Net earnings $ 12,428 $ 9,337
Non-cash adjustments to income:
Depreciation and amortization 4,009 3,436
Deferred financing fees 141 88
Loss on sale of fixed assets 190 27
Changes in operating assets and liabilities:
Accounts receivable (11,501) (22,861)
Inventories 1,681 (18,286)
Other current assets 3,859 945
Current liabilities 2,723 7,107
Non-current liabilities 80 (211)
Non-current assets (4,419) (791)
---------- ----------
Net cash provided by (used for) operations 9,191 (21,209)
Cash Flows From Investing:
Purchase of temporary investments - net (24) (14)
Business acquisition (37,662) --
Proceeds from sale of property, plant,
and equipment 538 218
Capital expenditures (3,206) (4,224)
---------- ----------
Net cash used for investing (40,354) (4,020)
Cash Flows From Financing:
Dividends paid (1,947) (1,944)
Treasury stock issued -- 97
Proceeds (payments) on long-term borrowings 25,278 (3,998)
Change in short-term borrowings-net 11,500 29,900
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Net cash provided by financing 34,831 24,055
Effect of exchange rate changes on cash -- 8
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Net increase (decrease) in cash
and cash equivalents 3,668 (1,166)
Balance at beginning of period 10,582 11,888
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Balance at end of period $ 14,250 $ 10,722
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Supplemental cash flow information:
Interest paid $ 2,207 $ 2,291
Income taxes paid $ 2,252 $ 3,766
See accompanying notes which are an integral part of these statements.
</TABLE>
<TABLE>
<CAPTION>
THE MANITOWOC COMPANY, INC.
Consolidated Statements of Comprehensive Income
For the Three Months Ended March 31, 1999 and 1998
(In thousands)
(Unaudited)
March 31, 1999 March 31, 1998
-------------------- -------------------
<S> <C> <C>
Net earnings $ 12,428 $ 9,337
Other comprehensive income:
Foreign currency translation
adjustments (170) 302
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Comprehensive income $ 12,258 $ 9,639
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See accompanying notes which are an integral part of these statements.
</TABLE>
THE MANITOWOC COMPANY, INC.
Notes to Unaudited Consolidated Financial Statements
For the Three Months Ended March 31, 1999 and March 31, 1998
(Unaudited)
Note 1. In the opinion of management, the accompanying unaudited
condensed financial statements contain all adjustments,
representing normal recurring accruals, necessary to present
fairly the results of operations, cash flows and comprehensive
income for the quarters ended March 31, 1999 and 1998 and the
financial position at March 31, 1999. The interim results are
not necessarily indicative of results for a full year and do not
contain information included in the Company's annual consolidated
financial statements and notes for the year ended December 31,
1998. It is suggested that these financial statements be read in
conjunction with financial statements and the notes thereto
included in the Company's latest annual report.
Note 2. The components of inventory at March 31, 1999 and December 31,
1998 are summarized as follows (dollars in thousands):
<TABLE>
<CAPTION>
March 31, 1999 Dec. 31, 1998
------------------------------------
Components:
<S> <C> <C>
Raw materials $ 38,233 $ 32,564
Work-in-process 25,672 27,882
Finished goods 42,457 42,304
--------- --------
Total inventories at FIFO costs 106,352 102,750
Excess of FIFO costs
over LIFO value (21,081) (20,772)
--------- --------
Total inventories $ 85,271 $ 81,978
</TABLE>
Inventory is carried at lower of cost or market using the first-in, first-
out (FIFO) method for 57% and 58% of total inventory at March 31, 1999 and
December 31, 1998, respectively. The remainder of the inventory is costed
using the lower of the last-in, first-out (LIFO) method or market.
Note 3. The United States Environmental Protection Agency ("EPA") has
identified the company as a potentially responsible party ("PRP")
under the Comprehensive Environmental Response Compensation and
Liability Act ("CERCLA"), liable for the costs associated with
investigating and cleaning up contamination at the Lemberger
Landfill Superfund Site (the "Site") near Manitowoc, Wisconsin.
Approximately 150 PRP's have been identified as having shipped substances
to the Site. Eleven of the potentially responsible parties have formed a
group (the Lemberger Site Remediation Group, or LSRG) and have successfully
negotiated with the EPA and the Wisconsin Department of Natural Resources
to settle the potential liability at the Site and fund the cleanup.
Recent estimates indicate that the total cost to clean up the Site could be
as high as $30 million, however, the ultimate allocation of costs for the
Site are not yet final. Although liability is joint and several, the
Company's percentage share of liability is estimated to be 11% of the total
cleanup costs. Prior to December 31, 1996, the Company accrued $3.3
million in connection with this matter. There were no expenses incurred
for the quarters ended March 31, 1999 and 1998. Remediation work at the
Site has been completed, with only long-term pumping and treating of ground
water and Site maintenance remaining. The remaining estimated liability
for this matter, included in other current and noncurrent liabilities at
March 31, 1998, is $1.1 million.
As of March 31, 1999, 26 product-related lawsuits were pending. Of these,
two occurred between 1985 and 1990 when the Company was completely self-
insured. The remaining lawsuits occurred subsequent to June 1, 1990, at
which time the Company has insurance coverages ranging from a $5.5 million
self-insured retention with a $10.0 million limit on the insurer's
contribution in 1990, to the current $1.0 million self-insured retention
and $25.0 million limit on the insurer's contribution.
Product liability reserves at March 31, 1999 are $9.3 million; $4.1 million
reserved specifically for the 38 cases referenced above, and $5.2 million
for incurred but not reported claims. These reserves were estimated using
actuarial methods. The highest current reserve for a non-insured claim is
insignificant, and $0.8 million for an insured claim. Based on the
Company's experience in defending itself against product liability claims,
management believes the current reserves are adequate for estimated
settlements on aggregate self-insured claims. Any recoveries from
insurance carriers are dependent upon the legal sufficiency of claims and
the solvency of insurance carriers.
It is reasonably possible that the estimates for environmental remediation
and product liability costs may change in the near future based upon new
information that may arise. Presently, there is no reliable means to
estimate the amount of any such potential changes.
The Company is also involved in various other legal actions arising in the
normal course of business. After taking into consideration legal counsel's
evaluation of such actions, in the opinion of management, ultimate
resolution is not expected to have a material adverse effect on the
consolidated financial statements.
Note 4. During the fourth quarter of 1996, the Company's decision to
consolidate and close walk-in refrigeration plants located in
Iowa and Tennessee resulted in a $1.2 million charge to earnings
in the Foodservice segment. The charge includes a write-down to
the estimated net realizable values of the assets being abandoned
and takes into consideration future holding costs and costs
related to the sale of the properties. During the first quarter
of 1999, charges against the reserve were insignificant. During
the first quarter of 1998, $0.1 million was charged against the
reserve.
Assets currently held for sale include land and improvements, buildings,
and certain machinery and equipment at the "Peninsula facility" located in
Manitowoc, Wisconsin. The current carrying value of these assets, and the
assets mentioned above, as well as other insignificant assets, determined
through independent appraisals, is approximately $3.8 million and is
included in other assets. The future holding costs, included in accounts
payable and accrued expenses and in other non-current liabilities, consist
primarily of utilities, security, maintenance, property taxes, and
insurance. These reserves also include estimates for potential
environmental liabilities on the Peninsula location. For the first quarters
of 1999 and 1998, the charges against the reserve were insignificant.
Note 5. On February 17, 1999, the Company's board of directors authorized
a 3-for-2 stock split of the Company's shares in the form of a
50% stock dividend payable April 1, 1999 to shareholders of
record on March 1, 1999. As a result of the stock split
8,654,900 shares were issued. All references in these financial
statements to average number of shares outstanding, earnings per
share amounts, and market prices per share of common stock have
been restated to reflect the split. The Company also split its
common stock on a 3-for-2 basis on June 30, 1997 and July 2,
1996.
Note 6. The following is a reconciliation of the average shares
outstanding used to compute basic and diluted earnings per share.
There is no earnings impact for the assumed conversions of the
stock options in each of the quarters.
<TABLE>
<CAPTION>
Quarter Ended March 31
----------------------------------------------------------------------
1999 1998
----------------------------------------------------------------
Per Share Per Share
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Basic earnings per share 25,962,372 $ .48 25,911,848 $ .36
Effect of dilutive securities stock options 203,727 263,953
Diluted earnings per share 26,166,099 $ .47 26,175,801 $ .36
</TABLE>
Note 7. On January 11, 1999, the Company acquired all of the issued and
outstanding shares of Purchasing Support Group (PSG). The new
operation, renamed Manitowoc Beverage Systems, Inc. (MBS), a
four-member beverage service organization, will provide full-
service parts, components, and dispenser systems support to
bottlers in the beverage industry. MBS is made up of companies
that have been serving soft-drink bottling operations throughout
the United States since the 1960's with a variety of equipment
services for beverage dispensing systems. MBS operates in the
Northeast, Atlantic Coast, Southeast, Central, and Western United
States.
The aggregate consideration paid by the Company for the issued
and outstanding shares of PSG was $42,854 which is net of cash
acquired of $732 and includes direct acquisition costs of $394
and assumed liabilities of $5,192. The acquisition was financed
through the Company's existing credit facility. The purchase
price for PSG is subject to a post-closing adjustment based upon
net worth as set forth in the Purchase and Sale Agreement. The
Company has not recorded any adjustment to the purchase price
based upon the post-closing adjustment as of March 31, 1999.
The acquisition has been recorded using the purchase method of accounting.
The cost of the acquisition has been allocated on the basis of the
estimated fair values of the assets acquired and the liabilities assumed.
The preliminary estimate of the excess of the cost over the fair value of
the net assets acquired is $32,141 and is being amortized over 40 years.
The results of MBS's operations subsequent to the date of acquisition are
included in the Consolidated Statements of Earnings for the quarter ended
March 31, 1999.
On April 9, 1999, the Company acquired all of the issued and outstanding
shares of Kyees Aluminum, Inc., a leading supplier of cooling components
for the major suppliers of fountain soft drink beverage dispensers, for
$25,700 in cash. Kyees' aluminum "cold plates" are a key component used to
chill soft drink beverages in dispensing equipment. Located in La Mirada,
California, Kyees is a technology leader in manufacturing cold plate
equipment, in both quality and engineering design. The acquisition of
Kyees was financed through the Company's existing credit facility.
Note 8. On April 6, 1999, the Company amended and restated its existing
Credit Agreement (Agreement), with a group of banks in order to
increase the amount of funds available and to extend the
termination date to April 6, 2004. The amended and restated
Agreement provides for maximum borrowings of $300 million under
revolving loans and a letter of credit subfacility.
The Agreement includes covenants the most restrictive of which
require the maintenance of various debt and net worth ratios. An
annual commitment fee, calculated based upon the Company's
consolidated leverage ratio as defined by the Agreement, is due
on the unused portion of the facility quarterly. Borrowings
under the Agreement bear interest at a rate equal to the sum of a
base rate, or a Eurodollar rate, at the option of the Company,
plus an applicable percentage, as defined by the Agreement. The
base rate is equal to the greater of the Federal Funds rate in
effect on such day plus .5% or the prime rate in effect on such
day. Borrowings under the Agreement are not collateralized.
Note 9. The Company determines its segments based upon the internal
organization that is used by management to make operating
decisions and assess performance. Based upon this approach, the
Company has three reportable segments: Foodservice Equipment
(Foodservice), Cranes and Related Products (Cranes), and Marine
Operations (Marine).
Information about reportable segments and a reconciliation of total segment
sales and profits to the consolidated totals for the quarters ending March
31, 1999 and 1998 are summarized in Item 2, "Management's Discussion and
Analysis of Financial Condition and Results of Operations", to this report
on Form 10-Q. As of March 31, 1999 and December 31, 1998, the total assets
by segment were as follows:
<TABLE>
<CAPTION>
March 31, 1999 Dec. 31, 1998
------------------- -----------------
<S> <C> <C>
Foodservice $305,673 $254,506
Cranes 175,837 178,470
Marine 11,276 7,023
General corporate 43,469 41,015
----------- -----------
Total $536,255 $481,014
</TABLE>
Note 10. Certain reclassifications have been made to the financial
statements of prior periods to conform to the presentation for
1999.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations for the Quarters Ended March 31, 1999 and March 31,
1998
- ---------------------------------------------------------------------------
Net sales and earnings from operations by business segment for the quarter
ended March 31, 1999 and 1998 are shown below (in thousands):
<TABLE>
<CAPTION>
March 31, 1999 March 31, 1998
------------------------------------------
NET SALES:
<S> <C> <C>
Foodservice equipment $ 84,289 $ 67,007
Cranes and related products 89,430 76,192
Marine 10,470 10,940
----------- ---------
Total $ 184,189 $154,139
EARNINGS (LOSS) FROM OPERATIONS:
Foodservice equipment $ 11,773 9,316
Cranes and related products 13,277 9,762
Marine 2,312 2,305
General corporate expense (2,992) (2,626)
Amortization (1,720) (1,172)
----------- ---------
Total 22,650 17,585
OTHER INCOME (EXPENSE) - NET (2,926) (2,765)
----------- ---------
EARNINGS BEFORE TAXES ON INCOME $ 19,724 $ 14,820
</TABLE>
First quarter net earnings were $12.4 million, equal to 47 cents per share
(diluted), up 33% from the prior-year quarter when the company earned $9.3
million, or 36 cents per share (diluted). Net sales for the first three
months of 1999 totaled $184.2 million, compared with $154.1 million during
the same period the year before, an increase of 20%. The Company's crane
and foodservice equipment segments drove sales and earnings growth for the
quarter. Approximately half of the improvement in sales was driven by the
addition of USTC and MBS in the third quarter of 1998 and in the first
quarter of 1999, respectively. The remaining sales growth was due
primarily to increased volumes in the foodservice segment and the Company's
large crane operation. Most of the improvement in operating earnings for
the quarter was volume related and due to productivity gains in the
Company's large crane, boomtruck, walk-in and reach-in
refrigerator/freezer, and beverage dispenser operations, while the
remaining improvement was due to the Company's new acquisitions.
Foodservice equipment sales were $84.3 million for the quarter, up 26% from
the first quarter of 1998. Operating earnings increased 26% to $11.8
million, from $9.3 million in 1998. Manitowoc Ice sales and profits were up
from the first quarter of last year due to continued enthusiastic demand
for its "Q" Series Ice machines. Kolpak contributed to the increased
profits as a result of continuing strong off-season demand for its products
and improved margins over the first quarter of last year. Additionally,
SerVend contributed to the increase in earnings through strong sales
volumes in the first quarter of 1999.
First quarter sales for the Crane segment were $89.4 million, compared to
$76.2 million for 1998, an increase of 17%. Crane segment operating
earnings were $13.3 million, up 36% from the first quarter last year.
Conexpo, one of the world's largest construction equipment trade shows,
proved to be the highlight of our crane segment in the first quarter of
1999. At the end of March 1999, the crane operations posted a backlog of
more than $163 million - a record for the first quarter. In total, the
segment received orders for more than 30 cranes at the show totaling over
$25 million in sales. Manitowoc Cranes contributed the largest portion of
the increase in sales and earnings for the segment as well as the
additional revenues and earnings from USTC in the first quarter of 1999
versus the same quarter last year.
Marine segment sales and operating earnings for the first quarter were
$10.5 million and $2.3 million, respectively, compared with $10.9 million
and $2.3 million for the same period in 1998. The marine operations are
completing a very successful winter repair season for the U.S.-flagged
Great Lakes fleet. With 18 vessels docked at Sturgeon Bay and 17 vessels
wintering in Toledo and Cleveland, our shipyards serviced nearly half of
the Great Lakes fleet. Work is also beginning on the first hull sections
for the Mobil tank barge contract, which will keep our yards busy during
the traditionally slow summer months.
The effective tax rate for the comparable quarters remained unchanged at 37
percent.
Inventories and accounts receivable rose during the quarter in line with
volume increases and normal seasonal patterns.
Interest expense increased $0.3 million due to the increased debt following
the USTC and MBS acquisitions.
Financial Condition at March 31, 1999
- -----------------------------------------------
The Company's financial condition remains strong. Cash and marketable
securities of $16.1 million and future cash flows from operations are
adequate to meet the Company's liquidity requirements for the foreseeable
future, including payments for long-term debt, line of credit, and
anticipated capital expenditures of between $15-$18 million.
This report on Form 10-Q includes forward-looking statements based on
management's current expectations. Reference is made in particular to the
description of the Company's plans and objectives for future operations,
assumptions underlying such plans and objectives and other forward-looking
statements in this report. Such forward-looking statements generally are
identifiable by words such as "believes," "intends," "estimates," "expects"
and similar expressions.
These statements involve a number of risks and uncertainties and must be
qualified by factors that could cause results to be materially different
from what is presented here. This includes the following factors for each
business: Foodservice Equipment - demographic changes affecting the
number of women in the workforce, general population growth, and household
income; serving large restaurant chains as they expand their global
operations; specialty foodservice market growth; and the demand for
equipment for small kiosk-type locations. Cranes and Related Products -
market acceptance of innovative products; cyclicality in the construction
industry; growth in the world market for heavy cranes; demand for used
equipment in developing countries. Marine - shipping volume fluctuations
based on performance of the steel industry; five-year drydocking schedule;
reducing seasonality through non-marine repair work.
Year 2000 Compliance
- ----------------------------
The Year 2000 (or Y2K) issue is the result of computer systems and software
products that are coded to accept two digits rather than four in their date
code fields to define a year. A Company's computer equipment and software
devices with embedded technology that are time-sensitive may recognize a
date using "00" as the year 1900 rather than 2000. This could result in a
system failure or miscalculations causing disruptions of operations
including, among other things, a temporary inability to process
transactions, send invoices, or engage in other normal business activities.
The Company continues to undertake various initiatives intended to ensure
its computer equipment and software will function properly with respect to
Y2K and beyond. For this purpose, the term "computer equipment and
software" includes systems commonly thought of as Information Technology
(IT) systems - including accounting, data processing and telephone systems
- - as well as those that are not commonly thought of as IT systems - such as
manufacturing equipment, Company products, alarm systems, fax machines or
other miscellaneous systems. Both IT and non-IT systems may contain
embedded technology, which complicates Y2K identification, assessment,
remediation, and testing efforts.
Based upon its identification and assessment efforts through the end of the
first quarter of 1999, the Company is in the process of converting,
modifying, and upgrading its computer equipment and software to be Y2K
compliant, as necessary. In addition, in the ordinary course of replacing
computer equipment and software, the Company attempts to get replacements
that are Y2K compliant. The Company continues to anticipate that its Y2K
identification, assessment, remediation, and testing efforts, which began
in 1996, will be complete by October 1999, and contingency plans will be
developed, as necessary, to address unforseen circumstances prior to the
end of 1999. The Company believes that these efforts will be completed
prior to any currently anticipated impact on its computer equipment and
software. It also does not anticipate any significant disruption to its
normal business operations to achieve this goal. The Company estimates
that as of March 31, 1999, it had completed about 90% of the initiatives
it believes will be necessary to fully address potential Y2K issues.
The Company has made inquiries and gathered information on the Y2K
compliance of its significant vendors, suppliers, dealers and distributors.
This was done in an attempt to determine the extent to which interfaces
with these companies are vulnerable to Y2K issues, and whether the products
and services purchased from or by these companies are Y2K compliant.
During the first quarter of 1999, the Company completed a follow-up mailing
to significant vendors, suppliers, dealers and distributors for newly
acquired companies and for those that did not initially respond, or whose
responses were deemed unsatisfactory by the Company. Although the Company
cannot assure Y2K compliance by its key suppliers, dealers, and
distributors, no major part of critical operation of any Company segment
relies on a single source for raw materials, supplies, or services, and the
Company has multiple distribution channels for most of its products.
Beginning in the second half of 1997, through March 31, 1999, the Company
has spent approximately $4.1 million to upgrade its systems, including Y2K
issues. About $0.2 million was spent in the first quarter of 1999.
Estimated additional costs for system upgrades during the last three
quarters of 1999, including addressing Y2K concerns, will approximate $0.5
million. These expenditures were and will be funded using cash flows from
operations.
The costs of the Company's Y2K conversion efforts and dates by which it
believes these efforts will be completed are based on management's best
estimates. These were developed using many assumptions regarding future
events, including continued availability of certain resources, third-party
remediation plans, and other factors. There can be no assurance that these
estimates will prove to be accurate, and actual results could differ
materially from those currently anticipated.
The Company believes that the Y2K issue will not pose significant
operational problems for it. However, if all Y2K issues are not properly
identified, or assessment, remediation, or testing are not completed for
Y2K problems that are identified, there can be no assurance that the Y2K
issue will not have a material adverse affect on the Company's
relationships with customers, vendors, distributors, and others. In
addition, there can be no assurance that the Y2K issues of other entities
will not have a material adverse impact on the Company's systems or results
of operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
----------------------------------------------------------------------
See Item 7A of the Company's Annual Report on Form 10-K for the year ended
December 31, 1998.
PART II. OTHER INFORMATION
-----------------------------------------------------
Item 6. Exhibits and Reports on Form 8-K
------------------------------------------
a) Exhibits: See exhibit index following the signatures on this
Report, which is incorporated herein by reference.
b) Reports on form 8-K: None.
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.
THE MANITOWOC COMPANY, INC.
(Registrant)
/s/ Robert R. Friedl
------------------------------------
Robert R. Friedl
Senior Vice President and
Chief Financial Officer
/s/ E. Dean Flynn
------------------------------------
E. Dean Flynn
Secretary
May 11, 1999
THE MANITOWOC COMPANY, INC.
EXHIBIT INDEX
TO FORM 10-Q
FOR QUARTERLY PERIOD ENDED
MARCH 31, 1999
Exhibit Filed
No Description Herewith
- ------- ----------- --------
4 * Amended and Restated Credit Agreement, dated X
as of April 6, 1999 among The Manitowoc Co., Inc.,
as Borrower, and Several Lenders, NationsBank, N.A,
as Agent and Fleet Bank, N.A. as Documentation
Agent
27 Financial Data Schedules X
* Pursuant to Item 601(b) (2) of Regulation S-K, the Registrant agrees to
furnish to the Securities and Exchange Commission upon request, a copy of
any unfiled exhibits or schedules to such document.
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AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of April 6, 1999
among
THE MANITOWOC COMPANY, INC.
as Borrower,
CERTAIN SUBSIDIARIES FROM TIME TO TIME
PARTIES HERETO,
as Guarantors,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO
NATIONSBANK, N.A.,
as Agent
and
FLEET BANK, N.A.
as Documentation Agent
TABLE OF CONTENTS
SECTION 1 DEFINITIONS 7
1.1 Definitions. 7
1.2 Other Definitional Provisions. 41
1.3 Accounting Terms and Determinations. 42
SECTION 2 CREDIT FACILITIES 43
2.1 Revolving Loans. 43
2.2 Swingline Loan Subfacility. 46
2.3 Letter of Credit Subfacility. 48
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES 54
3.1 Default Rate. 54
3.2 Extension and Conversion. 54
3.3 Reductions in Commitments and Prepayments. 55
3.4 Fees. 57
3.5 Capital Adequacy. 58
3.6 Inability To Determine Interest Rate. 59
3.7 Illegality. 60
3.8 Requirements of Law. 60
3.9 Taxes. 62
3.10 Indemnity. 66
3.11 Pro Rata Treatment. 67
3.12 Sharing of Payments. 68
3.13 Place and Manner of Payments. 69
3.14 Indemnification; Nature of Issuing Lender's Duties. 70
SECTION 4 GUARANTY 73
4.1 The Guaranty. 73
4.2 Obligations Unconditional. 73
4.3 Reinstatement. 75
4.4 Certain Additional Waivers. 76
4.5 Remedies. 76
4.6 Continuing Guarantee. 76
SECTION 5 CONDITIONS 77
5.1 Conditions to Closing Date. 77
5.2 Conditions to All Extensions of Credit. 79
SECTION 6 REPRESENTATIONS AND WARRANTIES 80
6.1 Financial Condition. 81
6.2 No Change. 81
6.3 Corporate Existence; Compliance with Law. 81
6.4 Corporate Power; Authorization; Enforceable Obligations . 82
6.5 No Legal Bar; No Default. 82
6.6 No Material Litigation. 83
6.7 Investment Company Act. 83
6.8 Federal Regulations. 83
6.9 ERISA. 84
6.10 Environmental Matters. 85
6.11 Use of Proceeds. 86
6.12 Subsidiaries. 86
6.13 Taxes. 87
6.14 Solvency. 87
6.15 Year 2000 Compliance. 88
6.16 Licenses, Permits and Franchises. 88
SECTION 7 AFFIRMATIVE COVENANTS 89
7.1 Financial Statements. 89
7.2 Certificates; Other Information. 90
7.3 Payment of Obligations. 91
7.4 Conduct of Business and Maintenance of Existence. 92
7.5 Maintenance of Property; Insurance. 92
7.6 Inspection of Property; Books and Records; Discussions. 92
7.7 Notices. 93
7.8 Environmental Laws. 94
7.9 Financial Covenants. 95
7.10 Additional Subsidiary Guarantors. 96
7.11 Year 2000 Compatibility. 96
7.12 Amendment of Note Purchase Agreement. 96
SECTION 8 NEGATIVE COVENANTS 97
8.1 Indebtedness. 97
8.2 Liens. 99
8.3 Nature of Business. 100
8.4 Consolidation, Merger, Sale or Purchase of Assets, etc. 100
8.5 Advances, Investments and Loans. 103
8.6 Transactions with Affiliates. 103
8.7 Ownership of Subsidiaries. 103
8.8 Fiscal Year. 103
8.9 Prepayments of Indebtedness, etc. 103
8.10 Dividends. 105
8.11 Foreign Assets. 105
SECTION 9 EVENTS OF DEFAULT 105
SECTION 10 AGENCY PROVISIONS 110
10.1 Appointment. 110
10.2 Delegation of Duties. 111
10.3 Exculpatory Provisions. 112
10.4 Reliance on Communications. 112
10.5 Notice of Default. 113
10.6 Non-Reliance on Agent and Other Lenders. 114
10.7 Indemnification. 114
10.8 Agent in its Individual Capacity. 115
10.9 Successor Agent. 116
SECTION 11 MISCELLANEOUS 117
11.1 Amendments and Waivers. 117
11.2 Notices. 118
11.3 No Waiver; Cumulative Remedies. 120
11.4 Survival of Representations and Warranties. 120
11.5 Payment of Expenses and Taxes. 120
11.6 Successors and Assigns; Participations; Purchasing Lenders. 122
11.7 Adjustments; Set-off. 126
11.8 Table of Contents and Section Headings. 128
11.9 Counterparts. 128
11.10 Severability. 128
11.11 Integration. 129
11.12 Governing Law. 129
11.13 Consent to Jurisdiction and Service of Process. 129
11.14 Confidentiality. 130
11.15 Acknowledgments. 131
11.16 Waivers of Jury Trial. 131
SCHEDULES
Schedule 2.1(a) Schedule of Lenders and Commitments
Schedule 2.1(b)(i) Form of Borrowing Notice for Revolving Loans and Swingline
Loans
Schedule 2.1(e) Form of Revolving Note
Schedule 2.2(d) Form of Swingline Note
Schedule 2.3(a) Existing Letters of Credit
Schedule 3.2 Form of Notice for Conversion/Extension of Revolving Loans
Schedule 3.9 Section 3.9 Certificate
Schedule 5.1(j) Form of Certificate of Secretary of the Borrower
Schedule 6.6 Litigation
Schedule 6.12 Subsidiaries
Schedule 7.10 Form of Joinder Agreement
Schedule 8.1(b) Indebtedness
Schedule 8.2 Existing Liens
Schedule 10.10 Form of Sharing Agreement
Schedule 11.2 Schedule of Lenders and Commitments
Schedule 11.6 Form of Commitment Transfer Supplement
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 6, 1999 (the
"Credit Agreement"), is by and among THE MANITOWOC COMPANY, INC., a Wisconsin
corporation (the "Borrower"), those Subsidiaries identified as a "Guarantor" on
the signature pages hereto and such other Subsidiaries as may from time to time
become a party hereto (the "Guarantors"), the several lenders identified on the
signature pages hereto and such other lenders as may from time to time become a
party hereto (the "Lenders"), and NATIONSBANK, N.A., as agent for the Lenders
(in such capacity, the "Agent") and FLEET BANK, N.A., as documentation agent (in
such capacity, the "Documentation Agent").
W I T N E S S E T H
WHEREAS, a $203,133,860.25 Revolving Credit and Term Loan Facility was
established in favor of the Borrower pursuant to the terms of that Credit
Agreement dated as of October 28, 1997 (as amended and modified, the "Prior
Credit Agreement") among the Borrower, the subsidiaries and affiliates
identified therein, as guarantors, the lenders identified therein, and
NationsBank, N.A., as Agent;
WHEREAS, the Borrower has requested that the credit facility established
pursuant to the Prior Credit Agreement be increased, modified and amended as
provided hereby and that the Prior Credit Agreement be replaced with this Credit
Agreement;
WHEREAS, the Lenders have agreed to make the requested credit facility
available to the Borrower on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Prior Credit Agreement is hereby amended and restated in its
entirety and the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 Definitions.
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"Additional Credit Party" means each Person that becomes a Guarantor after
the Closing Date by execution of a Joinder Agreement in accordance with
Section 7.10.
"Affiliate" means, with respect to any Person, any other Person (i)
directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person or (ii) directly or indirectly
owning or holding five percent (5%) or more of the equity interest in such
Person. For purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agent" means NationsBank, N.A. and any successors and assigns in such
capacity.
"Agent's Fee Letter" means the letter agreement dated as of February 1,
1999 among NationsBank, N.A., NationsBanc Montgomery Securities LLC and the
Borrower, as amended, modified, supplemented or replaced from time to time.
"Agent's Fees" means such term as defined in Section 3.4(d).
"Aggregate Revolving Committed Amount" means the aggregate amount of all
of the Revolving Commitments in effect from time to time.
"Applicable Percentage" means, for any day, the rate per annum set forth
below opposite the applicable Pricing Level then in effect as shown below,
it being understood that the Applicable Percentage for (i) Base Rate Loans
shall be the percentage set forth under the column "Base Rate Loans", (ii)
Eurodollar Loans shall be the percentage set forth under the column
"Eurodollar Loans and Letter of Credit Fee", (iii) the Commitment Fee shall
be the percentage set forth under the column "Commitment Fee", and (iv) the
Letter of Credit Fee shall be the percentage set forth under the column
"Eurodollar Loans and Letter of Credit Fee":
Pricing Consolidated Base Rate Eurodollar Loans
Level Leverage Loans and Commitment
Ratio Letter of Credit Fee
Fee
I >_3.0:1.0 0% 1.000% 0.250%
II <3.0:1.0 but 0% 0.875% 0.225%
>_2.5:1.0
III <2.5:1.0 but 0% 0.750% 0.200%
>_2.0:1.0
IV <2.0:1.0 but 0% 0.625% 0.175%
>_1.5:1.0
V <1.5:1.0 but 0% 0.500% 0.150%
>_1.0:1.0
VI <1.0:1.0 0% 0.375% 0.125%
The Applicable Percentage shall, in each case, be determined and adjusted
quarterly by the Agent as soon as practicable (but in any event within 5
Business Days) after delivery of the annual and quarterly compliance
certificates and related financial information required by Section 7.1(a),
Section 7.1(b) and Section 7.2(b), as appropriate, provided that the date
of determination and adjustment shall not be later than the date 5 Business
Days after the date by which the Borrower is required to provide such
annual and quarterly compliance certificates and related financial
information in accordance with Section 7.1(a), Section 7.1(b) and Section
7.2(b), as appropriate (each an "Interest Determination Date"), based on
the information contained in such annual and quarterly compliance
certificates and related financial information; provided, further, that if
the annual and quarterly compliance certificates and related financial
information required by Section 7.1(a), Section 7.1(b) and Section 7.2(b),
as appropriate, are not delivered to the Agent by the date required in
Section 7.1(a), Section 7.1(b) and Section 7.2(b), as appropriate, the
Applicable Percentages shall be based on Pricing Level I until such time as
the annual and quarterly compliance certificates and related financial
information are delivered to the Agent. Such Applicable Percentage shall
be effective from such Interest Determination Date until the next such
Interest Determination Date. The Agent shall determine the appropriate
Pricing Level promptly upon its receipt of the annual or quarterly
financial information, as appropriate, and promptly notify the Borrower and
the Lenders of any change thereof. Such determinations by the Agent shall
be conclusive absent manifest error. For purposes hereof, the initial
Applicable Percentage shall be set at Pricing Level IV and shall remain at
Pricing Level IV until the Interest Determination Date to occur in
connection with the delivery of the quarterly financial information
required by Section 7.1(b) for the fiscal quarter ending March 31, 1999.
"Base Rate" means, for any day, the rate per annum (rounded upwards, if
necessary, to the nearest whole multiple of 1/100 of 1%) equal to the
greater of (a) the Federal Funds Rate in effect on such day plus 1/2 of 1%
or (b) the Prime Rate in effect on such day. If for any reason the Agent
shall have determined (which determination shall be conclusive absent
manifest error) that it is unable after due inquiry to ascertain the
Federal Funds Rate for any reason, including the inability or failure of
the Agent to obtain sufficient quotations in accordance with the terms
hereof, the Base Rate shall be determined without regard to clause (a) of
the first sentence of this definition until the circumstances giving rise
to such inability no longer exist. Any change in the Base Rate due to a
change in the Prime Rate or the Federal Funds Rate shall be effective on
the effective date of such change in the Prime Rate or the Federal Funds
Rate, respectively.
"Base Rate Loan" means any Loan bearing interest at a rate determined by
reference to the Base Rate.
"Borrower" means the Person identified as such in the heading hereof,
together with any successors and permitted assigns.
"Borrowing Date" means in respect of any Loan, the date such Loan is made.
"Business" means such term as defined in Section 6.10(b).
"Business Day" means a day other than a Saturday, Sunday or other day on
which commercial banks in Charlotte, North Carolina, Chicago, Illinois or
Manitowoc, Wisconsin are authorized or required by law to close, except
that, when used in connection with a rate determination, borrowing or
payment in respect of a Eurodollar Loan, such day shall also be a day on
which dealings between banks are carried on in U.S. dollar deposits in
London, England.
"Capital Lease" means any lease of property, real or personal, the
obligations with respect to which are required to be capitalized on a
balance sheet of the lessee in accordance with GAAP.
"Capital Lease Obligations" means the capital lease obligations relating
to a Capital Lease determined in accordance with GAAP.
"Cash Equivalents" means (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof) having maturities
of not more than twelve months from the date of acquisition, (b) U.S.
dollar denominated time deposits and certificates of deposit of (i) any
Lender, (ii) any domestic commercial bank of recognized standing having
capital and surplus in excess of $500,000,000 or (iii) any bank whose
short-term commercial paper rating from S&P is at least A-1 or the
equivalent thereof or from Moody's is at least P-1 or the equivalent
thereof (any such bank being an "Approved Bank"), in each case with
maturities of not more than 364 days from the date of acquisition, (c)
commercial paper and variable or fixed rate notes issued by any Approved
Bank (or by the parent company thereof) or any variable or fixed rate notes
issued by, or guaranteed by, any domestic corporation rated A-1 (or the
equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or
better by Moody's and maturing within six months of the date of
acquisition, (d) repurchase agreements with a bank or trust company
(including any of the Lenders) or recognized securities dealer having
capital and surplus in excess of $500,000,000 for direct obligations issued
by or fully guaranteed by the United States of America in which the
Borrower shall have a perfected first priority security interest (subject
to no other Liens) and having, on the date of purchase thereof, a fair
market value of at least 100% of the amount of the repurchase obligations,
(e) obligations of any State of the United States or any political
subdivision thereof, the interest with respect to which is exempt from
federal income taxation under Section 103 of the Code, having a long term
rating of at least Aa-3 or AA- by Moody's or S&P, respectively, (f)
Investments in municipal auction preferred stock (i) rated AAA (or the
equivalent thereof) or better by S&P or Aaa (or the equivalent thereof) or
better by Moody's and (ii) with dividends that reset at least once every
365 days and (g) investments, classified in accordance with GAAP as current
assets, in money market investment programs registered under the Investment
Company Act of 1940, as amended, which are administered by reputable
financial institutions having capital of at least $100,000,000 and the
portfolios of which are limited to investments of the character described
in the foregoing subdivisions (a) through (f).
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment" means the Revolving Commitment and the LOC Commitment,
individually or collectively, as appropriate.
"Commitment Fee" means such term as defined in Section 3.4(a).
"Commitment Percentage" means the Revolving Commitment Percentage and/or
the LOC Commitment Percentage, as appropriate.
"Commitment Period" means the period from and including the Closing Date
to but not including the Termination Date.
"Commitment Transfer Supplement" means a Commitment Transfer Supplement,
substantially in the form of Schedule 11.6(c).
"Commonly Controlled Entity" means an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of
Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.
"Consolidated EBITDA" means, for any period, the sum of (i) Consolidated
Net Income plus (ii) to the extent deducted in determining net income, (A)
Consolidated Interest Expense, (B) all provisions for any Federal, state or
other income taxes and (C) depreciation, amortization and other non-cash
charges, in each case for the Borrower and its Subsidiaries on a
consolidated basis, determined in accordance with GAAP applied on a
consistent basis. Except as expressly provided otherwise, the applicable
period shall be for the four consecutive quarters ending as of the date of
determination.
"Consolidated Funded Debt" means Funded Debt of the Borrower and its
Subsidiaries on a consolidated basis determined in accordance with GAAP
applied on a consistent basis.
"Consolidated Interest Coverage Ratio" means, as of the last day of any
fiscal quarter for the period of four consecutive fiscal quarters ending as
of such day, the ratio of Consolidated EBITDA to Consolidated Interest
Expense.
"Consolidated Interest Expense" means for any period, all interest
expense, including the amortization of debt discount and premium and the
interest component under Capital Leases for the Borrower and its
Subsidiaries on a consolidated basis determined in accordance with GAAP
applied on a consistent basis. The applicable period shall be for the four
consecutive quarters ending as of the date of determination.
"Consolidated Leverage Ratio" means, as of the last day of any fiscal
quarter, the ratio of Consolidated Funded Debt on such day to Consolidated
EBITDA for the period of four consecutive fiscal quarters ending as of such
day.
"Consolidated Net Income" means for any period, the net income of the
Borrower and its Subsidiaries on a consolidated basis determined in
accordance with GAAP applied on a consistent basis, but excluding for
purposes of determining the Consolidated Leverage Ratio and the
Consolidated Interest Coverage Ratio any extraordinary gains or losses, and
any taxes on such excluded gains and any tax deductions or credits on
account of any such excluded losses. The applicable period shall be for
the four consecutive quarters ending as of the date of computation.
"Consolidated Net Worth" means total stockholders' equity of the Borrower
and its Subsidiaries on a consolidated basis as determined in accordance
with GAAP applied on a consistent basis.
"Consolidated Tangible Assets" means for the Borrower and its Subsidiaries
on a consolidated basis, total assets minus goodwill, patents, trade names,
trademarks, copyrights, franchises, experimental expense, organizational
expense, unamortized debt discount and expense, deferred assets (other than
prepaid insurance and prepaid taxes), and such other assets as are properly
classified as "intangible assets" in accordance with GAAP.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Credit Documents" means this Credit Agreement, the Notes, any Joinder
Agreement, the Agent's Fee Letter, and all other related agreements and
documents issued or delivered hereunder or thereunder or pursuant hereto or
thereto.
"Credit Party" means any of the Borrower and the Guarantors.
"Credit Party Obligations" means, without duplication, (i) all of the
obligations of the Borrower and the other Credit Parties to the Lenders,
the Agent, the Documentation Agent and the Issuing Lender (including the
obligations to pay principal of and interest on the Loans, to pay LOC
Obligations, to pay all Fees, to provide cash collateral in respect of
Letters of Credit, to pay certain expenses and the obligations arising in
connection with various indemnities) whenever arising, under this Credit
Agreement, the Notes or any other of the Credit Documents to which the
Borrower or any other Credit Party is a party (including, but not limited
to, all interest accruing from and after the commencement of any case,
proceeding or action under any existing or future laws relating to
bankruptcy or insolvency with respect to the Borrower, regardless of
whether such interest is an allowed claim under the Bankruptcy Code in
Title 11 of the United States Code), and (ii) all liabilities and
obligations whenever arising, owing by the Borrower to any Lender or any
affiliate of a Lender arising, under any interest rate protection agreement
or foreign currency exchange agreement permitted hereunder.
"Debt Transaction" means any sale, issuance or placement of Indebtedness
for borrowed money, including senior or subordinated debt, whether or not
evidenced by promissory note or other written evidence of indebtedness, of
the Borrower or any of its Subsidiaries, except for Indebtedness permitted
to be incurred pursuant to Section 8.1.
"Default" means any event, act or condition which with notice or lapse of
time, or both, would constitute an Event of Default.
"Defaulting Lender" means at any time, any Lender that, at such time (a)
has failed to make a Loan or advance required pursuant to the terms of this
Credit Agreement, including the funding of a Participation Interest in
accordance with the terms hereof, (b) has failed to pay to the Agent or any
Lender an amount owed by such Lender pursuant to the terms of this Credit
Agreement, or (c) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or to a receiver, trustee or similar
official.
"Documentation Agent" means Fleet Bank, N.A. and any successors and
assigns in such capacity.
"Dollars" and "$" means dollars in lawful currency of the United States of
America.
"Domestic Credit Party" means any Credit Party that is organized and
existing under the laws of the United States or any state or commonwealth
thereof or under the laws of the District of Columbia.
"Domestic Lending Office" means the office or branch of the Lender
identified on Schedule 11.2, or such other office or branch as the Lender
may identify by written notice to the Borrower and the Agent.
"Domestic Subsidiary" means any Subsidiary that is organized and existing
under the laws of the United States or any state or commonwealth thereof or
under the laws of the District of Columbia.
"Eligible Transferee" means and includes a commercial bank, financial
institution or other "accredited investor" (as defined in Regulation D of
the Securities Act of 1933, as amended).
"Environmental Laws" means any and all applicable foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority or other
Requirement of Law (including common law) regulating, relating to or
imposing liability or standards of conduct concerning protection of human
health or the environment, as now or may at any time be in effect during
the term of this Credit Agreement.
"Equity Transaction" means any issuance by the Borrower or any of its
Subsidiaries of (i) shares of its capital stock, (ii) any shares of its
capital stock pursuant to the exercise of options or warrants or (iii) any
shares of its capital stock pursuant to the conversion of any debt
securities to equity; provided, however, "Equity Transaction" shall not
include any such transactions described in this definition which result in
proceeds of less than $500,000 during any fiscal year.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and the rulings
issued thereunder.
"Eurodollar Lending Office" means the office or branch of the Lender
identified on Schedule 11.2, or such other office or branch as the Lender
may identify by written notice to the Borrower and the Agent.
"Eurodollar Loan" means any Loan bearing interest at a rate determined by
reference to the Eurodollar Rate.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar Loan
comprising part of the same borrowing (including conversions, extensions
and renewals), a per annum interest rate determined pursuant to the
following formula:
Eurodollar Rate = Interbank Offered Rate
-------------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means for any day, that percentage
(expressed as a decimal) which is in effect from time to time under
Regulation D of the Board of Governors of the Federal Reserve System (or
any successor), as such regulation may be amended from time to time or any
successor regulation, as the maximum reserve requirement (including,
without limitation, any basic, supplemental, emergency, special, or
marginal reserves) applicable with respect to Eurocurrency liabilities as
that term is defined in Regulation D (or against any other category of
liabilities that includes deposits by reference to which the interest rate
of Eurodollar Loans is determined), whether or not Lender has any
Eurocurrency liabilities subject to such reserve requirement at that time.
Eurodollar Loans shall be deemed to constitute Eurocurrency liabilities and
as such shall be deemed subject to reserve requirements without benefits of
credits for proration, exceptions or offsets that may be available from
time to time to a Lender. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage. The parties hereto acknowledge and agree
that, as of the Closing Date, the Eurodollar Reserve Percentage is zero
(0).
"Event of Default" means such term as defined in Section 9.
"Existing Letters of Credit" means those Letters of Credit outstanding on
the Closing Date and identified on Schedule 2.3(a).
"Extension of Credit" means as to any Lender, the making of a Loan by such
Lender or the issuance of, or participation in, a Letter of Credit by such
Lender.
"Federal Funds Rate" means, for any day, the rate of interest per annum
(rounded upwards, if necessary, to the nearest whole multiple of 1/100 of
1%) equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published by the Federal Reserve Bank of New
York on the Business Day next succeeding such day, provided that (A) if
such day is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day and
(B) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate quoted to the
Agent on such day on such transactions as determined by the Agent.
"Fee" means any fee payable pursuant to Section 3.4.
"Foreign Subsidiary" means any Subsidiary that is not organized and
existing under the laws of the United States or any state or commonwealth
thereof or under the laws of the District of Columbia.
"Funded Debt" means, for any Person, without duplication, (i) all
Indebtedness of such Person for borrowed money (including without
limitation, indebtedness evidenced by promissory notes, bonds, debentures
and similar instruments and further any portion of the purchase price for
assets or acquisitions permitted hereunder which may be financed by the
seller and Guarantee Obligations by such Person of Funded Debt of Other
Persons), (ii) all purchase money Indebtedness of such Person, (iii) the
principal portion of Capital Lease Obligations, (iv) the maximum amount
available to be drawn under standby letters of credit and bankers'
acceptances issued or created for the account of such Person, (v) all
preferred stock issued by such Person and required by the terms thereto to
be redeemed, or for which mandatory sinking fund payments are due, by a
fixed date, and (vi) the aggregate amount of uncollected accounts
receivable of such Person subject at such time to a sale of receivables (or
other similar transaction) regardless of whether such transaction is
effected without recourse to such Person or in a manner which would not be
reflected on the balance sheet of such Person in accordance with GAAP.
Funded Debt shall include payments in respect of Funded Debt which
constitute current liabilities of the obligor under GAAP. For purposes
hereof, Funded Debt shall not include Subordinated Debt or intercompany
Indebtedness owing by a Credit Party to another Credit Party.
"GAAP" means generally accepted accounting principles in effect in the
United States of America applied on a consistent basis, subject, however,
in the case of determination of compliance with the financial covenants set
out in Section 7.9 to the provisions of Section 1.3.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantee Obligation" means, as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of credit)
to induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "primary obligations") of any other third Person
(the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include endorsements
of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the stated
or determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee
Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in
good faith.
"Guarantor" means those Subsidiaries of the Borrower identified as a
"Guarantor" on the signature pages hereto, and each Additional Credit Party
which has executed a Joinder Agreement, together with their successors and
permitted assigns.
"Guaranty" means the guaranty of the Guarantors set forth in Section 4.
"Indebtedness" means, of any Person at any date, (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of
property or services (other than current trade liabilities incurred in the
ordinary course of business and payable in accordance with customary
practices), (b) any other indebtedness of such Person which is evidenced
by a note, bond, debenture or similar instrument, (c) all obligations of
such Person under Capital Leases, (d) all obligations of such Person in
respect of acceptances issued or created for the account of such Person,
(e) all liabilities secured by any Lien on any property owned by such
Person even though such Person has not assumed or otherwise become liable
for the payment thereof, (f) all obligations of such Person under
conditional sale or other title retention agreements relating to property
purchased by such Person (other than customary reservations or retentions
of title under agreements with suppliers entered into in the ordinary
course of business), (g) all obligations of such Person under take-or-pay
or similar arrangements or under commodities agreements, (h) all Guarantee
Obligations of such Person, (i) all obligations of such Person in respect
of interest rate protection agreements, foreign currency exchange
agreements, commodity purchase or option agreements or other interest or
exchange rate or commodity price hedging agreements, (j) the maximum amount
of all letters of credit issued or bankers' acceptances created for the
account of such Person and, without duplication, all drafts drawn
thereunder (to the extent not theretofore reimbursed), (k) all preferred
stock issued by such Person and required by the terms thereto to be
redeemed, or for which mandatory sinking fund payments are due, by a fixed
date, (l) all other obligations which would be shown as a liability on the
balance sheet of such Person and (m) the aggregate amount of uncollected
accounts receivable of such Person subject at such time to a sale of
receivables (or other similar transaction) regardless of whether such
transaction is effected without recourse to such Person or in a manner
which would not be reflected on the balance sheet of such Person in
accordance with GAAP; but specifically excluding from the foregoing trade
payables and other expenses and reserves (whether classified as long term
or short term) arising or incurred in the ordinary course of business. For
purposes hereof, Indebtedness shall include Indebtedness of any partnership
in which such Person is a general partner (except for any such Indebtedness
with respect to which the holder is limited to the assets of such
partnership or joint venture).
"Insolvency" means with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of such term as used in
Section 4245 of ERISA.
"Insolvent" means pertaining to a condition of Insolvency.
"Interbank Offered Rate" means, with respect to any Eurodollar Loan for
the Interest Period applicable thereto, the average (rounded upward to the
nearest one-sixteenth (1/16) of one percent) per annum rate of interest
determined by the office of the Agent (each such determination to be
conclusive and binding absent manifest error) as of two Business Days prior
to the first day of such Interest Period, as the effective rate at which
deposits in immediately available funds in U.S. dollars are being, have
been, or would be offered or quoted by the Agent to major banks in the
applicable interbank market for Eurodollar deposits at such time as the
Agent may determine during the Business Day which is the second Business
Day immediately preceding the first day of such Interest Period, for a term
comparable to such Interest Period and in the amount of the requested
Eurodollar Loan. If no such offers or quotes are generally available for
such amount, then the Agent shall be entitled to determine the Eurodollar
Rate by estimating in its reasonable judgment the per annum rate (as
described above) that would be applicable if such quote or offers were
generally available.
"Interest Payment Date" means (a) as to any Base Rate Loan, the last day
of each March, June, September and December and the Termination Date, (b)
as to any Swingline Loan, such day as may be mutually agreed upon by the
Borrower and the Swingline Lender, but not less frequently than once a
quarter, (c) as to any Eurodollar Loan having an Interest Period of three
months or less, the last day of such Interest Period, and (d) as to any
Eurodollar Loan having an Interest Period longer than three months, each
day which is three months after the first day of such Interest Period and
the last day of such Interest Period. Whenever any Interest Payment Date
shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day (subject
to accrual of interest and Fees for the period of such extension), except
that in the case of Eurodollar Loans, if the extension would cause the
payment to be made in the next following calendar month, then such payment
shall instead be made on the next preceding Business Day as provided in
Section 3.13.
"Interest Period" means with respect to any Eurodollar Loan,
(i) initially, the period commencing on the Borrowing Date or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three or six months thereafter, as selected
by the Borrower in the notice of borrowing or notice of conversion
given with respect thereto; and
(ii) thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such Eurodollar
Loan and ending one, two, three or six months thereafter, as selected
by the Borrower by irrevocable notice to the Agent not less than three
Business Days prior to the last day of the then current Interest
Period with respect thereto;
provided that the foregoing provisions are subject to the following:
(A) if any Interest Period pertaining to a Eurodollar Loan would
otherwise end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless
the result of such extension would be to carry such Interest Period
into another calendar month in which event such Interest Period shall
end on the immediately preceding Business Day;
(B) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of the relevant calendar month;
(C) if the Borrower shall fail to give notice as provided above,
the Borrower shall be deemed to have selected a Base Rate Loan to
replace the affected Eurodollar Loan;
(D) any Interest Period that would otherwise extend beyond the
Termination Date shall end on the Termination Date; and
(E) no more than 20 Eurodollar Loans may be in effect at any
time. For purposes hereof, Eurodollar Loans with different Interest
Periods shall be considered as separate Eurodollar Loans, even if they
shall begin on the same date and have the same duration, although
borrowings, extensions and conversions may, in accordance with the
provisions hereof, be combined at the end of existing Interest Periods
to constitute a new Eurodollar Loan with a single Interest Period.
"Interest Protection Agreement" means an interest rate swap or other
interest rate protection agreement or interest rate future, option, cap,
collar or other hedging arrangement.
"Issuing Lender" means as to the Existing Letters of Credit, the Issuing
Lenders identified on Schedule 2.4(a), and as to Letters of Credit issued
after the Closing Date, NationsBank, The Northern Trust Company and PNC
Bank, National Association, as the Borrower may elect.
"Issuing Lender Fees" means such term as defined in Section 3.4(c).
"Joinder Agreement" means a Joinder Agreement substantially in the form of
Schedule 7.10, executed and delivered by an Additional Credit Party in
accordance with the provisions of Section 7.10.
"Kyees Acquisition" means the acquisition by the Borrower of all of the
capital stock of Kyees Aluminum, Inc. and the related acquisition of all of
the assets of Foamless Dispensing Systems, Inc. for an aggregate purchase
price of up to $28 million.
"Lenders" means each of the Persons identified as a "Lender" on the
signature pages hereto, and each Person which may become a Lender by way of
assignment in accordance with the terms hereof, together with their
successors and permitted assigns.
"Letter of Credit" means any Existing Letter of Credit and any letter of
credit issued for the account of a Credit Party by an Issuing Lender as
provided in Section 2.4, as such letter of credit may be amended,
supplemented, extended or otherwise modified from time to time.
"Letter of Credit Fees" means such term as defined in Section 3.4(b).
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind (including any agreement to give
any of the foregoing, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the
Uniform Commercial Code as adopted and in effect in the relevant
jurisdiction or other similar recording or notice statute, and any lease in
the nature thereof).
"Loan" means a Revolving Loan and/or a Swingline Loan, as appropriate.
"LOC Commitment" means the commitment of the Issuing Lender to issue
Letters of Credit and with respect to each Lender, the commitment of such
Lender to purchase participation interests in the Letters of Credit up to
such Lender's LOC Committed Amount as specified in Schedule 2.1(a) (subject
to adjustment on account of assignment pursuant to the provisions of
Section 11.6(c) hereof), as such amount may be reduced from time to time in
accordance with the provisions hereof.
"LOC Commitment Percentage" means for each Lender, the percentage
identified as its LOC Commitment Percentage on Schedule 2.1(a), as such
percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 11.6(c).
"LOC Committed Amount" means, collectively, the aggregate amount of all of
the LOC Commitments of the Lenders to issue and participate in Letters of
Credit as referenced in Section 2.4 and, individually, the amount of each
Lender's LOC Commitment as specified in Schedule 2.1(a) (subject to
adjustment on account of assignment pursuant to the provisions of Section
11.6(c) hereof).
"LOC Documents" means with respect to any Letter of Credit, such Letter of
Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments,
guarantees or other documents (whether general in application or applicable
only to such Letter of Credit) governing or providing for (i) the rights
and obligations of the parties concerned or (ii) any collateral security
for such obligations.
"LOC Obligations" means, at any time, the sum of (i) the maximum amount
which is, or at any time thereafter may become, available to be drawn under
Letters of Credit then outstanding, assuming compliance with all
requirements for drawings referred to in such Letters of Credit plus (ii)
the aggregate amount of all drawings under Letters of Credit honored by the
Issuing Lender but not theretofore reimbursed.
"Mandatory Borrowing" means such term as defined in Section 2.2(b)(ii) or
Section 2.3(e).
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, property, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole, (b) the
ability of the Borrower or the other Credit Parties to perform their
obligations, when such obligations are required to be performed, under this
Credit Agreement or any of the other Credit Documents or (c) the validity
or enforceability of this Credit Agreement, any of the Notes or any of the
other Credit Documents or the rights or remedies of the Agent or the
Lenders hereunder or thereunder.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"Moody's" means Moody's Investors Service, Inc., or any successor or
assignee of the business of such company in the business of rating
securities.
"Multiemployer Plan" means a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"NationsBank" means NationsBank, N.A. and its successors.
"Net Proceeds" means the gross cash proceeds (including cash by way of
deferred payment pursuant to a promissory note, receivable or otherwise,
but only as and when received) received from the sale, lease, conveyance,
disposition or other transfer of assets, or from a Recovery Event or from
the sale, issuance or placement of equity securities, Indebtedness for
borrowed money or Subordinated Debt to or from a Person other than a Credit
Party, net of (i) transaction costs payable to third parties, (ii) the
estimated taxes payable with respect to such proceeds (including, without
duplication, withholding taxes), (iii) Indebtedness (other than
Indebtedness of the Lenders pursuant to the Credit Documents) which is
secured by the assets which are the subject of such event to the extent
such Indebtedness is paid with a portion of the proceeds therefrom, and
(iv) any and all cash costs which may occur as a result of discontinuing
operations, shut-downs or otherwise resulting from, the disposition of such
assets.
"Non-Excluded Taxes" means such term as is defined in Section 3.9.
"Non-Guarantor Domestic Subsidiaries" means such term as defined in
Section 7.10.
"Note" or "Notes" means the Revolving Notes and/or the Swingline Note,
collectively, separately or individually, as appropriate.
"Note Purchase and Private Shelf Agreement" means that Note Purchase and
Private Shelf Agreement dated as of April 2, 1998 between the Borrower, as
issuer, and The Prudential Insurance Company of America, as initial purchaser of
the Series A Senior Notes.
"Notice of Borrowing" means the written notice of borrowing as referenced
and defined in Section 2.1(b)(i) or 2.2(b)(i), as appropriate.
"Notice of Extension/Conversion" means the written notice of extension or
conversion as referenced and defined in Section 3.2.
"Obligations" means collectively, Loans and LOC Obligations.
"Participants" means such term as defined in Section 11.6.
"Participation Interest" means the purchase by a Lender of a participation
interest in Swingline Loans as provided in Section 2.2(b)(ii) or in Letters
of Credit as provided in Section 2.3.
"PBGC" means the Pension Benefit Guaranty Corporation established under
ERISA, and any successor thereto.
"Permitted Investments" means (i) cash and Cash Equivalents, (ii)
receivables owing to the Borrower or any of its Subsidiaries or any
receivables and advances to suppliers, in each case if created, acquired or
made in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms, (iii) investments in and to a
Domestic Credit Party, (iv) loans and advances to officers, directors and
employees in an aggregate amount not to exceed $500,000 at any time
outstanding, (v) investments (including debt obligations) received in
connection with the bankruptcy or reorganization of suppliers and customers
and in settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business, (vi)
investments, acquisitions or transactions permitted under Section 8.4(b),
(vii) with respect to any Subsidiary that is a Foreign Subsidiary, loans,
advances and/or investments (A) in and to Foreign Subsidiaries (subject,
however, to the provisions of Section 8.11) and (B) by such Foreign
Subsidiary to or in other foreign Persons, whether denominated in Dollars
or otherwise, (viii) with respect to any pension trust maintained for the
benefit of any present or former employees of the Borrower or any
Subsidiary, such loans, advances and/or investments as the trustee or
administrator of the trust shall deem advisable pursuant to the terms of
such trust, and (ix) additional loan advances and/or investments of a
nature not contemplated by the foregoing clauses hereof, provided that such
loans, advances and/or investments made pursuant to this clause (ix) shall
not exceed an aggregate amount of $50 million. As used herein,
"investment" means all investments, in cash or by delivery of property
made, directly or indirectly in, to or from any Person, whether by
acquisition of shares of capital stock, property, assets, indebtedness or
other obligations or securities or by loan advance, capital contribution or
otherwise.
"Permitted Liens" means
(i) Liens in favor of the Agent on behalf of the Lenders;
(ii) Liens in favor of a Lender hereunder as the provider of interest
rate protection relating to the Loans hereunder, but only (A) to the extent
such Liens secure obligations under such interest rate protection
agreements permitted under Section 8.1, (B) to the extent such Liens are on
the same collateral as to which the Lenders also have a Lien and (C) if
such provider and the Lenders shall share pari passu in the collateral
subject to such Liens;
(iii) purchase money Liens securing purchase money indebtedness (and
refinancings thereof) to the extent permitted under Section 8.1(c);
(iv) Liens for taxes, assessments, charges or other governmental
levies not yet due or as to which the period of grace (not to exceed 60
days), if any, related thereto has not expired or which are being contested
in good faith by appropriate proceedings, provided that adequate reserves
with respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP (or, in the case
of Subsidiaries with significant operations outside of the United States of
America, generally accepted accounting principles in effect from time to
time in their respective jurisdictions of incorporation);
(v) carriers', warehousemen's, mechanics', materialmen's, repairmen's or
other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 60 days or which are being contested in
good faith by appropriate proceedings;
(vi) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(vii) deposits to secure the performance of bids, trade contracts,
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(viii) any extension, renewal or replacement (or successive extensions,
renewals or replacements) , in whole or in part, of any Lien referred to in
the foregoing clauses; provided that such extension, renewal or replacement
Lien shall be limited to all or a part of the property which secured the
Lien so extended, renewed or replaced (plus improvements on such property);
(ix) easements, rights of way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not material in amount and which do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any Subsidiary;
(x) Liens in existence on the date hereof listed on Schedule 8.2, securing
Indebtedness permitted by Section 8.1(b), provided that no such Lien is
spread to cover any additional property (other than proceeds of the
collateral originally subject to such Lien in accordance with the
instrument creating such Lien) after the Closing Date and that the amount
of Indebtedness secured thereby is not increased;
(xi) Liens on the property or assets of a corporation which becomes a
Subsidiary after the Closing Date securing Indebtedness permitted by
Section 8.1(i), provided that (A) such Liens existed at the time such
corporation became a Subsidiary and were not created in anticipation
thereof, and (B) no such Lien is spread to cover any additional property
(other than proceeds of the collateral originally subject to such Lien in
accordance with the instrument creating such Lien) after the Closing Date
and that the amount of Indebtedness secured thereby is not increased;
(xii) Liens in the nature of licenses that arise in the ordinary course
of business and consistent with past practice;
(xiii) Liens incurred in connection with Indebtedness permitted by
Section 8.1(h), provided that no such Lien shall be spread to cover any
additional property after the Closing Date and the amount of Indebtedness
secured thereby shall not be increased;
(xiv) leases and subleases otherwise permitted hereunder granted to
others not interfering in any material respect in the business of the
Borrower or any Subsidiary;
(xv) attachment or judgment Liens, where the attachment or judgment
which gave rise to such Liens does not constitute an Event of Default
hereunder; and
(xvi) Liens created or deemed to exist in connection with a factoring
financing permitted under Section 8.1(j) (including related filings of financing
statements), but only to the extent that any such Lien relates to the applicable
accounts, receivables and related property sold, contributed or otherwise
conveyed pursuant to such transaction.
"Permitted Sale-Leaseback Transaction" means a transaction pursuant to
which a Credit Party sells an item of equipment to a financial institution
and concurrently with such sale (i) leases such item of equipment back from
such financial institution and (ii) subleases such item of equipment to a
customer of the Credit Party pursuant to a sublease agreement under which
such customer obtains an option to purchase such item of equipment at or
before the end of such sublease.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other
enterprise (whether or not incorporated) or any Governmental Authority.
"Plan" means at any particular time, any employee benefit plan which is
covered by Title IV of ERISA and in respect of which the Borrower or a
Commonly Controlled Entity is (or, if such plan were terminated at such
time, would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Prime Rate" means the per annum rate of interest established from time to
time by the Agent at its principal office in Charlotte, North Carolina as
its Prime Rate. Any change in the interest rate resulting from a change in
the Prime Rate shall become effective as of 12:01 a.m. of the Business Day
on which each change in the Prime Rate is announced by the Agent. The
Prime Rate is a reference rate used by the Agent in determining interest
rates on certain loans and is not intended to be the lowest rate of
interest charged on any extension of credit to any debtor.
"Pro Forma Basis" means, with respect to any transaction, that such
transaction shall be deemed to have occurred as of the first day of the
four-fiscal quarter period ending as of the end of the fiscal quarter most
recently ended prior to the date of such transaction with respect to which
the Agent has received the financial information required under Section
7.1. As used herein, "transaction" means any merger, consolidation or
acquisition as referenced in Section 8.4(c).
"Properties" means such term as defined in subsection 6.10(a).
"Purchasing Lender" means such term as defined in Section 11.6(c).
"Recovery Event" means the receipt by the Borrower or any of its
Subsidiaries of any cash insurance proceeds or condemnation award payable
by reason of theft, loss, physical destruction or damage, taking or similar
event with respect to any of their respective property or assets.
"Register" means such term as defined in Section 11.6(d).
"Reorganization" means with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of such
term as used in Section 4241 of ERISA.
"Reportable Event" means any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty-day notice period is
waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg.
Section2615.
"Required Lenders" means Lenders holding in the aggregate at least 51% of
the sum of (i) all Obligations then outstanding at such time and (ii) the
aggregate unused Commitments at such time (treating for purposes hereof in
the case of Swingline Loans and LOC Obligations, in the case of the
Swingline Lender and the Issuing Lender, only the portion of the Swingline
Loans and the LOC Obligations of the Swingline Lender and the Issuing
Lender, respectively, which is not subject to the Participation Interests
of the other Lenders and, in the case of the Lenders other than the
Swingline Lender and the Issuing Lender, the Participation Interests of
such Lenders in Swingline Loans and LOC Obligations hereunder as direct
Obligations); provided, however, that if any Lender shall be a Defaulting
Lender at such time, then there shall be excluded from the determination of
Required Lenders the Obligations (including Participation Interests) of
such Defaulting Lender and such Defaulting Lender's Commitments, or after
termination of the Commitments, the principal balance of the Obligations
owing to such Defaulting Lender.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or to which any of its material
property is subject.
"Revolving Commitment" means with respect to each Lender, the commitment
of such Lender to make Revolving Loans in an aggregate principal amount at
any time outstanding up to such Lender's Revolving Committed Amount as
specified in Schedule 2.1(a) (subject to adjustment on account of
assignment pursuant to the provisions of Section 11.6(c) hereof), as such
amount may be reduced from time to time in accordance with the provisions
hereof.
"Revolving Commitment Percentage" means for each Lender, the percentage
identified as its Revolving Commitment Percentage on Schedule 2.1(a), as
such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 11.6(c).
"Revolving Committed Amount" means collectively, the aggregate amount of
all of the Revolving Commitments as referenced in Section 2.1(a) and,
individually, the amount of each Lender's Revolving Commitment as specified
in Schedule 2.1(a) (subject to adjustment on account of assignment pursuant
to the provisions of Section 11.6(c) hereof).
"Revolving Loans" means as defined in Section 2.1.
"Revolving Note" or "Revolving Notes" means the promissory notes of the
Borrower in favor of each of the Lenders evidencing the Revolving Loans
provided pursuant to Section 2.1(e), individually or collectively, as
appropriate, as such promissory notes may be amended, modified,
supplemented, extended, renewed or replaced from time to time.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc., or any successor or assignee of the business of such division in the
business of rating securities.
"Senior Noteholders" means the holders of the Series A Senior Notes and
the Shelf Notes.
"Series A Senior Notes" means those 6.54% Series A Senior Notes of the
Borrower due April 2, 2010 issued pursuant to the Note Purchase and Private
Shelf Agreement.
"Shelf Notes" means those Shelf Notes of the Borrower referenced and
defined in that Note Purchase and Private Shelf Agreement.
"Single Employer Plan" means any Plan which is not a Multi-Employer Plan.
"Solvent" means, with respect to any Credit Party as of a particular date,
that on such date (i) such Credit Party is able to realize upon its assets
and pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (ii) such
Credit Party does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Credit Party's ability to pay as such
debts and liabilities mature in their ordinary course, (iii) such Credit
Party is not engaged in a business or a transaction, and is not about to
engage in a business or a transaction, for which such Credit Party's
property would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which such
Credit Party is engaged or is to engage, (vi) the fair value of the
property of such Credit Party is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of such
Credit Party and (v) the present fair saleable value of the assets of such
Credit Party is not less than the amount that will be required to pay the
probable liability of such Credit Party on its debts as they become
absolute and matured. In computing the amount of contingent liabilities at
any time, it is intended that such liabilities will be computed at the
amount which, in light of all the facts and circumstances existing at such
time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"Specified Sales" means (i) the sale, transfer, lease or other disposition
of inventory and materials in the ordinary course of business, and (ii) the
sale, transfer, lease or other disposition of machinery, parts, equipment
and real estate no longer useful in the conduct of the business of the
Borrower or any of its Subsidiaries, as appropriate.
"Subordinated Debt" means such term as defined in Section 8.9.
"Subsidiary" means, as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through
one or more intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Credit Agreement shall refer to a Subsidiary or Subsidiaries of the
Borrower.
"Swingline Commitment" means the commitment of the Swingline Lender to
make Swingline Loans in an aggregate principal amount at any time
outstanding up to the Swingline Committed Amount, and the commitment of the
Lenders to purchase participation interests in the Swingline Loans as
provided in Section 2.2(b)(ii), as such amounts may be reduced from time to
time in accordance with the provisions hereof.
"Swingline Committed Amount" means the amount of the Swingline Lender's
Swingline Commitment as specified in Section 2.2(a).
"Swingline Lender" means NationsBank, in its capacity as such.
"Swingline Loan" or "Swingline Loans" means as defined in Section 2.2(a).
"Swingline Note" means the promissory note of the Borrower in favor of the
Swingline Lender evidencing the Swingline Loans provided pursuant to
Section 2.2(d), as such promissory note may be amended, modified,
supplemented, extended, renewed or replaced from time to time.
"Termination Date" means April 6, 2004.
"Threshold Requirement" means such term as defined in Section 7.10.
"Tranche" means the collective reference to Eurodollar Loans whose
Interest Periods begin and end on the same day. A Tranche may sometimes be
referred to as a "Eurodollar Tranche".
"Transfer Effective Date" means such term as defined in the Commitment
Transfer Supplement.
"Transferee" means such term as defined in Section 11.6(f).
"Type" means, as to any Loan, its nature as a Base Rate Loan, Eurodollar
Loan or Swingline Loan, as the case may be.
1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in this Credit
Agreement shall have the defined meanings when used in the Notes or other
Credit Documents or any certificate or other document made or delivered
pursuant hereto.
(b) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Credit Agreement shall refer to this Credit
Agreement as a whole and not to any particular provision of this Credit
Agreement, and Section, subsection, Schedule and Exhibit references are to
this Credit Agreement unless otherwise specified.
(c) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
(d) For purposes of computation of periods of time hereunder, the word
"from" means "from and including", the words "to" and "until" each mean "to
but excluding" and the word "including" means "including but not limited
to".
1.3 Accounting Terms and Determinations.
Unless otherwise specified herein, all terms of an accounting character
used herein shall be interpreted, all accounting determinations hereunder shall
be made, and all financial statements required to be delivered hereunder shall
be prepared, in accordance with GAAP, applied on a basis consistent (except for
changes concurred in by the Borrower's independent public accountants or
otherwise required by a change in GAAP) with the most recent audited
consolidated financial statements of the Borrower and its consolidated
Subsidiaries delivered to the Lenders unless with respect to any such change
concurred in by the Borrower's independent public accountants or required by
GAAP, in determining compliance with any of the provisions of this Credit
Agreement or any of the other Credit Documents: (i) the Borrower shall have
objected to determining such compliance on such basis at the time of delivery of
such financial statements, or (ii) the Required Lenders shall so object in
writing within 30 days after the delivery of such financial statements, in
either of which events such calculations shall be made on a basis consistent
with those used in the preparation of the latest financial statements as to
which such objection shall not have been made (which, if objection is made in
respect of the first financial statements delivered under Section 7.1 hereof,
shall mean the financial statements referred to in Section 6.1).
SECTION 2
CREDIT FACILITIES
2.1 Revolving Loans.
(a) Revolving Commitment. During the Commitment Period, subject to the
terms and conditions hereof, each Lender severally, but not jointly, agrees to
make revolving credit loans ("Revolving Loans") to the Borrower from time to
time for the purposes hereinafter set forth; provided, however, that (i) with
regard to each Lender individually, such Lender's Revolving Commitment
Percentage of Obligations shall not exceed such Lender's Revolving Committed
Amount, and (ii) with regard to the Lenders collectively, the aggregate amount
of Obligations shall not exceed THREE HUNDRED MILLION DOLLARS ($300,000,000) (as
such aggregate maximum amount may be reduced from time to time as provided
herein, the "Revolving Committed Amount"). Revolving Loans may consist of Base
Rate Loans or Eurodollar Loans, or a combination thereof, as the Borrower may
request, and may be repaid and reborrowed in accordance with the provisions
hereof. Eurodollar Loans shall be made by each Lender at its Eurodollar Lending
Office and Base Rate Loans at its Domestic Lending Office.
(b) Revolving Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall request a Revolving Loan
borrowing by written notice (or telephone notice promptly confirmed in
writing which confirmation may be by fax) to the Agent not later than 11:30
A.M. (Charlotte, North Carolina time) on the Business Day prior to the date
of requested borrowing in the case of Base Rate Loans, and on the third
Business Day prior to the date of the requested borrowing in the case of
Eurodollar Loans. Each such request for borrowing shall be irrevocable and
shall specify (A) that a Revolving Loan is requested, (B) the date of the
requested borrowing (which shall be a Business Day), (C) the aggregate
principal amount to be borrowed, and (D) whether the borrowing shall be
comprised of Base Rate Loans, Eurodollar Loans or a combination thereof,
and if Eurodollar Loans are requested, the Interest Period(s) therefor. A
form of Notice of Borrowing (a "Notice of Borrowing") is attached as
Schedule 2.1(b)(i). If the Borrower shall fail to specify in any such
Notice of Borrowing (I) an applicable Interest Period in the case of a
Eurodollar Loan, then such notice shall be deemed to be a request for an
Interest Period of one month, or (II) the type of Revolving Loan requested,
then such notice shall be deemed to be a request for a Base Rate Loan
hereunder. The Agent shall give notice to each Lender promptly upon
receipt of each Notice of Borrowing, the contents thereof and each such
Lender's share thereof.
(ii) Minimum Amounts. Each Revolving Loan borrowing shall be in a
minimum aggregate amount of $2,000,000 and integral multiples of $1,000,000
in excess thereof (or the remaining amount of the Revolving Commitment, if
less).
(iii) Advances. Each Lender will make its Revolving Commitment
Percentage of each Revolving Loan borrowing available to the Agent for the
account of the Borrower at the office of the Agent specified in Schedule
11.2, or at such other office as the Agent may designate in writing, by
1:00 P.M. (Charlotte, North Carolina time) on the date specified in the
applicable Notice of Borrowing in Dollars and in funds immediately
available to the Agent. Such borrowing will then be made available to the
Borrower by the Agent by crediting the account of the Borrower on the books
of such office with the aggregate of the amounts made available to the
Agent by the Lenders and in like funds as received by the Agent.
(c) Repayment. The principal amount of all Revolving Loans shall be due
and payable in full on the Termination Date.
(d) Interest. Subject to the provisions of Section 3.1, Revolving Loans
shall bear interest as follows:
(i) Base Rate Loans. During such periods as Revolving Loans shall be
comprised of Base Rate Loans, each such Base Rate Loan shall bear interest
at a per annum rate equal to the sum of the Base Rate plus the Applicable
Percentage; and
(ii) Eurodollar Loans. During such periods as Revolving Loans shall
be comprised of Eurodollar Loans, each such Eurodollar Loan shall bear
interest at a per annum rate equal to the sum of the applicable Eurodollar
Rate plus the Applicable Percentage.
Interest on Revolving Loans shall be payable in arrears on each Interest Payment
Date.
(e) Revolving Notes. The Revolving Loans shall be evidenced by a duly
executed promissory note of the Borrower to each Lender in the original
principal amount of each such Lender's Revolving Committed Amount in
substantially the form of Schedule 2.1(e).
2.2 Swingline Loan Subfacility.
(a) Swingline Commitment. During the Commitment Period, subject to the
terms and conditions hereof, the Swingline Lender, in its individual capacity,
agrees to make certain revolving credit loans to the Borrower (each a "Swingline
Loan" and, collectively, the "Swingline Loans") for the purposes hereinafter set
forth; provided, however, (i) the aggregate amount of Swingline Loans
outstanding at any time shall not exceed TWENTY MILLION DOLLARS ($20,000,000)
(the "Swingline Committed Amount"), and (ii) the aggregate amount of Obligations
shall not exceed the aggregate Revolving Committed Amount. Swingline Loans
hereunder may be repaid and reborrowed in accordance with the provisions hereof.
(b) Swingline Loan Borrowings.
(i) Notice of Borrowing and Disbursement. The Swingline Lender will make
Swingline Loans available to the Borrower upon request or on the basis of
such other arrangements as may be agreed upon between the Swingline Lender
and the Borrower. A notice of request for Swingline Loan borrowing may,
but need not, be in the form of Schedule 2.1(b)(i). There shall be no
minimum amount for Swingline Loan borrowings hereunder.
(ii) Repayment of Swingline Loans. Each Swingline Loan borrowing
shall be due and payable on the earlier of (A) the date of the next
Revolving Loan borrowing, or (B) the Termination Date. If, and to the
extent, any Swingline Loans shall be outstanding on the date of any
Revolving Loan borrowing, such Swingline Loans shall first be repaid from
the proceeds of such Revolving Loan borrowing prior to disbursement to the
Borrower. In addition, the Swingline Lender may, at any time, in its sole
discretion, by written notice to the Borrower and the Agent, demand
repayment of its Swingline Loans by way of a Revolving Loan borrowing, in
which case the Borrower shall be deemed to have requested a Revolving Loan
borrowing comprised entirely of Base Rate Loans in the amount of such
Swingline Loans; provided, however, that, in the following circumstances,
any such demand shall also be deemed to have been given one Business Day
prior to each of (i) the Termination Date, (ii) the occurrence of any Event
of Default described in Section 9(e), (iii) upon acceleration of the
Obligations hereunder, whether on account of an Event of Default described
in Section 9(e) or any other Event of Default, and (iv) the exercise of
remedies in accordance with the provisions of Section 9 hereof (each such
Revolving Loan borrowing made on account of any such deemed request
therefor as provided herein being hereinafter referred to as a "Mandatory
Borrowing"). Each Lender hereby irrevocably agrees to make such Revolving
Loans promptly upon any such request or deemed request on account of each
Mandatory Borrowing in the amount and in the manner specified in the
preceding sentence and on the same such date notwithstanding (I) the amount
of Mandatory Borrowing may not comply with the minimum amount for
borrowings of Revolving Loans otherwise required hereunder, (II) whether
any conditions specified in Section 5.2 are then satisfied, (III) whether a
Default or an Event of Default then exists, (IV) failure of any such
request or deemed request for Revolving Loans to be made by the time
otherwise required in Section 2.1(b)(i), (V) the date of such Mandatory
Borrowing, or (VI) any reduction in the Revolving Committed Amount or
termination of the Commitments relating thereto immediately prior to such
Mandatory Borrowing or contemporaneous therewith. In the event that any
Mandatory Borrowing cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the
commencement of a proceeding in bankruptcy with respect to the Borrower),
then each Lender hereby agrees that it shall forthwith purchase (as of the
date the Mandatory Borrowing would otherwise have occurred, but adjusted
for any payments received from the Borrower on or after such date and prior
to such purchase) from the Swingline Lender such participations in the
outstanding Swingline Loans as shall be necessary to cause each such Lender
to share in such Swingline Loans ratably based upon its respective
Revolving Commitment Percentage (determined before giving effect to any
termination of the Commitments pursuant to Section 9), provided that (A)
all interest payable on the Swingline Loans shall be for the account of the
Swingline Lender until the date as of which the respective participation is
purchased, and (B) at the time any purchase of participations pursuant to
this sentence is actually made, the purchasing Lender shall be required to
pay to the Swingline Lender interest on the principal amount of such
participation purchased for each day from and including the day upon which
the Mandatory Borrowing would otherwise have occurred to but excluding the
date of payment for such participation, at the rate equal to, if paid
within two (2) Business Days of the date of the Mandatory Borrowing, the
Federal Funds Rate, and thereafter at a rate equal to the Base Rate.
(c) Interest on Swingline Loans. Subject to the provisions of Section
3.1, Swingline Loans shall bear interest at a per annum rate equal to the Base
Rate plus the Applicable Percentage. Interest on Swingline Loans shall be
payable in arrears on each Interest Payment Date.
(d) Swingline Note. The Swingline Loans shall be evidenced by a duly
executed promissory note of the Borrower to the Swingline Lender in the original
amount of the Swingline Committed Amount and substantially in the form of
Schedule 2.2(d).
2.3 Letter of Credit Subfacility.
(a) Issuance. Subject to the terms and conditions hereof and of the LOC
Documents, if any, and any other terms and conditions which the Issuing Lender
may reasonably require, during the Commitment Period the Issuing Lender shall
issue, and the Lenders shall participate in, Letters of Credit for the account
of the Borrower from time to time upon request in a form reasonably acceptable
to the Issuing Lender; provided, however, that (i) the aggregate amount of LOC
Obligations shall not at any time exceed THIRTY-FIVE MILLION DOLLARS
($35,000,000) (the "LOC Committed Amount"), and (ii) the aggregate amount of
Obligations shall not at any time exceed the aggregate Revolving Committed
Amount. Except as otherwise expressly agreed upon by all of the Lenders, no
Letter of Credit shall have an original expiry date more than one year from the
date of issuance or extension; provided, however, that so long as no Default or
Event of Default shall have occurred and be continuing and subject to the other
terms and conditions to the issuance of Letters of Credit hereunder, the expiry
dates of Letters of Credit may be extended annually on each anniversary date of
their date of issuance for an additional period not to exceed one year; and
provided further that no Letter of Credit as originally issued or as extended,
shall have an expiry date extending beyond the Termination Date, except that
prior to the Termination Date a Letter of Credit may be issued or extended with
an expiry date extending beyond the Termination Date if, and to the extent that
the Borrower shall provide cash collateral to the Issuing Lender on the date of
issuance or extension in an amount equal to the maximum amount available to be
drawn under such Letter of Credit. Each Letter of Credit shall comply with the
related LOC Documents. The issuance and expiry date of each Letter of Credit
shall be a Business Day. Letters of Credit shall be issued or extended in
minimum original face amounts of $200,000. In the case of a conflict in the
terms of the LOC Documents and this Credit Agreement, the terms of this Credit
Agreement shall control.
(b) Notice and Reports. The request for the issuance of a Letter of
Credit shall be submitted to the Issuing Lender and the Agent at least five (5)
Business Days prior to the requested date of issuance. The Issuing Lender will,
at least quarterly and more frequently upon request, provide to the Agent for
dissemination to the Lenders a detailed report specifying the Letters of Credit
which are then issued and outstanding and any activity with respect thereto
which may have occurred since the date of the prior report, and including
therein, among other things, the account party, the beneficiary, the face
amount, expiry date as well as any payments or expirations which may have
occurred. The Issuing Lender will further provide to the Agent promptly upon
request copies of the Letters of Credit. The Issuing Lender will provide to the
Agent prompt notice of any changes in LOC Obligations issued by it, and more
frequently upon request, a summary report of the nature and extent of LOC
Obligations then outstanding.
(c) Participations. Each Lender, with respect to the Existing Letters of
Credit, hereby purchases a participation interest in such Existing Letters of
Credit and with respect to Letters of Credit issued on or after the Closing
Date, upon issuance of a Letter of Credit, shall be deemed to have purchased
without recourse a risk participation from the Issuing Lender in such Letter of
Credit and the obligations arising thereunder and any collateral relating
thereto, if any, in each case in an amount equal to its LOC Commitment
Percentage of the obligations under such Letter of Credit and shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as surety,
and be obligated to pay to the Issuing Lender therefor and discharge when due,
its LOC Commitment Percentage of the obligations arising under such Letter of
Credit. Without limiting the scope and nature of each Lender's participation in
any Letter of Credit, to the extent that the Issuing Lender has not been
reimbursed as required hereunder or under any LOC Document, each such Lender
shall pay to the Issuing Lender its LOC Commitment Percentage of such
unreimbursed drawing in same day funds on the day of notification by the Issuing
Lender of an unreimbursed drawing pursuant to the provisions of subsection (d)
hereof. The obligation of each Lender to so reimburse the Issuing Lender shall
be absolute and unconditional and shall not be affected by the occurrence of a
Default, an Event of Default or any other occurrence or event. Any such
reimbursement shall not relieve or otherwise impair the obligation of the
Borrower to reimburse the Issuing Lender under any Letter of Credit, together
with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly notify the Borrower and the Agent. The
Borrower shall reimburse the Issuing Lender on the day of drawing under any
Letter of Credit (either with the proceeds of a Swingline Loan or Revolving Loan
obtained hereunder or otherwise) in same day funds as provided herein or in the
LOC Documents. If the Borrower shall fail to reimburse the Issuing Lender as
provided herein, the unreimbursed amount of such drawing shall bear interest at
a per annum rate equal to the Base Rate plus two percent (2%). Unless the
Borrower shall immediately notify the Issuing Lender and the Agent of its intent
to otherwise reimburse the Issuing Lender, the Borrower shall be deemed to have
requested a Swingline Loan, or if and to the extent Swingline Loans shall not be
available, a Revolving Loan in the amount of the drawing as provided in
subsection (e) hereof, the proceeds of which will be used to satisfy the
reimbursement obligations. The Borrower's reimbursement obligations hereunder
shall be absolute and unconditional under all circumstances irrespective of any
rights of set-off, counterclaim or defense to payment the Borrower may claim or
have against the Issuing Lender, the Agent, the Lenders, the beneficiary of the
Letter of Credit drawn upon or any other Person, including without limitation
any defense based on any failure of the Borrower to receive consideration or the
legality, validity, regularity or unenforceability of the Letter of Credit. The
Issuing Lender will promptly notify the other Lenders of the amount of any
unreimbursed drawing and each Lender shall promptly pay to the Agent for the
account of the Issuing Lender in Dollars and in immediately available funds, the
amount of such Lender's LOC Commitment Percentage of such unreimbursed drawing.
Such payment shall be made on the day such notice is received by such Lender
from the Issuing Lender if such notice is received at or before 2:00 P.M.
(Charlotte, North Carolina time), otherwise such payment shall be made at or
before 12:00 Noon (Charlotte, North Carolina time) on the Business Day next
succeeding the day such notice is received. If such Lender does not pay such
amount to the Issuing Lender in full upon such request, such Lender shall, on
demand, pay to the Agent for the account of the Issuing Lender interest on the
unpaid amount during the period from the date of such drawing until such Lender
pays such amount to the Issuing Lender in full at a rate per annum equal to, if
paid within two (2) Business Days of the date of such request, the Federal Funds
Rate and thereafter at a rate equal to the Base Rate. Each Lender's obligation
to make such payment to the Issuing Lender, and the right of the Issuing Lender
to receive the same, shall be absolute and unconditional, shall not be affected
by any circumstance whatsoever and without regard to the termination of this
Credit Agreement or the Commitments hereunder, the existence of a Default or
Event of Default or the acceleration of the Obligations hereunder and shall be
made without any offset, abatement, withholding or reduction whatsoever.
(e) Repayment with Revolving Loans. On any day on which the Borrower
shall be deemed to have requested, (i) a Swingline Loan borrowing to reimburse a
drawing under a Letter of Credit, the Swingline Lender shall make the Swingline
Loan advance pursuant to the terms of the request or deemed request in
accordance with the provisions for Swingline Loan advances hereunder, or (ii) a
Revolving Loan to reimburse a drawing under a Letter of Credit, the Agent shall
give notice to the Lenders that a Revolving Loan has been requested or deemed
requested in connection with a drawing under a Letter of Credit, in which case a
Revolving Loan borrowing comprised entirely of Base Rate Loans (each such
borrowing, a "Mandatory Borrowing") shall be immediately made (without giving
effect to any termination of the Commitments pursuant to Section 9) pro rata
based on each Lender's respective Revolving Commitment Percentage (determined
before giving effect to any termination of the Commitments pursuant to Section
9) and in the case of both clauses (i) and (ii) the proceeds thereof shall be
paid directly to the Issuing Lender for application to the respective LOC
Obligations. Each Lender hereby irrevocably agrees to make such Revolving Loans
immediately upon any such request or deemed request on account of each Mandatory
Borrowing in the amount and in the manner specified in the preceding sentence
and on the same such date notwithstanding (i) the amount of Mandatory Borrowing
may not comply with the minimum amount for borrowings of Revolving Loans
otherwise required hereunder, (ii) whether any conditions specified in Section
5.2 are then satisfied, (iii) whether a Default or an Event of Default then
exists, (iv) failure for any such request or deemed request for Revolving Loan
to be made by the time otherwise required in Section 2.1(b), (v) the date of
such Mandatory Borrowing, or (vi) any reduction in the Revolving Committed
Amount after any such Letter of Credit may have been drawn upon; provided,
however, that in the event any such Mandatory Borrowing should be less than the
minimum amount for borrowings of Revolving Loans otherwise provided in Section
2.1(b)(ii), the Borrower shall pay to the Agent for its own account an
administrative fee of $500. In the event that any Mandatory Borrowing cannot
for any reason be made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under the Bankruptcy
Code with respect to the Borrower or the Company), then each such Lender hereby
agrees that it shall forthwith fund (as of the date the Mandatory Borrowing
would otherwise have occurred, but adjusted for any payments received from the
Borrower on or after such date and prior to such purchase) its Participation
Interests in the outstanding LOC Obligations; provided, further, that in the
event any Lender shall fail to fund its Participation Interest on the day the
Mandatory Borrowing would otherwise have occurred, then the amount of such
Lender's unfunded Participation Interest therein shall bear interest payable to
the Issuing Lender upon demand, at the rate equal to, if paid within two (2)
Business Days of any such request, the Federal Funds Rate, and thereafter at a
rate equal to the Base Rate.
(f) Modification, Extension. The issuance of any supplement,
modification, amendment, renewal, or extension to any Letter of Credit shall,
for purposes hereof, be treated in all respects the same as the issuance of a
new Letter of Credit hereunder.
(g) Uniform Customs and Practices. The Issuing Lender shall have the
Letters of Credit be subject to The Uniform Customs and Practice for Documentary
Credits, as published as of the date of issue by the International Chamber of
Commerce (the "UCP"), in which case the UCP may be incorporated therein and
deemed in all respects to be a part thereof.
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 Default Rate.
Upon the occurrence, and during the continuance, of an Event of Default,
the principal of and, to the extent permitted by law, interest on the Loans and
any other amounts owing hereunder or under the other Credit Documents shall bear
interest, payable on demand, at a per annum rate 2% greater than the rate which
would otherwise be applicable (or if no rate is applicable, whether in respect
of interest, fees or other amounts, then 2% greater than the Base Rate).
3.2 Extension and Conversion.
The Borrower shall have the option, on any Business Day, to extend
existing Loans into a subsequent permissible Interest Period or to convert Loans
into Loans of another type; provided, however, that (i) except as provided in
Section 3.7, Eurodollar Loans may be converted into Base Rate Loans only on the
last day of the Interest Period applicable thereto, (ii) Eurodollar Loans may be
extended, and Base Rate Loans may be converted into Eurodollar Loans, only if no
Default or Event of Default is in existence on the date of extension or
conversion, (iii) Loans extended as, or converted into, Eurodollar Loans shall
be subject to the terms of the definition of "Interest Period" set forth in
Section 1.1 and shall be in such minimum amounts as provided in Section
2.1(b)(ii), (iv) no more than 20 separate Eurodollar Loans shall be outstanding
hereunder at any time, (v) any request for extension or conversion of a
Eurodollar Loan which shall fail to specify an Interest Period shall be deemed
to be a request for an Interest Period of one month and (vi) Swingline Loans may
not be extended or converted pursuant to this Section 3.2. Each such extension
or conversion shall be effected by the Borrower by giving a Notice of
Extension/Conversion (or telephone notice promptly confirmed in writing) to the
Agent prior to 11:00 A.M. (Charlotte, North Carolina time) on the Business Day
of, in the case of the conversion of a Eurodollar Loan into a Base Rate Loan and
on the third Business Day prior to, in the case of the extension of a Eurodollar
Loan as, or conversion of a Base Rate Loan into, a Eurodollar Loan, the date of
the proposed extension or conversion, specifying the date of the proposed
extension or conversion, the Loans to be so extended or converted, the types of
Loans into which such Loans are to be converted and, if appropriate, the
applicable Interest Periods with respect thereto. Each request for extension or
conversion shall constitute a representation and warranty by the Borrower of the
matters specified in subsections as appropriate (a) and (b), and in (c) or (d)
of Section 5.2. In the event the Borrower fails to request extension or
conversion of any Eurodollar Loan in accordance with this Section, or any such
conversion or extension is not permitted or required by this Section, then such
Loans shall be automatically converted into Base Rate Loans at the end of their
Interest Period. The Agent shall give each Lender notice as promptly as
practicable of any such proposed extension or conversion affecting any Loan.
3.3 Reductions in Commitments and Prepayments.
(a) Voluntary Reduction in Revolving Commitment. The Borrower may from
time to time permanently reduce the aggregate amount of the Revolving
Commitments in whole or in part without premium or penalty except as provided in
Section 3.10 upon three (3) Business Days' prior written notice to the Agent;
provided that after giving effect to any such voluntary reduction the
Obligations then outstanding shall not exceed the Aggregate Revolving Committed
Amount, as reduced. Partial reductions in the aggregate Revolving Commitment
shall in each case be in a minimum aggregate amount of $1,000,000 and integral
multiples of $500,000 in excess thereof.
(b) Mandatory Reduction in Revolving Commitments and Mandatory
Prepayments.
(i) Mandatory Reduction in Revolving Commitments. The aggregate amount of
the Commitments shall be automatically and permanently reduced by an
aggregate amount equal to 100% of the Net Proceeds received by the Borrower
or any its Subsidiaries in connection with a Debt Transaction. Any payment
owing hereunder on account of any such reduction in Commitments under this
subsection (i) shall be made to the Agent promptly (but in any event within
five (5) Business Days) following receipt by the Borrower or a Subsidiary
of the Net Proceeds therefrom and shall be applied as provided in
subsection (ii) hereof.
(ii) Mandatory Prepayment on Revolving Loans. If at any time the
aggregate amount of Obligations then outstanding shall exceed the Aggregate
Revolving Committed Amount, as reduced from time to time, the Borrower
shall immediately make payment on the Swingline Loans and then the
Revolving Loans and then to a cash collateral account in respect of the LOC
Obligations, in an amount sufficient to eliminate the deficiency. Any such
payments shall be applied first to Base Rate Loans and then to Eurodollar
Loans in direct order of their Interest Period maturities.
(c) Voluntary Prepayments. Loans may be prepaid in whole or in part
without premium or penalty; provided that (i) Eurodollar Loans may not be
prepaid other than at the end of the Interest Period applicable thereto and only
then on three (3) Business Days' prior written notice to the Agent, and (ii)
each such partial prepayment shall be in a minimum aggregate principal amount of
$1,000,000 and integral multiples of $500,000 in excess thereof. Amounts
prepaid on the Revolving Loans may be reborrowed in accordance with the
provisions hereof.
(d) Notice. Except as otherwise provided herein, the Borrower will
provide notice to the Agent of any prepayment by 11:00 A.M. (Charlotte, North
Carolina time) on the day prior to the date of prepayment.
3.4 Fees.
(a) Commitment Fee. In consideration of the Commitments by the Lenders
hereunder, the Borrower agrees to pay to the Agent for the ratable benefit of
the Lenders a commitment fee (the "Commitment Fee") in an amount equal to the
Applicable Percentage per annum on the average daily unused portion of the
Revolving Committed Amount in effect from time to time. For purposes of
computing the Commitment Fee, Swingline Loans shall not be considered usage
under the Revolving Committed Amount. The Commitment Fee shall be payable
quarterly in arrears on the 15th day following the last day of each calendar
quarter for the prior calendar quarter and on the Termination Date.
(b) Letter of Credit Fee. In consideration of the issuance of Letters of
Credit hereunder, the Borrower or other Credit Party agrees to pay to the Agent
for the ratable benefit of the Lenders a fee (the "Letter of Credit Fee") equal
to the Applicable Percentage per annum on the average daily maximum amount
available to be drawn under each Letter of Credit from the date of issuance to
the date of expiration. In addition to the foregoing fee, the Borrower or other
Credit Party shall pay to the Issuing Lender for its own account without sharing
by the other Lenders an amount equal to one-eighth of one percent (.%) per annum
on the average daily maximum amount available to be drawn under each Letter of
Credit issued by such Issuing Lender from the date of issuance to the date of
expiration. The Letter of Credit Fee will be payable quarterly in arrears on
the 15th day following the last day of each calendar quarter and on the
Termination Date.
(c) Issuing Lender Fees. In addition to the Letter of Credit Fees payable
pursuant to subsection (b) above, the Borrower shall pay to the Issuing Lender
for its own account without sharing by the other Lenders the customary charges
from time to time of the Issuing Lender with respect to the issuance, amendment,
transfer, administration, cancellation and conversion of, and drawings under,
such Letters of Credit (collectively, the "Issuing Lender Fees").
(d) Agent's Fees. The Borrower agrees to pay to the Agent, for its own
account, the annual administrative fee, structuring fee and other fees
(collectively, the "Agent's Fees") referred to in the Agent's Fee Letter.
3.5 Capital Adequacy.
If any Lender has reasonably determined that the adoption or effectiveness
of any applicable law, rule or regulation regarding capital adequacy made after
the date hereof, or any change therein made after the date hereof, or any change
in the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof made after the date hereof, or compliance by such Lender
or its parent company with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency made after the date hereof, has or would have the effect of
reducing the rate of return on such Lender's of its parent company's capital or
assets as a consequence of its commitments or obligations hereunder to a level
below that which such Lender could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration the policies of
such Lender and its parent company with respect to capital adequacy), then,
within 10 Business Days after the Borrower's receipt of the certificate referred
to in the next sentence, the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender and its parent company for such
reduction; provided that no such amounts shall be payable with respect to
reduction in rate of return incurred more than three (3) months before such
Lender demands compensation under this Section 3.5. A certificate as to the
amount of such reduction in rate of return, the good faith basis therefor and
setting forth in reasonable detail the calculations used by the applicable
Lender to arrive at the amount or amounts claimed to be due, shall be submitted
to the Borrower and the Agent. Each determination by a Lender of amounts owing
under this Section shall be rebuttably presumptive evidence of the matters set
forth therein. The provisions of this Section shall survive termination of this
Credit Agreement and the payment of the Loans and all other amounts payable
hereunder.
3.6 Inability To Determine Interest Rate.
If prior to the first day of any Interest Period, the Agent shall have
reasonably determined (which determination shall be conclusive and binding upon
the Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period, the Agent shall give telecopy or telephonic notice
thereof to the Borrower and the Lenders as soon as practicable thereafter. If
such notice is given (x) any Eurodollar Loans requested to be made on the first
day of such Interest Period shall be made as Base Rate Loans, (y) any Loans that
were to have been converted on the first day of such Interest Period to or
continued as Eurodollar Loans shall be converted to or continued as Base Rate
Loans and (z) any outstanding Eurodollar Loans shall be converted, on the first
day of such Interest Period, to Base Rate Loans. Until such notice has been
withdrawn by the Agent, no further Eurodollar Loans shall be made or continued
as such, nor shall the Borrower have the right to convert Base Rate Loans to
Eurodollar Loans.
3.7 Illegality.
Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
occurring after the Closing Date shall make it unlawful for any Lender to make
or maintain Eurodollar Loans as contemplated by this Credit Agreement, (a) such
Lender shall promptly give written notice of such circumstances to the Borrower
and the Agent (which notice shall be withdrawn whenever such circumstances no
longer exist), (b) the commitment of such Lender hereunder to make Eurodollar
Loans, continue Eurodollar Loans as such and convert a Base Rate Loan to
Eurodollar Loans shall forthwith be canceled and, until such time as it shall no
longer be unlawful for such Lender to make or maintain Eurodollar Loans, such
Lender shall then have a commitment only to make a Base Rate Loan when a
Eurodollar Loan is requested and (c) such Lender's Loans then outstanding as
Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on
the respective last days or the then current Interest Periods with respect to
such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrower shall pay to
such Lender such amounts, if any, as may be required pursuant to subsection
3.10.
3.8 Requirements of Law.
If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof applicable to any Lender, or compliance by
any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority, in each case made
subsequent to the Closing Date (or, if later, the date on which such Lender
becomes a Lender):
(i)shall subject such Lender to any tax of any kind whatsoever on or
in respect of any Letter of Credit, letter of credit application or any
Eurodollar Loans made by it or its obligation to make Eurodollar Loans, or
change the basis of taxation of payments to such Lender in respect thereof
(except for Non-Excluded Taxes covered by subsection 3.9 (including Non-
Excluded Taxes imposed solely by reason of any failure of such Lender to
comply with its obligations under subsection 3.9(b)) and changes in taxes
measured by or imposed upon the overall net income, or franchise tax
(imposed in lieu of such net income tax), of such Lender or its applicable
lending office, branch, or any affiliate thereof);
(ii)shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(iii)shall impose on such Lender any other condition (excluding any
tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, upon notice to the
Borrower from such Lender, through the Agent, in accordance herewith, the
Borrower shall promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such increased cost or reduced amount
receivable, provided that, in any such case, the Borrower may elect to convert
the Eurodollar Loans made by such Lender hereunder to Base Rate Loans by giving
the Agent at least one Business Day's notice of such election, in which case the
Borrower shall promptly pay to such Lender, upon demand, without duplication,
such amounts, if any, as may be required pursuant to subsection 3.10. If any
Lender becomes entitled to claim any additional amounts pursuant to this
subsection, it shall provide prompt notice thereof to the Borrower, through the
Agent, certifying (x) that one of the events described in this Section 3.8 has
occurred and describing in reasonable detail the nature of such event, (y) as to
the increased cost or reduced amount resulting from such event and (z) as to the
additional amount demanded by such Lender and a reasonably detailed explanation
of the calculation thereof. Such a certificate as to any additional amounts
payable pursuant to this subsection submitted by such Lender, through the Agent,
to the Borrower shall be conclusive in the absence of manifest error. This
covenant shall survive the termination of this Credit Agreement and the payment
of the Loans and all other amounts payable hereunder.
3.9 Taxes.
(a) Except as provided below in this subsection, all payments made by the
Borrower under this Credit Agreement and any Notes shall be made free and
clear of, and without deduction or withholding for or on account of, any
present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority,
excluding taxes measured by or imposed upon the overall net income of any
Lender or its applicable lending office, or any branch or affiliate
thereof, and all franchise taxes, branch taxes, taxes on doing business or
taxes on the overall capital or net worth of any Lender or its applicable
lending office, or any branch or affiliate thereof, in each case imposed in
lieu of net income taxes, imposed: (i) by the jurisdiction under the laws
of which such Lender, applicable lending office, branch or affiliate is
organized or is located, or in which its principal executive office is
located, or any nation within which such jurisdiction is located or any
political subdivision thereof; or (ii) by reason of any connection between
the jurisdiction imposing such tax and such Lender, applicable lending
office, branch or affiliate other than a connection arising solely from
such Lender having executed, delivered or performed its obligations, or
received payment under or enforced, this Credit Agreement or any Notes. If
any such non-excluded taxes, levies, imposts, duties, charges, fees,
deductions or withholdings ("Non-Excluded Taxes") are required to be
withheld from any amounts payable to the Agent or any Lender hereunder or
under any Notes, (A) the amounts so payable to the Agent or such Lender
shall be increased to the extent necessary to yield to the Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Credit Agreement and any Notes, provided, however, that the Borrower shall
be entitled to deduct and withhold any Non-Excluded Taxes and shall not be
required to increase any such amounts payable to any Lender that is not
organized under the laws of the United States of America or a state thereof
if such Lender fails to comply with the requirements of paragraph (b) of
this subsection whenever any Non-Excluded Taxes are payable by the
Borrower, and (B) as promptly as possible thereafter the Borrower shall
send to the Agent for its own account or for the account of such Lender, as
the case may be, a certified copy of an original official receipt received
by the Borrower showing payment thereof. If the Borrower fails to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Agent the required receipts or other required documentary
evidence, the Borrower shall indemnify the Agent and the Lenders for any
incremental taxes, interest or penalties that may become payable by the
Agent or any Lender as a result of any such failure. The agreements in
this subsection shall survive the termination of this Credit Agreement and
the payment of the Loans and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(X)(i) on or before the date of any payment by the Borrower
under this Credit Agreement or Notes to such Lender, deliver to the
Borrower and the Agent (A) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, or successor applicable
form, as the case may be, certifying that it is entitled to receive
payments under this Credit Agreement and any Notes without deduction
or withholding of any United States federal income taxes and (B) an
Internal Revenue Service Form W-8 or W-9, or successor applicable
form, as the case may be, certifying that it is entitled to an
exemption from United States backup withholding tax;
(ii) deliver to the Borrower and the Agent two further copies of
any such form or certification on or before the date that any such
form or certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the
Borrower or the Agent; or
(Y) in the case of any such Lender that is not a "bank" within the meaning
of Section 881(c)(3)(A) of the Code, (i) represent to the Borrower (for the
benefit of the Borrower and the Agent) that it is not a bank within the
meaning of Section 881(c)(3)(A) of the Code, (ii) agree to furnish to the
Borrower on or before the date of any payment by the Borrower, with a copy
to the Agent (A) a certificate substantially in the form of Schedule 3.10
(any such certificate a "U.S. Tax Compliance Certificate") and (B) two
accurate and complete original signed copies of Internal Revenue Service
Form W-8, or successor applicable form certifying to such Lender's legal
entitlement at the date of such certificate to an exemption from U.S.
withholding tax under the provisions of Section 881(c) of the Code with
respect to payments to be made under this Credit Agreement and any Notes
(and to deliver to the Borrower and the Agent two further copies of such
form on or before the date it expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recently provided
form and, if necessary, obtain any extensions of time reasonably requested
by the Borrower or the Agent for filing and completing such forms), and
(iii) agree, to the extent legally entitled to do so, upon reasonable
request by the Borrower, to provide to the Borrower (for the benefit of the
Borrower and the Agent) such other forms as may be reasonably required in
order to establish the legal entitlement of such Lender to an exemption
from withholding with respect to payments under this Credit Agreement and
any Notes;
unless in any such case any change in treaty, law or regulation has occurred
after the date such Person becomes a Lender hereunder which renders all such
forms inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender so advises the
Borrower and the Agent. Each Person that shall become a Lender or a participant
of a Lender pursuant to subsection 11.6 shall, upon the effectiveness of the
related transfer, be required to provide all of the forms, certifications and
statements required pursuant to this subsection, provided that in the case of a
participant of a Lender the obligations of such participant of a Lender pursuant
to this subsection (b) shall be determined as if the participant of a Lender
were a Lender except that such participant of a Lender shall furnish all such
required forms, certifications and statements to the Lender from which the
related participation shall have been purchased.
(c) In the event that any Lender requests payment by the Borrower of any
additional amounts pursuant to subsection (a) of this Section 3.9, then,
provided that no Default or Event of Default has occurred and is continuing
at such time, the Borrower may, at its own expense (such expense to include
any transfer fee payable to the Agent under Section 11.6(b)), and in its
sole discretion require such Lender to transfer and assign in whole or in
part, without recourse (in accordance with and subject to the terms and
conditions of Section 11.6(b)), all or part of its interests, rights and
obligations under this Credit Agreement to an Eligible Transferee which
shall assume such assigned obligations; provided that (i) such assignment
shall not relieve the Borrower from its obligations to pay such additional
amounts that may be due in accordance with subsection (a) of this Section
3.9, (ii) such assignment shall not conflict with any law, rule or
regulation or order of any court or other Governmental Authority and (iii)
the Borrower or such Eligible Transferee shall have paid to the assigning
Lender in immediately available funds the principal of and interest accrued
to the date of such payment on the Loans made by it hereunder and all
accrued Fees and other amounts owed to it hereunder.
3.10 Indemnity.
The Borrower agrees to indemnify each Lender and to hold each Lender
harmless from any loss or expense which such Lender may sustain or incur (other
than through such Lender's gross negligence or willful misconduct) as a
consequence of (a) default by the Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Credit Agreement,
(b) default by the Borrower in making any prepayment of a Eurodollar Loan after
the Borrower has given a notice thereof in accordance with the provisions of
this Credit Agreement or (c) the making of a prepayment of Eurodollar Loans on a
day which is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
the applicable Interest Period (or, in the case of a failure to borrow, convert
or continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Eurodollar
Loans provided for herein (excluding, however, the Applicable Percentage
included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank Eurodollar market. This covenant shall survive the
termination of this Credit Agreement and the payment of the Loans and all other
amounts payable hereunder.
3.11 Pro Rata Treatment.
Except to the extent otherwise provided herein:
(a) Loans. Each Loan, each payment or prepayment of principal of any
Loan, each payment of interest on the Loans, each payment of Commitment
Fees, each reduction of the Revolving Committed Amount and each conversion
or extension of any Loan, shall be allocated pro rata among the Lenders in
accordance with the respective Commitment Percentages relating to such
respective Loans and Participation Interests.
(b) Advances. Unless the Agent shall have been notified in writing by any
Lender prior to a borrowing that such Lender will not make the amount that
would constitute its Commitment Percentage of such borrowing available to
the Agent, the Agent may assume that such Lender is making such amount
available to the Agent, and the Agent may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If such
amount is not made available to the Agent by such Lender within the time
period specified therefor hereunder, such Lender shall pay to the Agent, on
demand, such amount with interest thereon at a rate equal to the Federal
Funds Rate for the period until such Lender makes such amount immediately
available to the Agent. A certificate of the Agent submitted to any Lender
with respect to any amounts owing under this subsection shall be conclusive
in the absence of manifest error. If such Lender's Commitment Percentage
of such borrowing is not made available to the Agent by such Lender within
two Business Days of the date of the related borrowing, (i) the Agent shall
notify the Borrower of the failure of such Lender to make such amount
available to the Agent and the Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum applicable to Base Rate
Loans hereunder, on demand, from the Borrower and (ii) then the Borrower
may, without waiving any rights it may have against such Lender, borrow a
like amount on an unsecured basis from any commercial bank for a period
ending on the date upon which such Lender does in fact make such borrowing
available, provided that at the time such borrowing is made and at all
times while such amount is outstanding the Borrower would be permitted to
borrow such amount pursuant to subsection 2.1 of this Credit Agreement.
3.12 Sharing of Payments.
The Lenders agree among themselves that, in the event that any Lender
shall obtain payment in respect of any Loan or any other obligation owing to
such Lender under this Credit Agreement through the exercise of a right of
setoff, banker's lien or counterclaim, 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, in excess of its pro rata share of such payment as provided for
in this Credit Agreement, such Lender shall promptly purchase from the other
Lenders a participation in such Loans and other obligations in such amounts, and
make such other adjustments from time to time, as shall be equitable to the end
that all Lenders share such payment in accordance with their respective ratable
shares as provided for in this Credit Agreement. The Lenders further agree
among themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of setoff, banker's lien, counterclaim or other event as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by repurchase of a
participation theretofore sold, return its share of that benefit (together with
its share of any accrued interest payable with respect thereto) to each Lender
whose payment shall have been rescinded or otherwise restored. The Borrower
agrees that any Lender so purchasing such a participation may, to the fullest
extent permitted by law, exercise all rights of payment, including setoff,
banker's lien or counterclaim, with respect to such participation as fully as if
such Lender were a holder of such Loan or other obligation in the amount of such
participation. Except as otherwise expressly provided in this Credit Agreement,
if any Lender or the Agent shall fail to remit to the Agent or any other Lender
an amount payable by such Lender or the Agent to the Agent or such other Lender
pursuant to this Credit Agreement on the date when such amount is due, such
payments shall be made together with interest thereon for each date from the
date such amount is due until the date such amount is paid to the Agent or such
other Lender at a rate per annum equal to the Federal Funds Rate. If under any
applicable bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a setoff to which this Section 3.12 applies, such
Lender shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders under this
Section 3.12 to share in the benefits of any recovery on such secured claim.
3.13 Place and Manner of Payments.
Except as otherwise specifically provided herein, all payments hereunder
shall be made to the Agent in dollars in immediately available funds, without
offset, deduction, counterclaim or withholding of any kind, at its offices at
the Agent's office specified in Schedule 11.2 not later than 2:00 P.M.
(Charlotte, North Carolina time) on the date when due. Payments received after
such time shall be deemed to have been received on the next succeeding Business
Day. The Agent may (but shall not be obligated to) debit the amount of any such
payment which is not made by such time to any ordinary deposit account of the
Borrower maintained with the Agent (with notice to the Borrower). The Borrower
shall, at the time it makes any payment under this Credit Agreement, specify to
the Agent the Loans, Fees or other amounts payable by the Borrower hereunder to
which such payment is to be applied (and in the event that it fails so to
specify, or if such application would be inconsistent with the terms hereof, the
Agent shall distribute such payment to the Lenders in such manner as the Agent
may determine to be appropriate in respect of obligations owing by the Borrower
hereunder, subject to the terms of Section 3.11). The Agent will distribute
such payments to such Lenders, if any such payment is received prior to 2:00
p.m. (Charlotte, North Carolina time) on a Business Day in like funds as
received prior to the end of such Business Day and otherwise the Agent will
distribute such payment to such Lenders on the next succeeding Business Day.
Whenever any payment hereunder shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day (subject to accrual of interest and Fees for the period of such
extension), except that in the case of Eurodollar Loans, if the extension would
cause the payment to be made in the next following calendar month, then such
payment shall instead be made on the next preceding Business Day. Except as
expressly provided otherwise herein, all computations of interest and fees shall
be made on the basis of actual number of days elapsed over a year of 360 days,
except with respect to computation of interest on Base Rate Loans which shall be
calculated based on a year of 365 or 366 days, as appropriate. Interest shall
accrue from and include the date of borrowing, but exclude the date of payment.
3.14 Indemnification; Nature of Issuing Lender's Duties.
(a) In addition to its other obligations under Section 2.4, the Borrower
hereby agrees to protect, indemnify, pay and save each Issuing Lender
harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) that the Issuing Lender may incur or be subject to as a
consequence, direct or indirect, of (A) the issuance of any Letter of
Credit or (B) the failure of the Issuing Lender to honor a drawing under a
Letter of Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
governmental authority (all such acts or omissions, herein called
"Government Acts").
(b) As between the Borrower and the Issuing Lender, the Borrower shall
assume all risks of the acts, omissions or misuse of any Letter of Credit
by the beneficiary thereof. The Issuing Lender shall not be responsible:
(i) for the form, validity, sufficiency, accuracy, genuineness or legal
effect of any document submitted by any party in connection with the
application for and issuance of any Letter of Credit, even if it should in
fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign
any Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, that may prove to be invalid or ineffective
for any reason; (iii) for failure of the beneficiary of a Letter of Credit
to comply fully with conditions required in order to draw upon a Letter of
Credit; (iv) for errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, cable, telegraph, telex or otherwise,
whether or not they be in cipher; (v) for errors in interpretation of
technical terms; (vi) for any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under a
Letter of Credit or of the proceeds thereof; and (vii) for any consequences
arising from causes beyond the control of the Issuing Lender, including,
without limitation, any Government Acts. None of the above shall affect,
impair, or prevent the vesting of the Issuing Lender's rights or powers
hereunder.
(c) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the
Issuing Lender, under or in connection with any Letter of Credit or the
related certificates, if taken or omitted in good faith, shall not put such
Issuing Lender under any resulting liability to the Borrower. It is the
intention of the parties that this Credit Agreement shall be construed and
applied to protect and indemnify the Issuing Lender against any and all
risks involved in the issuance of the Letters of Credit, all of which risks
are hereby assumed by the Borrower, including, without limitation, any and
all risks of the acts or omissions, whether rightful or wrongful, of any
present or future Government Acts. The Issuing Lender shall not, in any
way, be liable for any failure by the Issuing Lender or anyone else to pay
any drawing under any Letter of Credit as a result of any Government Acts
or any other cause beyond the control of the Issuing Lender.
(d) Nothing in this Section 3.14 is intended to limit the reimbursement
obligation of the Borrower contained in Section 2.4(d) hereof. The
obligations of the Borrower under this Section 3.14 shall survive the
termination of this Agreement. No act or omissions of any current or prior
beneficiary of a Letter of Credit shall in any way affect or impair the
rights of the Issuing Lender to enforce any right, power or benefit under
this Credit Agreement.
(e) Notwithstanding anything to the contrary contained in this Section
3.14, the Borrower shall have no obligation to indemnify any Issuing Lender
in respect of any liability incurred by such Issuing Lender arising out of
the gross negligence or willful misconduct of the Issuing Lender (including
action not taken by an Issuing Lender), as determined by a court of
competent jurisdiction.
SECTION 4
GUARANTY
4.1 The Guaranty.
Each of the Guarantors hereby jointly and severally guarantees to each
Lender, the Agent and the Issuing Lender as hereinafter provided the prompt
payment of the Credit Party Obligations in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) strictly in accordance with the terms thereof.
The Guarantors hereby further agree that if any of the Credit Party Obligations
are not paid in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or
otherwise), the Guarantors will, jointly and severally, promptly pay the same,
without any demand or notice whatsoever, and that in the case of any extension
of time of payment or renewal of any of the Credit Party Obligations, the same
will be promptly paid in full when due (whether at extended maturity, as a
mandatory prepayment, by acceleration, as a mandatory cash collateralization or
otherwise) in accordance with the terms of such extension or renewal.
Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents, the obligations of each Guarantor hereunder shall
be limited to an aggregate amount equal to the largest amount that would not
render its obligations hereunder subject to avoidance under Section 548 of the
U.S. Bankruptcy Code or any comparable provisions of any applicable state law.
4.2 Obligations Unconditional.
The obligations of the Guarantors under Section 4.1 hereof are joint and
several, absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Credit Documents, or any
other agreement or instrument referred to therein, or any substitution, release
or exchange of any other guarantee of or security for any of the Credit Party
Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section 4.2 that the obligations of the Guarantors
hereunder shall be absolute and unconditional under any and all circumstances.
Without limiting the generality of the foregoing, it is agreed that the
occurrence of any one or more of the following shall not alter or impair the
liability of any Guarantor hereunder which shall remain absolute and
unconditional as described above:
(i) at any time or from time to time, without notice to any Guarantor, the
time for any performance of or compliance with any of the Credit Party
Obligations shall be extended, or such performance or compliance shall be
waived;
(ii) any of the acts mentioned in any of the provisions of any of the
Credit Documents or any other agreement or instrument referred therein
shall be done or omitted;
(iii) the maturity of any of the Credit Party Obligations shall be
accelerated, or any of the Credit Party Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the
Credit Documents or any other agreement or instrument referred to therein
shall be waived, continued, surrendered, compromised or settled or any
other guarantee of any of the Credit Party Obligations or any security
therefor shall be released or exchanged in whole or in part or otherwise
dealt with;
(iv) any Lien granted to, or in favor of, the Agent or any Lender or
Lenders as security for any of the Credit Party Obligations shall fail to
attach or be perfected; or
(v) any of the Credit Party Obligations shall be determined to be void or
voidable (including, without limitation, for the benefit of any creditor of
any Credit Party) or shall be subordinated to the claims of any Person
(including, without limitation, any creditor of any Credit Party).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or any Lender exhaust any right,
power or remedy or proceed against any Person under any of the Credit Documents
or any other agreement or instrument referred to therein, or against any other
Person under any other guarantee of, or security for, any of the Credit Party
Obligations.
4.3 Reinstatement.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, fees of counsel) incurred by the Agent or such
Lender in connection with such rescission or restoration, including any such
costs and expenses incurred in defending against any claim alleging that such
payment constituted a preference, fraudulent transfer or similar payment under
any bankruptcy, insolvency or similar law.
4.4 Certain Additional Waivers.
Without limiting the generality of the provisions of any other Section of
this Section 4, each Guarantor hereby specifically waives the benefits of N.C.
Gen. Stat. Section 26-7 through 26-9, inclusive. Each Guarantor further agrees
that such Guarantor shall have no right of recourse to security for the Credit
Party Obligations. Each of the Guarantors further agrees that it shall have no
right of subrogation, reimbursement or indemnity, nor any right of recourse to
security, if any, for the Credit Party Obligations so long as any amounts
payable to the Agent, the Lenders or the Issuing Lender in respect of the Credit
Party Obligations shall remain outstanding and until all of the Commitments
shall have expired or been terminated.
4.5 Remedies.
The Guarantors agree that, as between the Guarantors, on the one hand, and
the Agent, the Lenders and the Issuing Lender, on the other hand, the Credit
Party Obligations may be declared to be forthwith due and payable as provided in
Section 9 hereof (and shall be deemed to have become automatically due and
payable in the circumstances provided in said Section 9) for purposes of Section
4.1 hereof notwithstanding any stay, injunction or other prohibition preventing
such declaration (or preventing such Credit Party Obligations from becoming
automatically due and payable) as against any other Person and that, in the
event of such declaration (or such Credit Party Obligations being deemed to have
become automatically due and payable), such Credit Party Obligations (whether or
not due and payable by any other Person) shall forthwith become due and payable
by the Guarantors for purposes of said Section 4.1.
4.6 Continuing Guarantee.
The guarantee in this Section 4 is a continuing guarantee, and shall apply
to all Credit Party Obligations whenever arising.
SECTION 5
CONDITIONS
5.1 Conditions to Closing Date.
This Credit Agreement shall become effective upon the satisfaction of the
following conditions precedent:
(a) Execution of Agreement. The Agent shall have received (i) multiple
counterparts of this Credit Agreement for each Lender and (ii) for the
account of each Lender, a Revolving Note, and for the account of the
Swingline Lender, the Swingline Note, in each case, executed by a duly
authorized officer of each party thereto.
(b) Liability and Casualty Insurance. The Agent shall have received
copies of insurance policies or certificates of insurance evidencing
liability and casualty insurance meeting the requirements set forth herein,
together with evidence of payment of premiums thereon.
(c) Financial Information. The Agent shall have received copies of
audited consolidated financial statements for the Borrower and its
Subsidiaries for fiscal years 1996, 1997 and 1998.
(d) Corporate Documents. The Agent shall have received the following:
(i) Articles of Incorporation. Copies of the articles of
incorporation or charter documents of the Borrower and each of the
other Credit Parties certified to be true and complete as of a recent
date by the appropriate governmental authority of the state of its
incorporation.
(ii) Resolutions. Copies of resolutions of the Board of
Directors of the Borrower and each of the other Credit Parties
approving and adopting the Credit Documents, the transactions
contemplated therein and authorizing execution and delivery thereof,
certified by a secretary or assistant secretary as of the Closing Date
to be true and correct and in force and effect as of such date.
(iii) Bylaws. A copy of the bylaws of the Borrower and each
of the other Credit Parties certified by a secretary or assistant
secretary as of the Closing Date to be true and correct and in force
and effect as of such date.
(iv) Good Standing. Copies of (i) certificates of good standing,
existence or its equivalent with respect to the Borrower and each of
the other Credit Parties certified as of a recent date by the
appropriate governmental authorities of the state of incorporation and
each other state in which the failure to so qualify and be in good
standing would have a material adverse effect on the business or
operations of the Borrower or other Credit Party in such state and
(ii) a certificate indicating payment of all corporate franchise taxes
certified as of a recent date by the appropriate governmental taxing
authorities.
(e) Officer's Certificate. The Agent shall have received, with a
counterpart for each Lender, a certificate of a duly authorized officer of
each of the Borrower and each of the other Credit Parties dated the
Effective Date, substantially in the form of Schedule 5.1(j) with
appropriate insertions and attachments.
(f) Legal Opinion of Counsel. The Agent shall have received, with a copy
for each Lender, an opinion of Quarles & Brady, counsel for the Borrower
and the Guarantors, dated the Closing Date and addressed to the Agent and
the Lenders, in form and substance satisfactory to the Agent and the
Required Lenders.
(g) Fees. The Agent shall have received all fees, if any, owing pursuant
to the Agent's Fee Letter, Section 3.4 or otherwise (including any upfront
fees payable to the Lenders).
(h) Subsection 5.2 Conditions. The conditions specified in subsections
5.2(a) and (b) shall be satisfied on the Closing Date as if Loans were to
be made on such date.
(i) Additional Matters. All other documents and legal matters in
connection with the transactions contemplated by this Credit Agreement
shall be reasonably satisfactory in form and substance to the Agent and its
counsel.
5.2 Conditions to All Extensions of Credit.
The obligation of each Lender to make any Extension of Credit hereunder
(including the initial Loans to be made hereunder) is subject to the
satisfaction of the following conditions precedent on the date of making such
Extension of Credit:
(a) Representations and Warranties. The representations and warranties
made by the Borrower and the other Credit Parties herein or which are
contained in any certificate furnished at any time under or in connection
herewith shall be true and correct in all material respects on and as of
the date of such Extension of Credit as if made on and as of such date.
(b) No Default or Event of Default. No Default or Event of Default shall
have occurred and be continuing on such date or after giving effect to the
Extension of Credit to be made on such date unless such Default or Event of
Default shall have been waived in accordance with this Credit Agreement.
(c) Additional Conditions to Revolving Loans. If such Loan is made
pursuant to subsection 2.1, all conditions set forth in such subsection
shall have been satisfied.
(d) Additional Conditions to Swingline Loan. If such Loan is made
pursuant to subsection 2.2 all conditions set forth in such subsection
shall have been satisfied.
(e) Additional Conditions to Letters of Credit. If such Extension of
Credit is made pursuant to subsection 2.3 all conditions set forth in such
subsection shall have been satisfied.
Each request for Extension of Credit and each acceptance by the Borrower
of an Extension of Credit shall be deemed to constitute a representation and
warranty by the Borrower as of the date of such Extension of Credit that the
applicable conditions in paragraphs (a) and (b), and in (c), (d) or (e) of this
subsection have been satisfied.
SECTION 6
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make the
Extensions of Credit herein provided for, each of the Credit Parties hereby
represents and warrants to the Agent and to each Lender that:
6.1 Financial Condition.
The audited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at December 31, 1998, and the related consolidated
statements of income and of cash flows for the fiscal year ended on such date,
reported on by Coopers & Lybrand LLP, copies of which have heretofore been
furnished to each Lender, are complete and correct and present fairly the
consolidated financial condition of the Borrower and its consolidated
Subsidiaries as at such date, and the consolidated results of their operations
and their consolidated cash flows for the fiscal year then ended. All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as disclosed therein). Neither the Borrower nor any of
its consolidated Subsidiaries had, at the date of the balance sheets referred to
above, any material Guaranty Obligation, contingent liabilities or liability for
taxes, long-term lease or unusual forward or long-term commitment, including,
without limitation, any material interest rate or foreign currency swap or
exchange transaction, which is not reflected in the foregoing statements or in
the notes thereto.
6.2 No Change.
Since December 31, 1998 there has been no development or event which has
had a Material Adverse Effect.
6.3 Corporate Existence; Compliance with Law.
Each of the Borrower and its Subsidiaries (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (b) has the corporate or partnership power and authority and the
legal right to own and operate all its material property, to lease the material
property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign corporation or partnership
and in good standing under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires such
qualification except to the extent that the failure to so qualify or be in good
standing would not, in the aggregate, have a Material Adverse Effect and (d) is
in compliance with all Requirements of Law except to the extent that the failure
to comply therewith would not, in the aggregate, reasonably be expected to have
a Material Adverse Effect.
6.4 Corporate Power; Authorization; Enforceable Obligations .
Each of the Borrower and the other Credit Parties has full power and
authority and the legal right to make, deliver and perform the Credit Documents
to which it is party and has taken all necessary corporate action to authorize
the execution, delivery and performance by it of the Credit Documents to which
it is party. No consent or authorization of, filing with, notice to or other
act by or in respect of, any Governmental Authority or any other Person is
required in connection with the borrowings hereunder or with the execution,
delivery or performance of any Credit Document by the Borrower or the other
Credit Parties (other than those which have been obtained) or with the validity
or enforceability of any Credit Document against the Borrower or the Guarantors.
Each Credit Document to which it is a party has been duly executed and delivered
on behalf of the Borrower or the other Credit Parties, as the case may be. Each
Credit Document to which it is a party constitutes a legal, valid and binding
obligation of the Borrower or the Guarantors, as the case may be, enforceable
against the Borrower or the other Credit Parties, as the case may be, in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
6.5 No Legal Bar; No Default.
The execution, delivery and performance of the Credit Documents, the
borrowings thereunder and the use of the proceeds of Extensions of Credit will
not violate any Requirement of Law or any Contractual Obligation of the Borrower
or its Subsidiaries (except those as to which waivers or consents have been
obtained), and will not result in, or require, the creation or imposition of any
Lien on any of its or their respective properties or revenues pursuant to any
Requirement of Law or Contractual Obligation other than the Liens arising under
or contemplated in connection with the Credit Documents. Neither the Borrower
nor any of its Subsidiaries is in default under or with respect to any of its
Contractual Obligations in any respect which would reasonably be expected to
have a Material Adverse Effect. No Default or Event of Default has occurred and
is continuing.
6.6 No Material Litigation.
Except as set forth in Schedule 6.6, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the best knowledge of the Borrower and the other Credit Parties, threatened
by or against the Borrower or any of its Subsidiaries or against any of its or
their respective properties or revenues (a) with respect to the Credit Documents
or any Loan or any of the transactions contemplated hereby, or (b) which, if
adversely determined, would reasonably be expected to have a Material Adverse
Effect.
6.7 Investment Company Act.
Neither the Borrower nor any of the other Credit Parties is an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
6.8 Federal Regulations.
No part of the proceeds of any Loan hereunder will be used directly or
indirectly for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect. The Borrower
and its Subsidiaries taken as a group do not own "margin stock" except as
identified in the financial statements referred to in Section 6.1 and the
aggregate value of all "margin stock" owned by the Borrower and its Subsidiaries
taken as a group does not exceed 25% of the value of their assets.
6.9 ERISA.
Neither a Reportable Event nor an "accumulated funding deficiency" (within
the meaning of Section 412 of the Code or Section 302 of ERISA) has occurred
during the five-year period prior to the date on which this representation is
made or deemed made with respect to any Plan, and each Plan has complied in all
material respects with the applicable provisions of ERISA and the Code, except
to the extent that any such occurrence or failure to comply would not reasonably
be expected to have a Material Adverse Effect. No termination of a Single
Employer Plan has occurred resulting in any liability that has remained
underfunded, and no Lien in favor of the PBGC or a Plan has arisen, during such
five-year period which would reasonably be expected to have a Material Adverse
Effect. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by an amount which, as determined in accordance with GAAP,
would reasonably be expected to have a Material Adverse Effect. Neither the
Borrower nor any Commonly Controlled Entity is currently subject to any
liability for a complete or partial withdrawal from a Multiemployer Plan which
would reasonably be expected to have a Material Adverse Effect. For purposes of
this Section 6.9 only, the parties hereto agree that "Material Adverse Effect"
shall include any event referred to in this Section 6.9 which would (or could be
reasonably expected to) cause a reduction in Consolidated Net Worth of ten
percent (10%) or more.
6.10 Environmental Matters.
Except to the extent that all of the following, in the aggregate, would
not reasonably be expected to have a Material Adverse Effect:
(a) To the best knowledge of the Borrower and the other Credit Parties,
the facilities and properties owned, leased or operated by the Borrower or
any of its Subsidiaries (the "Properties") do not contain any Materials of
Environmental Concern in amounts or concentrations which (i) constitute a
violation of, or (ii) could give rise to liability under, any Environmental
Law.
(b) To the best knowledge of the Borrower and the other Credit Parties,
the Properties and all operations at the Properties are in compliance, and
have in the last five years been in compliance, in all material respects
with all applicable Environmental Laws, and there is no contamination at,
under or about the Properties or violation of any Environmental Law with
respect to the Properties or the business operated by the Borrower or any
of its Subsidiaries (the "Business").
(c) Neither the Borrower nor any of its Subsidiaries has received any
notice of violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the Business,
nor do the Borrower nor the other Credit Parties have knowledge or reason
to believe that any such notice will be received or is being threatened.
(d) To the best knowledge of the Borrower and the other Credit Parties,
Materials of Environmental Concern have not been transported or disposed of
from the Properties in violation of, or in a manner or to a location which
could give rise to liability under any Environmental Law, nor have any
Materials of Environmental Concern been generated, treated, stored or
disposed of at, on or under any of the Properties in violation of, or in a
manner that could give rise to liability under, any applicable
Environmental Law.
(e) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Borrower and the other Credit Parties,
threatened, under any Environmental Law to which the Borrower or any
Subsidiary is or will be named as a party with respect to the Properties or
the Business, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with respect
to the Properties or the Business.
(f) To the best knowledge of the Borrower and the other Credit Parties,
there has been no release or threat of release of Materials of
Environmental concern at or from the Properties, or arising from or related
to the operations of the Borrower or any Subsidiary in connection with the
Properties or otherwise in connection with the Business, in violation of or
in amounts or in a manner that could give rise to liability under
Environmental Laws.
6.11 Use of Proceeds.
Extensions of Credit hereunder may be used solely to (i) refinance
Indebtedness under the Prior Credit Agreement and (ii) provide for working
capital and other general corporate purposes, including capital expenditures and
acquisitions not prohibited by this Credit Agreement.
6.12 Subsidiaries.
Set forth on Schedule 6.12 is a complete and accurate list of all
Subsidiaries of the Borrower. Information on the attached Schedule includes
state of incorporation; the number of shares of each class of capital stock or
other equity interests outstanding; the number and percentage of outstanding
shares of each class of stock; and the number and effect, if exercised, of all
outstanding options, warrants, rights of conversion or purchase and similar
rights. The outstanding capital stock and other equity interests of all such
Subsidiaries is validly issued, fully paid and non-assessable and is owned, free
and clear of all Liens (other than those arising under or contemplated in
connection with the Credit Documents). Subject to the terms of this Agreement,
the Borrower may, from time to time, amend Schedule 6.12 by delivering
(effective upon receipt) to the Agent and each Lender a copy of such amended
Schedule 6.12 which shall (i) be dated the date of delivery, (ii) be certified
by a duly authorized officer of the Borrower as true, complete and correct as of
such date as delivered in replacement for the Schedule 6.12 previously in
effect, and (iii) show in reasonable detail (by blacklining or other appropriate
graphic means) the changes from the predecessor Schedule 6.12.
6.13 Taxes.
Each of the Borrower and its Subsidiaries has filed, or caused to be
filed, all material tax returns (Federal, state, local and foreign) required to
be filed and paid all taxes shown thereon to be due (including interest and
penalties) and has paid all other taxes, fees, assessments and other
governmental charges (including mortgage recording taxes, documentary stamp
taxes and intangibles taxes) owing by them, except for such taxes (i) which are
not yet delinquent or (ii) as are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. The Borrower is not aware of any proposed material tax
assessments against it or any of its Subsidiaries.
6.14 Solvency.
The Borrower and its Subsidiaries, both collectively and individually, is
and, after execution of this Credit Agreement and after giving effect to the
Indebtedness and Guarantee Obligations incurred hereunder, will be Solvent.
6.15 Year 2000 Compliance.
The Credit Parties have (i) reviewed and assessed all areas within its and
each of its Subsidiaries' business and operations (including those affected by
suppliers, vendors and customers) that could be adversely affected by the "Year
2000 Problem" (that is, the risk that computer applications used by the Borrower
or any of its Subsidiaries (or suppliers, vendors and customers) may be unable
to recognize and perform properly date-sensitive functions involving certain
dates prior to and any date after December 31, 1999), (ii) developed a plan and
timeline for addressing the Year 2000 Problem on a timely basis, and (iii) to
date, implemented that plan in accordance with that timetable. Based on the
foregoing, each of the Credit Parties believes that all computer applications
(including those of its suppliers, vendors and customers) that are material to
its or any of its Subsidiaries' business and operations are reasonably expected
on a timely basis to be able to perform properly date-sensitive functions for
all dates before and after January 1, 2000 (that is, be "Year 2000 Compliant"),
except to the extent that a failure to do so could not reasonably be expected to
have a Material Adverse Effect.
6.16 Licenses, Permits and Franchises.
Each of the Credit Parties has obtained and maintained in full force and
effect all licenses, permits, franchises or other certifications, consents,
approvals and authorizations, governmental or private, necessary to the
ownership of its property and to the conduct of its business, except to the
extent that a failure to do so could not reasonably be expected to have a
Material Adverse Effect.
SECTION 7
AFFIRMATIVE COVENANTS
Each of the Credit Parties hereby covenants and agrees that on the Closing
Date, and thereafter for so long as this Credit Agreement is in effect and until
the Commitments have terminated, no Note or Letter of Credit remains outstanding
and unpaid and the Obligations, together with interest, Commitment Fees and all
other amounts owing to the Agent or any Lender hereunder, are paid in full, the
Borrower shall, and in the case of subsections 7.3, 7.4, 7.5, 7.6, 7.7, 7.8,
7.10 and 7.11 shall cause each of its Subsidiaries, to:
7.1 Financial Statements.
Furnish to the Agent and each of the Lenders:
(a) Annual Financial Statements. As soon as available, but in any event
within 90 days after the end of each fiscal year of the Borrower, a copy of
the consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such fiscal year and the related consolidated
statements of income and retained earnings and of cash flows of the
Borrower and its consolidated Subsidiaries for such year, audited by
Coopers & Lybrand or other firm of independent certified public accountants
of nationally recognized standing reasonably acceptable to the Required
Lenders, setting forth in each case in comparative form the figures for the
previous year, reported on without a "going concern" or like qualification
or exception, or qualification indicating that the scope of the audit was
inadequate to permit such independent certified public accountants to
certify such financial statements without such qualification; and
(b) Quarterly Financial Statements. As soon as available and in any event
within 45 days after the end of each of the first three fiscal quarters of
the Borrower, a company-prepared consolidated balance sheet of the Borrower
and its consolidated Subsidiaries as at the end of such period and related
company-prepared statements of income and retained earnings and of cash
flows for the Borrower and its consolidated Subsidiaries for such quarterly
period and for the portion of the fiscal year ending with such period, in
each case setting forth in comparative form consolidated figures for the
corresponding period or periods of the preceding fiscal year (subject to
normal recurring year-end audit adjustments).
all such financial statements to be complete and correct in all material
respects (subject, in the case of interim statements, to normal recurring year-
end audit adjustments) and to be prepared in reasonable detail and in accordance
with GAAP applied consistently throughout the periods reflected therein (except
as approved by such accountants or Responsible Officer, as the case may be, and
disclosed therein) and further accompanied by a description of, and an
estimation of the effect on the financial statements on account of, a change in
the application of accounting principles as provided in Section 1.3.
7.2 Certificates; Other Information.
Furnish to the Agent and each of the Lenders:
(a) concurrently with the delivery of the financial statements referred to
in subsection 7.1(a) above, a certificate of the independent certified
public accountants reporting on such financial statements stating that in
making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements referred to
in Sections 7.1(a) and 7.1(b) above, a certificate of a Responsible Officer
stating that, to the best of such Responsible Officer's knowledge, the
Borrower during such period observed or performed in all material respects
all of its covenants and other agreements, and satisfied in all material
respects every material condition, contained in this Agreement to be
observed, performed or satisfied by it, and that such Responsible Officer
has obtained no knowledge of any Default or Event of Default except as
specified in such certificate and such certificate shall include the
calculation required to indicate compliance with Section 7.9;
(c) within thirty days after the same are sent, copies of all reports
(other than those otherwise provided pursuant to subsection 7.1) and other
financial information which the Borrower sends to its stockholders, and
within thirty days after the same are filed, copies of all financial
statements and non-confidential reports which the Borrower may make to, or
file with, the Securities and Exchange Commission or any successor or
analogous Governmental Authority;
(d) promptly, such additional financial and other information as the
Agent, at the request of any Lender, may from time to time reasonably
request.
7.3 Payment of Obligations.
Pay, discharge or otherwise satisfy at or before maturity or before they
become delinquent, as the case may be, in accordance with industry practice
(subject, where applicable, to specified grace periods) all its material
obligations of whatever nature and any additional costs that are imposed as a
result of any failure to so pay, discharge or otherwise satisfy such obligations
(including without limitation, obligations to pay taxes), except when the amount
or validity of such obligations and costs is currently being contested in good
faith by appropriate proceedings and reserves, if applicable, in conformity with
GAAP with respect thereto have been provided on the books of the Borrower or its
Subsidiaries, as the case may be.
7.4 Conduct of Business and Maintenance of Existence.
Continue to engage in business of the same general type as now conducted
by it on the date hereof and preserve, renew and keep in full force and effect
its corporate existence and take all reasonable action to maintain all rights,
privileges, licenses, permits and franchises necessary or desirable in the
normal conduct of its business; comply with all Contractual Obligations and
Requirements of Law applicable to it except to the extent that failure to comply
therewith would not, in the aggregate, have a Material Adverse Effect.
7.5 Maintenance of Property; Insurance.
Keep all material property useful and necessary in its business in good
working order and condition (ordinary wear and tear excepted); maintain with
financially sound and reputable insurance companies insurance on all its
material property in at least such amounts and against at least such risks as
are usually insured against in the same general area by companies engaged in the
same or a similar business; and furnish to the Agent, upon written request, full
information as to the insurance carried; provided, however, that the Borrower
and its Subsidiaries may maintain self insurance plans to the extent companies
of similar size and in similar businesses do so.
7.6 Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its businesses and activities; and
permit, during regular business hours and upon reasonable notice by the Agent,
the Agent and, after the occurrence and during the continuance of an Event of
Default, any of the Lenders to visit and inspect any of its properties and
examine and make abstracts from any of its books and records (other than
materials protected by the attorney-client privilege and materials which the
Borrower may not disclose without violation of a confidentiality obligation
binding upon it) at any reasonable time and as often as may reasonably be
desired, and to discuss the business, operations, properties and financial and
other condition of the Borrower and its Subsidiaries with officers and employees
of the Borrower and its Subsidiaries and with its independent certified public
accountants.
7.7 Notices.
Give notice to the Agent (which shall promptly transmit such notice to
each Lender) of:
(a) immediately (and in any event within two (2) Business Days) after the
Borrower knows or has reason to know thereof, the occurrence of any Default
or Event of Default;
(b) promptly, any default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or the Borrower which
would reasonably be expected to have a Material Adverse Effect;
(c) promptly, any litigation, or any investigation or proceeding
(including without limitation, any governmental or environmental
proceeding) known to the Borrower, affecting the Borrower or any of its
Subsidiaries or the Borrower which, if adversely determined, would
reasonably be expected to have a Material Adverse Effect;
(d) as soon as possible and in any event within 30 days after the Borrower
knows or has reason to know thereof: (i) the occurrence or expected
occurrence of any Reportable Event with respect to any Plan, a failure to
make any required contribution to a Plan, the creation of any Lien in favor
of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the PBGC or
the Borrower or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from, or the terminating, Reorganization or
Insolvency of, any Plan; and
(e) promptly, any other development or event which would reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto.
7.8 Environmental Laws.
(a) Comply in all material respects with, and ensure compliance in all
material respects by all tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply in all material
respects with and maintain, and ensure that all tenants and subtenants
obtain and comply in all material respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws except to the extent that failure to do so
would not reasonably be expected to have a Material Adverse Effect;
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities regarding
Environmental Laws except to the extent that the same are being contested
in good faith by appropriate proceedings and the pendency of such
proceedings would not reasonably be expected to have a Material Adverse
Effect; and
(c) Defend, indemnify and hold harmless the Agent and the Lenders, and
their respective employees, agents, officers and directors, from and
against any and all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known
or unknown, contingent or otherwise, arising out of, or in any way relating
to the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of the Borrower, any of its
Subsidiaries or the Properties, or any orders, requirements or demands of
Governmental Authorities related thereto, including, without limitation,
reasonable attorney's and consultant's fees, investigation and laboratory
fees, response costs, court costs and litigation expenses, except to the
extent that any of the foregoing arise out of the gross negligence or
willful misconduct of the party seeking indemnification therefor. The
agreements in this paragraph shall survive repayment of the Notes and all
other amounts payable hereunder.
7.9 Financial Covenants.
(a) Consolidated Net Worth. At all times, Consolidated Net Worth shall be
not less than the sum of $120 million plus on the last day of each fiscal
quarter to occur after September 30, 1998, fifty percent (50%) of Consolidated
Net Income for the fiscal quarter then ended (but not less than zero), such
increases to be cumulative, plus fifty percent (50%) of the Net Proceeds from
Equity Transactions occurring after the Closing Date.
(b) Consolidated Leverage Ratio. As of the end of each fiscal quarter,
the Consolidated Leverage Ratio shall be not greater than 3.25:1.0.
(c) Consolidated Interest Coverage Ratio. As of the end of each fiscal
quarter, the Consolidated Interest Coverage Ratio shall be not less than
2.5:1.0.
7.10 Additional Subsidiary Guarantors.
Where Domestic Subsidiaries of the Borrower which are not Guarantors
hereunder (the "Non-Guarantor Domestic Subsidiaries") shall, as a group, at any
time constitute more than either
(i) two percent (2%), in any instance, or five percent (5%), in the
aggregate, of consolidated total assets, or
(ii) two percent (2%), in any instance, or five percent (5%), in the
aggregate, of Consolidated EBITDA,
(collectively, the "Threshold Requirement"), then the Borrower will promptly
notify the Agent thereof, and promptly cause one or more Domestic Subsidiaries
to become a "Guarantor" hereunder by way of execution of a Joinder Agreement,
together with supporting resolutions, incumbency certificates, corporate
formation and organizational documentation and opinions of counsel as the Agent
may reasonably request, such that immediately after the joinder of such
Subsidiaries as Guarantors hereunder, the remaining Non-Guarantor Domestic
Subsidiaries shall not, individually or as a group, exceed the Threshold
Requirement.
7.11 Year 2000 Compatibility.
Take all action reasonably necessary to assure that its computer based
systems are able to operate and effectively process data including dates on and
after January 1, 2000, and, at the reasonable request of the Agent or the
Required Lenders, provide evidence to the Lenders of such year 2000
compatibility.
7.12 Amendment of Note Purchase Agreement.
Within thirty (30) days of the Closing Date, furnish to the Agent a
certified copy of an amendment to the Note Purchase and Private Shelf
Agreement, which amendment shall be in form and substance satisfactory to
the Agent and the Required Lenders and which amendment shall modify the
covenants therein such that such covenants shall be consistent with the
covenants contained herein.
SECTION 8
NEGATIVE COVENANTS
Each of the Credit Parties hereby covenants and agrees that on the Closing
Date, and thereafter for so long as this Agreement is in effect and until the
Commitments have terminated, no Note or Letter of Credit remains outstanding and
unpaid and the Obligations, together with interest, Commitment Fees and all
other amounts owing to the Agent or any Lender hereunder, are paid in full, the
Borrower shall, and shall cause each of its Subsidiaries and the Borrower, to:
8.1 Indebtedness.
The Borrower will not, nor will it permit any Subsidiary to, contract,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising or existing under this Agreement and the other
Credit Documents;
(b) Indebtedness existing as of the Closing Date and set out in Schedule
8.1(b) and amendments, renewals, refinancings or extensions thereof in a
principal amount not in excess of that outstanding as of the date of such
renewal, refinancing or extension and on terms and conditions not
materially less favorable to the Borrower and its Subsidiaries than for
such existing Indebtedness;
(c) Indebtedness incurred after the Closing Date consisting of Capital
Leases or Indebtedness incurred to provide all or a portion of the purchase
price or cost of construction of an asset provided that (i) such
Indebtedness when incurred shall not exceed the purchase price or cost of
construction of such asset; (ii) no such Indebtedness shall be refinanced
for a principal amount in excess of the principal balance outstanding
thereon at the time of such refinancing; and (iii) the total aggregate
amount of all such Indebtedness of the Borrower and its subsidiaries, as a
group, shall not exceed $10,000,000 at any time outstanding;
(d) Unsecured intercompany Indebtedness between a Credit Party and another
Credit Party;
(e) Indebtedness and obligations owing under Interest Protection
Agreements relating to the Loans hereunder and currency protection
agreements and commodity purchase or option agreements entered into in
order to manage existing or anticipated interest rate, exchange rate or
commodity price risks and not for speculative purposes;
(f) Subordinated Debt of the Borrower provided that (i) the terms of
subordination and other terms and provisions of which are acceptable to the
Required Lenders in their reasonable discretion and (ii) the aggregate
principal amount of Subordinated Debt shall not exceed $150,000,000 at any
time outstanding;
(g) Guarantee Obligations of a Credit Party relating to Indebtedness of
another Domestic Credit Party otherwise permitted under this Section 8.1;
(h) Public or privately placed unsecured Funded Debt in an aggregate
amount up to $50,000,000 at any time outstanding and on terms and
conditions not materially less favorable to the Borrower and its
Subsidiaries than the terms and conditions herein;
(i) Indebtedness incurred by a Credit Party in connection with a Permitted
Sale-Leaseback Transaction, provided that the aggregate amount of such
Indebtedness shall not exceed $20,000,000 at any time outstanding;
(j) Indebtedness and obligations in connection with factoring arrangements
or similar financing arrangements involving the sale or financing of accounts or
other receivables; provided that the total attributed principal amount of all
such financings shall not exceed $25 million in the aggregate;
(k) unsecured commercial paper to the extent that the Borrower has unused
unsecured lines of credit or other availability backing up such commercial
paper;
(l) Indebtedness assumed by a Credit Party in connection with an
acquisition permitted by Section 8.4(c), provided that no Default or Event
of Default would exist after giving effect to the assumption of such
Indebtedness on a Pro Forma Basis; and
(m) other Indebtedness of the Borrower and its Subsidiaries, as a group,
which does not exceed $15,000,000 in the aggregate at any time outstanding.
8.2 Liens.
The Borrower will not, nor will it permit any Subsidiary to, contract,
create, incur, assume or permit to exist any Lien with respect to any of its
property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or hereafter acquired, except for Permitted
Liens.
8.3 Nature of Business.
The Borrower will not, nor will it permit any Subsidiary to, alter the
character of its business in any material respect from that conducted as of the
Closing Date.
8.4 Consolidation, Merger, Sale or Purchase of Assets, etc.
The Borrower will not, nor will it permit any Subsidiary to,
(a) dissolve, liquidate or wind up its affairs, sell, transfer, lease or
otherwise dispose of any substantial part of its property or assets outside
of the ordinary course of business or agree to do so at a future time
except the following, without duplication, shall be expressly permitted:
(i) Specified Sales;
(ii) the sale, transfer, lease or other disposition of property
or assets not in the ordinary course of business (other than Specified
Sales), where and to the extent that such transaction is the result of
a Recovery Event and the Net Proceeds therefrom are used to repair or
replace damaged property or to purchase or otherwise acquire new
assets or property provided that such purchase or acquisition is
committed to within 180 days of receipt of the Net Proceeds from the
Recovery Event and such purchase or acquisition is consummated within
270 days of such receipt; and
(iii) the sale, lease or transfer of property or assets by a
Credit Party other than the Borrower to a Domestic Credit Party.
As used herein, "substantial part" shall mean property and assets, the book
value of which, when added to the book value of all other assets sold,
leased or otherwise disposed of by the Borrower and its Subsidiaries (other
than in the ordinary course of business),
(i) shall in any fiscal year exceed 10% of Consolidated Tangible
Assets determined as of the end of the immediately preceding fiscal
year; or
(ii) shall from the Closing Date exceed $100 million.
(b) enter into any transaction of merger or consolidation, provided,
however, that so long as no Default or Event of Default would be directly
or indirectly caused as a result thereof,
(i) a Domestic Subsidiary may merge or consolidate with another
Domestic Subsidiary, provided that (A) the Borrower shall be the
surviving entity if it is a party thereto, and (B) a Domestic Credit
Party shall be the surviving entity if it is a party thereto or the
surviving entity becomes a Domestic Credit Party pursuant to the terms
of Section 7.10(a) immediately after the consummation of such merger
or consolidation;
(ii) a Foreign Subsidiary may merge or consolidate with any other
Foreign Subsidiary;
(iii) a Foreign Subsidiary may merge or consolidate with a
Domestic Subsidiary, provided that the Domestic Subsidiary shall be
the surviving entity and the applicable conditions set forth in
Section 7.10 are complied with in connection therewith; and
(iv) a Subsidiary may merge or consolidate with any Person that
is not a Subsidiary, provided that (A) the applicable conditions set
forth in Section 7.10 and Section 8.4(c) are complied with in
connection with such acquisition by merger or consolidation and (B)
the Board of Directors of the Person that is the subject of the
acquisition, merger or consolidation shall have consented to and
approved the acquisition, merger or consolidation.
(c) other than the Kyees Acquisition, purchase, lease or otherwise acquire
(in a single transaction or a series of related transactions) (i) all or
any portion of the capital stock or securities of any other Person or (ii)
all or any substantial part of the property or assets of any other Person,
unless:
(A) where the aggregate cost (including all cash paid, seller
financing provided, debt assumed and stock transferred in respect
thereof) of any such individual acquisition shall not exceed
$200,000,000;
(B) where the aggregate cost (including all cash paid, seller
financing provided, debt assumed and stock transferred in respect
thereof) of all such acquisitions shall not exceed $300,000,000 in any
calendar year;
(C) if after giving effect thereto such Person is not a
Subsidiary, such acquisition is permitted pursuant to Section 8.5;
(D) no Default or Event of Default would exist after giving
effect to any such acquisition on a Pro Forma Basis; and
(E) the Board of Directors of the Person that is the subject of
such acquisition shall have consented to and approved the acquisition.
8.5 Advances, Investments and Loans.
The Borrower will not, nor will it permit any Subsidiary to, lend money or
extend credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any Person except for Permitted Investments.
8.6 Transactions with Affiliates.
Except as permitted in subsection (iv) of the definition of Permitted
Investments, the Borrower will not, nor will it permit any Subsidiary to, enter
into any transaction or series of transactions, whether or not in the ordinary
course of business, with any officer, director, shareholder or Affiliate other
than on terms and conditions substantially as favorable as would be obtainable
in a comparable arm's-length transaction with a Person other than an officer,
director, shareholder or Affiliate.
8.7 Ownership of Subsidiaries.
The Borrower will not, nor will it permit any Subsidiary to, create, form
or acquire a Subsidiary, unless any such domestic Subsidiary shall become an
Additional Credit Party in accordance with the provisions of Section 7.10, or
the investment in any such foreign Subsidiary shall constitute a Permitted
Investment.
8.8 Fiscal Year.
The Borrower will not, nor will it permit any Subsidiary to, change its
fiscal year, except with the prior written consent of the Agent.
8.9 Prepayments of Indebtedness, etc.
The Borrower will not, nor will it permit any Subsidiary to,
(a) after the issuance thereof, amend or modify, or permit the amendment
or modification of, any of the terms of subordination or other terms or
provisions relating to any senior Indebtedness for borrowed money or
Subordinated Debt if such amendment or modification is reasonably adverse
to interests of the Lenders as determined by Required Lenders in their
discretion;
(b) make (or give notice with respect thereto) any voluntary or optional
payment or prepayment or redemption or acquisition for value (including,
without limitation, by way of depositing money or securities with the
trustee with respect thereto before due for the purpose of paying when due)
or exchange of any senior Indebtedness for borrowed money or Subordinated
Debt permitted pursuant to Section 8.1, except to the extent repaid from
the Net Proceeds of any Equity Transaction;
(c) make any prepayment, redemption, acquisition for value of (including,
without limitation, by way of depositing money or securities with the
trustee with respect thereto before due for the purpose of paying when due)
refund, refinance or exchange of any Subordinated Debt; or
(d) consent to or otherwise permit any amendment or modification
(including by way of waiver) to the representations, covenants or events of
default under the Note Purchase and Private Shelf Agreement or otherwise
relating to the Series A Senior Notes or Shelf Notes issued thereunder if,
and to the extent that, the terms would be less favorable to the Borrower
or the other Credit Parties in any material respect than the
representations, covenants or events of default in effect on the date of
this Credit Agreement, unless the amendment or modification conforms to
amendments or modifications under this Credit Agreement and is no less
favorable to or more restrictive on the Borrower or the Credit Parties than
the terms hereof, as amended and modified.
As used herein, "Subordinated Debt" means any indebtedness for borrowed money
which by its terms is, or upon the happening of certain events may become,
subordinated in right of payment to the Obligations hereunder and other amounts
owing hereunder or in connection herewith.
8.10 Dividends.
The Borrower will not, nor will it permit any non-wholly-owned
Subsidiaries to, make any payment, distribution or dividend (other than a
dividend or distribution payable solely in stock or equity interest of the
Person making the dividend or distribution) on or any payment on account of the
purchase, redemption or retirement of, or any other distribution on, any
partnership interest, share of any class of stock or other ownership interest in
such Person, if and to the extent that a Default or Event of Default shall exist
or would exist after giving effect thereto.
8.11 Foreign Assets.
No more than twenty-five percent (25%) of assets of the Borrower and its
Subsidiaries, taken as a whole on a consolidated basis, will at any time be held
by Foreign Subsidiaries.
SECTION 9
EVENTS OF DEFAULT
Upon the occurrence of any of the following events (each of which shall
constitute an "Event of Default"):
(a) The Borrower shall fail to pay any principal on any Note when due in
accordance with the terms thereof or hereof; or the Borrower shall fail to
reimburse the Issuing Lender for any LOC Obligations when due in accordance
with the terms hereof; or the Borrower shall fail to pay any interest on
any Note or any fee or other amount payable hereunder when due in
accordance with the terms thereof or hereof and such failure shall continue
unremedied for five (5) Business Days (or any Guarantor shall fail to pay
on the Guaranty in respect of any of the foregoing or in respect of any
other Guarantee Obligations thereunder); or
(b) Any representation or warranty made or deemed made by the Borrower or
other Credit Party herein or in any of the other Credit Documents or which
is contained in any certificate, document or financial or other statement
furnished at any time under or in connection with this Agreement shall
prove to have been incorrect, false or misleading in any material respect
on or as of the date made or deemed made; or
(c) The Borrower shall (i) default in the due performance or observance of
Section 7.7, 7.9 or 8.10, or (ii) default in the observance or performance
of any other term, covenant or agreement contained in this Agreement (other
than as described in subsections 9(a), 9(b) or 9(c)(i) above), and such
default shall continue unremedied for a period of 30 days or more; or
(d) The Borrower or any of its Subsidiaries shall (i) default in any
payment of principal of or interest on any Indebtedness (other than the
Notes) in a principal amount outstanding of at least $2,000,000 in the
aggregate for the Borrower and its Subsidiaries or in the payment of any
matured Guarantee Obligation in a principal amount outstanding of at least
$2,000,000 in the aggregate for the Borrower and its Subsidiaries beyond
the period of grace (not to exceed 30 days), if any, provided in the
instrument or agreement under which such Indebtedness or Guarantee
Obligation was created; or (ii) default in the observance or performance of
any other agreement or condition relating to any such Indebtedness in a
principal amount outstanding of at least $2,000,000 in the aggregate for
the Borrower and its Subsidiaries or Guarantee Obligation in a principal
amount outstanding of at least $2,000,000 in the aggregate for the Borrower
and its Subsidiaries or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is
to cause, or to permit the holder or holders of such Indebtedness or
beneficiary or beneficiaries of such Guarantee Obligation (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries)
to cause, with the giving of notice if required, such Indebtedness to
become due prior to its stated maturity or such Guarantee Obligation to
become payable; or
(e) (i) The Borrower or any of its Subsidiaries shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial
part of its assets, or the Borrower or any Subsidiary shall make a general
assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Borrower or any Subsidiary any case, proceeding or
other action of a nature referred to in clause (i) above which (A) results
in the entry of an order for relief or any such adjudication or appointment
or (B) remains undismissed, undischarged or unbonded for a period of 60
days; or (iii) there shall be commenced against the Borrower or any
Subsidiary any case, proceeding other action seeking issuance of a warrant
of attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order for
any such relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof; or (iv) the
Borrower or any Subsidiary shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts
set forth in clause (i), (ii), or (iii) above; or (v) the Borrower or any
Subsidiary shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
(f) One or more judgments or decrees shall be entered against the Borrower
or any of its Subsidiaries involving in the aggregate a liability (to the
extent not paid when due or covered by insurance) of $2,000,000 or more and
all such judgments or decrees shall not have been paid and satisfied,
vacated, discharged, stayed or bonded pending appeal within 60 days from
the entry thereof; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a Trustee is, in the reasonable opinion of
the Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Borrower, any of its
Subsidiaries or any Commonly Controlled Entity shall, or in the reasonable
opinion of the Required Lenders is likely to, incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization of,
any Multiemployer Plan or (vi) any other similar event or condition shall
occur or exist with respect to a Plan; and in each case in clauses (i)
through (vi) above, such event or condition, together with all other such
events or conditions, if any, could have a Material Adverse Effect; or
(h) Either (i) a "person" or a "group" (within the meaning of Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934 other than
members of management of the Borrower as of the Closing Date) becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange
Act of 1934) of more than 30% of the then outstanding voting stock of the
Borrower or (ii) a majority of the Board of Directors of the Borrower shall
consist of individuals who are not Continuing Directors; "Continuing
Director" means, as of any date of determination, (A) an individual who on
the date two years prior to such determination date was a member of the
Borrower's Board of Directors or (B) any new Director whose nomination for
election by the Borrower's shareholders was approved by a vote of at least
75% of the Directors then still in office who either were Directors on the
date two years prior to such determination date or whose nomination for
election was previously so approved; or
(i) The Guaranty or any provision thereof shall cease to be in full force
and effect or any Credit Party or any Person acting by or on behalf of any
Credit Party shall deny or disaffirm any Credit Party's obligations under
the Guaranty; or
(j) Any other Credit Document shall fail to be in full force and effect or
to give the Agent and/or the Lenders the security interests, liens, rights,
powers and privileges purported to be created thereby (except as such
documents may be terminated or no longer in force and effect in accordance
with the terms thereof, other than those indemnities and provisions which
by their terms shall survive);
then, and in any such event, (A) if such event is an Event of Default specified
in paragraph (e) above, automatically the Commitments shall immediately
terminate and the Loans (with accrued interest thereon), and all other amounts
under the Credit Documents (including without limitation the maximum amount of
all contingent liabilities under Letters of Credit) shall immediately become due
and payable, and (B) if such event is any other Event of Default, either or both
of the following actions may be taken: (i) with the written consent of the
Required Lenders, the Agent may, or upon the written request of the Required
Lenders, the Agent shall, by notice to the Borrower declare the Commitments to
be terminated forthwith, whereupon the Commitments shall immediately terminate;
and (ii) the Agent may, or upon the written request of the Required Lenders, the
Agent shall, by notice of default to the Borrower, declare the Loans (with
accrued interest thereon) and all other amounts owing under this Agreement and
the Notes to be due and payable forthwith and direct the Borrower to pay to the
Agent cash collateral as security for the LOC Obligations for subsequent
drawings under then outstanding Letters of Credit an amount equal to the maximum
amount of which may be drawn under Letters of Credit then outstanding, whereupon
the same shall immediately become due and payable. Except as expressly provided
above in this Section 9, presentment, demand, protest and all other notices of
any kind are hereby expressly waived.
SECTION 10
AGENCY PROVISIONS
10.1 Appointment.
Each Lender hereby designates and appoints NationsBank, N.A. as
administrative agent (in such capacity as Agent hereunder, the "Agent") of such
Lender to act as specified herein and the other Credit Documents, and each such
Lender hereby authorizes the Agent as the agent for such Lender, to take such
action on its behalf under the provisions of this Credit Agreement and the other
Credit Documents and to exercise such powers and perform such duties as are
expressly delegated by the terms hereof and of the other Credit Documents,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere herein and in the other
Credit Documents, the Agent shall not have any duties or responsibilities,
except those expressly set forth herein and therein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Credit Agreement or any of the other Credit Documents, or shall otherwise exist
against the Agent. The provisions of this Section are solely for the benefit of
the Agent and the Lenders and none of the Credit Parties shall have any rights
as a third party beneficiary of the provisions hereof. In performing its
functions and duties under this Credit Agreement and the other Credit Documents,
the Agent shall act solely as agent of the Lenders and does not assume and shall
not be deemed to have assumed any obligation or relationship of agency or trust
with or for the Borrower or any other Credit Party. The title of Documentation
Agent is bestowed in recognition of the Documentation Agent's participation in
this credit, and such title shall not impose or imply any duties or
responsibilities whatsoever of the Documentation Agent, in its capacity as such,
to the Borrower, the Guarantors, the Agent or the Lenders.
10.2 Delegation of Duties.
The Agent may execute any of its duties hereunder or under the other
Credit Documents by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such duties. The
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
10.3 Exculpatory Provisions.
Neither the Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be (i) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection
herewith or in connection with any of the other Credit Documents (except for its
or such Person's own gross negligence or willful misconduct), or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any of the Credit Parties contained herein
or in any of the other Credit Documents or in any certificate, report, statement
or other document referred to or provided for in, or received by the Agent under
or in connection herewith or in connection with the other Credit Documents, or
enforceability or sufficiency herefor of any of the other Credit Documents, or
for any failure of the Borrower to perform its obligations hereunder or
thereunder. The Agent shall not be responsible to any Lender for the
effectiveness, genuineness, validity, enforceability, collectability or
sufficiency of this Credit Agreement, or any of the other Credit Documents or
for any representations, warranties, recitals or statements made herein or
therein or made by the Borrower or any Credit Party in any written or oral
statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or made by the Agent to the Lenders or by or on behalf of the Credit
Parties to the Agent or any Lender or be required to ascertain or inquire as to
the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained herein or therein or as to the use of the
proceeds of the Loans or of the existence or possible existence of any Default
or Event of Default or to inspect the properties, books or records of the Credit
Parties.
10.4 Reliance on Communications.
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower or any of the other Credit Parties,
independent accountants and other experts selected by the Agent with reasonable
care). The Agent may deem and treat the Lenders as the owner of their
respective interests hereunder for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the Agent
in accordance with Section 11.6(d). The Agent shall be fully justified in
failing or refusing to take any action under this Credit Agreement or under any
of the other Credit Documents unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. The Agent shall in all cases be fully protected in acting, or
in refraining from acting, hereunder or under any of the other Credit Documents
in accordance with a request of the Required Lenders (or to the extent
specifically provided in Section 11.1, all the Lenders) and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders (including their successors and assigns).
10.5 Notice of Default.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the Agent has
received notice from a Lender or a Credit Party referring to the Credit
Document, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Agent receives such a
notice, the Agent shall give prompt notice thereof to the Lenders. The Agent
shall take such action with respect to such Default or Event of Default as shall
be reasonably directed by the Required Lenders.
10.6 Non-Reliance on Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates has made
any representations or warranties to it and that no act by the Agent or any
affiliate thereof hereinafter taken, including any review of the affairs of the
Borrower, shall be deemed to constitute any representation or warranty by the
Agent to any Lender. Each Lender represents to the Agent that it has,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, assets, operations, property,
financial and other conditions, prospects and creditworthiness of the Borrower
and made its own decision to make its Loans hereunder and enter into this Credit
Agreement. Each Lender also represents that it will, independently and without
reliance upon the Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Credit Agreement, and to make such investigation as it deems necessary to
inform itself as to the business, assets, operations, property, financial and
other conditions, prospects and creditworthiness of the Borrower. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, assets, property, financial or other
conditions, prospects or creditworthiness of the Borrower which may come into
the possession of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates.
10.7 Indemnification.
The Lenders agree to indemnify the Agent and the Documentation Agent in
their respective capacities as such (to the extent not reimbursed by the
Borrower and without limiting the obligation of the Borrower to do so), ratably
according to their respective Commitment Percentages (or if the Commitments have
expired or been terminated, in accordance with the respective principal amounts
of outstanding Loans and Participation Interests of the Lenders), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including without limitation at any time
following the termination of this Credit Agreement) be imposed on, incurred by
or asserted against the Agent and/or the Documentation Agent in their respective
capacities as such in any way relating to or arising out of this Credit
Agreement or the other Credit Documents or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Agent and/or the Documentation Agent under
or in connection with any of the foregoing; provided that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or willful misconduct of the Agent and/or
the Documentation Agent, respectively. If any indemnity furnished to the Agent
and/or the Documentation Agent for any purpose shall, in the opinion of the
Agent and/or the Documentation Agent, be insufficient or become impaired, the
Agent may and/or the Documentation Agent call for additional indemnity and
cease, or not commence, to do the acts indemnified against until such additional
indemnity is furnished.
10.8 Agent in its Individual Capacity.
The Agent and its affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrower or any other Credit
Party as though the Agent were not Agent hereunder. With respect to its Loans
and Participation Interests, the Agent shall have the same rights and powers
under this Credit Agreement as any Lender and may exercise the same as though
they were not Agent, and the terms "Lender" and "Lenders" shall include the
Agent in its individual capacity.
10.9 Successor Agent.
The Agent may, at any time, resign upon 20 days' written notice to the
Lenders. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Required Lenders, and shall have accepted such appointment,
within 30 days after the notice of resignation, as appropriate, then the
retiring Agent shall select a successor Agent provided such successor is a
Lender hereunder or a commercial bank organized under the laws of the United
States of America or of any State thereof and has a combined capital and surplus
of at least $500,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor, such successor Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations as Agent, as appropriate, under this Credit Agreement and the other
Credit Documents and the provisions of this Section 10.9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Credit Agreement.
10.10 Sharing Agreement.
The Senior Noteholders have requested that the Lenders agree to, and that
the Agent enter into on behalf of the Lenders, an Intercreditor Agreement
substantially in the form attached as Schedule 10.10 (the "Sharing Agreement")
relating to amounts received from the Guarantors pursuant to the guaranty given
hereunder. By execution hereof, each Lender hereby acknowledges, and agrees
with each other Lender and with each Senior Noteholder to be bound by, the terms
of the Sharing Agreement and further authorizes and directs the Agent to enter
into the Sharing Agreement on its behalf. By its execution hereof, each Senior
Noteholder agrees with each Lender to be bound by the terms of the Sharing
Agreement. Notwithstanding anything to the contrary contained in this Credit
Agreement, the agreement of each Lender in this Section 10.10 (and any defined
terms used in this Section) cannot be amended, modified or otherwise changed or
waived without the express written consent of the Senior Noteholders.
SECTION 11
MISCELLANEOUS
11.1 Amendments and Waivers.
Neither this Credit Agreement, nor any of the Notes, nor any of the other
Credit Documents, nor any terms hereof or thereof may be amended, supplemented,
waived or modified except in accordance with the provisions of this subsection.
The Required Lenders may, or, with the written consent of the Required Lenders,
the Agent may, from time to time, (a) enter into with the Borrower written
amendments, supplements or modifications hereto and to the other Credit
Documents for the purpose of adding any provisions to this Credit Agreement or
the other Credit Documents or (b) waive, on such terms and conditions as the
Required Lenders may specify in such instrument, any of the requirements of this
Credit Agreement or the other Credit Documents or any Default or Event of
Default and its consequences; provided, however, that no such waiver and no such
amendment, waiver, supplement, modification or release shall (i) reduce the
amount or extend the scheduled date of maturity of any Loan or Note or any
installment thereon, or reduce the stated rate of any interest or fee payable
hereunder (other than interest at the increased post-default rate) or extend the
scheduled date of any payment thereof or increase the amount or extend the
expiration date of any Lender's Commitment, in each case without the written
consent of each Lender directly affected thereby, or (ii) amend, modify or waive
any provision of this subsection or reduce the percentage specified in the
definition of Required Lenders, or consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Credit Agreement, in
each case without the written consent of all the Lenders, or (iii) amend, modify
or waive any provision of Section 10 without the written consent of the then
Agent, or (iv) release all or substantially all of the Guarantors without the
written consent of all of the Lenders. Any such waiver, any such amendment,
supplement or modification and any such release shall apply equally to each of
the Lenders and shall be binding upon the Borrower, the Lenders, the Agent and
all future holders of the Notes. In the case of any waiver, the Borrower, the
Lenders and the Agent shall be restored to their former position and rights
hereunder and under the outstanding Loans and Notes and other Credit Documents,
and any Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
11.2 Notices.
Except as otherwise provided in Section 2, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (i) when delivered by
hand, (ii) when transmitted via telecopy (or other facsimile device) on a
Business Day between the hours of 8:30 A.M. and 5:00 P.M. (EST or EDT, as
appropriate) (or on the following Business Day if sent after 5:00 P.M.) to the
number set out herein, (iii) the day following the day on which the same has
been delivered prepaid to a reputable national overnight air courier service, or
(iv) the third Business Day following the day on which the same is sent by
certified or registered mail, postage prepaid, in each case, addressed as
follows in the case of the Borrower and the Agent, and as set forth on Schedule
11.2 in the case of the Lenders, or to such other address as may be hereafter
notified by the respective parties hereto and any future holders of the Notes:
The Credit Parties: c/o The Manitowoc Company, Inc.
500 South 16th Street
P.O. Box 66
Manitowoc, Wisconsin 54221-0066
Attn: Glen Tellock
Phone: (920) 683-8122
Fax: (920) 683-8138
with a copy to:
Quarles & Brady
411 E. Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attn: Patrick M. Ryan
Andrew M. Barnes
Phone: (414) 277-5000
Fax: (414) 271-3552
The Agent: NationsBank, N.A.
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attn: Herb Boyd
Phone: (704) 388-3225
Fax: (704) 386-9923
with a copy to:
NationsBank, N.A.
231 S. LaSalle Street, 9th Floor
Chicago, Illinois 60697
Attn: Lisa Donoghue
Phone: (312) 828-3898
Fax: (312) 987-0303
11.3 No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part of the
Agent or any Lender, any right, remedy, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
11.4 Survival of Representations and Warranties.
All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Credit Agreement and the Notes
and the making of the Loans, provided that all such representations and
warranties shall terminate on the date upon which the Commitments have been
terminated and all amounts owing hereunder and under any Notes have been paid in
full.
11.5 Payment of Expenses and Taxes.
The Borrower agrees (a) to pay or reimburse the Agent for all its
reasonable out-of-pocket costs and expenses incurred in connection with the
preparation and execution of, and any amendment, supplement or modification to,
the Credit Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, together with the reasonable fees and
disbursements of counsel to the Agent, (b) to pay or reimburse each Lender, the
Documentation Agent and the Agent for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this Credit
Agreement, the Notes and any such other documents, including, without
limitation, the reasonable fees and disbursements of counsel to the Agent, the
Documentation Agent and to the Lenders (including reasonable allocated costs of
in-house legal counsel), and (c) on demand, to pay, indemnify, and hold each
Lender, the Documentation Agent and the Agent harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other similar taxes, if
any, which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, the Credit Documents and any
such other documents, and (d) to pay, indemnify, and hold each Lender, the
Documentation Agent and the Agent and their Affiliates harmless from and
against, any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of the Credit Documents and any such other
Documents and the use, or proposed use, of proceeds of the Loans (all the
foregoing, collectively, the "indemnified liabilities"); provided, however, that
the Borrower shall not have any obligation hereunder to the Agent, the
Documentation Agent or any Lender with respect to indemnified liabilities
arising from (i) the gross negligence or willful misconduct of the Agent, the
Documentation Agent or any such Lender, (ii) legal proceedings commenced against
the Agent, the Documentation Agent or any Lender by any other Lender or its
participants, the Documentation Agent or the Agent or (iii) a breach of any of
the Credit Documents by the Lenders. The agreements in this subsection shall
survive repayment of the Loans, Notes and all other amounts payable hereunder.
11.6 Successors and Assigns; Participations; Purchasing Lenders.
(a) This Credit Agreement shall be binding upon and inure to the benefit
of the Borrower, the Lenders, the Agent, all future holders of the Notes and
their respective successors and assigns, except that the Borrower may not assign
or transfer any of its rights or obligations under this Credit Agreement or the
other Credit Documents without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or
more banks or other entities ("Participants") participating interests in
any Loan owing to such Lender, any Note held by such Lender, any Commitment
of such Lender, or any other interest of such Lender hereunder. In the
event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under this Credit Agreement to the
other parties to this Credit Agreement shall remain unchanged, such Lender
shall remain solely responsible for the performance thereof, such Lender
shall remain the holder of any such Note for all purposes under this Credit
Agreement, and the Borrower and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Credit Agreement. No Lender shall transfer or grant
any participation under which the Participant shall have rights to approve
any amendment to or waiver of this Credit Agreement or any other Credit
Document except to the extent such amendment or waiver would (i) extend the
scheduled maturity of any Loan or Note or any installment thereon in which
such Participant is participating, or reduce the stated rate or extend the
time of payment of interest or Fees thereon (except in connection with a
waiver of interest at the increased post-default rate) or reduce the
principal amount thereof, or increase the amount of the Participant's
participation over the amount thereof then in effect (it being understood
that a waiver of any Default or Event of Default shall not constitute a
change in the terms of such participation, and that an increase in any
Commitment or Loan shall be permitted without consent of any Participant if
the Participant's participation is not increased as a result thereof), or
(ii) consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Credit Agreement. In the case of any
such participation, the Participant shall not have any rights under this
Credit Agreement or any of the other Credit Documents (the Participant's
rights against such Lender in respect of such participation to be those set
forth in the agreement executed by such Lender in favor of the Participant
relating thereto) and all amounts payable by the Borrower hereunder shall
be determined as if such Lender had not sold such participation, provided
that each Participant shall be entitled to the benefits of subsections 3.6,
3.7, 3.8, 3.9 and 11.5 with respect to its participation in the Commitments
and the Loans outstanding from time to time; provided, that no Participant
shall be entitled to receive any greater amount pursuant to such
subsections than the transferor Lender would have been entitled to receive
in respect of the amount of the participation transferred by such
transferor Lender to such Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell or assign
to any Lender or any affiliate thereof and with the consent of the Agent
and, so long as no Event of Default has occurred and is continuing, the
consent of the Borrower (which consents shall not be unreasonably
withheld), to one or more additional banks or financial institutions
("Purchasing Lenders"), all or any part of its rights and obligations under
this Credit Agreement and the Notes in minimum amounts of $10,000,000 (or,
if less, the entire amount of such Lender's obligations) if the Purchasing
Lender is not a Lender hereunder, or with no minimum amount if the
Purchasing Lender is a Lender hereunder, pursuant to a Commitment Transfer
Supplement, executed by such Purchasing Lender, such transferor Lender, the
Agent (and, in the case of a Purchasing Lender that is not then a Lender or
an affiliate thereof so long as no Event of Default has occurred and is
continuing, by the Borrower), and delivered to the Agent for its acceptance
and recording in the Register. Upon such execution, delivery, acceptance
and recording, from and after the Transfer Effective Date specified in such
Commitment Transfer Supplement, (x) the Purchasing Lender thereunder shall
be a party hereto and, to the extent provided in such Commitment Transfer
Supplement, have the rights and obligations of a Lender hereunder with a
Commitment as set forth therein, and (y) the transferor Lender thereunder
shall, to the extent provided in such Commitment Transfer Supplement, be
released from its obligations under this Credit Agreement (and, in the case
of a Commitment Transfer Supplement covering all or the remaining portion
of a transferor Lender's rights and obligations under this Credit
Agreement, such transferor Lender shall cease to be a party hereto). Such
Commitment Transfer Supplement shall be deemed to amend this Credit
Agreement to the extent, and only to the extent, necessary to reflect the
addition of such Purchasing Lender and the resulting adjustment of
Commitment Percentages arising from the purchase by such Purchasing Lender
of all or a portion of the rights and obligations of such transferor Lender
under this Credit Agreement and the Notes. On or prior to the Transfer
Effective Date specified in such Commitment Transfer Supplement, the
Borrower, at its own expense, shall execute and deliver to the Agent in
exchange for the Note delivered to the Agent pursuant to such Commitment
Transfer Supplement a new Note to the order of such Purchasing Lender in an
amount equal to the Commitment assumed by it pursuant to such Commitment
Transfer Supplement and, unless the transferor Lender has not retained a
Commitment hereunder, a new Note to the order of the transferor Lender in
an amount equal to the Commitment retained by it hereunder. Such new Note
shall be dated the Closing Date and shall otherwise be in the form of the
Note replaced thereby. The Note surrendered by the transferor Lender
shall be returned by the Agent to the Borrower marked "canceled".
(d) The Agent shall maintain at its address referred to in subsection 11.2
a copy of each Commitment Transfer Supplement delivered to it and a
register (the "Register") for the recordation of the names and addresses of
the Lenders and the Commitment of, and principal amount of the Loans owing
to, each Lender from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower, the Agent
and the Lenders may treat each Person whose name is recorded in the
Register as the owner of the Loan recorded therein for all purposes of this
Credit Agreement. The Register shall be available for inspection by the
Borrower or any Lender at any reason able time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of a Commitment Transfer Supplement executed by a
transferor Lender and a Purchasing Lender and the Agent (and, in the case
of a Purchasing Lender that is not then a Lender or an affiliate thereof,
by the Borrower) together with payment to the Agent (by the transferor
Lender or the Purchasing Lender, as agreed between them) of a registration
and processing fee of $3,500 for each Purchasing Lender listed in such
Commitment Transfer Supplement, and the Notes subject to such Commitment
Transfer Supplement, the Agent shall (i) accept such Commitment Transfer
Supplement, (ii) record the information contained therein in the Register
and (iii) give prompt notice of such acceptance and recordation to the
Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any Participant or
Purchasing Lender (each, a "Transferee") and any prospective Transferee any
and all financial information in such Lender's possession concerning the
Borrower and its Affiliates which has been delivered to such Lender by or
on behalf of the Borrower pursuant to this Credit Agreement or which has
been delivered to such Lender by or on behalf of the Borrower in connection
with such Lender's credit evaluation of the Borrower and its Affiliates
prior to becoming a party to this Credit Agreement; in each case subject to
subsection 11.14.
(g) At the time of each assignment pursuant to this subsection 11.6 to a
Person which is not already a Lender hereunder and which is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code)
for Federal income tax purposes, the respective assignee Lender shall
provide to the Borrower and the Agent the appropriate Internal Revenue
Service Forms (and, if applicable, a U.S. Tax Compliance Certificate)
described in Section 3.9.
(h) Nothing herein shall prohibit any Lender from pledging or assigning
any of its rights under this Credit Agreement (including, without
limitation, any right to payment of principal and interest under any Note)
to any Federal Reserve Bank in accordance with applicable laws.
11.7 Adjustments; Set-off.
(a) Each Lender agrees that if any Lender (a "benefited Lender") shall at
any time receive any payment of all or part of its Loans, or interest thereon,
or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in clause (e) of Section 9, or otherwise) in a greater proportion
than any such payment to or collateral received by any other Lender, if any, in
respect of such other Lender's Loans, or interest thereon, such benefited Lender
shall purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Loan, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such benefited Lender to share the excess payment or benefits
of such collateral or proceeds ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest. The Borrower agrees that each Lender so
purchasing a portion of another Lender's Loans may exercise all rights of
payment (including, without limitation, rights of set-off) with respect to such
portion as fully as if such Lender were the direct holder of such portion.
(b) In addition to any rights and remedies of the Lenders provided by law
(including, without limitation, other rights of set-off), each Lender shall
have the right, without prior notice to the Borrower, any such notice being
expressly waived by the Borrower to the extent permitted by applicable law,
upon the occurrence of any Event of Default, to setoff and appropriate and
apply any and all deposits (general or special, time or demand, provisional
or final), in any currency, and any other credits, indebtedness or claims,
in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender
or any branch or agency thereof to or for the credit or the account of the
Borrower, or any part thereof in such amounts as such Lender may elect,
against and on account of the obligations and liabilities of the Borrower
to such Lender hereunder and claims of every nature and description of such
Lender against the Borrower, in any currency, whether arising hereunder,
under the Notes or under any documents contemplated by or referred to
herein or therein, as such Lender may elect, whether or not such Lender has
made any demand for payment and although such obligations, liabilities and
claims may be contingent or unmatured. The aforesaid right of set-off may
be exercised by such Lender against the Borrower or against any trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
receiver or execution, judgment or attachment creditor of the Borrower, or
against anyone else claiming through or against the Borrower or any such
trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have been
exercised by such Lender prior to the occurrence of any Event of Default.
Each Lender agrees promptly to notify the Borrower and the Agent after any
such set-off and application made by such Lender; provided, however, that
the failure to give such notice shall not affect the validity of such set-
off and application.
11.8 Table of Contents and Section Headings.
The table of contents and the Section and subsection headings herein are
intended for convenience only and shall be ignored in construing this Credit
Agreement.
11.9 Counterparts.
This Credit Agreement may be executed by one or more of the parties to
this Credit Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Credit Agreement signed by all the
parties shall be lodged with the Borrower and the Agent.
11.10 Severability.
Any provision of this Credit Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
11.11 Integration.
This Credit Agreement, the Notes and the other Credit Documents represent
the agreement of the Borrower, the Agent and the Lenders with respect to the
subject matter hereof, and there are no promises, undertakings, representations
or warranties by the Agent, the Borrower or any Lender relative to the subject
matter hereof not expressly set forth or referred to herein or in the Notes.
11.12 Governing Law.
This Credit Agreement and the Notes and the rights and obligations of the
parties under this Credit Agreement and the Notes shall be governed by, and
construed and interpreted in accordance with, the law of the State of North
Carolina.
11.13 Consent to Jurisdiction and Service of Process.
All judicial proceedings brought against the Borrower or any other Credit
Party with respect to this Credit Agreement, any Note or any of the other Credit
Documents may be brought in any state or federal court of competent jurisdiction
in the State of North Carolina, and, by execution and delivery of this Credit
Agreement, the Borrower and each of the other Credit Parties accepts, for itself
and in connection with its properties, generally and unconditionally, the non-
exclusive jurisdiction of the aforesaid courts and irrevocably agrees to be
bound by any final judgment rendered thereby in connection with this Credit
Agreement from which no appeal has been taken or is available. The Borrower and
each of the other Credit Parties irrevocably agrees that all process in any such
proceedings in any such court may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail),
postage prepaid, to it at its address set forth in subsection 11.2 or at such
other address of which the Agent shall have been notified pursuant thereto, such
service being hereby acknowledged by the Borrower and each of the other Credit
Parties to be effective and binding service in every respect. The Borrower,
each of the other Credit Parties, the Agent and the Lenders irrevocably waive
any objection, including, without limitation, any objection to the laying of
venue or based on the grounds of forum non conveniens which it may now or
hereafter have to the bringing of any such action or proceeding in any such
jurisdiction. Nothing herein shall affect the right to serve process in any
other manner permitted by law or shall limit the right of any Lender to bring
proceedings against the Borrower and each of the other Credit Parties in the
court of any other jurisdiction.
11.14 Confidentiality.
The Agent and each of the Lenders agrees that it will use its best efforts
not to disclose without the prior consent of the Borrower (other than to its
employees, Subsidiaries, Affiliates, auditors or counsel or to another Lender)
any information with respect to the Borrower and its Subsidiaries which is
furnished pursuant to this Credit Agreement, any other Credit Document or any
documents contemplated by or referred to herein or therein and which is
designated by the Borrower to the Lenders in writing as confidential or as to
which it is otherwise reasonably clear such information is not public, except
that any Lender may disclose any such information (a) as has become generally
available to the public other than by a breach of this subsection 11.14, (b) as
may be required or appropriate in any report, statement or testimony submitted
to any municipal, state or federal regulatory body having or claiming to have
jurisdiction over such Lender or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or the OCC or similar organizations (whether in
the United States or elsewhere) or their successors or the National Association
of Insurance Commissioners, (c) as may be required or appropriate in response to
any summons or subpoena or any law, order, regulation or ruling applicable to
such Lender, (d) as may be necessary or appropriate in the exercise of the
Agent's and the Lender's rights under this Credit Agreement or the other Credit
Documents, or (E) to any prospective Participant or assignee in connection with
any contemplated transfer pursuant to Section 11.6, provided that such
prospective transferee shall have been made aware of this Section 11.14 and
shall have agreed to be bound by its provisions as if it were a party to this
Credit Agreement.
11.15 Acknowledgments.
Each of the Credit Parties hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of each Credit Document;
(b) neither the Agent nor any Lender has any fiduciary relationship with
or duty to the Credit Parties arising out of or in connection with this
Credit Agreement and the relationship between Agent and Lenders, on one
hand, and the Credit Parties, on the other hand, in connection herewith is
solely that of debtor and creditor; and
(c) no joint venture exists among the Lenders or among the Credit Parties
and the Lenders.
11.16 Waivers of Jury Trial.
The Credit Parties, the Agent and the Lenders hereby irrevocably and
unconditionally waive, to the extent permitted by applicable law, trial by jury
in any legal action or proceeding relating to this Credit Agreement or any other
Credit Document and for any counterclaim therein.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: THE MANITOWOC COMPANY, INC.,
a Wisconsin corporation
By: /s/ Glen E. Tellock
----------------------
Name: Glen E. Tellock
Title: Treasurer
GUARANTORS: MANITOWOC MEC, INC.,
a Nevada corporation
MANITEX, INC.,
a Texas corporation
FEMCO MACHINE COMPANY, INC.,
a Nevada corporation
KOLPAK MANUFACTURING COMPANY,
a Tennessee corporation
MANITOWOC EQUIPMENT WORKS, INC.,
a Nevada corporation
MANITOWOC MARINE GROUP, LLC,
a Nevada limited liability company
MANITOWOC ICE, INC.,
a Wisconsin corporation
KMT REFRIGERATION, INC.,
a Wisconsin corporation
MANITOWOC CRANES, INC.,
a Wisconsin corporation
SERVEND INTERNATIONAL, INC.,
a Nevada corporation
USTC, INC.,
a Nevada corporation
MANITOWOC BEVERAGE SYSTEMS, INC.,
a Nevada corporation
By: /s/ Glen E. Tellock
-------------------------
Name: Glen E. Tellock
Title: Treasurer
for each of the foregoing
MANITOWOC CP, INC.,
a Nevada corporation
MANITOWOC CRANE GROUP, INC.,
a Nevada corporation
MANITOWOC FP, INC.,
a Nevada corporation
MANITOWOC FOODSERVICE GROUP, INC.,
a Nevada corporation
By: /s/ Glen E. Tellock
-------------------
Name: Glen E. Tellock
Title: Authorized Representative
for each of the foregoing
LENDERS: NATIONSBANK, N.A.,
in its capacity as Agent and as a Lender
By /s/Lisa S. Donoghue
----------------------
Name Lisa S. Donoghue
Title Sr. Vice President
FLEET BANK, N.A.,
in its capacity as Documentation Agent and as a Lender
By /s/ Christopher Mayrose
-----------------------
Name Christopher Mayrose
Title Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By /s/Jenny Gilpin
-------------------
Name Jenny Gilpin
Title Vice President
THE NORTHERN TRUST COMPANY
By /s/ Lisa M. Taylor
-------------------
Name Lisa M. Taylor
Title Second Vice President
THE BANK OF NEW YORK
By /s/ Mark T. Familo
Name Mark T. Familo
Title Vice President
ASSOCIATED BANK LAKESHORE NATIONAL ASSOCIATION
By /s/ Scott A Yeoman
-------------------
Name Scott A Yeoman
Title President
FIRSTAR BANK MILWAUKEE, N.A.
By /s/ Thomas V. Richtman
------------------------
Name Thomas V. Richtman
Title Vice President
M&I MARSHALL & ILSLEY BANK
By /s/ Thomas R. Johnson
-------------------
Name Thomas R. Johnson
Title Senior Vice President
By /s/ James R. Miller
Name James R. Miller
Title Vice President
FIFTH THIRD BANK
By /s/ Kevin J Walter
-------------------------
Name Kevin J Walter
Title Corporate Banking Officer
LASALLE NATIONAL BANK
By /s/ James A. Meyer
--------------------------
Name James A. Meyer
Title First Vice President
