SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
JANUARY 28, 1999
Date of report (Date of earliest event reported)
1-9335
(Commission File Number)
SCHAWK, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
36-2545354
(I.R.S. Employer Identification No.)
1695 RIVER ROAD
DES PLAINES, IL
(Address of principal executive office)
60018
(Zip Code)
847/827-9494
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
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On January 28, 1999, Registrant announced its offer to buy Wace Group Plc
("Wace") and that the Wace Board of Directors had recommended to its
shareholders to accept Registrant's offer. Further details of this announcement
are contained in the press release of the Registrant dated January 28, 1999 and
attached hereto as Exhibit 99.1.
ITEM 7(c). EXHIBITS.
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Exhibit 99.1 Press release dated January 28, 1999.
Exhibit 99.2 Credit Agreement dated January 23, 1999 by and between
Schawk, Inc. and The First National Bank of Chicago.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
SCHAWK, INC.
(Registrant)
Date: February 1, 1999 By: /s/ David A. Schawk
-----------------------------------------
David A. Schawk
President and Chief Executive Officer
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EXHIBIT INDEX
EXHIBIT
- -------
99.1 Press release dated January 28, 1999.
99.2 Credit Agreement dated January 23, 1999 by and between
Schawk, Inc. and The First National Bank of Chicago.
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EXHIBIT 99.1
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NEWS
FOR IMMEDIATE RELEASE
FOR FURTHER INFORMATION:
AT SCHAWK, INC.:
JAMES J. PATTERSON
SR. VP AND CFO,
847-827-9494
[email protected]
AT THE FINANCIAL RELATIONS BOARD:
NORHA LEE LAURA KUHLMANN
GENERAL INQUIRES MEDIA INQUIRIES
312-640-6689 312-640-6727
SCHAWK, INC. ANNOUNCES OFFER TO ACQUIRE WACE GROUP, PLC
WACE BOARD OF DIRECTORS RECOMMENDS ITS SHAREHOLDERS ACCEPT SCHAWK OFFER
DES PLAINES, IL, - JANUARY 28, 1999--SCHAWK, INC. (NYSE: SGK), North America's
leading digital imaging services company for consumer products, today announced
its offer to buy Wace Group, Plc, the largest European based international
provider of high-quality imaging services for the advertising, promotional and
consumer products packaging markets. The total consideration of the offer is US
$156 million in cash and notes for 100 percent of the outstanding common and
preferred stock of Wace. Wace's Board of Directors has recommended to its
shareholders that they accept Schawk's offer.
Commenting on the offer, David A. Schawk, President and C.E.O. of Schawk,
stated, "We are extremely optimistic about the possibilities this may bring to
Schawk, Wace, our client base and our shareholders. Wace has a premier client
base, both in North America and Europe, and generates approximately US $225
million in annual revenues from continuing operations. In addition, 60 percent
of its annual revenue is generated in the U.S."
"We believe we can enhance shareholder value by merging these complementary
businesses. Schawk is recognized as a global leader in the consumer products
packaging market with a strong presence in agency and promotional industries in
North America, and Wace is recognized as a global leader in the agency and
promotion markets with a strong complementary presence in the packaging industry
primarily in the U.K. and Europe. The transaction would increase our global
capabilities and would enhance our leadership positions in the markets we serve.
Additionally, it will allow us to build our revenues and earnings," concluded
Schawk.
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Derek Ashley, Chief Executive Officer of Wace, commented, "We have known the
Schawk organization for some time. There is a high degree of mutual respect
between the companies and in particular, among senior management. We share much
of the same commitment to the markets we serve, and to our respective client
bases. Together, Wace and Schawk will be better able to address the increasingly
demanding requirements of these clients, and we anticipate further expansion as
a single dynamic enterprise."
Schawk, Inc., headquartered in suburban Chicago, is a leading supplier of
electronic digitized high resolution color imaging, database management and
on-site facility management, as well as related prepress and digital archiving
and distribution services. Schawk provides advance technology services for the
food, beverage and consumer products packaging, advertising and promotional
markets. Schawk, Inc. can be reached on the Internet at http://www.schawk.com.
Wace Group Plc, the largest European based graphic imaging business, provides a
wide range of high quality imaging services including digital imaging,
animation, digital photographic services, outsourced image management and
integrated media management. Its clients are predominantly advertising agencies
and multinational corporations. Wace Group provides it services throughout
Europe and the United States.
Any statement contained herein regarding Schawk, Inc.'s expectations for future
revenue and profit growth, and business acquisitions constitute forward-looking
statements within the meaning of the U.S. securities laws and are subject to the
safe harbor created thereby. Although the company believes that the expectations
reflected herein are reasonable, it can give no assurance that such expectations
will prove to be correct.
FOR MORE INFORMATION REGARDING SCHAWK, INC., FREE OF CHARGE,
DIAL 1-800-PRO-INFO AND ENTER "SGK."
# # #
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EXHIBIT 99.2
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CREDIT AGREEMENT
Dated as of January 23, 1999
among
SCHAWK, INC.,
as the Borrower
THE INSTITUTIONS FROM TIME TO TIME
PARTIES HERETO AS LENDERS
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
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TABLE OF CONTENTS
SECTION PAGE
ARTICLE I: DEFINITIONS........................................................1
1.1 Certain Defined Terms..................................1
1.2 References............................................29
1.3 Supplemental Disclosure...............................29
1.4 Rounding and Other Consequential Changes..............30
ARTICLE II: THE TERM LOAN AND REVOLVING LOAN FACILITIES......................30
2.1 Term Loans............................................30
2.2 Revolving Loans.......................................31
2.3 Swing Line Loans......................................32
2.4 Rate Options for all Advances; Maximum Interest
Periods...............................................34
2.5 Optional Payments; Mandatory Prepayments..............34
(A) Optional Payments.........................34
(B) Mandatory Prepayments.....................35
2.6 Reduction of Commitments..............................38
2.7 Method of Borrowing...................................38
2.8 Method of Selecting Types and Interest Periods for
Advances..............................................39
2.9 Minimum Amount of Each Advance........................39
2.10 Method of Selecting Types and Interest Periods for
Conversion and Continuation of Advances...............40
(A) Right to Convert..........................40
(B) Automatic Conversion and Continuation.....40
(C) No Conversion Post-Default or Post-
Unmatured Default.........................40
(D) Borrowing/Conversion/Continuation Notice..40
2.11 Default Rate..........................................41
2.12 Method of Payment.....................................41
2.13 Evidence of Debt......................................42
2.14 Telephonic Notices....................................43
2.15 Promise to Pay; Interest and Commitment Fees; Interest
Payment Dates; Interest and Fee Basis; Taxes; Loan and
Control Accounts......................................43
(A) Promise to Pay............................43
(B) Interest Payment Dates....................43
(C) Commitment Fees...........................44
(D) Interest and Fee Basis; Applicable
Floating Rate Margin, Applicable
Eurocurrency Margin and Applicable
Commitment Fee Percentage.................44
2.16 Notification of Advances, Interest Rates,
Prepayments and Aggregate Revolving Loan Commitment
Reductions............................................48
2.17 Lending Installations.................................48
2.18 Non-Receipt of Funds by the Agent.....................49
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2.19 Termination Date......................................49
2.20 Replacement of Certain Lenders........................49
2.21 Alternate Currency Loans..............................50
2.22 Judgment Currency.....................................52
2.23 Market Disruption; Denomination of Amounts in
Dollars; Dollar Equivalent of Reimbursement
Obligations...........................................53
2.24 Payments to be Free and Clear.........................53
ARTICLE III: THE LETTER OF CREDIT FACILITY...................................54
3.1 Obligation to Issue Letters of Credit.................54
3.2 Transitional Provision................................55
3.3 Types and Amounts.....................................55
3.4 Conditions............................................55
3.5 Procedure for Issuance of Letters of Credit...........56
3.6 Letter of Credit Participation........................56
3.7 Reimbursement Obligation..............................57
3.8 Letter of Credit Fees.................................57
3.9 Issuing Bank Reporting Requirements...................58
3.10 Indemnification; Exoneration..........................58
3.11 Cash Collateral.......................................59
ARTICLE IV: CHANGE IN CIRCUMSTANCES..........................................60
4.1 Yield Protection......................................60
4.2 Changes in Capital Adequacy Regulations...............61
4.3 Availability of Types of Advances.....................61
4.4 Funding Indemnification...............................61
4.5 Lender Statements; Survival of Indemnity..............62
ARTICLE V: CONDITIONS PRECEDENT..............................................62
5.1 Initial Advances and Letters of Credit................62
5.2 Each Advance and Letter of Credit.....................64
ARTICLE VI: REPRESENTATIONS AND WARRANTIES...................................65
6.1 Organization; Corporate Powers........................65
6.2 Authority.............................................66
6.3 No Conflict; Governmental Consents....................66
6.4 Financial Statements..................................67
6.5 No Material Adverse Change............................68
6.6 Taxes.................................................68
(A) Tax Examinations..........................68
(B) Payment of Taxes..........................68
6.7 Litigation; Loss Contingencies and Violations.........68
6.8 Subsidiaries..........................................69
6.9 ERISA.................................................69
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6.10 Accuracy of Information...............................70
6.11 Securities Activities.................................70
6.12 Material Agreements...................................70
6.13 Compliance with Laws..................................71
6.14 Assets and Properties.................................71
6.15 Statutory Indebtedness Restrictions...................71
6.16 Insurance.............................................71
6.17 Labor Matters.........................................71
6.18 Stock Acquisition.....................................72
6.19 Environmental Matters.................................72
6.20 Solvency..............................................73
6.21 Year 2000 Issues......................................73
6.22 Representations and Warranties of UK Subsidiary.......73
6.23 Representations and Warranties of Australian
Subsidiary............................................75
6.24 Other Indebtedness....................................76
ARTICLE VII: COVENANTS.......................................................76
7.1 Reporting.............................................76
(A) Financial Reporting.......................76
(B) Notice of Default.........................78
(C) Lawsuits..................................78
(D) ERISA Notices.............................79
(E) Labor Matters.............................80
(F) Other Indebtedness........................81
(G) Other Reports.............................81
(H) Environmental Notices.....................81
(I) Other Information.........................81
7.2 Affirmative Covenants.................................82
(A) Corporate Existence, Etc..................82
(B) Corporate Powers; Conduct of Business.....82
(C) Compliance with Laws, Etc.................82
(D) Payment of Taxes and Claims; Tax
Consolidation.............................82
(E) Insurance.................................82
(F) Inspection of Property; Books and
Records; Discussions......................83
(G) ERISA Compliance..........................83
(H) Maintenance of Property...................83
(I) Environmental Compliance..................84
(J) Use of Proceeds...........................84
(K) Subsidiary Guarantees and Pledges.........84
(L) Year 2000 Issues..........................85
7.3 Negative Covenants....................................85
(A) Indebtedness..............................85
(B) Sales of Assets...........................87
(C) Liens.....................................87
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(D) Investments...............................88
(E) Contingent Obligations....................89
(F) Restricted Payments.......................90
(G) Conduct of Business; Subsidiaries;
Acquisitions..............................90
(H) Transactions with Shareholders and
Affiliates................................91
(I) Restriction on Fundamental Changes........92
(J) Sales and Leasebacks......................92
(K) Margin Regulations........................92
(L) ERISA.....................................92
(M) Corporate Documents.......................93
(N) Fiscal Year...............................93
(O) Subsidiary Covenants......................93
(P) Hedging Obligations.......................94
(Q) Issuance of Disqualified Stock............94
(R) Other Indebtedness........................94
7.4 Financial Covenants...................................95
(A) Minimum Fixed Charge Coverage Ratio.......95
(B) Maximum Leverage Ratio....................96
(C) Minimum Consolidated Net Worth............97
ARTICLE VIII: DEFAULTS.......................................................97
8.1 Defaults..............................................97
ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS
AND REMEDIES....................................................101
9.1 Termination of Commitments; Acceleration.............101
9.2 Defaulting Lender....................................101
9.3 Amendments...........................................102
9.4 Preservation of Rights...............................104
ARTICLE X: GENERAL PROVISIONS...............................................104
10.1 Survival of Representations..........................104
10.2 Governmental Regulation..............................104
10.3 Performance of Obligations...........................104
10.4 Headings.............................................105
10.5 Entire Agreement.....................................105
10.6 Several Obligations; Benefits of this Agreement......105
10.7 Expenses; Indemnification............................105
(A) Expenses.................................105
(B) Indemnity................................106
(C) Waiver of Certain Claims; Settlement
of Claims................................107
(D) Survival of Agreements...................107
10.8 Numbers of Documents.................................107
10.9 Accounting...........................................107
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10.10 Severability of Provisions...........................107
10.11 Nonliability of Lenders..............................108
10.12 GOVERNING LAW........................................108
10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY
TRIAL................................................108
(A) EXCLUSIVE JURISDICTION...................108
(B) OTHER JURISDICTIONS......................108
(C) VENUE....................................109
(D) WAIVER OF JURY TRIAL.....................109
ARTICLE XI: THE AGENT.......................................................109
11.1 Appointment; Nature of Relationship..................109
11.2 Powers...............................................110
11.3 General Immunity.....................................110
11.4 No Responsibility for Loans, Creditworthiness,
Recitals, Etc........................................110
11.5 Action on Instructions of Lenders....................110
11.6 Employment of Agents and Counsel.....................110
11.7 Reliance on Documents; Counsel.......................111
11.8 The Agent's and the Alternate Currency Bank's
Reimbursement and Indemnification....................111
11.9 Rights as a Lender...................................111
11.10 Lender Credit Decision...............................112
11.11 Successor Agent......................................112
11.12 Collateral Documents.................................112
ARTICLE XII: SETOFF; RATABLE PAYMENTS.......................................113
12.1 Setoff...............................................113
12.2 Ratable Payments.....................................113
12.3 Application of Payments..............................114
12.4 Relations Among Lenders..............................115
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.............115
13.1 Successors and Assigns...............................115
13.2 Participations.......................................116
(A) Permitted Participants; Effect...........116
(B) Voting Rights............................116
(C) Benefit of Setoff........................116
13.3 Assignments..........................................117
(A) Permitted Assignments....................117
(B) Effect; Effective Date...................117
(C) The Register.............................118
13.4 Confidentiality......................................118
13.5 Dissemination of Information.........................119
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ARTICLE XIV: NOTICES........................................................119
14.1 Giving Notice........................................119
14.2 Change of Address....................................119
ARTICLE XV: COUNTERPARTS....................................................119
ARTICLE XVI: SCHEDULES......................................................119
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EXHIBITS AND SCHEDULES
EXHIBITS
--------
EXHIBIT A -- Commitments (Definitions)
EXHIBIT B -- Form of Borrowing/Conversion/Continuation Notice (Section 2.3
and Section 2.8 and Section 2.10)
EXHIBIT C -- Form of Request for Letter of Credit (Section 3.4)
EXHIBIT D -- Form of Assignment and Acceptance Agreement (Sections 2.20 and
13.3)
EXHIBIT E -- Form of Borrower's US Counsel's Opinion and Form of Borrower's
UK Counsel's Opinion (Section 5.1)
EXHIBIT F -- List of Closing Documents (Section 5.1)
EXHIBIT G -- Form of Officer's Certificate (Sections 5.2 and 7.1(A)(iii))
EXHIBIT H -- Form of Compliance Certificate (Sections 5.2 and 7.1(A)(iii)
EXHIBIT I -- Form of Subsidiary Guaranty (Definitions)
EXHIBIT J-1 -- Form of Alternate Currency Addendum (Pounds Sterling)
(Definitions)
EXHIBIT J-2 -- Form of Alternate Currency Addendum (Australian Dollars)
(Definitions)
EXHIBIT K-1 -- Form of Revolving Loan Note (If Requested)
EXHIBIT K-2 -- Form of Term Note (If Requested)
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SCHEDULES
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Schedule 1.1.1 -- Permitted Existing Indebtedness (Definitions)
Schedule 1.1.2 -- Permitted Existing Investments (Definitions)
Schedule 1.1.3 -- Permitted Existing Liens (Definitions)
Schedule 1.1.4 -- Permitted Existing Contingent Obligations (Definitions)
Schedule 3.2 -- Transitional Letters of Credit (Section 3.2)
Schedule 6.3 -- Conflicts; Governmental Consents (Section 6.3)
Schedule 6.4 -- Pro Forma Financial Statements (Section 6.4(A))
Schedule 6.7 -- Litigation; Loss Contingencies (Section 6.7)
Schedule 6.8 -- Subsidiaries (Section 6.8)
Schedule 6.9 -- ERISA (Section 6.9)
Schedule 6.16 -- Insurance (Sections 6.16 and 7.2(E))
Schedule 6.18 -- Stock Acquisition Conditions (Section 6.18)
Schedule 6.19 -- Environmental Matters (Section 6.19)
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CREDIT AGREEMENT
This Credit Agreement dated as of January 23, 1999 is entered into among
SCHAWK, INC., a Delaware corporation (the "BORROWER"), one or more Subsidiaries
of the Borrower (whether now existing or hereafter formed and party to an
Alternate Currency Addendum and organized and existing under the laws of England
and Wales, collectively, the "UK SUBSIDIARY") and one or more Subsidiaries of
the Borrower whether now existing or hereafter formed and party to an Alternate
Currency Addendum and organized under the laws of Australia, collectively, the
"AUSTRALIAN SUBSIDIARY", and, together with UK Subsidiary, referred to herein as
the "ALTERNATE CURRENCY BORROWERS"), the institutions from time to time parties
hereto as Lenders, whether by execution of this Agreement or an Assignment
Agreement pursuant to Section 13.3, and The First National Bank of Chicago, in
its capacity as contractual representative for itself and the other Lenders. The
parties hereto agree as follows:
ARTICLE I:
DEFINITIONS
-----------
1.1 Certain Defined Terms. In addition to the terms defined above, the
following terms used in this Agreement shall have the following meanings,
applicable both to the singular and the plural forms of the terms defined.
As used in this Agreement:
"ACQUISITION" means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the Borrower or any
of its Subsidiaries (i) acquires any going business or all or substantially all
of the assets of any firm, corporation or division thereof, whether through
purchase of assets, merger or otherwise or (ii) directly or indirectly acquires
(in one transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the securities of a
corporation which have ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) or a majority (by percentage of voting power) of the outstanding
equity interests of another Person.
"ADVANCE" means a borrowing hereunder consisting of the aggregate amount of
the several Loans made by the Lenders to the Borrower of the same Type and, in
the case of Eurocurrency Rate Advances, in the same currency and for the same
Interest Period.
"AFFECTED LENDER" is defined in Section 2.20 hereof.
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of greater than nine and nine-tenths percent(9.90%) or more of any
class of voting securities (or other voting interests) of the controlled
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Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of Capital Stock, by contract or otherwise.
"AGENT" means First Chicago in its capacity as contractual representative
for itself and the Lenders pursuant to Article XI hereof and any successor Agent
appointed pursuant to Article XI hereof.
"AGGREGATE REVOLVING LOAN COMMITMENT" means the aggregate of the Revolving
Loan Commitments of all the Lenders, as may be reduced from time to time
pursuant to the terms hereof. The initial Aggregate Revolving Loan Commitment is
One Hundred Thirty-Five Million and 00/100 Dollars ($135,000,000.00).
"AGGREGATE TERM LOAN COMMITMENT" means the aggregate of the Term Loan
Commitments of all the Lenders. The Aggregate Term Loan Commitment is Forty
Million and 00/100 Dollars ($40,000,000.00).
"AGREED CURRENCIES" means (i) Dollars, (ii) so long as such currency
remains an Eligible Currency, Pounds Sterling and Australian Dollars; (iii) the
Euro only for so long as the Euro is and remains an Eligible Currency, and (iv)
any other Eligible Currency which the Borrower requests the Agent to include as
an Agreed Currency hereunder and which is acceptable to one-hundred percent
(100%) of the Lenders with a Revolving Loan Commitment; provided that the Agent
shall promptly notify each such Lender of each such request and each such Lender
shall be deemed not to have agreed to each such request unless its written
consent thereto has been received by the Agent within five (5) Business Days
from the date of such notification by the Agent to such Lender.
"AGREEMENT" means this Credit Agreement, as it may be amended, restated or
otherwise modified and in effect from time to time.
"AGREEMENT ACCOUNTING PRINCIPLES" means generally accepted accounting
principles as in effect in the United States as of the date of this Agreement,
applied in a manner consistent with that used in preparing the financial
statements of the Borrower referred to in Section 6.4(B)(1) hereof, provided,
however, that with respect to the calculation of financial ratios and other
financial tests required by this Agreement, "Agreement Accounting Principles"
means generally accepted accounting principles as in effect in the United States
as of the date of this Agreement, applied in a manner consistent with that used
in preparing the financial statements of the Borrower referred to in Section
6.4(A) hereof; provided, further, however, all pro forma financial statements
reflecting Acquisitions shall be prepared in accordance with the requirements
established by the Commission for acquisition accounting for reporting
acquisitions by public companies (whether or not such Acquisitions are required
to be publicly reported); provided, further, that no change in accounting
principles shall be made from those used in preparing the financial statements
referred to in Section 6.4 hereof, including, without limitation, with respect
to the nature or classification of accounts, closing proceedings, levels of
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reserves, or levels of accruals other than as a result of objective changes in
the underlying business; provided, further, that for purposes of the preceding
clauses, "changes in accounting principles" or "changes in Agreement Accounting
Principles" includes all changes in accounting principles, policies, practices,
procedures, or methodologies with respect to financial statements, their
classification, or their display, as well as all changes in practices, methods,
conventions, or assumptions used in making accounting estimates.
"ALTERNATE BASE RATE" means, for any day, a fluctuating rate of interest
per annum equal to the higher of (i) the Corporate Base Rate for such day and
(ii) the sum of (a) the Federal Funds Effective Rate for such day and (b)
one-half of one percent (0.5%) per annum.
"ALTERNATE CURRENCY" shall mean (i) only so long as such currency remains
an Eligible Currency, Australian Dollars and Sterling and (ii) any other
Eligible Currency, which the applicable Borrower requests the Alternate Currency
Bank to include as an Alternate Currency hereunder and which is acceptable to
the Alternate Currency Bank and with respect to which an Alternate Currency
Addendum has been executed by an Alternate Currency Borrower and the Alternate
Currency Bank in connection therewith.
"ALTERNATE CURRENCY ADDENDUM" means an addendum (i) substantially in the
form of Exhibit J-1 and Exhibit J-2, (ii) or, in the case of any addendum
relating to a currency other than Australian Dollars or Pounds Sterling, in such
form as shall be approved by the Alternate Currency Bank.
"ALTERNATE CURRENCY BANK" means The First National Bank of Chicago (or any
Affiliate, branch or agency thereof) to the extent it is party to an Alternate
Currency Addendum. If any agency, branch or Affiliate of The First National Bank
of Chicago shall be a party to an Alternate Currency Addendum, such agency,
branch or Affiliate shall, to the extent of any commitment extended and any
Loans made by it, have all the rights of The First National Bank of Chicago
hereunder; provided, however, that The First National Bank of Chicago shall to
the exclusion of such agency, branch or Affiliate, continue to have all the
voting rights vested in it by the terms hereof.
"ALTERNATE CURRENCY BORROWER" means either "UK Subsidiary" (as defined in
the preamble hereto) or "Australian Subsidiary" (as defined in the preamble
hereto), as the case may be.
"ALTERNATE CURRENCY BORROWING" means any borrowing consisting of a Loan
made in an Alternate Currency.
"ALTERNATE CURRENCY COMMITMENT" means, for the Alternate Currency Bank for
each Alternate Currency, the obligation of such Alternate Currency Bank to make
Alternate Currency Loans not exceeding the Dollar Amount set forth in the
applicable Alternate Currency Addendum, as such amount may be modified from time
to time pursuant to the terms of this Agreement and the applicable Alternate
Currency Addendum.
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"ALTERNATE CURRENCY INTEREST PERIOD" means, with respect to any Alternate
Currency Loan, the Interest Period as set forth on the applicable Alternate
Currency Addendum.
"ALTERNATE CURRENCY LOAN" means any Loan denominated in an Alternate
Currency made by the Alternate Currency Bank to an Alternate Currency Borrower
pursuant to Section 2.21 and an Alternate Currency Addendum.
"APPLICABLE COMMITMENT FEE PERCENTAGE" means, as at any date of
determination, the rate per annum then applicable in the determination of the
amount payable under Section 2.15(C)(i) hereof determined in accordance with the
provisions of Section 2.15(D)(ii) hereof.
"APPLICABLE EUROCURRENCY MARGIN" means, as at any date of determination,
the rate per annum then applicable to Eurocurrency Rate Loans determined in
accordance with the provisions of Section 2.15(D)(ii) hereof.
"APPLICABLE FLOATING RATE MARGIN" means, as at any date of determination,
the rate per annum then applicable to Floating Rate Loans determined in
accordance with the provisions of Section 2.15(D)(ii) hereof.
"APPLICABLE L/C FEE PERCENTAGE" means, as at any date of determination, a
rate per annum equal to the Applicable Eurocurrency Margin for Eurocurrency Rate
Loans in effect on such date.
"APPLICABLE PRO RATA SHARE" means, for any Lender, such Lender's Revolving
Loan Pro Rata Share or Term Loan Pro Rata Share, as applicable.
"APPROVED FUND" means, with respect to any Lender that is a fund or
commingled investment vehicle that invests in commercial loans, any other fund
that invests in commercial loans and is managed or advised by the same
investment advisor as such Lender or by an Affiliate of such investment advisor.
"APPROXIMATE EQUIVALENT AMOUNT" means any currency with respect to any
amount of Dollars shall mean the Equivalent Amount of such currency with respect
to such amount of Dollars at such date, rounded up to the nearest amount of such
currency as determined by the Agent from time to time.
"ARRANGER" means First Chicago Capital Markets, Inc., in its capacity as
the arranger for the loan transaction evidenced by this Agreement.
"ASSIGNMENT AGREEMENT" means an assignment and acceptance agreement entered
into in connection with an assignment pursuant to Section 13.3 hereof in
substantially the form of Exhibit D.
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"ASSET SALE" means, with respect to any Person, the sale, lease,
conveyance, disposition or other transfer by such Person of any of its assets
(including by way of a sale-leaseback transaction, and including the sale or
other transfer of any of the Equity Interests of any Subsidiary of such Person)
to any Person other than the Borrower or any of its wholly-owned Subsidiaries
other than (i) the sale of Inventory in the ordinary course of business, (ii)
the sale or other disposition of any obsolete, excess, damaged or worn-out
Equipment disposed of in the ordinary course of business and (iii) leases of
personal property (including leases or licenses of intellectual property).
"AUSTRALIAN DOLLARS" shall mean the lawful currency of Australia.
"AUTHORIZED OFFICER" means any of the President, any Vice President or
Chief Financial Officer of the Borrower, acting singly.
"BENEFIT PLAN" means a defined benefit plan as defined in Section 3(35) of
ERISA (other than a Multiemployer Plan) in respect of which the Borrower or any
other member of the Controlled Group is, or within the immediately preceding six
(6) years was, an "employer" as defined in Section 3(5) of ERISA.
"BORROWER" means Schawk, Inc., a Delaware corporation, together with its
successors and assigns, including a debtor-in-possession on behalf of the
Borrower, and "BORROWERS" shall mean, collectively, the Borrower and the
Alternate Currency Borrowers.
"BORROWER PLEDGE AGREEMENT" means that certain Pledge Agreement dated on or
before the Closing Date executed by the Borrower in favor of the Agent for the
benefit of the Holders of Secured Obligations, as amended, restated or otherwise
modified from time to time, pledging (i) one hundred percent (100%) of the
Capital Stock of each Domestic Incorporated Subsidiary and (ii) the lesser of
(a) sixty-five percent (65%) of all of the outstanding Capital Stock of each
Foreign Incorporated Subsidiary and (b) all of the outstanding Capital Stock of
each Foreign Incorporated Subsidiary currently or hereafter owned by the
Borrower.
"BORROWING DATE" means a date on which an Advance or Swing Line Loan is
made hereunder.
"BORROWING/CONVERSION/CONTINUATION NOTICE" is defined in Section 2.8
hereof.
"BUSINESS DAY" means (i) with respect to any borrowing, payment or rate
selection of Loans bearing interest at the Eurocurrency Rate, a day (other than
a Saturday or Sunday) on which banks are open for business in Chicago, Illinois
and New York, New York and on which dealings in Dollars and the other Agreed
Currencies are carried on in the London interbank market and (ii) for all other
purposes a day (other than a Saturday or Sunday) on which banks are open for
business in Chicago, Illinois and New York, New York.
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"CAPITAL EXPENDITURES" means, for any period, the aggregate of all
expenditures (whether or not paid in cash and including Capitalized Leases and
purchase money indebtedness) by the Borrower and its consolidated Subsidiaries
during that period that, in conformity with Agreement Accounting Principles, are
required to be included in or reflected by the property, plant, equipment or
similar fixed asset accounts reflected in the consolidated balance sheet of the
Borrower and its Subsidiaries; provided, however, that the term "Capital
Expenditures" shall not include (a) expenditures made in connection with the
replacement, substitution or restoration of assets (i) to the extent financed
from insurance proceeds paid on account of the loss of or damage to the assets
being replaced or restored or (ii) with awards of compensation arising from the
taking by eminent domain or condemnation of the assets being replaced; (b) the
purchase price of equipment that is purchased simultaneously with the trade-in
of existing equipment to the extent that the gross amount of such purchase price
is reduced by the credit granted by the seller of such equipment for the
equipment being traded in at such time; (c) the purchase of plant, property or
equipment made within one year of the sale of any asset to the extent purchased
with the proceeds of such sale; (d) the portion of the purchase price in
connection with any acquisition that would otherwise be included as additions to
property, plant or equipment; and (e) expenditures made in connection with any
acquisition.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person; provided, however, that
"Capital Stock" shall not include any debt securities convertible into equity
securities prior to such conversion.
"CAPITALIZED LEASE" of a Person means any lease of property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with Agreement Accounting Principles.
"CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be capitalized
on a balance sheet of such Person prepared in accordance with Agreement
Accounting Principles.
"CASH EQUIVALENTS" means (i) marketable direct obligations issued or
unconditionally guaranteed by the governments of the United States, England or
Australia and backed by the full faith and credit of the United States
government; (ii) domestic, English, Australian and Eurocurrency certificates of
deposit and time deposits, bankers' acceptances and floating rate certificates
of deposit issued by any commercial bank organized under the laws of the United
States, any state thereof, the District of Columbia, any foreign bank, or its
branches or agencies (fully protected against currency fluctuations for any such
deposits with a term of more than ninety (90) days); (iii) shares of money
market, mutual or similar funds having assets in excess of $100,000,000 and the
investments of which are limited to investment grade securities (i.e.,
securities rated at least Baa by Moody's Investors Service, Inc. or at least BBB
by Standard &
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Poor's Ratings Group); and (iv) commercial paper of United States and foreign
banks and bank holding companies and their subsidiaries and United States and
foreign finance, commercial industrial or utility companies which, at the time
of acquisition, are rated A-1 (or better) by Standard & Poor's Ratings Group or
P-1 (or better) by Moody's Investors Services, Inc.; provided that the
maturities of such Cash Equivalents shall not exceed 365 three hundred
sixty-five (365) days from the date of acquisition thereof.
"CHANGE" is defined in Section 4.2 hereof.
"CHANGE OF CONTROL" means an event or series of events by which:
(a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the exchange Act of 1934), becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act of 1934, provided that a
person shall be deemed to have "beneficial ownership" of all securities that
such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of
thirty-five percent (35%) or more of the combined voting power of the Borrower's
outstanding Capital Stock ordinarily having the right to vote at an election of
directors; or
(b) the majority of the board of directors of the Borrower fails to
consist of Continuing Directors; or
(c) the Borrower consolidates with or merges into another corporation
or conveys, transfers or leases all or substantially all of its property to any
Person, or any corporation consolidates with or merges into the Borrower, in
either event pursuant to a transaction in which the outstanding Capital Stock of
the Borrower is reclassified or changed into or exchanged for cash, securities
or other property; or
(d) the Borrower shall cease to own and control at least eighty
percent (80%) of the economic and voting rights associated with all of the
outstanding Capital Stock of its existing Subsidiaries as of the Closing Date.
"CLOSING DATE" means the date on which the initial Loans are advanced
hereunder.
"CODE" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"COLLATERAL" means all property and interests in property now owned or
hereafter acquired by the Borrower or any of its Subsidiaries in or upon which a
security interest, lien or mortgage is granted to the Agent, for the benefit of
the Holders of Secured Obligations, or to the Agent, for the benefit of the
Lenders, whether under the Pledge Agreement, under any of the other Collateral
Documents or under any of the other Loan Documents.
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"COLLATERAL DOCUMENTS" means all agreements, instruments and documents
executed in connection with this Agreement, including, without limitation, the
Pledge Agreements, the Guaranties, the Equitable Charge and all other security
agreements, mortgages, loan agreements, notes, guarantees, subordination
agreements, pledges, powers of attorney, consents, assignments, contracts, fee
letters, notices, leases, financing statements and all other written matter
whether heretofore, now, or hereafter executed by or on behalf of the Borrower
or any of its Subsidiaries and delivered to the Agent or any of the Lenders,
together with all agreements and documents referred to therein or contemplated
thereby.
"COMMISSION" means the Securities and Exchange Commission of the United
States of America and any Person succeeding to the functions thereof.
"COMMITMENT" means, for each Lender, collectively, such Lender's Revolving
Loan Commitment and Term Loan Commitment.
"CONSOLIDATED NET WORTH" means, at a particular date, all amounts which
would be included under shareholders' equity on the consolidated balance sheet
for the Borrower and its consolidated Subsidiaries determined in accordance with
Agreement Accounting Principles, plus an amount equal to any non-cash write-down
of assets made as a result of integration and rationalization related to the
acquisition of the Target made at any time after the Closing Date, plus an
amount equal to any non-recurring expenses related to the reorganization,
restructuring and rationalization of the Borrower and its Subsidiaries
(including the businesses purchased pursuant to the Tender Offer) when and as
charged to reduce net worth to the extent charged during the first three years
following the Closing Date up to amounts not to be in excess of $25,000,000, on
a pre-tax basis, in the aggregate.
"CONSOLIDATED TANGIBLE ASSETS" means the total assets of the Borrower and
its Subsidiaries on a consolidated basis (determined in accordance with
Agreement Accounting Principles), but excluding therefrom all items that are
treated as intangibles under Agreement Accounting Principles.
"CONTAMINANT" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos, polychlorinated biphenyls ("PCBs"), or any
constituent of any such substance or waste, and includes but is not limited to
these terms as defined in Environmental, Health or Safety Requirements of Law.
"CONTINGENT OBLIGATION", as applied to any Person, means any Contractual
Obligation, contingent or otherwise, of that Person with respect to any
Indebtedness of another or other obligation or liability of another, including,
without limitation, any such Indebtedness, obligation or liability of another
directly or indirectly guaranteed, endorsed (otherwise than for collection or
deposit in the ordinary course of business), co-made or discounted or sold with
recourse by that Person, or in respect of which that Person is otherwise
directly or indirectly liable, including Contractual Obligations (contingent or
otherwise) arising through any agreement to purchase,
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<PAGE>
repurchase, or otherwise acquire such Indebtedness, obligation or liability or
any security therefor, or to provide funds for the payment or discharge thereof
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise), or to maintain solvency, assets, level of income, or other
financial condition, or to make payment other than for value received. The
amount of any Contingent Obligation shall be equal to the present value of the
portion of the obligation so guaranteed or otherwise supported, in the case of
known recurring obligations, and the maximum reasonably anticipated liability in
respect of the portion of the obligation so guaranteed or otherwise supported
assuming such Person is required to perform thereunder, in all other cases.
"CONTINUING DIRECTOR" means, with respect to any Person as of any date of
determination, any member of the board of directors of such Person who (a) was a
member of such board of directors on the date of this Agreement, or (b) was
nominated for election or elected to such board of directors with the approval
of the Continuing Directors who were members of such board at the time of such
nomination or election.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any provision of
any equity or debt securities issued by that Person or any indenture, mortgage,
deed of trust, security agreement, pledge agreement, guaranty, contract,
undertaking, agreement or instrument, in any case in writing, to which that
Person is a party or by which it or any of its properties is bound, or to which
it or any of its properties is subject.
"CONTROLLED GROUP" means the group consisting of (i) any corporation which
is a member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Borrower; (ii) a partnership or other trade
or business (whether or not incorporated) which is under common control (within
the meaning of Section 414(c) of the Code) with the Borrower; and (iii) a member
of the same affiliated service group (within the meaning of Section 414(m) of
the Code) as the Borrower, any corporation described in clause (i) above or any
partnership or trade or business described in clause (ii) above.
"CONTROLLED SUBSIDIARY" of any Person means a Subsidiary of such Person (i)
ninety percent (90%) or more of the total Equity Interests or other ownership
interests of which (other than directors' qualifying shares) shall at the time
be owned by such Person or by one or more wholly-owned Subsidiaries of such
Person and (ii) of which such Person possesses, directly or indirectly, the
power to direct or cause the direction of the management or policies, whether
through the ownership of voting securities, by agreement or otherwise.
"CORPORATE BASE RATE" means the corporate base rate of interest announced
by First Chicago from time to time, changing when and as said corporate base
rate changes.
"CURE LOAN" is defined in Section 9.2(iii) hereof.
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<PAGE>
"CUSTOMARY PERMITTED LIENS" means:
(i) Liens (other than Environmental Liens and Liens in favor of the
IRS or the PBGC) with respect to the payment of taxes, assessments or
governmental charges in all cases which are not yet due or (if foreclosure,
distraint, sale or other similar proceedings shall not have been commenced or
any such proceeding after being commenced is stayed) which are being contested
in good faith by appropriate proceedings properly instituted and diligently
conducted and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with Agreement Accounting
Principles;
(ii) statutory Liens of landlords and Liens of suppliers, mechanics,
carriers, materialmen, warehousemen or workmen and other similar Liens imposed
by law created in the ordinary course of business for amounts not yet due or
which are being contested in good faith by appropriate proceedings properly
instituted and diligently conducted and with respect to which adequate reserves
or other appropriate provisions are being maintained in accordance with
Agreement Accounting Principles;
(iii) Liens (other than Environmental Liens and Liens in favor of the
IRS or the PBGC) incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance or other types of
social security benefits or to secure the performance of bids, tenders, sales,
contracts (other than for the repayment of borrowed money), surety, appeal and
performance bonds; provided that (A) all such Liens do not in the aggregate
materially detract from the value of the Borrower's or such Subsidiary's assets
or property taken as a whole or materially impair the use thereof in the
operation of the businesses taken as a whole, and (B) all Liens securing bonds
to stay judgments or in connection with appeals do not secure at any time an
aggregate amount exceeding $10,000,000;
(iv) Liens arising with respect to zoning restrictions, easements,
encroachments, licenses, reservations, covenants, rights-of-way, utility
easements, building restrictions and other similar charges, restrictions or
encumbrances on the use of real property which do not in any case materially
detract from the value of the property subject thereto or materially interfere
with the ordinary use or occupancy of the real property or with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries;
(v) Liens of attachment or judgment with respect to judgments, writs
or warrants of attachment, or similar process against the Borrower or any of its
Subsidiaries which do not constitute a Default under Section 8.1(H) hereof; and
(vi) any interest or title of the lessor in the property subject to
any operating lease entered into by the Borrower or any of its Subsidiaries in
the ordinary course of business.
"DEFAULT" means an event described in Article VIII hereof.
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"DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
that is ninety-one (91) days after the later of (i) the Revolving Loan
Termination Date and (ii) the Term Loan Termination Date.
"DOL" means the United States Department of Labor and any Person succeeding
to the functions thereof.
"DOLLAR" and "$" means dollars in the lawful currency of the United States
of America.
"DOLLAR AMOUNT" of any currency at any date shall mean (i) the amount of
such currency if such currency is Dollars or (ii) the Equivalent Amount of
Dollars if such currency is any currency other than Dollars.
"DOMESTIC INCORPORATED SUBSIDIARY" means a Subsidiary of the Borrower
organized under the laws of a jurisdiction located in the United States of
America.
"EBITDA" means, for any period, on a consolidated basis for the Borrower
and its Subsidiaries, the sum of the amounts for such period, without
duplication, of (i) Net Income, plus (ii) Interest Expense to the extent
deducted in computing Net Income, plus (iii) charges against income for foreign,
federal, state and local taxes to the extent deducted in computing Net Income,
plus (iv) depreciation expense to the extent deducted in computing Net Income,
plus (v) amortization expense, including, without limitation, amortization of
goodwill and other intangible assets to the extent deducted in computing Net
Income, plus (vi) other non-cash charges classified as long-term deferrals in
accordance with Agreement Accounting Principles to the extent deducted in
computing Net Income, plus (vii) other extraordinary non-cash charges to the
extent deducted in computing Net Income, minus (viii) other extraordinary
non-cash credits to the extent added in computing Net Income, plus (ix)
nonrecurring after-tax losses (or minus nonrecurring after-tax gains), plus (x)
an amount equal to the amount of any reduction of Net Income for such period
attributable to the adjustment to the value of assets made in connection with
any Permitted Acquisition, plus (xi) an amount equal to any non-cash write-down
of assets made as a result of integration and rationalization related to
acquisitions, including, without limitation, the acquisition of Target, made at
any time within the first three fiscal years after the Closing Date plus (xii)
any non-recurring expenses related to the reorganization, restructuring and
rationalization of the Borrower and its Subsidiaries (including the business
purchased pursuant to the Tender Offer) which are charged to operating expenses
when and as charged during the first three fiscal years following the Closing
Date up to amounts not to be in excess of $25,000,000, on a pre-tax basis, in
the aggregate to the extent such charges are deducted in computing Net Income.
EBITDA shall be calculated on a pro forma basis giving effect to acquisitions,
including, without limitation, the acquisition of Target on a last twelve (12)
months' basis.
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"ELIGIBLE CURRENCY" means any currency other than Dollars with respect to
which the Agent or the Borrower has not given notice in accordance with Section
2.23 and that is readily available, freely traded, in which deposits are
customarily offered to banks in the London interbank market, convertible into
Dollars in the international interbank market available to the Lenders in such
market and as to which an Equivalent Amount may be readily calculated. If, after
the designation by the Lenders of any currency as an Agreed Currency or
Alternate Currency, currency control or other exchange regulations are imposed
in the country in which such currency is issued with the result that different
types of such currency are introduced, such country's currency is, in the
determination of the Agent, no longer readily available or freely traded or (ii)
as to which, in the determination of the Agent, an Equivalent Amount is not
readily calculable (each of clause (i) and (ii), a "DISQUALIFYING EVENT"), then
the Agent shall promptly notify the Lenders and the Borrower, and such country's
currency shall no longer be an Agreed Currency or Alternate Currency until such
time as the Disqualifying Event(s) no longer exist, but in any event within five
(5) Business Days of receipt of such notice from the Agent, the Borrower shall
repay all Loans in such currency to which the Disqualifying Event applies or
convert such Loan into Loans in Dollars or another Agreed Currency or Alternate
Currency, subject to the other terms contained in Articles II and IV.
"ENVIRONMENTAL, HEALTH OR SAFETY REQUIREMENTS OF LAW" means all
Requirements of Law derived from or relating to foreign, federal, state and
local laws or regulations relating to or addressing pollution or protection of
the environment, or protection of worker health or safety, including, but not
limited to, the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. ss. 9601 et seq., the Occupational Safety and Health Act of 1970,
29 U.S.C. ss. 651 et seq., and the Resource Conservation and Recovery Act of
1976, 42 U.S.C. ss. 6901 et seq., in each case including any amendments thereto,
any successor statutes, and any regulations or guidance promulgated thereunder,
and any state or local equivalent thereof.
"ENVIRONMENTAL LIEN" means a lien in favor of any Governmental Authority
for (a) any liability under Environmental, Health or Safety Requirements of Law,
or (b) damages arising from, or costs incurred by such Governmental Authority in
response to, a Release or threatened Release of a Contaminant into the
environment.
"ENVIRONMENTAL PROPERTY TRANSFER ACT" means any applicable requirement of
law that conditions, restricts, prohibits or requires any notification or
disclosure triggered by the closure of any property or the transfer, sale or
lease of any property or deed or title for any property for environmental
reasons, including, but not limited to, any so-called "Industrial Site Recovery
Act" or "Responsible Property Transfer Act."
"EQUIPMENT" means all of the Borrower's present and future (i) equipment,
including, without limitation, machinery, manufacturing, distribution, selling,
data processing and office equipment, assembly systems, tools, molds, dies,
fixtures, appliances, furniture, furnishings, vehicles, vessels, aircraft,
aircraft engines, and trade fixtures, (ii) other tangible personal property
(other than the Borrower's Inventory), and (iii) any and all accessions, parts
and
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<PAGE>
appurtenances attached to any of the foregoing or used in connection therewith,
and any substitutions therefor and replacements, products and proceeds thereof.
"EQUITABLE CHARGE" means that certain Charge Over Shares dated on or before
the Closing Date executed by the Borrower in favor of the Agent for the benefit
of the Holders of Secured Obligations, as amended, restated, supplemented or
otherwise modified from time to time.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock). Equity Interests will not
include any Incentive Arrangements or obligations or payments thereunder.
"EQUIVALENT AMOUNT" of any currency with respect to any amount of Dollars
at any date shall mean the equivalent in such currency of such amount of
Dollars, calculated on the basis of the arithmetical mean of the buy and sell
spot rates of exchange of the Agent or Alternate Currency Bank, as applicable,
in the London interbank market (or other market where the Agent's or Alternate
Currency Bank's, as applicable, foreign exchange operations in respect of such
currency are then being conducted) for such other currency at or about 11:00
a.m. (local time) two (2) Business Days prior to the date on which such amount
is to be determined (i) if such currency is Australian Dollars or Pounds
Sterling, rounded up to the nearest 100,000 of such currency, and (ii) if such
currency is any other Alternate Currency, rounded up to the nearest amount of
such currency as determined by the Alternate Currency Bank from time to time;
provided, however, that if at the time of any such determination, for any
reason, no such spot rate is being quoted, the Agent or Alternate Currency
Bank's, as applicable, may use any reasonable method it deems appropriate to
determine such amount, and such determination shall be conclusive absent
manifest error.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time including (unless the context otherwise requires) any
rules or regulations promulgated thereunder.
"EURO" means the euro referred to in the Council Regulation (EC) No.
1103/97 dated 17 June 1997 passed by the Council of the European Union, or, if
different, the then lawful currency of the member states of the European Union
that participate in the third stage of the Economic and Monetary Union.
"EUROCURRENCY BASE RATE" means, with respect to a Eurocurrency Rate Loan
for any specified Interest Period, either (i) the rate of interest per annum
equal to the rate for deposits in the applicable Agreed Currency in the
approximate amount of the pro rata share of the Agent of such Eurocurrency Rate
Advance with a maturity approximately equal to such Interest Period which
appears on Telerate Page 3740 or Telerate Page 3750, as applicable, or, if there
is more than one such rate, the average of such rates rounded to the nearest
1/100 of 1%, as of 11:00 a.m. (London time) two (2) Business Days prior to the
first day of such Interest Period or (ii) if no
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such rate of interest appears on Telerate Page 3740 or Telerate Page 3750, as
applicable, for any specified Interest Period, the rate at which deposits in the
applicable Agreed Currency are offered by the Agent to first-class banks in the
London interbank market at approximately 11:00 a.m. (London time) two (2)
Business Days prior to the first day of such Interest Period, in the approximate
amount of the Applicable Pro Rata Share of First Chicago of such Eurocurrency
Rate Loan and having a maturity approximately equal to such Interest Period, in
each case, as adjusted for Reserves. The terms "Telerate Page 3740" and
"Telerate Page 3750" mean the display designated as "Page 3740" and "Page 3750",
as applicable, on the Associated Press-Dow Jones Telerate Service (or such other
page as may replace Page 3740 or Page 3750, as applicable, on the Associated
Press-Dow Jones Telerate Service or such other service as may be nominated by
the British Bankers' Association as the information vendor for the purpose of
displaying British Bankers' Association interest rate settlement rates for the
relevant Agreed Currency). Any Eurocurrency Base Rate determined on the basis of
the rate displayed on Telerate Page 3740 or Telerate Page 3750 in accordance
with the foregoing provisions of this subparagraph shall be subject to
corrections, if any, made in such rate and displayed by the Associated Press-Dow
Jones Telerate Service within one hour of the time when such rate is first
displayed by such service.
"EUROCURRENCY PAYMENT OFFICE" of the Agent shall mean, for each of the
Agreed Currencies, any agency, branch or Affiliate of the Agent, specified as
the "Eurocurrency Payment Office" for such Agreed Currency in Schedule I hereto
or such other agency, branch, Affiliate or correspondence bank of the Agent, as
it may from time to time specify to the Borrower and each Lender as its
Eurocurrency Payment Office.
"EUROCURRENCY RATE" means, with respect to a Eurocurrency Rate Loan for the
relevant Interest Period, the Eurocurrency Base Rate applicable to such Interest
Period plus the then Applicable Eurocurrency Margin.
"EUROCURRENCY RATE ADVANCE" means an Advance which bears interest at the
Eurocurrency Rate.
"EUROCURRENCY RATE LOAN" means a Loan, or portion thereof, which bears
interest at the Eurocurrency Rate.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
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"FINANCING" means, with respect to any Person, the issuance or sale by such
Person of any Equity Interests of such Person or any Indebtedness consisting of
debt securities of such Person.
"FIRREA" means the Financial Institutions Reform, Recovery, and Enforcement
Act of 1983, as amended, modified or supplemented from time to time.
"FIRST CHICAGO" means The First National Bank of Chicago, in its individual
capacity, and its successors.
"FIXED CHARGE COVERAGE RATIO" is defined in Section 7.4(A) hereof.
"FLOATING RATE" means, for any day for any Loan, a rate per annum equal to
the Alternate Base Rate for such day, changing when and as the Alternate Base
Rate changes, plus the then Applicable Floating Rate Margin.
"FLOATING RATE ADVANCE" means an Advance which bears interest at the
Floating Rate.
"FLOATING RATE LOAN" means a Loan, or portion thereof, which bears interest
at the Floating Rate.
"FOREIGN INCORPORATED SUBSIDIARY" means a Subsidiary of the Borrower which
is not a Domestic Incorporated Subsidiary.
"FOREIGN SUBSIDIARY INVESTMENT" means the sum of (a) all intercompany loans
made on or after the Closing Date from either the Borrower or any Domestic
Incorporated Subsidiary to any Foreign Incorporated Subsidiary; (b) all
Investments made on or after the Closing Date by either the Borrower or any
Domestic Incorporated Subsidiary in any Foreign Incorporated Subsidiary; and (c)
an amount equal to the net benefit derived by the Foreign Incorporated
Subsidiaries resulting from any non-arms length transactions, or any other
transfer of assets conducted other than in the ordinary course of business,
between the Borrower and/or any Domestic Incorporated Subsidiary, on the one
hand, and such Foreign Incorporated Subsidiaries, on the other hand.
"GOVERNMENTAL ACTS" is defined in Section 3.10(A) hereof.
"GOVERNMENTAL AUTHORITY" means any nation or government, any federal,
state, local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative authority or
functions of or pertaining to government, including any authority or other
quasi-governmental entity established to perform any of such functions.
"GROSS NEGLIGENCE" means recklessness, or actions taken or omitted with
conscious indifference to or the complete disregard of consequences. Gross
Negligence does not mean the absence of ordinary care or diligence, or an
inadvertent act or inadvertent failure to act. If the
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term "gross negligence" is used with respect to the Agent or any Lender or any
indemnitee in any of the other Loan Documents, it shall have the meaning set
forth herein.
"GUARANTY" means each of those certain Guaranties executed from time to
time by each of the Domestic Incorporated Subsidiaries of the Borrower in favor
of the Agent for the benefit of itself and the Holders of Secured Obligations,
as amended, restated, supplemented or otherwise modified from time to time, in
substantially the form of Exhibit I attached hereto.
"HEDGING AGREEMENTS" is defined in Section 7.3(P) hereof.
"HEDGING OBLIGATIONS" of a Person means any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, commodity prices,
exchange rates or forward rates applicable to such party's assets, liabilities
or exchange transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"HOLDERS OF SECURED OBLIGATIONS" means the holders of the Secured
Obligations from time to time and shall include their respective successors,
transferees and assigns.
"INCENTIVE ARRANGEMENTS" means any stock appreciation rights, "phantom"
stock plans, employment agreements, non-competition agreements, subscription and
stockholders agreements and other incentive and bonus plans and similar
arrangements made in connection with the retention of executives, officers or
employees of the Borrower.
"INDEBTEDNESS" of a person means, without duplication, such person's (i)
obligations for borrowed money, including, without limitation, subordinated
indebtedness, (ii) obligations representing the deferred purchase price of
property or services (other than accounts payable arising in the ordinary course
of such person's business payable on terms customary in the trade and other than
earn-outs or other similar forms of contingent purchase prices), (iii)
obligations, whether or not assumed, secured by liens on or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) Capitalized Lease Obligations, (vi) outstanding principal
balances (representing securitized but unliquidated assets) under asset
securitization agreements (including, without limitation, the outstanding
principal balance of accounts receivable under receivables transactions) and
(vii) the implied debt component of synthetic leases of which such person is
lessee or any other off-balance sheet financing arrangements (including, without
limitation, any such arrangements giving rise to any Off-Balance Sheet
Liabilities).
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"INDEMNIFIED MATTERS" is defined in Section 10.7(B) hereof.
"INDEMNITEES" is defined in Section 10.7(B) hereof.
"INTEREST EXPENSE" means, for any period, the total interest expense of the
Borrower and its consolidated Subsidiaries, whether paid or accrued (including
the interest component of Capitalized Leases, commitment fees and fees for
stand-by letters of credit, the discount with respect to asset securitization
agreements and the implied interest component of synthetic leases), all as
determined in conformity with Agreement Accounting Principles. Interest Expense
shall not include any interest which in accordance with Agreement Accounting
Principals has been capitalized.
"INTEREST PERIOD" means, (i) any Alternate Currency Interest Period and
(ii) with respect to a Eurocurrency Rate Loan, a period of one (1), two (2),
three (3) months or six (6) months, and, to the extent available to all of the
Lenders, upon request of the Borrower, and only if the Lenders, in their
discretion, shall agree, twelve (12) months, commencing on a Business Day
selected by the Borrower on which a Eurocurrency Rate Advance is made to the
Borrower pursuant to this Agreement; provided, however, notwithstanding anything
in this Agreement to the contrary for the period from the Closing Date to the
earlier of (y) the date that is 90 days after the Closing Date and (z) the date
upon which the Agent confirms that the loan syndication process has been
completed (the "SYNDICATION PERIOD"), "Interest Period" means, with respect to a
Eurocurrency Rate Advance, a period of seven (7) days. Other than during the
Syndication Period, such Interest Period shall end on (but exclude) the day
which corresponds numerically to such date one, two, three or six months and, if
applicable, twelve months thereafter; provided, however, that if there is no
such numerically corresponding day in such next, second, third or sixth and, if
applicable, twelfth succeeding month and, if applicable, twelfth succeeding
month, such Interest Period shall end on the last Business Day of such next,
second, third or sixth succeeding month. If an Interest Period would otherwise
end on a day which is not a Business Day, such Interest Period shall end on the
next succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"INVENTORY" shall mean any and all goods, including, without limitation,
goods in transit, wheresoever located, whether now owned or hereafter acquired
by the Borrower or any of its Subsidiaries, which are held for sale or lease,
furnished under any contract of service or held as raw materials, work in
process or supplies, and all materials used or consumed in the business of
Borrower or any of its Subsidiaries, and shall include all right, title and
interest of the Borrower or any of its Subsidiaries in any property the sale or
other disposition of which has given rise to Receivables and which has been
returned to or repossessed or stopped in transit by the Borrower or any of its
Subsidiaries.
"INVESTMENT" means, with respect to any Person, (i) any purchase or other
acquisition by that Person of any Indebtedness, Equity Interests or other
securities, or of a beneficial interest in any Indebtedness, Equity Interests or
other securities, issued by any other Person, (ii) any
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purchase by that Person of all or substantially all of the assets of a business
(whether of a division, branch, unit operation, or otherwise) conducted by
another Person, and (iii) any loan, advance (other than deposits with financial
institutions available for withdrawal on demand, prepaid expenses, accounts
receivable, advances to employees and similar items made or incurred in the
ordinary course of business) or capital contribution by that Person to any other
Person, including all Indebtedness to such Person arising from a sale of
property by such Person other than in the ordinary course of its business.
"IRS" means the Internal Revenue Service and any Person succeeding to the
functions thereof.
"ISSUING BANKS" means First Chicago or any of its Affiliates in its
separate capacity as an issuer of Letters of Credit pursuant to Section 3.1. The
designation of any Lender as an Issuing Bank after the date hereof shall be
subject to the prior written consent of the Agent.
"LAST TWELVE-MONTH PERIOD" is defined in Section 7.4(A) hereof.
"L/C DOCUMENTS" is defined in Section 3.4 hereof.
"L/C DRAFT" means a draft drawn on an Issuing Bank pursuant to a Letter of
Credit.
"L/C INTEREST" shall have the meaning ascribed to such term in Section 3.6
hereof.
"L/C OBLIGATIONS" means, without duplication, an amount equal to the sum of
(i) the aggregate of the Dollar Amount then available for drawing under each of
the Letters of Credit, (ii) the Dollar Amount equal to the face amount of all
outstanding L/C Drafts corresponding to the Letters of Credit, which L/C Drafts
have been accepted by the applicable Issuing Bank, (iii) the aggregate
outstanding Dollar Amount of all Reimbursement Obligations at such time and (iv)
the aggregate Dollar Amount equal to the face amount of all Letters of Credit
requested by the Borrower but not yet issued (unless the request for an unissued
Letter of Credit has been denied).
"LENDERS" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns.
"LENDING INSTALLATION" means, with respect to a Lender or the Agent, any
office, branch, subsidiary or affiliate of such Lender or the Agent.
"LETTER OF CREDIT" means the letters of credit to be (a) issued by the
Issuing Banks pursuant to Section 3.1 hereof or (b) deemed issued by the Issuing
Banks pursuant to Section 3.2 hereof.
"LEVERAGE RATIO" is defined in Section 7.4(B) hereof.
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"LIEN" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, the interest of a vendor or lessor
under any conditional sale, Capitalized Lease or other title retention
agreement).
"LOAN(S)" means, with respect to a Lender, such Lender's portion of any
Advance made pursuant to Section 2.1 or Section 2.2 hereof, as applicable, and
in the case of the Swing Line Bank, any Swing Line Loan made pursuant to Section
2.3 hereof, and collectively, all Term Loans, Revolving Loans, Swing Line Loans
and each Alternate Currency Loan, whether made or continued as or converted to
Floating Rate Loans or Eurocurrency Rate Loans.
"LOAN ACCOUNT" is defined in Section 2.13(a) hereof.
"LOAN DOCUMENTS" means this Agreement, each Alternate Currency Addenda, the
Collateral Documents, that certain Letter Agreement, dated as of January 19,
1999, by and among the Borrower, the Agent and the Arranger, and all other
documents, instruments, notes and agreements executed in connection therewith or
contemplated thereby, as the same may be amended, restated or otherwise modified
and in effect from time to time.
"MARGIN STOCK" shall have the meaning ascribed to such term in Regulation
U.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower, or the Borrower and its Subsidiaries,
taken as a whole, (b) the collective ability of the Borrower or any of its
Subsidiaries to perform their respective obligations under the Loan Documents in
any material respect, or (c) the ability of the Lenders or the Agent to enforce
in any material respect the Obligations.
"MAXIMUM EUROCURRENCY AMOUNT" means $25,000,000 or such other greater
amount as the Borrower may from time to time designate in writing to the Agent
provided such designated amount shall be agreed to by the Required Lenders.
"MEASUREMENT PERIOD" is defined in Section 7.4(A) hereof.
"MULTIEMPLOYER PLAN" means a "Multiemployer Plan" as defined in Section
4001(a)(3) of ERISA which is, or within the immediately preceding six (6) years
was, contributed to by either the Borrower or any member of the Controlled
Group.
"NATIONAL CURRENCY UNIT" means the unit of currency (other than a Euro
unit) of each member state of the European Union that participates in the third
stage of Economic and Monetary Union.
"NET CASH PROCEEDS" means, with respect to any Asset Sale or Financing by
any Person, (a) cash or Cash Equivalents (freely convertible into Dollars)
received by such Person or any
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Subsidiary of such Person from such Asset Sale (including cash received as
consideration for the assumption or incurrence of liabilities incurred in
connection with or in anticipation of such Asset Sale) or Financing, after (i)
provision for all income or other taxes measured by or resulting from such Asset
Sale or Financing, (ii) payment of all brokerage commissions and other fees and
expenses and commissions related to such Asset Sale or Financing, (iii)
repayment of Indebtedness (and any premium or penalty thereon) secured by a Lien
on any asset disposed of in such Asset Sale or which is or may be required (by
the express terms of the instrument governing such Indebtedness or by applicable
law) to be repaid in connection with such Asset Sale (including payments made to
obtain or avoid the need for the consent of any holder of such Indebtedness),
and (iv) deduction of appropriate amounts to be provided by such Person or a
Subsidiary of such Person as a reserve, in accordance with Agreement Accounting
Principles, against any liabilities associated with the assets sold or disposed
of in such Asset Sale and retained by such Person or a Subsidiary of such Person
after such Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities and liabilities related to environmental
matters or against any indemnification obligations associated with the assets
sold or disposed of in such Asset Sale; and (b) cash or Cash Equivalents
payments in respect of any other consideration received by such Person or any
Subsidiary of such Person from such Asset Sale or Financing upon receipt of such
cash payments by such Person or such Subsidiary.
"NET INCOME" means, for any period, the net income (or loss) after taxes of
the Borrower and its Subsidiaries on a consolidated basis for such period taken
as a single accounting period determined in conformity with Agreement Accounting
Principles.
"NON PRO RATA LOAN" is defined in Section 9.2 hereof.
"NOTICE OF ASSIGNMENT" is defined in Section 13.3(B) hereof.
"OBLIGATIONS" means all Loans, L/C Obligations, advances, debts,
liabilities, obligations, covenants and duties owing by the Borrowers or any of
their Subsidiaries to the Agent, any Lender, the Swing Line Bank, the Arranger,
any Affiliate of the Agent or any Lender, any Issuing Bank or any Indemnitee, of
any kind or nature, present or future, arising under this Agreement, the L/C
Documents, any Alternate Currency Addendum or any other Loan Document, whether
or not evidenced by any note, guaranty or other instrument, whether or not for
the payment of money, whether arising by reason of an extension of credit, loan,
guaranty, indemnification, or in any other manner, whether direct or indirect
(including those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereafter arising and however acquired. The term
includes, without limitation, all interest, charges, expenses, fees, reasonable
attorneys' fees and disbursements, reasonable paralegals' fees (in each case
whether or not allowed), and any other sum chargeable to the Borrower or any of
its Subsidiaries under this Agreement or any other Loan Document.
"OFF-BALANCE SHEET LIABILITIES" of a Person means (a) any repurchase
obligation or liability of such Person or any of its Subsidiaries with respect
to accounts or notes receivable sold by such Person or any of its Subsidiaries,
(b) any liability of such Person or any of its
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Subsidiaries under any sale and leaseback transactions which do not create a
liability on the consolidated balance sheet of such Person, (c) any liability of
such Person or any of its Subsidiaries under any financing lease or so-called
"synthetic" lease transaction, or (d) any obligations of such Person or any of
its Subsidiaries arising with respect to any other transaction which is the
functional equivalent of or takes the place of borrowing but which does not
constitute a liability on the consolidated balance sheets of such Person and its
Subsidiaries.
"OTHER TAXES" is defined in Section 2.15(E)(ii) hereof.
"PARTICIPANTS" is defined in Section 13.2(A) hereof.
"PAYMENT DATE" means the last Business Day of each month.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"PERMITTED ACQUISITION" is defined in Section 7.3(G) hereof.
"PERMITTED EXISTING CONTINGENT OBLIGATIONS" means the Contingent
Obligations of the Borrower and its Subsidiaries identified as such on Schedule
1.1.4 to this Agreement.
"PERMITTED EXISTING INDEBTEDNESS" means the Indebtedness of the Borrower
and its Subsidiaries identified as such on Schedule 1.1.1 to this Agreement.
"PERMITTED EXISTING INVESTMENTS" means the Investments of the Borrower and
its Subsidiaries identified as such on Schedule 1.1.2 to this Agreement.
"PERMITTED EXISTING LIENS" means the Liens on assets of the Borrower and
its Subsidiaries identified as such on Schedule 1.1.3 to this Agreement.
"PERMITTED FOREIGN SUBSIDIARY INVESTMENT AMOUNT" means the sum of (i)
$25,000,000 plus (ii) Investments in Foreign Incorporated Subsidiaries made in
compliance with Section 7.3(D)(xi).
"PERMITTED PURCHASE MONEY INDEBTEDNESS" is defined in Section 7.3(A)(vii)
hereof.
"PERMITTED REFINANCING INDEBTEDNESS" means any replacement, renewal,
refinancing or extension of any Indebtedness permitted by this Agreement that
(i) does not exceed the aggregate principal amount (plus accrued interest and
any applicable premium and associated fees and expenses) of the Indebtedness
being replaced, renewed, refinanced or extended, (ii) does not have a Weighted
Average Life to Maturity at the time of such replacement, renewal, refinancing
or extension that is less than the Weighted Average Life to Maturity of the
Indebtedness being replaced, renewed, refinanced or extended, (iii) does not
rank at the time of such replacement, renewal, refinancing or extension senior
to the Indebtedness being replaced, renewed, refinanced or extended, and (iv)
does not contain terms (including, without limitation,
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terms relating to security, amortization, interest rate, premiums, fees,
covenants, event of default and remedies) materially less favorable to the
Borrower or to the Lenders than those applicable to the Indebtedness being
replaced, renewed, refinanced or extended.
"PERMITTED SUBORDINATED INDEBTEDNESS" means subordinated Indebtedness of
the Borrower issued to the holders of certain preferred stock of the Target on
or prior to the Closing Date, on terms (including, without limitation, terms
relating to amount, interest rate, subordination, security, amortization,
premium, fees, covenants, events of default and remedies) and in form acceptable
to the Agent, as the same may be amended, supplemented, and modified in
accordance with Section 7.3(R) hereof.
"PERSON" means any individual, corporation, firm, enterprise, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company or other entity of any kind, or any
government or political subdivision or any agency, department or instrumentality
thereof.
"PLAN" means an employee benefit plan defined in Section 3(3) of ERISA,
other than a Multiemployer Plan, in respect of which the Borrower or any member
of the Controlled Group is, or within the immediately preceding six (6) years
was, an "employer" as defined in Section 3(5) of ERISA.
"PLEDGE AGREEMENTS" shall mean (i) the Borrower Pledge Agreement, (ii) the
Equitable Charge and (iii) the pledge agreements from time to time executed
pursuant to the terms of clause (i) and clause (iii) of Section 7.2(K) in favor
of the Agent for the benefit of the Holders of Secured Obligations, as the same
may from time to time be amended, restated, supplemented or otherwise modified
from time to time.
"POUNDS STERLING" shall mean the lawful currency of England.
"PRO RATA SHARE" means, with respect to any Lender, (i) at any time prior
to the date of this Agreement, the percentage obtained by dividing (A) such
Lender's Commitments at such time (in each case, as adjusted from time to time
in accordance with the provisions of this Agreement) by (B) the sum of the
Aggregate Term Loan Commitment and the Aggregate Revolving Loan Commitment at
such time and (ii) at any time after the date of this Agreement, the percentage
obtained by dividing (A) the sum of such Lender's Term Loans and Revolving Loan
Commitment at such time (in each case, as adjusted from time to time in
accordance with the provisions of this Agreement) by (B) the sum of the
aggregate amount of all of the Term Loans and the Aggregate Revolving Loan
Commitment at such time; provided, however, if all of the Commitments are
terminated pursuant to the terms of this Agreement, then "Pro Rata Share" means
the percentage obtained by dividing (x) the sum of (A) such Lender's Term Loans
and Revolving Loans, plus (B) such Lender's share of the obligations to purchase
participations in Swing Line Loans and Letters of Credit, by (y) the sum of (A)
the aggregate outstanding amount of all Term Loans and Revolving Loans, plus (B)
the aggregate outstanding amount of all Swing Line Loans and Letters of Credit.
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"PURCHASERS" is defined in Section 13.3(A) hereof.
"RATE OPTION" means the Eurocurrency Rate or the Floating Rate.
"RECEIVABLE(S)" means and includes all of the Borrower's presently existing
and hereafter arising or acquired accounts, accounts receivable, and all present
and future rights of the Borrower to payment for goods sold or leased or for
services rendered (except those evidenced by instruments or chattel paper),
whether or not they have been earned by performance, and all rights in any
merchandise or goods which any of the same may represent, and all rights, title,
security and guaranties with respect to each of the foregoing, including,
without limitation, any right of stoppage in transit.
"REGISTER" is defined in Section 13.3(C) hereof.
"REGULATION T" means Regulation T of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by and to brokers and dealers of securities for the purpose
of purchasing or carrying margin stock (as defined therein).
"REGULATION U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks, non-banks and non-broker lenders for the purpose
of purchasing or carrying Margin Stock applicable to member banks of the Federal
Reserve System.
"REGULATION X" means Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by foreign lenders for the purpose of purchasing or carrying
margin stock (as defined therein).
"REIMBURSEMENT OBLIGATION" is defined in Section 3.7 hereof.
"RELEASE" means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment, including the movement of Contaminants through or in the
air, soil, surface water or groundwater.
"RENTALS" of a Person means the aggregate fixed amounts payable by such
Person under any lease of real or personal property that has an initial or
remaining non-cancelable lease term in excess of one year but does not include
any amounts payable under Capitalized Leases of such Person.
"REPLACEMENT LENDER" is defined in Section 2.20 hereof.
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"REPORTABLE EVENT" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within thirty (30)
days after such event occurs, provided, however, that a failure to meet the
minimum funding standards of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
"REQUIRED LENDERS" means Lenders whose Pro Rata Shares, in the aggregate,
are greater than fifty percent (50%); provided, however, that, if any of the
Lenders shall have failed to fund its Revolving Loan Pro Rata Share of (i) any
Revolving Loan requested by the Borrower, (ii) any Revolving Loan required to be
made in connection with reimbursement for any L/C Obligations, (iii) any
participation in any Alternate Currency Loan pursuant to Section 2.21(e), or
(iv) any Swing Line Loan as requested by the Agent, which such Lenders are
obligated to fund under the terms of this Agreement, and any such failure has
not been cured, then for so long as such failure continues, "REQUIRED LENDERS"
means Lenders (excluding all Lenders whose failure to fund their respective
Revolving Loan Pro Rata Shares of such Revolving Loans or Swing Line Loans has
not been so cured) whose Pro Rata Shares represent greater than fifty percent
(50%) of the aggregate Pro Rata Shares of such Lenders; provided further,
however, that, if the Commitments have been terminated pursuant to the terms of
this Agreement, "REQUIRED LENDERS" means Lenders (without regard to such
Lenders' performance of their respective obligations hereunder) whose aggregate
ratable shares (stated as a percentage) of the aggregate outstanding principal
balance of all Loans and L/C Obligations are greater than fifty percent (50%).
"REQUIREMENTS OF LAW" means, as to any Person, the charter and by-laws or
other organizational or governing documents of such Person, and any law, 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 any of its
property or to which such Person or any of its property is subject including,
without limitation, the Securities Act of 1933, the Securities Exchange Act of
1934, Regulations T, U and X, ERISA, the Fair Labor Standards Act, the Worker
Adjustment and Retraining Notification Act, Americans with Disabilities Act of
1990, and any certificate of occupancy, zoning ordinance, building,
environmental or land use requirement or permit or environmental, labor,
employment, occupational safety or health law, rule or regulation, including
Environmental, Health or Safety Requirements of Law.
"RESERVES" shall mean the maximum reserve requirement, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) with respect
to "Eurocurrency liabilities" or in respect of any other category of liabilities
which includes deposits by reference to which the interest rate on Eurocurrency
Rate Loans is determined or category of extensions of credit or other assets
which includes loans by a non-United States office of any Lender to United
States residents.
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"RESTRICTED PAYMENT" means (i) any dividend or other distribution, direct
or indirect, on account of any Equity Interests of the Borrower now or hereafter
outstanding, except a dividend payable solely in the Borrower's Capital Stock
(other than Disqualified Stock) or in options, warrants or other rights to
purchase such Capital Stock, (ii) any redemption, retirement, purchase or other
acquisition for value, direct or indirect, of any Equity Interests of the
Borrower or any of its Subsidiaries now or hereafter outstanding, other than in
exchange for, or out of the proceeds of, the substantially concurrent sale
(other than to a Subsidiary of the Borrower) of other Equity Interests of the
Borrower (other than Disqualified Stock), (iii) any redemption, purchase,
retirement, defeasance, prepayment or other acquisition for value, direct or
indirect, of any Indebtedness subordinated to the Obligations, and (iv) any
payment of a claim for the rescission of the purchase or sale of, or for
material damages arising from the purchase or sale of, any Indebtedness (other
than the Obligations) or any Equity Interests of the Borrower, or any of its
Subsidiaries, or of a claim for reimbursement, indemnification or contribution
arising out of or related to any such claim for damages or rescission.
"REVOLVING CREDIT AVAILABILITY" means, at any particular time, the amount
by which (x) the Aggregate Revolving Loan Commitment at such time exceeds (y)
the Dollar Amount of the Revolving Credit Obligations outstanding at such time.
"REVOLVING CREDIT OBLIGATIONS" means, at any particular time, the sum of
(i) the outstanding principal amount of the Revolving Loans at such time, plus
(ii) the outstanding principal amount of the Swing Line Loans at such time, plus
(iii) the outstanding L/C Obligations at such time, plus (iv) the Dollar Amount
of the outstanding principal amount of the Alternate Currency Loans at such
time, plus (v) the aggregate outstanding principal Dollar Amount of Indebtedness
of the Borrower and its Subsidiaries under the principal revolving credit
facility of the Borrower's Canadian Subsidiaries denominated in Canadian Dollars
and guaranteed by the Borrower (provided, that the commitment of lenders in
respect of such facility shall not at any time exceed $15,000,000 Canadian
Dollars).
"REVOLVING LOAN" is defined in Section 2.2 hereof.
"REVOLVING LOAN COMMITMENT" means, for each Lender, the obligation of such
Lender to make Revolving Loans and to purchase participations in Letters of
Credit and to participate in Swing Line Loans and Alternate Currency Loans not
exceeding the amount set forth on Exhibit A to this Agreement opposite its name
thereon under the heading "Revolving Loan Commitment" or the signature page of
the assignment and Acceptance by which it became a Lender, as such amount may be
modified from time to time pursuant to the terms of this Agreement or to give
effect to any applicable assignment and Acceptance.
"REVOLVING LOAN PRO RATA SHARE" means, with respect to any Lender, the
percentage obtained by dividing (A) the then aggregate amount of such Lender's
Revolving Loan Commitment (as adjusted from time to time in accordance with the
provisions of this Agreement) by (B) the Aggregate Revolving Loan Commitment at
such time; provided, however, if all of the Commitments are terminated pursuant
to the terms of this Agreement, then
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"Revolving Loan Pro Rata Share" means the percentage obtained by dividing (x)
the sum of (A) such Lender's Revolving Loans, plus (B) such Lender's share of
the obligations to purchase participations in Swing Line Loans, Alternate
Currency Loans and Letters of Credit, by (y) the sum of (A) the aggregate
outstanding amount of all Revolving Loans, plus (B) the aggregate outstanding
amount of all Swing Line Loans, all Alternate Current Loans and all Letters of
Credit.
"REVOLVING LOAN TERMINATION DATE" means January 23, 2004.
"RISK-BASED CAPITAL GUIDELINES" is defined in Section 4.2 hereof.
"SECURED OBLIGATIONS" means, collectively, (i) the Obligations and (ii) all
Hedging Obligations owing under Hedging Agreements to any Lender or any
Affiliate of any Lender.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time to
time.
"SINGLE EMPLOYER PLAN" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"SOLVENT" means, when used with respect to any Person, that at the time of
determination:
(i) the fair value of its assets (both at fair valuation and at
present fair saleable value) is equal to or in excess of the total amount of its
liabilities, including, without limitation, contingent liabilities; and
(ii) it is then able and expects to be able to pay its debts as they
mature; and
(iii) it has capital sufficient to carry on its business as conducted
and as proposed to be conducted.
With respect to contingent liabilities (such as litigation, guarantees and
pension plan liabilities), such liabilities shall be computed at the amount
which, in light of all the facts and circumstances existing at the time,
represent the amount which can be reasonably be expected to become an actual or
matured liability.
"STOCK ACQUISITION" means the purchase by the Borrower and its Subsidiaries
of all of the Capital Stock of the Target, pursuant to a cash tender offer by
means of an offer to purchase (as amended from time to time, the "TENDER
OFFER").
"SUBSIDIARY" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, joint venture or similar
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business organization more than fifty percent (50%) of the ownership interests
having ordinary voting power of which shall at the time be so owned or
controlled. Unless otherwise expressly provided, all references herein to a
"Subsidiary" means a Subsidiary of the Borrower.
"SWING LINE BANK" means First Chicago or any other Lender as a successor
Swing Line Bank pursuant to the terms hereof.
"SWING LINE COMMITMENT" means the obligation of the Swing Line Bank to make
Swing Line Loans up to a maximum principal amount of $15,000,000 at any one time
outstanding.
"SWING LINE LOAN" means a Loan made available to the Borrower by the Swing
Line Bank pursuant to Section 2.3 hereof.
"SYNDICATION PERIOD" shall have the meaning set forth in the definition of
"Interest Period" above.
"TARGET" means an entity previously identified to the Agent by the Borrower
and, a company organized under the laws of England and Wales.
"TAXES" is defined in Section 2.15(E)(i) hereof.
"TERMINATION DATE" means the earlier of (a) the Revolving Loan Termination
Date, and (b) the date of termination in whole of the Aggregate Revolving Loan
Commitment pursuant to Section 2.6 hereof or the Commitments pursuant to Section
9.1 hereof.
"TERMINATION EVENT" means (i) a Reportable Event with respect to any
Benefit Plan; (ii) the withdrawal of the Borrower or any member of the
Controlled Group from a Benefit Plan during a plan year in which the Borrower or
such Controlled Group member was a "substantial employer" as defined in Section
4001(a)(2) of ERISA or the cessation of operations which results in the
termination of employment of twenty percent (20%) of Benefit Plan participants
who are employees of the Borrower or any member of the Controlled Group; (iii)
the imposition of an obligation on the Borrower or any member of the Controlled
Group under Section 4041 of ERISA to provide affected parties written notice of
intent to terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to
terminate a Benefit Plan; (v) any event or condition which might constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Benefit Plan; or (vi) the partial or complete
withdrawal of the Borrower or any member of the Controlled Group from a
Multiemployer Plan.
"TERM LOAN PRO RATA SHARE" shall mean, at any particular time and with
respect to any Lender, a fraction (expressed as a percentage), the numerator of
which shall be the then aggregate amount of such Lender's Term Loan Commitment
plus the outstanding principal balance of such Lender's Term Loans and the
denominator of which shall be the then aggregate
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amount of all Term Loan Commitments and the outstanding principal balance of the
Term Loans.
"TERM LOAN" is defined in Section 2.1(A)(i) hereof.
"TERM LOAN COMMITMENT" means, for each Lender, the obligation of such
Lender to make its Term Loan pursuant to the terms and conditions of this
Agreement, and which shall not exceed the principal amount set forth on Exhibit
A to this Agreement opposite its name thereon under the heading "Term Loan
Commitment", as such amount may be modified from time to time pursuant to the
terms hereof; provided, that if the Indebtedness of Filtertek USA, Inc. (now
known as Schawk USA, Inc.) and the Borrower to The Prudential Insurance Company
and certain other insurance companies (collectively, "Prudential") under that
certain Note Agreement (the "Note Agreement"), dated as of August 18, 1995,
remains outstanding as of the Closing Date, and Prudential consents to the
acquisition of the Target pursuant to the Tender Offer and amends the Note
Agreement in form and substance satisfactory to the Agent on or prior to the
Closing Date, the Term Loan Commitment of each Lender shall be cancelled and the
Term Loan will be unavailable.
"TERM LOAN LENDER" means any Lender with a Term Loan Commitment.
"TERM LOAN TERMINATION DATE" means January 23, 2004.
"TRANSACTION DOCUMENTS" means the Loan Documents and the documents executed
and delivered by the Borrower or any of its Subsidiaries in connection with the
Stock Acquisition.
"TRANSFEREE" is defined in Section 13.5 hereof.
"TYPE" means, with respect to any Loan, its nature as a Floating Rate Loan
or a Eurocurrency Rate Loan.
"UNFUNDED LIABILITIES" means (i) in the case of Single Employer Plans, the
amount (if any) by which the present value of all vested nonforfeitable benefits
under all Single Employer Plans exceeds the fair market value of all such Plan
assets allocable to such benefits, all determined as of the then most recent
valuation date for such Plans, and (ii) in the case of Multiemployer Plans, the
withdrawal liability that would be incurred by the Controlled Group if all
members of the Controlled Group completely withdrew from all Multiemployer
Plans.
"UNMATURED DEFAULT" means an event which, but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"WEIGHTED AVERAGE LIFE TO MATURITY" means when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by
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(b) the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (ii) the then outstanding
principal amount of such Indebtedness.
"WORKING CAPITAL" means, as at any date of determination and in conformity
with Agreement Accounting Principles, the excess, if any, of (i) the Borrower's
consolidated current assets, except cash and Cash Equivalents, over (ii) the
Borrower's consolidated current liabilities, except current maturities of
long-term Indebtedness and Revolving Credit Obligations as of such date and all
accrued interest as of such date.
"YEAR 2000 ISSUES" means, with respect to any Person, anticipated costs,
problems and uncertainties associated with the inability of certain computer
applications and imbedded systems to effectively handle data, including dates,
prior to, on and after January 1, 2000, as it affects the business, operations,
and financial condition of such Person, and such Person's customers, suppliers
and vendors.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms. Any accounting terms used in this
Agreement which are not specifically defined herein shall have the meanings
customarily given them in accordance with generally accepted accounting
principles in existence as of the date hereof.
1.2 References. Any references to Subsidiaries of the Borrower set forth
herein shall (i) with respect to representations and warranties which deal with
historical matters be deemed to include the Borrower and its Subsidiaries,
together with the business acquired pursuant to the Stock Acquisition, shall not
in any way be construed as consent by the Agent or any Lender to the
establishment, maintenance or acquisition of any Subsidiary, except as may
otherwise be permitted hereunder.
1.3 Supplemental Disclosure. At any time at the request of the Agent and at
such additional times as the Borrower determines, the Borrower shall supplement
each schedule or representation herein or in the other Loan Documents with
respect to any matter hereafter arising which, if existing or occurring at the
date of this Agreement, would have been required to be set forth or described in
such schedule or as an exception to such representation or which is necessary to
correct any information in such schedule or representation which has been
rendered inaccurate thereby. Unless any such supplement to such schedule or
representation discloses the existence or occurrence of events, facts or
circumstances which are not prohibited by the terms of this Agreement or any
other Loan Documents, such supplement to such schedule or representation shall
not be deemed an amendment thereof unless expressly consented to in writing by
Agent and the Required Lenders, and no such amendments, except as the same may
be consented to in a writing which expressly includes a waiver, shall be or be
deemed a waiver by the Agent or any Lender of any Default disclosed therein.
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1.4 Rounding and Other Consequential Changes. Without prejudice to any
method of conversion or rounding prescribed by any legislative measures of the
Council of the European Union, each reference in this Agreement to a fixed
amount or to fixed amounts in a National Currency Unit to be paid to or by the
Agent shall be replaced by a reference to such comparable and convenient fixed
amount or fixed amounts in the Euro as the Agent may from time to time specify
unless such National Currency Unit remains available and the Borrower and the
Agent agree to use such National Currency Unit instead of the Euro.
ARTICLE II:
THE TERM LOAN AND REVOLVING LOAN FACILITIES
-------------------------------------------
2.1 Term Loans. (A) Amount of Term Loans. Subject to the terms and
conditions set forth in this Agreement, each Term Loan Lender on the Closing
Date severally and not jointly agrees to make on the Closing Date, term loans,
in Dollars, to the Borrower in an aggregate amount equal to such Lender's Term
Loan Commitment (each individually, a "TERM LOAN" and, collectively, the "TERM
LOANS"). All Term Loans shall be made by the Lenders on the Closing Date
simultaneously and proportionately to their respective Term Loan Pro Rata
Shares, it being understood that no Lender shall be responsible for any failure
by any other Lender to perform its obligation to make any Term Loan hereunder
nor shall the Term Loan Commitment of any Lender be increased or decreased as a
result of any such failure.
(B) Borrowing/Conversion/Continuation Notice. The Borrower shall
deliver to the Agent a Borrowing/Conversion/Continuation Notice, signed by it,
on the Closing Date. Such Borrowing/Conversion/Continuation Notice shall specify
(i) the aggregate amount of the Term Loans being requested and (ii) instructions
for the disbursement of proceeds of such Term Loans. The Term Loans shall
initially be Floating Rate Loans and thereafter may be continued as Floating
Rate Loans or converted into Eurocurrency Rate Loans in the manner provided in
Section 2.10 and subject to the other conditions and limitations therein set
forth and set forth in this Article II. Any Borrowing/Conversion/Continuation
Notice given pursuant to this Section 2.1(B) shall be irrevocable.
(C) Making of Term Loans. Promptly after receipt of the Borrowing/-
Conversion/Continuation Notice under Section 2.1(B) in respect of the Term
Loans, the Agent shall notify each Lender by telex or telecopy, or other similar
form of transmission, of the proposed Advance. Each Lender shall deposit an
amount equal to its Term Loan Pro Rata Share of the Term Loans, with the Agent
at its office in Chicago, Illinois, in immediately available funds, on the
Closing Date, as specified in the Borrowing/Conversion/Continuation Notice.
Subject to the fulfillment of the conditions precedent set forth in Sections 5.1
and 5.2, as applicable, the Agent shall make the proceeds of such amounts
received by it available to the Borrower at the Agent's office in Chicago,
Illinois on such date and shall disburse such proceeds in accordance with the
Borrower's disbursement instructions set forth in such
Borrowing/Conversion/Continuation Notice. The failure of any Lender to deposit
the amount described above with the Agent on such date shall not relieve any
other Lender of its obligations hereunder to make its Term Loan on such date.
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(D) Repayment of the Term Loans. (i) The Term Loans shall be repaid in
five (5) consecutive annual installments, payable on September 30 of each fiscal
year of the Borrower, commencing on September 30, 2000 and continuing thereafter
until the Term Loan Termination Date, and the Term Loans shall be permanently
reduced by the amount of each installment on the date payment thereof is made
hereunder. The installments shall be in the aggregate amounts set forth below:
TERM LOAN
INSTALLMENT DATE INSTALLMENT AMOUNT
---------------- ------------------
September 30, 2000 $ 5,000,000
September 30, 2001 $ 5,000,000
September 30, 2002 $10,000,000
September 30, 2003 $10,000,000
Term Loan Termination Date $10,000,000
Notwithstanding the foregoing, the final installment shall be in the amount of
the then outstanding principal balance of the Term Loans. In addition, the then
outstanding principal balance of the Term Loans, if any, shall be due and
payable on the Term Loan Termination Date. No installment of any Term Loan shall
be reborrowed once repaid.
(E) In addition to the scheduled payments on the Term Loans, the
Borrower (a) may make the voluntary prepayments described in Section 2.5(A) for
credit against the scheduled payments on the Term Loans pursuant to Section
2.5(A) and (b) shall make the mandatory prepayments prescribed in Section 2.5(B)
for credit against the scheduled payments on the Term Loans pursuant to Section
2.5(B).
2.2 REVOLVING LOANS. (a) Upon the satisfaction of the conditions precedent
set forth in Sections 5.1 and 5.2, as applicable, from and including the Closing
Date and prior to the Termination Date, each Lender severally and not jointly
agrees, on the terms and conditions set forth in this Agreement, to make
revolving loans to the Borrower from time to time, in an Agreed Currency, in a
Dollar Amount not to exceed such Lender's Revolving Loan Pro Rata Share of
Revolving Credit Availability at such time (each individually, a "REVOLVING
LOAN" and, collectively, the "REVOLVING LOANS"); provided, however, at no time
shall the Dollar Amount of the Revolving Credit Obligations exceed the Aggregate
Revolving Loan Commitment; provided, further, however, that upon giving effect
to each Advance, the aggregate outstanding principal Dollar Amount of all
Advances and L/C Obligations in Agreed Currencies other than Dollars shall not
exceed the Maximum Eurocurrency Amount Revolving Loans at any time prior to the
Termination Date; provided, further, however, that upon giving effect to each
Advance, the aggregate outstanding principal Dollar Amount of all Advances and
L/C Obligations in (x) Pounds Sterling shall not exceed $15,000,000 or (y)
Australian Dollars shall not exceed $5,000,000. Subject to the terms of this
Agreement, the Borrower may borrow, repay and
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reborrow Revolving Loans at any time prior to the Termination Date. Subject to
the terms and conditions hereof, during the term of this Agreement, the
Alternate Currency Bank hereby agrees to make Alternate Currency Loans to the
Alternate Currency Borrowers pursuant to the applicable Alternate Currency
Addenda as the applicable Alternate Currency Borrower may from time to time
request pursuant to Section 2.21 and the Applicable Currency Addenda. The
Revolving Loans made on the Closing Date or on or before the third (3rd)
Business Day thereafter shall initially be Floating Rate Loans and thereafter
may be continued as Floating Rate Loans or converted into Eurocurrency Rate
Loans in the manner provided in Section 2.10 and subject to the other conditions
and limitations therein set forth and set forth in this Article II and set forth
in the definition of Interest Period. Revolving Loans made after the third (3rd)
Business Day after the Closing Date shall be, at the option of the Borrower,
selected in accordance with Section 2.10, either Floating Rate Loans or
Eurocurrency Rate Loans. On the Termination Date, the Borrower shall repay in
full the outstanding principal balance of the Revolving Loans. Each Advance
under this Section 2.2 shall consist of Revolving Loans made by each Lender
ratably in proportion to such Lender's respective Revolving Loan Pro Rata Share.
(b) Borrowing/Conversion/Continuation Notice. The Borrower shall
deliver to the Agent a Borrowing/Conversion/Continuation Notice, signed by it,
in accordance with the terms of Section 2.8. The Agent shall promptly notify
each Lender with a Revolving Loan Commitment greater than zero of such request.
(c) Making of Revolving Loans. Promptly after receipt of the
Borrowing/Conversion/Continuation Notice under Section 2.8 in respect of
Revolving Loans, the Agent shall notify each Lender with a Revolving Loan
Commitment greater than zero by telex or telecopy, or other similar form of
transmission, of the requested Revolving Loan. Each Lender with a Revolving Loan
Commitment greater than zero shall make available its Revolving Loan in
accordance with the terms of Section 2.7. The Agent will promptly make the funds
so received from the Lenders available to the Borrower at the Agent's office in
Chicago, Illinois on the applicable Borrowing Date and shall disburse such
proceeds in accordance with the Borrower's disbursement instructions set forth
in such Borrowing/Conversion/Continuation Notice. The failure of any Lender to
deposit the amount described above with the Agent on the applicable Borrowing
Date shall not relieve any other Lender of its obligations hereunder to make its
Revolving Loan on such Borrowing Date.
2.3 Swing Line Loans. (A) Amount of Swing Line Loans. Upon the satisfaction
of the conditions precedent set forth in Section 5.1 and 5.2, as applicable,
from and including the Closing Date and prior to the Termination Date, the Swing
Line Bank agrees, on the terms and conditions set forth in this Agreement, to
make swing line loans to the Borrower from time to time, in Dollars, in an
amount not to exceed the Swing Line Commitment (each, individually, a "SWING
LINE LOAN" and collectively, the "SWING LINE LOANS"); provided, however, at no
time shall the Dollar Amount of the Revolving Credit Obligations exceed the
Aggregate Revolving Loan Commitment; and provided, further, that at no time
shall the sum of (a) the Swing Line Lender's Revolving Loan Pro Rata Share of
the Swing Line Loans, plus (b) the outstanding Dollar Amount of Revolving Loans
made by the Swing Line Bank pursuant to Section 2.2,
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exceed the Swing Line Bank's Revolving Loan Commitment at such time. Subject to
the terms of this Agreement, the Borrower may borrow, repay and reborrow Swing
Line Loans at any time prior to the Termination Date.
(B) Borrowing/Conversion/Continuation Notice. The Borrower shall
deliver to the Agent and the Swing Line Bank a Borrowing/Conversion/Continuation
Notice, signed by it, not later than 2:00 p.m. (Chicago time) on the Borrowing
Date of each Swing Line Loan, specifying (i) the applicable Borrowing Date
(which date shall be a Business Day and which may be the same date as the date
the Borrowing/Conversion/Continuation Notice is given), and (ii) the aggregate
amount of the requested Swing Line Loan which shall be an amount not less than
$200,000. The Swing Line Loans shall at all times be Floating Rate Loans.
(C) Making of Swing Line Loans. Promptly after receipt of the
Borrowing/Conversion/Continuation Notice under Section 2.3(B) in respect of
Swing Line Loans, the Agent shall notify each Lender by telex or telecopy, or
other similar form of transmission, of the requested Swing Line Loan. Not later
than 3:00 p.m. (Chicago time) on the applicable Borrowing Date, the Swing Line
Bank shall make available its Swing Line Loan, in funds immediately available in
Chicago to the Agent at its address specified pursuant to Article XIV. The Agent
will promptly make the funds so received from the Swing Line Bank available to
the Borrower on the Borrowing Date at the Agent's aforesaid address.
(D) Repayment of Swing Line Loans. Each Swing Line Loan shall be paid
in full by the Borrower on or before the fifth (5th) Business Day after the
Borrowing Date for such Swing Line Loan. The Borrower may at any time pay,
without penalty or premium, all outstanding Swing Line Loans or, in a minimum
amount of $200,000 and increments of $100,000 in excess thereof, any portion of
the outstanding Swing Line Loans, upon notice to the Agent and the Swing Line
Bank. In addition, the Agent (i) may at any time in its sole discretion with
respect to any outstanding Swing Line Loan, or (ii) shall on the fifth (5th)
Business Day after the Borrowing Date of any Swing Line Loan, require each
Lender (including the Swing Line Bank) to make a Revolving Loan in the amount of
such Lender's Revolving Loan Pro Rata Share of such Swing Line Loan, for the
purpose of repaying such Swing Line Loan. Not later than 2:00 p.m. (Chicago
time) on the date of any notice received pursuant to this Section 2.3(D), each
Lender shall make available its required Revolving Loan or Revolving Loans, in
funds immediately available in Chicago to the Agent at its address specified
pursuant to Article XIV. Revolving Loans made pursuant to this Section 2.3(D)
shall initially be Floating Rate Loans and thereafter may be continued as
Floating Rate Loans or converted into Eurocurrency Rate Loans in the manner
provided in Section 2.10 and subject to the other conditions and limitations
therein set forth and set forth in this Article II. Unless a Lender shall have
notified the Swing Line Bank, prior to its making any Swing Line Loan, that any
applicable condition precedent set forth in Sections 5.1 and 5.2, as applicable,
had not then been satisfied, such Lender's obligation to make Revolving Loans
pursuant to this Section 2.3(D) to repay Swing Line Loans shall be
unconditional, continuing, irrevocable and absolute and shall not be affected by
any circumstances, including, without limitation, (a) any set-off, counterclaim,
recoupment, defense or other right which such Lender may have against the Agent,
the Swing Line Bank or any other
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Person, (b) the occurrence or continuance of a Default or Unmatured Default, (c)
any adverse change in the condition (financial or otherwise) of the Borrower, or
(d) any other circumstances, happening or event whatsoever. In the event that
any Lender fails to make payment to the Agent of any amount due under this
Section 2.3(D), the Agent shall be entitled to receive, retain and apply against
such obligation the principal and interest otherwise payable to such Lender
hereunder until the Agent receives such payment from such Lender or such
obligation is otherwise fully satisfied. In addition to the foregoing, if for
any reason any Lender fails to make payment to the Agent of any amount due under
this Section 2.3(D), such Lender shall be deemed, at the option of the Agent, to
have unconditionally and irrevocably purchased from the Swing Line Bank, without
recourse or warranty, an undivided interest and participation in the applicable
Swing Line Loan in the amount of such Revolving Loan, and such interest and
participation may be recovered from such Lender together with interest thereon
at the Federal Funds Effective Rate for each day during the period commencing on
the date of demand and ending on the date such amount is received. On the
Termination Date, the Borrower shall repay in full the outstanding principal
balance of the Swing Line Loans.
2.4 Rate Options for all Advances; Maximum Interest Periods. The Swing Line
Loans shall be Floating Rate Advances at all times. The Revolving Loans and Term
Loans may be Floating Rate Advances or Eurocurrency Rate Advances, or a
combination thereof, selected by the Borrower in accordance with Section 2.10;
provided, however, notwithstanding anything herein to the contrary, the Borrower
may not select Interest Periods for Eurocurrency Rate Advances made during the
Syndication Period which exceed seven (7) days and the Interest Periods with
respect to all such Eurocurrency Rate Advances made during the Syndication
Period shall be required to expire on the same date. The Borrower may select, in
accordance with Section 2.10, Rate Options and Interest Periods applicable to
portions of the Revolving Loans and the Term Loans; provided that there shall be
no more than nine (9) Interest Periods in effect with respect to all of the
Loans at any time. Each Alternate Currency Loan shall bear interest on the
outstanding principal amount thereof, for the Interest Period applicable
thereto, at a rate per annum set forth in the applicable Alternate Currency
Addenda.
2.5 Optional Payments; Mandatory Prepayments.
(A) Optional Payments. The Borrower may from time to time and at any
time upon at least one (1) Business Day's prior written notice repay or prepay,
without penalty or premium all or any part of outstanding Floating Rate Advances
in an aggregate minimum amount of $1,000,000 and in integral multiples of
$1,000,000 in excess thereof. Eurocurrency Rate Advances may be voluntarily
repaid or prepaid prior to the last day of the applicable Interest Period,
subject to the indemnification provisions contained in Section 4.4, provided,
that the Borrower may not so prepay Eurocurrency Rate Advances unless it shall
have provided at least five (5) Business Days' prior written notice to the Agent
of such prepayment. Unless the aggregate outstanding principal balance of the
Term Loans is to be prepaid in full, voluntary prepayments of the Term Loans
shall be in an aggregate minimum amount of $1,000,000 and integral multiples of
$1,000,000 in excess of that amount, and shall be applied to each of the then
remaining installments payable thereunder, in the inverse order of maturity;
provided, that
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optional prepayments of Eurocurrency Rate Advances shall be subject to the
indemnification provisions of Section 4.4. Each Alternate Currency Borrower may,
upon notice to the Alternate Currency Bank specifying that it is paying its
Alternate Currency Loans, prepay its Alternate Currency Loans in whole at any
time, or from time to time in part in amounts aggregating $1,000,000 or any
larger multiple of $500,000 (or as otherwise specified in the applicable
Alternate Currency Addendum) by paying the principal amount to be paid together
with all accrued and unpaid interest thereon to and including the date of
payment provided any such payment occurs on the last day of any Interest Period
related to such Alternate Currency Loan.
(B) Mandatory Prepayments.
(i) Mandatory Prepayments of Term Loans.
(a) Upon the consummation of any Asset Sale by the
Borrower or any Subsidiary of the Borrower or the receipt by the
Borrower or any Subsidiary of proceeds from any condemnation
proceeding or from insurance in connection with any loss, except
to the extent that the Net Cash Proceeds of such Asset Sale or
other such proceeds, when combined with the Net Cash Proceeds of
all such Asset Sales or other such proceeds during the
immediately preceding twelve-month period, do not exceed
$1,000,000 or the Approximate Equivalent amount of any Agreed
Currency other than Dollars, and except as provided in the second
sentence of this Section 2.5(B)(i)(a), within three (3) Business
Days after the Borrower's or any of its Subsidiaries' (i) receipt
of any Net Cash Proceeds from any such Asset Sale or other such
proceeds, or (ii) conversion to cash or Cash Equivalents of
non-cash proceeds (whether principal or interest and including
securities, release of escrow arrangements or lease payments)
received from any Asset Sale, the Borrower shall make a mandatory
prepayment of the Obligations in an amount equal to one hundred
percent (100%) of such Net Cash Proceeds or other such proceeds
or such proceeds converted from non-cash to cash or Cash
Equivalents. Net Cash Proceeds of Asset Sales with respect to
which the Borrower shall have given the Agent written notice
within thirty (30) Business Days after such Asset Sale of its
intention to replace the assets within six (6) months following
such Asset Sale shall not be subject to the provisions of the
first sentence of this Section 2.5(B)(i)(a) unless and to the
extent that such applicable period shall have expired without
such replacement having been made.
(b) (i) Except as provided in clause (b)(ii) below,
upon the consummation of any Financing (other than those
Financings permitted pursuant to Sections 7.3(A)(i) through
(xii)) by the Borrower or any Subsidiary of the Borrower, within
three (3) Business Days after the Borrower's or any of its
Subsidiaries' receipt of any Net Cash Proceeds from such
Financing, the Borrower shall make a mandatory prepayment of the
Obligations in an amount equal to one hundred percent (100%) of
such Net Cash Proceeds.
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<PAGE>
(ii) Notwithstanding the foregoing, Net Cash
Proceeds subject to clause (i) above shall not include Net Cash
Proceeds received in connection with the issuance (i) of any
Capital Stock of the Borrower, or any Subsidiary of Borrower,
other than Disqualified Stock, to any employee, executive,
director or officer or (ii) of any Capital Stock of the Borrower
or any Subsidiary of the Borrower, or any Permitted Refinancing
Indebtedness (including of the Permitted Subordinated
Indebtedness) of the Borrower, or any Subsidiary of the Borrower
to the extent that the proceeds and uses of any such offering of
Equity Interests or Indebtedness shall be used to refinance the
Permitted Subordinated Indebtedness.
(c) Nothing in this Section 2.5(B)(i) shall be
construed to constitute the Lenders' consent to any transaction
referred to in clause (a) or (b) above which is not expressly
permitted by the terms of this Agreement.
(d) Each mandatory prepayment required by clauses (a),
and (b) of this Section 2.5(B) shall be referred to herein as a
"DESIGNATED PREPAYMENT." Designated Prepayments shall be
allocated and applied to the Obligations as follows:
(I) the amount of each Designated Prepayment
shall be applied ratably to the Term Loans to each of the
then remaining installments payable under such Term Loans in
the inverse order of maturity; and
(II) following the payment in full of the
Term Loans, the amount of each Designated Prepayment shall
be applied to repay Revolving Loans (but shall reduce
Revolving Loan Commitments only at the option of the
Borrower) and following the payment in full of the Revolving
Loans, the amount of each Designated Prepayment shall be
applied first to interest on the Reimbursement Obligations,
then to principal on the Reimbursement Obligations, then to
fees on account of Letters of Credit and then, to the extent
any L/C Obligations are contingent, deposited with the Agent
as cash collateral in respect of such L/C Obligations.
(e) On the date any Designated Prepayment is received
by the Agent, such prepayment shall be applied first to Floating
Rate Loans and to any Eurocurrency Rate Loans maturing on such
date and then to subsequently maturing Eurocurrency Rate Loans in
order of maturity.
(ii) Mandatory Prepayments of Revolving Loans. (a) In addition to
repayments under Section 2.5(B)(i)(d)(II), if at any time and for any
reason (other than
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<PAGE>
fluctuations in currency exchange rates) the Dollar Amount of the Revolving
Credit Obligations are greater than the Aggregate Revolving Loan
Commitment, the Borrower shall immediately make a mandatory prepayment of
the Obligations in an amount equal to such excess. In addition, if the
Dollar Amount of the L/C Obligations (calculated as of the last Business
Day of each fiscal quarter, or, at the Agent's option, as of the last
Business Day of each calendar month) outstanding at any time is greater
than the Aggregate Revolving Loan Commitment at such time minus the sum of
the outstanding principal Dollar Amount of the Revolving Loans at such time
and the outstanding principal amount of the Swing Line Loans at such time
and (B) $15,750,000 (or the Equivalent Amount in Dollars), the Borrower
shall either repay Revolving Loans or deposit cash collateral in a cash
collateral account established with the Agent, in either case, in an amount
in Dollars equal to such excess.
(b) If on the last Business Day of any month:
(x) the Dollar Amount of the Revolving Credit Obligations
exceeds one hundred five percent (105%) of the
Aggregate Revolving Loan Commitment, the Borrower for
the ratable benefit of the Lenders shall immediately
prepay Loans (to be applied to such Loans as the
Borrower shall direct at the time of such payment) in
an aggregate amount such that after giving effect
thereto the Dollar Amount of the Aggregate Revolving
Loan Commitment is less than or equal to the Revolving
Credit Availability; or
(y) the Dollar Amount of all outstanding Alternate Currency
Loans under the Alternate Currency Addenda exceeds one
hundred five percent (105%) of the aggregate Alternate
Currency Commitments with respect thereto, the Borrower
shall on such date prepay Alternate Currency Loans in
an aggregate amount such that after giving effect
thereto the Dollar Amount of all such Alternate
Currency Loans is less than or equal to the aggregate
Alternate Currency Commitments with respect thereto; or
(z) the Dollar Amount of the aggregate outstanding
principal amount of Alternate Currency Loans exceeds
the aggregate Alternate Currency Commitments with
respect thereto, the applicable Borrowers shall on such
date prepay Alternate
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<PAGE>
Currency Loans in an aggregate amount such that after
giving effect thereto the Dollar amount of all
Alternate Currency Loans is less than or equal to the
aggregate Alternate Currency Commitments with respect
thereto.
(iii) Subject to the preceding provisions of this Section 2.5(B),
all of the mandatory prepayments made under this Section 2.5(B) shall be
applied first to Floating Rate Loans and to any Eurocurrency Rate Loans
maturing on such date and then to subsequently maturing Eurocurrency Rate
Loans in order of maturity.
2.6 Reduction of Commitments. The Borrower may permanently reduce the
Aggregate Revolving Loan Commitment in whole, or in part ratably among the
Lenders, in an aggregate minimum amount of $5,000,000 with respect to each such
Commitment and integral multiples of $1,000,000 in excess of that amount with
respect to each such Commitment (unless the Aggregate Revolving Loan Commitment
is reduced in whole), upon at least three (3) Business Day's prior written
notice to the Agent, which notice shall specify the amount of any such
reduction; provided, however, that the amount of the Aggregate Revolving Loan
Commitment may not be reduced below the aggregate principal Dollar Amount of the
outstanding Revolving Credit Obligations. All accrued commitment fees shall be
payable on the effective date of any termination of the obligations of the
Lenders to make Loans hereunder. Each Alternate Currency Borrower may, upon
three (3) Business Days prior written notice to the Alternate Currency Bank,
terminate entirely at any time or reduce from time to time by an aggregate
amount of $1,000,000 or any larger multiple of $100,000, (or as set forth on the
applicable Alternate Currency Addendum) the unused portions of the applicable
Alternate Currency Commitment as specified by the applicable Alternate Currency
Borrower in such notice to the Alternate Currency Bank; provided, however, that
at no time shall the Alternate Currency Commitments be reduced to a figure less
than the total of the outstanding principal amount of all Alternate Currency
Loans.
2.7 Method of Borrowing. Not later than 2:00 p.m. (Chicago time) on each
Borrowing Date, each Lender shall make available its Revolving Loan or Term
Loan, in immediately available funds in the Agreed Currency to the Agent at its
address specified pursuant to Article XIV, unless the Agent has notified the
Lenders that such Loan is to be made available to the Borrower at the Agent's
Eurocurrency Payment office, in which case each Lender shall make available its
Loan or Loans, in funds immediately available to the Agent at its Eurocurrency
Payment Office, not later than 1:00 p.m. (local time in the city of the Agent's
Eurocurrency Payment Office) in the Agreed Currency designated by the Agent. The
Agent will promptly make the funds so received from the Lenders available to the
Borrower at the Agent's aforesaid address.
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<PAGE>
2.8 Method of Selecting Types and Interest Periods for Advances. The
Borrower and the Alternate Currency Borrowers, as applicable, shall select the
Type of Advance and, in the case of each Alternate Currency Loan and
Eurocurrency Rate Advance, the Interest Period, Agreed Currency and Alternate
Currency applicable to each Advance from time to time. The Borrower shall give
the Agent irrevocable notice in substantially the form of Exhibit B hereto (a
"BORROWING/CONVERSION/CONTINUATION NOTICE") not later than 10:00 a.m. (Chicago
time) (a) on or before the Borrowing Date of each Floating Rate Advance, and (b)
three (3) Business Days before the Borrowing Date for each Eurocurrency Rate
Advance to be made in Dollars, and (c) four (4) Business Days before the
Borrowing Date for each Eurocurrency Rate Advance to be made in any Agreed
Currency other than Dollars and (d) five (5) Business Days before the Borrowing
Date for each Alternate Currency Loan (or such other period as may be agreed to
by the Agent), and the applicable Alternate Currency Borrower shall give the
Alternate Currency Bank irrevocable notice by 10:00 a.m. (local time) two (2)
Business Days prior to the Borrowing Date for such Alternate Currency Loan (or
such other period as may be specified in the applicable Alternate Currency
Addendum), specifying: (i) the Borrowing Date (which shall be a Business Day) of
such Advance; (ii) the aggregate amount of such Advance; (iii) the Type of
Advance selected; and (iv) in the case of each Eurocurrency Rate Advance and
Alternate Currency Loan, the Interest Period and Agreed Currency or Alternate
Currency applicable thereto. The Borrower shall select Interest Periods so that,
to the best of the Borrower's knowledge, it will not be necessary to prepay all
or any portion of any Eurocurrency Rate Advance prior to the last day of the
applicable Interest Period in order to make mandatory prepayments as required
pursuant to the terms hereof. Each Floating Rate Advance and all Obligations
other than Loans shall bear interest from and including the date of the making
of such Advance, in the case of Loans, and the date such Obligation is due and
owing in the case of such other Obligations, to (but not including) the date of
repayment thereof at the Floating Rate, changing when and as such Floating Rate
changes. Changes in the rate of interest on that portion of any Advance
maintained as a Floating Rate Loan will take effect simultaneously with each
change in the Alternate Base Rate. Each Eurocurrency Rate Advance shall bear
interest from and including the first day of the Interest Period applicable
thereto to (but not including) the last day of such Interest Period at the
interest rate determined as applicable to such Eurocurrency Rate Advance.
2.9 Minimum Amount of Each Advance. Each Advance (other than an Advance to
repay Swing Line Loans or a Reimbursement Obligation) shall be in the minimum
amount of $5,000,000 (or the approximate Equivalent Amount of any Agreed
Currency other than Dollars or any Alternate Currency) and in multiples of
$1,000,000 (or the Approximate Equivalent amount of any Agreed Currency other
than Dollars or any Alternate Currency) if in excess thereof (or such other
amounts as may be specified in the applicable Alternate Currency Addenda);
provided, however, that any Floating Rate Advance may be in the amount of the
unused Aggregate Revolving Loan Commitment.
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<PAGE>
2.10 Method of Selecting Types and Interest Periods for Conversion and
Continuation of Advances.
(A) Right to Convert. The Borrower may elect from time to time,
subject to the provisions of Section 2.4 and this Section 2.10, to convert all
or any part of a Loan of any Type into any other Type or Types of Loans;
provided that any conversion of any Eurocurrency Rate Advance shall be made on,
and only on, the last day of the Interest Period applicable thereto.
(B) Automatic Conversion and Continuation. Floating Rate Loans shall
continue as Floating Rate Loans unless and until such Floating Rate Loans are
converted into Eurocurrency Rate Loans. Eurocurrency Rate Loans shall continue
as Eurocurrency Rate Loans until the end of the then applicable Interest Period
therefor, at which time such Eurocurrency Rate Loans shall be automatically
converted into Floating Rate Loans unless the Borrower shall have given the
Agent notice in accordance with Section 2.10(D) requesting that, at the end of
such Interest Period, such Eurocurrency Rate Loans continue as a Eurocurrency
Rate Loan. Unless a Borrowing/Conversion/ Continuation Notice shall have timely
been given in accordance with the terms of this Section 2.10, Eurocurrency Rate
Advances in an Agreed Currency other than Dollars shall automatically continue
as Eurocurrency Rate Advances in the same Agreed Currency with an Interest
Period of one (1)month.
(C) No Conversion Post-Default or Post-Unmatured Default.
Notwithstanding anything to the contrary contained in Section 2.10(A) or Section
2.10(B), no Loan may be converted into or continued as a Eurocurrency Rate Loan
(except with the consent of the Required Lenders) when any Default or Unmatured
Default has occurred and is continuing.
(D) Borrowing/Conversion/Continuation Notice. The Borrower shall give the
Agent irrevocable notice (a "BORROWING/CONVERSION/CONTINUATION NOTICE") of each
conversion of a Floating Rate Loan into a Eurocurrency Rate Loan or continuation
of a Eurocurrency Rate Loan not later than 10:00 a.m. (Chicago time) (x) three
(3) Business Days prior to the date of the requested conversion or continuation,
with respect to any Loan to be converted or continued as a Eurocurrency Rate
Loan in Dollars, (y) four (4) Business Days prior to the date of the requested
conversion or continuation with respect to any Loan to be converted or continued
as a Eurocurrency Rate Loan in an Agreed Currency other than Dollars, and (z)
five (5) Business Days before the date of the requested conversion or
continuation Borrowing Date with respect to the conversion or continuation of
any Alternate Currency Loan (or such other period as may be agreed to by the
Agent), and the applicable Alternate Currency Borrower shall give the Alternate
Currency Bank irrevocable notice by 10:00 a.m. (local time) two (2) Business
Days prior to the conversion or continuation of such Alternate Currency Loan (or
such other period as may be specified in the applicable Alternate Currency
Addendum), specifying: (1) the requested date (which shall be a Business Day) of
such conversion or continuation; (2) the amount and Type of the Loan to be
converted or continued; and (3) the amount of Eurocurrency Rate Loan(s) or
Alternate Currency Loans, as applicable, into which such Loan is to be converted
or
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<PAGE>
continued, the Agreed Currency or Alternate Currency, as applicable, and the
duration of the Interest Period applicable thereto.
(E) Notwithstanding anything herein to the contrary, (x) Eurocurrency
Rate Advances in an Agreed Currency may be converted and/or continued as
Eurocurrency Rate Advances only in the same Agreed Currency, and (y) Alternate
Currency Loans in an Alternate Currency may be converted and/or continued as
Alternate Currency Loans only in the same Alternate Currency.
2.11 Default Rate. After the occurrence and during the continuance of a
Default, at the direction of the Required Lenders, the interest rate(s)
applicable to the Obligations and to the fees payable under Section 3.8 with
respect to Letters of Credit shall be equal to the then highest interest rate(s)
hereunder plus two percent (2.0%) per annum. After the occurrence of a Default,
the principal balance of, and, to the extent permitted by law, any overdue
interest on any Alternate Currency Loan shall bear interest, payable upon
demand, for each day until paid at the rate per annum equal to two percent
(2.00%) plus the interest rate applicable to such Alternate Currency Loan
immediately prior to the Default.
2.12 Method of Payment. All payments of principal, interest, fees,
commissions and L/C Obligations hereunder shall be made, without setoff,
deduction or counterclaim (unless indicated otherwise in Section 2.15(E)), in
immediately available funds to the Agent (i) at the Agent's address specified
pursuant to Article XIV with respect to Advances or other Obligations
denominated in Dollars and (ii) at the Agent's Eurocurrency Payment Office with
respect to any Advance or other Obligations denominated in an Agreed Currency
other than Dollars, or at any other Lending Installation of the Agent specified
in writing by the Agent to the Borrower, by 2:00 p.m. (Chicago time) on the date
when due and shall be made ratably among the Lenders (unless such amount is not
to be shared ratably in accordance with the terms hereof). Each Advance shall be
repaid or prepaid in the Agreed Currency in which it was made in the amount
borrowed and interest payable thereon shall also be paid in such currency. Each
payment delivered to the Agent for the account of any Lender shall be delivered
promptly by the Agent to such Lender in the same type of funds which the Agent
received at its address specified pursuant to Article XIV or at any Lending
Installation specified in a notice received by the Agent from such Lender. The
Borrower authorizes the Agent to charge the account of the Borrower maintained
with First Chicago for each payment of principal, interest, fees, commissions
and L/C Obligations as it becomes due hereunder. Each reference to the Agent in
this Section 2.12 shall also be deemed to refer, and shall apply equally, to
each Issuing Bank, in the case of payments required to be made by the Borrower
to any Issuing Bank pursuant to Article III.
All payments to be made by the Borrowers hereunder in respect of any
Alternate Currency Loans shall be made in the currencies in which such Loans are
denominated and in funds immediately available, at the office or branch from
which the Loan was made pursuant to Section 2.21 and the applicable Alternate
Currency Addenda not later than 3:00 p.m. (local time) on the date on which such
payment shall become due. Promptly upon receipt of any
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<PAGE>
payment of principal of the Alternate Currency Loans the Alternate Currency Bank
shall give written notice to the Agent by telex or telecopy of the receipt of
such payment.
Notwithstanding the foregoing provisions of this Section, if, after the
making of any Advance in any currency other than Dollars, currency control or
exchange regulations are imposed in the country which issues such Agreed
Currency with the result that different types of such Agreed Currency (the "New
Currency") are introduced and the type of currency in which the Advance was made
(the "Original Currency") no longer exists or the Borrower is not able to make
payment to the Agent for the account of the Lenders in such Original Currency,
then all payments to be made by the Borrower hereunder in such currency shall be
made to the Agent in such amount and such type of the New Currency or Dollars as
shall be equivalent to the amount of such payment otherwise due hereunder in the
Original Currency, it being the intention of the parties hereto that the
Borrower take all risks of the imposition of any such currency control or
exchange regulations. In addition, notwithstanding the foregoing provisions of
this Section, if, after the making of any Advance in any currency other than
Dollars, the Borrower is not able to make payment to the Agent for the account
of the Lenders in the type of currency in which such Advance was made because of
the imposition of any such currency control or exchange regulation, then such
Advance shall instead be repaid when due in Dollars in a principal amount equal
to the Dollar Amount (as of the date of repayment) of such Advance.
2.13 Evidence of Debt.
(a) Each Lender shall maintain in accordance with its usual practice
an account or accounts (a "LOAN ACCOUNT") evidencing the indebtedness of the
Borrower to such Lender owing to such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time hereunder.
(b) The Register maintained by the Agent pursuant to Section 13.3(C)
shall include a control account, and a subsidiary account for each Lender, in
which accounts (taken together) shall be recorded (i) the date and the amount of
each Loan made hereunder, the Type thereof and the Interest Period, if any,
applicable thereto, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrowers to each Lender hereunder, (iii)
the effective date and amount of each Assignment Agreement delivered to and
accepted by it and the parties thereto pursuant to Section 13.3, (iv) the amount
of any sum received by the Agent hereunder for the account of the Lenders and
each Lender's share thereof, and (v) all other appropriate debits and credits as
provided in this Agreement, including, without limitation, all fees, charges,
expenses and interest.
(c) The entries made in the Loan Account, the Register and the other
accounts maintained pursuant to subsections (a) or (b) of this Section shall be
conclusive and binding for all purposes, absent manifest error, unless the
applicable Borrower objects to information contained in the Loan Accounts, the
Register or the other accounts within thirty (30) days of the applicable
Borrower's receipt of such information; provided that the failure of any Lender
or the
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<PAGE>
Agent to maintain such accounts or any error therein shall not in any manner
affect the obligation of the Borrowers to repay the Loans in accordance with the
terms of this Agreement.
(d) Any Lender may request that the Revolving Loans or Term Loans made
by it each be evidenced by a promissory note in substantially the forms of
Exhibit K-1 and Exhibit K-2 to evidence such Lender's Revolving Loans or Term
Loans, respectively. In such event, the applicable Borrower shall prepare,
execute and deliver to such Lender a promissory note for such Loans payable to
the order of such Lender and in a form approved by the Agent and consistent with
the terms of this Agreement. Thereafter, the Loans evidenced by such promissory
note and interest thereon shall at all times (including after assignment
pursuant to Section 13.3) be represented by one or more promissory notes in such
form payable to the order of the payee named therein.
2.14 Telephonic Notices. The Borrowers authorize the Lenders and the Agent
to extend Advances, effect selections of Types of Advances and to transfer funds
based on telephonic notices made by any person or persons the Agent or any
Lender in good faith believes to be acting on behalf of the applicable Borrower.
The Borrowers agree to deliver promptly to the Agent a written confirmation,
signed by an Authorized Officer, if such confirmation is requested by the Agent
or any Lender, of each telephonic notice. If the written confirmation differs in
any material respect from the action taken by the Agent and the Lenders, the
records of the Agent and the Lenders shall govern absent manifest error. In case
of disagreement concerning such notices, if the Agent has recorded telephonic
borrowing notices, such recordings will be made available to the applicable
Borrower upon the Borrower's request therefor.
2.15 Promise to Pay; Interest and Commitment Fees; Interest Payment Dates;
Interest and Fee Basis; Taxes; Loan and Control Accounts.
(A) Promise to Pay. The Borrower unconditionally promises to pay when
due the principal amount of each Loan and all other Obligations incurred by it,
and to pay all unpaid interest accrued thereon, in accordance with the terms of
this Agreement and the other Loan Documents.
(B) Interest Payment Dates. Interest accrued on each Floating Rate
Loan shall be payable on each Payment Date, commencing with the first such date
to occur after the date hereof, upon any prepayment whether by acceleration or
otherwise, and at maturity (whether by acceleration or otherwise). Interest
accrued on each Eurocurrency Rate Loan shall be payable on the last day of its
applicable Interest Period, on any date on which the Eurocurrency Rate Loan is
prepaid, whether by acceleration or otherwise, and at maturity. Interest accrued
on each Eurocurrency Rate Loan having an Interest Period longer than three
months shall also be payable on the last day of each three-month interval during
such Interest Period. Interest accrued on the principal balance of all other
Obligations shall be payable in arrears (i) on the last day of each calendar
month, commencing on the first such day following the incurrence of such
Obligation, (ii) upon repayment thereof in full or in part, and (iii) if not
theretofore paid in full, at the time such other Obligation becomes due and
payable (whether by acceleration or otherwise).
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<PAGE>
(C) Commitment Fees. (i) The Borrower shall pay to the Agent, for the
account of the Lenders in accordance with their Revolving Loan Pro Rata Shares,
from and after the date of this Agreement until the date on which the Aggregate
Revolving Loan Commitment shall be terminated in whole, a commitment fee
accruing at the rate of the then Applicable Commitment Fee Percentage, on the
amount by which (A) the Aggregate Revolving Loan Commitment in effect from time
to time exceeds (B) the Dollar Amount of the Revolving Credit Obligations
(including the outstanding principal amount of the Swing Line Loans) in effect
from time to time (as determined by the Agent in accordance with its customary
practices). All such commitment fees payable under this clause (C) shall
be payable quarterly in arrears on the last day of each fiscal quarter of the
Borrower occurring after the date of this Agreement (with the first such payment
being calculated for the period from the date of this Agreement and ending on
March 31, 1999, and, in addition, on the date on which the Aggregate Revolving
Loan Commitment shall be terminated in whole.
(ii) The Borrower agrees to pay to the Agent for the sole account
of the Agent and the Arranger (unless otherwise agreed between the Agent
and the Arranger and any Lender) the fees set forth in the letter agreement
between the Agent, the Arranger and the Borrower dated January 19, 1999,
payable at the times and in the amounts set forth therein.
(iii) The applicable Borrower agrees to pay to the Alternate
Currency Bank, for its sole account, a fronting fee a equal to 0.125% per
annum on the average daily outstanding Dollar Amount of all Alternate
Currency Loans.
(D) Interest and Fee Basis; Applicable Floating Rate Margin,
Applicable Eurocurrency Margin and Applicable Commitment Fee Percentage.
(i) Interest on all Eurocurrency Rate Loans and on all fees shall
be calculated for actual days elapsed on the basis of a 360-day year.
Interest on all Floating Rate Loans shall be calculated for actual days
elapsed on the basis of a 365-, or when appropriate 366-, day year.
Interest shall be payable for the day an Obligation is incurred but not for
the day of any payment on the amount paid if payment is received prior to
2:00 p.m. (Chicago time) at the place of payment. If any payment of
principal of or interest on a Loan or any payment of any other Obligations
shall become due on a day which is not a Business Day, such payment shall
be made on the next succeeding Business Day and, in the case of a principal
payment, such extension of time shall be included in computing interest,
fees and commissions in connection with such payment.
(ii) Each Alternate Currency Loan shall bear interest on the
outstanding principal amount thereof, for the Interest Period applicable
thereto, at a rate per annum set forth in the applicable Alternate Currency
Addenda. The Applicable Floating Rate Margin, Applicable Eurocurrency
Margin and Applicable Commitment Fee Percentage shall be determined on the
basis of the then applicable Leverage Ratio
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<PAGE>
as described in this Section 2.15(D)(ii), (x) if the Aggregate Commitment
as of the Closing Date is greater than $75,000,000, from time to time by
reference to the following table:
<TABLE>
<CAPTION>
APPLICABLE APPLICABLE APPLICABLE
FLOATING EUROCURRENCY COMMITMENT
LEVERAGE RATIO RATE MARGIN MARGIN FEE PERCENTAGE
- -------------- ----------- ------------ --------------
<S> <C> <C> <C>
Greater than 3.50 to 1.0 0.625% 1.875% 0.425%
Greater than 2.75 to 1.0 0.375% 1.625% 0.375%
and less than or equal to
3.50 to 1.0
Greater than 2.00 to 1.0 0.125% 1.375% 0.30%
and less than or equal to
2.75 to 1.0
Less than or equal to 2.0 to 0.0% 1.125% 0.25%
1.0
</TABLE>
; and (y) if the Aggregate Commitment as of the Closing Date is less than
or equal to $75,000,000, from time to time by reference to the following
table:
<TABLE>
<CAPTION>
APPLICABLE APPLICABLE APPLICABLE
FLOATING EUROCURRENCY COMMITMENT
LEVERAGE RATIO RATE MARGIN MARGIN FEE PERCENTAGE
- -------------- ----------- ------------ --------------
<S> <C> <C> <C>
Greater than 3.50 to 1.0 0.50% 1.75% 0.375%
Greater than 2.75 to 1.0 0.25% 1.50% 0.325%
and less than or equal to
3.50 to 1.0
Greater than 2.00 to 1.0 0.0% 1.25% 0.275%
and less than or equal to
2.75 to 1.0
Less than or equal to 2.0 to 0.0% 1.00% 0.25%
1.0
</TABLE>
For purposes of this Section 2.15(D)(ii), the Leverage Ratio shall be
calculated as provided in Section 7.4(B). Upon receipt of the financial
statements delivered pursuant to Sections 7.1(A)(i) and (ii), as
applicable, the Applicable Floating Rate Margin, Applicable Eurocurrency
Margin and Applicable Commitment Fee Percentage shall be adjusted, such
adjustment being effective five (5) Business Days following the Agent's
receipt of such financial statements and the compliance certificate
required to be delivered in connection therewith pursuant to Section
7.1(A)(iii); provided, that if the Borrower shall not have timely delivered
its financial statements in accordance with Section 7.1(A)(i) or (ii), as
applicable, and such failure continues for five (5) days after notice from
the Agent to the Borrower, then, at the discretion of the Required Lenders,
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commencing on the date upon which such financial statements should have
been delivered and continuing until such financial statements are actually
delivered, it shall be assumed for purposes of determining the Applicable
Floating Rate Margin, Applicable Eurocurrency Margin and Applicable
Commitment Fee Percentage that the Leverage Ratio was greater than 3.5 to
1.0.
(iii) Notwithstanding anything herein to the contrary, from the
date of this Agreement to but not including the fifth (5th) Business Day
following receipt of the Borrower's financial statements delivered pursuant
to Section 7.1(A)(i) for the fiscal quarter ending September 30, 1999, the
Applicable Floating Rate Margin, Applicable Eurocurrency Margin and
Applicable Commitment Fee Percentage shall be determined based upon a
Leverage Ratio less than or equal to 3.5 to 1.0 and greater than 2.75 to
1.0.
(E) Taxes.
(i) Any and all payments by the Borrower hereunder shall be made
free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings or any
liabilities with respect thereto imposed by any Governmental Authority
including those arising after the date hereof as a result of the adoption
of or any change in any law, treaty, rule, regulation, guideline or
determination of a Governmental Authority or any change in the
interpretation or application thereof by a Governmental Authority but
excluding, in the case of each Lender and the Agent, (i) such taxes
(including income taxes, franchise taxes and branch profit taxes) as are
imposed on or measured by such Lender's or Agent's, as the case may be, net
income or similar taxes imposed by the United States of America or any
Governmental Authority of the jurisdiction under the laws of which such
Lender or Agent, as the case may be, is organized or maintains a Lending
Installation (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings, and liabilities which the Agent or a Lender
determines to be applicable to this Agreement, the other Loan Documents,
the Revolving Loan Commitments, the Loans or the Letters of Credit being
hereinafter referred to as "TAXES") and (ii) if such Lender or the Agent is
entitled at such time to a total or partial exemption from withholding that
is required to be evidenced by an IRS Form 1001, 4224, W-8 or W-9 or, in
each case, any successor or additional form, taxes imposed by reason of any
failure of such Lender or the Agent to deliver to the Agent or Borrower,
from time to time as required by the Agent or Borrower, such Form 1001,
4224, W-8 or W-9 (as applicable) or, in each case, any successor or
additional form, completed in a manner reasonably satisfactory to the Agent
and the Borrower. If the Borrower or the Agent shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under
the other Loan Documents to any Lender or the Agent, (i) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable
under this Section 2.15(E)) such Lender or the Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, and
(iii) the
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Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law. If any Tax,
including, without limitation, any withholding tax, of the United States of
America or any other Governmental Authority shall be or become applicable
(y) after the date of this Agreement, to such payments by the Borrower made
to the Lending Installation or any other office that a Lender may claim as
its Lending Installation, or (z) after such Lender's selection and
designation of any other Lending Installation, to such payments made to
such other Lending Installation, such Lender shall use reasonable efforts
to make, fund and maintain its Loans through another Lending Installation
of such Lender in another jurisdiction so as to reduce the Borrower's
liability hereunder, if the making, funding or maintenance of such Loans
through such other Lending Installation of such Lender does not, in the
reasonable judgment of such Lender, otherwise adversely and materially
affect such Loans, or obligations under the Revolving Loan Commitments or
such Lender.
(ii) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges, or similar levies which arise from any payment made hereunder,
from the issuance of Letters of Credit hereunder, or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement,
the other Loan Documents, the Revolving Loan Commitments, the Loans or the
Letters of Credit (hereinafter referred to as "OTHER TAXES").
(iii) The Borrower indemnifies each Lender and the Agent for the
full amount of Taxes and Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any Governmental Authority on amounts
payable under this Section 2.15(E)) paid by such Lender or the Agent (as
the case may be) and any liability (including penalties, interest, and
expenses) arising therefrom or with respect thereto, whether or not such
Taxes or Other Taxes were correctly or legally asserted. This
indemnification shall be made within thirty (30) days after the date such
Lender or the Agent (as the case may be) makes written demand therefor. A
certificate as to any additional amount payable to any Lender or the Agent
under this Section 2.15(E) submitted to the Borrower and the Agent (if a
Lender is so submitting) by such Lender or the Agent shall show in
reasonable detail the amount payable and the calculations used to determine
such amount and shall, absent manifest error, be final, conclusive and
binding upon all parties hereto. With respect to such deduction or
withholding for or on account of any Taxes and to confirm that all such
Taxes have been paid to the appropriate Governmental Authorities, the
Borrower shall promptly (and in any event not later than thirty (30) days
after receipt) furnish to each Lender and the Agent such certificates,
receipts and other documents as may be required (in the judgment of such
Lender or the Agent) to establish any tax credit to which such Lender or
the Agent may be entitled.
(iv) Within thirty (30) days after the date of any payment of
Taxes or Other Taxes by the Borrower, the Borrower shall furnish to the
Agent the original or a certified copy of a receipt evidencing payment
thereof.
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(v) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 2.15(E) shall survive the payment in full of
principal and interest hereunder, the termination of the Letters of Credit
and the termination of this Agreement.
(vi) Each Lender that is not created or organized under the laws
of the United States of America or a political subdivision thereof shall
deliver to the Borrower and the Agent on or before the Closing Date, or, if
later, the date on which such Lender becomes a Lender pursuant to Section
13.3, a true and accurate certificate executed in duplicate by a duly
authorized officer of such Lender, in a form satisfactory to the Borrower
and the Agent, to the effect that such Lender is eligible under the
provisions of an applicable tax treaty concluded by the United States of
America (in which case the certificate shall be accompanied by two (2)
executed copies of Form 1001 of the IRS or successor applicable form) or
under Section 1442 of the Code (in which case the certificate shall be
accompanied by two copies of Form 4224 of the IRS or successor applicable
form) or, if such Lender is not a "bank" within the meaning of Section
881(c)(3)(A) of the Code, two complete copies of IRS Form W-8 or W-9 or
successor applicable form to receive payments of interest hereunder without
deduction or withholding of United States federal income tax. Each such
Lender further agrees to deliver to the Borrower and the Agent from time to
time a true and accurate certificate executed in duplicate by a duly
authorized officer of such Lender substantially in a form satisfactory to
the Borrower and the Agent, before or promptly upon the occurrence of any
event requiring a change in the most recent certificate previously
delivered by it to the Borrower and the Agent pursuant to this Section
2.15(E)(vi).
2.16 Notification of Advances, Interest Rates, Prepayments and Aggregate
Revolving Loan Commitment Reductions. Promptly after receipt thereof, the Agent
will notify each Lender of the contents of each Aggregate Revolving Loan
Commitment reduction notice, Borrowing/Conversion/Continuation Notice, and
repayment notice received by it hereunder. The Agent will notify each Lender of
the interest rate and Agreed Currency applicable to each Eurocurrency Rate Loan
promptly upon determination of such interest rate and Agreed Currency and will
give each Lender prompt notice of each change in the Alternate Base Rate.
2.17 Lending Installations. Each Lender may book its Loans or Letters of
Credit at any Lending Installation selected by such Lender and may change its
Lending Installation from time to time. All terms of this Agreement shall apply
to any such Lending Installation. Each Lender may, by written or facsimile
notice to the Agent and the Borrower, designate a Lending Installation through
which Loans will be made by it and for whose account Loan payments and/or
payments of L/C Obligations are to be made.
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2.18 Non-Receipt of Funds by the Agent. Unless the Borrower or a Lender, as
the case may be, notifies the Agent prior to the date on which it is scheduled
to make payment to the Agent of (i) in the case of a Lender, the proceeds of a
Loan or (ii) in the case of the Borrower, a payment of principal, interest or
fees to the Agent for the account of the Lenders, that it does not intend to
make such payment, the Agent may assume that such payment has been made. The
Agent may, but shall not be obligated to, make the amount of such payment
available to the intended recipient in reliance upon such assumption. If such
Lender or the Borrower, as the case may be, has not in fact made such payment to
the Agent, the recipient of such payment shall, on demand by the Agent, repay to
the Agent the amount so made available together with interest thereon in respect
of each day during the period commencing on the date such amount was so made
available by the Agent until the date the Agent recovers such amount at a rate
per annum equal to (i) in the case of payment by a Lender, the Federal Funds
Effective Rate for such day or (ii) in the case of payment by the Borrower, the
interest rate applicable to the relevant Loan.
2.19 Termination Date. This Agreement shall be effective until the latest
of (i) the Termination Date, and (ii) the Term Loan Termination Date.
Notwithstanding the termination of this Agreement, until (A) all of the Secured
Obligations (other than contingent indemnity obligations) shall have been fully
and indefeasibly paid and satisfied, (B) all financing arrangements among the
Borrower and the Lenders shall have been terminated (other than under Hedging
Agreements or other agreements with respect to Hedging Obligations) and (C) all
of the Letters of Credit shall have expired, been canceled or terminated
(collectively, the "TERMINATION CONDITIONS"), all of the rights and remedies
under this Agreement and the other Loan Documents shall survive. Upon
satisfaction of the Termination Conditions, the Agent shall execute and deliver
to the Borrower and the Subsidiaries of the Borrower all Uniform Commercial Code
termination statements, mortgage assignments or satisfactions and similar
documents which Borrower and the Subsidiaries of the Borrower shall reasonably
request to evidence such termination.
2.20 Replacement of Certain Lenders. In the event a Lender ("AFFECTED
LENDER") shall have: (i) failed to fund its Applicable Pro Rata Share of any
Advance requested by the Borrower, or to fund a Revolving Loan in order to repay
Swing Line Loans pursuant to Section 2.3(D), which such Lender is obligated to
fund under the terms of this Agreement and which failure has not been cured,
(ii) requested compensation from the Borrower under Sections 2.15(E), 4.1 or 4.2
to recover Taxes, Other Taxes or other additional costs incurred by such Lender
which are not being incurred generally by the other Lenders, (iii) delivered a
notice pursuant to Section 4.3 claiming that such Lender is unable to extend
Eurocurrency Rate Loans to the Borrower for reasons not generally applicable to
the other Lenders or (iv) has invoked Section 10.2, then, in any such case, the
Borrower or the Agent may make written demand on such Affected Lender (with a
copy to the Agent in the case of a demand by the Borrower and a copy to the
Borrower in the case of a demand by the Agent) for the Affected Lender to
assign, and such Affected Lender shall use commercially reasonable efforts to
assign pursuant to one or more duly executed Assignment Agreements five (5)
Business Days after the date of such demand, to one or more financial
institutions that comply with the provisions of Section 13.3(A) which the
Borrower or the Agent, as the case may be, shall have engaged for
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such purpose ("REPLACEMENT LENDER"), all of such Affected Lender's rights and
obligations under this Agreement and the other Loan Documents (including,
without limitation, its Revolving Loan Commitment, all Loans owing to it, all of
its participation interests in existing Letters of Credit and its obligation to
participate in additional Letters of Credit and Swing Line Loans and Alternate
Currency Loans hereunder) in accordance with Section 13.3. The Agent agrees,
upon the occurrence of such events with respect to an Affected Lender and upon
the written request of the Borrower, to use its reasonable efforts to obtain the
commitments from one or more financial institutions to act as a Replacement
Lender. The Agent is authorized to execute one or more of such assignment
agreements as attorney-in-fact for any Affected Lender failing to execute and
deliver the same within five (5) Business Days after the date of such demand.
Further, with respect to such assignment the Affected Lender shall have
concurrently received, in cash, all amounts due and owing to the Affected Lender
hereunder or under any other Loan Document, including, without limitation, the
aggregate outstanding principal amount of the Loans owed to such Lender,
together with accrued interest thereon through the date of such assignment,
amounts payable under Sections 2.15(E), 4.1, and 4.2 with respect to such
Affected Lender and compensation payable under Section 2.15(C) in the event of
any replacement of any Affected Lender under clause (ii) or clause (iii) of this
Section 2.20; provided that upon such Affected Lender's replacement, such
Affected Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 2.15(E), 4.1, 4.2, 4.4, and 10.7, as well
as to any fees accrued for its account hereunder and not yet paid, and shall
continue to be obligated under Section 11.8. Upon the replacement of any
Affected Lender pursuant to this Section 2.20, the provisions of Section 9.2
shall continue to apply with respect to Loans which are then outstanding with
respect to which the Affected Lender failed to fund its Applicable Pro Rata
Share and which failure has not been cured.
2.21 Alternate Currency Loans.
(a) Upon the satisfaction of the conditions precedent set forth in
Section 5 hereof and set forth in the applicable Alternate Currency Addendum,
from and including the later of the date of this Agreement and the date of
execution of the applicable Alternate Currency Addendum and prior to Termination
Date (unless an earlier termination date shall be specified in or pursuant to
the applicable Alternate Currency Addendum), the Alternate Currency Bank agrees,
on the terms and conditions set forth in this Agreement and in the applicable
Alternate Currency Addendum, to make Alternate Currency Loans under such
Alternate Currency Addendum to the applicable Borrower party to such Alternate
Currency Addendum from time to time in the applicable Alternate Currency, in an
amount not to exceed each such Alternate Currency Bank's applicable Alternate
Currency Commitment; provided, however, at no time shall the Dollar Amount of
the outstanding principal amount of the Alternate Currency Loans for all
Alternate Currencies exceed $25,000,000 other than as a result of currency
fluctuations and then only to the extent permitted in Section 2.5(B)(ii);
provided, further, at no time shall the Dollar Amount of the Alternate Currency
Loans for any specific Alternate Currency exceed the maximum amount specified as
the maximum amount for such Alternate Currency in the applicable Alternate
Currency Addendum other than as a result of currency fluctuations and then only
to the extent permitted in Section 2.5(B)(ii). Subject to the terms of this
Agreement and the
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applicable Alternate Currency Addendum, the applicable Borrowers may borrow,
repay and reborrow Alternate Currency Loans at any time prior to the Termination
Date (unless an earlier termination date shall be specified in or pursuant to
the applicable Alternate Currency Addendum). On the Termination Date (unless an
earlier termination date shall be specified in or pursuant to the applicable
Alternate Currency Addendum), the outstanding principal balance of the Alternate
Currency Loans shall be paid in full by the applicable Borrower and prior to
Termination Date (unless an earlier termination date shall be specified in or
pursuant to the applicable Alternate Currency Addendum) prepayments of the
Alternate Currency Loans shall be made by the applicable Borrower if and to the
extent required in Section 2.5(B)(ii).
(b) Borrowing Notice. When the applicable Borrower desires to borrow
under this Section 2.21, the applicable Borrower shall deliver to the Alternate
Currency Bank a Borrowing/Conversion/Continuation Notice, signed by it,
specifying that the Borrower is requesting an Alternate Currency Loan pursuant
to this Section 2.21. Any Borrowing/Conversion/Continuation Notice given
pursuant to this Section 2.21 shall be irrevocable.
(c) Termination. Except as otherwise required by applicable law, in no
event shall the Alternate Currency Bank have the right to accelerate the
Alternate Currency Loans outstanding under any Alternate Currency Addendum or to
terminate their commitments (if any) thereunder to make Alternate Currency Loans
prior to the stated termination date in respect thereof, except that the
Alternate Currency Bank shall have such rights upon an acceleration of the Loans
and a termination of the Revolving Credit Commitments pursuant to Article IX.
(d) Statements. The Alternate Currency Bank shall furnish to the Agent
not less frequently than monthly, and at any other time at the reasonable
request of the Agent, a statement setting forth the outstanding Alternate
Currency Loans made and repaid during the period since the last such report
under such Alternate Currency Addendum.
(e) Risk Participation. Immediately and automatically upon the
occurrence of an Event of Default under Sections 8.1(A), (F) or (G), each Lender
shall be deemed to have unconditionally and irrevocably purchased from the
Alternate Currency Bank, without recourse or warranty, an undivided interest in
and participation in each Alternate Currency Loan ratably in accordance with
such Lender's Pro Rata Share of the amount of such Loan, and immediately and
automatically all Alternate Currency Loans shall be converted to and
redenominated in Dollars equal to the Dollar Amount of each such Alternate
Currency Loan determined as of the date of such conversion; provided, that to
the extent such conversion shall occur other than at the end of an Interest
Period, the applicable Borrower shall pay to the Alternate Currency Bank, all
losses and breakage costs related thereto in accordance with Section 4.4. Each
of the Lenders shall pay to the Alternate Currency Bank not later than two (2)
Business Days following a request for payment from such Alternate Currency Bank,
in Dollars, an amount equal to the undivided interest in and participation in
the Alternate Currency Loan purchased by such Lender pursuant to this Section
2.21(e). In the event that any Lender fails to make payment to the Alternate
Currency Bank of any amount due under this Section 2.21(e), the Agent shall be
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entitled to receive, retain and apply against such obligation the principal and
interest otherwise payable to such Lender hereunder until the Agent receives
from such Lender an amount sufficient to discharge such Lender's payment
obligation as prescribed in this Section 2.21(e) together with interest thereon
at the Federal Funds Effective Rate for each day during the period commencing on
the date of demand by the Alternate Currency Bank and ending on the date such
obligation is fully satisfied. The Agent will promptly remit all payments
received as provided above to the Alternate Currency Bank.
(f) Other Provisions Applicable to Alternate Currency Loans. The
specification of payment of Alternate Currency Loans in the related Alternate
Currency at a specific place pursuant to this Agreement is of the essence. Such
Alternate Currency shall be the currency of account and payment of such Loans
under this Agreement and the applicable Alternate Currency Addendum.
Notwithstanding anything in this Agreement, the obligation of the applicable
Borrower in respect of such Loans shall not be discharged by an amount paid in
any other currency or at another place, whether pursuant to a judgment or
otherwise, to the extent the amount so paid, on prompt conversion into the
applicable Alternate Currency and transfer to such Lender under normal banking
procedure, does not yield the amount of such Alternate Currency due under this
Agreement, the applicable Alternate Currency Addenda. In the event that any
payment, whether pursuant to a judgment or otherwise, upon conversion and
transfer, does not result in payment of the amount of such Alternate Currency
due under this Agreement or the applicable Alternate Currency Addenda, such
Lender shall have an independent cause of action against the Borrowers for the
currency deficit.
2.22 Judgment Currency. If, for the purposes of obtaining judgment in any
court, it is necessary to convert a sum due from the Borrower hereunder in the
currency expressed to be payable herein (the "SPECIFIED CURRENCY") into another
currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Agent could purchase the specified
currency with such other currency at the Agent's main office in Chicago,
Illinois on the Business Day preceding that on which the final, non-appealable
judgment is given. The obligations of the Borrower in respect of any sum due to
any Lender or the Agent hereunder shall, notwithstanding any judgment in a
currency other than the specified currency, be discharged only to the extent
that on the Business Day following receipt by such Lender or the Agent (as the
case may be) of any sum adjudged to be so due in such other currency such Lender
or the Agent (as the case may be) may in accordance with normal, reasonable
banking procedures purchase the specified currency with such other currency. If
the amount of the specified currency so purchased is less than the sum
originally due to such Lender or the Agent, as the case may be, in the specified
currency, the Borrower agrees, to the fullest extent that it may effectively do
so, as a separate obligation and notwithstanding any such judgment, to indemnify
such Lender or the Agent, as the case may be, against such loss, and if the
amount of the specified currency so purchased exceeds (a) the sum originally due
to any Lender or the Agent, as the case may be, in the specified currency and
(b) any amounts shared with other Lenders as a result of allocations of such
excess as a disproportionate payment to such Lender under Section 12.2, such
Lender or the Agent, as the case may be, agrees to remit such excess to the
Borrower.
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2.23 Market Disruption; Denomination of Amounts in Dollars; Dollar
Equivalent of Reimbursement Obligations. (a) Notwithstanding the satisfaction of
all conditions referred to in Article II with respect to any Advance in any
Agreed Currency other than Dollars, if there shall occur on or prior to the date
of such Advance any change in national or international financial, political or
economic conditions or currency exchange rates or exchange controls which would
in the reasonable opinion of the Borrower, Agent or the Required Lenders make it
impracticable for the Eurocurrency Rate Loans or Alternate Currency Loans
comprising such Advance to be denominated in the Agreed Currency specified by
the Borrower, then the Agent shall forthwith give notice thereof to the Borrower
and the Lenders, or the Borrower shall give notice to the Agent and the Lenders,
as the case may be, and such Eurocurrency Rate Loans shall not be denominated in
such currency but shall be made on such Borrowing Date in Dollars, in an
aggregate principal amount equal to the Dollar Amount of the aggregate principal
amount specified in the related Borrowing Notice, as Floating Rate Loans, unless
the Borrower notifies the Agent at least one (1) Business Day before such date
that (i) it elects not to borrow on such date or (ii) it elects to borrow on
such date in a different Agreed Currency or Alternate Currency, as the case may
be, in which the denomination of such Loans would in the opinion of the Agent
and the Required Lenders be practicable and in an aggregate principal amount
equal to the Dollar Amount of the aggregate principal amount specified in the
related Borrowing Notice.
(b) Except as set forth below, all amounts referenced in this
Article III shall be calculated using the Dollar Amount determined based upon
the Equivalent Amount in effect as of the date of any determination thereof;
provided, however, that payment by the Borrower of any Advance denominated in an
currency other than Dollars, shall be in Dollars using the Dollar Amount of the
Advance (calculated based upon the Equivalent Amount in effect on the date of
payment thereof) and in the event that the Borrower does not reimburse the Agent
and the Lenders are required to fund a purchase of a participation in such
Advance, such purchase shall be made in Dollars in an amount equal to the Dollar
Amount of such Advance (calculated based upon the Equivalent Amount in effect on
the date of payment thereof). Notwithstanding anything herein to the contrary,
the full risk of currency fluctuations shall be borne by the Borrower and the
Borrower agrees to indemnify and hold harmless each Issuing Bank, the Agent and
the Lenders from and against any loss resulting from any borrowing denominated
in a currency other than in Dollars and for which the Lenders are not reimbursed
on the day of such borrowing.
2.24 Payments to be Free and Clear. (a) All sums payable by each Borrower
hereunder, whether in respect of principal, interest, fees or otherwise, shall
be paid without deduction for any present and future taxes, levies, imposts,
deductions, charges or withholdings imposed by any government or any political
subdivision or taxing authority thereof (other than any tax on or measured by
the net income, profits or gains of any Lender) and all interest, penalties or
similar liabilities with respect thereto (collectively, "taxes"), which amounts
shall be paid by the applicable Borrower as provided in this Section 2.24.
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(b) Grossing-up of Payments. If: (a) any Borrower or any other Person
is required by law to make any deduction or withholding on account of any such
taxes from any sum paid or expressed to be payable by the applicable Borrower to
any Lender under this Agreement; or (b) any party to this Agreement (or any
Person on its behalf) other than any Borrower is required by law to make any
deduction or withholding from, or any payment on or calculated by reference to
the amount of, any such sum received or receivable (other than on account of any
excluded taxes) by any Lender under this Agreement then:
(i) the applicable party shall notify the Agent and, if such
party is not the applicable Borrower, the Agent will notify the applicable
Borrower of any such requirement or any change in any such requirement as
soon as such party becomes aware of it;
(ii) the applicable Borrower shall pay any such taxes before the
later of (i) the date on which penalties attached thereto become due and
payable or (ii) fifteen (15) days after the date of receipt by the
applicable Borrower of such written notification provided by the Agent in
accordance with paragraph (i) if such applicable party is not the
applicable Borrower, such payment to be made (if the liability to pay is
imposed on such Borrower) for its own account or (if that liability is
imposed on any party to this Agreement) on behalf of and in the name of
that party; and
(iii) the sum payable by the applicable Borrower in respect of
which the relevant deduction, withholding or payment is required shall
(except, in the case of any such payment, to the extent that the amount
thereof is not ascertainable when that sum is paid) be increased to the
extent necessary to ensure that, after the making of that deduction,
withholding or payment, that party receives on the due date and retains
(free from any liability in respect of any such deduction, withholding or
payment) a sum equal to that which it would have received and so retained
had no such deduction, withholding or payment been required or made.
ARTICLE III:
THE LETTER OF CREDIT FACILITY
-----------------------------
3.1 Obligation to Issue Letters of Credit. Subject to the terms and
conditions of this Agreement and in reliance upon the representations,
warranties and covenants of the Borrower herein set forth, each Issuing Bank
hereby agrees to issue for the account of the Borrower through such Issuing
Bank's branches as it and the Borrower may jointly agree, one or more Letters of
Credit denominated in Dollars or an Agreed Currency in accordance with this
Article III, from time to time during the period, commencing on the Closing Date
and ending on the Business Day prior to the Termination Date.
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3.2 Transitional Provision. Schedule 3.2 contains a schedule of certain
letters of credit issued for the account of the Borrower prior to the Closing
Date. Subject to the satisfaction of the conditions contained in Sections 5.1
and 5.2, from and after the Closing Date such letters of credit shall be deemed
to be Letters of Credit issued pursuant to this Article III.
3.3 Types and Amounts. No Issuing Bank shall have any obligation to and no
Issuing Bank shall:
(i) issue (or amend) any Letter of Credit if on the date of
issuance (or amendment), before or after giving effect to the Letter of
Credit requested hereunder, (a) the Dollar Amount of the Revolving Credit
Obligations at such time would exceed the lesser of the Aggregate Revolving
Loan Commitment at such time, or (b) the aggregate outstanding Dollar
Amount of the L/C Obligations would exceed $15,000,000, or (c) the Dollar
Amount of all Eurocurrency Rate Loans and Letters of Credit in Agreed
Currencies other than Dollars would exceed the Maximum Eurocurrency Amount;
or
(ii) issue (or amend) any Letter of Credit which has an
expiration date later than the date which is the earlier of one (1) year
after the date of issuance thereof or five (5) Business Days immediately
preceding the Termination Date.
3.4 Conditions. In addition to being subject to the satisfaction of the
conditions contained in Sections 5.1 and 5.2, the obligation of an Issuing Bank
to issue any Letter of Credit is subject to the satisfaction in full of the
following conditions:
(i) the Borrower shall have delivered to the applicable Issuing
Bank at such times and in such manner as such Issuing Bank may reasonably
prescribe, a request for issuance of such Letter of Credit in substantially
the form of Exhibit C hereto (each such request a "REQUEST FOR LETTER OF
CREDIT"), duly executed applications for such Letter of Credit, and such
other documents, instructions and agreements as may be required pursuant to
the terms thereof (all such applications, documents, instructions, and
agreements being referred to herein as the "L/C DOCUMENTS"), and the
proposed Letter of Credit shall be reasonably satisfactory to such Issuing
Bank as to form and content; and
(ii) as of the date of issuance no order, judgment or decree of
any court, arbitrator or Governmental Authority shall purport by its terms
to enjoin or restrain the applicable Issuing Bank from issuing such Letter
of Credit and no law, rule or regulation applicable to such Issuing Bank
and no request or directive (whether or not having the force of law) from a
Governmental Authority with jurisdiction over such Issuing Bank shall
prohibit or request that such Issuing Bank refrain from the issuance of
Letters of Credit generally or the issuance of that Letter of Credit.
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3.5 Procedure for Issuance of Letters of Credit. (a) Subject to the terms
and conditions of this Article III and provided that the applicable conditions
set forth in Sections 5.1 and 5.2 hereof have been satisfied, the applicable
Issuing Bank shall, on the requested date, issue a Letter of Credit on behalf of
the Borrower in accordance with such Issuing Bank's usual and customary business
practices and, in this connection, such Issuing Bank may assume that the
applicable conditions set forth in Section 5.2 hereof have been satisfied unless
it shall have received notice to the contrary from the Agent or a Lender or has
knowledge that the applicable conditions have not been met.
(b) The applicable Issuing Bank shall give the Agent written or telex
notice, or telephonic notice confirmed promptly thereafter in writing, of the
issuance of a Letter of Credit, provided, however, that the failure to provide
such notice shall not result in any liability on the part of such Issuing Bank.
(c) No Issuing Bank shall extend or amend any Letter of Credit unless
the requirements of this Section 3.5 are met as though a new Letter of Credit
was being requested and issued.
3.6 Letter of Credit Participation. On the date of this Agreement, with
respect to the Letters of Credit identified on Schedule 3.2, and immediately
upon the issuance of each Letter of Credit hereunder, each Lender with a
Revolving Loan Pro Rata Share shall be deemed to have automatically, irrevocably
and unconditionally purchased and received from the applicable Issuing Bank an
undivided interest and participation in and to such Letter of Credit, the
obligations of the Borrower in respect thereof, and the liability of such
Issuing Bank thereunder (collectively, an "L/C INTEREST") in an amount equal to
the Dollar Amount available for drawing under such Letter of Credit multiplied
by such Lender's Revolving Loan Pro Rata Share. Each Issuing Bank will notify
each Lender promptly upon presentation to it of an L/C Draft or upon any other
draw under a Letter of Credit. On or before the Business Day on which an Issuing
Bank makes payment of each such L/C Draft or, in the case of any other draw on a
Letter of Credit, on demand by the Agent or the applicable Issuing Bank, each
Lender shall make payment to the Agent, for the account of the applicable
Issuing Bank, in immediately available funds in the Agreed Currency in an amount
equal to such Lender's Revolving Loan Pro Rata Share of the Dollar Amount of
such payment or draw. The obligation of each Lender to reimburse the Issuing
Banks under this Section 3.6 shall be unconditional, continuing, irrevocable and
absolute. In the event that any Lender fails to make payment to the Agent of any
amount due under this Section 3.6, the Agent shall be entitled to receive,
retain and apply against such obligation the principal and interest otherwise
payable to such Lender hereunder until the Agent receives such payment from such
Lender or such obligation is otherwise fully satisfied; provided, however, that
nothing contained in this sentence shall relieve such Lender of its obligation
to reimburse the applicable Issuing Bank for such amount in accordance with this
Section 3.6.
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3.7 Reimbursement Obligation. The Borrower agrees unconditionally,
irrevocably and absolutely to pay immediately to the Agent, for the account of
the Lenders, the amount of each advance drawn under or pursuant to a Letter of
Credit or an L/C Draft related thereto (such obligation of the Borrower to
reimburse the Agent for an advance made under a Letter of Credit or L/C Draft
being hereinafter referred to as a "REIMBURSEMENT OBLIGATION" with respect to
such Letter of Credit or L/C Draft), each such reimbursement to be made by the
Borrower no later than the Business Day on which the applicable Issuing Bank
makes payment of each such L/C Draft or, if the Borrower shall have received
notice of a Reimbursement Obligation later than 12:00 p.m. (Chicago time), on
any Business Day or on a day which is not a Business Day, no later than 12:00
p.m. (Chicago time), on the immediately following Business Day or, in the case
of any other draw on a Letter of Credit, the date specified in the demand of
such Issuing Bank. If the Borrower at any time fails to repay a Reimbursement
Obligation pursuant to this Section 3.7, the Borrower shall be deemed to have
elected to borrow Revolving Loans from the Lenders, as of the date of the
advance giving rise to the Reimbursement Obligation, equal in amount to the
Dollar Amount of the unpaid Reimbursement Obligation. Such Revolving Loans shall
be made as of the date of the payment giving rise to such Reimbursement
Obligation, automatically, without notice and without any requirement to satisfy
the conditions precedent otherwise applicable to an Advance of Revolving Loans.
Such Revolving Loans shall constitute a Floating Rate Advance, the proceeds of
which Advance shall be used to repay such Reimbursement Obligation. If, for any
reason, the Borrower fails to repay a Reimbursement Obligation on the day such
Reimbursement Obligation arises and, for any reason, the Lenders are unable to
make or have no obligation to make Revolving Loans, then such Reimbursement
Obligation shall bear interest from and after such day, until paid in full, at
the interest rate applicable to a Floating Rate Advance.
3.8 Letter of Credit Fees. The Borrower agrees to pay:
(i) quarterly, in arrears, to the Agent for the ratable benefit
of the Lenders, except as set forth in Section 9.2, a letter of credit fee
at a rate per annum equal to the Applicable L/C Fee Percentage on the
average daily outstanding Dollar Amount available for drawing under all
Letters of Credit;
(ii) quarterly, in arrears, to the applicable Issuing Bank,
a letter of credit fronting fee equal to 0.125% per annum on the average
daily outstanding face amount available for drawing under all Letters of
Credit issued by such Issuing Bank; and
(iii) to the applicable Issuing Bank, all customary fees and
other issuance, amendment, document examination, negotiation and
presentment expenses and related charges in connection with the issuance,
amendment, presentation of L/C Drafts, and the like customarily charged by
such Issuing Banks with respect to standby and commercial Letters of
Credit, including, without limitation, standard commissions with respect to
commercial Letters of Credit, payable at the time of invoice of such
amounts.
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3.9 Issuing Bank Reporting Requirements. In addition to the notices
required by Section 3.5(C), each Issuing Bank shall, no later than the tenth
(10th) Business Day following the last day of each month, provide to the Agent,
upon the Agent's request, schedules, in form and substance reasonably
satisfactory to the Agent, showing the date of issue, account party, Agreed
Currency and amount in such Agreed Currency, expiration date and the reference
number of each Letter of Credit issued by it outstanding at any time during such
month and the aggregate amount payable by the Borrower during such month. In
addition, upon the request of the Agent, each Issuing Bank shall furnish to the
Agent copies of any Letter of Credit and any application for or reimbursement
agreement with respect to a Letter of Credit to which the Issuing Bank is party
and such other documentation as may reasonably be requested by the Agent. Upon
the request of any Lender, the Agent will provide to such Lender information
concerning such Letters of Credit.
3.10 Indemnification; Exoneration. (A) In addition to amounts payable as
elsewhere provided in this Article III, the Borrower hereby agrees to protect,
indemnify, pay and save harmless the Agent, each Issuing Bank and each Lender
from and against any and all liabilities and costs which the Agent, such Issuing
Bank or such Lender may incur or be subject to as a consequence, direct or
indirect, of (i) the issuance of any Letter of Credit other than, in the case of
the applicable Issuing Bank, as a result of its Gross Negligence or willful
misconduct, as determined by the final judgment of a court of competent
jurisdiction, or (ii) the failure of the applicable Issuing Bank 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 Governmental
Authority (all such acts or omissions herein called "GOVERNMENTAL ACTS").
(B) As among the Borrower, the Lenders, the Agent and the Issuing
Banks, the Borrower assumes all risks of the acts and omissions of, or misuse of
such Letter of Credit by, the beneficiary of any Letters of Credit. In
furtherance and not in limitation of the foregoing, subject to the provisions of
the Letter of Credit applications and Letter of Credit reimbursement agreements
executed by the Borrower at the time of request for any Letter of Credit,
neither the Agent, any Issuing Bank nor any Lender shall be responsible (in the
absence of Gross Negligence or willful misconduct in connection therewith, as
determined by the final judgment of a court of competent jurisdiction): (i) for
the form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
issuance of the Letters of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii)
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) for failure of the beneficiary of a
Letter of Credit to comply duly with conditions required in order to draw upon
such Letter of Credit; (iv) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex, or
other similar form of teletransmission or otherwise; (v) for errors in
interpretation of technical trade terms; (vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any Letter Credit or of the proceeds thereof; (vii) for the misapplication
by the beneficiary of a Letter of Credit of the
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proceeds of any drawing under such Letter of Credit; and (viii) for any
consequences arising from causes beyond the control of the Agent, the Issuing
Banks and the Lenders, including, without limitation, any Governmental Acts.
None of the above shall affect, impair, or prevent the vesting of any Issuing
Bank's rights or powers under this Section 3.10.
(C) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by any Issuing
Bank under or in connection with the Letters of Credit or any related
certificates shall not, in the absence of Gross Negligence or willful
misconduct, as determined by the final judgment of a court of competent
jurisdiction, put the applicable Issuing Bank, the Agent or any Lender under any
resulting liability to the Borrower or relieve the Borrower of any of its
obligations hereunder to any such Person.
(D) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 3.10 shall survive the payment in full of principal and interest
hereunder, the termination of the Letters of Credit and the termination of this
Agreement.
3.11 Cash Collateral. Notwithstanding anything to the contrary herein or in
any application for a Letter of Credit, upon payout or termination of this
Agreement in full in cash, the Borrower shall, on the Business Day that it
receives Agent's demand, deliver to the Agent for the benefit of the Lenders and
the Issuing Banks, cash, or other collateral of a type satisfactory to the
Required Lenders, having a value, as determined by such Lenders, equal to one
hundred five percent (105%) of the aggregate Dollar Amount of the outstanding
L/C Obligations. In addition, if the Revolving Credit Availability is at any
time less than the Dollar Amount of all contingent L/C Obligations outstanding
at any time, the Borrower shall deposit cash collateral with the Agent in
Dollars in an amount equal to one-hundred five percent (105%) of the Dollar
Amount by which such L/C Obligations exceed such Revolving Credit Availability.
Any such collateral shall be held by the Agent in a separate account
appropriately designated as a cash collateral account in relation to this
Agreement and the Letters of Credit and retained by the Agent for the benefit of
the Lenders and the Issuing Banks as collateral security for the Borrower's
obligations in respect of this Agreement and each of the Letters of Credit and
L/C Drafts. Such amounts shall be applied to reimburse the Issuing Banks for
drawings or payments under or pursuant to Letters of Credit or L/C Drafts, or if
no such reimbursement is required, to payment of such of the other Obligations
as the Agent shall determine. If no Default shall be continuing, amounts
remaining in any cash collateral account established pursuant to this Section
3.11 which are not to be applied to reimburse an Issuing Bank for amounts
actually paid or to be paid by such Issuing Bank in respect of a Letter of
Credit or L/C Draft, shall be returned to the Borrower within one (1) Business
Day (after deduction of the Agent's expenses incurred in connection with such
cash collateral account).
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ARTICLE IV:
CHANGE IN CIRCUMSTANCES
-----------------------
4.1 Yield Protection. If any law or any governmental or quasi-governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law) adopted after the date of this Agreement and having general
applicability to all banks within the jurisdiction in which such Lender operates
(excluding, for the avoidance of doubt, the effect of and phasing in of capital
requirements or other regulations or guidelines passed prior to the date of this
Agreement), or any interpretation or application thereof by any Governmental
Authority charged with the interpretation or application thereof, or the
compliance of any Lender therewith,
(i) subjects any Lender or any applicable Lending Installation to
any tax, duty, charge or withholding on or from payments due from the
Borrower (excluding taxation of the overall net income of any Lender or
taxation of a similar basis, which are governed by Section 2.15(E)), or
changes the basis of taxation of payments to any Lender in respect of its
Loans, its L/C Interests, the Letters of Credit or other amounts due it
hereunder, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended
by, any Lender or any applicable Lending Installation (other than reserves
and assessments taken into account in determining the interest rate
applicable to Eurocurrency Rate Loans) with respect to its Loans, L/C
Interests or the Letters of Credit, or
(iii) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable Lending Installation of
making, funding or maintaining the Loans, the L/C Interests or the Letters
of Credit or reduces any amount received by any Lender or any applicable
Lending Installation in connection with Loans or Letters of Credit, or
requires any Lender or any applicable Lending Installation to make any
payment calculated by reference to the amount of Loans or L/C Interests
held or interest received by it or by reference to the Letters of Credit,
by an amount deemed material by such Lender;
and the result of any of the foregoing is to increase the cost to that Lender of
making, renewing or maintaining its Loans, L/C Interests, or Letters of Credit
or to reduce any amount received under this Agreement, then, within fifteen (15)
days after receipt by the Borrower of written demand by such Lender pursuant to
Section 4.5, the Borrower shall pay such Lender that portion of such increased
expense incurred or reduction in an amount received which such Lender determines
is attributable to making, funding and maintaining its Loans, L/C Interests,
Letters of Credit and its Revolving Loan Commitment.
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4.2 Changes in Capital Adequacy Regulations. If a Lender determines (i) the
amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a "CHANGE" (as defined below), and (ii) such
increase in capital will result in an increase in the cost to such Lender of
maintaining its Loans, L/C Interests, the Letters of Credit or its obligation to
make Loans hereunder, then, within fifteen (15) days after receipt by the
Borrower of written demand by such Lender pursuant to Section 4.5, the Borrower
shall pay such Lender the amount necessary to compensate for any shortfall in
the rate of return on the portion of such increased capital which such Lender
determines is attributable to this Agreement, its Loans, its L/C Interests, the
Letters of Credit or its obligation to make Loans hereunder (after taking into
account such Lender's policies as to capital adequacy). "CHANGE" means (i) any
change after the date of this Agreement in the "Risk-Based Capital Guidelines"
(as defined below) excluding, for the avoidance of doubt, the effect of any
phasing in of such Risk-Based Capital Guidelines or any other capital
requirements passed prior to the date hereof, or (ii) any adoption of or change
in any other law, governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having the force of law)
after the date of this Agreement and having general applicability to all banks
and financial institutions within the jurisdiction in which such Lender operates
which affects the amount of capital required or expected to be maintained by any
Lender or any Lending Installation or any corporation controlling any Lender.
"RISK-BASED CAPITAL GUIDELINES" means (i) the risk-based capital guidelines in
effect in the United States on the date of this Agreement, including transition
rules, and (ii) the corresponding capital regulations promulgated by regulatory
authorities outside the United States implementing the July 1988 report of the
Basle Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
4.3 Availability of Types of Advances. If (i) any Lender determines that
maintenance of its Eurocurrency Rate Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation or directive, whether or not
having the force of law, or (ii) the Required Lenders determine that (x)
deposits of a type, currency or maturity appropriate to match fund Eurocurrency
Rate Advances are not available or (y) the interest rate applicable to a
Eurocurrency Rate Advance or Alternate Currency Advance does not accurately
reflect the cost of making or maintaining such an Advance, then the Agent shall
suspend the availability of the affected Type of Advance and, in the case of any
occurrence set forth in clause (i), require any Advances of the affected Type to
be repaid or converted into another Type.
4.4 Funding Indemnification. Subject to Sections 2.5(B)(i), (ii), and
(iii), if any payment of a Eurocurrency Rate Advance occurs on a date which is
not the last day of the applicable Interest Period, whether because of
acceleration, prepayment, or otherwise, or a Eurocurrency Rate Advance is not
made on the date specified by the Borrower for any reason other than default by
the Lenders, the Borrower indemnifies each Lender for any loss or cost incurred
by it resulting therefrom, including, without limitation, any loss or cost in
liquidating or employing deposits acquired to fund or maintain the Eurocurrency
Rate Advance. In connection
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with any assignment by any Lender of any portion of the Loans made pursuant to
Section 13.3 and made during the Syndication Period, and if, notwithstanding the
provisions of Section 2.4, the Borrower has requested and the Agent has
consented to the use of the Eurocurrency Rate, the Borrower shall be deemed to
have repaid all outstanding Eurocurrency Rate Advances as of the effective date
of such assignment and reborrowed such amount as a Floating Rate Advance and/or
Eurocurrency Rate Advance (chosen in accordance with the provisions of Section
2.4) and the indemnification provisions under this Section 4.4 shall apply.
4.5 Lender Statements; Survival of Indemnity. If reasonably possible, each
Lender shall designate an alternate Lending Installation with respect to its
Eurocurrency Rate Loans to reduce any liability of the Borrower to such Lender
under Sections 4.1 and 4.2 or to avoid the unavailability of a Type of Advance
under Section 4.3, so long as such designation is not disadvantageous to such
Lender. Each Lender requiring compensation pursuant to Section 2.15(E) or to
this Article IV shall use its reasonable efforts to notify the Borrower and the
Agent in writing of any Change, law, policy, rule, guideline or directive giving
rise to such demand for compensation not later than ninety (90) days following
the date upon which the responsible account officer of such Lender knows or
should have known of such Change, law, policy, rule, guideline or directive. Any
demand for compensation pursuant to this Article IV shall be in writing and
shall state the amount due, if any, under Section 4.1, 4.2 or 4.4 and shall set
forth in reasonable detail the calculations upon which such Lender determined
such amount. Such written demand shall be rebuttably presumed correct for all
purposes. Determination of amounts payable under such Sections in connection
with a Eurocurrency Rate Loan shall be calculated as though each Lender funded
its Eurocurrency Rate Loan through the purchase of a deposit of the type,
currency and maturity corresponding to the deposit used as a reference in
determining the Eurocurrency Rate applicable to such Loan, whether in fact that
is the case or not. The obligations of the Borrower under Sections 4.1, 4.2 and
4.4 shall survive payment of the Obligations and termination of this Agreement.
ARTICLE V:
CONDITIONS PRECEDENT
--------------------
5.1 Initial Advances and Letters of Credit. The Lenders shall not be
required to make the initial Loans or issue any Letters of Credit unless (i)
such initial Loans are made not later than May 31, 1999; and (ii) (x) with
respect to Loans in an amount up to $110,000,000 made hereunder to fund the
Stock Acquisition pursuant to the Tender Offer, the Borrower has furnished to
the Agent evidence reasonably satisfactory to the Agent that the total cash
consideration paid for the Capital Stock of the Target and purchased by the
Borrower and its Subsidiaries pursuant to the Tender Offer shall not exceed
$110,000,000 in the aggregate; and (y) with respect to all other Loans and
Letters of Credit, the Borrower has furnished to the Agent each of the
following, with sufficient copies for the Lenders, all in form and substance
satisfactory to the Agent and the Lenders:
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(1) Copies of the Certificate of Incorporation of the Borrower,
together with all amendments and a certificate of good standing, both certified
by the appropriate governmental officer in its jurisdiction of incorporation;
(2) Copies, certified by the Secretary or Assistant Secretary of the
Borrower, of its By-Laws and of its Board of Directors' resolutions (and
resolutions of other bodies, if any are deemed necessary by counsel for any
Lender) authorizing the execution of the Loan Documents;
(3) An incumbency certificate, executed by the Secretary or Assistant
Secretary of the Borrower, which shall identify by name and title and bear the
signature of the officers of the Borrower authorized to sign the Loan Documents
and to make borrowings hereunder, upon which certificate the Lenders shall be
entitled to rely until informed of any change in writing by the Borrower;
(4) A certificate, in form and substance satisfactory to the Agent,
signed by the chief financial officer of the Borrower, stating that on the date
of this Agreement all the representations in this Agreement are true and correct
in all material respects (unless such representation and warranty is made as of
a specific date, in which case, such representation and warranty shall be true
in all material respects as of such date) and no Default or Unmatured Default
has occurred and is continuing;
(5) The written opinions of each opinion of the Borrower's US counsel
and the Borrower's UK counsel, addressed to the Agent and the Lenders, in
substantially the forms attached hereto as Exhibit E;
(6) The Agent shall have received a copy of any fairness opinion, if
one is obtained, prepared by the Borrower's investment bankers and addressed to
the Board of Directors of the Borrower relating to the fairness, from a
financial point of view, of the consideration to be received by existing
shareholders of the Borrower pursuant to the Stock Acquisition;
(7) Evidence reasonably satisfactory to the Agent that the Borrower
and each of its Subsidiaries (a) has made an assessment of the Year 2000 Issues;
(b) has a program from remediating the Year 2000 Issues, including a timetable
and budget of anticipated costs; and (c) has source of funds as required in such
budget;
(8) Evidence satisfactory to the Agent that (i) all conditions
precedent to the consummation of the Stock Acquisition have been satisfied or
waived with the approval of the Agent (such approval not to be unreasonably
withheld), and (ii) the Stock Acquisition has been approved by all necessary
corporate action of the Borrower's, its Subsidiaries' and the Target's Board of
Directors and shareholders;
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(9) Evidence reasonably satisfactory to the Agent that all required
governmental approvals related to the Stock Acquisition have been obtained and
all related filings made and any applicable waiting periods shall have expired
or been terminated;
(10) Evidence reasonably satisfactory to the Agent that there exists
no injunction or temporary restraining order which, in the reasonable judgment
of the Agent, would prohibit the making of the Loans or the consummation of the
Stock Acquisition and the other transactions contemplated by the Transaction
Documents or any litigation seeking such an injunction or restraining order;
(11) Evidence reasonably satisfactory to the Agent that the total cash
consideration paid for the Capital Stock of the Target and purchased by the
Borrower and its Subsidiaries pursuant to the Tender Offer shall not exceed
$110,000,000 in the aggregate;
(12) Such other documents as the Agent or any Lender or its counsel
may have reasonably requested, including, without limitation, all of the
documents reflected on the List of Closing Documents attached as Exhibit F to
this Agreement;
(13) With respect to the initial Alternate Currency Loan made to the
UK Subsidiary, the Alternate Currency Bank shall have received originals and/or
copies, as applicable, of all filings required to be made establishing to the
Alternate Currency Bank's satisfaction that the Alternate Currency Bank and each
other Lender is entitled to receive payments in respect of the Alternate
Currency Loans made hereunder without deduction or withholding of any English
taxes;
(14) The Agent shall have received opinions of value, solvency and
other appropriate factual information and advice in form and substance
reasonably satisfactory to it and from the chief financial officer of the
Borrower supporting the conclusions that after giving effect to the Stock
Acquisition, the Borrower and its Subsidiaries on a consolidated basis is
Solvent and will be Solvent subsequent to incurring the indebtedness
contemplated under the Transaction Documents, will be able to pay its debts and
liabilities as they become due and will not be left with unreasonably small
working capital for general corporate purposes;
(15) Evidence satisfactory to the Agent that the Borrower has paid to
the Agent and the Arranger the fees agreed to in the fee letter dated January
19, 1999, among the Agent, the Arranger and the Borrower.
5.2 Each Advance and Letter of Credit. The Lenders shall not be required to
make any Advance, or issue any Letter of Credit, unless on the applicable
Borrowing Date, or in the case of a Letter of Credit, the date on which the
Letter of Credit is to be issued:
(i) There exists no Default or Unmatured Default;
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(ii) The representations and warranties contained in Article VI
are true and correct in all material respects as of such Borrowing Date
(unless such representation and warranty is made as of a specific date, in
which case, such representation and warranty shall be true in all material
respects as of such date) except for changes in the Schedules to this
Agreement reflecting transactions permitted by or not in violation of this
Agreement or reflecting changes made on or prior to the Closing Date that
are not reasonably expected to evidence a Material Adverse Effect; and
(iii) (x) The Revolving Credit Obligations do not, and after
making such proposed Advance or issuing such Letter of Credit would not,
exceed the Aggregate Revolving Loan Commitment, and (y) the aggregate
outstanding principal Dollar Amount of all Eurocurrency Rate Advances in
currencies other than Dollars does not and would not exceed the Maximum
Eurocurrency Amount.
Each Borrowing/Conversion/Continuation Notice with respect to each such
Advance and the letter of credit application with respect to each Letter of
Credit shall constitute a representation and warranty by the Borrower that the
conditions contained in Sections 5.2(i) and (ii) have been satisfied. Any Lender
may require a duly completed officer's certificate in substantially the form of
Exhibit G hereto and/or a duly completed compliance certificate in substantially
the form of Exhibit H hereto as a condition to making an Advance.
ARTICLE VI:
REPRESENTATIONS AND WARRANTIES
------------------------------
In order to induce the Agent and the Lenders to enter into this Agreement
and to make the Loans and the other financial accommodations to the Borrower and
to issue the Letters of Credit described herein, the Borrower represents and
warrants as follows to each Lender and the Agent as of the date of this
Agreement and on the Closing Date, giving effect to the consummation of the
transactions contemplated by the Transaction Documents on the Closing Date, and
thereafter on each date as required by Section 5.2:
6.1 Organization; Corporate Powers. The Borrower and each of its
Subsidiaries (i) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (ii) except in
respect to the failure of Chromart Corporation and Designer's Atelier, Inc. to
be qualified to do business in the state of New York, is duly qualified to do
business as a foreign corporation and is in good standing under the laws of each
jurisdiction in which failure to be so qualified and in good standing could not
reasonably be expected to have a Material Adverse Effect, and (iii) has all
requisite corporate power and authority to own, operate and encumber its
property and to conduct its business as presently conducted and as proposed to
be conducted.
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6.2 Authority.
(A) The Borrower and each of its Subsidiaries has the requisite
corporate power and authority to execute, deliver and perform each of the
Transaction Documents which are to be executed by it in connection with the
Stock Acquisition or which have been executed by it as required by this
Agreement and the other Loan Documents on or prior to Closing Date and (ii) to
file the Transaction Documents which must be filed by it in connection with the
Stock Acquisition or which have been filed by it as required by this Agreement,
the other Loan Documents or otherwise on or prior to the Closing Date with any
Governmental Authority.
(B) The execution, delivery, performance and filing, as the case may
be, of each of the Transaction Documents which must be executed or filed by the
Borrower or any of its Subsidiaries in connection with the Stock Acquisition or
which have been executed or filed as required by this Agreement, the other Loan
Documents or otherwise on or prior to the Closing Date and to which the Borrower
or any of its Subsidiaries is party, and the consummation of the transactions
contemplated thereby, have been duly approved by the respective boards of
directors and, if necessary, the shareholders of the Borrower and its
Subsidiaries, and such approvals have not been rescinded. No other corporate
action or proceedings on the part of the Borrower or its Subsidiaries are
necessary to consummate such transactions.
(C) Each of the Transaction Documents to which the Borrower or any of
its Subsidiaries is a party has been duly executed, delivered or filed, as the
case may be, by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms (except as enforceability
may be limited by bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally), is in full force and effect and no
material term or condition thereof has been amended, modified or waived from the
terms and conditions contained in the Transaction Documents delivered to the
Agent pursuant to Section 5.1 without the prior written consent of the Agent,
and the Borrower and its Subsidiaries have, and, to the best of the Borrower's
and its Subsidiaries' knowledge, all other parties thereto have, performed and
complied with all the terms, provisions, agreements and conditions set forth
therein and required to be performed or complied with by such parties on or
before the Closing Date, and no unmatured default, default or breach of any
covenant by any such party exists thereunder.
6.3 No Conflict; Governmental Consents. The execution, delivery and
performance of each of the Loan Documents and other Transaction Documents to
which the Borrower or any of its Subsidiaries is a party do not and will not (i)
conflict with the certificate or articles of incorporation or by-laws of the
Borrower or any such Subsidiary, (ii) constitute a tortious interference with
any Contractual Obligation of any Person or conflict with, result in a breach of
or constitute (with or without notice or lapse of time or both) a default under
any Requirement of Law (including, without limitation, any Environmental
Property Transfer Act) or Contractual Obligation of the Borrower or any such
Subsidiary, or require termination of any Contractual Obligation, except such
interference, breach, default or termination which individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect,
(iii) with respect
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to the Loan Documents, constitute a tortious interference with any Contractual
Obligation of any Person or conflict with, result in a breach of or constitute
(with or without notice or lapse of time or both) a default under any
Requirement of Law (including, without limitation, any Environmental Property
Transfer Act) or Contractual Obligation of the Borrower or any such Subsidiary,
or require termination of any Contractual Obligation, except such interference,
breach, default or termination which individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect, (iv) result in or
require the creation or imposition of any Lien whatsoever upon any of the
property or assets of the Borrower or any such Subsidiary, other than Liens
permitted or created by the Loan Documents, or (v) require any approval of the
Borrower's or any such Subsidiary's Board of Directors or shareholders except
such as have been obtained. Except as set forth on Schedule 6.3 to this
Agreement, the execution, delivery and performance of each of the Transaction
Documents to which the Borrower or any of its Subsidiaries is a party do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by any Governmental Authority, including under any
Environmental Property Transfer Act, except filings, consents or notices which
have been made, obtained or given, or which, if not made, obtained or given,
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect.
6.4 Financial Statements.
(A) The combined pro forma balance sheet, income statements and
statements of cash flow of the Borrower and its Subsidiaries, copies of which
are attached hereto as Schedule 6.4 to this Agreement, present on a pro forma
basis the financial condition of the Borrower and such Subsidiaries as of such
date, and reflect on a pro forma basis those liabilities reflected in the notes
thereto and resulting from consummation of the Stock Acquisition, and the other
transactions contemplated by this Agreement, and the payment or accrual of all
transaction costs payable on the Closing Date with respect to any of the
foregoing and demonstrate that, after giving effect to the Stock Acquisition,
the Borrower and its Subsidiaries can repay their debt and satisfy their other
obligations as and when due, and can comply with the requirements of this
Agreement. The projections and assumptions expressed in the pro forma financials
referenced in this Section 6.4(A) were prepared in good faith and represent
management's opinion based on the information available to the Borrower at the
time so furnished and, since the preparation thereof and up to the Closing Date,
there has occurred no change in the business, financial condition, operations,
or prospects of the Borrower or any of its Subsidiaries, or the Borrower and its
Subsidiaries taken as a whole which has had or could reasonably be expected to
have a Material Adverse Effect.
(B) Complete and accurate copies of the audited financial statements
and the audit report related thereto of the Borrower and its Subsidiaries as at
December 31, 1997 and December 31, 1996 have been delivered to the Agent.
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6.5 No Material Adverse Change. (a) Since December 31, 1997 up to the
Closing Date, and since September 30, 1998 up to the Closing Date, in either
case, there has occurred no change in the business, properties, condition
(financial or otherwise), performance or results of operations of the Borrower,
or the Borrower and its Subsidiaries taken as a whole or any other event which
has had or could reasonably be expected to have a Material Adverse Effect.
(b) Since the Closing Date, there has occurred no change in the
business, properties, condition (financial or otherwise), performance or results
of operations of the Borrower or the Borrower and its Subsidiaries taken as a
whole or any other event which has had or could reasonably be expected to have a
Material Adverse Effect.
6.6 Taxes.
(A) Tax Examinations. All material deficiencies which have been
asserted against the Borrower or any of the Borrower's Subsidiaries as a result
of any federal, state, local or foreign tax examination for each taxable year in
respect of which an examination has been conducted have been fully paid or
finally settled or are being contested in good faith, and as of the Closing Date
no issue has been raised by any taxing authority in any such examination which,
by application of similar principles, reasonably can be expected to result in
assertion by such taxing authority of a material deficiency for any other year
not so examined which has not been reserved for in the Borrower's consolidated
financial statements to the extent, if any, required by Agreement Accounting
Principles. Except as permitted pursuant to Section 7.2(D), neither the Borrower
nor any of the Borrower's Subsidiaries anticipates any material tax liability
with respect to the years which have not been closed pursuant to applicable law.
(B) Payment of Taxes. All tax returns and reports of the Borrower and
its Subsidiaries required to be filed have been timely filed, and all material
taxes, assessments, fees and other governmental charges thereupon and upon their
respective property, assets, income and franchises which are shown in such
returns or reports to be due and payable have been paid except those items which
are being contested in good faith and have been reserved for in accordance with
Agreement Accounting Principles. The Borrower has no knowledge of any proposed
tax assessment against the Borrower or any of its Subsidiaries that will have or
could reasonably be expected to have a Material Adverse Effect.
6.7 Litigation; Loss Contingencies and Violations. Except as set forth in
Schedule 6.7 to this Agreement, there is no action, suit, proceeding,
arbitration or (to the Borrower's knowledge) investigation before or by any
Governmental Authority or private arbitrator pending or, to the Borrower's
knowledge, threatened against the Borrower or any of its Subsidiaries or any
property of any of them (i) challenging the validity or the enforceability of
any material provision of the Transaction Documents or (ii) which will have or
could reasonably be expected to have a Material Adverse Effect. There is no
material loss contingency within the meaning of Agreement Accounting Principles
which has not been reflected in the consolidated financial statements of the
Borrower prepared and delivered pursuant to Section 7.1(A) for the fiscal period
during which such material loss contingency was incurred. Neither the Borrower
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nor any of its Subsidiaries is (A) in violation of any applicable Requirements
of Law which violation will have or could reasonably be expected to have a
Material Adverse Effect, or (B) subject to or in default with respect to any
final judgment, writ, injunction, restraining order or order of any nature,
decree, rule or regulation of any court or Governmental Authority which will
have or could reasonably be expected to have a Material Adverse Effect.
6.8 Subsidiaries. Schedule 6.8 to this Agreement (i) contains a description
of the corporate structure of the Borrower, its Subsidiaries and any other
Person in which the Borrower or any of its Subsidiaries holds an Equity
Interest; and (ii) accurately sets forth (A) the correct legal name, the
jurisdiction of incorporation and the jurisdictions in which each of the
Borrower and the direct and indirect Subsidiaries of the Borrower are qualified
to transact business as a foreign corporation, (B) the authorized, issued and
outstanding shares of each class of Capital Stock of the Borrower and each of
its Subsidiaries and the owners of such shares (both as of the Closing Date and
on a fully-diluted basis), and (C) a summary of the direct and indirect
partnership, joint venture, or other Equity Interests, if any, of the Borrower
and each Subsidiary of the Borrower in any Person that is not a corporation.
Except as disclosed on Schedule 6.8, none of the issued and outstanding Capital
Stock of [the Borrower or] any of the Borrower's Subsidiaries is subject to any
vesting, redemption, or repurchase agreement, and there are no warrants or
options outstanding with respect to such Capital Stock; provided, that
notwithstanding the foregoing the Borrower may repurchase outstanding Capital
Stock of the Borrower in the amount not to exceed $4,000,000 in any fiscal year.
The outstanding Capital Stock of the Borrower and each of the Borrower's
Subsidiaries is duly authorized, validly issued, fully paid and nonassessable
and is not Margin Stock.
6.9 ERISA. Except as disclosed on Schedule 6.9, no Benefit Plan has
incurred any accumulated funding deficiency (as defined in Sections 302(a)(2) of
ERISA and 412(a) of the Code) whether or not waived. Neither the Borrower nor
any member of the Controlled Group has incurred any material liability to the
PBGC which remains outstanding other than the payment of premiums, and there are
no premium payments which have become due which are unpaid. Schedule B to the
most recent annual report filed with the IRS with respect to each Benefit Plan
and furnished to the Lenders is complete and accurate. Since the date of each
such Schedule B, there has been no material adverse change in the funding status
or financial condition of the Benefit Plan relating to such Schedule B. Neither
the Borrower nor any member of the Controlled Group has (i) failed to make a
required contribution or payment to a Multiemployer Plan or (ii) made a complete
or partial withdrawal under Sections 4203 or 4205 of ERISA from a Multiemployer
Plan. Neither the Borrower nor any member of the Controlled Group has failed to
make a required installment or any other required payment under Section 412 of
the Code on or before the due date for such installment or other payment.
Neither the Borrower nor any member of the Controlled Group is required to
provide security to a Benefit Plan under Section 401(a)(29) of the Code due to a
Plan amendment that results in an increase in current liability for the plan
year. Except as set forth on Schedule 6.9, neither the Borrower nor any of its
Subsidiaries maintains or contributes to any employee welfare benefit plan
within the meaning of Section 3(1) of ERISA which provides benefits to employees
after termination of employment other than as required by Section 601 of ERISA.
Each Plan which is intended to be
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qualified under Section 401(a) of the Code as currently in effect is so
qualified in all material respects, and each trust related to any such Plan is
exempt from federal income tax under Section 501(a) of the Code as currently in
effect. The Borrower and all Subsidiaries are in compliance in all material
respects with the responsibilities, obligations and duties imposed on them by
ERISA and the Code with respect to all Plans. Neither the Borrower nor any of
its Subsidiaries nor any fiduciary of any Plan has engaged in a nonexempt
prohibited transaction described in Sections 406 of ERISA or 4975 of the Code
which could reasonably be expected to subject the Borrower to liability in
excess of $5,000,000. Neither the Borrower nor any member of the Controlled
Group has taken or failed to take any action which would constitute or result in
a Termination Event, which action or inaction could reasonably be expected to
subject the Borrower or any of its Subsidiaries to liability, individually or in
the aggregate, in excess of $5,000,000. Neither the Borrower nor any Subsidiary
is subject to any liability under Sections 4063, 4064, 4069, 4204 or 4212(c) of
ERISA and no other member of the Controlled Group is subject to any liability
under Sections 4063, 4064, 4069, 4204 or 4212(c) of ERISA which could reasonably
be expected to subject the Borrower or any of its Subsidiaries to liability,
individually or in the aggregate, in excess of $5,000,000 (other than
liabilities of any ERISA affiliate which could not, by operation of law or
otherwise, become a liability of the Borrower or any Subsidiary). Except as set
forth on Schedule 6.9, neither the Borrower nor any of its Subsidiaries has, by
reason of the transactions contemplated hereby, any obligation to make any
payment to any employee pursuant to any Plan or existing contract or
arrangement.
6.10 Accuracy of Information. To the knowledge of the Borrower, the
information, exhibits and reports furnished by or on behalf of the Borrower and
any of its Subsidiaries to the Agent or to any Lender in connection with the
negotiation of, or compliance with, the Loan Documents, the representations and
warranties of the Borrower and its Subsidiaries contained in the Loan Documents,
and all certificates and documents delivered to the Agent and the Lenders
pursuant to the terms thereof, taken as a whole, do not contain as of the date
thereof any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained herein or therein, in light
of the circumstances under which they were made, not misleading in any material
respect.
6.11 Securities Activities. Neither the Borrower nor any of its
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
6.12 Material Agreements. Neither the Borrower nor any Subsidiary is a
party to any Contractual Obligation which, as of the Closing Date or as of the
date on which such Contractual Obligation was incurred individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect.
Neither Borrower nor any Subsidiary is subject to any charter or other corporate
restriction which individually or in the aggregate has had or could reasonably
be expected to have a Material Adverse Effect. Neither the Borrower nor any of
its Subsidiaries has received written notice that (i) it is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any Contractual Obligation applicable to it, or (ii) any
condition exists which, with the giving of notice or the lapse of time or both,
would constitute a default with respect to any such Contractual Obligation, in
each case,
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except where such default or defaults, if any, individually or in the aggregate
could not reasonably be expected to have a Material Adverse Effect.
6.13 Compliance with Laws. The Borrower and its Subsidiaries are in
compliance with all Requirements of Law applicable to them and their respective
businesses, in each case where the failure to so comply individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect.
6.14 Assets and Properties. The Borrower and each of its Subsidiaries has
good and marketable title to all of its assets and properties (tangible and
intangible, real or personal) owned by it or a valid leasehold interest in all
of its leased assets (except insofar as marketability may be limited by any laws
or regulations of any Governmental Authority affecting such assets), and all
such assets and property are free and clear of all Liens, except Liens permitted
under Section 7.3(C). Substantially all of the assets and properties owned by,
leased to or used by the Borrower and/or each such Subsidiary of the Borrower
are in adequate operating condition and repair, ordinary wear and tear excepted.
Neither this Agreement nor any other Transaction Document, nor any transaction
contemplated under any such agreement, will affect any right, title or interest
of the Borrower or such Subsidiary in and to any of such assets in a manner that
could reasonably be expected to have a Material Adverse Effect.
6.15 Statutory Indebtedness Restrictions. Neither the Borrower nor any of
its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, or the
Investment Company Act of 1940, or any other federal or state statute or
regulation which limits its ability to incur indebtedness or its ability to
consummate the transactions contemplated hereby or in connection with the Stock
Acquisition.
6.16 Insurance. Schedule 6.16 to this Agreement accurately sets forth as of
the Closing Date all insurance policies and programs currently in effect with
respect to the respective properties and assets and business of the Borrower and
its Subsidiaries, specifying, for each such policy and program, (i) the amount
thereof, (ii) the risks insured against thereby, (iii) the name of the insurer
and each insured party thereunder, (iv) the policy or other identification
number thereof, (v) the expiration date thereof, (vi) the annual premium with
respect thereto, and (vii) any reserves relating to any self-insurance program
that is in effect. Such insurance policies and programs reflect coverage that is
reasonably consistent with prudent industry practice.
6.17 Labor Matters.
As of the Closing Date, no attempt to organize the employees of the
Borrower, and no labor disputes, strikes or walkouts affecting the operations of
the Borrower or any of its Subsidiaries, is pending, or, to the Borrower's
knowledge, threatened, planned or contemplated.
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6.18 Stock Acquisition. As of the Closing Date and immediately prior to the
making of the initial Loans:
(i) the offer to purchase in respect of the Tender Offer is in
full force and effect, no material breach, default or waiver of any term or
provision thereof by the Borrower or any of its Subsidiaries or, to the
best of the Borrower's knowledge, the other parties thereto, has occurred
(except for such breaches, defaults and waivers, if any, consented to in
writing by the Agent) and no action has been taken by any competent
authority which restrains, prevents or imposes any material adverse
condition upon, or seeks to restrain, prevent or impose any material
adverse condition upon, the Stock Acquisition;
(ii) except as set forth in Schedule 6.18 to this Agreement, all
conditions precedent to, and all consents necessary to permit, the funding
of the Stock Acquisition have been satisfied or waived with the written
approval of the Agent (such approval not to be unreasonably withheld).
6.19 Environmental Matters. (A) Except as disclosed on Schedule 6.19 to
this Agreement
(i) the operations of the Borrower and its Subsidiaries comply in
all material respects with Environmental, Health or Safety Requirements of
Law;
(ii) the Borrower and its Subsidiaries have all permits, licenses
or other authorizations required under Environmental, Health or Safety
Requirements of Law and are in material compliance with such permits;
(iii) neither the Borrower, any of its Subsidiaries nor any of
their respective present property or operations, or, to the Borrower's or
any of its Subsidiaries' knowledge, any of their respective past property
or operations, are subject to or the subject of, any investigation known to
the Borrower or any of its Subsidiaries, any judicial or administrative
proceeding, order, judgment, decree, settlement or other agreement
respecting: (A) any material violation of Environmental, Health or Safety
Requirements of Law; (B) any remedial action; or (C) any material claims or
liabilities arising from the Release or threatened Release of a Contaminant
into the environment;
(iv) there is not now, nor to the Borrower's or any of its
Subsidiaries' knowledge has there ever been, on or in the property of the
Borrower or any of its Subsidiaries any landfill, waste pile, underground
storage tanks, aboveground storage tanks, surface impoundment or hazardous
waste storage facility of any kind, any polychlorinated biphenyls (PCBs)
used in hydraulic oils, electric transformers or other equipment, or any
asbestos containing material; and
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(v) to the knowledge of the Borrower or any of its Subsidiaries,
neither the Borrower nor any of its Subsidiaries has any material
Contingent Obligation in connection with any Release or threatened Release
of a Contaminant into the environment.
(B) For purposes of this Section 6.19 "material" means any
noncompliance or basis for liability which could reasonably be likely to subject
the Borrower or any of its Subsidiaries to liability, individually or in the
aggregate, in excess of $5,000,000.
6.20 Solvency. After giving effect to (i) the Loans to be made on the
Closing Date or such other date as Loans requested hereunder are made, (ii) the
other transactions contemplated by this Agreement and the other Transaction
Documents and (iii) the payment and accrual of all transaction costs with
respect to the foregoing, the Borrower and its Subsidiaries taken as a whole are
Solvent.
6.21 Year 2000 Issues. Each of the Borrower and its Subsidiaries has made
an assessment of the Year 2000 Issues and has a program for remediating the Year
2000 Issues on a timely basis. Based on this assessment and program, the
Borrower does not reasonably anticipate any Material Adverse Effect on its
Subsidiaries' operations, business or financial condition as a result of Year
2000 Issues.
6.22 Representations and Warranties of UK Subsidiary. UK Subsidiary
represents and warrants to the Lenders that:
(a) Corporate Existence and Standing. UK Subsidiary is a company duly
formed and validly existing under the laws of England and has all requisite
authority to conduct its business as it is now being conducted except where the
failure to have such requisite authority would not have a material adverse
effect on UK Subsidiary.
(b) Authorization and Validity. UK Subsidiary has the corporate power
and authority and legal right to execute and deliver the Loan Documents to which
it is a party and to perform its obligations thereunder. The execution and
delivery by UK Subsidiary of the Loan Documents to which it is a party and the
performance by it of its obligations thereunder have been duly authorized by
proper corporate proceedings, and such Loan Documents constitute legal, valid
and binding obligations of UK Subsidiary enforceable against UK Subsidiary in
accordance with their respective terms, except as enforceability may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights and general equitable principles.
(c) No Conflict; Government Consent. Neither the execution and
delivery by UK Subsidiary of the Loan Documents to which it is a party, nor the
consummation by it of the transactions therein contemplated to be consummated by
it, nor compliance by UK Subsidiary with the provisions thereof will violate any
law, rule, regulation, order, writ, judgment, injunction, decree or award
binding on UK Subsidiary or any of its Subsidiaries or UK
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Subsidiary's or any of its Subsidiaries' memoranda or articles of association or
the provisions of any indenture, instrument or agreement to which UK Subsidiary
or any of its Subsidiaries is a party or is subject, or by which it, or its
property, is bound, or conflict with or constitute a default thereunder, or
result in the creation or imposition of any lien in, of or on the property of UK
Subsidiary or any of its Subsidiaries pursuant to the terms of any such
indenture, instrument or agreement in any such case which violation, conflict,
default, creation or imposition could reasonably be expected to have a material
adverse effect on UK Subsidiary. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any governmental agency is required to authorize, or is required
in connection with the execution, delivery and performance of, or the legality,
validity, binding effect or enforceability of, any of the Loan Documents.
(d) Filing. To ensure the enforceability or admissibility in evidence
of this Agreement of UK Subsidiary in the United Kingdom, it is not necessary
that this Agreement of UK Subsidiary or any other document be filed or recorded
with any court or other authority in the United Kingdom or that any stamp or
similar tax be paid to or in respect of this Agreement of UK Subsidiary. The
qualification by any Lender or the Agent for admission to do business under the
laws of the United Kingdom does not constitute a condition to, and the failure
to so qualify does not affect, the exercise by any Lender or the Agent of any
right, privilege, or remedy afforded to any Lender or the Agent in connection
with the Loan Documents to which UK Subsidiary is a party or the enforcement of
any such right, privilege, or remedy against UK Subsidiary. The performance by
any Lender or the Agent of any action required or permitted under the Loan
Documents will not (i) violate any law or regulation of the United Kingdom or
any political subdivision thereof, (ii) result in any tax or other monetary
liability to such party pursuant to the laws of the United Kingdom or political
subdivision or taxing authority thereof (provided that, should any such action
result in any such tax or other monetary liability to the Lender or the Agent,
the Borrower hereby agrees to indemnify such Lender or the Agent, as the case
may be, against (x) any such tax or other monetary liability and (y) any
increase in any tax or other monetary liability which results from such action
by such Lender or the Agent and, to the extent the Borrower makes such
indemnification, the incurrence of such liability by the Agent or any Lender
will not constitute a Default) or (iii) violate any rule or regulation of any
federation or organization or similar entity of which the United Kingdom is a
member.
(e) No Immunity. Neither UK Subsidiary nor any of its assets is
entitled to immunity from suit, execution, attachment or other legal process. UK
Subsidiary's execution and delivery of the Loan Documents to which it is a party
constitute, and the exercise of its rights and performance of and compliance
with its obligations under such Loan Documents will constitute, private and
commercial acts done and performed for private and commercial purposes.
(f) Application of Representations and Warranties. It is understood
and agreed by the parties hereto that the representations and warranties of the
UK Subsidiary in this Section 6.22 shall only be applicable to the UK Subsidiary
on and after the Closing Date.
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6.23 Representations and Warranties of Australian Subsidiary. Australian
Subsidiary represents and warrants to the Lenders that:
(a) Corporate Existence and Standing. Australian Subsidiary is a
limited liability company duly incorporated and validly existing under the laws
of Australia and has all requisite authority to conduct its business as it is
now being conducted except where the failure to have such requisite authority
would not have a material adverse effect on Australian Subsidiary.
(b) Authorization and Validity. Australian Subsidiary has the
corporate power and authority and legal right to execute and deliver the Loan
Documents to which it is a party and to perform its obligations thereunder. The
execution and delivery by Australian Subsidiary of the Loan Documents to which
it is a party and the performance by it of its obligations thereunder have been
duly authorized by proper corporate proceedings, and such Loan Documents
constitute legal, valid and binding obligations of Australian Subsidiary
enforceable against Australian Subsidiary in accordance with their respective
terms, except as enforceability may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally and
general equitable principles.
(c) No Conflict; Government Consent. Neither the execution and
delivery by Australian Subsidiary of the Loan Documents to which it is a party,
nor the consummation by it of the transactions therein contemplated to be
consummated by it, nor compliance by Australian Subsidiary with the provisions
thereof will violate any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on Australian Subsidiary or any of its
Subsidiaries or Australian Subsidiary's or any of its Subsidiaries' memoranda or
articles of association or the provisions of any indenture, instrument or
agreement to which Australian Subsidiary or any of its Subsidiaries is a party
or is subject, or by which it, or its property, is bound, or conflict with or
constitute a default thereunder, or result in the creation or imposition of any
lien in, of or on the property of Australian Subsidiary or any of its
Subsidiaries pursuant to the terms of any such indenture, instrument or
agreement in any such case which violation, conflict, default, creation or
imposition could reasonably be expected to have a material adverse effect on
Australian Subsidiary. No order, consent, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption by, any
governmental agency is required to authorize, or is required in connection with
the execution, delivery and performance of, or the legality, validity, binding
effect or enforceability of, any of the Loan Documents.
(d) Filing. To ensure the enforceability or admissibility in evidence
of this Agreement of Australian Subsidiary in Australia, it is not necessary
that this Agreement of Australian Subsidiary or any other document be filed or
recorded with any court or other authority in Australia or that any stamp or
similar tax be paid to or in respect of this Agreement of Australian Subsidiary.
The qualification by any Lender or the Agent for admission to do business under
the laws of Australia does not constitute a condition to, and the failure to so
qualify does not affect, the exercise by any Lender or the Agent of any right,
privilege, or remedy afforded to any Lender or the Agent in connection with the
Loan Documents to which
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Australian Subsidiary is a party or the enforcement of any such right,
privilege, or remedy against Australian Subsidiary. The performance by any
Lender or the Agent of any action required or permitted under the Loan Documents
will not (i) violate any law or regulation of Australia or any political
subdivision thereof, (ii) result in any tax or other monetary liability to such
party pursuant to the laws of Australia or political subdivision or taxing
authority thereof (provided that, should any such action result in any such tax
or other monetary liability to the Lender or the Agent, the Borrower hereby
agrees to indemnify such Lender or the Agent, as the case may be, against (x)
any such tax or other monetary liability and (y) any increase in any tax or
other monetary liability which results from such action by such Lender or the
Agent and, to the extent the Borrower makes such indemnification, the incurrence
of such liability by the Agent or any Lender will not constitute a Default) or
(iii) violate any rule or regulation of any federation or organization or
similar entity of which Australia is a member.
(e) No Immunity. Neither Australian Subsidiary nor any of its assets
is entitled to immunity from suit, execution, attachment or other legal process.
Australian Subsidiary's execution and delivery of the Loan Documents to which it
is a party constitute, and the exercise of its rights and performance of and
compliance with its obligations under such Loan Documents will constitute,
private and commercial acts done and performed for private and commercial
purposes.
(f) Application of Representations and Warranties. It is understood
and agreed by the parties hereto that the representations and warranties of the
Australian Subsidiary in this Section 6.23 shall only be applicable to the
Australian Subsidiary, on and after the Closing Date.
6.24 Other Indebtedness. As of the Closing Date and immediately prior to
the making of the initial Loans, the Borrower has issued the Permitted
Subordinated Indebtedness and received the net proceeds thereof, and the
subordination provisions of the Permitted Subordinated Indebtedness are
enforceable against the holders thereof.
ARTICLE VII:
COVENANTS
---------
The Borrower covenants and agrees that so long as any Commitments are
outstanding and thereafter until payment in full of all of the Obligations
(other than contingent indemnity obligations) and termination of all Letters of
Credit, unless the Required Lenders shall otherwise give prior written consent:
7.1 Reporting. The Borrower shall:
(A) Financial Reporting. Furnish to the Agent (with sufficient copies
for each of the Lenders):
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(i) Quarterly Reports. As soon as practicable, and in any event
within fifty (50) days after the end of the first three fiscal quarters,
the consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as at the end of such period and the related consolidated and
consolidating statements of income and cash flows of the Borrower and its
Subsidiaries for such fiscal quarter and for the period from the beginning
of the then current fiscal year to the end of such fiscal quarter,
certified by the chief financial officer of the Borrower on behalf of the
Borrower as fairly presenting in all material respects the consolidated and
consolidating financial position of the Borrower and its Subsidiaries as at
the dates indicated and the results of their operations and cash flows for
the periods indicated in accordance with Agreement Accounting Principles,
subject to normal year-end audit adjustments.
(ii) Annual Reports. As soon as practicable, and in any event
within ninety-five (95) days after the end of each fiscal year, (a) the
consolidated balance sheet of the Borrower and its Subsidiaries as at the
end of such fiscal year and the related consolidated statements of income,
stockholders' equity and cash flows of the Borrower and its Subsidiaries
for such fiscal year, and in comparative form the corresponding figures for
the previous fiscal year along with consolidating schedules in form and
substance sufficient to calculate the financial covenants set forth in
Section 7.4, and (b) an audit report on the items listed in clause (a)
hereof (other than the consolidating schedules) of independent certified
public accountants of recognized national standing, which audit report
shall be unqualified and shall state that such financial statements fairly
present the consolidated financial position of the Borrower and its
Subsidiaries as at the dates indicated and the results of their operations
and cash flows for the periods indicated in conformity with Agreement
Accounting Principles and that the examination by such accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards. The deliveries made
pursuant to this clause (ii) shall be accompanied by (x) any management
letter prepared by the above-referenced accountants, and (y) a certificate
of such accountants that, in the course of their examination necessary for
their certification of the foregoing, they have obtained no knowledge of
any Default or Unmatured Default, or if, in the opinion of such
accountants, any Default or Unmatured Default shall exist, stating the
nature and status thereof.
(iii) Officer's Certificate. Together with each delivery of any
financial statement (a) pursuant to clauses (i) and (ii) of this Section
7.1(A), an Officer's Certificate of the Borrower, substantially in the form
of Exhibit G attached hereto and made a part hereof, stating that (x) the
representations and warranties of the Borrower contained in Article VI
hereof shall have been true and correct in all material respects (unless
such representation or warranty is made as of a specific date, in which
case, such representation and warranty shall be true in all material
respects as of such date) at all times during the period covered by such
financial statements and as of the date of such Officer's Certificate and
(y) as of the date of such Officer's Certificate no Default or Unmatured
Default exists, or if any Default or Unmatured Default exists, stating the
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nature and status thereof and (b) pursuant to clauses (i) and (ii) of this
Section 7.1(A), a compliance certificate, substantially in the form of
Exhibit H attached hereto and made a part hereof, signed by the Borrower's
chief financial officer, setting forth calculations for the period then
ended for Section 2.5(B), if applicable, which demonstrate compliance, when
applicable, with the provisions of Sections 7.3(A) through (G) and Section
7.4, and which calculate the Leverage Ratio for purposes of determining the
then Applicable Floating Rate Margin, Applicable Eurocurrency Margin and
Applicable Commitment Fee Percentage.
(B) Notice of Default. Promptly upon any of the chief executive
officer, chief operating officer, chief financial officer, treasurer or
controller of the Borrower obtaining actual knowledge (i) of any condition or
event which constitutes a Default or Unmatured Default, or becoming aware that
any Lender or Agent has given any written notice to any Authorized Officer with
respect to a claimed Default or Unmatured Default under this Agreement, or (ii)
that any Person has given any written notice to any Authorized Officer of the
Borrower or any Subsidiary of the Borrower or taken any other action with
respect to a claimed default or event or condition of the type referred to in
Section 8.1(E), the Borrower shall deliver to the Agent and the Lenders an
Officer's Certificate specifying (a) the nature and period of existence of any
such claimed default, Default, Unmatured Default, condition or event, (b) the
notice given or action taken by such Person in connection therewith, and (c)
what action the Borrower has taken, is taking and proposes to take with respect
thereto.
(C) Lawsuits. (i) Promptly upon the Borrower obtaining actual
knowledge of the institution of, or written threat of, any action, suit,
proceeding, governmental investigation or arbitration, by or before any
Governmental Authority, against or affecting the Borrower or any of its
Subsidiaries or any property of the Borrower or any of its Subsidiaries not
previously disclosed pursuant to Section 6.7, which action, suit, proceeding,
governmental investigation or arbitration exposes, or in the case of multiple
actions, suits, proceedings, governmental investigations or arbitrations arising
out of the same general allegations or circumstances which expose, in the
Borrower's reasonable judgment, the Borrower or any of its Subsidiaries to
liability in an amount aggregating $5,000,000 or more (exclusive of claims
covered by insurance policies of the Borrower or any of its Subsidiaries unless
the insurers of such claims have disclaimed coverage or reserved the right to
disclaim coverage on such claims and exclusive of claims covered by the
indemnity of a financially responsible indemnitor in favor of the Borrower or
any of its Subsidiaries unless the indemnitor has disclaimed or reserved the
right to disclaim coverage thereof), give written notice thereof to the Agent
and the Lenders and provide such other information as may be reasonably
available to enable each Lender and the Agent and its counsel to evaluate such
matters; and (ii) in addition to the requirements set forth in clause (i) of
this Section 7.1(C), upon request of the Agent or the Required Lenders, promptly
give written notice of the status of any action, suit, proceeding, governmental
investigation or arbitration covered by a report delivered pursuant to clause
(i) above and provide such other information as may be reasonably available to
it that would not jeopardize any attorney-client privilege by disclosure to the
Lenders to enable each Lender and the Agent and its counsel to evaluate such
matters.
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(D) ERISA Notices. Deliver or cause to be delivered to the Agent and
the Lenders, at the Borrower's expense, the following information and notices as
soon as reasonably possible, and in any event:
(i) (a) within ten (10) Business Days after the Borrower obtains
knowledge that a Termination Event has occurred, a written statement of the
chief financial officer of the Borrower describing such Termination Event
and the action, if any, which the Borrower has taken, is taking or proposes
to take with respect thereto, and when known, any action taken or
threatened by the IRS, DOL or PBGC with respect thereto and (b) within ten
(10) Business Days after any member of the Controlled Group obtains
knowledge that a Termination Event has occurred which could reasonably be
expected to subject the Borrower to liability in excess of $5,000,000, a
written statement of the chief financial officer of the Borrower describing
such Termination Event and the action, if any, which the member of the
Controlled Group has taken, is taking or proposes to take with respect
thereto, and when known, any action taken or threatened by the IRS, DOL or
PBGC with respect thereto;
(ii) within ten (10) Business Days after the Borrower or any of
its Subsidiaries obtains knowledge that a prohibited transaction (defined
in Sections 406 of ERISA and Section 4975 of the Code) has occurred, a
statement of the chief financial officer of the Borrower describing such
transaction and the action which the Borrower or such Subsidiary has taken,
is taking or proposes to take with respect thereto;
(iii) within ten (10) Business Days after the material increase
in the benefits of any existing Benefit Plan or the establishment of any
new Benefit Plan or the commencement of, or obligation to commence,
material contributions to any Benefit Plan or Multiemployer Plan to which
the Borrower or any member of the Controlled Group was not previously
contributing, notification of such increase, establishment, commencement
or obligation to commence and the amount of such contributions;
(iv) within ten (10) Business Days after the Borrower or any
of its Subsidiaries receives notice of any unfavorable determination letter
from the IRS regarding the qualification of a Plan under Section 401(a) of
the Code, copies of each such letter;
(v) within ten (10) Business Days after the establishment of any
material foreign employee benefit plan [(other than the establishment of a
defined contribution plan under English law within one hundred eighty (180)
days of the Closing Date)] or the commencement of, or obligation to
commence, material contributions to any foreign employee benefit plan to
which the Borrower or any Subsidiary was not previously contributing,
notification of such establishment, commencement or obligation to commence
and the amount of such contributions;
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(vi) within ten (10) Business Days after the filing thereof with
the DOL, IRS or PBGC, copies of each annual report (form 5500 series),
including Schedule B thereto, filed with respect to each Benefit Plan;
(vii) within ten (10) Business Days after receipt by the Borrower
or any member of the Controlled Group of each actuarial report for any
Benefit Plan or Multiemployer Plan and each annual report for any
Multiemployer Plan, copies of each such report;
(viii) within ten (10) Business Days after the filing thereof
with the IRS, a copy of each funding waiver request filed with respect to
any Benefit Plan and all communications received by the Borrower or a
member of the Controlled Group with respect to such request;
(ix) within ten (10) Business Days after receipt by the Borrower
or any member of the Controlled Group of the PBGC's intention to terminate
a Benefit Plan or to have a trustee appointed to administer a Benefit Plan,
copies of each such notice;
(x) within ten (10) Business Days after receipt by the Borrower
or any member of the Controlled Group of a notice from a Multiemployer Plan
regarding the imposition of withdrawal liability, copies of each such
notice;
(xi) within ten (10) Business Days after the Borrower or any
member of the Controlled Group fails to make a required installment or any
other required payment under Section 412 of the Code on or before the due
date for such installment or payment, a notification of such failure; and
(xii) within ten (10) Business Days after the Borrower or any
member of the Controlled Group knows or has reason to know that (a) a
Multiemployer Plan has been terminated, (b) the administrator or plan
sponsor of a Multiemployer Plan intends to terminate a Multiemployer Plan,
or (c) the PBGC has instituted or will institute proceedings under Section
4042 of ERISA to terminate a Multiemployer Plan.
For purposes of this Section 7.1(D), the Borrower, any of its Subsidiaries and
any member of the Controlled Group shall be deemed to know all facts known by
the administrator of any Plan of which the Borrower or any member of the
Controlled Group or such Subsidiary is the plan sponsor. In addition, for
purposes of this Section 7.1(D), "material" means any noncompliance or basis for
liability which could reasonably be likely to subject the Borrower or any of its
Subsidiaries to liability, individually or in the aggregate, in excess of
$5,000,000.
(E) Labor Matters. Notify the Agent and the Lenders in writing,
promptly upon an Authorized Officer of the Borrower learning of (i) any material
labor dispute to which the Borrower or any of its Subsidiaries may become a
party, including, without limitation, any strikes, lockouts or other disputes
relating to such Persons' plants and other facilities which
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could reasonably be expected to have a Material Adverse Effect and (ii) any
Worker Adjustment and Retraining Notification Act liability incurred with
respect to the closing of any plant or other facility of the Borrower or any of
its Subsidiaries.
(F) Other Indebtedness. Deliver to the Agent (i) a copy of each
regular report, notice or communication regarding potential or actual defaults
(including any accompanying officer's certificate) delivered by or on behalf of
the Borrower to the holders of funded Indebtedness with an aggregate outstanding
principal amount in excess of $5,000,000 pursuant to the terms of the agreements
governing such Indebtedness, such delivery to be made at the same time and by
the same means as such notice of default is delivered to such holders, and (ii)
a copy of each notice or other communication received by the Borrower from the
from the holders of funded Indebtedness with an aggregate outstanding principal
amount in excess of $5,000,000 regarding potential or actual defaults pursuant
to the terms of such Indebtedness, such delivery to be made promptly after such
notice or other communication is received by the Borrower.
(G) Other Reports. Deliver or cause to be delivered to the Agent and
the Lenders copies of (i) all financial statements, reports and notices, if any,
sent or made available generally by the Borrower to its securities holders or
filed with the Commission by the Borrower, and (ii) all notifications received
from the Commission by the Borrower or its Subsidiaries pursuant to the
Securities Exchange Act of 1934 and the rules promulgated thereunder. Borrower
shall include the Agent and the Lenders on its standard distribution lists for
all press releases made available generally by the Borrower or any of the
Borrower's Subsidiaries to the public concerning material developments in the
business of the Borrower or any such Subsidiary.
(H) Environmental Notices. As soon as possible and in any event within
twenty (20) days after receipt by the Borrower, a copy of (i) any notice or
claim to the effect that the Borrower or any of its Subsidiaries is or may be
liable to any Person as a result of the Release by the Borrower, any of its
Subsidiaries, or any other Person of any Contaminant into the environment, and
(ii) any notice alleging any violation of any Environmental, Health or Safety
Requirements of Law by the Borrower or any of its Subsidiaries if, in either
case, such notice or claim relates to an event which could reasonably be
expected to subject the Borrower and each of its Subsidiaries to liability
individually or in the aggregate in excess of $5,000,000.
(I) Other Information. Promptly upon receiving a request therefor from
the Agent, prepare and deliver to the Agent and the Lenders such other
information with respect to the Borrower, any of its Subsidiaries, or the
Collateral, including, without limitation, schedules identifying and describing
the Collateral and any dispositions thereof or any Asset Sale or Financing (and
the use of the Net Cash Proceeds thereof), as from time to time may be
reasonably requested by the Agent.
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7.2 Affirmative Covenants.
(A) Corporate Existence, Etc. Except as permitted pursuant to Section
7.3(I), the Borrower shall, and shall cause each of its Subsidiaries to, at all
times maintain its corporate existence and preserve and keep, or cause to be
preserved and kept, in full force and effect its rights and franchises material
to its businesses.
(B) Corporate Powers; Conduct of Business. The Borrower shall, and
shall cause each of its Subsidiaries to, qualify and remain qualified to do
business in each jurisdiction in which the nature of its business requires it to
be so qualified and where the failure to be so qualified will have or could
reasonably be expected to have a Material Adverse Effect. Borrower shall cause
Chromart Corporation and Designer's Atelier, Inc. to become qualified to do
business in the state of New York as promptly as commercially practical. The
Borrower will, and will cause each Subsidiary to, carry on and conduct its
business in substantially the same manner and in substantially the same fields
of enterprise as it is presently conducted.
(C) Compliance with Laws, Etc. The Borrower shall, and shall cause its
Subsidiaries to, (a) comply with all Requirements of Law and all restrictive
covenants affecting such Person or the business, properties, assets or
operations of such Person, and (b) obtain as needed all permits necessary for
its operations and maintain such permits in good standing unless failure to
comply or obtain such permits could not reasonably be expected to have a
Material Adverse Effect.
(D) Payment of Taxes and Claims; Tax Consolidation. The Borrower
shall pay, and cause each of its Subsidiaries to pay, (i) all material taxes,
assessments and other governmental charges imposed upon it or on any of its
properties or assets or in respect of any of its franchises, business, income or
property before any penalty or interest accrues thereon, and (ii) all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by law have or
may become a Lien (other than a Lien permitted by Section 7.3(C)) upon any of
the Borrower's or such Subsidiary's property or assets, prior to the time when
any penalty or fine shall be incurred with respect thereto; provided, however,
that no such taxes, assessments and governmental charges referred to in clause
(i) above or claims referred to in clause (ii) above (and interest, penalties or
fines relating thereto) need be paid if being contested in good faith by
appropriate proceedings diligently instituted and conducted and if such reserve
or other appropriate provision, if any, as shall be required in conformity with
Agreement Accounting Principles shall have been made therefor.
(E) Insurance. The Borrower shall maintain for itself and its
Subsidiaries, or shall cause each of its Subsidiaries to maintain in full force
and effect, the insurance policies and programs listed on Schedule 6.16 to this
Agreement or substantially similar policies and programs or other policies and
programs as reflect coverage that is reasonably consistent with prudent industry
practice for companies operating in the same or similar locations. The Borrowers
shall deliver to the Agent endorsements (x) to all "All Risk" physical damage
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insurance policies on all of the Borrowers' tangible real and personal property
and assets and business interruption insurance policies naming the Agent loss
payee, and (y) to all general liability and other liability policies naming the
Agent an additional insured. In the event the Borrower or any of its
Subsidiaries at any time or times hereafter shall fail to obtain or maintain any
of the policies or insurance required herein or to pay any premium in whole or
in part relating thereto, then the Agent, without waiving or releasing any
obligations or resulting Default hereunder, may at any time or times thereafter
(but shall be under no obligation to do so) obtain and maintain such policies of
insurance and pay such premiums and take any other action with respect thereto
which the Agent reasonably deems advisable. All sums so disbursed by the Agent
shall constitute part of the Obligations, payable as provided in this Agreement.
(F) Inspection of Property; Books and Records; Discussions. The
Borrower shall permit and cause each of the Borrower's Subsidiaries to permit,
any authorized representative(s) designated by either the Agent or any Lender to
visit and inspect any of the properties of the Borrower or any of its
Subsidiaries, to examine, audit, check and make copies of their respective
financial and accounting records, books, journals, orders, receipts and any
correspondence and other data relating to their respective businesses or the
transactions contemplated hereby (including, without limitation, in connection
with environmental compliance, hazard or liability), and to discuss their
affairs, finances and accounts with their officers all upon reasonable notice
and at such reasonable times during normal business hours, as often as may be
reasonably requested. The Borrower shall keep and maintain, and cause each of
the Borrower's Subsidiaries to keep and maintain, in all material respects,
proper books of record and account in which entries in conformity with Agreement
Accounting Principles shall be made of all dealings and transactions in relation
to their respective businesses and activities. If a Default has occurred and is
continuing, the Borrower, upon the Agent's request, shall provide copies of such
records to the Agent or its representatives.
(G) ERISA Compliance. The Borrower shall, and shall cause each of the
Borrower's Subsidiaries to, establish, maintain and operate all Plans to comply
in all material respects with the provisions of ERISA, the Code, all other
applicable laws, and the regulations and interpretations thereunder and the
respective requirements of the governing documents for such Plans.
(H) Maintenance of Property. The Borrower shall cause all property
used or useful in the conduct of its business or the business of any Subsidiary
to be maintained and kept in good condition, repair and working order and
supplied with all necessary equipment and shall cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as in
the judgment of the Borrower may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section 7.2(H) shall prevent the
Borrower from discontinuing the operation or maintenance of any of such property
if such discontinuance is, in the judgment of the Borrower, desirable in the
conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to the Agent or the Lenders.
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(I) Environmental Compliance. The Borrower and its Subsidiaries shall
comply with all Environmental, Health or Safety Requirements of Law, except
where noncompliance will not have or is not reasonably likely to subject the
Borrower or any of its Subsidiaries to liability, individually or in the
aggregate, in excess of $5,000,000.
(J) Use of Proceeds. The Borrower shall use the proceeds of the Term
Loans to fund the Tender Offer and for payment of expenses in connection with
the Tender Offer. The Borrower shall use the proceeds of the Revolving Loans to
(i) fund the Tender Offer and for payment of expenses in connection with the
Tender Offer and (ii) provide funds for the additional working capital needs and
other general corporate purposes of the Borrower and its Subsidiaries. The
Borrower will not, nor will it permit any Subsidiary to, use any of the proceeds
of the Loans to purchase or carry any Margin Stock or to make any Acquisition,
other than a Permitted Acquisition pursuant to Section 7.3(G).
(K) Subsidiary Guarantees and Pledges. (i) The Borrower will (a) if
the Aggregate Commitment shall be greater than $75,000,000 as of the Closing
Date, on or prior to the Closing Date deliver and cause each of its Domestic
Incorporated Subsidiaries to deliver an agreement evidencing the pledge, to the
Agent, for the benefit of the Holders of Secured Obligations, of all of the
Capital Stock of each Domestic Incorporated Subsidiary (and from and after the
Closing Date, within thirty (30) days after any Subsidiary has become a
Subsidiary of the Borrower, such additional pledge agreements as may be
requested by the Agent) and (b) cause each Domestic Incorporated Subsidiary to
execute the Guaranty (and from and after the Closing Date cause each Domestic
Incorporated Subsidiary to execute and deliver to the Agent, within twenty (20)
days after becoming a Subsidiary of the Borrower, an assumption agreement
pursuant to which it agrees to be bound by the terms and provisions of the
Subsidiary Guaranty (whereupon such Subsidiary shall become a "Guarantor" under
this Agreement)), and (c) deliver and cause such Subsidiaries to deliver
corporate resolutions, opinions of counsel, stock certificates, stock powers,
UCC financing statements with respect to the Capital Stock Collateral and such
other corporate documentation as the Agent may reasonably request, all in form
and substance reasonably satisfactory to the Agent.
(ii) If the Aggregate Commitment shall be greater than
$75,000,000 as of the Closing Date, on or prior to the Closing Date, the
Borrower shall deliver an agreement evidencing the pledge, to the Agent,
for the benefit of the Holders of Secured Obligations, of 65% of the
Capital Stock of each first-tier Foreign Incorporated Subsidiary (and from
and after the Closing date, within sixty (60) days after such Subsidiary
has become a Foreign Incorporated Subsidiary, such additional pledge
agreements as may be requested by the Agent), together, in each such case,
with corporate resolutions, opinions of counsel, stock certificates, stock
powers and such other corporate documentation as the Agent may reasonably
request, all in form and substance reasonably satisfactory to the Agent.
(iii) If the Aggregate Commitment shall be greater than
$75,000,000 as of the Closing date, if at any time any Foreign Incorporated
Subsidiary shall issue or
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cause to be issued Capital Stock, or warrants or options with respect to
its Capital Stock, such that the aggregate amount of the Capital Stock of
such Foreign Incorporated Subsidiary pledged to the Agent for the benefit
of the Holders of Secured Obligations is less than 65% of all of the
outstanding Capital Stock thereof, the Borrower shall (A) promptly notify
the Agent of such deficiency and (B) deliver or cause to be delivered any
agreements, instruments, certificates and other documents as the Agent may
reasonably request all in a form and substance reasonably satisfactory to
the Agent in order to cause all of the Capital Stock of such Foreign
Incorporated Subsidiary owned directly or indirectly by the Borrower (but
not in excess of 65% of all of the outstanding Capital Stock thereof) to be
pledged to the Agent for the benefit of the Holders of Secured Obligations.
(iv) Notwithstanding the foregoing, if the financial statements
delivered pursuant to Section 7.1(A)(i) and the compliance certificate
delivered therewith reflect that the Leverage Ratio of the Borrower shall
be less than 2.5 to 1.0 as at March 31, 2000, the Agent, upon the request
of the Borrower shall promptly release its Lien in favor of the Holders of
Secured Obligations on all of the Capital Stock Collateral, which release
is hereby expressly authorized by the Lenders pursuant to Section 11.12.
(L) Year 2000 Issues. The Borrower shall, and shall cause each of its
Subsidiaries to, take all actions reasonably necessary to ensure that the Year
2000 Issues will not have a Material Adverse Effect. The Borrower shall provide
the Agent and each of the Lenders information regarding the Borrower's and its
Subsidiaries' program to address Year 2000 Issues. The Borrower shall advise the
Agent if any Year 2000 Issues will have or would reasonably be expected to have
a Material Adverse Effect.
7.3 Negative Covenants.
(A) Indebtedness. Neither the Borrower nor any of its Subsidiaries
shall directly or indirectly create, incur, assume or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness, except:
(i) the Secured Obligations;
(ii) Permitted Existing Indebtedness and Permitted Refinancing
Indebtedness;
(iii) Indebtedness in respect of obligations secured by Customary
Permitted Liens;
(iv) Indebtedness constituting Contingent Obligations permitted
by Section 7.3(E);
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(v) Indebtedness arising from intercompany loans and advances (a)
from any Subsidiary to the Borrower or any wholly-owned Subsidiary or (b)
from the Borrower to any wholly-owned Domestic Incorporated Subsidiary or
(c) from the Borrower to any wholly-owned Foreign Incorporated Subsidiary;
provided, that if the Borrower is the obligor on such Indebtedness, such
Indebtedness shall be expressly subordinate to the payment in full in cash
of the Secured Obligations; provided, further, that the aggregate of all
Foreign Subsidiary Investments does not exceed the Permitted Foreign
Subsidiary Investment Amount at any time;
(vi) Indebtedness in respect of Hedging Obligations permitted
under Section 7.3(P);
(vii) secured or unsecured purchase money Indebtedness (including
Capitalized Leases) incurred by the Borrower or any of its Subsidiaries
after the Closing Date to finance the acquisition of fixed assets, if (1)
at the time of such incurrence, no Default or Unmatured default has
occurred and is continuing or would result from such incurrence, (2) such
Indebtedness has a scheduled maturity and is not due on demand, (3) such
Indebtedness does not exceed the lower of the fair market value or the cost
of the applicable fixed assets on the date acquired, (4) such Indebtedness
does not exceed $30,000,000 in the aggregate outstanding at any time, and
(5) any Lien securing such Indebtedness is permitted under Section 7.3(C)
(such Indebtedness being referred to herein as "PERMITTED PURCHASE MONEY
INDEBTEDNESS");
(viii) Indebtedness with respect to surety, appeal and
performance bonds obtained by the Borrower or any of its Subsidiaries in
the ordinary course of business;
(ix) Indebtedness incurred by the Borrower to the seller in any
Permitted Acquisition as part of the consideration therefor, provided that
such Indebtedness is unsecured and, if in excess of $10,000,000, is
subordinated to the Obligations on terms reasonably acceptable to the
Agent;
(x) additional indebtedness incurred by the Borrower and
Filtertek USA, Inc. (now known as Schawk USA, Inc.) under the "Note
Agreement" (as defined in the definition of "Term Loan Commitment herein)
in an aggregate principal amount, together with all other Indebtedness
thereunder, not to exceed $100,000,000 on terms acceptable to the Agent.
(xi) Permitted Subordinated Indebtedness and Permitted
Refinancing Indebtedness in respect thereof;
(xii) additional unsecured Indebtedness in an aggregate amount at
any time outstanding not exceeding $15,000,000.
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(B) Sales of Assets. Neither the Borrower nor any of its Subsidiaries
shall consummate any Asset Sale, except:
(i) licenses or sublicenses by the Borrower or its Subsidiaries
of software, customer lists, trademarks, service marks, patents, trade
names and copyrights and other intellectual property in the ordinary course
of business; provided, that such licenses or sublicenses shall not
interfere with the business of the Borrower or any such Subsidiary;
(ii) transfers of assets between the Borrower and any
wholly-owned Subsidiary of the Borrower or between wholly-owned
Subsidiaries of the Borrower not otherwise prohibited by this Agreement;
provided, that the aggregate of all Foreign Subsidiary Investments does not
exceed the Permitted Foreign Subsidiary Investment Amount at any time; and
(iii) sales, assignments, transfers, leases, conveyances or other
dispositions of other assets if such transaction (a) is for not less than
fair market value (as determined in good faith by the Borrower's board of
directors), and (b) when combined with all such other transactions (each
such transaction being valued at book value) (i) during the immediately
preceding twelve-month period, represents the disposition of not greater
than ten percent (10%) of the Borrower's Consolidated Tangible Assets at
the end of the fiscal year immediately preceding that in which such
transaction is proposed to be entered into, and (ii) during the period from
the Closing Date to the date of such proposed transaction, represents the
disposition of not greater than twenty-five percent (25%) of the Borrower's
Consolidated Tangible Assets at the end of the fiscal year immediately
preceding that in which such transaction is proposed to be entered into;
and
(iv) sales in connection with reorganization, restructuring and
rationalization of the Borrower and its Subsidiaries (including the
business purchased pursuant to the Tender Offer) the non-recurring expenses
related to which are charged to operating expenses during the first three
(3) fiscal years following the Closing Date up to amounts not to be in
excess of $25,000,000 on a pre-tax basis in the aggregate.
(C) Liens. Neither the Borrower nor any of its Subsidiaries shall
directly or indirectly create, incur, assume or permit to exist any Lien on or
with respect to any of their respective property or assets except:
(i) Liens created by the Loan Documents or otherwise securing the
Secured Obligations;
(ii) Permitted Existing Liens;
(iii) Customary Permitted Liens; and
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(iv) purchase money Liens (including the interest of a lessor
under a Capitalized Lease and Liens to which any property is subject at the
time of the Borrower's acquisition thereof) securing Permitted Purchase
Money Indebtedness; provided that such Liens shall not apply to any
property of the Borrower or its Subsidiaries other than that purchased or
subject to such Capitalized Lease.
(v) Liens with respect to property acquired by the Borrower or
any of its Subsidiaries after the Closing Date (and not created in
contemplation of such acquisition) pursuant to a Permitted Acquisition;
provided, that such Liens shall extend only to the property so acquired;
and
(vi) other Liens securing Indebtedness not to exceed $5,000,000
in the aggregate.
In addition, neither the Borrower nor any of its Subsidiaries shall become a
party to any agreement, note, indenture or other instrument, or take any other
action, which would prohibit the creation of a Lien on any of its properties or
other assets in favor of the Agent for the benefit of itself and the Holders of
Secured Obligations, as collateral for the Obligations; provided that any
agreement, note, indenture or other instrument in connection with Permitted
Purchase Money Indebtedness (including Capitalized Leases) may prohibit the
creation of a Lien in favor of the Agent for the benefit of itself and the
Holders of Secured Obligations on the items of property obtained with the
proceeds of such Permitted Purchase Money Indebtedness.
(D) Investments. Except to the extent permitted pursuant to
paragraph (G) below, neither the Borrower nor any of its Subsidiaries shall
directly or indirectly make or own any Investment except:
(i) Investments in cash and Cash Equivalents;
(ii) Permitted Existing Investments in an amount not greater
than the amount thereof on the Closing Date;
(iii) Investments in trade receivables or 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;
(iv) Investments consisting of deposit accounts maintained by the
Borrower;
(v) Investments consisting of non-cash consideration from a sale,
assignment, transfer, lease, conveyance or other disposition of property
permitted by Section 7.3(B);
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(vi) Investments consisting of (a) intercompany loans from any
Subsidiary of the Borrower to the Borrower or any other Subsidiary
permitted by Section 7.3(A)(v) and (b) intercompany loans from the Borrower
to its Subsidiaries; provided, that the aggregate of all Foreign Subsidiary
Investments made pursuant to this Section 7.3(D)(vi) shall not exceed
$25,000,000 at any time;
(vii) Investments constituting (x) repurchases of the Capital
Stock of the Borrower in an amount not to exceed $4,000,000 in any fiscal
year and (y) Permitted Acquisitions;
(viii) Investments constituting Indebtedness permitted by Section
7.3(A) or Contingent Obligations permitted by Section 7.3(E) or Restricted
Payments permitted by Section 7.3(F) or Capital Expenditures permitted by
Section 7.4(E);
(ix) Investments consisting of loans or advances made by any
party to the Loan Documents to employees and officers of the Borrower or
any of the Borrower's wholly-owned Domestic Incorporated Subsidiaries for
travel, entertainment and relocation expenses in the ordinary course of
business in an aggregate principal amount outstanding at any one time not
to exceed $2,000,000;
(x) Investments consisting of any right of the Borrower or its
wholly-owned Domestic Incorporated Subsidiaries to payment for goods sold
or for services rendered, whether or not it has been earned by performance;
and
(xi) Investments in addition to those referred to elsewhere in
this Section 7.3(D) in an amount not to exceed $10,000,000 in the aggregate
at any time outstanding;
provided, however, that the Investments described in clause (vii) above shall
not be permitted to be made at a time when either a Default or an Unmatured
Default which is not in the process of being cured shall have occurred and be
continuing or would result therefrom.
(E) Contingent Obligations. Neither the Borrower nor any of its
Subsidiaries shall directly or indirectly create or become or be liable with
respect to any Contingent Obligation, except: (i) recourse obligations resulting
from endorsement of negotiable instruments for collection in the ordinary course
of business; (ii) Permitted Existing Contingent Obligations; (iii) obligations,
warranties, guaranties and indemnities, not relating to Indebtedness of any
Person, which have been or are undertaken or made in the ordinary course of
business and not for the benefit of or in favor of an Affiliate of the Borrower
or such Subsidiary; (iv) Contingent Obligations with respect to surety, appeal
and performance bonds obtained by the Borrower or any Subsidiary in the ordinary
course of business, (v) Contingent Obligations of the Subsidiaries of the
Borrower under the Guaranty and the other Collateral Documents to
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which they are a party, (vi) obligations arising under or related to the
Transaction Documents, and (vii) Contingent Obligations in respect to earn-outs
or other similar forms of contingent purchase price payable in respect of
Permitted Acquisitions, and (viii) Contingent Obligations in respect of
representations and warranties customarily given in respect of Asset Sales
otherwise permitted hereunder.
(F) Restricted Payments. The Borrower shall not declare or make any
Restricted Payment, except Restricted Payments in an amount not to exceed
$12,000,000 in the aggregate during any twelve-month period and except
Restricted Payments by a Subsidiary to the Borrower or another Subsidiary;
provided, however, that in no event shall any Restricted Payments (other than
Restricted Payments to Borrower) be declared or made if either a Default or an
Unmatured Default shall have occurred and be continuing at the date of
declaration or payment thereof or would result therefrom.
(G) Conduct of Business; Subsidiaries; Acquisitions. Neither the
Borrower nor any of its Subsidiaries shall engage in any business other than the
businesses engaged in by the Borrower on the date hereof and any business or
activities which are substantially similar, related or incidental thereto or
logical extensions thereof. The Borrower shall not create, acquire or capitalize
any Subsidiary after the date hereof unless (i) no Default or Unmatured Default
which is not being cured shall have occurred and be continuing or would result
therefor; (ii) after such creation, acquisition or capitalization, all of the
representations and warranties contained herein shall be true and correct in all
material respects (unless such representation and warranty is made as of a
specific date, in which case, such representation or warranty shall be true in
all material respects as of such date); and (iii) after such creation,
acquisition or capitalization the Borrower shall be in compliance with the terms
of Section 7.2(K). The Borrower shall not make any Acquisitions, other than (a)
the Stock Acquisition and (b) other Acquisitions meeting the following
requirements or otherwise approved by the Required Lenders (each such
Acquisition constituting a "PERMITTED ACQUISITION"):
(i) no Default or Unmatured Default shall have occurred and be
continuing or would result from such Acquisition or the incurrence of any
Indebtedness in connection therewith;
(ii) after giving effect to such transaction, the aggregate of
all Foreign Subsidiary Investments would not exceed the Permitted Foreign
Subsidiary Investment Amount;
(iii) in the case of an Acquisition of Equity Interests of an
entity, the Acquisition shall be of at least thirty-three and one-third
percent (33 1/3) the Equity Interests of such entity, and such acquired
entity shall be (x) merged with and into the Borrower immediately following
such Acquisition, with the Borrower being the surviving corporation
following such merger or (y) the results of operations of such entity shall
be reported on a consolidated basis with the Borrower and its consolidated
Subsidiaries;
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(iv) (x) the purchase is consummated pursuant to a negotiated
acquisition agreement on a non-hostile basis, (y) if the purchase price
payable in respect to any such acquisition exceeds $10,000,000, the
acquisition documents in respect of which are reasonably satisfactory to
the Agent (including, without limitation, in respect of representations,
indemnities and opinions) and (z) the results of due diligence in respect
of such purchase are reasonably satisfactory to the Agent;
(v) the purchase price for the Acquisition shall not exceed
without the prior written consent of the Required Lenders an amount equal
to $15,000,000 (including the incurrence or assumption of any Indebtedness
in connection therewith), and in any event shall not exceed, together with
all other Permitted Acquisitions permitted under this Section 7.3(G), shall
not exceed an amount equal to (x) $40,000,000 (including the incurrence or
assumption of any Indebtedness in connection therewith) in the aggregate
any fiscal year and (y) $75,000,000 (including the incurrence or assumption
of any Indebtedness in connection therewith) in the aggregate during the
term of this Agreement, and the Borrower shall have complied with all of
the requirements of the Collateral Documents in respect thereof for
purposes of this clause (v), purchase price payable in the form of Capital
Stock shall not be counted toward the numerical limits referred to above;
(vi) the businesses being acquired shall be substantially
similar, related or incidental to, or a logical extension of, the
businesses or activities engaged in by the Borrower on the Closing Date;
(vii) prior to each such Acquisition, the Borrower shall deliver
to the Agent and the Lenders a certificate from one of the Authorized
Officers, demonstrating to the satisfaction of the Agent that after giving
effect to such Acquisition and the incurrence of any Indebtedness permitted
by Section 7.3(A) in connection therewith, on a pro forma basis using
historical audited and reviewed unaudited financial statements obtained
from the seller(s) in respect of each such Acquisition, broken down by
fiscal quarter in the Borrower's reasonable judgment, as if the Acquisition
and such incurrence of Indebtedness had occurred on the first day of the
twelve-month period ending on the last day of the Borrower's most recently
completed fiscal quarter, the Borrower would have been in compliance with
the financial covenants in Section 7.4 and not otherwise in Default.
(H) Transactions with Shareholders and Affiliates. Neither the
Borrower nor any of its Subsidiaries shall directly or indirectly (i) enter into
or permit to exist any transaction (including, without limitation, the purchase,
sale, lease or exchange of any property or the rendering of any service) with
any holder or holders of any of the Equity Interests of the Borrower, or with
any Affiliate of the Borrower which is not its Subsidiary, on terms that are
less favorable to the Borrower or any of its Subsidiaries, as applicable, than
those that might be obtained in an arm's length transaction at the time from
Persons who are not such a holder or
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Affiliate, except for Restricted Payments permitted by Section 7.3(F) and
Investments permitted by Section 7.3(D) or (ii) enter into or permit to exist
any such non-arm's length transaction between either the Borrower or any
Domestic Incorporated Subsidiary, on the one hand, and any Foreign Incorporated
Subsidiary, on the other hand, if as a result thereof the aggregate of all
Foreign Subsidiary Investments would at any time exceed the Permitted Foreign
Subsidiary Investment Amount. Agent and Lenders acknowledge and consent to the
transactions between the Borrower and its Affiliates described in the Borrower's
public filings as of the date hereof.
(I) Restriction on Fundamental Changes. Neither the Borrower nor any
of its Subsidiaries shall enter into any merger or consolidation, or liquidate,
wind-up or dissolve (or suffer any liquidation or dissolution), or convey,
lease, sell, transfer or otherwise dispose of, in one transaction or series of
transactions, all or substantially all of the Borrower's consolidated business
or property, whether now or hereafter acquired, except (i) transactions
permitted under Sections 7.3(B), 7.3(D) or 7.3(G) and, (ii) a Subsidiary of the
Borrower may be merged into or consolidated with the Borrower (in which case the
Borrower shall be the surviving corporation) or any wholly-owned Subsidiary of
the Borrower, and (iii) any liquidation of any Subsidiary of the Borrower into
the Borrower or another Subsidiary of the Borrower, as applicable.
(J) Sales and Leasebacks. Neither the Borrower nor any of its
Subsidiaries shall become liable, directly, by assumption or by Contingent
Obligation, with respect to any lease, whether an operating lease or a
Capitalized Lease, of any property (whether real or personal or mixed), (i)
which it or one of its Subsidiaries sold or transferred or is to sell or
transfer to any other Person, or (ii) which it or one of its Subsidiaries
intends to use for substantially the same purposes as any other property which
has been or is to be sold or transferred by it or one of its Subsidiaries to any
other Person in connection with such lease, unless in either case the sale
involved is not prohibited under Section 7.3(B) and the lease involved is not
prohibited under Section 7.3(A) and any related Investment is not prohibited
under Section 7.3(D).
(K) Margin Regulations. Neither the Borrower nor any of its
Subsidiaries, shall use all or any portion of the proceeds of any credit
extended under this Agreement to purchase or carry Margin Stock.
(L) ERISA. (a) The Borrower shall not
(i) engage, or permit any of its Subsidiaries to engage, in any
prohibited transaction described in Sections 406 of ERISA or 4975 of the
Code for which a statutory or class exemption is not available or a private
exemption has not been previously obtained from the DOL;
(ii) permit to exist any material accumulated funding deficiency
(as defined in Sections 302 of ERISA and 412 of the Code), with respect to
any Benefit Plan, whether or not waived;
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(iii) fail, or permit any Controlled Group member to fail, to pay
timely required material contributions or annual installments due with
respect to any waived funding deficiency to any Benefit Plan;
(iv) terminate, or permit any Controlled Group member to
terminate, any Benefit Plan which would result in any material liability of
the Borrower or any Controlled Group member under Title IV of ERISA;
(v) fail to make any material contribution or payment to any
Multiemployer Plan which the Borrower or any Controlled Group member may be
required to make under any agreement relating to such Multiemployer Plan,
or any law pertaining thereto;
(vi) fail, or permit any Controlled Group member to fail, to pay
any required material installment or any other payment required under
Section 412 of the Code on or before the due date for such installment or
other payment; or
(vii) amend, or permit any Controlled Group member to amend,
a Plan resulting in a material increase in current liability for the plan
year such that the Borrower or any Controlled Group member is required to
provide security to such Plan under Section 401(a)(29) of the Code.
(b) For purposes of this Section 7.3(L), "material" means any
noncompliance or basis for liability which could reasonably be likely
to subject the Borrower or any of its Subsidiaries to liability,
individually or in the aggregate, in excess of $5,000,000.
(M) Corporate Documents. Neither the Borrower nor any of its
Subsidiaries shall amend, modify or otherwise change any of the terms or
provisions in any of their respective constituent documents as in effect on the
date hereof in any manner materially adverse to the interests of the Lenders,
without the prior written consent of the Required Lenders, except in connection
with a Permitted Acquisition.
(N) Fiscal Year. Neither the Borrower nor any of its consolidated
Subsidiaries shall change its fiscal year for accounting or tax purposes from a
period consisting of the 12-month period ending on the last day of December of
each year, except as required by Agreement Accounting Principles (including
fiscal year end changes required as a result of the Transactions) or by law and
disclosed to the Lenders and the Agent.
(O) Subsidiary Covenants. The Borrower will not, and will not permit
any Subsidiary to, create or otherwise cause to become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary to pay
dividends or make any other distribution on its stock, or make any other
Restricted Payment, pay any Indebtedness or
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other Obligation owed to the Borrower or any other Subsidiary, make loans or
advances or other Investments in the Borrower or any other Subsidiary, or sell,
transfer or otherwise convey any of its property to the Borrower or any other
Subsidiary.
(P) Hedging Obligations. The Borrower shall not and shall not permit
any of its Subsidiaries to enter into any interest rate, commodity or foreign
currency exchange, swap, collar, cap or similar agreements evidencing Hedging
Obligations, other than interest rate, foreign currency or commodity exchange,
swap, collar, cap or similar agreements entered into by the Borrower pursuant to
which the Borrower has hedged its actual interest rate, foreign currency or
commodity exposure. Such permitted hedging agreements entered into by the
Borrower and any Lender or any affiliate of any Lender including, without
limitation, to hedge floating interest rate risk in an aggregate notional amount
not to exceed at any time an amount equal to (x) $37,500,000 if as of the
Closing Date the Aggregate Commitments equal or are less than $75,000,000 or (y)
$100,000,000 if as of the Closing Date the Aggregate Commitments are greater
than $75,000,000, are sometimes referred to herein as "HEDGING AGREEMENTS." In
the event a Lender or any of its Affiliates elects to enter into any Hedging
Agreement with the Borrower or any of its Subsidiaries, the obligations of the
Borrower and such Subsidiaries with respect to such Hedging Agreement shall be
Secured Obligations secured by the Collateral.
(Q) Issuance of Disqualified Stock. From and after the Closing Date,
neither the Borrower, nor any of its Subsidiaries shall issue any Disqualified
Stock. All issued and outstanding Disqualified Stock shall be treated as
Indebtedness for all purposes of this Agreement (and as funded Indebtedness for
purposes of Section 7.1(F)), and the amount of such deemed Indebtedness shall be
the aggregate amount of the liquidation preference of such Disqualified Stock.
(R) Other Indebtedness. The Borrower shall not amend, modify or
supplement, or permit any Subsidiary to amend, modify or supplement (or consent
to any amendment, modification or supplement of), any document, agreement or
instrument evidencing the Permitted Subordinated Indebtedness (or any
replacements, substitutions or renewals thereof) or pursuant to which the
Permitted Subordinated Indebtedness is issued where such amendment, modification
or supplement provides for the following or which has any of the following
effects:
(i) increases the overall principal amount of any such
Indebtedness or increases the amount of any single scheduled installment of
principal or interest;
(ii) shortens or accelerates the date upon which any installment
of principal or interest becomes due or adds any additional mandatory
redemption provisions;
(iii) shortens the final maturity date of such Indebtedness or
otherwise accelerates the amortization schedule with respect to such
Indebtedness;
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(iv) increases the rate of interest accruing on such
Indebtedness;
(v) provides for the payment of additional fees or increases
existing fees;
(vi) amends or modifies any financial or negative covenant (or
covenant which prohibits or restricts the Borrower or a Subsidiary of the
Borrower from taking certain actions) in a manner which is more onerous or
more restrictive in any material respect to the Borrower (or any Subsidiary
of the Borrower) or which is otherwise materially adverse to the Borrower
and/or the Lenders or, in the case of adding covenants, which places
material additional restrictions on the Borrower (or a Subsidiary of the
Borrower) or which requires the Borrower or any such Subsidiary to comply
with more restrictive financial ratios or which requires the Borrower to
better its financial performance from that set forth in the existing
financial covenants;
(vii) amends, modifies or adds any affirmative covenant in a
manner which, when taken as a whole, is materially adverse to the Borrower
and/or the Lenders; or
(viii) amends, modifies or supplements the subordination
provisions thereof.
7.4 Financial Covenants. The Borrower shall comply with the following:
(A) Minimum Fixed Charge Coverage Ratio. The Borrower and its
consolidated Subsidiaries shall maintain a ratio ("FIXED CHARGE COVERAGE RATIO")
of:
(i) the sum of (a) EBITDA during such period plus (b) Rentals
during such period minus (c) maintenance Capital Expenditures, to
(ii) the sum of the amounts of (a) Interest Expense during such
period (net of interest income) plus (b) Rentals during such period plus
(c) scheduled principal payments of Indebtedness, plus (d) scheduled
dividend payments on Borrower's preferred stock,
which shall not be less than 1.75 to 1.00 for each four (4) fiscal quarter
period beginning with the four (4) fiscal quarter period ending on September 30,
1999. In each case, the Fixed Charge Coverage Ratio shall be determined as of
the last day of each fiscal quarter for the four (4) fiscal quarter period
ending on such day (the "LAST TWELVE-MONTH PERIOD"), provided, that (i) for the
fiscal quarter ending on September 30, 1999, the Fixed Charge Coverage Ratio
shall be calculated for the period commencing on July 1, 1999 through the fiscal
quarter ending on September 30, 1999 multiplied by four (4); (ii) for the fiscal
quarter ending on December 31, 1999, the Fixed Charge Coverage Ratio shall be
calculated for the period commencing on July 1, 1999 through the fiscal quarter
ending on December 31, 1999 multiplied by two (2); (iii) for the
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fiscal quarter ending on March 1, 2000, the Fixed Charge Coverage Ratio shall be
calculated for the period commencing on July 1, 1999 through the fiscal quarter
ending on March 31, 2000 multiplied by four-thirds (4/3); and (iv) the Fixed
Charge Coverage Ratio shall be calculated, with respect to Permitted
Acquisitions, on a pro forma basis using historical audited and reviewed
unaudited financial statements obtained from the seller(s) in such Permitted
Acquisition, broken down by fiscal quarter as if such Permitted Acquisition
(including the uses and applications of proceeds in respect thereof and the
Indebtedness incurred in conjunction therewith) had occurred (i) for each fiscal
quarter ending on or prior to June 30, 2000, on July 1, 1999, and (ii) for each
fiscal quarter thereafter, on the first day of the Last Twelve-Month Period (the
"MEASUREMENT PERIOD") (including cost savings actually realized during such
prior period, as though such costs savings had been realized from the first day
of the Measurement Period in the Borrower's reasonable judgment), provided such
pro forma statements and such costs savings shall be substantiated by supporting
information reasonably acceptable to the Agent. Interest Expense shall be
calculated for the purpose of clause (ii) by excluding the effect of
amortization of deferred financing fees, to the extent it is an Interest
Expense.
(B) Maximum Leverage Ratio. The Borrower and its consolidated
Subsidiaries shall not permit the ratio (the "LEVERAGE RATIO") on a pro forma
basis after giving effect to the acquisition of Target of (i) Indebtedness (net
of cash and Cash Equivalents of the Borrower and its consolidated Subsidiaries)
to (ii) EBITDA to be greater than the ratios set forth below for any four (4)
fiscal quarter period set forth below:
(i) 3.75 to 1.00 for each four (4) fiscal quarter period
beginning with the fiscal quarter ending September 30, 1999 and ending with
the fiscal quarter ending March 31, 2000;
(ii) 3.25 to 1.00 for each four (4) fiscal quarter period
beginning with the fiscal quarter ending June 30, 2000 and ending with the
fiscal quarter ending March 31, 2001; and
(iii) 3.00 to 1.00 for each four (4) fiscal quarter period
beginning with the fiscal quarter ending June 30, 2001 and thereafter.
The Leverage Ratio shall be calculated, in each case, determined as of the last
day of each fiscal quarter based upon (a) for Indebtedness, Indebtedness as of
the last day of each such fiscal quarter; and (b) for EBITDA, the actual amount
for Last Twelve-Month Period, provided, that (i) for the fiscal quarter ending
on September 30, 1999, EBITDA for purposes of calculating the Leverage Ratio
shall be calculated for the period commencing on July 1, 1999 through the fiscal
quarter ending on September 30, 1999 multiplied by four (4); (ii) for the fiscal
quarter ending on December 31, 1999, EBITDA for purposes of calculating the
Leverage Ratio shall be calculated for the period commencing on July 1, 1999
through the fiscal quarter ending on December 31, 1999 multiplied by two (2);
(iii) for the fiscal quarter ending on March 31, 2000, EBITDA for purposes of
calculating the Leverage Ratio shall be calculated for the period commencing on
July 1, 1999 through the fiscal quarter ending on March 31, 2000 multiplied by
four-thirds (4/3);
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and (iv) the Leverage Ratio shall be calculated, with respect to Permitted
Acquisitions, on a pro forma basis using historical audited and reviewed
unaudited financial statements obtained from the seller(s) in such Permitted
Acquisition, broken down by fiscal quarter as if such Permitted Acquisition
(including the uses and applications of proceeds in respect thereof and the
Indebtedness incurred in conjunction therewith) had occurred (i) for each fiscal
quarter ending on or prior to June 30, 2000, on July 1, 1999, and (ii) for each
fiscal quarter thereafter, on the first day of the Measurement Period (including
cost savings actually realized during such prior period, as though such costs
savings had been realized from the first day of the Measurement Period in the
Borrower's reasonable judgment), provided such pro forma statements and such
costs savings shall be substantiated by supporting information reasonably
acceptable to the Agent.
(C) Minimum Consolidated Net Worth. The Borrower shall not permit its
Consolidated Net Worth at any time to be less than the sum of (a) $60,000,000
plus (b) fifty percent (50%) of Net Income (if positive) calculated separately
for each fiscal quarter commencing with the fiscal quarter ending on June 30,
1999, plus (c) one hundred percent (100%) of the net cash proceeds resulting
from the issuance by the Borrower of any Capital Stock.
ARTICLE VIII:
DEFAULTS
--------
8.1 Defaults. Each of the following occurrences shall constitute a Default
under this Agreement:
(A) Failure to Make Payments When Due. The Borrower or any Alternate
Currency Borrower shall (i) fail to pay when due any of the Obligations
consisting of principal with respect to the Loans or (ii) shall fail to pay
within five (5) Business Days of the date when due any of the other Obligations
under this Agreement or the other Loan Documents.
(B) Breach of Certain Covenants. The Borrower shall fail duly and
punctually to perform or observe any agreement, covenant or obligation binding
on the Borrower under:
(i) Sections 7.1, 7.2, 7.3(C), 7.3(E), 7.3(L) or 7.3(O) and such
failure shall continue unremedied for fifteen (15) Business Days, or if
such failure is not capable of being cured with such fifteen (15) day
period, forty-five (45) days if the Borrower at all times during such
forty-five (45) day period is promptly and diligently attempting to effect
such cure; or
(ii) Sections 7.3 (other than Sections 7.3(C), 7.3(E), 7.3(L) and
7.3(O)) or 7.4.
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(C) Breach of Representation or Warranty. Any representation or
warranty made or deemed made by the Borrower to the Agent or any Lender herein
or by the Borrower or any Alternate Currency Borrower or any of their
Subsidiaries in any of the other Loan Documents or in any statement or
certificate at any time given by any such Person pursuant to any of the Loan
Documents shall be false or misleading in any material respect on the date as of
which made (or deemed made).
(D) Other Defaults. The Borrower shall default in the performance of
or compliance with any term contained in this Agreement (other than as covered
by paragraphs (A) or (B) of this Section 8.1), or the Borrower or any Alternate
Currency Borrower or any of their Subsidiaries shall default in the performance
of or compliance with any term contained in any of the other Loan Documents, and
such default shall continue for thirty (30) days after the occurrence thereof.
(E) Default as to Other Indebtedness. The Borrower or any of its
Subsidiaries shall fail to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) with respect
to any Indebtedness (other than Indebtedness hereunder, but including, without
limitation, Disqualified Stock), beyond any period of grace provided with
respect thereto, which individually or together with other such Indebtedness as
to which any such failure exists has an aggregate outstanding principal amount
in excess of $5,000,000; or any breach, default or event of default shall occur,
or any other condition shall exist under any instrument, agreement or indenture
pertaining to any such Indebtedness having such aggregate outstanding principal
amount, beyond any period of grace, if any, provided with respect thereto, if
the effect thereof is to cause an acceleration, mandatory redemption, a
requirement that the Borrower offer to purchase such Indebtedness or other
required repurchase of such Indebtedness, or permit the holder(s) of such
Indebtedness to accelerate the maturity of any such Indebtedness or require a
redemption or other repurchase of such Indebtedness; or any such Indebtedness
shall be otherwise declared to be due and payable (by acceleration or otherwise)
or required to be prepaid, redeemed or otherwise repurchased by the Borrower or
any of its Subsidiaries (other than by a regularly scheduled required
prepayment) prior to the stated maturity thereof.
(F) Involuntary Bankruptcy; Appointment of Receiver, Etc.
(i) An involuntary case shall be commenced against the Borrower
or any of the Borrower's Subsidiaries and the petition shall not be
dismissed, stayed, bonded or discharged within sixty (60) days after
commencement of the case; or a court having jurisdiction in the premises
shall enter a decree or order for relief in respect of the Borrower or any
of the Borrower's Subsidiaries in an involuntary case, under any applicable
bankruptcy, insolvency or other similar law now or hereinafter in effect;
or any other similar relief shall be granted under any applicable federal,
state, local or foreign law.
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(ii) A decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator,
trustee, custodian or other officer having similar powers over the Borrower
or any of the Borrower's Subsidiaries or over all or a substantial part of
the property of the Borrower or any of the Borrower's Subsidiaries shall be
entered; or an interim receiver, trustee or other custodian of the Borrower
or any of the Borrower's Subsidiaries or of all or a substantial part of
the property of the Borrower or any of the Borrower's Subsidiaries shall be
appointed or a warrant of attachment, execution or similar process against
any substantial part of the property of the Borrower or any of the
Borrower's Subsidiaries shall be issued and any such event shall not be
stayed, dismissed, bonded or discharged within sixty (60) days after entry,
appointment or issuance.
(G) Voluntary Bankruptcy; Appointment of Receiver, Etc. The Borrower
or any of the Borrower's Subsidiaries shall (i) commence a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, (ii) consent to the entry of an order for relief in an involuntary case,
or to the conversion of an involuntary case to a voluntary case, under any such
law, (iii) consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property, (iv)
make any assignment for the benefit of creditors or (v) take any corporate
action to authorize any of the foregoing.
(H) Judgments and Attachments. Any money judgment(s) (other than a
money judgment covered by insurance as to which the applicable insurance company
has not disclaimed or reserved the right to disclaim coverage), writ or warrant
of attachment, or similar process against the Borrower or any of its
Subsidiaries or any of their respective assets involving in any single case or
in the aggregate an amount in excess of $5,000,000 is or are entered and shall
remain undischarged, unvacated, unbonded or unstayed for a period of sixty (60)
days or in any event later than fifteen (15) days prior to the date of any
proposed sale thereunder.
(I) Dissolution. Any order, judgment or decree shall be entered
against the Borrower decreeing its involuntary dissolution or split up and such
order shall remain undischarged and unstayed for a period in excess of sixty
(60) days; or the Borrower shall otherwise dissolve or cease to exist except as
specifically permitted by this Agreement.
(J) Loan Documents. At any time, for any reason, any Loan Document
as a whole that materially affects the ability of the Agent, or any of the
Lenders to enforce the Obligations or enforce their rights against the
Collateral ceases to be in full force and effect or the Borrower or any of the
Borrower's Subsidiaries party thereto seeks to repudiate its obligations
thereunder.
(K) Termination Event. Any Termination Event occurs which the Required
Lenders believe is reasonably likely to subject the Borrower to liability in
excess of $5,000,000.
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(L) Waiver of Minimum Funding Standard. If the plan administrator
of any Plan applies under Section 412(d) of the Code for a waiver of the minimum
funding standards of Section 412(a) of the Code and any Lender believes the
substantial business hardship upon which the application for the waiver is based
could reasonably be expected to subject either the Borrower or any Controlled
Group member to liability in excess of $5,000,000.
(M) Change of Control. A Change of Control shall occur.
(N) Hedging Agreements. Nonpayment by the Borrower of any obligation
under any Hedging Agreement or the breach by the Borrower of any term, provision
or condition contained in any such Hedging Agreement.
(O) Environmental Matters. The Borrower or any of its Subsidiaries
shall be the subject of any proceeding or investigation pertaining to (i) the
Release by the Borrower or any of its Subsidiaries of any Contaminant into the
environment, (ii) the liability of the Borrower or any of its Subsidiaries
arising from the Release by any other Person of any Contaminant into the
environment, or (iii) any violation of any Environmental, Health or Safety
Requirements of Law which by the Borrower or any of its Subsidiaries, which, in
any case, has or is reasonably likely to subject the Borrower to liability in
excess of $5,000,000.
(P) Guarantor Revocation. Any guarantor of the Obligations shall
terminate or revoke any of its obligations under the applicable Guaranty or
breach any of the material terms of such Guaranty.
(Q) Collateral Documents. Any of the following shall occur: (i) any
Collateral Document shall for any reason fail to create a valid and perfected
first priority security interest in any collateral purported to be covered
thereby, except as permitted by the terms of any Collateral Document, (ii) any
Collateral Document shall fail to remain in full force or effect, (iii) any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Collateral Document, or (iv) the Borrower shall fail to
comply with any of the terms or provisions of any Collateral Document.
A Default shall be deemed "continuing" until cured or until waived in
writing in accordance with Section 9.3.
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ARTICLE IX:
ACCELERATION, DEFAULTING LENDERS;
WAIVERS, AMENDMENTS AND REMEDIES
--------------------------------
9.1 Termination of Commitments; Acceleration. If any Default described in
Section 8.1(F) or 8.1(G) occurs with respect to the Borrower, the obligations of
the Lenders to make Loans (including, without limitation, Alternate Currency
Loans) hereunder and the obligation of any Issuing Banks to issue Letters of
Credit hereunder shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on the part of
the Agent or any Lender. If any other Default occurs, the Required Lenders may
terminate or suspend the obligations of the Lenders to make Loans (including,
without limitation, Alternate Currency Loans) hereunder and the obligation of
the Issuing Banks to issue Letters of Credit hereunder, or declare the
Obligations to be due and payable, or both, whereupon the Obligations shall
become immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which the Borrower expressly waives.
9.2 Defaulting Lender. In the event that any Lender fails to fund its
Applicable Pro Rata Share of any Advance requested or deemed requested by the
Borrower, which such Lender is obligated to fund under the terms of this
Agreement (the funded portion of such Advance being hereinafter referred to as a
"NON PRO RATA LOAN"), until the earlier of such Lender's cure of such failure
and the termination of the Revolving Loan Commitments, the proceeds of all
amounts thereafter repaid to the Agent by the Borrower and otherwise required to
be applied to such Lender's share of all other Obligations pursuant to the terms
of this Agreement shall be advanced to the Borrower by the Agent on behalf of
such Lender to cure, in full or in part, such failure by such Lender, but shall
nevertheless be deemed to have been paid to such Lender in satisfaction of such
other Obligations. Notwithstanding anything in this Agreement to the contrary:
(i) the foregoing provisions of this Section 9.2 shall apply only
with respect to the proceeds of payments of Obligations and shall not
affect the conversion or continuation of Loans pursuant to Section 2.10;
(ii) any such Lender shall be deemed to have cured its failure
to fund its Applicable Pro Rata Share, of any Advance at such time as an
amount equal to such Lender's original Applicable Pro Rata Share of the
requested principal portion of such Advance is fully funded to the
Borrower, whether made by such Lender itself or by operation of the terms
of this Section 9.2, and whether or not the Non Pro Rata Loan with respect
thereto has been repaid, converted or continued;
(iii) amounts advanced to the Borrower to cure, in full or in
part, any such Lender's failure to fund its Applicable Pro Rata Share of
any Advance ("CURE LOANS") shall bear interest at the rate applicable to
Floating Rate Loans in effect from time to time, and for all other purposes
of this Agreement shall be treated as if they were Floating Rate Loans;
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(iv) regardless of whether or not a Default has occurred or is
continuing, and notwithstanding the instructions of the Borrower as to its
desired application, all repayments of principal which, in accordance with
the other terms of this Agreement, would be applied to the outstanding
Floating Rate Loans shall be applied first, ratably to all Floating Rate
Loans constituting Non Pro Rata Loans, second, ratably to Floating Rate
Loans other than those constituting Non Pro Rata Loans or Cure Loans and,
third, ratably to Floating Rate Loans constituting Cure Loans;
(v) for so long as and until the earlier of any such Lender's
cure of the failure to fund its Applicable Pro Rata Share of any Advance
and the termination of the Revolving Loan Commitments, the term "Required
Lenders" for purposes of this Agreement shall mean Lenders (excluding all
Lenders whose failure to fund their respective Applicable Pro Rata Share of
such Advance have not been so cured) whose Pro Rata Shares represent
greater than fifty percent (50%) of the aggregate Pro Rata Shares of such
Lenders; and
(vi) for so long as and until any such Lender's failure to fund
its Applicable Pro Rata Share of any Advance is cured in accordance with
Section 9.2(ii), (A) such Lender shall not be entitled to any commitment
fees with respect to its Revolving Loan Commitment and (B) such Lender
shall not be entitled to any letter of credit fees, which commitment fees
and letter of credit fees shall accrue in favor of the Lenders which have
funded their respective Applicable Pro Rata Share of such requested
Advance, shall be allocated among such performing Lenders ratably based
upon their relative Revolving Loan Commitments, and shall be calculated
based upon the average amount by which the aggregate Revolving Loan
Commitments of such performing Lenders exceeds the sum of (I) the
outstanding principal amount of the Loans owing to such performing Lenders,
plus (II) the outstanding Reimbursement Obligations owing to such
performing Lenders, plus (III) the aggregate participation interests of
such performing Lenders arising pursuant to Section 3.6 with respect to
undrawn and outstanding Letters of Credit.
9.3 Amendments. Subject to the provisions of this Article IX, the Required
Lenders (or the Agent with the consent in writing of the Required Lenders) and
the Borrower may enter into agreements supplemental hereto for the purpose of
adding or modifying any provisions to the Loan Documents or changing in any
manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
without the consent of each Lender (which is not a defaulting Lender under the
provisions of Section 9.2) affected thereby:
(i) Postpone or extend the Revolving Loan Termination Date, the
Term Loan Termination Date or any other date fixed for any payment of
principal of, or interest on, the Loans, the Reimbursement Obligations or
any fees or other amounts payable to such Lender (except with respect to
(a) any modifications of the provisions
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relating to prepayments of Loans and other Obligations and (b) a waiver of
the application of the default rate of interest pursuant to Section 2.11
hereof).
(ii) Reduce the principal amount of any Loans or L/C Obligations,
or reduce the rate or extend the time of payment of interest or fees
thereon.
(iii) Reduce the percentage specified in the definition of
Required Lenders or any other percentage of Lenders specified to be the
applicable percentage in this Agreement to act on specified matters or
amend the definitions of "Required Lenders", "Revolving Loan Pro Rata
Share", "Term Loan Pro Rata Share", or "Pro Rata Share".
(iv) Increase the amount of the Revolving Loan Commitment, Term
Loan Commitment of any Lender hereunder or increase any Lender's Revolving
Loan Pro Rata Share, Term Loan Pro Rata Share, or Pro Rata Share.
(v) Permit the Borrower to assign its rights under this
Agreement.
(vi) other than pursuant to a transaction permitted by the terms
of this Agreement, release all or substantially all of the Collateral which
is subject to any Loan Document.
(vii) other than pursuant to a transaction permitted by the terms
of this Agreement, release any guarantor from its obligations under the
Guaranty.
(viii) Amend this Section 9.3.
No amendment of any provision of this Agreement relating to (a) the Agent shall
be effective without the written consent of the Agent, (b) Swing Line Loans
shall be effective without the written consent of the Swing Line Bank and (c)
any Issuing Bank shall be effective without the written consent of such Issuing
Bank. The Agent may waive payment of the fee required under Section 13.3(B)
without obtaining the consent of any of the Lenders. Notwithstanding anything
herein to the contrary, the Agent (acting reasonably and after consultation with
other parties hereto) may by reasonable prior notice to the other parties hereto
amend this Agreement after consultation with the Borrower unilaterally for the
exclusive purpose of effectuating changes hereto which are necessary to the
integration of the issuance of Letters of Credit hereunder in Euro and only in a
manner which shall not result in a deterioration of the position of any Agent or
Lender from its respective position as of the date of this Agreement.
The Agent may notify the other parties to this Agreement of any amendments
to this Agreement which the Agent reasonably determines to be necessary as a
result of the commencement of the third stage of the European Economic and
Monetary Union. Notwithstanding anything to the contrary contained herein, any
amendments so notified shall take effect in accordance with the terms of the
relevant notification; provided, however, that if
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and to the extent that the Agent determines it is not possible to put all
parties into such position, the Agent may give priority to putting the Agent,
the Arranger and the Lenders into that position.
9.4 Preservation of Rights. No delay or omission of the Lenders or the
Agent to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan or the issuance of a Letter of Credit notwithstanding the
existence of a Default or the inability of the Borrower to satisfy the
conditions precedent to such Loan or issuance of such Letter of Credit shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Lenders required pursuant to Section 9.3, and then only
to the extent in such writing specifically set forth. All remedies contained in
the Loan Documents or by law afforded shall be cumulative and all shall be
available to the Agent and the Lenders until the Obligations have been paid in
full.
ARTICLE X:
GENERAL PROVISIONS
10.1 Survival of Representations. All representations and warranties of the
Borrower contained in this Agreement shall survive delivery of this Agreement
and the making of the Loans herein contemplated so long as any principal,
accrued interest, fees, or any other amount due and payable under any Loan
Document is outstanding and unpaid (other than contingent reimbursement and
indemnification obligations) and so long as the Commitments have not been
terminated.
10.2 Governmental Regulation. Anything contained in this Agreement to the
contrary notwithstanding, no Lender shall be obligated to extend credit to the
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
10.3 Performance of Obligations. The Borrower agrees that the Agent may,
but shall have no obligation to (i) at any time, pay or discharge taxes, liens,
security interests or other encumbrances levied or placed on or threatened
against any Collateral to the extent the Borrower is required by the terms
hereof to pay any such amount, but has not done so and (ii) after the occurrence
and during the continuance of a Default, to make any other payment or perform
any act required of the Borrower under any Loan Document or take any other
action which the Agent in its discretion deems necessary or desirable to protect
or preserve the Collateral. The Agent shall use its reasonable efforts to give
the Borrower notice of any action taken under this Section 10.3 prior to the
taking of such action or promptly thereafter provided the failure to give such
notice shall not affect the Borrower's obligations in respect thereof. The
Borrower agrees to pay the Agent, upon demand, the principal amount of all funds
advanced by the Agent under this Section 10.3, together with interest thereon at
the rate from time to time applicable to Floating Rate Loans from the date of
such advance until the outstanding principal balance thereof is paid in full. If
the Borrower fails to make payment in respect of any such advance
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under this Section 10.3 within one (1) Business Day after the date the Borrower
receives written demand therefor from the Agent, the Agent shall promptly notify
each Lender and each Lender agrees that it shall thereupon make available to the
Agent, in Dollars in immediately available funds, the amount equal to such
Lender's Pro Rata Share of such advance. If such funds are not made available to
the Agent by such Lender within one (1) Business Day after the Agent's demand
therefor, the Agent will be entitled to recover any such amount from such Lender
together with interest thereon at the Federal Funds Effective Rate for each day
during the period commencing on the date of such demand and ending on the date
such amount is received. The failure of any Lender to make available to the
Agent its Pro Rata Share of any such unreimbursed advance under this Section
10.3 shall neither relieve any other Lender of its obligation hereunder to make
available to the Agent such other Lender's Pro Rata Share of such advance on the
date such payment is to be made nor increase the obligation of any other Lender
to make such payment to the Agent. All outstanding principal of, and interest
on, advances made under this Section 10.3 shall constitute Obligations secured
by the Collateral until paid in full by the Borrower.
10.4 Headings. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
10.5 Entire Agreement. The Loan Documents embody the entire agreement and
understanding among the Borrower, the Agent and the Lenders and supersede all
prior agreements and understandings among the Borrower, the Agent and the
Lenders relating to the subject matter thereof.
10.6 Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other Lender (except to the extent to which
the Agent is authorized to act as such). The failure of any Lender to perform
any of its obligations hereunder shall not relieve any other Lender from any of
its obligations hereunder. This Agreement shall not be construed so as to confer
any right or benefit upon any Person other than the parties to this Agreement
and their respective successors and assigns.
10.7 Expenses; Indemnification.
(A) Expenses. The Borrower shall reimburse the Agent, the Alternate
Currency Bank and the Arranger for any reasonable costs, internal charges and
out-of-pocket expenses (including reasonable attorneys' and paralegals' fees and
time charges of attorneys and paralegals for the Agent, which attorneys and
paralegals may be employees of the Agent) paid or incurred by the Agent, the
Alternate Currency Bank or the Arranger in connection with the preparation,
negotiation, execution, delivery, syndication, review, amendment, modification,
and administration of the Loan Documents. The Borrower also agrees to reimburse
the Agent, the Alternate Currency Bank and the Arranger and the Lenders for any
costs, internal charges and out-of-pocket expenses (including reasonable
attorneys' and paralegals' fees and time charges of
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attorneys and paralegals for the Agent, the Alternate Currency Bank and the
Arranger and the Lenders, which attorneys and paralegals may be employees of the
Agent, the Alternate Currency Bank or the Arranger or the Lenders) paid or
incurred by the Agent or the Arranger, the Alternate Currency Bank or any Lender
in connection with the collection of the Obligations and enforcement of the Loan
Documents. In addition to expenses set forth above, the Borrower agrees to
reimburse the Agent, promptly after the Agent's request therefor, for each
audit, or other business analysis performed by or for the benefit of the Lenders
in connection with this Agreement or the other Loan Documents in an amount equal
to the Agent's then customary charges for each person employed to perform such
audit or analysis, plus all reasonable costs and expenses (including without
limitation, travel expenses) incurred by the Agent in the performance of such
audit or analysis. The foregoing notwithstanding, the Borrower shall not be
required to reimburse the Agent for its audit or business analysis in amounts in
excess of $10,000 per annum unless a Default has occurred and is continuing.
Agent shall provide the Borrower with a detailed statement of all reimbursements
requested under this Section 10.7(A).
(B) Indemnity. The Borrower further agrees to defend, protect,
indemnify, and hold harmless the Agent, the Arranger, the Alternate Currency
Bank and each and all of the Lenders and each of their respective Affiliates,
and each of such Agent's, Arranger's, the Alternate Currency Bank's, Lender's,
or Affiliate's respective officers, directors, trustees, investment advisors,
employees, attorneys and agents (including, without limitation, those retained
in connection with the satisfaction or attempted satisfaction of any of the
conditions set forth in Article V) (collectively, the "INDEMNITEES") from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses of any kind or nature
whatsoever (including, without limitation, the fees and disbursements of counsel
for such Indemnitees in connection with any investigative, administrative or
judicial proceeding, whether or not such Indemnitees shall be designated a party
thereto), imposed on, incurred by, or asserted against such Indemnitees in any
manner relating to or arising out of:
(i) this Agreement, the other Loan Documents or any of the
Transaction Documents, or any act, event or transaction related or
attendant thereto or to the Stock Acquisition, the making of the Loans, and
the issuance of and participation in Letters of Credit hereunder, the
management of such Loans or Letters of Credit, the use or intended use of
the proceeds of the Loans or Letters of Credit hereunder, or any of the
other transactions contemplated by the Transaction Documents; or
(ii) any liabilities, obligations, responsibilities, losses,
damages, personal injury, death, punitive damages, economic damages,
consequential damages, treble damages, intentional, willful or wanton
injury, damage or threat to the environment, natural resources or public
health or welfare, costs and expenses (including, without limitation,
attorney, expert and consulting fees and costs of investigation,
feasibility or remedial action studies), fines, penalties and monetary
sanctions, interest, direct or indirect, known or unknown, absolute or
contingent, past, present or future relating to violation of any
Environmental, Health or Safety Requirements of Law arising from or in
connection with the past, present or future operations of the Borrower, its
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Subsidiaries or any of their respective predecessors in interest, or, the
past, present or future environmental, health or safety condition of any
respective property of the Borrower or its Subsidiaries, the presence of
asbestos-containing materials at any respective property of the Borrower or
its Subsidiaries or the Release or threatened Release of any Contaminant
into the environment (collectively, the "INDEMNIFIED MATTERS");
provided, however, the Borrower shall have no obligation to an Indemnitee
hereunder with respect to Indemnified Matters caused solely by or resulting
solely from the willful misconduct or Gross Negligence of such Indemnitee with
respect to the Loan Documents, as determined by the final non-appealed judgment
of a court of competent jurisdiction. If the undertaking to indemnify, pay and
hold harmless set forth in the preceding sentence may be unenforceable because
it is violative of any law or public policy, the Borrower shall contribute the
maximum portion which it is permitted to pay and satisfy under applicable law,
to the payment and satisfaction of all Indemnified Matters incurred by the
Indemnitees.
(C) Waiver of Certain Claims; Settlement of Claims. The Borrower
further agrees to assert no claim against any of the Indemnitees on any theory
of liability seeking consequential, special, indirect, exemplary or punitive
damages. No settlement shall be entered into by the Borrower or any if its
Subsidiaries with respect to any claim, litigation, arbitration or other
proceeding relating to or arising out of the transactions evidenced by this
Agreement, the other Loan Documents unless such settlement releases all
Indemnitees from any and all liability with respect thereto.
(D) Survival of Agreements. The obligations and agreements of the
Borrower under this Section 10.7 shall survive the termination of this
Agreement.
10.8 Numbers of Documents. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Agent with sufficient counterparts
so that the Agent may furnish one to each of the Lenders.
10.9 Accounting. Except as provided to the contrary herein, all accounting
terms used herein shall be interpreted and all accounting determinations
hereunder shall be made in accordance with Agreement Accounting Principles.
10.10 Severability of Provisions. Any provision in any Loan Document that
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
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10.11 Nonliability of Lenders. The relationship between the Borrower and
the Lenders and the Agent shall be solely that of borrower and lender. Neither
the Agent nor any Lender shall have any fiduciary responsibilities to the
Borrower. Neither the Agent nor any Lender undertakes any responsibility to the
Borrower to review or inform the Borrower of any matter in connection with any
phase of the Borrower's business or operations.
10.12 GOVERNING LAW. THE AGENT ACCEPTS THIS AGREEMENT, ON BEHALF OF ITSELF
AND THE LENDERS, AT CHICAGO, ILLINOIS BY ACKNOWLEDGING AND AGREEING TO IT THERE.
ANY DISPUTE BETWEEN THE BORROWER AND THE AGENT, ANY LENDER OR ANY OTHER HOLDER
OF SECURED OBLIGATIONS ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL
TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT,
EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS
(INCLUDING 735 ILCS 105/5-1 ET SEQ. BUT OTHERWISE WITHOUT REGARD TO THE
CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS.
10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B),
EACH OF THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG
THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS
WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED
EXCLUSIVELY BY STATE OR FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS, BUT THE
PARTIES HERETO ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF CHICAGO, ILLINOIS. EACH OF THE PARTIES
HERETO WAIVES IN ALL DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. THE BORROWER AGREES THAT THE AGENT, ANY
LENDER OR ANY OTHER HOLDER OF SECURED OBLIGATIONS SHALL HAVE THE RIGHT TO
PROCEED AGAINST THE BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION TO
ENABLE SUCH PERSON TO (1) OBTAIN PERSONAL JURISDICTION OVER THE BORROWER OR (2)
REALIZE ON THE COLLATERAL, OR (3) IN ORDER TO ENFORCE A JUDGMENT OR OTHER COURT
ORDER ENTERED IN FAVOR OF SUCH PERSON. THE BORROWER AGREES THAT IT WILL NOT
ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY SUCH PERSON TO
REALIZE ON ANY SECURITY FOR THE OBLIGATIONS OR TO ENFORCE A JUDGMENT OR OTHER
COURT ORDER IN FAVOR OF SUCH PERSON. THE
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BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN
WHICH SUCH PERSON HAS COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION (B).
(C) VENUE. THE BORROWER IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
IN ANY JURISDICTION SET FORTH ABOVE.
(D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH,
RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES
AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.
(E) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENT TO EACH OTHER
PARTY HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY, THE
PROVISIONS OF SECTION 10.7 AND THIS SECTION 10.13, WITH ITS COUNSEL.
ARTICLE XI:
THE AGENT
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11.1 Appointment; Nature of Relationship. The First National Bank of
Chicago is appointed by the Lenders as the Agent hereunder and under each other
Loan Document, and each of the Lenders irrevocably authorizes the Agent to act
as the contractual representative of such Lender with the rights and duties
expressly set forth herein and in the other Loan Documents. The Agent agrees to
act as such contractual representative upon the express conditions contained in
this Article XI. Notwithstanding the use of the defined term "Agent," it is
expressly understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Holder of Secured Obligations by reason of this
Agreement and that the Agent is merely acting as the representative of the
Lenders with only those duties as are expressly set forth in this Agreement and
the other Loan Documents. In its capacity as the Lenders' contractual
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representative, the Agent (i) does not assume any fiduciary duties to any of the
Holders of Secured Obligations, (ii) is a "representative" of the Holders of
Secured Obligations within the meaning of Section 9-105 of the Uniform
Commercial Code and (iii) is acting as an independent contractor, the rights and
duties of which are limited to those expressly set forth in this Agreement and
the other Loan Documents. Each of the Lenders, for itself and on behalf of its
affiliates as Holders of Secured Obligations, agrees to assert no claim against
the Agent on any agency theory or any other theory of liability for breach of
fiduciary duty, all of which claims each Holder of Secured Obligations waives.
11.2 Powers. The Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties or fiduciary duties to the Lenders, or any
obligation to the Lenders to take any action hereunder or under any of the other
Loan Documents except any action specifically provided by the Loan Documents
required to be taken by the Agent.
11.3 General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is found in a final judgment by a court of
competent jurisdiction to have arisen solely from the Gross Negligence or
willful misconduct of such Person.
11.4 No Responsibility for Loans, Creditworthiness, Recitals, Etc. Neither
the Agent nor any of its directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into, or verify (i) any
statement, warranty or representation made in connection with any Loan Document
or any borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of any obligor under any Loan Document; (iii) the
satisfaction of any condition specified in Article V, except receipt of items
required to be delivered solely to the Agent; (iv) the existence or possible
existence of any Default or (v) the validity, effectiveness or genuineness of
any Loan Document or any other instrument or writing furnished in connection
therewith. The Agent shall not be responsible to any Lender for any recitals,
statements, representations or warranties herein or in any of the other Loan
Documents, for the perfection or priority of the Liens on any of the Collateral,
or for the execution, effectiveness, genuineness, validity, legality,
enforceability, collectibility, or sufficiency of this Agreement or any of the
other Loan Documents or the transactions contemplated thereby, or for the
financial condition of any guarantor of any or all of the Obligations, the
Borrower or any of its Subsidiaries.
11.5 Action on Instructions of Lenders. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders (or all of the Lenders in the event that and to the extent that
this Agreement expressly requires such), and such instructions and any action
taken or failure to act pursuant thereto shall be binding on all of the Lenders
and on all owners of Loans and on all Holders of Secured Obligations. The Agent
shall be fully
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justified in failing or refusing to take any action hereunder and under any
other Loan Document unless it shall first be indemnified to its satisfaction by
the Lenders pro rata against any and all liability, cost and expense that it may
incur by reason of taking or continuing to take any such action.
11.6 Employment of Agents and Counsel. The Agent may execute any of its
duties as the Agent hereunder and under any other Loan Document by or through
employees, agents, and attorney-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
11.7 Reliance on Documents; Counsel. The Agent shall be entitled to rely
upon any notice, consent, certificate, affidavit, letter, telegram, statement,
paper or document believed by it to be genuine and correct and to have been
signed or sent by the proper person or persons, and, in respect to legal
matters, upon the opinion of counsel selected by the Agent, which counsel may be
employees of the Agent.
11.8 The Agent's and the Alternate Currency Bank's Reimbursement and
Indemnification. The Lenders agree to reimburse and indemnify the Agent and the
Alternate Currency Bank ratably in proportion to their respective Pro Rata
Shares (i) for any amounts not reimbursed by the Borrower for which the Agent
and the Alternate Currency Bank is entitled to reimbursement by the Borrower
under the Loan Documents, (ii) for any other expenses incurred by the Agent or
the Alternate Currency Bank on behalf of the Lenders, in connection with the
preparation, execution, delivery, administration and enforcement of the Loan
Documents and (iii) for any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Agent or the Alternate Currency Bank in any way relating to or
arising out of the Loan Documents or any other document delivered in connection
therewith or the transactions contemplated thereby, or the enforcement of any of
the terms thereof or of any such other documents, provided that no Lender shall
be liable for any of the foregoing to the extent any of the foregoing is found
in a final non-appealable judgment by a court of competent jurisdiction to have
arisen solely from the Gross Negligence or willful misconduct of the Agent or
the Alternate Currency Bank.
11.9 Rights as a Lender. With respect to its Revolving Loan Commitment, its
Term Loan Commitment, Loans made by it, and Letters of Credit issued by it, the
Agent shall have the same rights and powers hereunder and under any other Loan
Document as any Lender or Issuing Bank and may exercise the same as though it
were not the Agent, and the term "Lender" or "Lenders", "Issuing Bank" or
"Issuing Banks" shall, unless the context otherwise indicates, include the Agent
in its individual capacity. The Agent may accept deposits from, lend money to,
and generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of
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its Subsidiaries in which such Person is not prohibited hereby from engaging
with any other Person.
11.10 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, the Arranger or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
11.11 Successor Agent. The Agent may resign at any time by giving written
notice thereof to the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right to appoint, on behalf of the Borrower and
the Lenders, a successor Agent. If no successor Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within thirty days after the retiring Agent's giving notice of resignation, then
the retiring Agent may appoint, on behalf of the Borrower and the Lenders, a
successor Agent. Notwithstanding anything herein to the contrary, so long as no
Default has occurred and is continuing, each such successor Agent shall be
subject to approval by the Borrower, which approval shall not be unreasonably
withheld. Such successor Agent shall be a commercial bank having capital and
retained earnings of at least $500,000,000. Upon the Acceptance of any
appointment as the Agent hereunder by a successor Agent, 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 hereunder and under the other Loan
Documents. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article XI shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Agent hereunder and under the other Loan Documents.
11.12 Collateral Documents. (a) Each Lender authorizes the Agent to enter
into each of the Collateral Documents to which it is a party and to take all
action contemplated by such documents. Each Lender agrees that no Holder of
Secured Obligations (other than the Agent) shall have the right individually to
seek to realize upon the security granted by any Collateral Document, it being
understood and agreed that such rights and remedies may be exercised solely by
the Agent for the benefit of the Holders of Secured Obligations upon the terms
of the Collateral Documents.
(b) In the event that any Collateral is hereafter pledged by any
Person as collateral security for the Obligations, the Agent is hereby
authorized to execute and deliver on behalf of the Holders of Secured
Obligations any Loan Documents necessary or appropriate to grant and perfect a
Lien on such Collateral in favor of the Agent on behalf of the Holders of
Secured Obligations.
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(c) The Lenders hereby authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon any
Collateral (i) upon termination of the Commitments and payment and satisfaction
of all of the Obligations at any time arising under or in respect of this
Agreement or the Loan Documents or the transactions contemplated hereby or
thereby; (ii) as permitted by, but only in accordance with, the terms of the
applicable Loan Document; or (iii) if approved, authorized or ratified in
writing by the Required Lenders, unless such release is required to be approved
by all of the Lenders hereunder. Upon request by the Agent at any time, the
Lenders will confirm in writing the Agent's authority to release particular
types or items of Collateral pursuant to this Section 11.12(c).
(d) Upon any sale or transfer of assets constituting Collateral which
is expressly permitted pursuant to the terms of any Loan Document, or consented
to in writing by the Required Lenders or all of the Lenders, as applicable, and
upon at least five (5) Business Days' prior written request by the Borrower, the
Agent shall (and is hereby irrevocably authorized by the Lenders to) execute
such documents as may be necessary to evidence the release of the Liens granted
to the Agent for the benefit of the Holders of Secured Obligations herein or
pursuant hereto upon the Collateral that was sold or transferred; provided,
however, that (i) the Agent shall not be required to execute any such document
on terms which, in the Agent's opinion, would expose the Agent to liability or
create any obligation or entail any consequence other than the release of such
Liens without recourse or warranty, and (ii) such release shall not in any
manner discharge, affect or impair the Secured Obligations or any Liens upon (or
obligations of the Borrower or any Subsidiary in respect of) all interests
retained by the Borrower or any Subsidiary, including (without limitation) the
proceeds of the sale, all of which shall continue to constitute part of the
Collateral.
ARTICLE XII:
SETOFF; RATABLE PAYMENTS
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12.1 Setoff. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if any Default occurs and is continuing, any
Indebtedness from any Lender to the Borrower (including all account balances,
whether provisional or final and whether or not collected or available) may be
offset and applied toward the payment of the Obligations owing to such Lender,
whether or not the Obligations, or any part hereof, shall then be due.
12.2 Ratable Payments. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Loans (other than payments received pursuant to
Sections 4.1, 4.2 or 4.4) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligation or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to the obligations owing to them. In case any such
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payment is disturbed by legal process, or otherwise, appropriate further
adjustments shall be made.
12.3 Application of Payments. Subject to the provisions of Section 9.2, the
Agent shall, unless otherwise specified at the direction of the Required Lenders
which direction shall be consistent with the last sentence of this Section 12.3,
apply all payments and prepayments in respect of any Obligations and all
proceeds of the Collateral in the following order:
(A) first, to pay interest on and then principal of any portion of the
Loans which the Agent may have advanced on behalf of any Lender for which the
Agent has not then been reimbursed by such Lender or the Borrower;
(B) second, to pay interest on and then principal of any advance made
under Section 10.3 for which the Agent has not then been paid by the Borrower or
reimbursed by the Lenders;
(C) third, to pay Obligations in respect of any fees, expenses,
reimbursements or indemnities then due to the Agent;
(D) fourth, to pay Obligations in respect of any fees, expenses,
reimbursements or indemnities then due to the Lenders and the issuer(s) of
Letters of Credit;
(E) fifth, to pay interest due in respect of Swing Line Loans;
(F) sixth, to pay interest due in respect of Loans (other than Swing
Line Loans) and L/C Obligations;
(G) seventh, to the ratable payment or prepayment of principal
outstanding on Swing Line Loans;
(H) eighth, to the ratable payment or prepayment of principal
outstanding on Loans (other than Swing Line Loans), Reimbursement Obligations
and Hedging Obligations under Hedging Agreements in such order as the Agent may
determine in its sole discretion;
(I) ninth, to provide required cash collateral, if required pursuant
to Section 3.11 and
(J) tenth, to the ratable payment of all other Obligations.
Unless otherwise designated (which designation shall only be applicable prior to
the occurrence of a Default) by the Borrower, all principal payments in respect
of Loans (other than Swing Line Loans) shall be applied first, to repay
outstanding Floating Rate Loans, and then to repay outstanding Eurocurrency Rate
Loans with those Eurocurrency Rate Loans which have earlier expiring Interest
Periods being repaid prior to those which have later expiring Interest Periods.
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The order of priority set forth in this Section 12.3 and the related provisions
of this Agreement are set forth solely to determine the rights and priorities of
the Agent, the Lenders, the Swing Line Bank and the issuer(s) of Letters of
Credit as among themselves. The order of priority set forth in clauses (D)
through (J) of this Section 12.3 may at any time and from time to time be
changed by the Required Lenders without necessity of notice to or consent of or
approval by the Borrower, or any other Person; provided, that the order of
priority of payments in respect of Swing Line Loans may be changed only with the
prior written consent of the Swing Line Bank. The order of priority set forth in
clauses (A) through (C) of this Section 12.3 may be changed only with the prior
written consent of the Agent.
12.4 Relations Among Lenders.
(A) Except with respect to the exercise of set-off rights of any
Lender in accordance with Section 12.1, the proceeds of which are applied in
accordance with this Agreement, and except as set forth in the following
sentence, each Lender agrees that it will not take any action, nor institute any
actions or proceedings, against the Borrower or any other obligor hereunder or
with respect to any Loan Document, without the prior written consent of the
Required Lenders or, as may be provided in this Agreement or the other Loan
Documents, at the direction of the Agent.
(B) The Lenders are not partners or co-venturers, and no Lender shall
be liable for the acts or omissions of, or (except as otherwise set forth herein
in case of the Agent) authorized to act for, any other Lender. The Agent shall
have the exclusive right on behalf of the Lenders to enforce on the payment of
the principal of and interest on any Loan after the date such principal or
interest has become due and payable pursuant to the terms of this Agreement.
ARTICLE XIII:
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
-------------------------------------------------
13.1 Successors and Assigns. The terms and provisions of the Loan Documents
shall be binding upon and inure to the benefit of the Borrower and the Lenders
and their respective successors and assigns, except that (i) the Borrower shall
not have the right to assign its rights or obligations under the Loan Documents
without the consent of all of the Lenders, and any such assignment in violation
of this Section 13.1(i) shall be null and void, and (ii) any assignment by any
Lender must be made in compliance with Section 13.3 hereof. Notwithstanding
clause (ii) of this Section 13.1 or Section 13.3, (i) any Lender may at any
time, without the consent of the Borrower or the Agent, assign all or any
portion of its rights under this Agreement to a Federal Reserve Bank and (ii)
any Lender which is a fund or commingled investment vehicle that invests in
commercial loans in the ordinary course of its business may at any time, without
the consent of the Borrower or the Agent, pledge or assign all or any part of
its rights under this Agreement to a trustee or other representative of holders
of obligations owed or securities issued by such Lender as collateral to secure
such obligations or securities; provided, however, that no such assignment or
pledge shall release the transferor Lender from its obligations hereunder.
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The Agent may treat each Lender as the owner of the Loans made by such Lender
hereunder for all purposes hereof unless and until such Lender complies with
Section 13.3 hereof in the case of an assignment thereof or, in the case of any
other transfer, a written notice of the transfer is filed with the Agent. Any
assignee or transferee of a Loan, Commitment, L/C Interest or any other interest
of a lender under the Loan Documents agrees by Acceptance thereof to be bound by
all the terms and provisions of the Loan Documents. Any request, authority or
consent of any Person, who at the time of making such request or giving such
authority or consent is the owner of any Loan, shall be conclusive and binding
on any subsequent owner, transferee or assignee of such Loan.
13.2 Participations.
(A) Permitted Participants; Effect. Subject to the terms set forth in
this Section 13.2, any Lender may, in the ordinary course of its 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 Revolving Loan Commitment of such Lender, any L/C Interest of such
Lender or any other interest of such Lender under the Loan Documents on a pro
rata or non-pro rata basis. Notice of such participation to the Borrower and the
Agent shall be required prior to any participation becoming effective with
respect to a Participant which is not a Lender or an Affiliate thereof. In the
event of any such sale by a Lender of participating interests to a Participant,
such Lender's obligations under the Loan Documents shall remain unchanged, such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, such Lender shall remain the owner of all Loans
made by it for all purposes under the Loan Documents, all amounts payable by the
Borrower under this Agreement shall be determined as if such Lender had not sold
such participating interests, 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 the Loan Documents except that, for purposes of
Article IV hereof, the Participants shall be entitled to the same rights as if
they were Lenders.
(B) Voting Rights. Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or waiver of
any provision of the Loan Documents other than any amendment, modification or
waiver with respect to any Loan, Letter of Credit or Revolving Loan Commitment
in which such Participant has an interest which forgives principal, interest or
fees or reduces the interest rate or fees payable pursuant to the terms of this
Agreement with respect to any such Loan or Revolving Loan Commitment, postpones
any date fixed for any regularly-scheduled payment of principal of, or interest
or fees on, any such Loan or Revolving Loan Commitment, or releases all or
substantially all of the Collateral, if any, securing any such Loan or Letter of
Credit.
(C) Benefit of Setoff. The Borrower agrees that each Participant shall
be deemed to have the right of setoff provided in Section 12.1 hereof in respect
to its participating interest in amounts owing under the Loan Documents to the
same extent as if the amount of its participating interest were owing directly
to it as a Lender under the Loan Documents, provided
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that each Lender shall retain the right of setoff provided in Section 12.1
hereof with respect to the amount of participating interests sold to each
Participant except to the extent such Participant exercises its right of setoff.
The Lenders agree to share with each Participant, and each Participant, by
exercising the right of setoff provided in Section 12.1 hereof, agrees to share
with each Lender, any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section 12.2 as if each
Participant were a Lender.
13.3 Assignments.
(A) Permitted Assignments. Any Lender (each such assigning Lender
under this Section 13.3 being a "Seller") may, in the ordinary course of its
business and in accordance with applicable law, at any time assign to one or
more banks or other entities ("PURCHASERS") all or a portion of its rights and
obligations under this Agreement (including, without limitation, its Revolving
Loan Commitment, all Loans owing to it, all of its participation interests in
existing Letters of Credit, and its obligation to participate in additional
Letters of Credit hereunder) in accordance with the provisions of this Section
13.3. Each assignment shall be of a constant, and not a varying, ratable
percentage of all of the Seller's rights and obligations under this Agreement.
Such assignment shall be substantially in the form of Exhibit D hereto and shall
not be permitted hereunder unless such assignment is either for all of such
Seller's rights and obligations under the Loan Documents or, without the prior
written consent of the Agent and the Alternate Currency Bank, involves loans and
commitments in an aggregate amount of at least $5,000,000 (which minimum amount
(i) shall not apply to any assignment between Lenders, or to an Affiliate or
Approved Fund of any Lender, and (ii) in any event may be waived by the Required
Lenders after the occurrence of a Default or Unmatured Event of Default). The
written consent of the Agent and the Alternate Currency Bank, and, prior to the
occurrence of a Default, and only with respect to any assignment other than to
another Lender, the Borrower (which consent, in each such case, shall not be
unreasonably withheld), shall be required prior to an assignment becoming
effective with respect to a Purchaser which is not a Lender or an Affiliate or
Approved Fund of such Lender.
(B) Effect; Effective Date. Upon (i) delivery to the Agent and the
Alternate Currency Bank of a notice of assignment, substantially in the form
attached as Appendix I to Exhibit D hereto (a "NOTICE OF ASSIGNMENT"), together
with any consent required by Section 13.3(A) hereof, (ii) payment of a $3,500
fee by the assignee or the assignor (as agreed) to the Agent for processing such
assignment, and (iii) the completion of the recording requirements in Section
13.3(C), such assignment shall become effective on the later of such date when
the requirements in clauses (i), (ii), and (iii) are met or the effective date
specified in such Notice of Assignment. The Notice of Assignment shall contain a
representation by the Purchaser to the effect that none of the consideration
used to make the purchase of the Commitment, Loans and L/C Obligations under the
applicable assignment agreement are "plan assets" as defined under ERISA and
that the rights and interests of the Purchaser in and under the Loan Documents
will not be "plan assets" under ERISA. On and after the effective date of such
assignment, such Purchaser, if not already a Lender, shall for all purposes be a
Lender party to this Agreement and any other Loan Documents executed by the
Lenders and shall have all the
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rights and obligations of a Lender under the Loan Documents, to the same extent
as if it were an original party hereto, and no further consent or action by the
Borrower, the Lenders, the Alternate Currency Bank or the Agent shall be
required to release the Seller with respect to the percentage of the Aggregate
Revolving Loan Commitment, Loans and Letter of Credit participations assigned to
such Purchaser. Upon the consummation of any assignment to a Purchaser pursuant
to this Section 13.3(B), the Seller, the Agent, the Alternate Currency Bank and
the Borrower shall make appropriate arrangements so that, to the extent notes
have been issued to evidence any of the transferred Loans, replacement notes are
issued to such Seller and new notes or, as appropriate, replacement notes, are
issued to such Purchaser, in each case in principal amounts reflecting their
Revolving Loan Commitment and their Term Loans, as adjusted pursuant to such
assignment. Notwithstanding anything to the contrary herein, the Borrower shall
not, at any time, be obligated to pay under Section 2.15(E) to any Lender that
is a Purchaser, assignee or transferee any sum in excess of the sum which the
Borrower would have been obligated to pay to the Lender that was the Seller,
assignor or transferor had such assignment or transfer not been effected.
(C) The Register. The Agent shall maintain at its address referred to
in Section 14.1 a copy of each assignment delivered to and accepted by it
pursuant to this Section 13.3 and a register (the "REGISTER") for the
recordation of the names and addresses of the Lenders and the Revolving Loan
Commitment of, principal amount of and interest on the Loans owing to, each
Lender from time to time and whether such Lender is an original Lender or the
assignee of another Lender pursuant to an assignment under this Section 13.3.
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrower and each of its Subsidiaries, the Agent
and the Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
13.4 Confidentiality. Subject to Section 13.5, the Agent and the Lenders
and their respective representatives shall hold all nonpublic information
obtained pursuant to the requirements of this Agreement and identified as such
by the Borrower in accordance with such Person's customary procedures for
handling confidential information of this nature and in accordance with safe and
sound commercial lending or investment practices and in any event may make
disclosure reasonably required by a prospective Transferee in connection with
the contemplated participation or assignment or as required or requested by any
Governmental Authority or any securities exchange or similar self-regulatory
organization or representative thereof or pursuant to a regulatory examination
or legal process, or to any direct or indirect contractual counterparty in swap
agreements or such contractual counterparty's professional advisor, and shall
require any such Transferee to agree (and require any of its Transferees to
agree) to comply with this Section 13.4. In no event shall the Agent or any
Lender be obligated or required to return any materials furnished by the
Borrower; provided, however, each prospective Transferee shall be required to
agree that if it does not become a participant or assignee it shall return all
materials furnished to it by or on behalf of the Borrower in connection with
this Agreement.
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<PAGE>
13.5 Dissemination of Information. The Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "TRANSFEREE") and any
prospective Transferee any and all information in such Lender's possession
concerning the Borrower and its Subsidiaries; provided that prior to any such
disclosure, such prospective Transferee shall agree to preserve in accordance
with Section 13.4 the confidentiality of any confidential information described
therein.
ARTICLE XIV:
NOTICES
-------
14.1 Giving Notice. Except as otherwise permitted by Section 2.14 with
respect to Borrowing/Conversion/Continuation Notices, all notices and other
communications provided to any party hereto under this Agreement or any other
Loan Documents shall be in writing or by telex or by facsimile and addressed or
delivered to such party at its address set forth below its signature hereto or
at such other address as may be designated by such party in a notice to the
other parties. Any notice, if mailed and properly addressed with postage
prepaid, shall be deemed given when received; any notice, if transmitted by
telex or facsimile, shall be deemed given when transmitted (answerback confirmed
in the case of telexes).
14.2 Change of Address. The Borrower, the Agent and any Lender may each
change the address for service of notice upon it by a notice in writing to the
other parties hereto.
ARTICLE XV:
COUNTERPARTS
------------
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Borrower, the Agent and the Lenders
and each party has notified the Agent by telex or telephone, that it has taken
such action.
ARTICLE XVI:
SCHEDULES
---------
If as after date of this Agreement, Borrower has not furnished to Agent and
Lenders any schedule required by the terms hereof, Borrower shall furnish any
such schedule to Agent and Lenders as promptly as practical, but in any event at
least five (5) days prior to the Closing Date.
[Remainder of This Page Intentionally Blank]
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IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have executed
this Agreement as of the date first above written.
SCHAWK, INC., as the Borrower
By: /s/ James J. Patterson
----------------------------------------
Name: James J. Patterson
Title: Senior Vice President and
Chief Financial Officer
Address: 165 North River Road
Des Plaines, Illinois 60018
Attention: Chief Financial Officer
Telephone No.: (847) 827-9494 ext. 235
Facsimile No.: (847) 827-7770
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<PAGE>
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent, As Swing Line Lender, or
Issuing Bank as Alternate Currency Bank
and as a Lender
By: /s/ Rick Beddell
----------------------------------------
Name: Rick Beddell
Title: Vice President
Address:
One First National Plaza
Chicago, Illinois 60670
Attention: Rick Beddell
Telephone No.: (312) 732-2413
Facsimile No.: (312) 732-1117
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<PAGE>
SCHEDULE I
EUROCURRENCY PAYMENT OFFICES
----------------------------
Agreed Currency The First National Bank of Chicago, as Agent and
Swing Loan Lender
Dollars The First National Bank of Chicago
Attn: Rick Beddell
One First National Plaza
Chicago, Illinois 60670
Pounds Sterling The First National Bank of Chicago
Cayman Islands Branch
Attn: Rick Beddell
One First National Plaza
Chicago, Illinois 60670
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