UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 29, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-16255
JOHNSON WORLDWIDE ASSOCIATES, INC.
(Exact name of Registrant as specified in its charter)
Wisconsin 39-1536083
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1326 Willow Road, Sturtevant, Wisconsin 53177
(Address of principal executive offices)
(414) 884-1500
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [ X ]
No [ ]
As of February 1, 1996, 6,890,026 shares of Class A and 1,228,537 shares
of Class B common stock of the Registrant were outstanding.
<PAGE>
JOHNSON WORLDWIDE ASSOCIATES, INC.
Page
Index No.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Operations -
Three Months Ended December 29, 1995
and December 30, 1994 3
Consolidated Balance Sheets -
December 29, 1995, September 29, 1995
and December 30, 1994 4
Consolidated Statements of Cash Flows -
Three Months Ended December 29, 1995 and
December 30, 1994 6
Notes to Consolidated Financial
Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 11
<PAGE>
JOHNSON WORLDWIDE ASSOCIATES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended
(thousands, except per share data) December 29 December 30
1995 1994
Net sales $56,405 $53,462
Cost of sales 35,084 33,278
------ ------
Gross profit 21,321 20,184
------ ------
Operating expenses:
Marketing and selling 15,545 14,339
Financial and administrative
management 6,057 5,951
Research and development 1,713 1,434
Profit sharing 43 58
Amortization of acquisition costs 681 384
------ ------
Total operating expenses 24,039 22,166
------ ------
Operating loss (2,718) (1,982)
Interest income (167) (170)
Interest expense 2,130 1,229
Other (income) expenses, net (50) 4
------- ------
Loss before income taxes (4,631) (3,045)
Income tax benefit (1,838) (1,104)
------- ------
Net loss $(2,793) $(1,941)
======= =======
Loss per common share $( .34) $( .24)
====== ======
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
JOHNSON WORLDWIDE ASSOCIATES, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
(thousands, except December 29 September 29 December 30
share data) 1995 1995 1994
ASSETS
Current assets:
Cash and temporary cash
investments $6,578 $8,944 $5,665
Accounts receivable, less
allowance for doubtful
accounts of $2,707,
$2,610, and $2,429,
respectively 63,632 61,456 58,894
Inventories 123,507 98,238 81,012
Deferred income taxes 7,458 7,423 7,332
Other current assets 11,443 9,319 9,712
------- ------- -------
Total current assets 212,618 185,380 162,615
Property, plant and equipment 34,039 33,028 27,781
Intangible assets 58,309 58,691 34,563
Other assets 935 1,254 2,529
------- ------- -------
Total assets $305,901 $278,353 $227,488
======= ======= =======
December 29 September 29 December 30
1995 1995 1994
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable and current
maturities of long-term
obligations $55,399 $18,563 $32,820
Accounts payable 19,353 14,623 13,361
Accrued liabilities:
Salaries and wages 5,195 5,792 4,567
Income taxes (476) 4,011 2,203
Other 14,283 20,866 12,770
------ ------ ------
Total current liabilities 93,754 63,855 65,721
Long-term obligations, less
current maturities 68,994 68,948 31,168
Other liabilities 4,324 4,288 5,605
------ ------- -------
Total liabilities 167,072 137,091 102,494
------- ------- -------
Shareholders' equity:
Preferred stock: none issued -- -- --
Common stock:
Class A shares issued:
December 29, 1995,
6,896,959;
September 29, 1995,
6,896,883;
December 30, 1994, 6,866,196 345 345 343
Class B shares issued
(convertible into Class A):
December 29, 1995, 1,228,537;
September 29, 1995,
1,228,613; December 30,
1994, 1,230,19 61 61 62
Capital in excess of par value 43,968 43,968 43,378
Retained earnings 86,387 89,525 77,597
Contingent compensation (224) (264) (201)
Cumulative translation
adjustment 8,294 7,869 4,379
Treasury stock:
December 29, 1995, 100 Class
A shares;
September 29, 1995, 10,000
Class A shares;
December 30, 1994, 25,000
Class A shares (2) (242) (564)
----- ----- -----
Total shareholders' equity 138,829 141,262 124,994
-------- ------- -------
Total liabilities and
shareholders' equity $305,901 $278,353 $227,488
======== ======= ========
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
JOHNSON WORLDWIDE ASSOCIATES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Three Months Ended
December 29 December 30
(thousands) 1995 1994
CASH USED FOR OPERATIONS
Net loss $(2,793) $(1,941)
Noncash items:
Depreciation and amortization 2,723 1,908
Deferred income taxes 191 249
Change in:
Accounts receivable, net (2,352) (4,355)
Inventories (25,335) (10,928)
Accrued restructuring expenses -- (684)
Accounts payable and accrued liabilities (6,638) (6,074)
Other, net (2,103) (1,525)
------- -------
(36,307) (23,350)
------- -------
CASH USED FOR INVESTING ACTIVITIES
Net additions to property, plant and
equipment (2,937) (2,755)
------- ------
CASH PROVIDED BY FINANCING ACTIVITIES
Issuance of senior notes 45,000 --
Principal payments on revolving credit
facilities (31,912) --
Net change in notes payable and other
long-term obligations 23,799 16,811
Common stock transactions (2) (516)
------ ------
36,885 16,295
Effect of foreign currency fluctuations on
cash (7) (113)
------ -------
Decrease in cash and temporary cash
investments (2,366) (9,923)
CASH AND TEMPORARY CASH INVESTMENTS
Beginning of period 8,944 15,588
------ -------
End of period $6,578 $5,665
======= =======
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
JOHNSON WORLDWIDE ASSOCIATES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1 Basis of Presentation
The consolidated financial statements included herein are unaudited.
In the opinion of management, these statements contain all adjustments
(consisting of only normal recurring items) necessary to present fairly
the financial position of Johnson Worldwide Associates, Inc. (the
Company) as of December 29, 1995 and the results of operations and cash
flows for the three months ended December 29, 1995. These consolidated
financial statements should be read in conjunction with the
consolidated financial statements and notes thereto included in the
Company's 1995 Annual Report.
Because of seasonal and other factors, the results of operations for
the three months ended December 29, 1995 are not necessarily indicative
of the results to be expected for the full year.
2 Income Taxes
The provision for income taxes includes deferred taxes and is based
upon estimated annual effective tax rates in the tax jurisdictions in
which the Company operates.
3 Inventories
December 29 September 29 December 30
(thousands) 1995 1995 1994
Raw materials $ 36,282 $ 28,726 $ 21,713
Work in process 6,896 5,888 5,352
Finished goods 85,651 68,742 60,674
------- ------- ------
128,829 103,356 87,739
Less: reserves (5,322) (5,118) (6,727)
------- ------- ------
$123,507 $ 98,238 $ 81,012
======= ======= ======
4 Notes Payable and Long-Term Obligations
In November 1995, the Company entered into a $90,000,000 multi-currency
bank facility. Interest on borrowings is set periodically by reference
to market rates such as the London Interbank Offered Rate. The
facility also supports issuance of commercial paper by the Company.
5 Shareholders' Equity
In December 1995, the Company granted options to purchase 105,000
shares of Class A common stock at $22.063 per share.
6 Earnings Per Share
Earnings per share of common stock are computed on the basis of a
weighted average number of common and common equivalent shares
outstanding. Common stock equivalents are not significant in any
period presented.
(thousands) Three Months Ended
December 29 December 30
1995 1994
Weighted average common and common 8,116 8,081
===== ======
7 Reclassification
Certain amounts as previously reported have been reclassified to
conform with the current period presentation.
<PAGE>
JOHNSON WORLDWIDE ASSOCIATES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion includes comments and analysis relating to the
Company s results of operations and financial condition for the three
months ended December 29, 1995 and December 30, 1994. This discussion
should be read in conjunction with the consolidated financial statements
and related notes that immediately precede this section, as well as the
Company s 1995 Annual Report.
Foreign Operations
The Company has significant foreign operations, for which the functional
currencies are denominated primarily in French francs, German marks,
Italian lire, Japanese yen and Canadian dollars. As the values of the
currencies of the foreign countries in which the Company has operations
increase or decrease relative to the U.S. dollar, the sales, expenses,
profits, assets and liabilities of the Company s foreign operations, as
reported in the Company s consolidated financial statements, increase or
decrease, accordingly. The Company mitigates a portion of the
fluctuations in certain foreign currencies through the purchase of forward
contracts and options to hedge known commitments, primarily for purchases
of inventory and loans denominated in foreign currencies.
Results of Operations
Net sales for the three months ended December 29, 1995 were $56.4 million,
an increase of approximately 5.5% from net sales of $53.5 million for the
three months ended December 30, 1994. Net sales of the Company s North
American units for the three months ended December 29, 1995 decreased $2.0
million, or 6%, from the corresponding period in the prior year. Softness
in the outdoor products business and a shift in order patterns of large
customers in the fishing business contributed to the decline, as did
availability issues related to a line of fishing products acquired in
1995. Net sales of the Company s European units increased $4.7 million,
or 23%, compared to the corresponding period of the preceding year.
Significant increases in sales in the European diving and outdoor products
businesses were responsible for the increase.
Relative to the U.S. dollar, the average value of most currencies of the
European countries in which the Company has operations was higher for the
three months ended December 29, 1995 as compared to the preceding year.
Excluding the impact of foreign currencies, net sales increased 3% for the
three months ended December 29, 1995.
Gross profit for the three months ended December 29, 1995, as a percentage
of sales, remained constant at 37.8%. No business unit or geographical
area experienced significant growth or declines in gross profit.
The Company incurred an operating loss of $2.7 million for the three
months ended December 29, 1995, compared to an operating loss of $2.0
million for the corresponding period of the prior year. The increase in
sales did not match the increased spending associated with such sales. In
addition, amortization of intangible assets was $0.3 million greater in
the current year as a result of acquisitions consummated in 1995.
Interest expense of $2.1 million for the three months ended December 29,
1995 was $0.9 million higher than the prior year. Higher debt levels
associated with acquisitions, higher levels of inventories and the growth
of the business contributed to the increase.
The Company incurred a net loss of $2.8 million in the three months ended
December 29, 1995 compared to a loss of $1.9 million in the corresponding
period of the preceding year. On a per share basis, the loss amounts to
$0.34 compared to $0.24 in the preceding year.
Financial Condition
Accounts receivable increased from $61.5 million at September 29, 1995 to
$63.6 million at December 29, 1995, in line with the increase in sales in
the three months then ended.
Inventory levels at December 29, 1995 were $25.3 million higher than the
level at September 29, 1995, reflecting the seasonal buildup of products
for the Company's peak selling season in the second and third quarters.
The increase in inventory in the three months ended December 30, 1994 was
$10.6 million. The increase in the seasonal buildup of inventory between
years reflects the Company's decision to level load production of certain
products in the current year and the growth of the Company s fishing
tackle business, which requires longer sourcing lead times. As a result
of this growth, inventory turns have declined 9% compared to the prior
year. The effect of foreign currencies in Europe also contribute to the
growth of inventory in the amount of $2.1 million. Accounts payable
increased from the September 29, 1995 level for the same reasons.
Debt levels at December 29, 1995 exceed the September 29, 1995 levels by
$36.9 million due to the growth in accounts receivable and inventories
discussed above, planned capital expenditures and the year to date losses
incurred. The Company s debt is balanced between long-term, fixed rate
obligations and short-term, floating rate facilities. Cash flows from
operations and borrowings under existing credit facilities are sufficient
to meet the Company s seasonal working capital and capital expenditure
requirements.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 4.1: Note Agreement dated as of October 1, 1995
Exhibit 4.2: Credit Agreement dated as of November 29, 1995
Exhibit 27: Financial Data Schedule
(b) There were no reports on Form 8-K filed for the three months
ended December 29, 1995.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JOHNSON WORLDWIDE ASSOCIATES,
Date: February 12, 1996
/s/ Carl G. Schmidt
Carl G. Schmidt
Senior Vice President and Chief
Financial Officer, Secretary and
Treasurer (Principal Financial
and Accounting Officer)
<PAGE>
EXHIBIT INDEX
Exhibit Description
4.1 Note Agreement dated as of October 1, 1995
4.2 Credit Agreement dated as of November 29, 1995
27. Financial Data Schedule
Johnson Worldwide Associates, Inc.
Note Agreement
Dated as of October 1, 1995
Re: $30,000,000 7.77% Senior Notes, Series A
Due October 15, 2005
and
$15,000,000 6.98% Senior Notes, Series B
Due October 15, 2005
<PAGE>
Table of Contents
Section Heading Page
Section 1. Description of Notes and Commitment . . . . . . . . . 1
Section 1.1. Description of Notes . . . . . . . . . . . . . . 1
Section 1.2. Commitment, Closing Date . . . . . . . . . . . . 2
Section 1.3. Several Commitments . . . . . . . . . . . . . . . 2
Section 2. Prepayment of Notes . . . . . . . . . . . . . . . . . 2
Section 2.1. Required Prepayments . . . . . . . . . . . . . . 2
Section 2.2. Optional Prepayments of Notes . . . . . . . . . . 4
Section 2.3. Prepayment of Notes upon Change of Control . . . 4
Section 2.4. Notice of Optional Prepayments . . . . . . . . . 5
Section 2.5. Allocation of Prepayments . . . . . . . . . . . . 6
Section 2.6. Direct Payment . . . . . . . . . . . . . . . . . 6
Section 3. Representations . . . . . . . . . . . . . . . . . . . 6
Section 3.1. Representations of the Company . . . . . . . . . 6
Section 3.2. Representations of the Purchasers . . . . . . . . 7
Section 4. Closing Conditions . . . . . . . . . . . . . . . . . . 7
Section 4.1. Closing Certificate . . . . . . . . . . . . . . . 7
Section 4.2. Legal Opinions . . . . . . . . . . . . . . . . . 7
Section 4.3. Company's Existence and Authority . . . . . . . . 7
Section 4.4. Consent of Holders of Other Securities . . . . . 7
Section 4.5. Legality of Investment . . . . . . . . . . . . . 8
Section 4.6. Related Transactions . . . . . . . . . . . . . . 8
Section 4.7. Satisfactory Proceedings . . . . . . . . . . . . 8
Section 4.8. Waiver of Conditions . . . . . . . . . . . . . . 8
Section 4.9. Private Placement Numbers . . . . . . . . . . . . 8
Section 4.10. Payment of Closing Costs . . . . . . . . . . . . 8
Section 5. Company Covenants . . . . . . . . . . . . . . . . . . 9
Section 5.1. Corporate Existence, Etc . . . . . . . . . . . . 9
Section 5.2. Insurance . . . . . . . . . . . . . . . . . . . . 9
Section 5.3. Taxes, Claims for Labor and Materials,
Compliance with Laws . . . . . . . . . . . . . . 9
Section 5.4. Maintenance, Etc . . . . . . . . . . . . . . . . 10
Section 5.5. Nature of Business . . . . . . . . . . . . . . . 10
Section 5.6. Limitations on Indebtedness . . . . . . . . . . . 10
Section 5.7. Limitation on Liens . . . . . . . . . . . . . . . 11
Section 5.8. Mergers Consolidations, Sales of Assets, Etc . . 13
Section 5.9. Consolidated Tangible Net Worth . . . . . . . . . 17
Section 5.10. Distributions . . . . . . . . . . . . . . . . . . 17
Section 5.11. Investments . . . . . . . . . . . . . . . . . . . 18
Section 5.12. Repurchase of Notes . . . . . . . . . . . . . . . 20
Section 5.13. Transactions with Affiliates . . . . . . . . . . 20
Section 5.14. ERISA Compliance . . . . . . . . . . . . . . . . 20
Section 5.15. Reports and Rights of Inspection . . . . . . . . 21
Section 6. Events of Default and Remedies Therefor . . . . . . . 24
Section 6.1 Events of Default . . . . . . . . . . . . . . . . 24
Section 6.2. Notice to Holders . . . . . . . . . . . . . . . . 26
Section 6.3 Acceleration of Maturities . . . . . . . . . . . 26
Section 6.4 Rescission of Acceleration . . . . . . . . . . . 27
Section 7. Amendments, Waivers And Consents . . . . . . . . . . . . 27
Section 7.1. Consent Required . . . . . . . . . . . . . . . . 27
Section 7.2. Effect of Amendment or Waiver . . . . . . . . . . 27
Section 7.3 Solicitation of Holders . . . . . . . . . . . . . 28
Section 8. Interpretation of Agreement; Definitions . . . . . . . . 28
Section 8.1. Definitions . . . . . . . . . . . . . . . . . . . 28
Section 8.2. Accounting Principles . . . . . . . . . . . . . . 35
Section 8.3. Directly or Indirectly . . . . . . . . . . . . . 36
Section 9. Miscellaneous . . . . . . . . . . . . . . . . . . . . 36
Section 9.1. Registration of Notes . . . . . . . . . . . . . . 36
Section 9.2. Exchange of Notes . . . . . . . . . . . . . . . . 36
Section 9.3. Loss, Theft, Etc. of Notes . . . . . . . . . . . 36
Section 9.4. Expenses, Stamp Tax Indemnity . . . . . . . . . . 37
Section 9.5. Powers and Rights Not Waived; Remedies Cumulative 37
Section 9.6. Notices . . . . . . . . . . . . . . . . . . . . . 37
Section 9.7. Successors and Assigns . . . . . . . . . . . . . 38
Section 9.8. Survival of Covenants and Representations . . . . 38
Section 9.9. Severability . . . . . . . . . . . . . . . . . . 38
Section 9.10. Reproduction of Documents . . . . . . . . . . . . 38
Section 9.11. Governing Law . . . . . . . . . . . . . . . . . . 38
Section 9.12. Submission of Jurisdiction; Waiver of Jury Trial 39
Section 9.13. Captions . . . . . . . . . . . . . . . . . . . . 39
Attachments to Note Agreement:
Schedule I - Name and Addresses of Purchasers
Schedule II - Description of Subsidiaries and Indebtedness of the
Company and its Restricted Subsidiaries
Exhibit A-1 - Form of 7.77% Senior Note
Exhibit A-2 - Form of 6.98% Senior Note
Exhibit B - Closing Certificate of the Company
Exhibit C - Description of Closing Opinion of Special Counsel
Exhibit D - Description of Closing Opinion of Independent Counsel
to Company
<PAGE>
Johnson Worldwide Associates, Inc.
1326 Willow Road
P.O. Box 901
Sturtevant, Wisconsin 53177
Note Agreement
Re: $30,000,000 7.77% Senior Notes, Series A
Due October 15, 2005
and
$15,000,000 6.98% Senior Notes, Series B
Due October 15, 2005
Dated as of October 1, 1995
To the Purchasers Named in
Schedule I hereto which are
signatories to this Agreement
Gentlemen:
The undersigned, Johnson Worldwide Associates, Inc., a Wisconsin
corporation, its successors and assigns (the "Company"), agrees with the
purchasers named in Schedule I to this Agreement (the "Purchasers") as
follows:
Section 1. Description of Notes and Commitment.
Section 1.1. Description of Notes. The Company will authorize the
issue and sale of:
(a) $30,000,000 aggregate principal amount 7.77% Senior Notes,
Series A, due October 15, 2005 (the "Series A Notes") to be dated the date
of issue, to bear interest from such date at the rate of 7.77% per annum,
payable semiannually on the fifteenth day of October and April in each
year (commencing April 15, 1996) and at maturity and to bear interest on
overdue principal (including any overdue required or optional prepayment
of principal) and Make-Whole Amount, if any, and (to the extent legally
enforceable) on any overdue installment of interest at the Overdue Rate
(as hereinafter defined) after the due date thereof, whether by
acceleration or otherwise, until paid, to be expressed to mature on
October 15, 2005, and to be substantially in the form attached hereto as
Exhibit A-1; and
(b) $15,000,000 aggregate principal amount 6.98% Senior Notes,
Series B, due October 15, 2005 (the "Series B Notes") to be dated the date
of issue, to bear interest from such date at the rate of 6.98% per annum,
payable semiannually on the fifteenth day of October and April in each
year (commencing April 15, 1996) and at maturity and to bear interest on
overdue principal (including any overdue required or optional prepayment
of principal) and Make-Whole Amount, if any, and (to the extent legally
enforceable) on any overdue installment of interest at the Overdue Rate
(as hereinafter defined) after the due date thereof, whether by
acceleration or otherwise, until paid, to be expressed to mature on
October 15, 2005, and to be substantially in the form attached hereto as
Exhibit A-2.
The Series A Notes and the Series B Notes are hereinafter
collectively referred to as the "Notes". Interest on the Notes shall be
computed on the basis of a 360-day year of twelve 30-day months. The
Notes are not subject to prepayment or redemption at the option of the
Company prior to their express maturity dates except on the terms and
conditions and in the amounts and with the Make-Whole Amount, if any, set
forth in Section 2 of this Agreement. The terms which are capitalized
herein shall have the meanings set forth in Section 8.l hereof unless the
context shall otherwise require.
Section 1.2. Commitment, Closing Date. Subject to the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, the Company agrees to issue and sell to each
Purchaser, and such Purchaser agrees to purchase from the Company, on the
Closing Date mentioned below, the principal amount of Notes set forth
opposite such Purchaser's name in Schedule I, at a price of 100% of the
principal amount thereof.
Delivery of the Notes so to be purchased by the Purchasers will be
made at the offices of Chapman and Cutler, 111 West Monroe, Chicago,
Illinois 60603, against payment therefor by wire transfer of Federal or
other funds current and immediately available at the principal office of
Huntington National Bank, ABA #044000024 for Account No. 0189-170494-1, in
the amount of the purchase price, at or about 10:00 a.m., on October 19,
1995 (the "Closing Date"). The Notes delivered to each Purchaser on the
Closing Date will be delivered to such Purchaser in the form of a single
registered Series A Note in the form attached hereto as Exhibit A-1 or a
single registered Series B Note in the form attached hereto as Exhibit
A-2, as the case may be, for the full amount of such Purchaser's purchase
(unless different denominations are specified by such Purchaser),
registered in such Purchaser's name or in the name of such Purchaser's
nominee, all as such Purchaser may specify at any time prior to the date
fixed for delivery.
Section 1.3. Several Commitments. The obligations of each
Purchaser shall be several and not joint and no Purchaser shall be liable
or responsible for the acts of any other Purchaser.
Section 2. Prepayment of Notes.
No prepayment of the Notes may be made except to the extent and in
the manner expressly provided in this Agreement.
Section 2.1. Required Prepayments.
(a) Required Prepayment of Series A Notes. In addition to
paying the entire remaining outstanding principal amount and the interest
due on the Series A Notes on the maturity date thereof, the Company agrees
to prepay and apply and there shall become due and payable the following
sums in respect of the aggregate principal indebtedness evidenced by the
Series A Notes:
Applicable Amount of
Required Payment Date Required Principal Payment
October 15, 1999 $3,000,000
October 15, 2000 $4,000,000
October 15, 2001 $4,000,000
October 15, 2002 $4,000,000
October 15, 2003 $5,000,000
October 15, 2004 $5,000,000
October 15, 2005 $5,000,000
(b) Required Prepayment of Series B Notes. In addition to
paying the entire remaining outstanding principal amount and the interest
due on the Series B Notes on the maturity date thereof, the Company agrees
to prepay and apply and there shall become due and payable the following
sums in respect of the aggregate principal indebtedness evidenced by the
Series B Notes:
Applicable Amount of
Required Payment Date Required Principal Payment
October 15, 1999 $2,500,000
October 15, 2000 $2,000,000
October 15, 2001 $2,000,000
October 15, 2002 $2,000,000
October 15, 2003 $2,500,000
October 15, 2004 $2,500,000
October 15, 2005 $1,500,000
(c) Effects of Required Prepayments.
No Make-Whole Amount shall be payable in connection with any required
prepayment made pursuant to Section 2.1(a) and (b). Any payment of less
than all the Notes of a Series pursuant to the provisions of Section 2.2
shall not relieve the Company of the obligation to make required payments
or prepayments on the Notes in accordance with the terms of Section 2.1(a)
and (b).
In the event the Company shall prepay less than all of the Notes
pursuant to Section 2.2 or repurchase any Notes in accordance with Section
5.12, the amount of the prepayments required by Section 2.1(a) and (b)
shall be reduced by an amount which is the same percentage of such
required prepayment as the percentage that the principal amount of Notes
of the Series so prepaid or repurchased is of the aggregate principal
amount of outstanding Notes of such Series immediately prior to such
prepayment or repurchase.
Section 2.2. Optional Prepayments of Notes. In addition to the
prepayments required by Section 2.1(a) and (b) and Section 2.3, the
Company shall have the privilege at any time of prepaying the then
outstanding Notes of both Series, either in whole or in part (but if in
part then in units of $100,000 in the aggregate or an integral multiple of
$10,000 in the aggregate in excess thereof) by payment of the principal
amount of the Notes of both Series and accrued interest thereon to the
date of such prepayment, together with an amount equal to the then
applicable Make-Whole Amount, determined as of three business days prior
to the date of such prepayment pursuant to this Section 2.2. Any such
prepayment shall be pro rata between each Series.
Section 2.3. Prepayment of Notes upon Change of Control. In the
event that any Change of Control (as hereinafter defined) shall occur, the
Company will give written notice (the "Company Notice") of such fact in
the manner provided in Section 9.6 of this Agreement to the holders of the
Notes. The Company Notice shall be delivered promptly and in any event no
later than three business days following the occurrence of any Change of
Control. The Company Notice shall (a) describe the facts and
circumstances of such Change of Control in reasonable detail, (b) make
reference to this Section 2.3 and the right of the holders of the Notes to
require payment on the terms and conditions provided for in this Section
2.3, (c) offer in writing to prepay the outstanding Notes of both Series,
together with accrued interest to the date of prepayment and an amount
equal to the then applicable Make-Whole Amount and (d) specify the date
for such prepayment (the "Change of Control Prepayment Date") which Change
of Control Prepayment Date shall be no earlier than the date the Change of
Control occurred and no later than fifteen (15) days after the date the
Change of Control occurred. The holders of at least 40% in aggregate
principal amount of outstanding Notes of each respective Series of Notes
shall have the right, by written notice given to the Company not later
than three business days prior to the Change of Control Prepayment Date,
to demand that the Company prepay all (but not less than all) of the
respective Series of Notes then held by such holders on such Change of
Control Prepayment Date. The prepayment price of any Notes payable upon
the Change of Control Prepayment Date shall be an amount equal to 100% of
the principal amount of the Notes so to be prepaid and accrued interest
thereon to the date of such prepayment, together with an amount equal to
the then applicable Make-Whole Amount, determined as of three business
days prior to the date of such prepayment pursuant to this Section 2.3.
Without limiting the foregoing, notwithstanding any failure on the
part of the Company to give the Company Notice herein required as a result
of the occurrence of a Change of Control, each holder of the Notes shall
have the right by delivery of written notice to the Company to require the
Company to prepay, and the Company will prepay, such holder's Notes in
full, together with accrued interest thereon to the date of prepayment and
an amount equal to the Make-Whole Amount at any time within ninety days
after such holder has actual knowledge of any such Change of Control.
Notice of any required prepayment pursuant to this Section 2.3 shall be
delivered by any holder of Notes which was entitled to, but did not
receive, such Company Notice to the Company after such holder has actual
knowledge of such Change of Control. On the date (the "Delayed Prepayment
Date") designated in such holder's notice (which shall be not earlier than
10 business days after the date of such holder's notice), the Company
shall prepay in full all Notes held by such holder together with accrued
interest thereon to the date of prepayment and an amount equal to the
Make-Whole Amount, determined as of three business days prior to the date
of such prepayment pursuant to this Section 2.3. If the holder of any
Note gives any notice pursuant to this second paragraph of Section 2.3,
the Company shall give a Company Notice within two business days of
receipt of such notice and identify the Delayed Prepayment Date to all
holders of the Notes and each of such holders shall then and thereupon
have the rights with respect to the prepayment of its Notes as set forth
in this Section 2.3; provided only that any date for prepayment of such
holder's Notes shall be the Delayed Prepayment Date.
As used in this Section 2.3, a "Change of Control" of the Company
shall be deemed to have occurred at such time or times as the Johnson
Family (as hereinafter defined), shall fail to own, directly or
indirectly, with full power to vote or to direct the voting of, more than
51% of the voting power of the Voting Stock of the Company.
The term "Johnson Family" shall mean, collectively, (i) Samuel C.
Johnson, his spouse, their children or grandchildren; (ii) any trust
directly or indirectly controlled by any one or more of such persons
described in (i) or any corporation described in (iii) below or any
present or former officer of any such corporation; (iii) any corporation
or partnership in which voting control as to such entity is held, directly
or indirectly, by any one or more of such persons described in (i) or such
trusts described in (ii) or by the executor or administrator of the estate
or other legal representative of any such person described in (i); and
(iv) the executor or administrator of the estate or other legal
representative of any person described in (i).
Section 2.4. Notice of Optional Prepayments. The Company will give
notice of any prepayment of the Notes pursuant to Section 2.2 to each
holder thereof not less than 30 days nor more than 60 days before the date
fixed for such optional prepayment specifying (a) such date, (b) the
principal amount of the holder's Notes of such Series to be prepaid on
such date, (c) that a Make-Whole Amount may be payable, (d) the date when
such Make-Whole Amount will be calculated which shall be the date three
business days prior to the prepayment date, (e) the estimated Make-Whole
Amount and (f) the accrued interest applicable to such prepayment. Notice
of prepayment having been so given, the aggregate principal amount of the
Notes of such Series specified in such notice, together with the
Make-Whole Amount, if any, and accrued interest thereon shall become due
and payable on the prepayment date. Not later than two business days
prior to the prepayment date specified in such notice, the Company shall
provide each holder of a Note of such Series written notice of the
Make-Whole Amount, if any, payable in connection with such prepayment and,
whether or not any Make-Whole Amount is payable, a reasonably detailed
computation thereof.
Section 2.5. Allocation of Prepayments. All partial prepayments of
Notes shall be applied on all outstanding Notes of the Series being
prepaid ratably in accordance with the unpaid principal amounts of such
Series; provided, however, that if as a result of the allocation of any
such partial prepayment to any outstanding Note of a Series, such Note of
such Series would then be reduced to an outstanding principal amount of
less than $3,000,000, then such Note of such Series may be exchanged in
whole by any holder thereof notwithstanding the provisions of Section 9.2
hereof and provided, further, that if as a result of the allocation of any
such partial prepayment to any outstanding Note of such Series, such Note
of such Series would then be reduced to an outstanding principal amount of
less than $500,000, then in connection with the payment of any such
partial prepayment, the Company shall pay such additional amount to the
holder of such Note of such Series as may be necessary to prepay the
remaining principal amount of such Note of such Series and accrued
interest thereon to the date of such prepayment, together with an amount
equal to the then applicable Make-Whole Amount thereon, determined as of
three business days prior to the date of such prepayment.
Section 2.6. Direct Payment. Notwithstanding anything to the
contrary in this Agreement or the Notes, in the case of any Note owned by
any Purchaser or any such Purchaser's nominee or owned by any other
Institutional Holder or its nominee which has given written notice to the
Company requesting that the provisions of this Section 2.6 shall apply,
the Company will promptly and punctually pay when due the principal
thereof and the Make-Whole Amount, if any, and interest thereon, without
any presentment thereof directly to such Purchaser, such Purchaser's
nominee or any such subsequent Institutional Holder or its nominee at its
address or such nominee's address set forth in Schedule I or at such other
address as such Purchaser, any such Purchaser's nominee or any such
subsequent Institutional Holder may from time to time designate in writing
to the Company or, if an account with a United States bank is designated
for such Purchaser or such Purchaser's nominee on Schedule I hereto or in
any written notice to the Company from such Purchaser, such Purchaser's
nominee or any such subsequent Institutional Holder, the Company will make
such payments in immediately available funds to such bank account before
10:00 A.M., marked for attention as indicated, or in such other manner or
to such other account in any bank in the United States as such Purchaser,
such Purchaser's nominee or any such subsequent Institutional Holder may
from time to time direct in writing.
Section 3. Representations.
Section 3.1. Representations of the Company. The Company
represents and warrants that all representations set forth in the form of
Closing Certificate attached hereto as Exhibit B are true and correct as
of the date of the execution and delivery hereof by the Company and are
incorporated herein by reference with the same force and effect as though
herein set forth in full.
Section 3.2. Representations of the Purchasers. Each Purchaser
represents, and in entering into this Agreement the Company understands,
that such Purchaser is acquiring the Notes for the purpose of investment
and not with a view to the distribution thereof; provided that the
disposition of such Purchaser's property shall at all times be and remain
within its control. Each Purchaser acknowledges that the Notes have not
and will not be registered under the Act and hereby agrees that it will
not reoffer, resell, pledge or otherwise transfer the Notes purchased by
it under this Agreement except pursuant to any available exemption from
the requirements of Section 5 of the Act and in accordance with any
applicable state securities laws. Each Purchaser further represents that
it is acquiring the Notes for its own account and with its general
corporate assets and not with the assets of separate account in which any
employee benefit plan has any interest. As used in this Section 3.2, the
terms "separate account" and "employee benefit plan" shall have their
respective meanings assigned to them in ERISA.
Section 4. Closing Conditions.
The obligation of each Purchaser to purchase the Notes on the Closing
Date shall be subject to the performance by the Company of its agreements
hereunder which by the terms hereof are to be performed at or prior to the
time of delivery of the Notes and to the following further conditions
precedent:
Section 4.1. Closing Certificate. Concurrently with the delivery
of Notes to such Purchaser on the Closing Date, such Purchaser shall have
received a Closing Certificate dated the Closing Date, signed by the Chief
Financial Officer of the Company, substantially in the form attached
hereto as Exhibit B, the truth and accuracy of which on the Closing Date
shall be a condition to such Purchaser's obligation to purchase the Notes
proposed to be purchased by such Purchaser.
Section 4.2. Legal Opinions. Concurrently with the delivery of
Notes to such Purchaser on the Closing Date, such Purchaser shall have
received from Chapman and Cutler, who are acting as special counsel to the
Purchasers in this transaction and from Foley & Lardner, independent
counsel to the Company, their respective opinions dated the Closing Date,
in form and substance satisfactory to such Purchaser, and covering the
matters set forth in Exhibits C and D, attached hereto.
Section 4.3. Company's Existence and Authority. On or prior to the
Closing Date, such Purchaser shall have received, in form and substance
reasonably satisfactory to such Purchaser, such documents and evidence
with respect to the Company as such Purchaser may reasonably request in
order to establish the existence and good standing of the Company and the
authorization of the transactions contemplated by this Agreement.
Section 4.4. Consent of Holders of Other Securities. Any consents
or approvals required to be obtained from any holder or holders of any
outstanding Security of the Company and any amendments of agreements
pursuant to which any Securities may have been issued which will be
necessary to permit the consummation of the transactions contemplated
hereby on the Closing Date shall have been obtained and all such consents
or amendments shall be satisfactory in form and substance to such
Purchaser.
Section 4.5. Legality of Investment. The Notes to be purchased by
such Purchaser shall be a legal investment for such Purchaser under the
laws of each jurisdiction to which such Purchaser may be subject (without
resort to any so-called basket provisions to such laws).
Section 4.6. Related Transactions. Concurrently with the issuance
and sale of Notes to such Purchaser, the Company shall have consummated
the sale of the entire principal amount of the Notes pursuant to this
Agreement.
Section 4.7. Satisfactory Proceedings. All proceedings taken in
connection with the transactions contemplated by this Agreement, and all
documents necessary to the consummation thereof, shall be satisfactory in
form and substance to such Purchaser, and such Purchaser shall have
received a copy (executed or certified as may be appropriate) of all legal
documents or proceedings taken in connection with the consummation of such
transactions.
Section 4.8. Waiver of Conditions. If on the Closing Date the
Company fails to tender to any Purchaser the Notes to be issued to any
Purchaser on such date or if the conditions specified in this Section 4
have not been fulfilled, such Purchaser may thereupon elect to be relieved
of all further obligations under this Agreement. Without limiting the
foregoing, if the conditions specified in this Section 4 have not been
fulfilled, such Purchaser may waive compliance by the Company with any
such condition to such extent as such Purchaser may in its sole discretion
determine. Nothing in this Section 4.8 shall operate to relieve the
Company of any of its obligations hereunder or to waive the Purchaser's
rights against the Company.
Section 4.9. Private Placement Numbers. The Company shall have
obtained for the Notes a Private Placement Number issued by Standard &
Poor's CUSIP Bureau (in cooperation with the Securities Valuation office
of the National Association of Insurance Commissioners).
Section 4.10. Payment of Closing Costs. The Company shall have paid
the costs, expenses and disbursements of such Purchaser's special counsel
which are reflected in statements of such counsel rendered prior to the
Closing pursuant to Section 9.4; and thereafter (without limiting the
provisions of Section 9.4) the Company will pay, promptly upon receipt of
any supplemental statements therefor, additional costs or fees, if any,
and expenses and disbursements of such Purchaser's counsel in connection
with the Closing (including disbursements unposted as of the Closing Date)
and attention to post-Closing matters.
Section 5. Company Covenants.
From and after the date of this Agreement and continuing so long as
any amount remains unpaid on any date:
Section 5.1. Corporate Existence, Etc. The Company will preserve
and keep in force and effect, and will cause each Restricted Subsidiary to
preserve and keep in force and effect, its corporate existence. The
Company will preserve and keep in force and effect, and will cause each
Restricted Subsidiary to preserve and keep in force and effect, all
franchises, licenses and permits necessary to the proper conduct of its
business. The foregoing provisions of this Section 5.1 shall not,
however, prevent any transaction not prohibited by Section 5.8.
Section 5.2. Insurance. The Company will maintain, and will cause
each Restricted Subsidiary to maintain, insurance coverage by financially
sound and reputable insurers consistent with such forms and amounts and
against such risks as are presently maintained by the Company and its
Restricted Subsidiaries provided that, notwithstanding the foregoing, the
Company and its Restricted Subsidiaries shall maintain insurance coverage
in such forms and amounts and against such risks as are customary for
business entities of established reputation engaged in the same or a
similar business and owning and operating similar properties.
Section 5.3. Taxes, Claims for Labor and Materials, Compliance with
Laws. (a) The Company will promptly pay and discharge, and will cause
each Restricted Subsidiary promptly to pay and discharge, all lawful
taxes, assessments and governmental charges or levies imposed upon it or
upon or in respect of all or any part of its property or business, all
trade accounts payable in accordance with usual and customary business
terms, and all claims for work, labor or materials, which if unpaid might
become a Lien or charge upon any of its property; provided the Company or
such Restricted Subsidiary shall not be required to pay any such tax,
assessment, charge, levy, account payable or claim if (1) the validity,
applicability or amount thereof is being contested in good faith by
appropriate actions or proceedings which will prevent the forfeiture or
sale of any property of the Company or such Restricted Subsidiary or any
material interference with the use thereof by the Company or such
Restricted Subsidiary and (2) the Company or such Restricted Subsidiary
shall set aside on its books, reserves deemed by the Company to be
adequate with respect thereto.
(b) The Company will promptly comply, and will cause each
Restricted Subsidiary to comply, in all material respects with all laws,
ordinances or governmental rules and regulations to which it is subject,
including without limitation, the Occupational Safety and Health Act of
1970, as amended, ERISA, and all laws, ordinances, governmental rules and
regulations relating to environmental protection in all applicable
jurisdictions, the violation of which would materially and adversely
affect the properties, business, prospects, profits or condition of the
Company and its Restricted subsidiaries, taken as whole, or would result
in any Lien not permitted under Section 5.7.
Section 5.4. Maintenance, Etc. The Company will maintain, preserve
and keep, and will cause each Restricted Subsidiary to maintain, preserve
and keep, its material properties which are used or useful in the conduct
of its business (whether owned in fee or a leasehold interest) in good
repair and working order, ordinary wear and tear excepted, and from time
to time will make all necessary repairs, replacements, renewals and
additions so that at all times the efficiency thereof shall be maintained.
Section 5.5. Nature of Business. Neither the Company nor any
Restricted Subsidiary will engage in any business if, as a result, the
general nature of the business, taken on a consolidated basis, which would
then be engaged by the Company and its Restricted Subsidiaries would be
substantially changed from the general nature of the business engaged by
the Company and its Restricted Subsidiaries on the date of this Agreement.
Section 5.6. Limitations on Indebtedness. (a) The Company will
not, and will not permit any Restricted Subsidiary to, create, issue,
assume, guarantee or otherwise incur or in any manner become liable in
respect of any additional Current Debt or Funded Debt except:
(1) the Notes;
(2) Current Debt and Funded Debt of the Company and its
Restricted Subsidiaries outstanding as of the date of this Agreement and
described on Schedule II attached hereto;
(3) Current Debt or Funded Debt of the Company and its
Restricted Subsidiaries; provided that at the time of creation, issuance,
assumption, guarantee or incurrence thereof and after giving effect
thereto and to the application of the proceeds thereof, Consolidated
Funded Debt would not exceed 50% of Consolidated Total Capitalization,
provided that for purposes of any determination of additional Funded Debt
to be issued or incurred within the limitation of this Section 5.6(a)(3),
the Average Outstanding Balance of Consolidated Current Debt (as defined
in Section 5.6(e) below) computed for the Compliance Period (as defined in
Section 5.6(e) below) preceding the date of any such determination shall
be deemed to constitute outstanding Funded Debt of the Company incurred as
of the last day of such Compliance Period and shall be deemed outstanding
at all times prior to the end of the next Compliance Period; and
(4) additional Current Debt or Funded Debt of a Restricted
Subsidiary to the Company or to an Eighty Percent-Owned Restricted
Subsidiary.
(b) The Company will not at any time permit the sum of (i)
Current Debt and Funded Debt of Restricted Subsidiaries (other than
Current Debt and Funded Debt owed to the Company or an Eighty
Percent-Owned Restricted Subsidiary), plus (ii) Funded Debt of the Company
and Restricted Subsidiaries secured by Liens permitted by Section
5.7(a)(9) to exceed 25% of Consolidated Tangible Assets.
(c) Any Person which becomes a Restricted Subsidiary after the
date hereof shall for all purposes of this Section 5.6 be deemed to have
created, assumed or incurred or issued at the time it becomes a Restricted
Subsidiary all Current Debt and Funded Debt of such Person existing
immediately after it becomes a Restricted Subsidiary.
(d) The renewal, extension or refunding of any Current Debt or
Funded Debt issued or incurred in accordance with the limitations of this
Section 5.6 shall constitute the Issue of additional Current Debt or
Funded Debt, as the case may be, which is, in turn, subject to the
limitations of the applicable provisions of this Section 5.6.
(e) For the purposes of Section 5.6(a) hereof, the following
terms shall have the meanings ascribed to them below:
"Average Outstanding Balance of Consolidated Current Debt" shall mean
the average of the aggregate unpaid principal amounts of Consolidated
Current Debt outstanding on each of the Company's July fiscal month-end,
August 15, the Company's August fiscal month-end, September 15 and the
Company's September fiscal month-end for each Compliance Period.
"Compliance Period" shall mean the period beginning on the date of
the Company's July fiscal month-end and ending on the date of the
Company's September fiscal month-end in each calendar year.
Section 5.7. Limitation on Liens. (a) The Company will not, and
will not permit any Restricted Subsidiary to, create or incur, or suffer
to be incurred or to exist, any Lien on its or their property or assets,
whether now owned or hereafter acquired, or upon any income or profits
therefrom, or transfer any property for the purpose of subjecting the same
to the payment of obligations in priority to the payment of its or their
general creditors, or acquire or agree to acquire or permit any Restricted
Subsidiary to acquire any property or assets pursuant to conditional sales
agreements or other title retention devices, except:
(1) Liens for property taxes and assessments or governmental
charges or levies and Liens securing claims or demands of mechanics and
materialmen; provided that payment thereof is not at the time required by
Section 5.3;
(2) Liens of or resulting from any judgment or award, the time
for the appeal or petition for rehearing of which shall not have expired,
or in respect of which the Company or a Restricted Subsidiary shall at any
time in good faith be prosecuting an appeal or proceeding for a review and
in respect of which a stay of execution pending such appeal or proceeding
for review shall have been secured;
(3) Liens incidental to the conduct of business or the
ownership of properties and assets (including, without limitation,
warehousemen's and attorneys' liens, statutory landlords' liens, workers'
compensation liens and ERISA liens) and deposits, pledges or Liens to
secure the performance of bids, tenders or trade contracts, or to secure
statutory obligations, surety or appeal bonds or other Liens of like
general nature incurred in the ordinary course of business and not in
connection with the borrowing of money; provided that the aggregate amount
of the obligations so secured will not materially impair the value of the
assets so secured or the use thereof in the ordinary course of business
and provided, further, that in each case, the obligation so secured will
not exceed $1,000,000 and is not overdue or, if overdue, is being
contested in good faith by appropriate actions or proceedings;
(4) minor survey exceptions or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and other
similar purposes, or zoning or other restrictions as to the use of real
properties, which are necessary for the conduct of the activities of the
Company and its Restricted Subsidiaries or which customarily exist on
properties of Persons engaged in similar activities and similarly situated
and which do not in any event materially impair their use in the operation
of the business of the Company and its Restricted Subsidiaries;
(5) Liens securing Indebtedness of a Restricted Subsidiary to
the Company or to an Eighty Percent-Owned Restricted Subsidiary;
(6) Liens existing as of the date of this Agreement securing
Indebtedness of the Company or any Restricted Subsidiary outstanding on
such date and described on Schedule II attached to this Agreement;
(7) Liens incurred after the date of this Agreement given to
secure the payment of the cost of the acquisition or construction of fixed
assets useful and intended to be used in carrying on the business of the
Company or a Restricted Subsidiary; provided that (i) the Lien shall
attach solely to the fixed assets acquired or constructed, (ii) the Lien
shall have been created or incurred within twelve (12) months of the date
of acquisition or the date of completion of construction, as the case may
be, of such fixed assets, (iii) at the time of the acquisition or
construction of such fixed assets the aggregate amount remaining unpaid on
all Indebtedness secured by Liens on such fixed assets whether or not
assumed by the Company or a Restricted Subsidiary shall not exceed an
amount equal to the lesser of the total cost or fair market value at the
time of acquisition or completion of construction of such fixed assets (as
determined in good faith by the Board of Directors of the Company) and
(iv) all such Indebtedness shall have been incurred within the applicable
limitations of Section 5.6;
(8) Liens existing on any assets at the time of acquisition
thereof or at the time of acquisition by the Company or a Restricted
Subsidiary of any business entity then owning such assets, whether or not
such existing Liens were given to secure the payment of the purchase price
of the assets to which they attach, so long as they were not incurred,
extended or renewed in contemplation of such acquisition; provided that
(i) any such Lien shall attach solely to the assets acquired or the assets
of such business entity and (ii) at the time of the acquisition of the
assets or business entity, as the case may be, the aggregate amount
remaining unpaid on all Indebtedness secured by Liens on such assets
(whether or not assumed by the Company or such Restricted Subsidiary)
shall not be in excess of the fair market value of such assets at the time
of such acquisition (as determined in good faith by the Board of Directors
of the Company);
(9) Liens incurred after the date of this Agreement given to
secure Funded Debt of the Company or any Restricted Subsidiary in addition
to the Liens permitted by the preceding clauses (1) through (8) hereof;
provided that all Indebtedness secured by such Liens shall have been
incurred within the applicable limitations of Section 5.6; and
(10) any extension, renewal or replacement of any Lien permitted
by the preceding clauses (6), (7) and (8) of this Section 5.7 in respect
of the same property theretofore subject to such Lien in connection with
the extension, renewal or refunding of the Indebtedness secured thereby;
provided that (i) such Lien shall attach solely to the same such property
and (ii) such extension, renewal or refunding of such Indebtedness shall
have been incurred within the applicable limitations of Section 5.6.
(b) In the event any property or assets of the Company or any
Restricted Subsidiary are subjected to a Lien not otherwise permitted by
this Section 5.7, the Company will make or cause to be made provision
whereby the Notes will be secured, to the full extent permitted under
applicable law, equally and ratably with all other obligations secured
thereby, and in any case the Notes shall (but only in such event) have the
benefit, to the full extent that the holders may be entitled thereto under
applicable law, of an equitable Lien on such property or assets equally
and ratably securing the Notes. Compliance with the provisions of this
paragraph shall not be deemed to constitute a waiver of, or consent to,
any Default or Event of Default caused by any violation of the provisions
of this Section 5.7.
Section 5.8. Mergers Consolidations, Sales of Assets, Etc. (a) The
Company will not, and will not permit any Restricted Subsidiary to,
consolidate with or be a party to a merger with or liquidate into any
other Person; provided, however, that:
(1) any Restricted Subsidiary may merge or consolidate with or
liquidate into the Company, any Wholly-Owned Subsidiary or any Restricted
Subsidiary that is the direct or indirect parent of such Restricted
Subsidiary and any Restricted Subsidiary (other than a Principal
Subsidiary) may merge or consolidate with or liquidate into any other
Restricted Subsidiary so long as (i) in any merger or consolidation
involving the Company, the Company shall be the surviving corporation and
(ii) in any merger, consolidation or liquidation involving a Domestic
Restricted Subsidiary and a non-Domestic Restricted Subsidiary, the
Domestic Restricted Subsidiary shall be the surviving corporation; and
(2) the Company or any Restricted Subsidiary may consolidate or
merge with any other corporation if (i) (in the case of a merger or
consolidation involving the Company) the surviving or acquiring
corporation (if other than the Company) (A) is organized and existing
under the laws of any State of the United States of America or the
District of Columbia, (B) shall expressly assume in writing the due and
punctual performance of all obligations of the Company under this
Agreement and the due and punctual payment of the principal of and
Make-Whole Amount if any, and interest on all the Notes, according to
their tenor, and (C) the Company or such surviving or acquiring
corporation shall furnish to the holders of the Notes an opinion of
counsel satisfactory to such holders to the effect that the instrument of
assumption has been duly authorized, executed and delivered and
constitutes the legal, valid and binding contract and agreement of the
surviving or acquiring corporation enforceable in accordance with its
terms, except as enforcement of such terms may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally, and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law), or (ii) (in the case of a merger or consolidation
involving a Restricted Subsidiary) such Restricted Subsidiary shall be the
surviving corporation and (iii) in the case of any consolidation or merger
described in either (i) or (ii), at the time of such consolidation or
merger, and after giving effect thereto (A) no Default or Event of Default
shall have occurred and be continuing and (B) the Company, such surviving
or acquiring corporation or such Restricted Subsidiary, as the case may
be, would be permitted to incur at least $1 of additional Funded Debt
under the applicable provisions of Section 5.6.
(b) The Company will not, and will not permit any Restricted
Subsidiary to, sell, lease, transfer, abandon or otherwise dispose of,
assets (other than (x) sales of goods, products, inventory or services in
the ordinary course of business to customers, (y) the sale, lease,
transfer or disposition of assets to the Company or a Domestic Restricted
Subsidiary if a merger between such transferor and such Domestic
Restricted Subsidiary would be permitted under Section 5.8(a)(1), and (z)
sales or other dispositions of assets, having a fair market value (as
determined in good faith by the chief financial officer of the Company) in
any single sale or disposition of not greater than $250,000 which the
Company determines have become inadequate, obsolete, worn out, unsuitable,
undesirable or unnecessary in the conduct of its business); provided that
the foregoing restrictions do not apply to the sale of assets for cash or
property to a Person or Persons if all of the following conditions are
met:
(1) either (i) the net book value of such assets, when added to
the net book value of all other assets sold, leased, transferred or
otherwise disposed of by the Company and its Restricted Subsidiaries
pursuant to this Section 5.8(b)(1) during the immediately preceding
twelve-month period do not constitute 10% of Consolidated Total Assets
(determined as of the end of the immediately preceding fiscal quarter) or
(ii) the sum of the portions of Consolidated Net Income contributed for
the immediately preceding twelve-month period (each as determined in good
faith by the chief financial officer of the Company) by (A) such assets,
(B) each Restricted Subsidiary (or portion thereof) disposed of during
such period and (C) other assets of the Company and its Restricted
Subsidiaries disposed of during such period pursuant to this Section
5.8(b)(1) do not constitute 10% of Consolidated Net Income for such
period; and
(2) immediately after the consummation of the transaction and
after giving effect thereto, (i) no Default or Event of Default would
exist and (ii) the Company would be permitted to incur at least $1 of
additional Funded Debt under the provisions of Section 5.6(a)(3).
Computations made pursuant to Section 5.8(b)(1) shall include
dispositions made pursuant to Sections 5.8(c)(3) and 5.8(c)(4) and
computations pursuant to Sections 5.8(c)(3) and 5.8(c)(4) shall include
dispositions made pursuant to Section 5.8(b)(1).
(c) The Company will not, and will not permit any Restricted
Subsidiary to, sell, transfer or otherwise dispose of any shares of
capital stock (including as "stock" for the purposes of this Section
5.8(c), any warrants, rights or options to purchase or otherwise acquire
stock or other Securities exchangeable for or convertible into such stock)
of any Restricted Subsidiary, and the Company will not permit any
Restricted Subsidiary to issue any shares of stock of such Restricted
Subsidiary (except for any sale, transfer, issuance or other disposition
of stock to the Company or a Restricted Subsidiary if a merger between
such transferor or issuer and such Restricted Subsidiary would be
permitted under Section 5.8(a)(1); provided that the foregoing
restrictions do not apply to:
(1) the sale, transfer or issuance of directors' qualifying
shares of capital stock;
(2) the sale, transfer or issuance of any de minimis number of
shares of capital stock to foreign domiciliaries as may be required by
law;
(3) the sale, transfer or other disposition of all or any part
of the shares of capital stock of any Restricted Subsidiary (other than a
Principal Subsidiary);
(4) the sale, transfer or other disposition of all shares of
capital stock of a Principal Subsidiary held by the Company and its
Restricted Subsidiaries if all of the following conditions are met:
(i) simultaneously with such sale, transfer, or disposition,
all shares of stock and all Indebtedness of such Principal Subsidiary at
the time owned by the Company and by every other Restricted Subsidiary
shall be sold, transferred or disposed of as an entirety;
(ii) the Board of Directors of the Company shall have
determined, as evidenced by a resolution thereof, that the proposed sale,
transfer or disposition of said shares of stock and Indebtedness is in the
best interests of the Company;
(iii) said shares of stock and Indebtedness are sold, transferred
or otherwise disposed of to a Person or Persons, for cash and/or tangible
assets and on terms reasonably deemed by the Board of Directors of the
Company to be adequate and satisfactory; and
(iv) the Principal Subsidiary being disposed of shall not have
any continuing investment in the Company or any other Restricted
Subsidiary not being simultaneously disposed of;
(5) the sale, transfer or issuance of shares of capital stock
of a Restricted Subsidiary in connection with the purchase or other
acquisition by the Company or a Restricted Subsidiary of all or
substantially all of the capital stock, properties or assets of any Person
or all or substantially all of the properties or assets of any Person
which constitute a distinct product line, division or other operating
segment; provided that:
(i) after giving effect to such sale, transfer or issuance and
such purchase or other acquisition, no Default or Event of Default would
then exist;
(ii) the aggregate fair value of all such capital stock,
properties or assets so acquired attributable to the issuance, sale or
transfer of such shares of capital stock in each sale, transfer or
issuance of such shares shall equal or exceed the fair value of such
shares (in each case as determined in good faith by the Board of Directors
of the Company at the time of such acquisition taking into consideration
the terms of any written agreement described in Section 5.8(c)(5)(iii)
below); and
(iii) the shares of capital stock are sold, transferred or issued
pursuant to a written agreement which (A) contemplates the subsequent
purchase or redemption of such shares by the Company or the Restricted
Subsidiary whose shares have been so sold, transferred or issued or any
direct or indirect parent of such Restricted Subsidiary upon request of
the transferee of such shares or upon demand by the Company or such
Restricted Subsidiary or any direct or indirect parent of such Restricted
Subsidiary made pursuant to the terms of such written agreement at a price
or prices computed by reference to such formulas or indices or other
references as are determined in good faith by the Board of Directors of
the Company at the time of such acquisition to be in the best interests of
the Company and its Restricted Subsidiaries and (B) prohibits the transfer
of such shares to any Person other than the Company or the Restricted
Subsidiary whose shares have been so sold, transferred or issued or any
direct or indirect parent of such Restricted Subsidiary; and
(6) the sale, transfer or issuance of capital stock to
employees of Restricted Subsidiaries as part of any incentive stock
arrangement other than any incentive stock agreement entered into in
connection with any purchase or acquisition contemplated by Section
5.8(c)(5) provided that:
(i) after giving effect to such issuance no Restricted
Subsidiary shall cease to be a Restricted Subsidiary; and
(ii) the aggregate fair value (in each case determined in good
faith at the time of such issuance by the Board of Directors of the
Company or such person or committee as the Board of Directors of the
Company may authorize to make such determination pursuant to the terms of
any such incentive stock arrangement) of all shares of capital stock of
such Restricted Subsidiaries issued to such employees shall not exceed
$2,000,000;
provided, however, that notwithstanding the foregoing, any sale, transfer,
issuance or other disposition of shares pursuant to Sections 5.8(c)(3) or
5.8(c)(4) may not be consummated if either (y) the net book value of the
assets of such Restricted Subsidiary attributable to such sale, transfer,
issuance or other disposition of shares when added to the net book value
of all other assets sold, leased, transferred or otherwise disposed of by
the Company and its Restricted Subsidiaries during the immediately
preceding twelve-month period would constitute more than 10% of
Consolidated Total Assets (determined as of the end of the immediately
preceding fiscal quarter) or (z) the portions of Consolidated Net Income
for the immediately preceding twelve-month period contributed (each as
determined in good faith by the chief financial officer of the Company) by
(1) such assets, (2) each Restricted Subsidiary (or portion thereof)
disposed of during such period and (3) other assets of the Company and its
Restricted Subsidiaries sold, leased, transferred or otherwise disposed of
by the Company and its Restricted Subsidiaries during such period would
exceed 10% of Consolidated Net Income for such period.
Computations made with respect to Sections 5.8(c)(3) and 5.8(c)(4) as
contemplated by this Section 5.8(c) shall include dispositions made within
the provisions of Sections 5.8(b)(1) and computations made pursuant to
Sections 5.8(b)(1) shall include dispositions made pursuant to Sections
5.8(c)(3) and 5.8(c)(4).
(d) Notwithstanding any other provision of this Section 5.8,
the Company may sell stock or assets of America Outdoors, Inc., Airguide
Instrument Co. and all of the Plastimo businesses. Sales of stock or
assets permitted by this Section 5.8(d) shall not be taken into account
for purposes of calculating the limitations on permitted sales of assets
and stock set forth in Section 5.8(b)(1) and the proviso at the end of
Section 5.8(c).
Section 5.9. Consolidated Tangible Net Worth. The Company will at
all times keep and maintain Consolidated Tangible Net Worth at an amount
not less than $25,000,000.
Section 5.10. Distributions. (a) The Company will not, and will not
permit any Restricted Subsidiary to, except as hereinafter provided:
(1) declare or pay any dividends, either in cash or property,
on any shares of its capital stock of any class (except dividends or other
distributions payable solely in shares of capital stock of the Company and
dividends paid by Restricted Subsidiaries to the Company or other
Restricted Subsidiaries in respect of capital stock of Restricted
Subsidiaries owned by the Company or such other Restricted Subsidiaries);
or
(2) directly or indirectly, or through any Subsidiary,
purchase, redeem or retire any shares of its capital stock of any class or
any warrants, rights or options to purchase or acquire any shares of its
capital stock (other than (i) in exchange for or out of the net cash
proceeds to the Company obtained within three months of such purchase,
redemption or retirement from the issue or sale of other shares of capital
stock of the Company or warrants, rights or options to purchase or acquire
any shares of its capital stock, or (ii) in connection with any purchase
or redemption of any shares of capital stock sold, transferred or issued
in accordance with Sections 5.8(c)(1), 5.8(c)(2) or 5.8(c)(5)); or
(3) make any other payment or distribution, either directly or
indirectly or through any Subsidiary, in respect of its capital stock;
(such declarations or payments of dividends, purchases, redemptions or
retirements of capital stock and warrants, rights or options and all such
other payments or distributions being herein collectively called
"Distributions"), unless after giving effect thereto no Default or Event
of Default would exist and the aggregate amount of Distributions made
during the period from and after June 14, 1991 to and including the date
of the making of the Distributions in question would not exceed the sum of
(1) $5,000,000, plus (2) 50% of Consolidated Net Income for such period,
computed on a cumulative basis for said entire period (or if such
Consolidated Net Income is a deficit figure, then minus 100% of such
deficit).
(b) For the purposes of this Section 5.10, the amount of any
Distribution declared, paid or distributed in property shall be deemed to
be the greater of the book value or fair market value (as determined in
good faith by the Board of Directors of the Company) of such property at
the time of the making of the Distribution in question.
(c) The Company will not authorize or make a Distribution on
its capital stock if after giving effect to the proposed Distribution:
(1) a Default or Event of Default would exist, or
(2) the Company could not incur at least $1.00 of additional
Funded Debt pursuant to Section 5.6(a)(3).
Section 5.11. Investments. The Company will not, and will not
permit any Restricted Subsidiary to, make any Investments, other than:
(a) Investments by the Company or a Restricted Subsidiary in
and to Restricted Subsidiaries, including any Investment in a Person
which, after giving effect to such Investment, will become a Restricted
Subsidiary;
(b) Investments in property or assets to be used in the usual
and ordinary course of business of the Company or its Restricted
Subsidiaries; provided that, after giving effect to any such Investment,
the Company remains in compliance with Section 5.5 hereof;
(c) Investments in commercial paper maturing in 270 days or
less from the date of issuance which, at the time of acquisition by the
Company or any Restricted Subsidiary, is accorded the highest rating by
Standard & Poor's Corporation, Moody's Investors Service, Inc. or another
credit rating agency of recognized national standing;
(d) Investments in direct obligations of the federal
governments of the United States of America, Canada or England and Wales
or any direct agency or instrumentality of any thereof, the payment or
guarantee of which constitutes a full faith and credit obligation of the
federal governments of the United States of America, Canada or England and
Wales or any direct agency or instrumentality of any thereof, as the case
may be, in each case, maturing in twelve months or less from the date of
acquisition thereof;
(e) Term Federal funds and banker's acceptances maturing within
180 days from the date of acquisition thereof and issued by a bank
organized under the laws of the United States, Canada, or England and
Wales, having capital, surplus and undivided profits aggregating at least
U.S. $l00,000,000; provided that the issuing institution has a rating of
A- or better by Keefe Bank Watch Service;
(f) Investments in certificates of deposit maturing within one
year from the date of acquisition thereof, issued by a bank or trust
company organized under the laws of the United States, having capital,
surplus and undivided profits aggregating at least $100,000,000 and whose
long-term certificates of deposit are, at the time of acquisition thereof
by the Company or a Restricted Subsidiary, rated A or better by Standard &
Poor's Corporation or by Moody's Investors Service, Inc.;
(g) loans or advances in the usual and ordinary course of
business to officers, directors, and employees incidental to carrying on
the business of the Company or any Restricted Subsidiary;
(h) receivables arising from the sale of goods and services in
the ordinary course of business of the Company and its Restricted
Subsidiaries; and
(i) other Investments (in addition to those permitted by the
foregoing provisions of this Section 5.11); provided that (1) all such
other Investments shall not exceed in the aggregate 25% of Consolidated
Tangible Net Worth Available for Investments and (2) after giving effect
to such other Investments, no Default or Event of Default would exist.
In valuing any Investments for the purpose of applying the
limitations set forth in this Section 5.11, such Investments shall be
taken at the original cost thereof, without allowance for any subsequent
write-offs or appreciation or depreciation therein, but less any amount
repaid or recovered on account of capital or principal.
For purposes of this Section 5.11, at any time when a Person becomes
a Restricted Subsidiary, all Investments of such Person at such time shall
be deemed to have been made by such Person, as a Restricted Subsidiary, at
such time.
Section 5.12. Repurchase of Notes. Neither the Company nor any
Subsidiary or Affiliate, directly or indirectly, may repurchase or make
any offer to repurchase any Notes unless the offer has been made in
writing to repurchase Notes, pro rata, from all holders of the Notes at
the same time and upon the same terms. In case the Company or any
Subsidiary repurchases any Notes, such Notes shall thereafter be cancelled
and no Notes shall be issued in substitution therefor.
Section 5.13. Transactions with Affiliates. The Company will not,
and will not permit any Restricted Subsidiary to, enter into or be a party
to any material transaction or arrangement with any Affiliate (including,
without limitation, the purchase from, sale to or exchange of property
with, or the rendering of any service by or for, any Affiliate), except
transactions reasonably deemed by the Company in good faith to be in the
best business interests of the Company or the concerned Restricted
Subsidiary and upon fair and reasonable terms no less favorable to the
Company or such Restricted Subsidiary than would obtain in a comparable
arm's-length transaction with a Person other than an Affiliate.
Section 5.14. ERISA Compliance. The Company will not, and will not
permit any Subsidiary to:
(a) permit any Plans at any time maintained by the Company or
any such Subsidiary to have any Unfunded Vested Pension Liabilities in
excess of $1,000,000 in the aggregate. As used herein, "Unfunded Vested
Pension Liability" shall mean an excess of the actuarial present value of
accumulated vested Plan benefits as at the end of the immediately
preceding Plan year of such Plans (or as of any more recent valuation
date) over the net assets allocated to such Plans which are available for
benefits, all as determined and disclosed in the most recent actuarial
valuation report for such Plans;
(b) cause any Plan which it or any Subsidiary maintains or in
which it or any Subsidiary participates at any time to:
(1) engage in any "prohibited transaction" (as such term is
defined in ERISA);
(2) incur any "accumulated funding deficiency" (as such term is
defined in ERISA) whether or not waived; or
(3) terminate any such Plan in a manner which could result in
the imposition of a lien on any property of the Company or any of its
Subsidiaries pursuant to ERISA;
(c) permit any condition to exist in connection with any Plan
which might constitute grounds for the PBGC to institute proceedings to
have such Plan terminated or a trustee appointed to administer such Plan;
or
(d) withdraw from any Multiemployer Plan if such withdrawal
shall subject the Company or any Subsidiary to withdrawal liability (as
described under Part 1 of Subtitle E of Title IV of ERISA) in excess of
$100,000.
All assumptions and methods used to determine the actuarial valuation
of vested employee benefits under any Plan at any time maintained by the
Company or any Subsidiary and the present value of assets of such Plans
shall be reasonable in the good faith judgment of the Company and shall
comply with all requirements of law.
Section 5.15. Reports and Rights of Inspection. The Company will
keep, and will cause each Restricted Subsidiary to keep, proper books of
record and account in which full and correct entries will be made of all
dealings or transactions of or in relation to its business and affairs, in
accordance with relevant accounting principles consistently applied and in
the case of the Company and any Domestic Restricted Subsidiaries in
accordance with GAAP (except for changes disclosed in the financial
statements furnished to the Holders pursuant to this Section 5.15 and
concurred in by the independent public accountants referred to in Section
5.15(b)), and will furnish to each Institutional Holder of the outstanding
Notes (in duplicate if so specified below or otherwise requested) and, in
the case of the financial statements delivered pursuant to paragraph (b)
of this Section 5.15, to the Securities Valuation Office, National
Association of Insurance Commissioners, 67 Wall Street, New York, New York
10005:
(a) Quarterly Statements. As soon as available and in any
event within 45 days after the end of each quarterly fiscal period (except
the last) of each fiscal year, duplicate copies of:
(1) a consolidated balance sheet of the Company and its
Restricted Subsidiaries as of the close of such quarterly period, setting
forth in comparative form the consolidated figures for the corresponding
period for the preceding fiscal year,
(2) a consolidated statement of income of the Company and its
Restricted Subsidiaries for such quarterly fiscal period and for the
portion of the fiscal year ending with such quarterly fiscal period, in
each case setting forth in comparative form the consolidated figures for
the corresponding periods of the preceding fiscal year, and
(3) a consolidated statement of cash flows of the Company and
its Restricted Subsidiaries for the portion of the fiscal year ending with
such quarterly fiscal period, setting forth in comparative form the
consolidated figures for the corresponding period of the preceding fiscal
year, all in reasonable detail and certified as complete and correct by an
authorized financial officer of the Company;
(b) Annual Statements. As soon as available and in any event
within 90 days after the close of each fiscal year of the Company,
duplicate copies of:
(1) consolidated balance sheets of the Company and its
Restricted Subsidiaries as of the close of such fiscal year, and
(2) consolidated statements of income and retained earnings and
cash flows of the Company and its Restricted Subsidiaries for such fiscal
year,
in each case setting forth in comparative form the consolidated figures
for the preceding fiscal year, all in reasonable detail and accompanied by
an opinion thereon of a firm of independent public accountants of
recognized national standing selected by the Company, unqualified as to
scope, to the effect that the consolidated financial statements present
fairly, in all material respects, the consolidated financial position of
the Company and its Restricted Subsidiaries as of the end of the fiscal
year being reported on and the consolidated results of the operations and
cash flows for said year in conformity with GAAP and that the examination
of such accountants in connection with such financial statements has been
conducted in accordance with generally accepted auditing standards and
included such tests of the accounting records and such other auditing
procedures as were considered necessary in the circumstances;
(c) Audit Reports. Promptly upon initiation thereof, written
notice of each interim or special audit to be made by independent
accountants of the books of the Company or any Restricted Subsidiary and
any management letter to be delivered from such accountants in connection
therewith;
(d) SEC and Other Reports. Promptly upon their becoming
available, one copy of each financial statement, report, notice, press
release or proxy statement sent by the Company to stockholders generally
or made available to the public and one copy of each regular or periodic
report, registration statement or prospectus filed by the Company or any
Restricted Subsidiary with any securities exchange or the Securities and
Exchange Commission or any successor agency, and, if the Purchasers or any
such Institutional Holder so requests, one copy of any material order in
any proceedings to which the Company or any of its Restricted Subsidiaries
is a party, issued by any governmental agency, Federal or state, having
jurisdiction over the Company or any of its Restricted Subsidiaries;
(e) Officers' Certificates. Within the periods provided in
paragraphs (a) and (b) above, a certificate of an authorized financial
officer of the Company stating that such officer has reviewed the
provisions of this Agreement and setting forth: (1) the information and
computations (in sufficient detail) required in order to establish whether
the Company was in compliance with the applicable requirements of Sections
5.6 through 5.11 hereof at the end of the period covered by the financial
statements then being furnished and (2) whether, to the best of his
knowledge based on such review, there existed as of the date of such
financial statements or there exists on the date of the certificate or
existed at any time during the period covered by such financial statements
any Default or Event of Default and, if any such condition or event exists
on the date of the certificate or existed during such period, specifying
the nature and extent thereof and the action the Company is taking, has
taken or proposes to take with respect thereto; provided further, that
such certificates as are delivered with respect to the period provided for
in paragraph (b) above, shall include a list of any changes in Restricted
Subsidiaries as at the end of such period;
(f) Accountants Certificates. Within the period provided in
paragraph (b) above, a certificate of the accountants who are reporting
upon such financial statements, stating that they have reviewed this
Agreement and, stating further, whether in making their audit such
accountants (1) have not become aware that the Company and the Restricted
Subsidiaries have failed to comply with the terms, covenants, provisions,
or conditions contained in Section 5 hereof and (2) have examined the
schedules to such reports or other certificates or documents containing
calculations of the financial covenants required to be performed or
observed pursuant to Sections 5.6 through 5.11 hereof, and in their
opinion, the information set forth in such schedules or other certificates
or documents is fairly stated in all material respects in relation to the
annual consolidated financial statements taken as a whole;
(g) ERISA Notices. Promptly upon learning of the occurrence of
any of the following, written notice thereof, describing the same and the
steps being taken by the Company or any Subsidiary affected with respect
thereto, and when known, any action taken or threatened by the Internal
Revenue Service, Department of Labor or the PBGC with respect thereto: (1)
a Reportable Event with respect to any Plan; (2) the institution of any
steps by the Company, any ERISA Affiliate, the PBGC or any other person to
terminate any Plan other than a "standard termination" under Section
4041(b) of ERISA; (3) the institution of any steps by the Company or any
ERISA Affiliate to withdraw from any Multiemployer Plan; (4) a "prohibited
transaction" within the meaning of Section 406 of ERISA in connection with
any Plan; or (5) any material increase in the contingent liability of the
Company or any subsidiary with respect to any post-retirement welfare
liability; and
(h) Requested Information. With reasonable promptness, such
other data and information as the Purchasers or any such Institutional
Holder may reasonably request, including, without limitation, such
financial or other information as any holder of the Notes or any Person
designated by such holder may reasonably determine as required to permit
such holder to comply with requirements of Rule 144A promulgated under the
Act in connection with the resale by it of the Notes.
Without limiting the foregoing, the Company will permit any Purchaser, so
long as such Purchaser is the holder of any Note, and each Institutional
Holder of the then outstanding Notes (or such agent(s) as either such
Purchaser or such Institutional Holder may designate) to visit and
inspect, under the Company's guidance, any of the properties of the
Company or any Restricted Subsidiary, and to examine all of their books
of account, records, reports and other papers, to make copies and extracts
therefrom, and to discuss their respective affairs, finances and accounts
with their respective officers, employees, and independent public
accountants (and by this provision the Company authorizes such accountants
to discuss with any Purchaser the finances and affairs of the Company and
its Restricted Subsidiaries) all at such reasonable times and as often as
may be reasonably requested. The Company shall be required to pay or
reimburse any such Purchaser or any such Institutional Holder for
reasonable expenses which such Purchaser or any such Institutional Holder
may incur in connection with any such visitation or inspection occurring
at such time as any Event of Default shall have occurred and be
continuing.
All information which is furnished to or obtained by any holder of
Notes pursuant to this Section 5.15 or otherwise pursuant to this
Agreement shall, if so requested in writing by the Company, be received
and held in confidence unless or until the same has been publicly
disclosed by the Company; provided, however, nothing herein contained
shall limit or impair the right or obligation of any Institutional Holder
of the Notes to disclose such information: (a) to its auditors, attorneys,
employees or agents, (b) when required by any law, ordinance or
governmental order, regulation, rule, policy, investigation or any
regulatory authority request, (c) as may be required or appropriate in any
report, statement or testimony submitted to any municipal, state,
provincial or Federal regulatory body having or claiming to have
jurisdiction over such Institutional Holder or to the United States
National Association of Insurance Commissioners or similar organizations
or their successors, (d) which is publicly available or readily
ascertainable from public sources, or which is received by any
Institutional Holder of the Notes from a third Person who or which is not
bound to keep the same confidential, (e) in connection with any
proceeding, case or matter pending (or on its face purported to be
pending) before any court, tribunal, arbitration board or any governmental
agency, commission, authority, board or similar entity, (f) in connection
with the enforcement by an Institutional Holder of its rights under or in
respect of this Agreement or the Notes after the occurrence of a Default
or Event of Default, or (g) to the extent necessary in connection with any
contemplated transfer of any of the Notes by an Institutional Holder
thereof (it being understood and agreed that any such transferee which
purchases such Notes shall itself be bound by the terms and provisions
hereof.)
Section 6. Events of Default and Remedies Therefor.
Section 6.1 Events of Default. Any one or more of the following
shall constitute an "Event of Default" as the term is used herein:
(a) Default shall occur in the payment of interest on any Note
when the same shall have become due and such default shall continue for
more than five days; or
(b) Default shall occur in the making of any required
prepayment on any of the Notes as provided in Section 2; or
(c) Default shall occur in the making of any other payment of
the principal of any Note or the premium thereon at the expressed or any
accelerated maturity date or at any date fixed for prepayment; or
(d) Default shall be made in the payment of the principal of or
interest on Indebtedness for borrowed money of the Company or any
Restricted Subsidiary (other than the Notes) aggregating more than
$3,000,000 as and when the same shall become due and payable by the lapse
of time, by declaration, by call for redemption or otherwise, and such
default shall continue beyond the period of grace, if any, allowed with
respect thereto; or
(e) Default or the happening of any event shall occur under any
indentures, agreements or other instruments (other than the Agreement)
under which any Indebtedness for borrowed money of the Company or any
Restricted Subsidiary aggregating more than $3,000,000 may be issued and
such defaults or events shall continue for a period of time sufficient to
permit the acceleration of the maturity of such Indebtedness of the
Company or such Restricted Subsidiaries, as the case may be, outstanding
thereunder; or
(f) Default shall occur in the observance or performance of any
covenant or agreement contained in Section 5.6 through Section 5.11
hereof; or
(g) Default shall occur in the observance or performance of any
other provision of this Agreement which is not remedied or waived within
30 days after the chief executive officer or the chief operating officer
or the chief financial officer of the Company first has actual knowledge
of such default; or
(h) if any representation or warranty made by the Company
herein, or made by the Company in any statement or certificate furnished
by the Company or any Subsidiary in connection with the consummation of
the issuance and delivery of the Notes or furnished by the Company or any
Subsidiary pursuant hereto, is untrue in any material respect as of the
date of the issuance or making thereof; or
(i) final judgment or judgments for the payment of money
aggregating in excess of $1,000,000 is or are outstanding against the
Company or any Restricted Subsidiary or against any property or assets of
either and any one of such judgments has remained unpaid, unvacated,
unbonded or unstayed by appeal or otherwise for a period of 60 days from
the date of its entry; provided, however, that the existence of such
judgment or judgments shall not constitute an Event of Default if (1) the
aggregate amount of such judgment or judgments shall be fully covered by
insurance issued by financially sound and reputable insurers and (2)
within such 60 day period, the Company shall have caused such insurers to
provide the holders of the Notes with written confirmation that such
coverage (i) equals or exceeds the amount of such judgment or judgments
and (ii) is not being contested as to amount or coverage by such insurers;
or
(j) a custodian, receiver, liquidator or trustee of the Company
or any Principal Subsidiary, or of any of the property of either, is
appointed or takes possession and such appointment or possession remains
uncontested or in effect for more than 60 days; or the Company or any
Principal Subsidiary generally fails to pay its debts as they become due
or admits in writing its inability to pay its debts as they mature; or the
Company or any Principal Subsidiary is adjudicated bankrupt or insolvent;
or an order for relief is entered under the Federal Bankruptcy Code
against the Company or any Principal Subsidiary; or any of the material
property of either is sequestered by court order and the order remains in
effect for more than 60 days; or a petition is filed against the Company
or any Principal Subsidiary under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation
law of any jurisdiction, whether now or subsequently in effect, and is not
stayed or dismissed within 60 days after filing; or
(k) the Company or any Principal Subsidiary files a petition in
voluntary bankruptcy or seeking relief under any provision of any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction, whether now or
subsequently in effect; or consents to the filing of any petition against
it under any such law; or consents to the appointment of or taking
possession by a custodian, receiver, trustee or liquidator of the Company,
any Principal Subsidiary, or any of the property of either.
Section 6.2. Notice to Holders. When any Event of Default
described in Section 6.1 has occurred, or if the holder of any Note or of
any other evidence of Indebtedness of the Company gives any notice or
takes any other action with respect to a claimed default, the Company
agrees to give notice within three business days of such event to all
holders of the Notes then outstanding.
Section 6.3 Acceleration of Maturities. When any Event of Default
described in paragraph (a), (b) or (c) of Section 6.1 has happened and is
continuing, any holder of any Note may, and when any Event of Default
described in paragraphs (d) through (i), inclusive, of Section 6.1 has
happened and is continuing, the holder or holders of 70% or more of the
principal amount of Notes at the time outstanding may, in addition to any
other rights and remedies available at law or in equity, by notice in
writing sent in the manner provided in Section 9.6 hereof to the Company,
declare the entire principal and all interest accrued on all Notes to be,
and all Notes shall thereupon become, forthwith due and payable, without
any presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived. When any Event of Default described in
paragraph (j) or (k) of Section 6.1 has occurred, then all outstanding
Notes shall immediately become due and payable without presentment, demand
or notice of any kind. Upon the Notes becoming due and payable as a
result of any Event of Default as aforesaid, the Company will forthwith
pay to the holders of the Notes the entire principal and interest accrued
on the Notes plus, to the extent not prohibited by law, an amount as
liquidated damages for the loss of the bargain evidenced hereby (and not
as a penalty) equal to the applicable Make-Whole Amount determined as of
the date on which the Notes shall so become due and payable. No course of
dealing on the part of any holder of the Notes nor any delay or failure on
the part of any holder of the Notes to exercise any right shall operate as
a waiver of such right or otherwise prejudice such holder's rights,
powers and remedies. The Company further agrees, to the extent permitted
by law, to pay to the holder or holders of the Notes all reasonable costs
and expenses incurred by them in the collection of any Notes upon any
default hereunder or thereon, including reasonable compensation to such
holder's or holders' attorneys for all services rendered in connection
therewith.
Section 6.4 Rescission of Acceleration. The provisions of Section
6.3 are subject to the condition that if the principal of and accrued
interest on all or any outstanding Notes have been declared immediately
due and payable by reason of the occurrence of any Event of Default
described in paragraphs (a) through (i), inclusive, of Section 6.1, the
holders of not less than 75% in aggregate principal amount of the Notes
then outstanding may, by written instrument filed with the Company,
rescind and annul such declaration and the consequences thereof; provided
that at the time such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the payment of
any monies due pursuant to the Notes or the Agreement;
(b) all arrears of interest on all the Notes and all other sums
payable under the Notes and under the Agreement (except any principal,
interest or premium on the Notes which has become due and payable solely
by reason of such declaration under Section 6.3) shall have been duly
paid; and
(c) each and every other Default and Event of Default shall
have been made good, cured or waived pursuant to Section 7.1;
and provided further that no such rescission and annulment shall extend to
or affect any subsequent Default or Event of Default or impair any right
consequent thereto.
Section 7. Amendments, Waivers And Consents
Section 7.1. Consent Required. Any term, covenant, agreement or
condition of this Agreement may, with the consent of the Company, be
amended or compliance therewith may be waived (either generally or in a
particular instance and either retroactively or prospectively), if the
Company shall have obtained the consent in writing of the holders of at
least 70% in aggregate principal amount of outstanding Notes; provided
that without the written consent of the holders of all of the Notes then
outstanding, no such amendment or waiver shall be effective (a) which will
change the time of payment (including any prepayment required by Section
2.1) of the principal of or the interest on any Note or reduce the
principal amount thereof or change the rate of interest thereon, or (b)
which will change any of the provisions with respect to optional
prepayments, or (c) which will change the percentage of holders of the
Notes required to consent to any such amendment or waiver of any of the
provisions of this Section 7 or Section 6.
Section 7.2. Effect of Amendment or Waiver. Any such amendment or
waiver shall apply equally to all of the holders of the Notes and shall be
binding upon them, upon each future holder of any Note and upon the
Company, whether or not such Note shall have been marked to indicate such
amendment or waiver. No such amendment or waiver shall extend to or
affect any obligation not expressly amended or waived or impair any right
consequent thereon.
Section 7.3 Solicitation of Holders. The Company will not
solicit, request or negotiate for or with respect to any proposed waiver
or amendment of any of the provisions of the Agreements or the Notes
unless each holder of the Notes shall be informed thereof by the Company
and shall be afforded the opportunity of considering the same and shall be
supplied by the Company with sufficient information to enable it to make
an informed decision with respect thereto. Executed or true and correct
copies of any waiver or amendment effected pursuant to the provisions of
Section 7.1 shall be delivered by the Company to each registered holder of
outstanding Notes following the date on which the same shall have been
executed and delivered by the holder or holders of the requisite
percentage of outstanding Notes. The Company will not, directly or
indirectly, pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, to any holder of
the Notes as consideration for or as an inducement to the entering into by
any holder of the Notes of any waiver or amendment of any of the terms and
provisions of this Agreement unless such remuneration is concurrently
paid, on the same terms, ratably to the holders of all the Notes then
outstanding.
Section 8. Interpretation of Agreement; Definitions.
Section 8.1. Definitions. Unless the context otherwise requires,
the terms hereinafter set forth when used herein shall have the following
meanings and the following definitions shall be equally applicable to both
the singular and plural forms of any of the terms herein defined:
"Act" shall mean the Securities Act of 1933, as amended from time to
time.
"Affiliate" shall mean any Person (other than a Restricted
Subsidiary) (a) which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common control
with, the Company, (b) which beneficially owns or holds 5% or more of any
class of the Voting Stock of the Company or (c) 5% or more of the Voting
Stock (or in the case of a Person which is not a corporation, 5% or more
of the equity interest) of which is beneficially owned or held by the
Company or a Subsidiary. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership of
Voting Stock, by contract or otherwise.
"Agreement" shall mean this Note Agreement.
"Capitalized Lease" shall mean any lease the obligation for Rentals
with respect to which is required to be capitalized on a balance sheet of
the lessee in accordance with GAAP.
"Capitalized Rentals" of any Person shall mean as of the date of any
determination the amount at which the aggregate Rentals due and to become
due under all Capitalized Leases under which such Person is a lessee would
be reflected as a liability on a consolidated balance sheet of such Person
and its subsidiaries prepared in accordance with GAAP.
"Company" shall mean Johnson Worldwide Associates, Inc., a Wisconsin
corporation, and any Person who succeeds to all, or substantially all, of
the assets and business of Johnson Worldwide Associates, Inc.
"Consolidated Current Debt" shall mean, without duplication, Current
Debt of the Company and its Restricted Subsidiaries determined on a
consolidated basis eliminating intercompany items.
"Consolidated Funded Debt" shall mean, without duplication, Funded
Debt of the Company and its Restricted Subsidiaries determined on a
consolidated basis eliminating intercompany items.
"Consolidated Net Income" for any period shall mean net income of the
Company, and its Restricted Subsidiaries from continuing operations
determined on a consolidated basis in accordance with GAAP consistently
applied, and excluding net earnings and losses of any Person (other than a
Restricted Subsidiary) with which the Company or a Restricted Subsidiary
shall have consolidated or which shall have merged or liquidated into or
with the Company or a Restricted Subsidiary prior to the date of such
consolidation, merger or liquidation.
"Consolidated Net Worth" shall mean as of the date of any
determination thereof the amount of the par or stated value of all
outstanding capital stock, capital surplus, and retained earnings of the
Company and its Restricted Subsidiaries, net of all cumulative translation
adjustments and contingent compensation adjustments determined on a
consolidated basis in accordance with GAAP.
"Consolidated Tangible Assets" shall mean as of the date of any
determination thereof the total amount of all Tangible Assets of the
Company and its Restricted Subsidiaries on a consolidated basis after
deducting therefrom all Investments incurred pursuant to and within the
limitations of Section 5.11(i).
"Consolidated Tangible Net Worth" shall mean as of the date of any
determination thereof Consolidated Net Worth less (a) all assets of the
Company and its Restricted Subsidiaries that are properly classified as
"intangible assets" all determined in accordance with GAAP and (b) all
Investments incurred pursuant to and within the limitations of Section
5.11(i).
"Consolidated Tangible Net Worth Available for Investments" shall
mean as of the date of any determination thereof the sum of (a)
Consolidated Tangible Net Worth and (b) all Investments incurred pursuant
to and within the limitations of Section 5.11(i) hereof.
"Consolidated Total Assets" of the Company and its Restricted
Subsidiaries shall mean as of the date of any determination thereof the
total assets of the Company and its Restricted Subsidiaries as of such
date determined on a consolidated basis in accordance with GAAP.
"Consolidated Total Capitalization" shall mean as of the date of any
determination thereof the sum of (a) Consolidated Net Worth and (b)
Consolidated Funded Debt.
"Current Debt" of any Person shall mean as of the date of any
determination thereof (a) all Indebtedness for borrowed money or which has
been incurred in connection with the acquisition of property or assets
other than Funded Debt, provided that any portion of such obligations
incurred in connection with the acquisition of property or assets
specifically including, without limitation, obligations which have been
incurred by such Person in connection with any sale, transfer or issuance
of stock pursuant to and in compliance with Section 5.8(c)(5) and which
are at the date of any determination of Current Debt contingent as to
amount or as to payment shall not be treated as Current Debt on such date,
(b) Guaranties of Current Debt of others and (c) all obligations of such
Person with respect to receivables sold or otherwise discounted with
recourse which would not constitute Funded Debt pursuant to the terms of
the definition thereof.
"Default" shall mean any event or condition the occurrence of which
would, with the lapse of time or the giving of notice, or both, constitute
an Event of Default.
"Domestic Restricted Subsidiary" shall mean any Restricted Subsidiary
(a) which is organized under the laws of the United States or any State
thereof and (b) which conducts substantially all of its business and has
substantially all of its assets within the United States.
"Eighty Percent-Owned Restricted Subsidiary" shall mean a Subsidiary
of which 80% or more (by number of votes) of the Voting Stock shall be
beneficially owned, directly or indirectly, by the Company.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, together
with the regulations thereunder, in each case as in effect from time to
time. References to sections of ERISA shall be construed to also refer to
any successor sections.
"ERISA Affiliate" shall mean any corporation, trade or business that
is, along with the Company, a member of a controlled group of corporations
or a controlled group of trades or businesses, as described in Section
414(b) and 414(c), respectively, of the Internal Revenue Code of 1986, as
amended or Section 4001 of ERISA.
"Event of Default" is defined in Section 6.1.
"Funded Debt" of any Person shall mean (a) all Indebtedness for or in
respect of borrowed money or which has been incurred in connection with
the acquisition of property or assets, in each case having a final
maturity of more than one year from the date of origin thereof (or which
is renewable or extendible at the option of the obligor for a period or
periods of more than one year from the date of origin), including all
payments in respect thereof that are required to be made within one year
from the date of any determination of Funded Debt, whether or not the
obligation to make such payment shall constitute a current liability of
the obligor under GAAP, provided that any portion of such obligations
incurred in connection with the acquisition of property or assets
specifically including, without limitation, obligations which have been
incurred by such Person in connection with any sale, transfer or issuance
of capital stock pursuant to and in compliance with Section 5.8(c)(5) and
which are at the date of any determination of Funded Debt contingent as to
amount or as to payment shall not be treated as Funded Debt on such date,
(b) all Capitalized Rentals, (c) all Guaranties by such Person of Funded
Debt of others and (d) all obligations of such Person with respect to
receivables sold or otherwise discounted with recourse.
"GAAP" shall mean United States generally accepted accounting
principles as in effect from time to time. Notwithstanding the foregoing,
in the event that any Accounting Changes (as defined below) shall occur,
all financial covenants, standards and terms in this Agreement shall
continue to be calculated or construed as if such Accounting Changes had
not occurred. "Accounting Changes" means: changes in accounting
principles required by the promulgation of any rule, regulation,
pronouncement or opinion by the Financial Accounting Standards Board or
the American Institute of Certified Public Accountants or, if applicable,
the Securities and Exchange Commission (or successors thereto or agencies
with similar functions).
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments
for deposit or collection) of such Person guaranteeing or in effect
guaranteeing any Indebtedness, dividend or other obligation, of any other
Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, all obligations incurred
through an agreement, contingent or otherwise, by such Person: (a) to
purchase such Indebtedness or obligation or any property or assets
constituting security therefor, (b) to advance or supply funds (1) for the
purchase or payment of such Indebtedness or obligation, (2) to maintain
working capital or other balance sheet condition or otherwise to advance
or make available funds for the purchase or payment of such Indebtedness
or obligation, or (c) to lease property or to purchase Securities or other
property or services primarily for the purpose of assuring the owner of
such Indebtedness or obligation of the ability of the primary obligor to
make payment of the Indebtedness or obligation, or (d) otherwise to assure
the owner of the Indebtedness or obligation of the primary obligor against
loss in respect thereof. For the purposes of all computations made under
this Agreement, a Guaranty in respect of any Indebtedness for borrowed
money shall be deemed to be Indebtedness equal to the principal amount of
such Indebtedness for borrowed money which has been guaranteed, and a
Guaranty in respect of any other obligation or any dividend shall be
deemed to be Indebtedness equal to the maximum aggregate amount of such
obligation or dividend.
"Indebtedness" of any Person shall mean and include (a) obligations
of such Person for borrowed money or which have been incurred in
connection with the acquisition of property or assets (except for
obligations under bona fide employment, consulting, non-competition, lease
and similar agreements), provided that any portion of such obligations
which have been incurred in connection with the acquisition of property or
assets specifically including, without limitation, obligations which have
been incurred by such Person in connection with any sale, transfer or
issuance of stock pursuant to and in compliance with Section 5.8(c)(5) and
which are at the date of any determination of Indebtedness contingent as
to amount or as to payment shall not be treated as Indebtedness on such
date, (b) obligations secured by any Lien upon property or assets owned by
such Person, even though such Person has not assumed or become liable for
the payment of such obligations, (c) obligations created or arising under
any conditional sale or other title retention agreement with respect to
property acquired by such Person, notwithstanding the fact that the rights
and remedies of the seller, lender or lessor under such agreement in the
event of default are limited to repossession or sale of property, (d) all
Guaranties by such Person of obligations of others of the character
referred to in this definition, (e) Capitalized Rentals, and (f) all
obligations of such Person with respect to receivables sold or otherwise
discounted with recourse.
"Institutional Holder" shall mean any of the following Persons: (a)
any bank or any savings and loan association, savings institution, trust
company or other institution acting for its own account or in a fiduciary
capacity, (b) any insurance company, (c) any pension, retirement or profit
sharing trust or fund within the meaning of Title I of ERISA or for which
any bank, trust company, national banking association or investment
adviser registered under the Investment Advisers Act of 1940, as amended,
is acting as trustee or agent, (d) any investment company or business
development company, as defined in the Investment Company Act of 1940, as
amended, (e) any broker or dealer registered under the Securities Exchange
Act of 1934, as amended, who is a member of a national securities exchange
or any investment adviser registered under the Investment Adviser Act of
1940, as amended, (f) any government, any public employees' pension or
retirement system, or any other governmental agency supervising the
investment of public funds, (g) any other entity all of the equity owners
of which are Institutional Holders or (h) any other Person which may be
within the definition of "qualified institutional buyer" as such term is
used in Rule 144A, as from time to time in effect, promulgated under the
Act.
"Investments" of any Person shall mean all investments, in cash or by
delivery of property made, directly or indirectly in any Person, whether
by acquisition of shares of capital stock, indebtedness or any other
obligations or Securities or by loan, advance, capital contributions or
otherwise.
"Lien" shall mean any interest in property securing an obligation
owed to, or a claim by, a Person other than the owner of the property,
whether such interest is based on the common law, statute or contract,
including, without limitation, the security interest arising from a
mortgage, encumbrance, pledge, conditional sale or trust receipt or a
lease, consignment or bailment for security purposes and including any
Capitalized Lease. The term "Lien" shall include reservations,
exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, lease and other similar title exceptions and
encumbrances affecting real property. For the purpose of this Agreement,
the Company or a Restricted Subsidiary shall be deemed to be the owner of
any property which it has acquired or holds subject to a conditional sale
agreement or other arrangement pursuant to which title to the property has
been retained by or vested in another Person for security purposes.
"Make-Whole Amount" shall mean with respect to any amounts to be paid
pursuant to the provisions of Sections 2.2 or 2.3 hereof or upon
acceleration of the Notes the excess, if any, of (1) the aggregate present
value as of the date of such prepayment or payment of each dollar of
principal being prepaid or paid (taking into account the application of
such prepayment required by Section 2.1) and the amount of interest
(exclusive of interest accrued to the date of prepayment or payment) that
would have been payable in respect of such dollar if such prepayment or
payment had not been made, determined by discounting such amounts at the
Reinvestment Rate from the respective dates on which they would have been
payable, over (2) 100% of the principal amount of the outstanding Notes
being prepaid or paid. If the Reinvestment Rate with respect to
prepayment of (a) the Series A Notes is equal to or higher than 7.77%, or
(b) the Series B Notes is equal to or higher than 6.98%, the Make-Whole
Amount shall be zero. For purposes of any determination of the Make-Whole
Amount:
"Reinvestment Rate" shall mean as of the time of any determination
thereof .50% plus the yield on actively traded U.S. Treasury Securities
with a maturity corresponding to the Weighted Average Life to Maturity of
the principal then being prepaid or paid (taking into account the
application of any such prepayment required by Section 2.1) as set forth
on page Government C4 (or any successor page) of the Bloomberg screen or,
if such page or screen is not available at the time of any determination
hereunder, then such other reasonably comparable index which shall be
designated by the holders of 66-2/3% in aggregate principal amount of the
outstanding Notes. If no maturity exactly corresponds to such Weighted
Average Life to Maturity, yields for the two published maturities most
closely corresponding to such Weighted Average Life to Maturity shall be
calculated pursuant to the immediately preceding sentence and the
Reinvestment Rate shall be interpolated or extrapolated from such yields
on a straight-line basis, rounding in each of such relevant periods to the
nearest month.
"Weighted Average Life to Maturity" of the principal amount of the
Series of Notes being prepaid or paid shall mean, as of the time of any
determination thereof, the number of years obtained by dividing the then
Remaining Dollar-Years of such principal by the aggregate amount of such
principal. The term "Remaining Dollar-Years" of such principal shall mean
the amount obtained by (a) multiplying (1) the remainder of (i) the amount
of principal that would have become due on each scheduled prepayment or
payment date if such prepayment or payment had not been made less (ii) the
amount of principal on the Notes scheduled to become due on such date
after giving effect to such prepayment or payment and the application
thereof in accordance with the provisions of Section 2.1, by (2) the
number of years (calculated to the nearest one-twelfth) which will elapse
between the date of determination and such scheduled prepayment or payment
date, and (b) totaling the products obtained in (a).
"Multiemployer Plan" shall have the meaning as in ERISA.
"Overdue Rate" shall mean (i) with respect to the Series A Notes as
of the date of any determination thereof the lesser of (a) the maximum
rate permitted by law and (b) 9.77% per annum and (ii) with respect to the
Series B Notes as of the date of any determination thereof the lesser of
(a) the maximum rate permitted by law and (b) 8.98% per annum.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, and a government or agency or political
subdivision thereof.
"Plan" shall mean a plan that is both a "pension plan," as such term
is defined in Section 3(2) of ERISA, and a "defined benefit pension plan"
as defined in Section 414(j) of the Internal Revenue Code of 1986 which is
established or maintained by the Company or any ERISA Affiliate or as to
which the Company or any ERISA Affiliate contributed or is a member or
otherwise may have any liability.
"Principal Subsidiary" shall mean any Restricted Subsidiary which had
(a) total assets, on a consolidating basis, as of the last day of the most
recently ended fiscal quarter of the Company, of an amount equal to or
greater than 2% of Consolidated Total Assets of the Company as of the last
day of such fiscal quarter, or (b) net income, on a consolidating basis,
for the Company's most recent fiscal year, equal to or greater than 2% of
Consolidated Net Income of the Company for such year.
"Rentals" of any Person shall mean and include all fixed rents
(including as such all payments which the lessee is obligated to make to
the lessor on termination of the lease or surrender of the property)
payable by such Person, as lessee or sublessee under a lease of real or
personal property, but shall be exclusive of any amounts required to be
paid by such Person (whether or not designated as rents or additional
rents) on account of maintenance, repairs, insurance, taxes and similar
charges. Fixed rents under any so-called "percentage leases" shall be
computed solely on the basis of the minimum rents, if any, required to be
paid by the lessee regardless of sales volume or gross revenues.
"Reportable Event" shall have the same meaning as in ERISA.
"Restricted Subsidiary" shall mean any Subsidiary of which more than
50% (by number of votes) of the Voting Stock is beneficially owned,
directly or indirectly, by the Company.
"Security" shall have the same meaning as in Section 2(l) of the
Securities Act of 1933, as amended.
The term "subsidiary" shall mean, as to any particular parent
corporation, any corporation of which more than 50% (by number of votes)
of the Voting Stock shall be owned by such parent corporation and/or one
or more corporations which are themselves subsidiaries of such parent
corporation. The term "Subsidiary" shall mean a subsidiary of the
Company.
"Tangible Assets" of any Person shall mean, as of the date of any
determination thereof, the total amount of all assets of such Person (less
depreciation, depletion, and other properly deductible valuation reserves)
after deducting the following: good will, patents, trade names, trade
marks, copyrights, franchises, experimental expense, organization expense,
unamortized debt discount and expense, deferred charges, the excess of
cost of shares acquired over book value of related assets, any write up in
the book value of any asset resulting from a revaluation thereof
subsequent to March 29, 1991 (except in connection with the acquisition of
such assets) and such other assets as are properly classified as
"intangible assets" in accordance with GAAP.
"Voting Stock" shall mean Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled
to elect a majority of the corporate directors (or Persons performing
similar functions).
"Wholly-owned" when used in connection with any Subsidiary shall mean
a Subsidiary of which all of the issued and outstanding shares of stock
(other than directors' qualifying shares or shares owned by foreign
domiciliaries as required by law) shall be owned by the Company and/or one
or more of its Wholly-Owned Restricted Subsidiaries.
Section 8.2. Accounting Principles. Where the character or amount
of any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is
required to be made for the purposes of this Agreement, the same shall be
done in accordance with GAAP, to the extent applicable, except where such
principles are inconsistent with the specific provisions of this
Agreement.
Section 8.3. Directly or Indirectly. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person
is prohibited from taking, such provision shall be applicable whether the
action in question is taken directly or indirectly by such Person.
Section 9. Miscellaneous
Section 9.1. Registration of Notes. The Company shall cause to be
kept at its principal office a register for the registration and transfer
of the Notes (hereinafter called the "Note Register"), and the Company
will register or transfer or cause to be registered or transferred, as
hereinafter provided any Note issued pursuant to this Agreement.
The Person in whose name any registered Note shall be registered
shall be deemed and treated as the owner and holder thereof for all
purposes of this Agreement. Payment of or on account of the principal,
premium, if any, and interest on any registered Note shall be made to or
upon the written order of such registered holder.
Section 9.2. Exchange of Notes. At any time and from time to time,
upon not less than ten days' notice to that effect given by the holder of
any Note initially delivered or of any Note substituted therefor pursuant
to Section 9.1, this Section 9.2 or Section 9.3, and upon surrender of
such Note at its office, the Company will deliver in exchange therefor,
without expense to the holder, except as set forth below, Notes of the
same Series, in registered form, for the same aggregate principal amount
as the then unpaid principal amount of the Note so surrendered, in the
denomination of $3,000,000 or any multiple of $100,000 in excess thereof
as such holder shall specify, dated as of the date to which interest has
been paid on the Note so surrendered or, if such surrender is prior to the
payment of any interest thereon, then dated as of the date of issue,
payable to such Person or Persons, as may be designated by such holder,
and otherwise of the same form and tenor as the Notes so surrendered for
exchange; provided that, notwithstanding the foregoing, any Note issued on
the Closing Date or any Note substituted therefor in a denomination of
less than $3,000,000 may be exchanged in whole by any holder thereof.
Section 9.3. Loss, Theft, Etc. of Notes. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction
of any Note, and in the case of any such loss, theft or destruction upon
delivery of a bond or indemnity in such form and amount as shall be
reasonably satisfactory to the Company, or in the event of such mutilation
upon surrender and cancellation of the Note, the Company will make and
deliver, without expense to the holder thereof, a new Note, of like tenor,
in lieu of such lost, stolen, destroyed or mutilated Note. If the
Purchaser or any subsequent Institutional Holder is the owner of any such
lost, stolen or destroyed Note, then the affidavit of an authorized
officer of such owner, setting forth the fact of loss, theft or
destruction and of its ownership of the Note at the time of such loss,
theft or destruction, shall be accepted as satisfactory evidence thereof
and no further indemnity shall be required as a condition to the execution
and delivery of a new Note other than the written agreement of such owner
to indemnify the Company.
Section 9.4. Expenses, Stamp Tax Indemnity. Whether or not the
transactions herein contemplated shall be consummated, the Company agrees
to pay directly all reasonable costs and expenses in connection with the
preparation, execution and delivery of this Agreement and the transactions
contemplated hereby, including but not limited to all investment banking
and similar fees, the reasonable charges and disbursements of Chapman and
Cutler, special counsel to the Purchasers, duplicating and printing costs
and charges for shipping the Notes, adequately insured to each Purchaser's
home office or at such other place as such Purchaser may designate, and
all reasonable out-of-pocket costs and expenses relating to any
amendments, waivers or consents pursuant to the provisions hereof (whether
or not the same are actually executed and delivered), including, without
limitation, any amendments, waivers or consents resulting from any
work-out, renegotiation or restructuring relating to the performance by
the Company of its obligations under this Agreement and the Notes. The
Company also agrees that it will pay and save each Purchaser harmless
against any and all liability with respect to obtaining so-called "private
placement numbers" for the Notes from Standard & Poor's Corporation in
accordance with the requirements of the National Association of Insurance
Commissioners and with respect to stamp and other taxes, if any, which may
be payable or which may be determined to be payable in connection with the
execution and delivery of this Agreement or the initial issuance of the
Notes, whether or not any Notes are then outstanding. The Company agrees
to protect and indemnify each Purchaser against any liability for any and
all brokerage fees and commissions payable or claimed to be payable to any
Person in connection with the transactions contemplated by this Agreement,
other than any such fees or commissions claimed by any Person engaged by
such Purchaser. Each Purchaser hereby represents to the Company that no
broker or finder was employed or retained by it in connection with its
purchase of the Notes.
Section 9.5. Powers and Rights Not Waived; Remedies Cumulative. No
delay or failure on the part of the holder of any Note in the exercise of
any power or right shall operate as a waiver thereof; nor shall any single
or partial exercise of the same preclude any other or further exercise
thereof, or the exercise of any other power or right, and the rights and
remedies of the holder of any Note are cumulative to and are not exclusive
of any rights or remedies any such holder would otherwise have, and no
waiver or consent, given or extended pursuant to Section 7, shall extend
to or affect any obligation or right not expressly waived or consented to.
Section 9.6. Notices. All communications provided for hereunder
shall be in writing and, if to the Purchasers, delivered or mailed by
overnight courier or by facsimile communication, in each case addressed to
each Purchaser at such Purchaser's address appearing on Schedule I to this
Agreement or such other address as such Purchaser or the subsequent holder
of any Note initially issued to such Purchaser may designate to the
Company in writing, and, if to the Company, delivered or mailed by prepaid
overnight courier or by facsimile communication to the Company at the
address specified on page 1 hereof, Attention: Treasurer, or to such other
address as the Company may in writing designate to the Purchasers or to a
subsequent holder of the Note initially issued to the Purchasers;
provided, however, that a notice to you by overnight courier shall only be
effective if delivered to you at a street address designated for such
purpose in Schedule I attached hereto, and a notice to the Purchasers by
facsimile communication shall only be effective if confirmed by prepaid
overnight courier, or, in either case, as each Purchaser or a subsequent
holder of any Note initially issued to such Purchaser may designate to the
Company in writing.
Section 9.7. Successors and Assigns. This Agreement shall be
binding upon the Company and its successors and assigns and shall inure to
the benefit of each Purchaser and to the benefit of its successors and
assigns, including each successive holder or holders of any Notes;
provided, however, that notwithstanding any other provisions of this
Agreement or the Notes, the Notes shall not be transferable to any Person
that is not an Institutional Holder.
Section 9.8. Survival of Covenants and Representations. All
covenants, representations and warranties made by the Company herein and
in any certificates delivered pursuant hereto, whether or not in
connection with the Closing Date, shall survive the closing and the
delivery of this Agreement and the Notes.
Section 9.9. Severability. Should any part of this Agreement for
any reason be declared invalid by a court of competent jurisdiction, such
decision shall not affect the validity of any remaining portion, which
remaining portion shall remain in force and effect as if this Agreement
had been executed with the invalid portion thereof eliminated and it is
hereby declared the intention of the parties hereto that they would have
executed the remaining portion of this Agreement without including therein
any such part which may, for any reason, be declared invalid.
Section 9.10. Reproduction of Documents. This Agreement and all
documents relating thereto, including without limitation, (a) consents,
waivers and modifications which may hereafter be executed, (b) documents
received by the Purchasers at the closing of their respective purchases of
the Notes (except the Notes themselves), and (c) financial statements,
certificates and other information previously or hereafter furnished to
the Purchasers, may be reproduced by the Purchasers by any photographic,
photostatic, microfilm, micro-card, miniature photographic or other
similar process and each such Purchaser may destroy any original document
so reproduced. The Company agrees and stipulates that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such Purchaser
in the regular course of business) and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
Section 9.11. Governing Law. This Agreement and the Notes issued
and sold hereunder shall be governed by and construed in accordance with
Illinois law. Notwithstanding the preceding sentence, nothing in this
Agreement shall be construed to subject the holder of any Notes that is an
insurance company to the laws of the State of Illinois.
Section 9.12. Submission of Jurisdiction; Waiver of Jury Trial. (a)
Any legal action or proceeding with respect to this Agreement or the Notes
or any document related thereto shall be brought in the courts of the
State of Illinois or of the United States of America for the Northern
District of Illinois and in no other courts, and, by execution and
delivery of this Agreement, the Company hereby accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction
of the aforesaid courts. The Company hereby irrevocably and
unconditionally waives any objection, including, without limitation, any
objection to the laying of venue or based on the grounds of forum non
conveniens, which it may now or hereafter have to the bringing of any
action or proceeding in such respective jurisdictions.
(b) The Company and the Purchasers each hereby irrevocably and
unconditionally waive trial by jury.
Section 9.13. Captions. The descriptive headings of the various
Sections or parts of this Agreement are for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.
The execution hereof by the Purchasers shall constitute a contract
between us for the uses and purposes hereinabove set forth, and this
Agreement may be executed in any number of counterparts, each executed
counterpart constituting an original but all together only one agreement.
Johnson Worldwide Associates, Inc.
By: /s/ Carl G. Schmidt
Its: Senior Vice President & CFO
Accepted as of the first date written above.
Nationwide Life Insurance Company
By: /s/ Harry Schermer
Its: Vice President
Equity Securities
Accepted as of the first date written above.
Employers Life Insurance Company of Wausau
By: /s/ Harry A. Schermer
Its: Attorney-in-Fact
Accepted as of the first date written above.
Great-West Life & Annuity Insurance Company
By: /s/ James G. Lowery
Its: Assistant Vice President
Private Placement Investments
By: /s/ Bruce L. Hoyt
Its: Manager
Private Placement Investments
<PAGE>
Schedule I (to Note Agreement)
Names and Addresses of Purchasers
Principal Amount
Name and Addresses of Series A Notes to Be
of Purchasers Purchased
Nationwide Life Insurance Company $27,000,000
One Nationwide Plaza
Columbus, Ohio 43215-2220
Telecopier Number: (614) 249-4698
Payments
All payments on or in respect of the Series A Notes to be by bank wire
transfer of Federal or other immediately available funds (identifying each
payment as "Johnson Worldwide Associates, Inc., 7.77% Senior Notes, Series
A due 2005, PPN 479254 A @ 3, principal or interest") to:
Morgan Guaranty Trust Company of New York (ABA #021-000-238)
JOURNAL #999-99-024
For the account of Nationwide Life Insurance
Company Custody Account #71615
Attention: Custody Service Department
Notices
All notices of payment on or in respect of the Series A Notes and written
confirmation of each such payment to:
Nationwide Life Insurance Company
One Nationwide Plaza-1-32-09
Columbus, Ohio 43215-2220
Attention: Corporate Money Management
All notices and communications other than those in respect to payments to
be addressed:
Nationwide Life Insurance Company
One Nationwide Plaza-1-33-07
Columbus, Ohio 43215-2220
Attention: Corporate Fixed-Income Securities
Telecopier Number: (614) 249-4553
Name of Nominee in which Series A Notes are to be issued: None
Taxpayer I.D. Number: 31-4156830
Principal Amount
Name and Addresses of Series A Notes to Be
of Purchasers Purchased
Employers Life Insurance Company of Wausau $3,000,000
2000 Westwood Avenue
Wausau, Wisconsin 54401
Payments
All payments on or in respect of the Series A Notes to be by bank wire
transfer of Federal or other immediately available funds (identifying each
payment as "Johnson Worldwide Associates, Inc., 7.77% Senior Notes, Series
A due 2005, PPN 479254 A @ 3, principal or interest") to:
Morgan Guaranty Trust Company of New York (ABA #021-000-238)
JOURNAL #999-99-024
F/A/O Employers Life Custody
Account Number 50135
Attention: Custody Service Department
Notices
All notices of payment, on or in respect of the Series A Notes, and
written confirmation of each such payment to be addressed as first
provided above.
All notices and communications other than those in respect to payments to
be addressed:
Employers Life Insurance Company of Wausau
One Nationwide Plaza-1-33-07
Columbus, Ohio 43215-2220
Attention: Corporate Fixed-Income Securities
Name of Nominee in which Series A Notes are to be issued: None
Taxpayer I.D. Number: 39-1049873
Principal Amount
Name and Address of Series B Notes
of Purchaser to be Purchased
Great-West Life & Annuity Insurance Company $15,000,000
8515 East Orchard Road, 3rd floor, Tower 2
Englewood, Colorado 80111
Attention: U.S. Private Placements
Facsimile: (303) 689-6193
Payments
All payments on or in respect of the Series B Notes to be by bank wire
transfer of Federal or other immediately available funds (identifying each
payment as "Johnson Worldwide Associates, Inc., 6.98% Senior Notes, Series
B due 2005, PPN 479254 B* 4, principal or interest and confirmation of
principal balance") to:
NW MPLS/TRUST CLEARING
ABA #091000019
Account Number 08-40-245
Attention: GWL for Account Number 12468800
Notices
All notices of payments, on or in respect of the Series B Notes and
written confirmation of each such payment to:
Norwest Bank Minnesota, N.A.
733 Marquette Avenue, Investors Building, 5th Floor
Minneapolis, Minnesota 55479-0047
Attention: Income Collections
All notices and communications other than those in respect to payments to
be addressed as first provided above.
Name of Nominee in which Series B Notes are to be issued: None
Taxpayer I.D. Number: 84-0467907
<PAGE>
Schedule II (to Note Agreement)
Subsidiaries of the Company
The following lists the direct and indirect subsidiaries of Johnson
Worldwide Associates, Inc. as of June 15, 1995:
Jurisdiction in Which
Name of Subsidiary(1)(2) Incorporated
America Outdoors, Inc.
("Crappiethon U.S.A.") Alabama
Jack Wolfskin International Ltd. (in
liquidation) United Kingdom
Jack Wolfskin Adventure Equipment Ltd. United Kingdom
Old Town Canoe Company Delaware
Johnson Worldwide Associates Canada Inc. Canada
Johnson Fishing, Inc. (inactive) Delaware
Mitchell Sports S.A. France
Mitchell France, S.A. France
Distribution Moderne De Marques(4) France
Mitchell Holland BV Holland
Mitchell UK United Kingdom
Plastimo Manufacturing (UK) Ltd.(3) United Kingdom
Plastimo, S.A. France
Plastimo Espana SA Spain
Plastimo Nordic AB Sweden
Scubapro Sweden AB Sweden
Plastimo Holland BV Netherlands
Seaco/Elliot, Inc. (inactive) Delaware
Airguide Instrument Company Illinois
Under Sea Industries, Inc. Delaware
Hydro Rubber and Plastic, Inc. (in liquidation) California
Scubapro Europe Benelux(3) Belgium
Scubapro Taucherausrustungen Gesellschaft GmbH Austria
Scubapro Espana, S.A. (4) Spain
Scubapro Eu AG Switzerland
Scubapro (UK) Ltd.(3) United Kingdom
Diving Locker U.K., Ltd. United Kingdom
Johnson Beteiligungsgesellschaft mbH Germany
Johnson Outdoors V mbH Germany
Scubapro Taucherauser GmbH Germany
Jack Wolfskin Ausruestung fuer Draussen GmbH Germany
Scubapro Europe S.R.L. Italy
Scubapro Italy S.R.L. Italy
Scubapro Asia, Ltd. Japan
Scubapro Norge AS Norway
Johnson Worldwide Associates Australia Pty. Ltd. Australia
Johnson Leisure Incentives, Inc. (inactive) Delaware
Porelon, Inc. (inactive) Delaware
Microfoam, Inc. (inactive) New York
Phoenix Endeavour, Inc. (inactive) California
(1) Unless otherwise indicated, each company does business only under its
legal name.
(2) Unless otherwise indicated by footnote, each company is a
wholly-owned subsidiary of Johnson Worldwide Associates, Inc.
(through direct or indirect ownership).
(3) Percentage of stock owned is 99%.
(4) Percentage of stock owned is 98%.
Description of Debt and Leases
as of June 30, 1995
($000's omitted, U.S. Dollars)
1. Current Debt for borrowed money of the Company and its Restricted
Subsidiaries is as follows:
Johnson Worldwide Associates, Inc. $ 48,594
Jack Wolfskin Ausrustung fur Draussen 3,787
GmbH
Johnson Outdoors V mbH 188
Johnson Worldwide Associates Canada 2,724
Inc.
Mitchell Sports, S.A. 4,700
Mitchell France, S.A. 1,056
Distribution Moderne De Marques 1,634
Plastimo, S.A. 3,369
Scubapro Asia, Ltd. 1,195
Johnson Worldwide Associates Australia 307
Pty. Ltd.
Scubapro Europe Benelux 39
Scubapro Italy S.R.L. 1,091
Scubapro Sweden AB 193
Scubapro (UK) Ltd. 319
Jack Wolfskin Adventure Equipment Ltd. 931
------
Total Current Debt for borrowed money $70,127
======
2. Funded Debt for borrowed money (including Capitalized Leases and
Guarantees relating to the obligations of persons other than the
Company and its Restricted Subsidiaries) of the Company and its
Restricted Subsidiaries is as follows:
Johnson Worldwide Associates, Inc. $35,000
Mitchell Sports, S.A. 2,119
Plastimo, S.A. 41
Scubapro Asia, Ltd. 17
Scubapro Europe Benelux 207
------
Total Funded Debt for borrowed money $37,384
=======
3. Capitalized Leases of the Company and its Restricted Subsidiaries
outstanding on the Closing Date are as follows:
None
4. Guaranties of the Company and its Restricted Subsidiaries relating to
the obligations of Persons other than the Company and its Restricted
Subsidiaries outstanding on the Closing Date are as follows:
None
5. Liens existing as of the date of this Agreement securing Indebtedness
of the Company or any Restricted Subsidiary outstanding on such date:
None
<PAGE>
EXHIBIT A-1 (to Note Agreement)
Johnson Worldwide Associates, Inc.
7.77% Senior Note, Series A
Due October 15, 2005
PPN 479254 A@ 3
No. R-
____________, 1995
$
Johnson Worldwide Associates, Inc., a Wisconsin corporation (the
"Company"), for value received, hereby promises to pay to
or registered assigns
on the fifteenth day of October, 2005
the principal amount of
Dollars ($_________)
and to pay interest (computed on the basis of a 360-day year of twelve
30-day months) on the principal amount from time to time remaining unpaid
hereon at the rate of 7.77% per annum from the date hereof until maturity,
payable semiannually on the fifteenth day of each October and April in
each year commencing April 15, 1996, and at maturity. The Company agrees
to pay interest on overdue principal (including any overdue optional
prepayment of principal) and Make-Whole Amount, if any, and (to the extent
legally enforceable) on any overdue installment of interest, at the
Overdue Rate after the due date thereof, whether by acceleration or
otherwise, until paid. "Overdue Rate" means the lesser of (a) the maximum
rate permitted by law or (b) 9.77%.
Except as provided in Section 2.6 of the Note Agreement (as hereinafter
defined), both the principal hereof and interest hereon are payable at the
principal office of the Company in Racine, Wisconsin, in coin or currency
of the United States of America which at the time of payment shall be
legal tender for the payment of public and private debts. If any amount
of principal, Make-Whole Amount, if any, or interest on or in respect of
this Note becomes due and payable on any date which is not a business day
in New York, New York, Chicago, Illinois and Racine, Wisconsin, such
amount shall be payable on the next preceding business day.
This Note is one of the 7.77% Senior Notes, Series A due October 15,
2005 (the "Series A Notes") of the Company in the aggregate principal
amount of $30,000,000 issued or to be issued together with the 6.98%
Senior Notes, Series B of the Company in the aggregate principal amount of
$15,000,000 (the "Series B Notes" and together with the Series A Notes,
the "Notes") under and pursuant to the terms and provisions of the Note
Agreement, dated as of, October 1, 1995 (the "Note Agreement"), entered
into by the Company with the original purchasers therein referred to, and
this Note and the holder hereof are entitled equally and ratably with all
other Notes outstanding under the Note Agreement and the holders thereof
to all the benefits provided for thereby or referred to therein, to which
Note Agreement reference is hereby made for a statement thereof.
This Note and the other Notes outstanding under the Note Agreement may
be declared due prior to their expressed maturity dates and certain
prepayments are required to be made thereon, all in the events, on the
terms and in the manner and amounts as provided in the Note Agreement.
The Notes are not subject to prepayment or redemption at the option of
the Company prior to their expressed maturity dates except on the terms
and conditions and in the amounts and with the Make-Whole Amount, if any,
set forth in Section 2 of the Note Agreement.
This Note is registered on the books of the Company and is transferable
only by surrender thereof at the principal office of the Company duly
endorsed or accompanied by a written instrument of transfer duly executed
by the registered holder of this Note or its attorney duly authorized in
writing. Payment of or on account of principal, Make-Whole Amount, if
any, and interest on this Note shall be made only to or upon the order in
writing of the registered holder.
This Note and said Note Agreement are governed by and construed in
accordance with the laws of Illinois.
Johnson Worldwide Associates, Inc.
By:
Its
<PAGE>
EXHIBIT A-2 (to Note Agreement)
Johnson Worldwide Associates, Inc.
6.98% Senior Note, Series B
Due October 15, 2005
PPN 479254 B* 4
No. R-
____________, 1995
$
Johnson Worldwide Associates, Inc., a Wisconsin corporation (the
"Company"), for value received, hereby promises to pay to
or registered assigns
on the fifteenth day of October, 2005
the principal amount of
Dollars ($_________)
and to pay interest (computed on the basis of a 360-day year of twelve
30-day months) on the principal amount from time to time remaining unpaid
hereon at the rate of 6.98% per annum from the date hereof until maturity,
payable semiannually on the fifteenth day of each October and April in
each year commencing April 15, 1996, and at maturity. The Company agrees
to pay interest on overdue principal (including any overdue optional
prepayment of principal) and Make-Whole Amount, if any, and (to the extent
legally enforceable) on any overdue installment of interest, at the
Overdue Rate after the due date thereof, whether by acceleration or
otherwise, until paid. "Overdue Rate" means the lesser of (a) the maximum
rate permitted by law or (b) 8.98%.
Except as provided in Section 2.6 of the Note Agreement (as hereinafter
defined), both the principal hereof and interest hereon are payable at the
principal office of the Company in Racine, Wisconsin, in coin or currency
of the United States of America which at the time of payment shall be
legal tender for the payment of public and private debts. If any amount
of principal, Make-Whole Amount, if any, or interest on or in respect of
this Note becomes due and payable on any date which is not a business day
in New York, New York, Chicago, Illinois and Racine, Wisconsin, such
amount shall be payable on the next preceding business day.
This Note is one of the 6.98% Senior Notes, Series B due October 15,
2005 (the "Series B Notes") of the Company in the aggregate principal
amount of $15,000,000 issued together with the 7.77% Senior Notes, Series
A of the Company in the aggregate principal amount of $30,000,000 (the
"Series A Notes" and together with the Series B Notes, the "Notes") under
and pursuant to the terms and provisions of a Note Agreement, dated as of,
October 1, 1995 (the "Note Agreement"), entered into by the Company with
the original purchasers therein referred to, and this Note and the holder
hereof are entitled equally and ratably with all other Notes outstanding
under the Note Agreement and the holders thereof to all the benefits
provided for thereby or referred to therein, to which Note Agreement
reference is hereby made for a statement thereof.
This Note and the other Notes outstanding under the Note Agreement may
be declared due prior to their expressed maturity dates and certain
prepayments are required to be made thereon, all in the events, on the
terms and in the manner and amounts as provided in the Note Agreement.
The Notes are not subject to prepayment or redemption at the option of
the Company prior to their expressed maturity dates except on the terms
and conditions and in the amounts and with the Make-Whole Amount, if any,
set forth in Section 2 of the Note Agreement.
This Note is registered on the books of the Company and is transferable
only by surrender thereof at the principal office of the Company duly
endorsed or accompanied by a written instrument of transfer duly executed
by the registered holder of this Note or its attorney duly authorized in
writing. Payment of or on account of principal, Make-Whole Amount, if
any, and interest on this Note shall be made only to or upon the order in
writing of the registered holder.
This Note and said Note Agreement are governed by and construed in
accordance with the laws of Illinois.
Johnson Worldwide Associates, Inc.
By:
Its
<PAGE>
EXHIBIT B (to Note Agreement)
Johnson Worldwide Associates, Inc.
Closing Certificate
To the Purchasers Named
in Schedule I to the Note
Agreement Described Below
Gentlemen:
This certificate is delivered to each of you in compliance with the
requirements of the Note Agreement dated as of October 1, 1995 (the
"Agreement"), entered into by the undersigned, Johnson Worldwide
Associates, Inc., a Wisconsin corporation (the "Company"), with each of
you, and as an inducement to and as part of the consideration for your
several purchases on this date of $30,000,000 aggregate principal amount
of its 7.77% Senior Notes, Series A due October 15, 2005 and of
$15,000,000 aggregate principal amount of its 6.98% Senior Notes, Series B
due October 1, 2005 (collectively, the "Notes") of the Company, pursuant
to the Agreement.
The terms which are capitalized herein shall have the same meanings as
in the Agreement.
The Company represents and warrants to each of you as follows:
1. Subsidiaries. Schedule II to the Agreement, states the name of each
of the Company's Subsidiaries, its jurisdiction of incorporation and the
percentage of its Voting Stock owned by the Company and/or its
Subsidiaries. Those Subsidiaries listed in Section 1 of said Schedule II
constitute all of the Subsidiaries of the Company. The Company and each
Subsidiary has good and marketable title to all of the shares it purports
to own of the stock of each Subsidiary, free and clear in each case of any
Lien. All such shares have been duly issued and are fully paid and
non-assessable, except (in the case of a Wisconsin corporation) as
provided by Section 180.0622(2)(b) of the Wisconsin Statutes.
2. Corporate Organization and Authority. The Company, and each
Restricted Subsidiary,
(a) is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation;
(b) has all requisite power and authority and all necessary licenses
and permits to own and operate its properties and to carry on its
business as now conducted and as presently proposed to be conducted
except where the failure to obtain such licenses or Permits would not
have a material adverse effect on the condition (financial or otherwise)
of the Company and its Restricted Subsidiaries taken as a whole or on
the ability of the Company to perform its obligations under this
Agreement or the Notes; and
(c) is duly licensed or qualified and is in good standing as a foreign
corporation in each Jurisdiction wherein the nature of the business
transacted by it or the nature of the property owned or leased by it
makes such licensing or qualification necessary except where the failure
to be so licensed or qualified would not have a material adverse effect
on the condition (financial or otherwise) of the Company and its
Restricted Subsidiaries taken as a whole or on the ability of the
Company to perform its obligations under this Agreement or the Notes.
3. Business and Property. You have heretofore been furnished with a
copy of the Confidential Offering Memorandum dated March, 1995 (the
"Memorandum") prepared by The First National Bank of Chicago Private
Market Finance Department which generally sets forth the business
conducted and proposed to be conducted by the Company and its Subsidiaries
and the principal properties of the Company and its Subsidiaries.
4. Financial Statements. (a) The consolidated balance sheets of the
Company and its consolidated Subsidiaries as of September 27, 1991 and
October 2, 1992, October 1, 1993 and September 30, 1994 and the statements
of operations and cash flows for the fiscal years ended on said dates,
each accompanied by a report thereon containing an opinion unqualified as
to scope or limitations imposed by the company and otherwise without
qualification except as therein noted, by KPMG Peat Marwick LLP, have been
prepared in accordance with GAAP except as therein noted, and present
fairly the financial position of the Company and its Subsidiaries as of
such dates and the results of their operations and cash flows for such
periods, except to the extent modified pursuant to a restatement thereof
in a subsequent financial statement. The unaudited consolidated balance
sheets of the Company and its consolidated Subsidiaries as of June 30,
1995, and the unaudited statements of operations and cash flows for the
nine-month period ended on said date prepared by the Company have been
prepared in accordance with GAAP, and present fairly the financial
position of the Company and its consolidated Subsidiaries as of said date
and the results of their operations and their cash flows for such period.
(b) Since June 30, 1995, there has been no change in the condition,
financial or otherwise, of the Company and its consolidated Subsidiaries
as shown on the consolidated balance sheet as of such date except changes
in the ordinary course of business, none of which individually or in the
aggregate has been materially adverse.
5. Indebtedness. Schedule II attached to the Agreement correctly
describes all Current Debt for borrowed money and Funded Debt for borrowed
money (including Capitalized Leases and Guaranties relating to the
obligations of Persons other than the Company and its Restricted
Subsidiaries) of the Company and its Restricted Subsidiaries outstanding
on June 30, 1995 and there have been no material increases in such Current
Debt, Funded Debt and Guarantees since such date.
6. Full Disclosure. The financial statements referred to in paragraph 4
hereof, the Agreements, the Memorandum and all other written documents and
statements furnished by the Company to you in connection with the
negotiation of the sale of the Notes, taken together, do not contain any
untrue statement of a material fact or omit a material fact necessary to
make the statements contained therein or herein not misleading.
7. Pending Litigation. There are no proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company or
any Restricted Subsidiary in any court or before any governmental
authority or arbitration board or tribunal which could reasonably be
expected to have a material adverse effect on the condition (financial or
otherwise) of the Company and its Restricted Subsidiaries taken as a whole
or on the ability of the Company to perform its obligations under this
Agreement or the Notes.
8. Title to Property. The Company and each Restricted Subsidiary has
good and marketable title in fee simple (or its equivalent under
applicable law) to all material parcels of real property and has good
title to all the other material items of property it purports to own,
including that reflected in the most recent balance sheet referred to in
paragraph 4 hereof, except as sold or otherwise disposed of in the
ordinary course of business and except for Liens permitted by the
Agreement.
9. Patents and Trademarks. The Company and each Restricted Subsidiary
owns or possesses adequate licenses for the use of all the patents,
trademarks, trade names, service marks, copyright, licenses and rights
with respect to the foregoing necessary for the present conduct of its
business, without any known conflict with the rights of others.
10. Sale is Legal and Authorized. The sale of the Notes and compliance
by the Company with all of the provisions of the Agreement and the Notes-
(a) are within the corporate powers of the Company;
(b) will not violate any provisions of any law or any order of any
court or governmental authority or agency and will not conflict with or
result in any breach of any of the terms, conditions or provisions of,
or constitute a default under the Articles of Incorporation or By-laws
of the Company or any indenture or other agreement or instrument to
which the Company is a party or by which it may be bound or result in
the imposition of any Liens or encumbrances on any property of the
Company; and
(c) have been duly authorized by proper corporate action on the part of
the Company (no action by the stockholders of the Company being required
by law, by the Articles of Incorporation or By-laws of the Company or
otherwise), executed and delivered by the Company and the Agreement and
the Notes constitute the legal, valid and binding obligations, contracts
and agreements of the Company enforceable in accordance with their
respective terms.
11. No Defaults. No Default or Event of Default has occurred and is
continuing. The Company is not in default in the payment of principal or
interest on any Funded Debt or Current Debt and is not in default under
any instrument or instruments or agreements under and subject to which any
Funded Debt or Current Debt has been issued and no event has occurred and
is continuing under the provisions of any such instrument or agreement
which with the lapse of time or the giving of notice, or both, would
constitute an event of default thereunder.
12. Governmental Consent. No approval, consent or withholding of
objection on the part of any regulatory body, state, Federal or local, is
necessary in connection with the execution and delivery by the Company of
the Agreement or the Notes or compliance by the Company with any of the
provisions of the Agreement or the Notes.
13. Taxes. All tax returns required to be filed by the Company or any
Restricted Subsidiary in any jurisdiction have, in fact, been filed, and
all taxes, assessments, fees and other governmental charges upon the
Company or any Restricted Subsidiary or upon any of their respective
properties, income or franchises, which are shown to be due and payable in
such returns have been paid. For all taxable years ending on or before
September 30, 1988, the Federal income tax liability of the Company and
its Restricted Subsidiaries has been satisfied and either the period of
limitations on assessment of additional Federal income tax has expired or
the Company and its Restricted Subsidiaries have entered into an agreement
with the Internal Revenue Service closing conclusively the total tax
liability for the taxable year. The Company does not know of any proposed
additional tax assessment against it for which adequate provision has not
been made on its accounts, and no material controversy in respect of
additional Federal or state income taxes due since said date is pending or
to the knowledge of the Company threatened. The provisions for taxes on
the books of the Company and each Restricted Subsidiary are adequate for
all open years, and for its current fiscal period.
14. Use of Proceeds. The net proceeds from the sale of the Notes will be
used to refinance existing bank debt and for other corporate purposes.
None of the transactions contemplated in the Agreement (including, without
limitation thereof, the use of proceeds from the issuance of the Notes)
will violate or result in a violation of Section 7 of the Securities
Exchange Act of 1934, as amended, or any regulation issued pursuant
thereto, including, without limitation, Regulations G, T and X of the
Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter 11.
Neither the Company nor any Subsidiary owns or intends to carry or
purchase any "margin stock" within the meaning of said Regulation G.
15. Private Offering. Neither the Company, directly or indirectly, nor
any agent on its behalf has offered or will offer the Notes or any similar
Security or has solicited or will solicit an offer to acquire the Notes or
any similar Security from or has otherwise approached or negotiated or
will approach or negotiate in respect of the Notes or any similar Security
with any Person other than the Purchasers and not more than 44 other
institutional investors, each of whom was offered a portion of the Notes
at private sale for investment. Neither the Company, directly or
indirectly, nor any agent on its behalf has offered or will offer the
Notes or any similar Security or has solicited or will solicit an offer to
acquire the Notes or any similar Security from any Person so as to bring
the issuance and sale of the Notes within the provisions of Section 5 of
the Securities Act of 1933, as amended.
16. ERISA. The consummation of the transactions provided for in the
Agreement and compliance by the Company with the provisions thereof and
the Notes issued thereunder will not involve any prohibited transaction
within the meaning of ERISA or Section 4975 of the Internal Revenue Code
of 1986, as amended. Each Plan complies in all material respects with all
applicable statutes and governmental rules and regulations, and (a) no
Reportable Event has occurred and is continuing with respect to any Plan,
(b) neither the Company nor any ERISA Affiliate has withdrawn from any
Plan or Multiemployer Plan or instituted steps to do so, and (c) no steps
have been instituted to terminate any Plan. No condition exists or event
or transaction has occurred in connection with any Plan which could result
in the incurrence by the Company or any ERISA Affiliate of any material
liability, fine or penalty. No Plan maintained by the Company or any
ERISA Affiliate, nor any trust created thereunder, has incurred any
"accumulated funding deficiency" as defined in Section 302 of ERISA nor
does the present value of all benefits vested under all Plans exceed, as
of the last annual valuation date, the value of the assets of the Plans
allocable to such vested benefits by an amount greater than $1,000,000 in
the aggregate. Neither the company nor any ERISA Affiliate has any
contingent liability with respect to any post-retirement "welfare benefit
plan" (as such term is defined in ERISA) except as has been disclosed to
the Purchasers.
17. Compliance with Law. Neither the Company nor any Restricted
Subsidiary (a) is in violation of any law, ordinance, franchise,
governmental rule or regulation to which it is subject; or (b) has failed
to obtain any license, permit, franchise or other governmental
authorization necessary to the ownership of its property or to the conduct
of its business, which violation or failure to obtain would materially
adversely affect the business, prospects, profits, properties or condition
(financial or otherwise) of the Company and its Restricted Subsidiaries,
taken as a whole, or impair the ability of the Company to perform its
obligations contained in the Agreement or the Notes. Neither the Company
nor any Restricted Subsidiary is in default with respect to any order of
any court or governmental authority or arbitration board or tribunal.
18. Compliance with Environmental Laws. The Company is not in violation
of any applicable Federal, state, or local laws, statutes, rules,
regulations or ordinances relating to public health, safety or the
environment, including, without limitation, relating to releases,
discharges, emissions or disposals to air, water land or ground water, to
the withdrawal or use of ground water, to the use, handling or disposal of
polychlorinated biphenyls (PCB's), asbestos or urea formaldehyde, to the
treatment, storage, disposal or management of hazardous substances
(including, without limitation, petroleum, crude oil or any fraction
thereof, or other hydrocarbons), pollutants or contaminants, to exposure
to toxic, hazardous or other controlled, prohibited or regulated
substances which violation could have a material adverse effect on the
business, prospects, profits, properties or condition (financial or
otherwise) of the Company and its Restricted Subsidiaries, taken as a
whole. The Company does not know of any liability or class of liability
of the Company or any Restricted Subsidiary under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
(42 U.S Section 9601 et seq.), or the Resource Conservation and Recovery
Act of 1976, as amended (42 U.S Section 6901 et seq.).
Dated:
Johnson Worldwide Associates, Inc.
By:
Its
<PAGE>
EXHIBIT C (to Note Agreement)
Description of Special Counsel's Closing Opinion
The closing opinion of Chapman and Cutler, special counsel to the
Purchasers, called for by Section 4.1 of the Note Agreement, shall be
dated the Closing Date and addressed to the Purchasers, shall be
satisfactory in form and substance to the Purchasers and shall be to the
effect that:
1. The Company is a corporation, validly existing and in good
standing under the laws of the State of Wisconsin and has the corporate
power and the corporate authority to execute and deliver the Note
Agreement and to issue the Notes.
2. The Note Agreement has been duly authorized by all necessary
corporate action on the part of the Company, has been duly executed and
delivered by the Company and constitutes the legal, valid and binding
contract of the Company enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent conveyance and similar
laws affecting creditors' rights generally, and general principles of
equity (regardless of whether the application of such principles is
considered in a proceeding in equity or at law).
3. The Notes have been duly authorized by all necessary corporate
action on the part of the Company, and the Notes being delivered on the
date hereof have been duly executed and delivered by the Company and
constitute the legal, valid and binding obligations of the Company
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent conveyance and similar laws affecting creditors'
rights generally, and general principles of equity (regardless of
whether the application of such principles is considered in a proceeding
in equity or at law).
4. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Agreement do not, under existing
law, require the registration of the Notes under the Securities Act of
1933, as amended, or the qualification of an indenture under the Trust
Indenture Act of 1939, as amended.
The opinion of Chapman and Cutler shall also state that the opinion of
Foley & Lardner is satisfactory in scope and form to Chapman and Cutler
and that, in their opinion, the Purchasers are justified in relying
thereon.
In rendering the opinion set forth in paragraph 1 above, Chapman and
Cutler may rely, as to matters referred to in paragraph 1, solely upon an
examination of the Articles of Incorporation certified by, and a
certificate of good standing of the Company from, the Secretary of State
of the State of Wisconsin, the By-laws of the Company and the [general
business corporation law] of the State of Wisconsin. The opinion of
Chapman and Cutler is limited to the laws of the State of Illinois, the
general business corporation law of the State of Wisconsin and the Federal
laws of the United States.
With respect to matters of fact upon which such opinion is based,
Chapman and Cutler may rely on appropriate certificates of public
officials and officers of the Company and upon representations of the
Company and the Purchasers delivered in connection with the issuance and
sale of the Notes.
<PAGE>
EXHIBIT D (to Note Agreement)
Description of Closing Opinion of
Independent Counsel to the Company
The closing opinion of Foley & Lardner, independent counsel for the
Company, which is called for by Section 4.2 of the Note Agreements, shall
be dated the Closing Date and addressed to the Purchasers, shall be
satisfactory in scope and form to the Purchasers and shall be to the
effect that:
(1) The Company is a corporation, duly incorporated, legally
existing and in good standing under the laws of the State of Wisconsin,
has corporate power and authority and is duly authorized to enter into
and perform the Agreements and to issue the Notes and incur the
Indebtedness to be evidenced thereby and has full corporate power and
authority to conduct the activities in which it is now engaged and is
duly licensed or qualified and is in good standing as a foreign
corporation in each jurisdiction in which the character of the
properties owned or leased by it or the nature of the business
transacted by it makes such licensing or qualification necessary;
(2) Each Restricted Subsidiary is a corporation duly organized,
legally existing and in good standing under the laws of its jurisdiction
of incorporation and is duly licensed or qualified and is in good
standing in each jurisdiction in which the character of the properties
owned or leased by it or the nature of the business transacted by it
makes such licensing or qualification necessary; and all of the issued
and outstanding shares of capital stock of each such Restricted
Subsidiary have been duly issued, are fully paid and non-assessable and
are owned by the Company, by one or more Restricted Subsidiaries, or by
the Company and one or more Restricted Subsidiaries;
(3) The Note Agreement has been duly authorized by proper corporate
action on the part of the Company, have been duly executed and delivered
by an authorized officer of the Company and constitutes the legal, valid
and binding contract and agreement of the Company enforceable in
accordance with its terms, except as enforceability thereof may be
limited by (a) bankruptcy, insolvency or similar laws, affecting the
enforcement of creditors' rights generally and (b) equitable principles
of general applicability (regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(4) The Notes have been duly authorized by proper corporate action
on the part of the Company, have been duly executed by an authorized
officer of the Company and delivered and constitute the legal, valid and
binding obligations of the Company enforceable in accordance with their
terms, except as enforceability thereof may be limited by (a)
bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and (b) equitable principles of general
applicability (regardless of whether such enforceability is considered
in a proceeding in equity or at law);
(5) The issuance and sale of the Notes and the execution, delivery
and performance by the Company of the Note Agreement do not conflict
with or result in any breach of any of the provisions of or constitute a
default under or result in the creation or imposition of any lien or
encumbrance upon any of the property of the Company pursuant to the
provisions of the Articles of Incorporation or By-laws of the Company or
any agreement or other instrument known to such counsel to which the
Company or any Subsidiary is a party or by which the Company or any
Subsidiary may be bound;
(6) No approval, consent or withholding of objection of or on the
part of, or filing registration or qualification with, any governmental
body, Federal, state or local, is necessary in connection with the
execution and delivery of the Note Agreement by the Company or the
issuance, sale and delivery of the Notes by the Company;
(7) The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Agreement is an exempt
transaction under the Securities Act of 1933, as amended, and does not
under existing law require the registration of the Notes under the
Securities Act of 1933, as amended, or the qualification of an indenture
in respect thereof under the Trust Indenture Act of 1939 as amended;
(8) There are no proceedings pending or threatened, against or
affecting the Company or any Subsidiary in any court or before any
governmental authority or arbitration board or tribunal which involve
the reasonable possibility of materially and adversely affecting the
properties, business, prospects, profits or condition (financial or
otherwise) of the Company and its Subsidiaries; and
(9) None of the transactions contemplated in the Note Agreement
(including, without limitation thereof, the use of the proceeds from the
sale of the Notes) will violate or result in a violation of Section 7 of
the Securities Exchange Act of 1934, as amended, or any regulations
issued pursuant thereto, including, without limitation, Regulations G, T
or X of the Board of Governors of the Federal Reserve System (12 C.F.R.,
Chapter II).
The opinion of Foley & Lardner shall cover such other matters relating
to the sale of the Notes as the Purchasers may reasonably request. With
respect to matters of fact on which such opinion is based, such counsel
shall be entitled to rely on appropriate certificates of public officials
and officers of the Company. With respect to matters of laws of any
foreign jurisdiction, such counsel shall be entitled to rely upon the
opinion of local counsel for such jurisdiction.
CREDIT AGREEMENT
dated as of
November 29, 1995
among
Johnson Worldwide Associates, Inc.
The Banks Listed Herein
The First National Bank of Chicago,
as Agent
<PAGE>
TABLE OF CONTENTS
I. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01. Definitions. . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Accounting Terms. . . . . . . . . . . . . . . . 18
SECTION 1.03. Directly or Indirectly. . . . . . . . . . . . . . 18
II. THE LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.01. Revolving Loans and Eurocurrency Loans. . . . . . 18
SECTION 2.02. (Intentionally omitted). . . . . . . . . . . . . 21
SECTION 2.03. (a) Revolving Loan Notes. . . . . . . . . . . . 21
SECTION 2.03. (b) Eurocurrency Notes . . . . . . . . . . . . . 22
SECTION 2.04. Absolute Rate Loans. . . . . . . . . . . . . . . 23
SECTION 2.05. (Intentionally omitted). . . . . . . . . . . . . 25
SECTION 2.06. Interest on Loans. . . . . . . . . . . . . . . . 25
SECTION 2.07. Default Interest; Alternate Rate of Interest. . . 27
SECTION 2.08. Refinancing of Revolving Loans. . . . . . . . . . 28
SECTION 2.09. Refinancing of Eurocurrency Loans . . . . . . . . 30
SECTION 2.10. (Intentionally omitted) . . . . . . . . . . . . . 31
SECTION 2.11 Voluntary and Mandatory Prepayment of Loans;
Indemnification. . . . . . . . . . . . . . . . . 31
SECTION 2.12. Pro Rata Treatment; Funds; Manner of Payment and
Prepayment; Net Payments . . . . . . . . . . . . 32
SECTION 2.13. Other Events. . . . . . . . . . . . . . . . . . . 35
SECTION 2.14. Change in Legality. . . . . . . . . . . . . . . . 38
SECTION 2.15. Fees, Reduction of Commitment. . . . . . . . . . 39
SECTION 2.16. Increase of Commitments. . . . . . . . . . . . . 40
SECTION 2.17. Removal of Banks. . . . . . . . . . . . . . . . . 41
III. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 41
IV. CONDITIONS OF LENDING . . . . . . . . . . . . . . . . . . . . . 45
SECTION 4.01. All Borrowings. . . . . . . . . . . . . . . . . 45
SECTION 4.02. Initial Borrowing. . . . . . . . . . . . . . . . 46
SECTION 4.03. Initial Borrowing by Eligible Subsidiaries. . . . 47
SECTION 4.04. Absolute Rate Loans. . . . . . . . . . . . . . 48
V. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . 48
SECTION 5.01. Financial Statements . . . . . . . . . . . . . . 48
SECTION 5.02. Litigation Notice . . . . . . . . . . . . . . . . 49
SECTION 5.03. ERISA . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 5.04. Corporate Existence. . . . . . . . . . . . . . . 52
SECTION 5.05. Insurance. . . . . . . . . . . . . . . . . . . . 52
SECTION 5.06. Obligations and Taxes. . . . . . . . . . . . . . 52
SECTION 5.07. Notice of Defaults. . . . . . . . . . . . . . . 52
SECTION 5.08. Use of Proceeds. . . . . . . . . . . . . . . . . 53
SECTION 5.09. Environmental Notices and Inspection. . . . . . . 53
SECTION 5.10. Compliance with Laws. . . . . . . . . . . . . . . 53
SECTION 5.11. Inspection. . . . . . . . . . . . . . . . . . . 53
SECTION 5.12. Conduct of Business . . . . . . . . . . . . . . . 54
VI. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 6.01. Limitations on Indebtedness. . . . . . . . . . . 54
SECTION 6.02. Mergers, Consolidations, Sales of Assets, Etc . . 54
SECTION 6.03. Fixed Charges Coverage Ratio. . . . . . . . . . . 58
SECTION 6.04. Distributions . . . . . . . . . . . . . . . . . . 58
SECTION 6.05. Investments. . . . . . . . . . . . . . . . . . 60
SECTION 6.06. Transactions with Affiliates. . . . . . . . . . . 61
SECTION 6.07. ERISA. . . . . . . . . . . . . . . . . . . . . . 61
SECTION 6.08. Environmental Compliance. . . . . . . . . . . . . 62
VII. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . 62
VIII. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 8.01. Appointment and Authority of Agent. . . . . . . . 65
SECTION 8.02. Agent May Rely on Documents. . . . . . . . . . 65
SECTION 8.03. No Amendment to Agent's Duties Without Consent. . 65
SECTION 8.04. Responsibilities of Agent. . . . . . . . . . . . 65
SECTION 8.05. Indemnification of Agent. . . . . . . . . . . . 66
SECTION 8.06. Agent Shall Have Rights of a Bank. . . . . . . . 66
SECTION 8.07. Credit Decision. . . . . . . . . . . . . . . . . 66
SECTION 8.08. Successor Agent. . . . . . . . . . . . . . . . . 66
IX. AMENDMENTS; WAIVERS; AND REMEDIES . . . . . . . . . . . . . . . 67
X. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 10.01. No Discharge. . . . . . . . . . . . . . . . . 67
SECTION 10.02. Sharing of Setoffs. . . . . . . . . . . . . . . 67
SECTION 10.03. Severability. . . . . . . . . . . . . . . . . . 68
SECTION 10.04. Successors and Assigns . . . . . . . . . . . . . 68
SECTION 10.05. Governing Law. . . . . . . . . . . . . . . . . 69
SECTION 10.06. Currency Indemnity. . . . . . . . . . . . . . . 70
SECTION 10.07. Headings. . . . . . . . . . . . . . . . . . . . 70
SECTION 10.08. Notices. . . . . . . . . . . . . . . . . . . . 70
SECTION 10.09. Survival of Agreement . . . . . . . . . . . . . 70
SECTION 10.10. Expenses of Banks. . . . . . . . . . . . . . . . 71
SECTION 10.11. Foreign Bank Certifications. . . . . . . . . . . 71
XI. GUARANTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
XII. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . . 74
EXHIBIT "A", REVOLVING LOAN NOTE . . . . . . . . . . . . . . . . . . 82
EXHIBIT "B", EUROCURRENCY NOTE . . . . . . . . . . . . . . . . . . . 84
EXHIBIT "C", COMPETITIVE BID NOTE . . . . . . . . . . . . . . . . . . 86
EXHIBIT "D", COMPETITIVE BID QUOTE REQUEST . . . . . . . . . . . . . 88
EXHIBIT "E", COMPETITIVE BID QUOTE . . . . . . . . . . . . . . . . . 89
EXHIBIT "F", FORM OF ELECTION TO PARTICIPATE . . . . . . . . . . . . 91
EXHIBIT "G", FORM OF ELECTION TO TERMINATE . . . . . . . . . . . . . 93
EXHIBIT "H", OPINION . . . . . . . . . . . . . . . . . . . . . . . . 95
SCHEDULE 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
SCHEDULE 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
SCHEDULE 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
SCHEDULE 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
SCHEDULE 6.05 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
<PAGE>
THIS REVOLVING CREDIT AGREEMENT dated as of November 29, 1995 (as the same
may be amended, supplemented or otherwise modified from time to time
hereafter, the "Agreement"), is made by and among JOHNSON WORLDWIDE
ASSOCIATES, INC., a Wisconsin corporation (the "Company"), certain
consolidated subsidiaries of the Company which may from time to time
become parties hereto, THE FINANCIAL INSTITUTIONS WHICH ARE SIGNATORIES
HERETO (individually, a "Bank" and, collectively, the "Banks"), and The
First National Bank of Chicago, a national banking association,
individually as one of the Banks, and as agent for the Banks (in such
capacity, the "Agent").
RECITALS
The Company, the Banks and the Agent have agreed to enter into
this Agreement in order to set forth the terms and conditions under which
the Banks will hereafter extend loans and make other financial
accommodations to or on behalf of the Company and the Eligible
Subsidiaries (as hereinafter defined).
NOW, THEREFORE, in consideration of the foregoing recitals, the
following terms and provisions and other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the Company,
the Eligible Subsidiaries, the Banks and the Agent, such parties hereby
agree as follows:
I. DEFINITIONS
SECTION 1.01. Definitions. As used herein, the following words
and terms, when capitalized, shall have the following meanings (such
meanings to be equally applicable to both the singular and the plural
forms of the terms defined):
"Absolute Rate" shall mean, with respect to a Loan made by a
given Bank for the relevant Interest Period, the rate of interest per
annum (rounded to the nearest 1/100 of 1%) offered by such Bank and
accepted by the Company pursuant to Section 2.04(c).
"Absolute Rate Auction" shall mean a solicitation of Competitive
Bid Quotes setting forth Absolute Rates pursuant to Section 2.04.
"Absolute Rate Loan" shall mean a Loan which bears interest at
an Absolute Rate.
"Acquisitions" shall mean any transaction or series of
transactions by which the Company or any Subsidiary of the Company, by
merger or otherwise, directly or indirectly: (a) acquires all or
substantially all of the assets of any Person, or a portion of the assets
of any Person, or the technological rights of any Person, which
constitutes all or substantially all, or, in the case of technological
rights, permits the operation of, a product line, division or other
operating segment of such Person; (b) acquires control of the majority of
the voting securities of a Person; (c) acquires a controlling equity
interest in any Person; (d) acquires an option or right to consummate any
of the foregoing; or (e) acquires any additional securities or equity
interests in a Person in which the Company or any Subsidiary has a
controlling equity interest or control of the majority of the voting
securities.
"Adjusted CD Rate" shall mean, with respect to any Adjusted CD
Rate Loan for any Interest Period, an interest rate per annum (rounded
upwards, if necessary, to the next higher 1/100 of 1%) equal to the sum of
(a) the Adjusted CD Rate Margin plus (b) a rate per annum equal to the
product of (i) the Fixed Certificate of Deposit Rate in effect for such
Interest Period and (ii) Statutory Reserves, plus (c) the Assessment Rate.
For purposes hereof, the term "Fixed Certificate of Deposit Rate" shall
mean the arithmetic average (rounded upwards, if necessary, to the next
higher 1/100 of 1%) of the prevailing rates per annum bid on or about
10:00 am., Chicago time, to the Agent on the first Business Day of the
Interest Period for the Adjusted CD Rate Loan by three Chicago negotiable
certificate of deposit dealers of recognized national standing and
selected by the Agent for the purchase at face value of negotiable
certificates of deposit of major United States money center banks in an
amount approximately equal to the principal amount of First Chicago's
portion of the Adjusted CD Rate Loan and with a maturity comparable to
such Interest Period.
"Adjusted CD Rate Loan" shall mean any Loan for which interest
is determined, in accordance with the provisions hereof, at the Adjusted
CD Rate.
"Adjusted CD Rate Margin" is defined in Section 2.06.
"Affiliate" shall mean any Person (other than a Subsidiary) (a)
which directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, the Company, (b)
which beneficially owns or holds 5% or more of any class of the Voting
Stock of the Company or (c) 5% or more of the Voting Stock (or in the case
of a Person which is not a corporation, 5% or more of the equity interest)
of which is beneficially owned or held by the Company or a Subsidiary.
The term "control" means possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a
Person, whether through the ownership of Voting Stock, by contract or
otherwise.
"Agent" shall have the meaning ascribed to such term in the
initial paragraph of this Agreement and any successor Agent appointed
pursuant to Section 8.08.
"Aggregate Commitment" shall mean $90,000,000, as such amount
may be increased or reduced from time to time pursuant to Section 2.15 or
2.16 or other provisions hereof.
"Aggregate Eurocurrency Commitment" shall mean $45,000,000, as
such amount may be increased or reduced from time to time pursuant to
Section 2.01(g), 2.15, 2.16 or 2.17 or other provisions hereof.
"Aggregate Revolving Commitment" shall mean $45,000,000, as such
amount may be increased or reduced from time to time pursuant to Section
2.01(g), 2.15, 2.16 or 2.17 or other provisions hereof.
"Agreement" shall have the meaning ascribed to such term in the
initial paragraph of this Agreement.
"Alternate Base Rate" shall mean, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greater of (a) the Corporate Base Rate in effect on such day and (b) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. For
purposes hereof, "Corporate Base Rate" shall mean the rate of interest per
annum announced from time to time by First Chicago as its corporate base
rate in effect at its principal office in Chicago; each change in the
Corporate Base Rate shall be effective on the date such change is
announced by First Chicago. "Federal Funds Effective Rate" shall mean,
for any day, the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for the
day of such transactions received by the Agent from three Federal funds
brokers of recognized standing selected by it. If for any reason the
Agent shall have determined (which determination shall be conclusive
absent manifest error) that it is unable to ascertain the Federal Funds
Effective Rate for any reason, including the inability or failure of the
Agent to obtain sufficient quotations in accordance with the terms hereof,
the Alternate Base Rate shall be determined without regard to clause (b)
of the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any change
in the Alternate Base Rate due to a change in the Corporate Base Rate or
the Federal Funds Effective Rate shall be effective on the effective date
of such change in the Corporate Base Rate or the Federal Funds Effective
Rate, respectively.
"Alternate Base Rate Loan" shall mean any Loan for which
interest is determined, in accordance with the provisions hereof, at the
Alternate Base Rate.
"Alternative Currency" shall mean Canadian dollars, French
francs, German marks, Japanese yen, pounds sterling, Australian dollars
and any other currency (other than ECU's) which is freely transferable and
convertible into Dollars, as and if available, in which deposits are
customarily offered to banks in the London interbank market, which the
Borrower requests the Agent to include as an Alternative Currency
hereunder and which is acceptable to each Bank; provided that the Agent
shall promptly notify each Bank of each such request and each Bank shall
be deemed to have agreed to each such request if its objection thereto has
not been received by the Agent within five Business Days from the date of
such notification by the Agent to such Bank.
"Applicable Percentage" shall mean, with respect to each Bank at
any date of determination thereof, a fraction (expressed as a percentage),
the numerator of which is the sum of such Bank's Revolving Loan Commitment
and Eurocurrency Commitment, in each case as at such date, and the
denominator of which is the Aggregate Commitment as at such date, as such
percentage may be modified from time to time pursuant to the terms hereof.
"Applicable Rate" shall mean at any time, for any Loan, the
Alternate Base Rate, the Adjusted CD Rate, the Eurocurrency Rate or LIBOR
at such time, as determined in accordance with Section 2.06 hereof.
"Assessment Rate" shall mean for any date the annual rate
(rounded upwards, if necessary, to the next higher 1/100 of 1%) most
recently estimated by First Chicago as the then current net annual
assessment rate that will be employed in determining amounts payable by
First Chicago to the Federal Deposit Insurance Corporation (or any
successor) for insurance by such Corporation (or such successor) of time
deposits made in Dollars at First Chicago's domestic offices.
"Average Outstanding Balance of Consolidated Current Debt" shall
mean the average of the Current Debt outstanding on each of the Company's
July fiscal month-end, August 15, August fiscal month-end, September 15,
and the Company's September fiscal month-end for each Compliance Period
(provided, however, that there shall be excluded from this calculation the
amount of $31,828,000 of Current Debt which was refinanced on October 19,
1995 with proceeds of the Company's Senior Notes, Series A and B, due
October 15, 2005 in the aggregate principal amount of $45,000,000).
"Bank" and "Banks" shall have the meanings ascribed to such
terms in the initial paragraph of this Agreement and their respective
successors and assigns.
"Bankruptcy Code" shall mean Title 11 of the United States Code,
as the same may be amended from time to time, and any successor statute
thereto.
"Benefit Plan" shall mean a defined benefit plan as defined in
Section 3(35) of ERISA (other than a Multiemployer Plan) in respect of
which the Company or any ERISA Affiliate is, or within the immediately
preceding six (6) years was, an "employer" as defined in Section 3(5) of
ERISA.
"Board" shall mean the Board of Governors of the Federal Reserve
System of the United States.
"Borrowing" shall mean a borrowing consisting of one or more
Loans from the Banks.
"Borrowing Date" shall mean, with respect to any Loan, the date
on which such Loan is disbursed to the Company.
"Business Day" shall mean a day on which the Banks are each open
for business at their respective Domestic Offices; provided that when the
term "Business Day" is used with respect to any LIBOR Loan, it shall mean
a day on which the Banks are each also open for business at their
respective Eurodollar Offices and on which Dollar transactions are carried
on in the applicable interbank market and further provided that when the
term "Business Day" is used with respect to any Eurocurrency Loan, it
shall mean a day on which commercial banks are open for domestic and
international business (including dealings in deposits in the Alternative
Currency constituting such Eurocurrency Loan) in both London and the place
where such funds are paid or made available.
"Capitalized Lease" shall mean any lease the obligation for
Rentals with respect to which is required to be capitalized on a balance
sheet of the lessee in accordance with GAAP.
"Capitalized Rentals" of any Person shall mean as of the date of
any determination the amount at which the aggregate Rentals due and to
become due under all Capitalized Leases under which such Person is a
lessee would be reflected as a liability on a consolidated balance sheet
of such Person and its subsidiaries prepared in accordance with GAAP.
"Commitment Fee" shall have the meaning ascribed to such term in
Section 2.15(a) hereof.
"Commitments" shall mean the Eurocurrency Commitments and the
Revolving Loan Commitments.
"Company" shall have the meaning ascribed to such term in the
initial paragraph of this Agreement.
"Competitive Bid Borrowing Notice" is defined in Section
2.04(c).
"Competitive Bid Note" shall mean a promissory note in
substantially the form of Exhibit "C" hereto, with appropriate insertions,
duly executed and delivered to the Agent by the Company for the account of
a Bank and payable to the order of such Bank, including any amendment,
modification, renewal or replacement of such promissory note.
"Competitive Bid Quote" shall mean a Competitive Bid Quote
delivered by a Bank to the Company in accordance with Section 2.04(b).
"Competitive Bid Request" shall mean a Competitive Bid Quote
Request delivered by the Company to any one or more of the Banks in
accordance with Section 2.04(a).
"Compliance Period" shall mean the period beginning on the date
of the Company's July fiscal month-end and ending on the date of the
Company's September fiscal month-end in each calendar year.
"Consolidated Current Debt" shall mean, without duplication,
Current Debt of the Company and its Subsidiaries determined on a
consolidated basis eliminating intercompany items.
"Consolidated Funded Debt" shall mean, without duplication,
Funded Debt of the Company and its Subsidiaries determined on a
consolidated basis eliminating intercompany items.
"Consolidated Net Income" for any period shall mean net income
of the Company and its Subsidiaries from continuing operations, determined
on a consolidated basis in accordance with GAAP consistently applied but
excluding net earnings and losses of any Person (other than a Subsidiary)
with which the Company or a Subsidiary shall have consolidated or which
shall have merged or liquidated into or with the Company or a Subsidiary
prior to the date of such consolidation, merger or liquidation.
"Consolidated Net Worth" shall mean as of the date of any
determination thereof the amount of the par or stated value of all
outstanding capital stock, capital surplus and retained earnings of the
Company and its Subsidiaries, net of all cumulative translation
adjustments and contingent compensation adjustments determined on a
consolidated basis in accordance with GAAP.
"Consolidated Tangible Assets" shall mean as of the date of any
determination thereof the total amount of all Tangible Assets of the
Company and its Subsidiaries on a consolidated basis after deducting
therefrom all Investments incurred pursuant to and within the limitations
of Section 6.05(j) hereof.
"Consolidated Tangible Net Worth" shall mean as of the date of
any determination thereof Consolidated Net Worth less (a) all assets of
the Company and its Subsidiaries that are properly classified as
"intangible assets" and (b) all Investments incurred pursuant to and
within the limitations of Section 6.05(j) hereof, all determined in
accordance with GAAP.
"Consolidated Tangible Net Worth Available for Investments"
shall mean as of the date of any determination thereof the sum of (a)
Consolidated Tangible Net Worth and (b) all Investments incurred pursuant
to and within the limitations of Section 6.05(j) hereof.
"Consolidated Total Assets" of the Company and its Subsidiaries
shall mean as of the date of any determination thereof, the total assets
of the Company and its Subsidiaries as of such date determined on a
consolidated basis in accordance with GAAP.
"Consolidated Total Capitalization" shall mean as of the date of
any determination thereof the sum of (a) Consolidated Net Worth and (b)
Consolidated Funded Debt.
"Current Debt" shall mean as of the date of any determination
thereof (a) all Indebtedness for borrowed money or which has been incurred
in connection with the acquisition of property or assets other than Funded
Debt, provided that any portion of such obligations incurred in connection
with the acquisition of property or assets specifically including, without
limitation, obligations which have been incurred by such Person in
connection with any sale, transfer or issuance of stock pursuant to and in
compliance with Section 6.02(c)(5) and which are at the date of any
determination of Current Debt contingent as to amount or as to payment
shall not be treated as Current Debt on such date, (b) Guaranties of
Current Debt of others, and (c) all obligations of such Person with
respect to receivables sold or otherwise discounted with recourse which
would not constitute Funded Debt pursuant to the terms of the definition
thereof.
"Debt/Cap Ratio" is defined in Section 2.06(b) hereof.
"Default" shall mean a condition or event which, with the giving
of notice or lapse of time or both, would constitute an Event of Default.
"Dollar Amount" shall mean in relation to any Borrowing of Loans
denominated in Dollars, the amount thereof, and in relation to any
Borrowing of Loans denominated in an Alternative Currency, the equivalent
in Dollars of such amount of Alternative Currency, calculated on the basis
of the arithmetical mean of the buy and sell spot rates of exchange of the
Agent for such Alternative Currency quoted to the Company or the
applicable Eligible Subsidiary as of 11:00 a.m. (London time) three
Business Days before the date of such Borrowing.
"Dollar" or "$" shall mean the currency of the United States of
America.
"DOL" shall mean the United States Department of Labor and any
successor department or agency.
"Domestic Office" shall mean for each Bank or the Agent, the
Domestic Office set forth for such Bank or the Agent on the signature
pages hereof, unless such Bank or the Agent shall designate a different
Domestic Office or Domestic Offices by notice in writing to the Agent and
the Company; provided that a Bank may designate different Domestic Offices
for its Alternate Base Rate Loans on the one hand and its Adjusted CD Rate
Loans on the other hand, in which case all references herein to the
Domestic Office of such Bank shall be deemed to refer to either or both of
such offices as the context may require.
"Domestic Subsidiary" shall mean any Subsidiary (a) which is
organized under the laws of the United States or any state thereof and (b)
which conducts substantially all of its business and has substantially all
of its assets within the United States.
"Effective Date" shall mean the date on which this Agreement
shall become effective pursuant to the terms and conditions of Section
4.02 hereof.
"Eighty Percent-Owned Subsidiary" shall mean a Subsidiary of
which 80% (by number of votes) of the Voting Stock shall be beneficially
owned, directly or indirectly, by the Company.
"Election to Participate" shall mean an Election to Participate
by an Eligible Subsidiary, substantially in the form of Exhibit "F"
hereto.
"Election to Terminate" shall mean an Election to Terminate by
an Eligible Subsidiary, substantially in the form of Exhibit "G" hereto.
"Eligible Subsidiary" shall mean any Subsidiary of the Company
which is organized and doing business outside of the United States of
America and as to which an Election to Participate shall have been
delivered to the Agent and as to which an Election to Terminate shall not
have been delivered to the Agent. Each such Election to Participate and
Election to Terminate shall have been duly executed on behalf of such
Eligible Subsidiary and the Company in such number of copies as the Agent
may request. The delivery of an Election to Terminate shall not affect
any obligation of an Eligible Subsidiary theretofore incurred. The Agent
shall promptly give written notice to the Banks of the receipt of any
Election to Participate or Election to Terminate.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as the same may be amended, and any successor statute.
"ERISA Affiliate" shall mean any (i) corporation which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the IRC) as the Company, (ii) partnership or other trade
or business (whether or not incorporated) under common control (within the
meaning of Section 414(c) of the IRC) with the Company, and (iii) member
of the same affiliated service group (within the meaning of Section 414(m)
of the IRC) as the Company, any corporation described in clause (i) above
or any partnership or trade or business described in clause (ii) above.
"Eurocurrency Commitment" shall mean, with respect to any Bank,
the amount set forth opposite its signature below in the column entitled
"Eurocurrency Commitment", as such amount may be modified from time to
time pursuant to the terms hereof.
"Eurocurrency Loan" shall have the meaning ascribed to such term
in Section 2.01(b).
"Eurocurrency Margin" is defined in Section 2.06(b).
"Eurocurrency Note" shall have the meaning ascribed to such term
in Section 2.03(b).
"Eurocurrency Rate" shall mean, with respect to any Eurocurrency
Loan for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next higher 1/8 of 1%) equal to the sum of (a) the
Eurocurrency Margin plus (b) a rate per annum equal to the Euro-Interbank
Rate in effect for such Interest Period. For purposes hereof
"Euro-Interbank Rate" shall mean, with respect to any Eurocurrency Loan
for any Interest Period, the applicable London interbank offered rate for
deposits in the applicable Alternative Currency appearing on Telerate Page
3750 as of 11:00 a.m. (London time) two (2) Business Days prior to the
first day of such Interest Period, and having a maturity approximately
equal to such Interest Period. If no London interbank offered rate of
such maturity then appears on Telerate Page 3750, then the Euro-Interbank
Rate shall be equal to the London interbank offered rate for deposits in
the applicable Alternative Currency maturing immediately before or
immediately after such maturity, whichever is higher, as determined by the
Agent from Telerate Page 3750. If Telerate Page 3750 is not available,
the applicable Euro-Interbank Rate for the relevant Interest Period shall
be the rate at which deposits in the applicable Alternative Currency
approximately equal in principal amount to First Chicago's portion of the
proposed Eurocurrency Loan and for the maturity equal to the applicable
Interest Period are offered by First Chicago in immediately available
funds in the London, England interbank market at approximately 11:00 A.M.,
London time, two (2) Business Days prior to the commencement of such
Interest Period.
"Eurodollar Office" shall mean, for each Bank, the Eurodollar
Office set forth for such Bank on the signature pages hereof, unless such
Bank shall designate a different Eurodollar Office or different Eurodollar
Offices by notice in writing to the Agent and the Company.
"Event of Default" shall mean any Event of Default set forth in
Article VII hereof.
"Expiration Date" shall mean October 30, 2000.
"Financial Officer" shall mean either the Chief Financial
Officer or such other person the Chief Financial Officer shall designate
in writing from time to time.
"First Chicago" shall mean The First National Bank of Chicago in
its individual capacity, and its successors.
"Fixed Charges" for any period shall mean on a consolidated
basis the sum of (a) all Rentals (excluding all Capitalized Rentals)
payable with respect to continuing operations during such period by the
Company and its Subsidiaries and (b) all Interest Charges on all
Indebtedness (including the interest component of Capitalized Rentals)
with respect to continuing operations of the Company and its Subsidiaries.
"Fixed Rate Loan" shall mean any Adjusted CD Rate Loan, any
Eurocurrency Loan, any LIBOR Loan or any Absolute Rate Loan.
"Funded Debt" of any Person shall mean (a) all Indebtedness for
or in respect of borrowed money or which has been incurred in connection
with the acquisition of property or assets, in each case having a final
maturity of more than one year from the date of origin thereof (or which
is renewable or extendible at the option of the obligor for a period or
periods more than one year from the date of origin), including all
payments in respect thereof that are required to be made within one year
from the date of any determination of Funded Debt, whether or not the
obligation to make such payment shall constitute a current liability of
the obligor under GAAP, provided that any portion of such obligations
incurred in connection with the acquisition of property or assets
specifically including, without limitation, obligations which have been
incurred by such Person in connection with any sale, transfer or issuance
of capital stock pursuant to and in compliance with Section 6.02(c)(5) and
which are at the date of any determination of Funded Debt contingent as to
amount or as to payment shall not be treated as Funded Debt on such date,
(b) all Capitalized Rentals, (c) all Guaranties by such Person of Funded
Debt of others and (d) all obligations of such Person with respect to
receivables sold or otherwise discounted with recourse.
"GAAP" shall mean United States generally accepted accounting
principles as in effect from time to time.
"Governmental Authority" shall mean any nation, government,
city, town, municipality, or county or any federal, state, provincial,
local or other political subdivision thereof or thereto and any
department, commission, instrumentality, agency or other entity exercising
executive, legislative, judicial, regulatory or administrative functions
of or pertaining to such nation, government, city, town, municipality,
county or federal, state, provincial, local or other political
subdivisions thereof or thereto.
"Guaranties" by any Person shall mean all obligations (other
than endorsements in the ordinary course of business of negotiable
instruments for deposit or collection) of such Person guaranteeing or in
effect guaranteeing any Indebtedness, dividend or other obligation, of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, all obligations incurred
through an agreement, contingent or otherwise, by such Person: (a) to
purchase such Indebtedness or obligation or any property or assets
constituting security therefor, (b) to advance or supply funds (1) for the
purchase or payment of such Indebtedness or obligation, (2) to maintain
working capital or other balance sheet condition or otherwise to advance
or make available funds for the purchase or payment of such Indebtedness
or obligation, or (c) to lease property or to purchase Securities or other
property or services primarily for the purpose of assuring the owner of
such Indebtedness or obligation of the ability of the primary obligor to
make payment of the Indebtedness or obligation, or (d) otherwise to assure
the owner of the Indebtedness or obligation of the primary obligor against
loss in respect thereof. For the purposes of all computations made under
this Agreement, a Guaranty in respect of any Indebtedness for borrowed
money shall be deemed to be Indebtedness equal to the principal amount of
such Indebtedness for borrowed money which has been guaranteed, and a
Guaranty in respect of any other obligation or any dividend shall be
deemed to be Indebtedness equal to the maximum aggregate amount of such
obligation or dividend.
"Indebtedness" of any Person shall mean and include (a)
obligations of such Person for borrowed money or which have been incurred
in connection with the acquisition of property or assets (except for
obligations under bona fide employment, consulting, non-competition, lease
and similar agreements), provided that any portion of such obligations
which have been incurred in connection with the acquisition of property or
assets specifically including, without limitation, obligations which have
been incurred by such Person in connection with any sale, transfer or
issuance of stock pursuant to and in compliance with Section 6.02(c)(5)
and which are at the date of any determination of Indebtedness contingent
as to amount or as to payment shall not be treated as Indebtedness on such
date, (b) obligations secured by any Lien upon property or assets owned by
such Person, even though such Person has not assumed or become liable for
the payment of such obligations, (c) obligations created or arising under
any conditional sale or other title retention agreement with respect to
property acquired by such Person, notwithstanding the fact that the rights
and remedies of the seller, lender or lessor under such agreement in the
event of default are limited to repossession or sale of property, (d) all
Guaranties by such Person of obligations of others of the character
referred to in this definition, (e) Capitalized Rentals, and (f) all
obligations of such Person with respect to receivables sold or otherwise
discounted with recourse.
"Interest Charges" for any period shall mean on a consolidated
basis the sum of all interest and all amortization of debt discount and
expense on any particular Indebtedness for which such calculations are
being made, including the interest component of all Capitalized Rentals of
the Company and its Subsidiaries. For purposes of this definition,
computations of interest charges on a pro forma basis for Indebtedness
having a variable interest rate shall be calculated at the rate in effect
on the date of any determination.
"Interest Payment Date" shall mean, as to (a) Alternate Base
Rate Loans, the last Business Day of each March, June, September and
December ending after the Effective Date, and as to (b) Adjusted CD Rate
Loans, Eurocurrency Loans, LIBOR Loans and Absolute Rate Loans, the last
day of the Interest Period applicable thereto (and in the case of any
Interest Period of one hundred and eighty (180) days or six (6) months
duration, the date that would be the last day of such Interest Period if
such Interest Period were of ninety (90) days or three (3) months
duration).
"Interest Period" shall mean, (i) as to any LIBOR Loan or
Eurocurrency Loan, the period commencing on the date of such LIBOR Loan or
Eurocurrency Loan and ending on the numerically corresponding day (or if
there is no numerically corresponding day on the last day) in the calendar
month that is one (l), two (2), three (3) or six (6) months thereafter, as
the Company may elect, (ii) as to any Adjusted CD Rate Loan, a period
commencing on the date of such Adjusted CD Rate Loan, and ending thirty
(30), sixty (60), ninety (90) or one hundred and eighty (180) days
thereafter, as the Company may elect, and (iii) as to any Absolute Rate
Loan, the period commencing on the date of such Absolute Rate Loan and
ending 1-270 days thereafter, as the Company may elect; provided, however,
that (a) if any Interest Period would end on a day that is not a Business
Day, such Interest Period shall be extended to the next succeeding
Business Day (unless, in the case of a LIBOR Loan or Eurocurrency Loan,
the same would fall in a succeeding month, in which case such Interest
Period shall end on the immediately preceding Business Day), (b) no
Interest Period with respect to any Loan shall end later than the
Expiration Date and (c) interest shall accrue from and including the first
day of an Interest Period to but excluding the last day of such Interest
Period.
"IRC" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and any successor statute.
"IRS" shall mean the Internal Revenue Service and any successor
agency.
"Investments" shall mean all investments, in cash or by delivery
of property made, directly or indirectly in any Person, whether by
acquisition of shares of capital stock, indebtedness or any other
obligations or securities or by loan, advance, capital contributions or
otherwise.
"Johnson Family" shall mean at any time, collectively, Samuel C.
Johnson, his wife and their children and grandchildren, the executor or
administrator of the estate or other legal representative of any such
Person, all trusts for the benefit of the foregoing or their heirs or any
one or more of them, and all partnerships, corporations or other entities
directly or indirectly controlled by the foregoing or any one or more of
them.
"LIBOR" shall mean, with respect to any LIBOR Loan for any
Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next higher 1/8 of l%) equal to the sum of (a) the LIBOR
Margin plus (b) a rate per annum equal to the Interbank Rate in effect for
such Interest Period. For purposes hereof, "Interbank Rate" shall mean,
with respect to any LIBOR Loan for any Interest Period, the applicable
London interbank offered rate for deposits in U.S. dollars appearing on
Telerate Page 3750 as of 11:00 a.m. (London time) two (2) Business Days
prior to the first day of such Interest Period, and having a maturity
approximately equal to such Interest Period. If no London interbank
offered rate of such maturity then appears on Telerate Page 3750, then the
Interbank Rate shall be equal to the London interbank offered rate for
deposits in U.S. dollars maturing immediately before or immediately after
such maturity, whichever is higher, as determined by the Agent from
Telerate Page 3750. If Telerate Page 3750 is not available, the
applicable Interbank Rate for the relevant Interest Period shall be the
rate at which Dollar deposits approximately equal in principal amount to
First Chicago's portion of the proposed LIBOR Loan and for the maturity
equal to the applicable Interest Period are offered by First Chicago in
immediately available funds in the London, England interbank market at
approximately 11:00 A.M., London time, two (2) Business Days prior to the
commencement of such Interest Period.
"LIBOR Loan" shall mean any Loan for which interest is
determined, in accordance with the provisions hereof, at LIBOR.
"LIBOR Margin" is defined in Section 2.06(b).
"Lien" shall mean any interest in property securing an
obligation owed to, or a claim by, a Person other than the owner of the
property, whether such interest is based on the common law, statute or
contract, including, without limitation, the security interest arising
from a mortgage, encumbrance, pledge, conditional sale or trust receipt or
a lease, consignment or bailment for security purposes and including any
Capitalized Lease. The term "Lien" shall include reservations,
exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, lease and other similar title exceptions and
encumbrances affecting real property. For the purpose of this Agreement,
the Company or a Subsidiary shall be deemed to be the owner of any
property which it has acquired or holds subject to a conditional sale
agreement or other arrangement pursuant to which title to the property has
been retained by or vested in another person for security purposes.
"Loans" shall mean and include the Revolving Loans, the
Eurocurrency Loans and/or Absolute Rate Loans, as applicable.
"Majority Banks" shall mean Banks in the aggregate having at
least fifty-one percent (51%) of the Aggregate Commitment or, if the
Aggregate Commitment has been terminated, Banks in the aggregate holding
at least fifty-one percent (51%) of the aggregate unpaid principal Dollar
amount of the outstanding Loans.
"Multiemployer Plan" shall mean a "multiemployer plan" as
defined in Section 4001(a) (3) of ERISA which is, or within the
immediately preceding six (6) years was, contributed to by either the
Company or any ERISA Affiliate.
"Net Income Available for Fixed Charges" for any period shall
mean the sum of (a) Consolidated Net Income during such period plus (b)
(to the extent taken into account in determining Consolidated Net Income),
all provisions for any Federal, state or other income taxes made by the
Company and its Subsidiaries during such period plus (c) Fixed Charges (to
the extent taken into account in determining Consolidated Net Income)
during such period.
"Notes" shall mean the Revolving Loan Notes, the Eurocurrency
Notes and/or the Competitive Bid Notes, as applicable.
"Notice of Borrowing" shall have the meaning specified in
Section 2.01(a) hereof.
"Notice of Refinancing" shall have the meaning ascribed to such
term in Section 2.08 hereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and
any Person succeeding to the functions thereof.
"Parent Guaranty" shall mean the guaranty by the Company
contained in Article XI hereof, as the same may be amended, supplemented
or otherwise modified from time to time hereafter.
"Permit" shall mean any permit, approval, authorization,
license, variance, or permission required from a Governmental Authority
under an applicable Requirement of Law.
"Permitted Liens" shall mean:
(1) Liens for property taxes and assessments or governmental
charges or levies and Liens securing claims or demands of
mechanics and materialmen; provided that payment thereof is not
at the time required by Section 5.06;
(2) Liens of or resulting from any judgment or award, the time
for the appeal or petition for rehearing of which shall not have
expired, or in respect of which the Company or a Subsidiary
shall at any time in good faith be prosecuting an appeal or
proceeding for a review and in respect of which a stay of
execution pending such appeal or proceeding for review shall
have been secured;
(3) Liens incidental to the conduct of business or the
ownership of properties and assets (including, without
limitation, warehousemen's and attorneys' liens, statutory
landlords' liens, workers' compensation liens and ERISA liens)
and deposits, pledges or Liens to secure the performance of
bids, tenders or trade contracts, or to secure statutory
obligations, surety or appeal bonds or other Liens of like
general nature incurred in the ordinary course of business and
not in connection with the borrowing of money; provided that the
aggregate amount of the obligations so secured will not
materially impair the value of the assets so secured or the use
thereof in the ordinary course of business and provided,
further, that in each case, the obligation so secured will not
exceed $1,000,000 and is not overdue or, if overdue, is being
contested in good faith by appropriate actions or proceedings;
(4) minor survey exceptions or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities
and other similar purposes, or zoning or other restrictions as
to the use of real properties, which are necessary for the
conduct of the activities of the Company and its Subsidiaries or
which customarily exist on properties of Persons engaged in
similar activities and similarly situated and which do not in
any event materially impair their use in the operation of the
business of the Company and its Subsidiaries;
(5) Liens securing Indebtedness of a Subsidiary to the Company
or to an Eighty Percent-Owned Subsidiary;
(6) Liens existing as of the date of this Agreement securing
Indebtedness of the Company or any Subsidiary outstanding on
such date and described on Schedule IV attached to this
Agreement,
(7) Liens incurred after the date of this Agreement given to
secure the payment of the cost of the acquisition or
construction of fixed assets useful and intended to be used in
carrying on the business of the Company or a Subsidiary;
provided that (i) the Lien shall attach solely to the fixed
assets acquired or constructed, (ii) the Lien shall have been
created or incurred within twelve (12) months of the date of
acquisition or the date of completion of construction, as the
case may be, of such fixed assets, (iii) at the time of the
acquisition or construction of such fixed assets the aggregate
amount remaining unpaid on all Indebtedness secured by Liens on
such fixed assets whether or not assumed by the Company or a
Subsidiary shall not exceed an amount equal to the lesser of the
total cost or fair market value at the time of acquisition or
completion of construction of such fixed assets (as determined
in good faith by the Board of Directors of the Company) and (iv)
all such Indebtedness shall have been incurred within the
applicable limitations of Section 6.01;
(8) Liens existing on any assets at the time of acquisition
thereof or at the time of acquisition by the Company or a
Subsidiary of any business entity then owning such assets,
whether or not such existing Liens were given to secure the
payment of the purchase price of the assets to which they
attach, so long as they were not incurred, extended or renewed
in contemplation of such acquisition; provided that (a) any such
Lien shall attach solely to the assets acquired and (b) at the
time of the acquisition of the assets or business entity, as the
case may be, the aggregate amount remaining unpaid on all
Indebtedness secured by Liens on such assets and business
entities (whether or not assumed by the Company or such
Subsidiary) shall not be in excess of the fair market value of
such assets and business entities at the time of such
acquisition (as determined in good faith by the Board of
Directors of the Company); and
(9) any extension, renewal or replacement of any Lien permitted
by the preceding clauses (6), (7) and (8) of this definition in
respect of the same property theretofore subject to such Lien in
connection with the extension, renewal or refunding of the
Indebtedness secured thereby; provided that (a) such Lien shall
attach solely to the same such property and (b) such extension,
renewal or refunding of such Indebtedness shall be without
increase in the principal amount remaining unpaid as of the date
of such extension, renewal or refunding.
"Person" shall mean any natural person, corporation, business
trust, joint venture, association, company, partnership or Governmental
Authority.
"Plan" shall mean an employee benefit plan defined in Section
3(3) of ERISA in respect of which the Company or any ERISA Affiliate is,
or within the immediately preceding six (6) years was, an "employer" as
defined in Section 3(5) of ERISA.
"Principal Subsidiaries" shall mean any Subsidiary of the
Company which had (a) total assets, on a consolidating basis, as of the
last day of the most recently ended fiscal quarter of the Company, of an
amount equal to or greater than ten percent (10%) of Consolidated Total
Assets of the Company as of the last day of such fiscal quarter or (b) net
income, on a consolidating basis, for the Company's most recent fiscal
year, equal to or greater than 10% of Consolidated Net Income of the
Company for such year.
"Regulation D" shall mean Regulation D of the Board of Governors
of the Federal Reserve System as from time to time in effect and any
successor thereto or other regulation or official interpretation of said
Board of Governors relating to reserve requirements applicable to member
banks of the Federal Reserve System.
"Rentals" of any Person shall mean and include all fixed rents
(including as such all payments which the lessee is obligated to make to
the lessor on termination of the lease or surrender of the property)
payable by such Person, as lessee or sublessee under a lease of real or
personal property, but shall be exclusive of any amounts required to be
paid by such Person (whether or not designated as rents or additional
rents) on account of maintenance, repairs, insurance, taxes and similar
charges. Fixed rents under any so-called "percentage leases" shall be
computed solely on the basis of the minimum rents, if any, required to be
paid by the lessee regardless of sales volume or gross revenues.
"Reportable Event" shall mean any Reportable Event as defined in
Section 4043 of ERISA or the regulations thereunder for which the 30-day
notice requirement has not been waived by the PBGC.
"Requirement of Law" shall mean any federal, state or local law,
rule or regulation, Permit, or other binding determination of any
Governmental Authority.
"Revolving Loan" is defined in Section 2.01(a).
"Revolving Loan Commitment" shall mean, with respect to any
Bank, the amount set forth opposite its signature below in the column
entitled "Revolving Loan Commitment", as such amount may be modified from
time to time pursuant to the terms hereof.
"Revolving Loan Note" shall have the meaning ascribed to such
term in Section 2.03(a) hereof.
"Section" shall mean a numbered section of this Agreement,
unless another document is specifically referenced.
"Statutory Reserves" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of
which is the number one minus the aggregate of the maximum reserve
percentages (including, without limitation, any marginal, special,
emergency, or supplemental reserves) expressed as a decimal established by
the Board and any other banking authority for determining the reserve
requirements of the Agent for new negotiable time deposits in Dollars of
$100,000 or more issued by a member bank of the Federal Reserve System in
New York City (as such terms are defined in Regulation D) with maturities
approximately equal to the applicable Interest Period, in the case of the
Adjusted CD Rate. Such reserve percentages shall include, without
limitation, those imposed under Regulation D. Statutory Reserves shall be
adjusted automatically on and as of the effective date of any change in
any reserve percentage.
The term "subsidiary" shall mean, as to any particular parent
corporation, (i) any corporation of which more than 50% (by number of
votes) of the Voting Stock shall be owned by such parent corporation
and/or one or more corporations which are themselves subsidiaries of such
parent corporation and (ii) any partnership, association, joint venture or
similar business organization more than 50% of the equity ownership
interests which shall at the time be so owned. The term "Subsidiary"
shall mean a subsidiary of the Company.
"Subsidiary Obligations" shall mean all unpaid principal of and
accrued and unpaid interest on the Eurocurrency Notes, all accrued and
unpaid fees and all expenses, reimbursements, indemnities and other
obligations of the Eligible Subsidiaries to the Banks or any Bank, the
Agent or any indemnified party hereunder arising under this Agreement.
"Tangible Assets" of any Person shall mean, as of the date of
any determination thereof, the total amount of all assets of such Person
(less depreciation, depletion and other properly deductible valuation
reserves) after deducting the following: goodwill, patents, trade names,
trademarks, copyrights, franchises, experimental expense, organization
expense, unamortized debt discount and expense, the excess of cost of
shares acquired over book value of related assets, any write up in the
book value of any asset resulting from a revaluation thereof subsequent to
September 30, 1994 (except to the extent such write up is required by
GAAP) and such other assets as are properly classified as "intangible
assets" in accordance with GAAP.
"Taxes" shall have the meaning ascribed to such term in Section
2.12(b).
"Termination Event" shall mean (i) a Reportable Event with
respect to any Benefit Plan; (ii) the withdrawal of the Company or any
ERISA Affiliate from a Benefit Plan during a plan year in which the
Company or such ERISA Affiliate was a "substantial employer" as defined in
Section 4001(a) (2) of ERISA; (iii) the imposition of an obligation on the
Company or any ERISA Affiliate under Section 4041 of ERISA to provide
affected parties written notice of intent to terminate a Benefit Plan in a
distress termination described in Section 4041(c) of ERISA; (iv) the
institution by the PBGC of proceedings to terminate a Benefit Plan; (v)
any event or condition which might constitute grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to
administer, any Benefit Plan; or (vi) the partial or complete withdrawal
of the Company or any ERISA Affiliate from a Multiemployer Plan.
"Type" of Loan shall mean an Alternate Base Rate Loan, Adjusted
CD Rate Loan, Eurocurrency Loan, LIBOR Loan or Absolute Rate Loan.
"Voting Stock" shall mean securities of any class or classes,
the holders of which are ordinarily, in the absence of contingencies,
entitled to elect a majority of the corporate directors (or Persons
performing similar functions).
"Wholly-owned" when used in connection with any Subsidiary shall
mean a Subsidiary of which all of the issued and outstanding shares of
stock (other than directors' qualifying shares or shares owned by foreign
domiciliaries as required by law) shall be owned by the Company and/or one
or more of its Wholly-owned Subsidiaries.
SECTION 1.02. Accounting Terms. Where the character or amount
of any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is
required to be made for the purposes of this Agreement, the same shall be
done in accordance with GAAP, to the extent applicable, except where such
principles are inconsistent with the specific provisions of this
Agreement. For purposes of this Agreement, GAAP shall be determined on
the basis of such principles in effect on the date hereof and consistent
with those used in the preparation of the audited financial statements
referred to in paragraph (d) of Article III. In the event that any
Accounting Changes (as defined below) shall occur and such change results
in a change in the method of calculation of financial covenants, standards
or terms in this Agreement, then the Company and the Banks agree to enter
into negotiations in order to amend such provisions of this Agreement so
as to equitably reflect such Accounting Changes with the desired result
that the criteria for evaluating the financial condition of the Company
and its consolidated Subsidiaries shall be the same after such Accounting
Changes as if such Accounting Changes had not been made. Until such time
as such an amendment shall have been executed and delivered by the parties
thereto, all financial covenants, standards and terms in this Agreement
shall continue to be calculated or construed as if such Accounting Changes
had not occurred. "Accounting Changes" means: changes in accounting
principles required by the promulgation of any rule, regulation,
pronouncement or opinion by the Financial Accounting Standards Board or
the American Institute of Certified Public Accountants or, if applicable,
the Securities and Exchange Commission (or successors thereto or agencies
with similar functions).
SECTION 1.03. Directly or Indirectly. Where any provision in
this Agreement refers to action to be taken by any Person, or which such
Person is prohibited from taking, such provision shall be applicable
whether the action in question is taken directly or indirectly by such
Person.
II. THE LOANS
SECTION 2.01. Revolving Loans and Eurocurrency Loans.
(a) Upon the terms and subject to the conditions hereinafter
set forth and in reliance upon the representations and warranties
contained herein, each Bank, by its execution and delivery of this
Agreement, severally, and not jointly, agrees to make Revolving Loans
to the Company from time to time from the date hereof to the
Expiration Date, at such times and in such amounts as the Company
shall request, subject to the limitation that (i) the aggregate
outstanding principal Dollar Amount of Revolving Loans, Eurocurrency
Loans and Absolute Rate Loans to the Company and all Eligible
Subsidiaries does not exceed the Aggregate Commitment and (ii) the
aggregate outstanding principal amount of Revolving Loans made
pursuant to this Section 2.01(a) shall at no time exceed such Bank's
Revolving Loan Commitment (each such loan, individually a "Revolving
Loan" and collectively, the "Revolving Loans"). The aggregate
outstanding amount of Absolute Rate Loans shall reduce each Bank's
Revolving Loan Commitment ratably in the proportion such Bank's
Revolving Loan Commitment bears to the Aggregate Revolving Commitment
regardless of which Bank makes such Absolute Rate Loans. In
addition, each Bank may, in its sole discretion, make bids to make
Absolute Rate Loans pursuant to Section 2.05. Upon the terms and
subject to the conditions of this Agreement, the Company may elect to
make Borrowings of Revolving Loans at the Alternate Base Rate, the
Adjusted CD Rate or LIBOR. The Company shall give at least three (3)
Business Days' prior irrevocable written or telex notice to the Agent
of any requested Borrowing of LIBOR Loans under this Section 2.01(a)
and at least two (2) Business Days' prior irrevocable written or
telex notice to the Agent of any requested Borrowing of Adjusted CD
Rate Loans under this Section 2.01(a). An irrevocable written or
telex notice of any requested Borrowing of Alternate Base Rate Loans
may be made on the Borrowing Date for such requested Borrowing;
provided, however, that the Company shall use its best efforts to
give at least one (l) Business Day's prior irrevocable written or
telex notice of Alternate Base Rate Loans under this Section 2.01(a).
Each such notice and similar notice pursuant to Section 2.01(b) shall
herein be called a "Notice of Borrowing" and each Notice of Borrowing
shall specify the amount and Type of the proposed Borrowing, the
proposed Borrowing Date and, if such Notice of Borrowing requests
Fixed Rate Loans, the proposed Interest Period. Each Notice of
Borrowing, to be effective, must be received by the Agent not later
than 10:00 a.m., Chicago time, on the last Business Day on which
notice can be given of such Borrowing, as provided above. If no Type
of Borrowing is specified in such Notice of Borrowing, such Borrowing
shall be of Alternate Base Rate Loans, and if no Interest Period is
specified in a Notice of Borrowing requesting LIBOR Loans or Adjusted
CD Rate Loans, the Interest Period shall be one (1) month or thirty
(30) days, respectively.
(b) Upon the terms and subject to the conditions hereinafter
set forth and in reliance upon the representations and warranties
contained herein, each Bank, by its execution and delivery of this
Agreement, severally and not jointly, agrees to make Eurocurrency
Loans in one or more Alternative Currencies to the Company or any
Eligible Subsidiary pursuant to this Section 2.01(b) from time to
time from the date hereof to the Expiration Date in amounts such that
(i) the aggregate outstanding principal Dollar Amount of Eurocurrency
Loans, Revolving Loans and Absolute Rate Loans by such Bank to the
Company and all Eligible Subsidiaries does not exceed the Aggregate
Commitment and (ii) the aggregate outstanding principal Dollar Amount
of Eurocurrency Loans made pursuant to this Section 2.01(b) shall at
no time exceed such Bank's Eurocurrency Commitment (each such Loan,
individually a "Eurocurrency Loan" and collectively the "Eurocurrency
Loans"). Subject to the terms and conditions of this Agreement, the
Company or an Eligible Subsidiary may elect to make Borrowings of
Eurocurrency Loans in any Alternative Currency. The Company or such
Eligible Subsidiary shall give the Agent a Notice of Borrowing at
least three (3) Business Days' prior to the requested Borrowing of
Eurocurrency Loans under this Section 2.01(b). Each such Notice of
Borrowing shall specify the amount and Alternative Currency of such
Borrowing, the proposed Borrowing Date and the proposed Interest
Period. Each such Notice of Borrowing, to be effective, must be
received by the Agent not later than 10 a.m., Chicago time, on the
last Business Day on which such notice can be given. If no Interest
Period is specified in a Notice of Borrowing of Eurocurrency Loans,
the Interest Period shall be one (1) month.
(c) The Agent shall, on the same day a Notice of Borrowing is
received from the Company or any Eligible Subsidiary, notify each
Bank of the amount of its Applicable Percentage of such Borrowing,
the Borrowing Date, the Type of Borrowing, the Applicable Rate and,
if applicable, the Interest Period, Eligible Subsidiary and
Alternative Currency. On the Borrowing Date specified in such Notice
of Borrowing, each Bank shall make the amount of its Applicable
Percentage of the Borrowing available to the Agent at the Agent's
Domestic Office, no later than 12:00 noon, Chicago time, in
immediately available funds. On such date the Agent shall credit the
amounts so received, in immediately available funds, to the regular
deposit account maintained by the Company or applicable Eligible
Subsidiary with it, or shall transfer such amount to another account
designated by the Company in writing and acceptable to the Agent.
Each Borrowing of Fixed Rate Loans made by the Company or applicable
Eligible Subsidiary under this Section 2.01 shall be in an aggregate
principal amount of not less than $1,000,000 and in an integral
multiple of $500,000. There is no minimum amount for Alternate Base
Rate Loans. Until the Expiration Date, the Company may borrow, pay,
reborrow and repay hereunder in accordance with Section 2.01(a) and
the Company and the Eligible Subsidiaries may borrow, pay, reborrow
and repay hereunder in accordance with Section 2.01(b).
(d) The Agent shall be entitled to assume, unless it shall have
received notice from any Bank to the contrary, that each Bank will
make the amount of its Applicable Percentage of each Borrowing
available to the Agent on the date required, and the Agent may (but
shall not be obligated to) make a corresponding amount available to
the Company or Eligible Subsidiary, as the case may be. If such
amount is not in fact made available to the Agent by any Bank and the
Agent has made a corresponding amount available to the Company or
Eligible Subsidiary, as the case may be, the Agent shall be entitled
to recover such corresponding amount on demand from such Bank. If
such Bank does not pay such corresponding amount forthwith upon the
Agent's demand therefor, the Agent shall promptly notify the Company
or applicable Eligible Subsidiary and the Company or such Eligible
Subsidiary shall pay such corresponding amount to the Agent. The
Agent shall also be entitled to recover from such Bank or the Company
or such Eligible Subsidiary, as the case may be, interest on such
corresponding amount in respect of each day from the date such
corresponding amount was made available by the Agent to the Company
or Eligible Subsidiary to the date such corresponding amount is
recovered by the Agent, at a rate per annum equal, in the case of a
recovery from the Company or Eligible Subsidiary, to the rate payable
on such amount pursuant to this Agreement or, in the case of a
recovery from such Bank, at the "Federal Funds Effective Rate" (as
defined in the definition of Alternate Base Rate).
(e) Any Borrowing pursuant to Section 2.01(b) which is made in
an Alternative Currency shall be advanced in such Alternative
Currency and shall be repaid or prepaid in such Alternative Currency
in the amount borrowed. Interest payable on any Loan denominated in
an Alternative Currency shall be paid in such Alternative Currency.
Each Borrowing denominated in an Alternative Currency shall be deemed
a utilization of the Commitments in an amount equal to the Dollar
Amount thereof.
(f) Notwithstanding the satisfaction of all conditions referred
to in Section 2.01(b) with respect to any Eurocurrency Borrowing, if
there shall occur on or prior to the date of such Borrowing any
change in national or international financial, political or economic
conditions or currency exchange rates or exchange controls or in the
general availability in the London interbank market of deposits in
the Alternative Currency, and for the requested Interest Period,
which change would, in the opinion of the Agent, make it
impracticable for the Eurocurrency Loans comprising such Borrowing to
be denominated in the requested Alternative Currency, then the Agent
shall promptly give notice thereof to the Company, the applicable
Eligible Subsidiary and the Banks and such Loans shall not be
denominated in such Alternative Currency but shall be made on the
date of such Borrowing in Dollars as Alternate Base Rate Loans,
unless the applicable Eligible Subsidiary notifies the Agent at least
two Business Days prior to the proposed Borrowing Date that it elects
not to borrow.
(g) The Company may upon three (3) days' written notice to the
Agent, increase or decrease the respective amounts of the Aggregate
Revolving Commitment and the Aggregate Eurocurrency Commitment,
provided that the total amount thereof shall at no time exceed the
Aggregate Commitment and further provided, that at no time may the
Aggregate Revolving Commitment be reduced below the then outstanding
principal amount of the Revolving Loans and the Aggregate
Eurocurrency Commitment shall at no time be reduced below the
aggregate outstanding principal Dollar Amount of Eurocurrency Loans.
SECTION 2.02. (Intentionally omitted).
SECTION 2.03. (a) Revolving Loan Notes. The Revolving Loans
of each Bank to the Company shall be evidenced by a Revolving Loan Note
("Revolving Loan Note") substantially in the form attached hereto as
Exhibit "A", appropriately completed, duly executed and delivered on
behalf of the Company and payable to the order of each Bank, or by any
Revolving Loan Note or Revolving Loan Notes subsequently issued by the
Company in substitution therefor and replacement thereof. The date,
amount, Applicable Rate, and Interest Period of each Revolving Loan of
such Bank to the Company (including each Revolving Loan made to refinance
an existing Revolving Loan pursuant to Section 2.08 hereof ), and the date
and amount of each payment and prepayment of principal of any Revolving
Loan to such Bank by the Company, shall be recorded in such Bank's
internal records and, prior to any transfer of such Revolving Loan Note,
on a grid schedule which shall be annexed thereto, and the Company
authorizes each Bank to make such recordation; provided, however, that the
failure of any Bank to set forth such Revolving Loans, principal payments
or other information on such schedule shall not in any manner affect the
obligation of the Company to repay the Revolving Loans made by such Bank
to the Company in accordance with the terms of this Agreement and the
applicable Revolving Loan Note. Each Bank's Revolving Loan Note and other
records maintained by such Bank shall be prima facie evidence of the
Revolving Loans made by such Bank to the Company. The principal of each
Revolving Loan as evidenced by a Revolving Loan Note shall be payable
(subject to Section 2.08 hereof) on the earlier of (i) the last day of the
Interest Period of such Revolving Loan, or (ii) the date on which such
Revolving Loan is prepaid pursuant to Section 2.11 hereof, or (iii) the
Expiration Date. All accrued and unpaid interest on any Revolving Loan
shall, subject to the provisions hereof, be payable simultaneously with
the payment of the principal of such Revolving Loan; provided that, if any
such day is not a Business Day, such principal and interest shall be
payable on the next succeeding Business Day (unless, in the case of a
LIBOR Loan, the same would fall in a succeeding month, or, in the case of
any Revolving Loan, the same would fall after the Expiration Date, in
which case such principal and interest shall be payable on the immediately
preceding Business Day).
(b) Eurocurrency Notes. The Eurocurrency Loans of each Bank to the
Company and each Eligible Subsidiary shall be evidenced by a Eurocurrency
Note ("Eurocurrency Note") substantially in the form attached hereto as
Exhibit "B", appropriately completed, duly executed and delivered on
behalf of the Company and each Eligible Subsidiary and payable to the
order of each Bank or any Eurocurrency Note or Eurocurrency Notes
subsequently issued by the Company or such Eligible Subsidiary in
substitution therefor and replacement thereof. The date, amount,
applicable Alternative Currency, Applicable Rate, and Interest Period of
each Eurocurrency Loan of such Bank to the Company or such Eligible
Subsidiary (including each Eurocurrency Loan made to refinance an existing
Eurocurrency Loan pursuant to Section 2.08 hereof ), and the date and
amount of each payment and prepayment of principal of any Eurocurrency
Loan to such Bank by the Company or such Eligible Subsidiary, shall be
recorded in such Bank's internal records and, prior to any transfer of
such Eurocurrency Note, on a grid schedule which shall be annexed thereto,
and the Company and each Eligible Subsidiary authorizes each Bank to make
such recordation; provided, however, that the failure of any Bank to set
forth such Eurocurrency Loans, principal payments or other information on
such schedule shall not in any manner affect the obligation of the Company
and each Eligible Subsidiary to repay the Eurocurrency Loans made by such
Bank to the Company or such Eligible Subsidiary in accordance with the
terms of this Agreement and the applicable Eurocurrency Note. Each Bank's
Eurocurrency Note and other records maintained by such Bank shall be prima
facie evidence of the Eurocurrency Loans made by such Bank to the Company
or such Eligible Subsidiary. The principal of each Eurocurrency Loan as
evidenced by a Eurocurrency Note shall be payable (subject to Section 2.09
hereof) on the earlier of (i) the last day of the Interest Period of such
Eurocurrency Loan, or (ii) the date on which such Eurocurrency Loan is
prepaid pursuant to Section 2.11 hereof, or (iii) the Expiration Date.
All accrued and unpaid interest on any Eurocurrency Loan shall, subject to
the provisions hereof, be payable simultaneously with the payment of the
principal of such Eurocurrency Loan; provided that, if any such day is not
a Business Day, such principal and interest shall be payable on the next
succeeding Business Day unless the same would fall in a succeeding month
or the same would fall after the Expiration Date, in which case such
principal and interest shall be payable on the immediately preceding
Business Day.
SECTION 2.04. Absolute Rate Loans.
In addition to Revolving Loans pursuant to Section 2.01, but
subject to the terms and conditions set forth in this Agreement
(including, without limitation, the limitation set forth in Sections
2.01(a) and 2.01(b) as to the maximum aggregate principal amount of all
outstanding Loans hereunder), the Company may, as set forth in this
Section 2.04, request any one or more of the Banks, prior to the
Expiration Date, to make offers to make Absolute Rate Loans to the
Company. Each Bank may, but shall have no obligation to, make such offers
and the Company may, but shall have no obligation to, accept any such
offers in the manner set forth in this Section 2.04. Absolute Rate Loans
shall be evidenced by the Competitive Bid Notes. Each Absolute Rate Loan
shall be repaid in full by the Company on the last day of the Interest
Period applicable thereto.
(a) Competitive Bid Quote Request. When the Company wishes to
request offers to make Absolute Rate Loans under Section 2.04, the
Company shall transmit to any Bank selected by the Company by
telephone, telex or telecopy a Competitive Bid Quote Request,
specifying:
(i) the aggregate principal amount of such Absolute Rate Loan;
(ii) the Interest Period applicable thereto (which must end on
or prior to the Expiration Date); and
(iii) the proposed Borrowing Date, if other than the day of
the Competitive Bid Quote Request.
After giving effect to such Absolute Rate Loan, the then aggregate
outstanding principal amount of all Loans shall not exceed the Aggregate
Commitment then in effect and the aggregate outstanding principal amount
of all Revolving Loans and Absolute Rate Loans shall not exceed the
Aggregate Revolving Commitment.
(b) Submission and Contents of Competitive Bid Quotes.
(i) Each Bank may, in its sole discretion, submit a Competitive
Bid Quote containing an offer or offers to make Absolute Rate Loans
in response to any Competitive Bid Quote Request. Each Competitive
Bid Quote must comply with the requirements of this Section 2.04(b)
and must be submitted to the Company by telephone, telex or telecopy
at its offices specified in or pursuant to Article X. Subject to
Articles IV and VII, any Competitive Bid Quote so made shall be
irrevocable except with the written consent of the Company.
(ii) Each Competitive Bid Quote shall in any case specify:
(A) the proposed Borrowing Date, which shall be the same
as that set forth in the applicable Competitive Bid Quote
Request;
(B) the principal amount of the Absolute Rate Loan for
which each such offer is being made, (1) the principal amount of
which may be greater than, less than or equal to the Commitment
of the quoting Bank, but in no case greater than the Aggregate
Revolving Commitment and (2) which principal amount may not
exceed the principal amount of Absolute Rate Loans for which
offers were requested;
(C) the minimum amount of the Absolute Rate Loan which may
be accepted by the Company;
(D) the Absolute Rate offered for each such Absolute Rate
Loan;
(E) the applicable Interest Period;
(F) the identity of the quoting Bank;
(G) the time by which the Company must notify the quoting
Bank of its acceptance or rejection of such Competitive Bid
Quote; and
(H) whether the terms of an accepted offer must be
confirmed by the Company in writing.
(c) Acceptance and Notice by the Company. Not later than the
time specified for such notice in the Competitive Bid Quote, the
Company shall notify the participating Bank or Banks by telephone,
telex or telecopy of the Company's acceptance or rejection of the
offers so notified to it pursuant to Section 2.04.(b); provided,
however, that the failure of the Company to give such notice to such
Bank or Banks shall be deemed to be a rejection of all such offers.
In the case of acceptance, such notice (a "Competitive Bid Borrowing
Notice") shall specify the aggregate principal amount of offers for
each Interest Period that are accepted. The Company may accept or
reject any Competitive Bid Quote in whole or in part; provided that
the aggregate principal amount of each Absolute Rate Loan may not
exceed the applicable amount set forth in the related Competitive Bid
Quote Request. The Company shall confirm the terms of an accepted
offer to make an Absolute Rate Loan in writing to the quoting Bank if
required by the terms of the Competitive Bid Quote.
(d) Allocation by the Company. If offers are made by two or
more Banks with the same Absolute Rates for a greater aggregate
principal amount than the amount in respect of which offers are
permitted to be accepted for the related Interest Period, the
principal amount of Absolute Rate Loans in respect of which such
offers are accepted shall be allocated by the Company among such
Banks in its sole discretion; provided, however, that no Bank shall
be allocated a portion of any Absolute Rate Loan which is less than
the minimum amount which such Bank has indicated that it is willing
to accept. Allocations by the Company of the amounts of Absolute
Rate Loans shall be conclusive in the absence of manifest error.
(e) Notice to Agent. Each Bank making an Absolute Rate Loan
shall promptly, and not later than the close of business on the
Borrowing Date, notify the Agent of the amount and Interest Period of
each Absolute Rate Loan. If a Bank fails to so notify the Agent,
such Absolute Rate Loan shall not constitute an Absolute Rate Loan
under this Agreement.
SECTION 2.05. (Intentionally omitted).
SECTION 2.06. Interest on Loans.
(a) Each Alternate Base Rate Loan, and the principal balance of
each of the Company's and the Eligible Subsidiaries' other
obligations to the Banks arising under this Agreement (other than
Adjusted CD Rate Loans, Eurocurrency Loans, LIBOR Loans and Absolute
Rate Loans) shall bear interest until maturity (by acceleration or
otherwise) on its principal amount outstanding from time to time at a
rate per annum (computed on the basis of the actual number of days
elapsed and a year of 360 days, except in the case of Alternate Base
Rate Loans based on the Corporate Base Rate, which Alternate Base
Rate Loans shall be computed on the basis of the actual number of
days elapsed and a year of 365/366 days) equal to the Alternate Base
Rate in effect from time to time. Interest shall be payable on each
Alternate Base Rate Loan on the earliest of (i) each Interest Payment
Date applicable to such Loan, (ii) the date upon which such Alternate
Base Rate Loan is converted to a Fixed Rate Loan pursuant to the
terms hereof, (iii) any date on which such Loan is prepaid, or (iv)
the Expiration Date.
(b) The Adjusted CD Rate Margin, Eurocurrency Margin and LIBOR
Margin (each herein a "Margin") shall be subject to adjustment
(upwards or downwards, as appropriate) based on the applicable ratio
of the Company's Consolidated Funded Debt to Consolidated Total
Capitalization ("Debt/Cap Ratio") as at the end of any fiscal
quarter, as set forth in the chart below. The Debt/Cap Ratio shall
be determined from the then most recent quarterly or annual financial
statements delivered by the Company pursuant to Section 5.01. The
adjustment, if any, to the applicable Margins shall be effective on
the fifth Business Day after the delivery of such financial
statements. If the Company shall at any time fail to timely furnish
to the Banks the financial statements required to be delivered
pursuant to Section 5.01, the maximum applicable Margin shall apply
until delivery of the financial statements. Notwithstanding the
foregoing, if at the end of any fiscal quarter, the ratio of Net
Income Available for Fixed Charges to Fixed Charges is less than 1.5
to 1.0, the maximum Margins shall apply until the financial
statements delivered at the end of any fiscal quarter evidence a
ratio equal to or greater than 1.5 to 1.0.
Ratio of Consolidated LIBOR Eurocurrency Adjusted
Funded Debt to Total Margin Margin CD Rate
Capitalization Margin
Less than .40 to 1.00 37.5 b.p. 37.5 b.p. 50.0 b.p.
Equal to or greater
than .40 to 1.00 45 b.p. 45 b.p. 57.5 b.p.
Each of the above-described Margins shall be increased by 5 basis
points for each day on which the aggregate outstanding principal
Dollar amount of Revolving Loans, Eurocurrency Loans and Absolute
Rate Loans to the Company and all Eligible Subsidiaries exceeds 50%
of the Aggregate Commitment.
(c) Each Adjusted CD Rate Loan shall bear interest (computed on
the basis of the actual number of days elapsed and a year of 360
days) until maturity (by acceleration or otherwise) at the Adjusted
CD Rate for the Interest Period in effect for such Loan. Interest
shall be payable on each Adjusted CD Rate Loan on the earlier of (i)
each Interest Payment Date applicable to such Loan, (ii) any date on
which such Loan is prepaid, or (iii) the Expiration Date. The Agent
shall determine the Adjusted CD Rate for each Interest Period at
10:00 a.m., Chicago time, on the first day of such Interest Period,
or as soon as practicable thereafter, and shall notify (by telephone,
confirmed promptly thereafter in writing) the Company and the Banks
of the Adjusted CD Rate so determined on the date of such
determination. Such determination shall be conclusive absent
manifest error.
(d) Each LIBOR Loan shall bear interest (computed on the basis
of the actual number of days elapsed and a year of 360 days) until
maturity (by acceleration or otherwise) at LIBOR for the Interest
Period in effect for such Loan. Interest shall be payable on each
LIBOR Loan on the earlier of (i) each Interest Payment Date
applicable to such Loan, (ii) any date on which such Loan is prepaid,
or (iii) the Expiration Date. The Agent shall determine LIBOR for
each Interest Period at 10:00 am., Chicago time, two (2) Business
Days prior to the commencement of such Interest Period, or as soon as
practicable thereafter, and shall notify (by telephone, confirmed
promptly thereafter in writing) the Company and the Banks of LIBOR so
determined on the date of such determination. Such determination
shall be conclusive absent manifest error.
(e) Each Eurocurrency Loan shall bear interest (computed on the
basis of the actual number of days elapsed and a year of 360 days)
until maturity (by acceleration or otherwise) at the Eurocurrency
Rate for the Interest Period in effect for such Loan. Interest shall
be payable on each Eurocurrency Loan on the earlier of (i) each
Interest Payment Date applicable to such Loan, (ii) any date on which
such Loan is prepaid and (iii) the Expiration Date. The Agent shall
determine the Eurocurrency Rate for each Interest Period at 10 a.m.
Chicago time, two (2) Business Days prior to the commencement of such
Interest Period, or as soon as practicable thereafter, and shall
notify (by telephone, confirmed promptly thereafter in writing) the
Company, the applicable Eligible Subsidiary and the Banks of the
Eurocurrency Rate so determined on the date of such determination.
Such determination shall be conclusive absent manifest error.
SECTION 2.07. Default Interest; Alternate Rate of Interest.
(a) If the Company or any Eligible Subsidiary shall default in
the payment of the principal of or interest on any Loan or any other
amount becoming due hereunder, the Company or such Eligible
Subsidiary shall, to the extent permitted by law, pay interest on
such defaulted amount (after as well as before judgment) on demand,
from the date such defaulted amount was due until the date of actual
payment at a rate per annum equal to the Alternate Base Rate plus two
percent (2%) per annum.
(b) In the event, and on each occasion, that on or before the
day two (2) Business Days prior to the commencement of any Interest
Period for a LIBOR Loan or Eurocurrency Loan, any Bank shall have
determined (which determination shall be conclusive, absent manifest
error, and binding upon the Company and the Eligible Subsidiaries)
that Dollar deposits or deposits in the applicable Alternative
Currency in the amount of the principal amount of such LIBOR Loan or
Eurocurrency Loan are not generally available in the London interbank
market, or the Majority Banks shall have determined (which
determination shall be conclusive, absent manifest error, and binding
upon the Company and the Eligible Subsidiaries) that the rate at
which such Dollar or Alternative Currency deposits are being offered
will not adequately and fairly reflect the cost to the Banks of
making or maintaining the principal amount of such LIBOR Loan or
Eurocurrency Loan during such Interest Period, or that means do not
exist for ascertaining LIBOR or the applicable Eurocurrency Rate, the
Agent shall, as soon as practicable thereafter, give written or telex
notice, or telephonic notice confirmed promptly in writing, of such
determination to the Company and, if applicable, the Eligible
Subsidiary, and the Banks, and the applicable request by the Company
or Eligible Subsidiary, as the case may be, for the making of a LIBOR
Loan or Eurocurrency Loan shall, unless the Company or the applicable
Eligible Subsidiary shall have given the Agent prior irrevocable
written or telex notice that such request has been withdrawn, which
notice has been received by the Agent not later than 10:00 a.m.,
Chicago time on the Borrowing Date for such requested Borrowing, be
deemed to be a request for an Alternate Base Rate Loan (in Dollars)
in the case of the Company and, in the case of an Eligible
Subsidiary, such request shall be deemed to have been withdrawn.
After such notice from the Agent shall have been given and until the
circumstances giving rise to such notice no longer exist, the rights
of the Company or the Eligible Subsidiary to select LIBOR Loans or
Eurocurrency Loans in the affected Alternative Currency shall be
suspended.
(c) In the event, and on each occasion, that on or before the
day on which the Adjusted CD Rate for an Adjusted CD Rate Loan is to
be determined, the Majority Banks shall have determined (which
determination shall be conclusive, absent manifest error, and binding
upon the Company) that the Adjusted CD Rate for such Loan cannot be
ascertained for any reason (including, without limitation, the
inability of the Agent to obtain sufficient bids in accordance with
the terms of the definition of the Adjusted CD Rate) or that the
Adjusted CD Rate for such Adjusted CD Rate Loan will not adequately
and fairly reflect the cost to the Banks of making or maintaining the
principal amount of such Loan during the applicable Interest Period,
the Agent shall, as soon as practicable thereafter, give written or
telex notice, or telephonic notice confirmed promptly in writing, of
such determination to the Company and the Banks, and the applicable
request by the Company for the making of an Adjusted CD Rate Loan
shall, unless the Company shall have given the Agent prior
irrevocable written or telex notice that such request has been
withdrawn, which notice has been received by the Agent not later than
10:00 am., Chicago time on the Borrowing Date for such requested
Borrowing, be deemed to be a request for an Alternate Base Rate Loan.
After such notice from the Agent shall have been given and until the
circumstances giving rise to such notice no longer exist, the right
of the Company to select Adjusted CD Rate Loans shall be suspended.
SECTION 2.08. Refinancing of Revolving Loans. The Company
shall have the right prior to the Expiration Date, subject to the
provisions of Sections 2.07 and 4.01 hereof and this Section 2.08, (i) on
at least three (3) Business Days' prior irrevocable written or telex
notice (or telephonic notice confirmed promptly thereafter in writing) to
the Agent, to refinance any Borrowing (or portion thereof) of Revolving
Loans with a successive Borrowing of LIBOR Loans, (ii) on at least two (2)
Business Days' prior irrevocable written or telex notice (or telephonic
notice confirmed promptly thereafter in writing) to the Agent, to
refinance any Borrowing (or portion thereof) of Revolving Loans with a
successive Borrowing of Adjusted CD Rate Loans or (iii) on prior
irrevocable written or telex notice (or telephonic notice confirmed
promptly thereafter in writing) to the Agent, to refinance any Borrowing
(or portion thereof) of Revolving Loans with a successive Borrowing of
Alternate Base Rate Loans which notice may be given on the date of such
Borrowing; provided, however, that the Company shall use its best efforts
to give at least one (l) Business Day's prior irrevocable written or telex
notice to the Agent of any such Borrowing of Alternate Base Rate Loans
(each of the above-described notices and the similar notices described in
Section 2.09 being a "Notice of Refinancing"), in each case subject to the
following further conditions:
(a) (1) each refinancing of a Borrowing of Revolving Loans (or
portion thereof) shall be made pro rata among the Banks in accordance
with their Applicable Percentages, (2) the aggregate outstanding
principal amount of all such refinanced Borrowings (or portion
thereof) shall be equal to $1,000,000 or a larger integral multiple
of $500,000 (except there is no minimum amount for Alternate Base
Rate Loans), and (3) the notice given to the Agent by the Company in
connection with the refinancing of any Borrowing shall specify the
amount of such Borrowing to be refinanced;
(b) A Borrowing (or portion thereof) of Fixed Rate Loans may be
refinanced only on the last day of the applicable Interest Period;
(c) Each Notice of Refinancing requesting a Borrowing of LIBOR
Loans or Adjusted CD Rate Loans which shall fail to state an
applicable Interest Period shall be deemed to be a request for an
Interest Period of a one (1) month or thirty (30) day duration,
respectively;
(d) Each refinancing shall be effected by each Bank applying
the proceeds of its Loans made pursuant to the new Borrowing to its
Loans made pursuant to the Borrowing (or portion thereof) being
refinanced; accrued interest on each Loan made pursuant to the
Borrowing (or portion thereof) being refinanced shall be paid by the
Company at the time of refinancing;
(e) The Interest Period with respect to any new Loans made as
part of a refinancing of a Borrowing (or portion thereof) shall
commence on the date of refinancing;
(f) No Borrowing (or portion thereof) of Revolving Loans shall
be refinanced to the extent that the aggregate amount of the
Revolving Loans outstanding after such refinancing would exceed the
limitations set forth in Section 2.01 hereof; and
(g) If the Company fails to deliver a Notice of Refinancing
with respect to a Loan (other than a Eurocurrency Loan) within the
applicable time limits, such Loan shall, provided the conditions set
forth in Section 4.01 (other than delivery of a Notice of
Refinancing) have been met, be automatically refinanced as an
Alternate Base Rate Loan.
Each Notice of Refinancing, to be effective, must be received by
the Agent no later than 10:00 a.m., Chicago time, on the last Business Day
on which notice can be given of such refinancing under the first sentence
of this Section 2.08. The Agent shall communicate the information
contained in each Notice of Refinancing of Revolving Loans delivered by
the Company pursuant to this Section 2.08 to the other Banks promptly
after its receipt of the same.
The Type of Borrowing to be made in connection with any
refinancing of a Borrowing (or portion thereof), and the Interest Period
applicable to any new Borrowing of Fixed Rate Loans made in connection
with a refinancing of a Borrowing (or portion thereof) shall be specified
by the Company in the Notice of Refinancing delivered pursuant to this
Section; provided, however, that if no Type of Borrowing is specified in
the Notice of Refinancing, the new Borrowing shall be of Alternate Base
Rate Loans.
SECTION 2.09. Refinancing of Eurocurrency Loans. The Company
or the applicable Eligible Subsidiary shall have the right prior to the
Expiration Date, subject to the provisions of Sections 2.07 and 4.01
hereof and this Section 2.09, (i) on at least four (4) Business Days'
prior irrevocable written or telex notice (or telephonic notice confirmed
promptly thereafter in writing) to the Agent, to refinance any Borrowing
(or portion thereof) of Eurocurrency Loans with a successive Borrowing of
Eurocurrency Loans, subject to the following further conditions:
(a) (i) each refinancing of a Borrowing of Eurocurrency Loans
(or portion thereof) shall be made by the Company or the same
Eligible Subsidiary pro rata among the Banks in accordance with their
Applicable Percentages, (ii) the aggregate outstanding principal
amount of all such refinanced Borrowings (or portion thereof) shall
be equal to $1,000,000 or a larger integral multiple of $500,000, and
(iii) the notice given to the Agent by the Company or the applicable
Eligible Subsidiary in connection with the refinancing of any
Borrowing shall specify the amount of such Borrowing to be
refinanced;
(b) A Borrowing (or portion thereof) of Eurocurrency Loans may
be refinanced only on the last day of the applicable Interest Period;
(c) Each Notice of Refinancing requesting a Borrowing of
Eurocurrency Loans which shall fail to state an applicable Interest
Period shall be deemed to be a request for an Interest Period of a
one (1) month;
(d) Each refinancing shall be effected by each Bank applying
the proceeds of its Loans made pursuant to the new Borrowing to its
Loans made pursuant to the Borrowing (or portion thereof) being
refinanced; accrued interest on each Loan made pursuant to the
Borrowing (or portion thereof) being refinanced shall be paid by the
Company or the applicable Eligible Subsidiary at the time of
refinancing;
(e) The Interest Period with respect to any new Loans made as
part of a refinancing of a Borrowing (or portion thereof) shall
commence on the date of refinancing; and
(f) No Borrowing (or portion thereof) of Eurocurrency Loans
shall be refinanced to the extent the aggregate Dollar Amount of the
Eurocurrency Loans outstanding after such refinancing would exceed
the limitations set forth in Section 2.01 hereof.
Each Notice of Refinancing, to be effective, must be received by
the Agent no later than 10:00 a.m., Chicago time, on the last Business Day
on which notice can be given of such refinancing under the first sentence
of this Section 2.09. The Agent shall communicate the information
contained in each Notice of Refinancing of Eurocurrency Loans delivered by
the Company or an Eligible Subsidiary pursuant to this Section 2.09 to the
other Banks promptly after its receipt of the same.
SECTION 2.10. (Intentionally omitted)
SECTION 2.11. Voluntary and Mandatory Prepayment of Loans;
Indemnification.
(a) The Company and each Eligible Subsidiary shall have the
right (i) at any time and from time to time to prepay on any Business
Day any Borrowing of Alternate Base Rate Loans, in whole or in part,
without premium or penalty, and (ii) at any time and from time to
time to prepay any Borrowing consisting of Fixed Rate Loans (except
Absolute Rate Loans), in whole or in part, without premium or
penalty, except as set forth in Section 2.11(d) hereof, in each case
upon at least five (5) Business Days' prior written or telex notice,
or telephonic notice confirmed promptly thereafter in writing, to the
Agent; provided, however, that any partial prepayment shall be in the
minimum principal amount of $1,000,000 and in an integral multiple of
$500,000. Absolute Rate Loans may only be prepaid upon payment of
any amount due pursuant to Section 2.11(d) and with the consent of
the applicable Bank. Each notice of prepayment of a Borrowing (or
portion thereof) shall specify the prepayment date and the aggregate
principal amount of Loans to be prepaid, shall be irrevocable and
shall commit the Company or the applicable Eligible Subsidiary to
prepay such Loans on the date stated therein. All prepayments shall
be accompanied by accrued interest on the principal amount being
prepaid to the date of prepayment. The Agent shall, promptly after
receiving notice from the Company or an Eligible Subsidiary
hereunder, notify each Bank of the prepayment date and the Loans made
by such Bank which are to be prepaid in whole or in part.
(b) On each Borrowing Date and date of a Refinancing of Loans
on which the aggregate amount of the Revolving Loans outstanding
exceeds the Aggregate Revolving Commitment then in effect, the
Company shall be required to prepay to the Agent, for distribution to
the Banks, the amount of such excess, together with accrued interest
on the principal amount being prepaid to the date of prepayment and
any indemnification in accordance with Section 2.11(d) hereof.
Mandatory prepayments required by this subsection (b) shall be
applied first to Borrowings of Alternate Base Rate Loans, if
applicable, and then to Borrowings of Fixed Rate Loans.
(c) On each Borrowing Date, on the date of a Refinancing of
Loans and on the last Business Day of each March, June, September and
December on which the aggregate Dollar Amount of the Eurocurrency
Loans outstanding exceeds the Aggregate Eurocurrency Commitment then
in effect, the Company or the Eligible Subsidiaries shall be required
to prepay to the Agent, for distribution to the Banks, the amount of
such excess, together with accrued interest on the principal amount
being prepaid to the date of prepayment and any indemnification in
accordance with Section 2.11(d) hereof. Unless otherwise directed in
writing by the Company or the applicable Eligible Subsidiary (each
only with respect to its own payments), mandatory prepayments
required by this Section 2.11(c) shall be applied to the oldest then
outstanding Eurocurrency Loans to the Company or such Eligible
Subsidiary.
(d) The Company and the Eligible Subsidiaries shall indemnify
each Bank against any loss or expense which such Bank may sustain or
incur as a consequence of any failure by the Company or an Eligible
Subsidiary to fulfill on the date of any Borrowing hereunder the
applicable conditions set forth in Article IV, any failure by the
Company or an Eligible Subsidiary to borrow hereunder or to
refinance, convert or renew any Loan hereunder after irrevocable
notice of borrowing pursuant to Section 2.01 or irrevocable notice of
refinancing pursuant to Section 2.08 or 2.09 has been given, any
payment, prepayment or conversion of a Fixed Rate Loan by the Company
or an Eligible Subsidiary required or permitted by any other
provision of this Agreement or otherwise made on a date other than
the last day of the applicable Interest Period, any default in
payment or prepayment of the principal amount of any Loan by the
Company or an Eligible Subsidiary or any part thereof or interest
accrued thereon, as and when due and payable (at the due date
thereof, by irrevocable notice of prepayment or otherwise), or the
occurrence of any Event of Default, including, but not limited to,
any loss or expense sustained or incurred or to be sustained or
incurred in liquidating or employing deposits from third parties
acquired to effect or maintain such Loan or any part thereof as a
Fixed Rate Loan. Such loss or expense shall include, without
limitation, an amount equal to the excess, if any, as determined by
each Bank of (i) its cost of obtaining the funds for the Loan being
paid, prepaid or converted or not borrowed, refinanced, converted or
renewed (based on the Adjusted CD Rate, Eurocurrency Rate or LIBOR
applicable thereto) for the period from the date of such payment,
prepayment or conversion or failure to borrow, refinance, convert or
renew to the last day of the Interest Period for such Loan (or, in
the case of a failure to borrow, refinance, convert or renew, the
Interest Period for such Loan which would have commenced on the date
of such failure to borrow, refinance, convert or renew) over (ii) the
amount of interest (as determined by such Bank) that would be
realized by such Bank in reemploying the funds so paid, prepaid or
converted or not borrowed, refinanced, converted or renewed by making
a Loan of the same type in such principal amount and with a maturity
comparable to such period. Each Bank shall deliver a certificate to
the Company or the applicable Eligible Subsidiary after any such loss
or expense is sustained or incurred setting forth the amount
necessary to indemnify such Bank therefor, and setting forth in
reasonable detail the basis for, and calculations of, such amount,
which certificate shall be prima facie evidence of the facts set
forth in such certificate, and the Company or the applicable Eligible
Subsidiary shall pay to such Bank, within ten (10) days after
delivery of such certificate, the amount shown as due in such
certificate.
SECTION 2.12. Pro Rata Treatment; Funds; Manner of Payment and
Prepayment; Net Payments.
(a) Each Borrowing under Section 2.01, each refinancing of a
Borrowing of a Revolving Loan (or portion thereof) or of a
Eurocurrency Loan (or portion thereof) under Sections 2.08 and 2.09,
each payment or prepayment of principal of and interest on the Notes
and each payment of the fees specified in Section 2.15 hereof, shall
be made or applied among the Banks pro rata in accordance with each
Bank's Applicable Percentage (except as otherwise provided in Section
2.13). Each Bank agrees to share with the other Banks any payment
(including, without limitation, pursuant to Section 10.02 hereof) or
prepayment of its Notes hereunder so as to ensure such pro rata
treatment. Unless otherwise specified herein, each Loan, each
payment or prepayment of principal of and interest on the Notes and
each payment of the Commitment Fee and any other fees set forth in
Section 2.15 shall be made by the Company (or applicable Eligible
Subsidiary) in immediately available funds to the Agent not later
than 12:00 noon, Chicago time, on the date on which such amount is
due and payable. Each payment or prepayment of principal, interest
or any other amount due with respect to an Absolute Rate Loan shall
be made by the Company in immediately available funds to the
applicable Bank (or, if a Default or Event of Default shall have
occurred and be continuing, to the Agent for the account of the
applicable Bank) on the date on which such amount is due and payable.
(b) All sums payable by the Company and the Eligible
Subsidiaries 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
on the Banks or any Eurodollar Office other than in respect of taxes
on the overall net income of such Bank or Eurodollar Office imposed
by the jurisdiction under the laws of which such Bank or Eurodollar
Office is organized or located (collectively, "Taxes"), which amounts
shall be paid by the Company and the Eligible Subsidiaries as
provided in subsection (c) below. The Company and the Eligible
Subsidiaries will pay each Bank the amounts necessary such that the
net amount of the principal, interest, fees or other sums received
and retained by each Bank is not less than the amount payable under
this Agreement.
(c) If: (a) the Company or an Eligible Subsidiary or any other
Person is required by law to make any deduction or withholding on
account of any such tax or other amount from any sum paid or
expressed to be payable by the Company or an Eligible Subsidiary to
any Bank under this Agreement; or (b) any party to this Agreement (or
any Person on its behalf) other than the Company or an Eligible
Subsidiary is required by law to make any deduction or withholding
from, or (other than on account of tax on the overall net income of
that party) any payment on or calculated by reference to the amount
of, any such sum received or receivable by any Bank under this
Agreement:
(i) the Company or such Eligible Subsidiary shall notify the
Agent, of any such requirement or any change in any such requirement
as soon as the Company or such Eligible Subsidiary becomes aware of
it;
(ii) the Company or such Eligible Subsidiary shall pay any such
tax or other amount before the date on which penalties attached
thereto become due and payable, such payment to be made (if the
liability to pay is imposed on the Company or such Eligible
Subsidiary) 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;
(iii) the sum payable by the Company or such Eligible
Subsidiary 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; and
(iv) within thirty (30) days after payment of any sum from which
the Company or such Eligible Subsidiary is required by law to make
any deduction or withholding, and within thirty (30) days after the
due date of payment of any tax or other amount which it is required
by paragraph (ii) to pay, it shall deliver to the Agent all such
certified documents and other evidence as to the making of such
deduction, withholding or payment as (a) are satisfactory to other
affected parties as proof of such deduction, withholding or payment
and of the remittance thereof to the relevant taxing or other
authority and (b) are required by any such party to enable it to
claim a tax credit with respect to such deduction, withholding or
payment.
(d) A certificate as to any additional amounts payable to any
Bank under this Section 2.12 shall set forth in reasonable detail the
basis for, and calculations of, such additional amounts and be
submitted to the Company and any applicable Eligible Subsidiaries
(with a copy to the Agent) by the applicable Bank promptly upon its
learning thereof and shall be prima facie evidence of the facts set
forth in such certificate.
(e) All payments provided for in this Section 2.12 shall be
made under all circumstances, irrespective of any bilateral or
multilateral payment or clearing agreement that may be in force and
of any restrictions then existing in any jurisdiction and without
regard to the nationality, residence or domicile of any Bank and
without requiring any affidavit or the fulfillment of any other
formality. The obligations of the Company and the Eligible
Subsidiaries under this Section 2.12 shall survive the termination of
this Agreement.
(f) In the event that material new Taxes become applicable to
payments to any Bank after the date hereof, such Bank shall cooperate
with the Company and the Eligible Subsidiaries to minimize such
Taxes, provided, however, that nothing in this Section 2.12(f) shall
obligate any Bank to take any action which such Bank, in its sole
discretion, determines to be prejudicial to its rights and interests
hereunder.
SECTION 2.13. Other Events.
(a) In the event that any introduction of or change in any
applicable law, rule, regulation, condition, directive,
administration or interpretation thereof, including any request,
guideline or policy (whether or not having the force of law and
including, without limitation, Regulation D promulgated by the Board)
as now and from time to time hereafter in effect, (but without
duplicating the effect of any such change already specifically
included in the calculation of the interest rates applicable to the
Loans), by any authority charged with the administration or
interpretation thereof:
(i) subjects any Bank to any tax, duty or other charge or
assessment with respect to its Loans or Notes, or any portion
thereof (other than any tax on the overall net income of such
Bank imposed by the United States of America or by any other
jurisdiction in which such Bank is qualified to do business or
is doing business or any political subdivision or taxing
authority therein); or
(ii) changes the basis of taxation of payments to any Bank of
principal of or interest on its Revolving Loans, its
Eurocurrency Loans or its Absolute Rate Loans, or any commitment
hereunder, or any portion thereof, or in respect of any other
amounts due under this Agreement (other than any tax measured by
or based upon the overall net income of such Bank imposed by the
United States of America or by any other jurisdiction in which
such Bank is qualified to do business or is doing business or
any political subdivision or taxing authority therein); or
(iii) imposes, modifies or deems applicable any reserve or
deposit requirements against any assets held by, deposits with
or for the account of, or loans or commitments by, an office of
any Bank in connection with obligations of any Bank hereunder;
or
(iv) imposes upon any Bank or any interbank market any other
condition with respect to any amount paid or payable to or by
any Bank pursuant to this Agreement; and the result of any of
the foregoing is to increase the cost to any Bank, in its
reasonable determination and in accordance with its customary
lending practices with respect to loan arrangements of a similar
type as that contemplated by this Agreement (as such practices
are modified from time to time by such Bank, in its sole
discretion), of maintaining its Loan or Loans or maintaining its
commitments with respect thereto or to reduce the amount of any
payment receivable by any Bank with respect thereto or to
require any Bank to make any payment on or calculated by
reference to the gross amount of any sum received by it with
respect thereto, in each case by an amount which such Bank in
its reasonable judgment deems material, then:
(A) such Bank shall promptly notify the Company and any
affected Eligible Subsidiary and the Agent in writing of the
happening of such event;
(B) such Bank shall promptly deliver to the Company and
any affected Eligible Subsidiary a certificate stating the
amount of such increased cost (without duplication), reduction
or payment; and
(C) the Company or the affected Eligible Subsidiary shall
pay to such Bank, within ten (10) days after delivery of the
certificate referred to in clause (B) above, such an amount or
amounts as will compensate such Bank for such additional cost,
reduction or payment; provided, however, that the Company shall
not be required to pay any additional amounts pursuant to this
Section 2.13 for any such increased cost or reduction incurred
more than 90 days prior to such Bank's demand for payment unless
such increased cost or reduction is incurred pursuant to any
introduction or change in any law, rule, regulation, condition,
directive, administration or interpretation thereof that has
retroactive effect, and then only to the extent of such effect.
(b) No failure on the part of any Bank to demand compensation
under subsection (a) above on any one occasion shall constitute a
waiver of its right to demand such compensation on any other
occasion. The protection of this Section 2.13 shall be available to
each Bank regardless of any possible contention of the invalidity or
inapplicability of any law, regulation or other condition which shall
give rise to any demand by such Bank for compensation hereunder.
Nothing in this Section 2.13(b) shall be construed to give the
Company or the Eligible Subsidiaries the right to compel any Bank to
contest the validity or applicability of any such law, regulation or
other condition. For purposes of this Section 2.13, LIBOR Loans or
Eurocurrency Loans shall be deemed to constitute Eurocurrency
Liabilities and as such shall be deemed to be subject to any reserve
requirements without benefit of or credit for proration, exceptions
or offsets which may be available from time to time to any Bank under
such Regulation D.
(c) In the event that any introduction of or change in any
applicable law, rule, regulation, condition, request, directive,
administration or interpretation thereof, including any request,
guideline or policy (whether or not having the force of law) relating
to capital adequacy by any authority charged with administration or
interpretation thereof has or would have the effect, in a Bank's
reasonable determination and in accordance with its customary lending
practices with respect to loan arrangements of a similar type as that
contemplated by this Agreement (as such practices are modified from
time to time by such Bank, in its sole discretion), of reducing the
rate of return on such Bank's capital as a consequence of its Loans,
or any portion thereof, to a level below that which such Bank could
have achieved but for such introduction or change (taking into
consideration such Bank's policies with respect to capital adequacy),
then:
(A) such Bank shall promptly notify the Company and the
Agent in writing of the happening of such event;
(B) such Bank shall promptly deliver to the Company a
certificate stating the amount of such reduction; and
(C) the Company shall pay to such Bank, within ten (10)
days after delivery of the certificate referred to in clause (B)
above, such an amount or amounts as will compensate such Bank
for such reduction; provided, however, that the Company shall
not be required to pay any additional amounts pursuant to this
Section 2.13 for any such increased cost or reduction incurred
more than 90 days prior to such Bank's demand for payment unless
such increased cost or reduction is incurred pursuant to any
introduction or change in any law, rule, regulation, condition,
directive, administration or interpretation thereof that has
retroactive effect, and then only to the extent of such effect.
(d) The Company further agrees to pay each Bank, upon
presentation of the certificate described in clause (e) below, so
long as such Bank shall be required to maintain reserves with respect
to liabilities or assets consisting of or including Eurocurrency
Liabilities (as defined in Regulation D) and without duplication of
any other amounts due under this Section 2.13, additional interest on
the principal amount of each Eurocurrency or LIBOR Loan of said Bank
from the date of such Loan until the principal amount is paid in
full, payable on the same date interest is payable on LIBOR Loans, at
a rate per annum equal at all times during the applicable Interest
Period to (x) the rate obtained by dividing LIBOR for such Interest
Period by a percentage equal to 100% minus the reserve percentage
applicable to Eurocurrency Liabilities under Regulation D (or if more
than one such percentage is so applicable, minus the daily average
for such percentage for those days in such Interest Period during
which any such percentage shall be so applicable) for such Bank minus
(y) LIBOR for such Interest Period.
(e) A certificate of any Bank claiming compensation under this
Section 2.13 setting forth the additional amount or amounts to be
paid to it hereunder shall set forth in reasonable detail the basis
for, and calculations of, such amount or amounts, and shall be prima
facie evidence of the facts set forth therein if such amount or
amounts are calculated reasonably and in good faith. In determining
such amount or amounts, such Bank shall use reasonable averaging and
attribution methods. Each Bank agrees to cooperate with the Company
to minimize any amount payable pursuant to this Section 2.13;
provided, however, that nothing in this Section 2.13 shall obligate
any Bank to take any action which such Bank, in its sole discretion,
determines to be prejudicial to its rights and interests hereunder.
SECTION 2.14. Change in Legality.
(a) Notwithstanding anything to the contrary contained
elsewhere in this Agreement, if any change in law or regulation or in
the interpretation thereof by any Governmental Authority charged with
the administration thereof shall make it unlawful for such Bank to
make or maintain any LIBOR Loan or Eurocurrency Loan or to give
effect to its obligations as contemplated hereby with respect to any
LIBOR Loan or Eurocurrency Loan, then, by written notice to the
Company, any affected Eligible Subsidiary and the Agent by such Bank,
such Bank may:
(i) declare that LIBOR Loans or Eurocurrency Loans, as the case
may be, will not thereafter be made by such Bank hereunder,
whereupon the Company and the Eligible Subsidiaries shall be
prohibited from requesting LIBOR Loan or Eurocurrency Loans from
such Bank hereunder; and
(ii) require that all outstanding LIBOR Loans or Eurocurrency
Loans made by it be forthwith converted into Alternate Base Rate
Loans, in which case the Company or the affected Eligible
Subsidiary shall pay to such Bank on the date of such conversion
all interest accrued on such LIBOR Loan or Eurocurrency Loan to
such date and the amounts payable pursuant to Section 2.11(d)
hereof.
(b) For purposes of this Section 2.14, a notice to the Company
or an Eligible Subsidiary by any Bank pursuant to paragraph (a) above
shall be effective on the date of receipt by the Company or an
Eligible Subsidiary.
(c) Each Bank agrees to designate a different office of such
Bank as its lending office for LIBOR Loan or Eurocurrency Loans or
take other appropriate action if such designation or action will
effect compliance with the law or regulation or interpretation
thereof invoking the provisions of this Section 2.14; provided that
such designation or action need not be made or taken if, in the
opinion of such Bank, it would result in any material additional
costs, expenses or risks to such Bank that are not reimbursed by the
Company or an Eligible Subsidiary pursuant hereto or be deemed by
such Bank, in its sole discretion, to in any other material respect
be prejudicial to such Bank.
(d) If any Bank gives notice pursuant to subsection (a) of this
Section 2.14 of its inability to make LIBOR Loans or Eurocurrency
Loans, then no portion of any LIBOR Loans or Eurocurrency Loans
thereafter requested by the Company shall be allocated to such Bank,
and such Bank shall purchase participations in the Alternate Base
Rate Loans and/or Adjusted CD Rate Loans made by the other Banks
hereunder, or if no such Loans are outstanding, shall make an
Alternate Base Rate Loan with the same interest period as such LIBOR
Loan or Eurocurrency Loan, in an amount sufficient to cause each
Bank, at all times, to have Loans outstanding in an amount equal to
the product of such Bank's Applicable Percentage and the aggregate
principal amount of all Loans outstanding hereunder.
SECTION 2.15. Fees, Reduction of Commitment.
(a) The Company agrees to pay to the Agent for distribution to
the Banks a commitment fee (the "Commitment Fee") on the average
daily unused portion of the Aggregate Revolving Commitment and the
Aggregate Eurocurrency Commitment, at the rate set forth in the chart
below. For purposes of this Section 2.15, Absolute Rate Loans shall
not be deemed usage of the Commitment of each Bank. The Commitment
Fee shall be computed on the basis of the actual number of days
elapsed and a year of 365/366 days, shall accrue from the Effective
Date and shall be payable quarterly, in arrears, on each March 31,
June 30, September 30 and December 31, thereafter, commencing
December 31, 1995, and on the Expiration Date.
(b) Commitment Fee. The Commitment Fee shall be subject to
adjustment (upwards or downwards, as appropriate) based on the
applicable Debt/Cap Ratio as at the end of any fiscal quarter, as set
forth in the chart below. The Debt/Cap Ratio shall be determined
from the then most recent quarterly or annual financial statements
delivered by the Company pursuant to Section 5.01. The adjustment,
if any, to the Commitment Fee shall be effective on the fifth
Business Day after the delivery of such financial statements. If the
Company shall at any time fail to timely furnish to the Banks the
financial statements required to be delivered pursuant to Section
5.01, the maximum Commitment Fee shall apply until delivery of the
financial statements. Notwithstanding the foregoing, if at the end
of any fiscal quarter, the ratio of Net Income Available for Fixed
Charges to Fixed Charges is less than 1.5 to 1.0, the maximum
Commitment Fee shall apply until the financial statements delivered
at the end of any fiscal quarter evidence a ratio equal to or greater
than 1.5 to 1.0.
Ratio of Consolidated Commitment
Funded Debt to Consolidated Fee
Total Capitalization
Less than .40 to 1.00 12.5 b.p.
Equal to or greater
than .40 to 1.00 15.0 b.p.
The Company agrees to pay to the Agent, for the Agent's sole
account, the agent's fees set forth in that certain letter agreement
between the Company and the Agent dated October 6, 1995 (the
"Commitment Letter"). Such agent's fees shall be due and payable on
the dates and in the amounts set forth in the Commitment Letter.
(c) The Company shall have the right, from time to time, upon
at least three (3) Business Days' notice to the Agent, to terminate,
or permanently reduce the unused portion of the Aggregate Revolving
Commitment or Aggregate Eurocurrency Commitment, as the case may be,
by an amount not less than $1,000,000 and integral multiples of
$500,000. Upon such reduction, each Bank's Revolving Commitment or
Eurocurrency Commitment, as the case may be, shall be permanently
reduced by an amount equal to the product of such Bank's Applicable
Percentage and the amount by which the Aggregate Revolving Commitment
or Aggregate Eurocurrency Commitment, as the case may be, is reduced.
SECTION 2.16. Increase of Commitments.
(a) The Company may from time to time, on the terms set forth
below, request that the Aggregate Commitment hereunder be increased
to an amount not to exceed $100,000,000; provided, however, that no
increase in the Aggregate Commitment shall be made at a time when a
Default or Event of Default shall have occurred and be continuing.
(b) In the event of such a requested increase in the Aggregate
Commitment, (i) each of the Banks shall be given the opportunity to
participate in the increased Commitments (x) initially ratably in the
proportions that their respective Commitments bear to the Aggregate
Commitment and (y) to the extent that the requested increase of
Commitments is not fulfilled pursuant to the preceding clause (x),
ratably in the proportion that the respective Commitments of the
Banks desiring to participate in any such increase bear to the total
of the Commitments of the increasing Banks, and (ii) to the extent
that the Banks do not elect so to participate in such increased
Commitments after being afforded an opportunity to do so, then the
Company shall consult with the Agent as to the number, identity and
requested Commitments of additional financial institutions which the
Company may, upon the written consent of the Agent, which consent
shall not be unreasonably withheld, invite to participate in the
Commitments.
(c) No Bank shall have any obligation to increase its
Commitment pursuant to a request by the Company hereunder.
(d) In the event that the Company and one or more of the Banks
(or other financial institutions) shall agree upon such an increase
in the Aggregate Commitment (i) the Company, the Agent and each Bank
or other financial institution increasing its Commitment or extending
a new Commitment shall enter into an amendment to this Agreement
setting forth the amounts of the Commitments, as so increased,
providing that the financial institutions extending new Commitments
shall be Banks for all purposes of this Agreement, and setting forth
such additional provisions as the Agent shall consider reasonably
appropriate and (ii) the Company shall furnish new Notes to each
financial institution that is extending a new Commitment. No such
amendment shall require the approval or consent of any Bank whose
Commitment is not being increased. Upon the execution and delivery
of such amendment as provided above, and upon satisfaction of such
other conditions as the Agent may reasonably specify upon the request
of the financial institutions that are increasing or extending new
Commitments (including the delivery of certificates, evidence of
corporate authority and legal opinions on behalf of the Company),
this Agreement shall be deemed to be amended accordingly.
SECTION 2.17. Removal of Banks. The Company shall be
permitted, from time to time in its discretion, to remove Banks from
the Agreement and reduce the Aggregate Commitment, provided that the
Aggregate Commitment may not be reduced below $60,000,000 as a result
of removing one or more Banks pursuant to this Section, and a Bank
may not be removed from the Agreement at any time an Event of Default
exists and remains uncured or unwaived under the Agreement. If the
Company elects to terminate the Commitment of any Bank, it shall give
not less than 14 days written notice to the Agent and such Bank. On
the effective date of such termination, the Company shall pay to the
Agent, for the account of such Bank, in immediately available funds,
an amount equal to all Loans and other amounts (including accrued
interest and fees) owing to such Bank plus the amounts, if any, owing
to such Bank under Section 2.11(d) if such payment is not made on the
last day of the applicable Interest Period.
III. REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Banks and each
Eligible Subsidiary shall be deemed, by the execution and delivery of its
Election to Participate, to also have represented and warranted to the
Banks as to the matters set forth in Article III subsections (m) and (n)
regarding itself:
(a) Organization; Corporate Powers. The Company (i) is a
corporation duly organized, validly existing and in good standing
under the laws of the state of its incorporation; (ii) has the
corporate power and authority to own its property and assets and to
carry on its business substantially as now conducted; (iii) is duly
qualified to do business and is in good standing in every
jurisdiction in which the failure to do so would expose the Company
to a material penalty or to any inhibition which would materially
adversely affect the ability of the Company either to carry on its
business substantially as now conducted or to perform its obligations
under this Agreement and the Notes; and (iv) has the corporate power
to execute, deliver and perform this Agreement, to borrow hereunder
and to execute and deliver the Notes; and each of the Subsidiaries
(other than those organized under the laws of a jurisdiction outside
of the United States of America but including all Eligible
Subsidiaries) is duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation.
(b) Authorization. The execution, delivery and performance of
this Agreement, and the execution and delivery of the Notes (i) have
been duly authorized by all requisite corporate action on the part of
the Company and (ii) will not (A) violate (1) any provision of law
applicable to the Company, which violation would materially and
adversely affect the ability of the Company either to carry on its
business substantially as now conducted or to perform its obligations
under this Agreement or the Notes, (2) the Articles of Incorporation
or By-laws of the Company, (3) any order of any court or agency of
government applicable to the Company or (4) any indenture, agreement
or other instrument to which the Company is a party or by which the
Company or any of its property or assets is bound, which violation
would materially and adversely affect the ability of the Company
either to carry on its business substantially as now conducted or to
perform its obligations under this Agreement or the Notes, (B) be in
conflict with, result in a breach of or constitute (with due notice
or lapse of time or both) a default under any such indenture,
agreement or other instrument, which conflict, breach or default
would materially and adversely affect the ability of the Company
either to carry on its business substantially as now conducted or to
perform its obligations under this Agreement or the Notes, or (C)
result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any property or assets of
the Company. The Agreement is, and the Revolving Notes are, legal,
valid and binding obligations of the Company enforceable in
accordance with their respective terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights
generally, (ii) the enforceability thereof may be limited by
equitable principles of general applicability, and (iii) the
enforceability thereof may be limited by public policy limitations
upon the availability of certain remedies or the enforcement of
certain types of obligations.
(c) Government Approval. No action, consent or approval of, or
registration or filing with, or any other action by any Governmental
Authority is required on behalf of the Company in connection with the
execution, delivery and performance by the Company of this Agreement,
the Borrowings hereunder or the execution and delivery of the Notes
other than such as have been (or, will be, when required) made or
obtained. No consent, approval or authorization of stockholders is
required in connection with any of the foregoing other than such as
have been (or will be, when required) obtained.
(d) Financial Statements. The Company has heretofore furnished
to the Banks a consolidated balance sheet of the Company and its
Subsidiaries as of September 30, 1994, and the consolidated statement
of operations (income statement) and consolidated statement of cash
flows for the 12-month period then ended, certified by KPMG Peat
Marwick LLP, independent accountants and an unaudited consolidated
balance sheet and statement of operations and statement of cash flows
of the Company and its Subsidiaries dated as of June 30, 1995 and for
the nine month period then ended. Such financial statements present
fairly the consolidated financial condition and results of operations
of the Company and its Subsidiaries as of the dates and for the
periods indicated (subject to normal audit and year-end adjustments
in the case of the unaudited statements). All such financial
statements were prepared in accordance with GAAP applied on a
consistent basis as of the date of such financial statements.
(e) No Material Adverse Change. Since September 30, 1994,
there has been no material adverse change in the business, properties
or condition, financial or otherwise, of the Company and the
Subsidiaries taken as a whole which might reasonably be expected to
impair the ability of the Company or the Eligible Subsidiaries to
perform their obligations under this Agreement or the Notes.
(f) Title to Properties. All material assets of the Company
and the Subsidiaries are free and clear of all Liens except Permitted
Liens and Liens permitted under Section 6.01(b).
(g) Litigation. Except as described on Schedule 1, there are
no actions, suits or proceedings at law or in equity or by or before
any Governmental Authority now pending or, to the knowledge of the
officers and directors of the Company, threatened against or
affecting the Company or any of the Subsidiaries or any property or
rights of the Company or any of its Subsidiaries which might be
reasonably expected materially to adversely affect the ability of the
Company and its Subsidiaries, taken as a whole, to carry on business
substantially as now being or heretofore conducted or to materially
adversely affect the financial condition of the Company and its
Subsidiaries taken as a whole.
(h) Tax Returns. The Company and the Subsidiaries have filed
or caused to be filed all federal, state and local tax returns which
are required to be filed and have paid or caused to be paid all taxes
as shown on such returns or on any assessment received by it or by
any of them to the extent that such taxes have become due, except
taxes the amount, applicability or validity of which are being
contested in good faith by appropriate proceedings and with respect
to which the Company or any of the Subsidiaries, as the case may be,
has set aside on its books adequate reserves, in the opinion of the
Company or such Subsidiary, as the case may be. The federal income
tax returns of the Company and its Subsidiaries have been examined by
the IRS for all years through the Company's fiscal year ending
September 28, 1990.
(i) Employee Benefit Plans. The Company and all ERISA
Affiliates, and Plan fiduciaries indemnified by them who are
employees of the Company or an ERISA Affiliate have complied with the
responsibilities, obligations, and duties imposed upon them by ERISA
and the IRC and the rules and regulations promulgated thereunder with
respect to any Plan, where the failure so to comply might be
reasonably expected materially to adversely affect the ability of the
Company and its ERISA Affiliates, taken as a whole, to carry on
business substantially as now being or heretofore conducted, or to
materially adversely affect the financial condition of the Company
and its ERISA Affiliates taken as whole. Except as disclosed in
Schedule 2 neither the Company nor any ERISA Affiliate maintains or
contributes to any employee welfare benefit plan within the meaning
of Section 3(l) of ERISA which provides benefits to employees after
termination of employment other than as required by Section 601 of
ERISA. No Benefit Plan has incurred any accumulated funding
deficiency (as defined in Sections 302 (a)(2) of ERISA or 412(a) of
the IRC) whether or not waived. Neither the Company nor any ERISA
Affiliate has taken or failed to take any action which would
constitute or result in a Termination Event which might be reasonably
expected materially to adversely affect the ability of the Company
and its ERISA Affiliates, taken as a whole, to carry on business
substantially as now being or heretofore conducted, or to materially
adversely affect the financial condition of the Company and its ERISA
Affiliates taken as a whole. Neither the Company nor any ERISA
Affiliate has incurred with respect to any Benefit Plan liability to
the PBGC or any Multiemployer Plan under Title IV of ERISA which
remains outstanding other than the payment of premiums to the PBGC,
and there are no premium payments which have become due which are
unpaid. Neither the Company nor any ERISA Affiliate has failed to
make a required contribution or payment to a Multiemployer Plan.
Neither the Company nor any ERISA Affiliate has failed to make a
required installment or any other required payment under Section 412
of the IRC on or before the due date for such installment or other
payment. Neither the Company nor any ERISA Affiliate is required to
provide security to a Benefit Plan under Section 401(a) (29) of the
IRC due to a Plan amendment that results in an increase in current
liability for the plan year.
(j) Margin Stock. (i) Neither the Company nor any of its
Subsidiaries is engaged in the business of purchasing or carrying
"margin stock," as defined in Regulation U of the Board of Governors
of the Federal Reserve System as from time to time in effect; (ii) no
proceeds of any Loan, or any portion thereof, will be used by the
Company or any of its Subsidiaries to purchase or carry any such
"margin stock" in violation of Regulation G, U, T or X of the Board
of Governors of the Federal Reserve System as from time to time in
effect, and (iii) the value of all such "margin stock" owned by the
Company and its Subsidiaries does not and will not at any time
constitute more than twenty-five percent (25%) of the value of the
total assets of the Company and its Subsidiaries.
(k) Environmental Laws. Except as set forth on Schedule 3
attached hereto and made a part hereof, the operations of the Company
and each Subsidiary comply in all material respects with all
applicable environmental, health and safety Requirements of Law,
where the failure to so comply might be reasonably expected
materially to impair the right of the Company and its Subsidiaries,
taken as a whole, to carry on business substantially as now being or
heretofore conducted, or materially adversely affects the financial
condition of the Company and its Subsidiaries taken as a whole. To
the Company's knowledge, neither the Company, any Subsidiary nor any
of their present assets or operations or their past assets or
operations, are subject to any order, agreement, proceeding or
investigation by any Governmental Authority or other Person
respecting any environmental, health or safety Requirements of Law
which might be reasonably expected materially to adversely affect the
ability of the Company and its Subsidiaries, taken as a whole, to
carry on business substantially as now being or heretofore conducted,
or materially adversely affect the financial condition of the Company
and its Subsidiaries taken as a whole.
(l) Compliance With Laws. The Company and its Subsidiaries
have complied in all material respects with all applicable statutes,
rules, regulations, orders and restrictions of any domestic or
foreign government or any instrumentality or agency thereof, having
jurisdiction over the conduct of their respective businesses or the
ownership of their respective properties.
(m) Eligible Subsidiary Organization and Corporate Powers.
Each Eligible Subsidiary (i) is a corporation duly organized, validly
existing and in good standing under the laws of the state or country
of its incorporation; (ii) has the corporate power and authority to
own its property and assets and to carry on its business
substantially as now conducted; and (iii) has the corporate power to
execute, deliver and perform this Agreement, to borrow hereunder and
to execute and deliver its Election to Participate and its
Eurocurrency Notes.
(n) Binding Effect. The Election to Participate and the
Eurocurrency Note executed by such Eligible Subsidiary are legal,
valid and binding obligations of such Eligible Subsidiary enforceable
in accordance with their respective terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights
generally, (ii) the enforceability thereof may be limited by
equitable principles of general applicability, and (iii) the
enforceability thereof may be limited by public policy limitations
upon the availability of certain remedies or the enforcement of
certain types of obligations.
IV. CONDITIONS OF LENDING
The obligations of the Banks to make Loans hereunder shall be
subject to the following conditions precedent:
SECTION 4.01. All Borrowings. On the date of each Borrowing by
the Company or any Eligible Subsidiary hereunder, including the initial
Borrowing, and each refinancing of any Borrowing (or portion thereof)
pursuant to Sections 2.08 and 2.09:
(a) In the case of (i) the initial Borrowing and each
refinancing of any Borrowing (or portion thereof) pursuant to
Sections 2.08 and 2.09, the Agent shall have received a Notice of
Borrowing or a Notice of Refinancing, as the case may be, as required
by Sections 2.08 and 2.09, respectively.
(b) The unborrowed portion (after giving effect to all
Borrowings and repayments on such day) of the Aggregate Commitment
shall not be less than the aggregate face amount (plus accrued
interest, if any) of the outstanding short-term unsecured debt
obligations (interest bearing or discounted) of the Company or its
Subsidiaries having maturities of 270 days or less ("Wisconsin
Commercial Paper") excluding in any case, debt obligations under this
Agreement and foreign currency borrowings by Subsidiaries.
(c) The representations and warranties set forth in Article III
hereof shall be true and correct with the same effect as though made
on and as of such date (except with respect to the refinancing of any
Borrowing (or portion thereof), the representation and warranty set
forth in Article III(e) hereof).
(d) The Company and, if applicable, the appropriate Eligible
Subsidiary shall be in compliance with all the terms and provisions
contained herein on its part to be observed or performed, and at the
time of and immediately after such Borrowing or refinancing no
Default or Event of Default shall have occurred and be continuing.
Each Notice of Borrowing or Notice of Refinancing hereunder, and each
Competitive Bid Quote Request, shall be deemed to be a representation and
warranty by the Company and, if applicable, the appropriate Eligible
Subsidiary on the date of such Notice of Borrowing or Notice of
Refinancing, or Competitive Bid Quote Request as applicable, as to the
matters specified in paragraphs (b), (c) and (d) of this Section 4.01.
SECTION 4.02. Initial Borrowing. In addition to the conditions
described in Section 4.01 above, the obligation of each Bank to make its
initial Revolving Loan hereunder on the occasion of the initial Borrowing
by the Company is subject to the condition precedent that the Agent shall
have received on or before the day of such initial Borrowing all of the
following, each fully executed and in form and substance satisfactory to
the Agent and in sufficient copies for each Bank, if applicable, and this
Agreement shall become effective on the date such condition precedent is
satisfied:
(i) This Agreement, with all Exhibits and Schedules completed
in form and substance reasonably satisfactory to the Agent;
(ii) The Revolving Loan Notes, the Eurocurrency Notes and the
Competitive Bid Notes of the Company payable to the order of
each of the Banks, respectively;
(iii) Signed copies of a certificate of the Secretary or an
Assistant Secretary or other appropriate officer of the Company,
in form and substance acceptable to the Agent, certifying as of
the Effective Date (A) the names and true signatures of the
officers of the Company authorized to sign this Agreement, the
Revolving Loan Notes, the Eurocurrency Notes and the Competitive
Bid Notes, (B) that attached thereto is a true and complete copy
of the By-laws of the Company as in effect on the date of such
certification, (C) that attached thereto is a true and complete
copy of the resolutions of the Board of Directors of the
Company, in form and substance acceptable to the Agent,
approving this Agreement and the Notes, and (D) that the
Articles of Incorporation of the Company has not been amended
since the date of the last amendment thereto indicated on the
certificate of the Secretary of State of Wisconsin furnished
pursuant to clause (iv) below. The Agent may conclusively rely
on such certificate of the Company until the Agent shall receive
a further certificate of the Secretary or an Assistant Secretary
of the Company cancelling or amending the prior certificate of
the Company and submitting the signatures of the officers named
in such further certificate;
(iv) A copy of the Company's Articles of Incorporation,
certified by the Secretary of State of Wisconsin as of a date
not earlier than fifteen (15) days prior to the Effective Date
and a certificate of such Secretary of State as to the legal
existence of the Company in the office of such Secretary of
State certified as of a date not earlier than fifteen (15) days
prior to the Effective Date;
(v) A certificate of the President or Vice President of the
Company certifying, as of the Effective Date, that the
representations and warranties set forth in Article III hereof
are true and correct as of such date;
(vi) A favorable opinion of Foley & Lardner, counsel to the
Company and the Subsidiaries, dated as of the Effective Date, in
substantially the form of Exhibit "H" hereto;
(vii) The fees payable on the Effective Date as specified in
that certain letter agreement dated October 6, 1995 between the
Company and the Agent;
(viii) Written money transfer instructions in the form
reasonably requested by the Agent and signed by an Authorized
Officer of the Company;
(ix) Evidence satisfactory to the Agent that the Company shall
have repaid in full all loans (if any) outstanding under the
Existing Agreements (as hereinafter defined) and all interest
(if any) and accrued fees due thereunder to but not including
the Effective Date.
The parties hereto and thereto agree that the commitments
under that certain Revolving and Term Loan Agreement dated
October 2, 1991 and that certain Revolving Loan Agreement dated
April 2, 1993 among the Company, The First National Bank of
Chicago, as Agent, and the banks party thereto ("Existing
Agreements") shall terminate in their entirety on the
effectiveness of this Agreement and that the Company shall
simultaneously pay all amounts due and outstanding thereunder to
but excluding the Effective Date.
SECTION 4.03. Initial Borrowing by Eligible Subsidiaries. In
addition to the conditions described in Section 4.01 above, the obligation
of each Bank to make its initial Eurocurrency Loan hereunder to an
Eligible Subsidiary is subject to the condition precedent that the Company
shall have satisfied all the conditions precedent in Section 4.02 and that
the Agent shall have received on or before the day of the initial
Borrowing by such Eligible Subsidiary all of the following, each duly
executed and in form and substance satisfactory to the Agent and in
sufficient copies for each Bank, if applicable:
(i) Eurocurrency Notes executed by such Eligible
Subsidiary, payable to the order of each of the Banks;
(ii) All documents reasonably requested by the Agent
relating to the existence of such Eligible Subsidiary, the
corporate authority for and the validity of the Election to
Participate of such Subsidiary, this Agreement and its
Eurocurrency Note, including without limitation, documents of
the type listed in Section 4.02(iii);
(iii) An executed Election to Participate from such Eligible
Subsidiary; and
(iv) A certificate of the President or Vice President of
such Eligible Subsidiary certifying that as of the initial
Borrowing Date for such Eligible Subsidiary, the representations
and warranties set forth in Article III with respect to such
Eligible Subsidiary are true and correct as of such date.
SECTION 4.04. Absolute Rate Loans. In addition to the conditions
described in Sections 4.01 and 4.02 above, the Company shall deliver to a
Bank with the first Absolute Rate Loan made by such Bank, a Competitive
Bid Note of the Company payable to the order of such Bank.
V. AFFIRMATIVE COVENANTS
The Company covenants and agrees with each of the Banks that, so
long as this Agreement shall remain in effect or the Loans, Commitment
Fee, interest, fees or any other expenses or amounts payable hereunder
shall be unpaid, unless the Majority Banks shall otherwise consent in
writing, it will, and will cause each of its Subsidiaries to:
SECTION 5.01. Financial Statements. In the case of the
Company, furnish to the Agent with sufficient copies for each Bank:
(a) within ninety (90) days after the end of each fiscal year
of the Company, a consolidated balance sheet of the Company and its
Subsidiaries as of the close of such fiscal year and consolidated
statements of operations (income statement) and cash flows of the
Company and its Subsidiaries for such fiscal year, all the foregoing
consolidated financial statements to be certified by KPMG Peat
Marwick LLP or another nationally recognized firm of independent
accountants, and all certified as accurate by a Financial Officer of
the Company;
(b) (i) within forty-five (45) days after the end of each of
the first three fiscal quarters of each fiscal year of the Company, a
consolidated balance sheet of the Company and its Subsidiaries as of
the close of such fiscal quarter and consolidated statement of
operations and a statement of cash flows of the Company and its
Subsidiaries as of the end of each such fiscal quarter for the then
elapsed portion of such fiscal year, all certified as accurate by a
Financial Officer of the Company (subject to audit and normal
year-end adjustments) and (ii) within forty-five (45) days (or ninety
(90) days with respect to the fourth quarter) after the end of each
of the four fiscal quarters of each fiscal year of the Company, a
consolidating "key income statement figures report" of the Company
and its Subsidiaries for the portion of such fiscal year elapsed
through the end of each such fiscal quarter, prepared on a basis
consistent with such report of the Company and its Subsidiaries dated
June 30, 1995 and certified as accurate by a Financial Officer of the
Company;
(c) promptly after the sending or filing thereof, copies of all
reports which the Company or any of its Subsidiaries sends to any of
its stockholders which the Company or any of its Subsidiaries files
with the Securities and Exchange Commission or any national
securities exchange, and copies of all 10-K, 10-Q and 8-K reports and
registration statements which the Company or any of the Subsidiaries
files with the Securities and Exchange Commission or any national
securities exchange;
(d) concurrently with the reports required to be delivered
pursuant to Section 5.01(a), a report by the Company's independent
accountants to the effect that, in connection with their examination
of such annual consolidated financial statements, (i) nothing came to
their attention that caused them to believe that the Company or any
of its Subsidiaries was not in compliance with the covenants
contained in Article V or VI and (ii) they have examined the
schedules to such reports containing calculations of financial
covenants required to be performed or observed pursuant to Sections
6.01 through 6.08, and, in their opinion, the information set forth
in such schedules is fairly stated in all material respects in
relation to the annual consolidated financial statements taken as a
whole;
(e) concurrently with the reports required to be delivered
pursuant to Sections 5.01(a) and 5.01(b), a certificate of the
Company executed by a Financial Officer of the Company to the effect
that he has made a review of the activities of the Company and the
Company's Subsidiaries for such fiscal period and of its performance
and observance of the covenants contained in Articles V and VI, that
to the best of his knowledge, based on such review, the Company is
not in default in the performance or observance of any such covenants
(showing the calculations upon which such conclusions are based) and
that to the best of his knowledge no Default or Event of Default has
occurred and is continuing or, if in his opinion a Default or an
Event of Default has occurred and is continuing, specifying the
nature and extent thereof known to him; and
(f) promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of
the Company and the Subsidiaries as any Bank may reasonably request.
SECTION 5.02. Litigation Notice. Give the Agent notice,
promptly, of any action, suit or proceeding at law or in equity or by or
before any Governmental Authority which might be reasonably expected
materially to adversely affect the ability of the Company and the
Subsidiaries, taken as a whole, to carry on business substantially as now
being conducted or to affect materially adversely the financial condition
of the Company and the Subsidiaries taken as a whole and of any
combination of such actions, suits or proceedings which taken together
might be reasonably expected materially to impair such right or to affect
materially adversely such financial condition.
SECTION 5.03. ERISA.
(a) Deliver to the Agent, at the Company's expense, the
following information and notices as soon as possible, and in any
event:
(i) within ten (10) Business Days after the Company or any
ERISA Affiliate knows or has reason to know that a Termination
Event has occurred which might be reasonably expected materially
to adversely affect the ability of the Company and its
Subsidiaries, taken as a whole, to carry on business
substantially as now being or heretofore conducted, or to
materially adversely affect the financial condition of the
Company and its Subsidiaries taken as a whole, a written
statement of the Financial Officer of the Company describing
such Termination Event and the action, if any, which the Company
or any ERISA Affiliate has taken, is taking or proposes to take
with respect thereto, and when known, any action taken or
threatened by the IRS, DOL, PBGC or a Multiemployer Plan with
respect thereto;
(ii) within ten (10) Business Days after the Company or any
ERISA Affiliate knows or has reason to know that a prohibited
transaction (defined in Sections 406 of ERISA and 4975 of the
IRC) has occurred, a statement of the Financial Officer of the
Company describing such transaction and the action which the
Company or any ERISA Affiliate has taken, is taking or proposes
to take with respect thereto;
(iii) 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 Company or any ERISA Affiliate with respect to such request;
(iv) within ten (10) Business Days after receipt by the Company
or any ERISA Affiliate of the PBGC's intention to terminate a
Benefit Plan or to have a trustee appointed to administer a
Benefit Plan, which termination or appointment might be
reasonably expected materially to adversely affect the ability
of the Company and its Subsidiaries, taken as a whole, to carry
on business substantially as now being or heretofore conducted,
or to materially adversely affect the financial condition of the
Company and its Subsidiaries taken as a whole, copies of each
such notice;
(v) within ten (10) Business Days after receipt by the Company
or any ERISA Affiliate of any unfavorable determination letter
from the IRS regarding the qualification of a Plan under Section
401(a) of the IRC which might be reasonably expected materially
to adversely affect the ability of the Company and its
Subsidiaries, taken as a whole, to carry on business
substantially as now being or heretofore conducted, or to
materially adversely affect the financial condition of the
Company and its Subsidiaries taken as a whole, copies of each
such letter;
(vi) within ten (10) Business Days after receipt by the Company
or any ERISA Affiliate of a notice from a Multiemployer Plan
regarding the imposition of withdrawal liability which liability
might be reasonably expected materially to adversely affect the
ability of the Company and its Subsidiaries, taken as a whole,
to carry on business substantially as now being or heretofore
conducted, or to materially adversely affect the financial
condition of the Company and its Subsidiaries taken as a whole,
copies of each such notice;
(vii) within ten (10) Business Days after the Company or any
ERISA Affiliate fails to make a required installment or any
other required payment under Section 412 of the IRC on or before
the due date for such installment or payment which failure might
be reasonably expected materially to adversely affect the
ability of the Company and its Subsidiaries, taken as a whole,
to carry on business substantially as now being or heretofore
conducted, or to materially adversely affect the financial
condition of the Company and its Subsidiaries taken as a whole,
a notification of such failure; and
(viii) within ten (10) Business Days after the Company or any
ERISA Affiliate knows or has reason to know (a) a Multiemployer
Plan has been terminated, (b) the administrator or plan sponsor
of a Multiemployer Plan intends to terminate a Multiemployer
Plan, or (c) the PBGC has instituted or will institute
proceedings under Section 4042 of ERISA to terminate a
Multiemployer Plan, which termination or proceedings might be
reasonably expected materially to adversely affect the ability
of the Company and its Subsidiaries, taken as a whole, to carry
on business substantially as now being or heretofore conducted,
or to materially adversely affect the financial condition of the
Company and its Subsidiaries taken as a whole.
For purposes of this Section 5.03, the Company and any ERISA Affiliate
shall be deemed to know all facts known by the Administrator of any Plan
of which the Company or any ERISA Affiliate is the plan sponsor.
(b) Establish, maintain and operate all Plans to comply in all
material respects with the provisions of ERISA and the IRC, and the
regulations and interpretations thereunder, where the failure to so
comply might reasonably be expected materially to impair the ability
of the Company and the Subsidiaries, taken as a whole, to carry on
business substantially as now being conducted or to affect materially
and adversely the financial condition of the Company and the
Subsidiaries, taken as a whole.
SECTION 5.04. Corporate Existence. (a) Do or cause to be done
all things necessary to preserve, renew and keep in full force and effect
its corporate existence, material rights, licenses, permits and franchises
and substantially comply with all laws and regulations the noncompliance
with which would have a material adverse effect on its business; (b) at
all times maintain and preserve all property used or useful in the conduct
of its business (other than property which is not owned by the Company or
any of its Subsidiaries and with respect to which a third party is
responsible for maintenance) and keep the same in good repair, working
order and condition, ordinary wear and tear excepted, and from time to
time make, or cause to be made, all necessary repairs, renewals and
replacements thereto; provided, however, that nothing contained in this
Section 5.04 shall prevent the Company or its Subsidiaries from ceasing or
omitting to exercise any rights, licenses, permits or franchises which in
the judgment of the Company or such Subsidiary is no longer in the best
interest of the Company or such Subsidiary or prevent the Company or any
Subsidiary from selling, abandoning or otherwise disposing of any
property, the retention of which in the judgment of the Company or such
Subsidiary is not in the best interest of the Company or such Subsidiary,
or prevent any liquidation of any Subsidiary of the Company or any merger
or consolidation or sale permitted by the provisions of Section 6.03.
SECTION 5.05. Insurance. Keep its insurable properties
adequately insured at all times in the same manner and to the same extent,
and carry such other insurance, including, without limitation, product
liability insurance, in connection with the operation of its business as
is customary with companies in the same or similar businesses; provided
that the Company may self-insure certain risks to the extent customary for
companies of similar size or in the same or similar businesses.
SECTION 5.06. Obligations and Taxes. Pay all its indebtedness
and obligations promptly and in accordance with their terms and pay and
discharge promptly all taxes, assessments and governmental charges or
levies imposed upon it or in respect of its property, before the same
shall become in default, as well as all lawful claims for labor, materials
and supplies or otherwise which, if unpaid, might become a lien or charge
upon such properties or any part thereof; provided, however, that neither
the Company nor any of its Subsidiaries shall be required to pay and
discharge or to cause to be paid and discharged any such indebtedness or
obligations or any such tax, assessment, charge, levy or claim so long as
the applicability, validity or amount thereof shall be contested in good
faith by appropriate proceedings or actions and the Company or such
Subsidiary, as the case may be, shall set aside on its books adequate
reserves, in its reasonable opinion, with respect to any such indebtedness
or obligations or any such tax, assessment, charge, levy or claim so
contested.
SECTION 5.07. Notice of Defaults. Notify each Bank, in
writing, promptly upon the Company's obtaining knowledge of any condition
or event that constitutes a Default or an Event of Default.
SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans
solely (a) for general corporate purposes or (b) to make non-hostile
Acquisitions, or acquisitions of a noncontrolling equity interest in a
Person (other than the Company), which, if required by applicable law or
by any agreement, instrument or other document binding on such Person,
have been approved by the boards of directors or other governing bodies of
the Persons who, or whose assets, will be acquired with the proceeds of
such Loans, or, if a vote of such governing bodies is not required, but
the vote of the stockholders of such Person is required by applicable law
or by any agreement, instrument or other document binding on such Person,
by such stockholders.
SECTION 5.09. Environmental Notices and Inspection. (a) Notify
the Agent in writing, promptly upon the Company's learning thereof, of any
(i) notice or claim by any Governmental Authority or any other Person to
the effect that the Company or any Subsidiary is or may be liable to any
Person, or is or may be required to take any actions or refrain from
taking any actions, as a result of any environmental, health or safety
Requirements of Law, which might be reasonably expected to materially
adversely affect the ability of the Company and its Subsidiaries, taken as
a whole, to carry on business substantially as now being or heretofore
conducted, or to materially adversely affect the financial condition of
the Company and its Subsidiaries taken as a whole; or (ii) notice that the
Company or any Subsidiary is subject to investigation by any Governmental
Authority evaluating whether any remedial action is needed to respond to
the release or threatened release of any contaminant into the environment,
which remedial action might be reasonably expected materially to adversely
affect the ability of the Company and its Subsidiaries, taken as a whole,
to carry on business substantially as now being or heretofore conducted,
or materially adversely affects the financial condition of the Company and
its Subsidiaries taken as a whole, and (b) pertaining to the areas of
environmental compliance, hazard or liability, permit, and cause each
Subsidiary to permit, the Agent, any Bank, or any agent or representative
of the Agent or any Bank, during normal business hours and with reasonable
prior notice, to inspect any of the Company's or any Subsidiary's
documents, property or operations, and interview any of the Company's or
any Subsidiary's employees, representatives or agents (including without
limitation, its officers and third party accountants).
SECTION 5.10. Compliance with Laws. Comply in all material
respects with all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject.
SECTION 5.11. Inspection. Will, and will cause each of its
Subsidiaries to, permit the Banks, by their representatives and agents, to
inspect with reasonable prior notice any of the properties, corporate
books and financial records of the Company and its Subsidiaries and to
examine and make copies of the books of accounts and other financial
records of the Company and its Subsidiaries, and to discuss the affairs,
finances and accounts of the Company and its Subsidiaries with, and to be
advised as to the same by, its officers at such reasonable times and
intervals as the Banks may designate.
SECTION 5.12. Conduct of Business. The Company will, and will
cause each Subsidiary to, carry on and conduct its business substantially
in the recreation and leisure activities industry excluding gaming
casinos.
VI. NEGATIVE COVENANTS
The Company covenants and agrees with the Banks that, so long as
this Agreement shall remain in effect or the Loans, Commitment Fee,
interest, fees or any other expenses or amounts payable hereunder shall be
unpaid, unless the Majority Banks shall otherwise consent in writing:
SECTION 6.01. Limitations on Indebtedness.
(a) The Company will not at any time permit Consolidated Funded
Debt to exceed 50% of Consolidated Total Capitalization, provided
that for purposes of calculating compliance with this Section 6.01,
the Average Outstanding Balance of Consolidated Current Debt computed
for the Compliance Period preceding the date of any such
determination shall be deemed to constitute outstanding Funded Debt
of the Company incurred as of the last day of such Compliance Period
and shall be deemed outstanding at all times prior to the end of the
next Compliance Period.
(b) The Company will not at any time permit the sum (without
duplication) of (i) Current Debt and Funded Debt of its Subsidiaries
and (ii) Funded Debt of the Company and its Subsidiaries secured by
Liens (other than Permitted Liens) to exceed 25% of Consolidated
Tangible Assets.
(c) Current Debt and Funded Debt of any Subsidiary to the
Company or to an Eighty Percent-Owned Subsidiary shall not be taken
into account for purposes of the foregoing limitations of this
Section 6.01. There shall be no duplication of Funded Debt and
Current Debt of any Subsidiary and the Guaranty of such Debt by the
Company.
(d) Any Person which becomes a Subsidiary after the date hereof
shall for all purposes of this Section 6.01 be deemed to have
created, assumed or incurred or issued at the time it becomes a
Subsidiary all Current Debt and Funded Debt of such Person existing
immediately after it becomes a Subsidiary.
SECTION 6.02. Mergers, Consolidations, Sales of Assets, Etc.
The Company will not, and will not permit any Subsidiary to,
(a) consolidate with or be a party to a merger with any other
Person; provided, however, that:
(1) any Subsidiary may merge or consolidate with or liquidate
into the Company, any Wholly-Owned Subsidiary or any Subsidiary
that is the direct or indirect parent of said Subsidiary and any
Subsidiary (other than a Principal Subsidiary) may merge or
consolidate with or liquidate into any other Subsidiary so long
as (i) in any merger or consolidation involving the Company, the
Company shall be the surviving corporation and (ii) in any
merger, consolidation or liquidation involving a Domestic
Subsidiary and a non-Domestic Subsidiary, the Domestic
Subsidiary shall be the surviving corporation; and
(2) the Company or any Subsidiary may consolidate or merge with
any other corporation if (i) (in the case of a merger or
consolidation involving the Company) the surviving or acquiring
corporation (if other than the Company) (A) is organized and
existing under the laws of any State of the United States of
America or the District of Columbia, (B) shall expressly assume
in writing the due and punctual performance of all obligations
of the Company under this Agreement and the Notes, according to
their tenor, and the Parent Guaranty, and (C) the Company or
such surviving or acquiring corporation shall furnish to the
holders of the Notes an opinion of counsel satisfactory to such
holders to the effect that the instrument of assumption has been
duly authorized, executed and delivered and constitutes the
legal, valid and binding contract and agreement of the surviving
or acquiring corporation enforceable in accordance with its
terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally, and subject, as to
enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at
law), or (ii) (in the case of a merger or consolidation
involving a Subsidiary) such Subsidiary shall be the surviving
corporation and (iii) in the case of any consolidation or merger
described in either (i) or (ii), at the time of such
consolidation or merger, and after giving effect thereto no
Default or Event of Default shall have occurred and be
continuing.
(b) sell, lease, transfer, abandon or otherwise dispose of,
assets (other than (x) sales of goods, products, inventory or
services in the ordinary course of business to customers, (y) the
sale, lease, transfer or disposition of assets to the Company or a
Domestic Subsidiary if a merger between such transferor and such
Domestic Subsidiary would be permitted under Section 6.02(a)(1) and
(z) sales or other dispositions of assets having a fair market value
(as determined in good faith by the chief financial officer of the
Company) in any single sale or disposition of not greater than
$200,000 which the Company determines have become inadequate,
obsolete, worn out, unsuitable, undesirable or unnecessary in the
conduct of its business); provided that the foregoing restrictions do
not apply to the sale of assets for cash or property to a Person or
Persons if all of the following conditions are met:
(1) either (i) the net book value of such assets, when added to
the net book value of all other assets sold, leased, transferred
or otherwise disposed of by the Company and its Subsidiaries in
other transactions subject to this Section 6.02(b)(1) or Section
6.02(c)(3) or (4) during the immediately preceding twelve-month
period do not constitute 10% of Consolidated Total Assets
(determined as of September 29, 1995) or (ii) the sum of the
portions of Consolidated Net Income contributed for the
immediately preceding twelve-month period (each as determined in
good faith by the Chief Financial Officer of the Company) by (A)
such assets, (B) each Subsidiary (or portion thereof) disposed
of during such period pursuant to Section 6.02(c)(3) or (4) and
(C) other assets of the Company and its Subsidiaries disposed of
during such period in other transactions subject to this Section
6.02(b)(1) do not constitute 10% or more of Consolidated Net
Income for such period; and
(2) immediately after the consummation of the transaction and
after giving effect thereto no Default or Event of Default would
exist.
(c) sell, transfer or otherwise dispose of any shares of
capital stock (including as "stock" for the purposes of this Section
6.02(c), any warrants, rights or options to purchase or otherwise
acquire stock or other securities exchangeable for or convertible
into such stock) of any Subsidiary and the Company will not permit
any Subsidiary to issue any shares of stock of such Subsidiary
(except for any sale, transfer, issuance or other disposition of
stock to the Company or a Subsidiary if a merger between such
transferor or issuer and such Subsidiary would be permitted under
Section 6.02(a)(1)); provided that the foregoing restrictions do not
apply to:
(1) the sale, transfer or issuance of directors' qualifying
shares of capital stock;
(2) the sale, transfer or issuance of any de minimus number of
shares of capital stock to foreign domiciliaries as may be
required by law;
(3) the sale, transfer or other disposition of all or any part
of the shares of capital stock of any Subsidiary (other than a
Principal Subsidiary);
(4) the sale, transfer or other disposition of all shares of
capital stock of a Principal Subsidiary held by the Company and
its Subsidiaries if all of the following conditions are met:
(i) simultaneously with such sale, transfer, or
disposition, all shares of stock and all Indebtedness of such
Principal Subsidiary at the time owned by the Company and by
every other Subsidiary shall be sold, transferred or disposed of
as an entirety;
(ii) the Board of Directors of the Company shall have
determined, as evidenced by a resolution thereof, that the
proposed sale, transfer or disposition of said shares of stock
and Indebtedness is in the best interests of the Company;
(iii) said shares of stock and Indebtedness are sold,
transferred or otherwise disposed of to a Person or Persons, for
cash and/or tangible assets and on terms reasonably deemed by
the Board of Directors to be adequate and satisfactory; and
(iv) the Principal Subsidiary being disposed of shall not
have any continuing investment in the Company or any other
Subsidiary not being simultaneously disposed of;
(5) the sale, transfer or issuance of shares of capital stock
of a Subsidiary in connection with the purchase or other
acquisition by the Company or a Subsidiary of the capital stock,
properties or assets of any Person; provided that:
(i) after giving effect to such sale, transfer or issuance
and such purchase or other acquisition, no Default or Event of
Default would then exist;
(ii) the aggregate fair value of all such capital stock,
properties or assets so acquired attributable to the issuance,
sale or transfer of such shares of capital stock in each sale,
transfer or issuance of such shares shall equal or exceed the
fair value of such shares (in each case as determined in good
faith by the Board of Directors of the Company at the time of
such acquisition taking into consideration the terms of any
written agreement described in Section 6.02(c)(5)(iii) below);
and
(iii) the shares of capital stock are sold, transferred or
issued pursuant to a written agreement which (A) contemplates
the subsequent purchase or redemption of such shares by the
Company or the Subsidiary whose shares have been so sold,
transferred or issued or any direct or indirect parent of such
Subsidiary upon request of the transferee of such shares or upon
demand by the Company or such Subsidiary or any direct or
indirect parent of such Subsidiary made pursuant to the terms of
such written agreement at a price or prices computed by
reference to such formulas or indices or other references as are
determined in good faith by the Board of Directors of the
Company at the time of such acquisition to be in the best
interests of the Company and its Subsidiaries and (B) prohibits
the transfer of such shares to any Person other than the Company
or the Subsidiary whose shares have been so sold, transferred or
issued or any direct or indirect parent of such Subsidiary; and
(6) the sale, transfer or issuance of capital stock to
employees of Subsidiaries as part of any incentive stock
arrangement other than any incentive stock agreement entered
into in connection with any purchase or acquisition contemplated
by Section 6.02(c)(5), provided that:
(i) after giving effect to such issuance no Subsidiary
shall cease to be a Subsidiary; and
(ii) the aggregate fair value (in each case determined in
good faith at the time of such issuance by the Board of
Directors of the Company or such person or committee as the
Board of Directors of the Company may authorize to make such
determination pursuant to the terms of any such incentive stock
arrangement) of all shares of capital stock of such Subsidiaries
issued to such employees shall not exceed $2,000,000;
provided, however, that notwithstanding the foregoing, any sale,
transfer, issuance or other disposition of shares pursuant Section
6.02(c)(3) or 6.02(c)(4) may not be consummated if either (y) the net
book value of the assets of such Subsidiary attributable to such
sale, transfer, issuance or other disposition of shares when added to
the net book value of all other assets sold, leased, transferred or
otherwise disposed of by the Company and its Subsidiaries during the
immediately preceding twelve-month period in other transactions
subject to Section 6.02(b)(1) and Sections 6.02(c)(3) and (4) would
constitute 10% (or more) of Consolidated Total Assets (determined as
of September 29, 1995) or (z) the portions of Consolidated Net Income
for the immediately preceding twelve-month period contributed (each
as determined in good faith by the Chief Financial Officer of the
Company) by (1) such assets, (2) each Subsidiary (or portion thereof)
disposed of during such period in transactions subject to Sections
6.02(c)(3) and (4) and (3) other assets of the Company and its
Subsidiaries sold, leased, transferred or otherwise disposed of by
the Company and its Subsidiaries during such period in transactions
subject to Section 6.02(b)(1) would exceed 10% of Consolidated Net
Income for such period.
(d) Notwithstanding any other provision of this Section 6.02,
the Company may sell stock or assets of America Outdoors, Inc., Airguide
Instrument Co. and all of the Plastimo businesses. Sale of stock or
assets permitted by this Section 6.02(d) shall not be taken into account
for purposes of calculating the limitations on permitted sales of assets
and stock set forth in Section 6.02(b)(1) and the proviso at the end of
Section 6.02(c).
SECTION 6.03. Fixed Charges Coverage Ratio. The Company will at
the end of each fiscal quarter, have kept and maintained for the
immediately preceding four fiscal quarters the ratio of Net Income
Available for Fixed Charges to Fixed Charges for each period of four
consecutive fiscal quarters at not less than 1.50 to 1.0, provided that on
any four (but only four) fiscal quarter ends during the term of this
Agreement, the ratio of Net Income Available for Fixed Charges to Fixed
Charges for the immediately preceding four fiscal quarters may be less
than 1.5 to 1.0, but must be greater than 1.2 to 1.0.
SECTION 6.04. Distributions.
(a) The Company will not, and will not permit any Subsidiary to,
except as hereinafter provided:
(1) Declare or pay any dividends, either in cash or property,
on any shares of its capital stock of any class (except
dividends or other distributions payable solely in shares of
capital stock of the Company and dividends paid by Subsidiaries
to the Company or other Subsidiaries in respect of capital stock
of Subsidiaries owned by the Company or such other
Subsidiaries); or
(2) Directly or indirectly, or through any Subsidiary,
purchase, redeem or retire any shares of its capital stock of
any class or any warrants, rights or options to purchase or
acquire any shares of its capital stock (other than (i) in
exchange for or out of the net cash proceeds to the Company
obtained within three months of such purchase, redemption or
retirement from the issue or sale of other shares of capital
stock of the Company or warrants, rights or options to purchase
or acquire any shares of its capital stock or (ii) in connection
with any purchase or redemption of any shares of capital stock
sold, transferred or issued in accordance with Section
6.02(c)(1), (2) or (5)); or
(3) Make any other payment or distribution, either directly or
indirectly or through any Subsidiary, in respect of its capital
stock (such declarations or payments of dividends, purchases,
redemptions or retirements of capital stock and warrants, rights
or options and all such other payments or distributions being
herein collectively called "Distributions"), except (i)
Repurchases of up to 50,000 shares of stock per year of the
Company for use in connection with employee stock option and
other employee benefit plans, and (ii) other Distributions,
provided that after giving effect thereto no Default or Event of
Default would exist and the aggregate amount of Distributions
(excluding Distributions pursuant to Section 6.04 (a)(3)(i))
made during the period from and after June 14, 1991 to and
including the date of the making of the Distribution in question
would not exceed the sum of (1) $5,000,000 plus (2) 50% of
Consolidated Net Income for such period, computed on a
cumulative basis for said entire period (or if such Consolidated
Net Income is a deficit figure, then minus 100% of such
deficit).
(b) For the purposes of Section 6.04(a)(3)(ii) above, the
amount of any Distribution declared, paid or distributed in property
shall be deemed to be the greater of the book value or fair market
value (as determined in good faith by the Board of Directors of the
Company) of such property at the time of the making of the
Distribution in question.
(c) The Company will not authorize or make a Distribution on
its capital stock if after giving effect to the proposed Distribution
a Default or Event of Default would exist.
SECTION 6.05. Investments. The Company will not, and will not
permit any Subsidiary to, make any Investments, other than:
(a) Investments by the Company or a Subsidiary in and to
Subsidiaries, including any Investment in a Person which, after
giving effect to such Investment, will become a Subsidiary;
(b) Investments in property or assets to be used in the usual
and ordinary course of business of the Company or its Subsidiaries,
provided that such Investment does not have the effect of changing
substantially the general nature of the business engaged in by the
Company and its Subsidiaries on a consolidated basis;
(c) Investments in commercial paper maturing in 270 days or
less from the date of issuance which, at the time of acquisition by
the Company or any Subsidiary, is accorded the highest rating by
Standard & Poor's Rating Group, a division of McGraw-Hill, Moody's
Investors Service, Inc. or another credit rating agency of recognized
national standing;
(d) Investments in direct obligations of the federal
governments of the United States of America, or any of the other
countries listed on Schedule 6.05 or any direct agency or
instrumentality of any thereof, the payment or guarantee of which
constitutes a full faith and credit obligation of one of such federal
governments or any direct agency or instrumentality of any thereof,
as the case may be, in each case, maturing in twelve months or less
from the date of acquisition thereof;
(e) Term federal funds and banker's acceptances maturing within
180 days from the date of acquisition thereof and issued by a bank
organized under the laws of the United States or any of the countries
listed on Schedule 6.05, having capital, surplus and undivided
profits aggregating at least U.S. $100,000,000; provided that the
issuing institution has a long-term debt rating of A or better by
Keefe Bank Watch Service, Standard & Poor's Rating Group, a division
of McGraw-Hill or Moody's Investors Service, Inc. or any successors
thereto.
(f) Investments in certificates of deposit and time deposits
maturing within one year from the date of issuance thereof with
commercial banks (whether domestic or foreign) having capital and
surplus in excess of $100,000,000 (or the Dollar equivalent thereof);
(g) Investments consisting of demand deposit accounts
maintained in the ordinary course of business;
(h) Loans or advances in the usual and ordinary course of
business to officers, directors, and employees incidental to carrying
on the business of the Company or any Subsidiary;
(i) Receivables arising from the sale of goods and services in
the ordinary course of business of the Company and its Subsidiaries;
and
(j) Other Investments (in addition to those permitted by the
foregoing provisions of this Section 6.05); provided that (1) all
such other Investments shall not exceed in the aggregate 25% of
Consolidated Tangible Net Worth Available for Investments and (2)
after giving effect to such other Investments, no Default or Event of
Default would exist.
In valuing any Investments for the purpose of applying the
limitations set forth in this Section 6.05, such Investments shall be
valued in accordance with GAAP.
For purposes of this Section 6.05, at any time when a
corporation becomes a Subsidiary, all Investments of such Person at such
time shall be deemed to have been made by such Person, as a Subsidiary, at
such time.
SECTION 6.06. Transactions with Affiliates. The Company will
not, and will not permit any Subsidiary to, enter into or be a party to
any material transaction or arrangement with any Affiliate (including,
without limitation, the purchase from, sale to or exchange of property
with, or the rendering of any service by or for, any Affiliate), except
transactions reasonably deemed by the Company in good faith to be in the
best business interests of the Company or the concerned Subsidiary and
upon fair and reasonable terms no less favorable to the Company or such
Subsidiary than would obtain in a comparable arm's-length transaction with
a Person other than an Affiliate.
SECTION 6.07. ERISA. Except to the extent that such act, or
failure to act would not result singly, or in the aggregate, after taking
into account all other such acts or failures to act, in a liability which
might be reasonably expected materially to adversely affect the ability of
the Company and its ERISA Affiliates, taken as a whole, to carry on
business substantially as now being or heretofore conducted, or to
materially adversely affect the financial condition of the Company and its
ERISA Affiliates taken as a whole, (i) engage, or permit any ERISA
Affiliate to engage, in any prohibited transaction described in Sections
406 of ERISA or 4975 of the IRC for which a statutory or class exemption
is not available or a private exemption has not been previously obtained
from the DOL; (ii) permit to exist any accumulated funding deficiency (as
defined in Sections 302 of ERISA and 412 of the IRC); (iii) fail, or
permit any ERISA Affiliate to fail, to pay timely required contributions
or annual installments due with respect to any waived funding deficiency
of any Benefit Plan; (iv) terminate, or permit any ERISA Affiliate to
terminate, any Benefit Plan which would result in any liability of the
Company or any ERISA Affiliate under Title IV of ERISA; (v) fail to make
any contribution or payment to any Multiemployer Plan which the Company or
any ERISA Affiliate may be required to make under any agreement relating
to such Multiemployer Plan, or any law pertaining thereto; (vi) fail, or
permit any ERISA Affiliate to fail, to pay any required installment or any
other payment required under Section 412 of the IRC on or before the due
date for such installment or other payment; (vii) amend, or permit any
ERISA Affiliate to amend, a Benefit Plan resulting in an increase in
current liability for the plan year such that the Company or any ERISA
Affiliate is required to provide security to such Plan under Section 401
(a) (29) of the IRC.
SECTION 6.08. Environmental Compliance. Become, or permit any
Subsidiary to become, subject to any liabilities or costs which might be
reasonably expected materially to adversely affect the ability of the
Company and its Subsidiaries, taken as a whole, to carry on business
substantially as now being or heretofore conducted, or to materially
adversely affect the financial condition of the Company and its
Subsidiaries taken as a whole, arising out of or related to (i) the
release or threatened release at any location of any contaminant into the
environment, or any remedial action in response thereto, or (ii) any
violation of any environmental, health or safety Requirements of Law.
VII. EVENTS OF DEFAULT
In the case of the happening of any of the following events
("Events of Default"):
(a) any representation or warranty made or deemed made in or in
connection with this Agreement or in any report, certificate,
financial statement or other instrument furnished by the Company or
an Eligible Subsidiary pursuant to this Agreement or with the
execution and delivery of the Notes shall prove to have been false or
misleading in any materially adverse respect when made or deemed
made;
(b) default shall be made by the Company or an Eligible
Subsidiary in the payment of the principal of the Notes when and as
the same shall become due and payable, whether at the due date
thereof or by acceleration thereof or otherwise;
(c) default shall be made by the Company or an Eligible
Subsidiary in the payment of interest on the Notes or of the
Commitment Fee or any other amount payable hereunder (other than
principal payments on the Notes) when and as the same shall become
due and payable, whether at the due date thereof or by acceleration
thereof or otherwise, and such default shall continue for five (5)
Business Days;
(d) default shall be made with respect to any Indebtedness
(other than that evidenced by the Notes) of the Company or of any of
its Subsidiaries if (i) the effect of such default is to accelerate
or to permit the holders thereof to accelerate the maturity of such
Indebtedness and (ii) the aggregate amount of such Indebtedness which
is or may be accelerated by reason of such default equals or exceeds
$5,000,000;
(e) default shall be made in the due observance or performance
of any covenant, condition or agreement on the part of the Company or
any of its Subsidiaries to be observed or performed pursuant to the
terms of Article VI;
(f) default shall be made in the due observance or performance
of any term, provision, covenant, condition or agreement to be
observed or performed by the Company or any of its Subsidiaries
pursuant to the terms hereof (other than the covenants described in
Article VI) and, if capable of being remedied, such default shall
continue unremedied for thirty (30) days after the earlier of (i) the
date the Company or the Subsidiary, as the case may be, obtains
knowledge thereof, or (ii) the date written notice thereof shall have
been given to the Company or the Subsidiary, as the case may be, by
the Agent or any Bank;
(g) the Johnson Family shall at any time fail to own stock
having, in the aggregate, votes sufficient to elect at least a
fifty-one percent (51%) majority of the directors of the Company;
(h) the Company or any of the Principal Subsidiaries shall (i)
apply for or consent to the appointment of, or the taking or
possession by, a receiver, custodian, trustee or liquidator of itself
or of all or a substantial part of its property, (ii) admit in
writing its inability, or be generally unable, to pay its debts as
such debts become due, (iii) make a general assignment for the
benefit of its creditors, (iv) commence a voluntary case under the
Bankruptcy Code, (v) file a petition seeking to take advantage as
debtor of any other law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts,
(vi) fail to controvert in a timely or appropriate manner, or
acquiesce in writing to, any petition filed against the Company or a
Principal Subsidiary in an involuntary case under the Bankruptcy
Code, or (vii) take any corporate action (other than action to
controvert any such petition) for the purpose of effecting any of the
foregoing;
(i) a proceeding or case shall be commenced in any court of
competent jurisdiction, seeking (i) the liquidation, reorganization,
dissolution, winding-up, or composition or readjustment of debts, of
the Company or any of the Principal Subsidiaries, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like
of the Company or any of the Principal Subsidiaries or of all or any
substantial part of its or such Subsidiary's assets, or (iii) similar
relief in respect of the Company or any of the Principal Subsidiaries
under any law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts, without the
consent of the Company or such Subsidiary, as the case may be, and
such proceeding or case shall continue undismissed, or an order,
judgment or decree approving or ordering any of the foregoing shall
be entered and continue unstayed and in effect, for a period of
thirty (30) days, or an order for relief against the Company or any
of the Principal Subsidiaries shall be entered in an involuntary case
under the Bankruptcy Code;
(j) final judgment shall be rendered against the Company or any
of the Company's Subsidiaries in an amount (exclusive of amounts
fully covered by insurance) in excess of an aggregate of $5,000,000
and the same shall remain undischarged for a period of thirty (30)
consecutive days during which execution shall not be effectively
stayed; or
(k) (i) a Termination Event occurs with respect to any Plan
and, within thirty (30) days after the reporting of such Termination
Event to the Agent (who shall promptly notify the Banks), the Agent
shall have notified the Company in writing that (i) the Majority
Banks have determined that such Termination Event might be reasonably
expected materially to impair the right of the Company and its ERISA
Affiliates, taken as a whole, to carry on business substantially as
now being or heretofore conducted, or materially adversely affects
the financial condition of the Company and its ERISA Affiliates taken
as a whole, and as a result thereof, an Event of Default exists
hereunder; or (ii) the plan administrator of any Plan applies under
Section 412(d) of the IRC for a waiver of the minimum funding
standards of Section 412(a) of the IRC and the Agent believes that
the substantial business hardship upon which the application for the
waiver is based might be reasonably expected materially to impair the
right of the Company and its ERISA Affiliates, taken as a whole, to
carry on business substantially as now being or heretofore conducted,
or materially adversely affects the financial condition of the
Company and its ERISA Affiliates taken as a whole.
then, and in every such event (other than an event with respect to the
Company or a Principal Subsidiary described in paragraph (h) or (i) above)
and at any time thereafter during the continuance of such event, the Agent
may, or shall at the request of the Majority Banks, by written notice to
the Company, take any or all of the following actions, at the same or
different times: (i) terminate forthwith the Revolving Loan Commitments
and Eurocurrency Commitments, if any, of the Banks hereunder; (ii) declare
the Revolving Loan Notes, the Competitive Bid Notes or the Eurocurrency
Notes, as applicable, and all other amounts payable under this Agreement
to be forthwith due and payable, whereupon the Revolving Loan Notes, the
Eurocurrency Notes, and the Competitive Bid Notes, as applicable, and all
other amounts payable under this Agreement shall become forthwith due and
payable, both as to principal and interest, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived by the Company, anything contained herein or in the Revolving Loan
Notes, the Eurocurrency Notes, and the Competitive Bid Notes to the
contrary notwithstanding; and (iii) pursue any other remedy under this
Agreement or otherwise; and, in any event with respect to the Company or a
Major Subsidiary described in paragraph (h) or (i) above, the Revolving
Loan Commitments, if any, and the Eurocurrency Commitments, if any, of all
of the Banks shall automatically terminate, and the Revolving Loan Notes,
the Eurocurrency Notes, and the Competitive Bid Notes, as applicable, and
all other amounts payable under this Agreement shall automatically become
due and payable, both as to principal and interest, without presentment,
demand, protest or other notice of any kind, all of which are hereby
expressly waived by the Company, anything contained herein or in the
Revolving Loan Notes, the Eurocurrency Notes, or the Competitive Bid
Notes, as applicable, to the contrary notwithstanding.
VIII. THE AGENT
The Banks and the Agent agree among themselves as follows:
SECTION 8.01. Appointment and Authority of Agent. Each of the
Banks, and each subsequent holder of any Note by its acceptance thereof,
irrevocably authorizes the Agent to take all actions on its behalf and to
exercise all powers hereunder as are specifically delegated to the Agent
by the terms hereof, together with all such powers as shall be reasonably
incidental thereto. The relationship between the Agent and the Banks is
and shall be that of agent and principal only and nothing herein shall be
construed to constitute the Agent a trustee for the holder of any Note or
for any holder of a participation therein nor impose on the Agent duties
or obligations other than those expressly provided for herein. Neither
the Agent nor any of its directors, officers, employees or agents shall be
liable to any Bank for any action lawfully taken or omitted to be taken by
it or them hereunder or in connection herewith (a) at the request or with
the approval of the Majority Banks or, where expressly provided for
herein, all the Banks, as the case may be, or (b) in the absence of gross
negligence or willful misconduct.
SECTION 8.02. Agent May Rely on Documents. The Agent shall be
entitled to rely on any communication, instrument or document believed by
it to be genuine and correct and to have been signed or sent by the proper
person or persons, and with respect to all legal matters shall be entitled
to rely on the advice of legal advisors selected by it concerning all
matters relating to this Agreement and the Notes and its duties hereunder
and thereunder, and, subject to the provisions of the last sentence of
Section 8.01, shall not be liable to any of the parties hereto or to any
holder of a Note for the consequence of such reliance.
SECTION 8.03. No Amendment to Agent's Duties Without Consent.
The Agent shall not be bound by any waiver, amendment, supplement or
modification of this Agreement which affects its duties under this
Agreement unless it shall have given its prior written consent as Agent
thereto.
SECTION 8.04. Responsibilities of Agent. The Agent may treat
the payee of any Note as the holder thereof until written notice of the
transfer thereof shall have been received by it. The Agent shall not be
responsible for any recitals, statements, representations or warranties
herein or for the execution, effectiveness, genuineness, validity or
enforceability of this Agreement or the Notes, or be liable for failing to
make any inquiry concerning the performance or observance of any of the
terms, provisions or conditions thereof. The Agent shall not be deemed to
have knowledge of the occurrence of an Event of Default or Default (other
than a failure by the Company to pay when due the principal of or interest
on any Note or the Commitment Fee) unless the Agent shall have received
written notice from a Bank or the Company specifying that an Event of
Default or Default has occurred and describing such Event of Default or
Default. In the event that (a) the Company or any Eligible Subsidiary
fails to pay when due the principal of or interest on any Note or the
Commitment Fee or (b) the Agent receives such notice of the occurrence of
an Event of Default or Default the Agent shall give written notice thereof
to the Banks, and shall take such action with respect to such Event of
Default or Default as it shall be directed in writing to take by the
Majority Banks; provided, however, that, unless and until the Agent shall
have received such directions, the Agent may take such action or refrain
from taking such action with respect to such Event of Default or Default
as it shall deem advisable in the best interests of the Banks.
SECTION 8.05. Indemnification of Agent. Each of the Banks
agrees (which agreement shall survive payment of the Notes) to indemnify
the Agent (to the extent not reimbursed by the Company or any Eligible
Subsidiary), in amounts which are pro rata to their respective Applicable
Percentages from and against any and all losses, claims, damages,
liabilities and expenses which may be imposed on, incurred by or asserted
against the Agent (in its capacity as Agent) in any way related to or
arising out of this Agreement, the Notes or the Loans or any action taken
or omitted by the Agent, except any losses, claims, damages, liabilities
or expenses resulting from the Agent's gross negligence or willful
misconduct.
SECTION 8.06. Agent Shall Have Rights of a Bank. In relation
to its Commitments, its Loans and the Notes evidencing such Loans, the
Agent, in its capacity as a Bank, shall have the same rights, powers and
obligations hereunder as any Bank and may exercise such rights and powers
as though it were not the Agent.
SECTION 8.07. Credit Decision. Each Bank acknowledges that it
has, independently and without reliance upon the Agent or any other Bank,
and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement.
Each Bank also acknowledges that it will independently and without
reliance upon the Agent or any other Bank, 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 any action under this
Agreement. Each Bank agrees that the Agent shall not have any
responsibility for the accuracy or adequacy of any information contained
in any document, or any oral information, supplied to such Bank by the
Company directly or through the Agent.
SECTION 8.08. Successor Agent. The Agent may resign at any
time by giving written notice thereof to the Banks and the Company, and
the Agent may be removed at any time with or without cause by written
notice received by the Agent from the Majority Banks. Upon any such
resignation or removal, the Majority Banks shall have the right to
appoint, on behalf of the Company and the Banks and, provided no Default
then exists, with the prior written consent of the Company, a successor
Agent. If no successor Agent shall have been so appointed by the Majority
Banks 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 Company and the Banks and, provided no
Default then exists, with the prior written consent of the Company, a
successor Agent. 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 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 VIII 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.
IX. AMENDMENTS; WAIVERS; AND REMEDIES
No amendment or waiver of any provision of this Agreement or any
Note, nor consent to any departure by the Company or an Eligible
Subsidiary therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Majority Banks; provided, however,
that unless approved in writing by all the Banks, no such amendment,
waiver or consent shall (a) change the amount or date of payment of the
principal of, or change the rate or extend the time of payment of interest
on, any Revolving Note or Eurocurrency Note, or change the amount or
extend the time of payment of any commitment fee due hereunder, (b)
increase the Revolving Loan Commitments or the Eurocurrency Commitments,
(c) change or affect the provisions of Section 2.06, (d) change or affect
the definition of "Majority Banks," (e) subordinate the Notes in right of
payment to any other indebtedness or obligation whatsoever, (f) waive any
conditions specified in Article IV or (g) change or affect any provision
of Section 10.02, this Article IX, or Section 10.04 or (h) release the
Parent Guaranty. An amendment, waiver or consent which changes the amount
or date of payment of the principal of, or changes the rate or extends the
time of payment of, any Competitive Bid Note shall only require the
consent of the holder thereof. Any such waiver, consent or approval shall
be effective only in the specific instance and for the purpose for which
given. No notice to or demand on the Company or an Eligible Subsidiary in
any case shall entitle the Company or an Eligible Subsidiary to any other
or further notice or demand in the same, similar or other circumstances.
Each holder of any Note outstanding shall be bound by any modification,
waiver or consent authorized by this Article IX, whether or not such Note
shall have been marked to indicate such modification, waiver or consent.
No waiver by the Agent or any Bank of any breach or default of or by the
Company or an Eligible Subsidiary under this Agreement shall be deemed a
waiver of any other previous breach or default or any thereafter
occurring.
X. MISCELLANEOUS
SECTION 10.01. No Discharge. The obligations of the Company
and the Eligible Subsidiaries under this Agreement and under the Notes
shall be absolute and unconditional and shall remain in full force and
effect without regard to, and shall not be released, discharged or in any
way affected by: (a) any exercise or nonexercise of any right, remedy,
power or privilege under or in respect of this Agreement or applicable
law, including, without limitation, any failure to set off or release in
whole or in part by any Bank of any balance of any deposit account or
credit on its books in favor of the Company or any Eligible Subsidiary or
any waiver, consent, extension, indulgence or other action or inaction in
respect of any thereof or (b) any other act or thing or omission or delay
to do any other act or thing which may or might in any manner or to any
extent vary the risk of the Company or any Eligible Subsidiary or would
otherwise operate as a discharge of the Company or any Eligible Subsidiary
as a matter of law.
SECTION 10.02. Sharing of Setoffs. Subject to Section
2.14(a)(ii), each Bank agrees that if it shall, through the exercise of a
right of banker's lien, setoff or counterclaim against the Company or an
Eligible Subsidiary, or through a secured claim the security for which is
a debt owed by such Bank to the Company including, but not limited to, a
secured claim under Section 506 of the Bankruptcy Code or other security
or interest arising from, or in lieu of, such secured claim, received by
such Bank under any applicable bankruptcy, insolvency or other similar
law, obtain payment in respect of any Note held by it as a result of which
the unpaid portion of such Note is proportionately less than the unpaid
portion of the Notes held by each of the other Banks (a) it shall be
deemed to have simultaneously purchased from such other Banks a
participation in the Notes held by such other Banks, so that the aggregate
unpaid principal amount of the Notes held by each Bank shall be in the
same proportion to the aggregate unpaid principal amount of the Notes then
outstanding as the principal amount of the Note held by it prior to such
exercise of banker's lien, setoff or counter-claim or prior to such
receipt of a secured claim, security or interest was to the principal
amount of all the Notes outstanding prior to such exercise of banker's
lien, setoff or counterclaim or prior to such receipt of a secured claim,
security or interest; provided, however, that if any purchase is made
pursuant to this Section 10.02 and the payment giving rise thereto is
thereafter recovered, such purchase shall be rescinded and the purchase
price restored with interest to the extent interest has been recovered by
the Bank purchasing such participation and (b) such other adjustments
shall be made from time to time as shall be equitable to ensure that all
the Banks share such payment pro rata in accordance with their Applicable
Percentages. The Company and each Eligible Subsidiary agrees that any
holder of a participation in any Loan or Note, or any portion thereof,
whether or not acquired pursuant to this Section 10.02, may exercise
rights of payment and set-off with respect to such participation as fully
as if such holder of a participation were the direct creditor of the
Company in the amount of such participation and such holder of a
participation shall be deemed a "Bank" for purposes of this Section 10.02.
SECTION 10.03. Severability. Any provision of this Agreement
which is illegal, invalid or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such illegality,
invalidity or unenforceability without invalidating the remaining
provisions hereof or affecting the legality, validity or enforceability of
such provision in any other jurisdiction.
SECTION 10.04. Successors and Assigns. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall
be deemed to include the successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of the Company, the
Eligible Subsidiaries or the Banks that are contained in this Agreement
shall bind and inure to the benefit of their respective successors and
assigns as if such successors and assigns were original parties hereto.
The Company and the Eligible Subsidiaries may not assign or transfer any
of their rights or obligations hereunder without the prior written consent
of all the Banks, except in connection with a transaction permitted by the
provisions of Section 6.02. Any Bank may assign its rights and delegate
its obligations under this Agreement and further may assign, or sell
participations in, all or any part of any Loan or Loans made by it or any
other interest herein or in its Note to another bank or other entity;
provided, that, no Bank may make any such assignment or delegation (but
may sell such participations) without the prior written consent of the
Company or the Eligible Subsidiary, as the case may be, which consent
shall not be unreasonably withheld. In the case of an assignment or
delegation, (i) each such assignment shall be evidenced by a written
agreement signed by the Company or the Eligible Subsidiary, as the case
may be, the Agent, the assigning Bank (without the requirement that any
other Bank sign such agreement or consent thereto) and the assignee, and
the form and substance of any such agreement (to the extent not provided
below) shall be satisfactory to the Company or the Eligible Subsidiary, as
the case may be and the assigning Bank and the form of such agreement
shall be satisfactory to the Agent; (ii) each such assignment shall be of
a constant, and not a varying, percentage of all of the assigning Bank's
rights and obligations under this Agreement; (iii) the aggregate amount of
the Revolving Loan Commitment or Eurocurrency Commitment of the assigning
Bank being assigned pursuant to each such assignment (if less than all of
the remaining Revolving Loan Commitment or Eurocurrency Commitment of the
assigning Bank) shall in no event be less than $5,000,000 and shall be an
integral multiple of $1,000,000; and (iv) the assignee shall have, to the
extent of such assignment (unless otherwise provided therein), the same
rights and benefits as it would have if it were a Bank hereunder and the
holder of a Note, and the assigning Bank shall, to the extent of such
assignment, relinquish its rights and be released from its obligations
under this Agreement with respect to any rights, obligations, Notes or
Loans so assigned or delegated (and, in the case of an assignment covering
all of the remaining portion of an assigning Bank's rights and obligations
under this Agreement, such assigning Bank shall cease to be a party to
this Agreement). Upon each assignment, the assigning Bank shall pay to
the Agent, for the Agent's sole account, an administrative fee of
$2,500.00 for processing such assignment. In the case of a participation,
the participant shall not have any rights under this Agreement or any Note
other than those rights granted to the Banks in Sections 2.11 through 2.14
hereof (the participant's rights against the assigning Bank in respect of
such participation to be those set forth in the agreement executed by such
Bank in favor of the participant relating thereto). The Banks may furnish
any information concerning the Company and its Subsidiaries in the
possession of the Banks from time to time to assignees and participants
(including prospective assignees and participants); provided that such
Banks shall use their best efforts to ensure that any such information
provided to any such assignee or participant shall be kept confidential by
such assignee or participant.
SECTION 10.05. Governing Law. (a) This Agreement and the Notes
shall be construed in accordance with and governed by the laws of the
State of Illinois and any applicable laws of the United States of America.
The Company and each Eligible Subsidiary (a) irrevocably submits to the
jurisdiction of any Illinois State or Federal court sitting in the City of
Chicago over any suit, action or proceeding arising out of or relating to
this Agreement or its Notes; (b) irrevocably waives, to the fullest extent
permitted by law, any objection which it may have or hereafter have to the
laying of the venue of any such suit, action or proceeding brought in an
inconvenient forum; (c) consents to process being served in any such suit,
action or proceeding upon the Company and each Eligible Subsidiary by the
mailing of a copy thereof by registered or certified mail, postage
prepaid, return receipt requested, to the Company's address specified in
Section 10.08 (or with respect to an Eligible Subsidiary, in its Election
to Participate) or provided therein, to be effective when delivered to the
Company or such Subsidiary (or when delivery thereof is refused); and (d)
agrees that such service (i) shall be deemed in every respect effective
service of process upon it in any such suit, action or proceeding and (ii)
shall, to the fullest extent permitted by law, be taken and held to be
valid personal service upon and personal delivery to it. Nothing in this
Section 10.06 shall affect the right of the Agent or any Bank to serve
process in any manner permitted by law or limit the right of the Agent or
any Bank to bring proceedings against the Company or an Eligible
Subsidiary in the courts of any jurisdiction or jurisdictions.
SECTION 10.06. Currency Indemnity. To the fullest extent
permitted by applicable law, the obligation of the Company and the
Eligible Subsidiaries under this agreement to make payments in an
Alternative Currency in which the Loans or any portion thereof are
outstanding shall not be discharged or satisfied by any tender, or any
recovery pursuant to any judgment, expressed in or converted into any
other currency or any other realization in such currency, whether as
proceeds of set-off, security, guarantee, distributions or otherwise,
except to the extent that such tender, recovery or realization shall
result in the actual receipt by the Bank or Banks entitled thereto of the
full amount of the Alternative Currency due and payable. If the amount in
the Alternative Currency actually received by such a Bank or Banks for any
reason falls short of the full amount of the Alternative Currency due and
payable, the Company or the applicable Eligible Subsidiary shall, as a
separate and independent obligation, pay such additional amounts in the
Alternative Currency as may be necessary to compensate for such shortfall.
This obligation of the Company and the Eligible Subsidiaries shall
continue in force and effect until discharged as provided herein and shall
not be affected by judgment being obtained for any other sum due under
this Agreement. Each Bank's determination of amounts effectively received
by it shall be conclusive absent manifest error.
SECTION 10.07. Headings. The Article and Section headings in
this Agreement are for convenience only and shall not affect the
construction hereof.
SECTION 10.08. Notices. Any notice shall be conclusively
deemed to have been received by a party hereto and to be effective (i) if
sent by regular mail or commercial delivery service, on the day on which
delivered to such party at its address set forth below (or at such other
address as such party shall specify to the other parties hereto in
writing), (ii) if sent by telex, graphic scanning or other telecopy
communications of the sending party, when delivered by such equipment to
the number set forth on the signature pages hereof or (iii) if sent by
registered or certified mail, on the day on which delivered to such party
(or delivery is refused), addressed to such party as follows: (a) if to
the Company, at 1326 Willow Road, Sturtevant, Wisconsin, 53177, Attention:
Carl G. Schmidt; (b) if to any Bank other than First Chicago, at its
Domestic Office, with a copy to any other address set forth on the
signature pages hereof; and (c) if to First Chicago, either as a Bank or
as Agent, at the addresses for notice set forth on the signature pages
hereof.
SECTION 10.09. Survival of Agreement. All covenants made
herein and in the certificates delivered pursuant hereto shall survive the
execution and delivery to the Banks of the Notes evidencing the Loans and
shall continue in full force and effect so long as any Note or any amount
due hereunder is outstanding and unpaid or the Revolving Loan Commitment
of any Bank has not been terminated.
SECTION 10.10. Expenses of Banks. The Company and the Eligible
Subsidiaries, jointly and severally, shall be liable for and shall pay all
reasonable out-of-pocket expenses incurred by the Agent in connection with
the preparation of this Agreement, the Notes and the other agreements and
documents referred to herein or contemplated hereby (whether or not the
transactions contemplated hereby shall be consummated), the preparation of
any amendment, waiver or consent relating to any of the foregoing, its
receiving of legal advice or other consultation regarding the
interpretation of its rights and obligations with respect to any of the
foregoing, the administration or operation of the Loans pursuant hereto
and all reasonable out-of-pocket expenses (including, without limitation,
legal fees and expenses) incurred by the Agent and each Bank in connection
with the enforcement of the rights of the Agent and the Banks in
connection with this Agreement, the Notes and with respect to any action
which may be instituted by any Person (other than a Bank) against the
Agent or the Banks in respect of any of the foregoing or as a result of
any transactions, action or nonaction arising from the foregoing. The
Company further agrees to indemnify the Agent and each Bank, its
directors, officers and employees against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without
limitation, all expenses of litigation or preparation therefor whether or
not the Agent or any Bank is a party thereto) relating to claims by third
parties, which any of them may pay or incur arising out of or relating to
this Agreement, the other Loan Documents, the transactions contemplated
hereby or the direct or indirect application or proposed application of
the proceeds of any Loan hereunder, provided however that no Bank shall be
indemnified for any of the foregoing resulting from its own gross
negligence or wilful misconduct. The obligations of the Company under
this Section shall survive the termination of this Agreement.
SECTION 10.11. Foreign Bank Certifications. Each Bank that is
not created or organized under the laws of the United States of America or
a state or political subdivision thereof shall deliver to the Company (or
an Eligible Subsidiary, if requested) and the Agent within fifteen (15)
days after the date hereof, or if later, the date on which such Bank
becomes a Bank pursuant to Section 10.04 hereof, a true and accurate
certificate executed in duplicate by a duly authorized officer of such
Bank, in a form satisfactory to the Company and the Agent, to the effect
that such Bank is capable under the provisions of an applicable tax treaty
concluded by the United States of America (in which case the certificate
shall be accompanied by two executed copies of Form 1001 of the IRS) or
under Section 1442 of the IRC (in which case the certificate shall be
accompanied by two copies of Form 4224 of the IRS) of receiving payments
of interest hereunder without deduction or withholding of United States
federal income tax. Each Bank further agrees to deliver to the Company
and the Agent from time to time a true and accurate certificate executed
in duplicate by a duly authorized officer of such Bank in a form
satisfactory to the Company 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 Company and the Agent pursuant to this
Section 10.11. Further, to the extent it may lawfully do so, each Bank
which delivers a certificate accompanied by Form 1001 of the IRS covenants
and agrees to deliver to the Company and the Agent within fifteen (15)
days after the date hereof, and every third anniversary of such date
thereafter, on which this Agreement is still in effect, another such
certificate and two accurate and complete original signed copies of Form
1001 (or any successor form or forms required under the IRC or the
applicable regulations promulgated thereunder), and each Bank that
delivers a certificate accompanied by Form 4224 of the IRS covenants and
agrees to deliver to the Company and the Agent within fifteen (15) days
prior to the beginning of each subsequent taxable year of such Bank during
which this Agreement is still in effect, another such certificate and two
accurate and complete original signed copies of IRS Form 4224 (or any
successor form or forms required under the IRC or the applicable
regulations promulgated thereunder). Each such certificate shall certify
as to one of the following:
(i) that such Bank is capable of receiving payments of interest
hereunder without deduction or withholding of United States of
America federal income tax;
(ii) that such Bank is not capable of receiving payments of
interest hereunder without deduction or withholding of United
States of America federal income tax as specified therein but is
capable of recovering the full amount of any such deduction or
withholding from a source other than the Company or Eligible
Subsidiary and will not seek any such recovery from the Company
or Eligible Subsidiary; or
(iii) that, as a result of the adoption of or any change in
any law, treaty, rule, regulation, guideline or determination of
a Governmental Authority or any change in the interpretation or
application thereof by a Governmental Authority after the date
such Bank became a party hereto, such Bank is not capable of
receiving payments of interest hereunder without deduction or
withholding of United States of America federal income tax as
specified therein and that it is not capable of recovering the
full amount of the same from a source other than the Company or
an Eligible Subsidiary.
Each Bank shall promptly furnish to the Company and the Agent
such additional documents as may be reasonably required by the Company, an
Eligible Subsidiary or the Agent to establish any exemption from or
reduction of any taxes required to be deducted or withheld and which may
be obtained without undue expense to such Bank.
XI. GUARANTY
The Company requests the Banks to extend credit or to permit
credit to remain outstanding to the Eligible Subsidiaries under this
Agreement and, in consideration thereof, the Company hereby absolutely and
unconditionally guarantees prompt payment when due, whether at stated
maturity, upon acceleration or otherwise, and at all times thereafter, of
the Subsidiary Obligations incurred by Eligible Subsidiaries.
Company waives notice of the acceptance of this Parent Guaranty
and of the extension or continuation of the Subsidiary Obligations or any
part thereof. Company further waives presentment, protest, notice, demand
or action on delinquency in respect of the Subsidiary Obligations of
Eligible Subsidiaries or any part thereof, including any right to require
the Banks to sue the applicable Eligible Subsidiary or require the Banks
to make demand upon the applicable Eligible Subsidiary for payment, any
other guarantor or any other person obligated with respect to the
Subsidiary Obligations of Eligible Subsidiaries or any part thereof, or
otherwise to enforce payment thereof against any collateral securing such
Subsidiary Obligations or any part thereof and provided further that if at
any time any payment of any portion of such Subsidiary Obligations is
rescinded or must otherwise be restored or returned upon the insolvency,
bankruptcy or reorganization of the Eligible Subsidiary or otherwise,
Company's obligations hereunder with respect to such payment shall be
reinstated at such time as though such payment had not been made.
The validity and enforceability of this Parent Guaranty shall
not be impaired or affected by any of the following: (a) any extension,
modification or renewal of, or indulgence with respect to, or
substitutions for, the Subsidiary Obligations of Eligible Subsidiaries or
any part thereof or any agreement relating thereto at any time; (b) any
failure or omission to enforce any right, power or remedy with respect to
the Subsidiary Obligations of Eligible Subsidiaries or any part thereof or
any agreement relating thereto, or any collateral securing the Subsidiary
Obligations of Eligible Subsidiaries or any part thereof; (c) any waiver
of any right, power or remedy or of any default with respect to the
Subsidiary Obligations of Eligible Subsidiaries or any part thereof or any
agreement relating thereto or with respect to any collateral securing the
Subsidiary Obligations of Eligible Subsidiaries or any part thereof; (d)
any release, surrender, compromise, settlement, waiver, subordination or
modification, with or without consideration, of any collateral securing
the Subsidiary Obligations of Eligible Subsidiaries or any part thereof,
any other guaranties with respect to the Subsidiary Obligations of
Eligible Subsidiaries or any part thereof, or any other obligation of any
person or entity with respect to the Subsidiary Obligations of Eligible
Subsidiaries or any part thereof; (e) the enforceability or validity of
the Subsidiary Obligations of Eligible Subsidiaries or any part thereof or
the genuineness, enforceability or validity of any agreement relating
thereto or with respect to any collateral securing the Subsidiary
Obligations of Eligible Subsidiaries or any part thereof; or (f) the
application of payments received from any source to the payment of
indebtedness of the Company or an Eligible Subsidiary other than the
Subsidiary Obligations of Eligible Subsidiaries, any part thereof or
amounts which are not covered by this Parent Guaranty even though the Bank
might lawfully have elected to apply such payments to any part or all of
the Subsidiary Obligations of Eligible Subsidiaries or to amounts which
are covered by this Guaranty, all whether or not the Company shall have
had notice or knowledge of any act or omission referred to in the
foregoing clauses (a) through (f) of this paragraph. It is agreed that
Company's liability hereunder is several and independent of any other
guaranties or other obligations at any time in effect with respect to the
Subsidiary Obligations or any part thereof and that Company's liability
hereunder may be enforced regardless of the existence, validity,
enforcement or non-enforcement of any such other guaranties or other
obligations.
Credit may be granted or continued under this Agreement from
time to time by the Banks to the Eligible Subsidiaries without notice to
or authorization from Company regardless of the Eligible Subsidiaries'
financial or other condition at the time of any such grant or
continuation. The Bank shall have no obligation to disclose or discuss
with Company its assessment of the financial condition of the Eligible
Subsidiaries.
Until the Subsidiary Obligations are paid in full, the Company
shall not exercise any right of subrogation with respect to payments made
by the Company pursuant to this Parent Guaranty.
XII. COUNTERPARTS.
This Agreement may be executed in counterparts, each of which
shall constitute an original, but all of which, when taken together, shall
constitute but one Agreement.
IN WITNESS WHEREOF, the Company, the Banks and the Agent have
caused this Agreement to be duly executed by their duly authorized
officers and delivered as of the day and year first above written.
JOHNSON WORLDWIDE ASSOCIATES, INC.
By: /s/ Carl G. Schmidt
Title: Senior Vice President & CFO
1326 Willow Road
Sturtevant, WI 53177
Attention: Carl G. Schmidt
Telephone No.: 414-884-1531
Telecopier No.: 414-884-1731
Revolving Loan Eurocurrency
Commitment Commitment
$8,750,000 $8,750,000 THE FIRST NATIONAL BANK OF CHICAGO,
individually and as Agent
By: /s/ Deborah E. Stevens
Title:
Domestic and Eurodollar Offices:
One First National Plaza
Suite 0324
Chicago, Illinois 60670-0324
Attention: Deborah E. Stevens
Telex No.: 4330253
Answerback: FNB CUT
Telephone No.: (312) 732-2532
Telecopier No.: (312) 732-5296
Revolving Loan Eurocurrency
Commitment Commitment
$10,000,000 $10,000,000 FIRSTAR BANK MILWAUKEE, N.A.
By: /s/ F.R. Dengel
Title:
Domestic and Eurodollar Offices:
Firstar Bank Milwaukee, N.A.
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: F. R. Dengel
Telex No.: 191178
Answerback: FIR WIS
Telephone No.: (414) 765-4321
Telecopier No.: (414) 765-5062
Revolving Loan Eurocurrency
Commitment Commitment
$10,000,000 $10,000,000 SOCIETE GENERALE
By: /s/ Susan Hummel
Title:
Societe Generale
181 West Madison St., Suite 3400
Chicago, Illinois 60602
Attention: Susan Hummel
Telex No.: 190130 SGCHI UT
Telephone No.: (312) 578-5157
Telecopier No.: (312) 578-5099
Revolving Loan Eurocurrency
Commitment Commitment
$6,250,000 $6,250,000 NBD BANK,
a Michigan banking corporation
By: /s/ Don Buse
Title:
Domestic and Eurodollar Offices:
NBD Bank
1 NBD Plaza
55 East Euclid
Mount Prospect, Illinois 60056
Attention: Don Buse
Telex No.: ITT 4320060
Answerback: NATION BANK
Telephone No.: (708) 506-7766
Telecopier No.: (708) 506-7799
Revolving Loan Eurocurrency
Commitment Commitment
$5,000,000 $5,000,000 WACHOVIA BANK OF GEORGIA, N.A.
By: /s/ J. Peter Peyton
Title:
Domestic and Eurodollar Offices:
Wachovia Bank of Georgia, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
Attention: J. Peter Peyton
Telex No.:
Answerback:
Telephone No.: (404)-332-5279
Telecopier No.: (404)-332-6898
Revolving Loan Eurocurrency
Commitment Commitment
$5,000,000 $5,000,000 M&I MARSHALL & ILSLEY BANK
By: /s/ Stephen F. Geimer
Title:
Domestic and Eurodollar Offices:
M&I Marshall & Ilsley Bank
770 North Water Street
Milwaukee, WI 53202
Attention: Steve Geimer
Telex No.: 190470
Answerback: MARIL MIL
Telephone No.: (414) 765-7590
Telecopier No.: (414) 765-7625
<PAGE>
EXHIBIT "A"
REVOLVING LOAN NOTE
November 29, 1995
Johnson Worldwide Associates, Inc., a Wisconsin corporation (the
"Company"), promises to pay, on or before the Expiration Date, to the
order of (the "Bank") the aggregate unpaid
principal amount of all Revolving Loans made by the Bank to the Company
pursuant to Section 2.01(a) of the Agreement (as hereinafter defined), in
immediately available funds at the main office of The First National Bank
of Chicago in Chicago, Illinois, as Agent, together with interest on the
unpaid principal amount hereof at the rates and on the dates set forth in
the Agreement.
The Bank shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual
practice, the date and amount of each Revolving Loan and the date and
amount of each principal payment hereunder.
This Revolving Loan Note is one of the Revolving Loan Notes issued
pursuant to, and is entitled to the benefits of, the Revolving Credit
Agreement, dated as of November 29, 1995 (which, as it may be amended or
modified from time to time, is herein called the "Agreement"), among the
Company, certain consolidated Subsidiaries of the Company, the banks party
thereto, including the Bank, and The First National Bank of Chicago, as
Agent, to which Agreement reference is hereby made for a statement of the
terms and conditions under which this Revolving Loan Note may be prepaid
or its maturity date accelerated. Capitalized terms used herein and not
otherwise defined herein are used with the meanings attributed to them in
the Agreement.
JOHNSON WORLDWIDE ASSOCIATES, INC.
By:
Title:
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
REVOLVING LOAN NOTE
OF JOHNSON WORLDWIDE ASSOCIATES, INC.,
DATED NOVEMBER 29, l995
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Loan Period Paid Balance
<PAGE>
EXHIBIT "B"
EUROCURRENCY NOTE
November 29, 1995
[Johnson Worldwide Associates, Inc., a Wisconsin corporation (the
"Company")] [ _________, (the "Eligible Subsidiary")], promises to pay, on
or before the Expiration Date, to the order of
(the "Bank") the aggregate unpaid principal amount of all Eurocurrency
Loans made by the Bank to the [Company][Eligible Subsidiary] pursuant to
Section 2.03(a) of the Agreement (as hereinafter defined), in immediately
available funds at the main office of The First National Bank of Chicago
in Chicago, Illinois, as Agent, together with interest on the unpaid
principal amount hereof at the rates and on the dates set forth in the
Agreement. All payments shall be made in the appropriate Alternative
Currency.
The Bank shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual
practice, the date and amount of each Eurocurrency Loan and the date and
amount of each principal payment hereunder.
This Eurocurrency Note is one of the Eurocurrency Notes issued
pursuant to, and is entitled to the benefits of, the Revolving Credit
Agreement, dated as of November 29, 1995 (which, as it may be amended or
modified from time to time, is herein called the "Agreement"), among [the
Company] [Johnson Worldwide Associates, Inc. (the "Company")], certain
consolidated Subsidiaries of the Company[,including the Eligible
Subsidiary], the banks party thereto, including the Bank, and The First
National Bank of Chicago, as Agent, to which Agreement reference is hereby
made for a statement of the terms and conditions under which this
Eurocurrency Note may be prepaid or its maturity date accelerated.
Capitalized terms used herein and not otherwise defined herein are used
with the meanings attributed to them in the Agreement.
[JOHNSON WORLDWIDE ASSOCIATES, INC.]
[ELIGIBLE SUBSIDIARY]
By:
Title:
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
EUROCURRENCY NOTE
OF [JOHNSON WORLDWIDE ASSOCIATES, INC.] [ELIGIBLE SUBSIDIARY],
DATED NOVEMBER 29, 1995
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Loan Period Paid Balance
<PAGE>
EXHIBIT "C"
COMPETITIVE BID NOTE
November 29, 1995
Johnson Worldwide Associates, Inc., a Wisconsin corporation (the
"Company"), promises to pay, on or before the Expiration Date, to the
order of (the "Bank") the aggregate unpaid
principal amount of all Absolute Rate Loans made by the Bank to the
Company pursuant to Section 2.04 of the Agreement (as hereinafter
defined), in lawful money of the United States in immediately available
funds at the main office of the Bank (or if a Default or Event of Default
shall have occurred and be continuing, at the main office of The First
National Bank of Chicago, in Chicago, Illinois, as Agent) together with
interest, in like money and funds, on the unpaid principal amount hereof
at the rates and on the dates determined in accordance with the Agreement.
The Company shall pay each Absolute Rate Loan in full on the last day of
such Absolute Rate Loan's applicable Interest Period.
The Bank shall, and is hereby authorized to, record on the schedule
attached hereto, or otherwise record in accordance with its usual
practice, the date and amount of each Absolute Rate Loan and the date and
amount of each principal payment hereunder.
This Competitive Bid Note is one of the Competitive Bid Notes issued
pursuant to, and is entitled to the benefits of, the Revolving Credit
Agreement, dated as of November 29, 1995 (which, as it may be amended or
modified from time to time, is herein called the "Agreement"), among the
Company, certain consolidated Subsidiaries of the Company, the banks party
thereto, including the Bank, and The First National Bank of Chicago, as
Agent, and to which Agreement reference is hereby made for a statement of
the terms and conditions under which this Competitive Bid Note may be
prepaid or its maturity date accelerated. Capitalized terms used herein
and not otherwise defined herein are used with the meanings attributed to
them in the Agreement.
JOHNSON WORLDWIDE ASSOCIATES, INC.
By:
Title:
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
COMPETITIVE BID NOTE
OF JOHNSON WORLDWIDE ASSOCIATES, INC.,
DATED NOVEMBER 29, 1995
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Loan Period Paid Balance
<PAGE>
EXHIBIT "D"
COMPETITIVE BID QUOTE REQUEST
(Section 2.04(a))
, 19
To: [specify Bank or Banks]
From: Johnson Worldwide Associates, Inc. ("Company")
Re: Revolving Credit Agreement dated as of November 29, 1995 (as
amended or modified from time to time, the "Agreement") among
the Company, certain consolidated Subsidiaries of the Company,
the Banks party thereto and The First National Bank of
Chicago, as Agent
We hereby give notice pursuant to Section 2.04(a) of the Agreement
that we request Competitive Bid Quotes for the following proposed Absolute
Rate Loan(s):
Borrowing Date: , 19
Principal Amount Interest Period1
$
Upon acceptance by the undersigned of any or all of the Absolute Rate
Loans offered by Banks in response to this request, the undersigned shall
be deemed to affirm as of such date the representations and warranties
made in the Agreement to the extent specified in Article III thereof.
Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to such terms in the Agreement.
JOHNSON WORLDWIDE ASSOCIATES, INC.
By:
Title:
1 At least 1 and up to 270 days, subject to the provisions of the
definitions of Interest Period.
<PAGE>
EXHIBIT "E"
COMPETITIVE BID QUOTE
(Section 2.04(b))
, 19
To: Johnson Worldwide Associates, Inc.
Attn:
Re: Competitive Bid Quote to the Company
In response to your invitation dated , 19 , we hereby
make the following Competitive Bid Quote pursuant to Section 2.04 of the
Agreement (as hereinafter defined) to and on the following terms:
1. Quoting Bank:
2. Person to contact at Quoting Bank:
3. Borrowing Date: , 19 1
4. We hereby offer to make Absolute Rate Loan(s) in the
following principal amounts, for the following Interest
Periods and at the following rates:
Principal Interest Absolute Minimum
Amount2 Period3 Rate4 Amount5
$
1 As specified in the related Competitive Bid Quote Request.
2 Principal amount bid for each Interest Period may not exceed
principal amount requested.
3 At least 1 and up to 270 days, as specified in the related
Competitive Bid Quote Request.
4 Specify rate of interest per annum (rounded to the nearest 1/100 of
1%).
5 Specify minimum amount which the Company may accept (see Section
2.04).
We understand and agree that the offer(s) set forth above,
subject to the satisfaction of the applicable conditions set forth in the
Revolving Credit Agreement dated as of November 29, 1995 (as amended or
modified from time to time, the "Agreement") among the Company, certain
consolidated Subsidiaries of the Company, the Banks party thereto and The
First National Bank of Chicago, as Agent, irrevocably obligates us to make
the Absolute Loan(s) for which any offer(s) are accepted, in whole or in
part. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Agreement.
Very truly yours,
[NAME OF BANK]
Dated: , 19 By:
Authorized Officer
<PAGE>
EXHIBIT "F"
FORM OF ELECTION TO PARTICIPATE
, 19
THE FIRST NATIONAL BANK OF CHICAGO
as Agent (the "Agent") for the Banks referred
to in the Revolving Credit Agreement
dated as of November 29, 1995 (as
the same may be amended or modified from time to time, the
"Agreement") among Johnson Worldwide Associates, Inc.,
certain of its consolidated Subsidiaries, such Banks and the Agent
Dear Sirs:
Capitalized terms used herein and not otherwise defined herein
shall have the meanings attributed to such terms in the Agreement.
1. The undersigned, [name of Eligible Subsidiary], a [jurisdiction
of incorporation] corporation, hereby elects to be a party to and an
Eligible Subsidiary for purposes of the Agreement, effective on and after
the date hereof.
2. The undersigned hereby agrees to perform all obligations of an
Eligible Subsidiary under, and to be bound in all respects by the
applicable terms of, the Agreement (including, without limitation,
Sections 10.05 and 10.06 thereof, as if this Election to Participate were
referred to therein) and agrees that the Banks and Agent shall be entitled
to the benefits of, and shall have all of the rights and remedies against
the undersigned described in, the Agreement, as if the undersigned were
named as an Eligible Subsidiary therein and were a signatory party
thereto.
3. The undersigned represents and warrants that:
a. Concurrently herewith there are being delivered to the
Agent the documents and certificates required to be delivered by the
undersigned as of the date hereof by Section 4.03 of the Agreement.
b. Each of the representations and warranties set forth in
subsections (m) and (n) of Article III of the Agreement is true and
correct on the date hereof with the same effect as if made on and as
of such date.
4. This Election to Participate shall be governed by and construed
in accordance with the internal laws of the State of Illinois.
5. This Election to Participate may be signed in any number of
counterparts, each of which shall constitute an original, with the same
effect as if the signature hereto and thereto were upon the same
instrument.
[NAME OF ELIGIBLE SUBSIDIARY]
By:
Title:
Receipt of the above Election to Participate is hereby acknowledged
on and as of the date set forth above.
THE FIRST NATIONAL BANK OF
CHICAGO, as Agent
By:
Title:
Acknowledged and agreed as of
the date first above written.
JOHNSON WORLDWIDE ASSOCIATES, INC.
By:
Title:
<PAGE>
EXHIBIT "G"
FORM OF ELECTION TO TERMINATE
, 19
THE FIRST NATIONAL BANK OF CHICAGO
as Agent (the "Agent") for the Banks referred
to in the Revolving Credit Agreement
dated as of November 29, 1995 (as
the same may be amended or modified from time to time, the
"Agreement") among Johnson Worldwide Associates, Inc.,
certain of its consolidated Subsidiaries, such Banks and the Agent
Dear Sirs:
Capitalized terms used herein and not otherwise defined herein shall
have the meanings attributed to such terms in the Agreement.
1. The undersigned, [name of Eligible Subsidiary], a
[jurisdiction of incorporation] corporation, hereby elects to terminate
its participation as an Eligible Subsidiary for purposes of the Agreement,
effective as of .
2. The undersigned hereby agrees to pay in full all
outstanding principal, interest, fees and any other amounts payable by it
on .
3. The undersigned acknowledges and agrees that its
obligations under Sections 2.12, 2.13 and 10.10 of the Agreement shall
continue.
4. This Election to Terminate shall be governed by and
construed in accordance with the internal laws of the State of Illinois.
5. This Election to Terminate may be signed in any number of
counterparts, each of which shall constitute an original, with the same
effect as if the signature hereto and thereto were upon the same
instrument.
[NAME OF ELIGIBLE SUBSIDIARY]
By:
Title:
Receipt of the above Election to Terminate is hereby acknowledged on
and as of the date set forth above.
THE FIRST NATIONAL BANK OF
CHICAGO, as Agent
By:
Title:
Acknowledged and agreed as of
the date first above written.
JOHNSON WORLDWIDE ASSOCIATES, INC.
By:
Title:
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF JOHNSON WORLDWIDE ASSOCIATES, INC.
AS OF AND FOR THE THREE MONTHS ENDED DECEMBER 29, 1995 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-27-1996
<PERIOD-START> SEP-30-1995
<PERIOD-END> DEC-29-1995
<CASH> 6,578
<SECURITIES> 0
<RECEIVABLES> 66,339
<ALLOWANCES> 2,707
<INVENTORY> 123,507
<CURRENT-ASSETS> 212,618
<PP&E> 78,844
<DEPRECIATION> 44,805
<TOTAL-ASSETS> 305,901
<CURRENT-LIABILITIES> 93,754
<BONDS> 68,994
0
0
<COMMON> 406
<OTHER-SE> 138,423
<TOTAL-LIABILITY-AND-EQUITY> 305,901
<SALES> 56,405
<TOTAL-REVENUES> 56,405
<CGS> 35,084
<TOTAL-COSTS> 35,084
<OTHER-EXPENSES> 23,640
<LOSS-PROVISION> 182
<INTEREST-EXPENSE> 2,130
<INCOME-PRETAX> (4,631)
<INCOME-TAX> (1,838)
<INCOME-CONTINUING> (2,793)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,793)
<EPS-PRIMARY> (.34)
<EPS-DILUTED> (.34)
</TABLE>
