<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
February 24, 1994
Commission File No. 1-4087
Ply Gem Industries, Inc.
-----------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 1-4087 11-1727150
--------------- --------------------- --------------------
(State or other (Commission file No.) (IRS Employer
jurisdiction of Identification No.)
incorporation)
777 Third Avenue, New York, New York 10017
-------------------------------------------
(Address of Principal Executive Offices)
Registrant's Telephone Number, including area code: (212) 832-1550
<PAGE> 2
Item 1 - 4. Not Applicable.
Item 5. Other Events
On February 24, 1994 the Registrant entered into a Credit
Agreement with a group of Banks and National Westminster Bank U.S.A., as agent,
with respect thereto for credits aggregating $200 Million.
Item 6. Not Applicable
Item 7. Financial Statements, Pro-Forma Financial Information
and Exhibits.
(c) Exhibits
10.1 Credit Agreement dated as of February 24, 1994
among Ply Gem Industries, Inc., a group of Banks, more
particularly set forth in the Credit Agreement, and National
Westminster Bank U.S.A., as agent.
Item 8. Not Applicable
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Dated: March 9, 1994
PLY GEM INDUSTRIES, INC.
By: /s/ Stanford Zeisel
-------------------------------
Secretary
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
10.1 Credit Agreement dated as of February 24, 1994
among Ply Gem Industries, Inc., a group of Banks, more
particularly set forth in the Credit Agreement, and National
Westminster Bank U.S.A., as agent.
<PAGE> 1
PLY GEM INDUSTRIES, INC.
____________________________________
CREDIT AGREEMENT
Dated February 24, 1994
______________________________________
NATIONAL WESTMINSTER BANK USA, as Agent,
and
Continental Bank N.A.,
European American Bank,
LTCB Trust Company
and
NationsBank of North Carolina, National Association,
as Co-Agents
and
THE BANKS SIGNATORY HERETO
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.1 Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.2 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.3 Procedure for Credit Loan Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.4 Swing Line Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(a) Swing Line Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(b) Swing Line Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(c) Procedure for Swing Line Borrowing . . . . . . . . . . . . . . . . . . . . . 30
(d) Refunding of Swing Line Loans . . . . . . . . . . . . . . . . . . . . . . . . 30
(e) Participation in Swing Line Loans . . . . . . . . . . . . . . . . . . . . . . 31
(f) Banks' Obligations Unconditional . . . . . . . . . . . . . . . . . . . . . . 31
2.5 Competitive Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(a) The Competitive Bid Option . . . . . . . . . . . . . . . . . . . . . . . . . 32
(b) Competitive Bid Request . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(c) Invitation for Competitive Bids . . . . . . . . . . . . . . . . . . . . . . . 33
(d) Submission and Contents of Competitive Bids . . . . . . . . . . . . . . . . . 33
(e) Notice to the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
(f) Acceptance and Notice by the Company . . . . . . . . . . . . . . . . . . . . 34
(g) Allocation by the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(h) Notification of Acceptance . . . . . . . . . . . . . . . . . . . . . . . . . 35
(i) Funding of the Competitive Bid Loans . . . . . . . . . . . . . . . . . . . . 35
(j) No Additional Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(k) Reduction of Available Commitments . . . . . . . . . . . . . . . . . . . . . 36
2.6 Termination or Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . 36
2.7 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.8 Optional and Mandatory Prepayments and Commitment Reductions . . . . . . . . . . . . . 36
2.9 Repayment of Credit Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.10 Interest Rates and Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.11 Computation of Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
2.12 Inability to Determine Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . 39
2.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.14 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
2.15 Increased Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
2.16 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
2.17 Maximum Number of Tranches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
2.18 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
2.19 Pro Rata Treatment and Payments; L/C Participations . . . . . . . . . . . . . . . . . 44
2.20 Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
2.21 Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
2.22 Additional L/C Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
2.23 Several Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 3. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
3.1 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
</TABLE>
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3.2 No Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
3.3 Corporate Existence; Compliance with the Law . . . . . . . . . . . . . . . . . . . . . 52
3.4 Corporate Power; Authorization; Enforceable Obligations . . . . . . . . . . . . . . . 53
3.5 No Legal Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
3.6 No Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
3.7 Federal Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
3.8 Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
3.9 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
3.10 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
3.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
3.12 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
3.13 Ownership of Property; Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
3.14 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
3.15 Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
3.16 SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
3.17 Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
3.18 Name Changes, Mergers, Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . 57
3.19 Licenses and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
3.20 Labor Disputes; Collective Bargaining Agreements; Employee Grievances . . . . . . . . 58
3.21 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
3.22 Outstanding Indebtedness for Borrowed Money . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 4. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
4.1 Conditions to Initial Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
(a) Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
(b) Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
(c) Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
(d) Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
(e) Borrowing Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
(f) Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
(g) Related Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
(h) Corporate Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
(i) Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
(j) Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
(k) Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
(l) Good Standings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
4.2 Conditions to All Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . 62
(b) No Default or Event of Default . . . . . . . . . . . . . . . . . . . . . . . 62
(c) No Violations of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
(d) Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
4.3 Conditions to Loans to New Designated Subsidiaries . . . . . . . . . . . . . . . . . . 63
SECTION 5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
5.1 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
5.2 Certificates; Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
5.3 Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
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5.4 Guaranty by Material Operating Subsidiaries . . . . . . . . . . . . . . . . . . . . . 66
5.5 Conduct of Business and Maintenance of Existence . . . . . . . . . . . . . . . . . . . 66
5.6 Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 66
5.7 Inspection of Property; Books and Records; Discussions . . . . . . . . . . . . . . . . 66
5.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
5.9 Copies of Corporate Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
5.10 Pledge of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
5.11 Hazardous Material . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
5.12 Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
6.1 Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
6.2 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
6.3 Limitation on Contingent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 73
6.4 Limitation on Fundamental Changes . . . . . . . . . . . . . . . . . . . . . . . . . . 74
6.5 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
6.6 Limitation on Dividend Restrictions regarding Subsidiaries . . . . . . . . . . . . . . 75
6.7 Prohibition on Investments, Acquisitions, Loans and Advances . . . . . . . . . . . . . 75
6.8 Prohibition on Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . 76
6.9 Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
6.10 Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
6.11 Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
6.12 Current Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
6.13 Working Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
6.14 No Amendment Without Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
6.15 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
6.16 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
6.17 Ownership of Designated Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 78
6.18 Limitation on Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 8. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
8.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
8.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
8.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
8.4 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
8.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
8.6 Non-Reliance on Agent and Other Banks . . . . . . . . . . . . . . . . . . . . . . . . 85
8.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
8.8 Agent in Its Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
8.9 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
8.10 Failure to Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
8.11 Co-Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
SECTION 9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
9.1 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
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9.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
9.3 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
9.4 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . 90
9.5 Payment of Expenses, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
9.6 Binding Effect; No Assignment or Delegation by Company . . . . . . . . . . . . . . . . 91
9.7 Assignments and Participations by Banks; Pledge to Federal Reserve Bank . . . . . . . 91
9.8 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
9.9 Adjustments; Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
9.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
9.11 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
9.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
9.13 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF TRIAL BY JURY . . . . . . . . . . . 97
SCHEDULES
I Existing Letters of Credit
II Liens and Contingent Obligations
III Indebtedness, etc.
IV Subsidiaries
V Secured Creditors
EXHIBITS
A-1 Form of Credit Note
A-2 Form of Designated Subsidiary Acquisition Note
B Form of Swing Line Note
C-1 Form of Competitive Bid Note
C-2 Competitive Bid Request
C-3 Invitation for Competitive Bids
C-4 Competitive Bid
C-5 Competitive Bid Accept/Reject Letter
D-1 Borrowing Certificate
D-2 Borrowing Certificate for Designated Subsidiaries
E Labor Disputes; Collective Bargaining Agreements;
Employee Grievances
F-1 Legal Opinion of Elihu H. Modlin
F-2 Legal Opinion of Winston & Strawn
G Name Changes, Mergers, Acquisitions
H Contingent Liability relating to Post-Retirement Benefit
I Form of Assignment and Acceptance
J Form of Solvency Certificate
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CREDIT AGREEMENT, dated February 24, 1994, among PLY GEM
INDUSTRIES, INC., a Delaware corporation (the "COMPANY");
The Financial Institutions that have executed the signature pages
hereto (individually, a "BANK" and collectively, the "BANKS"); and
NATIONAL WESTMINSTER BANK USA, a national banking association, as
agent for the Banks (in such capacity, together with its successors in such
capacity, the "AGENT").
W I T N E S S E T H :
WHEREAS, the Company has requested that the Banks make revolving
credit loans to the Company and the Designated Subsidiaries in an aggregate
principal amount not to exceed $200,000,000 at any time outstanding, the
proceeds of which shall be used for the purposes specified in subsection 2.18;
and
WHEREAS, the Banks have agreed to make the requested loans on the
terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties to this Agreement hereby agree as
follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the following terms
shall have the following respective meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"ACCOUNT PARTY" shall mean with respect to each L/C, the Company
or any Designated Subsidiary, as the case may be, in its capacity as the Person
for the account of which such L/C is issued.
"AGENT" shall have the meaning ascribed thereto in the preamble
hereto, including its successors in such capacity.
"AFFILIATE" of any Person shall mean (a) any Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with such Person, or (b) any Person who is a
director or officer (i) of such Person, (ii) of any Subsidiary of such Person
or (iii) of any Person described in clause (a) above. For purposes of this
definition, control of a Person shall mean the power, direct or indirect, (i)
to vote 10% or more of the securities having ordinary voting power for the
election of directors of such Person, or (ii) to direct or cause the direction
of the
<PAGE> 7
management and policies of such Person, whether by contract or
otherwise.
"AGREEMENT" shall mean this Credit Agreement, as amended,
supplemented or otherwise modified from time to time.
"APPLICABLE MARGIN" shall mean, for any day for any Type of Loan,
the relevant rate per annum set forth below under such Type:
2
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<TABLE>
<CAPTION>
Prior to the third
anniversary of the Closing Date Thereafter
------------------------------- ----------
If the Fixed Charge Coverage On the portion of On the portion of On the portion of On the portion of
Ratio is: outstanding Loans outstanding Loans outstanding Loans outstanding Loans
and L/Cs less than and L/Cs more than and L/Cs less than and L/Cs more than
or equal to 1/3 of 1/3 of the or equal to 1/3 of 1/3 of the
the Commitments Commitments the Commitments Commitments
<S> <C> <C> <C> <C> <C>
equal to or LIBOR
more than Margin .875% 1.125% 1.125% 1.375%
1.1:1.00 and
less than NWUSA
1.35:1.00 Rate -0- -0- -0- -0-
Margin
equal to or LIBOR
more than Margin .625% .875% .875% 1.125%
1.35:1.00 and NWUSA
less than Rate -0- -0- -0- -0-
1.75:1.00 Margin
equal to or LIBOR
more than 1.75: Margin
1.00 and less .5% .75% .75% 1.00%
than 2.25:1.00
NWUSA
Rate -0- -0- -0- -0-
Margin
equal to or LIBOR .4375% .6875% .4375% .6875%
more than Margin
2.25:1.00
NWUSA
Rate -0- -0- -0- -0-
Margin
</TABLE>
3
<PAGE> 9
The determination of the Applicable Margin pursuant to the table
set forth above shall be made on a quarterly basis based on an examination of
the consolidated financial statements of the Company and its Subsidiaries
delivered pursuant to and in compliance with subsection 5.1. Each change in
the Applicable Margin shall be effective as of the first day of the calendar
month following the date of the Company's financial statements reflecting any
change in the Fixed Charge Coverage Ratio. In the event that financial
statements for the four fiscal quarters most recently completed prior to such
date of determination either: (i) have not been delivered to the Agent in
compliance with subsection 5.1, or (ii) if delivered, do not comply in form or
substance with subsection 5.1, then the Agent may determine, in its reasonable
judgment, the Fixed Charge Coverage Ratio referred to above that would have
been in effect as at such date, and, consequently, the Applicable Margin in
effect for the period commencing on such date.
"APPLICATION" shall have the meaning ascribed thereto in
subsection 2.1(c)(iv).
"ASSET SALE" shall mean any sale or other disposition by the
Company or any of the Subsidiaries (whether in one sale or a series of related
sales) of any business unit or units or any product line or group of product
lines (whether pursuant to a sale of stock or sale of assets).
"ASSIGNMENT AND ACCEPTANCE" shall mean an agreement in the form of
Exhibit I hereto.
"AVAILABLE COMMITMENT" shall mean, as to each Bank, at a
particular time, an amount equal to the difference between (a) the amount of
such Bank's Commitment at such time and (b) the aggregate unpaid principal
amount at such time of (i) all Credit Loans made by such Bank pursuant to
subsection 2.1, (ii) such Bank's Commitment Percentage of Bank L/C Obligations,
(iii) such Bank's Commitment Percentage of Swing Line Loans then outstanding
and (iv) such Bank's Commitment Percentage of the Competitive Bid Loans then
outstanding pursuant to subsection 2.5 (regardless, in the case of clauses
(iii) and (iv) only, of whether such Indebtedness is owing to such Bank);
collectively, as to all the Banks, the "AVAILABLE COMMITMENTS".
"AVAILABLE L/C COMMITMENT" at any date shall mean the lesser of
(a) the difference between the L/C Sublimit and the Specified L/C Obligations
at such date and (b) the Available Commitments.
"BANK" or "BANKS" shall have the meaning ascribed thereto in the
preamble hereto.
4
<PAGE> 10
"BANK L/C OBLIGATIONS" at any date shall mean the sum of (a) the
aggregate undrawn amount at such date of all L/Cs issued by NWUSA pursuant to
this Agreement, plus (b) the amount of all Unpaid Drawings relating to such
L/Cs.
"BUSINESS DAY" shall mean a day other than a Saturday, Sunday or
other day on which commercial banks in New York, New York are authorized or
required by law to close.
"BUSINESS OF THE COMPANY" shall mean the businesses described in
the Company's Form 10-K for the year ended December 31, 1992 and the Company's
1992 Annual Report to Stockholders, and other businesses related to, or growing
out of, such businesses.
"CAPITAL EXPENDITURES" of the Company during any period shall mean
the amount of additions to property, plant and equipment for such period as
shown on the consolidated financial statements of the Company for such period
prepared in accordance with GAAP, net of Financing Leases.
"CASH EQUIVALENTS" shall mean (a) securities with maturities of
one year or less from the date of acquisition issued or directly and fully
guaranteed or insured by the United States Government or any agency or
instrumentality thereof, (b) certificates of deposit, acceptances and
Eurodollar time deposits with maturities of one year or less from the date of
acquisition and overnight or demand bank deposits of any Bank and certificates
of deposit with maturities of one year or less from the date of acquisition and
overnight or demand bank deposits of any other commercial bank having capital
and surplus in excess of $500,000,000, the holding company of which has a
commercial paper rating meeting the requirements specified in clause (d) below,
(c) repurchase obligations with a term of not more than 7 days for underlying
securities of the types described in clauses (a) and (b) entered into with any
bank meeting the qualifications specified in clause (b) above, and (d)
commercial paper of a domestic issuer rated at least A-2 or the equivalent
thereof by Standard & Poor's Corporation or P-2 or the equivalent thereof by
Moody's Investors Service, Inc.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Section 9601, et seq.
"CHANGE OF CONTROL" shall mean (i) any person or group of related
persons, excluding Permitted Shareholders, gains beneficial ownership of a
majority in voting interest of the outstanding voting stock of the Company or
has caused to be elected a majority of the Board of Directors of the Company
against the wishes of a majority of the voting interest held by Permitted
Shareholders; or (ii) all or substantially all of the assets of the Company are
sold or liquidated. As used herein,
5
<PAGE> 11
"Permitted Shareholders" means (a) Jeffrey S. Silverman, (b) any of his
descendants or legatees, (c) any executor, personal representative or spouse of
Jeffrey S. Silverman, or any of his descendants, (d) any person who was a
director or employee of the Company or any Subsidiary on the date hereof, (e)
any corporation, trust or other entity holding voting stock of the Company as
to which one or more of the persons identified in the foregoing clauses (a)
through (d) have sole voting or investment power, (f) any trust as to which
persons so identified hold at least 85% of the beneficial interest in the
income and principal of the trust disregarding the interests of contingent
remainderman, and (g) any employee stock ownership plan for the benefit of
employees of the Company or its Subsidiaries.
"CLOSING DATE" shall mean the date of this Agreement.
"CO-AGENT" shall mean each of the following Banks: Continental
Bank N.A., European American Bank, LTCB Trust Company, and NationsBank of North
Carolina, National Association.
"CODE" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
"COMMITMENT" shall mean, as to any Bank, its obligation to make
Credit Loans pursuant to subsection 2.1 and participate in L/Cs and Swing Line
Loans in an aggregate amount not to exceed at any one time outstanding the
amount set forth on such Bank's signature page hereto under the heading
"Commitment", as such amount may be reduced from time to time pursuant to
subsections 2.6 and 2.8; collectively, as to all Banks, the "COMMITMENTS".
"COMMITMENT PERCENTAGE" as to any Bank, shall mean the percentage
set forth on such Bank's signature page under the heading "Commitment
Percentage"; provided, however, that for purposes of determining the amount of
a Bank's Loans, Swing Line Loans shall be deemed to be held not by NWUSA but
rather each Bank shall be deemed to hold the amount of Swing Line Loans equal
to its Commitment Percentage of the Swing Line Loans then outstanding.
"COMMITMENT PERIOD" shall mean the period commencing on the date
of this Agreement and extending to, but not including, the Termination Date or
such earlier date as the Commitments shall terminate as provided herein.
"COMMONLY CONTROLLED ENTITY" shall mean an entity, whether or not
incorporated, which is under common control with the Company within the meaning
of Section 4001(a)(14) of ERISA or Code Section 414(m) or 414(o).
"COMPANY" shall have the meaning ascribed thereto in the preamble
hereto.
6
<PAGE> 12
"COMPANY PLEDGE AGREEMENT" shall have the meaning ascribed thereto
in subsection 2.21(b).
"COMPETITIVE BID" shall mean an offer by a Bank to make a
Competitive Bid Loan pursuant to subsection 2.5 in the form of Exhibit C-4.
"COMPETITIVE BID ACCEPT/REJECT LETTER" shall mean a notification
made by the Company pursuant to subsection 2.5 in the form of Exhibit C-5.
"COMPETITIVE BID BORROWING" shall mean a borrowing consisting of a
Competitive Bid Loan or concurrent Competitive Bid Loans from the Bank or Banks
whose Competitive Bids for such borrowing have been accepted by the Company or
a Designated Subsidiary under the bidding procedure described in subsection
2.5.
"COMPETITIVE BID LOANS" shall mean any Loan made by a Bank
pursuant to the bidding procedure described in subsection 2.5 and bearing
interest at a rate determined by a reference to the Eurodollar Rate specified
by the Bank making such Loan in its Competitive Bid and maturing on a date
specified by the Company in its Invitation for Competitive Bids not less than
30 not more than 180 days from the date such Loan is made, or such longer
maturity as the Bank making such Loan, following reasonable consultation
between the Company and the Agent with respect to the Competitive Bid Request
relating thereto, and the Company, shall agree.
"COMPETITIVE BID NOTE" shall have the meaning ascribed thereto in
subsection 2.5(a).
"COMPETITIVE BID RATE" shall mean as to any Competitive Bid made
by a Bank pursuant to subsection 2.5(d), the rate offered by the Bank making
such Competitive Bid.
"COMPETITIVE BID REQUEST" shall mean a request made pursuant to
subsection 2.5(b) in the form of Exhibit C-2.
"CONSOLIDATED CURRENT ASSETS" shall mean, at any date, the amount
which, in conformity with GAAP, would be set forth opposite the caption "total
current assets" (or any like caption) on a consolidated balance sheet of the
Company and its consolidated Subsidiaries as at such date.
"CONSOLIDATED CURRENT LIABILITIES" shall mean, at any date, the
amount which, in conformity with GAAP, would be set forth opposite the caption
"total current liabilities" (or any like caption) on a consolidated balance
sheet of the Company and its consolidated Subsidiaries as at such date;
provided, however, that the Loans shall at all times be excluded from the
definition of Consolidated Current Liabilities.
7
<PAGE> 13
"CONSOLIDATED EBIT" shall mean, for any period, the sum of (a)
Consolidated Net Income for such period, plus all taxes based upon income
deducted in determining such Consolidated Net Income, but excluding all
extraordinary items and the following unusual items: (i) gain or loss arising
from the sale, abandonment or other disposition of any property or asset
outside of the ordinary course of business or realized on the disposition of a
segment of a business; (ii) gain or loss resulting from any extinguishments of
debt; (iii) gain or loss resulting from a casualty, including but not limited
to fire, earthquake or hurricane; (iv) loss resulting from write-off of
intangible assets; (v) gain arising from the write-up in the book value of any
asset; (vi) provisions for plant closings and realignment of operations or
restructuring costs; (vii) cumulative effects of changes in accounting
principles; (viii) losses from expropriation or condemnation; and (ix) gain or
loss arising from a change from FIFO to LIFO inventory accounting, plus (b), to
the extent deducted in the computation of Consolidated Net Income, Consolidated
Interest Expense and consolidated amortization of Debt Discount and of expenses
incurred in connection with the incurrence of Indebtedness for such period.
"CONSOLIDATED INTANGIBLES" shall mean, at a particular date, all
assets of the Company and its Subsidiaries, determined on a consolidated basis
at such date, that would be classified as intangible assets in accordance with
GAAP.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period, the
aggregate amount of all interest charges paid or accrued during such period
(including imputed interest on obligations consisting of Financing Leases but
excluding amortization of Debt Discount and of expenses incurred in connection
with the incurrence of Indebtedness) on Indebtedness of the Company and its
consolidated Subsidiaries, determined on a consolidated basis, net of interest
income.
"CONSOLIDATED NET INCOME" shall mean, for any period, the amount
which, in conformity with GAAP, would be set opposite the caption "net income"
(or any like caption) on a consolidated statement of income and retained
earnings of the Company and its consolidated Subsidiaries for such period.
"CONSOLIDATED NET WORTH" shall mean, at a particular date, all
amounts which would, in conformity with GAAP, be included under stockholders'
equity on a consolidated balance sheet of the Company and its consolidated
Subsidiaries at such date, excluding, however, any write-up in assets to the
extent resulting in an increase in stockholders' equity after September 30,
1993; provided, however, that in connection with the conversion of the
Subordinated Indebtedness created pursuant to the Indenture, there shall be
added to Consolidated Net Worth an amount not in excess of $2,500,000 equal to
amounts expended by the Company in connection therewith (including, without
8
<PAGE> 14
limitation, amounts paid to redeem such Indebtedness or to cause others to
purchase such Indebtedness, and fees and expenses incurred in connection with
such conversion).
"CONSOLIDATED TANGIBLE NET WORTH" shall mean, at a particular
date, the excess, if any, of Consolidated Net Worth over Consolidated
Intangibles as at such date.
"CONSOLIDATED WORKING CAPITAL" shall mean, at a particular date,
the excess, if any, of Consolidated Current Assets over Consolidated Current
Liabilities at such date.
"CONTINGENT OBLIGATION" as to any Person shall mean any obligation
of such Person guaranteeing or in effect guaranteeing any Indebtedness, leases,
dividends or other contractual obligations ("PRIMARY OBLIGATIONS") of any other
Person (the "PRIMARY OBLIGOR") in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person, whether or not
contingent, (a) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (b) to advance or supply
funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (c) to purchase
property, securities or services primarily for the purpose of assuring the
owner of any such primary obligation of the ability of the primary obligor to
make payment of such primary obligation or (d) otherwise to assure or hold
harmless the owner of such primary obligation against loss in respect thereof;
provided, however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
as determined by such Person in good faith.
"CONTRACTUAL OBLIGATION" of any Person shall mean any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"CREDIT LOANS" shall have the meaning ascribed to such term in
subsection 2.1(a).
"CREDIT NOTES" shall have the meaning ascribed to such term in
subsection 2.2; individually, a "Credit Note".
"DEBT DISCOUNT" shall mean debt discount with respect to
Subordinated Indebtedness permitted by the provisions hereof.
9
<PAGE> 15
"DEFAULT" shall mean any of the events specified in Section 7,
whether or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"DESIGNATED SUBSIDIARY" shall mean, initially, each of the
following Subsidiaries: Sagebrush Sales, Inc., a New Mexico corporation; SNE
Enterprises, Inc., a Delaware corporation; Variform, Inc., a Missouri
corporation; Great Lakes Window, Inc., an Ohio corporation; Studley Products,
Inc., a New York corporation; and Goldenberg Group, Inc., a California
corporation. Subject to the reasonable approval of the Agent and all of the
Banks with respect to the financial condition and maximum borrowing limit of a
Subsidiary, the Company may at any time designate as a Designated Subsidiary
any wholly-owned Subsidiary not then a Designated Subsidiary by notice to the
Agent, provided that the Company contemporaneously delivers to the Agent a
Solvency Certificate with respect to that Subsidiary and a pledge of its
outstanding capital stock pursuant to the Stock Security Agreement or Company
Pledge Agreement, whichever is in effect. Each Designated Subsidiary shall be
a wholly-owned Subsidiary of the Company so long as it is a Designated
Subsidiary. The Company may at any time remove any Subsidiary from the list of
Designated Subsidiaries by notice to the Agent, effective, however, only upon
payment in full of any Obligations owed to the Agent and the Banks hereunder by
such Designated Subsidiary and the expiration or other termination of any L/C
with respect to which the Designated Subsidiary is the Account Party. Any
representation, warranty or covenant in this Agreement applicable at any time
to the Designated Subsidiaries shall be deemed applicable to those Subsidiaries
which, at such time, are Designated Subsidiaries as defined herein.
"DESIGNATED SUBSIDIARY ACQUISITION NOTE(S)" shall have the meaning
ascribed thereto in subsection 2.2.
"DESIGNATED SUBSIDIARY BORROWING LIMIT" shall mean the following
amounts for the indicated Subsidiaries:
<TABLE>
<CAPTION>
Designated Subsidiaries Borrowing Limit
----------------------- ---------------
<S> <C>
Sagebrush Sales, Inc. $ 6,000,000
SNE Enterprises, Inc. $45,000,000
Variform, Inc. $25,000,000
Great Lakes Window, Inc. $30,000,000
Studley Products, Inc. $ 9,500,000
Goldenberg Group, Inc. $14,500,000
</TABLE>
"DISPOSAL" shall mean the discharge, deposit, injection, dumping,
spilling, leaking, or placing of any hazardous materials into or on any land or
water so that such hazardous materials or constituent thereof may enter the
10
<PAGE> 16
environment or be emitted into the air or discharged into any waters, including
ground waters.
"DOLLARS" and "$" shall mean dollars in lawful currency of the
United States of America.
"DOMESTIC LENDING OFFICE" shall mean, initially, the office of
each Bank designated as such on its signature page hereto; thereafter, such
other office of such Bank, if any, which shall be making or maintaining Loans.
"DRAWING FEE" shall have the meaning ascribed thereto in
subsection 2.1(c)(v).
"ELIGIBLE ASSIGNEE" shall mean (i) any Bank and any entity
controlled by or under common control with such Bank and (ii) a commercial bank
having a combined capital and surplus of at least $500,000,000, in either case
which does not, either directly or indirectly, engage in business competitive
with the business of the Company or any of its Subsidiaries and to which the
Company and the Agent shall have consented, such consent not to be unreasonably
withheld.
"ELIGIBLE PARTICIPANT" shall mean (i) any entity controlled by or
under common control with any Bank and (ii) a commercial bank having a combined
capital and surplus of at least $200,000,000, in either case, which does not,
either directly or indirectly, engage in business competitive with the business
of the Company or any of its Subsidiaries.
"ENVIRONMENTAL LAWS AND REGULATIONS" shall mean all federal,
state and local, environmental, health and safety laws, regulations,
ordinances, orders, judgments and decrees applicable to the Company or any
Subsidiary, or any of their respective assets or properties.
"ENVIRONMENTAL LIABILITY" shall mean any liability under any
applicable Environmental Laws and Regulations for any disposal, release or
threatened release of a hazardous substance, pollutant or contaminant as those
terms are defined under CERCLA and any liability which would require a removal,
remedial or response action, as those terms are defined under CERCLA, by any
Person or any environmental regulatory body having jurisdiction over the
Company or any other Subsidiary, and/or any liability arising under any
Environmental Laws and Regulations for the Company's or any other Subsidiary's
failure to comply with such laws and regulations including, without limitation,
the failure to comply with or obtain any applicable environmental permit.
"ENVIRONMENTAL PROCEEDING" shall mean any judgment, action or
proceeding pending before any court or governmental authority, with respect to
the Company or any Subsidiary and
11
<PAGE> 17
arising under or relating to any Environmental Laws and Regulations.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"EUROCURRENCY RESERVE REQUIREMENTS" for any day after the Closing
Date as applied to a Eurodollar Loan, shall mean the aggregate (without
duplication) of the rates (expressed as a decimal) of reserve requirements in
effect on such day (including, without limitation, basic, supplemental,
marginal and emergency reserves under any regulations of the Board of Governors
of the Federal Reserve System or other Governmental Authority having
jurisdiction with respect thereto), dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of such Board) maintained by a member bank of such
System. The Banks confirm to the Company and the Designated Subsidiaries that
no Eurocurrency Reserve Requirements currently exist.
"EURODOLLAR BASE RATE" for any day during the Interest Period for
a Eurodollar Loan, shall mean the rate per annum equal to the arithmetic
average (rounded upward, if necessary to the nearest 1/100th of one percent) of
the respective rates notified to the Agent by each of the Reference Banks as
the rate at which its Eurodollar Lending Office is offered Dollar deposits two
Working Days prior to the beginning of such Interest Period in the London
interbank eurodollar market where the foreign currency and exchange operations
or eurodollar funding operations of such Eurodollar Lending Office are
customarily conducted at or about 10:00 A.M. (New York City time), for delivery
on the first day of such Interest Period for the number of days comprised
therein and in an amount approximately equal to the amount of the Eurodollar
Loan of such Reference Bank outstanding during such Interest Period.
"EURODOLLAR LENDING OFFICE" shall mean, with respect to each Bank,
initially, the office of such Bank designated as such on its signature page
hereto; thereafter, such other office of such Bank, if any, which shall be
making or maintaining Eurodollar Loans.
"EURODOLLAR LOANS" shall mean Loans hereunder at such time as they
are made and/or are being maintained at a rate of interest based upon the
Eurodollar Rate; provided, however, that Competitive Bid Loans shall not
constitute Eurodollar Loans.
"EURODOLLAR RATE" shall mean, for any day during the Interest
Period for a Eurodollar Loan, the rate per annum (rounded upward to the nearest
1/100th of one percent) equal to the following:
12
<PAGE> 18
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"EVENT OF DEFAULT" shall mean any of the events specified in
Section 7, provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"EXISTING LETTERS OF CREDIT" shall mean those letters of credit
listed on Schedule I other than the Fifth Third Letters of Credit as to which
Great Lakes Window, Inc. is the account party.
"EXISTING PLEDGED SUBSIDIARIES" shall mean Goldenberg Group, Inc.
(formerly known as Goldenberg Plywood & Lumber Co., Inc.), Allied Plywood
Corporation, Great Lakes Window, Inc. and SNE Enterprises, Inc.
"FACILITY FEE" shall mean at any time of determination a fee equal
to the annual fee percentage indicated below multiplied by the Commitments:
<TABLE>
<CAPTION>
If the Fixed Charge Annual Fee
Coverage Ratio is: Percentage
-------------------- ----------
<S> <C>
equal to or more than 1.1:1.0
and less than 1.35:1.0 .4375%
equal to or more than 1.35:1.0
and less than 1.75:1.0 .375%
equal to or more than 1.75:1
and less than 2.25:1.0 .375%
equal to or more than 2.25:1.0 .3125%
</TABLE>
The determination of the applicable fee pursuant to the table set
forth above shall be made on a quarterly basis based on an examination of the
consolidated financial statements of the Company and its Subsidiaries delivered
pursuant to and in compliance with subsection 5.1. Each change in the Facility
Fee shall be effective as of the first day of the calendar month following the
date of the Company's financial statements reflecting any change in the Fixed
Charge Coverage Ratio. In the event that financial statements for the four
fiscal quarters most recently completed prior to such date of determination
either: (i) have not been delivered to the Agent in compliance with subsection
5.1, or (ii) if delivered, do not comply in form or substance with subsection
5.1, then the Agent may determine, in its reasonable judgment, the Fixed Charge
Coverage Ratio referred to above that would have been in effect as at such
date, and,
13
<PAGE> 19
consequently, the Facility Fee in effect for the period commencing on such
date.
"FACING FEE" shall mean a fee payable to NWUSA as the issuer of
each stand-by L/C pursuant hereto at the rate of one- eighth of one (1/8%)
percent per annum of the stated amount of such letter of credit, payable
quarterly in advance.
"FEE LETTER" shall mean the letter agreement between the Agent and
the Company dated December 23, 1993.
"FIFTH THIRD LETTERS OF CREDIT" shall mean the existing letters
of credit issued by Fifth Third Bank as to which the Company or Great Lakes
Window, Inc. is the account party.
"FINANCING LEASE(S)" shall mean (a) any lease of property, real or
personal, the then present value of the minimum rental commitment of which
should, in accordance with GAAP, be capitalized on a balance sheet of the
lessee, and (b) any other such lease the obligations under which are
capitalized on a consolidated balance sheet of the Company and its
Subsidiaries.
"FIXED CHARGE COVERAGE RATIO" shall mean the ratio calculated as
of the last day of any fiscal quarter of (a) the aggregate of Consolidated EBIT
for each of the immediately preceding four fiscal quarters (including the
fiscal quarter then ended) plus rental obligations payable pursuant to any
Financing Lease (except to the extent that such rental expense is included in
Consolidated Interest Expense) and any other lease of real or personal property
for each of such quarters to (b) the aggregate of Consolidated Interest Expense
for each of the immediately preceding four fiscal quarters (including the
fiscal quarter then ended) plus rental obligations payable pursuant to any
Financing Lease (except to the extent that such rental expense is included in
Consolidated Interest Expense) and any other lease of real or personal property
for each of such quarters.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect and applied in the Company's certified
financial statements as at December 31, 1993.
"GOVERNMENTAL AUTHORITY" shall mean any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"GUARANTOR(S)" shall have the meaning ascribed thereto in
subsection 2.20 hereof.
"GUARANTY(IES)" shall have the meaning ascribed thereto in
subsection 2.20 hereof.
14
<PAGE> 20
"HAZARDOUS MATERIALS" shall mean any toxic chemical, hazardous
substances, contaminants or pollutants, medical wastes, infectious wastes, or
hazardous wastes.
"HAZARDOUS SUBSTANCE" shall have the same meaning as set forth in
Section 101(14) of the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601(14) or state or local law.
"HAZARDOUS WASTE" shall have the same meaning as set forth by the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6903(5), and the
Environmental Protection Agency's implementing regulations, or state or local
law.
"INDEBTEDNESS" of a Person, at a particular date, shall mean the
sum (without duplication) at such date of (a) indebtedness of such Person for
borrowed money or evidenced by notes, bonds, debentures or like instruments,
(b) indebtedness of such Person for the deferred purchase price of property or
services, except (i) accounts payable and accrued expenses arising in the
ordinary course of business, (ii) obligations incurred in connection with
additions to property, plant or equipment which are deferred for no more than
100 days after the later of the acquisition or completion of installation of
such additions, (iii) other obligations (not including taxes) which are
deferred for no more than 100 days after the date on which they would first be
reflected as liabilities on a balance sheet of such Person and (iv) obligations
to pay for services of officers, directors or employees of the Company or any
Subsidiary, (c) obligations of such Person under any Financing Lease and (d)
indebtedness of such Person arising under acceptance facilities. Without
limitation, Indebtedness shall not include undrawn letters of credit, but shall
include unreimbursed draws on letters of credit.
"INDENTURE" shall mean the indenture, dated as of October 1, 1988,
between the Company and Bank of Montreal Trust Company, as trustee, as the same
shall be amended, supplemented or otherwise modified from time to time.
"INSOLVENCY" or "INSOLVENT", as to any Multiemployer Plan, shall
have the respective meanings assigned to such terms in Section 4245 of ERISA.
"INTEREST PAYMENT DATE" shall mean (a) as to any NWUSA Rate Loan,
the earlier of (i) the date on which such Loan is paid, refinanced or
converted, and (ii) the date which is thirty (30) days from the date such NWUSA
Rate Loan is made, (b) as to any Eurodollar Loan and any Competitive Bid Loan
in respect of which the Company has selected an Interest Period of one, two or
three months, the last day of such Interest Period, and (c) as to any
Eurodollar Loan and any Competitive Bid Loan in respect of which the Company
has selected a longer Interest Period than the
15
<PAGE> 21
periods described in clause (b) above, each date which is three months from the
first day of such Interest Period.
"INTEREST PERIOD" shall mean (a) with respect to any Eurodollar
Loan, the period commencing on the date of the making of such Eurodollar Loan
and ending one, two, three or six months thereafter as selected by the Company
or the Designated Subsidiary, as applicable, in its notice of borrowing as
provided in subsection 2.3;
(b) with respect to Competitive Bid Loans, the period commencing
on the date of the making of such Competitive Bid Loan and ending on the date
designated by the Company in its notice of borrowing as provided in subsection
2.5; and
(c) with respect to any NWUSA Rate Loan, the period commencing on
the date of the making of such Loan and ending one day thereafter;
provided that, all of the foregoing provisions relating to Interest Periods are
subject to the following:
(A) if the Interest Period in respect of any Eurodollar Loan or
any Competitive Bid Loan would otherwise end on a day which is not a Working
Day, that Interest Period shall be extended to the next succeeding Working Day
unless the result of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period shall end on the
immediately preceding Working Day;
(B) if the Interest Period pertaining to a NWUSA Rate Loan would
otherwise end on a day which is not a Business Day, such Interest Period shall
be extended to the next succeeding Business Day;
(C) any Interest Period pertaining to a Loan that would otherwise
extend beyond the Termination Date shall end on the Termination Date; and
(D) any Interest Period in respect of a Eurodollar Loan or any
Competitive Bid Loan that begins on the last Working Day of a calendar month
(or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Working Day of a calendar month; and
(E) with respect to Eurodollar Loans, the number of Tranches in
effect at the same time shall not be in excess of the Tranche Limit.
In the event that the Company or the Designated Subsidiary, as
applicable, fails to select the duration of an Interest Period for any Loan
within the time period and otherwise as provided in
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<PAGE> 22
subsection 2.3, such Loan will be automatically converted into a NWUSA Rate
Loan on the last day of the preceding Interest Period for such Loan.
"INVITATION FOR COMPETITIVE BIDS" shall mean an invitation by the
Company or a Designated Subsidiary, as applicable, pursuant to subsection
2.5(c) in the form of Exhibit C-3.
"ISSUANCE FEE" shall mean at any time of determination a fee at an
annual rate equal to the percentage of the undrawn amount of each stand-by L/C
issued by NWUSA hereunder set forth below opposite the ratios set forth below:
<TABLE>
<CAPTION>
ANNUAL FEE PRIOR ANNUAL
TO THE THIRD FEE
IF THE FIXED CHARGE ANNIVERSARY OF THERE
COVERAGE RATIO IS: THE CLOSING AFTER
- -------------------- ---------------- ------
<S> <C> <C>
equal to or more than 1.1:1.0
and less than 1.35:1.0 .875% 1.125%
equal to or more than 1.35:1.0
and less than 1.75:1.0 .625% .875%
equal to or more than 1.75:1.0
and less than 2.25:1.0 .5% .75%
equal to or more than 2.25:1.0 .4375% .4375%
</TABLE>
The determination of the applicable fee pursuant to the table set
forth above shall be made on a quarterly basis based on an examination of the
consolidated financial statements of the Company and its Subsidiaries delivered
pursuant to and in compliance with subsection 5.1. Each change in the Issuance
Fee shall be effective as of the first day of the calendar month following the
date of the Company's financial statements reflecting any change in the Fixed
Charge Coverage Ratio. In the event that financial statements for the four
fiscal quarters most recently completed prior to such date of determination
either: (i) have not been delivered to the Agent in compliance with subsection
5.1, or (ii) if delivered, do not comply in form or substance with subsection
5.1, then the Agent may determine, in its reasonable judgment, the Fixed Charge
Coverage Ratio referred to above that would have been in effect as at such
date, and, consequently, the Issuance Fee in effect for the period commencing
on such date.
"L/CS" shall have the meaning ascribed thereto in subsection
2.1(c)(i).
"L/C PARTICIPANT" shall have the meaning ascribed thereto in
subsection 2.19(c).
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<PAGE> 23
"L/C SUBLIMIT" shall mean $50,000,000.
"LEVERAGE RATIO" shall have the meaning ascribed thereto in
subsection 6.10.
"LIEN" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment or deposit by way of security, encumbrance, lien
(statutory or other), or preference, priority or other security interest or
security agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any Financing Lease and the filing of any financing statement under
the Uniform Commercial Code or comparable law of any jurisdiction).
"LOANS" shall be a collective reference to the Credit Loans, the
Swing Line Loans and the Competitive Bid Loans.
"MATERIAL OPERATING SUBSIDIARY" shall mean each Designated
Subsidiary and any Subsidiary of the Company which conducts business operations
and, in the judgment of the Required Banks, is material to the operations of
the business of the Company and its Subsidiaries, taken as a whole. Except for
Subsidiaries explicitly deemed in this Agreement to be Material Operating
Subsidiaries, a Subsidiary will become a Material Operating Subsidiary upon
receipt by the Company of notice from the Agent to the effect that the Required
Banks have made the aforesaid judgment. In addition, the Company may at any
time designate a Subsidiary to be a Material Operating Subsidiary by delivering
to the Agent a Guaranty from such Subsidiary and a pledge of the stock of such
Subsidiary owned by the Company or any wholly-owned Subsidiary.
"MULTIEMPLOYER PLAN" shall mean a Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"NET PROCEEDS" shall mean the aggregate cash proceeds received by
the Company, or any Subsidiary of the Company in respect of any Asset Sale
whether at the time of any Asset Sale or at any time thereafter (and if any
deferred payment obligation is evidenced by any note or other obligation of the
purchaser or any third party, then any document(s) evidencing such obligation
shall be pledged by the Company or the Subsidiary involved to the Agent for the
benefit of the Banks pursuant to a pledge agreement similar to the Company
Pledge Agreement but only as collateral for the obligation to prepay pursuant
to subsection 2.8(d) with respect to the Asset Sale to which such document(s)
relate (but subject to release if any such document is sold by the Company or
the Subsidiary involved so long as the proceeds are applied in accordance with
such subsection 2.8(d); and provided that the Company will be entitled, except
after the occurrence and during the continuance of an Event of Default, to
receive all payments with respect to such instruments, subject to the
prepayment
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<PAGE> 24
obligations in subsection 2.8(d))) in each case net of the reasonable expenses
(including legal fees and brokers' and underwriters' commissions paid to third
parties) incurred in effecting such sale and net of any taxes reasonably
attributable to such sale; provided, however, that the amount of any
liabilities existing at the time of an Asset Sale which relate to the assets
sold, which are not assumed by the purchaser and which the seller remains
obligated to pay, shall be deducted from the aggregate cash proceeds of the
Asset Sale.
"NEWLY PLEDGED SUBSIDIARIES" shall mean Variform, Inc., Hoover
Treated Wood Products, Inc., Studley Products, Inc., PGI Investments, Inc.,
Sagebrush Sales, Inc. and Richwood Building Products, Inc.
"NOTE(S)" shall mean respectively (i) individually, each Credit
Note, Swing Line Note, Competitive Bid Note or Designated Subsidiary
Acquisition Note and (ii) collectively, all such promissory notes.
"NWUSA" shall mean National Westminster Bank USA, a national
banking association, in its individual capacity.
"NWUSA RATE" shall mean, at any particular date, the higher of (a)
the rate of interest publicly announced by NWUSA in New York, New York from
time to time as its prime rate and (b) 1/2% above the rate set forth for such
date opposite the caption "Federal Funds (Effective)" in the weekly statistical
release designated as "H.15 (519)", or any successor publication, published by
the Board of Governors of the Federal Reserve System. The reference rate is
not intended to be the lowest rate of interest charged by NWUSA in connection
with extensions of credit to debtors. Each change in any interest rate
provided for herein based upon the NWUSA Rate shall take effect at the time of
such change in the NWUSA Rate.
"NWUSA RATE LOANS" shall mean Loans hereunder at such time as they
are being made and/or are being maintained at a rate of interest based upon the
NWUSA Rate.
"OBLIGATIONS" shall mean the unpaid principal of and interest on
the Notes and all other obligations and liabilities of the Company and the
Designated Subsidiaries to the Agent or to the Banks, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, the
Credit Agreement, the Notes, the L/Cs and any other document made, delivered or
given in connection therewith or herewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation: (i) any interest accruing thereon after the
date of filing any petition by or against the Company or any Subsidiary in
connection with any bankruptcy or other proceeding, whether or
19
<PAGE> 25
not a claim by the Agent or any of the Banks is enforceable in such proceeding;
and (ii) all fees and disbursements of counsel to the Agent or to the Banks
that are required to be paid by the Company pursuant to the terms of the Credit
Agreement) or otherwise.
"PARTICIPANT" shall have the meaning ascribed thereto in
subsection 9.7(d).
"PARTICIPATING INTEREST" shall have the meaning ascribed thereto
in subsection 9.7(d).
"PATENT RIGHTS" shall have the meaning ascribed thereto in
subsection 3.17.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.
"PERMITTED SUBSIDIARY ACQUISITION" shall have the meaning ascribed
thereto in subsection 2.1(a)(ii).
"PERSON" shall mean an individual, a partnership, a corporation, a
business trust, a joint stock company, a trust, an unincorporated association,
a joint venture, a Governmental Authority or any other entity of whatever
nature.
"PLAN" shall mean at any particular time, any employee benefit
plan which is covered by ERISA and in respect of which the Company or a
Commonly Controlled Entity is (or, if such Plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"POST-DEFAULT RATE" shall have the meaning ascribed thereto in
subsection 2.10(d).
"REFERENCE BANKS" shall mean NWUSA and NationsBank of North
Carolina, National Association.
"REFUNDED SWING LINE LOANS" shall have the meaning ascribed
thereto in subsection 2.4(d).
"REFUNDING BORROWING" shall mean a borrowing hereunder which,
after application of the proceeds thereof, results in no net increase in the
aggregate outstanding principal amount of the Loans.
"REGULATION U" and "REGULATION X" shall mean, respectively,
Regulation U and Regulation X of the Board of Governors of the Federal Reserve
System, as from time to time in effect.
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<PAGE> 26
"REGULATORY CHANGE" shall mean the introduction of, or any change
in, United States federal, state or local laws or regulations (including
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time) or treaties or foreign laws or regulations after the
date of this Agreement or the adoption or making after such date of any
interpretations, directives, guidelines or requests applying generally to a
class of banks of or under any United States federal, state or local laws or
regulations or any treaties or foreign laws or regulations (whether or not
having the force of law) by any court or governmental or monetary authority
charged with the interpretation or administration thereof.
"RELEASE" shall have the same meaning as set forth in Section
101(22) of the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. Section 9601(22), or state or local law.
"REORGANIZATION", as to any Multiemployer Plan, shall have the
meaning assigned to such term in Section 4241 of ERISA.
"REPORTABLE EVENT" shall mean any of the events set forth in
Section 4043(b) of ERISA other than those events as to which the thirty-day
notice period is waived.
"REQUIRED BANKS" shall mean, at any date, Banks having at least
66-2/3% of the aggregate amount of the Commitments, and, if the Commitments are
terminated and Loans and/or Bank L/C Obligations are outstanding, Banks holding
at least 66 2/3% of the aggregate principal amount of outstanding Loans and/or
Commitment Percentages relating to Bank L/C Obligations, as the case may be.
"REQUIREMENT OF LAW" for any Person shall mean the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or guideline, or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or
to which such Person or any of its property is subject.
"RESPONSIBLE OFFICER" shall mean the chief executive officer,
president, chief financial officer or treasurer, or any executive vice
president of the Company.
"SEC REPORTS" shall mean the Company's annual report on Form 10-K
for the fiscal year ended December 31, 1992 and other documents filed by the
Company with the Securities and Exchange Commission during 1993.
"SECURITY INDENTURE AND TRUST AGREEMENT" shall mean the security
indenture and trust agreement, dated as of October 1, 1988, between the Company
and Chemical Bank, as security trustee.
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<PAGE> 27
"SECURITY DOCUMENTS" shall mean, collectively, the Security
Indenture and Trust Agreement, the Stock Security Agreement and the Company
Pledge Agreement.
"SINGLE EMPLOYER PLAN" shall mean any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan.
"SOLVENCY CERTIFICATE" shall mean a certificate substantially in
the form of Exhibit J hereto.
"SOLVENT" shall mean with respect to any Person at the time of
determination:
(a) the then fair market value of its assets is greater than its
probable liability on its existing debts (including contingent
debts) as such debts become absolute and matured; and
(b) it is then able and expects to be able to pay its debts
(including, without limitation, contingent debts and other
commitments) as they mature; and
(c) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
"SPECIAL SUBSIDIARY LOANS" shall have the meaning ascribed thereto
in subsection 6.7(d).
"SPECIFIED L/C OBLIGATIONS" at any date shall mean the sum of (a)
the aggregate undrawn amount of all letters of credit as to which the Company
or any Subsidiary is an account party at such date, exclusive of (i) the Fifth
Third Letters of Credit, and (ii) any renewals, extensions and replacements of
any of the Fifth Third Letters of Credit, plus (b) the amount of all Unpaid
Drawings.
"STOCK SECURITY AGREEMENT" shall have the meaning ascribed thereto
in subsection 2.21(a)(ii).
"SUBORDINATED INDEBTEDNESS" shall mean (a) the Indebtedness
created pursuant to the Indenture and (b) the Indebtedness permitted pursuant
to subsection 6.1(f).
"SUBSIDIARY" of any Person shall mean a corporation or other
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or other ownership interests having such power
only by reason of the happening of a contingency) to elect a majority of the
directors of such corporation, or other Persons performing similar functions
for such entity, are owned, directly or indirectly, by such Person. Unless
otherwise qualified, all references to a
22
<PAGE> 28
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary
or Subsidiaries of the Company.
"SWING LINE COMMITMENT" shall mean, at any date, the obligation of
the Swing Line Lender to make Swing Line Loans pursuant to subsection 2.4 in
the amount referred to therein.
"SWING LINE LENDER" shall mean NWUSA, initially; the Company may
designate any other Bank as Swing Line Lender from time to time, but only with
the consent of such designated Bank.
"SWING LINE LOANS" shall have the meaning ascribed thereto in
subsection 2.4(a).
"SWING LINE NOTE(S)" shall have the meaning ascribed thereto in
subsection 2.4(b).
"TAXES" shall have the meaning ascribed thereto in subsection
2.13.
"TERMINATION DATE" shall mean February 23, 1999 or, if such day is
not a Business Day, the Business Day next preceding such day.
"TOXIC CHEMICAL" shall mean any substance on the list described in
Section 313(c) of the Emergency Planning and Community Right-to-Know Act, 42
U.S.C. Section 11023(c).
"TRANCHE" shall mean all Eurodollar Loans of the same borrower
with the same Interest Period.
"TRANCHE LIMIT" at any time shall mean a number equal to the sum
of the number of Designated Subsidiaries at such time plus 4; provided, that
the Tranche Limit shall not be less than 10.
"TYPE" shall mean, as to any Loan, its nature as a NWUSA Rate Loan
or Eurodollar Loan, as the case may be.
"UNPAID DRAWINGS" shall have the meaning ascribed thereto in
subsection 2.1(c)(i) hereof.
"WORKING DAY" shall mean any Business Day on which dealings in
foreign currency and exchange between banks may be carried on in London,
England and New York, New York.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) All terms defined in this
Agreement shall have such defined meanings when used in the Notes or any
certificate or other document made or delivered pursuant hereto unless
otherwise defined therein.
(b) As used herein, in the Notes and in any certificate or other
document made or delivered pursuant hereto,
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<PAGE> 29
accounting terms not defined in subsection 1.1, and accounting terms partly
defined in subsection 1.1 to the extent not defined, shall have the respective
meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement, shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; and Section,
subsection, Schedule and Exhibit references contained in this Agreement are
references to Sections, subsections, Schedules and Exhibits in or to this
Agreement unless otherwise specified.
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<PAGE> 30
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS
2.1 COMMITMENTS. (a) (i) Subject to the terms and conditions of
this Agreement, each Bank severally agrees to make revolving credit loans
(individually, a "CREDIT LOAN", collectively, the "CREDIT LOANS") to the
Company and the Designated Subsidiaries from time to time during the Commitment
Period in an aggregate principal amount at any one time outstanding which, when
added to such Bank's Commitment Percentage of the sum of the Swing Line Loans
and Bank L/C Obligations which are to be outstanding immediately after giving
effect to the borrowing and application of such Credit Loans, will not exceed
the amount of its Commitment set forth on such Bank's signature page hereto, as
such amount may be reduced from time to time as provided herein. During the
Commitment Period, the Company and the Designated Subsidiaries may use the
Commitments by borrowing, prepaying the Loans in whole or in part and
reborrowing, all in accordance with the terms and conditions hereof.
(ii) Subject to the Commitments, each Designated
Subsidiary may borrow and have L/Cs issued pursuant hereto in an aggregate
principal amount of Loans and undrawn amount of L/Cs outstanding at any one
time up to (x) the Designated Subsidiary Borrowing Limit for such Designated
Subsidiary plus (y) $7,500,000, provided that such additional $7,500,000 shall
only be borrowed as Loans and be used to fund one or more acquisitions by such
Designated Subsidiary otherwise permitted by this Agreement ("PERMITTED
SUBSIDIARY ACQUISITIONS").
(b) The Credit Loans may be (i) Eurodollar Loans, (ii) NWUSA Rate
Loans, or (iii) subject to the other provisions hereof, any combination
thereof, as determined by the Company and notified to the Agent in accordance
with subsection 2.3, provided that Credit Loans made on the Closing Date shall
be NWUSA Rate Loans.
(c) (i) Subject to the terms and conditions hereof and in each
case in reliance on the agreements of the other Banks set forth in subsection
2.19(c), NWUSA shall, upon the request of the Company or any Designated
Subsidiary, issue stand-by letters of credit and trade letters of credit
(individually, an "L/C" and collectively, the "L/Cs") for the account of the
Company or any Designated Subsidiary in an aggregate face amount up to the
Available L/C Commitment as then in effect with a term selected by the Company
or any Designated Subsidiary, as the case may be, which shall not exceed one
year plus renewals as provided therein in the case of stand-by L/Cs and 180
days in the case of trade L/Cs and which expire in either case no later than 30
days prior to the Termination Date. The Agent shall notify each Bank of the
issuance of an L/C hereunder. NWUSA shall notify the Company of any payment or
disbursement made by NWUSA under any L/C in accordance with its customary
practice. The Company or any Designated Subsidiary, as the case may be, shall
reimburse NWUSA
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<PAGE> 31
in immediately available funds at its office indicated on its signature page
hereto on the same day as any draw is paid by NWUSA under the L/Cs (all such
amounts so paid or disbursed until paid, are hereinafter referred to as "UNPAID
DRAWINGS").
(ii) Upon the presentation and payment of a draft pursuant
to any L/C and reimbursement of the issuer of the L/C in accordance with the
terms and conditions thereof, the face amount of such L/C shall be added to the
Available L/C Commitment against which L/Cs can be issued hereunder.
(iii) If, notwithstanding the other provisions of this
subsection 2.1(c), on the Termination Date there are outstanding any L/Cs which
have not expired or been terminated with the consent of the Company and the
respective beneficiaries thereof, then this Agreement (including, without
limitation, this subsection 2.1(c) and subsection 2.22 hereof) and the
respective rights, obligations and covenants of the Company and the Designated
Subsidiaries and NWUSA under this Agreement shall remain in full force and
effect until the date on which the last of the L/Cs expire or is terminated
(with the consent of the Company and the respective beneficiaries thereof) and
all payments made by NWUSA under the L/Cs are reimbursed in full by the Company
or one or more of the Designated Subsidiaries except that the Commitment
(including the obligation to issue L/Cs) shall terminate on the Termination
Date and NWUSA and the Banks shall have no obligation after the Termination
Date to make Credit Loans or issue L/Cs hereunder.
(iv) Upon the execution and delivery by the Company or a
Designated Subsidiary, as the case may be, to NWUSA of its standard form of
application for trade or stand-by letters of credit (individually, an
"APPLICATION", and collectively, the "APPLICATIONS") and upon payment by the
Company to NWUSA in the case of each stand-by and trade L/C of the standard
charges and fees then customarily imposed by NWUSA in connection with such
applications (which have been supplied to the Company) in each case for the
sole account of NWUSA, and in the case of each stand-by L/C, a Facing Fee for
the sole account of NWUSA, and as provided in clause (vi) below an Issuance
Fee, NWUSA shall, subject to the terms and conditions of this Agreement, in a
timely manner in accordance with its standard operating procedures, issue a
trade L/C or a stand-by L/C for the account of the Company or such Designated
Subsidiary, as the case may be.
(v) Upon the presentation for payment of any draft drawn
under a trade L/C, the Company shall pay to NWUSA for the ratable benefit of
the Banks a payment commission or fee (each a "DRAWING FEE") equal to one
quarter of one percent (1/4%) of the face amount of the draft.
(vi) The Company shall pay to the Agent for the ratable
benefit of the Banks an Issuance Fee for each stand-by L/C, in an
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<PAGE> 32
amount at an annual rate equal to the percentage of the undrawn amount of such
L/C set forth in the definition of Issuance Fee, and payable on the date of
issuance and thereafter in advance on the first day of each January, April,
July and October so long as such L/C is outstanding (pro rated for the portion
of any quarter during which the undrawn amount of such L/C is reduced or the
L/C is terminated).
(vii) In the event that at any time when a draft is drawn
under an L/C, there are not sufficient funds in any account of the Account
Party with NWUSA or sufficient Available Commitments to permit creation of a
Swing Line Loan or a Credit Loan sufficient to fund payment of such draft, any
funds advanced by NWUSA, in payment thereof shall be due and payable
immediately and shall bear interest until paid in full at the Post-Default
Rate. In the event of any conflict, discrepancy or any omission of terms
provided herein between the terms established by NWUSA in its Application or
otherwise and this Agreement, the terms provided herein shall prevail.
(viii) The obligations of the Company or any Designated
Subsidiary, as the case may be, under this subsection 2.1(c) to reimburse NWUSA
with respect to Unpaid Drawings (including interest thereon) shall, subject to
the other provisions of this Agreement, including without limitation subsection
2.22, be absolute and unconditional under any and all circumstances and (but as
so subject) irrespective of any setoff, counterclaim or defense to payment
which the Company or any Designated Subsidiary may have or have had against
NWUSA, including (without limitation, but as so subject) any defense based on
the failure of any drawing under the L/C to conform to the terms of such L/C or
any non-application or misapplication by the beneficiary of the L/C of the
proceeds of such drawing.
2.2 NOTES. The Credit Loans made by each Bank shall be evidenced
by promissory notes, substantially in the form of Exhibit A-1 with appropriate
insertions as to date, name of Bank and principal amount (individually, a
"CREDIT NOTE" and collectively, the "CREDIT NOTES"), payable to the order of
such Bank and evidencing the obligation of the Company or each of the
Designated Subsidiaries, as the case may be, to pay the outstanding principal
amount thereof with interest on the unpaid principal amount from time to time
outstanding of such Note as prescribed in subsection 2.10; provided, however,
that the Notes evidencing the Credit Loans made pursuant to subsection
2.1(a)(ii) for Permitted Subsidiary Acquisitions shall be substantially in the
form of Exhibit A-2 with appropriate insertions as to date, name of Bank and
principal amount (individually, a "DESIGNATED SUBSIDIARY ACQUISITION NOTE" and
collectively, the "DESIGNATED SUBSIDIARY ACQUISITION NOTES"), payable to the
order of such Bank and representing the obligation of each of the Designated
Subsidiaries to pay a principal amount up to such Bank's Commitment Percentage
of $7,500,000 or, if
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<PAGE> 33
less, the aggregate unpaid amount of all Loans for Permitted Subsidiary
Acquisitions made pursuant to subsection 2.1(a)(ii) by such Bank, with interest
on the unpaid principal amount from time to time outstanding of such Note as
prescribed in subsection 2.10. Each Bank is hereby authorized to record the
date, Type and amount of each Credit Loan, the maturity date therefor and the
date and amount of each repayment of principal thereof, and, in the case of
Eurodollar Loans, the interest rate with respect thereto, either on its own
books and records or on the schedule (or any continuations thereof) annexed to
and constituting a part of its Note, and any such recordation shall constitute
prima facie evidence of the accuracy of the information so recorded; provided
that the failure to make any such recordation shall not in any way affect the
Company's and the Designated Subsidiaries' obligation to repay the Credit
Loans. Each Credit Note shall (a) be dated the date hereof, (b) mature, with
respect to each Credit Loan evidenced thereby, on the last day of the Interest
Period relating thereto and, with respect to all Credit Loans, on the
Termination Date and (c) bear interest on the unpaid principal amount thereof
from time to time outstanding until payment in full of the principal amount
thereof at the applicable interest rate per annum determined as provided in
subsection 2.10. Interest on the Notes shall be payable on the dates specified
in subsection 2.10.
2.3 PROCEDURE FOR CREDIT LOAN BORROWINGS. (a) The Company may
request for itself or any Designated Subsidiary a borrowing under the
Commitments during the Commitment Period on any Business Day, by giving
irrevocable notice to the Agent (which notice must be received by the Agent
prior to 2:00 P.M., New York City time), three Working Days prior to the
requested borrowing date, in the case of Eurodollar Loans and one Business Day
prior to the requested borrowing date, in the case of NWUSA Rate Loans,
specifying (i) the borrower and the amount to be borrowed, (ii) the requested
borrowing date, (iii) whether the borrowing is to be a Eurodollar Loan, NWUSA
Rate Loan or a combination thereof and, if a combination, the respective amount
of each Type of borrowing and (iv) in the case of Eurodollar Loans, the length
of the Interest Period with respect thereto. Each borrowing under the
Commitments shall be in an aggregate principal amount of the lesser of: (x) the
then Available Commitments, and (y) (i) in the case of NWUSA Rate Loans,
$1,000,000 or a whole multiple of $100,000 in excess thereof, and (ii) in the
case of Eurodollar Loans, $5,000,000 or a whole multiple of $1,000,000 in
excess thereof. Upon receipt of any such notice from the Company, the Agent
shall promptly notify each Bank thereof. Except as provided in paragraph (c)
below, each Bank will make the amount of its pro rata share of each borrowing
available to the Agent for the account of the Company at the office of the
Agent set forth on its signature page hereto by 11:00 A.M., New York City time,
on the borrowing date requested by the Company in funds immediately available
to the Agent. The proceeds of all such Credit Loans will then be made
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<PAGE> 34
available to the Company or the applicable Designated Subsidiary, as the case
may be, by the Agent at such office of the Agent by crediting the account of
the Company or such Designated Subsidiary on the books of such office with the
aggregate of the amounts made available to the Agent by the Banks and in like
funds as received by the Agent.
(b) The provisions of subsection 2.3(a) notwithstanding, if the
Company shall not have given a timely notice of a borrowing to be made on the
last day of any Interest Period for an outstanding Credit Loan, then unless the
Agent shall have received notice that the Company elects not to make a
borrowing on the last day of such Interest Period (such notice to have been
received at least one Business Day prior to the last day of such Interest
Period) the Company shall be deemed irrevocably to have requested that NWUSA
Rate Loans be made by the Banks on the last day of such Interest Period in the
same aggregate amount as the Credit Loans maturing on such day (subject,
however, to the requirement that the aggregate amount of the Credit Loans
outstanding at any time pursuant to subsection 2.1 may not exceed the amounts
of the Available Commitments then in effect).
(c) If any Bank makes a new Credit Loan on a day on which the
Company or any Designated Subsidiary is to repay all or any part of any
outstanding Credit Loan from such Bank, such Bank shall apply the proceeds of
its new Credit Loan to make such repayment, and only an amount equal to the
difference (if any) between the amount being borrowed and the amount being
repaid shall be made available by such Bank to the Agent as provided in
paragraph (a) above or, as the case may be, remitted by the Company to the
Agent.
(d) The proceeds of the initial Loans hereunder shall be applied
to the payment in full of the principal, interest and any other amounts payable
with respect to the Indebtedness listed in Part A of Schedule III.
2.4 SWING LINE BORROWINGS.
(A) SWING LINE COMMITMENT. Subject to the terms and conditions
hereof, the Swing Line Lender agrees to make SWING LINE LOANS ("SWING LINE
LOANS") to the Company or any Designated Subsidiary on any Business Day from
time to time during the Commitment Period in an aggregate principal amount at
any one time outstanding not to exceed $7,500,000 and in the case of each Swing
Line Loan for a term not to exceed sixty (60) days (for this purpose,
repayments by the Company or any Designated Subsidiary shall be applied to
Swing Line Loans in the order that such Loans were borrowed (i.e.,
"first-in-first-out"); and, without limitation, a Swing Line Loan will be
deemed repaid upon the refinancing thereof with a Credit Loan); provided,
however, that in no event may the amount of any borrowing of Swing Line Loans
(i) exceed the aggregate Available Commitments of all Banks
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<PAGE> 35
immediately prior to such borrowing (after giving effect to such borrowing) or
(ii) cause the outstanding Credit Loans of any Bank, when added to such Bank's
Commitment Percentage of the then outstanding Swing Line Loans and Commitment
Percentage of Bank L/C Obligations (after giving effect to such borrowing) to
exceed such Bank's Commitment.
(B) SWING LINE NOTE. The Swing Line Loans shall be evidenced by a
promissory note of the Company and each Designated Subsidiary substantially in
the form of Exhibit B, with appropriate insertions (the "SWING LINE NOTE"),
payable to the order of the Swing Line Lender and representing the obligation
of the Company and each Designated Subsidiary to pay the aggregate unpaid
principal amount of the Swing Line Loans, with interest thereon as prescribed
in subsection 2.10. The Swing Line Lender is hereby authorized to record the
borrowing date, the amount of each Swing Line Loan and the date and amount of
each payment or prepayment of principal thereof, on the schedule annexed to and
constituting a part of the Swing Line Note (or otherwise on the records of the
Swing Line Lender) and any such recordation shall constitute prime facie
evidence of the accuracy of the information so recorded; provided, however,
that the failure of the Swing Line Lender to make such recordation (or any
error in such recordation) shall not affect the obligations of the Company and
each Designated Subsidiary to repay the Swing Line Loans. The Swing Line Note
shall (a) be dated the date hereof, (b) mature on the Termination Date and (c)
bear interest for the period from the Closing Date on the unpaid principal
amount thereof from time to time outstanding at the applicable interest rate
per annum determined as provided in, and payable as specified in, subsection
2.10.
(C) PROCEDURE FOR SWING LINE BORROWING. The Swing Line Loans
shall be made and maintained as NWUSA Rate Loans. The Company shall give the
Swing Line Lender irrevocable notice (which notice must be received by the
Swing Line Lender prior to 1:00 P.M., New York City time), on the requested
borrowing date (which shall be a Business Day) specifying the borrower and the
amount of each requested Swing Line Loan, which shall be in a minimum amount of
$100,000 or a multiple thereof. The proceeds of each Swing Line Loan will then
be made available to the Company or a Designated Subsidiary, as applicable, by
the Swing Line Lender by crediting the account of the Company or such
Designated Subsidiary on the books of the office of the Swing Line Lender
specified on the signature page hereto with such proceeds.
(D) REFUNDING OF SWING LINE LOANS. The Swing Line Lender, at any
time in its sole and absolute discretion, may on behalf of the Company or a
Designated Subsidiary, as applicable (which hereby irrevocably directs the
Swing Line Lender to so act on its behalf), request each Bank to make a Credit
Loan in an amount equal to such Bank's Commitment Percentage of the prin-
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<PAGE> 36
cipal amount of the Swing Line Loans (the "REFUNDED SWING LINE LOANS")
outstanding on the date such notice is given. Unless any of the events
described in subsection 7(f) shall have occurred (in which event the procedures
of paragraph (E) of this subsection 2.4 shall apply) and regardless of whether
the conditions precedent set forth in this Agreement to the making of a Credit
Loan are then satisfied, each Bank shall make the proceeds of its Credit Loan
available to the Swing Line Lender at its office set forth on its signature
page hereto prior to 11:00 A.M., New York City time, in funds immediately
available on the Business Day next succeeding the date such notice is given.
The proceeds of such Credit Loans shall be immediately applied to repay the
Refunded Swing Line Loans.
(E) PARTICIPATION IN SWING LINE LOANS. If, prior to the making of
a Credit Loan pursuant to paragraph (D) of this subsection 2.4, one of the
events described in subsection 7(f) shall have occurred, then, subject to the
provisions of subparagraph 2.4(F) below, each Bank will, on the date such
Credit Loan was to have been made, purchase from the Swing Line Lender an
undivided participating interest in an amount equal to the Commitment
Percentage of such Bank in the Refunded Swing Line Loans. Upon request, each
Bank will immediately transfer to the Swing Line Lender, in immediately
available funds, the amount of its participation.
(F) BANKS' OBLIGATIONS UNCONDITIONAL. Each Bank's obligation to
make Credit Loans in accordance with clause (d) and to purchase participating
interests in accordance with clause (E) above shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any set-off, counterclaim, recoupment, defense or other right
which such Bank may have against the Swing Line Lender, the Company, any
Designated Subsidiary or any other Person for any reason whatsoever; (ii) the
occurrence or continuance of any Event of Default; (iii) any adverse change in
the condition (financial or otherwise) of the Company, any Designated
Subsidiary or any other Person; (iv) any breach of this Agreement by the
Company, any Designated Subsidiary or any other Person; (v) any inability of
the Company or any Designated Subsidiary to satisfy the conditions precedent to
borrowing set forth in this Agreement on the date upon which such participating
interest is to be purchased or (vi) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing. If any Bank does
not make available to the Swing Line Lender the amount required pursuant to
clause (d) or (e) above, as the case may be, the Swing Line Lender shall be
entitled to recover such amount on demand from such Bank, together with
interest thereon for each day from the date of non-payment until such amount is
paid in full at the Federal funds rate as described in subsection 2.19(b).
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<PAGE> 37
2.5 COMPETITIVE BORROWINGS. (A) THE COMPETITIVE BID OPTION. In
addition to the Loans which may be made available pursuant to subsection 2.1,
the Company may, as set forth in this subsection 2.5, request the Banks to make
offers to make Competitive Bid Loans to the Company or any Designated
Subsidiary during the Commitment Period; provided, however, that at no time
shall the aggregate amount of Credit Loans, Swing Line Loans, Competitive Bid
Loans and Bank L/C Obligations exceed the aggregate Commitments then in effect
of all the Banks; and provided further, that at no time shall the outstanding
principal amount of Competitive Bid Loans exceed $50,000,000. The Banks may,
but shall have no obligation to, make such offers, and the Company and the
Designated Subsidiaries may, but shall have no obligation to, accept any such
offers in the manner set forth in this subsection 2.5. Upon the request of any
Bank making a Competitive Bid Loan, the Company or a Designated Subsidiary, as
applicable, shall execute and deliver a promissory note with respect to
Competitive Bid Loans to be made by such Bank, substantially in the form of
Exhibit C-1 with appropriate insertions as to payee and date (each, a
"COMPETITIVE BID NOTE"), payable to the order of such Bank and in a principal
amount equal to the aggregate unpaid principal amount of all Competitive Bid
Loans, if any, made by such Bank.
(B) COMPETITIVE BID REQUEST. When the Company wishes to request
offers to make Competitive Bid Loans under this subsection 2.5, it shall
transmit to the Agent a Competitive Bid Request to be received no later than
12:00 Noon (New York City time) on the fourth Working Day prior to the
requested date of borrowing, specifying:
(i) the name of the proposed borrower,
(ii) the proposed date of borrowing, which shall be a
Business Day,
(iii) the aggregate principal amount of such borrowing,
which shall be $5,000,000 or a multiple of $1,000,000 in excess thereof, and
(iv) the duration of the Interest Period applicable
thereto, subject to the provisions of the definition of Interest Period
contained in subsection 1.1.
A Competitive Bid Request that does not conform substantially to the format of
Exhibit C-2 may be rejected by the Agent in its sole discretion, and the Agent
shall promptly notify the Company of such rejection. The Company may request
offers to make Competitive Bid Loans for more than one Interest Period in a
single Competitive Bid Request. No Competitive Bid Request shall be given
within three Business Days of any other Competitive Bid Request.
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<PAGE> 38
(C) INVITATION FOR COMPETITIVE BIDS. Promptly after its receipt
of a Competitive Bid Request (but, in any event, no later than 3:00 P.M. (New
York City time) on the date of the Agent's receipt of such Competitive Bid
Request conforming to the requirements of paragraph (b) above) the Agent shall
send to each of the Banks an Invitation for Competitive Bids which shall
constitute an invitation by the Company to each such Bank to bid, on the terms
and conditions of this Agreement, to make Competitive Bid Loans pursuant to the
Competitive Bid Request.
(D) SUBMISSION AND CONTENTS OF COMPETITIVE BIDS.
(i) Each Bank to which an Invitation for Competitive Bids is sent
may, but shall have no obligation to, submit a Competitive Bid containing an
offer or offers to make Competitive Bid Loans in response to such Invitation
for Competitive Bids. Each Competitive Bid must comply with the requirements
of this paragraph (D) and must be submitted to the Agent at its offices
specified on its signature page hereto not later than 9:30 A.M. (New York City
time) provided, however, that any Competitive Bid submitted by the Agent must
be submitted by no later than 9:15 A.M. (New York City time) in each case, on
the third Business Day prior to the requested date of borrowing. A Competitive
Bid submitted by a Bank pursuant to this paragraph (d) shall be irrevocable.
(ii) Each Competitive Bid shall be in substantially the
form of Exhibit C-4 and shall specify:
(A) the identity of the borrower and the date of the
proposed borrowing,
(B) the principal amount of the Competitive Bid Loan for
which each such offer is being made, the principal amount (w) may be
greater than, equal to or less than, the Available Commitment of the
quoting Bank, (x) must be in a minimum principal amount of $5,000,000
or a multiple of $1,000,000 in excess thereof, (y) may not exceed the
principal amount of Competitive Bid Loans for which offers were
requested and (z) if more than one offer is quoted by such Bank, may
be subject to a limitation as to the maximum aggregate principal
amount of Competitive Bid Loans for which offers being made by such
quoting Bank may be accepted,
(C) the rate offered for each Competitive Bid Loan, and
(D) the identity of the quoting Bank.
A Competitive Bid may set forth up to two separate offers by the quoting Bank
with respect to each Interest Period specified in the related Invitation for
Competitive Bids. Any Competitive Bid shall be disregarded by the Agent if the
Agent determines that
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<PAGE> 39
it: (A) is not substantially in the form of Exhibit C-4 or does not specify all
of the information required by subsection 2.5(d)(ii); (B) contains qualifying,
conditional or similar language (except for a limitation on the maximum
principal amount which may be accepted); (C) proposes terms other than or in
addition to those set forth in the applicable Invitation for Competitive Bids
or (D) arrives after the time set forth in subsection 2.5(d)(i).
(E) NOTICE TO THE COMPANY. The Agent shall promptly (and, in any
event, by 10:30 A.M. (New York City time) on the date of receipt of Competitive
Bids) notify the Company, by telecopy, of all the Competitive Bids made, the
Competitive Bid Rate and the principal amount of each Competitive Bid Loan in
respect of which a Competitive Bid was made and the identity of the Bank that
made each bid. The Agent shall send a copy of all Competitive Bids to the
Company for its records as soon as practicable after completion of the bidding
process set forth in this subsection 2.5.
(F) ACCEPTANCE AND NOTICE BY THE COMPANY. The Company may in its
sole discretion, subject only to the provisions of this paragraph (F), accept
or reject any Competitive Bid referred to in paragraph (E) above. The Company
shall notify the Agent by telephone, confirmed immediately thereafter by
telecopy in the form of a Competitive Bid Accept/Reject Letter, whether and to
what extent it wishes to accept any or all of the bids referred to in paragraph
(E) above not later than 10:00 A.M. (New York City time), on the second Working
Day prior to the requested date of borrowing; provided, however, that:
(i) the failure by the Company to give such notice shall be deemed
to be a rejection of all the bids referred to in paragraph (E) above;
(ii) the aggregate principal amount of the Competitive Bids
accepted by the Company may not exceed the lesser of (A) the principal amount
set forth in the related Competitive Bid Request and (B) the excess, if any, of
the aggregate Commitments of all Banks then in effect over the aggregate
principal amount of all Loans and Bank L/C Obligations outstanding immediately
prior to the making of such Competitive Bid Loans (after giving effect to the
use of proceeds thereof);
(iii) the principal amount of each Competitive Bid borrowing must be
$5,000,000 or a multiple of $1,000,000 in excess thereof;
(iv) unless there are any limitations contained in a quoting Bank's
Competitive Bid, the Company may not accept a Competitive Bid made at a
particular Competitive Bid Rate if it has decided to reject any portion of a
bid made at a lower Competitive Bid Rate for the same Interest Period, and
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<PAGE> 40
(v) the Company may not accept any Competitive Bid that is
disregarded by the Agent pursuant to subsection 2.5(D)(ii) or that otherwise
fails to comply with the requirements of this Agreement.
A notice given by the Company pursuant to this paragraph (F) shall be
irrevocable.
(G) ALLOCATION BY THE AGENT. If offers are made by two or more
Banks with the same Competitive Bid Rates for a greater aggregate principal
amount than the amount in respect of which such offers are accepted for the
related Interest Period, the principal amount of Competitive Bid Loans in
respect of which such offers are accepted shall be allocated by the Agent among
such Banks as nearly as possible (in integral multiples of $1,000,000), as the
Agent may deem appropriate in proportion to the aggregate principal amounts of
such offers.
(H) NOTIFICATION OF ACCEPTANCE. The Agent shall promptly (and, in
any event, by 11:00 A.M. (New York City time)) on the date of receipt of the
Competitive Bid Accept/Reject Letter notify each bidding Bank whether or not
its Competitive Bid has been accepted (and if so, in what amount and at what
Competitive Bid Rate), and each successful bidder will thereupon become bound,
subject to the other applicable conditions hereof, to make the Competitive Bid
Loan in respect of which its bid has been accepted.
(I) FUNDING OF THE COMPETITIVE BID LOANS. Each Bank which has
received notice pursuant to subsection 2.5(h) that its Competitive Bid has been
accepted, shall make the amounts of such Loans available to the Agent for the
account of the Company at the Agent's payment office by 12:00 Noon (New York
City time) on such date of borrowing, by payment in funds immediately available
to and freely transferable to the Agent. Unless any applicable condition
specified in Section 4 has not been satisfied, the proceeds of all such Loans
will then be made available to the Company or the applicable Designated
Subsidiary by the Agent at such office by crediting the account of the Company
or the applicable Designated Subsidiary with the aggregate of the amounts made
available to the Agent by the Banks and in like funds as received by the Agent.
(J) NO ADDITIONAL RIGHTS. Nothing in this subsection 2.5 shall be
construed as a right of first offer in favor of the Banks or otherwise to limit
the ability of the Company or any Subsidiary to request and accept any other
credit facilities from any Person (including any of the Banks); provided,
however, that no Event of Default or Default would otherwise arise or exist as
a result of the Company or any Subsidiary executing, delivering, or performing
under any such other credit facility.
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(K) REDUCTION OF AVAILABLE COMMITMENTS. Each outstanding
Competitive Bid Loan shall reduce by such amount the aggregate Available
Commitments of all the Banks (and, accordingly, the Available Commitment of
each Bank proportionate to its Commitment Percentage), but shall not otherwise
reduce or affect the Available Commitment or Commitment of any Bank which makes
a Competitive Bid Loan.
2.6 TERMINATION OR REDUCTION OF COMMITMENTS. (a) The Company
shall have the right, upon not less than three Business Days' notice to the
Agent, to terminate the Commitments or, from time to time, to reduce the amount
of the Commitments, provided that no such reduction or termination shall be
permitted if, after giving effect thereto, and to any prepayments of the Loans
made on the effective date thereof, the then outstanding principal amount of
the Loans and Bank L/C Obligations would exceed the amount of the Commitments
then in effect. Any such reduction shall be in an amount of $5,000,000 or a
whole multiple of $1,000,000 in excess thereof and shall reduce permanently the
amount of the Commitments then in effect.
(b) The Commitments once terminated or reduced may not be
reinstated.
2.7 FEES. (a) The Company agrees to pay to the Agent for the
account of each Bank the Facility Fee for the period commencing on the date
hereof extending to but not including the earlier of (i) the date the
Commitments are terminated or (ii) the Termination Date. The accrued Facility
Fee shall be payable quarterly in arrears on the first day of each January,
April, July and October and on the Termination Date or such earlier date as the
Commitments shall terminate as provided herein, commencing on the first of such
dates to occur after the date hereof.
(b) The Company agrees to pay to the Agent the additional fees in
the amounts and upon the terms set forth in the Fee Letter.
2.8 OPTIONAL AND MANDATORY PREPAYMENTS AND COMMITMENT REDUCTIONS.
(a) The Company and each Designated Subsidiary may at any time and from time to
time prepay the Credit Loans then outstanding, in whole or in part, without
premium or penalty, provided, however, that Eurodollar Loans may only be
prepaid on the last day of the then current Interest Period with respect
thereto, provided, that the Company and each Designated Subsidiary may, subject
to the requirement that it pay any amounts due under subsection 2.16 in
connection therewith, prepay Eurodollar Loans at any time. Optional
prepayments pursuant to this subsection 2.8(a) shall be made upon at least
three Working Days' prior irrevocable notice to the Agent in the case of
Eurodollar Loans, and one Business Day's prior irrevocable notice to the Agent
in the case of NWUSA Rate Loans, specifying (i) the date and amount of such
prepayment, (ii) whether the prepayment is of Eurodollar
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Loans, NWUSA Rate Loans or a combination thereof, and, if of a combination
thereof, the amount of prepayment allocable to each Type and (iii) in the case
of Eurodollar Loans, the Interest Periods affected. If any such notice is
given, the Company or the Designated Subsidiary involved will make the
prepayment specified therein, and such prepayment shall be due and payable on
the date specified therein, together with accrued interest to such date on the
amount prepaid. Each prepayment of the Credit Loans pursuant to this paragraph
(a) shall be in an amount equal to (A) in the case of NWUSA Rate Loans $500,000
or any whole multiple of $100,000 thereof or, if less, the amount of all Credit
Loans, then outstanding as NWUSA Rate Loans and (B) in the case of Eurodollar
Loans, $5,000,000 or any whole multiple of $1,000,000 in excess thereof or the
amount of all Credit Loans then outstanding as Eurodollar Loans provided that
prepayments of Eurodollar Loans pursuant to this paragraph (a) shall be made in
such a manner that, after giving effect to such prepayments, no Eurodollar
Loans having the same Interest Period shall be maintained in an amount less
than $1,000,000.
(b) Notwithstanding anything to the contrary contained herein,
neither the Company nor any Designated Subsidiary shall prepay the Competitive
Bid Loans except pursuant to Section 7.
(c) Upon notice to the Agent on any Business Day, the Company and
each Designated Subsidiary may prepay, without premium or penalty, any Swing
Line Loans on such Business Day not later than 3:00 p.m. (New York time).
Partial prepayments of Swing Line Loans shall be in an aggregate principal
amount of $100,000 or a whole multiple thereof, or the entire principal balance
thereof.
(d) The Company shall prepay the Credit Loans then outstanding and
reduce the Commitments forthwith upon the receipt by the Company of Net
Proceeds of an Asset Sale:
(i) of a business unit or units or any product line or group of
product lines which had annual sales in excess of $50,000,000; or
(ii) which, together with the Net Proceeds received from other
Asset Sales (other than Asset Sales described in clause (i)) during the term of
this Agreement exceeds in the aggregate the following amounts:
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<PAGE> 43
<TABLE>
<CAPTION>
Calendar Year in which Aggregate Net Proceeds
Asset Sale consummated of Asset Sales
----------------------- ------------------------
<S> <C>
1994 $40,000,000
1995 45,000,000
1996 50,000,000
1997 55,000,000
1998 60,000,000
1999 65,000,000
</TABLE>
each such prepayment and Commitment reduction, if pursuant to clause (i), to be
in amount equal to 80% of the amount of the Net Proceeds received, and if
pursuant to clause (ii), to be in an amount equal to 80% of the amount of the
aggregate Net Proceeds received from all such Asset Sales (other than Asset
Sales described in clause (i)) in excess of the amount set forth on the chart
above relating to the year in which the Asset Sale was consummated.
(e) Notwithstanding the provisions of subsection (d) above, the
full amount of the Net Proceeds received by the Company or any Subsidiary from
the sale of accounts receivable other than the sale of an amount at any time
outstanding up to $20,000,000 shall be applied by the Company or any Subsidiary
to the prepayment of Credit Loans and Commitment reduction forthwith upon
receipt thereof by the Company or any such Subsidiary.
2.9 REPAYMENT OF CREDIT LOANS. The Company or the applicable
Designated Subsidiary will pay the unpaid principal amount of each Credit Loan
on the last day of the Interest Period therefor.
2.10 INTEREST RATES AND PAYMENT DATES. (a) Each Eurodollar
Loan shall bear interest for the Interest Period with respect thereto on the
unpaid principal amount thereof at a rate per annum equal to the Eurodollar
Rate for such Interest Period plus the Applicable Margin.
(b) The NWUSA Rate Loans (including the Swing Line Loans) shall
bear interest on the aggregate unpaid principal amount thereof for the Interest
Period with respect thereto at a rate per annum equal to the NWUSA Rate plus
the Applicable Margin.
(c) Competitive Bid Loans shall bear interest as set forth in
subsection 2.5.
(d) If all or a portion of the principal amount of any of the
Loans shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue principal amount shall, without
limiting the rights of the Banks under Section 7, bear interest at a rate per
annum which is two percent (2%) above the NWUSA Rate (the "POST-DEFAULT RATE"),
from the
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date of such non-payment until paid in full (before, as well as after,
judgment); provided, that if such overdue principal amount is of Eurodollar
Loans, such Loans may, at the end of the Interest Period relating thereto, be
reborrowed only as NWUSA Rate Loans and shall bear interest at a rate per annum
which is two (2%) above the NWUSA Rate until paid in full (before as well as
after judgment).
(e) Interest on each Credit Loan shall be payable in arrears on
each Interest Payment Date applicable thereto.
(f) Anything herein to the contrary notwithstanding, the
obligation of the Company and each Designated Subsidiary to make payments of
interest shall be subject to the limitation that payments of interest shall not
be required to be made to any Bank to the extent that such Bank's receipt
thereof would not be permissible under the law or laws applicable to such Bank
limiting rates of interest which may be charged or collected by such Bank. Any
such payments of interest which are not made to any Bank as a result of the
limitation referred to in the preceding sentence shall be made by the Company
and each Designated Subsidiary to such Bank on the earliest interest payment
date or dates on which the receipt thereof would be permissible under the laws
applicable to such Bank limiting rates of interest which may be charged or
collected by the Agent.
2.11 COMPUTATION OF INTEREST AND FEES. (a) The Facility Fee and
interest in respect of NWUSA Rate Loans shall be calculated on the basis of a
365 (or 366, as the case may be) day year for the actual days elapsed.
Interest on all Eurodollar Loans and Competitive Bid Loans and Issuance Fees
and the fees payable pursuant to subsection 2.7(b) shall be calculated on the
basis of a 360-day year for the actual days elapsed. The Agent shall as soon
as practicable, but not later than the close of business on the date of
determination, notify the Company and the Designated Subsidiaries and the Banks
of each determination of a Eurodollar Rate. Any change in the interest rate on
the Credit Loans resulting from a change in the NWUSA Rate or the Eurocurrency
Reserve Requirements shall become effective as of the opening of business on
the day on which such change in the NWUSA Rate is announced, or such change in
the Eurocurrency Reserve Requirements shall become effective, as the case may
be. The Agent shall as soon as practicable, but not later than three Business
Days before the close of business on the effective date, notify the Company and
the Designated Subsidiaries and the Banks of the effective date and the amount
of each such change.
(b) Each determination of an interest rate by the Agent pursuant
to any provision of this Agreement shall be prima facie evidence of the
accuracy of the facts so determined.
2.12 INABILITY TO DETERMINE INTEREST RATE. Notwithstanding any
other provision of this Agreement, in the event that
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<PAGE> 45
the Required Banks shall reasonably have determined (which determination shall
be prima facie evidence of the facts so determined) that the rates quoted by
NWUSA for the purpose of computing the Eurodollar Base Rate do not adequately
and fairly reflect the cost to the Banks of funding any Credit Loans that the
Company or any Designated Subsidiary has requested be made as Eurodollar Loans,
such Banks shall notify the Agent thereof and the Agent shall promptly give
telecopier or telephonic notice of such determination, confirmed in writing to
the Company or such Designated Subsidiary and the Banks at least one Business
Day prior to the requested borrowing date for such Eurodollar Loans. Unless
the Company or such Designated Subsidiary shall have notified the Agent
promptly after receipt of such telecopier or telephonic notice that it wishes
to rescind or modify its request regarding such Eurodollar Loans, any requested
Eurodollar Loans shall be made as NWUSA Rate Loans. Until any such notice has
been withdrawn by the Agent, no further Eurodollar Loans shall be made. The
Agent shall withdraw such notice promptly after it determines that the
circumstances giving rise to the delivery of such notice no longer exist.
2.13 TAXES. (a) All payments made by the Company and each
Designated Subsidiary under this Agreement shall be made free and clear of, and
without reduction for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority excluding, in the case of the Agent and each
Bank, net income and franchise taxes imposed on the Agent and such Bank by the
jurisdiction under the laws of which such Agent or such Bank is organized or
any political subdivision or taxing authority thereof or therein or by any
jurisdiction in which such Bank's Domestic Lending Office or Eurodollar Lending
Office, as the case may be, is located or any political subdivision or taxing
authority thereof or therein (all such non-excluded taxes, levies, imposts,
deductions, charges or withholdings being hereinafter called "TAXES"). If any
Taxes are required to be withheld from any amounts payable to any Bank
hereunder or under the Notes, the amounts so payable to such Bank shall be
increased to the extent necessary to yield to such Bank (after payment of all
Taxes, including Taxes on such increased amount) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement and the Notes. Whenever any Taxes are payable by the Company or any
Designated Subsidiary, as promptly as possible thereafter, the Company or such
Designated Subsidiary shall send to the Agent for the account of such Bank a
certified copy of an original official receipt received by the Company showing
payment thereof. If the Company or any Designated Subsidiary fails to pay any
Taxes when due to the appropriate taxing authority or fails to remit to the
Agent the required receipts or other required documentary evidence, the Company
or such Designated Subsidiary shall indemnify the Agent and the Banks for any
incremental taxes,
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interest or penalties that may become payable by the Agent or any Bank as a
result of any such failure. Each Bank confirms to the Company and the
Designated Subsidiaries that tax withholding requirements do not currently
apply to payments to be made to it hereunder.
(b) If the Company or any Designated Subsidiary shall at any time
be required to withhold any Taxes in respect of any amount payable to any Bank
hereunder or under the Notes, the Company or such Designated Subsidiary shall
be entitled to prepay the Credit Loans allocable to such Bank, and the Company
or such Designated Subsidiary shall be entitled to terminate the Commitment of
such Bank (such prepayment to be made together with all other amounts due to
such Bank hereunder and under the Notes, including, without limitation,
interest, fees and any amounts payable pursuant to subsection 2.16).
(c) Each Bank agrees to use reasonable efforts (including
reasonable efforts to change its Domestic Lending Office or Eurodollar Lending
Office, as the case may be) to avoid the imposition of any Taxes on payments
hereunder or to minimize any amounts which might otherwise be payable pursuant
to this subsection; provided, however, that such efforts shall not cause the
imposition on such Bank of any additional costs or legal or regulatory burden
deemed by such Bank to be material.
(d) If the Company or any Designated Subsidiary makes any
additional payment to the Agent or any Bank pursuant to this subsection 2.13 in
respect of any Taxes, and the Agent or such Bank determines that it has
received (i) a refund of such Taxes or (ii) a credit against or relief or
remission for, or a reduction in the amount of, any tax or other governmental
charge solely as a result of any deduction or credit for any Taxes with respect
to which it has received payments under this subsection 2.13, the Agent and
such Bank shall, to the extent that they can do so without prejudice to the
retention of such refund, credit, relief, remission or reduction, pay to the
Company or such Designated Subsidiary such amount as the Agent and such Bank
shall have determined to be attributable to the deduction or withholding of
such Taxes. If the Agent or such Bank later determines that it was not
entitled to such refund, credit, relief, remission or reduction to the full
extent of any payment made pursuant to the first sentence of this subsection
2.13(d), the Company or such Designated Subsidiary shall upon demand of the
Agent or such Bank promptly repay the amount of such overpayment. Any
determination made by the Agent or such Bank pursuant to this subsection
2.13(d) shall constitute prima facie evidence of the accuracy thereof, and
nothing in this subsection 2.13(d) shall be construed as requiring the Agent or
any Bank to conduct its respective business or to arrange or alter in any
respect its respective tax or financial affairs so that it is entitled to
receive such a refund, credit or reduction or as
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allowing any person to inspect any records, including tax returns, of the Agent
or any Bank.
2.14 ILLEGALITY. Notwithstanding any other provision herein, if
any Regulatory Change shall make it unlawful for any Bank to make or maintain
Eurodollar Loans as contemplated by this Agreement or to accept deposits in
order to make or maintain such Eurodollar Loans, (a) the agreements of such
Bank hereunder to make Eurodollar Loans shall forthwith be suspended for the
duration of such illegality and (b) each Eurodollar Loan then outstanding, if
any, shall be repaid on the last day of the Interest Period therefor or within
such earlier period as required by law and shall be reborrowed on such day and
thereafter as requested by the Company or any Designated Subsidiary only as a
NWUSA Rate Loan or Competitive Bid Loan for the duration of such illegality.
If any such prepayment of a Eurodollar Loan is made on a day which is not the
last day of the Interest Period therefor, the Company and each Designated
Subsidiary hereby agrees to pay promptly to any Bank, upon its demand, any
amounts required to be paid by the Company and each Designated Subsidiary
pursuant to subsection 2.16 (such Bank's reasonable notice of such costs and
the manner in which they were calculated, as certified to the Company, shall
constitute prima facie evidence of the accuracy of the amounts set forth
therein). This agreement shall survive termination of this Agreement and the
payment of the outstanding Notes. Each Bank shall use its reasonable efforts
to promptly notify the Company as soon as practicable as to any Regulatory
Change described in this subsection 2.14.
2.15 INCREASED COSTS. (a) In the event that any Regulatory
Change:
(i) subjects any Bank to any tax of any kind whatsoever with
respect to this Agreement, its Notes or any Loans made by it, or changes the
basis of taxation of payments to such Bank of principal, commitment fee,
interest or any other amount payable hereunder (except for changes in Taxes and
except for taxes measured by the net income of such Bank);
(ii) imposes, modifies or holds applicable to any Bank any reserve,
Federal Deposit Insurance Corporation premium or assessment special deposit,
compulsory loan or similar requirement against any Eurodollar Loans made, or
assets held by, or credit extended by, or deposits or other liabilities in or
for the account of, or acquisition of funds by or for the account of, any
office of such Bank (or any corporation controlling any Bank), (but only to the
extent not otherwise included in the determination of the Eurodollar Rate); or
(iii) imposes on such Bank any other condition affecting this
Agreement or any Loans made hereunder;
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and the result of any of the foregoing is to increase the cost to such Bank of
making or maintaining Loans or Commitments or to reduce any amount receivable
by it in respect of Loans or Commitments, then, in any such case, the Company
or the applicable Designated Subsidiary shall promptly pay the Bank, upon its
demand pursuant to subsection 2.15(c), any additional amounts necessary to
compensate such Bank (or any corporation controlling such Bank) for such
additional cost or reduced amount receivable plus interest thereon at the NWUSA
Rate, for five (5) Business Days from the date demanded and thereafter, at the
Post-Default Rate, in each case until payment in full thereof.
(b) In the event that any Bank (or any corporation controlling
such Bank) shall have reasonably determined that any Regulatory Change does or
shall have the effect of reducing the rate of return on such Bank's (or such
corporation's) capital as a consequence of its obligations hereunder to a level
below that which such Bank (or such corporation) could have achieved on the
date hereof but for such Regulatory Change (taking into consideration such
Bank's policies with respect to capital adequacy) by any amount reasonably
deemed by such Bank to be material, then from time to time, within 15 days
after demand by such Bank pursuant to subsection 2.15(c) hereof, the Company or
the applicable Designated Subsidiary shall promptly pay the Bank such
additional amount or amounts as will compensate such Bank (or such corporation)
for such reduction.
(c) If any Bank (or any corporation controlling any Bank) becomes
entitled to claim any additional amounts pursuant to this subsection 2.15, it
shall promptly after becoming aware thereof notify the Company of the event by
reason of which it has become so entitled. Any such claim for additional
amounts by such Bank shall be accompanied by a certificate setting forth in
reasonable detail the calculation thereof (provided, however, that such Bank
shall not be required to disclose proprietary or confidential information in
such certificate), submitted by such Bank to the Company, and such certificate
shall constitute prima facie evidence of the accuracy of the amount of such
claim. This agreement shall survive termination of the Commitments and the
payment in full of the outstanding Notes for 180 days (but not longer).
(d) If the Company or any Designated Subsidiary shall at any time
be required to pay amounts pursuant to this subsection 2.15 to a company
controlling any Bank, the Company or such Designated Subsidiary shall be
entitled to prepay the Loans allocable to such Bank, and thereupon the Company
or such Designated Subsidiary shall be entitled to terminate the Commitment of
such Bank (such prepayment to be made together with all other amounts due to
such Bank hereunder and under the Notes, including, without limitation,
interest, fees and any amounts payable pursuant to subsection 2.16).
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2.16 INDEMNITY. The Company and each Designated Subsidiary
agrees to indemnify each Bank for, and to hold such Bank harmless from, any
loss or expense (but not including loss of Applicable Margin) which such Bank
may sustain or incur as a consequence of (a) any default by the Company or any
Designated Subsidiary in borrowing or failure to borrow for any reason such
Eurodollar Loans or Competitive Bid Loan after the Company or such Designated
Subsidiary has given a notice in respect thereof in accordance with subsections
2.3 or 2.5, (b) receipt by such Bank of any prepayment (whether optional or
mandatory) of any Eurodollar Loan or Competitive Bid Loan on a day which is not
the last day of an Interest Period applicable to such Eurodollar Loan or
Competitive Bid Loan, (c) default by the Company or any Designated Subsidiary
in making any prepayment of a Eurodollar Loan or Competitive Bid Loan after it
has given a notice in accordance with subsection 2.8(a), or (d) acceleration of
any Eurodollar Loans, and each Bank shall use reasonable efforts to minimize
any amounts due to such Bank pursuant to this subsection 2.16. The Company and
each Designated Subsidiary shall promptly pay to each Bank, upon its demand
(accompanied by the certificate described below), any amounts necessary to
compensate such Bank for such losses or expenses incurred by such Bank in
making or maintaining any Loans in accordance with this subsection 2.16,
including, without limitation, any interest or fees payable by such Bank to
lenders of funds obtained by it in order to make or maintain its Eurodollar
Loans. Any claim for additional amounts pursuant to the foregoing sentence by
such Bank shall be accompanied by a certificate setting forth in reasonable
detail the calculation thereof (provided, however, that such Bank shall not be
required to disclose proprietary or confidential information in such
certificate), submitted by such Bank to the Company or such Designated
Subsidiary, and such certificate shall constitute prima facie evidence of the
accuracy of the amount of such claim, provided that the determination of such
amount is made on a reasonable basis. This subsection 2.16 shall survive
termination of the Commitments and the payment in full of the outstanding Notes
for 180 days (but not longer).
2.17 MAXIMUM NUMBER OF TRANCHES. Notwithstanding any other
provision hereof, there shall not at any time be outstanding hereunder Tranches
in excess of the Tranche Limit.
2.18 USE OF PROCEEDS. The proceeds of the Loans may only be used
(i) to refinance existing Indebtedness of the Company and/or its Subsidiaries
and (ii) for general corporate purposes, including the financing of
acquisitions.
2.19 PRO RATA TREATMENT AND PAYMENTS; L/C PARTICIPATIONS. (a)
Each borrowing of Credit Loans by the Company or any Designated Subsidiary from
the Banks, each payment by the Company on account of any fees hereunder
(including, without limitation, any Issuance Fees and Drawing Fees in respect
of L/Cs (but excluding fees payable pursuant to subsection 2.7(b)),
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and any reduction of the Commitments of the Banks hereunder shall be made pro
rata according to the respective Commitment Percentages of the Banks. Each
payment (including each prepayment) by the Company or any Designated Subsidiary
on account of principal of and interest on the Credit Loans and other amounts
due hereunder (other than payments made pursuant to subsection 2.13, 2.14, 2.15
or 2.16 and payments made on account of principal of and interest on
Competitive Bid Loans) shall be made pro rata according to the respective
outstanding principal amounts of the Credit Loans held by each Bank. Each
payment (including each prepayment) by the Company or any Designated Subsidiary
on account of principal of and interest on any borrowing of Competitive Bid
Loans shall be made pro rata among the Banks participating in such borrowing
according to the respective principal amounts of their outstanding Competitive
Bid Loans comprising such borrowing. Each payment by the Company or any
Designated Subsidiary on account of principal of or interest on the Swing Line
Loans shall be made to the Swing Line Lender (except that, to the extent that
any Bank has paid to NWUSA its pro rata share thereof, such Bank shall be
entitled to receive its pro rata share of any payment (other than any payments
made pursuant to subsection 2.15) made to NWUSA in the same manner as is
provided with respect to payments made by L/C Participants in subsection
2.19(c)(ii) and (iii)). All payments (including prepayments) to be made by the
Company or any Designated Subsidiary on account of principal and interest on
the Notes or on account of any fees or other amounts due hereunder shall be
made without set-off or counterclaim and shall be made to the Agent, for the
account of the Banks, at the Agent's office set forth on its signature page
hereto, in lawful money of the United States of America and in immediately
available funds not later than 11:00 a.m. New York City time, on the date on
which such payment shall become due. The Agent shall distribute such payments
to the Banks promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on Eurodollar Loans) becomes due and payable on
a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day, and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension. If
any payment on a Eurodollar Loan becomes due and payable on a day other than a
Working Day, the maturity thereof shall be extended to the next succeeding
Working Day unless the result of such extension would be to extend such payment
into another calendar month in which event such payment shall be made on the
immediately preceding Working Day and with respect to payments of principal
interest thereon shall be payable at the then applicable rate during such
extension.
(b) Unless the Agent shall have been notified in writing by any
Bank prior to a borrowing date that such Bank will not make the amount which
would constitute its Commitment Percentage of the Credit Loans on such date
available to the Agent, the Agent may assume that such Bank has made such
amount
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available to the Agent on such borrowing date, and the Agent may, in reliance
upon such assumption, make available to the Company or a Designated Subsidiary,
as applicable, a corresponding amount. If such amount is made available to the
Agent on a date after such borrowing date, such Bank shall pay to the Agent on
demand an amount equal to the product of (i) the daily Federal funds rate
during such period set forth for such date opposite the caption "Federal Funds
(Effective)" in the weekly statistical release designated as "H.15 (519)", or
any successor publication published by the Board of Governors of the Federal
Reserve System, times (ii) the amount of such Bank's Commitment Percentage of
such borrowing, times (iii) a fraction the numerator of which is the number of
days that elapse from and including such borrowing date to the date on which
such Bank's Commitment Percentage of such borrowing shall have become
immediately available to the Agent and the denominator of which is 365. A
certificate of the Agent submitted to any Bank with respect to any amounts
owing under this subsection 2.19(b) shall be conclusive, absent manifest error.
If such Bank's Commitment Percentage of such borrowing is not in fact made
available to the Agent by such Bank within three Business Days of such
borrowing date, the Agent shall be entitled to recover such amount with
interest thereon at the rate per annum applicable to the Credit Loans
hereunder, on demand, from the Company or a Designated Subsidiary, as
applicable. Except as set forth in the immediately preceding sentence, neither
the Company nor the Subsidiaries shall have any liability to any Person under
this subsection 2.19(b).
(c) (i) NWUSA, as the issuing bank with respect to each L/C,
irrevocably agrees to grant and hereby grants to each Bank (each Bank, in such
capacity, an "L/C PARTICIPANT") and, to induce NWUSA to maintain or issue L/Cs
hereunder, each L/C Participant irrevocably agrees to accept and purchase and
hereby accepts and purchases from NWUSA, on the terms and conditions
hereinafter stated, for such L/C Participant's own account and risk an
undivided interest equal to such L/C Participant's Commitment Percentage in
NWUSA's obligations and rights under each L/C issued by it hereunder and the
amount of Unpaid Drawings with respect to any draft paid by NWUSA thereunder,
effective, in the case of each L/C, on the date of issuance thereof and, in the
case of Existing Letters of Credit issued by NWUSA, on the Closing Date. Each
L/C Participant unconditionally and irrevocably agrees with NWUSA with respect
to any L/C that, if a draft is paid under such L/C for which NWUSA is not
reimbursed in full by the relevant Account Party on the date required by
subsection 2.1(c)(vii), such L/C Participant shall pay to NWUSA upon
notification or demand at NWUSA's address for notices specified herein an
amount equal to such L/C Participant's Commitment Percentage of the amount of
such draft, or any part thereof, which is not so reimbursed.
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(ii) If any amount required to be paid by any L/C Participant to
NWUSA with respect to any L/C pursuant to subsection 2.19(c)(i) in respect of
any unreimbursed portion of any payment made by NWUSA under such L/C is paid to
NWUSA within three Business Days after the date such payment is due by such L/C
Participant, such L/C Participant shall pay to NWUSA on demand an amount equal
to the product of (i) such amount, times (ii) the daily average Federal funds
rate (determined as provided in subsection 2.13(b)) during the period from and
including the date such payment is required to the date on which such payment
is immediately available to NWUSA, times (iii) a fraction the numerator of
which is the number of days that elapse during such period and the denominator
of which is 365. If any such amount required to be paid by any L/C Participant
pursuant to subsection 2.19(c)(i) is not in fact made available to NWUSA by
such L/C Participant within three Business Days after the date such payment is
due by such L/C Participant, NWUSA shall be entitled to recover from such L/C
Participant, on demand, such amount with interest thereon calculated from such
due date at the rate per annum applicable to NWUSA Rate Loans hereunder. A
certificate of NWUSA submitted to any L/C Participant with respect to any
amounts owing under this subsection shall be conclusive in the absence of
manifest error.
(iii) Whenever, at any time after NWUSA has made payment under any L/C
and has received from any L/C Participant its pro rata share of such payment in
accordance with subsection 2.19(c)(i), NWUSA receives any payment related to
such L/C (whether directly from the Company, a Designated Subsidiary or
otherwise, including by means of set-off or the proceeds of collateral applied
thereto by NWUSA), or any payment of interest on account thereof, NWUSA will
distribute to such L/C Participant its pro rata share thereof; provided,
however, that in the event that any such payment received by NWUSA shall be
required to be returned by it, such L/C Participant shall return to NWUSA the
portion thereof previously distributed by NWUSA to it. Neither the Company
nor any Subsidiary shall have any liability or obligation to any person under
this subsection 2.19(c).
2.20 GUARANTIES. The due payment and performance of the Obligations
shall be guaranteed to the Banks and the Agent by the Company and each of the
Material Operating Subsidiaries listed on Schedule IV hereto and each
Subsidiary which becomes a Material Operating Subsidiary after the date hereof
(hereinafter referred to individually as a "GUARANTOR" and collectively as the
"GUARANTORS"), by the execution and delivery to the Agent, simultaneously with
the execution and delivery of this Agreement, by each Guarantor of a Guaranty
in form and substance satisfactory to the Agent (hereinafter referred to as a
"GUARANTY" and, collectively, as to all the Guarantors, the "GUARANTIES"),
subject to subsection 5.4.
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2.21 SECURITY. In order to secure the due payment and performance by
the Company of its Obligations, simultaneously with the execution and delivery
of this Agreement, the Company shall grant to the Agent for the ratable benefit
of the Banks:
(a) a first lien on, and pledge with the Agent for the ratable
benefit of the Banks:
(i) all of the issued and outstanding shares of capital
stock of the Existing Pledged Subsidiaries pursuant to the Security Indenture
and Trust Agreement and simultaneously appoint the Agent as successor Security
Trustee under the Security Indenture and Trust Agreement; and
(ii) all of the issued and outstanding shares of capital
stock of the Newly Pledged Subsidiaries, by the execution and delivery of a
Stock Security Agreement in form and substance satisfactory to the Agent (the
"STOCK SECURITY AGREEMENT"); and
(b) a second lien (subject only to the liens provided for in clause
(a) above) on, and pledge with the Agent for the ratable benefit of the Banks,
all of the issued and outstanding shares of capital stock of the Existing
Pledged Subsidiaries and the Newly Pledged Subsidiaries, by the execution and
delivery to the Agent of a Pledge Agreement in form and substance satisfactory
to the Agent (the "COMPANY PLEDGE AGREEMENT"), which shall be executed and
delivered on the Closing Date;
(c) Upon any Subsidiary becoming a Material Operating Subsidiary,
the Company shall pledge, or cause the pledge of, all of the capital stock
owned, directly or indirectly, by the Company in that Subsidiary as collateral
pursuant to the Stock Security Agreement (if still in effect) and/or the
Company Pledge Agreement; and
(d) In addition, the Company shall execute and deliver or cause to
be executed and delivered such other agreements, instruments and documents as
the Agent may reasonably require in order to effect the purposes of the
Security Indenture and Trust Agreement, the Stock Security Agreement, the
Company Pledge Agreement, this Section 2.21 and this Agreement.
2.22 ADDITIONAL L/C PROVISIONS. (a) Without limiting the generality
of subsection 2.15 hereof, if:
(i) any Regulatory Change shall (1) impose, modify or deem applicable
any reserve, special deposit, capital maintenance, deposit insurance premium or
assessment, or similar requirement against letters of credit issued by or
assets held by, or deposits made with or for the account of, NWUSA, (2) impose
on NWUSA any other condition regarding the L/Cs, or (3) subject NWUSA to any
tax, charge, fee, deduction or withholding
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of any kind whatsoever (except for changes in Taxes and except for taxes
measured by the net income of NWUSA); and
(ii) the result of any such event shall be to increase the cost to
NWUSA of the issuance or maintenance of the L/Cs, or reduce the amount of
principal, interest, or any fee or compensation receivable by NWUSA in respect
of the L/Cs; then, upon demand of NWUSA, the Company or a Designated
Subsidiary, as applicable, shall pay to NWUSA, from time to time as specified
by NWUSA, all additional amounts which are necessary to compensate NWUSA for
such increased cost or reduction incurred by NWUSA, accruing from and after the
date initially demanded by NWUSA. All payments of compensation for such
increased cost or reduction shall be accompanied by interest thereon, at the
NWUSA Rate from the date demanded for five (5) Business Days, and thereafter,
at the Post-Default Rate, in each case until payment in full thereof. A
certificate as to such increased cost incurred by NWUSA showing in reasonable
detail the calculation thereof shall be submitted by NWUSA to the Company and
shall constitute prima facie evidence of the accuracy of the amounts set forth
therein. For purposes of this subsection 2.22, all references to L/Cs shall
refer to participations in L/Cs, and all references to "NWUSA" shall be deemed
to include any L/C Participant, except that amounts payable by the Company and
the Designated Subsidiaries shall only be paid to the issuer of the letter of
credit and then delivered to any L/C Participant having such cost. In the
event of any inconsistency between the terms of this subsection 2.22 and
subsection 2.15, the provisions of subsection 2.15 shall govern. This
Agreement shall survive termination of the Commitment and payment of the
outstanding Notes for 180 days (but not longer).
(b) The obligations of the Company and each Designated Subsidiary
under this Agreement with respect to the L/Cs shall, absent gross negligence
or willful misconduct by NWUSA, (x) be absolute, unconditional and irrevocable,
and (y) shall be performed strictly in accordance with the terms of this
Agreement, under all circumstances whatsoever, including, without limitation,
the following circumstances:
(i) the L/Cs, the Notes, this Agreement or any other agreements,
instruments or documents relating thereto proving to be forged, fraudulent,
invalid, unenforceable or insufficient in any respect;
(ii) any amendment or waiver of or any consent to the departure from
all or any of the Security Documents and any subsequent such agreements;
(iii) the existence of any claim, setoff, defense or other rights
which the Company or any Designated Subsidiary may have at any time against any
beneficiary or any transferee of any
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beneficiary (or any Persons or entities for whom any beneficiary or any such
transferee may be acting);
(iv) any demand presented under the L/Cs (or any endorsement thereon)
proving to be forged, fraudulent, invalid, unenforceable or insufficient in any
respect or any statement therein being inaccurate in any respect whatsoever;
(v) the failure of any document to bear reference or to bear adequate
reference to such L/C;
(vi) the use to which the L/Cs may be put or any acts or omissions of
the Company or any Designated Subsidiary or beneficiaries in connection
therewith; or
(vii) any other similar circumstances provided that such circumstances
or happening shall not have constituted gross negligence or willful misconduct
of NWUSA.
(c) NWUSA shall not be responsible: (i) for the validity or
insufficiency of any instrument transferring or assigning or purporting to
transfer or assign the L/Cs or the rights or benefits thereunder or proceeds
thereof in whole or in part, which may prove to be invalid or ineffective for
any reason; (ii) for errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, cable telegraph, telex or otherwise,
whether or not they be in cipher; (iii) for any loss or delay in the
transmission or otherwise of any document or draft required in order to make a
draw under the L/Cs or of proceeds thereof; and (iv) for any consequence
arising from causes beyond the control of NWUSA, provided that this paragraph
(c) shall not apply to the gross negligence or willful misconduct of NWUSA.
None of the above shall affect, impair, or prevent the vesting of any of
NWUSA's rights or powers hereunder.
(d) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by
NWUSA, under or in connection with the L/Cs or the related drafts or documents,
unless constituting gross negligence or willful misconduct, shall be binding up
on the Company and the Designated Subsidiaries and shall not put NWUSA under any
resulting liability to the Company and the Designated Subsidiaries.
(e) The Company and each Designated Subsidiary shall at all times
protect, indemnify and save harmless NWUSA and each Bank from and against any
and all claims, actions, suits and other legal proceedings, and from and
against any and all loss, claims, demands, and from and against any and all
loss, claims, demands, liabilities, damages, costs, charges, counsel fees and
other expenses which NWUSA or any Bank may, at any time, sustain or incur by
reason of or in consequence of or arising out of the issuance of the L/Cs; it
being the intention of the parties that
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this Agreement shall be construed and applied to protect and indemnify NWUSA
and each Bank against any and all risk involved in the issuance of the L/Cs,
all of which risks are hereby assumed by the Company and each Designated
Subsidiary, including, without limitation, any and all risks of the acts or
omissions, whether rightful or wrongful, of any present or future de jure or de
facto government or governmental authority (all such acts and omissions, herein
called the "GOVERNMENTAL ACTS"); provided, however, that the Company and each
Designated Subsidiary shall not be required to indemnify NWUSA or any Bank for
(x) any claims, damages, losses, liabilities, costs or expenses to the extent,
but only to the extent, caused by the willful misconduct or gross negligence of
NWUSA (with respect to which, however, NWUSA shall be liable to the other
Banks) or (y) any breach of obligations of NWUSA to other Banks.
Notwithstanding any other provision contained in this Agreement, the
obligations of the Company and each Designated Subsidiary under this Section
2.22 shall survive the termination of this Agreement.
(f) In the event that the credit rating of NWUSA is down-graded to
less than "AA" by Standard & Poor's Corporation or any successor to the rating
agency business thereof and such down-grading will cause the Company or any
Designated Subsidiary to incur any additional expense or otherwise be adversely
affected, the Company or any Designated Subsidiary may replace any L/Cs issued
by NWUSA with L/Cs issued by National Westminster Bank PLC, any Bank or any
other bank, in each case with a credit rating of "AA" or better, provided that
any such letter of credit facility, shall not be entitled to the benefits of
this Agreement, and shall constitute Specified L/C Obligations (to the extent
provided in the definition thereof) with the effect of reducing the Available
L/C Commitment (in accordance with the definition thereof).
2.23 SEVERAL OBLIGATIONS. The failure of any Bank to make any Loan
or fund the L/C participation to be made by it on the date specified therefor
shall not relieve the other Banks of their respective obligations to make their
Loans on such date or fund the L/C participations, but no Bank shall be
responsible for the failure of the other Banks to make Loans or fund the L/C
participations to be made by such other Banks.
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SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce each Bank to enter into this Agreement and to make the
Loans and NWUSA to issue L/Cs hereunder, the Company and each Designated
Subsidiary, as applicable, hereby represents and warrants to such Bank that,
except as disclosed in the SEC Reports:
3.1 FINANCIAL CONDITION. The consolidated balance sheet of the
Company and its consolidated Subsidiaries as at December 31, 1992 and the
related consolidated statements of income, stockholders' equity and cash flows
for the fiscal year ended on such date, certified by Grant Thornton, copies of
which have heretofore been furnished to each Bank, and the unaudited
consolidated balance sheet and related consolidated statements of income,
stockholders equity and cash flow of the Company and its consolidated
Subsidiaries for the ending quarter September 30, 1993 present fairly, in
conformity with GAAP, the consolidated financial condition of the Company and
its consolidated Subsidiaries as at such date, and the consolidated results of
their operations and cash flows for the period then ended (subject to normal
year-end adjustments as to such September 30, 1993 financial statements). All
such financial statements have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by such
accountants and as disclosed therein). Neither the Company nor any of its
consolidated Subsidiaries had, at the date of the balance sheet referred to
above, any Contingent Obligation, contingent liability or liability for taxes,
long-term lease or unusual forward or long-term commitment, required to be
reflected under GAAP which is not reflected in the foregoing statements or in
the notes thereto and which was material to the Company and its consolidated
Subsidiaries taken as a whole (including, without limitation, any Environmental
Liability).
3.2 NO CHANGE. Since December 31, 1992 there has been no material
adverse change in the business, operations, property or financial condition of
the Company and its Subsidiaries taken as a whole.
3.3 CORPORATE EXISTENCE; COMPLIANCE WITH THE LAW. Each of the
Company and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, (b) has
the corporate power and authority and the legal right to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where
qualification is required by the nature of its business or the character and
location of its property or business and in which the failure to so qualify
could have a material adverse effect on the business, operations, property or
financial condition or results of operations of the Com-
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pany and its Subsidiaries taken as a whole and (d) is in compliance with all
Requirements of Law, including, without limitation, all applicable
Environmental Laws and Regulations, except to the extent that the failure to
comply therewith could not, in the aggregate, reasonably be expected to have a
material adverse effect on the business, operations, property or financial
condition of the Company and its Subsidiaries taken as a whole or to materially
adversely affect the ability of the Company to perform its obligations under
this Agreement or the Notes.
3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The
Company and each Designated Subsidiary has the corporate power and authority to
make, deliver and perform this Agreement, the Notes and the other documents
contemplated hereby. The Company and each Designated Subsidiary has taken all
necessary corporate action to authorize the execution, delivery and performance
of this Agreement, the Notes and the other documents contemplated hereby. No
consent or authorization of, or filing with, any Person (including, without
limitation, any Governmental Authority), is required in connection with the
execution, delivery, performance, validity or enforceability of this Agreement,
the Notes or the other documents contemplated hereby. This Agreement has been
duly executed and delivered on behalf of the Company and each Designated
Subsidiary, and this Agreement constitutes, and the Notes and the other
documents contemplated hereby when executed and delivered, will constitute,
legal, valid and binding obligations of the Company and each Designated
Subsidiary, enforceable against the Company and each Designated Subsidiary in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
3.5 NO LEGAL BAR. The execution, delivery and performance of this
Agreement, the Notes and the other documents contemplated hereby, the
borrowings hereunder and the use of the proceeds thereof, will not violate any
Requirement of Law or any Contractual Obligation of the Company or any of its
Subsidiaries, and will not result in or require the creation or imposition of
any Lien on any of its or their respective properties pursuant to any
Requirement of Law or any Contractual Obligation.
3.6 NO LITIGATION.
No litigation, investigation or proceeding, including, without
limitation, any Environmental Proceeding, of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Company,
threatened, by or against the Company or any of its Subsidiaries or against any
of its or their respective properties or revenues, (a) with respect to this
Agreement, the Notes, the Security Documents, the Guaranties or
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any other agreements or documents executed in connection therewith or any of
the transactions contemplated thereby or (b) which, if adversely determined,
would have a material adverse effect on the business, operations, property or
financial condition of the Company and its Subsidiaries taken as a whole.
3.7 FEDERAL REGULATIONS. No part of the proceeds of any Loans
hereunder will be used in violation of the provisions of the Regulations of the
Board of Governors of the Federal Reserve System, including without limitation
Regulations G, U and X.
3.8 INVESTMENT COMPANY ACT. Neither the Company nor any Subsidiary
is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
3.9 DISCLOSURE. The financial statements, certificates, opinions,
and other statements furnished in writing to the Agent or the Banks by or on
behalf of the Company or any Subsidiary in connection with this Agreement or
the transactions contemplated hereby do not, taken as a whole, contain any
untrue statement of a fact, or omit to state any fact necessary in order to
make the statements contained therein or herein not misleading, except for
matters which are not materially adverse to the business, operations, property
or financial condition of the Company and its Subsidiaries taken as a whole.
3.10 NO DEFAULT. Neither the Company nor any of its Subsidiaries
is in default under or with respect to any Contractual Obligation in any
respect which would be materially adverse to the business, operations, property
or financial condition of the Company and its Subsidiaries taken as a whole, or
which would materially adversely affect the ability of the Company to perform
its obligations under this Agreement or the Notes or the ability of any
Guarantor to perform its obligations under any Guaranty. No Default or Event
of Default has occurred and is continuing.
3.11 TAXES. Each of the Company and its Subsidiaries has filed or
caused to be filed all material tax returns which to its knowledge are required
to be filed, and has paid all taxes shown to be due and payable on said returns
or on any assessments made against it or any of its property and all other
material taxes, fees or other charges which to its knowledge have been imposed
on it or any of its property by any Governmental Authority (other than those
the amount or validity of which is currently being contested in good faith by
appropriate proceedings diligently pursued and with respect to which reserves
in conformity with GAAP have been provided in its books); no material tax liens
have been filed and, to the knowledge of the Company, no claims are being
asserted with respect to any such taxes, fees or other charges, except for
claims not material to the Company and its Subsidiaries taken as a whole.
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3.12 SUBSIDIARIES. At the date of this Agreement, the Company has
no Subsidiaries except those listed on Schedule IV, and the Company owns
directly or indirectly 100% of the outstanding voting shares of each such
Subsidiary except as disclosed therein.
3.13 OWNERSHIP OF PROPERTY; LIENS. Except as permitted in subsection
6.2, each of the Company and its Subsidiaries has good title in fee simple to
or valid leasehold interest in all its real property, and good title to all its
other property, and none of such owned property is subject to any Lien, except
for the security interest granted pursuant to the Security Indenture and Trust
Agreement, the Stock Security Agreement and the Company Pledge Agreement.
3.14 ERISA. Except as described on Exhibit H, as it may be updated
from time to time by the Company pursuant to subsection 5.8(c), neither the
Company, nor any Commonly Controlled Entity, is a participating employer in any
Plan in which more than one employer makes contributions as described in
Sections 4063 and 4064 of ERISA, which, together with all other liabilities
described in this subsection, could give rise to a liability which is material.
For purposes of this subsection, a liability is material if it, together with
all other such liabilities described in this subsection, could subject the
Company or any of its Subsidiaries to any tax, penalty, or other liabilities
material in relation to the business, operations, property or financial
condition of the Company and its Subsidiaries taken as a whole. Except as
described on Exhibit H, as it may be updated from time to time, neither the
Company nor any Commonly Controlled Entity has any contingent liability with
respect to any post-retirement benefit under any employee welfare benefit plan
(as defined in Section 3(1) of ERISA) other than (i) liability for health plan
continuation coverage as described in part 6 of Title 1 of ERISA, (ii)
liability under any severance plan, (iii) liability under plans or programs
required by law, and (iv) disability benefits under any tax-qualified pension
plans in an amount which together with all other liabilities described in this
subsection, could give rise to a liability which is material. Neither the
Company nor any Commonly Controlled Entity has received any notice from the
PBGC that any of the Single Employer Plans is being involuntary terminated and
no event shall have occurred, and there exists as of the date hereof no
condition or set of circumstances, which present a material risk of the
involuntary termination of any of the Single Employer Plans. Neither the
Company nor any Commonly Controlled Entity has incurred any liability to the
PBGC which remains outstanding other than the payment of premiums, and there
are no premiums which have become due which are unpaid. Each Single Employer
Plan that is intended to be qualified under Section 401(a) of the Code has been
determined by the Internal Revenue Service to be so qualified and each trust
related to such plan has been determined to be exempt under Section 501(a) of
the
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Code, or the period for obtaining such a determination letter has not expired;
and no event has occurred and no condition currently exists which might
reasonably be expected to give rise to a liability that is material as a result
of the failure of any plan that is intended to be qualified under Section
401(a) of the Code to be so qualified. No Plan is being audited or
investigated by any government agency or subject to any pending or threatened
claim or suit, which audit, investigation, pending claim or suit could
reasonably be expected to give rise to a liability, which together with all
other liabilities described in this subsection would be material. Each Single
Employer Plan currently meets and during the preceding six years has met the
minimum funding standard of Section 302 of ERISA and Section 412 of the Code
(without regard to any funding waiver). With respect to each Multiemployer
Plan, the Company and each Commonly Controlled Entity have paid or accrued to
the extent required by GAAP all contributions pursuant to the terms of each
applicable collective bargaining agreement. No Reportable Event has occurred
during the six-year period prior to the date on which this representation is
made or deemed made with respect to any Single Employer Plan which Reportable
Event, together with all other liabilities described in this subsection, could
give rise to a liability which is material, and each Single Employer Plan has
complied in all material respects with the applicable provisions of ERISA and
the Code. The present value of all benefit liabilities (within the meaning of
Title IV of ERISA) under each Single Employer Plan maintained by the Company or
any Commonly Controlled Entity (based on those assumptions used to fund the
respective Single Employer Plans) did not, as of the last annual valuation
date, exceed the value of the assets of such Single Employer Plan allocable to
such benefit liabilities by more than $2,500,000. Neither the Company nor any
Commonly Controlled Entity has any unsatisfied liability with respect to a
complete or partial withdrawal from any Multiemployer Plan, which together with
all other liabilities described in this subsection would be material, and, to
the best of the Company's knowledge, the liability to which the Company or any
Commonly Controlled Entity would become subject under ERISA if the Company or
any such Commonly Controlled Entity were to withdraw completely from all
Multiemployer Plans as of the valuation date most closely preceding the date
hereof would not, together with all other liabilities described in this
subsection, be material. No such Multiemployer Plan is in Reorganization or
Insolvent, where the liability which could reasonably be expected to result is
in an amount in excess of an amount which, taken together with all the
liabilities described in this subsection, is material. Neither the Company nor
any Commonly Controlled Entity is required to provide security to a Single
Employer Plan pursuant to Section 307 of ERISA or Section 401(a)(29) of the
Code. Neither the Company nor any Commonly Controlled Entity has engaged in a
transaction which could reasonably be expected to subject it to liability under
Section 4069 or 4212(c) of ERISA which liability together with all other
liabilities described in this subsection is material. Except as
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disclosed in Exhibit H, as it may be updated from time to time there are no
agreements which will provide payments to any officer, employee, shareholder or
highly compensated individual which will be parachute payments under Section
280G of the Code that are nondeductible to the Company or any Subsidiary and
which will be subject to the tax under Section 4999 of the Code for which the
Company or any Subsidiary would have a material withholding liability.
3.15 INDENTURES. (a) There have been delivered to the Agent and
each Bank a true and correct copy of each of the Indenture and the Security
Indenture and Trust Agreement, including all amendments, changes, supplements
and other side letters or agreements with respect thereto executed and
delivered by the Company thereunder, and all officer's certificates relating to
the collateral delivered by the Company to the Trustee during the term of the
Security Indenture and Trust Agreement and a list of any and all changes in the
collateral pledged thereunder. To the best of the knowledge of the Company,
the Indenture, the Security Indenture and Trust Agreement and all such other
documents have been duly executed and delivered by the parties thereto and are
in full force and effect at the date hereof. The Security Indenture and Trust
Agreement creates a legal, valid and enforceable and perfected first lien on
and security interest in all of the collateral pledged by the Company
thereunder for the benefit of the creditors of the Company listed on Schedule V
hereto in addition to the Agent and the Banks.
(b) The Obligations under this Agreement in respect of principal
and interest on the Notes constitute "Senior Indebtedness" as defined in the
Indenture and the Security Indenture and Trust Agreement.
3.16 SEC REPORTS. The Company has furnished the Agent with true
copies of the SEC Reports.
3.17 INTANGIBLE ASSETS. Each of the Company and the Subsidiaries
possesses all patents, trademarks, service marks, trade names, and copyrights,
and rights with respect to the foregoing (collectively, "PATENT RIGHTS"),
necessary to conduct its business as now conducted and as proposed to be
conducted, except for technology not material to the operations of the Company
and its Subsidiaries taken as a whole. To the best knowledge of the Company,
the Patent Rights do not conflict with the patents, trademarks, service marks,
trade names, and copyrights and rights with respect to the foregoing, of any
other Person except for conflicts which are not material to the operations of
the Company and its Subsidiaries taken as a whole.
3.18 NAME CHANGES, MERGERS, ACQUISITIONS. Except as set forth on
Exhibit G, neither the Company nor any of the Material Operating Subsidiaries
has within the six-year period immediately preceding the date of this Agreement
changed its
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name, been the surviving entity of a merger or consolidation, or acquired all
or substantially all of the assets of any Person.
3.19 LICENSES AND APPROVALS. The Company and each of the
Subsidiaries has all necessary licenses, permits and governmental
authorizations, including, without limitation, licenses, permits and
authorizations required to comply with all Environmental Laws and Regulations
to own and operate its properties and to carry on its business as now
conducted, except for licenses, permits and authorizations, which the failure
to have does not materially adversely affect the operations of the Company and
its Subsidiaries taken as a whole.
3.20 LABOR DISPUTES; COLLECTIVE BARGAINING AGREEMENTS; EMPLOYEE
GRIEVANCES. Except as set forth on Exhibit E, there is no pending strike, work
stoppage, material unfair labor practice claim or charge, arbitration or other
material labor dispute against or affecting the Company or any Subsidiary or
their representative employees.
3.21 SOLVENCY. To the best of the knowledge of the Company, the
Company and each Designated Subsidiary is Solvent and, after giving effect to
the receipt and application of the Loans and the issuance of L/Cs in accordance
with the terms of this Agreement, the Company and each Designated Subsidiary
shall continue to be Solvent.
3.22 OUTSTANDING INDEBTEDNESS FOR BORROWED MONEY. Schedule III
contains among other items a complete and accurate list of all Indebtedness of
the Company and its Subsidiaries for borrowed money, and all available
committed credit lines, outstanding on the date hereof.
3.23 NO ACTIONABLE EVENT. No Actionable Event (as defined in the
Security Indenture and Trust Agreement) has occurred.
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SECTION 4. CONDITIONS PRECEDENT
4.1 CONDITIONS TO INITIAL LOAN. The agreement of each Bank to make
its initial Loan hereunder and NWUSA to issue L/Cs shall be subject to the
satisfaction, immediately prior to or concurrently with the making of such Loan
or the issuance of any L/C, of each of the following conditions precedent:
(a) AGREEMENT. The Agent and each Bank shall have received this
Agreement, duly executed and delivered by the Company and each Designated
Subsidiary;
(b) NOTES. The Agent shall have received, for the account of each
Bank, a Note conforming to the requirements hereof and executed and delivered
by a duly authorized officer of the Company and each Designated Subsidiary;
(c) GUARANTY. The Agent and each Bank shall have received a
Guaranty, executed and delivered by a duly authorized officer of the Company
and each Material Operating Subsidiary;
(d) COLLATERAL.
(i) (A) The Company shall have given notice to the Security
Trustee under the Security Indenture and Trust Agreement terminating that
Security Trustee's position and shall have appointed the Agent as successor
Security Trustee thereunder; and (B) certificates evidencing all of the issued
and outstanding capital stock of the Existing Pledged Subsidiaries shall have
been delivered to the Agent or Security Trustee;
(ii) The Agent and each Bank shall have received the Stock
Security Agreement, duly executed and delivered by the Company and the Agent
shall have received all securities pledged to it thereunder accompanied by
stock powers endorsed in blank and irrevocable proxies relating thereto;
(iii) The Agent and each Bank shall have received the Company
Pledge Agreement, duly executed and delivered by the Company; and
(iv) The Agent and the Company shall have given written notice
to:
(A) The Agent in its capacity as successor Security
Trustee under the Security Indenture and Trust Agreement of the subordinate
security interest granted to the Agent for the benefit of the Banks pursuant to
the Company Pledge Agreement and shall have directed the Trustee thereunder to
deliver all securities pledged thereunder to the Agent upon termination of that
agreement; and
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(B) The Agent in its capacity as pledgee under the Stock
Security Agreement of the subordinate security interest granted to the Agent
for the benefit of the Banks pursuant to the Company Pledge Agreement and shall
have directed the Agent (under the Stock Security Agreement) to deliver all
securities pledged thereunder to the Agent (under the Company Pledge Agreement)
upon termination of the Stock Security Agreement.
(e) BORROWING CERTIFICATES. The Agent and each Bank shall have
received a certificate of the Company in substantially the form of Exhibit D-1
dated the Closing Date and executed and delivered by a duly authorized officer
of the Company and a certificate of each Designated Subsidiary and each
Subsidiary in substantially the form of Exhibit D-2 dated the Closing Date and
executed and delivered by a duly authorized officer of each Designated
Subsidiary or such Subsidiary;
(f) LEGAL OPINION. (i) The Agent and each Bank shall have received
the executed legal opinion of Elihu H. Modlin, Esq., counsel to the Company and
each Designated Subsidiary, dated the Closing Date, in substantially the form
of Exhibit F-1, together with copies of the legal opinions, if any, upon which
such counsel relies, with such changes thereto as may be approved by, and
otherwise in form and substance satisfactory to the Agent and its counsel and
covering such matters incident to the transactions contemplated by this
Agreement and the Notes as the Agent may reasonably require; (ii) Each Bank
shall have received the executed legal opinion of Winston & Strawn, counsel to
the Agent, dated the Closing Date in substantially the form of Exhibit F-2,
with such changes thereto as may be approved by, and otherwise in form and
substance satisfactory to the Banks and their counsel;
(g) RELATED AGREEMENTS. The Agent and each Bank shall have
received true and correct copies, certified as to authenticity by the Company
and each Material Operating Subsidiary, of the Certificate of Incorporation and
By-laws of the Company and each such Subsidiary and such other documents or
instruments to which the Company and its Subsidiaries are parties as may be
reasonably requested by the Agent;
(h) CORPORATE PROCEEDINGS. The Agent and each Bank shall have
received a copy of the resolutions, in form and substance reasonably
satisfactory to the Agent, of (i) the Board of Directors of the Company and
each Designated Subsidiary authorizing the execution, delivery and performance
of this Agreement, the Notes and all documents and instruments to be delivered
in connection herewith, certified by the Secretary or an Assistant Secretary of
the Company, as of the Closing Date and (ii) the Board of Directors of each
Material Operating Subsidiary authorizing the execution, delivery and
performance of its Guaranty and all documents and instruments to be delivered
in
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connection therewith, certified by the Secretary or an Assistant Secretary of
each such Subsidiary as of the Closing Date; and each such certificate shall
state that the resolutions thereby certified have not been amended, modified,
revoked or rescinded as of the date of such certificate;
(i) INDENTURES. The Agent shall have received, with a copy for
each Bank, a conformed copy of each of the Indenture and the Security Indenture
and Trust Agreement, together with all amendments, waivers or supplements
thereto and any other documents reasonably required in connection therewith
relating to the security interest granted in the Security Indenture and Trust
Agreement, including, without limitation, the documents referred to in
subsection 3.15;
(j) CONSENTS. The Agent, with a copy for each Bank, shall have
received true copies (in each case certified as to authenticity on such date by
a duly authorized officer of the Company or by such other Person as may be
appropriate or may be required by the Agent) of all documents and instruments,
including all consents, authorizations, filings and orders, required under any
Requirement of Law or by Contractual Obligations of the Company or any
Subsidiary, in connection with the execution, delivery, performance, validity
and enforceability of this Agreement, the Notes, the Security Documents and the
Guaranties and such consents, authorizations, filings and orders shall be
satisfactory in form and substance to the Agent and shall be in full force and
effect;
(k) FEES. The Agent shall have received for itself or for the
account of each Bank, as appropriate, the fees payable on the Closing Date
pursuant to subsection 2.7;
(l) GOOD STANDINGS. The Agent and each Bank shall have received
Good Standing certificates and telegrams (if obtainable) as of dates not more
than forty-five (45) and two (2) days, respectively, prior to the date of the
initial Loans or L/C, with respect to each of the Company and the Material
Operating Subsidiaries, from the Secretary of State of their respective states
of incorporation and each state in which each of them is qualified to do
business.
(m) INCUMBENCY CERTIFICATES. The Agent and each Bank shall have
received an incumbency certificate (with specimen signatures) with respect to
the Company and each of the Material Operating Subsidiaries.
(n) SOLVENCY CERTIFICATE. The Agent and each Bank shall have
received from the chief financial officer or treasurer of the Company a
Solvency Certificate with respect to the Company and each Designated
Subsidiary, respectively.
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4.2 CONDITIONS TO ALL LOANS. The agreement of each Bank to make
any Loan (including the initial Loans) and of NWUSA to issue any L/Cs requested
to be made or issued hereunder is subject to the satisfaction, immediately
prior to or concurrently with the making of such Loan or issuance of such L/C,
of the following additional conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. In the case of any Loan other
than a Refunding Borrowing, (x) each of the representations and warranties made
by the Company and its Material Operating Subsidiaries in or pursuant to this
Agreement (other than Sections 3.21 and 3.22) and the Guaranties and Security
Documents shall be true and correct in all material respects on and as of such
date as if made on and as of such date; and (y) the representation contained in
Section 3.21 shall be true and correct in all material respects as to the
Company and the Designated Subsidiary (if any) which is then proposing to
borrow such Loan, on and as of such date as if made on and as of such date;
(b) NO DEFAULT OR EVENT OF DEFAULT. In the case of any Loan other
than a Refunding Borrowing (except with respect to a Competitive Bid Loan, in
which case the provisions of this subsection (b) shall be applicable), no
Default or Event of Default shall have occurred and be continuing on such date
or after giving effect to the Loans requested to be made on such date and, in
the case of any Refunding Borrowing, no Event of Default shall have occurred
and be continuing on such date or after giving effect to the Loans requested to
be made on such date; provided, however, that after the occurrence and during
the continuance of a Default any borrowing shall be a NWUSA Rate Loan or a
Eurodollar Loan with an Interest Period not exceeding one (1) month.
(c) NO VIOLATIONS OF LAW. In the case of any Loan, such Loan and
the use of proceeds thereof shall not contravene, violate or conflict with, nor
involve any Bank in a violation of, any law, rule, injunction, or regulation,
or determination of any court of law or other Governmental Authority
(including, without limitation, Regulation U); and
(d) OTHER. All corporate or other proceedings, and all documents,
instruments and other legal matters in connection with the transactions
contemplated by this Agreement, the Notes, the Guaranties and the Security
Documents shall be reasonably satisfactory in form and substance to the Agent
and its counsel provided that this paragraph (d) shall not be a condition to
any Refunding Borrowing. Each borrowing by the Company and each Designated
Subsidiary hereunder shall constitute a representation and warranty by the
Company and each such borrowing Designated Subsidiary as of the date of such
borrowing that the conditions to such borrowing contained in subsections
4.2(a), (b) and (c) have been satisfied.
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4.3 CONDITIONS TO LOANS TO NEW DESIGNATED SUBSIDIARIES. The
agreement of each Bank to make any Loan and of NWUSA to issue any L/C to any
new Designated Subsidiary shall be subject to the receipt by each Bank, as
appropriate, of (i) a Credit Note and a Designated Subsidiary Acquisition Note,
(ii) corporate documents of such new Designated Subsidiary, (iii) a copy of an
opinion of counsel to the Company in substantially the form provided with
respect to Designated Subsidiaries on the Closing Date and (iv) any other
documents delivered in connection therewith.
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SECTION 5. AFFIRMATIVE COVENANTS
The Company hereby covenants and agrees with the Agent and the
Banks that, from and after the date of this Agreement until the Obligations are
paid in full and the Commitments are terminated and all L/Cs have expired or
been duly terminated, the Company shall, and, in the case of the agreements set
forth in subsections 5.3, 5.4, 5.5, 5.6, 5.7 and 5.11 shall cause each of its
Subsidiaries, to:
5.1 FINANCIAL STATEMENTS. Furnish to the Agent and each Bank:
(a) as soon as available, but in any event within 90 days after
the end of each fiscal year of the Company, copies of (i) the consolidated
balance sheets of the Company and its consolidated Subsidiaries as at the end
of such fiscal year and the related consolidated statements of income,
stockholders' equity and cash flows for such fiscal year, in each case setting
forth in comparative form the figures for the previous year, certified, without
qualification, by independent certified public accountants of recognized
standing reasonably acceptable to the Banks, and (ii) the consolidating balance
sheet of the Company and its consolidated Subsidiaries as at the end of such
fiscal year and the related consolidating statement of income for such fiscal
year, in each case showing intercompany eliminations, certified by the chief
financial officer of the Company as being, to the best of such officer's
knowledge, fairly stated in all material respects when considered in relation
to the consolidated financial statements of the Company and its consolidated
Subsidiaries.
(b) as soon as available, but in any event within 45 days after
the end of each of the first three fiscal quarters of the Company, copies of
(i) the unaudited consolidated balance sheets of the Company and its
consolidated Subsidiaries as at the end of such fiscal quarter and the related
unaudited consolidated statements of income and cash flows for such fiscal
quarter and for the portion of the fiscal year through such fiscal quarter,
certified by the chief financial officer of the Company as presenting fairly,
to the best of such officer's knowledge, the financial condition and results of
operations of the Company and its consolidated Subsidiaries (subject to normal
year-end audit adjustments) and (ii) the unaudited consolidating balance sheet
of the Company and its consolidated Subsidiaries as at the end of such fiscal
quarter and the related unaudited consolidating statement of income for the
portion of the fiscal year through such fiscal quarter, in each case showing
inter-company eliminations, certified by the chief financial officer of the
Company as being, to the best of such officer's knowledge, fairly stated in all
material respects when considered in relation to the consolidated financial
statements of the Company and its consolidated Subsidiaries;
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all such financial statements to be prepared in reasonable detail and (in the
case of such consolidated financial statements) in accordance with GAAP applied
consistently throughout the periods reflected therein (except as approved by
the Company's accountants or such financial officer, as the case may be, and
disclosed therein).
5.2 CERTIFICATES; OTHER INFORMATION. Furnish to the Agent and each
Bank:
(a) concurrently with the delivery of each set of the financial
statements referred to in clause (i) of paragraph (a) of subsection 5.1, a
certificate of the independent certified public accountants reporting on such
financial statements stating that in making the examination necessary therefor
no knowledge was obtained of any Default or Event of Default, except as
specified in such certificate;
(b) concurrently with the delivery of each set of the financial
statements referred to in paragraphs (a) and (b) of subsection 5.1, a
certificate of the chief financial officer of each Company (i) stating that, to
the best of such officer's knowledge, during such fiscal quarter the Company
has observed or performed in all material respects all of its covenants and
other agreements, and satisfied every condition contained in this Agreement to
be observed, performed or satisfied by it, and that such officer has obtained
no knowledge of any Default or Event of Default except as specified in such
certificate, and (ii) showing in reasonable detail the calculations supporting
such statement in respect of subsections 6.9, 6.10, 6.11, 6.12, 6.13 and 6.18;
(c) within five days after the same are sent, copies of all
financial statements and reports which the Company sends to its stockholders,
and within five days after the same are filed, copies of all financial
statements and reports which the Company may make to or file with the
Securities and Exchange Commission or any successor or analogous Governmental
Authority;
(d) not later than 90 days after the end of each fiscal year of
the Company, a copy of the projections by the Company of the operating budget
and cash flow of the Company and its Subsidiaries for the next succeeding
fiscal year, such projections to be accompanied by a certificate of a
Responsible Officer to the effect that such projections have been prepared on a
basis consistent with the Company's past practice (or otherwise stating the
basis on which such projections have been prepared); and
(e) promptly, such additional financial and other information as
the Agent or any Bank may from time to time reasonably request.
5.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy at
or before maturity or before they become
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delinquent, as the case may be, all (i) lawful taxes, assessments and
governmental charges or levies upon it or its property or assets, and (ii)
claims or demands of materialmen, mechanics, carriers, warehousemen, landlords
and other like Persons which, in any such case, if unpaid would by law give
rise to a Lien upon any of its property or assets, except when the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Company or its Subsidiaries, as the case may be.
5.4 GUARANTY BY MATERIAL OPERATING SUBSIDIARIES. Cause each new
wholly-owned Material Operating Subsidiary to guaranty the Obligations by the
execution and delivery of a Guaranty substantially in the form delivered by the
Guarantors at the Closing and each new Material Operating Subsidiary which is
not wholly-owned shall be obligated to guaranty the Obligations, but subject to
a maximum amount equal to a percentage of such Subsidiary's net worth equal to
the Company's percentage interests in such Subsidiary, by the execution and
delivery of a Guaranty appropriately modified to provide for the aforementioned
limit on the amount of such Guaranty.
5.5 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Except as
permitted by subsection 6.4, continue to engage in the Business of the Company,
and preserve, renew and keep in full force and effect its corporate existence
and take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business; and
comply with all Contractual Obligations and Requirements of Law including,
without limitation, all Environmental Laws and Regulations except to the extent
that the failure to comply therewith would not, in the aggregate, have a
material adverse effect on the business, operations, property or financial
condition of the Company and its Subsidiaries taken as a whole.
5.6 MAINTENANCE OF PROPERTY; INSURANCE. Keep all property useful
and reasonably necessary in its business in good working order and condition
except to the extent that breach of this clause would not materially adversely
affect the operations of the Company and its Subsidiaries taken as a whole;
maintain with reputable insurance companies believed by the Company to be
financially sound insurance on all its property in at least such amounts and
with only such deductibles and self insurance as are usually maintained by, and
against at least such risks (but including in any event product liability) as
are usually insured against in the same general area by, companies engaged in
the same or a similar business; and, furnish to the Agent and each Bank, upon
written request, full information as to the insurance carried.
5.7 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. Keep
proper books of record and account in which
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full, true and correct entries in conformity with GAAP and all material
Requirements of Law shall be made of all dealings and transactions in relation
to its business and activities; and permit representatives of the Agent or any
Bank as the representative of the Agent to visit and inspect any of its
properties and examine and make abstracts from such of its books and records as
the Agent or such Bank may reasonably request at any reasonable time and as
often as may reasonably be desired, and to discuss the aspects of the business,
operations, properties and financial and other condition of the Company and its
Subsidiaries as the Agent and such Bank may reasonably request with officers
and employees of the Company and its Subsidiaries and with its independent
certified public accountants, provided that mutually satisfactory advance
arrangements for any such visit or inspection shall be made with appropriate
representatives of the Company.
5.8 NOTICES. Give notice to the Agent (which upon receipt shall
give a copy thereof to each of the Banks) promptly after a Responsible Officer
has actual knowledge thereof, but in any event within five (or 30, in the case
of any event described in clause (c)(i) below) Business Days after such officer
shall have obtained such actual knowledge:
(a) of the occurrence of any Default or Event of Default;
(b) of any (i) default or event of default under any Contractual
Obligation of the Company or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between the Company or
any of its Subsidiaries and any Governmental Authority, which, in either case,
if not cured or if adversely determined, would have a material adverse effect
on the business, operations, property or financial condition of the Company and
its Subsidiaries taken as a whole;
(c) of the following events (i) the occurrence of any Reportable
Event with respect to any Single Employer Plan, which Reportable Event,
together with all other such Reportable Events, if any, could subject the
Company or any of its Subsidiaries to any tax, penalty or other liabilities in
the aggregate material in relation to the business, operations, property or
financial condition of the Company and its Subsidiaries taken as a whole, or
any withdrawal from, or the receipt by the Company from any Multiemployer Plan
of any notice regarding the termination, Reorganization or Insolvency of, any
Multiemployer Plan, (ii) the receipt by the Company from any Multiemployer Plan
of any notice regarding the institution of proceedings or the taking of any
other action by PBGC, the Company or any Commonly Controlled Entity or
Multiemployer Plan with respect to the withdrawal from, or the termination,
Reorganization or Insolvency of, any Plan subject to Title IV of ERISA, or
(iii) that a prohibited transaction has occurred (as defined in Section 406 of
ERISA or Section
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4975 of the Code), which could subject the Company or its Subsidiaries to tax
or penalty which would be material in relation to the business, operations,
property or financial condition of the Company and its Subsidiaries taken as a
whole. The Company shall update the exhibits referred to in Section 3.14
hereof as of the date any representations set forth therein is deemed to be
made;
(d) of any litigation or proceeding affecting the Company or any
of its Subsidiaries in which the amount involved is $10,000,000 or more and not
covered by insurance or in which material injunctive or similar relief is
sought;
(e) of a material adverse change in the business, operations,
property or financial or other condition of the Company and its Subsidiaries
taken as a whole from that reflected in the financial statements most recently
delivered to the Banks pursuant to subsection 5.1; and
(f) (i) any notice of any violation or administrative or judicial
complaint or order having been filed against the Company or such other
Subsidiary alleging violations of any Environmental Laws and Regulations, or
(ii) any notice from any governmental body alleging that the Company or such
other Subsidiary is or may be subject to any Environmental Liability; and
promptly upon receipt thereof, provide the Agent with a copy of such notice.
Upon the request of the Agent or any Bank, the Company will reasonably consult
with the Agent as to the subject matter of notices pursuant to this subsection
5.8.
5.9 COPIES OF CORPORATE DOCUMENTS. Promptly deliver to the Agent
copies of any amendments or modifications to its and any Subsidiary's
certificate of incorporation and by-laws, certified with respect to the
certificate of incorporation by the Secretary of State of its state of
incorporation and, with respect to the by-laws, by the secretary or assistant
secretary of such corporation.
5.10 PLEDGE OF SECURITIES. In the event of the receipt by the
Company of any securities pledged pursuant to the Security Indenture and Trust
Agreement and/or the Stock Security Agreement upon the termination of either
such agreement, the Company shall hold all such securities in trust for the
Agent and shall deliver them, in the identical form received, to the Agent
forthwith and, in addition, with respect to all of the pledged securities,
shall execute and deliver any stock power and/or other document or instrument
necessary or appropriate to evidence the pledge of such securities to the
Agent, and, with respect to the securities of the Existing Pledged
Subsidiaries, shall execute and deliver proxies as provided for in the Company
Pledge Agreement.
5.11 HAZARDOUS MATERIAL. Operate all property owned, operated or
leased by it in such a manner that (i) no Hazardous
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Material shall be placed, held, located or disposed of, on, under or at the
real property owned, operated or leased by the Company or any Subsidiary or any
part thereof, except for such Hazardous Materials which are necessary for the
Company's operation of its business thereon and which shall be used, stored,
treated and disposed of in compliance with all applicable Environmental Laws
and Regulations or (ii) such real property owned, operated or leased by the
Company or any Subsidiary or any part thereof shall not be used as a
collection, storage, treatment or disposal site for any Hazardous Material,
except, (x) in the case of clause (ii) above, in compliance with all
Environmental Laws or Regulations and (y) in each case to the extent failure to
comply with this subsection 5.11, in the aggregate, would not have a material
adverse effect on the business, operations, property or financial condition of
the Company and its Subsidiaries taken as a whole.
5.12 SENIOR INDEBTEDNESS. Execute and deliver all such documents
and instruments and take all such other actions as may be required from time to
time to insure that the Obligations at all times constitute "Senior
Indebtedness", as such term is defined in the Indenture and the Security
Indenture and Trust Agreement, while such agreements are in effect.
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SECTION 6. NEGATIVE COVENANTS
The Company hereby covenants and agrees with the Agent and the
Banks that, from and after the date of this Agreement until the Obligations are
paid in full and the Commitments are terminated and all L/Cs have expired or
been duly terminated, the Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly:
6.1 LIMITATION ON INDEBTEDNESS. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) the Loans;
(b) Indebtedness of the Company to any Subsidiary, and of any
Subsidiary to the Company or any other Subsidiary;
(c) Indebtedness of the Company and any of its Subsidiaries under
Financing Leases, or Indebtedness incurred upon refinancing or replacement of
such Financing Leases, or Indebtedness incurred in connection with (and not
later than 180 days following, in the case of the acquisition of land or
improvements; or 45 days following, in the case of the acquisition of other
property) the acquisition of property, or Indebtedness incurred to renew,
extend, refund, refinance or replace the foregoing, in an aggregate principal
amount not exceeding as to the Company and its Subsidiaries $25,000,000 at any
one time outstanding;
(d) certain Indebtedness outstanding on the date hereof and listed
on Schedule III, and extensions, renewals, refundings, refinancings and
replacements thereof (provided that Indebtedness indicated on Part A of
Schedule III may not be outstanding after February 25, 1994); and Indebtedness
incurred to finance property currently subject to existing operating leases
identified on Schedule III, to the extent that (i) the corresponding operating
lease is terminated, and (ii) the aggregate debt service under such
Indebtedness does not exceed the aggregate rental payments saved as a
consequence of the termination of such lease;
(e) Indebtedness of a corporation which becomes a Subsidiary after
the date hereof, provided that such Indebtedness existed at the time such
corporation became a Subsidiary and was not created in anticipation thereof
(such Subsidiary shall be deemed a Material Operating Subsidiary);
(f) additional unsecured subordinated Indebtedness of the Company,
provided that such Indebtedness is on such terms and pursuant to such
documentation as the Required Banks shall approve, which approval shall not be
unreasonably withheld;
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(g) Indebtedness of the Company and its Subsidiaries evidenced by
promissory notes or other contractual obligations of the Company given to the
sellers as part of the consideration for acquisitions permitted by subsection
6.7;
(h) other Indebtedness of the Company and its Subsidiaries not to
exceed $10,000,000 in the aggregate at any one time outstanding; provided,
further, however, that the aggregate Indebtedness of the Company under this
clause (h), when added to the Indebtedness under clauses (e) and (g) of this
subsection 6.1, shall not exceed, in the years indicated, the amounts set forth
below:
<TABLE>
<CAPTION>
Year Amount
---- ------
<S> <C>
1994 $20,000,000
1995 25,000,000
1996 30,000,000
1997 35,000,000
1998 - 1999 40,000,000; and
</TABLE>
(i) the Company and its Subsidiaries may sell or finance accounts
receivable and interests therein in an aggregate principal amount outstanding
at any time not in excess of $50,000,000; subject, however, to the provisions
of subsection 2.8(e) with respect to prepayment of the Loans and reduction of
the Commitment.
6.2 LIMITATION ON LIENS. Create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, other than:
(a) Liens for taxes, assessments, fees or other governmental
charges not yet due or which are being contested in good faith by appropriate
proceedings or other appropriate actions, provided that adequate reserves with
respect thereto are maintained on the books of the Company or its Subsidiaries,
as the case may be, in conformity with GAAP;
(b) statutory liens of landlords, carriers', warehouseman's,
mechanics', materialmen's, repairmen's, or other like Liens arising in the
ordinary course of business and not overdue for a period of more than 60 days
or which are being contested in good faith by appropriate proceedings or other
appropriate actions;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of tenders, bids, trade
contracts (other than for borrowed money), leases, statutory obligations,
surety and appeal bonds, performance bonds
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and other obligations of a like nature incurred in the ordinary course of
business or deposits incurred in connection with other obligations to the
extent such other obligations are covered by insurance;
(e) easements, (including, without limitation, reciprocal easement
agreements and utility agreements), rights-of-way, covenants, consents,
reservations, encroachments, minor defects or irregularities in title,
variations and other restrictions, charges or encumbrances (whether or not
recorded) affecting real or personal property, which individually or in the
aggregate do not or are not reasonably likely to have a material adverse effect
on the conduct by the Company and its Subsidiaries of their businesses taken as
a whole;
(f) Liens in existence on the date hereof listed on Schedule II
securing Indebtedness permitted by subsection 6.1, provided that no such Lien
is spread to cover any additional property (other than the proceeds thereof)
after the date hereof and that the principal amount of Indebtedness secured
thereby is not increased;
(g) Liens securing Indebtedness of the Company and its
Subsidiaries permitted by subsection 6.1(c) in respect of the deferred
acquisition price of property, provided that (i) such Liens shall be created
not later than (x) 180 days after the acquisition of such property in the case
of land or improvements, and (y) 45 days after the acquisition of other
property, (ii) such Liens do not at any time encumber any property other than
the property financed by such Indebtedness and the proceeds of such property so
financed, (iii) the principal amount of Indebtedness secured thereby is not
increased and (iv) the principal amount of Indebtedness secured by any such
Lien shall at no time exceed the original acquisition price of such property;
(h) Liens on the property or assets of a corporation which becomes
a Subsidiary after the date hereof securing Indebtedness permitted by
subsection 6.1(e), provided that (i) such Liens existed at the time such
corporation became a Subsidiary and were not created in anticipation thereof,
(ii) no such Lien is spread to cover any property or assets of such corporation
after the time such corporation becomes a Subsidiary (other than proceeds of
the property or assets which were the original subjects of such Lien), and
(iii) the principal amount of Indebtedness secured thereby is not increased
after such time;
(i) Liens existing on property or assets prior to the acquisition
thereof by the Company or any Subsidiary, provided that (i) such Liens were not
created in anticipation thereof, (ii) no such Lien is spread to cover any
additional property (other than the proceeds of the property or assets which
were the
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original subject of such Lien) and (iii) the principal amount of Indebtedness
secured thereby is not increased;
(j) Liens arising out of the refinancing, extension, renewal,
refunding or replacement of any Indebtedness secured by any Lien permitted by
any of the foregoing clauses of this subsection, provided that (i) no such Lien
is spread to cover any additional property (other than the proceeds of the
property which was the original subject of such Lien) and (ii) the principal
amount of Indebtedness secured thereby is not increased;
(k) Liens arising pursuant to any order of attachment, distraint
or similar legal process arising in connection with court proceedings so long
as the execution or other enforcement thereof is effectively stayed and the
claims secured thereby are being contested in good faith by appropriate
proceedings or other appropriate action;
(l) Liens securing reimbursement obligations in connection with
trade letters of credit issued on behalf of the Company or any Subsidiary in
the ordinary course of its business, provided that such Lien attaches solely to
the goods the acquisition of which is financed by such letter of credit and to
the proceeds thereof;
(m) Liens arising under the Security Indenture and Trust
Agreement, which secure only the obligations listed on Schedule V hereto;
(n) Liens arising under the Security Documents (other than the
Security Indenture);
(o) Liens arising from the sale of accounts receivable and
interests therein by the Company and its Subsidiaries in an aggregate principal
amount outstanding at any one time not in excess of $50,000,000;
(p) Financing Leases permitted under subsection 6.1; and
(q) Other Liens securing obligations which do not constitute
Indebtedness, the aggregate amount of which obligations does not exceed
$2,500,000 at any time outstanding.
6.3 LIMITATION ON CONTINGENT OBLIGATIONS. Create, incur, assume
or suffer to exist any Contingent Obligation, except (a) Contingent Obligations
in existence on the date hereof listed on Schedule III, (b) Contingent
Obligations of the Company in respect of obligations of any Material Operating
Subsidiary or of any Subsidiary in respect of Obligations of the Company or any
Material Operating Subsidiary and (c) Contingent Obligations of the Company and
its Subsidiaries supporting primary obligations
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of other Persons the aggregate amount of which does not exceed $4,000,000 in
the aggregate at any time.
6.4 LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger or
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign,
transfer or otherwise dispose of, all or substantially all of its property,
business or assets, provided that the Company and its Subsidiaries may sell or
otherwise dispose of assets pursuant to Asset Sales, subject, however, to the
following provisions:
(a) the Net Proceeds from all of such Asset Sales shall not exceed
$150,000,000 in the aggregate during the term of this Agreement;
(b) the Net Proceeds from such Asset Sales in each case shall be
applied in accordance with subsections 2.8(d) and (e), as applicable; and
(c) any evidence of indebtedness referred to in the definition of
Net Proceeds shall be pledged in accordance with the provisions of such
definition.
Notwithstanding the foregoing:
(x) any Subsidiaries of the Company may be merged or consolidated
with or into the Company (provided that the continuing or surviving corporation
shall be the Company), or with or into any one or more wholly-owned
Subsidiaries of the Company (provided that a wholly-owned Subsidiary shall be
the continuing or surviving corporation and that any such corporation be
organized under a state of the United States);
(y) any wholly-owned Subsidiary may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to the Company or a wholly-owned Subsidiary of the Company and the
proceeds of such sale, lease, transfer or other disposition will be ignored for
purposes of this subsection 6.4; and
(z) the Company may sell accounts receivable and interests therein
as otherwise provided in this Agreement.
6.5 DISTRIBUTIONS. Pay dividends or make any distribution of any
kind on the Company's outstanding stock, except that the Company may pay any
dividend payable solely in shares of its common stock and may pay dividends up
to the lesser of: (i) Twenty ($.20) cents per share of outstanding common
stock; and (ii) Four Million ($4,000,000) Dollars, in each case during any
calendar year, subject to the other provisions of this Agreement.
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6.6 LIMITATION ON DIVIDEND RESTRICTIONS REGARDING SUBSIDIARIES.
Except for any limitation or restriction pursuant to any applicable law, permit
any limitation or restriction to exist upon the ability of any Subsidiary to
declare or pay dividends in respect of the capital stock of such Subsidiary,
whether such limitation or restriction is imposed through a covenant limiting
dividends, through financial covenants or otherwise.
6.7 PROHIBITION ON INVESTMENTS, ACQUISITIONS, LOANS AND ADVANCES.
Make any advance, loan, extension of credit or capital contribution to, or
purchase any stock, bonds, notes, debentures or other securities of, or make
any other investment in, or purchase any assets constituting a going concern
business from, any Persons (all of the foregoing being herein called
"investments"), except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) loans and advances to employees of the Company or its
Subsidiaries for travel, entertainment, relocation and similar expenses or
otherwise, in the ordinary course of business;
(d) investments by the Company in its Subsidiaries and investments
by such Subsidiaries in the Company and in other Subsidiaries; provided, that
there shall not be outstanding at any time Special Subsidiary Loans in an
aggregate principal amount in excess of $15,000,000 (as used herein, "Special
Subsidiary Loans" means loans made by the Company and/or its wholly-owned
Subsidiaries to Subsidiaries which are not wholly-owned; "wholly-owned" means
wholly owned, directly or indirectly, by the Company);
(e) investments not to exceed (i) $40,000,000 in the aggregate
during any calendar year and (ii) $90,000,000 in the aggregate during the term
of this Agreement (the amount of any such investment to be determined at cost,
which cost shall include the aggregate amount of any Indebtedness assumed or
given in connection therewith) in connection with the acquisition of the stock
of any corporation, which thereupon shall be deemed to be a Material Operating
Subsidiary, or of the assets of any Person, provided that (i) such acquisition
shall have been approved or otherwise endorsed by the board of directors of
such Person or not contested (if no board approval is required) and (ii) such
corporation or assets are, prior to such acquisition, engaged or used, as the
case may be, in a business of the type described in subsection 5.5;
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(f) investments made with capital stock of the Company in connection
with the acquisition of the stock of any corporation which becomes a
Subsidiary, which thereupon shall be deemed to be a Material Operating
Subsidiary, or of the assets of any Person, provided that (i) such acquisition
shall have been approved or otherwise endorsed by the board of directors of
such Person or not contested (if no board approval is required) and (ii) such
corporation or assets are, prior to such acquisition, engaged or used, as the
case may be, in a business of the type described in subsection 5.5;
(g) investments made with common stock of the Company in connection
with the acquisition of the stock of any corporation which does not become a
Subsidiary as a result of such acquisition, provided, that the aggregate amount
of such investments shall not exceed $10,000,000 during the term of this
Agreement (the amount of the investment, in the case of each such acquisition,
being the market value, on the date of such acquisition, of the common stock of
the Company delivered as consideration in such acquisition); and
(h) other investments (but not a Special Subsidiary Loan) not to
exceed $20,000,000 in the aggregate (valued at cost) at any one time
outstanding and (except in the case of United States government securities) not
to exceed $4,000,000 in the securities of any one issuer.
6.8 PROHIBITION ON OPTIONAL PREPAYMENTS. Prepay, purchase, redeem,
retire, defease or otherwise acquire, or make any optional payment on account
of any principal of, interest on, or premium payable in connection with the
optional prepayment, redemption or retirement of any of its Subordinated
Indebtedness, except that nothing in this subsection 6.8 shall be deemed to
prevent the Company from:
(a) making a commitment to prepay, redeem or otherwise acquire or
pay any Subordinated Indebtedness which by its terms is convertible into common
stock of the Company for the purpose of inducing the holders of such
Indebtedness to so convert such Indebtedness; and
(b) in connection with any induced conversions of convertible
subordinated Indebtedness, acquiring or paying any such Indebtedness which is
not converted into common stock of the Company as a result of such inducement,
provided that the aggregate amount of money expended by the Company and its
Subsidiaries in connection with such acquisition and payment does not exceed
the sum of (i) the net cash proceeds to the Company of any substantially
contemporaneous sale of its common stock, (ii) an amount equal to 2% of the
aggregate principal amount of the issue of convertible subordinated
Indebtedness being so acquired or paid outstanding immediately prior to the
public announcement by
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the Company of such acquisition or payment and (iii) the fees and expenses
incurred in connection with such acquisition or payment.
6.9 TANGIBLE NET WORTH. Permit Consolidated Tangible Net Worth
plus Subordinated Indebtedness created pursuant to the Indenture to be less
than the following amounts at all times during the specified time periods: (a)
for the final three fiscal quarters of 1994, $90,000,000, (b) during the final
three fiscal quarters of 1995, $90,000,000 plus 75% of positive Consolidated
Net Income of the Company and its consolidated Subsidiaries for the fiscal year
ending on December 31, 1994 and (c) during the final three fiscal quarters of
each fiscal year thereafter, an amount equal to the sum of (x) the required
minimum amount for the immediately preceding fiscal year pursuant to this
subsection 6.9 plus (y) 75% of positive Consolidated Net Income for such
immediately preceding fiscal year.
6.10 LEVERAGE RATIO. Permit the ratio of (i) the difference
between Indebtedness of the Company and its Subsidiaries for borrowed money
less Subordinated Indebtedness created pursuant to the Indenture to (ii) the
sum of Consolidated Tangible Net Worth plus Subordinated Indebtedness created
pursuant to the Indenture (the "LEVERAGE RATIO") at any time to exceed 1.5:1.0;
provided, however, that in determining such ratio the Consolidated Tangible Net
Worth during each fiscal quarter shall be the amount determined on the basis of
the consolidated financial statements of the Company and its Subsidiaries as at
the end of the preceding fiscal quarter, except that during the second fiscal
quarter of each fiscal year the Consolidated Tangible Net Worth shall be the
amount determined on the basis of the consolidated financial statements as of
the end of the Company's most recently completed fiscal year.
6.11 FIXED CHARGE COVERAGE RATIO. Permit the Fixed Charge Coverage
Ratio to be less than 1.1 to 1.0; provided, however, that if the Fixed Charge
Coverage Ratio shall be less than 1.1:1.0 at any time during the term of this
Agreement then, notwithstanding the occurrence of an Event of Default as a
result thereof, during the continuance of such Event of Default:
(a) The Applicable Margin and the Issuance Fee each shall be
increased by .25% in excess of the highest Applicable Margins and Issuance Fees
otherwise provided in the definition of each such term; and
(b) The Facility Fee shall be increased by .0625% in excess of the
highest Facility Fee otherwise provided in the definition thereof.
6.12 CURRENT RATIO. Permit the ratio of Consolidated Current
Assets to Consolidated Current Liabilities at any time to be less than 2.0 to
1.0; provided, that for the purposes of calculating this ratio, borrowings
under this Agreement shall be
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excluded from the computation of Consolidated Current Liabilities.
6.13 WORKING CAPITAL. Permit Consolidated Working Capital at any
time to be less than $80,000,000; provided, that for the purposes of
calculating this ratio, borrowings under this Agreement shall be excluded from
the computation of Consolidated Current Liabilities.
6.14 NO AMENDMENT WITHOUT CONSENT. Amend, waive or modify any
provision of the Indenture or amend, waive, or modify any provision of the
Security Indenture and Trust Agreement in any manner which would affect the
security interest granted to the Banks thereunder without the prior written
consent of the Agent and the Required Banks.
6.15 FISCAL YEAR. Change its fiscal year except with the consent
of the Agent which will not be unreasonably withheld.
6.16 TRANSACTIONS WITH AFFILIATES. Except as otherwise permitted by
this Agreement, directly or indirectly: (a) make any Investment in an Affiliate
except any Investments permitted under subsection 6.7 shall be permitted
hereunder; (b) transfer, sell, lease, assign or otherwise dispose of any assets
to an Affiliate; (c) merge into or consolidate with or purchase or acquire
assets from an Affiliate; or (d) enter into any other transaction directly or
indirectly with any Affiliate; provided, however, that: (i) payments on
Investments permitted by subsection 6.7 shall be permitted hereunder, (ii) any
Affiliate who is a natural person may serve as an employee or director of the
Company or any Subsidiary and receive such compensation and benefits for his
services in such capacity as the Board of Directors of the Company or such
Subsidiary shall in good faith determine, and (iii) the Company or any
Subsidiary may enter into any transaction with an Affiliate if the monetary or
business consideration arising therefrom would be substantially as advantageous
to the Company or a Subsidiary as the monetary or business consideration that
would reasonably be expected by the Company or such Subsidiary to be obtained
in a comparable arm's length transaction with a Person not an Affiliate.
6.17 OWNERSHIP OF DESIGNATED SUBSIDIARIES. Cease to own all of the
issued and outstanding capital stock of any Designated Subsidiary so long as
any such Subsidiary continues to be a Designated Subsidiary.
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6.18 LIMITATION ON CAPITAL EXPENDITURES. Make Capital Expenditures
(i) in excess of $125,000,000 during the five-year period ending with the
Termination Date, (ii) in excess of $37,500,000 during any fiscal year which
follows the 1993 fiscal year, or (iii) in excess of $56,250,000 during any
period of two consecutive fiscal years following the 1993 fiscal year.
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SECTION 7. EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the
following events:
(a) The Company or any Designated Subsidiary shall fail to pay any
principal of any Note when due in accordance with the terms thereof or hereof,
or the Company or any Designated Subsidiary shall fail to pay any interest on
any Note or to pay any fee, the amount of which is provided for herein or in
the Fee Letter, within five (5) Business Days after any such amount becomes due
in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by the
Company or any of its Subsidiaries in this Agreement, the Security Documents,
the Guaranties or in any certificate, document or financial or other statement
furnished at any time under or in connection herewith or therewith shall prove
to have been incorrect in any material respect on or as of the date made or
deemed made; or
(c) The Company or any of its Subsidiaries shall default in the
observance or performance of any covenant or agreement contained in Section 6
of this Agreement; or
(d) The Company or any of its Subsidiaries shall default in the
observance or performance of any other covenant or agreement contained in this
Agreement, or contained in the Security Documents or its Guaranty (other than
as set forth in clauses (a) through (c) of this Section 7) and such default
shall continue unremedied for a period of 30 days after notice thereof from the
Agent to the Company; or
(e) The Company or any of its Subsidiaries shall (i) default in
the payment of principal of or interest on any Indebtedness (other than the
Notes) which Indebtedness is in an aggregate principal amount equal to or
greater than $10,000,000 or in the payment of any Contingent Obligation (other
than any Guaranty) relating to any primary obligation the aggregate principal
amount of which is equal to or greater than $10,000,000, beyond the period of
grace, if any, provided in the instrument or agreement under which such
Indebtedness or Contingent Obligation was created or (ii) default in the
observance or performance of any other agreement or condition relating to any
such Indebtedness (other than the Notes) or Contingent Obligation (other than
any Guaranty) or contained in any instrument or agreement evidencing, securing
or relating thereto, or any other event shall occur or condition exist, the
effect of which default or other event or condition described in either clause
(i) or (ii) of this paragraph is to cause, or to permit the holder or holders
of such Indebtedness or beneficiary or beneficiaries of such Contingent
Obligation (or a trustee or
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agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause such Indebtedness to become due prior to its stated maturity or such
Contingent Obligation to become payable; or
(f) (i) The Company or any of its Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it as bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, wind-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its assets, or
the Company or any of its Subsidiaries shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against the Company
or any of its Subsidiaries any such case, proceeding or other action referred
to in clause (i) which (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed, unstayed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against the Company or any of its Subsidiaries any case, proceeding
or other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its assets
which results in the entry of an order for any such relief which shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or (iv) the Company or any of its Subsidiaries shall
take any action authorizing, or in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set forth above in clause
(i), (ii) or (iii) above; or (v) the Company or any of its Subsidiaries shall
generally not, or shall be unable to, or shall admit in writing its inability
to, pay its debts as they become due; or
(g) One or more judgments or decrees shall be entered against the
Company or any of its Subsidiaries involving in the aggregate a liability (to
the extent not paid or fully covered by insurance) of $5,000,000 or more and
all such judgments or decrees shall not have been vacated, satisfied,
discharged, stayed or bonded pending appeal within 60 days from the entry
thereof; or
(h) (i) Any Person shall engage in any "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan or engage in a transaction which could subject such person to liability
under Section 502(l) of ERISA, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist with
respect to any Single Employer Plan, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to
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have a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or institution of
proceedings or appointment of a trustee is, in the reasonable opinion of the
Agent, likely to result in the termination of Single Employer Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall, other than in
standard termination, terminate for purposes of Title IV of ERISA, or (v) the
Company or any Commonly Controlled Entity shall, or is, in the reasonable
opinion of the Agent, likely to, incur any liability in connection with its
failure to meet any obligation arising out of a withdrawal from, or the
Insolvency or Reorganization of, a Multiemployer Plan and in each case in
clauses (i) through (v) above, such event or condition, together with all other
such events or conditions, if any, which have occurred or exist could
reasonably be expected to subject the Company or any of its Subsidiaries to any
tax, penalty or other liabilities in the aggregate material in relation to the
business, operations, property or financial condition of the Company and its
Subsidiaries taken as a whole; or
(i) (A) Any Material Operating Subsidiary of the Company which
becomes a Subsidiary after the Closing Date shall fail to execute and deliver
to the Agent a Guaranty in accordance with subsection 5.4 within 10 days after
becoming a Material Operating Subsidiary; or (B) The Company shall fail to
pledge all of the capital stock owned by the Company in any Subsidiary referred
to in clause (A) (whether or not wholly-owned) pursuant to the Stock Security
Agreement or Company Pledge Agreement (whichever is then in effect) within 10
days after such Subsidiary becomes a Material Operating Subsidiary; or
(j) A Change of Control shall occur;
then, and in any such event, (x) if such event is an Event of Default specified
in paragraph (f) above with respect to the Company, automatically the
Commitments shall immediately terminate and the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement and the
Notes shall immediately become due and payable, and (y) if such event is any
other Event of Default, either or both of the following actions may be taken:
(i) with the consent of the Required Banks, the Agent may, or upon the request
of the Required Banks, the Agent shall, by notice to the Company, declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; and (ii) with the consent of the Required Banks, the
Agent may, or upon the request of the Required Banks, the Agent shall, declare
the Loans (with accrued interest thereon) and all other amounts owing under
this Agreement and the Notes to be due and payable forthwith, whereupon the
same shall immediately become due and payable. In addition, after the
occurrence and during the continuance of an Event of Default, the Company and
each Subsidiary shall, promptly upon demand by the Agent, deliver to the Agent
cash collateral in such form as reasonably requested
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by the Agent, for deposit in a cash collateral account, in a maximum amount
equal to the undrawn amount of all L/Cs then outstanding, to be maintained by
the Agent as an interest-bearing deposit account under the sole dominion and
control of the Agent as pledgee, and shall execute and deliver such documents
and instruments (including a pledge agreement) as the Agent may reasonably
request in order to perfect or protect the Agent's lien and security interest
in such collateral account to secure payment of the Reimbursement Obligations
with respect to L/Cs then outstanding. Such deposit shall be held by the Agent
as such security for the ratable benefit of the Banks. Upon cure of the Event
of Default, all such cash collateral (and interest accrued thereon) shall
promptly be returned to the Company and its Subsidiaries). Except as expressly
provided above in this Section 7, presentment, demand, protest and all other
notices of any kind are hereby expressly waived.
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SECTION 8. THE AGENT
8.1 APPOINTMENT. Each Bank hereby irrevocably designates and
appoints National Westminster Bank USA as the Agent for such Bank under this
Agreement, the Notes, the Security Documents and the Guaranties, and each such
Bank irrevocably authorizes National Westminster Bank USA, as Agent for such
Bank, to take such action on its behalf under the provisions of this Agreement,
the Notes, the Security Documents and the Guaranties and to exercise such
powers and perform such duties as are expressly delegated to the Agent by the
terms of this Agreement, the Notes, the Security Documents and the Guaranties,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Bank, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or otherwise exist against the Agent.
8.2 DELEGATION OF DUTIES. The Agent may execute any of its duties
under this Agreement, the Notes, the Security Documents and the Guaranties by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Agent shall not
be responsible for the negligence or misconduct of any agents or attorneys-
in-fact selected by it with reasonable care.
8.3 EXCULPATORY PROVISIONS. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall
be (i) liable for any action lawfully taken or omitted to be taken by it or
such Person under or in connection with this Agreement, the Notes, the Security
Documents or the Guaranties (except for its or such Person's own gross
negligence or willful misconduct), or (ii) responsible in any manner to any of
the Banks for any recitals, statements, representations or warranties made by
the Company, or any Subsidiary or any officer thereof contained in this
Agreement, the Notes, the Security Documents or the Guaranties or in any
certificate, report, statement or other document referred to or provided for
in, or received by the Agent under or in connection with, this Agreement, the
Notes, the Security Documents or the Guaranties or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement,
the Notes, the Security Documents or the Guaranties or for any failure of the
Company or any Subsidiary to perform its obligations hereunder or thereunder.
The Agent shall be under no obligation to any Bank to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement, the Notes, the Security Documents or the
Guaranties, or to inspect the properties, books or records of the Company or
any Subsidiary.
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8.4 RELIANCE BY AGENT. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any Note, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, or
teletype message, statement, order or other document or conversation believed
by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Company and any Subsidiary),
independent accountants and other experts selected by the Agent. The Agent may
deem and treat the payee of any Note as the owner thereof for all purposes
unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Agent. The Agent shall be fully justified in failing
or refusing to take any action under this Agreement, the Notes, the Security
Documents and the Guaranties unless it shall first receive such advice or
concurrence of the Required Banks as it deems appropriate or it shall first be
indemnified to its satisfaction by the Banks against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. The Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement, the Notes, the Security
Documents and the Guaranties in accordance with a request of the Required
Banks, and such request and any action taken or failure to act pursuant thereto
shall be binding upon all the Banks and all future holders of the Notes.
8.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Bank, the Company or any
Subsidiary referring to this Agreement, describing such Default or Event of
Default and stating that the notice is a "notice of default". In the event
that the Agent receives such a notice, the Agent shall give prompt notice
thereof to the Banks. The Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Banks; provided that unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Banks.
8.6 NON-RELIANCE ON AGENT AND OTHER BANKS. Each Bank expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by the Agent hereinafter taken, including
any review of the affairs of the Company or any Subsidiary, shall be deemed to
constitute any representation or warranty by the Agent to any Bank. Each Bank
represents to the Agent 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 appro-
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priate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Company and each Subsidiary and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Bank also represents 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 analysis, appraisals and decisions in
taking or not taking action under this Agreement, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Company. Except for notices, reports and other documents expressly required to
be furnished to the Banks by the Agent hereunder, the Agent shall have no duty
or responsibility to provide any Bank with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of the Company and its Subsidiaries which may come into the
possession of the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
8.7 INDEMNIFICATION. The Banks agree to indemnify the Agent in
its capacity as such (to the extent not reimbursed by the Company and without
limiting the obligation of the Company to do so), ratably according to the
respective amounts of their Commitments, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including without limitation at any time following the payment of the
Notes) be imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of this Agreement, the Notes, the Security Documents
or the Guaranties or any documents contemplated by or referred to herein or the
transactions contemplated hereby or any action taken or omitted by the Agent
under or in connection with any of the foregoing; provided that no Bank shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from the Agent's gross negligence or willful
misconduct. The agreements in this subsection shall survive the payment of the
Notes and all other amounts payable hereunder.
8.8 AGENT IN ITS INDIVIDUAL CAPACITY. The Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with the Company and its Subsidiaries as though the Agent were not the
Agent hereunder. With respect to its Loans made or renewed by it and any Note
issued to it, the Agent shall have the same rights and powers under this
Agreement as any Bank and may exercise the same as though it were not the
Agent, and the terms "Bank" and "Banks" shall include the Agent in its
individual capacity.
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8.9 SUCCESSOR AGENT. The Agent may resign as an Agent upon 20 days'
notice to the Banks. If the Agent shall resign as the Agent under this
Agreement, then the Required Banks shall appoint from among the Banks a
successor agent for the Banks which successor agent shall be approved by the
Company, whereupon such successor agent shall succeed to the rights, powers and
duties of the Agent which resigned, and the term "Agent", shall mean such
successor agent effective upon its appointment, and the former Agent's rights,
powers and duties as the Agent shall be terminated, without any other or
further act or deed on the part of such former Agent or any of the parties to
this Agreement or any holders of the Notes; provided however, that upon the
occurrence and during the continuance of an Event of Default the approval of
the Company of the successor agent shall not be required hereunder. Upon its
resignation hereunder, each Agent shall execute and deliver any documents
relating to its actions as Agent which may be necessary to permit the successor
agent to act as Agent hereunder. After any retiring Agent's resignation
hereunder as the Agent, the provisions of this subsection 8.9 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
the Agent under this Agreement.
8.10 FAILURE TO ACT. Except for action expressly required of the
Agent hereunder, the Agent shall in all cases be fully justified in failing or
refusing to act hereunder unless it shall be indemnified to its satisfaction by
the Banks against any and all liability and expense that may be incurred by it
by reason of taking or continuing to take any such action.
8.11 CO-AGENTS. The parties hereto acknowledge that the Co-Agents
have been designated as such for purposes of convenience only, and that the
Co-Agents shall not have any duties or responsibilities, except those which may
be expressly set forth in a written agreement signed by the Co-Agents, or any
fiduciary relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Co- Agents or any of them.
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SECTION 9. MISCELLANEOUS
9.1 AMENDMENTS AND WAIVERS. With the written consent of the
Required Banks, the Agent, the Company and the Designated Subsidiaries may,
from time to time, enter into written amendments, supplements or modifications
hereto for the purpose of adding any provisions to this Agreement or the Notes
or changing in any manner the rights of the Banks or the Company and the
Designated Subsidiaries hereunder, and the Agent may execute and deliver to the
Company and the Designated Subsidiaries a written instrument waiving, on such
terms and conditions as the Agent may specify in such instrument, any of the
requirements of this Agreement or the Notes or any Default or Event of Default
and its consequences; provided, however, that no such waiver and no such
amendment, supplement or modification shall (a) extend the maturity of any
Loan, or reduce the principal amount thereof, or change the amount or
termination date of any Bank's Commitment, or release, amend or modify any
Guaranty or any collateral covered by any of the Security Documents, or reduce
the interest rate or Facility Fee, Issuance Fee or Drawing Fee payable
hereunder or extend the time of payment of interest and any fees hereunder or
the time of reimbursement of any draws under L/Cs or amend the definition of
"Required Banks" or increase the L/C Sublimit, or amend, modify or waive any
provision of subsection 4.1 or 4.2 or this subsection 9.1, or consent to the
assignment or transfer by the Company and each Designated Subsidiary of any of
its rights and obligations under this Agreement, in each case without the
written consent of all of the Banks, or (b) amend, modify or waive any
provision of Section 8 without the written consent of the then Agent (with any
such change in any provision of Section 8 to be effective prospectively only).
Any such waiver and any such amendment, supplement or modification shall be
binding upon the parties to this Agreement and all holders of the Notes. In
the case of any waiver, the parties to this Agreement shall be restored to
their former position and rights hereunder and under the outstanding Notes, and
any Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
9.2 NOTICES. All notices, consents, requests and demands to or
upon the respective parties hereto to be effective shall be in writing or by
telegraph or telecopy and, unless otherwise expressly provided herein, shall be
deemed to have been duly given or made when delivered by hand, or four (4)
Business Days after deposit in the mail, registered mail, return receipt
requested, postage prepaid, or, in the case of telegraphic or telecopy notice,
when received, addressed as follows in the case of the Company and the
Designated Subsidiaries and the Agent, and as set forth on the signature pages
hereto in the case of the other parties hereto, or to such address or other
address as may
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be hereafter notified by any of the respective parties hereto or any future
holders of the Notes:
The Company
or any
Designated
Subsidiary: Ply Gem Industries, Inc.
777 Third Avenue
New York, New York 10017
Attention: Herbert P. Dooskin
Executive Vice President
Telephone: (212) 832-1550
Telecopy: (212) 888-0472
With copies to: Elihu Modlin, Esq.
EAB Plaza
12th Floor
West Tower
Uniondale, New York 11556-0132
Telephone: (516) 794-4600
Telecopy: (516) 794-4604
Donald A. Stern, Esq.
Cleary, Gottlieb, Steen
& Hamilton
1 Liberty Plaza
New York, New York 10006
Telephone: (212) 225-2640
Telecopy: (212) 225-3999
The Agent: National Westminster Bank USA, as Agent
592 Fifth Avenue
New York, New York 10036
Attention: Robert Petersen
Vice President
Telephone: (212) 602-2293
Telecopy: (212) 602-2080
with a copy to: Winston & Strawn
175 Water Street
New York, New York 10038
Attention: Donald L. Laufer, Esq.
Telephone: (212) 858-6718
Telecopy: (212) 952-1474
provided that any notice, request or demand to or upon the Agent or the Banks
pursuant to subsection 2.3, 2.6, 2.7 or 2.8 shall not be effective until
received.
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9.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Agent or any Bank, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies,
powers and privileges provided by law.
9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement and the Notes and the making of the Loans and
the issuance of L/Cs.
9.5 PAYMENT OF EXPENSES, ETC. The Company agrees (a) to pay or
reimburse the Agent for all its reasonable out-of- pocket costs and expenses
incurred in connection with the preparation, execution and delivery of, and any
amendment, supplement or modification to, this Agreement, the Notes, the
Security Documents, the Guaranties and any other documents prepared in
connection herewith, and the consummation of the transactions contemplated
hereby and thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Agent in connection therewith, all reasonable
and customary syndication expenses, including without limitation travel
expenses incurred by the Agent in connection with due diligence and syndication
member and prospective member meetings and typesetting duplication and binding
expenses with respect to materials for syndicate members, (b) to pay or
reimburse each Bank and the Agent for all its reasonable out-of-pocket costs
and expenses incurred in connection with the enforcement or preservation of any
rights against the Company or any of its Subsidiaries under this Agreement, the
Notes, the Security Documents, the Guaranties and any such other documents, (c)
to pay, indemnify, and to hold each Bank and the Agent harmless from, any and
all recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other taxes, if any, if
legal, which may be payable or reasonably determined to be payable in
connection with the execution and delivery of, or consummation of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the Notes, the
Security Documents, the Guaranties and any such other documents, and (d) to
pay, indemnify, and hold each Bank and the Agent harmless from and against any
and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to, or arising out of, the execution, delivery,
enforcement and performance of this Agreement, the
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Notes, the Security Documents or the Guaranties or related to any Environmental
Liability or Environmental Proceeding (other than costs, expenses and
disbursements incurred by Banks other than the Agent in negotiating and closing
the transactions contemplated hereby)(all the foregoing, collectively, the
"INDEMNIFIED LIABILITIES"), provided that the Company shall have no obligation
hereunder to the Agent or any Bank with respect to indemnified liabilities
arising from (i) the gross negligence or willful misconduct of the Agent or any
such Bank, (ii) legal proceedings commenced against the Agent or any such Bank
by any security holder or creditor of the Agent or any such Bank arising out of
and based upon rights afforded any such security holder or creditor solely in
its capacity as such, or (iii) any breach of obligations of any Bank
(including, without limitation, the Agent in its capacity as such) to any other
Bank, and (e) acknowledges that the Agent and the Banks shall, prior to
foreclosure of, or exercise by them of proxy rights with respect to, any of the
shares of Subsidiaries securing the Loans, have no liability or responsibility
for either:
(i) damage, loss or injury to human health, the environment or natural
resources caused by the presence, disposal, release or threatened release
of Hazardous Materials on any part of the real property owned, operated
or leased by the Company or its Subsidiaries; or
(ii) abatement and/or clean-up required under any applicable
Environmental Laws and Regulations for a release, threatened release or
disposal of any Hazardous Materials located at the real property owned,
operated or leased by the Company or its Subsidiaries or used by or in
connection with the Company's or any Subsidiary's business.
The agreements in this subsection shall survive repayment of the Notes and all
other amounts payable hereunder; provided, however, that nothing herein shall
affect the provisions relating to 180-day periods contained in subsections
2.15, 2.16 and 2.22.
9.6 BINDING EFFECT; NO ASSIGNMENT OR DELEGATION BY COMPANY OR ANY
DESIGNATED SUBSIDIARY. This Agreement shall be binding upon and inure to the
benefit of the Company and each Designated Subsidiary and their successors and
to the benefit of the Banks and the Agent and their respective successors and
assigns. The rights and obligations of the Company and each Designated
Subsidiary under this Agreement shall not be assigned or delegated without the
prior written consent of the Agent, and each Bank, and any purported assignment
or delegation without such consent shall be void.
9.7 ASSIGNMENTS AND PARTICIPATIONS BY BANKS; PLEDGE TO FEDERAL
RESERVE BANK. (a) Each Bank may assign to one or more banks or other entities
all or a portion of its rights and obligations under this Agreement (including,
without limitation,
91
<PAGE> 97
all or a portion of its Commitment, the Loans owing to it, and the Note or
Notes held by it); provided, however, that: (i) 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, (ii) the amount of the Commitment
of the assigning Bank being assigned pursuant to each such assignment
(determined as of the date of the Assignment and Acceptance with respect to
such assignment) shall in no event be less than $5,000,000 and shall be an
integral multiple of $1,000,000 (except, in each case, in connection with the
sale by any Bank of its entire Commitment), and (iii) each such assignment
shall be to an Eligible Assignee which, as a result of such assignment, shall
hold, Commitments of not less than $10,000,000 in the aggregate subject to pro
rata reduction in the event of the reduction of the Commitments pursuant
hereto. Upon the execution, delivery, acceptance and recording, from and after
the effective date specified in each Assignment and Acceptance, which effective
date shall be at least three Business Days after the execution thereof: (x)
the assignee thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it pursuant to such Assignment
and Acceptance, have the rights and obligations of a Bank hereunder, and (y)
the Bank assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Bank's rights and obligations under this Agreement,
such Bank shall cease to be a party hereto); provided, however that each
assigning Bank shall hold Commitments of not less than $10,000,000 in the
aggregate after giving effect to its assignments, subject to pro rata reduction
as aforesaid (except in connection with the sale by any Bank of its entire
Commitment); and provided, further, that the Company shall not be required to
pay any amount under this Agreement that is greater than the amount which it
would otherwise have been required to pay had such assignment not been made.
(b) By executing and delivering an Assignment and Acceptance, the
Bank assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Bank makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Company and each Designated Subsidiary or the performance or observance by the
Company and each Designated Subsidiary of any of their respective obligations
under this Agree-
92
<PAGE> 98
ment or any other instrument or document furnished pursuant hereto; (iii) such
assignee confirms that it has received a copy of this Agreement, together with
copies of such financial statements and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Agent, such assigning Bank 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 action
under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Agent by the terms hereof, together with such powers as
are reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the
terms of this Agreement are required to be performed by it as a Bank. The
Company shall not have any liability or obligation under this subsection
9.7(b).
(c) Upon its receipt of an Assignment and Acceptance executed by
an assigning Bank and an assignee representing that it is an Eligible Assignee,
together with any original Note subject to such assignment, the Agent shall
accept such Assignment and Acceptance, and give prompt notice thereof to the
Company. Within five Business Days after its receipt of such notice, each of
the Company and each Designated Subsidiary, at its own expense, shall execute
and deliver to the Agent in exchange for the surrendered Note a new Note to the
order of such Eligible Assignee in an amount equal to the Commitment assumed by
it pursuant to such Assignment and Acceptance and, if the assigning Bank has
retained a Commitment hereunder, a new Note to the order of the assigning Bank
in an amount equal to the Commitment retained by it hereunder. Such new
Note(s) shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Note, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially in the
form of Exhibit A-1.
(d) The Company and each Designated Subsidiary acknowledges that
any Bank may, in the ordinary course of its commercial banking business and in
accordance with applicable law, at any time: (i) sell to one or more Eligible
Participants participating interests in any Loan owing to such Bank, any Note
held by such Bank, any Commitment of such Bank or any other interest of such
Bank hereunder (each a "PARTICIPATING INTEREST"), without in any such case the
need for any approval by the Company, and (ii) subject to the Company's prior
approval in each instance (but only when no Event of Default shall have
occurred and is continuing), which approval shall not be unreasonably withheld,
sell to one or more banks or other entities that do not, directly or
indirectly, engage in business
93
<PAGE> 99
competitive with the business of the Company and its Subsidiaries (each such
participant and each Eligible Participant is hereinafter referred to
individually as a "PARTICIPANT" and collectively as the "PARTICIPANTS") a
Participating Interest provided, that no Participant (other than an Affiliate
of such Bank which is a Subsidiary of such Bank or the parent holding company
of such Bank or a Subsidiary of such holding company) shall be entitled under
the relevant participation agreement or any associated agreement to require
such Bank to take or omit to take any action hereunder, except, to the extent
that any Participant has any interest directly affected thereby, action that
extends the final maturity of any Loan, reduces the rate or extends the time of
payment of interest on any Loan, extends the time for payment or reduces any
fee payable to such Bank hereunder, or reduces the principal amount of any
Loan. In the event of any such sale by such Bank of participating interests to
a Participant, such Bank's obligations under this Agreement shall remain
unchanged, such Bank shall remain solely responsible for the performance
thereof, such Bank shall remain the holder of any such Note for all purposes
under this Agreement, and the Company shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and obligations
under this Agreement. The Company and each Designated Subsidiary also agrees
that each Participant shall be entitled to the benefits of subsections 2.13,
2.15, 2.16 and 2.22 with respect to its participation in the Commitments, and
the Eurodollar Loans outstanding from time to time; provided, that no
Participant shall be entitled to receive any greater amount pursuant to such
subsections than the transferor Bank would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Bank
to such Participant had no such transfer occurred.
(e) The Company and each Designated Subsidiary authorizes each
Bank to disclose to any Eligible Assignee or Participant or potential Eligible
Assignee or Participant any and all financial information in its possession
concerning the Company and each Designated Subsidiary which has been delivered
to it by the Company and each Designated Subsidiary pursuant to this Agreement
or which has been delivered to it by the Company and each Designated Subsidiary
in connection with its credit evaluation of the Company prior to entering into
this Agreement; provided, that the intended recipient first delivers
confidentiality undertakings for the benefit of the Company to the effect of
subsection 9.11 with respect to non-public information.
(f) If, pursuant to subsection 9.7(a) or (b), any interest in this
Agreement, a participation agreement or any Note is transferred to any
Participant or Eligible Assignee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Bank shall cause such Participant or Eligible Assignee concurrently with the
effectiveness of such transfer, (i) to represent to the transferor Bank for the
benefit of the Company and its
94
<PAGE> 100
Subsidiaries that under applicable law and treaties no taxes will be required
to be withheld by the transferor Bank or the Company or each Designated
Subsidiary with respect to any Loans, (ii) to furnish to the Bank and the
Company either U.S. Internal Revenue Service Form 4224 or U.S. Internal Revenue
Service Form 1001 (wherein such Participant claims entitlement to complete
exemption from U.S. federal withholding tax on all interest payments hereunder)
and (iii) to agree to provide the transferor Bank a new Form 4224 or Form 1001
upon the obsolescence of any previously delivered form and comparable
statements in accordance with applicable U.S. laws and regulations and
amendments duly executed and completed by such Participant, and to comply from
time to time with all applicable U.S. laws and regulations with regard to such
withholding tax exemption.
(g) No person to whom a participation has been granted or who has
received an assignment hereunder may grant any participation or make any
assignment unless such participation or assignment would be permitted under
this subsection 9.7 if made by a Bank.
(h) Notwithstanding anything to the contrary herein, no assignment
or participation will be permitted if, after giving effect thereto, the
aggregate Commitment of the transferee, together with such transferee's
participating interest in the Commitments, would exceed 25% of the aggregate
Commitments.
(i) Notwithstanding any other provision set forth in this
Agreement, any Bank may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Loans owing to it and the Notes held by it) in favor of any Federal Reserve
Bank in accordance with Regulation A of the Board of Governors of the Federal
Reserve System. No such assignment shall release the transferor Bank from its
obligations hereunder.
9.8 FURTHER ASSURANCES. At any time and from time to time, upon
the request of the Agent, the Company and each Designated Subsidiary shall
execute, deliver and acknowledge or cause to be executed, delivered and
acknowledged, such further documents and instruments and do such other acts and
things as the Agent may reasonably request in order to fully effect the
purposes of this Agreement, the Notes, the Guaranties and the Security
Documents and any other agreements, instruments and documents delivered
pursuant hereto or in connection with the Loans.
9.9 ADJUSTMENTS; SET-OFF. (a) If any Bank (a "BENEFITED BANK")
shall at any time receive any payment of all or part of any of its Loans or
interest thereon, or receive any collateral in respect thereof or any payment
under any Guaranty (whether voluntarily or involuntarily, by set-off, pursuant
to events or proceedings of the nature referred to in paragraph (f)
95
<PAGE> 101
of Section 7, or otherwise) in a greater proportion than any such payment to
and collateral received by any other Bank, if any, in respect of such other
Bank's Loans, or interest on any of the foregoing, such Benefited Bank shall
purchase for cash from each other Bank such portion of each such other Bank's
Loans, or shall provide each such other Bank with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
Benefited Bank to share the excess payment or benefits of such collateral or
proceeds ratably with the other Banks; provided, however, that if all or any
portion of such excess payment or benefits is hereafter recovered from such
Benefited Bank, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest. The
Company and each Designated Subsidiary agrees that each Bank so purchasing a
portion of any other Bank's Loans may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to such portion
as fully as if such Bank were the direct holder of such portion. Any payments
received after the Banks have taken action pursuant to this subsection 9.9
shall be allocated ratably among the Credit Loans, the Competitive Bid Loans,
the Swing Line Loans and participations in L/Cs of all the Banks.
(b) In addition to any rights and remedies of each Bank provided
by law, upon the occurrence and during the continuation of an Event of Default,
each Bank shall have the right, without prior notice to the Company or any
Designated Subsidiary, any such notice being expressly waived to the extent
permitted by applicable law, to set off and apply against any indebtedness,
whether matured or unmatured, of the Company or any of its Subsidiaries to such
Bank under this Agreement, the Notes or the Security Documents, any amount
owing from such Bank to the Company or any such Subsidiary at, or at any time
after, the happening of any of the above-mentioned events, and such right of
set-off may be exercised by such Bank against the Company or any such
Subsidiary or against any trustee in bankruptcy, debtor in possession, assignee
for the benefit of creditors, receiver, custodian or execution, judgment or
attachment creditor of the Company or any such Subsidiary or against anyone
else claiming through or against the Company or any such Subsidiary or such
trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receivers, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have been
exercised by such Bank prior to the making, filing or issuance, or service upon
such Bank of, or of notice of, any such petition, assignment for the benefit of
creditors, appointment or application for the appointment of a receiver, or
issuance of execution, subpoena, order or warrant. Each Bank agrees promptly
to notify the Company, any such Subsidiary, the Agent and each other Bank after
any such set-off and application made by such Bank, provided that the failure
to give such notice shall not affect the validity of such set-off and
application.
96
<PAGE> 102
9.10 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.11 CONFIDENTIALITY. Each Bank agrees to maintain the
confidentiality of information designated as confidential and provided to it by
the Company, or any Subsidiary in connection with this Agreement or the
Guaranties; provided, however, that any Bank may disclose such information (a)
at the request of any bank regulatory authority or in connection with an
examination of such Bank by any such authority, (b) pursuant to subpoena or
other court process, (c) when required to do so in accordance with the
provisions of any applicable law, (d) as required by any other Governmental
Authority, (e) to such Bank's independent auditors, attorneys or other
professional advisors upon receipt of a confidentiality undertaking for the
benefit of the Company in conformity with this subsection 9.11 as to non-public
information or (f) to any Eligible Assignee or Participant or potential
Eligible Assignee or Participant; provided that such Eligible Assignee or
Participant, as the case may be, agrees in writing to maintain the
confidentiality of such information in conformity with this subsection 9.11.
9.12 COUNTERPARTS. This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Company, the Designated Subsidiaries and the
Agent.
9.13 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF TRIAL BY JURY.
(a) THIS AGREEMENT, THE NOTES, THE SECURITY DOCUMENTS, THE
GUARANTIES AND ALL OTHER DOCUMENTS AND INSTRUMENTS EXECUTED AND DELIVERED IN
CONNECTION HEREWITH AND THEREWITH, SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO ITS RULES PERTAINING TO CONFLICTS OF LAWS.
(b) EACH OF THE COMPANY AND EACH DESIGNATED SUBSIDIARY IRREVOCABLY
CONSENTS THAT ANY LEGAL ACTION OR PROCEEDING AGAINST IT UNDER, ARISING OUT OF
OR IN ANY MANNER RELATING TO THIS AGREEMENT, THE NOTES, THE SECURITY DOCUMENTS
AND THE GUARANTIES MAY BE BROUGHT IN ANY COURT OF THE STATE OF NEW YORK, COUNTY
OF NEW YORK, OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT
OF NEW YORK. THE COMPANY AND EACH DESIGNATED SUBSIDIARY, BY THE EXECUTION AND
DELIVERY OF THIS AGREEMENT, EXPRESSLY
97
<PAGE> 103
AND IRREVOCABLY ASSENTS AND SUBMITS TO THE PERSONAL NON-EXCLUSIVE JURISDICTION
OF ANY OF SUCH COURTS IN ANY SUCH ACTION OR PROCEEDING. EACH OF THE COMPANY
AND EACH DESIGNATED SUBSIDIARY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
ANY COMPLAINT, SUMMONS, NOTICE OR OTHER PROCESS RELATING TO ANY SUCH ACTION OR
PROCEEDING BY DELIVERY THEREOF IN ACCORDANCE WITH APPLICABLE LAW. EACH OF THE
COMPANY AND EACH DESIGNATED SUBSIDIARY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES
ANY CLAIM OR DEFENSE IN ANY SUCH ACTION OR PROCEEDING BASED ON ANY ALLEGED LACK
OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS OR ANY SIMILAR
BASIS. EACH OF THE COMPANY AND EACH DESIGNATED SUBSIDIARY SHALL NOT BE
ENTITLED IN ANY SUCH ACTION OR PROCEEDING TO ASSERT ANY DEFENSE GIVEN OR
ALLOWED UNDER THE LAWS OF ANY STATE OTHER THAN THE STATE OF NEW YORK UNLESS
SUCH DEFENSE IS ALSO GIVEN OR ALLOWED BY THE LAWS OF THE STATE OF NEW YORK.
NOTHING IN THIS SUBSECTION SHALL AFFECT OR IMPAIR IN ANY MANNER OR TO ANY
EXTENT THE RIGHT OF ANY BANK TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST THE COMPANY OR ANY DESIGNATED SUBSIDIARY IN ANY JURISDICTION OR TO
SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.
(c) EACH OF THE COMPANY, THE DESIGNATED SUBSIDIARIES, THE BANKS
AND THE AGENT WAIVES TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT
TO, IN CONNECTION WITH, OR ARISING OUT OF, THIS AGREEMENT, THE NOTES, THE
SECURITY DOCUMENTS, THE GUARANTIES
98
<PAGE> 104
OR ANY INSTRUMENT OR DOCUMENT DELIVERED PURSUANT TO THIS AGREEMENT, OR THE
VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered in New York, New York by their proper and
duly authorized officers as of the day and year first above written.
PLY GEM INDUSTRIES, INC.
By
------------------------
ACKNOWLEDGED AND AGREED AS TO
EACH PROVISION RELATING TO
ANY DESIGNATED SUBSIDIARY:
SAGEBRUSH SALES, INC.
By
----------------------------
SNE ENTERPRISES, INC.
By
----------------------------
VARIFORM, INC.
By
----------------------------
GREAT LAKES WINDOW, INC.
By
----------------------------
STUDLEY PRODUCTS, INC.
By
----------------------------
GOLDENBERG GROUP, INC.
By
----------------------------
99
<PAGE> 105
COMMITMENT: NATIONAL WESTMINSTER BANK USA,
AS AGENT AND AS A BANK
$29,000,000
BY
---------------------------
TITLE
COMMITMENT PERCENTAGE:
14.5000%
Lending Office for NWUSA Rate
Loans, Eurodollar Loans and
Competitive Bid Loans and Address
for Notices:
592 Fifth Avenue
New York, New York 10036
Attention: Robert Petersen
Telecopier: (212) 602-2080
100
<PAGE> 106
COMMITMENT: EUROPEAN AMERICAN BANK
$20,000,000
BY
-------------------------------
TITLE
COMMITMENT PERCENTAGE: Lending Office for NWUSA Rate
Loans, Eurodollar Rate Loans and
10.0000% Competitive Bid Loans and Address
for Notices:
335 Madison Avenue
New York, New York 10017
Attention: Gilbert Torres
Telecopier: (212) 503-2667
101
<PAGE> 107
COMMITMENT: LTCB TRUST COMPANY
$20,000,000
BY
-------------------------------
TITLE
COMMITMENT PERCENTAGE: Lending Office for NWUSA Rate
Loans, Eurodollar Rate Loans and
10.0000% Competitive Bid Loans and Address
for Notices:
165 Broadway
New York, New York 10006
Attention: Laura Buckley
Telecopier: (212) 608-2371
Copy to Winston Brown:
Telecopier: (212) 608-3081
102
<PAGE> 108
COMMITMENT: NATIONSBANK OF NORTH CAROLINA,
NATIONAL ASSOCIATION
$20,000,000
BY
-------------------------------
TITLE
COMMITMENT PERCENTAGE: Lending Office for NWUSA Rate
Loans, Eurodollar Rate Loans and
10.0000% Competitive Bid Loans:
One NationsBank Plaza
NC1-002-06-19
Charlotte, North Carolina 28255
Attention: Michelle Kirby
Address for Notices:
767 Fifth Avenue
New York, New York 10153
Attention: Christopher C. Bowder
Telecopier: (212) 593-1083
103
<PAGE> 109
COMMITMENT: CONTINENTAL BANK N.A.
$20,000,000
BY
-------------------------------
TITLE
COMMITMENT PERCENTAGE: Lending Office for NWUSA Rate
Loans, Eurodollar Rate Loans and
10.0000% Competitive Bid Loans and Address
for Notices:
231 South LaSalle Street
Mail Code #949
Chicago, Illinois 60697
Attention: David Stang
Telecopier: (312) 828-5140
104
<PAGE> 110
COMMITMENT: BANK OF MONTREAL
$13,500,000
BY
-----------------------------
TITLE
COMMITMENT PERCENTAGE: Lending Office for NWUSA Rate
Loans, Eurodollar Rate Loans and
6.7500% Competitive Bid Loans and Address
for Notices:
430 Park Avenue
New York, New York 10022
Attention: Kanu Modi
Telecopier: (212) 605-1455
105
<PAGE> 111
COMMITMENT: FLEET BANK
$13,500,000
BY
-------------------------------
TITLE
COMMITMENT PERCENTAGE: Lending Office for NWUSA Rate
Loans, Eurodollar Rate Loans and
6.7500% Competitive Bid Loans and Address
for Notices:
56 East 42nd Street
New York, New York 10017
Attention: Peter C. Hall
Telecopier: (212) 907-5614
106
<PAGE> 112
COMMITMENT: IBJ SCHRODER BANK & TRUST COMPANY
$13,500,000
BY
-------------------------------
TITLE
COMMITMENT PERCENTAGE: Lending Office for NWUSA Rate
Loans, Eurodollar Rate Loans and
6.7500% Competitive Bid Loans and Address
for Notices:
1 State Street
New York, New York 10004
Attention: John Duncan
Telecopier: (212) 858-2768
107
<PAGE> 113
COMMITMENT: THE FIRST NATIONAL BANK OF BOSTON
$13,500,000
BY
-------------------------------
TITLE
COMMITMENT PERCENTAGE: Lending Office for NWUSA Rate
Loans, Eurodollar Rate Loans and
6.7500% Competitive Bid Loans and Address
for Notices:
100 Federal Street (01-22-05)
Boston, Massachusetts 02110
Attention: Brent E. Shay
Telecopier: (617) 434-8964
108
<PAGE> 114
COMMITMENT: MELLON BANK, N.A.
$13,500,000
BY
-------------------------------
TITLE
COMMITMENT PERCENTAGE: Lending Office for NWUSA Rate
Loans, Eurodollar Rate Loans and
6.7500% Competitive Bid Loans:
Three Mellon Bank Center
23rd Floor
Pittsburgh, Pennsylvania 15259
Attention: Tracy Stevens
Address for Notices:
65 55th Street
15th Floor
New York, New York 10022-3219
Attention: David N. Smith
Telecopier: (212) 702-5269
109
<PAGE> 115
COMMITMENT: THE YASUDA TRUST AND BANKING
COMPANY, LIMITED NEW YORK BRANCH
$13,500,000
BY
-------------------------------
TITLE
COMMITMENT PERCENTAGE: Lending Office for NWUSA Rate
Loans, Eurodollar Rate Loans and
6.7500% Competitive Bid Loans and Address
for Notices:
666 Fifth Avenue
Suite 801
New York, New York 10103
Attention: Rohn M. Laudenschlager
Telecopier: (212) 373-5796
110
<PAGE> 116
COMMITMENT: THE DAIWA BANK, LIMITED
$10,000,000
BY
-------------------------------
TITLE
BY
-------------------------------
TITLE
COMMITMENT PERCENTAGE: Lending Office for NWUSA Rate
Loans, Eurodollar Rate Loans and
5.0000% Competitive Bid Loans:
233 South Wacker Drive
Suite #5400
Chicago, Illinois 60606
Address for Notices:
450 Lexington Avenue
Suite 1700
New York, New York 10017
Attention: James H. Broadley
Vice President
Telecopier: (212) 818-0865
111
<PAGE> 117
EXHIBITS
A-1 Form of Credit Note
A-2 Form of Designated Subsidiary Acquisition Note
B Form of Swing Line Note
C-1 Form of Competitive Bid Note
C-2 Competitive Bid Request
C-3 Invitation for Competitive Bids
C-4 Competitive Bid
C-5 Competitive Bid Accept/Reject Letter
D-1 Borrowing Certificate
D-2 Borrowing Certificate for Designated
Subsidiaries
E Labor Disputes; Collective Bargaining Agreements;
Employee Grievances
F-1 Legal Opinion of Elihu H. Modlin
F-2 Legal Opinion of Winston & Strawn
G Name Changes, Mergers, Acquisitions
H Contingent Liability relating to Post-Retirement
Benefit
I Form of Assignment and Acceptance
J Form of Solvency Certificate
SCHEDULES
I Existing Letters of Credit
II Liens and Contingent Obligations
III Indebtedness, etc.
IV Subsidiaries
V Secured Creditors
112
<PAGE> 118
SCHEDULE I
Existing Letters of Credit
<TABLE>
<CAPTION>
Expiration
Amount Date Issuer Beneficiary
------ ----------- ------ -----------
<S> <C> <C> <C>
$ 830,565 2/20/94 Chemical Far East American
6,912 2/15/94 Chemical Iris Ceramica
14,712 2/15/94 Chemical Industrial Marmi Adici
239,788 Various to 3/30/94 Chemical BPB Plywood Indonesia
90,200 3/30/94 Chemical BPB Sumatra Pioneer Wood
29,203 3/31/94 Chemical IBL S.P.A.
66,638 4/10/94 Chemical Stabilimento Ceramica
Laguglia
352,176 Various to 5/15/94 Chemical Eucatex Madeira
2,500,000 7/31/94 Daiwa Wausau Insurance Company
500,000 7/31/94 Chase Wausau Insurance Company
7,239,167 2/15/95 NatWest USA First Tennessee Bank
National Association
1,797,611 1/17/95 NatWest USA Union Bank of Switzerland
4,323,900 6/15/94 Fifth Third PNC Bank, Ohio
3,068,629 12/31/94 Fifth Third PNC Bank, Ohio
</TABLE>
113
<PAGE> 119
SCHEDULE II
Existing Liens
<TABLE>
<CAPTION>
AS OF FEBRUARY 24, 1994
LOCATION OF PROPERTY DESCRIPTION OF INDEBTEDNESS PRINCIPAL OUTSTANDING
- -------------------- ---------------------------- -----------------------
<S> <C> <C>
Real and Personal Industrial Development Revenue $7,513,000
Property, Wood County, Bonds, (Mortgage) County of
Ohio (Great Lakes Wood, Ohio Series 1984, 1989,
Window, Inc.) 1992.
</TABLE>
<TABLE>
<CAPTION>
FINANCING LEASES:
- ----------------
<S> <C>
Real and personal property leased from
Marion County Industrial and Environmental
Development Board, Inc. $7,000,000
Injection molding machine leased from
MC Machinery Systems, Inc. 147,958
Other 49,292
PLEDGE OF STOCK OF SUBSIDIARIES PURSUANT TO THE
"SECURITY INDENTURE AND TRUST AGREEMENT":
- -----------------------------------------------
10 Shares - Goldenberg Group, Inc.
10 Shares - Allied Plywood, Inc.
100 Shares - Great Lakes Window, Inc.
100 Shares - SNE Enterprises, Inc.
EXISTING CONTINGENT OBLIGATIONS
-------------------------------
Guaranties of Martin Realty Co. Obligations
to NatWest USA in connection with the mortgage
on a building in Newton, N.J. $ 403,000
</TABLE>
114
<PAGE> 120
SCHEDULE III
<TABLE>
<CAPTION>
A) EXISTING INDEBTEDNESS TO BE REPAID UNDRAWN
ON OR BEFORE FEBRUARY 25, 1994: COMMITTED
----------------------------------
FACILITIES
----------
<S> <C> <C>
European American Bank $10,000,000
National Westminster Bank USA 18,855,000 $20,000
Long Term Credit Bank 15,000,000
Yasuda Bank & Trust Co. 10,000,000
Daiwa Bank 7,500,000
IBJ Schroder Bank & Trust Co. 10,000,000
Chemical Bank and National
Westminster Bank USA as Agent for
Chemical Bank, National Westminster
Bank USA, The Chase Manhattan Bank
and European American Bank 18,875,000 35,500,000
* The Chase Manhattan Bank, N.A. 400,000
B) EXISTING INDEBTEDNESS WHICH MAY
REMAIN AFTER FEBRUARY 25, 1994:
-------------------------------
County of Wood, Ohio Economic
Development Revenue Bonds, (Mortgage)
Series 1984, 1989, 1992 7,513,000
Missouri Industrial Development
Revenue Bonds, Series C 1990 1,760,000
Notes due to former owner of
Currier Lumber Company 67,890
Senior Subordinated
Debentures due 2008 50,000,000
</TABLE>
(cont.)
__________________________________
* Notwithstanding subsection 6.1(d), may be refinanced through the
Credit Agreement at any time prior to maturity.
115
<PAGE> 121
SCHEDULE III (cont.)
<TABLE>
<CAPTION>
FINANCING LEASES:
----------------
<S> <C>
Real and personal property leases
from Marion County Industrial and
Environmental Development Board, Inc. 7,000,000
Injection molding machine leased from
an affiliate of Mitsubishi Corporation 147,958
Other 49,292
</TABLE>
BANKERS ACCEPTANCES:
- -------------------
<TABLE>
<CAPTION>
Acceptance Maturity
# Date
----------- --------
<S> <C> <C>
1069 2/28/94 $ 896,033
1072 3/01/94 140,640
1075 3/14/94 81,285
1076 3/23/94 89,510
1078 4/06/94 89,442
1079 4/07/94 1,401,066
1084 5/02/94 179,290
1085 5/02/94 144,000
1086 5/04/94 700,242
$3,721,508
</TABLE>
C. OPERATING LEASES REFERRED TO IN
SECTION 6.1(D) ARE AS FOLLOWS:
<TABLE>
<CAPTION>
Lessor Description
------ -----------
<S> <C>
General Electric Certain extrusion and related
Capital Corporation equipment of Variform, Inc.
General Electric Certain production equipment of
Capital Corporation Studley Products, Inc.
(cont.)
</TABLE>
116
<PAGE> 122
SCHEDULE III (cont.)
<TABLE>
<S> <C>
General Electric Certain production equipment of
Capital Corporation Richwood Building Products, Inc.
Barclays Leasing Inc. Certain machinery and equipment
of SNE Enterprises, Inc.
DeMatteo Construction Co. Real property of SNE Enterprises
Inc. located in Mosinee, WI
Albert Carlotti Real Property of Allied Plywood
Corporation, located in Providence,
Rhode Island
Trammel Crow Co. Real property of Allied Plywood
Corporation located in Dallas, Texas
Georgia Moulding Corp. Real Property of Allied Plywood
Corporation located in Swanee, Georgia
Penske, Inc., Ryder, Inc., Various tractor and trailer leases
Ruan Leasing Company and of SNE Enterprises, Inc.
LeRoy Holding, Inc.
West Virginia Industrial and Real property of Variform, Inc.
Trade Jobs Development located in Martinsburg, West Virginia
Corporation
</TABLE>
117
<PAGE> 123
SCHEDULE IV
List of Subsidiaries
<TABLE>
<CAPTION>
Name State of Incorporation Shares owned by
- ---- ---------------------- ---------------
<S> <C> <C>
Allied Plywood Delaware Ply Gem Industries,
Corporation Inc. ("Ply Gem")
Goldenberg Group, Inc. California Ply Gem
Great Lakes Window, Inc. Ohio Ply Gem
Hoover Treated Wood Delaware Ply Gem
Products, Inc.
PGI Investments, Inc. Delaware Ply Gem
Richwood Building Delaware Ply Gem
Products, Inc.
Sagebrush Sales, Inc. New Mexico Ply Gem
SNE Enterprises, Inc. Delaware Ply Gem
Studley Products, New York Ply Gem
Inc.
Variform, Inc. Missouri Ply Gem
OTHER SUBSIDIARIES
- ------------------
APC International, Inc. D.C. Allied
Central New York Window, Co. Delaware SNE
Continental Wood
Preservers, Inc. Michigan Currier
Currier Lumber Company Michigan Ply Gem
F.P. Technologies, Inc. Delaware Hoover
The Garden Gro Corporation Delaware Ply Gem
GLW of Illinois, Inc. Delaware Great Lakes
GLW of Indiana, Inc. Delaware Great Lakes
GLW of Iowa, Inc. Delaware Great Lakes
GLW of Michigan, Inc. Delaware Great Lakes
GLW of Minnesota, Inc. Delaware Great Lakes
</TABLE>
118
<PAGE> 124
<TABLE>
<S> <C> <C>
GLW of Missouri, Inc. Delaware Great Lakes
GLW of Wisconsin, Inc. Delaware Great Lakes
J&D Laminating, Incorporated California Goldenberg
(d/b/a Creative Laminating)
Modern Filters, Inc. Texas Studley
PG Worldwide, Inc. Delaware Ply Gem
Ply-Gem Connecticut, Inc. Connecticut Ply Gem
Ply-Gem Forest Products, Inc. New York Ply Gem
Ply-Gem of Laurel, Inc. Maryland Ply Gem
Ply-Gem New Jersey, Inc. New Jersey Ply Gem
Ply-Gem New York, Inc. New York Ply Gem
Scafitex, Inc. New Jersey Ply Gem
SNE Enterprises - Texas, Delaware SNE
Inc.
SNE Special Services, Inc. Delaware SNE
SNE Transportation Company Wisconsin SNE
Inc.
Studley Canada Limited Ontario Studley
</TABLE>
119
<PAGE> 125
SCHEDULE V
Secured Creditors
<TABLE>
<CAPTION>
A) EXISTING INDEBTEDNESS TO BE REPAID UNDRAWN
ON OR BEFORE FEBRUARY 25, 1994: COMMITTED
----------------------------------
FACILITIES
----------
<S> <C> <C>
European American Bank $10,000,000
National Westminster Bank USA 18,855,000 $20,000
Long Term Credit Bank 15,000,000
Yasuda Bank & Trust Co. 10,000,000
Daiwa Bank 7,500,000
IBJ Schroder Bank & Trust Co. 10,000,000
Chemical Bank and National
Westminster Bank USA as Agent for
Chemical Bank, National Westminster
Bank USA, The Chase Manhattan Bank
and European American Bank 18,875,000 35,500,000
The Chase Manhattan Bank, N.A. 400,000
B) EXISTING INDEBTEDNESS WHICH MAY
REMAIN AFTER FEBRUARY 25, 1994:
-------------------------------
County of Wood, Ohio Economic
Development Revenue Bonds, (Mortgage)
Series 1984, 1989, 1992 7,513,000
Missouri Industrial Development
Revenue Bonds, Series C 1990 1,760,000
Notes due to former owner of
Currier Lumber Company 67,890
</TABLE>
(cont.)
120
<PAGE> 126
SCHEDULE V (cont.)
<TABLE>
<CAPTION>
FINANCING LEASES:
----------------
<S> <C> <C>
Real and personal property leases
from Marion County Industrial and
Environmental Development Board, Inc. 7,000,000
Injection molding machine leased from
an affiliate of Mitsubishi Corporation 147,958
Other 49,292
</TABLE>
BANKERS ACCEPTANCES:
<TABLE>
<CAPTION>
Acceptance Maturity
# Date
----------- --------
<S> <C> <C>
1069 2/28/94 $ 896,033
1072 3/01/94 140,640
1075 3/14/94 81,285
1076 3/23/94 89,510
1078 4/06/94 89,442
1079 4/07/94 1,401,066
1084 5/02/94 179,290
1085 5/02/94 144,000
1086 5/04/94 700,242
$3,721,508
</TABLE>
C. OPERATING LEASES REFERRED TO IN
SECTION 6.1(D) ARE AS FOLLOWS:
<TABLE>
<CAPTION>
Lessor Description
------ -----------
<S> <C>
General Electric Certain extrusion and related
Capital Corporation equipment of Variform, Inc.
General Electric Certain production equipment of
Capital Corporation Studley Products, Inc.
</TABLE>
(cont.)
121
<PAGE> 127
SCHEDULE V (cont.)
<TABLE>
<S> <C>
General Electric Certain production equipment of
Capital Corporation Richwood Building Products, Inc.
Barclays Leasing Inc. Certain machinery and equipment
of SNE Enterprises, Inc.
DeMatteo Construction Co. Real property of SNE Enterprises
Inc. located in Mosinee, WI
Albert Carlotti Real Property of Allied Plywood
Corporation, located in Providence,
Rhode Island
Trammel Crow Co. Real property of Allied Plywood
Corporation located in Dallas, Texas
Georgia Moulding Corp. Real Property of Allied Plywood
Corporation located in Swanee, Georgia
Penske, Inc., Ryder, Inc., Various tractor and trailer leases
Ruan Leasing Company and of SNE Enterprises, Inc.
LeRoy Holding, Inc.
West Virginia Industrial and Real property of Variform, Inc.
Trade Jobs Development located in Martinsburg, West Virginia
Corporation
</TABLE>
122
<PAGE> 128
EXHIBIT A-1
FORM OF CREDIT NOTE
$______________________
New York, New York
February ___, 1994
FOR VALUE RECEIVED, the undersigned, _________________, a
________ corporation (the "COMPANY") hereby unconditionally promises to pay to
the order of ____________________ (the "BANK"), in lawful money of the United
States of America and in immediately available funds, the principal amount of
________________________________ DOLLARS ($ ) or, if less, the aggregate
principal amount of all Credit Loans made by the Bank to the Company pursuant
to subsection 2.1 of the Credit Agreement hereinafter referred to, on the dates
and in the amount provided in such Credit Agreement. Such payment shall be
made for the account of the Bank at the office of National Westminster Bank USA
located at 592 Fifth Avenue, New York, New York 10036. The undersigned further
agrees to pay interest in like money at such office on the unpaid principal
amount hereof from time to time from the date hereof at the applicable rates
per annum and on the dates specified in subsections 2.10 and 2.11 of such
Credit Agreement, until paid in full (both before and after judgment).
All indebtedness outstanding under this Note shall bear
interest (computed in the same manner as interest on this Note prior to
maturity) after maturity, whether at stated maturity, by acceleration or
otherwise, at the post-default rate set forth in the Credit Agreement and all
such interest shall be payable on demand.
Anything herein to the contrary notwithstanding, the
obligation of the Company to make payments of interest shall be subject to the
limitation that payments of interest shall not be required to be made to the
Bank to the extent that the Bank's receipt thereof would not be permissible
under the law or laws applicable to the Bank limiting rates of interest which
may be charged or collected by the Bank. Any such payments of interest which
are not made as a result of the limitation referred to in the preceding
sentence shall be made by the Company to the Agent for the account of the Bank
on the earliest interest payment date or dates on which the receipt thereof
would be permissible under the laws applicable to the Bank limiting rates of
interest which may be charged or collected by the Bank.
The holder of this Note is authorized to endorse the date,
Type and amount of all Credit Loans made by the Bank to the undersigned
pursuant to subsection 2.1 of the Credit Agreement, the maturity date therefor
(which shall in no event be later than the Termination Date), the date and
amount of each repayment or prepayment of principal thereof, and, in the case
of Eurodollar Loans, the interest rate with respect thereto, on the schedules
annexed hereto and made a part hereof, or on any continuation thereof which
shall be attached hereto and made a part hereof, and any such endorsement shall
constitute prima facie evidence of the accuracy of the information so endorsed,
provided,
123
<PAGE> 129
however, that the failure of the Bank to make such recordation (or any error in
such recordation) shall not affect the obligations of the Company hereunder or
under the Credit Agreement.
This Note is one of the Notes referred to in the Credit
Agreement dated the date hereof (as amended, supplemented or otherwise modified
from time to time, the "CREDIT AGREEMENT") among Ply Gem Industries, Inc., the
Bank, the other banks parties thereto, and National Westminster Bank USA, as
Agent, and is entitled to the benefits thereof. All capitalized terms used
herein without definition shall have the meanings set forth in the Credit
Agreement.
Upon the occurrence of any one or more of the Events of
Default specified in the Credit Agreement, all amounts then remaining unpaid on
this Note shall become, or may be declared to be, immediately due and payable
all as provided therein.
All parties now and hereafter liable with respect to this
Note, whether maker, principal, surety, guarantor, endorser or otherwise,
hereby waive presentment, demand, protest and all other notice of any kind.
The Company shall pay costs and expenses of collection,
including, without limitation, attorneys' fees and disbursements in the event
that any action, suit or proceeding is brought by the holder hereof to collect
this Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS RULES
PERTAINING TO CONFLICTS OF LAW.
[ ]
By____________________________
Title
124
<PAGE> 130
Page One of
Schedule to
Note
NWUSA RATE LOANS, PAYMENTS
AND REPAYMENTS OF NWUSA RATE LOANS
<TABLE>
<CAPTION>
Amount of NWUSA Unpaid Principal
Amount of NWUSA Maturity Rate Loans Balance of NWUSA Notation
Date Rate Loan Date Repaid Rate Loans Made by
---- ---------- ----- --------- ---------- --------
<S> <C> <C> <C> <C> <C>
</TABLE>
125
<PAGE> 131
Page Two of
Schedule to
Note
EURODOLLAR LOANS, PAYMENTS
AND REPAYMENTS OF EURODOLLAR LOANS
<TABLE>
<CAPTION>
Unpaid
Amount Maturity Amount of Principal
of Euro Date/ Eurodollar Balance of
dollar Interest Loans Eurodollar Interest Notation
Date Loan Period Repaid Loans Rate Made by
---- ------ ------- ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
126
<PAGE> 132
EXHIBIT A-2
FORM OF DESIGNATED SUBSIDIARY ACQUISITION NOTE
$__________________
New York, New York
February ___, 1994
FOR VALUE RECEIVED, the undersigned, _________________, a
________ corporation (the "COMPANY") hereby unconditionally promises to pay to
the order of ____________________ (the "BANK"), in lawful money of the United
States of America and in immediately available funds, the principal amount of
__________________________ DOLLARS ($ ) or, if less, the aggregate
principal amount of all Loans for acquisitions made by the Bank to the Company
pursuant to subsection 2.1(a)(ii) of the Credit Agreement hereinafter referred
to, on the dates and in the amount provided in such Credit Agreement. Such
payment shall be made for the account of the Bank at the office of National
Westminster Bank USA located at 592 Fifth Avenue, New York, New York 10036.
The undersigned further agrees to pay interest in like money at such office on
the unpaid principal amount hereof from time to time from the date hereof at
the applicable rates per annum and on the dates specified in subsections 2.10
and 2.11 of such Credit Agreement, until paid in full (both before and after
judgment).
All indebtedness outstanding under this Note shall bear
interest (computed in the same manner as interest on this Note prior to
maturity) after maturity, whether at stated maturity, by acceleration or
otherwise, at the post-default rate set forth in the Credit Agreement and all
such interest shall be payable on demand.
Anything herein to the contrary notwithstanding, the
obligation of the Company to make payments of interest shall be subject to the
limitation that payments of interest shall not be required to be made to the
Bank to the extent that the Bank's receipt thereof would not be permissible
under the law or laws applicable to the Bank limiting rates of interest which
may be charged or collected by the Bank. Any such payments of interest which
are not made as a result of the limitation referred to in the preceding
sentence shall be made by the Company to the Agent for the account of the Bank
on the earliest interest payment date or dates on which the receipt thereof
would be permissible under the laws applicable to the Bank limiting rates of
interest which may be charged or collected by the Bank.
The holder of this Note is authorized to endorse the date,
Type and amount of all Credit Loans made by the Bank to the undersigned
pursuant to subsection 2.1 of the Credit Agreement, the
127
<PAGE> 133
maturity date therefor (which shall in no event be later than the Termination
Date), the date and amount of each repayment or prepayment of principal
thereof, and, in the case of Eurodollar Loans, the interest rate with respect
thereto, on the schedules annexed hereto and made a part hereof, or on any
continuation thereof which shall be attached hereto and made a part hereof, and
any such endorsement shall constitute prima facie evidence of the accuracy of
the information so endorsed, provided, however, that the failure of the Bank to
make such recordation (or any error in such recordation) shall not affect the
obligations of the Company hereunder or under the Credit Agreement.
This Note is one of the Notes referred to in the Credit
Agreement dated the date hereof (as amended, supplemented or otherwise modified
from time to time, the "CREDIT AGREEMENT") among Ply Gem Industries, Inc., the
Bank, the other banks parties thereto, and National Westminster Bank USA, as
Agent, and is entitled to the benefits thereof. All capitalized terms used
herein without definition shall have the meanings set forth in the Credit
Agreement.
Upon the occurrence of any one or more of the Events of
Default specified in the Credit Agreement, all amounts then remaining unpaid on
this Note shall become, or may be declared to be, immediately due and payable
all as provided therein.
All parties now and hereafter liable with respect to this
Note, whether maker, principal, surety, guarantor, endorser or otherwise,
hereby waive presentment, demand, protest and all other notice of any kind.
The Company shall pay costs and expenses of collection,
including, without limitation, attorneys' fees and disbursements in the event
that any action, suit or proceeding is brought by the holder hereof to collect
this Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS RULES
PERTAINING TO CONFLICTS OF LAW.
[ ]
By____________________________
Title
128
<PAGE> 134
Page One of
Schedule to
Note
NWUSA RATE LOANS, PAYMENTS
AND REPAYMENTS OF NWUSA RATE LOANS
<TABLE>
<CAPTION>
Amount of NWUSA Unpaid Principal
Amount of NWUSA Maturity Rate Loans Balance of NWUSA Notation
Date Rate Loan Date Repaid Rate Loans Made by
---- ---------- -------- --------- ---------- --------
<S> <C> <C> <C> <C> <C>
</TABLE>
129
<PAGE> 135
Page Two of
Schedule to
Note
EURODOLLAR LOANS, PAYMENTS
AND REPAYMENTS OF EURODOLLAR LOANS
<TABLE>
<CAPTION> Unpaid
Amount Maturity Amount of Principal
of Euro Date/ Eurodollar Balance of
Dollar Interest Loans Eurodollar Interest Notation
Date Loan Period Repaid Loans Rate Made by
---- ------ ------- ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
130
<PAGE> 136
EXHIBIT B
FORM OF SWING LINE NOTE
$7,500,000
New York, New York
____________, 1994
FOR VALUE RECEIVED, the undersigned, __________________, a
___________ corporation (the "Company"), unconditionally promises to pay to the
order of _____________________________ (the "Swing Line Lender"), at the office
of the Swing Line Lender, 592 Fifth Avenue, New York, New York 10036, in lawful
money of the United States of America and in immediately available funds, the
principal amount of SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS ($7,500,000),
or, if less, the aggregate unpaid principal amount of all Swing Line Loans made
by the Swing Line Lender to the undersigned pursuant to subsection 2.4 of the
Credit Agreement hereinafter referred to. The principal amount of each Swing
Line Loan evidenced hereby shall be payable as set forth in the Credit
Agreement hereinafter referred to, on the dates and in the amounts provided in
such Credit Agreement. The Company further agrees to pay interest on the
unpaid principal amount hereof in like money from time to time from the date
hereof at the rates and on the dates specified in subsections 2.10 and 2.11 of
the Credit Agreement.
All indebtedness outstanding under this Note shall bear
interest (computed in the same manner as interest on this Note prior to
maturity) after maturity, whether at stated maturity, by acceleration or
otherwise, at the post-default rate set forth in the Credit Agreement and all
such interest shall be payable on demand.
Anything herein to the contrary notwithstanding, the
obligation of the Company to make payments of interest shall be subject to the
limitation that payments of interest shall not be required to be made to the
Swing Line Lender to the extent that the Swing Line Lender's receipt thereof
would not be permissible under the law or laws applicable to the Swing Line
Lender limiting rates of interest which may be charged or collected by the
Swing Line Lender. Any such payments of interest which are not made as a
result of the limitation referred to in the preceding sentence shall be made by
the Company to the Swing Line Lender on the earliest interest payment date or
dates on which the receipt thereby would be permissible under the laws
applicable to the Swing Line Lender limiting rates of interest which may be
charged or collected by the Swing Line Lender.
The Swing Line Lender is authorized to record the information
set forth in subsection 2.4(b) of the Credit Agreement on the schedule annexed
hereto and made a part hereof (or on a continuation thereof which shall be
attached hereto and made a part
131
<PAGE> 137
hereof) or otherwise on the records of the Swing Line Lender, and any such
recordation shall constitute prima facie evidence of the accuracy of the
information so recorded; provided, however, that the failure of the Swing Line
Lender to make such recordation (or any error in such recordation) shall not
affect the obligations of the Company hereunder or under the Credit Agreement.
This Note is the Swing Line Note referred to in the Credit
Agreement dated the date hereof (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement") among Ply Gem Industries, Inc.,
National Westminster Bank USA, as Agent, and the Banks named therein. Terms
defined in the Credit Agreement are used herein with their defined meanings
unless otherwise defined herein.
Upon the occurrence of any one or more of the Events of
Default specified in the Credit Agreement, all amounts then remaining unpaid on
this Note may become, or may be declared to be, immediately due and payable as
provided in the Credit Agreement.
All parties now and hereafter liable with respect to this
Note, whether maker, principal, surety, guarantor, endorser or otherwise,
hereby waive presentment, demand, protest and all other notices of any kind.
The Company shall pay costs and expenses of collection,
including, without limitation, attorneys' fees and disbursements in the event
that any action, suit or proceeding is brought by the holder hereof to collect
this Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS
RULES PERTAINING TO CONFLICTS OF LAWS.
[ ]
By_______________________
Title
132
<PAGE> 138
SCHEDULE TO THE SWING LINE NOTE
SWING LINE
LOANS AND PAYMENT OF PRINCIPAL
<TABLE>
<CAPTION>
AMOUNT OF UNPAID
AMOUNT OF SWING PRINCIPAL PRINCIPAL NOTATION
DATE LINE LOANS REPAID BALANCE MADE BY
- ---- --------------- --------- --------- --------
<S> <C> <C> <C> <C>
______ ____________ __________ _________ __________
______ ____________ __________ _________ __________
______ ____________ __________ _________ __________
______ ____________ __________ _________ __________
______ ____________ __________ _________ __________
______ ____________ __________ _________ __________
______ ____________ __________ _________ __________
______ ____________ __________ _________ __________
______ ____________ __________ _________ __________
______ ____________ __________ _________ __________
______ ____________ __________ _________ __________
______ ____________ __________ _________ __________
</TABLE>
133
<PAGE> 139
EXHIBIT C-1
FORM OF COMPETITIVE BID NOTE
$__________________ _________________, 199_
FOR VALUE RECEIVED, the undersigned, ________________, a
__________ corporation (the "Company"), hereby promises to pay to the order of
________________ (the "Bank") the principal sum of each Competitive Bid Loan
made by the Bank to the Company pursuant to the Credit Agreement dated as of
February __, 1994 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among Ply Gem Industries, Inc., National
Westminster Bank USA, as Agent (the "Agent"), and the Banks named therein, on
the last day of the Interest Period for such Competitive Bid Loan. The Company
also promises to pay interest on the unpaid principal amount hereof from the
date hereof until paid at the rates and at the times which shall be determined
in accordance with the provisions of the Credit Agreement and the Competitive
Bid made by the Bank and accepted by the Company.
All indebtedness outstanding under this Note shall bear
interest (computed in the same manner as interest on this Note prior to
maturity) after maturity, whether at stated maturity, by acceleration or
otherwise at the post-default rate set forth in the Credit Agreement and such
interest shall be payable on demand.
Anything herein to the contrary notwithstanding, the
obligation of the Company to make payments of interest shall be subject to the
limitation that payments of interest shall not be required to be made to the
Bank to the extent that the Bank's receipt thereof would not be permissible
under the law or laws applicable to the Bank limiting rates of interest which
may be charged or collected by the Bank. Any such payments of interest which
are not made as a result of the limitation referred to in the preceding
sentence shall be made by the Company to the Agent for the account of the Bank
on the earliest interest payment date or dates on which the receipt thereof
would be permissible under the laws applicable to the Bank limiting rates of
interest which may be charged or collected by the Bank.
This Note is one of the Company's Competitive Bid Notes issued
pursuant to and is entitled to the benefits of the Credit Agreement to which
reference is hereby made for a more complete statement of the terms and
conditions under which the Competitive Loans evidenced hereby are made and are
to be repaid. Capitalized terms used herein without definition shall have the
meanings set forth in the Credit Agreement.
All payments of principal and interest in respect of this Note
shall be made in same day funds at the office of the Agent at 592 Fifth Avenue,
New York, New York 10036 or at such other place
134
<PAGE> 140
as shall be designated in writing for such purpose in accordance with the
terms of the Credit Agreement.
The Bank is authorized to record all principal and interest
payments made on the schedule annexed hereto and made a part hereof (or on a
continuation thereof which shall be attached hereto and made a part hereof) or
otherwise on the records of the Bank, and any such recordation shall constitute
prima facie evidence of the accuracy of the information so recorded; provided,
however, that the failure of the Bank to make such recordation (or any error in
such recordation) shall not affect the obligations of the Company hereunder or
under the Credit Agreement.
Upon the occurrence of any one or more by the Event of Default
specified in the Credit Agreement, all amount then remaining unpaid on this
Note may become, or may be declared to be immediately due and payable as
provided in the Credit Agreement.
All parties now and hereafter liable with respect to this
Note, whether maker, principal, surety, guarantor, endorser or otherwise,
hereby waive presentment, demand, protest and all other notices of any kind.
The Company shall pay costs and expenses of collection,
including, without limitation, attorney's fees and disbursements in the event
that any action, suit or proceeding is brought by the holder hereof to collect
this Note.
THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO
ITS RULES PERTAINING TO CONFLICTS OF LAWS.
[ ]
By_____________________________
Title
135
<PAGE> 141
SCHEDULE TO THE COMPETITIVE BID NOTE
COMPETITIVE LOANS AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
Interest
Amount of Rate on
Competitive Competitive Interest Maturity Notation
Date Bid Loan Bid Loan Period Date Made By
---- ---------- ----------- -------- ---------- --------
<S> <C> <C> <C> <C> <C>
</TABLE>
136
<PAGE> 142
EXHIBIT C-2
FORM OF COMPETITIVE BID REQUEST
National Westminster Bank USA,
as Agent for the Banks
referred to below
[Address]**
Attention:
Dear Sirs:
The undersigned, Ply Gem Industries, Inc. (the "Company"),
refers to the Credit Agreement dated February __, 1994 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement")
among the Company, National Westminster Bank USA, as Agent (the "Agent"), and
the Banks named therein. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement. The Company hereby gives you notice pursuant to subsection 2.5(b)
of the Credit Agreement that it requests a Competitive Bid Loan under the
Agreement, and in that connection sets forth below the terms on which such
Competitive Bid Loan is requested to be made:
A. Date of Competitive Bid Loan
(which is a Business Day)*** ____________________
B. Principal Amount of
Competitive Bid Loan**** ____________________
__________________________________
** 592 Fifth Avenue, New York, New York 10036, Attention: Robert
Petersen, telecopy: (212) 602-2080; or __________, Attention: __________,
telecopy: __________.
*** Which shall be the fourth Business Day after the date this notice is
received by the Agent.
**** Not less than an amount which is $5,000,000 (and in integral
multiples of $1,000,000 in excess thereof) and not greater than the excess,
if any, of the aggregate Commitments over the aggregate principal amount of
all Loans and Bank L/C Obligations outstanding immediately prior to the making
of such requested Competitive Bid Loan.
137
<PAGE> 143
C. Interest Period and the
last day thereof***** ____________________
D. Borrower ____________________
Upon acceptance of any or all of the Loans offered by the
Banks in response to this request, the Company shall be deemed to have
represented and warranted that the conditions to lending specified in
subsection 4.2 of the Credit Agreement have been satisfied.
Very truly yours,
PLY GEM INDUSTRIES, INC.
By ____________________
Name
Title
__________________________________
***** Which shall be subject to the definition of "Interest Period"
set forth in the Credit Agreement and shall end on or before the Termination
Date.
138
<PAGE> 144
EXHIBIT C-3
FORM OF INVITATION FOR COMPETITIVE BID
[Name of Bank]
[Address]
Attention:
Dear Sirs:
Reference is made to the Credit Agreement dated February __,
1994 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement") among Ply Gem Industries, Inc., National Westminster Bank
USA, as Agent (the "Agent"), and the Banks named therein. Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned
to such terms in the Credit Agreement. The Company made a Competitive Bid
Request on __________, 199_, pursuant to subsection 2.5(b) of the Credit
Agreement, and in that connection you are invited to submit a Competitive Bid
by [Date]/[Time].* Your Competitive Bid must comply with subsection 2.5(d) of
the Credit Agreement and the terms set forth below on which the Competitive Bid
Request was made:
(A) Date of Competitive
Bid Loan ____________________
(B) Principal Amount of
Competitive Bid Loan ____________________
(C) Interest Period and
the last day thereof** ____________________
Very truly yours,
NATIONAL WESTMINSTER BANK USA, as Agent
By__________________________
Name
Title
__________________________________
* The Competitive Bid must be received by the Agent not later than 9:30
A.M. (New York City time) the third Business Day prior to the proposed
borrowing date, and made by 9:15 A.M. (New York City time) in the case of the
Agent.
** Which shall be subject to the definition of "Interest Period" set
forth in the Credit Agreement and shall end on or before the Termination Date.
139
<PAGE> 145
EXHIBIT C-4
FORM OF COMPETITIVE BID
National Westminster Bank USA,
as Agent for the Banks
referred to below
[Address]*
Attention:
Dear Sirs:
The undersigned, [Name of Bank], refers to the Credit
Agreement dated February __, 1994 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement") among Ply Gem Industries,
Inc. (the "Company"), National Westminster Bank USA, as Agent (the "Agent"),
and the Banks named therein. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement. The undersigned hereby makes a Competitive Bid pursuant to
subsection 2.5(d) of the Credit Agreement, in response to the Invitation for
Competitive Bids made by Agent dated __________, 199_, and in that connection
sets forth below the terms on which such Competitive Bid is made:
A. Date of Competitive
Bid Loan** ____________________
B. Principal Amount
Offered*** ____________________
C. Name of Borrower ____________________
__________________________________
* 592 Fifth Avenue, New York, New York 10036, Attention: Robert
Petersen, telecopy: (212) 602-2080; or __________, Attention: __________,
telecopy: __________.
** Which shall be identical to that set forth in the related Competitive
Bid Request.
*** The offered principal amount may not be less than an amount which is
$5,000,000 (and in integral multiples of $1,000,000 in excess thereof) and not
greater than the amount requested in the Competitive Bid Request, but if more
than one offer is made, may be subject to limitation as to the maximum
aggregate principal amount of Competitive Bid Loans for which offers made by
such quoting may be accepted. A Competitive Bid may set forth up to two
separate offers by the quoting Bank with respect to each Interest Period
specified in the related Invitation for Competitive Bids.
140
<PAGE> 146
D. Competitive Bid Rate ____________________
E. Interest Period and the
last day thereof ____________________
The undersigned hereby confirms that it is prepared, subject
to the terms and conditions set forth in the Credit Agreement, to extend credit
to the Company upon acceptance by the Company of this bid in accordance with
subsection 2.5(f) of the Credit Agreement.
Very truly yours,
[NAME OF BANK]
By____________________
Name
Title
141
<PAGE> 147
EXHIBIT C-5
FORM OF COMPETITIVE BID ACCEPT/REJECT LETTER
__________, 199_
National Westminster Bank USA,
as Agent for the Banks
referred to below
[Address]*
Attention:
Dear Sirs:
The undersigned, Ply Gem Industries, Inc. (the "Company"),
refers to the Credit Agreement dated February __, 1994 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement")
among the Company, National Westminster Bank USA, as Agent (the "Agent"), and
the Banks named therein. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement.
In accordance with subsection 2.5(e) of the Agreement, we have
received a summary of bids in connection with our Competitive Bid Request dated
__________, 199_ (the "Competitive Bid Summary") and in accordance with
subsection 2.5(f) of the Credit Agreement, on behalf of ourself and/or any
Designated Subsidiary we hereby accept the following bids:
<TABLE>
<CAPTION>
Principal Maturity
Bank Amount Rate Date
- ---- --------- ----------- --------
<S> <C> <C> <C>
________ __________ ___________ ___________
________ __________ ___________ ___________
________ __________ ___________ ___________
</TABLE>
We hereby reject all other bids identified in the Competitive
Bid Summary on behalf of ourself and/or any Designated Subsidiary.
__________________________________
* 592 Fifth Avenue, New York, New York 10036 or __________, Note: This
notice must be received by the Agent at the applicable office not later than
10:00 A.M. New York City time, as the case may be, on the second Business Day
prior to the requested date of borrowing.
142
<PAGE> 148
Proceeds of the Competitive Bid Loans to be made pursuant to
this Competitive Bid Accept/Reject Letter should be deposited in National
Westminster Bank USA account number [__________] on the date of borrowing
requested.
Very truly yours,
PLY GEM INDUSTRIES, INC.
By____________________
Name:
Title:
143
<PAGE> 149
EXHIBIT D-1
BORROWING CERTIFICATE
Pursuant to subsection 4.1 of the Credit Agreement dated as of
February __, 1994, (the "AGREEMENT"; the terms defined therein being used
herein as therein defined) among Ply Gem Industries, Inc. (the "COMPANY"), the
several banks parties to the Agreement (collectively, the "BANKS"), and
National Westminster Bank USA, as agent for the Banks thereunder (in such
capacity, the "AGENT"), the undersigned, in his capacity as Executive Vice
President of the Company, hereby certifies as follows:
1. The representations and warranties of the Company set forth in
the Agreement or which are contained in any certificate, document or financial
or other statement furnished pursuant to or in connection with the Agreement
after the date of the Agreement, are true and correct in all material respects
on and as of the date hereof with the same effect as if made on the date
hereof;
2. The conditions precedent set forth in subsections 4.1 and 4.2
of the Agreement have been or will be satisfied prior to or concurrently with
the making of the initial Loans under the Agreement;
3. Immediately prior to and immediately after the making of the
Loans requested to be made on the date hereof, no Default or Event of Default
has occurred or is continuing under the Agreement;
4. _____________________ is and at all times since 19__, has been
the duly elected and qualified Secretary of the Company;
and the undersigned, in his capacity as Secretary of the Company, hereby
certifies as follows:
5. Attached hereto as Exhibit I is a true and complete copy of
resolutions duly adopted by the Board of Directors of the Company on February
__, 1994; such resolutions have not in any way been amended, modified, revoked
or rescinded and have been in full force and effect since their adoption to and
including the date hereof and are now in full force and effect; such
resolutions are the only corporate proceedings of the Company now in force
relating to or affecting the matters referred to therein; attached hereto as
Exhibit IIA is a true and complete copy of the By-laws of the Company as in
effect at all times since __________, 199_ to and including the date hereof;
and attached hereto as Exhibit IIB is a true and complete copy of the
Certificate of Incorporation of the Company as in effect at all times since
_________ __, 19__, to and including the date hereof; and
144
<PAGE> 150
6. The following persons are now duly elected and qualified
officers of the Company, holding the offices indicated next to their respective
names below, and such officers have held such offices with the Company at all
times since ____________ ___, to and including the date hereof, and the
signatures appearing opposite their respective names below are the true and
genuine signatures of such officers, and each of such officers is duly
authorized to execute and deliver on behalf of the Company the Agreement and
the Notes of the Company to be issued pursuant thereto and any certificate or
other document to be delivered by the Company pursuant to the Agreement:
Name Office Signature
Executive
Vice President
Secretary
IN WITNESS WHEREOF, the undersigned have hereunto set our names in
the capacities indicated.
________________________________ ______________________________
Title: Executive Vice President Title: Secretary
Date: February __, 1994
145
<PAGE> 151
EXHIBIT D-2
BORROWING CERTIFICATE
Pursuant to subsection 4.1 of the Credit Agreement dated as of
February ___, 1994, (the "AGREEMENT"; the terms defined therein being used
herein as therein defined) among Ply Gem Industries, Inc. (the "COMPANY"), the
several banks parties to the Agreement (collectively, the "Banks"), and
National Westminster Bank USA, as agent for the Banks thereunder (in such
capacity, the "AGENT"), the undersigned, in his capacity as Executive Vice
President of ________________________ (the "DESIGNATED SUBSIDIARY"), hereby
certifies as follows:
1. The representations and warranties of the Designated
Subsidiary set forth in the Guaranty and the Agreement or which are contained
in any certificate, document or financial or other statement furnished pursuant
to or in connection with the Guaranty or the Agreement after the date of the
Guaranty and the Agreement, are true and correct in all material respects on
and as of the date hereof with the same effect as if made on the date hereof;
2. The conditions precedent set forth in subsections 4.1 and 4.2
of the Agreement have been or will be satisfied prior to or concurrently with
the making of the initial Loans under the Agreement;
3. Immediately prior to and immediately after the making of the
Loans requested to be made on the date hereof, no Default or Event of Default
has occurred or is continuing under the Agreement;
4. [_______________] is and at all times since ____________, has
been the duly elected and qualified Secretary of the Designated Subsidiary; and
the undersigned, in his capacity as Secretary of the Designated Subsidiary,
hereby certifies as follows:
5. Attached hereto as Exhibit I is a true and complete copy of
resolutions duly adopted by the Board of Directors of the Designated Subsidiary
on February __, 1994; such resolutions have not in any way been amended,
modified, revoked or rescinded and have been in full in effect at all times
since including the date hereof; and force and effect since their adoption to
and including the date hereof and are now in full force and effect; such
resolutions are the only corporate proceedings of the Designated Subsidiary now
in force relating to or affecting the matters referred to therein; attached
hereto as Exhibit IIA is a true and complete copy of the By-laws of the
Designated Subsidiary as in effect at all times since _______ ___, 199_ to and
including the date hereof; and attached hereto as Exhibit IIB is a true and
146
<PAGE> 152
complete copy of the Certificate of Incorporation of the Designated Subsidiary
as in effect at all times since __________ __, 19__, to and including the date
hereof; and
6. The following persons are now duly elected and qualified
officers of the Designated Subsidiary, holding the offices indicated next to
their respective names below, and such officers have held such offices with the
Designated Subsidiary at all times since ________, 19__, to and including the
date hereof, and the signatures appearing opposite their respective names below
are the true and genuine signatures of such officers, and each of such officers
is duly authorized to execute and deliver on behalf of the Designated
Subsidiary the Guaranty and any certificate or other document to be delivered
by the Designated Subsidiary pursuant to the Agreement and the Guaranty:
Name Office Signature
[_______________] Executive
______________________________
Vice President
[_______________] Secretary ______________________________
IN WITNESS WHEREOF, the undersigned have hereunto set our names in
the capacities indicated.
________________________________ ______________________________
Title: Executive Vice President Title: Secretary
Date: February __, 1994
147
<PAGE> 153
EXHIBIT E
LABOR DISPUTES; COLLECTIVE BARGAINING AGREEMENTS;
EMPLOYEE GRIEVANCES
None
148
<PAGE> 154
EXHIBIT F-1
LEGAL OPINION OF ELIHU H. MODLIN, ESQ.
See Attached
149
<PAGE> 155
February 24, 1994
[Letterhead]
To the Banks
on the Attached Schedule
Ladies and Gentlemen:
We have acted as general counsel for Ply Gem Industries, Inc., a
Delaware corporation (the "Company"), and each of the Designated
Subsidiaries in connection with the execution and delivery of (i) the
Credit Agreement, dated February __, 1994 (the "Credit Agreement"), among
the Company, the Designated Subsidiaries, the banks parties to the Credit
Agreement (collectively, the "Banks"), and National Westminster Bank USA,
as agent (in such capacity, the "Agent"), (ii) the Credit Notes, (iii) the
Swing Line Notes, (iv) the Designated Subsidiary Acquisition Notes, (v)
the Guaranties, (vi) the Stock Security Agreement, and (vii) the Company
Pledge Agreement.
The Credit Notes, the Swing Line Notes, and the Designated
Subsidiary Acquisition Notes are herein collectively called the "Notes".
The Security Indenture and Trust Agreement (the "Security Indenture"), the
Stock Security Agreement and the Company Pledge Agreement are herein
collectively called the "Security Documents". All other terms used herein
which are defined in the Credit Agreement shall have their respective
meanings set forth in the Credit Agreement unless otherwise defined
herein. This opinion is delivered to you pursuant to subsection 4.1(f) of
the Credit Agreement.
In connection with this opinion, We have examined (i) executed
copies of each of the Credit Agreement, the Notes, the Guaranties, the
Security Documents, the Indenture dated as of October 1, 1988, as amended,
between the Company and the Bank of Montreal Trust Company as trustee (the
"Indenture"), (ii) the form of Competitive Bid Note, and (iii) such
corporate documents and records of the Company and each of the
Subsidiaries, certificates of public officials and officers of the Company
and each of the Subsidiaries and such other documents as I have deemed
necessary or appropriate for the purposes of this opinion. In stating my
opinion, I have assumed the genuineness
<PAGE> 156
Page 2 February 24, 1994
of the signature of, and the authority of, the person signing the Credit
Agreement on behalf of each of the Banks and the Agent, the authenticity
of all documents submitted to us as originals and the conformity to
authentic original documents of all documents submitted to us as
certified, conformed or photostatic copies.
Based upon the foregoing, we are of the opinion that:
1. The Company and each of its Subsidiaries (i) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) has the corporate power and
authority and the legal right to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it
is currently engaged and (iii) is duly qualified as a foreign corporation
and in good standing under the laws of each jurisdiction where
qualification is required by the nature of its business or the character
and location of its property or business and in which the failure to so
qualify could have a material adverse effect on the business, operations,
property or financial condition of the Company and its Subsidiaries taken
as a whole.
2. The Company (i) has the corporate power and authority (a)
to execute and deliver the Credit Note to be executed and delivered by it
(the "Parent Note"), (b) to execute, deliver and perform the Credit
Agreement and the Guaranty to be executed and delivered by it (the "Parent
Guaranty"), and each of the Security Documents and each document
contemplated thereby, and (c) to borrow under the Credit Agreement, (ii)
has taken all necessary corporate action to authorize (a) the borrowing
under the Credit Agreement, (b) the execution and delivery of the Parent
Note, and (c) the execution, delivery and performance of the Credit
Agreement, the Parent Guaranty, each of the Security Documents and each
document contemplated thereby. No consent or approval of any Person
(including without limitation the stockholders of the Company), no consent
or approval of any landlord or mortgagee, no waiver of consent, license,
approval, authorization or declaration of any Governmental Authority or
filing with any Governmental Authority is or will be required in
connection with the execution, delivery, performance, validity or
enforceability of the Credit Agreement, the Parent Note, the Parent
Guaranty, any of the Security Documents or any document contemplated
thereby.
3. Each of the Designated Subsidiaries (i) has the corporate
power and authority (a) to execute and deliver each of the Notes (each
such Note, a "Subsidiary Note") and the Competitive Bid Note, if any, to
be executed and delivered by it, (b) to execute, deliver and perform the
Credit Agreement and (c)
<PAGE> 157
Page 3 February 24, 1994
to borrow under the Credit Agreement, and (ii) has taken all necessary
corporate action to authorize (a) the borrowing under the Credit
Agreement, (b) the execution and delivery of each Subsidiary Note and the
Competitive Bid Note, if any, to be executed and delivered by it, and (c)
the execution, delivery and performance of the Credit Agreement. Each
Subsidiary which has executed a Guaranty (collectively, the "Subsidiary
Guaranties") has the corporate power and authority to execute, deliver and
perform such Guaranty, and has taken all necessary corporate action to
authorize the execution, delivery and performance of such Guaranty. No
consent or approval of any Person (including without limitation the
Company), no consent or approval of any landlord or mortgagee, no waiver
of consent, license, approval, authorization or declaration of any
Governmental Authority or filing with any Governmental Authority is or
will be required in connection with the execution delivery, performance,
validity or enforceability of the Credit Agreement, the Subsidiary Notes,
any Competitive Bid Notes or the Subsidiary Guaranties.
4. The Credit Agreement, the Parent Note, the Parent
Guaranty, each of the Security Documents and each document contemplated to
be delivered thereby has been duly executed and delivered, and constitutes
the legal, valid and binding obligation of the Company enforceable against
the Company in accordance with its respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or
at law).
5. The Credit Agreement, each of the Subsidiary Notes, and
each of the Subsidiary Guaranties has been duly executed and delivered,
and constitutes the legal, valid and binding obligation of the Subsidiary
party thereto enforceable against such Subsidiary in accordance with its
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
6. Assuming due execution and delivery, each of the
Competitive Bid Notes, will be the legal, valid and binding obligation of
the Subsidiary party thereto enforceable against such Subsidiary in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally and by
general
<PAGE> 158
Page 4 February 24, 1994
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
7. The execution and delivery of the Parent Note and each
Subsidiary Note, and each Competitive Bid Note, if any, and the execution,
delivery and performance of the Credit Agreement, the Guaranties, each of
the Security Documents, and each document contemplated thereby, the
borrowings under the Credit Agreement and the use of the proceeds thereof
as provided in the Credit Agreement, as of the date hereof, will not
violate any Requirement of Law, including without limitation, the
provisions of Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System, violate any Contractual Obligation or create (with
or without the giving of notice or passing of time or both) a default
under any material agreement, bond, note, or indenture to which the
Company or any Subsidiary is a party or by which it is bound or any of its
properties or assets is affected, or result win the imposition of any
lien, charge, encumbrance of any nature whatsoever upon any of the
properties or assets owned by or used in connection with the business of
the Company or any subsidiary except for the liens and security interests
created and granted to the Agent pursuant to the Security Documents.
8. To the best of our knowledge after due inquiry, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or threatened by or against the Company
or any of its Subsidiaries, or against any of its or their respective
properties or revenues (i) with respect to the Credit Agreement, the
Notes, the Guaranties, the Security Documents, any document contemplated
to be delivered thereby, or any of the transactions contemplated by any
such documents, or (ii) which, if adversely determined, would have a
material adverse effect on the business, operations, property or financial
or other condition of the Company and any of its Subsidiaries taken,as a
whole.
9. Neither the Company nor any Subsidiary is an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
10. At the date hereof the Company has no Subsidiaries
except those listed on Schedule IV to the Credit Agreement, and the
Company or the Subsidiary therein specified owns directly 100% of the
outstanding capital stock of each such Subsidiary, free and clear of any
Lien other than the Lien created by the Security Documents. All of the
shares of capital stock of the Subsidiaries have been duly authorized and
issued, and are fully paid, non-assessable and free of preemptive rights.
<PAGE> 159
Page 5 February 24, 1994
11. Each of the Security Indenture, the Stock Security
Agreement and the Company Pledge Agreement creates a legal, valid and
enforceable security interest in all of the issued and outstanding shares
of capital stock of, with respect to (i) The Security Indenture, the
Existing Pledged Subsidiaries, (ii) The Stock Security Agreement, the
Newly Pledged Subsidiaries, and (iii) the Company Pledge Agreement, the
Existing Pledged Subsidiaries and the Newly Pledged Subsidiaries (such
shares of capital stock being herein collectively called the "Pledged
Securities"). Pursuant to the Security Documents, the Pledged Securities
are pledged by the Company in favor of the Agent as security for the
payment, observance and performance by the Company of the Obligations
including, without limitation, the Guaranteed Obligations as defined and
provided for in the Parent Guarantee. Assuming possession by the Agent of
the Pledged Securities, the security interests created by the Security
Indenture and the Stock Security Agreement are first priority security
interests in the Pledged Securities subject to no prior or equal lien and
based upon our knowledge at this time, the security interests created by
the Company Pledge Agreement are subject only to the aforementioned
security interests. Based upon my knowledge at this time, upon
termination of the Stock Security Agreement and the Security Indenture,
the security interest created by the Company Pledge Agreement will be a
first priority security interest in the Pledged Securities, subject to no
prior or equal Lien.
12. The Agent has been duly appointed "successor trustee"
under the Security Indenture which appointment is effective not later than
the date hereof.
13. The obligations of the Company under the Credit Agreement
constitute "Senior Indebtedness" as defined in the Indenture and the
Security Indenture.
We are members of the Bar of the State of New York and do not
purport to be an expert in, or to express any opinion concerning the laws
of, any jurisdiction other than the State of New York, the Federal laws of
the United States and General Corporation Law of the State of Delaware.
Very truly yours,
/s/ Elihu Modlin
<PAGE> 160
SCHEDULE TO OPINION
NATIONAL WESTMINSTER BANK USA
EUROPEAN AMERICAN BANK
LTCB TRUST COMPANY
NATIONSBANK OF NORTH CAROLINA,
NATIONAL ASSOCIATION
CONTINENTAL BANK N.A.
BANK OF MONTREAL
FLEET BANK
IBJ SCHRODER BANK & TRUST COMPANY
THE FIRST NATIONAL BANK OF BOSTON
MELLON BANK, N.A.
THE YASUDA TRUST AND BANKING COMPANY,
LIMITED NEW YORK BRANCH
THE DAIWA BANK, LIMITED
<PAGE> 161
EXHIBIT F-2
LEGAL OPINION OF WINSTON & STRAWN
See Attached
150
<PAGE> 162
Exhibit F-2
[Winson & Strawn Opinion Letter]
February __, 1994
To the Banks
on the Attached Schedule
Ladies and Gentlemen:
We have acted as counsel to National Westminster Bank USA in its
capacity as Agent and as a Bank under the Credit Agreement hereinafter
referred to. You have asked for this opinion in connection with the
execution and delivery of (i) the Credit Agreement, dated February __,
1994 (the "Credit Agreement"), among Ply Gem Industries, Inc., the
Designated Subsidiaries, the banks parties to the Credit Agreement
(collectively, the "Banks"), and National Westminster Bank USA, as agent
(in such capacity, the "Agent"), (ii) the Credit Notes, (iii) the Swing
Line Notes, (iv) the Designated Subsidiary Acquisition Notes, (v) the
Guaranties, (vi) the Stock Security Agreement, and (vii) the Company
Pledge Agreement.
The Company and each of the Designated Subsidiaries are herein
collectively called the "Borrowers". The Credit Notes, the Swing Line
Notes, and the Designated Subsidiary Acquisition Notes are herein
collectively called the "Notes". The Security Indenture and Trust
Agreement is hereinafter called the "Security Indenture". The Stock
Security Agreement and the Company Pledge Agreement are herein
collectively called the "Security Documents". The Credit Agreement, the
Notes, the Guaranties, and the Security Documents are herein collectively
called the "Loan Documents". All other terms used herein which are
defined in the Credit Agreement shall have their respective meanings set
forth in the Credit Agreement unless otherwise defined herein.
As counsel to the Agent, we have prepared certain of the Loan
Documents, including, without limitation, (a) the Credit Agreement, (b)
the Notes, including the form of Competitive Bid Note, (c) the Guaranties,
and (d) the Security Documents. We have also reviewed (i) a certified
copy of the articles of incorporation and all amendments thereto for the
Borrowers and each of the Guarantors, (ii) a certified copy of the
resolutions of each of the Borrowers and each of the Guarantors
authorizing such party to execute and deliver the documents and
instruments referred to therein, (iii) an incumbency certificate for the
officers of each of the Borrowers and each of the Guarantors, (iv)
certificates of good standing for each of the Borrowers and each of the
Guarantors,
<PAGE> 163
To the Banks on the
Attached Schedule
February __, 1992
(v) by-laws for each of the Borrowers and each of the Guarantors, (vi) a
fully executed counterpart of the Credit Agreement, (vii) the executed
Notes, (viii) a fully executed copy of each Security Document, (ix) a copy
of the Security Indenture, (x) a fully executed copy of each Guaranty, and
(xi) the opinion of counsel for the Borrowers and each of the Guarantors.
We have also reviewed such other documents and such matters of law as we
have deemed necessary and appropriate in order to render this opinion.
In making such review, we have assumed the authenticity of all
documents; delivered to us as certified copies of the original, the
genuineness of all signatures, the authority of each officer executing the
Credit Agreement on behalf of each Bank and the Agent and the conformity
of all photocopies of documents to the originals thereof.
For purposes of this opinion, we have assumed, with your
approval, and without independent investigation, the following:
A. Each of the Loan Documents and the Security Indenture has
been duly authorized, executed, and delivered by the party or parties
thereto;
B. All statements of fact in all representations and
warranties set forth in each of the Loan Documents, the Security Indenture
and in all certificates delivered by or on behalf of any Borrower or
Guarantor at the Closing, and the opinion of Elihu H. Modlin, Esq.
delivered at the Closing, are correct and complete;
C. The proceeds of the initial Loans (none of which shall
have been advanced at the Closing) will be applied for the purposes set
forth in, and not in violation of the provisions of, the Credit Agreement,
and the Loans will be valid and binding obligations of the Borrowers with
respect thereto; and
D. The Company has good, sufficient and marketable title to
the collateral covered by the Security Documents and the Security
Indenture, free and clear of all charges, liens, security interests,
encumbrances or adverse claims of any kind, except for the Liens granted
to the Agent and Liens permitted to exist under the Credit Agreement.
On the basis of the foregoing, and subject to the
qualifications set forth below, we are of the opinion that:
-2-
<PAGE> 164
To the Banks on the
Attached Schedule
February __, 1992
1. The Agent, acting on behalf of itself and the Banks, is
in receipt of all documents the delivery of which (unless waived by the
Agent) was a condition precedent to the obligations of the Banks to make
the Loans, and of National Westminster Bank USA to issue the L/Cs, under
and pursuant to the Credit Agreement.
2. The Credit Agreement, the Notes, including the
Competitive Bid Notes, if any, the Guaranties and the Security Documents,
when duly executed and delivered in accordance with the terms of the
Credit Agreement, will be the valid and binding obligations of each
Borrower and/or Guarantor party thereto, under New York Law, enforceable
in accordance with their respective terms, except that we express no
opinion as to:
(a) the effect of the law of any jurisdiction (other
than the State of New York) in which any Bank may be located
which limits rates of interest and other fees which may be
charged or collected by such Bank;
(b) the right, title or interest of the Company or
any other Person in or to any collateral in which any security
interests, liens or pledges are or are purported to be granted by
or under any of the Security Documents or the Security Indenture;
(c) the perfection or priority of any such security
interest referred to in clause (b) above;
(d) the availability of the remedy of specific
performance to the extent it is subject to judicial discretion;
(e) the validity, binding effect or enforceability
under certain circumstances, of contractual provisions in the
Loan Documents and the Security Indenture (i) waiving defenses to
obligations where such waivers are against public policy, and
(ii) waiving broadly or vaguely stated rights or unknown future
rights;
(f) the penultimate sentence of Section 9.9 of the
Credit Agreement;
(g) the application of judicial decisions invoking
statutes or principles of equity which have held that certain
covenants and other provisions or agreements, including those
providing for the acceleration of indebtedness due under debt
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<PAGE> 165
To the Banks on the
Attached Schedule
February __, 1992
instruments upon the occurrence of events therein described, are
unenforceable in circumstances where it cannot be demonstrated
that the enforcement of such provisions is reasonably necessary
for the protection of the lender;
(h) the enforceability, under certain circumstances,
of provisions imposing penalties or forfeitures or providing for
late payment charges or increases in applicable interest rates
upon default;
(i) the enforceability, under certain circumstances,
of provisions relating to self-help or summary remedies without
notice or opportunity for hearing or correction;
(j) whether the proceeds of the collateral covered
by the Security Documents and the Security Indenture will be
subject to the limitations on the enforceability of a security
interest in proceeds set forth in Section 9-306 of the UCC;
(k) the validity, binding effect, or enforceability,
under certain circumstances, of provisions that rights or
remedies are not exclusive, that "reasonable" attorneys' fees are
collectible without court approval, that every right or remedy is
cumulative and may be exercised, in addition to or with any other
right or remedy, or that the election of some particular remedy
or remedies does not preclude recourse to one or more others,
including, without limitation, the right to obtain a deficiency
judgment against the Borrowers or the Guarantors;
(1) the negotiability of any of the Notes;
(m) the effect, if any, of any Federal or state
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar law now or hereafter in effect,
affecting the rights of creditors generally;
(n) the effect on enforceability of the
application of general principles of equity, or laws and judicial
decisions affecting the remedies provided in the Security
Documents and the Security Indenture for the enforcement of the
security interest in the collateral provided for therein;
(o) whether or not any of the Borrowers or any of
the Guarantors is "insolvent" or will be rendered "insolvent" by
the execution and delivery of the Credit Agreement or any of
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<PAGE> 166
To the Banks on the
Attached Schedule
February __, 1992
the Guaranties, or the creation of the liens and security
interests provided for in the Security Documents, as the term
"insolvent" is used in Section 547 of the Bankruptcy Code or in
the Uniform Fraudulent Conveyance Act as enacted in New York; and
(p) the validity of any collateral security obtained
at security for any obligations hereafter incurred by the
Borrowers to you which obligations are not incurred under and
pursuant to the Credit Agreement.
In addition, we wish to point out that: (i) provisions of the
Credit Agreement and of the Security Documents and the Security Indenture
which permit the Agent or a Bank to make determinations or take actions
may be subject to requirements that such determinations or actions be
reasonable and be taken in good faith; and (ii) as holder of a Note, each
Bank may, under certain circumstances, be required to prove the
outstanding amount of the Loans evidenced thereby.
We are members of the bar of the State of New York and we do not
herein express any opinion as to any matters governed by any laws other
than the internal laws of the State of New York and any applicable Federal
laws.
This opinion is as of the date hereof and we undertake no, and
disclaim any, obligation to advise you of any change in any matter set
forth herein. This opinion has been furnished to you at your request in
connection with the transactions described herein, and it may not be
relied upon by you for any other purpose or by any other person for any
purpose without our prior written consent.
Very truly yours,
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<PAGE> 167
SCHEDULE TO OPINION
NATIONAL WESTMINSTER BANK USA
EUROPEAN AMERICAN BANK
LTCB TRUST COMPANY
NATIONSBANK OF NORTH CAROLINA,
NATIONAL ASSOCIATION
CONTINENTAL BANK N.A.
BANK OF MONTREAL
FLEET BANK
IBJ SCHRODER BANK & TRUST COMPANY
THE FIRST NATIONAL BANK OF BOSTON MELLON BANK, N.A.
THE YASUDA TRUST AND BANKING COMPANY,
LIMITED NEW YORK BRANCH
THE DAIWA BANK, LIMITED
-6-
<PAGE> 168
EXHIBIT G
NAME CHANGES, MERGERS, ACQUISITIONS
1. Richwood Building Products, Inc. incorporated as The PGVA
Corporation, name changed to Vagedes Industries, Inc. on
11/23/92, name changed to Richwood Building Products, Inc. on
2/16/93.
2. Goldenberg Group, Inc. formerly known as Goldenberg Plywood &
Lumber Co., Inc. (Goldenhill Wood Products, Inc. and
Continental Wood Products, Corp., now merged into Goldenberg
Group, Inc.)
3. Studley Products, Inc. formerly known as Studley Paper Co.,
Inc. Reams, Inc., Vacuum Cleaner Bags, Inc., and Studley
Paper Co., Inc. merged into Air Filters, Inc. on 1/30/91. Air
Filters, Inc. changed name to Studley Products, Inc. on
1/31/91.
151
<PAGE> 169
EXHIBIT H
CONTINGENT LIABILITY RELATING TO POST-RETIREMENT BENEFIT
None
152
<PAGE> 170
EXHIBIT I
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated ___________
Reference is hereby made to the Credit Agreement dated
February __, 1994 (the "CREDIT AGREEMENT") by and among Ply Gem Industries,
Inc., a Delaware corporation (the "BORROWER"), the Banks signatory thereto
(collectively, the "BANKS") and National Westminster Bank USA in its capacity
as agent for the Banks (in such capacity, the "AGENT"). Capitalized terms used
herein that are defined in the Credit Agreement that are not otherwise defined
herein shall have the respective meanings ascribed thereto in the Credit
Agreement.
_______________________________, a __________________ (the
"ASSIGNOR") and _______________________________________, a ________________,
(the "ASSIGNEE") agree as follows:
1. The Assignor hereby sells and assigns to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor, a __
% interest in and to all of the Assignor's rights and obligations under the
Credit Agreement as of the Effective Date (as defined below) (including,
without limitation, such percentage interest in the Assignor's Commitment as in
effect on the Effective Date, and the Loans owing to the Assignor on the
Effective Date, and the Note(s) held by the Assignor).
2. The Assignor: (i) represents and warrants that as of
the date hereof its Commitment (without giving effect to assignments thereof
that have not yet become effective) is $__________ and the aggregate
outstanding principal amount of Loans owing to it (without giving effect to
assignments thereof that have not yet become effective) is $__________; (ii)
represents and warrants that it is the legal and beneficial owner of the
interest being assigned by it hereunder, and that such interest is free and
clear of any adverse claim; (iii) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or any other
instrument or document furnished pursuant thereto; and (iv) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any Subsidiary or the performance or
observance by the Borrower or any Subsidiary of any of its obligations under
the Credit Agreement or any other instrument or document furnished pursuant
thereto; and (v) attaches the Note(s) referred to in paragraph 1 above and
requests that the Agent exchange such Note(s) for new Note(s) as follows: [a
Credit Note dated the Effective Date (as such term is defined below) in
153
<PAGE> 171
the principal amount of $ __________ payable to the order of the Assignee, a
Credit Note dated the Effective Date in the principal amount of $ __________
payable to the order of the Assignor, a Competitive Bid Note dated the
Effective Date in the principal amount of $________ payable to the order of the
Assignee and a Competitive Bid Note dated the Effective Date in the principal
amount of $________ payable to the order of the Assignor.]
3. The Assignee: (i) confirms that it has received a
copy of the Credit Agreement, together with copies of such financial statements
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Acceptance; (ii) agrees that it will, independently and without reliance upon
the Agent, the Assignor 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 action under the Credit Agreement;
(iii) confirms that it is an Eligible Assignee; (iv) appoints and authorizes
the Agent to take such action as its agent on its behalf and to exercise such
powers under the Credit Agreement as are delegated to the Agent by the terms
thereof, together with such powers as are reasonably incidental thereto; (v)
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Bank; and (vi) specifies as its addresses for NWUSA Rate
Loans and Eurodollar Loans and Competitive Bid Loans (and address for notices)
the offices set forth beneath its name on the signature pages hereof.
4. The effective date for this Assignment and Acceptance
shall be ________________ (the "EFFECTIVE DATE"). Following the execution of
this Assignment and Acceptance, it will be delivered to the Agent for
acceptance by the Agent.
5. Upon such acceptance, as of the Effective Date: (i)
the Assignee shall be a party to the Credit Agreement and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of
a Bank thereunder and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.
6. Upon such acceptance, from and after the Effective
Date, the Agent shall make all payments under the Credit Agreement and the
Note(s) in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and commitment fees with
respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement and the Note(s)
for periods prior to the Effective Date directly between themselves.
154
<PAGE> 172
7. This Assignment and Acceptance shall be governed by,
and construed in accordance with, the laws of the State of New York.
[NAME OF ASSIGNOR]
By_________________________________
Title
[NAME OF ASSIGNEE]
By_________________________________
Title
Lending Office for NWUSA Rate
Loans, Eurodollar Loans and
Competitive Bid Loans:
Address for Notices:
Attention:
Telephone No.:
Telex No.:
Accepted this ___ day
of ______________, 199_
NATIONAL WESTMINSTER BANK USA,
as Agent
By____________________________
Title
155
<PAGE> 173
EXHIBIT J
FORM OF SOLVENCY CERTIFICATE
See Attached
156
<PAGE> 174
OFFICER'S CERTIFICATE
Re: Solvency
To: National Westminster Bank USA, as Agent
In connection with your execution and delivery of the Credit
Agreement dated as of the date hereof (the "Credit Agreement"), by and among
Ply Gem Industries, Inc., a Delaware corporation (the "Company"), the banks
signatory thereto (the "Banks") and National Westminster Bank USA, as Agent, I
hereby certify as follows:
1. I am the duly qualified and acting Executive Vice President of
the Company.
2. I have carefully reviewed the contents of this Certificate and
conferred with counsel for the Company for the purpose of discussing the
meaning of any provisions hereof which I desired to have clarified.
3. In connection with my preparation for the consummation of the
transactions contemplated by the Credit Agreement, I have reviewed such
financial information as I have deemed appropriate.
4. I have carefully reviewed the definition of "Solvent" in the
Credit Agreement.
5. Based upon the foregoing, to the best of my knowledge, the
Company is Solvent (as such term is defined in the Credit Agreement) and, in
connection therewith, that
(i) the fair market value of its assets is greater than its
probable liability on its existing debts as such debts
(including contingent debts) become absolute and
matured;
(ii) it is able and expects to be able to pay its debts
(including, without limitation, contingent debts and
other commitments) as they mature; and
(iii) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
In Witness Whereof, I have executed this Certificate this 24th
day of February, 1994.
--------------------------------
Name: Herbert P. Dooskin
Executive Vice President
Ply Gem Industries, Inc.
<PAGE> 175
OFFICER'S CERTIFICATE
Re: Solvency
To: National Westminster Bank USA, as Agent
In connection with your execution and delivery of the Credit
Agreement dated as of the date hereof (the "Credit Agreement"), by and among
Ply Gem Industries, Inc., a Delaware corporation (the "Company"), the banks
signatory thereto (the "Banks") and National Westminster Bank USA, as Agent, I
hereby certify as follows:
1. I am the duly qualified and acting Executive Vice President of
the Company.
2. I have carefully reviewed the contents of this Certificate and
conferred with counsel for the Company for the purpose of discussing the
meaning of any provisions hereof which I desired to have clarified.
3. In connection with my preparation for the consummation of the
transactions contemplated by the Credit Agreement, I have reviewed such
financial information as I have deemed appropriate.
4. I have carefully reviewed the definition of "Solvent" in the
Credit Agreement.
5. __________________ is a wholly-owned subsidiary of the Company.
6. Based upon the foregoing, to the best of my knowledge,
________________ is Solvent (as such term is defined in the Credit Agreement)
and, in connection therewith, that
(i) the fair market value of its assets is greater than its
probable liability on its existing debts as such debts
(including contingent debts) become absolute and
matured;
(ii) it is able and expects to be able to pay its debts
(including, without limitation, contingent debts and
other commitments) as they mature; and
(iii) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
In Witness Whereof, I have executed this Certificate this 24th
day of February, 1994.
--------------------------------
Name: Herbert P. Dooskin
Executive Vice President
Ply Gem Industries, Inc.
