<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 10-Q
(Mark One)
X Quarterly report pursuant to Section 13 or 15 (d) of the Securities Act
- ----- of 1934
For the quarterly period ended March 29, 1997
--------------
OR
Transition report pursuant to Section 13 or 15 (d) of the Securities
- ----- Act of 1934
For the transition period from _____________ to ______________
Commission file number 1-12164
-------
WOLVERINE TUBE, INC.
--------------------
(Exact name of registrant as specified in its charter)
Delaware 63-0970812
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1525 Perimeter Parkway, Suite 210
Huntsville, Alabama 35806
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(Address of principal executive offices) (Zip Code)
(205) 353-1310
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each class of common stock, as of
the latest practicable date:
Class Outstanding at April 22, 1997
--------- -----------------------------
Common Stock, par value $0.01 per share 13,983,127 shares
<PAGE> 2
WOLVERINE TUBE, INC.
INDEX
<TABLE>
<CAPTION>
Page No.
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<S> <C> <C>
PART I Financial Information
Item 1. Financial Statements
Condensed Consolidated Statements of Income (unaudited) -
Three-Month Periods Ended March 29, 1997 and
March 30, 1996................................................ 2
Condensed Consolidated Balance Sheets (unaudited) -
March 29, 1997 and December 31, 1996.......................... 3
Condensed Consolidated Statements of Cash Flows (unaudited) -
Three-Month Periods Ended March 29, 1997 and
March 30, 1996................................................ 4
Notes to Condensed Consolidated Financial Statements
(unaudited)................................................... 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations..................................... 7
PART II Other Information
Item 1. Legal Proceedings............................................. 14
Item 6. Exhibits and Reports on Form 8-K.............................. 14
</TABLE>
<PAGE> 3
WOLVERINE TUBE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In thousands, except per share data)
<TABLE>
<CAPTION>
THREE-MONTH PERIOD ENDED:
--------------------------
MARCH 29, MARCH 30,
1997 1996
---- ----
<S> <C> <C>
NET SALES ........................................ $ 173,576 $ 179,414
COST OF GOODS SOLD ............................... 151,981 156,000
--------- ---------
GROSS PROFIT ..................................... 21,595 23,414
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ..... 5,406 5,060
--------- ---------
INCOME FROM OPERATIONS ........................... 16,189 18,354
OTHER EXPENSES:
INTEREST EXPENSE .............................. 2,424 2,303
AMORTIZATION AND OTHER, NET ................... 254 128
--------- ---------
INCOME BEFORE INCOME TAXES ....................... 13,511 15,923
INCOME TAXES ..................................... 4,674 5,660
--------- ---------
NET INCOME ....................................... 8,837 10,263
LESS: PREFERRED STOCK DIVIDENDS .................. (70) (70)
--------- ---------
NET INCOME APPLICABLE TO COMMON SHARES ........... $ 8,767 $ 10,193
========= =========
NET INCOME PER SHARE ............................. $ 0.62 $ 0.72
========= =========
WEIGHTED AVERAGE NUMBER OF COMMON AND
COMMON EQUIVALENT SHARES ...................... 14,240 14,216
========= =========
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
2
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WOLVERINE TUBE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands,except share data)
<TABLE>
<CAPTION>
ASSETS
MARCH 29, DECEMBER 31,
1997 1996
----------- ------------
CURRENT ASSETS: (UNAUDITED) (NOTE)
<S> <C> <C>
CASH AND EQUIVALENTS ..................................................... $ 2,578 $ 2,967
ACCOUNTS RECEIVABLE, NET ................................................. 93,733 79,128
INVENTORIES .............................................................. 76,862 73,525
PREPAID EXPENSES AND OTHER ............................................... 705 205
--------- ---------
TOTAL CURRENT ASSETS ................................................ 173,878 155,825
PROPERTY, PLANT AND EQUIPMENT, NET ......................................... 151,018 150,221
DEFERRED CHARGES AND INTANGIBLE ASSETS, NET ................................ 86,702 84,946
PREPAID PENSIONS ........................................................... 5,872 6,028
--------- ---------
TOTAL ASSETS ........................................................ $ 417,470 $ 397,020
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
ACCOUNTS PAYABLE ......................................................... $ 31,831 $ 27,318
ACCRUED LIABILITIES ...................................................... 10,851 11,231
DEFERRED INCOME TAXES .................................................... 4,581 4,613
REVOLVING CREDIT FACILITY ................................................ 8,295 --
--------- ---------
TOTAL CURRENT LIABILITIES ........................................... 55,558 43,162
DEFERRED INCOME TAXES ...................................................... 25,857 25,857
LONG-TERM DEBT ............................................................. 100,465 100,473
POSTRETIREMENT BENEFIT OBLIGATIONS ......................................... 12,478 12,505
ACCRUED ENVIRONMENTAL REMEDIATION .......................................... 3,435 3,732
--------- ---------
TOTAL LIABILITIES ................................................... 197,793 185,729
MINORITY INTEREST .......................................................... 69 69
REDEEMABLE CUMULATIVE PREFERRED STOCK, PAR VALUE $1 PER SHARE;
20,000 SHARES ISSUED AND OUTSTANDING AT MARCH 29, 1997 AND
DECEMBER 31, 1996 ........................................................ 2,000 2,000
STOCKHOLDERS' EQUITY:
CUMULATIVE PREFERRED STOCK, PAR VALUE $1 PER SHARE;
500,000 SHARES AUTHORIZED ............................................... -- --
COMMON STOCK, PAR VALUE $.01 PER SHARE; 20,000,000 SHARES
AUTHORIZED, 13,983,127 AND 13,980,517 SHARES ISSUED AND OUTSTANDING AT
MARCH 29, 1997 AND DECEMBER 31, 1996, RESPECTIVELY ...................... 140 140
ADDITIONAL PAID-IN CAPITAL ............................................... 98,870 98,870
RETAINED EARNINGS ........................................................ 126,282 117,515
ACCUMULATED CURRENCY TRANSLATION ADJUSTMENT .............................. (7,684) (7,303)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY .......................................... 217,608 209,222
--------- ---------
TOTAL LIABILITIES, REDEEMABLE CUMULATIVE PREFERRED STOCK
AND STOCKHOLDERS' EQUITY ........................................... $ 417,470 $ 397,020
========= =========
</TABLE>
Note: The Balance Sheet at December 31, 1996 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See notes to condensed consolidated financial statements.
3
<PAGE> 5
WOLVERINE TUBE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)
<TABLE>
<CAPTION>
THREE-MONTH PERIOD ENDED:
-------------------------
MARCH 29, MARCH 30,
1997 1996
----------- -----------
<S> <C> <C>
OPERATING ACTIVITIES
- --------------------
NET INCOME ...................................................... $ 8,837 $ 10,263
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
PROVIDED (USED) BY OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION ................................ 4,448 4,131
DEFERRED INCOME TAXES ........................................ -- 2,136
CHANGES IN OPERATING ASSETS AND LIABILITIES:
ACCOUNTS RECEIVABLE ......................................... (14,622) (12,284)
INVENTORIES ................................................. (3,436) (5,006)
PREPAID EXPENSES AND OTHER .................................. (510) (2,115)
ACCOUNTS PAYABLE ............................................ 4,666 8,766
ACCRUED LIABILITIES INCLUDING PENSION, POSTRETIREMENT BENEFIT
AND ENVIRONMENTAL .......................................... (574) (368)
-------- --------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES ................ (1,191) 5,523
INVESTING ACTIVITIES
- --------------------
ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT ...................... (7,239) (663)
-------- --------
NET CASH USED BY INVESTING ACTIVITIES ........................... (7,239) (663)
FINANCING ACTIVITIES
- --------------------
BORROWINGS UNDER REVOLVING CREDIT FACILITY, NET ................. 8,295 --
ISSUANCE OF COMMON STOCK ........................................ -- 28
PRINCIPAL PAYMENTS ON LONG-TERM DEBT AND
CAPITALIZED LEASE OBLIGATIONS ................................. (152) (152)
DIVIDENDS PAID .................................................. (70) (70)
-------- --------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES ................ 8,073 (194)
EFFECT OF EXCHANGE RATE ON CASH AND EQUIVALENTS ................. (32) (6)
-------- --------
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS ................. (389) 4,660
CASH AND EQUIVALENTS BEGINNING OF PERIOD ........................ 2,967 5,494
-------- --------
CASH AND EQUIVALENTS END OF PERIOD .............................. $ 2,578 $ 10,154
======== ========
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
4
<PAGE> 6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 29, 1997
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiaries after
elimination of significant intercompany accounts and transactions. The
accompanying condensed financial statements have been prepared in accordance
with instructions to Form 10-Q and do not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements. The accompanying condensed financial statements (and all
information in this report) have not been examined by independent auditors; but,
in the opinion of management all adjustments, which consist of normal recurring
accruals necessary for a fair presentation of the results for the periods, have
been made. The results of operations for the three-month period ended March 29,
1997 are not necessarily indicative of the results of operations that may be
expected for the year ending December 31, 1997. For further information, refer
to the consolidated financial statements and footnotes included in the Company's
annual report on Form 10-K for the year ended December 31, 1996.
The Company uses its internal operational reporting cycle for quarterly
financial reporting.
NOTE 2 - CONTINGENCIES
The Company is subject to extensive U.S. and Canadian federal, state,
provincial and local environmental laws and regulations. These laws, which are
constantly changing, regulate the discharge of materials into the environment.
The Company has received various communications from regulatory
authorities concerning certain environmental matters and has currently been
named as a potentially responsible party ("PRP") at various waste disposal
sites. The Company believes that its potential liability with respect to these
waste disposal sites is not material.
The Company has accrued environmental remediation costs of $3,435,000
at March 29, 1997 consisting primarily of $132,000 for estimated remediation
costs for the London and Fergus facilities, $1,935,000 for the Decatur facility,
$626,000 for the Greenville facility, and an aggregate of $742,000 for the
Ardmore facility and the Shawnee facility (with respect to the Double Eagle
Refinery site). Based on information currently available, the Company believes
that the costs of these matters are not reasonably likely to have a material
adverse effect on the Company's consolidated financial condition, results of
operations or liquidity.
5
<PAGE> 7
NOTE 3 - INVENTORIES
<TABLE>
<CAPTION>
Inventories are as follows: March 29, December 31,
1997 1996
- -----------------------------------------------------------------------------
(In thousands)
<S> <C> <C>
Finished Products $17,664 $13,626
Work-in-process 28,970 26,646
Raw materials and supplies 30,228 33,253
- -----------------------------------------------------------------------------
$76,862 $73,525
=============================================================================
</TABLE>
NOTE 4 - INTEREST EXPENSE, NET
Interest expense is net of interest income and capitalized interest of
$94,000 and $29,000, respectively, for the three-month period ended March 29,
1997 and $241,000 and $19,000, respectively, for the three-month period ended
March 30, 1996.
NOTE 5 - SUBSEQUENT EVENTS
Subsequent to March 29, 1997, the company completed a $200 million
refinancing, which consisted of entering into a new five year $200 million
unsecured credit agreement (the "New Credit Agreement") to replace the Company's
existing credit facility, as well as a tender offer for the $99 million in
outstanding principal amount of the Notes. The New Credit Agreement (i) provides
for an aggregate available revolving credit facility of $200 million, including
a $20 million sublimit available to Wolverine Tube (Canada) Inc., (ii) matures
in full in April 2002, and (iii) provides for an interest rate, at the Company's
election, at a floating base rate that is either (a) the higher of the federal
funds effective rate plus .50% or the prime rate or (b) LIBOR plus a specified
margin of .25% to .875%. Upon the consummation of the refinancing, on April 30,
1997, the Company borrowed approximately $107 million under the New Credit
Agreement, substantially all of which was used to finance the purchase of the
$98.225 million in Notes that were tendered in the tender offer and related
refinancing expenses. Following the refinancing, the Company currently has
approximately $93 million in additional borrowing availability under the New
Credit Agreement, and an aggregate of $775,000 in aggregate principal amount of
the Notes remain outstanding.
The Company adopted the 1997 Voluntary Early Retirement Program (the
"Plan"). The purpose of the Plan is to reward certain eligible employees who
elect on a voluntary basis to take early retirement from the Company between
March 26, 1997 and May 12, 1997. After the execution of a binding Voluntary
Early Retirement Agreement and General Release by an eligible employee, the
Company will pay each such employee an early retirement payment and provide
certain other considerations. The payment shall be an amount equal to four weeks
base pay plus one additional week's pay for each year of service, up to a
maximum of twenty-six weeks' total, less applicable taxes and withholdings
required by law. Since the Company is in the Pre-Recognition Period of this
Plan, (the Company has not finalized these actions to the extent necessary to
warrant recognition), the amounts and significant components of the
restructuring charge resulting from the implementation of the Plan have not been
fully determined.
6
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Three-Month Period Ended March 29, 1997 Compared to
Three-Month Period Ended March 30, 1996
For the three months ended March 29, 1997, consolidated net sales were
$173.6 million compared with $179.4 million in the three-month period ended
March 30, 1996. The decreased sales for the three-month period this year versus
last year were attributable to decreased shipments, a change in the mix of
products shipped and a decrease in copper prices. The average Comex price of
copper was $1.11 per pound in the most recent three-month period compared with
$1.18 per pound in the same period last year. The primary impact to Wolverine of
lower copper prices is lower sales and costs of goods sold. The Company uses
various strategies to minimize the effect of fluctuations in copper prices on
the Company's earnings.
Total pounds shipped for the three-month period of 1997 were 84.8
million pounds as compared to 84.9 million pounds a year ago. Shipments of
commercial tube decreased 5% in the first quarter primarily as a result of
decreased shipments of industrial tube used in residential air conditioning as
residential air conditioning manufacturing generally did not reach their
expected production levels, as well as, decreased technical tube shipments as
the manufacturers of large commercial air conditioners reduced their production
from previous year levels. The decline in shipments was offset somewhat by
increased shipments of fabricated products as a result of favorable market
conditions in the consumer appliance industry and the acquisition of Tube
Forming, Inc. in September 1996. Shipments of the Company's wholesale products
increased 27% primarily as a result of the Company increasing its offering of
these products in the United States. Shipments of rod, bar and strip products
decreased 10% primarily due to decreased sales of strip products.
Consolidated gross profit decreased to $21.6 million in the three-month
period of 1997 compared to $23.4 million in the three-month period of 1996. The
decrease in gross profit is primarily the result of decreased shipments of
commercial products, which generally are the Company's highest margin products.
Consolidated selling, general and administrative expenses for the
three-month period of 1997 were $5.4 million compared to $5.1 million for the
three-month period in 1996. This increase was primarily the result of increased
professional fees and general management salaries, with the addition of several
managers in 1997.
Consolidated net interest expenses for the first three-month period in
1997 increased minimally to $2.4 million from $2.3 million for the comparable
three-month period in 1996. This increase is primarily due to reduced interest
income from investments as the Company used its cash in the acquisition of Tube
Forming, Inc.
7
<PAGE> 9
During the first quarter of 1997, the Company reached a favorable
settlement with the Internal Revenue Service regarding audits of prior year tax
returns, which resulted in a reduction in the effective tax rate for the
three-month period ended March 29, 1997 to 34.6% as compared to 35.5% for the
three-month period ended March 30, 1996.
Consolidated net income for the first quarter of 1997 was $8.8 million,
or $0.62 per share, compared to $10.3 million, or $0.72 per share in the first
quarter of 1996.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided or used by operating activities totaled a $1.2
million use of cash in the first quarter of 1997 compared to $5.5 million of
cash generated in the first quarter of 1996. The change was primarily due to the
decrease in net income and deferred taxes in the first quarter of 1997 compared
to the first quarter of 1996. The $14.6 million increase in net accounts
receivable from December 31, 1996 is primarily due to increases in COMEX copper
prices over the prevailing prices at year end 1996.
At March 29, 1997, the Company had $8.3 million in outstanding
borrowing under its unsecured credit agreement, and an aggregate of $99 million
in outstanding principal amount of its 10 1/8% Senior Subordinated Notes due
2002 (the "Notes").
Subsequent to March 29,1997, the Company completed a $200 million
refinancing, which consisted of entering into a new five-year $200 million
unsecured credit agreement (the "New Credit Agreement") to replace the company's
existing credit facility, as well as a tender offer for the $99 million in
outstanding principal amount of the Notes. The New Credit Agreement (i) provides
for an aggregate available revolving credit facility of $200 million, including
a $20 million sublimit facility available to Wolverine Tube (Canada) Inc., (ii)
matures in full in April 2002, and (iii) provides for an interest rate, at the
Company's selection, at a floating base rate that is either (a) the higher of
the federal funds effective rate plus .50% or the prime rate or (b) LIBOR plus a
specified margin of .25% to .875%. Upon the consummation of the refinancing, on
April 30, 1997, the Company borrowed approximately $107 million under the New
Credit Agreement, substantially all of which was used to refinance the purchase
of the $98.225 million in Notes that were tendered in the tender offer and
related refinancing expenses. Following the refinancing, the Company currently
has approximately $93 million in additional borrowing availability under the New
Credit Agreement, and an aggregate of $775,000 in aggregate principal amount of
the Notes remain outstanding.
Capital expenditures were $7.2 million for the first three-months of
1997 and $0.7 million for the first three-months of 1996. The Company currently
expects to spend approximately $20 million in 1997 under its existing capital
program. The Company believes that it will be able to satisfy its existing
working capital needs, interest obligations and capital expenditure requirements
with cash flow from operations and funds available from the credit agreement.
8
<PAGE> 10
The Company has adopted the 1997 Voluntary Early Retirement Program
(the "Plan"). The purpose of this Plan is to reward certain eligible employees
who elect on a voluntary basis to take early retirement from the Company between
March 26, 1997 and May 12, 1997. After the execution of a binding Voluntary
Early Retirement Agreement and General Release by an eligible employee, the
Company will pay each such employee an early retirement payment and provide
certain other considerations. The payment shall be an amount equal to four
week's base pay plus one additional week's pay for each year of service, up to a
maximum of twenty-six weeks' total, less applicable taxes and withholdings
required by law. Since the Company is in the Pre-Recognition Period of this Plan
(the Company has not finalized these actions to the extent necessary to warrant
recognition), the amounts and significant components of the restructuring charge
resulting from the implementation of the Plan have not been fully determined.
ENVIRONMENTAL
The Company's facilities and operations are subject to extensive
environmental laws and regulations. During the three-month period ended March
29, 1997, the Company spent approximately $0.3 million on environmental matters
which include remediation costs, monitoring costs and legal and other costs. The
Company has a reserve of $3.4 million for environmental remediation costs which
is reflected in the Company's Condensed Consolidated Balance Sheet. The Company
has approved $3.0 million for capital expenditures relating to environmental
matters during 1997, of which $0.8 has been spent through March 29,1997. Based
upon information currently available, the Company believes that the costs of the
environmental matters described below are not reasonably likely to have a
material adverse effect on the Company's consolidated financial condition,
results of operations or liquidity.
Oklahoma City, Oklahoma
The Company is one of a number of Potentially Responsible Parties
(PRP's) named by the Environmental Protection Agency (EPA) with respect to the
soil and groundwater contamination at the Double Eagle Refinery Superfund site
in Oklahoma City, Oklahoma. The costs associated with the cleanup of this site
will be entirely borne by the PRP group (the "Group"), as the site owner has
filed for bankruptcy protection. In March 1993, twenty-three PRP's named with
respect to the soil contamination of the site, including the Company, submitted
a settlement offer to the EPA. Settlement negotiations between the Group and the
EPA are continuing, but currently contemplate a settlement and consent order
among the PRP's, the EPA and the State of Oklahoma, which would provide for each
PRP's liability to be limited to a pro rata share of an aggregate amount based
upon the EPA's worst-case cost scenario to remediate the site. Under the current
proposal, the Company's settlement amount is estimated to be between $355,000
and $410,000.
9
<PAGE> 11
Decatur, Alabama
The Company is subject to an order under Section 3008(h) of the
Resource Conservation and Recovery Act (RCRA) to perform a facilities
investigation of its site in Decatur, Alabama, including a portion of the site
where wastes were buried (the "Burial Site"). Should the EPA decide to order
remediation, the remaining monitoring, legal and other costs are estimated to be
$1.9 million. Under an agreement between the Company and an affiliate of the
Henley Group, Inc. (collectively, "Henley"), the prior owner of the property,
Henley took control of investigation and any required cleanup of the Burial
Site. In February 1997, the Company exercised its option to release Henley from
liability for further remediation, monitoring and related costs with respect to
the Burial Site in exchange for a $750,000 settlement payment, all pursuant to
the terms of the existing agreements with Henley. Henley has filed a declaratory
judgment against the Company, claiming they have fulfilled their obligation
under the terms of the existing agreement and no such payment is required. The
Company has filed a countersuit against Henley for payment under terms of the
existing agreement.
New Westminster, British Columbia
In February 1988, the Company purchased substantially all of the assets
of Noranda Metal Industries Limited ("NMI" and, collectively with its parent,
Noranda, Inc., "Noranda"), which included property located in Montreal, Quebec
(the "Montreal Property"), Fergus, Ontario (the "Fergus Property"), and a
leasehold interest in property located on Annacis Island in Delta, British
Columbia (the "New Westminster Property," and collectively with the Montreal
Property and the Fergus Property, the "Properties"). In 1993, the Company
commissioned a series of environmental assessments of the properties, which
resulted in the finding of PCB's above permissible limits at the New Westminster
property and in an adjacent tidal flat of the Fraser River. Additional findings
include traces of PCB's within the Montreal Property, as well as the presence of
heavy metal and other contaminants at the New Westminster Property and the
Montreal Property.
The Company discontinued operations at the New Westminster facility in
April 1991, and the facility was sold in November 1995 to Juker Holdings Ltd.
("Juker"). Terms of the sales agreement provide that Juker assume responsibility
for the remediation of the New Westminster and neighboring properties (excluding
the Fraser River) and indemnify Wolverine from any liability with respect to the
remediation of the Property.
The Company currently has no obligation to remediate the soil
contamination at its Montreal property under existing current Quebec statutes.
The traces of PCB's within the Montreal Property have been remediated. The
Company has instituted a program to prevent further contamination and is
monitoring the existing contamination. The Company intends to continue to
operate the Montreal Property and does not currently plan to remediate the heavy
metal contamination; thus, no estimate has been made of the costs to remove the
heavy metal from the soil and no amount has been accrued in the accompanying
condensed consolidated financial statements.
10
<PAGE> 12
On October 13, 1993, the Company filed a Statement of Claim against
Noranda and other parties, contending that Noranda is liable for substantially
all of the cleanup costs at New Westminster and Montreal under the environmental
indemnity contained in the purchase agreement and that Noranda materially
breached the agreement by failing, among other things, to provide full and
complete disclosure of the condition of the facilities. The Statement of Claim
seeks certain declaratory judgments, specific performance of the agreement, and
general specific prospective damages of up to $25,000,000 (Canadian). In March
1997, the Company and Noranda reached an oral agreement to settle the Statement
of Claim. The proposed settlement provides that Noranda will reimburse the
Company for a portion of the costs incurred in the remediation study and other
related costs associated with the New Westminster. In addition, the oral
agreement contemplates that Noranda and the Company would enter into a cost
sharing arrangement with respect to future remediation costs at the Montreal
Property, up to a maximum amount of $9.9 million. Pursuant to the proposed
arrangement, which would expire in September 2002, Noranda would be responsible
for a maximum of $6 million and the Company would be responsible for a maximum
of $3.9 million of such costs. Any remediation costs in excess of $9.9 million
would be the sole responsibility of the Company. While the Company anticipates
entering into a definitive agreement with Noranda as summarized above, there can
be no assurance that such an agreement will be entered into or that, if an
agreement is reached, the terms thereof will be as orally agreed upon.
The Ministry of Environment, Lands and Parks of the Province of British
Columbia (the "B.C. Ministry") has issued a Pollution Abatement Order to the
Company and NMI regarding the New Westminster facility and a tidal flat in the
Fraser River immediately adjacent to an outfall from this property's drainage
system. The order requires the Company and NMI to prevent discharge of
contaminants from the property, to undertake further investigation of this site
and to prepare a remediation plan and implementation schedule for cleanup of the
contaminated area, including the Fraser River. Pursuant to the sale agreement
with Juker, Juker assumes responsibility for the remediation of the New
Westminster property, other than with respect to the Fraser River. The Company
has been informed that Juker has completed the remediation of the New
Westminster property, and that NMI has completed the remediation of the Fraser
river and associated uplands, all as outlined in the implementation plan that
was approved by the B.C. Ministry. The Company does not anticipate that it will
have any further liability under the Pollution Abatement Order.
Ardmore, Tennessee
On December 28, 1995, the Company entered into a Consent Order and
Agreement with the Tennessee Division of Superfund (the "Tennessee Division"),
relating to the Ardmore facility, under which the Company agreed to conduct a
preliminary investigation regarding whether volatile organics detected in and
near the municipal drinking water supply are related to the Ardmore facility
and, if necessary, to undertake any appropriate response. That investigation has
disclosed contamination, including elevated concentrations of certain volatile
and organic compounds, in soils of certain areas of the Ardmore facility and
also has disclosed elevated levels of certain volatile organic compounds in the
shallow residuum groundwater zone at the Ardmore facility. Under the terms of
the Consent Order and Agreement, the Company submitted
11
<PAGE> 13
a Remediation Investigation and Feasibility Study ("RI/FS") work plan, which was
accepted by the Tennessee Division, and the Company has initiated the RI/FS.
Based on the available information, and recognizing that the nature and scope of
remediation will be affected by the results of the RI/FS, the Company
preliminary estimates a range of between $820,000 and $1,384,000 to complete the
investigation and remediation of this site, of which approximately $433,255 has
been spent.
A recent report of a 1995 EPA site inspection of the Ardmore facility
recommended further action for the site. The Company believes, however, that
because the Tennessee Division is actively supervising an ongoing investigation
of the Ardmore facility, it is unlikely that EPA will intervene and take
additional action. If the EPA should intervene, however, the Company could incur
additional costs for any further investigation or remedial action required.
Greenville, Mississippi
Following the Company's acquisition of its Greenville, Mississippi
facility, (the "Greenville facility"), a preliminary investigation disclosed
volatile organic contaminants in soil and groundwater at the site. Based on
further investigation, it appears that the contamination has not spread off
site. The Company entered into a Consent Order with the Mississippi Department
of Environmental Quality ("MDEQ") for a pilot study program which will help
determine the effectiveness of certain technology tentatively identified for
remediation and which will also help define the scope of remediation for the
site. This pilot study program is expected to continue through June 1, 1997,
although the Company expects to enter into a final Consent Order with MDEQ soon
thereafter. While the Company's consultants and the MDEQ have not finalized the
remediation plan, the remaining total investigative and remedial costs could
total $1,251,000, depending upon the remediation plan ultimately adopted.
Applicable costs of testing and remediation required at the Greenville facility
are being shared with the former owners of the facility on a dollar for dollar
basis, not to exceed $750,000, pursuant to the terms of an Escrow Agreement
established at the time the facility was acquired. Any remediation costs in
excess of the shared amount would be the sole responsibility of Wolverine.
Other
The Company has been identified by the EPA as one of a number of
(PRP's") at Superfund sites in Athens, Alabama and in Criner, Oklahoma. The
Company believes that its potential liability with respect to these Superfund
sites is not material. However, there can be no assurance that the Company will
not be named a PRP at additional Superfund sites in the future or that the costs
associated with those sites would not be substantial.
The Company believes that it faces no significant liability for the
Athens, Alabama site because it has removed all of the material that it
contributed to the site. The Company believes that it faces no significant
liability for the Criner, Oklahoma site because Henley, the prior owner of the
site, has retained liability for all cleanup costs resulting from past disposal
of used oil at the Criner, Oklahoma site pursuant to an indemnification
agreement between the Company and
12
<PAGE> 14
Henley. Henley, which is not affiliated with the Company, has discharged these
obligations to date.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings per Share, which is required to be adopted on
December 31, 1997. At that time, the Company will be required to change the
method currently used to compute earnings per share and to restate earnings per
share for all prior periods. Under the new requirements for calculating primary
earnings per share, the dilutive effect of stock options will be excluded. The
impact is expected to result in an increase in primary earnings per share for
the three-month periods ended March 29, 1997 and March 30, 1996 of $.01 and $.03
per share, respectively.
13
<PAGE> 15
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There were no material legal proceeding developments during the
three-month period ended March 29, 1997.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.1 Agreement and General Release, dated April 1, 1997,
between the Company and Thomas B. Roller
10.2 Supplemental Indenture, dated as of April 25, 1997,
between the Company and Mellon Bank, F.S.B.
10.3 Credit Agreement, dated as of April 30, 1997, among
the Company, the lenders, named therein, Credit
Suisse First Boston, as Administrative Agent, and
Mellon Bank, N.A., as Documentary Agent
11 Computation of Earnings per Share
27 Financial Data Schedule (for SEC use only)
(b) Reports
On March 28, 1997, the Company filed a Form 8-K which
contained a press release that the Company issued on March 17,
1997 announcing that the net income for the quarter ending
March 29, 1997 was expected to be approximately 15% below net
income for the first quarter of 1996.
14
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
Wolverine Tube, Inc.
--------------------
(registrant)
Dated: May 12, 1997 By: /s/ James E. Deason
-----------------------------------------
James E. Deason
Executive Vice President
Chief Financial Officer
<PAGE> 1
Exhibit 10.1
AGREEMENT AND GENERAL RELEASE
THIS AGREEMENT AND GENERAL RELEASE ("Agreement") is made and entered into
by and between Thomas B. Roller ("Roller") and Wolverine Tube, Inc., its
directors, officers, employees and agents ("Wolverine").
WITNESSETH:
WHEREAS, Roller agrees that he has voluntarily resigned all of his
positions with Wolverine on March 31, 1997; and
WHEREAS, Roller and Wolverine desire to settle fully and finally all
differences between them, including, but in no way limited to, any differences
that might arise out of Roller's employment with Wolverine, and his resignation
thereof;
NOW, THEREFORE, in consideration of the premises and mutual promises
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Roller and Wolverine agree as
follows:
1. Benefits. On or after the Effective Date (as defined in paragraph 15 hereof)
of this Agreement, Wolverine shall provide Roller with the following benefits:
a. Roller shall be paid, as and when they become due, all of Roller's
retirement benefits, if any, which were vested as to Roller as of March 31, 1997
in accordance with the terms of the underlying plan(s);
b. Roller shall be paid on or before April 30, 1997 all accrued and
earned vacation pay to which Roller is entitled, equal to three (3) weeks of
Roller's current base salary;
c. Roller shall be paid an amount equal to his current base salary
through September 30, 1998 as a series of payments in accordance with the
Company's normal payroll procedures, which the parties acknowledge is a total of
$675,000;
d. The Company shall reimburse Roller for any costs incurred by Roller in
electing continuation coverage, pursuant to the provisions of the Consolidated
Omnibus Budget Reconciliation Act of 1985, 29 U.S.C. ss.ss. 1161-1169, under
only the Company's medical plan, and maintaining life insurance coverage
comparable to that maintained for him by the Company for the period from the
Effective Date until the earlier to occur of:
(X) the date which is eighteen (18) months after the Effective
Date, or
<PAGE> 2
(Y) the date on which Roller is covered under the medical plan of
another employer;
e. Upon the presentation of appropriate invoices, the Company shall pay
up to $60,000 for executive outplacement services to be provided by a firm
selected by Roller;
f. On or before April 30, 1997, the Company shall further provide Roller
with a lump sum of $10,000, less appropriate withholdings; and
g. Promptly after the Effective Date, Wolverine, through one of its
outside directors, shall provide Roller with a statement relating to his
separation from Wolverine in the form attached hereto as Exhibit A.
These payments shall be in lieu of and discharge any obligations of Wolverine to
Roller for any rights or claims of any type, including, but not limited to, any
and all rights that Roller may have under his Severance Agreement dated
September 19, 1996 (the "Severance Agreement"), the Wolverine Tube, Inc.
Long-Term Incentive Plan, or arising out of any other plan, agreement, offer
letter, or contract of any type, any and all rights that Roller may have under
the Stock Option Plan or other rights to acquire stock of Wolverine, lost
compensation, lost wages, lost benefits, pain and suffering, or any other
expectation of remuneration or benefit on the part of Roller. Other than the
obligations specifically set forth in this paragraph 1 and other than Roller's
rights, if any, to indemnification under the Articles of Incorporation and
By-laws of Wolverine relating to his conduct as a director and/or officer of
Wolverine, Wolverine shall have no other financial obligations to Roller under
this Agreement. Roller understands and agrees that the payments and benefits
described herein are greater than those to which Roller is otherwise entitled
under applicable agreements, policies and procedures.
2. Non-Admission of Liability. This Agreement shall not in any way be construed
as an admission by Wolverine that it has acted wrongfully with respect to Roller
or any other person, or that Roller has any rights whatsoever against Wolverine,
and Wolverine specifically disclaims any liability to or wrongful acts against
Roller or any other person, on the part of itself, its employees, or its agents.
3. Resignation of Employment; No Reemployment. Roller and Wolverine agree that
active employment with Wolverine has terminated by Roller's voluntary
resignation as an employee, officer and director of Wolverine and in all other
capacities relating to Wolverine, which was effective March 31, 1997. Roller and
Wolverine further agree that he will not be reemployed by Wolverine, and that he
will not apply for or otherwise seek employment with Wolverine at any time. A
breach of this paragraph by Roller will constitute a basis for refusal to employ
Roller or to terminate him if already employed, and he shall have
2
<PAGE> 3
no cause of action against Wolverine for such refusal or termination.
4. Non-Disparagement. Roller agrees that he will not act in any manner that
might damage the business or reputation of Wolverine and/or any of its related
companies, successors, assigns, officers, or directors. Roller further agrees
that he will not counsel or assist any attorneys or their clients in the
presentation or prosecution of any disputes, differences, grievances, claims,
charges, or complaints against Wolverine and/or any officer, director, employee,
agent, representative, shareholder, or attorney of Wolverine, unless under a
subpoena or other court order to do so. The parties acknowledge that Wolverine
issued a press release on March 31, 1997, regarding Roller's departure. Unless
deemed advisable under applicable securities laws, Wolverine will issue no other
press releases regarding Roller's tenure with Wolverine and his departure from
Wolverine and the circumstances related thereto. Further, Wolverine and its
officers, directors and agents will refrain from making any statements or
comments, written or oral, which might damage the reputation of Roller. In
response to inquiries relating to Roller, Wolverine and its officers, directors
and agents will either (i) issue favorable statements concerning Roller, (ii)
limit their remarks to the statements contained in the March 31 press release
and Exhibit A, or (iii) reference that the relationship was "not a good fit" or
words to that effect.
5. Future Cooperation. With the exception of litigation wherein Roller is an
individually-named and properly served defendant and wishes to take such actions
as he deems appropriate to defend himself, Roller agrees that he will, upon
request by and at the expense of Wolverine, assist and cooperate with Wolverine
in any lawsuits, disputes, differences, grievances, claims, charges, or
complaints brought or threatened by any party against Wolverine or brought by
Wolverine against any party; provided, however, that Roller will be compensated
for his time at the rate of $130 per hour and such cooperation will be provided
in such a way as to not unreasonably interfere with any duties of Roller as to
subsequently obtained employment.
6. Cessation of Authority; Resignation from Board(s). Roller understands and
agrees that effective March 31, 1997, he was and is no longer authorized to
incur any expenses, obligations, or liabilities on behalf of Wolverine. Roller
further agrees that effective March 31, 1997 he has resigned any and all
Directorship(s) and/or other positions of Wolverine or any Wolverine subsidiary
or affiliate.
7. Return of Company Materials and Property. Roller understands and agrees that
he will immediately turn over to Wolverine all files, memoranda, records, credit
cards, and other documents, physical or personal property that Roller received
from Wolverine and that are the property of Wolverine.
3
<PAGE> 4
8. Non-Disclosure and Trade Secrets. Roller understands and agrees that in the
course of employment with Wolverine, he has acquired confidential and
proprietary information and trade secrets concerning Wolverine's operations, its
future plans for sales and expansion, its methods of doing business, its
financial situation, which information Roller understands and agrees would be
extremely damaging to Wolverine if disclosed to a competitor or made available
to any other person or corporation. Roller understands and agrees that such
information has been divulged to Roller in confidence and Roller understands and
agrees that he will keep such information secret and confidential. Roller
further agrees that he will not solicit or participate in or assist in any way
in the solicitation of any other employees of Wolverine or of any of its
affiliated companies. In view of the nature of Roller's employment and the
information and trade secrets which Roller has received during the course of his
employment, Roller likewise agrees that Wolverine would be irreparably harmed by
any violation, or threatened violation, of this Agreement and that, therefore,
Wolverine shall be entitled to an injunction prohibiting Roller from any
violation or threatened violation of this Agreement. The undertakings set forth
in this paragraph shall survive the termination of other arrangements contained
in this Agreement. In addition, Roller shall remain bound by those duties and
obligations set forth in paragraph 2, Secrecy, in the Severance Agreement.
9. Complete Release. As a material inducement to Wolverine to enter into this
Agreement and subject to Wolverine's performance of its obligations described in
paragraph 1 hereof, Roller hereby irrevocably and unconditionally releases,
acquits, and forever discharges Wolverine and each of Wolverine's owners,
predecessors, successors, assigns, agents, directors, officers, employees,
representatives, attorneys, and all persons acting by, through, under or in
concert with any of them (collectively "Releasees"), or any of them, from any
and all charges, complaints, claims, promises, and agreements, damages,
(including attorneys' fees and costs actually incurred) of any nature
whatsoever, known or unknown, suspected or unsuspected, including, but not
limited to, rights arising out of alleged violations of any contracts, express
or implied, including, but not limited to, the Severance Agreement, any covenant
of good faith and fair dealing, express or implied, or any tort, including, but
not limited to, fraudulent inducement, promissory estoppel, or detrimental
reliance, or any legal restrictions on Wolverine's right to terminate employees,
or any federal, state or other governmental statute, regulation, or ordinance
("Claim" or "Claims"), which Roller now has, owns or holds, or claims to have,
own or hold, or which Roller at any time heretofore had, owned or held, or
claimed to have, own or hold, or which Roller at any time hereinafter may have,
own or hold, or claim to have, own or hold against each or any of the Releasees.
Likewise, as a material inducement for Roller to execute this Agreement,
Wolverine hereby irrevocably and unconditionally releases, acquits and forever
discharges Roller from any and all
4
<PAGE> 5
claims, demands and causes of action of whatever nature which Wolverine now has,
may have or claims to have arising from Roller's employment by Wolverine.
10. No Claims. Roller represents that he has not filed any complaints, charges,
or lawsuits against Wolverine or any of its employees with any governmental
agency or any court, and that he will not do so at any time hereafter, or that
any such complaints, charges, or lawsuits filed prior to execution of this
Agreement will be withdrawn by Roller immediately after this Agreement becomes
effective; provided, however, this shall not limit either party hereto from
filing a lawsuit for the sole purpose of enforcing its rights under this
Agreement.
11. Confidentiality. Roller represents and agrees that he will keep the terms,
amount, and fact of this Agreement completely confidential, and that he will not
hereafter disclose any information concerning this Agreement to anyone other
than Roller's immediate family and professional representatives who will be
informed of and bound by this confidentiality clause; provided, however, that
Roller shall be free to disclose to others any information relating to the
terms, amount and fact of this Agreement to the extent that Wolverine discloses
any such information to the public, including, without limitation, any
information disclosed in securities filings.
12. Consultation with Counsel. Roller represents and agrees that he fully
understands his right to discuss all aspects of this Agreement with his private
attorney, that Roller has availed himself of this right, that Roller has
carefully read and fully understands all of the provisions of this Agreement,
and that Roller is voluntarily entering into this Agreement.
13. Knowing and Voluntary Waiver. For the purpose of implementing a full and
complete release and discharge of both parties, each party expressly
acknowledges that this Agreement is intended to include in its effect, without
limitation, all Claims which a party does not know or suspect to exist in his or
its favor at the time of execution hereof, and that this Agreement contemplates
the extinguishment of any such Claim or Claims. Roller further expressly
acknowledges he is freely and voluntarily executing this Agreement, and that he
has had sufficient and reasonable time to consider this Agreement and its terms
before executing it.
14. No Representations. Roller represents and acknowledges that in executing
this Agreement Roller does not rely and has not relied upon any representation
or statement not set forth herein made by any of the Releasees or by any of the
Releasees' agents, representatives, or attorneys with regard to the subject
matter, basis, or effect of this Agreement or otherwise.
15. Effective Date. This Agreement shall become effective and fully binding upon
execution by Roller ("Effective Date"),
5
<PAGE> 6
provided that Wolverine executes this Agreement immediately thereafter.
16. Sole and Entire Agreement. The Agreement sets forth the entire agreement
between the parties hereto, and fully supersedes any and all prior agreements or
understandings between the parties hereto pertaining to the subject matter
hereof.
17. Severability. The provisions of this Agreement are severable, and if any
part of it is found to be unenforceable, the other paragraphs shall remain fully
valid and enforceable. This Agreement shall survive the termination of any
arrangements contained herein.
18. Attorneys' Fees. In the event either party finds it necessary to institute
litigation to enforce the terms of this Agreement, the prevailing party in such
litigation shall be entitled to recover its reasonable attorneys' fees, costs
and expenses in connection with such litigation.
PLEASE READ AND CONSIDER THIS AGREEMENT CAREFULLY BEFORE EXECUTING. THIS
SETTLEMENT AGREEMENT AND GENERAL RELEASE INCLUDES A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS.
Executed at Carmel, Indiana, this 1st day of April, 1997.
/s/ Thomas B. Roller
--------------------------
Thomas B. Roller
Executed at Huntsville, Alabama, this 1st day of April, 1997.
By: /s/ John M. Quarles
--------------------------
for Wolverine Tube, Inc.
6
<PAGE> 1
Exhibit 10.2
SECOND SUPPLEMENTAL INDENTURE
THIS SECOND SUPPLEMENTAL INDENTURE (the "SUPPLEMENTAL INDENTURE") is made
as of the 25th day of April, 1997, between WOLVERINE TUBE, INC., a corporation
duly organized and existing under the laws of the State of Delaware (the
"COMPANY"), and MELLON BANK, F.S.B., a federal savings bank, as Trustee (the
"TRUSTEE").
RECITALS
WHEREAS, Wolverine Tube, Inc. an Alabama corporation ("WTI-AL") and
Society National Bank ("SNB"), as Trustee, entered into that certain Indenture
(the "ORIGINAL INDENTURE," with the terms defined therein being used herein as
therein defined unless otherwise defined herein), dated as of September 1, 1992,
pursuant to which WTI-AL issued its 10-1/8% Senior Subordinated Notes Due 2002
(the "SECURITIES"); and
WHEREAS, pursuant to that certain First Supplemental Indenture dated as
of August 2, 1993, among WTI-AL, the Company (f/k/a Wolverine Holding Company)
and SNB (with the Original Indenture, as modified by such First Supplemental
Indenture, referred to herein as the "INDENTURE"), the Company assumed all
obligations of WTI-AL under the Securities and the Indenture; and
WHEREAS, the Trustee has heretofore been designated as successor trustee
to SNB under the Indenture, in accordance with the provisions of Section 7.09 of
the Indenture; and
WHEREAS, Section 9.02 of the Indenture provides that with the consent of
the holders of at least a majority in principal amount of the Securities at the
time outstanding (the "REQUISITE CONSENTS"), the Company and the Trustee may
amend the Indenture, subject to certain exceptions specified in Section 9.02 of
the Indenture; and
WHEREAS, the Company has obtained the Requisite Consents to amend the
Indenture in certain respects (the "PROPOSED AMENDMENTS"); and
WHEREAS, this Supplemental Indenture has been duly authorized by all
necessary corporate action on the part of the Company;
NOW, THEREFORE, the Company hereby covenants and agrees with the Trustee
for the equal and proportionate benefit of all Holders of the Securities, as
follows:
<PAGE> 2
ARTICLE 1
AMENDMENTS TO CERTAIN PROVISIONS OF INDENTURE
SECTION 1.01. AMENDMENT OF CERTAIN SECTIONS OF THE INDENTURE. Subject to
Section 3.01 hereof, the Indenture is hereby amended in the following respects:
(a) The Section headings and text of each of Sections 4.02, 4.03,
4.04, 4.05, 4.06, 4.07, 4.08, 4.09 and 5.01 of the Indenture are hereby deleted
in their entirety and replaced with the following:
"[Intentionally Deleted by Amendment]"
(b) Section 6.01 of the Indenture is hereby amended as follows:
(i) the text of clause (3) is deleted in its entirety and
replaced with the phrase "[Intentionally Deleted by
Amendment];"
(ii) the text of clause (4) is deleted and replaced in its
entirety as follows:
"the Company fails to comply with Section 4.10
and such failure continues for 30 days after the
notice specified below;"
(iii) the text of clause (5) is deleted and replaced in its
entirety as follows:
"the Company fails to comply with any of its
agreements in the Securities or this Indenture (other
than those referred to in (1), (2) or (4) above) and
such failure continues for 60 days after the notice
specified below;"
(iv) the text of clause (6) is deleted in its entirety and
replaced with the phrase "[Intentionally Deleted by
Amendment];" and
(v) the text of clause (9) is deleted in its entirety and
replaced with the phrase "[Intentionally Deleted by
Amendment]."
2
<PAGE> 3
(c) Section 1.01 of the Indenture is hereby amended as follows:
(i) The captions and text of each of the following defined
terms are deleted in their entirety: Asset Disposition,
Average Life, Capital Stock, Change of Control,
Consolidated EBITDA Coverage Ratio, Consolidated Net
Income, Consolidated Net Tangible Assets, Consolidated Net
Worth, Credit Agreement, Exchangeable Stock, Investment,
Net Available Cash, Net Cash Proceeds, Non-Convertible
Capital Stock, Permitted Investments, Preferred Stock,
Prospectus, Redeemable Stock, Reference Period, Secured
Debt, Stated Maturity, Subordinated Obligation, Tangible
Property, WHC, Wholly Owned Subsidiary.
(d) Section 1.02 of the Indenture is hereby amended by deleting the
following terms and section references corresponding to such terms: Custodian,
Offer, Offer Amount, Offer Period, Purchase Date, Restricted Payment.
ARTICLE 2
WAIVERS
SECTION 2.01. LIMITED WAIVER OF COMPLIANCE WITH CERTAIN PROVISIONS OF
THE INDENTURE. To the extent that any actions taken or to be taken by the
Company in effecting, undertaking and consummating the Offer, the Solicitation
and the Proposed Financing, as such terms are defined in, and in accordance with
the terms set forth in, the Company's Offer to Purchase and Consent Solicitation
Statement, dated March 25, 1997 (the "Statement"), would not comply with or be
limited by the provisions of the Indenture, compliance with such provisions is
hereby waived to the extent so required.
ARTICLE 3
SUNDRY PROVISIONS
SECTION 3.01. EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution and
delivery of this Supplemental Indenture by the Company and the Trustee, the
Indenture shall be supplemented in accordance herewith, and this Supplemental
Indenture shall form a part of the Indenture for all purposes, and every Holder
of Securities heretofore or hereafter authenticated and delivered under the
Indenture shall be bound thereby; provided, however, that Section 1.01 hereof
shall only become operative upon the opening of business on the date the Company
deposits with Citibank, N.A., as Depositary for the Offer and the Solicitation,
the amount of money sufficient to pay all Securities accepted for purchase
pursuant to the Offer.
3
<PAGE> 4
SECTION 3.02. INDENTURE REMAINS IN FULL FORCE AND EFFECT. Except as
supplemented hereby, all provisions in the Indenture shall remain in full force
and effect.
SECTION 3.03. INDENTURE AND SUPPLEMENTAL INDENTURE CONSTRUED TOGETHER.
This Supplemental Indenture is an indenture supplemental to and in
implementation of the Indenture, and the Indenture and this Supplemental
Indenture shall henceforth be read and construed together.
SECTION 3.04. CONFIRMATION AND PRESERVATION OF INDENTURE. The
Indenture as supplemented by this Supplemental Indenture is in all respects
confirmed and preserved.
SECTION 3.05. CONFLICT WITH TRUST INDENTURE ACT. If any provision of
this Supplemental Indenture limits, qualifies or conflicts with any provision of
the Trust Indenture Act that is required under such Act to be part of and govern
any provision of this Supplemental Indenture, the provision of such Act shall
control. If any provision of this Supplemental Indenture modifies or excludes
any provision of the Trust Indenture Act that may be so modified or excluded,
the provision of such Act shall be deemed to apply to the Indenture as so
modified or to be excluded by this Supplemental Indenture, as the case may be.
SECTION 3.06. SEPARABILITY CLAUSE. In case any provision in this
Supplemental Indenture shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 3.07. TERMS DEFINED IN THE INDENTURE. All capitalized terms
not otherwise defined herein shall have the meanings ascribed to them in the
Indenture.
SECTION 3.08. EFFECT OF HEADINGS. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
SECTION 3.09. BENEFITS OF SUPPLEMENTAL INDENTURE, ETC. Nothing in this
Supplemental Indenture, the Indenture or the Securities, express or implied,
shall give to any Person, other than the parties hereto and thereto and their
successors hereunder and thereunder and the Holders of Securities, any benefit
of any legal or equitable right, remedy or claim under the Indenture, this
Supplemental Indenture or the Securities.
SECTION 3.10. SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Supplemental Indenture by the Company shall bind its successors and
assigns, whether so expressed or not.
SECTION 3.11. TRUSTEE NOT RESPONSIBLE FOR RECITALS. The recitals
contained herein shall be taken as the statements of the
4
<PAGE> 5
Company, and the Trustee assumes no responsibility for their correctness.
SECTION 3.12. CERTAIN DUTIES AND RESPONSIBILITIES OF THE TRUSTEE. In
entering into this Supplemental Indenture, the Trustee shall be entitled to the
benefit of every provision of the Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee, whether or not
elsewhere herein so provided.
SECTION 3.13. GOVERNING LAW. This Supplemental Indenture shall be
governed by and construed in accordance with the laws of the State of New York,
without regard to the conflicts of law principles thereof.
SECTION 3.14. COUNTERPARTS. This Supplemental Indenture may be
executed in counterparts, each of which, when so executed, shall be deemed to be
an original, but all such counterparts shall together constitute but one and the
same instrument.
5
<PAGE> 6
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date and year first
above written.
WOLVERINE TUBE, INC.
By: /s/ John M. Quarles
-----------------------
John M. Quarles
Chairman and Interim
Chief Executive Officer
Attest:
By: /s/ James E. Deason
--------------------------
James E. Deason
Executive Vice President,
Chief Financial Officer
and Secretary
MELLON BANK, F.S.B.,
AS TRUSTEE
By: /s/ Robert Schmidt
---------------------
Title: Vice President
-------------------
Attest:
By: /s/ Marilyn Bachman
---------------------
Title: Trust Officer
------------------
6
<PAGE> 1
EXHIBIT 10.3
================================================================================
CREDIT AGREEMENT
DATED AS OF APRIL 30, 1997
AMONG
WOLVERINE TUBE, INC.
AND
WOLVERINE TUBE (CANADA) INC.,
AS THE BORROWERS,
THE LENDERS LISTED HEREIN,
AS THE LENDERS,
AND
CREDIT SUISSE FIRST BOSTON,
AS THE ADMINISTRATIVE AGENT
AND
MELLON BANK, N.A.
AS THE DOCUMENTATION AGENT
================================================================================
<PAGE> 2
WOLVERINE TUBE, INC.
WOLVERINE TUBE (CANADA) INC.
CREDIT AGREEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 1.
DEFINITIONS.................................. 1
1.1 Certain Defined Terms .............................................. 1
1.2 Accounting Terms; Utilization of GAAP for Purposes
of Calculations Under Agreement .................................... 27
1.3 Other Definitional Provisions and Rules of Construction ............ 27
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS ......................... 27
2.1 Commitments; Making of Loans; the Register; Notes .................. 27
2.2 Interest on the Loans .............................................. 38
2.3 Fees ............................................................... 42
2.4 Prepayments and Reductions in Commitments; General
Provisions Regarding Payments ...................................... 42
2.5 Use of Proceeds .................................................... 48
2.6 Special Provisions Governing Eurodollar Rate
Loans .............................................................. 48
2.7 Increased Costs; Taxes; Capital Adequacy ........................... 51
2.8 Obligation of the Lenders and the Issuing Lenders to Mitigate ...... 55
2.9 Replacement of Lender .............................................. 56
SECTION 3.
LETTERS OF CREDIT .............................. 57
3.1 Issuance of Letters of Credit and the Lenders'
Purchase of Participations Therein ................................. 57
3.2 Letter of Credit Fees .............................................. 59
3.3 Drawings and Reimbursement of Amounts Paid Under
Letters of Credit .................................................. 60
3.4 Obligations Absolute ............................................... 63
3.5 Indemnification; Nature of the Issuing Lenders'
Duties ............................................................. 64
3.6 Increased Costs and Taxes Relating to Letters of
Credit ............................................................. 65
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT ........................ 66
4.1 Conditions to Initial Loans ........................................ 66
4.2 Conditions to All Loans ............................................ 69
4.3 Conditions to Letters of Credit .................................... 69
</TABLE>
(i)
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 5.
THE BORROWERS' REPRESENTATIONS AND WARRANTIES ...................... 70
5.1 Organization, Powers, Qualification, Good Standing,
Business and Subsidiaries .......................................... 70
5.2 Authorization of Borrowing, etc .................................... 71
5.3 Financial Condition ................................................ 72
5.4 No Material Adverse Change; No Restricted Junior Payments .......... 72
5.5 Title to Properties; Liens ......................................... 73
5.6 Litigation; Adverse Facts .......................................... 73
5.7 Payment of Taxes ................................................... 73
5.8 Performance of Agreements; Materially Adverse
Agreements; Material Contracts ..................................... 74
5.9 Governmental Regulation ............................................ 74
5.10 Securities Activities .............................................. 74
5.11 Employee Benefit Plans ............................................. 74
5.12 Certain Fees ....................................................... 75
5.13 Environmental Protection ........................................... 75
5.14 Employee Matters ................................................... 76
5.15 Solvency ........................................................... 76
5.16 Disclosure ......................................................... 76
SECTION 6.
THE BORROWERS' AFFIRMATIVE COVENANTS ............................... 77
6.1 Financial Statements and Other Reports ............................. 77
6.2 Corporate Existence, etc ........................................... 81
6.3 Payment of Taxes and Claims; Tax Consolidation ..................... 82
6.4 Maintenance of Properties; Insurance ............................... 82
6.5 Inspection Rights; Lender Meeting .................................. 82
6.6 Compliance with Laws, etc .......................................... 83
6.7 Environmental Review and Investigation, Disclosure, Etc.;
Loan Parties' Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws .......... 83
6.8 Execution of Subsidiary Guaranty by Certain Subsidiaries
and Future Subsidiaries............................................. 84
SECTION 7.
THE BORROWERS' NEGATIVE COVENANTS ......................... 84
7.1 Indebtedness ....................................................... 85
7.2 Liens and Related Matters .......................................... 86
7.3 Investments; Joint Ventures ........................................ 87
7.4 Contingent Obligations ............................................. 88
7.5 Restricted Junior Payments ......................................... 89
7.6 Financial Covenants ................................................ 89
</TABLE>
(ii)
<PAGE> 4
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions ... 90
7.8 Amendments of Documents Relating to Subordinated
Indebtedness ....................................................... 92
7.9 Fiscal Year ........................................................ 92
7.10 Sales and Lease-Backs .............................................. 92
7.11 Sale or Discount of Receivables .................................... 93
7.12 Transactions with Shareholders and Affiliates ...................... 93
7.13 Disposal of Subsidiary Stock ....................................... 93
7.14 Conduct of Business ................................................ 93
SECTION 8.
EVENTS OF DEFAULT .............................. 94
8.1 Failure to Make Payments When Due .................................. 94
8.2 Default in Other Agreements ........................................ 94
8.3 Breach of Certain Covenants ........................................ 94
8.4 Breach of Warranty ................................................. 94
8.5 Other Defaults Under Loan Documents ................................ 95
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc ............... 95
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc ................. 95
8.8 Judgments and Attachments .......................................... 96
8.9 Dissolution ........................................................ 96
8.10 Employee Benefit Plans ............................................. 96
8.11 Material Adverse Effect ............................................ 96
8.12 Change in Control .................................................. 96
8.13 Invalidity of Guaranties ........................................... 97
SECTION 9.
THE ADMINISTRATIVE AGENT ........................... 98
9.1 Appointment ........................................................ 98
9.2 Powers and Duties; General Immunity ................................ 98
9.3 Representations and Warranties; No Responsibility
For Appraisal of Creditworthiness................................... 100
9.4 Right to Indemnity ................................................. 100
9.5 Successor Administrative Agent,
Swing Line Lender and Canadian Lender............................... 101
9.6 Guaranties ......................................................... 102
SECTION 10.
MISCELLANEOUS................................ 102
10.1 Assignments and Participations in Loans and Letters of Credit ...... 102
10.2 Expenses ........................................................... 105
10.3 Indemnity .......................................................... 106
10.4 Set-Off ............................................................ 107
10.5 Ratable Sharing .................................................... 107
</TABLE>
(iii)
<PAGE> 5
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
10.6 Amendments and Waivers ............................................. 108
10.7 Independence of Covenants .......................................... 109
10.8 Notices ............................................................ 109
10.9 Survival of Representations, Warranties and Agreements ............. 110
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative .............. 110
10.11 Marshalling; Payments Set Aside .................................... 110
10.12 Severability ....................................................... 110
10.13 Obligations Several; Independent Nature of the Lenders' Rights ..... 111
10.14 Headings ........................................................... 111
10.15 Applicable Law ..................................................... 111
10.16 Successors and Assigns ............................................. 111
10.17 Consent to Jurisdiction and Service of Process ..................... 111
10.18 Waiver of Jury Trial ............................................... 112
10.19 Confidentiality .................................................... 113
10.20 Counterparts; Effectiveness ........................................ 113
Signature pages S-1
</TABLE>
(iv)
<PAGE> 6
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV-A FORM OF REVOLVING NOTE
IV-B FORM OF CANADIAN NOTE
V FORM OF SWING LINE NOTE
VI FORM OF COMPLIANCE CERTIFICATE
VII-A FORM OF OPINION OF JONES, DAY, REAVIS & POGUE
VII-B FORM OF OPINION OF MCKENZIE NASH BRYANT
VIII FORM OF OPINION OF O'MELVENY & MYERS LLP
IX FORM OF ASSIGNMENT AGREEMENT
X FORM OF CERTIFICATE RE NON-BANK STATUS
XI FORM OF COMPANY GUARANTY
XII FORM OF SUBSIDIARY GUARANTY
(v)
<PAGE> 7
SCHEDULES
1.1 EXISTING LETTERS OF CREDIT
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1J CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP; MANAGEMENT
5.1 SUBSIDIARIES OF BORROWERS
5.6 LITIGATION
5.8 MATERIAL CONTRACTS
5.11 CERTAIN EMPLOYEE BENEFIT PLANS
5.13 ENVIRONMENTAL MATTERS
7.1 CERTAIN EXISTING INDEBTEDNESS
7.2 CERTAIN EXISTING LIENS
7.3 CERTAIN EXISTING INVESTMENTS
7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
(vi)
<PAGE> 8
WOLVERINE TUBE, INC.
WOLVERINE TUBE (CANADA) INC.
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of April 30, 1997 and entered into by
and among WOLVERINE TUBE, INC., a Delaware corporation (the "COMPANY"),
WOLVERINE TUBE (CANADA) INC., an Ontario corporation ("WOLVERINE CANADA"; the
Company and Wolverine Canada are each a "BORROWER" and collectively, the
"BORROWERS"), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF
(each individually referred to herein as a "LENDER" and collectively as the
"LENDERS"), CREDIT SUISSE FIRST BOSTON ("CSFB"), as administrative agent for the
Lenders (in such capacity, the "ADMINISTRATIVE AGENT") and MELLON BANK, N.A., as
the documentation agent (in such capacity the "DOCUMENTATION AGENT").
RECITALS
WHEREAS, the Borrowers desire that the Lenders extend certain credit
facilities to the Borrowers to be used (i) to repay and terminate the Existing
Debt, (ii) to fund the Company's Tender Offer (capitalized terms used in these
recitals without definition shall have the respective meanings assigned in
subsection 1.1), (iii) for working capital financing and (iv) for other general
corporate purposes:
WHEREAS, the Company has agreed to guarantee the Obligations of Wolverine
Canada hereunder and under the other Loan Documents; and
WHEREAS, the Subsidiary Guarantors have agreed to guarantee the
Obligations of the Borrowers hereunder and under the other Loan Documents;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the Borrowers, the Lenders and the
Administrative Agent agree as follows:
SECTION 1.
DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the following
meanings:
1
<PAGE> 9
"ADJUSTED EURODOLLAR RATE" means, with respect to each day during
each Interest Period pertaining to a Eurodollar Rate Loan, a rate per
annum determined for such day in accordance with the following formula:
Eurodollar Base Rate
---------------------------------------
1.00 - Eurocurrency Reserve Requirements
"ADMINISTRATIVE AGENT" has the meaning assigned to that term in
the introduction to this Agreement and also means and includes any
successor Administrative Agent appointed pursuant to subsection 9.5A.
"AFFECTED LENDER" has the meaning assigned to that term in
subsection 2.6C.
"AFFILIATE", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common
control with, that Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as applied to any
Person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of that
Person, whether through the ownership of voting securities or by contract
or otherwise.
"AGGREGATE NET PROCEEDS" means the sum of (i) Net Asset Sale
Proceeds plus (ii) Net Insurance/Condemnation Proceeds plus (iii) Net
Securities Proceeds minus (iv) the aggregate amount of Net
Insurance/Condemnation Proceeds actually used in accordance with the
provisions of subsection 2.4A(iii)(b) to pay or reimburse the costs of
repairing, restoring or replacing the assets in respect of which such Net
Insurance/Condemnation Proceeds were received minus (v) the aggregate
amount of Net Securities Proceeds applied to effect Permitted
Acquisitions in accordance with the provisions of subsection
2.4A(iii)(c), in each case measured on a cumulative basis from the
Closing Date.
"AGREEMENT" means this Credit Agreement dated as of April 30,
1997, as it may be amended, supplemented or otherwise modified from time
to time.
"APPLICABLE LEVEL" means, as of any date, the applicable level
determined with reference to the Company's Debt Rating by S&P and Moody's
and the Leverage Ratio Amount pursuant to the table set forth below:
2
<PAGE> 10
<TABLE>
<CAPTION>
=====================================================================================================================
APPLICABLE DEBT RATING DEBT RATING LEVERAGE
LEVEL BY S&P BY MOODY'S RATIO AMOUNT
=====================================================================================================================
<S> <C> <C> <C>
I greater than or greater than or less than 1.0
equal to A- equal to A3
- ---------------------------------------------------------------------------------------------------------------------
II greater than or greater than or greater than or
equal to BBB but equal to Baa2 but equal to 1.0
less than A- less than A3 but less than
1.5
- ---------------------------------------------------------------------------------------------------------------------
III greater than or greater than or greater than or
equal to BBB- but equal to Baa3 but equal to 1.5
less than BBB less than Baa2 but less than
2.0
- ---------------------------------------------------------------------------------------------------------------------
IV greater than or greater than or greater than or
equal to BB but equal to Ba2 but equal to 2.0
less than BBB- less than Baa3 but less than
2.5
- ---------------------------------------------------------------------------------------------------------------------
V less than or equal less than or equal greater than or
to BB- to Ba3 equal to 2.5
=====================================================================================================================
</TABLE>
; provided that (i) if a Debt Rating by either S&P or Moody's is in
effect, the Debt Rating shall determine the Applicable Level and the
Leverage Ratio Amount shall not apply and (ii) if neither a Debt Rating
from S&P nor a Debt Rating from Moody's is in effect, (a) the Applicable
Level shall be Level III at all times during the first six months after
the Closing Date and (b) at all times thereafter, the Leverage Ratio
Amount shall determine the Applicable Level (provided that if the
Borrowers fail to deliver the financial statements required pursuant to
subsection 6.1(i) by the applicable date set forth in such subsection,
the Applicable Level shall be Level V until such financial statements are
delivered); provided further, that if the Debt Ratings assigned by S&P
and Moody's result in different levels, the higher level (it being
understood and agreed that Level I shall be the highest Applicable Level
and Level V the lowest) shall be the Applicable Level unless one of the
levels is two or more levels lower than the other level, in which case
the level immediately above the lower level shall be the Applicable
Level.
"APPLICABLE MARGIN" means, as of any date and with respect to any
Applicable Level, the corresponding percentage set forth below:
<TABLE>
<CAPTION>
====================================================
APPLICABLE APPLICABLE
LEVEL MARGIN
====================================================
<S> <C>
I .250%
----------------------------------------------------
II .375%
----------------------------------------------------
III .500%
----------------------------------------------------
IV .650%
----------------------------------------------------
V .875%
====================================================
</TABLE>
3
<PAGE> 11
"ASSET SALE" means the sale by either Borrower or any of their
respective Subsidiaries to any Person other than the Borrowers or any of
their respective wholly-owned Subsidiaries of (i) any of the stock of any
of the Borrowers' Subsidiaries, (ii) substantially all of the assets of
any division or line of business of either Borrower or any of their
respective Subsidiaries, or (iii) any other assets (whether tangible or
intangible) of either Borrower or any of their respective Subsidiaries
(other than inventory or used equipment sold in the ordinary course of
business).
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of Exhibit IX annexed hereto.
"ATTRIBUTABLE INDEBTEDNESS" means, when used with respect to any
sale and lease-back transactions with respect to which the subject lease
is not accounted for as a capital lease, as of any date of determination,
the greater of (i) the gross purchase price for the property subject to
such transaction and (ii) the present value (discounted at 10% per annum,
compounded on a monthly basis) of the total obligations of the lessee for
rental payments during the remaining term of the lease included in such
arrangement (including any period for which such lease has been
extended), as each such amount shall be reasonably determined by the
Company and certified to the Administrative Agent in an Officer's
Certificate of the Company.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor
statute.
"BASE RATE" means, at any time, the higher of (x) the Prime Rate
or (y) the rate which is 1/2 of 1% in excess of the Federal Funds
Effective Rate.
"BASE RATE LOANS" means Loans bearing interest at rates determined
by reference to the Base Rate as provided in subsection 2.2A.
"BORROWER" and "BORROWERS" have the meanings assigned to those
terms in the introduction to this Agreement.
"BUSINESS DAY" means (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which
is a legal holiday under the laws of the City of New York or is a day on
which banking institutions located in such city are authorized or
required by law or other governmental action to close and (ii) with
respect to all notices, determinations, fundings and payments in
connection with the Adjusted Eurodollar Rate or any Eurodollar Rate
Loans, any day that is a Business Day described in clause (i) above that
is also a day for trading by and between banks in Dollar deposits in the
London interbank market.
"CAPITAL LEASE", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that,
in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of that Person.
4
<PAGE> 12
"CANADIAN DOLLARS" means the freely transferable money of the
country of Canada (expressed in dollars).
"CANADIAN LENDER" means The Bank of Nova Scotia, or any Person
serving as a successor Canadian Lender hereunder.
"CANADIAN LOAN COMMITMENT" means the commitment of the Canadian
Lender to make Canadian Loans pursuant to subsection 2.1A(iii).
"CANADIAN LOANS" means the Loans the Canadian Lender has agreed to
make pursuant to subsection 2.1A(iii).
"CANADIAN NOTE" means (i) the promissory note of Wolverine Canada
issued pursuant to subsection 2.1E on the Closing Date and (ii) any
promissory note issued by Wolverine Canada to any successor Canadian
Lender pursuant to the last sentence of subsection 9.5C, in each case
substantially in the form of Exhibit IV-B annexed hereto, as it may be
amended, supplemented or otherwise modified from time to time.
"CANADIAN RATE" means the rate agreed to by The Bank of Nova
Scotia and the Company.
"CASH" means money, currency or an available credit balance in a
Deposit Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally
guaranteed as to interest and principal by the United States Government
or (b) issued by any agency of the United States the obligations of which
are backed by the full faith and credit of the United States, in each
case maturing within one year after such date; (ii) marketable direct
obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality
thereof, in each case maturing within one year after such date and
having, at the time of the acquisition thereof, the highest rating
obtainable from either S&P or Moody's; (iii) commercial paper maturing no
more than one year from the date of creation thereof and having, at the
time of the acquisition thereof, a rating of at least A-1 from S&P or at
least P-1 from Moody's; (iv) certificates of deposit or bankers'
acceptances maturing within one year after such date and issued or
accepted by any Lender or by any commercial bank organized under the laws
of the United States of America or any state thereof or the District of
Columbia that (a) is at least "adequately capitalized" (as defined in the
regulations of its primary Federal banking regulator) and (b) has Tier 1
capital (as defined in such regulations) of not less than $100,000,000;
and (v) shares of any money market mutual fund that (a) has at least 95%
of its assets invested continuously in the types of investments referred
to in clauses (i) and (ii) above, (b) has net
5
<PAGE> 13
assets of not less than $500,000,000, and (c) has the highest rating
obtainable from either S&P or Moody's.
"CERTIFICATE RE NON-BANK STATUS" means a certificate substantially
in the form of Exhibit X annexed hereto delivered by a Lender to the
Administrative Agent pursuant to subsection 2.7B(iii).
"CLOSING DATE" means the date on or before May 31, 1997, on which
the initial Loans or other extension of credit is made.
"COMMERCIAL LETTER OF CREDIT" means any letter of credit or
similar instrument issued for the purpose of providing the primary
payment mechanism in connection with the purchase of any materials, goods
or services by any Borrower or any of its respective Subsidiaries in the
ordinary course of business of such Borrower or such Subsidiary.
"COMMITMENTS" means, collectively, the Revolving Loan Commitments
of Lenders, the Swing Line Loan Commitment of the Swing Line Lender and
the Canadian Loan Commitment of the Canadian Lender.
"COMPANY" has the meaning assigned to that term in the
introduction to this Agreement.
"COMPANY COMMON STOCK" means the common stock of the Company, par
value $0.01 per share.
"COMPANY GUARANTY" means the Company Guaranty executed and
delivered by the Company on the Closing Date, substantially in the form
of Exhibit XI annexed hereto, as such Company Guaranty may hereafter be
amended, supplemented or otherwise modified from time to time.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the
form of Exhibit VI annexed hereto delivered to the Administrative Agent
and the Lenders by the Borrowers pursuant to subsection 6.1(iii).
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, the sum of
the amounts for such period of (i) Consolidated Net Income, (ii)
Consolidated Interest Expense, (iii) provisions for taxes based on
income, (iv) total depreciation expense, (v) total amortization expense,
and (vi) other non-cash items reducing Consolidated Net Income less other
non-cash items increasing Consolidated Net Income, all of the foregoing
as determined on a consolidated basis for the Company and its
Subsidiaries in conformity with GAAP.
6
<PAGE> 14
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the sum
of (i) the aggregate of all expenditures (whether paid in cash or other
consideration or accrued as a liability and including that portion of
Capital Leases which is capitalized on the consolidated balance sheet of
the Company and its Subsidiaries) by the Company and its Subsidiaries
during that period that, in conformity with GAAP, are included in
"additions to property, plant or equipment" or comparable items reflected
in the consolidated statement of cash flows of the Company and its
Subsidiaries plus (ii) to the extent not covered by clause (i) of this
definition, the aggregate of all expenditures by the Company and its
Subsidiaries during that period (a) to purchase or develop computer
software or systems (but only to the extent such expenditures are
capitalized on the consolidated balance sheet of the Company and its
Subsidiaries in conformity with GAAP) or (b) to acquire (by purchase or
otherwise) the business, property or fixed assets of any Person, or the
stock or other evidence of beneficial ownership of any Person that, as a
result of such acquisition, becomes a Subsidiary of any Borrower.
"CONSOLIDATED CASH FLOW" means, for any period, an amount (if
positive) equal to the amount of Consolidated Adjusted EBITDA for such
period minus the amount of Consolidated Capital Expenditures (net of any
proceeds of any related financings with respect to such expenditures) for
such period.
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum
(without duplication) of the amounts for such period of (i) Consolidated
Interest Expense, (ii) provisions for taxes paid in cash, (iii)
provisions for dividends paid in cash, and (iv) scheduled principal
amortization, all of the foregoing as determined on a consolidated basis
for the Company and its Subsidiaries in conformity with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense (including that portion attributable to Capital Leases
in accordance with GAAP and capitalized interest) of the Company and its
Subsidiaries on a consolidated basis with respect to all outstanding
Indebtedness of the Borrowers and their respective Subsidiaries,
including all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing and net
costs under Interest Rate Agreements, but excluding, however, any amounts
referred to in subsection 2.3 payable to the Administrative Agent and the
Lenders on or before the Closing Date.
"CONSOLIDATED NET INCOME" means, for any period, the net income
(or loss) of the Company and its Subsidiaries on a consolidated basis for
such period taken as a single accounting period determined in conformity
with GAAP; provided that there shall be excluded (i) the income (or loss)
of any Person (other than a Subsidiary of any Borrower) in which any
other Person (other than any Borrower or any of its respective
Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to any Borrower or any of
its respective Subsidiaries by such Person during such period, (ii) the
income (or loss)
7
<PAGE> 15
of any Person accrued prior to the date it becomes a Subsidiary of any
Borrower or is merged into or consolidated with any Borrower or any of
its respective Subsidiaries or that Person's assets are acquired by any
Borrower or any of its respective Subsidiaries, (iii) the income of any
Subsidiary of any Borrower to the extent that the declaration or payment
of dividends or similar distributions by that Subsidiary of that income
is not at the time permitted by operation of the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary, (iv) any after-tax
gains or losses attributable to Asset Sales or returned surplus assets of
any Pension Plan, and (v) (to the extent not included in clauses (i)
through (iv) above) any net extraordinary gains or net non-cash
extraordinary losses.
"CONSOLIDATED TOTAL DEBT" means, as at any date of determination,
the aggregate stated balance sheet amount of all Indebtedness of the
Company and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP.
"CONTINGENT OBLIGATION", as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person (i)
with respect to any Indebtedness, lease, dividend or other obligation of
another if the primary purpose or intent thereof by the Person incurring
the Contingent Obligation is to provide assurance to the obligee of such
obligation of another that such obligation of another will be paid or
discharged, or that any agreements relating thereto will be complied
with, or that the holders of such obligation will be protected (in whole
or in part) against loss in respect thereof, (ii) with respect to any
letter of credit issued for the account of that Person or as to which
that Person is otherwise liable for reimbursement of drawings, or (iii)
under Hedge Agreements. Contingent Obligations shall include (a) the
direct or indirect guaranty, endorsement (otherwise than for collection
or deposit in the ordinary course of business), co-making, discounting
with recourse or sale with recourse by such Person of the obligation of
another, (b) the obligation to make take-or-pay or similar payments if
required regardless of non-performance by any other party or parties to
an agreement, and (c) any liability of such Person for the obligation of
another through any agreement (contingent or otherwise) (X) to purchase,
repurchase or otherwise acquire such obligation or any security therefor,
or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital
contributions or otherwise) or (Y) to maintain the solvency or any
balance sheet item, level of income or financial condition of another if,
in the case of any agreement described under subclause (X) or (Y) of this
sentence, the primary purpose or intent thereof is as described in the
preceding sentence. The amount of any Contingent Obligation shall be
equal to the amount of the obligation so guaranteed or otherwise
supported or, if less, the amount to which such Contingent Obligation is
specifically limited.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any material
indenture, mortgage, deed of trust, contract, undertaking, agreement or
other instrument to which that Person is
8
<PAGE> 16
a party or by which it or any of its properties is bound or to which it
or any of its properties is subject.
"CSFB" has the meaning assigned to that term in the introduction
to this Agreement.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement to which any of the Borrowers or any of
their respective Subsidiaries is a party.
"DEBT RATING" means the debt rating assigned by either or each of
S&P and Moody's, from time to time, based on the senior unsecured
long-term debt of the Company.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate
of deposit.
"DOCUMENTATION AGENT" has the meaning assigned to that term in the
introduction to this Agreement.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"ELIGIBLE ASSIGNEE" means (A) (i) a commercial bank organized
under the laws of the United States or any state thereof; (ii) a savings
and loan association or savings bank organized under the laws of the
United States or any state thereof; (iii) a commercial bank organized
under the laws of any other country or a political subdivision thereof;
provided that (x) such bank is acting through a branch or agency located
in the United States or (y) such bank is organized under the laws of a
country that is a member of the Organization for Economic Cooperation and
Development or a political subdivision of such country; and (iv) any
other entity which is an "accredited investor" (as defined in Regulation
D under the Securities Act) which extends credit or buys loans as one of
its businesses including insurance companies, mutual funds and lease
financing companies; and (B) any Lender and any Affiliate of any Lender;
provided that no Affiliate of any Borrower shall be an Eligible Assignee.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is or was maintained or
contributed to by any Borrower, any of their respective Subsidiaries or
any of their respective ERISA Affiliates.
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"ENVIRONMENTAL CLAIM" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or
other order or directive (conditional or otherwise), by any governmental
authority or any other Person, arising (i) pursuant to or in connection
with any actual or alleged violation of any Environmental Law, (ii) in
connection with any Hazardous Materials or any actual or alleged
Hazardous Materials Activity, or (iii) in connection with any actual or
alleged damage, injury, threat or harm to health, safety, natural
resources or the environment.
"ENVIRONMENTAL LAWS" means any and all current or future statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirements of governmental
authorities relating to (i) environmental matters, including those
relating to any Hazardous Materials Activity, (ii) the generation, use,
storage, transportation or disposal of Hazardous Materials, or (iii)
occupational safety and health, industrial hygiene, land use or the
protection of human, plant or animal health or welfare, in any manner
applicable to any Borrower or any of its respective Subsidiaries or any
Facility, including the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. ss. 9601 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. ss. 1801 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. ss. 6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. ss. 1251 et seq.), the
Clean Air Act (42 U.S.C. ss. 7401 et seq.), the Toxic Substances Control
Act (15 U.S.C. ss. 2601 et seq.), the Federal Insecticide, Fungicide and
Rodenticide Act (7 U.S.C. ss.136 et seq.), the Occupational Safety and
Health Act (29 U.S.C. ss. 651 et seq.), the Oil Pollution Act (33 U.S.C.
ss. 2701 et seq) and the Emergency Planning and Community Right-to-Know
Act (42 U.S.C. ss. 11001 et seq.), each as amended or supplemented, any
analogous present or future state or local statutes or laws, and any
regulations promulgated pursuant to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor thereto.
"ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations
within the meaning of Section 414(b) of the Internal Revenue Code of
which that Person is a member; (ii) any trade or business (whether or not
incorporated) which is a member of a group of trades or businesses under
common control within the meaning of Section 414(c) of the Internal
Revenue Code of which that Person is a member; and (iii) any member of an
affiliated service group within the meaning of Section 414(m) or (o) of
the Internal Revenue Code of which that Person, any corporation described
in clause (i) above or any trade or business described in clause (ii)
above is a member. Any former ERISA Affiliate of any Borrower or any of
its respective Subsidiaries shall continue to be considered an ERISA
Affiliate of such Borrower or such Subsidiary within the meaning of this
definition with respect to the period such entity was an ERISA Affiliate
of such Borrower or such Subsidiary and with respect to liabilities
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<PAGE> 18
arising after such period for which such Borrower or such Subsidiary
could be liable under the Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect
to any Pension Plan (excluding those for which the provision for 30-day
notice to the PBGC has been waived by regulation); (ii) the failure to
meet the minimum funding standard of Section 412 of the Internal Revenue
Code with respect to any Pension Plan (whether or not waived in
accordance with Section 412(d) of the Internal Revenue Code) or the
failure to make by its due date a required installment under Section
412(m) of the Internal Revenue Code with respect to any Pension Plan or
the failure to make any required contribution to a Multiemployer Plan;
(iii) the provision by the administrator of any Pension Plan pursuant to
Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan
in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by any Borrower, any of its respective Subsidiaries or any of
their respective ERISA Affiliates from any Pension Plan with two or more
contributing sponsors or the termination of any such Pension Plan
resulting in liability pursuant to Section 4063 or 4064 of ERISA; (v) the
institution by the PBGC of proceedings to terminate any Pension Plan, or
the occurrence of any event or condition which might constitute grounds
under ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (vi) the imposition of liability on any
Borrower, any of their respective Subsidiaries or any of their respective
ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by
reason of the application of Section 4212(c) of ERISA; (vii) the
withdrawal of any Borrower, any of their respective Subsidiaries or any
of their respective ERISA Affiliates in a complete or partial withdrawal
(within the meaning of Sections 4203 and 4205 of ERISA) from any
Multiemployer Plan if there is any potential liability therefor, or the
receipt by any Borrower, any of their respective Subsidiaries or any of
their respective ERISA Affiliates of notice from any Multiemployer Plan
that it is in reorganization or insolvency pursuant to Section 4241 or
4245 of ERISA, or that it intends to terminate or has terminated under
Section 4041A or 4042 of ERISA; (viii) the occurrence of an act or
omission which could give rise to the imposition on any Borrower, any of
their respective Subsidiaries or any of their respective ERISA Affiliates
of fines, penalties, taxes or related charges under Chapter 43 of the
Internal Revenue Code or under Section 409, Section 502(c), (i) or (l),
or Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix)
the assertion of a material claim (other than routine claims for
benefits) against any Employee Benefit Plan other than a Multiemployer
Plan or the assets thereof, or against any Borrower, any of their
respective Subsidiaries or any of their respective ERISA Affiliates in
connection with any Employee Benefit Plan; (x) receipt from the Internal
Revenue Service of notice of the failure of any Pension Plan (or any
other Employee Benefit Plan intended to be qualified under Section 401(a)
of the Internal Revenue Code) to qualify under Section 401(a) of the
Internal Revenue Code, or the failure of any trust forming part of any
Pension Plan to qualify for exemption from taxation under Section 501(a)
of the Internal Revenue Code; or (xi) the imposition of a Lien
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<PAGE> 19
pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or
pursuant to ERISA with respect to any Pension Plan.
"EUROCURRENCY RESERVE REQUIREMENTS" means, for each Interest
Period for each Eurodollar Rate Loan, the highest reserve percentage
applicable to any Lender during such Interest Period under regulations
issued from time to time by the Board of Governors of the Federal Reserve
System or any successor for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other
marginal reserve requirement), with respect to liabilities or assets
consisting of or including Eurocurrency liabilities having a term equal
to such Interest Period.
"EURODOLLAR BASE RATE" means the rate per annum determined by the
Administrative Agent at approximately 11:00 A.M. (London time) on the
date which is two Business Days prior to the beginning of the relevant
Interest Period (as specified in the applicable Notice of Borrowing) by
reference to the British Bankers' Association Interest Settlement Rates
for deposits in Dollars (as set forth by any service selected by the
Administrative Agent which has been nominated by the British Bankers'
Association as an authorized information vendor for the purpose of
displaying such rates) for a period equal to such Interest Period;
provided that, to the extent that an interest rate is not ascertainable
pursuant to the foregoing provisions of this definition, the "Eurodollar
Base Rate" shall be the interest rate per annum determined by the
Administrative Agent to be the average of the rates per annum at which
deposits in Dollars are offered for such relevant Interest Period to
major banks in the London interbank market in London, England by the
Reference Lenders at approximately 11:00 A.M. (London time) on the date
which is two Business Days prior to the beginning of such Interest
Period. If any of the Reference Lenders shall be unable or shall
otherwise fail to supply such rates to the Administrative Agent upon its
request, the rate of interest shall, subject to the provisions of
subsection 5.10, be determined on the basis of the quotations of the
remaining Reference Lender.
"EURODOLLAR RATE LOANS" means Revolving Loans bearing interest at
rates determined by reference to the Adjusted Eurodollar Rate as provided
in subsection 2.2A.
"EVENT OF DEFAULT" means each of the events set forth in Section
8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"EXISTING CREDIT AGREEMENT" means, collectively, (i) that certain
Loan Agreement, dated as of February 28, 1994 by and among the Borrowers,
PNC Bank, Kentucky, Inc., Mellon Bank, N.A., Bank of America National
Trust and Savings Bank and the Bank of Nova Scotia and (ii) that certain
Line of Credit Agreement,
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<PAGE> 20
dated as of August 1, 1995 between Mellon Bank, N.A. and the Company, as
each such agreement may be amended, supplemented or otherwise modified to
the date hereof, pursuant to which the Existing Lenders made certain
loans and other extensions of credit and Mellon Bank, N.A., as the swing
line lender, made certain swing line loans.
"EXISTING DEBT" means all Indebtedness of the Loan Parties under
the Existing Credit Agreement.
"EXISTING LENDERS" means the lenders party to the Existing Credit
Agreement.
"EXISTING LETTERS OF CREDIT" means, collectively, the Letters of
Credit set forth on Schedule 1.1 annexed hereto, each of which was issued
under the Existing Credit Agreement and is outstanding on the Closing
Date.
"FACILITIES" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now, hereafter
or heretofore owned, leased, operated or used by either Borrower or any
of their respective Subsidiaries or any of their respective predecessors
or Affiliates.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by the Administrative
Agent.
"FINANCIAL PLAN" has the meaning assigned to that term in
subsection 6.1(xii).
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of the Company and its
Subsidiaries ending on December 31 of each calendar year.
"FUNDING AND PAYMENT OFFICE" means (i) the office of the
Administrative Agent located at 11 Madison Avenue, New York, New York
10010 or (ii) such other office of the Administrative Agent as may from
time to time hereafter be designated as such in a written notice
delivered by the Administrative Agent to the Borrowers and each Lender.
"FUNDING DATE" means the date of the funding of a Loan.
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<PAGE> 21
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting
principles set forth in opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as may
be approved by a significant segment of the accounting profession, in
each case as the same are applicable to the circumstances as of the date
of determination.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or
from any federal, state or local governmental authority, agency or court.
"GUARANTIES" means the Company Guaranty and the Sub- sidiary
Guaranty.
"HAZARDOUS MATERIALS" means (i) any chemical, material or
substance at any time defined as or included in the definition of
"hazardous substances", "hazardous wastes", "hazardous materials",
"extremely hazardous waste", "acutely hazardous waste", "radioactive
waste", "biohazardous waste", "pollutant", "toxic pollutant",
"contaminant", "restricted hazardous waste", "infectious waste", "toxic
substances", or any other term or expression intended to define, list or
classify substances by reason of properties harmful to health, safety or
the indoor or outdoor environment (including harmful properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity,
reproductive toxicity, "TCLP toxicity" or "EP toxicity" or words of
similar import under any applicable Environmental Laws); (ii) any oil,
petroleum, petroleum fraction or petroleum derived substance; (iii) any
drilling fluids, produced waters and other wastes associated with the
exploration, development or production of crude oil, natural gas or
geothermal resources; (iv) any flammable substances or explosives; (v)
any radioactive materials; (vi) any asbestos-containing materials; (vii)
urea formaldehyde foam insulation; (viii) electrical equipment which
contains any oil or dielectric fluid containing polychlorinated
biphenyls; (ix) pesticides; and (x) any other chemical, material or
substance, exposure to which is prohibited, limited or regulated by any
governmental authority or which may or could pose a hazard to the health
and safety of the owners, occupants or any Persons in the vicinity of any
Facility or to the indoor or outdoor environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current, proposed
or threatened activity, event or occurrence involving any Hazardous
Materials, including the use, manufacture, possession, storage, holding,
presence, existence, location, Release, threatened Release, discharge,
placement, generation, transportation, processing, construction,
treatment, abatement, removal, remediation, disposal, disposition or
handling of any Hazardous Materials, and any corrective action or
response action with respect to any of the foregoing.
"HEDGE AGREEMENT" means an Interest Rate Agreement or a Currency
Agreement designed to hedge against fluctuations in interest rates or
currency values,
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<PAGE> 22
respectively or forward commodities contracts not designed to acquire
materials used in the business of the Company and its Subsidiaries.
"IDB INDEBTEDNESS" means Indebtedness issued by any state of the
United States of America, or any agency, instrumentality, authority or
political subdivision thereof, as part of a conduit financing for the
Company or any of its Subsidiaries to finance property, plant and
equipment of the Company or one of its Subsidiaries.
"INDEBTEDNESS", as applied to any Person, means (i) all
indebtedness for borrowed money, (ii) that portion of obligations with
respect to Capital Leases that is properly classified as a liability on a
balance sheet in conformity with GAAP, (iii) notes payable and drafts
accepted representing extensions of credit whether or not representing
obligations for borrowed money, (iv) any obligation owed for all or any
part of the deferred purchase price of property or services (excluding
any such obligations incurred under ERISA), which purchase price is (a)
due more than six months from the date of incurrence of the obligation in
respect thereof or (b) evidenced by a note or similar written instrument,
and (v) all indebtedness secured by any Lien on any property or asset
owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse
to the credit of that Person. Obligations under Interest Rate Agreements
and Currency Agreements constitute (X) in the case of Hedge Agreements,
Contingent Obligations, and (Y) in all other cases, Investments, and in
neither case constitute Indebtedness.
"INDEMNITEE" has the meaning assigned to that term in subsection
10.3.
"INTELLECTUAL PROPERTY" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes used in or necessary for
the conduct of the business of the Borrowers and their respective
Subsidiaries as currently conducted that are material to the condition
(financial or otherwise), business or operations of the Borrowers and
their respective Subsidiaries, taken as a whole.
"INTEREST PAYMENT DATE" means (i) with respect to any Base
Rate Loan, the last Business Day in each of March, June, September and
December of each year, commencing on the first such day to occur after
the Closing Date, and (ii) with respect to any Eurodollar Rate Loan,
the last day of each Interest Period applicable to such Loan; provided
that in the case of each Interest Period of longer than three months
"Interest Payment Date" shall also include the date that is three
months after the commencement of such Interest Period.
"INTEREST PERIOD" has the meaning assigned to that
term in subsection 2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement to which any Borrower or any of its
respective Subsidiaries is a party.
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<PAGE> 23
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the second Business Day prior to the first day of such
Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986,
as amended to the date hereof and from time to time hereafter, and any
successor statute.
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by any Borrower or any of its respective Subsidiaries of, or
of a beneficial interest in, any Securities of any other Person other
than a Person that prior to such purchase or acquisition was, or as a
result of such purchase or acquisition becomes, a wholly-owned Subsidiary
of any Borrower, (ii) any direct or indirect redemption, retirement,
purchase or other acquisition for value, by any Subsidiary of any
Borrower from any Person other than any Borrower or any of its respective
Subsidiaries, of any equity Securities of such Subsidiary, (iii) any
direct or indirect loan, advance (other than advances to employees for
moving, entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution
by any Borrower or any of its respective Subsidiaries to any other Person
other than a wholly-owned Subsidiary of any Borrower, including all
indebtedness and accounts receivable from that other Person that are not
current assets or did not arise from sales to that other Person in the
ordinary course of business, and (iv) Interest Rate Agreements or
Currency Agreements not constituting Hedge Agreements. The amount of any
Investment shall be the original cost of such Investment plus the cost of
all additions thereto, without any adjustments for increases or decreases
in value, or write-ups, write-downs or write-offs with respect to such
Investment.
"ISSUING LENDER" means, with respect to any Letter of Credit, the
Lender which agrees or is otherwise obligated to issue such Letter of
Credit, determined as provided in subsection 3.1B(ii).
"JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal
form; provided that in no event shall any corporate Subsidiary of any
Person be considered to be a Joint Venture to which such Person is a
party.
"LENDER" and "THE LENDERS" means the persons identified as "the
Lenders" and listed on the signature pages of this Agreement, together
with their successors and permitted assigns pursuant to subsection 10.1,
and the term "Lenders" shall include the Swing Line Lender and the
Canadian Lender unless the context otherwise requires.
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means Commercial Letters
of Credit and Standby Letters of Credit (including Existing Letters of
Credit) issued or to be
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<PAGE> 24
issued by the Issuing Lenders for the account of the Company pursuant to
subsection 3.1.
"LETTER OF CREDIT USAGE" means, as at any date of determination,
the sum of (i) the maximum aggregate amount which is or at any time
thereafter may become available for drawing under all Letters of Credit
then outstanding plus (ii) the aggregate amount of all drawings under
Letters of Credit honored by the Issuing Lenders and not theretofore
reimbursed by the Company (including any such reimbursement out of the
proceeds of Loans pursuant to subsection 3.3B).
"LEVERAGE RATIO" has the meaning set forth in subsec- tion 7.6C.
"LEVERAGE RATIO AMOUNT" means, as of the last day of any
consecutive four-period quarter, an amount equal to the quotient of (i)
Consolidated Total Debt as of such date of determination divided by (ii)
Consolidated Adjusted EBITDA for the four-quarter period ended on such
date of determination, as set forth in the financial statements required
to be delivered pursuant to subsection 6.1(i).
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature thereof,
and any agreement to give any security interest) and any option, trust or
other preferential arrangement having the practical effect of any of the
foregoing.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Letters of
Credit (and any applications for, or reimbursement agreements or other
documents or certificates executed by the Company in favor of an Issuing
Lender relating to, the Letters of Credit) and the Guaranties.
"LOAN EXPOSURE" means, with respect to any Lender as of any date
of determination (i) prior to the termination of the Revolving Loan
Commitments, that Lender's Revolving Loan Commitment and (ii) after the
termination of the Revolving Loan Commitments, the sum of (a) the
aggregate outstanding principal amount of the Revolving Loans of that
Lender plus (b) in the event that Lender is an Issuing Lender, the
aggregate Letter of Credit Usage in respect of all Letters of Credit
issued by that Lender (in each case net of any participations purchased
by other the Lenders in such Letters of Credit or any unreimbursed
drawings thereunder) plus (c) the aggregate amount of all participations
purchased by that Lender in any outstanding Letters of Credit or any
drawings under Letters of Credit honored by the Issuing Lenders and not
theretofore reimbursed by the Borrowers plus (d) in the case of the Swing
Line Lender, the aggregate outstanding principal amount of all Swing Line
Loans (net of any participations therein purchased by other Lenders) plus
(e) the aggregate amount of all participations purchased by that Lender
in any outstanding Swing Line Loans plus (f) the aggregate amount of all
participations purchased by that Lender in any outstanding Swing Line
Loans plus (g) in the case
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<PAGE> 25
of the Canadian Lender, the aggregate outstanding principal amount of all
Canadian Loans (net of any participations therein purchased by other
Lenders) plus (h) the aggregate amount of all participations purchased by
that Lender in any outstanding Canadian Loans.
"LOAN PARTIES" means, collectively, the Company, Wolverine Canada,
the Subsidiary Guarantors and any other Material Subsidiary of the
Company which is or becomes a party to a Loan Document.
"LOAN" or "LOANS" means one or more of the Revolving Loans or
Swing Line Loans made by the Lenders to the Company pursuant to
subsections 2.1A (i) and (ii) and one or more of the Canadian Loans made
by the Canadian Lender to Wolverine Canada pursuant to subsection
2.1A(iii).
"MARGIN STOCK" has the meaning assigned to that term in Regulation
U of the Board of Governors of the Federal Reserve System as in effect
from time to time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect upon
the business, operations, properties, assets, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries taken as a
whole or (ii) the impairment of the ability of either Borrower to
perform, or of the Administrative Agent or the Lenders to enforce, the
Obligations.
"MATERIAL CONTRACT" means any contract or other arrangement to
which any Borrower or any of its respective Subsidiaries is a party
(other than the Loan Documents) for which breach, nonperformance,
cancellation or failure to renew could reasonably be expected to have a
Material Adverse Effect.
"MATERIAL SUBSIDIARY" means each Subsidiary of the Borrowers now
existing or hereafter acquired by any Borrower or any other Subsidiary of
any Borrower which, on a consolidated basis for such Subsidiary and its
Subsidiaries, (i) for the most recent Fiscal Year accounted for more than
5% of the consolidated revenues of the Company and its Subsidiaries or
(ii) as at the end of such Fiscal Year, was the owner of more than 5% of
the consolidated assets of the Borrowers and their respective
Subsidiaries; provided that, for purposes of subsection 6.8A only, the
term "Material Subsidiary" shall not include 1105836 Ontario, Inc., an
Ontario corporation, Wolverine Canada, or any of their respective
subsidiaries.
"MATURITY DATE" means April 30, 2002.
"MOODY'S" means Moody's Investors Service, a corporation organized
and existing under the laws of the State of Delaware, and its successors
and assigns, if such successors and assigns shall continue to perform the
functions of a securities rating agency.
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<PAGE> 26
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset Sale,
Cash payments (including any Cash received by way of deferred payment
pursuant to, or by monetization of, a note receivable or otherwise, but
only as and when so received) received from such Asset Sale, net of any
bona fide direct costs incurred in connection with such Asset Sale,
including (i) income taxes reasonably estimated to be actually payable
within two years of the date of such Asset Sale as a result of any gain
recognized in connection with such Asset Sale and (ii) payment of the
outstanding principal amount of, premium or penalty, if any, and interest
on any Indebtedness (other than the Loans) that is secured by a Lien on
the stock or assets in question and that is required to be repaid under
the terms thereof as a result of such Asset Sale.
"NET INSURANCE/CONDEMNATION PROCEEDS" means any Cash payments or
proceeds received by any Borrower or any of its respective Subsidiaries
(i) under any business interruption or casualty insurance policy in
respect of a covered loss thereunder or (ii) as a result of the taking of
any assets of any Borrower or any of its respective Subsidiaries by any
Person pursuant to the power of eminent domain, condemnation or
otherwise, or pursuant to a sale of any such assets to a purchaser with
such power under threat of such a taking, in each case net of any actual
and reasonable documented costs incurred by any Borrower or any of its
respective Subsidiaries in connection with the adjustment or settlement
of any claims of such Borrower or such Subsidiary in respect thereof.
"NET SECURITIES PROCEEDS" has the meaning assigned to that term in
subsection 2.4A(iii)(c).
"NOTES" means one or more of the Revolving Notes, the Canadian
Note or the Swing Line Note, or any combination thereof.
"NOTICE OF BORROWING" means a notice substantially in the form of
Exhibit I annexed hereto delivered by a Borrower to the Administrative
Agent pursuant to subsection 2.1B with respect to a proposed borrowing.
"NOTICE OF CONVERSION/CONTINUATION" means a notice substantially
in the form of Exhibit II annexed hereto delivered by the Company to the
Administrative Agent pursuant to subsection 2.2D with respect to a
proposed conversion or continuation of the applicable basis for
determining the interest rate with respect to the Revolving Loans
specified therein.
"NOTICE OF ISSUANCE OF LETTER OF CREDIT" means a notice
substantially in the form of Exhibit III annexed hereto delivered by the
Company to the Administrative
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<PAGE> 27
Agent pursuant to subsection 3.1B(i) with respect to the proposed
issuance of a Letter of Credit.
"OBLIGATIONS" means all obligations of every nature of the
Borrowers from time to time owed to the Administrative Agent, the Lenders
or any of them under the Loan Documents, whether for principal, interest,
reimbursement of amounts drawn under Letters of Credit, fees, expenses,
indemnification or otherwise.
"OFFICER'S CERTIFICATE" means, as applied to any corporation or
partnership, a certificate executed (i) on behalf of any such corporation
by its president, its chief executive officer or its chief financial
officer or (ii) on behalf of any such partnership by its general partner;
provided that every Officer's Certificate with respect to the compliance
with a condition precedent to the making of any Loans hereunder shall
include (a) a statement that the officer or officers or general partner
making or giving such Officer's Certificate have read such condition and
any definitions or other provisions contained in this Agreement relating
thereto, (b) a statement that, in the opinion of the signers, they have
made or have caused to be made such examination or investigation as is
necessary to enable them to express an informed opinion as to whether or
not such condition has been complied with, and (iii) a statement as to
whether, in the opinion of the signers, such condition has been complied
with.
"OPERATING LEASE" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of
any property (whether real, personal or mixed) that is not a Capital
Lease other than any such lease under which that Person is the lessor.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal
Revenue Code or Section 302 of ERISA.
"PERMITTED ACQUISITION DOCUMENTS" means the material agreements
pursuant to which any Permitted Acquisition is consummated.
"PERMITTED ACQUISITIONS" means those acquisitions permitted under
subsection 7.7(vi).
"PERMITTED ENCUMBRANCES" means the following types of Liens
(excluding any such Lien imposed pursuant to Section 401(a)(29) or 412(n)
of the Internal Revenue Code or by ERISA and any such Lien relating to or
imposed in connection with any Environmental Claim):
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(i) Liens for taxes, assessments or governmental charges
or claims the payment of which is not, at the time, required by
subsection 6.3;
(ii) statutory Liens of landlords, statutory Liens of
banks and rights of set-off, statutory Liens of carriers,
warehousemen, mechanics, repairmen, workmen and materialmen, and
other Liens imposed by law, in each case incurred in the ordinary
course of business (a) for amounts not yet overdue or (b) for
amounts that are overdue and that (in the case of any such amounts
overdue for a period in excess of 5 days) are being contested in
good faith by appropriate proceedings, so long as such reserves or
other appropriate provisions, if any, as shall be required by GAAP
shall have been made for any such contested amounts;
(iii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to
secure the performance of tenders, statutory obligations, surety
and appeal bonds, bids, leases, government contracts, trade
contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed
money);
(iv) any attachment or judgment Lien not constituting an
Event of Default under subsection 8.8;
(v) leases or subleases granted to third parties and not
interfering in any material respect with the ordinary conduct of
the business of any Borrower or any of its respective
Subsidiaries;
(vi) easements, rights-of-way, restrictions,
encroachments, and other minor defects or irregularities in title,
in each case which do not and will not interfere in any material
respect with the ordinary conduct of the business of any Borrower
or any of its respective Subsidiaries;
(vii) any (a) interest or title of a lessor or sublessor
under any lease, (b) restriction or encumbrance that the interest
or title of such lessor or sublessor may be subject to, or (c)
subordination of the interest of the lessee or sublessee under
such lease to any restriction or encumbrance referred to in the
preceding clause (b), so long as the holder of such restriction or
encumbrance agrees to recognize the rights of such lessee or
sublessee under such lease;
(viii) Liens arising from filing UCC financing statements
relating solely to leases permitted by this Agreement;
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(ix) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods;
(x) any zoning or similar law or right reserved to or
vested in any governmental office or agency to control or regulate
the use of any real property; and
(xi) licenses of patents, trademarks and other intellectual
property rights granted by any Borrower or any of its respective
Subsidiaries in the ordinary course of business and not
interfering in any material respect with the ordinary conduct of
the business of such Borrower or such Subsidiary.
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures,
associations, companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal entities,
and governments (whether federal, state or local, domestic or foreign,
and including political subdivisions thereof) and agencies or other
administrative or regulatory bodies thereof.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of
Default.
"PRIME RATE" means the rate that CSFB announces from time to time
as its prime lending rate, as in effect from time to time. The Prime Rate
is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer. CSFB or any other Lender may make
commercial loans or other loans at rates of interest at, above or below
the Prime Rate.
"PRO RATA SHARE" means, with respect to each Lender, the
percentage obtained by dividing (i) the Loan Exposure of that Lender by
(ii) the aggregate Loan Exposure of all the Lenders, as such percentage
may be adjusted by assignments permitted pursuant to subsection 10.1. The
initial Pro Rata Share of each Lender is set forth opposite the name of
that Lender in Schedule 2.1 annexed hereto.
"REFERENCE LENDERS" means CSFB and Mellon Bank, N.A..
"REFUNDED CANADIAN LOANS" has the meaning assigned to that term in
subsection 2.1A(iii).
"REFUNDED SWING LINE LOANS" has the meaning assigned to that term
in subsection 2.1A(ii).
"REGISTER" has the meaning assigned to that term in subsection
2.1D.
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"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT DATE" has the meaning assigned to that term in
subsection 3.3B.
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or
outdoor environment (including the abandonment or disposal of any
barrels, containers or other closed receptacles containing any Hazardous
Materials), including the movement of any Hazardous Materials through the
air, soil, surface water or groundwater.
"REQUISITE LENDERS" means Lenders having or holding 51% or more of
the aggregate Loan Exposure of all the Lenders.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class
of stock of the Company now or hereafter outstanding, except a dividend
payable solely in shares of that class of stock to the holders of that
class, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any
shares of any class of stock of the Company now or hereafter outstanding,
(iii) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any
class of stock of the Company now or hereafter outstanding, and (iv) any
payment or prepayment of principal of, premium, if any, or interest on,
or redemption, purchase, retirement, defeasance (including in-substance
or legal defeasance), sinking fund or similar payment with respect to,
any Subordinated Indebtedness.
"REVOLVING LOAN COMMITMENTS" means the commitments of Lenders to
make Revolving Loans to the Company pursuant to subsection 2.1A(i).
"REVOLVING LOANS" means the Loans Lenders have agreed to maintain
or make to the Company pursuant to subsection 2.1A(i).
"REVOLVING NOTES" means (i) the promissory notes of the Company
issued pursuant to subsection 2.1E on the Closing Date and (ii) any
promissory notes issued by the Company pursuant to the last sentence of
subsection 10.1B(i) in connection with assignments of the Revolving Loan
Commitments and Revolving Loans of the Lenders, in each case
substantially in the form of Exhibit IV annexed hereto, as they may be
amended, supplemented or otherwise modified from time to time.
"SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in
any profit-sharing agreement or arrangement, options, warrants, bonds,
debentures, notes, or other evidences of
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indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as "securities"
or any certificates of interest, shares or participations in temporary or
interim certificates for the purchase or acquisition of, or any right to
subscribe to, purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"SENIOR SUBORDINATED NOTES" means the 10.125% of the Senior
Subordinated Notes, issued by the Company pursuant to that certain
Indenture dated as of September 1, 1992, with a final maturity date of
September 1, 2002.
"SMALL TUBE CORP." means Small Tube Manufacturing Corp., a
Delaware corporation and wholly-owned Subsidiary of the Company.
"SOLVENT" means, with respect to any Person, that as of the date
of determination both (A) (i) the then fair saleable value of the
property of such Person is (y) greater than the total amount of
liabilities (including contingent liabilities) of such Person and (z) not
less than the amount that will be required to pay the probable
liabilities on such Person's then existing debts as they become absolute
and matured considering all financing alternatives and potential asset
sales reasonably available to such Person; (ii) such Person's capital is
not unreasonably small in relation to its business or any contemplated or
undertaken transaction; and (iii) such Person does not intend to incur,
or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (B) such
Person is "solvent" within the meaning given that term and similar terms
under applicable laws relating to fraudulent transfers and conveyances.
For purposes of this definition, the amount of any contingent liability
at any time shall be computed as the amount that, in light of all of the
facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, a New York corporation, and its successors and
assigns, if such successors and assigns shall continue to perform the
functions of a securities rating agency.
"STANDBY LETTER OF CREDIT" means any standby letter of credit or
similar instrument issued for the purpose of supporting (i) IDB
Indebtedness, (ii) workers' compensation liabilities of the Company or
any of its Subsidiaries, (iii) the obligations of third party insurers of
the Company or any of its Subsidiaries arising by virtue of the laws of
any jurisdiction requiring third party insurers, (iv) obligations with
respect to Capital Leases or Operating Leases of the Company or any of
its Subsidiaries, and (v) performance, payment, deposit or surety
obligations of the Company or any of its Subsidiaries, in any case if
required by law or governmental rule or regulation or in accordance with
custom and practice in the industry; provided
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that Standby Letters of Credit may not be issued for the purpose of
supporting (a) trade payables or (b) any Indebtedness constituting
"antecedent debt" (as that term is used in Section 547 of the Bankruptcy
Code).
"SUBORDINATED INDEBTEDNESS" means Indebtedness of any Loan Party
subordinated in right of payment to the Obligations pursuant to
documentation containing maturities, amortization schedules, covenants,
defaults, remedies, subordination provisions and other material terms in
form and substance satisfactory to the Administrative Agent and the
Requisite Lenders.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or
other business entity of which more than 50% of the total voting power of
shares of stock or other ownership interests entitled (without regard to
the occurrence of any contingency) to vote in the election of the Person
or Persons (whether directors, managers, trustees or other Persons
performing similar functions) having the power to direct or cause the
direction of the management and policies thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the
other Subsidiaries of that Person or a combination thereof.
"SUBSIDIARY GUARANTOR" means Tube LP, Small Tube Corp. and any
Material Subsidiary of the Company that executes and delivers a
counterpart of the Subsidiary Guaranty on the Closing Date or from time
to time thereafter pursuant to subsection 6.8.
"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty executed and
delivered by the Subsidiary Guarantors on the Closing Date and to be
executed and delivered by additional Subsidiary Guarantors from time to
time thereafter in accordance with subsection 6.8, substantially in the
form of Exhibit XII annexed hereto, as such Subsidiary Guaranty may
hereafter be amended, supplemented or otherwise modified from time to
time.
"SWING LINE LENDER" means Mellon Bank, N.A., or any Person serving
as a successor Swing Line Lender hereunder.
"SWING LINE LOAN COMMITMENT" means the commitment of the Swing
Line Lender to make Swing Line Loans to the Company pursuant to
subsection 2.1A(ii).
"SWING LINE LOANS" means the Loans made by the Swing Line Lender
to the Company pursuant to subsection 2.1A(ii).
"SWING LINE NOTE" means (i) the promissory note of the Company
issued pursuant to subsection 2.1E on the Closing Date and (ii) any
promissory note issued by the Company to any successor Swing Line Lender
pursuant to the last sentence of subsection 9.5B, in each case
substantially in the form of Exhibit V annexed
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hereto, as it may be amended, supplemented or otherwise modified from
time to time.
"SWING LINE RATE" means the rate that Mellon Bank, N.A.
establishes from time to time for borrowings under its automatic
borrowing service; provided that in no event shall the Swing Line Rate on
any date be lower than the sum of the Adjusted Eurodollar Rate applicable
to a Eurodollar Rate Loan with an Interest Period of one month plus the
Applicable Margin on such date.
"TAX" or "TAXES" means any present or future tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied,
collected, withheld or assessed; provided that "TAX ON THE OVERALL NET
INCOME" of a Person shall be construed as a reference to a tax imposed by
the jurisdiction in which that Person is organized or in which that
Person's principal office (and/or, in the case of a Lender, its lending
office) is located or in which that Person (and/or, in the case of a
Lender, its lending office) is deemed to be doing business on all or part
of the net income, profits or gains (whether worldwide, or only insofar
as such income, profits or gains are considered to arise in or to relate
to a particular jurisdiction, or otherwise) of that Person (and/or, in
the case of a Lender, its lending office).
"TENDER OFFER" means the tender offer made by the Company dated
March 25, 1997 with respect to the Senior Subordinated Notes.
"TOTAL UTILIZATION" means, as at any date of determination, the
sum of (i) the Total Utilization of Canadian Loan Commitments plus (ii)
the Total Utilization of Revolving Loan Commitments.
"TOTAL UTILIZATION OF CANADIAN LOAN COMMITMENTS" means, as at any
date of determination, the aggregate principal amount of all outstanding
Canadian Loans.
"TOTAL UTILIZATION OF REVOLVING LOAN COMMITMENTS" means, as at any
date of determination, the sum of (i) the aggregate principal amount of
all outstanding Revolving Loans (other than Revolving Loans made for the
purpose of repaying any Refunded Swing Line Loans or repaying any
Refunded Canadian Loans or reimbursing the applicable Issuing Lender for
any amount drawn under any Letter of Credit but not yet so applied) plus
(ii) the aggregate principal amount of all outstanding Swing Line Loans
plus (iii) the aggregate principal amount of all outstanding Canadian
Loans plus (iv) the Letter of Credit Usage.
"TUBE LP" means Tube Forming, L.P., a Delaware limited partnership
and wholly-owned Subsidiary of the Company.
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1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCU- LATIONS
UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings
assigned to them in conformity with GAAP. Financial statements and other
information required to be delivered by the Borrowers to the Lenders
pursuant to clauses (i), (ii) and (xii) of subsection 6.1 shall be
prepared in accordance with GAAP as in effect at the time of such
preparation (and delivered together with the reconciliation statements
provided for in subsection 6.1(iv)). Calculations in connection with the
definitions, covenants and other provisions of this Agreement shall
utilize accounting principles and policies in conformity with those used
to prepare the financial statements referred to in subsection 5.3.
1.3 OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
A. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
B. References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.
C. Whenever the context so requires, the neuter gender includes the
masculine or feminine.
D. The words "herein", "hereinabove", "hereinbelow", "hereof",
"hereunder", and words of similar import, when used in a Loan Document, shall
Irefer to such Loan Document as a whole.
E. The use in any of the Loan Documents of the word "include" or
"including", when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; THE REGISTER; NOTES.
A. COMMITMENTS. Subject to the terms and conditions of this Agreement and
in reliance upon the representations and warranties of the Borrowers herein set
forth, each Lender hereby severally agrees to make the Loans described in
subsection 2.1A(i), the Swing
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Line Lender hereby agrees to make the Loans described in subsection 2.1A(ii) and
the Canadian Lender hereby agrees to make the Loans described in subsection
2.1A(iii).
(i) Revolving Loans. Each Lender severally agrees, subject to the
limitations set forth below with respect to the maximum amount of
Revolving Loans permitted to be outstanding from time to time, to lend to
the Company from time to time during the period from the Closing Date to
but excluding the Maturity Date an aggregate amount not exceeding its Pro
Rata Share of the aggregate amount of the Revolving Loan Commitments to
be used for the purposes identified in subsection 2.5A(i). The original
amount of each Lender's Revolving Loan Commitment is set forth opposite
its name on Schedule 2.1 annexed hereto and the aggregate original amount
of the Revolving Loan Commitments is $200,000,000; provided that the
Revolving Loan Commitments of Lenders shall be adjusted to give effect to
any assignments of the Revolving Loan Commitments pursuant to subsection
10.1B; and provided, further that the amount of the Revolving Loan
Commitments shall be reduced from time to time by the amount of any
reductions thereto made pursuant to subsections 2.4A(ii) and 2.4A(iii).
Each Lender's Revolving Loan Commitment shall expire on the Maturity Date
and all Revolving Loans and all other amounts owed hereunder with respect
to the Revolving Loans and the Revolving Loan Commitments shall be paid
in full no later than that date; provided that each Lender's Revolving
Loan Commitment shall expire immediately and without further action on
May 31, 1997 if the initial extension of credit hereunder is not made on
or before that date. Amounts borrowed under this subsection 2.1A(i) may
be repaid and reborrowed to but excluding the Maturity Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Revolving Loans and the Revolving Loan Commitments
shall be subject to the limitation that in no event shall the Total
Utilization at any time exceed the Revolving Loan Commitments then in
effect.
(ii) Swing Line Loans. The Swing Line Lender hereby agrees,
subject to the limitations set forth below with respect to the maximum
amount of Swing Line Loans permitted to be outstanding from time to time,
to make a portion of the Revolving Loan Commitments available to the
Company from time to time during the period from the Closing Date to but
excluding the Maturity Date by making Swing Line Loans to the Company in
an aggregate amount not exceeding the amount of the Swing Line Loan
Commitment to be used for the purposes identified in subsection 2.5A(i),
notwithstanding the fact that such Swing Line Loans, when aggregated with
the Swing Line Lender's outstanding Revolving Loans and the Swing Line
Lender's Pro Rata Share of the Letter of Credit Usage then in effect, may
exceed the Swing Line Lender's Revolving Loan Commitment. All Swing Line
Loans outstanding under the Existing Credit Agreement as of the Closing
Date shall be deemed outstanding Swing Line Loans under this Agreement
for all purposes of the Loan Documents. The original amount of the Swing
Line Loan Commitment is $15,000,000; provided that any reduction of the
Revolving Loan Commitments made
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pursuant to subsection 2.4A(ii) or 2.4A(iii) which reduces the aggregate
Revolving Loan Commitments to an amount less than the then current amount
of the Swing Line Loan Commitment shall result in an automatic
corresponding reduction of the Swing Line Loan Commitment to the amount
of the Revolving Loan Commitments, as so reduced, without any further
action on the part of the Company, the Administrative Agent or the Swing
Line Lender. The Swing Line Loan Commitment shall expire on the Maturity
Date and all Swing Line Loans and all other amounts owed hereunder with
respect to the Swing Line Loans shall be paid in full no later than that
date; provided that the Swing Line Loan Commitment shall expire
immediately and without further action on May 31, 1997 if the initial
extension of credit hereunder is not made on or before that date. Amounts
borrowed under this subsection 2.1A(ii) may be repaid and reborrowed to
but excluding the Maturity Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Swing Line Loans and the Swing Line Loan Commitment
shall be subject to the limitation that in no event shall (a) the
aggregate principal amount of outstanding Swing Line Loans exceed the
aggregate amount of the Swing Line Loan Commitment then in effect or (b)
the Total Utilization at any time exceed the Revolving Loan Commitments
then in effect.
With respect to any Swing Line Loans, the Swing Line Lender may,
at any time in its sole and absolute discretion, deliver to the
Administrative Agent (with a copy to the Company), no later than 10:00
A.M. (New York City time) on the first Business Day in advance of the
proposed Funding Date, a notice (which shall be deemed to be a Notice of
Borrowing given by the Company) requesting the Lenders to make Revolving
Loans that are Base Rate Loans on such Funding Date in an amount equal to
the amount of such Swing Line Loans (the "REFUNDED SWING LINE LOANS")
outstanding on the date such notice is given which the Swing Line Lender
requests the Lenders to prepay. Anything contained in this Agreement to
the contrary notwithstanding, (i) the proceeds of such Revolving Loans
made by Lenders other than the Swing Line Lender shall be immediately
delivered by the Administrative Agent to the Swing Line Lender (and not
to the Company) and applied to repay a corresponding portion of the
Refunded Swing Line Loans and (ii) on the day such Revolving Loans are
made, the Swing Line Lender's Pro Rata Share of the Refunded Swing Line
Loans shall be deemed to be paid with the proceeds of a Revolving Loan
made by the Swing Line Lender, and such portion of the Swing Line Loans
deemed to be so paid shall no longer be outstanding as Swing Line Loans
and shall no longer be due under the Swing Line Note of the Swing Line
Lender but shall instead constitute part of the Swing Line Lender's
outstanding Revolving Loans and shall be due under the Revolving Note of
the Swing Line Lender. The Company hereby authorizes the Administrative
Agent and the Swing Line Lender to charge the Company's accounts with the
Administrative Agent and the Swing Line Lender (up to the amount
available in each such account) in order to immediately pay the Swing
Line Lender the amount of the Refunded Swing Line Loans to the extent the
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proceeds of such Revolving Loans made by the Lenders, including the
Revolving Loan deemed to be made by the Swing Line Lender, are not
sufficient to repay in full the Refunded Swing Line Loans. If any portion
of any such amount paid (or deemed to be paid) to the Swing Line Lender
should be recovered by or on behalf of the Company from the Swing Line
Lender in bankruptcy, by assignment for the benefit of creditors or
otherwise, the loss of the amount so recovered shall be ratably shared
among all the Lenders in the manner contemplated by subsection 10.5.
If for any reason (a) Revolving Loans are not made upon the
request of the Swing Line Lender as provided in the immediately preceding
paragraph in an amount sufficient to repay any amounts owed to the Swing
Line Lender in respect of any outstanding Swing Line Loans or (b) the
Revolving Loan Commitments are terminated at a time when any Swing Line
Loans are outstanding, each Lender shall be deemed to, and hereby agrees
to, have purchased a participation in such outstanding Swing Line Loans
in an amount equal to its Pro Rata Share (calculated, in the case of the
foregoing clause (b), immediately prior to such termination of the
Revolving Loan Commitments) of the unpaid amount of such Swing Line Loans
together with accrued interest thereon. Upon one Business Day's notice
from the Swing Line Lender, each Lender shall deliver to the Swing Line
Lender an amount equal to its respective participation in same day funds
at the Funding and Payment Office. In order to further evidence such
participation (and without prejudice to the effectiveness of the
participation provisions set forth above), each Lender agrees to enter
into a separate participation agreement at the request of the Swing Line
Lender in form and substance reasonably satisfactory to the Swing Line
Lender. In the event any Lender fails to make available to the Swing Line
Lender the amount of such Lender's participation as provided in this
paragraph, the Swing Line Lender shall be entitled to recover such amount
on demand from such Lender together with interest thereon at the Federal
Funds Effective Rate for three Business Days and thereafter at the Base
Rate. In the event that the Swing Line Lender receives a payment of any
amount in which other Lenders have purchased participations as provided
in this paragraph, the Swing Line Lender shall promptly distribute to
each such other Lender its Pro Rata Share of such payment.
Anything contained herein to the contrary notwithstanding, each
Lender's obligation to make Revolving Loans for the purpose of repaying
any Refunded Swing Line Loans pursuant to the second preceding paragraph
and each Lender's obligation to purchase a participation in any unpaid
Swing Line Loans pursuant to the immediately preceding paragraph shall be
absolute and unconditional and shall not be affected by any circumstance,
including (a) any set-off, counterclaim, recoupment, defense or other
right which such Lender may have against the Swing Line Lender, the
Borrowers or any other Person for any reason whatsoever; (b) the
occurrence or continuation of an Event of Default or a Potential Event of
Default; (c) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of the Borrowers
or any of their respective Subsidiaries; (d) any breach of this Agreement
or any other Loan Document by any party thereto;
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or (e) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing; provided that such obligations of
each Lender are subject to the condition that (X) the Swing Line Lender
believed in good faith that all conditions under Section 4 to the making
of the applicable Refunded Swing Line Loans or other unpaid Swing Line
Loans, as the case may be, were satisfied at the time such Refunded Swing
Line Loans or unpaid Swing Line Loans were made or (Y) the satisfaction
of any such condition not satisfied had been waived in accordance with
subsection 10.6 prior to or at the time such Refunded Swing Line Loans or
other unpaid Swing Line Loans were made.
(iii) Canadian Loans. The Canadian Lender hereby agrees, subject
to the limitations set forth below with respect to the maximum amount of
Canadian Loans permitted to be outstanding from time to time, to make a
portion of the Revolving Loan Commitments available to Wolverine Canada
from time to time during the period from the Closing Date to but
excluding the Maturity Date by making Canadian Loans to Wolverine Canada
in an aggregate amount not exceeding the amount of the Canadian Loan
Commitment to be used for the purposes identified in subsection 2.5A(ii),
notwithstanding the fact that such Canadian Loans, when aggregated with
the Canadian Lender's outstanding Revolving Loans and the Canadian
Lender's Pro Rata Share of the Letter of Credit Usage then in effect, may
exceed the Canadian Lender's Revolving Loan Commitment. The original
amount of the Canadian Loan Commitment is $20,000,000; provided that any
reduction of the Revolving Loan Commitments made pursuant to subsection
2.4A(ii) or 2.4A(iii) which reduces the aggregate Revolving Loan
Commitments to an amount less than the then current amount of the
Canadian Loan Commitment shall result in an automatic corresponding
reduction of the Canadian Loan Commitment to the amount of the Revolving
Loan Commitments, as so reduced, without any further action on the part
of the Borrowers, the Administrative Agent or the Canadian Lender. The
Canadian Loan Commitment shall expire on the Maturity Date and all
Canadian Loans and all other amounts owed hereunder with respect to the
Canadian Loans shall be paid in full no later than that date; provided
that the Canadian Loan Commitment shall expire immediately and without
further action on May 31, 1997 if the initial extension of credit under
this Agreement is not made on or before that date. Amounts borrowed under
this subsection 2.1A(iii) may be repaid and reborrowed to but excluding
the Maturity Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Canadian Loans and the Canadian Loan Commitment
shall be subject to the limitation that in no event shall (a) the
aggregate principal amount of outstanding Canadian Loans exceed the
aggregate amount of the Canadian Loan Commitment then in effect or (b)
the Total Utilization at any time exceed the Revolving Loan Commitments
then in effect.
All Canadian Loans shall be made in Canadian Dollars and shall be
repaid in Canadian Dollars; provided that, for purposes of calculating
Total Utilization and
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the availability of the Canadian Loan Commitment, each Canadian Dollar
shall be deemed to equal one Dollar.
With respect to any Canadian Loans which have not been voluntarily
prepaid by Wolverine Canada pursuant to subsection 2.4A(i), the Canadian
Lender may, at any time during the continuance of an Event of Default or
Potential Event of Default, in its sole and absolute discretion, deliver
to the Administrative Agent (with a copy to the Borrowers), no later than
10:00 A.M. (New York City time) on the first Business Day in advance of
the proposed Funding Date, a notice (which shall be deemed to be a Notice
of Borrowing given by the Company) requesting the Lenders to make
Revolving Loans to the Company that are Base Rate Loans on such Funding
Date in an amount equal to the Dollar equivalent (calculated by the
Administrative Agent at the spot rate on such date) of the amount of such
Canadian Loans (the "REFUNDED CANADIAN LOANS") outstanding on the date
such notice is given which the Canadian Lender requests the Lenders to
prepay. Anything contained in this Agreement to the contrary
notwithstanding, (i) the proceeds of such Revolving Loans made by the
Lenders other than the Canadian Lender shall be exchanged (at no separate
cost to the Borrowers) into Canadian Dollars at the spot rate on such
date and shall be immediately delivered by the Administrative Agent to
the Canadian Lender (and not to the Company) and applied to repay a
corresponding portion of the Refunded Canadian Loans and (ii) on the day
such Revolving Loans are made, the Canadian Lender's Pro Rata Share of
the Refunded Canadian Loans shall be deemed to be paid with the proceeds
of a Revolving Loan made by the Canadian Lender, and such portion of the
Canadian Loans deemed to be so paid shall no longer be outstanding as
Canadian Loans and shall no longer be due under the Canadian Note of the
Canadian Lender but shall instead constitute part of the Canadian
Lender's outstanding Revolving Loans and shall be due under the Revolving
Note of the Canadian Lender. The Company hereby authorizes the
Administrative Agent and the Canadian Lender to charge the Company's
accounts with the Administrative Agent and the Canadian Lender (up to the
amount available in each such account) in order to immediately pay the
Canadian Lender the amount of the Refunded Canadian Loans to the extent
the proceeds of such Revolving Loans made by the Lenders, including the
Revolving Loan deemed to be made by the Canadian Lender, are not
sufficient to repay in full the Refunded Canadian Loans. If any portion
of any such amount paid (or deemed to be paid) to the Canadian Lender
should be recovered by or on behalf of the Borrowers from the Canadian
Lender in bankruptcy, by assignment for the benefit of creditors or
otherwise, the loss of the amount so recovered shall be ratably shared
among all the Lenders in the manner contemplated by subsection 10.5.
If for any reason (a) Revolving Loans are not made upon the
request of the Canadian Lender as provided in the immediately preceding
paragraph in an amount sufficient to repay any amounts owed to the
Canadian Lender in respect of any outstanding Canadian Loans or (b) the
Revolving Loan Commitments are terminated at a time when any Canadian
Loans are outstanding, each Lender shall be deemed
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to, and hereby agrees to, have purchased a participation in such
outstanding Canadian Loans in an amount equal to the Dollar equivalent
(calculated by the Administrative Agent at the spot rate on such date) of
its Pro Rata Share (calculated, in the case of the foregoing clause (b),
immediately prior to such termination of the Revolving Loan Commitments)
of the unpaid amount of such Canadian Loans together with accrued
interest thereon. Upon one Business Day's notice from the Canadian
Lender, each Lender shall deliver to the Canadian Lender an amount equal
to its respective participation in same day funds at the Funding and
Payment Office. In order to further evidence such participation (and
without prejudice to the effectiveness of the participation provisions
set forth above), each Lender agrees to enter into a separate
participation agreement at the request of the Canadian Lender in form and
substance reasonably satisfactory to the Canadian Lender. In the event
any Lender fails to make available to the Canadian Lender the amount of
such Lender's participation as provided in this paragraph, the Canadian
Lender shall be entitled to recover such amount on demand from such
Lender together with interest thereon at the Federal Funds Effective Rate
for three Business Days and thereafter at the Base Rate. Upon the
purchase of any participation in a Canadian Loan by a Lender in
accordance with the provisions of this paragraph, all amounts payable in
respect of such Canadian Loan shall be payable in Dollars and the
principal amount of such Canadian Loan shall be the Dollar equivalent
(calculated by the Administrative Agent at the spot rate on the date of
such purchase) of the principal amount (expressed in Canadian Dollars) of
such Canadian Loan. In the event the Canadian Lender receives a payment
of any amount in which other Lenders have purchased participations as
provided in this paragraph, the Canadian Lender shall promptly distribute
to each such other Lender its Pro Rata Share of such payment.
Anything contained herein to the contrary notwithstanding, each
Lender's obligation to make Revolving Loans for the purpose of repaying
any Refunded Canadian Loans pursuant to the second preceding paragraph
and each Lender's obligation to purchase a participation in any unpaid
Canadian Loans pursuant to the immediately preceding paragraph shall be
absolute and unconditional and shall not be affected by any circumstance,
including (a) any set-off, counterclaim, recoupment, defense or other
right which such Lender may have against the Canadian Lender, the Company
or any other Person for any reason whatsoever; (b) the occurrence or
continuation of an Event of Default or a Potential Event of Default; (c)
any adverse change in the business, operations, properties, assets,
condition (financial or otherwise) or prospects of the Company or any of
its Subsidiaries; (d) any breach of this Agreement or any other Loan
Document by any party thereto; or (e) any other circumstance, happening
or event whatsoever, whether or not similar to any of the foregoing;
provided that such obligations of each Lender are subject to the
condition that (X) the Canadian Lender believed in good faith that all
conditions under Section 4 to the making of the applicable Refunded
Canadian Loans or other unpaid Canadian Loans, as the case may be, were
satisfied at the time such Refunded Canadian Loans or unpaid Canadian
Loans were made or (Y) the satisfaction of any such condition not
satisfied had been waived in accordance with subsection 10.6 prior
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to or at the time such Refunded Canadian Loans or other unpaid Canadian
Loans were made.
B. BORROWING MECHANICS. Revolving Loans and Canadian Loans made on any
Funding Date (other than Revolving Loans made pursuant to a request by the Swing
Line Lender pursuant to subsection 2.1A(ii) for the purpose of repaying any
Refunded Swing Line Loans or Revolving Loans made pursuant to a request by the
Canadian Lender pursuant to subsection 2.1A(iii) for the purpose of repaying any
Refunded Canadian Loans or Revolving Loans made pursuant to subsection 3.3B for
the purpose of reimbursing any Issuing Lender for the amount of a drawing under
a Letter of Credit issued by it) shall be in an aggregate minimum amount of
$3,000,000 and integral multiples of $1,000,000 in excess of that amount. Swing
Line Loans made on any Funding Date shall be in an aggregate minimum amount of
$10,000 and integral multiples of $10,000 in excess of that amount. Whenever the
Company desires that the Lenders make Revolving Loans it shall deliver to the
Administrative Agent a Notice of Borrowing no later than 12:00 Noon (New York
City time) at least three Business Days in advance of the proposed Funding Date
(in the case of a Eurodollar Rate Loan) or at least one Business Day in advance
of the proposed Funding Date (in the case of a Base Rate Loan); provided that,
if the Notice of Borrowing is given by 11:00 A.M. (New York City time) on a
proposed Funding Date, the Notice of Borrowing for a Base Rate Loan may be given
on the proposed Funding Date. Whenever Wolverine Canada desires that the
Canadian Lender make Canadian Loans it shall deliver to the Canadian Lender
(with a copy to the Administrative Agent) a Notice of Borrowing no later than
12:00 Noon (New York City time) at least three Business Days in advance of the
proposed Funding Date (in the case of a Canadian Rate Loan) or at least one
Business Day in advance of the proposed Funding Date (in the case of a Base Rate
Loan); provided that, if the Notice of Borrowing is given by 11:00 A.M. (New
York City time) on a proposed Funding Date, the Notice of Borrowing for a Base
Rate Loan may be given on the proposed Funding Date. The Canadian Lender shall
give notice to the Administrative Agent no later than 10:00 A.M. (New York City
time) of the next Business Day or such other time as the Administrative Agent
and the Canadian Lender may agree, of the amount of such Canadian Loan.
The Company shall be deemed to have (y) requested that the Swing Line
Lender make a Swing Line Loan on each day that the Company has an overdraft in
its automatic borrowing service account with the Swing Line Lender, in an amount
equal to such overdraft, and (z) certified as of each Funding Date that no Event
of Default or Potential Event of Default shall have occurred and be continuing
and that each condition to a Loan set forth in subsection 4.2 is satisfied. The
Swing Line Lender shall give notice to the Administrative Agent no later than
10:00 A.M. (New York City time) of the next Business Day or such other time as
the Administrative Agent and the Swing Line Lender may agree of the amount of
such Swing Line Loan. Each Notice of Borrowing shall specify (i) the proposed
Funding Date (which shall be a Business Day), (ii) the amount and type of Loans
requested, (iii) in the case of any Loans made on the Closing Date, that such
Loans shall be Base Rate Loans, (iv) in the case of Revolving Loans not made on
the Closing Date (but subject to the provisions of subsection 2.2A), whether
such Loans shall be Base Rate Loans
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or Eurodollar Rate Loans (v) in the case of Canadian Loans not made on the
Closing Date (but subject to the provisions of subsection 2.2A), whether such
Loans shall be Base Rate Loans or Canadian Rate Loans and (vi) in the case of
any Revolving Loans requested to be made as Eurodollar Rate Loans, the initial
Interest Period requested therefor. Revolving Loans may be continued as or
converted into Base Rate Loans and Eurodollar Rate Loans in the manner provided
in subsection 2.2D. Canadian Loans may be continued as or converted into Base
Rate Loans and Canadian Rate Loans in the manner provided in subsection 2.2D. In
lieu of delivering the above-described Notice of Borrowing, the Borrowers may
give the Administrative Agent telephonic notice by the required time of any
proposed borrowing under this subsection 2.1B; provided that such notice shall
be promptly confirmed in writing by delivery of a Notice of Borrowing to the
Administrative Agent on or before the applicable Funding Date.
Neither the Administrative Agent nor any Lender shall incur any liability
to the Borrowers in acting upon any telephonic notice referred to above that the
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of the
Borrowers or for otherwise acting in good faith under this subsection 2.1B, and
upon funding of Loans by the Lenders in accordance with this Agreement pursuant
to any such telephonic notice the Borrowers shall have effected Loans hereunder.
The Borrowers shall notify the Administrative Agent prior to the funding
of any Loans in the event that any of the matters to which the Borrowers are
required to certify in the applicable Notice of Borrowing is no longer true and
correct as of the applicable Funding Date, and the acceptance by the Borrowers
of the proceeds of any Loans shall constitute a re-certification by the
Borrowers, as of the applicable Funding Date, as to the matters to which the
Borrowers are required to certify in the applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after the related Interest Rate Determination Date,
and the applicable Borrower shall be bound to make a borrowing in accordance
therewith.
C. DISBURSEMENT OF FUNDS. All Revolving Loans under this Agreement shall
be made by the Lenders simultaneously and proportionately to their respective
Pro Rata Shares, it being understood that no Lender shall be responsible for any
default by any other Lender in that other Lender's obligation to make a Loan
requested hereunder nor shall the Commitment of any Lender be increased or
decreased as a result of a default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder. Promptly after receipt by the
Administrative Agent of a Notice of Borrowing pursuant to subsection 2.1B (or
telephonic notice in lieu thereof), the Administrative Agent shall notify each
Lender of the proposed borrowing. Each Lender shall make the amount of its
Revolving Loan available to the Administrative Agent, in same day funds in
Dollars, at the Funding and Payment Office, not later than 2:00 P.M. (New York
City time) on the applicable
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Funding Date. Except as provided in subsections 2.1A(ii), 2.1A(iii) and 3.3B
with respect to Revolving Loans used to repay Refunded Swing Line Loans or to
repay Refunded Canadian Loans or to reimburse any Issuing Lender for the amount
of a drawing under a Letter of Credit issued by it (or as provided subsection
2.1B with respect to Swing Line Loans), upon satisfaction or waiver of the
conditions precedent specified in subsections 4.1 (in the case of Loans made on
the Closing Date) and 4.2 (in the case of all Loans), the Administrative Agent
shall make the proceeds of such Revolving Loans available to the Company on the
applicable Funding Date by causing an amount of same day funds in Dollars equal
to the proceeds of all such Loans received by the Administrative Agent from the
Lenders to be credited to the account of the Company at the Funding and Payment
Office.
Unless the Administrative Agent shall have been notified by any Lender
prior to the Funding Date for any Loans that such Lender does not intend to make
available to the Administrative Agent the amount of such Lender's Loan requested
on such Funding Date, the Administrative Agent may assume that such Lender has
made such amount available to the Administrative Agent on such Funding Date and
the Administrative Agent may, in its sole discretion, but shall not be obligated
to, make available to the applicable Borrower a corresponding amount on such
Funding Date. If such corresponding amount is not in fact made available to the
Administrative Agent by such Lender, the Administrative Agent shall be entitled
to recover such corresponding amount on demand from such Lender together with
interest thereon, for each day from such Funding Date until the date such amount
is paid to the Administrative Agent, at the Federal Funds Effective Rate for
three Business Days and thereafter at the Base Rate. If such Lender does not pay
such corresponding amount forthwith upon the Administrative Agent's demand
therefor, the Administrative Agent shall promptly notify the Company and the
Company shall immediately pay such corresponding amount to the Administrative
Agent together with interest thereon, for each day from such Funding Date until
the date such amount is paid to the Administrative Agent, at the rate payable
under this Agreement for Base Rate Loans. Nothing in this subsection 2.1C shall
be deemed to relieve any Lender from its obligation to fulfill its Commitment
hereunder or to prejudice any rights that the Borrowers may have against any
Lender as a result of any default by such Lender hereunder.
D. THE REGISTER.
(i) The Administrative Agent shall maintain, at its address
referred to in subsection 10.8, a register for the recordation of the
names and addresses of the Lenders and the Commitments and Loans of each
Lender from time to time (the "REGISTER"). The Register shall be
available for inspection by the Borrowers or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(ii) The Administrative Agent shall record in the Register (i) the
Revolving Loan Commitment and the Revolving Loans from time to time of
each Lender, (ii) the Swing Line Loan Commitment and the Swing Line Loans
from time to time of the Swing Line Lender, and (iii) the Canadian Loan
Commitment and the Canadian
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Loans from time to time of the Canadian Lender and each repayment or
prepayment in respect of the principal amount of the Revolving Loans of
each Lender, the Canadian Loans of the Canadian Lender or the Swing Line
Loans of the Swing Line Lender. Any such recordation shall be conclusive
and binding on the Borrowers and each Lender, absent manifest error;
provided that failure to make any such recordation, or any error in such
recordation, shall not affect any Lender's Commitment or the Borrowers'
Obligations in respect of any applicable Loans.
(iii) Each Lender shall record on its internal records (including
the Notes held by such Lender) the amount of each Revolving Loan made by
it and each payment in respect thereof. Any such recordation shall be
conclusive and binding on the Borrowers, absent manifest error; provided
that failure to make any such recordation, or any error in such
recordation, shall not affect any Lender's Commitment or the Borrowers'
Obligations in respect of any applicable Loans; and provided, further
that, absent manifest error, in the event of any inconsistency between
the Register and any Lender's records, the recordations in the Register
shall govern.
(iv) The Borrowers, the Administrative Agent and the Lenders
shall deem and treat the Persons listed as the Lenders in the Register as
the holders and owners of the corresponding Commitments and Loans listed
therein for all purposes hereof, and no assignment or transfer of any
such Commitment or Loan shall be effective, in each case unless and until
an Assignment Agreement effecting the assignment or transfer thereof
shall have been accepted by the Administrative Agent and recorded in the
Register as provided in subsection 10.1B(ii). Prior to such recordation,
all amounts owed with respect to the applicable Commitment or Loan shall
be owed to the Lender listed in the Register as the owner thereof, and
any request, authority or consent of any Person who, at the time of
making such request or giving such authority or consent, is listed in the
Register as a Lender shall be conclusive and binding on any subsequent
holder, assignee or transferee of the corresponding Commitment or Loans.
(v) The Borrowers hereby designate CSFB to serve as the
Borrowers' agent solely for purposes of maintaining the Register as
provided in this subsection 2.1D, and the Borrowers hereby agree that, to
the extent CSFB serves in such capacity, CSFB and its officers,
directors, employees, agents and affiliates shall constitute Indemnitees
for all purposes under subsection 10.3.
E. NOTES. Company shall execute and deliver on the Closing Date (i) to
each Lender (or to the Administrative Agent for that Lender) on the Closing Date
a Revolving Note substantially in the form of Exhibit IV-A annexed hereto to
evidence that Lender's Revolving Loans, in the principal amount of that Lender's
Revolving Loan Commitment and with other appropriate insertions and (ii) to the
Swing Line Lender (or to the Administrative Agent for the Swing Line Lender) a
Swing Line Note substantially in the form of Exhibit V annexed hereto to
evidence the Swing Line Lender's Swing Line Loans, in the
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principal amount of the Swing Line Loan Commitment and with appropriate
insertions. Wolverine Canada shall execute and deliver on the Closing Date to
the Canadian Lender (or to the Administrative Agent for the Canadian Lender) a
Canadian Note substantially in the form of Exhibit IV-B annexed hereto to
evidence the Canadian Lender's Canadian Loans in the principal amount of the
Canadian Loan Commitment and with other appropriate insertions.
2.2 INTEREST ON THE LOANS.
A. RATE OF INTEREST. Subject to the provisions of subsections 2.6 and
2.7, each Revolving Loan shall bear interest on the unpaid principal amount
thereof from the date made through maturity (whether by acceleration or
otherwise) at a rate determined by reference to the Base Rate or the Adjusted
Eurodollar Rate. Subject to the provisions of subsection 2.7, each Canadian Loan
shall bear interest on the unpaid principal amount thereof from the date made
through maturity (whether by acceleration or otherwise) at a rate determined by
reference to the Base Rate or the Canadian Rate. Subject to the provisions of
subsection 2.7, each Swing Line Loan shall bear interest on the unpaid principal
amount thereof from the date made through maturity (whether by acceleration or
otherwise) at the Swing Line Rate. The applicable basis for determining the rate
of interest with respect to any Revolving Loan shall be selected by the Company
initially at the time a Notice of Borrowing is given with respect to such Loan
pursuant to subsection 2.1B, and the basis for determining the interest rate
with respect to any Revolving Loan may be changed from time to time pursuant to
subsection 2.2D. The applicable basis for determining the rate of interest with
respect to any Canadian Loan shall be selected by Wolverine Canada initially at
the time a Notice of Borrowing is given with respect to such Loan pursuant to
subsection 2.1B, and the basis for determining the interest rate with respect to
any Canadian Loan may be changed from time to time pursuant to subsection 2.2D.
If on any day a Revolving Loan is outstanding with respect to which notice has
not been delivered to the Administrative Agent in accordance with the terms of
this Agreement specifying the applicable basis for determining the rate of
interest, then, if on the immediately preceding day (i) such Loan was a
Eurodollar Rate Loan, the Company shall be deemed to have elected to continue
such Loan as a Eurodollar Rate Loan with an Interest Period of one month and
(ii) such Loan was a Base Rate Loan, such Loan shall remain a Base Rate Loan. If
on any day a Canadian Loan is outstanding with respect to which notice has not
been delivered to the Canadian Lender in accordance with the terms of this
Agreement specifying the applicable basis for determining the rate of interest,
then, such Loan shall be a Base Rate Loan.
Subject to the provisions of subsections 2.2E and 2.7, the Revolving
Loans shall bear interest through maturity as follows:
(a) if a Base Rate Loan, then at the Base Rate; or
(b) if a Eurodollar Rate Loan, then at the sum of the Adjusted
Eurodollar Rate plus the Applicable Margin.
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Subject to the provisions of subsections 2.2E and 2.7, the Canadian
Loans shall bear interest through maturity as follows:
(a) if a Base Rate Loan, then at the Base Rate; or
(b) if a Canadian Rate Loan, then at the Canadian
Rate.
Subject to the provisions of subsections 2.2E and 2.7, the Swing Line
Loans shall bear interest through maturity at the Swing Line Rate.
B. INTEREST PERIODS. In connection with each Eurodollar Rate Loan, the
Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/ Continuation, as the case may be, select an interest period (each an
"INTEREST PERIOD") to be applicable to such Eurodollar Rate Loan, which Interest
Period shall be, at the Borrowers' option, either a one, two, three or six month
period; provided that:
(i) the initial Interest Period for any Eurodollar Rate Loan
shall commence on the Funding Date in respect of such Loan, in the case
of a Loan initially made as a Eurodollar Rate Loan, or on the date
specified in the applicable Notice of Conversion/Continuation, in the
case of a Loan converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant to a
Notice of Conversion/ Continuation, each successive Interest Period shall
commence on the day on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, if the next succeeding Business
Day occurs in a different month, then the Interest Period shall expire on
the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (iii) of this subsection 2.2B, end on
the last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the Loans
shall extend beyond the Maturity Date;
(vi) there shall be no more than 10 Interest Periods outstanding
at any time; and
(vii) in the event the Company fails to specify an Interest Period
for any Eurodollar Rate Loan in the applicable Notice of Borrowing or
Notice of Conversion
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/Continuation, the Company shall be deemed to have selected an Interest
Period of one month.
C. INTEREST PAYMENTS. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid), at maturity (including final
maturity) and upon conversion pursuant to subsection 2.2D; provided that in the
case of Swing Line Loans, interest shall be paid monthly in arrears for the
month then ending and at maturity, whether by acceleration or otherwise.
D. CONVERSION OR CONTINUATION. Subject to the provisions of subsection
2.6, the Company shall have the option (i) to convert at any time all or any
part of its outstanding Loans (other than Swing Line Loans) equal to $5,000,000
and integral multiples of $1,000,000 in excess of that amount from Loans bearing
interest at a rate determined by reference to one basis to Loans bearing
interest at a rate determined by reference to an alternative basis or (ii) upon
the expiration of any Interest Period applicable to a Eurodollar Rate Loan, to
continue all or any portion of such Loan equal to $5,000,000 and integral
multiples of $1,000,000 in excess of that amount as a Eurodollar Rate Loan;
provided, however, that a Eurodollar Rate Loan may only be converted into a Base
Rate Loan on the expiration date of an Interest Period applicable thereto.
Wolverine Canada shall have the option (i) to convert at any time all or
any part of its outstanding Loans equal to $5,000,000 and integral multiples of
$1,000,000 in excess of that amount from Loans bearing interest at a rate
determined by reference to one basis to Loans bearing interest at a rate
determined by reference to an alternative basis or (ii) upon the expiration of
any Interest Period applicable to a Canadian Rate Loan, to continue all or any
portion of such Loan equal to $5,000,000 and integral multiples of $1,000,000 in
excess of that amount as a Canadian Rate Loan; provided, however, that a
Canadian Rate Loan may only be converted into a Base Rate Loan on the expiration
date of an Interest Period applicable thereto; provided further that, Wolverine
Canada may convert or continue Loans in other amounts and on other days with the
prior written consent of the Canadian Lender.
The applicable Borrower shall deliver a Notice of Conversion/Continuation
to the Administrative Agent (and, with respect to a Canadian Loan, the Canadian
Lender) no later than 11:00 A.M. (New York City time) at least one Business Day
in advance of the proposed conversion date (in the case of a conversion to a
Base Rate Loan) and at least three Business Days in advance of the proposed
conversion/continuation date (in the case of a conversion to, or a continuation
of, a Eurodollar Rate Loan or Canadian Rate Loan). A Notice of
Conversion/Continuation shall specify (i) the proposed conversion/continuation
date (which shall be a Business Day), (ii) the amount and type of the Loan to be
converted/continued, (iii) the nature of the proposed conversion/continuation,
(iv) in the case of a conversion to, or a continuation of, a Eurodollar Rate
Loan or Canadian Rate Loan, the requested Interest Period, and (v) in the case
of a conversion to, or a continuation of, a Eurodollar Rate Loan or Canadian
Rate Loan, that no Potential Event of Default or Event
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of Default has occurred and is continuing. In lieu of delivering the
above-described Notice of Conversion/Continuation, the applicable Borrower may
give the Administrative Agent (and, with respect to a Canadian Loan, the
Canadian Lender) telephonic notice by the required time of any proposed
conversion/continuation under this subsection 2.2D; provided that such notice
shall be promptly confirmed in writing by delivery of a Notice of
Conversion/Continuation to the Administrative Agent on or before the proposed
conversion/continuation date. Upon receipt of written or telephonic notice of
any proposed conversion/continuation under this subsection 2.2D, the
Administrative Agent shall promptly transmit such notice by telefacsimile or
telephone to each Lender.
Neither the Administrative Agent nor any Lender shall incur any liability
to any Loan Party in acting upon any telephonic notice referred to above that
the Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of the Borrowers
or for otherwise acting in good faith under this subsection 2.2D, and upon
conversion or continuation of the applicable basis for determining the interest
rate with respect to any Loans in accordance with this Agreement pursuant to any
such telephonic notice the applicable Borrower shall have effected a conversion
or continuation, as the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Conversion/Continuation for conversion to, or continuation of, a Eurodollar
Rate Loan or Canadian Rate Loan (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and the
applicable Borrower shall be bound to effect a conversion or continuation in
accordance therewith.
E. DEFAULT RATE. Upon the occurrence and during the continuation of any
Event of Default, the outstanding principal amount of all Loans and, to the
extent permitted by applicable law, any interest payments thereon not paid when
due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon
demand at a rate that is 2% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for Base Rate
Loans or Canadian Rate Loans); provided that, in the case of Eurodollar Rate
Loans, upon the expiration of the Interest Period in effect at the time any such
increase in interest rate is effective such Eurodollar Rate Loans shall
thereupon become Base Rate Loans and shall thereafter bear interest payable upon
demand at a rate which is 2% per annum in excess of the interest rate otherwise
payable under this Agreement for Base Rate Loans. Payment or acceptance of the
increased rates of interest provided for in this subsection 2.2E is not a
permitted alternative to timely payment and shall not constitute a waiver of any
Event of Default or otherwise prejudice or limit any rights or remedies of the
Administrative Agent or any Lender.
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2.3 FEES.
A. COMMITMENT FEES. The Company agrees to pay to the Administrative
Agent, for distribution to each Lender in propor- tion to that Lender's Pro Rata
Share, commitment fees for the period from and including the Closing Date to and
excluding the Maturity Date equal to the average of the daily excess of the
Commitments over the sum of (i) the aggregate principal amount of outstanding
Loans (provided that, for the purpose of calculating the commitment fees payable
(a) to each Lender other than the Swing Line Lender, the outstanding Swing Line
Loans shall be excluded and (b) to each Lender other than the Canadian Lender,
the Canadian Loans shall be excluded) plus (ii) the Letter of Credit Usage, such
commitment fees to be calculated as provided in subsection 2.4B(iv) and to be
payable quarterly in arrears on the last Business Day of each calendar quarter,
commencing on the first such date to occur after the Closing Date, and on the
Maturity Date multiplied by the percent per annum set forth below corresponding
to the Applicable Level then in effect:
<TABLE>
<CAPTION>
=================================================
APPLICABLE PERCENT
LEVEL PER ANNUM
=================================================
<S> <C>
I .10%
-------------------------------------------------
II .125%
-------------------------------------------------
III .1875%
-------------------------------------------------
IV .225%
-------------------------------------------------
V .35%
=================================================
</TABLE>
B. OTHER FEES. Each Borrower agrees to pay to the Administrative Agent
such other fees in the amounts and at the times separately agreed upon between
such Borrower and the Administrative Agent.
2.4 PREPAYMENTS AND REDUCTIONS IN COMMITMENTS; GENERAL PROVI- SIONS REGARDING
PAYMENTS.
A. PREPAYMENTS AND REDUCTIONS IN COMMITMENTS.
(i) Voluntary Prepayments The Company may, without prior notice
and in any amount, prepay the Swing Line Loans. The Borrowers may, upon
written or telephonic notice on the day (which shall be a Business Day)
of the prepayment, in the case of Loans (other than Swing Line Loans)
that are Base Rate Loans, and three Business Days' prior written or
telephonic notice, in the case of Eurodollar Rate Loans and Canadian Rate
Loans, in each case given to the Administrative Agent (and with respect
to the Canadian Loans, the Canadian Lender) by 12:00 Noon (New York City
time) on the date required and, if given by telephone,
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<PAGE> 50
promptly confirmed in writing to the Administrative Agent which original
written or telephonic notice the Administrative Agent will promptly
transmit by telefacsimile or telephone to each Lender, at any time and
from time to time prepay any Loans on any Business Day in whole or in
part in an aggregate minimum amount of $1,000,000 and integral multiples
of $100,000 in excess of that amount; provided, however, that if a
Eurodollar Rate Loan or Canadian Loan is prepaid prior to the expiration
of the Interest Period applicable thereto the applicable Borrower shall
concurrently pay all amounts due pursuant to subsection 2.6D. Notice of
prepayment having been given as aforesaid, the principal amount of the
Loans specified in such notice shall become due and payable on the
prepayment date specified therein. Any such voluntary prepayment shall be
applied as specified in subsection 2.4A(iv).
(ii) Voluntary Reductions of Commitments. The Borrowers may, upon
not less than three Business Days' prior written or telephonic notice
confirmed in writing to the Administrative Agent (which original written
or telephonic notice the Administrative Agent will promptly transmit by
telefacsimile or telephone to each Lender), at any time and from time to
time terminate in whole or permanently reduce in part, without premium or
penalty, the Revolving Loan Commitments in an amount up to the amount by
which the Revolving Loan Commitments exceed the Total Utilization at the
time of such proposed termination or reduction; provided that any such
partial reduction of the Revolving Loan Commitments shall be in an
aggregate minimum amount of $1,000,- 000 and integral multiples of
$100,000 in excess of that amount. The Company's notice to the
Administrative Agent shall designate the date (which shall be a Business
Day) of such termination or reduction and the amount of any partial
reduction, and such termination or reduction of the Revolving Loan
Commitments shall be effective on the date specified in the Borrowers'
notice and shall reduce the Commitment of each Lender proportionately to
its Pro Rata Share. Any such voluntary reduction of the Revolving Loan
Commitments shall be applied as specified in subsection 2.4A(iv).
(iii) Mandatory Prepayments and Mandatory Reductions of
Commitments. The Loans shall be prepaid, and/or the Commitments shall be
permanently reduced, in the amounts and under the circumstances set forth
below, all such prepayments to be applied as specified in subsection
2.4A(iv):
(a) Prepayments and Reductions From Net Asset Sale
Proceeds. No later than the first Business Day following the date
of receipt by any Borrower or any of its respective Subsidiaries
of any Net Asset Sale Proceeds in respect of any Asset Sale, the
Borrowers shall prepay the Loans and the Revolving Loan
Commitments shall be permanently reduced in an aggregate amount
equal to such Net Asset Sale Proceeds; provided that no
prepayments shall be required and no Commitments shall be reduced
pursuant to this subsection unless and until the amount of
Aggregate Net Proceeds exceeds
43
<PAGE> 51
$25,000,000 and then only to the extent the amount of the
Aggregate Net Proceeds exceeds $25,000,000.
(b) Prepayments and Reductions from Net
Insurance/Condemnation Proceeds. No later than the 60th day
following the date of receipt (the date of such receipt being
referred to herein as the "RECEIPT DATE") by the Administrative
Agent or by any Borrower or any of its respective Subsidiaries of
any Net Insurance/Condemnation Proceeds, the Borrowers shall
prepay the Loans and the Revolving Loan Commitments shall be
permanently reduced in an aggregate amount equal to the amount of
such Net Insurance/Condemnation Proceeds minus any such Net
Insurance/Condemnation Proceeds (the "PROPOSED REINVESTMENT
PROCEEDS") that such Borrower or such Subsidiary intends to use in
accordance with the provisions of this subsection to pay or
reimburse the costs of repairing, restoring or replacing the
assets in respect of which such Net Insurance/Condemnation
Proceeds were received; provided that the Borrowers shall have
delivered to the Administrative Agent, (i) on or before the 60th
day after the Receipt Date written notice of its intent to use
such Proposed Reinvestment Proceeds to repair, restore or replace
the applicable assets and (ii) on or before the 180th day after
the Receipt Date, an Officer's Certificate setting forth the
proposed use of the Proposed Reinvestment Proceeds and such other
information with respect to such proposed use as the
Administrative Agent may reasonably request. In addition, no later
than 360 days after the applicable Receipt Date, the Borrowers
shall prepay the Loans and/or the Revolving Loan Commitments shall
be permanently reduced in an amount equal to the amount of any
related Proposed Reinvestment Proceeds that have not been applied
to the costs of repairing, restoring or replacing the applicable
assets of such Borrower or such Subsidiary as provided above;
provided that (i) if the repairs, restorations, or replacement of
assets cannot be completed within 360 days and the applicable
Borrower or Subsidiary is acting diligently to complete such
repairs, restorations or replacement of assets, no pre-payment or
Commitment reduction shall be required pursuant to this sentence
until the date that is 540 days after the Receipt Date and (ii) no
prepayments shall be required and no Commitments shall be reduced
pursuant to this subsection unless and until the amount of
Aggregate Net Proceeds exceeds $25,000,000 and then only to the
extent the amount of the Aggregate Net Proceeds exceeds
$25,000,000.
(c) Prepayments and Reductions Due to Issuance of Debt or
Equity Securities. On the date of receipt by the Company or any of
its Subsidiaries of the Cash proceeds (any such proceeds, net of
underwriting discounts and commissions and other reasonable costs
and expenses associated therewith, including reasonable legal fees
and expenses, being "NET SECURITIES PROCEEDS") from the issuance
of any debt or equity Securities of the Company or any of its
Subsidiaries after the Closing Date, the Borrowers shall prepay
the
44
<PAGE> 52
Loans, and the Revolving Loan Commitments shall be permanently
reduced, in an aggregate amount equal to such Net Securities
Proceeds minus such Net Securities Proceeds from the issuance of
debt used within 30 days of such issuance to effect Permitted
Acquisitions or designated within 30 days of such issuance for
capital expenditures to be consummated within 180 days of such
issuance; provided that no prepayments shall be required and no
Commitments shall be reduced pursuant to this subsection unless
and until the amount of Aggregate Net Proceeds exceeds
$25,000,000.
(d) Calculations of Net Proceeds Amounts; Additional
Prepayments and Reductions Based on Subsequent Calculations.
Concurrently with any prepayment of the Loans and/or reduction of
the Commitments pursuant to subsections 2.4A(iii)(a)-(c), the
Borrowers shall deliver to the Administrative Agent an Officer's
Certificate demonstrating the calculation of the amount (the "NET
PROCEEDS AMOUNT") of the applicable Net Asset Sale Proceeds or Net
Insurance/Condemnation Proceeds, as the case may be, that gave
rise to such prepayment and/or reduction. In the event that the
Borrowers shall subsequently determine that the actual Net
Proceeds Amount was greater than the amount set forth in such
Officer's Certificate, the Borrowers shall promptly make an
additional prepayment of the Loans (and, if applicable, the
Commitments shall be permanently reduced) in an amount equal to
the amount of such excess, and the Borrowers shall concurrently
therewith deliver to the Administrative Agent an Officer's
Certificate demonstrating the derivation of the additional Net
Proceeds Amount resulting in such excess.
(e) Prepayments Due to Reductions or Restrictions of
Commitments. The Borrowers shall from time to time prepay Loans to
the extent necessary so that the Total Utilization shall not at
any time exceed the Revolving Loan Commitments then in effect.
Wolverine Canada shall prepay Canadian Loans to the extent
necessary so that the Dollar equivalent (calculated at the then
applicable spot rate) of the aggregate principal amount of
outstanding Canadian Loans shall not at any time exceed an amount
equal to $20,000,000 minus the aggregate amount of reductions of
the Canadian Commitments effected hereunder.
(f) Reductions of Commitments Not Limited to Amount of
Loans Outstanding. The amount of any required reduction of the
Commitments pursuant to any provision of this subsection 2.4A(iii)
shall not be affected by the fact that the outstanding principal
amount of Loans at the time of such reduction is less than the
amount of such reduction.
(iv) Application of Prepayments.
(a) Application of Voluntary Prepayments by Type of Loans
and Order of Maturity. Any voluntary prepayments by the Company
pursuant to
45
<PAGE> 53
subsection 2.4A(i) shall be applied as specified in the
applicable notice of prepayment; provided that in the event the
Company fails to specify the Loans to which any such prepayment
shall be applied, such prepayment shall be applied first to repay
outstanding Swing Line Loans to the full extent thereof and second
to repay outstanding Revolving Loans to the full extent thereof.
Any voluntary prepayments by Wolverine Canada shall be applied to
the Canadian Loans.
(b) Application of Prepayments to Base Rate Loans and
Eurodollar Rate Loans. Any prepayment of the Loans shall be
applied first to Base Rate Loans to the full extent thereof before
application to Eurodollar Rate Loans, in each case in a manner
which minimizes the amount of any payments required to be made by
the Borrowers pursuant to subsection 2.6D.
B. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. Except as expressly provided
herein, all payments by the Borrowers of principal, interest, fees and
other Obligations hereunder and under the Notes shall be made in Dollars
in same day funds, without defense, setoff or counterclaim, free of any
restriction or condition, and delivered to the Administrative Agent not
later than 1:00 P.M. (New York City time) on the date due at the Funding
and Payment Office for the account of the Lenders; provided that interest
payable with respect to the Swing Line Loans shall be (a) payable to the
Swing Line Lender not later than 1:00 P.M. (New York City time) at its
address set forth below its name on the appropriate signature page hereof
and (b) calculated by the Swing Line Lender and the Swing Line Lender
shall give the Administrative Agent promptly after the last day of each
calendar month, notice of the aggregate amount of interest on the Swing
Line Loans paid or payable by the Company; provided, further that
interest payable with respect to the Canadian Loans shall be (a) payable
to the Canadian Lender not later than 1:00 P.M. (New York City time) at
its address set forth below its name on the appropriate signature page
hereof and (b) calculated by the Canadian Lender and the Canadian Lender
shall give the Administrative Agent promptly after the last day of each
calendar month, notice of the aggregate amount of interest on the
Canadian Loans paid or payable by Wolverine Canada. Funds received by the
Administrative Agent after that time on such due date shall be deemed to
have been paid by the Borrowers on the next succeeding Business Day. Each
Borrower hereby authorizes the Administrative Agent to charge its
accounts with the Administrative Agent in order to cause timely payment
to be made to the Administrative Agent of all principal, interest, fees
and expenses due from such Borrower hereunder (subject to sufficient
funds being available in its accounts for that purpose).
(ii) Application of Payments to Principal and Interest. Except as
provided in subsection 2.2C, all payments in respect of the principal
amount of any Loan shall include payment of accrued interest on the
principal amount being repaid or prepaid,
46
<PAGE> 54
and all such payments (and, in any event, any payments in respect of any
Loan on a date when interest is due and payable with respect to such
Loan) shall be applied to the payment of interest before application to
principal.
(iii) Apportionment of Payments. Aggregate principal and interest
payments in respect of Revolving Loans shall be apportioned among all
outstanding Loans to which such payments relate, in each case
proportionately to the Lenders' respective Pro Rata Shares. The
Administrative Agent shall promptly distribute to each Lender, at its
primary address set forth below its name on the appropriate signature
page hereof or at such other address as such Lender may request in
writing, its Pro Rata Share of all such payments received by the
Administrative Agent and the commitment fees of such Lender when received
by the Administrative Agent pursuant to subsection 2.3. Notwithstanding
the foregoing provisions of this subsection 2.4B(iii), if, pursuant to
the provisions of subsection 2.6C, any Notice of Conversion/Continuation
is withdrawn as to any Affected Lender or if any Affected Lender makes
Base Rate Loans in lieu of its Pro Rata Share of any Eurodollar Rate
Loans, the Administrative Agent shall give effect thereto in apportioning
payments received thereafter. Except to the extent Lenders have purchased
participations in Canadian Loans pursuant to subsection 2.1A(iii), all
payments of principal and interest on the Canadian Loans shall be for the
account of the Canadian Lender.
(iv) Computation of Interest and Fees; Payments on Business Days.
Interest on the Loans and commitment fees payable pursuant to subsection
2.3A shall be computed on the basis of a 360-day year, in each case of
the actual number of days elapsed in the period during which it accrues,
(including the first day but excluding the last day); provided (a)
interest on Base Rate Loans shall be computed on the basis of a 365 (or,
if applicable, 366) day year and (b) that if a Loan is repaid on the same
day on which it is made, one day's interest shall be paid on that Loan.
(v) Notation of Payment. Each Lender agrees that before disposing
of any Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon of all
Loans evidenced by that Note and all principal payments previously made
thereon and of the date to which interest thereon has been paid; provided
that the failure to make (or any error in the making of) a notation of
any Loan made under such Note shall not limit or otherwise affect the
obligations of the Borrowers hereunder or under such Note with respect to
any Loan or any payments of principal or interest on such Note.
C. APPLICATION OF PAYMENTS UNDER GUARANTIES.
(i) All payments received by Administrative Agent under any
Guaranty shall be applied promptly from time to time by Administrative
Agent in the following order of priority:
47
<PAGE> 55
(a) To the payment of the costs and expenses of any collection or
other realization under such Guaranty, including reasonable compensation
to the Administrative Agent and its agents and counsel, and all expenses,
liabilities and advances made or incurred by the Administrative Agent in
connection therewith, all in accordance with the terms of this Agreement
and such Guaranty.
(b) thereafter, to the extent of any excess such payments, to the
payment of all other Guarantied Obligations (as defined in such Guaranty)
for the ratable benefit of the holders thereof; and
(c) thereafter, to the extent of any excess such payments, to the
payment to the Company or the applicable Subsidiary Guarantor or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
2.5 USE OF PROCEEDS.
A. LOANS.
(i) Revolving Loans, Swing Line Loans and Letters of Credit. The
proceeds of the Revolving Loans, the Swing Line Loans and the Letters of
Credit, together with other funds available to the Company, may be
applied by the Company to (i) repay and terminate the Existing Debt, (ii)
to fund the Company's Tender Offer, (iii) to finance Permitted
Acquisitions, (vi) to purchase Company Common Stock as permitted under
subsection 7.5, (v) for working capital financing and (vi) for other
general corporate purposes.
(ii) Canadian Loans. The proceeds of the Canadian Loans, together
with other funds available to the Wolverine Canada, shall be applied by
Wolverine Canada to (i) repay and terminate the Existing Debt, (ii) for
working capital financing and (iii) for other general corporate purposes.
B. MARGIN REGULATIONS. No portion of the proceeds of any borrowing
under this Agreement shall be used by any Borrower or any of its respective
Subsidiaries in any manner that might cause the borrowing or the application of
such proceeds to violate Regulation G, Regulation U, Regulation T or Regulation
X of the Board of Governors of the Federal Reserve System or any other
regulation of such Board or to violate the Exchange Act, in each case as in
effect on the date or dates of such borrowing and such use of proceeds.
2.6 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to Eurodollar Rate Loans as
to the matters covered:
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<PAGE> 56
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as
practicable on each Interest Rate Determination Date, the Administrative
Agent shall determine (which deter mination shall, absent manifest error,
be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is
then being determined for the applicable Interest Period and shall
promptly give notice thereof (in writing or by telephone confirmed in
writing) to the Borrowers and each Lender.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event
that the Administrative Agent shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto), on
any Interest Rate Determination Date with respect to any Eurodollar Rate
Loans, that by reason of circumstances affecting the interbank Eurodollar
market adequate and fair means do not exist for ascertaining the interest
rate applicable to such Loans on the basis provided for in the definition
of Adjusted Eurodollar Rate, the Administrative Agent shall on such date
give notice (by telefacsimile or by telephone confirmed in writing) to
the Borrowers and each Lender of such determination, whereupon (i) no
Loans may be made as, or converted to, Eurodollar Rate Loans until such
time as the Administrative Agent notifies the Borrowers and the Lenders
that the circumstances giving rise to such notice no longer exist and
(ii) any Notice of Borrowing or Notice of Conversion/Continuation given
by the Borrowers with respect to the Loans in respect of which such
determination was made shall be deemed to be rescinded by the Borrowers.
C. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS. In the
event that on any date any Lender shall have determined (which
determination shall be final and conclusive and binding upon all parties
hereto but shall be made only after consultation with the Borrowers and
the Administrative Agent) that the making, maintaining or continuation of
its Eurodollar Rate Loans (i) has become unlawful as a result of
compliance by such Lender in good faith with any law, treaty,
governmental rule, regulation, guideline or order (or would conflict with
any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would
not be unlawful) or (ii) has become impracticable, or would cause such
Lender material hardship, as a result of contingencies occurring after
the date of this Agreement which materially and adversely affect the
interbank Eurodollar market or the position of such Lender in that
market, then, and in any such event, such Lender shall be an "AFFECTED
LENDER" and it shall on that day give notice (by telefacsimile or by
telephone confirmed in writing) to the Borrowers and the Administrative
Agent of such determination (which notice the Administrative Agent shall
promptly transmit to each other Lender). Thereafter (a) the obligation of
the Affected Lender to make Loans as, or to convert Loans to, Eurodollar
Rate Loans shall be suspended until such notice shall be withdrawn by the
Affected Lender, (b) to the extent such determination by the Affected
Lender relates to a Eurodollar Rate Loan then being requested by the
Borrowers pursuant to a Notice of Borrowing or a Notice of Conver-
49
<PAGE> 57
sion/Continuation, the Affected Lender shall make such Loan as (or
convert such Loan to, as the case may be) a Base Rate Loan, (c) the
Affected Lender's obligation to maintain its outstanding Eurodollar Rate
Loans (the "AFFECTED LOANS") shall be terminated at the earlier to occur
of the expiration of the Interest Period then in effect with respect to
the Affected Loans or when required by law, and (d) the Affected Loans
shall automatically convert into Base Rate Loans on the date of such
termination. Notwithstanding the foregoing, to the extent a determination
by an Affected Lender as described above relates to a Eurodollar Rate
Loan then being requested by the Borrowers pursuant to a Notice of
Borrowing or a Notice of Conversion/Continuation, the Borrowers shall
have the option, subject to the provisions of subsection 2.6D, to rescind
such Notice of Borrowing or Notice of Conversion/Continuation as to all
the Lenders by giving notice (by telefacsimile or by telephone confirmed
in writing) to the Administrative Agent of such rescission on the date on
which the Affected Lender gives notice of its determination as described
above (which notice of rescission the Administrative Agent shall promptly
transmit to each other Lender). Except as provided in the immediately
preceding sentence, nothing in this subsection 2.6C shall affect the
obligation of any Lender other than an Affected Lender to make or
maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in
accordance with the terms of this Agreement.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST
PERIODS. Each Borrower shall compensate each Lender, upon written request
by that Lender to the Administrative Agent (which request shall set forth
the basis for requesting such amounts), for all reasonable losses,
expenses and liabilities (including any interest paid by that Lender to
lenders of funds borrowed by it to make or carry its Eurodollar Rate
Loans and any loss, expense or liability sustained by that Lender in
connection with the liquidation or re-employment of such funds) which
that Lender may sustain: (i) if for any reason (other than a default by
that Lender) a borrowing of any Eurodollar Rate Loan by such Borrower
does not occur on a date specified therefor in a Notice of Borrowing or a
telephonic request for borrowing, or a conversion to or continuation of
any Eurodollar Rate Loan does not occur on a date specified therefor in a
Notice of Conversion/Continuation or a telephonic request for conversion
or continuation, (ii) if any prepayment (including any prepayment
pursuant to subsection 2.4A(i) or other principal payment or any
conversion of any of its Eurodollar Rate Loans occurs on a date prior to
the last day of an Interest Period applicable to that Loan, (iii) if any
pre-payment of any of its Eurodollar Rate Loans is not made on any date
specified in a notice of prepayment given by the Borrowers, or (iv) as a
consequence of any other default by such Borrower in the repayment of its
Eurodollar Rate Loans when required by the terms of this Agreement.
E. BOOKING OF EURODOLLAR RATE LOANS. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its
branch offices or the office of an Affiliate of that Lender.
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<PAGE> 58
F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS.
Calculation of all amounts payable to a Lender under this subsection
2.6 and under subsection 2.7A shall be made as though that Lender had
actually funded each of its relevant Eurodollar Rate Loans through the
purchase of a Eurodollar deposit bearing interest at the rate obtained
pursuant to clause (i) of the definition of Adjusted Eurodollar Rate in
an amount equal to the amount of such Eurodollar Rate Loan and having a
maturity comparable to the relevant Interest Period and through the
transfer of such Eurodollar deposit from an offshore office of that
Lender to a domestic office of that Lender in the United States of
America; provided, however, that each Lender may fund each of its
Eurodollar Rate Loans in any manner it sees fit and the foregoing
assumptions shall be utilized only for the purposes of calculating
amounts payable under this subsection 2.6 and under subsection 2.7A.
G. EURODOLLAR RATE LOANS AFTER DEFAULT. After the occurrence
of and during the continuation of a Potential Event of Default or an
Eventof Default, (i) the Borrowers may not elect to have a Loan be
made or maintained as, or converted to, a Eurodollar Rate Loan after
the expiration of any Interest Period then in effect for that Loan and
(ii) subject to the provisions of subsection 2.6D, any Notice of
Borrowing or Notice of Conversion/Continuation given by a Borrower
with respect to a requested borrowing or conversion/continuation that
has not yet occurred shall be deemed to be rescinded by such Borrower.
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of subsection 2.7B (which shall be controlling with respect to
the matters covered thereby), in the event that any Lender shall
determine (which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto) that any law, treaty or
governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or
order), or any determination of a court or governmental authority, in
each case that becomes effective after the date hereof, or compliance by
such Lender with any guideline, request or directive issued or made after
the date hereof by any central bank or other governmental or
quasi-governmental authority (whether or not having the force of law):
(i) subjects such Lender (or its applicable lending office)
to any additional Tax (other than any Tax on the overall net
income of such Lender) with respect to this Agreement or any of
its obligations hereunder or any payments to such Lender (or its
applicable lending office) of principal, interest, fees or any
other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or
similar requirement against assets held by, or
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<PAGE> 59
deposits or other liabilities in or for the account of, or
advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Lender (other than any
such reserve or other requirements with respect to Eurodollar Rate
Loans that are reflected in the definition of Adjusted Eurodollar
Rate); or
(iii) imposes any other condition (other than with respect
to a Tax matter) on or affecting such Lender (or its applicable
lending office) or its obligations hereunder or the interbank
Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, each Borrower shall promptly pay to
such Lender, upon receipt of the statement referred to in the next sentence,
such additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable from
such Borrower hereunder. Such Lender shall deliver to the Borrowers (with a copy
to the Administrative Agent) a written statement, setting forth in reasonable
detail the basis for calculating the additional amounts owed to such Lender
under this subsection 2.7A, which statement shall be conclusive and binding upon
all parties hereto absent manifest error.
B. WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. All sums payable by each
Borrower under this Agreement and the other Loan Documents shall (except
to the extent required by law) be paid free and clear of, and without any
deduction or withholding on account of, any Tax (other than a Tax on the
overall net income of any Lender) imposed, levied, collected, withheld or
assessed by or within the United States of America or any political
subdivision in or of the United States of America, Canada or any other
jurisdiction from or to which a payment is made by or on behalf of such
Borrower or by any federation or organization of which the United States
of America, Canada or any such jurisdiction is a member at the time of
payment.
(ii) Grossing-up of Payments. If any Borrower or any other Person
is required by law to make any deduction or withholding on account of any
such Tax from any sum paid or payable by such Borrower to the
Administrative Agent or any Lender under any of the Loan Documents:
(a) such Borrower shall notify the Administrative Agent of
any such requirement or any change in any such requirement as soon
as such Borrower becomes aware of it;
(b) such Borrower shall pay any such Tax before the date on
which penalties attach thereto, such payment to be made (if the
liability to pay is
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imposed on such Borrower) for its own account or (if that
liability is imposed on the Administrative Agent or such Lender,
as the case may be) on behalf of and in the name of the
Administrative Agent or such Lender;
(c) the sum payable by such Borrower in respect of which
the relevant deduction, withholding or payment is required shall
be increased to the extent necessary to ensure that, after the
making of that deduction, withholding or payment, the
Administrative Agent or such Lender, as the case may be, receives
on the due date a net sum equal to what it would have received had
no such deduction, withholding or payment been required or made;
and
(d) within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and within
30 days after the due date of payment of any Tax which it is
required by clause (b) above to pay, the relevant Borrower shall
deliver to the Administrative Agent evidence satisfactory to the
other affected parties of such deduction, withholding or payment
and of the remittance thereof to the relevant taxing or other
authority;
provided that, except with respect to withholding requirements applicable
to payments by Wolverine Canada, no such additional amount shall be
required to be paid to any Lender under clause (c) above except to the
extent that any change after the date hereof (in the case of each Lender
listed on the signature pages hereof) or after the date of the Assignment
Agreement pursuant to which such Lender became a Lender (in the case of
each other Lender) in any such requirement for a deduction, withholding
or payment as is mentioned therein shall result in an increase in the
rate of such deduction, withholding or payment from that in effect at the
date of this Agreement or at the date of such Assignment Agreement, as
the case may be, in respect of payments to such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws of any
jurisdiction other than the United States or any state or other
political subdivision thereof (for purposes of this subsection
2.7B(iii), a "NON-US LENDER") shall deliver to the Administrative
Agent for transmission to the Borrowers, on or prior to the
Closing Date (in the case of each Lender listed on the signature
pages hereof) or on or prior to the date of the Assignment
Agreement pursuant to which it becomes a Lender (in the case of
each other Lender), and at such other times as may be necessary in
the determination of the Borrowers or the Administrative Agent
(each in the reasonable exercise of its discretion), (1) two
original copies of Internal Revenue Service Form 1001 or 4224 (or
any successor forms), properly completed and duly executed by such
Lender, together with any other certificate or statement of
exemption required under
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the Internal Revenue Code or the regulations issued thereunder to
establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to
any payments to such Lender of principal, interest, fees or other
amounts payable under any of the Loan Documents or (2) if such
Lender is not a "bank" or other Person described in Section
881(c)(3) of the Internal Revenue Code and cannot deliver either
Internal Revenue Service Form 1001 or 4224 pursuant to clause (1)
above, a Certificate re Non-Bank Status together with two original
copies of Internal Revenue Service Form W-8 (or any successor
form), properly completed and duly executed by such Lender,
together with any other certificate or statement of exemption
required under the Internal Revenue Code or the regulations issued
thereunder to establish that such Lender is not subject to
deduction or withholding of United States federal income tax with
respect to any payments to such Lender of interest payable under
any of the Loan Documents.
(b) Each Lender required to deliver any forms, certificates
or other evidence with respect to United States federal income tax
withholding matters pursuant to subsection 2.7B(iii)(a) hereby
agrees, from time to time after the initial delivery by such
Lender of such forms, certificates or other evidence, whenever a
lapse in time or change in circumstances renders such forms,
certificates or other evidence obsolete or inaccurate in any
material respect, that such Lender shall promptly (1) deliver to
the Administrative Agent for transmission to the Borrowers two new
original copies of Internal Revenue Service Form 1001 or 4224, or
a Certificate re Non-Bank Status and two original copies of
Internal Revenue Service Form W-8, as the case may be, properly
completed and duly executed by such Lender, together with any
other certificate or statement of exemption required in order to
confirm or establish that such Lender is not subject to deduction
or withholding of United States federal income tax with respect to
payments to such Lender under the Loan Documents or (2) notify the
Administrative Agent and the Borrowers of its inability to deliver
any such forms, certificates or other evidence.
(c) The Borrowers shall not be required to pay any
additional amount to any Non-US Lender under clause (c) of
subsection 2.7B(ii) if such Lender shall have failed to satisfy
the requirements of clause (a) or (b)(1) of this subsection
2.7B(iii); provided that if such Lender shall have satisfied the
requirements of subsection 2.7B(iii)(a) on the Closing Date (in
the case of each Lender listed on the signature pages hereof) or
on the date of the Assignment Agreement pursuant to which it
became a Lender (in the case of each other Lender), nothing in
this subsection 2.7B(iii)(c) shall relieve either Borrower of
its obligation to pay any additional amounts pursuant to clause
(c) of subsection 2.7B(ii) in the event that, as a result of any
change in any applicable law, treaty or governmental rule,
regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no
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longer properly entitled to deliver forms, certificates or other
evidence at a subsequent date establishing the fact that such
Lender is not subject to withholding as described in subsection
2.7B(iii)(a).
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have determined
that the adoption, effectiveness, phase-in or applicability after the date
hereof of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or with reference
to, such Lender's Loans or Commitment or Letters of Credit or participations
therein or other obligations hereunder with respect to the Loans or the Letters
of Credit to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy),
then from time to time, within five Business Days after receipt by the Borrowers
from such Lender of the statement referred to in the next sentence, the
Borrowers shall pay to such Lender such additional amount or amounts as will
compensate such Lender or such controlling corporation on an after-tax basis for
such reduction. Such Lender shall deliver to the Borrowers (with a copy to the
Administrative Agent) a written statement, setting forth in reasonable detail
the basis of the calculation of such additional amounts, which statement shall
be conclusive and binding upon all parties hereto absent manifest error.
2.8 OBLIGATION OF THE LENDERS AND THE ISSUING LENDERS TO MITIGATE.
Each Lender and Issuing Lender agrees that, as promptly as practicable
after the officer of such Lender or Issuing Lender responsible for administering
the Loans or Letters of Credit of such Lender or Issuing Lender, as the case may
be, becomes aware of the occurrence of an event or the existence of a condition
that would cause such Lender to become an Affected Lender or that would entitle
such Lender or Issuing Lender to receive payments under subsection 2.7 or
subsection 3.6, it will, to the extent not inconsistent with the internal
policies of such Lender or Issuing Lender and any applicable legal or regulatory
restrictions, use reasonable efforts (i) to make, issue, fund or maintain the
Commitment of such Lender or the affected Loans or Letters of Credit of such
Lender or Issuing Lender through another lending or letter of credit office of
such Lender or Issuing Lender, or (ii) take such other measures as such Lender
or Issuing Lender may deem reasonable, if as a result thereof the circumstances
which would cause such Lender to be an Affected Lender would cease to exist or
the additional amounts which would otherwise be required to be paid to such
Lender or Issuing Lender pursuant to subsection 2.7 or subsection 3.6 would be
materially reduced and if, as determined by such Lender or Issuing Lender in
its sole discretion, the making, issuing, funding or maintaining of such
Commitment or Loans or
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Letters of Credit through such other lending or letter of credit office or in
accordance with such other measures, as the case may be, would not otherwise
materially adversely affect such Commitment or Loans or Letters of Credit or the
interests of such Lender or Issuing Lender; provided that such Lender or Issuing
Lender will not be obligated to utilize such other lending or letter of credit
office pursuant to this subsection 2.8 unless the Borrowers agree to pay all
incremental expenses incurred by such Lender or Issuing Lender as a result of
utilizing such other lending or letter of credit office as described in clause
(i) above. A certificate as to the amount of any such expenses payable by the
Borrowers pursuant to this subsection 2.8 (setting forth in reasonable detail
the basis for requesting such amount) submitted by such Lender or Issuing Lender
to the Borrowers (with a copy to the Administrative Agent) shall be conclusive
absent manifest error.
2.9 REPLACEMENT OF LENDER.
In the event that any Lender shall become an Affected Lender or claim
payment of any increased costs pursuant to subsection 2.7 or any additional
amounts pursuant to subsection 3.6, the Borrowers shall have the right, if no
Event of Default or Potential Event of Default then exists, to replace such
Affected Lender with an Eligible Assignee; provided that such Eligible Assignee,
(i) if it is not a Lender, shall be reasonably acceptable to the Administrative
Agent, (ii) shall purchase all of such Affected Lender's rights hereunder and
interest in the Obligations owing to such Affected Lender and the Notes held by
such Affected Lender without recourse at the principal amount of such Notes plus
interest and fees accrued thereon to the date of such purchase on a date therein
specified, and (iii) shall execute and deliver to the Administrative Agent an
Assignment Agreement; provided, further, that no Lender shall have any
obligation to increase its Commitment or otherwise to replace, in whole or in
part, any Lender. Upon satisfaction of the requirements set forth in the first
sentence of this subsection 2.9, payment to such Affected Lender of the purchase
price in immediately available funds, and the payment by the Borrowers of all
requested costs accruing to the date of purchase which the Borrowers are
obligated to pay under subsection 10.2 and all other amounts owed by the
Borrowers to such Affected Lender (other than the principal of and interest on
the Obligations of such Affected Lender purchased by the replacement commercial
bank or other financial institution but including compensation for breakage
under subsection 2.6D if such purchase occurs prior to the last day of the
applicable Interest Period, if any), and the replacement Eligible Assignee shall
constitute a "Lender" hereunder with a Commitment as so specified and the
Affected Lender being so replaced shall, except for purposes of subsections 10.2
and 10.3, no longer constitute a "Lender" hereunder (with the signature pages
being amended to reflect same).
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SECTION 3.
LETTERS OF CREDIT
3.1 ISSUANCE OF LETTERS OF CREDIT AND THE LENDERS' PURCHASE OF
PARTICIPATIONS THEREIN.
A. LETTERS OF CREDIT. In addition to the Borrowers requesting
that the Lenders make Revolving Loans pursuant to subsection 2.1A(i), the
Canadian Lender make Canadian Loans pursuant to subsection 2.1A(iii), and that
the Swing Line Lender make Swing Line Loans pursuant to subsection 2.1A(ii),
the Company may request, in accordance with the provisions of this subsection
3.1, from time to time during the period from the Closing Date to but excluding
the Maturity Date, that one or more of the Lenders issue Letters of Credit for
the account of the Company for the purposes specified in the definitions of
Commercial Letters of Credit and Standby Letters of Credit. All Existing
Letters of Credit shall be Letters of Credit for all purposes of the Loan
Documents and shall be deemed to be issued and outstanding under this
Agreement. Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of the Borrowers herein set
forth, any one or more of the Lenders may, but (except as provided in
subsection 3.1B(ii)) shall not be obligated to, issue such Letters of Credit in
accordance with the provisions of this subsection 3.1; provided that the
Company shall not request that any Lender issue (and no Lender shall issue):
(i) any Letter of Credit if, after giving effect to such
issuance, the Total Utilization would exceed the Revolving Loan
Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed $10,000,000;
(iii) any Standby Letter of Credit having an expiration
date later than the earlier of (a) the Maturity Date and (b) the date
which is one year from the date of issuance of such Standby Letter of
Credit; provided that the immediately preceding clause (b) shall not
prevent any Issuing Lender from agreeing that a Standby Letter of
Credit will automatically be extended for one or more successive
periods not to exceed one year each unless such Issuing Lender elects
not to extend for any such additional period; and provided, further
that unless Requisite Lenders (or, if required by subsection 10.6,
each Lender) have otherwise consented in writing, such Issuing Lender
shall elect not to extend such Standby Letter of Credit if it has
knowledge that an Event of Default has occurred and is continuing (and
has not been waived in accordance with subsection 10.6) at the time
such Issuing Lender must elect whether or not to allow such extension;
or
(iv) any Commercial Letter of Credit having an expiration
date (a) later than the earlier of (X) the Maturity Date and (Y) the
date which is 180 days from the date of issuance of such Commercial
Letter of Credit or (b) that is otherwise unacceptable to the
applicable Issuing Lender in its reasonable discretion; or
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(v) any Letter of Credit denominated in a currency other
than Dollars.
B. MECHANICS OF ISSUANCE.
(i) Notice of Issuance. Whenever the Company desires the
issuance of a Letter of Credit, it shall deliver to the proposed
Issuing Lender and the Administrative Agent a Notice of Issuance of
Letter of Credit substantially in the form of Exhibit III annexed
hereto no later than 12:00 Noon (New York City time) at least three
Business Days (in the case of Standby Letters of Credit) or five
Business Days (in the case of Commercial Letters of Credit), or in
each case such shorter period as may be agreed to by the Issuing
Lender in any particular instance, in advance of the proposed date of
issuance. The Notice of Issuance of Letter of Credit shall specify
(a) the Lender requested to issue the Letter of Credit, (b) the
proposed date of issuance (which shall be a Business Day), (c) whether
the Letter of Credit is to be a Standby Letter of Credit or a
Commercial Letter of Credit, (d) the face amount of the Letter of
Credit, (e) the expiration date of the Letter of Credit, (f) the name
and address of the beneficiary, and (g) either the verbatim text of
the proposed Letter of Credit or the proposed terms and conditions
thereof, including a precise description of any documents to be
presented by the beneficiary which, if presented by the beneficiary
prior to the expiration date of the Letter of Credit, would require
the Issuing Lender to make payment under the Letter of Credit;
provided that the Issuing Lender, in its reasonable discretion, may
require changes in the text of the proposed Letter of Credit or any
such documents; and provided, further that no Letter of Credit shall
require payment against a conforming draft to be made thereunder on
the same business day (under the laws of the jurisdiction in which the
office of the Issuing Lender to which such draft is required to be
presented is located) that such draft is presented if such
presentation is made after 10:00 A.M. (in the time zone of such office
of the Issuing Lender) on such business day.
The Company shall notify the applicable Issuing Lender (and
the Administrative Agent, if the Administrative Agent is not such
Issuing Lender) prior to the issuance of any Letter of Credit in the
event that any of the matters to which the Company is required to
certify in the applicable Notice of Issuance of Letter of Credit is no
longer true and correct as of the proposed date of issuance of such
Letter of Credit, and upon the issuance of any Letter of Credit the
Company shall be deemed to have re-certified, as of the date of such
issuance, as to the matters to which the Company is required to
certify in the applicable Notice of Issuance of Letter of Credit.
(ii) Determination of Issuing Lender. Upon receipt by a
proposed Issuing Lender of a Notice of Issuance of Letter of Credit
pursuant to subsection 3.1B(i) requesting the issuance of a Letter of
Credit, (a) in the event the Administrative Agent is the proposed
Issuing Lender, the Administrative Agent shall be the Issuing Lender
with respect to such Letter of Credit, notwithstanding the fact that
the Letter of Credit Usage with respect to such Letter of Credit and
with respect to all other
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Letters of Credit issued by the Administrative Agent, when aggregated
with the Administrative Agent's outstanding Revolving Loans and Swing
Line Loans, may exceed the Administrative Agent's Revolving Loan
Commitment then in effect; and (b) in the event any other Lender is
the proposed Issuing Lender, such Lender shall promptly notify the
Company and the Administrative Agent whether or not, in its sole
discretion, it has elected to issue such Letter of Credit, and (1) if
such Lender so elects to issue such Letter of Credit it shall be the
Issuing Lender with respect thereto (notwithstanding the fact that the
Letter of Credit Usage with respect to such Letter of Credit and with
respect to all other Letters of Credit issued by such Lender, when
aggregated with such Lender's outstanding Revolving Loans and Swing
Line Loans, may exceed such Lender's Revolving Loan Commitment then in
effect) and (2) if such Lender fails to so promptly notify the Company
and the Administrative Agent or declines to issue such Letter of
Credit, Company may request the Administrative Agent or another Lender
to be the Issuing Lender with respect to such Letter of Credit in
accordance with the provisions of this subsection 3.1B.
(iii) Issuance of Letter of Credit. Upon satisfaction or
waiver (in accordance with subsection 10.6) of the conditions set
forth in subsection 4.3, the Issuing Lender shall issue the requested
Letter of Credit in accordance with the Issuing Lender's standard
operating procedures.
(iv) Notification to the Lenders. Upon the issuance of
any Letter of Credit the applicable Issuing Lender shall promptly
notify the Administrative Agent. Upon any expiration, cancellation or
other termination of a Letter of Credit, the applicable Issuing Lender
shall promptly notify the Administrative Agent of such event; provided
that if such expiration, cancellation or other termination occurs on
the last or the penultimate Business Day of any calendar quarter, the
Issuing Lender shall provide the Administrative Agent immediate
telephonic notice of such event.
C. THE LENDERS' PURCHASE OF PARTICIPATIONS IN LETTERS OF CREDIT.
Immediately upon the issuance of each Letter of Credit, each Lender shall be
deemed to, and hereby agrees to, have irrevocably purchased from the Issuing
Lender a participation in such Letter of Credit and any drawings honored
thereunder in an amount equal to such Lender's Pro Rata Share of the maximum
amount which is or at any time may become available to be drawn thereunder.
3.2 LETTER OF CREDIT FEES.
The Company agrees to pay the following amounts with respect to
Letters of Credit issued hereunder:
(i) with respect to each Letter of Credit, (a) a fronting
fee, payable directly to the applicable Issuing Lender for its own
account, in the applicable amount agreed to between the Issuing Lender
and the Company, and (b) a letter of credit fee, payable to the
Administrative Agent for the account of the Lenders, equal
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to the product of (1) a per annum rate equal to the Applicable Margin
multiplied by (2) the daily amount available to be drawn under such
Letter of Credit, each such fronting fee or letter of credit fee to be
payable in arrears on and to (but excluding) the last Business Day of
each calendar quarter of each year and computed on the basis of a
360-day year for the actual number of days elapsed; and
(ii) with respect to the issuance, amendment or transfer
of each Letter of Credit and each payment of a drawing made thereunder
(without duplication of the fees payable under clause (i) above),
documentary and processing charges payable directly to the applicable
Issuing Lender for its own account in accordance with such Issuing
Lender's standard schedule for such charges in effect at the time of
such issuance, amendment, transfer or payment, as the case may be.
For purposes of calculating any fees payable under clause (i) of this
subsection 3.2, the daily amount available to be drawn under any Letter of
Credit shall be determined as of the close of business on any date of
determination. Promptly upon receipt by the Administrative Agent of any amount
described in clause (i)(b) of this subsection 3.2, the Administrative Agent
shall distribute to each Lender its Pro Rata Share of such amount.
3.3 DRAWINGS AND REIMBURSEMENT OF AMOUNTS PAID UNDER LETTERS OF CREDIT.
A. RESPONSIBILITY OF ISSUING LENDER WITH RESPECT TO DRAWINGS. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine
the documents delivered under such Letter of Credit with reasonable care so as
to ascertain whether they appear on their face to be in accordance with the
terms and conditions of such Letter of Credit.
B. REIMBURSEMENT BY THE COMPANY OF AMOUNTS PAID UNDER LETTERS OF
CREDIT. In the event an Issuing Lender has determined to honor a drawing under
a Letter of Credit issued by it, such Issuing Lender shall immediately notify
the Company and the Administrative Agent, and the Company shall reimburse such
Issuing Lender on or before the Business Day immediately following the date on
which such drawing is honored (the "REIMBURSEMENT DATE") in an amount in
Dollars and in same day funds equal to the amount of such honored drawing;
provided that, anything contained in this Agreement to the contrary
notwithstanding, (i) unless the Company shall have notified the Administrative
Agent and such Issuing Lender prior to 10:00 A.M. (New York City time) on the
date such drawing is honored that the Company intends to reimburse such Issuing
Lender for the amount of such honored drawing with funds other than the
proceeds of Loans, the Company shall be deemed to have given a timely Notice of
Borrowing to the Administrative Agent requesting the Lenders to make Loans that
are Base Rate Loans on the Reimbursement Date in an amount in Dollars equal to
the amount of such honored drawing and (ii) subject to satisfaction or waiver
of the conditions specified in subsection 4.2B, the Lenders shall, on the
Reimbursement Date, make Loans that are Base Rate Loans in the amount of such
honored drawing, the proceeds of which shall be applied directly by the
Administrative Agent to reimburse such Issuing Lender for the amount of such
honored drawing; and provided, further that if for any reason
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proceeds of Loans are not received by such Issuing Lender on the Reimbursement
Date in an amount equal to the amount of such honored drawing, the Company
shall reimburse such Issuing Lender, on demand, in an amount in same day funds
equal to the excess of the amount of such honored drawing over the aggregate
amount of such Loans, if any, which are so received. Nothing in this
subsection 3.3B shall be deemed to relieve any Lender from its obligation to
make Loans on the terms and conditions set forth in this Agreement, and the
Company shall retain any and all rights it may have against any Lender
resulting from the failure of such Lender to make such Loans under this
subsection 3.3B.
C. PAYMENT BY THE LENDERS OF UNREIMBURSED AMOUNTS PAID UNDER
LETTERS OF CREDIT.
(i) Payment by the Lenders. In the event that the
Company shall fail for any reason to reimburse any Issuing Lender as
provided in subsection 3.3B in an amount equal to the amount of any
drawing honored by such Issuing Lender under a Letter of Credit issued
by it, such Issuing Lender shall promptly notify each other Lender of
the unreimbursed amount of such honored drawing and of such other
Lender's respective participation therein based on such Lender's Pro
Rata Share. Each Lender shall make available to such Issuing Lender
an amount equal to its respective participation, in Dollars and in
same day funds, at the office of such Issuing Lender specified in such
notice, not later than 2:00 P.M. (New York City time) on the first
business day (under the laws of the jurisdiction in which such office
of such Issuing Lender is located) after the date notified by such
Issuing Lender. In the event that any Lender fails to make available
to such Issuing Lender on such business day the amount of such
Lender's participation in such Letter of Credit as provided in this
subsection 3.3C, such Issuing Lender shall be entitled to recover such
amount on demand from such Lender together with interest thereon at
the rate customarily used by such Issuing Lender for the correction of
errors among banks for three Business Days and thereafter at the Base
Rate. Nothing in this subsection 3.3C shall be deemed to prejudice
the right of any Lender to recover from any Issuing Lender any amounts
made available by such Lender to such Issuing Lender pursuant to this
subsection 3.3C in the event that it is determined by the final
judgment of a court of competent jurisdiction that the payment with
respect to a Letter of Credit by such Issuing Lender in respect of
which payment was made by such Lender constituted gross negligence or
willful misconduct on the part of such Issuing Lender.
(ii) Distribution to the Lenders of Reimbursements
Received From the Company. In the event any Issuing Lender shall have
been reimbursed by the other Lenders pursuant to subsection 3.3C(i)
for all or any portion of any drawing honored by such Issuing Lender
under a Letter of Credit issued by it, such Issuing Lender shall
distribute to each other Lender which has paid all amounts payable by
it under subsection 3.3C(i) with respect to such honored drawing such
other Lender's Pro Rata Share of all payments subsequently received by
such Issuing Lender from the Company in reimbursement of such honored
drawing when such payments are received. Any such distribution shall
be made to a Lender at its primary address set
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forth below its name on the appropriate signature page hereof or at
such other address as such Lender may request.
D. INTEREST ON AMOUNTS PAID UNDER LETTERS OF CREDIT.
(i) Payment of Interest by the Company. The Company
agrees to pay to each Issuing Lender, with respect to drawings honored
under any Letters of Credit issued by it, interest on the amount paid
by such Issuing Lender in respect of each such honored drawing from
the date such drawing is honored to but excluding the date such amount
is reimbursed by the Company (including any such reimbursement out of
the proceeds of Loans pursuant to subsection 3.3B) at a rate equal to
(a) for the period from the date such drawing is honored to but
excluding the Reimbursement Date, the rate then in effect under this
Agreement with respect to Loans that are Base Rate Loans and (b)
thereafter, a rate which is 2% per annum in excess of the rate of
interest otherwise payable under this Agreement with respect to Loans
that are Base Rate Loans. Interest payable pursuant to this
subsection 3.3D(i) shall be computed on the basis of a 360-day year
for the actual number of days elapsed in the period during which it
accrues and shall be payable on demand or, if no demand is made, on
the date on which the related drawing under a Letter of Credit is
reimbursed in full.
(ii) Distribution of Interest Payments by Issuing Lender.
Promptly upon receipt by any Issuing Lender of any payment of interest
pursuant to subsection 3.3D(i) with respect to a drawing honored under
a Letter of Credit issued by it, (a) such Issuing Lender shall
distribute to each other Lender, out of the interest received by such
Issuing Lender in respect of the period from the date such drawing is
honored to but excluding the date on which such Issuing Lender is
reimbursed for the amount of such drawing (including any such
reimbursement out of the proceeds of Loans pursuant to subsection
3.3B), the amount that such other Lender would have been entitled to
receive in respect of the letter of credit fee that would have been
payable in respect of such Letter of Credit for such period pursuant
to subsection 3.2 if no drawing had been honored under such Letter of
Credit, and (b) in the event such Issuing Lender shall have been
reimbursed by other the Lenders pursuant to subsection 3.3C(i) for all
or any portion of such honored drawing, such Issuing Lender shall
distribute to each other Lender which has paid all amounts payable by
it under subsection 3.3C(i) with respect to such honored drawing such
other Lender's Pro Rata Share of any interest received by such Issuing
Lender in respect of that portion of such honored drawing so
reimbursed by other the Lenders for the period from the date on which
such Issuing Lender was so reimbursed by other the Lenders to but
excluding the date on which such portion of such honored drawing is
reimbursed by the Company. Any such distribution shall be made to a
Lender at its primary address set forth below its name on the
appropriate signature page hereof or at such other address as such
Lender may request.
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3.4 OBLIGATIONS ABSOLUTE.
The obligation of the Company to reimburse each Issuing Lender for
drawings honored under the Letters of Credit issued by it and to repay any
Loans made by the Lenders pursuant to subsection 3.3B and the obligations of
the Lenders under subsection 3.3C(i) shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances including any of the following circumstances:
(i) any lack of validity or enforceability of any Letter
of Credit;
(ii) the existence of any claim, set-off, defense or other
right which the Company or any Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons
for whom any such transferee may be acting), any Issuing Lender or
other Lender or any other Person or, in the case of a Lender, against
the Company, whether in connection with this Agreement, the
transactions contemplated herein or any unrelated transaction
(including any underlying transaction between the Company or one of
its Subsidiaries and the beneficiary for which any Letter of Credit
was procured);
(iii) any draft or other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) payment by the applicable Issuing Lender under any
Letter of Credit against presentation of a draft or other document
which does not substantially comply with the terms of such Letter of
Credit;
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of
the Company or any of its respective Subsidiaries;
(vi) any breach of this Agreement or any other Loan
Document by any party thereto;
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential
Event of Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
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3.5 INDEMNIFICATION; NATURE OF THE ISSUING LENDERS' DUTIES.
A. INDEMNIFICATION. In addition to amounts payable as provided
in subsection 3.6, the Company hereby agrees to protect, indemnify, pay and
save harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which such Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the gross negligence or willful
misconduct of such Issuing Lender as determined by a final judgment of a court
of competent jurisdiction or (b) subject to the following clause (ii), the
wrongful dishonor by such Issuing Lender of a proper demand for payment made
under any Letter of Credit issued by it or (ii) the failure of such Issuing
Lender to honor a drawing under any such Letter of Credit as a result of any
act or omission, whether rightful or wrongful, of any present or future de jure
or de facto government or governmental authority (all such acts or omissions
herein called "GOVERNMENTAL ACTS").
B. NATURE OF THE ISSUING LENDERS' DUTIES. As between the Company
and any Issuing Lender, the Company assumes all risks of the acts and omissions
of, or misuse of the Letters of Credit issued by such Issuing Lender by, the
respective beneficiaries of such Letters of Credit. In furtherance and not in
limitation of the foregoing, such Issuing Lender shall not be responsible for:
(i) the form, validity, sufficiency, accuracy, genuineness or legal effect of
any document submitted by any party in connection with the application for and
issuance of any such Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged;
(ii) the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason; (iii) failure of the beneficiary
of any such Letter of Credit to comply fully with any conditions required in
order to draw upon such Letter of Credit; (iv) errors, omissions, interruptions
or delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission
or otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from causes beyond
the control of such Issuing Lender, including any Governmental Acts, and none
of the above shall affect or impair, or prevent the vesting of, any of such
Issuing Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by any Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted in good faith, shall not put such Issuing Lender under any
resulting liability to the Company.
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Notwithstanding anything to the contrary contained in this subsection
3.5, the Company shall retain any and all rights it may have against any
Issuing Lender for any liability arising solely out of the gross negligence or
willful misconduct of such Issuing Lender, as determined by a final judgment of
a court of competent jurisdiction.
C. INDEMNIFICATION BY LENDERS.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify the Issuing Lender, to the extent that the Issuing Lender shall not
have been reimbursed by the Borrowers, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including reasonable counsel fees and disbursements and allocated
costs of internal counsel) or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by or asserted against the Issuing Lender in
exercising its powers, rights and remedies or performing its duties as Issuing
Lender hereunder or under the other Loan Documents or otherwise in its capacity
as the Issuing Lender; provided that no Lender shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the Issuing
Lender's gross negligence or willful misconduct.
3.6 INCREASED COSTS AND TAXES RELATING TO LETTERS OF CREDIT.
Subject to the provisions of subsection 2.7B (which shall be
controlling with respect to the matters covered thereby), in the event that any
Issuing Lender or Lender shall determine (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto)
that any law, treaty or governmental rule, regulation or order, or any change
therein or in the interpretation, administration or application thereof
(including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental
authority, in each case that becomes effective after the date hereof, or
compliance by any Issuing Lender or Lender with any guideline, request or
directive issued or made after the date hereof by any central bank or other
governmental or quasi-governmental authority (whether or not having the force
of law):
(i) subjects such Issuing Lender or Lender (or its
applicable lending or letter of credit office) to any additional Tax
(other than any Tax on the overall net income of such Issuing Lender
or Lender) with respect to the issuing or maintaining of any Letters
of Credit or the purchasing or maintaining of any participations
therein or any other obligations under this Section 3, whether
directly or by such being imposed on or suffered by any particular
Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement in respect of any Letters of Credit issued by any Issuing
Lender or participations therein purchased by any Lender; or
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(iii) imposes any other condition (other than with respect
to a Tax matter) on or affecting such Issuing Lender or Lender (or its
applicable lending or letter of credit office) regarding this Section
3 or any Letter of Credit or any participation therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender
or Lender (or its applicable lending or letter of credit office) with respect
thereto; then, in any case, the Company shall promptly pay to such Issuing
Lender or Lender, upon receipt of the statement referred to in the next
sentence, such additional amount or amounts as may be necessary to compensate
such Issuing Lender or Lender for any such increased cost or reduction in
amounts received or receivable hereunder. Such Issuing Lender or Lender shall
deliver to the Company a written statement, setting forth in reasonable detail
the basis for calculating the additional amounts owed to such Issuing Lender or
Lender under this subsection 3.6, which statement shall be conclusive and
binding upon all parties hereto absent manifest error.
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of the Lenders to make Loans and the issuance of
Letters of Credit hereunder are subject to the satisfaction of the following
conditions.
4.1 CONDITIONS TO INITIAL LOANS.
The obligations of the Lenders to make any Loans to be made on the
Closing Date are, in addition to the conditions precedent specified in
subsection 4.2, subject to prior or concurrent satisfaction of the following
conditions:
A. LOAN PARTY DOCUMENTS. On or before the Closing Date, the
Borrowers shall deliver, and shall cause each other Loan Party to deliver to
the Lenders (or to the Administrative Agent for the Lenders with sufficient
originally executed copies, where appropriate, for each Lender and its counsel)
the following with respect to the Borrowers or such Loan Party, each, unless
otherwise noted, dated the Closing Date:
(i) Certified copies of the Certificate or Articles of
Incorporation, partnership agreement or other organizational document,
together with a good standing certificate from the Secretary of State
of its jurisdiction of organization and each other state in which such
Person is qualified to do business and, to the extent generally
available, a certificate or other evidence of good standing as to
payment of any applicable franchise or similar taxes from the
appropriate taxing authority of each of such jurisdictions, each dated
a recent date prior to the Closing Date;
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(ii) Copies of the Bylaws of such Person, certified as of
the Closing Date by such Person's corporate secretary or an assistant
secretary or, with respect to a partnership, such Person's general
partner;
(iii) Resolutions of the Board of Directors of such Person
or, with respect to a partnership, any required consents of the
partners, approving and authorizing the execution, delivery and
performance of the Loan Documents to which it is a party, certified as
of the Closing Date by the corporate secretary of such Person or an
assistant secretary, or, if applicable, the general partner of such
Person as being in full force and effect without modification or
amendment;
(iv) Signature and incumbency certificates of the officer
or partner of such Person executing the Loan Documents to which it is
a party;
(v) Executed originals of the Loan Documents to which
such Person is a party;
(vi) A Certificate of Status evidencing Wolverine Canada's
due and valid existence as a corporation incorporated under the laws
of the Province of Ontario, issued by the Ontario Ministry of Consumer
and Commercial Relations and certificates evidencing Wolverine
Canada's authority to transact business as an extra- provincial
foreign corporation duly registered under the laws of the Provinces of
Quebec and British Columbia, each issued by the relevant Canadian
authorities; and
(vii) Such other documents as the Administrative Agent may
reasonably request.
B. NO MATERIAL ADVERSE EFFECT. Since December 31, 1996, no
Material Adverse Effect (in the sole opinion of the Administrative Agent) shall
have occurred.
C. OPINIONS OF LOAN PARTIES' COUNSEL. The Lenders and their
respective counsel shall have received (i) originally executed copies of one or
more favorable written opinions of Jones, Day, Reavis & Pogue, and McKenzie
Nash Bryant, counsel for the Loan Parties, in form and substance reasonably
satisfactory to the Administrative Agent and its counsel, dated as of the
Closing Date and setting forth substantially the matters in the opinions
designated in Exhibit VII-A and Exhibit VII-B annexed hereto and as to such
other matters as the Administrative Agent acting on behalf of the Lenders may
reasonably request and (ii) evidence satisfactory to the Administrative Agent
that the Borrowers have requested such counsel to deliver such opinions to the
Lenders.
D. OPINIONS OF THE ADMINISTRATIVE AGENT'S COUNSEL. The Lenders
shall have received originally executed copies of one or more favorable written
opinions of O'Melveny & Myers LLP, counsel to the Administrative Agent, dated
as of the Closing Date, substantially in the form of Exhibit VIII annexed
hereto and as to such other matters as the Administrative Agent acting on
behalf of the Lenders may reasonably request.
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E. EVIDENCE OF INSURANCE. The Administrative Agent shall have
received a certificate from the Borrowers' insurance broker or other evidence
satisfactory to it that all insurance required to be maintained pursuant to
subsection 6.4 is in full force and effect.
F. FEES. The Borrowers shall have paid to the Administrative
Agent, for distribution (as appropriate) to the Administrative Agent and the
Lenders, the fees payable on the Closing Date referred to in subsection 2.3.
G. TERMINATION OF EXISTING DEBT. On or before the Closing Date,
each Loan Party shall repay all principal and interest on outstanding loans and
other obligations owed under or related to the Existing Debt and shall
terminate the obligation to lend or make other extensions of credit to such
Loan Party under the provisions of such agreements; provided, that the Existing
Letters of Credit shall remain outstanding but shall be deemed issued under
this Agreement. Concurrently with such repayment, any Liens granted pursuant
to the Existing Debt or the documents delivered thereunder shall be released.
The Existing Lenders shall have delivered to the Administrative Agent written
acknowledgements of such terminations and releases in form and substance
satisfactory to the Administrative Agent. All of the foregoing shall be
accomplished in form and substance satisfactory to the Administrative Agent.
H. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS.
The Borrowers shall have delivered to the Administrative Agent an Officer's
Certificate, in form and substance satisfactory to the Administrative Agent, to
the effect that the representations and warranties in Section 5 hereof are
true, correct and complete in all material respects on and as of the Closing
Date to the same extent as though made on and as of that date (or, to the
extent such representations and warranties specifically relate to an earlier
date, that such representations and warranties were true, correct and complete
in all material respects on and as of such earlier date) and that the Borrowers
shall have performed in all material respects all agreements and satisfied all
conditions which this Agreement provides shall be performed or satisfied by it
on or before the Closing Date except as otherwise disclosed to and agreed to in
writing by the Administrative Agent and the Requisite Lenders.
I. COMPLETION OF PROCEEDINGS. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by the Administrative Agent, acting on behalf of the Lenders, and
its counsel shall be satisfactory in form and substance to the Administrative
Agent and such counsel, and the Administrative Agent and such counsel shall
have received all such counterpart originals or certified copies of such
documents as the Administrative Agent may reasonably request.
J. CAPITAL STRUCTURE. The corporate organizational structure and
the capital structure of the Company and its Subsidiaries shall be as set forth
on Schedule 4.1J annexed hereto.
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4.2 CONDITIONS TO ALL LOANS.
The obligations of the Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:
A. The Administrative Agent shall have received before
that Funding Date, except as provided with respect to Swing Line Loans
in subsection 2.1A(ii), in accordance with the provisions of
subsection 2.1B, an originally executed Notice of Borrowing, in each
case signed by the chief executive officer, the chief financial
officer or the treasurer of the applicable Borrower or by any
executive officer of the applicable Borrower designated by any of the
above-described officers on behalf of the Borrowers in a writing
delivered to the Administrative Agent.
B. As of that Funding Date:
(i) The representations and warranties contained
herein and in the other Loan Documents shall be true, correct
and complete in all material respects on and as of that
Funding Date to the same extent as though made on and as of
that date, except to the extent such representations and
warranties specifically relate to an earlier date, in which
case such representations and warranties shall have been true,
correct and complete in all material respects on and as of
such earlier date;
(ii) No event shall have occurred and be
continuing or would result from the consummation of the
borrowing contemplated by such Notice of Borrowing that would
constitute an Event of Default or a Potential Event of
Default;
(iii) Each Loan Party shall have performed in all
material respects all agreements and satisfied all conditions
which this Agreement provides shall be performed or satisfied
by it on or before that Funding Date;
(iv) No order, judgment or decree of any court,
arbitrator or governmental authority shall purport to enjoin
or restrain any Lender from making the Loans to be made by it
on that Funding Date; and
(v) The making of the Loans requested on such
Funding Date shall not violate any law including Regulation G,
Regulation T, Regulation U or Regulation X of the Board of
Governors of the Federal Reserve System.
4.3 CONDITIONS TO LETTERS OF CREDIT.
The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
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A. On or before the date of issuance of the initial
Letter of Credit pursuant to this Agreement, the initial Loans shall
have been made.
B. On or before the date of issuance of such Letter of
Credit, the Administrative Agent shall have received, in accordance
with the provisions of subsection 3.1B(i), an originally executed
Notice of Issuance of Letter of Credit, in each case signed by the
chief executive officer, the chief financial officer or the treasurer
of the Company or by any executive officer of the Company designated
by any of the above-described officers on behalf of the Company in a
writing delivered to the Administrative Agent, together with all other
information specified in subsection 3.1B(i) and such other documents
or information as the applicable Issuing Lender may reasonably require
in connection with the issuance of such Letter of Credit.
C. On the date of issuance of such Letter of Credit, all
conditions precedent described in subsection 4.2B shall be satisfied
to the same extent as if the issuance of such Letter of Credit were
the making of a Loan and the date of issuance of such Letter of Credit
were a Funding Date.
SECTION 5.
THE BORROWERS' REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to
make the Loans, to induce the Issuing Lenders to issue Letters of Credit and to
induce the other Lenders to purchase participations therein, each Borrower
represents and warrants to the Administrative Agent and each Lender, on the
date of this Agreement, on each Funding Date and on the date of issuance of
each Letter of Credit, that the following statements are true, correct and
complete:
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
A. ORGANIZATION AND POWERS. Each Loan Party is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization as specified in Schedule 5.1 annexed hereto. Each
Loan Party has all requisite corporate power and authority to own and operate
its properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Loan Documents to which it is a party and to carry
out the transactions contemplated thereby.
B. QUALIFICATION AND GOOD STANDING. Each Loan Party is qualified
to do business and in good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its business and operations, except
in jurisdictions where the failure to be so qualified or in good standing has
not had and will not have a Material Adverse Effect.
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C. CONDUCT OF BUSINESS. The Borrowers and their respective
Subsidiaries are engaged only in the businesses permitted to be engaged in
pursuant to subsection 7.14.
D. SUBSIDIARIES. All of the Subsidiaries of the Borrowers as of
the Closing Date are identified in Schedule 5.1 annexed hereto, as said
Schedule 5.1 may be supplemented from time to time pursuant to the provisions
of subsection 6.1(xiv). The capital stock of each of the Subsidiaries of the
Borrowers identified in Schedule 5.1 annexed hereto (as so supplemented) is
duly authorized, validly issued, fully paid and nonassessable and none of such
capital stock constitutes Margin Stock. Each of the Subsidiaries of the
Borrowers identified in Schedule 5.1 annexed hereto (as so supplemented) is a
corporation duly organized, validly existing and in good standing under the
laws of its respective jurisdiction of incorporation set forth therein, has all
requisite corporate power and authority to own and operate its properties and
to carry on its business as now conducted and as proposed to be conducted, and
is qualified to do business and in good standing in every jurisdiction where
its assets are located and wherever necessary to carry out its business and
operations, in each case except where failure to be so qualified or in good
standing or a lack of such corporate power and authority has not had and will
not have a Material Adverse Effect. Schedule 5.1 annexed hereto (as so
supplemented) correctly sets forth, as of the Closing Date, the ownership
interest of the Borrowers and each of their respective Subsidiaries in each of
the Subsidiaries of the Borrowers identified therein.
5.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery and
performance of the Loan Documents have been duly authorized by all necessary
corporate action on the part of each Loan Party that is a party thereto.
B. NO CONFLICT. The execution, delivery and performance by the
Loan Parties of the Loan Documents and the consummation of the transactions
contemplated by the Loan Documents do not and will not (i) violate any
provision of any law or any governmental rule or regulation applicable to any
Borrower or any of its respective Subsidiaries, the Certificate or Articles of
Incorporation or Bylaws of any Borrower or any of its respective Subsidiaries
or any order, judgment or decree of any court or other agency of government
binding on any Borrower or any of its respective Subsidiaries, (ii) conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any Contractual Obligation of any Borrower or any of its
respective Subsidiaries, (iii) result in or require the creation or imposition
of any Lien upon any of the properties or assets of any Borrower or any of its
respective Subsidiaries (other than any Liens created under any of the Loan
Documents in favor of the Administrative Agent on behalf of the Lenders), or
(iv) require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of any Borrower or any of its
respective Subsidiaries, except for such approvals or consents which will be
obtained on or before the Closing Date and disclosed in writing to the Lenders.
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C. GOVERNMENTAL CONSENTS. The execution, delivery and
performance by the Loan Parties of the Loan Documents and the consummation of
the transactions contemplated by the Loan Documents do not and will not require
any registration with, consent or approval of, or notice to, or other action
to, with or by, any federal, state or other governmental authority or
regulatory body.
D. BINDING OBLIGATION. Each of the Loan Documents has been duly
executed and delivered by each Loan Party that is a party thereto and is the
legally valid and binding obligation of such Loan Party, enforceable against
such Loan Party in accordance with its respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
E. VALID ISSUANCE OF COMPANY COMMON STOCK. The Company Common
Stock outstanding on the Closing Date is duly and validly issued, fully paid
and nonassessable. No stockholder of the Company has any preemptive rights to
subscribe for any additional equity Securities of the Company.
5.3 FINANCIAL CONDITION.
The Borrowers have heretofore delivered to the Lenders, at the
Lenders' request, the following financial statements and information: (i) the
audited consolidated balance sheet of the Company and its Subsidiaries as at
December 31, 1996 and the related consolidated statements of income,
stockholders' equity and cash flows of the Company and its Subsidiaries for the
Fiscal Year then ended and (ii) the unaudited consolidated statement of income
of the Company and its Subsidiaries for the three months ended March 31, 1997.
All such statements were prepared in conformity with GAAP and fairly present,
in all material respects, the financial position (on a consolidated basis) of
the entities described in such financial statements as at the respective dates
thereof and the results of operations and cash flows (on a consolidated basis)
of the entities described therein for each of the periods then ended, subject,
in the case of any such unaudited financial statements, to changes resulting
from audit and normal year-end adjustments. The Borrowers do not (and will not
following the funding of the initial Loans or other extension of credit) have
any Contingent Obligation, contingent liability or liability for taxes,
long-term lease or unusual forward or long-term commitment that is not
reflected in the foregoing financial statements or the notes thereto and which
in any such case is material in relation to the business, operations,
properties, assets, condition (financial or otherwise) or prospects of the
Company and its Subsidiaries taken as a whole.
5.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.
Since December 31, 1996, no event or change has occurred that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect. Neither the Borrowers nor any of their respective Subsidiaries has
directly or indirectly declared,
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ordered, paid or made, or set apart any sum or property for, any Restricted
Junior Payment or agreed to do so except as permitted by subsection 7.5.
5.5 TITLE TO PROPERTIES; LIENS.
The Borrowers and their respective Subsidiaries have (i) good,
sufficient and legal title to (in the case of fee interests in real property),
(ii) valid leasehold interests in (in the case of leasehold interests in real
or personal property), or (iii) good title to (in the case of all other
personal property), all of their respective properties and assets reflected in
the financial statements referred to in subsection 5.3 or in the most recent
financial statements delivered pursuant to subsection 6.1, in each case except
for assets disposed of since the date of such financial statements in the
ordinary course of business or as otherwise permitted under subsection 7.7.
Except as permitted by this Agreement, all such properties and assets are free
and clear of Liens.
5.6 LITIGATION; ADVERSE FACTS.
Except as set forth in Schedule 5.6 annexed hereto, there are no
actions, suits, proceedings, arbitrations or governmental investigations
(whether or not purportedly on behalf of any Borrower or any of its respective
Subsidiaries) at law or in equity, or before or by any federal, state,
municipal or other governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign (including any Environmental Claims)
that are pending or, to the knowledge of the Borrowers, threatened against or
affecting any Borrower or any of its respective Subsidiaries or any property of
any Borrower or any of its respective Subsidiaries and that, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Effect. Neither the Borrowers nor any of their respective Subsidiaries (i) is
in violation of any applicable laws (including Environmental Laws) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect, or (ii) is subject to or in default with respect to
any final judgments, writs, injunctions, decrees, rules or regulations of any
court or any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect.
5.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 6.3, all tax returns and
reports of the Borrowers and their respective Subsidiaries required to be filed
by any of them have been timely filed, and all taxes shown on such tax returns
to be due and payable and all assessments, fees and other governmental charges
upon the Borrowers and their respective Subsidiaries and upon their respective
properties, assets, income, businesses and franchises which are due and payable
have been paid when due and payable. The Borrowers know of no proposed tax
assessment against any Borrower or any of its respective Subsidiaries which is
not being actively contested by such Borrower or such Subsidiary in good faith
and by appropriate proceedings; provided that such reserves or other
appropriate provisions, if
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any, as shall be required in conformity with GAAP shall have been made or
provided therefor.
5.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS; MATERIAL
CONTRACTS.
A. Neither the Borrowers nor any of their respective Subsidiaries
is in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any of its Contractual
Obligations, and no condition exists that, with the giving of notice or the
lapse of time or both, would constitute such a default, except where the
consequences, direct or indirect, of such default or defaults, if any, would
not have a Material Adverse Effect.
B. Neither the Borrowers nor any of their respective Subsidiaries
is a party to or is otherwise subject to any agreements or instruments or any
charter or other internal restrictions which, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect.
C. Schedule 5.8 contains a true, correct and complete list of all
the Material Contracts in effect on the Closing Date. Except as described on
Schedule 5.8, all such Material Contracts are in full force and effect and no
material defaults currently exist thereunder.
5.9 GOVERNMENTAL REGULATION.
Neither the Borrowers nor any of their respective Subsidiaries is
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Interstate Commerce Act or the Investment Company Act of
1940 or under any other federal or state statute or regulation which may limit
its ability to incur Indebtedness or which may otherwise render all or any
portion of the Obligations unenforceable.
5.10 SECURITIES ACTIVITIES.
Neither the Borrowers nor any of their respective Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock.
5.11 EMPLOYEE BENEFIT PLANS.
A. Each Borrower, each of their respective Subsidiaries and each
of their respective ERISA Affiliates are in compliance with all applicable
provisions and requirements of ERISA and the regulations and published
interpretations thereunder with respect to each Employee Benefit Plan, and have
performed all their obligations under each Employee Benefit Plan. Each
Employee Benefit Plan which is intended to qualify under Section 401(a) of the
Internal Revenue Code is so qualified.
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B. No ERISA Event has occurred or is reasonably expected to
occur.
C. Except to the extent required under Section 4980B of the
Internal Revenue Code or except as set forth in Schedule 5.11 annexed hereto,
no Employee Benefit Plan provides health or welfare benefits (through the
purchase of insurance or otherwise) for any retired or former employee of the
Borrowers, any of its Subsidiaries or any of their respective ERISA Affiliates.
D. As of the most recent valuation date for any Pension Plan, the
amount by which the current liability (as defined in Section 412(l)(7) of the
Internal Revenue Code) exceeds the fair market value of Plan assets,
individually or in the aggregate for all Pension Plans (excluding for purposes
of such computation any Pension Plan with respect to which assets exceed
current liability), does not exceed $$1,000,000.
E. As of the most recent valuation date for each Multiemployer
Plan for which the actuarial report is available, the potential liability of
the Borrowers, its Subsidiaries and their respective ERISA Affiliates for a
complete withdrawal from such Multiemployer Plan (within the meaning of Section
4203 of ERISA), when aggregated with such potential liability for a complete
withdrawal from all Multiemployer Plans, based on information available
pursuant to Section 4221(e) of ERISA, does not exceed $$1,000,000.
5.12 CERTAIN FEES.
No broker's or finder's fee or commission will be payable with respect
to this Agreement or any of the transactions contemplated hereby, and each
Borrower hereby indemnifies the Lenders against, and agrees that it will hold
the Lenders harmless from, any claim, demand or liability for any such broker's
or finder's fees alleged to have been incurred in connection herewith or
therewith and any expenses (including reasonable fees, expenses and
disbursements of counsel) arising in connection with any such claim, demand or
liability.
5.13 ENVIRONMENTAL PROTECTION.
Except as set forth in Schedule 5.13 annexed hereto:
(i) neither the Borrowers nor any of their respective
Subsidiaries nor any of their respective Facilities or operations are
subject to any outstanding written order, consent decree or settlement
agreement with any Person relating to (a) any Environmental Law, (b)
any Environmental Claim, or (c) any Hazardous Materials Activity that,
individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect;
(ii) neither the Borrowers nor any of their respective
Subsidiaries has received any letter or request for information under
Section 104 of the Comprehen-
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sive Environmental Response, Compensation, and Liability Act (42
U.S.C. Section 9604) or any comparable state law;
(iii) there are and, to the Borrowers' knowledge, have
been, no conditions, occurrences, or Hazardous Materials Activities
which could reasonably be expected to form the basis of an
Environmental Claim against any Borrower or any of its respective
Subsidiaries that, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect;
(iv) compliance with all current requirements pursuant to
or under Environmental Laws will not, individually or in the
aggregate, have a reasonable possibility of giving rise to a Material
Adverse Effect.
Notwithstanding anything in this subsection 5.13 to the contrary, no
event or condition has occurred or is occurring with respect to any Borrower or
any of its respective Subsidiaries relating to any Environmental Law, any
Release of Hazardous Materials, or any Hazardous Materials Activity, including
any matter disclosed on Schedule 5.13 annexed hereto, which individually or in
the aggregate has had or could reasonably be expected to have a Material
Adverse Effect.
5.14 EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or threatened
involving any Borrower or any of its respective Subsidiaries that could
reasonably be expected to have a Material Adverse Effect.
5.15 SOLVENCY.
Each Borrower and each of their respective Subsidiaries is and, upon
the incurrence of any Obligations by either Borrower on any date on which this
representation is made, will be, Solvent.
5.16 DISCLOSURE.
No representation or warranty of either Borrower or any Subsidiary of
a Borrower contained in any Loan Document or in any other document, certificate
or written statement furnished to the Lenders by or on behalf of any Borrower
or any of its respective Subsidiaries for use in connection with the
transactions contemplated by this Agreement contains any untrue statement of a
material fact or omits to state a material fact (known to the Borrowers, in the
case of any document not furnished by the Borrowers) necessary in order to make
the statements contained herein or therein not misleading in light of the
circumstances in which the same were made. Any projections and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by the Borrowers to be reasonable at the
time made, it being recognized by the Lenders that such projections as to
future events are not to be viewed as
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facts and that actual results during the period or periods covered by any such
projections may differ from the projected results. There are no facts known
(or which should upon the reasonable exercise of diligence be known) to the
Borrowers (other than matters of a general economic nature) that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect and that have not been disclosed herein or in such other
documents, certificates and statements furnished to the Lenders for use in
connection with the transactions contemplated hereby.
SECTION 6.
THE BORROWERS' AFFIRMATIVE COVENANTS
The Borrowers covenant and agree that, so long as the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless the Requisite Lenders shall otherwise give prior written
consent, the Borrowers shall perform, and shall cause each of their respective
Subsidiaries to perform, all covenants in this Section 6.
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
The Borrowers will maintain, and cause each of their respective
Subsidiaries to maintain, a system of accounting established and administered
in accordance with sound business practices to permit preparation of financial
statements in conformity with GAAP. The Borrowers will deliver to the
Administrative Agent and the Lenders:
(i) Quarterly Financials: as soon as available and in
any event within 45 days after the end of each Fiscal Quarter, the
consolidated balance sheet of the Company and its Subsidiaries as at
the end of such Fiscal Quarter and the related consolidated statements
of income, stockholders' equity and cash flows of the Company and its
Subsidiaries for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal
Quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous
Fiscal Year, all in reasonable detail and certified by the chief
financial officer of the Borrowers that they fairly present, in all
material respects, the financial condition of the Borrowers and their
respective Subsidiaries as at the dates indicated and the results of
their operations and their cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end
adjustments;
(ii) Year-End Financials: as soon as available and in any
event within 120 days after the end of each Fiscal Year, (a) the
consolidated balance sheet of the Company and its Subsidiaries as at
the end of such Fiscal Year and the related consolidated statements of
income, stockholders' equity and cash flows of the Company and its
Subsidiaries for such Fiscal Year, setting forth in each case in
comparative form the corresponding figures for the previous Fiscal
Year, all in
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reasonable detail and certified by the chief financial officer of the
Borrowers that they fairly present, in all material respects, the
financial condition of the Borrowers and their respective Subsidiaries
as at the dates indicated and the results of their operations and
their cash flows for the periods indicated and (b) in the case of such
consolidated financial statements, a report thereon of Ernst & Young
LLP or other independent certified public accountants of recognized
national standing selected by Company and satisfactory to the
Administrative Agent, which report shall be unqualified, shall express
no doubts about the ability of the Company and its Subsidiaries to
continue as a going concern, and shall state that such consolidated
financial statements fairly present, in all material respects, the
consolidated financial position of the Company and its Subsidiaries as
at the dates indicated and the results of their operations and their
cash flows for the periods indicated in conformity with GAAP applied
on a basis consistent with prior years (except as otherwise disclosed
in such financial statements) and that the examination by such
accountants in connection with such consolidated financial statements
has been made in accordance with generally accepted auditing
standards;
(iii) Officer's and Compliance Certificates: together with
each delivery of financial statements of the Company and its
Subsidiaries pursuant to subdivisions (i) and (ii) above, (a) an
Officer's Certificate of the Borrowers stating that the signers have
reviewed the terms of this Agreement and have made, or caused to be
made under their supervision, a review in reasonable detail of the
transactions and condition of the Borrowers and their respective
Subsidiaries during the accounting period covered by such financial
statements and that such review has not disclosed the existence during
or at the end of such accounting period, and that the signers do not
have knowledge of the existence as at the date of such Officer's
Certificate, of any condition or event that constitutes an Event of
Default or Potential Event of Default, or, if any such condition or
event existed or exists, specifying the nature and period of existence
thereof and what action the Borrowers have taken, are taking and
propose to take with respect thereto; and (b) a Compliance Certificate
demonstrating in reasonable detail compliance during and at the end of
the applicable accounting periods with the restrictions contained in
Section 7;
(iv) Reconciliation Statements: if, as a result of any
change in accounting principles and policies from those used in the
preparation of the audited financial statements referred to in
subsection 5.3, the consolidated financial statements of the Company
and its Subsidiaries delivered pursuant to subdivisions (i) or (ii) of
this subsection 6.1 will differ in any material respect from the
consolidated financial statements that would have been delivered
pursuant to such subdivisions had no such change in accounting
principles and policies been made, then (a) together with the first
delivery of financial statements pursuant to subdivision (i) or (ii)
of this subsection 6.1 following such change, together with each
delivery of financial statements pursuant to subdivision (i) or (ii)
of this subsection 6.1 following such change, a written statement of
the chief accounting officer or chief financial officer of the
Borrowers setting forth the differences (including any differences
that would
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affect any calculations relating to the financial covenants set forth
in subsection 7.6) which would have resulted if such financial
statements had been prepared without giving effect to such change;
(v) Accountants' Certification: together with each
delivery of consolidated financial statements of the Company and its
Subsidiaries pursuant to subdivision (ii) above, a written statement
by the independent certified public accountants giving the report
thereon (a) stating that their audit examination has included a review
of the terms of this Agreement and the other Loan Documents as they
relate to accounting matters, (b) stating whether, in connection with
their audit examination, any condition or event that constitutes an
Event of Default or Potential Event of Default has come to their
attention and, if such a condition or event has come to their
attention, specifying the nature and period of existence thereof;
provided that such accountants shall not be liable by reason of
any failure to obtain knowledge of any such Event of Default or
Potential Event of Default that would not be disclosed in the course
of their audit examination, and (c) stating that based on their audit
examination nothing has come to their attention that causes them to
believe either or both that the information contained in the
certificates delivered therewith pursuant to subdivision (iii) above
is not correct or that the matters set forth in the Compliance
Certificates delivered therewith pursuant to clause (b) of subdivision
(iii) above for the applicable Fiscal Year are not stated in
accordance with the terms of this Agreement;
(vi) Accountants' Reports: promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of
all reports submitted to the Borrowers by independent certified public
accountants in connection with each annual, interim or special audit
of the financial statements of the Borrowers and their respective
Subsidiaries made by such accountants, including any comment letter
submitted by such accountants to management in connection with their
annual audit;
(vii) SEC Filings and Press Releases: promptly upon their
becoming available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by the
Company to its security holders or by any Subsidiary of the Company to
its security holders other than another Borrower or another Subsidiary
of any Borrower, (b) all regular and periodic reports and all
registration statements (other than on Form S-8 or a similar form) and
prospectuses, if any, filed by any Borrower or any of its respective
Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any governmental or private regulatory
authority, and (c) all press releases and other statements made
available generally by any Borrower or any of its respective
Subsidiaries to the public concerning material developments in the
business of any Borrower or any of its respective Subsidiaries;
(viii) Events of Default, etc.: promptly upon any officer
of any Borrower obtaining knowledge (a) of any condition or event that
constitutes an Event of
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Default or Potential Event of Default, or becoming aware that any
Lender has given any notice (other than to the Administrative Agent)
or taken any other action with respect to a claimed Event of Default
or Potential Event of Default, (b) that any Person has given any
notice to any Borrower or any of its respective Subsidiaries or taken
any other action with respect to a claimed default or event or
condition of the type referred to in subsection 8.2, or (c) of the
occurrence of any event or change that has caused or evidences, either
in any case or in the aggregate, a Material Adverse Effect, an
Officer's Certificate specifying the nature and period of existence of
such condition, event or change, or specifying the notice given or
action taken by any such Person and the nature of such claimed Event
of Default, Potential Event of Default, default, event or condition,
and what action the Borrowers have taken, are taking and propose to
take with respect thereto;
(ix) Litigation or Other Proceedings: (a) promptly upon
any officer of the Borrowers obtaining knowledge of (X) the
institution of, or non-frivolous threat of, any action, suit,
proceeding (whether administrative, judicial or otherwise),
governmental investigation or arbitration against or affecting any
Borrower or any of its respective Subsidiaries or any property of any
Borrower or any of its respective Subsidiaries (collectively,
"PROCEEDINGS") not previously disclosed in writing by the Borrowers to
the Lenders or (Y) any material development in any Proceeding that, in
any case:
(1) if adversely determined, has a reasonable
possibility of giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as
a result of, the transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to the Borrowers to enable the Lenders and their
counsel to evaluate such matters;
(x) ERISA Events: promptly upon becoming aware of the
occurrence of or forthcoming occurrence of any ERISA Event, a written
notice specifying the nature thereof, what action the Borrowers, any
of their respective Subsidiaries or any of their respective ERISA
Affiliates has taken, is taking or proposes to take with respect
thereto and, when known, any action taken or threatened by the
Internal Revenue Service, the Department of Labor or the PBGC with
respect thereto;
(xi) ERISA Notices: with reasonable promptness, copies of
(a) each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) filed by the Borrowers, any of their respective
Subsidiaries or any of their respective ERISA Affiliates with the
Internal Revenue Service with respect to each Pension Plan; (b) all
notices received by the Borrowers, any of their respective
Subsidiaries or any of
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their respective ERISA Affiliates from a Multiemployer Plan sponsor
concerning an ERISA Event; and (c) copies of such other documents or
governmental reports or filings relating to any Employee Benefit Plan
as the Administrative Agent shall reasonably request;
(xii) Financial Plans: as soon as practicable and in any
event no later than 30 days after the beginning of each Fiscal Year, a
consolidated plan and financial forecast for such Fiscal Year (the
"FINANCIAL PLAN" for such Fiscal Year), including a forecasted
consolidated balance sheet and forecasted consolidated statements of
income and cash flows of the Company and its Subsidiaries for such
Fiscal Year;
(xiii) Board of Directors: with reasonable promptness,
written notice of any change in the Board of Directors of any
Borrower;
(xiv) New Subsidiaries: promptly upon any Person becoming
a Subsidiary of any Borrower, a written notice setting forth with
respect to such Person (a) the date on which such Person became a
Subsidiary of any Borrower and (b) all of the data required to be set
forth in Schedule 5.1 annexed hereto with respect to all Subsidiaries
of the Borrowers (it being understood that such written notice shall
be deemed to supplement Schedule 5.1 annexed hereto for all purposes
of this Agreement);
(xv) Material Contracts: promptly, and in any event
within ten Business Days after any Material Contract is terminated or
amended in a manner that is materially adverse to such Borrower or
such Subsidiary, as the case may be, or any new Material Contract is
entered into, a written statement describing such event with copies of
such material amendments or new contracts, and an explanation of any
actions being taken with respect thereto; and
(xvi) Other Information: with reasonable promptness, such
other information and data with respect to any Borrower or any of its
respective Subsidiaries as from time to time may be reasonably
requested by any Lender.
6.2 CORPORATE EXISTENCE, ETC.
Except as permitted under subsection 7.7, the Borrowers will, and will
cause each of their respective Subsidiaries to, at all times preserve and keep
in full force and effect their corporate existence and all rights and
franchises material to their business; provided, however that neither the
Borrowers nor any of their respective Subsidiaries shall be required to
preserve any such right or franchise if the Board of Directors of either
Borrower or any Subsidiary of a Borrower shall determine that the preservation
thereof is no longer desirable in the conduct of the business of such Borrower
or such Subsidiary, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to the Borrowers, their respective
Subsidiaries or the Lenders.
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6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
A. The Borrowers will, and will cause each of their respective
Subsidiaries to, pay all taxes, assessments and other governmental charges
imposed upon them or any of their properties or assets or in respect of any of
their income, businesses or franchises before any penalty accrues thereon, and
all claims (including claims for labor, services, materials and supplies) for
sums that have become due and payable and that by law have or may become a Lien
upon any of their properties or assets, prior to the time when any penalty or
fine shall be incurred with respect thereto; provided that no such charge or
claim need be paid if it is being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted, so long as such
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor.
B. The Borrowers will not, nor will they permit any of their
respective Subsidiaries to, file or consent to the filing of any consolidated
income tax return with any Person (other than any Borrower or any Subsidiary of
a Borrower).
6.4 MAINTENANCE OF PROPERTIES; INSURANCE.
A. MAINTENANCE OF PROPERTIES. The Borrowers will, and will cause
each of their respective Subsidiaries to, maintain or cause to be maintained in
good repair, working order and condition, ordinary wear and tear excepted, all
material properties used or useful in the business of the Borrowers and their
respective Subsidiaries (including all Intellectual Property) and from time to
time will make or cause to be made all appropriate repairs, renewals and
replacements thereof.
B. INSURANCE. The Borrowers will maintain or cause to be
maintained, with financially sound and reputable insurers, such public
liability insurance, third party property damage insurance, business
interruption insurance and casualty insurance with respect to liabilities,
losses or damage in respect of the assets, properties and businesses of the
Borrowers and their respective Subsidiaries as may customarily be carried or
maintained under similar circumstances by corporations of established
reputation engaged in similar businesses, in each case in such amounts (giving
effect to self-insurance), with such deductibles, covering such risks and
otherwise on such terms and conditions as shall be customary for corporations
similarly situated in the industry.
6.5 INSPECTION RIGHTS; LENDER MEETING.
A. INSPECTION RIGHTS. The Borrowers shall, and shall cause each
of their respective Subsidiaries to, permit any authorized representatives
designated by any Lender to visit and inspect any of the properties of the
Borrowers or of any of their respective Subsidiaries, to inspect, copy and take
extracts from its and their financial and accounting records, and to discuss
its and their affairs, finances and accounts with its and their officers and
independent public accountants (provided that the Borrowers may, if they so
choose,
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be present at or participate in any such discussion), all upon reasonable
notice and at such reasonable times during normal business hours and as often
as may reasonably be requested.
B. LENDER MEETING. The Borrowers will, upon the request of the
Administrative Agent or the Requisite Lenders, participate in a meeting of the
Administrative Agent and the Lenders once during each Fiscal Year to be held at
the Borrowers' corporate offices (or at such other location as may be agreed to
by the Borrowers and the Administrative Agent) at such time as may be agreed to
by the Borrowers and the Administrative Agent.
6.6 COMPLIANCE WITH LAWS, ETC.
The Borrowers shall comply, and shall cause each of their respective
Subsidiaries to comply in all material respects, with the requirements of all
applicable laws, rules, regulations and orders of any governmental authority
(including all Environmental Laws), noncompliance with which could reasonably
be expected to cause, individually or in the aggregate, a Material Adverse
Effect.
6.7 ENVIRONMENTAL REVIEW AND INVESTIGATION, DISCLOSURE, ETC.; LOAN
PARTIES' ACTIONS REGARDING HAZARDOUS MATERIALS ACTIVITIES,
ENVIRONMENTAL CLAIMS AND VIOLATIONS OF ENVIRONMENTAL LAWS
.
Each Borrower will, and will cause each of its Subsidiaries to,
(i) deliver to the Administrative Agent and the Lenders prompt
notice of any Environmental Claims or Hazardous Materials
Activities that, individually or in the aggregate, could
reasonably be expected to result in liability to the Company
and its Subsidiaries in excess of $1,000,000;
(ii) in the event of any Environmental Claim or Hazardous Materials
Activities which, individually or in the aggregate could be
reasonably expected to result in liability to the Company and
its Subsidiaries in excess of $1,000,000 cooperate with the
Administrative Agent to satisfy any reasonable request of
Administrative Agent with respect to monitoring or
investigating matters related to such Environmental Claim or
Hazardous Materials Activities; and
(iii) promptly undertake such actions as may be necessary to
remediate, clean up or abate any Hazardous Materials
Activities on or about a Facility that are in violation of any
Environmental Laws or which present a material risk of giving
rise to an Environmental Claim and take such action as may be
necessary to cure any violation of any Environmental Laws.
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6.8 EXECUTION OF SUBSIDIARY GUARANTY BY CERTAIN SUBSIDIARIES AND FUTURE
SUBSIDIARIES.
A. EXECUTION OF SUBSIDIARY GUARANTY. If any Subsidiary of a
Borrower in existence on the Closing Date that has not previously executed the
Subsidiary Guaranty becomes a Material Subsidiary after the Closing Date, or if
any Person (other than a Joint Venture that is not a wholly owned Subsidiary of
the Company) becomes a Material Subsidiary after the date hereof, the Borrowers
will promptly notify the Administrative Agent of that fact and cause such
Subsidiary to execute and deliver to the Administrative Agent a counterpart of
the Subsidiary Guaranty and to take all such further actions and execute all
such further documents and instruments as the Administrative Agent may
reasonably request to guaranty the Obligations.
B. SUBSIDIARY CHARTER DOCUMENTS, LEGAL OPINIONS, ETC. The
Borrowers shall deliver to the Administrative Agent, together with such Loan
Documents, (i) certified copies of such Subsidiary's Certificate or Articles of
Incorporation or other organizational document, together with a good standing
certificate from the Secretary of State of the jurisdiction of its
incorporation and each other state in which such Person is qualified as a
foreign corporation to do business and, to the extent generally available, a
certificate or other evidence of good standing as to payment of any applicable
franchise or similar taxes from the appropriate taxing authority of each of
such jurisdictions, each to be dated a recent date prior to their delivery to
the Administrative Agent, (ii) a copy of such Subsidiary's Bylaws, certified by
its corporate secretary or an assistant secretary as of a recent date prior to
their delivery to the Administrative Agent, (iii) a certificate executed by the
secretary or an assistant secretary of such Subsidiary as to (a) the fact that
the attached resolutions of the Board of Directors of such Subsidiary approving
and authorizing the execution, delivery and performance of such Loan Documents
are in full force and effect and have not been modified or amended and (b) the
incumbency and signatures of the officers of such Subsidiary executing such
Loan Documents, and (iv) a favorable opinion of counsel to such Subsidiary, in
form and substance reasonably satisfactory to the Administrative Agent and its
counsel, as to (a) the due organization and good standing of such Subsidiary,
(b) the due authorization, execution and delivery by such Subsidiary of such
Loan Documents, (c) the enforceability of such Loan Documents against such
Subsidiary and (d) such other matters as the Administrative Agent may
reasonably request, all of the foregoing to be reasonably satisfactory in form
and substance to Administrative Agent and its counsel.
SECTION 7.
THE BORROWERS' NEGATIVE COVENANTS
The Borrowers covenant and agree that, so long as the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
the Borrowers shall perform, and shall cause each of their respective
Subsidiaries to perform, all covenants in this Section 7.
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7.1 INDEBTEDNESS.
The Borrowers shall not, and shall not permit any of their respective
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) The Borrowers may become and remain liable with
respect to the Obligations;
(ii) The Borrowers and their respective Subsidiaries may
become and remain liable with respect to Contingent Obligations
permitted by subsection 7.4 and, upon any matured obligations actually
arising pursuant thereto, the Indebtedness corresponding to the
Contingent Obligations so extinguished;
(iii) The Borrowers and their respective Subsidiaries may
become and remain liable with respect to Indebtedness in respect of
Capital Leases;
(iv) The Borrowers may become and remain liable with
respect to Indebtedness to any of their wholly- owned Subsidiaries,
and any wholly-owned Subsidiary of the Company that is a Subsidiary
Guarantor may become and remain liable with respect to Indebtedness to
the Company or any other wholly-owned Subsidiary of the Company;
provided that (a) all such intercompany Indebtedness in an amount in
excess of $2,500,000 (or, with respect to Indebtedness owed by
Wolverine Finance to (X) the Company, $20,000,000 and (Y) Small Tube,
$20,000,000) in the aggregate shall be evidenced by promissory notes,
(b) all such intercompany Indebtedness in an amount in excess of
$2,500,000 in the aggregate owed by any Borrower to any of its
respective Subsidiaries shall be subordinated in right of payment to
the payment in full of the Obligations pursuant to the terms of the
applicable promissory notes or an intercompany subordination
agreement, and (c) any payment by any Subsidiary of any Borrower under
any guaranty of the Obligations shall result in a pro tanto reduction
of the amount of any intercompany Indebtedness owed by such Subsidiary
to such Borrower or to any of its respective Subsidiaries for whose
benefit such payment is made;
(v) The Borrowers and their respective Subsidiaries, as
applicable, may remain liable with respect to Indebtedness described
in Schedule 7.1 annexed hereto;
(vi) The Borrowers and their respective Subsidiaries may
become and remain liable with respect to other unsecured Indebtedness
in an aggregate principal amount not to exceed $75,000,000 at any time
outstanding;
(vii) The Borrowers and their respective Subsidiaries may
become and remain liable with respect to Indebtedness incurred or
assumed in connection with Permitted Acquisitions in an aggregate
principal amount not to exceed $25,000,000
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(measured on a cumulative basis from the Closing Date without giving
effect to any prepayments or repayments);
(viii) The Company may become and remain liable with respect
to the Senior Subordinated Notes less any amount repurchased pursuant
to the Tender Offer;
(ix) The Borrowers and their respective Subsidiaries may
become and remain liable with respect to IDB Indebtedness assumed in
connection with Permitted Acquisitions consummated in accordance with
the provisions of subsection 7.7(vi);
(x) The Borrowers and their respective Subsidiaries may
become and remain liable with respect to IDB Indebtedness incurred in
connection with the acquisition or construction of capital assets;
provided that, at the time of such incurrence, (a) no Event of Default
or Potential Event of Default has occurred and is continuing, or would
result from such incurrence, and (b) after giving effect to such
incurrence, the Loan Parties shall be in compliance on a pro forma
basis with all of the covenants set forth in Section 7 (assuming that
such IDB Indebtedness bears interest during any portion of the
applicable measurement period prior to the date of such incurrence
equal to the average effective Adjusted Eurodollar Rates plus the
Applicable Margin applicable to outstanding Revolving Loans during
such period);
(xi) Subject to the provisions of subsection 7.8, the
Borrowers and their respective Subsidiaries may become and remain
liable with respect to any refinancing, restructuring or modification
of any of the Indebtedness described in subsections 7.1(v), (vii),
(viii), (ix) and (x); provided that (a) such refinanced,
restructured or modified Indebtedness shall contain terms not
substantially less favorable in any respect to the Administrative
Agent, any Lender, or the Borrowers or their respective Subsidiaries
and (b) shall not have an aggregate principal amount in excess of the
aggregate principal amount of the Indebtedness refinanced, re-
structured or modified.
7.2 LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. The Borrowers shall not, and shall not
permit any of their Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist any Lien on or with respect to any property or asset
of any kind (including any document or instrument in respect of goods or
accounts receivable) of any Borrower or any of its respective Subsidiaries,
whether now owned or hereafter acquired, or any income or profits therefrom, or
file or permit the filing of, or permit to remain in effect, any financing
statement or other similar notice of any Lien with respect to any such
property, asset, income or profits under the Uniform Commercial Code of any
State or under any similar recording or notice statute, except:
(i) Permitted Encumbrances;
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(ii) Liens described in Schedule 7.2 annexed hereto; and
(iii) Liens incurred or assumed in connection with
Indebtedness permitted by subsections 7.1(ix) or (x) or any
refinancing of such Indebtedness permitted pursuant to subsection
7.1(xi); provided that such Liens shall apply only to the applicable
assets acquired or constructed with the proceeds of such Indebtedness.
B. EQUITABLE LIEN IN FAVOR OF THE LENDERS. If any Borrower or
any of its respective Subsidiaries shall create or assume any Lien upon any of
its properties or assets, whether now owned or hereafter acquired, other than
Liens excepted by the provisions of subsection 7.2A, it shall make or cause to
be made effective provision whereby the Obligations will be secured by such
Lien equally and ratably with any and all other Indebtedness secured thereby as
long as any such Indebtedness shall be so secured; provided that,
notwithstanding the foregoing, this covenant shall not be construed as a
consent by the Requisite Lenders to the creation or assumption of any such Lien
not permitted by the provisions of subsection 7.2A.
C. NEGATIVE PLEDGE. Except as specifically provided in
subsection 7.2A, neither the Borrowers nor any of their respective Subsidiaries
shall enter into any agreement allowing the creation or assumption of any Lien
upon any of its assets, whether now owned or hereafter acquired.
D. LIMITATIONS ON CERTAIN RESTRICTIONS. Except as provided
herein, the Borrowers will not, and will not permit any of their respective
Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any such Subsidiary to (i) pay dividends or make any other distributions on
any of such Subsidiary's capital stock owned by the Borrowers or any other
Subsidiary of the Borrowers, (ii) repay or prepay any Indebtedness owed by such
Subsidiary to the Borrowers or any other Subsidiary of the Borrowers, (iii)
make loans or advances to the Borrowers or any other Subsidiary of the
Borrowers, (iv) transfer any of its property or assets to the Borrowers or any
other Subsidiary of the Borrowers, or (v) grant a Lien to the Adminis- trative
Agent to secure the Obligations.
7.3 INVESTMENTS; JOINT VENTURES.
The Borrowers shall not, and shall not permit any of their respective
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including any Joint Venture, except:
(i) The Borrowers and their respective Subsidiaries may
make and own Investments in Cash Equivalents;
(ii) The Borrowers and their respective Subsidiaries may
continue to own the Investments owned by them as of the Closing Date
in any Subsidiaries of the Borrowers;
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(iii) The Borrowers and their respective Subsidiaries may
make intercompany loans to the extent permitted under subsection
7.1(iv);
(iv) The Borrowers and their respective Subsidiaries may
continue to own the Investments owned by them and described in
Schedule 7.3 annexed hereto;
(v) The Borrowers may make Permitted Acquisitions
permitted under subsection 7.7(vi);
(vi) The Borrowers may make Investments in Joint Ventures
in an aggregate amount not to exceed $40,000,000; and
(vii) The Borrowers and their respective Subsidiaries may
make and own other Investments in an aggregate amount not to exceed at
any time $10,000,000.
7.4 CONTINGENT OBLIGATIONS.
The Borrowers shall not, and shall not permit any of their respective
Subsidiaries to, directly or indirectly, create or become or remain liable with
respect to any Contingent Obligation, except:
(i) Material Subsidiaries of the Borrowers may become and
remain liable with respect to Contingent Obligations in respect of the
Subsidiary Guaranty;
(ii) The Company may become and remain liable with respect
to Contingent Obligations in respect of the Company Guaranty.
(iii) The Company may become and remain liable with respect
to Contingent Obligations in respect of Letters of Credit;
(iv) The Borrowers may become and remain liable with
respect to Hedge Agreements with respect to Indebtedness in an
aggregate notional principal amount not to exceed at any time
$100,000,000;
(v) The Borrowers may become and remain liable with
respect to Hedge Agreements with respect to forward metal contracts;
provided that (a) the aggregate net exposure pursuant to such Hedge
Agreements shall not exceed $15,000,000 at any time and (b) each such
Hedge Agreement shall be offset by a "back-to-back" forward metal
contract between a Borrower and one of its customers or suppliers;
(vi) The Borrowers and their respective Subsidiaries may
become and remain liable with respect to Contingent Obligations in
respect of customary indemnification and purchase price adjustment
obligations incurred in connection with Asset Sales or other sales of
assets;
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(vii) The Borrowers and their respective Subsidiaries may
become and remain liable with respect to Contingent Obligations under
guarantees in the ordinary course of business of the obligations of
suppliers, customers, franchisees and licensees of the Borrowers and
their respective Subsidiaries in an aggregate amount not to exceed at
any time $10,000,000;
(viii) The Borrowers and their respective Subsidiaries may
become and remain liable with respect to Contingent Obligations in
respect of any Indebtedness permitted by subsection 7.1 of any
Borrower or any of its respective Subsidiaries that is a Subsidiary
Guarantor;
(ix) The Borrowers and their respective Subsidiaries may
become and remain liable with respect to Contingent Obligations in
respect of Indebtedness of a Joint Venture outstanding pursuant to
subsection 7.1(vi);
(x) The Borrowers and their respective Subsidiaries, as
applicable, may remain liable with respect to Contingent Obligations
described in Schedule 7.4 annexed hereto; and
(xi) The Borrowers and their respective Subsidiaries may
become and remain liable with respect to other Contingent Obligations;
provided that the maximum aggregate liability, contingent or
otherwise, of the Borrowers and their respective Subsidiaries in
respect of all such Contingent Obligations shall at no time exceed
$10,000,000.
7.5 RESTRICTED JUNIOR PAYMENTS.
The Borrowers may make Restricted Junior Payments; provided that the
Borrowers shall not, and shall not permit any of their Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment at any time during which an Event of Default has
occurred and is continuing; provided further, that the aggregate amount of
Restricted Junior Payments (measured on a cumulative basis from the Closing
Date) in connection with the purchase, redemption, retirement or other
acquisition for value of any Company Common Stock shall not exceed $25,000,000.
7.6 FINANCIAL COVENANTS.
A. MINIMUM INTEREST COVERAGE RATIO. The Borrowers shall not
permit the ratio of (i) Consolidated Adjusted EBITDA to (ii) Consolidated
Interest Expense for any four-Fiscal Quarter period to be less than 2.50:1.00.
B. MINIMUM FIXED CHARGE COVERAGE RATIO. The Borrowers shall not
permit the ratio of (i) Consolidated Cash Flow to (ii) Consolidated Fixed
Charges for any four-Fiscal Quarter period to be less than 1.10:1.00.
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C. MAXIMUM LEVERAGE RATIO. The Borrowers shall not permit the
ratio of (i) Consolidated Total Debt as of any day to (ii) Consolidated
Adjusted EBITDA for the four-Fiscal Quarter period either ending on, or most
recently preceding, such date of determination (the "LEVERAGE RATIO") to exceed
3.00:1.00.
7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS.
The Borrowers shall not, and shall not permit any of their respective
Subsidiaries to, alter the corporate, capital or legal structure of any
Borrower or any of its respective Subsidiaries, or enter into any transaction
of merger or consolidation, or liquidate, wind-up or dissolve itself (or suffer
any liquidation or dissolution), or convey, sell, lease or sub-lease (as lessor
or sub-lessor), transfer or otherwise dispose of, in one transaction or a
series of transactions, all or any part of its business, property or assets,
whether now owned or hereafter acquired, or acquire by purchase or otherwise
all or substantially all the business, property or fixed assets of, or stock or
other evidence of beneficial ownership of, any Person or any division or line
of business of any Person, except:
(i) Any Subsidiary of a Borrower may be merged with or
into the Borrowers or any wholly-owned Subsidiary Guarantor, or be
liquidated, wound up or dissolved, or all or any part of its business,
property or assets may be conveyed, sold, leased, transferred or
otherwise disposed of, in one transaction or a series of transactions,
to the Borrowers or any wholly-owned Subsidiary Guarantor; provided
that, in the case of such a merger, the Borrowers or such wholly-owned
Subsidiary Guarantor shall be the continuing or surviving corporation;
(ii) Any Subsidiary of a Borrower (other than a Material
Subsidiary) may be liquidated or dissolved;
(iii) The Borrowers and their respective Subsidiaries may
dispose of obsolete, worn out or surplus property in the ordinary
course of business;
(iv) The Borrowers and their respective Subsidiaries may
sell or otherwise dispose of assets in transactions that do not
constitute Asset Sales; provided that the consideration received for
such assets shall be in an amount at least equal to the fair market
value thereof; and
(v) Subject to subsection 7.13, the Borrowers and their
respective Subsidiaries may make Asset Sales; provided that (x) the
consideration received for such assets shall be in an amount at least
equal to the fair market value thereof; (y) the sole consideration
received shall be cash; and (z) the proceeds of such Asset Sales shall
be applied as required by subsection 2.4A(iii)(a); and
(vi) The Borrowers may make acquisitions of the entire
business or the capital stock of another Person upon satisfying the
following conditions;
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(a) The Borrowers may make acquisitions; provided
that the aggregate consideration paid in connection with any
acquisition shall not exceed the fair market value of the
property acquired in such acquisition;
(b) No Event of Default or Potential Event of
Default shall have occurred and be continuing, or would result
from, such acquisition;
(c) The Borrowers shall have updated each of the
Schedules to this Agreement and the other Loan Documents to
the extent necessary to reflect changes resulting from the
consummation of such acquisition, each in form and substance
satisfactory to the Administrative Agent, and the Borrowers
shall have delivered to the Administrative Agent an Officer's
Certificate to which such updated Schedules shall be attached
certifying that such Schedules are true, correct and complete
as of the date of such acquisition;
(d) The Borrowers shall have delivered to the
Administrative Agent complete and correct copies of all
Permitted Acquisition Documents related to such acquisition
(together with any opinions of counsel delivered in connection
therewith and stating that Administrative Agent and Lenders
are entitled to rely thereon);
(e) After giving effect to such acquisition, the
Loan Parties shall be in compliance on a pro forma basis with
all of the covenants set forth in this Section 7; provided,
that for purposes of determining pro forma compliance with
financial covenants for any period during which new
Subsidiaries, assets or businesses are acquired, Consolidated
Adjusted EBITDA and Consolidated Interest Expense shall be
calculated with respect to such periods and such Subsidiaries,
assets or businesses on a pro forma basis, including any pro
forma expense and cost reductions calculated on a basis
consistent with Regulation S-X promulgated under the
Securities Act, using the audited historical financial
statements of all entities or assets so acquired or to be
acquired and the consolidated financial statements of the
Company and its Subsidiaries which shall be reformulated as if
such acquisition, and any acquisi- tions which have been
consummated during such period, and any Indebtedness or other
liabilities incurred in connection with any such acquisition
had been consummated or incurred at the beginning of such
period (and assuming that such Indebtedness bears interest
during any portion of the applicable measurement period prior
to the date of such acquisition equal to the average effective
Adjusted Eurodollar Rates plus the Applicable Margin
applicable to outstanding Loans during such period), all such
calculations to be in form and substance reasonably
satisfactory to the Administrative Agent; and
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(f) After giving effect to such acquisition, the
aggregate principal amount of unused available Revolving Loans
shall be equal to the amount necessary to finance the ongoing
working capital requirements of the Borrowers and their
respective Subsidiaries, as reasonably determined by the
Borrowers and approved by the Administrative Agent, which
approval shall not be unreasonably withheld.
7.8 AMENDMENTS OF DOCUMENTS RELATING TO SUBORDINATED INDEBTEDNESS.
The Borrowers shall not, and shall not permit any of their respective
Subsidiaries to, amend or otherwise change the terms of any Subordinated
Indebtedness, or make any payment consistent with an amendment thereof or
change thereto, if the effect of such amendment or change is to increase the
interest rate on such Subordinated Indebtedness, change (to earlier dates) any
dates upon which payments of principal or interest are due thereon, change any
event of default or condition to an event of default with respect thereto
(other than to eliminate any such event of default or increase any grace period
related thereto), change the redemption, prepayment or defeasance provisions
thereof, change the subordination provisions thereof (or of any guaranty
thereof), or change any collateral therefor (other than to release such
collateral), or if the effect of such amendment or change, together with all
other amendments or changes made, is to increase materially the obligations of
the obligor thereunder or to confer any additional rights on the holders of
such Subordinated Indebtedness (or a trustee or other representative on their
behalf) which would be adverse to the Borrowers or the Lenders.
7.9 FISCAL YEAR
The Borrowers shall not change their Fiscal Year-end from December 31.
7.10 SALES AND LEASE-BACKS.
The Borrowers shall not, and shall not permit any of their respective
Subsidiaries to, directly or indirectly, become or remain liable as lessee or
as a guarantor or other surety with respect to any lease, whether an Operating
Lease or a Capital Lease, of any property (whether real, personal or mixed),
whether now owned or hereafter acquired, (i) which any Borrower or any of its
respective Subsidiaries has sold or transferred or is to sell or transfer to
any other Person (other than any Borrower or any of its respective
Subsidiaries) or (ii) which any Borrower or any of its respective Subsidiaries
intends to use for substantially the same purpose as any other property which
has been or is to be sold or transferred by any Borrower or any of its
respective Subsidiaries to any Person (other than any Borrower or any of its
respective Subsidiaries) in connection with such lease; provided that the
Borrowers and their respective Subsidiaries may become and remain liable as
lessee, guarantor or other surety with respect to any such lease if and to the
extent that the sum of (a) the aggregate amount of Attributable Indebtedness
related to such sale and lease-back transaction plus (b) the aggregate
principal amount of Indebtedness outstanding pursuant to subsection 7.1 (vi)
does not exceed $10,000,000 at any time.
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7.11 SALE OR DISCOUNT OF RECEIVABLES.
The Borrowers shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, sell with recourse, or discount or otherwise sell
for less than the face value thereof, any of its notes or accounts receivable
except to any Material Subsidiary.
7.12 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
The Borrowers shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, enter into or permit to exist any transaction
(including the purchase, sale, lease or exchange of any property or the
rendering of any service) with any holder of 5% or more of any class of equity
Securities of the Borrowers or with any Affiliate of the Borrowers or of any
such holder, on terms that are less favorable to the Borrowers or that
Subsidiary, as the case may be, than those that might be obtained at the time
from Persons who are not such a holder or Affiliate; provided that the
foregoing restriction shall not apply to (i) any transaction between the
Borrowers and any Subsidiary Guarantor or between any Subsidiary Guarantors or
(ii) reasonable and customary fees paid to members of the Boards of Directors
of the Borrowers and their respective Subsidiaries.
7.13 DISPOSAL OF SUBSIDIARY STOCK.
Except for any sale of 100% of the capital stock or other equity
Securities of any of their respective Subsidiaries in compliance with the
provisions of subsection 7.7(vi), the Borrowers shall not:
(i) directly or indirectly sell, assign, pledge or
otherwise encumber or dispose of any shares of capital stock or other
equity Securities of any of their respective Subsidiaries, except to
qualify directors if required by applicable law; or
(ii) permit any of their respective Subsidiaries directly
or indirectly to sell, assign, pledge or otherwise encumber or dispose
of any shares of capital stock or other equity Securities of any of
their respective Subsidiaries (including such Subsidiary), except to
the Borrowers, another Subsidiary of the Borrowers, or to qualify
directors if required by applicable law.
7.14 CONDUCT OF BUSINESS.
From and after the Closing Date, the Borrowers shall not, and shall
not permit any of their respective Subsidiaries to, engage in any business
other than (i) the businesses engaged in by the Borrowers and their respective
Subsidiaries on the Closing Date and similar or related businesses and (ii)
such other lines of business as may be consented to by the Requisite Lenders.
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SECTION 8.
EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF DEFAULT")
shall occur:
8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by the Borrowers to pay any installment of principal of or
interest on any Loan when due, whether at stated maturity, by acceleration, by
notice of voluntary prepayment, by mandatory prepayment or otherwise; failure
by the Borrowers to pay when due any amount payable to an Issuing Lender in
reimbursement of any drawing under a Letter of Credit; or failure by the
Borrowers to pay any interest on any Loan or any fee or any other amount due
under this Agreement within five days after the date due; or
8.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of any Borrower or any of its respective Subsidiaries
to pay when due any principal of or interest on or any other amount payable in
respect of one or more items of Indebtedness (other than Indebtedness referred
to in subsection 8.1) or Contingent Obligations in an individual principal
amount of $1,000,000 or more or with an aggregate principal amount of
$1,000,000 or more, in each case beyond the end of any grace period provided
therefor; or (ii) breach or default by any Borrower or any of its respective
Subsidiaries with respect to any other material term of (a) one or more items
of Indebtedness or Contingent Obligations in the individual or aggregate
principal amounts referred to in clause (i) above or (b) any loan agreement,
mortgage, indenture or other agreement relating to such item(s) of Indebtedness
or Contingent Obligation(s), if the effect of such breach or default is to
cause, or to permit the holder or holders of that Indebtedness or Contingent
Obligation(s) (or a trustee on behalf of such holder or holders) to cause, that
Indebtedness or Contingent Obligation(s) to become or be declared due and
payable prior to its stated maturity or the stated maturity of any underlying
obligation, as the case may be (upon the giving or receiving of notice, lapse
of time, both, or otherwise); or
8.3 BREACH OF CERTAIN COVENANTS.
Failure of the Borrowers to perform or comply with any term or
condition contained in subsection 2.5 or 6.2 or Section 7 of this Agreement; or
8.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement made by
any Borrower or any of its respective Subsidiaries in any Loan Document or in
any statement or certificate at any time given by any Borrower or any of its
respective Subsidiaries in writing pursuant hereto or thereto or in connection
herewith or therewith shall be false in any material respect on the date as of
which made; or
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8.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
Any Loan Party shall default in the performance of or compliance with
any term contained in this Agreement or any of the other Loan Documents, other
than any such term referred to in any other subsection of this Section 8, and
such default shall not have been remedied or waived within 30 days after the
earlier of (i) an officer of the Borrowers or such Loan Party becoming aware of
such default or (ii) receipt by the Borrowers and such Loan Party of notice
from the Administrative Agent or any Lender of such default; or
8.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall enter a
decree or order for relief in respect of any Borrower or any of its respective
Subsidiaries in an involuntary case under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, which decree or order is not stayed; or any other similar relief shall
be granted under any applicable federal or state law; or (ii) an involuntary
case shall be commenced against any Borrower or any of its respective
Subsidiaries under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect; or a decree
or order of a court having jurisdiction in the premises for the appointment of
a receiver, liquidator, sequestrator, trustee, custodian or other officer
having similar powers over any Borrower or any of its respective Subsidiaries,
or over all or a substantial part of its property, shall have been entered; or
there shall have occurred the involuntary appointment of an interim receiver,
trustee or other custodian of any Borrower or any of its respective
Subsidiaries for all or a substantial part of its property; or a warrant of
attachment, execution or similar process shall have been issued against any
substantial part of the property of any Borrower or any of its respective
Subsidiaries, and any such event described in this clause (ii) shall continue
for 60 days unless dismissed, bonded or discharged; or
8.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) any Borrower or any Subsidiary of a Borrower shall have an order
for relief entered with respect to it or commence a voluntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, or shall consent to the entry of an order for
relief in an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the appointment of or
taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property; or any Borrower or any Subsidiary of a
Borrower shall make any assignment for the benefit of creditors; or (ii) any
Borrower or any of its respective Subsidiaries shall be unable, or shall fail
generally, or shall admit in writing its inability, to pay its debts as such
debts become due; or the Board of Directors of any Borrower or any Subsidiary
of a Borrower (or any committee thereof) shall adopt any resolution or
otherwise authorize any action to approve any of the actions referred to in
clause (i) above or this clause (ii); or
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8.8 JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $1,000,000 or (ii)
in the aggregate at any time an amount in excess of $1,000,000 (in either case
not adequately covered by insurance as to which a solvent and unaffiliated
insurance company has acknowledged coverage) shall be entered or filed against
any Borrower or any Subsidiary of a Borrower or any of their respective assets
and shall remain undischarged, unvacated, unbonded or unstayed for a period of
60 days (or in any event later than five days prior to the date of any proposed
sale thereunder); or
8.9 DISSOLUTION.
Any order, judgment or decree shall be entered against any Borrower or
any Material Subsidiary of a Borrower decreeing the dissolution or split up of
such Borrower or such Subsidiary and such order shall remain undischarged or
unstayed for a period in excess of 30 days; or
8.10 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events which individually or in
the aggregate results in or might reasonably be expected to result in liability
of the Borrowers, any of their respective Subsidiaries or any of their
respective ERISA Affiliates in excess of $1,000,000 during the term of this
Agreement; or there shall exist an amount of unfunded benefit liabilities (as
defined in Section 4001(a)(18) of ERISA), individually or in the aggregate for
all Pension Plans (excluding for purposes of such computation any Pension Plans
with respect to which assets exceed benefit liabilities), which exceeds
$1,000,000; or
8.11 MATERIAL ADVERSE EFFECT.
Any event or change shall occur that has caused or evidences, either
in any case or in the aggregate, a Material Adverse Effect; or
8.12 CHANGE IN CONTROL.
Any Person or any two or more Persons acting in concert shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Exchange Act), directly or
indirectly, of Securities of the Borrowers (or other Securities convertible
into such Securities) representing 30% or more of the combined voting power of
all Securities of the Borrowers entitled to vote in the election of directors,
other than Securities having such power only by reason of the happening of a
contingency; or
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8.13 INVALIDITY OF GUARANTIES.
At any time after the execution and delivery thereof, (i) any Guaranty
for any reason, other than the satisfaction in full of all Obligations, shall
cease to be in full force and effect (other than in accordance with its terms)
or shall be declared to be null and void, or (ii) any Loan party shall contest
the validity or enforceability of any Loan Document in writing or deny in
writing that it has any further liability, including with respect to future
advances by Lenders, under any Loan Document to which it is a party:
THEN (i) upon the occurrence of any Event of Default described in subsection
8.6 or 8.7, each of (a) the unpaid principal amount of and accrued interest on
the Loans, (b) an amount equal to the maximum amount that may at any time be
drawn under all Letters of Credit then outstanding (whether or not any
beneficiary under any such Letter of Credit shall have presented, or shall be
entitled at such time to present, the drafts or other documents or certificates
required to draw under such Letter of Credit), and (c) all other Obligations
shall automatically become immediately due and payable, without presentment,
demand, protest or other requirements of any kind, all of which are hereby
expressly waived by the Borrowers, and the obligation of each Lender to make
any Loan, the obligation of the Administrative Agent to issue any Letter of
Credit and the right of any Lender to issue any Letter of Credit hereunder
shall thereupon terminate, and (ii) upon the occurrence and during the
continuation of any other Event of Default, the Administrative Agent shall,
upon the written request or with the written consent of the Requisite Lenders,
by written notice to the Borrowers, declare all or any portion of the amounts
described in clauses (a) through (c) above to be, and the same shall forthwith
become, immediately due and payable, and the obligation of each Lender to make
any Loan, the obligation of the Administrative Agent to issue any Letter of
Credit and the right of any Lender to issue any Letter of Credit hereunder
shall thereupon terminate; provided that the foregoing shall not affect in any
way the obligations of the Lenders under subsection 3.3C(i) or the obligations
of the Lenders to participate in any unpaid Swing Line Loans as provided in
subsection 2.1A(ii) or the obligations of the Lenders to participate in any
unpaid Canadian Loans as provided in subsection 2.1A(iii).
Any amounts described in clause (b) above, when received by the
Administrative Agent, shall be held by the Administrative Agent as collateral
for the Obligations and may be applied by the Administrative Agent to any
unpaid Obligations then due.
Notwithstanding anything contained in the second preceding paragraph,
if at any time within 60 days after an acceleration of the Loans pursuant to
clause (ii) of such paragraph the Borrowers shall pay all arrears of interest
and all payments on account of principal which shall have become due otherwise
than as a result of such acceleration (with interest on principal and, to the
extent permitted by law, on overdue interest, at the rates specified in this
Agreement) and all Events of Default and Potential Events of Default (other
than non-payment of the principal of and accrued interest on the Loans, in each
case which is due and payable solely by virtue of acceleration) shall be
remedied or waived pursuant to subsection 10.6, then the Requisite Lenders, by
written notice to the Borrowers, may at their
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option rescind and annul such acceleration and its consequences; but such
action shall not affect any subsequent Event of Default or Potential Event of
Default or impair any right consequent thereon. The provisions of this
paragraph are intended merely to bind the Lenders to a decision which may be
made at the election of the Requisite Lenders and are not intended, directly or
indirectly, to benefit the Borrowers, and such provisions shall not at any time
be construed so as to grant the Borrowers the right to require the Lenders to
rescind or annul any acceleration hereunder or to preclude the Administrative
Agent or the Lenders from exercising any of the rights or remedies available to
them under any of the Loan Documents, even if the conditions set forth in this
paragraph are met.
SECTION 9.
THE ADMINISTRATIVE AGENT
9.1 APPOINTMENT.
CSFB is hereby appointed the Administrative Agent hereunder and under
the other Loan Documents and each Lender hereby authorizes the Administrative
Agent to act as its agent in accordance with the terms of this Agreement and
the other Loan Documents. The Administrative Agent agrees to act upon the
express conditions contained in this Agreement and the other Loan Documents, as
applicable. The provisions of this Section 9 are solely for the benefit of the
Administrative Agent and the Lenders and the Borrowers shall have no rights as
a third party beneficiary of any of the provisions thereof. In performing its
functions and duties under this Agreement, the Administrative Agent shall act
solely as an agent of the Lenders and does not assume and shall not be deemed
to have assumed any obligation towards or relationship of agency or trust with
or for any Borrower or any of its respective Subsidiaries.
9.2 POWERS AND DUTIES; GENERAL IMMUNITY.
A. POWERS; DUTIES SPECIFIED. Each Lender irrevocably authorizes
the Administrative Agent to take such action on such Lender's behalf and to
exercise such powers, rights and remedies hereunder and under the other Loan
Documents as are specifically delegated or granted to the Administrative Agent
by the terms hereof and thereof, together with such powers, rights and remedies
as are reasonably incidental thereto. The Administrative Agent shall have only
those duties and responsibilities that are expressly specified in this
Agreement and the other Loan Documents. The Administrative Agent may exercise
such powers, rights and remedies and perform such duties by or through its
agents or employees. The Administrative Agent shall not have, by reason of
this Agreement or any of the other Loan Documents, a fiduciary relationship in
respect of any Lender; and nothing in this Agreement or any of the other Loan
Documents, expressed or implied, is intended to or shall be so construed as to
impose upon the Administrative Agent any obligations in respect of this
Agreement or any of the other Loan Documents except as expressly set forth
herein or therein.
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B. NO RESPONSIBILITY FOR CERTAIN MATTERS. The Administrative
Agent shall not be responsible to any Lender for the execution, effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of this
Agreement or any other Loan Document or for any representations, warranties,
recitals or statements made herein or therein or made in any written or oral
statements or in any financial or other statements, instruments, reports or
certificates or any other documents furnished or made by the Administrative
Agent to the Lenders or by or on behalf of the Borrowers to the Administrative
Agent or any Lender in connection with the Loan Documents and the transactions
contemplated thereby or for the financial condition or business affairs of the
Borrowers or any other Person liable for the payment of any Obligations, nor
shall the Administrative Agent be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained in any of the Loan Documents or as to the use
of the proceeds of the Loans or the use of the Letters of Credit or as to the
existence or possible existence of any Event of Default or Potential Event of
Default. Anything contained in this Agreement to the contrary notwithstanding,
the Administrative Agent shall not have any liability arising from
confirmations of the amount of outstanding Loans or the Letter of Credit Usage
or the component amounts thereof.
C. EXCULPATORY PROVISIONS. Neither the Administrative Agent nor
any of its officers, directors, employees or agents shall be liable to the
Lenders for any action taken or omitted by the Administrative Agent under or in
connection with any of the Loan Documents except to the extent caused by the
Administrative Agent's gross negligence or willful misconduct. The
Administrative Agent shall be entitled to refrain from any act or the taking of
any action (including the failure to take an action) in connection with this
Agreement or any of the other Loan Documents or from the exercise of any power,
discretion or authority vested in it hereunder or thereunder unless and until
the Administrative Agent shall have received instructions in respect thereof
from the Requisite Lenders (or such other the Lenders as may be required to
give such instructions under subsection 10.6) and, upon receipt of such
instructions from the Requisite Lenders (or such other the Lenders, as the case
may be), the Administrative Agent shall be entitled to act or (where so
instructed) refrain from acting, or to exercise such power, discretion or
authority, in accordance with such instructions. Without prejudice to the
generality of the foregoing, (i) the Administrative Agent shall be entitled to
rely, and shall be fully protected in relying, upon any communication,
instrument or document believed by it to be genuine and correct and to have
been signed or sent by the proper person or persons, and shall be entitled to
rely and shall be protected in relying on opinions and judgments of attorneys
(who may be attorneys for the Borrowers and their respective Subsidiaries),
accountants, experts and other professional advisors selected by it; and (ii)
no Lender shall have any right of action whatsoever against the Administrative
Agent as a result of the Administrative Agent acting or (where so instructed)
refraining from acting under this Agreement or any of the other Loan Documents
in accordance with the instructions of the Requisite Lenders (or such other the
Lenders as may be required to give such instructions under subsection 10.6).
D. THE ADMINISTRATIVE AGENT ENTITLED TO ACT AS LENDER. The
agency hereby created shall in no way impair or affect any of the rights and
powers of, or impose any
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duties or obligations upon, the Administrative Agent in its individual capacity
as a Lender hereunder. With respect to its participation in the Loans and the
Letters of Credit, the Administrative Agent shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it
were not performing the duties and functions delegated to it hereunder, and the
term "Lender" or "the Lenders" or any similar term shall, unless the context
clearly otherwise indicates, include the Administrative Agent in its individual
capacity. The Administrative Agent and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of banking, trust,
financial advisory or other business with the Borrowers or any of its
Affiliates as if it were not performing the duties specified herein, and may
accept fees and other consideration from the Borrowers for services in
connection with this Agreement and otherwise without having to account for the
same to the Lenders.
9.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
CREDITWORTHINESS.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of the
Borrowers and their respective Subsidiaries in connection with the making of
the Loans and the issuance of Letters of Credit hereunder and that it has made
and shall continue to make its own appraisal of the creditworthiness of the
Borrowers and their respective Subsidiaries. The Administrative Agent shall
not have any duty or responsibility, either initially or on a continuing basis,
to make any such investigation or any such appraisal on behalf of the Lenders
or to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or
at any time or times thereafter, and the Administrative Agent shall not have
any responsibility with respect to the accuracy of or the completeness of any
information provided to the Lenders.
9.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify the Administrative Agent, to the extent that the Administrative Agent
shall not have been reimbursed by the Borrowers, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including counsel fees and disbursements) or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against the Administrative Agent in exercising its
powers, rights and remedies or performing its duties hereunder or under the
other Loan Documents or otherwise in its capacity as the Administrative Agent
in any way relating to or arising out of this Agreement or the other Loan
Documents; provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Administrative
Agent's gross negligence or willful misconduct. If any indemnity furnished to
the Administrative Agent for any purpose shall, in the opinion of the
Administrative Agent, be insufficient or become impaired, the Administrative
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished.
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9.5 SUCCESSOR ADMINISTRATIVE AGENT, SWING LINE LENDER AND CANADIAN LENDER.
A. SUCCESSOR AGENT. The Administrative Agent may resign at any
time by giving 30 days' prior written notice thereof to the Lenders and the
Borrowers, and the Administrative Agent may be removed at any time with or
without cause by an instrument or concurrent instruments in writing delivered
to the Borrowers and the Administrative Agent and signed by the Requisite
Lenders. Upon any such notice of resignation or any such removal, the
Requisite Lenders shall have the right, upon five Business Days' notice to the
Borrowers, to select a successor Administrative Agent. Upon the acceptance of
any appointment as the Administrative Agent hereunder by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Administrative Agent and the retiring or removed
Administrative Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring or removed the Administrative Agent's
resignation or removal hereunder as the Administrative Agent, the provisions of
this Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was the Administrative Agent under this Agreement.
B. SUCCESSOR SWING LINE LENDER. The Swing Line Lender may resign
at any time by giving 30 days prior written notice thereof to the Lenders and
the Borrowers and the Swing Line Lender may be removed as the Swing Line Lender
(but not as a Lender) by the Requisite Lenders for cause by an instrument or
concurrent instruments in writing delivered to the Borrowers and the
Administrative Agent and signed by the Requisite Lenders. Upon any such notice
of resignation or any such removal, the Company shall have the right, upon five
Business Days' notice to the Administrative Agent, to select a Lender to be a
successor Swing Line Lender. If the Person selected as a successor Swing Line
Lender by the Company accepts appointment as the Swing Line Lender, that
successor Swing Line Lender shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring or removed Swing
Line Lender and the retiring or removed Swing Line Lender shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Swing Line Lender's resignation or removal hereunder as the Swing Line
Lender, the provisions of subsection 2.1A(ii) shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was the Swing Line
Lender under this Agreement.
C. SUCCESSOR CANADIAN LENDER. The Canadian Lender may resign at
any time by giving 30 days prior written notice thereof to the Lenders and the
Borrowers and the Canadian Lender may be removed as the Canadian Lender (but
not as a Lender) by the Requisite Lenders for cause by an instrument or
concurrent instruments in writing delivered to the Borrowers and the
Administrative Agent and signed by the Requisite Lenders. Upon any such notice
of resignation or any such removal, the Company shall have the right, upon five
Business Days' notice to the Administrative Agent, to select a successor
Canadian Lender. If the Person selected as a successor Canadian Lender by the
Company accepts appointment as the Canadian Lender, that successor Canadian
Lender shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the
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retiring or removed Canadian Lender and the retiring or removed Canadian Lender
shall be discharged from its duties and obligations under this Agreement.
After any retiring or removed Canadian Lender's resignation or removal
hereunder as the Canadian Lender, the provisions of subsection 2.1A(iii) shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was the Canadian Lender under this Agreement.
9.6 GUARANTIES.
Each Lender hereby further authorizes the Administrative Agent, on
behalf of and for the benefit of the Lenders, to enter into, and to be the
agent for and representative of Lenders under, each Guaranty, and each Lender
agrees to be bound by the terms of each Guaranty; provided that the
Administrative Agent shall not enter into or consent to any amendment,
modification, termination or waiver of any provision contained in any Guaranty
without the prior consent of the Requisite Lenders; provided further, however,
that, without further written consent or authorization from Lenders, the
Administrative Agent may execute any documents or instruments necessary to
release any Subsidiary Guarantor from the Subsidiary Guaranty if all of the
capital stock of such Subsidiary Guarantor is sold to any Person (other than an
Affiliate of the Borrowers) pursuant to a sale or other disposition permitted
hereunder or to which Requisite Lenders have otherwise consented. Anything
contained in any of the Loan Documents to the contrary notwithstanding, the
Borrowers, the Administrative Agent and each Lender hereby agree that no Lender
shall have any right individually to enforce any Guaranty, it being understood
and agreed that all powers, rights and remedies under the Guaranties may be
exercised solely by the Administrative Agent for the benefit of the Lenders in
accordance with the terms thereof.
SECTION 10.
MISCELLANEOUS
10.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS OF CREDIT.
A. GENERAL. Subject to subsection 10.1B, each Lender shall have
the right at any time to (i) sell, assign or transfer to any Eligible Assignee,
or (ii) sell participations to any Person in, all or any part of its Commitment
or any Loan or Loans made by it or its Letters of Credit or participations
therein or any other interest herein or in any other Obligations owed to it;
provided that no such sale, assignment, transfer or participation shall,
without the consent of the Borrowers, require the Borrowers to file a
registration statement with the Securities and Exchange Commission or apply to
qualify such sale, assignment, transfer or participation under the securities
laws of any state; provided, further that no such sale, assignment or transfer
described in clause (i) above shall be effective unless and until an Assignment
Agreement effecting such sale, assignment or transfer shall have been accepted
by the Administrative Agent and recorded in the Register as provided in
subsection 10.1B(ii); and provided, further that no such sale, assignment,
transfer or participation of any Letter of Credit or any participation therein
may be made separately from a sale, assignment, transfer or participation of a
corresponding interest in the Commitment and the
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Loans of the Lender effecting such sale, assignment, transfer or participation;
provided, further that, anything contained herein to the contrary
notwithstanding, the Swing Line Loan Commitment and the Swing Line Loans of the
Swing Line Lender may not be sold, assigned or transferred as described in
clause (i) above to any Person other than a successor Administrative Agent and
Swing Line Lender to the extent contemplated by subsection 9.5; and provided,
further that, anything contained herein to the contrary notwithstanding, the
Canadian Loan Commitment and the Canadian Loans of the Canadian Lender may not
be sold, assigned or transferred as described in clause (i) above to any Person
other than a successor Administrative Agent and Canadian Lender to the extent
contemplated by subsection 9.5. Except as otherwise provided in this
subsection 10.1, no Lender shall, as between the Borrowers and such Lender, be
relieved of any of its obligations hereunder as a result of any sale,
assignment or transfer of, or any granting of participations in, all or any
part of its Commitment or the Loans, the Letters of Credit or participations
therein, or the other Obligations owed to such Lender.
B. ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Each Commitment,
Loan, Letter of Credit or participation therein, or other Obligation
may (a) be assigned in any amount to another Lender, or to an
Affiliate of the assigning Lender or another Lender, with the giving
of notice to the Borrowers and the prior written consent of the
Administrative Agent (which consent of the Administrative Agent shall
not be unreasonably withheld or delayed) or (b) be assigned in full or
in an aggregate amount of not less than $5,000,000 to any other
Eligible Assignee with the consent of the Administrative Agent and
(except during the continuance of an Event of Default) the Borrowers
(which consent of the Borrowers and the Administrative Agent shall not
be unreasonably withheld or delayed). To the extent of any such
assignment in accordance with either clause (a) or (b) above, the
assigning Lender shall be relieved of its obligations with respect to
its Commitment, Loans, Letters of Credit or participations therein, or
other Obligations or the portion thereof so assigned. The parties to
each such assignment shall execute and deliver to the Administrative
Agent, for its acceptance and recording in the Register, an Assignment
Agreement, together with a processing and recordation fee of $3,500
and such forms, certificates or other evidence, if any, with respect
to United States federal income tax withholding matters as the
assignee under such Assignment Agreement may be required to deliver to
the Administrative Agent pursuant to subsection 2.7B(iii)(a). Upon
such execution, delivery, acceptance and recordation, from and after
the effective date specified in such Assignment Agreement, (y) 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 Agreement, shall have the rights and obligations of a
Lender hereunder and (z) the assigning Lender thereunder shall, to the
extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment Agreement, relinquish its rights (other
than any rights which survive the termination of this Agreement under
subsection 10.9B) and be released from its obligations under this
Agreement (and,
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in the case of an Assignment Agreement covering all or the remaining
portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto;
provided that, anything contained in any of the Loan Documents to the
contrary notwithstanding, if such Lender is the Issuing Lender with
respect to any outstanding Letters of Credit such Lender shall
continue to have all rights and obligations of an Issuing Lender with
respect to such Letters of Credit until the cancellation or expiration
of such Letters of Credit and the reimbursement of any amounts drawn
thereunder). The Commitments hereunder shall be modified to reflect
the Commitment of such assignee and any remaining Commitment of such
assigning Lender and, if any such assignment occurs after the issuance
of the Notes hereunder, the assigning Lender shall, upon the
effectiveness of such assignment or as promptly thereafter as
practicable, surrender its Notes to the Administrative Agent for
cancellation, and thereupon new Notes shall be issued to the assignee
and to the assigning Lender, with appropriate insertions, to reflect
the new Commitments of the assignee and the assigning Lender. Each
Borrower hereby agrees to execute and deliver to the Administrative
Agent (for delivery to the applicable Lenders) such replacement Notes
within 3 Business Days of the Administrative Agent's request there-
for, provided that the Administrative Agent shall deliver to the
applicable Borrower a certificate or other evidence reasonably
satisfactory to such Borrower that the original notes have been
delivered to the Administrative Agent and will be cancelled upon
delivery of the replacement Notes.
(ii) Acceptance by the Administrative Agent; Recordation
in Register. Upon its receipt of an Assignment Agreement executed by
an assigning Lender and an assignee representing that it is an
Eligible Assignee, together with the processing and recordation fee
referred to in subsection 10.1B(i) and any forms, certificates or
other evidence with respect to United States federal income tax
withholding matters that such assignee may be required to deliver to
the Administrative Agent pursuant to subsection 2.7B(iii)(a), the
Administrative Agent shall, if the Administrative Agent and the
Borrowers have consented to the assignment evidenced thereby (in each
case to the extent such consent is required pursuant to subsection
10.1B(i)), (a) accept such Assignment Agreement by executing a
counterpart thereof as provided therein (which acceptance shall
evidence any required consent of the Administrative Agent to such
assignment), (b) record the information contained therein in the
Register, and (c) give prompt notice thereof to the Borrowers. The
Administrative Agent shall maintain a copy of each Assignment
Agreement delivered to and accepted by it as provided in this
subsection 10.1B(ii).
C. PARTICIPATIONS. The holder of any participation, other than
an Affiliate of the Lender granting such participation, shall not be entitled
to require such Lender to take or omit to take any action hereunder except
action directly affecting (i) the extension of the scheduled final maturity
date of any Loan allocated to such participation or (ii) a reduction of the
principal amount of or the rate of interest payable on any Loan allocated to
such participation, and all amounts payable by the Borrowers hereunder
(including amounts payable to such Lender pursuant to subsections 2.6D, 2.7 and
3.6) shall be determined as
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if such Lender had not sold such participation. Each Borrower and each Lender
hereby acknowledge and agree that, solely for purposes of subsections 10.4 and
10.5, (a) any participation will give rise to a direct obligation of the
Borrowers to the participant and (b) the participant shall be considered to be
a "Lender".
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the
assignments and participations permitted under the foregoing provisions of this
subsection 10.1, any Lender may assign and pledge all or any portion of its
Loans, the other Obligations owed to such Lender, and its Notes to any Federal
Reserve Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any operating circular issued by
such Federal Reserve Bank; provided that (i) no Lender shall, as between the
Borrowers and such Lender, be relieved of any of its obligations hereunder as a
result of any such assignment and pledge and (ii) in no event shall such
Federal Reserve Bank be considered to be a "Lender" or be entitled to require
the assigning Lender to take or omit to take any action hereunder.
E. INFORMATION. Each Lender may furnish any information
concerning the Borrowers and their respective Subsidiaries in the possession of
that Lender from time to time to assignees and participants (including
prospective assignees and participants), subject to subsection 10.19.
F. REPRESENTATIONS OF THE LENDERS. Each Lender listed on the
signature pages hereof hereby represents and warrants (i) that it is an
Eligible Assignee described in clause (A) of the definition thereof; (ii) that
it has experience and expertise in the making of loans such as the Loans; and
(iii) that it will make its Loans for its own account in the ordinary course of
its business and without a view to distribution of such Loans within the
meaning of the Securities Act or the Exchange Act or other federal securities
laws (it being understood that, subject to the provisions of this subsection
10.1, the disposition of such Loans or any interests therein shall at all times
remain within its exclusive control). Each Lender that becomes a party hereto
pursuant to an Assignment Agreement shall be deemed to agree that the
representations and warranties of such Lender contained in Section 2(c) of such
Assignment Agreement are incorporated herein by this reference.
10.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, the Borrowers agree to pay promptly (i) all the actual and
reasonable costs and reasonable expenses of preparation of the Loan Documents
and any consents, amendments, waivers or other modifications thereto; (ii) all
the costs of furnishing all opinions by counsel for the Borrowers (including
any opinions requested by the Lenders as to any legal matters arising
hereunder) and of the Borrowers' performance of and compliance with all
agreements and conditions on its part to be performed or complied with under
this Agreement and the other Loan Documents including with respect to
confirming compliance with environmental, insurance and solvency requirements;
(iii) the reasonable fees, expenses and disbursements of counsel to the
Administrative Agent (including allocated costs of internal counsel) in
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connection with the negotiation, preparation, execution and administration of
the Loan Documents and any consents, amendments, waivers or other modifications
thereto and any other documents or matters requested by the Borrowers; (iv) all
other actual and reasonable costs and expenses incurred by the Administrative
Agent in connection with the negotiation, preparation and execution of the Loan
Documents and any consents, amendments, waivers or other modifications thereto
and the transactions contemplated thereby; and (v) after the occurrence of an
Event of Default, all costs and expenses, including reasonable attorneys' fees
(including allocated costs of internal counsel) and costs of settlement,
incurred by the Administrative Agent and the Lenders in enforcing any
Obligations of or in collecting any payments due from any Loan Party hereunder
or under the other Loan Documents by reason of such Event of Default (including
in connection with enforcement of the Guaranties) or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or pursuant to any insolvency or
bankruptcy proceedings.
10.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection 10.2,
whether or not the transactions contemplated hereby shall be consummated, the
Borrowers agree to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless the Administrative Agent and the Lenders, and
the officers, directors, employees, agents and affiliates of the Administrative
Agent and the Lenders (collectively called the "INDEMNITEES"), from and against
any and all Indemnified Liabilities (as hereinafter defined); provided that the
Borrowers shall not have any obligation to any Indemnitee hereunder with
respect to any Indemnified Liabilities to the extent such Indemnified
Liabilities arise solely from the gross negligence or willful misconduct of
that Indemnitee as determined by a final judgment of a court of competent
jurisdiction.
As used herein, "INDEMNIFIED LIABILITIES" means, collectively, any and
all liabilities, obligations, losses, damages (including natural resource
damages), penalties, actions, judgments, suits, claims (including Environmental
Claims), costs (including the costs of any investigation, study, sampling,
testing, abatement, cleanup, removal, remediation or other response action
necessary to remove, remediate, clean up or abate any Hazardous Materials
Activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect
or consequential and whether based on any federal, state or foreign laws,
statutes, rules or regulations (including securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of (i) this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby (including the Lenders' agreement
to make the Loans hereunder or the use or intended use of the proceeds thereof
or the
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issuance of Letters of Credit hereunder or the use or intended use of any
thereof, or any enforcement of any of the Loan Documents (including any
collection from, or enforcement of, the Guaranties), (ii) the statements
contained in the commitment letter delivered by any Lender to the Borrowers
with respect thereto, or (iii) any Environmental Claim or any Hazardous
Materials Activity relating to or arising from, directly or indirectly, any
past or present activity, operation, land ownership, or practice of any
Borrower or any of its respective Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 10.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, the Borrowers
shall contribute the maximum portion that they are permitted to pay and satisfy
under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by Indemnitees or any of them.
10.4 SET-OFF.
In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, upon the occurrence of any
Event of Default each Lender is hereby authorized by the Borrowers at any time
or from time to time, without notice to the Borrowers or to any other Person,
any such notice being hereby expressly waived, to set off and to appropriate
and to apply any and all deposits (general or special, including Indebtedness
evidenced by certificates of deposit, whether matured or unmatured, but not
including trust accounts) and any other Indebtedness at any time held or owing
by that Lender to or for the credit or the account of the Borrowers against and
on account of the obligations and liabilities of the Borrowers to that Lender
under this Agreement, the Letters of Credit and participations therein and the
other Loan Documents, including all claims of any nature or description arising
out of or connected with this Agreement, the Letters of Credit and
participations therein or any other Loan Document, irrespective of whether or
not (i) that Lender shall have made any demand hereunder or (ii) the principal
of or the interest on the Loans or any amounts in respect of the Letters of
Credit or any other amounts due hereunder shall have become due and payable
pursuant to Section 8 and although said obligations and liabilities, or any of
them, may be contingent or unmatured.
10.5 RATABLE SHARING.
The Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization
upon security, through the exercise of any right of set-off or banker's lien,
by counterclaim or cross action or by the enforcement of any right under the
Loan Documents or otherwise, or as adequate protection of a deposit treated as
cash collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the
"AGGREGATE AMOUNTS DUE" to such Lender) which is greater than the proportion
received by any other Lender in
107
<PAGE> 115
respect of the Aggregate Amounts Due to such other Lender, then the Lender
receiving such proportionately greater payment shall (i) notify the
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the
Aggregate Amounts Due to the other the Lenders so that all such recoveries of
Aggregate Amounts Due shall be shared by all the Lenders in proportion to the
Aggregate Amounts Due to them; provided that if all or part of such
proportionately greater payment received by such purchasing Lender is
thereafter recovered from such Lender upon the bankruptcy or reorganization of
the Borrowers or otherwise, those purchases shall be rescinded and the purchase
prices paid for such participations shall be returned to such purchasing Lender
ratably to the extent of such recovery, but without interest. The Borrowers
expressly consent to the foregoing arrangement and agrees that any holder of a
participation so purchased may exercise any and all rights of banker's lien,
set-off or counterclaim with respect to any and all monies owing by the
Borrowers to that holder with respect thereto as fully as if that holder were
owed the amount of the participation held by that holder.
10.6 AMENDMENTS AND WAIVERS.
No amendment, modification, termination or waiver of any provision of
this Agreement or of the Notes, and no consent to any departure by the
Borrowers therefrom, shall in any event be effective without the written
concurrence of the Requisite Lenders; provided that any such amendment,
modification, termination, waiver or consent which: increases the amount of any
of the Commitments or reduces the principal amount of any of the Loans;
increases the maximum amount of Letters of Credit; changes in any manner the
definition of "Pro Rata Share" or the definition of "the Requisite Lenders";
changes in any manner any provision of this Agreement which, by its terms,
expressly requires the approval or concurrence of all the Lenders; postpones
the scheduled final maturity date of any of the Loans; postpones the date or
reduces the amount of any scheduled reduction of the Commitments; postpones the
date on which any interest or any fees are payable; decreases the interest rate
borne by any of the Loans (other than any waiver of any increase in the
interest rate applicable to any of the Loans pursuant to subsection 2.2E) or
the amount of any fees payable hereunder; increases the maximum duration of
Interest Periods permitted hereunder; reduces the amount or postpones the due
date of any amount payable in respect of, or extends the required expiration
date of, any Letter of Credit; changes in any manner the obligations of the
Lenders relating to the purchase of participations in Letters of Credit; or
changes in any manner the provisions contained in subsection 8.1 or this
subsection 10.6 shall be effective only if evidenced by a writing signed by or
on behalf of all the Lenders. In addition, (i) any amendment, modification,
termination or waiver of any of the provisions contained in Section 4 shall be
effective only if evidenced by a writing signed by or on behalf of the
Administrative Agent and the Requisite Lenders, (ii) no amendment,
modification, termination or waiver of any provision of any Note shall be
effective without the written concurrence of the Lender which is the holder of
that Note, (iii) no amendment, modification, termination or waiver of any
provision of subsection
108
<PAGE> 116
2.1A(ii) or of any other provision of this Agreement relating to the Swing Line
Loan Commitment or the Swing Line Loans shall be effective without the written
concurrence of Swing Line Lender, (iv) no amendment, modification, termination
or waiver of any provision of subsection 2.1A(iii) or of any other provision of
this Agreement relating to the Canadian Loan Commitment or the Canadian Loans
shall be effective without the written concurrence of the Canadian Lender, and
(v) no amendment, modification, termination or waiver of any provision of
Section 9 or of any other provision of this Agreement which, by its terms,
expressly requires the approval or concurrence of the Administrative Agent
shall be effective without the written concurrence of the Administrative Agent.
The Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given. No notice to or demand on the Borrowers in any case shall entitle the
Borrowers to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this subsection 10.6 shall be binding upon each
Lender at the time outstanding, each future Lender and, if signed by the
Borrowers, on the Borrowers.
10.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be
within the limitations of, another covenant shall not avoid the occurrence of
an Event of Default or Potential Event of Default if such action is taken or
condition exists.
10.8 NOTICES.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telefacsimile or three Business Days
after depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to the Administrative Agent shall not be
effective until received. For the purposes hereof, the address of each party
hereto shall be as set forth under such party's name on the signature pages
hereof or (i) as to the Borrowers and the Administrative Agent, such other
address as shall be designated by such Person in a written notice delivered to
the other parties hereto and (ii) as to each other party, such other address as
shall be designated by such party in a written notice delivered to the
Administrative Agent.
109
<PAGE> 117
10.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein
shall survive the execution and delivery of this Agreement and the making of
the Loans and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law
to the contrary, the agreements of the Borrowers set forth in subsections 2.6D,
2.7, 3.5A, 3.6, 10.2, 10.3 and 10.4 and the agreements of the Lenders set forth
in subsections 9.2C, 9.4 and 10.5 shall survive the payment of the Loans, the
cancellation or expiration of the Letters of Credit and the reimbursement of
any amounts drawn thereunder, and the termination of this Agreement.
10.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of the Administrative Agent or any
Lender in the exercise of any power, right or privilege hereunder or under any
other Loan Document shall impair such power, right or privilege or be construed
to be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other power, right or privilege. All rights
and remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
10.11 MARSHALLING; PAYMENTS SET ASIDE.
Neither the Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of the Borrowers or any other party
or against or in payment of any or all of the Obligations. To the extent that
the Borrowers makes a payment or payments to the Administrative Agent or the
Lenders (or to the Administrative Agent for the benefit of the Lenders), or the
Administrative Agent or the Lenders enforce any security interests or exercise
their rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause, then, to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor or related thereto,
shall be revived and continued in full force and effect as if such payment or
payments had not been made or such enforcement or setoff had not occurred.
10.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.
110
<PAGE> 118
10.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF THE LENDERS' RIGHTS.
The obligations of the Lenders hereunder are several and no Lender
shall be responsible for the obligations or Commitment of any other Lender
hereunder. Nothing contained herein or in any other Loan Document, and no
action taken by the Lenders pursuant hereto or thereto, shall be deemed to
constitute the Lenders as a partnership, an association, a joint venture or any
other kind of entity. The amounts payable at any time hereunder to each Lender
shall be a separate and independent debt, and each Lender shall be entitled to
protect and enforce its rights arising out of this Agreement and it shall not
be necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.
10.14 HEADINGS.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
10.15 APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
10.16 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of the Lenders (it being understood that
the Lenders' rights of assignment are subject to subsection 10.1). Neither the
Borrowers' rights or obligations hereunder nor any interest therein may be
assigned or delegated by the Borrowers without the prior written consent of all
the Lenders.
10.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY BORROWER ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND
DELIVERING THIS AGREEMENT, EACH BORROWER, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY
111
<PAGE> 119
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, TO THE BORROWERS AT THEIR ADDRESS
PROVIDED IN ACCORDANCE WITH SUBSECTION 10.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE
IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE BORROWERS IN
ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT THE LENDERS RETAIN THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS
AGAINST THE BORROWERS IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO
THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1402 OR OTHERWISE.
10.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION
OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of
this waiver is intended to be all-encompassing of any and all disputes that may
be filed in any court and that relate to the subject matter of this
transaction, including contract claims, tort claims, breach of duty claims and
all other common law and statutory claims. Each party hereto acknowledges that
this waiver is a material inducement to enter into a business relationship,
that each has already relied on this waiver in entering into this Agreement,
and that each will continue to rely on this waiver in their related future
dealings. Each party hereto further warrants and represents that it has
reviewed this waiver with its legal counsel and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH
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<PAGE> 120
OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF
THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO
THE LOANS MADE HEREUNDER. In the event of litigation, this Agreement may be
filed as a written consent to a trial by the court.
10.19 CONFIDENTIALITY.
Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement which has been identified as confidential by
the Borrowers in accordance with such Lender's customary procedures for
handling confidential information of this nature and in accordance with safe
and sound banking practices, it being understood and agreed by the Borrowers
that in any event a Lender may make disclosures to Affiliates of such Lender or
disclosures reasonably required by any bona fide assignee, transferee or
participant in connection with the contemplated assignment or transfer by such
Lender of any Loans or any participations therein or disclosures required or
requested by any governmental agency or representative thereof or pursuant to
legal process; provided that, unless specifically prohibited by applicable law
or court order, each Lender shall notify the Borrowers of any request by any
governmental agency or representative thereof (other than any such request in
connection with any examination of the financial condition of such Lender by
such governmental agency) for disclosure of any such non-public information
prior to disclosure of such information; and provided, further that in no event
shall any Lender be obligated or required to return any materials furnished by
any Borrower or any of its respective Subsidiaries.
10.20 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by the Borrowers
and the Administrative Agent of written or telephonic notification of such
execution and authorization of delivery thereof.
[Remainder of page intentionally left blank]
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<PAGE> 121
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
WOLVERINE TUBE, INC.
By: /s/ James E. Deason
----------------------------------
Name:
Title:
Notice Address:
Wolverine Tube, Inc.
1525 Perimeter Parkway, Suite 210
Huntsville, Alabama 35808
Attention: James E. Deason
WOLVERINE TUBE (CANADA) INC.
By: /s/ James E. Deason
----------------------------------
Name:
Title:
Notice Address:
Wolverine Tube, Inc.
1525 Perimeter Parkway, Suite 210
Huntsville, Alabama 35808
Attention: James E. Deason
S-1
<PAGE> 122
CREDIT SUISSE FIRST BOSTON,
as the Administrative Agent
By: /s/ R. N. Finney
---------------------------------
Name: R. N. Finney
Title: Managing Director
By: /s/ Christian Bourqui
---------------------------------
Name: Christian Bourqui
Title: Associate
Notice Address:
Credit Suisse First Boston
11 Madison Avenue
New York, NY 10010-3629
Attention: Steve Pickhardt
CREDIT SUISSE FIRST BOSTON,
as a Lender
By: /s/ R. N. Finney
---------------------------------
Name: R. N. Finney
Title: Managing Director
By: /s/ Christian Bourqui
---------------------------------
Name: Christian Bourqui
Title: Associate
Notice Address:
Credit Suisse First Boston
11 Madison Avenue
New York, NY 10010-3629
Attention: Steve Pickhardt
S-2
<PAGE> 123
MELLON BANK, N.A., individually and as
Documentation Agent
By: /s/ Dwayne R. Finney
-----------------------------
Name: Dwayne R. Finney
Title: Assistant Vice President
Notice Address:
Mellon Bank, N.A.
Three Mellon Bank Center
23rd Floor
Pittsburgh, PA 15259-0003
Attention: Loan Administration
Copy to:
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258-0001
BANK OF AMERICA ILLINOIS
as a Lender
By: /s/ Michael McKenney
-----------------------------
Name: Michael McKenney
Title: Vice President
Notice Address:
Bank of America Illinois
231 South LaSalle Street
Chicago, IL 60697
Attention: Michael J. McKenney
S-3
<PAGE> 124
CREDIT LYONNAIS, ATLANTA AGENCY
as a Lender
By: /s/ David M. Cawrse
-----------------------------
Name: David M. Cawrse
Title: First Vice President & Manager
Notice Address:
Credit Lyonnais, Atlanta Agency
One Peachtree Center
303 Peachtree Street NE
Suite 4400
Atlanta, GA 30308
Attention: Gerald Finney
NATIONSBANK, N.A. (SOUTH)
as a Lender
By: /s/ Greg McCrery
-----------------------------
Name: Greg McCrery
Title: Vice President
Notice Address:
NationsBank, N.A. (South)
600 Peachtree Street NE
21st Floor
Atlanta, GA 30308
Attention: Nancy Goldman
S-4
<PAGE> 125
THE BANK OF NOVA SCOTIA,
as a Lender
By: /s/ W. J. Brown
-------------------------------
Name: W. J. Brown
Title: Vice President
Notice Address:
The Bank of Nova Scotia
Suite 2700
600 Peachtree Street NE
Atlanta, GA 30308
Attention: Pat Brown
CORESTATES BANK, NA
as a Lender
By: /s/ Karen Leaf
-------------------------------
Karen Leaf
Vice President
Notice Address:
Corestates Bank, NA
FC1-8-3-12
P.O. Box 7618
Philadelphia, PA 19101
Attention: Karen Leaf
S-5
<PAGE> 126
SUNTRUST BANK, NASHVILLE, N.A.
as a Lender
By: /s/ W. W. Woodring
--------------------------------
Name: W. W. Woodring
Title: Senior Vice President
Notice Address:
Suntrust Bank, Nashville, N.A.
P.O.Box 305110
Nashville, TN 37230-5110
Attention: Tom Powell
S-6
<PAGE> 1
Exhibit 11
WOLVERINE TUBE, INC.
COMPUTATION OF EARNINGS PER SHARE
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three-month period ended:
-------------------------
March 29, March 30,
1997 1996
--------- ---------
<S> <C> <C>
Net income applicable to common shares ................... $ 8,767 $10,193
------- -------
Weighted average common shares outstanding ............... 13,980 13,672
Common equivalent shares outstanding ..................... 260 544
------- -------
Weighted average common and common equivalent shares
outstanding (1) .......................................... 14,240 14,126
======= =======
Net income per common share .............................. $ .62 $ .72
======= =======
</TABLE>
- ------------------------------
(1) Represents shares issuable upon the exercise of stock options based
upon the treasury stock method using the average market price. As fully
diluted shares outstanding are the same as primary shares outstanding
for all periods presented, net income per common share on a
fully-diluted basis is not separately presented.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED STATEMENTS OF INCOME OF WOLVERINE TUBE, INC. FOR THE
THREE MONTH PERIOD ENDED MARCH 29, 1997, AND THE CONDENSED CONSOLIDATED BALANCE
SHEET OF WOLVERINE TUBE, INC. AT MARCH 29, 1997 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-29-1997
<CASH> 2,578
<SECURITIES> 0
<RECEIVABLES> 93,733<F1>
<ALLOWANCES> 0
<INVENTORY> 76,862
<CURRENT-ASSETS> 173,878
<PP&E> 151,018<F1>
<DEPRECIATION> 0
<TOTAL-ASSETS> 417,470
<CURRENT-LIABILITIES> 55,558
<BONDS> 100,465
0
2,000
<COMMON> 140
<OTHER-SE> 217,468
<TOTAL-LIABILITY-AND-EQUITY> 417,470
<SALES> 173,576
<TOTAL-REVENUES> 173,576
<CGS> 151,981
<TOTAL-COSTS> 151,981
<OTHER-EXPENSES> 5,660
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,424
<INCOME-PRETAX> 13,511
<INCOME-TAX> 4,674
<INCOME-CONTINUING> 8,837
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,837
<EPS-PRIMARY> 0.62
<EPS-DILUTED> 0.62
<FN>
<F1>THE VALVES FOR THE TAGS RECEIVABLES AND PP&E ARE SHOWN NET OF THEIR RESPECTIVE
ALLOWANCE ACCOUNTS.
</FN>
</TABLE>
