SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For quarter ended June 30, 1994 Commission File Number 33-24317
JORDAN INDUSTRIES, INC.
(Exact name of registrant as specified in charter)
Illinois 36-3598114
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ArborLake Centre, Suite 550 60015
1751 Lake Cook Road, (Zip Code)
Deerfield, Illinois
(Address of Principal Executive Offices)
Registrant's telephone number, including Area Code:
(708) 945-5591
Former name, former address and former fiscal year, if changed since last
report: Not applicable.
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 twelve (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 ninety (90)
days.
Yes X No
The aggregate market value of voting stock held by non-affiliates
of the Registrant is not determinable as such shares were privately
placed and there is currently no public market for such shares.
The number of shares outstanding of Registrant's Common Stock as of
August 12, 1994: 93,501.0004
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FORM 10-Q QUARTERLY REPORT
JORDAN INDUSTRIES, INC.
INDEX
Part I. Page No.
Financial Information
Condensed Consolidated Balance Sheets
at June 30, 1994, and December 31, 1993 3
Condensed Consolidated Statements of Operations
for the Second Quarter and Six Months Ended
June 30, 1994 and 1993 4
Condensed Consolidated Statements of Cash Flows
for the Six Months Ended June 30, 1994
and 1993 5
Notes to Condensed Consolidated Financial
Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Part II.
Other Information 13
Signatures 14
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JORDAN INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(ALL DOLLAR AMOUNTS IN THOUSANDS)
June 30, December 31,
1994 1993
ASSETS
Current Assets:
Cash and cash equivalents $ 15,851 $ 68,273
Accounts receivable - net 49,481 47,786
Inventories 73,656 61,186
Prepaid expenses and other current
assets 7,461 5,735
Total Current Assets 146,449 182,980
Property, plant and equipment - net 67,013 57,700
Notes receivable from affiliates 9,638 5,535
Goodwill - net 89,346 57,102
Other assets 35,930 35,192
Total Assets $348,376 $338,509
LIABILITIES AND NET CAPITAL DEFICIENCY
Current Liabilities:
Accounts payable $ 26,367 $ 31,806
Accrued liabilities 27,634 26,086
Advance deposits 3,090 1,696
Current portion of long-term debt 1,320 1,902
Total Current Liabilities 58,411 61,490
Long-term debt 377,193 356,981
Other non-current liabilities 2,470 3,649
Deferred income taxes 3,960 6,784
Minority interest and other 1,099 31
Redeemable preferred stock 9 243
Net Capital Deficiency:
Common stock 1 1
Additional paid-in capital 2,972 2,972
Accumulated deficit (97,739) (93,642)
Total Net Capital Deficiency (94,766) (90,669)
Total Liabilities and Net Capital
Deficiency $348,376 $338,509
See accompanying notes to condensed consolidated financial statements.
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JORDAN INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(ALL DOLLAR AMOUNTS IN THOUSANDS)
SIX MONTHS ENDED
SECOND QUARTER June 30,
1994 1993 1994 1993
Net sales $102,761 $88,096 $183,688 $158,069
Cost of sales, excluding
depreciation 62,807 53,103 113,742 97,868
Selling, general and administra-
tive expenses 24,004 20,192 45,174 36,719
Depreciation 2,460 2,344 4,815 4,576
Amortization of goodwill and other
intangibles 1,974 2,208 4,021 4,434
Management fees and other 488 430 758 1,403
Operating income 11,028 9,819 15,178 13,069
Other (income) and expenses:
Interest expense 10,112 9,166 20,071 18,334
Interest income (207) (249) (501) (350)
Interest income from affiliates - (142) - (255)
Total other expenses 9,905 8,775 19,570 17,729
Income (loss) before income taxes
and minority interest 1,123 1,044 (4,392) (4,660)
Provision (benefit) for income taxes 537 70 (1,067) 416
Income (loss) before minority
interest 586 974 (3,325) (5,076)
Minority interest (4) 4 854 24
Net Income (Loss) $ 590 $ 970 $(4,179)$ (5,100)
See accompanying notes to condensed consolidated financial statements.
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JORDAN INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(ALL DOLLAR AMOUNTS IN THOUSANDS)
SIX MONTHS ENDED
June 30,
1994 1993
Cash flows from operating activities:
Net loss $(4,179) $(5,100)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 9,462 10,021
Benefit from deferred income taxes (2,824) (400)
Minority interest 1,054 24
Non-cash interest 4,638 -
Changes in operating assets and
liabilities net of effects from
acquisitions:
Increase in current assets (9,767) (3,723)
Increase (decrease) in current
liabilities (3,887) 2,597
Increase in non-current assets (1,047) -
Net cash provided by (used in)
operating activities (6,550) 3,419
Cash flows from investing activities:
Capital expenditures (3,292) (3,382)
Notes receivable from affiliates (4,103) (2,200)
Acquisition of subsidiaries (35,516) -
Acquisitions of minority interests and other (1,227) (936)
Other 81 (597)
Net cash used in investing activities (44,057) (7,115)
Cash flows from financing activities:
Repayment of long-term debt (1,620) (448)
Deferred financing costs (195) (178)
Net cash used in financing activities (1,815) (626)
Net decrease in cash and cash equivalents (52,422) (4,322)
Cash and cash equivalents at beginning of period 68,273 8,886
Cash and cash equivalents at end of period $15,851 $ 4,564
Cash paid during the period for:
Interest $15,259 $17,052
Income taxes, net $ 508 $ 616
Non-cash investing activities:
Capital leases $ 7,107 $ 171
See accompanying notes to condensed consolidated financial statements.
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JORDAN INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(ALL DOLLAR AMOUNTS IN THOUSANDS)
A. Organization
The unaudited condensed consolidated financial statements, which reflect all
adjustments that management believes necessary to present fairly the results
of interim operations, should be read in conjunction with the Notes to the
Consolidated Financial Statements (including the Summary of Significant
Accounting Policies) included in the Company's audited consolidated financial
statements for the year ended December 31, 1993, which are included in the
Company's Annual Report filed on Form 10-K for such year (the "1993 10-K").
Results of operations for the interim periods are not necessarily indicative
of annual results of operations.
B. Inventories
Inventories are summarized as follows:
June 30, December 31,
1994 1993
Raw materials $13,952 $15,000
Work in process 6,522 5,868
Finished goods 53,182 40,318
$73,656 $61,186
C. Notes Receivable from Affiliates
At June 30, 1994, the Company had notes receivable from Cape Craftsmen, Inc.,
a company that is controlled by the partners, principals, employees and
affiliates of The Jordan Company, of $9,638.
D. Accounting for Income Taxes
Effective January 1, 1993, the Company adopted FAS No. 109, which requires
recognition of deferred tax assets and liabilities for the expected future tax
consequences of events that have been included in the financial statements or
tax returns. Adoption of the new rules had no material effect on either the
Company's operating results or its financial position for the twelve months
ended December 31, 1993.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components
of the Company's deferred tax liabilities and assets as of June 30, 1994, are
as follows:
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PAGE 7
JORDAN INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(ALL DOLLAR AMOUNTS IN THOUSANDS)
Deferred tax liabilities
Tax over book depreciation $ 8,960
Other 496
Total deferred tax liabilities 9,456
Deferred tax assets
NOL carryforwards 28,500
Other 2,779
Total deferred tax assets 31,279
Valuation allowance for deferred
tax assets (25,783)
Net deferred tax assets 5,496
Net deferred tax liabilities $ 3,960
Note E. Acquisition of Subsidiaries
On January 4, 1994, the Company, through its newly-formed wholly-owned
subsidiary, J2, Inc., bought substantially all of the net assets of Valmark
Industries, Inc. ("Valmark"), a manufacturer of membrane switches, graphic
panel overlays, labels, and bar codes.
The purchase price of $18,016, including costs incurred directly related to
the transaction, was allocated to working capital of $2,105, property, plant
and equipment of $1,358, non-compete agreements of $1,500, other assets of
$58, and the assumption of a long-term capital lease obligation of $4 and
resulted in an excess purchase price over net identifiable assets of $12,999.
The acquisition was financed with the issuance of a $4,000 Subordinated Note
to a former shareholder, and cash.
On May 20, 1994, the Company, through its wholly-owned subsidiary, J2, Inc.,
bought all of the common stock of Pamco Printed Tape and Label Co., Inc.
("Pamco"), a manufacturer of printed labels.
The purchase price of $25,500, including costs incurred directly related to
the transaction, was allocated to working capital of $2,237, property, plant
and equipment of $2,690, non-compete agreements of $1,000, and the assumption
of a mortgage note of $731 and resulted in an excess purchase price over net
identifiable assets of $20,304. The acquisition was financed with the
issuance of a $4,000 Subordinated Note to a former shareholder, and cash.
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JORDAN INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(ALL DOLLAR AMOUNTS IN THOUSANDS)
Note F. Revolving Credit Facility
On June 29, 1994, the Company entered into a $50 million five year revolving
credit facility with the First National Bank of Boston ("FNBB"). The facility
will be used for working capital and acquisitions over the term of the loan.
There was no outstanding balance on the revolving credit facility at June 30,
1994.
Note G. Postponed Welcome Home Initial Public Offering
During the first quarter of 1994, Welcome Home, Inc. ("Welcome Home"), filed
a registration statement relating to the proposed initial public offering of
3.0 million shares of Welcome Home Common Stock (and an additional .45 million
shares issuable upon exercise of an over-allotment option granted by Welcome
Home to its underwriters). In the registration statement, Welcome Home
initially estimated that the initial public offering price per share would
have been between $13.00 and $15.00. The net proceeds were to be used by
Welcome Home to pay transaction expenses and to repay certain intercompany
indebtedness owed by Welcome Home to Jordan Industries, Inc. The initial
public offering was expected to be completed in June of 1994. However, in
light of the market conditions at the time and at the advice of its investment
bankers, Welcome Home postponed the offering. The postponement will not have
an adverse effect on the ongoing business of Welcome Home since the proceeds
from the offering were to be used to pay intercompany indebtedness, owed to
Jordan Industries, Inc., which, by its terms, is not required to be repaid at
this time. The initial public offering may be attempted in the next
twelve months, although no assurances can be given that the offering will be
at the same pricing or will be completed.
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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(ALL DOLLAR AMOUNTS IN THOUSANDS)
The following discussion should be read in conjunction with Management's
Discussion and Analysis of Financial Condition and Results of Operations
contained in the 1993 10-K and the financial statements and the related notes
thereto which are included elsewhere in this quarterly report.
Results of Operations
Summarized below are the net sales, operating income and operating margins (as
defined) for each of the Company's business segments for the second quarter
and six months ended June 30, 1994 and 1993. This discussion reviews the
foregoing segment data and certain of the consolidated financial data for the
Company.
SIX MONTHS ENDED
SECOND QUARTER June 30,
1994 1993 1994 1993
Net Sales:
Consumer Products $ 49,156 $39,780 $ 89,615 $ 74,263
Industrial Products and
Equipment 30,549 29,114 58,137 54,608
Specialty Advertising and
Calendars 23,056 19,202 35,936 29,198
Total $102,761 $88,096 $183,688 $158,069
Operating Income (a):
Consumer Products $ 5,218 $ 4,001 $ 7,854 $ 5,992
Industrial Products and
Equipment 6,133 5,654 11,063 9,927
Specialty Advertising and
Calendars 2,549 2,174 1,490 1,387
Total $ 13,900 $11,829 $ 20,407 $ 17,306
Operating Margins (b):
Consumer Products 10.6% 10.1% 8.8% 8.1%
Industrial Products and
Equipment 20.1 19.4 19.0 18.2
Specialty Advertising and
Calendars 11.1 11.3 4.1 4.8
Consolidated 13.5 13.4 11.1 10.9
(a) Before corporate overhead of $2,872 and $2,010 for the second quarter
ended June 30, 1994 and 1993, respectively and $5,229 and $4,237 for the
six months ended June 30, 1994 and 1993, respectively.
(b) Operating margin is operating income divided by net sales.
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PAGE 10
Consumer Products. As of June 30, 1994, the Consumer Products segment
consists of DACCO, Sate-Lite, Riverside, and Welcome Home.
Net sales during the second quarter and first six months of 1994 increased
$9.4 million or 23.6% and $15.4 million or 20.7%, respectively, over the same
periods in 1993. The second quarter sales increase was due to increased sales
of rebuilt converters and soft parts at DACCO, $1.0 million, reflectors at
Sate-Lite, $.8 million, music, books, gifts, and bibles at Riverside, $2.6
million, and a 16.0% same store sales increase and 21 additional stores at
Welcome Home, $4.9 million. The increase in sales for the first six months
were due to increased sales of rebuilt converters and other parts at DACCO,
$3.0 million, bicycle reflectors at Sate-Lite, $.6 million, music, books,
gifts and bibles at Riverside, $4.2 million, and a 13.9% same store sales
increase and 21 additional stores at Welcome Home, $7.6 million.
Operating income increased $1.2 million or 30.4% and $1.9 million or 31.1% in
the second quarter and first six months of 1994, respectively, compared to the
same periods in 1993. The second quarter increase was due to increases at
Sate-Lite, $.2 million, Riverside, $.5 million, and DACCO, $.4 million. The
year-to-date increase was due to increases at DACCO, $1.2 million, and
Riverside, $.6 million.
The second quarter operating margin increased from 10.1% in 1993 to 10.6% and
the six month year-to-date margin increased from 8.1% in 1993 to 8.8%. These
increases were due to higher sales volume and continuing cost control.
Industrial Products and Equipment. As of June 30, 1994, the Industrial
Products and Equipment segment consists of Parsons, Dura-Line, Imperial,
Scott, Gear, Hudson, AIM and Cambridge.
Net sales during the second quarter and first six months of 1994 increased
$1.4 million or 4.9% and $3.5 million or 6.5%, respectively, over the
comparable periods in 1993. The second quarter sales increase was due to
increased sales of Innerduct at Dura-Line, $.9 million, motors at Imperial,
$.3 million, gear sales at Gear, $.2 million, and connectors at AIM, $.5
million, offset by a decrease in fabrication sales at Parsons of $.5 million.
The year-to-date increase was due to an increase in Innerduct sales at Dura-
Line, $2.4 million, motors at Imperial, $1.0 million, connectors at AIM and
Cambridge, $.8 million and $.6 million, respectively, offset by a decrease in
fabrication sales at Parsons, $1.5 million.
Operating income increased $.5 million or 8.5% and $1.1 million or 11.4% in
the second quarter and first six months of 1994, respectively, compared to the
same periods in 1993. The second quarter increase was due to an increase at
AIM, $.5 million, Hudson, $.3 million, Gear, $.2 million, and Scott, $.2
million, offset by a decrease at Dura-Line, $.7 million. The year-to-date
increase was due to increases at Hudson, $.8 million, Cambridge, $.4 million,
Scott, $.4 million, Gear, $.4 million and AIM, $.3 million, offset by
decreases at Dura-Line and Parsons, $.7 million and $.5 million, respectively.
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PAGE 11
The second quarter operating margin increased from 19.4% in 1993 to 20.1% and
the six month year-to-date margin increased from 18.2% in 1993 to 19.0%.
These increases were due to higher sales and lower operating expenses.
Specialty Advertising and Calendars. As of June 30, 1994, the Specialty
Advertising and Calendars segment consists of JII/SPAI, Beemak, Valmark and
Pamco.
Net sales during the second quarter and first six months of 1994 increased
$3.9 million or 20.1% and $6.7 million or 23.1%, respectively, compared to the
same periods in 1993. The second quarter and six month sales increases are
both attributable to the acquisition of Valmark and Pamco during 1994.
Without the Valmark and Pamco acquisitions, net sales for the second quarter
decreased $.9 million or 4.8% and net sales for the six months decreased $1.2
million or 4.4% compared to the same periods in 1993. This was due to
decreased sales of calendar, ad-specialty and school annuals at JII/SPAI, $.7
million and decreased molding sales at Beemak, $.2 million, in the second
quarter. The six month decrease was due to lower ad-specialty sales at
JII/SPAI, $1.3 million. Valmark and Pamco contributed $6.6 million and $1.4
million, respectively, to net sales during the first six months of 1994.
Operating income increased $.4 million or 17.2% and $.1 million or 7.4% in the
second quarter and first six months of 1994, respectively compared to the same
periods in 1993. The increases were due to the acquisitions of Valmark and
Pamco which favorably affected operating income by $.3 million in the second
quarter and $.3 million in the six month period. Without these acquisitions,
operating income would have increased $.1 million in the second quarter, and
decreased $.2 million for the six month period, as compared to 1993. Both
fluctuations were attributable to JII/SPAI.
The second quarter operating margin decreased from 11.3% in 1993 to 11.1% and
the six month year-to-date operating margin decreased from 4.8% in 1993 to
4.1%.
Consolidated Results: (See Condensed Consolidated Statements of Operations.)
Operating income for the first six months increased $2.1 million or 16.1%
compared to 1993 due to the increase in sales, lower amortization expense and
lower management fees and other. Interest expense for the first six months
of 1994 increased from $18.3 million to $20.1 million due to higher debt
levels. Six month interest income increased from $.4 million to $.5 million
due to higher cash balances. Primarily, as a result of higher operating
income, the Company incurred a net loss of $4.2 million in the first six
months of 1994 as compared to a net loss of $5.1 million in 1993.
Liquidity and Capital Resources. The Company had $88.0 million of working
capital at June 30, 1994, compared to $121.5 million at the end of 1993. The
decrease in working capital was due to lower cash balances, higher advance
deposits, and higher accrued liabilities offset by higher accounts receivable,
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PAGE 12
higher inventory, higher prepaid expenses, lower accounts payable and lower
current portion of long-term debt.
The Company's net cash from operating activities for the six months ended June
30, 1994 decreased $10.0 million versus the same period in 1993. This
decrease was due to a higher benefit for deferred taxes, $2.4 million, higher
increase in current assets, $6.0 million, a decrease in current liabilities,
$6.5 million, lower depreciation and amortization, $.6 million, and an
increase in non-current assets of $1.0 million, offset by a lower net loss,
$.9 million, higher minority interest, $1.0 million, and non-cash interest of
$4.6 million.
The net cash used in investing activities for the six months ended June 30,
1994, increased $36.9 million versus the same period in 1993. This increase
was due to higher advances to affiliates, $1.9 million, the acquisition of
Valmark and Pamco, $35.5 million, and an increase in acquisitions of minority
interest and other of $.3 million, offset by lower capital expenditures, $.1
million, and other of $.7 million.
The net cash used in financing activities for the six months ended June 30,
1994 increased $1.0 million versus the same period in 1993. This increase was
due to higher debt repayments, $1.1 million, offset by lower deferred
financing costs, $.1 million
The Company is, and expects to continue to be, in compliance with the
provisions of the Indenture and the new Revolving Credit Facility.
None of the subsidiaries require significant amounts of capital spending to
sustain its current operations or to achieve projected growth.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K/A
(a) 10. Revolving Credit Agreement dated as of June 29,
1994 among JII, Inc., a wholly-owned subsidiary of the
Company, and The First National Bank of Boston and
certain other Banks.
(b) Form 8-K/A filed on August 2, 1994, for the Agreement
for Purchase and Sale of Assets of Valmark Industries,
Inc. on November 24, 1993 and Agreement for Purchase
and Sale of Stock of Pamco Printed Tape and Label Co.,
Inc. on May 19, 1994.
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PAGE 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JORDAN INDUSTRIES, INC.
August 12, 1994 By: /s/ Thomas C. Spielberger
Thomas C. Spielberger
Controller and Principal
Accounting Officer
REVOLVING CREDIT AGREEMENT
--------------------------
dated as of June 29, 1994
among
JII, INC.
and
THE FIRST NATIONAL BANK OF BOSTON
CERTAIN OTHER BANKS
and
THE FIRST NATIONAL BANK OF BOSTON, as Agent
TABLE OF CONTENTS
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Page
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Section 1. DEFINITIONS AND RULES OF INTERPRETATION 1
Section 1.1. Definitions 1
Section 1.2. Rules of Interpretation 19
Section 2. THE REVOLVING CREDIT FACILITY 20
Section 2.1. Commitment to Lend 20
Section 2.2. Commitment Fee 20
Section 2.3. Reduction of Total Commitment 20
Section 2.4. The Revolving Credit Notes 21
Section 2.5. Interest on Revolving Credit Loans 21
Section 2.6. Request for Revolving Credit Loans 22
Section 2.7. Conversion Options 22
Section 2.7.1. Conversion to Different Type of Revolving
Credit Loan 22
Section 2.7.2. Continuation of Type of Revolving
Credit Loan 23
Section 2.7.3. Eurodollar Rate Loans 23
Section 2.8. Funds for Revolving Credit Loans 23
Section 2.8.1. Funding Procedures 23
Section 2.8.2. Advances by Agent 24
Section 3. REPAYMENT OF THE REVOLVING CREDIT LOANS 24
Section 3.1. Maturity 24
Section 3.2. Mandatory Repayments of Revolving Credit Loans 24
Section 3.3. Optional Repayments of Revolving Credit
Loans 25
Section 4. LETTERS OF CREDIT 25
Section 4.1. Letter of Credit Commitments 25
Section 4.1.1. Commitment to Issue Letters of Credit 25
Section 4.1.2. Letter of Credit Applications 26
Section 4.1.3. Terms of Letters of Credit 26
Section 4.1.4. Reimbursement Obligations of Banks 26
Section 4.1.5. Participations of Banks 26
Section 4.2. Reimbursement Obligation of the Borrower 26
Section 4.3. Letter of Credit Payments 27
Section 4.4. Obligations Absolute 28
Section 4.5 Reliance by Issuer 28
Section 4.6. Letter of Credit Fee 28
Section 5. CERTAIN GENERAL PROVISIONS 29
Section 5.1. Closing Fee 29
Section 5.2. Agent's Fee 29
Section 5.3. Funds for Payments 29
Section 5.3.1. Payments to Agent 29
Section 5.3.2. No Offset 29
Section 5.4. Computations 30
Section 5.5. Inability to Determine Eurodollar Rate 30
Section 5.6. Illegality 30
Section 5.7. Additional Costs 31
Section 5.8. Capital Adequacy 32
Section 5.9. Certificate 33
Section 5.10. Indemnity 33
Section 5.11. Interest on Overdue Amounts 33
Section 5.12. Replacement Banks 33
Section 6. COLLATERAL SECURITY AND GUARANTIES 34
Section 6.1. Security of the Borrower 34
Section 6.2. Guaranties and Security of Subsidiaries 34
Section 6.3. Parent Guaranty 35
Section 7. REPRESENTATIONS AND WARRANTIES 35
Section 7.1. Corporate Authority 35
Section 7.1.1. Incorporation; Good Standing 35
Section 7.1.2. Authorization 35
Section 7.1.3. Enforceability 35
Section 7.2. Governmental Approvals 36
Section 7.3. Title to Properties; Leases 36
Section 7.4. Financial Statements 36
Section 7.5. No Material Changes 36
Section 7.6. Franchises, Patents, Copyrights 37
Section 7.7. Litigation 37
Section 7.8. No Materially Adverse Contracts 37
Section 7.9. Compliance with Other Instruments, Laws 37
Section 7.10. Tax Status 38
Section 7.11. No Event of Default 38
Section 7.12. Holding Company and Investment Company Acts 38
Section 7.13. Absence of Financing Statements 38
Section 7.14. Perfection of Security Interest 38
Section 7.15. Certain Transactions 39
Section 7.16. Employee Benefit Plans 39
Section 7.16.1. In General 39
Section 7.16.2. Terminability of Welfare Plans 39
Section 7.16.3. Guaranteed Pension Plans 39
Section 7.16.4. Multiemployer Plans 40
Section 7.17. Regulations U and X 41
Section 7.18. Environmental Compliance 41
Section 7.19. Subsidiaries 42
Section 7.20. Chief Executive Offices 42
Section 7.21. Fiscal Year 42
Section 7.22. Disclosure 43
Section 8. AFFIRMATIVE COVENANTS OF THE BORROWER 43
Section 8.1. Punctual Payment 43
Section 8.2. Maintenance of Office 43
Section 8.3. Records and Accounts 43
Section 8.4. Financial Statements, Certificates and
Information 43
Section 8.5. Notices 45
Section 8.5.1. Defaults 45
Section 8.5.2. Environmental Events 45
Section 8.5.3. Notification of Claim against
Collateral 46
Section 8.5.4. Notice of Litigation and Judgments 46
Section 8.6. Corporate Existence; Maintenance of
Properties 46
Section 8.7. Insurance 46
Section 8.8. Taxes 47
Section 8.9. Inspection of Properties and Books 47
Section 8.9.1. General 47
Section 8.9.2. Communications with Accountants 48
Section 8.10. Compliance with Laws, Contracts, Licenses,
and Permits 48
Section 8.11. Employee Benefit Plans 49
Section 8.12. Use of Proceeds 49
Section 8.13. Additional Subsidiaries 49
Section 8.14. Fair Labor Standards Act 50
Section 8.15. Further Assurances 50
Section 9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER 50
Section 9.1. Restrictions on Indebtedness 50
Section 9.2. Restrictions on Liens 53
Section 9.3. Restrictions on Investments 55
Section 9.4. Distributions; Other Affiliate Payments 56
Section 9.5. Merger, Consolidation and Disposition of
Assets 57
Section 9.5.1. Mergers and Acquisitions 57
Section 9.5.2. Disposition of Assets 58
Section 9.6. Sale and Leaseback 58
Section 9.7. Compliance with Environmental Laws 58
Section 9.8. Employee Benefit Plans 59
Section 9.9. Change in Terms of Capital Stock 59
Section 9.10. Hostile Takeovers 59
Section 9.11. Limitation on Transactions 60
Section 9.12. Fiscal Year 60
Section 9.13. Other Debt Agreements 60
Section 10. FINANCIAL COVENANTS OF THE BORROWER 60
Section 10.1. Cash Flow Coverage Ratio 60
Section 10.2. Debt Service Coverage Ratio 60
Section 10.3. Minimum Net Worth 61
Section 11. CLOSING CONDITIONS 61
Section 11.1. Loan Documents 61
Section 11.2. Certified Copies of Charter Documents 61
Section 11.3. Corporate Action 61
Section 11.4. Incumbency Certificate 62
Section 11.5. Validity of Liens 62
Section 11.6. UCC Search Results 62
Section 11.7. Certificates of Insurance 62
Section 11.8. Opinions of Counsel 62
Section 11.9. Payment of Fees 62
Section 11.10. Consents and Approvals 62
Section 11.11. Projections 63
Section 12. CONDITIONS TO ALL BORROWINGS 63
Section 12.1. Representations True; No Event of Default 63
Section 12.2. No Legal Impediment 63
Section 12.3. Governmental Regulation 63
Section 12.4. Proceedings and Documents 63
Section 13. EVENTS OF DEFAULT; ACCELERATION; ETC 64
Section 13.1. Events of Default and Acceleration 64
Section 13.2. Termination of Commitments 66
Section 13.3. Remedies 67
Section 13.4. Distribution of Collateral Proceeds 67
Section 14. SETOFF 68
Section 15. THE AGENT 69
Section 15.1. Authorization 69
Section 15.2. Employees and Agents 69
Section 15.3. No Liability 69
Section 15.4. No Representations 69
Section 15.5. Payments 70
Section 15.5.1. Payments to Agent 70
Section 15.5.2. Distribution by Agent 70
Section 15.5.3. Delinquent Banks 70
Section 15.6. Holders of Notes 71
Section 15.7. Indemnity 71
Section 15.8. Agent as Bank 71
Section 15.9. Resignation 71
Section 15.10. Notification of Defaults and Events of
Default 72
Section 15.11. Duties in the Case of Enforcement 72
Section 16. EXPENSES 72
Section 17. INDEMNIFICATION 73
Section 18. SURVIVAL OF COVENANTS 73
Section 19. ASSIGNMENT AND PARTICIPATION 74
Section 19.1. Conditions to Assignment by the Banks 74
Section 19.2. Certain Representations and Warranties;
Limitations; Covenants 74
Section 19.3. Register 75
Section 19.4. New Notes 76
Section 19.5. Participations 76
Section 19.6. Disclosure 76
Section 19.7. Assignee or Participant Affiliated with
the Borrower 77
Section 19.8. Miscellaneous Assignment Provisions 77
Section 19.9. Assignment by Borrower 78
Section 20. NOTICES 78
Section 21. GOVERNING LAW 78
Section 22. HEADINGS 79
Section 23. COUNTERPARTS 79
Section 24. ENTIRE AGREEMENT 79
Section 25. WAIVER OF JURY TRIAL 79
Section 26. CONSENTS, AMENDMENTS, WAIVERS, ETC 79
Section 27. SEVERABILITY 80
EXHIBITS:
- - --------
Exhibit A - Form of Note
Exhibit B - Form of Non-Wholly-Owned Subsidiary Guaranty
Exhibit C - Form of Parent Guaranty
Exhibit D - Form of Security Agreement
Exhibit E - Form of Subsidiary Guaranty
Exhibit F - Form of Loan Request
Exhibit G - Form of Compliance Certificate
Exhibit H - Form of Assignment and Acceptance
SCHEDULES:
- - ---------
Schedule 1 - Banks; Commitment Amounts; Commitment
Percentages; Lending Offices
Schedule 7.3 - Title to Properties
Schedule 7.18 - Environmental Matters
Schedule 7.19 - Subsidiaries
Schedule 9.1 - Existing Indebtedness
Schedule 9.2 - Existing Liens
Schedule 9.3 - Existing Investments
<PAGE>
REVOLVING CREDIT AGREEMENT
--------------------------
This REVOLVING CREDIT AGREEMENT is made as of June 29, 1994, by and among JII,
INC. (the "Borrower"), a Delaware corporation having its principal place of
business at Arbor Lake Centre, Suite 550, 1751 Lake Cook Road, Deerfield,
Illinois 60015, THE FIRST NATIONAL BANK OF BOSTON, the other lending
institutions listed on Schedule 1 attached hereto, and THE FIRST NATIONAL BANK
OF BOSTON as agent for itself and such other lending institutions.
Section 1.DEFINITIONS AND RULES OF INTERPRETATION.
---------------------------------------
Section 1.1. Definitions. The following terms shall have the meanings set
forth in this Section 1 or elsewhere in the provisions of this Credit Agreement
referred to below:
Adjustment Date. The first day of the month immediately following the
month in which a Compliance Certificate is to be delivered by the Borrower
pursuant to Section 8.4(c) hereof.
Affected Bank. See Section 5.12 hereof.
Affiliate. Any Person that would be considered to be an affiliate of
another Person under Rule 144(a) of the Rules and Regulations of the Securities
and Exchange Commission, as in effect on the date hereof, if such other Person
were issuing securities.
Agent's Head Office. The Agent's head office located at 100 Federal
Street, Boston, Massachusetts 02110, or at such other location as the Agent may
designate from time to time.
Agent. The First National Bank of Boston acting as agent for the Banks.
Agent's Fee. See Section 5.2 hereof.
Agent's Special Counsel. Bingham, Dana & Gould or such other counsel as
may be approved by the Agent.
Applicable Margin. For each period commencing on an Adjustment Date
through the date immediately preceding the next Adjustment Date (each a "Rate
Adjustment Period"), the Applicable Margin shall be the applicable margin set
forth below with respect to the Parent's Cash Flow Coverage Ratio, as
determined for the fiscal period of the Parent and its Subsidiaries ending
immediately prior to the applicable Rate Adjustment Period:
Cash Flow Eurodollar Letter of
Coverage Ratio Base Rate Loans Rate Loans Credit Fees
Less than 1.675 1/2% 2% 2%
to 1:00
Greater than or 1/4% 1-3/4% 1-3/4%
equal to 1.675 to
1.00 and less than
1.80 to 1.00
Greater than or equal 0% 1-1/2% 1-1/2%
to 1.80 to 1.00
Notwithstanding the foregoing, (a) for Revolving Credit Loans outstanding and
the Letter of Credit Fees payable during the period commencing on the Closing
Date through the date immediately preceding the first Adjustment Date to occur
after the Closing Date, the Applicable Margin shall be the highest Applicable
Margin set forth above, and (b) if the Borrower fails to deliver any Compliance
Certificate pursuant to Section 8.4(c) hereof then, for the period commencing
on the next Adjustment Date to occur subsequent to such failure through the
date immediately preceding the Adjustment Date that occurs immediately
following the date on which such Compliance Certificate is delivered, the
Applicable Margin shall be the highest Applicable Margin set forth above.
Assignment and Acceptance. See Section 19.1 hereof.
Assumption Agreement. The Assumption Agreement, dated as of June 29,
1994, between the Borrower and the Parent, as such agreement is in effect on
the Closing Date.
Balance Sheet Date. December 31, 1993.
Banks. FNBB and the other lending institutions listed on Schedule 1
attached hereto and any other Person who becomes an assignee of any rights and
obligations of a Bank pursuant to Section 19 hereof.
Base Rate. The annual rate of interest announced from time to time by
FNBB at its head office in Boston, Massachusetts, as its "base rate".
Base Rate Loans. Revolving Credit Loans bearing interest calculated by
reference to the Base Rate.
Borrower. As defined in the preamble hereto.
Business Day. Any day on which banking institutions in Boston,
Massachusetts, New York, New York and Chicago, Illinois are open for the
transaction of banking business and, in the case of Eurodollar Rate Loans, also
a day which is a Eurodollar Business Day.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.
Capital Expenditures. Amounts paid or indebtedness incurred by any
Person in connection with the purchase or lease by such Person of Capital
Assets that would be required to be capitalized and shown on the balance sheet
of such Person in accordance with generally accepted accounting principles
provided, that Capital Expenditures shall not include amounts paid or
indebtedness incurred in connection with the purchase by any Person of all or
substantially all of the Capital Assets of any other Person or of a division of
any other Person, or capital stock of any other Person to the extent that such
acquisition is permitted under the terms of this Credit Agreement.
Capitalized Leases. Leases under which a Person is the lessee or
obligor, the discounted future rental payment obligations under which are
required to be capitalized on the balance sheet of the lessee or obligor in
accordance with generally accepted accounting principles.
Cash Flow Coverage Ratio. As at any date of determination and with
respect to any Person, the ratio of (a) the Consolidated Cash Flow of such
Person for the fiscal period ending on such date to (b) the sum of the
Consolidated Interest Expense of such Person for such fiscal period plus the
aggregate amount of all dividend payments made in cash during such fiscal
period with respect to any series of Preferred Stock of such Person or any of
such Person's Subsidiaries.
CERCLA. See Section 7.18 hereof.
Closing Date. The first date on which the conditions set forth in
Section 11 hereof have been satisfied and any Revolving Credit Loans are to be
made or any Letter of Credit is to be issued hereunder.
Code. The Internal Revenue Code of 1986.
Collateral. All of the property, rights and interests of the Borrower
and the Guarantors that are or are intended to be subject to the security
interests and created by the Security Documents.
Collateral Assignment of Intercompany Agreements. The Collateral
Assignment of Intercompany Agreements, dated on or prior to the Closing Date
among the Borrower, the domestic Subsidiaries, the Parent and the Agent, in
form and substance satisfactory to the Banks.
Commitments. The agreement of each Bank, subject to the terms and
conditions of this Credit Agreement, to make Revolving Credit Loans to, and to
participate in the issuance, extension and renewal of Letters of Credit for the
account of, the Borrower.
Commitment Amount. With respect to each Bank, the amount set forth on
Schedule 1 attached hereto as the amount of such Bank's Commitment, as the same
may be reduced from time to time; or if the Commitments are terminated pursuant
to the provisions hereof, zero.
Commitment Fee. See Section 2.2 hereof.
Commitment Percentage. With respect to each Bank, the percentage set
forth on Schedule 1 attached hereto as such Bank's percentage of the Total
Commitment.
Compliance Certificate. See Section 8.4(c) hereof.
Consolidated or consolidated. With reference to any term defined herein,
shall mean that term as applied to the accounts of the Parent and its
Subsidiaries or the Borrower and its Subsidiaries, as applicable, consolidated
in accordance with generally accepted accounting principles.
Consolidated Cash Flow. With respect to any Person, and for any fiscal
period, the sum, without duplication, of (a) the Consolidated Net Income for
such Person, plus (b) the portion of Consolidated Net Income attributable to
the minority interests in its Subsidiaries, to the extent not included in
calculating Consolidated Net Income, plus (c) any provisions for taxes based on
income or profits of such Person to the extent that such income or profits were
included in the calculation of the Consolidated Net Income of such Person, plus
(d) the Consolidated Interest Expense of such Person, plus (e) the amortization
of all intangible assets to the extent that such amortization was deducted in
the calculation of the Consolidated Net Income of such Person (including but
not limited to, inventory write-ups, goodwill, debt and financing costs and
Incentive Arrangements), plus (f) the aggregate amount of non-capitalized
transaction costs incurred in connection with financings or acquisitions,
(including, but not limited to, financing and refinancing fees), to the extent
such costs were deducted in the calculation of such Person's Consolidated Net
Income, plus (g) all depreciation and all other non-cash charges (including,
without limitation, such charges relating to purchase accounting adjustments
and, without duplication, non-cash charges in respect of Incentive
Arrangements), to the extent deducted in the calculation of such Person's
Consolidated Net Income, plus (h) any interest income to the extent such income
was not included in the calculation of such Person's Consolidated Net Income,
plus (i) all dividend payments on Preferred Stock (whether or not paid in
cash), to the extent such payments were deducted in the calculation of such
Person's Consolidated Net Income, plus (j) any extraordinary or non-recurring
charge or expense arising out of the implementation of Statement of Financial
Accounting Standards Nos. 106 or 109 to the extent deducted in the calculation
of such Person's Consolidated Net Income, provided that any such calculation of
Consolidated Cash Flow shall at all times be made on a Pro Forma Basis.
Consolidated Financial Obligations. With respect to any Person, for any
fiscal period, an amount equal to the sum of all payments on account of the
principal of Indebtedness that became due and payable or that are to become due
and payable during such fiscal period pursuant to any agreement or instrument
to which such Person or any of its Subsidiaries is a party relating to the
borrowing of money or the obtaining of credit or in respect of Capitalized
Leases. Demand obligations shall be deemed to be due and payable during any
fiscal period during which such obligations are outstanding.
Consolidated Interest Expense. With respect to any Person, for any
fiscal period, the aggregate of the interest expense in respect of all
Indebtedness of such Person and its Subsidiaries for such period, on a
consolidated basis, determined in accordance with generally accepted accounting
principles (including amortization of original issue discount on any such
Indebtedness, all non-cash interest payments, the interest portion of any
deferred payment obligation and the interest component of Capitalized Lease
obligations, but excluding amortization of deferred financing fees if such
amortization would otherwise be included in interest expense); provided,
however, that for purposes of the Cash Flow Coverage Ratio, Consolidated
Interest Expense shall be calculated on a Pro Forma Basis and, provided
further, that all premiums, fees and expenses (including the amortization
thereof) payable in connection with the refinancing of any Indebtedness shall
be excluded.
Consolidated Net Income. With respect to any Person, for any fiscal
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with generally
accepted accounting principles, provided that (a) the Net Income of any Person
acquired in a pooling of interests transaction for any period prior to the date
of such acquisition shall be excluded (unless Consolidated Net Income is to be
calculated on a Pro Forma Basis under this Credit Agreement), and (b)
Consolidated Net Income of any Person will not include, without duplication,
any deduction for:
(i) any increased amortization or depreciation resulting from the
write-up of assets pursuant to Accounting Principal Board Opinions
Nos. 16 and 17, as amended or supplemented from time to time,
(ii) the amortization of all intangible assets (including amortization
attributable to inventory write-ups, goodwill, debt and financing
costs, and Incentive Arrangements),
(iii) any non-capitalized transaction costs incurred in connection with
financings or acquisitions (including, but not limited to,
financing and refinancing fees),
(iv) any extraordinary or nonrecurring charges relating to any premium
or penalty paid, write-off or deferred financing costs or other
financial recapitalization charges in connection with redeeming or
retiring any Indebtedness prior to its stated maturity; and
(v) any non-recurring charges arising out of the restructuring or
consolidation of the operations of any entities or businesses
either alone or together with such Person or any Subsidiary of such
Person incurred within 18 months following the acquisition of such
entity or business by such Person or any Subsidiary of such Person;
provided, however, that for purposes of determining the Cash Flow Coverage
Ratio, Consolidated Net Income shall be calculated on a Pro Forma Basis.
Consolidated Net Worth. With respect to any Person means, as of any
date, the consolidated equity of the common stockholders of such Person
(excluding the cumulated foreign currency translation adjustment), all
determined on a consolidated basis in accordance with generally accepted
accounting principles, but without any reduction in respect of the payment of
dividends on any series of such Person's Preferred Stock if such dividends are
paid in additional shares of capital stock; provided, however, that
Consolidated Net Worth shall also include, without duplication:
(a) the amortization of all write-ups of inventory,
(b) the amortization of all intangible assets (including amortization
of goodwill, debt and financing costs, and Incentive Arrangements),
(c) any non-capitalized transaction costs incurred in connection with
financings or acquisitions (including, but not limited to,
financing and refinancing fees),
(d) any increased amortization or depreciation resulting from the
write-up of assets pursuant to Accounting Principles Board Opinion
Nos. 16 and 17, as amended and supplemented from time to time,
(e) any extraordinary or nonrecurring charges or expenses relating to
any premium or penalty paid, write-off or deferred financing costs
or other financial recapitalization charges incurred in connection
with redeeming or retiring any Indebtedness prior to its stated
maturity,
(f) any non-recurring cash charge arising out of the restructuring or
consolidation of the operations of any entity or business either
alone or together with such Person or any Subsidiary of such
Person, incurred within 18 months following the acquisition of such
entity or business by such Person or any Subsidiary of such Person,
and
(g) any extraordinary or non-recurring charge arising out of the
implementation of Statement of Financial Accounting Standards Nos.
106 or 109;
provided, however that for purposes of determining Consolidated Net Worth of
the Parent and its Subsidiaries for purposes of Section 10.3 hereof,
Consolidated Net Worth shall be calculated on a Pro Forma Basis.
Conversion Request. A notice given by the Borrower to the Agent of the
Borrower's election to convert or continue a Revolving Credit Loan in
accordance with Section 2.7 hereof.
Credit Agreement. This Revolving Credit Agreement, including the
Schedules and Exhibits hereto.
Debt Service Coverage Ratio. As at the date of determination and with
respect to any Person, the ratio of (a)(i) the Consolidated Cash Flow of such
Person for the fiscal period ending on such date minus (ii) the aggregate
amount of Capital Expenditures made during such period to (b) the Total Debt
Service of such Person for such fiscal period.
Default. See Section 13.1 hereof.
Delinquent Bank. See Section 15.5.3 hereof.
Distribution. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of a Person, other than
dividends payable solely in shares of common stock of such Person; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of a Person, directly or indirectly through a Subsidiary of such Person
or otherwise; the return of capital by a Person to its shareholders as such; or
any other distribution on or in respect of any shares of any class of capital
stock of a Person.
Dollars or $. Dollars in lawful currency of the United States of
America.
Domestic Lending Office. Initially, the office of each Bank designated
as such in Schedule 1 attached hereto; thereafter, such other office of such
Bank, if any, located within the United States that will be making or
maintaining Base Rate Loans.
Drawdown Date. The date on which any Revolving Credit Loan is made or is
to be made, and the date on which any Revolving Credit Loan is converted or
continued in accordance with Section 2.7 hereof.
Dura-Line. See the definition of Dura-Line Agreements.
Dura-Line Agreements. Collectively, the Agreement, dated as of March 15,
1991 among Dura-Line Corporation ("Dura-Line"), the Parent and J. Roy Shoffner,
the Exchange Agreement, dated as of March 1, 1992, among Dura-Line, John P.
Shoffner ("Shoffner") and Darrell Hale ("Hale"), Stock Appreciation Rights
certificates Nos. 1A and 1B issued by Dura-Line to Shoffner and Stock
Appreciation Rights Certificates Nos. 2A and 2B issued by Dura-Line to Hale,
and the Agreement, dated March 1, 1992, among Dura-Line the Parent, Shoffner
and Hale, each as in effect on the Closing Date.
Eligible Assignee. Any of (a) a commercial bank organized under the laws
of the United States, or any State thereof or the District of Columbia, and
having total assets in excess of $1,000,000,000; (b) a savings and loan
association or savings bank organized under the laws of the United States, or
any State thereof or the District of Columbia, and having a net worth of at
least $100,000,000, calculated in accordance with generally accepted accounting
principles; (c) a commercial bank organized under the laws of any other country
which is a member of the Organization for Economic Cooperation and Development
(the "OECD"), or a political subdivision of any such country, and having total
assets in excess of $1,000,000,000, provided that such bank is acting through a
branch or agency located in the country in which it is organized or another
country which is also a member of the OECD; and (d) the central bank of any
country which is a member of the OECD.
Employee Benefit Plan. Any employee benefit plan within the meaning of
Section 3(3) of ERISA maintained of contributed to by the Borrower or any ERISA
Affiliate, other than a Multiemployer Plan.
Environmental Laws. See Section 7.18(a) hereof.
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Any Person which is treated as a single employer with
the Borrower under Section 414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
Eurocurrency Reserve Rate. For any day with respect to a Eurodollar
Rate Loan, the maximum rate (expressed as a decimal) at which any lender
subject thereto would be required to maintain reserves under Regulation D of
the Board of Governors of the Federal Reserve System (or any successor or
similar regulations relating to such reserve requirements) against
"Eurocurrency Liabilities" (as that term is used in Regulation D), if such
liabilities were outstanding. The Eurocurrency Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in the Eurocurrency
Reserve Rate.
Eurodollar Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or
such other eurodollar interbank market as may be selected by the Agent in its
sole discretion acting in good faith.
Eurodollar Lending Office. Initially, the office of each Bank designated
as such in Schedule 1 attached hereto; thereafter, such other office of such
Bank, if any, that shall be making or maintaining Eurodollar Rate Loans.
Eurodollar Rate. For any Interest Period with respect to a Eurodollar
Rate Loan, the rate of interest equal to (a) the rate per annum (rounded
upwards to the nearest 1/16 of one percent) at which the Reference Bank's
Eurodollar Lending Office is offered Dollar deposits two Eurodollar Business
Days prior to the beginning of such Interest Period in the interbank eurodollar
market where the eurodollar and foreign currency and exchange operations of
such Eurodollar Lending Office are customarily conducted, for delivery on the
first day of such Interest Period for the number of days comprised therein and
in an amount comparable to the amount of the Eurodollar Rate Loan of the
Reference Bank to which such Interest Period applies, divided by (b) a number
equal to 1.00 minus the Eurocurrency Reserve Rate, if applicable.
Eurodollar Rate Loans. Revolving Credit Loans bearing interest
calculated by reference to the Eurodollar Rate.
Event of Default. See Section 13.1 hereof.
Fee Letter. That certain letter agreement, dated as of the Closing Date,
between the Borrower and the Agent.
FNBB. The First National Bank of Boston, a national banking association,
in its individual capacity.
generally accepted accounting principles. (a) When used in Section 10
hereof, whether directly or indirectly through reference to a capitalized term
used therein, means (i) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect on July 15, 1993, and (ii) to the extent consistent
with such principles, the accounting practice of the Parent reflected in its
financial statements for the fiscal period including July 15, 1993, and (b)
when used in general, other than as provided above, means principles that are
(i) consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, as in effect from time to
time, and (ii) consistently applied with past financial statements of the
Parent adopting the same principles, provided that in each case referred to in
this definition of "generally accepted accounting principles" a certified
public accountant would, insofar as the use of such accounting principles is
pertinent, be in a position to deliver an unqualified opinion (other than a
qualification regarding changes in generally accepted accounting principles) as
to financial statements in which such principles have been properly applied.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the Parent,
the Borrower or any ERISA Affiliate the benefits of which are guaranteed on
termination in full or in part by the PBGC pursuant to Title IV of ERISA, other
than a Multiemployer Plan.
Guaranties. Collectively, the Subsidiary Guaranty, the Non-Wholly-Owned
Subsidiary Guaranty and the Parent Guaranty.
Guarantors. Collectively, all of and, individually, each of the
Wholly-Owned Guarantors and the Non-Wholly-Owned Guarantors.
Hale. See the definition of Dura-Line Agreements.
Hazardous Substances. See Section 7.18(b) hereof.
Incentive Arrangements. With respect to any Person, any earn-out
agreements, stock appreciation rights, including the Stock Appreciation Rights
Agreements, "phantom" stock plans, non-competition agreements, subscription and
stockholders agreements and other incentive and bonus plans and similar
arrangements made in connection with the acquisition of entities or businesses
by such Person or any of its Subsidiaries or the retention of executives,
officers or employees by such Person or any of its Subsidiaries.
Indebtedness. All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be classified
upon the obligor's balance sheet as liabilities, or to which reference should
be made by footnotes thereto, including in any event and whether or not so
classified: (a) all debt and similar monetary obligations, whether direct or
indirect; (b) all liabilities secured by any mortgage, pledge, security
interest, lien, charge or other encumbrance existing on property owned or
acquired subject thereto, whether or not the liability secured thereby shall
have been assumed; and (c) all guarantees, endorsements and other contingent
obligations whether direct or indirect in respect of indebtedness of others,
including any obligation to supply funds to or in any manner to invest in,
directly or indirectly, the debtor, to purchase indebtedness, or to assure the
owner of indebtedness against loss, through an agreement to purchase goods,
supplies, or services for the purpose of enabling the debtor to make payment of
the indebtedness held by such owner or otherwise, and the obligations to
reimburse the issuer in respect of any letters of credit.
Intercompany Advances. See the definition of Maximum Liability.
Intercompany Loan Agreement. The several Line Letters, dated as of June
29, 1994, from the Borrower to certain of its domestic Subsidiaries, and all
instruments delivered in connection therewith, in form and substance
satisfactory to the Agent
Interest Payment Date. (a) As to any Base Rate Loan, the last day of the
calendar quarter which includes the Drawdown Date thereof, and (b) as to any
Eurodollar Rate Loan in respect of which the Interest Period is (i) 3 months or
less, the last day of such Interest Period and (ii) more than 3 months, the
date that is 3 months from the first day of such Interest Period, the last day
of each 3 month period thereafter and, in addition, the last day of such
Interest Period.
Interest Period. With respect to each Revolving Credit Loan, (a)
initially, the period commencing on the Drawdown Date of such Revolving Credit
Loan and ending on the last day of one of the periods set forth below, as
selected by the Borrower in a Loan Request (i) for any Base Rate Loan, the last
day of the calendar quarter; and (ii) except as provided below, for any
Eurodollar Rate Loan, 1, 2, 3, 6, 9 or 12 months; and (b) thereafter, each
period commencing on the last day of the next preceding Interest Period
applicable to such Revolving Credit Loan and ending on the last day of one of
the periods set forth above, as selected by the Borrower in a Conversion
Request; provided that during the period commencing on the Closing Date through
the date which occurs sixty (60) days after the Closing Date, the Borrower may
not select an Interest Period longer than one (1) month with respect to
Eurodollar Rate Loans, and provided further that all of the foregoing
provisions relating to Interest Periods are subject to the following:
(A) if any Interest Period with respect to a Eurodollar Rate Loan
would otherwise end on a day that is not a Eurodollar Business Day, that
Interest Period shall be extended to the next succeeding Eurodollar
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Eurodollar Business Day;
(B) if any Interest Period with respect to a Base Rate Loan would
end on a day that is not a Business Day, that Interest Period shall end
on the next succeeding Business Day;
(C) if the Borrower shall fail to give notice as provided in
Section 2.7 hereof, the Borrower shall be deemed to have requested a
conversion of the affected Eurodollar Rate Loan to a Base Rate Loan and
the continuance of all Base Rate Loans as Base Rate Loans on the last day
of the then current Interest Period with respect thereto;
(D) any Interest Period relating to any Eurodollar Rate Loan that
begins on the last Eurodollar Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last
Eurodollar Business Day of a calendar month; and
(E) any Interest Period that would otherwise extend beyond the
Revolving Credit Loan Maturity Date shall end on the Revolving Credit
Loan Maturity Date.
Investments. All expenditures made (other than Capital
Expenditures) and all liabilities incurred (contingently or otherwise) for the
acquisition of stock or Indebtedness of, or for loans, advances, capital
contributions or transfers of property to, or in respect of any guaranties (or
other commitments as described under Indebtedness), or obligations of, any
Person. In determining the aggregate amount of Investments outstanding at any
particular time: (a) the amount of any Investment represented by a guaranty
shall be taken at not less than the principal amount of the obligations
guaranteed and still outstanding; (b) there shall be included as an Investment
all interest accrued with respect to Indebtedness constituting an Investment
unless and until such interest is paid; (c) there shall be deducted in respect
of each such Investment any amount received as a return of capital (but only by
repurchase, sale, redemption, retirement, repayment, liquidating dividend or
liquidating distribution); (d) there shall not be deducted in respect of any
Investment any amounts received as earnings on such Investment, whether as
dividends, interest or otherwise, except that accrued interest included as
provided in the foregoing clause (b) may be deducted when paid; and (e) there
shall not be deducted from the aggregate amount of Investments any decrease in
the value thereof.
Jordan Group. (a) The Jordan Company, Jordan/Zalaznick Capital Company,
Mezzanine Capital & Income Trust 2001 PLC, and their respective Affiliates
(including Leucadia Investors, Inc.); (b) partners, principals, directors,
officers, employees and agents of the Persons referred to in clause (a) hereof;
(c) The John W. Jordan II Revocable Trust, The Jordan Family Trust and/or any
other trusts established by John W. Jordan II; (d) any other trust established
by the Persons referred to in clause (b) hereof; and (e) any corporation,
partnership or other entity controlled by, or which is an Affiliate of, the
Persons referred to in clauses (a), (b), (c) and (d) hereof.
Letter of Credit. See Section 4.1.1 hereof.
Letter of Credit Application. See Section 4.1.1 hereof.
Letter of Credit Fee. See Section 4.6 hereof.
Letter of Credit Participation. See Section 4.1.4 hereof.
Loan Documents. This Credit Agreement, the Notes, the Letter of Credit
Applications, the Letters of Credit, the Fee Letter and the Security Documents.
Loan Request. See Section 2.6 hereof.
Majority Banks. As of any date, (a) if there are no more than two Banks
on such date, both Banks, and (b) if there are more than two Banks on such
date, the Banks holding at least 66-2/3% of the outstanding principal amount
of the Notes on such date or, if no such principal is outstanding, the Banks
whose aggregate Commitment Amounts constitute at least 66-2/3% of the Total
Commitment.
Management Agreement(s). The several Amended and Restated Management
Consulting Agreements among each of the Borrower's Subsidiaries, the Borrower
and the Parent in the forms delivered to the Banks and the Agent on or prior to
the Closing Date.
Maximum Drawing Amount. The maximum aggregate amount that the
beneficiaries may at any time draw under all outstanding Letters of Credit, as
such aggregate amount may be reduced from time to time pursuant to the terms of
the Letters of Credit.
Maximum Liability. As to each Non-Wholly-Owned Guarantor shall be an
amount equal to the principal amount of advances made by the Borrower to such
Non-Wholly-Owned Guarantor under the Intercompany Loan Agreement ("Intercompany
Advances").
Multiemployer Plan. Any multiemployer plan within the meaning of Section
3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.
Net Proceeds. The aggregate amount of cash or readily marketable cash
equivalents received by the Borrower or any of its Subsidiaries resulting from
the sale or other disposition of any assets or group of assets (other than
inventory sold in the ordinary course of business), whether in one transaction
or a series of related transactions, net of reasonable closing costs and
out-of-pocket expenses and the costs of any taxes, reserves (including reserves
for reasonable, anticipated post-closing adjustments, provided, that upon
resolution of such adjustments, any remaining reserved amount shall constitute
Net Proceeds) or required payments in respect of any permitted Indebtedness or
leases associated with such sale, and reasonable relocation expenses and
reasonable severance and shutdown costs incurred directly as a result of such
sale.
Non-Affected Bank(s). As at any date of determination, those Banks which
are not Affected Banks.
Non-Wholly-Owned Guarantor(s). Collectively, all of, and, individually
each of, the non-wholly owned Subsidiaries of the Borrower listed on Schedule
7.19 attached hereto, provided that each such Person shall constitute a
Non-Wholly-Owned Guarantor hereunder only while the Borrower does not own,
either directly or indirectly, 100% of issued and outstanding capital stock of
such Person.
Non-Wholly-Owned Subsidiary Guaranty. The Guaranty, dated or to be dated
on or prior to the Closing Date, made by each of the Non-Wholly-Owned
Guarantors in favor of the Banks and the Agent pursuant to which each
Non-Wholly-Owned Guarantor guaranties to the Banks and the Agent the payment
and performance of the Obligations, substantially in the form of Exhibit B
attached hereto.
Note Record. A Record with respect to a Note.
Notes. See Section 2.4 hereof.
Obligations. All indebtedness, obligations and liabilities of any of the
Borrower and its Subsidiaries to any of the Banks and the Agent, individually
or collectively, existing on the date of this Credit Agreement or arising
thereafter, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise, arising or incurred (a) under this
Credit Agreement or any of the other Loan Documents or in respect of any of the
Loans made or Reimbursement Obligations incurred or any of the Notes, Letter of
Credit Application, Letter of Credit or other instruments at any time
evidencing any thereof, or (b) in respect of interest rate protection
arrangements between the Borrower or any of its Subsidiaries and any Bank.
outstanding. With respect to the Revolving Credit Loans, the aggregate
unpaid principal thereof as of any date of determination.
Parent. Jordan Industries, Inc., an Illinois corporation.
Parent Guaranty. The Guaranty, dated or to be dated on or prior to the
Closing Date, made by the Parent in favor of the Banks and the Agent pursuant
to which the Parent guaranties to the Banks and the Agent the payment and
performance of the Obligations, substantially in the form of Exhibit C attached
hereto.
Parent Loan Agreement. The Line Letter, dated as of June 29, 1994, from
the Parent to the Borrower, and all instruments delivered in connection
therewith, in form and substance satisfactory to the Agent.
Parent Phantom Share Plan. The Jordan Industries, Inc. Phantom Share
Plan dated as of December 11, 1989, and related grants of up to 1,000,000 Units
(as defined therein) thereunder.
PBGC. The Pension Benefit Guaranty Corporation created by Section 4002
of ERISA and any successor entity or entities having similar responsibilities.
Permitted Liens. Liens, security interests and other encumbrances
permitted by Section 9.2 hereof.
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Preferred Stock. As applied to the capital stock of any Person, means
the capital stock of any class or classes (however designated) that is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of capital stock of any other class of such Person.
Pro Forma Basis. (a) For the purposes of determining the Cash Flow
Coverage Ratio, (i) Consolidated Net Income shall be calculated on a pro forma
basis as if all businesses acquired during the relevant period had been
acquired on the first day of such period, and (ii) Consolidated Interest
Expense shall be calculated on a pro forma basis as if all Indebtedness
created, incurred, issued or assumed during the relevant period in connection
with any acquisition referred to in clause (i) above had been created,
incurred, issued or assumed on the first day of such period; and in making such
pro forma calculation, interest on any such Indebtedness at a variable rate
shall be calculated using the rate in effect at time the calculation is made,
and (b) for purposes of determining the Consolidated Net Worth of the Parent
and its Subsidiaries for purpose of Section 10.3 hereof, the Consolidated Net
Worth of the Parent and its Subsidiaries shall be calculated on a pro forma
basis as if all businesses acquired during the relevant period had been
acquired on the first day of such period.
Rate Adjustment Period. See the definition of Applicable Margin.
Real Estate. All real property at any time owned or leased (as lessee or
sublessee) by the Parent, Borrower or any of the Borrower's Subsidiaries.
Record. The grid attached to a Note, or the continuation of such grid,
or any other similar record, including computer records, maintained by any Bank
with respect to any Revolving Credit Loan referred to in such Note.
Reference Bank. FNBB.
Register. See Section 19.3 hereof.
Reimbursement Obligation. The Borrower's obligation to reimburse the
Agent and the Banks on account of any drawing under any Letter of Credit as
provided in Section 4.2 hereof.
Revolving Credit Loan Maturity Date. June 30, 1999.
Revolving Credit Loans. Revolving credit loans made or to be made by the
Banks to the Borrower pursuant to Section 2 hereof.
Shoffner. See the definition of Dura-Line Agreements.
Security Agreement. The Security and Pledge Agreement, dated or to be
dated on or prior to the Closing Date, among the Borrower, each of the
Guarantors and the Agent, substantially in the form of Exhibit D attached
hereto.
Security Documents. The Guaranties, the Security Agreement, all
Guaranties and Security Agreements delivered to the Agent and the Banks after
the Closing Date pursuant to Section 8.13 hereof, and the Collateral Assignment
of Intercompany Agreements.
Senior Debt. As at any date of determination, with respect to the
Borrower and its Subsidiaries, (a) for purposes of calculating Senior Debt for
Section Section 9.1(o) and 9.3(o) hereof, an amount equal to the sum of (i)
Indebtedness relating to the borrowing of money, plus (ii) Indebtedness in
respect of Capitalized Leases, plus (iii) all obligations in respect of
guaranties to the extent that such obligations are not included in sub-clauses
(i) and (ii) of this clause (a), of the Borrower and its Subsidiaries, and (b)
for purposes of calculating Senior Debt for Section 2.3(b) hereof, an amount
equal to the sum of (i) Indebtedness of the Borrower and its Subsidiaries
relating to the borrowing of money, other than Indebtedness in respect of
Revolving Credit Loans, plus (ii) Indebtedness of the Borrower and its
Subsidiaries in respect of Capitalized Leases, plus (iii) all obligations of
the Borrower and its Subsidiaries in respect of guaranties to the extent that
such obligations are not included under sub-clauses (i) and (ii) of this clause
(b), plus (iv) the Total Commitment in effect on such date without regard to
any reductions in the Total Commitment pursuant to Section 2.3(b) hereof.
Senior Debt to Consolidated Cash Flow Ratio. As of any date of
determination, with respect to the Borrower and its Subsidiaries of which the
Borrower owns, directly or indirectly, on and as of the relevant date of
determination, and after giving effect to any proposed disposition, at least
51% of the outstanding common stock of every class (each, a "51% Subsidiary"),
the ratio of (a) the aggregate amount of Senior Debt of the Borrower and its
Subsidiaries, excluding any such Indebtedness which is, by its terms,
subordinated in right of payment to the Obligations on terms satisfactory to
the Banks, outstanding on such date of determination to (b) the Consolidated
Cash Flow of the Borrower and its 51% Subsidiaries for the period of the four
fiscal quarters most recently ended prior to such date of determination.
Senior Indenture. That certain Indenture, dated as of July 15, 1993,
between the Parent and First Trust National Association, as Trustee, pursuant
to which Senior Notes in an original aggregate principal amount of $275,000,000
were issued by the Parent, as such agreement may be amended and in effect from
time to time in accordance with the terms of this Credit Agreement and the
other Loan Documents.
Senior Notes. The 10-3/8% Senior Notes due 2003 issued by the Parent
pursuant to the Senior Indenture.
Stock Appreciation Rights Agreements. Collectively, (a) the Stock
Appreciation Rights Agreement, dated as of January 1, 1988, among the Parent,
The Imperial Electric Company, and Frank Collins, (b) the Stock Appreciation
Rights Agreement, dated as of May 18, 1989, between AIM Electronics Corporation
and Irwin Seaman, and (c) the Stock Appreciation Rights Agreements, dated as of
April 28, 1989, between Hudson Lock, Inc. and each of James E. Boucher and
Michael L. Colecchi, in each case as amended and in effect on the Closing Date.
Subordinated Debentures. The 11-3/4% Senior Subordinated Discount
Debentures due 2005 issued by the Parent pursuant to the Subordinated
Indenture.
Subordinated Indenture. That certain Indenture, dated as of July 15,
1993, between the Parent and First Trust National Association, as Trustee,
pursuant to which Subordinated Debentures in the original aggregate principal
amount of $133,075,293 were issued by the Parent, as such agreement may be
amended and in effect from time to time in accordance with the terms of this
Credit Agreement and the other Loan Documents.
Subsidiary. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.
Subsidiary Guaranty. The Guaranty, dated or to be dated on or prior to
the Closing Date, made by each Wholly-Owned Guarantor in favor of the Banks and
the Agent pursuant to which each Wholly-Owned Guarantor guaranties to the Banks
and the Agent the payment and performance of the Obligations, substantially in
form of Exhibit E attached hereto.
Tax Sharing Agreement(s). The Tax Sharing Agreement, dated as of June
29, 1994, by and among the Parent, the Borrower and each of the Subsidiaries of
the Parent listed on the signature pages thereto, in the form delivered to the
Banks and the Agent on or prior to the Closing Date.
Total Commitment. The sum of the Commitment Amounts of the Banks, as in
effect from time to time.
Total Debt Service. For any period, with respect to any Person, the
Consolidated Financial Obligations of such Person plus the Consolidated
Interest Expense of such Person paid in cash in that period, plus, if
applicable, cash payments made by such Person in that period pursuant to
noncompetition arrangements and in connection with the redemption of Preferred
Stock, in each case pursuant to the Dura-Line Agreements.
Type. As to any Revolving Credit Loan, its nature as a Base Rate Loan or
a Eurodollar Rate Loan.
Uniform Customs. With respect to any Letter of Credit, the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500 or any successor version thereto
adopted by the Agent in the ordinary course of its business as a letter of
credit issuer and in effect at the time of issuance of such Letter of Credit.
Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which
the Borrower does not reimburse the Agent and the Banks on the date specified
in, and in accordance with, Section 4.2 hereof.
Voting Stock. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of the directors (or persons performing
similar functions) of the corporation, association, trust or other business
entity involved, whether or not the right so to vote exists by reason of the
happening of a contingency.
Welcome Home. See Section 8.13(d) hereof.
Wholly-Owned Guarantor(s). Collectively, all of, and individually, each
of, the Subsidiaries of the Borrower that are not Non-Wholly-Owned Guarantors.
Section 1.2. Rules of Interpretation.
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to time in
accordance with its terms and the terms of this Credit Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification
to such law.
(d) A reference to any Person includes its permitted successors
and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting principles applied
on a consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, have the
meanings assigned to them therein, with the term "instrument" being that
defined under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular "Section " refers to that section
of this Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Credit Agreement as a whole and not to any
particular section or subdivision of this Credit Agreement.
Section 2. THE REVOLVING CREDIT FACILITY.
Section 2.1. Commitment to Lend. Subject to the terms and conditions
set forth in this Credit Agreement, each of the Banks severally agrees to lend
to the Borrower and the Borrower may borrow, repay, and reborrow from time to
time between the Closing Date and the Revolving Credit Loan Maturity Date upon
notice by the Borrower to the Agent given in accordance with Section 2.6
hereof, such sums as are requested by the Borrower up to a maximum aggregate
amount outstanding (after giving effect to all amounts requested) at any one
time equal to such Bank's Commitment Amount minus such Bank's Commitment
Percentage of the sum of the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations, provided that the sum of the outstanding amount of
the Revolving Credit Loans (after giving effect to all amounts requested) plus
the Maximum Drawing Amount and all Unpaid Reimbursement Obligations shall not
at any time exceed the Total Commitment. The Revolving Credit Loans shall be
made pro rata in accordance with each Bank's Commitment Percentage. Each
request for a Revolving Credit Loan hereunder shall constitute a representation
and warranty by the Borrower that the conditions set forth in Section Section
11 and 12 hereof, in the case of the initial Revolving Credit Loans to be made
on the Closing Date, and Section 12 hereof, in the case of all other Revolving
Credit Loans, have been satisfied on the date of such request.
Section 2.2. Commitment Fee. The Borrower agrees to pay to the Agent
for the accounts of the Banks in accordance with their respective Commitment
Percentages a commitment fee (the "Commitment Fee") calculated at the rate of
3/8% per annum on the average daily amount during each calendar quarter or
portion thereof from the Closing Date to the Revolving Credit Loan Maturity
Date by which the Total Commitment minus the sum of the Maximum Drawing Amount
and all Unpaid Reimbursement Obligations exceeds the outstanding amount of
Revolving Credit Loans during such calendar quarter. The Commitment Fee shall
be payable quarterly in arrears on the last day of each calendar quarter for
the immediately preceding calendar quarter commencing on the first such date
following the Closing Date, with a final payment on the Revolving Credit Loan
Maturity Date or any earlier date on which the Commitments shall terminate.
Section 2.3. Reduction of Total Commitment. (a) The Borrower shall have
the right at any time and from time to time upon three (3) Business Days' prior
written notice to the Agent to reduce by $500,000 or an integral multiple of
$100,000 in excess thereof the unborrowed portion of the Total Commitment or
terminate entirely the Commitments, whereupon the Commitment Amounts of the
Banks shall be reduced pro rata in accordance with their respective Commitment
Percentages of the amount specified in such notice or, as the case may be, the
Commitments of the Banks shall be terminated. Promptly after receiving any
notice of the Borrower delivered pursuant to this Section 2.3, the Agent will
notify the Banks of the substance thereof. Upon the effective date of any such
reduction or termination, the Borrower shall pay to the Agent for the
respective accounts of the Banks the full amount of any Commitment Fee then
accrued on the amount of the reduction. No reduction of the Total Commitment
or termination of the Commitments may be reinstated.
(b) If at any time after the Closing Date the Borrower or any of its
Subsidiaries receives Net Proceeds pursuant to Section 9.5.2(f) hereof in
excess of $5,000,000, the Borrower shall immediately repay the outstanding
Revolving Credit Loans in an amount equal to 100% of such Net Proceeds, and, if
the Senior Debt to Consolidated Cash Flow Ratio equals or exceeds 3.50 to 1 (as
reflected in a certificate of the Borrower delivered to the Agent on the date
such Net Proceeds are received), the Total Commitment shall be automatically
reduced upon such receipt by an aggregate amount equal to 75% of such Net
Proceeds. Any such reduction of the Total Commitment pursuant to this Section
2.3(b) shall be reinstated on the first day of the month immediately following
the month in which a Compliance Certificate is delivered by the Borrower which
reflects that the Senior Debt to Consolidated Cash Flow Ratio is less than 3.50
to 1 as at such date of determination, provided that no Default or Event of
Default shall have occurred and be continuing.
Section 2.4. The Revolving Credit Notes. The Revolving Credit Loans
shall be evidenced by separate promissory notes of the Borrower in
substantially the form of Exhibit A attached hereto (each a "Note"), dated as
of the Closing Date and completed with appropriate insertions. One Note shall
be payable to the order of each Bank in a principal amount equal to such Bank's
Commitment Amount or, if less, the outstanding amount of all Revolving Credit
Loans made by such Bank, plus interest accrued thereon, as set forth below.
The Borrower irrevocably authorizes each Bank to make or cause to be made, at
or about the time of the Drawdown Date of any Revolving Credit Loan or at the
time of receipt of any payment of principal on such Bank's Note, an appropriate
notation on such Bank's Note Record reflecting the making of such Revolving
Credit Loan or (as the case may be) the receipt of such payment. The
outstanding amount of the Revolving Credit Loans set forth on such Bank's Note
Record shall be prima facie evidence of the principal amount thereof owing and
unpaid to such Bank, but the failure to record, or any error in so recording,
any such amount on such Bank's Note Record shall not limit or otherwise affect
the obligations of the Borrower hereunder or under any Note to make payments of
principal of or interest on any Note when due.
Section 2.5. Interest on Revolving Credit Loans. (a) Except as
otherwise provided in Section 5.11 hereof,
(i) each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of the
Interest Period with respect thereto at the rate per annum equal to the Base
Rate plus the Applicable Margin; and
(ii) each Eurodollar Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of the
Interest Period with respect thereto at the rate per annum equal to the
Eurodollar Rate determined for such Interest Period plus the Applicable Margin.
(b) The Borrower promises to pay interest on each Revolving
Credit Loan in arrears on each Interest Payment Date with respect thereto.
Section 2.6. Requests for Revolving Credit Loans. The Borrower shall
give to the Agent written notice in the form of Exhibit F attached hereto (or
telephonic notice confirmed in a writing in the form of Exhibit F attached
hereto) of each Revolving Credit Loan requested hereunder (a "Loan Request") no
later than 1:00 p.m. (Boston time) (a) one (1) Business Day prior to the
proposed Drawdown Date of any Base Rate Loan and (b) three (3) Eurodollar
Business Days prior to the proposed Drawdown Date of any Eurodollar Rate Loan.
Each such notice shall specify (i) the principal amount of the Revolving Credit
Loan requested, (ii) the proposed Drawdown Date of such Revolving Credit Loan,
(iii) the Interest Period for such Revolving Credit Loan, and (iv) the Type of
such Revolving Credit Loan. Promptly upon receipt of any such notice, the
Agent shall notify each of the Banks thereof. Each Loan Request shall be
irrevocable and binding on the Borrower and shall obligate the Borrower to
accept the Revolving Credit Loan requested from the Banks on the proposed
Drawdown Date. Each Loan Request shall be in a minimum aggregate amount of
$500,000 or a larger integral multiple of $100,000.
Section 2.7. Conversion Options.
Section 2.7.1. Conversion to Different Type of Revolving Credit
Loan. The Borrower may elect from time to time to convert any outstanding
Revolving Credit Loan to a Revolving Credit Loan of another Type, provided that
(a) with respect to any such conversion of a Eurodollar Rate Loan to a Base
Rate Loan, the Borrower shall give the Agent at least one (1) Business Day
prior written notice of such election; (b) with respect to any such conversion
of a Base Rate Loan to a Eurodollar Rate Loan, the Borrower shall give the
Agent at least three (3) Eurodollar Business Days' prior written notice of such
election; (c) with respect to any such conversion of a Eurodollar Rate Loan
into a Base Rate Loan, such conversion shall only be made on the last day of
the Interest Period with respect thereto; (d) no Revolving Credit Loan may be
converted into a Eurodollar Rate Loan when any Default or Event of Default
under either Section 13(a) or Section 13(b) hereof or resulting from the
Borrower's failure to comply with any of the covenants set forth in Section 10
hereof has occurred and is continuing, and (e) no more than eight (8)
Eurodollar Rate Loans having different Interest Periods may be outstanding at
any time. On the date on which such conversion is being made each Bank shall
take such action as is necessary to transfer its Commitment Percentage of such
Revolving Credit Loans to its Domestic Lending Office or its Eurodollar Lending
Office, as the case may be. All or any part of outstanding Revolving Credit
Loans of any Type may be converted into a Revolving Credit Loan of another Type
as provided herein, provided that any partial conversion shall be in an
aggregate principal amount of $500,000 or a larger integral multiple of
$100,000 in excess thereof. Each Conversion Request relating to the conversion
of a Base Rate Loan to a Eurodollar Rate Loan shall be irrevocable by the
Borrower.
Section 2.7.2. Continuation of Type of Revolving Credit Loan. Any
Revolving Credit Loan of any Type may be continued as a Revolving Credit Loan
of the same Type upon the expiration of an Interest Period with respect thereto
by compliance by the Borrower with the notice provisions contained in Section
2.7.1 hereof; provided that no Eurodollar Rate Loan may be continued as such
when any Default or Event of Default has occurred and is continuing, but shall
be automatically converted to a Base Rate Loan on the last day of the first
Interest Period relating thereto ending during the continuance of any Default
or Event of Default of which officers of the Agent active upon the Borrower's
account have actual knowledge. In the event that the Borrower fails to provide
any such notice with respect to the continuation of any Eurodollar Rate Loan as
such, then such Eurodollar Rate Loan shall be automatically converted to a Base
Rate Loan on the last day of the first Interest Period relating thereto. The
Agent shall notify the Banks promptly when any such automatic conversion
contemplated by this Section 2.7.2 is scheduled to occur.
Section 2.7.3. Eurodollar Rate Loans. Any conversion to or from
Eurodollar Rate Loans shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of all Eurodollar Rate Loans having the same Interest Period shall not be less
than $500,000 or a larger integral multiple of $100,000 in excess thereof.
Section 2.8. Funds for Revolving Credit Loans.
Section 2.8.1. Funding Procedures. Not later than 1:00 p.m.
(Boston time) on the proposed Drawdown Date of any Revolving Credit Loans, each
of the Banks will make available to the Agent, at the Agent's Head Office, in
immediately available funds, the amount of such Bank's Commitment Percentage of
the amount of the requested Revolving Credit Loans. Upon receipt from each
Bank of such amount, and upon receipt of the documents required by Section
Section 11 and 12 hereof and the satisfaction of the other conditions set forth
therein, to the extent applicable, the Agent will make available to the
Borrower the aggregate amount of such Revolving Credit Loans made available to
the Agent by the Banks. The failure or refusal of any Bank to make available
to the Agent at the aforesaid time and place on any Drawdown Date the amount of
its Commitment Percentage of the requested Revolving Credit Loans shall not
relieve any other Bank from its several obligation hereunder to make available
to the Agent the amount of such other Bank's Commitment Percentage of any
requested Revolving Credit Loans.
Section 2.8.2. Advances by Agent. The Agent may, unless notified
to the contrary by any Bank prior to a Drawdown Date, assume that such Bank has
made available to the Agent on such Drawdown Date the amount of such Bank's
Commitment Percentage of the Revolving Credit Loans to be made on such Drawdown
Date, and the Agent may (but it shall not be required to), in reliance upon
such assumption, make available to the Borrower a corresponding amount. If any
Bank makes available to the Agent such amount on a date after such Drawdown
Date, such Bank shall pay to the Agent on demand an amount equal to the product
of (a) the average computed for the period referred to in clause (c) below, of
the weighted average interest rate paid by the Agent for federal funds acquired
by the Agent during each day included in such period, times (b) the amount of
such Bank's Commitment Percentage of such Revolving Credit Loans, times (c) a
fraction, the numerator of which is the number of days that elapse from and
including such Drawdown Date to the date on which the amount of such Bank's
Commitment Percentage of such Revolving Credit Loans shall become immediately
available to the Agent, and the denominator of which is 365. A statement of
the Agent submitted to such Bank with respect to any amounts owing under this
paragraph shall be prima facie evidence of the amount due and owing to the
Agent by such Bank. If the amount of such Bank's Commitment Percentage of such
Revolving Credit Loans is not made available to the Agent by such Bank within
three (3) Business Days following such Drawdown Date, the Agent shall be
entitled to recover such amount from the Borrower on demand, with interest
thereon at the rate per annum applicable to the Revolving Credit Loans made on
such Drawdown Date.
Section 3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
Section 3.1. Maturity. The Borrower promises to pay on the Revolving
Credit Loan Maturity Date, and there shall become absolutely due and payable on
the Revolving Credit Loan Maturity Date, all of the Revolving Credit Loans
outstanding on such date, together with any and all accrued and unpaid interest
thereon.
Section 3.2. Mandatory Repayments of Revolving Credit Loans. If at any
time the sum of the outstanding amount of the Revolving Credit Loans plus the
Maximum Drawing Amount plus all Unpaid Reimbursement Obligations exceeds the
Total Commitment, then the Borrower shall immediately pay the amount of such
excess to the Agent for the respective accounts of the Banks for application:
first, to any Unpaid Reimbursement Obligations; second, to the Revolving Credit
Loans; and third, to provide to the Agent cash collateral for Reimbursement
Obligations as contemplated by Section 4.2(b) and (c) hereof. Each payment of
any Unpaid Reimbursement Obligations or prepayment of Revolving Credit Loans
shall be allocated among the Banks, in proportion, as nearly as practicable, to
each Reimbursement Obligation or (as the case may be) the respective unpaid
principal amount of each Bank's Note, with adjustments to the extent
practicable to equalize any prior payments or repayments not exactly in
proportion.
Section 3.3. Optional Repayments of Revolving Credit Loans. The
Borrower shall have the right, at its election, to repay the outstanding amount
of the Revolving Credit Loans, as a whole or in part, at any time without
penalty or premium, provided that any full or partial prepayment of the
outstanding amount of any Eurodollar Rate Loans pursuant to this Section 3.3
may be made only on the last day of the Interest Period relating thereto. The
Borrower shall give the Agent, no later than 11:00 a.m., Boston time, at least
one (1) Business Day prior written notice of any proposed prepayment pursuant
to this Section 3.3 of Base Rate Loans and three (3) Eurodollar Business Days'
notice of any proposed prepayment pursuant to this Section 3.3 of Eurodollar
Rate Loans, in each case specifying the proposed date of prepayment of
Revolving Credit Loans and the principal amount to be prepaid. Each such
partial prepayment of the Revolving Credit Loans shall be in an integral
multiple of $100,000, shall be accompanied by the payment of accrued interest
on the principal prepaid to the date of prepayment and shall be applied, in the
absence of instruction by the Borrower, first to the principal of Base Rate
Loans and then to the principal of Eurodollar Rate Loans. Each partial
prepayment shall be allocated among the Banks, in proportion, as nearly as
practicable, to the respective unpaid principal amount of each Bank's Note,
with adjustments to the extent practicable to equalize any prior repayments not
exactly in proportion.
Section 4. LETTERS OF CREDIT.
Section 4.1. Letter of Credit Commitments.
Section 4.1.1. Commitment to Issue Letters of Credit. Subject to
the terms and conditions hereof and the execution and delivery by the Borrower
of a letter of credit application on the Agent's customary form (a "Letter of
Credit Application"), the Agent on behalf of the Banks and in reliance upon the
agreement of the Banks set forth in Section 4.1.4 hereof and upon the
representations and warranties of the Borrower contained herein, agrees, in its
individual capacity, to issue, extend and renew for the account of the Borrower
one or more standby or documentary letters of credit (individually, a "Letter
of Credit"), in such form as may be requested from time to time by the Borrower
and agreed to by the Agent; provided, however, that, after giving effect to
such request, (a) the sum of the aggregate Maximum Drawing Amount plus all
Unpaid Reimbursement Obligations shall not exceed $5,000,000 at any time and
(b) the sum of (i) the Maximum Drawing Amount plus (ii) all Unpaid
Reimbursement Obligations plus (iii) the aggregate amount of all Revolving
Credit Loans outstanding shall not exceed the Total Commitment at any time.
Section 4.1.2. Letter of Credit Applications. Each Letter of
Credit Application shall be completed to the satisfaction of the Agent. In the
event that any provision of any Letter of Credit Application shall be
inconsistent with any provision of this Credit Agreement, then the provisions
of this Credit Agreement shall, to the extent of any such inconsistency,
govern.
Section 4.1.3. Terms of Letters of Credit. Each Letter of Credit
issued, extended or renewed hereunder shall, among other things, (a) provide
for the payment of sight drafts for honor thereunder when presented in
accordance with the terms thereof and when accompanied by the documents
described therein, and (b) have an expiry date no later than the date which is
fourteen (14) days (or, if the beneficiary is located outside of the United
States of America, forty-five (45) days) prior to the Revolving Credit Loan
Maturity Date. Each Letter of Credit so issued, extended or renewed shall be
subject to the Uniform Customs.
Section 4.1.4. Reimbursement Obligations of Banks. Each Bank
severally agrees that it shall be absolutely liable, without regard to the
occurrence of any Default or Event of Default or any other condition precedent
whatsoever, to the extent of such Bank's Commitment Percentage, to reimburse
the Agent on demand for the amount of each draft paid by the Agent under each
Letter of Credit to the extent that such amount is not reimbursed by the
Borrower pursuant to Section 4.2 hereof (such agreement for a Bank being called
herein the "Letter of Credit Participation" of such Bank).
Section 4.1.5. Participations of Banks. Each such payment made by
a Bank shall be treated as the purchase by such Bank of a participating
interest in the Borrower's Reimbursement Obligation under Section 4.2 hereof in
an amount equal to such payment. Each Bank shall share in accordance with its
participating interest in any interest which accrues pursuant to Section 4.2
hereof.
Section 4.2. Reimbursement Obligation of the Borrower. In order to
induce the Agent to issue, extend and renew each Letter of Credit and the Banks
to participate therein, the Borrower hereby agrees to reimburse or pay to the
Agent, for the account of the Agent or (as the case may be) the Banks, with
respect to each Letter of Credit issued, extended or renewed by the Agent
hereunder,
(a) except as otherwise expressly provided in Section 4.2(b) and
(c) hereof, on each date that any draft presented under such Letter of Credit
is honored by the Agent, or the Agent otherwise makes a payment with respect
thereto, (i) the amount paid by the Agent under or with respect to such Letter
of Credit, and (ii) the amount of any taxes, fees, charges or other costs and
expenses whatsoever incurred by the Agent or any Bank in connection with any
payment made by the Agent or any Bank under, or with respect to, such Letter of
Credit,
(b) upon the reduction of the Total Commitment (but not the
termination of the Commitments) to an amount less than the Maximum Drawing
Amount, an amount equal to such difference, which amount shall be held by the
Agent for the benefit of the Banks and the Agent as cash collateral for all
Reimbursement Obligations, and
(c) upon the termination of the Commitments, or the acceleration
of the Reimbursement Obligations with respect to all Letters of Credit in
accordance with Section 13 hereof, an amount equal to the then Maximum Drawing
Amount on all Letters of Credit, which amount shall be held by the Agent for
the benefit of the Banks and the Agent as cash collateral for all Reimbursement
Obligations.
Each such payment shall be made to the Agent at the Agent's Head Office in
immediately available funds. Interest on any and all amounts remaining unpaid
by the Borrower under this Section 4.2 at any time from the date such amounts
become due and payable (whether as stated in this Section 4.2, by acceleration
or otherwise) until payment in full (whether before or after judgment) shall be
payable to the Agent on demand at the rate specified in Section 5.11 hereof for
overdue principal on the Revolving Credit Loans.
Section 4.3. Letter of Credit Payments. If any draft shall be presented
or other demand for payment shall be made under any Letter of Credit, the Agent
shall notify the Borrower of the date and amount of the draft presented or
demand for payment and of the date and time when it expects to pay such draft
or honor such demand for payment. If the Borrower fails to reimburse the Agent
as provided in Section 4.2 hereof on or before the date that such draft is paid
or other payment is made by the Agent, the Agent may at any time thereafter
notify the Banks of the amount of any such Unpaid Reimbursement Obligation. No
later than 3:00 p.m. (Boston time) on the Business Day next following the
receipt of such notice, each Bank shall make available to the Agent, at the
Agent's Head Office, in immediately available funds, such Bank's Commitment
Percentage of such Unpaid Reimbursement Obligation, together with an amount
equal to the product of (a) the average, computed for the period referred to in
clause (c) below, of the weighted average interest rate paid by the Agent for
federal funds acquired by the Agent during each day included in such period,
times (b) the amount equal to such Bank's Commitment Percentage of such Unpaid
Reimbursement Obligation, times (c) a fraction, the numerator of which is the
number of days that elapse from and including the date the Agent paid the draft
presented for honor or otherwise made payment to the date on which such Bank's
Commitment Percentage of such Unpaid Reimbursement obligation shall become
immediately available to the Agent, and the denominator of which is 360. The
responsibility of the Agent to the Borrower and the Banks shall be only to
determine that the documents (including each draft) delivered under each Letter
of Credit in connection with such presentment shall be in conformity in all
material respects with such Letter of Credit.
Section 4.4. Obligations Absolute. The Borrower's obligations under
this Section 4 shall be absolute and unconditional under any and all
circumstances and irrespective of the occurrence of any Default or Event of
Default or any condition precedent whatsoever or any setoff, counterclaim or
defense to payment which the Borrower may have or have had against the Agent,
any Bank or any beneficiary of a Letter of Credit. The Borrower further agrees
with the Agent and the Banks that the Agent and the Banks shall not be
responsible for, and the Borrower's Reimbursement Obligations under Section 4.2
hereof shall not be affected by, among other things, the validity or
genuineness of documents or of any endorsements thereon, even if such
documents should in fact prove to be in any or all respects invalid, fraudulent
or forged, or any dispute between or among the Borrower, the beneficiary of any
Letter of Credit or any financing institution or other party to which any
Letter of Credit may be transferred or any claims or defenses whatsoever of the
Borrower against the beneficiary of any Letter of Credit or any such
transferee. The Agent and the Banks shall not be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of
Credit. The Borrower agrees that any action taken or omitted by the Agent or
any Bank under or in connection with each Letter of Credit and the related
drafts and documents, if done in good faith, shall be binding upon the Borrower
and shall not result in any liability on the part of the Agent or any Bank to
the Borrower.
Section 4.5. Reliance by Issuer. To the extent not inconsistent with
Section 4.4 hereof, the Agent shall be entitled to rely, and shall be fully
protected in relying upon, any Letter of Credit, draft, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement unless
it shall first have received such advice or concurrence of the Majority Banks
as it reasonably deems appropriate or it shall first be indemnified to its
reasonable satisfaction by the Banks against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a request of
the Majority Banks, and such request and any action taken or failure to act
pursuant thereto shall be binding upon the Banks and all future holders of the
Notes or of a Letter of Credit Participation.
Section 4.6. Letter of Credit Fee. The Borrower shall pay to the Agent
a fee (in each case, a "Letter of Credit Fee") (a) in respect of each standby
Letter of Credit issued pursuant to this Credit Agreement, calculated at the
rate of the Applicable Margin per annum on the face amount of each such Letter
of Credit, and the Agent shall, in turn, remit to each Bank (other than the
Agent) its pro rata portion of such Letter of Credit Fee calculated at a rate
of the Applicable Margin minus 1/4% per annum on the face amount of each such
Letter of Credit, and (b) in respect of each documentary Letter of Credit
issued pursuant to this Credit Agreement, calculated at the rate of the
Applicable Margin minus 1/2% per annum on the face amount of such Letter of
Credit, and the Agent shall, in turn, remit to each Bank (other than the Agent)
its pro rata portion of such Letter of Credit Fee calculated at a rate of the
Applicable Margin minus 3/4% per annum on the face amount of each such Letter
of Credit. The Letter of Credit Fee for each Letter of Credit shall be payable
quarterly in advance, on the date of issuance of such Letter of Credit, and on
the first day of each fiscal quarter thereafter until such Letter of Credit
expires or is cancelled. In addition, the Borrower shall pay to the Agent, for
its own account, the Agent's standard issuance, processing, negotiation,
amendment and administrative fees, determined in accordance with customary fees
and charges for similar facilities.
Section 5. CERTAIN GENERAL PROVISIONS.
Section 5.1. Closing Fee. The Borrower agrees to pay to the Agent for
the pro rata accounts of the Banks on the Closing Date a closing fee as set
forth in the Fee Letter.
Section 5.2. Agent's Fee. The Borrower shall pay to the Agent an
Agent's fee (the "Agents Fee") as provided in the Fee Letter.
Section 5.3. Funds for Payments.
Section 5.3.1. Payments to Agent. All payments of principal,
interest, Reimbursement Obligations, Commitment Fees, Letter of Credit Fees and
any other amounts due hereunder or under any of the other Loan Documents shall
be made to the Agent, for the respective accounts of the Banks and the Agent,
at the Agent's Head Office or at such other location in the Boston,
Massachusetts area that the Agent may from time to time designate, in each case
in immediately available funds.
Section 5.3.2. No Offset. All payments by the Borrower hereunder
and under any of the other Loan Documents shall be made without setoff or
counterclaim and free and clear of and without deduction for any taxes, levies,
imposts, duties, charges, fees, deductions, withholdings, compulsory loans,
restrictions or conditions of any nature now or hereafter imposed or levied by
any jurisdiction or any political subdivision thereof or taxing or other
authority therein unless the Borrower is compelled by law to make such
deduction or withholding. If any such obligation is imposed upon the Borrower
with respect to any amount payable by it hereunder or under any of the other
Loan Documents (other than with respect to taxes based upon the Agent's or any
Bank's net income), the Borrower will pay to the Agent, for the account of the
Banks or (as the case may be) the Agent, on the date on which such amount is
due and payable hereunder or under such other Loan Document, such additional
amount in Dollars as shall be necessary to enable the Banks or the Agent to
receive the same net amount which the Banks or the Agent would have received on
such due date had no such obligation been imposed upon the Borrower. The
Borrower will deliver promptly to the Agent certificates or other valid
vouchers for all taxes or other charges deducted from or paid with respect to
payments made by the Borrower hereunder or under such other Loan Document.
Section 5.4. Computations. All computations of interest on the
Revolving Credit Loans and of Commitment Fees, Letter of Credit Fees or other
fees shall be based on a 360-day year and paid for the actual number of days
elapsed. Except as otherwise provided in the definition of the term "Interest
Period" with respect to Eurodollar Rate Loans, whenever a payment hereunder or
under any of the other Loan Documents becomes due on a day that is not a
Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension. The
outstanding amount of the Revolving Credit Loans as reflected on the Note
Records from time to time shall be considered correct and binding on the
Borrower unless within five (5) Business Days after receipt of any notice by
the Agent or any of the Banks of such outstanding amount, the Agent or such
Bank shall notify the Borrower to the contrary.
Section 5.5. Inability to Determine Eurodollar Rate. In the event,
prior to the commencement of any Interest Period relating to any Eurodollar
Rate Loan, the Agent shall determine or be notified by the Majority Banks that
adequate and reasonable methods do not exist for ascertaining the Eurodollar
Rate that would otherwise determine the rate of interest to be applicable to
any Eurodollar Rate Loan during any Interest Period, the Agent shall forthwith
give notice of such determination (which shall be conclusive and binding on the
Borrower and the Banks) to the Borrower and the Banks. In such event (a) any
Loan Request or Conversion Request with respect to Eurodollar Rate Loans shall
be automatically withdrawn and shall be deemed a request for Base Rate Loans,
(b) each Eurodollar Rate Loan will automatically, on the last day of the then
current Interest Period relating thereto, become a Base Rate Loan, and (c) the
obligations of the Banks to make Eurodollar Rate Loans shall be suspended until
the Agent or the Majority Banks determine that the circumstances giving rise to
such suspension no longer exist, whereupon the Agent or, as the case may be,
the Agent upon the instruction of the Majority Banks, shall so notify the
Borrower and the Banks.
Section 5.6. Illegality. Notwithstanding any other provisions herein,
if any present or future law, regulation, treaty or directive or in the
interpretation or application thereof shall make it unlawful for any Bank to
make or maintain Eurodollar Rate Loans, such Bank shall forthwith give notice
of such circumstances to the Borrower and the other Banks and thereupon (a) the
commitment of such Bank to make Eurodollar Rate Loans or convert Base Rate
Loans to Eurodollar Rate Loans shall forthwith be suspended and (b) such Bank's
Revolving Credit Loans then outstanding as Eurodollar Rate Loans, if any, shall
be converted automatically to Base Rate Loans on the last day of each Interest
Period applicable to such Eurodollar Rate Loans or within such earlier period
as may be required by law. The Borrower hereby agrees promptly to pay the
Agent for the account of such Bank, upon demand by such Bank, any additional
amounts necessary to compensate such Bank for any costs incurred by such Bank
in making any conversion in accordance with this Section 5.6, including any
interest or fees payable by such Bank to lenders of funds obtained by it in
order to make or maintain its Eurodollar Loans hereunder.
Section 5.7. Additional Costs. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon
or otherwise issued to any Bank or the Agent by any central bank or other
fiscal, monetary or other authority (whether or not having the force of law),
shall:
(a) subject any Bank or the Agent to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to this Credit
Agreement, the other Loan Documents, any Letters of Credit, such Bank's
Commitment or the Revolving Credit Loans (other than taxes based upon or
measured by the income or profits of such Bank or the Agent), or
(b) materially change the basis of taxation (except for changes
in taxes on income or profits) of payments to any Bank of the principal of or
the interest on any Revolving Credit Loans or any other amounts payable to any
Bank or the Agent under this Credit Agreement or any of the other Loan
Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit Agreement) any
special deposit, reserve, assessment, liquidity, capital adequacy or other
similar requirements (whether or not having the force of law) against assets
held by, or deposits in or for the account of, or loans by, or letters of
credit issued by, or commitments of an office of any Bank, or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan Documents,
any Letters of Credit, the Revolving Credit Loans, such Bank's Commitment, or
any class of loans, letters of credit or commitments of which any of the
Revolving Credit Loans or such Bank's Commitment forms a part,
and the result of any of the foregoing is:
(i) to increase the cost to any Bank of making, funding, issuing,
renewing, extending or maintaining any of the Revolving Credit Loans or such
Bank's Commitment or any Letter of Credit, or
(ii) to reduce the amount of principal, interest, Reimbursement
Obligation or other amount payable to such Bank or the Agent hereunder on
account of such Bank's Commitment, any Letter of Credit or any of the
Revolving Credit Loans, or
(iii) to require such Bank or the Agent to make any payment or to forego
any interest or Reimbursement Obligation or other sum payable hereunder,
the amount of which payment or foregone interest or Reimbursement
Obligation or other sum is calculated by reference to the gross amount of
any sum receivable or deemed received by such Bank or the Agent from the
Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by such Bank
or (as the case may be) the Agent at any time and from time to time and as
often as the occasion therefor may arise, pay to such Bank or the Agent such
additional amounts as will be sufficient to compensate such Bank or the Agent
for such additional cost, reduction, payment or foregone interest or
Reimbursement Obligation or other sum.
Section 5.8. Capital Adequacy. If after the date hereof any Bank or the
Agent determines that (a) the adoption of or change in any law, governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law) regarding capital requirements for banks or bank holding
companies or any change in the interpretation or application thereof by a court
or governmental authority with appropriate jurisdiction, or (b) compliance by
such Bank or the Agent or any corporation controlling such Bank or the Agent
with any law, governmental rule, regulation, policy, guideline or directive
(whether or not having the force of law) of any such entity regarding capital
adequacy, has the effect of reducing the return on such Bank's or the Agent's
Commitment with respect to any Revolving Credit Loans to a level below that
which such Bank or the Agent could have achieved but for such adoption, change
or compliance (taking into consideration such Bank's or the Agent's then
existing policies with respect to capital adequacy and assuming full
utilization of such entity's capital) by any amount deemed by such Bank or (as
the case may be) the Agent to be material, then such Bank or the Agent may
notify the Borrower of such fact. To the extent that the amount of such
reduction in the return on capital is not reflected in the Base Rate, the
Borrower and such Bank shall thereafter attempt to negotiate in good faith,
within thirty (30) days of the day on which the Borrower receives such notice,
an adjustment payable hereunder that will adequately compensate such Bank in
light of these circumstances. If the Borrower and such Bank are unable to
agree to such adjustment within thirty (30) days of the date on which the
Borrower receives such notice, then commencing on the date of such notice (but
not earlier than the effective date of any such increased capital requirement),
the fees payable hereunder shall increase by an amount that will, in such
Bank's reasonable determination, provide adequate compensation. Each Bank
shall allocate such cost increases among its customers in good faith and on an
equitable basis.
Section 5.9. Certificate. A certificate setting forth any additional
amounts payable pursuant to Section Section 5.7 or 5.8 hereof and a brief
explanation of such amounts which are due, submitted by any Bank or the Agent
to the Borrower, shall be conclusive, absent manifest error, that such amounts
are due and owing.
Section 5.10. Indemnity. The Borrower agrees to indemnify each Bank and
to hold each Bank harmless from and against any loss, cost or expense
(including loss of anticipated profits) that such Bank may sustain or incur as
a consequence of (a) default by the Borrower in payment of the principal amount
of or any interest on any Eurodollar Rate Loans as and when due and payable,
including any such loss or expense arising from interest or fees payable by
such Bank to lenders of funds obtained by it in order to maintain its
Eurodollar Rate Loans, (b) default by the Borrower in making a borrowing or
conversion after the Borrower has given (or is deemed to have given) a Loan
Request or a Conversion Request relating thereto in accordance with Section
Section 2.6 or 2.7 hereof or (c) the making of any payment of a Eurodollar Rate
Loan or the making of any conversion of any such Eurodollar Rate Loan to a Base
Rate Loan on a day that is not the last day of the applicable Interest Period
with respect thereto, including interest or fees payable by such Bank to
lenders of funds obtained by it in order to maintain any such Revolving Credit
Loans.
Section 5.11. Interest on Overdue Amounts. Overdue principal and (to
the extent permitted by applicable law) interest on the Revolving Credit Loans
and all other overdue amounts payable hereunder or under any of the other Loan
Documents shall bear interest compounded monthly and payable on demand at a
rate per annum equal to two percent (2%) above the Base Rate until such amount
shall be paid in full (after as well as before judgment).
Section 5.12 Replacement Banks. Within 30 days after (a) any Bank has
demanded compensation from the Borrower pursuant to Section Section 5.7 or 5.8
hereof, or (b) there shall have occurred a change in law with respect to any
Bank as a consequence of which it shall have become unlawful for such Bank to
make a Eurodollar Rate Loan on any Drawdown Date, as described in Section 5.6
hereof (any such Bank described in the foregoing clauses (a) or (b) is
hereinafter referred to as an "Affected Bank"), the Borrower may request that
the Non-Affected Banks acquire all, but not less than all, of the Affected
Bank's outstanding Revolving Credit Loans and assume all, but not less than
all, of the Affected Bank's Commitment. If the Borrower so requests, the
Non-Affected Banks may elect to acquire all or any portion of the Affected
Bank's outstanding Revolving Credit Loans and to assume all or any portion of
the Affected Bank's Commitment. If the Non-Affected Banks do not elect to
acquire and assume all of the Affected Bank's outstanding Revolving Credit
Loans and Commitment, the Borrower may designate a replacement bank or banks,
which must be satisfactory to the Agent, to acquire and assume that portion of
the outstanding Revolving Credit Loans and Commitment of the Affected Bank not
being acquired and assumed by the Non-Affected Banks. The provisions of
Section 19 hereof shall apply to all reallocations pursuant to this Section
5.12, and the Affected Bank and any Non-Affected Banks and/or replacement banks
which are to acquire the Revolving Credit Loans and Commitment of the Affected
Bank shall execute and deliver to the Agent, in accordance with the provisions
of Section 19 hereof, such Assignments and Acceptances and other instruments,
including, without limitation, Notes, as are required pursuant to Section 19
hereof to give effect to such reallocations. Any Non-Affected Banks and/or
replacement banks which are to acquire the Revolving Credit Loans and
Commitment of the Affected Bank shall be deemed to be Eligible Assignees for
all purposes of Section 19 hereof. On the effective date of the applicable
Assignments and Acceptances, the Borrower shall pay to the Affected Bank all
interest accrued on its Revolving Credit Loans up to but excluding such date,
along with any fees payable to such Affected Bank hereunder up to but excluding
such date.
Section 6. COLLATERAL SECURITY AND GUARANTIES.
Section 6.1. Security of the Borrower. The Obligations shall be secured
by a perfected first priority security interest (subject only to Permitted
Liens entitled to priority under applicable law) in certain of the assets of
the Borrower, whether now owned or hereafter acquired, pursuant to the terms of
the Security Documents to which the Borrower is a party.
Section 6.2. Guaranties and Security of Subsidiaries. (a) The
Obligations shall also be guaranteed by each of the Wholly-Owned Guarantors
pursuant to the Subsidiary Guaranty. The obligations of each Wholly-Owned
Guarantor under the Subsidiary Guaranty shall be in turn secured by a perfected
first priority security interest (subject only to Permitted Liens entitled to
priority under applicable law) in certain of the personal property of such
Wholly-Owned Guarantor, whether now owned or hereafter acquired, pursuant to
the terms of the Security Documents to which such Wholly-Owned Guarantor is a
party.
(b) The Obligations shall also be guaranteed by each of the
Non-Wholly-Owned Guarantors pursuant to the Non-Wholly-Owned Subsidiary
Guaranty. The obligations of each Non-Wholly-Owned Guarantor under the
Non-Wholly-Owned Subsidiary Guaranty shall (i) while (but only while) such
Non-Wholly-Owned Guarantor continues to be a Non-Wholly-Owned Guarantor, be
equal to such Non-Wholly-Owned Guarantor's Maximum Liability, and (ii) be
secured by a perfected first priority security interest (subject only to
Permitted Liens entitled to priority under applicable law) in certain of the
personal property of such NonWhollyOwned Guarantor, whether now owned or
hereafter acquired, pursuant to the terms of the Security Documents to which
such Non-Wholly-Owned Guarantor is a party.
Section 6.3. Parent Guaranty. The Obligations shall also be guaranteed
by the Parent pursuant to the terms of the Parent Guaranty.
Section 7. REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents and warrants to the Banks and the Agent as follows:
Section 7.1. Corporate Authority.
Section 7.1.1. Incorporation; Good Standing. Each of the Parent,
the Borrower and its Subsidiaries (a) is a corporation duly organized, validly
existing and in good standing under the laws of its state of incorporation, (b)
has all requisite corporate power to own its property and conduct its business
as now conducted and as presently contemplated, and (c) is in good standing as
a foreign corporation and is duly authorized to do business in each
jurisdiction where such qualification is necessary except where a failure to be
so qualified would not have a materially adverse effect on the business, assets
or financial condition of the Parent or the Borrower and its Subsidiaries
considered as a whole, and would not have any effect on the enforceability
against the Parent, the Borrower or any of its Subsidiaries of any of the Loan
Documents to which such Person is a party.
Section 7.1.2. Authorization. The execution, delivery and
performance of this Credit Agreement and the other Loan Documents to which the
Parent, the Borrower or any of its Subsidiaries is or is to become a party and
the transactions contemplated hereby and thereby (a) are within the corporate
authority of such Person, (b) have been duly authorized by all necessary
corporate proceedings, (c) do not conflict with or result in any breach or
contravention of any provision of law, statute, rule or regulation to which the
Parent, the Borrower or any of its Subsidiaries is subject or any judgment,
order, writ, injunction, license or permit applicable to the Parent, the
Borrower or any of its Subsidiaries and (d) do not conflict with any provision
of the corporate charter or bylaws of, or any agreement or other instrument
binding upon, the Parent, the Borrower or any of its Subsidiaries.
Section 7.1.3. Enforceability. The execution and delivery of this
Credit Agreement and the other Loan Documents to which the Parent, the Borrower
or any of its Subsidiaries is or is to become a party will result in valid and
legally binding obligations of such Person enforceable against it in accordance
with the respective terms and provisions hereof and thereof, except as
enforceability is limited by bankruptcy, insolvency, reorganization, moratorium
or other laws relating to or affecting generally the enforcement of creditors'
rights and except to the extent that availability of the remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding therefor may be brought.
Section 7.2. Governmental Approvals. The execution, delivery and
performance by the Parent, the Borrower and any of its Subsidiaries of this
Credit Agreement and the other Loan Documents to which such Person is or is to
become a party and the transactions contemplated hereby and thereby do not
require the approval or consent of, or filing with, any governmental agency or
authority other than those already obtained.
Section 7.3. Title to Properties; Leases. Except as indicated on
Schedule 7.3 attached hereto, the Borrower and its Subsidiaries own all of the
assets reflected as owned by them in the consolidated and consolidating balance
sheets of the Parent and its Subsidiaries as at the Balance Sheet Date or
acquired since that date (except property and assets sold or otherwise disposed
of in the ordinary course of business since that date), subject to no rights of
others, including any mortgages, leases, conditional sales agreements, title
retention agreements, liens or other encumbrances except Permitted Liens.
Section 7.4. Financial Statements. There has been furnished to each of
the Banks (a) the consolidated balance sheet of the Parent and its Subsidiaries
as at the Balance Sheet Date and the consolidated statement of income of the
Parent and its Subsidiaries for the fiscal year then ended, each prepared in
accordance with generally accepted accounting principles, certified by Ernst &
Young and fairly presenting the financial condition of the Parent and its
Subsidiaries as at the close of business on the date thereof and the results of
operations for the fiscal year then ended, and (b) the consolidating balance
sheet of the Parent and its Subsidiaries as at the Balance Sheet Date and the
consolidating statement of income of the Parent and its Subsidiaries for the
fiscal year then ended, each in reasonable detail and prepared by management in
accordance with the past financial practice of the Parent and its
Subsidiaries, together with a certification by the principal financial or
accounting officer of the Borrower that the information contained in such
consolidating financial statements fairly presents the financial position of
the Parent and its Subsidiaries on the date hereof. There are no contingent
liabilities of the Parent or any of its Subsidiaries as of such date involving
material amounts, known to the officers of the Parent, which were not disclosed
in such balance sheets and the notes related thereto.
Section 7.5. No Material Changes. (a) Since the Balance Sheet Date
there has occurred no change in the financial condition or business of the
Parent and its Subsidiaries as shown on or reflected in the consolidated and
consolidating balance sheets of the Parent and its Subsidiaries as at the
Balance Sheet Date, or the consolidated and consolidating statements of income
for the fiscal year then ended, other than changes in the ordinary course of
business that have not had any materially adverse effect either individually or
in the aggregate on the business or financial condition of Parent and its
Subsidiaries considered as a whole or the Borrower and its Subsidiaries
considered as a whole. Since the Balance Sheet Date, the Borrower has not
made any Distribution.
(b) The Parent, the Borrower and each of its Subsidiaries (before
and after giving effect to the transactions contemplated by this Credit
Agreement and the other Loan Documents) (i) is solvent, (ii) has assets having
a fair value in excess of its liabilities, (iii) has assets having a fair value
in excess of the amount required to pay its liabilities on existing debts as
such debts become absolute and matured, and (iv) has, and expects to continue
to have, access to adequate capital for the conduct of its business and the
ability to pay its debts from time to time incurred in connection with the
operation of its business as such debts mature.
Section 7.6. Franchises, Patents, Copyrights. Each of the Borrower and
its Subsidiaries possesses all franchises, patents, copyrights, trademarks,
trade names, licenses and permits, and rights in respect of the foregoing,
adequate for the conduct of its business substantially as now conducted without
known conflict with any rights of others.
Section 7.7. Litigation. There are no actions, suits, proceedings or
investigations of any kind pending or threatened against the Parent, the
Borrower or any of its Subsidiaries before any court, tribunal or
administrative agency or board that, if adversely determined, might, either in
any case or in the aggregate, materially adversely affect the properties,
assets, financial condition or business of the Parent or the Borrower and its
Subsidiaries or materially impair the right of the Borrower and its
Subsidiaries, considered as a whole, to carry on business substantially as now
conducted by them, or result in any substantial liability not adequately
covered by insurance, or for which adequate reserves are not maintained on the
consolidated balance sheet of the Parent and its Subsidiaries, or which
question the validity of this Credit Agreement or any of the other Loan
Documents, or any action taken or to be taken pursuant hereto or thereto.
Section 7.8. No Materially Adverse Contracts. None of the Parent, the
Borrower nor any of its Subsidiaries is subject to any charter, corporate or
other legal restriction, or any judgment, decree, order, rule or regulation
that has or is expected in the future to have a materially adverse effect on
the business, assets or financial condition of the Parent or the Borrower and
its Subsidiaries considered as a whole. None of the Parent, the Borrower nor
any of its Subsidiaries is a party to any contract or agreement that has or is
expected, in the judgment of the Parent's and the Borrower's officers, to have
any materially adverse effect on the business of the Parent or the Borrower and
its Subsidiaries considered as a whole.
Section 7.9. Compliance with Other Instruments, Laws. None of the
Parent, the Borrower nor any of its Subsidiaries is in violation of any
provision of its charter documents, bylaws, or any agreement or instrument to
which it may be subject or by which it or any of its properties may be bound or
any decree, order, judgment, statute, license, rule or regulation, in any of
the foregoing cases in a manner that could result in the imposition of
substantial penalties or materially and adversely affect the financial
condition, properties or business of the Parent or the Borrower and its
Subsidiaries considered as a whole.
Section 7.10. Tax Status. Each of the Parent, the Borrower and its
Subsidiaries (a) has made or filed all federal and state income and all other
tax returns, reports and declarations required by any jurisdiction to which it
is subject, (b) has paid all taxes and other governmental assessments and
charges shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and by appropriate
proceedings, and (c) has set aside on its books provisions reasonably adequate
for the payment of all taxes for periods subsequent to the periods to which
such returns, reports or declarations apply. There are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction,
and the officers of the Parent and the Borrower know of no basis for any such
claim.
Section 7.11. No Event of Default. No Default or Event of Default has
occurred and is continuing.
Section 7.12. Holding Company and Investment Company Acts. None of the
Parent, the Borrower nor any of its Subsidiaries is a "holding company", or a
"subsidiary company" of a "holding company", or an affiliate" of a "holding
company", as such terms are defined in the Public Utility Holding Company Act
of 1935; nor is it an "investment company", or an "affiliated company" or a
"principal underwriter" of an "investment company", as such terms are defined
in the Investment Company Act of 1940.
Section 7.13. Absence of Financing Statements. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover,
affect or give notice of any present or possible future lien on, or security
interest in, any assets or property of the Borrower or any of its Subsidiaries
or any rights relating thereto.
Section 7.14. Perfection of Security Interest. All filings,
assignments, pledges and deposits of documents or instruments have been made
and all other actions have been taken that are necessary or advisable, under
applicable law, to establish and perfect the Agent's security interest in the
Collateral. The Collateral and the Agent's rights with respect to the
Collateral are not subject to any setoff, claims, withholdings or other
defenses. The Borrower or the applicable Guarantor is the owner of the
Collateral free from any lien, security interest, encumbrance and any other
claim or demand, except for Permitted Liens.
Section 7.15. Certain Transactions. Except for arm's length
transactions pursuant to which the Parent, the Borrower or any of its
Subsidiaries makes payments in the ordinary course of business upon terms no
less favorable than the such Person could obtain from third parties, none of
the officers, directors, or employees of the Parent, the Borrower or any of its
Subsidiaries is presently a party to any transaction with such Person (other
than for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or
from, or otherwise requiring payments to or from any officer, director or such
employee or, to the knowledge of the Parent and the Borrower, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
Section 7.16. Employee Benefit Plans.
Section 7.16.1. In General. Each Employee Benefit Plan has been
maintained and operated in compliance in all material respects with the
provisions of ERISA and, to the extent applicable, the Code, including but not
limited to the provisions thereunder respecting prohibited transactions.
Section 7.16.2. Terminability of Welfare Plans. Under each
Employee Benefit Plan which is an employee welfare benefit plan within the
meaning of Section 3(1) or Section 3(2)(B) of ERISA, no benefits are due unless
the event giving rise to the benefit entitlement occurs prior to plan
termination (except as required by Title I, Part 6 of ERISA) . The Parent, the
Borrower or an ERISA Affiliate, as appropriate, may terminate each such Plan at
any time (or at any time subsequent to the expiration of any applicable
bargaining agreement) in the discretion of the Parent, the Borrower or such
ERISA Affiliate without liability to any Person.
Section 7.16.3. Guaranteed Pension Plans. Each contribution
required to be made to a Guaranteed Pension Plan, whether required to be made
to avoid the incurrence of an accumulated funding deficiency, the notice or
lien provisions of Section 302(f) of ERISA, or otherwise, has been timely made.
No waiver of an accumulated funding deficiency or extension of amortization
periods has been received with respect to any Guaranteed Pension Plan. No
liability to the PBGC (other than required insurance premiums, all of which
have been paid) has been incurred by the Parent, the Borrower or any ERISA
Affiliate with respect to any Guaranteed Pension Plan and there has not been
any ERISA Reportable Event, or any other event or condition which presents a
material risk of termination of any Guaranteed Pension Plan by the PBGC. Based
on the latest valuation of each Guaranteed Pension Plan (which in each case
occurred within twelve months of the date of this representation), and on the
actuarial methods and assumptions employed for that valuation, the aggregate
benefit liabilities of all such Guaranteed Pension Plans within the meaning of
Section 4001 of ERISA did not exceed the aggregate value of the assets of all
such Guaranteed Pension Plans, disregarding for this purpose the benefit
liabilities and assets of any Guaranteed Pension Plan with assets in excess of
benefit liabilities, by more than $5,000,000.
Section 7.16.4. Multiemployer Plans. None of the Parent, the
Borrower nor any ERISA Affiliate has incurred any material liability
(including secondary liability) to any Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan under Section 4201
of ERISA or as a result of a sale of assets described in Section 4204 of ERISA.
None of the Parent, the Borrower nor any ERISA Affiliate has been notified that
any Multiemployer Plan is in reorganization or insolvent under and within the
meaning of Section 4241 or Section 4245 of ERISA or that any Multiemployer Plan
intends to terminate or has been terminated under Section 4041A of ERISA.
Section 7.17. Regulations U and X. The proceeds of the Revolving Credit
Loans shall be used and the Letters of Credit will be obtained for working
capital and general corporate purposes, including, without limitation, for
acquisitions, Investments, Capital Expenditures and Distributions permitted
hereunder. No portion of any Revolving Credit Loan is to be used, and no
portion of any Letter of Credit is to be obtained, for the purpose of
purchasing or carrying any "margin security" or "margin stock" as such terms
are used in Regulations U and X of the Board of Governors of the Federal
Reserve System, 12 C.F.R. Parts 221 and 224.
Section 7.18. Environmental Compliance. To the best of the Borrower's
knowledge, except as disclosed on Schedule 7.18 attached hereto:
(a) none of the Parent, the Borrower, its Subsidiaries or any
operator of the Real Estate or any operations thereon is in violation, nor has
the Parent, the Borrower or any of its Subsidiaries received notice that it, or
any operator of the Real Estate is in alleged violation, of any judgment,
decree, order, law, license, rule or regulation pertaining to environmental
matters, including without limitation, those arising under the Resource
Conservation and Recovery Act ("RCRA"), the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 as amended ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986 ("SARA"), the Federal
Clean Water Act, the Federal Clean Air Act, the Toxic Substances Control Act,
or any state or local statute, regulation, ordinance, order or decree relating
to health, safety or the environment (hereinafter "Environmental Laws"), which
violation would have a material adverse effect on the environment or the
business, assets or financial condition of the Parent or the Borrower and its
Subsidiaries considered as a whole;
(b) none of the Parent, the Borrower nor any of its Subsidiaries
has received notice from any third party including, without limitation; any
federal, state or local governmental authority: (i) that any one of them has
been identified by the United States Environmental Protection Agency ("EPA") as
a potentially responsible party under CERCLA with respect to a site listed on
the National Priorities List, 40 C.F.R. Part 300 Appendix B (1986); (ii) that
any hazardous waste, as defined by 42 U.S.C. Section 9601(5), any hazardous
substances as defined by 42 U.S.C. Section 9601(14), any pollutant or
contaminant as defined by 42 U.S.C. Section 9601(33) and any toxic substances,
oil or hazardous materials or other chemicals or substances regulated by any
Environmental Laws ("Hazardous Substances") which any one of them has
generated, transported or disposed of has been found at any site at which a
federal, state or local agency or other third party has conducted or has
ordered that the Parent, the Borrower or any of its Subsidiaries conduct a
remedial investigation, removal or other response action pursuant to any
Environmental Law; or (iii) except to the extent that the following would not
have a material adverse effect on the business, assets or financial condition
of the Parent or the Borrower and its Subsidiaries, taken as a whole, that it
is or shall be a named party to any claim, action, cause of action, complaint,
or legal or administrative proceeding (in each case, contingent or otherwise)
arising out of any third party's incurrence of costs, expenses, losses or
damages of any kind whatsoever in connection with the release of Hazardous
Substances;
(c) (i) no portion of the Real Estate has been used for the
handling, processing, storage or disposal of Hazardous Substances other than in
accordance) with applicable Environmental Laws the noncompliance with which
would have a material adverse effect on the business, assets or financial
condition of the Parent or the Borrower and its Subsidiaries, taken as a
whole; and no underground tank or other underground storage receptacle for
Hazardous Substances is located on any portion of the Real Estate in violation
of any applicable Environmental Law the noncompliance with which would have a
material adverse effect on the business, assets or financial condition of the
Parent or the Borrower and its Subsidiaries, taken as a whole; (ii) in the
course of any activities conducted by the Parent, the Borrower, its
Subsidiaries or operators of such Person's properties, no Hazardous Substances
have been generated or are being used on the Real Estate except in accordance
(in all material respects) with applicable Environmental Laws the noncompliance
with which would have a material adverse effect on the business, assets or
financial condition of the Parent or the Borrower and its Subsidiaries, taken
as a whole; (iii) there have been no releases (i.e. any past or present
releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, disposing or dumping) or threatened releases
of Hazardous Substances on, upon, into or from the properties of the Parent,
the Borrower or its Subsidiaries, which releases would have a material adverse
effect on the business, assets or financial condition of the Parent or the
Borrower and its Subsidiaries, taken as a whole; (iv) there have been no
releases on, upon, from or into any real property in the vicinity of any of the
Real Estate which, through soil or groundwater contamination, may have come to
be located on any of the Real Estate, and which would have a material adverse
effect on the business, assets or financial condition of the Parent or the
Borrower and its Subsidiaries, taken as a whole; and (v) in addition, except to
the extent that the following would not have a material adverse effect on the
business, assets or financial condition of the Parent or the Borrower and its
Subsidiaries, taken as a whole, any Hazardous Substances that have been
generated on any of the Real Estate have been transported offsite only by
carriers having an identification number issued by the EPA, treated or disposed
of only by treatment or disposal facilities maintaining valid permits as
required under applicable Environmental Laws, which transporters and facilities
have been and are operating in compliance with such permits and applicable
Environmental Laws; and
(d) none of the Parent, the Borrower or its Subsidiaries or any
of the Real Estate is subject to any applicable environmental law requiring the
performance of Hazardous Substances site assessments, or the removal or
remediation of Hazardous Substances, or the giving of notice to any
governmental agency or the recording or delivery to other Persons of an
environmental disclosure document or statement by virtue of the transactions
set forth herein and contemplated hereby, or as a condition to the
effectiveness of any other transactions contemplated hereby.
Section 7.19. Subsidiaries. (a) As of the Closing Date, the Parent does
not have any Subsidiaries except for its Subsidiaries listed on Schedule 7.19
attached hereto and the Borrower does not have any Subsidiaries except for its
Subsidiaries listed on Schedule 7.19 attached hereto. The Parent is the record
and beneficial owner of 100% of the outstanding capital stock of the Borrower
and of each of the Parent's other Subsidiaries except as set forth on Schedule
7.19 attached hereto. The Borrower is the record and beneficial owner of 100%
of the outstanding capital stock of each of the Wholly-Owned Guarantors, and is
the record and beneficial owner of the outstanding capital stock of each of the
Non-Wholly Owned Guarantors as set forth on Schedule 7.19 attached hereto. The
Borrower has no material assets other than the capital stock of its
Subsidiaries. The Parent has no material assets other than the capital stock
of its Subsidiaries.
(b) Except as described in Section Section 7.19(a) and 9.3 hereof
and as shown on Schedules 7.19 and 9.3 attached hereto, neither the Parent nor
the Borrower owns or holds of record and/or beneficially (whether directly or
indirectly) any shares of any class in the capital of any other corporations or
any legal and/or beneficial interests in any partnership, business trust or
joint venture or in any other unincorporated trade or business enterprise.
Section 7.20. Chief Executive Offices. Each of the Borrower's and the
Parent's chief executive office is at ArborLake Centre, Suite 550, 1751 Lake
Cook Road, Deerfield, Illinois 60015 at which location its books and records
are kept.
Section 7.21. Fiscal Year. Each of the Parent and the Borrower has a
fiscal year which is the twelve months ending on December 31 of each year.
Section 7.22. Disclosure. None of this Credit Agreement or any of the
other Loan Documents contains any untrue statement of a material fact or omits
to state a material fact (known to the Borrower or the Parent in the case of
any document or information not furnished by it) necessary in order to make the
statements herein or therein not misleading. There is no fact known to the
Borrower or the Parent which materially adversely affects, or which is
reasonably likely in the future to materially adversely affect, exclusive or
effects resulting from changes in general economic conditions, the business,
assets, financial condition or prospects of the Parent or the Borrower and its
Subsidiaries, taken as a whole.
Section 8. AFFIRMATIVE COVENANTS OF THE BORROWER. The Borrower hereby
covenants and agrees that, so long as any Revolving Credit Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Revolving Credit Loans or the Agent has any
obligation to issue, extend or renew any Letters of Credit:
Section 8.1. Punctual Payment. The Borrower will duly and punctually
pay or cause to be paid the principal and interest on the Revolving Credit
Loans, all Reimbursement Obligations, the Letter of Credit Fees, the Commitment
Fees, the Agent's Fee and all other amounts provided for in this Credit
Agreement and the other Loan Documents to which the Borrower or any of its
Subsidiaries is a party, all in accordance with the terms of this Credit
Agreement and such other Loan Documents.
Section 8.2. Maintenance of Office. The Borrower will maintain its
chief executive office at ArborLake Centre, Suite 550, 1751 Lake Cook Road,
Deerfield, Illinois 60015, or at such other place in the United States of
America as the Borrower shall designate upon written notice to the Agent, where
notices, presentations and demands to or upon the Borrower in respect of the
Loan Documents to which the Borrower is a party may be given or made.
Section 8.3. Records and Accounts. The Borrower will (a) keep, and
cause each of its Subsidiaries to keep, true and accurate records and books of
account in which full, true and correct entries will be made in accordance with
generally accepted accounting principles and (b) maintain adequate accounts and
reserves for all taxes (including income taxes), depreciation, depletion,
obsolescence and amortization of its properties and the properties of its
Subsidiaries, contingencies, and other reserves.
Section 8.4. Financial Statements, Certificates and Information. The
Borrower will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than one
hundred and five (105) days after the end of each fiscal year of the Parent,
(i) the consolidated balance sheet of the Parent and its Subsidiaries as at the
end of such year, and the related consolidated statement of income and
consolidated statement of cash flow for such year, each setting forth in
comparative form the figures for the previous fiscal year and all such
consolidated statements to be in reasonable detail, prepared in accordance with
generally accepted accounting principles, and certified without qualification
by Ernst & Young or by other independent certified public accountants
satisfactory to the Agent; and (ii) the unaudited consolidating balance sheet
of the Parent and its Subsidiaries as at the end of such year, and the related
unaudited consolidating statement of income and unaudited consolidating
statement of cash flow for such year, each setting forth in comparative form
the figures for the previous fiscal year and all such consolidating statements
to be in reasonable detail, prepared by management in accordance with the past
financial practice of the Parent and its Subsidiaries, and certified by the
principal financial or accounting officer of the Borrower that the information
contained in such financial statements fairly presents the financial position
of the Parent and its Subsidiaries on the date hereof;
(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the fiscal quarters of the
Parent, copies of the unaudited consolidated and consolidating balance sheets
of the Parent and its Subsidiaries, each as at the end of such quarter, and the
related consolidated and consolidating statements of income and consolidated
and consolidating statements of cash flow for the portion of the Parent's
fiscal year then elapsed, all in reasonable detail and, with respect to the
consolidated financial statements, prepared in accordance with generally
accepted accounting principles, and in each case together with a certification
by the principal financial or accounting officer of the Borrower that the
information contained in such financial statements fairly presents the
financial position of the Parent and its Subsidiaries on the date thereof
(subject to year-end adjustments);
(c) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement certified by the
principal financial or accounting officer of the Borrower substantially in the
form of Exhibit G attached hereto (a "Compliance Certificate") and setting
forth in reasonable detail computations evidencing compliance with the
covenants contained in Section 10 hereof and (if applicable) reconciliations to
reflect changes in generally accepted accounting principles since the Balance
Sheet Date;
(d) as soon as practicable but, in any event, within ten (10)
Business Days after the issuance thereof, copies of all material of a financial
nature filed with the Securities and Exchange Commission by the Parent or any
of its Subsidiaries or sent to the stockholders of the Parent or any of its
Subsidiaries; and
(e) from, time to time such other financial data and information
(including accountants management letters) as the Agent or any Bank may
reasonably request.
The Banks and the Agent agree that they will treat in confidence all financial
information with respect to the Parent and its Subsidiaries which has not
become public, and will not, without the consent of the Borrower, disclose such
information to any third party, and, if any representative or agent of the
Banks or the Agent shall not be an employee of one of the Banks or the Agent or
any affiliate of the Banks or the Agent, such designee shall be reputable and
of recognized standing and shall agree to treat in confidence the information
obtained during any such inspection and, without the prior written consent of
the Borrower, not to disclose such information to any third party or make use
of such information for personal gain. Notwithstanding the foregoing, the
Borrower hereby authorizes the Agent and each of the Banks to disclose
information obtained pursuant to this Credit Agreement which has not become
public to banks or other financial institutions who are participants or
assignees or potential participants or assignees of the Revolving Credit Loans
made or to be made hereunder with the Borrower's consent not to be unreasonably
withheld, and where required or requested by governmental or regulatory
authorities.
Section 8.5. Notices.
Section 8.5.1. Defaults. The Borrower will, within five (5) days
of becoming aware thereof, notify the Agent and each of the Banks in writing of
the occurrence of any Default or Event of Default. If any Person shall give
any notice or take any other action in respect of a claimed default (whether or
not constituting an Event of Default) under this Credit Agreement or any other
note, evidence of indebtedness, indenture or other obligation to which or with
respect to which the Parent or any of its Subsidiaries is a party or obligor,
whether as principal, guarantor, surety or otherwise, the Borrower shall
forthwith give written notice thereof to the Agent and each of the Banks,
describing the notice or action and the nature of the claimed default.
Section 8.5.2. Environmental Events. The Borrower will promptly
give notice to the Agent and each of the Banks (a) of any violation of any
Environmental Law that the Parent or any of its Subsidiaries reports in writing
or is reportable by such Person in writing (or for which any written report
supplemental to any oral report is made) to any federal, state or local
environmental agency and (b) upon becoming aware thereof, of any inquiry,
proceeding, investigation, or other action, including a notice from any agency
of potential environmental liability, or any federal, state or local
environmental agency or board, that has the potential to materially adversely
affect the assets, liabilities, financial conditions or operations of the
Parent or the Borrower and its Subsidiaries considered as a whole, or the
Agent's security interests pursuant to the Security Documents.
Section 8.5.3. Notification of Claim Against Collateral. The
Borrower will, immediately upon becoming aware thereof, notify the Agent and
each of the Banks in writing of any setoff, claims, withholdings or other
defenses to which any of the Collateral with an aggregate net book value of
$500,000 or more, or the Agent's rights with respect to such Collateral are
subject.
Section 8.5.4. Notice of Litigation and Judgments. The Borrower
will, and will cause each of its Subsidiaries to, give notice to the Agent and
each of the Banks in writing within ten (10) Business Days of becoming aware of
any litigation or proceedings threatened in writing or any pending litigation
and proceedings affecting the Parent, the Borrower or any of its Subsidiaries
or to which any such Person is or becomes a party involving an uninsured claim
of more than $1,000,000 against such Person, as the case may be, and stating
the nature and status of such litigation or proceedings. The Borrower will,
and will cause each of its Subsidiaries to, give notice to the Agent and each
of the Banks, in writing, in form and detail satisfactory to the Agent, within
ten (10) Business Days of any judgment final or otherwise, against the Parent
or any of its Subsidiaries in an amount in excess of $1,000,000.
Section 8.6. Corporate Existence; Maintenance of Properties. The
Borrower will do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence, rights and franchises and
those of its Subsidiaries except as permitted under Section 9.5.1 hereof or the
dissolution of any Subsidiary whose operation has been discontinued if such
dissolution is, in the judgment of the Borrower desirable in the conduct of its
business and does not materially adversely effect the business of the Borrower
and its Subsidiaries on a consolidated basis. The Borrower (a) will cause all
of its properties and those of its Subsidiaries used or useful in the conduct
of its business or the business of its Subsidiaries to be maintained and kept
in good condition, repair and working order and supplied with all necessary
equipment, (b) will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Borrower may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times, and (c)
will, and will cause each of its Subsidiaries to, continue to engage primarily
in the businesses now conducted by them and in related businesses; provided
that nothing in this Section 8.6 shall prevent the Borrower from discontinuing
the operation and maintenance of any of its properties or any of those of its
Subsidiaries if such discontinuance is, in the judgment of the Borrower,
desirable in the conduct of its or their business and that do not in the
aggregate materially adversely affect the business of the Borrower and its
Subsidiaries on a consolidated basis.
Section 8.7. Insurance. (a) The Borrower will, and will cause each of
its Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such casualties
and contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and in
amounts, containing such terms, in such forms and for such periods as may be
reasonable and prudent. All such insurance shall be payable to the Agent as
loss payee for the benefit of the Banks and the Agent.
(b) Within sixty (60) days after the Closing Date, the Borrower shall
cause all policies of insurance of the Borrower and its Subsidiaries to provide
for at least thirty (30) days prior written cancellation notice to the Agent.
In the event of failure by the Borrower or any of its Subsidiaries to provide
and maintain insurance as herein provided, the Agent may, at its option,
provide such insurance and charge the amount thereof to the Borrower or such
Subsidiary, as applicable. The Borrower and each of its Subsidiaries shall
furnish the Agent with certificates of insurance and policies evidencing
compliance with the foregoing insurance provisions.
(c) The Borrower shall deliver to the Agent, within sixty 60 days after
the Closing Date, a certificate of insurance from an independent insurance
broker, identifying insurers, types of insurance, insurance limits, and policy
terms, and otherwise describing the insurance obtained in accordance with the
provisions of this Credit Agreement and certified copies of all policies
evidencing such insurance (or certificates therefor signed by the insurer or an
agent authorized to bind the insurer).
Section 8.8. Taxes. The Borrower will, and will cause each of its
Subsidiaries to, duly pay and discharge, or cause to be paid and discharged,
before the same shall become overdue, all taxes, assessments and other
governmental charges imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by
law become a lien or charge upon any of its property; provided that any such
tax, assessment, charge, levy or claim need not be paid if the validity or
amount thereof shall currently be contested in good faith by appropriate
proceedings and if the Borrower or such Subsidiary, as applicable, shall have
set aside on its books adequate reserves with respect thereto; and provided
further that the Borrower and each Subsidiary of the Borrower will pay all such
taxes, assessments, charges, levies or claims forthwith upon the commencement
of proceedings to foreclose any lien that may have attached as security
therefor.
Section 8.9. Inspection of Properties and Books.
Section 8.9.1. General. The Borrower shall permit the Banks,
through the Agent or any of the Banks' other designated representatives, to (a)
visit and inspect any of the properties of the Borrower or any of its
Subsidiaries, (b) examine the books of account of the Borrower and its
Subsidiaries (and to make copies thereof and extracts therefrom), (c) discuss
the affairs, finances and accounts of the Borrower and its Subsidiaries with,
and to be advised as to the same by, its and their officers, and (d) conduct
commercial finance examinations and appraisals of assets, all at such
reasonable times and intervals as the Agent or any Bank may reasonably request.
Each of the Banks agrees that it will treat in confidence the information
obtained during any inspection which is designated by the Borrower as
confidential and will not, without the consent of the Borrower disclose such
information to any third party and, if any representative or agent of any Bank
or the Agent shall not be an employee of such Bank or the Agent, as the case
may be, or any affiliate of such Bank or the Agent, as the case may be, such
designee shall be reputable and of recognized standing and shall agree in
writing to treat in confidence the information obtained during any such
inspection and, without the prior written consent of the Borrower, not to
disclose such information to any third party or make use of such information
for personal gain. Notwithstanding the foregoing, the Banks and the Agent may
disclose information obtained pursuant to this Credit Agreement to other banks
or financial institutions who are potential participants or potential assignees
or participants in the Revolving Credit Loans made or to be made hereunder with
the Borrower's consent not to be unreasonably withheld, and where required or
requested by governmental or regulatory authorities.
Section 8.9.2. Communications with Accountants. The Borrower
hereby authorizes the Agent and, if accompanied by the Agent, the Banks to
communicate directly with the Borrower's independent certified public
accountants and authorizes such accountants to disclose to the Agent and the
Banks any and all financial statements and other supporting financial documents
and schedules including copies of any management letters with respect to the
business, financial condition and other affairs of the Borrower or any of its
Subsidiaries. At the request of the Agent, the Borrower shall deliver a letter
addressed to such accountants instructing them to comply with the provisions of
this Section 8.9.2.
Section 8.10. Compliance with Laws, Contracts, Licenses, and Permits.
The Borrower will, and the Borrower will cause each of its Subsidiaries to,
comply with (a) the applicable laws and regulations wherever its business is
conducted, including all Environmental Laws the noncompliance with which would
have a material adverse effect on the business, assets or financial condition
of the Borrower and its Subsidiaries considered as a whole or the ability of
the Borrower or any of its Subsidiaries to fulfill its obligations under this
Credit Agreement or the other Loan Documents to which such Person is a party,
(b) the provisions of its charter documents and by-laws, (c) all agreements and
instruments by which it or any of its properties may be bound and (d) all
applicable decrees, orders, and judgments. If any authorization, consent,
approval, permit or license from any officer, agency or instrumentality of any
government shall become necessary or required in order that the Borrower or any
of its Subsidiaries may fulfill any of its obligations hereunder or any of the
other Loan Documents to which such Person is a party, the Borrower will, or (as
the case may be) will cause such Subsidiary to, immediately take or cause to be
taken all reasonable steps within the power of such Person to obtain such
authorization, consent, approval, permit or license and furnish the Agent and
the Banks with evidence thereof.
Section 8.11. Employee Benefit Plans. The Borrower will (a) promptly
upon filing the same with the Department of Labor or Internal Revenue Service
upon request of the Agent, furnish to the Agent a copy of the most recent
actuarial statement required to be submitted under Section 103(d) of ERISA and
Annual Report, Form 5500, with all required attachments, in respect of each
Guaranteed Pension Plan and (b) promptly upon receipt or dispatch, furnish to
the Agent any notice, report or demand sent or received in respect of a
Guaranteed Pension Plan under Section Section 302, 4041, 4042, 4043, 4063,
4065, 4066 and 4068 of ERISA, or in respect of a Multiemployer Plan, under
Section Section 4041A, 4202, 4219, 4242, or 4245 of ERISA.
Section 8.12. Use of Proceeds. The Borrower will use the proceeds of
the Revolving Credit Loans and will obtain Letters of Credit solely for working
capital and general corporate purposes, including, without limitation, for
acquisitions, Investments, Capital Expenditures and Distributions permitted
hereunder.
Section 8.13. Additional Subsidiaries. (a) If, after the Closing Date,
the Borrower acquires, either directly or indirectly, any Subsidiary, it will
notify the Banks within three (3) Business Days of such acquisition and provide
the Banks with an updated Schedule 7.19.
(b) The Borrower shall at all times own, directly or indirectly,
not less than 51% of the outstanding Voting Stock of each of its Subsidiaries
which becomes a Subsidiary subsequent to the Closing Date.
(c) The Borrower shall cause each of its Subsidiaries that are
not parties on the Closing Date to a Subsidiary Guaranty or a Non-Wholly-Owned
Subsidiary Guaranty, as the case may be, to execute and deliver to the Banks,
on the date which is five (5) Business Days after such Person becomes a
Subsidiary of the Borrower, a guaranty substantially in the form of a
Subsidiary Guaranty or a Non-Wholly-Owned Subsidiary Guaranty, as appropriate,
and a security agreement substantially in the form of the Security Agreements,
together with such supporting documentation, including Uniform Commercial Code
financing statements, legal opinions and corporate authority documents as the
Banks may reasonably request.
(d) If Welcome Home, Inc. ("Welcome Home") has not completed a
public offering of its capital stock and received the proceeds thereof on or
before December 31, 1994, then (i) the Parent shall on such date, transfer all
of its capital stock in Welcome Home to the Borrower, and (ii) Welcome Home
shall become a non-wholly-owned Subsidiary of the Borrower on such date for all
purposes hereof including, without limitation, clauses (a) through (c) of this
Section 8.13.
Section 8.14. Fair Labor Standards Act. The Borrower and each of its
Subsidiaries shall at all times operate its business in compliance with all
material applicable provisions of the Fair Labor Standards Act of 1938, as
amended. None of the inventory of the Borrower or any of its Subsidiaries are
or will be produced by employees of (a) the Borrower or any of its Subsidiaries
or (b) to the best knowledge of the Borrower and each of its Subsidiaries, by
employees of suppliers, who are, in each case, employed in violation of the
minimum wage or maximum hour provisions of the Fair Labor Standards Act (29
U.S.C. Section Section 206 and 207) or any regulations promulgated thereunder,
in each case, as in effect from time to time.
Section 8.15. Further Assurances. The Borrower will, and the Borrower
will cause each of its Subsidiaries to, cooperate with the Banks and the Agent
and execute such further instruments and documents as the Banks or the Agent
shall reasonably request to carry out to their satisfaction the transactions
contemplated by this Credit Agreement and the other Loan Documents.
Section 9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. The Borrower
hereby covenants and agrees that, so long as any Revolving Credit Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Revolving Credit Loans or the Agent has any
obligations to issue, extend or renew any Letters of Credit:
Section 9.1. Restrictions on Indebtedness. The Borrower will not, and
will not permit any of its Subsidiaries to, create, incur, assume, guarantee or
be or remain liable, contingently or otherwise, with respect to any
Indebtedness other than:
(a) Indebtedness to the Banks and the Agent arising under any of
the Loan Documents;
(b) current liabilities of the Borrower or such Subsidiary of the
Borrower incurred in the ordinary course of business not incurred through (i)
the borrowing of money, or (ii) the obtaining of credit, except for credit on
an open account basis customarily extended and in fact extended in connection
with purchases of goods and services in the ordinary course of business;
(c) Indebtedness in respect of taxes, assessments, governmental
charges or levies, reimbursement-type obligations and bonds regarding workers'
compensation claims, and claims for labor, materials and supplies to the extent
that payment therefor shall not at the time be required to be made in
accordance with the provisions of Section 8.8 hereof;
(d) Indebtedness in respect of judgments or awards that have been
in force for less than the applicable period for taking an appeal so long as
either (i) execution is not levied thereunder or (ii) the Borrower or such
Subsidiary shall at the time in good faith be prosecuting an appeal or
proceedings for review and in respect of which a stay of execution shall have
been obtained pending such appeal or review;
(e) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the ordinary
course of business;
(f) Indebtedness of Subsidiaries of the Borrower incurred as a
result of (i) the acquisition of a business or assets (including existing
Indebtedness assumed in connection with such acquisition), (ii) obligations
under Capitalized Leases, (iii) purchase money obligations for property
acquired in the ordinary course of business, (iv) sale-leaseback transactions
permitted under Section 9.6 hereof, or (v) other similar financing
transactions, in an aggregate principal amount of all such Indebtedness under
this clause (f) not to exceed $25,000,000 outstanding at any one time, provided
that after giving effect to the incurrence of any such Indebtedness under this
clause (f) no Event of Default under Section Section 13.1(a), (b) or (c) (only
a result of the failure by the Borrower to comply with any of its covenants set
forth in Section 10 hereof) exists hereunder;
(g) Indebtedness of the Borrower or any Subsidiary of the
Borrower in respect of intercompany loans, advances, obligations or similar
transfers to or among the Borrower or any Subsidiary of the Borrower,
including, without limitation, pursuant to the Intercompany Loan Agreement, the
Tax Sharing Agreements and the Management Agreements, provided that (i) the
Non-Wholly-Owned Guarantors shall only incur Intercompany Advances from the
Borrower (and not from any other Subsidiaries of the Borrower), such
Intercompany Advances must be advanced pursuant to the Intercompany Loan
Agreement and all Intercompany Advances evidenced by notes must be pledged and
assigned to the Agent for the benefit of the Banks and (ii) all Intercompany
Advances advanced by any Non-Wholly-Owned Guarantors to the Borrower shall be
evidenced by notes which expressly prohibit set off against the notes referred
to in subsection (i) above from the Borrower to such Non-Wholly-Owned
Guarantor;
(h) Indebtedness of the Borrower and its Subsidiaries listed on,
and not in excess of the principal amounts and otherwise as described on
Schedule 9.1 attached hereto;
(i) Indebtedness of the Subsidiaries of the Borrower in respect
of operating leases;
(j) Indebtedness (i) of the Borrower to the Parent incurred in
connection with any Distribution permitted under Section 9.4 hereof, provided
that such Indebtedness is evidenced by the Parent Loan Agreement, and provided
further that such Indebtedness is subordinated to the Obligations in a manner
that is satisfactory to the Agent in all respects and (ii) of the Subsidiaries
of the Borrower incurred in connection with any Distribution permitted under
Section 9.4(a) hereof;
(k) Indebtedness in respect of interest rate protection
arrangements and in respect of foreign exchange rate protection arrangements;
(l) Indebtedness of the Borrower or any of its Subsidiaries
incurred in connection with agreements providing for indemnification, purchase
price adjustments and similar obligations in connection with the sale or
disposition of any of their businesses, properties or assets, provided that
such sale or disposition is permitted under the terms of this Credit Agreement;
(m) Indebtedness of the Borrower or any of its Subsidiaries in
respect of Incentive Arrangements;
(n) Indebtedness of the Borrower or any of its Subsidiaries, as
applicable, incurred to refinance and replace Indebtedness of such Person
permitted under clause (f) or clause (h) hereof, provided, that (i) the
principal amount (or committed principal amount) of such refinancing
Indebtedness shall not exceed the outstanding principal amount (or committed
principal amount) of the Indebtedness being refinanced, (ii) the terms of such
refinancing Indebtedness are no more onerous to the Borrower or such
Subsidiary, as applicable, than the terms of the Indebtedness being refinanced,
and (iii) the Majority Banks shall have consented to the incurrence of such
refinancing Indebtedness, such consent not to be unreasonably withheld;
(o) any additional unsecured Indebtedness, provided, that (i)
after giving effect to the incurrence of such Indebtedness on a pro forma
basis, the Borrower's Senior Debt to Consolidated Cash Flow Ratio is less than
2.50 to 1, (ii) the incurrence of such Indebtedness would be permitted under
Section 4.07(a) of the Senior Indenture (as in effect on the Closing Date),
(iii) no Default or Event of Default has occurred and is continuing or would
result therefrom, and (iv) the Borrower delivers to the Agent, on the date of
such incurrence, a certificate signed by a duly authorized officer of the
Borrower and evidence satisfactory to the Agent showing compliance with the
matters set forth in sub clauses (i) through (iii) of this clause (o); and
(p) guaranties by the Borrower and/or any of its Subsidiaries of
Indebtedness of the Borrower and/or any of its Subsidiaries that is otherwise
permitted under this Section 9.1;
(q) Indebtedness of the Borrower and/or any of its Subsidiaries
with respect to performance, surety, statutory, appeal or similar bonds
obtained in the ordinary course of business;
(r) Indebtedness of the Borrower and/or any of its Subsidiaries
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently (except in the case of daylight
overdrafts, which will not be deemed to be inadvertent) drawn against
insufficient funds in the ordinary course of business;
(s) Indebtedness of the Borrower arising under or in respect of
the Assumption Agreement, provided that (i) such Indebtedness, to the extent
assumed by the Borrower after the date hereof, is otherwise permitted under
this Section 9.1, and (ii) the Borrower gives the Agent notice of any such
assumed Indebtedness incurred by the Parent after the date hereof, promptly
after such incurrence; and
(t) unsecured Indebtedness not otherwise permitted hereunder,
provided that the aggregate principal amount of all such Indebtedness does not
exceed $20,000,000 at any time.
Section 9.2. Restrictions on Liens. The Borrower will not, and will not
permit any of its Subsidiaries to, (i) create or incur or suffer to be created
or incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest of any kind upon any of its property or
assets of any character whether now owned or hereafter acquired, or upon the
income or profits therefrom; (ii) transfer any of such property or assets or
the income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; (iii) acquire, or agree or have an option to
acquire, any property or assets upon conditional sale or other title retention
or purchase money security agreement, device or arrangement; (iv) suffer to
exist for a period of more than thirty (30) days after the same shall have been
incurred any Indebtedness or claim or demand against it that if unpaid might by
law or upon bankruptcy or insolvency, or otherwise, be given any priority
whatsoever over its general creditors; or (v) sell, assign, pledge or otherwise
transfer any accounts, contract rights, general intangibles, chattel paper or
instruments, with or without recourse; provided that the Borrower and any
Subsidiary of the Borrower may create or incur or suffer to be created or
incurred or to exist:
(a) liens to secure taxes, assessments and other government charges or
liens on properties to secure claims for labor, material or supplies, in
each case in respect of obligations not overdue or which are being
contested in good faith by appropriate proceedings satisfactory to the
Banks and for which adequate reserves have been established and are
maintained in accordance with generally accepted accounting principles;
(b) deposits or pledges made in connection with, or to secure payment
of, workmen's compensation, unemployment insurance, old age pensions or
other social security obligations, and good faith deposits in connection
with tenders, contracts or leases to which it is a party or deposits to
secure, or in lieu of, surety, penalty or appeal bonds, performance bonds
or other similar obligations;
(c) liens on properties in respect of judgments or awards, the
Indebtedness with respect to which is permitted by Section 9.1(d) hereof;
(d) liens of carriers, warehousemen, mechanics and materialmen, and
other like liens on properties in existence less than 120 days from the
date of creation thereof in respect of obligations not overdue;
(e) encumbrances on Real Estate consisting of easements, rights of way,
zoning restrictions, restrictions on the use of real property and defects
and irregularities in the title thereto, landlord's or lessor's liens
under leases to which the Borrower or a Subsidiary of the Borrower is a
party, and other minor liens or encumbrances none of which in the opinion
of the Borrower interferes materially with the use of the property
affected in the ordinary conduct of the business of the Borrower and its
Subsidiaries, which defects do not individually or in the aggregate have
a materially adverse effect on the business of the Borrower and its
Subsidiaries on a consolidated basis;
(f) liens existing on the date hereof and listed on Schedule 9.2
attached hereto;
(g) liens on assets of Subsidiaries of the Borrower securing
Indebtedness permitted under Section 9.1(f) hereof;
(h) liens in favor of the Agent for the benefit of the Banks and the
Agent under the Loan Documents;
(i) liens on assets sold in sale-leaseback transactions permitted under
Section 9.6 hereof;
(j) liens securing refinancing Indebtedness permitted under Section
9.1(n) hereof, but only to the extent that the Indebtedness so refinanced
was secured, and only covering assets which secured the Indebtedness
being refinanced;
(k) the subordination of certain amounts advanced under the
Intercompany Loan Agreement and permitted under Section 9.1 hereof;
(l) (i) leases entered into by Riverside Book and Bible House,
Incorporated as lessor with respect to its property located at the River
Hills Mall in Iowa Falls, Iowa and (ii) leases entered into by DACCO
Incorporated as lessor with respect to its property located in
Cookeville, Tennessee that is not required for its immediate ongoing
operations; and
(m) liens in respect of (i) Indebtedness permitted under Section
9.1(q) hereof and (ii) Indebtedness permitted under Section 9.1(k) hereof,
provided that the aggregate amount of Indebtedness under Section 9.1(k) hereof
secured pursuant to this Section 9.2(m) does not exceed $2,500,000.
Section 9.3. Restrictions on Investments. The Borrower will not, and
will not permit any of its Subsidiaries to, make or permit to exist or to
remain outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United
States of America that mature within one (1) year from the date of purchase;
(b) demand deposits, certificates of deposit, bankers acceptances
and time deposits of United States banks having total assets in excess of
$500,000,000;
(c) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States of
America or any state thereof that at the time of purchase have been rated and
the ratings for which are not less than "P 1" if rated by Moody's Investors
Service, Inc., and not less than "A 1" if rated by Standard and Poor's
Corporation;
(d) repurchase agreements secured by any one or more of the
foregoing;
(e) shares of any so-called "money market fund" provided that
such fund is registered under the Investment Company Act of 1940, as amended,
has net assets of at least $50,000,000 and has at least eighty-five percent
(85%) of its net assets invested in investments of the types described in
clauses (a), (b) and (c) above;
(f) Investments existing on the date hereof and in amounts not to
exceed the amounts listed on Schedule 9.3 attached hereto;
(g) Investments by the Borrower in Subsidiaries of the Borrower
and by any Subsidiary of the Borrower in its Subsidiaries which are also
Subsidiaries of the Borrower existing on the Closing Date or in any other
Person which concurrently with such Investment becomes a Subsidiary of the
Borrower on such date, and Investments by Subsidiaries of the Borrower in the
Borrower, provided that the Borrower's Investments in Non-Wholly-Owned
Guarantors shall be made pursuant to the Intercompany Loan Agreement and if
evidenced by notes, such notes shall be pledged and assigned to the Agent for
the benefit of the Banks;
(h) Investments consisting of the Guaranties and any guaranties
delivered pursuant to Section 8.13 hereof;
(i) certain Investments by the Borrower and its Subsidiaries in
marketable securities and other negotiable instruments through the William Penn
Funds (including the William Penn Interest Income Fund), provided, however that
such Investments shall not exceed $5,000,000 in the aggregate at any time;
(j) Investments in respect of Incentive Arrangements to the
extent that such Investments are permitted hereunder;
(k) Investments by the Borrower and/or any of its Subsidiaries
made in connection with (i) any Distribution permitted under Section 9.4
hereof, or (ii) any Indebtedness permitted under Section Section 9.1(g), (m),
(p) or (s) hereof;
(l) Investments not exceeding $25,000,000 in the aggregate
outstanding at any time;
(m) other Investments not otherwise permitted hereunder,
provided, that (i) after giving effect to the proposed Investment, the Senior
Debt to Consolidated Cash Flow Ratio is less than 3.75 to 1, (ii) no Default or
Event of Default has occurred and is continuing or would result from making the
proposed Investment and (iii) the Borrower delivers to the Agent, on the date
on which any such Investment is made, a certificate signed by an authorized
officer of the Borrower and evidence satisfactory to the Agent showing
compliance with the matters set forth in this clause (m); and
(n) Investments in the Parent to the extent that a Distribution
of such amount would be permitted under Section 9.4 hereof.
Section 9.4. Distributions; Other Affiliate Payments. (a) Neither the
Borrower nor any of its Subsidiaries will make any Distributions so long as any
Default or Event of Default has occurred or is continuing or would result
therefrom, other than:
(i) scheduled payments of dividends on and redemptions of (A) (x)
the preferred stock of Sate-Lite Manufacturing Company in an aggregate amount
not to exceed $20,000 in any calendar year and (y) the common stock of
Sate-Lite Manufacturing Company in an aggregate amount not to exceed $12,500 in
any calendar year, and (B) the preferred stock of Dura-Line (x) in an aggregate
amount not to exceed $300,000 in any calendar year for dividends and (y) in an
aggregate amount not to exceed $3,750,000 in any calendar year for redemptions
pursuant to the terms of the Dura-Line Agreements;
(ii) Distributions by Subsidiaries of the Borrower to the Borrower
and Distributions by Subsidiaries of Subsidiaries of the Borrower to such
Subsidiaries of the Borrower;
(iii) Distributions and other payments under the Tax Sharing
Agreement to the Parent to permit the Parent to pay income, franchise and other
taxes and governmental levies owed or payable by it;
(iv) payments under the Stock Appreciation Rights Agreements, the
Dura-Line Agreements (without duplication), and the Incentive Arrangements;
(v) director fees of the Parent (not to exceed $250,000 in any
calendar year);
(vi) indemnity payments required by the articles of incorporation,
by-laws, director indemnity agreements and management consulting agreements of
the Parent; and
(vii) filing, registration, reportion, qualification and similar
fees and charges payable or owed by the Parent in respect of the requirements
of the Securities and Exchange Commission, state qualifications to conduct
business and other applicable governmental and regulatory requirements.
(b) Without limiting the foregoing, if an Event of Default under
Section Section 13.1(a), (b) or (c) (only as a result of the failure by the
Borrower to comply with any of its covenants set forth in Section 10 hereof)
has occurred and is continuing, or if an Event of Default under Section Section
13.1(a), (b) or (c) (only as a result of the failure by the Borrower to comply
with any of its covenants set forth in Section 10 hereof) would result from the
payment thereof, the Borrower shall not make any payments under the Management
Consulting Agreement between the Borrower and TJC Management Company (payments
under which shall be expressly subordinated to the Obligations), the Management
Agreement(s) between the Borrower and the Parent, or any similar agreement
relating to the providing of consulting, financial or investment banking
services by any Affiliate to the Borrower or any of its Subsidiaries.
Section 9.5. Merger, Consolidation and Disposition of Assets.
Section 9.5.1. Mergers and Acquisitions. The Borrower will not,
and will not permit any of its Subsidiaries to, become a party to any merger or
consolidation, or agree to or effect any asset acquisition or stock acquisition
unless otherwise permitted under Section Section 9.3 or 9.11 hereof, except the
merger or consolidation of one or more of the Subsidiaries of the Borrower with
and into the Borrower (provided that the Borrower is the survivor of such
merger or consolidation), or the merger or consolidation of two or more
Subsidiaries of the Borrower.
Section 9.5.2. Disposition of Assets. The Borrower will not, and
will not permit any of its Subsidiaries to, become a party to or agree to or
effect any disposition of assets, other than (a) the sale of inventory in the
ordinary course of business, consistent with past practices, (b) the
disposition of obsolete assets which are no longer used or useful in current or
planned business operations of such Person, (c) the sale of assets pursuant to
sale-leaseback transactions permitted under Section 9.6 hereof, (d) sales of
Capital Assets the proceeds of which are reinvested as permitted Capital
Expenditures within 360 days of such sale, (e) the sale of assets by a
Guarantor to a Guarantor, and (f) sales of assets in arms-length transactions
for fair and reasonable value, provided that (i) no Default or Event of Default
shall have occurred and be continuing at the time of such sale and no Default
or Event of Default will exist after giving effect to such sale, (ii) at least
80% of the purchase price for such asset is received in cash and the Net
Proceeds from such sale are applied as provided in Section 2.3(b) hereof, and
(iii) any promissory note or other instrument received by the Borrower or such
Subsidiary in connection with such sale is an Investment permitted under
Section 9.3 hereof, and the Borrower or such Subsidiary, as applicable, has
delivered such promissory note or other instrument to the Agent to be held in
pledge for the benefit of itself and the Banks in accordance with the terms of
the Credit Agreement; (iv) the Borrower shall have delivered to the Agent on
the date of such sale a certificate signed by an authorized officer of the
Borrower and evidence satisfactory to the Agent showing compliance with the
provisions of clauses (i) and (iii) of this Section 9.5.2(f).
Section 9.6. Sale and Leaseback. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any arrangement, directly or
indirectly, whereby the Borrower or any Subsidiary of the Borrower shall sell
or transfer any property owned by it in order then or thereafter to lease such
property or lease other property that the Borrower or any Subsidiary of the
Borrower intends to use for substantially the same purpose as the property
being sold or transferred, provided that the Borrower or any Subsidiary of the
Borrower may enter into such sale-leaseback transactions to the extent that the
Indebtedness incurred in connection with such transactions are permitted under
Section 9.1(f) hereof or Section 9.1(h) hereof to the extent described in item
15 of Schedule 9.1 attached hereto.
Section 9.7. Compliance with Environmental Laws. The Borrower will not,
and the Borrower will not permit any of its Subsidiaries to, (a) use any of the
Real Estate or any portion thereof for the handling, processing, storage or
disposal of Hazardous Substances in violation of any Environmental Law the
noncompliance with which would have a material adverse effect on the business,
assets or financial condition of the Parent or the Borrower and its
Subsidiaries considered as a whole; (b) cause or permit to be located on any of
the Real Estate any underground tank or other underground storage receptacle
for Hazardous Substances in violation of any Environmental Law the
noncompliance with which would have a material adverse effect on the business,
assets or financial condition of the Parent or the Borrower and its
Subsidiaries considered as a whole; (c) generate any Hazardous Substances on
any of the Real Estate in violation of any Environmental Law the noncompliance
with which would have a material adverse effect on the business, assets or
financial condition of the Parent or the Borrower and its Subsidiaries
considered as a whole; (d) conduct any activity at any Real Estate or use any
Real Estate in any manner so as to cause a release (i.e. releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, disposing or dumping) or threatened release of Hazardous
Substances on, upon or into the Real Estate, or (e) otherwise conduct any
activity at any Real Estate or use any Real Estate in any manner that would
violate any Environmental Law or bring such Real Estate in violation of any
Environmental Law, in each case if such violation would have a material adverse
effect on the business, assets or financial condition of the Parent or the
Borrower and its Subsidiaries, taken as a whole..
Section 9.8. Employee Benefit Plans. Neither the Borrower nor any ERISA
Affiliate will:
(a) engage in any "prohibited transaction" within the meaning of
Section 406 of ERISA or Section 4975 of the Code which could result in a
material liability for the Parent, the Borrower or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated
funding deficiency", as such term is defined in Section 302 of ERISA, whether
or not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an
extent which, or terminate any Guaranteed Pension Plan in a manner which, could
result in the imposition of a lien or encumbrance on the assets of the Parent,
the Borrower or any of its Subsidiaries pursuant to Section 302(f) or Section
4068 of ERISA; or
(d) permit or take any action which would result in the aggregate
benefit liabilities (within the meaning of Section 4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of the aggregate assets of any
such Plan with assets in excess of benefit liabilities, by more than the amount
set forth in Section 7.16.3 hereof.
Section 9.9. Change in Terms of Capital Stock. The Borrower shall not
and shall not permit any of its Subsidiaries to effect or permit any change in
or amendment to any document or instrument pertaining to the terms of such
Person's capital stock without the written consent of the Banks.
Section 9.10. Hostile Takeovers. The Borrower will not and will not
permit its Subsidiaries to acquire or attempt to acquire, whether by stock
acquisition, purchase of assets, merger, consolidation or otherwise, any
assets, stock or business of any entities in any transaction that has not been
approved by the board of directors of the entity whose stock, assets or
business is or are to be acquired; provided, however, that the foregoing shall
not prohibit any purchase in the open market of not more than 5% of the
fully-diluted outstanding capital stock of any corporation made in accordance
with the provisions of this Credit Agreement.
Section 9.11. Limitation on Transactions. The Borrower will not and
will not permit any of its Subsidiaries to enter into any acquisition
transaction, including, but not limited to, any asset purchase, stock purchase,
merger, consolidation, noncompetition agreement or any similar transaction,
involving an aggregate Investment or other outlay of funds or assumption of
debt or other consideration in excess of $25,000,000 in any single transaction.
Payments which are contingent upon post-closing performance, including, without
limitation, as set forth in any Incentive Arrangement delivered in connection
with any such acquisition transaction, shall be excluded from this Section
9.11.
Section 9.12. Fiscal Year. The Borrower will not change the date of the
end of its fiscal year from that set forth in Section 7.21 hereof.
Section 10. FINANCIAL COVENANTS OF THE BORROWER. The Borrower hereby
covenants and agrees that, so long as any Revolving Credit Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Revolving Credit Loans or the Agent has any
obligation to issue, extend or renew any Letters of Credit:
Section 10.1. Cash Flow Coverage Ratio. As at the end of any fiscal
quarter of the Parent ending during the periods specified in the table set
forth below, the Cash Flow Coverage Ratio of the Parent and its Subsidiaries,
calculated on a Pro Forma Basis for the period of the four consecutive fiscal
quarters then ended, shall not be less than the ratio set forth opposite such
period in such table:
Period Ratio
Closing Date - 12/30/94 1.20 to 1.00
12/31/94 - 12/30/95 1.25 to 1.00
12/31/95 - 12/30/96 1.40 to 1.00
12/31/96 - 12/30/97 1.45 to 1.00
12/31/97 - 12/30/98 1.50 to 1.00
12/31/98 and thereafter 1.55 to 1.00
Section 10.2. Debt Service Coverage Ratio. As at the end of any fiscal
quarter of the Parent ending during the periods specified in the table set
forth below, the Debt Service Coverage Ratio of the Parent and its
Subsidiaries, shall not, for the period of the four consecutive fiscal quarters
then ended, be less than the ratio set forth opposite such period in such
table:
Period Ratio
Closing Date - 12/30/94 0.95 to 1.00
12/31/94 - 12/30/95 1.10 to 1.00
12/31/95 - 12/30/96 1.40 to 1.00
12/31/96 - 12/30/97 1.50 to 1.00
12/31/97 - 12/30/98 1.50 to 1.00
12/31/98 and thereafter 1.50 to 1.00
Section 10.3. Minimum Net Worth. The Consolidated Net Worth of the
Parent and its Subsidiaries, calculated on a Pro Forma Basis, shall at no time
during the periods set forth below be less than the amount set forth opposite
such period.
Period Amount
Closing Date - 12/30/94 $ 40,000,000
12/31/94 - 12/30/95 $ 45,000,000
12/31/95 - 12/30/96 $ 52,500,000
12/31/96 - 12/30/97 $ 60,000,000
12/31/97 - 12/30/98 $ 70,000,000
12/31/98 and thereafter $ 82,500,000
Section 11. CLOSING CONDITIONS. The obligations of the Banks to make
the initial Revolving Credit Loans and of the Agent to issue any initial
Letters of Credit shall be subject to the satisfaction of the following
conditions precedent on or prior to June 30, 1994:
Section 11.1. Loan Documents. Each of the Loan Documents shall have
been duly executed and delivered by the respective parties thereto, shall be in
full force and effect and shall be in form and substance satisfactory to each
of the Banks. Each Bank shall have received a fully executed copy of each such
document.
Section 11.2. Certified Copies of Charter Documents. Each of the Banks
shall have received from the Parent, the Borrower and each of the Guarantors a
copy, certified by a duly authorized officer of such Person to be true and
complete on the Closing Date, of each of (a) its charter or other incorporation
documents as in effect on such date of certification, and (b) its by-laws as in
effect on such date.
Section 11.3. Corporate Action. All corporate action necessary for the
valid execution, delivery and performance by the Parent, the Borrower and each
of the Guarantors of this Credit Agreement and the other Loan Documents to
which it is or is to become a party shall have been duly and effectively taken,
and evidence thereof satisfactory to the Banks shall have been provided to each
of the Banks.
Section 11.4. Incumbency Certificate. Each of the Banks shall have
received from the Parent, the Borrower and each of the Guarantors an incumbency
certificate, dated as of the Closing Date, signed by a duly authorized officer
of such Person, and giving the name and bearing a specimen signature of each
individual who shall be authorized: (a) to sign, in the name and on behalf of
each such Person, each of the Loan Documents to which such Person is or is to
become a party; (b) in the case of the Borrower, to make Loan Requests and
Conversion Requests and to apply for Letters of Credit; and (c) to give notices
and to take other action on its behalf under the Loan Documents.
Section 11.5. Validity of Liens. The Security Documents shall be
effective to create in favor of the Agent a legal, valid and enforceable first
(except for Permitted Liens entitled to priority under applicable law) security
interest in and lien upon the Collateral. All filings, recordings, deliveries
of instruments and other actions necessary or desirable in the opinion of the
Agent to protect and preserve such security interests shall have been duly
effected. The Agent shall have received evidence thereof in form and substance
satisfactory to the Agent.
Section 11.6. UCC Search Results. The Agent shall have received from
the Borrower and each of the Guarantors the results of UCC searches with
respect to the Collateral, indicating no liens other than Permitted Liens and
otherwise in form and substance satisfactory to the Agent.
Section 11.7. Insurance. The Agent shall have received a schedule
outlining all of the Borrower's and its Subsidiaries insurance coverage,
including policy limits and deductibles.
Section 11.8. Opinions of Counsel. Each of the Banks and the Agent
shall have received favorable legal opinions addressed to the Banks and the
Agent, dated as of the Closing Date, in form and substance satisfactory to the
Banks and the Agent, from:
(a) Smith, Gill, Fisher & Butts, special counsel to the Parent,
the Borrower and the Guarantors; and
(b) Mayer, Brown & Platt, special counsel to the Parent, the
Borrower and the Guarantors.
Section 11.9. Payment of Closing Fee. The Borrower shall have
paid to the Banks the closing fee payable pursuant to the Fee Letter.
Section 11.10. Consents and Approvals. The Banks shall have received
waivers or consents from any source reasonably requested by them, in form and
substance satisfactory to the Banks, in connection with the transactions
contemplated by this Credit Agreement.
Section 11.11. Projections. The projections of the annual operating
budgets of the Parent and its Subsidiaries on a consolidated and consolidating
basis, balance sheets and cash flow statements for the 1994 to 1998 fiscal
years, shall have been delivered to each Bank. The projections have been
prepared on the basis of reasonable assumptions and reflect the reasonable
estimates of the Borrower of the results of operations (in the aggregate) and
other information projected therein.
Section 12. CONDITIONS TO ALL BORROWINGS. The obligations of the Banks
to make any Revolving Credit Loan, including the Revolving Credit Loans, and
of the Agent to issue, extend or renew any Letter of Credit, in each case
whether on or after the Closing Date, shall also be subject to the satisfaction
of the following conditions precedent:
Section 12.1. Representations True; No Event of Default. Each of the
representations and warranties of any of the Parent, the Borrower and the
Guarantors contained in this Credit Agreement, the other Loan Documents or in
any document or instrument delivered pursuant to or in connection with this
Credit Agreement shall be true as of the date as of which they were made and
shall also be true at and as of the time of the making of such Revolving Credit
Loan or the issuance, extension or renewal of such Letter of Credit, with the
same effect as if made at and as of that time (except to the extent of changes
resulting from transactions contemplated or permitted by this Credit Agreement
and the other Loan Documents and changes occurring in the ordinary course of
business that singly or in the aggregate are not materially adverse, and to the
extent that such representations and warranties relate expressly to an earlier
date) and no Default or Event of Default shall have occurred and be continuing.
Section 12.2. No Legal Impediment. No change shall have occurred in any
law or regulations thereunder or interpretations thereof that in the reasonable
opinion of any Bank would make it illegal for such Bank to make such Revolving
Credit Loan or to participate in the issuance, extension or renewal of such
Letter of Credit or in the reasonable opinion of the Agent would make it
illegal for the Agent to issue, extend or renew such Letter of Credit.
Section 12.3. Governmental Regulation. Each Bank shall have received
such statements in substance and form reasonably satisfactory to such Bank as
such Bank shall require for the purpose of compliance with any applicable
regulations of the Comptroller of the Currency or the Board of Governors of the
Federal Reserve System.
Section 12.4. Proceedings and Documents. All proceedings in connection
with the transactions contemplated by this Credit Agreement, the other Loan
Documents and all other documents incident thereto shall be satisfactory in
substance and in form to the Banks and to the Agent and the Agent's Special
Counsel, and the Banks, the Agent and such counsel shall have received all
information and such counterpart originals or certified or other copies of such
documents as the Agent may reasonably request.
Section 13. EVENTS OF DEFAULT; ACCELERATION; ETC.
Section 13.1. Events of Default and Acceleration. If any of the
following events ("Events of Default" or, if the giving of notice or the lapse
of time or both is required, then, prior to such notice or lapse of time,
"Defaults") shall occur:
(a) the Borrower shall fail to pay any principal of the Revolving
Credit Loans or any Reimbursement Obligation when the same shall become due and
payable, whether at the stated date of maturity or any accelerated date of
maturity or at any other date fixed for payment;
(b) the Borrower shall fail to pay any interest on the Revolving
Credit Loans, the Commitment Fee, any Letter of Credit Fee, the Agent's Fee, or
other sums due hereunder or under any of the other Loan Documents, when the
same shall become due and payable, whether at the stated date of maturity or
any accelerated date of maturity or at any other date fixed for payment, and
such failure shall continue for five (5) days;
(c) the Borrower shall fail to comply with any of its covenants
contained in the first sentence of Section 8.6, Section Section 8.9, 8.12,
8.13, 9.1 through 9.6, 9.9, 9.10 through 9.12 or 10 or the Parent shall fail to
comply with any of its covenants contained in Section 8 of the Parent Guaranty;
(d) the Parent, the Borrower or any of the Guarantors shall fail
to perform any term, covenant or agreement contained herein or in any of the
other Loan Documents (other than those specified elsewhere in this Section
13.1) for thirty (30) days after written notice of such failure has been given
to the Borrower by the Agent;
(e) any representation or warranty of the Parent, the Borrower or
any of the Guarantors in this Credit Agreement or any of the other Loan
Documents or in any other document or instrument delivered pursuant to or in
connection with this Credit Agreement shall prove to have been false in any
material respect upon the date when made or deemed to have been made or
repeated;
(f) the Parent, the Borrower or any of its Subsidiaries shall (i)
fail to pay at maturity, or within any applicable period of grace, any
obligation for borrowed money or credit received or in respect of any
Capitalized Leases in an aggregate amount in excess of $15,000,000, or (ii)
fail to observe or perform any material term, covenant or agreement contained
in any agreement by which it is bound, evidencing or securing borrowed money or
credit received or in respect of any Capitalized Leases in an aggregate amount
in excess of $15,000,000 for such period of time as would permit (assuming the
giving of appropriate notice if required) the holder or holders thereof or of
any obligations issued thereunder to accelerate the maturity thereof;
(g) the Parent, the Borrower or any of its Subsidiaries shall
make an assignment for the benefit of creditors, or admit in writing its
inability to pay or generally fail to pay its debts as they mature or become
due, or shall petition or apply for the appointment of a trustee or other
custodian, liquidator or receiver of such Person or of any substantial part of
the assets of such Person or shall commence any case or other proceeding
relating to such Person under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar law of
any jurisdiction, now or hereafter in effect, or shall take any action to
authorize or in furtherance of any of the foregoing, or if any such petition or
application shall be filed or any such case or other proceeding shall be
commenced against the Parent, the Borrower or any of its Subsidiaries and such
Person shall indicate its approval thereof, consent thereto or acquiescence
therein;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Parent, the Borrower or
any of its Subsidiaries bankrupt or insolvent, or approving a petition in any
such case or other proceeding, or a decree or order for relief is entered in
respect of any such Person in an involuntary case under federal bankruptcy laws
as now or hereafter constituted and such case or proceeding remains undismissed
for sixty (60) days;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any final
judgment against the Parent, the Borrower or any of its Subsidiaries that, with
other outstanding final judgments, undischarged, against the such Persons
exceeds in the aggregate $2,000,000;
(j) if any of the Loan Documents shall be cancelled, terminated,
revoked or rescinded or the Agent's security interests or liens in any
substantial portion of the Collateral shall cease to be perfected, or shall
cease to have the priority contemplated by the Security Documents, in each case
otherwise than in accordance with the terms thereof or with the express prior
written agreement, consent or approval of the Banks, or any action at law, suit
or in equity or other legal proceeding to cancel, revoke or rescind any of the
Loan Documents shall be commenced by or on behalf of the Parent, the Borrower
or any of the Guarantors party thereto or any of their respective stockholders,
or any court or any other governmental or regulatory authority or agency of
competent jurisdiction shall make a determination that, or issue a judgment,
order, decree or ruling to the effect that, any one or more of the Loan
Documents is illegal, invalid or unenforceable in accordance with the terms
thereof, or if any Guarantor or the Parent shall deny that it has any further
or continuing liability under such Person's Guaranty;
(k) with respect to any Guaranteed Pension Plan, an ERISA
Reportable Event shall have occurred and the Majority Banks shall have
determined in their reasonable discretion that such event reasonably could be
expected to result in liability of the Parent or the Borrower or any of its
Subsidiaries to the PBGC or such Guaranteed Pension Plan in an aggregate amount
exceeding $5,000,000 and such event in the circumstances occurring reasonably
could constitute grounds for the termination of such Guaranteed Pension Plan by
the PBGC or for the appointment by the appropriate United States District Court
of a trustee to administer such Guaranteed Pension Plan; or a trustee shall
have been appointed by the United States District Court to administer such
Plan; or the PBGC shall have instituted proceedings to terminate such
Guaranteed Pension Plan;
(l) the Jordan Group, shall, at any time, legally or
beneficially, own less than 51% of the outstanding Voting Stock of the Parent,
as adjusted pursuant to any stock split, stock dividend or recapitalization or
reclassification of the capital of the Parent; or
(m) the Parent shall at any time, legally or beneficially, own
less than 100% of the outstanding capital stock of the Borrower, as adjusted
pursuant to any stock split, stock divided or recapitalization or
reclassification of the capital of the Borrower;
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Borrower declare all amounts owing with respect to this Credit Agreement,
the Notes and the other Loan Documents and all Reimbursement Obligations to be,
and they shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower; provided that in the event of any
Event of Default specified in Section Section 13.1(g) or 13.1(h) hereof, all
such amounts shall become immediately due and payable automatically and without
any requirement of notice from the Agent or any Bank.
Section 13.2. Termination of Commitments. If any one or more of the
Events of Default specified in Section 13.1(g) or Section 13.1(h) hereof shall
occur, any unused portion of the credit hereunder shall forthwith terminate and
each of the Banks shall be relieved of all further obligations to make
Revolving Credit Loans to the Borrower and the Agent shall be relieved of all
further obligations to issue, extend or renew Letters of Credit. If any other
Event of Default shall have occurred and be continuing, the Agent may and, upon
the request of the Majority Banks, shall, by notice to the Borrower, terminate
the unused portion of the credit hereunder, and upon such notice being given
such unused portion of the credit hereunder shall terminate immediately and
each of the Banks shall be relieved of all further obligations to make
Revolving Credit Loans and the Agent shall be relieved of all further
obligations to issue, extend or renew Letters of Credit. No termination of the
credit hereunder shall relieve the Parent, the Borrower or any of the
Guarantors of any of the Obligations.
Section 13.3. Remedies. In case any one or more of the Events of
Default shall have occurred and be continuing, and whether or not the Banks
shall have accelerated the maturity of the Revolving Credit Loans pursuant to
Section 13.1 hereof, each Bank, if owed any amount with respect to the
Revolving Credit Loans or the Reimbursement Obligations, may proceed to protect
and enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Credit Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations to such Bank are evidenced,
including as permitted by applicable law the obtaining of the ex parte
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Bank. No remedy herein conferred upon any
Bank or the Agent or the holder of any Note or purchaser of any Letter of
Credit Participation is intended to be exclusive of any other remedy and each
and every remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute or any other provision of law.
Section 13.4. Distribution of Collateral Proceeds. In the event that,
following the occurrence or during the continuance of any Default or Event of
Default, the Agent or any Bank, as the case may be, receives any monies in
connection with the enforcement of any the Security Documents, or otherwise
with respect to the realization upon any of the Collateral, such monies shall
be distributed for application as follows:
(a) first, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all reasonable costs, expenses,
disbursements and losses which shall have been incurred or sustained by the
Agent in connection with the collection of such monies by the Agent, for the
exercise, protection or enforcement by the Agent of all or any of the rights,
remedies, powers and privileges of the Agent under this Credit Agreement or any
of the other Loan Documents or in respect of the Collateral or in support of
any provision of adequate indemnity to the Agent against any taxes or liens
which by law shall have, or may have, priority over the rights of the Agent to
such monies;
(b) second, to all other Obligations in such order or preference
as the Majority Banks may determine; provided, however, that distributions in
respect of such obligations shall be made (i) pari passu among Obligations with
respect to the Agent's Fee payable pursuant to Section 5.2 hereof and all other
Obligations and (ii) Obligations owing to the Banks with respect to each type
of Obligation such as interest, principal, fees and expenses, shall be made
among the Banks pro rata; and provided, further, that the Agent may in its
discretion make proper allowance to take into account any Obligations not then
due and payable;
(c) third, upon payment and satisfaction in full or other
provisions satisfactory to the Banks and the Agent for payment in full of all
of the Obligations, to the payment of any obligations required to be paid
pursuant to Section 9-504(1)(c) of the Uniform Commercial Code of the
Commonwealth of Massachusetts; and
(d) fourth, the excess, if any, shall be returned to the Borrower
or to such other Persons as are entitled thereto.
Section 14. SETOFF. Regardless of the adequacy of any collateral,
during the continuance of any Event of Default, any deposits or other sums
credited by or due from any of the Banks to the Borrower and any securities or
other property of the Borrower in the possession of such Bank may be applied to
or set off by such Bank against the payment of Obligations and any and all
other liabilities, direct, or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, of the Borrower to such Bank.
Each of the Banks agrees with each other Bank that (a) if an amount to be set
off is to be applied to Indebtedness of the Borrower to such Bank, other than
Indebtedness evidenced by the Notes held by such Bank or constituting
Reimbursement Obligations owed to such Bank, such amount shall be applied
ratably to such other Indebtedness and to the Indebtedness evidenced by all
such Notes held by such Bank or constituting Reimbursement Obligations owed to
such Bank, and (b) if such Bank shall receive from the Borrower, whether by
voluntary payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Notes held by, or constituting
Reimbursement Obligations owed to, such Bank by proceedings against the
Borrower at law or in equity or by proof thereof in bankruptcy, reorganization,
liquidation, receivership or similar proceedings, or otherwise, and shall
retain and apply to the payment of the Note or Notes held by, or Reimbursement
Obligations owed to, such Bank any amount in excess of its ratable portion of
the payments received by all of the Banks with respect to the Notes held by,
and Reimbursement Obligations owed to, all of the Banks, such Bank will make
such disposition and arrangements with the other Banks with respect to such
excess, either by way of distribution, pro tanto assignment of claims,
subrogation or otherwise as shall result in each Bank receiving in respect of
the Notes held by it or Reimbursement Obligations owed it, its proportionate
payment as contemplated by this Credit Agreement; provided that if all or any
part of such excess payment is thereafter recovered from such Bank, such
disposition and arrangements shall be rescinded and the amount restored to the
extent of such recovery, but without interest.
Section 15. THE AGENT.
Section 15.1. Authorization. The Agent is authorized to take such
action on behalf of each of the Banks and to exercise all such powers as are
hereunder and under any of the other Loan Documents and any related documents
delegated to the Agent, together with such powers as are reasonably incident
thereto, provided that no duties or responsibilities not expressly assumed
herein or therein shall be implied to have been assumed by the Agent. The
relationship between the Agent and the Banks is and shall be that of agent and
principal only, and nothing contained in this Credit Agreement or any of the
other Loan Documents shall be construed to constitute the Agent as a trustee
for any Bank.
Section 15.2. Employees and Agents. The Agent may exercise its powers
and execute its duties by or through employees or agents and shall be entitled
to take, and to rely on, advice of counsel concerning all matters pertaining to
its rights and duties under this Credit Agreement and the other Loan Documents.
The Agent may utilize the services of such Persons as the Agent in its sole
discretion may reasonably determine, and all reasonable fees and expenses of
any such Persons shall be paid by the Borrower.
Section 15.3. No Liability. Neither the Agent nor any of its
shareholders, directors, officers or employees nor any other Person assisting
them in their duties nor any agent or employee thereof, shall be liable for any
waiver, consent or approval given or any action taken, or omitted to be taken,
in good faith by it or them hereunder or under any of the other Loan Documents,
or in connection herewith or therewith, or be responsible for the consequences
of any oversight or error of judgment whatsoever, except that the Agent or
such other Person, as the case may be, may be liable for losses due to its
willful misconduct or gross negligence.
Section 15.4. No Representations. The Agent shall not be responsible
for the execution or validity or enforceability of this Credit Agreement, the
Notes, the Letters of Credit, any of the other Loan Documents or any instrument
at any time constituting, or intended to constitute, collateral security for
the Notes, or for the value of any such collateral security or for the
validity, enforceability or collectability of any such amounts owing with
respect to the Notes, or for any recitals or statements, warranties or
representations made herein or in any of the other Loan Documents or in any
certificate or instrument hereafter furnished to it by or on behalf of the
Parent, the Borrower or any of its Subsidiaries, or be bound to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
covenants or agreements herein or in any instrument at any time constituting,
or intended to constitute, collateral security for the Notes or to inspect any
of the properties, books or records of the Parent, the Borrower or any of its
Subsidiaries. The Agent shall not be bound to ascertain whether any notice,
consent, waiver or request delivered to it by the Borrower or any holder of any
of the Notes shall have been duly authorized or is true, accurate and complete.
The Agent has not made nor does it now make any representations or warranties,
express or implied, nor does it assume any liability to the Banks, with respect
to the credit worthiness or financial condition of the Parent, the Borrower or
any of its Subsidiaries. Each Bank acknowledges that it has, independently and
without reliance upon the Agent or any other Bank, and based upon such
information and documents as it has deemed appropriate, made its own credit
analysis and decision to enter into this Credit Agreement.
Section 15.5. Payments.
Section 15.5.1. Payments to Agent. A payment by the Borrower to
the Agent hereunder or any of the other Loan Documents for the account of any
Bank shall constitute a payment to such Bank. The Agent agrees promptly to
distribute to each Bank such Bank's pro rata share of payments received by the
Agent for the account of the Banks except as otherwise expressly provided
herein or in any of the other Loan Documents.
Section 15.5.2. Distribution by Agent. If in the opinion of the
Agent the distribution of any amount received by it in such capacity hereunder,
under the Notes or under any of the other Loan Documents might involve it in
liability, it may refrain from making distribution until its right to make
distribution shall have been adjudicated by a court of competent jurisdiction.
If a court of competent jurisdiction shall adjudge that any amount received and
distributed by the Agent is to be repaid, each Person to whom any such
distribution shall have been made shall either repay to the Agent its
proportionate share of the amount so adjudged to be repaid or shall pay over
the same in such manner and to such Persons as shall be determined by such
court.
Section 15.5.3. Delinquent Banks. Notwithstanding anything to the
contrary contained in this Credit Agreement or any of the other Loan Documents,
any Bank that fails (i) to make available to the Agent its pro rata share of
any Revolving Credit Loan or to purchase any Letter of Credit Participation or
(ii) to comply with the provisions of Section 14 hereof with respect to making
dispositions and arrangements with the other Banks, where such Bank's share of
any payment received, whether by setoff or otherwise, is in excess of its pro
rata share of such payments due and payable to all of the Banks, in each case
as, when and to the full extent required by the provisions of this Credit
Agreement, shall be deemed delinquent (a "Delinquent Bank") and shall be deemed
a Delinquent Bank until such time as such delinquency is satisfied. A
Delinquent Bank shall be deemed to have assigned any and all payments due to it
from the Borrower, whether on account of outstanding Revolving Credit Loans,
Unpaid Reimbursement Obligations, interest, fees or otherwise, to the remaining
nondelinquent Banks for application to, and reduction of, their respective pro
rata shares of all outstanding Revolving Credit Loans and Unpaid Reimbursement
Obligations. The Delinquent Bank hereby authorizes the Agent to distribute
such payments to the nondelinquent Banks in proportion to their respective pro
rata shares of all outstanding Revolving Credit Loans and Unpaid Reimbursement
Obligations. A Delinquent Bank shall be deemed to have satisfied in full a
delinquency when and if, as a result of application of the assigned payments to
all outstanding Revolving Credit Loans and Unpaid Reimbursement Obligations of
the nondelinquent Banks, the Banks' respective pro rata shares of all
outstanding Revolving Credit Loans and Unpaid Reimbursement Obligations have
returned to those in effect immediately prior to such delinquency and without
giving effect to the nonpayment causing such delinquency.
Section 15.6. Holders of Notes. The Agent may deem and treat the payee
of any Note or the purchaser of any Letter of Credit Participation as the
absolute owner or purchaser thereof for all purposes hereof until it shall have
been furnished in writing with a different name by such payee or by a
subsequent holder, assignee or transferee.
Section 15.7. Indemnity. The Banks ratably agree hereby to indemnify
and hold harmless the Agent from and against any and all claims, actions and
suits (whether groundless or otherwise), losses, damages, costs, expenses
(including any expenses for which the Agent has not been reimbursed by the
Borrower as required by Section 16 hereof), and liabilities of every nature and
character arising out of or related to this Credit Agreement, the Notes, or any
of the other Loan Documents or the transactions contemplated or evidenced
hereby or thereby, or the Agent's actions taken hereunder or thereunder, except
to the extent that any of the same shall be directly caused by the Agent's
willful misconduct or gross negligence.
Section 15.8. Agent as Bank. In its individual capacity, FNBB shall
have the same obligations and the same rights, powers and privileges in respect
to its Commitment and the Revolving Credit Loans made by it, and as the holder
of any of the Notes and as the purchaser of any Letter of Credit
Participations, as it would have were it not also the Agent.
Section 15.9. Resignation. The Agent may resign at any time by giving
sixty (60) days' prior written notice thereof to the Banks and the Borrower.
Upon any such resignation, the Majority Banks shall have the right to appoint a
successor Agent. Unless a Default or Event of Default shall have occurred and
be continuing, such successor Agent shall be reasonably acceptable to the
Borrower. If no successor Agent shall have been so appointed by the Majority
Banks and shall have accepted such appointment within thirty (30) days after
the retiring Agent's giving of notice of resignation, then the retiring Agent
may, on behalf of the Banks, appoint a successor Agent, which shall be a
financial institution having a rating of not less than A or its equivalent by
Standard & Poor's Corporation. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation, the provisions
of this Credit Agreement and the other Loan Documents shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as Agent.
Section 15.10. Notification of Defaults and Events of Default. Each
Bank hereby agrees that, upon learning of the existence of a Default or an
Event of Default, it shall promptly notify the Agent thereof. The Agent hereby
agrees that upon receipt of any notice under this Section 15.10 it shall
promptly notify the other Banks of the existence of such Default or Event of
Default.
Section 15.11. Duties in the Case of Enforcement. In case one of more
Events of Default have occurred and shall be continuing, and whether or not
acceleration of the Obligations shall have occurred, the Agent shall, if (a) so
requested by the Majority Banks and (b) the Banks have provided to the Agent
such additional indemnities and assurances against expenses and liabilities as
the Agent may reasonably request, proceed to enforce the provisions of the
Security Documents authorizing the sale or other disposition of all or any part
of the Collateral and exercise all or any such other legal and equitable and
other rights or remedies as it may have in respect of such Collateral. The
Majority Banks may direct the Agent in writing as to the method and the extent
of any such sale or other disposition, the Banks hereby agreeing to indemnify
and hold the Agent, harmless from all liabilities incurred in respect of all
actions taken or omitted in accordance with such directions, provided that the
Agent need not comply with any such direction to the extent that the Agent
reasonably believes the Agent's compliance with such direction to be unlawful
or commercially unreasonable in any applicable jurisdiction.
Section 16. EXPENSES. Whether or not the transactions contemplated
hereby shall be consummated, the Borrower, hereby promises to pay (a) the cost
of (i) reproducing this Credit Agreement and other instruments mentioned herein
and (ii) any taxes (including any interest and penalties in respect thereof),
filing fees or recording fees or taxes payable by any Bank (other than taxes
based upon such Bank's net income or profits) on or with respect to the
transactions contemplated by this Credit Agreement or the other Loan Documents
(the Borrower hereby agreeing to indemnify each Bank with respect thereto); (b)
the documented fees, expenses and disbursements of the Agent's Special Counsel
incurred in connection with the preparation of this Credit Agreement and other
instruments mentioned herein, each closing hereunder, amendments,
modifications, approvals, consents or waivers hereto or hereunder and the
syndication and the termination hereof; (c) all reasonable fees, expenses and
disbursements incurred by FNBB in connection with the syndication of its
Commitment hereunder, provided that the Borrower shall not bear the costs of
syndication hereunder which are in excess of $5,000; and (d) all out-of-pocket
expenses (including reasonable attorneys, fees and costs) incurred by any Bank
or the Agent in connection with (i) the enforcement of this Credit Agreement
the Notes and the other Loan Documents against the Parent, the Borrower or any
Guarantor or the administration thereof after the occurrence and during the
continuance of a Default or Event of Default and (ii) in connection with any
litigation, proceeding or dispute whether arising hereunder or under the other
Loan Documents or arising out of the transactions contemplated hereby or
thereby. The covenants of this Section 16 shall survive payment or
satisfaction of all other Obligations.
Section 17. INDEMNIFICATION. The Borrower further agrees to indemnify
and hold harmless the Agent and the Banks as well as each such Person's
shareholders, directors, agents, officers, Subsidiaries and affiliates, from
and against all damages, losses, settlement payments, obligations, liabilities,
claims, actions or causes of action, and costs and expenses incurred, suffered,
sustained or required to be paid by an indemnified party by reason of or
resulting from the transactions contemplated hereby, except any of the
foregoing which result from the gross negligence or willful misconduct of the
indemnified party. In any investigation, proceeding or litigation, or the
preparation therefor, each Bank and the Agent shall be entitled to select its
own counsel and, in addition to the foregoing indemnity, the Borrower agrees to
pay promptly the fees and expenses of such counsel. If, and to the extent that
the obligations of the Borrower under this Section 17 are unenforceable for any
reason, the Borrower hereby agrees to make the maximum contribution to the
payment in satisfaction of such obligations which is permissible under
applicable law. The covenants contained in this Section 17 shall survive
payment or satisfaction in full of all other Obligations.
Section 18. SURVIVAL OF COVENANTS. All covenants, agreements,
representations and warranties made herein, in the Notes, in any of the other
Loan Documents or in any documents or other papers delivered by or on behalf of
the Parent, the Borrower or any of its Subsidiaries pursuant hereto shall be
deemed to have been relied upon by the Banks and the Agent, notwithstanding any
investigation heretofore or hereafter made by any of them, and shall survive
the making by the Banks of any of the Revolving Credit Loans and the issuance,
extension or renewal of any Letters of Credit, as herein contemplated, and
shall continue in full force and effect so long as any Letter of Credit or any
amount due under this Credit Agreement or the Notes or any of the other Loan
Documents remains outstanding or any Bank has any obligation to make any
Revolving Credit Loans or the Agent has any obligation to issue, extend or
renew any Letter of Credit, and for such further time as may be otherwise
expressly specified in this Credit Agreement. All statements contained in any
certificate or other paper delivered to any Bank or the Agent at any time by or
on behalf of the Borrower or any of its Subsidiaries pursuant hereto or in
connection with the transactions contemplated hereby shall constitute
representations and warranties by the Borrower or such Subsidiary hereunder.
Section 19. ASSIGNMENTS AND PARTICIPATIONS.
Section 19.1. Conditions to Assignment by the Banks. Except as provided
herein, any Bank may assign to one or more Eligible Assignees all or a portion
of its interests, rights and obligations under this Credit Agreement (including
all or a portion of its Commitment Percentage and Commitment and the same
portion of the Revolving Credit Loans at the time owing to it, the Note held by
it and its participating interest in the risk relating to any Letters of
Credit); provided that (a) each such assignment shall be of a constant, and not
a varying, percentage of all of such Bank's rights and obligations under this
Credit Agreement, (b) each assignment shall be in an amount no less than
$5,000,000, or a larger integral multiple of $1,000,000, and (c) and the
parties to such assignment shall execute and deliver to the Agent, for
recording in the Register, an Assignment and Acceptance, substantially in the
form of Exhibit H attached hereto (an "Assignment and Acceptance"), together
with any Notes subject to such assignment. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least five (5)
Business Days after the execution thereof, (i) the assignee thereunder shall,
upon payment to the Agent of the registration fee referred to in Section 19.3
hereof, be a party hereto and, to the extent provided in such Assignment and
Acceptance, have the rights and obligations of a Bank hereunder, and (ii) the
assigning Bank shall, to the extent provided in such assignment, be released
from its obligations under this Credit Agreement.
Section 19.2. Certain Representations and Warranties; Limitations;
Covenants. By executing and delivering an Assignment and Acceptance, the
parties to the assignment thereunder confirm to and agree with each other and
the other parties hereto as follows:
(a) other than the representation and warranty that it is the legal
and beneficial owner of the interest being assigned thereby free and clear of
any adverse claim, the assigning Bank makes no representation or warranty,
express or implied, and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Credit Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto or the
attachment, perfection or priority of any security interest or mortgage;
(b) the assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Parent, the Borrower or any of its Subsidiaries or any other Person primarily
or secondarily liable in respect of any of the Obligations, or the performance
or observance by the Parent, the Borrower or any of its Subsidiaries or any
other Person primarily or secondarily liable in respect of any of the
Obligations of any of their obligations under this Credit Agreement or any of
the other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto;
(c) such assignee confirms that it has received a copy of this
Credit Agreement, together with copies of the most recent financial statements
referred to in Section 7.4 and Section 8.4 hereof and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance upon the
assigning Bank, the Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Credit Agreement;
(e) such assignee represents and warrants that it is an Eligible
Assignee and that, on the effective date of such Assignment and Acceptance, the
circumstances described in Section Section 5.6 and 5.7 hereof are not
applicable to such assignee;
(f) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Credit
Agreement and the other Loan Documents as are delegated to the Agent by the
terms hereof or thereof, together with such powers as are reasonably incidental
thereto;
(g) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Credit Agreement
are required to be performed by it as a Bank;
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
(i) such assignee acknowledges that it has made arrangements with
the assigning Bank satisfactory to such assignee with respect to its pro rata
share of Letter of Credit Fees in respect of outstanding Letters of Credit.
Section 19.3. Register. The Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register or similar list (the
"Register") for the recordation of the names and addresses of the Banks and the
Commitment Percentage of, and principal amount of the Revolving Credit Loans
owing to and Letter of Credit Participations purchased by, the Banks from time
to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Agent and the Banks may treat each Person
whose name is recorded in the Register as a Bank hereunder for all purposes of
this Credit Agreement. The Register shall be available for inspection by the
Borrower and the Banks at any reasonable time and from time to time upon
reasonable prior notice. Upon each such recordation, the assignee Bank agrees
to pay to the Agent a registration fee in the sum of $5,000.
Section 19.4. New Notes. Upon its receipt of an Assignment and
Acceptance executed by the parties to such assignment, together with each Note
subject to such assignment, the Agent shall (a) record the information
contained therein in the Register, and (b) give prompt notice thereof to the
Borrower and the Banks. Within five (5) Business Days after receipt of such
notice, the Borrower, at its own expense, shall execute and deliver to the
Agent, in exchange for each surrendered Note, a new Note to the order of such
Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Bank
has retained some portion of its obligations hereunder, a new Note to the order
of the assigning Bank in an amount equal to the amount retained by it
hereunder. Such new Notes shall provide that they are replacements for the
surrendered Notes, shall be in an aggregate principal amount equal to the
aggregate principal amount of the surrendered Notes, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be
substantially the form of the assigned Notes, provided that any Notes issued to
the assigning Bank shall also evidence the obligations of the Borrower to pay
any accrued but unpaid interest on the surrendered Note or Notes. Within five
(5) days of issuance of any new Notes pursuant to this Section 19.4, the
Borrower shall deliver an opinion of counsel, addressed to the Banks and the
Agent, relating to the due authorization, execution and delivery of such new
Notes and the legality, validity and binding effect thereof, in form and
substance satisfactory to the Banks. The surrendered Note or Notes shall be
cancelled and returned to the Borrower.
Section 19.5. Participations. Each Bank may sell participations to one
or more banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; provided
that (a) each such participation shall be in an amount of not less than
$1,000,000, (b) any such sale or participation shall not affect the rights and
duties of the selling Bank hereunder to the Borrower and (c) the only rights
granted to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of the Loan Documents shall be
the rights to approve waivers, amendments or modifications that would reduce
the principal of or the interest rate on any Revolving Credit Loans, extend the
term of the Commitment or increase the Commitment Amount of such Bank as it
relates to such participant, reduce the amount of any Commitment Fees or Letter
of Credit Fees to which such participant is entitled or extend any regularly
scheduled payment date for principal or interest.
Section 19.6. Disclosure. The Borrower agrees that in addition to
disclosures made in accordance with standard and customary banking practices
any Bank may disclose information obtained by such Bank pursuant to this Credit
Agreement to assignees or participants and potential assignees or participants
hereunder; provided that such assignees or participants or potential assignees
or participants shall agree (a) to treat in confidence such information unless
such information otherwise becomes public knowledge, (b) not to disclose such
information to a third party, except as required by law or legal process and
(c) not to make use of such information for purposes of transactions unrelated
to such contemplated assignment or participation.
Section 19.7. Assignee or Participant Affiliated with the Borrower. If
any assignee Bank is an Affiliate of the Borrower, then any such assignee Bank
shall have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Agent pursuant to Section 13.1 or
Section 13.2 hereof, and the determination of the Majority Banks shall for all
purposes of this Agreement and the other Loan Documents be made without regard
to such assignee Bank's interest in any of the Revolving Credit Loans. If any
Bank sells a participating interest in any of the Revolving Credit Loans or
Reimbursement Obligations to a participant, and such participant is the
Borrower or an Affiliate of the Borrower, then such transferor Bank shall
promptly notify the Agent of the sale of such participation. A transferor Bank
shall have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or modifications to any of the Loan Documents or for
purposes of making requests to the Agent pursuant to Section 13.1 or Section
13.2 hereof to the extent that such participation is beneficially owned by the
Borrower or any Affiliate of the Borrower, and the determination of the
Majority Banks shall for all purposes of this Agreement and the other Loan
Documents be made without regard to the interest of such transferor Bank in the
Loans to the extent of such participation.
Section 19.8. Miscellaneous Assignment Provisions. Any assigning Bank
shall retain its rights to be indemnified pursuant to Section 16 hereof with
respect to any claims or actions arising prior to the date of such assignment.
If any assignee Bank is not incorporated under the laws of the United States of
America or any state thereof, it shall, prior to the date on which any interest
or fees are payable hereunder or under any of the other Loan Documents for its
account, deliver to the Borrower and the Agent certification as to its
exemption from deduction or withholding of any United States federal income
taxes. If FNBB transfers all of its interest, rights and obligations under
this Credit Agreement, the Agent shall, in consultation with the Borrower and
with the consent of the Borrower and the Majority Banks, appoint another Bank
to act as a Reference Bank hereunder. Anything contained in this Section 19 to
the contrary notwithstanding, any Bank may at any time pledge all or any
portion of its interest and rights under this Credit Agreement (including all
or any portion of its Notes) to any of the twelve Federal Reserve Banks
organized under Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341.
No such pledge or the enforcement thereof shall release the pledgor Bank from
its obligations hereunder or under any of the other Loan Documents.
Section 19.8. Assignment by Borrower. The Borrower shall not assign or
transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Banks.
Section 20. NOTICES. Except as otherwise expressly provided in this
Credit Agreement, all notices and other communications made or required to be
given pursuant to this Credit Agreement or the Notes or any Letter of Credit
Applications shall be in writing and shall be delivered in hand, mailed by
United States registered or certified first class mail, postage prepaid, sent
by overnight courier, or sent by telegraph, telecopy, facsimile or telex and
confirmed by delivery via courier or postal service, addressed as follows:
(a) if to the Borrower, at ArborLake Centre, Suite 550, 1751 Lake
Cook Road, Deerfield, Illinois 60015, Attention: President, with a copy to The
Jordan Company, 9 West 57th Street, 40th Floor, New York, New York 10019,
Attention: Jonathan F. Boucher, or at such other address for notice as the
Borrower shall last have furnished in writing to the Person giving the notice;
(b) if to FNBB or the Agent, at 100 Federal Street, Boston,
Massachusetts 02110, USA, Attention: Gordon L. Nelson, Jr., Vice President, or
such other address for notice as the Agent shall last have furnished in writing
to the Person giving the notice; and
(c) if to any Bank (other than FNBB), at such Bank's address set
forth on Schedule 1 attached hereto, or such other address for notice as such
Bank shall have last furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier
or facsimile to a responsible officer of the party to which it is directed, at
the time of the receipt thereof by such officer or the sending of such
facsimile and (ii) if sent by registered or certified first-class mail, postage
prepaid, on the third Business Day following the mailing thereof.
Section 21. GOVERNING LAW. THIS CREDIT AGREEMENT AND, EXCEPT AS
OTHERWISE SPECIFICALLY PROVIDED THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE
CONTRACTS UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL
PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID
COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE
COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING
THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE
OF PROCESS IN ANY SUCH SUIT BEING MADE UPON SUCH PERSON BY MAIL AT THE ADDRESS
SPECIFIED IN Section 20 HEREOF. THE BORROWER HEREBY WAIVES ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR
THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
Section 22. HEADINGS. The captions in this Credit Agreement are for
convenience of reference only and shall not define or limit the provisions
hereof.
Section 23. COUNTERPARTS. This Credit Agreement and any amendment
hereof may be executed in several counterparts and by each party on a separate
counterpart, each of which when executed and delivered shall be an original,
and all of which together shall constitute one instrument. In proving this
Credit Agreement it shall not be necessary to produce or account for more than
one such counterpart signed by the party against whom enforcement is sought.
Section 24. ENTIRE AGREEMENT. The Loan Documents and any other
documents executed in connection herewith or therewith express the entire
understanding of the parties with respect to the transactions contemplated
hereby. Neither this Credit Agreement nor any term hereof may be changed,
waived, discharged or terminated, except as provided in Section 26 hereof.
Section 25. WAIVER OF JURY TRIAL. The Borrower hereby waives its right
to a jury trial with respect to any action or claim arising out of any dispute
in connection with this Credit Agreement, the Notes or any of the other Loan
Documents, any rights or obligations hereunder or thereunder or the performance
of which rights and obligations. Except as prohibited by law, the Borrower
hereby waives any right it may have to claim or recover in any litigation
referred to in the preceding sentence any special, exemplary, punitive or
consequential damages or any damages other than, or in addition to, actual
damages. The Borrower (a) certifies that no representative, agent or attorney
of any Bank or the Agent has represented, expressly or otherwise, that such
Bank or the Agent would not, in the event of litigation, seek to enforce the
foregoing waivers and (b) acknowledges that the Agent and the Banks have been
induced to enter into this Credit Agreement, the other Loan Documents to which
it is a party by, among other things, the waivers and certifications contained
herein.
Section 26. CONSENTS, AMENDMENTS, WAIVERS, ETC. Any consent or approval
required or permitted by this Credit Agreement to be given by all of the Banks
may be given, and any term of this Credit Agreement, the other Loan Documents
or any other instrument related hereto or mentioned herein may be amended, and
the performance or observance by the Parent, the Borrower or any of its
Subsidiaries of any terms of this Credit Agreement, the other Loan Documents or
such other instrument or the continuance of any Default or Event of Default may
be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of the
Borrower and the written consent of the Majority Banks. Notwithstanding the
foregoing, the rate of interest on the Notes, the term of the Notes, the
Commitment Amounts, and the amount of Commitment Fee or Letter of Credit Fees
hereunder may not be changed without the written consent of the Borrower and
the written consent of each Bank affected thereby; the definition of Majority
Banks, Section 2.3(b) hereof and this Section 26 may not be amended without the
written consent of all of the Banks; and the amount of the Agent's Fee or any
Letter of Credit Fees payable for the Agent's account and Section 15 hereof may
not be amended without the written consent of the Agent. No waiver shall
extend to or affect any obligation not expressly waived or impair any right
consequent thereon. No course of dealing or delay or omission on the part of
the Agent or any Bank in exercising any right shall operate as a waiver thereof
or otherwise be prejudicial thereto. No notice to or demand upon the Borrower
shall entitle the Borrower to other or further notice or demand in similar or
other circumstances.
Section 27. SEVERABILITY. The provisions of this Credit Agreement are
severable and if any one clause or provision hereof shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof,
in such jurisdiction, and shall not in any manner affect such clause or
provision in any other jurisdiction, or any other clause or provision of this
Credit Agreement in any jurisdiction.
IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
JII, INC.
By:__________________________________________
Title:
THE FIRST NATIONAL BANK OF
BOSTON, individually and as Agent
By:__________________________________________
Title:
<PAGE>
EXHIBIT A
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FORM OF NOTE
------------
$_____________June __, 1994
FOR VALUE RECEIVED, the undersigned JII, INC., a __________ corporation (the
"Borrower"), hereby promises to pay to the order of [INSERT NAME OF PAYEE BANK]
(the "Bank") at the Agent's Head Office (as defined in the Credit Agreement
referred to below):
(a) on the Revolving Credit Loan Maturity Date, the principal amount of
[INSERT COMMITMENT AMOUNT] DOLLARS ($______________) or, if less, the aggregate
unpaid principal amount of Revolving Credit Loans advanced by the Bank to the
Borrower pursuant to that certain Revolving Credit Agreement, dated as of June
__, 1994, among the Borrower, the Bank, the other lenders which are or may
become parties thereto from time to time and The First National Bank of Boston,
as agent, as the same may be amended and in effect from time to time (such
agreement, as amended and in effect from time to time, the "Credit Agreement");
(b) the principal outstanding hereunder from time to time at the times
provided in the Credit Agreement; and
(c) interest on the principal balance hereof from time to time outstanding
from the Closing Date under the Credit Agreement through
and including the Revolving Credit Loan Maturity Date at the times and at
the rates provided in the Credit Agreement.
This Note evidences borrowings under and has been issued by the Borrower
in accordance with the terms of the Credit Agreement. The Bank and any holder
hereof is entitled to the benefits of the Credit Agreement, the Security
Documents and the other Loan Documents, and may enforce the agreements of the
Borrower contained therein, and any holder hereof may exercise the respective
remedies provided for thereby or otherwise available in respect thereof, all in
accordance with the respective terms thereof. All capitalized terms used in
this Note and not otherwise defined herein shall have the same meanings herein
as in the Credit Agreement.
The Borrower irrevocably authorizes the Bank to make or cause to be made,
at or about the time of the Drawdown Date of any Revolving Credit Loan or at
the time of receipt of any payment of principal of this Note, an appropriate
notation on the grid attached to this Note, or the continuation of such grid,
or any other similar record, including computer records, reflecting the making
of such Revolving Credit Loan or (as the case may be) the receipt of such
payment. The outstanding amount of the Revolving Credit Loans set forth on the
grid attached to this Note, or the continuation of such grid, or any other
similar record, including computer records, maintained by the Bank with respect
to any Revolving Credit Loans shall be prima facie evidence of the principal
amount thereof owing and unpaid to the Bank, but the failure to record, or any
error in so recording, any such amount on any such grid, continuation or other
record shall not limit or otherwise affect the obligation of the Borrower
hereunder or under the Credit Agreement to make payments of principal of and
interest on this Note when due.
The Borrower has the right in certain circumstances and the obligation
under certain other circumstances to prepay the whole or part of the principal
of this Note on the terms and conditions specified in the Credit Agreement.
If any one or more of the Events of Default shall occur, the entire
unpaid principal amount of this Note and all of the unpaid interest accrued
thereon may become or be declared due and payable in the manner and with the
effect provided in the Credit Agreement.
No delay or omission on the part of the Bank or any holder hereof in
exercising any right hereunder shall operate as a waiver of such right or of
any other rights of the Bank or such holder, nor shall any delay, omission or
waiver on any one occasion be deemed a bar or waiver of the same or any other
right on any further occasion.
The Borrower and every endorser and guarantor of this Note or the
obligation represented hereby waives presentment, demand, notice, protest and
all other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note, and assents to any extension
or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral and to the addition or release
of any other party or person primarily or secondarily liable.
THIS NOTE AND THE OBLIGATIONS OF THE BORROWER HEREUNDER SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
NOTE MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY
FEDERAL COURT SITTING THEREIN AND THE CONSENT TO THE NONEXCLUSIVE JURISDICTION
OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE
BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN 20 OF THE CREDIT AGREEMENT. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
This Note shall be deemed to take effect as a sealed instrument under the
laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the undersigned has caused this Note to be signed in
its corporate name and its corporate seal to be impressed thereon by its duly
authorized officer as of the day and year first above written.
[Corporate Seal] JII, INC.
By: _________________________
Title:
EXHIBIT B
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FORM OF NON-WHOLLY-OWNED SUBSIDIARY GUARANTY
--------------------------------------------
GUARANTY, dated as of ___________, 1994, by each of the entities listed on the
signature pages hereto (each, a "Guarantor" and, collectively, the
"Guarantors") in favor of (a) The First National Bank of Boston, as agent
(hereinafter, in such capacity, the "Agent") for itself and the other banking
institutions (hereinafter, collectively, the "Banks") which are or may become
parties to that certain Revolving Credit Agreement, dated as of ___________,
1994, as the same may be amended and in effect from time to time (such
agreement, as amended and in effect the "Credit Agreement"), among JII, Inc., a
Delaware corporation (the "Company"), the Banks and the Agent and (b) each of
the Banks.
WHEREAS, the Company and each of the Guarantors are members of a group of
related corporations, the success of any one of which is dependent in part on
the success of the other members of such group; and
WHEREAS, each of the Guarantors expects to receive substantial direct and
indirect benefits from the extensions of credit to the Company by the Banks
pursuant to the Credit Agreement (which benefits are hereby acknowledged); and
WHEREAS, it is a condition precedent to the Banks' making any loans or
otherwise extending credit to the Company under the Credit Agreement that each
of the Guarantors execute and deliver to the Agent, for the benefit of the
Banks and the Agent, a guaranty substantially in the form hereof; and
WHEREAS, each of the Guarantors wishes to guaranty the Company's obligations to
the Banks and the Agent under or in respect of the Credit Agreement as provided
herein;
NOW, THEREFORE, each of the Guarantors hereby agrees with the Banks and the
Agent as follows:
Section I. Definitions.
The term "Obligations" and all other capitalized terms used herein without
definition shall have the respective meanings provided therefor in the Credit
Agreement.
Section 2. Guaranty of Payment and Performance.
(a) Each of the Guarantors jointly and severally guarantees to the Banks and
the Agent the full and punctual payment when due (whether at stated maturity,
by required pre-payment, by acceleration or otherwise), as well as the
performance, of all of the Obligations including all such which would become
due but for the operation of the automatic stay pursuant to Section 362(a) of
the Federal Bankruptcy Code and the operation of Section Section 502(b) and
506(b) of the Federal Bankruptcy Code. This Guaranty is an absolute,
unconditional and continuing guaranty of the full and punctual payment and
performance of all of the Obligations and not of their collectibility only and
is in no way conditioned upon any requirement that the Agent or any Bank first
attempt to collect any of the Obligations from the Company or resort to any
collateral security or other means of obtaining payment. Should the Company
default in the payment or performance of any of the Obligations, the
obligations of each of the Guarantors hereunder with respect to such
Obligations in default shall, upon demand by the Agent, become immediately due
and payable to the Agent, for the benefit of the Banks and the Agent, without
demand or notice of any nature, all of which are expressly waived by each of
the Guarantors. Payments by each of the Guarantors hereunder may be required
by the Agent on any number of occasions. All payments by the Guarantors
hereunder shall be made to the Agent, in the manner and at the place of payment
specified therefor in the Credit Agreement, for the account of the Banks and
the Agent.
(b) Subject to the prior payment in full of all of the Obligations, each of
the Guarantors shall have mutual rights of contribution with respect to the
other Guarantors in respect of amounts paid in respect of the Obligations by
such Guarantor in excess of its pro rata share of the Obligations determined in
accordance with the respective net worths of the Guarantors at and as of
December 31, 1993, provided that no material change in the respective net
worths of the Guarantors has occurred between December 31, 1993 and the date
hereof.
(c) Notwithstanding any other provision of this Guaranty, each of the
Guarantor's obligations hereunder while (but only while) such Guarantor
continues to be a Non-Wholly-Owned Guarantor (as defined in the Credit
Agreement) shall equal such Guarantor's Maximum Liability.
Section 3. Guarantors' Agreement to Pay Enforcement Costs, Etc.
Each of the Guarantors further jointly and severally agrees, as the principal
obligor and not as a guarantor only, to pay to the Agent, on demand, all costs
and expenses (including court costs and legal expenses) incurred or expended by
the Agent or any Bank in connection with the Obligations, this Guaranty and the
enforcement thereof, together with interest on amounts recoverable under this
Section 3 from the time when such amounts become due until payment, whether
before or after judgment, at the rate of interest for overdue principal set
forth in the Credit Agreement, provided that if such interest exceeds the
maximum amount permitted to be paid under applicable law, then such interest
shall be reduced to such maximum permitted amount.
Section 4. Waivers by Guarantors; Banks' Freedom to Act.
Each of the Guarantors agrees that the Obligations will be paid and performed
strictly in accordance with their respective terms, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting
any of such terms or the rights of the Agent or any Bank with respect thereto.
Each of the Guarantors waives promptness, diligences, presentment, demand,
protest, notice of acceptance, notice of any Obligations incurred and all other
notices of any kind, all defenses which may be available by virtue of any
valuation, stay, moratorium law or other similar law now or hereafter in
effect, any right to require the marshalling of assets of the Company or any
other entity or other person primarily or secondarily liable with respect to
any of the Obligations, and all suretyship defenses generally. Without
limiting the generality of the foregoing, each of the Guarantors agrees to the
provisions of any instrument evidencing, securing or otherwise executed in
connection with any of the Obligations and agrees that the obligations of such
Guarantor hereunder shall not be released or discharged, in whole or in part,
or otherwise affected by (a) the failure of the Agent or any Bank to assert any
claim or demand or to enforce any right or remedy against the Company or any
other entity or other person primarily or secondarily liable with respect to
any of the Obligations; (b) any extensions, compromise, refinancing,
consolidation or renewals of any of the Obligations; (c) any change in the
time, place or manner of payment of any of the Obligations or any rescissions,
waivers, compromise, refinancing, consolidation or other amendments or
modifications of any of the terms or provisions of the Credit Agreement, the
Notes, the other Loan Documents or any other agreement evidencing, securing or
otherwise executed in connection with any of the Obligations; (d) the addition,
substitution or release of any entity or other person primarily or secondarily
liable for any of the Obligations; (e) the adequacy of any rights which the
Agent or any Bank may have against any collateral security or other means of
obtaining repayment of any of the Obligations; (f) the impairment of any
collateral securing any of the Obligations, including without limitation the
failure to perfect or preserve any rights which the Agent or any Bank might
have in such collateral security or the substitution, exchange, surrender,
release, loss or destruction of any such collateral security; or (g) any other
act or omission which might in any manner or to any extent vary the risk of
such Guarantor or otherwise operate as a release or discharge of such
Guarantor, all of which may be done without notice to any of the Guarantors.
To the fullest extent permitted by law, each of the Guarantors hereby expressly
waives any and all rights or defenses arising by reason of (i) any "one action"
or "anti-deficiency" law which would otherwise prevent the Agent or any Bank
from bringing any action, including any claim for a deficiency, or exercising
any other right or remedy (including any right of set-off), against such
Guarantor before or after the Agent's or such Bank's commencement or completion
of any foreclosure action, whether judicially, by exercise of power of sale or
otherwise, or (ii) any other law which in any other way would otherwise require
any election of remedies by the Agent or any Bank.
Section 5. Unenforceability of Obligations Against Company.
If for any reason the Company has no legal existence or is under no legal
obligation to discharge any of the Obligations, or if any of the Obligations
have become irrecoverable from the Company by reason of the Company's
insolvency, bankruptcy or reorganization or by other operation of law or for
any other reason, this Guaranty shall nevertheless be binding on each of the
Guarantors to the same extent as if each of the Guarantors at all times had
been the principal obligor on all such Obligations. In the event that
acceleration of the time for payment of any of the Obligations is stayed upon
the insolvency, bankruptcy or reorganization of the Company, or for any other
reason, all such amounts otherwise subject to acceleration under the terms of
the Credit Agreement, the Notes, the other Loan Documents or any other
agreement evidencing, securing or otherwise executed in connection with any
Obligation shall be immediately due and payable by the Guarantors.
Section 6. Subrogation; Subordination.
Section 6.1. Waiver of Rights Against Company.
Until the final payment and performance in full of all of the Obligations, none
of the Guarantors shall exercise and each of the Guarantors hereby waives any
rights against the Company arising as a result of payment by such Guarantor
hereunder, by way of subrogation, reimbursement, restitution, contribution or
otherwise, and will not prove any claim in competition with the Agent or any
Bank in respect of any payment hereunder in any bankruptcy, insolvency or
reorganization case or proceedings of any nature; none of the Guarantors will
claim any setoff, recoupment or counterclaim against the Company in respect of
any liability of such Guarantor to the Company; and each of the Guarantors
waives any benefit of and any right to participate in any collateral security
which may be held by the Agent or any Bank.
Section 6.2. Subordination.
The payment of any amounts due with respect to any indebtedness of the Company
for money borrowed or credit received now or hereafter owed to any of the
Guarantors is hereby subordinated to the prior payment in full of all of the
Obligations. Each of the Guarantors agrees that, after the occurrence and
during the continuance of any Event of Default, such Guarantor will not demand,
sue for or otherwise attempt to collect any such indebtedness of the Company to
such Guarantor until all of the Obligations shall have been paid in full. If,
notwithstanding the foregoing sentence, any of the Guarantors shall collect,
enforce or receive any amounts in respect of such indebtedness while any of the
Obligations are still outstanding, such amounts shall be collected, enforced
and received by such Guarantor as trustee for the Banks and the Agent and be
paid over to the Agent, for the benefit of the Banks and the Agent, on account
of the Obligations without affecting in any manner the liability of any of the
Guarantors under the other provisions of this Guaranty.
Section 6.3. Provisions Supplemental.
The provisions of this Section 6 shall be supplemental to and not in derogation
of any rights and remedies of the Banks and the Agent under any separate
subordination agreement which the Agent may at any time and from time to time
enter into with any of the Guarantors for the benefit of the Banks and the
Agent.
Section 7. Security; Setoff.
Each of the Guarantors grants to each of the Agent and the Banks, as security
for the full and punctual payment and performance of all of such Guarantor's
obligations hereunder, a continuing lien on and security interest in all
securities or other property belonging to such Guarantor now or hereafter held
by the Agent or such Bank and in all deposits (general or special, time or
demand, provisional or final) and other sums credited by or due from the Agent
or such Bank to such Guarantor or subject to withdrawal by such Guarantor.
Regardless of the adequacy of any collateral security or other means of
obtaining payment of any of the Obligations, each of the Agent and the Banks is
hereby authorized at any time and from time to time, without notice to any of
the Guarantors (any such notice being expressly waived by each of the
Guarantors) and to the fullest extent permitted by law, to set off and apply
such deposits and other sums against the obligations of the Guarantors under
this Guaranty, whether or not the Agent or such Bank shall have made any demand
under this Guaranty and although such obligations may be contingent or
unmatured.
Section 8. Further Assurances.
Each of the Guarantors agrees that it will from time to time, at the request of
the Agent, do all such things and execute all such documents as the Agent may
consider necessary or desirable to give full effect to this Guaranty and to
perfect and preserve the rights and powers of the Banks and the Agent
hereunder. Each of the Guarantors acknowledges and confirms that such
Guarantor itself has established its own adequate means of obtaining from the
Company on a continuing basis all information desired by such Guarantor
concerning the financial condition of the Company and that such Guarantor will
look to the Company and not to the Agent or any Bank in order for such
Guarantor to keep adequately informed of changes in the Company's financial
condition.
Section 9. Termination; Reinstatement.
This Guaranty shall remain in full force and effect until the Agent is given
written notice of the Guarantors' intention to discontinue this Guaranty,
notwithstanding any intermediate or temporary payment or settlement of the
whole or any part of the Obligations. No such notice shall be effective unless
received and acknowledged by an officer of the Agent at the address of the
Agent for notices set forth in Section 20 of the Credit Agreement. No such
notice shall affect any rights of the Agent or any Bank hereunder, including
without limitation the rights set forth in Section Section 4 and 6 hereof, with
respect to any Obligations incurred or accrued prior to the receipt of such
notice or any Obligations incurred or accrued pursuant to any contract or
commitment in existence prior to such receipt. This Guaranty shall continue
to be effective or be reinstated, notwithstanding any such notice, if at any
time any payment made or value received with respect to any Obligation is
rescinded or must otherwise be returned by the Agent or any Bank upon the
insolvency, bankruptcy or reorganization of the Company, or otherwise, all as
though such payment had not been made or value received.
Section 10. Successors and Assigns.
This Guaranty shall be binding upon each of the Guarantors, its successors and
assigns, and shall inure to the benefit of the Agent and the Banks and their
respective successors, transferees and assigns. Without limiting the
generality of the foregoing sentence, certain of the Banks may assign or
otherwise transfer the Credit Agreement, the Notes, the other Loan Documents or
any other agreement or note held by it evidencing, securing or otherwise
executed in connection with the Obligations, or sell participations in any
interest therein, to any other entity or other person, and such other entity or
other person shall thereupon become vested, to the extent set forth in the
agreement evidencing such assignment, transfer or participation, with all the
rights in respect thereof granted to such Bank herein, all in accordance with
Section 19 of the Credit Agreement. None of the Guarantors may assign any of
its obligations hereunder.
Section 11. Amendments and Waivers.
No amendment or waiver of any provision of this Guaranty nor consent to any
departure by any of the Guarantors therefrom shall be effective unless the same
shall be in writing and signed by the Agent with the consent of the Majority
Banks. No failure on the part of the Agent or any Bank to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right.
Section 12. Notices.
All notices and other communications called for hereunder shall be made in
writing and, unless otherwise specifically provided herein, shall be deemed to
have been duly made or given when delivered by hand or mailed first class,
postage prepaid, or, in the case of telegraphic or telexed notice, when
transmitted, answer back received, addressed as follows: if to any of the
Guarantors, at the address set forth beneath such Guarantor's signature hereto,
and if to the Agent, at the address for notices to the Agent set forth in
Section 20 of the Credit Agreement, or at such address as either party may
designate in writing to the other.
Section 13. Governing Law; Consent to Jurisdiction.
THE GUARANTY IS INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS. Each of the Guarantors agrees that any suit for the enforcement
of this Guaranty may be brought in the courts of the Commonwealth of
Massachusetts or any federal court sitting therein and consents to the
nonexclusive jurisdiction of such court and to service of process in any such
suit being made upon such Guarantor by mail at the address specified by
reference in Section 12 hereof. Each of the Guarantors hereby waives any
objection that it may now or hereafter have to the venue of any such suit or
any such court or that such suit was brought in an inconvenient court.
Section 14. Waiver of Jury Trial. EACH OF
THE GUARANTORS HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY
ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS GUARANTY,
ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF ANY OF SUCH RIGHTS
OR OBLIGATIONS. Except as prohibited by law, each of the Guarantors hereby
waives any right which it may have to claim or recover in any litigation
referred to in the preceding sentence any special, exemplary, punitive or
consequential damages or any damages other than, or in addition to, actual
damages. Each of the Guarantors (a) certifies that neither the Agent or any
Bank nor any representative, agent or attorney of the Agent or any Bank has
represented, expressly or otherwise, that the Agent or any Bank would not, in
the event of litigation, seek to enforce the foregoing waivers and (b)
acknowledges that, in entering into the Credit Agreement and the other Loan
Documents to which the Agent or any Bank is a party, the Agent and the Banks
are relying upon, among other things, the waivers and certifications contained
in this Section 14.
Section 15. Miscellaneous.
This Guaranty constitutes the entire agreement of each of the Guarantors with
respect to the matters set forth herein. The rights and remedies herein
provided are cumulative and not exclusive of any remedies provided by law or
any other agreement, and this Guaranty shall be in addition to any other
guaranty of or collateral security for any of the Obligations. The invalidity
or unenforceability of any one or more sections of this Guaranty shall not
affect the validity or enforceability of its remaining provisions. Captions
are for the ease of reference only and shall not affect the meaning of the
relevant provisions. The meanings of all defined terms used in this Guaranty
shall be equally applicable to the singular and plural forms of the terms
defined.
IN WITNESS WHEREOF, each of the Guarantors has caused this Guaranty to be
executed and delivered as of the date first above written.
SATE-LITE MANUFACTURING COMPANY
By:_________________________________
Title:
Address: 6220-30 Gross Point Road
Niles, Illinois 60648
PARSONS PRECISION PRODUCTS, INC.
By:_________________________________
Title:
Address: 333 Main Street
P.O. Box 320
Parsons, Kansas
DURA-LINE CORPORATION
By:_________________________________
Title:
Address: South 23rd Street P.O. Box 1445
Middlesboro, Kentucky 40965
<PAGE>
EXHIBIT C
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FORM OF PARENT GUARANTY
-----------------------
GUARANTY, dated as of __________, 1994, by JORDAN INDUSTRIES, INC., an Illinois
corporation (the "Guarantor") in favor of (a) The First National Bank of
Boston, a national banking association, as agent (hereinafter, in such
capacity, the "Agent") for itself and the other banking institutions
(hereinafter, collectively, the "Banks") which are or may become parties to
that certain Revolving Credit Agreement, dated as of _________, 1994, as such
agreement may be amended and in effect from time to time (as amended and in
effect from time to time, the "Credit Agreement"), among JII, Inc., a Delaware
corporation (the "Company"), the Banks and the Agent and (ii) each of the
Banks.
WHEREAS, the Guarantor owns 100% of the capital stock of the Company;
WHEREAS, the Guarantor expects to receive substantial direct and indirect
benefits from the extensions of credit to the Company by the Banks pursuant to
the Credit Agreement (which benefits are hereby acknowledged);
WHEREAS, it is a condition precedent to the Banks' making any loans or
otherwise extending credit to the Company under the Credit Agreement that the
Guarantor execute and deliver to the Agent, for the benefit of the Banks and
the Agent, a guaranty substantially in the form hereof; and
WHEREAS, the Guarantor wishes to guaranty the Company's obligations to the
Banks and the Agent under or in respect of the Credit Agreement as provided
herein;
NOW, THEREFORE, the Guarantor hereby agrees with the Banks and the Agent as
follows:
Section 1. Definitions.
The term "Obligations" and all other capitalized terms used herein without
definition shall have the respective meanings provided therefor in the Credit
Agreement.
Section 2. Guaranty of Payment and Performance.
The Guarantor hereby guarantees to the Banks and the Agent the full and
punctual payment when due (whether at stated maturity, by required pre-payment,
by acceleration or otherwise), as well as the performance, of all of the
Obligations including all such which would become due but for the operation of
the automatic stay pursuant to Section 362(a) of the Federal Bankruptcy Code
and the operation of Section Section 502(b) and 506(b) of the Federal
Bankruptcy Code. This Guaranty is an absolute, unconditional and continuing
guaranty of the full and punctual payment and performance of all of the
Obligations and not of their collectibility only and is in no way conditioned
upon any requirement that the Agent or any Bank first attempt to collect any of
the Obligations from the Company or resort to any collateral security or other
means of obtaining payment. Should the Company default in the payment or
performance of any of the Obligations, the obligations of the Guarantor
hereunder with respect to such Obligations in default shall, upon demand by the
Agent, become immediately due and payable to the Agent, for the benefit of the
Banks and the Agent, without demand or notice of any nature, all of which are
expressly waived by the Guarantor. Payments by the Guarantor hereunder may be
required by the Agent on any number of occasions. All payments by the
Guarantor hereunder shall be made to the Agent, in the manner and at the place
of payment specified therefor in the Credit Agreement, for the account of the
Banks and the Agent.
Section 3. Guarantor's Agreement to Pay Enforcement Costs, Etc.
The Guarantor further agrees, as the principal obligor and not as a guarantor
only, to pay to the Agent, on demand, all costs and expenses (including court
costs and legal expenses) incurred or expended by the Agent or any Bank in
connection with the Obligations, this Guaranty and the enforcement thereof,
together with interest on amounts recoverable under this Section 3 from the
time when such amounts become due until payment, whether before or after
judgment, at the rate of interest for overdue principal set forth in the Credit
Agreement, provided that if such interest exceeds the maximum amount permitted
to be paid under applicable law, then such interest shall be reduced to such
maximum permitted amount.
Section 4. Waivers by Guarantor; Banks' Freedom to Act.
The Guarantor agrees that the Obligations will be paid and performed strictly
in accordance with their respective terms, regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such
terms or the rights of the Agent or any Bank with respect thereto. The
Guarantor waives promptness, diligences, presentment, demand, protest, notice
of acceptance, notice of any Obligations incurred and all other notices of any
kind, all defenses which may be available by virtue of any valuation, stay,
moratorium law or other similar law now or hereafter in effect, any right to
require the marshalling of assets of the Company or any other entity or other
person primarily or secondarily liable with respect to any of the Obligations,
and all suretyship defenses generally. Without limiting the generality of the
foregoing, the Guarantor agrees to the provisions of any instrument evidencing,
securing or otherwise executed in connection with any of the Obligations and
agrees that the obligations of the Guarantor hereunder shall not be released or
discharged, in whole or in part, or otherwise affected by (a) the failure of
the Agent or any Bank to assert any claim or demand or to enforce any right or
remedy against the Company or any other entity or other person primarily or
secondarily liable with respect to any of the Obligations; (b) any extensions,
compromise, refinancing, consolidation or renewals of any of the Obligations;
(c) any change in the time, place or manner of payment of any of the
Obligations or any rescissions, waivers, compromise, refinancing, consolidation
or other amendments or modifications of any of the terms or provisions of the
Credit Agreement, the Notes, the other Loan Documents or any other agreement
evidencing, securing or otherwise executed in connection with any of the
Obligations; (d) the addition, substitution or release of any entity or other
person primarily or secondarily liable for any of the Obligations; (e) the
adequacy of any rights which the Agent or any Bank may have against any
collateral security or other means of obtaining repayment of any of the
Obligations; (f) the impairment of any collateral securing any of the
Obligations, including without limitation the failure to perfect or preserve
any rights which the Agent or any Bank might have in such collateral security
or the substitution, exchange, surrender, release, loss or destruction of any
such collateral security; or (g) any other act or omission which might in any
manner or to any extent vary the risk of the Guarantor or otherwise operate as
a release or discharge of the Guarantor, all of which may be done without
notice to the Guarantor. To the fullest extent permitted by law, the Guarantor
hereby expressly waives any and all rights or defenses arising by reason of (i)
any "one action" or "anti-deficiency" law which would otherwise prevent the
Agent or any Bank from bringing any action, including any claim for a
deficiency, or exercising any other right or remedy (including any right of
set-off), against the Guarantor before or after the Agent's or such Bank's
commencement or completion of any foreclosure action, whether judicially, by
exercise of power of sale or otherwise, or (ii) any other law which in any
other way would otherwise require any election of remedies by the Agent or any
Bank.
Section 5. Unenforceability of Obligations Against Company.
If for any reason the Company has no legal existence or is under no legal
obligation to discharge any of the Obligations, or if any of the Obligations
have become irrecoverable from the Company by reason of the Company's
insolvency, bankruptcy or reorganization or by other operation of law or for
any other reason, this Guaranty shall nevertheless be binding on the Guarantor
to the same extent as if the Guarantor at all times had been the principal
obligor on all such Obligations. In the event that acceleration of the time
for payment of any of the Obligations is stayed upon the insolvency, bankruptcy
or reorganization of the Company, or for any other reason, all such amounts
otherwise subject to acceleration under the terms of the Credit Agreement, the
Notes, the other Loan Documents or any other agreement evidencing, securing or
otherwise executed in connection with any of the Obligations shall be
immediately due and payable by the Guarantor.
Section 6. Subrogation; Subordination.
Section 6.1. Waiver of Rights Against Company.
Until the final payment and performance in full of all of the Obligations, the
Guarantor shall not exercise and hereby waives any rights against the Company
arising as a result of payment by the Guarantor hereunder, by way of
subrogation, reimbursement, restitution, contribution or otherwise, and will
not prove any claim in competition with the Agent or any Bank in respect of any
payment hereunder in any bankruptcy, insolvency or reorganization case or
proceedings of any nature; the Guarantor will not claim any setoff, recoupment
or counterclaim against the Company in respect of any liability of the
Guarantor to the Company; and the Guarantor waives any benefit of and any right
to participate in any collateral security which may be held by the Agent or any
Bank.
Section 6.2. Subordination.
The payment of any amounts due with respect to any indebtedness of the Company
for money borrowed or credit received now or hereafter owed to the Guarantor is
hereby subordinated to the prior payment in full of all of the Obligations.
The Guarantor agrees that, after the occurrence and during the continuance of
any Event of Default, the Guarantor will not demand, sue for or otherwise
attempt to collect any such indebtedness of the Company to the Guarantor until
all of the Obligations shall have been paid in full. If, notwithstanding the
foregoing sentence, the Guarantor shall collect, enforce or receive any amounts
in respect of such indebtedness while any Obligations are still outstanding,
such amounts shall be collected, enforced and received by the Guarantor as
trustee for the Banks and the Agent and be paid over to the Agent, for the
benefit of the Banks and the Agent, on account of the Obligations without
affecting in any manner the liability of the Guarantor under the other
provisions of this Guaranty.
Section 6.3. Provisions Supplemental.
The provisions of this Section 6 shall be supplemental to and not in derogation
of any rights and remedies of the Banks and the Agent under any separate
subordination agreement which the Agent may at any time and from time to time
enter into with the Guarantor for the benefit of the Banks and the Agent.
Section 7. Security; Setoff.
The Guarantor grants to each of the Agent and the Banks, as security for the
full and punctual payment and performance of all of the Guarantor's obligations
hereunder, a continuing lien on and security interest in all securities or
other property belonging to the Guarantor now or hereafter held by the Agent or
such Bank and in all deposits (general or special, time or demand, provisional
or final) and other sums credited by or due from the Agent or such Bank to the
Guarantor or subject to withdrawal by the Guarantor. Regardless of the
adequacy of any collateral security or other means of obtaining payment of any
of the Obligations, each of the Agent and the Banks is hereby authorized at any
time and from time to time, without notice to the Guarantor (any such notice
being expressly waived by the Guarantor) and to the fullest extent permitted by
law, to set off and apply such deposits and other sums against the obligations
of the Guarantor under this Guaranty, whether or not the Agent or such Bank
shall have made any demand under this Guaranty and although such obligations
may be contingent or unmatured.
Section 8. Representations and Warranties; Covenants.
(a) The Guarantor hereby represents and warrants to the Banks and the Agent as
to each of the matters set forth in Section 7 of the Credit Agreement as if
such Section 7 was set forth herein in its entirety and the representations and
warranties set forth in Section 7 of the Credit Agreement are hereby
incorporated herein by reference.
(b) If the Guarantor makes an Investment or Investments in excess of
$5,000,000 in the aggregate in any Subsidiary that is not a Subsidiary of the
Guarantor on the date hereof, the Guarantor shall so notify the Agent within
five (5) days of such Investment.
(c) The Guarantor hereby covenants and agrees that it will not (A) amend,
supplement or otherwise modify the terms of any of the Senior Indenture, the
Senior Notes, the Subordinated Indenture, the Subordinated Debentures or any
document or instrument pertaining to the terms of any of the foregoing so as to
(i) shorten the maturity of the Senior Notes or the Subordinated Debentures,
(ii) increase the interest rate payable on the Senior Notes or the Subordinated
Debentures, (iii) change the subordination provisions contained in the
Subordinated Indenture or the Subordinated Debentures, (iv) change the date or
amount of any scheduled payment of principal of or interest on the Senior Notes
or the Subordinated Debentures, or (v) make the covenants contained in the
Senior Indenture, the Senior Notes, the Subordinated Indenture or the
Subordinated Debentures more onerous to the Guarantor or any of its
Subsidiaries or add any covenants thereto; or (B) give any notice of optional
redemption or optional prepayment or offer to repurchase, or make, either
directly or indirectly, any payment of principal of or interest on or in
redemption, retirement or repurchase of any of the Senior Notes or the
Subordinated Debentures, except for (i) the regularly scheduled payments or
other mandatory payments of principal and interest required by the terms of
such instruments, the Senior Indenture or the Subordinated Indenture, and (ii)
the optional redemption or optional prepayment of principal of the Senior Notes
or the Subordinated Debentures in an aggregate amount, when added to the
principal amount of all other optional redemptions and optional prepayments
made under this clause (B)(ii), not to exceed $50,000,000 provided, that no
Default or Event of Default exists at the time of such redemption or prepayment
and no Default or Event of Default will result therefrom and the Guarantor
delivers to the Agent, on the date of such optional redemption or optional
prepayment, a certificate evidencing compliance with the conditions set forth
in this clause (B)(ii).
(d) The Guarantor shall permit the Banks, through the Agent or any of the
Banks' other designated representatives, to (a) visit and inspect any of the
properties of the Guarantor or any of its Subsidiaries, (b) examine the books
of account of the Guarantor and its Subsidiaries (and to make copies thereof
and extracts therefrom), (c) discuss the affairs, finances and accounts of the
Guarantor and its Subsidiaries with, and to be advised as to the same by, its
and their officers, and (d) conduct commercial finance examinations and
appraisals of assets, all at such reasonable times and intervals as the Agent
or any Bank may reasonably request. Each of the Banks agrees (by its
acceptance of this Guaranty) that it will treat in confidence the information
obtained during any inspection which is designated by the Guarantor as
confidential and will not, without the consent of the Guarantor disclose such
information to any third party and, if any representative or agent of any Bank
or the Agent shall not be an employee of such Bank or the Agent, as the case
may be, or any affiliate of such Bank or the Agent, as the case may be, such
designee shall be reputable and of recognized standing and shall agree in
writing to treat in confidence the information obtained during any such
inspection and, without the prior written consent of the Guarantor, not to
disclose such information to any third party or make use of such information
for personal gain. Notwithstanding the foregoing, the Banks and the Agent may
disclose nonpublic information obtained pursuant to this Guaranty to other
banks or financial institutions who are potential participants or potential
assignees or participants in the Revolving Credit Loans made or to be made
under the Credit Agreement with the Guarantor's consent not to be unreasonably
withheld, and where required or requested by governmental or regulatory
authorities.
(e) The Guarantor hereby authorizes the Agent and, if accompanied by the
Agent, the Banks to communicate directly with the Guarantor's independent
certified public accountants and authorizes such accountants to disclose to the
Agent and the Banks any and all financial statements and other supporting
financial documents and schedules including copies of any management letters
with respect to the business, financial condition and other affairs of the
Guarantor or any of its Subsidiaries. At the request of the Agent, the
Guarantor shall deliver a letter addressed to such accountants instructing them
to comply with the provisions of this clause (e).
Section 9. Further Assurances.
The Guarantor agrees that it will from time to time, at the request of the
Agent, do all such things and execute all such documents as the Agent may
consider necessary or desirable to give full effect to this Guaranty and to
perfect and preserve the rights and powers of the Banks and the Agent
hereunder. The Guarantor acknowledges and confirms that the Guarantor itself
has established its own adequate means of obtaining from the Company on a
continuing basis all information desired by the Guarantor concerning the
financial condition of the Company and that the Guarantor will look to the
Company and not to the Agent or any Bank in order for the Guarantor to keep
adequately informed of changes in the Company's financial condition.
Section 10. Termination; Reinstatement.
This Guaranty shall remain in full force and effect until the Agent is given
written notice of the Guarantor's intention to discontinue this Guaranty,
notwithstanding any intermediate or temporary payment or settlement of the
whole or any part of the Obligations. No such notice shall be effective unless
received and acknowledged by an officer of the Agent at the address of the
Agent for notices set forth in Section 20 of the Credit Agreement. No such
notice shall affect any rights of the Agent or any Bank hereunder, including
without limitation the rights set forth in Section Section 4 and 6 hereof, with
respect to any Obligations incurred or accrued prior to the receipt of such
notice or any Obligations incurred or accrued pursuant to any contract or
commitment in existence prior to such receipt. This Guaranty shall continue to
be effective or be reinstated, notwithstanding any such notice, if at any time
any payment made or value received with respect to any of the Obligations is
rescinded or must otherwise be returned by the Agent or any Bank upon the
insolvency, bankruptcy or reorganization of the Company, or otherwise, all as
though such payment had not been made or value received.
Section 11. Successors and Assigns.
This Guaranty shall be binding upon the Guarantor, its successors and assigns,
and shall inure to the benefit of the Agent and the Banks and their respective
successors, transferees and assigns. Without limiting the generality of the
foregoing sentence, certain of the Banks may assign or otherwise transfer the
Credit Agreement, the Notes, the other Loan Documents or any other agreement or
note held by it evidencing, securing or otherwise executed in connection with
the Obligations, or sell participations in any interest therein, to any other
entity or other person, and such other entity or other person shall thereupon
become vested, to the extent set forth in the agreement evidencing such
assignment, transfer or participation, with all the rights in respect thereof
granted to such Bank herein, all in accordance with Section 19 of the Credit
Agreement. The Guarantor may not assign any of its obligations hereunder.
Section 12. Amendments and Waivers.
No amendment or waiver of any provision of this Guaranty nor consent to any
departure by the Guarantor therefrom shall be effective unless the same shall
be in writing and signed by the Agent with the consent of the Majority Banks.
No failure on the part of the Agent or any Bank to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right.
Section 13. Notices.
All notices and other communications called for hereunder shall be made in
writing and, unless otherwise specifically provided herein, shall be deemed to
have been duly made or given when delivered by hand or mailed first class,
postage prepaid, or, in the case of telegraphic or telexed notice, when
transmitted, answer back received, addressed as follows: if to the Guarantor,
at the address set forth beneath its signature hereto, and if to the Agent, at
the address for notices to the Agent set forth in Section 20 of the Credit
Agreement, or at such address as either party may designate in writing to the
other.
Section 14. Governing Law; Consent to Jurisdiction.
THE GUARANTY IS INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS. The Guarantor agrees that any suit for the enforcement of this
Guaranty may be brought in the courts of the Commonwealth of Massachusetts or
any federal court sitting therein and consents to the nonexclusive jurisdiction
of such court and to service of process in any such suit being made upon the
Guarantor by mail at the address specified by reference in Section 13 hereof.
The Guarantor hereby waives any objection that it may now or hereafter have to
the venue of any such suit or any such court or that such suit was brought in
an inconvenient court.
Section 14. Waiver of Jury Trial.
THE GUARANTOR HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY
ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS GUARANTY,
ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF ANY OF SUCH RIGHTS OR
OBLIGATIONS. Except as prohibited by law, the Guarantor hereby waives any
right which it may have to claim or recover in any litigation referred to in
the preceding sentence any special, exemplary, punitive or consequential
damages or any damages other than, or in addition to, actual damages. The
Guarantor (a) certifies that neither the Agent or any Bank nor any
representative, agent or attorney of the Agent or any Bank has represented,
expressly or otherwise, that the Agent or any Bank would not, in the event of
litigation, seek to enforce the foregoing waivers and (b) acknowledges that, in
entering into the Credit Agreement and the other Loan Documents to which the
Agent or any Bank is a party, the Agent and the Banks are relying upon, among
other things, the waivers and certifications contained in this Section 15.
Section 15. Miscellaneous.
This Guaranty constitutes the entire agreement of the Guarantor with respect to
the matters set forth herein. The rights and remedies herein provided are
cumulative and not exclusive of any remedies provided by law or any other
agreement, and this Guaranty shall be in addition to any other guaranty of or
collateral security for any of the Obligations. The invalidity or
unenforceability of any one or more sections of this Guaranty shall not affect
the validity or enforceability of its remaining provisions. Captions are for
the ease of reference only and shall not affect the meaning of the relevant
provisions. The meanings of all defined terms used in this Guaranty shall be
equally applicable to the singular and plural forms of the terms defined.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed and
delivered as of the date first above written.
JORDAN INDUSTRIES, INC.
By:
Title:
Address: ArborLake Centre,
Suite 550
1751 Lake Cook Road
Deerfield, Illinois 60015
<PAGE>
EXHIBIT D
---------
SECURITY AND PLEDGE AGREEMENT
-----------------------------
This SECURITY AND PLEDGE AGREEMENT, dated as of June 29, 1994, is among
JII, Inc., a Delaware corporation (the "Borrower"), certain subsidiaries of the
Borrower listed on Schedule 1 attached hereto (the "Wholly-Owned Guarantors"),
certain subsidiaries of the Borrower listed on Schedule 2 attached hereto (the
"Non-Wholly-Owned Guarantors") and The First National Bank of Boston, a
national banking association having its principal place of business at 100
Federal Street, Boston, Massachusetts, as agent (the "Agent") for itself and
other banking institutions (hereinafter, collectively, the "Banks") which are
or may become parties to that certain Revolving Credit Agreement, dated as of
the date hereof, among the Borrower, the Banks and the Agent as the same may be
amended, modified or supplemented from time to time (such agreement, as amended
and in effect from time to time, the "Credit Agreement"). The Wholly-Owned
Guarantors and the Non-Wholly-Owned Guarantors shall be referred to herein,
collectively, as the "Guarantors".
WHEREAS, each of the Guarantors expects to receive substantial direct and
indirect benefits from the extension of credit to the Borrower by the Banks
pursuant to the Credit Agreement (which benefits are hereby acknowledged),
including, without limitation, loans from the Borrower; and
WHEREAS, pursuant to that certain Subsidiary Guaranty of even date
herewith (as the same may be amended and in effect from time to time, the
"Subsidiary Guaranty") in favor of each of the Banks and the Agent, each of the
Wholly-Owned Guarantors has guaranteed the payment and performance of the
Obligations (as defined in the Credit Agreement); and
WHEREAS, pursuant to that certain Non-Wholly-Owned Subsidiary Guaranty of
even date herewith (as the same may be amended and in effect from time to time,
the "Non-Wholly-Owned Subsidiary Guaranty") in favor of each of the Banks and
the Agent, each of the Non-Wholly-Owned Guarantors has guaranteed the payment
and performance of the Obligations (as defined in the Credit Agreement); and
WHEREAS, it is a condition precedent to the Banks' making any loans or
otherwise extending any credit to the Borrower that the Borrower and each of
the Guarantors execute and deliver to the Agent, for the benefit of itself and
the Banks, a security agreement in substantially the form hereof; and
WHEREAS, the Borrower and each of the Guarantors wishes to grant security
interests in favor of the Agent, for the benefit of the Banks and the Agent, as
herein provided;
NOW THEREFORE, the Borrower and each of the Guarantors agrees with the
Agent as follows:
Section 1. Defined Terms. All capitalized terms which are used
herein without definition which are defined in the Credit Agreement shall have
the same meanings herein as in the Credit Agreement. All terms defined in the
Uniform Commercial Code of the Commonwealth of Massachusetts shall have the
same definitions herein as specified therein.
Section 2. Grant of Security Interest. The Borrower and each of
the Guarantors hereby jointly and severally grants to the Agent, for the
benefit of the Banks, to secure the payment and performance in full of all of
the Obligations (as hereinafter defined), a continuing security interest in and
lien on all of the Borrower's and, subject to the provisions relating to
Non-Wholly-Owned Guarantors, all of each Guarantor's properties, assets and
rights of every kind and nature, wherever located, whether now owned or
hereafter acquired or arising, and all proceeds and products thereof and
accessions thereto (all of the same being hereinafter called the "Collateral"),
including, without limiting the generality of the foregoing, the following
properties, assets and rights of the Borrower and each of the Guarantors,
whether now owned or hereafter acquired:
(a) all goods, accounts, accounts receivable, and contract rights;
(b) all rights to the payment of money, including tax and insurance
refund claims, insurance proceeds and tort claims, and all rights to proceeds
of any termination, including any partial termination, of employee benefit
plans, and all deposit accounts;
(c) all chattel paper, documents, instruments (including certificated
securities) and uncertificated securities, including without limitation, the
shares of capital stock owned by the Borrower or any of the Guarantors
described on Schedule A attached hereto and any additional shares of the
capital stock of any class of any corporation or any securities exchangeable
for or convertible into shares of such capital stock of any class acquired by
such Person, by purchase, stock dividend, distribution of capital or otherwise
(the "Stock"), together with all income therefrom, increases therein and
proceeds thereof;
(d) all general intangibles, license fees, patents, patent
applications trademarks, trademark applications, service marks and trade names
owned by the Borrower or any of the Guarantors, including, without limitation
those set forth on Schedule B attached hereto (collectively the "Patents and
Trademarks"), together with all right, title and interest of such Person in and
to all of the same which such Person may hereinafter acquire, the right to file
and prosecute applications for patents and trademarks and similar intellectual
property anywhere in the world and the goodwill of the business connected with
the use of and symbolized by the same, the right to sue for infringement for
any of the same, together with all assets which uniquely reflect the good will
of the business of the Borrower or any of the Guarantors, including but not
limited to, such Person's trade names, franchises, customer lists, trade
secrets, corporate and other business records, license rights, advertising
materials, methods, processes, know-how, sales literature, drawings,
specifications, descriptions, inventions, name plates, catalogues, copyrights
and copyright applications, including, without limitation, those set forth on
Schedule B attached hereto (the "Copyrights"), computer programs, computer
software, engineering drawings, dealer contracts, supplier contracts,
distribution agreements, and proprietary information; and
(e) all furniture, fixtures, equipment, inventory, raw materials, work
in progress, books and records.
As used herein, the term "Obligations" shall mean, collectively, all of
the obligations of the Borrower and all obligations of each of the Guarantors
to the Banks and the Agent, whether direct or indirect, absolute or contingent,
due or to become due, now existing or hereafter arising, as direct obligor or
guarantor, under or in relation to the Credit Agreement and the other Loan
Documents, in each case as now in effect or as hereafter amended or
supplemented, provided, however, that the amount of Obligations secured
hereunder with respect to each Non-Wholly-Owned Guarantor shall be equal to
such Non-Wholly-Owned Guarantor's Maximum Liability (as defined in the Credit
Agreement).
Notwithstanding the foregoing provisions of this Section 2, such grant of
security interest shall not extend to, and the term "Collateral" shall not
include, any chattel paper and general intangibles which are now or hereafter
held by the Borrower or any Guarantor as licensee, lessee or otherwise, to the
extent that (a) such chattel paper and general intangibles are not assignable
or capable of being encumbered as a matter of law or under the terms of the
license, lease or other agreement applicable thereto (but solely to the extent
that any such restriction shall be enforceable under applicable law), without
the consent of the licensor or lessor thereof or other applicable party thereto
and (b) such consent has not been obtained; provided, however, that the
foregoing grant of security interest shall extend to, and the term "Collateral"
shall include, (i) any and all proceeds of such chattel paper and general
intangibles to the extent that the assignment or encumbering of such proceeds
is not so restricted and (ii) upon any such licensor, lessor or other
applicable party consent with respect to any such otherwise excluded chattel
paper or general intangibles being obtained, thereafter such chattel paper or
general intangibles as well as any and all proceeds thereof that might have
theretofore have been excluded from such grant of a security interest and the
term "Collateral".
With respect to JI Aviation, Inc., such grant of security interest shall
not extend to, and the term "Collateral" shall not include, the following:
(a) a 50% undivided interest in a BAe model 125-1000A jet aircraft and
all agreements and documents executed by, or for the benefit of, JI Aviation,
Inc. in connection with the Lease and Security Agreement to be executed after
the date hereof by Sumitomo Bank Leasing and Finance, Inc. and JI Aviation,
Inc; and
(b) JI Aviation, Inc.'s interest in the Gulfstream II aircraft, serial
number 213, and all agreements and documents executed by, or for the benefit
of, JI Aviation, Inc. in connection with the lease agreement referenced in item
15(b) of Schedule 9.1 attached to the Credit Agreement.
Section 3. Delivery of Instruments, Etc. Pursuant to the terms hereof, the
Borrower and each of the Guarantors has endorsed, assigned and delivered to the
Agent all negotiable or non-negotiable instruments (including certificated
securities) and chattel paper pledged by it hereunder, together with
instruments of transfer or assignment duly executed in blank as the Agent may
have specified. In the event that the Borrower or any of the Guarantors shall,
after the date of this Agreement, acquire any other negotiable or
non-negotiable instruments (including certificated securities) or chattel paper
to be pledged by it hereunder, such Person shall forthwith endorse, assign and
deliver the same to the Agent, accompanied by such instruments of transfer or
assignment duly executed in blank as the Agent may from time to time specify.
To the extent that any securities are uncertificated, appropriate book-entry
transfers reflecting the pledge of such securities created hereby have been or,
in the case of uncertificated securities hereafter acquired by the Borrower or
any of the Guarantors, will at the time of such acquisition be, duly made for
the account of the Agent or one or more nominees of the Agent with the issuer
of such securities or other appropriate book-entry facility or financial
intermediary, with the Agent having at all times the right to obtain definitive
certificates (in the Agent's name or in the name of one or more nominees of
the Agent) where the issuer customarily or otherwise issues certificates, all
to be held as Collateral hereunder. The Borrower and each of the Guarantors
hereby acknowledges that the Agent may, in its discretion, appoint one or more
financial institutions to act as the Agent's agent in holding in custodial
account instruments or other financial assets in which the Agent is granted a
security interest hereunder, including, without limitation, certificates of
deposit and other instruments evidencing short term obligations.
Section 4. Title to Collateral; No Liens. The Borrower and each of the
Guarantors are the owners of the Collateral free from any adverse lien,
security interest or other encumbrance, except for the security interest
created by this Agreement. The Borrower and each of the Guarantors covenants
that it shall defend the rights and security interests of the Agent against all
claims and demands of all Persons at any time claiming the same or any
interests therein adverse to the Agent. None of the Borrower or any of the
Guarantors shall pledge, mortgage or create, or suffer to exist a security
interest in the Collateral in favor of any Person other than the Agent. None
of the Collateral constitutes, or is the proceeds of "farm products" as defined
in Section 9-109(3) of the Uniform Commercial Code of the Commonwealth of
Massachusetts. None of the account debtors in respect of any accounts, chattel
paper or general intangibles and none of the obligors in respect of any
instruments included in the Collateral is a governmental authority subject to
the Federal Assignment of Claims Act.
Section 5. Continuous Perfection. The Borrower's and each of the Guarantor's
chief executive office and principal place of business is listed on Schedule C
attached hereto, at which location its books and records are kept. The
Borrower and each of the Guarantors agrees that it will not change the location
of its chief executive office or the location where its books and records are
kept without 30 days prior written notice to the Agent. The Collateral, to the
extent not delivered to the Agent pursuant to Section 3 hereof, shall be kept
at those locations listed on Schedule C attached hereto, and the Borrower and
each of the Guarantors covenants and agrees that it will not remove the
Collateral from such locations without providing at least thirty (30) days
prior written notice thereof to the Agent.
Section 6. Intellectual Property. The Borrower and each of the Guarantors
hereby represents and warrants to the Agent that, as of the date hereof, it has
no right, title or interest in any patent, copyright, trademark or service mark
registrations, or in any pending applications for same, except those listed on
Schedule B attached hereto. The Borrower and each of the Guarantors agrees
promptly to furnish to the Agent written notice of each patent, copyright,
trademark or service mark, or any applications for same, in which it may
acquire any right, title or interest. The Borrower and each of the Guarantors
shall, on request by the Agent, execute, acknowledge and deliver all such
documents and instruments as the Agent may reasonably require to confirm the
Agent's security interest in and to any patent, copyright, trademark or service
mark, or application for same, as part of the Collateral hereunder, and hereby
appoints the Agent as such Person's attorney-in-fact to execute and file the
same; the Agent shall not exercise such right under this Agreement unless such
Person fails to do so.
Section 7. No Transfers. None of the Borrower or any of the Guarantors will
sell or offer to sell or otherwise transfer the Collateral or any interest
therein, except as permitted by Section 9.5.2 of the Credit Agreement.
Section 8. Collateral Protection Expenses; Preservation of Collateral. (a) In
its discretion, if the Borrower or any of the Guarantors shall fail to comply
with its obligations herein to maintain and protect the Collateral, the Agent
may discharge taxes and other encumbrances at any time levied or placed on the
Collateral, make repairs thereof and pay any necessary filing fees. The
Borrower and each of the Guarantors hereby jointly and severally agrees to
reimburse the Agent on demand for any and all expenditures so made, and until
paid the amount thereof shall be a debt secured by the Collateral. The Agent
shall have no obligation to the Borrower or any of the Guarantors to make any
such expenditures, nor shall the making thereof relieve the Borrower or any
such Guarantor of any Default or Event of Default.
(b) Anything herein to the contrary notwithstanding, the Borrower and
each of the Guarantors shall remain liable under each contract or agreement
comprised in the Collateral to be observed or performed by such Person
thereunder. Neither the Agent nor any Bank shall have any obligation or
liability under any such contract or agreement by reason of or arising out of
this Agreement or the receipt by the Agent or any Bank of any payment relating
to any of the Collateral, nor shall the Agent or any Bank be obligated in any
manner to perform any of the obligations of the Borrower or any of the
Guarantors under or pursuant to any such contract or agreement, to make inquiry
as to the nature or sufficiency of any payment received by the Agent or any
Bank in respect of the Collateral or as to the sufficiency of any performance
by any party under any such contract or agreement, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to the Agent or to which the Agent
or any Bank may be entitled at any time or times. The Agent's sole duty with
respect to the custody, safe keeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the Uniform Commercial
Code of the Commonwealth of Massachusetts or otherwise, shall be to deal with
such Collateral in the same manner as the Agent deals with similar property for
its own account.
Section 9. Concerning the Stock. (a) Other than in connection with a sale
permitted under the terms of the Credit Agreement, any sums paid upon or with
respect of any of the Stock upon the liquidation or dissolution of the issuer
thereof shall be paid over to the Agent to be held by it as security for the
Obligations; and, in case any distribution of capital shall be made on or in
respect of any of the Stock, or any property shall be distributed upon or with
respect to any of the Stock pursuant to the recapitalization or
reclassification of the capital of the issuer thereof or pursuant to the
reorganization thereof, the property so distributed shall be delivered to the
Agent to be held by it as security for the Obligations. All sums of money and
property paid or distributed in respect of the Stock upon such a liquidation,
dissolution, recapitalization or reclassification which are received by the
Borrower or any of the Guarantors shall, until paid or delivered to the Agent,
be held in trust for the Agent as security for the Obligations.
(b) The Agent may, at any time after the occurrence and during the
continuance of an Event of Default, at its option, transfer to itself or any
nominee for security purposes the Stock or any other security constituting
Collateral, and, any time after the occurrence and during the continuance of an
Event of Default, receive any income thereon and apply it to the Obligations.
In addition and whether or not Obligations are due, upon the occurrence and
during the continuance of an Event of Default, the Agent may demand, sue for,
collect, or make any settlement or compromise it deems desirable with respect
to the Collateral. Regardless of the adequacy of Collateral or any other
security for the Obligations, any deposits or other sums at any time credited
by or due from the Agent to the Borrower or to any of the Guarantors may, upon
the occurrence and during the continuance of an Event of Default, at any time
be applied to or set off against any of the Obligations to the extent permitted
by applicable law.
(c) So long as no Event of Default is continuing, the Borrower and each
of the Guarantors shall be entitled to receive all cash dividends paid in
respect of the Stock owned by it, to vote such Stock, and to give consents,
waivers, and ratifications in respect of such Stock, provided that no vote
shall be cast, and no consent, waiver, or ratification given or action taken
which would be inconsistent with or violate any provisions of this Agreement,
the Credit Agreement, or the other Loan Documents.
Section 10.Notification to Account Debtors and Other Obligors. If an Event of
Default shall have occurred and be continuing, the Borrower and each of the
Guarantors shall, at the request of the Agent, notify account debtors on
accounts, chattel paper and general intangibles of such Person and obligors on
instruments for which such Person is an obligee of the security interest of the
Agent in any account, chattel paper, general intangible or instrument and that
payment thereof is to be made directly to the Agent or to any financial
institution designated by the Agent as the Agent's agent therefor, and the
Agent may itself, if an Event of Default shall have occurred and be continuing,
without notice to or demand upon the Borrower or any of the Guarantors, so
notify account debtors and obligors. After the making of such a request or the
giving of any such notification, the Borrower and each of the Guarantors shall
hold any proceeds of collection of accounts, chattel paper, general intangibles
and instruments received by such Person as trustee for the Agent, for the
benefit of the Banks and the Agent, without commingling the same with other
funds of such Person and shall turn the same over to the Agent in the identical
form received, together with any necessary endorsements or assignments. The
Agent shall apply the proceeds of collection of accounts, chattel paper,
general intangibles and instruments received by the Agent to the Obligations,
such proceeds to be immediately entered after final payment in cash or solvent
credits of the items giving rise to them.
Section 11. Further Assurances. The Borrower and each of the Guarantors, at
its own expense, shall do, make, execute and deliver all such additional and
further acts, things, deeds, assurances and instruments as the Agent may
require more completely to vest in and assure to the Agent and the Banks their
respective rights hereunder or in any of the Collateral, including, without
limitation, (a) executing, delivering and, where appropriate, filing financing
statements and continuation statements under the Uniform Commercial Code, (b)
obtaining governmental and other third party consents and approvals, (c)
obtaining waivers from mortgagees and landlords and (d) taking all actions
required by Sections 8-313 and 8-321 of the Uniform Commercial Code, as
applicable in each relevant jurisdiction, with respect to certificated and
uncertificated securities.
Section 12. Power of Attorney. (a) The Borrower and each of the Guarantors
hereby irrevocably constitutes and appoints the Agent and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorneys-in-fact with full irrevocable power and authority in the place and
stead of such Person or in the Agent's own name, for the purpose of carrying
out the terms of this Agreement, to take any and all appropriate action and to
execute any and all documents and instruments that may be necessary or
desirable to accomplish the purposes of this Agreement and, without limiting
the generality of the foregoing, hereby gives said attorneys the power and
right, on behalf of such Person, without notice to or assent by such
Subsidiary, to do the following:
(i) upon the occurrence and during the continuance of an Event of
Default, generally to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral in such manner as
is consistent with the Uniform Commercial Code of the Commonwealth of
Massachusetts and as fully and completely as though the Agent were the
absolute owner thereof for all purposes, and to do at such Person's
expense, at any time, or from time to time, all acts and things which the
Agent deems necessary to protect, preserve or realize upon the Collateral
and the Agent's security interest therein, in order to effect the intent
of this Agreement, all as fully and effectively as such Person might do,
including, without limitation, (A) the filing and prosecuting of
registration and transfer applications with the appropriate federal or
local agencies or authorities with respect to trademarks, copyrights and
patentable inventions and processes, (B) upon written notice to such
Person, the exercise of voting rights with respect to voting securities,
which rights may be exercised, if the Agent so elects, with a view to
causing the liquidation in a commercially reasonable manner of assets of
the issuer of any such securities and (C) the execution, delivery and
recording, in connection with any sale or other disposition of any
Collateral, of the endorsements, assignments or other instruments of
conveyance or transfer with respect to such Collateral; and
(ii) to file such financing statements with respect hereto, with
or without such Person's signature, or a photocopy of this Agreement in
substitution for a financing statement, as the Agent may deem appropriate
and to execute in such Person's name such financing statements and
amendments thereto and continuation statements which may require such
Person's signature.
(b) To the extent permitted by law, the Borrower and each of the
Guarantors hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable.
(c) The powers conferred on the Agent hereunder are solely to protect
the interests of the Agent and the Banks in the Collateral and shall not impose
any duty upon the Agent to exercise any such powers. The Agent shall be
accountable only for the amounts that it actually receives as a result of the
exercise of such powers and neither it nor any of its officers, directors,
employees or agents shall be responsible to the Borrower or any of the
Guarantors for any act or failure to act, except for the Agent's own gross
negligence or willful misconduct.
Section 13.Remedies. (a) Upon the occurrence and during the continuance of an
Event of Default, the Agent may, without notice or demand, declare this
Agreement to be in default, and the Agent shall thereafter have in any
jurisdiction in which enforcement hereof is sought, in addition to all other
rights and remedies, the rights and remedies of a secured party under the
Uniform Commercial Code, including without limitation the right to take
possession of the Collateral, and for that purpose the Agent may, so far as the
Borrower and each of the Guarantors can give authority therefor, enter upon any
premises on which the Collateral may be situated and remove the same therefrom
to the extent permitted by applicable law, and, in addition, the Agent shall
thereafter have the following rights and remedies (to the extent permitted by
applicable law) in any jurisdiction in which enforcement as sought:
(i) if the Agent so elects and gives notice of such election to
the Borrower or the applicable Guarantor, the Agent may vote any or all
of the Stock possessing voting rights (whether or not the same shall have
been transferred into its name or the name of its nominee or nominees)
and give all consents, waivers and ratifications in respect of the Stock
and otherwise act with respect thereto as though it were the outright
owner thereof (the Borrower and each of the Guarantors hereby irrevocably
constituting and appointing the Agent the proxy and attorney-in-fact of
such Person, with full power of substitution, to do so);
(ii) the Agent may demand, sue for, collect or make any compromise
or settlement the Agent deems suitable in respect of any Collateral held
by it hereunder;
(iii) the Agent may sell, resell, assign and deliver, or otherwise
dispose of any or all of the Collateral, for cash and/or credit and upon
such terms, at such place or places and at such time or times and to such
persons, firms, companies or corporations as the Agent thinks expedient,
all without further demand for performance by the Borrower or any of the
Guarantors or any further notice or advertisement whatsoever except such
as may be required by law; and
(iv) the Agent may cause all or any part of the Stock held by it
to be transferred into its name or the name of its nominee or nominees,
if it has not already done so.
(b) The Borrower and each of the Guarantors recognizes that the Agent
may be unable to effect a public sale of the Stock by reason of certain
prohibitions contained in the Securities Act of 1933, as amended, but may be
compelled to resort to one or more private sales thereof to a restricted group
of purchasers. The Borrower and each of the Guarantors recognizes that any
such private sales may be at prices and other terms less favorable to the
seller than if sold at public sales and that such private sales shall not by
reason thereof be deemed not to have been made in a commercially reasonable
manner. The Agent shall be under no obligation to delay a sale of any of the
Stock for the period of time necessary to permit the issuer of such securities
to register such securities for public sale under the Securities Act of 1933,
as amended, even if the issuer would agree to do so.
(c) The Agent may in its discretion require the Borrower or any of the
Guarantors to assemble all or part of the Collateral at such location or
locations as the Agent may designate. Unless the Collateral is perishable or
threatens to decline speedily in value or is of a type customarily sold on a
recognized market, the Agent shall give the Borrower and the Guarantors at
least fifteen (15) days' prior written notice of the time and place of any
public sale of Collateral or of the time after which any private sale or any
other intended disposition is to be made. The Borrower and each of the
Guarantors hereby acknowledges that fifteen (15) days prior written notice of
such sale or sales shall be reasonable notice. The Agent or any of the Banks
may buy any part or all of the Collateral at any public sale and if any part or
all of the Collateral is of a type customarily sold in a recognized market or
is of the type which is the subject of widely distributed price quotations, the
Agent or any of the Banks may buy at private sale to the extent permitted by
applicable law and may make payments of the purchase price therefor by any
means.
(d) All of the Agent's rights and remedies hereunder are cumulative,
not exclusive, and enforceable successively, alternatively or concurrently, at
such time or times as the Agent deems expedient. To the extent permitted by
law, the Borrower and each of the Guarantors hereby waives any and all rights
that it may have to judicial hearing in advance of the enforcement of any of
the Agent's rights hereunder, including without limitation, the right following
an Event of Default to take immediate possession of the Collateral and exercise
rights with respect thereto.
Section 14.No Waiver; Marshalling. (a) Except as otherwise specifically
provided herein, and to the extent permitted by law, the Borrower and each of
the Guarantors waives demand, notice, protest, notice of acceptance of this
Agreement, notice of loans made, credit extended, Collateral received or
delivered or other action taken in reliance hereon and all other demands and
notices of any description. With respect to both the Obligations and the
Collateral, the Borrower and each of the Guarantors assents to any extension or
postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of Collateral, to the addition or release of
any party or person primarily or secondarily liable, to the acceptance of
partial payment thereon and the settlement, compromising or adjusting of any
thereof, all in such manner and at such time or times as the Agent may deem
advisable. Except as otherwise provided by applicable law, the Agent shall
have no duty as to the collection or protection of the Collateral or any income
thereon, nor as to the preservation of rights against prior parties, nor as to
the preservation of any rights pertaining thereto beyond the safe custody
thereof as set forth in Section 8 hereof. The Agent shall not be deemed to
have waived any of its rights upon or under the Obligations or the Collateral
unless such waiver shall be in writing and signed by the Agent with the consent
of the Majority Banks. No delay or omission on the part of the Agent in
exercising any right shall operate as a waiver of such right or any other
right. A waiver on any one occasion shall not be construed as a bar to or
waiver of any right on any future occasion. All rights and remedies of the
Agent on the Obligations or the Collateral, whether evidenced hereby or by any
other instrument or papers, shall be cumulative and may be exercised singularly
or concurrently at such time or at such times as the Agent deems expedient.
(b) Except as otherwise provided by applicable law, the Agent may
exercise its rights with respect to the Collateral without resorting or regard
to other collateral or sources of reimbursement for liability. Except as
otherwise provided by applicable law, neither the Agent nor any Bank shall be
required to marshall any present or future collateral security for (including
but not limited to this Agreement and the Collateral subject to the security
interest created hereby), or other assurances of payment of, the Obligations or
any of them, or to resort to such collateral security or assurances of payment
in any particular order; and all of the rights of the Agent hereunder and of
the Agent or any Bank in respect of such collateral security and other
assurances of payment shall be cumulative and in addition to all other rights,
however existing or arising. To the extent that it lawfully may, the Borrower
and each of the Guarantors hereby agrees that it will not invoke any law
relating to the marshalling of collateral which might cause delay in or impede
the enforcement of the Agent's rights under this Agreement or under any other
instrument evidencing any of the Obligations or under which any of the
Obligations is outstanding or by which any of the Obligations is secured or
guaranteed, and to the extent that it lawfully may, the Borrower and each of
the Guarantors hereby irrevocably waives the benefits of all such laws.
Section 15.No Impairment. To the extent permitted by law, the obligations of
the Borrower and each of the Guarantors under this Agreement shall remain in
full force and effect without regard to, and shall not be impaired by (a) any
bankruptcy, insolvency, reorganization, arrangement, readjustment, composition,
liquidation or the like of such Person, to the extent permitted by law; (b)
except to the extent expressly waived, any exercise or nonexercise, or any
waiver, by the Agent of any right, remedy, power or privilege under or in
respect of any of the Obligations or any security therefor (including this
Agreement); (c) except to the extent so amended or modified, any amendment to
or modification of this Agreement or any instrument evidencing any of the
Obligations or pursuant to which any of them were issued; (d) except to the
extent so amended or modified, any amendment to or modification of any
instrument or agreement (other than this Agreement) securing any of the
Obligations; or (e) the taking of additional security for or any guaranty of
any of the Obligations or the release or discharge or termination of any
security or guaranty for any of the Obligations; and whether or not the
Borrower or any of the Guarantors shall have notice or knowledge of any of the
foregoing.
Section 16.Proceeds of Dispositions; Expenses. The Borrower and each of the
Guarantors jointly and severally agrees to pay to the Agent on demand any and
all reasonable expenses, including reasonable counsel fees and disbursements,
incurred or paid by the Agent in protecting or enforcing its rights upon or
under the Obligations or the Collateral. After deducting all of said expenses,
the residue of any proceeds of collection or sale of the Obligations or
Collateral shall be applied to the payment of principal or interest on the
Obligations in such order or preference as provided in the Credit Agreement,
with proper allowance being made for Obligations not then due being made, and
any excess shall be returned to the Borrower or the applicable Guarantor, and
the Borrower and each of the Guarantors shall remain jointly and severally
liable for any deficiency.
Section 17.Severability. In the event any provision of this Agreement shall
for any reason be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other term
or provision hereof. The parties hereto agree that they will negotiate in good
faith to replace any provision hereof so held invalid, illegal or unenforceable
with a valid provision which is as similar as possible in substance to the
invalid, illegal or unenforceable provision.
Section 18.Notices. All notices hereunder shall be given in the manner and at
the addresses provided for in the Credit Agreement, the Subsidiary Guaranty and
the Non-Wholly-Owned Subsidiary Guaranty.
Section 19. Governing Law; Consent to Jurisdiction. This Agreement and all
rights and obligations hereunder, including matters of construction, validity
and performance, shall be governed by and construed in accordance with the laws
of the Commonwealth of Massachusetts. The Borrower and each of the Guarantors
agrees that any suit for the enforcement of this Agreement maybe brought in the
courts of the Commonwealth of Massachusetts or any federal court sitting
therein and consents to the non-exclusive jurisdiction of such court and to
service of process in any such suit being made upon such Person by mail at the
address specified in Section 18 hereof. The Borrower and each of the
Guarantors hereby waives any objection that it may now or hereafter have to the
venue of any such suit or any such consent or that such suit is brought in an
inconvenient court.
Section 20. Waiver of Jury Trial. THE BORROWER AND EACH OF THE
GUARANTORS WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR
OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF ANY SUCH RIGHTS OR OBLIGATIONS.
Except as prohibited by law, the Borrower and each of the Guarantors waives any
right which it may have to claim or recover in any litigation referred to in
the preceding sentence any special, exemplary, punitive or consequential
damages or any damages other than, or in addition to, actual damages. The
Borrower and each of the Guarantors (a) certifies that neither the Agent or any
Bank nor any representative, agent or attorney of the Agent or any Bank has
represented, expressly or otherwise, that the Agent nor any Bank would not, in
the event of litigation, seek to enforce the foregoing waivers and (b)
acknowledges that, in entering into the Credit Agreement and the other Loan
Documents to which the Agent or any Bank is a party, the Agent and the Banks
are relying upon, among other things, the waivers and certifications contained
in this Section 20.
Section 21.Miscellaneous. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated except by a written instrument
expressly referring to this Agreement and to the provisions so modified or
limited, and executed by the party to be charged. This Agreement and all
obligations of the Borrower and each of the Guarantors shall be binding upon
the successors and assigns of each of such Persons, and shall, together with
the rights and remedies of the Agent hereunder, inure to the benefit of the
Agent, its successors and assigns. The Borrower and each of the Guarantors
hereby acknowledges receipt of copies of this Agreement. The headings of each
section of this Agreement are for convenience of reference only and shall not
define or limit the provisions thereof. This Agreement is intended to take
effect as a sealed instrument.
IN WITNESS WHEREOF, the Borrower and each of the Guarantors has caused
this agreement to be executed by its duly authorized officer as of the date
first written above.
JII, INC.
By:______________________________________
Title: Vice President
THE IMPERIAL ELECTRIC COMPANY
By:______________________________________
Title: Vice President
THE SCOTT MOTORS COMPANY
By:______________________________________
Title: Vice President
GEAR RESEARCH, INC.
By:_______________________________________
Title: Vice President
DACCO, INCORPORATED
By:________________________________________
Title: Vice President
DETROIT TRANSMISSION PRODUCTS CO.
By:_________________________________________
Title: Vice President
BORG MANUFACTURING
By:_________________________________________
Title: Vice President
TRANSMISSION PARTS WAREHOUSE, INC.
By:_________________________________________
Title: Vice President
ABC TRANSMISSION PARTS WAREHOUSE,
INC.
By:_________________________________________
Title: Vice President
NASHVILLE TRANSMISSION PARTS,
INC.
By:_________________________________________
Title: Vice President
DACCO/DETROIT OF FLORIDA, INC.
By:_________________________________________
Title: Vice President
DACCO/DETROIT OF MINNESOTA, INC.
By:_________________________________________
Title: Vice President
DACCO/DETROIT OF COLORADO, INC.
By:_________________________________________
Title: Vice President
DACCO/DETROIT OF INDIANA, INC.
By:________________________________________
Title: Vice President
DACCO/DETROIT OF MISSOURI, INC.
By:________________________________________
Title: Vice President
DACCO/DETROIT OF ARIZONA, INC.
By:________________________________________
Title: Vice President
DACCO/DETROIT OF MEMPHIS, INC.
By:________________________________________
Title: Vice President
DACCO/DETROIT OF NEBRASKA, INC.
By:________________________________________
Title: Vice President
DACCO/DETROIT OF ALABAMA, INC.
By:________________________________________
Title: Vice President
DACCO/DETROIT OF NEW JERSEY, INC.
By:________________________________________
Title: Vice President
DACCO/DETROIT OF MICHIGAN, INC.
By:________________________________________
Title: Vice President
DACCO/DETROIT OF NORTH CAROLINA,
INC.
By:________________________________________
Title: Vice President
DACCO/DETROIT OF OKLAHOMA, INC.
By:________________________________________
Title: Vice President
DACCO/DETROIT OF TEXAS, INC.
By:________________________________________
Title: Vice President
DACCO/DETROIT OF SOUTH CAROLINA,
INC.
By:________________________________________
Title: Vice President
RIVERSIDE BOOK AND BIBLE
HOUSE, INCORPORATED
By:________________________________________
Title: Vice President
WORLD BIBLE PUBLISHERS, INC.
By:________________________________________
Title: Vice President
AIM ELECTRONICS CORPORATION
By:_________________________________________
Title: Vice President
BEEMAK PLASTICS, INC.
By:_________________________________________
Title: Vice President
CAMBRIDGE PRODUCTS CORPORATION
By:________________________________________
Title: Vice President
HUDSON LOCK, INC.
By:________________________________________
Title: Vice President
JI AVIATION, INC.
By:________________________________________
Title: Vice President
JHRC, INC.
By:_______________________________________ _
Title: Vice President
DURA-LINE CORPORATION
By:________________________________________
Title: Vice President
SATE-LITE MANUFACTURING COMPANY
By:________________________________________
Title: Vice President
PARSONS PRECISION PRODUCTS, INC.
By:________________________________________
Title: Vice President
JII/SALES PROMOTION ASSOCIATES,
INC.
By:________________________________________
Title: Vice President
Accepted:
THE FIRST NATIONAL BANK
OF BOSTON, as Agent
By:______________________________
Title: Vice President
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _______ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of JII, Inc. and that said instrument was signed, sealed and
delivered on behalf of said corporation by authority of its Board of Directors,
and said _____________________ acknowledged said instrument to be the free act
and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this ________ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of The Imperial Electric Company and that said instrument
was signed, sealed and delivered on behalf of said corporation by authority of
its Board of Directors, and said Thomas Spielberger acknowledged said
instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _______ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of The Scott Motors Company and that said instrument was
signed, sealed and delivered on behalf of said corporation by authority of its
Board of Directors, and said Thomas Spielberger acknowledged said instrument to
be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _______ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of Gear Research, Inc. and that said instrument was signed,
sealed and delivered on behalf of said corporation by authority of its Board of
Directors, and said Thomas Spielberger acknowledged said instrument to be the
free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _______ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of DACCO, Incorporated and that said instrument was signed,
sealed and delivered on behalf of said corporation by authority of its Board of
Directors, and said Thomas Spielberger acknowledged said instrument to be the
free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _______ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of Detroit Transmissions Products Co. and that said
instrument was signed, sealed and delivered on behalf of said corporation by
authority of its Board of Directors, and said Thomas Spielberger acknowledged
said instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _______ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of Borg Manufacturing and that said instrument was signed,
sealed and delivered on behalf of said corporation by authority of its Board of
Directors, and said Thomas Spielberger acknowledged said instrument to be the
free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of Transmission Parts Warehouse, Inc. and that said
instrument was signed, sealed and delivered on behalf of said corporation by
authority of its Board of Directors, and said Thomas Spielberger acknowledged
said instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of ABC Transmission Parts Warehouse, Inc. and that said
instrument was signed, sealed and delivered on behalf of said corporation by
authority of its Board of Directors, and said Thomas Spielberger acknowledged
said instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of Nashville Transmission Parts, Inc. and that said
instrument was signed, sealed and delivered on behalf of said corporation by
authority of its Board of Directors, and said Thomas Spielberger acknowledged
said instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of DACCO/Detroit of Florida, Inc. and that said instrument
was signed, sealed and delivered on behalf of said corporation by authority of
its Board of Directors, and said Thomas Spielberger acknowledged said
instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of DACCO/Detroit of Minnesota, Inc. and that said instrument
was signed, sealed and delivered on behalf of said corporation by authority of
its Board of Directors, and said Thomas Spielberger acknowledged said
instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of DACCO/Detroit of Colorado, Inc. and that said instrument
was signed, sealed and delivered on behalf of said corporation by authority of
its Board of Directors, and said Thomas Spielberger acknowledged said
instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of DACCO/Detroit of Indiana, Inc. and that said instrument
was signed, sealed and delivered on behalf of said corporation by authority of
its Board of Directors, and said Thomas Spielberger acknowledged said
instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of DACCO/Detroit of Missouri, Inc. and that said instrument
was signed, sealed and delivered on behalf of said corporation by authority of
its Board of Directors, and said Thomas Spielberger acknowledged said
instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of DACCO/Detroit of Arizona, Inc. and that said instrument
was signed, sealed and delivered on behalf of said corporation by authority of
its Board of Directors, and said Thomas Spielberger acknowledged said
instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of DACCO/Detroit of Memphis, Inc. and that said instrument
was signed, sealed and delivered on behalf of said corporation by authority of
its Board of Directors, and said Thomas Spielberger acknowledged said
instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of DACCO/Detroit of Nebraska, Inc. and that said instrument
was signed, sealed and delivered on behalf of said corporation by authority of
its Board of Directors, and said Thomas Spielberger acknowledged said
instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of DACCO/Detroit of Alabama, Inc. and that said instrument
was signed, sealed and delivered on behalf of said corporation by authority of
its Board of Directors, and said Thomas Spielberger acknowledged said
instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of DACCO/Detroit of New Jersey, Inc. and that said
instrument was signed, sealed and delivered on behalf of said corporation by
authority of its Board of Directors, and said Thomas Spielberger acknowledged
said instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of DACCO/Detroit of Michigan, Inc. and that said instrument
was signed, sealed and delivered on behalf of said corporation by authority of
its Board of Directors, and said Thomas Spielberger acknowledged said
instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of DACCO/Detroit of North Carolina, Inc. and that said
instrument was signed, sealed and delivered on behalf of said corporation by
authority of its Board of Directors, and said Thomas Spielberger acknowledged
said instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of DACCO/Detroit of Oklahoma, Inc. and that said instrument
was signed, sealed and delivered on behalf of said corporation by authority of
its Board of Directors, and said Thomas Speilberger acknowledged said
instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of DACCO/Detroit of Texas, Inc. and that said instrument was
signed, sealed and delivered on behalf of said corporation by authority of its
Board of Directors, and said Thomas Spielberger acknowledged said instrument to
be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of DACCO/Detroit of South Carolina, Inc. and that said
instrument was signed, sealed and delivered on behalf of said corporation by
authority of its Board of Directors, and said Thomas Spielberger acknowledged
said instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of Riverside Book and Bible House, Incorporated and that
said instrument was signed, sealed and delivered on behalf of said corporation
by authority of its Board of Directors, and said Thomas Spielberger
acknowledged said instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of World Bible Publishers, Inc. and that said instrument was
signed, sealed and delivered on behalf of said corporation by authority of its
Board of Directors, and said Thomas Spielberger acknowledged said instrument to
be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of AIM Electronics Corporation and that said instrument was
signed, sealed and delivered on behalf of said corporation by authority of its
Board of Directors, and said Thomas Spielberger acknowledged said instrument to
be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of Beemak Plastics, Inc. and that said instrument was
signed, sealed and delivered on behalf of said corporation by authority of its
Board of Directors, and said Thomas Spielberger acknowledged said instrument to
be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of Cambridge Products Corporation and that said instrument
was signed, sealed and delivered on behalf of said corporation by authority of
its Board of Directors, and said Thomas Spielberger acknowledged said
instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of Hudson Lock, Inc. and that said instrument was signed,
sealed and delivered on behalf of said corporation by authority of its Board of
Directors, and said Thomas Spielberger acknowledged said instrument to be the
free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of JI Aviation, Inc. and that said instrument was signed,
sealed and delivered on behalf of said corporation by authority of its Board of
Directors, and said Thomas Spielberger acknowledged said instrument to be the
free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of JHRC, Inc. and that said instrument was signed, sealed
and delivered on behalf of said corporation by authority of its Board of
Directors, and said Thomas Spielberger acknowledged said instrument to be the
free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of Dura-Line Corporation and that said instrument was
signed, sealed and delivered on behalf of said corporation by authority of its
Board of Directors, and said Thomas Spielberger acknowledged said instrument to
be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of Sate-Lite Manufacturing Company and that said instrument
was signed, sealed and delivered on behalf of said corporation by authority of
its Board of Directors, and said Thomas Spielberger acknowledged said
instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of Parsons Precision Products, Inc. and that said instrument
was signed, sealed and delivered on behalf of said corporation by authority of
its Board of Directors, and said Thomas Spielberger acknowledged said
instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Thomas Spielberger to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of JII/Sales Promotion Associates, Inc., and that said
instrument was signed, sealed and delivered on behalf of said corporation by
authority of its Board of Directors, and said Thomas Spielberger acknowledged
said instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS )
) ss
COUNTY OF SUFFOLK )
Before me, the undersigned, a Notary Public in and for the county aforesaid, on
this _____ day of June, 1994, personally appeared Gordon L. Nelson, Jr. to me
known personally, and who, being by me duly sworn, deposes and says that he is
the Vice President of The First National Bank of Boston and that said
instrument was signed, sealed and delivered on behalf of said corporation by
authority of its Board of Directors, and said Gordon L. Nelson, Jr.
acknowledged said instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
My commission expires:
<PAGE>
EXHIBIT E
---------
FORM OF SUBSIDIARY GUARANTY
---------------------------
GUARANTY, dated as of ___________, 1994, by each of the entities listed on the
signature pages hereto (each, a "Guarantor" and, collectively, the
"Guarantors") in favor of (a) The First National Bank of Boston, as agent
(hereinafter, in such capacity, the "Agent") for itself and the other banking
institutions (hereinafter, collectively, the "Banks") which are or may become
parties to that certain Revolving Credit Agreement, dated as of ___________,
1994, as the same may be amended and in effect from time to time (such
agreement, as amended and in effect as amended and in effect from time to time,
the "Credit Agreement"), among JII, Inc., a Delaware corporation (the
"Company"), the Banks and the Agent and (b) each of the Banks.
WHEREAS, the Company and each of the Guarantors are members of a group of
related corporations, the success of any one of which is dependent in part on
the success of the other members of such group; and
WHEREAS, each of the Guarantors expects to receive substantial direct and
indirect benefits from the extensions of credit to the Company by the Banks
pursuant to the Credit Agreement (which benefits are hereby acknowledged); and
WHEREAS, it is a condition precedent to the Banks' making any loans or
otherwise extending credit to the Company under the Credit Agreement that each
of the Guarantors execute and deliver to the Agent, for the benefit of the
Banks and the Agent, a guaranty substantially in the form hereof; and
WHEREAS, each of the Guarantors wishes to guaranty the Company's obligations to
the Banks and the Agent under or in respect of the Credit Agreement as provided
herein;
NOW, THEREFORE, each of the Guarantors hereby agrees with the Banks and the
Agent as follows:
Section I. Definitions.
The term "Obligations" and all other capitalized terms used herein without
definition shall have the respective meanings provided therefor in the Credit
Agreement.
Section 2. Guaranty of Payment and Performance. (a)
Each of the Guarantors hereby jointly and severally guarantees to the Banks and
the Agent the full and punctual payment when due (whether at stated maturity,
by required pre-payment, by acceleration or otherwise), as well as the
performance, of all of the Obligations including all such which would become
due but for the operation of the automatic stay pursuant to Section 362(a) of
the Federal Bankruptcy Code and the operation of Section Section 502(b) and
506(b) of the Federal Bankruptcy Code. This Guaranty is an absolute,
unconditional and continuing guaranty of the full and punctual payment and
performance of all of the Obligations and not of their collectibility only and
is in no way conditioned upon any requirement that the Agent or any Bank first
attempt to collect any of the Obligations from the Company or resort to any
collateral security or other means of obtaining payment. Should the Company
default in the payment or performance of any of the Obligations, the
obligations of each of the Guarantors hereunder with respect to such
Obligations in default shall, upon demand by the Agent, become immediately due
and payable to the Agent, for the benefit of the Banks and the Agent, without
demand or notice of any nature, all of which are expressly waived by each of
the Guarantors. Payments by each of the Guarantors hereunder may be required
by the Agent on any number of occasions. All payments by the Guarantors
hereunder shall be made to the Agent, in the manner and at the place of payment
specified therefor in the Credit Agreement, for the account of the Banks and
the Agent.
(b) Subject to the prior payment in full of all of the Obligations, each of
the Guarantors shall have mutual rights of contribution with respect to the
other Guarantors in respect of amounts paid in respect of the Obligations by
such Guarantor in excess of its pro rata share of the Obligations determined in
accordance with the respective net worths of the Guarantors at and as of
December 31, 1993, provided that no material change in the respective net
worths of the Guarantors has occurred between December 31, 1993 and the date
hereof.
Section 3. Guarantors' Agreement to Pay Enforcement Costs, Etc.
Each of the Guarantors further jointly and severally agrees, as the principal
obligor and not as a guarantor only, to pay to the Agent, on demand, all costs
and expenses (including court costs and legal expenses) incurred or expended by
the Agent or any Bank in connection with the Obligations, this Guaranty and the
enforcement thereof, together with interest on amounts recoverable under this
Section 3 from the time when such amounts become due until payment, whether
before or after judgment, at the rate of interest for overdue principal set
forth in the Credit Agreement, provided that if such interest exceeds the
maximum amount permitted to be paid under applicable law, then such interest
shall be reduced to such maximum permitted amount.
Section 4. Waivers by Guarantors; Banks' Freedom to Act.
Each of the Guarantors agrees that the Obligations will be paid and performed
strictly in accordance with their respective terms, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting
any of such terms or the rights of the Agent or any Bank with respect thereto.
Each of the Guarantors waives promptness, diligences, presentment, demand,
protest, notice of acceptance, notice of any Obligations incurred and all other
notices of any kind, all defenses which may be available by virtue of any
valuation, stay, moratorium law or other similar law now or hereafter in
effect, any right to require the marshalling of assets of the Company or any
other entity or other person primarily or secondarily liable with respect to
any of the Obligations, and all suretyship defenses generally. Without
limiting the generality of the foregoing, each of the Guarantors agrees to the
provisions of any instrument evidencing, securing or otherwise executed in
connection with any of the Obligations and agrees that the obligations of such
Guarantor hereunder shall not be released or discharged, in whole or in part,
or otherwise affected by (a) the failure of the Agent or any Bank to assert any
claim or demand or to enforce any right or remedy against the Company or any
other entity or other person primarily or secondarily liable with respect to
any of the Obligations; (b) any extensions, compromise, refinancing,
consolidation or renewals of any of the Obligations; (c) any change in the
time, place or manner of payment of any of the Obligations or any rescissions,
waivers, compromise, refinancing, consolidation or other amendments or
modifications of any of the terms or provisions of the Credit Agreement, the
Notes, the other Loan Documents or any other agreement evidencing, securing or
otherwise executed in connection with any of the Obligations; (d) the addition,
substitution or release of any entity or other person primarily or secondarily
liable for any of the Obligations; (e) the adequacy of any rights which the
Agent or any Bank may have against any collateral security or other means of
obtaining repayment of any of the Obligations; (f) the impairment of any
collateral securing any of the Obligations, including without limitation the
failure to perfect or preserve any rights which the Agent or any Bank might
have in such collateral security or the substitution, exchange, surrender,
release, loss or destruction of any such collateral security; or (g) any other
act or omission which might in any manner or to any extent vary the risk of
such Guarantor or otherwise operate as a release or discharge of such
Guarantor, all of which may be done without notice to any of the Guarantors.
To the fullest extent permitted by law, each of the Guarantors hereby expressly
waives any and all rights or defenses arising by reason of (i) any "one action"
or "anti-deficiency" law which would otherwise prevent the Agent or any Bank
from bringing any action, including any claim for a deficiency, or exercising
any other right or remedy (including any right of set-off), against such
Guarantor before or after the Agent's or such Bank's commencement or completion
of any foreclosure action, whether judicially, by exercise of power of sale or
otherwise, or (ii) any other law which in any other way would otherwise require
any election of remedies by the Agent or any Bank.
Section V. Unenforceability of Obligations Against Company.
If for any reason the Company has no legal existence or is under no legal
obligation to discharge any of the Obligations, or if any of the Obligations
have become irrecoverable from the Company by reason of the Company's
insolvency, bankruptcy or reorganization or by other operation of law or for
any other reason, this Guaranty shall nevertheless be binding on each of the
Guarantors to the same extent as if each of the Guarantors at all times had
been the principal obligor on all such Obligations. In the event that
acceleration of the time for payment of any of the Obligations is stayed upon
the insolvency, bankruptcy or reorganization of the Company, or for any other
reason, all such amounts otherwise subject to acceleration under the terms of
the Credit Agreement, the Notes, the other Loan Documents or any other
agreement evidencing, securing or otherwise executed in connection with any
Obligation shall be immediately due and payable by the Guarantors.
Section 6. Subrogation; Subordination.
Section 6.1. Waiver of Rights Against Company.
Until the final payment and performance in full of all of the Obligations, none
of the Guarantors shall exercise and each of the Guarantors hereby waives any
rights against the Company arising as a result of payment by such Guarantor
hereunder, by way of subrogation, reimbursement, restitution, contribution or
otherwise, and will not prove any claim in competition with the Agent or any
Bank in respect of any payment hereunder in any bankruptcy, insolvency or
reorganization case or proceedings of any nature; none of the Guarantors will
claim any setoff, recoupment or counterclaim against the Company in respect of
any liability of such Guarantor to the Company; and each of the Guarantors
waives any benefit of and any right to participate in any collateral security
which may be held by the Agent or any Bank.
Section 6.2. Subordination.
The payment of any amounts due with respect to any indebtedness of the Company
for money borrowed or credit received now or hereafter owed to any of the
Guarantors is hereby subordinated to the prior payment in full of all of the
Obligations. Each of the Guarantors agrees that, after the occurrence and
during the continuance of any Event of Default, such Guarantor will not demand,
sue for or otherwise attempt to collect any such indebtedness of the Company to
such Guarantor until all of the Obligations shall have been paid in full. If,
notwithstanding the foregoing sentence, any of the Guarantors shall collect,
enforce or receive any amounts in respect of such indebtedness while any of the
Obligations are still outstanding, such amounts shall be collected, enforced
and received by such Guarantor as trustee for the Banks and the Agent and be
paid over to the Agent, for the benefit of the Banks and the Agent, on account
of the Obligations without affecting in any manner the liability of any of the
Guarantors under the other provisions of this Guaranty.
Section 6.3. Provisions Supplemental.
The provisions of this Section 6 shall be supplemental to and not in derogation
of any rights and remedies of the Banks and the Agent under any separate
subordination agreement which the Agent may at any time and from time to time
enter into with any of the Guarantors for the benefit of the Banks and the
Agent.
Section 7. Security; Setoff.
Each of the Guarantors grants to each of the Agent and the Banks, as security
for the full and punctual payment and performance of all of such Guarantor's
obligations hereunder, a continuing lien on and security interest in all
securities or other property belonging to such Guarantor now or hereafter held
by the Agent or such Bank and in all deposits (general or special, time or
demand, provisional or final) and other sums credited by or due from the Agent
or such Bank to such Guarantor or subject to withdrawal by such Guarantor.
Regardless of the adequacy of any collateral security or other means of
obtaining payment of any of the Obligations, each of the Agent and the Banks is
hereby authorized at any time and from time to time, without notice to any of
the Guarantors (any such notice being expressly waived by each of the
Guarantors) and to the fullest extent permitted by law, to set off and apply
such deposits and other sums against the obligations of the Guarantors under
this Guaranty, whether or not the Agent or such Bank shall have made any demand
under this Guaranty and although such obligations may be contingent or
unmatured.
Section 8. Further Assurances.
Each of the Guarantors agrees that it will from time to time, at the request of
the Agent, do all such things and execute all such documents as the Agent may
consider necessary or desirable to give full effect to this Guaranty and to
perfect and preserve the rights and powers of the Banks and the Agent
hereunder. Each of the Guarantors acknowledges and confirms that such
Guarantor itself has established its own adequate means of obtaining from the
Company on a continuing basis all information desired by such Guarantor
concerning the financial condition of the Company and that such Guarantor will
look to the Company and not to the Agent or any Bank in order for such
Guarantor to keep adequately informed of changes in the Company's financial
condition.
Section 9. Termination; Reinstatement.
This Guaranty shall remain in full force and effect until the Agent is given
written notice of the Guarantors' intention to discontinue this Guaranty,
notwithstanding any intermediate or temporary payment or settlement of the
whole or any part of the Obligations. No such notice shall be effective unless
received and acknowledged by an officer of the Agent at the address of the
Agent for notices set forth in Section 20 of the Credit Agreement. No such
notice shall affect any rights of the Agent or any Bank hereunder, including
without limitation the rights set forth in Section Section 4 and 6 hereof, with
respect to any Obligations incurred or accrued prior to the receipt of such
notice or any Obligations incurred or accrued pursuant to any contract or
commitment in existence prior to such receipt. This Guaranty shall continue to
be effective or be reinstated, notwithstanding any such notice, if at any time
any payment made or value received with respect to any Obligation is rescinded
or must otherwise be returned by the Agent or any Bank upon the insolvency,
bankruptcy or reorganization of the Company, or otherwise, all as though such
payment had not been made or value received.
Section 10. Successors and Assigns.
This Guaranty shall be binding upon each of the Guarantors, its successors and
assigns, and shall inure to the benefit of the Agent and the Banks and their
respective successors, transferees and assigns. Without limiting the
generality of the foregoing sentence, certain of the Banks may assign or
otherwise transfer the Credit Agreement, the Notes, the other Loan Documents or
any other agreement or note held by it evidencing, securing or otherwise
executed in connection with the Obligations, or sell participations in any
interest therein, to any other entity or other person, and such other entity or
other person shall thereupon become vested, to the extent set forth in the
agreement evidencing such assignment, transfer or participation, with all the
rights in respect thereof granted to such Bank herein, all in accordance with
Section 19 of the Credit Agreement. None of the Guarantors may assign any of
its obligations hereunder.
Section 11. Amendments and Waivers.
No amendment or waiver of any provision of this Guaranty nor consent to any
departure by any of the Guarantors therefrom shall be effective unless the same
shall be in writing and signed by the Agent with the consent of the Majority
Banks. No failure on the part of the Agent or any Bank to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right.
Section 12. Notices.
All notices and other communications called for hereunder shall be made in
writing and, unless otherwise specifically provided herein, shall be deemed to
have been duly made or given when delivered by hand or mailed first class,
postage prepaid, or, in the case of telegraphic or telexed notice, when
transmitted, answer back received, addressed as follows: if to any of the
Guarantors, at the address set forth beneath such Guarantor's signature hereto,
and if to the Agent, at the address for notices to the Agent set forth in
Section 20 of the Credit Agreement, or at such address as either party may
designate in writing to the other.
Section 13. Governing Law; Consent to Jurisdiction.
THE GUARANTY IS INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS. Each of the Guarantors agrees that any suit for the enforcement
of this Guaranty may be brought in the courts of the Commonwealth of
Massachusetts or any federal court sitting therein and consents to the
nonexclusive jurisdiction of such court and to service of process in any such
suit being made upon such Guarantor by mail at the address specified by
reference in Section 12 hereof. Each of the Guarantors hereby waives any
objection that it may now or hereafter have to the venue of any such suit or
any such court or that such suit was brought in an inconvenient court.
Section 14. Waiver of Jury Trial. EACH OF
THE GUARANTORS HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY
ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS GUARANTY,
ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF ANY OF SUCH RIGHTS OR
OBLIGATIONS. Except as prohibited by law, each of the Guarantors hereby waives
any right which it may have to claim or recover in any litigation referred to
in the preceding sentence any special, exemplary, punitive or consequential
damages or any damages other than, or in addition to, actual damages. Each of
the Guarantors (a) certifies that neither the Agent or any Bank nor any
representative, agent or attorney of the Agent or any Bank has represented,
expressly or otherwise, that the Agent or any Bank would not, in the event of
litigation, seek to enforce the foregoing waivers and (b) acknowledges that, in
entering into the Credit Agreement and the other Loan Documents to which the
Agent or any Bank is a party, the Agent and the Banks are relying upon, among
other things, the waivers and certifications contained in this Section 14.
Section 15. Miscellaneous.
This Guaranty constitutes the entire agreement of each of the Guarantors with
respect to the matters set forth herein. The rights and remedies herein
provided are cumulative and not exclusive of any remedies provided by law or
any other agreement, and this Guaranty shall be in addition to any other
guaranty of or collateral security for any of the Obligations. The invalidity
or unenforceability of any one or more sections of this Guaranty shall not
affect the validity or enforceability of its remaining provisions. Captions
are for the ease of reference only and shall not affect the meaning of the
relevant provisions. The meanings of all defined terms used in this Guaranty
shall be equally applicable to the singular and plural forms of the terms
defined.
IN WITNESS WHEREOF, each of the Guarantors has caused this Guaranty to be
executed and delivered as of the date first above written.
DACCO, INCORPORATED
By:_________________________________
Title:
Address: 5 Dacco Drive
P.O. Box 2789
Cookeville, Tennessee 38502
DETROIT TRANSMISSION PRODUCTS CO.
By:_________________________________
Title:
Address: 1500 South Avalon Boulevard
Unit E
Gardena, California 90248
BORG MANUFACTURING
By:________________________________
Title:
Address: 12150 Sixth Street at Hyssop
Rancho Cucamonga, California 91730
TRANSMISSION PARTS WAREHOUSE, INC.
By:________________________________
Title:
Address: 3316 Refugee Road
Columbus, Ohio 43232
ABC TRANSMISSION PARTS WAREHOUSE,
INC.
By:________________________________
Title:
Address: 115 W. Anderson Avenue
Knoxville, Tennessee 37917
NASHVILLE TRANSMISSION PARTS, INC.
By:________________________________
Title:
Address: 210 North First Street
Nashville, Tennessee 37213
DACCO/DETROIT OF FLORIDA, INC.
By:_________________________________
Title:
Address: 4901 "D" Rio Vista
Tampa, Florida 33634
DACCO/DETROIT OF MINNESOTA, INC.
By:_________________________________
Title:
Address: 817 Vandalia Street, Unit 2A
St. Paul, Minnesota 55114
DACCO/DETROIT OF COLORADO, INC.
By:__________________________________
Title:
Address: 1329 West Byers, Unit A
Denver, Colorado 80223
DACCO/DETROIT OF INDIANA, INC.
By:__________________________________
Title
Address: 4839 East 23rd Street
Indianapolis, Indiana 46218
DACCO/DETROIT OF MISSOURI, INC.
By:__________________________________
Title:
Address: 3115 Locust Street
St. Louis, Missouri 63103
DACCO/DETROIT OF ARIZONA, INC.
By:__________________________________
Title:
Address: 2301 N. 35th Avenue
Phoenix, Arizona 85009
DACCO/DETROIT OF MEMPHIS, INC.
By:__________________________________
Title:
Address: 2803 Longate Drive
Memphis, Tennessee 38132
DACCO/DETROIT OF NEBRASKA, INC.
By:_________________________________
Title:
Address: 3314 North 88th Plaza
Omaha, Nebraska 68134
DACCO/DETROIT OF ALABAMA, INC.
By:__________________________________
Title:
Address: 2650 Government Boulevard
Mobile, Alabama 36606
DACCO/DETROIT OF NEW JERSEY, INC.
By:__________________________________
Title:
Address: 2309 Haddonfield Road
Pennsauken, New Jersey 08110
DACCO/DETROIT OF MICHIGAN, INC.
By:_________________________________
Title:
Address: 5 Dacco Drive
P.O. Box 2789
Cookeville, Tennessee 38502
DACCO/DETROIT OF NORTH CAROLINA INC.
By:__________________________________
Title:
Address: 5 Dacco Drive
P.O. Box 2789
Cookeville, Tennessee 38502
DACCO/DETROIT OF OKLAHOMA, INC.
By:__________________________________
Title:
Address: 2500 West Lindley
Oklahoma City, Oklahoma 73107
DACCO/DETROIT OF TEXAS, INC.
By:__________________________________
Title:
Address: 2504 Weaver Street
Haltom City, Texas 76117
DACCO/DETROIT OF SOUTH CAROLINA, INC.
By:__________________________________
Title:
Address: 3517 White Horse Road
Greenville, South Carolina 29611
RIVERSIDE BOOK AND BIBLE HOUSE,
INCORPORATED
By:__________________________________
Title:
Address: 1500 Riverside Drive
P.O. Box 370
Iowa Falls, Iowa 50126
WORLD BIBLE PUBLISHERS, INC.
By:__________________________________
Title:
Address: 1500 Riverside Drive
P.O. Box 370
Iowa Falls, Iowa 50126
AIM ELECTRONICS CORPORATION
By:__________________________________
Title:
Address: 4800 N. Hiatus Road
Sunrise, Florida 33351
CAMBRIDGE PRODUCTS CORPORATION
By:__________________________________
Title:
Address: 244 Woodland Avenue
Bloomfield, Connecticut 06002
THE IMPERIAL ELECTRIC COMPANY
By:__________________________________
Title:
Address: 84 Ira Avenue
P.O. Box 309
Akron, Ohio 44309
THE SCOTT MOTORS COMPANY
By:_________________________________
Title:
Address: 1117 Lavelle Road
Alamogorda, New Mexico
GEAR RESEARCH, INC.
By:_________________________________
Title:
Address: 4329 Eastern Avenue, S.E.
P.O. Box 8837
Grand Rapids, Michigan 49509
BEEMAK PLASTICS, INC.
By:_________________________________
Title:
Address: 16639 S. Gramercy Place
Gardena, California 90247
HUDSON LOCK, INC.
By:__________________________________
Title:
Address: 81 Apsley Street
Hudson, Massachusetts
JI AVIATION, INC.
By:_________________________________
Title:
Address: 315 Park Avenue South
New York, New York 10010
JII/SALES PROMOTION ASSOCIATES, INC.
By:__________________________________
Title:
Address: 545 Walnut Street
Coshocton, Ohio 43812
JHRC, INC.
By:__________________________________
Title:
Address: c/o The Jordan Company
9 West 57th Street, 40th Floor
New York, New York 10019
<PAGE>
EXHIBIT F
---------
FORM OF LOAN REQUEST
--------------------
JII, INC.
ArborLake Centre, Suite 550
1751 Lake Cook Road
Deerfield, Illinois 60015
----------------------, l9 --
The First National Bank of Boston, as Agent
100 Federal Street
Boston, Massachusetts 02110
Attention:
Ladies and Gentlemen:
Reference is hereby made to that certain Revolving Credit Agreement,
dated as of ________________, 1994 (as the same may be amended and in effect
from time to time, the "Credit Agreement"), among JII, Inc. (the "Borrower"),
The First National Bank of Boston, certain other lending institutions which are
or may become parties thereto from time to time (collectively, the "Banks"),
and The First National Bank of Boston, as agent (the "Agent") for the Banks.
Capitalized terms which are used herein without definition and which are
defined in the Credit Agreement shall have the same meanings herein as in the
Credit Agreement.
Pursuant to Section 2.6 of the Credit Agreement, we hereby request that a
Revolving Credit Loan consisting of [a Base Rate Loan in the principal amount
of $__________, or a Eurodollar Rate Loan in the principal amount of
$__________ with an Interest Period of _________] be made on __________ __,
199__. We understand that this request is irrevocable and binding on us and
obligates us to accept the requested Revolving Credit Loan on such date.
We hereby certify (a) that the aggregate outstanding principal amount of
the Revolving Credit Loans on today's date is $_________, (b) that we will use
the proceeds of the requested Revolving Credit Loan in accordance with the
provisions of the Credit Agreement, (c) that each of the representations and
warranties contained in the Credit Agreement or in any document or instrument
delivered pursuant to or in connection with the Credit Agreement was true as of
the date as of which it was made and is true at and as of the date hereof
(except to the extent of changes resulting from transactions contemplated or
permitted by the Credit Agreement and changes occurring in the ordinary course
of business that singly or in the aggregate are not materially adverse, and to
the extent that such representations and warranties related expressly to an
earlier date) and (d) that no Default or Event of Default has occurred and is
continuing.
Very truly yours,
JII, INC.
By:________________________________
Name:
Title:
<PAGE>
EXHIBIT G
---------
FORM OF
COMPLIANCE CERTIFICATE
_______, 199_
To the Banks Party to the
Credit Agreement Referred to Below
c/o The First National Bank of Boston, as Agent
100 Federal Street
Boston, Massachusetts 02110
Ladies and Gentlemen:
Reference is made to the Revolving Credit Agreement, dated as of
______________, 1994 (as amended and in effect from time to time, the "Credit
Agreement"), by and among JII, Inc. (the "Borrower"), The First National Bank
of Boston, the other lenders that may become parties thereto from time to time
(collectively, the "Banks") and The First National Bank of Boston as agent for
the Banks (the "Agent"). Capitalized terms which were used herein without
definition and which are defined in the Credit Agreement shall have the
respective meanings assigned to such terms in the Credit Agreement.
Pursuant to Section 8 of the Credit Agreement, the principal financial or
accounting officer of the Borrower hereby certifies to each of you as follows:
(a) the information furnished in the calculations attached hereto was true and
correct as of the last day of the fiscal [year] [quarter] next preceding the
date of this certificate; (b) as of the date of this certificate, there exists
no Default or Event of Default or condition which would, with either or both
the giving of notice or the lapse of time, result in a Default or an Event of
Default; and (c) the financial statements delivered herewith were prepared in
accordance with generally accepted accounting principles applied on a basis
consistent with prior periods (except, in the case of quarterly statements, for
provisions for footnotes and, in all cases, except as disclosed therein).
IN WITNESS WHEREOF, the undersigned officer has executed this Compliance
Certificate as of the date first written above.
JII, INC.
By:_____________________________
Title:
Compliance Certificate Worksheet
--------------------------------
JII, Inc.
As of ______________
Section Calculation
- - ------- -----------
10.1 Cash Flow Coverage Ratio
------------------------
Consolidated Cash Flow:
(a) Consolidated Net Income $
(b) minority interests $
(c) tax provisions $
(d) Consolidated Interest Expense $
(e) amortization of intangibles $
(f) non-capitalized transaction costs $
(g) depreciation and other non-cash charges $
(h) interest income
(to the extent not included in Consolidated Net Income) $
(i) dividend payments on Preferred Stock $
(j) non-recurring charges associated with SFAS 106 or 109 $
Total Numerator $
(a) Consolidated Interest Expense $
(b) cash dividend payments on Preferred Stock $
Total Denominator $
Cash Flow Coverage Ratio _____:_____
Minimum Cash Flow Coverage Ratio _____:_____
Section Calculation
- - ------- -----------
10.2 Debt Service Coverage Ratio
---------------------------
(a) Consolidated Cash Flow
(Numerator from Cash Flow Coverage Ratio) $
(b) Less: Capital Expenditures $
Total Numerator $
Total Debt Service:
(a) Consolidated Financial Obligations $
(b) Consolidated Interest Expense $
(c) Cash Payments in respect of non-compete
and preferred stock from Dura-Line $
Total Denominator $
Debt Service Coverage Ratio ____:____
Minimum Debt Service Coverage Ratio ____:____
10.3 Minimum Net Worth
Consolidated Net Worth
-----------------------
consolidated book equity $
cumulative translation adjustments $
Less:
(a) amortization of inventory write-ups $
(b) amortization of all intangible assets $
(c) non-capitalized transaction costs $
(d) increased amortization or depreciation from write
up of assets pursuant to Accounting Principals
Board Opinion Nos. 16 and 17 $
(e) extraordinary or nonrecurring charges or expenses
relating to premium or penalty paid, write-off,
or deferred financing costs or other financial
recapitalization charges due to the redemption
or retirement of any Indebtedness prior to its
stated maturity $
(f) non-recurring cash charges arising out of the
restructuring or consolidation of the
operations of any business, incurred within
18 months following the acquisition of
such entity $
(g) non-recurring charges associated with SFAS 106 or 109 $
Consolidated Net Worth $
Minimum Consolidated Net Worth $
Subsidiaries acquired or formed by the Parent since the date of the last
Compliance Certificate delivered to the Banks:
<PAGE>
EXHIBIT H
---------
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated as of _______, 199_
Reference is made to that certain Revolving Credit Agreement, dated as of
____________, 1994 (as from time to time amended and in effect, the "Credit
Agreement"), by and among JII, Inc. (the "Borrower"), the banking institutions
referred to therein as Banks (collectively, the "Banks"), and The First
National Bank of Boston, as agent (in such capacity, the "Agent") for the
Banks. Capitalized terms which are used herein and which are not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement.
_________________ (the "Assignor") and ___________________ (the "Assignee")
hereby agree as follows:
Section 1. Assignment.
Subject to the terms and conditions of this Assignment and Acceptance, the
Assignor hereby sells and assigns to the Assignee, and the Assignee hereby
purchases and assumes without recourse to the Assignor, a [$____________]
interest in and to the rights, benefits, indemnities and obligations of the
Assignor under the Credit Agreement equal to [____.00%] in respect of the Total
Commitment immediately prior to the Effective Date (as hereinafter defined).
Section 2. Assignor's Representations.
The Assignor (a) represents and warrants that (i) it is legally authorized to
enter into this Assignment and Acceptance, (ii) as of the date hereof, its
Commitment Amount is [$___________], its Commitment Percentage is [_____.00%],
the aggregate outstanding principal balance of its Revolving Credit Loans
equals [$____________], the aggregate amount of its Letter of Credit
Participations equals [$____________] (in each case before giving effect to the
assignment contemplated hereby or any contemplated assignments which have not
yet become effective), and (iii) immediately after giving effect to all
assignments which have not yet become effective, the Assignor's Commitment
Percentage will be sufficient to give effect to this Assignment and Acceptance,
(b) makes no representation or warranty, express or implied, and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or any of the other Loan
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement, the other Loan Documents or any
other instrument or document furnished pursuant thereto or the attachment,
perfection or priority of any security interest or mortgage, other than that it
is the legal and beneficial owner of the interest being assigned by it
hereunder free and clear of any claim or encumbrance; (c) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any of its Subsidiaries or any other
Person primarily or secondarily liable in respect of any of the Obligations, or
the performance or observance by the Borrower or any of its Subsidiaries or any
other Person primarily or secondarily liable in respect of any of the
Obligations of any of its obligations under the Credit Agreement or any of the
other Loan Documents or any other instrument or document delivered or executed
pursuant thereto; and (d) attaches hereto the Note delivered to it under the
Credit Agreement.
The Assignor requests that the Borrower exchange the Assignor's Note for new
Notes payable to the Assignor and the Assignee as follows:
Notes Payable to
the Order of: Amount of Note
Assignor $_____________
Assignee $_____________
Section 3. Assignee's Representations.
The Assignee (a) represents and warrants that (i) it is duly and legally
authorized to enter into this Assignment and Acceptance, (ii) the execution,
delivery and performance of this Assignment and Acceptance do not conflict with
any provision of law or of the charter or by-laws of the Assignee, or of any
agreement binding on the Assignee, (iii) all acts, conditions and things
required to be done and performed and to have occurred prior to the execution,
delivery and performance of this Assignment and Acceptance, and to render the
same the legal, valid and binding obligation of the Assignee, enforceable
against it in accordance with its terms, have been done and performed and have
occurred in due and strict compliance with all applicable laws; (b) confirms
that it has received a copy of the Credit Agreement, together with copies of
the most recent financial statements delivered pursuant to Section Section 7.4
and 8.4 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (c) agrees that it will, independently and without
reliance upon the Assignor, the Agent or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (d) represents and warrants that it is an Eligible Assignee; (e)
appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under the Credit Agreement and the other Loan
Documents as are delegated to the Agent by the terms thereof, together with
such powers as are reasonably incidental thereto; (f) agrees that it will
perform in accordance with their terms all the obligations which by the terms
of the Credit Agreement are required to be performed by it as a Bank; and (g)
acknowledges that it has made arrangements with the Assignor satisfactory to
the Assignee with respect to its pro rata share of Letter of Credit Fees in
respect of outstanding Letters of Credit.
Section 4. Effective Date.
The effective date for this Assignment and Acceptance shall be [______________]
(the "Effective Date"). Following the execution of this Assignment and
Acceptance, each party hereto shall deliver its duly executed counterpart
hereof to the Agent for acceptance by the Agent and recording in the Register
by the Agent. Schedule 1 to the Credit Agreement shall thereupon be replaced
as of the Effective Date by the Schedule 1 annexed hereto.
Section 5. Rights Under Credit Agreement.
Upon such acceptance and recording, from and after the Effective Date, (a) the
Assignee shall be a party to the Credit Agreement and, to the extent provided
in this Assignment and Acceptance, have the rights and obligations of a Bank
thereunder, and (b) the Assignor shall, with respect to that portion of its
interest under the Credit Agreement assigned hereunder, relinquish its rights
and be released from its obligations under the Credit Agreement; provided,
however, that the Assignor shall retain its rights to be indemnified pursuant
to Section 17 of the Credit Agreement with respect to any claims or actions
arising prior to the Effective Date.
Section 6. Payments.
Upon such acceptance of this Assignment and Acceptance by the Agent and such
recording, from and after the Effective Date, the Agent shall make all
payments in respect of the rights and interests assigned hereby (including
payments of principal, interest, fees and other amounts) to the Assignee. The
Assignor and the Assignee shall make any appropriate adjustments in payments
for periods prior to the Effective Date by the Agent or with respect to the
making of this assignment directly between themselves.
Section 7. Governing Law.
THIS ASSIGNMENT AND ACCEPTANCE IS INTENDED TO TAKE EFFECT AS A SEALED
INSTRUMENT TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS (WITHOUT REFERENCE TO CONFLICT OF LAWS).
Section 8. Counterparts.
This Assignment and Acceptance may be executed in any number of counterparts
which shall together constitute but one and the same agreement.
IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned has
caused this Assignment and Acceptance to be executed on its behalf by its
officer thereunto duly authorized, as of the date first above written.
[INSERT NAME OF ASSIGNOR]
By:
Title:
[INSERT NAME OF ASSIGNEE]
By:
Title:
SCHEDULE I
<PAGE>
Schedule 1
Domestic
Commitment Commitment European
Bank Amount Percentage Lending Office
---- ---------- ---------- --------------
The First $ 50,000,000 100% 100 Federal Street
National Bank Boston, MA 02110
of Boston
<PAGE>
SCHEDULE 7.3
None.
<PAGE>
Schedule 7.18
Environmental
1. DACCO, Incorporated is a "potentially responsible party" with respect to
the SAAD Site located at 3655 Trousdale Drive, Nashville, Tennessee.
2. Shaw-Barton, Inc., a corporation which has been merged with and into
JII/Sales Promotion Associates, Inc. ("JII/SPAI"), is a "potentially
responsible party" with respect to the Coshocton, Ohio landfill.
JII/SPAI is indemnified by Heritage Communications Products Corp.
("Heritage") with respect to such potential obligations as set forth in
the Share Purchase Agreement dated February 29, 1988 by and between
JII/SPAI and Heritage.
3. On October 21, 1987, the United States Environmental Protection Agency
("EPA") sent a letter to The Thos. D. Murphy Co. ("Murphy"), the
predecessor of JII/SPAI and other potentially responsible parties
("PRPs") informing the PRPs of their potential liability for response
costs arising out of the PRPs' alleged disposal of hazardous materials in
a landfill near Red Oak, Iowa. JII/SPAI's manufacturing facility is near
Red Oak. JII/SPAI and certain other PRPs responded to the EPA's
information requests. Given the possibility of a future action by the
other PRPs to seek contribution from JII/SPAI, the general liability
carrier for JII/SPAI was again put on notice of a potential claim for
coverage.
4. Petroleum contamination above regulatory limits was discovered on DACCO's
Cookeville, Tennessee property during an investigation of the soil and
groundwater requested by the Division of Underground Tanks, Department of
Environment and Conservation of the State of Tennessee. The
investigation related to the prior removal of an underground storage tank
used to store automatic transmission fluid. DACCO is preparing an
environmental assessment report. DACCO has obtained limited coverage for
the costs of the investigation under Tennessee's Leaking Underground
Storage Tank Fund.
5. A settlement was reached and documented with the Massachusetts Department
of Environmental Protection ("MDEP") concerning an alleged water permit
violation. The MDEP approved Hudson's proposed design of the Wastewater
Pretreatment Facility (as prepared for Hudson by Whitman and Howard).
6. In connection with the prior removal of underground storage tanks,
additional activities were requested as part of a waiver received by
Hudson. Hudson was successful in having the floor drain requirement
removed from the actions requested. Discussions necessary to obtain
access to adjoining property to complete the waiver conditions have been
slowed by unreasonable demands by the adjoining property owner. Unless a
satisfactory resolution is reached in the near future, Hudson will
request intervention by the MDEP.
7. Subsequent to the roof failure and certain contractor repairs, asbestos
was discovered on the third floor of the Hudson plant. Emergency removal
and remediation efforts were completed during the second week of April,
1994. A contractor has removed or encapsulated the asbestos present on
the first floor. Hudson's insurance policies have been reviewed and a
claim for coverage of asbestos related expenses connected to the roof
failure and repair events has been filed.
Schedule 7.19
Subsidiaries of Jordan Industries, Inc. and JII, Inc.
(asterisk indicates subsidiary of Jordan Industries;
otherwise, subsidiary of JII, Inc.)
Subsidiaries Jurisdiction of
Incorporation
JII/Sales Promotion Associates, Inc. Delaware
545 Walnut Street
Coshocton, Ohio 43812
Ohio - Secretary of State
Coshocton County - Ohio
Illinois - Secretary of State
Iowa - Secretary of State
The Imperial Electric Company Ohio
84 Ira Avenue
P.O. Box 309
Akron, Ohio 44309
Ohio - Secretary of State
Summit County - Ohio
Miegs County - Ohio
Clark County - Ohio
The Scott Motors Company (1) Delaware
1117 Lavelle Road
Alamogorda, New Mexico 88310
New Mexico - Secretary of State
Gear Research, Inc. (1) Delaware
4329 Eastern Avenue, S.E.
P.O. Box 8837
Grand Rapids, Michigan 49509
Michigan - Secretary of State
Kent County - Michigan
I.E. Company, Inc. (1) Barbados
84 Ira Avenue
P.O. Box 309
Akron, Ohio 44309
Parsons Precision Products, Inc. (2) Kansas
3333 Main Street
P.O. Box 320
Parsons, Kansas 67357
Kansas - Secretary of State
Sate-Lite Manufacturing Company (3) Delaware
6220-30 Gross Point Road
Niles, Illinois 60648
Illinois - Secretary of State
Dura-Line Corporation (4) Delaware
South 23rd St. P.O. Box 1445
Middlesboro, Kentucky 40965
Dura-Line Limited (United Kingdom) (5) United Kingdom
Kiln
Stallingborough
Grimsby South Humbersile
ON37 7 DN
United Kingdom
Dura-Line CT s.r.o. (6) Czech Republic
U Pisaku 682
763 62 T
Tlumacov
Zlin, Czech Republic
Dura-Line Israel (7) Israel
Kibbutz Metzer M.P. Hefer 38820
Sales-Silver Building - First Floor
7-ABA Hillel Street Ramat Gan
DACCO, Incorporated Ohio
5 Dacco Drive
P.O. Box 2789
Cookeville, Tennessee 38502
Tennessee - Secretary of State
Illinois - Secretary of State
Detroit Transmission Products Co. (8) California
15000 S. Avalon, Unit E
Gardena, California 90248
Detroit Transmission Products Co. (8)
1709A Rogers Avenue
San Jose, California 95112
Borg Manufacturing (8) California
12150 Sixth Street at Hyssop
Rancho Cucamonga, California 91730
Transmission Parts Warehouse, Inc. (8) Ohio
3316 Refugee Road
Columbus, Ohio 43232
ABC Transmission Parts Warehouse, Inc. (8) Tennessee
115 West Anderson Avenue
Knoxville, Tennessee 37917
Nashville Transmission Parts, Inc. (8) Tennessee
210 North First Street
Nashville, Tennessee 37213
DACCO/Detroit of Florida, Inc. (8) Florida
4901 "D" Rio Vista
Tampa, Florida 33634
DACCO/Detroit of Florida, Inc. (8)
3699 N.W. 15th Street
Lauderhill, Florida 33311
DACCO/Detroit of Florida, Inc. (8)
613 Triumph Court, Bay 6
Orlando, Florida 32805
DACCO/Detroit of Minnesota, Inc. (8) Minnesota
817 Vandalia Street, Unit 2A
St. Paul, Minnesota 55114
DACCO/Detroit of Colorado, Inc. (8) Colorado
1329 West Byers, Unit A
Denver, Colorado 80223
DACCO/Detroit of Indiana, Inc. (8) Indiana
4839 East 23rd Street
Indianapolis, Indiana 46218
DACCO/Detroit of Missouri, Inc. (8) Missouri
3115 Locust Street
St. Louis, Missouri 63103
DACCO/Detroit of North Carolina, Inc. (8) North Carolina
5 Dacco Drive
P.O. Box 2789
Cookeville, Tennessee 38502
DACCO/Detroit of Memphis, Inc. (8) Tennessee
2803 Longate Drive
Memphis, Tennessee 38132
DACCO/Detroit of Nebraska, Inc. (8) Nebraska
3314 North 88th Plaza
Omaha, Nebraska 68134
DACCO/Detroit of Alabama, Inc. (8) Alabama
2650 Government Blvd.
Mobile, Alabama 36606
DACCO/Detroit of Alabama, Inc. (8)
520 Fourth Avenue North
Birmingham, Alabama 35204
DACCO/Detroit of New Jersey, Inc. (8) New Jersey
2309 Haddonfield Road
Pennsauken, New Jersey 08110
DACCO/Detroit of Michigan, Inc. (8) Michigan
27513 Schoolcraft Road
Livonia, Michigan 46150
DACCO/Detroit of Michigan, Inc. (8)
2629 Prairie Street SW
Wyoming, Michigan 49509
DACCO/Detroit of Arizona, Inc. (8) Arizona
2301 North 35th Avenue
Phoenix, Arizona 85009
DACCO/Detroit of Arizona, Inc. (8)
145 West Juanita, Suite 4
Mesa, Arizona 85210
DACCO/Detroit of Oklahoma, Inc. (8) Oklahoma
2500 West Lindley
Oklahoma City, Oklahoma 73107
DACCO/Detroit of Texas, Inc. (8) Texas
2504 Weaver Street
Haltom City, Texas 76117
DACCO/Detroit of South Carolina, Inc. (8) South Carolina
3517 White Horse Road
Greenville, South Carolina 29611
Riverside Book and Bible House, Incorporated Delaware
1500 Riverside Drive
P.O. Box 370
Iowa Falls, Iowa 50126
Iowa - Secretary of State
World Bible Publishers, Inc. (9) Delaware
1500 Riverside Drive
P. O. Box 370
Iowa Falls, Iowa 50126
Ohio - Secretary of State
Cuyahoga County - Ohio
Michigan - Secretary of State
Kent County - Michigan
Iowa - Secretary of State
Tennessee - Secretary of State
JI Aviation, Inc. Delaware
9 W. 57th St. 40th Fl.
New York, New York 10019
AIM Electronics Corporation Delaware
4880 N. Hiatus Road
Sunrise, Florida 33351
Florida - Secretary of State
Broward County - Florida
AIM Electronic Components Limited (10) United Kingdom
(United Kingdom)
4880 N. Hiatus Road
Sunrise, Florida 33351
Hudson Lock, Inc. Delaware
81 Apsley Street
Hudson, Massachusetts 01749
Massachusetts - Secretary of State
Hudson Town Clerk - Massachusetts
Hudson Lock de Puerto Rico Incorporated (11) Delaware
81 Apsley Street
Hudson, Massachusetts 01749
Beemak Plastics, Inc. Delaware
16639 S. Gramercy Place
Gardena, California 90247
California - Secretary of State
Cambridge Products Corporation Delaware
244 Woodland Avenue
Bloomfield, Connecticut 06002
Connecticut - Secretary of State
Florida - Secretary of State
Broward County - Florida
Welcome Home, Inc.* (12) Delaware
309-D Raleigh Street
Wilmington, North Carolina 28412
Home Again Stores, Inc./Les Magasins/ Canada
Home Again Inc. (Canada)* (13)
309-D Raleigh Street
Wilmington, North Carolina 28412
JHRC, Inc. Delaware
c/o The Jordan Company
9 West 57th Street
New York, New York 10019
J2, Inc.* (14) Delaware
Arborlake Centre
Suite 550
1751 Lake Cook Road
Deerfield, Illinois 60015
Valmark Industries, Inc.* (15) Delaware
3393 West Warner Avenue
Tremont, California 94539
Pamco Printed Tape & Label Co., Inc.* (16) Delaware
2200 South Wolf Road
Des Plaines, Illinois 60018
JI Finance Company* (14) Delaware
Arborlake Centre
Suite 550
1751 Lake Cook Road
Deerfield, Illinois 60015
FOOTNOTES
_____________________
1. Each wholly-owned subsidiaries of The Imperial Electric Company.
2. Parson's common stock is 85% owned by Jordan Industries.
3. Sate-Lite's common stock is 94.6% owned by Jordan Industries.
4. Dura-Line Corporation's common stock is 100% owned by JI; however, its
preferred stock is held by former Dura-Line owners and executives.
5. A 99.9% subsidiary of Dura-Line Corporation.
6. A joint venture subsidiary 75% owned by Dura-Line Corporation.
7. A joint venture one-third owned by Dura-Line Corporation.
8. A wholly-owned subsidiary of DACCO.
9. A wholly-owned subsidiary of Riverside Book and Bible House,
Incorporated.
10. A 99% subsidiary of AIM Electronics.
11. A wholly-owned subsidiary of Hudson Lock.
12. A 92.5% subsidiary of Jordan Industries, and post-IPO, a 57.2% subsidiary
of Jordan Industries; if no IPO, a 92.5% subsidiary of JII, Inc.
13. A wholly-owned subsidiary of Welcome Home.
14. An unrestricted, wholly owned subsidiary of Jordan Industries.
15. An unrestricted, wholly owned subsidiary of J2, Inc.
16. An unrestricted, non-wholly owned subsidiary of J2, Inc.
Schedule 9.1
INDEBTEDNESS
(amounts where indicated, are approximations
as of the date indicated and may not reflect
current amounts or accrued interest or rent)
1. DACCO, Incorporated
(a) Master lease between DACCO, Incorporated and ITT Commercial Finance
Corporation secured by trucks and equipment (balance as of 4/30/94
- $133,000)
(b) AC-Delco Warehouse Distributor Supply Agreement providing for
Indebtedness in connection with purchase of inventory secured by a
lien on products bearing any trademark of General Motors
Corporation as set forth in the GM Purchase Money Security
Agreement. (Account Balance as of 5/31/94 -- $96,073)
2. Sate-Lite Manufacturing Company
(a) Equipment lease with Ellison Machinery Company of the Midwest
assigned to Orix Credit Alliance Inc. for various equipment
(balance as of 4/30/94 - $71,000)
(b) Equipment lease with Brook Equipment Leasing, as assigned, for
various machinery (balance as of 4/30/94 - $57,000)
(c) Equipment lease with Brook Equipment Leasing, as assigned, for
various machinery (balance as of 4/30/94 - $32,000)
(d) Equipment lease with Vanguard Financial Service Co. for various
equipment (balance as of 4/30/94 - $13,000)
3. Riverside Book and Bible House, Incorporated and World Bible Publishers,
Inc.
(a) Master equipment lease with U.S. Leasing for the use of various
computer equipment (balance as of 4/30/94 - $282,000)
(b) Letter of Credit Facility (including business security agreements)
with Firstar Bank Cedar Rapids (formerly known as the Merchants
National Bank of Cedar Rapids), secured by blanket lien and cash
collateral if outstanding letters of credit are over $500,000
(balance as of 4/30/94 - $800,000).
4. Welcome Home, Inc.
(a) Master equipment leases with U.S. Leasing for the use of sales
registers, scanners and other machinery (balance as of 4/30/94 -
$444,000)
(b) Master equipment leases with U.S. Leasing for the use of sales
registers, scanners and other machinery (balance as of 4/30/94 -
$571,000)
(c) $20 million revolving credit facility, whether from Jordan
Industries, JII, Inc. or a third party lender.
5. Dura-Line Corporation
(a) Master lease agreement with MC Financial Services for the use of
various machinery (balance as of 4/30/94 - $248,000)
(b) Equipment lease agreement with MC Financial Services, Inc. for the
use of various machinery (balance as of 4/30/94 - $207,000)
(c) Equipment lease with Hinsbrook Bank and Trust for use of various
machinery (balance as of 4/30/94 - $60,000)
(d) Mortgage on land and building located in Middlesboro, Kentucky
(balance as of 4/30/94 - $387,000)
(e) Mortgage on land and building located in the U.K. (balance as of
4/30/94 - $1,063,000)
(f) Overdraft facility used to provide funds for the construction of
facilities in the U.K. (balance as of 4/30/94 - $723,000)
(g) Existing obligation assumed at the formation of the Joint Venture
in the Czech Republic (balance as of 4/30/94 - $35,000)
(h) Dura-Line guaranties (1) Barclays and other third party debt under
a line of credit, mortgage and overdraft facility of Dura-Line
(UK), and (2) equipment debt and loans of Dura-line CT s.r.o.,
noted in (e), (f) and (g) above.
6. Parsons Precision Products, Inc.
(a) Subordinated promissory notes payable to sellers and investors,
secured by equipment (balance as of 4/30/94 - $600,000)
7. The Imperial Electric Company
(a) Master lease agreement with U.S. Leasing for computers and various
equipment (balance as of 4/30/94 - $111,000)
(b) Equipment lease agreement with Brook Equipment Leasing, as
assigned, for the use of various equipment (balance as of 4/30/94 -
$140,000)
8. The Scott Motors Company
(a) None
9. Gear Research, Inc.
(a) Equipment lease agreement with Brook Equipment Leasing Ltd. for the
use of various machinery (balance as of 4/30/94 - $192,000)
(b) Equipment lease agreement with Orix Credit Alliance, Inc. for use
of various machinery (balance as of 4/30/94 - $20,000)
(c) Equipment lease agreement with LCA Leasing Corporation for the use
of various equipment (balance as of 4/30/94 - $47,000)
10. Hudson Lock, Inc.
(a) A Promissory Note payable to John H. Bryant which was part of the
obligations existing at Hudson Lock, Inc. at the time of the
acquisition (balance as of
4/30/94 -- $37,000).
11. AIM Electronics Corporation
(a) None
12. Cambridge Products Corporation
(a) None
13. JII/Sales Promotion Associates, Inc.
(a) Master equipment lease with U.S. Leasing for the use of various
machinery (balance as of 4/30/94 - $34,000)
(b) Equipment lease with P.C. Leasing, a division of Phoenixcor, Inc.
(balance as of 4/30/94 - $739,000)
(c) Equipment lease with First Fidelity Bank, N.A. for various computer
equipment (balance as of 4/30/94 - $9,000)
14. Beemak Plastics, Inc.
(a) Equipment lease with TAIS Credit Corporation (Dealer: Centrex
Equipment Associates) for use of a phone system (balance as of
4/30/94 - $11,000)
15. JI Aviation, Inc.
(a) Currently in negotiation on a lease agreement with Sumitomo Bank
Leasing and Finance, Inc. for a 50% undivided interest in an
aircraft (equipment cost - $5,800,000)
(b) Currently in negotiation on a lease agreement for an aircraft
(equipment cost - $4,000,000)
16. Jordan Industries, Inc.
(a) 10-3/8% Senior Notes Due 2003 (balance as of 04/30/94 -
$275,000,000)
(b) 11-3/4% Senior Subordinated Notes Due 2005 (balance as of 04/30/94
- $133,075,293)
(c) Jordan Industries, Inc. generally guaranties all capital leases of
its subsidiaries
(d) Jordan Industries, Inc. guaranties all indebtedness and obligations
of JI Aviation.
(e) It should be noted that Jordan Industries often subordinate the
debt owed to it pursuant to intercompany notes from the
subsidiaries, and in respect of their obligations thereunder,
including those described in 1(a), 2(a), 2(c), 3(b), 7(b), 9(c) and
13(b) above.
17. UCC Search Results
To the extent not listed above, the Indebtedness secured by the liens
reflected in the UCC searches obtained by counsel for FNBB and attached
to in Schedule 9.2.
18. JHRC, Inc.
None
19. Intercompany Notes included in Intercompany Agreements. (Note that, as
of 05/31/94, Jordan Industries was owed the following amounts by
subsidiaries pursuant to these intercompany notes):
DACCO $30,459,695.63
Sate-Lite 2,376,936.24
Riverside 30,625,869.68
Welcome Home 7,199,587.46
Dura-Line 16,333,792.00
Parsons 4,360,745.26
Imperial 10,405,013.29
Scott 2,265,207.00
Gear 279,738.41
Hudson 17,064,115.08
AIM 16,642,982,77
Cambridge 12,590,232.71
JII/SPAI 29,532,212.06
Beemak 10,498,365.77
Valmark 14,016,435,47
PAMCO 21,101,000.00
-------------
$225,751,828.83
20. Valmark Industries, Inc.
Subordinated promissory note payable to sellers (balance as of 5/31/94 -
$4,000,000).
21. PAMCO Printed Tape & Label Co., Inc.
Subordinated promissory notes payable to sellers (aggregate balance as of
5/31/94 - $4,000,000).
22. The following companies are co-leasees and therefore jointly and
severally liable with Jordan Industries under the Master Lease Agreement
with United States Leasing International, Inc.:
a. Sate-Lite Manufacturing Company;
b. JII/Sales Promotion Associates, Inc.;
c. DACCO, Incorporated;
d. Dura-Line Corporation;
e. Imperial Electric Corporation;
f. Gear Research, Inc.;
g. Beemak Plastics, Inc.;
h. Welcome Home, Inc.;
i. Hudson Lock, Inc.;
j. Riverside Book and Bible House, Incorporated;
k. Parsons Precision Products, Inc.;
l. The Scott Motors Company,;
m. AIM Electronics Corporation; and
n. Cambridge Products Corporation
23. JII, Inc.
(a) Assumption Agreement.
Schedule 9.2
Existing Liens
1. DACCO, Incorporated
(a) Master lease between DACCO, Incorporated and ITT Commercial Finance
Corporation secured by trucks and equipment.
(b) AC-Delco Warehouse Distributor Supply Agreement providing for
Indebtedness in connection with purchase of inventory secured by a
lien on products bearing any trademark of General Motors
Corporation as set forth in the GM Purchase Money Security
Agreement.
2. Sate-Lite Manufacturing Company
(a) Equipment lease with Orix Credit Alliance Inc. for various
equipment secured by such equipment.
(b) Equipment lease with Brook Equipment Leasing for various machinery
secured by such equipment.
(c) Equipment lease with Brook Equipment Leasing for various machinery
secured by such equipment.
(d) Equipment lease with Vanguard Financial Service Co. for various
equipment secured by such equipment.
3. Riverside Book and Bible House, Incorporated and World Bible Publishers,
Inc.
(a) Master equipment lease with U.S. Leasing for the use of various
computer equipment secured by such equipment.
(b) Letter of Credit Facility (including business security agreements)
with Firststar Bank Cedar Rapids (formerly known as the Merchants
National Bank of Cedar Rapids), secured by blanket lien and cash
collateral if outstanding letters of credit are over $500,000
(balance as of 4/30/94 - $800,000).
(c) Leases of property within the Riverhills Mall, owned by Riverside
Bank and Bible House, Incorporated, located in Iowa Falls, Iowa.
4. Welcome Home, Inc.
(a) Master equipment leases with U.S. Leasing for the use of sales
registers, scanners and other machinery secured by such equipment.
(b) Master equipment leases with U.S. Leasing for the use of sales
registers, scanners and other machinery secured by such equipment.
(c) liens on receivables, inventories and other assets under the
Indebtedness referred to in Section 5(c) of Schedule 9.1.
5. Dura-Line Corporation
(a) Master lease agreement with MC Financial Services for the use of
various machinery secured by such equipment/property.
(b) Equipment lease agreement with MC Financial Services, Inc. for the
use of various machinery secured by such equipment/property.
(c) Equipment lease with Hinsbrook Bank and Trust for use of various
machinery secured by such equipment/property.
(d) Mortgage on land and building located in Middlesboro, Kentucky
secured by such equipment/property.
(e) Mortgage on land and building located in the U.K.
(f) UCC-1 filing, dated December 7, 1993, in favor of JI Finance
Company, in respect of certain receivables.
6. Parsons Precision Products, Inc.
(a) Subordinated promissory notes payable to sellers and investors,
secured by equipment.
(b) Parsons Industrial Revenue Bonds with the City of Parsons have been
paid off. The releases/property reconveyances are in the process
of being finalized.
7. The Imperial Electric Company
(a) Master lease agreement with U.S. Leasing for computers and various
equipment, secured by such equipment.
(b) Equipment lease agreement with Brook Equipment Leasing, LTD for the
use of various equipment, secured by such equipment.
8. The Scott Motors Company
(a) None
9. Gear Research, Inc.
(a) Equipment lease agreement with Brook Equipment Leasing Ltd. for the
use of various machinery, secured by such equipment.
(b) Equipment lease agreement with Orix Credit Alliance, Inc. for use
of various machinery, secured by such equipment.
(c) Equipment lease agreement with LCA Leasing Corporation for the use
of various equipment, secured by such equipment.
10. Hudson Lock, Inc.
(a) None.
11. AIM Electronics Corporation
(a) None
12. Cambridge Products Corporation
(a) None
13. JII/Sales Promotion Associates, Inc.
(a) Master equipment lease with U.S. Leasing for the use of various
machinery, secured by such equipment.
(b) Equipment lease with P.C. Leasing, a division of Phoenixcor, Inc.,
secured by such equipment.
(c) Equipment lease with First Fidelity Bank, N.A. for various computer
equipment, secured by such equipment.
14. Beemak Plastics, Inc.
(a) Equipment lease with TAIS Credit Corporation for use of a phone
system, secured by such equipment.
15. JI Aviation, Inc.
(a) Currently in negotiation on a lease agreement with Sumitomo Bank
Leasing and Finance, Inc. for a 50% undivided interest in a BAe
1000 aircraft, secured by such aircraft, certain agreements
relating to the use of the aircraft, and a cash collateral deposit
of $1,300,000 and up to a $350,000 deposit for a swap agreement,
and liens in connection with the lease agreement referred to in
item 15(a) of Schedule 9.1 to the Credit Agreement.
(b) JI Aviation, Inc.'s interest in the Gulfstream II aircraft, serial
number 213, and all agreements and documents executed by, or for
the benefit of, JI Aviation, Inc., and liens in connection with the
lease agreement referenced in item 15(b) of Schedule 9.1 to the
Credit Agreement.
16. UCC Search Results
To the extent not listed above, the Indebtedness secured by the liens
reflected in the UCC searches obtained by counsel for FNBB and attached
hereto.
17. Jordan Industries, Inc.
(a) The subordination agreements referred to in section 16(e) of
Schedule 9.1 are incorporated by reference.
18. See item 16(e) on Schedule 9.1.
19. (a) All obligations of the Guarantors to J.I. Finance Company have been
paid. UCC termination statements are in the process of being filed.
(b) All obligations of Sate-Lite Manufacturing Company to KGK
International Corporation have been paid. UCC termination statements
are in the process of being obtained and filed.
(c) All obligations of JII\Sales Promotion Associates, Inc. to Linotype
Hell Company have been paid. UCC termination statements are in the
process of being obtained and filed.
Schedule 9.3
Investments
1. Intercompany management consulting, tax-sharing and line letter and
demand note agreements.
2. $20 million revolving credit agreement between Jordan Industries and/or
JII, and Welcome Home, Inc.
3. Dura-Line Israel, a one-third owned joint venture of Dura-Line.
4. Loans from Jordan Industries to the DIZE Company (balance $525,000 and
$625,000 at 4/30/94).
5. Cape Craftsmen credit agreements ($15,000,000 maximum) with Jordan
Industries, secured by all machinery and equipment, receivables,
inventory, leasehold mortgage, and personal property (balance as of
4/30/94 - $9,383,000).
6. Dura-Line note receivable ($500,000 maximum) from Israel joint venture
(33.33%) (balance at 5/31/94 - $192,435).
7. Dura-Line inter-company note receivable ($3 million maximum) from
Dura-Line U.K. (balance at 5/31/94 - $2,148,473).
8. Dura-Line intercompany receivable ($2 million maximum) from Dura-Line CT
s.r.o. (balance at 5/31/94 - $511,582).
9. Dura-Line Note Receivable from DuctPlus (balance at 5/31/94 -
$100,000.00).
10. Riverside investment/note receivable ($1.5 million maximum) from Diadem
(balance at 5/31/94 - $300,000).
11. Riverside investment/note receivable ($1.0 million maximum) to Platinum
Entertainment/Light Records (balance at 5/31/94 - $200,000).
12. Beemak note receivable from their seller financing related to a sale of a
building (balance at 5/31/94 - $30,000).
13. Jordan Industries investment/note receivable in JII Partners Limited
Partnership (balance at 5/31/94 - $25,000).
14. Parsons Precision Products note receivable from Center Industries, Inc.
(balance at 5/31/94 - $200,000).
15. See the subordination agreements in item 16(e) on Schedule 9.1, which are
hereby incorporated by reference.
Stock Appreciation Rights Agreement
1. AIM Electronics Corporation - Irvin Seaman
2. Hudson Lock, Inc. - James E. Boucher
3. Hudson Lock, Inc. - Michael L. Colecchi
4. The Imperial Electric Company - Francis A. Collins
5. Dura-Line Corporation - John Shoffner and Darrell Hale
6. Phantom Stock Plan - James A. McNair, Thomas Caffery, Andrew Rice, Thomas
Spielberger
