SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 19, 1997
FINISHMASTER, INC.
(Exact name of registrant as specified in its charter)
INDIANA
(State or other jurisdiction of incorporation)
0-23222 35-2252096
(Commission File Number) (IRS Employer Identification No.)
4259 40th Street, SE, Kentwood, Michigan 49512
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (616) 949-7604
Item 2. Acquisition or Disposition of Assets.
Pursuant to the terms and subject to the conditions of the Agreement
and Plan of Merger, dated October 14, 1997 (the "Merger Agreement"), by and
among FinishMaster, Inc., an Indiana corporation ("FinishMaster"), FMST
Acquisition Corporation, a Delaware corporation and wholly owned subsidiary of
FinishMaster ("FMST"), and Thompson PBE, Inc., a Delaware corporation
(AThompson@), (i) FMST acquired 8,460,161 shares, or approximately 97.9%, of the
outstanding shares of Common Stock, par value $.001 per share, of Thompson,
including the stock purchase rights associated therewith issued pursuant to the
Rights Agreement, dated as of May 6, 1997, pursuant to a cash tender offer of
$8.00 per share for all the outstanding stock of Thompson (the "Offer"); and
(ii) subsequent to the acceptance of the Shares tendered in the Offer, FMST was
merged with and into Thompson (the "Merger"), with Thompson surviving the
Merger. As a result of the Merger, the separate corporate existence of FMST has
terminated, Thompson is now a wholly owned subsidiary of FinishMaster and all of
the remaining outstanding Shares (other than any Shares held by FinishMaster or
any wholly owned subsidiary of FinishMaster or in the treasury of Thompson or by
any wholly owned subsidiary of Thompson) have been converted into the right to
receive $8.00 net per share in cash. The per Share purchase price of $8.00 paid
in the Offer and Merger was determined as a result of arms' length negotiations
between FinishMaster and Thompson.
The Offer expired on November 18, 1997; the Shares tendered in the
Offer were accepted for purchase on November 19, 1997; and the Merger was
effectuated on November 21, 1997.
To finance the Offer and Merger, FinishMaster obtained commitments for
$100 million of senior secured credit facilities (the "Credit Facilities") from
NBD Bank, N.A. ("NBD"). The Credit Facilities, which were arranged through First
Chicago Capital Markets Inc., an affiliate of NBD, and syndicated to several
financial institutions, consist of (i) a $40 million, six-year term loan and
(ii) a $60 million revolving credit facility. FinishMaster also acquired $30
million from LDI, Ltd., the indirect owner of 67.4% of the outstanding shares of
FinishMaster, in exchange for a subordinated note (the "Subordinated Note").
FinishMaster used a portion of the proceeds from the Credit Facilities and the
Subordinated Note (the "Proceeds") to pay off existing debt, to fund the initial
purchase of Shares in the Offer and to pay related expenses of the Offer.
FinishMaster expects to use additional amounts of the Proceeds during the next
90 days to pay $8 per Share to the holders of the remaining outstanding Shares
pursuant to the terms of the Merger and to pay other related expenses.
Thompson is engaged in the business of aftermarket distribution of
automotive paint and related supplies to the automotive collision repair
industry. FinishMaster intends to continue the business conducted by Thompson.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired:
The financial statements of Thompson required by this Item 7(a) of Form
8-K are not available at this time. Therefore, in accordance with Item 7 of Form
8-K, such financial statements will be filed by amendment to this Form 8-K as
soon as practicable, but no later than 60 days from the date of filing of this
Form 8-K.
(b) Pro Forma Financial Information:
The pro forma financial information of Thompson required by this Item
7(b) of Form 8-K is not available at this time. Therefore, in accordance with
Item 7 of Form 8-K, such pro forma financial information will be filed by
amendment to this Form 8-K as soon as practicable, but no later than 60 days
from the date of filing of this Form 8-K.
(c) Exhibits:
The following exhibits are filed as a part of this report:
2 The Agreement and Plan of Merger, dated as of October 14,
1997, by and among FinishMaster, Inc., FMST Acquisition
Corporation and Thompson PBE, Inc. is incorporated by
reference to Exhibit (c)(2) of Schedule 14D-1 filed by FMST
Acquisition Corporation on October 21, 1997.
99(a) Credit Agreement, dated as of November 19, 1997, among
FinishMaster, Inc., the Institutions from Time to Time Parties
Thereto as Lenders and NBD Bank, N.A., as Agent.
99(b) Subordinated Note Agreement, dated as of November 19, 1997, by
and between FinishMaster, Inc. and LDI, Ltd.
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 hereunto duly authorized.
By: /s/ Andre B. Lacy
---------------------------------
Andre B. Lacy, Chairman of
the Board and Chief Executive
Officer
Dated: December ____, 1997
CREDIT AGREEMENT
Dated as of November 19, 1997
among
FINISHMASTER, INC.,
THE INSTITUTIONS FROM TIME TO TIME
PARTIES HERETO AS LENDERS
and
NBD BANK, N.A.
as Agent
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TABLE OF CONTENTS
Section Page
ARTICLE I: DEFINITIONS
1.1 Certain Defined Terms 1
1.2 References 26
ARTICLE II: THE TERM LOAN AND REVOLVING LOAN FACILITIES
2.1. Term Loans 26
2.2 Revolving Loans 27
2.3 Swing Line Loans 28
2.4 Rate Options for all Advances 29
2.5 Optional Payments; Mandatory Prepayments 30
2.6 Reduction of Commitments 32
2.7 Method of Borrowing 32
2.8 Method of Selecting Types and Interest Periods for Advances 32
2.9 Minimum Amount of Each Advance 33
2.10 Method of Selecting Types and Interest Periods
for Conversion and Continuation of Advances 33
2.11 Default Rate 34
2.12 Method of Payment 34
2.13 Notes 34
2.14 Telephonic Notices 34
2.15 Promise to Pay; Interest and Commitment Fees;
Interest Payment Dates; Interest and Fee Basis;
Taxes; Loan and Control Accounts 35
2.16 Notification of Advances, Interest
Rates, Prepayments and Aggregate Revolving Loan
Commitment Reductions 40
2.17 Lending Installations 41
2.18 Non-Receipt of Funds by the Agent 41
2.19 Termination Date 41
2.20 Replacement of Certain Lenders 41
ARTICLE III: THE LETTER OF CREDIT FACILITY
3.1 Obligation to Issue 42
3.2 Transitional Provision 42
3.3 Types and Amounts 43
3.4 Conditions. 43
3.5 Procedure for Issuance of Letters of Credit 43
3.6 Letter of Credit Participation 44
3.7 Reimbursement Obligation 44
3.8 Letter of Credit Fees 45
3.9 Issuing Bank Reporting Requirements. 45
3.10 Indemnification; Exoneration 45
3.11 Cash Collateral 46
ARTICLE IV: CHANGE IN CIRCUMSTANCES
4.1 Yield Protection 47
4.2 Changes in Capital Adequacy Regulations 48
4.3 Availability of Types of Advances 48
4.4 Funding Indemnification 49
4.5 Lender Statements; Survival of Indemnity 49
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ARTICLE V: CONDITIONS PRECEDENT
5.1 Initial Advances and Letters of Credit 50
5.2 Each Advance and Letter of Credit 51
ARTICLE VI: REPRESENTATIONS AND WARRANTIES
6.1 Organization; Corporate Powers 52
6.2 Authority 52
6.3 No Conflict; Governmental Consents 53
6.4 Financial Statements 53
6.5 No Material Adverse Change 54
6.6 Taxes 54
6.7 Litigation; Loss Contingencies and Violations 54
6.8 Subsidiaries 55
6.9 ERISA55
6.10 Accuracy of Information 56
6.11 Securities Activities 56
6.12 Material Agreements 56
6.13 Compliance with Laws 57
6.14 Assets and Properties 57
6.15 Statutory Indebtedness Restrictions 57
6.16 Insurance 57
6.17 Labor Matters 57
6.18 Environmental Matters 57
6.19 Tender Offer; Merger 58
6.20 Solvency 59
ARTICLE VII : COVENANTS
7.1 Reporting 59
7.2 Affirmative Covenants 64
7.3 Negative Covenants 66
7.4 Financial Covenants 73
ARTICLE VIII: DEFAULTS
8.1 Defaults78
ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS,
AMENDMENTS AND REMEDIES
9.1 Termination of Commitments; Acceleration 80
9.2 Defaulting Lender 81
9.3 Amendments 82
9.4 Preservation of Rights 83
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ARTICLE X: GENERAL PROVISIONS
10.1 Survival of Representations 83
10.2 Governmental Regulation 83
10.3 Performance of Obligations 83
10.4 Headings 84
10.5 Entire Agreement 84
10.6 Several Obligations; Benefits of this Agreement 84
10.7 Expenses; Indemnification 84
10.8 Numbers of Documents 86
10.9 Accounting 86
10.10 Severability of Provisions 87
10.11 Nonliability of Lenders 87
10.12 GOVERNING LAW 87
10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL 87
ARTICLE XI: THE AGENT
11.1 Appointment; Nature of Relationship 89
11.2 Powers 89
11.3 General Immunity 89
11.4 No Responsibility for Loans, Creditworthiness, Recitals, Etc. 89
11.5 Action on Instructions of Lenders 90
11.6 Employment of Agents and Counsel 90
11.7 Reliance on Documents; Counsel 90
11.8 The Agent's Reimbursement and Indemnification 90
11.9 Rights as a Lender 91
11.10 Lender Credit Decision 91
11.11 Successor Agent 91
11.12 Collateral Documents 92
ARTICLE XII: SETOFF; RATABLE PAYMENTS
12.1 Setoff 93
12.2 Ratable Payments 93
12.3 Application of Payments 93
12.4 Relations Among Lenders 94
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS;
PARTICIPATIONS
13.1 Successors and Assigns 95
13.2 Participations 95
13.3 Assignments 96
13.4 Confidentiality 97
13.5 Dissemination of Information 98
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ARTICLE XIV: NOTICES
14.1 Giving Notice 98
14.2 Change of Address 98
ARTICLE XV: COUNTERPARTS
EXHIBITS AND SCHEDULES
Exhibits
EXHIBIT A -- Commitments
(Definitions)
EXHIBIT B-1 -- Form of Revolving Note
(Definitions)
EXHIBIT B-2 -- Form of Swing Line Note
(Definitions)
EXHIBIT B-3 -- Form of Term Note
(Definitions)
EXHIBIT C -- Form of Borrowing Notice (Section 2.8)
EXHIBIT C-1 -- Form of Borrowing Base Certificate
(Sections 5.1 and 7.1(A)(iv))
EXHIBIT D -- Form of Request for Letter of Credit
(Section 3.4)
EXHIBIT E -- Form of Assignment and Acceptance Agreement
(Sections 2.20 and 13.3)
EXHIBIT F -- Form of Borrower's Counsel's Opinion
(Section 5.1)
EXHIBIT G -- List of Closing Documents
(Section 5.1)
EXHIBIT H -- Form of Officer's Certificate
(Sections 5.2 and 7.1(A)(iii))
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EXHIBIT I -- Form of Compliance Certificate
(Sections 5.2 and 7.1(A)(iii))
Schedules
Schedule 1.1.1 -- Permitted Existing Indebtedness (Definitions)
Schedule 1.1.2 -- Permitted Existing Investments (Definitions)
Schedule 1.1.3 -- Permitted Existing Liens (Definitions)
Schedule 3.2 -- Transitional Letters of Credit (Section 3.2)
Schedule 6.3 -- Conflicts; Governmental Consents (Section 6.3)
Schedule 6.4 -- Pro Forma Financial Statements (Section 6.4(A))
Schedule 6.6 -- Taxes (Section 6.6(A))
Schedule 6.7 -- Litigation; Loss Contingencies (Section 6.7)
Schedule 6.8 -- Subsidiaries (Section 6.8)
Schedule 6.9 -- ERISA (Section 6.9)
Schedule 6.18 -- Environmental Matters (Section 6.18)
Schedule 6.19 -- Tender Offer; Merger (Section 6.19)
Schedule 7.3(F) -- Restricted Payments
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CREDIT AGREEMENT
This Credit Agreement dated as of November 19, 1997 is entered into among
FinishMaster, Inc., an Indiana corporation, the institutions from time to time
parties hereto as Lenders, whether by execution of this Agreement or an
Assignment Agreement pursuant to Section 13.3, and NBD Bank, N.A., in its
capacity as contractual representative for itself and the other Lenders. The
parties hereto agree as follows:
ARTICLE I: DEFINITIONS
1.1 Certain Defined Terms. In addition to the terms defined above, the
following terms used in this Agreement shall have the following meanings,
applicable both to the singular and the plural forms of the terms defined.
As used in this Agreement:
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or division thereof,
whether through purchase of assets, merger or otherwise or (ii) directly or
indirectly acquires (in one transaction or as the most recent transaction in a
series of transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the election of
directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage of voting power) of the
outstanding equity interests of another Person.
"Acquisition Corp." means FMST Acquisition Corporation, a Delaware
corporation and a wholly-owned Subsidiary of the Borrower.
"Advance" means a borrowing hereunder consisting of the aggregate amount
of the several Loans made by the Lenders to the Borrower of the same Type and,
in the case of Eurodollar Rate Advances, for the same Interest Period.
"Affected Lender" is defined in Section 2.20 hereof.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of greater than ten percent (10%) or more of any class of voting
securities (or other voting interests) of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through ownership of
Capital Stock, by contract or otherwise.
"Agent" means NBD Bank, N.A. in its capacity as contractual representative
for itself and the Lenders pursuant to Article XI hereof and any successor Agent
appointed pursuant to Article XI hereof.
"Aggregate Revolving Loan Commitment" means the aggregate of the Revolving
Loan Commitments of all the Lenders, as reduced from time to time pursuant to
the terms
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hereof. The initial Aggregate Revolving Loan Commitment is Sixty Million and
00/100 Dollars ($60,000,000.00).
"Aggregate Term Loan Commitment" means the aggregate of the Term Loan
Commitments of all the Lenders. The Aggregate Term Loan Commitment is Forty
Million and 00/100 Dollars ($40,000,000.00).
"Agreement" means this Credit Agreement, as it may be amended, restated or
otherwise modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect as of the date of this Agreement, applied in a manner
consistent with that used in preparing the financial statements referred to in
Section 6.4(B)(1) hereof.
"Alternate Base Rate" means, for any day, a fluctuating rate of interest
per annum equal to the higher of (i) the Prime Rate for such day and (ii) the
sum of (a) the Federal Funds Effective Rate for such day and (b) one-half of one
percent (0.5%) per annum.
"Applicable Commitment Fee Percentage" means, as at any date of
determination, the rate per annum then applicable in the determination of the
amount payable under Section 2.15(C)(i) hereof determined in accordance with the
provisions of Section 2.15(D)(ii) hereof.
"Applicable Eurodollar Margin" means, as at any date of determination, the
rate per annum then applicable to Eurodollar Rate Loans determined in accordance
with the provisions of Section 2.15(D)(ii) hereof.
"Applicable Floating Rate Margin" means, as at any date of determination,
the rate per annum then applicable to Floating Rate Loans, determined in
accordance with the provisions of Section 2.15(D)(ii) hereof.
"Applicable L/C Fee Percentage" means, as at any date of determination, a
rate per annum equal to the Applicable Eurodollar Margin in effect on such date.
"Arranger" means First Chicago Capital Markets, Inc., in its capacity as
the arranger for the loan transaction evidenced by this Agreement.
"Assignment Agreement" shall mean an assignment and acceptance agreement
entered into in connection with an assignment pursuant to Section 13.3 hereof in
substantially the form of Exhibit E.
"Asset Sale" means, with respect to any Person, the sale, lease,
conveyance, disposition or other transfer by such Person of any of its assets
(including by way of a
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sale-leaseback transaction and including the sale or other transfer of any of
the Equity Interests of any Subsidiary of such Person).
"Authorized Officer" means any of the Chairman, President, Chief Financial
Officer, Treasurer or Assistant Secretary of the Borrower, acting singly.
"Benefit Plan" means a defined benefit plan as defined in Section 3(35) of
ERISA (other than a Multiemployer Plan) in respect of which the Borrower or any
other member of the Controlled Group is, or within the immediately preceding six
(6) years was, an "employer" as defined in Section 3(5) of ERISA.
"Borrower" means FinishMaster, Inc., an Indiana corporation, together with
its successors and assigns, including a debtor-in-possession on behalf of the
Borrower.
"Borrowing Base" means, as of any date of calculation, an amount, as set
forth on the most current Borrowing Base Certificate delivered to the Agent,
equal to: (i) eighty percent (80%) of the Gross Amount of Eligible Receivables;
plus (ii) sixty-five percent (65%) of the Gross Amount of Eligible Inventory
minus a reserve equal to three months' rent with respect to any Inventory
located on premises leased by the Borrower from a landlord that has not executed
a landlord lien waiver acceptable to the Agent to the extent such Inventory is
located in a state which the Agent has determined has a statutory landlord's
lien; plus (iii) at all times between the Closing Date and April 30, 1998,
$10,000,000; plus (iv) at all times between December 1, 1998 and April 30, 1999
and between December 1, 1999 and April 30, 2000, $7,500,000; plus (v) at all
times between December 1, 2000 (and each year thereafter) and April 30, 2001
(and each year thereafter), $5,000,000; plus (vi) the Guarantied Overadvance
Amount.
"Borrowing Base Certificate" means a certificate, in substantially the
form of Exhibit C-1 attached hereto and made a part hereof, setting forth the
Borrowing Base and the component calculations thereof.
"Borrowing Date" means a date on which an Advance or Swing Line Loan is
made hereunder.
"Borrowing Notice" is defined in Section 2.8 hereof.
"Business Activity Report" means (A) a Notice of Business Activities
Report from the State of Minnesota, Department of Revenue or (B) any similar
report required by any other State relating to the ability of the Borrower to
enforce its accounts receivable claims against account debtors located in any
such state.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Loans bearing interest at the Eurodollar Rate, a day (other than a
Saturday or Sunday)
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on which banks are open for business in Indianapolis, Indiana and Chicago,
Illinois and on which dealings in Dollars are carried on in the London interbank
market and (ii) for all other purposes a day (other than a Saturday or Sunday)
on which banks are open for business in Indianapolis, Indiana and Chicago,
Illinois.
"Capital Expenditures" means, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including
Capitalized Leases and Permitted Purchase Money Indebtedness) by the Borrower
and its Subsidiaries during that period that, in conformity with Agreement
Accounting Principles, are required to be included in or reflected by the
property, plant, equipment or similar fixed asset accounts reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries, exclusive of
Permitted Acquisitions.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"Capitalized Lease" of a Person means any lease of property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be capitalized
on a balance sheet of such Person prepared in accordance with Agreement
Accounting Principles.
"Cash Equivalents" means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States government and backed by the
full faith and credit of the United States government; (ii) domestic and
Eurodollar certificates of deposit and time deposits, bankers' acceptances and
floating rate certificates of deposit issued by any commercial bank organized
under the laws of the United States, any state thereof, the District of
Columbia, any foreign bank, or its branches or agencies (fully protected against
currency fluctuations for any such deposits with a term of more than ninety (90)
days); (iii) shares of money market, mutual or similar funds having assets in
excess of $100,000,000 and the investments of which are limited to investment
grade securities (i.e., securities rated at least Baa by Moody's Investors
Service, Inc. or at least BBB by Standard & Poor's Corporation); and (iv)
commercial paper of United States and foreign banks and bank holding companies
and their subsidiaries and United States and foreign finance, commercial
industrial or utility companies which, at the time of acquisition, are rated A-1
(or better) by Standard & Poor's Corporation or P-1 (or better) by Moody's
Investors
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Services, Inc.; provided that the maturities of such Cash Equivalents shall not
exceed 365 days.
"Change" is defined in Section 4.2 hereof.
"Change of Control" means an event or series of events by which:
(a) LDI, Ltd. ceases to own and control directly or
indirectly, 51% or more of the combined voting power of the
Borrower's Capital Stock ordinarily having the right to vote at an
election of directors; or
(b) during any period of twelve (12) consecutive calendar
months, individuals: (i) who were directors of the Borrower on the
first day of such period, or (ii) whose election or nomination for
election to the board of directors of the Borrower was recommended
or approved by at least a majority of the directors then still in
office who were directors of the Borrower on the first day of such
period, or whose election or nomination for election was so
approved, shall cease to constitute a majority of the board of
directors of the Borrower; or
(c) the Borrower consolidates with or merges into another
corporation or conveys, transfers or leases all or substantially all
of its property to any Person, or any corporation consolidates with
or merges into the Borrower, in either event pursuant to a
transaction in which the outstanding Capital Stock of the Borrower
is reclassified or changed into or exchanged for cash, securities or
other property.
"Closing Date" means the date on which the Term Loans and the initial
Revolving Loans are advanced hereunder.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Collateral" means all property and interests in property now owned or
hereafter acquired by the Borrower or any of its Subsidiaries in or upon which a
security interest, lien or mortgage is granted to the Agent, for the benefit of
the Holders of Secured Obligations, or to the Agent, for the benefit of the
Lenders, whether under the Security Agreement, under any of the other Collateral
Documents or under any of the other Loan Documents.
"Collateral Documents" means all agreements, instruments and documents
executed in connection with this Agreement, including, without limitation, the
Security Agreement and all other security agreements, loan agreements, notes,
guarantees, pledges, powers of attorney, consents, assignments, contracts, fee
letters, notices, leases, financing statements and all other written matter
whether heretofore, now, or hereafter executed by or on behalf
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of the Borrower or any of its Subsidiaries and delivered to the Agent or any of
the Lenders, together with all agreements and documents referred to therein or
contemplated thereby.
"Commission" means the Securities and Exchange Commission and any Person
succeeding to the functions thereof.
"Commitment" means, for each Lender, collectively, such Lender's Revolving
Loan Commitment and Term Loan Commitment.
"Consolidated Assets" means the total assets of the Borrower and its
Subsidiaries on a consolidated basis determined in accordance with Agreement
Accounting Principles.
"Consolidated Net Worth" means, at a particular date, all amounts which
would be included under shareholders' equity for any Person and its consolidated
Subsidiaries deter mined in accordance with Agreement Accounting Principles.
"Contaminant" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos, polychlorinated biphenyls ("PCBs"), or any
constituent of any such substance or waste, and includes but is not limited to
these terms as defined in Environmental, Health or Safety Requirements of Law.
"Contingent Obligation", as applied to any Person, means any Contractual
Obligation, contingent or otherwise, of that Person with respect to any
Indebtedness of another or other obligation or liability of another, including,
without limitation, any such Indebtedness, obligation or liability of another
directly or indirectly guaranteed, endorsed (otherwise than for collection or
deposit in the ordinary course of business), co-made or discounted or sold with
recourse by that Person, or in respect of which that Person is otherwise
directly or indirectly liable, including Contractual Obligations (contingent or
otherwise) arising through any agreement to purchase, repurchase, or otherwise
acquire such Indebtedness, obligation or liability or any security therefor, or
to provide funds for the payment or discharge thereof (whether in the form of
loans, advances, stock purchases, capital contributions or otherwise), or to
maintain solvency, assets, level of income, or other financial condition, or to
make payment other than for value received.
"Contractual Obligation", as applied to any Person, means any provision of
any equity or debt securities issued by that Person or any indenture, mortgage,
deed of trust, security agreement, pledge agreement, guaranty, contract,
undertaking, agreement or instrument, in any case in writing, to which that
Person is a party or by which it or any of its properties is bound, or to which
it or any of its properties is subject.
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"Controlled Group" means the group consisting of (i) any corporation which
is a member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Borrower; (ii) a partnership or other trade
or business (whether or not incorporated) which is under common control (within
the meaning of Section 414(c) of the Code) with the Borrower; and (iii) a member
of the same affiliated service group (within the meaning of Section 414(m) of
the Code) as the Borrower, any corporation described in clause (i) above or any
partnership or trade or business described in clause (ii) above.
"Controlled Subsidiary" of any Person means a Subsidiary of such Person
(i) 90% or more of the total Equity Interests or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more wholly-owned Subsidiaries of such Person and (ii)
of which such Person possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies, whether through the ownership
of voting securities, by agreement or otherwise.
"Conversion/Continuation Notice" is defined in Section 2.10(D) hereof.
"Cure Loan" is defined in Section 9.2(iii) hereof.
"Customary Permitted Liens" means:
(i) Liens (other than Environmental Liens and Liens in favor
of the IRS or the PBGC) with respect to the payment of taxes,
assessments or governmental charges in all cases which are not yet due
or (if foreclosure, distraint, sale or other similar proceedings shall
not have been commenced) which are being contested in good faith by
appropriate proceedings properly instituted and diligently conducted
and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with Agreement Accounting
Principles;
(ii) statutory Liens of landlords and Liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen and other
similar Liens imposed by law created in the ordinary course of business
for amounts not yet due or which are being contested in good faith by
appropriate proceedings properly instituted and diligently conducted
and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with Agreement Accounting
Principles;
(iii) Liens (other than Environmental Liens and Liens in favor
of the IRS or the PBGC) incurred or deposits made in the ordinary
course of business in connection with worker's compensation,
unemployment insurance or other types of social security benefits or to
secure the performance of bids, tenders, sales, contracts (other than
for the repayment of borrowed money), surety, appeal and
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performance bonds; provided that (A) all such Liens do not in the
aggregate materially detract from the value of the Borrower's or such
Subsidiary's assets or property taken as a whole or materially impair
the use thereof in the operation of the businesses taken as a whole,
and (B) all Liens securing bonds to stay judgments or in connection
with appeals do not secure at any time an aggregate amount exceeding
$1,000,000;
(iv) Liens arising with respect to zoning restrictions,
easements, licenses, reservations, covenants, rights-of-way, utility
easements, building restrictions and other similar charges or
encumbrances on the use of real property which do not in any case
materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the business of the Borrower or
any of its Subsidiaries;
(v) Liens of attachment or judgment with respect to judgments,
writs or warrants of attachment, or similar process against the
Borrower or any of its Subsidiaries which do not constitute a Default
under Section 8.1(H) hereof; and
(vi) any interest or title of the lessor in the property
subject to any operating lease entered into by the Borrower or any of
its Subsidiaries in the ordinary course of business.
"Default" means an event described in Article VIII hereof.
"DOL" means the United States Department of Labor and any Person
succeeding to the functions thereof.
"Dollar" and "$" means dollars in the lawful currency of the United
States.
"EBITDA" means, for any period, on a consolidated basis for the Borrower
and its Subsidiaries, the sum of the amounts for such period, without
duplication, of (i) Net Income, plus (ii) Interest Expense, plus (iii) charges
against income for foreign, federal, state and local taxes to the extent
deducted in computing Net Income, plus (iv) depreciation expense to the extent
deducted in computing Net Income, plus (v) amortization expense, including,
without limitation, amortization of goodwill and other intangible assets,
Transaction Costs, and other fees, costs and expenses in connection with the
Tender Offer and the Merger to the extent deducted in computing Net Income, plus
(vi) other non-cash charges classified as long-term deferrals in accordance with
Agreement Accounting Principles to the extent deducted in computing Net Income,
plus (vii) other extraordinary non-cash charges to the extent deducted in
computing Net Income.
"Eligible Inventory" means Inventory of the Borrower which is held, by the
Borrower or any party contractually obligated to store or handle the inventory,
for sale or lease in the ordinary course of business or furnished under any
contract of service by the
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Borrower which continues to meet standards of eligibility from time to time
established in accordance with this Agreement. Standards of eligibility will be
established by the Agent in its reasonable credit judgment and may be revised
from time to time by the Agent in its reasonable credit judgment (which credit
judgment shall be exercised in a manner that is not arbitrary or capricious and
shall be exercised in a manner not inconsistent with the manner in which the
initial ineligibility standards were determined). In general, without limiting
the foregoing, the following inventory is not Eligible Inventory: (i) Inventory
which is obsolete, not in good condition, not either currently usable or
currently saleable in the ordinary course of the Borrower's business or does not
meet all material standards imposed by any governmental authority having
regulatory authority over such item of Inventory, its use or its sale; (ii)
Inventory consisting of packaging material, supplies, raw material or work in
process; (iii) Inventory which (a) is consigned to a third party for sale or (b)
is on consignment from a third party to the Borrower for sale; (iv) Inventory
which consists of goods in transit which has been sold to a dealer or
distributor of the Borrower and is in the process of being delivered to that
dealer or distributor; (v) Inventory which is subject to a Lien in favor of any
Person other than the Agent other than Customary Permitted Liens or Permitted
Existing Liens; (vi) Inventory with respect to which the Agent does not have a
first and valid fully-perfected security interest; (vii) Inventory which is not
located either (a) on the Borrower's owned premises in the United States listed
on Schedule 2 to the Security Agreement or (b) in other owned or leased
premises, warehouses or with bailees in the United States listed on Schedule 2
to the Security Agreement permitted to be established under the Security
Agreement; (viii) Inventory which is evidenced by a Receivable; and (ix)
Inventory which is not in full conformity with the representations and
warranties made by the Borrower to the Agent with respect thereto whether
contained in this Agreement or the Security Agreement.
"Eligible Receivables" means accounts receivable created by the Borrower
in the ordinary course of its business arising out of the sale of goods or
rendition of services by the Borrower, which receivables are and at all times
shall continue to meet standards of eligibility from time to time established in
accordance with this Agreement. Standards of eligibility will be established by
the Agent in its reasonable credit judgment and may be revised from time to time
by the Agent in its reasonable credit judgment (which credit judgment shall be
exercised in a manner that is not arbitrary or capricious and shall be exercised
in a manner not inconsistent with the manner in which the initial ineligibility
standards were determined). In general, without limiting the foregoing, the
following receivables are not Eligible Receivables:
(i) receivables which remain unpaid ninety (90) days after the date of the
original applicable invoice or sixty (60) days after the due date, whichever is
earlier, except those receivables subject to dated terms extended by Borrower in
an aggregate amount not to exceed $5,000,000 as of the date of determination
will be treated as eligible (subject to the other eligibility criteria) to the
extent such receivables are not unpaid more than ninety (90)
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days after the due date and the due date is not more than one hundred eighty
(180) days after the date of the original applicable invoice.
(ii) receivables with respect to which the account debtor is a director,
officer, employee, Subsidiary or Affiliate of the Borrower;
(iii) receivables with respect to which the account debtor is any federal
governmental authority, the United States of America, or, in each case, any
department, agency or instrumentality thereof, unless with respect to any such
receivable, the Borrower has complied to the Agent's satisfaction with the
provisions of the Federal Assignment of Claims Act or other applicable statutes,
including, without limitation, executing and delivering to Agent all statements
of assignment and/or notification which are in form and substance acceptable to
Agent and which are deemed necessary by Agent to effectuate the assignment to
the Agent of such receivables.
(iv) receivables not denominated in U.S. Dollars or Canadian Dollars;
(v) receivables with respect to which the account debtor is (a) not a
resident of the United States unless the account debtor has supplied the
Borrower with an irrevocable letter of credit issued by a financial institution
satisfactory to the Agent sufficient to cover such receivable in form and
substance satisfactory to the Agent;
(vi) receivables with respect to which the account debtor has (a) asserted
a counterclaim, (b) a right of setoff, or (c) a receivable owing from the
Borrower but only to the extent of such counterclaim, setoff, rebate or
receivable;
(vii) receivables with respect to which the Agent does not have a first
and valid fully perfected and enforceable security interest for which notice has
been provided to the Borrower subject only to Customary Permitted Liens and
Permitted Existing Liens;
(viii) receivables with respect to which the account debtor is the subject
of bankruptcy or a similar insolvency proceeding or has made an assignment for
the benefit of creditors or whose assets have been conveyed to a receiver,
trustee or assignee for the benefit of creditors;
(xi) receivables with respect to which the account debtor's obligation to
pay the receivable is conditional upon the account debtor's approval or is
otherwise subject to any contractual repurchase obligation or return right, as
with sales made on a bill-and-hold, guaranteed sale, sale-and-return, sale on
approval (except with respect to receivables in connection with which Account
Debtors are entitled to return Inventory on the basis of the quality of such
Inventory) or consignment basis;
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(x) receivables with respect to which the account debtor is located in
Minnesota (or any other jurisdiction which adopts a statute or other requirement
with respect to which any Person that obtains business from within such
jurisdiction or is otherwise subject to such jurisdiction's tax law requiring
such Person to file a Business Activity Report or make any other required
filings in a timely manner in order to enforce its claims in such jurisdiction's
courts or arising under such jurisdiction's laws); provided, however, such
receivables shall nonetheless be eligible if the Borrower has filed a Business
Activity Report (or other applicable report or filing) with the applicable state
office by the time required or is qualified to do business in such jurisdiction
and, at the time the receivable was created, was qualified to do business in
such jurisdiction or had on file with the applicable state office a current
Business Activity Report (or other applicable report or filing);
(xi) receivables with respect to which the account debtor's obligation
does not constitute its legal, valid and binding obligation, enforceable against
it in accordance with its terms;
(xii) receivables with respect to which the Borrower has not yet shipped
the applicable goods, performed the applicable service or issued the applicable
invoice;
(xiii) any receivable which is not in conformity with the representations
and warranties made by the Borrower to the Agent with respect thereto whether
contained in this Agreement or the relevant Security Agreement;
(xiv) receivables in connection with which the Borrower or any other party
to such Receivable is in default in the performance or observance of any of the
terms thereof in any material respect; and
(xv) receivables for which the prospect of payment or performance by the
Account Debtor is or will be impaired as determined by the Agent in the exercise
of its reasonable credit judgment (which credit judgment shall not be exercised
in a manner that is arbitrary or capricious and shall be exercised in a manner
not inconsistent with the manner in which the initial ineligibility standards
were determined).
"Environmental, Health or Safety Requirements of Law" means all
Requirements of Law derived from or relating to federal, state and local laws or
regulations relating to or addressing pollution or protection of the
environment, or protection of worker health or safety, including, but not
limited to, the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. ss. 9601 et seq., the Occupational Safety and Health Act of 1970,
29 U.S.C. ss. 651 et seq., and the Resource Conservation and Recovery Act of
1976, 42 U.S.C. ss. 6901 et seq., in each case including any amendments thereto,
any successor statutes, and any regulations or guidance promulgated thereunder,
and any state or local equivalent thereof.
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"Environmental Lien" means a lien in favor of any Governmental Authority
for (a) any liability under Environmental, Health or Safety Requirements of Law,
or (b) damages arising from, or costs incurred by such Governmental Authority in
response to, a Release or threatened Release of a Contaminant into the
environment.
"Environmental Property Transfer Act" means any applicable requirement of
law that conditions, restricts, prohibits or requires any notification or
disclosure triggered by the closure of any property or the transfer, sale or
lease of any property or deed or title for any property for environmental
reasons, including, but not limited to, any so-called "Industrial Site Recovery
Act" or "Responsible Property Transfer Act."
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time including (unless the context otherwise requires) any
rules or regulations promulgated thereunder.
"Eurodollar Base Rate" means, with respect to a Eurodollar Rate Loan for
any specified Interest Period, either (i) the rate of interest per annum equal
to the rate for deposits in U.S. Dollars in the approximate amount of the pro
rata share of NBD Bank, N.A. of such Eurodollar Rate Loan with a maturity
approximately equal to such Interest Period which appears on Telerate Page 3750,
or, if there is more than one such rate, the average of such rates rounded to
the nearest 1/100 of 1%, as of 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period or (ii) if no such rate of interest
appears on Telerate Page 3750 for any specified Interest Period, the rate at
which deposits in U.S. Dollars are offered by NBD Bank, N.A. to first-class
banks in the London interbank market at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, in the
approximate amount of the pro rata share of NBD Bank, N.A. of such Eurodollar
Rate Loan and having a maturity approximately equal to such Interest Period. The
term "Telerate Page 3750" means the display designated as "Page 3750" on the
Associated Press-Dow Jones Telerate Service (or such other page as may replace
Page 3750 on the Associated Press-Dow Jones Telerate Service or such other
service as may be nominated by the British Bankers' Association as the
information vendor for the purpose of displaying British Bankers' Association
interest rate settlement rates for U.S. Dollars). Any Eurodollar Base Rate
determined on the basis of the rate displayed on Telerate Page 3750 in
accordance with the foregoing provisions of this subparagraph shall be subject
to corrections, if any, made in such rate and displayed by the Associated
Press-Dow Jones Telerate Service within one hour of the time when such rate is
first displayed by such service.
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"Eurodollar Rate" means, with respect to a Eurodollar Rate Loan for the
relevant Interest Period, the Eurodollar Base Rate applicable to such Interest
Period plus the then Applicable Eurodollar Margin. The Eurodollar Rate shall be
rounded to the next higher multiple of 1/100 of 1% if the rate is not such a
multiple.
"Eurodollar Rate Advance" means an Advance which bears interest at the
Eurodollar Rate.
"Eurodollar Rate Loan" means a Loan, or portion thereof, which bears
interest at the Eurodollar Rate.
"Excess Cash Flow" means, for any fiscal year, an amount equal to the
Borrower's and its Subsidiaries' consolidated (i) EBITDA for such period, minus
(ii) income taxes paid in cash for such period, minus (iii) Capital Expenditures
paid in cash during such period, minus (iv) Interest Expense for such period,
minus (v) scheduled amortization of the principal portion of the Term Loans and
scheduled amortization of the principal portion of all other Indebtedness of the
Borrower and its Subsidiaries during such period, minus (vi) cash payments in
respect of extraordinary and nonrecurring items, minus (vii) the increase (or
plus the decrease) in Working Capital during such period, minus (viii) cash
payments made in such fiscal year in connection with Permitted Acquisitions, in
each case as calculated in accordance with Agreement Accounting Principles. All
such amounts shall be calculated assuming that the Borrower has conducted its
business in the ordinary course and in accordance with past practices.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Financing" means, with respect to any Person, the issuance or sale by
such Person of any Equity Interests of such Person or any Indebtedness
consisting of debt securities of such Person.
"Fixed Charge Coverage Ratio" is defined in Section 7.4(A) hereof.
"Floating Rate" means, for any day for any Loan, a rate per annum equal to
the Alternate Base Rate for such day, changing and as the Alternate Base Rate
changes, plus the then Applicable Floating Rate Margin.
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"Floating Rate Advance" means an Advance which bears interest at the
Floating Rate.
"Floating Rate Loan" means a Loan, or portion thereof, which bears
interest at the Floating Rate.
"Governmental Acts" is defined in Section 3.10(A) hereof.
"Governmental Authority" means any nation or government, any federal,
state, local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Gross Amount of Eligible Inventory" means Eligible Inventory valued at
cost determined on a first-in-first-out basis (determined in accordance with
GAAP, consistently applied) minus such reserves as the Agent elects to establish
in accordance with its reasonable credit judgment (which credit judgment shall
be exercised in a manner that is not arbitrary or capricious and shall be
exercised in a manner not inconsistent with the manner in which the initial
ineligibility standards were determined).
"Gross Amount of Eligible Receivables" means the outstanding face amount
of Eligible Receivables, determined in accordance with GAAP, consistently
applied, less (i) all finance charges, late fees and other fees that are
unearned, (ii) the value of any accrual which has been recorded by the Borrower
with respect to downward price adjustments and (iii) and such other reserves as
the Agent elects to establish in accordance with its reasonable credit judgment
(which credit judgment shall be exercised in a manner that is not arbitrary or
capricious and shall be exercised in a manner not inconsistent with the manner
in which the initial ineligibility standards were determined).
"Gross Negligence" means recklessness, or actions taken or omitted with
conscious indifference to or the complete disregard of consequences. Gross
Negligence does not mean the absence of ordinary care or diligence, or an
inadvertent act or inadvertent failure to act. If the term "gross negligence" is
used with respect to the Agent or any Lender or any indemnitee in any of the
other Loan Documents, it shall have the meaning set forth herein.
"Guarantied Overadvance Amount" means an amount equal to the amount
requested by the Borrower up to $5,000,000 provided 50% of such amount is
guarantied by LDI, Ltd. pursuant to a Guaranty acceptable in form and substance
to the Agent. The Guarantied Overadvance Amount can be terminated at any time
upon Borrower's request and will terminate automatically on December 31, 1999,
provided the Revolving Credit Obligations are not, after such termination,
greater than the Borrowing Base.
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"Hedging Obligations" of a Person means any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, commodity prices,
exchange rates or forward rates applicable to such party's assets, liabilities
or exchange transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"High Yield Note Agreement" means the Indenture between the Borrower and a
trustee acting on behalf of the note purchasers pursuant to which the Borrower
may plan to issue notes in the original principal amount of up to $100,000,000.
"Holders of Secured Obligations" shall mean the holders of the Secured
Obligations from time to time and shall include their respective successors,
transferees and assigns.
"Indebtedness" of any Person means, without duplication, such Person's (a)
obligations for borrowed money, (b) obligations representing the deferred
purchase price of property or services (other than accounts payable arising in
the ordinary course of such Person's business payable on terms customary in the
trade), (c) obligations, whether or not assumed, secured by Liens or payable out
of the proceeds or production from property or assets now or hereafter owned or
acquired by such Person, (d) obligations which are evidenced by notes,
acceptances or other instruments, (e) Capitalized Lease Obligations, (f)
Contingent Obligations, (g) obligations with respect to letters of credit and
(h) Hedging Obligations. The amount of Indebtedness of any Person at any date
shall be without duplication (i) the outstanding balance at such date of all
unconditional obligations as described above and the maximum liability of any
such Contingent Obligations at such date and (ii) in the case of Indebtedness of
others secured by a Lien to which the property or assets owned or held by such
Person is subject, the lesser of the fair market value at such date of any asset
subject to a Lien securing the Indebtedness of others and the amount of the
Indebtedness secured.
"Indemnified Matters" is defined in Section 10.7(B) hereof.
"Indemnitees" is defined in Section 10.7(B) hereof.
"Interest Expense" means, for any period, the total interest expense of
the Borrower and its consolidated Subsidiaries, whether paid or accrued
(including the interest component of Capitalized Leases, commitment and letter
of credit fees), but excluding
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interest expense not payable in cash (including amortization of discount), all
as determined in conformity with Agreement Accounting Principles.
"Interest Period" means, with respect to a Eurodollar Rate Loan, a period
of one (1), two (2), three (3) months or, six (6) months commencing on a
Business Day selected by the Borrower pursuant to this Agreement; provided,
however, notwithstanding anything in this Agreement to the contrary for the
period from the Closing Date to the earlier of (y) the date that is 90 days
after the Closing Date and (z) the date upon which the Agent confirms that the
loan syndication process has been complete (the ASyndication Period@), AInterest
Period@ means, with respect to a Eurodollar Rate Loan, a period of seven (7)
days. Other than during the Syndication Period, such Interest Period shall end
on (but exclude) the day which corresponds numerically to such date one, two,
three or six months thereafter; provided, however, that if there is no such
numerically corresponding day in such next, second, third or sixth succeeding
month, such Interest Period shall end on the last Business Day of such next,
second, third or sixth succeeding month, as the case may be. If an Interest
Period would otherwise end on a day which is not a Business Day, such Interest
Period shall end on the next succeeding Business Day, provided, however, that if
said next succeeding Business Day falls in a new calendar month, such Interest
Period shall end on the immediately preceding Business Day.
"Interest Rate Agreements" is defined in Section 7.3(P) hereof.
"Inventory" shall mean any and all goods, including, without limitation,
goods in transit, wheresoever located, whether now owned or hereafter acquired
by the Borrower, which are held for sale or lease, furnished under any contract
of service or held as raw materials, work in process or supplies, and all
materials used or consumed in the business of Borrower, and shall include all
right, title and interest of the Borrower in any property the sale or other
disposition of which has given rise to receivables and which has been returned
to or repossessed or stopped in transit by the Borrower.
"Investment" means, with respect to any Person, (i) any purchase or other
acquisition by that Person of any Indebtedness, Equity Interests or other
securities, or of a beneficial interest in any Indebtedness, Equity Interests or
other securities, issued by any other Person, (ii) any purchase by that Person
of all or substantially all of the assets of a business conducted by another
Person, and (iii) any loan, advance (other than deposits with financial
institutions available for withdrawal on demand, prepaid expenses, accounts
receivable, advances to employees and similar items made or incurred in the
ordinary course of business) or capital contribution by that Person to any other
Person, including all Indebtedness to such Person arising from a sale of
property by such Person other than in the ordinary course of its business.
"IRS" means the Internal Revenue Service and any Person succeeding to the
functions thereof.
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"Issuing Banks" means NBD Bank, N.A. and any Lender which, at the
Borrower's request, agrees, in each such Lender's sole discretion, to become an
Issuing Bank for the purpose of issuing Letters of Credit, and their respective
successors and assigns, in each case in such Lender's separate capacity as an
issuer of Letters of Credit pursuant to Section 3.1. The designation of any
Lender as an Issuing Bank after the date hereof shall be subject to the prior
written consent of the Agent.
"L/C Draft" means a draft drawn on an Issuing Bank pursuant to a Letter of
Credit.
"L/C Interest" shall have the meaning ascribed to such term in Section 3.6
hereof.
"L/C Obligations" means, without duplication, an amount equal to the sum
of (i) the aggregate of the amount then available for drawing under each of the
Letters of Credit, (ii) the face amount of all outstanding L/C Drafts
corresponding to the Letters of Credit, which L/C Drafts have been accepted by
the applicable Issuing Bank, (iii) the aggregate outstanding amount of all
Reimbursement Obligations at such time and (iv) the aggregate face amount of all
Letters of Credit requested by the Borrower but not yet issued (unless the
request for an unissued Letter of Credit has been denied).
"Lenders" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the Agent, any
office, branch, subsidiary or affiliate of such Lender or the Agent.
"Letter of Credit" means the letters of credit to be (a) issued by the
Issuing Banks pursuant to Section 3.1 hereof or (b) deemed issued by the Issuing
Banks pursuant to Section 3.2 hereof.
"Leverage Ratio" is defined in Section 7.4(B) hereof.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, the interest of a vendor or lessor
under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan(s)" means, with respect to a Lender, such Lender's portion of any
Advance made pursuant to Section 2.1 or Section 2.2 hereof, as applicable, and
in the case of the Swing Line Bank, any Swing Line Loan made pursuant to Section
2.3 hereof, and collectively all Term Loans, Revolving Loans and Swing Line
Loans, whether made or continued as or converted to Floating Rate Loans or
Eurodollar Rate Loans.
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"Loan Account" is defined in Section 2.15(F) hereof.
"Loan Documents" means this Agreement, the Notes and all other documents,
instruments and agreements executed in connection therewith or contemplated
thereby, as the same may be amended, restated or otherwise modified and in
effect from time to time.
"Margin Stock" shall have the meaning ascribed to such term in Regulation
U.
"Material Adverse Effect" means a material adverse effect upon (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower, or the Borrower and its Subsidiaries,
taken as a whole, (b) the ability of the Borrower or any of its Subsidiaries to
perform their respective obligations under the Loan Documents in any material
respect, or (c) the ability of the Lenders or the Agent to enforce in any
material respect the Obligations.
"Multiemployer Plan" means a "Multiemployer Plan" as defined in Section
4001(a)(3) of ERISA which is, or within the immediately preceding six (6) years
was, contributed to by either the Borrower or any member of the Controlled
Group.
"Merger" means the merger of Acquisition Corp. and Target pursuant to the
Merger Agreement.
"Merger Agreement" means that certain Agreement and Plan of Merger dated
as of October 14, 1997 among Borrower, Acquisition Corp. and Target.
"Net Cash Proceeds" means, with respect to any Asset Sale or any Financing
by any Person, (a) cash (freely convertible into Dollars) received by such
Person or any Subsidiary of such Person from such Asset Sale (including cash
received as consideration for the assumption or incurrence of liabilities
incurred in connection with or in anticipation of such Asset Sale) or such
Financing, after (i) provision for all income or other taxes measured by or
resulting from such Asset Sale, (ii) payment of all brokerage commissions and
other fees and expenses related to such Asset Sale or such Financing, and (iii)
all amounts used to repay Indebtedness secured by a Lien on any asset disposed
of in such Asset Sale or which is or may be required (by the express terms of
the instrument governing such Indebtedness) to be repaid in connection with such
Asset Sale (including payments made to obtain or avoid the need for the consent
of any holder of such Indebtedness); and (b) cash payments in respect of any
other consideration received by such Person or any Subsidiary of such Person
from such Asset Sale upon receipt of such cash payments by such Person or such
Subsidiary.
"Net Income" means, for any period, the net earnings (or loss) after taxes
of the Borrower and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with Agreement
Accounting Principles.
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"Non Pro Rata Loan" is defined in Section 9.2 hereof.
"Notes" means the Revolving Notes, Swing Line Notes and Term Notes.
"Notice of Assignment" is defined in Section 13.3(B) hereof.
"Obligations" means all Loans, advances, debts, liabilities, obligations,
covenants and duties owing by the Borrower to the Agent, any Lender, the Swing
Line Bank, the Arranger, any Affiliate of the Agent or any Lender, or any
Indemnitee, of any kind or nature, present or future, arising under this
Agreement, the Notes or any other Loan Document, whether or not evidenced by any
note, guaranty or other instrument, whether or not for the payment of money,
whether arising by reason of an extension of credit, loan, guaranty,
indemnification, or in any other manner, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired. The term includes, without
limitation, all interest, charges, expenses, fees, attorneys' fees and
disbursements, paralegals' fees (in each case whether or not allowed), and any
other sum chargeable to the Borrower under this Agreement or any other Loan
Document.
"Other Taxes" is defined in Section 2.15(E)(ii) hereof.
"Participants" is defined in Section 13.2(A) hereof.
"Payment Date" means the last Business Day of each calendar quarter.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permitted Acquisition" is defined in Section 7.3(G) hereof.
"Permitted Existing Indebtedness" means the Indebtedness of the Borrower
and its Subsidiaries identified as such on Schedule 1.1.1 to this Agreement.
"Permitted Existing Investments" means the Investments of the Borrower and
its Subsidiaries identified as such on Schedule 1.1.2 to this Agreement.
"Permitted Existing Liens" means the Liens on assets of the Borrower and
its Subsidiaries identified as such on Schedule 1.1.3 to this Agreement.
"Permitted Purchase Money Indebtedness" is defined in Section 7.3(A)(viii)
hereof.
"Permitted Refinancing Indebtedness" means any replacement, renewal,
refinancing or extension of any Indebtedness permitted by this Agreement that
(i) does not exceed the aggregate principal amount (plus accrued interest and
any applicable premium and
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associated fees and expenses) of the Indebtedness being replaced, renewed,
refinanced or extended, (ii) does not have a Weighted Average Life to Maturity
at the time of such replacement, renewal, refinancing or extension that is less
than the Weighted Average Life to Maturity of the Indebtedness being replaced,
renewed, refinanced or extended, (iii) does not rank at the time of such
replacement, renewal, refinancing or extension senior to the Indebtedness being
replaced, renewed, refinanced or extended, and (iv) does not contain terms
(including, without limitation, terms relating to security, amortization,
interest rate, premiums, fees, covenants, event of default and remedies)
materially less favorable to the Borrower or to the Lenders than those
applicable to the Indebtedness being replaced, renewed, refinanced or extended.
"Person" means any individual, corporation, firm, enterprise, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company or other entity of any kind, or any
government or political subdivision or any agency, department or instrumentality
thereof.
"Plan" means an employee benefit plan defined in Section 3(3) of ERISA in
respect of which the Borrower or any member of the Controlled Group is, or
within the immediately preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA.
"Prime Rate" means the prime rate of interest announced by NBD Bank, N.A.
from time to time, changing when and as said prime rate changes. The prime rate
announced by NBD Bank, N.A. is merely an index rate and use of the term "prime
rate" shall not imply that it is the lowest rate charged by NBD Bank, N.A. to
any of its customers.
"Pro Rata Share" means, with respect to any Lender, (i) at any time prior
to the Closing Date, the percentage obtained by dividing (A) such Lender's
Commitments at such time (in each case, as adjusted from time to time in
accordance with the provisions of this Agreement) by (B) the sum of the
Aggregate Term Loan Commitment and the Aggregate Revolving Loan Commitment at
such time and (ii) at any time after the Closing Date, the percentage obtained
by dividing (A) the sum of such Lender's Term Loan and Revolving Loan Commitment
at such time (in each case, as adjusted from time to time in accordance with the
provisions of this Agreement) by (B) the sum of the aggregate amount of all of
the Term Loans and the Aggregate Revolving Loan Commitment at such time;
provided, however, if all of the Commitments are terminated pursuant to the
terms of this Agreement, then "Pro Rata Share" means the percentage obtained by
dividing (x) the sum of such Lender's Term Loan and Revolving Loans and, in the
case of the Swing Line Bank, Swing Lines Loans, by (y) the aggregate amount of
all Term Loans, Revolving Loans and Swing Line Loans.
"Purchasers" is defined in Section 13.3(A) hereof.
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"Rate Option" means the Eurodollar Rate or the Floating Rate.
"Register" is defined in Section 13.3(C) hereof.
"Regulation G" means Regulation G of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by nonbank, nonbroker lenders for the purpose of purchasing
or carrying margin stock (as defined therein).
"Regulation T" means Regulation T of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by and to brokers and dealers of securities for the purpose
of purchasing or carrying margin stock (as defined therein).
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying Margin
Stock applicable to member banks of the Federal Reserve System.
"Regulation X" means Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by foreign lenders for the purpose of purchasing or carrying
margin stock (as defined therein).
"Reimbursement Obligation" is defined in Section 3.7 hereof.
"Release" means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment, including the movement of Contaminants through or in the
air, soil, surface water or groundwater.
"Rentals" of a Person means the aggregate fixed amounts payable by such
Person under any lease of real or personal property but does not include any
amounts payable under Capitalized Leases of such Person.
"Replacement Lender" is defined in Section 2.20 hereof.
"Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section
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4043(a) of ERISA that it be notified within 30 days after such event occurs,
provided, however, that a failure to meet the minimum funding standards of
Section 412 of the Code and of Section 302 of ERISA shall be a Reportable Event
regardless of the issuance of any such waiver of the notice requirement in
accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code.
"Required Lenders" means Lenders whose Pro Rata Shares, in the aggregate,
are greater than fifty percent (50%); provided, however, that, if any of the
Lenders shall have failed to fund its Pro Rata Share of any Revolving Loan
requested by the Borrower, or any Swing Line Loan as requested by the Agent,
which such Lenders are obligated to fund under the terms of this Agreement and
any such failure has not been cured, then for so long as such failure continues,
"Required Lenders" means Lenders (excluding all Lenders whose failure to fund
their respective Pro Rata Shares of such Revolving Loans or Swing Line Loans has
not been so cured) whose Pro Rata Shares represent greater than fifty percent
(50%) of the aggregate Pro Rata Shares of such Lenders; provided further,
however, that, if the Commitments have been terminated pursuant to the terms of
this Agreement, "Required Lenders" means Lenders (without regard to such
Lenders' performance of their respective obligations hereunder) whose aggregate
ratable shares (stated as a percentage) of the aggregate outstanding principal
balance of all Loans and L/C Obligations are greater than fifty percent (50%).
"Requirements of Law" means, as to any Person, the charter and by-laws or
other organizational or governing documents of such Person, and any law, rule or
regulation, or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject including,
without limitation, the Securities Act of 1933, the Securities Exchange Act of
1934, Regulations G, T, U and X, ERISA, the Fair Labor Standards Act, the Worker
Adjustment and Retraining Notification Act, Americans with Disabilities Act of
1990, and any certificate of occupancy, zoning ordinance, building,
environmental or land use requirement or permit or environmental, labor,
employment, occupational safety or health law, rule or regulation, including
Environmental, Health or Safety Requirements of Law.
"Reserves" shall mean the maximum reserve requirement, as prescribed by
the Board of Governors of the Federal Reserve System (or any successor) with
respect to "Eurocurrency liabilities" or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Eurodollar Rate Loans is determined or category of extensions of credit or other
assets which includes loans by a non-United States office of any Lender to
United States residents.
"Restricted Payment" means (i) any dividend or other distribution, direct
or indirect, on account of any Equity Interests of the Borrower now or hereafter
outstanding, except a dividend payable solely in the Borrower's Capital Stock
(other than Disqualified Stock)
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or in options, warrants or other rights to purchase such Capital Stock, (ii) any
redemption, retirement, purchase or other acquisition for value, direct or
indirect, of any Equity Interests of the Borrower or any of its Subsidiaries now
or hereafter outstanding, (iii) any redemption, purchase, retirement,
defeasance, prepayment or other acquisition for value, direct or indirect, of
any Indebtedness other than the Obligations, (iv) any payment of a claim for the
rescission of the purchase or sale of, or for material damages arising from the
purchase or sale of, any Indebtedness (other than the Obligations) or any Equity
Interests of the Borrower or any of the Borrower's Subsidiaries, or of a claim
for reimbursement, indemnification or contribution arising out of or related to
any such claim for damages or rescission and (v) any payment of any management
fee or similar consulting fee to any Affiliate of the Borrower.
"Revolving Credit Availability" means, at any particular time, the amount
by which the lesser of (i) Aggregate Revolving Loan Commitment at such time or
(ii) the Borrowing Base at such time exceeds the Revolving Credit Obligations at
such time.
"Revolving Credit Obligations" means, at any particular time, the sum of
(i) the outstanding principal amount of the Revolving Loans at such time, plus
(ii) the outstanding principal amount of the Swing Line Loans at such time, plus
(iii) the L/C Obligations at such time.
"Revolving Loan" is defined in Section 2.2 hereof.
"Revolving Loan Commitment" means, for each Lender, the obligation of such
Lender to make Revolving Loans and to purchase participations in Letters of
Credit not exceeding the amount set forth on Exhibit A to this Agreement
opposite its name thereon under the heading "Revolving Loan Commitment" or the
signature page of the assignment and acceptance by which it became a Lender, as
such amount may be modified from time to time pursuant to the terms of this
Agreement or to give effect to any applicable assignment and acceptance.
"Revolving Loan Termination Date" means November 19, 2003.
"Revolving Note" means a promissory note, in substantially the form of
Exhibit B-1 hereto, duly executed by the Borrower and payable to the order of a
Lender in the amount of its Revolving Loan Commitment, including any amendment,
restatement, modification, renewal or replacement of such Revolving Note.
"Risk-Based Capital Guidelines" is defined in Section 4.2 hereof.
"Secured Obligations" means, collectively, (i) the Obligations and (ii)
all Hedging Obligations owing under Interest Rate Agreements to any Lender or
any affiliate of any Lender.
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"Security Agreement" means that certain Security Agreement of even date
herewith executed by the Borrower in favor of the Agent for the benefit of the
Holders of Secured Obligations, as amended, restated or otherwise modified from
time to time.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Solvent" shall mean, when used with respect to any Person, that at the
time of determination:
(i) the fair value of its assets (both at fair valuation and
at present fair saleable value) is equal to or in excess of the
total amount of its liabilities, including, without limitation,
contingent liabilities; and
(ii) it is then able and expects to be able to pay its debts
as they mature; and
(iii) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
With respect to contingent liabilities (such as litigation, guarantees and
pension plan liabilities), such liabilities shall be computed at the amount
which, in light of all the facts and circumstances existing at the time,
represent the amount which can be reasonably be expected to become an actual or
matured liability.
"Subordination Agreement" means that certain Agreement between LDI, Ltd.
and the Agent on behalf of the Lenders with respect to the Subordinated Notes.
"Subordinated Notes" means (i) those notes in the original principal
amount of $30,000,000 dated as of November 19, 1997 issued to LDI, Ltd. and
subject to the terms of the Subordination Agreement or (ii) those certain notes
which may be issued pursuant to the High Yield Note Agreement.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall mean a
Subsidiary of the Borrower.
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"Swing Line Bank" means NBD Bank, N.A. or any other Lender as a successor
Swing Line Bank.
"Swing Line Commitment" means the obligation of the Swing Line Bank to
make Swing Line Loans up to a maximum of $5,000,000 at any one time outstanding.
"Swing Line Loan" means a Loan made available to the Borrower by the Swing
Line Bank pursuant to Section 2.3 hereof.
"Swing Line Note" means a promissory note, in substantially the form of
Exhibit B-2 hereto, duly executed by the Borrower and payable to the order of
the Swing Line Bank in the amount of its Swing Line Commitment, including any
amendment, restatement, modification, renewal or replacement of such Swing Line
Note.
"Target" means Thompson PBE, Inc., a Delaware corporation.
"Taxes" is defined in Section 2.15(E)(i) hereof.
"Tender Offer" means the tender offer announced October 15, 1997 pursuant
to which Acquisition Corp. has offered to purchase the stock of Target.
"Termination Date" means the earlier of (a) the Revolving Loan Termination
Date, and (b) the date of termination of the Aggregate Revolving Loan Commitment
pursuant to Section 2.6 hereof or the Commitments pursuant to Section 9.1
hereof.
"Termination Event" means (i) a Reportable Event with respect to any
Benefit Plan; (ii) the withdrawal of the Borrower or any member of the
Controlled Group from a Benefit Plan during a plan year in which the Borrower or
such Controlled Group member was a "substantial employer" as defined in Section
4001(a)(2) of ERISA or the cessation of operations which results in the
termination of employment of twenty percent (20%) of Benefit Plan participants
who are employees of the Borrower or any member of the Controlled Group; (iii)
the imposition of an obligation on the Borrower or any member of the Controlled
Group under Section 4041 of ERISA to provide affected parties written notice of
intent to terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to
terminate a Benefit Plan; (v) any event or condition which might constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Benefit Plan; or (vi) the partial or complete
withdrawal of the Borrower or any member of the Controlled Group from a
Multiemployer Plan.
"Term Loan" is defined in Section 2.1(A) hereof.
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"Term Loan Commitment" means, for each Lender, the obligation of such
Lender to make its Term Loan pursuant to the terms and conditions of this
Agreement, and which shall not exceed the principal amount set forth on Exhibit
A to this Agreement opposite its name thereon under the heading "Term Loan
Commitment", as such amount may be modified from time to time pursuant to the
terms hereof.
"Term Loan Termination Date" means November 19, 2003.
"Term Note" means a promissory note, in substantially the form of Exhibit
B-3 hereto, duly executed by the Borrower and payable to the order of a Lender
in the amount of its Term Loan Commitment, including any amendment, restatement,
modification, renewal or replacement of such Term Note.
"Transaction Costs" means the fees, costs and expenses payable by the
Borrower in connection with the execution, delivery and performance of the
Transaction Documents.
"Transaction Documents" means the Loan Documents and the documents
executed and delivered by the Borrower or any of its Subsidiaries in connection
with the Tender Offer and the Merger Agreement.
"Transferee" is defined in Section 13.5 hereof.
"Type" means, with respect to any Loan, its nature as a Floating Rate Loan
or a Eurodollar Rate Loan.
"Unfunded Liabilities" means (i) in the case of Single Employer Plans, the
amount (if any) by which the present value of all vested nonforfeitable benefits
under all Single Employer Plans exceeds the fair market value of all such Plan
assets allocable to such benefits, all determined as of the then most recent
valuation date for such Plans, and (ii) in the case of Multiemployer Plans, the
withdrawal liability that would be incurred by the Controlled Group if all
members of the Controlled Group completely withdrew from all Multiemployer
Plans.
"Unmatured Default" means an event which, but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"Weighted Average Life to Maturity" means when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
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"Working Capital" means, as at any date of determination, the excess, if
any, of (i) the Borrower's consolidated current assets, except cash and Cash
Equivalents, over (ii) the Borrower's consolidated current liabilities, except
current maturities of long-term debt and Revolving Credit Obligations as of such
date and all accrued interest as of such date.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms. Any accounting terms used in this
Agreement which are not specifically defined herein shall have the meanings
customarily given them in accordance with generally accepted accounting
principles in existence as of the date hereof.
1.2 References. The existence throughout the Agreement of references to
the Borrower's Subsidiaries is for a matter of convenience only. Any references
to Subsidiaries of the Borrower set forth herein shall not in any way be
construed as consent by the Agent or any Lender to the establishment,
maintenance or acquisition of any Subsidiary, except as may otherwise be
permitted hereunder.
ARTICLE II: THE TERM LOAN AND REVOLVING LOAN FACILITIES
2.1. Term Loans. (A) Amount of Term Loans. Subject to the terms and
conditions set forth in this Agreement, each Lender on the Closing Date
severally and not jointly agrees to make on the Closing Date, a term loan, in
Dollars, to the Borrower in an aggregate amount equal to such Lender's Term Loan
Commitment (each individually, a "Term Loan" and, collectively, the "Term
Loans"). All Term Loans shall be made by the Lenders on the Closing Date
simultaneously and proportionately to their respective Pro Rata Shares, it being
understood that no Lender shall be responsible for any failure by any other
Lender to perform its obligation to make any Term Loan hereunder nor shall the
Term Loan Commitment of any Lender be increased or decreased as a result of any
such failure.
(B) Borrowing Notice. The Borrower shall deliver to the Agent a Borrowing
Notice, signed by it, on the Closing Date. Such Borrowing Notice shall specify
(i) the aggregate amount of the Term Loans and (ii) instructions for the
disbursement of the proceeds of the Term Loans. The Term Loans made on the
Closing Date shall initially be Floating Rate Loans and thereafter may be
continued as Floating Rate Loans or converted into Eurodollar Rate Loans in the
manner provided in Section 2.10 and subject to the other conditions and
limitations therein set forth and set forth in this Article II. Any Borrowing
Notice given pursuant to this Section 2.1(B) shall be irrevocable.
(C) Making of Term Loans. Promptly after receipt of the Borrowing Notice
under Section 2.1(B) in respect of the Term Loans, the Agent shall notify each
Lender by telex or telecopy, or other similar form of transmission, of the
proposed Advance. Each Lender
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shall deposit an amount equal to its Pro Rata Share of the Term Loans with the
Agent at its office in Indianapolis, Indiana, in immediately available funds, on
the Closing Date, as specified in the Borrowing Notice. Subject to the
fulfillment of the conditions precedent set forth in Sections 5.1 and 5.2, the
Agent shall make the proceeds of such amounts received by it available to the
Borrower at the Agent's office in Indianapolis, Indiana on such date and shall
disburse such proceeds in accordance with the Borrower's disbursement
instructions set forth in such Borrowing Notice. The failure of any Lender to
deposit the amount described above with the Agent on such date shall not relieve
any other Lender of its obligations hereunder to make its Term Loan on such
date.
(D) Repayment of the Term Loans. (i) The Term Loans shall be repaid in
twenty (20) consecutive quarterly installments, payable on the last Business Day
of each fiscal quarter of the Borrower, commencing on March 31, 1999 and
continuing thereafter until the Term Loan Termination Date, and the Term Loans
shall be permanently reduced by the amount of each installment on the date
payment thereof is made hereunder. The installments shall be in the aggregate
amounts set forth below:
Installment Date Installment Amount
March 31, 1999 $1,000,000
June 30, 1999 $1,000,000
September 30, 1999 $1,000,000
December 31, 1999 $1,000,000
March 31, 2000 $1,500,000
June 30, 2000 $1,500,000
September 30, 2000 $1,500,000
December 31, 2000 $1,500,000
March 31, 2001 $2,250,000
June 30, 2001 $2,250,000
September 30, 2001 $2,250,000
December 31, 2001 $2,250,000
March 31, 2002 $2,500,000
June 30, 2002 $2,500,000
September 30, 2002 $2,500,000
December 31, 2002 $2,500,000
March 31, 2003 $2,750,000
June 30, 2003 $2,750,000
September 30, 2003 $2,750,000
November 19, 2003 $2,750,000
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Notwithstanding the foregoing, the final installment shall be in the amount of
the then outstanding principal balance of the Term Loans. In addition, the then
outstanding principal balance of the Term Loans, if any, shall be due and
payable on the Termination Date. No installment of any Term Loan shall be
reborrowed once repaid.
(ii) In addition to the scheduled payments on the Term Loans, the Borrower
(a) may make the voluntary prepayments described in Section 2.5(A) for credit
against the scheduled payments on the Term Loans pursuant to Section 2.5(A) and
(b) shall make the mandatory prepayments prescribed in Section 2.5(B) for credit
against the scheduled payments on the Term Loans pursuant to Section 2.5(B).
2.2 Revolving Loans. Upon the satisfaction of the conditions precedent set
forth in Sections 5.1 and 5.2, from and including the date of this Agreement and
prior to the Termination Date, each Lender severally and not jointly agrees, on
the terms and conditions set forth in this Agreement, to make revolving loans to
the Borrower from time to time, in Dollars, in an amount not to exceed such
Lender's Pro Rata Share of Revolving Credit Availability at such time (each
individually, a "Revolving Loan" and, collectively, the "Revolving Loans");
provided, however, at no time shall the Revolving Credit Obligations exceed the
Aggregate Revolving Loan Commitment or the Borrowing Base. Subject to the terms
of this Agreement, the Borrower may borrow, repay and reborrow Revolving Loans
at any time prior to the Termination Date. The Revolving Loans made on the
Closing Date shall initially be Floating Rate Loans and thereafter may be
continued as Floating Rate Loans or converted into Eurodollar Rate Loans in the
manner provided in Section 2.10 and subject to the other conditions and
limitations therein set forth and set forth in this Article II. On the
Termination Date, the Borrower shall repay in full the outstanding principal
balance of the Revolving Loans. Each Advance under this Section 2.2 shall
consist of Revolving Loans made by each Lender ratably in proportion to such
Lender's respective Pro Rata Share.
2.3 Swing Line Loans. (A) Amount of Swing Line Loans. Upon the
satisfaction of the conditions precedent set forth in Section 5.1 and 5.2, from
and including the date of this Agreement and prior to the Termination Date, the
Swing Line Bank agrees, on the terms and conditions set forth in this Agreement,
to make swing line loans to the Borrower from time to time, in Dollars, in an
amount not to exceed the Swing Line Commitment (each, individually, a "Swing
Line Loan" and collectively, the "Swing Line Loans"); provided, however, at no
time shall the Revolving Credit Obligations exceed the Aggregate Revolving Loan
Commitment or the Borrowing Base; and provided, further, that at no time shall
the sum of (a) the outstanding amount of the Swing Line Loans, plus (b) the
outstanding amount of Revolving Loans made by the Swing Line Bank pursuant to
Section 2.2, exceed the Swing Line Bank's Revolving Loan Commitment at such
time. Subject to the terms of this Agreement, the Borrower may borrow, repay and
reborrow Swing Line Loans at any time prior to the Termination Date.
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(B) Borrowing Notice. The Borrower shall deliver to the Agent and the
Swing Line Bank a Borrowing Notice, signed by it, not later than 1:00 p.m.
(Indianapolis time) on the Borrowing Date of each Swing Line Loan, specifying
(i) the applicable Borrowing Date (which shall be a Business Day), and (ii) the
aggregate amount of the requested Swing Line Loan which shall be an amount not
less than $100,000. The Swing Line Loans shall at all times be Floating Rate
Loans.
(C) Making of Swing Line Loans. Promptly after receipt of the Borrowing
Notice under Section 2.3(B) in respect of Swing Line Loans, the Agent shall
notify each Swing Line Bank by telex or telecopy, or other similar form of
transmission, of the requested Swing Line Loan. Not later than 3:00 p.m.
(Indianapolis time) on the applicable Borrowing Date, the Swing Line Bank shall
make available its Swing Line Loan, in funds immediately available in
Indianapolis to the Agent at its address specified pursuant to Article XIV. The
Agent will promptly make the funds so received from the Swing Line Bank
available to the Borrower at the Agent's aforesaid address.
(D) Repayment of Swing Line Loans. The Swing Line Loans shall be evidenced
by the Swing Line Note, and each Swing Line Loan shall be paid in full by the
Borrower on or before the fifth Business Day after the Borrowing Date for such
Swing Line Loan. The Borrower may at any time pay, without penalty or premium,
all outstanding Swing Line Loans or, in a minimum amount and increments of
$100,000, any portion of the outstanding Swing Line Loans, upon notice to the
Agent and the Swing Line Bank. In addition, the Agent (i) may at any time in its
sole discretion with respect to any outstanding Swing Line Loan, or (ii) shall
on the fifth Business Day after the Borrowing Date of any Swing Line Loan,
require each Lender (including the Swing Line Bank) to make a Revolving Loan in
the amount of such Lender's Pro Rata Share of such Swing Line Loan, for the
purpose of repaying such Swing Line Loan. Not later than 2:00 p.m. (Indianapolis
time) on the date of any notice received pursuant to this Section 2.3(D), each
Lender shall make available its required Revolving Loan or Revolving Loans, in
funds immediately available in Indianapolis to the Agent at its address
specified pursuant to Article XIV. Revolving Loans made pursuant to this Section
2.3(D) shall initially be Floating Rate Loans and thereafter may be continued as
Floating Rate Loans or converted into Eurodollar Rate Loans in the manner
provided in Section 2.10 and subject to the other conditions and limitations
therein set forth and set forth in this Article II. Unless a Lender shall have
notified the Swing Line Bank, prior to its making any Swing Line Loan, that any
applicable condition precedent set forth in Sections 5.1 and 5.2 had not then
been satisfied, such Lender's obligation to make Revolving Loans pursuant to
this Section 2.3(D) to repay Swing Line Loans shall be unconditional,
continuing, irrevocable and absolute and shall not be affected by any
circumstances, including, without limitation, (a) any set-off, counterclaim,
recoupment, defense or other right which such Lender may have against the Agent,
the Swing Line Bank or any other Person, (b) the occurrence of continuance of a
Default or Unmatured Default, (c) any adverse change in the condition (financial
or otherwise) of the Borrower, or (d) any other circumstances, happening or
event
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whatsoever. In the event that any Lender fails to make payment to the Agent of
any amount due under this Section 2.3(D), the Agent shall be entitled to
receive, retain and apply against such obligation the principal and interest
otherwise payable to such Lender hereunder until the Agent receives such payment
from such Lender or such obligation is otherwise fully satisfied. In addition to
the foregoing, if for any reason any Lender fails to make payment to the Agent
of any amount due under this Section 2.3(D), such Lender shall be deemed, at the
option of the Agent, to have unconditionally and irrevocably purchased from the
Swing Line Bank, without recourse or warranty, an undivided interest and
participation in the applicable Swing Line Loan in the amount of such Revolving
Loan, and such interest and participation may be recovered from such Lender
together with interest thereon at the Federal Funds Effective Rate for each day
during the period commencing on the date of demand and ending on the date such
amount is received. On the Termination Date, the Borrower shall repay in full
the outstanding principal balance of the Swing Line Loans.
2.4 Rate Options for all Advances. The Swing Line Loans shall be Floating
Rate Advances at all times. The Revolving Loans and Term Loans may be Floating
Rate Advances or Eurodollar Rate Advances, or a combination thereof, selected by
the Borrower in accordance with Section 2.10. The Borrower may select, in
accordance with Section 2.10, Rate Options and Interest Periods applicable to
portions of the Revolving Loans and the Term Loans; provided that there shall be
no more than eight (8) Interest Periods in effect with respect to all of the
Loans at any time. Notwithstanding anything herein to the contrary, the Borrower
may not select the Eurodollar Rate with Interest Periods longer than seven (7)
days for any Loans during the Syndication Period. The Swing Line Loans shall at
all times be Floating Rate Loans.
2.5 Optional Payments; Mandatory Prepayments.
(A) Optional Payments. The Borrower may from time to time repay or prepay,
without penalty or premium all or any part of outstanding Floating Rate
Advances; provided, that the Borrower may not so prepay Floating Rate Advances
consisting of Term Loans unless it shall have provided at least one Business
Day's written notice to the Agent of such prepayment. Eurodollar Rate Advances
may be voluntarily repaid or prepaid prior to the last day of the applicable
Interest Period, subject to the indemnification provisions contained in Section
4.4, provided, that the Borrower may not so prepay Eurodollar Rate Advances
unless it shall have provided at least three Business Days' written notice to
the Agent of such prepayment. Unless the aggregate outstanding principal balance
of the Term Loans is to be prepaid in full, voluntary prepayments of the Term
Loans shall be in an aggregate minimum amount of $1,000,000 and integral
multiples of $1,000,000 in excess of that amount, and shall be applied to each
of the then remaining installments payable thereunder, on a ratable basis based
upon the respective amounts of such installments.
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(B) Mandatory Prepayments.
(i) Mandatory Prepayments of Term Loans.
(a) Upon the consummation of any Asset Sale or any Financing
by the Borrower or any Subsidiary of the Borrower, other than those
Asset Sales permitted pursuant to Section 7.3(B)(i) except to the
extent that the Net Cash Proceeds of such Asset Sale, when combined
with the Net Cash Proceeds of all such Asset Sales during the
immediately preceding twelve-month period, do not exceed $1,000,000,
and except as provided in the second sentence of this Section
2.5(B)(i)(a), within three (3) Business Days after the Borrower's or
any of its Subsidiaries' (i) receipt of any Net Cash Proceeds from any
such Asset Sale or Financing, or (ii) conversion to cash or Cash
Equivalents of non-cash proceeds (whether principal or interest and
including securities, release of escrow arrangements or lease payments)
received from any Asset Sale, the Borrower shall make a mandatory
prepayment of the Obligations in an amount equal to one hundred percent
(100%) of such Net Cash Proceeds or such proceeds converted from
non-cash to cash or Cash Equivalents. Net Cash Proceeds of Asset Sales
of capital assets with respect to which the Borrower shall have given
the Agent written notice of its intention to replace such capital
assets within nine months following such Asset Sale shall not be
subject to the provisions of the first sentence of this Section
2.5(B)(i)(a) unless and to the extent that such applicable period shall
have expired without such replacement having been made.
(b) Simultaneously with the delivery of the annual audited
financial statements required to be delivered pursuant to Section
7.1(A)(iii) for each fiscal year beginning with the fiscal year ending
December 31, 1998, the Borrower shall calculate Excess Cash Flow for
such fiscal year and shall make a mandatory prepayment, payable not
later than the earlier of ten (10) days after such financial statements
and calculation are delivered or one hundred (100) days after the end
of such fiscal year, in an amount equal to one hundred percent (100.0%)
of such Excess Cash Flow in excess of $1,000,000 or, if the Borrower's
Leverage Ratio as of the end of its most recently completed fiscal year
is less than 3.5 to 1.0, seventy-five percent (75.0%) of such Excess
Cash Flow in excess of $1,000,000 or, if the Borrower's Leverage Ratio
as of the end of its most recently completed fiscal year is less than
2.5 to 1.0, fifty percent (50.0%) of such Excess Cash Flow in excess of
$1,000,000.
(c) Nothing in this Section 2.5(B)(i) shall be construed to
constitute the Lenders' consent to any transaction referred to in
clause (a) above which is not expressly permitted by the terms of this
Agreement.
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(d) Each mandatory prepayment required by clauses (a) and (b)
of this Section 2.5(B) shall be referred to herein as a "Designated
Prepayment." Designated Prepayments shall be allocated and applied to
the Obligations as follows:
(I) the amount of each Designated Prepayment (other
than a Designated Prepayment attributable to the issuance of
Subordinated Notes pursuant to the High Yield Note Agreement)
shall be applied to each of the then remaining installments
payable under the Term Loans in the inverse order of maturity;
(II) the amount of each Designated Prepayment
attributable to the issuance of Subordinated Notes pursuant to
the High Yield Note Agreement shall be applied as follows:
first, to repay in full the Subordinated Notes issued to LDI,
Ltd. as of the Closing Date; second, at the Borrower's option,
up to $5,000,000 may be applied to reduce the outstanding
balance of the Revolving Credit Obligations (without reducing
the Aggregate Revolving Loan Commitment); and third, to each
of the then remaining installments payable under the Term
Loans in the inverse order of maturity; and
(III) following the payment in full of the Term
Loans, the amount of each Designated Prepayment shall be
applied to repay Revolving Loans (but shall reduce Revolving
Loan Commitments only at the option of the Required Lenders)
and following the payment in full of the Revolving Loans, the
amount of each Designated Prepayment shall be applied first to
interest on the Reimbursement Obligations, then to principal
on the Reimbursement Obligations, then to fees on account of
Letters of Credit and then, to the extent any L/C Obligations
are contingent, deposited with the Agent as cash collateral in
respect of such L/C Obligations.
(e) On the date any Designated Prepayment is received by the
Agent, such prepayment shall be applied first to Floating Rate Loans
and to any Eurodollar Rate Loans maturing on such date and then to
subsequently maturing Eurodollar Rate Loans in order of maturity.
(ii) Mandatory Prepayments of Revolving Loans. In addition to repayments
under Section 2.5(B)(i)(d)(II), if at any time and for any reason the Revolving
Credit Obligations are greater than the lesser of (i) the Aggregate Revolving
Loan Commitment or (ii) the Borrowing Base, the Borrower shall immediately make
a mandatory prepayment of the Obligations in an amount equal to such excess. In
addition, if Revolving Credit Availability is at any time less than the amount
of contingent L/C Obligations outstanding
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at any time, the Borrower shall deposit cash collateral with the Agent in an
amount equal to the amount by which such L/C Obligations exceed such Revolving
Credit Availability.
(iii) Subject to the preceding provisions of this Section 2.5(B), all of
the mandatory prepayments made under this Section 2.5(B) shall be applied first
to Floating Rate Loans and to any Eurodollar Rate Loans maturing on such date
and then to subsequently maturing Eurodollar Rate Loans in order of maturity.
2.6 Reduction of Commitments. The Borrower may permanently reduce the
Aggregate Revolving Loan Commitment in whole, or in part ratably among the
Lenders, in an aggregate minimum amount of $1,000,000 with respect to each such
Commitment and integral multiples of $100,000 in excess of that amount with
respect to each such Commitment (unless the Aggregate Revolving Loan Commitment
is reduced in whole), upon at least one Business Day's written notice to the
Agent, which notice shall specify the amount of any such reduction; provided,
however, that the amount of the Aggregate Revolving Loan Commitment may not be
reduced below the aggregate principal amount of the outstanding Revolving Credit
Obligations. All accrued commitment fees shall be payable on the effective date
of any termination of the obligations of the Lenders to make Loans hereunder.
2.7 Method of Borrowing. Not later than 2:00 p.m. (Indianapolis time) on
each Borrowing Date, each Lender shall make available its Revolving Loan or Term
Loan, in funds immediately available in Indianapolis to the Agent at its address
specified pursuant to Article XIV. The Agent will promptly make the funds so
received from the Lenders available to the Borrower at the Agent's aforesaid
address.
2.8 Method of Selecting Types and Interest Periods for Advances. The
Borrower shall select the Type of Advance and, in the case of each Eurodollar
Rate Advance, the Interest Period applicable to each Advance from time to time.
The Borrower shall give the Agent irrevocable notice in substantially the form
of Exhibit C hereto (a "Borrowing Notice") not later than 10:00 a.m.
(Indianapolis time) (a) on the Borrowing Date of each Floating Rate Advance and
(b) three Business Days before the Borrowing Date for each Eurodollar Rate
Advance, specifying: (i) the Borrowing Date (which shall be a Business Day) of
such Advance; (ii) the aggregate amount of such Advance; (iii) the Type of
Advance selected; and (iv) in the case of each Eurodollar Rate Advance, the
Interest Period applicable thereto. The Borrower shall select Interest Periods
so that, to the best of the Borrower's knowledge, it will not be necessary to
prepay all or any portion of any Eurodollar Rate Advance prior to the last day
of the applicable Interest Period in order to make mandatory prepayments as
required pursuant to the terms hereof. Each Floating Rate Advance and all
Obligations other than Loans shall bear interest from and including the date of
the making of such Advance to (but not including) the date of repayment thereof
at the Floating Rate, changing when and as such Floating Rate changes. Changes
in the rate of interest on that portion of any Advance maintained as a Floating
Rate Loan
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will take effect simultaneously with each change in the Alternate Base Rate.
Each Eurodollar Rate Advance shall bear interest from and including the first
day of the Interest Period applicable thereto to (but not including) the last
day of such Interest Period at the interest rate determined as applicable to
such Eurodollar Rate Advance.
2.9 Minimum Amount of Each Advance. Each Advance (other than an Advance to
repay Swing Line Loans or a Reimbursement Obligation) shall be in the minimum
amount of $1,000,000 (and in multiples of $100,000 if in excess thereof),
provided, however, that any Floating Rate Advance may be in the amount of the
unused Aggregate Revolving Loan Commitment.
2.10 Method of Selecting Types and Interest Periods for Conversion and
Continuation of Advances.
(A) Right to Convert. The Borrower may elect from time to time, subject to
the provisions of Section 2.4 and this Section 2.10, to convert all or any part
of a Loan of any Type into any other Type or Types of Loans; provided that any
conversion of any Eurodollar Rate Advance shall be made on, and only on, the
last day of the Interest Period applicable thereto.
(B) Automatic Conversion and Continuation. Floating Rate Loans shall
continue as Floating Rate Loans unless and until such Floating Rate Loans are
converted into Eurodollar Rate Loans. Eurodollar Rate Loans shall continue as
Eurodollar Rate Loans until the end of the then applicable Interest Period
therefor, at which time such Eurodollar Rate Loans shall be automatically
converted into Floating Rate Loans unless the Borrower shall have given the
Agent notice in accordance with Section 2.10(D) requesting that, at the end of
such Interest Period, such Eurodollar Rate Loans continue as a Eurodollar Rate
Loan.
(C) No Conversion Post-Default or Post-Unmatured Default. Notwithstanding
anything to the contrary contained in Section 2.10(A) or Section 2.10(B), no
Loan may be converted into or continued as a Eurodollar Rate Loan (except with
the consent of the Required Lenders) when any Default or Unmatured Default has
occurred and is continuing.
(D) Conversion/Continuation Notice. The Borrower shall give the Agent
irrevocable notice (a "Conversion/Continuation Notice") of each conversion of a
Floating Rate Loan into a Eurodollar Rate Loan or continuation of a Eurodollar
Rate Loan not later than 10:00 a.m. (Indianapolis time) three Business Days
prior to the date of the requested conversion or continuation, specifying: (1)
the requested date (which shall be a Business Day) of such conversion or
continuation; (2) the amount and Type of the Loan to be converted or continued;
and (3) the amount of Eurodollar Rate Loan(s) into which such Loan is to be
converted or continued and the duration of the Interest Period applicable
thereto.
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<PAGE>
2.11 Default Rate. After the occurrence and during the continuance of a
Default, at the option of the Agent or at the direction of the Required Lenders,
the interest rate(s) applicable to the Obligations and the fees payable under
Section 3.8 with respect to Letters of Credit shall be increased by two percent
(2.0%) per annum above the Floating Rate or Eurodollar Rate, as applicable.
2.12 Method of Payment. All payments of principal, interest, and fees
hereunder shall be made, without setoff, deduction or counterclaim, in
immediately available funds to the Agent at the Agent's address specified
pursuant to Article XIV, or at any other Lending Installation of the Agent
specified in writing by the Agent to the Borrower, by 2:00 p.m. (Indianapolis
time) on the date when due and shall be made ratably among the Lenders (unless
such amount is not to be shared ratably in accordance with the terms hereof).
Each payment delivered to the Agent for the account of any Lender shall be
delivered promptly by the Agent to such Lender in the same type of funds which
the Agent received at its address specified pursuant to Article XIV or at any
Lending Installation specified in a notice received by the Agent from such
Lender. The Borrower authorizes the Agent to charge the account of the Borrower
maintained with NBD Bank, N.A. for each payment of principal, interest and fees
as it becomes due hereunder. NBD Bank, N.A. will notify the Borrower of any such
charges.
2.13 Notes. Each Lender is authorized to record the principal amount of
each of its Loans and each repayment with respect to its Loans on the schedule
attached to its respective Notes; provided, however, that the failure to so
record shall not affect the Borrower's obligations under any such Note.
2.14 Telephonic Notices. The Borrower authorizes the Lenders and the Agent
to extend Advances, effect selections of Types of Advances and to transfer funds
based on telephonic notices made by any person or persons the Agent or any
Lender in good faith believes to be acting on behalf of the Borrower. The
Borrower agrees to deliver promptly to the Agent a written confirmation, signed
by an Authorized Officer, if such confirmation is requested by the Agent or any
Lender, of each telephonic notice. If the written confirmation differs in any
material respect from the action taken by the Agent and the Lenders, (i) the
telephonic notice shall govern absent manifest error and (ii) the Agent or the
Lender, as applicable, shall promptly notify the Authorized Officer who provided
such confirmation of such difference.
2.15 Promise to Pay; Interest and Commitment Fees; Interest Payment Dates;
Interest and Fee Basis; Taxes; Loan and Control Accounts.
(A) Promise to Pay. The Borrower unconditionally promises to pay when due
the principal amount of each Loan and all other Obligations incurred by it, and
to pay all unpaid interest accrued thereon, in accordance with the terms of this
Agreement and the Notes.
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(B) Interest Payment Dates. Interest accrued on each Floating Rate Loan
shall be payable on each Payment Date, commencing with the first such date to
occur after the date hereof, and at maturity (whether by acceleration or
otherwise). Interest accrued on each Eurodollar Rate Loan shall be payable on
the last day of its applicable Interest Period, on any date on which the
Eurodollar Rate Loan is prepaid, whether by acceleration or otherwise, and at
maturity. Interest accrued on each Eurodollar Rate Loan having an Interest
Period longer than three months shall also be payable on the last day of each
three-month interval during such Interest Period. Interest accrued on the
principal balance of all other Obligations shall be payable in arrears (i) on
the last day of each calendar month, commencing on the first such day following
the incurrence of such Obligation, (ii) upon repayment thereof in full or in
part, and (iii) if not theretofore paid in full, at the time such other
Obligation becomes due and payable (whether by acceleration or otherwise).
(C) Commitment Fees. (i) The Borrower shall pay to the Agent, for the
account of the Lenders as provided hereinbelow, from and after the Closing Date
until the date on which the Aggregate Revolving Loan Commitment shall be
terminated in whole, a commitment fee accruing at the rate of the then
Applicable Commitment Fee Percentage, on the amount by which (A) the Aggregate
Revolving Loan Commitment exceeds (B) the Revolving Credit Obligations from time
to time. All such commitment fees payable under this clause (C) shall be payable
quarterly in arrears on the last day of each fiscal quarter of the Borrower
occurring after the Closing Date (with the first such payment being calculated
for the period from the Closing Date and ending on December 31, 1997), and, in
addition, on the date on which the Aggregate Revolving Loan Commitment shall be
terminated in whole. The Agent shall pay to each Lender a portion of such
commitment fee based on the amount by which such Lender's Revolving Loan
Commitment exceeds the Revolving Credit Obligations (excluding, in the case of
all Lenders other than the Swing Line Bank, the outstanding Swing Line Loans).
(ii) The Borrower agrees to pay to the Agent for the sole account of the
Agent and the Arranger (unless otherwise agreed between the Agent and the
Arranger and any Lender) the fees set forth in the letter agreement among the
Agent, the Arranger and the Borrower dated October 8, 1997, payable at the times
and in the amounts set forth therein.
(D) Interest and Fee Basis; Applicable Floating Rate Margin, Applicable
Eurodollar Margin and Applicable Commitment Fee Percentage.
(i) Interest and fees shall be calculated for actual days elapsed on the
basis of a 360-day year. Interest shall be payable for the day an Obligation is
incurred but not for the day of any payment on the amount paid if payment is
received prior to 2:00 p.m. (Indianapolis time) at the place of payment. If any
payment of principal of or interest on a Loan or any payment of any other
Obligations shall become due on a day which is not a Business Day, such payment
shall be made on the next succeeding Business Day and, in
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the case of a principal payment, such extension of time shall be included in
computing interest in connection with such payment.
(ii) The Applicable Floating Rate Margin, Applicable Eurodollar and
Applicable Commitment Fee Percentage shall be determined from time to time by
reference to the table set forth below, on the basis of the then applicable
Leverage Ratio as described in this Section 2.15(D)(ii):
<TABLE>
<CAPTION>
Applicable Applicable Applicable
Eurodollar Floating Rate Commitment
Leverage Ratio Margin Margin Fee Percentage
<S> <C> <C> <C>
Greater than or
equal to 4.5 to 1.0 2.25% 1.00% 0.50%
Greater than or
equal to 4.0 to 1.0
and less than
4.5 to 1.0 2.00% 0.75% 0.375%
Greater than or
equal to 3.5 to 1.0
and less than
4.0 to 1.0 1.75% 0.50% 0.375%
Greater than or
equal to 3.0 to 1.0
and less than
3.5 to 1.0 1.50% 0.25% 0.25%
Greater than or
equal to 2.5 to 1.0
and less than
3.0 to 1.0 1.25% 0.00% 0.25%
Greater than or
equal to 2.0 to 1.0
and less than
2.5 to 1.0 1.00% 0.00% 0.25%
Less than 2.0 to 1.0 0.75% 0.00% 0.20%
</TABLE>
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For purposes of this Section 2.15(D)(ii), the Leverage Ratio shall be determined
as of the last day of each fiscal quarter based upon (a) for Indebtedness for
borrowed money, Indebtedness for borrowed money as of the last day of each such
fiscal quarter; and (b) for EBITDA, the actual amount for the four-quarter
period ending on such day, calculated, with respect to Permitted Acquisitions,
on a pro forma basis using the best available financial information concerning
the seller, broken down by fiscal quarter in the Borrower's reasonable judgment.
Upon receipt of the financial statements delivered pursuant to Sections
7.1(A)(i) and (ii), as applicable, the Applicable Floating Rate Margin,
Applicable Eurodollar Margin and Applicable Commitment Fee Percentage shall be
adjusted, such adjustment being effective on the first Business Day of the
fiscal quarter following the Agent's receipt of such financial statements and
the compliance certificate required to be delivered in connection therewith
pursuant to Section 7.1(A)(iii); provided, that if the Borrower shall not have
timely delivered its financial statements in accordance with Section 7.1(A)(i)
or (ii), as applicable, then commencing on the date upon which such financial
statements should have been delivered and continuing until such financial
statements are actually delivered, it shall be assumed for purposes of
determining the Applicable Floating Rate Margin, Applicable Eurodollar Margin
and Applicable Commitment Fee Percentage that the Leverage Ratio was greater
than or equal to 4.5 to 1.0. Notwithstanding anything herein to the contrary,
from the Closing Date to but not including the first Business Day of the fiscal
quarter following receipt of the Borrower's financial statements in accordance
with Section 7.1(A)(i) for the first fiscal quarter ending not less than six
months after the Merger, the Applicable Eurodollar Margin and Applicable
Commitment Fee Percentage shall be determined based upon an assumption that the
Leverage Ratio is greater than or equal to 4.5 to 1.0.
(E) Taxes.
(i) Any and all payments by the Borrower hereunder shall be
made free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings or
any liabilities with respect thereto including those arising after the
date hereof as a result of the adoption of or any change in any law,
treaty, rule, regulation, guideline or determination of a Governmental
Authority or any change in the interpretation or application thereof by
a Governmental Authority but excluding, in the case of each Lender and
the Agent, such taxes (including income taxes, franchise taxes and
branch profit taxes) as are imposed on or measured by such Lender's or
Agent's, as the case may be, income by the United States of America or
any Governmental Authority of the jurisdiction under the laws of which
such Lender or Agent, as the case may be, is organized or maintains a
Lending Installation (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings, and liabilities which the Agent or a
Lender determines to be applicable to this Agreement, the other Loan
Documents, the Term Loan Commitments, the Revolving Loan Commitments,
the Loans or the Letters of Credit being hereinafter referred to as
"Taxes"). If the Borrower shall
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be required by law to deduct any Taxes from or in respect of any sum
payable hereunder or under the other Loan Documents to any Lender or
the Agent, (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.15(E)) such
Lender or the Agent (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (ii)
the Borrower shall make such deductions, and (iii) the Borrower shall
pay the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law. If a withholding tax
of the United States of America or any other Governmental Authority
shall be or become applicable (y) after the date of this Agreement, to
such payments by the Borrower made to the Lending Installation or any
other office that a Lender may claim as its Lending Installation, or
(z) after such Lender's selection and designation of any other Lending
Installation, to such payments made to such other Lending Installation,
such Lender shall use reasonable efforts to make, fund and maintain its
Loans through another Lending Installation of such Lender in another
jurisdiction so as to reduce the Borrower's liability hereunder, if the
making, funding or maintenance of such Loans through such other Lending
Installation of such Lender does not, in the judgment of such Lender,
otherwise adversely affect such Loans, or obligations under the
Revolving Loan Commitments or such Lender.
(ii) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property
taxes, charges, or similar levies which arise from any payment made
hereunder, from the issuance of Letters of Credit hereunder, or from
the execution, delivery or registration of, or otherwise with respect
to, this Agreement, the other Loan Documents, the Revolving Loan
Commitments, the Term Loan Commitments, the Loans or the Letters of
Credit (hereinafter referred to as "Other Taxes").
(iii) The Borrower indemnifies each Lender and the Agent for
the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any Governmental
Authority on amounts payable under this Section 2.15(E)) paid by such
Lender or the Agent (as the case may be) and any liability (including
penalties, interest, and expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. This indemnification shall be made within thirty (30)
days after the date such Lender or the Agent (as the case may be) makes
written demand therefor. A certificate as to any additional amount
payable to any Lender or the Agent under this Section 2.15(E) submitted
to the Borrower and the Agent (if a Lender is so submitting) by such
Lender or the Agent shall show in reasonable detail the amount payable
and the calculations used to determine such amount and shall, absent
manifest error, be final, conclusive and binding upon all parties
hereto. With respect to such deduction or withholding for or on account
of any Taxes and to
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confirm that all such Taxes have been paid to the appropriate
Governmental Authorities, the Borrower shall promptly (and in any event
not later than thirty (30) days after receipt) furnish to each Lender
and the Agent such certificates, receipts and other documents as may be
required (in the judgment of such Lender or the Agent) to establish any
tax credit to which such Lender or the Agent may be entitled.
(iv) Within thirty (30) days after the date of any payment of
Taxes or Other Taxes by the Borrower, the Borrower shall furnish to the
Agent the original or a certified copy of a receipt evidencing payment
thereof.
(v) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 2.15(E) shall survive the payment in
full of principal and interest hereunder, the termination of the
Letters of Credit and the termination of this Agreement.
(vi) Without limiting the obligations of the Borrower under
this Section 2.15(E), each Lender that is not created or organized
under the laws of the United States of America or a political
subdivision thereof shall deliver to the Borrower and the Agent on or
before the Closing Date, or, if later, the date on which such Lender
becomes a Lender pursuant to Section 13.3, a true and accurate
certificate executed in duplicate by a duly authorized officer of such
Lender, in a form satisfactory to the Borrower and the Agent, to the
effect that such Lender is capable under the provisions of an
applicable tax treaty concluded by the United States of America (in
which case the certificate shall be accompanied by two executed copies
of Form 1001 of the IRS) or under Section 1442 of the Code (in which
case the certificate shall be accompanied by two copies of Form 4224 of
the IRS) of receiving payments of interest hereunder without deduction
or withholding of United States federal income tax. Each such Lender
further agrees to deliver to the Borrower and the Agent from time to
time a true and accurate certificate executed in duplicate by a duly
authorized officer of such Lender substantially in a form satisfactory
to the Borrower and the Agent, before or promptly upon the occurrence
of any event requiring a change in the most recent certificate
previously delivered by it to the Borrower and the Agent pursuant to
this Section 2.15(E)(vi). Further, each Lender which delivers a
certificate accompanied by Form 1001 of the IRS covenants and agrees to
deliver to the Borrower and the Agent within fifteen (15) days prior to
January 1, 1998, and every third (3rd) anniversary of such date
thereafter on which this Agreement is still in effect, another such
certificate and two accurate and complete original signed copies of
Form 1001 (or any successor form or forms required under the Code or
the applicable regulations promulgated thereunder), and each Lender
that delivers a certificate accompanied by Form 4224 of the IRS
covenants and agrees to deliver to the Borrower and the
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Agent within fifteen (15) days prior to the beginning of each
subsequent taxable year of such Lender during which this Agreement is
still in effect, another such certificate and two accurate and complete
original signed copies of IRS Form 4224 (or any successor form or forms
required under the Code or the applicable regulations promulgated
thereunder). Each such certificate shall certify as to one of the
following:
(a) that such Lender is capable of receiving payments
of interest hereunder without deduction or withholding of
United States of America federal income tax;
(b) that such Lender is not capable of receiving
payments of interest hereunder without deduction or
withholding of United States of America federal income tax as
specified therein but is capable of recovering the full amount
of any such deduction or withholding from a source other than
the Borrower and will not seek any such recovery from the
Borrower; or
(c) that, as a result of the adoption of or any
change in any law, treaty, rule, regulation, guideline or
determination of a Governmental Authority or any change in the
interpretation or application thereof by a Governmental
Authority after the date such Lender became a party hereto,
such Lender is not capable of receiving payments of interest
hereunder without deduction or withholding of United States of
America federal income tax as specified therein and that it is
not capable of recovering the full amount of the same from a
source other than the Borrower.
Each Lender shall promptly furnish to the Borrower and the Agent such
additional documents as may be reasonably required by the Borrower or
the Agent to establish any exemption from or reduction of any Taxes or
Other Taxes required to be deducted or withheld and which may be
obtained without undue expense to such Lender.
(F) Loan Account. Each Lender shall maintain in accordance with its usual
practice an account or accounts (a "Loan Account") evidencing the Obligations of
the Borrower to such Lender owing to such Lender from time to time, including
the amount of principal and interest payable and paid to such Lender from time
to time hereunder and under the Notes.
(G) Entries Binding. The entries made in the Register and each Loan
Account shall be conclusive and binding for all purposes, absent manifest error,
unless the Borrower objects to information contained in the Register and each
Loan Account within thirty (30) days of the Borrower's receipt of such
information.
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2.16 Notification of Advances, Interest Rates, Prepayments and Aggregate
Revolving Loan Commitment Reductions. Promptly after receipt thereof, the Agent
will notify each Lender of the contents of each Aggregate Revolving Loan
Commitment reduction notice, Borrowing Notice, Continuation/Conversion Notice,
and repayment notice received by it hereunder. The Agent will notify each Lender
of the interest rate applicable to each Eurodollar Rate Loan promptly upon
determination of such interest rate and will give each Lender prompt notice of
each change in the Alternate Base Rate.
2.17 Lending Installations. Each Lender may book its Loans at any Lending
Installation selected by such Lender and may change its Lending Installation
from time to time. All terms of this Agreement shall apply to any such Lending
Installation and the Notes shall be deemed held by each Lender for the benefit
of such Lending Installation. Each Lender may, by written or facsimile notice to
the Agent and the Borrower, designate a Lending Installation through which Loans
will be made by it and for whose account Loan payments are to be made.
2.18 Non-Receipt of Funds by the Agent. Unless the Borrower or a Lender,
as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (i) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day or (ii) in the case of payment by the
Borrower, the interest rate applicable to the relevant Loan.
2.19 Termination Date. This Agreement shall be effective until the
Termination Date. Notwithstanding the termination of this Agreement on the
Termination Date, until all of the Obligations (other than contingent indemnity
obligations) shall have been fully and indefeasibly paid and satisfied, all
financing arrangements among the Borrower and the Lenders shall have been
terminated (other than under Interest Rate Agreements or other agreements with
respect to Hedging Obligations) and all of the Letters of Credit shall have
expired, been canceled or terminated, all of the rights and remedies under this
Agreement and the other Loan Documents shall survive.
2.20 Replacement of Certain Lenders. In the event a Lender ("Affected
Lender") shall have: (i) failed to fund its Pro Rata Share of any Advance
requested by the Borrower, or to fund a Revolving Loan in order to repay Swing
Line Loans pursuant to
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Section 2.3(D), which such Lender is obligated to fund under the terms of this
Agreement and which failure has not been cured, (ii) requested compensation from
the Borrower under Sections 2.15(E), 4.1 or 4.2 to recover Taxes, Other Taxes or
other additional costs incurred by such Lender which are not being incurred
generally by the other Lenders, (iii) delivered a notice pursuant to Section 4.3
claiming that such Lender is unable to extend Eurodollar Rate Loans to the
Borrower for reasons not generally applicable to the other Lenders or (iv) has
invoked Section 10.2, then, in any such case, the Borrower or the Agent may make
written demand on such Affected Lender (with a copy to the Agent in the case of
a demand by the Borrower and a copy to the Borrower in the case of a demand by
the Agent) for the Affected Lender to assign, and such Affected Lender shall use
its best efforts to assign pursuant to one or more duly executed Assignment
Agreements five (5) Business Days after the date of such demand, to one or more
financial institutions that comply with the provisions of Section 13.3(A) which
the Borrower or the Agent, as the case may be, shall have engaged for such
purpose ("Replacement Lender"), all of such Affected Lender's rights and
obligations under this Agreement and the other Loan Documents (including,
without limitation, its Revolving Loan Commitment, all Loans owing to it, all of
its participation interests in existing Letters of Credit, and its obligation to
participate in additional Letters of Credit hereunder) in accordance with
Section 13.3. The Agent agrees, upon the occurrence of such events with respect
to an Affected Lender and upon the written request of the Borrower, to use its
reasonable efforts to obtain the commitments from one or more financial
institutions to act as a Replacement Lender. The Agent is authorized to execute
one or more of such assignment agreements as attorney-in-fact for any Affected
Lender failing to execute and deliver the same within five (5) Business Days
after the date of such demand. Further, with respect to such assignment the
Affected Lender shall have concurrently received, in cash, all amounts due and
owing to the Affected Lender hereunder or under any other Loan Document,
including, without limitation, the aggregate outstanding principal amount of the
Loans owed to such Lender, together with accrued interest thereon through the
date of such assignment, amounts payable under Sections 2.15(E), 4.1, and 4.2
with respect to such Affected Lender and compensation payable under Section
2.15(C) in the event of any replacement of any Affected Lender under clause (ii)
or clause (iii) of this Section 2.20; provided that upon such Affected Lender's
replacement, such Affected Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of Sections 2.15(E), 4.1, 4.2, 4.4, and
10.7, as well as to any fees accrued for its account hereunder and not yet paid,
and shall continue to be obligated under Section 11.8. Upon the replacement of
any Affected Lender pursuant to this Section 2.20, the provisions of Section 9.2
shall continue to apply with respect to Borrowings which are then outstanding
with respect to which the Affected Lender failed to fund its Pro Rata Share and
which failure has not been cured.
ARTICLE III: THE LETTER OF CREDIT FACILITY
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3.1 Obligation to Issue. Subject to the terms and conditions of this
Agreement and in reliance upon the representations, warranties and covenants of
the Borrower herein set forth, each Issuing Bank hereby agrees to issue for the
account of the Borrower through such Issuing Bank's branches as it and the
Borrower may jointly agree, one or more Letters of Credit denominated in Dollars
in accordance with this Article III, from time to time during the period,
commencing on the date hereof and ending on the Business Day prior to the
Termination Date.
3.2 Transitional Provision. Schedule 3.2 contains a schedule of certain
letters of credit issued for the account of the Borrower prior to the Closing
Date. Subject to the satisfaction of the conditions contained in Sections 5.1
and 5.2, from and after the Closing Date such letters of credit shall be deemed
to be Letters of Credit issued pursuant to this Article III.
3.3 Types and Amounts. No Issuing Bank shall have any obligation to and no
Issuing Bank shall:
(i) issue any Letter of Credit if on the date of issuance,
before or after giving effect to the Letter of Credit requested
hereunder, (a) the Revolving Credit Obligations at such time would
exceed the Aggregate Revolving Loan Commitment or the Borrowing Base at
such time, or (b) the aggregate outstanding amount of the L/C
Obligations would exceed $10,000,000; or
(ii) issue any Letter of Credit which has an expiration date
later than the date which is the earlier of one (1) year after the date
of issuance thereof or five (5) Business Days immediately preceding the
Termination Date.
3.4 Conditions. In addition to being subject to the satisfaction of the
conditions contained in Sections 5.1 and 5.2, the obligation of an Issuing Bank
to issue any Letter of Credit is subject to the satisfaction in full of the
following conditions:
(i) the Borrower shall have delivered to the applicable
Issuing Bank at such times and in such manner as such Issuing Bank may
reasonably prescribe, a request for issuance of such Letter of Credit
in substantially the form of Exhibit D hereto, duly executed
applications for such Letter of Credit, and such other documents,
instructions and agreements as may be required pursuant to the terms
thereof, and the proposed Letter of Credit shall be reasonably
satisfactory to such Issuing Bank as to form and content; and
(ii) as of the date of issuance no order, judgment or decree
of any court, arbitrator or Governmental Authority shall purport by its
terms to enjoin or restrain the applicable Issuing Bank from issuing
such Letter of Credit and no law, rule or regulation applicable to such
Issuing Bank and no request or directive (whether or not having the
force of law) from a Governmental Authority with jurisdiction over such
Issuing Bank shall prohibit or
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request that such Issuing Bank refrain from the issuance of Letters of
Credit generally or the issuance of that Letter of Credit.
3.5 Procedure for Issuance of Letters of Credit. (a) Subject to the terms
and conditions of this Article III and provided that the applicable conditions
set forth in Sections 5.1 and 5.2 hereof have been satisfied, the applicable
Issuing Bank shall, on the requested date, issue a Letter of Credit on behalf of
the Borrower in accordance with such Issuing Bank's usual and customary business
practices and, in this connection, such Issuing Bank may assume that the
applicable conditions set forth in Section 5.2 hereof have been satisfied unless
it shall have received notice to the contrary from the Agent or a Lender or has
knowledge that the applicable conditions have not been met.
(b) The applicable Issuing Bank shall give the Agent written or telex
notice, or telephonic notice confirmed promptly thereafter in writing, of the
issuance of a Letter of Credit, provided, however, that the failure to provide
such notice shall not result in any liability on the part of such Issuing Bank.
(c) No Issuing Bank shall extend or amend any Letter of Credit unless the
requirements of this Section 3.5 are met as though a new Letter of Credit was
being requested and issued.
3.6 Letter of Credit Participation. Immediately upon the issuance of each
Letter of Credit hereunder, each Lender shall be deemed to have automatically,
irrevocably and unconditionally purchased and received from the applicable
Issuing Bank an undivided interest and participation in and to such Letter of
Credit, the obligations of the Borrower in respect thereof, and the liability of
such Issuing Bank thereunder (collectively, an "L/C Interest" in an amount equal
to the amount available for drawing under such Letter of Credit multiplied by
such Lender's Pro Rata Share. Each Issuing Bank will notify each Lender promptly
upon presentation to it of an L/C Draft or upon any other draw under a Letter of
Credit. On or before the Business Day on which an Issuing Bank makes payment of
each such L/C Draft or, in the case of any other draw on a Letter of Credit, on
demand by the Agent, each Lender shall make payment to the Agent, for the
account of the applicable Issuing Bank, in immediately available funds in an
amount equal to such Lender's Pro Rata Share of the amount of such payment or
draw. The obligation of each Lender to reimburse the Issuing Banks under this
Section 3.6 shall be unconditional, continuing, irrevocable and absolute. In the
event that any Lender fails to make payment to the Agent of any amount due under
this Section 3.6, the Agent shall be entitled to receive, retain and apply
against such obligation the principal and interest otherwise payable to such
Lender hereunder until the Agent receives such payment from such Lender or such
obligation is otherwise fully satisfied; provided, however, that nothing
contained in this sentence shall relieve such Lender of its obligation to
reimburse the applicable Issuing Bank for such amount in accordance with this
Section 3.6.
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3.7 Reimbursement Obligation. The Borrower agrees unconditionally,
irrevocably and absolutely to pay immediately to the Agent, for the account of
the Lenders, the amount of each advance which may be drawn under or pursuant to
a Letter of Credit or an L/C Draft related thereto (such obligation of the
Borrower to reimburse the Agent for an advance made under a Letter of Credit or
L/C Draft being hereinafter referred to as a "Reimbursement Obligation" with
respect to such Letter of Credit or L/C Draft). If the Borrower at any time
fails to repay a Reimbursement Obligation pursuant to this Section 3.7, the
Borrower shall be deemed to have elected to borrow Revolving Loans from the
Lenders, as of the date of the advance giving rise to the Reimbursement
Obligation, equal in amount to the amount of the unpaid Reimbursement
Obligation. Such Revolving Loans shall be made as of the date of the payment
giving rise to such Reimbursement Obligation, automatically, without notice and
without any requirement to satisfy the conditions precedent otherwise applicable
to an Advance of Revolving Loans. Such Revolving Loans shall constitute a
Floating Rate Advance, the proceeds of which Advance shall be used to repay such
Reimbursement Obligation. If, for any reason, the Borrower fails to repay a
Reimbursement Obligation on the day such Reimbursement Obligation arises and,
for any reason, the Lenders are unable to make or have no obligation to make
Revolving Loans, then such Reimbursement Obligation shall bear interest from and
after such day, until paid in full, at the interest rate applicable to a
Floating Rate Advance.
3.8 Letter of Credit Fees. The Borrower agrees to pay (i) quarterly, in
arrears, to the Agent for the ratable benefit of the Lenders, except as set
forth in Section 9.2, a letter of credit fee at a rate per annum equal to the
Applicable L/C Fee Percentage on the average daily outstanding face amount
available for drawing under all Letters of Credit, (ii) quarterly, in arrears,
to the Agent for the sole account of each Issuing Bank, a letter of credit
fronting fee of one-quarter of one percent (0.25%) per annum on the average
daily outstanding face amount available for drawing under all Letters of Credit
issued by such Issuing Bank, and (iii) to the Agent for the benefit of each
Issuing Bank, all customary fees and other issuance, amendment, document
examination, negotiation and presentment expenses and related charges in
connection with the issuance, amendment, presentation of L/C Drafts, and the
like customarily charged by such Issuing Banks with respect to standby and
commercial Letters of Credit, including, without limitation, standard
commissions with respect to commercial Letters of Credit, payable at the time of
invoice of such amounts.
3.9 Issuing Bank Reporting Requirements. In addition to the notices
required by Section 3.5(C), each Issuing Bank shall, no later than the tenth
Business Day following the last day of each month, provide to the Agent, upon
the Agent's request, schedules, in form and substance reasonably satisfactory to
the Agent, showing the date of issue, account party, amount, expiration date and
the reference number of each Letter of Credit issued by it outstanding at any
time during such month and the aggregate amount payable by the Borrower during
such month. In addition, upon the request of the Agent, each Issuing Bank shall
furnish to the Agent copies of any Letter of Credit and any application for or
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reimbursement agreement with respect to a Letter of Credit to which the Issuing
Bank is party and such other documentation as may reasonably be requested by the
Agent. Upon the request of any Lender, the Agent will provide to such Lender
information concerning such Letters of Credit.
3.10 Indemnification; Exoneration. (A) In addition to amounts payable as
elsewhere provided in this Article III, the Borrower hereby agrees to protect,
indemnify, pay and save harmless the Agent, each Issuing Bank and each Lender
from and against any and all liabilities and costs which the Agent, such Issuing
Bank or such Lender may incur or be subject to as a consequence, direct or
indirect, of (i) the issuance of any Letter of Credit other than, in the case of
the applicable Issuing Bank, as a result of its Gross Negligence or willful
misconduct, as determined by the final judgment of a court of competent
jurisdiction, or (ii) the failure of the applicable Issuing Bank to honor a
drawing under a Letter of Credit as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto Governmental
Authority (all such acts or omissions herein called "Governmental Acts").
(B) As among the Borrower, the Lenders, the Agent and the Issuing Banks,
the Borrower assumes all risks of the acts and omissions of, or misuse of such
Letter of Credit by, the beneficiary of any Letters of Credit. In furtherance
and not in limitation of the foregoing, subject to the provisions of the Letter
of Credit applications and Letter of Credit reimbursement agreements executed by
the Borrower at the time of request for any Letter of Credit, neither the Agent,
any Issuing Bank nor any Lender shall be responsible (in the absence of Gross
Negligence or willful misconduct in connection therewith, as determined by the
final judgment of a court of competent jurisdiction): (i) for the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
the Letters of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) for failure of the beneficiary of a
Letter of Credit to comply duly with conditions required in order to draw upon
such Letter of Credit; (iv) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex, or
other similar form of teletransmission or otherwise; (v) for errors in
interpretation of technical trade terms; (vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any Letter of Credit or of the proceeds thereof; (vii) for the
misapplication by the beneficiary of a Letter of Credit of the proceeds of any
drawing under such Letter of Credit; and (viii) for any consequences arising
from causes beyond the control of the Agent, the Issuing Banks and the Lenders,
including, without limitation, any Governmental Acts. None of the above shall
affect, impair, or prevent the vesting of any Issuing Bank's rights or powers
under this Section 3.10.
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(C) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by any Issuing
Bank under or in connection with the Letters of Credit or any related
certificates shall not, in the absence of Gross Negligence or willful
misconduct, as determined by the final judgment of a court of competent
jurisdiction, put the applicable Issuing Bank, the Agent or any Lender under any
resulting liability to the Borrower or relieve the Borrower of any of its
obligations hereunder to any such Person.
(D) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 3.10 shall survive the payment in full of principal and interest
hereunder, the termination of the Letters of Credit and the termination of this
Agreement.
3.11 Cash Collateral. Notwithstanding anything to the contrary herein or
in any application for a Letter of Credit, after the occurrence and during the
continuance of Default, the Borrower shall, upon the Agent's demand, deliver to
the Agent for the benefit of the Lenders and the Issuing Banks, cash, or other
collateral of a type satisfactory to the Required Lenders, having a value, as
determined by such Lenders, equal to the aggregate outstanding L/C Obligations.
In addition, if the Revolving Credit Availability is at any time less than the
amount of contingent L/C Obligations outstanding at any time, the Borrower shall
deposit cash collateral with the Agent in an amount equal to the amount by which
such L/C Obligations exceed such Revolving Credit Availability. Any such
collateral shall be held by the Agent in a separate account appropriately
designated as a cash collateral account in relation to this Agreement and the
Letters of Credit and retained by the Agent for the benefit of the Lenders and
the Issuing Banks as collateral security for the Borrower's obligations in
respect of this Agreement and each of the Letters of Credit and L/C Drafts. Such
amounts shall be applied to reimburse the Issuing Banks for drawings or payments
under or pursuant to Letters of Credit or L/C Drafts, or if no such
reimbursement is required, to payment of such of the other Obligations as the
Agent shall determine. If no Default shall be continuing, amounts remaining in
any cash collateral account established pursuant to this Section 3.11 which are
not to be applied to reimburse an Issuing Bank for amounts actually paid or to
be paid by such Issuing Bank in respect of a Letter of Credit or L/C Draft,
shall be returned to the Borrower (after deduction of the Agent's expenses
incurred in connection with such cash collateral account).
ARTICLE IV: CHANGE IN CIRCUMSTANCES
4.1 Yield Protection. If any law or any governmental or quasi-governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law) adopted after the date of this Agreement and having general
applicability to all banks within the jurisdiction in which such Lender operates
(excluding, for the avoidance of doubt, the effect of and phasing in of capital
requirements or other regulations or guidelines passed prior to the date of this
Agreement), or any interpretation or application thereof by any
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Governmental Authority charged with the interpretation or application thereof,
or the compliance of any Lender therewith,
(i) subjects any Lender or any applicable Lending Installation
to any tax, duty, charge or withholding on or from payments due from
the Borrower (excluding federal taxation of the overall net income of
any Lender or applicable Lending Installation), or changes the basis of
taxation of payments to any Lender in respect of its Loans, its L/C
Interests, the Letters of Credit or other amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any Lender or any applicable Lending Installation (other
than reserves and assessments taken into account in determining the
interest rate applicable to Eurodollar Rate Loans) with respect to its
Loans, L/C Interests or the Letters of Credit, or
(iii) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable Lending Installation
of making, funding or maintaining the Loans, the L/C Interests or the
Letters of Credit or reduces any amount received by any Lender or any
applicable Lending Installation in connection with Loans or Letters of
Credit, or requires any Lender or any applicable Lending Installation
to make any payment calculated by reference to the amount of Loans or
L/C Interests held or interest received by it or by reference to the
Letters of Credit, by an amount deemed material by such Lender;
and the result of any of the foregoing is to increase the cost to that Lender of
making, renewing or maintaining its Loans, L/C Interests or Letters of Credit or
to reduce any amount received under this Agreement, then, within 15 days after
receipt by the Borrower of written demand by such Lender pursuant to Section
4.5, the Borrower shall pay such Lender that portion of such increased expense
incurred or reduction in an amount received which such Lender determines is
attributable to making, funding and maintaining its Loans, L/C Interests,
Letters of Credit and its Revolving Loan Commitment.
4.2 Changes in Capital Adequacy Regulations. If a Lender determines (i)
the amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a "Change" (as defined below), and (ii) such
increase in capital will result in an increase in the cost to such Lender of
maintaining its Loans, L/C Interests, the Letters of Credit or its obligation to
make Loans hereunder, then, within 15 days after receipt by the Borrower of
written demand by such Lender pursuant to Section 4.5, the Borrower shall pay
such Lender the amount necessary to compensate for any shortfall in the rate of
return on the portion of such increased capital which such Lender determines is
attributable to this
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Agreement, its Loans, its L/C Interests, the Letters of Credit or its obligation
to make Loans hereunder (after taking into account such Lender's policies as to
capital adequacy). "Change" means (i) any change after the date of this
Agreement in the "Risk-Based Capital Guidelines" (as defined below) excluding,
for the avoidance of doubt, the effect of any phasing in of such Risk-Based
Capital Guidelines or any other capital requirements passed prior to the date
hereof, or (ii) any adoption of or change in any other law, governmental or
quasi-governmental rule, regulation, policy, guideline, interpretation, or
directive (whether or not having the force of law) after the date of this
Agreement and having general applicability to all banks and financial
institutions within the jurisdiction in which such Lender operates which affects
the amount of capital required or expected to be maintained by any Lender or any
Lending Installation or any corporation controlling any Lender. "Risk-Based
Capital Guidelines" means (i) the risk-based capital guidelines in effect in the
United States on the date of this Agreement, including transition rules, and
(ii) the corresponding capital regulations promulgated by regulatory authorities
outside the United States implementing the July 1988 report of the Basle
Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
4.3 Availability of Types of Advances. If (i) any Lender determines that
maintenance of its Eurodollar Rate Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation or directive, whether or not
having the force of law, or (ii) the Required Lenders determine that (x)
deposits of a type and maturity appropriate to match fund Eurodollar Rate
Advances are not available or (y) the interest rate applicable to a Type of
Advance does not accurately reflect the cost of making or maintaining such an
Advance, then the Agent shall suspend the availability of the affected Type of
Advance and, in the case of any occurrence set forth in clause (i) require any
Advances of the affected Type to be repaid.
4.4 Funding Indemnification. If any payment of a Eurodollar Rate Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment, or otherwise, or a Eurodollar Rate
Advance is not made on the date specified by the Borrower for any reason other
than default by the Lenders, the Borrower indemnifies each Lender for any loss
or cost incurred by it resulting therefrom, including, without limitation, any
loss or cost in liquidating or employing deposits acquired to fund or maintain
the Eurodollar Rate Advance. In connection with any assignment by any Lender of
any portion of the Loans made pursuant to Section 13.3 and made during the
Syndication Period, and if, notwithstanding the provisions of Section 2.4, the
Borrower has requested and the Agent has consented to the use of the Eurodollar
Rate, the Borrower shall be deemed to have repaid all outstanding Eurodollar
Rate Advances as of the effective date of such assignment and reborrowed such
amount as a Floating Rate Advance and/or Eurodollar Rate Advance (chosen in
accordance with the provisions of Section 2.4) and the indemnification
provisions under this Section 4.4 shall apply.
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4.5 Lender Statements; Survival of Indemnity. If reasonably possible, each
Lender shall designate an alternate Lending Installation with respect to its
Eurodollar Rate Loans to reduce any liability of the Borrower to such Lender
under Sections 4.1 and 4.2 or to avoid the unavailability of a Type of Advance
under Section 4.3, so long as such designation is not disadvantageous to such
Lender. Each Lender requiring compensation pursuant to Section 2.15(E) or to
this Article IV shall use its reasonable efforts to notify the Borrower and the
Agent in writing of any Change, law, policy, rule, guideline or directive giving
rise to such demand for compensation not later than thirty (30) days following
the date upon which the responsible account officer of such Lender knows or
should have known of such Change, law, policy, rule, guideline or directive. Any
demand for compensation pursuant to this Article IV shall be in writing and
shall state the amount due, if any, under Section 4.1, 4.2 or 4.4 and shall set
forth in reasonable detail the calculations upon which such Lender determined
such amount. Such written demand shall be rebuttably presumed correct for all
purposes. Determination of amounts payable under such Sections in connection
with a Eurodollar Rate Loan shall be calculated as though each Lender funded its
Eurodollar Rate Loan through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the Eurodollar
Rate applicable to such Loan, whether in fact that is the case or not. The
obligations of the Borrower under Sections 4.1, 4.2 and 4.4 shall survive
payment of the Obligations and termination of this Agreement.
ARTICLE V: CONDITIONS PRECEDENT
5.1 Initial Advances and Letters of Credit. The Lenders shall not be
required to make the initial Loans or issue any Letters of Credit unless the
Borrower has furnished to the Agent each of the following, with sufficient
copies for the Lenders, all in form and substance satisfactory to the Agent and
the Lenders:
(1) Copies of the Articles of Incorporation of the Borrower,
together with all amendments and a certificate of good standing, both
certified by the appropriate governmental officer in its jurisdiction
of incorporation;
(2) Copies, certified by the Secretary or Assistant Secretary
of the Borrower, of its By-Laws and of its Board of Directors'
resolutions (and resolutions of other bodies, if any are deemed
necessary by counsel for any Lender) authorizing the execution of the
Loan Documents;
(3) An incumbency certificate, executed by the Secretary or
Assistant Secretary of the Borrower, which shall identify by name and
title and bear the signature of the officers of the Borrower authorized
to sign the Loan Documents and to make borrowings hereunder, upon which
certificate the Lenders shall be entitled to rely until informed of any
change in writing by the Borrower;
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(4) A certificate, in form and substance satisfactory to the
Agent, signed by the chief financial officer of the Borrower, stating
that on Closing Date no Default or Unmatured Default has occurred and
is continuing;
(5) A written opinion of the Borrower's counsel, addressed to
the Agent and the Lenders, addressing the issues identified in Exhibit
F hereto containing assumptions and qualifications acceptable to the
Agent and the Lenders;
(6) Notes payable to the order of each of the applicable
Lenders;
(7) Evidence satisfactory to the Agent that (i) all conditions
precedent to the consummation of the Tender Offer have been satisfied
or waived with the approval of the Agent (such approval not to be
unreasonably withheld), (ii) Acquisition Corp., the Borrower and Target
have entered into the Merger Agreement in form and substance
satisfactory to the Agent, (iii) the Merger Agreement has been approved
by all necessary corporate action of Acquisition Corp.'s, the
Borrower's and Target's respective Board of Directors, and has not been
amended, waived or modified in any material respect without the
approval of the Agent (such approval not to be unreasonably withheld)
and (iv) there has not occurred any material breach or default under
the Merger Agreement;
(8) Evidence satisfactory to the Agent that there exists no
injunction or temporary restraining order which, in the judgment of the
Agent, would prohibit the making of the Loans or the consummation of
the Tender Offer or Merger or any litigation seeking such an injunction
or restraining order;
(9) Written money transfer instructions reasonably requested
by the Agent, addressed to the Agent and signed by an Authorized
Officer; and
(10) Evidence satisfactory to the Agent that the Borrower has
received at least $30,000,000 in proceeds from the issuance of
Subordinated Notes to LDI, Ltd;
(11) Copy of the fairness opinion from Target's investment
banker relating to the terms of the Tender Offer and Merger.
(12) Such other documents as the Agent or any Lender or its
counsel may have reasonably requested, including, without limitation
all of the documents reflected on the List of Closing Documents
attached as Exhibit G to this Agreement.
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5.2 Each Advance and Letter of Credit. The Lenders shall not be required
to make any Advance or issue any Letter of Credit, unless on the applicable
Borrowing Date, or in the case of a Letter of Credit, the date on which the
Letter of Credit is to be issued:
(i) There exists no Default or Unmatured Default; and
(ii) The representations and warranties contained in Article
VI are true and correct as of such Borrowing Date except for changes in
the Schedules to this Agreement reflecting transactions permitted by
this Agreement.
Each Borrowing Notice with respect to each such Advance and the letter of
credit application with respect to a Letter of Credit shall constitute a
representation and warranty by the Borrower that the conditions contained in
Sections 5.2(i) and (ii) have been satisfied. Any Lender may require a duly
completed officer's certificate in substantially the form of Exhibit H hereto
and/or a duly completed compliance certificate in substantially the form of
Exhibit I hereto as a condition to making an Advance.
ARTICLE VI: REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Lenders to enter into this Agreement
and to make the Loans and the other financial accommodations to the Borrower and
to issue the Letters of Credit described herein, the Borrower represents and
warrants as follows to each Lender and the Agent as of the Closing Date, and
thereafter on each date as required by Section 5.2:
6.1 Organization; Corporate Powers. The Borrower and each of its
Subsidiaries (i) is a corporation duly organized, validly existing and in
existence under the laws of the jurisdiction of its organization, (ii) is duly
qualified to do business as a foreign corporation and is in good standing under
the laws of each jurisdiction in which failure to be so qualified and in good
standing could not reasonably be expected to have a Material Adverse Effect, and
(iii) has all requisite corporate power and authority to own, operate and
encumber its property and to conduct its business as presently conducted and as
proposed to be conducted.
6.2 Authority.
(A) The Borrower and each of its Subsidiaries has the requisite corporate
power and authority (i) to execute, deliver and perform each of the Loan
Documents, (ii) to execute, deliver and perform each of the other Transaction
Documents which are to be executed by it in connection with the Tender Offer and
the Merger or which have been executed by it as required by this Agreement on or
prior to Closing Date and (iii) to file the Transaction Documents which must be
filed by it in connection with the Tender Offer and the Merger
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or which have been filed by it as required by this Agreement or otherwise on or
prior to the Closing Date with any Governmental Authority.
(B) The execution, delivery and performance of each of the Loan Documents
and the execution, delivery, performance and filing, as the case may be, of each
of the other Transaction Documents which must be executed or filed by the
Borrower or any of its Subsidiaries in connection with the Tender Offer and the
Merger or which have been executed or filed as required by this Agreement or
otherwise on or prior to the Closing Date and to which the Borrower or any of
its Subsidiaries is party, and the consummation of the transactions contemplated
thereby, have been duly approved by the respective boards of directors and, if
necessary, the shareholders of the Borrower and its Subsidiaries, and such
approvals have not been rescinded. No other corporate action or proceedings on
the part of the Borrower or its Subsidiaries are necessary to consummate such
transactions.
(C) Each of the Transaction Documents to which the Borrower or any of its
Subsidiaries is a party has been duly executed, delivered or filed, as the case
may be, by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms (except as enforceability
may be limited by bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally), is in full force and effect and no
material term or condition thereof has been amended, modified or waived from the
terms and conditions contained in the Transaction Documents delivered to the
Agent pursuant to Section 5.1 without the prior written consent of the Required
Lenders, and the Borrower and its Subsidiaries have, and, to the best of the
Borrower's and its Subsidiaries' knowledge, all other parties thereto have,
performed and complied with all the terms, provisions, agreements and conditions
set forth therein and required to be performed or complied with by such parties
on or before the Closing Date, and no unmatured default, default or breach of
any covenant by any such party exists thereunder.
6.3 No Conflict; Governmental Consents. The execution, delivery and
performance of each of the Loan Documents and the other Transaction Documents to
which the Borrower or any of its Subsidiaries is a party do not and will not (i)
conflict with the certificate or articles of incorporation or by-laws of the
Borrower or any such Subsidiary, (ii) constitute a tortious interference with
any Contractual Obligation of any Person or conflict with, result in a breach of
or constitute (with or without notice or lapse of time or both) a default under
any Requirement of Law (including, without limitation, any Environmental
Property Transfer Act) or Contractual Obligation of the Borrower or any such
Subsidiary, or require termination of any Contractual Obligation, except such
interference, breach, default or termination which individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect,
(iii) result in or require the creation or imposition of any Lien whatsoever
upon any of the property or assets of the Borrower or any such Subsidiary, other
than Liens permitted by the Loan Documents, or (iv) require any approval of the
Borrower's or any such Subsidiary's shareholders except such as have been
obtained. Except as set forth on Schedule 6.3 to this Agreement, the
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execution, delivery and performance of each of the Transaction Documents to
which the Borrower or any of its Subsidiaries is a party do not and will not
require any registration with, consent or approval of, or notice to, or other
action to, with or by any Governmental Authority, including under any
Environmental Property Transfer Act, except filings, consents or notices which
have been made, obtained or given, or which, if not made, obtained or given,
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect.
6.4 Financial Statements.
(A) The pro forma balance sheets, income statements and statements of cash
flow of the Borrower and its Subsidiaries, copies of which are attached hereto
as Schedule 6.4 to this Agreement, present on a pro forma basis the financial
condition of the Borrower and such Subsidiaries as of such date, reflect on a
pro forma basis those liabilities reflected in the notes thereto and resulting
from consummation of the Merger and the other transactions contemplated by this
Agreement, and the payment or accrual of all Transaction Costs payable on the
Closing Date with respect to any of the foregoing and demonstrate that, after
giving effect to the Merger, the Borrower and its Subsidiaries can repay their
debts and satisfy their other obligations as and when due, and can comply with
the requirements of this Agreement. The projections and assumptions expressed in
the pro forma financials referenced in this Section 6.4(A) were prepared in good
faith and represent management's opinion based on the information available to
the Borrower at the time so furnished and, since the preparation thereof and up
to the Closing Date, there has occurred no material adverse change in the
business, financial condition, operations, or, prospects of the Borrower,
Target, or the Borrower and Target taken as a whole.
(B) Complete and accurate copies of the following financial statements and
the following related information have been delivered to the Agent: (1) the
balance sheet of the Borrower as at December 31, 1996; and the related combined
statements of income, changes in stockholders' equity and cash flows of the
Borrower for the fiscal year then ended, and the audit report related thereto;
(2) the unaudited balance sheet of the Borrower for the fiscal period ended
September 30, 1997, and the related statements of operations, changes in
stockholder's equity and cash flows of the Borrower for the fiscal quarter then
ended; (3) the balance sheet of Target as at September 30, 1996, and the related
statements of operations, changes in stockholder's investment and cash flows of
Target for the fiscal year then ended, and the audit report related thereto; and
(4) the unaudited balance sheet of the Target for the fiscal period ended August
31, 1997 and the related statements of operations, changes in stockholder's
equity and cash flows of the Target for the fiscal period then ended.
6.5 No Material Adverse Change. (A) Since June 30, 1997 up to the Closing
Date, there has occurred no material adverse change in the business, financial
condition, operations
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or prospects of the Borrower and its Subsidiaries taken as a whole or any other
event which has had or could reasonably be expected to result in a Material
Adverse Effect.
(B) Since June 30, 1997 up to the Closing Date, there has occurred no
change in the business, financial condition, operations or prospects of Target
which has had or could reasonably be expected to have a material adverse effect
on Target.
(C) Since the Closing Date, there has occurred no event which has had or
could reasonably be expected to result in a Material Adverse Effect.
6.6 Taxes.
(A) Tax Examinations. All deficiencies which have been asserted against
the Borrower or any of the Borrower's Subsidiaries as a result of any federal,
state, local or foreign tax examination for each taxable year in respect of
which an examination has been conducted have been fully paid or finally settled
or are being contested in good faith, and as of the Closing Date no issue has
been raised by any taxing authority in any such examination which, by
application of similar principles, reasonably can be expected to result in
assertion by such taxing authority of a material deficiency for any other year
not so examined which has not been reserved for in the Borrower's consolidated
financial statements to the extent, if any, required by Agreement Accounting
Principles. Except as permitted pursuant to Section 7.2(D), neither the Borrower
nor any of the Borrower's Subsidiaries anticipates any material tax liability
with respect to the years which have not been closed pursuant to applicable law.
(B) Payment of Taxes. Except as described on Schedule 6.6, all tax returns
and reports of the Borrower and its Subsidiaries required to be filed have been
timely filed, and all taxes, assessments, fees and other governmental charges
thereupon and upon their respective property, assets, income and franchises
which are shown in such returns or reports to be due and payable have been paid
except those items which are being contested in good faith and have been
reserved for in accordance with Agreement Accounting Principles. The Borrower
has no knowledge of any proposed tax assessment against the Borrower or any of
its Subsidiaries that will have or could reasonably be expected to have a
Material Adverse Effect.
6.7 Litigation; Loss Contingencies and Violations. Except as set forth in
Schedule 6.7 to this Agreement, which lists all pending litigation involving
individual claims against the Borrower or any of its Subsidiaries or Target of
more than $500,000, there is no action, suit, proceeding, arbitration or (to the
Borrower's knowledge) investigation before or by any Governmental Authority or
private arbitrator pending or, to the Borrower's knowledge, threatened against
the Borrower or any of its Subsidiaries or any property of any of them which
will have or could reasonably be expected to have a Material Adverse Effect.
There is no material loss contingency within the meaning of
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Agreement Accounting Principles which has not been reflected in the consolidated
financial statements of the Borrower prepared and delivered pursuant to Section
7.1(A) for the fiscal period during which such material loss contingency was
incurred. Neither the Borrower nor any of its Subsidiaries is (A) in violation
of any applicable Requirements of Law which violation will have or could
reasonably be expected to have a Material Adverse Effect, or (B) subject to or
in default with respect to any final judgment, writ, injunction, restraining
order or order of any nature, decree, rule or regulation of any court or
Governmental Authority which will have or could reasonably be expected to have a
Material Adverse Effect.
6.8 Subsidiaries. Schedule 6.8 to this Agreement (i) contains a
description of the corporate structure of the Borrower, its Subsidiaries and any
other Person in which the Borrower or any of its Subsidiaries holds an Equity
Interest (both narratively and in chart form); and (ii) accurately sets forth
(A) the correct legal name, the jurisdiction of incorporation and the
jurisdictions in which each of the Borrower and the direct and indirect
Subsidiaries of the Borrower is qualified to transact business as a foreign
corporation, (B) the authorized, issued and outstanding shares of each class of
Capital Stock of the Borrower and each of its Subsidiaries and the owners of
such shares (both as of the Closing Date and on a fully-diluted basis), and (C)
a summary of the direct and indirect partnership, joint venture, or other Equity
Interests, if any, of the Borrower and each Subsidiary of the Borrower in any
Person that is not a corporation. Except as described on Schedule 6.8, none of
the issued and outstanding Capital Stock of the Borrower or any of its
Subsidiaries is subject to any vesting, redemption, or repurchase agreement, and
there are no warrants or options outstanding with respect to such Capital Stock.
The outstanding Capital Stock of the Borrower and each of the Borrower's
Subsidiaries is duly authorized, validly issued, fully paid and nonassessable
and is not Margin Stock.
6.9 ERISA. Except as disclosed on Schedule 6.9, no Benefit Plan has
incurred any accumulated funding deficiency (as defined in Sections 302(a)(2) of
ERISA and 412(a) of the Code) whether or not waived. Neither the Borrower nor
any member of the Controlled Group has incurred any liability to the PBGC which
remains outstanding other than the payment of premiums, and there are no premium
payments which have become due which are unpaid. Schedule B to the most recent
annual report filed with the IRS with respect to each Benefit Plan and furnished
to the lenders is complete and accurate. Since the date of each such Schedule B,
there has been no material adverse change in the funding status or financial
condition of the Benefit Plan relating to such Schedule B. Neither the Borrower
nor any member of the Controlled Group has (i) failed to make a required
contribution or payment to a Multiemployer Plan or (ii) made a complete or
partial withdrawal under Sections 4203 or 4205 of ERISA from a Multiemployer
Plan. Neither the Borrower nor any member of the Controlled Group has failed to
make a required installment or any other required payment under Section 412 of
the Code on or before the due date for such installment or other payment.
Neither the Borrower nor any member of
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the Controlled Group is required to provide security to a Benefit Plan under
Section 401(a)(29) of the Code due to a Plan amendment that results in an
increase in current liability for the plan year. Neither the Borrower nor any of
its Subsidiaries maintains or contributes to any employee welfare benefit plan
within the meaning of Section 3(1) of ERISA which provides benefits to employees
after termination of employment other than as required by Section 601 of ERISA.
To Borrower's knowledge, each Plan which is intended to be qualified under
Section 401(a) of the Code as currently in effect is so qualified, and each
trust related to any such Plan is exempt from federal income tax under Section
501(a) of the Code as currently in effect. The Borrower and all Subsidiaries are
in compliance in all material respects with the responsibilities, obligations
and duties imposed on them by ERISA and the Code with respect to all Plans. To
Borrower's knowledge, neither the Borrower nor any of its Subsidiaries nor any
fiduciary of any Plan has engaged in a nonexempt prohibited transaction
described in Sections 406 of ERISA or 4975 of the Code which could reasonably be
expected to subject the Borrower to liability in excess of $1,000,000. To
Borrower's knowledge, neither the Borrower nor any member of the Controlled
Group has taken or failed to take any action which would constitute or result in
a Termination Event, which action or inaction could reasonably be expected to
subject the Borrower to liability in excess of $1,000,000. Neither the Borrower
nor any Subsidiary is subject to any liability under Sections 4063, 4064, 4069,
4204 or 4212(c) of ERISA and no other member of the Controlled Group is subject
to any liability under Sections 4063, 4064, 4069, 4204 or 4212(c) of ERISA which
could reasonably be expected to subject the Borrower to liability in excess of
$1,000,000. Neither the Borrower nor any of its Subsidiaries has, by reason of
the transactions contemplated hereby, any obligation to make any payment to any
employee pursuant to any Plan or existing contract or arrangement.
6.10 Accuracy of Information. The information, exhibits and reports
furnished by or on behalf of the Borrower and any of its Subsidiaries to the
Agent or to any Lender in connection with the negotiation of, or compliance
with, the Loan Documents, the representations and warranties of the Borrower and
its Subsidiaries contained in the Loan Documents, and all certificates and
documents delivered to the Agent and the Lenders pursuant to the terms thereof,
taken as a whole, do not contain as of the date furnished any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.
6.11 Securities Activities. Neither the Borrower nor any of its
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
6.12 Material Agreements. Neither the Borrower nor any of its Subsidiaries
has received notice or has knowledge that (i) it is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any
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Contractual Obligation applicable to it, or (ii) any condition exists which,
with the giving of notice or the lapse of time or both, would constitute a
default with respect to any such Contractual Obligation, in each case, except
where such default or defaults, if any, individually or in the aggregate will
not have or could not reasonably be expected to have a Material Adverse Effect.
6.13 Compliance with Laws. The Borrower and its Subsidiaries are in
compliance with all Requirements of Law applicable to them and their respective
businesses, in each case where the failure to so comply individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect.
6.14 Assets and Properties. The Borrower and each of its Subsidiaries has
good and marketable title to all of its material assets and properties (tangible
and intangible, real or personal) owned by it or a valid leasehold interest in
all of its material leased assets (except insofar as marketability may be
limited by any laws or regulations of any Governmental Authority affecting such
assets), and all such assets and property are free and clear of all Liens,
except Liens permitted under Section 7.3(C). Substantially all of the assets and
properties owned by, leased to or used by the Borrower and/or each such
Subsidiary of the Borrower are in adequate operating condition and repair,
ordinary wear and tear excepted. Neither this Agreement nor any other
Transaction Document, nor any transaction contemplated under any such agreement,
will affect any right, title or interest of the Borrower or such Subsidiary in
and to any of such assets in a manner that would have or could reasonably be
expected to have a Material Adverse Effect.
6.15 Statutory Indebtedness Restrictions. Neither the Borrower nor any of
its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, or the
Investment Company Act of 1940, or any other federal or state statute or
regulation which limits its ability to incur indebtedness or its ability to
consummate the transactions contemplated hereby or in connection with
Acquisition and the Related Transactions.
6.16 Insurance. The Borrower maintains insurance policies and programs
reasonably consistent with prudent industry practice.
6.17 Labor Matters.
As of the Closing Date, no attempt to organize the employees of the
Borrower, and no labor disputes, strikes or walkouts affecting the operations of
the Borrower or any of its Subsidiaries, is pending, or, to the Borrower's
knowledge, threatened, planned or contemplated.
6.18 Environmental Matters. (A) Except as disclosed on Schedule 6.18 to
this Agreement
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(i) the operations of the Borrower and its Subsidiaries comply
in all material respects with Environmental, Health or Safety
Requirements of Law;
(ii) the Borrower and its Subsidiaries have all permits,
licenses or other authorizations required under Environmental, Health
or Safety Requirements of Law and are in material compliance with such
permits;
(iii) neither the Borrower, any of its Subsidiaries nor any of
their respective present property or operations, or, to the best of,
the Borrower's or any of its Subsidiaries' knowledge, any of their
respective past property or operations, are subject to or the subject
of, any investigation known to the Borrower or any of its Subsidiaries,
any judicial or administrative proceeding, order, judgment, decree,
settlement or other agreement respecting: (A) any material violation of
Environmental, Health or Safety Requirements of Law; (B) any remedial
action; or (C) any material claims or liabilities arising from the
Release or threatened Release of a Contaminant into the environment;
(iv) there is not now, nor to the best of the Borrower's or
any of its Subsidiaries' knowledge has there ever been on or in the
property of the Borrower or any of its Subsidiaries any landfill, waste
pile, underground storage tanks, aboveground storage tanks, surface
impoundment or hazardous waste storage facility of any kind, any
polychlorinated biphenyls (PCBs) used in hydraulic oils, electric
transformers or other equipment, or any asbestos containing material
which in any such case could reasonably be expected to result in
material liability for the Borrower or any of its Subsidiaries; and
(v) neither the Borrower nor any of its Subsidiaries has any
material Contingent Obligation in connection with any Release or
threatened Release of a Contaminant into the environment.
(B) For purposes of this Section 6.18 "material" means any noncompliance
or basis for liability which could reasonably be likely to subject the Borrower
to liability in excess of $1,000,000.
6.19 Tender Offer; Merger. As of the Closing Date and immediately prior to
the making of the initial Loans:
(i) the Merger Agreement is in full force and effect, no
material breach, default or waiver of any term or provision thereof by
the Borrower or any of its Subsidiaries or, to the best of the
Borrower's knowledge, the other parties thereto, has occurred (except
for such breaches, defaults and waivers, if any, consented to in
writing by the Agent) and no action has been taken by any competent
authority which restrains, prevents or imposes any material adverse
condition upon, or seeks
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to restrain, prevent or impose any material adverse condition upon, the
Tender Offer or the Merger;
(ii) the representations and warranties of the Borrower
contained in the Merger Agreement, if any, are true and correct in all
material respects;
(iii) except as set forth in Schedule 6.19 to this Agreement,
all conditions precedent to, and all consents necessary to permit, the
funding of the Tender Offer and, other than approval of the
shareholders of the Borrower and Target, consummation of the Merger
have been satisfied or waived with the written approval of the Agent
(such approval not to be unreasonably withheld).
6.20 Solvency. After giving effect to the (i) Loans to be made on the
Closing Date or such other date as Loans requested hereunder are made, (ii) the
payment and accrual of all transaction costs with respect to the foregoing and
(iii) the funding of the Tender Offer, the Borrower and its Subsidiaries taken
as a whole is Solvent.
ARTICLE VII : COVENANTS
The Borrower covenants and agrees that so long as any Commitments are
outstanding and thereafter until payment in full of all of the Obligations
(other than contingent indemnity obligations), unless the Required Lenders shall
otherwise give prior written consent:
7.1 Reporting. The Borrower shall:
(A) Financial Reporting. Furnish to the Lenders:
(i) Quarterly Reports. As soon as practicable, and in any
event within forty-five (45) days after the end of each fiscal quarter
in each fiscal year, the consolidated and consolidating balance sheet
of the Borrower and its Subsidiaries as at the end of such period and
the related consolidated and consolidating statements of income and
cash flows of the Borrower and its Subsidiaries for such fiscal quarter
and for the period from the beginning of the then current fiscal year
to the end of such fiscal quarter, certified by the chief financial
officer of the Borrower on behalf of the Borrower as fairly presenting
the consolidated and consolidating financial position of the Borrower
and its Subsidiaries as at the dates indicated and the results of their
operations and cash flows for the periods indicated in accordance with
Agreement Accounting Principles except for the omission of full
footnotes which may be required under GAAP, subject to normal year end
adjustments, and a forecasted consolidated and consolidating balance
sheet and a
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consolidated statement of income and cash flows of the Borrower for and
as of the end of the next succeeding fiscal quarter and a comparison of
the statements of income and cash flows to the most recent budget.
(ii) Annual Reports. As soon as practicable, and in any event
within ninety (90) days after the end of each fiscal year, (a) the
consolidated balance sheet of the Borrower and its Subsidiaries as at
the end of such fiscal year and the related consolidated statements of
income, stockholders' equity and cash flows of the Borrower and its
Subsidiaries for such fiscal year, and in comparative form the
corresponding figures for the previous fiscal year along with
consolidating schedules in form and substance sufficient to calculate
the financial covenants set forth in Section 7.4, (b) a schedule from
the Borrower setting forth for each item in clause (a) hereof, the
corresponding figures from the consolidated financial budget for the
current fiscal year delivered pursuant to Section 7.1(A)(iv), and (c)
an audit report on the items listed in clause (a) hereof of independent
certified public accountants of recognized national standing, which
audit report shall be unqualified and shall state that such financial
statements fairly present the consolidated and consolidating financial
position of the Borrower and its Subsidiaries as at the dates indicated
and the results of their operations and cash flows for the periods
indicated in conformity with Agreement Accounting Principles and that
the examination by such accountants in connection with such
consolidated and consolidating financial statements has been made in
accordance with generally accepted auditing standards. The deliveries
made pursuant to this clause (ii) shall be accompanied by (x) any
management letter prepared by the above-referenced accountants, and (y)
a certificate of such accountants that, in the course of their
examination necessary for their certification of the foregoing, they
have obtained no knowledge of any Default or Unmatured Default, or if,
in the opinion of such accountants, any Default or Unmatured Default
shall exist, stating the nature and status thereof.
(iii) Officer's Certificate. Together with each delivery of
any financial statement (a) pursuant to clauses (i), and (ii) of this
Section 7.1(A), an Officer's Certificate of the Borrower, substantially
in the form of Exhibit H attached hereto and made a part hereof,
stating that no Default or Unmatured Default exists, or if any Default
or Unmatured Default exists, stating the nature and status thereof and
(b) pursuant to clauses (i) and (ii) of this Section 7.1(A), a
compliance certificate, substantially in the form of Exhibit I attached
hereto and made a part hereof, signed by the Borrower's Chief Financial
Officer or Treasurer, setting forth calculations for the period then
ended for Section 2.5(B), if applicable, which demonstrate compliance,
when applicable, with the provisions of Section 7.4, and which
calculate the Leverage Ratio for purposes of determining the then
Applicable Floating Rate Margin, Applicable Eurodollar Margin and
Applicable Commitment Fee Percentage.
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(iv) As soon as practicable, and in any event within twenty
(20) days after the close of each calendar month, a Borrowing Base
Certificate, together with such supporting documents as the Agent deems
desirable, all certified as being true and correct by the Chief
Financial Officer or Treasurer of the Borrower. The Borrower may update
the Borrowing Base Certificate and supporting documents more frequently
than monthly and the most recently delivered Borrowing Base Certificate
shall be the applicable Borrowing Base Certificate for purposes of
determining the Borrowing Base at any time;
(v) Budgets; Business Plans; Financial Projections. As soon as
practicable and in any event not later than thirty (30) days after the
beginning of each fiscal year, a copy of the plan and forecast
(including a projected balance sheet, income statement and a statement
of cash flow) of the Borrower and its Subsidiaries for the five (5)
fiscal years beginning with such fiscal year prepared in such detail as
shall be reasonably satisfactory to the Agent, and any updated budget
prepared by the Borrower.
(B) Notice of Default. Promptly upon any of the chief executive officer,
chief operating officer, chief financial officer, treasurer or controller of the
Borrower obtaining knowledge (i) of any condition or event which constitutes a
Default or Unmatured Default, or becoming aware that any Lender or Agent has
given any written notice with respect to a claimed Default or Unmatured Default
under this Agreement, or (ii) that any Person has given any written notice to
the Borrower or any Subsidiary of the Borrower or taken any other action with
respect to a claimed default or event or condition of the type referred to in
Section 8.1(E), deliver to the Agent and the Lenders an Officer's Certificate
specifying (a) the nature and period of existence of any such claimed default,
Default, Unmatured Default, condition or event, (b) the notice given or action
taken by such Person in connection therewith, and (c) what action the Borrower
has taken, is taking and proposes to take with respect thereto.
(C) Lawsuits. (i) Promptly upon the Borrower obtaining knowledge of the
institution of, or written threat of, any action, suit, proceeding, governmental
investigation or arbitration against or affecting the Borrower or any of its
Subsidiaries or any property of the Borrower or any of its Subsidiaries not
previously disclosed pursuant to Section 6.7, which action, suit, proceeding,
governmental investigation or arbitration exposes, or in the case of multiple
actions, suits, proceedings, governmental investigations or arbitrations arising
out of the same general allegations or circumstances which expose, in the
Borrower's reasonable judgment, the Borrower or any of its Subsidiaries to
liability in an amount aggregating $1,000,000 or more (exclusive of claims
covered by insurance policies of the Borrower or any of its Subsidiaries unless
the insurers of such claims have disclaimed coverage or reserved the right to
disclaim coverage on such claims and exclusive of claims covered by the
indemnity of a financially responsible indemnitor in favor of the Borrower or
any of its Subsidiaries unless the indemnitor has disclaimed or
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reserved the right to disclaim coverage thereof), give written notice thereof to
the Agent and the Lenders and provide such other information as may be
reasonably available to enable each Lender and the Agent and its counsel to
evaluate such matters; and (ii) in addition to the requirements set forth in
clause (i) of this Section 7.1(C), upon request of the Agent or the Required
Lenders, promptly give written notice of the status of any action, suit,
proceeding, governmental investigation or arbitration covered by a report
delivered pursuant to clause (i) above and provide such other information as may
be reasonably available to it that would not violate any attorney-client
privilege by disclosure to the Lenders to enable each Lender and the Agent and
its counsel to evaluate such matters.
(D) ERISA Notices. Deliver or cause to be delivered to the Agent and the
Lenders, at the Borrower's expense, the following information and notices as
soon as reasonably possible, and in any event:
(i) (a) within ten (10) Business Days after the Borrower
obtains knowledge that a Termination Event has occurred, a written
statement of the chief financial officer of the Borrower describing
such Termination Event and the action, if any, which the Borrower has
taken, is taking or proposes to take with respect thereto, and when
known, any action taken or threatened by the IRS, DOL or PBGC with
respect thereto and (b) within ten (10) Business Days after any member
of the Controlled Group obtains knowledge that a Termination Event has
occurred which could reasonably be expected to subject the Borrower to
liability in excess of $1,000,000, a written statement of the chief
financial officer of the Borrower describing such Termination Event and
the action, if any, which the member of the Controlled Group has taken,
is taking or proposes to take with respect thereto, and when known, any
action taken or threatened by the IRS, DOL or PBGC with respect
thereto;
(ii) within ten (10) Business Days after the Borrower or any
of its Subsidiaries obtains knowledge that a prohibited transaction
(defined in Sections 406 of ERISA and Section 4975 of the Code) has
occurred, a statement of the chief financial officer of the Borrower
describing such transaction and the action which the Borrower or such
Subsidiary has taken, is taking or proposes to take with respect
thereto;
(iii) within ten (10) Business Days after the material
increase in the benefits of any existing Plan or the establishment of
any new Benefit Plan or the commencement of, or obligation to commence,
contributions to any Benefit Plan or Multiemployer Plan to which the
Borrower or any member of the Controlled Group was not previously
contributing, notification of such increase, establishment,
commencement or obligation to commence and the amount of such
contributions;
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(iv) within ten (10) Business Days after the Borrower or any
of its Subsidiaries receives notice of any unfavorable determination
letter from the IRS regarding the qualification of a Plan under Section
401(a) of the Code, copies of each such letter;
(v) within ten (10) Business Days after the establishment of
any foreign employee benefit plan or the commencement of, or obligation
to commence, contributions to any foreign employee benefit plan to
which the Borrower or any Subsidiary was not previously contributing,
notification of such establishment, commencement or obligation to
commence and the amount of such contributions;
(vi) upon the request of the Agent, within ten (10) Business
Days after the filing thereof with the DOL, IRS or PBGC, copies of each
annual report (form 5500 series), including Schedule B thereto, filed
with respect to each Benefit Plan;
(vii) upon the request of the Agent, within ten (10) Business
Days after receipt by the Borrower or any member of the Controlled
Group of each actuarial report for any Benefit Plan or Multiemployer
Plan and each annual report for any Multiemployer Plan, copies of each
such report;
(viii) within ten (10) Business Days after the filing thereof
with the IRS, a copy of each funding waiver request filed with respect
to any Benefit Plan and all communications received by the Borrower or
a member of the Controlled Group with respect to such request;
(ix) within ten (10) Business Days after receipt by the
Borrower or any member of the Controlled Group of the PBGC's intention
to terminate a Benefit Plan or to have a trustee appointed to
administer a Benefit Plan, copies of each such notice;
(x) within ten (10) Business Days after receipt by the
Borrower or any member of the Controlled Group of a notice from a
Multiemployer Plan regarding the imposition of withdrawal liability,
copies of each such notice;
(xi) within ten (10) Business Days after the Borrower or any
member of the Controlled Group fails to make a required installment or
any other required payment under Section 412 of the Code on or before
the due date for such installment or payment, a notification of such
failure; and
(xii) within ten (10) Business Days after the Borrower or any
member of the Controlled Group knows or has reason to know that (a) a
Multiemployer Plan has been terminated, (b) the administrator or plan
sponsor of a Multiemployer Plan intends to terminate a Multiemployer
Plan, or (c) the PBGC has instituted or will
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institute proceedings under Section 4042 of ERISA to terminate a
Multiemployer Plan.
(E) Labor Matters. Notify the Agent and the Lenders in writing, promptly
upon the Borrower's learning thereof, of (i) any material labor dispute to which
the Borrower or any of its Subsidiaries may become a party, including, without
limitation, any strikes, lockouts or other disputes relating to such Persons'
plants and other facilities and (ii) any material Worker Adjustment and
Retraining Notification Act liability incurred with respect to the closing of
any plant or other facility of the Borrower or any of its Subsidiaries.
(F) Other Indebtedness. Deliver to the Agent (i) a copy of each regular
report, notice or communication regarding potential or actual defaults
(including any accompanying officer's certificate) delivered by or on behalf of
the Borrower to the holders of funded Indebtedness pursuant to the terms of the
agreements governing such Indebtedness, such delivery to be made at the same
time and by the same means as such notice or other communication is delivered to
such holders, and (ii) a copy of each notice or other communication received by
the Borrower from the holders of funded Indebtedness pursuant to the terms of
such Indebtedness, such delivery to be made promptly after such notice or other
communication is received by the Borrower.
(G) Other Reports. Deliver or cause to be delivered to the Agent and the
Lenders copies of all financial statements, reports and notices, if any, sent or
made available generally by the Borrower to its securities holders or filed with
the Commission by the Borrower, all press releases made available generally by
the Borrower or any of the Borrower's Subsidiaries to the public concerning
material developments in the business of the Borrower or any such Subsidiary and
all notifications received from the Commission by the Borrower or its
Subsidiaries pursuant to the Securities Exchange Act of 1934 and the rules
promulgated thereunder.
(H) Environmental Notices. As soon as possible and in any event within ten
(10) days after receipt by the Borrower, a copy of (i) any notice or claim to
the effect that the Borrower or any of its Subsidiaries is or may be liable to
any Person as a result of the Release by the Borrower, any of its Subsidiaries,
or any other Person of any Contaminant into the environment, and (ii) any notice
alleging any violation of any Environmental, Health or Safety Requirements of
Law by the Borrower or any of its Subsidiaries if, in either case, such notice
or claim relates to an event which could reasonably be expected to subject the
Borrower to liability in excess of $250,000.
(I) Other Information. Promptly upon receiving a request therefor from the
Agent, prepare and deliver to the Agent and the Lenders such other information
with respect to the Borrower, any of its Subsidiaries, or the Collateral,
including, without limitation, schedules identifying and describing the
Collateral and any dispositions thereof or any
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Asset Sale or Financing (and the use of the Net Cash Proceeds thereof), as from
time to time may be reasonably requested by the Agent.
7.2 Affirmative Covenants.
(A) Corporate Existence, Etc. The Borrower shall, and shall cause each of
its Subsidiaries to, at all times maintain its corporate existence and preserve
and keep, or cause to be preserved and kept, in full force and effect its rights
and franchises material to its businesses.
(B) Corporate Powers; Conduct of Business. The Borrower shall, and shall
cause each of its Subsidiaries to, qualify and remain qualified to do business
in each jurisdiction in which the nature of its business requires it to be so
qualified and where the failure to be so qualified will have or could reasonably
be expected to have a Material Adverse Effect. The Borrower will, and will cause
each Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted.
(C) Compliance with Laws, Etc. The Borrower shall, and shall cause its
Subsidiaries to, (a) comply with all Requirements of Law and all restrictive
covenants affecting such Person or the business, properties, assets or
operations of such Person, and (b) obtain as needed all Permits necessary for
its operations and maintain such Permits in good standing, unless failure to
comply or obtain could not reasonably be expected to have a Material Adverse
Effect.
(D) Payment of Taxes and Claims; Tax Consolidation. The Borrower shall
pay, and cause each of its Subsidiaries to pay, (i) all taxes, assessments and
other governmental charges imposed upon it or on any of its properties or assets
or in respect of any of its franchises, business, income or property before any
penalty or interest accrues thereon, and (ii) all claims (including, without
limitation, claims for labor, services, materials and supplies) for sums which
have become due and payable and which by law have or may become a Lien (other
than a Lien permitted by Section 7.3(C)) upon any of the Borrower's or such
Subsidiary's property or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided, however, that no such taxes,
assessments and governmental charges referred to in clause (i) above or claims
referred to in clause (ii) above (and interest, penalties or fines relating
thereto) need be paid if being contested in good faith by appropriate
proceedings diligently instituted and conducted and if such reserve or other
appropriate provision, if any, as shall be required in conformity with Agreement
Accounting Principles shall have been made therefor.
(E) Insurance. The Borrower shall maintain for itself and its
Subsidiaries, or shall cause each of its Subsidiaries to maintain in full force
and effect, the insurance policies and programs reasonably consistent with
prudent industry practice. The Borrowers shall
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deliver to the Agent insurance certificates and endorsements (y) to all "All
Risk" physical damage insurance policies on all of the Borrowers' tangible real
and personal property and assets and business interruption insurance policies
naming the Agent loss payee, and (z) to all general liability and other
liability policies naming the Agent an additional insured. In the event the
Borrower or any of its Subsidiaries at any time or times hereafter shall fail to
obtain or maintain any of the policies or insurance required herein or to pay
any premium in whole or in part relating thereto, then the Agent, without
waiving or releasing any obligations or resulting Default hereunder, may at any
time or times thereafter (but shall be under no obligation to do so) obtain and
maintain such policies of insurance and pay such premiums and take any other
action with respect thereto which the Agent deems advisable. All sums so
disbursed by the Agent shall constitute part of the Obligations, payable as
provided in this Agreement.
(F) Inspection of Property; Books and Records; Discussions. The Borrower
shall permit and cause each of the Borrower's Subsidiaries to permit, any
authorized representative(s) designated by the Agent to visit and inspect any of
the properties of the Borrower or any of its Subsidiaries, to examine, audit,
check and make copies of their respective financial and accounting records,
books, journals, orders, receipts and any correspondence and other data relating
to their respective businesses or the transactions contemplated hereby
(including, without limitation, in connection with environmental compliance,
hazard or liability), and to discuss their affairs, finances and accounts with
their officers and, with the consent of the Borrower (which will not be
unreasonably withheld) or after a Default after notice to the Borrower,
independent certified public accountants, all upon reasonable notice and at such
reasonable times during normal business hours, as often as may be reasonably
requested. The Borrower shall keep and maintain, and cause each of the
Borrower's Subsidiaries to keep and maintain, in all material respects, proper
books of record and account in which entries in conformity with Agreement
Accounting Principles shall be made of all dealings and transactions in relation
to their respective businesses and activities. If a Default has occurred and is
continuing, the Borrower, upon the Agent's request, shall turn over any such
records to the Agent or its representatives.
(G) ERISA Compliance. The Borrower shall, and shall cause each of the
Borrower's Subsidiaries to, establish, maintain and operate all Plans to comply
in all material respects with the provisions of ERISA, the Code, all other
applicable laws, and the regulations and interpretations thereunder and the
respective requirements of the governing documents for such Plans.
(H) Maintenance of Property. The Borrower shall cause all property used or
useful in the conduct of its business or the business of any Subsidiary to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and shall cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Borrower may be necessary so that the
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business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this Section 7.2(H)
shall prevent the Borrower from discontinuing the operation or maintenance of
any of such property if such discontinuance is, in the judgment of the Borrower,
desirable in the conduct of its business or the business of any Subsidiary and
not disadvantageous in any material respect to the Agent or the Lenders.
(I) Environmental Compliance. The Borrower and its Subsidiaries shall
comply with all Environmental, Health or Safety Requirements of Law, except
where noncompliance will not have or is not reasonably likely to subject the
Borrower to liability in excess of $1,000,000.
(J) Use of Proceeds. The Borrower shall use the proceeds of the Revolving
Loans and the Term Loans to (i) repay existing Indebtedness, and (ii) provide
funds for the additional working capital needs and other general corporate
purposes of the Borrower. The Borrower will not, nor will it permit any
Subsidiary to, use any of the proceeds of the Loans to purchase or carry any
Margin Stock except in connection with the Tender Offer or to make any
Acquisition, other than a Permitted Acquisition pursuant to Section 7.3(G).
(K) Additional Equity. The Borrower shall receive on or before March 31,
1998 additional equity in the form of assets or cash in an amount and form
acceptable to the Agent with a fair market value of at least $14,000,000 or such
lesser amount as may be acceptable to the Agent and the consideration paid by
the Borrower shall consist exclusively of Equity Interests of the Borrower.
7.3 Negative Covenants.
(A) Indebtedness. Neither the Borrower nor any of its Subsidiaries shall
directly or indirectly create, incur, assume or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness, except:
(i) the Obligations;
(ii) the Subordinated Notes and any Permitted Refinancing
Indebtedness, provided, however, that with respect to Subordinated
Notes issued pursuant to the High Yield Note Agreement, the amount
thereof may exceed the principal amount of the Subordinated Notes
issued to LDI, Ltd. as of the Closing Date, but such Subordinated Notes
must have a Weighted Average Life to Maturity that is equal to or
greater than the Weighted Average Life to Maturity of the Subordinated
Notes issued to LDI, Ltd. as of the Closing Date and must contain
terms, including, without limitation, terms with respect to amount,
maturity, amortization, interest rate, premiums, fees, redemption,
covenants, subordination terms, events of default and remedies that are
reasonably satisfactory to the Required Lenders;
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(iii) Permitted Existing Indebtedness;
(iv) Indebtedness in respect of obligations secured by
Customary Permitted Liens;
(v) Indebtedness constituting Contingent Obligations permitted
by Section 7.3(E);
(vi) Indebtedness arising from intercompany loans from any
Subsidiary to the Borrower or any wholly-owned Subsidiary;
(vii) Indebtedness arising from intercompany loans from the
Borrower to Acquisition Corp. to fund the Tender Offer and the Merger;
(viii) secured or unsecured purchase money Indebtedness
(including Capitalized Leases) incurred by the Borrower or any of its
Subsidiaries after the Closing Date to finance the acquisition of fixed
assets, if (1) at the time of such incurrence, no Default or Unmatured
Default has occurred and is continuing or would result from such
incurrence, (2) such Indebtedness has a scheduled maturity and is not
due on demand, (3) such Indebtedness does not exceed the lower of the
fair market value or the cost of the applicable fixed assets on the
date acquired, (4) such Indebtedness does not exceed $2,500,000 in the
aggregate outstanding at any time, and (5) any Lien securing such
Indebtedness is permitted under Section 7.3(C) (such Indebtedness being
referred to herein as "Permitted Purchase Money Indebtedness");
(ix) Indebtedness with respect to surety, appeal and
performance bonds obtained by the Borrower or any of its Subsidiaries
in the ordinary course of business;
(x) Indebtedness incurred subsequent to the Closing Date by
the Borrower or any of its Subsidiaries to the seller in any Permitted
Acquisition as part of the consideration therefor, provided that such
Indebtedness does not exceed $20,000,000 in the aggregate outstanding
at any time, is unsecured and is otherwise on terms acceptable to the
Agent; and
(xi) Indebtedness in respect of Hedging Obligations permitted
under Section 7.3(P).
(B) Sales of Assets. Neither the Borrower nor any of its Subsidiaries
shall sell, assign, transfer, lease, convey or otherwise dispose of any
property, whether now owned
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or hereafter acquired, or any income or profits therefrom, or enter into any
agreement to do so, except:
(i) sales of Inventory in the ordinary course of business;
(ii) the disposition in the ordinary course of business of
equipment that is obsolete, excess or no longer useful in the
Borrower's business; and
(iii) sales, assignments, transfers, leases, conveyances or
other dispositions of other assets (excluding any sales of motor
vehicles) if such transaction (a) is for consideration consisting at
least eighty percent (80%) of cash, (b) is for not less than fair
market value, and (c) when combined with all such other transactions
(each such transaction being valued at book value) (i) during the
immediately preceding twelve-month period, represents the disposition
of not greater than five percent (5.0%) of the Borrower's Consolidated
Assets at the end of the fiscal year immediately preceding that in
which such transaction is proposed to be entered into, and (ii) during
the period from the Closing Date to the date of such proposed
transaction, represents the disposition of not greater than ten percent
(10.0%) of the Borrower's Consolidated Assets at the end of the fiscal
year immediately preceding that in which such transaction is proposed
to be entered into.
(C) Liens. Neither the Borrower nor any of its Subsidiaries shall directly
or indirectly create, incur, assume or permit to exist any Lien on or with
respect to any of their respective property or assets except:
(i) Liens securing the Secured Obligations;
(ii) Permitted Existing Liens;
(iii) Customary Permitted Liens; and
(iv) purchase money Liens (including the interest of a lessor
under a Capitalized Lease and Liens to which any property is subject at
the time of the Borrower's acquisition thereof) securing Permitted
Purchase Money Indebtedness; provided that such Liens shall not apply
to any property of the Borrower or its Subsidiaries other than that
purchased or subject to such Capitalized Lease.
In addition, neither the Borrower nor any of its Subsidiaries shall become a
party to any agreement, note, indenture or other instrument, or take any other
action, which would prohibit the creation of a Lien on any of its properties or
other assets in favor of the Agent for the benefit of itself and the Lenders, as
collateral for the Obligations; provided that any agreement, note, indenture or
other instrument in connection with Permitted Purchase Money Indebtedness
(including Capitalized Leases) may prohibit the creation of a Lien in
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favor of the Agent for the benefit of itself and the Lenders on the items of
property obtained with the proceeds of such Permitted Purchase Money
Indebtedness.
(D) Investments. Except to the extent permitted pursuant to paragraph (G)
below, neither the Borrower nor any of its Subsidiaries shall directly or
indirectly make or own any Investment except:
(i) Investments in Cash Equivalents;
(ii) Permitted Existing Investments in an amount not greater
than the amount thereof on the Closing Date;
(iii) Investments in trade receivables or received in
connection with the bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising in the ordinary course
of business;
(iv) Investments consisting of deposit accounts maintained by
the Borrower;
(v) Investments consisting of non-cash consideration from a
sale, assignment, transfer, lease, conveyance or other disposition of
property permitted by Section 7.3(B);
(vi) Investments consisting of intercompany loans from any
Subsidiary to the Borrower or any other Subsidiary permitted by Section
7.3(A)(vi);
(vii) Investments consisting of intercompany loans from the
Borrower to any wholly-owned Subsidiary permitted by Section
7.3(A)(vii);
(viii) Investments constituting Permitted Acquisitions;
(ix) Investments in addition to those referred to elsewhere in
this Section 7.3(D) in an amount not to exceed $2,000,000 in the
aggregate at any time outstanding;
provided, however, that the Investments described in clause (viii) above shall
not be permitted if either a Default or an Unmatured Default shall have occurred
and be continuing on the date thereof or would result therefrom.
(E) Contingent Obligations. Neither the Borrower nor any of its
Subsidiaries shall directly or indirectly create or become or be liable with
respect to any Contingent Obligation, except: (i) recourse obligations resulting
from endorsement of negotiable instruments for collection in the ordinary course
of business; (ii) obligations, warranties, and indemnities, not relating to
Indebtedness of any Person, which have been or are
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undertaken or made in the ordinary course of business and not for the benefit of
or in favor of an Affiliate of the Borrower or such Subsidiary; (iii) additional
Contingent Obligations which do not exceed $2,000,000 in the aggregate at any
time; and (iv) Contingent Obligations with respect to surety, appeal and
performance bonds obtained by the Borrower or any Subsidiary in the ordinary
course of business.
(F) Restricted Payments. Neither the Borrower nor any of its Subsidiaries
shall declare or make any Restricted Payment except for payments made to LDI,
Ltd. to reimburse LDI, Ltd. for various services and other accommodations
provided to the Borrower by LDI, Ltd.
(G) Conduct of Business; Subsidiaries; Acquisitions. Neither the Borrower
nor any of its Subsidiaries shall engage in any business other than the
businesses engaged in by the Borrower on the date hereof and any business or
activities which are substantially similar, related or incidental thereto. The
Borrower shall not create or acquire any Subsidiary after the date hereof other
than to consummate Permitted Acquisitions, provided that each Subsidiary,
including Subsidiaries acquired in connection with the Tender Offer and the
Merger, shall execute and deliver guaranties and security agreements
satisfactory to the Agent with respect to the Obligations. The Borrower shall
not make any Acquisitions, other than pursuant to the Tender Offer and Merger or
Acquisitions meeting the following requirements or otherwise approved by the
Required Lenders (each such Acquisition constituting a "Permitted Acquisition"):
(i) no Default or Unmatured Default shall have occurred and be
continuing or would result from such Acquisition or the incurrence of
any Indebtedness in connection therewith;
(ii) the Acquisition shall be consummated on a non-hostile
basis pursuant to negotiated acquisition documents satisfactory to the
Agent with representations, indemnities and opinions satisfactory to
the Agent and results of due diligence satisfactory to the Agent and,
in the case of an Acquisition of Equity Interests of an entity, such
Acquisition shall be of not less than one hundred percent (100%) of the
Equity Interests of such entity;
(iii) the businesses being acquired shall be substantially
similar to the businesses or activities engaged in by the Borrower on
the Closing Date;
(iv) prior to each such Acquisition, the Borrower shall
deliver to the Agent and the Lenders a certificate from one of the
Authorized Officers, demonstrating to the satisfaction of the Agent
that after giving effect to such Acquisition and the incurrence of any
Indebtedness permitted by Section 7.3(A) in connection therewith, on a
pro forma basis using the best available financial information
concerning the seller, broken down by fiscal quarter in the Borrower's
reasonable
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judgment, as if the Acquisition and such incurrence of Indebtedness had
occurred on the first day of the twelve-month period ending on the last
day of the Borrower's most recently completed fiscal quarter, the
Borrower would have been in compliance with the financial covenants in
Section 7.4 and will be in compliance with such covenants through the
first anniversary of such Acquisition;
(v) the aggregate purchase price (including assumed
liabilities) in connection with all such transactions from and after
the Closing Date (excluding the Tender Offer and the Merger and also
excluding a potential transaction previously disclosed to the Agent
provided the consideration paid by the Borrower consists exclusively of
Equity Interests of the Borrower) shall not exceed $20,000,000; not
more than $10,000,000 of such aggregate purchase price shall be payable
at the close of such Acquisitions in cash, provided, however, that the
$20,000,000 and $10,000,000 limitations prescribed in this Section
7.3(G)(v) shall be increased to $40,000,000 and $20,000,000,
respectively, after the Borrower has delivered financial statements in
accordance with Section 7.1(A) which indicate a Leverage Ratio of less
than 3.00 to 1.00 or, if the Borrower has issued Subordinated Notes
pursuant to the High Yield Note Agreement, a Leverage Ratio of 3.50 to
1.00; and
(vi) any Acquisition involving a purchase price in excess of
$5,000,000 shall be subject to the prior approval of the Required
Lenders which approval shall be granted or denied within fifteen (15)
Business Days following the Borrower's written request for such
approval which request will contain sufficient information for the
Lenders to assess the Borrower's ability to comply with clause (iv)
above (but if the Agent or the Lenders fail to respond within such
period, approval shall be deemed to have been denied).
(H) Transactions with Shareholders and Affiliates. Neither the Borrower
nor any of its Subsidiaries shall directly or indirectly enter into or permit to
exist any transaction (including, without limitation, the purchase, sale, lease
or exchange of any property or the rendering of any service) with any holder or
holders of any of the Equity Interests of the Borrower, or with any Affiliate of
the Borrower which is not its Subsidiary, on terms that are less favorable to
the Borrower or any of its Subsidiaries, as applicable, than those that might be
obtained in an arm's length transaction at the time from Persons who are not
such a holder or Affiliate, except for Restricted Payments permitted by Section
7.3(F).
(I) Restriction on Fundamental Changes. Neither the Borrower nor any of
its Subsidiaries shall enter into any merger or consolidation, or liquidate,
wind-up or dissolve (or suffer any liquidation or dissolution), or convey,
lease, sell, transfer or otherwise dispose of, in one transaction or series of
transactions, all or substantially all of the Borrower's or any such
Subsidiary's business or property, whether now or hereafter acquired, except
transactions permitted under Sections 7.3(B) or 7.3(G) and the Tender Offer and
Merger.
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(J) Sales and Leasebacks. Neither the Borrower nor any of its Subsidiaries
shall become liable, directly, by assumption or by Contingent Obligation, with
respect to any lease, whether an operating lease, a synthetic lease or a
Capitalized Lease, of any property (whether real or personal or mixed) (i) which
it or one of its Subsidiaries sold or transferred or is to sell or transfer to
any other Person, or (ii) which it or one of its Subsidiaries intends to use for
substantially the same purposes as any other property which has been or is to be
sold or transferred by it or one of its Subsidiaries to any other Person in
connection with such lease, unless in either case the sale involved is not
prohibited under Section 7.3(B) and the lease involved is not prohibited under
Section 7.3(A) and excluding any sale and leaseback transactions involving motor
vehicles.
(K) Margin Regulations. Neither the Borrower nor any of its Subsidiaries,
shall use all or any portion of the proceeds of any credit extended under this
Agreement in violation of Regulations G, T or X.
(L) ERISA. The Borrower shall not
(i) engage, or permit any of its Subsidiaries to engage, in
any prohibited transaction described in Sections 406 of ERISA or 4975
of the Code for which a statutory or class exemption is not available
or a private exemption has not been previously obtained from the DOL
which could reasonably be expected to result in liability to the
Borrower of $1,000,000 or more;
(ii) permit to exist any accumulated funding deficiency (as
defined in Sections 302 of ERISA and 412 of the Code) of $1,000,000 or
more, with respect to any Benefit Plan, whether or not waived;
(iii) fail, or permit any Controlled Group member to fail to
pay timely required contributions or annual installments due with
respect to any waived funding deficiency to any Benefit Plan which
failure could reasonably be expected to result in liability to the
Borrower of $1,000,000 or more;
(iv) terminate, or permit any Controlled Group member to
terminate, any Benefit Plan which would result in liability of the
Borrower or any Controlled Group member under Title IV of ERISA of
$1,000,000 or more;
(v) fail to make any material contribution or payment to any
Multiemployer Plan which the Borrower or any Controlled Group member
may be required to make under any agreement relating to such
Multiemployer Plan, or any law pertaining thereto;
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(vi) fail, or permit any Controlled Group member to fail, to
pay any required installment or any other material payment required
under Section 412 of the Code on or before the due date for such
installment or other payment; or
(vii) amend, or permit any Controlled Group member to amend, a
Plan resulting in a material increase in current liability for the plan
year such that the Borrower or any Controlled Group member is required
to provide security to such Plan under Section 401(a)(29) of the Code.
(M) Corporate Documents. Neither the Borrower nor any of its Subsidiaries
shall amend, modify or otherwise change any of the terms or provisions in any of
their respective Articles or Certificates of Incorporation or By-Laws as in
effect on the date hereof in any manner adverse to the interests of the Lenders,
without the prior written consent of the Required Lenders.
(N) Fiscal Year. Neither the Borrower nor any of its consolidated
Subsidiaries shall change its fiscal year for accounting or tax purposes from a
period consisting of the 12-month period ending on the last day or the last
Friday before the last day of December of each year.
(O) Subsidiary Covenants. The Borrower will not, and will not permit any
Subsidiary to, create or otherwise cause to become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary to pay
dividends or make any other distribution on its stock, or make any other
Restricted Payment, pay any Indebtedness or other Obligation owed to the
Borrower or any other Subsidiary, make loans or advances or other Investments in
the Borrower or any other Subsidiary, or sell, transfer or otherwise convey any
of its property to the Borrower or any other Subsidiary.
(P) Hedging Obligations. The Borrower shall not and shall not permit any
of its Subsidiaries to enter into any interest rate, commodity or foreign
currency exchange, swap, collar, cap or similar agreements evidencing Hedging
Obligations, other than interest rate, foreign currency or commodity exchange,
swap, collar, cap or similar agreements entered into by the Borrower pursuant to
which the Borrower has hedged its actual interest rate, foreign currency or
commodity exposure. Such permitted hedging agreements entered into by the
Borrower and any Lender or any affiliate of any Lender to hedge floating
interest rate risk in an aggregate notional amount not to exceed at any time an
amount equal to the outstanding balance of the Term Loans at such time are
sometimes referred to herein as "Interest Rate Agreements."
7.4 Financial Covenants. The Borrower shall comply with the following:
(A) Minimum Fixed Charge Coverage Ratio. The Borrower and its consolidated
Subsidiaries shall maintain a ratio ("Fixed Charge Coverage Ratio") of (i) the
sum of the
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amounts of (a) EBITDA minus (b) Capital Expenditures to (ii) the sum of the
amounts of (a) Interest Expense plus (b) scheduled amortization payments of the
principal portion of the Term Loans and scheduled amortization payments of the
principal portion of all other Indebtedness for borrowed money of the Borrower
made during such period plus (c) cash taxes paid by the Borrower and its
consolidated Subsidiaries during such period plus (d) Restricted Payments paid
during such period of at least:
(i) 1.05 to 1.00 for each fiscal quarter for the period
commencing with the fiscal quarter ending March 31, 1998 through the
fiscal quarter ending September 30, 2000; and
(ii) 1.10 to 1.00 for each fiscal quarter thereafter until the
Termination Date.
In each case, the Fixed Charge Coverage Ratio shall be determined as of the last
day of each fiscal quarter for the four fiscal quarter period ending on such
day, calculated, with respect to Permitted Acquisitions, on a pro forma basis
using the best available financial information concerning the seller, broken
down by fiscal quarter in the Borrower's reasonable judgment (provided, however,
(a) for the fiscal quarter ending March 31, 1998, the Fixed Charge Coverage
Ratio shall be calculated using EBITDA, Capital Expenditures, Rentals, Interest
Expense, taxes paid, Restricted Payments paid and scheduled amortization for the
one fiscal quarter ending March 31, 1998, (b) for the fiscal quarter ending June
30, 1998, the Fixed Charge Coverage Ratio shall be calculated using such items
for the two fiscal quarter period ending June 30, 1998 and (c) for the fiscal
quarter ending September 30, 1998, the Fixed Charge Coverage Ratio shall be
calculated using such items for the three fiscal quarter period ending September
30, 1998).
(B) Maximum Leverage Ratio. The Borrower shall not permit the ratio (the
"Leverage Ratio") of (i) the sum of (a) Indebtedness for borrowed money and (b)
Capitalized Lease Obligations to (ii) EBITDA to be greater than the ratio set
forth below at the end of the fiscal quarter ending on the corresponding date
set forth below:
Quarter Ending Ratio
March 31, 1998 5.00 to 1.00
June 30, 1998 4.80 to 1.00
September 30, 1998 4.75 to 1.00
December 31, 1998 4.75 to 1.00
March 31, 1999 4.75 to 1.00
June 30, 1999 4.40 to 1.00
September 30, 1999 4.25 to 1.00
December 31, 1999 4.25 to 1.00
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March 31, 2000 4.00 to 1.00
June 30, 2000 4.00 to 1.00
September 30, 2000 3.75 to 1.00
December 31, 2000 3.75 to 1.00
March 31, 2001 3.75 to 1.00
June 30, 2001 3.50 to 1.00
September 30, 2001 3.50 to 1.00
December 31, 2001 3.50 to 1.00
March 31, 2002 3.50 to 1.00
June 30, 2002 3.25 to 1.00
September 30, 2002 3.25 to 1.00
December 31, 2002 3.25 to 1.00
March 31, 2003 3.25 to 1.00
June 30, 2003 3.00 to 1.00
September 30, 2003 3.00 to 1.00
and each quarter
thereafter
The Leverage Ratio shall be calculated, in each case, determined as of the last
day of each fiscal quarter based upon (a) for Indebtedness for borrowed money
and Capitalized Lease Obligations, Indebtedness for borrowed money and
Capitalized Lease Obligations as of the last day of each such fiscal quarter;
and (b) for EBITDA, the actual amount for the four-quarter period ending on such
day, calculated, with respect to Permitted Acquisitions, on a pro forma basis
using the best available financial information concerning the seller, broken
down by fiscal quarter in the Borrower's reasonable judgment (provided, however,
(a) for the fiscal quarter ending March 31, 1998, the Leverage Ratio shall be
calculated using EBITDA for the fiscal quarter ending March 31, 1998 multiplied
by four, (b) for the fiscal quarter ending June 30, 1998, the Leverage Ratio
shall be calculated using EBITDA for the two fiscal quarter period ending June
30, 1998 multiplied by two , and (c) for the fiscal quarter ending September 30,
1998, the Leverage Ratio shall be calculated using EBITDA for the three fiscal
quarter period ending September 30, 1998 multiplied by four-thirds).
(C) Minimum Consolidated Net Worth. The Borrower shall not permit its
Consolidated Net Worth at any time to be less than the sum of (a) $27,500,000
plus (b) fifty percent (50%) of Net Income (if positive) calculated separately
for each fiscal quarter ending after December 31, 1997, plus (c) one hundred
percent (100%) of the net cash proceeds resulting from the issuance by the
Borrower of any Capital Stock, plus (d) the Consolidated Net Worth of any Person
whose Capital Stock is contributed to the capital of the Borrower.
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(D) Interest Expense Coverage Ratio. The Borrower shall maintain a ratio
(the "Interest Expense Coverage Ratio") of (i) EBITDA to (ii) Interest Expense
during each four fiscal quarter period ending on the date described below of at
least:
Quarter Ending Ratio
March 31, 1998 2.00 to 1.0
June 30, 1998 2.00 to 1.0
September 30, 1998 2.00 to 1.0
December 31, 1998 2.00 to 1.0
March 31, 1999 2.25 to 1.0
June 30, 1993 2.25 to 1.0
September 30, 1999 2.25 to 1.0
December 31, 1999 2.25 to 1.0
March 31, 2000 2.50 to 1.0
June 30, 2000 2.50 to 1.0
September 30, 2000 2.50 to 1.0
December 31, 2000 2.50 to 1.0
March 31, 2001 2.50 to 1.0
June 30, 2001 2.50 to 1.0
September 30, 2001 2.50 to 1.0
December 31, 2001 2.50 to 1.0
March 31, 2002 2.75 to 1.0
June 30, 2002 2.75 to 1.0
September 30, 2002 2.75 to 1.0
December 31, 2002 2.75 to 1.0
March 31, 2003 3.00 to 1.0
June 30, 2003 3.00 to 1.0
September 30, 2003
and each quarter
thereafter 3.00 to 1.0
In each case, the Interest Expense Coverage Ratio shall be determined as of the
last day of each fiscal quarter described above for the four fiscal quarter
period ending on such day, calculated, with respect to Permitted Acquisitions,
on a pro forma basis using the best available financial information concerning
the seller, broken down by fiscal quarter in the Borrower's reasonable judgment
(provided, however, (a) for the fiscal quarter ending March 31, 1998, the
Interest Expense Coverage Ratio shall be calculated using EBITDA
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and Interest Expense for the one fiscal quarter ending March 31, 1998, (b) for
the fiscal quarter ending June 30, 1998, the Interest Expense Coverage Ratio
shall be calculated using such items for the two fiscal quarter period ending
June 30, 1998 and (c) for the fiscal quarter ending September 30, 1998, the
Interest Expense Coverage Ratio shall be calculated using such items for the
three fiscal quarter period ending September 30, 1998).
ARTICLE VIII: DEFAULTS
8.1 Defaults. Each of the following occurrences shall constitute a Default
under this Agreement:
(A) Failure to Make Payments When Due. The Borrower shall (i) fail to pay
when due any of the Obligations consisting of principal with respect to the
Loans or (ii) shall fail to pay within three (3) Business Days of the date when
due any of the other Obligations under this Agreement or the other Loan
Documents.
(B) Breach of Certain Covenants. The Borrower shall fail duly and
punctually to perform or observe any agreement, covenant or obligation binding
on the Borrower under:
(i) Section 7.1(C) through and including 7.1(I), 7.2(B) or
7.2(F) and such failure shall continue unremedied for ten (10) Business
Days;
(ii) Sections 7.1(A), 7.1(B), 7.2(A), 7.2(C), 7.2(D), 7.2(E)
and 7.2(G) through and including 7.2(L) and such failure shall continue
unremedied for five (5) Business Days; or
(iii) Section 7.3 or 7.4.
(C) Breach of Representation or Warranty. Any representation or warranty
made or deemed made by the Borrower to the Agent or any Lender herein or by the
Borrower or any of its Subsidiaries in any of the other Transaction Documents or
in any statement or certificate at any time given by any such Person pursuant to
any of the Loan Documents shall be false or misleading in any material respect
on the date as of which made (or deemed made).
(D) Other Defaults. The Borrower shall default in the performance of or
compliance with any term contained in this Agreement (other than as covered by
paragraphs (A), (B) or (C) of this Section 8.1), or the Borrower or any of its
Subsidiaries shall default in the performance of or compliance with any term
contained in any of the other Transaction Documents, and such default shall
continue for thirty (30) days after the occurrence thereof.
(E) Default as to Other Indebtedness. The Borrower or any of its
Subsidiaries shall fail to make any payment when due (whether by scheduled
maturity, required prepayment,
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acceleration, demand or otherwise) with respect to any Indebtedness the
outstanding principal amount of which Indebtedness is in excess of $2,500,000
("Cross Default Indebtedness"), or any breach, default or event of default shall
occur, or any other condition shall exist under any instrument, agreement or
indenture pertaining to any such Cross Default Indebtedness, if the effect
thereof is to cause an acceleration, mandatory redemption, a requirement that
the Borrower offer to purchase such Cross Default Indebtedness or other required
repurchase of such Cross Default Indebtedness, or permit the holder(s) of such
Cross Default Indebtedness to accelerate the maturity of any such Cross Default
Indebtedness or require a redemption or other repurchase of such Cross Default
Indebtedness; or any such Cross Default Indebtedness shall be otherwise declared
to be due and payable (by acceleration or otherwise) or required to be prepaid,
redeemed or otherwise repurchased by the Borrower or any of its Subsidiaries
(other than by a regularly scheduled required prepayment) prior to the stated
maturity thereof.
(F) Involuntary Bankruptcy; Appointment of Receiver, Etc.
(i) An involuntary case shall be commenced against the
Borrower or any of the Borrower's Subsidiaries and the petition shall
not be dismissed, stayed, bonded or discharged within sixty (60) days
after commencement of the case; or a court having jurisdiction in the
premises shall enter a decree or order for relief in respect of the
Borrower or any of the Borrower's Subsidiaries in an involuntary case,
under any applicable bankruptcy, insolvency or other similar law now or
hereinafter in effect; or any other similar relief shall be granted
under any applicable federal, state, local or foreign law.
(ii) A decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator,
trustee, custodian or other officer having similar powers over the
Borrower or any of the Borrower's Subsidiaries or over all or a
substantial part of the property of the Borrower or any of the
Borrower's Subsidiaries shall be entered; or an interim receiver,
trustee or other custodian of the Borrower or any of the Borrower's
Subsidiaries or of all or a substantial part of the property of the
Borrower or any of the Borrower's Subsidiaries shall be appointed or a
warrant of attachment, execution or similar process against any
substantial part of the property of the Borrower or any of the
Borrower's Subsidiaries shall be issued and any such event shall not be
stayed, dismissed, bonded or discharged within sixty (60) days after
entry, appointment or issuance.
(G) Voluntary Bankruptcy; Appointment of Receiver, Etc. The Borrower or
any of the Borrower's Subsidiaries shall (i) commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, (ii) consent to the entry of an order for relief in an involuntary case,
or to the conversion of an involuntary case to a voluntary case, under any such
law, (iii) consent to the appointment of or taking
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possession by a receiver, trustee or other custodian for all or a substantial
part of its property, (iv) make any assignment for the benefit of creditors or
(v) take any corporate action to authorize any of the foregoing.
(H) Judgments and Attachments. Any money judgment(s) (other than a money
judgment covered by insurance as to which the insurance company has not
disclaimed or reserved the right to disclaim coverage), writ or warrant of
attachment, or similar process against the Borrower or any of its Subsidiaries
or any of their respective assets involving in any single case or in the
aggregate an amount in excess of $2,500,000 is or are entered and shall remain
undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days or
in any event later than fifteen (15) days prior to the date of any proposed sale
thereunder.
(I) Dissolution. Any order, judgment or decree shall be entered against
the Borrower decreeing its involuntary dissolution or split up and such order
shall remain undischarged and unstayed for a period in excess of sixty (60)
days; or the Borrower shall otherwise dissolve or cease to exist except as
specifically permitted by this Agreement.
(J) Loan Documents. At any time, for any reason, any Loan Document as a
whole that materially affects the ability of the Agent, or any of the Lenders to
enforce the Obligations ceases to be in full force and effect or the Borrower or
any of the Borrower's Subsidiaries party thereto seeks to repudiate its
obligations thereunder.
(K) Termination Event. Any Termination Event occurs which the Required
Lenders believe is reasonably likely to subject the Borrower to liability in
excess of $2,000,000.
(L) Waiver of Minimum Funding Standard. If the plan administrator of any
Plan applies under Section 412(d) of the Code for a waiver of the minimum
funding standards of Section 412(a) of the Code and any Lender believes the
substantial business hardship upon which the application for the waiver is based
could reasonably be expected to subject either the Borrower or any Controlled
Group member to liability in excess of $2,000,000.
(M) Change of Control. A Change of Control shall occur.
(N) Interest Rate Agreements. Nonpayment by the Borrower of any obligation
under any Interest Rate Agreement or the breach by the Borrower of any term,
provision or condition contained in any such Interest Rate Agreement in either
case which could reasonably be expected to result in liability in excess of
$2,500,000.
(O) Environmental Matters. The Borrower or any of its Subsidiaries shall
be the subject of any proceeding or investigation pertaining to (i) the Release
by the Borrower or any of its Subsidiaries of any Contaminant into the
environment, (ii) the liability of the Borrower or any of its Subsidiaries
arising from the Release by any other Person of any Contaminant into the
environment, or (iii) any violation of any Environmental, Health or
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Safety Requirements of Law which by the Borrower or any of its Subsidiaries,
which, in any case, has or is reasonably likely to subject the Borrower to
liability in excess of $1,000,000.
A Default shall be deemed "continuing" until cured or until waived in
writing in accordance with Section 9.3.
ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS,
AMENDMENTS AND REMEDIES
9.1 Termination of Commitments; Acceleration. If any Default described in
Section 8.1(F) or 8.1(G) occurs with respect to the Borrower, the obligations of
the Lenders to make Loans hereunder and the obligation of the Agent to issue
Letters of Credit hereunder shall automatically terminate and the Obligations
shall immediately become due and payable without any election or action on the
part of the Agent or any Lender. If any other Default occurs, the Required
Lenders may terminate or suspend the obligations of the Lenders to make Loans
hereunder and the obligation of the Issuing Banks to issue Letters of Credit
hereunder, or declare the Obligations to be due and payable, or both, whereupon
the Obligations shall become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which the Borrower expressly
waives.
9.2 Defaulting Lender. In the event that any Lender fails to fund its Pro
Rata Share of any Advance requested or deemed requested by the Borrower, which
such Lender is obligated to fund under the terms of this Agreement (the funded
portion of such Advance being hereinafter referred to as a "Non Pro Rata Loan"),
until the earlier of such Lender's cure of such failure and the termination of
the Revolving Loan Commitments, the proceeds of all amounts thereafter repaid to
the Agent by the Borrower and otherwise required to be applied to such Lender's
share of all other Obligations pursuant to the terms of this Agreement shall be
advanced to the Borrower by the Agent on behalf of such Lender to cure, in full
or in part, such failure by such Lender, but shall nevertheless be deemed to
have been paid to such Lender in satisfaction of such other Obligations.
Notwithstanding anything in this Agreement to the contrary:
(i) the foregoing provisions of this Section 9.2 shall apply
only with respect to the proceeds of payments of Obligations and shall
not affect the conversion or continuation of Loans pursuant to Section
2.10;
(ii) any such Lender shall be deemed to have cured its failure
to fund its Pro Rata Share of any Advance at such time as an amount
equal to such Lender's original Pro Rata Share of the requested
principal portion of such Advance is fully funded to the Borrower,
whether made by such Lender itself or by operation of the terms of this
Section 9.2, and whether or not the Non Pro Rata Loan with respect
thereto has been repaid, converted or continued;
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(iii) amounts advanced to the Borrower to cure, in full or in
part, any such Lender's failure to fund its Pro Rata Share of any
Advance ("Cure Loans") shall bear interest at the rate applicable to
Floating Rate Loans in effect from time to time, and for all other
purposes of this Agreement shall be treated as if they were Floating
Rate Loans;
(iv) regardless of whether or not a Default has occurred or is
continuing, and notwithstanding the instructions of the Borrower as to
its desired application, all repayments of principal which, in
accordance with the other terms of this Agreement, would be applied to
the outstanding Floating Rate Loans shall be applied first, ratably to
all Floating Rate Loans constituting Non Pro Rata Loans, second,
ratably to Floating Rate Loans other than those constituting Non Pro
Rata Loans or Cure Loans and, third, ratably to Floating Rate Loans
constituting Cure Loans;
(v) for so long as and until the earlier of any such Lender's
cure of the failure to fund its Pro Rata Share of any Advance and the
termination of the Revolving Loan Commitments, the term "Required
Lenders" for purposes of this Agreement shall mean Lenders (excluding
all Lenders whose failure to fund their respective Pro Rata Shares of
such Advance have not been so cured) whose Pro Rata Shares represent
greater than fifty percent (50%) of the aggregate Pro Rata Shares of
such Lenders; and
(vi) for so long as and until any such Lender's failure to
fund its Pro Rata Share of any Advance is cured in accordance with
Section 9.2(ii), (A) such Lender shall not be entitled to any
commitment fees with respect to its Revolving Loan Commitment and (B)
such Lender shall not be entitled to any letter of credit fees, which
commitment fees and letter of credit fees shall accrue in favor of the
Lenders which have funded their respective Pro Rata Share of such
requested Advance, shall be allocated among such performing Lenders
ratably based upon their relative Revolving Loan Commitments, and shall
be calculated based upon the average amount by which the aggregate
Revolving Loan Commitments of such performing Lenders exceeds the sum
of (I) the outstanding principal amount of the Loans owing to such
performing Lenders, plus (II) the outstanding Reimbursement Obligations
owing to such performing Lenders, plus (III) the aggregate
participation interests of such performing Lenders arising pursuant to
Section 3.6 with respect to undrawn and outstanding Letters of Credit.
9.3 Amendments. Subject to the provisions of this Article IX, the Required
Lenders (or the Agent with the consent in writing of the Required Lenders) and
the Borrower may enter into agreements supplemental hereto for the purpose of
adding or modifying any provisions to the Loan Documents or changing in any
manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
without the consent of each Lender affected thereby:
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(i) Postpone or extend the Revolving Loan Termination Date or
Term Loan Termination Date or any other date fixed for any payment of
principal of, or interest on, the Loans, the Reimbursement Obligations
or any fees or other amounts payable to such Lender (except with
respect to (a) any modifications of the provisions relating to
prepayments of Loans and other Obligations and (b) a waiver of the
application of the default rate of interest pursuant to Section 2.11
hereof).
(ii) Reduce the principal amount of any Loans or L/C
Obligations, or reduce the rate or extend the time of payment of
interest or fees thereon.
(iii) Reduce the percentage specified in the definition of
Required Lenders or any other percentage of Lenders specified to be the
applicable percentage in this Agreement to act on specified matters.
(iv) Increase the amount of the Revolving Loan Commitment of
any Lender hereunder.
(v) Permit the Borrower to assign its rights under this
Agreement.
(vi) Release all or substantially all of the Collateral.
(vii) Amend this Section 9.3.
No amendment of any provision of this Agreement relating to (a) the Agent shall
be effective without the written consent of the Agent, and (b) Swing Line Loans
shall be effective without the written consent of the Swing Line Bank. The Agent
may waive payment of the fee required under Section 13.3(B) without obtaining
the consent of any of the Lenders.
9.4 Preservation of Rights. No delay or omission of the Lenders or the
Agent to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan or the issuance of a Letter of Credit notwithstanding the
existence of a Default or the inability of the Borrower to satisfy the
conditions precedent to such Loan or issuance of such Letter of Credit shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Lenders required pursuant to Section 9.3, and then only
to the extent in such writing specifically set forth. All remedies contained in
the Loan Documents or by law afforded shall be cumulative and all shall be
available to the Agent and the Lenders until the Obligations have been paid in
full.
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ARTICLE X: GENERAL PROVISIONS
10.1 Survival of Representations. All representations and warranties of
the Borrower contained in this Agreement shall survive delivery of the Notes and
the making of the Loans herein contemplated.
10.2 Governmental Regulation. Anything contained in this Agreement to the
contrary notwithstanding, no Lender shall be obligated to extend credit to the
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
10.3 Performance of Obligations. The Borrower agrees that the Agent may,
but shall have no obligation, after the occurrence and during the continuance of
a Default, to make any other payment or perform any act required of the Borrower
under any Loan Document. The Agent shall use its reasonable efforts to give the
Borrower notice of any action taken under this Section 10.3 prior to the taking
of such action or promptly thereafter provided the failure to give such notice
shall not affect the Borrower's obligations in respect thereof. The Borrower
agrees to pay the Agent, upon demand, the principal amount of all funds advanced
by the Agent under this Section 10.3, together with interest thereon at the rate
from time to time applicable to Floating Rate Loans from the date of such
advance until the outstanding principal balance thereof is paid in full. If the
Borrower fails to make payment in respect of any such advance under this Section
10.3 within one (1) Business Day after the date the Borrower receives written
demand therefor from the Agent, the Agent shall promptly notify each Lender and
each Lender agrees that it shall thereupon make available to the Agent, in
Dollars in immediately available funds, the amount equal to such Lender's Pro
Rata Share of such advance. If such funds are not made available to the Agent by
such Lender within one (1) Business Day after the Agent's demand therefor, the
Agent will be entitled to recover any such amount from such Lender together with
interest thereon at the Federal Funds Effective Rate for each day during the
period commencing on the date of such demand and ending on the date such amount
is received. The failure of any Lender to make available to the Agent its Pro
Rata Share of any such unreimbursed advance under this Section 10.3 shall
neither relieve any other Lender of its obligation hereunder to make available
to the Agent such other Lender's Pro Rata Share of such advance on the date such
payment is to be made nor increase the obligation of any other Lender to make
such payment to the Agent. All outstanding principal of, and interest on,
advances made under this Section 10.3 shall constitute Obligations.
10.4 Headings. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
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10.5 Entire Agreement. The Loan Documents embody the entire agreement and
understanding among the Borrower, the Agent and the Lenders and supersede all
prior agreements and understandings among the Borrower, the Agent and the
Lenders relating to the subject matter thereof.
10.6 Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other Lender (except to the extent to which
the Agent is authorized to act as such). The failure of any Lender to perform
any of its obligations hereunder shall not relieve any other Lender from any of
its obligations hereunder. This Agreement shall not be construed so as to confer
any right or benefit upon any Person other than the parties to this Agreement
and their respective successors and assigns.
10.7 Expenses; Indemnification.
(A) Expenses. The Borrower shall reimburse the Agent and the Arranger for
any reasonable costs, charges for internal legal services and out-of-pocket
expenses (including attorneys' and paralegals' fees and time charges of
attorneys and paralegals for the Agent, which attorneys and paralegals may be
employees of the Agent) paid or incurred by the Agent or the Arranger in
connection with the preparation, negotiation, execution, delivery, syndication,
review, amendment, modification, and administration of the Loan Documents. The
Borrower also agrees to reimburse the Agent and the Arranger and the Lenders for
any costs, internal charges and out-of-pocket expenses (including attorneys' and
paralegals' fees and time charges of attorneys and paralegals for the Agent and
the Arranger and the Lenders, which attorneys and paralegals may be employees of
the Agent or the Arranger or the Lenders) paid or incurred by the Agent or the
Arranger or any Lender in connection with the collection of the Obligations and
enforcement of the Loan Documents. In addition to expenses set forth above, the
Borrower agrees to reimburse the Agent, promptly after the Agent's request
therefor, for each audit, or other business analysis performed by or for the
benefit of the Lenders in connection with this Agreement or the other Loan
Documents in an amount equal to the Agent's then customary charges for each
person employed to perform such audit or analysis up to an amount not to exceed
$10,000 per audit, plus all costs and expenses (including without limitation,
travel expenses) incurred by the Agent in the performance of such audit or
analysis, provided, however, the Borrower shall be obligated to reimburse the
Agent for not more than two such audits between the Closing Date and the first
anniversary thereof and one such audit in any twelve-month period thereafter if
any such audit is conducted at a time when no Default has occurred and is
continuing, it being understood that the Borrower shall be obligated to
reimburse the Agent for any such audits conducted after a Default has occurred
and is continuing and to do so without application of the $10,000 maximum
prescribed above. Agent shall provide the Borrower with a detailed statement of
all reimbursements requested under this Section 10.7(A).
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(B) Indemnity. The Borrower further agrees to defend, protect, indemnify,
and hold harmless the Agent, the Arranger and each and all of the Lenders and
each of their respective Affiliates, and each of such Agent's, Arranger's,
Lender's, or Affiliate's respective officers, directors, employees, attorneys
and agents (including, without limitation, those retained in connection with the
satisfaction or attempted satisfaction of any of the conditions set forth in
Article V) (collectively, the "Indemnitees") from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses of any kind or nature whatsoever (including, without
limitation, the fees and disbursements of counsel for such Indemnitees in
connection with any investigative, administrative or judicial proceeding,
whether or not such Indemnitees shall be designated a party thereto), imposed
on, incurred by, or asserted against such Indemnitees in any manner relating to
or arising out of:
(i) this Agreement, the other Transaction Documents, or any
act, event or transaction related or attendant thereto or to the making
of the Loans, including, without limitation, the Tender Offer or the
Merger, and the issuance of and participation in Letters of Credit
hereunder, the management of such Loans or Letters of Credit, the use
or intended use of the proceeds of the Loans or Letters of Credit
hereunder, or any of the other transactions contemplated by the Loan
Documents; or
(ii) any liabilities, obligations, responsibilities, losses,
damages, personal injury, death, punitive damages, economic damages,
consequential damages, treble damages, intentional, willful or wanton
injury, damage or threat to the environment, natural resources or
public health or welfare, costs and expenses (including, without
limitation, attorney, expert and consulting fees and costs of
investigation, feasibility or remedial action studies), fines,
penalties and monetary sanctions, interest, direct or indirect, known
or unknown, absolute or contingent, past, present or future relating to
violation of any Environmental, Health or Safety Requirements of Law
arising from or in connection with the past, present or future
operations of the Borrower, its Subsidiaries or any of their respective
predecessors in interest, or, the past, present or future
environmental, health or safety condition of any respective property of
the Borrower or its Subsidiaries, the presence of asbestos-containing
materials at any respective property of the Borrower or its
Subsidiaries or the Release or threatened Release of any Contaminant
into the environment (collectively, the "Indemnified Matters");
provided, however, the Borrower shall have no obligation to an Indemnitee
hereunder with respect to Indemnified Matters caused solely by or resulting
solely from the willful misconduct or Gross Negligence of such Indemnitee or
breach of contract by such Indemnitee with respect to the Loan Documents, in
each case, as determined by the final non-appealed judgment of a court of
competent jurisdiction. If the undertaking to indemnify, pay and hold harmless
set forth in the preceding sentence may be unenforceable
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because it is violative of any law or public policy, the Borrower shall
contribute the maximum portion which it is permitted to pay and satisfy under
applicable law, to the payment and satisfaction of all Indemnified Matters
incurred by the Indemnitees.
(C) Waiver of Certain Claims; Settlement of Claims. The Borrower further
agrees not to assert claims against any of the Indemnitees on any theory of
liability for consequential, special, indirect, exemplary or punitive damages in
excess of $1,000,000 in the aggregate with respect to all such claims against
any or all of such Indemnities. No settlement shall be entered into by the
Borrower or any if its Subsidiaries with respect to any claim, litigation,
arbitration or other proceeding relating to or arising out of the transactions
evidenced by this Agreement or the other Loan Documents or in connection with
the Tender Offer or Merger (whether or not the Agent or any Lender or any
Indemnitee is a party thereto) unless such settlement releases all Indemnitees
from any and all liability with respect thereto.
(D) Survival of Agreements. The obligations and agreements of the Borrower
under this Section 10.7 shall survive the termination of this Agreement.
10.8 Numbers of Documents. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Agent with sufficient counterparts
so that the Agent may furnish one to each of the Lenders.
10.9 Accounting. Except as provided to the contrary herein, all accounting
terms used herein shall be interpreted and all accounting determinations
hereunder shall be made in accordance with Agreement Accounting Principles. If
any changes in generally accepted accounting principles are hereafter required
or permitted and are adopted by the Borrower with the agreement of its
independent public accountants and such changes result in a change in the method
of calculation of any of the financial covenants, restrictions or standards
herein or in the related definitions or terms used therein ("Accounting
Changes"), the parties hereto agree to enter into negotiations, in good faith,
in order to amend such provisions in a credit neutral manner so as to reflect
equitably such Accounting Changes with the desired result that the criteria for
evaluating the Borrower's financial condition shall be the same after such
changes as if such changes had not been made; provided, however, until such
provisions are amended in a manner reasonably satisfactory to the Agent and the
Required Lenders, no Accounting Change shall be given effect in such
calculations and all financial statements and reports required to be delivered
hereunder shall be prepared in accordance with Agreement Accounting Principles
without taking into account such Accounting Changes. In the event such amendment
is entered into with respect to any Accounting Changes, all references to this
Agreement to Agreement Accounting Principles shall mean generally accepted
accounting principles as of the date of such amendment.
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10.10 Severability of Provisions. Any provision in any Loan Document that
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
10.11 Nonliability of Lenders. The relationship between the Borrower and
the Lenders and the Agent shall be solely that of borrower and lender. Neither
the Agent nor any Lender shall have any fiduciary responsibilities to the
Borrower. Neither the Agent nor any Lender undertakes any responsibility to the
Borrower to review or inform the Borrower of any matter in connection with any
phase of the Borrower's business or operations.
10.12 GOVERNING LAW. ANY DISPUTE BETWEEN THE BORROWER AND THE AGENT OR THE
ARRANGER OR ANY LENDER ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL
TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT,
EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS
(WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF INDIANA.
10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
(A) JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B), EACH OF THE
PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, MAY BE RESOLVED EXCLUSIVELY BY
STATE OR FEDERAL COURTS LOCATED IN INDIANAPOLIS, INDIANA, BUT THE PARTIES HERETO
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF INDIANAPOLIS, INDIANA. EACH OF THE PARTIES HERETO WAIVES IN
ALL DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY
HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. THE BORROWER AGREES THAT THE AGENT,
OR ANY LENDER SHALL HAVE THE RIGHT TO PROCEED AGAINST THE
BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE
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SUCH PERSON TO (1) OBTAIN PERSONAL JURISDICTION OVER THE BORROWER OR (2) REALIZE
ON ANY SECURITY FOR THE OBLIGATIONS OR TO ENFORCE A JUDGMENT OR OTHER COURT
ORDER ENTERED IN FAVOR OF SUCH PERSON. THE BORROWER AGREES THAT IT WILL NOT
ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY SUCH PERSON TO
REALIZE ON ANY SECURITY FOR THE OBLIGATIONS OR TO ENFORCE A JUDGMENT OR OTHER
COURT ORDER IN FAVOR OF SUCH PERSON. THE BORROWER WAIVES ANY OBJECTION THAT IT
MAY HAVE TO THE LOCATION OF THE COURT IN WHICH SUCH PERSON HAS COMMENCED A
PROCEEDING DESCRIBED IN THIS SUBSECTION (B).
(C) VENUE. THE BORROWER IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
IN ANY JURISDICTION SET FORTH ABOVE.
(D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
ARTICLE XI: THE AGENT
11.1 Appointment; Nature of Relationship. NBD Bank, N.A. is appointed by
the Lenders as the Agent hereunder and under each other Loan Document, and each
of the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents. The Agent agrees to act as such
contractual representative upon the express
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conditions contained in this Article XI. Notwithstanding the use of the defined
term "Agent," it is expressly understood and agreed that the Agent shall not
have any fiduciary responsibilities to any Lender by reason of this Agreement
and that the Agent is merely acting as the representative of the Lenders with
only those duties as are expressly set forth in this Agreement and the other
Loan Documents. In its capacity as the Lenders' contractual representative, the
Agent (i) does not assume any fiduciary duties to any of the Lenders, (ii) is a
"representative" of the Lenders within the meaning of Section 9-105 of the
Uniform Commercial Code and (iii) is acting as an independent contractor, the
rights and duties of which are limited to those expressly set forth in this
Agreement and the other Loan Documents. Each of the Lenders agrees to assert no
claim against the Agent on any agency theory or any other theory of liability
for breach of fiduciary duty, all of which claims each Lender waives.
11.2 Powers. The Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties or fiduciary duties to the Lenders, or any
obligation to the Lenders to take any action hereunder or under any of the other
Loan Documents except any action specifically provided by the Loan Documents
required to be taken by the Agent.
11.3 General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is found in a final judgment by a court of
competent jurisdiction to have arisen solely from the Gross Negligence, willful
misconduct or breach of contract of such Person.
11.4 No Responsibility for Loans, Creditworthiness, Recitals, Etc. Neither
the Agent nor any of its directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into, or verify (i) any
statement, warranty or representation made in connection with any Loan Document
or any borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of any obligor under any Loan Document; (iii) the
satisfaction of any condition specified in Article V, except receipt of items
required to be delivered solely to the Agent; (iv) the existence or possible
existence of any Default or (v) the validity, effectiveness or genuineness of
any Transaction Document, for the perfection or priority of the Liens on any of
the Collateral, or any other instrument or writing furnished in connection
therewith. The Agent shall not be responsible to any Lender for any recitals,
statements, representations or warranties herein or in any of the other Loan
Documents, or for the execution, effectiveness, genuineness, validity, legality,
enforceability, collectibility, or sufficiency of this Agreement or any of the
other Loan Documents or the transactions contemplated thereby, or for the
financial condition of any guarantor of any or all of the Obligations, the
Borrower or any of its Subsidiaries.
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11.5 Action on Instructions of Lenders. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders and on all holders of
Notes. The Agent shall be fully justified in failing or refusing to take any
action hereunder and under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against any and all
liability, cost and expense that it may incur by reason of taking or continuing
to take any such action.
11.6 Employment of Agents and Counsel. The Agent may execute any of its
duties as the Agent hereunder and under any other Loan Document by or through
employees, agents, and attorney-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
11.7 Reliance on Documents; Counsel. The Agent shall be entitled to rely
upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
11.8 The Agent's Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Revolving Loan Commitments (i) for any amounts not reimbursed by the Borrower
for which the Agent is entitled to reimbursement by the Borrower under the Loan
Documents, (ii) for any other expenses incurred by the Agent on behalf of the
Lenders, in connection with the preparation, execution, delivery, administration
and enforcement of the Loan Documents and (iii) for any liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever which may be imposed
on, incurred by or asserted against the Agent in any way relating to or arising
out of the Loan Documents or any other document delivered in connection
therewith or the transactions contemplated thereby, or the enforcement of any of
the terms thereof or of any such other documents, provided that no Lender shall
be liable for any of the foregoing to the extent any of the foregoing is found
in a final non-appealable judgment by a court of competent jurisdiction to have
arisen solely from the Gross Negligence or willful misconduct of the Agent.
11.9 Rights as a Lender. With respect to its Revolving Loan Commitment,
its Term Loan Commitment, Loans made by it and the Notes issued to it, the Agent
shall have the
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same rights and powers hereunder and under any other Loan Document as any Lender
and may exercise the same as through it were not the Agent, and the term
"Lender" or "Lenders" shall, unless the context otherwise indicates, include the
Agent in its individual capacity. The Agent may accept deposits from, lend money
to, and generally engage in any kind of trust, debt, equity or other
transaction, in addition to those contemplated by this Agreement or any other
Loan Document, with the Borrower or any of its Subsidiaries in which such Person
is not prohibited hereby from engaging with any other Person.
11.10 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements prepared by the Borrower and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents.
11.11 Successor Agent. The Agent may resign at any time by giving written
notice thereof to the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right to appoint, on behalf of the Borrower and
the Lenders, a successor Agent. If no successor Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within thirty days after the retiring Agent's giving notice of resignation, then
the retiring Agent may appoint, on behalf of the Borrower and the Lenders, a
successor Agent. Notwithstanding anything herein to the contrary, so long as no
Default has occurred and is continuing, each such successor Agent shall be
subject to approval by the Borrower, which approval shall not be unreasonably
withheld. Such successor Agent shall be a commercial bank having capital and
retained earnings of at least $500,000,000. Upon the acceptance of any
appointment as the Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article XI shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Agent hereunder and under the other Loan Documents.
11.12 Collateral Documents. (a) Each Lender authorizes the Agent to enter
into each of the Collateral Documents to which it is a party and to take all
action contemplated by such documents. Each Lender agrees that no Lender shall
have the right individually to seek to realize upon the security granted by any
Collateral Document, it being understood and agreed that such rights and
remedies may be exercised solely by the Agent for the benefit of the Holders of
Secured Obligations upon the terms of the Collateral Documents.
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(b) In the event that any Collateral is hereafter pledged by any Person
as collateral security for the Obligations, the Agent is hereby authorized to
execute and deliver on behalf of the Holders of Secured Obligations any Loan
Documents necessary or appropriate to grant and perfect a Lien on such
Collateral in favor of the Agent on behalf of the Holders of Secured
Obligations.
(c) The Lenders hereby authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon any
Collateral (i) upon termination of the Commitments and payment and satisfaction
of all of the Obligations at any time arising under or in respect of this
Agreement or the Loan Documents or the transactions contemplated hereby or
thereby; (ii) as permitted by, but only in accordance with, the terms of the
applicable Loan Document; or (iii) if approved, authorized or ratified in
writing by the Required Lenders, unless such release is required to be approved
by all of the Lenders hereunder. Upon request by the Agent at any time, the
Lenders will confirm in writing the Agent's authority to release particular
types or items of Collateral pursuant to this Section 11.12(c).
(d) Upon any sale and transfer of Collateral which is expressly
permitted pursuant to the terms of any Loan Document, or consented to in writing
by the Required Lenders or all of the Lenders, as applicable, and upon at least
five Business Days' prior written request by the Borrower, the Agent shall (and
is hereby irrevocably authorized by the Lenders to) execute such documents as
may be necessary to evidence the release of the Liens granted to the Agent for
the benefit of the Lenders herein or pursuant hereto upon the Collateral that
was sold or transferred; provided, however, that (i) the Agent shall not be
required to execute any such document on terms which, in the Agent's opinion,
would expose the Agent to liability or create any obligation or entail any
consequence other than the release of such Liens without recourse or warranty,
and (ii) such release shall not in any manner discharge, affect or impair the
Obligations or any Liens upon (or obligations of the Borrower or any Subsidiary
in respect of) all interests retained by the Borrower or any Subsidiary,
including (without limitation) the proceeds of the sale, all of which shall
continue to constitute part of the Collateral.
ARTICLE XII: SETOFF; RATABLE PAYMENTS
12.1 Setoff. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if any Default occurs and is continuing, any
indebtedness from any Lender to the Borrower (including all account balances,
whether provisional or final and whether or not collected or available) may be
offset and applied toward the payment of the Obligations owing to such Lender,
whether or not the Obligations, or any part hereof, shall then be due.
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12.2 Ratable Payments. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Loans (other than payments received pursuant to
Sections 4.1, 4.2 or 4.4) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligation or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to the obligations owing to them. In case any such payment is
disturbed by legal process, or otherwise, appropriate further adjustments shall
be made.
12.3 Application of Payments. Subject to the provisions of Section 9.2,
the Agent shall, unless otherwise specified at the direction of the Required
Lenders which direction shall be consistent with the last sentence of this
Section 12.3, apply all payments and prepayments in respect of any Obligations
and all proceeds of Collateral in the following order:
(A) first, to pay interest on and then principal of any
portion of the Loans which the Agent may have advanced on behalf of any
Lender for which the Agent has not then been reimbursed by such Lender
or the Borrower;
(B) second, to pay interest on and then principal of any
advance made under Section 10.3 for which the Agent has not then been
paid by the Borrower or reimbursed by the Lenders;
(C) third, to pay Obligations in respect of any fees, expense
reimbursements or indemnities then due to the Agent;
(D) fourth, to pay Obligations in respect of any fees,
expenses, reimbursements or indemnities then due to the Lenders and the
issuer(s) of Letters of Credit;
(E) fifth, to pay interest due in respect of Swing Line Loans;
(F) sixth, to pay interest due in respect of Loans (other than
Swing Line Loans) and L/C Obligations;
(G) seventh, to the ratable payment or prepayment of principal
outstanding on Swing Line Loans;
(H) eighth, to the ratable payment or prepayment of principal
outstanding on Loans (other than Swing Line Loans), Reimbursement
Obligations and Hedging
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Obligations under Interest Rate Agreements in such order as the Agent
may determine in its sole discretion;
(I) ninth, to provide required cash collateral, if required
pursuant to Section 3.11 and
(J) tenth, to the ratable payment of all other Obligations.
Unless otherwise designated (which designation shall only be applicable prior to
the occurrence of a Default) by the Borrower, all principal payments in respect
of Loans (other than Swing Line Loans) shall be applied first, to repay
outstanding Floating Rate Loans, and then to repay outstanding Eurodollar Rate
Loans with those Eurodollar Rate Loans which have earlier expiring Interest
Periods being repaid prior to those which have later expiring Interest Periods.
The order of priority set forth in this Section 12.3 and the related provisions
of this Agreement are set forth solely to determine the rights and priorities of
the Agent, the Lenders, the Swing Line Bank and the issuer(s) of Letters of
Credit as among themselves. The order of priority set forth in clauses (D)
through (J) of this Section 12.3 may at any time and from time to time be
changed by the Required Lenders without necessity of notice to or consent of or
approval by the Borrower, or any other Person; provided, that the order of
priority of payments in respect of Swing Line Loans may be changed only with the
prior written consent of the Swing Line Bank. The order of priority set forth in
clauses (A) through (C) of this Section 12.3 may be changed only with the prior
written consent of the Agent.
12.4 Relations Among Lenders.
(A) Except with respect to the exercise of set-off rights of any Lender in
accordance with Section 12.1, the proceeds of which are applied in accordance
with this Agreement, and except as set forth in the following sentence, each
Lender agrees that it will not take any action, nor institute any actions or
proceedings, against the Borrower or any other obligor hereunder or with respect
to any Loan Document, without the prior written consent of the Required Lenders
or, as may be provided in this Agreement or the other Loan Documents, at the
direction of the Agent.
(B) The Lenders are not partners or co-venturers, and no Lender shall be
liable for the acts or omissions of, or (except as otherwise set forth herein in
case of the Agent) authorized to act for, any other Lender. The Agent shall have
the exclusive right on behalf of the Lenders to enforce on the payment of the
principal of and interest on any Loan after the date such principal or interest
has become due and payable pursuant to the terms of this Agreement.
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS;
PARTICIPATIONS
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13.1 Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents and (ii) any assignment by any Lender must be made in compliance
with Section 13.3 hereof. Notwithstanding clause (ii) of this Section 13.1, any
Lender may at any time, without the consent of the Borrower or the Agent, assign
all or any portion of its rights under this Agreement and its Notes to a Federal
Reserve Bank; provided, however, that no such assignment shall release the
transferor Lender from its obligations hereunder. The Agent may treat the payee
of any Note as the owner thereof for all purposes hereof unless and until such
payee complies with Section 13.3 hereof in the case of an assignment thereof or,
in the case of any other transfer, a written notice of the transfer is filed
with the Agent. Any assignee or transferee of a Note agrees by acceptance
thereof to be bound by all the terms and provisions of the Loan Documents. Any
request, authority or consent of any Person, who at the time of making such
request or giving such authority or consent is the holder of any Note, shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or Notes issued in exchange therefor.
13.2 Participations.
(A) Permitted Participants; Effect. Subject to the terms set forth in this
Section 13.2, any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more banks or other
entities ("Participants") participating interests in any Loan owing to such
Lender, any Note held by such Lender, any Revolving Loan Commitment of such
Lender, any L/C Interest of such Lender or any other interest of such Lender
under the Loan Documents on a pro rata or non-pro rata basis. Notice of such
participation to the Borrower and the Agent shall be required prior to any
participation becoming effective with respect to a Participant which is not a
Lender or an Affiliate thereof. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under the
Loan Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
such Lender shall remain the holder of any such Note for all purposes under the
Loan Documents, all amounts payable by the Borrower under this Agreement shall
be determined as if such Lender had not sold such participating interests, and
the Borrower and the Agent shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under the Loan
Documents except that, for purposes of Article IV hereof, the Participants shall
be entitled to the same rights as if they were Lenders.
(B) Voting Rights. Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or waiver of
any provision of the Loan Documents other than any amendment, modification or
waiver with respect to any Loan or Revolving Loan Commitment in which such
Participant has an interest which
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forgives principal, interest or fees or reduces the interest rate or fees
payable pursuant to the terms of this Agreement with respect to any such Loan or
Revolving Loan Commitment, postpones any date fixed for any regularly-scheduled
payment of principal of, or interest or fees on, any such Loan or Revolving Loan
Commitment, or releases all or substantially all of the Collateral, if any,
securing any such Loan.
(C) Benefit of Setoff. The Borrower agrees that each Participant shall be
deemed to have the right of setoff provided in Section 12.1 hereof in respect to
its participating interest in amounts owing under the Loan Documents to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under the Loan Documents, provided that each Lender shall retain the
right of setoff provided in Section 12.1 hereof with respect to the amount of
participating interests sold to each Participant except to the extent such
Participant exercises its right of setoff. The Lenders agree to share with each
Participant, and each Participant, by exercising the right of setoff provided in
Section 12.1 hereof, agrees to share with each Lender, any amount received
pursuant to the exercise of its right of setoff, such amounts to be shared in
accordance with Section 12.2 as if each Participant were a Lender.
13.3 Assignments.
(A) Permitted Assignments. Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time assign to one or
more banks or other entities ("Purchasers") all or a portion of its rights and
obligations under this Agreement (including, without limitation, its Revolving
Loan Commitment, all Loans owing to it, all of its participation interests in
existing Letters of Credit, and its obligation to participate in additional
Letters of Credit hereunder) in accordance with the provisions of this Section
13.3. Each assignment shall be of a constant, and not a varying, ratable
percentage of all of the assigning Lender's rights and obligations under this
Agreement. Such assignment shall be substantially in the form of Exhibit E
hereto and shall not be permitted hereunder unless such assignment is either for
all of such Lender's rights and obligations under the Loan Documents or, without
the prior written consent of the Agent, involves loans and commitments in an
aggregate amount of at least $5,000,000 (which minimum amount may be waived by
the Required Lenders after the occurrence of a Default or Unmatured Event of
Default). The consent of the Agent and, prior to the occurrence of a Default or
Unmatured Default, the Borrower (which consent, in each such case, shall not be
unreasonably withheld), shall be required prior to an assignment becoming
effective with respect to a Purchaser which is not a Lender or an Affiliate
thereof.
(B) Effect; Effective Date. Upon (i) delivery to the Agent of a notice of
assignment, substantially in the form attached as Appendix I to Exhibit E hereto
(a "Notice of Assignment"), together with any consent required by Section
13.3.(A) hereof, and (ii), in the case of an assignment to a Purchaser which is
not a Lender or an Affiliate thereof, payment of a $3,500 fee to the Agent for
processing such assignment, such assignment
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shall become effective on the effective date specified in such Notice of
Assignment. The Notice of Assignment shall contain a representation by the
Purchaser to the effect that none of the consideration used to make the purchase
of the Commitment, Loans and L/C Obligations under the applicable assignment
agreement are "plan assets" as defined under ERISA and that the rights and
interests of the Purchaser in and under the Loan Documents will not be "plan
assets" under ERISA. On and after the effective date of such assignment, such
Purchaser, if not already a Lender, shall for all purposes be a Lender party to
this Agreement and any other Loan Documents executed by the Lenders and shall
have all the rights and obligations of a Lender under the Loan Documents, to the
same extent as if it were an original party hereto, and no further consent or
action by the Borrower, the Lenders or the Agent shall be required to release
the transferor Lender with respect to the percentage of the Aggregate Revolving
Loan Commitment, Loans and Letter of Credit participations assigned to such
Purchaser. Upon the consummation of any assignment to a Purchaser pursuant to
this Section 13.3(B), the transferor Lender, the Agent and the Borrower shall
make appropriate arrangements so that replacement Notes are issued to such
transferor Lender and new Notes or, as appropriate, replacement Notes, are
issued to such Purchaser, in each case in principal amounts reflecting their
Revolving Loan Commitment and their Term Loans, as adjusted pursuant to such
assignment.
(C) The Register. The Agent shall maintain at its address referred to in
Section 14.1 a copy of each assignment delivered to and accepted by it pursuant
to this Section 13.3 and a register (the "Register") for the recordation of the
names and addresses of the Lenders and the Revolving Loan Commitment of and
principal amount of the Loans owing to, each Lender from time to time and
whether such Lender is an original Lender or the assignee of another Lender
pursuant to an assignment under this Section 13.3. The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower and each of its Subsidiaries, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
13.4 Confidentiality. Subject to Section 13.5, the Agent and the Lenders
shall hold all nonpublic information obtained pursuant to the requirements of
this Agreement and identified as such by the Borrower in accordance with such
Person's customary procedures for handling confidential information of this
nature and in accordance with safe and sound banking practices and in any event
may make disclosure reasonably required by a prospective Transferee in
connection with the contemplated participation or assignment or as required or
requested by any Governmental Authority or representative thereof or pursuant to
legal process and shall require any such Transferee to agree (and require any of
its Transferees to agree) to comply with this Section 13.4. In no event shall
the Agent or any Lender be obligated or required to return any materials
furnished by the Borrower; provided, however, each prospective Transferee shall
be required to agree that if it does
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not become a participant or assignee it shall return all materials furnished to
it by or on behalf of the Borrower in connection with this Agreement.
13.5 Dissemination of Information. The Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the Borrower and its Subsidiaries; provided that prior to any such
disclosure, such prospective Transferee shall agree to preserve in accordance
with Section 13.4 the confidentiality of any confidential information described
therein.
ARTICLE XIV: NOTICES
14.1 Giving Notice. Except as otherwise permitted by Section 2.14 with
respect to borrowing notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Documents shall be in
writing or by telex or by facsimile and addressed or delivered to such party at
its address set forth below its signature hereto or at such other address as may
be designated by such party in a notice to the other parties. Any notice, if
mailed and properly addressed with postage prepaid, shall be deemed given when
received; any notice, if transmitted by telex or facsimile, shall be deemed
given when transmitted (answerback confirmed in the case of telexes).
14.2 Change of Address. The Borrower, the Agent and any Lender may each
change the address for service of notice upon it by a notice in writing to the
other parties hereto.
ARTICLE XV: COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Borrower, the Agent and the Lenders
and each party has notified the Agent by telex or telephone, that it has taken
such action.
[Remainder of This Page Intentionally Blank]
<PAGE>
IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have executed
this Agreement as of the date first above written.
FINISHMASTER, INC.,
as the Borrower
By:/s/ Roger A Sorokin
-------------------------------
Roger A. Sorokin,
Vice President Finance
Address:
4259 40th Street
Kentwood, Michigan 49512
Attention: Roger A. Sorokin
Telephone No.: 616-949-0607
Facsimile No.: 616-949-1264
NBD BANK, N.A.,
as Agent, as a Lender, as an Issuing
Bank and as the Swing Line Bank
By:/s/ Scott Morrison
----------------------------
Scott Morrison
Title:
Address:
One Indiana Square
Indianapolis, Indiana 46266
Attention: Scott C. Morrison
Telephone No.: 317-266-7351
Facsimile No.: 317-266-6042
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FINISHMASTER, INC.
SUBORDINATED NOTE AGREEMENT
Senior Subordinated Note due 2004
Dated as of November 19, 1997
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TABLE OF CONTENTS
Page
1. DEFINED TERMS.........................................................1
2. DESCRIPTION OF SENIOR SUBORDINATED NOTE...............................1
3. PURCHASE AND SALE OF SENIOR SUBORDINATED NOTE.........................1
4. CLOSING OF SALE OF SENIOR SUBORDINATED NOTE...........................2
5. CONDITIONS TO CLOSING.................................................2
5A. Acquisition of Thompson......................................2
5B. Payment of Fee...............................................2
6. OPTIONAL PREPAYMENTS; PRIORITY OF PAYMENT.............................2
6A. Optional Prepayments.........................................2
6B. Notice of Prepayments........................................2
6C. Acquisition of Senior Subordinated Note......................3
6D. Subordination of Senior Subordinated Note....................3
7. AFFIRMATIVE COVENANTS.................................................3
7A. Required Notices; Other Information..........................3
7B. Corporate Existence; Maintenance of Properties...............3
7C. Payment Of Taxes And Claims..................................4
7D. Compliance With Laws, Etc....................................4
7E. Satisfaction of Obligations..................................4
7F. Proceeds of Financing........................................4
8. NEGATIVE COVENANTS....................................................5
8A. Liens........................................................5
8B. Merger or Sale of Assets.....................................6
8C. Amendments and Waivers of Charter Documents..................6
9. EVENTS OF DEFAULT.....................................................6
9A. Default; Acceleration........................................6
9B. Rescission of Acceleration...................................8
9C. Other Remedies...............................................8
9D. Default Rate.................................................9
10. REPRESENTATIONS AND WARRANTIES........................................9
10A. Organization, Powers, Good Standing,
Business and Subsidiaries..................................9
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10B. Authorization of Financing, Etc..............................9
10C. No Material Adverse Change..................................10
10D. Title to Properties; Liens..................................10
10E. Litigation; Adverse Facts...................................10
10F. Payment of Taxes............................................11
11. DEFINITIONS..........................................................11
11A. Definitions.................................................11
11B. Accounting Terms............................................16
12. JUDICIAL PROCEEDINGS.................................................16
12A. Consent to Jurisdiction.....................................16
12B. Enforcement of Judgments....................................16
12C. Waiver of Jury Trial........................................16
12D. No Limitation on Service or Suit............................17
13. MISCELLANEOUS........................................................17
13A. Payments....................................................17
13B. Amendments; Waivers.........................................17
13C. Survival of Representations and Warranties;
Entire Agreement..........................................17
13D. Successors and Assigns......................................18
13E. Notices.....................................................18
13F. Descriptive Headings........................................18
13G. Severability................................................18
13H. Governing Law...............................................18
PURCHASER SCHEDULE
EXHIBITS
Exhibit A - Form of Senior Subordinated Note
ii
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This SUBORDINATED NOTE AGREEMENT (as amended, supplemented or otherwise
modified from time to time, this "Agreement") dated as of November 19, 1997, is
among FinishMaster, Inc., Indiana corporation (the "Company"), and LDI, Ltd., an
Indiana limited partnership (the "Purchaser").
WHEREAS, in order to provide funds for the acquisition by the Company
of Thompson PBE, Inc., a Delaware corporation ("Thompson"), and for general
corporate purposes of the Company, the Company desires to issue and sell its
senior subordinated promissory note; and
WHEREAS, the Purchaser desires to purchase such senior subordinated
promissory note on the terms and conditions more fully set forth herein and in
such senior subordinated promissory note;
NOW, THEREFORE, in consideration of the mutual terms, conditions and
other agreements set forth herein, the parties hereto agree as follows:
1. DEFINED TERMS. Certain capitalized terms used in this Agreement are
defined in Section 11.
2. DESCRIPTION OF SENIOR SUBORDINATED NOTE.
The Company will authorize the issuance and sale of its 9.00% senior
subordinated promissory note due May 19, 2004 in substantially the form of
Exhibit A hereto (such note, together with any notes that may be issued
hereunder in substitution or exchange therefor, is referred to herein as the
"Senior Subordinated Note"), in the original aggregate principal amount of
$30,000,000.00, bearing interest from the date of issuance thereof at the rate
of 9.00% per annum, payable in arrears quarterly on the thirtieth day of each
March, June, September and December commencing December 30, 1997 and at
maturity, calculated on the basis of a 360-day year of twelve thirty-day months.
The Senior Subordinated Note is not subject to prepayment or redemption at the
option of the Company prior to its stated maturity date except on the terms and
conditions and with the premium, if any, set forth in Section 6. Principal and
premium not paid when due (whether at maturity, by optional prepayment, upon
acceleration, pursuant to a permitted demand, upon commencement of bankruptcy or
insolvency proceedings or otherwise) and any overdue installment of interest
shall bear interest at the Default Rate.
3. PURCHASE AND SALE OF SENIOR SUBORDINATED NOTE.
The Company hereby agrees to sell to the Purchaser and, subject to the
terms and conditions set forth herein, the Purchaser, agrees to purchase from
the Company the Senior Subordinated Note, in the form registered in the name of
such Purchaser, in the principal amount of $30,000,000.00 for a purchase price
equal to 100% of the principal amount thereof.
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4. CLOSING OF SALE OF SENIOR SUBORDINATED NOTE.
The purchase and delivery of the Senior Subordinated Note shall take
place at a closing (the "Closing") at the offices of Barnes & Thornburg in
Indianapolis, Indiana (or at such other location as the Company and the
Purchaser may agree), at such time as the Purchaser and the Company may agree,
but in no event later than January 31, 1998 (the date of such Closing is
referred to herein as the "Closing Date").
5. CONDITIONS TO CLOSING.
The obligation of the Purchaser to purchase and pay for the Senior
Subordinated Note is subject to the satisfaction of the following conditions
precedent:
5A. Acquisition of Thompson. Prior to or simultaneously with the
Closing, the Company shall have completed the acquisition of a majority of the
outstanding capital stock (on a fully diluted basis) of Thompson.
5B. Payment of Fee. Prior to or simultaneously with the Closing, the
Company shall pay to the Purchaser a non-refundable facility fee in an amount
equal to 1.5% of the principal amount of the Senior Subordinated Note.
6. OPTIONAL PREPAYMENTS; PRIORITY OF PAYMENT.
6A. Optional Prepayments. The Company may prepay the Senior
Subordinated Note at any time in whole or ratably in part, at a price (the
"Make-Whole Prepayment Price") equal to 100% of the principal amount being so
prepaid plus (i) accrued and unpaid interest on such amount to and including the
date of prepayment, and (ii) the Yield-Maintenance Premium, if any, with respect
to the Senior Subordinated Note so prepaid; provided, however, that any such
prepayment (a) may be made only in accordance with the provisions of Sections 6B
and 6C, and (b) shall be in a principal amount of not less than $1,000,000 and
in an integral multiple of $100,000.
6B. Notice of Prepayments. The Company shall give Purchaser written
notice of each optional prepayment of Senior Subordinated Note pursuant to
Section 6A not less than two (2) days prior to the Settlement Date, which notice
shall (i) specify the Settlement Date (which shall be a Business Day), (ii)
state the aggregate principal amount of the Senior Subordinated Note to be
prepaid on such date and the amount of accrued and unpaid interest thereon to
and including such date, and (iii) set forth in reasonable detail calculations
specifying the Make-Whole Prepayment Price that would apply to the Senior
Subordinated Note if the date of such notice were the Settlement Date. Upon the
giving of any such prepayment notice, such principal amount, together with
accrued and unpaid interest thereon to and including the Settlement Date plus
the Yield-Maintenance Premium, if any, with respect thereto, shall become due
and payable on such Settlement Date.
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6C. Acquisition of Senior Subordinated Note. The Company shall not, and
shall not permit any of its Affiliates to, purchase, prepay, redeem or otherwise
acquire the Senior Subordinated Note from the Purchaser, except pursuant to a
payment or prepayment in accordance with the specific terms of this Agreement.
6D. Subordination of Senior Subordinated Note. The Company, for itself
and its successors, and the Purchaser, by its acceptance of the Senior
Subordinated Note, agrees that the payment of the principal of, and interest and
premium due on, the Senior Subordinated Note is hereby expressly subordinate,
and junior in right of payment, to the extent and in the manner provided in that
certain Subordination Agreement dated November 19, 1997 among Purchaser, the
Company and the NBD Bank, N.A., as agent for certain lenders, to the payment of
principal, premium, if any, and interest on the Senior Debt.
7. AFFIRMATIVE COVENANTS.
The Company covenants and agrees that, until indefeasible payment in
full of the Senior Subordinated Note and all other amounts payable under this
Agreement, it shall perform all covenants in this Section 7.
7A. Required Notices; Other Information.
7A(i) Events of Default, Etc. Promptly but in no event later
than five (5) Business Days after any Executive Officer obtains knowledge (a) of
any condition or event that constitutes a Default or an Event of Default, (b)
that the Purchaser has given any notice or taken any other action with respect
to a claimed Default or Event of Default, (c) that any event or condition has
occurred which would give rise or could reasonably be expected to give rise to a
Material Adverse Effect, an Officer's Certificate specifying, as applicable, the
nature and period of existence of any such condition or event, the notice given
(and providing a copy thereof), action taken and the nature of such claimed
default, event of default, Default, Event of Default, event, breach or
condition, and what action the Company has taken, is taking and proposes to take
with respect thereto, or (d) a default or event of default under the Senior
Debt.
7A(ii) Other Information. With reasonable promptness, such
Consolidated, consolidating and other information and data with respect to the
Company or any Subsidiary and their respective Properties, assets and businesses
as may be reasonably requested from time to time by any Purchaser.
7B. Corporate Existence; Maintenance of Properties. The Company
covenants that it (a) will do or cause to be done all things necessary to
preserve and keep in full force and effect the corporate, trust, partnership or
other entity existence, rights, licenses, registrations and franchises of the
Company and the Subsidiaries, (b) will cause its properties and the properties
of the Subsidiaries used or useful in the conduct of its business, other than
properties which in the aggregate are not material to the business and
operations of the Company and the Subsidiaries, taken as a whole, to be
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<PAGE>
maintained and kept in good condition, repair and working order (ordinary wear
and tear excepted) and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereto, all as in the best judgment
of the Company may be necessary so that the operations of the Company and the
Subsidiaries may be properly and advantageously conducted and (c) will, and will
cause each of the Subsidiaries to, qualify and remain qualified to conduct
business in each jurisdiction where the nature of the business of or ownership
of Property by the Company or such Subsidiary, as the case may be, may require
such qualification, except where the failure to be so qualified would not, and
could not, have a Material Adverse Effect.
7C. Payment Of Taxes And Claims. The Company shall, and shall cause
each Subsidiary to, duly and timely file all tax returns and reports required to
be filed and pay all taxes, assessments and other governmental charges imposed
upon such entity or any Property of such entity or in respect of any franchises,
business, income or Property of the Company, or any Subsidiary before any
penalty or interest in a material amount accrues thereon, and pay all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums material in the aggregate that have become due and payable
and that by law have or may become a Lien upon any of such Properties, prior to
the time when any penalty or fine shall be incurred with respect thereto unless,
in each case, (i) no Property (other than money for such charge or claim and the
interest or penalty accruing thereon) of the Company, any Subsidiary is in
danger of being lost or forfeited as a result thereof, (ii) such charge or claim
is being contested in good faith by appropriate proceedings promptly instituted
and diligently conducted, and (iii) such reserve or other appropriate provision,
if any, as shall be required in conformity with GAAP shall have been made
therefor.
7D. Compliance With Laws, Etc. The Company will comply, and will cause
each of the Subsidiaries to comply, with all applicable laws, rules, regulations
and orders and obtain and maintain in good standing all licenses, permits and
approvals from any and all governments, governmental commissions, board or
agencies thereof or of jurisdictions in which it or any Subsidiary carries on
business required in respect of the business and operations of the Company
except for those laws, rules, regulations, orders, licenses, permits and
approvals which the failure to comply with or to maintain would not have a
Material Adverse Effect.
7E. Satisfaction of Obligations. Without limiting Section 7C, the
Company shall, and shall cause the Subsidiaries to, pay, discharge or otherwise
satisfy and perform as and when due, and at or before maturity or before they
become delinquent, as the case may be, all of their respective obligations of
whatever nature; except when, in the case of payment obligations, the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves required by GAAP with respect thereto have been
provided on the books of the Company or the Subsidiaries, as the case may be, or
except where the failure to pay, discharge or otherwise satisfy such obligations
would not have a Material Adverse Effect.
7F. Proceeds of Financing. The proceeds of the issuance of the Senior
Subordinated Note hereunder shall be used to finance the acquisition of Shares
of Thompson and for general corporate purposes.
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8. NEGATIVE COVENANTS.
The Company covenants and agrees that, until indefeasible payment in
full of the Senior Subordinated Note and all other amounts payable under this
Agreement, it shall perform all covenants in this Section 8.
8A. Liens. The Company shall not, and shall not permit any Subsidiary
to, directly or indirectly, create, incur, assume or permit or suffer to exist
any Lien, or file or execute or agree to the execution of any financing
statement, on or with respect to any Property (including any document or
instrument in respect of goods or accounts receivable) of the Company or any
Subsidiary, whether now owned or hereafter acquired, or any income or profits
therefrom except:
(i) Liens created in favor of the Company or a Subsidiary;
(ii) Liens in favor of the holders of the Senior Debt or
permitted under the terms of the Senior Debt;
(iii) existing Liens and Liens to secure replacements,
extensions and renewals of the Debt or other obligations secured by
such Liens only if (a) the principal amount of the Debt or other
obligation secured thereby is not increased, and (b) such Lien does not
extend to any Property not previously subject thereto;
(iv) Liens in respect of Debt (other than as contemplated in
clause (v) below) constituting purchase money security interests
provided that such Liens attach solely to the property acquired or
purchased concurrently with such acquisition or purchase;
(v) deposits to secure payment of workers' compensation,
unemployment insurance, old age pensions or other social security
obligations, in the ordinary course of business of the Company or any
Subsidiary and not related to borrowed money or credit extended;
(vi) (a) Liens securing any judgment, award or order that does
not constitute an Event of Default, and (b) Liens arising in the
ordinary course of business (including easements and similar
encumbrances) that arise by operation of law and not related to
borrowed money or credit extended that arise in connection with claims,
the payment of which is not at the time required by Section 7C, but in
the case of (a) and (b) only if such Liens do not individually or in
the aggregate materially interfere with the conduct of the business of
the Company or any Subsidiary and would not individually or in the
aggregate have a Material Adverse Effect; and
(vii) deposits to secure the performance of statutory
obligations and other obligations of a like nature incurred in the
ordinary course of business.
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8B. Merger or Sale of Assets.
(i) The Company covenants that it will not, and it will not
permit any Subsidiary to, enter into any transaction of merger or
consolidation or liquidate or wind up or dissolve itself (or suffer any
liquidation or dissolution), except that (X) the Company may merge or
consolidate if (a) the Company is the surviving entity or the survivor
assumes all of the Company's obligations hereunder and under the Senior
Subordinated Note and under the other Credit Documents and in either
case remains or is, as applicable, an entity incorporated under the
laws of a state of the United States of America, and (b) immediately
after such merger or consolidation (and giving effect thereto) no
Default or Event of Default shall have occurred and be continuing, and
(Y) any Subsidiary may merge or consolidate with or into the Company or
a Subsidiary, if the Company or such Subsidiary is the surviving entity
and remains incorporated under the laws of the state of its present
incorporation.
(ii) The Company covenants that it will not, and will not
permit any Subsidiary to, sell, dispose of or otherwise convey (by
merger, consolidation, sale of stock of any Subsidiary or otherwise),
in any single or related series of sales, dispositions or conveyances,
any Property of the Company or any Subsidiary, provided such limitation
shall not apply to transactions wherein (a) such transaction is in the
ordinary course of business and does not involve the sale or other
conveyance of all or a substantial part of the Property of the Company
and/or such Subsidiary, as applicable, and no Default or Event of
Default has occurred and is continuing or would result therefrom, or
(b) the Company or a Subsidiary sells or transfers its property to
another Subsidiary or the Company.
8C. Amendments and Waivers of Charter Documents. The Company shall not,
and shall not permit any Subsidiary to, amend, waive or terminate its Articles
of Incorporation or bylaws in any way that would have or could reasonably be
expected to have a Material Adverse Effect.
9. EVENTS OF DEFAULT.
9A. Default; Acceleration. If any of the following events (each an
"Event of Default") shall occur and be continuing for any reason whatsoever
(whether such occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or otherwise):
(i) the Company shall fail to pay any principal of or premium,
if any, on the Senior Subordinated Note when due, or shall fail to pay
any interest thereon or any other amount payable hereunder within five
(5) days of the date due, in either case whether due at stated
maturity, upon acceleration or notice of optional prepayment or
otherwise; or
(ii) (a) The Company or any Subsidiary shall fail to pay when
due (upon maturity, acceleration or otherwise) any principal, premium,
fee or interest or similar amount in an individual or aggregate amount
exceeding $3,000,000 on any obligations for borrowed money outstanding
beyond any applicable period of grace, or (b) any other breach, default
or event
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of default under any instrument or agreement relating to any
obligations for borrowed money of the Company or any Subsidiary shall
occur, and the effect of any such breach or default is to cause, or to
permit the Purchaser or the holder of such obligations for borrowed
money to cause an aggregate amount exceeding $3,000,000 to become or be
declared due prior to its stated maturity (or the stated maturity of
any underlying obligation, as the case may be), and such breach or
default shall not have been cured within any applicable period of
grace; or
(iii) any representation or warranty or other statement made
in any Officer's Certificate or by any Executive Officer or by the
Company in this Agreement, any other Credit Document or in any written
certificate, instrument or report furnished in compliance with or in
reference to this Agreement or any other Credit Document shall be false
in any material respect on the date as of which made or renewed; or
(iv) the Company or any Subsidiary shall fail duly and
punctually to perform or observe any other provision of this Agreement
or any other Credit Document and such default with respect to such
other provision shall not have been corrected or waived within 30 days
after any Executive Officer has knowledge thereof or the Company
receives notice thereof from the Purchaser; or
(v) the Company, or any Subsidiary shall generally not pay its
debts as they become due, or shall admit in writing its inability to
pay its debts generally, or shall make a general assignment for the
benefit of creditors; or any bankruptcy case shall be commenced
voluntarily by or involuntarily against the Company or any Subsidiary
or any other proceeding shall be instituted voluntarily by or
involuntarily against the Company or any Subsidiary seeking the
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief or
protection of debtors, or seeking the entry of an order for relief or
the appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its Property and, in the
case of any such case or proceeding instituted against it (but not
instituted by it) that is being diligently contested by it in good
faith, either such proceeding shall remain undismissed or unstayed for
a period of sixty (60) days or any of the actions or relief sought in
such proceeding (including, without limitation, the entry of an order
for relief against it, or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part
of its Property) shall occur; or the board of directors of the Company
or any Subsidiary shall authorize it to take, or the Company or any
Subsidiary shall take any actions in furtherance of, any of the actions
described in this Section 9A(v); or
(vi) any judgments or orders (or series of related judgments
or orders) (other than any such judgments or orders (or series of
related judgments or orders) that do not equal or exceed in aggregate
$3,000,000) shall be entered or filed against the Company or any
Subsidiary or their respective Properties and shall remain
undischarged, unvacated, unbonded
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or unstayed for a period of thirty (30) days, or by the date five (5)
days prior to the date of any proposed sale thereunder; or
(vii) any provision of this Agreement or any other Credit
Document shall for any reason cease to be valid and binding on or be
enforceable against the Company, or the Company shall state in writing
that any provision of this Agreement or any other Credit Document to
which it is a party is not valid and binding on or enforceable against
it in any respect.
then (a) upon the occurrence of any Event of Default described in Section 9A(v),
the unpaid principal amount of the Senior Subordinated Note, together with
accrued interest thereon and together with the Yield-Maintenance Premium, if
any, with respect thereto, shall automatically become due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Company, and (b) upon the occurrence and during the
continuance of any other Event of Default, the Purchaser may, at its option and
in addition to any other right, power or remedy permitted by law or in equity,
by notice in writing to the Company, declare the Senior Subordinated Note to be,
and the Senior Subordinated Note shall thereupon be and become, immediately due
and payable together with interest accrued thereon and together with the
Yield-Maintenance Premium, if any, with respect thereto, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Company.
9B. Rescission of Acceleration. At any time after any declaration of
acceleration of the Senior Subordinated Note shall have been made pursuant to
Section 9A by the Purchaser and before a judgment or decree for the payment of
money due has been obtained by such Purchaser, the Purchaser may, by written
notice to the Company rescind and annul the declaration and its consequences but
only if (i) the principal of, premium, if any, and interest on the Senior
Subordinated Note that shall have become due otherwise than by such declaration
of acceleration shall have been duly and fully paid, and (ii) all Events of
Default other than the nonpayment of principal of, premium, if any, and interest
on the Senior Subordinated Note that have become due solely by such declaration
of acceleration shall have been cured or shall have been waived by the
Purchaser. No rescission or annulment referred to above shall affect any
subsequent Default or Event of Default or any right, power or remedy arising out
of such subsequent Default or Event of Default.
9C. Other Remedies. If any Event of Default shall occur and be
continuing, the Purchaser may proceed to protect and enforce its rights under
this Agreement and its Senior Subordinated Note by exercising such remedies as
are available to the Purchaser in respect thereof under applicable law, either
by suit in equity or by action at law, or both, whether for collection of any
payment then due the Purchaser under the Senior Subordinated Note, specific
performance of any covenant or other agreement contained in this Agreement or in
aid of the exercise of any power granted in this Agreement. No remedy conferred
in this Agreement upon the Purchaser is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative and shall be in
addition to every other remedy conferred herein or now or hereafter existing at
law or in equity or by statute or otherwise.
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9D. Default Rate. Upon the occurrence of a Default or an Event of
Default, the Senior Subordinated Note shall bear interest, to the fullest extent
permitted by law, at the rate otherwise applicable plus 2% per annum, calculated
from the date such Default or Event of Default has occurred and is outstanding
until the date such Default or Event of Default shall have been cured or waived
in writing or otherwise satisfied in full (the "Default Rate.).
10. REPRESENTATIONS AND WARRANTIES.
The Company represents, covenants and warrants to each Purchaser that,
as of the date of this Agreement and as of the Closing Date:
10A. Organization, Powers, Good Standing, Business and Subsidiaries.
10A(i) Organization and Powers. The Company is a corporation
duly organized, validly existing and in good standing under the laws of
the State of Indiana and has all requisite corporate power and
authority to own or lease and operate its Property, to carry on its
business as now conducted and, in the case of the Company, to enter
into this Agreement and each other Credit Document to which it is a
party and to issue the Senior Subordinated Note and to carry out the
transactions contemplated hereby and thereby.
10A(ii) Good Standing. The Company is in good standing
wherever necessary to carry on its present business and operations,
except in jurisdictions in which the failure to be in good standing has
not had, would not have, and could not reasonably be expected to have,
a Material Adverse Effect.
10B. Authorization of Financing, Etc.
10B(i) Authorization of Financing. The execution, delivery and
performance of this Agreement, the other Credit Documents, the
issuance, delivery and payment of the Senior Subordinated Note, and the
consummation of the transactions contemplated hereby and thereby have
been duly authorized by all necessary corporate action by the Company.
10B(ii) No Conflict. The execution, delivery and performance
by the Company of each Credit Document to which it is a party and the
issuance, delivery and payment of the Senior Subordinated Note and the
consummation of the transactions contemplated thereby, do not and will
not (a) violate the Articles of Incorporation or Bylaws of the Company,
or any order, judgment or decree of any court or other agency of any
government binding upon the Company or upon any property or assets of
the Company, (b) violate any provision of law, or any rules or
regulations of any governmental authority, applicable to the Company,
(c) violate, conflict with, result in a material breach of or
constitute (with notice or lapse of time or both) a default under any
indenture, mortgage, instrument, contract or other agreement to which
the Company is a party or pursuant to which any of their properties or
assets are bound, (d) result in or require the creation or imposition
of any Lien upon any of the Property
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of the Company, or (e) require any approval or consent of stockholders
of the Company or require any approval or consent of any Person under
any material indenture, mortgage, instrument, contract or other
agreement to which the Company is a party or pursuant to which any of
their properties are bound, except for such approvals or consents as
will have been duly obtained on or before the Closing Date, copies of
which will have been provided to the Purchaser on or before the Closing
Date.
10B(iii) Governmental Consents. The execution, delivery and
performance by the Company of each Credit Document to which it is a
party and the issuance, delivery and payment of the Senior Subordinated
Note by the Company and the consummation of the transactions
contemplated hereby, do not and will not require any registration or
filing with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or
regulatory body.
10B(iv) Due Execution and Delivery; Binding Obligations. This
Agreement has been duly executed and delivered by the Company and, at
the time of the Closing, each other Credit Document to which the
Company is required by this Agreement to be a party will have been,
duly executed and delivered by the Company. This Agreement is, and, at
the time of the Closing, the Senior Subordinated Note (when issued and
delivered in accordance herewith) and each other Credit Document to
which the Company is a party will be, the legal, valid and binding
obligation of the Company, enforceable against each such party in
accordance with their respective terms.
10C. No Material Adverse Change. Since December 31, 1996, there has
been no material adverse change in the financial condition, operations, assets,
prospects or business of the Company and the Subsidiaries, taken as a whole or
event which would have or could reasonably be expected to have, a Material
Adverse Effect.
10D. Title to Properties; Liens. The Company and the Subsidiaries have
good and valid title to or beneficial ownership of all their respective Property
reflected in the most recent financial statements, except for assets acquired or
disposed of in transactions that are or, if entered into prior to the date of
this Agreement, would have been, permitted hereunder and have not had, do not
have, and could not reasonably be expected to have, a Material Adverse Effect.
10E. Litigation; Adverse Facts. There is no governmental investigation
of which the Company, or any Subsidiary has or could reasonably be expected to
have knowledge, and there is no action, suit, proceeding, governmental
arbitration (whether or not purportedly on behalf of the Company or any
Subsidiary) at law or in equity or before or by any federal, state, municipal or
governmental department, court, tribunal, commission, board, bureau, agency or
instrumentality, domestic or foreign, threatened and about which the Company or
any Subsidiary has or could reasonably be expected to have knowledge, or pending
against or affecting the Company or any Subsidiary or any of their respective
Properties which (i) if adversely determined, would have, or reasonably would be
expected to have, a Material Adverse Effect, or (ii) is not routine and does not
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arise in the ordinary course of business. None of the Company or any Subsidiary
has received any notice of termination of any material contract, lease or other
agreement or suffered any material damage, destruction or loss, (whether or not
covered by insurance) or had any employee strike, work stoppage, slow-down or
lockout or any substantial or non frivolous threat of which the Company or any
Subsidiary has or could reasonably be expected to have knowledge directed to it
of any imminent strike, work stoppage, slowdown or lock-out, any of which remain
pending, that in any case, individually or in the aggregate, would have or could
reasonably be expected to have a Material Adverse Effect.
10F. Payment of Taxes. (a) All tax returns and reports of the Company
or each Subsidiary required to be filed by any of them have been duly and timely
filed; and (b) all taxes, assessments, fees and other governmental charges upon
the Company or each Subsidiary and upon any of their respective Properties,
income and franchises that are due and payable have been paid when due and
payable except as permitted by Section 7C, and there is no actual or proposed
tax assessment against it, about which the Company or any Subsidiary has or
could reasonably be expected to have knowledge, except for any failure of filing
or payment or assessment that, individually or in the aggregate, does not have
or could not reasonably be expected to have a Material Adverse Effect.
11. DEFINITIONS.
11A. Definitions.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly in control of, controlled by, or under common control
with such Person, whether through power to direct or cause the direction of the
management or policies of such Person, ownership or control of more than 10% of
the voting stock of such Person, or otherwise and any Person who is an officer
or director of such Person; provided, however, that neither any Purchaser nor
any Affiliate of any Purchaser shall be deemed to be an Affiliate of the Company
or any Subsidiary solely by reason of its ownership of the Senior Subordinated
Note or by reason of benefiting from any agreements or covenants in this
Agreement or in any other Credit Document.
"Business Day" means any day excluding (i) Saturday and Sunday, (ii)
any day that is a legal holiday under the laws of the State of Indiana and (iii)
any day on which banking institutions located in Indiana are authorized or
required by law or other governmental action to close.
"Called Principal" means, with respect to the Senior Subordinated Note,
the outstanding principal amount of the Senior Subordinated Note that (i) is to
be prepaid or purchased at the Make- Whole Prepayment Price, or (ii) becomes or
is declared to be immediately due and payable pursuant to Section 9A.
"Capitalized Lease Obligations" means rental obligations under any
lease required to be capitalized in accordance with GAAP, taken at the amount
accounted for as indebtedness (net of interest expense).
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"Closing" has the meaning specified in Section 4.
"Closing Date" has the meaning specified in Section 4.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute.
"Commission " means the United States Securities and Exchange
Commission and any successor Federal agency having similar powers.
"Company" has the meaning specified in the introductory paragraph
hereof.
"Contingent Obligation" as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person with respect to any
Debt, lease, dividend, letter of credit or other obligation of another, if a
purpose or intent of the Person incurring the Contingent Obligation is to
provide assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof.
Contingent Obligations shall include, without limitation, (i) the direct or
indirect guaranty, endorsement (other than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another; and (ii) any liability of
such Person for the obligations of another through any agreement (contingent or
otherwise) (a) to purchase, repurchase or otherwise acquire such obligation or
any security thereof, or to provide funds for the payment or discharge of such
obligation (whether in the form of loans, advances, stock purchases, capital
contributions or otherwise), (b) to maintain the solvency or any balance sheet
item, level of income or financial condition of another, or (c) to make
take-or-pay or similar payments if required regardless of non-performance by any
other party or parties to an agreement, if in the case of any agreement
described under clauses (a), (b) or (c) of this sentence the primary purpose or
intent thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to the amount of the obligation (or portion
thereof) so guaranteed or otherwise supported.
"Credit Documents" means this Agreement, the Senior Subordinated Note
and each other instrument or agreement executed and delivered by the Company or
any Subsidiary or Affiliate pursuant to any Credit Document or any transactions
contemplated thereby.
"Debt" means, with respect to any Person, the sum, without duplication,
of (i) all indebtedness of such Person for borrowed money or credit extended
(whether by loan or the issuance and sale of debt securities or otherwise) or in
respect of letters of credit or bankers' acceptances or credit enhancement and
the like or for the deferred purchase price of property or services (except
trade payables currently payable in the ordinary course of business), or which
otherwise should constitute debt on the balance sheet of such person in
accordance with GAAP, (ii) all obligations of such Person under Capitalized
Lease Obligations, (iii) all obligations of such Person to purchase, retire or
redeem any capital stock or any other equity interest, whether or not the
performance of such
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obligation is fixed or contingent, (iv) all Contingent Obligations of such
Person, and all indebtedness and obligations of such Person or other Persons
that are secured by a Lien on any Property of such Person, whether or not such
Person has assumed liability therefor, and (v) other recourse obligations
related to asset sales to the extent not already reflected in such Person's
balance sheet.
"Default" means any event which, subject only to the lapse of a period
of time expressly set forth or referred to in Section 9A or the giving of a
notice expressly set forth or referred to in Section 9A, or both, would
constitute an Event of Default.
"Default Rate" has the meaning specified in Section 9E.
"Discounted Value" means, with respect to the Called Principal of any
Senior Subordinated Note, the amount obtained by discounting all Remaining
Scheduled Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a discount rate
(applied on a semi-annual basis) equal to the Reinvestment Yield with respect to
such Called Principal.
"Event of Default" means any of the events specified in Section 9A.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any successor statute.
"Executive Officer" means with respect to any matter, any of the
Chairman of its Board of Directors (if an officer) or Chief Executive Officer,
President, Vice President or Chief Financial Officer of the Company or any
Subsidiary (or equivalent officer).
"Fiscal Quarter" means a fiscal quarter of the Company and the
Subsidiaries.
"Fiscal Year" means a fiscal year of the Company and the Subsidiaries.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession that are applicable to the circumstances as of the date of
determination, applied on a consistent basis.
"Investment" means, as applied to any Person, any direct or indirect
purchase or other acquisition by that Person of, or a beneficial interest in,
stock or other securities or similar interests of any other Person, or any
direct or indirect loan, advance (other than advances to employees for moving
and travel expenses, drawing accounts and similar expenditures in the ordinary
course of business) or capital contribution by that Person to any other Person.
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"Lien" means any assignment, mortgage, deed of trust, pledge, security
interest, charge, encumbrance, lien, easement or exception of any kind or any
other preferential arrangement of any kind that has the practical effect of
constituting a security interest or lien (including any conditional sale or
other title retention agreement and any agreement to give any security interest
and any lease in the nature thereof) or the filing of or agreement to give any
financing statement under the Uniform Commercial Code of any jurisdiction.
"Make-Whole Prepayment Price" has the meaning specified in Section 6A.
"Material" means material in relation to the business, affairs,
financial condition, assets or properties of the Company and/or the Company and
the Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (i) the
condition (financial or otherwise), business, results of operations, prospects,
liabilities (absolute, accrued, contingent or otherwise), properties or assets
the Company and the Subsidiaries, taken as a whole, or (ii) the rights or
interests of any Purchaser under any Credit Document (including, without
limitation, the ability of any Purchaser to enforce the obligations of the
Company in respect of any Credit Document), or (iii) the Company's ability to
perform its obligations under, or as contemplated by, any Credit Document.
"Officer's Certificate" means a certificate signed in the name of the
Company by an Executive Officer.
"Permitted Liens" means Liens to the extent permitted under Section 8A.
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, joint stock companies, joint ventures,
associations, companies, trusts, banks, trust companies, land trusts, business
trusts, unincorporated organizations or other organizations, whether or not
legal entities, and governments and agencies and political subdivisions thereof.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible, including, without
limitation, all interests in real estate and fixtures and all equipment,
inventory and other goods, all accounts, instruments, chattel paper, documents,
money and general intangibles (as such terms are defined in the Uniform
Commercial Code as in effect in all applicable jurisdictions) whether now owned
or hereafter acquired.
"Purchaser" has the meaning specified in the introductory paragraph
hereof.
"Reinvestment Yield" means, with respect to the Called Principal of any
Senior Subordinated Note, the yield to maturity implied by the sum of 0.50% plus
(i) the yields reported, as of 10:00 A.M. (Indianapolis time) on the Business
Day immediately preceding the Settlement Date with respect to such Called
Principal, on the display designated as "Page T 500", on the Telerate Service
(or such other display as may replace Page T 500 on the Telerate Service) for
actively traded U.S. Treasury
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securities having a maturity equal to (or, if not available, having a maturity
closest to) the Remaining Average Life of such Called Principal as of such
Settlement Date or, if such yields shall not be reported as of such time or the
yields reported as of such time shall not be ascertainable, (ii) the Treasury
Constant Maturity Series yields reported for the latest day for which such
yields shall have been so reported as of the Business Day immediately preceding
the Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15(519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date. Such
implied yield shall be determined, if necessary, by (a) converting U.S. Treasury
bill quotations to bond equivalent yields in accordance with accepted financial
practice and (b) by interpolating linearly between reported yields.
"Remaining Average Life" means, with respect to the Called Principal of
the Senior Subordinated Note, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the
sum of the products obtained by multiplying (a) each Remaining Scheduled Payment
of such Called Principal (but not of interest thereon) by (b) the number of
years (calculated to the nearest one-twelfth year) that will elapse between the
Settlement Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the Called
Principal of the Senior Subordinated Note, all payments of such Called Principal
and interest thereon that would be due on or after the Settlement Date, to and
including the scheduled due dates thereof, with respect to such Called Principal
if no payment of such Called Principal were made prior to its scheduled due
dates.
"Securities Act" means the Securities Act of 1933, as amended, and any
successor statute.
"Senior Debt" means Debt of the Company, including all interest and
fees accruing thereon or in connection therewith or any renewal, extension,
amendment, supplement or other modification to any of the documentation in
respect thereof, which is incurred pursuant to the terms of that certain Credit
Agreement dated as of November 19, 1997 among the Company, the lenders a party
thereto and NBD Bank, N.A., as Agent.
"Senior Subordinated Note" has the meaning specified in Section 2.
"Settlement Date" means, with respect to the Called Principal of any
Senior Subordinated Note, the date on which such Called Principal (i) is to be
prepaid or purchased at the Make-Whole Prepayment Price, or (ii) becomes or is
declared to be immediately due and payable pursuant to Section 9A, as the
context may require.
"Subsidiary" means any corporation, trust, association, partnership or
other business entity of which more than 50% of the total voting power of shares
of stock or other interests entitled to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled,
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directly or indirectly, by the Company or one or more of the other Subsidiaries
or a combination thereof.
"Wholly Owned Subsidiary" means a Person of which all of the issued and
outstanding shares of stock (other than directors' qualifying shares as may be
required by law) or similar equity interests shall be owned by the Company
and/or one or more of its Wholly Owned Subsidiaries.
"Yield-Maintenance Premium" means, with respect to any Senior
Subordinated Note, a premium equal to the excess, if any, of the Discounted
Value of the Called Principal of such Senior Subordinated Note over the sum of
such Called Principal plus interest accrued thereon to (including interest due
on) the Settlement Date with respect to such Called Principal. The
Yield-Maintenance Premium shall in no event be less than zero.
11B. Accounting Terms. For purposes of this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to them in
conformity with GAAP. Financial statements and other information required to be
delivered by the Company pursuant to Section 7 shall be prepared in conformity
with GAAP as in effect at the time of such preparation.
12. JUDICIAL PROCEEDINGS.
12A. Consent to Jurisdiction. The Company hereby irrevocably submits to
the non-exclusive jurisdiction of any Indiana State or Federal court sitting in
the City of Indianapolis over any suit, action or proceeding arising out of or
relating to this Agreement, the Senior Subordinated Note, the other Credit
Documents or the transactions contemplated hereby or thereby. To the fullest
extent they may effectively do so under applicable law, the Company irrevocably
waives and agrees not to assert, by way of motion, as a defense or otherwise,
any claim that it is not subject to the jurisdiction of any such court, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding brought in any such court and any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.
12B. Enforcement of Judgments. The Company agrees, to the fullest
extent it may effectively do so under applicable law, that a judgment in any
suit, action or proceeding of the nature referred to in Section 12A brought in
any such court shall be conclusive and binding upon the Company subject to
rights of appeal, as the case may be, and may be enforced in the courts of the
United States of America or the State of Indiana (or any other courts to the
jurisdiction of which the Company is or may be subject) by a suit upon such
judgment.
12C. Waiver of Jury Trial. THE COMPANY HEREBY WAIVES ITS RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING UNDER OR OUT OF
THIS AGREEMENT, THE SENIOR SUBORDINATED NOTE, ANY OTHER CREDIT DOCUMENT OR ANY
ISSUES RELATING HERETO, THERETO OR TO THE SUBJECT MATTER OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY. The scope of this waiver is intended to be
all-encompassing of any and all disputes that may be filed
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in any court and that relate to the subject matter of the transactions
contemplated hereby, including without limitation, contract claims, tort claims,
breach of duty claims, and all other common law and statutory claims. The
Company, each Purchaser and each other Purchaser acknowledges that this waiver
is a material inducement to enter into a business relationship, that each has
already relied on the waiver in entering into or accepting the benefits of this
Agreement and that each will continue to rely on the waiver in their related
future dealings. The Company further warrants and represents that it has
reviewed this waiver with its legal counsel, and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THIS AGREEMENT, THE SENIOR SUBORDINATED NOTE
OR THE OTHER CREDIT DOCUMENTS. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
12D. No Limitation on Service or Suit. Nothing in this Section 12 shall
affect the right of the Purchaser or the Purchaser to serve process in any
manner permitted by law, or limit any right that the Purchaser or the Purchaser
may have to bring proceedings against the Company in the courts of any
jurisdiction or to enforce in any lawful manner a judgment obtained in one
jurisdiction in any other jurisdiction.
13. MISCELLANEOUS.
13A. Payments. The Company agrees that, so long as the Senior
Subordinated Note remain outstanding, it will make all payments of principal of,
premium, if any, and interest on, the Senior Subordinated Note in accordance
with the terms of this Agreement.
13B. Amendments; Waivers. This Agreement may not be changed orally, but
(subject to the provisions of this Section 13B) only by an agreement in writing
signed by the party against whom enforcement of any waiver, change, modification
or discharge is sought. Any such waiver shall be effective only in the specific
instance and for the specific purpose for which it was given. No course of
dealing between the Company and the Purchaser and no failure to exercise or
delay in exercising any rights or remedies hereunder or under the Senior
Subordinated Note or any other Credit Document shall operate as a waiver of any
rights or remedies of any Purchaser, and no single or partial exercise by any
Purchaser of any right or remedy under this Agreement or any other Credit
Document shall preclude any other or further exercise thereof or the exercise of
any other right or remedy.
13C. Survival of Representations and Warranties; Entire Agreement. All
representations and warranties contained herein or made in writing by or on
behalf of the Company in connection herewith shall survive the execution and
delivery of this Agreement and the Senior Subordinated Note. Subject to the
preceding sentence, this Agreement, the Senior Subordinated Note and the other
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Credit Documents embody the entire agreement and understanding between the
parties hereto and supersede all prior agreements and understandings, if any,
relating to the subject matter hereof. Without limiting any provisions hereof,
the Company agrees that it shall continue to perform and comply with its
covenants, obligations and duties contained herein until all of the Senior
Subordinated Note are paid in full and all amounts payable hereunder are paid in
full.
13D. Successors and Assigns. All covenants and agreements in this
Agreement and each other Credit Document by or on behalf of any of the parties
hereto shall bind and inure to the benefit of the respective successors and
assigns of the parties hereto whether so expressed or not; provided, however,
that the Company may not transfer or assign any of its rights or obligations
under this Agreement or any other Credit Document without the prior written
consent of all Purchaser.
13E. Notices. All communications provided for hereunder shall be in
writing and sent by telecopier, certified or registered first class mail or
nationwide overnight delivery service (with charges prepaid) and (i) if to the
Purchaser, addressed to it at 54 Monument Circle, Indianapolis, Indiana 46204,
Attention: Andre B. Lacy, Chairman, or to such other address as such Purchaser
may have designated to the Company in writing, and (ii) if to the Company,
addressed to it at 4259 40th Street, S.E., Kentwood, Michigan 49512 (telecopier
number: (616) 949-1264) Attention: Thomas U. Young, President, or to such other
address for purposes hereof as the Company may have designated in writing to the
Purchaser (such notice being effective on receipt).
13F. Descriptive Headings. Descriptive headings of sections of this
Agreement are for convenience of reference only and do not constitute a part of
this Agreement.
13G. Severability. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
13H. Governing Law. THIS AGREEMENT AND THE SENIOR SUBORDINATED NOTE
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE
PARTIES SHALL BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF INDIANA, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
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IN WITNESS WHEREOF, the parties hereto have caused this Subordinated
Note Agreement to be duly executed and delivered by their respective duly
authorized officers.
Execution Date: November 19, 1997
FINISHMASTER, INC.,
an Indiana corporation
By: /s/ Roger A. Sorokin
----------------------------------------
Name: Roger A. Sorokin
Title: Vice President, Finance
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EXHIBIT A
[FORM OF SENIOR SUBORDINATED NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION UNDER SUCH ACT
OR AN EXEMPTION THEREFROM.
THE OBLIGATIONS UNDER THIS NOTE ARE SUBORDINATED TO CERTAIN SENIOR INDEBTEDNESS
TO THE EXTENT AND ON THE TERMS SET FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT
DATED AS OF NOVEMBER __, 1997, BY AND AMONG LDI, FINISHMASTER, AND THE NBD BANK,
N.A., AS AGENT, AS SUCH AGREEMENT IS FROM TIME TO TIME AMENDED.
FINISHMASTER, INC.
_____% Senior Subordinated Note
Due _________, 200__
No. [___] ________, 1997
$[----------]
FinishMaster, Inc., an Indiana corporation (the "Company"), for value
received, hereby promises to pay to
LDI, Ltd., an Indiana limited partnership
or registered assigns
on the ____ day of _______, 200__
the principal amount of
[INSERT PRINCIPAL AMOUNT IN WORDS] DOLLARS (U.S. $__________)
and to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at the
rate of ______% per annum from the date hereof until maturity. Interest shall be
payable, to the extent accrued and unpaid, quarterly in arrears on the thirtieth
day of each March, June, September and December in each year (with the first
such payment being due on [_______], 1997) and at maturity (whether on the date
stated, upon acceleration, pursuant to a permitted demand, upon commencement of
bankruptcy or insolvency proceedings or otherwise and upon any optional
prepayment in lieu of the amount prepaid). The
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Company agrees to pay interest on any principal and premium not paid when due
(whether at maturity, by optional or mandatory prepayment, upon acceleration,
pursuant to a permitted demand, upon commencement of bankruptcy or insolvency
proceedings or otherwise) and on any overdue installment of interest, to the
fullest extent permitted by law, at the rate which is 2% above the interest rate
which is otherwise applicable, payable on demand. Both the principal hereof and
interest hereon and any Yield-Maintenance Premium (as defined in the
Subordinated Note Agreement referred to below) are payable in lawful money of
the United States of America and in same day funds in accordance with the
instructions with respect to the Purchaser of this Note set forth on the
relevant Purchaser Schedule to that certain Subordinated Note Agreement dated as
of November ___, 1997 (as amended, supplemented or otherwise modified from time
to time, the "Subordinated Note Agreement"), entered into by and among the
Company and the original Purchaser listed on the signature pages thereof.
This Note was issued pursuant to the terms and provisions of the
Subordinated Note Agreement. This Note and the holder hereof are subject to
certain obligations pursuant to, and is entitled to all the rights and benefits
provided for or referred to in, the Subordinated Note Agreement. Reference is
hereby made to the Subordinated Note Agreement for a statement of such
obligations, rights and benefits and other terms applicable hereto (including
provisions relating to the enforcement hereof), by each of which the holder and
any transferee of this Note shall be benefited and bound.
This Note may be declared due prior to their expressed maturity date,
all in the events, on the terms and in the manner provided in the Subordinated
Note Agreement.
The Company will make the required payments of principal at maturity
and in the amounts specified in the Subordinated Note Agreement. This Note is
not subject to prepayment or redemption at the option of the Company prior to
its expressed maturity date except on the terms and conditions and in the
amounts and with the premium, if any, set forth in the Subordinated Note
Agreement.
This Note is registered on the books of the Company and is transferable
only by surrender hereof for registration of transfer at the principal office of
the Company duly endorsed or accompanied by a written instrument of transfer
duly executed by the holder of this Note or such holder's attorney duly
authorized in writing. Payment of or on account of principal, Yield Maintenance
Premium, if any, and interest on this Note shall be made only to or upon the
order in writing of the registered holder.
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THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE
RIGHTS OF THE COMPANY AND ANY PURCHASER HEREOF SHALL BE GOVERNED BY, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.
FINISHMASTER, INC.
By:
------------------------------------------
Name:
Title:
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