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EXHIBIT 4.5.1
REVOLVING
CREDIT AND GUARANTY AGREEMENT
DATED AS OF AUGUST 6, 2004
AMONG
STANADYNE CORPORATION,
AS BORROWER,
STANADYNE AUTOMOTIVE HOLDING CORP. AND
CERTAIN SUBSIDIARIES OF STANADYNE CORPORATION,
AS GUARANTORS,
VARIOUS LENDERS,
GOLDMAN SACHS CREDIT PARTNERS L.P.,
AS SOLE LEAD ARRANGER, SOLE BOOKRUNNER AND SYNDICATION AGENT,
THE CIT GROUP/BUSINESS CREDIT, INC.,
AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT,
ANTARES CAPITAL CORPORATION
AS CO-DOCUMENTATION AGENT,
AND
LASALLE BANK NATIONAL ASSOCIATION,
AS CO-DOCUMENTATION AGENT
--------------------------------------------------------
$35,000,000 SENIOR SECURED REVOLVING CREDIT FACILITIES
--------------------------------------------------------
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS AND
INTERPRETATION..................................................................
1
1.1.
Definitions.....................................................................................
2
1.2.
Accounting
Terms................................................................................
38
1.3.
Interpretation,
etc.............................................................................
39
SECTION 2. LOANS AND LETTERS OF
CREDIT.....................................................................
39
2.1.
Revolving
Loans.................................................................................
39
2.2. Swing
Line
Loans................................................................................
40
2.3.
Issuance of Letters of Credit and Purchase of Participations
Therein............................ 43
2.4. Pro
Rata Shares; Availability of
Funds..........................................................
48
2.5. Use
of
Proceeds.................................................................................
48
2.6.
Evidence of Debt; Register; Lenders' Books and Records;
Notes................................... 49
2.7.
Interest on
Loans...............................................................................
49
2.8.
Conversion/Continuation.........................................................................
51
2.9.
Default
Interest................................................................................
52
2.10.
Fees...........................................................................................
52
2.11.
Scheduled Payments/Commitment
Reductions.......................................................
53
2.12.
Voluntary Prepayments/Commitment
Reductions....................................................
53
2.13.
Mandatory Prepayments/Commitment
Reductions....................................................
55
2.14.
Application of
Prepayments/Reductions..........................................................
57
2.15.
General Provisions Regarding
Payments..........................................................
57
2.16.
Ratable
Sharing................................................................................
59
2.17.
Making or Maintaining Eurodollar Rate
Loans....................................................
60
2.18.
Increased Costs; Capital
Adequacy..............................................................
61
2.19.
Taxes; Withholding,
etc........................................................................
63
2.20.
Obligation to
Mitigate.........................................................................
65
2.21.
Defaulting
Lenders.............................................................................
66
2.22.
Removal or Replacement of a
Lender.............................................................
67
SECTION 3. CONDITIONS
PRECEDENT............................................................................
68
3.1.
Closing
Date....................................................................................
68
3.2.
Conditions to Each Credit
Extension.............................................................
73
SECTION 4. REPRESENTATIONS AND
WARRANTIES..................................................................
74
4.1.
Organization; Requisite Power and Authority;
Qualification...................................... 75
4.2.
Capital Stock and
Ownership.....................................................................
75
4.3. Due
Authorization...............................................................................
75
4.4. No
Conflict.....................................................................................
75
4.5.
Governmental
Consents...........................................................................
76
4.6.
Binding
Obligation..............................................................................
76
4.7.
Historical Financial
Statements.................................................................
76
4.8.
Projections.....................................................................................
76
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4.9. No
Material Adverse
Change......................................................................
77
4.10. No
Restricted Junior
Payments..................................................................
77
4.11.
Adverse Proceedings,
etc.......................................................................
77
4.12.
Payment of
Taxes...............................................................................
77
4.13.
Properties.....................................................................................
77
4.14.
Environmental
Matters..........................................................................
78
4.15. No
Defaults....................................................................................
79
4.16.
Material
Contracts.............................................................................
79
4.17.
Governmental
Regulation........................................................................
79
4.18. Margin
Stock...................................................................................
79
4.19.
Employee
Matters...............................................................................
79
4.20.
Employee Benefit
Plans.........................................................................
80
4.21.
Certain
Fees...................................................................................
80
4.22.
Solvency.......................................................................................
80
4.23.
Related
Agreements.............................................................................
80
4.24.
Compliance with Statutes,
etc..................................................................
81
4.25.
Disclosure.....................................................................................
81
4.26.
Subordination;
Designation of the Credit Documents as "Designated Senior
Indebtedness"; Etc... 81
4.27.
Aggregate Borrowing Base
Calculation...........................................................
82
SECTION 5. AFFIRMATIVE
COVENANTS...........................................................................
82
5.1. Financial Statements and
Other
Reports..........................................................
82
5.2.
Existence.......................................................................................
87
5.3.
Payment of Taxes and
Claims.....................................................................
87
5.4.
Maintenance of
Properties.......................................................................
87
5.5.
Insurance.......................................................................................
87
5.6.
Inspections.....................................................................................
88
5.7.
Lenders
Meetings................................................................................
88
5.8.
Compliance with
Laws............................................................................
89
5.9.
Environmental...................................................................................
89
5.10.
Subsidiaries...................................................................................
90
5.11.
Additional Material Real Estate
Assets.........................................................
91
5.12.
Interest Rate
Protection.......................................................................
91
5.13.
Further
Assurances.............................................................................
92
5.14. Cash
Management
Systems........................................................................
92
SECTION 6. NEGATIVE
COVENANTS..............................................................................
93
6.1.
Indebtedness....................................................................................
93
6.2.
Liens...........................................................................................
95
6.3.
Equitable
Lien..................................................................................
97
6.4. No
Further Negative
Pledges.....................................................................
97
6.5.
Restricted Junior
Payments......................................................................
98
6.6.
Restrictions on Subsidiary
Distributions........................................................
99
6.7.
Investments.....................................................................................
100
6.8.
Financial
Covenants.............................................................................
101
6.9.
Fundamental Changes; Disposition of Assets;
Acquisitions........................................ 101
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6.10.
Disposal of Subsidiary
Interests...............................................................
102
6.11.
Sales and
Lease-Backs..........................................................................
103
6.12.
Transactions with Shareholders and
Affiliates..................................................
103
6.13.
Conduct of
Business............................................................................
103
6.14.
Permitted Activities of
Holdings...............................................................
103
6.15.
Amendments or Waivers of Certain Related
Agreements............................................ 104
6.16.
Amendments or Waivers with respect to Subordinated
Indebtedness................................ 104
6.17.
Fiscal
Year....................................................................................
104
6.18. No
Other "Designated Senior
Indebtedness"......................................................
104
6.19.
Maximum Consolidated Capital
Expenditures......................................................
104
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SECTION 7.
GUARANTY........................................................................................
105
7.1.
Guaranty of the
Obligations.....................................................................
105
7.2.
Contribution by
Guarantors......................................................................
105
7.3.
Payment by
Guarantors...........................................................................
106
7.4.
Liability of Guarantors
Absolute................................................................
106
7.5.
Waivers by
Guarantors...........................................................................
108
7.6.
Guarantors' Rights of Subrogation, Contribution,
etc............................................ 109
7.7.
Subordination of Other
Obligations..............................................................
110
7.8.
Continuing
Guaranty.............................................................................
110
7.9.
Authority of Guarantors or
Borrower.............................................................
110
7.10.
Financial Condition of Borrower and
Guarantors.................................................
110
7.11.
Bankruptcy,
etc................................................................................
111
7.12.
Discharge of Guaranty Upon Sale of
Guarantor...................................................
111
SECTION 8. EVENTS OF
DEFAULT...............................................................................
112
8.1.
Events of
Default...............................................................................
112
8.2. Borrower's
Right to
Cure........................................................................
115
SECTION 9. AGENTS
.........................................................................................
115
9.1.
Appointment of
Agents...........................................................................
115
9.2.
Powers and
Duties...............................................................................
116
9.3.
General
Immunity................................................................................
116
9.4.
Agents Entitled to Act as
Lender................................................................
117
9.5.
Lenders' Representations, Warranties and
Acknowledgment.........................................
117
9.6. Right
to
Indemnity..............................................................................
118
9.7.
Successor Administrative Agent, Collateral Agent and Swing Line
Lender.......................... 118
9.8.
Collateral Documents and
Guaranty...............................................................
119
SECTION 10.
MISCELLANEOUS..................................................................................
120
10.1.
Notices........................................................................................
120
10.2.
Expenses.......................................................................................
120
10.3.
Indemnity......................................................................................
121
10.4.
Set-Off........................................................................................
122
10.5.
Amendments and
Waivers.........................................................................
122
10.6.
Successors and Assigns;
Participations.........................................................
124
10.7.
Independence of
Covenants......................................................................
127
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10.8.
Survival of Representations, Warranties and
Agreements......................................... 127
10.9. No
Waiver; Remedies
Cumulative.................................................................
127
10.10.
Marshalling; Payments Set
Aside...............................................................
128
10.11.
Severability..................................................................................
128
10.12.
Obligations Several; Independent Nature of Lenders'
Rights.................................... 128
10.13.
Headings......................................................................................
128
10.14.
APPLICABLE
LAW................................................................................
128
10.15.
CONSENT TO
JURISDICTION.......................................................................
128
10.16.
WAIVER OF JURY
TRIAL..........................................................................
129
10.17.
Confidentiality...............................................................................
130
10.18.
Usury Savings
Clause..........................................................................
130
10.19.
Counterparts..................................................................................
131
10.20.
Effectiveness.................................................................................
131
10.21. USA
Patriot
Act...............................................................................
131
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v
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APPENDICES: A
Commitments
B Notice
Addresses
SCHEDULES: 1.1(a) Certain
Adjustments to Financial Covenant Definitions
1.1(b) Existing Capital Leases
3.1(i) Closing Date Mortgaged Properties
3.1(k) Phase I Report
4.1
Jurisdictions of Organization and Qualification
4.2
Capital Stock and Ownership
4.13 Real Estate
Assets
4.14 Certain
Environmental Matters
4.17 Material
Contracts
4.20 Employee
Benefits Plans
5.9
Environmental Disclosure
5.14 Cash
Management Systems
5.16
Post-Closing Obligations
6.1
Certain Indebtedness
6.2
Certain Liens
6.7
Certain Investments
6.12 Certain
Affiliate Transactions
EXHIBITS: A-1
Funding
Notice
A-2
Conversion/Continuation Notice
A-3
Issuance Notice
B-1
Revolving Loan Note
B-2 Swing
Line Note
C Compliance
Certificate
D Assignment
Agreement
E
Certificate Re: Non-bank Status
F-1
Closing Date Certificate
F-2
Solvency Certificate
G
Counterpart Agreement
H
Mortgage
I Landlord
Waiver and Consent Agreement
J Borrowing
Base Certificate
The Company agrees to furnish
supplementally a copy of any omitted schedule or
exhibit to the Commission upon request.
vi
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CREDIT AND GUARANTY AGREEMENT
This
CREDIT AND GUARANTY AGREEMENT, dated as of August 6, 2004, is
entered
into by and among STANADYNE CORPORATION, a
Delaware corporation ("BORROWER"),
STANADYNE AUTOMOTIVE HOLDING CORP., a
Delaware corporation ("HOLDINGS"), CERTAIN
SUBSIDIARIES OF STANADYNE CORPORATION, as
Guarantors, the Lenders party thereto
from time to time, GOLDMAN SACHS CREDIT
PARTNERS L.P. ("GSCP"), as Sole Lead
Arranger, Sole Bookrunner and Syndication
Agent, THE CIT GROUP/BUSINESS CREDIT,
INC. ("CIT"), as Collateral Agent (together
with its permitted successors in
such capacity, "COLLATERAL AGENT"), and as
Administrative Agent (together with
its permitted successors in such capacity,
"ADMINISTRATIVE AGENT"), ANTARES
CAPITAL CORPORATION, as Co-Documentation
Agent (in such capacity,
"CO-DOCUMENTATION AGENT") and LASALLE BANK
NATIONAL ASSOCIATION, as
Co-Documentation Agent (in such capacity,
"CO-DOCUMENTATION Agent").
RECITALS:
WHEREAS,
capitalized terms used in these Recitals shall have the
respective meanings set forth for such
terms in Section 1.1 hereof;
WHEREAS,
Holdings owns all of the capital stock of Borrower;
WHEREAS,
KSTA Acquisition, LLC has entered into the Stock Purchase
Agreement with the Sellers pursuant to
which it has agreed to acquire Holdings;
WHEREAS,
Lenders have agreed to extend certain revolving credit
facilities
to Borrower, in an aggregate principal
amount not to exceed $35.0 million of
Commitments;
WHEREAS,
the proceeds of the Revolving Loans will be used to fund
permitted capital expenditures and
Permitted Acquisitions and to provide for the
ongoing working capital requirements of
Borrower following the Acquisition and
for general corporate purposes;
WHEREAS,
Borrower has agreed to secure all of its Revolving Obligations
by
granting to Collateral Agent, for the
benefit of Revolving Secured Parties, a
First Priority Lien on its Liquid
Collateral and granting a Second Priority Lien
on its Fixed Collateral;
WHEREAS,
each Guarantor has agreed to guarantee the obligations of
Borrower hereunder and to secure its
Revolving Obligations by granting to
Collateral Agent, for the benefit of
Revolving Secured Parties, a First Priority
Lien on its Liquid Collateral, and a Second
Priority Lien on its Fixed
Collateral, including a pledge of all of
the Capital Stock of each of its
Domestic Subsidiaries and 65% of all the
Capital Stock of each of its Foreign
Subsidiaries (excluding Stanadyne
Amalgamations Private Limited and Stanadyne
Systems Private Limited).
NOW,
THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained,
the parties hereto agree as follows:
SECTION 1. DEFINITIONS AND
INTERPRETATION
<PAGE>
1.1.
DEFINITIONS. The following terms used herein, including in the
preamble, recitals, exhibits and schedules
hereto, shall have the following
meanings:
"ACCOUNTS" means, as to each Credit Party, all of such Credit
Party's "accounts" as defined in the UCC,
whether now owned or hereafter
acquired, including, without limitation,
all present and future rights of such
Credit Party to payment of a monetary
obligation, whether or not earned by
performance, which is not evidenced by
chattel paper or an instrument, (a) for
property that has been or is to be sold,
leased, licensed, assigned, or
otherwise disposed of, (b) for services
rendered or to be rendered, (c) for a
secondary obligation incurred or to be
incurred, or (d) arising out of the use
of a credit or charge card or information
contained on or for use with such a
card.
"ACQUISITION" means the acquisition by KSTA Acquisition, LLC of
Holdings in accordance with the Acquisition
Documents.
"ACQUISITION DOCUMENTS" means the Stock Purchase Agreement and
all
other material documents executed and
delivered in accordance with the terms
thereof and in connection therewith.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date with respect to an
Interest Period for a Eurodollar Rate
Loan, and subject to availability, a
variable rate of interest equal to: (a) the
rate of interest determined by
Administrative Agent at which deposits in U.S.
Dollars are offered for the relevant
Interest Period based on information
presented on Telerate Systems at Page 3750
as of 11:00 A.M. (London time) on the
day which is two (2) Business Days prior to
the first day of such Interest
Period, provided that, if at least two such
offered rates appear on the Telerate
Page (or any successor thereof) 3750 in
respect of such Interest Period, the
arithmetic mean of all such rates (as
determined by Administrative Agent) will
be the rate used; divided by (b) a number
equal to 1.0 minus the aggregate (but
without duplication) of the rates
(expressed as a decimal fraction) of
Eurocurrency Reserve Requirements in effect
on the day which is two (2) Business
Days prior to the beginning of such
Interest Period or (b) if the rate under
clause (a) is not available, at
Administrative Agent's election (i) the rate set
forth in the New York edition of The Wall
Street Journal under the "Money Rates"
section for "London Interbank Offered
Rates" or (ii) the applicable LIBOR quoted
to Administrative Agent by JPMorgan Chase
Bank (or any successor thereof).
"ADMINISTRATIVE AGENT" as defined in the preamble hereto.
"ADVERSE PROCEEDING" means any action, suit, proceeding
(whether
administrative, judicial or otherwise),
governmental investigation or
arbitration (whether or not purportedly on
behalf of Holdings or any of its
Subsidiaries) at law or in equity, or
before or by any Governmental Authority,
domestic or foreign (including any
Environmental Claims), whether pending or, to
the knowledge of Holdings or any of its
Subsidiaries, threatened against or
affecting Holdings or any of its
Subsidiaries or any property of Holdings or any
of its Subsidiaries.
"AFFECTED LENDER" as defined in Section 2.17(b).
"AFFECTED LOANS" as defined in Section 2.17(b).
2
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"AFFILIATE" means, as applied to any Person, any other Person
directly or indirectly controlling,
controlled by, or under common control with,
that Person. For the purposes of this
definition, "control" (including, with
correlative meanings, the terms
"controlling", "controlled by" and "under common
control with"), as applied to any Person,
means the possession, directly or
indirectly, of the power (i) to vote 5% or
more of the Securities having
ordinary voting power for the election of
directors of such Person or (ii) to
direct or cause the direction of the
management and policies of that Person,
whether through the ownership of voting
securities or by contract or otherwise;
provided, that no Agent or Lender shall be
deemed to be an "Affiliate" of any
Credit Party.
"AGENT" means each of Syndication Agent, Administrative Agent,
Collateral Agent and each Co-Documentation
Agent.
"AGGREGATE AMOUNTS DUE" as defined in Section 2.16.
"AGGREGATE BORROWING BASE" means, as of any date of
determination,
an amount equal to the sum at such time
of:
(a) 85% of the book value of the Eligible Accounts; and
(b) the lesser of (1) 60% of the cost, calculated on a
first-in-first-out basis, of Eligible Inventory at such time and
(2) 85%
of the
appraised net orderly liquidation value of Eligible Inventory
at
such
time;
in each case, less any Reserves reasonably
established by Administrative Agent
at such time. Administrative Agent shall
have the right from time to time to
adjust any of the advance rates set forth
above in its Permitted Discretion.
"AGGREGATE PAYMENTS" as defined in Section 7.2.
"AGREEMENT" means this Revolving Credit and Guaranty Agreement,
dated as of August 6, 2004, as it may be
amended, supplemented or otherwise
modified from time to time.
"APPLICABLE COMMITMENT FEE PERCENTAGE" means, (a) from the
Closing
Date until the commencement of the first
Interest Period commencing after the
date of delivery of the Compliance
Certificate and the financial statements for
the second full Fiscal Quarter after the
Closing Date, 0.50% per annum and (b)
thereafter, a percentage per annum,
determined by reference to the Leverage
Ratio in effect from time to time as set
forth below:
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LEVERAGE APPLICABLE
COMMITMENT
RATIO
FEE PERCENTAGE
------------
---------------------
> 2.50:1.00
0.50%
-
< 2.50:1.00
0.375%
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No change in the Applicable Commitment Fee
Percentage shall be effective until
three Business Days after the date on which
Administrative Agent shall have
received the applicable financial
statements and a Compliance Certificate
pursuant to Section 5.1(d) calculating the
Leverage
3
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Ratio. At any time and so long as Borrower
has not submitted to Administrative
Agent the applicable information as and
when required under Section 5.1(d), the
Applicable Commitment Fee Percentage shall
be determined as if the Leverage
Ratio were in excess of 2.50:1.00. Within
one Business Day of receipt of the
applicable information under Section
5.1(d), Administrative Agent shall give
each Lender telefacsimile or telephonic
notice (confirmed in writing) of the
Applicable Commitment Fee Percentage in
effect from such date. No reduction in
the Applicable Commitment Fee Percentage
hereunder shall be effected for so long
as any Default or Event of Default has
occurred and is continuing.
"APPLICABLE MARGIN" means:
(a) from the Closing Date until the commencement of the first
interest period occurring after the date of
delivery of the Compliance
Certificate and the financial statements
for the second full Fiscal Quarter
after the Closing Date with respect to
Revolving Loans and Swing Line Loans that
are Base Rate Loans, 1.25% per annum and
with respect to Revolving Loans that
are Eurodollar Loans, 2.25% per annum;
and
(b) thereafter, with respect to Revolving Loans and Swing Line
Loans, a percentage, per annum, determined
by reference to the Leverage Ratio in
effect from time to time as set forth
below:
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APPLICABLE MARGIN FOR
APPLICABLE MARGIN FOR REVOLVING LOANS
AND
REVOLVING LOANS
SWING LINE LOANS
LEVERAGE RATIO
(EURODOLLAR LOANS) (BASE RATE
LOANS)
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> 3.00:1.00
2.25%
1.25%
-
< 3.00:1.00
> 2.00:1.00
2.00%
1.00%
-
< 2.00:1.00
1.75%
0.75%
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No change in the Applicable Margin shall be
effective until three Business Days
after the date on which Administrative
Agent shall have received the applicable
financial statements and a Compliance
Certificate pursuant to Section 5.1(d)
calculating the Leverage Ratio. At any time
and so long as Borrower has not
submitted to Administrative Agent the
applicable information as and when
required under Section 5.1(d), the
Applicable Margin for Revolving Loans and
Swing Line Loans shall be determined as if
the Leverage Ratio were in excess of
3.00:1.00. Within one Business Day of
receipt of the applicable information
under Section 5.1(d), Administrative Agent
shall give each Lender telefacsimile
or telephonic notice (confirmed in writing)
of the Applicable Margin in effect
from such date. No reduction in the
Applicable Margin hereunder shall be
effected for so long as any Default or
Event of Default has occurred and is
continuing.
"ASSET SALE" means a sale, lease or sub-lease (as lessor or
sublessor), sale and leaseback, assignment,
conveyance, transfer or other
disposition to, or any exchange of
property
4
<PAGE>
with, any Person (other than Borrower or
any Guarantor Subsidiary or, in the
case of a non-Guarantor Subsidiary, another
non-Guarantor Subsidiary), in one
transaction or a series of transactions, of
all or any part of Holdings' or any
of its Subsidiaries' businesses, assets or
properties of any kind, whether real,
personal, or mixed and whether tangible or
intangible, whether now owned or
hereafter acquired, including, without
limitation, the Capital Stock of any of
Holdings' Subsidiaries, other than (i)
inventory (or other assets) sold,
licensed or leased in the ordinary course
of business (excluding any such sales,
licenses or leases by operations or
divisions discontinued or to be
discontinued), (ii) disposals of obsolete,
worn-out or surplus property for
aggregate consideration of less than
$2,000,000 with respect to any transaction
or series of related transactions or in the
aggregate during any Fiscal Year,
and (iii) sales of other assets at fair
market value for aggregate consideration
of less than $2,000,000 with respect to any
transaction or series of related
transactions or in the aggregate during any
Fiscal Year.
"ASSET SALE PROCEEDS ACCOUNT" means an account established
pursuant
to the terms of Section 6.9(c) which
account shall be subject to a First
Priority Lien in favor of the Term
Collateral Agent on behalf of the Term
Secured Parties and a Second Priority Lien
in favor of the Revolving Collateral
Agent on behalf of the Revolving Secured
Parties.
"ASSIGNMENT AGREEMENT" means an Assignment and Assumption
Agreement
substantially in the form of Exhibit E,
with such amendments or modifications as
may be approved by Administrative
Agent.
"AUTHORIZED OFFICER" means, as applied to any Person, any
individual
holding the position of chairman of the
board (if an officer), chief executive
officer, president or one of its vice
presidents (or the equivalent thereof),
and such Person's chief financial officer,
treasurer or controller.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled
"Bankruptcy," as now and hereafter in
effect, or any successor statute.
"BASE RATE" means, for any day, a rate per annum equal to the
greater of (i) the Prime Rate in effect on
such day and (ii) the Federal Funds
Effective Rate in effect on such day plus
1/2 of 1%. Any change in the Base Rate
due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be
effective on the effective day of such
change in the Prime Rate or the Federal
Funds Effective Rate, respectively.
"BASE RATE LOAN" means a Loan bearing interest at a rate
determined
by reference to the Base Rate.
"BENEFICIARY" means each Agent, Issuing Bank, Lender, Lender
Counterparty, and Indemnitee.
"BORROWER" means Stanadyne Corporation.
"BORROWING AVAILABILITY" means as of any date of determination,
the
Aggregate Borrowing Base minus any Reserves
(without duplication) reasonably
established by Administrative Agent as of
such time, including, without
limitation, the Reserves provided for in
Section 5.15.
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"BORROWING BASE CERTIFICATE" means a certificate by Borrower's
chief
financial officer substantially in the form
of Exhibit J, with such modification
to form and presentation as Administrative
Agent may reasonably request from
time to time, delivered by Borrower
pursuant to Section 5.1(m).
"BUSINESS DAY" means (i) any day excluding Saturday, Sunday and
any
day which is a legal holiday under the laws
of the State of New York or is a day
on which banking institutions located in
such state are authorized or required
by law or other governmental action to
close and (ii) with respect to all
notices, determinations, fundings and
payments in connection with the Adjusted
Eurodollar Rate or any Eurodollar Rate
Loans, the term "BUSINESS DAY" shall mean
any day which is a Business Day described
in clause (i) and which is also a day
for trading by and between banks in Dollar
deposits in the London interbank
market.
"CAPITAL LEASE" means, as applied to any Person, any lease of
any
property (whether real, personal or mixed)
by that Person as lessee that, in
conformity with GAAP, is or should be
accounted for as a capital lease on the
balance sheet of that Person.
"CAPITAL STOCK" means any and all shares, interests,
participations
or other equivalents (however designated)
of capital stock of a corporation, any
and all equivalent ownership interests in a
Person (other than a corporation),
including, without limitation, partnership
interests and membership interests,
and any and all warrants, rights or options
to purchase or other arrangements or
rights to acquire any of the foregoing.
"CASH" means money, currency or a credit balance in any demand
or
Deposit Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or
directly and unconditionally guaranteed as
to interest and principal by the United
States Government or (b) issued by any
agency of the United States the obligations
of which are backed by the full
faith and credit of the United States, in
each case maturing within one year
after such date; (ii) marketable direct
obligations issued by any state of the
United States of America or any political
subdivision of any such state or any
public instrumentality thereof, in each
case maturing within one year after such
date and having, at the time of the
acquisition thereof, a rating of at least
A-1 from S&P or at least P-1 from
Moody's; (iii) commercial paper maturing no
more than one year from the date of
creation thereof and having, at the time of
the acquisition thereof, a rating of at
least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or
bankers' acceptances maturing within
one year after such date and issued or
accepted by any Lender or by any
commercial bank organized under the laws of
the United States of America or any
state thereof or the District of Columbia
that has Tier 1 capital (as defined in
the regulations of its primary Federal
banking regulator) of not less than
$100,000,000; and (v) shares of any money
market mutual fund that (a) has
substantially all of its assets invested
continuously in the types of
investments referred to in clauses (i) and
(ii) above, (b) has net assets of not
less than $500,000,000, and (c) has the
highest rating obtainable from either
S&P or Moody's.
"CERTIFICATE RE: NON-BANK STATUS" means a certificate
substantially
in the form of Exhibit F.
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"CHANGE OF CONTROL" means, at any time:
(i) Sponsor shall cease to beneficially own and control at least
51%
on a fully diluted basis of the economic
and voting interests in the Capital
Stock of Holdings;
(ii) any Person or "group" (within the meaning of Rules 13d-3
and
13d-5 under the Exchange Act) other than
Sponsor (a) shall have acquired
beneficial ownership of 35% or more on a
fully diluted basis of the voting
and/or economic interest in the Capital
Stock of Holdings or (b) shall have
obtained the power (whether or not
exercised) to elect a majority of the members
of the board of directors (or similar
governing body) of Holdings;
(iii) Holdings shall cease to beneficially own and control 100% on
a
fully diluted basis of the economic and
voting interest in the Capital Stock of
Borrower;
(iv) the majority of the seats (other than vacant seats) on the
board of directors (or similar governing
body) of Borrower cease to be occupied
by Persons who either (a) were members of
the board of directors of Borrower on
the Closing Date or (b) were nominated for
election by Sponsor or the board of
directors of Borrower, a majority of whom
were directors on the Closing Date or
whose election or nomination for election
was previously approved by a majority
of such directors; or
(v) any "change of control" or similar event shall occur under
the
Senior Subordinated Notes or the
Refinancing Notes that would require Borrower
to tender for or otherwise give rise to an
accelerated repayment of the Senior
Subordinated Notes or the Refinancing
Notes.
"CLOSING DATE" means the first date on which the conditions
precedent set forth in Section 3.1 are
satisfied or waived in accordance with
the terms hereof and the Term Loans are
made to Borrower.
"CLOSING DATE CERTIFICATE" means a Closing Date Certificate
substantially in the form of Exhibit
G-1.
"CLOSING DATE MORTGAGED PROPERTY" as defined in Section 3.1(i).
"CO-DOCUMENTATION AGENT" is defined in the preamble hereto.
"COLLATERAL" means the Fixed Collateral and the Liquid
Collateral.
"COLLATERAL AGENT" is defined in the preamble hereto.
"COLLATERAL DOCUMENTS" means the Pledge and Security Agreement,
the
Mortgages, the IP Security Agreements, the
Control Agreements, the Landlord
Personal Property Collateral Access
Agreements, if any, the Intercreditor
Agreement and all other instruments,
documents and agreements delivered by any
Credit Party pursuant to this Agreement or
any of the other Credit Documents in
order to, or purporting to, (a) grant to
Collateral Agent, for the benefit of
Revolving Secured Parties, a Lien on any
real, personal or mixed property of
that Credit Party as security for the
Obligations and/or (b) perfect such Liens.
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<PAGE>
"COLLATERAL QUESTIONNAIRE" means a certificate in form
satisfactory
to Administrative Agent that provides
information with respect to the personal
or mixed property of each Credit Party.
"COMMINGLED INVENTORY" means Inventory of Borrower or a
Guarantor
that is commingled (whether pursuant to a
consignment, a toll manufacturing
agreement or otherwise) with Inventory of
another Person (other than Borrower or
a Guarantor) at a location owned or leased
by Borrower or a Guarantor to the
extent that such Inventory of Borrower or a
Guarantor is not readily
identifiable.
"COMMITMENT" means the commitment of a Lender to make or
otherwise
fund any Revolving Loan and to acquire
participations in Letters of Credit and
Swingline Loans hereunder and "COMMITMENTS"
means such commitments of all
Lenders in the aggregate. The amount of
each Lender's Commitment is set forth on
Appendix A or in the applicable Assignment
Agreement, subject to any adjustment
or reduction pursuant to the terms and
conditions hereof. The aggregate amount
of the Commitments as of the Closing Date
is $35,000,000.
"COMPLIANCE CERTIFICATE" means a Compliance Certificate
substantially in the form of Exhibit C.
"COMPLIANCE PERIOD" means any period commencing on the date on
which
the Borrowing Availability minus the Total
Utilization of Revolving Commitments
is less than $5,000,000 for ten consecutive
days and ending on the first date
thereafter on which the Borrowing
Availability minus the Total Utilization of
Revolving Commitments has been equal to or
greater than $5,000,000 for thirty
consecutive days.
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, an amount
determined for Borrower and its
Subsidiaries on a consolidated basis equal to:
(i) the sum, without duplication, of the amounts for such period
of
(a) Consolidated Net Income, (b)
Consolidated Interest Expense, (c) provisions
for taxes based on income, (d) total
depreciation expense, (e) total
amortization expense, (f) Transaction Costs
incurred and paid in such period,
(g) losses related to the redemption of SAC
Notes not repurchased on or prior to
the Closing Date in the Debt Tender and (h)
other non-Cash items (including
non-Cash purchase accounting adjustments)
reducing Consolidated Net Income
(excluding any such non-Cash item to the
extent that it represents an accrual or
reserve for potential Cash items in any
future period or amortization of a
prepaid Cash item that was paid in a prior
period) (i) management fees and
expenses permitted by Section 6.5(f), (j)
transaction costs relating to
Permitted Acquisitions, dispositions,
financings and debt extinguishment in an
aggregate amount not to exceed $2,500,000
in any Fiscal Year and (k)
restructuring charges in an amount not to
exceed $5,000,000 per Fiscal Year,
plus (in any given Fiscal Year) up to
$10,000,000 of unused amounts under this
clause (k) from prior Fiscal Years (or
portions thereof) occurring since the
Closing Date, provided that the aggregate
amount of restructuring charges
included in this clause (k) in all periods
shall not exceed $25,000,000 in the
aggregate (in the case of clauses (b)
through (k), (x) to the extent deducted in
determining Consolidated
8
<PAGE>
Net Income and (y) unless applicable to
Persons whose income (or losses) are not
included in Consolidated Net Income
pursuant to clause (ii) of the definition
thereof), minus
(ii) other non-Cash items increasing Consolidated Net Income
for
such period (excluding any such non-Cash
item to the extent it represents the
reversal of an accrual or reserve for
potential Cash item in any prior period).
Amounts for periods prior to the Closing
Date shall be as set forth on Schedule
1.1A.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
aggregate of all expenditures of Borrower
and its Subsidiaries during such
period determined on a consolidated basis
that, in accordance with GAAP, are or
should be included in "purchase of property
and equipment" or similar items
reflected in the consolidated statement of
cash flows of Borrower and its
Subsidiaries, excluding the purchase price
of Permitted Acquisitions and
purchases made with the proceeds of
permitted Asset Sales or insurance coverage.
"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period,
Consolidated Interest Expense for such
period, excluding any amount not payable
in Cash.
"CONSOLIDATED CURRENT ASSETS" means, as at any date of
determination, the total assets of Borrower
and its Subsidiaries on a
consolidated basis that may properly be
classified as current assets in
conformity with GAAP, excluding Cash and
Cash Equivalents and deferred taxes.
"CONSOLIDATED CURRENT LIABILITIES" means, as at any date of
determination, the total liabilities of
Borrower and its Subsidiaries on a
consolidated basis that may properly be
classified as current liabilities in
conformity with GAAP, excluding deferred
taxes and the current portion of long
term debt and Capital Leases.
"CONSOLIDATED EXCESS CASH FLOW" means, for any period, an amount
(if
positive) equal to:
(i) the sum, without duplication, of the amounts for such period
of
(a) Consolidated Adjusted EBITDA (but
determined by adding back thereto, but
without duplication, any amounts deducted
in the calculation of Consolidated Net
Income for such Fiscal Year that were paid,
incurred, or accrued in violation of
any of the provisions of this Agreement),
plus (b) the Consolidated Working
Capital Adjustment, minus
(ii) the sum, without duplication, of the amounts for such period
of
(a) voluntary and scheduled repayments of
Consolidated Total Debt to the extent
such payments are not prohibited by this
Agreement (excluding repayments of (1)
Revolving Loans or Swing Line Loans or Term
Loans or (2) other revolving loans
except to the extent the commitments with
respect to such other revolving loans
are permanently reduced in connection with
such repayment), (b) Consolidated
Capital Expenditures to the extent such
Consolidated Capital Expenditures are
permitted under this Agreement (net of any
proceeds of (y) any related
financings with respect to such
expenditures and (z) any sales of assets used to
finance such expenditures), (c)
Consolidated Cash Interest Expense to the extent
related to Indebtedness permitted under
this Agreement, (d) taxes based on
income of Holdings and its Subsidiaries
9
<PAGE>
payable in Cash with respect to such period
and actually paid, (e) cash
consideration paid in respect of Permitted
Acquisitions and (f) add-backs to
Consolidated Adjusted EBITDA pursuant to
clauses (i), (j) and (k) of the
definition of Consolidated Adjusted
EBITDA.
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum,
without
duplication, of the amounts determined for
Borrower and its Subsidiaries on a
consolidated basis equal to (i)
Consolidated Cash Interest Expense, (ii)
scheduled payments of principal on
Consolidated Total Debt, (iii) Consolidated
Capital Expenditures and (iv) the portion
of taxes based on income actually paid
in cash and provisions for cash income
taxes.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense (including that portion
attributable to Capital Leases in
accordance with GAAP and capitalized
interest) of Borrower and its Subsidiaries
on a consolidated basis with respect to all
outstanding Indebtedness of Borrower
and its Subsidiaries, including all
commissions, discounts and other fees and
charges owed with respect to letters of
credit and net costs under Interest Rate
Agreements, but excluding, however, any
amounts referred to in Section 2.10(d)
payable on or before the Closing Date.
"CONSOLIDATED NET INCOME" means, for any period:
(i) the net income (or loss) of Borrower and its Subsidiaries on
a
consolidated basis for such period taken as
a single accounting period
determined in conformity with GAAP,
minus
(ii) (a) the income (or loss) of any Person (other than a
Subsidiary
of Borrower) in which any other Person
(other than Borrower or any of its
Subsidiaries) has an interest, except to
the extent of the amount of dividends
or other distributions actually paid to
Borrower or any of its Subsidiaries by
such Person during such period, (b) the
income (or loss) of any Person accrued
prior to the date it becomes a Subsidiary
of Borrower or is merged into or
consolidated with Borrower or any of its
Subsidiaries or that Person's assets
are acquired by Borrower or any of its
Subsidiaries, (c) the income of any
Subsidiary of Borrower to the extent that
the declaration or payment of
dividends or similar distributions by that
Subsidiary of that income is not at
the time permitted by operation of the
terms of its charter or any agreement,
instrument, judgment, decree, order,
statute, rule or governmental regulation
applicable to that Subsidiary, (d) any
after-tax gains or losses attributable to
Asset Sales or returned surplus assets of
any Pension Plan, and (e) (to the
extent not included in clauses (a) through
(d) above) any net extraordinary
gains or net extraordinary losses.
"CONSOLIDATED TOTAL DEBT" means, as at any date of
determination,
(i) the aggregate stated balance sheet
amount of all Indebtedness of Borrower
and its Subsidiaries determined on a
consolidated basis in accordance with GAAP,
minus (ii) the sum of (x) Cash and Cash
Equivalents on hand at Borrower and
Guarantor Subsidiaries and (y) Cash and
Cash Equivalents on hand at
non-Guarantor Subsidiaries of Borrower in
an amount not to exceed the amount of
Indebtedness of such non-Guarantor
Subsidiary which is included in the
calculation of Consolidated Total Debt.
10
<PAGE>
"CONSOLIDATED WORKING CAPITAL" means, as at any date of
determination, the excess of Consolidated
Current Assets over Consolidated
Current Liabilities.
"CONSOLIDATED WORKING CAPITAL ADJUSTMENT" means, for any period on
a
consolidated basis, the amount (which may
be a negative number) by which
Consolidated Working Capital as of the
beginning of such period exceeds (or is
less than) Consolidated Working Capital as
of the end of such period.
"CONTRACTUAL OBLIGATION" means, as applied to any Person, any
provision of any Security issued by that
Person or of any indenture, mortgage,
deed of trust, contract, undertaking,
agreement or other instrument 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.
"CONTRIBUTING GUARANTORS" as defined in Section 7.2.
"CONTROL AGREEMENTS" means each control agreement executed and
delivered by the Collateral Agent for the
benefit of the Secured Parties, a
securities intermediary or depositary bank
and the applicable Credit Party on
the Closing Date and each control agreement
to be executed and delivered by
Collateral Agent, a securities intermediary
or depositary bank and the
applicable Credit Party pursuant to the
terms of the Pledge and Security
Agreement with such modifications as
Collateral Agent may reasonably request or
approve.
"CONTROL INVESTMENT AFFILIATE" means, with respect to any
Person,
any other Person that (a) directly or
indirectly, is in control of, is
controlled by, or is under common control
with, such Person and (b) is organized
by such Person primarily for the purpose of
making equity or debt investments in
one or more companies. For purposes of this
definition, "control" of a Person
means the power, directly or indirectly, to
direct or cause the direction of the
management and policies of such Person,
whether by contract or otherwise.
"CONVERSION/CONTINUATION DATE" means the effective date of a
continuation or conversion, as the case may
be, as set forth in the applicable
Conversion/Continuation Notice.
"CONVERSION/CONTINUATION NOTICE" means a
Conversion/Continuation
Notice substantially in the form of Exhibit
A-2.
"COUNTERPART AGREEMENT" means a Counterpart Agreement
substantially
in the form of Exhibit G delivered by a
Credit Party pursuant to Section 5.10.
"CREDIT DATE" means the date of a Credit Extension.
"CREDIT DOCUMENT" means any of this Agreement, the Notes, if
any,
the Collateral Documents, any documents or
certificates executed by Borrower in
favor of Issuing Bank relating to Letters
of Credit, and all other documents,
instruments or agreements executed and
delivered by a Credit Party for the
benefit of any Agent, Issuing Bank or any
Lender in connection herewith (in each
case as such documents, instruments or
agreements may be amended, restated,
supplemented or otherwise modified from
time to time).
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<PAGE>
"CREDIT EXTENSION" means the making of a Loan or the issuing of
a
Letter of Credit.
"CREDIT PARTY" means each Person (other than any Agent, Issuing
Bank, Swingline Lender or any Lender or any
other representative thereof or any
non-Affiliates of Borrower or its
Subsidiaries) from time to time party to a
Credit Document.
"CURRENCY AGREEMENT" means any foreign exchange contract,
currency
swap agreement, futures contract, option
contract, synthetic cap or other
similar agreement or arrangement, each of
which is for the purpose of hedging
the foreign currency risk associated with
Holdings' and its Subsidiaries'
operations and not for speculative
purposes.
"CUSTOMER" means the account debtor with respect to any account
and/or prospective purchaser of goods,
services or both with respect to any
contract or contract right, and/or any
party who enters into or proposes to
enter into any contract or other
arrangement with any Credit Party, pursuant to
which such Credit Party is to sell any
personal property or perform any
services.
"DEBT TENDER" means the receipt of tender and consents by
Borrower
of at least 50% in principal amount of the
SAC Notes.
"DEFAULT" means a condition or event that, after notice or lapse
of
time or both, would constitute an Event of
Default.
"DEFAULT EXCESS" means, with respect to any Defaulting Lender,
the
excess, if any, of such Defaulting Lender's
Pro Rata Share of the aggregate
outstanding principal amount of Loans of
all Lenders (calculated as if all
Defaulting Lenders (other than such
Defaulting Lender) had funded all of their
respective Defaulted Loans) over the
aggregate outstanding principal amount of
all Loans of such Defaulting Lender.
"DEFAULT PERIOD" means, with respect to any Defaulting Lender,
the
period commencing on the date of the
applicable Funding Default and ending on
the earliest of the following dates: (i)
the date on which all Commitments are
cancelled or terminated and/or the
Obligations are declared or become
immediately due and payable, (ii) the date
on which (a) the Default Excess with
respect to such Defaulting Lender shall
have been reduced to zero (whether by
the funding by such Defaulting Lender of
any Defaulted Loans of such Defaulting
Lender or by the non-pro rata application
of any voluntary or mandatory
prepayments of the Loans in accordance with
the terms of Section 2.12 or Section
2.13 or by a combination thereof) and (b)
such Defaulting Lender shall have
delivered to Borrower and Administrative
Agent a written reaffirmation of its
intention to honor its obligations
hereunder with respect to its Commitments,
and (iii) the date on which Borrower,
Administrative Agent and Requisite Lenders
waive all Funding Defaults of such
Defaulting Lender in writing.
"DEFAULTING LENDER" as defined in Section 2.21.
"DEFAULTED LOAN" as defined in Section 2.21.
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<PAGE>
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
like
account with a bank, savings and loan
association, credit union or like
organization, other than an account
evidenced by a negotiable certificate of
deposit.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"DOMESTIC SUBSIDIARY" means any Subsidiary organized under the
laws
of the United States of America, any State
thereof or the District of Columbia.
"ELIGIBLE ACCOUNTS" means all of the Accounts owned by Borrower or
a
Guarantor and reflected in the most recent
Borrowing Base Certificate delivered
by Borrower to Administrative Agent, except
any Account to which any of the
exclusionary criteria set forth below
applies. Administrative Agent shall have
the right to establish, modify or eliminate
Reserves against Eligible Accounts
from time to time in its reasonable credit
judgment, subject to the approval of
the Requisite Lenders, in the case of
adjustments, new criteria or the
elimination of Reserves which have the
effect of making additional credit in
excess of $5,000,000 available to Borrower;
provided, however, for the avoidance
of doubt, no such approval shall be
required in the case of any adjustment or
the elimination of Reserves caused by
operation of the provisions of this
Agreement relating to the Aggregate
Borrowing Base. An Account may not
constitute an Eligible Account unless such
Account is subject to Collateral
Agent's (for the benefit of the Revolving
Secured Parties) First Priority
perfected security interest, Collateral
Agent's (for the benefit of the Term
Secured Parties) Second Priority perfected
security interest and no other Lien
(other than Permitted Liens), and is
evidenced by an invoice or other
documentary evidence reasonably
satisfactory to Administrative Agent. Eligible
Accounts shall not include any Account of
Borrower or any Guarantor if:
(a) it does not arise from the sale of Inventory or the
performance
of services by Borrower or a Guarantor in
the ordinary course of its business;
(b) it arises out of a sale made by Borrower or a Guarantor to
an
Affiliate of Borrower or a Guarantor or to
a Person controlled by an Affiliate
of Borrower or a Guarantor;
(c) it is due or unpaid more than ninety (90) days after the
original due date or one hundred twenty
(120) days after the original invoice
date;
(d) fifty percent (50%) or more of the Accounts from such
Customer
are not deemed Eligible Accounts
hereunder;
(e) any covenant, representation or warranty contained in this
Agreement with respect to such Account has
been breached;
(f) the Customer shall (i) apply for, suffer or consent to the
appointment of, or the taking of possession
by, a receiver, custodian, trustee
or liquidator of itself or of all or a
substantial part of its property or call
a meeting of its general creditors, (ii)
admit in writing its inability, or be
generally unable, to pay its debts as they
become due or cease operations of its
present business, (iii) make a general
assignment for the benefit of creditors,
(iv) commence a voluntary case under any
state or federal bankruptcy laws (as
now or hereafter in effect), (v) be
13
<PAGE>
adjudicated a bankrupt or insolvent, (vi)
file a petition seeking to take
advantage of any other law providing for
the relief of debtors, (vii) acquiesce
to, or fail to have dismissed, any petition
which is filed against it in any
involuntary case under such bankruptcy
laws, or (viii) take any action for the
purpose of effecting any of the
foregoing;
(g) the sale to the Customer is on a bill-and-hold, guaranteed
sale,
sale-and-return, sale on approval,
consignment or any other repurchase or return
basis or is evidenced by chattel paper;
(h) Administrative Agent believes, in its reasonable judgment,
that
collection of such Account is insecure or
that such Account may not be paid by
reason of the Customer's financial
inability to pay;
(i) for Accounts in excess of $500,000 in the aggregate, the
Customer is the United States of America,
any state or any department, agency,
or instrumentality of any of them, unless
Borrower or such Guarantor assigns its
right to payment of such Account to the
Collateral Agent pursuant to the
Assignment of Claims Act of 1940, as
amended (31 U.S.C. Sub-Section 3727 et seq.
and 41 U.S.C. Sub-Section 15 et seq.) and
has otherwise complied with other
applicable statutes or ordinances;
(j) the goods giving rise to such Account have not been shipped
and
delivered to and accepted by the Customer
or the services giving rise to such
Account have not been performed or
completed by Borrower or a Guarantor and
accepted by the Customer or the Account
otherwise does not represent a final
sale;
(k) the Account is subject to any offset, deduction, defense,
dispute or counterclaim, the Customer is
owed money as a creditor or supplier of
Borrower or a Guarantor or the Account is
contingent in any respect or for any
reason; except that with respect to
Accounts that are subject to offset as a
result of volume rebates owing to a
customer by Borrower or a Guarantor, such
Accounts shall be deemed to be Eligible
Accounts to the extent that the
aggregate amount of such Accounts exceeds
the aggregate amount of the volume
rebate owing to such Customer;
(l) to the extent that Borrower or a Guarantor has made any
agreement with any Customer for any
deduction therefrom, except for discounts or
allowances made in the ordinary course of
business for prompt payment, all of
which discounts and allowances for prompt
payment are reflected in the
calculation of the face value of each
respective invoice related thereto;
(m) any return, rejection or repossession of any of the
merchandise
giving rise to such Account has
occurred;
(n) such Account is not payable to Borrower or a Guarantor;
(o) (i) such Account is from a Customer, excluding Deere and
Company
and its Subsidiaries, whose aggregate
Accounts with Borrower and Guarantors
exceeds 25% of all Eligible Accounts, but
only to the extent of such excess over
25% or (ii) such Account is Deere and
Company and its Subsidiaries, to the
extent Deere and Company's and its
Subsidiaries'
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<PAGE>
aggregate Accounts with Borrower and
Guarantors exceeds 50% of all Eligible
Accounts, but only to the extent of such
excess over 50%;
(p) Accounts (other than (1) Deere and Company and its
Subsidiaries,
(2) Ford Motor Company and its
Subsidiaries, (3) Tritec Motors LTDA and its
Subsidiaries, (4) DaimlerChrysler AG and
its Subsidiaries and (5) Accounts
covered by credit insurance in form and
amount, and by an insurer, reasonably
satisfactory to Administrative Agent ) with
respect to which the Customer is
organized in a jurisdiction outside of the
United States, to the extent the
aggregate of such Accounts with Borrower
and Guarantors exceeds 10% of all
Eligible Accounts, but only to the extent
of such excess over 10%; or
(q) Accounts in excess of $500,000 in the aggregate with respect
to
which the Customer is located in New
Jersey, Minnesota, or any other state
denying creditors access to its courts in
the absence of a Notice of Business
Activities Report or other similar filing,
unless Borrower or Guarantor, as
applicable, is incorporated under the laws
of such state or has either qualified
as a foreign corporation authorized to
transact business in such state or has
filed a Notice of Business Activities
Report or similar filing with the
applicable state agency for the then
current year.
"ELIGIBLE ASSIGNEE" means (i) any Lender, any Affiliate of any
Lender and any Related Fund with respect to
a Lender (any two or more Related
Funds being treated as a single Eligible
Assignee for all purposes hereof), and
(ii) any commercial bank, financial
institution, insurance company, investment
or mutual fund or other entity that is an
"accredited investor" (as defined in
Regulation D under the Securities Act) and
which extends credit or buys loans as
one of its businesses; provided, none of
Holdings, any Affiliate of Holdings or
Sponsor (other than Antares Capital
Corporation in its capacity as a Lender)
shall be an Eligible Assignee.
"ELIGIBLE INVENTORY" means all of the Inventory (valued at the
lower
of cost or market value, determined on a
first-in-first-out basis) owned by
Borrower or a Guarantor and reflected in
the most recent Borrowing Base
Certificate delivered by Borrower to
Administrative Agent, except any Inventory
to which any of the exclusionary criteria
set forth below applies.
Administrative Agent shall have the right
to establish, modify or eliminate
Reserves against Eligible Inventory from
time to time in its reasonable credit
judgment. In addition, Administrative Agent
shall have the right, from time to
time, to adjust any of the criteria set
forth below and to establish new
criteria with respect to Eligible
Inventory, in its reasonable credit judgment,
subject to the approval of the Requisite
Lenders, in the case of adjustments,
new criteria or the elimination of Reserves
which have the effect of making
additional credit in excess of $5,000,000
available to Borrower. Eligible
Inventory shall not include any Inventory
of Borrower or a Guarantor that:
(a) is not owned by Borrower or a Guarantor free and clear of
all
Liens and rights of any other Person
(including the rights of a purchaser that
has made progress payments and the rights
of a surety that has issued a bond to
assure Borrower's or Guarantor's
performance with respect to that Inventory),
except the Liens in favor of Collateral
Agent and Permitted Liens in favor of
landlords and bailees to the extent
permitted in Section 5.15 hereof, (subject
to Reserves established by Administrative
Agent in accordance with Section 5.15
hereof and other Permitted Liens);
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(b) with respect to Inventory exceeding $500,000 in the
aggregate,
(i) is not located on premises owned,
leased or rented by Borrower or a
Guarantor or (ii) is stored with a bailee
(including, without limitation, a
processor or converter) at a leased
location, unless either (x) a reasonably
satisfactory landlord waiver has been
delivered to Administrative Agent, or (y)
Reserves reasonably satisfactory to
Administrative Agent have been established
with respect thereto, or (iii) is stored
with a bailee or warehouseman unless a
reasonably satisfactory, acknowledged
bailee letter has been received by
Administrative Agent and Reserves
reasonably satisfactory to Administrative
Agent have been established with respect
thereto, or (iv) is located at an owned
location subject to a mortgage or other
security interest in favor of a creditor
other than Collateral Agent unless a
Landlord Personal Property Collateral
Access Agreement has been delivered to
Administrative Agent, or (v) is located
on premises owned, leased or rented by a
customer of Borrower or a Guarantor,
unless (A) Collateral Agent has been
notified thereof in advance, (B) such
Inventory of Borrower or such Guarantor is
clearly segregated from all Inventory
of such customer in a manner satisfactory
to Collateral Agent in its reasonable
credit judgment, (C) all UCC filings deemed
necessary or desirable by Collateral
Agent have been made, including, without
limitation, all UCC filings in respect
of consigned inventory naming Customer as
debtor and Borrower or Guarantor as
secured party and all assignments of such
UCC filings by Borrower or Guarantor
to Collateral Agent, as assignee of the
secured party, (D) a satisfactory
collateral agreement, with respect to,
among other things, access,
acknowledgment of Collateral Agent's first
priority Lien, UCC consignment
filings and said Customer's agreement to
notify Collateral Agent in advance if
it changes its jurisdiction of
organization, has been delivered to Collateral
Agent by such Customer and (E) in any
event, the maximum aggregate amount of all
such Inventory, whether or not eligible,
located on premises owned, leased or
rented by all Customers of Borrower and all
Guarantors does not exceed
$25,000,000;
(c) is placed on consignment, except as expressly provided in
subpart (b) above;
(d) with respect to Inventory exceeding $250,000 in the
aggregate,
is in transit, except inventory that is in
transit (A) between locations owned
or leased by one or more of Borrower and a
Guarantor, (B) between a location
owned or leased by Borrower or a Guarantor
and a location not owned or leased by
Borrower or a Guarantor (a "THIRD PARTY
LOCATION") or (C) between Third Party
Locations, provided that with respect to
any such Third Party Location, a bailee
acknowledgment letter (in form and
substance reasonably satisfactory to the
Collateral Agent) has been executed in
favor of the Collateral Agent and
delivered to the Collateral Agent;
(e) is covered by a negotiable document of title, unless such
document has been delivered to Collateral
Agent with all necessary endorsements,
free and clear of all Liens except those in
favor of Collateral Agent and
Permitted Liens;
(f) is excess, obsolete, unsalable, shopworn, seconds, damaged
or
unfit for sale;
(g) consists of display items or packing or shipping materials,
manufacturing supplies, fuel or replacement
parts for equipment of Borrower and
its Subsidiaries;
(h) consists of goods that have been returned by the buyer and
are
not in salable condition;
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(i) is not of a type held for sale in the ordinary course of
Borrower's or Guarantor's business;
(j) is not subject to a First Priority Lien in favor of the
Collateral Agent on behalf of the Revolving
Secured Parties and a Second
Priority Lien in favor of the Collateral
Agent on behalf of the Term Secured
Parties; provided, that (i) no assets
described in Section 2.2 of the Pledge and
Security Agreement shall be Eligible
Inventory and (ii) no Inventory subject to
a Permitted Lien shall be Eligible
Inventory to the extent, but only to the
extent, a Permitted Lien primes the First
Priority Lien granted to the
Collateral Agent, as determined by
Collateral Agent;
(k) breaches in any material respect any of the representations
or
warranties pertaining to Inventory set
forth in the Credit Documents;
(l) consists of any costs associated with "freight-in" charges;
(m) consists of Hazardous Materials or goods that can be
transported
or sold only with licenses that are not
readily available;
(n) does not conform to all standards imposed by any
governmental
agency, division or department thereof
which has regulatory authority over such
goods or the use or sale thereof;
(o) is Commingled Inventory; or
(p) is otherwise unacceptable to Administrative Agent in its
reasonable credit judgment.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined
in Section 3(3) of ERISA which is or,
within the preceding six years was,
sponsored, maintained or contributed to by,
or required to be contributed by,
Holdings or any of its Subsidiaries or any
of their respective ERISA Affiliates.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice
of
violation, claim, action, suit, proceeding,
demand, abatement order or other
order (including consent orders) or
directive (conditional or otherwise), by any
Governmental Authority or any other Person,
arising (i) pursuant to or in
connection with any actual or alleged
violation of any Environmental Law; (ii)
in connection with any Hazardous Material
or any actual or alleged Hazardous
Materials Activity; or (iii) in connection
with any actual or alleged damage,
injury, threat or harm to health, safety,
natural resources or the environment.
"ENVIRONMENTAL LAWS" means any and all foreign or domestic,
federal
or state (or any subdivision of either of
them) or local statutes, ordinances,
orders (including consent orders), rules,
regulations, judgments, treaties,
Governmental Authorizations, or any other
requirements of Governmental
Authorities relating to or imposing
standards of conduct concerning (i)
environmental matters, including those
relating to any Hazardous Materials
Activity; (ii) the Release, generation,
use, storage, transportation or disposal
of, or exposure to, Hazardous Materials;
(iii) industrial hygiene, occupational
safety and health; (iv) natural resources
or natural resource damages; (v) land
use or (vi) the protection of human, plant
or
17
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animal health or welfare, in any manner
applicable to Holdings or any of its
Subsidiaries or any Facility.
"ERISA" means the Employee Retirement Income Security Act of
1974,
as amended from time to time, and any
successor thereto.
"ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation which is a member of a
controlled group of corporations within the
meaning of Section 414(b) of the Internal
Revenue Code of which that Person is a
member; and (ii) any trade or business
(whether or not incorporated) which is a
member of a group of trades or businesses
under common control within the
meaning of Section 414(c) of the Internal
Revenue Code of which that Person is a
member. Any former ERISA Affiliate of
Holdings or any of its Subsidiaries shall
continue to be considered an ERISA
Affiliate of Holdings or any such Subsidiary
within the meaning of this definition to
the extent that Holdings or such
Subsidiary could reasonably be expected to
have any liability with respect
thereto under the Internal Revenue Code or
ERISA.
"ERISA EVENT" means (i) a "reportable event" within the meaning
of
Section 4043 of ERISA and the regulations
issued thereunder with respect to any
Pension Plan (excluding those for which the
provision for 30-day notice to the
PBGC has been waived by regulation); (ii)
the failure to meet the minimum
funding standard of Section 412 of the
Internal Revenue Code with respect to any
Pension Plan (whether or not waived in
accordance with Section 412(d) of the
Internal Revenue Code) or the failure to
make any required contribution to a
Multiemployer Plan; (iii) the provision by
the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of
a notice of intent to terminate such
plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the
withdrawal by Holdings, any of its
Subsidiaries or any of their respective ERISA
Affiliates from any Pension Plan with two
or more contributing sponsors or the
termination of any such Pension Plan
resulting in liability to Holdings, any of
its Subsidiaries or any of their respective
Affiliates pursuant to Section 4063
or 4064 of ERISA; (v) the institution by
the PBGC of proceedings to terminate
any Pension Plan, or the occurrence of any
event or condition which is
reasonably likely to constitute grounds
under ERISA for the termination of, or
the appointment by PGBC of a trustee to
administer, any Pension Plan; (vi) the
imposition of liability on Holdings, any of
its Subsidiaries or any of their
respective ERISA Affiliates pursuant to
Section 4062(e) or 4069 of ERISA or by
reason of the application of Section
4212(c) of ERISA; (vii) the withdrawal of
Holdings, any of its Subsidiaries or any of
their respective ERISA Affiliates in
a complete or partial withdrawal (within
the meaning of Sections 4203 and 4205
of ERISA) from any Multiemployer Plan if
there is any potential liability
therefore, or the receipt by Holdings, any
of its Subsidiaries or any of their
respective ERISA Affiliates of notice from
any Multiemployer Plan that it is in
reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA, or that
it intends to terminate or has terminated
under Section 4041A or 4042 of ERISA;
(viii) the occurrence of an act or omission
which could give rise to the
imposition on Holdings or any of its
Subsidiaries, including through any joint
and several liability with any of their
respective ERISA Affiliates, of fines,
penalties, taxes or related charges under
Chapter 43 of the Internal Revenue
Code or under Section 409, Section 502(c),
(i) or (l), or Section 4071 of ERISA
in respect of any Employee Benefit Plan;
(ix) receipt from the Internal Revenue
Service of notice of the failure of any
Pension Plan (or any other Employee
Benefit Plan intended to be qualified under
Section 401(a) of the Internal
Revenue Code) to qualify under Section
401(a) of the Internal Revenue Code, or
the failure of
18
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any trust forming part of any Pension Plan
to qualify for exemption from
taxation under Section 501(a) of the
Internal Revenue Code; or (x) the
imposition of a Lien pursuant to Section
401(a)(29) or 412(n) of the Internal
Revenue Code or pursuant to ERISA with
respect to any Pension Plan.
"EUROCURRENCY RESERVE REQUIREMENTS" for any day, as applied to
a
Eurodollar Rate Loan, shall mean the
aggregate (without duplication) of the
maximum rates of reserve requirements
(expressed as a decimal fraction) in
effect with respect to the Administrative
Agent and/or any present or future
Lender or participant on such day
(including, without limitation, basic,
supplemental, marginal and emergency
reserves under Regulation D or any other
applicable regulations of the Board of
Governors of the Federal Reserve System
or other governmental authority having
jurisdiction with respect thereto, as now
and from time to time in effect, dealing
with reserve requirements prescribed
for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in
Regulation D of such Board) maintained by
the Agent and/or any such Lenders or
participants (such rate to be adjusted to
the nearest one sixteenth of one
percent (1/16 of 1%) or, if there is not a
nearest one sixteenth of one percent
(1/16 of 1%), to the next higher one
sixteenth of one percent (1/16 of 1%)).
"EURODOLLAR RATE LOAN" means a Loan bearing interest at a rate
determined by reference to the Adjusted
Eurodollar Rate.
"EVENT OF DEFAULT" means each of the conditions or events set
forth
in Section 8.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended
from time to time, and any successor
statute.
"EXISTING CAPITAL LEASES" means the Capital Leases listed on
Schedule 1.1(b) entered into by Stanadyne
Corporation or a Subsidiary thereof as
indicated thereon prior to the date
hereof.
"EXISTING INDEBTEDNESS" means the pre-existing Indebtedness of
Borrower and its Subsidiaries on the
Closing Date described in Schedule 1.1B
hereto.
"FACILITY" means any real property (including all buildings,
fixtures or other improvements located
thereon) now, hereafter or heretofore
owned, leased or operated by Holdings or
any of its Subsidiaries or any of their
respective predecessors or Affiliates.
"FAIR SHARE CONTRIBUTION AMOUNT" as defined in Section 7.2.
"FAIR SHARE" as defined in Section 7.2.
"FEDERAL FUNDS EFFECTIVE RATE" means for any day, the rate per
annum
(expressed, as a decimal, rounded upwards,
if necessary, to the next higher
1/100 of 1%) 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 by the Federal Reserve Bank of
New York on the Business Day next
succeeding such day; provided, (i) if such day
is not a Business Day, the Federal Funds
Rate for such day shall be such rate on
19
<PAGE>
such transactions on the next preceding
Business Day as so published on the next
succeeding Business Day, and (ii) if no
such rate is so published on such next
succeeding Business Day, the Federal Funds
Rate for such day shall be the
average rate charged to Administrative
Agent, in its capacity as a Lender, on
such day on such transactions as determined
by Administrative Agent.
"FINANCIAL OFFICER CERTIFICATION" means, with respect to the
financial statements for which such
certification is required, the certification
of the chief financial officer of Borrower
that such financial statements fairly
present, in all material respects, the
financial condition of Borrower and its
Subsidiaries as at the dates indicated and
the results of their operations and
their cash flows for the periods indicated,
subject to changes resulting from
audit and normal year-end adjustments and
in the case of interim financial
statements, the absence of footnotes.
"FINANCIAL PLAN" as defined in Section 5.1(i).
"FIRST
PRIORITY" means, with respect to any Lien purported to be
created on any Collateral pursuant to any
Collateral Document, that such Lien is
prior in right to any other Lien thereon,
other than Permitted Liens described
in clauses (b) through (f), (i), (j), (k),
(l) and (p) of Section 6.2.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Borrower and its
Subsidiaries
ending on December 31 of each calendar year
or, with respect to any
non-Guarantor Subsidiaries only, December
31 or November 30 of each calendar
year, as the case may be.
"FIXED CHARGE COVERAGE RATIO" means the ratio as of the last day
of
any Fiscal Quarter of (i) Consolidated
Adjusted EBITDA for the twelve-month
period then ending; provided, solely with
respect to this definition, the amount
calculated pursuant to clause (k) of the
definition of Consolidated Adjusted
EBITDA shall be limited to restructuring
charges of $5,000,000 per Fiscal Year
without giving effect to any permitted
carryover in such clause, to (ii)
Consolidated Fixed Charges for such
four-Fiscal Quarter Period.
"FIXED COLLATERAL" means, collectively, all of the real,
personal
and mixed property in which Second Priority
Liens are purported to be granted
pursuant to the Collateral Documents as
security for the Revolving Obligations
and shall include all "Fixed Collateral" as
defined in the Intercreditor
Agreement.
"FLOOD HAZARD PROPERTY" means any Real Estate Asset subject to
a
mortgage in favor of Collateral Agent, for
the benefit of the Term Secured
Parties or the Revolving Secured Parties,
and located in an area designated by
the Federal Emergency Management Agency as
having special flood or mud slide
hazards.
"FOREIGN SUBSIDIARY" means any Subsidiary that is not a
Domestic
Subsidiary.
"FUNDING DEFAULT" as defined in Section 2.21.
"FUNDING GUARANTORS" as defined in Section 7.2.
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<PAGE>
"FUNDING NOTICE" means a notice substantially in the form of
Exhibit
A-1.
"GAAP" means, subject to the limitations on the application
thereof
set forth in Section 1.2, United States of
America generally accepted accounting
principles in effect as of the date of
determination thereof.
"GOVERNMENTAL ACTS" means any act or omission, whether rightful
or
wrongful, of any present or future de jure
or de facto government or
Governmental Authority.
"GOVERNMENTAL AUTHORITY" means any federal, state, municipal,
national or other government, governmental
department, commission, board,
bureau, court, agency or instrumentality or
political subdivision thereof or any
entity or officer exercising executive,
legislative, judicial, regulatory or
administrative functions of or pertaining
to any government or any court, in
each case whether associated with a state
of the United States, the United
States, or a foreign entity or
government.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, approval, plan, directive,
consent order or consent decree of or
from any Governmental Authority.
"GRANTOR" as defined in the Pledge and Security Agreement.
"GSCP" means Goldman Sachs Credit Partners L.P.
"GUARANTEED OBLIGATIONS" as defined in Section 7.1.
"GUARANTOR" means each of Holdings and each Domestic Subsidiary
of
Holdings (other than Borrower).
"GUARANTOR SUBSIDIARY" means each Guarantor other than
Holdings.
"GUARANTY" means the guaranty of each Guarantor set forth in
Section
7.
"HAZARDOUS MATERIALS" means any chemical, compound,
constituent,
material, waste or substance, which is
prohibited, limited or regulated by any
Governmental Authority or pursuant to any
Environmental Law or which may or
could pose a hazard to the health and
safety of any Persons or to the indoor or
outdoor environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current, future,
proposed or threatened activity, event or
occurrence involving any Hazardous
Materials, including the use, manufacture,
possession, storage, holding,
presence, existence, location, Release,
threatened Release, discharge,
placement, generation, transportation,
processing, construction, treatment,
abatement, removal, remediation, disposal,
disposition or handling of any
Hazardous Materials, and any corrective
action or response action with respect
to any of the foregoing.
"HEDGE AGREEMENT" means an Interest Rate Agreement or a
Currency
Agreement entered into with a Lender
Counterparty in order to satisfy the
requirements of this
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Agreement or otherwise in the ordinary
course of Holdings' or any of its
Subsidiaries' businesses.
"HIGHEST LAWFUL RATE" means the maximum lawful interest rate,
if
any, that at any time or from time to time
may be contracted for, charged, or
received under the laws applicable to any
Lender which are presently in effect
or, to the extent allowed by law, under
such applicable laws which may hereafter
be in effect and which allow a higher
maximum nonusurious interest rate than
applicable laws now allow.
"HISTORICAL FINANCIAL STATEMENTS" means as of the Closing Date,
(i)
the audited financial statements of
Borrower and its Subsidiaries, for the
immediately preceding three (3) Fiscal
Years, consisting of balance sheets and
the related consolidated statements of
income, stockholders' equity and cash
flows for such Fiscal Years, and (ii) the
unaudited financial statements of
Borrower and its Subsidiaries as at the
most recently ended Fiscal Quarter,
consisting of a balance sheet and the
related consolidated statements of income,
stockholders' equity and cash flows for the
three-, six-or nine-month period, as
applicable, ending on such date, and, in
the case of clauses (i) and (ii),
certified by the chief financial officer of
Borrower that they fairly present,
in all material respects, the financial
condition of Borrower and its
Subsidiaries as at the dates indicated and
the results of their operations and
their cash flows for the periods indicated,
subject to changes resulting from
audit and normal year-end adjustments and
in the case of interim financial
statements, the absence of footnotes.
"HOLDINGS" as defined in the preamble hereto.
"IMMATERIAL SUBSIDIARY" means, as of any date, any Subsidiary
whose
total assets, as of that date, are less
than $100,000 and whose total revenues
for the most recent twelve-month period do
not exceed $100,000.
"INCREASED-COST LENDERS" as defined in Section 2.22.
"INDEBTEDNESS", as applied to any Person, means, without
duplication, (i) all indebtedness for
borrowed money; (ii) that portion of
obligations with respect to Capital Leases
that is properly classified as a
liability on a balance sheet in conformity
with GAAP; (iii) notes payable and
drafts accepted representing extensions of
credit whether or not representing
obligations for borrowed money; (iv) any
obligation owed for all or any part of
the deferred purchase price of property or
services (excluding any such
obligations incurred under ERISA), which
purchase price is (a) (except to the
extent disputed in good faith) due more
than six months from the date of
incurrence of the obligation in respect
thereof or (b) evidenced by a note or
similar written instrument; (v) all
indebtedness secured by any Lien on any
property or asset owned or held by that
Person regardless of whether the
indebtedness secured thereby shall have
been assumed by that Person or is
nonrecourse to the credit of that Person;
(vi) the face amount of any letter of
credit issued for the account of that
Person or as to which that Person is
otherwise liable for reimbursement of
drawings; (vii) the direct or indirect
guaranty, endorsement (otherwise than for
collection or deposit in the ordinary
course of business), co-making, discounting
with recourse or sale with recourse
by such Person of the Indebtedness of
another; (viii) any obligation of such
Person the primary purpose or intent of
which is to provide assurance to an
obligee that the obligation of the obligor
thereof will be paid or discharged,
or
22
<PAGE>
any agreement relating thereto will be
complied with, or the holders thereof
will be protected (in whole or in part)
against loss in respect thereof; (ix)
any liability of such Person for an
obligation of another through any agreement
(contingent or otherwise) (a) to purchase,
repurchase or otherwise acquire such
obligation or any security therefor, or to
provide funds for the payment or
discharge of such obligation (whether in
the form of loans, advances, stock
purchases, capital contributions or
otherwise) or (b) to maintain the solvency
or any balance sheet item, level of income
or financial condition of another if,
in the case of any agreement described
under subclauses (a) or (b) of this
clause (ix), the primary purpose or intent
thereof is as described in clause
(viii) above; and (x) all obligations of
such Person in respect of any exchange
traded or over the counter derivative
transaction, including, without
limitation, any Interest Rate Agreement,
Currency Agreement and any commodities
hedging agreement, whether entered into for
hedging or speculative purposes;
provided, in no event shall obligations
under any Interest Rate Agreement, any
Currency Agreement or any commodities
hedging agreement be deemed "Indebtedness"
for any purpose under Section 6.8.
"INDEMNIFIED LIABILITIES" means, collectively, any and all
liabilities, obligations, losses, damages
(including natural resource damages),
penalties, claims (including Environmental
Claims), costs (including the
reasonable costs of any investigation,
study, sampling, testing, abatement,
cleanup, removal, remediation or other
response action necessary to remove,
remediate, clean up or abate any past,
present or future Hazardous Materials
Activity), reasonable expenses and
disbursements of any kind or nature
whatsoever (including the reasonable fees
and disbursements of counsel for
Indemnitees in connection with any
investigative, administrative or judicial
proceeding commenced or threatened by any
Person, whether or not any such
Indemnitee shall be designated as a party
or a potential party thereto, and any
reasonable fees or expenses incurred by
Indemnitees in enforcing the indemnity
contained in Section 10.3), whether direct,
indirect or consequential and
whether based on any federal, state or
foreign laws, statutes, rules or
regulations (including securities and
commercial laws, statutes, rules or
regulations and Environmental Laws), on
common law or equitable cause or on
contract or otherwise, that may be imposed
on, incurred by, or asserted against
any such Indemnitee, in any manner relating
to or arising out of (i) this
Agreement or the other Credit Documents or
the transactions contemplated hereby
or thereby (including the Lenders'
agreement to make Credit Extensions or the
use or intended use of the proceeds
thereof, or any enforcement of any of the
Credit Documents (including any sale of,
collection from, or other realization
upon any of the Collateral or the
enforcement of the Guaranty)); (ii) the
statements contained in the commitment
letter delivered by any Lender to KSTA
Acquisition LLC with respect to the
transactions contemplated by this Agreement;
or (iii) any Environmental Claim or any
Hazardous Materials Activity relating to
or arising from, directly or indirectly,
any past, present or future activity,
operation, land ownership, or practice of
Holdings or any of its Subsidiaries.
"INDEMNITEE" as defined in Section 10.3.
"INSTALLMENT" as defined in Section 2.11(a).
"INSTALLMENT DATE" as defined in Section 2.11(a).
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"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement,
dated
as of the Closing Date, by and among
Collateral Agent, Term Collateral Agent and
Grantors.
"INTEREST
PAYMENT DATE" means with respect to (i) any Base Rate
Loan, each of January 1, April 1, July 1
and October 1 of each year, commencing
on the first such date to occur after the
Closing Date and the final maturity
date of such Loan; and (ii) any Eurodollar
Rate Loan, the last day of each
Interest Period applicable to such Loan;
provided, in the case of each Interest
Period of longer than three months
"Interest Payment Date" shall also include
each date that is three months, or an
integral multiple thereof, after the
commencement of such Interest Period.
"INTEREST PERIOD" means, in connection with a Eurodollar Rate
Loan,
an interest period of one-, two-, three- or
six-months (or, with the consent of
each affected Lender, nine- or
twelve-months), as selected by Borrower in the
applicable Funding Notice or
Conversion/Continuation Notice, (i) initially,
commencing on the Credit Date or
Conversion/Continuation Date thereof, as the
case may be; and (ii) thereafter,
commencing on the day on which the immediately
preceding Interest Period expires;
provided, (a) if an Interest Period would
otherwise expire on a day that is not a
Business Day, such Interest Period shall
expire on the next succeeding Business Day
unless no further Business Day occurs
in such month, in which case such Interest
Period shall expire on the
immediately preceding Business Day; (b) any
Interest Period that begins on the
last Business Day of a calendar month (or
on a day for which there is no
numerically corresponding day in the
calendar month at the end of such Interest
Period) shall, subject to clauses (c) and
(d), of this definition, end on the
last Business Day of a calendar month; and
(c) no Interest Period with respect
to any portion of the Revolving Loans shall
extend beyond the Revolving
Commitment Termination Date.
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement,
interest rate cap agreement, interest rate
collar agreement, interest rate
hedging agreement or other similar
agreement or arrangement, each of which is
for the purpose of hedging the interest
rate exposure associated with Holdings'
and its Subsidiaries' operations and not
for speculative purposes.
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the date that is two
Business Days prior to the first day of
such Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986,
as
amended to the date hereof and from time to
time hereafter, and any successor
statute.
"INVENTORY" means, as to Borrower or a Guarantor, (i) all
"inventory" as defined in Article 9 of the
UCC and (ii) all goods held for sale
or lease or to be furnished under contracts
of service or so leased or
furnished, all raw materials, work in
process, finished goods, and materials
used or consumed in the manufacture,
packing, shipping, advertising, selling,
leasing, furnishing or production of such
inventory or otherwise used or
consumed in such Person's business; all
goods in which such Person has an
interest in mass or a joint or other
interest or right of any kind; and all
goods which are returned to or repossessed
by such Person, all computer programs
embedded in any goods and all accessions
thereto and products thereof (in each
case, regardless of whether characterized
as inventory under the UCC).
24
<PAGE>
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by Holdings or any of its
Subsidiaries of, or of a beneficial
interest in, any of the Securities of any
other Person (other than a Guarantor
Subsidiary); (ii) any direct or indirect
redemption, retirement, purchase or
other acquisition for value, by any
Subsidiary of Holdings from any Person
(other than Holdings or any Guarantor
Subsidiary), of any Capital Stock of such
Person; and (iii) any direct or indirect
loan, advance (other than advances to
employees for moving, entertainment and
travel expenses, drawing accounts and
similar expenditures in the ordinary course
of business) or capital contribution
by Holdings or any of its Subsidiaries to
any other Person (other than Holdings
or any Guarantor Subsidiary), including all
indebtedness and accounts receivable
from that other Person that are not current
assets or did not arise from sales
to that other Person in the ordinary course
of business but excluding accounts
receivable that are not so included. The
amount of any Investment shall be the
original cost of such Investment plus the
cost of all additions thereto, without
any adjustments for increases or decreases
in value, or write-ups, write-downs
or write-offs with respect to such
Investment.
"IP SECURITY AGREEMENT" means each IP Security Agreement, dated
as
of the Closing Date, by and among Borrower,
each Guarantor and Collateral Agent.
"ISSUANCE NOTICE" means an Issuance Notice in the form of
Exhibit
A-3.
"ISSUING BANK" means CIT or any of its Affiliates as Issuing
Bank
hereunder, together with its permitted
successors and assigns in such capacity,
or a bank or other legally authorized
Person selected by Administrative Agent in
such Person's capacity as an issuer of a
Letter of Credit.
"JOINT VENTURE" means a joint venture, partnership or other
similar
arrangement, whether in corporate,
partnership or other legal form; provided, in
no event shall any corporate Subsidiary of
any Person be considered to be a
Joint Venture to which such Person is a
party.
"LANDLORD CONSENT AND ESTOPPEL" means, with respect to any
Leasehold
Property, a letter, certificate or other
instrument in writing from the lessor
under the related lease, pursuant to which,
among other things, the landlord
consents to the granting of a Mortgage on
such Leasehold Property by the Credit
Party tenant, such Landlord Consent and
Estoppel to be in form and substance
acceptable to Collateral Agent in its
reasonable discretion, but in any event
sufficient for Collateral Agent to obtain a
Title Policy with respect to such
Mortgage.
"LANDLORD PERSONAL PROPERTY COLLATERAL ACCESS AGREEMENT" means
a
Landlord Waiver and Consent Agreement
substantially in the form of Exhibit I
with such amendments or modifications as
may be approved by Collateral Agent.
"LEASEHOLD PROPERTY" means any leasehold interest of any Credit
Party as lessee under any lease of real
property, other than any such leasehold
interest designated from time to time by
Collateral Agent in its reasonable
discretion as not being required to be
included in the Collateral.
"LENDER" means each financial institution listed on the
signature
pages hereto as a Lender, and any other
Person that becomes a party hereto
pursuant to an Assignment Agreement.
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<PAGE>
"LENDER COUNTERPARTY" means each Lender or Agent or any Affiliate
of
a Lender or an Agent, counterparty to a
Hedge Agreement (including any Person
who is a Lender (and any Affiliate thereof)
as of the Closing Date but
subsequently, whether before or after
entering into a Hedge Agreement, ceases to
be a Lender).
"LETTER OF CREDIT" means a commercial or standby letter of
credit
issued or to be issued by Issuing Bank
pursuant to this Agreement.
"LETTER OF CREDIT SUBLIMIT" means the lesser of (i) $15,000,000
and
(ii) the aggregate unused amount of the
Commitments then in effect.
"LETTER OF CREDIT USAGE" means, as at any date of determination,
the
sum of (i) the maximum aggregate amount
which is, or at any time thereafter may
become, available for drawing under all
Letters of Credit then outstanding, and
(ii) the aggregate amount of all drawings
under Letters of Credit honored by
Issuing Bank and not theretofore reimbursed
by or on behalf of Borrower.
"LEVERAGE RATIO" means the ratio as of the last day of any
Fiscal
Quarter or other date of determination
of:
(i) Consolidated Total Debt as of such day; to
(ii) Consolidated Adjusted EBITDA for the four-Fiscal Quarter
period
ending on such date (or if such date of
determination is not the last day of a
Fiscal Quarter, for the four-Fiscal Quarter
period ending as of the most
recently concluded Fiscal Quarter);
provided, however, (a) for purposes of
determining Consolidated Total Debt for
use in computing the Leverage Ratio at the
end of any Fiscal Quarter or other
date of determination, the average daily
balance of any revolving credit
facility during the four-Fiscal Quarter
period referred to in clause (ii) above
shall be substituted for the balance of
such facility outstanding on the last
day of such Fiscal Quarter or other date of
determination and (b) Consolidated
Adjusted EBITDA shall be pro forma for
Permitted Acquisitions as if they had
occurred on the first day of the
four-Fiscal Quarter period then ending.
"LIEN" means (i) any lien, mortgage, pledge, assignment,
security
interest, charge or encumbrance of any kind
(including any agreement to give any
of the foregoing, any conditional sale or
other title retention agreement, and
any lease in the nature thereof) and any
option, trust or other preferential
arrangement having the practical effect of
any of the foregoing and (ii) in the
case of Securities, any purchase option,
call or similar right of a third party
with respect to such Securities.
"LIQUID COLLATERAL" means, collectively, all of the personal
property in which First Priority Liens are
purported to be granted pursuant to
the Collateral Documents as security for
the Revolving Obligations and shall
include, without limitation, all Accounts
and Inventory of Borrower and
Guarantors and shall include all "Liquid
Collateral" as defined in the
Intercreditor Agreement.
"LOAN" means a Revolving Loan and/or a Swing Line Loan.
26
<PAGE>
"MARGIN STOCK" as defined in Regulation U of the Board of
Governors
of the Federal Reserve System as in effect
from time to time.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
and/or
material adverse developments with respect
to (i) the business operations,
properties, assets, condition (financial or
otherwise) or prospects of Holdings
and its Subsidiaries, taken as a whole;
(ii) the impairment (other than as a
result of circumstances covered by clause
(i) above) of the ability of any
Credit Party to fully and timely perform
its Revolving Obligations; (iii) the
legality, validity, binding effect or
enforceability against a Credit Party of a
Credit Document to which it is a party; or
(iv) the rights and remedies
available to, or conferred upon, any Agent,
any Lender or any Secured Party
under any Credit Document.
"MATERIAL CONTRACT" means any contract or other arrangement to
which
Holdings or any of its Subsidiaries is a
party (other than the Credit Documents)
for which breach, nonperformance,
cancellation or failure to renew could
reasonably be expected to have a Material
Adverse Effect.
"MATERIAL REAL ESTATE ASSET" means (i)(a) any fee-owned Real
Estate
Asset having a fair market value in excess
of $1,000,000 as of the date of the
acquisition thereof and (b) all Leasehold
Properties upon or in which Holdings
or any of its Subsidiaries conducts
manufacturing, assembly or similar
operations which operations account for
more than 10% of the manufacturing and
assembly revenues of Borrower and its
Subsidiaries taken as a whole, and (c)
Leasehold Properties that are subject to a
sale and leaseback permitted under
Section 6.11 or (ii) any Real Estate Asset
that the Requisite Lenders have
determined is material to the business,
operations, properties, assets,
condition (financial or otherwise) or
prospects of Holdings or any Subsidiary
thereof, including Borrower.
"MOODY'S" means Moody's Investor Services, Inc.
"MORTGAGE" means a Mortgage or Deed of Trust substantially in
the
form of Exhibit J, as it may be amended,
supplemented or otherwise modified from
time to time.
"MULTIEMPLOYER PLAN" means any "multiemployer plan" as defined
in
Section 3(37) of ERISA with respect to
which Holdings, any Subsidiary or any
ERISA Affiliate has, or would reasonably be
expected to have, any liability
(whether absolute or contingent).
"NAIC" means The National Association of Insurance
Commissioners,
and any successor thereto.
"NARRATIVE REPORT" means, with respect to the financial
statements
for which such narrative report is
required, a narrative report describing the
operations of Borrower and its Subsidiaries
in the form prepared for
presentation to senior management thereof
for the applicable Fiscal Quarter or
Fiscal Year and for the period from the
beginning of the then current Fiscal
Year to the end of such period to which
such financial statements relate.
"NET
ASSET SALE PROCEEDS" means, with respect to any Asset Sale, an
amount equal to:
27
<PAGE>
(i) Cash payments (including any Cash received by way of
deferred
payment pursuant to, or by monetization of,
a note receivable or otherwise, but
only as and when so received) received by
Holdings or any of its Subsidiaries
from such Asset Sale, minus
(ii) any bona fide direct costs or expenses incurred in
connection
with such Asset Sale and payable to a
Person that is not Holdings or a
Subsidiary thereof, including without
limitation, (a) income or gains taxes
payable by the seller as a result of any
gain recognized in connection with such
Asset Sale, (b) payment of the outstanding
principal amount of, premium or
penalty, if any, and interest on any
Indebtedness permitted to be incurred under
Section 6.1 (other than the Loans or the
Term Loans) that is secured by a Lien
on the stock or assets in question and that
is required to be repaid under the
terms thereof as a result of such Asset
Sale and (c) a reasonable reserve for
any indemnification payments (fixed or
contingent) attributable to seller's
indemnities and representations and
warranties to purchaser in respect of such
Asset Sale undertaken by Holdings or a
Subsidiary thereof in connection with
such Asset Sale and (d) brokers fees,
accountant fees and expenses, counsel fees
and expenses and other termination
costs.
"NET INSURANCE/CONDEMNATION PROCEEDS" means an amount equal to:
(i) any Cash payments or proceeds received by Holdings or any of
its
Subsidiaries (a) under any casualty
insurance policy in respect of a covered
loss thereunder or (b) as a result of the
taking of any assets of Holdings or
any of its Subsidiaries by any Person
pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a
sale of any such assets to a
purchaser with such power under threat of
such a taking, minus
(ii) (a) any actual and reasonable costs incurred by Holdings or
any
of its Subsidiaries in connection with the
adjustment or settlement of any
claims of Holdings or such Subsidiary in
respect thereof and payable to a Person
that is not Holdings or its Subsidiaries,
(b) any bona fide direct costs
incurred in connection with any sale of
such assets as referred to in clause
(i)(b) of this definition, including income
taxes payable as a result of any
gain recognized in connection therewith and
(c) actual and reasonable counsel
fees and expenses.
"NON-CASH
PAY" means:
(a) with respect to any Preferred Stock, that such Preferred
Stock
is not Cash-Pay Preferred Stock; and
(b) with respect to any Capital Stock (other than Preferred
Stock),
that such Capital Stock does not require
any cash payments (whether in respect
of dividends, redemption, repurchase or
otherwise) to be made thereon or in
respect thereof on or prior to the date
that is 91 days after the Revolving
Commitment Termination Date.
"NON-US LENDER" as defined in Section 2.19(c).
"NOTE" means a Revolving Loan Note or a Swing Line Note.
"NOTICE" means a Funding Notice, an Issuance Notice, or a
Conversion/Continuation Notice.
28
<PAGE>
"OBLIGATIONS" means the Revolving Obligations and the Term
Obligations.
"OBLIGEE GUARANTOR" as defined in Section 7.7.
"ORGANIZATIONAL DOCUMENTS" means (i) with respect to any
corporation, its certificate or articles of
incorporation or organization, as
amended, and its by-laws, as amended, (ii)
with respect to any limited
partnership, its certificate of limited
partnership, as amended, and its
partnership agreement, as amended, (iii)
with respect to any general
partnership, its partnership agreement, as
amended, (iv) with respect to any
limited liability company, its articles of
organization, as amended, and its
operating agreement, as amended and (v)
with respect to any other business
entity, the agreement or documents
analogous to any of the foregoing. In the
event any term or condition of this
Agreement or any other Credit Document
requires any Organizational Document to be
certified by a secretary of state or
similar governmental official, the
reference to any such "Organizational
Document" shall only be to a document of a
type customarily certified by such
governmental official.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PENSION PLAN" means any employee benefit plan within the meaning
of
Section 3(3) of ERISA, other than a
Multiemployer Plan, which is subject to
Title IV of ERISA, and with respect to
which Holdings, any Subsidiary or any
ERISA Affiliate has, or would reasonably be
expected to have, any liability
(whether absolute or contingent).
"PERMITTED ACQUISITION" means any acquisition by Borrower or any
of
its wholly-owned Guarantor Subsidiaries,
whether by purchase, merger or
otherwise, of all or substantially all of
the assets of, all of the Capital
Stock of, or a business line or unit or a
division of, any Person; provided,
(i) immediately prior to, and after giving effect thereto, no
Default or
Event of Default shall have occurred and be continuing or would
result therefrom;
(ii) all transactions in connection therewith shall be
consummated in accordance with all applicable laws and in
conformity with
all
applicable Governmental Authorizations;
(iii) in the case of the acquisition of Capital Stock, all of
the
Capital Stock (except for any such Securities in the nature of
directors'
qualifying shares required pursuant to applicable law) acquired
or
otherwise issued by such Person or any newly formed Subsidiary
of
Borrower
in connection with such acquisition shall be owned 100% by
Borrower
or a Guarantor Subsidiary thereof, and Borrower shall have
taken,
or caused
to be taken, as of the date such Person becomes a Subsidiary of
Company,
each of the actions set forth in Sections 5.10 and/or 5.11, as
applicable;
(iv) Holdings and its Subsidiaries shall be in compliance with
any
applicable financial covenants set forth in Section 6.8 on a pro
forma
basis
after giving effect to such acquisition as of the last day of
the
Fiscal
Quarter most recently ended, (as determined in accordance with
Section
1.3;
29
<PAGE>
(v) Borrower shall have delivered to Administrative Agent at
least 10
Business Days prior to such proposed acquisition (x) all
material
transactional documents (which may be in draft form) in
connection
therewith,
(y) a Compliance Certificate evidencing compliance with Section
6.8, if
applicable, as required under clause (iv) above, together with
all
relevant
financial information with respect to such acquired assets,
including,
without limitation, the aggregate consideration for such
acquisition and any other information required to demonstrate
compliance
with
Section 6.8 and (z) a Borrowing Base Certificate demonstrating
compliance
with clause (vii) below;
(vi) any Person or assets or division as acquired in
accordance
herewith (y) shall be in same business or lines of business in
which
Borrower and/or its Subsidiaries are engaged as of the Closing
Date
or a
business reasonably related thereto and (z) shall have
generated
positive cash flow for the
twelve-month period most recently ended prior
to the
date of such acquisition; and
(vii) immediately after giving effect thereto, the Borrowing
Availability shall be no less than $10,000,000.
"PERMITTED CURE SECURITY" means a Non-Cash Pay equity security
of
Holdings issued pursuant to Section
8.2.
"PERMITTED DISCRETION" means the reasonable exercise of the
Administrative Agent's good faith judgment
in consideration of any factor which
is reasonably likely to (i) adversely
affect the value of any Collateral, the
enforceability or priority of the Liens
thereon or the amount that the
Administrative Agent and the Lenders would
be likely to receive (after giving
consideration to delays in payment and
costs of enforcement) in the liquidation
thereof or (ii) materially increase the
likelihood that the Lenders would not
receive payment in full in cash for all of
the Obligations.
"PERMITTED LIENS" means each of the Liens permitted pursuant to
Section 6.2.
"PERMITTED REFINANCING" means, as to any Indebtedness, the
Refinancing of such Indebtedness
("Refinancing Indebtedness"); provided that, in
the case of such Refinancing Indebtedness,
the following conditions are
satisfied:
(i) the weighted average life to maturity of such Refinancing
Indebtedness shall be greater than or equal to the weighted average
life
to
maturity of the Indebtedness being refinanced, and the first
scheduled
principal
payment in respect of such Refinancing Indebtedness shall not
be
earlier
than the first scheduled principal payment in respect of the
Indebtedness being refinanced;
(ii) the principal amount of such Refinancing Indebtedness
shall be
less than or equal to the principal amount then outstanding of
the
Indebtedness being refinanced;
(iii) the respective obligor or obligors shall be the same on
the
Refinancing Indebtedness as on the Indebtedness being
refinanced;
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<PAGE>
(iv) the security, if any, for the Refinancing Indebtedness
shall be
the same as that for the Indebtedness being refinanced (except
to
the extent
that less security is granted to holders of Refinancing
Indebtedness); and
(v) no material terms applicable to such Refinancing
Indebtedness or, if applicable, the related guarantees of such
Refinancing
Indebtedness (including covenants, events of default, remedies
and
acceleration rights) shall be materially more favorable to the
refinancing
lenders
than the terms that are applicable under the instruments and
documents
governing the Indebtedness being refinanced, in each case,
taken
as a
whole.
"PERSON" means and includes natural persons, corporations,
limited
partnerships, general partnerships, limited
liability companies, limited
liability partnerships, joint stock
companies, Joint Ventures, associations,
companies, trusts, banks, trust companies,
land trusts, business trusts or other
organizations, whether or not legal
entities, and Governmental Authorities.
"PHASE I REPORT" means, with respect to any Facility, a report
that
is either (A) set forth on Schedule 3.1(k),
or (B) in form and substance
reasonably satisfactory to Administrative
Agent that (i) conforms to the ASTM
Standard Practice for Environmental Site
Assessments: Phase I Environmental Site
Assessment Process, E 1527-00, (ii) was
conducted no more than six months prior
to the date such report is required to be
delivered hereunder, by one or more
environmental consulting firms reasonably
satisfactory to Administrative Agent,
(iii) includes an assessment of
asbestos-containing materials at such Facility,
(iv) is accompanied by (a) an estimate of
the reasonable worst-case cost of
investigating and remediating any Hazardous
Materials Activity identified in the
Phase I Report as giving rise to an actual
or potential material violation of
any Environmental Law or as presenting a
material risk of giving rise to a
material Environmental Claim, and (b) a
current compliance audit. All Phase I
Reports shall expressly specify that the
report may be relied on by
Administrative Agent or Administrative
Agent shall have received a reliance
letter so stating.
"PLEDGE AND SECURITY AGREEMENT" means the Pledge and Security
Agreement, dated as of the Closing Date, by
and among Borrower, each Guarantor
and Collateral Agent.
"PREFERRED STOCK" means, with respect to any corporation,
capital
stock issued by such corporation that is
entitled to a preference or priority,
in respect of dividends or distribution
upon liquidation, over some other class
of capital stock issued by such
corporation.
"PRIME RATE" means the rate of interest quoted in The Wall
Street
Journal, Money Rates Section as the Prime
Rate (currently defined as the base
rate on corporate loans posted by at least
75% of the nation's thirty (30)
largest banks), as in effect from time to
time. The Prime Rate is a reference
rate and does not necessarily represent the
lowest or best rate actually charged
to any customer. Any Agent or any other
Lender may make commercial loans or
other loans at rates of interest at, above
or below the Prime Rate.
"PRINCIPAL OFFICE" means, for each of Administrative Agent,
Swing
Line Lender and Issuing Bank, such Person's
"Principal Office" as set forth on
Appendix B, or such other
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<PAGE>
office as such Person may from time to time
designate in writing to Borrower,
Administrative Agent and each Lender.
"PROJECTIONS" as defined in Section 4.8.
"PRO RATA SHARE" means with respect to all payments,
computations
and other matters relating to the
Commitment or Revolving Loans of any Lender or
any Letters of Credit issued or
participations purchased therein by any Lender
or any participations in any Swing Line
Loans purchased by any Lender, the
percentage obtained by dividing (a) the
Revolving Exposure of that Lender by (b)
the aggregate Revolving Exposure of all
Lenders.
"REAL ESTATE ASSET" means, at any time of determination, any
interest (fee or leasehold) then owned by
any Credit Party in any real property.
"RECORD DOCUMENT" means, with respect to any Leasehold Property,
(i)
the lease evidencing such Leasehold
Property or a memorandum thereof, executed
and acknowledged by the owner of the
affected real property, as lessor, or (ii)
if such Leasehold Property was acquired or
subleased from the holder of a
Recorded Leasehold Interest, the applicable
assignment or sublease document,
executed and acknowledged by such holder,
in each case in form sufficient to
give such constructive notice upon
recordation and otherwise in form reasonably
satisfactory to Collateral Agent.
"RECORDED LEASEHOLD INTEREST" means a Leasehold Property with
respect to which a Record Document has been
recorded in all places necessary or
desirable, in Administrative Agent's
reasonable judgment, to give constructive
notice of such Leasehold Property to
third-party purchasers and encumbrancers of
the affected real property.
"REFINANCE" means, in respect of any Indebtedness, to
refinance,
extend, renew, defease, amend, modify,
supplement, restructure, replace, refund
or repay, or to issue other Indebtedness,
in exchange or replacement for, such
Indebtedness in whole or in part.
"REFINANCED" and "REFINANCING" shall have
correlative meanings.
"REFINANCING NOTE INDENTURE" means the trust indenture pursuant
to
which any Refinancing Notes may be issued
in accordance with the terms of this
Agreement, as such indenture may be further
amended, restated, supplemented,
modified, extended, renewed or replaced
from time to time in accordance with
Section 6.16 of this Agreement.
"REFINANCING NOTES" as defined in Section 6.1(k).
"REFUNDED SWING LINE LOANS" as defined in Section 2.2(b)(iv).
"REGISTER" as defined in Section 2.6(b).
"REGULATION D" means Regulation D of the Board of Governors of
the
Federal Reserve System, as in effect from
time to time.
"REIMBURSEMENT DATE" as defined in Section 2.3(d).
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<PAGE>
"RELATED AGREEMENTS" means, collectively, the Stock Purchase
Agreement, the Stockholders Agreement and
the documents governing the Senior
Subordinated Notes, the Refinancing Notes
and the Existing Capital Leases.
"RELATED FUND" means any investment fund that is (i) engaged in
making, purchasing, holding or otherwise
investing in commercial loans and
similar extensions of credit and (ii) is
administered and managed by (a) a
Lender, (b) an Affiliate of a Lender or (c)
an entity or an Affiliate of an
entity that administers or manages a
Lender.
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, seepage, escaping,
deposit, disposal, discharge, dispersal,
dumping, leaching or migration of any
Hazardous Material into the indoor or
outdoor environment (including the
abandonment or disposal of any barrels,
containers or other closed receptacles
containing any Hazardous Material),
including the movement of any Hazardous
Material through the air, soil, surface
water or groundwater.
"REPLACEMENT LENDER" as defined in Section 2.22.
"REQUISITE LENDERS" means one or more Lenders having or holding
Revolving Exposure and representing more
than 50% of the sum of the aggregate
Revolving Exposure of all Lenders.
"RESERVES" means (a) reserves reasonably established by
Administrative Agent from time to time
against Eligible Inventory pursuant to
Section 5.15, (b) reserves established by
Administrative Agent from time to time
against Eligible Inventory, in the full
amount necessary to cover all shipping
and other charges for items shipped by
boat, (c) reserves established by
Administrative Agent pursuant to specific
terms of Credit Documents other than
the Credit Agreement, and (d) such other
reserves against Eligible Accounts,
Eligible Inventory or Borrowing
Availability of any Credit Party that
Administrative Agent may, in its reasonable
credit judgment, establish from time
to time, including, without limitation,
reserves established on account of any
Liens which may be prior in right to the
First Priority Lien of Collateral Agent
for the benefit of the Revolving Secured
Parties, including, without limitation,
any Liens which may be permitted under
Section 6.2(q).
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on
account of any shares of any class of stock
of Holdings or Borrower now or hereafter
outstanding, except a dividend payable
solely in shares of that class of stock to
the holders of that class; (ii) any
redemption, retirement, sinking fund or
similar payment, purchase or other
acquisition for value, direct or indirect,
of any shares of any class of stock
of Holdings or Borrower now or hereafter
outstanding; (iii) any payment made to
retire, or to obtain the surrender of, any
outstanding warrants, options or
other rights to acquire shares of any class
of stock of Holdings or Borrower now
or hereafter outstanding; (iv) management
or similar fees payable to Sponsor or
any of its Affiliates; (v) any payment or
prepayment of principal of, premium,
if any, or interest on, or redemption,
purchase, repurchase, retirement,
defeasance (including in-substance or legal
defeasance), sinking fund or similar
payment (or any offer to do any of the
foregoing) with respect to the Senior
Subordinated Notes, the Refinancing Notes,
the SAC Notes and any other
Indebtedness which is subordinated to the
Revolving Obligations.
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"REVOLVING COMMITMENT PERIOD" means the period from the Closing
Date
to but excluding the Revolving Commitment
Termination Date.
"REVOLVING COMMITMENT TERMINATION DATE" means the earliest to
occur
of (i) the fifth (5th) anniversary of the
Closing Date, (ii) the date the
Commitments are permanently reduced to zero
pursuant to Section 2.12(b) or 2.13,
and (iii) the date of the termination of
the Commitments pursuant to Section
8.1.
"REVOLVING EXPOSURE" means, with respect to any Lender as of
any
date of determination, (i) prior to the
termination of the Commitments, that
Lender's Commitment; and (ii) after the
termination of the Commitments, the sum
of (a) the aggregate outstanding principal
amount of the Revolving Loans of that
Lender, (b) in the case of Issuing Bank,
the aggregate Letter of Credit Usage in
respect of all Letters of Credit issued by
that Lender (net of any
participations by Lenders in such Letters
of Credit), (c) the aggregate amount
of all participations by that Lender in any
outstanding Letters of Credit or any
unreimbursed drawing under any Letter of
Credit, (d) in the case of Swing Line
Lender, the aggregate outstanding principal
amount of all Swing Line Loans (net
of any participations therein by other
Lenders), and (e) the aggregate amount of
all participations therein by that Lender
in any outstanding Swing Line Loans.
"REVOLVING LOAN" means a Loan made by a Lender to Borrower
pursuant
to Section 2.1(a).
"REVOLVING LOAN NOTE" means a promissory note in the form of
Exhibit
B-1, as it may be amended, supplemented or
otherwise modified from time to time.
"REVOLVING OBLIGATIONS" means all obligations of every nature
of
each Credit Party from time to time owed to
the Agents (including former
Agents), the Lenders or any of them, under
any Credit Document, whether for
principal, interest (including interest
which, but for the filing of a petition
in bankruptcy with respect to such Credit
Party, would have accrued on any
Revolving Obligation, whether or not a
claim is allowed against such Credit
Party for such interest in the related
bankruptcy proceeding), reimbursement of
amounts drawn under Letters of Credit,
fees, expenses, indemnification
(including, without limitation, pursuant to
Section 10.3 hereof) or otherwise.
"REVOLVING SECURED PARTIES" has the meaning assigned to such term
in
the Pledge and Security Agreement.
"S&P" means Standard & Poor's Ratings Group, a division of
The
McGraw Hill Corporation.
"SAC NOTES" means the 10.25% Senior Subordinated Notes dated as
of
December 11, 1997 by Stanadyne Automotive
Corp., as issuer.
"SECOND PRIORITY" means, with respect to any Lien purported to
be
created on any Collateral pursuant to any
Collateral Document, that such Lien is
prior in right to any other Lien thereon,
other than the First Priority Lien in
favor of the Collateral Agent for the
benefit of the Term Secured Parties and
Permitted Liens described in clauses (b)
through (f), (i), (j), (k), (l) and
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<PAGE>
(p) of Section 6.2 and that such Lien is
subordinate to the First Priority Lien
in the manner set forth in the
Intercreditor Agreement.
"SECURED PARTIES" means the Revolving Secured Parties and the
Term
Secured Parties.
"SECURITIES" means any stock, shares, partnership interests,
voting
trust certificates, certificates of
interest or participation in any
profit-sharing agreement or arrangement,
options, warrants, bonds, debentures,
notes, or other evidences of indebtedness,
secured or unsecured, convertible,
subordinated or otherwise, or in general
any instruments commonly known as
"securities" or any certificates of
interest, shares or participations in
temporary or interim certificates for the
purchase or acquisition of, or any
right to subscribe to, purchase or acquire,
any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from
time to time, and any successor
statute.
"SELLERS" means American Industrial Partners Capital Fund II,
L.P.,
and the other stockholders of Stanadyne
Automotive Holding Corp. set forth on
Schedule I to the Stock Purchase
Agreement.
"SENIOR SUBORDINATED NOTE INDENTURE" means the Indenture dated as
of
the date hereof pursuant to which Borrower
has issued its Senior Subordinated
Notes due 2014, as such indenture may be
further amended, restated,
supplemented, modified, extended, renewed
or replaced from time to time in
accordance with Section 6.16 of this
Agreement.
"SENIOR SUBORDINATED NOTES" means Borrower's unsecured Senior
Subordinated Notes due 2014, dated the date
hereof, and any registered senior
subordinated notes having substantially
identical terms and issued pursuant to
the Senior Subordinated Indenture in
exchange for the initial, unregistered
Senior Subordinated Notes, together with
any additional senior subordinated
notes issued under the Senior Subordinated
Note Indenture after the Closing Date
and expressly permitted hereunder.
"SOLE LEAD ARRANGER" as defined in the preamble hereto.
"SOLVENCY CERTIFICATE" means a Solvency Certificate of the
chief
financial officer of Holdings substantially
in the form of Exhibit G-2.
"SOLVENT" means, with respect to any Credit Party, that as of
the
date of determination, both (i) (a) the sum
of such Credit Party's debt
(including contingent liabilities) does not
exceed the present fair saleable
value of such Credit Party's present
assets; (b) such Credit Party's capital is
not unreasonably small in relation to its
business as contemplated on the
Closing Date and reflected in the
Projections or with respect to any transaction
contemplated or undertaken after the
Closing Date; and (c) such Person has not
incurred and does not intend to incur, or
believe (nor should it reasonably
believe) that it will incur, debts beyond
its ability to pay such debts as they
become due (whether at maturity or
otherwise); and (ii) such Person is "solvent"
within the meaning given that term and
similar terms under applicable laws
relating to fraudulent transfers and
conveyances. For purposes of this
definition, the amount of any
35
<PAGE>
contingent liability at any time shall be
computed as the amount that, in light
of all of the facts and circumstances
existing at such time, represents the
amount that can reasonably be expected to
become an actual or matured liability
(irrespective of whether such contingent
liabilities meet the criteria for
accrual under Statement of Financial
Accounting Standard No. 5).
"SPONSOR" means Kohlberg IV, L.P., its Control Investment
Affiliates, Co-Investment Partners, L.P., a
Delaware limited partnership,
Massachusetts Mutual Life Insurance
Company, a Massachusetts corporation, Tower
Square Capital Partners L.P., a Delaware
limited partnership, National City
Equity Partners, LLC, an Ohio limited
liability company, Hamilton Lane Private
Equity Fund V L.P., a Guernsey limited
partnership, Antares Capital Corporation,
a Delaware corporation, Wilton Private
Equity Fund, LLC, a Delaware limited
liability company, DuPont Pension Trust, a
Massachusetts trust, and James
Wiggins, an individual.
"SPONSOR EQUITY" means the Capital Stock of Holdings purchased
by
Sponsor on or prior to the Closing Date in
an aggregate Cash amount equal to not
less than 26% of the Purchase Price (as
defined in the Stock Purchase
Agreement).
"STOCK
PURCHASE AGREEMENT" means the Stock Purchase Agreement dated
as of June 23, 2004 among KSTA Acquisition,
LLC and the Sellers and other
parties thereto.
"SUBJECT TRANSACTION" as defined in Section 1.3.
"SUBSIDIARY" means, with respect to any Person, any
corporation,
partnership, limited liability company,
association, joint venture or other
business entity of which more than 50% of
the total voting power of shares of
stock or other ownership interests entitled
(without regard to the occurrence of
any contingency) to vote in the election of
the Person or Persons (whether
directors, managers, trustees or other
Persons performing similar functions)
having the power to direct or cause the
direction of the management and policies
thereof is at the time owned or controlled,
directly or indirectly, by that
Person or one or more of the other
Subsidiaries of that Person or a combination
thereof; provided, in determining the
percentage of ownership interests of any
Person controlled by another Person, no
ownership interest in the nature of a
"qualifying share" of the former Person
shall be deemed to be outstanding.
"SWING LINE LENDER" means CIT in its capacity as Swing Line
Lender
hereunder, together with its permitted
successors and assigns in such capacity.
"SWING LINE LOAN" means a Loan made by Swing Line Lender to
Borrower
pursuant to Section 2.2.
"SWING LINE NOTE" means a promissory note in the form of
Exhibit
B-2, as it may be amended, supplemented or
otherwise modified from time to time.
"SWING LINE SUBLIMIT" means the lesser of (i) $5,000,000 and
(ii)
the aggregate unused amount of Commitments
then in effect.
"SWING LINE SWEEP PERIOD" as defined in Section 2.2(b)(vii).
"SYNDICATION AGENT" as defined in the preamble hereto.
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<PAGE>
"TAX" means any present or future tax, levy, impost, duty,
assessment, charge, fee, deduction or
withholding of any nature and whatever
called, by whomsoever, on whomsoever and
wherever imposed, levied, collected,
withheld or assessed; provided, "Tax on the
overall net income" of a Person
shall (i) be construed as a reference to a
tax imposed by the jurisdiction or
any subdivision thereof in which that
Person is organized or in which that
Person's applicable principal office
(and/or, in the case of a Lender, its
lending office) is located or in which that
Person (and/or, in the case of a
Lender, its lending office) is deemed to be
doing business (a "RELEVANT TAX
JURISDICTION") on all or part of the net
income, profits or gains (whether
worldwide, or only insofar as such income,
profits or gains are considered to
arise in or to relate to a particular
jurisdiction, or otherwise) of that Person
(and/or, in the case of a Lender, its
applicable lending office) and (ii)
include all franchise taxes, branch taxes,
taxes on doing business or taxes on
the overall capital or net worth of any
such Person (and/or in the case of a
Lender, its Principal Office), in each case
imposed by any Relevant Tax
Jurisdiction in lieu of income, profits or
gains taxes.
"TERM COLLATERAL AGENT" means the "Collateral Agent" as defined
in
the Term Credit Agreement or any collateral
agent under a Permitted Refinancing
of the Term Credit Agreement.
"TERM CREDIT AGREEMENT" means the Credit and Guaranty
Agreement,
dated as of the date hereof, by and among
Borrower, the Guarantors, and GSCP, as
Administrative Agent, Sole Lead Arranger,
Sole Bookrunner, Collateral Agent and
Syndication Agent, with regard to
$65,000,000 in Term Loans, as it may be
amended, supplemented or otherwise modified
from time to time.
"TERM LOANS" means the Term Loans under (and as defined in) the
Term
Credit Agreement, and includes any
Permitted Refinancings thereof.
"TERM OBLIGATIONS" means the Term Obligations under (and as
defined
in) the Term Credit Agreement, and includes
any Permitted Refinancings thereof.
"TERM SECURED PARTIES" as defined in the Term Credit Agreement,
or
any credit agreement or comparable document
in respect of a Permitted
Refinancing of the Term Loans.
"TERMINATED LENDER" as defined in Section 2.22.
"TITLE POLICY" as defined in Section 3.1(i).
"TOTAL UTILIZATION OF REVOLVING COMMITMENTS" means, as at any
date
of determination, the sum of (i) the
aggregate principal amount of all
outstanding Revolving Loans (other than
Revolving Loans made for the purpose of
repaying any Refunded Swing Line Loans or
reimbursing Issuing Bank for any
amount drawn under any Letter of Credit,
but not yet so applied), (ii) the
aggregate principal amount of all
outstanding Swing Line Loans, and (iii) the
Letter of Credit Usage.
"TRANSACTION COSTS" means the fees, costs and expenses payable
by
Holdings, Borrower or any of Borrower's
Subsidiaries on or before the Closing
Date in connection with the
Transactions.
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<PAGE>
"TRANSACTIONS" means consummation of the Acquisition, the
contribution of Sponsor Equity, the
completion of the Debt Tender, the
assumption of the Existing Capital Leases,
the repayment of the Existing
Indebtedness, the entering into of this
Agreement and the Term Credit Agreement
and the issuance of the Senior Subordinated
Notes.
"TYPE OF LOAN" means (i) with respect to Revolving Loans, a
Base
Rate Loan or a Eurodollar Rate Loan, and
(ii) with respect to Swing Line Loans,
a Base Rate Loan.
"UCC"
means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any
applicable jurisdiction.
"UNADJUSTED EURODOLLAR RATE COMPONENT" means that component of
the
interest costs to Borrower in respect of a
Eurodollar Rate Loan that is based
upon the rate obtained pursuant to clause
(i) of the definition of Adjusted
Eurodollar Rate.
1.2.
ACCOUNTING TERMS. Except as otherwise expressly provided herein,
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 Holdings to
Lenders pursuant to Section 5.1(a),
5.1(b) and 5.1(c) shall be prepared in
accordance with GAAP as in effect at the
time of such preparation (and delivered
together with the reconciliation
statements provided for in Section 5.1(e),
if applicable). For purposes of
determining compliance with the covenants
contained in Section 6 and the
calculation of the Leverage Ratio all
accounting terms herein shall be
interpreted and all accounting
determinations hereunder (in each case, unless
otherwise provided for or defined herein)
shall be made in accordance with GAAP
as used in the most recent of the annual
financial statements referred to in
Section 4.7 and applied on a basis
consistent with the application used in the
financial statements referred to in Section
4.7; provided, further, that if
Borrower notifies Administrative Agent that
Borrower wishes to amend any
covenant in Section 2.13 or Section 6 or
the Leverage Ratio or any related
definition to eliminate the effect of any
change in GAAP occurring after the
date of this Agreement on the operation of
such covenant (or if Administrative
Agent notifies Borrower that the Requisite
Lenders wish to amend Section 2.13 or
Section 6 or the Leverage Ratio or any
related definition for such purpose),
then (i) Borrower and Administrative Agent
shall negotiate in good faith to
agree upon an appropriate amendment to such
covenant and (ii) Borrower's
compliance with such covenant and the
Leverage Ratio shall be determined on the
basis of GAAP in effect immediately before
the relevant change in GAAP became
effective until such covenant is amended in
a manner satisfactory to Borrower
and the Requisite Lenders. For the purposes
of determining compliance under
Sections 6.1, 6.2, 6.6, 6.7 and 6.8 with
respect to any amount in a currency
other than Dollars, such amount shall be
deemed to equal the Dollar equivalent
thereof at the time such amount was
incurred or expended, as the case may be.
1.3.
CERTAIN CALCULATIONS. With respect to any period during which a
Permitted Acquisition or an Asset Sale has
occurred (each, a "SUBJECT
TRANSACTION"), Consolidated Adjusted EBITDA
(except with respect to calculations
of Consolidated Excess Cash Flow) and the
components of Consolidated Fixed
Charges shall be calculated with respect to
such period on a pro forma basis
(including pro forma adjustments arising
out of events which are directly
attributable to a specific transaction or
which are to be implemented by the
business subject to that transaction or by
Borrower and its Subsidiaries as a
result of such Subject Transaction, are
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<PAGE>
factually supportable and are expected to
have a continuing impact, in each case
determined on a basis consistent with
Article 11 of Regulation S-X promulgated
under the Securities Act and as interpreted
by the staff of the Securities and
Exchange Commission or as otherwise
reasonably approved by Administrative Agent,
which would include cost savings resulting
from head count reduction, closure of
facilities and similar restructuring
charges, which pro forma adjustments shall
be certified by the chief financial officer
of Borrower) using the historical
financial statements of any business so
acquired or to be acquired or sold or to
be sold and the consolidated financial
statements of Borrower and its
Subsidiaries which shall be reformulated as
if such Subject Transaction, and any
Indebtedness incurred or repaid in
connection therewith, had been consummated or
incurred or repaid at the beginning of such
period (and assuming that such
Indebtedness bears interest during any
portion of the applicable measurement
period prior to the relevant acquisition at
the weighted average of the interest
rates applicable to outstanding Loans
incurred during such period).
1.4.
INTERPRETATION, ETC. Any of the terms defined herein may, unless
the
context otherwise requires, be used in the
singular or the plural, depending on
the reference. References herein to any
Section, Appendix, Schedule or Exhibit
shall be to a Section, an Appendix, a
Schedule or an Exhibit, as the case may
be, hereof unless otherwise specifically
provided. The use herein of the word
"include" or "including", when following
any general statement, term or matter,
shall not be construed to limit such
statement, term or matter to the specific
items or matters set forth immediately
following such word or to similar items
or matters, whether or not non limiting
language (such as "without limitation"
or "but not limited to" or words of similar
import) is used with reference
thereto, but rather shall be deemed to
refer to all other items or matters that
fall within the broadest possible scope of
such general statement, term or
matter. In computation of periods of time
from a specified date to a later
specified date, the word "from" means "from
and including", the words "to" and
"until" each mean "to but excluding", and
the word "through" means "to and
including". Unless the context otherwise
requires (i) any definition of or
reference to any agreement, instrument or
other document herein shall be
construed as referring to such agreement,
instrument or other document as from
time to time amended, supplemented and
otherwise modified in accordance with the
terms hereof, (ii) any references herein to
any Person shall be construed to
include such Person's successors and
assigns, and (iii) the words "herein",
"hereof" and "hereunder", and words of
similar import, shall be construed to
refer to this Agreement in its entirety and
not to any particular provision
hereof.
SECTION 2. LOANS AND LETTERS OF CREDIT
2.1.
REVOLVING LOANS.
(a) Revolving Commitments. During the Revolving Commitment
Period,
subject to the terms and conditions hereof,
each Lender severally agrees to make
Revolving Loans to Borrower in an aggregate
amount up to but not exceeding such
Lender's Commitment; provided, that after
giving effect to the making of any
Revolving Loans in no event shall the Total
Utilization of Revolving Commitments
exceed the lesser of (i) the Commitments
then in effect and (ii) the Borrowing
Availability then in effect, provided,
further, that no Revolving Loans shall be
made on the Closing Date. Amounts borrowed
pursuant to this Section 2.1(a)
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<PAGE>
may be repaid and, subject to the terms and
conditions of this Agreement,
reborrowed during the Revolving Commitment
Period. Each Lender's Commitment
shall expire on the Revolving Commitment
Termination Date and all Revolving
Loans and all other amounts owed hereunder
with respect to the Revolving Loans
and the Commitments shall be paid in full
no later than such date.
(b) Borrowing Mechanics for Revolving Loans.
(i) Except pursuant to Sections 2.2(b)(iv), 2.2(b)(vii) and
2.3(d),
Revolving Loans that are Base Rate Loans shall be made in an
aggregate
minimum amount of $500,000 and integral multiples of $100,000
in
excess of
that amount (or such lesser amounts as may be necessary
pursuant
to
Sections 2.2(b)(iv) and (vii)), and Revolving Loans that are
Eurodollar
Rate Loans
shall be in an aggregate minimum amount of $1,000,000 and
integral
multiples of $100,000 in excess of that amount (or such lesser
amounts as
may be necessary pursuant to Sections 2.2(b)(iv) and (vii)).
(ii) Whenever Borrower desires that Lenders make Revolving
Loans,
Borrower shall deliver to Administrative Agent a fully executed
and
delivered
Funding Notice no later than 12:00 p.m. (noon) (New York City
time) at
least three Business Days in advance of the proposed Credit
Date
in the
case of a Eurodollar Rate Loan, and at least one Business Day
in
advance of
the proposed Credit Date in the case of a Revolving Loan that
is a Base
Rate Loan. Except as otherwise provided herein, a Funding
Notice
for a
Revolving Loan that is a Eurodollar Rate Loan shall be
irrevocable
on and
after the related Interest Rate Determination Date, and
Borrower
shall be
bound to make a borrowing in accordance therewith.
(iii) Notice of receipt of each Funding Notice in respect of
Revolving
Loans, together with the amount of each Lender's Pro Rata Share
thereof,
if any, and the applicable interest rate, shall be provided by
Administrative Agent to each applicable Lender by telefacsimile
with
reasonable
promptness, but (provided Administrative Agent shall have
received
such notice by 12:00 p.m. (noon) (New York City time)) not
later
than 2:00
p.m. (New York City time) on the same day as Administrative
Agent's
receipt of such Notice from Borrower.
(iv) Each Lender shall make the amount of its Revolving Loan
available
to Administrative Agent not later than 12:00 p.m. (New York
City
time) on
the applicable Credit Date by wire transfer of same day funds
in
Dollars,
at Administrative Agent's Principal Office. Except as provided
herein,
upon satisfaction or waiver of the conditions precedent
specified
herein,
Administrative Agent shall make the proceeds of such Revolving
Loans
available to Borrower on the applicable Credit Date by causing
an
amount of
same day funds in Dollars equal to the proceeds of all such
Revolving
Loans received by Administrative Agent from Lenders to be
credited
to the account of Borrower at Administrative Agent's Principal
Office or
such other account as may be designated in writing to
Administrative Agent by Borrower.
2.2. SWING LINE LOANS.
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<PAGE>
(a) Swing Line Loans Commitments. During the Revolving
Commitment
Period, subject to the terms and conditions
hereof, Swing Line Lender hereby
agrees to make Swing Line Loans to Borrower
in an aggregate amount up to but not
exceeding the Swing Line Sublimit;
provided, that after giving effect to the
making of any Swing Line Loan, in no event
shall the Total Utilization of
Revolving Commitments exceed the lesser of
(i) the Commitments then in effect
and (ii) the Borrowing Availability then in
effect, provided, further, that no
Swing Line Loans shall be made on the
Closing Date. Amounts borrowed pursuant to
this Section 2.2 may be repaid and, subject
to the terms and conditions of this
Agreement, reborrowed during the Revolving
Commitment Period. Swing Line
Lender's Commitment shall expire on the
Revolving Commitment Termination Date
and all Swing Line Loans and all other
amounts owed hereunder with respect to
the Swing Line Loans and the Commitments
shall be paid in full no later than
such date.
(b) Borrowing Mechanics for Swing Line Loans.
(i) Swing Line Loans shall be made in an aggregate minimum
amount of
$100,000 and integral multiples of $25,000 in excess of that
amount.
(ii) Whenever Borrower desires that Swing Line Lender make a
Swing Line
Loan, Borrower shall deliver to Administrative Agent a Funding
Notice no
later than 12:00 p.m. (New York City time) on the proposed
Credit
Date.
(iii) Swing Line Lender shall make the amount of its Swing
Line Loan
available to Administrative Agent not later than 2:00 p.m. (New
York City
time) on the applicable Credit Date by wire transfer of same
day
funds in
Dollars, at Administrative Agent's Principal Office. Except as
provided
herein, upon satisfaction or waiver of the conditions precedent
specified
herein, Administrative Agent shall make the proceeds of such
Swing Line
Loans available to Borrower on the applicable Credit Date by
causing an
amount of same day funds in Dollars equal to the proceeds of
all such
Swing Line Loans received by Administrative Agent from Swing
Line
Lender to
be credited to the account of Borrower at Administrative
Agent's
Principal
Office, or to such other account as may be designated in
writing
to
Administrative Agent by Borrower.
(iv) With respect to any Swing Line Loans which have not been
voluntarily prepaid by Borrower pursuant to Section 2.12, Swing
Line
Lender may
at any time in its sole and absolute discretion deliver to
Administrative Agent (with a copy to Borrower), no later than 11:00
a.m.
(New York
City time) at least one Business Day in advance of the proposed
Credit
Date, a notice (which shall be deemed to be a Funding Notice
given
by
Borrower) requesting that each Lender holding a Commitment make
Revolving
Loans that are Base Rate Loans to Borrower on such Credit Date
in an
amount equal to the amount of such Swing Line Loans (the
"REFUNDED
SWING LINE
LOANS") outstanding on the date such notice is given which
Swing Line
Lender requests Lenders to prepay. Promptly after receipt by
Administrative Agent of such notice, Administrative Agent shall
notify
each such
Lender thereof. Anything contained in this Agreement to the
contrary
notwithstanding, (1) the proceeds of such Revolving Loans made
by
the
Lenders (other than Swing Line Lender) shall be immediately
delivered
by
Administrative Agent to Swing Line Lender (and not to Borrower)
and
applied to
repay a
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<PAGE>
corresponding portion of the Refunded Swing Line Loans and (2) on
the day
such
Revolving Loans are made, Swing Line Lender's Pro Rata Share of
the
Refunded Swing Line
Loans shall be deemed to be paid with the proceeds of
a
Revolving Loan made by Swing Line Lender to Borrower, and such
portion
of the
Swing Line Loans deemed to be so paid shall no longer be
outstanding as Swing Line Loans and shall no longer be due under
the Swing
Line Note
of Swing Line Lender but shall instead constitute part of Swing
Line
Lender's outstanding Revolving Loans to Borrower and shall be
due
under the
Revolving Loan Note issued by Borrower to Swing Line Lender.
Borrower
hereby authorizes Administrative Agent and Swing Line Lender to
charge
Borrower's accounts with Administrative Agent and Swing Line
Lender
(up to the
amount available in each such account) in order to immediately
pay Swing
Line Lender the amount of the Refunded Swing Line Loans to the
extent the
proceeds of such Revolving Loans made by Lenders, including the
Revolving
Loans deemed to be made by Swing Line Lender, are not
sufficient
to repay in full
the Refunded Swing Line Loans. If any portion of any such
amount
paid (or deemed to be paid) to Swing Line Lender should be
recovered
by or on behalf of Borrower from Swing Line Lender in
bankruptcy, by assignment for the benefit of creditors or
otherwise, the
loss of
the amount so recovered shall be ratably shared among all
Lenders
in the
manner contemplated by Section 2.16.
(v) If for any reason Revolving Loans are not made pursuant to
Section
2.2(b)(iv) in an amount sufficient to repay any amounts owed to
Swing Line
Lender in respect of any outstanding Swing Line Loans on or
before the
third Business Day after demand for payment thereof by Swing
Line
Lender, each Lender holding a Commitment shall be deemed to,
and
hereby
agrees to, have purchased a participation in such outstanding
Swing
Line
Loans, and in an amount equal to its Pro Rata Share of the
applicable
unpaid
amount together with accrued interest thereon. Upon one
Business
Day's
notice from Swing Line Lender, each Lender holding a Commitment
shall
deliver to Swing Line Lender an amount equal to its respective
participation in the applicable unpaid amount in same day funds at
the
Principal
Office of Swing Line Lender. In order to evidence such
participation each Lender holding a Commitment agrees to enter into
a
participation agreement at the request of Swing Line Lender in form
and
substance
reasonably satisfactory to Swing Line Lender. In the event any
Lender
holding a Commitment fails to make available to Swing Line
Lender
the amount
of such Lender's participation as provided in this paragraph,
Swing Line
Lender shall be entitled to recover such amount on demand from
such
Lender together with interest thereon for three Business Days at
the
rate
customarily used by Swing Line Lender for the correction of
errors
among
banks and thereafter at the Base Rate, as applicable.
(vi) Notwithstanding anything contained herein to the
contrary,
(1) each Lender's obligation to make Revolving Loans for the
purpose of
repaying any Refunded Swing Line Loans pursuant to the second
preceding
paragraph and each Lender's obligation to purchase a
participation in any unpaid Swing Line Loans pursuant to the
immediately
preceding
paragraph shall be absolute and unconditional and shall not be
affected
by any circumstance, including without limitation (A) any
set-off,
counterclaim, recoupment, defense or other right which such
Lender may
have against Swing Line Lender, any Credit Party or any other
Person for
any reason whatsoever; (B) the occurrence or continuation of a
Default or
Event of Default; (C) any adverse change in
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the
business, operations, properties, assets, condition (financial
or
otherwise)
or prospects of any Credit Party; (D) any breach of this
Agreement
or any other Credit Document by any party hereto or thereto; or
(E) any
other circumstance, happening or event whatsoever, whether or
not
similar to
any of the foregoing; provided that such obligations of each
Lender are
subject to the condition that Swing Line Lender believed in
good faith
that all conditions under Section 3.2 to the making of the
applicable
Refunded Swing Line Loans or other unpaid Swing Line Loans were
satisfied
at the time such Refunded Swing Line Loans or unpaid Swing Line
Loans were
made, or the satisfaction of any such condition not satisfied
had been
waived by the Requisite Lenders prior to or at the time such
Refunded
Swing Line Loans or other unpaid Swing Line Loans were made;
and
(2) Swing
Line Lender shall not be obligated to make any Swing Line Loans
(A) if it
has elected not to do so after the occurrence and during the
continuation of a Default or Event of Default or (B) at a time when
a
Funding
Default exists unless Swing Line Lender has entered into
arrangements reasonably satisfactory to it and Borrower to
eliminate Swing
Line
Lender's risk with respect to the Defaulting Lender's
participation
in such
Swing Line Loan, including by cash collateralizing such
Defaulting
Lender's
Pro Rata Share of the outstanding Swing Line Loans.
(vii) Notwithstanding anything contained herein to the
contrary,
no Swing Line Loans may be outstanding for more than ten
consecutive days. To the extent a Swing Line Loan has not been
voluntarily
prepaid by
Borrower pursuant to Section 2.12 within ten days of the making
of such
Swing Line Loan by Swing Line Lender, then Swing Line Lender
shall
request
Lenders make Revolving Loans pursuant to Section 2.2(b)(iv).
The
amount of
any such Swingline Amounts prepaid or repaid pursuant to
Section
2.2(b)(iv)
may not be reborrowed for a period of three days. Nothing in
this
clause (vii) shall be construed to impose any additional
obligations,
except the
obligation to request Revolving Loans pursuant to the
immediately preceding sentence, on the Swing Line Lender other than
those
obligations otherwise set forth in this Agreement.
2.3.
ISSUANCE OF LETTERS OF CREDIT AND PURCHASE OF PARTICIPATIONS
THEREIN.
(a) Letters of Credit. During the period from the Closing Date
until
the thirtieth (30th) day before the end of
the Revolving Commitment Period,
subject to the terms and conditions hereof,
Issuing Bank agrees to issue Letters
of Credit for the account of Borrower in an
aggregate amount up to but not
exceeding the Letter of Credit Sublimit;
provided:
(i) each Letter of Credit shall be denominated in Dollars;
(ii) the stated amount of each Letter of Credit shall not be
less than
$250,000 or such lesser amount as is acceptable to Issuing
Bank;
(iii) after giving effect to such issuance, (y) the Letter of
Credit
Usage shall not exceed the Letter of Credit Sublimit and (z)
the
Total
Utilization of Revolving Commitments shall not exceed the lesser
of
the
Commitments then in effect and the Borrowing Availability then
in
effect.;
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(iv) in no event shall any standby Letter of Credit have an
expiration
date later than the earlier of (1) the tenth (10th) Business
Day prior
to the Revolving Commitment Termination Date and (2) the date
which is
one year from the date of issuance of such standby Letter of
Credit;
(v) in no event shall any commercial Letter of Credit have an
expiration
date later than the earlier of (1) the tenth (10th) day prior
to the
Revolving Loan Commitment Termination Date and (2) the date
which
is 180
days from the date of issuance of such commercial Letter of
Credit;
(vi) in no event shall any Letter of Credit be issued if such
Letter of
Credit is otherwise unacceptable to Issuing Bank in its
reasonable
discretion; and
(vii) all such Letters of Credit shall provide for sight
drawings.
Subject to the foregoing, Issuing Bank may
agree that a standby Letter of Credit
will automatically be extended for one or
more successive periods not to exceed
one year each, unless Issuing Bank elects
not to extend for any such additional
period; provided, that Issuing Bank shall
not extend any such Letter of Credit
if it has received written notice that an
Event of Default has occurred and is
continuing at the time Issuing Bank must
elect to allow such extension;
provided, further, in the event a Funding
Default exists, Issuing Bank shall not
be required to issue any Letter of Credit
unless Issuing Bank has entered into
arrangements satisfactory to it,
Administrative Agent and Borrower to eliminate
Issuing Bank's risk with respect to the
participation in Letters of Credit of
the Defaulting Lender, including by cash
collateralizing such Defaulting
Lender's Pro Rata Share of the Letter of
Credit Usage.
(b) Notice of Issuance. Whenever Borrower desires the issuance of
a
Letter of Credit, it shall deliver to
Administrative Agent (with a copy to
Issuing Bank) an Issuance Notice no later
than 12:00 p.m. (New York City time)
at least three Business Days, or such
shorter period as may be agreed to by
Issuing Bank in any particular instance, in
advance of the proposed date of
issuance. Upon satisfaction or waiver of
the conditions set forth in Section
3.2, Issuing Bank shall issue the requested
Letter of Credit only in accordance
with Issuing Bank's standard operating
procedures. Promptly after the issuance
or amendment of a standby Letter of Credit,
Issuing Bank shall notify Borrower
and Administrative Agent, in writing, of
such issuance or amendment and such
notice shall be accompanied by a copy of
such issuance or amendment. Upon
receipt of such notice, Administrative
Agent shall promptly notify each Lender,
in writing, of such Letter of Credit or
amendment and if so requested by a
Lender, Administrative Agent shall furnish
such Lender with a copy of such
Letter of Credit or amendment. With regards
to commercial Letters of Credit,
Issuing Bank shall furnish Administrative
Agent, by facsimile, on the first
Business Day of each week with a report
detailing the daily aggregate commercial
Letter of Credit outstandings for the
previous week. In the event of any
conflict between the terms of a Letter of
Credit or Letter of Credit application
and this Agreement, the terms of this
Agreement shall govern and control.
(c) Responsibility of Issuing Bank With Respect to Requests for
Drawings and Payments. In determining
whether to honor any drawing under any
Letter of Credit by the beneficiary
thereof, Issuing Bank shall be responsible
only to examine the documents delivered
under such Letter of Credit with
reasonable care so as to ascertain whether
they appear on their
44
<PAGE>
face to be in accordance with the terms and
conditions of such Letter of Credit.
As between Borrower and Issuing Bank,
Borrower assumes all risks of the acts and
omissions of, or misuse of the Letters of
Credit issued by Issuing Bank, by the
respective beneficiaries of such Letters of
Credit. In furtherance and not in
limitation of the foregoing, Issuing Bank
shall not be responsible for:
(i) the form, validity, sufficiency, accuracy, genuineness or
legal
effect of any document submitted by any party in connection with
the
application for and issuance of any such Letter of Credit, even if
it
should in
fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged;
(ii) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any
such
Letter of
Credit or the rights or benefits thereunder or proceeds
thereof,
in whole
or in part, which may prove to be invalid or ineffective for
any
reason;
(iii) failure of the beneficiary of any such Letter of Credit
to comply
fully with any conditions required in order to draw upon such
Letter of
Credit so long as such conditions are complied with in all
material
respects;
(iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable,
telegraph, telex
or
otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms;
(vi) any loss or delay in the transmission or otherwise of any
document
required in order to make a drawing under any such Letter of
Credit or of the
proceeds thereof;
(vii) the misapplication by the beneficiary of any such Letter
of Credit
of the proceeds of any drawing under such Letter of Credit; or
(viii) any consequences arising from causes beyond the control
of Issuing
Bank, including any Governmental Acts;
and none of the above shall affect or
impair, or prevent the vesting of, any of
Issuing Bank's rights or powers hereunder.
Without limiting the foregoing and in
furtherance thereof, any action taken or
omitted by Issuing Bank under or in
connection with the Letters of Credit or
any documents and certificates
delivered thereunder, if taken or omitted
in good faith, shall not give rise to
any liability on the part of Issuing Bank
to Borrower. Notwithstanding anything
to the contrary contained in this Section
2.3(c), Borrower shall retain any and
all rights it may have against Issuing Bank
for any liability to the extent
arising solely out of the gross negligence
or willful misconduct of Issuing Bank
or from honoring a Letter of Credit that
does not comply in all material
respects with the conditions to draw on
such Letter of Credit.
(d) Reimbursement by Borrower of Amounts Drawn or Paid Under
Letters
of Credit. In the event Issuing Bank has
determined to honor a drawing under a
Letter of Credit, it
45
<PAGE>
shall promptly notify Borrower and
Administrative Agent, and Borrower shall
reimburse Issuing Bank on or before the
Business Day immediately following the
date on which such drawing is honored (the
"REIMBURSEMENT DATE") in an amount in
Dollars and in same day funds equal to the
amount of such honored drawing;
provided, anything contained herein to the
contrary notwithstanding, (i) unless
Borrower shall have notified Administrative
Agent and Issuing Bank prior to
10:00 a.m. (New York City time) on the date
such drawing is honored that
Borrower intends to reimburse Issuing Bank
for the amount of such honored
drawing with funds other than the proceeds
of Revolving Loans, Borrower shall be
deemed to have given a timely Funding
Notice to Administrative Agent requesting
Lenders having a Commitment to make
Revolving Loans that are Base Rate Loans on
the Reimbursement Date in an amount in
Dollars equal to the amount of such
honored drawing (and Administrative Agent
shall promptly notify each such Lender
having a Commitment of such deemed
request), and (ii) subject to satisfaction or
waiver of the conditions specified in
Section 3.2, Lenders shall, on the
Reimbursement Date, make Revolving Loans
that are Base Rate Loans in the amount
of such honored drawing, the proceeds of
which shall be applied directly by
Administrative Agent to reimburse Issuing
Bank for the amount of such honored
drawing; and provided further, if for any
reason proceeds of Revolving Loans are
not received by Issuing Bank on the
Reimbursement Date in an amount equal to the
amount of such honored drawing, Borrower
shall reimburse Issuing Bank, on
demand, in an amount in same day funds
equal to the excess of the amount of such
honored drawing over the aggregate amount
of such Revolving Loans, if any, which
are so received. Nothing in this Section
2.3(d) shall be deemed to relieve any
Lender having a Commitment from its
obligation to make Revolving Loans on the
terms and conditions set forth herein, and
Borrower shall retain any and all
rights it may have against any such Lender
resulting from the failure of such
Lender to make such Revolving Loans under
this Section 2.3(d).
(e) Lenders' Purchase of Participations in Letters of Credit.
Immediately upon the issuance of each
Letter of Credit made in accordance with
Section 3.2, each Lender having a
Commitment shall be deemed to have purchased,
and hereby agrees to irrevocably purchase,
from Issuing Bank a participation in
such Letter of Credit and any drawings
honored thereunder in an amount equal to
such Lender's Pro Rata Share (with respect
to the Commitments) of the maximum
amount which is or at any time may become
available to be drawn thereunder. In
the event that Borrower shall fail for any
reason to reimburse Issuing Bank as
provided in Section 2.3(d), Issuing Bank
shall promptly notify each Lender of
the unreimbursed amount of such honored
drawing and of such Lender's respective
participation therein based on such
Lender's Pro Rata Share of the Commitments.
Each Lender shall make available to Issuing
Bank an amount equal to its
respective participation, in Dollars and in
same day funds, at the office of
Issuing Bank specified in such notice, not
later than 12:00 p.m. (New York City
time) on the first Business Day (under the
laws of the jurisdiction in which
such office of Issuing Bank is located
which is also a Business Day in New York
City) after the date notified by Issuing
Bank. In the event that any Lender
fails to make available to Issuing Bank on
such business day the amount of such
Lender's participation in such Letter of
Credit as provided in this Section
2.3(e), Issuing Bank shall be entitled to
recover such amount on demand from
such Lender together with interest thereon
for three Business Days at the rate
customarily used by Issuing Bank for the
correction of errors among banks and
thereafter at the Base Rate. Nothing in
this Section 2.3(e) shall be deemed to
prejudice the right of any Lender to
recover from Issuing Bank any amounts made
available by such Lender to Issuing Bank
pursuant to this Section in the event
that it is determined that the payment with
respect to a Letter of Credit in
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<PAGE>
respect of which payment was made by such
Lender constituted gross negligence or
willful misconduct on the part of Issuing
Bank. In the event Issuing Bank shall
have been reimbursed by other Lenders
pursuant to this Section 2.3(e) for all or
any portion of any drawing honored by
Issuing Bank under a Letter of Credit,
Issuing Bank shall distribute to each
Lender which has paid all amounts payable
by it under this Section 2.3(e) with
respect to such honored drawing such
Lender's Pro Rata Share of all payments
subsequently received by Issuing Bank
from Borrower in reimbursement of such
honored drawing when such payments are
received. Any such distribution shall be
made to a Lender at its primary address
set forth below its name on Appendix B or
at such other address as such Lender
may request.
(f) Obligations Absolute. The obligation of Borrower to
reimburse
Issuing Bank for drawings honored under the
Letters of Credit issued by it and
to repay any Revolving Loans made by
Lenders pursuant to Section 2.3(d) and the
obligations of Lenders under Section 2.3(e)
shall be unconditional and
irrevocable and shall be paid strictly in
accordance with the terms hereof under
all circumstances including any of the
following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other
right
which Borrower or any Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any
Persons for
whom any
such transferee may be acting), Issuing Bank, Lender or any
other
Person or,
in the case of a Lender, against Borrower, whether in
connection
herewith, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between Borrower
or one
of its
Subsidiaries and the beneficiary for which any Letter of Credit
was
procured);
(iii) any draft
or other document presented under any Letter
of Credit
proving to be forged, fraudulent, invalid or insufficient in
any
respect or
any statement therein being untrue or inaccurate in any
respect;
(iv) payment by Issuing Bank under any Letter of Credit
against
presentation of a draft or other document which does not
substantially comply with the terms of such Letter of Credit;
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects
of
Holdings
or any of its Subsidiaries;
(vi) any breach hereof or any other Credit Document by any
party
thereto;
(vii) any other circumstance or happening whatsoever, whether
or not
similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Default shall
have
occurred and be continuing;
47
<PAGE>
provided, in each case, that payment by
Issuing Bank under the applicable Letter
of Credit shall not have constituted gross
negligence or willful misconduct of
Issuing Bank under the circumstances in
question.
(g) Indemnification. Without duplication of any obligation of
Borrower under Section 10.2 or 10.3, in
addition to amounts payable as provided
herein, Borrower hereby agrees to protect,
indemnify, pay and save harmless
Issuing Bank from and against any and all
claims, demands, liabilities, damages,
losses, costs, charges and reasonable
expenses (including reasonable fees,
expenses and disbursements of counsel)
which Issuing Bank may incur or be
subject to as a consequence, direct or
indirect, of (i) the issuance of any
Letter of Credit by Issuing Bank, other
than as a result of (1) the gross
negligence or willful misconduct of Issuing
Bank or (2) the wrongful dishonor by
Issuing Bank of a proper demand for payment
made under any Letter of Credit
issued by it, or (ii) the failure of
Issuing Bank to honor a drawing under any
such Letter of Credit as a result of any
Governmental Act.
2.4. PRO
RATA SHARES; AVAILABILITY OF FUNDS.
(a) Pro Rata Shares. All Loans shall be made, and all
participations
purchased, by Lenders simultaneously and
proportionately to their respective Pro
Rata Shares, it being understood that no
Lender shall be responsible for any
default by any other Lender in such other
Lender's obligation to make a Loan
requested hereunder or purchase a
participation required hereby nor shall any
Commitment of any Lender be increased or
decreased as a result of a default by
any other Lender in such other Lender's
obligation to make a Loan requested
hereunder or purchase a participation
required hereby.
(b)
Availability of Funds. Unless Administrative Agent shall have
been notified by any Lender prior to the
applicable Credit Date that such Lender
does not intend to make available to
Administrative Agent the amount of such
Lender's Loan requested on such Credit
Date, Administrative Agent may assume
that such Lender has made such amount
available to Administrative Agent on such
Credit Date and Administrative Agent may,
in its sole discretion (subject to
Section 3.2(a)), but shall not be obligated
to, make available to Borrower a
corresponding amount on such Credit Date.
If such corresponding amount is not in
fact made available to Administrative Agent
by such Lender, Administrative Agent
shall be entitled to recover such
corresponding amount on demand from such
Lender together with interest thereon, for
each day from such Credit Date until
the date such amount is paid to
Administrative Agent, at the customary rate set
by Administrative Agent for the correction
of errors among banks for three
Business Days and thereafter at the Base
Rate. If such Lender does not pay such
corresponding amount forthwith upon
Administrative Agent's demand therefor,
Administrative Agent shall promptly notify
Borrower and Borrower shall
immediately pay such corresponding amount
to Administrative Agent together with
interest thereon, for each day from such
Credit Date until the date such amount
is paid to Administrative Agent, at the
rate payable hereunder for Base Rate
Loans. Nothing in this Section 2.4(b) shall
be deemed to relieve any Lender from
its obligation to fulfill its Commitments
hereunder or to prejudice any rights
that Borrower may have against any Lender
as a result of any default by such
Lender hereunder.
2.5. USE
OF PROCEEDS. The proceeds of the Revolving Loans, Swing Line
Loans and Letters of Credit made after the
Closing Date shall be applied by
Borrower for working capital and general
corporate purposes of Holdings and its
Subsidiaries, including Permitted
48
<PAGE>
Acquisitions and capital expenditures
permitted hereunder. No portion of the
proceeds of any Credit Extension shall be
used in any manner that causes or
might cause such Credit Extension or the
application of such proceeds to violate
Regulation T, Regulation U or Regulation X
of the Board of Governors of the
Federal Reserve System or any other
regulation thereof or to violate the
Exchange Act.
2.6.
EVIDENCE OF DEBT; REGISTER; LENDERS' BOOKS AND RECORDS; NOTES.
(a) Lenders' Evidence of Debt. Each Lender shall maintain on
its
internal records an account or accounts
evidencing the Obligations of Borrower
to such Lender, including the amounts of
the Loans made by it and each repayment
and prepayment in respect thereof. Any such
recordation shall be conclusive and
binding on Borrower, absent manifest error;
provided, that the failure to make
any such recordation, or any error in such
recordation, shall not affect any
Lender's Commitments or Borrower's
Obligations in respect of any applicable
Loans; and provided, further, in the event
of any inconsistency between the
Register and any Lender's records, the
recordations in the Register shall
govern.
(b) Register. Administrative Agent shall maintain at its
Principal
Office a register for the recordation of
the names and addresses of Lenders and
the Commitments and Loans of each Lender
from time to time (the "REGISTER"). The
Register shall be available for inspection
by Borrower or any Lender at any
reasonable time and from time to time upon
reasonable prior notice.
Administrative Agent shall record in the
Register the Commitments and the Loans,
and each repayment or prepayment in respect
of the principal amount of the
Loans, and any such recordation shall be
conclusive and binding on Borrower and
each Lender, absent manifest error;
provided, that the failure to make any such
recordation, or any error in such
recordation, shall not affect any Lender's
Commitments or Borrower's Obligations in
respect of any Loan. Borrower hereby
designates CIT to serve as Borrower's agent
solely for purposes of maintaining
the Register as provided in this Section
2.6, and Borrower hereby agrees that,
to the extent CIT serves in such capacity,
CIT and its officers, directors,
employees, agents and affiliates shall
constitute "Indemnitees."
(c) Notes. If so requested by any Lender by written notice to
Borrower (with a copy to Administrative
Agent) at least two Business Days prior
to the Closing Date, or at any time
thereafter, Borrower shall execute and
deliver to such Lender (and/or, if
applicable and if so specified in such
notice, to any Person who is an assignee of
such Lender pursuant to Section
10.6) on the Closing Date (or, if such
notice is delivered after the Closing
Date, promptly after Borrower's receipt of
such notice) a Note or Notes to
evidence such Lender's Revolving Loan or
Swing Line Loan, as the case may be.
2.7.
INTEREST ON LOANS.
(a) Except as otherwise set forth herein, each Loan shall bear
interest on the unpaid principal amount
thereof from the date made through
repayment (whether by acceleration or
otherwise) thereof as follows:
(i) in the case of Revolving Loans:
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<PAGE>
(1) if a Base Rate Loan, at the Base Rate plus the
Applicable
Margin; or
(2) if a Eurodollar Rate Loan, at the Adjusted
Eurodollar
Rate plus the Applicable Margin; and
(ii) in the case of Swing Line Loans, at the Base Rate plus
the
Applicable Margin.
(b) The basis for determining the rate of interest with respect
to
any Loan (except Swing Line Loans, which
can be made and maintained as Base Rate
Loans only), and the Interest Period with
respect to any Eurodollar Rate Loan,
shall be selected by Borrower and notified
to Administrative Agent and Lenders
pursuant to the applicable Funding Notice
or Conversion/Continuation Notice, as
the case may be; provided, until the
earlier of thirty (30) days after the
Closing Date or the date that Syndication
Agent notifies Borrower that the
primary syndication of the Loans and
Commitments has been completed, as
reasonably determined by Syndication Agent,
the Revolving Loans shall be
maintained as either (1) Eurodollar Rate
Loans having an Interest Period of no
longer than one month or (2) Base Rate
Loans. If on any day a Loan is
outstanding with respect to which a Funding
Notice or Conversion/Continuation
Notice has not been delivered to
Administrative Agent in accordance with the
terms hereof specifying the applicable
basis for determining the rate of
interest, then for that day such Loan shall
be a Base Rate Loan.
(c) In connection with Eurodollar Rate Loans there shall be no
more
than five (5) Interest Periods outstanding
at any time. In the event Borrower
fails to specify between a Base Rate Loan
or a Eurodollar Rate Loan in the
applicable Funding Notice or
Conversion/Continuation Notice, such Loan (if
outstanding as a Eurodollar Rate Loan) will
be automatically converted into a
Base Rate Loan on the last day of the
then-current Interest Period for such Loan
(or if outstanding as a Base Rate Loan will
remain as, or (if not then
outstanding) will be made as, a Base Rate
Loan). In the event Borrower fails to
specify an Interest Period for any
Eurodollar Rate Loan in the applicable
Funding Notice or Conversion/Continuation
Notice, Borrower shall be deemed to
have selected an Interest Period of one
month. As soon as practicable after
10:00 a.m. (New York City time) on each
Interest Rate Determination Date,
Administrative Agent shall determine (which
determination shall, absent manifest
error, be final, conclusive and binding
upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans
for which an interest rate is then
being determined for the applicable
Interest Period and shall promptly give
notice thereof (in writing or by telephone
confirmed in writing) to Borrower and
each Lender.
(d) Interest payable pursuant to Section 2.7(a) shall be
computed
(i) in the case of Base Rate Loans based
upon the Prime Rate on the basis of a
365-day or 366-day year, as the case may
be, and (ii) in the case of Eurodollar
Rate Loans or Base Rate Loans not based
upon the Prime Rate, on the basis of a
360-day year, in each case for the actual
number of days elapsed in the period
during which it accrues. In computing
interest on any Loan, the date of the
making of such Loan or the first day of an
Interest Period applicable to such
Loan or, with respect to a Base Rate Loan
being converted from a Eurodollar Rate
Loan, the date of conversion of such
Eurodollar Rate Loan to such Base Rate
Loan, as the case may be, shall be
included, and the date
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of payment of such Loan or the expiration
date of an Interest Period applicable
to such Loan or, with respect to a Base
Rate Loan being converted to a
Eurodollar Rate Loan, the date of
conversion of such Base Rate Loan to such
Eurodollar Rate Loan, as the case may be,
shall be excluded; provided, if a Loan
is repaid on the same day on which it is
made, one day's interest shall be paid
on that Loan.
(e) Except as otherwise set forth herein, interest on each Loan
shall be payable in arrears on and to (i)
each Interest Payment Date applicable
to that Loan; (ii) upon any prepayment of
that Loan, whether voluntary or
mandatory, to the extent accrued on the
amount being prepaid; and (iii) at
maturity, including final maturity;
provided, however, with respect to any
voluntary prepayment of a Base Rate Loan,
accrued interest shall instead be
payable on the applicable Interest Payment
Date.
(f) Borrower agrees to pay to Issuing Bank, with respect to
drawings
honored under any Letter of Credit,
interest on the amount paid by Issuing Bank
in respect of each such honored drawing
from the date such drawing is honored to
but excluding the date such amount is
reimbursed by or on behalf of Borrower at
a rate equal to (i) for the period from the
date such drawing is honored to but
excluding the applicable Reimbursement
Date, the rate of interest otherwise
payable hereunder with respect to Revolving
Loans that are Base Rate Loans, and
(ii) thereafter, a rate which is 2% per
annum in excess of the rate of interest
otherwise payable hereunder with respect to
Revolving Loans that are Base Rate
Loans.
(g) Interest payable pursuant to Section 2.7(f) shall be computed
on
the basis of a 365/366-day year for the
actual number of days elapsed in the
period during which it accrues, and shall
be payable on demand or, if no demand
is made, on the date on which the related
drawing under a Letter of Credit is
reimbursed in full. Promptly upon receipt
by Issuing Bank of any payment of
interest pursuant to Section 2.7(f),
Issuing Bank shall distribute to each
Lender, out of the interest received by
Issuing Bank in respect of the period
from the date such drawing is honored to
but excluding the date on which Issuing
Bank is reimbursed for the amount of such
drawing (including any such
reimbursement out of the proceeds of any
Revolving Loans), the amount that such
Lender would have been entitled to receive
in respect of the letter of credit
fee that would have been payable in respect
of such Letter of Credit for such
period if no drawing had been honored under
such Letter of Credit. In the event
Issuing Bank shall have been reimbursed by
Lenders for all or any portion of
such honored drawing, Issuing Bank shall
distribute to each Lender which has
paid all amounts payable by it under
Section 2.3(e) with respect to such honored
drawing such Lender's Pro Rata Share of any
interest received by Issuing Bank in
respect of that portion of such honored
drawing so reimbursed by Lenders for the
period from the date on which Issuing Bank
was so reimbursed by Lenders to but
excluding the date on which such portion of
such honored drawing is reimbursed
by Borrower.
2.8.
CONVERSION/CONTINUATION.
(a) Subject to Section 2.17 and so long as no Default or Event
of
Default shall have occurred and then be
continuing, Borrower shall have the
option:
(i) to convert at any time all or any part of any Revolving
Loan equal
to $1,000,000 and integral multiples of $100,000 in excess of
that amount from one Type
of
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Loan to
another Type of Loan; provided, a Eurodollar Rate Loan may only
be
converted on the expiration of the Interest Period applicable to
such
Eurodollar
Rate Loan unless Borrower shall pay all amounts due under
Section
2.17 in connection with any such conversion; or
(ii) upon the expiration of any Interest Period applicable to
any
Eurodollar Rate Loan, to continue all or any portion of such
Loan
equal to
$1,000,000 and integral multiples of $100,000 in excess of that
amount as
a Eurodollar Rate Loan.
(b) Borrower shall deliver a Conversion/Continuation Notice to
Administrative Agent no later than 10:00
a.m. (New York City time) at least one
Business Day in advance of the proposed
conversion date (in the case of a
conversion to a Base Rate Loan) and at
least three Business Days in advance of
the proposed conversion/continuation date
(in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan).
Except as otherwise provided herein, a
Conversion/Continuation Notice for
conversion to, or continuation of, any
Eurodollar Rate Loans (or telephonic notice
in lieu thereof) shall be
irrevocable on and after the related
Interest Rate Determination Date, and
Borrower shall be bound to effect a
conversion or continuation in accordance
therewith.
2.9.
DEFAULT INTEREST. The principal amount of all Loans not paid when
due
and, to the extent permitted by applicable
law, any interest payments on the
Loans or any fees or other amounts owed
hereunder not paid when due, shall
thereafter bear interest (including
post-petition interest in any proceeding
under the Bankruptcy Code or other
applicable bankruptcy laws) payable on demand
at a rate that is 2.0% per annum in excess
of the interest rate otherwise
payable hereunder with respect to the
applicable Loans (or, in the case of any
such fees and other amounts, at a rate
which is 2.0% per annum in excess of the
highest interest rate otherwise then
payable hereunder for Base Rate Loans);
provided, in the case of Eurodollar Rate
Loans, upon the expiration of the
Interest Period in effect at the time any
such increase in interest rate is
effective such Eurodollar Rate Loans shall
thereupon become Base Rate Loans and
shall thereafter bear interest payable upon
demand at a rate which is 2.0% per
annum in excess of the highest interest
rate otherwise then payable hereunder
for Base Rate Loans. Payment or acceptance
of the increased rates of interest
provided for in this Section 2.9 is not a
permitted alternative to timely
payment and shall not constitute a waiver
of any Event of Default or otherwise
prejudice or limit any rights or remedies
of Administrative Agent or any Lender.
2.10.
FEES.
(a) Borrower agrees to pay to Lenders having Revolving
Exposure:
(i) commitment fees equal to (1) the average of the daily
difference
between (a) the Commitments, and (b) the sum of (x) the
aggregate
principal amount of outstanding Revolving Loans plus (y) the
Letter of
Credit Usage plus (z) solely with respect to the calculation of
commitment
fees relating to the Commitment of Swing Line Lender,
outstanding Swing Line Loans, times (2) the Applicable Commitment
Fee
Percentage; and
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(ii) letter of credit fees equal to (1) the Applicable Margin
for
Revolving Loans that are Eurodollar Rate Loans, times (2) the
average
aggregate
daily maximum amount available to be drawn under all such
Letters of
Credit (regardless of whether any conditions for drawing could
then be
met and determined as of the close of business on any date of
determination).
All fees referred to in this Section
2.10(a) shall be paid to Administrative
Agent at its Principal Office and upon
receipt, Administrative Agent shall
promptly distribute to each Lender its Pro
Rata Share thereof.
(b) Borrower agrees to
pay directly to Issuing Bank, for its own
account, the following fees:
(i) a fronting fee equal to 0.125%, per annum, times the
average
aggregate daily maximum amount available to be drawn under all
Letters of
Credit (determined as of the close of business on any date of
determination); and
(ii) such documentary and processing charges for any issuance,
amendment,
transfer or payment of a Letter of Credit as are in accordance
with
Issuing Bank's standard schedule for such charges and as in effect
at
the time
of such issuance, amendment, transfer or payment, as the case
may
be.
(c) All fees referred to in Section 2.10(a) and 2.10(b)(i) shall
be
calculated on the basis of a 360-day year
and the actual number of days elapsed
and shall be payable quarterly in arrears
on January 1, April 1, July 1 and
October 1 during the Revolving Commitment
Period, commencing on the first such
date to occur after the Closing Date, and
on the Revolving Commitment
Termination Date.
(d) In addition to any of the foregoing fees, Borrower agrees to
pay
to Agents such other fees in the amounts
and at the times separately agreed
upon.
2.11.
SCHEDULED PAYMENTS/COMMITMENT REDUCTIONS. Revolving Loans and
Swingline Loans shall be paid in full on
the Revolving Commitment Termination
Date.
2.12.
VOLUNTARY PREPAYMENTS/COMMITMENT REDUCTIONS.
(a) Voluntary Prepayments.
(i) Any time and from time to time:
(1) with respect to Base Rate Loans (other than Swing
Line Loans), Borrower may prepay any such Loans on any Business
Day
in whole or in part, in an aggregate minimum amount of $500,000
and
integral multiples of $100,000 in excess of that amount;
(2) with respect to Eurodollar Rate Loans, Borrower may
prepay any such Loans on any Business Day
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in whole or in part in an aggregate minimum amount of $1,000,000
and
integral multiples of $100,000 in excess of that amount; and
(3) with respect to Swing Line Loans, Borrower may
prepay any such Loans on any Business Day in whole or in part in
an
aggregate minimum amount of $100,000, and integral multiples of
$25,000 in excess of that amount.
(ii) All such
prepayments shall be made:
(1) upon not less than one Business Day's prior written
or telephonic notice in the case of Base Rate Loans (other than
Swing Line Loans);
(2) upon not less than three Business Days' prior
written or telephonic notice in the case of Eurodollar Rate
Loans;
and
(3) upon written or telephonic notice on the date of
prepayment, in the case of Swing Line Loans;
in each case given to Administrative Agent
or Swing Line Lender, as the case may
be, by 12:00 p.m. (New York City time) on
the date required and, if given by
telephone, promptly confirmed in writing to
Administrative Agent (and
Administrative Agent will promptly transmit
such telephonic or original notice
for Revolving Loans, as the case may be, by
telefacsimile or telephone promptly
confirmed in writing to each Lender) or
Swing Line Lender, as the case may be.
Upon the giving of any such notice, the
principal amount of the Loans specified
in such notice shall become due and payable
on the prepayment date specified
therein. Any such voluntary prepayment
shall be applied as specified in Section
2.14(a).
(b) Voluntary Commitment Reductions.
(i) Borrower may, upo
